Commentary Despite their friendship, Nixon ~spectable eastern firm include~ By JONATHAN MARSHALL ~d Keams pa~ed ways Mter

Richard Millar, a member of iote~st, l~t year it w~ revealed Only ~ Daily Columnist Nixons defeat in the 1960 Northrop Corporations board of that Stans held a $318,000 When Secretary; of State Presidential election. While Nixon directors, and important CIA interest in William Rogers told a group of set his hopes on winning the 1962 figures like James Russell F0rgao subsidiary a. Penn Central at the time the corporate executives in 1971 that California gubernatorial election, and William Jackson. " Commerce : Department " was "This is a business Kcerus, a self-styled "developer of Kalmbach involved in secret efforts to save administration, little did he domestic and international Northrop, Glore Forgan, and the railroad from bankruptcy. know how welt the Watergate ventures," cultivated his own the Stans Foundation are all Stans firm, Glore Forgan, acted revelations -- from ITT to the contacts in the FarEast, represented by Herbert as an investment adviser to Penn Dairy Deal --would prove him Coincidence Kalmbachs law firm, Kalmbacb, Central. correct. In 1962 Kearns became an DeMarco, Knapp & What did all thi~ conflict of Contraryl to popular belief, "Adviser" to the board of Chtlliugsworth. This firm still interest lead to? Ever since Kearns Nixons directors of the Japanese i~ however,to,yards big business super-conglomerate Mitsui, which handles Nixons financial matters had set up Siam Kraft Paper .favoritism ,.Richard -- free of charge. Kalmbach Company with enormous favors derives from personal connections in 1963 contracted with Indonesia personally supervised the pu~ehase:~ from the . Thai and ~ U.S. and philosophic convictions rather for a lucrat ve ten-year oil-drilling and renovation of the Shn govemmants, he stqod by and than from o d-fashioned b(c ry. p g re mm Was it coinciden ethat Clemante estate. While Nixon has watched while Parson & Whitmose ibe . c His long-time association with the law firm Nixon joined that severed formal ties with Haldeman : Inc., a New York construction the business community as " a year represented Mitsuis interests and Ehriichman, Nixon has not company that he: brought in, corporhte lawyer with Nixon, in the United States? ~ ended his ralationship with drained away Siam KraftS initial ilMudge, Rose, Guthrie and Whatever the answer, Nixon Kalmbach, despite Kalmbachs capitalization of through vastly Alexander led naturally to his certainly appreciated his direct link to the Watergate affair inflated construction fees. ~ quashing of anti-trust action friendship with Keams On his (he h red and paid Donald Segretti., Enter The Bank against such firm clients as ITT, El extended trips to the Far East in $40,000 to disrupt the Muskie P&W now faces a $20 m Ilion Paso Natural Gas, and 1964 and 196(~ to handle overseas campaign), law suit for its fraudulent Warner-Lambert. When he allowed legal matters for Pepsico and When Nixon took office ia activities. But Kearns didnt want Pepsico to win an exclusive other multinational firms, Nixon January, 1969, he immediately his original company to go under :. contract with the Soviet Union, was always accompanied by appointed Manrice Stans so quickly. In 1970, Siam Kraft ~ Nixon was only showing his Keams, who arranged the "former Secretary of Commerce: and was saved, from imminent friendship toward a former client. Vice-Presidents itinerary. Henry Kearns president of the bankruptcy by an unprecedented In return, these and .other Kearns did not neglect his Export-Import Bank. Stans and 20-year re-scheduling of loans by , corporations showed their commercial projects, however. A Kearns dissolved Thai Industrial the Export-Import Bank! Keams, ~ appreciation by raising over $60 former life nsurance sa esman, he Estates. Glore Forgan and the Stans, and ~Bostwick profited million to finance his 1972 knew the value of certa nty nStarts Foundation were paid off handsomely. ~ !rs-electioncampalgn. business ventures In 1964 he with stock from Siam Kraft Paper In 19.70 aloan~ "the Stans An in-depth examination of a organized (through his American Co. Kearns himself still owned 8 Foundation reported an increase major . conflict-of-interest dealCapital Corporation) the Siam percent of the stock, worth about in net untmxable worth of over which fell through, involving Kraft Paper Company in Thailand. $750,000. $300,000. Of course, all this several leading corporations and Concessions At the Keams confirmation might have proved most government agencies, illustrates. Thanks to the Thai hearings, Senator William embarassing, but the major the dynamic interplay between governments dependence on US Proxmire (D.-Wis.) asked Kearns if Watergnte scandals, in which Starts the Nixon administration and the aid funds and Kearns contacts in his holdings in a company was a leading figure, business world; the U.S. gnvernmeut, Kearns won financed by the Export:Import overshadowed all of these deals. Far East special privileges for his company. Bank wouldnt pose a conflict of All this might seem rather The story begins with Henry Thailand granted him amonopoly interest. Kearns assured the petty, if it didnt involve a much Kearns, a sometime southern concession and established a skeptical Senator that he would, larger, multimillion dollar deal California cas salesman and prohibitive tariff on foreign put his holdings (100,000 shares) between Northrop Corporation winner of the "Most Useful imports; the U.S. Export-Import into a blind trust managed by and the Export-Import Bank. In Young Man in California" award Bank financed the venture with. a: Bank of America (which didnt March, 1971, Northrop for 1944-45. Kearns caught the $14 million loan. ~ end the conflict at all), and that announced its interest in building special attention of the Beginning in 1964, Kearus he would let his subordinate, Don a major new international airport Republic~in party th~:ough his branched out into worldwide Bostwick~ Executive in Thailand, in a swamp about 25 membership on the Hoover industrial, land development Vice-President of the Bank, km. from Bangkok. Although Commission Task Force on schemes, drawing upon his handle all dealings with the Siam Northrop has had no previous Intelligence Activities chaired by previous experience as a realtor." Kraft Paper Company. experience in albert construction General Mark Clark, a member, ofIn 1968 he entered into a : Unfortunately; . ~as a . former (indeed, the ve~ idea of a major the far-right American Security partnership along these lines ~vice-president ~, of : Kearns. airport franchise !s original), it has Council (which Nixon associated celled Thai Industrial Estetes,:qnternafional, Bostwick was had plenty ofi experience in with in the McCarthy days). :: Strangely enough, the firm .never : hmdly a disinterested party; he Southeast ~Asia Iiwith the US Kearns directed the purchased or developed any land. still owned 8000 shares of Siam Eisenhower-Nixon campaign in His partners included the Starts Kraft stock! southern California in 1956, for Foundation (which Maurice Starts Conflict which he was awarded the post of incorporated.in 1945 as a tax Stans was hardly in a better Assistant Secretary of Commerce .dodge for. his invastmant position. Although he protested for International Affairs. On his transactions) and the New York that "there is nothing whatsoever official trips abroad, especially to investment banking house, Glore in thi~ situation that could Manila, Singapore, and Bangkok, Forgan-Staats. conceivably involve conflict of Kearus established contacts with Maurice Staas, whom Nixon interest for me," his $25,000 the multinational, business had just : appointed ~ chief holding in government-financed community just then developing fundraiser : for his 1968 Siam-Kraft during his terms as an ~ ., intereut ,..,..in..-.. expanding: presidential ~ampalgn had been Sedretary Of Commerce~ belied th~ investment opportunities fi the pres dent of Giore F.organ since claim. Stans never was very good F~East...:. ~ : . , ~.. 1965. Other ixiembers of this at recognizing conflicts of ~:

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Bangkoks present airport could through $tans, Glore Forgan, tded interest, government. of Only last year it was revealed Northrop builds F-5 and F-SE handle expected traffic and that Northrop, the Starts Foundation, :1 of" that Starts held a $8:18,000 fighter bombers, the mainstay of Northrop was manufacturing and the Nixon Foundation are all GIA interest in a Penn Gentsal .:tbe air forces of Southeast Asian figures to prove otherwise leading clients Of Kalmbachs law rgan suhsdarc at the time the ,count~ias," according to the LOS (regardless of the airports firm . ~ i: ~ Gommarce Department was Angeles Times. Galled the performance, NADC would reap !~ :~" Generosity involved in secret efforts to save "Freedom Fighter," by Northrop the construction profits). and the railroad from bankruptcy promotional literature, "Over400 Indeed~ Northrops proposed Jack Baithe, the official for the all " Stans firm, Glore Forgan, acted F-5s are. now in service with 11 price tag for maintaining the Agency for International :bert as an investment adviser to Penn free-world nations around the airport was three times the Development who first suggested an that the .Export-Import .iBank globe." F-5 squadrons are active amount suggested by *ach, Central. & What did all thi~ conflict of n snch "free" countr es as Spain, independent consulting firm The reschedule .its loan with Siam still: interest lead to? Ever since Kearns Greece, Iron, Taiwan, Turkey, the land chosen for theairport site Kraft Paper Company, now works tters had set up Siam Kraft Paper Philippines, and Vietnam, thanks was a rapidly-sinking swamp for Northrop. Finally, and most Further, NADC would require the persuasively, Tom Jones, head of bach Company with enormous favors to US military aid programs ~hase~.~ from the : Thai. and U.S. The President and Chairman of Thai government to pay all Northrop and a Stafiford Trustee, San governments, he. stood by and the Board of Northrop, Tom "infrastructure" costs, such as illegally donated $75,000 in cash ~ has watched while Parson & Whitmore Jones, sits: on the Board of roads between the congested to Kalmbach to finance the ,man Inc., a New York construction Trustees of Stanford University., airport and Bangkok. Finally, and defense of the Watergate burglars. Such generosity endeared him to not. company that he brought in, His other affiliations include the most brazenly~ the proposal with: drained away SiamKraftS initialIndustry Advisory Council of the contained no provision ~for his friends and business associates i within the Adn~inistration. schs : capitalization of through vastly Department of Defense, the Board competitive bidding, Junta dfair inflated construction fees. of Advisers of the Industrial Unfortunately for Tom Jones, Enter The Bank . College of. the Armed Forces, and Such objections might have ,~etti killed an ordinary project, The factors outside his control led to askie P&W now faces a $20 million the Board of Visitors of the Air chairman of Thailand!s airport the collapse of the project two law suit for its fraudulent Force Systems Command. So when Northrop announced negotiating committee, however, weeks ago. Severe dissatis~action e in activities. But Kearns didnt want ately his original company tq go under its interest in building a new was Air Chief Marshal Dawee with the proposal from nationalist 3tans so quickly. In.!970, Siam Kraft. airport in Thailand, it was taken Chullasapya, then a member of groups in Thailand (left and right) Northmps and was saved, from imminent- seriously. Northrop created a the ruling junta -- and extremelyforced a slowdown ofembassy the bankruptcy by an hnprecedented subsidiary called the Northrop close to the American embassy~ plans;, the ; U.S. and 20-year re.scheduling of loans by Airport Development Corporation His family happened to own land apparently feared that the project strial the Export-Import Bank! Keams, (NADC) with minority control of right ndar the proposed airport might: adversely, affect U.S.-Thal the Stans, and~ .Bostwick, profited a nominally Thai company, site; coincidentaBy, no doubt, the relations at a time when Americas ~ Northrop Thai Airport Company, Marshal suppressed opposition to hold ~ on :: Southeast :: Asia is off.~ handsomely. especially precarious. % !L:! ?aper: In 19.70 alone;: the Stans Ltd. (NTAC), to advance the the . .airport plan. Other Thai ~ed 8 Foundation reported an increase proposal to the Thai government, g~oups with an teterest in the But " the minl-revolution Lucrative project included the influential organized by Thai students last ~bout in net untaxable worth of over Its unprecedented plan was to Chaiyasutr family. $300,000. Of course, all this month, which ousted the ruling On the American side, support military clique which favored orion might have proved most have NTAC finance, design, illiam embarassing, but the major engineer, and operate for twenty for the .project came from Henry Northrop, really killed the airport rns if Watergate scandals, in which Stans years a new international airport Kearns of the Export-Ifnport ~ ~pany was a leading figure on land provided bY the Royal Bank, which would finance the iPnl~e~iec~ur~lSss, U~d tnr~ion~[~s~se~~ aport overshadowed al of these deals: Thai government after which venture Without . his backing nnany ~orceo me new rnm All th~s rnght seem rather control would pass to the Northrop coud never have gotten ct of the petty ~f ~t dld~ t revolve a much govemreent. The mrport would off the ground. As he told ~ Ythr,m nrofitabledreams could larger, multimillion dollar deal cost at least $100 million to newsmen in Thailand, the project ..o-... This story : of worldwide lares) between Northrop Corporation construct, with an equal cost for would be essential to Thailands d by and the Export:Import Bank. In. subsequent expansion. Financing long-term importance as an business deals between:: large lidnt March, 1971, Northrop would come from Keams international air center, and thatcorporations and members of the announced its interest in building Export-Import Bank. After taxes, financing would be ;no problem." Nixon Administration is complex Don ,that a major new international airport Northrop expected to net an Northrop and Keams signed a but intriguing. It illustrates the extent.of the businass-govemment contract on February 1. t i v e in Thailand, inn swamp about 25 estimated $290 million. Why was Kearns so favorable partnership that has developed When these proposals came to Bank, kin. from Bangkok. Although Siam Northrop has had no previous light~ public react on in Thailand to the proposal? Again, ~ve can over the pas~ five years at the pony. experience in a~rportconstruction was swift and highly negfitive. look to business ties within the expense of the American public )rmer (indeed, the vary idea of a major First, no real need had been Administration. Richard Millar, a Devoted to business and dedicated [earnsl airport franchise !s original), it has established for finother airport; director of Northrop, is to furthering its diverse interests, was had plenty Of~ experience in the International Air Transport Vice-Chairman of Glore Forgan,Watergates will always come easily y" he Southeast ~Asi~ !!with the US Association pointed out that to which Keams is .associated to Nix0n and his associates. "i: ~ ........... ............ Siam ._._ _._

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