Friday, May 18, 2007

Flashback: The Second Stans Breakfast and “Voluntary Giving.”

[Memoirs from fifty years in politics for my kids and grandchildren].

To make any sense out of this fragment of the memoirs, you have had to read the preceding…that Maurice Stans, the recently-resigned commerce secretary now Nixon finance chief…decided in late 1971 that he would show us neophytes how he would raise money for Nixon, and so he dictated that precisely one week from our present meeting (at the same hour, same place) we would have the kingpin of the Illinois Democratic party to breakfast, Joseph Block, retired CEO of Inland Steel. Inland was founded by grandfather Block in 1894. The Block cousins, Joe and Philip, had made it an outstanding company, the fourth-largest steel producer (by 1972) in the U. S. and the first to adopt a pension plan for its employees. When Joe Block retired in 1967 he was regarded as a maverick in the steel business, agreeing with President John Kennedy in 1962 that it was not opportune for the steel industry to raise its prices. He was succeeded by his cousin Philip.

To my surprise, as I relayed the invitation by phone, Joe Block said he’d attend. So precisely…all watches synchronized…we gathered at the very same smallish breakfast nook in the Merchants & Manufacturers Club of the Merchandise Mart. Block arrived fashionably late, about five minutes or so behind us.

It’s important to remember where we were in the presidential wars of 1972. When we met, the projected inevitable nominee by media and polling standards was reputed to be Sen. Edmund Muskie (D-Maine) who later self-detonated in the New Hampshire primary of 1972…but when we met Muskie was as sure of the nomination as, perhaps, Hillary Clinton is now.

With a barely recognizable greeting (“Hello, how are you?”) Stans, assuming the leadership of the breakfast for which we were paying, signaled all to sit down. We pre-ordered the breakfast and after it was served, Stans looked across the table like a dignified Boston Brahmin in the play “The Late George Appley” and said this, speaking directly to Block:

“Joe, before I left Commerce for this job, I checked with Bill Ruckleshaus.”

The words struck Block as if a pile of sewerage had been dumped on our clean tablecloth. Ruckelshaus was the head of the Environmental Protection Agency, the first head. A politically ambitious Indianan, he took the agency created by Nixon and made it a seriously-regarded watchdog and enforcer against pollution.

“…And,” Stans continued, “I happened to take with me when I left

Commerce this report, not for public attribution, that EPA is preparing. I brought it along and thought you might like to skim it as we eat.”

Block took it, read it as he munched. There was an uncomfortable silence among us, as we decided each of us inwardly whether we should remain silent at this embarrassing time or whether we should converse in whispers among ourselves as Block read. We decided to do the former; say nothing. The air was deadly quiet, punctured only by the slight noises our spoons and forks made.

I stole a look at Block and fancied I saw a hemorrhoidal air of slight concern as he thumbed though the document.

Stans said, “I’ve got to have that report back after you read it, Joe.”

Block handed it over and silently considered his grapefruit.

“What the report says in summary for the benefit of the rest of you,” said Stans, “is enough to threaten the economy of the Midwest significantly. It has to do with the heavily industrial area that includes the U. S. Steel plant as well as oil refinery and numerous other industries on which Inland, that fine company that Joe and his brothers run, is located. And it says that ninety percent of the water that passes by as industrial outflow or stormwater overflow is contaminated by polychlorinated biphenyls or PCBs. In addition it is filled with polycylclic aromatic hydrocarbons or PAHs and heavy metals.”

Removing his spectacles with a flourish, he said: “The paper from EPA estimates that sediments containing 77,000 pounds of chromium, 100,000 pounds of lead and 420 pounds of PCBs are pouring into Lake Michigan each year through the Indiana Harbor and Ship Canal, the artificial waterway in East Chicago, Indiana connecting the Grand Calumet River to Lake Michigan, the 45th busiest harbor in the United States.” He added: “Not mentioned in this preliminary report is that Bill Ruckelshaus who ran once for governor of Indiana may try to run again and—though it pains me to say this—and may seek to become the anti-pollution archangel of Indiana.”


“Now, Joe. You don’t have to worry about this because while I’m a private citizen, I still retain some influence with the Nixon administration…”

Block’s glum face eased up somewhat.

“…but you can imagine what would happen if Clean Water Muskie were to become president. Joe, we have to keep this country safe for private industry like Inland. And I know Dick Nixon is just as determined as you and I to do that. Realistically, to preserve free enterprise in this country means that we must get involved in protecting the system through our democratic processes. That’s why I left Commerce and am doing this without pay—to serve this country.

“Joe, we don’t want to keep you. You have a busy day ahead even though you are retired—a busy day with all your many civic responsibilities. I just want you to know that when you get back to your office, a lawyer from our Committee to Reelect the President will be sitting in your anteroom to help you and your cousin Phil and your other cousin Leigh—help you decide the proper way to make your contributions. I am quite candid in saying that we will hope that you and your cousins can give a total of $250,000—and there are relatively easy ways to do this which our lawyer will show you, dividing it up so to speak between you and your cousins. Joe, we’ve kept you long enough and I personally know the president of the United States will be very appreciative of your support.”

Having been dismissed, Block shook hands and left like a man who first had been greatly depressed, then relieved and now somewhat sobered at considering the bill to be paid.

After the door closed behind him, Stans said: “Gentlemen, I have just shown you the reality of what fund-raising in this campaign will have to become in order to match the opposition. Now you have a quota of $10 million. I have every expectation that the Blocks will participate and their contribution, roughly $250,000 which is what I’m counting on, will contribute to your quota. There are other similar names on this list I am distributing to you today. In every case, I want to be consulted by you as you go down the list because I have relevant regulatory or governmental data. McDonald’s for instance is worried about a sharp hike in the minimum wage. Well, we’re concerned about that and all you have to do is to consider what Mr. Muskie or any of the other possible Democratic candidates for the nomination will do and sell accordingly.

“But let me make this clear. I don’t want anybody setting up a $1,000 a person club with this list or any list. The thousand dollar club is for small donors. There is no limit in federal law on the size of a contribution as you know although all contributions will be recorded. Now, if you have any questions about how we are to proceed, ask away.”

Well, there were very few questions but my boss decided that he would have nothing to do with the Maurice H. Stans extortion game. At Stans’ direction, we referred certain big names on his list to him for his unique salesmanship. Concurrently we did begin a $1,000 club composed of people who wanted to participate in the Nixon reelection. Later, as result of the Watergate investigation, Stans was indicted on charges of conspiracy, obstruction of justice and perjury. He was accused of trying to influence the Securities and Exchange Commission to favor a $200,000 donor, Robert Vesco. Both Stans and his co-defendant, former attorney general John Mitchell was acquitted of serious charges although Stans pleaded guilty to minor infractions.

One of the “minor infractions” involved was for unknowingly accepting illegal corporate contributions although prosecutors took the position that he acted in “reckless disregard” of the law in assuming such corporate money, received from 3M and Goodyear, had come from an illegal source i.e. the corporation itself. American Airlines’ president, George Spater, contributed $20,000 from proper sources and $55,000 from improper i.e. the corporation. Ashland Oil contributed corporate funds but its lawyer said that the transaction was so complex “six certified public accountants working six months wouldn’t have been unable to uncover it.”

Stans made an excellent point that as he was on the receiving end of the contributions there was no way he could possibly vouch for inside practices that were undertaken to utilize corporate funds as contributions. He is right—but there is no doubt that the pressure he put on business types made it inevitable that some of the weaker-willed ones would be tempted to dip into improper funding to reach the required amount. In any event, Stans goes down in history as the most effective fund-raiser of his time, having raised nearly $60 million for the reelection campaign.

It is disheartening even to me that someone of Stans’ superhuman loyalty to Richard Nixon was treated harshly in the secret White House tapes. The ex-commerce secretary was engulfed in the campaign finance probe after the 1972 election and never was appointed treasury secretary. George Shultz continued to serve, followed by William E. Simon.

The lesson I came away with both while in Commerce and in the Nixon fund-raising concerning Stans was this: Never did one man struggle so slavishly to find approbation from a president and never got it, not fully realizing that the president in question was of low character and inferior in integrity. Notwithstanding this, while both were in private life, Stans ploddingly sought to slavishly impress his old chief, raising $27 million for the Nixon Library in Yorba Linda, California. Stans died in 1998 at the age of ninety. There is no rational explanation for the kind of master-slave relationship between the arrogant Richard Nixon and Stans who allowed himself to be degraded by serving this unworthy master.

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