A Little Help for His Friends

A Little Help for His Friends

For a politician as wealthy as Nelson Rockefeller, money can be a curse as well as a blessing. His millions have convinced some people that because he has everything, he is incorruptible; but those same millions inevitably arouse suspicion among other people that he may be buying political support or unduly influencing public policy for his family's benefit. There is no evidence that the vast Rockefeller family fortune has been so used; nor is Rocky's confirmation as Vice President yet in serious trouble. Nevertheless, the normally chipper and confident Rockefeller was embarrassed and distressed when news of his lavish gifts to a variety of people leaked out last week.

Several gifts seemed wholly innocent acts of compassion, such as covering medical expenses or easing the financial problems of retiring aides. At least one gift came perilously close to violating New York State's conflict-of-interest laws, however, and others raised questions of propriety. Hugh Morrow, Rockefeller's chief press spokesman for 15 years, said that most of the gifts went to longtime employees. "Many of these friends have been in public service where the pay is not always commensurate with what these people could earn elsewhere," said Morrow. A Senate aide described the practice more picturesquely: "It's like the old lords of the manor giving Christmas purses to the retainers." The circumstances surrounding Rocky's gifts varied widely:

HENRY KISSINGER, $50,000. While a member of the Harvard faculty, Kissinger worked for Rockefeller and advised him on world and national issues for 13 years. On Jan. 17,1969, as Kissinger was about to become President Nixon's top national security adviser, Rockefeller told him in a letter that he was arranging a $50,000 gift "as a token of my friendship and my appreciation for the work you have done in service to the people of this country. It comes from Happy and me, with our warmest best wishes." Kissinger consulted White

House attorneys, who made no objection to his accepting the money, then put the funds into a trust account for his two children. Rockefeller paid a gift tax on the money;-- Kissinger paid a tax on the trust. Still, North Carolina's Republican Senator Jesse Helms complained in the Senate: "Even if it is legal, there is a question of whether or not it is proper to induce a sense of substantial obligation in a man who is about to become a senior public official."

WILLIAM J. RONAN, $625,000.

While serving in high transportation posts during Rockefeller's 14-year governorship, Ronan borrowed heavily from his boss. Neither Rockefeller nor Ronan would detail the purposes of the loans and gifts further than vaguely citing real estate purchases and financial responsibilities. Ronan in 1968 became the $75,000-a-year chairman of New York's Metropolitan Transportation Authority, which owns and operates the New York City area public transit system. He quit last May when Rocky was no longer Governor. Apparently in the few days before Ronan was appointed by the Governors of New York and New Jersey as the unsalaried head of the Port Authority of those two states, Rockefeller canceled the Ronan loans, which then totaled $510,000, and paid a gift tax of $331,000 on this debt cancellation.

Both the Transit Authority and the Port Authority, which operates more than 20 bridges, tunnels, airports and freight terminals, do multimillion-dollar business with New York banks, including Chase Manhattan, headed by David Rockefeller. Asked what, if anything, he did in return for the gift, Ronan jauntily told reporters: "I said thank you."

The Ronan gift was clearly troublesome. It is illegal in New York State for anyone to give, or for a state employee to accept, any "gratuities ... for having engaged in official conduct which he was required or authorized to perform and for which he was not entitled to any special or additional compensation." New York State Attorney General Louis Lefkowitz, a Republican in a difficult race for reelection, said he was investigating the Ronan gift.

L. JUDSON MORHOUSE, $86,313.

Long one of Rockefeller's closest political associates, Morhouse had served for eight years as the unsalaried New York Republican Party Chairman. In 1960 he borrowed $100,000 from Rockefeller to acquire commercial real estate on Long Island. Six years later, Morhouse was convicted of bribery in a liquor-license scandal. Rockefeller commuted the sentence for Morhouse, then ill of cancer, in 1970. By then the loan had been reduced to $86,313, which Rockefeller canceled. Senate Rules Committee Chairman Howard Cannon, a Democrat, said that he was bothered by such a gift to "a convicted felon."

EDWARD J. LOGUE, $176,389. A top urban planner, Logue was lured to New York in 1968 by Rockefeller to organize and direct the New York State Urban Development Corp., which oversees urban renewal and low-income housing in the state. One incentive was a $31,389 gift. In 1969 Rocky also loaned Logue $145,000 to buy a cooperative apartment. Logue has since repaid $45,000 of this loan and said he intends to pay it all. The cash apparently was given before Logue went on the New York State payroll.

At week's end, in a letter responding to a request for more information from Senator Cannon, Rockefeller named other recipients of his generosity and placed the total funds given to 18 present or former public officials and staff members since 1957 at $1,778,878. Rockefeller paid about $840,000 in taxes on those gifts. Another $326,290 was bestowed on nongovernmental associates, including $155,000 to Emmet John Hughes, an author, journalist and former adviser to President Eisenhower.

Among the state officials who benefited: Alton G. Marshall, Rockefeller's executive officer and secretary when Rocky was Governor, and later president of Rockefeller Center in Manhattan, $306,867; James W. Gaynor, whom Rockefeller attracted to New York from Colorado to become state commissioner of housing and community renewal, $107,000; Henry L. Diamond, a conservation and ecology expert, head of the Department of Environmental Conservation under Rocky and now executive director of his Commission on Critical Choices for Americans, $100,006; Victor Borella, a special assistant on labor issues in Rockefeller's administration, $100,000; Hugh Morrow, $135,000; and Mrs. Anne Whitman, onetime secretary to President Eisenhower and assistant to Rockefeller, $48,000 in gifts and loans.

In the case of all the state officials, Rockefeller said in his letter, "We had identical objectives, there was no conflict of interest involved, and there was nothing illegal or immoral about either the loans or gifts."

Curious Gift. Rocky's largesse was also demonstrated in smaller ways.

When Meade Esposito, a Brooklyn Democratic leader, admired a Picasso lithograph in Rockefeller's office in Albany, Rocky sent one to him as a gift.

It was "only worth about $2,000," Esposito recalled, and when he hung it at home, his wife complained: "Christ, you're spoiling my color scheme!"

It was also revealed that the Rockefeller family has given campaign contributions to at least 22 members of the House and Senate since 1968, including $28,750 to New York's Republican Senator Jacob Javits. The contributions were completely legal. Curiously, Rockefeller's letter listed one donation of $139,090 to a trust "for the benefit of a longtime personal friend and associate on private affairs"--the only gift whose recipient he declined to identify.

Most of Rockefeller's gifts appear to have been motivated by his praiseworthy desire to keep able men in government. Nonetheless, private financial support of public officials is obviously open to wide abuse and to the appearance, if not the fact, of improper influence. Rockefeller will undoubtedly face stern questioning when the House Judiciary Committee holds confirmation hearings and when, as seems likely, the Senate Rules Committee recalls him for further testimony.

Rockefeller will be grilled, too, about a matter that smacks more directly of questionable political tactics. In 1970 his brother Laurance put up $60,000 to produce a critical biography of former Supreme Court Justice Arthur Goldberg, who was running against Rocky for Governor at the time. It was written by Political Hatchet Man Victor Lasky, who had previously collected and pasted together every anti-Kennedy rumor he could find in his 1963 book, JFK: The Man and The Myth.

West Virginia Democrat Robert Byrd, when asked about the financing of the Goldberg book, said it was "reminiscent of the dirty tricks of the Nixon era." Rocky contends unconvincingly that he had known nothing about his brother's investment in the book until FBI agents raised questions about it during their confirmation investigation. Disingenuously, he adds that it was purely a money-making venture and that Brother Laurance lost about $52,-000 in the ill-conceived project. Actually, copies of the book never received general distribution, and even the author claimed that the book was used only by the Rockefeller campaign committee.

In a deftly worded wire to Goldberg, Rocky apologized, accepted "full responsibility for the whole regrettable episode" and termed it "utterly alien to and incompatible with the standards I have always tried to observe in my political life." Rockefeller said that he should have stopped the book project as soon as he learned about it but did not say when that was.

"The donor, rather than the recipient, must, in most cases, pay a federal tax on gifts in excess of $3,000.

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