The Path to Power (133 page)

The reason for the shortfall was that maximum effort for a candidate would only result if the candidate had men—men he could trust absolutely, men who would give him an all-out effort—“riding the polls” on Election Day, driving from precinct to precinct, exhorting workers who had just brought a carload of voters to the polls to head out immediately to collect another carload, and to keep doing this from the time the polls opened till the time they closed. The Johnson headquarters had done almost none of this—relying on Quill’s men, and on the “City Machine.” Quill had put forth a maximum effort, but the Machine—the deputy sheriffs and other officials who handled the West Side boxes—had not. They got Johnson’s money—but Johnson didn’t get the votes. In fact, they took his money and laughed at him. A leader of the West Side, Frank H. Bushick, Jr., was later to tell him that during the campaign, “I went by your headquarters several times
[and] found an atmosphere of smug self-sufficiency.” Bushick had enrolled nine of his precinct men—“men who have carried their boxes on the West Side for the past fifteen years”—in the Johnson cause, but on Election Day, they were given “the munificent sum of $5 to cover entire expenses for large precincts and voluntary workers. The result being that most of them got disgusted and went home. I know that a number of your friends subscribed ample funds to meet the necessary expenses on Election Day, but frankly, Mr. Johnson, I am afraid it was not spent. Since the election, several of them [local election officials] have laughingly admitted that they
made some money
.”

On Election Day, this shortfall had seemed unimportant—at the time the San Antonio votes had come in, Johnson had been well ahead; it had, in fact, seemed like a triumph that he had carried Bexar County in the face of his unpopularity in the white neighborhoods. But it was to be important now.

So, more serious, was another elementary precaution he had neglected, uncharacteristically, to take. The only way to prevent vote-stealing in crooked counties was by having men on the scene in those counties, to make sure that only voters placed ballots in the boxes, that no illegal instructions were given to voters, that no local politicians looked over voters’ shoulders as they cast their vote—and that, when the precinct was closed, the judges sent in the results before taking the boxes home. It was necessary to keep men on the scene in shifts, twenty-four hours a day, for a day or two thereafter until not only the first but the official returns had been filed. Partly because he thought he was so far ahead—and, more to the point, because he knew that, outside of South Texas (which had been switched to the Johnson camp), O’Daniel had no organization and no acquaintance among election judges and could not steal votes (and because he knew that Mann would not steal votes)—Johnson didn’t, except in a very few instances, take that precaution. And in some cases where he did have men present, once the election judges reported their totals Saturday night, his men were told they could come in to Austin and join the victory celebration.

On Sunday evening, after some 8,500 additional votes had been counted, Johnson still led O’Daniel by more than 4,500 votes—167,471 to 162,910. Mann had 132,915 votes, Dies 76,714. More than 96 percent of the votes had been counted, only about 18,000 remained “out” and almost all of these were in Martin Dies’ East Texas congressional district, where Dies had been garnering the lion’s share of the vote. “Barring a miracle,” announced Robert L. Johnson, manager of the Texas Election Bureau, Lyndon Johnson was elected Senator.

But arrangements for Monday were being completed. In a suite in the Driskill Hotel where four of the key figures in these arrangements had spent the night on the telephone, one of them made a last call as dawn was breaking on Monday. Apologizing for waking its recipient, he said: “Just thought
you’d like to know that we’ve got it in the bag. The Governor is going to the Senate. …”

O’Daniel himself had had nothing to do with the arrangements, but on Monday morning, even he was told about them, and he in turn informed his aides; when one said that Johnson was still thousands of votes ahead, the Governor replied, “Well, that don’t make any difference.” The “drawn anxious looks of those close to O’Daniel” abruptly disappeared, the
Austin American-Statesman
noted. By noon on Monday, the paper reported, “the news was abroad—Pappy was in. … It was noised about in the Senate Chamber.” The capital was snickering over what was about to happen to Lyndon Johnson.

Johnson and his aides were among the last to get the news. At noon on Monday, John Connally was still sending off victory telegrams; he wired a friend in Washington that, while the results were not yet official,
ELECTION BUREAU CONCEDES ELECTION UNLESS MIRACLE HAPPENS. … LOOKS LIKE WE’RE IN
.

Johnson himself was spending the day on Alvin Wirtz’s shadowy, comfortable back porch. The two men, relaxed and happy, were sipping drinks in tall silver glasses while Lady Bird Johnson, the only other person present, took home movies.

The news may have reached them on that porch; the home movie shows Wirtz on the telephone, and as he listens, his face, relaxed a moment before, changes. But, however the news came, when it started coming, it came fast.

At nine a.m. Monday, clerks in the Election Bureau began opening the envelopes—telegrams and special delivery letters—containing “late” returns that had not been counted Saturday or Sunday. Many of these envelopes were from East Texas counties—and almost every East Texas envelope contained figures that were a dramatic reversal of the previous trend. In earlier returns from that section, its Congressman, Martin Dies, had led handily, with the other three major candidates running far behind. In these new returns, Dies’ percentage dropped off sharply. Mann didn’t pick up any of Dies’ votes, and neither did Lyndon Johnson. They went almost entirely to Pappy O’Daniel.

Shelby County, for example, was considered a Dies stronghold, and the report Shelby County had sent in Saturday night had confirmed that. Out of 2,275 votes reported, Dies had received 1,040, or 46 percent, almost as many as the other candidates combined. O’Daniel received 779 votes, or 34 percent, Johnson 241 votes, or 11 percent, Mann 215 votes, or 9 percent. But now Shelby reported 256 additional votes. These were mostly from the same precincts that had reported earlier. But Dies did not do as well as he had done earlier. He received only 82 of these “new” votes—not 46 percent but 32 percent. Johnson and Mann didn’t do as well either: Mann received 6 votes, or 2 percent; Johnson did particularly badly; he received 3 of the
new votes: 1 percent. O’Daniel, who had received 34 percent on the first returns, received 64 percent on these later returns: 165 out of these last 256 votes—165 votes to 3 votes for Lyndon Johnson. When Shelby County’s new figures were included in the Election Bureau tally, therefore, Johnson’s lead was reduced by 162 votes. As Marsh’s
American-Statesman
was to comment bitterly, despite the fact that “These last votes were from the same county, the same folks” who had voted earlier, in this “late” vote “O’Daniel bettered his rate against Johnson, 16 times over.”

This shift was repeated in Newton County, which now reported 556 additional votes. Dies again received a smaller percentage of these votes, and again the difference went entirely to O’Daniel. In the late vote from Newton County, therefore, the Governor outpolled Johnson, 168 to 32. Johnson’s lead was reduced by another 136 votes. This abrupt reversal was repeated in the late returns from other East Texas counties. Still other counties from this section had telephoned in “complete,” if unofficial, returns on Saturday, so that they were now precluded from making substantial changes. But now “official”—written—returns were coming in from these counties by letter or telegram, and many of these written figures were different from the telephoned figures—and the difference was seldom in Johnson’s favor. There were 32 less votes for Johnson in Angelina County than had previously been reported; 69 more votes for O’Daniel in Hardin County; 85 more for O’Daniel in Colorado County. County by county, Johnson’s lead was being sliced away. Jimmy Allred, presiding over a federal court in New Mexico, telephoned Carroll Keach. “I’m listening to the radio,” he said. “They’re stealing this election in East Texas!”

Johnson’s reaction was to try to steal it back. Telephoning George Paar, he asked the Duke of Duval to give him more votes. But Parr refused; he later told friends that he had replied, “Lyndon, I’ve been to the federal penitentiary, and I’m not going back for you.” Johnson got some “corrected” totals from various strongholds: 226 from Austin, for example. But he couldn’t get enough. His strength was in South Texas, and due to his mistake, South Texas had already sent in its official figures; there was little more South Texas could do. East Texas was going for O’Daniel, and because
it
hadn’t sent in its figures, it could give Pappy whatever he needed. Indeed, as Johnson’s effort to improve his total became apparent, his canny opponents held back certain key counties—Trinity County deep in East Texas was one—to see what would be needed at the end; whatever Johnson managed to add, they would be able to add more.

Having rushed back to his headquarters from Wirtz’s porch, Lyndon Johnson sat all day Monday next to a telephone, and almost every ring brought bad news. It was about noon on Monday that the trend to O’Daniel began; at the time, Johnson’s lead was still more than 4,000 votes. Hour by hour—telephone call by telephone call—he had to watch it being sliced away: by seven p.m., Pappy was less than a thousand votes behind. But
there were only perhaps 5,000 more votes to go, and they had to be divided among four candidates—could he hang on? Late in the evening, a bunch of East Texas counties—Anderson, Cass, Panola, Refugio, Van Zandt—reported their “official” returns almost simultaneously. When they had finished, Johnson’s lead was only 77 votes. And there were still more East Texas counties to be heard from. O’Daniel knew what Tuesday was going to bring; when a reporter read him the evening’s final figures, the Governor smiled and said, “Well, that’s looking fine.” And Johnson knew, too. Walter Jenkins tried to console him by telling him he was still ahead. “It’s gone,” Lyndon Johnson replied. Dan Quill was philosophical. “He [O’Daniel] stole more votes than we did, that’s all,” he says. But Johnson’s frustration and rage erupted over hapless aides. One of them, Dick Waters, was taking his wife out to dinner that night, when, as they were leaving the Stephen F. Austin Hotel, they happened to cross Lyndon’s path. Although Waters, a low-level campaign assistant, had had no responsibility, or authority, for seeing that votes were not changed, Johnson began blaming him for what had happened, “screaming and hollering, and throwing his arms like Lyndon can do,” viciously reviling him in front of his wife. Inside the candidate’s suite on the fifteenth floor, Mary Rather sat, hair disheveled, face wan, trying to muster up a smile for Lady Bird’s camera; John Connally wept. Their premonitions were borne out on Tuesday. Hardly had the Election Bureau office opened when more “corrections” began coming in. By the end of the day, O’Daniel was more than a thousand votes ahead; the official final count would give him 175,590 votes to 174,279 for Johnson, a margin of 1,311.

Lyndon Johnson’s loss had been due to a political fluke. He had been beaten not by his opponent’s friends but by his opponent’s foes; O’Daniel had won the Senate seat not because these men wanted him to be Senator, but because they didn’t want him to be Governor—because they wanted to get him out of Texas. But it was Johnson’s mistake that had enabled these men to take his victory away. He had planned and schemed and maneuvered for ten years—had
worked
for ten years, worked day and night, weekday and weekend—had done “
everything
.” And, for ten years, he had won.

He had relaxed for one day. And he had lost.

A
FTER
M
AURY
M
AVERICK
, Franklin Roosevelt’s devoted follower, lost the San Antonio mayoralty in May, 1941, the President wrote Maverick’s sixteen-year-old son to console him for his father’s defeat. “I know he feels badly about it but I also know, because I know him, that he is quietly sure his point of view will prevail in the long run. The same thing is true about Lyndon Johnson. … The things for which he stands will eventually win. He will tell you that, your father will tell you and I also tell you. … Temporary defeats mean nothing as long as our side wins the last battle.”

At the moment at which Roosevelt was writing about “our side”—the side he believed Lyndon Johnson was on—Johnson had already joined the other side, the rabidly anti-New Deal San Antonio City Machine that had defeated Maverick. Roosevelt did not know this—and never found out. He never got more than an inkling of Lyndon Johnson’s quiet alliance with the New Deal’s enemies in Texas.

Nonetheless, sympathy for losing politicians—or, indeed, even tolerance for them—was not one of Franklin D. Roosevelt’s most notable qualities. More than one of Roosevelt’s Capitol Hill supporters who had been defeated in a try for re-election or for election to the Senate had found, after his loss, that his previous access to the smiling, genial President had been cut off, cut off completely, regardless of the depth and extent of his loyalty to Roosevelt and the New Deal. Among those who had suffered this fate, in fact, was Lyndon Johnson’s predecessor in the role of New Deal informant within the Texas delegation: W. D. McFarlane. Ousted from his House seat in 1938 despite a personal appearance by Roosevelt in his behalf, he asked the President to “keep him in mind for any existing vacancies” on the Federal Power Commission, the Federal Communications Commission, or the federal bench. Roosevelt kept him in mind for nothing. McFarlane received a federal appointment—a temporary, low-level appointment as a Special Assistant Attorney General assisting in condemnation proceedings in connection with the Denison Dam—only through the intercession of Sam
Rayburn, who did so because McFarlane had been one of the old group of Populists in the Texas Legislature. White House aides were wondering whether Johnson’s loss, with such strong Roosevelt backing, had not proven embarrassing to the President—and they were wondering what Roosevelt’s reaction would be.

They were not kept long in doubt. After his defeat, Lyndon Johnson sent a two-paragraph note to Franklin Roosevelt.

In the margin of the note, the hand of Franklin D. Roosevelt wrote, “General Watson—I want to see Lyndon.”

The day after the two men met, Johnson wrote Nan Honeyman: “Had a visit with the Boss today and enjoyed it immensely.” The enjoyment was understandable. The President had asked Corcoran what he could do to cheer “Lyndon” up, and had accepted Corcoran’s suggestion: Roosevelt was to address the national convention of Young Democrats in Lexington, Kentucky, in August; Corcoran suggested that the President put Johnson on the program with him. Roosevelt did so. When Johnson came in to see him, the President told him he had already arranged for him to give a speech preceding his own. The young Congressman’s defeat had only strengthened Roosevelt’s “special feeling” for him—despite the defeat, the older man had arranged to give him his first national exposure, the national exposure that he craved.

So completely had Roosevelt accepted Johnson’s excuse—that he had lost the election only because he had been cheated out of it—that he joked about it, telling him, “Lyndon, apparently you Texans haven’t learned one of the first things we learned up in New York State, and that is that when the election is over, you have to sit on the ballot boxes.”

F
RANKLIN
R
OOSEVELT’S
G
REATEST
SERVICE
to Lyndon Johnson in connection with the 1941 campaign came not during the campaign but long after it had ended.

In July, 1942, while examining the books of Brown & Root, Inc., in connection with other matters, Internal Revenue agents became suspicious of the large bonuses to the firm’s officials and of various “attorney’s fees,” and began following the trail of that money to see where it had ended up—and the trail led to the Lyndon Johnson campaign.

Brown & Root, Inc., had been advised by tax counsel that campaign contributions by the corporation would not be deductible business expenses. But Brown & Root had deducted hundreds of thousands of dollars in “bonuses” and “fees” that IRS agents now suspected were actually disguised contributions. Moreover, while the potential financial liability (payment of additional taxes plus penalties and interest) would be substantial for Brown & Root even at the new level of affluence to which Lyndon Johnson had raised the firm, as the IRS investigation intensified and widened, the dangers were no longer limited to the financial. The agents had begun to wonder if Brown & Root’s attempt to avoid taxes by such devices was so blatant that it might constitute an attempt to defraud the government—and tax fraud was a crime that could result in jail terms for those convicted of it. By the Autumn of 1942, Brown & Root’s officials knew, as one of their attorneys, Edward A. Clark, puts it, that “they had
big
IRS trouble.”

The man to whose campaign the contributions had been made had trouble, too. Charges involving contributions to his campaign—or even the revelation that charges were being considered—would result in highly damaging publicity. Revelation of the astonishing sums involved—hundreds of thousands of dollars when the Corrupt Practices Act limited the permissible expenditure by a candidate to $25,000—could result in a scandal of dimensions that could end a politician’s career.

For about four months after the investigation began, all concerned felt it could be deflected because of Johnson’s White House connections. Brown & Root retained Alvin Wirtz as its attorney on the matter, but even a former Under Secretary of the Interior might have trouble winning this case; it was Johnson on whom the firm was depending. “They hired Wirtz for the IRS thing because they knew Johnson would be associate counsel on the case,” Clark says.

Johnson did not shrink from the role; he was developing a line of strategy to solve the problem. The first step was to convince James H. Rowe, Jr., who was Johnson’s liaison to the President, that the Internal Revenue Service investigation of Brown & Root was politically inspired by IRS officials in Texas loyal to the Garner-Jesse Jones group—and was aimed at cutting off vital Texas financial support for the New Deal. Although this was not true, it was not difficult for so persuasive a talker as Lyndon Johnson to convince men who knew nothing about Texas politics that it was. Rowe, who admired Johnson and believed in him, was thoroughly convinced. During the Summer of 1942, he was to recall,

Rowe was later to tell Grace Tully that the President had responded to the memorandum: “So far as I can determine, and I think it is with accuracy, the President spoke to Marvin McIntyre about it. Mac called John Sullivan [Assistant Commissioner of the Bureau of Internal Revenue]. …” Rowe assumed that the matter had been closed.

But it hadn’t. The contributions to the Johnson campaign that were being investigated were too large, the manner in which they had allegedly been concealed too blatant.

The next attempt was made with Sullivan’s superior, Internal Revenue Commissioner Guy T. Helvering, known to Washington insiders as “the President’s man at IRS.” Johnson made the attempt himself; he went to Helvering, told him the same story, and asked him to kill the investigation. But this attempt foundered on the invincible integrity of Helvering’s superior. Internal Revenue was a bureau in the Department of the Treasury, and the Secretary of the Treasury was Henry Morgenthau, Jr., a man detested by the young wheelers and dealers of the New Deal for his unshakable adherence to the law. The investigation would go right ahead, Morgenthau declared.

Now, Rowe recalls, “the Browns were worried … and so was Johnson.” Johnson, he says, “was in trouble,” and he knew it. In October, 1942, Wirtz and George Brown came to Washington and discussed the situation with Johnson. Then Johnson and Brown talked to Rowe. Johnson and Rowe both realized how thin was the ice they were treading on now. Rowe had been invited to the Washington town house Brown & Root maintained at Sheridan Circle. When Rowe learned what the subject of the discussion was to be, he recalls, “I said, ‘I’ll talk to you outside on the street. The IRS probably has this house bugged.’” And that is where they talked—three tall young men, the newly made millionaire, the advisor to Presidents, and the future President, standing on a street in Washington.

“Johnson was worried,” Rowe recalls. Reiterating that the investigation was a form of political persecution, a reprisal for his support of Roosevelt, he asked Rowe to take further steps to kill it. Rowe tried. He went to see Helvering himself, and they discussed the matter: “just the two of us—no, no, that’s not right; he had a witness like those fellows always do. But I said, ‘What the hell, I’ll talk anyway.’ He said Johnson had been
to see him to ask him to kill it. ‘Well, I can’t. I would, but the Secretary [Morgenthau] won’t let me.’”

Rowe had made this approach “on my own.” Now he knew that a stronger hand was needed. On November 20, he attempted to bring the subject to the attention of Morgenthau’s superior, by sending a memo ostensibly addressed to Grace Tully. “Helvering has indicated that he can take care of this Texas situation without any trouble, and fairly, but he won’t do it if Morgenthau is going to interfere at the last minute. If Helvering gets told by the President to handle it, and if he is backed up, he will do it.” Apparently Morgenthau’s superior took an interest in the case. Says Rowe: “Then I—and
this
I would
not
have done without Roosevelt’s clearance—I went in to see Morgenthau and I got to thinking, ‘Rowe, you’d better be tactful.’ Morgenthau taped everything—everyone knew that. And I just mentioned it—vaguely; just brought it up; I mentioned it to see what he’d say, and he didn’t say much. And I just faded out.”

Morgenthau may not have said much to Rowe, but the Secretary may have issued instructions nonetheless. The IRS agents had, some weeks earlier, been ordered by one of Morgenthau’s aides to stop working on the Brown & Root case until further notice. On December 17, 1942, shortly after Rowe’s approach to Morgenthau, the agent coordinating the case, E. C. Werner, was told to send the Brown & Root file to Washington, which he did by special delivery. Shortly thereafter, Werner and James M. Cooner, special agent in charge of Texas and Louisiana for the IRS, were summoned to Washington to meet with top IRS officials, who, Werner was to write in his diary, “had me explain in detail the fraudulent items and suspicious items.” The next day, they called him back, and gave him his instructions: in Werner’s words,

And in 1943, the Internal Revenue Service began to close in on the truth behind the financing of Lyndon Johnson’s senatorial race.

On January 22, the six agents involved held a conference in Dallas, and decided on their tactics. Some moved right into the Houston offices of Brown & Root and began checking through the firm’s records. Others went to banks and began checking the deposits and withdrawals of some Brown & Root officials. Still others began interviewing these officials and began checking their stories against the records.

The largest sums of money the agents were investigating at this point were the “bonuses” totaling $150,800 that had been paid to Brown & Root’s treasurer and to four of the corporation’s vice presidents. These bonuses had, according to an entry in the company’s books dated December 27, 1940, been authorized at a meeting on that date. But now the federal agents tracked down a former Brown & Root bookkeeper, Robert C. Home, and interviewed him at McAllen, Texas. Home told the interviewers that, despite the date in the books, the bonuses had actually been authorized not in 1940 but in 1941. The agents investigated further; as a result, Werner was to write in a report to his superiors: “Sufficient evidence is on hand, it is believed, to show minutes authorizing above bonuses to be fraudulent.” Other, smaller, bonuses totaling $24,000 had been paid to lower-ranking Brown & Root executives, the agents found. They obtained transcripts and photostats of the executives’ bank accounts, and Werner reported that he and his men were tracing the disposition of this money; that they had already found, and taken possession of, one check by which $2,500 had been transferred to the Johnson campaign’s bank account; and that a substantial portion of the rest of the $24,000 “is believed to have been used for [Johnson’s] Senatorial campaign.”

The more they worked on the case—Case No. S.I. 19267-F in Internal Revenue Service files—the more questionable transactions they uncovered. Some of the routes by which, the IRS agents believed, the Brown & Root money had reached Lyndon Johnson’s headquarters were extremely circuitous. Some of them, in fact, led not from Brown & Root but from one of its subsidiaries, the Victoria Gravel Company. It had been not Brown & Root but Victoria Gravel, for example, that had paid a total of $12,500 in “attorneys fees” to Edgar Monteith, a Houston lawyer. And further steps, they believed, had then been taken to cloud the ultimate destination of the money. Ten thousand dollars of it was given by Monteith to his partner, A. W. Baring, as a “profit distribution.” Then Baring had transferred the $10,000 back to Monteith. And the checks Monteith wrote were not to the Johnson campaign directly, but to pay bills owed by the campaign to radio stations and printers. The remaining $2,500 of the “fee” paid to Monteith was passed on by him to another attorney, and it was through this attorney that the money reached the campaign. The trail of some of the money was made harder to follow because while it may have started out as checks, it was soon converted into cash. When, for example, J. O. Corwin, Jr., was given a Victoria Gravel check for $5,000, he cashed it, stuck half the bills in an envelope, and mailed the currency to Johnson headquarters. And, the agents believed, some of the money didn’t even start out as checks; it was cash from the start—large expenditures being made from a “petty cash” fund under the control of Brown & Root Vice President J. M. Dellinger.