Lyndon Johnson’s Criminal Financial Activities – 1937 to 1963
It is a generally understood – if not well-known on a detailed level – part of LBJ’s “other legacy”: That through his highly skilled manipulative abilities, he had become the inventor of dozens of under-the-table frauds against the federal government (i.e. taxpayers). Most of them were so well-hidden that they were never exposed and adjudicated. But two of them made extensive national front-page news stories, ripe with insinuations of Lyndon Johnson’s clear and obvious involvement – but none of that was ever proven in a court of law. A dilemma that most “historians” thus avoid, like the plague.
This essay combines cited material from two of my books (LBJ: The Mastermind of the JFK Assassination, and LBJ: From Mastermind to The Colossus), with the addition of the story contributed by George C. Taylor of Houston, named for a signer of the Declaration of Independence whose contribution, as author Charles Beard, (An Economic Interpretation of the American Revolution) explained, could be traced back to the money trail left by all of the signers. For the 18th Century George C. Taylor, it was his gunpowder contract. The present-day George C. Taylor may one day finish his own compendium of insightful observations, much of it based upon the wit and wisdom of Will Rogers.
Lyndon Johnson’s most important fund-raisers during the 1940s-1950s were Tommy Corcoran, George and Herman Brown, Ed Clark and John Connally—the latter, who gathered unreported cash from Sid Richardson and H. L. Hunt, to keep their names at arms-length. Clark, the Austin attorney who “owned” segments of the Texas judicial system, also funneled money from Clint Murchison, among others, for the same purpose. Johnson received payoffs not only from numerous other oil men and industrialists, with promises to do their bidding in Washington, but also from Teamster leader Jimmy Hoffa, a long-term mutual enemy of Robert Kennedy.
For years, men came into Johnson’s office and handed him envelopes stuffed with cash. None of these funds was ever reported and handled properly as campaign funds. They were collected and disbursed “under the table” according to Lyndon Johnson’s direction in the same way that he would handle the tainted cash from his other partners-in-crime, Billie Sol Estes and Bobby Baker, whose scandals almost did blow up his political career, as we will examine below.
John Connally and Ed Clark spoke freely to Robert Caro about having taken envelopes stuffed with cash to Washington inside the breast pockets of their suit jackets; they stated that the amounts were much larger than that which Claude Wild Jr. eventually testified to the Senate McClelland committee—that “the commitment was that Gulf Oil would furnish $50,000 [annually] to Senator Johnson for his use.”
Yet Wild did not go to work for Gulf until 1959, and the payments had started many years before that. John Connally – implicitly under orders by his long-time mentor LBJ – stated, “I handled inordinate amounts of cash,” and Ed Clark said about the Gulf Oil payments, “I knew about that fifty thousand. I knew about two hundred thousand.” But that was only one company, and Clark was the cash courier for many other companies, including Brown & Root and the Humble Oil Company; he handled personal money transfers from many of the individual oilmen as well, even, on occasion, George R. Brown. Clark said all contributions were made in cash and given to Lyndon to disburse however he pleased, to himself, to his own campaigns, or to those of other favored senators – or to the ones not so favored if they merely sold their souls for some needed cash. Besides Connally and Clark, Jesse Kellam, and Tommy “the Cork” Corcoran all admitted to being involved in collecting cash campaign contributions in Johnson’s behalf as well as uncountable others who would never admit being involved in such crimes.
If Johnson decided that help needed to be extended to a particular senator, he would pass the word through his network, and shortly thereafter, the cash would be delivered to him. “All we knew was that Lyndon asked for it, and we gave it,’ Tommy (“The Cork”) Corcoran was to say.”
Before Lyndon Johnson went to Washington in 1937 to act as personal emissary and “rainmaker” to George and Herman Brown – while also “serving” his other constituents as a Congressman – their company Brown & Root was practically bankrupt and Herman lived with his wife in a tent.
“WE DIDN’T KNOW THE STERN FROM THE AFT—I MEAN BOW—OF THE BOAT”
~ George Brown, of Brown & Root Construction
After Lyndon went to Washington, thanks to his manipulative ability and his clever Austin attorney-friend Alvin Wirtz’s cut-throat contract-writing skills, government construction projects began to flow to the company. They started with dams and roadways but quickly expanded into practically every conceivable construction area, leading to their becoming one of the largest independent government contractors in the country. Practically every contract was guaranteed to be profitable, given that they were framed as “cost-plus,” and awarded as “no-bid,” without competitor’s, which removed all risk of losses due to a mistake in an estimate or quote – even, for that matter, losses due to graft and corruption, thanks to Johnson’s ability to keep government auditors at bay.
One example of Johnson’s exercise of this illegitimate power can be traced to Brown & Root having been given a contract in 1941 to build Navy subchasers and destroyers, eventually worth $357 million ($6.3 billion in 2020 dollars), despite having no experience whatsoever in shipbuilding. After landing the largest navy contract in history at that point in time, which expanded his construction business into a new specialty, George Brown observed, “We didn’t know the stern from the aft—I mean bow—of the boat.” It should come as no surprise that George and Herman Brown became Lyndon Johnson’s premier cash cow for the entire duration of his political life, through his attainment of the Presidency with their help and support.
As noted at the Spartacus Educational website, “In the 1950s Brown & Root constructed air and naval bases in Spain, France and Guam for the United States government. The company also built roads, dams, bridges, petrochemical plants and large offshore drilling platforms.”
HOW THE JOHNSON SPACE CENTER GOT BUILT IN RECLAIMED SWAMPLAND OUTSIDE HOUSTON TEXAS
In 1961, thanks to Lyndon Johnson’s control over the space program as Vice President, Brown & Root won the contract for the $200 million Spacecraft Center in Houston on what was then mostly worthless swampland that was given to the government by Humble Oil. Brown & Root’s capitalized value at that point was at an all-time high, so the Browns sold it the following year to Halliburton, Inc., which continued their successes, using many of the same practices. It soon expanded even more, becoming the largest beneficiary of the enormous building projects that began in 1964 to prepare Vietnam for the U.S. military’s takeover of their civil war. LBJ’s association with the Brown brothers had become the largest, most prized cash-cows he had ever created, netting him and his friends hundreds of millions in new wealth. And it was only one of many of his successes, all based upon his brazen use of “quid pro quo” sales of political influence and “insider knowledge” at a time when such illegalities were easier to hide, at least for those who knew all the tricks to do so.
A single example of how he exercised these skills will illustrate the point: Regarding the original $200 million contract to build the NASA site, before anyone else knew about that news, the nearly worthless swampland adjacent to the site suddenly became highly valuable. The two men who had the “insider knowledge” about that were Lyndon Johnson and Congressman Albert Thomas. A life-long Texan named George C. Taylor shared this interesting related story about how Johnson and Thomas capitalized on that knowledge:
My mother Evelyn Taylor was executive secretary at a real estate company on Mail St in Houston. It was American Mortgage and her boss was Jake Cayman. In early 1960 Congressman Albert Thomas spent the day with Jake Cayman and my mother brought them snacks and drinks. The next morning Jake Cayman told my mother he had a vision in his last night’s dreams.
All that swamp land in Clear Lake might have value. Get on the phone and buy Clear Lake. If it is for sale buy it. If it is not for sale tell them we are going to buy it. And she did.
As vice president, LBJ was in control of the space program [that was one of the several perquisites he had negotiated with JFK, and before that, as the Senate Majority Leader, he had ultimate control of the legislation creating that site
Article from LewRockwell