Friends in High Places: The Bechtel Story : The Most Secret Corporation and How It Engineered the Wo Laton Mccartney (surface ebook reader .TXT) 📖

W ith Connally out, and George Bush showing signs of sputtering, it appeared increasingly likely that the nomination would go to Reagan.

Since the onetime actor’s election as governor of California, he and members of the Bechtel family had enjoyed warm personal relations.

Steve and his brother Ken had contributed heavily to Reagan’s first gubernatorial campaign, and applauded his tough stand against student demonstrations at Berkeley, where both Bechtels had gone to school.

Candidate Reagan’s stock soared even higher with the Bechtels after he promised to name a committee headed by former CIA director and onetime Bechtel partner John McCone to “investigate the charges of 214

COMPANY TROUBLES

Communism and blatant sexual behavior on the Berkeley campus,”

which, according to Reagan, was the site of “sexual orgies so vile I cannot describe them to you.”

As governor Reagan proved most helpful to the Bechtels’ corporate interests, particularly in the area of nuclear power. Prior to Reagan’s election, nuclear-plant construction in California had been moving relatively slowly, largely because of the failure of the state Public Utilities Commission to raise electric rates significantly. That all began to change when, after intense lobbying by Bechtel and the state’s two largest utilities, PG&E and Southern California Edison, Reagan appointed board members to the PUC who hiked rates by a total of more than $2 billion per year. Flush with the proceeds of this windfall, PG&E and Southern California Edison hired Bechtel to build several major nuclear plants.

In 1974, Reagan assisted Bechtel again, this time by extending a state-tax surcharge for an additional two years. The revenue gained-a total of $82.2 million-went entirely to the support of the financially beleaguered Bay Area Rapid Transit system (BART), which Bechtel was building. The financing allowed BART to remain afloat until Bechtel and the project’s other sponsors could find additional federal funding.

Despite its long-standing ties with Reagan, however, Bechtel was still lukewarm about the Californian’s candidacy, largely because of his

“supply-side” economic views. As Bechtel lobbyist Charls Walker, who had served as Connally’s chief economic advisor, put it: ” (Reagan’s) plan was based on the premise that there was such a thing as a free lunch. You could have welfare and tax cuts. “19

The situation began to change after the appointment of W illiam Casey as Reagan’s campaign manager, following the New Hampshire primary. A self-made millionaire Wall Street lawyer, Casey had become a good friend of George Shultz’ while chairman of the Securities and Exchange Commission under Nixon and, later, as head of the ExportImport Bank under Ford. Worried by the continuing opposition to Reagan’s economic proposals, Casey asked Shultz to meet with the candidate and hear his views. Shultz agreed and flew to Los Angeles in mid-March.

The meeting did not go well. Reagan, Shultz later told a friend, seemed confused about the economic proposals he was espousing, and in setting out their details, was vague in the extreme. All in all, said Shultz, “Things were in a worse mess than I thought. “20 The one glim-2 1 5

FRIENDS IN HIGH PLACES

mer of hope was that Reagan appeared open to new ideas. Given a prod in the right direction, Shultz told Casey, Reagan might y et be salvageable. For the moment, though, Shultz added, Reagan left him with “deep concern.”

Casey was concerned as well, and two weeks later he asked Shultz to head a new coordinating committee to advise Reagan on economic matters. Shultz accepted, as, in short order, did economist Alan Greenspan and Citibank chairman Walter