John Alex McCone was born in Los Angeles on 4th January, 1902. A child of Scotch-Irish parents, he was raised a devout Roman Catholic. McCord studied engineering at Berkeley, where he met Stephen D. Bechtel, his future business partner. Following graduation, McCone found work at the Llewellyn Iron Works. He started off as a riveter but by the age of 26 he had become construction manager.
In 1931 McCone was appointed sales manager for Consolidated Steel. The company was in financial difficulty but McCone came to the rescue when he sold 55 million tons of steel to a group of Californian businessmen building the Boulder Dam (later renamed the Hoover Dam). This group of businessmen included Henry J. Kaiser and Stephen D. Bechtel.
In 1937, McCone left Consolidated Steel to join Bechtel and Kaiser. Initially they established the Bechtel-McCone Corporation. Over the next few years the three men formed several companies with them taking it in turn to become the front man. In some cases, they remained silent partners in these business ventures.
The first major customer of Bechtel-McCone was Standard Oil of California (Socal). The company obtained a contract to build Socal’s new refinery in Richmond. It was the first of many refineries built by Bechtel-McCone. By 1939 the company had more than 10,000 employees and was building refineries, chemical plants and pipelines all over the world.
In the summer of 1940 McCone and Stephen D. Bechtel had a meeting with Admiral Howard L. Vickery of the U.S. Maritime Commission. Vickery told the men he “had received a telegram from the British Purchasing Commission (BPC) urgently requesting that the Maritime Commission arrange the building of 60 tankers to replace the ships the British had lost to German torpedoes”. At another meeting a few weeks later, Maritime Commission chairman, Admiral Emory S. Land, told Bechtel and McCone that: “Besides building ships for the British, they would have to build them for the Americans as well. Not merely tankers, but Liberty and Victory cargo ships, troop transports, the whole makings of a merchant navy.” Admiral Land confidently added that thousands of vessels would be needed as “America was headed into war.”
As a result of these two meetings, Bechtel, McCone and Kaiser built shipyards at Richmond and Sausalito. Several of their companies were involved in this project that became known as “Operation Calship”. This included Kaiser Company (78 ships), Kaiser-Swan Island (140 ships) and Kaiser-Vancouver (118 ships).
It was a terrible gamble because at that time they were relying on the predictions of Admiral Emory S. Land. However, Land was right and only a month after the Japanese attack on Pearl Harbor, the Maritime Commission awarded Calship its first shipbuilding contract. Within a year, Calship was employing over 42,000 workers at its shipyards.
In 1942 McCone and Stephen D. Bechtel obtained a contract to build aircraft at Willow Run in Alabama. The War Department agreed to pay all the company’s costs plus 5 percent on work estimates presented by Bechtel-McCone every six months. A 300-acre factory was built and 8,000 employees hired to staff it. However, no aircraft were built. Employees were paid for doing nothing. A local man, George P. Alexander, discovered details of this scam and collected affidavits from workers who admitted that they “went in every day at 9.00, punched the time clock, then went home”. They then returned to the factory at 5.00 to “punch out”.
Alexander filed suit against Bechtel-McCone in federal district court on 31st July, 1943. He claimed that the company had made “many and various claims against the government of the United States, or a department or officer thereof, knowing such claims to be false, fictitious or fraudulent.” However, the judge dismissed the case. The problem was with the contract, not the claims by Bechtel-McCone. As John McCone admitted to Fortune Magazine on 17th May, 1943: “Every six months, we estimate how much work we expect to do in the next six months and then we get a fee of five percent of the estimated amount of work regardless of how much work we actually do turn out.”
Bechtel-McCone was also involved in another scandal concerning war contracts. Lieutenant General Brehon Somervell, head of the Army Sources of Supply Command, decided to build “a major refinery at the Norman Wells oilfields in Canada’s Northwest Territories, and run a pipeline from there 1,200 miles southwest through the Yukon Territory into Alaska.”
The contract to do this was given to John McCone and Steve Bechtel. The terms of the contract were very unusual. The Bechtel-McCone Corporation was guaranteed a 10% profit on the project. The other surprising thing about the Canol Project was that it was to be a secret contract. It seems that Somervell did not want anyone outside the War Department and the Bechtel-McCone Corporation to know about this deal. The reason for this is that Harold Ickes, as Interior Secretary and the head of the Petroleum Administration for War, should have been the person who oversaw this project.
The $35 million for the project came from within a massive war appropriations bill that was passed by Congress in April 1942. After working on it for a year the cost had reached over $100 million. It was finished in May 1945. However, the wrong sized pipes had been used and it was discovered that to pump the oil it cost $150 per barrel rather than the $5 estimated by Somervell, Bechtel and McCone. Less that a year after it was finished, the plant and pipeline was abandoned. It had cost the American taxpayer $134 million.
After the war the “General Accounting Office told a House Merchant Marine Committee investigation that the company had made $44,000,000 on an investment of $100,000. The same committee a few months later complained that Mr McCone's company was “paid $2,500,000 by the government to take over a shipyard costing $25,000,000 and containing surplus material costing $14,000,000.”
Tommy Corcoran was not the only person arranging for people like McCone, Kaiser and Berchtel to obtain lucrative government contracts during the war. John L. Simpson was a close friend of an interesting group of people including Allen Dulles, John Foster Dulles, Dean Acheson and William Donovan. In 1942 Simpson was recruited into the OSS by Allen Dulles. His official title was chief financial advisor for the U.S. Army in Europe. In 1944 Simpson returned to San Francisco and became a consultant to the Betchtel-McCone Corporation. His arrival brought even more contracts from the War Department.
At the end of the Second World War the Bechtel-McCone company was brought to an end. John McCone now invested much of the profits he had made from war production in Pacific Far East Lines. McCone was the majority stockholder but Henry J. Kaiser and Stephen D. Bechtel were also silent investors in this company. McCone also formed a partnership with Henry Mercer, the owner of States Marines Lines, whose vast fleets operated in the Atlantic. As Laton McCartney pointed out in Friends in High Places: The Bechtel Story, McCone was now “one of the dominant shipping figures in the world.”
McCone and Bechtel were also directors of the Stanford Research Institute (SRI). McCone was also chief fund-raiser for the California Institute of Technology, whose scientists had been involved in the development of the atom bomb and were now involved in nuclear research.
McCone took a keen interest in politics and was a fanatical anti-communist. McCone told his friends that the Soviets intended to achieve “world domination”. I. F. Stone described him as a “rightest Catholic… a man with holy war views.”
John L. Simpson, chief financial officer to the various corporations owned by Stephen D. Bechtel, introduced McCone to Allen Dulles at a meeting in 1947. It was at this time he became friends with William Knowland and Dwight D. Eisenhower.
In 1948 Harry S. Truman appointed McCone as Deputy to the Secretary of Defense. According to Laton McCartney, despite his title “it quickly became apparent that he was the department’s real boss.” In 1950 he became Under Secretary of the Air Force. While in these posts McCone gave contracts to Standard Oil and Kaiser Aluminum, two companies in which he had financial connections.
McCone was an ardent Cold War warrior and in 1956 attacked the suggestion made by Adlai Stevenson that there should be a nuclear test ban. McCone, a strong supporter of Dwight Eisenhower, accused American scientists of being "taken in" by Soviet propaganda and of attempting to "create fear in the minds of the uninformed that radioactive fallout from H-bomb tests endangers life."
In 1958 President Dwight Eisenhower rewarded McCone by appointing him Chairman of the Atomic Energy commission. After the Bay of Pigs disaster, President John F. Kennedy sacked Allen W. Dulles as Director of the Central Intelligence Agency. Under pressure from right-wingers in the intelligence community, Kennedy appointed McCone as the new director of the CIA.
It is assumed that McCone was informed of Executive Action (a plan to remove unfriendly foreign leaders from power). However, McCone always denied any knowledge of this policy. This included the ZR/RIFLE project, a plot to assassinate Fidel Castro. Robert Maheu, a veteran of CIA counter-espionage activities, was instructed to offer the Mafia $150,000 to kill Castro. The advantage of employing the Mafia for this work is that it provided CIA with a credible cover story. The Mafia were known to be angry with Castro for closing down their profitable brothels and casinos in Cuba. If the assassins were killed or captured the media would accept that the Mafia were working on their own.
In April 1963 McGeorge Bundy suggested to President John F. Kennedy that there should be a "gradual development of some form of accommodation with Castro". In an interview given in 1995, Bundy, said Kennedy needed "a target of opportunity" to talk to Fidel Castro. Later that month Lisa Howard arrived in Cuba to make a documentary on the country. In an interview with Howard, Castro agreed that a rapprochement with Washington was desirable.
On her return Howard met with the Central Intelligence Agency. Deputy Director Richard Helms reported to John F. Kennedy on Howard's view that "Fidel Castro is looking for a way to reach a rapprochement with the United States." After detailing her observations about Castro's political power, disagreements with his colleagues and Soviet troops in Cuba, the memo concluded that "Howard definitely wants to impress the U.S. Government with two facts: Castro is ready to discuss rapprochement and she herself is ready to discuss it with him if asked to do so by the US Government."
McCone was strongly opposed to Lisa Howard being involved with these negotiations with Fidel Castro. He argued that it might "leak and compromise a number of CIA operations against Castro". In a memorandum to McGeorge Bundy, McCone commented that the "Lisa Howard report be handled in the most limited and sensitive manner," and "that no active steps be taken on the rapprochement matter at this time."
When John F. Kennedy was assassinated McCone immediately sought a meeting with Robert Kennedy. The two men met between 2 and 2:30 p.m. Kennedy later told his aide Walter Sheridan: "I asked McCone if they had killed my brother."
On 23rd November, 1963, the day after the assassination, McCone informed Lyndon B. Johnson that Lee Harvey Oswald had been in contact with Valery V. Kostikov, a Soviet diplomat, in Mexico. He also passed on information that Winston Scott, CIA station chief in Mexico, believed that Kostikov was a KGB agent who specialized in assassination.
Four days after the assassination, McCone sent a copy of a highly classified document to the White House, the State Department and the FBI. This document claimed that on 18th September, 1963, Gilberto Alvarado, an agent of the Nicaraguan Secret Service, had infiltrated the Cuban Embassy in Mexico City, saw an employee of that embassy give $6,500 to Oswald, to carry out the assassination of an "important political figure."
Further investigations revealed that Alvarado admitted that he had made up this story to incite hostilities between the United States and Cuba. However, Alvarado's story continued to be promoted by McCone and Thomas C. Mann. In his book, The JFK Assassination Debates (2006), Michael L. Kurtz claims that both McCone and Mann "received reprimands" for trying to blame the assassination of John F. Kennedy on Fidel Castro.
In 1964 McCone arranged for the CIA and other agencies to provide the opponents of Salvador Allende with funds of $20 million. He was also active in helping to establish military rule in Ecuador.
McCone had clashed with President John F. Kennedy over his decision to try and withdraw from Vietnam. He got on better with President Lyndon B. Johnson but he objected to his Vietnam policy on the grounds that it could not be successful and advocated the use of increased force. This led to his resignation in 1965 as Director of the CIA.
Soon afterwards McCone was appointed to investigate the Watts Race Riot. The McCone Commission report was published in December, 1965. This was not well received. The California Advisory Committee to the US Commission on Civil Rights claimed that "the report is elementary, superficial, unorganized and unimaginative... and... a marked and surprising lack of understanding of the civil rights movement.... The McCone Commission failed totally to make any findings concerning the existence or nonexistence of police malpractices."
McCone became a director of ITT. He also did consultancy work with the CIA. In 1970 McCone met with Henry Kissinger and CIA director Richard Helms. McCone later testified that he tried to persuade Helms to accept $1 million in order to prevent the election of Salvador Allende in Chile. The offer was refused by Helms, but $350,000 did pass from ITT to Allende's opponent with CIA assistance. This included implementing ITT dirty tricks campaign in Chile.
In retirement McCone was also director of Pacific Mutual Life Insurance, United California Bank, Standard Oil of California, and Western Bancorporation.
McCone also helped to establish Committee on the Present Danger. A pressure group that campaigned against cuts in military spending.
John Alex McCone died on 14th February 1991.