I.T.T.: Stronger than any state

The Sovereign State. The Secret History of ITT:

Anthony Sampson Hodder & Stroughton, 1973. 275pp. $6.80. Reviewed by Don Carson.

ITT is the stuff from which a drama could be written. All the elements are there; untold wealth and power to be pedalled and the fate of nations hanging in the balance. Anthony Sampson, the author of the excellent 'Anatomies' of Britain has now turned his attention to the people, the workings and history of ITT.

International Telephone and Telegraph ranks eleventh by sales in the multinational corporations that have developed in the western world this century. Most of them have concentrated on the United States but ITT is different. It began in Puerto Rico and never really found a home base, gaining its first major contract in Spain, spreading through Europe and only more recently concentrating in the United States. ITT is also a conglomerate which means that it deals in items as diverse as communications, hotels, insurance, housing, education, food, printing and car hire.

Sampson traces the development of ITT from its origins at the hands of the bucaneer entrepreneur Sosthenes Behn. Born in the Virgin Islands when it was a Dutch colony, Behn had a Danish father and French mother: suitably multinational. He utilised his communications systems not only to make profit but as an intelligence gathering network. Information gained from eavesdropping was used to anticipate and pressure governments from Spain to the Argentine. In Germany ITT collaborated with the Nazi leaders. Behn frequently met with Goering and Hitler even during the war years. Focke-Wulf, the aircraft manufacturers were 28% owned by ITT through a subsiduary. In 1967 ITT received $27 million in compensation from the US Government for damage to Focke-Wulf plants by Allied bombing.

Of course there were many who were suspicious of ITT, even in those early days. Antitrust legislation was passed in the United States in 1934 specifically directed against the expansionist, monopolist tendencies shown by ITT. The FBI also kept tabs on ITT and US government data on the company is incredibly extensive, gleaned from surveillance and Senate and Judicial hearings. It is this unique knowledge which has been extensively used by Sampson in his book.

After the war was over for Hitler, Behn rapidly rebuilt his shattered ITT empire in Germany, even as the fighting continued. He was awarded the medal of merit by the US for his technical contributions to the allies war effort. In the social and political upheaval that followed the war ITT played a manipulatory role. In Hungary some of its agents were caught and were executed by the government. Meanwhile ITT employed a combination of fraud and its old boy network to attempt to pressure the Canadian, British and US governments into an Atlantic cable scheme. Sampson comments on these adventures, "the operations in Budapest and London were of course of quite different kinds; but both suggest that the companies own diplomatic and intelligence services were more effective, and more ruthless, than those of the Western nations it dealt with."

Sosthenes Behn retired at a ripe old age and the hierarchy of ITT needed a replacement for this remarkable individual. From Raytheon came Harold Sidney Geneen.

Sampson is infatuated with the character of this man and thinks of him as some combination of Captain Ahab, a spider and a master accountant, often making Geneen indistinguishable from his company which apparently is in turn a combination of white whale and elephant. Behn was the creator of ITT; Geneen the builder who reads accounts as a hobby. He is the only man aware of how the vast organisation fits together and is maintained and he constantly manipulates both businessmen and politicians for ITT. Nader described him as being more interested in power than profit.

Profit however is the means of his power. At this level of activity profit becomes more of an abstract identity, takeovers are achieved by offers of ITT stock, termed "Chinese money" and the profit announcements to shareholders show a remarkably steady increase by turning assets into profit as needed. This process is called "Hot pants accounting". Accounting has become for ITT a branch of creative writing.

ITT is thus a secret outfit that reveals only what it wants to reveal. A vast army of public relations men lobby throughout the world to present ITT and ITT's interests in the best possible light. This means of course, one thing in one place and quite another somewhere else. In an anti-trust case ITT was a provider of capital to a company in local investigations but incredibly at the same time ITT personnel were saying in Washington that ITT needed the capital from this company to compete overseas.

Such duplicity does not survive within ITT. When Geneen took over he was horrified at the lack of reports or checking. Geneen's paramount demand is that he wants "no surprises", every economic trend in the world must be anticipated for ITT's super planning ethos. Planning, reports and Big Brother Geneen create amazing tensions. Sampson describes the look of ITT executives as "shellshocked", but because of the huge salaries few want out. Geneen, who is the highest paid executive in the US himself, has "got them by their limousines".

Only recently have much of the workings of ITT become public beginning with the Republican party convention scandal in 1972. Geneen promised underwriting money to the GOP for their San Diego-convention, ostensibly to help promote an ITT subsidiary hotel there. The convention fell through but ITT had an anti-trust suit against it dropped by the Justice Department a matter of days afterwards.

The scandal burst. Top Nixon underlings were implicated in the deal worked out between ITT and the Justice Department. H.R. Haldeman, Erlichmen, Dean, Stans, Mitchel, Agnew, Colson and Kliendenst all had some role to play.

The characters that Sampson prefers to bring out are not Nixon's functionaries though but Geneen's. Felix Rohatyn and Andre Meyer of Lazard's bank, Ned Gerrity the PR man, Bergerac of ITT in Europe, the Washington chief Merriam and the lobbyist Dita Beard. Mrs Beard was at the centre of the Republican Party scandal, one of only three female executives of the three thousand that ITT employs. It is these people that Sampson dwells upon as he uncovers ITT inextensive detail. It is the personal emphasis that makes the book highly readable, that makes it indeed drama.

One rather recent act in the ITT play concerned the election of the late Salvador Allende to the presidency of Chile. ITT had extensive interests in Chile and feared lossing them so first of all a rival candidate was backed and then when Allende was elected by popular vote ITT plotted to have him overthrown before the congressional elections. John McCone, a former head of the CIA and now an ITT executive, met with Nixon men such as Haig and worked out elaborate plans to have the Chilean economy thrown into chaos and the Allende Government discredited. Geneen talked about "freedom dying every-where" in reference to Chile under Allende: he is no doubt pleased with the junta.

ITT is quite prepared to deal in the Soviet Union though which says a great deal for both ITT and the USSR. When the full extent of ITT's dealings in Chile became public Allende nationalised ITT's enterprises in Chile without compensation and ITT's insurance claim in the US failed to get redress there either.

It is the personal emphasis that makes Sampson's book highly readable. ITT is a state itself, peopled by ITT nationals who live a sort of ITT land, they live in Sheraton Hotels and Levitt homes, eat Wonder bread, insure with Hartford Insurance and drive Avis cars, they rarely need to leave the ITT or ITT subsidiary life. In Sampson's eyes this makes ITT an arch-type or at least some sort of new breed. The old financial empires like JP Morgan's or Rockefeller! were relatively 'good'. Corrupt perhaps on occasions but certainly responsible and usually accountable. ITT is one of a select group along with such conglomerates as Gulf and Western and Ling-Temco-Vought, they are accountant's creations, based on mergers and takeovers not development.

Sampson thinks that only national governments can stop such monsters as ITT. He thus draws back from the conclusions that his data would strongly indicate. That is, the multinational corporations are too big even for the strongest government. Incredible pressures are brought to bear on personnel in government no matter how well intentioned they are; many finish up working for ITT. Revelations subsequent to Sampson's book show that the pressures on the Justice Department to drop the anti-trust case included Nixon himself. Arhcibald Cox said after his dismissal as the special Watergate Prosecutor that the most important secrets at the top of US government were related to ITT.

ITT, like Nixon, is embroiled in scandal. Both could find themselves sacrificial lambs to the ethic of capitalism. Being found out was their wrongdoing, for there are many other equally infamous imperialists who are still getting away with their crimes. Sampson does not see that only the people affected by the activities of companies like ITT can stop them, be they Chilean peasants, workers in South Africa where ITT is rapidly expanding, or ITT employed journalists forced into prostitution. Sovereign State is thus a narrative, a drama of power and manipulation in one organisation. It is an incisive and very readable study but its lessons must be drawn in a wider context.