Invisible Power Brokers: The Nixon-Mitchell Law Firm
Frappier, Jon
Introduction Five years ago, long before the watergates opened, Richard Nixon and John Mitchell were partners in the Wall Street law firm, Nixon, Mudge, Rose, Guthrie, Alexander & Mitchell. They...
...The Internal Revenue Service put the icing on the cake with a new ruling allowing the mutual funds to go after the $250 billion pension fund market...
...Director12 an education and research center relating to financial organizations and institutions...
...He was appointed U.S...
...At the moment I am the chairman because they haven't got anybody else...
...3 A close examination of the important government policy-makers (White House advisors and high-level Cabinet officials) shows that many are corporate lawyers who represent various economic interest groups, and it' is not surprising therefore that their policies benefit those interests...
...Pollner also supervised the Department's Alcohol, Firearms and Tobacco Bureau whose Assistant Director of Criminal Enforcement from July 1972 to May 1973 was John Caulfleld...
...In October 1970, Simon was named to the firm's seven-man management committee, and his 1972 earnings reportedly totalled $3 million...
...9. "Nixon: With A Little Help For His Friends" by Bob Fitch in Ramparts Magazine, March 1970...
...and another law partner and Guthrie protege, H. Ridgely Bullock, is president and director of the company...
...Nixon reversed this policy and specifically favored IDS by allowing it to de-register as an investment company which exempted it from SEC regulations concerning capital structure and acquisitions in related financial fields...
...It took nearly a decade of proxy fights, court suits and manage- ment purges before Kirby sent Murchison back to Texas, though in the process IDS had suffered a severe identity crisis...
...Sloane Manufacturing plant in Sun Valley, California with unilateral implementation of their "last and final offer" if they did not accept: the eleven-week strike which centered on working mentation of their "last and final offer" of a $42 average decrease in weekly wages.14 Guthrie is also chairman of the board of UMC Industries, Inc...
...Court of Appeals...
...New York Times, July 28, 1970...
...Cohen had tried to place minimal controls on the mutual fund industry to prevent its bilking of naive and isolated investors...
...Then, in 1966, John Mitchell's firm, Caldwell, Trumble and Mitchell merged with Nixon's firm...
...National Observer, January 19, 1972...
...This is one of the great banks of Europe...
...In the last decade, Ludwig has diversified his holdings into finance, petroleum, mining, hotels, agricultural and defense contracting...
...Ridge Minerals Venture operations seeking and holding concessions for the exploration of oil Rock School Joint Venture shale in Colorado and Utah...
...The Watergate and other investigations have revealed many examples in which secrecy was used to hide information from the public, both in the United States and overseas...
...Martin R. Pollner was the executive director of President Nixon's Advisory Council on Crime and Law Enforcement...
...Two concerns certain to benefit from the decision, American Shipbuilding Co...
...9 Nixon served on two other corporate boards...
...What follows is an attempt to partially lift the veil of secrecy from the activities of Nixon and Mitchell's law firm...
...Cargill, Inc...
...Director Nixon was perfect for IDS public relations since their customers tended to be mid-westerners with mod- erate incomes...
...rather it buys and sells gigantic blocks of bonds and stocks for institutional clients and for its own account...
...Of which $10 million or nearly half the offering was bought by I.T.T., one of the companies in Bernie Cornfeld's IOS empire...
...San Francisco Chronicle, December 18, 1972...
...However, the most interesting aspects of Nixon's relation- ship with the mutual funds occurred after he left the director- ships to begin his campaign for the White House...
...The Cambodian bombing, corporate campaign6 financing, the Pentagon Papers, repression of progressive political organizations and energy crisis discussions by directors of big oil companies are a few examples where secrecy was employed in this manner...
...Their new trading room contains the largest bond quotation board in the world, rows of open cubicles for 186 traders and salesmen and the newest electronic communications systems...
...multinational companies who need financing from the European and Asian money market...
...Nixon also was a director of the Harsco Corporation, a metal fabricating and construction company with annual sales reaching $300 million...
...He is a vice president and director of United Cablevision, Inc., and Cypress Communications Corporation...
...Several articles in this Report discuss other corpo- rate lawyers, their firms, clients and their government/business relationships...
...Warner-Lambert Pharmaceutical's 1970 merger with the Parke-Davis drug company pushed their annual sales over the $1 billion mark...
...Banque de Paris had made Liquidonics pay dearly for its short-term loan - which would have been illegal in the United States, since the company put up no collateral...
...They may wish they had never left - not because they changed their tactics when they went to Washington - but because they got caught...
...The ineffectiveness of the action was highlighted later when a Cargill trader admitted to a House subcommittee that he could not remember whether he was still on probation...
...An opening was finally arranged by Bobst who convinced the partners at Mudge, Stern, Baldwin and Todd that Nixon's presence would bring in new clients and boost its fees: The first new client was Pepsi-Cola International, brought in by Nixon's Friend Donald M. Kendall...
...Law Firm Changes as Nixon Departs," The Washington Post, November 24, 1968.11 GENERAL PRECISION EQUIPMEN T (* 51% owned LEGEND: Dollar amounts represent contributions we know of to Nixon's 1972 campaign...
...26 Officials of the Securities and Exchange Commission and Federal Reserve Board reportedly questioned the legality of Liquidonics' overseas borrowing, but decided not to try to block it after meeting with Mudge, Rose lawyers...
...For more on Garment, see box entitled "The Lawyers Behind Watergate...
...Simon will essentially run the Department, since Treasury Secretary George P. Shultz is now heading the Cabinet-level Council on Economic Policy...
...Insiders noted that Sears, who dispensed federal patronage jobs for Nixon, became disliked by Mitchell during the 1968 campaign, and was suspected of leaking political information about the Administration to the press...
...Of the $900,000 in legal fees for 1972, not surprisingly, $700,000 went to Mudge, Rose, Guthrie, and Alexander...
...In 1963, Guthrie led the company out of the money-losing auto business and, along with Gerald Ruttenberg (now chairman), built up the production of auto parts, gas turbines, garden tractors, valve pumps, compressors, generators and STP into annual sales of $879 million (1972...
...Mitchell's specialty was municipal bond law...
...Who's Who in Government, 1972-73.8 Alleghany Corporation, controlled by one of the nation's wealthiest men, Allan P. Kirby, found itself in a fierce economic interest group battle in the mid-1950s and early '60s when the Murchison brothers from Dallas decided to move some of their Texas oil money into Eastern investments...
...Miami) - filed suit in 1968 against Nixon, three other law firm partners and the Irving Trust Co...
...The wheat and milk scandals are only publicized examples of what goes on daily throughout the system...
...Salomon Brothers underwrites and trades stocks and bonds for major corporate clients...
...John P. Sears, one of the law firm's youngest partners, worked on delegate recruitment for the 1968 Republican convention because of his knowledge of local politics...
...After his election, some of his law partners were rewarded with government positions: -John N. Mitchell served as Nixon's campaign manager and chief political strategist for both the 1968 and 1972 campaigns...
...In recent years, their greatest increase in earnings has come from U.S...
...Guthrie handles the corporate accounts and was the chief architect behind the firm's rapid expansion in the 1960s...
...John Mitchell's job at the law firm was to certify municipal bonds...
...First, he drafted the charters for 150 secret fund-raising committees so that large contributors could avoid the gift tax by splitting up their donations...
...John H. Alexander, the law firm's tax specialist, chaired Nixon's task force on business taxation...
...6. Drew Pearson & Jack Anderson, Washington Post, October 28, 1968...
...When I.T.T...
...go and see them.' " 26...
...In the case of Liquidonics Industries, the Nixon firm not only performed the functions mentioned above, but they, with the help of their banking client, actually took control of a company they had assisted in raiding...
...May 7, 1972...
...Before looking specifically at Nixon and Mitchell's law firm, it will be helpful to consider generally the role of the corporate law firm in the U.S...
...One was the Mutual Life Insurance Company of New York (MONY's 1972 assets were $4.1 billion, ranking it 11th in size) where he sat at the board table with representatives from the major New York banks, investment houses, law firms and industrial corporations...
...of South Africa to create two jointly-owned investment companies with a portfolio of French and South African stocks valued at $15 million.16 Among the Banque's most important customers are the U.S...
...Joseph C. Goulden, The Superlawyers: The Small and Powerful World of the Great Washington Law Firms, David McKay Co., 1971...
...2 Salomon Brothers has a pragmatic and self-serving interest in New York University...
...McLaren was finally forced to leave his anti-trust position, and received a federal judgeship in Chicago...
...Liquidonics' president, N. Norman Muller, went to Studebaker-Worthington (whose board chairman at the time was law partner Randolph Guthrie) to inquire about either merging with Liquidonics, or helping finance Liquidonics' takeover of UMC...
...2 5 In 1971, Rep...
...and Herbert Kalmbach, was the control and handling of $1,098,000 in cash and $570,000 in checking accounts left over from the 1968 Presidential campaign...
...All this requires legal counsel and Mudge, Rose provides a good share of it...
...El Paso Natural Gas Co.* -- Stone & Webster, Inc.* -- General Cigar Co.* -- ITT* -- U.S...
...It had its old established clients, but it needed some new blood if it was going to keep up with the Wall Street giants...
...Guthrie added that UMC's new European owners "are first class people...
...The "mantle of law" perhaps makes it easier for them to exploit the wealth and labor of others...
...Forbes, March 1, 1970, p. 42...
...aid.' Hanna got what it wanted, McCloy collected his fee and Brazil was plundered...
...Liquidonics officers and directors immediately resigned their positions at UMC to make way for Randolph Guthrie as chairman of the board and his law partner H. Ridgely Bullock as secretary and director...
...Nixon, who had known and admired the dictator's anti-communism, was retained to force the oldest son, Ramfis, to share the loot he had deposited in secret Swiss bank accounts.' Much of Nixon's international travel involved politicking: during his efforts to expand the Pepsi-Cola empire overseas, Nixon met with Ambassador Henry Cabot Lodge in Saigon, General Chiang-Kai-shek in Taiwan and many other heads of state to maintain his political contacts and public visibility through foreign policy statements...
...The Nixon name and contacts were good public relations for the companies, some of which became new clients for the law firm...
...With his political career at its lowest point, Nixon swore never again to run for public office...
...He does not merely attend annual board meetings, but in two cases he is board chairman which puts him in a key policy-making position for those corporations...
...Government, municipal and corporate bonds, and not the stock market...
...Irving Trust deals primarily in large corporate accounts and it services its multi-national clients through offices in the capitalist world's principal financial centers...
...IDS), the nation's largest investment advisor and mutual fund distributor...
...In 1963, the government had found Cargill guilty of manipulating the wheat futures market...
...I.T.T...
...They are inaccessible to the small investor since each bond is usually priced at $1,000 or more...
...The two had met during Navy basic training courses, but their friendship did not blossom until Nixon came to Wall Street in 1963...
...Nixon held a press conference in Cairo in which he praised Nasser's sound and admirable policies (indicating a softening of his policy toward the Soviet Union...
...In 1963, it absorbed the Wall Street firm of Dorr, Hand, Whittaker and Weston which represented railroad interests and also the Washington, D.C...
...2 9 Client's Counsel in the White House It must bring a smile to a corporate executive's faces when two of their lawyers take over the White House and the Justice Department...
...Harsco overseas operations are rapidly expanding with new plants in Mexico, Puerto Rico, Venezuela, India and South Africa...
...Nothing happened at Studebaker-Worthington...
...Nixon's law firm is, of course, highly qualified for this task...
...Mudge, Rose's financial clients include two commercial banks (Irving Trust Company and Banque de Paris et des Pays-Bas) and three investment houses (Salomon Brothers...
...8 Nixon was one of the more active law partners in the corporate board room...
...it was the center of financial power and thus a stronghold of political power...
...Salomon Brothers also acts as a financial advisor on mergers and other corporate transactions...
...Former chairman of Irving Trust, George A. Murphy is a trustee...
...He escorted the U.S...
...After Nixon's 1968 election, the law firm picked up the following state and municipal clients: Nebraska, Kentucky, New Jersey, West Virginia, District of Columbia and the Virgin Islands...
...Since he had been trained as a lawyer, a Wall Street law firm seemed like the best institution in which to advance...
...Washington Post, December 7, 1968...
...It is not surprising that Wall Street lawyers participated extensively in the formation and direction of the Central Intelligence Agency - with CIA director Allen Dulles of Sullivan & Cromwell being only the most notable example...
...The lawyers in these firms play a specialized cadre role in protecting the interests of the class they represent...
...Capitalist expansion often requires corporations to raise new capital through the issuing of securities (stocks, bonds and other I.O.U.'s...
...National Bulk Carriers* - owned by Daniel K. Ludwig whose personal fortune (close to $1 billion) was built on petroleum tankers in 1940's and '50's...
...Irving Trust Company of New York, the 14th largest U.S...
...we didn't know we were going to make a deal here until December 24 [1969], when we actually closed [it...
...2 3 The Law Firm in Corporate Battles Law firms play an important role in one of the basic steps in creating a monopoly - the merging, takeover and raiding of corporations...
...capitalist system...
...Wall Street Journal, May 9, 1973...
...In 1973, the elite who control and manage the corporate property threatened 750 striking workers at Susquehanna's R.&G...
...Whereas the law partners, as legal counsel and corporate directors, advise and assist corporations in developing overall policy, and as appointed and elected officials formulate government pol- icy, there are no outsiders participating in the decisions of the law firm itself...
...of New York to borrow $15.1 million to buy the extra shares...
...The Department of Agriculture's Commodity Exchange Authority, after seven years, finally decided to place Cargill's top officers on probation for their crime...
...Ambassador to Brazil under Truman, assisted in the formation of the Flying Tigers Airline...
...Mitchell and His Law Firm," The New York Times, May 7, 1972...
...Morris Udall (D-Ariz...
...Corporate lawyers move freely in and out of government "offering" their services to draft legislation, negotiate treaties and chair advisory commissions...
...Nixon called it the "fast track" and the fastest track of all was Wall Street...
...According to a New York Times article (January 17, 1970) about Nixon's New York City inner circle, George A. Murphy, Chairman of Irving Trust, said, "I'm an admirer - I like to think of him as a friend...
...Lions in the Street, op...
...government, the Brazilian military overthrew Goulart...
...These various transactions require the legal advice and expertise of a corporate law firm, and moreover the success of a corporate law firm (i.e., its fees) depends largely on its ability to maintain important financial clients (a bank, investment house or brokerage firm), since every corporate loan or other financial arrangement transacted requires a law firm to help negotiate and draw up the contracts...
...In search of a new image, IDS Vice President George MacKinnon went to his old friend Richard Nixon...
...Besides the 812 percent interest rate on the $40.6 million loan, the Banque de Paris charged $3.8 million in "placement fees...
...Los Angeles Times, July 30, 1971...
...Once the investment house agrees to underwrite the securities, it obtain the capital required by the corporation through a short-term loan from the commercial bank or insurance company with which it has a working relationship...
...Wall Street Journal, January 2, 1973...
...Two months after Mitchell took office, the suit was dropped...
...But these reasons are at best, secondary...
...2 2 Other Mudge, Rose clients have an interest in New York University...
...is one of the largest privately-held multinational companies engaged in grain trading and other agricultural ventures...
...This will help us both understand the Nixon administration and give us some insight into how economic interest groups and corporate law firms seek to carry out their interests...
...Postal Service announced its $250 million bond issue (the first in a $10 billion authorization as a result of the reorganization of the Post Office into a semi-private corporation) and revealed that it would retain Nixon and Mitchell's former law firm to handle the legal work...
...Corporations argue that secrecy is required to protect themselves from competitors...
...John Mitchell was a municipal bond lawyer and after he went to Washington, Mudge, Rose brought in new bond lawyers to maintain their expertise...
...Attorney General during Nixon's first administration...
...Even though there are undoubtedly many more clients (Mudge, Rose will not reveal a complete list), the chart suggests the outline of an economic interest group which coordinates its activities in other ways...
...He had to choose an established and respected firm, but one whose partners would not overshadow him...
...The activities of the corporate law firms are kept obscure partially because of the important role it plays in servicing capitalism...
...After his defeat by Kennedy in 1960, Nixon had returned to California where he became a counsel with the Los Angeles law firm of Adams, Duque and Hazeltine...
...Liquidonics Industries, Inc...
...they belong to the same social clubs as the top corporate executives - and often they are members of America's wealthy families which has given them access to extraordinary political power over the years...
...They provide the legal weaponry for the battles between corporations...
...It was a major participant in the Soviet wheat sale...
...In 1965, Banque de Paris joined the Anglo-American Corp...
...In response to a shareholder's concern over legal fees at the 1973 Susquehanna annual meeting, Guthrie answered, "They [Susquehanna] have got more litigation than any company I ever saw in 42 years of business...
...An example will clarify this process: The Hanna Mining Company had lost its iron ore concessions in Brazil under the nationalist Goulart administration...
...New York Times, May 7, 1972...
...2 To many Americans, the economic and political systems function as two distinct entities, and are often viewed as counter-balancing forces...
...Besides his directorship on Mercedes-Benz of North America, and Iroquois Industries, Guthrie was chairman of the board of Studebaker-Worthington from 1963 to 1971 and chairman of the executive committee from 1971 to the present...
...1 0 Nixon was not the only Mudge, Rose partner to serve as a corporate director...
...Lincoln's corporate affiliations have included a vice presidency of defense contractor Litton Industries, president of its subsidiary Monroe Calculating Machine Company, and director of Barnes Engineering Company, Shelter Resources Corporation, Pacific Tin Consolidations Corporation, and ITEL Corporation...
...Opinion polls demonstrate that the more exposure these type of incidents receive, the less confi- dence people have in the basic institutions of U.S...
...4 Nixon joined the firm in mid-1963 and on January 1, 1964, the name became Nixon, Mudge, Rose, Guthrie and Alexander...
...The money for this purchase came from a public offering of $25.1 million in convertible debentures (I.O.U.'s convertible into stock...
...Another international legal problem arose in 1966, when the illegitimate sons of assassinated Dominican Republic dictator Rafael Trujillo tried to get part of the fortune their father had plundered...
...Investors Variable Payment Fund, Inc...
...The second operation which also involved France Raine, Jr...
...circuit of the U.S...
...By 1968, he had become a director of six companies, allowing him close contact with the corporate elite...
...In an attempt to stop the "national security" leaks, Sears' phone was tapped even though he claims he did not have access to such information...
...When Liquidonics signed on the dotted line, their venture had cost them $16.6 million on the stock sale to the bank (the difference between what they paid the stockholders and what the bank paid them), $4.7 million in placement fees, interest on the loans and their own legal expenses...
...The firm's legal problems started when its eyes got bigger than its pocketbook...
...Salomon Brothers' earnings for 1972 were $37 million, second only to Merrill, Lynch, Pierce, Fenner & Smith within the securities industry...
...but what is interesting is that Liquidonics then went to two banks whose long-standing legal counsel was Guthrie's law firm, Mudge, Rose...
...And in February 1973 he took over the chairmanship of the Federal Home Loan Bank of New York, one of twelve regional banks set up by the government to regulate the financing of home mortgages...
...An asterisk (*) indicates that the company is mentioned in the article...
...Thomas W. Evans is a Nixon fundraiser and co-director of United Citizens for Nixon along with Washington attorney Charles Rhyne...
...They made a "gift" of $3 million for 10 Law Firm Client Nexus The accompanying chart of Nixon-Mitchell law firm clients, demonstrates that the law firm (currently Mudge, Rose, Guthrie & Alexander) not only has clients in diverse sectors of the economy, but that the clients have inter-relationships with each other...
...The law firm's overseas activities were also accompanied by expansion into other areas...
...in Denver...
...Banque de Paris et des Pays-Bas (Suisse) is the Geneva subsidiary of Paribas, France's largest privately-owned bank (assets of $2.4 billion in 1973...
...Finally, after nine months and an $80 million debt, Liquidonics controlled UMC...
...The funds are controlled by Investors Diversified Services, Inc...
...bank with assets at $7.4 billion (1972), is controlled by the multi-bank holding company, Charter New York Corporation...
...In September 1968, Presidential candidate Nixon sent a confidential letter to 3,000 Wall Street elite in which he attacked the Johnson administra- tion bureaucrats who "sought wide-sweeping new regulatory powers over the mutual fund industry . . ." The Nixon aide who helped draft the letter was with the Washington law firm, Gadsby and Hannah, IDS's registered lobbyist...
...Paribas representatives sit on the boards of 250 French and foreign companies with investments in Africa and Southeast Asia...
...whose combined assets totaled $6.1 billion in 1968...
...8. Business Week, July 22, 1972, p. 23...
...Croix and San Juan, Puerto Rico...
...This is not some, you know, fellow sitting there in some little hole-in-the-wall bank or something...
...The secrecy of corporate dealings obscures some of the subsequent events, but the following is known...
...Wall Street Journal, December 14, 1966...
...Organ- ized as a partnership and utilizing the attorney-client privilege, the corporate law firm sidesteps most of the legal requirements for public disclosure...
...Milton C. Rose, the semi-retired senior partner specializing in trusts and estates, was very active outside the law firm...
...The Moneymen Need A Lawyer Lawyers are not only partners in a firm, but they are partners with other members of the corporate elite in controlling the economic system...
...When Guthrie was asked about Muller's choice of Banque de Paris he said, "I knew Muller - I'd met him somewhere - and Muller knew the Banque de Paris...
...The Wall Street Journal, May 14, 1973...
...also retained Mudge, Rose from 1969 to 1971 to do legal work for its subsidiaries Continental Baking Co., Hartford Fire Insurance Co., I.T.T...
...According to William R. Salomon, managing partner of the firm, during an average day in fiscal year 1972, their inventory totalled $2.4 billion, and their total annual volume of purchases and sales was $201 billion...
...Lions in the Street: The Inside Story of the Great Wall Street Law Firms, by Paul Hoffman, Saturday Review Press, 1973, p. 109...
...The examples not footnoted are from New York Times, May 7, 1972...
...4. Kendall was indebted to Vice President Nixon for getting Khruschev to drink at Pepsi at a trade pavillion in Moscow in 1959...
...Probably less than a hundred corporate law firms handle the legal work for this nation's leading financial and industrial corporations...
...Guthrie's firm then drew up the contracts, just as they had done eight months before with the original loan...
...Arthur H. Becker, an admiralty law expert, worked on a Nixon study of American shipbuilding...
...Whatever advantage Liquidonics gained from the takeover of UMC, the debt proved more than it could handle...
...The following sections will attempt to identify these various functions by looking at the activities of the partners and clients of Nixon and Mitchell's former law firm...
...After Nixon's nomination, Sears became his liason to Vice Presidential candidate Agnew, and subsequently joined the White House staff as a deputy counsel to the President...
...To show that there were no bad feelings, Banque de Paris loaned Liquidonics $7.0 million in Eurodollars for working capital...
...The story behind this company is covered below under the role of law firms in corporate battles...
...Finally, after Mitchell again removed himself from the official decision, Kleindienst made a settlement which allowed I.T.T...
...1 9 While most Wall Street firms were retrenching due to a stagnating stock market, Salomon Brothers was moving into its ultra-modern $8 million headquarters at One New York Plaza...
...Hornblower and Weeks-Hemphill, Noyes...
...Lions in the Street) -Pepsico and six other soft-drink companies had been charged in 1971 with the anti-trust violation of restricting bottlers' sales...
...The managing underwriter of the bond issue was the law firm's long-time client Salomon Brothers...
...5. The Resurrection of Richard Nixon, by Jules Witcover, G. P. Putnam's Sons, 1970, p. 43...
...In December 1964, Nixon became a director of four large Minneapolis-based mutual funds (Investors Mutual, Inc...
...New York Post, Jack Anderson, January 7, 1970...
...Postal Service* -- Cargill, Inc.* - contributed $12,000 to Nixon, -- Missouri-Kansas-Texas Railroad (Katy Industries) -- Governments of District of Columbia, Kentucky, Nebraska, New Jersey, Virgin Islands, West Virginia, Wisconsin* Sources: In addition to the sources listed in this article we used the following additional sources in compiling this chart: Paul Hoffman, Lions in the Street: The Inside Story of the Great Wall Street Law Firms, Saturday Review Press, 1973...
...2 4 When merger negotiations were cut off by the UMC directors, Liquidonics decided to gain control by going directly to UMC stockholders to make them an offer they could not resist...
...He was president and director of Straight Enter- prises, Inc...
...The Boston group has now filed a $16 million counter claim charging that Salomon Brothers "held itself out as an expert and sophisticated in the buying and selling of blocks of stocks and as a company in which Bristol Company and the public could place trust and confidence," and that Salomon owed Bristol and its clients a fiduciary duty to complete the transactions and make payment...
...Pepsi-Cola was having trouble competing with Coke, but after the Khruschev incident Pepsi sales increased...
...In June 1971, Guthrie and Ruttenberg became directors and took control of the financially troubled Susquehanna Corp., whose interests include rock wool insulation, plastic plumbing pipes, uranium mining and defense work...
...Corporations rely on investment houses to underwrite this financing and distribute the securities to other investment houses and brokerage firms who in turn sell them to their institutional and individual customers...
...He emphasized that Egypt "is free to obtain technical assistance from any country, be it the United States, the Soviet Union or any other country...
...Nixon's first four years in the White House had brought the law firm a heap of business...
...Secrecy is one of the important tools used by business and government organizations to mislead people and thus to maintain power...
...This division currently holds a $50 million contract to modify and re-equip the Tank Arsenal of Iran...
...These committees were established by Robert F. Bennett, President of Robert R. Mullen & Company where E. Howard Hunt was employed before joining the White House staff...
...Mudge, Rose is representing him in a suit filed by the Securities and Exchange Commission seeking an injunction against securities law violations and the removal of the Westgate-California conglomerate from Smith's control...
...The company grows sugar cane in Florida and Jamaica and hired the law firm in 1965 to be its registered lobbyist to gain required allotments and quotas...
...Salomon Brothers filed an $8.3 million suit against the investment group Boston Company and its two subsidiaries John W. Bristol Company and Boston Company Institutional Investors charging that the defendants had prior knowledge of fraud at Equity Funding when they placed orders for sale of Equity Funding securities with Salomon Brothers...
...owned by William Pawley who is a reactionary friend of Nixon, He supported Goldwater, was U.S...
...and I.T.T...
...So George MacKinnon and IDS gave themselves a pat on the back for choosing Nixon...
...He served as counsel for many local and state governments, and worked for Governor Rockefeller in preparing New York State bonds to finance a housing project...
...The following day the trading of Equity Fund was halted by the New York Stock Exchange on Salomon's initiative...
...The company's Bower-McLaughlinYork Division in York, Pennsylvania is a leading supplier of heavy vehicle (tank, gun and missile) equipment to the Department of Defense...
...And, of course, the workers who produce the corporate profits for Guthrie and others were not involved in making decisions that affect the company's future...
...Wall Street Journal, October 6, 1972...
...and a director of the client Warner-Lambert Pharmaceutical Company...
...And one of the most secretive of U.S...
...In the five years that Nixon was on Wall Street, the number of lawyers in the firm swelled from 57 to 105, placing it among the nation's ten largest in size...
...Also on the board of directors was Arthur F. Burns, who Nixon later appointed chairman of the Federal Reserve System...
...Wall Street Journal, May 23, 1973...
...When Nixon and Mitchell moved into government, the law firm's name was changed again to Mudge, Rose, Guthrie and Alexander...
...soft drinks in the Soviet Union...
...He contributed at least $50,000 to Nixon -- Noranda Mines Ltd...
...President Kennedy had dissolved the Board when he took office, but after the Bay of Pigs invasion failed, it was reconstituted with increased power to investigate the overall intelligence effort...
...With the threat of bankruptcy hanging over them, Liquidonics accepted Banque de Paris' $57.8 million offer to purchase its UMC stock, which allowed Liquidonics to pay off its debts...
...3 2 Jon Frappier Footnotes 1. The Hanna Industrial Complex, by Edie Black and Fred Goff, North American Congress on Latin America, p. 13...
...for their attempt to force the company to reorganize...
...Guthrie puts it, "we'll13 obviously expand the board, put good people on it...
...and frequently they serve as advisors and coordinators during these corporate conflicts...
...During President Nixon's re-election campaign, 17 Salomon Brothers partners contributed a total of $100,000 and one of those partners was 46-year-old millionaire William Edward Simon who alone gave $15,000...
...And, if transactions become suspect by government agencies, the corporate law firm is expected to use its influence in Washington to stop investigations and prosecutions...
...It is common for lawyers to become corporate directors, though the reasons vary - from the corporation's desire to have its legal counsel in closer contact with the company's activities, to a law firm's intent to control a corporation either on its own or a client's behalf...
...Atlas Sewing Centers, Inc...
...Pollner's deputy director was convicted Watergater G. Gordon Liddy...
...The Washington Post, December 16, 1973...
...charged impropriety when the U.S...
...Washington Star-News, September 25, 1973...
...Although officially no longer counsel to the corporations, Nixon and Mitchell are now indebted to their clients through campaign contributions...
...His latest investments are in the Amazon where he has the support of the Brazilian dictatorship...
...These corporate lawyers are instrumental in the behind-the-scenes work of facilitating the growth of giant corporations at home and its expansion overseas...
...The following is a list of known Mudge, Rose clients in addition to those listed on the chart...
...The Boston groups had placed an order for sale of 456,000 shares on March 26, 1973 (at $17.50 per share...
...February 23, September 23 and October 15, 1973...
...22...
...Also New York Times, April 4, 1968...
...Wall Street Journal, May 23, 1973...
...Nixon seems to have befriended Harsco's finance commit- tee chairman, Richard J. Buck, who - besides contributing $25,000 to Nixon's 1968 campaign - also offered to sell him a two-acre tract at Estate Blue Mountain, located next to David and Laurence Rockefeller's golf course on the Carribean Island of St...
...In 1970 he got a chance to put his law practice behind a badge when Nixon named him director of the Treasury Department's Office of Law Enforcement...
...The7 Law Partners in Washington When Nixon decided to enter the 1968 presidential race, Mudge, Rose became the base for campaign operations...
...3. William Nelson Cromwell, Arthur H. Dean, p. 75...
...These firms are relatively small, tight-knit organizations whose lawyers branch out into all important aspects of economic and political life...
...The transition from corporate lawyer to intelligence agent is not a difficult one since both involve covert operations and intelligence-gathering...
...Irving Trust had also handled the financial and administrative work in tendering the offer to stockholders...
...In December 1972, Nixon appointed Simon Deputy Secretary of the Treasury, the second ranking position in the Department...
...In 1970, he joined Charles Colson's law firm, Gadsby and Hannah...
...Croix...
...The legal work for all these operations is done by Mudge, Rose, Guthrie & Alexander...
...When questioned at the time about his role in the firm, Nixon announced, "I shall engage in matters relating to the Washington and Paris offices of the firms"' implying continued interest in politics and foreign policy., Nixon wanted to expand the firm into the area of international law and trade where his contacts abroad could be best utilized...
...World Communications...
...In spite of these successive defeats, Nixon's four years in Congress and eight years as Vice President had won him powerful connections and influence...
...Shortly thereafter, a prominent Republic lawyer, John J. McCloy (partner in the Rockefeller- associated law firm of Milbank, Tweed, Hadley and McCloy, and a former Board Chairman of the Chase Manhattan Bank) was retained as Hanna's counsel...
...The Justice Department's anti-trust chief, Richard McLaren, had tried to block the merger...
...This, however, did not end the manuvering...
...for government, the argument is based on national security...
...C. Arnholt Smith - long-time San Diego friend and contributor to Nixon...
...1 1 Guthrie is the most active partner in outside9 corporate activities...
...2. New York Times, November 3, 1971...
...IDS interests were further served when Nixon ordered the Justice Department to file a supporting brief with IDS before the SEC, arguing that financial institutions be allowed to join the New York Stock Exchange, thereby saving commissions on their stock transactions that would normally go to the brokerage firms...
...The chart lists only those clients which are inter-related with another client or have a director from the law firm on their board...
...Blair & Company - a national sales representative for television and radio stations to sell their air time to national advertisers...
...The Nixon-Mitchell Law Firm Up until 1963, Mudge, Stern, Baldwin & Todd was a stodgy old Wall Street law firm...
...According to one study, while partners of Mudge, Rose, Guthrie and Alexander held directorships in ten client companies, the firm received $1.6 million in fees from those companies...
...Partners in these firms are trained primarily at Harvard, Yale and Columbia law schools...
...The partner's name was Charles W. Colson...
...These are the risks taken by the representatives of the powerful economic interest groups when they take up positions in government...
...He asked me, when Studebaker turned him down, whether or not I thought the Banque de Paris might be interested in making him a loan...
...Ambas- sador to Brazil, Lincoln Gordon, to the office of Brazilian President, Castelo Branco, to ask for a restoration of the concession as one condition for receiving U.S...
...but, when UMC stockholders offered to sell 2,300,000 shares, Liquidonics went to another Guthrie client, the Irving Trust Co...
...Investor Stock Funds, Inc...
...He was also a director or trustee of numerous foundations and colleges - among them the Farfield Foundation, which served as a conduit for Central Intelligence Agency funding of favored projects...
...In 1972, with Nixon in the White House, Pepsi was awarded the sole franchise to distribute U.S...
...Sources The principal sources for this article include the following: The New York Times, June 24 and November 8, 1968...
...wanted to merge with the Hartford Insurance Co., Justice's anti-trust chief Richard McLaren tried to block it...
...He became co-chairman of the Republican National Committee...
...The company was recently bought out by Ed Ball, Florida banker for the DuPonts...
...General Cigar had large operation in Cuba until they were seized by the revolutionary government in 1960...
...Well,' I told him, 'they're in business...
...Simon joined Salomon Brothers in 1964 when he began playing a key role in the firm's expansion...
...New York Times, May 8, 1973...
...Billions of dollars of these bonds are issued every year, and when they mature (come due) the municipal issuer redeems them through tax revenue or other income...
...Europe, Inc...
...IDS, in turn, is controlled by the Alleghany Corporation, a gigantic holding company whose other interests included the New York Central, Missouri Pacific and Baltimore & Ohio railroads...
...Bliss Ansnes is a board member of General Cigar Company whose brand names include Robert Burns, White Owl and Tiparillo...
...Liquidonics now needed money to make an attractive offer to the UMC stockholders for their shares...
...And in 1963 Nixon definitely needed help...
...The decision he faced, then, was how best to capitalize on this position...
...but, after Attorney General Mitchell disqualified himself "in order to avoid any possibility of or appearance of conflict of interest," Deputy Attorney General Richard Kleindienst stepped in to rule in favor of the merger...
...Bullock is also chairman of the board of Eastern Air Devices and a director of First Washington Securities Corp...
...Law partners as corporate directors...
...Studebaker-Worthington in January 1973, bought 1,800 former Sinclair service stations plus oil reserves and pipelines from Atlantic Richfield Company for $157 million...
...In the first year of his administration, Nixon announced a ten-year $3.8 billion subsidy program to finance the shipbuilding industry...
...and Trend Exploration Ltd...
...One of its oldest clients was Warner- Lambert Pharmaceuticals whose chairman, vitamin king Elmer Bobst, had a personal stake in finding a job for his old friend Richard Nixon...
...In 1964, with the assistance of the U.S...
...Senior partner and tax specialist John H. Alexander is a director of the law firm's client Stone & Webster, a large construction and financial concern...
...It wanted to take control of UMC Industries, Inc., a St...
...Through the company's 52%-controlled Pasco, Inc., an investment firm (formerly Pan American Sulphur Co...
...Given the secrecy of their operations, the information is far from complete...
...One explanation for Mitchell's successful management of Nixon's campaigns is the numerous contacts he had made with city and state officials through his work on municipal bonds...
...In December 1971, President Nixon appointed Cargill vice president William Pearce to be his deputy special repre8am KUdiwb14 sentative for trade negotiations...
...New York Times, November 22, 1972...
...Elmer Bobst, of Warner-Lambert is not only a trustee, but also gave $30 million to New York University's newly dedicated Elmer H. Bobst Library...
...Udall said the legal fees will amount to millions...
...7. Ibid...
...He then decided to challenge Edmund Brown for the 1962 governor's race...
...He liked New York...
...Wolf Joint Venture -- Talisman Sugar Corp...
...6 There is no record, however, that Nasser ever retained Nixon's law firm...
...corporations to counter communist propaganda...
...managing underwriter for new capital...
...Circles represent Nixon's law firm partners...
...The Penn Central Railroad, before its bankruptcy, had retained Mudge, Rose in an attempt to obtain a $200 million loan guarantee from the government...
...Investors Selective Fund, Inc...
...Franklin B. Lincoln, Jr., a former Assistant Secretary of Defense under Eisenhower, handled the transition from the Johnson to the Nixon Administration...
...By studying corporate law firms it becomes clear that there is only one power system and today it is controlled by powerful economic interests...
...7 (For more on Banque de Paris and Irving Trust see below under "Law Firms in Corporate Battles...
...Enter Mudge, Rose and its financial clients...
...Recently, Paribas established an international partnership arrangement with the Bank of America in which both banks operate together in the Eurodollar bond market in Europe and the Asian dollar market in Singapore...
...More recently, McCloy emerged as the legal counsel for major American, British and French oil companies in their negotiations with eleven oil producing nations, most of them from the Middle East...
...Arthur Dean, senior partner in the powerful Wall Street firm, Sullivan & Cromwell, puts it well in his biography of William Cromwell (co-founder of the firm), when he relates that "lawyers can more readily than many executives effect temporary total or partial withdrawals from the daily routine to attend to public affairs or matters of partic- ular personal interests...
...Louis company which had increased its 1967 sales to $124.3 million through diversification from matches into vending machines and military weapons...
...institutions is the corporate law firm...
...According to New York University President, James H. Hester, "It's primary objectives will be to help develop new capacities for professional management, to explore new approaches for effective self-regulation and selfdiscipline in the industry and to improve the strength and resiliency of financial markets...
...Liquidonics had planned to repay these short-term loans with long-term Eurodollar loans, but the financing could not be arranged...
...Work on client problems began immediately after Nixon and Mitchell took office.30 -El Paso Natural Gas, while battling an anti-trust suit, had paid the law firm $770,000 in legal fees (1961-67...
...When Nixon took office, he replaced the Securities and Exchange Commission (SEC) Chairman, reformer Manual Cohen, with his old-time friend Homer H. Budge...
...American Shipbuilding Co.* - the company and its chairman George M. Steinbrenner III contributed $100,000 to Nixon's campaign...
...A spokesman for the Federal Trade Commission indicated it would be a long time before a decision was made...
...President Nixon, after initially supporting it, later withdrew his support when he realized the loan was insufficient to prevent bankruptcy (for more on the Penn Central see elsewhere in this issue on Stans...
...Joseph C. Daley served as a consultant to Attorney General Mitchell and the Justice Department...
...Congressional Quarterly, August 27, 1965, p. 1743) -- Mitsui - one of the largest Japanese financial, industrial and trading combines...
...was a small Westbury, New York electronics company which had boosted its sales from $590,000 in 1962 to $9.4 million in 1967 by taking over smaller concerns...
...cit., p. 123...
...Attorney Robert Morgenthau ahd also begun a preliminary investigation of Guthrie's involvement, but the other Mudge, Rose partner in Washington, Attorney General John Mitchell, fired him...
...The very wealthy have a special interest in municipal bonds because they offer a secure investment at a fixed interest rate and they are exempt from income tax...
...to keep the insurance company...
...But Nixon's home state refused to back him by 300,000 votes...
...2 7 The Lucrative Business of Municipal Bonds Municipal bonds are debt securities issued by cities and states to finance public projects...
...First, Liquidonics went to Banque de Paris et des Pays-Bas in Geneva, and secured a $40.6 million loan which they used to pay UMC stockholders $30 a share (almost double the market value) for up to 2,158,000 shares (22 percent of UMC outstanding shares...
...See charts on law firm clients...
...Leonard Garment was Nixon's expert on minorities and civil rights during the campaign and at the White House under the title of Special Consultant to the President...
...In May 1973, Sears surfaced as the attorney for White House cop John Caulfleld when he testified at the Watergate hearings...
...Udall quoted a Postal Service official as saying the five underwriters of this bond issue had told the Service that Mudge, Rose, Guthrie and Alexander "had to be hired...
...Nixon appointed him to the Foreign Intelligence Adivsory Board, a group composed primarily of the corporate elite which review government intelligence activities and make recommendations to the President...
...Two of the tasks he performed for Nixon were discovered during the Watergate investigation...
...Not to exploit these advantages would, by his standards, have been the sign of a defeated man...
...As of 1973, Guthrie is still chairman and Bullock has become president...
...This group has been responsible for many acts of repression against the political left, such as the raid against the Black Panther party office in Seattle in 1970...
...Rose was secretary and director of Accion International, a "self-help" program for Latin America's urban slums sponsored by U.S...
...Eastern Republicans had convinced Nixon that to stay alive politically he needed a base of operations which could serve as a sanctuary in 1964 and a platform in 1968...
...His first trip in 1963 included the Middle East where, according to the London Jewish Telegraph, Nixon met with Egyptian President Nasser and offered his legal services for a $2 million fee...
...South Carolinian Randolph Guthrie, a descendant of the Randolphs of Virginia, was the closest partner to Nixon until Mitchell's arrival...
...He returned to the law firm shortly after the 1972 re-election campaign, but withdrew again following his indictment in the Vesco affair...
...2 0 Recently, Salomon Brothers became involved in litigation relating to the biggest scandal in the financial world - the collapse of the fraudridden Equity Funding Corporation of America, a Californiabased mutual funds and insurance concern...
...Salomon Brothers is the largest bond dealer and underwriter in the world...
...Buck also did fundraising for Nixon in St...
...Starting in July 1968, Liquidonics bought 805,700 UMC shares (16 percent of the outstanding stock) from an investment company, United Corporation...
...1 8 It does not deal with the general public...
...What are Salomon Brothers' Washington connectio,.s...
...capitalism, such institutions as corporations, the presidency, Justice Department, Congress and the military...
...and Stone and Webster Securities...
...and National Bulk Carriers, are law firm clients...
...On April 23, 1969, Nixon appointed MacKinnon to the Washington, D.C...
...As Mr...
...firm, Becker and Greenwald, which specialized in admiralty law...
...Liquidonics already held 18 percent, so their initial goal was not majority interest...
...In April 1968, when Nixon announced he would not stand for re- election to the board of directors, his long-time friend and Pepsi-Cola President, Donald M. Kendall, replaced him as director of the four mutual funds...
...Wall Street Journal, January 28, 1971...
...They had met in the Navy, served together in the 80th Congress and MacKinnon had been a speechwriter for Nixon in the 1952 campaign...
...Susquehanna had been plundered by management before the Studebacker-Worthington takeover, and consequently major lawsuits were filed by Susquehanna shareholders...
Vol. 7 • November 1973 • No. 9
