Official and Confidential (31 page)

Despite dire warnings to FBI recruits never to speculate on the stock market, Edgar and Clyde grew rich thanks to investment tips – and a special ‘no lose' arrangement provided by their Texas friends. Edgar invested in oil and insurance companies and railroads, areas in which Murchison and Richardson specialized. Some holdings, in Gulf Life, the Chesapeake & Ohio Railway and Texas Oil and Gas, coincided directly with the millionaires' own interests.

Edgar and Clyde always invested the same amounts in the same oil concerns. As late as 1973, after Edgar, Murchison and Richardson had died, Clyde was making $4,000 a month from one oil investment alone. ‘People who were in the oil business,' said former FBI Assistant Director John Mohr, ‘would call him on the phone and tell him, “We've got a good one going here; do you want to get in on it, Clyde?”'

When he died in 1975, Clyde would leave $725,000, almost $2,800,000 at today's rates. Edgar's published estate, most of which went to Clyde, included $122,000 in oil, gas and mineral leases. Unless he lost a great deal in the years before his death, the real fortune may have been far greater. The following episode reveals that Edgar and Clyde invested huge sums, twice as much as the whole of Edgar's declared estate, in just one Texas oil project.

In 1961, while sorting out his late father's affairs, the Massachusetts businessman Peter Sprague came across
correspondence showing that Edgar and Clyde were major investors in Santiago Oil and Gas, a Texas oil drilling company. The former president of Santiago, Leland Redline, confirms it, and documents show Edgar continued to invest in Texas oil. ‘I know we made them a profit,' said Redline, ‘but the amounts varied from year to year. Their profits were no business of mine.'

As Sprague recalls it, documents showed Edgar and Clyde put huge sums into Santiago Oil – more than a million dollars in today's figures. ‘The question struck me,' he said, ‘where did they get all that money? Certainly not from saving their FBI salaries …' Sprague passed the records to New York District Attorney Robert Morgenthau.

‘Basically,' Morgenthau said in 1988, ‘these were wires sent to Hoover telling him of his drilling ventures. What caught my eye was these were federal leases – and Hoover was an official of the federal government. Had he helped his principal to get those leases? Was the investment income in effect a finder's fee? This could have been what they call in the trade a “carried” interest, a reward for bringing the lease or oil prospect to the principal's attention. That would have been improper for someone in a federal agency, like Hoover.'

Some information on the links between Edgar's oil ventures and Clint Murchison, evidence that could have destroyed him, reached federal officials over the years. Telltale business records were sent to the desk of William Hundley, head of the Organized Crime Section at the Justice Department during the Kennedy administration. ‘There wasn't enough to make a criminal case,' Hundley recalled. ‘But it was wrong. He shouldn't have done it.'

John Dowd, who headed a Justice Department probe into FBI corruption after Edgar's death, was appalled by what he learned of the oil investments. ‘Hoover did have oil ventures with Clint Murchison,' Dowd confirmed in 1988. ‘If the drilling company hit a dry hole he'd get his money back. Everything was a sure thing. It had to be a sure thing. If not,
he'd get his money back, be it stocks, bonds or oil ventures. It was extraordinary.'

According to William Sullivan, Edgar ‘had a deal with Murchison where he invested in oil wells and if they hit oil, he got his share of the profits, but if they didn't hit oil, he didn't share in the costs … One time, he got into serious trouble on his income tax manipulations, and we had to send an accountant from New York to Houston, Texas, where apparently the operations existed. He told me afterwards, “Good God Almighty. If the truth were known, Hoover would be in serious trouble …''' Apparently he did straighten it out. But he did say that Hoover had done something that was a serious violation of the law.'

The Bureau's Chief Clerk, Albert Gunsser, looked after tax matters for Edgar and Clyde in later years – and a grateful Clyde was to leave Gunsser $27,000 in his will.

In the late summer of 1953, as Edgar was enjoying Murchison's hospitality at the Del Charro for the first time, Joe McCarthy turned up unexpectedly at the hotel. Edgar told reporters it was just a coincidence, but the evidence suggests it was a crisis meeting between protégé and patron.

The start of the Eisenhower presidency, the previous year, had given the Senator the chairmanship of the Sub-committee on Investigations, his opportunity to hold the repellent hearings for which he would become infamous. And his Chief Counsel during that season of political terror was one of Edgar's most favored acolytes, Roy Cohn.

The gifted son of a New York Supreme Court judge, Cohn had a good deal in common with Edgar. He was already identified with the far Right when he arrived in Washington, at the age of twenty-five, and – although he denied it until his death from AIDS in 1986 – he was homosexual. Like Edgar, he made a point of attacking fellow homosexuals and campaigners for homosexual rights.

Cohn obtained a job at the Justice Department thanks to
George ‘Sok' Sokolsky, a columnist close to Edgar who checked in with the FBI each day for advice on what to write. He was also close to Walter Winchell and got his first audience with Edgar within minutes of requesting it. Edgar urged him to defy his superiors, press ahead with a planned prosecution of alleged American Communists at the United Nations and keep in touch. ‘It was obvious,' Cohn recalled, ‘that I was trusted.'

It was Edgar who recommended Cohn to Joe McCarthy, and Edgar attended the celebrations when the Senator appointed him Chief Counsel. McCarthy and his mentor were becoming closer by the month, as Cohn discovered when he attended a series of private dinners at the apartment of the Senator's fiancée, Jean Kerr.

Edgar would arrive accompanied by Clyde, always on time, always fastidiously dressed. Unlike McCarthy, he could never be persuaded to take off his jacket, until the night the Senator jokingly asked whether he had a tape recorder in his pocket. Edgar relented and ate dinner in his shirtsleeves.

Cohn brought an unpaid ‘chief consultant' to the subcommittee, and Edgar was linked to him, too. This was David Schine, a handsome, blond twenty-six-year-old Harvard graduate who was Cohn's constant companion – and the target of gossip that they were lovers. His hotelier father, Myer, regularly played host to Edgar and Clyde on their Christmas visits to Miami Beach.

Edgar was not deterred by the darker side of Myer Schine, who admitted to the Kefauver Committee that he had a deal with the mob for gambling operations at his hotels. He and Clyde accepted Schine's hospitality at the Gulfstream, an exclusive set of beach apartments in Miami Beach, and at the Ambassador Hotel in Los Angeles. Schine, like Murchison at La Jolla, paid the bills.

McCarthy turned up in La Jolla in 1953 as his popularity was waning. All manner of powerful people, including the President and many right-wingers, felt that enough was
enough. The Senator arrived at the Del Charro in a state of disarray. He got drunk, abused hotel employees and threw his fiancée into the pool with her clothes on.

Edgar picked that moment, when other public figures were distancing themselves from McCarthy, to speak out warmly about him. ‘I view him as a friend,' he told a local reporter. ‘Certainly he is a controversial man. He is earnest and he is honest. He has enemies. Whenever you attack Communists, Fascists, even the Ku Klux Klan, you are going to be the victim of the most extremely vicious criticism … When certain elements cease their attacks on me, I'll know I'm slipping. McCarthy is an ex-Marine. He was an amateur boxer. He's Irish. Combine those and you're going to have a vigorous individual who is not going to be pushed around.'

McCarthy had begun his slide largely thanks to the arrogance of the man Edgar had sent to help him. The following summer, millions watched televised hearings revealing that, during a hunt for Communists in the military, Roy Cohn had abused congressional privilege by trying to prevent his pal Schine from being drafted. When that failed, he tried to pressure the Army to grant Schine special privileges. Cohn was forced to resign in July 1954, and McCarthy's own ruin seemed inevitable.

He responded, once again, by running to join Edgar and Clint Murchison at La Jolla. Cohn, who came with him, was turned away at the door because he was a Jew. Murchison had a ‘No Jews' policy at the Del Charro. No blacks were admitted, either, except servants. In between drinking bouts, McCarthy played shuffleboard with Edgar or sat talking, one arm draped around the Director's shoulders.

If McCarthy was hoping for public support from Edgar, he was to be disappointed. Edgar had been playing a double game all along, emphasizing his role as nonpartisan FBI Director in public while giving the Senator virtually unlimited support in secret.

Meanwhile, knowing that Eisenhower detested McCarthy,
Edgar told the President that the Senator's activity was now impeding the hunt for Communists. In the Senate, he let it be known that, while he valued McCarthy's work, he was critical of his methods. All along, he maintained the fiction that no FBI documents were being supplied to the McCarthy team.
³

McCarthy kept in touch with the FBI long after the Senate set the seal on his disgrace with a formal notion of censure. Even in his last days, when he was in the terminal stages of alcoholism, he was proposing Edgar as the right man to succeed Eisenhower as President. In 1957, when McCarthy died of cirrhosis of the liver, Edgar, Roy Cohn and Richard Nixon were among the vast crowd at the funeral.

Some who knew him said McCarthy never really believed in his own anti-Communist rhetoric, that he was just a cynical opportunist. And astonishingly, given that he made it his lifetime crusade, Edgar's zeal may have been just as hollow by the fifties. ‘Of course he wasn't sincere,' said William Sullivan. ‘He knew the Party didn't amount to a damn …'

By 1956, in part thanks to unrelenting FBI pressure, membership of the American Communist Party had slipped from its 1944 peak of around 80,000 to a mere 20,000. The figure would continue to plummet, to 8,500 in 1962 and 2,800 by 1971. Edgar would obscure this decline by ceasing to publicize membership figures, and responding to inquiries by saying the figures were secret.

To the extent it did survive, the Party was crippled by the penetration activities of innumerable FBI informants. ‘If it were not for me,' Edgar was to tell Abba Schwartz, Assistant Secretary in charge of security at the State Department in 1963, ‘there would not even be a Communist Party of the United States. Because I've financed the Communist Party, in order to know what they are doing.'

‘How do you think I'm going to get my Appropriations out
of Congress if you keep downplaying the CP?' Edgar would exclaim angrily to William Sullivan toward the end of his life. Sullivan, who specialized in monitoring the Party's activities, later declared publicly that the Communist ‘threat' had long been ‘a lie perpetuated on the American public.'

All this indicates that, by the end of the McCarthy era at any rate, not even Edgar himself was sincere about the anti-Communist effort known at the FBI as The Cause. Above and beyond everything, however, Edgar believed in Edgar. Those in Congress who marched to his tune, like McCarthy, he used. Those who did not, he found ways to crush.

From the early fifties on, in the words of Senator Estes Kefauver, Edgar's hold on Congress gave him ‘more power than the President.'

19

‘J. Edgar Hoover was like a sewer that collected dirt. I now believe he was the worst public servant in our history.'

Former Acting Attorney General Laurence Silberman, the first person to peruse Hoover's secret files after his death

E
dgar denied time and again that he kept files on the personal lives of politicians and public figures. ‘The supposed secret dossiers,' he said, ‘do not exist.' The politicians, however, did not believe him. In 1958, a group of senior U.S. senators held a special meeting to discuss what to do if Edgar should suddenly die. If that happened, they decided, a delegation would rush to FBI headquarters and demand to see the files.

The bottom line was fear, and in some unlikely quarters. Senator Karl Mundt, a Republican of the far Right and a staunch supporter of the Un-American Activities Committee, was ostensibly one of Edgar's vocal supporters. One night in 1960, however, Mundt poured out his true feelings to his aide Henry Eakins.

‘Hoover,' he said, ‘is the most dangerous man in the United States. He has misused his office. There are things I know that Hoover has done to congressmen and senators, things that should never have happened. He has things on them.' Later, worried about having spoken so openly, he implored Eakins not to repeat what he had said while Edgar remained in office.

Thanks to a Senate investigation in 1975, we now know that the FBI also kept files containing ‘information of a personal nature' on the following famous members of Congress: Carl Albert, Hale Boggs, Edward Kennedy, George
McGovern, Mike Mansfield, Wilbur Mills, Abraham Ribicoff, Adlai Stevenson and Lowell Weicker. While Edgar was alive, senators and congressmen could only guess at the nature of such files. Then, a few months after his death, an FBI agent in Ohio was caught investigating a Democratic election candidate. For more than twenty years, it was revealed, the Crime Records Division had run a ‘Congressional Relations Service' – supposedly with the purpose of gathering public-record information on politicians for ‘internal use.'

FBI officials well knew that the very existence of such an operation was potentially explosive. ‘These matters,' warned an instruction to field divisions during a primary campaign, ‘should be handled with
extreme
discretion to avoid the implication that we are checking on candidates.'