The Thickening ITT Imbroglio

IT began with Columnist Jack Anderson's charge that the Administration last summer settled antitrust suits against ITT in exchange for a $400,000 pledge by an ITT subsidiary to help underwrite the Republican National Convention in San Diego. The settlement was relatively favorable to ITT, though by no means a bonanza, and no specific quid pro quo arrangement has been proved. Indeed, it seemed naive to suggest that a superconglomerate with assets of $6.7 billion would try to buy the favor of the Department of Justice for such a comparatively trifling sum--or that it could be successful.

Last week the White House began a coordinated counterattack, mobilizing Republican Senators, the Republican National Committee and the Justice Department in an effort to discredit Anderson, his charges and the press coverage of the ITT case. Most dramatically, ITT Lobbyist Dita Beard, from the Denver hospital where she is said to be suffering from severe angina pectoris, issued a statement disavowing her now famous memo as a forgery, "a false and salacious document." Nebraska Senator Roman Hruska damned the hearings as "this smear-a-day campaign" brought on "because of a spurious document dredged up by the Louella Parsons of the political world."

For all the Administration denials, however, an unsettling pattern of coincidence had emerged in the first two weeks of hearings before the Senate Judiciary Committee, which technically was meeting only to clear up unresolved questions on the confirmation of Richard Kleindienst as Attorney General (TIME, March 20). Kleindienst and others speaking for the Government kept changing the details of their stories. Beyond that, the case was arousing mounting wonder about the Administration's intimacy with big business, especially with men whose companies were entangled in antitrust litigation. Last week's first witness, former Attorney General John Mitchell, approached the proceedings with a certain contemptuous coldness. Then, with a grim voice and a slightly shaking hand, Mitchell read a five-page preliminary statement. He denied categorically that he had played any role in the ITT antitrust settlement or in the selection of San Diego as the Republican Convention city.

But Mitchell conceded that he had met with ITT President Harold Geneen for 35 minutes on Aug. 4, 1970, at Geneen's request. "I assented to the meeting," Mitchell said, "on the express condition that the pending ITT litigation would not be discussed." According to Mitchell, Geneen argued that the Justice Department was prosecuting corporations merely for their "bigness." Mitchell claimed that the discussion was "entirely theoretical," yet at the time it was held, the antitrust division had only four "bigness" cases pending; three were against ITT. Mitchell also declared that twice last April he had met with ITT Director Felix Rohatyn, but not to discuss any ITT business.

Obviously there is nothing sinister about Cabinet members (or White House staffers) having contacts with business, or with labor, or any other interest group. In fact, such contacts are necessary. What made this case somewhat different was Mitchell's delicate role as Attorney General with a case pending before his department--especially considering his reputation in Washington for inaccessibility.

Mix-Up. On another key question, California Lieutenant Governor Ed Reinecke had previously claimed that he saw Mitchell in mid-May and told him of the ITT commitment to back the convention in San Diego. If that is so, then Mitchell knew of the ITT convention offer weeks before his antitrust division agreed to the out-of-court merger settlement. "Mr. Reinecke must have had me mixed up with someone else," Mitchell told the committee, and insisted that he had seen him in April and September. Before Mitchell's appearance, Reinecke changed his story and denied talking to Mitchell in May. Instead it was September, Reinecke said --a date that made no sense, since by then San Diego had already been chosen as the convention city.

The most eagerly awaited answers involved Mitchell's relationship with ITT Lobbyist Dita Beard, who claimed in her confidential memo to her corporate superiors that Mitchell was "definitely helping us" with the ITT settlement. Mitchell's response was swift and curt. Mrs. Beard approached him three times at a Kentucky Derby party in Louisville, he said, and on the third sally, "I told her in rather harsh terms that I didn't appreciate her approaching me." His message was: shove off.

Shredding. After Mitchell came ITT President Geneen. He too disavowed any connection between the ITT settlement and the convention offer. In fact, he said, that offer, made by the Sheraton Corp., an ITT subsidiary, was not for $400,000 but for $100,000, and on condition that the presidential headquarters would be set up in a new Sheraton hotel. An additional $100,000 was offered if needed and if matched by other businesses. Geneen said the money was a routine investment to publicize the opening of a new hotel.

There was one particularly intriguing chapter in the week's testimony. Last month Jack Anderson's assistant, Brit Hume, had appeared in ITT's Washington office and showed the original of the Beard memo to Mrs. Beard and her boss, ITT Vice President W.R. Merriam. According to Geneen and ITT Senior Vice President Howard Aibel, the Washington staff was ordered "to remove any documents that were no longer needed for current operations, as well as documents which, if put into Mr. Anderson's possession, could be misused and misconstrued by him so as to cause embarrassment to the people mentioned therein."

"Many sacks" full of such papers, Aibel testified, were then fed into a shredder. Although Aibel made the process sound like spring cleaning, it left the impression of a beleaguered foreign embassy destroying secret papers on the eve of war. It is perhaps understandable for a company to be nervous at the prospect of having Jack Anderson rooting through its files. But as California Senator John Tunney remarked, "You must realize how this looks on its face."

Stock Sale. Nor was ITT's case buttressed by the revelation that for six weeks last summer, from June 18 to the end of July, Aibel and six other top officials of ITT and an ITT subsidiary sold 41,280 common and 8,500 convertible preferred shares of ITT stock. ITT spokesmen said the sales were mere coincidence, yet at least some ITT officials learned around June 18 that the Government had proposed the ITT antitrust settlement. As it turned out, the settlement caused a $7 a share drop in the price of ITT stock on Aug. 2, the first trading day after the public announcement. The settlement was relatively favorable to ITT, allowing it to keep the Hartford Fire Insurance Co., but requiring it to divest itself of six smaller companies. The outcome could have been far worse for ITT, but it also could have been much better.

Then came Dita Beard's disavowal of the memo that Anderson had published. That claim seemed at best peculiar, since Anderson's assistant had showed her the memo three weeks before, giving her plenty of time to denounce it. If the memo was a fake, why did ITT go to the trouble of shredding its documents in Washington? Early on, ITTs defenders went to some lengths to portray Mrs. Beard as a sometimes irrational incompetent. Having first tried to discredit her, they are hard pressed to defend what she says now.

Name Dropping. Some fellow lobbyists in Washington believe that if the memo was a fake, it was one perpetrated by Mrs. Beard. Among the lobbying fraternity in the capital, where salaries for such work often climb to six figures, Dita Beard was virtually unknown; she earned only $30,000 and lived in a modest house in nearby Arlington, Va. Important lobbyists entertain in baronial houses, charter airplanes, give lavish cocktail parties. Dita Beard lived more like a suburban schoolteacher. Once a year, in ITT's name, she gave a small Christmas cocktail party for 30 or 40 people. Curiously, the Senate antitrust subcommittee, which an ITT lobbyist would certainly try to influence, had never heard of her.

A theory persists that her memo, which claimed wide-ranging contacts and influence, was sheer bravado, "papering a job" with a name-dropping report to convince an employer that his interests are getting extensive and impressive care. Said one senior lobbyist: "For a job like this, one does not hire a $30,000-a-year flunky to swing a billion dollar deal." Besides, he added, "You never, never write it down. That's the first rule of the business."

As the Judiciary Committee hearings continue, the political pressure mounts. The committee has yet to put any of its investigators onto the case, but Democrats Tunney and Edward Kennedy have been bearing down with insistent questions that have increasingly aroused pro-Administration Republicans in the Senate. Kentucky Senator Marlow Cook last week charged that Anderson's secretary, Opal Ginn, was an old drinking companion of Dita Beard. It turned out, however, that they had only happened to be at the same party once at a Washington hotel.

There are rumors in the Senate cloakrooms that if the ITT affair persists and threatens to become a major election issue, Richard Kleindienst may be sacrificed as a scapegoat. To do so, however, would amount to an admission that Kleindienst, or someone, had done something wrong--a point the Administration is far from conceding.

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