by Gerard Colby
The traditionalists wanted to stop, not facilitate, the loss of Indian lands, and feared money would be provided to tribal council lawyers by the new Native American Rights Fund. The fund had been established in 1971 with a $1.2 million donation announced by Ford Foundation president McGeorge Bundy, former national security adviser to presidents Kennedy and Johnson and a former member of the Rockefeller Brothers Fund’s Special Studies Panel.
These fears of Wilson’s intentions were confirmed when, despite the tribe’s previous rejection in 1972, he reopened negotiations with the National Park Service. Wilson also refused to allow the traditionalists’ request for higher rents from ranchers to be raised with the BIA in the tribe’s name, banned meetings, hired his own security guards with tribal funds, and attempted to create a witch-hunt atmosphere against AIM supporters by showing a John Birch Society film, Anarchy, USA, depicting ghetto riots and burning buildings. An effort to impeach him resulted in the arrival of seventy counterinsurgency troops of the U.S. Marshal’s Services, Special Operations Group patrols throughout the reservation, and an impeachment trial presided over by a tribal judge of Wilson’s choice. The judge’s conduct so upset the 600 Indians in attendance that most, including opposition members of the twenty-member tribal council, walked out.
It was the traditional Indian way of expressing no confidence, but the BIA accepted the report that Wilson was voted back into office by a council vote of 4 to 0.32
The next day, responding to demands and pleas expressed by elders at a meeting, AIM supporters drove fifteen miles in a fifty-four-car caravan to seize and occupy Wounded Knee, South Dakota. This site of the 1890 massacre of 300 Sioux men, women, and children by Custer’s reorganized Seventh Regiment suddenly found itself surrounded by hundreds of armed state police, federal marshals, FBI agents, and armored units of the U.S. Sixth Army.
Operational command was at the Pentagon, FBI headquarters, and the Nixon White House, where Chief of Staff Alexander Haig presided. After taking fire for seventy-one days, the Indians were allowed to surrender peacefully. But the FBI stepped up arrests, the Justice Department brought down a hail of indictments, and killings of AIM supporters mounted; between March 1973 and March 1976, the Pine Ridge Reservation would suffer from a murder rate almost nine times higher than that of Denver, then the reputed “murder capital of the United States.”33
In Latin America, such disturbances were less likely, thanks to the even freer hand given to Nelson’s “New Military.” Indians in the Amazon never came up in the report by the Commission on Critical Choices. But oil did. After reviewing the excellent prospects along Venezuela’s Orinoco River, which was estimated to have 700 to 800 billion barrels of oil, the commission reported that “another area likely to yield substantial new oil supplies in the near future is the Upper Amazon basin of Brazil, Ecuador and Peru, and the adjacent Beni area in Bolivia, which is now being actively explored by foreign oil companies.”34
The prospects of finding more oil underscored the important role that SIL played in the Amazonian fields of the Lord for American oil interests and why the State Department under Henry Kissinger, a member of both the Commission on Critical Choices and the Trilateral Commission, would seek to preserve SIL as an asset. But probably the man who would do the most to protect the role of missionaries as assets of the U.S. government, and particularly of the CIA, was the man chosen to head the official inquiry into the CIA’s alleged abuses of power: Kissinger’s mentor and patrón, Nelson Rockefeller.
ONLY A HEARTBEAT AWAY
The Rockefellers did get one prize from Nixon after his reelection. Nixon reversed the Civil Aeronautics Board’s ruling that had prevented Laurance’s Eastern Airlines from taking over a coveted Caribbean route. But other than that and giving Nelson his Commission on Critical Choices, Nixon did not reward Rockefeller for his loyalty. After all, where was Rockefeller when aid was called for from behind the scenes, when Nixon was battling in the dark to hold his rattled staff in line? Nelson did not respond to letters from Nixon’s former chief of staff, John Ehrlichman, asking for help to pay his legal bills. And he failed to offer consolation to Attorney General John Mitchell after his indictment.
During what turned out to be the final days of Nixon’s presidency, Nelson never publicly spoke of his disdain for Nixon or his bitterness over being snubbed by Nixon’s aides when he showed up at the Waldorf-Astoria Hotel in New York on election night 1968 to offer Nixon congratulations and was told that the president-elect was resting.
By July 1974, as impeachment articles were being prepared in Congress and the Supreme Court ordered Nixon to surrender the White House tapes, Nixon was drinking heavily. The insecurity of being a poor man trying to rise in, and eventually being in charge of, a rich man’s party had grown into a paranoia over “enemies” that now was destroying his presidency. Kissinger advised Defense Secretary James Schlesinger to intercept any rash orders from the White House and to keep his generals at close rein. He then visited the White House to tell Nixon that history’s memory and world peace required him to consider stepping down.
As Nixon collapsed into teary hysterics, insisting that Kissinger kneel with him in prayer for divine guidance, former Kissinger aide Alexander Haig, now White House chief of staff, set up a cot in the White House Situation Room to carry out a deathwatch over the Nixon presidency. Nixon’s efforts to shift the blame for Watergate to the CIA had failed, just like his wider effort to assert control over the CIA had backfired.
That night, Nixon told his family it was all over. The next day, he gave a terse resignation note to Kissinger that was drafted by Haig. After giving speeches to the nation and his staff and another longer letter to Vice President Ford advising Haig’s removal as chief of staff, he flew home to southern California, abandoning the White House to Gerald Ford and, it turned out, to Nelson Rockefeller.
The phone call offering Nelson the vice presidency came on Saturday morning, August 21, 1974, when Nelson and the family were at their estate in Mount Desert, Maine. Nelson said he was not sure that he could accept, that he would have to talk to Happy and the kids. He told President Ford that he would call back the next day.
It was a shrewd ploy. Raising the specter of an embarrassing refusal put Ford on the ropes. Nelson had built a credible background for a refusal through years of proclaiming no love for the vice presidency. He had known every miserable man who held that office since Henry Wallace, way back in 1941. There was really no question about his accepting. He was getting too old to wait for Jerry Ford to serve two terms before he would have another chance. He would be only a heartbeat away. Besides, he reminded everyone, the country was in the throes of a constitutional crisis, and his country was calling.
But patriotism, despite his public posture, had its limits. Nelson wanted power, a role for the vice presidency that would be more active than anything the country had seen before. Ford was too inexperienced to challenge Kissinger on the formulation of foreign policy. Nor could Ford match Nelson on domestic policy. And Ford knew it. “I’d like you to do in the domestic field what Henry’s doing in the international field,” he told Nelson.35
Nelson called back on Sunday and told Ford that he could not accept unless he was allowed to be an active vice president. Nelson had always said, “I am just not built for standby equipment.”36 Ford could not deny that Rockefeller would bring executive experience; it was one of his major assets. And Nelson’s Eastern liberal image would help balance his own Midwest conservatism in the public’s perception. But above all, he needed the Rockefeller name to give his presidency the appearance of wealth beyond corruption. Just like Nixon had done fifteen years earlier, he accepted Nelson’s terms—and in writing.
Two days later, Nelson was in Washington for his first formal meeting with Ford. The president, for the first time, officially offered him the vice presidency and, upon hearing Nelson’s formal acceptance, immediately called Richard Nixon. Nelson stood there, astonished, until Ford indicated that he should
get on an extension. Nelson heard Nixon praise Ford for choosing a “big man for a big job.” Then he was surprised to find himself alone on the line with Nixon. Ford, with characteristic naïveté, had taken another call and left the two foes alone in awkward silence.
“Hello,” Nelson said.
“Congratulations and best wishes,” said Nixon. “I think you are great to do it.”
“And that was it,” Nelson recalled later.37
*The uncertainty about the dollar in the European money markets worried U.S. companies with longstanding investments and financial ties abroad. These companies were dependent on Eurodollars to finance investments and imports of capital goods into developing countries like Brazil. BIB, for instance, arranged Eurodollar loans to Brazilian borrowers on behalf of Deltec International’s Bahamas-based offshore bank, Deltec Banking. See Deltec 1970 10-K form, p. 10.
* Nixon opposed cutting the budget of the CIA’s local assassination teams for Colby’s Operation Phoenix. “We got to have more assassinations. Killings. That’s what they’re doing [the other side].” Kissinger was equally callous. “I hold the strong view that human rights are not appropriate for discussion in a foreign policy context,” he told Chilean dictator Augusto Pinochet’s foreign minister on May 8, 1975, two years after the military coup that toppled President Salvador Allende and began the repression that would take an estimated 50,000 lives by 1976. See Seymour Hersh, The Price of Power (New York: Summit, 1983), pp. 135–36.
*The CIA’s liaison to Rockefeller’s Group, Enno Hobbing of Guatemala coup fame and Richard Aldrich’s Latin American Information Committee, later became the Group’s top operations officer under its new incarnation, the Council of the Americas. See Hersh, The Price of Power, p. 260.
* Plans were under way to draw European investors into the São Francisco River Valley. To follow up on investment potentials there that were identified by IBEC’s Development and Resources Corporation, IBEC set up a consulting firm jointly owned by Europeans and called Disenvolvimento e Sistemas, S.A. At the same time, IBEC launched a huge 4,200-unit housing project near São Paulo and, with German and Dutch investors, opened two wholesale distributors in the city as part of a chain of MAKRO stores planned for other countries in Latin America. Other ventures revealed that more than political symbolism was behind the Rockefellers’ choice of Nathaniel Samuels, Nixon’s former deputy undersecretary of state for economic affairs, as IBEC’s new chairman. Samuels had been a director of one of Belgium’s largest companies, Sofina, and—besides his government tenure as an alternate U.S. representative to the International Monetary Fund, the World Bank, the Asian Development Bank, and the Inter-American Development Bank—had been a managing partner of Kuhn, Loeb, one of Wall Street’s most active investment banks in Europe.
*In the Four Corners area, Kennecott’s Peabody was joined by Tenneco, Climax Uranium, Standard Oil of New York (Mobil), and Standard Oil of New Jersey (Exxon).
44
HIDING THE FAMILY JEWELS
THE MYTH OF ROCKEFELLER POWER
Nelson never expected his confirmation hearings to be so tough. His greatest strength—the influence and resources that came with his wealth—suddenly became the focus of controversy that almost destroyed his nomination. He arrived at the Senate caucus room on September 23 confident that his recent lobbying would produce results, attacking friendly hands with two-handed handshakes and spreading good cheer.
He began by reading his own seventy-two-page history of the Rockefeller family, its virtuous struggle against racism, from the abolitionist days of Grandmother Spelman; her husband’s adventurousness and fearlessness as the inspiration for Grandfather John D.’s heroic construction of Standard Oil; and John D.’s compassionate nature setting the example for the “family ethic” that his own father, John D., Junior, extended through philanthropy “throughout the world.” Nelson dismissed the power of the Rockefellers as myth.
“This myth about the power which my family exercises needs to be brought out into the light,” he told the Senate. “It just does not exist.” The senators glared in silence. What potential distortion of the constitutional republic could the nation suffer from this unparalleled marriage of wealth and political power? Little, Nelson assured them, asserting that his personal assets, including his $33 million art collection, totaled only $62 million. When his share of Junior’s trusts was included, his grand total still was only $179 million. This, the senators knew, was far below that of some other Americans. And anyway, the Senate itself was known as the “millionaires club.”
Nelson was hurt, however, by a recent Internal Revenue Service audit that showed that his worth was actually $218 million; moreover, the IRS had billed Nelson for more than $903,000 for five years of back taxes he owed, including $83,000 in gift taxes.1 These gifts included a $50,000 “loan” to Henry Kissinger just a few days before he took office in the Nixon administration, and a combined total of $875,000 to two New York cronies he had put in charge of the Urban Development Corporation and the Metropolitan Transportation Authority.
Nelson responded by listing $24 million in contributions to nonprofit agencies and charities. He did not mention that he had given more than half that amount to institutions that were founded or controlled by the Rockefeller family.2 Of those institutions, his or his family’s own operations in Latin America took $2.6 million.3 When other Latin American interests were added ($103,168),4 the figure rose to $2.7 million, or 11.4 percent of all his admitted “charitable” contributions. Moreover, this figure did not include Nelson’s donations to Latin American recipients that were passed through the Rockefeller Brothers Fund or the Latin American studies funded by donations to the Council on Foreign Relations.5
These revelations caused more eyebrows to raise in Congress about how much taxes he had avoided by funding nonprofit institutions that carried out operations to his liking. Nelson reported a total personal income of over $47 million between 1964, the year he first ran in earnest for the presidency, and 1973, when he resigned as governor. His payment of $12 million in income taxes during the same period would have been considerably more—$16 million more, in fact—had he not made his donations to “charity.”
By mid-October, Nelson was in trouble. The controversy over his contributions to political figures and nonprofits and the scandal of his brother Laurance “investing” $60,000 in a 1970 book attacking Arthur Goldberg, Nelson’s 1970 Democratic gubernatorial opponent, were threatening to get out of control. The House Judiciary Committee decided to broaden its investigation into the Goldberg biography. Nelson tried charm and obfuscation. When they did not work, he took a stab at honesty. Nelson reversed his earlier denials and admitted knowledge that the book would be published, wiring Goldberg an apology.
Worried that this admission could kill his nomination, he called President Gerald Ford, who blandly assured him, “There is no problem.”6
Ford was not omniscient, only savvy. Behind the scenes, beyond the glare of television lights, there was a strange serenity in the proceedings, as if despite the ugly show, or, more accurately, because of it, the hearings would lead to the opposite of what many observers thought would happen: Nelson’s confirmation. As attacks came down upon his nomination from the Left and the Right, Nelson smiled; he knew he had captured the vital center, appearing as the moderate between two political extremes. He was used to rolling with the punches in a ring where the rules were set by corporate parameters. Room 5600 had left little in Nelson’s business affairs that was not legally tidy. Tax deductions that were challenged by the IRS were easily adjusted; the Rockefeller family office fired off checks, defusing any legal arguments. Critics who based their case on the size of the Rockefeller wealth and the long reach of its influence met an unenthusiastic response by both Democratic and Republican congressmen and senators.
J. Richardson Dilworth, head of the family office, appeared before the committee to explain the world of trust accounts. He listed only “major stock holdings,” although it
was unclear if they were the largest in the sense of market values or of a percentage of a company’s total outstanding shares. He gave amounts only in the aggregate and did not break them down for each of the eighty-four family members. Yet he insisted at the same time that each member had sharply different attitudes, that each one set down general guidelines for his or her portfolio managers, and he denied “that this family acts in concert when in fact this has never been the case.”
The $262 million Rockefeller Brothers Fund was excluded, Dilworth explained, since the family office no longer managed its funds. So was the Rockefeller Family Fund, because that, too, had independent investment advisers. Laurance’s controlling interest in Eastern Airlines was left out, as was the Rockefeller Foundation, since, as Dilworth asserted, “the [family] office has no connection whatsoever with the Rockefeller Foundation.”7
No one dared question the credibility of Dilworth’s accounting. No one seemed to know how. His list of major Rockefeller stock holdings included only the largest, and of those, only two besides IBEC and Rockefeller Center were near the 10 percent category he conceded as possibly giving the owner control: Coherent Radiation (19 percent), a laser-systems manufacturer, and Thermo Electron (9.79 percent), a thermionic research firm. Dilworth did not include Standard Oil of California, Exxon (Standard Oil of New Jersey), Mobil (Standard Oil of New York), and Chase Manhattan Bank in his 10 percent category, ignoring the fact that no single group of investors in any of these giant companies held as much as 10 percent, and yet all these corporations were controlled by a board of directors representing investors, if not themselves. If anything, Nelson’s $1 billion figure for the family fortune was disappointing after estimates of $5–10 billion had been mentioned in earlier testimony. The family members had found even these revelations excruciating, Dilworth told the committee, and that comment seemed enough to satisfy everyone.
