Corporate Government in Action

...This is ob- vious from the foregoing descriptions of the make-up of the committees...

...The most influential are composed exclusively of top officials of large corporations...

...and the busily scribbling sec- retary to the chairman of OMB's Busi- ness Advisory Council on Federal Re- ports, Charles Stewart, who declined repeated invitations to testify...

...President Harry Tru- man's Secretary of the Interior Julius Krug established the National Petrole- um Council, which supplies informa- tion and personnel for the Division of Oil and Gas...

...Even if he were ambitious enough to attempt the original re- search in fragmented files, his advisers would be reluctant to approve study of a subject about which they themselves are so uninformed...

...And the members of an OMB advisory commit- tee stopped a corporate ownership and interlock study by the Federal Trade Commission by taking their inside knowledge of the proposed study to Capitol Hill and arranging for a cut- off of the funds which the FTC needed for the study...

...Wave after wave of high-powered advisers, drawn from a small and repetitive roster of the corporate elite, fire off self-serving salvos which silence the snipers...

...The latter are quite different, usually set up to restore national con- fidence after a traumatic assassination or riot, or to relegate to a back burner a politically insoluble problem...

...Working from a vantage point well within whatever Administration is in power, they frustrate agency and cit- izen attempts to obtain the informa- tion needed to enforce the laws...

...It is not a happy phrase, but I hope its meaning is clear...

...The 119-member Council, he said, in- terlocks individually and corporately with the American Petroleum Insti- tute, the Military Petroleum Advisory Board, the Emergency Advisory Com- mittee for Natural Gas, the Emergency Petroleum Supply Committees, and advisory committees within the Federal Power Commission, the Defense De- partment, and the Office of Manage- ment and Budget...

...We are far from fulfillment of the consumer rights enunciated by our last three Presidents—the rights to be informed, to be heard, to choose...

...Consumer representation in govern- ment is still in gestation...

...One, en- titled Detergents, published late in 1970, spoke glowingly of a new materi- al, NT A, as a replacement for phos- phates in laundry detergents...

...squeezed out of their limousines anc ascended to the Department of Com merce meeting room only to find wait ing at the door representatives of the National Wildlife Federation, Friend of Earth, Nader's Raiders, and the press...

...Two political scientists who have studied the issue emerged at this sum- mer's Senate hearings...

...By last December the Surgeon General and Environmental Protection Agency announced their concurrence and concern...

...Thus does corporate government, which is procedurally as immune from its constituents as is the Soviet system, undergird public officialdom...

...But the ex- ecutive branch names the advisers, and it filled the panel with financiers and railroad officials, except for the two Federal employes designated by statute...

...And of course the group included the pres- ident of press agentry's ultimate weap- on, the Reader's Digest, which paid out less than half what it promised in sweepstakes promotions...

...Congress has contributed to the growth and power of advisory commit- tees by authorizing another one almost every time it sets up a new program...

...The other political scientist who emerged at this year's hearings, Pro- fessor Henry Steck of the College of Cortland, New York, testified that there was considerable overlap be- tween the members of the National In- dustrial Pollution Control Council and the top twenty or twenty-five con- tractors for the Defense Department, Atomic Energy Commission, and Na- tional Aeronautics and Space Adminis- tration...

...Professor Robert Engler of City Uni- versity of New York (and author of The Politics of Oil) cited the twenty- five-year-old National Petroleum Coun- cil (NPC) as a case study of how an advisory committee takes advan- tage of its quasi-governmental priv- ilege to concentrate its economic pow- er and use it for political purposes...

...I am apprehensive," Steck said, "that just as we are now speaking of a military industrial complex we may be witnessing the initial stages in the growth of what might be called an in- dustrial-environmental complex...

...The public pays for costly rate increase presentations before regulatory com- missions by giant energy, communica- tions, and transportation companies...

...Industry advisers, on the other hand, can confide at the club what they learned from John (Nas- sikas, chairman of the Federal Power Commission), Maurice (Stans, Secre- tary of Commerce), or Dick (Himself...

...This advisory group appointed by Secretary of Commerce Stans, is composed exclusively of th< heads of some sixty major polluting corporations—oil, auto, utility, mining timber, coal, airline, and manufactur ing—plus presidents of the U.S...

...Atlantic Richfield—which had a vice president on Secretary Morton's advisory committee—and Gulf and Shell combined paid only $13.8 million in Federal income taxes in 1969, but they spent $23 million on national ad- vertising...

...The advisory committee system in- vites conflicts of interest...

...need your help" Cunning went on to ask the sixty- three public relations officials to pass the word to their counterparts in sub- council corporations...

...three staff members...

...Republican Sen- ators Charles Percy of Illinois and William Roth of Delaware have in- troduced somewhat similar legislation...

...One thick Casebook of Pol- lution Clean-up Actions has already been published—and probably placed in your local library...

...OMB's sixteen industry advisory committees—five of them composed of oil, gas, or utility executives—have strayed far afield many times...

...The OMB industry advisory com- mittees have kept bottled up, for eight years now, the crucially necessary na- tional inventory of industrial water waste...

...By coincidence, Chase Manhattan Bank...

...If the pending legislation regarding advisory committees results in a law re- quiring them to meet openly, with prior public notice, some of the com- mittees that prize secrecy will no doubt melt away...

...The sheets in this series will be loose leaf so they can be assembled by industry, by pollution area, geographically etc...

...The Committee should have met in the Hall of Mirrors...

...As of this writing, the committee has not been appointed by Secretary of Health, Education and Welfare El- liot Richardson...

...The nature of the October meeting and of the Council itself, were set forth in a memorandum sent later that month by Tom Cunning, then the Council's Director of Communications and Public Affairs although a Com- merce Department official...

...They established them- selves early in World War II in re- sponse to the Budget Director's request for industry help in administering the Federal Reports Act of 1942...

...Many of these professional advisory committees are inactive, useful only as a notation in the resumes of ad- visers as seeming evidence of their prestigious national service...

...Virginia Knauer, assistant to the President for Consumer Affairs, who agreed with me in conversation during the first advisory committee meetings that consumer representatives were somewhat outnumbered...

...Proc- ter & Gamble was there, Atlantic Rich- field, AT&T, Ford, Chrysler, and Gen- eral Motors, General Electric and Westinghouse, numerous banking and loan institutions, four advertising agen- cies, three tobacco firms, Sun Oil and Deering Milliken (whose chief exec- utives helped get the John Birch Soci- ety started), and several drug, food, and rubber companies that are in trouble with the Federal Trade Com- mission...

...For an excellent and comprehensive account of present-day corporate abuses and the need for Federal char- tering see America, Inc., by Morton Mintz and Jerry Cohen, published this year by Dial Press...

...This new "consumer" advisory com- mittee held its secret meeting with the President in the Indian Treaty Room, there, in the words of his press release, to "identify and examine current and potential consumer problems...

...One can speculate," he said, "about the possible impact of an OMB industry advisory council on the non- clearance decision...

...The Business Ad- visory Council on Federal Reports, which operates through the Office of Management and Budget (formerly Budget Bureau) and keeps bureaucrats from asking questions which industry does not want to answer, was set up during President Franklin D. Roose- velt's third term...

...Govern- ment does not provide the fundamen- tal precursor of justice and equity—ad- versary proceedings—be it within ad- visory committees, before regulatory commissions, or within key depart- ments of the executive branch...

...Cham ber of Commerce, the National Associ ation of Manufacturers, and the Na- tional Industrial Conference Board This Council, said the President, woulc help businessmen "communicate reg ularly with the President, the Counci on Environmental Quality, and othei Government officials and private organ izations"—as if they did not already have multiple channels, including po litical campaign finance clubs...

...But if diversified to include the unrep- resented public, at the expense of the over-represented corporation, advisory committees could constitute a desirable avenue for public access to government decision makers...

...More than half of the twenty-one Office of Ed- ucation advisory committees estab- lished since 1965 did not meet last year...

...The advisory committee system invites conflict of interest" Months earlier Dr...

...Yet in May of this year, Procter & Gamble—whose president heads the Detergents Subcouncil—was sending members of Congress the old, errone- ous pamphlet, referring to it as "a new Commerce pamphlet which gives the full story" on detergents...

...In- stead, they list "nominees"—dummy corporations...

...Later in the month, Secretary of Interior Rogers Morton complimented his Advisory Committee on Energy, which had just voiced the same complaint, and growled about the delay in opening up Government oil shale reserves and Alaska's North Slope, and about safe- ty and environmental hurdles, and those "added taxes on petroleum im- posed by the Tax Reform Act of 1969...

...And who is the major creditor for five of the nine local service air carriers, as well as the principal stock- holder in both the Eastern and North- west Orient airlines...

...That law was passed to help small businesses, plagued by wartime questionnaires...

...This is true, too, of the American Gas Association (a trade association of in- vestor-owned distribution and pipeline companies), whose estimates FPC Chairman Nassikas prefers to those of his own staff, which reckons reserves at forty per cent more than the AG A does...

...They could probably all be abolished without public detriment...

...11 Just before Congress recessed in August the Interstate Commerce Com- mission created a Tariff Users Ad- visory Committee, to "provide the user with a forceful and structured voice" in tariff simplification and also "pro- vide the Commission with the nucle- us of a specialized tariff advisory group which could be split or ex- panded as required into numerous sub- groups or task forces in many areas concerning tarriff users...

...But in most states no provision is made, through either the rate or tax struc- ture, to fund the public's counter case against utility overcharges...

...At its first meet- ing (in the bank's home office, under the chairmanship of one of Chase's 298 vice presidents) this "Government" committee decided to exclude the press and public, to make recommen- dations to the CAB on its "procedural and philosophical conduct," and to be- gin by recommending changes in the Board's method of compiling financial reports...

...The matter, said Commerce, "is out of our control...

...The 'case history' sheets should be reprints, not re-written, of actual stories from house organs, employe magazines, annual reports, newspapers and magazines like the ten sample sheets...

...A corporation or trade association is more than willing to underwrite cozy conversations with top Government people...

...With this let- ter is a group of ten sample sheets...

...At its meet ing last October, Council member...

...The answer seems clear enough: If The Nelson-Brademas Environ- mental Education Act, on the books al- most a year now, provides for appoint- ment of an environmental educa- tion advisory committee including en- vironmental and youth representation...

...Tax loopholes for oil compa- nies are so big that, as The Progres- sive's Washington Editor, Erwin Knoll, reported last year, Atlantic Richfield paid no Federal taxes on the $465 mil- lion profit it made from 1964 through 1967, and actually obtained during those four years tax credits totaling $629,000...

...On the eve of the Congressional re- cess the President established a 110- member National Business Council for Consumer Affairs...

...Advisory commit- tees which include modestly-paid per- sons such as teachers must provide at least expense money to get a quorum...

...OMB has promised—as it did last year, without fulfillment—to come up speedily with its own pro- posals...

...No, the} said, these non-members could not at- tend the Council meeting, even a! mute observers...

...no one has more than fragmen- tary data on their number, member- ship, meetings, and activities...

...Their committee," he said, "is still consider- ably more democratic in structure than the technical advisory committees...

...Nader noted that "it is very hard, basically, to even interest people who should be interested" in Government information policy, although "the enforcement of the laws, in an Administration that shouts about law and order, depends in the economic regulatory area on the critical obtaining of information about business and industrial practices . . . [which is] by far the most single im- portant information problem in all of Government...

...Some material has come in as a result of a request to Council members, but not enough of the right kind of stuff...

...Samuel Epstein, a renowned cancer researcher, had warned against use of NTA pending further study...

...The minutes of these advisory committees, which are stored at OMB, show that they weakened FPC regulations on re- porting political, advertising, and pub- lic relations expenditures...

...Each case history sheet will show re- suits—facts—show that industry is do- ing something...

...OMB committees kept the Federal Power Commission from ascertaining more than ten of the principal stock- holders in electric and gas corpora- tions...

...Council and Administration leaden were surprised and indignant...

...At the Senate hearings this summer a Commerce spokesman admitted that no effort had been made to remove the misleading pamphlet from the GPO list or even insert in it notifica- tion of the sharply revised medical ad- vice regarding NTA...

...Industry advisory committees "frustrate agency and citizen attempts to obtain the information upon which laws are or should be enforced" None of these industry advisory com- mittees will divulge the details of the alleged gas shortage on which they base their claim for more lenient rate, tax, and administrative treatment...

...And well one might...

...No, then would be no press conference after- ward...

...On July 15, two days after Engler testified, the National Petroleum Council unveiled its Energy Outlook, a publication comprising findings and projections of energy industries work- ing under Council coordination, which complained abut Federal restraints on the price of natural gas...

...There are two to three thousand of them...

...These book- lets are printed and distributed by the Government Printing Office...

...It is different with the industry ad- visory committees...

...The Council accordingly issued a sharply revised Detergents pamphlet in March...

...And that is a large order for a one man shop...

...Extensive human and environmen- tal safety tests indicate," it reads, "that at the levels currently being used and contemplated for the near future, NTA is safe for people and the environ- ment...

...Even so, many utilities decline to name their ten largest security holders in their annual reports to the FPC...

...And as one doctor- al candidate said, he would like to do his thesis on industry advisory com- mittees, but he would also like to con- sult for industry...

...Press and public interest groups are often barred from the committees' for- mal meetings, which are held in such places as the Pentagon, the Depart- ment of Commerce, the big red Exec- utive Office building on 17th Street, and the Chase Manhattan Bank in New York City...

...The self-serving materials rolled in...

...Only seven persons were lis- tening to Nader—Senator Lee Metcalf, Montana Democrat, author of the bill, who was presiding...

...The Nixon Administration, while cutting back executive branch employment and bypassing the legislative, seems de- termined to proliferate the advisory branch, excluding from it potential critics and supporting it with a mas- sive public relations program which transforms industry wishes into govern- ment writ...

...It met secretly in the Department of Commerce...

...Nixon's articles and sponsored some of his travels abroad as its contribution to his election...

...One is, at long last, an aware- ness of their existence and the growing realization that they constitute a fourth branch of the Federal Government...

...This year Senator Metcalf broad- ened his bill to require that all Gov- ernment advisory committees (rather than just OMB's) meet openly, with prior public notice, and, in the case of industry committees, include public representatives with no direct or in- direct economic or financial interest in the industry involved...

...The profes- sional advisory committees, when they do meet, often deal with acting deputy assistants...

...This year they cut the heart out of a Federal Communica- tions Commission (FCC) study of the effects of conglomerate ownership on broadcast stations by convincing OMB that the FCC should not be allowed to look at more than one year's corre- spondence between broadcasting com- panies and their conglomerate parents...

...Corporate Amer- ica heard and responded to the Fed- eral plea...

...It is worth quoting: "At the October 14, 1970 meeting of the National Industrial Pollution Con- trol Council the need for industry and NIPCC to get going on a 'communica- tions-p.r.' program was mentioned time and time again . . . One logical answer is a 'case history' series...

...Travel funds from the Federal Govern- ment are in extremely short supply...

...The restriction hampers environmental and consumer groups which would like to watch the advisory system work even though they are not permitted to be part of it...

...The executive branch in this Admin istration is not likely to order the in ventory, which was recently referred tc the National Industrial Pollution Con trol Council, created by the Presiden in April, 1970...

...The Senate Subcommittee on Inter- governmental Relations, headed by Senator Edmund S. Muskie, Maine Democrat, has conducted eight days of hearings this year on advisory com- mittees, and more are planned for this fall...

...And that condition will continue until public government decides to limit the pam- pered private corporation, logically through Federal rather than state chartering and control of corporations...

...This year Congress appropriated money for a gas supply and demand study by the FPC, which promptly set up three technical advisory committees and a forty-five-member executive ad- visory committee...

...We do not know who owns America, or who pollutes it...

...There will not be any real law and order in the environmental field until the Government knows who ii polluting what, where, and how much And there will not be any such inven tory until one of the constitutional arm of Government asserts its power ove] the advisory branch...

...Industry advisory committees are no Nixon phenomenon...

...Council mem- bers] have access, they control knowl- edge, they control advice...

...He was formerly an associate editor of the Charlotte (North Carolina) News...

...They meet regularly with Administration leaders, cruise the polluted Potomac in the Presidential yacht, watch from the White House rose garden as a new en- vironmental device is displayed, assign company personnel to prepare govern- mental reports, listen to the decision- makers and help them decide things...

...CAB Chairman Secor Browne, to his credit, did not ask large corporations to man his consumer advisory commit- tee...

...This lack of literature tends to keep the interested graduate student out of the field...

...But it is not really on the pri- ority list of either the executive or legislative...

...Information is "the currency of power" in Washington, as Ralph Na- der put it last year when testifying in support of legislation to broaden the membership of the Office of Manage- ment and Budget's sixteen all-industry advisory committees by including con- sumer, small business, and labor repre- sentation...

...One member of the latter, Mayor Dale Helmerich of Hunt- ingburg, Indiana, who is president of the American Public Gas Association (a trade association of 225 municipal distribution systems), testified that "the consumer is represented by me and Mrs...

...Mayor Helmerich noted that fund- ing for the study had not been cleared by the Office of Management and Budget...

...Corporate Government in Action VIC REINEMER In today's Washington the most ex- pansive and least visible branch of government is the advisory commit- tee...

...My bosses are calling for 200 to 250 of these, covering all the areas I mentioned, by January 1, 1971...

...Concurrently the Council has worked up twenty-five attractive blue and white booklets dealing with various environmental matters...

...A candid thesis would probably deprive him of side income from industry consultancies...

...News of the unpublicized meet ing had leaked from civil servants for ever honored and nameless...

...The new advisory committee consists of seven industry and four carrier representa- tives, without even a nod toward the ultimate tariff payer...

...President John F. Ken- nedy's Defense Secretary Robert Mc- Namara established the Pentagon's In- dustry Advisory Council, through which the nation's top defense contrac- tors tone down General Accounting Office reports on excess profits and urge the FBI to share with industry its files on restive students...

...it directed the Budget Director to coordi- nate the collection of information from ten or more persons or firms to the end that "all unnecessary duplication of efforts in obtaining . . . information [from businesses] . . . should be elim- inated as rapidly as practicable...

...Most companies were repre- sented by their president or board chairman, including hefty contributors to the President's 1968 campaign...

...They delayed and watered down industry reports on air pollution...

...Com- mittees, commissions, departments, and the Congress are assiduously attended by the omnipresent lobbyists for the corporations, whose key officials pro- vide the lion's share of the funds for political campaigns...

...If the committee when appointed will include, as rumored, independent experts, it will not have the money and muscle which sustains the National Industrial Pol- lution Control Council...

...Above all, it is virtually impossible for out- siders to challenge the thinking and the findings of the Council...

...An increasingly pop- ular meeting place is the new State Department Building—you can't get in there anymore without a pass or spe- cial permit...

...There is a compelling reason why many do not meet...

...But advisory committees composed of consumers or representatives of con- sumer organizations are rare indeed...

...The Council promptly set up som< thirty subcouncils embracing variou fields of industrial activity...

...There is no academ- ic library on the subject of advisory committees, unless you include among these bodies the Presidential commis- sions...

...On the House side, Representative John S. Monagan, Connecticut Dem- ocrat, has also introduced legislation to establish ground rules for advisory committees...

...More casebooks are planned...

...The OMB committees have no stat- utory basis...

...Steck questioned whether other ad- visory committees, which do include diverse interests, could counter the high-powered, all-industry committees...

...OMB, which speaks for the Administration, wants to set forth the ground rules by executive order, rather than have Congress do it...

...VIC REINEMER is executive secretary to Senator Lee Metcalf, Montana Demo- crat...

...two correspondents for industry news services...

...Until recently, political scientists have shunned advisory committees as studiously as they have avoided regula- tory commissions...

...Actual ownership or con- trol of stock can be ascertained to a de- gree through use of the "Nominee List" published by the American So- ciety of Corporate Secretaries and closely held by it until Senator Met- calf put it in the Congressional Record (June 24, 1971, Part II...

...The Department of Health, Education and Welfare has so many advisory committees that this summer it com- puterized its 5,700 advisers, by agency, into two thick books...

...But to zero in on one, consider how Chase Manhattan Bank (Rockefeller) associ- ates dominate the Civil Aeronautics Board's Finance Advisory Committee, appointed last year...

...I have in my hand a volume . . . entitled 'Pollution Cleanup Actions' and these are the kind of things that were put out . . . the sample sheets...

...No, they would not be provided with a transcript...

...Their—and other—testimony illustrates the second new element in government by indus- try advisory committee, the overkill syndrome so evident when an industry is under attack...

...So the ad- visory committee issue is, as they say in Washington, "under active consid- eration" by two branches of the Gov- ernment...

...There are two new elements in the industry advisory committee apparatus today...

...a publica- tion which excludes dissenters as in- dustry advisory committees do, and which carried eleven of Mr...

...Large corporations and trade associ- ations set up the advisory committee apparatus immediately and have used it continuously to quash questions which the Government should ask and does not otherwise get answered...

...U When Congress passed the Rail Passenger Service Act last year it au- thorized a fifteen-man financial ad- visory panel, including seven persons representing the public...

...He sent it to the designated "public relations con- tacts" of the corporations whose pres- idents and board chairmen sit on the Council...