Why It Was Better to Give Than . . .

The two-way potential for covert dealing between U.S. corporations and elected officials is so obvious that it has been illegal for federal candidates to accept corporate funds, or for executives to offer them, since the trust-busting days of 1907. Yet the laws forbidding such practices, observes Ashland Oil Inc. Board Chairman Orin E. Atkins, are primarily "honored in the breach." Atkins has reason to know. He heads one of seven major U.S. corporations* that have admitted dipping unlawfully into the company till for contributions to Richard Nixon's 1972 re-election campaign. Last week executives from six of the firms testified before the Senate Watergate committee, providing a rare glimpse into the details of high-level political financing.

The hearings produced the Watergate committee's first, long-promised evidence implicating Democrats as well as Republicans in illegal campaign practices during 1972. Gulf Oil Corp.'s vice president for governmental relations, Claude C. Wild Jr., testified that he used corporate funds to make donations not only to the President ($100,000) but also to Democratic Hopefuls Henry Jackson ($10,000) and Wilbur Mills ($15,000).

Still, by all accounts the Nixon team pushed for and succeeded in getting big gifts from corporation executives--with no questions asked about the source of the funds--to a degree unprecedented in previous campaigns.

For one thing, the President's solicitors were men whom most executives would find it hard to turn down. Three of the companies were approached by the indefatigable Maurice Stans, either while he was still serving as Commerce Secretary or soon after he had resigned to head the Finance Committee to Re-Elect the President. Herbert Kalmbach, the President's personal attorney, was in touch with two others, including American Airlines, whose chief competitor, United Air Lines, happened to be a Kalmbach client. The sixth was visited by a lower-level fund raiser whose credentials were personally verified by John Mitchell, then serving as Attorney General. Not that Nixon's men had to get rough. George A. Spater, until recently the chairman of American Airlines, was courted by Kalmbach over dinner at Manhattan's chic "21" Club. His host was "a very soft-sell, a very congenial gentleman," said Spater.

Kalmbach asked for a donation of $100,000, Spater continued, and "I was told that contributions of this amount would be regarded as in a special class." American's ex-chairman likened any thought of refusing to cooperate to the terra incognita on ancient mariners' charts, which is filled "with all sorts of fierce-looking creatures." It was not, he explained, so much a matter of what favors a hefty gift might buy as a fear of what might happen to his federally regulated firm if it did not cough up handsomely. Eventually Spater arranged to issue a false invoice for $55,000 to a Lebanese subsidiary, which transferred the money through a Swiss bank back to the U.S., where it was delivered to the committee. He raised another $20,000 from "personal sources."

American's was a typical experience. According to the witnesses, Nixon fund raisers never specifically asked for corporate funds, but spoke in amounts so large that there was little choice but to use company cash. Stans, said Gulf Vice President Wild, "indicated that he hoped to obtain $100,000 each from the large American corporations"; Wild was left with the impression "that this was kind of a quota."

Disguises. Like American, most of the other corporations "laundered" their contributions by tapping foreign subsidiaries or making phony payments to foreign companies. The American Ship Building Co. chose a more complicated method: it issued "bonuses" to employees, who then forwarded the proceeds to various Nixon committees designated by American Ship Building Chairman George M. Steinbrenner III.

Stans urged contributors to get their money to him before April 7, 1972, the day that a new campaign law requiring full disclosure of big donors went into effect. Several months later, however, a federal court in Washington, responding to a Common Cause suit, ruled that anonymity for large contributors was illegal even under the old law and ordered the Finance Committee to name them.

Last week's testimony revealed that yet another Administration cover-up may well have been attempted in that process. Stans and other committee representatives returned to their original corporate contacts and asked them to submit lists of individual donors to cover their gifts. Such disguises are not unusual; a prime backer of Hubert Humphrey, New York Financier John Loeb, was fined earlier this year for funneling a large donation through several employees. Ashland received a letter from Committee Counsel Kenneth Parkinson simply stating that Atkins and his wife would be named as the source of the $100,000 given by Ashland. He assumed that the committee got his wife's name from "President Nixon's Christmas card list," Atkins testified.

Officials of American Airlines, Gulf and Goodyear also testified that they were pressured to provide lists of individual donors. At American Ship Building, the "bonus" recipients and Chairman Steinbrenner concocted a false story to explain to FBI investigators why they were on such a list, according to Company Secretary Robert Bartlome. However, when it became clear that the group would be summoned to repeat the story before a federal grand jury, Bartlome informed his boss that he and the other seven would not perjure themselves before it. At that, recounted Watergate Committee Counsel Sam Dash, Steinbrenner "laid his head on the desk and said he was ruined, the company might be ruined, and he mentioned something about jumping off a bridge." Steinbrenner has told the committee that he will invoke the Fifth Amendment if called to testify.

Out of Fear. So far, six of the eight companies have been fined for their illegal contributions, and the cases of the other two are pending in federal courts. In addition, executives in most of the corporations judged guilty have been personally fined for their part in the unlawful financing of Nixon's campaign. The businessmen were charged with misdemeanors.

Like Spater, most of the executives claimed that they broke the law not to buy specific favors for their companies but rather out of fear of what might happen if they refused. The process, agreed Atkins, "borders on extortion."

One who firmly took no such position was Goodyear Tire & Rubber Co. Chairman Russell DeYoung. His company's illegal donation, he testified, "was made solely because we thought the re-election of the President was in the best interest of the country." Republican Senator Lowell Weicker, after getting DeYoung to concede that the company disclosed its contribution only when it was clear that federal investigators were getting close, commented: "I'd say it's a pretty sorry day for Goodyear." Snapped DeYoung: "Not necessarily."

The pitfalls of campaign financing may have tripped yet another 1972 Presidential candidate: Brooklyn's Black Democratic Congresswoman Shirley Chisholm. Though Chisholm spent less (about $75,000) in her abortive presidential drive than any serious major-party contender, the General Accounting Office charged in September that she maintained inaccurate financial records, accepted three small corporate donations, and failed to report an $ 18,000 surplus in her campaign. No action has yet been taken by the Justice Department, but last week, apparently as the result of a leak, Chisholm was forced to answer questions about the allegations. She said that the surplus has long since been spent to pay late-arriving bills and charged that Government investigators are determined to embarrass her because she is "unbought and unbossed."

* Ashland Oil Inc. ($100,000); Gulf Oil Corp ($100,000); Braniff Airways Inc. ($40,000); American Airlines ($55,000); Goodyear Tire & Rubber Co. ($40,000); 3M Co. ($30,000); Phillips Petroleum Co. ($100,000). Employees of an eighth, the American Ship Building Co., testified that they cooperated in donating $26,200 in corporate funds to Nixon's campaign, but the company itself has admitted no wrongdoing.

This file is automatically generated by a robot program, so reader's discretion is required.