A very long chapter,which I decided to break down into at least 2 parts.Their dealings with the media are highlighted in these first 4 sub-chapter's,particularly one certain writer.The family's actions in tandem with some corrupt judges in New York against this writing was the start of Americans losing their first amendment right to Free Speech,but yet the Family was entitled to their free speech in this precedent setting incident dealing with Corporate entities...
DuPont Dynasty
Behind the Nylon Curtain
Gerard Colby
Sixteen(1 of 2)
A DYNASTY IN TRANSITION
1. THE BATTLE FOR THE BRANDYWINE
The dirt cast about during the 1972 national election had barely settled when a group of
men gathered in the large home of Reynolds DuPont, Delaware’s leading state senator.
There was a somber tone to their meeting, odd for a time when most Republicans had
cause to celebrate. Their presidential candidate, Richard Nixon, had been re-elected in
a landslide that buried George McGovern’s protests about being the victim of dirty
tricks and a second-rate burglary at his campaign headquarters. No one in this
Republican group ever considered the election stolen, then or now. It had been paid for,
fair and square, like any other commodity, and the DuPont's had paid their share, almost
half a million dollars if you included the tithes paid by their top employees at the
chemical company. John E. DuPont, the largest donor, at $141,125.00, spoke the
sentiments of most of his family when he later explained that “If McGovern were
elected, he would have started a socialistic trend.”
1 To evade just such a socialistic
intrusion into his freedom to be generous, namely, the federal gift tax, John had sent 46
separate checks for $3002.67 to such organizations as Florida CREEP and Nebraska
TV-Media CREEP. Other family members like Reynolds did likewise, and the results
were telling.
Tom DuPont, Reynolds’ son, had gotten himself a seat in Delaware’s House of
Representatives. And Reynolds nephew, Pete DuPont, had been re-elected as
Delaware’s sole congressman, and his prospects for taking the governorship in 1976, if
he chose to run, looked good.
Except for one obstacle: a rotund, sandy-haired man who was the subject of this
solemn gathering, Melvin Slawik.
Melvin Slawik? An obstacle to any DuPont in Delaware? Yet Slawik had just
defeated the Republican candidate for New Castle County Executive, William
Frederick. Frederick, 37, was a notable in the 1969-70 Who’s Who in American
Politics, a man who counted among his business directorships Pen-Del Equipment
Corporation, 222 Building Inc., State Line Machine Corporation, and Joseph Frederick
& Sons. An evangelical Protestant, he was president of the Full Gospel Businessmen
Fellowship Institute. But his most potent listing was as a Secretary Treasurer of
Wilmington Trust Company, the DuPont family bank.
Understandably, Slawik had been surprised by his election in New Castle, the
bastion of Du Pont power. “With a name like Slawik,” he gleefully told a reporter at his
victory party, “I took New Castle County!”
2
Or, rather, a demographically altered New Castle County took him. To the DuPont's,it was an ominous sign. Ever since the court-ordered reapportionment of the Sixties,southern Delaware’s control over the state legislature had been eclipsed by the rise of industry and population north of the Chesapeake-Delaware Canal that both literally and culturally divides the small state. New Castle County, which encompasses northern Delaware, is the home of the DuPont's. Both the city of Wilmington, where DuPont Company has its giant central bureaucracy, and the “chateau country” of mansions in the hills northwest of the city, lie within the county’s boundaries. The DuPont's had always dominated the county government through their Republican Party. Until, that is, Mel Slawik came along.
Although universally acclaimed as an affable fellow, Slawik had never given the DuPont's a political reason to like him. At a time when Henry B. DuPont was ordering the News-Journal papers to play down the civil rights movement, telling the editors that “A continued overplaying of integration in our papers certainly plays right into the hands of the radical element of our population.... Many of the writers on your staff seem to have a degree of dedication to certain causes which would make them appear to be quite far to the left,”3 and forcing the resignation of its independent-minded editor, Creed Black,by appointing a top DuPont Public Relations executive, Charles Hackett, to oversee the newspapers, Mel Slawik was engaging in sit-ins at Wilmington lunch counters and arguing for the recognition of human rights.
Like the DuPonts, Slawik was in many ways the product of his social environment,which was a world away from the Brandywine. He and his mother had been forced on welfare in New York City after his father died in 1947 when Slawik was twelve.Contrary to the DuPonts stereotype of welfare recipients, Slawik needed no more incentive to work than the humiliation he felt every day when taking food stamps to the A&P cashier. He worked hard, delivering newspapers, cleaning dishes and cooking in a hospital kitchen, and always reading. His friends told him he’d never make college, but they had underestimated him, as so many would in the future. He not only passed the entrance exam but ended up a summa cum laude graduate from Rutgers University. With his personal background and after a brief stint in the New Castle County’s welfare department after being fired as a sales trainee for trying to organize a white collar union at Continental Diamond and Fiber company in Newark, Delaware, it was not surprising that he took his master’s degree in social work. Mel Slawik, no one doubted, wanted to help people.
Over the next eleven years, he found ample opportunity in Delaware. From 1960 to 1967, he was director of Presbyterian Social Services in the state. People in Delaware still fondly recall his work with poor families in Wilmington. He set up a “Family Camp” for them where he could take them to the beach. He easily related to their yearnings for respect and human dignity, and strong bonds of mutual trust and loyalty were fused.
It was a quality that followed him throughout his career. He was elected national president of the United Presbyterian Health, Education and Welfare Association. In 1968 he founded Delaware’s Geriatric Services for the elderly with a small grant from the Bureau of Aging. By then, he had also served four years as a state representative and that year was elected to the state Senate. When he left the Senate in 1972 to run for the office of County Executive, Geriatric Services was a resounding success, its $2 million budget and staff barely able to keep up with the elderly demands for its services, the only one of its kind in Delaware.
His service in Dover politics had also won national recognition. Rutgers Eagleton Institute of Political Science named him one of the outstanding legislators in America.The NAACP presented him with its prestigious Award of Special Recognition for Minority Services. His contributions to organized labor won him honors from the United Auto Workers of America and the Delaware State Employees Union. Most DuPont's,including Senate pro-tem president Reynolds DuPont, may not have appreciated his efforts to help create the D.S.E.U or his civil rights stands, but the voters in his normally “red-neck” district tolerated Slawik’s causes because he always supported their own bread-and-butter concerns. This constantly put him at odds with the special interests of the DuPont's, and he fought Reynolds over a change in Delaware’s tax on income from the sale of stocks and bonds. For years, Delaware had taxed these capital gains like any other income. In 1967, however, Wilmington tax lawyers led by Johannes Krahmer drafted a bill that followed the federal setup, which allows a lower tax rate for capital gains. Since wealthy families like the DuPont's derive most of their income from investments in stocks and bonds, not salaries, Slawick opposed the bill as a proposed special interest legislation favoring the rich.
The mansions of the Brandywine, obviously, were not toasting to the political health of Mel Slawik.
Slawik did not care. To him, the DuPont's and their allies already had too many tax windfalls. Delaware, unlike 44 states in the Union, has no personal property tax. Most residents owned little personal property anyway beyond their houses and land. But not the DuPont's. Crawford Greenewalt and his wife, for example, admitted owning stocks,bonds, jewelry and other property worth $20 to $30 million, yet paid property taxes on only 1–2 percent of their holdings.4 Henry B. DuPont admitted total property holdings—real (land, houses, and improvements thereon), tangible (cars, boats, livestock, cash,etc.), personal and intangible (stocks, bonds, patents, interests in insurance policies,etc.)—of $56 million, yet paid a property tax on only 10 percent of that, the $6.1 million of real property.
Nor does Delaware have a stock transfer tax. This particularly benefits the DuPont's as the richest stockholders in the state. Most owners of stock do not buy or sell securities in great numbers. The DuPont's and other wealthy families do.
Nor does Wilmington’s wage tax include income from stocks and bonds. In the 1970s it was common for Irénée DuPont, Jr., and H.R. Sharp each to reap between $200,000and $300,000 in dividends from their shares in DuPont and Christiana Securities alone.Yet neither paid any taxes to Wilmington on that income; the onus of the wage tax is instead put on the working class.
Nor was Delaware’s income tax on wages and salaries really progressive beyond$30,000 when one looked at the loopholes for the rich, including tax-free government securities, deductions, exemptions, and credits. By these means, as Marvin Brams points out in his Delaware Inheritance and Estate Taxes (University of Delaware,1969), the 11 percent tax rate was reduced to 6.8 percent for Delawareans who made $200,000 in 1971; those making $15-17,999 paid 4.3 percent, only 2.5 percent less.
Nor did Delaware have a gift tax until 1971. Even then, the new law allowed a mere six months between the time money was given to an heir and the date of a benefactor’s death for the estate to be taxable at rates still below 27 of 36 other states having inheritance taxes.5 Any gifts received before those six months were exempt. Forty-two states require more time. And heirs of modest estates of $25,000 end up paying a higher tax rate than those heirs of net estates worth $2.5 million and even $5 million.6 Delaware’s trust laws also exempt the beneficiary of a trust from gift taxes; the tax,instead, is paid to the state and federal governments by the millionaire who sets up the trust before his death. As long as the trusts principal is not distributed, four generations of heirs can live off the dividends and interest without paying any Delaware estate taxes. If the trust is in Delaware or other government bonds, the heirs do not pay any federal taxes either.
Slawik had had enough. When the new capital gains bill was introduced he challenged Reynolds DuPont in the Senate. Governor Russell Peterson, a former $70,000-a-year DuPont executive, threw the executive branch’s weight behind the measure in 1970 and it was enacted by legislators terrified by threats that the DuPont's would move elsewhere. That was unlikely. Even Congressman Pete DuPont conceded that tax rates were only one of a multitude of factors determining where his family members lived.7 But the threat always worked, and still does.
Conditions in New Castle County had gotten worse by the early 1970’s. The uncontrolled construction of new installations by DuPont and other chemical companies and the lucrative housing developments for the thousands of employees they brought into the area had made a shambles of the county’s sewer system. As early as November 1970, the county government, headed by William J. Conner, a member of DuPont's Legal Department from 1947 to 1966, announced a complete breakdown was imminent.
Part of the responsibility lay with a zoning commission which had for years been steered by a DuPont family member, Samuel H. Homsey. No intensive studies were undertaken to guide the county in land use. While W.W. Laird and other DuPont's and the Allied Woodlawn trustees prevented new developments from being constructed in chateau country and kept land prices high by releasing only a few parcels at a time onto the residential market, encouraging over concentration in selected areas, the county’s Levy Court, which controlled the sewer system’s construction, built what “it could afford”8 (which was limited by the county’s low tax base) rather than what was needed,resulting in what the Conner Administration admitted in 1970 was a “poorly planned,outdated and polluting sewer system.”9
Housing was also a big problem, exacerbated for minorities by racial discrimination incorporated in Woodlawn Trustees leases which read: “No lot or part thereof shall be conveyed to, used, owned or occupied as owner or tenant by any person not of the Caucasian race.”10 Meanwhile, in the previous two decades the city had torn down more housing than it put up11 and the Black community charged that banks denied Afro-Americans home loans for no apparent reason.12 This was all in violation of the Supreme Court’s ruling two decades earlier outlawing racially discriminating covenants in real estate deeds. Until the early 1960’s, when fair housing erupted as an issue, DuPont Company participated in the state’s segregation, finding housing for its employees and placing them with selected realtors; then, as controversy rose over this practice, it withdrew altogether, leaving minority employees to fend for themselves. In 1968,Woodlawn struck the offending covenant, but was later caught segregating a Wilmington rental project by the Delaware Human Rights Commission.
With the exception of Slawik’s Geriatric Services, medical services for the county’s poor were dismal as well, reflected in the high infant mortality rates in Hispanic and Black communities in contrast to the very low rates in the affluent districts.13Wilmington Medical Center was the fifth largest voluntary general hospital in the nation and charged the highest fees in the state.14 In December, 1970, two young boys died en-route to another hospital after being denied emergency care at Wilmington Medical Center. The hospital had practiced racial segregation in its wards until 1957 and a study by Sociometrics, an independent consultant, revealed that Wilmington Center’s care to poor patients was of a low quality.15 When the 1970 incident occurred, the Wilmington News Journal papers reported the boys’ deaths, but did not report Wilmington Medical’s refusal to treat them, even though a sworn affidavit by the boys’ parents was given by a City Hall official to a News Journal reporter.16 At the time, DuPont's were directors of both the News-Journal and the Medical Center.
Under these circumstances it was not surprising, as the Nader Report on Delaware pointed out, that “the highest incidence of mental illness was in census tracts of poor whites and blacks.”17
Between 1959 and 1969, the national poverty rate declined from 22.1 percent to 12.3 percent of the population; in Delaware, the rate of decline was one of the lowest in the country, dropping from 16.8 percent to 15.7 percent; in absolute figures, the number of poor Delawareans actually rose from 73,000 to 85,000.18 Yet in 1970 Delaware was making welfare payments to the poor that were consistently below the national average;this included aid to the elderly, to families with dependent children, and to families of the unemployed.19 That year federal officials ruled that Delaware’s legal ceiling on benefits was too low and threatened a court suit; the Peterson Administration then pressed a bill through the legislature raising the ceiling, but only after assuring the DuPont-dominated assembly of white collar professionals that not one additional dollar would actually go to any family on welfare.20
The county administration under William Conner was failing to respond to a mounting crisis that was now extending to DuPont employees as well. Of seven sites for a 400-unit low-income housing project proposed by the Wilmington Housing Authority to the federal Department of Housing and Urban Development (HUD), the county planning commission vetoed four and failed to approve a fifth. The two other sites were rejected outright by HUD. The County Council, dominated by its president, DuPont family member C. Douglas Buck, Jr., then established its own housing authority to study the possibility of building 900 units by 1973. About 70 percent of the county’s families earned less than $10,000 a year; 50 percent less than $8,000; 13,000 families had annual incomes below $5,000. In a county where residential properties were inflated by DuPont family hoarding and speculation and the population influx conveyed by Interstate 95 (promoted by the former leader of the states highway commission, DuPont family member H.R. Sharp), new homes were simply beyond most citizens’ means. And in the areas already developed, the congestion was so bad that there was not enough land left for recreation. The district called New Castle Hundred, for example,dominated by the Greater Wilmington Airport that Henry B. DuPont had pressured the county to build, contained only 13 public parks or recreational facilities. Most local residents, of course, could not afford the private clubs that DuPont executives enjoyed.
These were all issues that motivated Mel Slawik to run for County Executive in 1972. Unions remembered his impressive record as chairman of the House Labor Committee. Minorities remembered his track record on civil rights. The elderly remembered his four years of building Geriatric Services. Polish-American and Italian-American residents in the working-class suburbs of New Castle remembered him as a man who had stood against the DuPont's hoarding of over 35 percent of the rural land in Christiana Hundred district, 19 percent in Mill Creek Hundred, and 13 percent in Brandywine Hundred. They listened to his pledge of more parks, more and better educated police, an improved sewer system, a local service tax, and more housing.
The DuPont's News-Journal papers saw them listening and soon a series of articles appeared by Jack Nolan, admittedly inspired by Republican state representative George Hering. “Why don’t you go after Mel Slawik,”21 Hering had told Nolan after complaining about Nolan’s investigation into his law firm’s receiving almost $90,000 worth of business from the Peterson state administration.
Nolan did, and on May 16, 1972, the News-Journal’s attacks on Slawick began. They claimed conflict of interest by Slawick in voting for legislation that benefited Geriatric Services and noted that the agency, which had grown into a million dollar service, had failed a recent audit. Nolan later recalled Slawick being cooperative during his investigation, and insisted, “We weren’t trying to hang scalps on anyone’s belt. At that time, Slawik was just a minor figure from a blue-collar district.” But Nolan’s additional comment to the Delaware Today Magazine, edited by a son of a DuPont executive, was equally telling. “Maybe he thought no one would ever look. But they did.” It would take two more years for Slawik to prove his innocence. In 1974 the state Attorney General exonerated him from any wrongdoing at Geriatric Services. But by then the damage had been done by the News-Journal. “He was going big-time,” said Nolan.22
No one will ever know how many votes the News-Journal series cost Slawik, but his campaign survived. Although he pledged to take another look at the assessment of property values, including those of the DuPont's, he generally kept a low-key tone,building a momentum that was designed to peak on election day. He was trying his best,but he never believed, he later confessed, that he would actually win.
The strategy worked. His Republican opponent, William Frederick, under estimated Slawik. When the returns came in, Slawik had won by 1515 votes.
Now, at Reynolds DuPont’s home, the Republican leaders feared the worst. If Slawik made good on his property reassessment pledge, the DuPont's and their corporate allies were bound to suffer because county assessments were notoriously biased. A small shopping center near DuPont's Experimental Station, for example, was assessed at $6224 per acre; the Station, which has never paid taxes on its research equipment or industrial fixtures, was assessed at only $699 per acre.23 In addition, most of the DuPont mansions and estate grounds were grossly undervalued compared to nearby homes;it was not uncommon for adjacent homeowners to have their properties assessed at two, six, and even 13 times what DuPont's paid per acre.24
The DuPont's were also worried about what Slawik would do about pollution. In July, 1970, air pollution had gotten so bad that the Conner Administration was forced to declare a state of alert. For a week, 350,000 people in New Castle County, and particularly Wilmington, were subjected to sulfur dioxide levels as high as .4 parts per million, far beyond the .1 part per million considered the safe maximum level. The Peterson Administration in Dover proclaimed a 24-hour pollution watch on July 28, but it limited only open burning and incinerator operations. Under Delaware law, industrial firms, including three of the biggest polluters, DuPont’s Edgemor and Chambers Works plants and the Delmarva Power and Light plant at Cherry Island, could not be forced to shut down. Delaware’s Water and Air Resources Act, it seems, had been amended with Section 8203(b), destroying state-wide standards and allowing different ones for different neighborhoods, despite the fact that northern Delaware industries are usually very near residential areas. The promoter of the amendment was DuPont’s chief environmental lobbyist in the Legal Department, the same William Conner who was Slawik’s predecessor as County Executive.
Since the passage of that law in 1966, Delaware’s Division of Environmental Control had admitted that the county emitted 200,000 tons of sulfur dioxide every year. New York, with 10 million residents and many industries, put out 400,000 tons. There were only 350,000 people in New Castle County, however. The source of the air pollution was obvious.
The same was true for water pollution. In July, 1971, the Evening Journal, in an unusual display of candor, reported that “An analysis of a typical milk bottle full of river water from near the Delaware Memorial Bridge at the mouth of the Christiana River shows dissolved oxygen levels too little to support fish; and certain bacteria counts four times the permissible drinking water standards.”25 DuPont’s Chambers Works and Edgemor plants, which treated their wastes only on a primary level before dumping them into the Delaware River, shared responsibility with other Delaware, New Jersey and Pennsylvania companies. Yet DuPont opposed water quality standards proposed by the Delaware River Basin Commission. Again, William Conner’s amendments for the Water and Air Resources Act provided loopholes in the form of Section 6007’s allowance for variance and waiver of public hearings by the applicant for a variance. DuPont applied for the first two variances.
Section 6006, another brainchild of Conner’s, called for “conference, conciliation or persuasion” in bringing violators into line. As Peterson’s Attorney General, William Laird Stabler, put it, “the old things of conference, conciliation and persuasion should be part of” the state’s enforcement efforts.26 Stabler, a DuPont in-law, assigned only one lawyer per day each week to work with the state Water and Air Resources Commission, which in 1971 was brought under the control of the governor’s Department of Natural Resources and Environmental Control in a major governmental “streamlining” by an Economy Committee made up of 34 corporate executives full time and 18 more part time and financed by corporations and a $20,000 grant from the DuPont's Welfare Foundation.
The election of an ultra-conservative Democrat as governor in 1972 did not really concern the gathering at Reynolds du Pont’s home. Sherman Tribbitt, after all, had introduced the bill in the General Assembly which granted the Du Ponts special tax breaks during Christiana Securities and Du Pont’s court-ordered divestiture of General Motors. He could be expected to continue to respond favorably to Du Pont influence.
What really worried them was Mel Slawik. What if he should take his job seriously and try to do through the county government what no one had been able to get Dover to do?
In a real sense, it was what Slawik symbolized that alarmed the top Republicans that night. He represented a shift of political power that accompanied the movement of new job locations to the suburbs throughout the country, undermining the traditional control of the Republican Party in those areas. Slawik, moreover, was a representative of a blue-collar constituency that threatened to undermine the power of the landed gentry from southern Delaware who had traditionally run the Democratic Party. DuPont in laws such as lawyers G. Burton Pearson and William Potter had been big wheels in the Democratic Party, carrying out the family’s traditional conciliation with segregationists south of the canal. Now along comes this Slawik, leader of a coalition of not only white blue-collar workers, but Black and Hispanic blue-collar workers to boot.
In such times of crisis, politics are more than the usual diversion for men like Reynolds du Pont and Pete du Pont. They are the major means of protecting their interests and control, the fastest way of getting things that they need done. From now on, the men decided at Reynolds’ home, they would not repeat William Frederick’s mistake. From now on, they would keep a close watch on Slawik’s every move.
In the first few months of his term of office, Slawik confirmed their worst fears. His inaugural speech on January 3, 1973, shook the Brandywine. “I intend to change the image of county government,” he said, “from that of a land planner to that of a community problem solver and a responder to citizen desires.”
The News-Journal stories began to appear again. One charged Slawik with paying off political debts with jobs on the county payroll. Another pointed to a full-time professor being paid $100 a day as part-time consultant. Still another repeated the old charge that Geriatric Services money had been misused by Slawik during his campaign. When a campaign worker, Bayard Austin, hit a police car and refused to take a sobriety test, the News-Journal ran stories that pointed at Slawik. Austin had bought the car from Slawik and not changed its title until five months later. “Hell,” the County Executive said, “It was as if I had had the accident!”
In some ways, he had. Slawik had trusted the man to change the title, and now the News-Journal was raking him over the coals for a minor incident. His own accident was ever trusting Austin.
The attacks grew more serious, however, after Slawik moved to fulfill his campaign pledge about reassessing industrial and residential properties. The crux of the matter was Delaware’s Constitution. Article VIII, section 7 states very clearly that “In all assessments of the value of real estate for taxation, the value of the land and buildings and improvements thereon shall be included.” There is no provision for any exclusion of industrial property in the constitution. And the constitution is specifically cited as the legal basis for the taxing of residential properties. Yet much industrial property had escaped being included in assessments since the constitution was first passed in 1897, when the only real industrial concentration to speak of was the gunpowder plants of Du Pont. Tax revenues due under the constitution for “state, county, hundred district, school, municipal or other public purposes” were simply never collected.
Slawik decided to enforce the state’s highest law. And therein lay his greatest crime against vested interests, and his doom.
Within a month or two of taking office, Slawick’s county attorney, Thomas Luce, had called in the representatives of Du Pont’s Legal Department, Getty and other companies to express the county’s willingness to “phase in” taxation on removable fixtures over a period of years. 27
The county had already won a case in Superior Court against a group of private water companies which had appealed a decision by a county board of assessment that pipes, mains and conduits laid beneath the ground by the companies and storage tanks above the ground constituted real property and were therefore taxable under the constitution. The companies, led by Wilmington Suburban Water Corporation, held that the agreements they had with landowners had clauses asserting the right to remove the equipment. The question was whether a chattel that was removable was a “fixture” under the common law concept of real property. The Superior Court in 1972 held it was, citing as precedent a 1966 case, Wilmington Housing Authority v. Parcel of Land, 28 which determined that removability, while significant, was not a controlling factor. “The ultimate test,” wrote Richard Peterson of George Washington University’s National Law Center in his review of the decision, “was whether the annexor’s intent was to provide for a permanent or a temporary annexation purpose.” Based on this precedent, the Superior Court held that it was “inconceivable” that Wilmington Suburban “had actually contemplated removal of the items prior to the expiration of their useful life.” 29
In 1973, the judgment was affirmed by the Delaware Supreme Court in Wilmington Suburban Water Corporation v. Board of Assessment for New Castle County, 316 A 2d 211 (Delaware Supreme Court, 1973). From then on the county assessors in Delaware were free to apply the constitution and assess all manufacturing machinery and equipment that could reasonably be defined as fixtures, leaving to the assessor much discretion as to what fell within the guidelines.
Delaware was not alone in having a fixtures tax. In fact, all but 11 states in the Union tax fixtures in various ways. Only Delaware, however, had never attempted to collect what was its citizens’ rightful due.
According to Slawik, DuPont, Getty, and the other companies would not hear of it, rejecting the “phase-in” and promising, “You will back up on this.” Slawick estimated up to $200 million in taxes were due. 30 Delaware’s Citizens Coalition for Tax Reform, a non-profit organization headed by former DuPont employee Ted Keller, estimates that the county should have received $10.5 million in taxes on the Getty refinery alone in 1982, as compared to the $904,625 it did receive. The major parcel of Getty’s refinery at Delaware City is still assessed at only a bit over $15 million, while in 1957 Getty itself stated that the original installation cost “was over $200 million.” Construction projects between 1978 and the fall of 1983 amounted to another $324 million, bringing the total value, excluding 20 years of intensive construction between 1957 and 1977, to well over $500 million. 31
In 1974, the Slawik administration publicly announced that industrial fixtures would be assessed and taxed.
The tax was never collected. Instead, the Slawik Administration quickly found itself fighting for its life.
The first serious rumbles from the Brandywine were felt when Slawik began to move also on his pledge to review existing assessments of real property. An examination of county records revealed that Reynolds DuPont owned a house with 85 acres of property that was assessed for only $71,800, when it had actually been purchased in 1969 from Governor Russell for $130,000; under Delaware law, it should have been assessed for $91,000, or 70 percent of fair market value. Similarly, U.S. Senator William V. Roth, whose wife, the former Jane Richards, is a DuPont in-law, paid $157,500 for his house and 6.7 acres in 1970; under the law, it should have been assessed for $110,250. The assessor, however, put a value on it that year of only $61,200, leaving $59,050 worth of Roth’s property untaxed. Senator Roth ended up paying only $800, or the equivalent of what owners of $40,000 suburban homes had to pay. 32
The revelation of these facts by the Nader Task Force on Delaware in January 1973 spurred Slawik to action. He and his aides began to look at the outside assessor hired by the previous Connor administration, Cole-Layer-Trumble of Dayton, Ohio, one of the country’s largest appraisal companies. First they found that in Cincinnati, CLT’s assessments in 1969 had generated some 9000 complaints. Often those who complained simply had their appraisals cut in half, without showing any documentation. Cincinnati paid $2 million for the assessment. In West Virginia, CLT’s original $39.7 million figure for Continental Oil Company’s subsidiary, Consolidated Coal, was secretly lowered to $28.4 million. When West Virginia discovered the discrepancy, it reassessed Consolidated at $40.6 million and barred CLT from the state, claiming it was “a little too close to the property owners.” In St. Petersburg, Florida, the local newspaper uncovered the fact that of all the appraisal firms bidding for the city’s contract, CLT had the most assessments thrown out when examined. Outside Cleveland, CLT appraised a chicken coop, described by the Cleveland Plain Dealer as “a dilapidated building with a roof falling down and leaking, 33 as having a value of $10,840.” In Allentown, Pennsylvania, appraisals there also sparked resident protests. With major companies like U.S. Steel, on the other hand, CLT was charged with giving assessment breaks and a pro-industry bias by the Bucks County Taxpayers Association. In New Jersey, CLT encountered similar charges for its appraisal of U.S. Steel’s land for 45¢’ per square foot, when homeowners’ land across the street had been appraised at $1.70 per square foot.
U.S. Steel had been a client of CLT’s sister firm, American Appraisal Inc. 34 But the worst and perhaps most revealing story came from Westmoreland County in western Pennsylvania, home of the Mellon family which controls Gulf Oil, Alcoa, and Mellon National Bank. There, in the suburbs outside Pittsburgh, CLT was charged with assessments biased in favor of the Mellons. Property values in Ligonier Township, for example, were allegedly increased by about 40 percent, while properties of the Mellon family, who own about 15,000 acres in the town, had been raised only 2 percent. Much of the Mellon land had been valued at less than $100 per acre; in one case, a 312-acre Mellon property was assessed at 64¢ 35 an acre. When this last figure was published and a public outcry arose, Westmoreland County officials claimed a mathematical error and quickly adjusted the figure in par with the other Mellon assessments. Real estate agents, however, placed the real per acre value in the thousands.
Although the chairman of the county assessment board who reported these discrepancies was subsequently fired, County Controller Wayne Gongaware discovered that CLT had hired inexperienced high school and college students at $1.50 an hour to do initial inspection, and then sometimes even disregarded their work in favor of no first-hand evaluation. Instead, Gongaware explained, “They had their employees take the county’s books across the street at night where their clerks erased the students’ penciled-in writing and replaced it with the county’s figures from its property tax cards,” 36 many of which were not even up to date. Gongaware estimated that most homes were increased 25 to 75 percent by CLT, while many industrial and commercial properties and land held by real estate interests had no increases despite state laws requiring uniform assessments. U.S. Steel’s assessment was reduced $1 million; Alcoa’s, $4 million. “What CLT did was cheating by fraud,” Gongaware claimed. “When you deliberately erase records and put in our old records and then sell them back to the county for $1 million, that’s fraud.” 37 Confirming Gongaware’s findings, county District Attorney John Scales petitioned county judge David Weiss to convene a grand jury; Weiss refused.
“It’s unheard of for a judge to turn down a district attorney’s request for a special grand jury,” said Pennsylvania’s Deputy Attorney General, Peter Brown. 38 Weiss later claimed he believed Brown and Gongaware were out “to get” county commissioner Jim Kelly; for his part, Kelly claimed that “this controversy is all a bunch of bull shoes.” 39 The investigation was frozen. “It’s just astounding what went on,” Gongaware said. “We revealed it to the county commissioners and they just laughed at us.” 40 At that point, Gongaware reversed his earlier refusal to pay CLT its final $121,000 due.
Suburbanite Mrs. Dorothy Shope and farmer Robert Shirey then decided to run for two of the three county commissioner seats in the local elections as candidates of the Association of Concerned Taxpayers (ACT), won, and joined Kelly on the commission. But Shirey’s loyalty suddenly began taking a turn toward Kelly and both then excluded Mrs. Shope from executive sessions or failed to attend those she scheduled, even when she was actually the elected chair. Later it was discovered Shirey not only rented a farm from the Mellons but also received some $9000 of his $12,000 in listed campaign contributions from the Mellons. The largest came from Richard Mellon Scaife, who had shared John E. DuPont’s penchant for writing $3000 checks to Richard Nixon’s CREEP in 1972; in fact, 330 such checks for a total $990,000. Scaife has also given money to Delaware Senator Bill Roth.
Shirey, like many in Delaware who share the same fear about the DuPonts, warned that “There are great dangers involved in pushing the Mellons too hard on the assessment question. There was once a time when I could pick up a phone and get a grant for a library from the Mellon Foundation, but now it’s dried up.… You’ve got to be careful, the family could leave the county.” 41 He threatened Mrs. Shope with a legal suit if that happened.
Mrs. Shope was learning that it was one thing to hold office and another to hold power. Whatever doubts she had about this were dissolved when she received an invitation from Pittsburgh’s county District Attorney to visit his office. Robert Duggan, a middle-aged man with silver hair, was an old friend of Shirey, who was in telephone contact with him daily. Duggan was also an old friend of Richard Mellon Scaife. In fact, through his close relationship to Scaife’s sister, Cordelia, Duggan had risen from Cordelias private attorney to consigliere to Scaife himself. It was Duggan who moved Scaife into the nether world of ultra-right wing politics and backing Barry Goldwater and “the governor from Hollywood,” Ronald Reagan. And, of course, Richard Nixon.
Duggan was rumored also to be an old friend of the underworld. When the IRS,investigating Duggan, contacted Cordelia to seek her testimony, she flew to Nevada and Mrs. Cordelia Scaife May became Mrs. Cordelia Scaife Duggan. The District Attorneys wife was thereby shielded by law from having to testify against her husband.
The IRS was thwarted, but other federal officials and reporters tracking organized crime began following a thickening trail of clues that led to the DA’s office. In September, 1971, federal indictments began to come down. About this time, Scaife, who had backed Duggan financially in the past, is believed to have cut the DA loose. Juries subsequently convicted three of Duggan’s key assistants. According to the U.S. Attorney, they were “in effect franchising all the numbers rackets in the Pittsburgh area.” 42 Duggan’s Racket Squad chief, Sam Ferrarro, was convicted of seven counts of taking $300,000 in bribes from organized crime figures for protection.
Mrs. Shope was innocent of Duggan’s ties when she went to his office. But when, in the absence of her lawyer, Duggan suggested they meet Shirey for dinner “in a place where we won’t be recognized,” she walked out. “From that day on my life has become a living hell,” she told Harper’s George Criles III, who investigated her story for the Washington Monthly. Phone calls followed her to her house, even the courtroom, threatening her children. The brakes on her new car suddenly failed and the accident “totaled” it. Judge Weiss stated he was at last considering convening a grand jury—to investigate Mrs. Shope. “Here she is acting both as chairman of the commissioners and as a private citizen fighting the will of the commission. Who ever heard of such a thing?” 43 County records were then closed to the public. Robert Elston, chair of the Association of Concerned Taxpayers, had his car firebombed; he only barely escaped a second explosion by smelling gas and jumping out of his car. The local newspaper, the Tribune Review, concluded a six-part series by arguing that “politics” was behind “largely a contrived tax revolt.” 44 the Tribune Review was owned by Richard Mellon Scaife.
Scaife ran his newspaper like a dictator, decreeing the end of reports on torture and killings by the Chilean military after the CIA-backed coup against Allende, ordering the destruction of all but smiling photographs of Richard Nixon, interfering with the news and firing editors and reporters alike.
The intervention of Ralph Nader, however, brought national media coverage to. ACT’s charge against Cole-Layer-Trumble and an investigation by the Senate Subcommittee on Intergovernmental Relations. It took time but CLT came under investigation by the state of Tennessee over the awarding of a major contract. After CLT’s president, William Gunlock, was subpoenaed, he resigned.
District Attorney Duggan did not have so easy an exit. An hour before a federal grand jury indicted him for allegedly taking a minimum of $250,000 in bribes, Robert Duggan was found on the lawn of his estate in Westmoreland County, dead of a shot-gun blast into his chest. The weapon lay with the body. The coroner ruled it a suicide.
Even before his death, however, the controversy surrounding CLT in Westmoreland County had attracted the attention of Slawik’s aides. The Mellons had in the past been political and business allies of the DuPonts, who held large blocks of stock in Alcoa, Gulf, and Mellon National Bank. The Mellon’s renewal of downtown Pittsburgh with their “Golden Triangle” had originally been the DuPonts’ inspiration for their plans for downtown Wilmington. But it was Cole-Layer-Trumble, not the similarity of Mellon control over Pittsburgh to the DuPonts hold over Wilmington, which interested Slawik. Soon, however, the analogy between the cities became manifest.
As in Westmoreland County, Cole-Layer-Trumble’s contract with New Castle County allowed it to use unskilled “listers,” including high school students, to inspect properties. New Castle residents paid CLT $1.8 million for the contract, slightly below what Cincinnati had paid. In that city Fred J. Morr, who hired CLT when he was a Hamilton Company auditor, was asked at a county budget hearing why he gave CLT the contract. “Republican headquarters made me do it,” 45 he blurted, so regretting that admission later that he denied it. In New Castle County, Slawik aides found, CLT got its contract from the Republican administration of William Conner without having to engage in competitive bidding.
In March, County Executive Slawik asked Cole-Layer-Trumble to justify the $4 million reduction it had made in assessing DuPont Company properties. CLT, Slawik had learned, had made the reduction after negotiating with DuPont officials who used data from a secret appraisal done by another company hired by the chemical giant, International Appraisal Company of Fair Lawn, New Jersey. International had admitted not knowing of any DuPont-CLT negotiations which led to the lower valuations and suggested that its own study might show a total valuation actually higher than CLT’s. When Slawik asked DuPont for a copy of International’s appraisal, DuPont refused.
It was then that Slawik sent a mildly worded letter to CLT asking about reductions for DuPont and other “large industrial and commercial complexes” amounting to a whopping $33 million. Only 132 individuals and firms accounted for this sum, 90 percent of the total $36 million in reduced assessments. “It is most difficult to justify such large reductions,” Slawik wrote. 46 It was also expensive to New Castle homeowners. As CLT itself stated in a press release explaining its assumptions to the public before its reassessments were made, “Since a revaluation program does not raise taxes, and since those who have been paying more than their fair share will get reductions, it follows that some people will have to pay a larger tax bill to take up the slack.” 47
One such “fair share” reduction was land used as a parking lot at 1301 Market St. Owned by DuPont Company, it had been assessed at $126,800. CLT reduced it to $90,000. The previous figure had been based on 1950 property values that had long since risen. On the other hand, a private house at 726 Madison Street which sold for $700 in 1970 was reassessed by CLT at $2800; next door, another house sold in 1970 for $1200 had its assessment raised to $3200. It was clear who CLT’s “some people” were and who they were not.
In the summer of 1973, the secretive headquarters of DuPont made one of its classic bloopers. Applying to the Securities and Exchange Commission for clearance to purchase industrial property from the Holotron Corporation of Columbus, Ohio, DuPont filed an appraisal done on a Holotron plant which DuPont leased in the Delaware Industrial Park on the edge of Newark, the city which houses the University of Delaware. DuPont had paid for the appraisal by a private Wilmington firm, Appraisal Consultants, Inc. The purchase of the property was being claimed as an investment expense by DuPont for tax purposes, and cited the $300,000 worth assigned by the Wilmington firm in October 1971.
Under the state’s 70 percent rate, that would mean an assessment of $210,000. But Cole-Layer-Trumble’s more recent assessment was only $177,800 or 59 percent of the fair market value. At the time, DuPont claimed an expense of $50,000 a year in leasing the plant from Holotron. And Holotron, it turned out, was itself a joint venture half owned by DuPont and half by Scientific Advances, a subsidiary of the research think tank, Battelle Memorial Institute. Holotron, in fact, had been established to develop experimental photography techniques. By leasing from a company it half-owned, Du Pont could claim rental expense while it tested the new techniques; and its half-owned company, meanwhile, got a tax assessment break by Cole-Layer-Trumble, cutting back still further on taxes to the public sector. Later, when assured that the experimental technique would work and be profitable, Du Pont moved to buy the Newark plant, apparently deducting the purchase price based on the earlier and higher appraisal by the Wilmington firm as an expense also.
It was a neat trick, but what concerned Slawik was that the appraisal submitted to the SEC was the first such document made public, inadvertently, that indicated a probusiness bias by CLT. The Slawik Administration estimated that over $700,000 48 would be lost to the county treasury that year because of CLT’s under assessments of industrial and commercial properties.
Two reporters at the News-Journal papers, Robert Hodierne and Robert Frump, conducted their own study of New Castle residential properties and had to agree, to the chagrin of DuPont elders on the paper’s board, that something was rotten in Denmark. They found that non-DuPont family properties were quite uniformly assessed at about the 70 percent rate due. A former CLT official, David Reed, who joined the Slawik team to head the county’s tax assessment division, also uncovered glaring errors. But it was the DuPont document by the Wilmington firm that indicated just how low were previous estimates of money lost to the county by CLT’s appraisals.
That was money that should have gone to the county’s public schools; one could only speculate on how much of the money the county had lost to DuPont Company was instead transferred as dividends to DuPont family members and ended up written off their taxes as donations to such exclusive non-profit private schools in chateau country as Tower Hill, Tatnell, Friends, and St. Andrew’s, all endowed by the DuPonts. New Castles public schools, meanwhile, remained underfinanced, its children culturally deprived in comparison to those offspring of the rich who enjoyed the high, better financed standards a Tower Hill provided.
In a country like America, where the people put such a high value on education as a means to social mobility, a higher income and fulfillment of the American dream, such an inequitable tax system was a subtle but painful insult to the common citizen’s striving for human dignity. Yet there were academicians in such corporate-endowed universities as Harvard or Yale, or even the private prep schools like Philips Andover or Exeter and, yes, even such exclusive primary schools as Tower Hill, who taught only the American dream, and not its reality. It was not surprising, then, that most young DuPonts so easily took on the ideology of individual self-reliance of their parents, and, often, of their parents before them. Nor that they, in contradiction to that reality of their own lives, could embrace the ideology’s attending belief that there are no classes in America, only individuals. Within that context, the average American was soon reduced, at worst, to the image of a ne’er do well, or, at best, the pitied object of noblesse oblige. More often than not, the idealized American was the solid respectable image of one’s upper class father and mother, assisted, companioned, and ultimately awed by a retinue of upper middle-class professionals who dreamed of sharing such grace that comes from inherited wealth and raw power. That such elitism undermined respect for democracy goes without saying, proving that the children of the rich, too, could be culturally deprived.
Undaunted by such concerns, Mel Slawik moved forward with a $50,000 review of CLT’s assessments by a team of professional appraisers. Holcomb and Salter Realty of New Castle handled apartment complexes, tract homes and estates in chateau country. The review concluded gross under-assessments were evident in most cases, averaging 21 percent below fair value. Henry E.I. DuPonts estate, for example, was assessed at $475,800, a full $100,000 below what it should have been. The industrial and commercial sites were checked by John Fortner of Appraisal Consultants, the author of the Holotron appraisal. DuPont’s past was literally catching up with the company. Fortner did lower assessments for DuPont’s Brandywine Building, Country Club, Chestnut Rise Laboratory and Edgemoor Plant, but still found 43 under-assessments by CLT of the 60 properties checked, including Du Pont’s Louvier’s Building in downtown Wilmington. Slawik estimated at least 49 million would be added to the county’s assessment rolls, producing additional school and county revenues of about $120,000 a year. Prompted by Slawik’s review, Wilmington Mayor Thomas Maloney asked the city council for power to require all current exempt properties to reapply for exemption. Meanwhile, Slawik had pressed ahead with his plan to tax industrial and commercial fixtures. It seemed he was about to legally change the power base in Delaware and shift more wealth into the public sector. In 1973, also, a proposal for a 6200-person housing complex for a corridor of Christiana was adopted by the Republican-dominated county council. Another proposal for a shopping center in Greenville made by Daniel C. Lickle was unanimously rejected, 7 to 0. The defeat to Lickle, who is a DuPont in-law (he is married to Nancy “Missy” Kitchell, daughter of William Kitchill and Irene Carpenter and niece of ultra-conservative “Bobby” Carpenter and second cousin of former DuPont chairman Lammot DuPont Copeland, Sr.), seemed to signal the beginning of a new era.
To the DuPonts, things were clearly getting out of control. But to smiling Mel Slawik, the will of the people was finally having its day. He was happily riding the crest of that will, at the peak of his power. He had no premonition of his coming fall.
Robert Vesco’s illegal contributions to the president had been dragged into the glare of the media along with his embezzlement of some $200 million from his holding company, International Controls Corporation. This particularly embarrassed some members of the family who had been unable to restrain their lust for new capital and embraced Vesco in 1966 as a partner, then succumbed to his “fan dance,” and allowed him to buy 80 percent of All-American Engineering, the aviation engineering firm originally founded by their most famous aviator, Richard C. DuPont. To some, it was perhaps fortunate that the family hero of World War II had not lived to see their shame. Now it was left to his son, Richard C. du Pont, Jr., to salve the wounds inflicted by Vesco’s pilferage and snap the reins to prod the firm beyond its recent losses. In October, “Kippy” had done just that at All-American’s annual meeting of just 30 shareholders. “Once again Kippy has topped the ballot,” one shareholder commented. “He has a little clique that works for him, very well.” 50
Kippy’s vision, however, extended beyond aviation those days. Like many in his family, some of his hopes centered on Christiana Securities, the family holding company that controlled Du Pont. Christianas leaders, Irénée and Edward du Pont, were facing stiff resistance from a small group of Du Pont shareholders who had challenged Christianas petition for dissolution before the SEC at almost the last moment, forcing more public hearings to be scheduled. It was these hearings, subject to the “wild card” of media coverage and political whim, that would determine if Richards holdings in Christiana, like those of other relatives’, could be exchanged for Du Pont without his having to endure either a large tax bite or a sharp plunge in the value of Du Pont’s stock. The latter would undoubtedly occur if the family tried to unload its huge $1.7 billion holding on the open market. That was why the deal struck between Christiana’s directors and Du Pont’s officers was so crucial. Christiana holdings would shield them from the dangers of the public treasury and marketplace and keep their stock within the company, where their 23 percent holding would allow them to retain control. Then, if they wished, individual family members would be freer to unload their stock as they pleased. Diversification of investment beyond chemicals certainly seemed in order, at least for some like Richard who had other immediate concerns. Many in the family were hinting that oil stocks were the answer. Their value was sure to rise with earnings as OPEC provided a great leap in prices.
And then there was, as always, the trusted boon of real estate. Richard had already taken a small step in this direction—a minor financial interest in a condominium project in the lucrative Rockford Park Area of Wilmington, to be named Bancroft Mills. 51 There was only one serious problem for Richard’s designs, as for those of real estate speculators J. Bruce Bredin of Bredin Realty and W. W. Laird of Rockland Corporation, two family members with sterling entrepreneurial spirits. And that problem was named Mel Slawik.
Slawik’s investigation into New Castle County’s tax base had stirred ripples of concern that were now widening throughout the state. Delaware had faced a fiscal crisis in 1971 and Governor Peterson had met it with budget cuts and taxes that put the onus on the consumer, who paid $14 million more each year in taxes and for items such as gasoline; corporations and wealthy individuals, on the other hand, paid only $4.4 million more in income taxes. 52 In 1972, according to Delaware’s Controller General, seven Delaware banks, including the Du Ponts’ Delaware Trust and Farmers Bank, had paid no 1972 income tax by May, 1972, and Wilmington Trust and Bank of Delaware, with combined net profits exceeding $13.5 million, paid only $635,000, less than 5 percent. Some residents, including Citizens Coalition for Tax Reforms co-chairman Ted Keller, began to call for an end to the states exempting of banks from paying taxes on income from dividends, certain classes of interest, and capital gains from intangibles, all important sources of bank profits. 53
To answer the growing concern, a Delaware Tax Study Committee was formed headed by two leading Democrats, former Governor Elbert Carvel and Senator John Williams. Both men, however, had shown partiality toward the DuPonts in the past. Williams had introduced the federal legislation that saved the DuPonts a fortune in federal taxes during the GM divestiture. And Carvel, whose first term (1949-53) as governor was marked by anti-DuPont opinions, had long since mellowed during his second term (1961-65), appointing H. B. DuPont to the state planning council, Mrs. A. Felix DuPont to the ad hoc goals committee, R.R.M. (Bobby) Carpenter, Jr., to the racing commission, and two other Du Pont lieutenants to the highway commission and his Administration of Justice. In fact, Carvel’s administrations had helped cause Delaware’s fiscal crisis. H.B. Du Pont’s influence in the planning council did much to help keep non-DuPont heavy industry out of the state. The reason was blatantly political: the Du Ponts did not want the growth of blue-collar industries that could undermine Du Pont’s control of state politics through its own white-collar bureaucracy and research force. But as a result, an important source of revenue was lost to the state treasury. As an alternative source of funds, Delaware followed the fiscal philosophy of a sister state, New York, then under the governorship of Nelson Rockefeller, and had begun mortgaging the state’s future to bankers and private bond buyers, by 1963 raising its long-term state and local outstanding debt to the second highest in the nation. Within four years, further borrowing had given Delaware twice the debt of the average state in the union. 54 The DuPont family’s traditional fear of federal statutory and regulatory involvement in their companies and estates also levied a heavy toll on Delaware’s ability to get its fair share of the federal treasury; its representatives in Congress were blatantly lackadaisical in seeking federal assistance. This pattern of behavior goes back to the DuPonts’ hostility to the New Deal of President Franklin Roosevelt. In 1942, for example, Delaware received less federal money than any other state; the same was true for 1953 and 1957; all three years were chosen as representative by a U.S. Department of Commerce study of intergovernmental revenues. By 1967, Delaware was still below the national $77.68 per capita average with $72.87. 55 Clearly, Elbert Carvel was not part of the solution, but part of the problem.
Former DuPont executive Russell Peterson only made the problem worse. Delaware’s share of federal revenues declined still further during his first year in office, slipping to $78 per person as compared to the $100 per capita national average; by 1970, when Pete DuPont was elected the state’s sole representative in Congress and William Roth was elected to the U.S. Senate, Delaware lagged behind even further in revenue-sharing, getting only $93 compared to the $119 average among states. 56 Peterson continued the Du Pont’s traditional opposition to new blue-collar industries coming into the state, and brooked no opposition. When Emily Womack won the Democratic Party’s only statewide office in 1970 as a state treasurer, replacing ex-DuPont employee Daniel Ross, she soon found herself stripped of most of her functions by Peterson’s newly reorganized state government. Under the governor’s new “streamlined” executive, most of her power went to a new position, appointed by the governor—the director of the Division of the Treasury, for which Peterson chose Daniel Ross. Bank borrowing continued. In June 1971, Peterson was forced to call in an emergency session of the legislature and tell them that the state faced a $30 million deficit.
New Castle County Executive Slawik’s approach, therefore, represented a new local alternative source of revenues for needed public services. As the second most powerful officeholder in the state, Slawik, with a mostly blue-collar constituency, also represented a serious threat to not only the Du Ponts’ traditional rule over Delaware but also their plans for its future as a white-collar based headquarters for corporations and banks. Especially banks, if the family was to move successfully into finance after Christiana Securities’ dissolution freed it of its 180-year-old industrial ties. In January, 1974, the president of Christiana Securities, Irénée du Pont, Jr., was named chairman of Delaware’s State Chamber of Commerce. It was a measure of how much the family leaders saw Delaware as key to the clan’s future. Only a year before, Irénée had underscored his commitment to preserving chateau country from changes. “I want to make sure this area remains a nice place to live,” he said, “even if I do nothing else in my life.” 57
With his new position, Irénée was indisputably the most powerful businessman in the state. He was already chairman of the Greater Wilmington Development Council which had already altered the face of Delaware’s only real city. Residents who also wanted the city to remain a nice place to live but stood in the way of G.W.D.C’s plans for 1-95 had been evicted. A similar fate met residents who had once lived where now a widened Delaware Ave. hosts a park, suitably named after GWDC’s former chairman, Henry B. DuPont. Throughout the Sixties and early Seventies, GWDC, with its 66 board members representing Wilmington’s major industries and banks as well as the Roman Catholic Diocese and University of Delaware, had been the states powerhouse. Its executive vice president, Peter Larson, was Wilmington’s city planner when most of the major urban renewal programs were formulated. Former Mayor Haskell’s top assistant, Allan Rusten, had come from GWDC. On a state level, GWDC was behind the establishment of planning departments in both the county and state governments, as well as the Delaware Authority for Regional Transit. The chairman of one of G.W.D.C’s most active committees, Russell Peterson, even became governor. Yet, for all its power, and probably because of it, the GWDC refused to make policy suggestions on such crucial social issues as school desegregation.
The election of Democrats in 1972 to the top offices in Wilmington, New Castle County and the state shook the Republican establishment. Although GWDC still provided Mayor Thomas Malooney with his city planner, Malooney needed to assert his independence from the Du Ponts and chose as a developer for the city’s planned civic center a company which was outside GWDC’s charmed circle. Downtown Wilmington Inc., the GWDC subsidiary that had pushed the project along as the city’s paid coordinator, lost its city funding and was obliged to finance the work itself in order to keep its coordinating role. The project, meanwhile, remained incomplete, with blocks of downtown real estate still empty. Then came Slawik’s tax reassessment throughout the county, inspiring Malooney to seek a reexamination of the city’s tax exemptions as well. The DuPonts, led by Irénée, looked upon these moves as dangerous intrusions into their traditional prerogatives; if “they”were to be stopped, it would have to start with Slawik. Since he enjoyed popularity, loyalty and power on the county level, the assault would have to be made from above, on the state or federal level.
Irénée du Pont’s assumption of the top office in the State Chamber of Commerce reflected this. His title, chairman, was a new one, part of the Chamber’s reorganization along the lines of corporate management, with vice-chairmen and a president as well; the new treasurer, significantly, was from the DuPont’s own bank, Wilmington Trust. Under Irénée’s leadership, the Chamber began a concerted lobbying effort at the state capital in Dover to challenge New Castle’s County Executive.
Slawik soon found himself confronted on a number of fronts. Questions were raised by the News-Journal papers about Slawik’s relationship with contractor Mario Capano. The News-Journal emphasized the short time it took the county planning department to approve Capano’s housing project, Taylortowne, and pointed to his friendship with Slawik and his remodeling of Slawik’s home.
The remodeling, however, was no gift; Slawik had paid for it. Capano, a successful businessman who had been in the construction business for a decade, did give his friend a break, charging Slawik what it cost. But it was not free.
Nor were the 39 days it took the county planning department to approve Capano’s project so quick when one considered the five months Capano had spent with county engineers and planners perfecting his plan. It was a wise investment in time, considering the Transportation Department’s previous concern about traffic congestion in the area. Nor was Taylortowne a surprise to the council members. It had been talked about for months and the area had already been slated for development by the Republicans. Nor did Slawik take part in the final approval by the council. As County Executive, he did not have a vote on the council; in fact, he was not even present at the meeting. Nor did his party have control over the council. The Republicans did, and it was a Republican majority council that approved Capano’s project.
Yet, because DuPont in-law Lickle’s proposal for a shopping center was rejected by the council at the same meetings, and the Transportation Department did not oppose Capano’s well-prepared plan, the News-Journal hinted at corruption and pointed at Slawik.
County officials were surprised when the State Attorney General’s office announced it had actually begun an investigation. It seemed too blatantly political to be taken seriously. Slawik had long been at odds with Governor Sherman Tribbitt and had fought the DuPont old guard in the state’s Democratic Party. This cabal was led by former nominee for governor John H.T. McConnell and lawyer William Potter. McConnell, who married William DuPont’s daughter, Jean, had headed up the Delaware River and Bay Authority and the State Highway Department, besides being president of Delaware Trust, an executive of Hercules Chemicals, and president of GWDC. Potter had also married a DuPont, Alice Harvey, granddaughter of Victor DuPont and second cousin to H. B. DuPont’s wife, Emily. He was president of the Copeland-Andelot Foundation, sharing trusteeship with Henry B. DuPont, Hugh R. Sharp, Jr., Lammot DuPont Copeland, Jr. and Alfred E. Bissell. Potter, 69, the senior partner of one of the DuPonts’ favorite law firms, Potter, Anderson and Corroon, had for years represented Delaware on the Democratic National Committee. He also represented Copeland Jr. during his bankruptcy negotiations and, before that, had interceded with former House Speaker Sherman Tribbitt to push through the bill that allowed the Du Pont family to save about $48 million in state taxes during Christiana Securities and Du Pont’s divestiture of GM stock.
But the investigation was serious, indeed. After all the fanfare given it by the News-Journal, its exoneration of Slawik seemed an anticlimax.
No sooner had the State Attorney General dropped this investigation than a new one was launched, this time on the federal level. It was ordered by the local U.S. Attorney, Ralph Keil, who had been appointed by Richard Nixon at the behest of DuPont in-law Senator William Roth. Soon FBI agents were looking into every aspect of Slawik’s life. At the same time, Irénée had marshalled lawyers from the State Chamber of Commerce against Slawik’s plan to tax industrial and commercial fixtures as mandated by the state constitution. Ordered by Irving Shapiro and Irénée, DuPont Company attorneys also lent their talents to the cause, drafting a bill that would, according to Bruce Ralston, the Chamber’s director of governmental affairs, modify the impact of “the State Supreme Court’s decision through legislation.” 58 The Chamber kept the drafting session secret, however, because of the state-wide elections. “The taxation of
fixtures is an immensely complicated issue,” Ralston said, “and we would have been in a real donnybrook if it had become an election issue.” 59
His Democratic opponent, University of Delaware professor James Soles, did criticize Pete for using his franking privilege with the federal mails right up until September, but federal law allows the privilege to extend to a month before an election. Only when Soles raised the question of secret contributions to Pete’s first campaign for Congress in 1970 did the state awake from its slumber. After the 1970 race, according to Soles, DuPont was quoted as saying if everything were known about the finances of the campaign, he and every other politician would have to go to jail. 61 Soles challenged DuPont to prove his campaign finances were aboveboard.
Pete balked. In a curious twist of the law’s intent, Pete claimed that the old Corrupt Practices Act then in effect kept him from knowing or making public the details of his 1970 campaign finances. The Nader Report on Delaware, however, charged that “in the 1970 Congressional race, Pierre S. DuPont IV intentionally remained ignorant of the exact amount raised by his campaign committees to take advantage of a loophole in the federal law.… A candidate need only report monies raised directly for him, or funds which he knew about. Therefore, a candidate can purposely remain ignorant of money raised for him by committees and none of that money need be reported anywhere.” 62
Pete’s 1970 campaign was financed by a number of such committees headed by his campaign manager, Glenn Kenton, his campaign treasurer, Henry H. Silliman, Jr. (Pete’s cousin and Irénée DuPont, Jr.’s nephew) and his general campaign chairman, Edmund Carpenter II, partner of the powerful Richards, Layton and Finger law firm, and one of two sons of former DuPont chairman Walter Carpenter. Edmund is well connected. He is married to E. Francis Du Pont’s daughter, F. Carroll (she had been married to a News-Journal reporter and Du Pont family author John Gates). He is also brother-in-law of Henry B. Du Pont’s daughter, E. Murton DuPont, cousin of Bobby Carpenter, and second cousin of Nancy, wife of Daniel Lickle of respected shopping center fame.
Of the three, 53-year-old Carpenter was the obvious political heavyweight. Kenton, a tall, shrewd and ambitious young man, had risen on Pete’s star. Silliman’s claim to fame, besides his $100,000 18-acre estate, was his mother’s large holdings in Christiana Securities; as an “inner core” family member, he could be relied upon to keep a tight lip about the books he kept. Carpenter, on the other hand, was well known in national Republican politics, almost as much as William Potter was in Democratic circles. Edmund’s $2,500 donation to CREEP was buttressed by another $27,000 donated by his father and brother W. Sam Carpenter. He had also chaired Delaware Citizens for Nixon-Agnew in 1968. As a fellow of the American Bar Association, former chairman of the state commission to reform jury service, past deputy attorney general of Delaware, and member of the Governor’s Crime Commission and the Delaware Law Enforcement and Planning Agency, Carpenter had a reputation that the Du Ponts and many Delawareans considered unimpeachable.
It was probably for that reason that Carpenter, the titular finance chairman, and not Silliman, the actual treasurer, was given custody of the records of secret contributions after the 1970 campaign was over. Challenged by Soles four years later to produce the books, Pete replied that the old Corrupt Practices law required his keeping campaign financial records for only two years. Some had probably been thrown out, he said, “in the normal course of housecleaning.” 63
Soles refused to be put off. Pete had made a big deal out of his limiting contributions to $100, Soles argued, but the Congressman enjoyed the advantage of incumbency only because of a campaign based on unknown financing practices of four years earlier. If Pete had already been elected by big money, it would be hard to believe his newfound populist line was not merely an exploitation of Watergate and the public's hope for a restored political integrity.
DuPont now fired back that Soles was “foolish and desperate.” He attempted to demean the issue by calling it “silly,” but the heat of public pressure would not fade. He acted as if insulted, protesting that “There was nothing illegal about the 1970 campaign.” 64
Perhaps, but Soles emphasized that the voter was being asked to take Pete’s word for it, not exactly an uncompromised source. When Soles’s charges made page one headlines on October 28, Pete called a press conference that morning and announced he was reversing his earlier refusal to open the books. It was “the ultimate triumph of rhetoric over substance,” he argued, but conceded that he needed to maintain the confidence of voters. He admitted that about $150,000 had been raised in 1970, and although the records might be incomplete, the list of contributors could be “reconstructed” from them. Carpenter promised reporters that he would disclose the records later in the day.
He did not. Instead, that afternoon Carpenter admitted that the records had been burned.
How did that happen? Carpenter concluded that he had failed to circle them as files over three years old that were to be kept. He hadn’t realized their fate until his personal secretary had informed him. No, he did not keep the records at his office, but in his home. He explained that it was possible that they were burned by his household staff during the spring. It was just as Pete had foreseen earlier: destroyed “in the normal course of housecleaning.”
Soles was not about to challenge Carpenter’s integrity. He was “a man of principle,” he said of the powerful attorney, then asked, “Do you really think a candidate does not keep a list of donors and how much they give?” 65 There were, of course, other possible sources, including bank records of the campaign and donors or records of companies that did business with the campaign. But Carpenter claimed to have no knowledge of other records and no authority to look into the matter.
A list of donors was compiled by Pete from “general recollection.” His father, Pierre S. du Pont III, gave over $3000, as did his uncle, Reynolds DuPont. Elise, his wife, gave from $3,000 to $5,000, and the Republican Boosters Club gave $10,000. Smaller donations were made by Irénée DuPont, Jr., Richard S. DuPont, J. Bruce Bredin, Richard C. DuPont, Edward B. DuPont, and his Texan brother-in-law Baron Kidd.
Many of these had been individually contacted by Carpenter and Kenton after Carpenter threw a quiet luncheon for them at Hotel DuPont’s Georgian Room in the fall of 1969.
It may have been his greatest mistake. In October, 1974, when his reportage and anti-DuPont coverage were at their heady zenith, the Farmers Bank served notice it would not renew the State News’s loan unless a 10.5 to 12 percent interest was paid instead of the 7.5 per cent it had originally agreed to. Although the State of Delaware owned 49.3 percent of the stock of Farmers Bank, a system of scaled voting left the Tribbit government with little say on the board of directors; the real power lay with directors like chairman O.H.R. Baldwin, a director of E.I. DuPont’s Continental American Life Insurance Company, Mulco Products, Wilmington Medical Center and Rollins Leasing; Alfred E. Bissell, chairman of Delaware Trust and partner of Laird, Bissell & Meeds, a trustee of J. Bruce Bredin’s foundation and husband of Eugene du Pont, Jr.’s niece, Julia du Pont Andrews; J.R. Johnson, director of Hercules Chemicals; J.R. Horsey of the trust department of Wilmington Trust (he was also attorney for the state House of Representatives); and H.K. Dugdale and Alton F. Hillis, directors of Artisans’ Savings Bank, in which J. Bruce Bredin, Irénée DuPont’s brother-in-law, had a large interest and was also a director. Liberal Democrats such as Alexis DuPont Bayard and the late James G. Smith joined the Townsends in presenting another view, but Dixiecrats like former Lt. Governor Eugene Bookhammer undermined any solid front by the party of Jefferson.
Smyth remained uncowed. On October 27 he announced the State News was endorsing Democrat James Soles for Congress; Pete DuPont, he editorialized, “should be removed from office on November 5. The trouble with Pierre DuPont is that he’s slippery, clever and ambitious at a time when the country needs members of Congress who are forthright, thoughtful and dedicated. DuPont has developed an annoying habit. When questioned about an issue on which he should take a stand, DuPont politely refuses to do so.… That’s clever and slippery, and the mark of a too-ambitious man.… When you cut through the rhetoric and get to the gut issues, you find that Pierre DuPont has been a leader who doesn’t lead, a talker who doesn’t act, a profile without courage.” 68 Smyth criticized DuPont for standing by “a corrupt president” until “in the end, even the nations number one Nixon puppet, Charles Sandman of New Jersey, deserted the Good Ship Corruption ahead of DuPont.” He scored DuPont’s “vacillation” on Nelson Rockefeller’s nomination for the vice-presidency. “If DuPont stays in character, Rockefeller’s brothers will come out against him before DuPont will. … To DuPont, ‘election reform’ is a program which allows him to spend two-and-a-half times as much money as his challenger.” James Soles, “an obscure professor,” on the other hand, “seems to know what he’s talking about, and he seems willing to honestly share his opinions with Delawareans.”
In that same issue, Smyth also began serializing a 600-page unflattering biography of the DuPont family and history of DuPont Company, DuPont: Behind the Nylon Curtain. The series ran for six Sundays, making the exposé the states top-selling book and one of the DuPonts’ biggest headaches. The reaction from DuPont loyalists was immediate. Jack Costello, a white-haired 42-year-old former State News columnist fired by Smyth, dispatched a letter the next day suggesting Smyth delay the serialization until after the election and launch an investigation of the author. Smyth, citing his contract with the publisher, Prentice-Hall, calling for a certain number of articles before the official November 14 publication date, refused, but printed Costello’s letter in the State News when the second installment appeared on the front page on November 3, just two days before the election. Neither installment mentioned the Congressman. But by then, Costello had already filed charges against Smyth before the Delaware News Council, accusing the editor of attempting to influence Congressman DuPont’s chances for re-election.
The Council decided to meet with Costello on Halloween night. Smyth declined attending. “I have a feeling they’re going to be getting into a question of prior censorship, and I don’t want to be party to that.” But he found the date “entirely appropriate.” “The recklessness of his [Costello’s] witch hunting and ghost-visions make the timing perfect.” 69
It took the News Council over three months to clear the State News of bias, and then only after its consultant, Robert Shaw, manager of the Minnesota Press Council, warned the Delaware Council that their consideration of Costello’s demand that they request Smyth to suppress the serialization even temporarily until after the DuPont-Soles contest was over was a case of prior restraint endangering the freedom of the press. By then, some Council members’ efforts “to prevent a similar case of ‘poor taste’” in the future had come to naught.
Or almost. DuPont, for his part, hastily called a final press conference before the election. He disclaimed any concern about the book and publicly disassociated himself from Costello’s effort to halt the serialization or his charges before the News Council. He did make Smyth’s editorials the focus of his anger, however, and singled out Smyth and news editor Charles Elliott for a “Tantrum of personal attacks” and “petulant raging against my name, my heritage and my family.” Du Pont was furious at Elliott’s poor rating of the Congressman’s press party at his “Patterns” mansion and description of the “tent-like” dress his wife, Elise du Pont, was wearing. “He comes to my house, drinks my whiskey and insults my wife,” du Pont said of Elliott. The Delaware State News, despite admittedly fair news coverage edited by Elliott, had fallen “far below the standards of decent journalism.” But he had “no strong feelings” about the book, despite Costello’s accusations. 70
Then it was revealed that DuPont had met and talked privately with Costello on October 24, three days before the serialization began. Elliott knew this because he had seen them talking at an annual high school journalists workshop at Seaford High School on that date. 71 Du Pont and Costello admitted talking, but denied they discussed Costello’s complaint. “I’ve never discussed that question with Jack,” said DuPont. “I don’t even recall it.” 72 Costello charged that Elliott had claimed he had a “secret” meeting with Du Pont rather than an open workshop, but only conceded that he spoke to DuPont in his capacity as a journalist. “Any newsman worth a damn will talk to the state’s lone congressman whenever the opportunity arises,” he wrote, and called Elliott’s editorial about their private conversation “premeditated libel.” He insisted that “the Seaford meeting, coming as it did, on Thursday, October 24, was three days before the first excerpt of the book was printed and therefore I had no knowledge of its contents until I read it the following Saturday.” 73
Yet, when informed in 1979 that DuPont had been subpoenaed by the author to answer questions about the meeting, Costello, a conservative, confessed discussing the book with DuPont and knowing enough about its contents to denounce its author as a “radical.” “I simply stated it the way I saw it,” he told the State News. “They ran this radical’s book right at the moment he was running [for re-election] and I thought it was a coincidence. As I recall, he [DuPont] said he thought it was, too.” 74 But Costello maintained it was he, not DuPont, who brought the book up, even though he had earlier stated in 1974 he had not had knowledge of its contents at the time. Members of both Pierre’s family and DuPont Company’s hierarchy, on the other hand, did, thanks to their access to a leaked manuscript. Costello, rather, was peeved at DuPont for publicly brushing off Costello’s efforts on Pete’s behalf after it had caused such flack. “I took exception to that,” he recalled. “I thought he [DuPont] could have said something a little more weighty about it.” 75 He denied Pete had pressured him, but then Pete needn’t have; Costello was only too eager to find some means of service. Later, backed by local Republicans, Costello launched his own Dover weekly, News Week, billed as “Dover’s oldest weekly” in 1979. It was five years old.
The election of 1974 did not help the DuPonts in Dover. The number of DuPont affiliated memberships in the legislature dropped from 11 to 5 in the House and from 5 to 4 in the Senate. Among those defeated was Reynolds DuPont’s son, Thomas (who has since moved to Florida). Reynolds did not choose to run for re-election, but he did see his nephew, Pete, get re-elected to Congress, a necessary victory if the young scion was to fulfill his ambition to run for governor in 1976, as predicted in the exposé biography. 76 Pete never admitted hearing of the book or its author before 1974, although federal court documents show the author requested interviews in 1973 of both him and Reynolds, and that Reynolds, instead of replying, contacted DuPont Company headquarters. 77 For there, on the 9th floor, a more serious and ultimately successful campaign than Costello’s had been launched against the book.
It began as a secret investigation of the author, initiated when Irénée DuPont, Jr., was contacted in 1973 and asked to submit to an interview. 78 His decline was actually drafted by company officials. At the same time, the company found through the services of the Eleutherian Mills-Hagley Historical Library an informant by the name of Marc Duke who had been an acquaintance of the author and shared with him a common literary agent, Oscar Collier. 79
In June, 1974, DuPont Chairman Irving Shapiro was alerted that the book was to be published that fall. Du Pont’s officials then sought backgrounds on the members of the board of directors of the book’s publisher, Prentice-Hall, and “to reach out,” if necessary, “through other sources.” 80 Public Relations Director Thomas Stephenson wrote a memo: “Let’s arrange to obtain and review a copy as soon as possible.” 81 They did, within 24 hours, in fact. A Prentice-Hall salesman recalled receiving an “unorthodox” order 82 to drop a copy of the original unedited manuscript to Wilmington’s Greenwood bookstore, “but what’s a poor salesman to do when his boss tells him to do something?” 83 The bookstore had once been owned by William W. Laird, Jr., a cousin of Pete DuPont and uncle of Pete’s future lieutenant in state government, Nathan Hayward III. A director of DuPont, Laird was one of the most powerful members of the DuPont family, a heavy speculator in New Castle County real estate and a large investor in E. I. DuPont’s Sigma Trust Shares mutual funds. He was also a director of the holding companies, Christiana Securities and Wilmington Trust. In the last few years, the bookstore’s ownership had passed to Colwyn Krussman, whose father was a DuPont employee. It wasn’t long before the manuscript found its way into the hands of another DuPont family member and real estate speculator, J. Bruce Bredin.
Bredin, the dapper husband of Octavia DuPont, wore many hats over the years. Since leaving DuPont Company in 1950 and later graduating to the board of directors, he had concentrated on real estate, the Artisans Savings Bank, Canadian companies (Terminal Warehouse, Ltd., and Baymond Corporation, in association with Reynolds DuPont) and had been vice-president of a secret DuPont family front for investments around the world (including Germany) named Penas de Hicacos, based in Cuba until General Batista’s fall to Castro’s revolution. Because he had financed many scientific expeditions for the Smithsonian to tropical colonies like the Belgian Congo (1955) and the Caribbean isles, often using his own yacht, he was named a Fellow by the institution; similar bequests by his tax-free foundation won him a seat on the board of trustees of the University of Delaware. But if there was anything that marked Bruce Bredin it was his loyalty to his adopted clan. It was Bredin who allowed his eight month-old baby girl, Aletta, to be used in a DuPont publicity stunt, photographed in her crib with the caption “Fingered by Uncle Sam” in an attempt to discredit the federal government’s GM divestiture suit.
Bredin’s reaction to the manuscript of Behind the Nylon Curtain was predictable: after a cursory review, he decided it was “unfriendly” 84 and delivered it to the Public Affairs Department of DuPont, where Vice-President Thomas Stephenson sent it on to Irénée DuPont, Jr., Bredin’s brother-in-law and fellow stockholder of Christiana Securities and director of GWDC and Wilmington Trust. DuPont’s lawyers also gave it a closer inspection and concluded there was nothing the company could do at that time; no immediate action was recommended. 85 Within a month, however, word came to DuPont through its informer, Marc Duke, that the book had been selected for distribution by a subsidiary of Book-of-the-Month Club, Fortune Book Club. 86 This meant the book would be widely distributed throughout the nation. Irénée and A. Felix DuPont noted “concern” 87 and, after Irénée left the country on an inspection of DuPont operations in Latin America, the Public Affairs Department swung into action, reversing its earlier wait-and-see strategy. Phone calls were made—not to Prentice-Hall, the publisher, as would be expected if there were to be demands for “corrections” in the text—but instead to an old contact, Robert Lubar of Time, Inc. (whose Fortune magazine DuPont mistakenly believed still controlled Fortune Book Club) and then to Book-of-the-Month Club warning that the manuscript had been reviewed around Wilmington by “family members and lawyers” and been found “actionable” and “scurrilous.” 88 Book-of-the Month Club officials quickly reversed the earlier selection by its editors, while DuPont over the phone denied Prentice-Hall’s accusations that the chemical giant had threatened litigation. After a hasty trip by DuPont lawyers to New York to confer with BOMC officials the following week, this denial was finally put in writing in a letter to Prentice- Hall, although it did not rule out a suit “if and when the book is published.” 89
The ruse apparently worked; a “chill” of the First Amendment’s freedom of press and speech settled in. Without informing the author of DuPont’s interference for over three months, Prentice-Hall secretly cut the print run by one-third so that the book could “not price profitably according to any conceivable formula” 90 and slashed the advertising budget in half. When rave reviews and the Delaware State News serialization (arranged by the author with a reluctant Prentice-Hall) nevertheless stimulated such sales that the first print run of 10,000 copies was virtually sold out within six weeks, Prentice-Hall’s delay in printing another 3,000 copies allowed many orders to go unfulfilled for weeks. Meanwhile, according to at least two sources from within the company, DuPont sent an official with a helper to buy up and remove copies from bookstores.
It was all too much for either the book’s editor, Bram Cavin, or Prentice-Hall’s own legal counsel, William Daly, to take, and they bolted, cooperating in an investigation by the New York Times of DuPont’s interference. The Times’s subsequent article, “Club Withdraws Book on Du Ponts,” in January, 1975, again stimulated orders that went unfulfilled, some in Delaware, until as late as March; by that time interest in the unavailable book had waned and Prentice-Hall refused to print any further copies, spend any more money on advertising, or to return the rights to the book to the author. (Although the book was quietly categorized as “out of print” by Prentice-Hall in 1976, rights were not formally returned in writing until legal pressure was exerted by the author in 1982.) DuPont, meanwhile, encouraged unfavorable reviews by circulating an internal company critique of the book among sympathetic media outlets; at least in one case, however, DuPont told the reviewers not to give Du Pont any public attribution. DuPont’s opinions then ended up in reviews with readers unaware of DuPont’s hand behind the scenes.
With the New York Times (which had printed a rave review of the book, calling it “something of a miracle,” 91 ) DuPont took a hard line. It launched an investigation of the reviewer, Robert Sherrill, similar to the one it had earlier undertaken of the author. 92 It also pressured the Times directly, requesting a meeting with Sunday editor Max Frankel not only to detail its distress, but to discuss, in broader context, the problems of “reviewing books about business.” 93 Frankel asked DuPont to “not wait for a visit here” and to explain “what problems” DuPont exactly had in mind first to “help me in terms of sharing your thoughts with my colleagues.” 94 DuPont then responded that “it would be a futile exercise to confront the reviewer with a list of the errors and distortions in his review or to debate the merits of the book,” and offered copies of two unfavorable reviews by the Philadelphia Inquirer and the former Philadelphia bureau of the Wall Street Journal as substitutes, commenting that “a major problem with reviews of books about business is that the reviewers often have little or no knowledge of the way business enterprises actually function, or have an insurmountable bias against business.” 95 DuPont chose not to pursue a meeting, and whether the Times accepted DuPont’s charge that most reviewers of books on corporations were either ignorant or biased, Frankel in his reply denied as “untrue” the Wall Street Journal reviewer’s claim that the book was “merely a rehash and amalgam of a previous published work.” But he did ominously concede that Du Pont had prompted the Times to “think some more” on “the expertise of our reviews of business books.” 96
DuPont was pleased. “We achieved partial success,” noted Public Relations Director Stephenson. “This is as good as we could have expected,” agreed DuPont lawyer Richard E. Manning. Stephenson would eventually be subpoenaed for questioning by the author during his federal suit against DuPont for inducing breach of contract and Prentice-Hall for breach of contract. It would ultimately take eight years since the book was first published for the author to have his day in court (and, then, deprived of a jury because of a technical omission by the author’s first attorney, William Standard of Rabinowitz, Boudin & Standard of New York; Standard was subsequently replaced by Ronald De Petris, former U.S. Assistant District Attorney, who was well qualified for the case: he had headed up the Justice Department’s Fraud and Criminal Division in New York), and for Prentice-Hall to be convicted of killing off the book for “no legitimate business reason.” But by then the book was quite dead, if not forgotten, and Prentice-Hall had fired for “non-productivity” the book’s editor, Bram Cavin, who subsequently left publishing altogether in disgust. DuPont, on the other hand, was let off the hook by a conservative Nixon appointee, Federal Judge Charles Brieant, its admitted attempt to limit the book’s distribution with references to Book-of-the-Month Club about “lawyers” and “actionable” excused as an exercise of DuPont’s First Amendment right to freedom of speech. Brieant’s decision on DuPont, by removing the argued cause (Du Pont’s phone calls) behind the effect (Book-of-the-Month Club’s cancellation and Prentice-Hall’s cutbacks in distribution and advertising) and his expressed sympathy with DuPont’s reaction to such an exposé, opened the way for Prentice-Hall to attempt a reversal with the one court in the entire country that the New York-based publishing industry considers the most important to its interests: the United States Court of Appeals for the Second Circuit, which includes New York.
In 1983, almost a year after hearing oral arguments, a federal appellate panel of three conservative judges appointed by recent Republican presidents reversed even Prentice Hall’s conviction. When it came to Brieant’s letting off DuPont, they agreed. Then, using that decision, the judges held that no motive had been proven for Prentice-Hall’s action. Brieant, however, had held that his inability to discover Prentice-Hall’s motives for acting as it did did not negate the hard facts of what it still did: kill the book off. The appeals judges arbitrarily chose to ignore that point and simply asserted that it had not been proven that Prentice-Hall had shown bad faith in its business judgment, and awarded the decision to the publisher, laying aside the book’s promising sales record and the expert testimony by simply branding the book “a Marxist version of history” that “would not appeal to mainstream readers” but only a few (“presumably Marxists,” as Nation magazine chided the judges).[Yep,a great example of 'free markets' that the pond scum is always yacking about DC]
The decision was, nevertheless, a testament to just how far the country had slipped since 1974 back into the McCarthyite climate of the Fifties favored by the ultraconservative forces (including the DuPont's) backing the Reagan Administration. “The Court of Appeals, in clear violation of Rule 52(a), did its own fact-finding,” argued the American Civil Liberties Union (ACLU) and the Massachusetts Civil Liberties Union to U.S. Supreme Court Justice Thurgood Marshall in representing the author in 1984. “Such discrimination based on the content of a literary work is ‘the essence of … forbidden censorship’ under the First Amendment.”
Predictably, the News-Journal repeated the political damnations in its news account and the column of Bill Frank, who joyfully titled his piece “The Perfect Ending,” predicting “I can wager … that no publisher is going to issue another so-called ‘exposé’ of the DuPont Co. or the family for a long, long time.”
Whatever Frank’s handicaps as a soothsayer, there were broader constitutional concerns that affected even him as a citizen. The problem was that the appeals judges had broken their own federal court rules, specifically Rule 52(a) of the Federal Rules of Civil Procedure. An Appellate Court is bound by a lower court’s findings of fact unless the Appellate Court shows they are clearly erroneous. If the correct legal standards, in this case “bad faith,” are applied, and the lower court finds the facts in favor of the plaintiff, the plaintiff wins. If there is some confusion about the lower court’s findings in light of possibly wrong standards being applied, then the case must be remanded back to the District Court for further finding under the correct standards. The Appellate Court cannot simply ignore those findings and enter judgment for the defendant where the District Court’s factual findings are in the plaintiffs favor.
Yet that is exactly what the appeals judges, led by an ultra-conservative Reagan appointee, Ralph Winter,* did. Although both the Appellate Court and the District Court agreed that “bad faith” in business dealings was an applicable legal standard, and no specific factual errors were cited in Brieant’s decision, the Appellate Court did not remand the case back to Judge Brieant, but simply dismissed his findings of facts. Nor was it interested in seeing this case ever reviewed by the Supreme Court. To remove this possibility, the judges simply ignored also Brieant’s decision for DuPont under the First Amendment, and instead narrowed their own decision to New York law, agreeing with Brieant’s finding that DuPont’s conduct was not coercive on Book-of-the-Month Club or Prentice-Hall’s actions and therefore not a tort under New York law.
By violating their own federal court rules, a matter of law, and ignoring the plaintiffs right to have his favorable award against Prentice-Hall remanded back to the District Court for review, as well as by removing the federal constitutional issue through ignoring the First Amendment ruling by the District Court in favor of Du Pont, the appeals judges designed their decision in such a way as to lock up the case forever in their court and bar the author from further legal efforts to assert his rights.[yep,no corrupt judges here,nothing to see,move along DC]
Corporate censorship was now effectively upheld as the law of the land, with ominous national implications for the constitutional guarantees of freedom of speech and press. Once again, as with its lax 1897 incorporation law for corporations around the country, the DuPont family had led America into a fundamental change in the structure of American law.
A similar local victory was won over the Delaware State News. In 1975, Smyth filed suit against the Farmers Bank, seeking $100,000 in compensatory damages and charging the bank with a “willful and malicious effort to retaliate” for articles printed in 1973 and 1974. The bank, according to Smyth, had attempted to “coerce” a higher interest payment in October, 1974, and then arbitrarily terminated the loan altogether in December. 97 Smyth managed to get refinancing through Baltimore’s Maryland National Bank and the Wilmington Savings Fund Society, but it wasn’t long before State News reporters observed that Smyth’s independent character had gone through a dramatic change, becoming noticeably more conservative. Within a few years News editor Charles Elliott and investigative reporters Rolf Rykken and Don Glickstein had seen the handwriting on the wall and left. “What once was a bold, feisty and sometimes outrageous newspaper has lost its spirit, its soul, its guts,” wrote one hold-out, reporter Jack Croft, in 1981, shortly before he, too, resigned. “A few years ago, owner Smyth decided to stop being a newsman and [became] a businessman. Shortly thereafter, the State News stopped being a newspaper and started becoming a business.… Downstate Delaware has lost what could have been a great little newspaper.” 98
Apparently, most of the news staff agreed. Four days earlier, they had filed into Croft’s apartment to offer condolences to a stack of issues lying in wake in a borrowed baby casket. Twenty-three year veteran Jim Miller, the papers first city editor, looked mournfully into the casket and said, “Doesn’t it look natural?” 99
Natural or not, the death of the State News’s crusading spirit has been sorely felt in Delaware. “Now, it’s an ordinary, respectable small-town paper,” says the Philadelphia Inquirer’s Delaware editor, Rick Edmonds, “without much impact.” 100 Joe Smyth has resigned as editor and moved to Phoenix, Arizona, where his father’s Independent Newspapers, Inc., has its corporate headquarters. Jack Costello’s weekly, meanwhile, now called The Sentinel, is still in business.
Next
5. THE THURSDAY NIGHT MASSACRE
633S
Notes 1-100
Chapter 16
1. Wilmington News-Journal, October 5, 1973.
2. David Hoffman, “Our Man Mel,” Delaware Today (August 1974), p. 25.
3. Ben Bagdikian, “Wilmington’s Independent Newspapers,” Columbia Journalism Review (Summer, 1964), p. 16.
4. James Phelan and Robert Pozen, The Company State (New York: Grossman, 1973), p. 345.
5. Ibid., p. 340. The sixth maximum rate on bequests to child heirs, in fact, was lower than in 31 of those 36 states.
6. Ibid., Appendix 3 and 4.
7. Ibid., p. 343.
8. Wilmington Evening Journal, March 8, 1971.
9. Ibid.
10. Phelan and Pozen, op. cit., p. 265.
11. Ibid., p. 224.
12. Ibid., p. 148.
13. See New Castle County, Neighborhood Environmental Analysis (1968); also, Phelan and Pozen, pp. 353–355, 125–126.
14. Ibid, p. 109.
15. Ibid.
16. Ibid, p. 214.
17. Ibid, p. 355.
18. Office of Economic Opportunity, “Poverty in 1959 and 1969 by State and OEO Region,” Technical Note 1; January 3, 1971, Washington, D.C.
19. Delaware Division of Special Services, June, 1970, Bulletin.
20. Wilmington Evening Journal, June 26, 1970.
21. Delaware Today, op. cit., p. 24.
22. Ibid., p. 25.
23. Phelan and Pozen, p. 269.
24. See Phelan and Pozen, Chapter 12; Table 12–1, for example, on page 289, shows just such a ratio in comparing William du Pont, Jr’s estate with the properties of four adjacent homeowners.
25. Wilmington Evening Journal, July 2, 1971.
26. Interview with Melvin Slawik, August, 1983.
27. Ibid.
28. See Wilmington Housing Authority vs. Parcel of Land, 219 A 2d 148 (Del. Supr. Ct., 1966).
29. See Wilmington Suburban Corporation vs. Board of Assessment for New Castle County, 291 A 2d 293 (Del. Super., 1972). The quote is from Richard Peterson’s text of his unpublished July 9, 1975, analysis of the case, to which the author is grateful.
30. Slawik interview, op. cit.
31. Getty Oil Company, Tour Brochure for the Delaware City Complex; also interview with Ted Keller, Chairman, Citizens Coalition for Tax Reform, August, 1983.
32. Delaware Spectator, January 31, 1973. See Phelan and Pozen, p. 295.
33. Delaware Spectator, February 28, 1973.
34. Taxes and People, Spring 1974, citing figures from New Jersey Public Interest Research Group.
35. George Crile III, “The Mellons, the Mafia, and a Colonial County,” The Washington Monthly (June, 1975), p. 50.
36. Ibid.
37. Ibid, p. 51.
38. Ibid., p. 52.
39. Ibid.
40. Ibid, p. 52–53.
41. Ibid, p. 54. 42. Ibid., p. 66. 43. Ibid, p. 57.
44. Ibid., p. 58. 45. Delaware Spectator, February 28, 1975.
46. Delaware Spectator, March 14, 1973.
47. Delaware Spectator, January 31, 1973.
48. Delaware Spectator, August 9, 1973.
49. Wilmington Morning News, September-October, 1973.
50. Wilmington News-Journal, October 10, 1973.
51. Ibid., August 9, 1973.
52. Phelan and Pozen, p. 340.
53. Wilmington Evening Journal, August 23, 1973.
54. 1967 Census of Governments, State Report #8, Delaware, p. 8.
55. U.S. Department of Commerce, State and Local Government Study #43; “State and Local Government Finances in 1942 and 1957” (Government Printing Office, 1958) p. 16.
56. Congressional Quarterly, July 9, 1971, p. 1489.
57. John Gates, The du Pont Family (New York: Doubleday, 1979), p. 175.
58. Philadelphia Sunday Bulletin, November 17, 1974.
59. Ibid.
60. See New York Times, January 24, 1974, p. 22; May 7, 1974, p. 28.
61. Delaware State News, October 28, 1974.
62. Phelan and Pozen, op. cit., p. 306.
63. Delaware State News, October 28, 1974.
64. Ibid.
65. Delaware State News, October 29, 1974.
66. See Phelan and Pozen, Chapter 9, “The Du Pont Dailies.”
67. Cansler to Smyth, November 23, 1960.
68. Delaware State News, October 27, 1974.
69. Delaware State News, November 1, 1974; see also Joseph Smyth to John W. Jardin, Jr. (Delaware News Council), October 31, 1974.
70. Ibid., November 3, 1974. 71. Ibid., November 7, 1979; Nov. 20, 1974. 72. Ibid., November 18, 1979.
73. Delaware State News, November 26, 1974.
74. Ibid., November 16, 1979.
75. Ibid.
76. See Chapter 15, p. 571
77. Gerard Colby-Zilg vs. E.I. du Pont de Nemours & Co. and Prentice Hall Inc (hereinafter referred to as Colby-Zilg vs. Du Pont), Deposition of Governor Pierre S. du Pont IV, Exhibit: Gerard Colby-Zilg to Congressman Pierre du Pont, June 26, 1973. Also Colby-Zilg to Reynolds du Pont, June 26, 1973.
78. Ibid., Deposition of Irénée du Pont, Jr.
79. Ibid., Depositions of Irénée du Pont, Jr., Thomas Stephenson and Oscar Collier.
80. Ibid.
81. Ibid., Thomas Stephenson to Public Affairs Dept., Du Pont Co., June 12, 1974.
82. Robert Sherrill, “The Book That Du Pont Hated,” Nation, February 14, 1981, p. 174.
83. Ibid.
84. Ibid.; see also Colby-Zilg vs. Du Pont, Deposition of J. Bruce Bredin.
85. Colby-Zilg vs. Du Pont, Richard Rea to Public Affairs Dept., Irénée du Pont, Jr., June 17, 1974.
86. Bettina Sargeant to Stephenson (Du Pont Co. memo), July, 1974.
87. Stephenson memo, July 7, 1974.
88. Brown to Stephenson, July 25, 1974 (Du Pont Co. memo).
89. Rea (Du Pont Co.) to Daly (Prentice-Hall), August 8, 1974.
90. Memo to Peter Grenquist, head of Trade Book Division, Prentice-Hall, Inc., September, 1974.
91. New York Times, December 15, 1974, IV, p. 5.
92. Colby-Zilg vs. Du Pont, see Deposition of Clinton Archer, Harold G. Brown and Thomas Stephenson, Du Pont memo on Robert Sherrill (December, 1974); also Wilmington Morning News, November 15, 1979; Philadelphia Daily News, November 16, 1979.
93. Stephenson to Frankel, December 20, 1974.
94. Frankel to Stephenson, December 30, 1974.
95. Stephenson to Frankel, January 17, 1975.
96. Frankel to Stephenson, February 10, 1975.
97. New York Times, April 13, 1975.
98. Delaware State News, February 16, 1981.
99. Rolf Rykken, “The Lingering Death of the Delaware State News,” Delaware Today, June, 1981, p. 27.
100. Ibid., p. 27.
Or, rather, a demographically altered New Castle County took him. To the DuPont's,it was an ominous sign. Ever since the court-ordered reapportionment of the Sixties,southern Delaware’s control over the state legislature had been eclipsed by the rise of industry and population north of the Chesapeake-Delaware Canal that both literally and culturally divides the small state. New Castle County, which encompasses northern Delaware, is the home of the DuPont's. Both the city of Wilmington, where DuPont Company has its giant central bureaucracy, and the “chateau country” of mansions in the hills northwest of the city, lie within the county’s boundaries. The DuPont's had always dominated the county government through their Republican Party. Until, that is, Mel Slawik came along.
Although universally acclaimed as an affable fellow, Slawik had never given the DuPont's a political reason to like him. At a time when Henry B. DuPont was ordering the News-Journal papers to play down the civil rights movement, telling the editors that “A continued overplaying of integration in our papers certainly plays right into the hands of the radical element of our population.... Many of the writers on your staff seem to have a degree of dedication to certain causes which would make them appear to be quite far to the left,”3 and forcing the resignation of its independent-minded editor, Creed Black,by appointing a top DuPont Public Relations executive, Charles Hackett, to oversee the newspapers, Mel Slawik was engaging in sit-ins at Wilmington lunch counters and arguing for the recognition of human rights.
Like the DuPonts, Slawik was in many ways the product of his social environment,which was a world away from the Brandywine. He and his mother had been forced on welfare in New York City after his father died in 1947 when Slawik was twelve.Contrary to the DuPonts stereotype of welfare recipients, Slawik needed no more incentive to work than the humiliation he felt every day when taking food stamps to the A&P cashier. He worked hard, delivering newspapers, cleaning dishes and cooking in a hospital kitchen, and always reading. His friends told him he’d never make college, but they had underestimated him, as so many would in the future. He not only passed the entrance exam but ended up a summa cum laude graduate from Rutgers University. With his personal background and after a brief stint in the New Castle County’s welfare department after being fired as a sales trainee for trying to organize a white collar union at Continental Diamond and Fiber company in Newark, Delaware, it was not surprising that he took his master’s degree in social work. Mel Slawik, no one doubted, wanted to help people.
Over the next eleven years, he found ample opportunity in Delaware. From 1960 to 1967, he was director of Presbyterian Social Services in the state. People in Delaware still fondly recall his work with poor families in Wilmington. He set up a “Family Camp” for them where he could take them to the beach. He easily related to their yearnings for respect and human dignity, and strong bonds of mutual trust and loyalty were fused.
It was a quality that followed him throughout his career. He was elected national president of the United Presbyterian Health, Education and Welfare Association. In 1968 he founded Delaware’s Geriatric Services for the elderly with a small grant from the Bureau of Aging. By then, he had also served four years as a state representative and that year was elected to the state Senate. When he left the Senate in 1972 to run for the office of County Executive, Geriatric Services was a resounding success, its $2 million budget and staff barely able to keep up with the elderly demands for its services, the only one of its kind in Delaware.
His service in Dover politics had also won national recognition. Rutgers Eagleton Institute of Political Science named him one of the outstanding legislators in America.The NAACP presented him with its prestigious Award of Special Recognition for Minority Services. His contributions to organized labor won him honors from the United Auto Workers of America and the Delaware State Employees Union. Most DuPont's,including Senate pro-tem president Reynolds DuPont, may not have appreciated his efforts to help create the D.S.E.U or his civil rights stands, but the voters in his normally “red-neck” district tolerated Slawik’s causes because he always supported their own bread-and-butter concerns. This constantly put him at odds with the special interests of the DuPont's, and he fought Reynolds over a change in Delaware’s tax on income from the sale of stocks and bonds. For years, Delaware had taxed these capital gains like any other income. In 1967, however, Wilmington tax lawyers led by Johannes Krahmer drafted a bill that followed the federal setup, which allows a lower tax rate for capital gains. Since wealthy families like the DuPont's derive most of their income from investments in stocks and bonds, not salaries, Slawick opposed the bill as a proposed special interest legislation favoring the rich.
The mansions of the Brandywine, obviously, were not toasting to the political health of Mel Slawik.
Slawik did not care. To him, the DuPont's and their allies already had too many tax windfalls. Delaware, unlike 44 states in the Union, has no personal property tax. Most residents owned little personal property anyway beyond their houses and land. But not the DuPont's. Crawford Greenewalt and his wife, for example, admitted owning stocks,bonds, jewelry and other property worth $20 to $30 million, yet paid property taxes on only 1–2 percent of their holdings.4 Henry B. DuPont admitted total property holdings—real (land, houses, and improvements thereon), tangible (cars, boats, livestock, cash,etc.), personal and intangible (stocks, bonds, patents, interests in insurance policies,etc.)—of $56 million, yet paid a property tax on only 10 percent of that, the $6.1 million of real property.
Nor does Delaware have a stock transfer tax. This particularly benefits the DuPont's as the richest stockholders in the state. Most owners of stock do not buy or sell securities in great numbers. The DuPont's and other wealthy families do.
Nor does Wilmington’s wage tax include income from stocks and bonds. In the 1970s it was common for Irénée DuPont, Jr., and H.R. Sharp each to reap between $200,000and $300,000 in dividends from their shares in DuPont and Christiana Securities alone.Yet neither paid any taxes to Wilmington on that income; the onus of the wage tax is instead put on the working class.
Nor was Delaware’s income tax on wages and salaries really progressive beyond$30,000 when one looked at the loopholes for the rich, including tax-free government securities, deductions, exemptions, and credits. By these means, as Marvin Brams points out in his Delaware Inheritance and Estate Taxes (University of Delaware,1969), the 11 percent tax rate was reduced to 6.8 percent for Delawareans who made $200,000 in 1971; those making $15-17,999 paid 4.3 percent, only 2.5 percent less.
Nor did Delaware have a gift tax until 1971. Even then, the new law allowed a mere six months between the time money was given to an heir and the date of a benefactor’s death for the estate to be taxable at rates still below 27 of 36 other states having inheritance taxes.5 Any gifts received before those six months were exempt. Forty-two states require more time. And heirs of modest estates of $25,000 end up paying a higher tax rate than those heirs of net estates worth $2.5 million and even $5 million.6 Delaware’s trust laws also exempt the beneficiary of a trust from gift taxes; the tax,instead, is paid to the state and federal governments by the millionaire who sets up the trust before his death. As long as the trusts principal is not distributed, four generations of heirs can live off the dividends and interest without paying any Delaware estate taxes. If the trust is in Delaware or other government bonds, the heirs do not pay any federal taxes either.
Slawik had had enough. When the new capital gains bill was introduced he challenged Reynolds DuPont in the Senate. Governor Russell Peterson, a former $70,000-a-year DuPont executive, threw the executive branch’s weight behind the measure in 1970 and it was enacted by legislators terrified by threats that the DuPont's would move elsewhere. That was unlikely. Even Congressman Pete DuPont conceded that tax rates were only one of a multitude of factors determining where his family members lived.7 But the threat always worked, and still does.
Conditions in New Castle County had gotten worse by the early 1970’s. The uncontrolled construction of new installations by DuPont and other chemical companies and the lucrative housing developments for the thousands of employees they brought into the area had made a shambles of the county’s sewer system. As early as November 1970, the county government, headed by William J. Conner, a member of DuPont's Legal Department from 1947 to 1966, announced a complete breakdown was imminent.
Part of the responsibility lay with a zoning commission which had for years been steered by a DuPont family member, Samuel H. Homsey. No intensive studies were undertaken to guide the county in land use. While W.W. Laird and other DuPont's and the Allied Woodlawn trustees prevented new developments from being constructed in chateau country and kept land prices high by releasing only a few parcels at a time onto the residential market, encouraging over concentration in selected areas, the county’s Levy Court, which controlled the sewer system’s construction, built what “it could afford”8 (which was limited by the county’s low tax base) rather than what was needed,resulting in what the Conner Administration admitted in 1970 was a “poorly planned,outdated and polluting sewer system.”9
Housing was also a big problem, exacerbated for minorities by racial discrimination incorporated in Woodlawn Trustees leases which read: “No lot or part thereof shall be conveyed to, used, owned or occupied as owner or tenant by any person not of the Caucasian race.”10 Meanwhile, in the previous two decades the city had torn down more housing than it put up11 and the Black community charged that banks denied Afro-Americans home loans for no apparent reason.12 This was all in violation of the Supreme Court’s ruling two decades earlier outlawing racially discriminating covenants in real estate deeds. Until the early 1960’s, when fair housing erupted as an issue, DuPont Company participated in the state’s segregation, finding housing for its employees and placing them with selected realtors; then, as controversy rose over this practice, it withdrew altogether, leaving minority employees to fend for themselves. In 1968,Woodlawn struck the offending covenant, but was later caught segregating a Wilmington rental project by the Delaware Human Rights Commission.
With the exception of Slawik’s Geriatric Services, medical services for the county’s poor were dismal as well, reflected in the high infant mortality rates in Hispanic and Black communities in contrast to the very low rates in the affluent districts.13Wilmington Medical Center was the fifth largest voluntary general hospital in the nation and charged the highest fees in the state.14 In December, 1970, two young boys died en-route to another hospital after being denied emergency care at Wilmington Medical Center. The hospital had practiced racial segregation in its wards until 1957 and a study by Sociometrics, an independent consultant, revealed that Wilmington Center’s care to poor patients was of a low quality.15 When the 1970 incident occurred, the Wilmington News Journal papers reported the boys’ deaths, but did not report Wilmington Medical’s refusal to treat them, even though a sworn affidavit by the boys’ parents was given by a City Hall official to a News Journal reporter.16 At the time, DuPont's were directors of both the News-Journal and the Medical Center.
Under these circumstances it was not surprising, as the Nader Report on Delaware pointed out, that “the highest incidence of mental illness was in census tracts of poor whites and blacks.”17
Between 1959 and 1969, the national poverty rate declined from 22.1 percent to 12.3 percent of the population; in Delaware, the rate of decline was one of the lowest in the country, dropping from 16.8 percent to 15.7 percent; in absolute figures, the number of poor Delawareans actually rose from 73,000 to 85,000.18 Yet in 1970 Delaware was making welfare payments to the poor that were consistently below the national average;this included aid to the elderly, to families with dependent children, and to families of the unemployed.19 That year federal officials ruled that Delaware’s legal ceiling on benefits was too low and threatened a court suit; the Peterson Administration then pressed a bill through the legislature raising the ceiling, but only after assuring the DuPont-dominated assembly of white collar professionals that not one additional dollar would actually go to any family on welfare.20
The county administration under William Conner was failing to respond to a mounting crisis that was now extending to DuPont employees as well. Of seven sites for a 400-unit low-income housing project proposed by the Wilmington Housing Authority to the federal Department of Housing and Urban Development (HUD), the county planning commission vetoed four and failed to approve a fifth. The two other sites were rejected outright by HUD. The County Council, dominated by its president, DuPont family member C. Douglas Buck, Jr., then established its own housing authority to study the possibility of building 900 units by 1973. About 70 percent of the county’s families earned less than $10,000 a year; 50 percent less than $8,000; 13,000 families had annual incomes below $5,000. In a county where residential properties were inflated by DuPont family hoarding and speculation and the population influx conveyed by Interstate 95 (promoted by the former leader of the states highway commission, DuPont family member H.R. Sharp), new homes were simply beyond most citizens’ means. And in the areas already developed, the congestion was so bad that there was not enough land left for recreation. The district called New Castle Hundred, for example,dominated by the Greater Wilmington Airport that Henry B. DuPont had pressured the county to build, contained only 13 public parks or recreational facilities. Most local residents, of course, could not afford the private clubs that DuPont executives enjoyed.
These were all issues that motivated Mel Slawik to run for County Executive in 1972. Unions remembered his impressive record as chairman of the House Labor Committee. Minorities remembered his track record on civil rights. The elderly remembered his four years of building Geriatric Services. Polish-American and Italian-American residents in the working-class suburbs of New Castle remembered him as a man who had stood against the DuPont's hoarding of over 35 percent of the rural land in Christiana Hundred district, 19 percent in Mill Creek Hundred, and 13 percent in Brandywine Hundred. They listened to his pledge of more parks, more and better educated police, an improved sewer system, a local service tax, and more housing.
The DuPont's News-Journal papers saw them listening and soon a series of articles appeared by Jack Nolan, admittedly inspired by Republican state representative George Hering. “Why don’t you go after Mel Slawik,”21 Hering had told Nolan after complaining about Nolan’s investigation into his law firm’s receiving almost $90,000 worth of business from the Peterson state administration.
Nolan did, and on May 16, 1972, the News-Journal’s attacks on Slawick began. They claimed conflict of interest by Slawick in voting for legislation that benefited Geriatric Services and noted that the agency, which had grown into a million dollar service, had failed a recent audit. Nolan later recalled Slawick being cooperative during his investigation, and insisted, “We weren’t trying to hang scalps on anyone’s belt. At that time, Slawik was just a minor figure from a blue-collar district.” But Nolan’s additional comment to the Delaware Today Magazine, edited by a son of a DuPont executive, was equally telling. “Maybe he thought no one would ever look. But they did.” It would take two more years for Slawik to prove his innocence. In 1974 the state Attorney General exonerated him from any wrongdoing at Geriatric Services. But by then the damage had been done by the News-Journal. “He was going big-time,” said Nolan.22
No one will ever know how many votes the News-Journal series cost Slawik, but his campaign survived. Although he pledged to take another look at the assessment of property values, including those of the DuPont's, he generally kept a low-key tone,building a momentum that was designed to peak on election day. He was trying his best,but he never believed, he later confessed, that he would actually win.
The strategy worked. His Republican opponent, William Frederick, under estimated Slawik. When the returns came in, Slawik had won by 1515 votes.
Now, at Reynolds DuPont’s home, the Republican leaders feared the worst. If Slawik made good on his property reassessment pledge, the DuPont's and their corporate allies were bound to suffer because county assessments were notoriously biased. A small shopping center near DuPont's Experimental Station, for example, was assessed at $6224 per acre; the Station, which has never paid taxes on its research equipment or industrial fixtures, was assessed at only $699 per acre.23 In addition, most of the DuPont mansions and estate grounds were grossly undervalued compared to nearby homes;it was not uncommon for adjacent homeowners to have their properties assessed at two, six, and even 13 times what DuPont's paid per acre.24
The DuPont's were also worried about what Slawik would do about pollution. In July, 1970, air pollution had gotten so bad that the Conner Administration was forced to declare a state of alert. For a week, 350,000 people in New Castle County, and particularly Wilmington, were subjected to sulfur dioxide levels as high as .4 parts per million, far beyond the .1 part per million considered the safe maximum level. The Peterson Administration in Dover proclaimed a 24-hour pollution watch on July 28, but it limited only open burning and incinerator operations. Under Delaware law, industrial firms, including three of the biggest polluters, DuPont’s Edgemor and Chambers Works plants and the Delmarva Power and Light plant at Cherry Island, could not be forced to shut down. Delaware’s Water and Air Resources Act, it seems, had been amended with Section 8203(b), destroying state-wide standards and allowing different ones for different neighborhoods, despite the fact that northern Delaware industries are usually very near residential areas. The promoter of the amendment was DuPont’s chief environmental lobbyist in the Legal Department, the same William Conner who was Slawik’s predecessor as County Executive.
Since the passage of that law in 1966, Delaware’s Division of Environmental Control had admitted that the county emitted 200,000 tons of sulfur dioxide every year. New York, with 10 million residents and many industries, put out 400,000 tons. There were only 350,000 people in New Castle County, however. The source of the air pollution was obvious.
The same was true for water pollution. In July, 1971, the Evening Journal, in an unusual display of candor, reported that “An analysis of a typical milk bottle full of river water from near the Delaware Memorial Bridge at the mouth of the Christiana River shows dissolved oxygen levels too little to support fish; and certain bacteria counts four times the permissible drinking water standards.”25 DuPont’s Chambers Works and Edgemor plants, which treated their wastes only on a primary level before dumping them into the Delaware River, shared responsibility with other Delaware, New Jersey and Pennsylvania companies. Yet DuPont opposed water quality standards proposed by the Delaware River Basin Commission. Again, William Conner’s amendments for the Water and Air Resources Act provided loopholes in the form of Section 6007’s allowance for variance and waiver of public hearings by the applicant for a variance. DuPont applied for the first two variances.
Section 6006, another brainchild of Conner’s, called for “conference, conciliation or persuasion” in bringing violators into line. As Peterson’s Attorney General, William Laird Stabler, put it, “the old things of conference, conciliation and persuasion should be part of” the state’s enforcement efforts.26 Stabler, a DuPont in-law, assigned only one lawyer per day each week to work with the state Water and Air Resources Commission, which in 1971 was brought under the control of the governor’s Department of Natural Resources and Environmental Control in a major governmental “streamlining” by an Economy Committee made up of 34 corporate executives full time and 18 more part time and financed by corporations and a $20,000 grant from the DuPont's Welfare Foundation.
The election of an ultra-conservative Democrat as governor in 1972 did not really concern the gathering at Reynolds du Pont’s home. Sherman Tribbitt, after all, had introduced the bill in the General Assembly which granted the Du Ponts special tax breaks during Christiana Securities and Du Pont’s court-ordered divestiture of General Motors. He could be expected to continue to respond favorably to Du Pont influence.
What really worried them was Mel Slawik. What if he should take his job seriously and try to do through the county government what no one had been able to get Dover to do?
In a real sense, it was what Slawik symbolized that alarmed the top Republicans that night. He represented a shift of political power that accompanied the movement of new job locations to the suburbs throughout the country, undermining the traditional control of the Republican Party in those areas. Slawik, moreover, was a representative of a blue-collar constituency that threatened to undermine the power of the landed gentry from southern Delaware who had traditionally run the Democratic Party. DuPont in laws such as lawyers G. Burton Pearson and William Potter had been big wheels in the Democratic Party, carrying out the family’s traditional conciliation with segregationists south of the canal. Now along comes this Slawik, leader of a coalition of not only white blue-collar workers, but Black and Hispanic blue-collar workers to boot.
In such times of crisis, politics are more than the usual diversion for men like Reynolds du Pont and Pete du Pont. They are the major means of protecting their interests and control, the fastest way of getting things that they need done. From now on, the men decided at Reynolds’ home, they would not repeat William Frederick’s mistake. From now on, they would keep a close watch on Slawik’s every move.
In the first few months of his term of office, Slawik confirmed their worst fears. His inaugural speech on January 3, 1973, shook the Brandywine. “I intend to change the image of county government,” he said, “from that of a land planner to that of a community problem solver and a responder to citizen desires.”
The News-Journal stories began to appear again. One charged Slawik with paying off political debts with jobs on the county payroll. Another pointed to a full-time professor being paid $100 a day as part-time consultant. Still another repeated the old charge that Geriatric Services money had been misused by Slawik during his campaign. When a campaign worker, Bayard Austin, hit a police car and refused to take a sobriety test, the News-Journal ran stories that pointed at Slawik. Austin had bought the car from Slawik and not changed its title until five months later. “Hell,” the County Executive said, “It was as if I had had the accident!”
In some ways, he had. Slawik had trusted the man to change the title, and now the News-Journal was raking him over the coals for a minor incident. His own accident was ever trusting Austin.
The attacks grew more serious, however, after Slawik moved to fulfill his campaign pledge about reassessing industrial and residential properties. The crux of the matter was Delaware’s Constitution. Article VIII, section 7 states very clearly that “In all assessments of the value of real estate for taxation, the value of the land and buildings and improvements thereon shall be included.” There is no provision for any exclusion of industrial property in the constitution. And the constitution is specifically cited as the legal basis for the taxing of residential properties. Yet much industrial property had escaped being included in assessments since the constitution was first passed in 1897, when the only real industrial concentration to speak of was the gunpowder plants of Du Pont. Tax revenues due under the constitution for “state, county, hundred district, school, municipal or other public purposes” were simply never collected.
Slawik decided to enforce the state’s highest law. And therein lay his greatest crime against vested interests, and his doom.
Within a month or two of taking office, Slawick’s county attorney, Thomas Luce, had called in the representatives of Du Pont’s Legal Department, Getty and other companies to express the county’s willingness to “phase in” taxation on removable fixtures over a period of years. 27
The county had already won a case in Superior Court against a group of private water companies which had appealed a decision by a county board of assessment that pipes, mains and conduits laid beneath the ground by the companies and storage tanks above the ground constituted real property and were therefore taxable under the constitution. The companies, led by Wilmington Suburban Water Corporation, held that the agreements they had with landowners had clauses asserting the right to remove the equipment. The question was whether a chattel that was removable was a “fixture” under the common law concept of real property. The Superior Court in 1972 held it was, citing as precedent a 1966 case, Wilmington Housing Authority v. Parcel of Land, 28 which determined that removability, while significant, was not a controlling factor. “The ultimate test,” wrote Richard Peterson of George Washington University’s National Law Center in his review of the decision, “was whether the annexor’s intent was to provide for a permanent or a temporary annexation purpose.” Based on this precedent, the Superior Court held that it was “inconceivable” that Wilmington Suburban “had actually contemplated removal of the items prior to the expiration of their useful life.” 29
In 1973, the judgment was affirmed by the Delaware Supreme Court in Wilmington Suburban Water Corporation v. Board of Assessment for New Castle County, 316 A 2d 211 (Delaware Supreme Court, 1973). From then on the county assessors in Delaware were free to apply the constitution and assess all manufacturing machinery and equipment that could reasonably be defined as fixtures, leaving to the assessor much discretion as to what fell within the guidelines.
Delaware was not alone in having a fixtures tax. In fact, all but 11 states in the Union tax fixtures in various ways. Only Delaware, however, had never attempted to collect what was its citizens’ rightful due.
According to Slawik, DuPont, Getty, and the other companies would not hear of it, rejecting the “phase-in” and promising, “You will back up on this.” Slawick estimated up to $200 million in taxes were due. 30 Delaware’s Citizens Coalition for Tax Reform, a non-profit organization headed by former DuPont employee Ted Keller, estimates that the county should have received $10.5 million in taxes on the Getty refinery alone in 1982, as compared to the $904,625 it did receive. The major parcel of Getty’s refinery at Delaware City is still assessed at only a bit over $15 million, while in 1957 Getty itself stated that the original installation cost “was over $200 million.” Construction projects between 1978 and the fall of 1983 amounted to another $324 million, bringing the total value, excluding 20 years of intensive construction between 1957 and 1977, to well over $500 million. 31
In 1974, the Slawik administration publicly announced that industrial fixtures would be assessed and taxed.
The tax was never collected. Instead, the Slawik Administration quickly found itself fighting for its life.
The first serious rumbles from the Brandywine were felt when Slawik began to move also on his pledge to review existing assessments of real property. An examination of county records revealed that Reynolds DuPont owned a house with 85 acres of property that was assessed for only $71,800, when it had actually been purchased in 1969 from Governor Russell for $130,000; under Delaware law, it should have been assessed for $91,000, or 70 percent of fair market value. Similarly, U.S. Senator William V. Roth, whose wife, the former Jane Richards, is a DuPont in-law, paid $157,500 for his house and 6.7 acres in 1970; under the law, it should have been assessed for $110,250. The assessor, however, put a value on it that year of only $61,200, leaving $59,050 worth of Roth’s property untaxed. Senator Roth ended up paying only $800, or the equivalent of what owners of $40,000 suburban homes had to pay. 32
The revelation of these facts by the Nader Task Force on Delaware in January 1973 spurred Slawik to action. He and his aides began to look at the outside assessor hired by the previous Connor administration, Cole-Layer-Trumble of Dayton, Ohio, one of the country’s largest appraisal companies. First they found that in Cincinnati, CLT’s assessments in 1969 had generated some 9000 complaints. Often those who complained simply had their appraisals cut in half, without showing any documentation. Cincinnati paid $2 million for the assessment. In West Virginia, CLT’s original $39.7 million figure for Continental Oil Company’s subsidiary, Consolidated Coal, was secretly lowered to $28.4 million. When West Virginia discovered the discrepancy, it reassessed Consolidated at $40.6 million and barred CLT from the state, claiming it was “a little too close to the property owners.” In St. Petersburg, Florida, the local newspaper uncovered the fact that of all the appraisal firms bidding for the city’s contract, CLT had the most assessments thrown out when examined. Outside Cleveland, CLT appraised a chicken coop, described by the Cleveland Plain Dealer as “a dilapidated building with a roof falling down and leaking, 33 as having a value of $10,840.” In Allentown, Pennsylvania, appraisals there also sparked resident protests. With major companies like U.S. Steel, on the other hand, CLT was charged with giving assessment breaks and a pro-industry bias by the Bucks County Taxpayers Association. In New Jersey, CLT encountered similar charges for its appraisal of U.S. Steel’s land for 45¢’ per square foot, when homeowners’ land across the street had been appraised at $1.70 per square foot.
U.S. Steel had been a client of CLT’s sister firm, American Appraisal Inc. 34 But the worst and perhaps most revealing story came from Westmoreland County in western Pennsylvania, home of the Mellon family which controls Gulf Oil, Alcoa, and Mellon National Bank. There, in the suburbs outside Pittsburgh, CLT was charged with assessments biased in favor of the Mellons. Property values in Ligonier Township, for example, were allegedly increased by about 40 percent, while properties of the Mellon family, who own about 15,000 acres in the town, had been raised only 2 percent. Much of the Mellon land had been valued at less than $100 per acre; in one case, a 312-acre Mellon property was assessed at 64¢ 35 an acre. When this last figure was published and a public outcry arose, Westmoreland County officials claimed a mathematical error and quickly adjusted the figure in par with the other Mellon assessments. Real estate agents, however, placed the real per acre value in the thousands.
Although the chairman of the county assessment board who reported these discrepancies was subsequently fired, County Controller Wayne Gongaware discovered that CLT had hired inexperienced high school and college students at $1.50 an hour to do initial inspection, and then sometimes even disregarded their work in favor of no first-hand evaluation. Instead, Gongaware explained, “They had their employees take the county’s books across the street at night where their clerks erased the students’ penciled-in writing and replaced it with the county’s figures from its property tax cards,” 36 many of which were not even up to date. Gongaware estimated that most homes were increased 25 to 75 percent by CLT, while many industrial and commercial properties and land held by real estate interests had no increases despite state laws requiring uniform assessments. U.S. Steel’s assessment was reduced $1 million; Alcoa’s, $4 million. “What CLT did was cheating by fraud,” Gongaware claimed. “When you deliberately erase records and put in our old records and then sell them back to the county for $1 million, that’s fraud.” 37 Confirming Gongaware’s findings, county District Attorney John Scales petitioned county judge David Weiss to convene a grand jury; Weiss refused.
“It’s unheard of for a judge to turn down a district attorney’s request for a special grand jury,” said Pennsylvania’s Deputy Attorney General, Peter Brown. 38 Weiss later claimed he believed Brown and Gongaware were out “to get” county commissioner Jim Kelly; for his part, Kelly claimed that “this controversy is all a bunch of bull shoes.” 39 The investigation was frozen. “It’s just astounding what went on,” Gongaware said. “We revealed it to the county commissioners and they just laughed at us.” 40 At that point, Gongaware reversed his earlier refusal to pay CLT its final $121,000 due.
Suburbanite Mrs. Dorothy Shope and farmer Robert Shirey then decided to run for two of the three county commissioner seats in the local elections as candidates of the Association of Concerned Taxpayers (ACT), won, and joined Kelly on the commission. But Shirey’s loyalty suddenly began taking a turn toward Kelly and both then excluded Mrs. Shope from executive sessions or failed to attend those she scheduled, even when she was actually the elected chair. Later it was discovered Shirey not only rented a farm from the Mellons but also received some $9000 of his $12,000 in listed campaign contributions from the Mellons. The largest came from Richard Mellon Scaife, who had shared John E. DuPont’s penchant for writing $3000 checks to Richard Nixon’s CREEP in 1972; in fact, 330 such checks for a total $990,000. Scaife has also given money to Delaware Senator Bill Roth.
Shirey, like many in Delaware who share the same fear about the DuPonts, warned that “There are great dangers involved in pushing the Mellons too hard on the assessment question. There was once a time when I could pick up a phone and get a grant for a library from the Mellon Foundation, but now it’s dried up.… You’ve got to be careful, the family could leave the county.” 41 He threatened Mrs. Shope with a legal suit if that happened.
Mrs. Shope was learning that it was one thing to hold office and another to hold power. Whatever doubts she had about this were dissolved when she received an invitation from Pittsburgh’s county District Attorney to visit his office. Robert Duggan, a middle-aged man with silver hair, was an old friend of Shirey, who was in telephone contact with him daily. Duggan was also an old friend of Richard Mellon Scaife. In fact, through his close relationship to Scaife’s sister, Cordelia, Duggan had risen from Cordelias private attorney to consigliere to Scaife himself. It was Duggan who moved Scaife into the nether world of ultra-right wing politics and backing Barry Goldwater and “the governor from Hollywood,” Ronald Reagan. And, of course, Richard Nixon.
Duggan was rumored also to be an old friend of the underworld. When the IRS,investigating Duggan, contacted Cordelia to seek her testimony, she flew to Nevada and Mrs. Cordelia Scaife May became Mrs. Cordelia Scaife Duggan. The District Attorneys wife was thereby shielded by law from having to testify against her husband.
The IRS was thwarted, but other federal officials and reporters tracking organized crime began following a thickening trail of clues that led to the DA’s office. In September, 1971, federal indictments began to come down. About this time, Scaife, who had backed Duggan financially in the past, is believed to have cut the DA loose. Juries subsequently convicted three of Duggan’s key assistants. According to the U.S. Attorney, they were “in effect franchising all the numbers rackets in the Pittsburgh area.” 42 Duggan’s Racket Squad chief, Sam Ferrarro, was convicted of seven counts of taking $300,000 in bribes from organized crime figures for protection.
Mrs. Shope was innocent of Duggan’s ties when she went to his office. But when, in the absence of her lawyer, Duggan suggested they meet Shirey for dinner “in a place where we won’t be recognized,” she walked out. “From that day on my life has become a living hell,” she told Harper’s George Criles III, who investigated her story for the Washington Monthly. Phone calls followed her to her house, even the courtroom, threatening her children. The brakes on her new car suddenly failed and the accident “totaled” it. Judge Weiss stated he was at last considering convening a grand jury—to investigate Mrs. Shope. “Here she is acting both as chairman of the commissioners and as a private citizen fighting the will of the commission. Who ever heard of such a thing?” 43 County records were then closed to the public. Robert Elston, chair of the Association of Concerned Taxpayers, had his car firebombed; he only barely escaped a second explosion by smelling gas and jumping out of his car. The local newspaper, the Tribune Review, concluded a six-part series by arguing that “politics” was behind “largely a contrived tax revolt.” 44 the Tribune Review was owned by Richard Mellon Scaife.
Scaife ran his newspaper like a dictator, decreeing the end of reports on torture and killings by the Chilean military after the CIA-backed coup against Allende, ordering the destruction of all but smiling photographs of Richard Nixon, interfering with the news and firing editors and reporters alike.
The intervention of Ralph Nader, however, brought national media coverage to. ACT’s charge against Cole-Layer-Trumble and an investigation by the Senate Subcommittee on Intergovernmental Relations. It took time but CLT came under investigation by the state of Tennessee over the awarding of a major contract. After CLT’s president, William Gunlock, was subpoenaed, he resigned.
District Attorney Duggan did not have so easy an exit. An hour before a federal grand jury indicted him for allegedly taking a minimum of $250,000 in bribes, Robert Duggan was found on the lawn of his estate in Westmoreland County, dead of a shot-gun blast into his chest. The weapon lay with the body. The coroner ruled it a suicide.
Even before his death, however, the controversy surrounding CLT in Westmoreland County had attracted the attention of Slawik’s aides. The Mellons had in the past been political and business allies of the DuPonts, who held large blocks of stock in Alcoa, Gulf, and Mellon National Bank. The Mellon’s renewal of downtown Pittsburgh with their “Golden Triangle” had originally been the DuPonts’ inspiration for their plans for downtown Wilmington. But it was Cole-Layer-Trumble, not the similarity of Mellon control over Pittsburgh to the DuPonts hold over Wilmington, which interested Slawik. Soon, however, the analogy between the cities became manifest.
As in Westmoreland County, Cole-Layer-Trumble’s contract with New Castle County allowed it to use unskilled “listers,” including high school students, to inspect properties. New Castle residents paid CLT $1.8 million for the contract, slightly below what Cincinnati had paid. In that city Fred J. Morr, who hired CLT when he was a Hamilton Company auditor, was asked at a county budget hearing why he gave CLT the contract. “Republican headquarters made me do it,” 45 he blurted, so regretting that admission later that he denied it. In New Castle County, Slawik aides found, CLT got its contract from the Republican administration of William Conner without having to engage in competitive bidding.
In March, County Executive Slawik asked Cole-Layer-Trumble to justify the $4 million reduction it had made in assessing DuPont Company properties. CLT, Slawik had learned, had made the reduction after negotiating with DuPont officials who used data from a secret appraisal done by another company hired by the chemical giant, International Appraisal Company of Fair Lawn, New Jersey. International had admitted not knowing of any DuPont-CLT negotiations which led to the lower valuations and suggested that its own study might show a total valuation actually higher than CLT’s. When Slawik asked DuPont for a copy of International’s appraisal, DuPont refused.
It was then that Slawik sent a mildly worded letter to CLT asking about reductions for DuPont and other “large industrial and commercial complexes” amounting to a whopping $33 million. Only 132 individuals and firms accounted for this sum, 90 percent of the total $36 million in reduced assessments. “It is most difficult to justify such large reductions,” Slawik wrote. 46 It was also expensive to New Castle homeowners. As CLT itself stated in a press release explaining its assumptions to the public before its reassessments were made, “Since a revaluation program does not raise taxes, and since those who have been paying more than their fair share will get reductions, it follows that some people will have to pay a larger tax bill to take up the slack.” 47
One such “fair share” reduction was land used as a parking lot at 1301 Market St. Owned by DuPont Company, it had been assessed at $126,800. CLT reduced it to $90,000. The previous figure had been based on 1950 property values that had long since risen. On the other hand, a private house at 726 Madison Street which sold for $700 in 1970 was reassessed by CLT at $2800; next door, another house sold in 1970 for $1200 had its assessment raised to $3200. It was clear who CLT’s “some people” were and who they were not.
In the summer of 1973, the secretive headquarters of DuPont made one of its classic bloopers. Applying to the Securities and Exchange Commission for clearance to purchase industrial property from the Holotron Corporation of Columbus, Ohio, DuPont filed an appraisal done on a Holotron plant which DuPont leased in the Delaware Industrial Park on the edge of Newark, the city which houses the University of Delaware. DuPont had paid for the appraisal by a private Wilmington firm, Appraisal Consultants, Inc. The purchase of the property was being claimed as an investment expense by DuPont for tax purposes, and cited the $300,000 worth assigned by the Wilmington firm in October 1971.
Under the state’s 70 percent rate, that would mean an assessment of $210,000. But Cole-Layer-Trumble’s more recent assessment was only $177,800 or 59 percent of the fair market value. At the time, DuPont claimed an expense of $50,000 a year in leasing the plant from Holotron. And Holotron, it turned out, was itself a joint venture half owned by DuPont and half by Scientific Advances, a subsidiary of the research think tank, Battelle Memorial Institute. Holotron, in fact, had been established to develop experimental photography techniques. By leasing from a company it half-owned, Du Pont could claim rental expense while it tested the new techniques; and its half-owned company, meanwhile, got a tax assessment break by Cole-Layer-Trumble, cutting back still further on taxes to the public sector. Later, when assured that the experimental technique would work and be profitable, Du Pont moved to buy the Newark plant, apparently deducting the purchase price based on the earlier and higher appraisal by the Wilmington firm as an expense also.
It was a neat trick, but what concerned Slawik was that the appraisal submitted to the SEC was the first such document made public, inadvertently, that indicated a probusiness bias by CLT. The Slawik Administration estimated that over $700,000 48 would be lost to the county treasury that year because of CLT’s under assessments of industrial and commercial properties.
Two reporters at the News-Journal papers, Robert Hodierne and Robert Frump, conducted their own study of New Castle residential properties and had to agree, to the chagrin of DuPont elders on the paper’s board, that something was rotten in Denmark. They found that non-DuPont family properties were quite uniformly assessed at about the 70 percent rate due. A former CLT official, David Reed, who joined the Slawik team to head the county’s tax assessment division, also uncovered glaring errors. But it was the DuPont document by the Wilmington firm that indicated just how low were previous estimates of money lost to the county by CLT’s appraisals.
That was money that should have gone to the county’s public schools; one could only speculate on how much of the money the county had lost to DuPont Company was instead transferred as dividends to DuPont family members and ended up written off their taxes as donations to such exclusive non-profit private schools in chateau country as Tower Hill, Tatnell, Friends, and St. Andrew’s, all endowed by the DuPonts. New Castles public schools, meanwhile, remained underfinanced, its children culturally deprived in comparison to those offspring of the rich who enjoyed the high, better financed standards a Tower Hill provided.
In a country like America, where the people put such a high value on education as a means to social mobility, a higher income and fulfillment of the American dream, such an inequitable tax system was a subtle but painful insult to the common citizen’s striving for human dignity. Yet there were academicians in such corporate-endowed universities as Harvard or Yale, or even the private prep schools like Philips Andover or Exeter and, yes, even such exclusive primary schools as Tower Hill, who taught only the American dream, and not its reality. It was not surprising, then, that most young DuPonts so easily took on the ideology of individual self-reliance of their parents, and, often, of their parents before them. Nor that they, in contradiction to that reality of their own lives, could embrace the ideology’s attending belief that there are no classes in America, only individuals. Within that context, the average American was soon reduced, at worst, to the image of a ne’er do well, or, at best, the pitied object of noblesse oblige. More often than not, the idealized American was the solid respectable image of one’s upper class father and mother, assisted, companioned, and ultimately awed by a retinue of upper middle-class professionals who dreamed of sharing such grace that comes from inherited wealth and raw power. That such elitism undermined respect for democracy goes without saying, proving that the children of the rich, too, could be culturally deprived.
Undaunted by such concerns, Mel Slawik moved forward with a $50,000 review of CLT’s assessments by a team of professional appraisers. Holcomb and Salter Realty of New Castle handled apartment complexes, tract homes and estates in chateau country. The review concluded gross under-assessments were evident in most cases, averaging 21 percent below fair value. Henry E.I. DuPonts estate, for example, was assessed at $475,800, a full $100,000 below what it should have been. The industrial and commercial sites were checked by John Fortner of Appraisal Consultants, the author of the Holotron appraisal. DuPont’s past was literally catching up with the company. Fortner did lower assessments for DuPont’s Brandywine Building, Country Club, Chestnut Rise Laboratory and Edgemoor Plant, but still found 43 under-assessments by CLT of the 60 properties checked, including Du Pont’s Louvier’s Building in downtown Wilmington. Slawik estimated at least 49 million would be added to the county’s assessment rolls, producing additional school and county revenues of about $120,000 a year. Prompted by Slawik’s review, Wilmington Mayor Thomas Maloney asked the city council for power to require all current exempt properties to reapply for exemption. Meanwhile, Slawik had pressed ahead with his plan to tax industrial and commercial fixtures. It seemed he was about to legally change the power base in Delaware and shift more wealth into the public sector. In 1973, also, a proposal for a 6200-person housing complex for a corridor of Christiana was adopted by the Republican-dominated county council. Another proposal for a shopping center in Greenville made by Daniel C. Lickle was unanimously rejected, 7 to 0. The defeat to Lickle, who is a DuPont in-law (he is married to Nancy “Missy” Kitchell, daughter of William Kitchill and Irene Carpenter and niece of ultra-conservative “Bobby” Carpenter and second cousin of former DuPont chairman Lammot DuPont Copeland, Sr.), seemed to signal the beginning of a new era.
To the DuPonts, things were clearly getting out of control. But to smiling Mel Slawik, the will of the people was finally having its day. He was happily riding the crest of that will, at the peak of his power. He had no premonition of his coming fall.
2
SECURING THE HOMEFRONT
The DuPonts had other reasons to be unhappy in 1973. OPEC’s hike of Middle East
oil prices, they knew, would eventually have a disastrous impact on the earnings of their
chemical company, which used petroleum as its basic feed stock in the production of
artificial fibers. The Watergate investigation was beginning to develop badly for
Richard Nixon, their choice for president in 1972, and there was the scent of rebellion
in the air. Across the nation, the opponents of everything they held dear—big business,
privilege and nationalism—seemed to be rising with a new disturbing boldness. Robert Vesco’s illegal contributions to the president had been dragged into the glare of the media along with his embezzlement of some $200 million from his holding company, International Controls Corporation. This particularly embarrassed some members of the family who had been unable to restrain their lust for new capital and embraced Vesco in 1966 as a partner, then succumbed to his “fan dance,” and allowed him to buy 80 percent of All-American Engineering, the aviation engineering firm originally founded by their most famous aviator, Richard C. DuPont. To some, it was perhaps fortunate that the family hero of World War II had not lived to see their shame. Now it was left to his son, Richard C. du Pont, Jr., to salve the wounds inflicted by Vesco’s pilferage and snap the reins to prod the firm beyond its recent losses. In October, “Kippy” had done just that at All-American’s annual meeting of just 30 shareholders. “Once again Kippy has topped the ballot,” one shareholder commented. “He has a little clique that works for him, very well.” 50
Kippy’s vision, however, extended beyond aviation those days. Like many in his family, some of his hopes centered on Christiana Securities, the family holding company that controlled Du Pont. Christianas leaders, Irénée and Edward du Pont, were facing stiff resistance from a small group of Du Pont shareholders who had challenged Christianas petition for dissolution before the SEC at almost the last moment, forcing more public hearings to be scheduled. It was these hearings, subject to the “wild card” of media coverage and political whim, that would determine if Richards holdings in Christiana, like those of other relatives’, could be exchanged for Du Pont without his having to endure either a large tax bite or a sharp plunge in the value of Du Pont’s stock. The latter would undoubtedly occur if the family tried to unload its huge $1.7 billion holding on the open market. That was why the deal struck between Christiana’s directors and Du Pont’s officers was so crucial. Christiana holdings would shield them from the dangers of the public treasury and marketplace and keep their stock within the company, where their 23 percent holding would allow them to retain control. Then, if they wished, individual family members would be freer to unload their stock as they pleased. Diversification of investment beyond chemicals certainly seemed in order, at least for some like Richard who had other immediate concerns. Many in the family were hinting that oil stocks were the answer. Their value was sure to rise with earnings as OPEC provided a great leap in prices.
And then there was, as always, the trusted boon of real estate. Richard had already taken a small step in this direction—a minor financial interest in a condominium project in the lucrative Rockford Park Area of Wilmington, to be named Bancroft Mills. 51 There was only one serious problem for Richard’s designs, as for those of real estate speculators J. Bruce Bredin of Bredin Realty and W. W. Laird of Rockland Corporation, two family members with sterling entrepreneurial spirits. And that problem was named Mel Slawik.
Slawik’s investigation into New Castle County’s tax base had stirred ripples of concern that were now widening throughout the state. Delaware had faced a fiscal crisis in 1971 and Governor Peterson had met it with budget cuts and taxes that put the onus on the consumer, who paid $14 million more each year in taxes and for items such as gasoline; corporations and wealthy individuals, on the other hand, paid only $4.4 million more in income taxes. 52 In 1972, according to Delaware’s Controller General, seven Delaware banks, including the Du Ponts’ Delaware Trust and Farmers Bank, had paid no 1972 income tax by May, 1972, and Wilmington Trust and Bank of Delaware, with combined net profits exceeding $13.5 million, paid only $635,000, less than 5 percent. Some residents, including Citizens Coalition for Tax Reforms co-chairman Ted Keller, began to call for an end to the states exempting of banks from paying taxes on income from dividends, certain classes of interest, and capital gains from intangibles, all important sources of bank profits. 53
To answer the growing concern, a Delaware Tax Study Committee was formed headed by two leading Democrats, former Governor Elbert Carvel and Senator John Williams. Both men, however, had shown partiality toward the DuPonts in the past. Williams had introduced the federal legislation that saved the DuPonts a fortune in federal taxes during the GM divestiture. And Carvel, whose first term (1949-53) as governor was marked by anti-DuPont opinions, had long since mellowed during his second term (1961-65), appointing H. B. DuPont to the state planning council, Mrs. A. Felix DuPont to the ad hoc goals committee, R.R.M. (Bobby) Carpenter, Jr., to the racing commission, and two other Du Pont lieutenants to the highway commission and his Administration of Justice. In fact, Carvel’s administrations had helped cause Delaware’s fiscal crisis. H.B. Du Pont’s influence in the planning council did much to help keep non-DuPont heavy industry out of the state. The reason was blatantly political: the Du Ponts did not want the growth of blue-collar industries that could undermine Du Pont’s control of state politics through its own white-collar bureaucracy and research force. But as a result, an important source of revenue was lost to the state treasury. As an alternative source of funds, Delaware followed the fiscal philosophy of a sister state, New York, then under the governorship of Nelson Rockefeller, and had begun mortgaging the state’s future to bankers and private bond buyers, by 1963 raising its long-term state and local outstanding debt to the second highest in the nation. Within four years, further borrowing had given Delaware twice the debt of the average state in the union. 54 The DuPont family’s traditional fear of federal statutory and regulatory involvement in their companies and estates also levied a heavy toll on Delaware’s ability to get its fair share of the federal treasury; its representatives in Congress were blatantly lackadaisical in seeking federal assistance. This pattern of behavior goes back to the DuPonts’ hostility to the New Deal of President Franklin Roosevelt. In 1942, for example, Delaware received less federal money than any other state; the same was true for 1953 and 1957; all three years were chosen as representative by a U.S. Department of Commerce study of intergovernmental revenues. By 1967, Delaware was still below the national $77.68 per capita average with $72.87. 55 Clearly, Elbert Carvel was not part of the solution, but part of the problem.
Former DuPont executive Russell Peterson only made the problem worse. Delaware’s share of federal revenues declined still further during his first year in office, slipping to $78 per person as compared to the $100 per capita national average; by 1970, when Pete DuPont was elected the state’s sole representative in Congress and William Roth was elected to the U.S. Senate, Delaware lagged behind even further in revenue-sharing, getting only $93 compared to the $119 average among states. 56 Peterson continued the Du Pont’s traditional opposition to new blue-collar industries coming into the state, and brooked no opposition. When Emily Womack won the Democratic Party’s only statewide office in 1970 as a state treasurer, replacing ex-DuPont employee Daniel Ross, she soon found herself stripped of most of her functions by Peterson’s newly reorganized state government. Under the governor’s new “streamlined” executive, most of her power went to a new position, appointed by the governor—the director of the Division of the Treasury, for which Peterson chose Daniel Ross. Bank borrowing continued. In June 1971, Peterson was forced to call in an emergency session of the legislature and tell them that the state faced a $30 million deficit.
New Castle County Executive Slawik’s approach, therefore, represented a new local alternative source of revenues for needed public services. As the second most powerful officeholder in the state, Slawik, with a mostly blue-collar constituency, also represented a serious threat to not only the Du Ponts’ traditional rule over Delaware but also their plans for its future as a white-collar based headquarters for corporations and banks. Especially banks, if the family was to move successfully into finance after Christiana Securities’ dissolution freed it of its 180-year-old industrial ties. In January, 1974, the president of Christiana Securities, Irénée du Pont, Jr., was named chairman of Delaware’s State Chamber of Commerce. It was a measure of how much the family leaders saw Delaware as key to the clan’s future. Only a year before, Irénée had underscored his commitment to preserving chateau country from changes. “I want to make sure this area remains a nice place to live,” he said, “even if I do nothing else in my life.” 57
With his new position, Irénée was indisputably the most powerful businessman in the state. He was already chairman of the Greater Wilmington Development Council which had already altered the face of Delaware’s only real city. Residents who also wanted the city to remain a nice place to live but stood in the way of G.W.D.C’s plans for 1-95 had been evicted. A similar fate met residents who had once lived where now a widened Delaware Ave. hosts a park, suitably named after GWDC’s former chairman, Henry B. DuPont. Throughout the Sixties and early Seventies, GWDC, with its 66 board members representing Wilmington’s major industries and banks as well as the Roman Catholic Diocese and University of Delaware, had been the states powerhouse. Its executive vice president, Peter Larson, was Wilmington’s city planner when most of the major urban renewal programs were formulated. Former Mayor Haskell’s top assistant, Allan Rusten, had come from GWDC. On a state level, GWDC was behind the establishment of planning departments in both the county and state governments, as well as the Delaware Authority for Regional Transit. The chairman of one of G.W.D.C’s most active committees, Russell Peterson, even became governor. Yet, for all its power, and probably because of it, the GWDC refused to make policy suggestions on such crucial social issues as school desegregation.
The election of Democrats in 1972 to the top offices in Wilmington, New Castle County and the state shook the Republican establishment. Although GWDC still provided Mayor Thomas Malooney with his city planner, Malooney needed to assert his independence from the Du Ponts and chose as a developer for the city’s planned civic center a company which was outside GWDC’s charmed circle. Downtown Wilmington Inc., the GWDC subsidiary that had pushed the project along as the city’s paid coordinator, lost its city funding and was obliged to finance the work itself in order to keep its coordinating role. The project, meanwhile, remained incomplete, with blocks of downtown real estate still empty. Then came Slawik’s tax reassessment throughout the county, inspiring Malooney to seek a reexamination of the city’s tax exemptions as well. The DuPonts, led by Irénée, looked upon these moves as dangerous intrusions into their traditional prerogatives; if “they”were to be stopped, it would have to start with Slawik. Since he enjoyed popularity, loyalty and power on the county level, the assault would have to be made from above, on the state or federal level.
Irénée du Pont’s assumption of the top office in the State Chamber of Commerce reflected this. His title, chairman, was a new one, part of the Chamber’s reorganization along the lines of corporate management, with vice-chairmen and a president as well; the new treasurer, significantly, was from the DuPont’s own bank, Wilmington Trust. Under Irénée’s leadership, the Chamber began a concerted lobbying effort at the state capital in Dover to challenge New Castle’s County Executive.
Slawik soon found himself confronted on a number of fronts. Questions were raised by the News-Journal papers about Slawik’s relationship with contractor Mario Capano. The News-Journal emphasized the short time it took the county planning department to approve Capano’s housing project, Taylortowne, and pointed to his friendship with Slawik and his remodeling of Slawik’s home.
The remodeling, however, was no gift; Slawik had paid for it. Capano, a successful businessman who had been in the construction business for a decade, did give his friend a break, charging Slawik what it cost. But it was not free.
Nor were the 39 days it took the county planning department to approve Capano’s project so quick when one considered the five months Capano had spent with county engineers and planners perfecting his plan. It was a wise investment in time, considering the Transportation Department’s previous concern about traffic congestion in the area. Nor was Taylortowne a surprise to the council members. It had been talked about for months and the area had already been slated for development by the Republicans. Nor did Slawik take part in the final approval by the council. As County Executive, he did not have a vote on the council; in fact, he was not even present at the meeting. Nor did his party have control over the council. The Republicans did, and it was a Republican majority council that approved Capano’s project.
Yet, because DuPont in-law Lickle’s proposal for a shopping center was rejected by the council at the same meetings, and the Transportation Department did not oppose Capano’s well-prepared plan, the News-Journal hinted at corruption and pointed at Slawik.
County officials were surprised when the State Attorney General’s office announced it had actually begun an investigation. It seemed too blatantly political to be taken seriously. Slawik had long been at odds with Governor Sherman Tribbitt and had fought the DuPont old guard in the state’s Democratic Party. This cabal was led by former nominee for governor John H.T. McConnell and lawyer William Potter. McConnell, who married William DuPont’s daughter, Jean, had headed up the Delaware River and Bay Authority and the State Highway Department, besides being president of Delaware Trust, an executive of Hercules Chemicals, and president of GWDC. Potter had also married a DuPont, Alice Harvey, granddaughter of Victor DuPont and second cousin to H. B. DuPont’s wife, Emily. He was president of the Copeland-Andelot Foundation, sharing trusteeship with Henry B. DuPont, Hugh R. Sharp, Jr., Lammot DuPont Copeland, Jr. and Alfred E. Bissell. Potter, 69, the senior partner of one of the DuPonts’ favorite law firms, Potter, Anderson and Corroon, had for years represented Delaware on the Democratic National Committee. He also represented Copeland Jr. during his bankruptcy negotiations and, before that, had interceded with former House Speaker Sherman Tribbitt to push through the bill that allowed the Du Pont family to save about $48 million in state taxes during Christiana Securities and Du Pont’s divestiture of GM stock.
But the investigation was serious, indeed. After all the fanfare given it by the News-Journal, its exoneration of Slawik seemed an anticlimax.
No sooner had the State Attorney General dropped this investigation than a new one was launched, this time on the federal level. It was ordered by the local U.S. Attorney, Ralph Keil, who had been appointed by Richard Nixon at the behest of DuPont in-law Senator William Roth. Soon FBI agents were looking into every aspect of Slawik’s life. At the same time, Irénée had marshalled lawyers from the State Chamber of Commerce against Slawik’s plan to tax industrial and commercial fixtures as mandated by the state constitution. Ordered by Irving Shapiro and Irénée, DuPont Company attorneys also lent their talents to the cause, drafting a bill that would, according to Bruce Ralston, the Chamber’s director of governmental affairs, modify the impact of “the State Supreme Court’s decision through legislation.” 58 The Chamber kept the drafting session secret, however, because of the state-wide elections. “The taxation of
fixtures is an immensely complicated issue,” Ralston said, “and we would have been in a real donnybrook if it had become an election issue.” 59
3
THE CASE OF THE
MISSING RECORDS
Delaware’s local elections in 1974 were indeed devoid of issues except one, thanks
to Watergate: corruption in government. Pete DuPont had moved to distance himself
from the fallen Republican vice-president and president by announcing in January 1974
that he would not accept campaign contributions over $100. The National Information
Center on Political Finance did disclose that Pete had been among those Congressmen
on the House Agriculture Committee who received campaign contributions from the
same dairy industry associations that had made heavy contributions to Nixon’s CREEP
after he overruled the Secretary of Agriculture and ordered an increase in milk price
subsidies. But Pete avoided any hint of scandal in the press. Likewise, in May, when he
disclosed stock holdings of $2.5 million, including shares in a number of oil companies,
no one asked if federal conflict-of-interest laws had been violated when he voted in
Congress on oil-related bills. Nor did the press point out the contradiction between
Pete’s posing as an advocate of full disclosure and his failure to disclose the amount of
his stockholdings in oil and other interests held in a beneficial trust.
60 His Democratic opponent, University of Delaware professor James Soles, did criticize Pete for using his franking privilege with the federal mails right up until September, but federal law allows the privilege to extend to a month before an election. Only when Soles raised the question of secret contributions to Pete’s first campaign for Congress in 1970 did the state awake from its slumber. After the 1970 race, according to Soles, DuPont was quoted as saying if everything were known about the finances of the campaign, he and every other politician would have to go to jail. 61 Soles challenged DuPont to prove his campaign finances were aboveboard.
Pete balked. In a curious twist of the law’s intent, Pete claimed that the old Corrupt Practices Act then in effect kept him from knowing or making public the details of his 1970 campaign finances. The Nader Report on Delaware, however, charged that “in the 1970 Congressional race, Pierre S. DuPont IV intentionally remained ignorant of the exact amount raised by his campaign committees to take advantage of a loophole in the federal law.… A candidate need only report monies raised directly for him, or funds which he knew about. Therefore, a candidate can purposely remain ignorant of money raised for him by committees and none of that money need be reported anywhere.” 62
Pete’s 1970 campaign was financed by a number of such committees headed by his campaign manager, Glenn Kenton, his campaign treasurer, Henry H. Silliman, Jr. (Pete’s cousin and Irénée DuPont, Jr.’s nephew) and his general campaign chairman, Edmund Carpenter II, partner of the powerful Richards, Layton and Finger law firm, and one of two sons of former DuPont chairman Walter Carpenter. Edmund is well connected. He is married to E. Francis Du Pont’s daughter, F. Carroll (she had been married to a News-Journal reporter and Du Pont family author John Gates). He is also brother-in-law of Henry B. Du Pont’s daughter, E. Murton DuPont, cousin of Bobby Carpenter, and second cousin of Nancy, wife of Daniel Lickle of respected shopping center fame.
Of the three, 53-year-old Carpenter was the obvious political heavyweight. Kenton, a tall, shrewd and ambitious young man, had risen on Pete’s star. Silliman’s claim to fame, besides his $100,000 18-acre estate, was his mother’s large holdings in Christiana Securities; as an “inner core” family member, he could be relied upon to keep a tight lip about the books he kept. Carpenter, on the other hand, was well known in national Republican politics, almost as much as William Potter was in Democratic circles. Edmund’s $2,500 donation to CREEP was buttressed by another $27,000 donated by his father and brother W. Sam Carpenter. He had also chaired Delaware Citizens for Nixon-Agnew in 1968. As a fellow of the American Bar Association, former chairman of the state commission to reform jury service, past deputy attorney general of Delaware, and member of the Governor’s Crime Commission and the Delaware Law Enforcement and Planning Agency, Carpenter had a reputation that the Du Ponts and many Delawareans considered unimpeachable.
It was probably for that reason that Carpenter, the titular finance chairman, and not Silliman, the actual treasurer, was given custody of the records of secret contributions after the 1970 campaign was over. Challenged by Soles four years later to produce the books, Pete replied that the old Corrupt Practices law required his keeping campaign financial records for only two years. Some had probably been thrown out, he said, “in the normal course of housecleaning.” 63
Soles refused to be put off. Pete had made a big deal out of his limiting contributions to $100, Soles argued, but the Congressman enjoyed the advantage of incumbency only because of a campaign based on unknown financing practices of four years earlier. If Pete had already been elected by big money, it would be hard to believe his newfound populist line was not merely an exploitation of Watergate and the public's hope for a restored political integrity.
DuPont now fired back that Soles was “foolish and desperate.” He attempted to demean the issue by calling it “silly,” but the heat of public pressure would not fade. He acted as if insulted, protesting that “There was nothing illegal about the 1970 campaign.” 64
Perhaps, but Soles emphasized that the voter was being asked to take Pete’s word for it, not exactly an uncompromised source. When Soles’s charges made page one headlines on October 28, Pete called a press conference that morning and announced he was reversing his earlier refusal to open the books. It was “the ultimate triumph of rhetoric over substance,” he argued, but conceded that he needed to maintain the confidence of voters. He admitted that about $150,000 had been raised in 1970, and although the records might be incomplete, the list of contributors could be “reconstructed” from them. Carpenter promised reporters that he would disclose the records later in the day.
He did not. Instead, that afternoon Carpenter admitted that the records had been burned.
How did that happen? Carpenter concluded that he had failed to circle them as files over three years old that were to be kept. He hadn’t realized their fate until his personal secretary had informed him. No, he did not keep the records at his office, but in his home. He explained that it was possible that they were burned by his household staff during the spring. It was just as Pete had foreseen earlier: destroyed “in the normal course of housecleaning.”
Soles was not about to challenge Carpenter’s integrity. He was “a man of principle,” he said of the powerful attorney, then asked, “Do you really think a candidate does not keep a list of donors and how much they give?” 65 There were, of course, other possible sources, including bank records of the campaign and donors or records of companies that did business with the campaign. But Carpenter claimed to have no knowledge of other records and no authority to look into the matter.
A list of donors was compiled by Pete from “general recollection.” His father, Pierre S. du Pont III, gave over $3000, as did his uncle, Reynolds DuPont. Elise, his wife, gave from $3,000 to $5,000, and the Republican Boosters Club gave $10,000. Smaller donations were made by Irénée DuPont, Jr., Richard S. DuPont, J. Bruce Bredin, Richard C. DuPont, Edward B. DuPont, and his Texan brother-in-law Baron Kidd.
Many of these had been individually contacted by Carpenter and Kenton after Carpenter threw a quiet luncheon for them at Hotel DuPont’s Georgian Room in the fall of 1969.
4
SILENCING THE CRITICS
If the disappearance of the donors’ records had any impact on voters, it was not
discernable in New Castle County. The News-Journal papers treated it cautiously, and
down-played Pete’s connections to the DuPont family, as it had in his last two
elections. But the downstate newspaper, the Delaware State News, prided itself on its
independence and had gained a nationwide reputation as a feisty, courageous hornet
buzzing the DuPont giant with a journalistic integrity rare for Delaware. For 25 years,
first under its founding editor, Jack Smyth, then his successor, son Joe Smyth, the State
News breathed freedom, purpose and outrage, attracting awards and many young
idealistic reporters. It also attracted the ire of the DuPonts and their News-Journal papers, whose salesmen threatened to withdraw their papers from any newsstand which
stocked it when it first appeared, distributed grossly understated statistics on the States
News’s circulation to advertisers, and tried unsuccessfully to throttle the small
downstate daily.
66 But the State News survived in Dover, pricking at the consciences of
some journalists at the News-Journal who did have qualms about their papers’
exploitation by the DuPonts. One editor, Les Cansler, even bared his shame to the State
News’s Jack Smyth, writing that “I fear that our city editor pays little attention to
releases, except when they come down from the DuPont Building. Then he quivers with
awe and follows instructions to a ‘T’.”
67 Under Joe Smyth, the State News moved to the
offense, scoring News-Journal biased coverage of Governor Peterson and the
University of “Delapont” repeatedly in editorials during the early Seventies. In 1974, it
levelled a barrage of criticisms at Pete DuPont and the management of the Farmer’s
Bank. Joe Smyth was toying with the idea of expanding the State News’s distribution
into northern New Castle to challenge the News-Journal’s monopoly over the area, and
in 1972 had taken out a $630,000 ten-year loan to finance the paper’s operations and
growth, using its plant and equipment as collateral. It may have been his greatest mistake. In October, 1974, when his reportage and anti-DuPont coverage were at their heady zenith, the Farmers Bank served notice it would not renew the State News’s loan unless a 10.5 to 12 percent interest was paid instead of the 7.5 per cent it had originally agreed to. Although the State of Delaware owned 49.3 percent of the stock of Farmers Bank, a system of scaled voting left the Tribbit government with little say on the board of directors; the real power lay with directors like chairman O.H.R. Baldwin, a director of E.I. DuPont’s Continental American Life Insurance Company, Mulco Products, Wilmington Medical Center and Rollins Leasing; Alfred E. Bissell, chairman of Delaware Trust and partner of Laird, Bissell & Meeds, a trustee of J. Bruce Bredin’s foundation and husband of Eugene du Pont, Jr.’s niece, Julia du Pont Andrews; J.R. Johnson, director of Hercules Chemicals; J.R. Horsey of the trust department of Wilmington Trust (he was also attorney for the state House of Representatives); and H.K. Dugdale and Alton F. Hillis, directors of Artisans’ Savings Bank, in which J. Bruce Bredin, Irénée DuPont’s brother-in-law, had a large interest and was also a director. Liberal Democrats such as Alexis DuPont Bayard and the late James G. Smith joined the Townsends in presenting another view, but Dixiecrats like former Lt. Governor Eugene Bookhammer undermined any solid front by the party of Jefferson.
Smyth remained uncowed. On October 27 he announced the State News was endorsing Democrat James Soles for Congress; Pete DuPont, he editorialized, “should be removed from office on November 5. The trouble with Pierre DuPont is that he’s slippery, clever and ambitious at a time when the country needs members of Congress who are forthright, thoughtful and dedicated. DuPont has developed an annoying habit. When questioned about an issue on which he should take a stand, DuPont politely refuses to do so.… That’s clever and slippery, and the mark of a too-ambitious man.… When you cut through the rhetoric and get to the gut issues, you find that Pierre DuPont has been a leader who doesn’t lead, a talker who doesn’t act, a profile without courage.” 68 Smyth criticized DuPont for standing by “a corrupt president” until “in the end, even the nations number one Nixon puppet, Charles Sandman of New Jersey, deserted the Good Ship Corruption ahead of DuPont.” He scored DuPont’s “vacillation” on Nelson Rockefeller’s nomination for the vice-presidency. “If DuPont stays in character, Rockefeller’s brothers will come out against him before DuPont will. … To DuPont, ‘election reform’ is a program which allows him to spend two-and-a-half times as much money as his challenger.” James Soles, “an obscure professor,” on the other hand, “seems to know what he’s talking about, and he seems willing to honestly share his opinions with Delawareans.”
In that same issue, Smyth also began serializing a 600-page unflattering biography of the DuPont family and history of DuPont Company, DuPont: Behind the Nylon Curtain. The series ran for six Sundays, making the exposé the states top-selling book and one of the DuPonts’ biggest headaches. The reaction from DuPont loyalists was immediate. Jack Costello, a white-haired 42-year-old former State News columnist fired by Smyth, dispatched a letter the next day suggesting Smyth delay the serialization until after the election and launch an investigation of the author. Smyth, citing his contract with the publisher, Prentice-Hall, calling for a certain number of articles before the official November 14 publication date, refused, but printed Costello’s letter in the State News when the second installment appeared on the front page on November 3, just two days before the election. Neither installment mentioned the Congressman. But by then, Costello had already filed charges against Smyth before the Delaware News Council, accusing the editor of attempting to influence Congressman DuPont’s chances for re-election.
The Council decided to meet with Costello on Halloween night. Smyth declined attending. “I have a feeling they’re going to be getting into a question of prior censorship, and I don’t want to be party to that.” But he found the date “entirely appropriate.” “The recklessness of his [Costello’s] witch hunting and ghost-visions make the timing perfect.” 69
It took the News Council over three months to clear the State News of bias, and then only after its consultant, Robert Shaw, manager of the Minnesota Press Council, warned the Delaware Council that their consideration of Costello’s demand that they request Smyth to suppress the serialization even temporarily until after the DuPont-Soles contest was over was a case of prior restraint endangering the freedom of the press. By then, some Council members’ efforts “to prevent a similar case of ‘poor taste’” in the future had come to naught.
Or almost. DuPont, for his part, hastily called a final press conference before the election. He disclaimed any concern about the book and publicly disassociated himself from Costello’s effort to halt the serialization or his charges before the News Council. He did make Smyth’s editorials the focus of his anger, however, and singled out Smyth and news editor Charles Elliott for a “Tantrum of personal attacks” and “petulant raging against my name, my heritage and my family.” Du Pont was furious at Elliott’s poor rating of the Congressman’s press party at his “Patterns” mansion and description of the “tent-like” dress his wife, Elise du Pont, was wearing. “He comes to my house, drinks my whiskey and insults my wife,” du Pont said of Elliott. The Delaware State News, despite admittedly fair news coverage edited by Elliott, had fallen “far below the standards of decent journalism.” But he had “no strong feelings” about the book, despite Costello’s accusations. 70
Then it was revealed that DuPont had met and talked privately with Costello on October 24, three days before the serialization began. Elliott knew this because he had seen them talking at an annual high school journalists workshop at Seaford High School on that date. 71 Du Pont and Costello admitted talking, but denied they discussed Costello’s complaint. “I’ve never discussed that question with Jack,” said DuPont. “I don’t even recall it.” 72 Costello charged that Elliott had claimed he had a “secret” meeting with Du Pont rather than an open workshop, but only conceded that he spoke to DuPont in his capacity as a journalist. “Any newsman worth a damn will talk to the state’s lone congressman whenever the opportunity arises,” he wrote, and called Elliott’s editorial about their private conversation “premeditated libel.” He insisted that “the Seaford meeting, coming as it did, on Thursday, October 24, was three days before the first excerpt of the book was printed and therefore I had no knowledge of its contents until I read it the following Saturday.” 73
Yet, when informed in 1979 that DuPont had been subpoenaed by the author to answer questions about the meeting, Costello, a conservative, confessed discussing the book with DuPont and knowing enough about its contents to denounce its author as a “radical.” “I simply stated it the way I saw it,” he told the State News. “They ran this radical’s book right at the moment he was running [for re-election] and I thought it was a coincidence. As I recall, he [DuPont] said he thought it was, too.” 74 But Costello maintained it was he, not DuPont, who brought the book up, even though he had earlier stated in 1974 he had not had knowledge of its contents at the time. Members of both Pierre’s family and DuPont Company’s hierarchy, on the other hand, did, thanks to their access to a leaked manuscript. Costello, rather, was peeved at DuPont for publicly brushing off Costello’s efforts on Pete’s behalf after it had caused such flack. “I took exception to that,” he recalled. “I thought he [DuPont] could have said something a little more weighty about it.” 75 He denied Pete had pressured him, but then Pete needn’t have; Costello was only too eager to find some means of service. Later, backed by local Republicans, Costello launched his own Dover weekly, News Week, billed as “Dover’s oldest weekly” in 1979. It was five years old.
The election of 1974 did not help the DuPonts in Dover. The number of DuPont affiliated memberships in the legislature dropped from 11 to 5 in the House and from 5 to 4 in the Senate. Among those defeated was Reynolds DuPont’s son, Thomas (who has since moved to Florida). Reynolds did not choose to run for re-election, but he did see his nephew, Pete, get re-elected to Congress, a necessary victory if the young scion was to fulfill his ambition to run for governor in 1976, as predicted in the exposé biography. 76 Pete never admitted hearing of the book or its author before 1974, although federal court documents show the author requested interviews in 1973 of both him and Reynolds, and that Reynolds, instead of replying, contacted DuPont Company headquarters. 77 For there, on the 9th floor, a more serious and ultimately successful campaign than Costello’s had been launched against the book.
It began as a secret investigation of the author, initiated when Irénée DuPont, Jr., was contacted in 1973 and asked to submit to an interview. 78 His decline was actually drafted by company officials. At the same time, the company found through the services of the Eleutherian Mills-Hagley Historical Library an informant by the name of Marc Duke who had been an acquaintance of the author and shared with him a common literary agent, Oscar Collier. 79
In June, 1974, DuPont Chairman Irving Shapiro was alerted that the book was to be published that fall. Du Pont’s officials then sought backgrounds on the members of the board of directors of the book’s publisher, Prentice-Hall, and “to reach out,” if necessary, “through other sources.” 80 Public Relations Director Thomas Stephenson wrote a memo: “Let’s arrange to obtain and review a copy as soon as possible.” 81 They did, within 24 hours, in fact. A Prentice-Hall salesman recalled receiving an “unorthodox” order 82 to drop a copy of the original unedited manuscript to Wilmington’s Greenwood bookstore, “but what’s a poor salesman to do when his boss tells him to do something?” 83 The bookstore had once been owned by William W. Laird, Jr., a cousin of Pete DuPont and uncle of Pete’s future lieutenant in state government, Nathan Hayward III. A director of DuPont, Laird was one of the most powerful members of the DuPont family, a heavy speculator in New Castle County real estate and a large investor in E. I. DuPont’s Sigma Trust Shares mutual funds. He was also a director of the holding companies, Christiana Securities and Wilmington Trust. In the last few years, the bookstore’s ownership had passed to Colwyn Krussman, whose father was a DuPont employee. It wasn’t long before the manuscript found its way into the hands of another DuPont family member and real estate speculator, J. Bruce Bredin.
Bredin, the dapper husband of Octavia DuPont, wore many hats over the years. Since leaving DuPont Company in 1950 and later graduating to the board of directors, he had concentrated on real estate, the Artisans Savings Bank, Canadian companies (Terminal Warehouse, Ltd., and Baymond Corporation, in association with Reynolds DuPont) and had been vice-president of a secret DuPont family front for investments around the world (including Germany) named Penas de Hicacos, based in Cuba until General Batista’s fall to Castro’s revolution. Because he had financed many scientific expeditions for the Smithsonian to tropical colonies like the Belgian Congo (1955) and the Caribbean isles, often using his own yacht, he was named a Fellow by the institution; similar bequests by his tax-free foundation won him a seat on the board of trustees of the University of Delaware. But if there was anything that marked Bruce Bredin it was his loyalty to his adopted clan. It was Bredin who allowed his eight month-old baby girl, Aletta, to be used in a DuPont publicity stunt, photographed in her crib with the caption “Fingered by Uncle Sam” in an attempt to discredit the federal government’s GM divestiture suit.
Bredin’s reaction to the manuscript of Behind the Nylon Curtain was predictable: after a cursory review, he decided it was “unfriendly” 84 and delivered it to the Public Affairs Department of DuPont, where Vice-President Thomas Stephenson sent it on to Irénée DuPont, Jr., Bredin’s brother-in-law and fellow stockholder of Christiana Securities and director of GWDC and Wilmington Trust. DuPont’s lawyers also gave it a closer inspection and concluded there was nothing the company could do at that time; no immediate action was recommended. 85 Within a month, however, word came to DuPont through its informer, Marc Duke, that the book had been selected for distribution by a subsidiary of Book-of-the-Month Club, Fortune Book Club. 86 This meant the book would be widely distributed throughout the nation. Irénée and A. Felix DuPont noted “concern” 87 and, after Irénée left the country on an inspection of DuPont operations in Latin America, the Public Affairs Department swung into action, reversing its earlier wait-and-see strategy. Phone calls were made—not to Prentice-Hall, the publisher, as would be expected if there were to be demands for “corrections” in the text—but instead to an old contact, Robert Lubar of Time, Inc. (whose Fortune magazine DuPont mistakenly believed still controlled Fortune Book Club) and then to Book-of-the-Month Club warning that the manuscript had been reviewed around Wilmington by “family members and lawyers” and been found “actionable” and “scurrilous.” 88 Book-of-the Month Club officials quickly reversed the earlier selection by its editors, while DuPont over the phone denied Prentice-Hall’s accusations that the chemical giant had threatened litigation. After a hasty trip by DuPont lawyers to New York to confer with BOMC officials the following week, this denial was finally put in writing in a letter to Prentice- Hall, although it did not rule out a suit “if and when the book is published.” 89
The ruse apparently worked; a “chill” of the First Amendment’s freedom of press and speech settled in. Without informing the author of DuPont’s interference for over three months, Prentice-Hall secretly cut the print run by one-third so that the book could “not price profitably according to any conceivable formula” 90 and slashed the advertising budget in half. When rave reviews and the Delaware State News serialization (arranged by the author with a reluctant Prentice-Hall) nevertheless stimulated such sales that the first print run of 10,000 copies was virtually sold out within six weeks, Prentice-Hall’s delay in printing another 3,000 copies allowed many orders to go unfulfilled for weeks. Meanwhile, according to at least two sources from within the company, DuPont sent an official with a helper to buy up and remove copies from bookstores.
It was all too much for either the book’s editor, Bram Cavin, or Prentice-Hall’s own legal counsel, William Daly, to take, and they bolted, cooperating in an investigation by the New York Times of DuPont’s interference. The Times’s subsequent article, “Club Withdraws Book on Du Ponts,” in January, 1975, again stimulated orders that went unfulfilled, some in Delaware, until as late as March; by that time interest in the unavailable book had waned and Prentice-Hall refused to print any further copies, spend any more money on advertising, or to return the rights to the book to the author. (Although the book was quietly categorized as “out of print” by Prentice-Hall in 1976, rights were not formally returned in writing until legal pressure was exerted by the author in 1982.) DuPont, meanwhile, encouraged unfavorable reviews by circulating an internal company critique of the book among sympathetic media outlets; at least in one case, however, DuPont told the reviewers not to give Du Pont any public attribution. DuPont’s opinions then ended up in reviews with readers unaware of DuPont’s hand behind the scenes.
With the New York Times (which had printed a rave review of the book, calling it “something of a miracle,” 91 ) DuPont took a hard line. It launched an investigation of the reviewer, Robert Sherrill, similar to the one it had earlier undertaken of the author. 92 It also pressured the Times directly, requesting a meeting with Sunday editor Max Frankel not only to detail its distress, but to discuss, in broader context, the problems of “reviewing books about business.” 93 Frankel asked DuPont to “not wait for a visit here” and to explain “what problems” DuPont exactly had in mind first to “help me in terms of sharing your thoughts with my colleagues.” 94 DuPont then responded that “it would be a futile exercise to confront the reviewer with a list of the errors and distortions in his review or to debate the merits of the book,” and offered copies of two unfavorable reviews by the Philadelphia Inquirer and the former Philadelphia bureau of the Wall Street Journal as substitutes, commenting that “a major problem with reviews of books about business is that the reviewers often have little or no knowledge of the way business enterprises actually function, or have an insurmountable bias against business.” 95 DuPont chose not to pursue a meeting, and whether the Times accepted DuPont’s charge that most reviewers of books on corporations were either ignorant or biased, Frankel in his reply denied as “untrue” the Wall Street Journal reviewer’s claim that the book was “merely a rehash and amalgam of a previous published work.” But he did ominously concede that Du Pont had prompted the Times to “think some more” on “the expertise of our reviews of business books.” 96
DuPont was pleased. “We achieved partial success,” noted Public Relations Director Stephenson. “This is as good as we could have expected,” agreed DuPont lawyer Richard E. Manning. Stephenson would eventually be subpoenaed for questioning by the author during his federal suit against DuPont for inducing breach of contract and Prentice-Hall for breach of contract. It would ultimately take eight years since the book was first published for the author to have his day in court (and, then, deprived of a jury because of a technical omission by the author’s first attorney, William Standard of Rabinowitz, Boudin & Standard of New York; Standard was subsequently replaced by Ronald De Petris, former U.S. Assistant District Attorney, who was well qualified for the case: he had headed up the Justice Department’s Fraud and Criminal Division in New York), and for Prentice-Hall to be convicted of killing off the book for “no legitimate business reason.” But by then the book was quite dead, if not forgotten, and Prentice-Hall had fired for “non-productivity” the book’s editor, Bram Cavin, who subsequently left publishing altogether in disgust. DuPont, on the other hand, was let off the hook by a conservative Nixon appointee, Federal Judge Charles Brieant, its admitted attempt to limit the book’s distribution with references to Book-of-the-Month Club about “lawyers” and “actionable” excused as an exercise of DuPont’s First Amendment right to freedom of speech. Brieant’s decision on DuPont, by removing the argued cause (Du Pont’s phone calls) behind the effect (Book-of-the-Month Club’s cancellation and Prentice-Hall’s cutbacks in distribution and advertising) and his expressed sympathy with DuPont’s reaction to such an exposé, opened the way for Prentice-Hall to attempt a reversal with the one court in the entire country that the New York-based publishing industry considers the most important to its interests: the United States Court of Appeals for the Second Circuit, which includes New York.
In 1983, almost a year after hearing oral arguments, a federal appellate panel of three conservative judges appointed by recent Republican presidents reversed even Prentice Hall’s conviction. When it came to Brieant’s letting off DuPont, they agreed. Then, using that decision, the judges held that no motive had been proven for Prentice-Hall’s action. Brieant, however, had held that his inability to discover Prentice-Hall’s motives for acting as it did did not negate the hard facts of what it still did: kill the book off. The appeals judges arbitrarily chose to ignore that point and simply asserted that it had not been proven that Prentice-Hall had shown bad faith in its business judgment, and awarded the decision to the publisher, laying aside the book’s promising sales record and the expert testimony by simply branding the book “a Marxist version of history” that “would not appeal to mainstream readers” but only a few (“presumably Marxists,” as Nation magazine chided the judges).[Yep,a great example of 'free markets' that the pond scum is always yacking about DC]
The decision was, nevertheless, a testament to just how far the country had slipped since 1974 back into the McCarthyite climate of the Fifties favored by the ultraconservative forces (including the DuPont's) backing the Reagan Administration. “The Court of Appeals, in clear violation of Rule 52(a), did its own fact-finding,” argued the American Civil Liberties Union (ACLU) and the Massachusetts Civil Liberties Union to U.S. Supreme Court Justice Thurgood Marshall in representing the author in 1984. “Such discrimination based on the content of a literary work is ‘the essence of … forbidden censorship’ under the First Amendment.”
Predictably, the News-Journal repeated the political damnations in its news account and the column of Bill Frank, who joyfully titled his piece “The Perfect Ending,” predicting “I can wager … that no publisher is going to issue another so-called ‘exposé’ of the DuPont Co. or the family for a long, long time.”
Whatever Frank’s handicaps as a soothsayer, there were broader constitutional concerns that affected even him as a citizen. The problem was that the appeals judges had broken their own federal court rules, specifically Rule 52(a) of the Federal Rules of Civil Procedure. An Appellate Court is bound by a lower court’s findings of fact unless the Appellate Court shows they are clearly erroneous. If the correct legal standards, in this case “bad faith,” are applied, and the lower court finds the facts in favor of the plaintiff, the plaintiff wins. If there is some confusion about the lower court’s findings in light of possibly wrong standards being applied, then the case must be remanded back to the District Court for further finding under the correct standards. The Appellate Court cannot simply ignore those findings and enter judgment for the defendant where the District Court’s factual findings are in the plaintiffs favor.
Yet that is exactly what the appeals judges, led by an ultra-conservative Reagan appointee, Ralph Winter,* did. Although both the Appellate Court and the District Court agreed that “bad faith” in business dealings was an applicable legal standard, and no specific factual errors were cited in Brieant’s decision, the Appellate Court did not remand the case back to Judge Brieant, but simply dismissed his findings of facts. Nor was it interested in seeing this case ever reviewed by the Supreme Court. To remove this possibility, the judges simply ignored also Brieant’s decision for DuPont under the First Amendment, and instead narrowed their own decision to New York law, agreeing with Brieant’s finding that DuPont’s conduct was not coercive on Book-of-the-Month Club or Prentice-Hall’s actions and therefore not a tort under New York law.
By violating their own federal court rules, a matter of law, and ignoring the plaintiffs right to have his favorable award against Prentice-Hall remanded back to the District Court for review, as well as by removing the federal constitutional issue through ignoring the First Amendment ruling by the District Court in favor of Du Pont, the appeals judges designed their decision in such a way as to lock up the case forever in their court and bar the author from further legal efforts to assert his rights.[yep,no corrupt judges here,nothing to see,move along DC]
Corporate censorship was now effectively upheld as the law of the land, with ominous national implications for the constitutional guarantees of freedom of speech and press. Once again, as with its lax 1897 incorporation law for corporations around the country, the DuPont family had led America into a fundamental change in the structure of American law.
A similar local victory was won over the Delaware State News. In 1975, Smyth filed suit against the Farmers Bank, seeking $100,000 in compensatory damages and charging the bank with a “willful and malicious effort to retaliate” for articles printed in 1973 and 1974. The bank, according to Smyth, had attempted to “coerce” a higher interest payment in October, 1974, and then arbitrarily terminated the loan altogether in December. 97 Smyth managed to get refinancing through Baltimore’s Maryland National Bank and the Wilmington Savings Fund Society, but it wasn’t long before State News reporters observed that Smyth’s independent character had gone through a dramatic change, becoming noticeably more conservative. Within a few years News editor Charles Elliott and investigative reporters Rolf Rykken and Don Glickstein had seen the handwriting on the wall and left. “What once was a bold, feisty and sometimes outrageous newspaper has lost its spirit, its soul, its guts,” wrote one hold-out, reporter Jack Croft, in 1981, shortly before he, too, resigned. “A few years ago, owner Smyth decided to stop being a newsman and [became] a businessman. Shortly thereafter, the State News stopped being a newspaper and started becoming a business.… Downstate Delaware has lost what could have been a great little newspaper.” 98
Apparently, most of the news staff agreed. Four days earlier, they had filed into Croft’s apartment to offer condolences to a stack of issues lying in wake in a borrowed baby casket. Twenty-three year veteran Jim Miller, the papers first city editor, looked mournfully into the casket and said, “Doesn’t it look natural?” 99
Natural or not, the death of the State News’s crusading spirit has been sorely felt in Delaware. “Now, it’s an ordinary, respectable small-town paper,” says the Philadelphia Inquirer’s Delaware editor, Rick Edmonds, “without much impact.” 100 Joe Smyth has resigned as editor and moved to Phoenix, Arizona, where his father’s Independent Newspapers, Inc., has its corporate headquarters. Jack Costello’s weekly, meanwhile, now called The Sentinel, is still in business.
Next
5. THE THURSDAY NIGHT MASSACRE
633S
Notes 1-100
Chapter 16
1. Wilmington News-Journal, October 5, 1973.
2. David Hoffman, “Our Man Mel,” Delaware Today (August 1974), p. 25.
3. Ben Bagdikian, “Wilmington’s Independent Newspapers,” Columbia Journalism Review (Summer, 1964), p. 16.
4. James Phelan and Robert Pozen, The Company State (New York: Grossman, 1973), p. 345.
5. Ibid., p. 340. The sixth maximum rate on bequests to child heirs, in fact, was lower than in 31 of those 36 states.
6. Ibid., Appendix 3 and 4.
7. Ibid., p. 343.
8. Wilmington Evening Journal, March 8, 1971.
9. Ibid.
10. Phelan and Pozen, op. cit., p. 265.
11. Ibid., p. 224.
12. Ibid., p. 148.
13. See New Castle County, Neighborhood Environmental Analysis (1968); also, Phelan and Pozen, pp. 353–355, 125–126.
14. Ibid, p. 109.
15. Ibid.
16. Ibid, p. 214.
17. Ibid, p. 355.
18. Office of Economic Opportunity, “Poverty in 1959 and 1969 by State and OEO Region,” Technical Note 1; January 3, 1971, Washington, D.C.
19. Delaware Division of Special Services, June, 1970, Bulletin.
20. Wilmington Evening Journal, June 26, 1970.
21. Delaware Today, op. cit., p. 24.
22. Ibid., p. 25.
23. Phelan and Pozen, p. 269.
24. See Phelan and Pozen, Chapter 12; Table 12–1, for example, on page 289, shows just such a ratio in comparing William du Pont, Jr’s estate with the properties of four adjacent homeowners.
25. Wilmington Evening Journal, July 2, 1971.
26. Interview with Melvin Slawik, August, 1983.
27. Ibid.
28. See Wilmington Housing Authority vs. Parcel of Land, 219 A 2d 148 (Del. Supr. Ct., 1966).
29. See Wilmington Suburban Corporation vs. Board of Assessment for New Castle County, 291 A 2d 293 (Del. Super., 1972). The quote is from Richard Peterson’s text of his unpublished July 9, 1975, analysis of the case, to which the author is grateful.
30. Slawik interview, op. cit.
31. Getty Oil Company, Tour Brochure for the Delaware City Complex; also interview with Ted Keller, Chairman, Citizens Coalition for Tax Reform, August, 1983.
32. Delaware Spectator, January 31, 1973. See Phelan and Pozen, p. 295.
33. Delaware Spectator, February 28, 1973.
34. Taxes and People, Spring 1974, citing figures from New Jersey Public Interest Research Group.
35. George Crile III, “The Mellons, the Mafia, and a Colonial County,” The Washington Monthly (June, 1975), p. 50.
36. Ibid.
37. Ibid, p. 51.
38. Ibid., p. 52.
39. Ibid.
40. Ibid, p. 52–53.
41. Ibid, p. 54. 42. Ibid., p. 66. 43. Ibid, p. 57.
44. Ibid., p. 58. 45. Delaware Spectator, February 28, 1975.
46. Delaware Spectator, March 14, 1973.
47. Delaware Spectator, January 31, 1973.
48. Delaware Spectator, August 9, 1973.
49. Wilmington Morning News, September-October, 1973.
50. Wilmington News-Journal, October 10, 1973.
51. Ibid., August 9, 1973.
52. Phelan and Pozen, p. 340.
53. Wilmington Evening Journal, August 23, 1973.
54. 1967 Census of Governments, State Report #8, Delaware, p. 8.
55. U.S. Department of Commerce, State and Local Government Study #43; “State and Local Government Finances in 1942 and 1957” (Government Printing Office, 1958) p. 16.
56. Congressional Quarterly, July 9, 1971, p. 1489.
57. John Gates, The du Pont Family (New York: Doubleday, 1979), p. 175.
58. Philadelphia Sunday Bulletin, November 17, 1974.
59. Ibid.
60. See New York Times, January 24, 1974, p. 22; May 7, 1974, p. 28.
61. Delaware State News, October 28, 1974.
62. Phelan and Pozen, op. cit., p. 306.
63. Delaware State News, October 28, 1974.
64. Ibid.
65. Delaware State News, October 29, 1974.
66. See Phelan and Pozen, Chapter 9, “The Du Pont Dailies.”
67. Cansler to Smyth, November 23, 1960.
68. Delaware State News, October 27, 1974.
69. Delaware State News, November 1, 1974; see also Joseph Smyth to John W. Jardin, Jr. (Delaware News Council), October 31, 1974.
70. Ibid., November 3, 1974. 71. Ibid., November 7, 1979; Nov. 20, 1974. 72. Ibid., November 18, 1979.
73. Delaware State News, November 26, 1974.
74. Ibid., November 16, 1979.
75. Ibid.
76. See Chapter 15, p. 571
77. Gerard Colby-Zilg vs. E.I. du Pont de Nemours & Co. and Prentice Hall Inc (hereinafter referred to as Colby-Zilg vs. Du Pont), Deposition of Governor Pierre S. du Pont IV, Exhibit: Gerard Colby-Zilg to Congressman Pierre du Pont, June 26, 1973. Also Colby-Zilg to Reynolds du Pont, June 26, 1973.
78. Ibid., Deposition of Irénée du Pont, Jr.
79. Ibid., Depositions of Irénée du Pont, Jr., Thomas Stephenson and Oscar Collier.
80. Ibid.
81. Ibid., Thomas Stephenson to Public Affairs Dept., Du Pont Co., June 12, 1974.
82. Robert Sherrill, “The Book That Du Pont Hated,” Nation, February 14, 1981, p. 174.
83. Ibid.
84. Ibid.; see also Colby-Zilg vs. Du Pont, Deposition of J. Bruce Bredin.
85. Colby-Zilg vs. Du Pont, Richard Rea to Public Affairs Dept., Irénée du Pont, Jr., June 17, 1974.
86. Bettina Sargeant to Stephenson (Du Pont Co. memo), July, 1974.
87. Stephenson memo, July 7, 1974.
88. Brown to Stephenson, July 25, 1974 (Du Pont Co. memo).
89. Rea (Du Pont Co.) to Daly (Prentice-Hall), August 8, 1974.
90. Memo to Peter Grenquist, head of Trade Book Division, Prentice-Hall, Inc., September, 1974.
91. New York Times, December 15, 1974, IV, p. 5.
92. Colby-Zilg vs. Du Pont, see Deposition of Clinton Archer, Harold G. Brown and Thomas Stephenson, Du Pont memo on Robert Sherrill (December, 1974); also Wilmington Morning News, November 15, 1979; Philadelphia Daily News, November 16, 1979.
93. Stephenson to Frankel, December 20, 1974.
94. Frankel to Stephenson, December 30, 1974.
95. Stephenson to Frankel, January 17, 1975.
96. Frankel to Stephenson, February 10, 1975.
97. New York Times, April 13, 1975.
98. Delaware State News, February 16, 1981.
99. Rolf Rykken, “The Lingering Death of the Delaware State News,” Delaware Today, June, 1981, p. 27.
100. Ibid., p. 27.
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