Family of Secrets: The Bush Dynasty, America's Invisible Government, and the Hidden History of the Last Fifty Years

by Russ Baker

  After Nixon tapped Agnew, Prescott Bush, writing to his old friend Tom Dewey, registered his disappointment in a measured manner: “I fear that Nixon has made a serious error here,” Prescott wrote. “He had a chance to do something smart, to give the ticket a lift, and he cast it aside.”5 Actually Prescott was seething; he hadn’t felt this betrayed since John Kennedy fired his friend Allen Dulles as CIA director. As for the Bush children, they had learned years earlier to fear the wrath of their stern, imposing father. “Remember Teddy Roosevelt’s ‘Speak softly and carry a big stick’?” Poppy once said. “My dad spoke loudly and carried the same big stick.”6

  But beyond political expediency, Prescott may have had good reason to expect Nixon to follow “suggestions” from the GOP establishment—a reason rooted in the earliest days of Nixon’s political career.

  Nixon’s Big Break

  In Nixon’s carefully crafted creation story, his 1945 decision to enter politics was triggered when the young Navy veteran, working on the East Coast, received a request from an old family friend, a hometown banker named Herman Perry. Would he fly back to Los Angeles and speak with a group of local businessmen looking for a candidate to oppose Democratic congressman Jerry Voorhis?7 They felt he was too liberal, and too close to labor unions.8

  The businessmen who summoned Nixon are usually characterized as Rotary Club types—a furniture dealer, a bank manager, an auto dealer, a printing salesman. In reality, these men were essentially fronts for far more powerful interests. Principal among Nixon’s bigger backers was the arch-conservative Chandler family, owners of the Los Angeles Times. Nixon himself acknowledged his debt to the Chandlers in correspondence. “I often said to friends that I would never have gone to Washington in the first place had it not been for the Times,” he wrote.9 Though best known as publishers, the Chandlers had built their fortune on railroads, still the preferred vehicle for shipping oil, and held wide and diverse interests.

  Yet Voorhis appears to have recognized that forces even more powerful than the Chandler clan were opposing him. As he wrote in an unpublished manuscript, “The Nixon campaign was a creature of big Eastern financial interests . . . the Bank of America, the big private utilities, the major oil companies.” He was hardly a dispassionate observer, but on this point the record bears him out. Nixon partisans would claim that “not a penny” of oil money found its way into his campaign. Perhaps. But a representative of Standard Oil, Willard Larson, was present at that Los Angeles meeting in which Nixon was selected as the favored candidate to run against Voorhis.10

  Representative Voorhis had caused a stir at the outset of World War II when he exposed a secret government contract that allowed Standard Oil to drill for free on public lands in Central California’s Elk Hills. But the establishment’s quarrel with Voorhis was about more than oil. While no anticapitalist radical, Voorhis had a deep antipathy for corporate excesses and malfeasance. And he was not afraid of the big guys. He investigated one industry after another—insurance, real estate, investment banking. He fought for antitrust regulation of the insurance industry, and he warned against the “cancerous superstructure of monopolies and cartels.”11 He also was an articulate voice calling for fundamental reforms in banking.

  He knew Wall Street was gunning for him. In his memoir, Confessions of a Congressman, Voorhis recalled:

  The 12th District campaign of 1946 got started along in the fall of 1945, more than a year before the election. There was, of course, opposition to me in the district. There always had been. Nor was there any valid reason for me to think I lived a charmed political life. But there were special factors in the campaign of 1946, factors bigger and more powerful than either my opponent or myself. And they were on his side.

  In October 1945, the representative of a large New York financial house [emphasis mine] made a trip to California. All the reasons for his trip I, of course, do not know. But I do know that he called on a number of influential people in Southern California. And I know he “bawled them out.” For what? For permitting Jerry Voorhis, whom he described as “one of the most dangerous men in Washington,” to continue to represent a part of the state of California in the House of Representatives. This gentleman’s reasons for thinking me so “dangerous” obviously had to do with my views and work against monopoly and for changes in the monetary system.12

  It is not clear whether Voorhis knew the exact identity of the man. Nor is it clear whether Voorhis knew that his nemesis, the Chandler family, had for several years been in business with Dresser Industries. The latter had begun moving into Southern California during the war, snapping up local companies both to secure immediate defense contracts and in anticipation of lucrative postwar opportunities. One of these companies, Pacific Pump Works, which manufactured water pumps, later produced components for the atomic bomb. The Chandlers were majority shareholders in Pacific Pump when Dresser acquired the company, and so gained a seat on the Dresser board, along with such Dresser stalwarts as Prescott Bush.

  But there was even more of a Bush connection to the movers and shakers behind Nixon’s entry into politics. In October 1945, the same month in which that “representative of a large New York financial house” was in town searching for a candidate to oppose Voorhis, Dresser Industries was launching a particularly relevant California project. The company was just completing its purchase of yet another local company, the drill bit manufacturer Security Engineering, which was located in Whittier, Nixon’s hometown.13 The combined evidence, both from that period and from the subsequent relationships, suggests that Voorhis’s Eastern banking representative may have been none other than Prescott Bush himself. If so, that would explain Nixon’s sense of indebtedness to the Bush family, something he never acknowledged in so many words but clearly demonstrated in so many actions during his career.

  A Quick but Bumpy Ascent

  In his first race for public office in 1946, Nixon went after the incumbent Voorhis with a vengeance. It was a campaign that helped put the term “Red baiting” into the political lexicon. After his victory, Nixon continued to ride the anti-Communist theme to national prominence.

  Following two terms in the House, Nixon moved up to the Senate in the 1950 election. By 1952, he was being foisted on a reluctant Dwight Eisenhower as a vice presidential candidate by Wall Street friends and allies of Brown Brothers Harriman.

  But the further Nixon rose, the more he resented the arrogance of his Eastern elite handlers. Though he would continue to serve them diligently throughout his career, his anger festered—perhaps in part over frustration with the extent to which he was beholden.

  Meanwhile, George H. W. Bush, not yet thirty years old and a relative newcomer to West Texas, was named chair of the Eisenhower-Nixon campaign in Midland County. For someone with political ambitions of his own, it was an enviable assignment, and Poppy threw himself into it. When a heckler interrupted a welcoming ceremony for Eisenhower’s vice presidential running mate, Poppy rushed at the man, grabbed his anti-Nixon sign, and tore it to bits.

  Nixon himself would demonstrate a more effective response to criticism. His storied “Checkers speech,” answering charges that he had accepted political donations under the table, was a masterful appeal to middle-class sensibilities, with a maudlin self-pity that went up to the edge but not over.14 Telegrams of support came pouring in to Republican headquarters; and one of the first politicians to write was the silver-haired U.S. senator from Connecticut, Prescott Bush:

  No fair-minded person who heard Senator Nixon bare his heart and soul to the American people Tuesday night could fail to hold him in high respect. I have felt all along that the charges against Dick Nixon were a dirty smear attempt to hurt him and the Republican ticket . . . [These smears] will boomerang in his favor. Nixon is absolutely honest, fearless and courageous. I’m proud of him.15

  Nixon saved his political skin that night, but money problems would continue to plague him. This increased his seething resentment of Jack Kennedy, who never had to grovel
for money (and who was smooth and handsome to boot). As anyone who knew Nixon, including the Bushes, must have realized, his dependence on the financial resources of others constituted a vulnerability. That vulnerability would later lead to his undoing. The essence of Nixon’s relationship with the Bushes, as with other key backers, was that they had the wherewithal and he didn’t. And since money was behind the relationship that made Nixon, it was only fitting that when Watergate undid him, it was to a large extent money—as we shall see in chapters 10 and 11—that was behind his downfall.

  Symbiotic Relationship

  During the Eisenhower years, the Texas oil industry really took off. Poppy was now part of a “swarm of young Ivy Leaguers,” as Fortune magazine put it, who had “descended on an isolated west Texas oil town—Midland—and created a most unlikely outpost of the working rich.”16 Central to these ambitions was continued congressional support for the oil depletion allowance, which greatly reduced taxes on income derived from the production of oil. The allowance was first enacted in 1913 as part of the original income tax. At first it was a 5 percent deduction but by 1926 it had grown to 27.5 percent. This was a time when Washington was “wading shoulder-deep in oil,” the New Republic reported. “In the hotels, on the streets, at the dinner tables, the sole subject of discussion is oil. Congress has abandoned all other business.”17

  Following the discovery of the giant East Texas oil fields in 1931, there was nothing Texas oilmen fought for more vigorously than their depletion allowance.18 From its inception to the late 1960s, the oil depletion allowance had cost taxpayers an estimated $140 billion in lost revenue.19 Nixon supported the allowance in 1946, while Voorhis opposed it. Six years later, General Dwight D. Eisenhower supported it, and he got the oilmen’s blessings—and substantial contributions as well.20

  The Bushes backed Nixon passionately in his 1960 presidential campaign against John F. Kennedy. After Nixon lost—and then lost again when he ran for governor of California two years later—the oil lobby began to look for another horse. Poppy Bush saw his opening. He knew which way the political winds were blowing: toward an ultraconservatism based on new wealth, in particular the wealth of independent oilmen.

  In 1964 the Bushes gave their support to presidential candidate Barry Goldwater, even though this meant turning against their longtime allies, the Rockefellers. One can only speculate as to their motives, though Prescott Bush’s puritanical streak may have played a role. Goldwater’s opponent, Nelson Rockefeller, recently divorced, had decided in 1958 to wed Margaretta “Happy” Murphy, an even more recently divorced mother of four. Prescott delivered Rockefeller a public tongue lashing that Time called “the most wrathful any politician had suffered in recent memory.”21 This may have been just a convenient target. As political historian Rick Perlstein put it, conservatives genuinely preferred Goldwater, “and welcomed the remarriage as an excuse to cut loose from someone they were never excited about in the first place.”22

  Goldwater’s success in snatching the 1964 Republican nomination from Rockefeller changed the ideological dynamics of the Grand Old Party. Even though Goldwater lost the presidential race, the party would never be the same. So-called movement conservatives managed to build an uneasy alliance between social issue ground troops and the corporate libertarians who finance the party. The ever-nimble Bushes managed to straddle both camps.

  Political ambition ran in the Bush family. According to his mother, Prescott had wanted to be president and regretted not getting into politics sooner. The lesson was not lost on Poppy. If he wanted to be president, he would have to take the long view and get started early. An alliance with Richard Nixon could be useful. Nixon would vouch for his rightward bona fides, and thereby make moot the patrician residues of Yale that still clung to him.

  Nixon Presidency, 1969

  As for Nixon, he understood only too well the perils he faced. With his paranoid tendencies, he worried constantly about where the next challenge would come from. Robert Dallek’s biography Nixon and Kissinger: Partners in Power describes Nixon as “an introspective man whose inner demons both lifted him up and brought him down.” When he looked at George Bush—a handsome, patrician Yale man with no worries about money—he likely saw another version of Jack Kennedy, which for him was not a recommendation.

  But people were nagging Nixon, people he couldn’t ignore—all the more so once he locked up the nomination in 1968. “As your finance chairman in Texas,” wrote Bill Liedtke, “I am committed, and will back you up whatever you decide [about a running mate]. However . . . George Bush, in spite of his short service in the House, could help you win. George has appeal to young people and can get them fired up. He’s got plenty of energy. Lastly, Dick, he’s a loyal kind of guy and would support you to the hilt.”23

  Instead Nixon chose a running mate who was less capable and ambitious, and consequentially, less threatening. Having angered both Prescott and Poppy with his choice of Agnew, he knew that he would need to make amends to them and their allies.

  Outside the small circle of longtime Nixon loyalists, the Bush group seems to have fared better than any other party faction in Nixon’s first administration. Bill Clements, Poppy’s friend and sometime oil drilling partner, became deputy secretary of defense, a position that involved securing oil for the U.S. military.24 Bush’s ex-business partner Bill Liedtke of Pennzoil (formerly Zapata Petroleum), the prodigious Nixon fund-raiser, successfully recommended former Baker Botts lawyers for positions on the Federal Power Commission.25 The FPC made crucial decisions affecting the natural gas industry, including one that directly benefited Pennzoil.26

  For his chief political adviser, Nixon chose Harry S. Dent of South Carolina, the architect of his “Southern strategy,” which had centered on wooing conservative Democrats to the Republican cause. Poppy Bush’s election from Texas’s Seventh Congressional District had benefited greatly from this strategy. As his top aide, Dent chose Tom Lias, who had run the candidate selection process for the Republican Congressional Campaign Committee during that election cycle. These men, especially Lias, are little known today. But they would play crucial roles in the process that would lead ultimately to Nixon’s resignation.

  Meanwhile, to head the Republican National Committee (RNC), Nixon picked Rogers Morton, a congressman from Kentucky, who had been his convention floor manager. Morton, a Yale graduate, was an old friend of the Bushes who had served with Poppy on the Ways and Means Committee.27 Morton in turn named as his deputy chairman Jimmy Allison, Poppy’s longtime friend, administrative assistant, and former campaign manager. Because at the time the RNC chairmanship was a part-time position and Morton was busy on Capitol Hill, Allison was the defacto day-to-day manager of the Republican Party. This was a huge step up for Allison, and quite a triumph for the Bushes. In a phrase, they had the place wired.

  Once in the Oval Office, some presidents have warmed to the public aspects of their role. FDR, Kennedy, Reagan, and Clinton come to mind. Others retreat into a kind of self-imposed exile. They cut themselves off from outside advice and effectively hunker down against attack. That was the case with Nixon, whose reclusive tendencies were abetted by his national security adviser, Henry Kissinger.

  As a longtime protégé of the Rockefeller family, Kissinger was suspect on both the left and right. Movement conservatives in particular feared that the Rockefellers had a grand global design that included accommodation, rather than confrontation, with the Russians and Chinese. Nixon would become embroiled in this growing dispute within the Republican Party, between the two factions known as the “traders” and the “warriors.”

  The traders were the Eastern Establishment internationalists who supported free trade, arguing that it would prevent another world war. They generally had a sense of noblesse oblige that translated into the “corporate liberalism” of a Nelson Rockefeller, then New York governor, who believed that ameliorative social programs for the needy were the price of a healthy business climate. The warriors, on the other hand
, generally represented new money from the Southwest and Southern California. Although they lacked experience in foreign policy, they resented having to take backseats to their Eastern rivals, especially when it came to the increasingly important task of securing oil and mineral resources in such places as Southeast Asia.

  Personally, Nixon felt more comfortable with the warriors. But especially in his first term, he worked to accommodate both sides, while he and Kissinger fashioned foreign policy themselves, in a way that bypassed the Pentagon, the CIA, and even the State Department. He wasn’t about to let the “the striped-pants faggots on Foggy Bottom” tell him what to do, he said, and that included the Yalies at the CIA.28 As his secretary of state Nixon chose his old friend William Rogers, with whom he had worked on the Al-ger Hiss spy case. Rogers knew little about foreign policy, but Nixon considered that a good thing, because Rogers would keep quiet and do as he was told. “Few Secretaries of State can have been selected because of their President’s confidence in their ignorance of foreign policy,” Kissinger wryly observed.29