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FRIENDS

IN

HIGH PLACES—

THE BECHTEL STORY:

THE MOST SECRET CORPORATION

A ND HOW IT

ENGINEERED THE WORLD

LATON McCARTNEY

SIMON AND SCHUSTER

NEW YORK LONDON TORONTO

SYDNEY TOKYO

Copyright © 1988 by Laton McCartney

All rights reserved

including the right of reproduction

in whole or in part in any form

Published by Simon and Schuster

A Division of Simon & Schuster Inc.

Simon & Schuster Building

Rockefeller Center

1230 Avenue of the Americas

New York, New York 10020

SIMON AND ScHUSTER and colophon are registered trademarks of Simon & Schuster Inc.

Designed by M.B. Kilkelly/Levavi & Levavi Manufactured in the United States of America

10 9 8 7 6 5 4 3 2 1

Library of Congress Cataloging in Publication Data McCartney, Laton.

Friends in high places I Laton McCartney.

p.

em.

Bibliography: p.

Includes index.

1. Bechtel Group. 2. Bechtel, Stephen Davison, 1925-3. Engineers-United States-Biography. 4. Businessmen-United States-Biography. I. Title.

TA217.B4M38 1988

338.8‘87-dc l 9

87-34562

[B)

CIP

ISBN 0-671-47415-4

ACKNOWLEDGMENTS

Joni Evans, former president of Simon & Schuster, was the sponsor of this work. I cannot thank her enough for her unflagging graciousness, support and enthusiasm. John Ware, my agent and friend, also played a vital role in my undertaking and completing this project. To him also very special thanks are due. Others who provided invaluable assistance include Robert Sam Anson for support, editing and toughness that aided at every step; Van Metaxas for his diligent research, resourcefulness and good judgment; Nancy J. Balz for her research and support; Bill Berkowitz and his colleagues at the Data Center in Oakland, California, who always came through when needed; Mark Dowie for his generosity and encouragement; Tim Sharrock for his valuable assist; Marjorie Williams for her insights and suggestions; Paul Cane, Tom Flynn and Al Donner for having the courage to grant an outsider access and Mel Shestach, Larry Eno and Jerome Bakst.

Others at Simon & Schuster who deserve thanks are David Shipley and Henry Ferris.

Alice Mayhew, my editor at Simon and Schuster, worked diligently and offered her support and enthusiasm. Without her this project would never have been completed.

To Nancy

CONTENTS

1. The Grove

11

2. Dad

18

3. Boulder

29

4. Steve

43

5. The War Years

56

6. In His Own Image

71

7. Saudi Arabia

81

8. Lucky Man

94

9. Atoms for Peace

101

10. The Company and The Company

113

11. The Succession

126

12. Taking Command

135

13. Libya

143

14. A Friend in the W hite House

152

15. Secretary Shultz

165

16. Cap’s Period of Adjustment

174

17. The Arab Boycott

183

18. Nuclear Eclipse

197

19. Company Troubles

208

20. Powerhouse

219

21. The Next Generation

229

Notes

240

Index

258

CHAPTER

l

THE GROVE

0 n the last weekend in July in the year 1982, a chauffeur-driven Cadillac arrived in the exclusive Nob Hill section of San Francisco to pick up a solitary passenger. His name was Stephen Davison Bechtel, Jr., and to the few who may have seen him that sunny morning as he emerged from his luxury condominium across from Grace Cathedral and briskly walked the few paces to his waiting car, there was nothing to suggest he was anything but another businessman on the way to a weekend outing. Certainly, there was nothing to indicate that this casually dressed lean, balding figure in his late 50s, so unremarkable in appearance, was the leader of one of the richest, most powerful companies in the world.

Which, as it happened, was how Stephen D. Bechtel, Jr., preferred it. The chairman of the Bechtel Group had a passion for anonymity, and he went to extraordinary lengths to preserve it. The details of his personal life were a carefully guarded secret. His condo and

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