As the record shows, they
function
in both roles.
Lundberg - The-Rich-and-the-Super-Rich-by-Ferdinand-Lundberg
Some people count, most do not.
How it plays out is well shown by Eisenstein:
The same generalities are perennially repeated because they are vacant expressions. Everyone may freely put into them whatever he wishes to take out. That is why they are beyond dispute. For the same reason they are also very useful. Dispensations may be broadly condemned and then selectively approved without fear of engaging in any contradictions. Senator Wiley of Wisconsin, for instance, declares that taxes "should be as fair and equitable as possible. " They should be "based primarily on ability to pay," and they should not discriminate "as between different groups. " But at the same time the senator also maintains that taxes should, "as a matter of principle," provide a "reasonable incentive to earn, to grow, to expand. " Therefore, he warmly recommends such special dispensations as a credit for dividends and a reduced rate for income from foreign investments. Apparently dispensations which remove barriers and deterrents do not discriminate "between different groups. " The public interest similarly enables Congressman Mills to distinguish between one dispensation and another. Our income tax, he charges, is "riddled with preferential benefits. " The statutes are "full of special provisions through which a shrewd or lucky taxpayer can often escape paying anywhere near his full share. " But having said all this, Congressman Mills indicates that it would not be "desirable to eliminate all the special provisions that we now permit. " Those who fail to pay their "full share" may also serve the public interest. 42
Whatever is said at these tax hearings, and whatever one may think about what is said, the result (whether explicitly intended or not) is clear: Most of the tax burden is shouldered over, directly and indirectly, on the nonpropertied, free-spending labor force, which constitutes the main body of patriots upon which the future of the Republic depends.
After protracted hearings the tax committees go into "executive session," excluding the profane. Staff writers get their instructions. Whatever is not of sentimental appeal is put into the customary opaque language, but what is of sentimental appeal such as high rates on the big incomes and baited deductions for blindness, medicine, children and superannuation is left crystal clear.
When ready the bill is reported out on the floor near the end of the session, when a great many other bills, equally suspect under careful analysis, are also awaiting passage. There is here the usual "logjam" of important legislation, with members impatient to get home to sweet-talk low-IQ voters. The "heat is on" for swift passage.
If anyone wishes, he may suggest amendments, which may or may not be voted down. The votes are there, the floor managers know, to pass the bill. The word is passed to the stalwarts, all ready to act. At the signal, the bill is easily pushed through.
The Senate Finance Committee in 1966, of which Russell Long, an Establishment stalwart, was chairman, consisted of 17 members. Six were identified by Senator Clark as of the Establishment core, 6 were from the South, 8 were from one-party states and 12 were from outside Metropolia. Only 7 were clearly non-Establishmentarians and only 6 would ordinarily be classified as liberals or rationalists.
The House Ways and Means Committee under the redoubtable Wilbur Mills of Arkansas had 11 members out of 25 from one-party states, many more from one-party districts, 8 from the South and 13 from outside Metropolia. The back country was clearly in the saddle. As the committee is under the mesmeric control of Mr. Mills, much like the New York Philharmonic under Leonard Bernstein, it is not necessary to carry the analysis further. It is all an Establishment affair.
Oddly, what radicals call Wall Street tax laws are largely put into final form by men from the swamps, bayous, tundra, bogs, crossroads, pastures, plains, bills, ravines, badlands and backwoods of the country. These men with some exceptions have not attended fancy law schools or studied at the leading universities; there is about few of them any taint of sickly intellectuality. They are, one might say, as common as any drug-store loafer. Nor did any of them, so far as I can ascertain, ever have to meet a flabbergasting payroll in private business. None was ever a super-salesman, a super- lawyer or a big-time entrepreneur. One can safely say that none has had either firsthand or theoretical knowledge of economics, finance or business affairs. As far as taxes are concerned they only know what they may have alertly picked up by hearsay in their committee rooms from visiting monetary sophists.
Yet, when all is said and done, they are well able to distinguish campaign contributors from unsound, unkempt and uncouth, not to say openly literate, ivory-tower theorists.
The Pay-Off
Contrary to common supposition a majority of those in the House and Senate enjoy incomes vaulting far beyond their relatively modest salaries of $30,000 a year plus office expenses, travel allowances and other extras. Merely at this salaried minimal they are already in the upper 1 per cent of income receivers. 43 Income-wise they make members of the Mafia look like bashful Boy Scouts.
Much of this congressional income--by all signs probably most--is obtained in ways that, although technically legal, would be condemned by almost any citizen having ordinary claims to respectability and even by many of the more high-toned swindlers who comb the bistros for hard-to-get victims.
So many, indeed, are the ways on record congressmen have of funneling furtive lucre into their pockets that they defy description at any seemly length. Some attempt must be made, however, to comprehend what goes on among political entrepreneurs in order to understand the weltaunschauung of the men who confect our tax laws.
Congress is largely but not exclusively staffed by assiduous off-the-soil moneymakers who use government as a tool in their profit-seeking operations with the gusto of a pack of hypertonic pickpockets assailing a convention of paralytics. In so doing, manifestly, its members are engaging in wholly unfair competition with the business and professional classes, especially with the small and medium-sized portions. Most business people, high or low, and even Mafians, do not have such ready toll-free access to the inner valves and spigots of government.
I am far from contending that money-making congressmen (who must be distinguished from a civilized minority genuinely concerned about the fate of the Republic) are primarily athirst for lucre. So to say would involve me in a bootless squabble with degree-flaunting sages about the tenuous and wholly irrelevant question of primacy in motivation--of possible interest only to psychologists. Whether congressional absorption in money-making is first or last in order of emphasis it is patently materially the largest and most assiduously pursued of all congressional interests.
These possibly truistic prefatory remarks are inspired not by some hostile, foreign, pagan and blasphemous un-American influences such as the godless writings of Karl Marx, Nicolai Bakunin, V. I. Lenin or Leon Trotsky but by first-hand, on-the-scene, carefully put together reports in such solidly established, churchly bourgeois publications as the New York Herald Tribune and the Wall Street Journal. On the score of method it would be difficult to find sources more homey and comfy unless one had it all in the form of a unanimous opinion of the United States Supreme Court certified in blood by the National Association of Manufacturers.
A bastion of old-line conservatism that yearned for the return of the mansard roof and the Stutz Bearcat, the Herald Tribune was until its demise the nonpareil Republican organ of the country. * (* The discontinuance of the valued Herald Tribune was announced as the consequence of a prolonged, complicated strike involving ten labor unions and two other newspapers. New York Times, August 13, 1966; 1: 6-7. ) The Journal is to Wall Street what Pravda and Izvestia are to the Kremlin, although it is a tremendously better paper professionally. None of this, of course, is a guarantee of pinpoint accuracy. But neither publication could be suspected of unorthodox or vagrant leanings in politics or social conceptions. If there was error in the political facts it sprung from inadvertence rather than ignorance or un-American, pro-intellectual bias. Although ornaments of the corporate press (the Tribune was owned by John Hay Whitney, a vintage super-millionaire), they are not to be confused with the "mass media," the chief task of which is to portray the world as a never-ending sideshow while fostering mass illusions about the great day that is just around the corner, due to dawn right after the election of John ("The Louse") Outhouse.
Such publications belong to what sociologists modishly dub "the elite press. " Of such there are some dozen to eighteen in the country (I myself lean to the first figure). Among hundreds this is not many but it represents the level of press seriousness. Although sections of this elite have been accused from time to time of editing news in favor of their own point of view, it has never been so much as whispered that they are
"un-American" or anything but wholeheartedly committed to the Constitution, profits and godliness. Error, yes; heresy, never.
Even though these elite papers are corporate entities, and as such are subject to the usual reservations, in recent years their owners, who once felt safe under Mark Hanna and Calvin Coolidge, have become dimly but increasingly aware that they are insidiously threatened simply as flesh-and-blood by much that is taking place--by events internal, external and technical. As a screwball society of demoralized citizens gradually comes unglued under ideologically justified neglect by its repeatedly sworn dung-hill guardians, the wealthy and their family members are also affected. Long unable to trot their horses through Central Park owing to the descent upon it of hordes of the demented, they, too, in or near the vicinity of their homes now are increasingly robbed, assaulted, raped, kidnapped, blackmailed, swindled, intimidated by servants and plug- ugly labor leaders, assassinated, run down by unregulated cars, poisoned by offbeat drugs and foods full of additives, overcharged, misled, misdirected, engulfed in half- shot planes and the like. One could compile imposing lists of wealthy victims within just the past five years, some with prolonged pedigrees and valuable Roman numerals after their names.
Again, this isn't the half of it. They are now, wealth or no wealth, subject to common industrial hazards of the population as a whole: air pollution, smoke inhalation, water pollution, unpleasant regional odors, public-service strikes, gratuitous noise, equipment failures right and left, chemical leakages, explosions, water shortages, area "blackouts," public crowding, riots, radiation poisoning, possible atomic warfare and the like.
And if elected government officials are conveniently purchasable, it is always possible, even probable, that they will be purchased by adversely hostile interests burrowing under established cushy positions.
As there is no Stock Exchange quoting officials' prices (which would be a great convenience) one never knows for sure at what figures the political bidding begins and ends. Nor does one ever know when one has a firm acceptance. Bought men sell out again at higher figures--which makes sense. All of which promotes much displeasing uncertainty and anxiety even among general beneficiaries.
Established wealth, in order to realize its potentialities to the maximum, needs orderly, intelligent and principled government. It does not have that now, but is caught in something of a more efficient continuation of the catch-as-catch-can nineteenth century; government is now more systematically and organizedly wayward than it once was. Although after the Civil War the rising magnates engaged in plenty of funny business with the politicians, the latter had not yet organized on a rational semi-corporate basis to put the vacuum cleaner systematically on rich and poor alike. Hence, in part, the rising concern in what are, seen from the street, high places.
If government is thoroughly unprincipled and is at the same time pretty much out of control, if the butler and the rest of the help are freely helping themselves to the vintage stuff and giving their lip to their betters, established wealth is itself in some danger of being clipped. As the Herald Tribune somewhat primly observed, "An anarchistic moral climate prevails in Congress. " The complaint is not, then, that the congressmen are Bolsheviks but that they are dedicated anarchists, which is surely just as bad or worse. If government men kick up their heels in wild abandon, the rule of the jungle, using government as a handy bludgeon, has returned and, as Thomas Hobbes said, life for everyone tends to become "nasty, brutish and short. " If, as it turns out, government officials are surreptitiously enmeshed in a tangle of distractingly profitable involvements, where anyone comes out in the ensuing mele? e is chancy. Here the
problem of government takes on particularly seamy hues, as much--in some ways, more--for the rich as for anyone else.
But if the elite press expected a public uprising on the heels of these probing exposures, recalling the best efforts of the old-time "muckrakers" such as the famed Lincoln Steffens, the editors showed little knowledge of the political system or the public. Proved money-grabbing by elected officials in the atomic age piques a disoriented public far less than the latest amours of the Hollywood set, ax murders in Brooklyn or the birth of two-headed quintuplets. As long as there seemed some possibility of sandwiching "call girls" into l'affaire Bobby Baker a few years ago, public interest momentarily stirred. It faded as soon as the impresarios failed to produce the cash-minded damsels in undress. Tabloid readers sulked at being deprived of an American Profumo Affair.
In what follows it should always be remembered that there is no question of illegality involved, Everything reported is strictly legal, just as Hitler's extermination of the Jews was legal--a little point I mention merely to suggest how much weight one may attach to the notion. And until further notice everything that follows is taken from the unreservedly patriotic Herald Tribune of June 9 through June 15, 1965.
"Anyone who wants any legislation, buys it with cold, cold cash. I don't mean you go up to a Senator and ask him if he'd like to make $5,000 by voting for your bill. That's out today. So are broads and booze. "
The words were those of a well-known veteran Washington lobbyist who was explaining his modus operandi.
"What you do is arrange to meet him alone somewhere--but not at his office. I almost never go up on the Hill, except maybe to show friends or relatives around.
"You don't tell him what you want. He knows. You tell him you understand he has a tough campaign coming up--or he has had a tough campaign--and you'd like to help cover the costs. Then you leave an envelope with cash in it. The real reason you are giving the money is never mentioned.
"Of course, you can't do this with all Congressmen. But generally it takes only a couple of votes in subcommittee to swing a bill one way or another. After you've been here awhile you know who to deal with. " 44
As there are more than 4,000 registered lobbyists in Washington, nearly eight to a congressman, it is evident that there are plenty of paymasters. While bribes are illegal, random gifts are not; but to be fully legal they should be reported on income-tax returns. Presumably they are not. And presumably they come out of capacious expense accounts provided lobbyists by their principals, whoever they may be. "Campaign" contributions are legal but should be reported; many are not.
An al fresco way of receiving gifts was disclosed by T. Lamar Caudle, an assistant attorney general who was convicted in 1956 of tax-fraud conspiracy. Caudle told the FBI that he customarily parked his car with the window open and was always pleasantly surprised that "somebody kept putting presents" in the back seat. The Herald Tribune doubted that congressmen use this method, which seems overly conspiratorial; the congressional deals are more apt to be right over the counter, thus disarming untutored observers.
Lobbyists stand so high in Washington that they constitute an informal branch of government. Thus, Dale Miller, long a successful lobbyist, "is one of President Johnson's closest friends. The president accorded Mr. Miller, a fellow Texan, a signal honor by naming him chairman of the 1965 inauguration committee. Myron Weiner,
lobbyist for the ocean freight forwarding industry, shared his Washington apartment for a while with Sen. Harrison Williams, D. , N. J. During the Bobby Baker investigation it was disclosed that Mr. Weiner split a fee with Mr. Baker, even though the former Senate majority secretary reportedly performed no special service for it. "
And so it goes. The Herald Tribune continued:
The relationship between Congressmen and lobbyists is based on reciprocity.
Lobby organizations are the big campaign contributors and the buyers of most seats at political fund-raising banquets. In an age of skyrocketting campaign expenses, Congressmen need the financial handouts which lobby groups offer. ["Campaign expenses," while real, are in part a euphemism. As Frank R. Kent mordantly noted long ago, campaign-fund collectors have "sticky fingers"--that is, they pocket part of the money and divide it with cronies. Frank R. Kent, The Great Game of Politics, Doubleday, Page & Co. , N. Y. , 1923, pp. 131-33--F. L. ]
On their part, lobbyists require the support and votes of the lawmakers if their clients are to prosper in the fiercely competitive business world. [What happens when face-to- face competitors each bid for lawmakers' support was not inquired into. --F. L. ]
Generally, lobbyists solicit aid through "persuasive education," stressing the merits of their position; by wining and dining lawmakers and their aides, and by subtly offering rewards.
The era of the outright bribe, when the little black bag stuffed with greenbacks was left on the desk, is fading with age.
Few lobbyists try brazenly to buy votes with cash across the table. Instead, the lobbyist seeks to make the Congressman beholden to him. Should the lawmaker be on the fence, uninformed or indifferent concerning a measure, it is presumed he will feel obliged to favor the stand promoted by his lobbyist friend.
One lobbyist said the latest ruse among his colleagues was to work through lawyers.
"The lawyer-client relationship keeps everything confidential. The lawyer, who is never registered as a lobbyist, simply calls up the Congressman and says he represents a client on a matter in which the Congressman might be interested. " 45
Corporation lobbyists have two main objectives: to influence legislation and to dampen enforcement of existing laws by federal corporate regulatory agencies such as the Federal Power Commission, the Federal Communications Commission and a long string of others the average rank-and-file nitwit believes to be standing vigilantly on guard. Simple inquiries by congressmen have the effect of deflecting the hand of law enforcement, because all these agencies are financed through appropriations voted by congressmen. The hostility of even one congressman can lead to severe reduction of an agency's needed funds, can even cause official heads to roll. In consequence, virtually all regulations on the books are only selectively applied.
As to legislation, it was brought out in 1963 that John R. O'Donnell, a promoter of Philippine sugar interests, had bankrolled more than twenty congressmen in 1960 to insure passage of a dubious $73-milhon Philippine war claims bill for which he expected a fat commission. (Cases cited are only typical examples from among many offered; this text does not profess to be an exhaustive treatise, which would fill volumes if it went back over more than two or three years. )
O. Roy Chalk, president of Trans Caribbean Airways, the D. C. Transit System and other projects, is a chum of Representative Abraham Multer, Democrat of New York, the Herald Tribune asserted. Multer achieved a certain amount of notoriety as an echo of Chalk's views, so much so that when a subway system to which Mr. Chalk is piously
opposed in Washington was suggested Mr. Multer owlishly warned all and sundry that building it would surely increase the capital's crime rate.
Stanley L. Sommer, a Washington public relations man associated with Morris Forgash, head of U. S. Freight Forwarders, admitted, said the Herald Tribune, that "many Senators" have been entertained on board the Forgash yacht "Natamor. " Among other tidbits which the paper said Mr. Sommer related, he had picked up the tab for Senator Everett M. Dirksen, Mrs. Dirksen and her sister for a frolicsome Labor Day weekend in 1963 at the Carousel Motel, Ocean City, Maryland. The hotel was owned by Bobby Baker, ousted former secretary to the Senate Democratic Majority of which Majority Leader Lyndon B. Johnson was a free-wheeling ringmaster.
It is noticeable throughout that it is mainly Establishment and fellow-traveling Legislators who are enmeshed in this sort of far-ranging entrepreneurial activity. The Establishment forms the spiderweb out of which operations are conducted and to which the operator returns for protection. Men banding together for protection are one source of Establishment power.
Members of the House and Senate are of several economic categories. They are, first, of independent, partly or wholly hereditary means, well educated, who have acquired a general rational interest in government; some of the best ones, intellectually and morally, can be found in this group. In their various outlooks many of these recall the Founding Fathers, nearly all men of property. Unfortunately, they are greatly outnumbered by the dung-hill climbers whose political task it is to gyp their dung-hill constituents. There are, too, moderate-sized business and professional entrepreneurs, most of them unable to distinguish between their business and governmental duties; they use government as a tool of their businesses, a practice openly defended by the late Senator Robert Kerr of Oklahoma, an oil man who was often referred to as "The King of the Senate. " There are, finally, those without means or firm business connections. Most of these, excepting only the conspicuously educated, are "on the make," looking upon the government much as brokers look upon the Stock Exchange: an opportunity to feather their nests and thus gain witless public esteem, status. A difference, however, is that brokers do not function under oath.
And it is because congressmen have taken an ostentatious oath that one is entitled, without listening to any sophomoric mush about "human failings" as the orchestra plays "Hearts and Flowers," to subject them to sharp scrutiny and judgment. What one might be inclined to overlook in a broker, or even a banker, one cannot sensibly treat as "just one of those things" in a legislator or other official if one values reasonable civil security.
In the passing of loaded legislation, many instances of which were cited by the staid Herald Tribune, the lawmakers manifestly act either for their own account or, as brokers, for the account of others.
As the record shows, they function in both roles.
Apart from direct gifts of money, which perhaps are what give most Establishment congressmen their financial starts, the prime way outsiders, mainly corporations, mobilize their zeal is by means of retainers through their law firms. Of 435 representatives and 100 senators, the Herald Tribune noted, 305 are lawyers. The firms of nearly all are under lucrative multicorporate retainer.
While one cannot show in every case that a lawyer-congressman is supporting a client of his firm on the floor or in committees, it can be shown in many cases. In some instances one would be hard put to show a one-one connection between a client and a legislative beneficiary. The client-attorney relationships of the congressmen, however, show that both client and attorney are running out of the same corporate stables, flying the same battle flags. The congressmen, if not full-fledged corporate men, are so close
to it in their thinking that they are indistinguishable from the officials of the United States Chamber of Commerce. Nobody has to tell the congressmen how to think, for example, on the subject of taxes if they think about them at all; they think that way spontaneously.
The law-retainer racket, often combined with threatened extortion, is very old and is touched upon by Charles Francis Adams II, one-time president of the Union Pacific Railroad, in his Autobiography (1916). In Washington on business for the railroad Adams at once encountered "a prominent member of the U. S. Senate" who was still alive, retired, when Adams wrote: ". . . he has a great reputation for ability, and a certain reputation, somewhat fly-blown, it is true, for rugged honesty. I can only say that I found him an ill-mannered bully, and by all odds the most covertly and dangerously corrupt man I ever had opportunity and occasion carefully to observe in public life. His grudge against the Union Pacific was that it had not retained him--he was not, as counsel, in its pay. While he took excellent care of those competing concerns which had been wiser in this respect, he never lost an opportunity of posing as the fearless antagonist of corporations when the Union Pacific came to the front. For that man, on good and sufficient grounds, I entertained a deep dislike. He was distinctly dishonest--a senatorial bribe-taker. "
This sort of thing is virtually standard legislative practice in the United States and was the thought in the mind of the The Nation (June 26, 1967) when it charged that the nature of the case made against Senator Thomas Dodd before he was censured by the Senate had been largely a cover-up. John Stennis, chairman of the Ethics Committee, The Nation charged, had steered the Senate away from considering the more serious charges against Dodd: "that he had (1) threatened to investigate the movie industry but, after taking a political contribution from the Motion Picture Association, dropped the probe; (2) threatened to investigate the television industry, but dropped the matter after taking money from a major member of the industry; (3) taken money from insurance companies while supposedly investigating them; (4) taken money from the firearms industry, and thereafter cooled in his ardor to control interstate shipments of guns; (5) used an airplane belonging to McKesson & Robbins, the drug makers, while sitting on an antitrust subcommittee investigating the drug industry; (6) taken a gift from Westinghouse's lobbyist while sitting on a judiciary subcommittee probing price fixing in the electrical industry; (7) sought favors and jobs for a number of groups and individuals who had contributed to his seemingly bottomless need for money. "
Dodd, in fact, was a fairly typical legislator, fitting right into the history of the American congressional system.
Apart from the incentives of surreptitious gifts, campaign contributions and law retainers, congressmen ferret out independent legislative and bureaucratic incentives strictly for their own account. Not only brokers, they are entrepreneurs and promoters as well. They are especially concentrated in the building-and-loan, television, insurance, local banking and credit fields, all subject to regulation and franchising by governmental agencies. Some are also personally interested in a variety of other government-regulated business activities, including the juggling of oil lands. They are, not to put too fine a point on it, estate builders. Estate building represents their philosophic horizon.
First a word about law firms.
Aware that some question of propriety might arise, some congressmen are related to two-name law firms. There is, first, their original firm. There is, also, a newer firm listing all partners' names except their own but occupying the same office, employing
the same personnel, using the same telephone number and the two sets of names on the same door. The Herald Tribune photographed some of these novelties.
It is presumably through the newer firm that business about which there might be some question is siphoned. The congressman does not participate on the books in such business. But, also presumably, his partners in the old firm are grateful. Presumably he is given a compensatory share in the old firm, doing business with nongovernment- connected clients, and is excluded from direct participation in the juicy second firm. Thus appearances are preserved.
But, even so, the single-name law firm prevails. Most congressmen don't care about appearances.
As the Herald Tribune noted, Senator Everett Dirksen, a big Establishmentarian and like his close friend Lyndon B. Johnson an ardent public partisan of prayer and God, is a member of the obscure Peoria, Illinois, law firm of Davis, Morgan and Witherell. This little firm numbers among its clients the formidable International Harvester Company, Pabst Brewing Company, the National Lock Company and the Panhandle Eastern Pipeline Company, a sprawling giant.
"During a 1959 Senate debate on pending legislation to bar pressures on Federal regulatory agencies, Sen. Dirksen said he would continue contacting them for constituents until such time the law provided he could be 'put in jail for doing it. '" 46
"In addition to his public chores, he is a . . . director of the First Federal Savings and Loan Association of Chicago. . . .
"Sen. Dirksen's business ties meshed neatly with his politics, earlier this year, with the appointment of Carl E. Bagge, a Chicago railroad attorney, as an industry-oriented member of the Federal Power Commission. It was on the Senator's recommendation that President Johnson appointed Mr. Bagge. " 47
The Herald Tribune then recalled that the Dirksen law firm represented Panhandle Eastern Pipe Line, which "falls within the jurisdiction of the FPC. " Dirksen, therefore, is seen to play a variety of roles. Everybody--legislator, president, law firm, corporations, commissions and lobbyists--is rolled together in the same capacious bed.
Dirksen, although nominally a Republican, bobbed up in several parts of the Herald Tribune inquest. In 1962 he received, according to this rockribbed Republican newspaper, concentrated campaign contributions from members of the pharmaceutical industry: officials of the Warner-Lambert Pharmaceutical Company, the Olin Mathieson Chemical Corporation (Squibb) and G. D. Searle and Company, drug manufacturers.
"During this period," said the Herald Tribune, "Sen. Dirksen was leading the opposition against Sen. Estes Kefauver's campaign to regulate the cost and safety of consumer drugs.
"In his book, The Real Voice, on the late Sen. Kefauver's drug fight, author Richard Harris says that Sen. Dirksen became known as the defender of the medical and pharmaceutical interests. " 48
Representative Claude Pepper, Democrat of Florida, former senator, a practicing lawyer with three Florida offices, and an officer and director of the Washington Federal Savings and Loan Association of Miami Beach, in 1963 introduced two bills authorizing savings and loan associations to buy tax-exempt securities. He was at the time a member of the House Banking and Currency Committee which passed on the bills. Sitting on the board of Pepper's Savings and Loan Association was Arthur Courshon, one of the chief savings and loan lobbyists in Washington. One bill was enacted into sacred law in 1964.
Pepper lost his Senate seat in 1950 after fourteen years' incumbency in an election that achieved some fame owing to the novelty of the charges against him by George Smathers. The latter bawled to the swampwater electorate that Pepper had a sister who was a "thespian" and before his own marriage had "practiced celibacy. " One wonders what would happen in the outlands if some candidate were ever accused of being a carnivore, heterosexual and biped who had caused his wife to undergo parturition. Very probably he would be lynched before a dictionary could be ordered from Sears, Roebuck. Many congressmen, in sober fact, are paranymphs.
Not a few statesmen like Senator Smathers, Democrat of Florida, although no longer active as lawyers, nevertheless "promote legislation favorable to their law firm's clients. Over the years Sen. Smathers has supported bills beneficial to Standard Oil of New Jersey, International Telephone and Telegraph Corp. , Pan American World Airways, the Florida East Coast Railway and several insurance companies, all clients of the Miami law firm which bears his name. " 49 He is a real corporate fan.
Senator Sam J. Ervin, Jr. , Democrat of North Carolina, a member of the judiciary Committee which had held hearings on four of nine sitting Supreme Court justices, argued as a paid attorney against the government before the court for the Milliken textile interests. 50
Two businessmen-Senators--Wallace F. Bennett, R. , Utah, and Edward V. Long, D. , Mo. --have successfully blocked the "truth-in-lending" bill which Sen. Paul Douglas, D. , Ill. , and a host of other Senators have been sponsoring since 1960 [said the Herald Tribune ]. Sen. Bennett, former president of the National Association of Manufacturers, is head of an automobile distributorship and director of an insurance company. Sen. Long, a director of a St. Louis bank, has been a vocal supporter for savings and loan institutions since he served in the Missouri legislature. [More recently he has been shown tied up with James Hoffa's Teamsters' Union. ]
U. S. Controller of Currency James Saxon once commented that about two-thirds of all Congressmen are involved in savings and loan associations. An aid later reported Mr. Saxon's estimate was somewhat exaggerated but that a substantial number of Congressmen were indeed connected with savings and loan groups.
He said that of the 1,200 or so inquiries which the Controller's office receives annually regarding bank charters and branch applications, at least half come from Congressmen. Most of the inquiries, the aid said, were simple requests for information without any suggestion of pressure.
But as pointed out by George B. Gallaway, author and government expert, "A telephone call from a Senator or Congressman can paralyze the will of a government executive and alter the course of national policy.
In other cases, Sen. Jennings Randolph, D. , W. Va. , an insurance company director, has taken an active role in debate on proposed medical insurance legislation. His deciding vote killed medicare in the Senate in 1962.
Rep. Multer, chairman of the subcommittee on bank supervision, is privately associated with banking operations. 51
Senator B. Everett Jordan, Democrat of North Carolina, is chairman of the strategic Rules Committee and frequently has argued on the Senate floor against allowing increases in competing foreign textile imports as recommended by the Tariff Commission. Increasing such imports is part of a supposed national policy of knitting together a raveled world.
The senator is himself a domestic textile man, an officer and director of the Sellers Manufacturing Company of North Carolina.
It was before his committee that the case of Bobby Baker, hired secretary to the Senate Majority, was brought for investigation. Baker was accused of improperly using his position in personal out-of-bounds windfall moneymaking schemes. And it was Senator Jordan who abruptly closed the inquiry as the trail grew hot with the historic remark: "We're not investigating senators. "
"Would Bobby Baker have been able to engage in shadowy business deals if his Senate bosses had been above reproach? " the Herald Tribune asked rhetorically. 52 Baker, in the view of sophisticates, merely paralleled the operations of his masters, from whom as a very young man he had learned everything he knew about anti-public skulduggery.
Alluding to the Bobby Baker case, the Herald Tribune said it "raised doubts about the moral fiber of the government right up to the steps of the White House. " 53 It was, indeed, precisely as attention was directed toward the Senate group of which Lyndon B. Johnson had been a rabidly prayerful member that Senator Jordan abruptly closed off the tepid Baker investigation.
The television industry embraces many congressmen. It has been estimated that 75 per cent of congressmen have interests in television-radio broadcasting franchises. The Herald Tribune found that nine senators and fourteen representatives had direct or family-related interests in broadcasting stations. "While he was in the Senate, the family of Lyndon B. Johnson held the only television broadcasting license in Austin, Tex. "
The Case of Lyndon Johnson: A Paradigm
According to the Wall Street Journal, Mr. Johnson's large-scale property-dealing
activities began when be was a representative back in the 1930's. 54
"Unofficial estimates," said the Herald Tribune, "pegged the President's fortune, accrued mostly through his radio-TV holdings, from nine to 14 million. Last August in a public statement he listed his net assets at $3,484,098. A month later, Mr. Humphrey, who sometimes refers to himself as an 'unemployed druggist,' reported his net worth as totaling $171,396. " 55
Earlier Barry Goldwater, Republican presidential candidate, disclosed that he and his wife were worth $1. 7 million mostly in stocks, all of it inherited money.
Johnson, by contrast, was a poor boy who made good-in politics. Back in the 1920's he worked on Texas road gangs as a laborer and was variously employed in catch-as- catch-can jobs until he went to Congress in 1934 after a brief stint as state director of the depression-born National Youth Administration. Those were lean days but, as the Democratic song promised, happy days were returning and soon everything would again be as it was before the dismal crash of 1929. Once on the government payroll Johnson, like many of his colleagues, was never pried loose.
The Johnson fortune, and the miracle of its growth despite the monkish immersion of its architect in steamy affairs of state, came in for a great deal of sudden press attention. What figures are available on it were unprecedentedly disclosed during the presidential campaign of 1964. This revelation resulted from many rumors of the vast magnitude of the Johnson holdings and particularly from a cold-eyed 7,000-word analysis in the Wall Street Journal of August 11, 1964. The editors of this elite feuilleton had assigned a three-man assault team of ace reporters to invade Texas and find out what caused all the aroma. Their report heightened the worst fears abroad in the land, leading to the later
somewhat perfumed self-disclosure reported in the New York Times on August 20, 1964.
The Journal led off its findings with the following rollicking heading:
LYNDON'S PALS
HIS HOMETOWN COTERIE WHEELS AND DEALS IN
LAND AND BROADCASTING THEY BUY INTO AUSTIN BANKS, TRADE PROPERTY WITH LBJ
AND PLAY SOME POLITICS TOO DIRECT LINE TO THE WHITE HOUSE
What engages our attention here is not what might interest a political partisan: the fact that this was about the holder of the highest competitive office in the land. It would be a grave mistake to look upon Mr. Johnson's financial affairs as rarely exceptional. They are, rather, a baroque pattern of a Congressional Establishment man's affairs. I remarked earlier that none of these men operate alone. One man could not juggle all this stuff. Behind practically each Establishment figure is organization: a standard political organization of the Republican or Democratic variety and a personal political-financial organization of long-time cronies.
This area of our politics has not been studied, as far as I am aware, by our political scientists. What shows on the surface in Washington is only the tips of the various icebergs. These personal political-financial networks show what politics are about to most of their successful professional practitioners: chiefly a way of self-enrichment. The pubpols are trying to become junior finpols.
So, taking what the Journal found out as a paradigm of approximately what would be found in practically every Establishment case, there was disclosed the following:
The Johnson affairs revolved around the hitherto obscure Austin law firm of Clark, Thomas, Harris, Denius and Winters, "patronized by giant national corporations. " A separate lawyer, A. W. Moursund of Johnson City, was found to be Mr. Johnson's personal attorney, realty partner and a key figure in his affairs. He was "linked by private telephone circuit to the LBJ Ranch and the White House. " All the lawyers interviewed talked themselves down, jocosely. "I'm just a country lawyer," said Moursund. "I'm just a poor boy, born and raised in East Texas, trying to make an honest buck," said Don Thomas of the law firm. Said Mr. Ed Clark: "Spell my name right--I need the business. "
Mr. Johnson, the Johnson family, these lawyers and other cronies, the Journal found, held parallel or interlocking interests in television-radio properties, vast tracts of land made valuable by federal electrification and Johnson-sponsored dam projects over the years and shares in clusters of Texas banks that gave the group enormous credit resources. Said the Journal: "According to experts of the American Bar Association it is unusual for law firms to invest substantially in bank stocks, but perfectly legitimate. "
There was, first, the Texas Broadcasting Company, a name substituted for The LBJ Company when Mr. Johnson unexpectedly became president of the United States. This outfit owned the various radio and exclusive television stations of the Johnsons. A "competing" radio station, working out of the same address, had been long before set up by Johnson associates and employees: John Connally, now governor of Texas, Walter Jenkins, Merrill Connally, Willard Deason, Melvin Winters (the Johnson City contractor who is a trustee of the Johnson foundation), Robert L. Phinney (an old Johnson college roommate who became Austin's postmaster and more recently director
of the Internal Revenue Service for the region), and various other Johnson employees or associates.
The Journal was piqued by two contrasting strands it found in Johnson affairs: the pattern of monopoly as in the television broadcasting station and concentrated bank holdings, and the pattern of apparent competition within the group itself.
The broadcasting enterprises are housed in a modern office building at Tenth and Brazos Street in Austin owned by the Brazos-Tenth Street Corporation, a holding company held in the name of Don Thomas of the law firm. Mr. Thomas denied point- blank that he was just a "front man" for LBJ. Yet he is also the secretary and a director of the broadcasting company, and a trustee of The LBJ Company Profit-Sharing and Incentive Plan and of the Johnson City Foundation, an LBJ creation.
The Brazos-Tenth Street Corporation, the Journal found, figures in baffling big land deals with Mr. Johnson. Court records showed that it bought property from The LBJ Company and resold it the same day to Lyndon B. Johnson in person. It engaged in a series of such land deals with the then vice president, as local records showed, and in some cases acted as the buyerseller in deals between Mr. and Mrs. Johnson. The Journal explained them as possible tax maneuvers through a "conduit agency. "
Other deals were recounted in which parcels of land were sold over the years in a circle extending through Johnson companies and employees and then winding up again in the hands of the original owner, Donald Thomas of the law firm.
Money for the various deals, said the Journal, was supplied by banks in which the "members of the Johnson inner circle have an interest and a voice.
How it plays out is well shown by Eisenstein:
The same generalities are perennially repeated because they are vacant expressions. Everyone may freely put into them whatever he wishes to take out. That is why they are beyond dispute. For the same reason they are also very useful. Dispensations may be broadly condemned and then selectively approved without fear of engaging in any contradictions. Senator Wiley of Wisconsin, for instance, declares that taxes "should be as fair and equitable as possible. " They should be "based primarily on ability to pay," and they should not discriminate "as between different groups. " But at the same time the senator also maintains that taxes should, "as a matter of principle," provide a "reasonable incentive to earn, to grow, to expand. " Therefore, he warmly recommends such special dispensations as a credit for dividends and a reduced rate for income from foreign investments. Apparently dispensations which remove barriers and deterrents do not discriminate "between different groups. " The public interest similarly enables Congressman Mills to distinguish between one dispensation and another. Our income tax, he charges, is "riddled with preferential benefits. " The statutes are "full of special provisions through which a shrewd or lucky taxpayer can often escape paying anywhere near his full share. " But having said all this, Congressman Mills indicates that it would not be "desirable to eliminate all the special provisions that we now permit. " Those who fail to pay their "full share" may also serve the public interest. 42
Whatever is said at these tax hearings, and whatever one may think about what is said, the result (whether explicitly intended or not) is clear: Most of the tax burden is shouldered over, directly and indirectly, on the nonpropertied, free-spending labor force, which constitutes the main body of patriots upon which the future of the Republic depends.
After protracted hearings the tax committees go into "executive session," excluding the profane. Staff writers get their instructions. Whatever is not of sentimental appeal is put into the customary opaque language, but what is of sentimental appeal such as high rates on the big incomes and baited deductions for blindness, medicine, children and superannuation is left crystal clear.
When ready the bill is reported out on the floor near the end of the session, when a great many other bills, equally suspect under careful analysis, are also awaiting passage. There is here the usual "logjam" of important legislation, with members impatient to get home to sweet-talk low-IQ voters. The "heat is on" for swift passage.
If anyone wishes, he may suggest amendments, which may or may not be voted down. The votes are there, the floor managers know, to pass the bill. The word is passed to the stalwarts, all ready to act. At the signal, the bill is easily pushed through.
The Senate Finance Committee in 1966, of which Russell Long, an Establishment stalwart, was chairman, consisted of 17 members. Six were identified by Senator Clark as of the Establishment core, 6 were from the South, 8 were from one-party states and 12 were from outside Metropolia. Only 7 were clearly non-Establishmentarians and only 6 would ordinarily be classified as liberals or rationalists.
The House Ways and Means Committee under the redoubtable Wilbur Mills of Arkansas had 11 members out of 25 from one-party states, many more from one-party districts, 8 from the South and 13 from outside Metropolia. The back country was clearly in the saddle. As the committee is under the mesmeric control of Mr. Mills, much like the New York Philharmonic under Leonard Bernstein, it is not necessary to carry the analysis further. It is all an Establishment affair.
Oddly, what radicals call Wall Street tax laws are largely put into final form by men from the swamps, bayous, tundra, bogs, crossroads, pastures, plains, bills, ravines, badlands and backwoods of the country. These men with some exceptions have not attended fancy law schools or studied at the leading universities; there is about few of them any taint of sickly intellectuality. They are, one might say, as common as any drug-store loafer. Nor did any of them, so far as I can ascertain, ever have to meet a flabbergasting payroll in private business. None was ever a super-salesman, a super- lawyer or a big-time entrepreneur. One can safely say that none has had either firsthand or theoretical knowledge of economics, finance or business affairs. As far as taxes are concerned they only know what they may have alertly picked up by hearsay in their committee rooms from visiting monetary sophists.
Yet, when all is said and done, they are well able to distinguish campaign contributors from unsound, unkempt and uncouth, not to say openly literate, ivory-tower theorists.
The Pay-Off
Contrary to common supposition a majority of those in the House and Senate enjoy incomes vaulting far beyond their relatively modest salaries of $30,000 a year plus office expenses, travel allowances and other extras. Merely at this salaried minimal they are already in the upper 1 per cent of income receivers. 43 Income-wise they make members of the Mafia look like bashful Boy Scouts.
Much of this congressional income--by all signs probably most--is obtained in ways that, although technically legal, would be condemned by almost any citizen having ordinary claims to respectability and even by many of the more high-toned swindlers who comb the bistros for hard-to-get victims.
So many, indeed, are the ways on record congressmen have of funneling furtive lucre into their pockets that they defy description at any seemly length. Some attempt must be made, however, to comprehend what goes on among political entrepreneurs in order to understand the weltaunschauung of the men who confect our tax laws.
Congress is largely but not exclusively staffed by assiduous off-the-soil moneymakers who use government as a tool in their profit-seeking operations with the gusto of a pack of hypertonic pickpockets assailing a convention of paralytics. In so doing, manifestly, its members are engaging in wholly unfair competition with the business and professional classes, especially with the small and medium-sized portions. Most business people, high or low, and even Mafians, do not have such ready toll-free access to the inner valves and spigots of government.
I am far from contending that money-making congressmen (who must be distinguished from a civilized minority genuinely concerned about the fate of the Republic) are primarily athirst for lucre. So to say would involve me in a bootless squabble with degree-flaunting sages about the tenuous and wholly irrelevant question of primacy in motivation--of possible interest only to psychologists. Whether congressional absorption in money-making is first or last in order of emphasis it is patently materially the largest and most assiduously pursued of all congressional interests.
These possibly truistic prefatory remarks are inspired not by some hostile, foreign, pagan and blasphemous un-American influences such as the godless writings of Karl Marx, Nicolai Bakunin, V. I. Lenin or Leon Trotsky but by first-hand, on-the-scene, carefully put together reports in such solidly established, churchly bourgeois publications as the New York Herald Tribune and the Wall Street Journal. On the score of method it would be difficult to find sources more homey and comfy unless one had it all in the form of a unanimous opinion of the United States Supreme Court certified in blood by the National Association of Manufacturers.
A bastion of old-line conservatism that yearned for the return of the mansard roof and the Stutz Bearcat, the Herald Tribune was until its demise the nonpareil Republican organ of the country. * (* The discontinuance of the valued Herald Tribune was announced as the consequence of a prolonged, complicated strike involving ten labor unions and two other newspapers. New York Times, August 13, 1966; 1: 6-7. ) The Journal is to Wall Street what Pravda and Izvestia are to the Kremlin, although it is a tremendously better paper professionally. None of this, of course, is a guarantee of pinpoint accuracy. But neither publication could be suspected of unorthodox or vagrant leanings in politics or social conceptions. If there was error in the political facts it sprung from inadvertence rather than ignorance or un-American, pro-intellectual bias. Although ornaments of the corporate press (the Tribune was owned by John Hay Whitney, a vintage super-millionaire), they are not to be confused with the "mass media," the chief task of which is to portray the world as a never-ending sideshow while fostering mass illusions about the great day that is just around the corner, due to dawn right after the election of John ("The Louse") Outhouse.
Such publications belong to what sociologists modishly dub "the elite press. " Of such there are some dozen to eighteen in the country (I myself lean to the first figure). Among hundreds this is not many but it represents the level of press seriousness. Although sections of this elite have been accused from time to time of editing news in favor of their own point of view, it has never been so much as whispered that they are
"un-American" or anything but wholeheartedly committed to the Constitution, profits and godliness. Error, yes; heresy, never.
Even though these elite papers are corporate entities, and as such are subject to the usual reservations, in recent years their owners, who once felt safe under Mark Hanna and Calvin Coolidge, have become dimly but increasingly aware that they are insidiously threatened simply as flesh-and-blood by much that is taking place--by events internal, external and technical. As a screwball society of demoralized citizens gradually comes unglued under ideologically justified neglect by its repeatedly sworn dung-hill guardians, the wealthy and their family members are also affected. Long unable to trot their horses through Central Park owing to the descent upon it of hordes of the demented, they, too, in or near the vicinity of their homes now are increasingly robbed, assaulted, raped, kidnapped, blackmailed, swindled, intimidated by servants and plug- ugly labor leaders, assassinated, run down by unregulated cars, poisoned by offbeat drugs and foods full of additives, overcharged, misled, misdirected, engulfed in half- shot planes and the like. One could compile imposing lists of wealthy victims within just the past five years, some with prolonged pedigrees and valuable Roman numerals after their names.
Again, this isn't the half of it. They are now, wealth or no wealth, subject to common industrial hazards of the population as a whole: air pollution, smoke inhalation, water pollution, unpleasant regional odors, public-service strikes, gratuitous noise, equipment failures right and left, chemical leakages, explosions, water shortages, area "blackouts," public crowding, riots, radiation poisoning, possible atomic warfare and the like.
And if elected government officials are conveniently purchasable, it is always possible, even probable, that they will be purchased by adversely hostile interests burrowing under established cushy positions.
As there is no Stock Exchange quoting officials' prices (which would be a great convenience) one never knows for sure at what figures the political bidding begins and ends. Nor does one ever know when one has a firm acceptance. Bought men sell out again at higher figures--which makes sense. All of which promotes much displeasing uncertainty and anxiety even among general beneficiaries.
Established wealth, in order to realize its potentialities to the maximum, needs orderly, intelligent and principled government. It does not have that now, but is caught in something of a more efficient continuation of the catch-as-catch-can nineteenth century; government is now more systematically and organizedly wayward than it once was. Although after the Civil War the rising magnates engaged in plenty of funny business with the politicians, the latter had not yet organized on a rational semi-corporate basis to put the vacuum cleaner systematically on rich and poor alike. Hence, in part, the rising concern in what are, seen from the street, high places.
If government is thoroughly unprincipled and is at the same time pretty much out of control, if the butler and the rest of the help are freely helping themselves to the vintage stuff and giving their lip to their betters, established wealth is itself in some danger of being clipped. As the Herald Tribune somewhat primly observed, "An anarchistic moral climate prevails in Congress. " The complaint is not, then, that the congressmen are Bolsheviks but that they are dedicated anarchists, which is surely just as bad or worse. If government men kick up their heels in wild abandon, the rule of the jungle, using government as a handy bludgeon, has returned and, as Thomas Hobbes said, life for everyone tends to become "nasty, brutish and short. " If, as it turns out, government officials are surreptitiously enmeshed in a tangle of distractingly profitable involvements, where anyone comes out in the ensuing mele? e is chancy. Here the
problem of government takes on particularly seamy hues, as much--in some ways, more--for the rich as for anyone else.
But if the elite press expected a public uprising on the heels of these probing exposures, recalling the best efforts of the old-time "muckrakers" such as the famed Lincoln Steffens, the editors showed little knowledge of the political system or the public. Proved money-grabbing by elected officials in the atomic age piques a disoriented public far less than the latest amours of the Hollywood set, ax murders in Brooklyn or the birth of two-headed quintuplets. As long as there seemed some possibility of sandwiching "call girls" into l'affaire Bobby Baker a few years ago, public interest momentarily stirred. It faded as soon as the impresarios failed to produce the cash-minded damsels in undress. Tabloid readers sulked at being deprived of an American Profumo Affair.
In what follows it should always be remembered that there is no question of illegality involved, Everything reported is strictly legal, just as Hitler's extermination of the Jews was legal--a little point I mention merely to suggest how much weight one may attach to the notion. And until further notice everything that follows is taken from the unreservedly patriotic Herald Tribune of June 9 through June 15, 1965.
"Anyone who wants any legislation, buys it with cold, cold cash. I don't mean you go up to a Senator and ask him if he'd like to make $5,000 by voting for your bill. That's out today. So are broads and booze. "
The words were those of a well-known veteran Washington lobbyist who was explaining his modus operandi.
"What you do is arrange to meet him alone somewhere--but not at his office. I almost never go up on the Hill, except maybe to show friends or relatives around.
"You don't tell him what you want. He knows. You tell him you understand he has a tough campaign coming up--or he has had a tough campaign--and you'd like to help cover the costs. Then you leave an envelope with cash in it. The real reason you are giving the money is never mentioned.
"Of course, you can't do this with all Congressmen. But generally it takes only a couple of votes in subcommittee to swing a bill one way or another. After you've been here awhile you know who to deal with. " 44
As there are more than 4,000 registered lobbyists in Washington, nearly eight to a congressman, it is evident that there are plenty of paymasters. While bribes are illegal, random gifts are not; but to be fully legal they should be reported on income-tax returns. Presumably they are not. And presumably they come out of capacious expense accounts provided lobbyists by their principals, whoever they may be. "Campaign" contributions are legal but should be reported; many are not.
An al fresco way of receiving gifts was disclosed by T. Lamar Caudle, an assistant attorney general who was convicted in 1956 of tax-fraud conspiracy. Caudle told the FBI that he customarily parked his car with the window open and was always pleasantly surprised that "somebody kept putting presents" in the back seat. The Herald Tribune doubted that congressmen use this method, which seems overly conspiratorial; the congressional deals are more apt to be right over the counter, thus disarming untutored observers.
Lobbyists stand so high in Washington that they constitute an informal branch of government. Thus, Dale Miller, long a successful lobbyist, "is one of President Johnson's closest friends. The president accorded Mr. Miller, a fellow Texan, a signal honor by naming him chairman of the 1965 inauguration committee. Myron Weiner,
lobbyist for the ocean freight forwarding industry, shared his Washington apartment for a while with Sen. Harrison Williams, D. , N. J. During the Bobby Baker investigation it was disclosed that Mr. Weiner split a fee with Mr. Baker, even though the former Senate majority secretary reportedly performed no special service for it. "
And so it goes. The Herald Tribune continued:
The relationship between Congressmen and lobbyists is based on reciprocity.
Lobby organizations are the big campaign contributors and the buyers of most seats at political fund-raising banquets. In an age of skyrocketting campaign expenses, Congressmen need the financial handouts which lobby groups offer. ["Campaign expenses," while real, are in part a euphemism. As Frank R. Kent mordantly noted long ago, campaign-fund collectors have "sticky fingers"--that is, they pocket part of the money and divide it with cronies. Frank R. Kent, The Great Game of Politics, Doubleday, Page & Co. , N. Y. , 1923, pp. 131-33--F. L. ]
On their part, lobbyists require the support and votes of the lawmakers if their clients are to prosper in the fiercely competitive business world. [What happens when face-to- face competitors each bid for lawmakers' support was not inquired into. --F. L. ]
Generally, lobbyists solicit aid through "persuasive education," stressing the merits of their position; by wining and dining lawmakers and their aides, and by subtly offering rewards.
The era of the outright bribe, when the little black bag stuffed with greenbacks was left on the desk, is fading with age.
Few lobbyists try brazenly to buy votes with cash across the table. Instead, the lobbyist seeks to make the Congressman beholden to him. Should the lawmaker be on the fence, uninformed or indifferent concerning a measure, it is presumed he will feel obliged to favor the stand promoted by his lobbyist friend.
One lobbyist said the latest ruse among his colleagues was to work through lawyers.
"The lawyer-client relationship keeps everything confidential. The lawyer, who is never registered as a lobbyist, simply calls up the Congressman and says he represents a client on a matter in which the Congressman might be interested. " 45
Corporation lobbyists have two main objectives: to influence legislation and to dampen enforcement of existing laws by federal corporate regulatory agencies such as the Federal Power Commission, the Federal Communications Commission and a long string of others the average rank-and-file nitwit believes to be standing vigilantly on guard. Simple inquiries by congressmen have the effect of deflecting the hand of law enforcement, because all these agencies are financed through appropriations voted by congressmen. The hostility of even one congressman can lead to severe reduction of an agency's needed funds, can even cause official heads to roll. In consequence, virtually all regulations on the books are only selectively applied.
As to legislation, it was brought out in 1963 that John R. O'Donnell, a promoter of Philippine sugar interests, had bankrolled more than twenty congressmen in 1960 to insure passage of a dubious $73-milhon Philippine war claims bill for which he expected a fat commission. (Cases cited are only typical examples from among many offered; this text does not profess to be an exhaustive treatise, which would fill volumes if it went back over more than two or three years. )
O. Roy Chalk, president of Trans Caribbean Airways, the D. C. Transit System and other projects, is a chum of Representative Abraham Multer, Democrat of New York, the Herald Tribune asserted. Multer achieved a certain amount of notoriety as an echo of Chalk's views, so much so that when a subway system to which Mr. Chalk is piously
opposed in Washington was suggested Mr. Multer owlishly warned all and sundry that building it would surely increase the capital's crime rate.
Stanley L. Sommer, a Washington public relations man associated with Morris Forgash, head of U. S. Freight Forwarders, admitted, said the Herald Tribune, that "many Senators" have been entertained on board the Forgash yacht "Natamor. " Among other tidbits which the paper said Mr. Sommer related, he had picked up the tab for Senator Everett M. Dirksen, Mrs. Dirksen and her sister for a frolicsome Labor Day weekend in 1963 at the Carousel Motel, Ocean City, Maryland. The hotel was owned by Bobby Baker, ousted former secretary to the Senate Democratic Majority of which Majority Leader Lyndon B. Johnson was a free-wheeling ringmaster.
It is noticeable throughout that it is mainly Establishment and fellow-traveling Legislators who are enmeshed in this sort of far-ranging entrepreneurial activity. The Establishment forms the spiderweb out of which operations are conducted and to which the operator returns for protection. Men banding together for protection are one source of Establishment power.
Members of the House and Senate are of several economic categories. They are, first, of independent, partly or wholly hereditary means, well educated, who have acquired a general rational interest in government; some of the best ones, intellectually and morally, can be found in this group. In their various outlooks many of these recall the Founding Fathers, nearly all men of property. Unfortunately, they are greatly outnumbered by the dung-hill climbers whose political task it is to gyp their dung-hill constituents. There are, too, moderate-sized business and professional entrepreneurs, most of them unable to distinguish between their business and governmental duties; they use government as a tool of their businesses, a practice openly defended by the late Senator Robert Kerr of Oklahoma, an oil man who was often referred to as "The King of the Senate. " There are, finally, those without means or firm business connections. Most of these, excepting only the conspicuously educated, are "on the make," looking upon the government much as brokers look upon the Stock Exchange: an opportunity to feather their nests and thus gain witless public esteem, status. A difference, however, is that brokers do not function under oath.
And it is because congressmen have taken an ostentatious oath that one is entitled, without listening to any sophomoric mush about "human failings" as the orchestra plays "Hearts and Flowers," to subject them to sharp scrutiny and judgment. What one might be inclined to overlook in a broker, or even a banker, one cannot sensibly treat as "just one of those things" in a legislator or other official if one values reasonable civil security.
In the passing of loaded legislation, many instances of which were cited by the staid Herald Tribune, the lawmakers manifestly act either for their own account or, as brokers, for the account of others.
As the record shows, they function in both roles.
Apart from direct gifts of money, which perhaps are what give most Establishment congressmen their financial starts, the prime way outsiders, mainly corporations, mobilize their zeal is by means of retainers through their law firms. Of 435 representatives and 100 senators, the Herald Tribune noted, 305 are lawyers. The firms of nearly all are under lucrative multicorporate retainer.
While one cannot show in every case that a lawyer-congressman is supporting a client of his firm on the floor or in committees, it can be shown in many cases. In some instances one would be hard put to show a one-one connection between a client and a legislative beneficiary. The client-attorney relationships of the congressmen, however, show that both client and attorney are running out of the same corporate stables, flying the same battle flags. The congressmen, if not full-fledged corporate men, are so close
to it in their thinking that they are indistinguishable from the officials of the United States Chamber of Commerce. Nobody has to tell the congressmen how to think, for example, on the subject of taxes if they think about them at all; they think that way spontaneously.
The law-retainer racket, often combined with threatened extortion, is very old and is touched upon by Charles Francis Adams II, one-time president of the Union Pacific Railroad, in his Autobiography (1916). In Washington on business for the railroad Adams at once encountered "a prominent member of the U. S. Senate" who was still alive, retired, when Adams wrote: ". . . he has a great reputation for ability, and a certain reputation, somewhat fly-blown, it is true, for rugged honesty. I can only say that I found him an ill-mannered bully, and by all odds the most covertly and dangerously corrupt man I ever had opportunity and occasion carefully to observe in public life. His grudge against the Union Pacific was that it had not retained him--he was not, as counsel, in its pay. While he took excellent care of those competing concerns which had been wiser in this respect, he never lost an opportunity of posing as the fearless antagonist of corporations when the Union Pacific came to the front. For that man, on good and sufficient grounds, I entertained a deep dislike. He was distinctly dishonest--a senatorial bribe-taker. "
This sort of thing is virtually standard legislative practice in the United States and was the thought in the mind of the The Nation (June 26, 1967) when it charged that the nature of the case made against Senator Thomas Dodd before he was censured by the Senate had been largely a cover-up. John Stennis, chairman of the Ethics Committee, The Nation charged, had steered the Senate away from considering the more serious charges against Dodd: "that he had (1) threatened to investigate the movie industry but, after taking a political contribution from the Motion Picture Association, dropped the probe; (2) threatened to investigate the television industry, but dropped the matter after taking money from a major member of the industry; (3) taken money from insurance companies while supposedly investigating them; (4) taken money from the firearms industry, and thereafter cooled in his ardor to control interstate shipments of guns; (5) used an airplane belonging to McKesson & Robbins, the drug makers, while sitting on an antitrust subcommittee investigating the drug industry; (6) taken a gift from Westinghouse's lobbyist while sitting on a judiciary subcommittee probing price fixing in the electrical industry; (7) sought favors and jobs for a number of groups and individuals who had contributed to his seemingly bottomless need for money. "
Dodd, in fact, was a fairly typical legislator, fitting right into the history of the American congressional system.
Apart from the incentives of surreptitious gifts, campaign contributions and law retainers, congressmen ferret out independent legislative and bureaucratic incentives strictly for their own account. Not only brokers, they are entrepreneurs and promoters as well. They are especially concentrated in the building-and-loan, television, insurance, local banking and credit fields, all subject to regulation and franchising by governmental agencies. Some are also personally interested in a variety of other government-regulated business activities, including the juggling of oil lands. They are, not to put too fine a point on it, estate builders. Estate building represents their philosophic horizon.
First a word about law firms.
Aware that some question of propriety might arise, some congressmen are related to two-name law firms. There is, first, their original firm. There is, also, a newer firm listing all partners' names except their own but occupying the same office, employing
the same personnel, using the same telephone number and the two sets of names on the same door. The Herald Tribune photographed some of these novelties.
It is presumably through the newer firm that business about which there might be some question is siphoned. The congressman does not participate on the books in such business. But, also presumably, his partners in the old firm are grateful. Presumably he is given a compensatory share in the old firm, doing business with nongovernment- connected clients, and is excluded from direct participation in the juicy second firm. Thus appearances are preserved.
But, even so, the single-name law firm prevails. Most congressmen don't care about appearances.
As the Herald Tribune noted, Senator Everett Dirksen, a big Establishmentarian and like his close friend Lyndon B. Johnson an ardent public partisan of prayer and God, is a member of the obscure Peoria, Illinois, law firm of Davis, Morgan and Witherell. This little firm numbers among its clients the formidable International Harvester Company, Pabst Brewing Company, the National Lock Company and the Panhandle Eastern Pipeline Company, a sprawling giant.
"During a 1959 Senate debate on pending legislation to bar pressures on Federal regulatory agencies, Sen. Dirksen said he would continue contacting them for constituents until such time the law provided he could be 'put in jail for doing it. '" 46
"In addition to his public chores, he is a . . . director of the First Federal Savings and Loan Association of Chicago. . . .
"Sen. Dirksen's business ties meshed neatly with his politics, earlier this year, with the appointment of Carl E. Bagge, a Chicago railroad attorney, as an industry-oriented member of the Federal Power Commission. It was on the Senator's recommendation that President Johnson appointed Mr. Bagge. " 47
The Herald Tribune then recalled that the Dirksen law firm represented Panhandle Eastern Pipe Line, which "falls within the jurisdiction of the FPC. " Dirksen, therefore, is seen to play a variety of roles. Everybody--legislator, president, law firm, corporations, commissions and lobbyists--is rolled together in the same capacious bed.
Dirksen, although nominally a Republican, bobbed up in several parts of the Herald Tribune inquest. In 1962 he received, according to this rockribbed Republican newspaper, concentrated campaign contributions from members of the pharmaceutical industry: officials of the Warner-Lambert Pharmaceutical Company, the Olin Mathieson Chemical Corporation (Squibb) and G. D. Searle and Company, drug manufacturers.
"During this period," said the Herald Tribune, "Sen. Dirksen was leading the opposition against Sen. Estes Kefauver's campaign to regulate the cost and safety of consumer drugs.
"In his book, The Real Voice, on the late Sen. Kefauver's drug fight, author Richard Harris says that Sen. Dirksen became known as the defender of the medical and pharmaceutical interests. " 48
Representative Claude Pepper, Democrat of Florida, former senator, a practicing lawyer with three Florida offices, and an officer and director of the Washington Federal Savings and Loan Association of Miami Beach, in 1963 introduced two bills authorizing savings and loan associations to buy tax-exempt securities. He was at the time a member of the House Banking and Currency Committee which passed on the bills. Sitting on the board of Pepper's Savings and Loan Association was Arthur Courshon, one of the chief savings and loan lobbyists in Washington. One bill was enacted into sacred law in 1964.
Pepper lost his Senate seat in 1950 after fourteen years' incumbency in an election that achieved some fame owing to the novelty of the charges against him by George Smathers. The latter bawled to the swampwater electorate that Pepper had a sister who was a "thespian" and before his own marriage had "practiced celibacy. " One wonders what would happen in the outlands if some candidate were ever accused of being a carnivore, heterosexual and biped who had caused his wife to undergo parturition. Very probably he would be lynched before a dictionary could be ordered from Sears, Roebuck. Many congressmen, in sober fact, are paranymphs.
Not a few statesmen like Senator Smathers, Democrat of Florida, although no longer active as lawyers, nevertheless "promote legislation favorable to their law firm's clients. Over the years Sen. Smathers has supported bills beneficial to Standard Oil of New Jersey, International Telephone and Telegraph Corp. , Pan American World Airways, the Florida East Coast Railway and several insurance companies, all clients of the Miami law firm which bears his name. " 49 He is a real corporate fan.
Senator Sam J. Ervin, Jr. , Democrat of North Carolina, a member of the judiciary Committee which had held hearings on four of nine sitting Supreme Court justices, argued as a paid attorney against the government before the court for the Milliken textile interests. 50
Two businessmen-Senators--Wallace F. Bennett, R. , Utah, and Edward V. Long, D. , Mo. --have successfully blocked the "truth-in-lending" bill which Sen. Paul Douglas, D. , Ill. , and a host of other Senators have been sponsoring since 1960 [said the Herald Tribune ]. Sen. Bennett, former president of the National Association of Manufacturers, is head of an automobile distributorship and director of an insurance company. Sen. Long, a director of a St. Louis bank, has been a vocal supporter for savings and loan institutions since he served in the Missouri legislature. [More recently he has been shown tied up with James Hoffa's Teamsters' Union. ]
U. S. Controller of Currency James Saxon once commented that about two-thirds of all Congressmen are involved in savings and loan associations. An aid later reported Mr. Saxon's estimate was somewhat exaggerated but that a substantial number of Congressmen were indeed connected with savings and loan groups.
He said that of the 1,200 or so inquiries which the Controller's office receives annually regarding bank charters and branch applications, at least half come from Congressmen. Most of the inquiries, the aid said, were simple requests for information without any suggestion of pressure.
But as pointed out by George B. Gallaway, author and government expert, "A telephone call from a Senator or Congressman can paralyze the will of a government executive and alter the course of national policy.
In other cases, Sen. Jennings Randolph, D. , W. Va. , an insurance company director, has taken an active role in debate on proposed medical insurance legislation. His deciding vote killed medicare in the Senate in 1962.
Rep. Multer, chairman of the subcommittee on bank supervision, is privately associated with banking operations. 51
Senator B. Everett Jordan, Democrat of North Carolina, is chairman of the strategic Rules Committee and frequently has argued on the Senate floor against allowing increases in competing foreign textile imports as recommended by the Tariff Commission. Increasing such imports is part of a supposed national policy of knitting together a raveled world.
The senator is himself a domestic textile man, an officer and director of the Sellers Manufacturing Company of North Carolina.
It was before his committee that the case of Bobby Baker, hired secretary to the Senate Majority, was brought for investigation. Baker was accused of improperly using his position in personal out-of-bounds windfall moneymaking schemes. And it was Senator Jordan who abruptly closed the inquiry as the trail grew hot with the historic remark: "We're not investigating senators. "
"Would Bobby Baker have been able to engage in shadowy business deals if his Senate bosses had been above reproach? " the Herald Tribune asked rhetorically. 52 Baker, in the view of sophisticates, merely paralleled the operations of his masters, from whom as a very young man he had learned everything he knew about anti-public skulduggery.
Alluding to the Bobby Baker case, the Herald Tribune said it "raised doubts about the moral fiber of the government right up to the steps of the White House. " 53 It was, indeed, precisely as attention was directed toward the Senate group of which Lyndon B. Johnson had been a rabidly prayerful member that Senator Jordan abruptly closed off the tepid Baker investigation.
The television industry embraces many congressmen. It has been estimated that 75 per cent of congressmen have interests in television-radio broadcasting franchises. The Herald Tribune found that nine senators and fourteen representatives had direct or family-related interests in broadcasting stations. "While he was in the Senate, the family of Lyndon B. Johnson held the only television broadcasting license in Austin, Tex. "
The Case of Lyndon Johnson: A Paradigm
According to the Wall Street Journal, Mr. Johnson's large-scale property-dealing
activities began when be was a representative back in the 1930's. 54
"Unofficial estimates," said the Herald Tribune, "pegged the President's fortune, accrued mostly through his radio-TV holdings, from nine to 14 million. Last August in a public statement he listed his net assets at $3,484,098. A month later, Mr. Humphrey, who sometimes refers to himself as an 'unemployed druggist,' reported his net worth as totaling $171,396. " 55
Earlier Barry Goldwater, Republican presidential candidate, disclosed that he and his wife were worth $1. 7 million mostly in stocks, all of it inherited money.
Johnson, by contrast, was a poor boy who made good-in politics. Back in the 1920's he worked on Texas road gangs as a laborer and was variously employed in catch-as- catch-can jobs until he went to Congress in 1934 after a brief stint as state director of the depression-born National Youth Administration. Those were lean days but, as the Democratic song promised, happy days were returning and soon everything would again be as it was before the dismal crash of 1929. Once on the government payroll Johnson, like many of his colleagues, was never pried loose.
The Johnson fortune, and the miracle of its growth despite the monkish immersion of its architect in steamy affairs of state, came in for a great deal of sudden press attention. What figures are available on it were unprecedentedly disclosed during the presidential campaign of 1964. This revelation resulted from many rumors of the vast magnitude of the Johnson holdings and particularly from a cold-eyed 7,000-word analysis in the Wall Street Journal of August 11, 1964. The editors of this elite feuilleton had assigned a three-man assault team of ace reporters to invade Texas and find out what caused all the aroma. Their report heightened the worst fears abroad in the land, leading to the later
somewhat perfumed self-disclosure reported in the New York Times on August 20, 1964.
The Journal led off its findings with the following rollicking heading:
LYNDON'S PALS
HIS HOMETOWN COTERIE WHEELS AND DEALS IN
LAND AND BROADCASTING THEY BUY INTO AUSTIN BANKS, TRADE PROPERTY WITH LBJ
AND PLAY SOME POLITICS TOO DIRECT LINE TO THE WHITE HOUSE
What engages our attention here is not what might interest a political partisan: the fact that this was about the holder of the highest competitive office in the land. It would be a grave mistake to look upon Mr. Johnson's financial affairs as rarely exceptional. They are, rather, a baroque pattern of a Congressional Establishment man's affairs. I remarked earlier that none of these men operate alone. One man could not juggle all this stuff. Behind practically each Establishment figure is organization: a standard political organization of the Republican or Democratic variety and a personal political-financial organization of long-time cronies.
This area of our politics has not been studied, as far as I am aware, by our political scientists. What shows on the surface in Washington is only the tips of the various icebergs. These personal political-financial networks show what politics are about to most of their successful professional practitioners: chiefly a way of self-enrichment. The pubpols are trying to become junior finpols.
So, taking what the Journal found out as a paradigm of approximately what would be found in practically every Establishment case, there was disclosed the following:
The Johnson affairs revolved around the hitherto obscure Austin law firm of Clark, Thomas, Harris, Denius and Winters, "patronized by giant national corporations. " A separate lawyer, A. W. Moursund of Johnson City, was found to be Mr. Johnson's personal attorney, realty partner and a key figure in his affairs. He was "linked by private telephone circuit to the LBJ Ranch and the White House. " All the lawyers interviewed talked themselves down, jocosely. "I'm just a country lawyer," said Moursund. "I'm just a poor boy, born and raised in East Texas, trying to make an honest buck," said Don Thomas of the law firm. Said Mr. Ed Clark: "Spell my name right--I need the business. "
Mr. Johnson, the Johnson family, these lawyers and other cronies, the Journal found, held parallel or interlocking interests in television-radio properties, vast tracts of land made valuable by federal electrification and Johnson-sponsored dam projects over the years and shares in clusters of Texas banks that gave the group enormous credit resources. Said the Journal: "According to experts of the American Bar Association it is unusual for law firms to invest substantially in bank stocks, but perfectly legitimate. "
There was, first, the Texas Broadcasting Company, a name substituted for The LBJ Company when Mr. Johnson unexpectedly became president of the United States. This outfit owned the various radio and exclusive television stations of the Johnsons. A "competing" radio station, working out of the same address, had been long before set up by Johnson associates and employees: John Connally, now governor of Texas, Walter Jenkins, Merrill Connally, Willard Deason, Melvin Winters (the Johnson City contractor who is a trustee of the Johnson foundation), Robert L. Phinney (an old Johnson college roommate who became Austin's postmaster and more recently director
of the Internal Revenue Service for the region), and various other Johnson employees or associates.
The Journal was piqued by two contrasting strands it found in Johnson affairs: the pattern of monopoly as in the television broadcasting station and concentrated bank holdings, and the pattern of apparent competition within the group itself.
The broadcasting enterprises are housed in a modern office building at Tenth and Brazos Street in Austin owned by the Brazos-Tenth Street Corporation, a holding company held in the name of Don Thomas of the law firm. Mr. Thomas denied point- blank that he was just a "front man" for LBJ. Yet he is also the secretary and a director of the broadcasting company, and a trustee of The LBJ Company Profit-Sharing and Incentive Plan and of the Johnson City Foundation, an LBJ creation.
The Brazos-Tenth Street Corporation, the Journal found, figures in baffling big land deals with Mr. Johnson. Court records showed that it bought property from The LBJ Company and resold it the same day to Lyndon B. Johnson in person. It engaged in a series of such land deals with the then vice president, as local records showed, and in some cases acted as the buyerseller in deals between Mr. and Mrs. Johnson. The Journal explained them as possible tax maneuvers through a "conduit agency. "
Other deals were recounted in which parcels of land were sold over the years in a circle extending through Johnson companies and employees and then winding up again in the hands of the original owner, Donald Thomas of the law firm.
Money for the various deals, said the Journal, was supplied by banks in which the "members of the Johnson inner circle have an interest and a voice.
