The Art of Influence

Influence peddling in Washington is an art both subtle and circuitous. So the House Subcommittee on Legislative Oversight learned last week as it dug for details of private talks between members of the Federal Power Commission and Thomas G. ("Tommy the Cork") Corcoran, onetime New Dealer-Wheeler turned wheedler for the Tennessee Gas Transmission Co. (TIME, April 4). What started with curiosity about Corcoran turned into a full-scale investigation of off-the-record contacts between FPC commissioners and utility company representatives. The results made for headlines but were instructive nonetheless.

Corcoran had both phoned and visited FPC Chairman Jerome K. Kuykendall to discuss a case involving a $52 million pipeline for Midwestern Gas Transmission Co., a subsidiary of Tennessee Gas. Commission examiners had recommended that the company's returns on investment be set at 6 1/4% instead of the 7% asked by the company. Kuykendall admitted that Corcoran's phone call was improper, but insisted that it "was all over before I could respond." During Corcoran's office visit, testified Kuykendall, he told the chairman that Tennessee was thinking of selling part of its stock interest in Midwestern Gas. This information, said Michigan Republican John B. Bennett, "was deliberately planned to present new information to you privately in an attempt to influence your decision."

Bennett explained that if Tennessee dropped out of Midwestern, the smaller company would have trouble financing the pipeline and would require a higher rate of return than the 7% asked for by Tennessee. Concluded Congressman Bennett: "The most charitable thing that could be said about your conversation with Mr. Corcoran, both on your part and his was that it was not only unfortunate but foolhardy and indiscreet."

250 Private Talks. Kuykendall said that he had frequent contacts with power-industry executives, and only "very seldom" did some try to overstep the bounds of propriety. He had also accepted industry-sponsored plane rides for "inspection tours" but thought this was "proper." On one trip to Atlantic City in 1954, Kuykendall recalled that he "saved the Government money" by accepting a ride in a "little plane that had only one engine." However, he agreed that the Government could afford to pay for such inspections and that he would no longer accept free rides.

When the committee checked the appointment book of FPC Vice Chairman Arthur Kline, it found that Kline had eight visits from Corcoran and more than 250 other private talks and meetings with 21 representatives of natural-gas companies in less than two years. Kline insisted that the talks were "not only proper but necessary to a rapid and efficient performance of commission work." Some of the industry representatives, he said, were friends whom he golfed with and met at Cub Scout encampments.

In the Midwestern Transmission case, Corcoran called on Kline as well as Kuykendall. Kline originally favored the examiner's recommendation of a 6^% return for the company, but several days after Tommy the Cork's call, Kline agreed to go along with the rest of the commission in postponing a decision on the rate of return. Testified Kline: "Corcoran's visit had no influence whatsoever on my decision."

Rebate Reduction. The committee also dug into the FPC's policy on setting temporary rates. An FPC examiner found that a temporary rate increase by the Colorado Interstate Gas Co. was later reduced. The company owed its customers a refund of $50 million, but paid only $38.6 million in a settlement negotiated by the FPC. Kuykendall admitted that W. E. Mueller, president of Colorado Interstate Gas Co., had visited him, and said that a large refund would be financially disastrous to the company. But, said Kuykendall, "if Mr. Mueller had tried to argue the merits of the case, I'd have shut him up." Kuykendall said that Kline had gone to Colorado and worked on the reduced refund. Explained Kuykendall: "We encouraged it. We have a tremendous backlog of cases." Asked Committee Counsel Robert W. Lishman: "Is it in the consumer's interest for the FPC to go for a lower settlement?" Replied Kuykendall: "You're oversimplifying. It's not in the public interest for such a company to go bankrupt."

The committee is also concerned, said Lishman, that the FPC has another $506 million worth of temporary gas and electric rate increases pending, and in some cases temporary increases have been piled on other temporary increases. They are one way for gas companies to finance expansion at the consumer's expense, argued Lishman. If the increases are later turned down and rebates are necessary, the money is paid back to customers at interest rates about the same as regular financing rates.

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