Tuesday, April 10, 2007
Flashback: Times Up for Me Which Meant a Stall Until the National Strategy was Ready.
[Fifty plus years of politics for my kids and grandchildren.]
In late summer, 1969, it looked like my time was up in Commerce. The faceless professional, Dave Koch dropped in, practiced a few illusory golf swings and said, youd better start packing because the under-secretary has on his pad the first priority is to get you out of here. All the time Geimer was saying things werent so badjust play ball with them. I decided to go with Koch. Any time you have Correspondence Control in synch with Correspondence Control in the White House and they both agree times up time for bettering relations had passed. But I didnt need to think of a strategy: the secretary of commerce inadvertently thought of it. It had to do with Nixons nominee to the U.S. Supreme Court.
Bitterness in the Senate over the Supreme Court began with LBJs appointment of his close and good friend Abe Fortas, then associate justice, as chief justice of the United States to succeed the retiring Earl Warren. Fortas had masterminded the legal action whereby Johnson stayed on the Texas ballot during his first Senate run. Johnson had technically won the primary by 87 votes and his opponent convinced a federal judge to issue an order taking LBJs name off the general election ballot while the primary results were being contested as there were serious allegations of corruption in the voting process including 200 Johnson votes that miraculously were cast in alphabetical order! Johnson appealed to Fortas, then a private lawyer, who got Supreme Court Justice Hugo Black to overturn the ruling; Johnson stayed on the ballot, won the primary and general election and became senator. Understandably, Johnson and Fortas became close friends and remained so ever since.
Fortas had had a tough time getting confirmed as chief justice because a number of northern Republicans and conservative southern Democrats feared his liberal views; they concentrated on the fact that Fortas had received $15,000 for speaking engagements at American University law school. It was a sham argument. For the first time in history, a nominee for the chief justiceship was required to appear before a Senate committee to testify in his own behalf. The Senate began what it called a protracted session (but which was actually a filibuster) and after Johnson sought to end the filibuster and lost (45 to 43) when two-thirds was required, he reasoned that Fortas would have to vacate the nominationwhich Fortas did.
But that wasnt the end of the Fortas matter. He remained on the bench as associate but in 1969 a new episode concerning his tenure aroseand this was impossible to defend. Fortas signed a contract with the family foundation of Wall Street financier Louis Wolfson, a friend and former client, for unspecified advice for which the foundation was to pay Fortas $20,000 a year for the rest of Fortas life (and then pay his widow the same amount for the rest of her life). Wolfson was under investigation for securities violations at the time and evidently expected that his arrangement with Fortas would help stave off criminal charges or help him get a presidential pardon. Wolfson was convicted and spent time in federal prison; Fortas returned the retainer. But then chief justice Earl Warren remonstrated with Fortas to resign since he was damaging the reputation of the court. This Fortas did.
Nixon named one Clement F. Haynsworth to the Fortas seat. Haynsworth was a native of Greenville, South Carolina and a conservative. The Haynsworth nomination was controversial because as a judge of the court of appeals he made decisions the liberals said favored segregation as well as decisions on which he allegedly had a financial interest. So there was to be a replay of the bitterness that had engulfed Fortas, this time with the Democrats trying to even the score. The media was filled with stories on whether or not Haynsworth was a segregationist or not. At a Commerce staff meeting, Stans said that there was a likelihood that some black Commerce types who worked for us Schedule Cs might criticize the appointment. The logical response, he said, would be to kick the black guy out. But that would prompt a furor in the press. So, Stans said, the idea is this: keep him in. Pacify him until the crisis passed.
Thanks for the tip, Maury. With my own time running short and wanting to stick around until Fall when the strategy would be ready to go, I decided to take advantage of Stans warning to stall my own firing. This as it later turned out, alienated Geimer; I thought at the time it was a disagreement over strategy. Not so. It was actually more serious, as it turned out, than I imagined at the time. My view: with this job being sold to me under false pretenses and now with the entire Commerce hierarchy after me and some of the White House people, too and the fact that I wanted to put the finishing touches on the strategy how could I be faulted for using a time-honored device to make a stall? His view: when you agree to work for a president of the United States, you are compelled to be so loyal as to allow yourself to be sacrificedeven if you are in the rightfor the good of the order. Not me. I decided I could stall without bringing harm to the president. I thought he had agreed but inwardly he had not. Anyhow, when the guillotines blade was raised high on the scaffold with the headsman prepared to drop it on my neck, I pulled a stall.
I leaked a comment to a friend of mine at the Associated Press saying that if I had my druthers, Id just as soon see a better jurist than Haynsworth named. The story got good attention in the Washington Post because it was billed as sub-cabinet official takes issue with administration. I was called down to the secretarys office and I strolled in with typical insouciance. Stans once again was standing at the desk leaning on his hands which were formed into fists. As soon as he began to take off on me, I volunteered to resign to spare him further embarrassment. Of course leaving the federal service was just what he feared. So he swung into reverse as he had with the car dealership matter and begged me to stay since he didnt want any more bad press. I agreed, reluctantly. So I strolled back to my office with Stans words ringing in my ears entreating me as hard as he could to remain. Koch said it was funny. They were ready to fire you anyhow, he said. In fact, your firing papers had been sent to the office of the Commerce general counsel as all others are routinely, he said. Then after your meeting there was a fury of activity trying to get the papers back so that your firing would be cancelled. First time Ive ever seen this happen. Congratulations.
Not so Geimer who now voiced more strongly the view that I had willfully done damage to Nixon himself. I told him no damage was done to Nixon; damage would be done if I had allowed myself to be shuffled off before I could perfect the strategy paper. Yet it still seemed like an office disagreement, nothing more. Thus I had several months left at Commerce. Those months set a pattern which implemented a working relationship between Commerce and the Urban League (arranged with Whitney Young) which has provided 1,700 plus minority dealerships the MESBIC program which has grown from a trickle to $475 million of private funds.
By late Fall, Stans fashioned a strategy that could achieve both endsget rid of me as the operating head of the agency and kick me upstairs by insisting that the assistant to the secretary role take on more policy strategizing. I agreed because I wanted to be around when the strategy paper was disseminated.
The strategy called for (a) the abolition of my own officefulfilling a dream I had to abolish something in the federal government (b) setting up instead a public-private Minority Enterprise Development Corporation or MEDCO with a board of private entrepreneurs, no government officials (c) a corporation that would be authorized to sell nonvoting bonds, interest and principle of which would be guaranteed by the fedsguaranteed not paid by (d) the funds in turn to be lent to local affiliates of MEDCO and invested in minority businesses.
Local MEDCOs would be formed in cities, townships and rural areas across the country. Local residents wold subscribe to the voting stock of a MEDCO and state government could, if it wished, pledge an amount equal to one-third of the private subscription (which I worked out with Ogilvie and Arrington). The state would, in turn, apply to the national MEDCO for disbursement of organizational and administrative expenses. But the heart of the new institution would be the local MEDCO.
Large amounts of capital would be available. But an age-old complaint and rap on minority enterprisewhich, in fact, bedeviled the Small Business Administration, was that just money without sound business expertise could easily be frittered away by lack of entrepreneurial talent. Not so with this idea. Private institutions could invest human capitalan unique conceptexecutives, lawyers, accountants, marketers on a full-time basis in return for tax credits pegged to the salaries of the invested personnel, meaning that it would be uniquely possible to join dollars with expertise and send both into the field together. We calculated that this program, if started in 1969, could produce 400,000 new minority businesses by 1980.
In the meantime I was testifying to House and Senate committees and at least once Stans came up with me. The enclosed photo shows Stans, me and my eventual successor, Abe Venable. All the while the testimony was going on before two committees which took most of a day, Bill Geimer and his lovely wife were in touch with my wife Lillian in Chicago who was going into labor. When I finished my testimony, Bill and my secretary gave me a plane reservation, contracted with my private funds, for Chicago and told me that Lillian had gone to Resurrection hospital for the delivery. Their thoughtfulnessespecially Billswas much appreciated. I arrived at Resurrection hospital just in time to be introduced to our fourth childJeanne Marietrundled out, a cute little red-faced baby who was complaining about the indignity of being pulled out of her comfortable surroundings inside Mommy. She has been a joy ever since.
When I returned to Washington, Haynsworths nomination had failed in the Senate, my strategy had been disseminated, given to the secretary as well as the president as the shakeup planned by Stans went into effect. I had a heart-to-heart with my friend, Bob Novak resulting in this Evans & Novak column of November 3, 1969. It uses the words Negro and ghetto which was acceptable terminology then but now politically incorrect. It read as follows:
WASHINGTONThe latest shakeup in President Nixons faltering program of black capitalism has saved Secretary of Commerce Maurice Stans from potential political embarrassment but moved Mr. Nixons campaign pledges to the Negro ghetto still further from redemption.
Stans breathed a sigh of relief this week when Thomas F. Roeser, a young Chicago corporation executive with superb Republican credentials allowed himself to be kicked upstairs out of the directorship of the Commerce Departments Office of Minority Business Enterprise (OMBE). What the administration feared was Roeser resigning with a blast exposinig the absolute failure to develop black capitalism since Jan. 20.
Saved that embarrassment, Stans also is relievedfor the time beingof pressure for a program. Yet, failure to nurture Candidate Nixons most innovative proposal cannot be laid at the door of Maurice Stans, an orthodox Republican financier ill-equipped for creative undertakings. Rather, it is symptomatic of a brutal fact: the utter lack of interest in the black ghetto by the occupant of the White House Oval Office
Roeser, a Republican partisan and ideologically a conservative, was an ardent Nixon supporter long before Miami Beach. At the same time, he had become deeply committed to improving life in the ghetto through civic work in Chicago. Thus, black capitalism was to him a golden opportunity to involve his party in the ghetto without departing from Republican principles.
Even if he had enjoyed full backing from Stans and the White House, Roeser would have been severely handicapped by OMBEs grotesque financing. Without any funds of its own, it depends wholly on the willingness of other agenciesthe Office of Economic Opportunity, the Housing and Urban Affairs department and the Health, Education and Welfare Departmentto transfer funds to OMBE programs.
Moreover, Roeser had no cheer-leading section in the White House. Dr. Daniel Patrick Moynihan who heads the Urban Affairs Council staff here, is a liberal Democrat with little enthusiasm for wedding the Negro and the business community.
That column didnt please Geimer, either but I gave his objection no particular attention. I found a place for him in the White House as an assistant to a top Nixon staffer, Stephen Hess (now a major historian on the presidency at Brookings) who was planning a White House Conference on Youth enabling Geimer to add to his credentials as a Washington operative. I was assured by David Koch that only Geimer was vulnerable to being fired as he was regarded as a confidante of mine. Othersincluding Johnny Johnson, Walter Sorg and Gary Badenwould be kept, said Koch. And indeed, they were.
One more event remained. At the end of November, I had a verbal arm-wrestle with the under-secretary, Rocco Siciliano, a lawyer. He wanted to fire me as assistant to the secretary because of the Evans & Novak column but feared to run the risk. He wanted me to bail out on my own. I decided to do it ultimately but before it happened, try to bait him to fire me. We were both employing the arts of Machievelli. He decided to resist but get me to quit on my own with all the Italianate inducements he could muster. The wrestling and verbal ju-jitsu were fun.
On the crucial day I met with him to give himand Stanscopies of the finished strategy document. After we discussed it point by point, Siciliano said, apropos of nothing: I am sure you are looking around for other things to which your talents would be put to better use.
Roeser: Oh, I dont know. I rather like it here. [Much tongue-in-cheek].
Siciliano [visibly upset at hearing this]: Have you have read the memoirs of Dean Acheson?
Roeser: Yes. A very literate man.
Siciliano: His first job in the federal service was under-secretary of the treasury as you know.
Siciliano: And he had a falling-out with the Roosevelt administration.
Siciliano: When he resigned of his own accord, Roosevelt said of him--`he knows how to leave public office like a gentleman. Did you not think that was flattering of Roosevelt to say it?
Roeser: Indeed. Roosevelt was a very sophisticated manas was Acheson. And as you remember, Acheson resigned only after making his views very well known. Acheson supported a conservative economic policy and opposed Roosevelts plan to change the price of gold. And after he made his point, Acheson resigned.
Siciliano: Acheson didnt make his point public.
Roeser: Walter Lippmann carried his views in great detail on gold and also on his opposition to deposit insurance for banks. How do you suppose reporters of the time knew why he was resigning? And why his viewpoint was contained in the news stories of his resignation?
Siciliano: Anyhow, that was good, dont you think? That he resigned?
Roeser: After he made his point, yes.
Siciliano: Do you think you made your point here?
Roeser: Evans & Novak made my point better than I.
Siciliano: `Better than I nothing!
Roeser: But for me but a bigger point would be made if the strategy document I wrote would be taken up by the secretary.
Siciliano: It cannot.
Roeser: or if I had your word and that of the secretarys that the document would be sent over to the president.
Siciliano: I will check to see if that can be done.
Roeser: My mission in the executive order 11456 is to submit a strategy to the president. I would be obliged if you would send it. But if it is too much trouble, never mind. I sent it over myself. Now, listen to me for a minute, Rocco.
. Youre damned lucky and the secretary if damned lucky that I have not gone as public as I could have on this thinghaving convinced me, the both of you, to quit a very good job under false pretenses for a job here that is now illusory. As it is, my point of view has been made known but nothing like it could have beenso for that youre lucky. This talk about Achesons resigning as a gentleman is irrelevant to this case. Acheson was dealing with two gentlemen, the secretary of the treasury Morganthau and the president and he determined not to serve because in conscience he couldnt administer policies he disagreed with. He had differences of opinion with them but at no time was he misled either before his being named or after on matters of policy. I was. Now that youre been so elaborately inquisitive about my plans, I will tell you that I am going to leave by the end of this week.
My first inclination after having been misled was to tell you to take this job and stuff itwhich is a Chicago way of describing wanton dishonesty. Instead, I will not just leave but will support Mr. Nixons reelection. My real hard feelings come less from the caving in to the southern strategy after having made a promise to invigorate minority enterprise but from what will happen to some of the people I leave behindbecause this program, as you well understand, is going nowhere as it is presently construed and Abe Venablea very good manwill be as frustrated as I was with it and with you. On that note, lets conclude this. See you around.
On the Friday of that week, I left the office as an ex-Commerce official with one interim stop. For a long period of revelry with the staff at a bar on Pennsylvania avenue with the valedictory delivered by the faceless professional, David Koch. The farewell drinks were picked up by a young black man who had an arrangement with the tavern owner who had started a community organization called PRIDE by the name, believe it or not, of Marion Barry later to become councilman and mayor of Washington, D. C. before becoming involved in some unsavory things. The anomaly of his being my patron still causes me to smile. The last round of drinks was to say farewell to Geimer who on Monday was to become an assistant to Stephen Hess at the White House, which meant a sizable jump in pay and prestige. More than I was to receive in my new diminished status as a foreign service officer. Why he was never able to get over his misgivings I do not know.
The next Monday I was sworn in as Director-Public Affairs of the Peace Corps, reporting to the Director who had the corresponding rank of assistant secretary of state.