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It Pays to Be Ignorant

The key to successful conspiracy is that the higher-ups do not ask what’s going on, and the lower-downs do not tell them.

The recognition of this basic axiom would dispel the fog of pretense which covers the Watergate affair now that the former Attorney General has explained why he thought it better not to tell the President, and a presidential public relations adviser has testified that ten months after the break-in the President told him, “I have racked my brain…were there any clues I should have seen…?” And, of course, his faithful old adviser assured him that there weren’t, though press, radio, and TV had been full of such clues day after day for many months beginning the morning after the break-in.

To understand how men who rise to the top by sharp minds and sharp practices suddenly turn as obtuse and undiscerning as their least promising office boys, it is useful to recall the “Watergate” with which big business shocked the nation more than a decade ago. A newly published study for legal practitioners called The Electrical Equipment Conspiracies: The Treble Damage Actions, by Charles A. Bane (Federal Legal Publications, New York), shows how the art of keeping the higher-ups in ignorance of what the lower-downs are doing can be perfected and institutionalized.

The Ervin committee ought to study the story and then recall John Mitchell for more effective cross-examination and a less slippery explanation of why he, the President’s most trusted political adviser, an Attorney General of the United States, and as crafty a mouth-piece as has appeared on the tube since Perry Mason, noticed so little and decided to tell Nixon even less.

The prosecutions of General Electric, Westinghouse, and the lesser fry of the industry for illegal price-fixing began in 1960 and proliferated into almost 2,000 treble damage anti-trust suits which cost the companies a half billion dollars in judgments and settlements out of court. The prolonged litigation even produced a burglary like the one at Watergate. During the trial of the first civil suit—its magnitude is indicated by the fact that it was finally settled out of court for $18 million—three men were surprised in the act of tampering with or photographing evidence in the files of counsel for the plaintiffs. But they fled before police arrived and, despite the full investigation ordered by an angry judge, were never found.

The story made headlines for months and was chewed over in indignant editorials as showing the realities behind the façade of free enterprise: the cartel for almost a decade had been fixing prices and bids on everything they sold from tiny two-dollar insulators to multimillion-dollar turbine generators.

But the cartel’s biggest success was in preserving the fiction that the top men in charge knew nothing of what was going on. Though this was the biggest anti-trust prosecution in history, though it was the first in which convicted businessmen did not get off with fines but actually went to jail, though it triggered an extended investigation by a Senate committee under so skillful a cross-examiner as Kefauver, the government was never able to lay a finger on the men who presided over these corporations and set their policies.

The corporations were convicted, the directors went free. Though evidence showed that illegal price-fixing and collusive bidding had gone on for at least eight years, maintaining the profit margins of these corporations, their right hands remained pristinely innocent of what their left hands had been doing. Never were so many maiden-heads preserved intact through so many rapes.

Everybody is looking for lessons from Watergate. Julie Eisenhower says she thinks that because of it “presidents will be more anxious to know everything that’s going on.” To the contrary, any future president who wants to run a dirty tricks squad against opponents and critics will be more than ever anxious to make sure that he’s kept fully and tightly uninformed.

Future presidents can take lessons in this regard from the electrical equipment cartel. There the leader of the cartel, General Electric, even covered its tracks by formally adopting a policy statement as early as 1946 instructing its employees to “conform strictly to the anti-trust laws” and if in “any doubt as to the legality of any proposed action…the advice of the law department must be obtained.”

This sanctimonious eyewash was paraded as evidence of immaculate virtue while the diddling went on. Ralph J. Cordiner, the head of General Electric and the Nixon of that corporate Watergate, even told the Senate anti-trust committee on May 5, 1959, just before the storm broke, “As long ago as 1946…GE embarked upon an educational campaign…continued to date, with undiminished vigor, designed to sharpen the sensitivity and awareness of all of our people to the role and importance of the anti-trust laws.”

When Cordiner appeared before the same committee two years later, on June 5, 1961, Kefauver reminded him that in the intervening months General Electric had been convicted on nine separate anti-trust indictments, paid fines of $450,000, and seen eleven of its employees go to jail. Kefauver commented dryly that the top executives “must be grossly overpaid if totally unaware of the huge and blatant conspiracies which were going on under their noses.”

General Electric’s anti-trust policy statement served many purposes. It was good public relations. The company’s lawyers tried, but unsuccessfully, to use it as a defense in anti-trust civil suits. It kept the price-fixing and collusive bidding securely covert for many years, antiseptically sealed off from other corporate activities.

Though the policy statement ordered consultation with the law department if there was any doubt, one convicted employee later told the Kefauver committee that the price-fixers were instructed “never to let the manufacturing people, the engineers, and especially the lawyers know anything about it.” GE’s lawyers were better safe-guarded than those in the Nixon entourage, many of whom may face disbarment proceedings in the wake of Watergate. Another convicted employee testified that there were two labels of instruction, one—not to fix prices with competitors—for public consumption, the other transmitted “by word of mouth through the line of command”—to go on with price-fixing as usual.

The GE anti-trust policy statement was famous as paragraph number 20.5 in the official GE instruction book, but those who took it seriously didn’t last long. This same witness testified that he got his job in 1950 because his predecessor “was so religious that since he had signed this slip of paper saying that he would observe the policy of 20.5, that he would not talk with competitors, so he was not broad enough to hold down that job.” The witness proved a broader man. He testified that he had signed “a total of three or four of them up until 1960 and I have signed two since then.” But he went on price-fixing.

Cordiner, it seems, often lectured subordinates on the virtues of abiding by 20.5. Sometimes this forced them into extraordinary feats of convoluted Jesuitry. One employee was quoted as relating, “I asked Mr. Cordiner not to ask me not to stop doing it [i.e., meeting with competitors for price-fixing] and I told Mr. Cordiner if he did not ask me to stop he would never hear anything about it.” He said he was not asked to stop.

Another convicted employee also testified about one of these anti-trust lectures or sermons. It stopped short of embarrassing questions:

Senator Kefauver: Did he ask you whether you had been meeting with competitors or not?

Mr. Ginn: No, sir; he did not.

Something of the same frustration Judge Sirica felt when the Watergate burglars meekly pleaded guilty was expressed by Chief Judge J. Cullen Ganey when the thirty-two indicted companies and some forty-eight indicted employees, all well below the top of their corporate totem poles, trooped into federal court in Philadelphia in 1961 to plead guilty or nolo contendere. The effect in both scandals was to avoid trials in which the conspiracies might have “unraveled”—to borrow a favorite Mitchellism—and the higher-ups been dragged in.

Judge Sirica, when four of the burglars on sentencing day denied that they had been paid money to shield the higher-ups by pleading guilty, told them, “I’m sorry but I don’t believe you.” When Judge Ganey came to impose sentence, he sounded—in his outraged skepticism—remarkably like Judge Sirica. “The real blame,” Judge Ganey said, as he looked at the relatively small fry before him, “is to be laid at the doorstep of the corporate defendants and those who guide and direct their policy.”

What Judge Ganey went on to say will be read with relief at the White House and with premonitory frustration on Capitol Hill. Judge Ganey said that “the Department of Justice has acknowledged that they were unable to uncover probative evidence which would secure a conviction beyond a reasonable doubt of those in the highest echelons of the corporations here involved.” Yet, he concluded astringently,

One would be most naïve indeed to believe that these violations of the law, so long persisted in, affecting so large a segment of the industry, and, finally, involving so many millions upon millions of dollars, were facts unknown to those responsible for the corporation and its conduct.

The testimony in the Watergate hearings, as of this writing, has broken through to this level of awareness at only one point. That was in the remark that Hugh W. Sloan, Jr., former treasurer of the Committee to Re-Elect the President, attributed to Nixon’s campaign finance chairman Maurice Stans. Sloan testified that when he asked Stans what G. Gordon Liddy was doing with the huge sums of cash he was demanding from Sloan, Stans said, “I do not want to know and you do not want to know.”

That may well have been the admonition clearly visible to the initiate over the Oval Office doorway. At one point Mitchell came close to admitting it, but the Ervin committee was not skillful enough or quick enough to press him a little harder and make him say it explicitly. Over and over again Mitchell insisted that he had kept the facts about the Watergate break-in from Nixon because his re-election took precedence over all other considerations. Mitchell was sure that Nixon would have “lowered the boom” on those responsible and the revelations might have hurt his re-election chances. He implied that Nixon would have been outraged and ordered the clean-up regardless of consequences.

But on his last day before the Ervin committee, Mitchell worded his basic line of defense more candidly, stripped of pretense about Nixon’s potential for moral indignation. This came in the middle of Baker’s fuzzy and pretentious questions about Mitchell’s “perceptions of the presidency,” a prime example of the committee’s elephantine clumsiness at cross-examination.

Baker wanted to know why the information about the break-in and the decision of what to do about it should not have been left to the President. Mitchell then said, and the phrasing is worth more careful attention than the committee gave it:

If he were to make the decision, there would be no alternative. He would have a choice of being involved in what you all referred to as a cover-up or he would be involved in the disclosures which would affect his re-election.

Mitchell should have been asked what he meant by “there would be no alternative.” Looked at one way, the disclosure would indeed have left the President with alternatives—either to involve himself in the cover-up now that he had been told about it, or to order a clean-up harmful to his re-election efforts.

The phrase “there would be no alternative” made sense only in reference to an unspoken calculation. The unspoken calculation was that by not telling the President, he was left in ignorance at least officially. This in turn left open the option or alternative of the President’s continuing in that ignorance which best served his interests. Once that ignorance was breached, once the President could no longer say that nobody had told him, he would be forced to grasp the nettle and either become part of the conspiracy or shake up his staff.

Mitchell was only doing what any good corporation lawyer would do in analogous circumstances. This was made clearer, though Baker and the committee failed to pick it up, when the vice chairman asked him for “any other important decision that you can think of that the President ought to be spared from making?” Mitchell replied,

I think as your hearings go on, you will find out about other ones, in connection with the staging of demonstrations up here in the Capitol and some of the other activities that were undertaken by some of the people who were involved in this campaign, that obviously, he would have to condemn if they were known to him.

Baker should have asked Mitchell to be more specific about these illegal campaign activities and pressed him to clarify the implication that Nixon must be kept “antiseptically” unaware—at least on the record. Baker instead wandered off into a fog about all this implying a “theorem” which has “a significant diminishing effect on the powers of the presidency” and accused Mitchell of arrogating to himself “a presidential decision.”

It takes two, of course, to dance the familiar conspiracy tango—one not to tell, the other not to ask. The committee failed to exploit Mitchell’s admissions that at no time did Nixon ask him about the Watergate break-in, neither in the telephone conversation immediately after it happened, when Mitchell says he apologized for not having kept a tighter rein on campaign activities, nor even at their final luncheon the following March, the day after Nixon said he finally became aware that something was wrong and launched an intensive investigation of his own.

In a trial for conspiracy such chaste avoidance of the delicate subject by the top man and a trusted old political adviser would have been plumbed to the utmost in interrogation. Here it was passed off with Chairman Ervin’s joke, “If the cat hadn’t any more curiosity than that, it would still be enjoying its nine lives.” The appropriate retort would have been that Nixon may have been operating on the related principle that curiosity killed the cat.

More skillful interrogation would have seized upon and fully developed the contradiction in a crucial admission by Mitchell his last day on the stand. Samuel Dash, the Ervin committee counsel, asked him,

If he [Nixon] had asked you what your knowledge was especially before the election [italics added], would you have told the President?

Mitchell earlier had said over and over again that he was “not about to countenance anything that would stand in the way of his re-election,” including presumably even perjury. If this was so, if the re-election of Nixon was as overwhelmingly important to the country’s future as Mitchell says he believed it to be, so that any means were justified by that end, would it not have been worth a little white lie to the President himself, “especially before the election?” Or to postpone the truth until after election day?

Instead Mitchell replied, “I would have laid out the chapter and verse of everything I knew about it.” That would have meant running the risk of letting the election go down the drain.

Did not this question and answer bring the Ervin inquiry to the very brink of the truth? This final admission clearly implied that Mitchell had kept quiet not to spare the President a decision but to let him make a decision, to let the President decide for himself whether he wanted to be inescapably and directly informed on the record and face the painful consequences. This is the neuralgic point on which committee counsel should have pressed.

The final question about Watergate is the question Senator Kefauver raised about the electrical equipment cartel. “Is it possible,” he asked, “that the way these companies were run resulted in a wall being built between top management and those responsible for pricing arrangements?” A wall, that is, which enabled the higher-ups to maintain the appearance of ignorance.

We confront a charade. I believe Nixon not only knew what was going on, but set the policy for it. He has already admitted responsibility in his May 22 statement for what Mitchell called the “White House horrors,” excusing them in the name of “national security.” The Watergate breakin, the Liddy activities were only more of the same, and different only in degree from the tactics which have marked Nixon’s past campaigns.

Mitchell’s account of how he “rejected” Liddy’s plans is preposterous. If they hired an unscrupulous “kook” even after he advocated the use of call girls and kidnapping, a “kook” is just what they wanted. But the “signal” to take him on, the over-all decision to use burglars and wiretappers, the orders to cover-up, must have been given in meetings so private they were never “logged,” and so high up as to be immune to perjury prosecution. The golf course, the Sequoia, or perhaps even the washroom were more likely to be the locales for the ultimate “signals” than the Oval Office. For even if the top men fell out, it would still be the word of a defecting presidential confidant against the word of the President himself.

This assumption, however, no longer applies to the crucial confrontation between Nixon and Dean. The quite unexpected revelation that the offices in which the President worked and conferred were bugged, on his own instructions, gives Nixon a chance to clear himself and indict Dean. Should Nixon back away, should be refuse the tapes of the conversations with the President to which Dean testified, he would stand convicted in the public mind. Were Dean now on trial for perjury, as the White House may have been hoping he would be, after Haldeman, Ehrlichman, and Colson had finished telling their stories, the withholding by the government of such conclusive evidence would be grounds for a directed acquittal.

It is a measure of how deep are the suspicions Nixon’s conduct has generated that the question of the tapes is clouded by fear not only that they may be destroyed (like so much other “shredded” evidence) but, even worse, that they may be doctored.

July 18, 1973

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