NOMINATION OF NELSON A. ROCKEFELLER OF NEW YORK TO BE VICE PRESIDENT OF THE UNITED STATES THURSDAY, NOVEMBER 14, 1974 U.S. SENATE, COMMITTEE ON RULES AND ADMINISTRATION, Washington, D.C. The committee met, pursuant to call, at 10:02 a.m., in room 318, Russell Senate Office Building, Hon. Howard W. Cannon (chairman) presiding. Present: Senators Cannon, Pell, Robert C. Byrd, Allen, Williams, Cook, Hugh Scott, and Griffin. Staff present: William McWhorter Cochrane, staff director; Chester H. Smith, chief counsel; Hugh Q. Alexander, senior counsel; Joseph E. O'Leary, professional staff member (minority); John P. Coder, professional staff member; Jack L. Sapp, professional staff member; Peggy Parrish, assistant chief clerk, James H. Duffy, chief counsel, Subcommittee on Privileges and Elections; James F. Schoener, minority counsel, Subcommittee on Privileges and Elections; and John K. Swearingen, staff director, Subcommittee on Computer Services. Also present: Richard D. Casad, chief investigator; and Harry Claiborne, special consultant. The CHAIRMAN. The hearings will come to order. Governor, I am sure I need not remind you that you are still under oath, and at the recess yesterday I had asked that you try to ascertain some informatioin concerning the Sayan Corp. I will ask you now if you have been able to do that. STATEMENT OF NELSON A. ROCKEFELLER, NOMINEE FOR VICE PRESIDENT OF THE UNITED STATES-Resumed Mr. ROCKEFELLER. Counsel being cautious, he says that is still subject to check, but this appears to be correct, sir, so I say that. I own all the stock of the Sayan Corp., Inc., a New York corporation which owned improved real estate in Babylon, N.Y., a property under lease to the New York Telephone Co. On September 21, 1960, I sold the stock to L. Judson Morhouse and took back his noninterest bearing promissory note of $100,000 secured by the stock. The note was recorded on my books at its discounted value of $86,312.50. Mr. Morhouse made no payment on this note. On December 27, 1973, which is 13 years later, I forgave the entire note as a gift. The CHAIRMAN. That is the property that Mr. Morhouse received the income from roughly in excess of $2,000 a month. Is that correct? Mr. ROCKEFELLER. Yes, sir. The CHAIRMAN. And the property was of considerable value at the time, roughly $285,000 in value? Mr. ROCKEFELLER. I do not have the appraisal, but it sounds reasonable. The CHAIRMAN. The interrogations with Mr. Morhouse indicate that that was the value, approximately $285,000, and that, therefore, when you discounted the note to $86,000, he paid nothing for the property but received the $285,000's worth of property subject to the obligations against it, and it had an income of $2,700 a month-$2,724 a month, and it was leased to the telephone company. Mr. ROCKEFELLER. And, of course, I have to say, Mr. Chairman, it was my purpose to get to him on a legitimate basis income so that he would not be subject to the temptations which could be embarrassing to the party and the Government. The CHAIRMAN. Senator Pell. Senator PELL. Thank you, Mr. Chairman. Yesterday in the course of your questioning, Governor Rockefeller, I alluded to my recollection that during the Bobby Baker affair there had been testimony concerning a gift from Lyndon Johnson to Bobby Baker. Though it is not a matter of consequence in these hearings, I want to set the record straight. My memory was incorrect. The record indicated that Bobby Baker did receive a gift of a stereo set, but it was not given to him by Lyndon Johnson. I asked you yesterday whether, if confirmed as Vice President, you would refrain from making personal gifts to officials of the Federal Government, and I would like to review that testimony so as to be certain that there is no misunderstanding. I asked you this question: Without exception would you be willing to say that as a matter of policy you would not make any financial contributions or gifts to anybody in the Federal Government if you were confirmed? Mr. ROCKEFELLER. Or loans. Senator PELL. And your response was: I think, Senator, it is going to be essential that I do that. And then you qualified that a little later that for a medical reason there might be an exception. Would it be a correct characterization of your position that if you are confirmed as a result of these hearings that you would not and commit yourself not to make any gifts directly or indirectlyMr. ROCKEFELLER. Or loans. Senator PELL [continuing]. Or loans to Federal employees? Mr. ROCKEFELLER. With the one proviso as I mentioned, in the event of some--and I am in the process of getting some exact wording so that this would be satisfactory to you, Senator, and to the committee, so that we know exactly what the position is, but it is in the framework of what you have said and the spirit of these discussions. And I would repeat again, as I did yesterday, that I now clearly understand that my desire to be helpful has been misinterpreted or has been-has created uncertainty or some dissatisfaction and, there fore-in this moment of history, it is tremendously serious because the people have got to have confidence in their representatives, and should I be confirmed, they have got to have confidence in every aspect of my actions, my thoughts, and my position on the issues and, therefore, I do not want to leave any area where there could be any uncertainty or suspicion, and I appreciate your making the point. Senator PELL. Thank you; and the statement will be put in the record. Mr. ROCKEFELLER. Before we finish this morning. [The statement relating to future loans or gifts by Mr. Rockefeller was subsequently read into the record. See page 617.] Senator PELL. Another question here. As I understood, you stated that you had been named to be a member of the President's Foreign Intelligence Advisory Committee that was set up some years ago following the Bay of Pigs. Is that a correct recollection on my part? Mr. ROCKEFELLER. That is correct; by President Nixon in his first year in office. The committee had been in effect since President Kennedy established the committee after the Bay of Pigs. Senator PELL. Are you still a member of that committee? Senator PELL. Was that committee consulted in connection with the decision to use the CIA and other means to destabilize the Allende government in Chile? Mr. ROCKEFELLER. It was not, sir, but I have to just for the matterjust for the sake of the record, the word 'destabilization' was never used by the CIA. That was the word that was used by the member of Congress who transmitted the letter to the-I think it was the Chairman, which he introduced but which had not been used. That had not been described as the objective of the CIA. Senator PELL. What do you think would be a better word to describe the activity, the objective of the CIA? Mr. ROCKEFELLER. Not having been in on the hearings before the Committee of Congress when this was presented, not being familiar with the program that was carried out, I could not say, but I did ask the head of CIA whether they had used the word 'destabilize' which to me was a very unusual word to use for an action they were going to take, and he said no, that it had not been, that it had been used by a member of Congress. I only mention that, but I was not familiar with the action. Senator PELL. Thank you. No further questions. The CHAIRMAN. Senator Griffin. Senator GRIFFIN. Thank you, Mr. Chairman. Mr. Rockefeller, do all of the members of the Rockefeller family agree on who should be supported as political candidates in various campaigns? Mr. ROCKEFELLER. No, sir. In fact, we disagree. Senator GRIFFIN. I wondered when there are reports in the press that the Rockefeller family has supported certain candidates whether that necessarily indicates that you have supported that candidate. Mr. ROCKEFELLER. It does not, sir. We happen to have some Democrats as well as Republicans now in the family. Senator GRIFFIN. I thought that was so, and I thought you might elaborate on that point. Mr. ROCKEFELLER. I mentioned yesterday that two members in the next generation have supported-and I thought it was interesting to Senator Byrd perhaps a movie which was a documentary. I never saw it, but from what I heard about it, it was rather uncomplimentary about President Nixon. And it is interesting, Senator, that they made money on the movie. I do not say that was their original objective, but it did happen. Senator GRIFFIN. Governor Rockefeller, I just returned from Michigan where we have about 3 inches of snow on the ground and it is a little colder, and not only have we got some unemployment problems, but there is a lot of concern out there about the energy shortage. If you are confirmed and become a part of the Ford administration, do you have any ideas about what can be done to deal with the serious energy problem? Mr. ROCKEFELLER. I do, sir. Senator GRIFFIN. Would you care to elaborate? Mr. ROCKEFELLER. Well, if I may take a minute. We have four or five problems facing this Nation-six maybe— grave, serious, important problems that in a very interesting way cannot be separated. They are interrelated. You mention energy. In energy there are three major objectives that the American people, I think, want. One, they want cheap energy; two, they want secure energy, and, three, they want clean energy. Now, it just happens that these are in somewhat of a conflict. The cheapest energy, obviously, is to be obtained from the Mediterranean and the Arab countries, but it is not secure. It is clean, however; is cheap and clean, but insecure. it We have energy in this country from sulfurous coal and sulfurous oil or sulfurous oil from Venezuela, which is more secure but now it is expensive, but it is not clean. So that in this picture we have to, No. 1-we have to find the means in our Government of reconciling our various national objectives into a policy of action rather than allowing these very important, equally exciting and necessary objectives to counterbalance each other and result in no action, which is, I think, the most serious and dangerous problem America faces today, namely, that we have so many objectives and we have so many strong interest groups supporting those objectives that they counterbalance each other and the tendency is not to act as effectively as we should. I happen to believe that not only for national security but for our position in the world with the other industrial nations and the developing nations we have to be in a position where our energy requirements can be produced ultimately domestically and I personally would like to see us in a position where we are exporters and we can help our friends. This is dual. The course we have not yet determined because we have many sources of energy in the United States with which we have not experimented is the shale oil and down in the South a clay which has large quantities of oil. The oil in the shale in the Colorado area is equivalent to twice the known reserves in all of the Mediterranean Arab countries, so we have tremendous supplies. The oil in the clay in the South, in the Tennessee area, represents almost an equal amount of oil to the entire known Arab reserves. We have I will not say unlimited, because nothing is unlimitedtremendous quantities of coal, deep coal, surface coal, some dirty, some clean. The extraction of the coal and the extraction of the oil from these sands and clay can be done by surface mining or it can be done possibly in what is known as in situ. In other words, the shale-if you drill down into the shale, put off an explosion and set it on fire, put in water, you can bring up gas, because it takes its natural form, and then you have the capacity to meet that need by then putting it back into the state of oil. I am saying these only to point to a few of the things. Ecology. I visited in Wyoming some of the modern strip mining operations to see what they were doing, one by the Guggenheim interests there, 6,000 acres, where 55 people employed-total number of people, including the miners, the truckers, the office workers-are producing 20 million tons of coal a day. The whole thing is automated. There is one shovel that scoops the coal; it loads 120 cubic yards into a truck and that is put into a bin and that is automatically loaded on cars and computerized so it is known. Now, they strip off 100, 25 to 125 feet; they take the topsoil, put it aside; they strip off the remaining surface above the coal, put it behind them; fill the land; put the topsoil back on, are putting in lakes, so they will end up with 6,000 acres with about 1,000 acres of lakes, the land in better shape than it was before, more beautiful, usable, and I think that there is an interesting demonstration that we can use American genius, which I have great confidence it, to meet a need at costs that are very competitive-this is low sulfur coal-and that our country cannot be despoiled, but if we pay attention and make the effort that we can improve the beauty of the landscape. So I say that we have the resources; we have the technology; and we have the capacity, the organizing genius as Americans. The question is do we have clear objectives as to what we want to accomplish. Have we organized or can we organize ourselves to meet those governmentally in terms of policy objectives, governmentally in terms of creating a framework within which private initiative can. function with its creative, dynamic, driving force, and meeting the standards of government but not so encumbered with the redtape of bureaucracy? I think one of the dangers we face is that we may lose that unique capacity which has been America's strength, namely, this capacity to meet new situations. So I say to you, sir, in my opinion we can reconcile these differences and by 1985 we can meet our own needs from our own sources, protect and improve our environment, and do it within the framework of prices which now exist. This is a goal that has not been set. It is a higher goal in terms of objectives than has been discussed, but I think, from our national |