WASHINGTON COVER-UP

WASHINGTON
COVER-UP

Clark R. Mollenhoff

DOUBLEDAY & COMPANY, INC., GARDEN CITY, NEW YORK
1962

LIBRARY OF CONGRESS CATALOG CARD NUMBER 62-13288
COPYRIGHT © 1962 BY CLARK R. MOLLENHOFF
ALL RIGHTS RESERVED
PRINTED IN THE UNITED STATES OF AMERICA

CONTENTS

WASHINGTON COVER-UP

CHAPTER I
Secrecy Solves No Problems

No single factor is more important to the strength of our democracy than the free flow of accurate information about the government’s operations. The citizen in a democracy must know what his government is doing, or he will lack the soundest basis for judging the candidates and the platforms of our political parties.

Our elected officials are given only a temporary grant of power, and only a temporary custody of government property and government records. Neither the President nor those he appoints have any royal prerogative; they have only a limited right to steer our government within the framework of the Constitution and the laws.

It is well to remember that every withholding of government business from the public is an encroachment upon the democratic principle that government officials are accountable to the people. It follows that citizens should regard all governmental secrecy with some suspicion as an encroachment on their right to know.

The American citizen should reject all arbitrary claims to secrecy by the bureaucracy as sharply as he would reject any claims to a right of the executive branch to by-pass Congress in levying taxes. A wise citizen should be as outraged at arbitrary secrecy as he would be at arbitrary imprisonment. Logically he should insist on the same safeguards against arbitrary secrecy that he would against unjustified arrest or taxation. The public’s “right to know” is that basic.

Unfortunately, there is a general tendency to regard government secrecy as only a problem for the newspapers. And even within the newspaper profession there is a tendency to ignore government secrecy until it interferes with a story the individual reporter or editor wants to develop.

I am not interested in pleading for any special right of access to government information for newspapers or reporters. As vital as their function is, newspapers, magazines, television and radio for the most part merely provide an orderly process for disseminating information about government to the people who do not have the time, money, or technical facility to acquire the information for themselves. Transmitting information gathered at a government press conference or through a government press release does not necessarily answer the people’s right to know.

The public has a right to expect that its government’s press releases will be factually accurate, and for the most part they are. We also have a right to expect our highest officials to be factually accurate, but we must recognize realistically that it is only normal for them to color facts with opinions and conclusions that are most favorable to the political party in power.

This manipulation, shading, twisting, or omission of facts—often referred to as “managing the news”—will be limited only by the political fear of being exposed for having made erroneous or intentionally misleading statements to the public. As reprehensible as the practice can be, it is nevertheless a political fact of life and those who lament its existence would do better to bolster the one sure safeguard against it: the people’s right to know—through the press and through their elected representatives in Congress. News management, I repeat, can be controlled only by insisting on the public’s right to go behind the statements distributed by the government agencies or by high government officials.

Those who manipulate the news or try to cover their tracks with arbitrary secrecy are not likely to be pursuing totalitarian goals. Usually the only motivation is short-term political gain. Often it is rationalized on grounds that a few factual errors and overdrawn conclusions are not important when viewed in the total context of the achievements of the party in power. There is also the standard rationalization that a few distortions only serve to balance the distortions of the other political party.

No administration enjoys admitting errors or mismanagement of government. Because the criticism is usually initiated by the political opposition, it is often harsh and overdrawn. An instinctive defensiveness springs up within the defending political party, and the battle rages.

In the classic political controversy, the initial criticism has been followed by a demand for a full investigation. The press has already done some investigative work and has printed stories dealing with all available aspects of the controversy. However, when the probing by the press or by private citizens has not been conclusive, the Congress, throughout the history of the United States, has launched investigations to dig out the facts not otherwise available to the press or the public. And almost as often as the Congress has dug in, the executive branch has refused or been reluctant to co-operate.

A truly thorough investigation of the executive branch can be conducted only in the Congress. It is unreasonable to believe that an Attorney General, appointed by the President, will aggressively delve into an investigation of matters that might embarrass his own administration. For this reason, the right of the public and the press to government information is for the most part contingent upon the power of Congress to obtain documents and testimony from the executive branch.

If the committees of Congress, acting within the scope of their authority, cannot obtain access to all the facts on government activity, then the facts can be arbitrarily hidden for the duration of the administration’s power. Who would argue that any administration should be allowed to bury its crimes, its mismanagement, and its errors until a public, barred from full facts on these matters, decides to vote that party from power? Such a philosophy would put a premium on the Washington cover-up.

Properly authorized committees must have the power to compel government officials to testify and produce government records. If this power is lacking, the Congress, the press, and the public are dependent upon the information or half-information that the executive branch chooses to release. It should be obvious to even a novice in politics that politicians are not likely to voluntarily produce testimony or records that may harm their own aspirations.

Most congressional requests for information have been filled without trouble. The executive branch has resisted, however, whenever it seemed likely that congressional hearings would expose some political favorite or embarrass the administration. Invariably it has been claimed that the Congress was invading the executive branch and that some constitutional issue was involved.

In this book I will show how the executive branch, beginning with George Washington’s administration, has handled requests from Congress for delivery of information. And I will show how the tendency to withhold information has grown, particularly since World War II.

It is not my intention to argue that all government information should be made public immediately, for I am fully aware of the need for security on military matters as well as the need for some restrictions on release of information from personnel files and investigative files.

In practice, we must allow our elected officials the right to withhold some kinds of information from the public. War plans and other papers involving military security are the more obvious examples. But any withholding should be done under specific grants of authority from Congress or under specific grants in the Constitution, and the authority should be carefully limited. The broad right of arbitrary withholding of information is not something that any officials should be permitted to arrogate to themselves.

There is ample justification for laws that set out areas of military information to be withheld from the general public. There always has been. It would be especially foolhardy in these days of serious international tension to insist on a full public disclosure of our military posture. However, this does not mean that all persons outside the military establishment should be barred from access to military information. There should be no question about proper committees of Congress having access to nearly all information on military spending, for this is the only way the Congress can obtain sufficient information for passing laws and appropriating money. Also, the auditors of the General Accounting Office (GAO) must have access to all but the most highly classified Defense secrets, or they will be unable to carry out their duties of determining whether expenditures are being made in an efficient and lawful manner.

There might also be justification for withholding information from the public when it involves diplomatic negotiations with a foreign nation. However, barring the public should not bar the GAO or properly authorized committees of Congress except under the most unusual and most clearly delineated circumstances.

There are other areas of government in which secrecy is justified. These include the raw investigative files of the Federal Bureau of Investigation (FBI), and some parts of the government personnel files. There are clear reasons for barring the public from the FBI investigative files, for these files contain much unevaluated rumor and many unauthenticated documents. Also, as FBI Director J. Edgar Hoover has pointed out, much mischief could be done by the underworld and subversive elements if they had access to FBI files.

But while we are using a limited secrecy to guard our chief federal investigative agency, we must realize that law enforcement agencies can go wrong if there is not some regular scrutiny from the outside. This was demonstrated in the twenties, just prior to the time when J. Edgar Hoover was put in charge of cleaning up the federal investigative agency. We have been fortunate to have a J. Edgar Hoover heading the FBI, but we cannot assume that the office will always be filled by one whose major ambition is creating and maintaining a skilled career investigative agency.

Under unusual circumstances, arrangements have been made for examination of an entire FBI file by the chairmen of the Judiciary committees of the House and Senate. On occasion, the ranking minority member of these committees has taken part. Since this procedure provides for examination by a Democrat and a Republican, it has the strength of being bipartisan. It has the disadvantage of depending on the character and personality of the majority and minority representatives for true bipartisanship. The procedure is a touchy one that the press, the public, and the Congress must scrutinize periodically. Certainly the FBI must have a right to keep its files secret from the public, but it should never be forgotten that some limited bipartisan congressional group must have authority to examine these files if we are to remain secure from possible abuse of power.

President Truman wrapped government personnel files in secrecy on the theory that making them available to a Republican-dominated committee of Congress could result in the use of rumor and hearsay to “smear” government officials. Certainly it is laudable to try to protect government employees from baseless charges. But this “protection” for the government employees has its drawbacks. Such secrecy has been used to prevent government employees from gaining access to their own medical records which were material to a defense in an ouster action. It also shields government personnel administrators from criticism and thereby encourages arbitrary actions.

I learned once of a case in which the secrecy surrounding personnel files made it impossible for a woman to find out why she had been discharged by the government. I will refer to the woman as Mrs. A, for there is no necessity of stirring up more problems for her now if she has been able to find a job after being out of work for several years.

Mrs. A was a woman of about fifty with more than twenty years of service with the Civil Service Commission as a shorthand reporter. She had had some problems with an employee in the same section and some disagreement with a supervisor. She was asked to go to the Department of Health, Education and Welfare for a physical examination.

Mrs. A took the physical examination and shortly afterwards was forced to resign. She was given no reason except that something in the physical examination made her unqualified to continue as a government employee. Mrs. A went to a private physician and had a thorough examination to try to find out why she was unqualified to hold her job with the government. The doctor could find no reason for her discharge.

At this point Mrs. A hired a lawyer. Neither the doctor nor the lawyer could obtain access to the records of the physical examination given to Mrs. A at the Department of Health, Education and Welfare. The lawyer hired by Mrs. A found himself tilting with a ghost. He could not find out why his client was discharged, and yet he was faced with trying to establish proof that whatever was alleged was not true.

I could not believe the story Mrs. A told when she first came to my office, but I said I would examine it and see what I could do. It checked out in every detail. I was informed at the Health, Education and Welfare Department that the physical records of all government employees were confidential. There were no exceptions. I pointed out that this confidential status was set up for the purpose of protecting the government employees against public intrusion, but that it certainly couldn’t be meant to keep a government employee or her private doctor from examining her records. Officials at the Department of Health, Education and Welfare disagreed. I made repeated calls to see if I could get the policy changed, but to no avail.

Mrs. A was a little more distressed each time she came by the office, for I was unable to interest anyone in her case. She was not important. She was not the center of a big political drama.

Was it a wrongful discharge? I could not answer the question when it was raised by lawyers for committees of Congress. It was possible the file would have shown justifiable grounds for the discharge. I could only argue that it was wrong to bar this woman, her lawyer, and her doctor from examination of a file giving the results of her government health examination.

Despite the inequity in this case and others similar to it, a general belief prevailed in Washington that secrecy on government personnel files and loyalty-security files was an unmixed blessing. The fallacy of this contention was impressed on me every time I saw Mrs. A. She was defeated in appearance, and she was deeply hurt.

There is a sharp cruelty in secrecy that results in such injury to an individual, and there is great damage to our government—and to people’s faith in it—when secrecy is used to cover up mismanagement and corruption. I am gravely concerned over any obstructions put in the way of congressional committees’ investigating the abuses of secrecy. Where would we be if Congress had not looked into such nefarious schemes as the Teapot Dome scandals of the Harding administration or the tax “fixes” in the Truman administration?

Have we, a self-governing people, learned anything from these black marks on our history? I am afraid that we have not learned enough yet. I am afraid that the people as a whole, and many persons in the press and Congress, tend to disregard the danger signs and accept the self-serving declarations of virtue from their Presidents or other high officials. A few newspapers, a few diligent investigators for congressional committees, a few senators and a few congressmen have had to take the whole responsibility for breaking through unjustified secrecy and uncovering the truth.

In my twenty years as a newspaper correspondent I have been concerned with this problem of information policies at every level of government—starting in a local police station, city hall, county courthouse, and state capitol. For the past eleven years I have been covering the federal government for the Washington Bureau of Cowles Publications. I have been fortunate to have the freedom to follow any investigations that interested me, as well as the enthusiastic support of several newspapers. My position has afforded me the privilege of a day-to-day acquaintanceship with every major investigation in Washington since 1950.

The problem of the Washington cover-up became a major interest to me in connection with the scandals in the Reconstruction Finance Corporation (RFC) and the Internal Revenue Service beginning in 1950. The investigations of the RFC were of a reasonably short duration. The pattern of “political favoritism” in administering this government loaning agency was ended when W. Stuart Symington, later a United States Senator, was named by President Truman to restore order. Symington instituted the “fishbowl policy” that brought most of the RFC operations out in the open.

The problems with secrecy in the Internal Revenue Service remained a major news story for more than two years. The Internal Revenue law provides that it is unlawful to disclose the information on the tax returns submitted by U.S. taxpayers. It was a secrecy established in a specific statute, and the purpose was to protect the privacy of the finances of individual taxpayers. However, investigations by Senator John J. Williams, the Delaware Republican, and a House subcommittee, headed by Representative Cecil King, the California Democrat, showed that the secrecy was used to shield crooked tax agents and tax collectors from exposure and prosecution.

The Alcohol Tax Unit (ATU), a division of the Internal Revenue Service, had even set up procedures to provide for secret settlements of criminal law violations. Also, ATU provided secret hearings on applications for a federal license to wholesale liquor or beer. A racketeer found it possible to go into a secret hearing, give perjured testimony, and obtain a license with the help of weak or corrupt ATU administrators.

The lesson was clear in each case: secrecy corrupts. It allowed government officials to dispense favors behind closed doors. When decisions were secret, there was no need to provide any consistency in decisions or in penalties. It was impossible for the public or the press to obtain enough information to register an informed objection.

During fights to open records in the Internal Revenue Service, I became acquainted with James S. Pope, executive editor of the Louisville Courier-Journal who was then chairman of the Freedom of Information Committee of the American Society of Newspaper Editors. We worked together in forcing the Internal Revenue Service to open certain “compromise settlements” of tax cases as well as the ATU hearings.

In exploring these and other information problems, I worked closely with the late Harold Cross, former special counsel for the American Society of Newspaper Editors; J. Russell Wiggins, executive editor of the Washington Post and Times Herald; Herbert Brucker, editor of the Hartford Courant; and V. M. (Red) Newton, managing editor of the Tampa Tribune.

We shared a deep suspicion of government secrecy and also resented what it did in corrupting our system of government. I was privileged to serve as a member of the national Freedom of Information Committee of Sigma Delta Chi (the journalism fraternity) and handle the Washington phase of the reports for Red Newton for a period of more than five years. For a longer period I have worked with the American Society of Newspaper Editors’ Freedom of Information Committee. I have testified before committees of the House and Senate.

My testimony before the Moss subcommittee in November 1955 was the first testimony on the scope of the problem of “executive privilege” advanced by the Eisenhower administration. I have kept in touch continuously with Representative John Moss, the California Democrat, and the members of his staff from the time their subcommittee was established. I am particularly indebted to Staff Administrator Sam Archibald, Staff Consultant Paul Southwick, and staff lawyers John Mitchell and the late Jacob Scher.

Others who were particularly helpful and co-operative over these years were the late Senator Thomas Hennings (Dem., Mo.); Charles Slayman, counsel for the Hennings Judiciary Subcommittee; Senator John McClellan (Dem., Ark.), and Robert F. Kennedy, who was his chief counsel; Herbert Maletz, chief counsel for a House Judiciary Subcommittee; Representative Porter Hardy (Dem., Va.); John Reddan, chief counsel for the Hardy Government Operations Subcommittee; Representative F. Edward Hebert (Dem., La.); James Naughton, chief counsel for the Fountain Government Operations Subcommittee; and John Courtney, chief counsel for the Hebert Armed Services Subcommittee; Arthur John Keefe, counsel for the Senate Antitrust and Monopoly Subcommittee; and Representative George Meader (Rep., Mich.).

The knowledge of the secrecy problem gained by most of these lawmakers and lawyers has been understandably confined to their experiences with one or two committees, whereas I have had the opportunity to become aware of the day-to-day activities of nearly all the committees. For that reason, and because of my alarm at the public apathy over government secrecy, I have decided to set the whole story down in one place. Most of the story is taken from the official records of congressional committees—the sworn testimony, the correspondence with government agencies, and the official reports of Senate and House investigators. As much as possible, I have put it together in chronological, narrative form so that the reader may discover, as I did, how the abuse of government secrecy has spread and just how vast and serious the scope of it has become. At the end of the book I will make some recommendations that I hope may serve as a guide to eliminating this serious threat to our democratic form of government.

CHAPTER II
The First Century

An Indian uprising along the Indiana-Ohio border in 1791 set the stage for the first investigation by Congress of decisions in the executive branch. President Washington, then in his first term, sent Major General Arthur St. Clair into the wilderness to put a stop to the raids.

General St. Clair and his fourteen hundred American soldiers were camped along the headwaters of the Wabash River on November 3 when they were surprised by the attack of a strong force led by Little Turtle, chief of the Miami.

The Indians killed more than six hundred officers and men and forced the others to retreat. It was a humiliating defeat, one that still ranks among the worst in our history. Congress demanded an explanation.

On March 27, 1792, the House of Representatives appointed a select committee to inquire into the failure of the St. Clair expedition, and “to call for such persons, papers, and records, as may be necessary to assist their inquiries.” For the first time, the President and his Cabinet were presented with the problem of whether to make papers and testimony available to Congress.

President Washington called a meeting of his full Cabinet to determine the proper way to proceed, for he was aware that the action taken would set a precedent on such matters.

Thomas Jefferson wrote the following account of the meeting and the conclusions drawn by the Washington Cabinet:

“First, that the House was an inquest, and therefore might institute inquiries. Second, that it might call for papers generally. Third, that the Executive ought to communicate such papers as the public good would permit, and ought to refuse those, the disclosure of which would injure the public; consequently were to exercise a discretion. Fourth, that neither the committee nor House had a right to call on the head of a department, who and whose papers were under the President alone; but that the committee should instruct their chairman to move the House to address the President.”

Jefferson also wrote:

“Hamilton agreed with us in all these points except as to the power of the House to call on the heads of departments. He observed that as to his department, the act constituting it had made it subject to Congress in some points, but he thought himself not so far subject as to be obliged to produce all the papers they might call for. They might demand secrets of a very mischievous nature. (Here I thought he began to fear they would go on to examining how far their own members and other persons in the government had been dabbling in stocks, banks, etc., and that he probably would choose in this case to deny their power; and in short, he endeavored to place himself subject to the House, when the Executive should propose what he did not like, and subject to the Executive when the House should propose anything disagreeable.)... Finally agreed, to speak separately to the members of the committee, and bring them by persuasion into the right channel. It was agreed in this case, that there was not a paper which might not be properly produced; that if they should desire it, a clerk should attend with the originals to be verified by themselves.”

Although the Cabinet indicated a need for a discretion to withhold papers “which would injure the public,” President Washington agreed that in the case of the St. Clair expedition “there was not a paper which might not be produced.”

There was no withholding by President Washington in this case, and it could hardly be regarded seriously as a precedent for any right to arbitrarily refuse executive papers to Congress.

There was one other instance in Washington’s administration in which the Congress asked for executive papers. In this case, the House of Representatives asked for the papers and instructions to United States ambassadors who negotiated the Jay treaty. This time Washington refused to deliver the papers to the House on the specific constitutional grounds that the Senate, not the House, is authorized to advise and consent on treaty matters.

A Supreme Court case in the administration of President Thomas Jefferson raised the question of whether it was possible for the courts to force the Cabinet to perform certain acts required by law. In the last hours of the administration of President John Adams a “midnight appointment” was made of a justice of the peace for the District of Columbia named William Marbury, a minor Federalist political figure. James Madison, who became the new Secretary of State in the Jefferson administration, refused to deliver the commission to Marbury to complete the appointment process.

Marbury asked the Supreme Court to issue a writ of mandamus under the Judiciary Act of 1789 to force Madison to deliver the commission. In February 1803, Chief Justice John Marshall delivered the opinion of the court. First he dealt with the question of whether Madison had a right to refuse to deliver the commission to a properly appointed official. The decision was a rebuke to Secretary of State Madison and stated: “Is it to be contended that the heads of departments are not amenable to the laws of their country?”

However, the opinion went on to conclude that the Constitution provided no method for the Supreme Court to issue writs to force the executive action requested. Chief Justice Marshall stated that the Judiciary Act providing for a writ was inconsistent with the Constitution, and that “a law repugnant to the Constitution is void.”

Although Madison was wrong in withholding the commission from Marbury, the court held that under the Constitution there was no way to force action. The case did not mean that Madison had a legal right, but only that Marbury had no remedy. The Marbury appointment was in essence a political matter and could only have been countered indirectly by the impeachment of the President.

The specific question of congressional access to executive papers was raised in one case in the Jefferson administration. In 1807, President Jefferson was requested to furnish the House “any information in the possession of the Executive” on the allegation of a conspiracy by Aaron Burr. However, the request specifically exempted papers “such as he [Jefferson] may deem the public welfare to require not to be disclosed.”

President Jefferson displayed an awareness of the dangers of arbitrary withholding of information by carefully explaining the nature of the papers he did not deliver. He stated that these papers included matters “chiefly in the form of letters, often containing such a mixture of rumors, conjectures, and suspicions as to render it difficult to sift out the real facts and unadvisable to hazard more than general outlines, strengthened by concurrent information or the particular credibility of the relator.”

Later, when Aaron Burr was actually tried for treason in Richmond, Chief Justice Marshall issued a subpoena for papers in Jefferson’s custody, including a private letter from General James Wilkinson to Jefferson. While Jefferson continued to assert a right to determine which papers he would produce, he did in fact send all the documents requested in the subpoena. Also, General Wilkinson appeared at the trial and testified fully about his communications with President Jefferson. Chief Justice Marshall’s decision conceded that the President could not be summoned to make a personal appearance before a judicial body because of the nature of his position and the dignity of his office. Since Jefferson produced all the documents under subpoena there was no need for adjudicating the issue of what types of papers might be withheld. [The trial eventually resulted in a jury acquittal for Burr.]

Until President Jackson’s term there were no significant controversies over requests for information. Jackson was involved in a number of disputes. Although he consistently asserted a right to withhold information from Congress, he usually sent the requested documents along with his angry criticism of Congress for making the requests.

A Senate investigation of land frauds in the Jackson administration resulted in demands for papers dealing with land transactions conducted by a Jackson appointee. President Jackson refused to deliver the papers to Congress, but the resulting cover-up of land frauds could hardly be called a precedent worthy to be followed.

President John Tyler was requested to submit to the House of Representatives the reports of Lieutenant Colonel Ethan Allen Hitchcock concerning an investigation of frauds which were alleged to have been perpetrated on the Cherokee Indians. President Tyler produced a part of the information at the time of the request but declined to produce the full investigative reports in 1843. He argued that to be effective such investigations must often be confidential.

“They may result in the collection of truth or falsehood; or they may be incomplete, and may require further prosecution,” Tyler said. “To maintain that the President can exercise no discretion ... would deprive him at once of the means of performing one of the most salutary duties of his office ... and would render him dependent upon ... [another] branch [of government] in the performance of a duty purely executive.”

However, in a later message to Congress on the Cherokee Indians matter, President Tyler directed that all of the reports be made available. He did not acknowledge the right of Congress to command the Executive to produce all information. Neither did he claim an unlimited right for the President to withhold. He declared that there must be some discretion left with the President when “the interests of the country or of individuals” is to be affected by production of the records. He enumerated some circumstances in which he felt the President actually had a duty to withhold—as, for example, during a pending law enforcement investigation.

After the Civil War there was a flurry of investigations, but these caused little conflict. The corrupters in the Grant administration were foresighted enough to bring key members of the Republican Congress into their dishonest schemes as an insurance against exposure by the committees of Congress.

A Democratic Congress, elected in 1874, initiated a series of investigations into the War and Treasury Departments to eradicate the corruption and to set the stage for the next presidential campaign in 1876. The frauds were so raw that the feeble efforts to hide them were useless. The inquiries disclosed how the government was defrauded by a “Whisky Ring” that evaded millions of dollars in taxes on distilled whisky. The “ring” operated with co-operation from some Treasury officials as well as from President Grant’s private secretary, General Orville E. Babcock.

Another congressional investigation of the Grant administration implicated Secretary of War W. W. Belknap in widespread graft in the assignment of trading posts in the Indian territory. He resigned from office in the face of a threat of impeachment, carrying with him a presidential letter expressing “regret” that he was leaving government. President Grant’s letter of “regret” to a man who had betrayed a trust set a pattern for Presidents for a long time to come. The whole ritual, indeed, has remained the same. First come the accusations, followed by denials of any improprieties. Then comes the effort to hide the records. This is followed by the tardy admission of facts but a denial of illegality, and finally the letter from the President lauding the dishonest public official for his fine service coupled with “regretful” acceptance of his resignation.

The corruption of the Grant administration is considered by many to be the worst blot on the nation’s escutcheon. Republican political figures organized a construction firm, the Crédit Mobilier of America, which was used to divert lavish profits from the building of the Union Pacific Railway. An American diplomatic figure lent his name to a huge mine swindle, Navy contracts were for sale, and there were wholesale frauds in the custom houses.

The widespread scandals of the Grant administration presented no basic problem for Congress in obtaining government records because the key evidence in these cases could be obtained from sources outside the executive branch.

However, a problem did develop in 1876 when the Democratic House sought to obtain testimony and records of financial transactions of Jay Cooke & Company. Jay Cooke & Company was one of the largest financial institutions of the time, and Jay Cooke was close to the Grant administration and Republican party politics. When the House of Representatives discovered that the Secretary of the Treasury had deposited large sums of money with a London branch of Jay Cooke & Company, it sought to determine whether there was some impropriety involved in the decision to make the deposit.

In the course of its investigation, the House issued a subpoena for Hallet Kilbourn, who managed some real estate operations for Jay Cooke & Company. Kilbourn refused to produce the documents sought and argued that the House had no right to investigate private affairs. The House ordered him arrested for contempt.

Kilbourn was imprisoned by House Sergeant at Arms John Thompson. Kilbourn immediately obtained a court order for his release and then sued Thompson for false imprisonment. The U. S. Supreme Court held that Thompson was liable for damages, and in the decision threw a doubt over the right of Congress to punish witnesses for refusing to answer questions or produce records.

The decision upset the long-standing view that the power of Congress to investigate was as broad as the almost limitless power of inquiry of the British Parliament. The U. S. Supreme Court stated:

“We are sure no person can be punished for contumacy as a witness of either House, unless his testimony is required in a matter into which that House has jurisdiction to inquire, and we feel equally sure that neither of these bodies possess the general power of making inquiry into private affairs of the citizen.”

It was not until 1927, when the U. S. Supreme Court decided the case of McGrain v. Daugherty, that the right of Congress to compel testimony was firmly reaffirmed. In the intervening thirty-five years two Presidents successfully resisted the Congress!

President Grover Cleveland, a Democrat, faced a Republican Senate, and Theodore Roosevelt, an independent-minded Republican, took delight in testing his strength even against a Republican Congress.

President Cleveland in 1886 backed his Attorney General in refusing to deliver to the Senate some reports dealing with the administration of the United States District Attorney’s office in the District of Columbia. The man who had held the office had been suspended, and Cleveland argued that the report on the reasons was the business of the executive branch. Because the Kilbourn case had weakened the position of Congress, Cleveland was not challenged.

President Theodore Roosevelt refused to allow his Attorney General to deliver papers to the Senate dealing with the status of investigations involving the U.S. Steel Corporation. The papers included an Attorney General’s opinion on the U.S. Steel Corporation case.

Although the papers sought involved a pending case, the Senate insisted on pursuing the matter. Herbert K. Smith, head of the Bureau of Corporations, was summoned and was threatened with contempt and imprisonment if he failed to produce the documents. President Roosevelt asked Smith for the papers and, after taking them into his possession, informed the Senate the only way they could get the papers would be by impeaching him. The Senate then dropped the matter.

The infamous scandals of the Harding administration renewed the will of the Congress, and proved for all time the need for Congress to investigate even when a President assures the public that “all is well.”

CHAPTER III
Teapot Dome to the Tax Scandals

Before Congress completed its investigations of the Harding administration scandals, cabinet officers had been found to be involved in the maladministration or corruption. Secretary of Navy Edwin Denby resigned from office under a barrage of criticism. Attorney General Harry M. Daugherty, involved in several questionable financial transactions, was indicted on a charge of having accepted a $200,000 payoff in connection with handling of Alien Property Custodian affairs. Daugherty was acquitted of the criminal charge, but reports of Congress established him as corrupt and incompetent in the handling of his office. Secretary of Interior Albert Fall was convicted of accepting a bribe and sent to prison.

It was in May 1921, within a year of President Harding’s election, that Secretary of Interior Fall persuaded the President and Navy Secretary Denby to transfer certain naval oil reserves from the Navy to the Interior Department. Once he got them within his domain, Fall then transferred the oil reserves—at Teapot Dome, Wyoming, and Elk Hills, California—to two private oil producers, Harry Sinclair and E. L. Doheny. The leases were signed secretly, without competitive bidding, and Secretary of Interior Fall conveniently tossed them into a drawer away from public view. He then proceeded to collect $100,000 from Doheny for the Elk Hills transfer, and $300,000 from Sinclair for the Teapot Dome transfer.

Months later when the Democrats learned of the oil leases they demanded explanations and alleged, without substantiation, that the leases might involve some improprieties. Fall and Denby explained that the transfers to the Interior Department and the leasings were “in the public interest.”

When President Harding put his personal stamp of approval on the leasing of the oil reserves, public sentiment turned against the investigating Democrats. A big, smiling man with an open face that seemed to project total integrity, Harding easily gave the impression that all was well with the oil reserve transactions. Although events later proved that he lacked understanding of the Teapot Dome scandals as well as many other important matters that took place in his administration, his reassurances at this stage were readily accepted by the public and the press.

Nevertheless, the Senate investigating committee persisted. Both Secretary of Interior Fall and Secretary of Navy Denby were called to testify. It was essential to question these two high-level government officials to lay the groundwork for the investigation. It was essential to explore the conversations between them, as well as the personal financial transactions between Fall and the Doheny and Sinclair interests. It was also necessary to explore the opinions and recommendations of subordinate officials.

Without all of this information, Congress could not have proved the dishonest use of a government position by Albert Fall. It would have been naïve to expect that the Justice Department under Harry Daugherty would have conducted an investigation that was fair and objective, for Daugherty was already mired in his own corruption.

The Harding scandals should have demonstrated for all time that the public cannot rely on any administration to police itself. Nor can it rely on the self-serving declarations of a President, however well-meaning he may be.

President Harding died on August 2, 1923, a broken and disillusioned man, still unaware, however, of the full extent of the scandals. Coolidge’s administration and most of Hoover’s had passed before the investigations were finally completed, the convictions recorded, the appeals completed, and Fall imprisoned in 1931.

President Coolidge was faced with a request for a list of the companies in which his Secretary of Treasury, Andrew Mellon, had an interest. A special Senate investigating committee was studying the Bureau of Internal Revenue and wanted to investigate the tax returns of firms with which Mellon was associated.

President Coolidge said it would be “detrimental to the public service” to reveal the list of Mellon’s business interests and the tax returns of those firms. With that, the investigation ended.

Another request for information was similarly nipped by Hoover. The Senate Foreign Relations Committee had requested that Secretary of State Henry L. Stimson produce the contents of telegrams and letters leading up to the London Conference and the London Treaty. The committee contended it had a special right to such papers because of the constitutional prerogative of the Senate in the treaty-making process. Stimson disagreed and President Hoover backed him, arguing that in order to maintain friendly relations with other nations, it would be unwise to give the Senate all of the information on statements leading up to the treaty.

President Franklin D. Roosevelt was favored with a Congress that was largely on his side in his first two terms, so that there were no conflicts over information sought by Congress. Indeed, President Roosevelt preferred having committees of Congress investigate and dramatize problems in order to facilitate the passage of various New Deal measures.

Congress did run into opposition to requests for information in Roosevelt’s third term, however. In 1941 Roosevelt rejected requests for FBI records and reports, and in 1944 FBI Director J. Edgar Hoover refused to testify or to give Congress a copy of a presidential directive requiring him, in the interests of national security, to refrain from testifying.

The President was backed by a ruling from his Attorney General, Francis Biddle. In a letter dated January 22, 1944, Biddle claimed that communications between the President and the heads of departments were confidential and privileged and not subject to inquiry by Congress. Another opinion by the Attorney General had previously supported President Roosevelt in refusing to make records of the Bureau of the Budget available to Congress.

The Roosevelt administration also used the secrecy routine to hamper a House investigation of the Federal Communications Commission (FCC) in 1943 and 1944. The FCC probe involved the basic charge of political tampering with an independent regulatory agency. There were indications of improper secret contacts with some commission members while cases were being decided.

The Roosevelt administration used every political method available to impede the investigations, including the use of friends in Congress to harass the investigators. Two men who successively held the title of general counsel—Eugene L. Garey and John J. Sirica—resigned in the face of the obstructions and harassment. They charged the investigation was being turned into a “whitewash.”

The final report of the committee gave the FCC a clean bill of health. However, the minority report filed by Representative Richard B. Wigglesworth, Republican of Massachusetts, stated: “It has been impossible for the committee to conduct anything approaching a thoroughgoing investigation.”

Congressman Wigglesworth charged that the committee consistently acted “to suppress indefinitely alleged unsavory facts said to involve high administration officials and advisers.” He made reference to the “methods both brutal and shameful” used to force the original chairman of the investigating committee to resign, and to the general atmosphere that resulted in the resignations of counsels Garey and Sirica.

The unhealthy conditions, which the House committee had started to expose, were left to fester, and fourteen years later the full effects burst on the American public. The investigations of the House Legislative Oversight Subcommittee in 1957, 1958, and 1959, which will be described in a later chapter, disclosed that the successful blocking of the FCC investigation in 1944 not only allowed bad practices to continue but thereby encouraged corruption.

Though President Roosevelt had directed the Secretaries of War and Navy not to deliver some documents which the FCC investigators had requested, his stated reason was simply that it would “not be in the public interest.” No broad claims of a constitutional right to withhold information were ever invoked. There was no need for them because the cover-up was that ruthless and that effective. Had the nation not been at war, such a cover-up would likely have caused a major uproar.

The end of World War II and the election of a Republican Congress in 1946, however, brought the Democrats to heel. From the time the Republican Congress took control of the committees, the Truman administration was in almost constant combat with Congress. The first disputes involved the efforts of Republican committees of Congress to obtain access to FBI records and loyalty files. Later disputes centered on efforts to gain access to records of the Bureau of Internal Revenue and the Justice Department.

In 1947, the Republicans were intent on demonstrating that the Truman administration was “coddling Communists.” Investigators sought access to personnel records and letters dealing with the retention and promotion of persons who were alleged to be security risks or of questionable loyalty.

President Truman issued an executive order barring Congress from access to any of the loyalty or security information in the personnel files of the government. He said it was to protect the government employees from abuse by committees of Congress. The unrestrained activities of some congressional investigators did indeed make the order seem justifiable to many. However, the Republicans viewed it as a cover-up.

Representative Richard M. Nixon, later the Vice President, Representative Charles Halleck, later the Republican leader, and a dozen other prominent Republicans kept a continuous barrage of criticism firing at President Truman.

Said Representative Nixon on April 22, 1948:

“I say that this proposition cannot stand from a constitutional standpoint or on the basis of the merits for this very good reason: They would mean the President could have arbitrarily issued an Executive order in the [Bennett] Meyers case, the Teapot Dome case, or any other case denying the Congress of the United States information it needed to conduct an investigation of the Executive department and the Congress would have no right to question his decision.”

Again, three years later, Representative Halleck was saying on the House floor:

“His [Truman’s] censorship order gives every agency and department of the Government the absolute power to decide what information shall be kept from them. These agency heads are absolute czars unto themselves. When they order the iron curtain down it stays down—a gag on the press and radio of the nation.”

Most of this initial criticism was aimed at the rather limited presidential order which barred Congress from the government personnel files in the investigations of loyalty and security cases.

Although the Truman administration was reluctant to make records available when the Republicans began looking into allegations of improper activities and political favoritism in the Reconstruction Finance Corporation (RFC), in the Bureau of Internal Revenue, and in the Justice Department, no blanket order was issued refusing testimony or records. The allegations were followed first by denials. Then there was stalling but finally, under the pressure of public opinion, the records were made available.

What happened specifically was this: Senator John J. Williams, the Delaware Republican, produced some fairly well documented cases of favoritism and bungling in the nation’s number one tax agency. President Truman, Secretary of Treasury John Snyder, and Attorney General J. Howard McGrath all denied there was any widespread laxity or corruption in the administration of the federal tax laws. Daniel Bolich, the Assistant Commissioner of Internal Revenue, and T. Lamar Caudle, the Assistant Attorney General in charge of the Tax Division, went before the investigating committees and assured the leaders of Congress that all was well.

The self-serving declarations of the Truman administration did not satisfy Senator Williams, however, for they were inconsistent with many documented facts he held in his possession. A subcommittee of the House Ways and Means Committee was then established to conduct a deeper investigation into the handling of tax cases in the Bureau of Internal Revenue. Later a subcommittee of the House Judiciary Committee was organized to conduct some further examination of the way the Justice Department handled tax cases as well as other matters.

Because tax cases were handled by the Bureau of Internal Revenue, a branch of the Treasury Department, and prosecuted by the Justice Department, both departments were involved in the investigation. Tax cases, it was learned, could be fixed in their initial stages by Internal Revenue agents, or they could be sidetracked at higher levels in the Bureau of Internal Revenue; they could be rejected for prosecution by the Justice Department in Washington, or kicked aside by the United States District Attorney. There were at least a half-dozen points where a “fix” could take place, and congressional investigations disclosed that some cases were manipulated at almost all stages.

When at first the Justice Department files were not made available, the stalling was recognized for what it was—an effort to hide records that might be embarrassing. Newspapers quickly pointed out the cover-up, and Acting Attorney General Philip B. Perlman was forced to lay down procedural rules for the committees of Congress to use in requesting access to Justice Department files.

Perlman stated that the Justice Department would not give Congress access to open cases, but that closed files would be made available. He also said that FBI reports and similar confidential information would not be made available. The closed files and the testimony of high officials were nevertheless sufficient to enable Congress to document the record of the mishandling of federal tax investigations and prosecution. Congress extracted testimony from two cabinet officials—Attorney General J. Howard McGrath and Secretary of Treasury John Snyder. They revealed their conversations and communications with their highest subordinates. Records were produced showing the advice, recommendations, and conclusions of investigators in the Internal Revenue Service and the staff lawyers in the Justice Department. It was clear that some of the cases had not been handled in the normal manner, and that recommendations from subordinate officials were disregarded at some key points.

Only through this full examination was it possible to prove that some cases were being “fixed” for money or for political considerations. Without the full record on the recommendations from lower officials it would have been impossible to prove that the mismanagement was due to anything more than “poor judgment” or negligence.

Neither Attorney General McGrath nor Treasury Secretary Snyder was shown to be involved in illegal tampering with any tax cases. However, they had contended that the initial allegations of fraud and mismanagement were untrue.

The investigations by Congress proved that several high officials were involved in outright fraud, and a good many more were involved in gross negligence. The Commissioner of Internal Revenue, the Assistant Commissioner, and the chief counsel for the Bureau of Internal Revenue all resigned under fire.

A former Commissioner of Internal Revenue, Joseph Nunan, was subsequently indicted and convicted on charges of failing to report large amounts of unexplained income. Assistant Commissioner Daniel Bolich was indicted and convicted on charges of failing to report more than $200,000 in income, though the conviction was later upset by the United States Supreme Court on technical grounds. T. Lamar Caudle, former Assistant Attorney General, in charge of the Tax Division, was indicted, convicted, and sent to prison on a criminal charge arising out of his mishandling of a federal income tax case. Convicted with Caudle was Matthew Connelly, appointment secretary for President Truman.

In total, dozens of tax officials were ousted from office for questionable handling of tax cases, and dozens were indicted and convicted on charges of cheating on their own tax returns. The mismanagement and fraud, which the Truman administration had sought to deny existed, was more widespread and sordid than most of the critics of the Bureau of Internal Revenue had imagined. The damage to the integrity of the nation’s tax system was incalculable.

If ever a scandal were needed to prove the necessity of a congressional review to keep our big federal agencies open and clean, the Truman tax scandal was it. The success of their investigations only goaded the Republicans to further probing and policing. In their party platform of 1952, the Republicans pledged “to put an end to corruption, to oust the crooks and grafters, to administer tax laws fairly and impartially, and to restore honest government to the people.”

When he accepted the party’s nomination in Chicago on July 11, 1952, General Dwight D. Eisenhower said:

“Our aims—the aim of this Republican crusade—are clear: to sweep from office an Administration which has fastened on every one of us the wastefulness, the arrogance and corruption in high places, the heavy burdens and the anxieties which are the bitter fruit of a party too long in power.”

“What the Washington mess must have is the full treatment,” Candidate Eisenhower declared at Atlanta, Ga., on September 2, 1952. “The only clean-up that will do the job is the wholesale cleanout of the political bosses in Washington. I pledge you that ... I shall not rest until the peddlers of privilege and the destroyers of decency are banished from the nation’s house.”

Two days later at Philadelphia, he spoke of the need for an open, frank government:

“We must not minimize the difficulties; neither can we seek with words and dollars to make the going look easy when it is tough. There will be mistakes, but the mistakes we make will not be doctored up to look like triumphs. There will be no curtain of evasion, of suppression, or double talk between ourselves and the people.”

At Des Moines, Iowa, on September 18: “We are going to cast out the crooks and their cronies.... And when it comes to casting out the crooks and their cronies, I can promise you that we won’t wait for congressional prodding and investigations. The prodding this time will start from the top. And when we are through, the experts in shady and shoddy government operations will be on their way back to the shadowy haunts, the sub-cellars of American politics from whence they came.... The first thing we have to do is get a government that is honest....”

And at St. Louis, Mo.:

“... we must take the people, themselves, into our confidence and thereby, restore their confidence in government. We will keep the people informed because an informed people is the keystone in the arch of free government.”

The crusade against secrecy and corruption stayed at the forefront of the campaign and swept Eisenhower and Nixon into office on November 4. When the electoral vote was tallied, it stood 422 Republicans to 89 Democrats—a genuine mandate to clean up “the mess in Washington.”

CHAPTER IV
Army-McCarthy—A Claim of Secrecy Unlimited

On the morning of May 17, 1954, the klieg-lighted Senate Caucus Room was jammed with spectators. Near the end of the huge table at the front of the room, Senator Joseph R. McCarthy hunched over a microphone, reviling the Eisenhower administration. He claimed that high officials of the Eisenhower administration were arbitrarily silencing witnesses from the executive branch, and in doing so were preventing him from defending himself.

It was the eighteenth day of the already famous Army-McCarthy hearings, an exciting political drama that held the attention of an estimated 20 million television viewers. Over the weeks the Senator had sneered at Army Secretary Robert T. Stevens and anyone else who disagreed with him. His smirking disrespect and heavy-handed humor had already cooled the enthusiasm of many of his followers. Some had even turned against him. Senator McCarthy, in short, had created the worst possible climate in which to make any appeal to fair play or decency. And yet the Wisconsin Republican was now making such an appeal and would soon be receiving some sympathetic comment from Democratic as well as Republican senators.

The point at issue was simple: Should Army Counsel John Adams be required to testify as to conversations at a meeting at the Justice Department on January 21, 1954? Adams had already testified to being present on that day with Attorney General Herbert Brownell, Jr., Deputy Attorney General William P. Rogers, Presidential Assistant Sherman Adams, White House Administrative Assistant Gerald D. Morgan, and United Nations Ambassador Henry Cabot Lodge. The meeting had been called to try to find ways to curb Senator McCarthy’s free-wheeling investigation of the loyalty-security program in the Defense Department.

When, following this testimony on May 14, the Senate committee members asked for information about the conversations, Adams balked. He said that “instructions of the Executive Branch” barred him from telling of the conversations at that key meeting on January 21. Committee members were concerned. How could they obtain the evidence necessary to draw a conclusion on the hearings if they were to be barred from all “high-level discussions of the Executive Branch”?

The Army-McCarthy hearings centered on charges and countercharges involving Army Secretary Stevens, John G. Adams, Defense Department General Counsel H. Struve Hensel, Senator Joseph McCarthy, Roy M. Cohn, and Francis P. Carr. Cohn was chief counsel for McCarthy’s Permanent Investigating Subcommittee, and Carr was chief investigator.

The Department of the Army alleged that Senator McCarthy, Cohn, and Carr had improperly used the power of the McCarthy subcommittee to obtain preferential treatment for Cohn’s pal, Private G. David Schine. It was contended that the tough and aggressive little Cohn had tried to intimidate the Army and Defense officials to get Schine a commission or a special assignment as an assistant to the Secretary of the Army, or a post in the Central Intelligence Agency. It was also charged that Cohn had suggested that Private Schine might be given a special assignment to work with the McCarthy committee. In fact, Schine had been drafted and after a short time on regular Army duty was permitted to leave his regular duties to work with Cohn on the McCarthy committee investigations.

On the other side, Army Secretary Stevens contended that McCarthy and Cohn had launched a vindictive probe of the Army security programs in reprisal against those who had not co-operated to grant special treatment to Private Schine.

Senator McCarthy countercharged that the Army tried to blackmail his investigating subcommittee into dropping its investigation of the Army loyalty-security setup by threatening to circulate an embarrassing report about Cohn and Schine. The Wisconsin Senator declared that his investigation of the Army loyalty-security program was fully justified, and reiterated his charge that Major Irving Peress had been promoted by the Army despite his record as a “subversive.” McCarthy did not deny that he had criticized Brigadier General Ralph Zwicker as a “disgrace” in uniform. And he renewed his assault on the Fort Monmouth Missile Research Center as a place honeycombed with “Reds.”

It was easy to understand why the Eisenhower administration held the January 21 meeting at the Justice Department to decide how to handle Senator McCarthy. However, it was not so easy to understand why, after testifying there had been such a meeting, Army Counsel Adams refused to tell what was said.

Senator Stuart Symington, the handsome Missouri Democrat, was amazed that testimony would be barred on such a crucial meeting. He declared that testimony on the January 21 meeting was essential to determine the responsibility for the Defense Department’s attempt to stop Senator Joseph McCarthy.

“This was a high-level discussion of the executive department, and this witness [Adams] has been instructed not to testify as to the interchange of views of people at that high-level meeting,” explained Joseph N. Welch, the gentle-voiced Boston lawyer who was serving as a special counsel for the Army.

“Does that mean we are going to get the information about low-level discussions but not about high-level discussions?” Senator Symington asked.

“That is only, sir, what I have been informed,” Welch replied and then carefully made it clear he was not passing on the right or wrong of the policy. “It isn’t a point of what I like. It is a point of what the witness has been instructed.”

Senator Henry M. Jackson, the Washington Democrat, was no McCarthy supporter, but he too was nettled by the instructions given Adams by Deputy Defense Secretary Robert B. Anderson. Jackson held that if the Defense Department had any right to refuse to testify on high-level conversations, then it had waived that right when Adams told of the January 21 meeting and the participants.

“I think that maybe this testimony may be embarrassing to the Administration, and I do not think that because it is embarrassing to the Administration and favorable to Senator McCarthy, that it ought to be deleted,” Senator Jackson declared.

“I think this committee should find out now,” Jackson continued, “whether it [the Administration policy] covers just this conversation or whether it covers all conversations that went on between the various officials within the Executive Branch of Government ... [if] we are going to be foreclosed here immediately from asking any further questions relating to conversations between officials within the Executive Branch. Heretofore, those conversations have been coming in when they have been favorable. Now that they are unfavorable [to the Administration], are they to be excluded?”

The unfairness of allowing favorable testimony by a witness, and then arbitrarily cutting off unfavorable testimony was apparent to many observers, even through the steam of feeling that surrounded the Army-McCarthy hearings. To justify such arbitrary secrecy, the Defense Department needed all the prestige it could summon.

The answer to the problem, it was decided, would be a letter from President Dwight D. Eisenhower to Defense Secretary Charles E. Wilson. It had to be a letter of high tone in which the popular President Eisenhower could convince the public that some great principle was at stake. It had to be general enough to avoid saying just why John Adams couldn’t testify, but specific enough to give the impression that the security of the nation and the foundations of the Constitution were in danger if John Adams were forced to talk. The letter drafted between Friday, May 14, and Monday, May 17, carried the full impact of the prestige of a highly popular President, but it obscured temporarily a sweeping assumption of executive power to arbitrarily withhold information (see Appendix A).

On Monday morning, May 17, John Adams filed the Eisenhower letter with the Army-McCarthy committee and a broad new doctrine of “executive privilege” was born. The glowing phrases about a “proper separation of powers between the Executive and Legislative Branches of the Government,” misled the public and a good many newspaper editorial writers and columnists, even though it did not fool all the members of the Army-McCarthy committee.

President Eisenhower’s May 17, 1954, letter stated:

“Because it is essential to efficient and effective administration that employees of the Executive Branch be in a position to be completely candid in advising with each other on official matters, and because it is not in the public interest that any of their conversations or communications, or any documents or reproductions, concerning such advice be disclosed, you will instruct employees of your Department that in all of their appearances before the Subcommittee of the Senate Committee on Government Operations regarding the inquiry now before it they are not to testify to any such conversations or communications or to produce any such documents or reproductions. This principle must be maintained regardless of who would benefit by such disclosure.

“I direct this action so as to maintain the proper separation of powers between the Executive and Legislative Branches of the Government in accordance with my responsibilities under the Constitution. This separation is vital to preclude the exercise of arbitrary power by any branch of Government.”

The Eisenhower letter also stated that “throughout our history the President has withheld information whenever he found that what was sought was confidential or its disclosure would be incompatible with the public interest or jeopardize the safety of the Nation.” The letter gave the impression that from George Washington down, a number of Presidents had taken action analogous to the silencing of John Adams.

How was the “public interest or the safety of the Nation” to be jeopardized by Army Counsel John Adams’ telling of a meeting on strategy to curb Senator McCarthy’s investigations?

If this Eisenhower letter was “to preclude the exercise of arbitrary power by any branch of Government,” then who was to stop the executive branch from such arbitrary silencing of witnesses?

Were the Army-McCarthy investigating committee and other committees of Congress to be barred from obtaining information on all “conversations or communications, or any documents or reproductions, concerning advice” within the executive branch?

These were the questions that immediately arose in the minds of Senator Jackson, Senator Symington, and Senator John L. McClellan, the Arkansas Democrat. Senator Everett Dirksen, the honey-voiced Illinois Republican, and Karl Mundt, the South Dakota Republican who was serving as chairman, also expressed some concern, although privately.

Stern-faced Senator McClellan was not awed by the popularity of President Eisenhower or by the fact that Senator McCarthy was a highly unpopular figure at that point. He declared that if the barrier to any testimony on the January 21 meeting prevailed, then it would be impossible to establish whether John Adams, Army Secretary Stevens, or some higher officials were responsible for directing actions complained of by Senator McCarthy, Roy Cohn, and Private Schine.

“If the committee is going to be left in a dilemma of not knowing whether the Secretary [Stevens] is responsible for the action taken after that date [January 21], or whether the responsibility is at a higher level, then we will never be able to completely discharge our responsibility in this proceeding,” Senator McClellan said.

Senator Jackson expressed the view that the secrecy policy left the committee “in a dilemma of passing on testimony that is incomplete. I think ... that the Executive Branch is doing a great injustice to this committee and to all of the principals in this controversy by exercising the power which the President has, very late in the proceedings.”

There was no question that President Eisenhower’s letter had stalled the hearings at a crucial moment. If witnesses could not testify on an essential point, then there was little more that could be learned.

“I must admit that I am somewhat at a loss as to know what to do at the moment,” Senator McCarthy said. “One of the subjects of this inquiry is to find out who was responsible for succeeding in calling off the hearing of Communist infiltration in Government. That the hearing was called off, no one can question.”

McCarthy continued: “At this point, I find out there is no way of ever getting at the truth, because we do find that the charges were conceived, instigated, at a meeting [of January 21] which was testified to by Mr. Adams.

“I don’t think the President is responsible for this,” the Wisconsin Republican said in expressing his views that others had conceived the idea of silencing Adams and had merely obtained President Eisenhower’s signature to accomplish their purpose. “I don’t think his judgment is that bad.”

“There is no reason why anyone should be afraid of the facts, of the truth, that came out of that meeting,” Senator McCarthy thundered. “It is a very important meeting. It doesn’t have to do with security matters. It doesn’t have to do with national security. It merely has to do with why these charges were filed.

“The question is ... how far can the President go? Who all can he order not to testify? If he can order the Ambassador to the U. N. [Henry Cabot Lodge] not to testify about something having nothing to do with the U. N., but a deliberate smear against my staff, then ... any President can, by an executive order, keep the facts from the American people.”

Senator McCarthy brought up the 1952 campaign in which government secrecy had been a key issue: “I do think that someone ... should contact the President immediately and point out to him ... that he and I and many of us campaigned and promised the American people that if they would remove our Democrat friends from control of the Government, then we would no longer engage in Government by secrecy, whitewash and cover-up.”

It was a pathetic plea from a man who by now had completely destroyed his public image by his own brutal performance. His voice was raucous. His heavy beard gave him a rough, almost uncouth appearance despite his efforts to modify it by shaving during the noon recess.

Still, he hammered on. “I think that these facts should be brought to the President because the American people will not stand for such as this, Mr. Chairman. They will not stand for a cover-up halfway through a hearing.”

Seldom had there been more right on the side of McCarthy, but seldom had there been fewer people on his side. Many people who at first had been inclined to approve Joe McCarthy as “doing some good against the Communists,” had been antagonized by his television image. Many editorial pages of a press that was normally much more objective had developed an attitude that anything that is bad for Joe McCarthy is good for the country.

Public sentiment against him was so strong that I did not believe it could have been changed to his favor—even if the committee had succeeded in eliciting testimony on the January 21, 1954, meeting and no matter how embarrassing it might have been to the Eisenhower administration.

There remained, nevertheless, the possibility that the Eisenhower letter could be used again. I was shocked at the wording of it. On the face of it, it seemed to extend the claim of “executive privilege” to prohibit Congress the access to any records or testimony that might involve communications within the executive branch. The letter was a directive with regard to excluding testimony in one hearing—the Army-McCarthy hearing. However, it was certainly broad enough that the Defense Department could use it to block any investigation.

Moreover, if an administration could successfully block any probe of high-level discussions in the Defense establishment, why couldn’t it use that same “executive privilege” to block any investigation in any other executive agency? The thought disturbed me. The Teapot Dome scandals of the Harding administration could have been buried if those officials had applied even the mildest interpretation of “executive privilege” set down by President Eisenhower in the May 17 letter.

If cabinet officers and subordinate officials had refused to testify about the Teapot Dome affair on grounds of “confidential executive communications,” it could have stifled the entire investigation by Senator Thomas Walsh, the Montana Democrat. Under the “executive privilege” theory, Secretary of Navy Edwin Denby and Secretary of Interior Albert B. Fall could have refused to give testimony or produce records of events leading up to the leasing of the Teapot Dome oil reserves. Fall’s crimes might never have been uncovered, and he would have avoided the exposure and conviction.

Similarly, the tax scandals of the Truman administration could have been buried by claiming that all papers except those involving final decisions were “confidential executive communications.” It had been vital to learn the nature of advice and recommendations of both high-level and low-level officials on settlements of huge tax cases. Attorney General J. Howard McGrath could have claimed that his conversations with T. Lamar Caudle, the Assistant Attorney General in charge of the Tax Division, were “confidential executive business.”

Caudle and White House Aide Matthew Connelly could have claimed that their communications were “confidential executive business.” As it was, the Caudle-Connelly communications were actually used as the basis of criminal charges on which Caudle and Connelly were convicted and sent to prison. A number of other officials of the Internal Revenue Service were convicted on charges arising out of revelation of the “advice and recommendations” they gave that were part of a huge tax “fix” operation.

I talked to several members of the Army-McCarthy committee, and with several of my newspaper colleagues, Democratic and Republican senators alike were disturbed at this seemingly limitless claim for “executive privilege.” They hoped that the Eisenhower administration had written the letter for just this one hearing and had used the broad language merely to avoid an impression that Senator McCarthy was being singled out for special treatment. Among the newspaper reporters the attitude was that Joe McCarthy was getting about what he had coming to him; there was little concern over what use might be made of the precedent in other investigations.

Many of the reporters had been misled by a memorandum that accompanied the Eisenhower letter. It said, in effect, that President Eisenhower was doing no more than George Washington and many other Presidents had done. By invoking such names as George Washington and Thomas Jefferson, the memorandum made it possible to pass off the Eisenhower letter as a mere “clarification” of an old and settled principle. A close reading of “the precedents” disclosed in fact that President Washington actually opposed withholding information from Congress. (See Chapter I.) He once refused to deliver treaty papers to the House but only because the Senate, not the House, had jurisdiction to ratify treaties.

President Jefferson had taken papers into his personal custody in connection with the Aaron Burr case, and thus defied the federal court by declaring that the only way the papers could be reached would be by impeaching him. He was right. The law is quite settled on this point; neither the courts nor the Congress can compel the President to testify or produce personal letters, papers, and memorandums. President Jefferson eventually did send the documents subpoenaed by Chief Justice Marshall. But even if Jefferson had refused to produce these documents, it would hardly seem to be an adequate reason for allowing a lawyer for the Army Department to refuse to testify about a meeting with a cabinet officer and several White House aides.

The late Ed Milne, of the Washington Bureau of the Providence Journal, shared my concern. He and I each wrote stories demonstrating how the Truman tax scandals and the Harding Teapot Dome scandals could have been hidden forever if “executive privilege” had barred testimony of all high-level conversations.

We also reminded our readers of the Republican reaction to the ducking and evasion of the Truman administration between 1946 and 1952. Senator Homer Ferguson, the Michigan Republican, was chairman of one of the committees that investigated the Truman administration in the late 1940s. His chief counsel at the time was William P. Rogers, who later became Eisenhower’s Attorney General and a chief advocate of the ultimate in executive secrecy. Only a year before Eisenhower’s election (September 27, 1951), Ferguson spoke out bluntly on the issue of suppression of facts by the executive departments: “It may be said that this practice of suppressing information in the executive department got its big start back in March, 1948. The Senator from Michigan [himself] was then chairman of the Senate Investigations Subcommittee and was investigating things that could be embarrassing to the administration. The subject of the investigation was the operation of the Government’s loyalty program, revolving around the case of William Remington.”

Senator Ferguson continued: “An executive order was issued, placing certain files under the direct and exclusive jurisdiction of the President. On occasion files were taken to the White House in order that they could not be subpoenaed. In the course of our hearings, an admiral was able to tell the Senator from Michigan, off the record, the fact that because of an order by the President of the United States he was not permitted to testify.”

As I have shown (in Chapter III), the Truman administration did try to hide embarrassing facts from Congress. President Truman issued an executive order placing certain personnel files under a secrecy blanket, and on some occasions he ordered files delivered to his personal custody at the White House so they could not be reached by subpoena. His administration stalled investigations of flagrant crimes for months. But President Truman never asserted any constitutional right by which all high-level officials could claim an “executive privilege” to refuse to testify or produce records.

The persistent, hard-hitting inquiries of Committee Counsel William P. Rogers made the Truman administration so frantic in 1948 and 1949 that a staff lawyer in the Justice Department was asked to prepare a memorandum on the precedents set by earlier Presidents who had withheld information from Congress. However, that memorandum was regarded as too insubstantial to use. The Truman administration relied instead on ducking and dodging to avoid embarrassment. It sensed correctly that the press and the public would have been outraged if it had tried to pull down a total secrecy curtain in the midst of investigations of the five percenters, the influence peddlers, and the loyalty cases.

What Truman would not do, however, the highly popular President Eisenhower did do. Ironically, his May 17 letter caused hardly a ripple of criticism. On the contrary, most editorial pages praised President Eisenhower for expressing some fine new theory on the U. S. Constitution or wrote off the letter as an historically unimportant, one-shot claim of secrecy.

I called one editor friend the day after such an approving editorial appeared, and commented that the Eisenhower doctrine of “executive privilege” could bar Congress from practically any executive papers containing “opinions, advice or recommendations.”

“This will set the ‘Freedom of Information’ cause back fifty years, if it is not criticized and stopped now,” I said.

My editor friend said he thought that there might have been some loyalty file discussed at the January 21 meeting, and that this would be a justification for refusing testimony.

I told him that no one had claimed that loyalty files were discussed, and that if this had been the reason for the secrecy then it should have been stated. Also, I pointed out that while discussion of a loyalty file might give some justifications for limiting testimony, the limitation should only cover that subject and not the whole meeting.

The editor agreed with me that the broad language of the Eisenhower letter constituted a dangerous precedent. But he didn’t believe that any administration would ever try to invoke the total arbitrary “executive privilege.”

Just how wrong events would prove him to be was not then easy to predict. Indeed, the whole story of the Army-McCarthy hearings had by this time taken second news billing to the United States Supreme Court ruling on school segregation. The unanimous segregation decision came out on May 17, 1954—the same date as the Eisenhower letter to Wilson. That segregation decision now dominated discussions of constitutional law. And the few persons who did stop to think about the inherent threat in the broad use of secrecy could hardly get emotional about it—as long as the only victims appeared to be Senator McCarthy and his little knot of followers.

CHAPTER V
Another Blow at Senator Joe

When the Eisenhower administration took office in January 1953, I had had high hopes that arbitrary government secrecy would be ended. As a candidate, the President had talked much of his interest in open government and had pledged to make all but national security information available to the public. So had the Vice President, Richard M. Nixon.

As late as November 6, 1953, Attorney General Herbert Brownell, Jr., was continuing to stress the Republican party’s interest in eliminating secrecy policies of the Truman administration. In Chicago, before a convention of Associated Press Managing Editors, Brownell said he was “very much aware of the great importance of seeing to it that the obstacles to the free flow of information are kept to an absolute minimum.

“I would like to call attention to some of the procedures which we established,” Brownell said. “At the very outset of the new Administration, we provided that any pardons or commutations of sentence shall be a matter of public record. Throughout the prior Administration, these executive actions were taken secretly, for political purposes and over the objection of the Office of the Pardon Attorney.

“We also started the policy of making a matter of public record matters which our predecessors buried in secrecy, such as settlements of all types of cases which we handle and involve monetary considerations, such as tax claims, damage suits and Alien Property settlements. We do not contend that we have achieved perfection in our efforts to provide a full flow of information. But we are working on it and each day find new ways to do our part.”

At this same meeting, Attorney General Brownell announced that President Eisenhower was revoking a much criticized executive order by President Truman dealing with defense information. He said President Eisenhower was issuing a new order which “attains the required balance between the need to protect certain types of defense information, and the need for keeping the citizens of a republic as fully informed as possible concerning what their government is doing.

“President Eisenhower considers the free flow of information from the Government to the people to be basic to the good health of the Nation,” Brownell told the editors. He declared that under the Truman administration there “was a tendency to follow the dangerous policy heretofore used by dictator nations of authorizing government officials to use the term ‘National Security’ indiscriminately, and thereby throw a veil of secrecy over many items which historically have been open to the public in this country.”

The Attorney General said he viewed the new Republican policy as an opportunity to “demonstrate to all the world the vivid contrast between our system of government, which believes in and practices freedom of the press, and the Communist system, which regards the concept of freedom of information as a threat to the continuance of its tyrannical rule.”

Such attitudes in November 1953 were difficult to reconcile with those of May 1954, when the same Attorney General was helping fashion a policy that was more devastating to a free flow of information than simply refusing to give information to the press. The May 17, 1954, letter from President Eisenhower to the Defense Department said in essence that any high officials of the Defense establishment might refuse to produce records or testify even when subpoenaed by a properly constituted congressional committee that was acting within its jurisdiction.

The Army-McCarthy hearings that had given rise to the famous letter ended on June 17, 1954. However, it was not necessary to wait for the official reports made public on October 30, 1954, to know that Senator McCarthy was finished as a political power—and that the administration would use the “executive privilege” precedent again.

As an aftermath of the Army-McCarthy hearings, a charge was filed that Senator McCarthy had conducted himself in a manner “unbecoming a member of the United States Senate.” And on August 2, 1954, the U. S. Senate decided by the overwhelming vote of 75 to 12 to investigate Senator McCarthy’s conduct.

Senator Arthur V. Watkins, a Utah Republican, was named chairman of the select McCarthy Censure Committee to determine recommendations on Senator McCarthy’s conduct. In barely more than a month Chairman Watkins ran smack into a roadblock of “executive privilege.”

The subject of inquiry was Senator McCarthy’s severe tongue lashing of Brigadier General Ralph Zwicker, of Camp Kilmer, N. J. Major General Kirke B. Lawton, a former commanding general of Fort Monmouth, N. J., refused to testify about conversations with General Zwicker. He claimed “executive privilege” under the May 17, 1954, letter from President Eisenhower.

Edward Bennett Williams, who was serving as counsel for Senator McCarthy, questioned the applicability of the May 17 letter: “Don’t you know, General, that order of May 17, 1954, referred only to the Government Operations Committee and the hearing then in session which was commonly known as the Army-McCarthy hearing?”

General Lawton replied that he had been advised that the May 17 letter “not only applied to the so-called Mundt committee [the Special Committee for the Army-McCarthy hearings] but it applies to this or any other.”

Chairman Watkins excused General Lawton and wrote Defense Secretary Charles E. Wilson asking clarification. Defense Secretary Wilson replied that Generals Lawton and Zwicker would be allowed to testify and produce documents unless their action would be “in violation of national security regulations or a violation of the President’s order of May 17, 1954.”

There could be little doubt now that the Defense Department intended to make the May 17, 1954, letter a part of its basic doctrine with all of the great blanket of secrecy that this would provide. I was now more concerned than ever, for I had hoped that the May 17 letter was the one-shot secrecy claim that so many of my colleagues thought it was. But again the name of Joe McCarthy was mixed up in the investigation, and in 1954 it would have been difficult to get any cool thinking on a subject that remotely touched on the controversial Wisconsin Republican.

Still, I couldn’t help worrying that the new and expanded doctrine of “executive privilege” was just too convenient a cover for those who wished to hide their activities from Congress, the press, or the public. It could be used by the incompetent as well as the corrupt.

This doctrine of an “inherent right” of persons in the executive departments to refuse testimony or documents threatened our whole system of government. It seemed a naked claim of an authority for unlimited secrecy, without regard for laws or the spirit of a democracy. By claiming a right to withhold all information on opinions, conclusions, recommendations, or suggestions, this doctrine could allow the secrecy blanket to be dropped over virtually every document in most agencies, for there are few governmental documents that do not contain some opinions or suggestions. It carried within it, in short, the seeds of dictatorship.

It seemed strange to me that this doctrine would be set forth in the administration of a President who would be regarded as one of the mildest Chief Executives, and certainly one of the least inclined toward dictatorial action. I was not worried that President Eisenhower would try to use it as a tool for totalitarianism. But with this doctrine in force a man who was inclined toward totalitarian methods might readily administer the laws as he pleased.

CHAPTER VI
Secrecy Fix on Dixon and Yates

Not until the summer of 1955 did it become apparent that the May 17, 1954, Eisenhower letter would be used on matters unrelated to Senator Joseph R. McCarthy. Throughout the fall and winter of 1954, I spoke and wrote about the potential danger of “executive privilege” as it had been applied in the Army-McCarthy hearings and in the McCarthy censure hearings. A few persons saw it my way. But the general tendency to believe that the letter was written solely to deal with Senator McCarthy held fast, and a general faith prevailed that the Eisenhower administration would not use it to cover up mistakes, corruption, or improprieties.

Then suddenly, in June 1955, the White House reinvoked the letter as justification for refusing to make records available to a Senate committee investigating the Dixon-Yates contract.

First, Budget Director Rowland R. Hughes used “executive privilege” to conceal testimony and documents requested by Senator Estes Kefauver, the Tennessee Democrat in charge of the investigation.

Then J. Sinclair Armstrong, the chairman of the Securities and Exchange Commission, used “executive privilege” to justify his refusal to disclose conversations with Presidential Assistant Sherman Adams relative to postponing a hearing on Dixon-Yates financing.

Also, Sherman Adams claimed the “privilege” not to be required to testify about his talks with Armstrong or about other activity in the Dixon-Yates contract development.

At last a few of the Democrats who had been only too glad to see “executive privilege” invoked against Senator McCarthy opened their eyes. The realization of the danger dawned too late, however, for it would take more than a few weeks to upset a precedent that only a year earlier had been generally viewed as praiseworthy.

While the Army-McCarthy hearings and the McCarthy censure affair dominated the news, top-level officials in the Eisenhower administration had been quietly at work arranging for the Mississippi Valley Generating Company to furnish 600,000 kilowatts of electricity to the Tennessee Valley Authority. The Mississippi Valley Generating Company contract ultimately became known as the “Dixon-Yates” contract because of the two men responsible for its creation. They were Edgar H. Dixon, president of Middle South Utilities, Inc., and Eugene A. Yates, chairman of the board of The Southern Company. Both firms act as holding companies for utilities operating in Arkansas, Georgia, Louisiana, Mississippi, and Alabama. Dixon and Yates joined forces to create the Mississippi Valley Generating Company, an operating subsidiary in West Memphis, Ark. The Dixon-Yates contract was reported to be for the purpose of replacing power in the Tennessee Valley Authority area that was used by the Atomic Energy Commission.

Lewis L. Strauss, then chairman of the Atomic Energy Commission (AEC), and Joseph Dodge, then Director of the Budget, were active in pushing this contract. Chairman Strauss pushed it despite the fact that a majority of the Atomic Energy Commissioners were opposed to such a contract on grounds there was no Atomic Energy Commission installation near West Memphis, Ark., and the power was to be used in Memphis, Tenn.

The Eisenhower administration had opposed the Tennessee Valley Authority proposal to build a steam plant at Fulton, Tenn., with a capacity of 500,000 kilowatts to provide for the power needs of Memphis, plus a surplus for industrial expansion. Budget Director Dodge opposed the Fulton steam plant and axed the 90 million dollars requested from the budget in 1953. Gordon Clapp, at that time chairman of the TVA, then asked that to offset the loss of the Fulton steam plant the AEC consumption of TVA power be cut sharply. It was at this point that Budget Director Dodge turned to the AEC in an effort to get that agency to find ways to obtain power from a private company.

The Dixon-Yates contract idea developed over a period of months in 1953 and early 1954. Dozens of conferences were held in which one of the important figures was Adolphe Wenzell, a vice president and director of the First Boston Corporation. Wenzell was an engineer and an expert in the cost of construction of public utility plants. From May 20, 1953, to September 3, 1953, he made studies and issued reports on TVA power plant costs. In January 1954, Rowland R. Hughes, then Deputy Director of the Budget, asked Wenzell to assist the Budget Bureau on the Dixon-Yates contract. Wenzell agreed and, until April 10, 1954, continued to participate in the Dixon-Yates negotiations.

Wenzell continued to draw his salary from First Boston Corporation, and received travel costs and a per diem allowance from the government for his services for the Budget Bureau. Since First Boston Corporation was slated to be underwriter of the Mississippi Valley Generating Company, a question was raised by his associates about the propriety of Wenzell’s services to the Budget Bureau and to First Boston—a firm that had a pecuniary interest in the Dixon-Yates contract agreement.

As the Dixon-Yates contract moved toward completion, a lawyer for the law firm of Sullivan & Cromwell told Wenzell that before First Boston should take part in the financing for Dixon-Yates, Wenzell “should make clear that he had severed his entire relations with the Bureau of the Budget.”

In the summer of 1954, a few complaints were raised about the Dixon-Yates contract. There was also opposition to the Dixon-Yates contract within the Tennessee Valley Authority as well as by a majority of the Atomic Energy Commissioners. But on June 16, 1954, Rowland Hughes, by then promoted to Director of the Budget, wrote to the Atomic Energy Commission:

“The President has asked me to instruct the Atomic Energy Commission to proceed with negotiations with the sponsors of the proposal made by Messrs. Dixon and Yates with a view of signing a definite contract.”

The contract was signed, and in the following weeks the number of Democratic complaints mounted. The complaints hit a number of points. The Democrats contended that the Dixon-Yates contract could cost the government from 107 million to 120 million dollars over a period of twenty-five years, but that in the end the government wouldn’t own the plant. This was compared to the 90 million cost for the Fulton steam plant which the TVA wanted to construct.

The debate revolved largely around the question of private versus public power (or TVA). Many Democrats held that the Eisenhower administration was allowing the public treasury to be milked by Big Business in the same fashion the Harding administration had permitted the exploitation of Navy oil reserves in the Teapot Dome scandals.

Democratic National Chairman Stephen Mitchell hit a sensitive nerve in early August 1954 when he implied that President Eisenhower had direct responsibility for the Dixon-Yates contract. He charged that one of President Eisenhower’s golfing associates was a director of The Southern Company, one of the two holding companies that had established the Mississippi Valley Generating Company. Mitchell’s office identified the man as Bobby Jones, former amateur and professional golfing champion. No evidence was ever produced to support the insinuation that Jones influenced Dixon-Yates decisions.

President Eisenhower was furious that his associations would be subject to such charges, and in his August 17, 1954, press conference he offered to disclose all the events leading up to the Dixon-Yates contract.

“Any one of you here present might singly or in an investigation group go to the Bureau of the Budget, or to the Chief of the Atomic Energy Commission, and get the complete record from the inception of the idea [of the Dixon-Yates contract] to this very minute, and it is all yours.”

Four days later, on August 21, 1954, the Atomic Energy Commission released what was purported to be a full chronology of all events in the development of the Dixon-Yates contract. The names of Wenzell and Paul Miller, assistant vice president of First Boston Corporation, had appeared in an original draft. However, the names of both of these First Boston Corporation officials—Wenzell and Miller—were eliminated from the chronology that was given to the press.

On the surface, it appeared that President Eisenhower had met charges of improper activity with a frank and open report on the whole record of the Dixon-Yates contract. Not until February 18, 1955, did anyone charge that the chronology was not a full truthful report. On that day, Senator Lister Hill, the Alabama Democrat, made a Senate speech in which he charged Wenzell with a dual role in the Dixon-Yates negotiations. He questioned the propriety of Wenzell’s being a financial adviser to Dixon-Yates while at the same time serving as an adviser to the United States Government on the Dixon-Yates contract.

Spokesmen for the Eisenhower administration such as Budget Director Rowland R. Hughes denied there was any dual role by Wenzell in the Dixon-Yates contract. As late as June 27, 1955, Budget Director Hughes testified before a Senate committee that “I was told it was not true.” He said he didn’t know that First Boston had anything to do with the financing of Dixon-Yates.

The speech by Senator Hill caused understandable concern in the White House and among the top officials of the First Boston Corporation. Revelation of a “conflict of interest” could spoil the entire 107-million-dollar contract and its profits for First Boston. It could undo what President Eisenhower and many top subordinates deemed an important block to the spread of the Tennessee Valley Authority.

Of immediate importance was a 6.5-million-dollar appropriation slated to go to the House of Representatives on June 13, 1955. The appropriation was for a transmission line from the Tennessee Valley Authority to the point where it would pick up power from the Mississippi Valley Generating Company in the middle of the Mississippi River.

On June 11, 1955, Sherman Adams telephoned to J. Sinclair Armstrong, chairman of the Securities Exchange Commission. He requested that the SEC hold up hearings on debt financing of the Dixon-Yates contract until after the House had finished work on the 6.5-million-dollar appropriation. Wenzell was among the witnesses scheduled to testify before the SEC, and testimony on Wenzell’s full role in Dixon-Yates could have had a devastating impact on the appropriation. The hearings were postponed.

Finally, on June 28, 1955, Budget Director Hughes revealed that the Eisenhower administration was going to try to pull down the secrecy curtain on the investigation of Dixon-Yates. The claim of “executive privilege” was to be the vehicle.

Hughes was being questioned by Senator Estes Kefauver, regarding a request for the opportunity to examine all memoranda, documents, and reports pertinent to the Dixon-Yates contract. By this time it was abundantly clear to the Kefauver subcommittee that the chronology released on August 21, 1954, was intentionally incomplete.

Indirectly Hughes moved to “executive privilege.”

“As pointed out to you,” he told Senator Kefauver, “we operate under the President’s general instructions with regard to interoffice and intraoffice staff material, that such material is not to be made public.

“All documents which involve final decisions of public policy have of course already been made public,” Hughes said in an effort to give the impression that the administration had complied with the President’s pledge of frankness. “You [Kefauver] pointed out that you interpreted the President’s statement at a press conference last fall to indicate that they [the “executive privilege” claims] did not apply to this case. I have checked on this matter and I am authorized by the President to state that his general instructions stand but that we, of course, stand on the decision to make every pertinent paper or document that can be made public under this ruling available to you.”

Hughes was trying to give an impression of frankness, while at the same time reserving to the administration the right to withhold any Dixon-Yates information they wished to regard as “interoffice and intraoffice staff material.” Hughes continued:

“A quick review of our files last night disclosed no other papers or documents to be added to the somewhat voluminous releases already made, but we shall make a full and careful search in the next few days to confirm this or to pick out material, if any, which should be added to that previously released.”

Hughes had left the Eisenhower administration an “out” on any omissions of material. Next he sought to absolve Wenzell from any connection with the Dixon-Yates contract.

“We have also reviewed the report which Mr. Wenzell made as an adviser in September, 1953, and find that that had nothing to do with the Dixon-Yates contract and, as a confidential document under the general ruling [of “executive privilege”], therefore cannot be made available to your committee.”

Although Hughes concluded with a promise to “co-operate where we can do so properly,” he made it clear the Eisenhower administration was still going to use the “executive privilege” claim to secrecy if it wanted to refuse testimony or records.

Up to this time, high administration officials had deleted information, twisted the record, engaged in half truths and full deception to obscure the story of the Dixon-Yates contract. Now they were seeking to use the name of President Eisenhower, and give the impression that some constitutional principle was involved in hiding the records.

Senator Kefauver took to the Senate floor to lash out at the concealment of records and testimony in the Dixon-Yates investigation. At the presidential press conference on June 30, 1955, Frank Van De Linden, of the Nashville Banner, forced the issue with President Eisenhower:

“Senator Kefauver charged on the Senate floor yesterday that the Budget Bureau was trying to conceal what he called a scandal in the Dixon-Yates contract negotiation regarding the employment of Mr. Adolphe Wenzell, of the First Boston Corporation,” Van De Linden said. “Senator Knowland says there is no corruption in it, and that he thinks you were just trying to help the Tennessee Valley get some power. I wonder if Mr. Hughes, of the Budget Bureau, had cleared with you his refusal to give Mr. Kefauver the information he was asking down there?”

President Eisenhower answered: “Mr. Hughes came to see me, went over the situation, and I repeated the general instructions—I think that I expressed some in front of this body—that every single pertinent paper in the Yates-Dixon contract, from its inception until the final writing of the contract, would be made available, I think I said, at that time to the press, much less to any committee.”

After seeming to approve an open record, he then qualified it: “Now, I do stand on this: Nobody has a right to go in and just ... wrecking the processes of Government by taking every single file—and some of you have seen our file rooms and know their size—and wrecking the entire filing system and paralyzing the processes of Government while they are going through them.”

The President rambled on: “There are—these files are filled with every kind of personal note—I guess my own files are filled with personal notes from my own staff all through; they are honeycombed with them. Well, now, to drag those things out where a man says to me, ‘I think so-and-so is a bad person to appoint, to so-and-so, and you shouldn’t have him,’ all he had was his own opinion. You can’t drag those things out and put them before the public with justice to anybody, and we are not going to do it.”

President Eisenhower had engaged in a lot of conversation unrelated to the information sought. Now he indicated that he personally believed that officials of his administration had already put out all pertinent documents:

“At the time that I gave those instructions, Mr. Hughes and Mr. Strauss, whoever else was involved, got together every single document that was pertinent to this thing and put it out.”

The President concluded with a complete approval of the Wenzell role: “Now, as far as the Wenzell report, Mr. Wenzell was never called in or asked a single thing about the Yates-Dixon contract. He was brought into—as a technical adviser in the very early days when none of us here knew about the bookkeeping methods of the TVA or anything else. He was brought in as a technical adviser and nothing else and before this contract was ever even proposed.”

President Eisenhower seemed to have no information about Wenzell’s role after January 1954. His comments seemed completely contrary to the testimony already taken before the Kefauver Subcommittee on Antitrust and Monopoly. I followed up the Van De Linden question.

“Mr. President,” I said. “A little while ago you stated that Mr. Wenzell was never called in about the Yates-Dixon contract, and there seemed to be some testimony before the SEC and before a committee that he served as a consultant. I wonder if you were—”

The President cut in to answer that “He [Wenzell] did serve as a consultant at one time.”

“Of Dixon-Yates?” I asked it fast.

“No; I think—now, I will check this up,” the President started. “My understanding is that quickly as the Dixon-Yates thing came up he resigned, and we got as our consultant a man named Adams from the Power Commission here itself to come over and be consultant so as to have him because he [Wenzell] was connected with a great Boston financial company.”

“Mr. President,” I asked. “Had you been informed that he had no connection at all with the Dixon-Yates—?”

“My understanding of it, and it may have been—that part of it there may have been—an overlap of a week or two, there I am not sure of,” President Eisenhower answered. It was difficult to understand he had so little information on the key issue at this late date.

“Would there be any change in your position on that if there was material that he [Wenzell] had served as a consultant on that [Dixon-Yates]?” I asked.

“If he had served as a consultant on that [Dixon-Yates] and brought in a definite recommendation to us I would be very delighted to make that public,” President Eisenhower answered. “But I just don’t believe there is a thing in it about it. However, I will have it checked again.”

Noting the press conference statement, Senator Kefauver fired off a quick letter to President Eisenhower:

“My Dear Mr. President: I have just been informed that in answer to questions of the press today you are recorded as saying that Mr. Adolphe H. Wenzell was never called in or asked a single thing about the Dixon-Yates contract, and that as quickly as the Dixon-Yates matter came up Mr. Wenzell resigned. However, you say you will have it checked again.”

Then Senator Kefauver followed up with a careful chronological study of the testimony of Wenzell and other key officials in the Eisenhower administration which showed that Wenzell had been a consultant on the Dixon-Yates contract. It also showed that high Eisenhower administration officials knew, or should have known, the precise role that Wenzell had filled.

At his next press conference, on July 6, 1955, President Eisenhower said Wenzell’s role was perfectly “proper” in Dixon-Yates, but indicated there was a chance the contract might be canceled.

Senator Kefauver sought an explanation of the Sherman Adams calls to the SEC that had postponed hearings on the financial arrangements for Dixon-Yates at the crucial point before the House took up the appropriation measure.

On July 21, Adams refused to testify before the Kefauver investigating subcommittee. In a letter to Senator Kefauver he stated that he could not give testimony because of his confidential relationship to the President, and also because “every fact as to which I might give testimony either has been or could be testified to fully by other responsible government officials.”

The same day Kenneth Fields, general manager of the Atomic Energy Commission, wrote to Kefauver declining to furnish documents on ground they were “privileged communications within the executive branch.” Earlier, SEC Chairman Armstrong had made his first refusal to testify on his conversations with Sherman Adams.

Senator Kefauver replied to Adams that there had been consistent claims of “executive privilege” that barred the investigators from obtaining the truth.

“No official of the Government,” the Senator wrote, “no matter how high his position can properly claim privilege when a committee of Congress is seeking the facts in respect to corruption.”

Senator Kefauver stated: “In these circumstances a claim of privilege is tantamount to suppression of evidence of possible crime and corruption. Not even the privilege of attorney-client can be used for such a nefarious purpose.”

Sherman Adams hid out behind the protective walls of the White House, unavailable for questioning by Congress and unavailable for questioning by the press. “Executive privilege,” as smoothly practiced by the Eisenhower administration, made it appear that Adams was invulnerable to attack, or even questioning, on any of his activities. Perhaps he was the cold and clean New Hampshire granite of the legend of Sherman Adams. Perhaps he was the dispassionate, efficient barrier against the corrupting influences of personal and political favoritism. But, even if Sherman Adams were the puritanic guardian of good government as pictured, the idea of surrounding any man’s activities with such arbitrary secrecy was a bad principle. It was an open invitation to misuse of power and influence that few could withstand.

At the July 27, 1955, press conference I questioned President Eisenhower to determine what he knew of the activities of Sherman Adams in the Dixon-Yates affair.

“Mr. President,” I said. “There has been testimony of the SEC Chairman [J. Sinclair Armstrong] that Sherman Adams intervened before the SEC, which was a quasi-judicial body. Testimony was given by the chairman on that score.

“The Democrats are contending that there was something improper in intervening with any quasi-judicial body. I wonder if you looked into that and if you have any comment you would like to make about it.”

The President replied that he had “looked into it only to this extent: I am sure that Mr.—head of the commission—has given the entire story. I understand that he is back before the committee. And certainly if he has omitted any details, he should give them now.”

The President continued: “And I believe that Governor Adams has informed the Senate committee that he hasn’t a single detail to add; that the story has been told and that is all there is to it.”

Garnett Horner, the White House reporter for the Washington Star, came in with another question:

“In connection with the Dixon-Yates matter, and in view of the fact that the Senate investigation subcommittee recently brought out the first time the part played in initiating the Dixon-Yates contract by Adolphe Wenzell, of the First Boston Corporation, which corporation later became the financing agent for Dixon-Yates. In view of all that, do you believe your directions last summer for disclosure of the complete record in the case were carried out by the agencies [the Bureau of the Budget and the Atomic Energy Commission] concerned?”