In
1932 several politicians from Texas assumed important positions of
power in Washington. John Nance Garner
became Speaker of the House of Representatives. Texans also became
the chairmen of very important committees. This included Samuel
Rayburn (Interstate and Foreign Commerce), Joseph
J. Mansfield (Rivers and Harbors Committee), Hatton
W. Sumners (Judiciary Committee), Marvin
Jones (Agriculture Committee) and Fritz
Lanham (Public Buildings and Grounds Committee).
As
the historian, Robert
A. Caro
has pointed out in Lyndon Johnson: The Path
to Power: "Texans were elected on December 7, 1931,
not only to the Speakership of the House but to the chairmanship of
five of its most influential committees, Lyndon Johnson's first day
in the Capitol was the day Texas came to power in it - a power that
the state was to hold, with only the briefest interruptions, for more
than thirty years."
In 1932 Franklin
D. Roosevelt selected John
Nance Garner as
his running mate and on 8th November was elected as Vice President
of the United States. Garner was able to use this position to promote
the political careers of other Texans. He recommended that Jesse
H. Jones should become chairman of the Reconstruction Finance
Corporation (RFC). This became a crucial post in Roosevelt's New
Deal policies and Jones had the responsibility of directing billions
of dollars to help support American industry. Jones also took control
of the Federal Loan Agency, the Federal Housing Authority and the
Home Owners Loan Corporation. Such was his power that Jones was described
as a "fourth branch of government".
Samuel
Rayburn
as chairman of the Interstate
and Foreign Commerce Committee, played an important role in the establishing
the and the Federal Communications Commission. In 1937 Rayburn became
majority leader and held the post for the next three years.
Several of these Texas
politicians became involved in the Suite
8F Group, a collection of right-wing businessmen. The
name comes from the room in the Lamar Hotel in Houston where they
held their meetings. Members of the group included George
Brown and Herman Brown (Brown &
Root), Jesse H. Jones (multi-millionaire
investor in a large number of organizations and chairman of the Reconstruction
Finance Corporation), Gus Wortham (American
General Insurance Company), James Abercrombie
(Cameron Iron Works), Hugh R. Cullen
(Quintana Petroleum), William Hobby (Governor
of Texas and owner of the Houston
Post),
William Vinson (Great Southern Life Insurance),
James Elkins (American General Insurance
and Pure Oil Pipe Line), Morgan J. Davis
(Humble Oil), Albert
Thomas (chairman of the House Appropriations Committee), Lyndon
B. Johnson
(Majority Leader of the Senate) and John
Connally (Texas politician). Alvin Wirtz, Thomas Corcoran, Homer Thornberry and Edward Clark, were four lawyers who
also worked closely with the Suite 8F Group.
Suite 8F helped to coordinate
the political activities of other right-wing politicians and businessmen
based in the South. This included Robert
Anderson (president of the Texas Mid-Continent Oil and Gas Association,
Secretary of the Navy and Secretary of the Treasury), Robert
Kerr (Kerr-McGee Oil Industries), Billie
Sol Estes (entrepreneur
in the cotton industry), Glenn
McCarthy (McCarthy Oil and Gas Company), Earl
E. T. Smith
(U.S. Sugar Corporation), Fred
Korth (Continental National Bank
and Navy Secretary), Ross
Sterling (Humble Oil), Sid Richardson
(Texas oil millionaire), Clint Murchison
(Delhi Oil), Haroldson L. Hunt (Placid
Oil), Eugene
B. Germany (Mustang
Oil Company), David Harold Byrd (Byrd Oil Corporation), Lawrence
D. Bell (Bell Helicopters), William
Pawley
(business interests in Cuba), Gordon McLendon
(KLIF), George Smathers (Finance Committee
and businessman), Richard Russell (chairman
of the Committee of Manufactures, Committee on Armed Forces and Committee
of Appropriations), James
Eastland
(chairman Judiciary Committee), Benjamin
Everett Jordan (chairman of the Senate Rules Committee), Fred
Black (political lobbyist and Serve-U Corporation) and Bobby
Baker (political lobbyist and Serve-U Corporation).
One
of the major concerns of this group was to protect the interests of
the Texas oil industry. The
most prolific oil reserves in the United States was not discovered
until October, 1930. The East Texas Oilfield included Rusk, Upshur,
Gregg and Smith counties. The first small company to find oil in East
Texas was Deep Rock Oil Company. The first investor to take advantage
of the discovery was Haroldson
L. Hunt. He bought 5,000 acres of leases and an eighty-acre tract
for $1,335,000. Hunt soon owned 500 wells in East Texas.
The discovery of oil in
Texas made a small group of men a great deal of money. They decided
to join together in order to maintain their profits. This included
strategies for keeping the price of oil as high as possible. The rich
East Texas field caused problems as it initially caused the price
of oil to fall.
Ross
Sterling, the former owner of Humble Oil, was
elected governor of Texas and took office on 20th January, 1931. The
Texas Railroad Commission, under the control of the large oil producers,
attempted to limit the production of oil (prorationing) in the new
fields of East Texas. On 31st July, 1931, the federal court in Houston
sided with a group of independent oil producers and ruled that the
Texas Railroad Commission had no right to impose prorationing.
Large
oil companies in Texas such as Humble Oil were in favour of prorationing
and Sterling came under great pressure to intervene. On 16th August,
1931, Sterling declared martial law in Rusk, Upshur, Gregg and Smith
counties. In his proclamation Sterling declared that the independent
oil producers in these counties were "in a state of insurrection"
and that the "reckless and illegal exploitation of (oil) must
be stopped until such time as the said resources may be properly conserved
and developed under the protection of the civil authorities".
Sterling
now ordered the commander of the Texas National Guard, Jacob F. Wolters,
to "without delay shut down each and every producing crude oil
well and/or producing well of natural gas". Wolters who was the
chief lobbyist of several major oil companies in Texas, readily agreed
to this action. Wolters used more than a thousand troops to make sure
that the oil wells in East Texas ceased production. The Texas Railroad
Commission was now in firm control of the world's most prolific oil
fields. It now controlled the supply of the oil in the United
States. As a result, the price of oil began to increase.
When
Franklin D. Roosevelt gained power
he attempted to push a bill through Congress that would give his Secretary
of the Interior, Harold Ickes, the authority
to regulate domestic oil production. However, Sam
Rayburn, a politician from Texas, as chairman of the House Committee
on Interstate and Foreign Commerce, was able to kill the bill. It
was left to another powerful Texan, Tom
Connally, to sponsor the Connally Hot Oil Act. This gave the Texas
Railroad Commission the authority to proration oil.
Texas
oil millionaires also fought hard to maintain its tax concessions.
The most important of these was the oil
depletion allowance. It was first introduced in 1913 and allowed
producers to use the depletion allowed to deduct just 5 per cent of
their income and the deduction was limited to the original cost of
their property. However, in 1926 the depletion allowance was increased
to 27.5 per cent.
In the 1930s this group
were very hostile to Franklin
D. Roosevelt and
the New
Deal.
Edward
A. Clark arranged
for a meeting to take place between Herman
Brown and
Lyndon
B. Johnson.
During the meeting Brown complained about the cost of New Deal projects.
According to Robert Caro, Johnson said
to Brown:
“What are you worried about? It’s not coming out of your
pocket. Any money that’s spent down here on New Deal projects,
the East is paying for.”
Brown and Root now grew
rapidly as a result of obtaining a large number of municipal and federal
government projects. This included the Marshall Ford Dam on the Colorado
River. This was worth $27,000,000. In a letter written to Lyndon
B. Johnson,
George Brown, admitted the company was set to make a $2,000,000 profit
out of the deal. In 1940 the company won a $90 million contract to
build the Naval Air Station at Corpus Christi.
Jesse
H. Jones was another important figure in this group. He was chairman
of Roosevelt's Reconstruction
Finance Corporation (RFC). This became a crucial post in Roosevelt's
New Deal policies and Jones had the responsibility
of directing billions of dollars to help support American industry.
Such was his power that Jones was described as a "fourth branch
of government".
Jones
worked closely with John Nance Garner.
The men were both right-wing conservatives and did not always approve
of Roosevelt's more progressive policies. However, Jones helped to
finance many public works programs. Jones also took control of the
Federal Loan Agency, the Federal Housing Authority and the Home Owners
Loan Corporation.
In
1940 Jones became Secretary of Commerce. However, he retained his
post as Federal Loan Administrator. Congress granted Jones and the
Reconstruction Finance Corporation the power to distribute funds in
order to prepare for war. This included the creation of the Defense
Plant Corporation and the Defense Supplies Corporation. During the
Second World War Jones was responsible for the
spending of 20 billion dollars.
In 1942 George
Brown and Herman Brown established
the Brown Shipbuilding Company on the Houston Ship Channel. Over the
next three years the company built 359 ships and employed 25,000 people.
This was worth $27,000,000.
This contract was eventually worth $357,000,000. Yet until they got
the contract, Brown & Root had never built a single ship of any
type.
Another
businessman who did very well out of the war was Lawrence
D. Bell,
the head of the Bell Aircraft Corporation. This included the production
of the Bell P-39 Airacobra, the P-39D and the
P-59 Airacomet,
America's
first jet-powered airplane.
After
the war the company concentrated on helicopters and in Bell had the
great idea of making a 47-B available for Lyndon
B. Johnson
during his
1948 election campaign. As Robert Bryce (Cronies)
has pointed out: "With a helicopter, Johnson could land right
in the center of town and give a speech right on the landing spot,
eliminating the need for time-wasting car trips and from the airstrip."
Bell
decided to move his company from New York State to Fort Worth, Texas.
Johnson, who became a member of the Naval affairs Committee, was able
to help his friend sell helicopters to the United States Military.
In 1954 Paul
Douglas began making speeches in the Senate about the need for
tax reforms in order to eliminate special privileges such as the oil
depletion allowance. Douglas attempted to join the important Finance
Committee. He held seniority priority and should have been given one
of the two available seats on the committee. Johnson had to apply
considerable pressure on Harry Byrd, the chairman of the Finance Committee,
to stop this happening.
In 1955 Lyndon
B. Johnson became
majority leader of the Senate. Johnson and Richard
Russell now had complete control over all the important Senate
committees. This was proving to be an expensive business. The money
used to bribe these politicians came from Russell’s network of
businessmen. These were men usually involved in the oil and armaments
industries.
According to John
Connally, large sums of money was given to Johnson throughout
the 1950s for distribution to his political friends. “I handled
inordinate amounts of cash”. A great deal of this came from oilmen.
Cornel Wilde worked for the Gulf Oil Corporation. In 1959 he took
over from David Searls as chief paymaster to Johnson. He testified
that he made regular payments of $10,000 to Walter
Jenkins.
In 1956 there was another
attempt to end all federal price control over natural gas. Sam
Rayburn played
an important role in getting it through the House of Representatives.
This is not surprising as according to Connally, he alone had been
responsible for a million and a half dollars of lobbying.
Paul
Douglas and William Langer led the
fight against the bill. Their campaigned was helped by an amazing
speech by Francis Case of South Dakota.
Up until this time Case had been a supporter of the bill. However,
he announced that he had been offered a $25,000 bribe by the Superior
Oil Company to guarantee his vote. As a man of principal, he thought
he should announce this fact to the Senate.
Lyndon
B. Johnson
responded by claiming that Case had himself come under pressure to
make this statement by people who wanted to retain federal price controls.
Johnson argued: “In all my twenty-five years in Washington I
have never seen a campaign of intimidation equal to the campaign put
on by the opponents of this bill.”
Johnson pushed on with
the bill and it was eventually passed by 53 votes to 38. However,
three days later, Dwight D. Eisenhower,
vetoed the bill on grounds of immoral lobbying. Eisenhower confided
in his diary that this had been “the most flagrant kind of lobbying
that has been brought to my attention”. He added that there was
a “great stench around the passing of this bill” and the
people involved were “so arrogant and so much in defiance of
acceptable standards of propriety as to risk creating doubt among
the American people concerning the integrity of governmental processes”.
Senators called for an
investigation into the lobbying of the oil industry by Thomas
Hennings, the chairman of the subcommittee on Privileges and Elections.
Johnson was unwilling to allow a senator not under his control to
look into the matter. Instead he set up a select committee chaired
by Walter
F. George of
Georgia, a member of the Southern Caucus. Johnson had again exposed
himself as being in the pay of the oil industry.
Drew
Pearson of The Washington Post
picked up on this story and wrote a series of articles about Lyndon
B. Johnson and
the oil industry. Pearson claimed that Johnson was the “real
godfather of the bill”. Pearson explored Johnson’s relationship
with George Brown and Herman
Brown. He reported on the large sums of money that had been flowing
from Brown & Root, the “big gas pipeline company” to
Johnson. He also referred to the large government contracts that the
company had obtained during the Second World War.
Pearson also quoted a Senate report that pointed out there was “no
room for a general contractor like Brown & Root on Federal projects”.
Nevertheless, Johnson had helped them win several contracts including
one to build air-naval bases in Spain.”
Johnson was now in serious
trouble and sought a private meeting with Pearson. He offered the
journalist a deal, if Pearson dropped the investigation, he would
support Estes Kefauver, in the forthcoming
primaries. Pearson surprisingly accepted this deal. He wrote in his
diary: “I figured I might do that much for Estes (Kefauver).
This is the first time I’ve ever made a deal like this, and I
feel unhappy about it. With the Presidency of the United States at
stake, maybe it’s justified, maybe not – I don’t know.”
The decision by Dwight
D. Eisenhower to veto this bill angered the oil industry. Once
again Sid Richardson and Clint
Murchison began negotiations with Eisenhower. In June, 1957, Eisenhower
agreed to appoint their man, Robert Anderson,
as his Secretary of the Treasury. According to Robert Sherrill in
his book, The Accidental President:
"A few weeks later Anderson was appointed to a cabinet committee
to "study" the oil import situation; out of this study came
the present-day program which benefits the major oil companies, the
international oil giants primarily, by about one billion dollars a
year."
During the 1960 presidential
election John F. Kennedy gave his support
for the oil depletion allowance.
In October, 1960, he said that he appreciated "the value and
importance of the oil-depletion allowance. I realize its purpose and
value... The oil-depletion allowance has served us well."
On the advice of Lyndon
B. Johnson,
Kennedy appointed John Connally as Secretary
of the Navy. This was an important post as it controlled a great deal
of federal spending, including the contract to provide oil to the
US Navy. When Connally became Governor of Texas, Johnson arranged
for fellow Texan, Fred
Korth, to become the new Navy Secretary.
However, two years later,
Kennedy decided to take on the oil industry. On 16th October, 1962,
Kennedy was able to persuade Congress to pass an act that removed
the distinction between repatriated profits and profits reinvested
abroad. While this law applied to industry as a whole, it especially
affected the oil companies. It was estimated that as a result of this
legislation, wealthy oilmen saw a fall in their earnings on foreign
investment from 30 per cent to 15 per cent.
On 17th January, 1963,
President Kennedy presented his proposals for tax reform. This included
relieving the tax burdens of low-income and elderly citizens. Kennedy
also claimed he wanted to remove special privileges and loopholes.
He even said he wanted to do away with the oil depletion allowance.
It is estimated that the proposed removal of the oil depletion allowance
would result in a loss of around $300 million a year to Texas oilmen.
In November, 1963, Fred
Korth was forced to resign as a result of
accusations of corruption following the award of a $7 billion contract
for a fighter plane, the TFX, to General Dynamics, a company based
in Texas. Johnson could not afford to appoint another Texan in this
post. Instead he selected Paul
Nitze, the husband
of Phyllis Pratt, a Standard Oil heiress.
Albert Thomas (far left) with Lyndon Johnson on the day that John F. Kennedy was assassinated.
The assassination of John
F. Kennedy brought an end to this proposal to bring an end to
the oil depletion allowance. The
Suite
8F Group
also did very well out of the escalation of the Vietnam
War. They formed a new company called RMK-BRJ to obtain these
contracts. This included Halliburton who took over Brown & Root
in 1962. These contracts included building jet runways, dredging channels
for ships, hospitals, prisons, communications facilities, and building
American bases from Da Nang to Saigon. RMK-BRJ did 97% of the construction
work in Vietnam. The other 3% went to local Vietnamese contractors.
Between 1965 and 1972 Brown & Root (Halliburton) alone obtained
revenues of $380 million from its work in Vietnam.
Senator Abraham
Ribicoff of Connecticut attempted to expose this scandal. He claimed
that millions was being paid in kickbacks. An investigation by the
General Accounting Office discovered that by 1967 RMK-BRJ had “lost”
$120 million. However, GAO never managed to identify the people obtaining
these kickbacks.
Another company associated
with the Suite 8F Group also did well out of the Vietnam
War. Bell Helicopter Corporation began producing the UH-1. It
could climb 2,000 feet per minute and could fly at 125 miles per hour
for about three hours. It could carry nine fully equipped soldiers
and a crew of four. By 1969 Bell Helicopter Corporation was selling
nearly $600 million worth of helicopters to the United States Military.
According to Robert Bryce: "Vietnam made Bell Helicopters".
Anti-war protesters decided
that George Brown was the mastermind behind
this corruption. Demonstrations against him took place everywhere
Brown went. It got so bad that Brown advised Lyndon
B. Johnson to
withdraw from Vietnam. Brown told Johnson that if he did not do this,
the war would destroy both men. It did destroy Johnson but Brown survived
the protests.
Johnson’s resignation
as president was a body blow to the Suite 8F group. However, they
had made preparations and John Connally
had already got Richard Nixon
involved with the
group. He arranged for Nixon to meet fellow members at his ranch in
Texas. This resulted in Connally becoming Secretary of the Treasury.
However, they were not able to obtain the success that Johnson achieved
in the 1950s and 1960s. The main reason for this was that they were
no longer able to control the chairmanship of the important Senate
committees.
Forum Debates
The Kennedy Assassination
Suite 8F Group
Watergate
(1)
Robert
A. Caro,
Lyndon Johnson: The Path to Power (1983)
The profit on the subsequent Marshall Ford contract-the contract which
brought the total for the entire dam to $27 million-is unknown, but
out of a single $5 million appropriation for the high dam, George
Brown wrote Lyndon Johnson that Brown & Root's profit was about
$2 million ("which," Brown added, "is a nice bit of
work"). That appropriation, moreover, was for construction; contractors
generally made a higher percentage of profit on excavation contracts.
Brown & Root had made a million dollars out of the first contract
for the Marshall Ford Dam. Out of subsequent contracts for the dam,
they piled, upon that first million, million upon million more. The
base for a huge financial empire was being created in that deserted
Texas gorge.
Herman
Brown was a businessman who wanted value for money spent. His relationships
with politicians were measured by that criterion. George Brown, who
echoes his brother's thinking, says, "Listen, you get a doctor,
you want a doctor who does his job. You get a lawyer, you want a lawyer
who does his job. You get a Governor, you want a Governor who does
his job." Doctor, lawyer, Governor, Congressman-when Herman "got"
somebody, he wanted his money's worth. And with Johnson, he was getting
it and more.
Herman
Brown was a man who always balanced his books. When he had been asked
for a significant contribution to Johnson's 1937 campaign, he had
refused to make one. Now, in 1938, Johnson would be running again.
Herman Brown let Johnson know that he would not have to worry about
finances in this campaign-that the money would be there, as much as
was needed, when it was needed. In Ed Clark's words, "Herman
gave Lyndon his full weight."
Herman
Brown's full weight meant the support not only of Brown & Root,
but of Brown & Root's subcontractors, of the banks in Austin with
whom Brown & Root banked, of the insurance brokers who furnished
Brown & Root performance bonds, of the lawyers in Austin who received
Brown & Root's fees, the businessmen in Austin who supplied Brown
& Root with building materials, and the local politicians, not
only in Austin but throughout the Tenth Congressional District, accustomed
to receiving Brown & Root campaign contributions in return for
road-building contracts. These men had followed Herman's lead during
the 1937 campaign, and had supported Avery. Now they would follow
Herman's lead again. When Lyndon Johnson ran for Congress in 1938,
he wouldn't have to raise money from Houston merchants, and he wouldn't
have to raise money late at night, after a long day on the road. All
the funds he needed would be available at his command-more funds,
in fact, than he could possibly use.
(2)
Barr
McClellan, Blood Money
and Power: How L.B.J. Killed J.F.K. (2003)
Another important Johnson friendship was in the construction business.
This special relationship actually started in 1937 with Brown &
Root, the contractors who built the dams needed for LCRA in central
Texas. During the war, the company would expand mightily for the war
effort as military bases were built everywhere in Texas. After the
war, from his new position in the Senate reviewing waste and then
preparedness, Johnson was in the middle of the armed forces and the
military-industrial complex. George Brown and brother Herman Brown
remained good friends of Johnson throughout his long political career.
Like old money, these old friends were there from beginning to end.
Wonder kids from the start, they stayed friends and prospered.
There
was another important class of supporters who had entered Johnson's
sphere of friends before the 1948 Senate election. This group included
the Ling story, but it was more accurately the Murchison story and
Big Oil in what was then high-tech business. During the 1950s as money
flowed to Big Oil, the huge sums had to be invested somewhere. Construction
was a key attraction and major investments went into building, from
readymix plants to highways and bridges to high-rises. Murchison and
his Big Oil friends had the excess profits needed, called "burn
money." Like throwing cash in an incinerator, this was the unexpected
cash. They used it to invest in apparently hopeless ventures or into
business they knew little or nothing about.
D.
H. Byrd attracted their interest because he experimented in airplanes
and rockets, important keys to the military industrial complex in
the late 1950s. A member of Big Oil, D. H. "Dry Hole" Byrd
was well known for his lack of success in the oil business . Finally,
when the east Texas field was developed, he bought into it and became
wealthy. Through him, the foundations were laid for the military-industrial
complex that centered on LTV. With the money flowing everywhere, D.
H. Byrd had enough extra to purchase the building that later housed
the Texas School Book Depository.' There were notable success stories.
John Connally advanced into the Governor's Mansion. Clint Murchison
and his Big Oil friends all became the new billionaires and Dallas
became Big D. Old friends George and Herman Brown benefited with military
construction during the war. After the war they moved into oil. As
one example, they helped convert the Big Inch and Little Inch, the
emergency wartime oil pipelines, into Texas Eastern and its natural
gas pipelines.
(3)
Robert Sherrill, The Accidental President (1967)
Franklin Jones, a wry East Texas lawyer who helped found The Texas
Observer, is given credit for the maxim, "To understand Johnson,
you have to get down to the Brown and Root of the thing." The
mutual interests of B & R and Johnson are, of course, well known.
Johnson claims credit for the establishment of the Corpus Christi
naval air training base, and the shipbuilding yards at Houston and
nearby Orange in World War II; but he has denied any personal persuasion
in getting the Corpus Christi contract for B & R, or the contracts
to build 359 destroyer escorts at the Texas shipyards, or the very
profitable defense construction jobs in Texas and Spain and in the
South Pacific.
It
would be unreasonable to conclude that (1) because Johnson has for
years been a powerful man in Washington and (2) because Brown &
Root has during the same period become probably the largest construction
company in the world, partly as a result of great defense and other
federal contracts, both in this country and abroad, this adds up to
something crooked. A politician must get his campaign money somewhere,
so why not from Brown & Root, as Johnson has done for more than
a quarter of a century? Brown & Root probably does as conscientious
a job for the government as the next contractor.
Still
it is worth noting that Lyndon Johnson, George Brown and the late
Herman Brown made an awfully effective team. For instance, there was
the little matter of the National Aeronautics and Space Administration
(NASA) Space Center in Houston. Why build it out in the middle of
that great dreariness, twenty-two miles from the heart of Houston?
Why, indeed, build it in Texas at all rather than in Florida, where
billions of dollars already had been poured into developing the nation's
launching pad; or in Houston rather than at one of the other twenty
cities that wanted the NASA operations so much?
The
answer to that lies in Johnson's friendship with George Brown. At
the time the NASA site was selected for Houston, and Brown & Root
was chosen to build the Space Center, Johnson was head of the Space
Council. But also important in the decision was Congressman Albert
Thomas of Houston, chairman of the appropriations subcommittee controlling
NASA's budget. The late Thomas was a classmate of George Brown's at
Rice University and they were very close over the years; Brown established
a chair of political science at Rice in Thomas's honor. Brown is chairman
of the board of trustees at Rice and has been for a long time. Humble
Oil Company, Texas' largest oil company and now a subsidiary of Jersey
Standard, has always looked upon Rice as "its" school: the
late Harry Weiss, who ran Humble, was on the Rice board of trustees;
Walter Fondren, Sr., a founder of Humble, donated the money for the
Fondren Library at Rice; Weiss donated the money for establishing
Rice's department of geology; a large proportion of each Rice graduating
class used to go on the Humble payroll (this is not so true any longer).
Johnson's high regard for the oil industry of Texas, and especially
for the big companies such as Humble, is of course a matter of heavy
record in the Senate.
So
there was considerable satisfaction in the hearts of Johnson, Thomas,
Brown, Rice, and Humble when NASA came to Houston. Of course, there
was some profit, too, in addition to Brown & Root's cost-plus-fee
on the $90 million project. Humble Oil gave the 1,000 acres (through
Rice) that the government accepted as the nucleus of the Manned Spacecraft
Center homestead. Measuring it by present-day land prices, this was
at least a $5 million gift.
(4)
Robert Dallek, Lone Star Rising: Lyndon Johnson and His Times
(1991)
By
the middle of 1937, FDR, worried that deficit spending was leading
to high inflation, believed that the government needed to curb its
outlays. Ickes, who had jurisdiction over the PWA, feared that money
allocated to Texas dams would line the pockets of builders overcharging
the government. In the summer of 1937, however, Johnson persuaded
the White House to commit another $5 million to the Marshall Ford
Dam, a third of the additional $15.5 million promised in 1935. The
prospect of throwing some 2000 men out of work and of halting construction
on a project that would ultimately save Texas millions of dollars
in flood damages played a large part in the decision. Unless the Marshall
Ford construction was continued, an LCRA memo warned, 80 percent of
the 2500 men on the job would be fired, and floods, like one in June
1935 costing over $10 million, would continue to plague south-central
Texas. On July 21, in a ceremony at the White House, James Roosevelt,
the President's son and secretary, handed Johnson, who was accompanied
by Wirtz and members of the LCRA Board, the President's order granting
the $5 million. Joking with the delegation, Jimmy Roosevelt said that
Johnson "had kept him busy so much of the time on the Texas project,"
that he "`will have to catch up on his sleep' now." "`The
president is happy to do this for your congressman,' " Jimmy
added. In response to repeated prodding by Johnson, the Administration
provided another $14 million over the next four years to complete
the network of Texas dams. The expenditure paid handsome dividends
in lower unemployment, flood prevention, and more abundant and cheaper
electric power.
The
dam-building also served Lyndon's political interests and the well-being
of Brown & Root, a construction company in Austin controlled by
George and Herman Brown. With Lyndon's help they won government contracts
that turned a small road-building firm into a multi-million dollar
business. Their success gave Lyndon a financial angel that could help
secure his political future. As Tommy Corcoran put it later, "A
young guy might be as wise as Solomon, as winning as Will Rogers and
as popular as Santa Claus, but if he didn't have a firm financial
base his opponents could squeeze him. When Roosevelt told me to take
care of the boy," Corcoran added, "that meant to watch out
for his financial backers too. In Lyndon's case there was just this
little road building firm, Brown and Root, run by a pair of Germans."
(5)
Milton
Viorst, Hustlers and Heroes (1971)
While
Bobby was playing politics with Lyndon and arranging parties with
Gorgeous George, he was learning about a whole new facet of life from
Senator Robert Kerr of Oklahoma. Kerr was a self-made millionaire
who freely and publicly expressed the conviction that any man in the
Senate who didn't use his position to make money was a sucker. In
a body where few of the members are averse to earning a fast buck,
Kerr was the chief of the wheelers-and-dealers. For some reason, he
took a shine to Bobby and found him an apt and receptive pupil. He
helped Bobby get started as a businessman, both with advice and with
cash. Bobby learned to play the stock market, then spread out into
other ventures. His biggest undertaking in the late Fifties was the
Carousel Motel, which he built on a, patch of desolate beach near
Ocean City, Maryland, a few hours from Washington. Its opening in
1962, which Lyndon and Lady Bird and dozens of other Washington celebrities
attended, was a major social event, covered in detail by the status-conscious
women's pages of the local papers. It is doubtful that anyone suspected
that in the fun at the Carousel lay the seeds of Bobby's downfall.
For Bobby, after all, was among the most respected young men in official
Washington. He was the protege of Johnson, Smathers and Kerr. Without
a single voter behind him, he had shown he could keep up with the
fastest pacers on Capitol Hill. As the Presidential election of 1960
approached, Bobby's potential for growth appeared unlimited.
(6)
Bobby
Baker, Wheeling
and Dealing: Confessions of a Capitol Hill Operator (1978)
There was big
money to be made, Kerr said, by gaining a near monopoly on soft
drink, candy, and cigarette machines to be installed at sites where
companies were performing defense-related work that depended on
government contracts. I've heard that Clark Clifford, the Washington
lawyer-lobbyist who's been close to every Democratic administration
beginning with Harry Truman's, talked Senator Kerr out of investing
in the scheme because it clearly would constitute a conflict of
interest on Kerr's part. Senator Kerr then told Fred Black, "I
want to help Bobby Baker. I'll get you the financing if you guys
want to go into the vending machine business. There's a fortune
to be made." True to his word, Senator Kerr obtained a $400,000
loan for us from the Fidelity National Bank and Trust Company of
Oklahoma City, in which he owned stock. We spent the money for vending
machines, installing them - among other places - at North American
Aviation and at several subsidiary sites. Within a couple of years
the Serv-U Corporation we founded-along with my law partner, Ernest
Tucker; a Las Vegas hotel-casino man, Eddie Levinson; and a Miami
investor and gambler, Benjamin B. Siegelbaum - was grossing $3 million
annually. I owned 28.5 percent of the Ser-U Corporation in those
days.
