Further discussion was to be necessary. In compliance with its previous brief, the IRS had thus far not checked “outside,” but Morgenthau’s message now removed those restraints, and in December, 1943, the agents took their first steps in this direction. They began trying to find out the identity of the individuals in the “Johnson campaign” who had received the possibly illicit contributions, and what they had done with them. Their first approach, on December 6, was to a clerk at headquarters, Mrs. Margarite Kelly, who didn’t know enough to be helpful. Their second, on December 15, was to Sherman Birdwell; “He told me nothing,” Werner wrote after that interview. Their third was no more productive; Herman Brown had said that he had given $5,000 to Walter Bremond of the Capitol National Bank. Bremond told Werner “he couldn’t recall” to whom he paid the $5,000. But the agents had scheduled a fourth interview—with someone who might have told them quite a lot.
He was Wilton Woods, who at college had, on Johnson’s advice, dated girls so the White Stars could control them, and had written Johnson’s editorials and run his errands—and who had continued to run errands, including the carrying of money, for his idolized Chief ever since.
Internal Revenue agent Werner was particularly interested in several items that involved Woods. One was a sum of $1,000 which the IRS agents believed had been given to him—by “contact man” Young—on June 14, 1941. Another was the sum of $7,500, which had been given to him by Brown & Root. The IRS’s curiosity about this item had been piqued by the fact that this was a rather large sum for the company to hand over to an assistant personnel supervisor who at the time was earning $225 per month; by the fact that when the Brown & Root official who had signed the check was asked if Woods had done anything around Corpus Christi to earn it, he replied, “I don’t believe so”—and by the fact that, whatever the expenditure might have been for, Brown & Root had not reported it. The IRS agents believed that the $7,500 was linked to a trip Woods had taken to Washington, D.C. They wanted to know to whom in Washington Woods had given the money—and for what purpose. Woods was scheduled to be the subject of a formal IRS interview, at which his testimony would be recorded, on January 6.
By this time, the stakes involved were huge. With the investigation not nearly complete, the amount by which the IRS team calculated that Brown & Root had underpaid its taxes had already mounted to $1,099,944. Since the IRS penalty where fraud could be shown was fifty percent, Brown & Root would owe the government an additional $549,972, for a total of $1,649,916. And money was no longer what was most significantly at stake. Irey’s conclusion that “fraud was present” was echoed by Werner, and the penalties for tax fraud, as opposed to tax underpayment, included jail as well as money. Nor were the potential losses only those of Brown & Root. Lyndon Johnson had a lot to lose, too, and not only in terms of career-tarnishing publicity and scandal. Should Herman Brown—and his company, and some of his employees—be found guilty of fraud for the manner in which they had financed Lyndon Johnson’s campaign, would Brown be willing to finance other campaigns? Herman’s money—Brown & Root money—had been an essential element of Johnson’s rise to power, and Johnson was going to need it again. What if it wasn’t there for him when he needed it?
A new attempt had to be made at the White House, and it was not to be sufficient for Wirtz to try to make it alone. On Monday, December 27, Werner was working in Austin, preparing for his interview with Woods. Wirtz was working, too. Roosevelt returned to Washington that day after a weekend in Hyde Park, and Wirtz telephoned the White House and asked for an appointment with the President. The appointment had apparently still not been set up when Woods was interviewed by Werner on January 6. He was accompanied by Attorney Everett Looney, and the IRS notes on the interview state that “In re: $7500 in fees from B&R and Washington, D.C. trip,” Woods “declined to answer all questions on above fees on advice of counsel on basis that it might incriminate him.” He gave the same answer to the IRS inquiries about the $1,000 fee, and when, Werner notes, he was “given opportunity to tell of any other unreported receipts,” Woods again “declined to answer on grounds it might incriminate him,” although he did say that “at time of preparation of return he thought it was true and correct.” And on January 11, 1944, Lyndon Johnson telephoned the White House and asked for an appointment with President Roosevelt. The secretary who took the message for Pa Watson wrote Watson that Johnson “is very anxious to see the President as quickly as he possibly could. He says it is not a ‘Sunday School’ proposition.”
LYNDON JOHNSON AND ALVIN WIRTZ saw President Roosevelt on January 13, 1944, at 11:50 a.m. At 4:30 that afternoon, Elmer Irey telephoned Texas. He had been ordered to be at the White House at ten o’clock the next morning to give a full report to the President on the income-tax investigation into Brown & Root, Inc., he said.
Irey asked Werner to send him, in time for his meeting with the President, “detailed information on political payments made by Brown & Root, Inc., to the Lyndon Johnson 1941 senatorial campaign.” So that the information would reach him before he had to leave for the White House, he asked that it be sent over the government teletype in the Houston office of the Bureau of Narcotics. The report was unequivocal: after listing the $150,800 in bonuses, for example, Werner stated: “Sufficient evidence is on hand, it is believed, to show minutes authorizing above bonuses to be fraudulent.” Then the report listed specific drawings against those bonuses which had been traced directly to the Johnson campaign—the $2,500 from Randolph Mills, for example, or the $2,500 which “Corwin admits” was donated to the campaign, together with what the IRS team believed was sufficient evidence to prove the case: of the Mills bonus, for example, Werner wrote: “Admitted by Mills. We traced to Johnson Bank Account and have Recordak facsimile of check.”
But the opinion of the six agents who had been working on the Brown & Root investigation for eighteen months was not to carry much weight in its ultimate disposition. Johnson and Wirtz had seen Roosevelt on January 13. On that day, a new agent, who had no previous knowledge of the case, was sent to Texas from the IRS bureau in Atlanta, Georgia, to make a “separate investigation” of it. Arriving in Texas on January 17, this new agent began studying the case. He proved to be a quick study indeed. Three days later, he told Werner, “The case as it now stands does not have quite enough evidence, in my opinion, for the Chief Counsel’s office to pass it for prosecution but there is ample to sustain the 50% penalty.” The next day, he confirmed this, adding that, as Werner put it in his diary, “he would recommend against making a prosecution case in view of Brown & Root, Inc.’s participation in the war effort.” Then he left for Washington, D.C.
The Georgia agent had also told the Texas agents that “he could see no reason why we should not be permitted to finish our investigation of certain unfinished work which we had detailed to him.” But this work was, in fact, never to be finished. On February 15, IRS Chief of Intelligence W. H. Woolf told Cooner that it had been decided, based on the facts “now in hand,” that there was insufficient evidence on the Brown & Root, Inc., case to “sustain criminal prosecution,” and that the “likelihood of developing proof adequate for that purpose is too remote to justify further extension of the investigation.” The Texas agents were ordered to submit final reports on the “basis of the facts now in hand.”
Agents who had actually been working on the case felt that the facts “now in hand” only scratched its surface; because of the earlier orders that “no outside persons were to be interviewed,” they had been restricted until recently to interviewing Brown & Root officials; only within the past few months had they begun talking to members of the organization that had received the questionable contributions: the Johnson campaign. In fact, they had talked only to a handful of campaign aides—all low-level. They had not talked to the campaign’s higher-ups: Wirtz, for example. They had not talked to the candidate. They did not agree with the Georgia agent’s conclusion that the facts “now in hand” were insufficient for prosecution,
but even if he were correct, they felt that if they were allowed to investigate the link between Brown & Root and the Johnson campaign thoroughly, much new evidence would be developed.
Werner asked, apparently on behalf of the rest of the team, to be allowed to continue the investigation. On March 2, he received his answer: he was ordered to drop the case—at once, and forever. A letter from Chief of Intelligence Woolf reiterated that the case was to “be reported by the examining agents on the basis of facts now in hand with a view to placing the case in line for disposition under routine field procedure. … A further extension of the investigation as proposed by Special Agent Werner will be inconsistent with this finding and it is accordingly directed that the case be disposed of as indicated above.”
On June 28, Werner submitted his final report on Case S.I.-19267-F, showing tax deficiencies of $1,099,944 and a penalty of $549,972. But even this was to be scaled down. After a series of further conferences between IRS officials and Wirtz, Brown & Root was ultimately required to pay a total of only $372,000. There were of course no fraud indictments, no trial, no publicity. Franklin Roosevelt had already done so much to advance Lyndon Johnson’s career. In this instance, it may be he who saved it.
*George Brown made three other statements of particular interest: (1) Brown & Root had never paid to get a contract; (2) he was under the impression that amounts paid for goodwill, whether to a Congressman, president of an oil company, etc., were proper; and (3) Brown & Root had on rare occasions promoted local bond elections—including one in Duval County.
36
“Mister Speaker”
IN THE FLOOD of endorsements from “big names” in Washington on behalf of Lyndon Johnson’s senatorial bid, had one name been, for most of the campaign, conspicuously absent?
Sam Rayburn’s coldness in October, 1940, when he had been reluctant to endorse Johnson for a post with the Democratic Congressional Campaign Committee, had been thawed somewhat by Johnson’s performance in that role; Rayburn knew how much he owed Johnson for helping to preserve the Democratic majority in the House, and thereby helping him keep the Speakership. Rayburn was a man who always paid his debts. After the campaign, he was again courteous to Lyndon Johnson on Capitol Hill.
But the thaw was only partial. The greatest favor Rayburn had bestowed on him—entrée to the “Board of Education,” where crucial House decisions were made and strategy was discussed—was withdrawn; no longer, when Rayburn left the Speaker’s chair in the late afternoon and headed for the room in which the House leaders met, did he invite Johnson to “come on down.” Had the Speaker guessed—or learned—how Lyndon Johnson had betrayed his friendship; how, to help his own career, the young man of whom he had been so fond had turned the President against him by falsely portraying him as the President’s enemy? To an effusive letter from Johnson in November, 1940, after the campaign had ended, there was no reply. A month later, Johnson arranged to be one of the speakers at an “appreciation banquet” held for Rayburn in Dallas, and played a high card to a man who so desperately wanted a son: Johnson said he had been a young boy accompanying his father to the State Legislature when he had first met Sam Rayburn; ever since, he said, he had regarded Mr. Sam as “like a father to me.” When, however, Congress reconvened in 1941, Johnson found the door to the Board of Education still closed to him, and it remained closed all that year; during this year, encountering House parliamentarian Lewis Deschler late one afternoon on the landing of the staircase near the Board room, he said, almost shouting: “I can get into the White House. Why can’t I get into that room?”
This was a rare outburst, however. It was not in Lyndon Johnson’s interest for Capitol Hill to become aware that he was no longer on intimate terms with the Speaker, so few hints of the true state of affairs escaped his lips. As for Sam Rayburn, whose grim face had turned only harder now that he held at last the gavel—and the power and the responsibility that came with it—no one would have dared to ask him. It was generally assumed, therefore, that the relationship was intact. Johnson’s staff hoped the Speaker would come to Texas and campaign for Johnson, and they were sure he would at least endorse him—and they were planning to make the endorsement a centerpiece of the campaign by emphasizing it, over and over, in a series of newspaper advertisements and in brochures. When they learned that Rayburn had, during the week of April 22, helped dissuade Wright Patman from making the race, they were sure he had done so on Johnson’s behalf, and that the endorsement would follow shortly.
It didn’t, and approaches were therefore made to the Speaker. At first, they were indirect; one was made, still in late April, through Representative Poage of Waco, who told Johnson of Rayburn’s response: “He said that he did not feel that he should make any kind of statement in the ‘Record,’ although he was writing all of those that he had an opportunity telling them that he was definitely for you.”
Private letters were not sufficient; what was needed was a public endorsement, and it was needed early in the campaign. During the next weeks, Rayburn was pressed harder and harder, but no endorsement was forthcoming. On May 29, Johnson telegraphed John Connally—and one of the significant aspects of this telegram is that Johnson is asking someone else to call Rayburn rather than doing it himself—YOU OR SENATOR [WIRTZ] CALL RAYBURN TODAY AND ASK HIM IF HE WILL RELEASE OR PERMIT YOU TO RELEASE STATEMENT … TO THE EFFECT THAT HE IS GOING TO VOTE FOR AND SUPPORT ME FOR SENATOR. … TELL HIM THIS OUGHT TO BE DONE TODAY IN ORDER TO HELP US GET ORGANIZED IN NORTH TEXAS. No Such Statement was released.
Johnson’s puzzled aides began to wonder about the enthusiasm of even the private support that Rayburn was supposedly providing. Rayburn was a powerful force not only in his own seven-county congressional district but all across North Texas. The courthouse politicians in the little towns that dotted the prairies north of Dallas awaited only Mr. Sam’s word to swing into action for Lyndon Johnson. The word did not come. By June, the puzzlement among Johnson’s supporters was finding expression in letters. Warren Bellows wrote Connally expressing concern about the situation in North Texas. Judge Loy in Grayson County is very powerful up there, he said,
and is a personal friend of Sam Rayburn. I have been trying to get somebody to have Rayburn to phone Loy [but Loy] has not yet heard from Rayburn, although I made this suggestion nearly a month ago. …
P.S. Can’t you get Rayburn down to Texas for a speech? This would help more than anything else.
Replying on June 3, Connally had to confess that “We tried to get Rayburn to call him. However, I don’t think he ever did. … We are trying to get Rayburn to come to Texas to make a speech, but I don’t know what luck we are going to have.”
As Election Day neared with still no word from Rayburn, puzzlement turned to anger. The arrogant Marsh, the only one of Johnson’s supporters who would dare to express it to Rayburn himself, did so; in mid-June, he telegraphed the Speaker:
IF YOU DON’T SPEAK OR SEND MESSAGE BY SATURDAY NIGHT AT DENISON PLEASE DO NOT SPEAK AT ALL, AS I BELIEVE IT WILL BE POLITICALLY HARMFUL THE LAST WEEK. IT WILL BE INTERPRETED AS RELUCTANT, TARDY, AND POOR STATEMENT. YOUR POSITION, WHATEVER IT IS, ALREADY BECOMING UNIMPORTANT, BECAUSE TIMING COMING TOO SLOW TO BE EFFECTIVE.
Sam Rayburn finally endorsed Lyndon Johnson on June 20, two months after he had been asked to do so—and just a little more than a week before Election Day, too late for the endorsement to be of maximum use. Moreover, the Speaker’s public statement was accompanied by little private support. The definitive statement on the extent of Rayburn’s backing of Johnson in the senatorial race was the result in Rayburn’s own congressional district, in which 31,000 votes were cast. Johnson received only 7,000 of them.
Following the race, Rayburn’s true preference in it became clearer. He had become acquainted with Gerald Mann, whose hometown in Sulphur Springs was not far from Bonham, and had liked the young man—a feeling that was reciprocated; “I was very fond of Sam Rayburn,” Mann says. Although Johnson was already gearing up for
another try at the Senate seat in 1942, Rayburn may have had another young man in mind for the post. On September 2, 1941, with Mann on his way to Washington, Rayburn tried to arrange for him to meet the President; the Speaker told Pa Watson that he thought a “short visit with [the] President would help all [the] way down the line.” Had Rayburn wanted Mann all along—and endorsed Johnson only after he had become convinced that the underfinanced Attorney General had no chance to defeat the hated O’Daniel? Johnson was able to fend off this threat for a while. Watson told Rayburn that he was sure there would be no difficulty arranging for an appointment with the Attorney General of Texas, but he was wrong about that. On September 11, Watson was informed that “Miss Tully says the President does not want to see Gerald Mann at this time. Mr. Mann ran against Lyndon Johnson for Senator, and Johnson is now in Virginia recovering from a tonsillectomy, and the President wants to see him first.” When Rayburn insisted, an appointment was arranged for the next time Mann was in Washington. But the appointment was made for a Sunday, and the Sunday happened to be December 7.
PEARL HARBOUR restored—in an instant—the relationship between Sam Rayburn and Lyndon Johnson.
During the senatorial campaign, Johnson had promised, “If the day ever comes when my vote must be cast to send your boy to the trenches, that day Lyndoti Johnson will leave his Senate seat and go with him.” So popular had that promise proven in hawkish Texas that the candidate repeated it in almost every major speech, and in every form of campaign literature. Though his seat was still in the House, the promise could not be broken—not if he wanted to continue to have a political career in Texas. Johnson had some months previously been commissioned a Lieutenant Commander in the United States Naval Reserve, and on December 11 he was placed on active duty. Rising in the House, he said, “Mr. Speaker, I ask unanimous consent for an indefinite leave of absence.”
The Path to Power Page 113
