The Path to Power

by Robert A. Caro

  And it was not on the floor—not in the open—that Wirtz was most dangerous. Fighting for passage of bills to regulate the growing oil industry and to curb patronage in state bureaucracy by instituting civil service requirements, a liberal Governor, Dan Moody, called five special sessions of the Legislature in 1929, only to see his program defeated all five times. Moody and his aides were not even aware that Wirtz was active in the fight; says an Austin observer: “They never knew until years later that it was Wirtz who had beaten them every time.” As a lobbyist—for the same reactionary oil interests he had been representing unofficially as a legislator—his technique was as soft as his drawl. A threat or an offer was never direct. The most he might say to a legislator was, “I just want you to know that I have been employed by a group to help pass this bill. There is a great deal of interest in seeing that it is passed. I hope you’ll vote the courage of your convictions.” But a legislator who didn’t take the hint would find arrayed against him the power not only of the most politically active oil company in Texas, Humble Oil & Refining (known respectfully in Austin as “the ’Umble”) but of Humble’s chief competitor, the Magnolia Petroleum Company (“the Magnolia”)—for, competitors though they were, Wirtz represented both of them. And in the next legislative redistricting, legislators who had not taken his hint often found themselves redistricted out of the Legislature; they went to their graves never knowing it was Wirtz who had maneuvered them out of their seats. Politics in Austin was as loud and flamboyant a business as it had ever been, but among those few men familiar with the innermost corridors of power in the Capitol there was growing awareness that slipping along those corridors was a silent, smiling figure. Ed Clark, for example, saw that it was not on Wirtz’s back porch but in the dimly lit library behind it that he did his real work—silent and alone. Clark, who was to work closely with Wirtz for years, says, “What he wanted was P-O-W-E-R—power over other men. He wanted power, but he didn’t want to get it by running for office. He liked to sit quietly, smoke a cigar. He would sit and work in his library, and plan and scheme, and usually he would get somebody out in front of him so that nobody knew it was Alvin Wirtz who was doing it. He would sit and scheme in the dark. He wasn’t an outgoing person. But he was the kind of person who didn’t want to lose any fights. And he didn’t lose many.”

  Stealth was his style. Ignoring the assistance of secretaries at the law firm of Powell, Wirtz, Rauhut & Gideon (“If you knew Alvin Wirtz,” says another attorney, “you would know that his name would never come first”), he wrote many letters in longhand—because he didn’t want even a secretary to know what was in them. Nor did he want his partners to know. The only partner in whom he even occasionally confided was the junior, and very young, Sim Gideon; Wirtz’s letters to Gideon were often addressed to his home rather than the office because, as he wrote in one letter: “I don’t want this in the firm’s files.” Since wire-tapping was not yet a widespread practice, Wirtz transacted as much business as possible over the telephone; “Senator didn’t want anything on paper that didn’t have to be,” Gideon explains.

  Senator’s caution was understandable in light of what was on paper. As his files show, Alvin Wirtz was the kind of lawyer who would slip into a contract a sentence—a sentence that changed the contract’s meaning—in the hope that the opposing lawyer would not notice it. (“My dear Lyndon,” he would later write about one such maneuver, after he had sent off the contract to the unsuspecting attorney—an attorney who thought Wirtz was his friend—“I have not called his attention to the fact, but at the end of Article XI is a sentence” which alters the contract’s import; with the exception of that sentence, he said, the contract “is the same” as the contract we agreed upon, so he will sign it, “so long as he is not advised” of the alteration.) A San Antonio attorney who often watched him in action calls him “a conniver—a conniver like I never saw before or since. Sharp, cunning.” Says another attorney: “He would gut you if he could. But you would probably never know he did it. I mean, that was a man who would do anything—and he would still be smiling when he slipped in the knife.”

  WANTING POWER, power over other men, Wirtz had early seen dams as the way to get it.

  The giant utilities—Texas Power & Light, Dallas Power & Light, San Antonio Gas—that controlled the generation of hydroelectric power in Texas were, in those days when the oil industry was still a relative infant, a major political power in Texas; not only did they make use of their revenues to purchase and control politicians, but in an era in which jobs as much as cash were the currency of politics, they were the state’s largest employers, with thousands of jobs to distribute. These utilities, with their lawyers and lobbyists, were a tight, closed group into which Wirtz had no chance of breaking. But during the 1920’s, a new player entered the field, and Wirtz hastened to attach himself to his team. He was Samuel Insull of Chicago, whose gigantic holding companies already extended from Maine to Florida. Wirtz made himself Insull’s man in Texas. The state’s rivers were under tight state control, and the Chicagoan learned that the Senator from Seguin was the man to see when permits were needed from the State Board of Water Engineers. After he was retained, Wirtz proved useful in many other ways as well. When farmers along the Guadalupe River near Seguin, where an Insull-backed firm from Chicago was building six small dams for irrigation purchases, stubbornly refused to part with their land, Wirtz’s influence with the Legislature procured for the Insull interests the right of eminent domain usually reserved for government. The Chicagoans learned that Wirtz’s fee—-exorbitant as it was; Wirtz was greedy for money as well as power—saved them money in the long run. When the farmers’ land was condemned—by Wirtz-controlled county appraisal boards—the prices set were very low. And when the farmers, believing they had been cheated out of their land, appealed to the courts, they found that Wirtz had considerable influence with courts as well.

  Wirtz’s main thrust for power came not along the Guadalupe but along the Lower Colorado. The dam Insull had begun building there (in isolated Burnet County in the Hill Country)—named the George W. Hamilton Dam after one of Insull’s engineers—was a huge dam, one of the largest in the world, and designed not for irrigation but for the generation of hydroelectric power on a vast scale. In its construction alone some 1,500 men would be employed, and Wirtz was given a say in the distribution of some of these jobs. As attorney for the enterprise, moreover, he expected a considerable voice in the utility’s affairs after the dam was completed. The power he wanted seemed within his grasp.

  In 1932, however, with the Hamilton Dam half completed, the Insull empire collapsed, and because of the Depression, no alternative method could be found to finance the project. In 1934, with the construction having been stopped for two years, the dam that had been Alvin Wirtz’s dream of empire was still only half completed, its steel skeleton glinting dully in the sun.

  There had been another development, moreover. Feeling against Wirtz was running very high among the Guadalupe River farmers who felt they had been cheated by a law sponsored by their own State Senator. On February 26, 1934, Tom Hollamon, Sr., a sixty-seven-year-old farmer who had once been a Texas Ranger, strode into Wirtz’s office, where he was meeting with Insull representatives, and began shooting; before he could be disarmed, one Chicago financier was dead. Hollamon was arrested for murder, but the Hollamon clan was a large one, and the Hollamons were not the only farmers enraged at the Insull firm, and at Wirtz. His former constituents told him to get out of Seguin and never come back; according to an attorney familiar with the case, the warning was issued in the classic Texas phrase: Wirtz was told, “Don’t let the sun set on you in Seguin.” Senator took the advice—he “was just run out of town,” this attorney says—and removed to Austin.

  But if for a while his dream seemed dead, the New Deal gave him a chance to revive it—bigger than ever.

  Under the $3.3 billion Emergency Relief Appropriation Act passed during the Hundred Days, a newly formed Public Wo
rks Administration (PWA) was empowered to give loans and grants to self-supporting enterprises such as public authorities. The Texas Legislature was basically conservative and, moreover, dominated by public utilities determined to keep their monopoly on hydroelectric power and to resist federal intrusion into the field. Detailing Wirtz’s maneuvers to persuade the Legislature to create a public authority—the Lower Colorado River Authority—to take over the Hamilton Dam and receive a grant from the PWA to complete its construction would require a book in itself (no such work exists). But because only in its later stages would the maneuvering involve Lyndon Johnson, the detailing will not be done here. In brief, the maneuvering was based on the techniques—indirection, deceit, secrecy—of which Wirtz was by now a master: at its heart was the lulling of a suspicious Legislature into the belief that the authority’s purpose was not power production at all, but flood control. In 1934, the Legislature passed the bill, and in 1935, Wirtz, who had been appointed LCRA counsel, went to Washington to arrange PWA financing; it was on one of these trips that he had the “love fest” with Dick Kleberg’s young secretary, by whom he was “very much impressed” because he “knew Washington” and “could get you in to any place.” When problems arose in Washington, Wirtz had another maneuver ready. The chairman of the House Appropriations Committee was a Texas Congressman, James P. (“Buck”) Buchanan. Buchanan’s district did not include the Lower Colorado, or Burnet County, the site of the half-completed dam, but Wirtz remedied that defect. A redrawing of congressional districts by the Texas Legislature was even then under way; when it was completed, the boundaries of Buchanan’s district had been changed to include Burnet County, and the dam. Another change took place: the LCRA changed the name of the dam. No longer was it the George W. Hamilton Dam. Now it was the James P. Buchanan Dam. Buchanan was touched; the PWA at first resisted giving a grant to finish the dam, but the Appropriations Committee did, after all, have a not inconsiderable say over Roosevelt’s program; and when Buchanan went to confer with the President about several sticky items, during the last week of June, 1936, he mentioned that he had recently had a birthday and—so he later related to Wirtz and LCRA board member Thomas C. Ferguson (Ferguson is the source of this story)—told Roosevelt: “Mr. President, I want a birthday present.” “What do you want, Buck?” Roosevelt is said to have replied. “My dam,” Buchanan is said to have answered. “Well then, I guess we’d better give it to you, Buck,” the President is said to have replied; picking up the telephone, he gave Secretary of the Interior Harold Ickes the necessary order. Whether or not this blunt conversation ever took place, the Order was, indeed, given. The problem posed by the utter unsuitability of the Buchanan Dam for flood control was solved by expanding the Lower Colorado River Project. Now it would be not just one big dam, but two* The second dam, twenty-one miles downstream from the Buchanan, was the Marshall Ford Dam, to be built, at a cost of $10,000,000, not by the PWA, but under a grant from the Department of the Interior’s Bureau of Reclamation. Marshall Ford would be much bigger even than Buchanan, and the focus was shifted to it—particularly Wirtz’s focus. The contractor who was selected to build it, and who began work in September, 1936, under an initial $5 million appropriation, was Brown & Root, Inc.—which happened to be one of Wirtz’s clients.

  Since Alvin Wirtz was counsel for both the LCRA and Brown & Root (and for other clients with interests in the LCRA development) and was court-appointed receiver for the Insull interests, he was collecting legal fees from many sides. He set his schedule of fees high; Ickes considered the ones the PWA had to pay exorbitant, and from that source alone Wirtz received $85,000, an immense fee for a Texas lawyer in those days. But the Marshall Ford Dam represented much more than fees to Wirtz. More than 2,000 men would be employed on that dam, and he would have a voice in their selection. When the dam, or, rather, both dams, together with others already on the drawing boards, were completed and producing electricity—when, in other words, the LCRA had become a gigantic utility—he would, as its counsel, have, he was certain, the dominant voice in its operation. It would provide him not only with money but with power on a big scale.

  The Marshall Ford Dam, that structure in an isolated gorge in the Texas Hill Country, was the vehicle that would give both of these men—Herman Brown and Alvin Wirtz—what they wanted.

  THERE WERE, however, two problems that even Alvin Wirtz had not been able to solve concerning this dam on which the Bureau of Reclamation had begun spending millions of dollars.

  One problem was that the Bureau had not been authorized to build the dam.

  Each public work built under the Emergency Relief Appropriation Act had to be separately and specifically authorized by Congress after hearings and, generally, an affirmative vote by the proper congressional committee—which, in the case of the Marshall Ford Dam, was Joseph Jefferson Mansfield’s Rivers and Harbors Committee. But the Rivers and Harbors Committee had never voted on the Marshall Ford Dam. It had never even held a hearing on the dam. No committee had voted or held a hearing on the dam, and neither had Congress as a whole. Appropriations for a specific project were not supposed to be made until authorization—approval of the project by Congress—was given; otherwise, a congressional committee would be giving money to build a project before Congress had decided whether or not to build it. Authorization was supposed to come first—and in the case of the Marshall Ford Dam, authorization had not come at all.

  The genesis of this situation lay in the informal way Buchanan had obtained President Roosevelt’s “birthday present” approval of the project—and in the fact that the approval had been obtained, in late June, 1936, after Congress had recessed. The Comptroller General’s office had noticed the lack of authorization, and had at first refused to approve the initial first-year $5,000,000 expenditure on the $10,000,000 dam. But Buchanan, in a series of tense conferences with that office, had persuaded it to allow work to begin, assuring it that he would have the dam authorized during the 1937 session of Congress. Because Buchanan’s power made such authorization a certainty, the Comptroller General’s office reluctantly agreed.

  Accepting the contract prior to authorization was, of course, a gamble for Brown & Root—and Herman and George Brown knew it. “The appropriations were for one year at a time—piecemeal,” George Brown recalls. “And [because of the lack of authorization] they were illegal. Wirtz was telling us all along that the money was wrong, and that if someone in Congress raised a question they would stop it [would stop paying out money under the contract].” If a Congressman made enough of a fuss over the fact that the Bureau of Reclamation was paying out money for a project that had not been authorized, the money could conceivably even be “stopped” permanently; the Bureau might say it could no longer honor the contract with Brown & Root. Wirtz had told the Brown brothers that in that eventuality the ordinary legal remedies for contractors against the government might not apply in this unusual case. The word that George Brown uses to describe the appropriations—“illegal”—is too strong; the dam was not “illegal” in the sense that anyone connected with it was violating a criminal statute; a more precise word would be “unauthorized.” But the consequences to Brown & Root could be as disastrous as if the appropriations had been illegal, for what Wirtz was telling the Brown brothers was that they might not be legally entitled to payment for the work they were doing.

  This would normally have been a gamble with only a limited risk. Despite the law, the initiation of projects prior to authorization—in the expectation that authorization would come later—had occurred before, and would occur again. But in this case the risk was heightened by another factor. So much larger was the dam than any previous Brown & Root project that the company would have to purchase $1,500,000 worth of heavy construction equipment, including one particularly expensive item—a cableway consisting of two steel towers erected on either side of the river, with, hung between them, huge cables along which ran a trolley from which buckets filled with concrete mixed on the cliffs cou
ld be lowered to the men pouring it into the foundations—for which they might never again have a use. “We had to put in a million and a half dollars before we could get a penny back,” George Brown recalls. Nor could this investment be recouped from the initial $5,000,000 appropriation. Their estimated profit on that appropriation, without the cost of equipment figured in, was just under $1,000,000; on the first appropriation, in other words, they would be losing $500,000. It was on the second $5,000,000 appropriation that their profit would be made. On this second $5,000,000, Herman Brown had calculated, he and his brother would make a profit of almost $2,000,000—enough to cover the $500,000 and leave them with an overall profit on the dam of $1,500,000, an amount double all the profit they had made in twenty previous years in the construction business.

  Ordinarily, of course, a contractor starting work on a $10,000,000 government dam—an authorized government dam—could be reasonably certain that he would receive the entire $10,000,000—not only the first year’s $5,000,000 but the second year’s $5,000,000 as well. But no such certainty could exist here. The Comptroller General, who had approved the expenditure of the first $5,000,000 so reluctantly, had flatly told Buchanan at the time that if for any reason congressional authorization was not forthcoming in 1937, he would never agree to the expenditure of the second $5,000,000, and Buchanan had accepted this. If there was no second appropriation, therefore, Herman and George Brown would lose half a million dollars—or most of what they had accumulated in twenty years of harsh struggle. And since they did not have the $1,500,000 necessary to buy the new equipment, they would have to borrow most of that sum, mortgaging all they owned. Building the Marshall Ford Dam was, therefore, a huge gamble for Herman Brown. If the authorization for the dam did not come through in 1937, he would be virtually wiped out.