LBJ and the Power Elite

Lyndon Johnson’s foreign policy was dominated by his escalation of the Vietnam conflict into a full-scale (if undeclared) war, and of the increasing splits over the war among the financial power elite. Johnson retained the hawkish Rusk, McNamara, Mc-Cone, and Lodge in their posts. As newly minted Vietnam doves were ousted from foreign policy positions, they were replaced by hawks. Thus, William Bundy became Assistant Secretary of State for Far Eastern Affairs, at the same time becoming a director of the CFR. On the other hand, the increasingly critical W. Averell Harriman was ousted from his post of Under-Secretary of State.

Cyrus Vance continued as Johnson’s Secretary of the Army; when he rose to Deputy Secretary of Defense, he was replaced by Vance’s old friend and roommate at Yale, Stanley R. Resor. Resor was a partner in the major Wall Street law firm of Debevoise, Plimpton, Lyons, & Gates, and was the brother-in-law of economist and banker Gabriel Hauge, president of the Manufacturers Hanover Trust, and treasurer of the CFR.

Resor had married into the Pillsbury flour family of Minneapolis, which had long been connected with the holding company, the Northwest Bancorporation. After Vance retired as Deputy Secretary of Defense to return to law practice, he was replaced by Johnson’s hard-line Secretary of the Navy Paul Nitze, former partner of Dillon, Read, whose wife was a member of the Rockefeller-connected Pratt family.

One important meeting at which it was decided to escalate the Vietnam War was held in July 1965. The meeting consisted of Johnson, his designated foreign policy and military officials, and three key unofficial advisers: Clark M. Clifford, the chairman of the President’s Foreign Intelligence Advisory Board, and an attorney for the du Ponts and the Morgan-dominated General Electric Co.; Arthur H. Dean, a partner in Rockefeller-oriented Sullivan & Cromwell and a director of the CFR; and the ubiquitous John J. McCloy.

Shortly after the meeting, a distinguished national committee of power elite figures was formed to back President Johnson’s aggressive policies in Vietnam. Chairman of the committee was Arthur H. Dean; other members were Dean Acheson; Eugene Black, who, after retiring as head of the World Bank, returned to be a director of Chase Manhattan; Gabriel Hauge of Manufacturers’ Trust and the CFR; David Rockefeller, president of the Chase Manhattan Bank and a vice-president of the CFR; and two board members of AT&T, William B. Murphy and James R. Killian, Jr. Indeed, of the 46 members of this pro-Vietnam War committee, 19 were prominent businessmen, bankers or corporate lawyers. Later, when Johnson needed to raise taxes to supply more funds for the war effort, he selected thirteen businessmen to head the lobbying effort.

A fascinating aspect of the Johnson administration was the heavy influence of men connected with the powerful Democratic investment banking house of Lehman Brothers. Johnson’s first Under-Secretary of State, George Ball, who left because of increasing disillusionment with the Vietnam War, would later become a key partner of Lehman Brothers. Johnson’s most influential unofficial adviser was long-time and personal legal and financial adviser Edwin L. Weisl, a New York attorney who was a senior law partner to Cyrus Vance at Simpson, Thacher & Bartlert. Not only was this law firm the general counsel to Lehman Brothers, but Weisl himself was dubbed by Fortune magazine as “Lehman’s eighteenth partner.” Weisl had great influence at Lehman and occasionally sat in on partners’ meetings. He was also reputed to be the closest friend of senior partner Robert Lehman, and sat on the board of the Lehman-controlled One William Street Fund.

Another very close and influential Johnson adviser, and a consistent hard-liner on Vietnam, was his old friend Abe Fortas, a Washington lawyer and veteran New Dealer. During the Johnson years, Fortas served as director, vice-president, and general counsel for the Texas-based GreatAmerica Corp., a giant holding company controlling several insurance companies, Braniff Airways, and two banks, including the First Western Bank and Trust Co. of California.

During the same period, Fortas was also a director and vice-president of the large Federated Department Stores. Both Federated and GreatAmerica had close ties with Lehman Brothers. Fred Lazarus, Jr., a top official of Federated, sat on the board of the Lehman-controlled One William Street Fund, along with Edwin Weisl. And the only two non-Texans on the board of GreatAmerica Corp. were William H. Osborn, Jr., of Lehman Brothers, and Gustave L. Levy, a partner in the closely allied Wall Street investment bank of Goldman, Sachs & Co. Goldman, Sachs was the senior banking adviser for the Murchison Texas oil interests, a group with whom Lyndon Johnson was personally allied.

Finally, after Henry Cabot Lodge retired as the hawkish Ambassador to South Vietnam in 1967, he was replaced by Ellsworth Bunker. Bunker, who had been president of the National Sugar Refining Company, served as ambassador to various countries in the Eisenhower administration, and then Ambassador to the Organization of American States under Johnson. Bunker was connected to John L. Loeb, the Lehman kinsman who headed the investment banking firm of Carl M. Loeb, Rhoades & Co. Loeb placed Bunker on the board of Curtis Publishing Co. after he obtained control of that firm for Loeb, Rhoades. Loeb also installed Bunker’s son, John, as president of Curtis. Furthermore, Ellsworth Bunker’s younger brother, Arthur, had served as director of the Lehman Corporation, and of Lehman’s One William Street Fund until his death in 1964.

While Bunker had served Johnson as Ambassador to the OAS, he continued to sit on the board of the National Sugar Refining Company. In late 1965, Bunker played a crucial role in Johnson’s massive U.S. invasion of the Dominican Republic, an intervention into a Dominican civil war to prevent a victory by left-wing forces who would presumably pose a dire threat to American sugar companies in the republic. As President Johnson’s emissary to the Dominican Republic just after the invasion, Bunker played a decisive role in installing the conservative Hector Garcia-Godoy as president.

Increasingly, however, the power elite became divided over the morass of the Vietnam War. Under the blows of the Tet offensive in January 1968, Robert McNamara had become increasingly dovish and was replaced as Secretary of Defense by hard-liner Clark Clifford, with McNamara moving gracefully to take charge of the World Bank. But, on investigating the situation, Clifford, too, became critical of the war, and Johnson called a crucial two-day meeting on March 22, 1968, of his highly influential Senior Informal Advisory Group on Vietnam, known as the “Wise Men,” made up of all his key advisors on foreign affairs.

Johnson was stunned to find that only Abe Fortas and General Maxwell Taylor continued in the hard-line position. Arthur Dean, Cabot Lodge, John J. McCloy, and former General Omar Bradley took a confused middle-of-the-road position, while all the other elite figures such as Dean Acheson, George Ball, Mc-George Bundy, C. Douglas Dillon, and Cyrus Vance had swung around to a firm opposition to the war.

As David Halberstam put it in his The Best and the Brightest, these power elite leaders “let him (Johnson) know that the Establishment—yes, Wall Street—had turned on the war…. It was hurting the economy, dividing the country, turning the youth against the country’s best traditions.” LBJ knew when he was licked. Only a few days afterward, Johnson announced that he was not going to run for re-election and he ordered what would be the beginnings of U.S. disengagement from Vietnam.

The foreign-policy aims of the Nixon administration had a decided Rockefeller stamp. Secretary of State William P. Rogers was a Wall Street lawyer who had long been active in the liberal Dewey-Rockefeller wing of the New York Republican Party. Indeed, Thomas E. Dewey was the main backer of Rogers for the State Department post.

Dewey’s entire political career was beholden to the Rockefeller interests, as was dramatically shown one election year when, in an incident that received unaccustomed publicity, Winthrop W. Aldrich, Rockefeller kinsman who was president of the Chase National Bank, literally ordered Governor Dewey into his Wall Street offices and commanded him to run for re-election. The governor, who had previously announced his retirement into private practice, meekly obeyed. Furthermore, Roger’s law partner, John A. Wells, had long been one of Nelson Rockefeller’s top political aides and had served as Nelson’s campaign manager for President in 1964.

Second-tier posts in the Nixon State Department went to financial elite figures. Thus, the following men were successively Under Secretaries of State (after 1972, Deputy Secretaries) in the Nixon White House:

• Elliot L. Richardson, partner of a Boston Brahmin corporate law firm and a director of the New England Trust Co., and a man whose uncle, Henry L. Shattuck, had long been a director of the New England Merchants National Bank and of the Mutual Life Insurance Co. of New York.

• John N. Irwin II, partner of a Wall St. law firm (Patterson, Belknap & Webb) long associated with the Rockefeller interests, and whose wife was a sister of the Watson brothers family of IBM.

• Kenneth Rush, president of Union Carbide Corp., and a director of the Bankers Trust Co. of New York.

• Robert S. Ingersoll, chairman of the board of Borg-Warner Corp. and a director of the First National Bank of Chicago.

Also, the Deputy Under-Secretary of State for Economic Affairs under Nixon was Nathaniel Samuels, a partner in the investment banking house of Kuhn, Loeb & Co., and a director of the Rockefeller-controlled International Basic Economy Corp.