The A

rctic: Fact and F

iction 3

Edm

und Wilson

4

The C

ure That K

ills 12

NM

.. VII, 28

T4c Wasiiington post

JUL

Y 15, 1973

The S

overeign State of IT

T

By A

nthony Sam

pson

Stein and Day. 323 pages. $10

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re-

Illustra

ted b

y B

atty

By P

HIL

IP G

EY

EL

IN

LA

ST

YE

AR

'S A

NN

UA

L B

AR

BE

CU

Z

in B

russels fo

r the m

anag

ers of th

e far-flu

ng in

terests of th

e Intern

ational

Telep

hone an

d T

elegrap

h C

orp

oratio

n

took p

lace just after th

e scandals in

-volv

ing H

artford

Life an

d D

ita Beard

, an

d C

hile an

d S

alvad

or A

llend

e had

bro

ken

open

. Yet sp

irits could

hard

ly

have b

een h

igher: th

ere

was m

uch

hearty

back

-slapp

ing

and

sho

uld

er- p

un

chin

g an

d a lo

t of lau

gh

ter (pretty

m

uch

in u

niso

n) at th

e jokin

g allu

-sio

ns m

ade b

y IT

T's to

p m

an, H

arold

G

eneen

. to h

is com

pan

y's n

ew n

oto

ri-ety. A

nthony Sam

pson, a British journ-

alist and au

thor o

f The N

ew A

nato

my

of B

ritain

. recalls in

his n

ew b

ook,

The S

overeig

n

State o

f IT

T,

that h

e

too

k th

e o

ccasio

n to

ask

the h

ead

of p

ublic

rela

tions, N

ed G

errity

, w

hat effect

he th

ou

gh

t the scan

dals

had

had

on IT

T's b

usin

ess, and G

errity

replied

that "th

e publicity

had

really

establish

ed th

e com

pan

y's co

rporate

iden

tity—

`the reserv

ations fo

r Shera-

ton h

otels h

ave b

een a reco

rd.' "

That scen

e and th

at. response say

so

meth

ing

abo

ut th

e character o

f ITT

an

d th

e men

who h

ave ru

n it o

ver th

e years—

som

ethin

g ab

out th

e single-

min

ded

pu

rsuit o

f pro

fits abo

ve ev

ery

oth

er consid

eration, m

oral, eth

ical, or

even

legal, an

d also

about th

e cynical

ind

ifference to

pu

blic sen

sibilities.

ITT

had

just b

een accu

sed rath

er per-

suasiv

ely o

f tryin

g to

put th

e fix in

at th

e Justice D

epartm

ent o

n th

e big

-gest an

titrust case in

Am

erican h

istory

an

d o

f seekin

g, h

and in

han

d w

ith th

e

PH

ILIP

GE

YE

LIN

is the editorial page ed

itor o

f The W

ashin

gto

n P

ost.

Cen

tral Intellig

ence A

gen

cy, to

.over-tu

rn th

e results o

f a Chilean

election

becau

se it did

not w

ish to

do b

usin

ess w

ith th

e candid

ate, Marx

ist Salv

ador

Allen

de, w

ho h

ad w

on it. T

he m

eans

whic

h w

ere

said

to h

ave b

een e

m-

plo

yed

in b

oth

cases massiv

e lobby-

ing a

t hig

h le

vels o

f govern

ment,

un

der-th

e-table o

ffering

s of co

ld d

ash

to in

fluen

ce go

vern

men

t officials in

W

ashin

gto

n, o

r to fo

men

t trou

ble in

C

hile) w

ere sufficien

tly q

uestio

nab

le, not to

say n

efarious, to

reduce alm

ost

any o

ther in

stitutio

n to

at least som

e sense of having overstepped the m

ark., so

me slig

ht sh

ow

of sen

sitivity

if not

of sh

ame. B

ut sh

ame an

d sen

sitivity

hav

e apparen

tly n

ever b

een an

y p

art

of th

e c

hara

cte

r of IT

T, w

hic

h is

qu

ite pro

bab

ly th

e mo

st rapacio

us,

amoral, acq

uisitiv

e, arrogan

t and u

n-

responsive (exCept to the m

arket value o

f its stock

) of all o

f the g

reat mu

lti-n

atio

nal c

orp

ora

tion

s wh

ich

hav

e

gow

n alm

ost ex

plo

sively

in recen

t y

ears and

gen

erated fo

rces so p

ow

er-fu

l in th

e com

mercial an

d p

olitical af-

fairs of n

ation

s that th

ey are b

eyo

nd

th

e effective co

ntro

l of an

y . sin

gle

sovereig

n state.

- - A

singular co

ntrib

eton=

of S

amp-

son's book is the perspective it puts on IT

T b

y tracin

g its early

gro

wth

from

an in

tern

atio

nal (w

hic

h is to

say,

largely

foreig

n) telep

hoae co

mpan

y

into an in

dustrial m

onstro

sity. E

ven

• '

after the d

ivestitu

res agreed

to o

ut o

f co

urt in

the H

artford

case, ITT

today

possesses a m

ind-boggling assortment

of su

bsid

iarie

s or su

b-su

bsid

iar-

ies, nu

mb

ered in

the h

un

dred

s and

bound to

geth

er by n

oth

ing o

ther th

an

pro

fitability

, a com

mo

n m

anag

emen

t an

d a u

niq

ue, m

ysterio

us b

ut so

me-

ho

w effectiv

e system

of acco

un

ting

w

hich

is Gen

een's p

articular g

eniu

s. If S

ampso

n's h

istory

of IT

T w

ere no

more th

an th

al:, it would

be a m

odel

of its k

ind; it is rich

in co

lor an

d d

e- ...tail, an

d rem

arkab

ly free o

f technical

jargon:- In

short, It is an

imm

ensely

read

able p

rofile o

f a corp

oratio

n an

d

how

it grew

and ch

anged

radically

in

structu

re and strateg

y w

ithout ch

ang-

ing

its fun

dam

ental ch

aracter. Sam

p-

son's acco

unt b

egin

s with

the early

days in the 1920s and w

ith ITT

's enig-m

atic, flamboyan

t, imag

inativ

e and

seemin

gly

un

prin

cipled

creator, S

os-

thenes Behn. w

ho set out at the start, to estab

lish ab

road

an in

ternatio

nal tele-

phone . n

etwork

com

parab

le to th

e sy

stem

op

era

ted

in A

meric

a b

y -

AT

&T

. He d

id, n

ot q

uite su

cceed, as

any A

merican

tourist o

verseas can

testify

, but n

either d

id h

e stop w

ith

tele

phones. S

om

e m

easu

re o

f the

cou

rse he p

ursu

ed an

d th

e end

urin

g

character he gave to the company can

be seen in the example of his business

connectio

ns b

efore an

d d

urin

g W

orld

W

ar II with

Hitler's G

erman

y, an

ti w

ith p

ro-N

azi govern

men

ts in L

atin

Am

erica, even while he w

as supplying w

ar m

ate

rial to

the A

llies fro

m

a fab

tory

in N

ew Jersey

. "Thus," w

rites S

ampso

n, "w

hile IT

T F

ock

e-Wulf

Planes w

ere bombing A

llied ships, and IT

T lin

es were p

assing. in

form

ation

to G

erMan

subm

arines, IT

T d

irection

find

ers were sav

ing

oth

er ship

s from

torpedoes." (C

ontinued nt page 10) •

The Sovereign State of, ITT (Continued from page 1)

Corporate profiles, of course, are not everybody's bedside reading, even when done with the light, sure-touch of, say, The Wall Street Journal or For-tune magazine. But while this one may disappoint the cognoscenti for its lack of technical analysis, it will intrigue and enlighten those general readers whose concern with ITT grows out of a slowly dawning awareness that there may be something

Inimical and quite probably injurious to the public interest in the developing interplay between mon-umentally big and unresponsive multinational busi-ness and increasingly irresponsible and unresponsive government.

I am not talking now solely of inside deals and Influence-peddling in high, places, although that is a large part of it. Sampson does not add a great deal to what was already known about the antitrust case—the offer to underwrite the Republican Con-vention in San Diego and the parallel campaign of intense pressure that eventually resulted in the government's abandoning its professed intention to take the ITT case to the Supreme Court, and agree-ing to settle ft out of court on terms more favorable than ITT's own counsel believed could have been obtained by further litigation. Nor does he quite get to the bottom of ITT's scheme to collaborate with the CIA in an effort to rearrange the internal politics of Chile. But he does a nice job of pulling the available facts together and placing them all in the context not only of rrra past history but of its general approach to government—contemp-tuous, whether it be ours or a foreign country's.

Sampson wisely does not stretch his material beyond what is demonstrable and pertinent to ITT. He is careful to note that ITT may not be typical, in that its arrogance and its excesses are not shared by all of the great industrial formations which go by the name of multinationals and/or conglomerates. His point is that ITT dramatically demonstrates the sort of problems we are in for if some device cannot be found to bring under more effective control those international industrial amalgamations which now operate across national frontiers with relative impunity. Sampson freely admits he has no

sure solution, although he suspects that tighter national regulations offer a quicker answer than some new form of multinational control. But his definition of the problem is in itself a considerable contribution to our understanding of current affairs. For in the course of reciting the-recent history of ITT, Sampson describes and delineates a corporate cast of mind—an attitude toward government and the public—which is not all that different from the attitudes of the men who gave us the Ellsberg burglary, 'the plumbers" and the "enemies list." I do not make the Watergate connection. lightly; these days it can be too easily made. But it is not entirely by coincidence, I think, that the scandal growing out of the Nixon administration's handling of the ITT antitrust case should now be considered in the eyes of the Ervin Committee and of Special Prosecutor Archibald Cox as an integral part of what has come to be called "Watergate." Although Sampson's history of ITT ends before the Water-gate had really exploded on the scene, already some of the Watergate celebrities--John Mitchell, Charles Colson, John Dean III, John Ehrlichman—had been identified as participants in one way or another in the settlement of the ITT antitrust case. Before we are through with Watergate, there is good reason to believe that G. Gordon Liddy, E. Howard Hunt and who knows what other members of the Water-gate conspiracy will have been implicated in that part of it which had to do with TIT.

But there is a larger, less precise Watergate con-nection with ITT which has to do with bigness, arrogance and abuse of power, whether by govern-ment or by industry; with a state of mind that routinely deals the people out of decisions that vitally affect their lives. It has to do with secrecy and with shredders, and with a cynicism which puts results—or profits—ahead of compassion or social welfare or the plight of powerless minorities. It has also to do With conformity and with 16-hour working days—the life of ITT executivef under Geneen is remarkably similar to that of a White House staff under orders last fall from Charles Colson to devote every waking hour and every ounce of energy to nothing other than the re-elec-tion of the President. Out of it there do come results—whether in ITT's earnings or in Nixon's re-election. But out of this ferocious pursuit of nar- row aims there can also come an easy acceptance of amorality in high places and an unprincipled mis- placement of values—whether in the making of presidents or of profits. And also out of it comes corruption of judicial as well as other governmental processes.

But this is to wander unfairly off the point of

Sampson's book, which to his credit does not moral-ize or offer easy answers: "any honest discussion of the effects of the multinational corporations must end, I believe, on a note of bewilderment," he concedes. If this leaves you with no solutions but quite a lot to think about, that is the strength of The Sovereign State of ITT—that and the quality it has of a first-rate portrait, not of something as bloodless as a corporation, but of a complex'and fascinating fictional figure out of, let us say, Mel-ville.

The analogy Is not mine. Sampson says of his own experience as he worked his way through the life and times of ITT, that he was persuaded at the start by a "Geneen-watcher" that the great man was really Captain Ahab. "I could see what he meant—the monomaniacal obsession, the magnetic ascend-ancy he cast over his crew in the hunt for the whale," Sampson writes. "But as I 'continued my own travels, I came to think that Geneen and his corporation resembled not so much the crew of the Pequod as the white whale itself; a leviathan secretly circling the world, usually detectable only by the turbulence of the water, but suddenly show-ing one side of its huge strange shape, or spouting dark water, first in one corner of the globe, then a few days later at the 'opposite end—becoming it legend for ubiquity, immortality, and supernatural strength."

BOOK WORLD/JULY 15, 1973

V

- e--e- 7 - r S "73

BLOCKBUSTER COMING

For more than a year now, Anthony

Sampson, author of the highly-praised "Anatomy of Britain," has been quietly but industriously research-ing the operations of the International Telephone & Telegraph Company in Amer-ica and Europe. The result. of his re-

search will appear July 30

ernment into dropping its ' antitrust suit against the giant conglomerate.

Typical of the evidence Sampson has dredged up is a letter from ITT's public relations ace, Ned Gerrity, to Agnew. Dated Aug. 7, 1970, it attempts.to enlist Agnew to influence indi-rectly Richard McLaren, then head of the Justice Department's Antitrust Division. At one point

in a work to be entitled McLaren felt strongly that "The Sovereign StateofITT." ITT, the 11th largest cor- Several chapters of the poration in the world,

-book are devoted to how ITT should not be allowed to used its influence with the acquire the Hartford Fire Nixon Administration-- particularly with John Mitchell, John Ehrlichman, John Dean, John Connally, Maurice Stans and Spiro Agnew--to pressure the gov-

Insurance Company. But eventually he came around. He is now a federal judge. Herewith, a copy of the

letter from Gerrity to Agnew.

August 7, 1970 The Honorable Spiro T. Agnew

Ted:

I deeply appreciate yciur assistance concerning the attached memo. Our problem is to get to John the facts concerning Mel..aren's attitude because. as my memo indicates. McLaren seems to be running all by himself.

I think it is rather strange that he is more res-ponsive to Phil Hart and .71.ann7 Celle: than to the policy of the Administration.

After you read this, I would appreciate your reaction on how we should proceed.

Ai;