The Man Who Pulled a Thread

(See Cover) I know of nobody who has found a way to prevent some people from being . . . dishonest . . . Last year there were something like 600 defalcations and embezzlements in the banks of this country. One out of every 300 bank officers was found to be crooked. And the record of the Bureau of Internal Revenue is a lot better than that.

--Harry Truman, Sept. 29, 1952

Many Americans are half convinced by the statistical (or Kinsey report) explanation of corruption in Government: out of every thousand people there are bound to be X number of crooks. It's human nature. You can't do much about it. Anybody who gets indignant is a hypocritical old dinosaur.

Other Americans disagree. Their side of the argument is presented by the junior Senator from Delaware, John Williams. This small-town chicken-feed dealer with a mousy look and a whispering voice has almost nothing in common with the great prosecutors and muckrakers of U.S. history, with Lincoln Steffens or Tom Walsh. Both he and they, however, did more than expose individuals; they exposed systems of corruption. As Harry Truman says, rascals are always around. But as John Williams says, the smug tolerance of rascals is not always around--and that smugness shocks Williams more than the presence of some rascals in Government.

For nearly five years Williams has rocked the country again & again with scandals in the Bureau of Internal Revenue. He is no sensation monger. He carefully waits until he thinks his case is airtight, then submits it to the man or the office he is about to attack, promising to print any denial or rebuttal in the Congressional Record along with his charge. Williams says he has never made an accusation of crime that has not been followed by an indictment. He works alone (his only "investigator" is a girl secretary). Many of his leads have been picked up and developed by high-powered legal staffs of congressional committees, by crusading newspapers, by grand juries.

The "Secret." Williams' warmest admirer would not call him either a mental giant or a man of burning ambition. He started his exposures by pure accident, continued them by doggedly applying ordinary business ethics. He is like a man who pulled at a loose thread; he got interested, kept pulling until the whole covering that screened one of the worst U.S. public scandals was unraveled.

Williams' very lack of qualifications, the simplicity of his operation, is a part of the story. If the graft had been very hard to find, Williams wouldn't have found it. All he had that the Administration didn't have was independence of the system of political favoritism under which the graft flourished. The "secret" of his success is that the bulk of his information comes from Government employees. Once he had stumbled on his first exposure he became known as a man to whom honest Government employees could turn to expose their dishonest fellows. Williams protected his sources. The more he exposed, the more information rolled in.

Why do Government employees tell Williams rather than their own superiors about illegalities and improprieties in their bureaus? That is the most significant question about Williams' operation. An obvious answer is that a lot of Government employees believe that Williams will act to end the graft and that their superiors will not. Not even Harry Truman would contend that when honest bank employees discover crookedness in the bank, they tip off the cops in secret before they tell their own officials. Honest bank employees assume that the men who run the bank are interested in ferreting out the crooks.

The Shack by the Tracks. Nobody is more surprised than John Williams to find himself a crusader and a national figure. His neighbors in Millsboro, Del. (pop. 750) are equally amazed. They are all familiar with the ramshackle, two-story building down by the railroad tracks that became a powerhouse of electrifying exposures. For years that building was the distribution point for Williams Super Chicken Feed and Lorro Pig Builder; it also offered poultry-raising equipment for sale, and coal. John Williams, known for miles around Millsboro as a profound student of a dollar, used to sit there writing his own letters and keeping his own books. He still does a lot of that. But these days, in his crowded office, John Williams also sifts Treasury reports, running into hundreds of millions of dollars. He is still a prosperous small businessman, but now he talks about high (and very low) finance. He always speaks in a low voice, a voice that sounds like a September breeze rustling through a field of dry, half-ripened corn. He wears a fixed smile and an almost vacant stare. But his neighbors know now that behind that familiar stare Williams is sorting out facts & figures and that he is hoping to break another big one before Election Day.

Though John Williams has a unique role in contemporary U.S. politics, the outline of his life is a familiar story. It was more familiar a generation or two ago.

Give & Take. John Williams was born, the ninth of eleven children, in 1904 on a farm just outside Millsboro. His father never learned to read and could write only his name. The family did not live in want, but there were no luxuries. The Williams kids were hard put to it to earn a nickel apiece for Saturday spending. When the Williamses moved to a house with a concrete walk around it, kids came from miles around to roller-skate. Even mother Williams tried it--once.

Birthdays were not observed in the Williams household, so his father was somewhat surprised one evening when John announced that he was 17 that day, and a man. Said his father: "I guess you're right. You're a man now, sure enough. You don't have to take orders from me any more. But as long as you keep your feet under my table, you're takin' my orders, understand?" Senator Williams tells this story to illustrate the point that a measure of federal control always goes with a grant of federal funds.

A few months after he became a man, John got his feet out from under his father's table. He went to work in a brother-in-law's general store, and soon afterward decided to go in business for himself. Sussex County is chicken country, and John thought Millsboro needed a chicken-feed supplier. He and a brother borrowed a few hundred dollars, part from their father, part from a bank, and started the Millsboro Feed Co. It was no bonanza, but it grew steadily. At 19, John married Elsie Steele, a farm girl. In the early years, she raised broilers in the backyard to supplement the family income.

The Williamses are now very wealthy, by Sussex County (but not Wilmington) standards. He is not a millionaire but owns a large interest in a poultry farm (300,000 chickens and 6,000 turkeys a year) and a hatchery (105,000 chicks a week). All in all, Williams owns about 1,000 acres of Delaware farm land, some of it in partnership with relatives.

He is an enthusiastic Rotarian, and he and Elsie have traveled quite a bit in South America and Europe. At an international Rotary meeting in Nice, France, Williams became a hero to his fellow Americans by discovering a restaurant that served Maxwell House coffee.

That was the sum of his distinctions in 1946, when he decided to run for the Senate. His political qualifications seemed to be nil. His friends thought he must be joking or that he meant the Delaware state senate. He knew only one (retired) politician, had made only one speech in his life (to a Rotary Club). On that occasion, he could not be heard beyond the front row, and he was uneasy and ungrammatical. "It was just something I thought might could be done." he says.

It could. The retired Millsboro politician, an ex-Congressman named George Williams (no kin), looked over the field and found Republican candidates scarce because everybody thought the Democrats would win in Delaware.

Up to Wilmington went Williams & Williams. George called on Frank du Pont, gave him an impressive earful about John, persuaded Du Pont to call the Wilmington Journal and say that the next Senator from Delaware was going to stop in to see the editor. A word like that from a Du Pont (provided it's the right Du Pont) goes a long way in Delaware. That afternoon Williams & Williams convinced the editor that John was senatorial timber--or at least that he was good enough to take the inevitable beating.

If a candidate travels hard enough, he doesn't need to speak above a whisper to be heard the length (96 miles) and breadth (35 miles) of Delaware. It's the handshakes that count. John Williams shook hands hard and beat his lawyer, Senator James Tunnell, by 12,000 votes, a respectable margin in Delaware.

A Delinquent Account. Senator Williams went to Washington with nothing much on his mind, and settled down in the back row as one of the hard-shelled Republican conservatives.He'd been there a year when an accident happened. As he tells it:

"We used to get a lot of complaints in the mail, every Senator gets them, and usually you just regard them as routine. Late in 1947, I was getting a lot of complaints from Delaware that something was wrong in the Wilmington tax collector's office. I didn't pay too much attention to it." Williams turned his complaints over to a subcommittee of the House of Representatives that was investigating discrepancies in another Internal Revenue office. Among the "delinquent accounts" sent in by the Wilmington tax office was that of John J. Williams of Millsboro. The committee members, says Williams, "were in the embarrassing position of checking with me." Williams proved by his canceled checks that he had paid his taxes, $15,000 for himself, $7,500 for his wife.

Williams' payment, it turned out, had been credited to another man, and the money embezzled by an assistant cashier in the tax office. What burned Williams up most of all was the discovery that the Treasury had known about the embezzlement for six months and done nothing about it. He made a speech demanding that the Wilmington collector and another official be fired. They had been promoted. But a $2,000-a-year bookkeeper who helped the investigators got no promotion.

Williams began to suspect that there was something rotten in the Bureau of Internal Revenue. His suspicions deepened when secret tips began to come to him as a result of his Senate speech.

He began to follow up reports of skulduggery in the New York (Third District) collector's office. He wouldn't tell where he got the reports, but he told the Senate Finance Committee what he suspected. Treasury officials were called and pooh-poohed the story. The committee dropped the case. "I said nothing," said Williams, "but I had sources in the Treasury, and after the denial, there were individuals who resented it. I was contacted by individuals and my story was confirmed." But Williams refused to act without the records to prove that there had been tax-fixing in New York. His sources got the records. "For the next three weeks we photostated records," he says. "Each time you ask them about the files they deny they exist. You have to know the answers before you ask the questions."

Williams' detractors say now that he gets the Treasury to do all his investigating for him. And Williams admits that this is true--in a way. In the New York case it finally turned out that the Treasury, months before Williams voiced his suspicions, had received reports from its own investigators giving the facts that Williams later alleged. But Treasury officials had taken no action.

On the Senate floor, Williams demanded the removal of the New York collector. Nothing happened. Then he got into the St. Louis and San Francisco cases, which followed the same pattern. By that time, the House investigating subcommittee, headed by California's Cecil King, was hot on the trail, and heads began to roll in the Bureau of Internal Revenue.

Then Williams got interested in the income taxes of racketeers. Organized crime cannot exist without political protection, and it was only logical to suspect that the protection might extend to income taxes. Williams got and put into the Senate records the income-tax files of Harry Gross, Frank Costello, Phil Kastel, Ralph Capone, Greasy Thumb Guzik and others. Costello, for instance, was 20 years delinquent in taxes and had not been investigated for ten years. The Treasury protested that it couldn't collect from Costello because he didn't seem to have any property. Williams helpfully furnished the address of a Costello property: 79 Wall Street. How and where could a Millsboro chicken-feed dealer find a fact that was hidden from the Treasury sleuths? Williams found it in the Treasury files.

$81 Million Missing. Along the way, Williams had a notable tiff with the Department of Agriculture. He heard from one of his sources that the department's books did not balance, that a matter of some $350 million could not be accounted for. The law requires every federal department to submit its books to Congress every year. Agriculture's hadn't been submitted for four years. "I called the Comptroller General," says Williams. "They said that the Department books were in such a mess they couldn't be audited."

Williams tried to get the Senate to pass a resolution demanding the books. Senator Scott Lucas "made a big fuss," says Williams, "and then he put into the record a letter from [Secretary of Agriculture] Brannan calling me a liar. Well, I began to wonder if I was right, to tell you the truth."

But "Whispering Willie" was right as rain. He had never been to college, but he had kept the books of a chicken-feed company and his neighbors will swear that he never lost $3.50, let alone $350 million. When he got Agriculture's books, $366 million were missing. Subsequent accounting has reduced the discrepancy to a mere $81 million. Williams, in his small-town way, still considers that a lot of money.

Williams never had a secretary until he went to Washington, but he took a good one along with him, Eleanor Lenhart, a classmate of his daughter. She sorts all the tips that come in, and shows the promising ones to the Senator. "We just can't check everything," he says. "I don't have a doubt in the world that the biggest case of all time will turn up in some committee some day and they'll say, 'Why we gave that to Williams years ago.' "

One of Williams' big worries is that some day somebody will accuse him of fixing a tax case or some other impropriety. His friends tell him not to worry; he's impregnable to smears. He doesn't drink or smoke and is a devoted family man. He admits reluctantly that in the distant past he played a little poker. "But not for money," he adds quickly.

His favorite form of amusement, before he got so busy trapping rascals, was the practical joke. Once, when a neighbor invited the Williamses to share a watermelon, Williams slipped over ahead of time, took the heart out of the melon, filled it with newspapers, and replaced the end section of rind. Top officials of the Treasury Department, staring at their newspapers as Williams announced his findings, have sometimes felt like the host at the watermelon party.

"Cheap Politics." Williams has never accused Secretary of the Treasury Snyder of complicity in the tax scandals. But he resents the fact that Snyder and other Treasury officials don't seem to suspect the corruption or go after it.

The Treasury's Bureau of Internal Revenue was not always a hotbed of scandal. From 1933 to 1943, it was run by Guy Helvering, a man of spotless reputation who prided himself on being rude to politicians who asked the BIR for favors.

In 1943, Helvering was succeeded by Robert Hannegan of St. Louis, a close personal friend of Truman and a politician who prided himself on not being rude to other politicians. Hannegan was only in the office four months. (He went on to be chairman of the Democratic National Committee, Postmaster General of the U.S., and part owner of the St. Louis Cardinals; he died in 1949.) In those four months Hannegan picked James Finnegan, a political hack, as his successor in St. Louis. He also picked his successor as commissioner of Internal Revenue, Joe Nunan, a Tammany character who had been collector in Brooklyn. To succeed himself in Brooklyn, Nunan picked Joseph P. Marcelle, a ward boss.

Says Senator Williams: "I think there is too much politics in it, and I think you'll get cheap politics and corruption with any administration that has been in power as long as this one."

Williams' activities have led, directly or indirectly, to far-reaching exposures of what is known even to Democrats as "the mess in Washington." Among the key figures in recent messes:

P: Denis Delaney, collector in Boston, was sentenced to two years in prison and fined $10,500 for accepting bribes to fix tax returns.

P: In St. Louis, Old Pol Finnegan was indicted for misconduct in office (the principal charge: he sold his influence to help big taxpayers get RFC loans), was convicted and sentenced to two years in prison.

P: James G. Smyth, collector in San Francisco, was indicted for backdating tax returns to save interest and penalty payments. A jury acquitted Smyth of conspiring to backdate some returns, but he remains under indictment in connection with two: his own and his wife's.

P: Marcelle was fired as Brooklyn collector after investigators found that in seven years on the job he had $190,000 of outside income, that he filed his income-tax return for one year in his own office instead of sending it to Washington and made errors in his own favor totaling $32,834. He told investigators that he spent a lot of time at race tracks, to check up on his deputy collectors who were stationed there.

P: James B. E. Olson, a Nunan appointee, supervisor of the New York alcohol tax unit, was forced out after he admitted that he had taken $5,900 from the American Lithofold Corp. to arrange printing business with liquor dealers.

P: Daniel A. Bolich, a former assistant commissioner of Internal Revenue, resigned because of his "health," was indicted for evading $7,444 of his own income taxes. A startling note about Bolich: when the House investigating subcommittee began its work in June 1951, he was assigned to assist it.

P: Tammanyite Nunan, who resigned in 1947 and later had a lucrative law practice of tax cases, refused last April to tell the House investigating subcommittee how he happened to have $160,000 in undeclared income from 1944 to 1950. A grand jury is investigating.

P: Charles Oliphant, chief counsel of the BIR, resigned suddenly after a tax-troubled Chicagoan testified that Oliphant's name had been used by a racketeer in an attempted shakedown. Oliphant had admitted accepting gifts and expensive entertainment from big taxpayers with cases pending before the BIR. A close friend of Oliphant was Henry ("The Dutchman") Grunewald, who refuses to testify before congressional committees.

P: Theron Lamar Caudle, head of the tax division of the Department of Justice (which prosecutes frauds), was fired after he admitted accepting gifts, expensive entertainment and commissions from troubled taxpayers.

P: Howard McGrath was fired as Attorney General in the furor about the corruption disclosures, although no specific irregularity has been charged against him.

Enter an Aristocrat. All that is quite a commotion to be stirred up by a man from Millsboro, Del., and some might expect that he is about to be overwhelmingly and triumphantly returned to the Senate by the grateful citizens of his state. This happy ending, however, is by no means certain. John Williams is facing a very tough fight for re-election this year.

His attendance record is the best in the Senate, but they give out no gold stars for that. His voting record, which counts more, is about ten miles to the right of Robert Taft's. Even more important is the fact that John Williams has been so busy protecting the taxpayers of the U.S. that he hasn't spent enough time doing things for the voters of Delaware.

Last but far, far from least is Williams' opponent. Alexis Irenee du Pont Bayard, 34, a Democrat of aristocratic lineage, is a veteran with a fine combat record, a good speaker, handsome, suave, a Princeton graduate and now Delaware's hard-working lieutenant governor. Alexis Bayard's father, Thomas Bayard, was a U.S. Senator. So were his grandfather, Thomas Bayard Sr., his great-grandfather, James A. Bayard Jr., his great-uncle, Richard Henry Bayard, his great-great-grandfather, James A. Bayard Sr., and his great-great-great-grandfather, Richard Bassett (who was also a member of the Constitutional Convention). Thomas Bayard Sr., also was U.S. Minister to the Court of St. James's when it was presided over by Victoria, daughter of a ruling house somewhat junior to the Bayards of Delaware. There is nothing like the Bayards in U.S. history, not even the Adamses, not even the Du Ponts.

What's more, the present Bayard's father married a Du Pont. In 1946, John Williams had the bulk of Du Pont support. This year the family is split, with some important elements backing cousin Alexis. Dopesters say that Ike is a bit ahead of Stevenson in Delaware but that Alexis is an aristocratic whisker in front of John Williams.

On John Williams' appointment pad in his dingy Millsboro office is a notation for Nov. 5: "Duck hunting--win or lose." If he wins, he plans to go right on watching the tax collectors, although he thinks it won't be necessary if Ike gets in.

If Williams loses, he plans a trip to Japan with his wife. After that, there is always the chicken-feed business, which is not exciting. But the books balance.

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