import quota system as recommended by the President's task force over two years ago? Three years ago, the Republican party was able to raise twice as much money from businessmen as was the Democratic party from all sources. As the administration in power, the Republican leadership is in a beautiful position to cash in on its enthusiasm for big business. A concentration of wealth unaccompanied by campaign spending and contribution reform merely makes it that much easier to raise more money than the operation. The White House just announced the President will veto the proposed public financing bill just passed by the Senate. Getting $1.00 from each of 20,000,000 is far less beneficial than getting $20,000,000 from a few thousand corporate executives and oil men, particularly when the opposing party cannot hope to raise equivalent sums. This administration has not hesitated to respond swiftly and helpfully to those who make large campaign contributions. Consider the great milk boondoggle of last spring finally disclosed in the newspapers only a few weeks ago. The government has long had the power to guarantee the price of manufactured milk. Last March that guarantee was $4.66 per hundred weight. The dairy farmer leaders came to Washington to seek an increase. Secretary of Agriculture Hardin denied the increase, finding no evidence to support it. The dairy farmers, then, ten days later, on March 12, paid $10,000 to four Republican campaign committees. The next day, March 23, the dairy farmer leaders were granted an audience with the President himself at the White House. The following day, March 24, the dairy farmers paid $25,000 to ten Republican committees for the re-election of the President. Lo and behold, the following day, March 25, Secretary Hardin announced that he would grant a price increase of 27 cents per hundred weight on the basis that "continuing research" had turned up new information on rising costs. Ten days later, April, $45,000 was given to nine additional committees. And by August 20, a total of $170,000 had been given to at least 68 committees, most if not all of them based in Washington, D.C. where a loophole in the law permits them to go unrecorded as to the source and amount. On September 3, 40,000 dairy farmers met for the biggest and perhaps happiest dinner in the history of Chicago. The President dropped by to pay his respects, and no wonder. The importance of money to politics can be easily recognized when we look at last year's Senate races in seven large states. Fifteen candidates (New York had three) ran in those seven states. Eleven of the candidates were millionaires and all seven of the winners were millionaires. The cost of campaigning has skyrocketed. No candidate for public office today has even the remotest chance of winning unless he has either immense personal wealth or wealthy backers. This is a tragedy for the democratic process. Only 2% of our people earned over $25,000 per year in 1969. Who, earning less than that sum, can afford more than a few dollars for the candidate of his or her choice, The importance of campaign financing is threatening to subvert the whole process of democracy. The concentration of the wealth necessary to campaign financing threatens to subvert our whole concept of a government of separated powers and to destroy that most priceless asset of all, our faith that our government is not controlled by a few big financial interests. Let me give you one additional example of the power of wealth and the power of generous campaign contributions to President Nixon. This example came to light only recently in testimony before my own House subcommittee on Conservation and Natural Resources. ARMCO Steel was the 69th largest corporation in the United States in 1970. its corporate officers were reported by the Washington Star to have given $14,000 to the Nixon campaign. ARMCO Steel has also been one of the worst polluters of the Houston ship channel. Its Houston plant for years has been putting nearly a half ton of cyanide per day into the ship channel. Cyanide is one of the most toxic substances known to man. On December 9, 1970, the EPA filed an action to force a termination of the cyanide discharge after all negotiations with the company had failed. On September 17, 1971, the federal district judge issued an order requiring that the discharge of cyanide cease forthwith. On September 28, the President of ARMCO, Mr. C. William Verity, wrote a letter to President Nixon at the White House, asking him to look into the Court's decision. On September 30, Mr. Verity was reported to have commented that Secretary of the Treasury Connally had been contacted and that through his influence, high level consultations were going on at that moment between the Justice Department and the EPA concerning the decision. On October 4, the Houston Business Journal quoted Verity as saying, “I pray every night for John Connally . . . if I could only have another son, his name would be John Connally Verity. At last there is reality in Washington and it changes the entire outlook for the steel industry and most gratefully ARMCO.” The letter Mr. Verity had sent to the President and the efforts of Mr. Connally were apparently successful, because a few days later on November 4, 1971, the EPA and the Justice Department stipulated to a modification of the Court's judgment of September 17, permitting ARMCO to continue the discharge of cyanide until July 1, 1972. The seriousness of this set of circumstances lies in the fact that after a lawsuit was in progress, after a judgment was obtained, the posture of the prosecution was relaxed not by the arguments of counsel for ARMCO, communicated to the government attorneys and the court, but by the direct intervention by the steel company president and the President of the United States. This sort of conduct is reprehensible. Any ordinary litigant who sought personally to stop a lawsuit by the Justice Department would be condemned or prosecuted. Only recently, a Justice Department attorney, Richard Kleindienst, testified against an aide of Senator Fong who had suggested that a large campaign contribution might be forthcoming if a particular prosecution against a constituent would be halted. This aide was convicted. Since the inception of this country, attempts to interfere with the prosecution of the litigation by the parties themselves have been considered a violation of law and reprehensive. President Nixon is a lawyer. Nevertheless, his personal assistant Peter Flannigan admittedly contacted EPA and the Justice Department after the President received Mr. Verity's letter. Mr. Flannigan is no stranger to big business. He was also a fund raiser for Mr. Nixon's 1968 campaign as the President of the Barracuda Tanker Corporation, owner of the Liberian flag tanker Sansinena. Under United States law, the tanker was ineligible for U.S. coastal shipping unless a waiver could be granted by the Treasury Department. Being ineligible for such trade, the Sansinena was worth an estimated $4.5 million; if the waiver could be granted, it would be perhaps worth $11 million. For several years, Mr. Fred Hartley, President of the Union Oil Company, had reportedly been trying to obtain a waiver for the Sansinena. The waiver could not be granted so long as U.S. tankers were available for the coastal trade. On February 25, 1970, Flannigan's 300 shares of stock in Barracuda were sold to others in the Barracuda venture. On March 2, the Treasury granted an unusually broad waiver for the ship, on the ground that the national security required it. Senator Joseph Tydings disclosed these facts in a speech to the Senate on March 9th, stating that by a stroke of the pen, the government had made $6.5 million for Barracuda. My own Committee on Merchant Marine & Fisheries prepared to hold a Congressional inquiry on the subject, whereupon the White House called Treasury officials to the White House on the evening of March 9. The next day, Secretary of the Treasury David Kennedy announced that the waiver would be cancelled. The national security apparently no longer required the Sansinena for the coastal shipping of oil. These examples merely illustrate the power of wealth applied to the governmental decision-making process. By far the worst evil we face today is the secrecy of large financial contributions which are permitted by loopholes in the law. The Corrupt Practices Act passed in 1925 purports to limit both campaign contributions and spending. Yet, when I commenced this campaign for President, I found that the law has loopholes that a truck could be driven through. The law does not apply to primaries, for example. As mentioned earlier, it does not apply to committees based in Washington, D.C. One wealthy individual can give millions of dollars if he wishes, merely by limiting his gifts to a $5,000 contribution to separate committees. To receive the $170,000 kindness of the milk producers, for example, the Republican National Committee merely set up a whole series of Washington committees, with names like "The Committee for the American Dream," or "Committee for Sound Economy." But for the error of the attorney who thought the law applied, we might never have had the chronological relationship between the campaign contributions to the President and the Administration's change of heart on milk prices. A funny occurrence in Chicago was disclosed recently. Vice President Agnew attended a $1,000 per plate dinner in Chicago in 1968. False listings of campaign contributors of at least $22.000 were then filed with the Clerk of the House of Representatives. Let me quote from the report of James R. Polk, a former Associated Press reporter who investigated 1968 campaign spending under a grant from the Fund For Investigative Journalism : "Eighteen donors listed for $22,000 in the Victory '68 record confirmed in interviews that they didn't give the money. Bunched among the false listings were names of a dozen more persons who refused to answer questions, didn't remember, couldn't be found, or died." Who did give the $22,000 in question remains a mystery. Chances are that they were big businessmen of considerable wealth. The examples of secrecy in campaign contributions are legion. Within six months of my own first election to Congress in 1967, lobbyists from three large industries or associations of industries dropped by my Congressional office to pay their respects and leave me an envelope filled with five or ten $100 bills. Being new to the business, I politely inquired of each one as to the names and addresses of the donors-the gift bearer in each case indicated that the names would be furnished later, and in due course I received a list of names of people from Omaha to Baton Rouge who had each given me $100. I had the distinct impression my inquiry was not the usual practice. In 1968, 181 Members of Congress filed statements that they had received no contributions and had spent no money on their campaign. Committees had done it for them. The evil lies not in the gift, but in its secrecy. I raise this issue tonight because the President has made it clear that he intends to veto the public campaign financing bill just passed by the Senate as he did the spending limitation bill a year ago. And only a few days ago his Congressional Liaison representative dropped by the Republican cloakroom in the House of Representatives to let it be known that the White House would not be unhappy if the campaign reform legislation now before the House is killed altogether this year. This is a key issue to the future of America and the restoration of both the honesty and openness of government as well as public faith in government. The answers are relatively simple. We need a new law which absolutely limits individual contributions, which provides a tax write-off for small contributions, which reasonably limits expenditures in the various media, which grants a reasonable chance for equal debate time to all candidates at the lowest available rates, and above all else requires complete disclosure of contributions and adequate enforcement powers and procedures. Many of these provisions are included in the Senate bill which the President has said he will veto and in the legislation now before Congress. As compared with the present system of secrecy and corruption, I strongly favor the Senate bill. If the President continues to oppose campaign contribution disclosure and reform, I believe he should be defeated on that basis alone in the March 7th primary. I hope, for the good of the country, he will withdraw his opposition. (i) Letter dated Feb. 4, 1972, from Mayor Sam Yorty to Messrs. Nader and Green [From the Congressional Record, Mar. 22, 1972] Messrs. RALPH NADER and MARK GREEN, OFFICE OF THE MAYOR, GENTLEMEN: I welcome the opportunity you have given me to comment on the very important issue of corporate power and anti-trust policy. Before responding to the specific issues raised by you in your letter of January 14, 1972, I would like to point out that our free enterprise system is one of the primary reasons that this country is so great. We must work hard to maintain our free enterprise system and instruct our children in its many merits and its relationship to our personal freedoms and liberties. We all have a stake in maintaining the free enterprise system and must not abuse it as is being done by the present administration which is using our credit rating based upon the productivity of our economy to borrow excessively thus producing unprecedented federal deficits and debt increases. I favor competition as necessary to the survival and proper functioning of the free enterprise system and for the protection of the nation's consumers. I am not anti-business, large or small, but big power is subject to big abuse making necessary government intervention on behalf of the consumer-citizen. The "cue" or "follow the leader" system is obviously used by some to evade anti-price fixing statutes. When detected, this practice must be dealt with promptly. Also, when management representing a monopoly bargains with a monopolistic Union, the consumer can be the victim of unfair prices, especially where foreign competition is not a factor in pricing policies. Now, as to the specific issues raised by you: I favor vigorous enforcement of existing laws against monopolistic practices without fear or favor. I also favor legislation to insure competition, thus strengthening our free enterprise system and giving reasonable protection to the consumer. As regards corporate secrecy, I feel that corporations should be required to disclose most of the information you mention. Reporting of such things as profit and loss by product line, pollution emissions by plant facilities, and documentation of consumer complaints, appear to be reasonable requirements. However, I do not feel that we should so burden industry with disclosure requirements as to unreasonably hinder their operations and raise the costs of production which would then have to be passed on to the consumer. These matters should be based on reason and not emotion. Your suggestion that a new investigation be made similar to that conducted by the (TNEC) to probe and publicize economic Temporary National Economic Committee concentration in America may have some merit. You will recall that the original TNEC was formed by Congressional resolution prior to World War II (1938) to study the monopoly and the concentration of economic power in the United States. This Committee published some important monographs and had its effect on the American Economic System. Before another such a committee is formed, however, we should make a determination that existing agencies cannot and are not adequately performing this function. Also, I would not want to see this type of activity degenerate into a "witch hunt" as is too often the case. If I were elected President, I would definitely consider supporting a Federal Chartering Act requiring large corporations doing interstate business to secure their corporate charters from the federal government, rather than from the industrial states as they now do. This would go a long way in securing needed conformity in reporting and accountability, and corporations would no longer find it possible to easily "escape" these requirements by obtaining their charters in one state as opposed to another. Many of my general views regarding problems and solutions to corporate power and monopoly are outlined above. However, here again I feel that we must proceed in a reasonable manner. I cannot quarrel with many of the methods you propose for achieving corporate accountability but I do feel that as much as possible we should attempt to get voluntary compliance from industry on these matters. When that fails, of course, we must go to the courts. I do not believe in harassment of business or exaggeration of faults. Thank you for this opportunity to express some of my views on this subject. Very truly yours, SAM YORTY, Mayor. (j) Letter dated Jan. 24, 1972, from Hon. Eugene J. McCarthy to Mr. Nader [From the Congressional Record, Mar. 22, 1972] WASHINGTON, D.C., Mr. RALPH NADER, DEAR RALPH: I have received your letter of the 14th including the questionnaire. I am glad that you are raising this question. The corporation has been a matter of concern to me in public speeches since at least 1960 when I began to talk about its arbitrary power and to use the term corporate feudalism as descriptive of the institutionalization and economic and political independence of the large corporations. I have watched for 20 years the evidence of the ineffectiveness of our antitrust laws. Whereas I do not despair of their having some effect, I am not very encouraged and am of the opinion that more direct regulation of the large corporations that are non competitive, and also of the large ones which have the appearance of competition such as the automobile industry, is the only available effective way of proceeding. I am not convinced that having 20 automobile companies rather than four major ones would move us any closer to the solution of the problem of the autombile. On most of the issues you have raised, I have been making the record clear for 20 years. I do think we should move toward federal chartering of corporations. I am in favor of more corporate democracy and regulation in all critical areas, and possibly a public member on the board of corporations above a determined size. With best wishes. Sincerely yours, EUGENE J. MCCARTHY. (k) Letter dated March 6, 1972, from Joe Azbell, director of communications, the Wallace Campaign, to Mr. Green Mr. MARK GREEN, [From the Congressional Record, Mar. 22, 1972] THE WALLACE CAMPAIGN, Montgomery, Ala., March 6, 1972. DEAR MARK: Due to our extremely heavy mail load, we received your letter only this morning. Unfortunately, the Governor has been on a tour in Florida and we would not have been able to get to him by your deadline, anyway. Unlike other candidates, Governor Wallace answers these type questions himself. He does not allow anyone else to speak for him. He feels this is the only honest way to answer questions. Please keep in touch with us and call us anytime. Very truly yours, JOE AZBELL, Director of Communications. |