by David Talbot
As the smoldering Malaxa scandal threatened to erupt into flames in the final days of the 1952 presidential race, Dulles moved quickly to douse it. After Wisner and Mason showed him Malaxa’s $100,000 check, the deputy CIA director knew that he would have to send it up the chain of command to his boss, General Walter Bedell Smith. But Dulles also realized that, in this case, passing the buck was as good as destroying the evidence. CIA director “Beetle” Smith had served as Eisenhower’s intensely dedicated chief of staff during the war, and he was just as devoted to Ike’s presidential victory as Dulles.
It was Gordon Mason who was given the unpleasant task of showing the evidence of Nixon’s corruption to General Smith, who predictably flew into a rage. “Smith was a man who could cuss in three languages and in almost every sentence,” recalled Mason. “He also had a violent temper, and he acted as though I personally was trying to scuttle Eisenhower.” Smith demanded that Mason immediately gather up every scrap of incriminating material against Nixon and bring it to his office. “The story was cleaned from the books,” said Mason. Wisner, too, had no doubt what was done with the evidence. “Beetle just flushed it all down the toilet.”
Without a copy of the Malaxa check, Drew Pearson could not keep the story going, and it soon petered out. On Election Day, Eisenhower and Nixon swept to a decisive victory, winning 55 percent of the vote and carrying thirty-nine of the forty-eight states.
After the Republican triumph, Dulles and Nixon were finally able to speed Malaxa’s immigration case through the bureaucracy. In December 1953, officials in Eisenhower’s Justice Department bypassed Congress and the INS and granted Malaxa permanent residence through an administrative decree. Justice Department officials explained that they had reached their decision due to the unique technical services provided by the Western Tube Corporation. The fact that Malaxa’s company did not actually exist—and never would—was politely overlooked by the new administration.
Nicolae Malaxa lived out the rest of his days in the comfort of his Fifth Avenue apartment. He began to fancy himself a great benefactor. In January 1953, shortly before Eisenhower’s inauguration, Malaxa reached out the hand of friendship to a prominent Jewish exile named Iancu Zissu. Malaxa sent word that he was eager to meet with Zissu, who was the cofounder of a Romanian exile group. The odd meeting took place in the New York apartment of a popular Romanian singer. According to one witness, “Malaxa told Zissu that he had wanted for some time to know him because he is a great friend of the Jews and a great admirer of the Jewish religion. Malaxa stated that if he could change his own religion, he would adopt the Jewish faith.”
As he bid Zissu farewell, Malaxa “assured him that those who had been his friends had never had reasons to regret it.” It was a surprising burst of goodwill—or, more likely, another attempt by the wily millionaire to buy political support.
From the financial patron of Iron Guard butchers to “great friend of the Jews”—it was just one more grotesque twist in a life filled with them.
9
The Power Elite
For the Dulles brothers, the Eisenhower-Nixon victory was the culmination of years of political strategizing dating back to the Roosevelt era. They had come achingly close to achieving their dreams in the 1948 election, only to see their longtime ally Tom Dewey lose in the most shocking upset in American history. But now they were headed for the very center of Washington power. As the new heads of the State Department and the CIA, they would direct the global operations of the most powerful nation in the world. The fraternal partnership gave the Dulles brothers a unique leverage over the incoming administration, and they were imbued with a deep sense of confidence that these were the roles they were destined to play.
The 1952 presidential election represented the triumph of “the power elite,” in the phrase coined by sociologist C. Wright Mills, academia’s most trenchant observer of Cold War America. Mills was a ruggedly independent, Texas-born scholar. He lived in a farmhouse forty miles outside of New York City and rode a motorcycle that he had built with his own hands to the classes he taught at Columbia University. He favored flannel shirts and work boots, and confided to friends that “way down deep and systematically I’m a goddamned anarchist.” Mills rejected both the tired Marxist discourse that had dominated New York intellectual circles since the 1930s and the “romantic pluralism” that characterized conventional theories about American politics. According to Mills, power in America was not solely in the hands of Marx’s “ruling class”—those who owned the means of production. Nor was it a balancing act of competing interests, such as big business, organized labor, farmers, and professional groups. This ebb-and-flow concept of power—which was clung to by liberal and conservative scholars alike—was a “fairy tale,” in Mills’s words, one that was “not adequate even as an approximate model of how the American system of power works.”
Instead, Mills wrote in his 1956 masterpiece The Power Elite, America was ruled by those who control the “strategic command posts” of society—the big corporations, the machinery of the state, and the military establishment. These dominant cliques were drawn together by their deep mutual stake in the “permanent war economy” that had emerged during the Cold War. Though political tensions could flare within the power elite, Mills wrote, there was a remarkable unity of purpose among these ruling groups. The top corporate executives, government leaders, and high-ranking military officers moved fluidly in and out of one another’s worlds, exchanging official roles, socializing in the same clubs, and educating their children at the same exclusive schools. Mills called this professional and social synchronicity “the fraternity of the successful.”
Within this system of American power, Mills saw corporate chiefs as the first among equals. Long interlocked with the federal government, corporate leaders came to dominate the “political directorate” during World War II. The United States had largely become a democracy in form only. More than half of a century before the John Roberts–era Supreme Court that legally sanctioned corporate control of the electoral process, Mills recognized that the shift toward oligarchy was already well under way: “The long-time tendency of business and government to become more intricately and deeply involved with each other has [now] reached a new point of explicitness. The two cannot now be seen clearly as two distinct worlds.”
The crucial task of unifying the power elite, according to Mills, fell to a special subset of the corporate hierarchy—top Wall Street lawyers and investment bankers. These men were the “in-between types” who shuttled smoothly between Manhattan corporate suites and Washington command posts. Little known to the general public, these skilled executors of power constituted in Mills’s words America’s “invisible elite.” They were the men who forged the consensus on key decisions of national significance and who made certain that these decisions were properly implemented. Their work was largely unseen and vaguely understood, but it had enormous impact on the lives of ordinary men and women. It was men like John Foster Dulles and Allen Dulles whom Mills had in mind when he wrote of the power elite’s inner core.
Born in Waco to an insurance salesman and a housewife and educated at the University of Texas and the University of Wisconsin, Mills was steeped in a native populism rather than the European ideologies of the New York intelligentsia. A big, broad man with an endless appetite for argument, he could debate for hours on end with the likes of Dwight Macdonald and Irving Howe. But he eschewed the hothouse sectarianism of the New York left, as well as the compulsory mood of “American celebration” that had been embraced by nearly all of his intellectual colleagues in the Eisenhower years, searching instead for a new language to explain the American colossus that had emerged in the postwar era. Mills took aim at the most important topics in American society: the soul-killing, “cheerfully robotic” regimentation of corporate life; the unique terrors of the nuclear age—an age, he argued, when war itself had become the enemy, not the Russians; and, of course, the overworld of American power, a realm that
he believed few average citizens could grasp, even though it cast a long shadow over their daily existence.
“Take it big!” the intellectually ambitious Mills liked to exclaim. He wrote in a vigorous, clear style that rejected the academic caste’s “bloated puffery of Grand Theory,” in sociologist Todd Gitlin’s words. Soon after The Power Elite was published, it began stirring wide debate, catapulting over the ivy-covered walls of academia onto the bestseller list.
Writing in The New York Times Book Review, corporate lawyer and presidential adviser Adolf Berle—a member in good standing of the power elite—found “an uncomfortable degree of truth” in Mills’s book but fought off his discomfort by concluding that it was essentially “an angry cartoon, not a serious picture.” Mills also struck a sensitive nerve with Cold War liberals like Arthur Schlesinger Jr., whom he accused of abandoning their intellectual independence by joining the era’s American celebration. Schlesinger fired back, charging that Mills’s book seemed more intent on stirring the masses than on stimulating serious academic debate. “I look forward to the time when Mr. Mills hands back his prophet’s robes and settles down to being a sociologist again,” he wrote in the New York Post.
Mills considered himself an intellectual loner—“I am a politician without a party,” he wrote in a letter. But The Power Elite touched a deep chord with a rising new generation of revolutionaries and radicals that was soon to make its impact on history. Young Fidel Castro and Che Guevara pored over the book in the Sierra Maestra mountains. And, at home, Tom Hayden drew heavily on Mills’s writing for the Port Huron Statement, the manifesto of the emerging New Left.
By the time the Port Huron Statement was presented to the Students for a Democratic Society convention in June 1962, C. Wright Mills was dead—felled by a heart attack in March of that year, at age forty-five. But his critique of the power elite—and his sense of its fundamental, undemocratic illegitimacy—would continue to heavily influence the 1960s generation. Six years after his death, in the wake of the global youth uprisings of 1968, the CIA continued to identify him as one of the leading intellectual threats to the established order.
Schlesinger was partly right about Mills. Though he was a rigorous researcher and a careful craftsman, The Power Elite did indeed resound here and there with a prophet’s moral urgency. Mills, who was deeply concerned about the runaway nuclear arms race of the Eisenhower era, knew that America’s rulers not only possessed terrifying instruments of violence, these men felt largely unrestrained by democratic checks and balances. The ability of American leaders to end life on the planet imbued them with a dark power in Mills’s mind—one that inspired impassioned passages like the concluding paragraph of The Power Elite:
The men of the higher circles are not representative men; their high position is not a result of moral virtue; their fabulous success is not firmly connected with meritorious ability. . . . They are not men shaped by nationally responsible parties that debate openly and clearly the issues this nation now so unintelligently confronts. They are not men held in responsible check by a plurality of voluntary associations which connect debating publics with the pinnacles of decision. Commanders of power unequaled in human history, they have succeeded within the American system of organized irresponsibility.
Men like the Dulles brothers rejoiced in such “organized irresponsibility.” Democracy, in their minds, was an impediment to the smooth functioning of the corporate state. John Foster Dulles had made this clear early in his Wall Street career as he jousted with FDR’s New Deal bureaucracy. Complaining to Lord McGowan, chairman of Imperial Chemical Industries, about government efforts to control the spiraling power of global cartels, Foster once acidly remarked, “The fact of the matter is that most of these politicians are highly insular and nationalistic . . . [so] business people . . . have had to find ways for getting through and around stupid political barriers.” Allen, for his part, had gone through his espionage career with similar disdain for presidential directives and “stupid political barriers.” As Richard Helms put it, with typically droll understatement, “There can be no question that Dulles felt most comfortable running things on his own with a minimum of supervision from above.”
When Franklin Roosevelt moved into the White House in 1933, he was well aware of the entrenched interests that he would be confronting as he attempted to reform the country’s financial system and to create a social buffer against the havoc of the Depression. “The real truth,” FDR wrote to Colonel Edward M. House, President Wilson’s close adviser, “as you and I know, is that a financial element in the larger centers has owned the Government ever since the days of Andrew Jackson.” For a brief period during the widespread devastation of the 1930s, the New Deal was able to challenge this “plutocracy,” as Roosevelt called it. The Roosevelt presidency did not dismantle the power elite, Mills later wrote, “but it did create within the political arena, as well as in the corporate world itself, competing centers of power that challenged those of the corporate directors.”
But the militarization of government during World War II began to return power to the corporate elite, as captains of industry and finance moved into key government posts. The Eisenhower presidency would complete this political counterreformation, as Washington was taken over by business executives, Wall Street lawyers, and investment bankers—and by a closely aligned warrior caste that had emerged into public prominence during World War II.
During the Eisenhower administration, the Dulles brothers would finally be given full license to exercise their power in the global arena. In the name of defending the free world from Communist tyranny, they would impose an American reign on the world enforced by nuclear terror and cloak-and-dagger brutality. Elevated to the pinnacle of Washington power, they continued to forcefully represent the interests of their corporate caste, conflating them with the national interest.
C. Wright Mills was among the first to take note of how “national security” could be invoked by the power elite to more deeply disguise its operations. The Dulles brothers would prove masters at exploiting the anxious state of permanent vigilance that accompanied the Cold War. “For the first time in American history, men in authority are talking about an ‘emergency’ without foreseeable end,” Mills wrote. “Such men as these are crackpot realists: in the name of realism they have constructed a paranoid reality all their own.”
This chilling observation, which still has disturbing echoes today, captured the gloomy zeitgeist of the Eisenhower-Dulles era. It was a time of American celebration—of unprecedented prosperity and unparalleled military prowess—as well as hair-trigger nuclear tensions. Only a few maverick voices—like that of the intellectual loner from Texas—grasped the frightening amorality that prevailed at the pinnacle of American power.
President Eisenhower enjoyed being in the company of wealthy and powerful men. He filled his administration with power players from the Dewey-Dulles–Rockefeller-Luce–dominated New York nexus, as well as from the higher rungs of industry and the Pentagon. Wall Street lawyer Herbert Brownell was named attorney general after running Ike’s campaign, General Motors CEO Charles Wilson was tapped to run the Defense Department, and Chase Manhattan chairman and former diplomat John McCloy—the very personification of the power elite—was called upon as a national security adviser. Even the Eisenhower administration’s second rung of power—the undersecretaries and deputies level—was weighted with men like Wall Street banker C. Douglas Dillon, another close associate of the Dulles brothers. The exclusive ranks of the Council on Foreign Relations, where the brothers had long held sway, was a particularly fertile ground for administration recruiters.
Ike also liked to spend his leisure time with the high and mighty. The avid “golfer-in-chief” often had prominent business executives and Army generals in tow during his twice-weekly trips to the verdant links at Burning Tree Country Club in Bethesda, including the CEOs of General Electric, Coca-Cola, Reynolds Tobacco, and Young & Rubicam.
Merriman Smit
h, the longtime White House wire service reporter, defended Ike’s strong affinity for the power elite: “It would be unfair to say that he likes the company of kings of finance and industry purely because of their Dun and Bradstreet ratings. He believes that if a man has worked up to become president of the Ford Motor Company [or] head of the Scripps-Howard newspapers . . . then certainly the man has a lot on the ball, knows his field thoroughly and will be literate and interesting.” To which one observer, quoted by Mills, mordantly responded: “This business of working your way up will come as quite a surprise to young Henry Ford or young Jack Howard [the scion who inherited the Scripps-Howard chain].”
Eisenhower was comfortable in the company of these men because he shared their conservative, business-oriented views. President Truman, who had helped pave the general’s path to the White House by appointing him the first supreme commander of NATO forces in 1951, tried to persuade Eisenhower to run for president as a Democrat, promising that he would “guarantee” him his party’s nomination. But Eisenhower replied, “What reason have you to think I have ever been a Democrat? You know I have been a Republican all my life and that my family have always been Republican.” When Truman persisted, Ike made it even more plain, telling him that his differences with the Democrats, particularly when it came to the party’s pro-labor positions, were simply too immense for him to consider such a course.
Meanwhile, the Dewey-Dulles group’s courtship of Eisenhower to become the Republican standard-bearer, which had begun two years earlier, was coming to a successful conclusion. Dewey had first broached the subject of a White House run at a private meeting with Eisenhower in July 1949, following the governor’s own traumatic presidential defeat. Dewey had beseeched the reluctant general to jump into the political arena, telling him that he was the only man who could “save this country from going to Hades in the handbasket of paternalism, socialism [and] dictatorship.”
