Page 2


been now, if the ’69 act had been effect. Probably wouldn’t have made those loans to the employees of Fulbright Crooker, either. Or those loans to the employees of the Bank of the Southwest. It was to give the employees an opportunity to buy stock in the bank. A loan made up to a certain percentage of the stock deposited on the loans. Of course the bank couldn’t lend the employees money to buy stock in the bank, so it was handled through First City National. Probably couldn’t do that now. According to a lawyer familiar with foundation trust law, the Anderson Foundation could not, indeed, make those loans in light of the ’69 reform act. The insider provisions of that law reach even unto cousins of board members, and may include law partners, depending on whether or not the firm is incorporated or stands legally as a simple partnership. What astounded this lawyer was the news that the Anderson Foundation loan to Jacobsen had not been listed before 1970. Full of holes as the law was before the ’69 reform, this lawyer says there is NO WAY a foundation could have failed to report an $850,000 loan, it doesn’t matter if it was the Rockefeller Foundation, no one has that kind of money to loan without reporting it. The lawyer suggested that pre-1969 such a loan might have been disguised. We, without a professional CPA, were unable to find any sum of $850,000 on the Foundation’s pre-1970 tax returns. Freeman says the Foundations’s returns have been regularly audited by the I.R.S. and are open to inspection by any trained bookkeeper. The second part of this story is sweet and simple. IN LATE August or early September, 1965, Jaworski was the chairman of a Houston citizens group, backed by Mayor Louie Welch and the Houston Establishment, which was applying for a grant from the O.E.O. Jaworski was then head of the Houston Bar Association, which had unsuccessfully tried to get Legal Services funding, but had been refused because it was constitutionally segregated. At that time, another group of citizens, not the blue-ribbon, prestige bunch led by Jaworski, had the inside track on O.E.O. money going into Houston because the group had qualified for funding under a pre-O.E.O. program called the Juvenile Delinquency and Youth Crime Act. The relation of the Houston Establishment to O.E.O. was not precisely healthy. Sargent Shriver recalls a huge flap over the fact that O.E.O. was accused of using its money for gun sights, which black militants were allegedly going to mount on their guns which they would then use to shoot policemen with. According to Don Mathis, who was then in charge of community action programs for the southwest regional office of O.E.O. \(he is 4 The Texas Observer now vice-president of the Pratt Institute in application for community action money did not stem from noble motives. The Establishment wanted control of the program and particularly wanted to get it away from the group with Youth Crime Act funding. Jaworski’s group drew up on application for a $2 million planning grant and Jaworski signed it. “It contained numerous illegalities,” said Mathis. “Included in the Jaworski application was a clause that would have given a $100,000 grant to the husbands of two of the members of the Jaworski group’s proposed board. Also illegal. The minority representation on that board was phony. Their so-called chicano was a rich Spaniard who owned a chain of grocery stores. For their other minority representative they had a token member of that well-known oppressed Texas group, the Arabs. There was no way we could honor that application. “I flew down to see Jaworski. I was as polite as possible I knew he had connections. I told him I was sure he just hadn’t been properly briefed, that in light of his position with the bar association I was sure he would not want his name on an illegal application, that if they would just withdraw it we would send some staff people down to help them get their application into the proper shape. He got angry. He threatened to call the White House and have me fired. He asked me, `If you get a call from the White House directing you to sign this application, will you sign it?’ I told him no, I couldn’t sign it, it was illegal. When I left it was unclear whether or not he would withdraw the application.” The next day, something hit the fan. Welch held a press conference denouncing the feds in general and Mathis in particular, John Connally issued a statement along the same lines and Bill Hobby’s paper printed an editorial also attacking the nit-picking federal bureaucrats in O.E.O. “After three days of this orchestrated furor,” said Mathis, “Jaworski called Johnson. Jaworski told him this snot-nose kid from O.E.O. was giving him a hard time. Johnson told Jaworksi he should get with the program, that O.E.O. had a law to enforce. A violent argument ensued. Jaworski said that he was not going to be crossed by some little cockamamie bureaucrat. He said Welch and Connally and Hobby were all mad at me. It was a straight-out power play and Johnson didn’t like to be crowded. He had been about to name Jaworski attorney general, but after that argument, Jaworski was out.” Everything about Mathis’ story except the phone conversation between Johnson and Jaworksi can be verified. Mathis did not give his source on what was said during the conversation. It also seems likely, from talking to some of Johnson’s staff members who were in the White House then, that Jaworski was one of about five people Johnson was considering naming attorney general. According to Bill Moyers, Jaworski was among those Johnson liked to review as possibles, running over the list of assets and liabilities attached to naming each man. Moyers recalls that around September of 1965, Johnson suddenly dropped Jaworski’s name from the roster of those he was considering. Moyers did not know the reason. Bill Crook of San Marcos, who was then regional director and Mathis’ boss, did not want to be quoted on the incident, said he did remember it but not clearly enough to say anything about it. He also said that Jaworski had on other occasions been helpful to the poverty program. Mathis said, “That application was illegal and Jaworski knew it and he tried to power play it through anyway.” Before Mr. Jaworski went to Washington to get everything all ship-shape up there, he hada misadventure with, of all things, campaign contributions. Jaworski served as campaign manager for the Community Improvement Committee’s unsuccessful efforts to get a mass transit bond issue past Houston voters \(see Obs., spent $107,162 trying to influence the outcome of the bond election and as of the C.I.C.’s final report, $50,054 of that money was illegally reported under the new state law on disclosing campaign contributions. The money is listed as having been ‘contributed by the C.I.C.’s permanent fund: it is not itemized by contributor and amount, as the law requires. The C.I.C. is a community improvement organization to which rich Houstonians and/or their companies regularly contribute. According to a survey made by Common Cause, 22 percent of C.I.C. contributors are contractors and another 20 percent are construction equipment companies. The C.I.C. has successfully promoted $280,000,000 worth of construction projects already this year. For a time, Jaworski, who filed the C.I.C.’s reports with the County Election Commission, was apparently trying to comply with the new law. The interim reports were filed on time and began “Pursuant to H.B. 4 . . . ” A citizen named C. Leon Pickett filed a complaint about the Sept. 24 report, on which $18,115 was listed as, “advanced by the C.I.C. permanent fund.” The election commission notified Jaworski of Pickett’s complaint on Oct. 1. Jaworski sent them a snippy letter announcing that he would not itemize contributions because the C.I.C. is “an arm of our city government and therefore not under your jurisdiction.” Jaworski closed by saying that if any further information were forthcoming, “it will be by reason of our voluntary desire and not because of any action on your part, which we view as unauthorized by law.” The next day Attorney General John Hill declared that the county election commissions established by the new law were