LBJ

by Phillip F. Nelson

  Johnson expropriated campaign funds flowing through the Democratic Senatorial Campaign Committee for his own campaigns, those of other senatorial candidates he wanted to control, and in general, for his own personal and unreported use—abuses that were was eventually reported in Life magazine, ironically in its issue of November 22, 1963, the same day Kennedy was assassinated. The article described a senator who caught Johnson and Baker shortchanging him: “One western candidate was bitter in 1958 when Baker offered him $3,000 in cash; he happened to know that the donor had handed in $25,000 and that $12,000 of it was earmarked for him. ‘You’re doing all right. You don’t need it,’ Baker bluntly told him when he protested.”126

  When he was first “elected” to the Senate, Johnson established a close relationship with the twenty-year-old Senate page Bobby Baker, as revealed by Baker himself: “The drawling voice on the telephone said, ‘Mr. Baker. I understand you know where the bodies are buried in the Senate. I appreciate it if you’d come by my office and talk to me.’”127 Baker would become more than an aide or protégé to Johnson; their relationship, as will be seen in later chapters, would become so close that Johnson would say that if he had a son, Bobby Baker would be him. In the same spirit, Baker named two of his children “Lyndon” and “Lynda.”128 Johnson would eventually use him to do much of the dirty work that his financial corruption and connections to the mob entailed. According to a researcher, Peter Dale Scott, “While working for Johnson, Baker became the epitome of Washington wheeler-dealer sleaze. Repeatedly, he fronted for syndicate gamblers Cliff Jones and Ed Levinson in investments that earned super profits for himself and another military–industrial lobbyist, his friend Fred Black Jr. In exchange he intervened to help Jones and Levinson obtain casino contracts with the Intercontinental Hotel system. (Before Fidel Castro’s expropriation of privately held property, Jones and Levinson, both associates of Meyer Lansky, owned the casino in the Havana Hilton.)”129 These investments did not result from Baker’s random prescience but from his access to insider knowledge and from financial payoffs through the CEOs of such companies as Mortgage Guaranty Insurance Company of Milwaukee (which sold Baker stock at 50 percent of current market price, for which Baker’s original investment of $28,750 increased to $495,000 in 1962).130 Baker admitted he had advanced knowledge of a favorable Treasury Department ruling that would allow the company to exclude half of its earnings from income taxes, though he quickly explained that he “had no hand or influence in that ruling.”131 Baker would become, along with Walter Jenkins, John Connally, Cliff Carter, and Ed Clark, one of the many “bagmen” and intermediaries Johnson would rely upon to obfuscate his relationships with criminals.

  Author Peter Dale Scott has pieced together in meticulous detail the extended relationships between men at the lower levels of the hierarchy headed by Lyndon Johnson, the ultimate dispenser of political influence, and his closest associate, Bobby Baker. The next tier in the triangle of influence connected Baker, Clint Murchison, and James Hoffa directly to Carlos Marcello, the Mafia chieftain of New Orleans, and his and Hoffa’s longtime lobbyist, Irving Davidson,132 “a dapper Washington public relations man who did business with government officials in Israel and Latin America.”133 Davidson was deeply involved in Baker’s scams, procuring thousands of dollars in “finders fees arrangements for Baker’s services: for example, Murchison paid Baker to secure a government contract for a meat-packing company he owned in Haiti, while he worked on defending Jimmy Hoffa.”134 Baker would later intercede for Murchison to reverse a Department of Agriculture ruling prohibiting the importation of unsanitarily processed meat from Haiti to Puerto Rico.135 Apparently, the prospect of spreading botulism among the citizens of that American territory was insufficient reason to impede the profit taking of Baker’s, Johnson’s, and Hoover’s friend and benefactor, one of the wealthiest of the Dallas oilmen, Clint Murchison.

  Johnson’s home for twenty years was in a quiet, exclusive neighborhood in Northwest Washington, nestled in the four blocks between Connecticut Avenue and Rock Creek Park at 4921 30th Place.136 Among his neighbors were J. Edgar Hoover across the street, Fred Black next door, Bobby Baker the next street over, and the king of Washington lobbyists, Irving Davidson, around the block. In 1961, Johnson bought the mansion known as the Elms owned by Washington socialite Pearl Mesta—the “hostess with the mostess ‘sic’” known for her lavish parties featuring artists, entertainers, and Washington political figures, at 4040 52nd Street NW—when he became vice president.137 Within the next several months, Baker and Black both sold their houses and moved next to the Johnson’s so they could be neighbors again: “On one side was [Baker’s] friend and business partner Fred Black. On the other side was his longtime mentor, Lyndon B. Johnson.”138

  Davidson was connected to everyone in Baker’s influence-peddling empire, as well as Jimmy Hoffa and a number of people in organized crime. He once boasted, “I’m a great admirer of Mr. Hoover, and I did have access. We used to have parties before the Redskin games … and Hoover always came to them. He was a darned good friend. I lived around the corner from him, three quarters of a block. I’d go over and say hello to him and Clyde Tolson.”139 Irving Davidson was one of the first Washington superlobbyists; his clients ranged from the Coca-Cola Company to the CIA and third world dictators, including the Somozas of Nicaragua, the Duvaliers of Haiti, and the Trujillos of the Dominican Republic.140 As the registered lobbyist for the Teamsters Union, he was “deeply involved in a Murchison business deal that provided funds for Lyndon Johnson’s bagman, Bobby Baker.”141 He represented both Carlos Marcello and Clint Murchison and would also participate in the Teamster Union’s effort to prevent Jimmy Hoffa from going to prison, an initiative that eventually led to Hoffa being pardoned by Richard Nixon, another close friend of Davidson. But from 1961 to 1963, Davidson handled illegal bribes and payoffs for Lyndon Johnson with his old neighbors, Bobby Baker and Fred Black, while being simultaneously protected by his other friend and neighbor, J. Edgar Hoover.142

  The tentacles of these relationships can be traced throughout the United States: to Las Vegas, from Baker to his associates, Eddie Levinson and Ben Siegelbaum, to former FBI agent turned Mafia lawyer Robert Maheu and Johnny Rosselli; to Miami, from Rosselli to Santos Trafficante; and to Dallas, from Murchison, H. L. Hunt, and Mafia boss Joseph Civello, to several policemen, as well as Dallas County Sheriff Bill Decker and Jack Ruby.143 In neighboring Fort Worth, W. C. Kirkwood hosted Hunt, Murchison, Rayburn, and Lyndon Johnson at his sprawling complex named the Four Deuces.144 Moreover, several of these men—Rosselli and Jack Ruby in particular—were linked to the Chicago Outfit and Sam Giancana, their lawyer, Sidney Korshak, and finally to the financier, Henry Crown, who happened to be the major stockholder (20 percent) of Fort Worth’s General Dynamics Corporation,145 which will be among the subjects of later chapters.

  Johnson’s relationship with Carlos Marcello was critical; finances flowing from illegal slot machine profits and bookies using the Marcello racing wire services throughout Texas were a major part of the foundation of Johnson’s rise to the top of the political empire.146 The connections these groups had will be traced, in later chapters, to other men, including Meyer Lansky, who was among the few top crime figures never wiretapped or bugged by the FBI, even as Robert Kennedy’s Justice Department aggressively pursued Mob figures throughout the United States.147 The reason for the FBI’s reticence had less to do with insufficient cause than it did with the Mob’s coercive power over the vulnerable director of the FBI, J. Edgar Hoover.

  Johnson’s “Rags to Riches” Broadcasting Business

  The primary source of Johnson’s accumulation of vast personal wealth, beyond his relatively modest income as a congressman and senator, were the radio and television broadcasting stations he had acquired, beginning with the Austin radio station KTBC in 1943 for $17500. In his book Lone Star Rising: Lyndon Johnson and His Times 1908–1960, Robert Dallek chronicled how Johnson grew this initial investment into a
multimillion-dollar family corporation by the 1950s: He used his position and contacts at the FCC to obtain licenses, additional radio and VHF television stations, approvals for increasing the stations’ broadcasting power, and in general, to expand his operation without regulatory interference. During this time, Lyndon was the acknowledged power behind the ascendancy of the radio and television broadcasting businesses, though he consistently denied it and tried to credit their growth to Lady Bird. Likewise, he insisted, and his minions at the FCC complied, that no records of his involvement ever be found in any of the agency’s files. His repeated denials of having any influence over the media properties the Johnsons owned were categorically debunked by Robert Caro in Means of Ascent.148

  George Reedy, Johnson’s former press secretary who helped perpetuate the myth that it was Lady Bird who ran KTBC-TV, remarked, “Occasionally, the LBJ energy would lead him to intervene in the internal administration of his wife’s radio station … It really was hers and even in a community-property state he had no right to do so. But no one would seriously have considered stopping him even on occasions when the intervention brought the station close to disaster. That happened frequently … his presence shook the entire staff and often brought key personnel to the verge of a mass walkout.”149 Perhaps Mr. Reedy was deluded into thinking Lady Bird ran the broadcasting business and simply never knew otherwise. The real story of Johnson’s acquisition of KTBC radio—at the time, operating out of a small building with a studio, a control room, and three small offices, essentially bankrupt because of the FCC’s continuing resistance to approve its requests for expansion of its weak signal on the high end of the dial—was that Johnson himself had influenced the highest echelons of the FCC to drive the station out of business to prime his coming to its rescue, buying it for a highly discounted price just before its collapse. After months of denying the station’s requests for greater broadcasting rights, then denying the application of a syndicate of new owners headed by J. M. West, a prominent Austin businessman and publisher, to purchase the station for $50,000, the FCC, on February 16, 1943, approved the Johnsons’ bid to purchase the distressed property. The story was later reported by Life magazine’s Keith Wheeler and William Lambert in their 1964 series titled “How LBJ’s Family Amassed Its Fortune,” and more extensively revealed how the business was run primarily by Johnson, quoting men who said they had witnessed “the aggressive personal role” he had played in the acquisition and expansion of the broadcasting holdings:150

  For some reason the FCC steadfastly refused to approve the sale. Although West died, the syndicate continued its efforts to buy. Just before Christmas in 1942, 34-year-old Congressman Lyndon Johnson invited a local businessman, E. G. Kingsbery, who was a member of the syndicate, to his Austin office. Kingsbery recalled that during the meeting Johnson reminded him that an appointment to Annapolis for Kingsbery’s son, John, had been obtained through L.B.J.’s good offices. Then, according to Kingsbery, Johnson brought up KTBC and said: “Now, E. G., I’m not a lawyer or a newspaperman. I have no means of making a living. At one time I had a second-class teaching license but it has long since expired. I understand you’ve bought the radio station. I’d like to go in with you or to have the station myself.” Kingsbery first put Johnson in telephone contact with the attorney for the syndicate and then advised the congressman to “make his peace” with J. M. West’s heirs. “Lyndon told me,” said Kingsbery, “he was going up to the West ranch to talk business, and he did and he came away with KTBC.”151

  Unlike J. M. West, the Johnsons had solid connections to the New Dealers running the FCC, including the commissioner himself, Clifford Durr. Lyndon even had Lady Bird ask for Durr’s advice on whether it would be a good investment. He urged her onward, apparently swayed by Lady Bird’s concern that Austin needed more liberal political influences to combat such events as the vicious attacks on President Homer Rainey of the University of Texas, KTBC was then called a “sundowner” station because it was limited to daytime broadcasts and therefore not affiliated with any networks; it could not compete with the other Austin stations or the much stronger signals from those based in San Antonio.152

  Through the help of Johnson’s friends—Speaker Sam Rayburn and lobbyist Tommy Corcoran, to whom many of the top officials of the FCC were indebted for their jobs—the FCC shifted its attitude toward KTBC immediately after Lady Bird Johnson submitted her application to buy it.153 Within months of acquiring the radio station in 1943, the Johnsons applied to the FCC to move the station’s frequency to the lower end of the dial (590) and operate twenty-four hours a day, changes that would expand its signal well beyond Austin to thirty-eight surrounding counties. Whereas the previous owners had unsuccessfully tried to accomplish the same improvements for many years, the Johnsons’ requests were granted within three weeks. Beforehand, they managed to recruit a popular radio announcer from Dallas, Harfield Weedin, to become manager of their new station, overcoming his reluctance with the promise that the station would be greatly expanded: Lyndon Johnson told him, “Look, the frequency is going to be changed. We’re going to go full-time. I have it in the works right now.”154 As soon as the broadcasting changes were approved and implemented, the station was received by listeners much more clearly and until late in the evening. By 1945, approval was obtained from the FCC to increase its power fivefold, from a thousand to five thousand watts, expanding the geographic radius of potential listeners to sixty-three counties.155 Johnson traveled to New York and called on the president of the CBS radio network, William S. Paley, to ask for an affiliation that would allow Johnson’s station to carry the network’s famous nationally broadcast shows, an arrangement that would thus attract more advertisers and enable him to charge higher advertising rates. Previous attempts by another Austin radio station, KNOW, to secure a CBS affiliation had been rejected for years on the basis that the network’s San Antonio affiliate could be heard in Austin. But after Johnson’s visit, Paley and Frank Stanton, the CBS director of research, reexamined the situation and found there was plenty of room for an affiliated station in Austin.156

  The turnaround in the FCC’s attitude was complete. The Life magazine exposé documented the Johnsons’ startling success winning FCC approval for everything they wanted, from the time the little radio station was purchased through the conveyance to them of a unique television monopoly in Austin, Texas, that existed until 1972, when the Johnsons sold it for $9 million:157

  All of its requests have been acted upon favorably and with dispatch by the agency—beginning with an early application to increase its power and the length of its broadcasting day. The choicest plum of all fell in 1952 when KTBC [TV] was granted the right to broadcast over Channel 7, the only VHF (very high frequency) channel allocated to the Austin area by the FCC. This single outlet contracted to carry programs of all three major TV networks—CBS, ABC and NBC—with whom affiliation is the open sesame to success. True, the FCC also assigned to Austin three prospective UHF (ultra high frequency) channels; but at that time almost no TV receivers existed to pick up a UHF signal. Many sets can receive UHF now, but no one has moved to build a UHF station in Austin. Since KTBC holds the network contracts, it retains on one VHF channel, an effective telecasting monopoly in a city of 186,000 and its environs. (emphasis added)158

  Whereas similar stations in comparable cities charged only $325, in 1964 dollars, as a network base rate for broadcast time, Johnson’s television station was charging $575. Such a monopoly did not exist anywhere else in the country. One of the Justice Department’s primary duties was, and still is, ferreting out instances of monopoly power under the Sherman Antitrust Act of 1890. Johnson’s skills at manipulating people resulted in stunning successes, as illustrated by this bureaucratic dichotomy: He was being granted monopoly power by one federal government agency while holding at bay the one charged with dissolving such power.159 Bobby Baker described how Johnson coerced an NBC network executive to pay his station the highest rate scale for nationally bro
adcast commercials: “‘But senator,’ Johnson was told, ‘your market isn’t big enough down there. The local affiliate is paid according to its share of the audience. Yours just isn’t large enough to qualify.’ ‘I say it is’ Johnson retorted. ‘I know how you fellows work—you can do anything you want to. Well, want to!’ The network officials thought it over and decided they wanted to.”160