Part 15:Dupont Dynasty: Behind The Nylon Curtain...A Dynasty Reborn

DuPont Dynasty 

Behind the Nylon Curtain 

Gerard Colby

Seventeen 

A DYNASTY REBORN 

1. PRELUDE TO REAGANOMICS 

The large colonial chamber in Delaware’s capitol, though packed with people, was hushed, the delegates to the General Assembly showing respect for the man who stood before them. He was tall, lean, and impeccably dressed, his brown hair carefully groomed above a long attractive face bearing thin dark glasses and the cleft chin of his famous family. He was very rich, and now, as governor, very powerful. Yet, in this first major address of his new administration, Pete DuPont was troubled. 

Delaware, he told the startled delegates, was “bankrupt,” a pauper “living day-to-day on borrowed money.” 1 It’s debt would climb to $171 million by 1978, ill tidings for a state with a shrinking tax base and depressed industrial growth. In other states, he claimed, many programs are financed by cities; but in Delaware the state has had to bear the burden. There was only one solution: austerity. He would have to cut $40 million out of the state’s budget, with public education paying the greatest toll. 

Democrats, when they recovered, charged that DuPont was exaggerating, another case of “Champagne Pete” overblowing a crisis to justify insensitivity to the average citizen he had derided as “Joe Six-Pack” during his election campaign. Pete later did admit his bankruptcy charge was not a “legal definition” of the word, but by then it had served its purpose; it made headlines, putting the blame for his proposed cuts on the previous Democratic administration of Governor Sherman Tribbitt. 

The cuts read like a scenario of Reaganomics: $14.6 million from public education; an $11.3 million suspension in cost-of-living increases that had been scheduled for inflation-burdened state employees; welfare costs would essentially be disavowed, and shifted to the backs of county governments. There would also be a huge cutback in highway construction, a transfer of some highway maintenance costs to counties, and a closing of one of the campuses of the Delaware Technical and Community College, the state’s only public two-year institution of higher education and the only source of further education that many high school graduates from the working class could afford. 

There was no doubt who would suffer most. Glenn Kenton, Pete du Pont’s long-time aide who had been appointed Delaware’s Secretary of State, acknowledged that the education reductions would fall hardest on the poorer school districts. But he had a solution: Delaware’s first sales tax. “The problem is that in Delaware we have no sales tax and the 49th lowest property tax in the country. We cannot continue, in my judgment, to support the kind of state services we’re supporting with no sales tax and with the second lowest property tax in the country. The income tax just will not take the load any longer.” 2 

Kenton was merely repeating what Pete had claimed, that Delaware had the highest personal income tax and highest per capita debt in America. 3 Pete’s figures, however, ignored the total state tax paid by Delawareans. When low county and local taxes were plugged into the equation, according to the private, non-profit Tax Foundation, Inc., of New York, Delawareans’ tax bills fell well below the average for all 50 states and ranked eleventh in state and local taxes paid per capita. New York’s $1023 per capita in 1975 was almost 30 percent higher than Delaware’s $727. Delaware, in fact, was in tune with its geographic neighbors: New Jersey at $725 and Maryland at $728. Pennsylvania had a lower annual tax tab of $636, yet many of its residents crossed into Delaware each weekend to shop at its malls. As for personal income taxes, Delaware ranked 26th on the basis of collections per $1000 of personal income, reflecting the many tax-loopholes enjoyed by the rich in the state, which had one of the nation’s highest per person income levels. 4 Throughout the United States, there was an average of one official millionaire for every 300,000 people; in Delaware, there was one millionaire for every 40,000 people, eight times the national average. 5 Obviously, moving vans were a rare sight in Greenville. 

So were registered Democrats. But that did not hinder Governor Tribbitt from endorsing a cut in the capital gains tax, or former Governor Elbert Carvel from endorsing a state sales tax. Nor did it prevent Tribbitt’s Delaware Revenue Study Committee from cutting from the draft of its final report a telling point made by its acting chairman, David N. Williams, that individual taxes had increased much more since 1968 than corporate income taxes. 6 It was, perhaps, understandable that the Delaware Oil Men’s Association were opposed to a legislative act that placed a 1¢ per gallon tax on refined oil, and that Governor Tribbitt so easily bent to J. Paul Getty’s threat to close his only U.S. refinery in Delaware City by vetoing the measure. It was also understandable that the Delaware Association of Realtors opposed an attempt to increase the state real estate transfer tax. But it was difficult to understand why Eleanor Craig, chair of the Delaware Economic and Financial Advisory Council, and Weston Nellius, state secretary of finance, two close economic advisors to Governor du Pont, would now lobby so strongly for sales tax legislation when DuPont had pledged during his campaign to oppose any sales tax. Unless, of course, there was more afoot. 

And there was. 

The first warning of a drastic change for Delaware had been sounded by the governor himself when he loosely used the term “bankruptcy.” He proposed a $56 million, 30- month bond issue to meet the crisis. But the full meaning of that move toward greater indebtedness to private financial interests was lost in the fanfare surrounding the sales tax. 

The campaign was led by Irénée DuPont’s State Chamber of Commerce, and, to be sure, it was earnest. The Chamber wanted to raise $40 million to help meet the $50 million deficit Pete was facing that year. “We are extremely serious about the proposal,” assured Chamber President Ross Amerson. “We feel it is the most practical approach for putting Delaware on a sound financial basis.” 7 

It was not a new line. It had been tried before, by DuPont Chairman Charles McCoy in 1974, for example. McCoy, in an important speech titled, “An Approach to Delaware’s Future,” argued that a sales tax “makes sense for Delaware and should be put into effect promptly.” 8 

It was not, and for very good reasons. It was not fair, David Williams argued, to levy a state sales tax when taxes under existing tax laws were not collected, when there were numerous other untaxed sources of revenue, when the state had no overall fiscal policy, when the division of revenue couldn’t even produce the data necessary for fiscal forecasts, when business taxes were going to be reduced or repealed, and when the state was already being said to be “unattractive” to business. 9 But fairness alone, unfortunately, is no criterion for political practice in Delaware, or in any state. Power is, and it was power that Pete du Pont understood. The opposition of retailers, represented by the small business chambers of commerce of Newark and Dover, had demonstrated that big business was usurping the role of speaking for all “business” interests. The mayor of Delmar, frightened that the sales tax would kill plans for a mall expected to draw Maryland residents across the state border, also voiced his opposition. So did the head of the state AFL-CIO, John Campanelli. And L.V. Crose of the United Auto Workers presented petitions bearing the names of 2000 workers at a public hearing of the House Revenue and Taxation Committee requested but not attended by Governor DuPont. 

But he heard the message. A sales tax was inherently regressive, opponents pointed out, despite the State Chamber of Commerce’s suggested exemptions on necessities such as food and medicine. They did not believe the exemptions would last very long or that the tax rate would remain low. Moreover, a good part of the gross receipts tax, which the State Chamber’s proposal would eliminate, was not paid by Delawareans because much of what was manufactured and wholesaled in Delaware was sold outside the state; a sales tax, on the other hand, would be paid mostly by Delawareans and would discourage out-of-state shoppers. Despite a News-Journal endorsement of the sales tax and Kenton’s claim that du Pont was “softening” his earlier opposition to a sales tax, Governor DuPont wisely deferred and proposed an adjusted gross income tax instead. But he warned the Greater Dover Chamber of Commerce that unless the legislature gave him the $40 million budget cuts he wanted, a sales tax was inevitable. He also said, “We’re going to become ugly, mean and vindictive” 10 about collecting back taxes. Needless to say, Governor DuPont got his cuts. 

The State Chamber of Commerce, however, refused to yield on the sales tax. They were for the cuts, but they also wanted the sales tax. They simply wanted the whole pie, and it was a sign of the times that they thought they could get it. “I think the opposition is a lot more vocal,” said Anderson, “but I don’t think there is that much opposition. It’s real close.” 11 Anderson was banking on the influence of his corporate supporters, particularly his biggest, DuPont Company, represented by Vice President Irénée DuPont, Jr. 

DuPont’s campaign mounted steadily from chief counsel C.E. Welch’s testimony before the legislature on April 21. On May 16, 1977, the Public Affairs Department was geared up by Thomas Stephenson to acquaint its members with Delaware’s financial “plight.” The next day, textile fibers vice-president Robert Forney sent a letter to over 2500 employees urging them to “consider this problem and make your individual views known to your state representative, state senator, Governor DuPont and Lieutenant Governor McGinnes.” 12 Forney denied DuPont was pressuring its employees. “If you read the letter, you can see that the only word I underlined is individual,” he said. Similar notices were sent out to other DuPont employees in the state. As the legislative session’s adjournment neared, Chairman Irving Shapiro threw his own formidable weight into the fray. On the night of June 28, he sent off Western Union mailgrams to targeted employees. 

There was no denying now that Shapiro was pressuring his employees to support the sales tax. “Introduced last Friday in Dover was H.B. 544 which would restructure personal income taxes and enact a 2.9% sales tax,” Shapiro wired. “This bill is consistent with our views. As we understand it, there is significant underlying Democratic support for this measure which may not be forthcoming unless the governor personally endorses the sales tax/piggybacking concept. I urge your support and ask that you telephone or send a telegram to the Governor and your state legislators today so that they will know of your personal concern before they adjourn June 30.” 13 

Shapiro’s willingness to act as “point-man” on the unpopular issue served the interests of the governor. Retreating from Kenton’s “softening” description, Pete now seemed the personification of independence from his family’s company. The state tax issue would be used occasionally for other such displays of supposed friction between Pete and the company during his first term of office, as in December 1978 when Shapiro took to television to describe Pete as a “highly intelligent, articulate, attractive gentleman” who was nevertheless wrong to oppose a “modest” sales tax. He was withholding judgment on the governor’s stewardship, he said, as “it remains to be seen” whether du Pont planned to merely “tinker” with Delaware’s tax system or propose “strong remedial action.” 14 Hercules Chemicals president, Alexander Giacco, accompanying him on the “Perspective Delaware” WPVI-TV show, could not help but refer to himself, tongue in cheek, as “an intruder in the Pete and Irv show.” 15 

While Delawareans were dazzled by the flying sparks, however, Pete was moving to jettison another campaign pledge, one which affected the very basis for any future discussion of Delaware’s financial health. During his first year in office, DuPont dodged his previous commitment to limit capital improvement bonds to no more that $30 million a year 16 by introducing three issues of a new “various purpose” bond that put Delaware under another $48 million debt load and another $40.7 million the following year. 17 

If the governor really had any differences with Shapiro, they did not extend to one of Shapiro’s greatest concerns: anti-pollution costs. “DuPont makes a couple of good cases,” 18 Pete said after addressing 200 members and guests of the Delaware branch of the American Chemical Society at the DuPont Country Club. He said Congress should consider weakening federal water pollution control laws and told the press and listeners that he foresaw no political problems advocating the same position as DuPont. [What a damn joke from the 2020 view DC]

https://thedevilweknow.com/

DuPont Company was then resisting installation of the “best available” water pollution control technology by the July 1, 1983, deadline set by law in 1972. The Company claimed that eliminating the last amounts of pollution did not significantly improve water quality and was too expensive. Pete agreed. 

But residents along the South River at Waynesboro, Virginia, and the south fork of the Shenandoah River were not so sympathetic. A DuPont plant along the river used mercury in production from 1929 to 1950; by 1977, the mercury that the company had found in local fish was still in evidence, four times the permissible level of .4 parts per million. The fish were so poisoned that Governor Mills Godwin imposed a ban in June 1977 on human consumption, and State Health Director Dr. James Kenley confirmed the ban might have to be maintained for years. 19 

To Irving Shapiro, however, the demands of environmentalists were strident, resulted in wasted resources, and delayed creation of new jobs. In a speech before the Southern Governor’s Conference at San Antonio, Texas, in August 1977 he decried that “government simply responds to pressures applied by one-sided public thinkers.” As if he were an elected public executive speaking for “all the people,” Shapiro asserted that “advocacy does not require a balance scale.… Activists speak only to issues that interest them, leaving the other dimensions of the human condition for others to worry about.” As an example, he cited DuPont’s five-year effort to build a plant on the Gulf Coast of the state of Mississippi. Lawsuits filed by a group of 11 people, “a substantial number of whom do not even reside in Mississippi,” had delayed the project, and “many more years may pass” before construction could proceed. “Who has been the loser in the meantime?” he asked the governors, referring to the 500 to 600 jobs promised for the area. 20

Shapiro’s comments revealed more about DuPont’s own anti-environmental control campaign than the facts behind the De Lisle, Mississippi, controversy. What was at stake was not simply a lawsuit by a group of outsiders, but the Mississippi Air and Water Pollution Control Commission’s legally mandated responsibility to protect the waters of the Bay of St. Louis. Save the Bay, Inc. was an organization of state residents backed by environmentalists from nearby New Orleans. What had made Shapiro angry was that they had upset DuPont’s plan to start construction of a pigments plant without having to face legally conducted public hearings as required by law. 

Despite testimony by a scientist from the Gulf Coast Research Laboratory that laboratory tests indicated that the brownish gel effluent from the proposed plant would kill shrimp, a vital source of the Gulf’s fishing industry, 21 the state Commission had gone along with Du Pont and allowed construction to proceed. Environmentalists brought suit in court and were fought all the way to the Supreme Court by DuPont and the Commission. At the high court, new hearings were ordered. Shapiro was furious, not just because of De Lisle itself, but what it represented. “Opposition by groups such as Save the Bay, Inc., points up a growing problem for the company” (Pigments Vice-President Arthur H.) Geil said, noting that “there could be some objection to any site the company picks.” 22 

Mississippi, however, was not just any site. It was part of a grand strategy of shifting plants to the non-union South. In February 1977, DuPont News printed a list of 15 new construction projects authorized for start-up in 1977 or later; of the fifteen, 13 were in Southern states. The state of Mississippi “rates among the very top choices,” 23 Vice President Irénée DuPont, Jr., had told delegates to Mississippi’s first annual Governor’s Conference on Economic Development in 1973. In the past, Mississippi had “ended up as a bridesmaid instead of a bride,” he said. Now DuPont was marrying the state to northern industry, citing taxes as one of DuPont’s top criteria for expansion site selection. Mississippi’s government, unlike Delaware’s, has comparatively little overhead in the way of public services to its citizens, ranking among the nation’s lowest in per capita taxation as well as per capita service expenditures. Irénée apparently did not mention wages and workman’s compensation benefits as being among DuPont’s 84 selection criteria; there, too, Mississippi ranks among the lowest in America, with a standard of living that leaves much to be desired. 

To Wilmington, the state was the vital southernmost link in its “Mississippi Connection,” a system of 24 DuPont plants and terminals along the Mississippi watershed that used the mighty river and its tributaries as a superhighway, shipping more than 10 products and a variety of supplies between factories and then to markets with a fleet of towboats and over 40 huge barges, all controlled by the company’s Transportation and Distribution Department. 24 The Mississippi also provided free water for the company’s manufacturing plants, and it was the efforts of the federal EPA to restore and protect its quality and the nation’s environment as a whole that had drawn Shapiro’s ire. DuPont was being forced to spend another $3 billion to meet federal water, air and noise standards, when, the Chairman claimed, only $750 million was needed to guarantee measurable improvements. 25 

This new assertiveness by Shapiro against environmental laws accompanied Jimmy Carter’s taking of the presidential oath. By that time, Irving Shapiro had reason to feel the worst was behind him. The appearance at DuPont Headquarters in November 1976 of picket lines in sympathy with 35 workers who had been reprimanded for walking off their jobs at the Newport pigments plant over management’s refusal to deal with their grievances had caused some embarrassment, but the issue had sputtered out. Likewise, the outbreak of a mysterious intestinal illness that struck more than 300 Chambers Works employees in September, while making headlines for a brief while, was arrested. The United Steelworkers organizing drive was also being undercut by a rival International Association of DuPont Employees Union that, as of July, included the Chambers Works local union. Charges that the “legionnaires disease” may have been linked to leaks of DuPont’s F-11 fluorocarbon refrigerant used in the Bellevue Stafford Hotel’s air conditioning system (the heat of a cigarette could cause a chemical breakdown of F-11 into deadly phosgene gas, and 80 percent of 21 legionnaires surveyed by the Natural Resources Defense Council smoked; the theory being that the leaks may have found their way through an opening in an air shaft on the second floor of the hotel, where the legionnaires met in hospitality rooms) had been successfully refuted as “unfounded and irresponsible” by DuPont’s director of Research and Development, Dr. Theodore Cairas. The Franklin Institute of Philadelphia found no evidence that the F-11 leak had taken the suspected route. The disease was subsequently attributed to a virus. 

There were a few reversals, including DuPont’s F-22 replacement for its fluorocarbon aerosols. The same day DuPont announced F-22’s introduction, three federal agencies—the EPA, the Food and Drug Administration, and the Consumer Products Safety Commission—also established an unusual joint program to regulate fluorocarbons, declaring that F-22 was also a health hazard. Left without a replacement, Shapiro had to endure the elation of competitors. 

But the greatest problem continued to be fibers. By the April 1977 annual meeting, fibers had made what Shapiro called a “nominal but very welcome profit” to raise first quarter earnings above 1976’s last quarter, but keep them still below that of the first quarter of 1976. Fibers’ ten cents a share earnings were less than nominal; they were disastrous, down from its low of 70 cents of a year before. This continued the pressure on Shapiro, who had leveraged DuPont for the first time in its 174 year history. Since 1973, DuPont’s long-term debt had risen from $250 million to $1.5 billion. Capital spending had outpaced the sales volume by 33 percent, and Shapiro’s cuts in this area, while helping, had not been enough. 

This was what was behind Shapiro’s new aggressiveness against government regulations that increased costs. 

In February 1977, Shapiro launched the offensive in a policy statement issued by the Business Roundtable calling for “great restraint in the future extension of government regulations into American life.” The statement urged that “business leaders bring this special experience, knowledge and competence to the formulation of national policy,” and then “accept the decisions of democracy.” 26 The Roundtable warned against any form of national economic planning for the corporate sector, including wage and price controls, and came out against the Carter Administration’s stimulative package then being debated by Congress. Public spending programs should be replaced by permanent tax cuts, the statement argued, which would spur investment and offset inflation. All available energy resources should be developed, and big oil companies preserved from anti-trust actions. 

The Carter White House was stung. Shapiro was thought to be an ally. 

2. CARTER’S “POINT MAN” 

After his tacit endorsement of Carter just before the election, Carter had named Shapiro as a member of his transition team that recommended high-level appointments and screened other recommendations. He had even been considered for a cabinet post, but begged off, convincing his key contact banker, Bert Lance, and Vice-President Walter Mondale that he wanted to remain in the private sector. 

Now they knew why. DuPont’s chairman wanted to remain a critic outside the Administration, keeping the Democrats in line and challenging federal regulatory laws. Whatever doubts Carter may have had on this score were put to rest when, on the same day Carter named him to head a nine-member panel to search for a successor to FBI Director Clarence Kelley, Shapiro publicly attacked the president’s economic program as an unnecessary consumer tax rebate after a meeting of the Business Council. The economy doesn’t need stimulating, said Shapiro, and “the Social Security job credit does not contribute to capital formation.” He wanted less taxes and a bigger break for big business to stimulate capital investment. Businesses didn’t have the capital to invest, he asserted, and prices didn’t provide an economic justification for constructing factories. “It is inconceivable to me that anyone would invest a dollar in more man made fiber plant facilities,” he said, “because the selling prices are so low that the investment can’t be justified.” 

It was a problem that high technology had bequeathed to most industries, not just manmade fibers; higher productivity and lowered labor costs per product had, through competition, driven prices so low that the volume of sales was not able to keep up with the volume of production; because of the high productivity of labor with new technology and the fixed cost of the machinery anyway, it cost little extra to allow the volume of products available for sale in the market to grow in the hope of bringing in more total revenue with sales. The result was a classic case of overproduction; the market was glutted; as prices dropped further, DuPont could only hope to either artificially buoy prices by withholding products and idling factories and laying off workers, or use its size to absorb the loss in order to drive competitors out of the market. In the United States and Europe, it did both. 

Shapiro’s complementary cause célèbre, therefore, became tariff protection and reduction of inflation that caused interest rates to climb. “When you depreciate a plant,” he explained, “you are depreciating on the basis of the original cost of the plant. When you replace that plant you now face an investment that may be twice as much as the original cost.” With technology and competition working to drive down prices, glutting markets, and lowering total profits, “the retained earnings in the business don’t give you enough to make up for that differential [in new plant costs].” 27 

A week later the Supreme Court ruled against DuPont’s claim that the EPA didn’t have the authority to issue industry-wide regulation on the discharge of pollutants. In a unanimous decision, the Court held that the Water Pollution Control Act authorized the EPA’s enforcement of the mid-1983 standards to which DuPont had objected. The EPA could give variances for individual plants, but was not required to do so for new plants. 28 This, Shapiro had calculated, meant an increased cost of $2.2 billion above the $750 million he considered reasonable. When inflation was added in, the increased costs of new plants were a death knell to his dream of returning DuPont to the 20 percent earnings of the Fabulous Fifties. 

Whatever the merits of his arguments about less environmental controls, Shapiro’s complaints about the increased costs of plants due to inflation could not be dismissed as simply a case of corporate propaganda for tax and regulatory relief. They had a real basis in fact, and it was a problem that sophisticated analysts could discern beneath Shapiro’s public posture of projecting a “good” outlook for DuPont at the annual meeting in April 1977. 

Inflation affected not simply a company’s earnings but also eroded its net assets. To obscure how a company fared under inflation, earnings were reported much higher than warranted. This was made clearer when earnings were adjusted for replacement costs of inventories and depreciable plant and equipment. If the distributable income dropped, so often did the stock, even if the earnings were reported up; the replacement adjusted profits, i.e., the distributable corporate profits after taxes, were often much lower than clever accounting revealed. 

DuPont’s management was guilty of this deception in 1975. Shapiro reported a $272 million profit that year. Why then did Shapiro that year (1974-75) leverage the company for the first time in its history and borrow heavily in the bond market? Because, according to William S. Easman of the prestigious Faulkner, Dawkins and Sullivan research firm, DuPont, after adjusting for the impact of inflation on its replacement costs, had actually “lost” $100 million. 29 

It certainly explained why some members of the family were so anxious to dissolve Christiana Securities and diversify their stockholdings beyond DuPont. 

The SEC requirement in 1976 that all annual reports footnote replacement costs also explained Shapiro’s sudden candor. He was only revealing in February 1977 what the 1976 annual report was already admitting to those analysts with enough savvy to understand what those curious little footnotes really meant. Now, with distributable income figures available, investors could better judge how well DuPont would be able to cover current dividends in the future or even increase them. If the situation looked bleak, the stock’s price might well suffer from investors’ unloading. Shapiro, then, had nothing to lose by admitting the problem and attacking the one area always more vulnerable to acts of will than a glutted market: government. 

The key to the heart of any Democratic administration is organized labor, and it was here that Shapiro, as head of the Business Roundtable, exerted pressure. At issue was the AFL-CIO’s legislative package of proposed reforms in the laws that had governed the American labor movement since the postwar witch hunts had decimated its militancy. Du Pont and the Business Roundtable had been instrumental in defeating the common situs bill to extend union picketing rights in the construction industry, and George Meany, head of the AFL-CIO, was anxious to avoid another defeat. Insisting that “ideology is baloney,” Meany withdrew the labor movement’s 30-year-old demand for the repeal of section 14b of the Taft-Hartley Act, the so-called right to work section the DuPonts had championed in 1947 that had since allowed 20 states to outlaw union shops and compulsory union membership. Gone also was a proposal to put American workers on a par with Canadian workers’ right to get automatic union certification with the signing up of 55 percent of the workers in a shop, as opposed to the current law requiring supervision by federal agents of a secret ballot. “We feel we have proven that all we want are more dependable guarantees of speedy, foolproof elections and stronger deterrents to chronic defiance of labor laws,” 30 said AFL-CIO press spokesman Albert Zack. 

Success, however, hinged on getting the cooperation of the big corporation representatives on the labor-management group organized by Carter’s Secretary of Labor, John T. Dunlop, to voluntarily control wages and prices. Meany’s counterpart in this group was General Electric chairman Reginald Jones, but the real power, he knew, was a new member, Du Pont’s Irving Shapiro, chairman of the Business Roundtable. 

DuPont’s efforts to resist the Steelworkers’ organizing drive made it the company to watch. The New York Times in June 1977 noted that Shapiro was “likely to be a crucial decision-maker on what posture important elements in management take toward the measure.” 31 Meany knew this and sought to convince the Business Roundtable that labor was not seeking any unfair advantage in organizing campaigns or any disruption of established relations with companies already organized. George Meany was not a naïve man. His appeal to the Roundtable, then, was correctly interpreted as a sign of weakness, and the Roundtable let him know it. “From industry’s viewpoint, this [proposed labor law reform] is nothing more than a tool for organizing,” said a Roundtable management official. “It would make it vastly easier for unions to move into the Sunbelt and take over employees in textiles and chemicals where in election after election the workers have shown they don’t want unions. We accept unionism if it’s a matter of free choice, but we’re not going to help railroad workers into a union. That’s as fundamental as motherhood.” 32 

Meany’s retreat was being turned into a rout. “In our opinion,” complained his executive assistant, Thomas Donahue, “these proposals would only be opposed by those employers who seek to thwart the legitimate desire of their employees for organization.” 33 

“Those employers” never needed to be flushed out of the bush. Since the federal legalization of union collective bargaining during the Depression of the Thirties, DuPont family members had backed “right-to-work” groups. The same groups that had defeated Meany on common situs were now arrayed against the labor law reform bill. Chief among these was a shadowy organization called the National Action Committee, an outgrowth of the construction industry. It had no formal offices, no permanent address, not even a fixed name. Yet it was the nucleus of a powerful coalition of some 100 major corporations and their trade associations. 

Its power ironically lay in labor’s weak representation in government on all levels— in Congress, in the Supreme Court, in the White House. Labor unions represented only 17 percent of the American workforce, one of the lowest percentages in the advanced industrial world; its failure to organize the unorganized worker extended from the workplace to the political arena, where few union members actually ran for federal office, abdicating political leadership to the professional self-employed middle class. Without its own representatives, the nation’s workforce had sunk into the apathy of the powerless, while labor unions, despite their small membership relative to the working population, were presented by the media as “Big Labor” symbolized by a cigar- chomping George Meany. 

Big Business fully exploited this situation to launch its anti-union drive. As Harold Coxson, director of labor law for the National Chamber of Commerce put it, “a public mood of antipathy toward the labor movement had encouraged the business community.” 34 Under the sway of campaign donations and pro-business ideology, pliant congressmen had been given a bill to introduce as an alternative to the labor law reform legislation: a proposed ban on union shops throughout America. 

Allied with National Action was the National Right to Work Committee, with a subsidiary whose name more accurately reflected its political view: Americans Against Union Control of Government. With a budget of $5.5 million, this ultra-conservative organization was dedicated to what its president Reed Larson called “the damaging effect of excessive union power.” 35 

Like the Liberty Lobby of the 1930’s, these groups served as a front for DuPont and other large corporations, and labor was not fooled. “As far as the business community is concerned, the respectable business community, these groups are a windfall blessing,” charged Lane Kirkland of the AFL-CIO. “They do all the dirty work, slanderous advertising, the name-calling, and the business community keeps its hands clean and gets the job done.” 36 

DuPont’s hands were not always so clean, however, especially when it came to its own workers. Officials of the National Institute for Occupational Safety and Health (NIOSH) charged the company with hindering a federal probe of the high-cancer rate at the Belle, West Virginia, plant. Dr. Joseph Wagoner, chief of NIOSH’s industry-wide studies branch, first made the issue public in January 1977, when he said DuPont management had refused to allow the agency’s investigators to examine the medical and employment records of cancer victims. DuPont’s Assistant Medical Director, Dr. Bruce Karrh, held that NIOSH had no “legal authority” to review the records; DuPont claimed it was protecting its employees’ right to privacy. 

“I think the situation speaks for itself,” Dr. Wagoner said. “They handed us a study which demonstrated there is a cancer problem at Belle and the methods they used minimized the extent of the hazard. That can only be ascertained with a full epidemiological study as suggested by Dr. Karrh to Congress.” 37 Although Karrh claimed DuPont was “fully cooperating,” Wagoner said the company’s actions were “not consistent” with “cooperation in any way.” 38 

Nor was this the only snag. According to Dr. Betsy Egan, NIOSH’s epidemiologist who headed a five-member team of investigators that collected data at the Belle plant, DuPont’s record keeping was actually replete with “errors” and “a lot of problems”; she rated the company’s records “very poor.” In most cases, DuPont officials refused to provide such necessary information as health insurance data and doctors’ certificates for disability wage payments; and what files they did photostat for NIOSH were often incomplete, leaving out death certificates and parts of work history. “They don’t have full medical records,” Dr. Karrh admitted, “[but] they can do a study on cancer with what they have. These are our employees. We have a responsibility to protect them and we are probably more concerned than NIOSH is concerned.” 39 

Such paternalism in the case of one of the two highest cancer incidences among DuPont’s 80 plants nationwide was presumptuous if not suspect. NIOSH accordingly did not accept DuPont’s excuse for withholding the data, pointing out that DuPont regularly broke their workers’ right to privacy by making such “confidential” medical data available to management for their employment files. “This medical information shouldn’t be contained there because people other than the plant physician had access to it,” Dr. Egan said. 40

Shapiro would not bend. His refusal to honor NIOSH’s subpoena escalated into a test of national law involving ACLU executive director Aryeh Neier, who was sufficiently swayed by DuPont’s claim of protection under the constitutional right of privacy to draw analogies to the case of Dr. Daniel Ellsberg, whose leak of the Pentagon Papers inspired the Nixon White House to send the Watergate burglars to break into his psychologist’s offices to secure Ellsberg’s personal medical records. For some it was an odd twist, indeed, to see a reputedly liberal organization such as the ACLU use the case of a liberal cause célèbre like Ellsberg’s to shield a conservative company management from having to release information that might prove a relationship between the workplace conditions it imposed and cancer among its workers. It was difficult for many at NIOSH to see how Neier’s legal abstraction of a patient’s right to control access to his or her own medical files had any relevance to the reality of DuPont’s own violation of the doctor-patient confidentiality it claimed to be protecting, or that Neier’s argument served anyone but the Shapiro management. “Corporations know precisely what is in their employees’ medical records,” said Dr. Egan, and use them to demote, transfer, and dismiss workers that company doctors discover have chronic ailments. Without identifiable records it was impossible to contact the workers and their families for follow-up information. DuPont’s insistence on providing only records with coded numbers was clearly inadequate, as were the 7700 waivers sent back out of the 3600 it sent out to current and past employees. “We can’t stand behind the results of studies of anonymous workers,” said Egan. 41 

Similar delaying tactics bought Du Pont two additional years for its “Freon” 11 and 12 fluorocarbon propellants. When Oregon banned the sale of the aerosol gases, DuPont’s C. Edward Lorenz, chairman of the Organics Chemicals Department task force handling the controversy, termed the state’s move “premature and unnecessary.” Instead, he endorsed the EPA and FDA’s announced agreement with Du Pont on a plan for a two- year phase-out. By not recalling any aerosols on the market, Du Pont was effectively indemnified from possible legal suits by its manufacturing customers or retailers. 

With acrylonitrile, Shapiro decided to take the initiative. Despite Du Pont’s previous denials of its carcinogenic capacities, medical evidence had been piling up to the contrary and after OSHA began questioning the chemical’s impact on workers, DuPont in May, 1977, confirmed that its own studies indicated an “excess cancer incidence and cancer mortality” 42 among workers exposed to acrylonitrile at a DuPont textile fibers plant in Camden, South Carolina. Principally used in the manufacture of acrylic fibers and synthetic rubber, the chemical was also suspected by the Food and Drug Administration of migrating into beverages in plastic containers made with acrylonitrile. 43 The FDA had already closed three Monsanto plants that made such plastic bottles. Some 120,000 workers in the United States were exposed to acrylonitrile in manufacturing. 44 When the number of consumers who used plastic bottles made with the chemical were also included, the figure ran into the millions, with incalculable long-term effects. 

Such attempts to head off suits or a bad press did not extend to rebellion among employees. Here, on the basic question of power over the company’s direction, operation and policies, DuPont was willing to take a fall. And the results of such a hard-nosed strategy were impressive. A profit-sharing proposal introduced by Ted Keller to extend bonuses beyond management was soundly beaten at the 1977 annual meeting. DuPont paid $45 million in bonuses in 1976 to 10.7 percent of its employees, mostly managers. “Stop taking so damn much money for yourselves,” employee Henry Wright told Shapiro and other managers, “and start giving some to the little guy.” 45 Another employee from Virginia agreed that profit sharing would “make us feel more part of the company,” and Keller asked if “the company would win more brownie points with an incentive plan for the few or for the many?” 

“The issue is not public relations,” Shapiro quickly responded. “It is management and the best use of our money to reach our potential.” 46 

Such “best use” included $171,000 in bonuses to Shapiro in 1976, boosting his total pay to $457,000. 

Shapiro’s biggest employee challenge, however, continued to be those workers who had affiliated with the United Steelworkers organizing drive. The Delaware Valley plants had been particularly responsive, with the Philadelphia, Edgemoor, Newport, Repauno and Carney’s Point plants all pledging to join. But the areas’ three largest worksites, the Chambers Works with 6,500 workers, the Seaford plant with 3,000 and the Experimental Station with 2,000 laboratory technicians and scientists had remained outside the Steelworkers, Chambers disaffiliating to join the independent rival International Association of DuPont Employee Unions, better known as the Southern Association for its stronghold beneath the Mason-Dixon Line. Blocked by the Southern Association and set back in 1977 by workers’ rejection at the Potomac River Works in Martinsburg, West Virginia, the momentum of the Steelworkers seemed to have been halted. “We don’t see any situation different from what we read and heard two years ago,” 47 said Carl De Martino of DuPont’s employee relations department, which was running a program of having plant managers assign supervisors to “assay” workers’ attitudes. 

At the Newport, Delaware, pigments plant it was not hard to tell what attitudes persisted. The workers there had been denied a contract since 1974. When 32 of them finally staged a walkout in 1976 over grievances, plant manager Ralph Fortney negotiated a return to work, and then placed “progress reports” in the files of those who participated in the job action. The local union alleged Fortney had violated a pledge that there would be no reprisals, which Fortney denied, saying such reports were standard in cases of “disruptive” and “insubordinate” behavior. The union filed a protest with the National Labor Relations Board, but the company remained unfazed. 

At the Chambers Works, employees were cautious, and sicker. Twenty-four suspected carcinogens were still being used at the plant. “Cancer is very real down here,” said Mrs. Mildred Lang, director of the Salem County division of the American Cancer Society. “It touches a lot of lives.” But the victims were quiet. “You can’t find one of them to bitch. You accept things. You have to. If it weren’t for DuPont in Salem County this whole place would just fold up and jump in the river.” 48 

The workers’ passivity was fully exploited then, as it had been for decades. Dr. Wilhelm Hueper, former assistant director of DuPont’s Haskell Laboratory in Wilmington, confirmed that DuPont headquarters had been fully aware of the dangers of just one carcinogen, beta naphthylamine, decades before its production was stopped in 1955. In 1938, he and several other scientists wrote a study which warned of the dangers of the chemical. “Before the report on the chemical was published, I was disgusted,” he said. “They [DuPont] didn’t want to know any more—at least not from me.” 49 

Beguiled by the company’s paternalism, the workers fatalistically accepted their lot. “You lose a lot of people who were close to you,” admitted plant manager Paul Humanick. 50 “Most people seem grateful the company was looking after them,” commented cancer specialist Dr. Robert Freilich of the Wilmington Medical Center. “It’s sort of surprising.” 51 

Of the 283 workers who contracted cancer, 220 died; most lived until 55, the youngest died in his early thirties. Paternalism also proved uneconomical in the long run. Besides workman’s compensation, health bills and usual pension benefits, DuPont had made no other payments to the victims or their families. 

Relying on government seemed as ineffective as relying on DuPont, and things didn’t change whether the administration was Republican or Democrat. That applied as well to Jimmy Carter. 

Carter came in tow after September 1977, when Shapiro and other Roundtable corporate officials “pushed our way into the White House.” 52 Carter was then confronted with the aftershock of his first serious scandal, that of Bert Lance. Shapiro had been close to Lance, using him as his conduit to the president. 53 But “knowing the facts he knew” about his banking problems, Lance should never have accepted a job that required Senate confirmation, Shapiro believed. “Anybody with that set of facts would face certain problems in Washington. With the wisdom of hindsight, he [Carter] made a bad call.” 54 After Lance was finally “let go,” Shapiro saw his opportunity, one similar to that which helped him rise at DuPont. The boss had made mistakes. It need not have happened. “He has a chance of being a great president but he has to avoid some of these self-inflicting wounds.” Enter advisor Irving Shapiro, ever the useful consigliere. He and other corporate leaders arranged a personal meeting with the shaken Carter. They told him they were tired of not being able to get by his aides. He needed to listen to their concerns. “It had an impact on his thinking,” he later recalled. “He began to make himself available personally to the business community. He appeared before the Business Council.… He had his picture taken with everybody and then sent autographed pictures and letters.” 55 Shapiro and other corporate leaders rallied behind Carter and when Lance’s successor was chosen by Carter, Shapiro was sufficiently aware of who would replace him that Du Pont’s public relations staff issued Shapiro’s congratulatory statement 24 hours prematurely. 

Shapiro survived the embarrassment to thereafter be referred to as Carter’s “point man” to the corporate community. It was a familiar role for the lawyer, one he had played for the DuPont family for years, and he liked the part. “It would be a mistake to infer that nothing happens in government without calling Wilmington,” Shapiro chided a reporter in January 1978 when asked about his role in selecting the new Federal Reserve Board chairman; but the usual self-effacement could not hide the fact that his recommendation of G. William Miller had indeed been accepted by the president. “We’ve had access to [Carter’s] staff,” he admitted. “On important issues, we’ve had access to the president. We’ve been able to present our point of view.” 56 

Their views seemed to coincide more and more. DuPont’s endorsement of Carter’s energy program was deeply appreciated. “It is high time the nation had a comprehensive energy policy,” stated Senior Vice-President Edward C. Jefferson, head of the company’s key Energy Committee, “and it is encouraging to see the president take strong leadership to define the problem.” DuPont urged deregulation of domestic oil and natural gas, “market mechanisms” always being preferable to raise prices to world levels and “true value” than taxes: “We do not believe it is in the national interest to raise petroleum prices above world market levels … many industrial uses of energy are not amenable to conservation or conversion to non-oil energy sources. For example, feedstock and many process uses from a practical standpoint are non substitutable. Taxing such uses will be inflationary and place us at a competitive disadvantage.” 57 

Shapiro had already guided DuPont into alliances with domestic energy producers such as ARCO and National Distillers. ARCO pulled out of its deal with DuPont, forecasting an improvement in oil supplies, but Shapiro found a suitable replacement with CONOCO. Continental Oil Company had been the western states subsidiary of the Standard Oil Trust and the Rockefellers still held a considerable block of stock in the company and a representative on the board of directors, Nancy Hanks of Rockefeller Brothers, Inc., an aide of Nelson Rockefeller. Shapiro’s decision in June, 1978, then, to join CONOCO in a $130 million joint exploration drilling venture in Texas, where DuPont’s five plants are the company’s principal consumers of natural gas—found no opposition from the DuPont board. DuPont family members had been moving in the direction of the Rockefellers for years, ever since A. Felix DuPont and Laurance Rockefeller jointly founded Piasecki Aircraft Company. Felix had headed up the Delaware section of Nelson Rockefeller’s drive for the 1968 Republican presidential nomination, and ex-Governor Russell Peterson, a former DuPont executive, had even worked briefly for the Rockefellers in the early 1970’s, staying at their Pocantico estate. 

The full implications of Shapiro’s alliance with CONOCO, however, was not perceived in the Carter days. It was seen rather as an attempt to secure petroleum feedstock, which it surely was. What was more important to the Democratic Administration was DuPont’s political support for its new Department of Energy. DuPont, seeing the emergence of a comprehensive energy program as a means to facilitating deregulation of domestic oil and gas as well as more nuclear power, did not hesitate to give Carter what he wanted. “We regard the formation of the Department of Energy as a very constructive step,” said Jefferson. “We are also encouraged by the president’s initiatives on development of domestic oil and gas and speedier licensing of nuclear power.” 58 

Shapiro was in the White House when, in October 1977, the president “was raising hell with the oil industry” before a press conference. After Carter finished, Shapiro turned off the television in Hamilton Jordan’s office and the two men began “doing our business.” Irving Shapiro, counsel to the rich and powerful, had finally arrived thanks to the DuPont's. 

In February 1978, Shapiro threw a large party at the Wilmington Country Club. Several DuPonts came, as did 300 of Delaware’s leading citizens. Politicians, lawyers, federal and state judges, corporate officials, religious and civic leaders, all gathered to welcome the News-Journal papers’ new owner, the Gannett Company, amid rumors that Gannett had included a buy-back clause in the purchase agreement, as once suggested by DuPont’s Charles Reece to Lammot DuPont Copeland to pressure any non-DuPont owner to collaborate in preserving a flattering image of the company and the family. Norman Isaacs was not there; he had left Wilmington in July 1976, his task completed. Mel Slawik was not there either; he was in jail. But Isaacs’ replacement, Andy Fisher, was, and no one doubted he was telling the truth when he assured the happy crowd that “not once have I experienced or witnessed an attempt by the DuPont Company or Christiana Securities Company to influence the context of news or editorial columns.… The papers have been, are, and will be free to report all the news, without fear or favor.” It was “public testimony,” columnist Bill Frank wrote, “contrary to what the Nader cult may think.” 59 The arrangements for the party were made by Harold G. Brown, of DuPont’s Public Affairs Department. 

3. PASSING A MILESTONE 

That month, DuPont’s board of directors welcomed a new member, Edward B. DuPont. Edward had worked for the company from 1960 to 1967; but it was apparent to all that it was his father’s name, not his experience, that won him his seat at the helm of the world’s largest chemical company. Edward was a vice-president of the family holding bank, Wilmington Trust; and his succession to a seat on the DuPont board was more symbolic of the new era the DuPont family had entered than simply a continuation of the clan’s control over the chemical firm. 

The DuPonts, granted, still held the largest block of stock in the company, but Edward’s presence was not the result of any particular expertise in chemical manufacturing or management. Rather, Edward was there as both heir to his father’s huge shareholding and as head of the family bank’s trust department, now more than DuPont Company the repository of the DuPont family’s present and future fortune. As such, Edward DuPont was the living personification of a new financial power emerging on the national scene. 

In 1972, Wilmington Trust was already listed as the 20th largest institutional investor in the United States by the Senate Committee on Government Operations. 60 Its assets were then $7 billion. On the following page are just some of its 1974 stockholdings. 61 

To quietly buy these stocks, Wilmington Trust used two “street names,” Dean & Davis and Hirs & Haney. 

In addition, Wilmington Trust managed DuPont’s Pension Trust Fund, worth $2.5 billion by the time of Edward’s ascension to the DuPont board. The DuPont Pension Trust Fund was then the fifth largest stockholder in three companies: Continental Illinois Corporation (with a 1.54 percent holding), Northwest Airlines (3.7 percent) and Florida Power and Light (1.39 percent). 

The small size of the percentage of total outstanding voting shares owned or controlled by Wilmington Trust in each of the listed companies was reflective of the growing power of minority shareholders over modern corporations with thousands of stockowners. In most cases, no longer do one or two families own the bulk of a large corporation’s stock; in fact, the DuPonts were one of the few families in mid-20th century America to retain such a large holding of a major corporation. Most wealthy families had already made ample use of the ladle of public stock offerings to dip into the vast ocean of America’s wages and salaries. Millions of average Americans, attracted by the corporate illusion of a magically self-expanding capital, and unaware of the source of that expansion in the market value of goods produced by labor each day beyond what it cost an employer to pay for a given day’s wage, found themselves inside the corporate system as simultaneously employee, consumer, and shareholder, yet holding little power over their lives or stock ownership. Instead, as Berle and Means describe in their classic The Modern Corporation and Private Property,* “in the corporate system, the ‘owner’ of industrial wealth is left with a mere symbol of ownership while the power, the responsibility and the substance which have been an integral part of ownership in the past are being transferred to a separate group in whose hands lies control.” 62 

                                  shares       percentage of 

                                                outstanding stock 

United Aircraft              300,000             2.5 

CPC International           85,000               .4 

R.J. Reynolds               140,000               .3 

Caterpillar Tractor         744,100             1.3 

Litton Industries           210,358               .6 

Westinghouse Electric   512,200               .6 

United Air Lines            377,120             1.8 

Northwest Airlines        417,100             2.0 

Norfolk & Western Rlwy. 70,000               .7 

Long Island Lighting     312,440             1.5 

Ford Motor                   285,300              .4 

CPC International           87,000               * 

CONOCO                      189,080              .4 

Mobil Oil                       433,400             .4 

Pacific Southwest Airlines 49,000           1.3 

Rollins, Inc.                   109,327             .9 

Interstate Stores             69,500           1.3 

Potomac Electric Power   100,000            .5 

General Telephone & Electronics

                                    779,037            .7 

Southern Railway           100,000          1.4 

Seaboard Coast Line Industries 

                                    125,380            .9 

“The rapid rise in number of shareholders, both directly and indirectly through stockholdings of insurance companies, mutual funds, and pension funds,” noted Julius W. Allen for the Library of Congress, “has diluted the power of most shareholders and has given management or minority shareholders the possibility to obtain and exercise control.” 63 

“As a result,” wrote Berle and Means, “we have reached a condition in which the individual interest of the shareholder is definitely made subservient to the will of a controlling group of managers even though the capital of the enterprise is made up out of the aggregated contributions of perhaps many thousands of individuals. The legal doctrine that the judgment of the directors must prevail as to the best interests of the enterprise, is in fact tantamount to saying that in any given instance the interests of the individual may be sacrificed to the economic exigencies of the enterprise as a whole, the interpretation of the board of directors as to what constitutes an economic exigency being practicably final.” 64 

“Everyone keeps talking about the Family,” said Irénée DuPont, Jr., on his retirement from DuPont company management two months after Edward became a director, “and the family is not an entity.” 65 The News-Journal noted that “he added that even when some family members do get together they don’t talk business.” 66 

Which might have led many Delawareans to ask what exactly it was that 10 DuPont family members discussed when they met each month as directors of the Wilmington Trust Company. 67 Or when eight DuPont family members met each month as directors of DuPont; 68 or when four members of the DuPont family met each month as directors of Atlantic Aviation, and five other DuPonts met each month as directors of Delaware Trust Bank; or when three members of the DuPont family met each month as directors of Continental American Life Insurance Company, 69 or when four members of the DuPont family met each other each month as directors of Sigma Trust mutual funds; 70 or when at least two dozen members of the DuPont family met each month as trustees of some 30 family foundations or even the University of Delaware. 

Yet the “independent” Gannett News-Journal spoke openly of the “waning of the family’s influence” 71 as if it were fact. No reports were seen, however, of the spread of the family’s influence since the Christiana dissolution into oil (Crown Central Petroleum, for example, now has a representative of E.I. DuPont’s CALICO group on its board as the result of a merger). 72 (Another curiosity is Beneficial Corporation, worth $6.7 billion; now headquartered in Wilmington, this insurance giant includes among its directors former governor and People’s Bank director Elbert Carvel and E. Norman Veasey of the DuPont family law firm of Richards, Layton and Finger. 73 ) 

Yes, everyone keeps talking about the Family. 

But for Irénée, a career was over. “I think I’ve done about as much as I can,” he confessed. “One becomes less inventive in that capacity as time goes by.” 74 Irénée liked to evaluate his contribution as being that of an individual, but he acknowledged that his name “must have been an enormous advantage. It would be highly unusual for a B.S. chemical engineer to reach the level I did without pull.” 75 And being heir to a $250 million fortune from a former president and chairman of the company could indeed be called “pull.” There was perhaps more symbol than irony in the fact that the New York Times when announcing Irénée’s retirement accompanied its article with a picture not of him, but of his long departed father. 

As if to mark the end of an era, DuPont also announced that the Carney’s Point plant which made smokeless powder and nitrocellulose, two products of the turn of the century that launched DuPont into unprecedented profits and the chemicals industry, would soon close. Dynamite, the other product that had been the bridge in the 19th century between the firm’s first product, black powder, and the later explosives of World War I, had been discontinued the year before.

Irénée had told Shapiro he wanted to step down right after the Christiana merger had been completed. But he would remain as a director and, because of his enormous stockholding, a member of the all-powerful Finance Committee. Still dark-haired and young looking at 58 years of age, Irénée ventured that his particular vice-presidency might be eliminated rather than filled, but he had nothing but praise for the man who had been chosen as chairman rather than he. “I supported the line of reasoning that said you get the best operator you have who is familiar with public affairs and governmental affairs and you say ‘go for it,’” he recollected of the 1973 chairmanship sweepstakes. “That was Irving Shapiro. And there wasn’t any argument to the contrary.” 76 Shapiro reciprocated. “Irénée DuPont has dedicated his entire company career to looking out for the interest of DuPont employees. In the fields of employee relations and safety and in the fair treatment of individuals he has played a unique leadership role.” 77 

With Irénée went the last DuPont in senior management of the chemical firm. More might come, but for the time being his passing from the scene was a milestone. It was the first time in 178 years that a DuPont was not active in the company’s top management. 

Only two years before, at the groundbreaking ceremony for Wilmington College’s new library, Irénée had spoken of the last great consigliere to the family before Shapiro, John J. Raskob. But he had been unable to offer anything more to some 50 members of Raskob’s family other than to simply say that “a man of such genius flourished in this country at the time he was most urgently needed.” 78 More should have been said of the “Wizard of Wall Street” and closest business and political ally of Irénée’s powerful uncle, Pierre DuPont. Raskob and Pierre had built the empire Irénée had inherited, and Irénée’s family had maintained close ties to the Raskobs; one Raskob daughter was even bridesmaid to Irénée’s daughter, Cynthia. 

Ironically, it had been Pierre’s insistence on modern managerial expertise and the incorporation of non-family members into the inner sanctums of power that made DuPont, in its success, the corporate giant whose awesome responsibility could no longer be entrusted merely on the basis of filial love. “When I started training young kids and they wound up being my boss,” commented Henry E.I. DuPont, “I said, ‘bye, bye to that.’” 79 “It has become so vast that you might as well be working for IBM,” said Alfred DuPont Dent, whose brother and several cousins resigned “when they realized they were just knocking their heads against a wall.” 80 As early as 1944 E. Paul DuPont could see it coming. He warned his older brother Felix that “I am convinced the Du Pont Company should not have lost these young men,” but Felix would only reply that “The subject … is being studied.” 81 By the time Felix looked up from his studies, E.I. DuPont had led a whole group of DuPont young heirs into a venture of financial speculation that would bloom by the sixties into the $100 million Sigma Group of mutual funds. By then it was too late; some of the family’s best talent had pioneered into the same green valleys of high finance in which the rest of the family would ultimately have to settle. 

Eleuthère’s group, in fact, had drawn the early support of such local family celebrities as Reynolds DuPont and Pete DuPont, both of whom had left the company for a career in Delaware politics. Henry B. DuPont’s sons had tried to follow their father into DuPont, but by the time of the Christiana dissolution, Henry III was dead and Edward had left the company to pursue his father’s interests in aviation at All American Engineering and Atlantic Aviation. Similarly, the namesake son of Richard C. DuPont, who had founded All American, had never gone into the chemical firm but followed the legend of his father into All American and Summit Aviation. Richard’s brother, A. Felix DuPont, Jr., another aviation buff, also failed to inspire his children to follow him into DuPont; likewise the sons of his uncle E. Paul spurned DuPont careers, Alexis I. (Lex) also going into aviation while R. Jacques went into real estate and oil, and Stephen, F. George, E. Paul, Jr., and Benjamin B. went essentially into themselves. The wing of E. Paul’s other brothers went their own way, too, with Ernest’s family watching over Atlas Chemicals or, in the case of Sam F., delving in sheriffing, and Francis’s sons and grandsons revelling in their father’s lucrative field of stocks and bonds, Emile being the only serious exception as a DuPont executive. Only James Q. DuPont’s son, Pierre Coleman, seemed to take the family name’s presence in the chemical company seriously. “I have a little man in me that keeps saying I have to keep the DuPont name important,” he explained. 82 

Edward DuPont’s return to DuPont, then, represented a new development. In the past, other DuPonts had been elected to the board also after having left the company’s management. What made Edward’s ascension unique was that it came when his position as vice-president in charge of the trust department of Wilmington Trust held a particular importance for the family; Christiana Securities’ dissolution had shifted the focus of the bulk of the DuPont fortune from the holding company (and DuPont) to the trust department of the bank. This applied not only to the interest of individual DuPonts to use the bank to pursue their own particular interests in other fields, contributing to the expected growing diversification of the family fortune, but also to the former Christiana leadership and those Du Ponts who retained most of their holdings in the chemical firm in the form of blind trusts for their heirs. This supplemented Wilmington Trust’s role as custodian of the stockholdings of the Du Pont Pension Trust Fund. Thus Wilmington Trust was identified in DuPont’s 1978 proxy statements after the Christiana dissolution as holding an aggregate of over 25 million shares of DuPont common, or 10.6 percent of the company’s total voting stock. 

Edward, therefore, was well positioned at the center of DuPont family power. He had, of course, other investment ties to DuPont Company, including the $3 million in business his Atlantic Aviation did with the chemical company in airplane charter service and maintaining, operating and storing DuPont’s own airplanes, 83 a business, incidentally, that would grow to over $7 million by 1983. 84 And he was also a principal stockholder in DuPont. But his growing power in the family, while derived from his father’s DuPont Company fortune and his own role in the Christiana-DuPont negotiations, was now based on his key position at Wilmington Trust. 

Edward was also a director of All American Engineering (Industries), which put him regularly in touch with Richard C. DuPont’s group (a reciprocating tie with Richard’s serving once on the board of Edward’s Atlantic Aviation). Wilmington Trust was also custodian of stocks controlled by Eleuthère du Pont’s Sigma mutual funds, and shared interlocking directorships through two Du Pont family members, George P. Edmonds and Rodney Layton, with Eleuthère’s Continental American Life Insurance Company (CALICO).[need a damn chart to keep track of all their interlocking assets. DC] 

What affected any of these companies, then, was felt by all, a business community of mutual interests that found expression in the Delaware State Chamber of Commerce, chaired by Irénée DuPont, Jr., and the Delaware Business Roundtable, the state section of Irving Shapiro’s nationwide Business Roundtable, chaired by William G. Copeland, board chairman of Eleuthère’s CALICO and director of the Bank of Delaware and Diamond State Telephone. 

The CALICO chairman became a powerful voice for the united front of big business. Democratic legislators, for example, attempted to pass a tax on life insurance proceeds over $10,000 that would have prevented large inheritances from being “sheltered” from state inheritance tax collection. Copeland publicly derided their bill as “just another piece of goofy Delaware legislation” effectively raising the tax exemption from inheritance tax from $70,000 to a surviving spouse to a maximum of $80,000. He said the 2.5 percent gross sales tax on premiums paid by his customers was already “a hell of a good source of income” for the state, and warned that even if the bill were passed, it “won’t affect our companies at all. Our agents will simply recommend that people move their assets out of the state.” 85 

The bill was not passed. 

4. STEERING TOWARD THE RIGHT 

Irving Shapiro, who joined the CALICO board, lent his voice as well. Since his August 28, 1977, speech before the Southern Governor’s Conference, Shapiro had been mounting a broad attack against federal and state corporate and upper income taxes, environmental laws, and welfare payments, using inflation and lack of investment as the cutting edges of his financial argument. “Thirteen of the 30 companies that comprise the Dow Jones industrial average are trading below book value,” he had told the governors. “The last time this happened was shortly after World War II when investors were fearful of a depression.… Fixed business investments account for less than 10 percent of our gross national product—the lowest rate in any industrial country. Rates elsewhere range from 12 percent (Italy) to more than 25 percent (in Japan). In the United States, the consequences of underinvestment have been severe. The rate of growth in worker productivity is below the historic trendline, and promises to get worse before it gets better.… During the next 10 years the available labor force will increase by 16 million; it will be necessary to create about 1.6 million new jobs a year simply to keep the number of unemployed from growing. It will be difficult to accomplish this at the current rate of investment … higher unemployment but limited gains in productivity. It is a mixed bag at best; we can live with some of it, but not, for long, with all of it.” 86 

Shapiro knew that labor was not the cause of inflation; lack of investment in high-tech machinery was, causing international trade and balance of payments deficits that eroded the value of the dollar on the world’s money markets. Government spending, draining the nation’s privately controlled credit markets, was driving up interest rates that made investment loans impossible. That, in turn, only deepened the productivity and inflation crisis that had come to be known as “stagflation” (for stagnation-inflation). 

The Carter Administration had attempted to arrest the effects of inflation by merely resurrecting Nixon’s wage-price controls, but on an even less effective voluntary basis. It was, of course, incorrect for Carter to measure wage gains against productivity for a number of reasons. First, there is an absolute limit to a worker’s output per hour with a given machine. Second, if a machine is outdated, it will not produce goods as cheaply as another machine in, for example, West Germany; that means American industry will lose out on export markets and the resulting trade deficit creates a payments deficit that weakens the dollar; that hurts the real wages of working people first, the unemployed hardest of all. And all Americans end up paying out more dollars to buy even the less expensive goods from abroad. Third, in such a situation the worker is forced to fight to increase wages. Wages, therefore, should not be measured against productivity, but against inflation. Fourth, if you want to increase productivity, buy or invent new, more productive technology, tools and machinery. That has always been the key to the success of the American economy, not turning workers into slaves. The United State’s productivity, likewise, should be measured against other nations’ productivity, not wages. You only measure productivity against wages, apples against pears, when you want to create a false image against workers and are planning to get your profits, not by earning them on the competitive international market, but by forcing workers to work harder with speedups which cause an increase in job-related injuries and “givebacks” of previously negotiated benefits, including, of course, medical benefits. 

Shapiro knew the social instability that can develop from such nationwide policies and scored Carter’s program accordingly. “Too often in recent years,” he said, “people —particularly people in government—have pointed at labor and management and blamed the wage-price spiral as the root of inflation. That spiral is an effect of inflation, not a cause.” 

Shapiro’s analysis, however, cringed before the political implications of a labor theory of value that was implicit in his pointing at the lack of technological investment as being behind the productivity lag and trade deficits that eroded the dollar. 

He quickly emerged from the depths of serious analysis and beat a fast retreat to the surface of illusory appearances, swimming in the safer, more accepted currents of monetary theory. “The cause is rooted in government deficits and in the fact that the money supply has risen faster than real economic activity,” he offered. “Too much money chasing too few goods is the fundamental cause of inflation.” From there, it was only one more short step backwards to Reaganomics, and he took it. “It is strange,” he said, “that a nation that has concerned itself so deeply with the management of demand —stimulating or restraining consumption according to the needs of the moment—has assumed that adequate supplies, and adequate capital, investment to meet future needs will somehow take care of themselves.” Irving Shapiro, the national spokesman for American corporate leaders, had announced that the Age of Keynes and its liberal New Deal was over. Although it would not be clear until much later, the social and political mentality of big business was retreating into an earlier, darker age. 

In this mind-set, Shapiro had his agenda. “The place to start in balancing the supply side of the equation is the energy area. I hope that when you gather at tomorrow’s general session to consider President Carter’s energy program, you will think hard about the supply side.” In the vulnerable field of energy, he knew he would hit home. The oil crisis had put fear and desperation back in the hearts of Americans. Energy was the one issue that could be used as a wedge against a wide range of environmental regulations that liberals had promoted. After paying credibility’s wages by giving due recognition to the “sense of limits … keener sense of mortality” and “awareness” of “the laws of ecology,” he applied the cost-effective techniques of the balance sheet to measure the worth of both pollution control and human control (welfare). “The job creation ratio between a dollar spent on production equipment and a dollar spent on pollution control is at least two to one. Even those who prefer other sets of numbers will not argue with the principle that if we want more jobs we had better put our money where the jobs come from. We can also agree, without argument, that what is consumed today is not available tomorrow … When we spend, we should seek to solve problems, not merely to postpone them … Witness today the tragedy of our welfare system, which spends some $45 billion annually so that the poor can subsist from day to day, but does almost nothing for the future. We spend, but do not invest … we are trading economic growth for current consumption—in the name of ‘Quality of Life.’ I ask you: Whose life? Without economic growth, the disadvantaged have no chance at all.” 

Confronted by the need for social adjustment, American corporate leaders such as Shapiro retreated to their traditional emphasis on an expanded marketplace. In the name of growth, of promoting private investment, all things would become increasingly possible. What was once rejected as affronts to Americans’ traditional beliefs in equality, justice and democracy, would now, as in earlier times of crisis, become reluctantly acceptable by hard-nosed “realists” who embraced the system they profited by as inevitable and immutable. It was the classic pose of a statesman for the status quo who sought a “proper balance” between the demands for social justice and the future health of the corporate economy upon which the viability of those demands were forced to rest. 

“Advocacy does not require a balance scale,” Shapiro explained, “it is somebody else’s responsibility to use wise judgment in making the critical choices.” He bemoaned the “consumerists, environmentalists, and other ists, including industrialists. Each is a single-minded specialist, fulfilling a separate obligation to think in a single dimension.” Ever the wise judge of human nature, Shapiro offered that such behavior was “human,” rather than socially conditioned by the competitive individualism of the marketplace. He did hold that such attitudes were “perilous,” but only because they inspired governmental inefficiency, forcing government to “simply respond to pressures applied by one-sided thinkers … it is no wonder, then, that we have real trouble establishing priorities that reflect wise judgments.” 

Speaking for all Americans, Shapiro then got to his agenda. He warned that “the United States is unlikely to create the necessary minimum 1.6 million new jobs per year if its capital budgets are burdened by tens of billions of dollars of unnecessary or ineffective spending to make clean water cleaner.” Then he moved onto the regulatory agencies and the courts which enforce the laws, labelling them “an administrative and judicial maze the likes of which the world has rarely seen” and blaming them on “one dimensional thinking.” As his prime example, he lashed out at the “group of 11 people” who “incorporated themselves and began to litigate in the name of a clean environment” creating delays that have cost Mississippians on the Gulf “a $20 to $25 million annual loss to the community in payrolls and plant purchases.” 87 When all the arguments for statesmanship were said and done, Shapiro had ended up just another spokesman for a special interest—DuPont. 

Whatever doubts the Southern governors may have had on that score should have been laid to rest when Shapiro put his alleged concern about jobs in a bluntly corporate context on the front page of the Wall Street Journal. “If a friend of mine in industry,” he said, “calls up and says, ‘Irv, we’ve had a presentation that says we ought to build a plant in Delaware, what do you say?’ I couldn’t in good conscience invite a fellow chief executive to come to Delaware and subject himself to a 19.8 percent [state personal income] tax rate.” 88 Shapiro’s conscience about his “fellow chief executive’s” income was not fairly balanced by his concern for the average Delawarean’s income or the true state of Delaware’s tax system. As Allan Marvel commented in Tax Notes, “That 19.8 percent figure does sound pretty drastic, and Shapiro could cite it, correctly, as the highest marginal rate of state income taxation in the nation. In fact, most income-taxing states apply schedules that do not go above a maximum rate of ten percent. Unlike Delaware, however, most income-taxing states also impose general sales taxes, and in most of them, as well, property tax rates are far higher than in Delaware. Any business executive seriously interested in comparative economics of industry location would surely want to consider the total tax climate, and not just the level of state individual income taxation. 

“But even looking at the Delaware state income tax, one finds the 19.8 percent figure gives a grossly misleading impression … the actual tax burden imposed by the Delaware tax upon taxpayers receiving up to $300,000 a year is likely to be less than five percent of their total income … 1) the high percentage cited by Shapiro is the rate that applies only to taxable income in excess of $100,000; even for taxpayers well above that level, much income is taxed at lower rates, ranging upwards from 1.6 percent; 2) the high percentage also refers only to taxable income, while the ‘less than five percent’ rate relates tax liability to total income, allowing deductions and exemptions; and 3) for high-income taxpayers, a very large fraction of state tax liability is offset by a reduction in Federal income tax, due to the deductibility provision of the Federal law.” 89 

Shapiro, who made well over $300,000 each year, knew this. But his statement was part of a general assault on the state’s tax system that he was kicking off, and even the DuPont administration in Dover was forced to defend its revenue base. 

Pete DuPont’s secretary of state, Glenn Kenton, tried to “get some of the facts straight” when he spoke to financial analysts in Wilmington in October, 1978. “As Mr. Ratledge of the University of Delaware pointed out quite accurately to Mr. Shapiro in a recent letter to the editor of the News-Journal papers, while 19.8 percent is the top marginal rate for taxable income over $100,000, the effective rates are far, far less.” For a $111,000 income, in fact, the rate was really 4.7 to 6.1 percent; for $230,000, actually a lower minimum, 4.3 percent, to a high 7.1 percent, hardly unfair or even very progressive. In terms of state or local taxes per $1000 of personal income, Delaware stood 32nd from the top. 90 

Shapiro would not be deterred. “Tax reform must come to Delaware some day and we don’t intend to back off from that message,” DuPont’s general counsel Charles Welch told the State Bar Association in January, 1979. “The kind of tax reform I consider essential to bring new industry and new jobs to Delaware may not be just around the corner, but I feel strongly that we must have some tax program to keep the people we now have.” 91 He then explained exactly what he meant: exclude all pension income from taxation, double the deduction for federal taxes paid, increase the exclusion for dividend income for Delawareans over 60 by 1000 percent (from $100 to $1000), set up a special 10-year income averaging for lump sum payments from profit sharing and retirement plans, and hike the inheritance tax exemption on transfers between husbands and wives from $70,000 to $250,000. “I realize that in some quarters these proposals will be pegged as benefiting the ‘fat cat,’” Welch admitted. “My answer is simple. Who gets hurt most in Delaware: those without jobs and those who cannot afford to leave.” He once again reiterated the claim of wanting to “minimize the self imposed exile of retired Delawareans.” He also endorsed a sales tax. 

“How do we stabilize our revenue if, as one consequence of a sales tax, we chase out-of-state shoppers back home?” answered DuPont employee Ted Keller of the Citizens Coalition for Tax Reform. He cited the Brookings Institution report that federal deductions on state taxes actually burdened the middle and working classes and benefited the rich. Inheriting $250,000 put you in the top one percent of the population, he also pointed out, and he questioned why a $200,000 pension should be excluded from taxation or given the benefit of a 10-year income averaging. “I get tired of hearing that the only cures for Delaware’s problems are more taxes for most of us and fewer taxes for the rich.” 

Tired or not, Keller was treated to more such statements as the State Chamber of Commerce joined in the attack. Chamber President William Wyer testified before a state legislative committee considering a bill to reduce taxes for higher incomes that Pete Rose, the Phillies baseball star, paid a whopping $800,000 by owner and Du Pont heir Robert Carpenter, could not afford Delaware’s tax; Wyer said the superstar would owe $111,000 even with exemption. Democrat Gerard Cain countered that Rose, at the real 5.2 percent rate, would only pay $33,600, but by June 1979 resistance had collapsed. The News-Journal papers refused to print a tax schedule based on the real effective rates prepared by Washington, D.C., tax expert Thomas Field, and instead used the rates cited by the Chamber. That month, the state Senate passed (with the backing of AFL-CIO state president John Campanelli) and Governor DuPont signed HB334, giving a 31 percent cut in the tax on the highest incomes; Delawareans making $7,000 to $25,000 got an average tax cut of only 6.8 percent. It was a measure of the Democrats’ weakness that one of the sponsors was Representative Gerard Cain. For his leadership, Keller’s tax coalition awarded Cain the celebrated “Dooh Nibor” award—that’s Robin Hood spelled backwards—for taking from the poor to give to the rich. 

But perhaps the most severe blow felt by Delawareans was the effective nullification of some of the most important provisions of Delaware’s nationally lauded Coastal Zone Act. The law limited industrial development along Delaware’s coastline, forbidding heavy industry along a two-mile strip from the coast. It was designed to prevent the coast’s degradation. DuPont Company had not seriously objected to the law when it was passed during the Peterson administration; the Nader Study Group pointed out that the law complemented DuPont’s concern that Delaware’s workforce remain heavily white-collar in orientation with the state’s reputation as a corporate headquarters; Mel Slawik’s election showed that blue-collar loyalties to the status quo were less reliable than commonly assumed. Potential industrial competitors for the state’s blue-collar workforce, including the possibility of higher wages that often results from such competition, was also discouraged by the law. 

DuPont reversed its position, however, as plans for Christiana Securities’ dissolution began to be implemented. 

Previous to then, DuPont’s opposition was limited. But in 1978, as the DuPonts began to consider Delaware’s future within the context of new opportunities for diversified investments—including oil—the company went beyond Charles McCoy’s previous recommendations for “restrictions based not on the type of economic activity, but on environmental and other standards,” 92 and launched a full-scale assault. 

DuPont’s Charles Welch, testifying before the state House Revenue and Finance Committee, coupled his attack on Delaware’s tax structure by telling of a bumper sticker he had seen recently in Texas which read “Let the Yankees Freeze in the Dark.” 

“What Texans are telling us is that Delaware’s Coastal Zone Law speaks loud and clear—Delaware wants all the benefits without taking any of the risks. Delaware cannot achieve a viable industrial program so long as the Coastal Zone Law remains in effect in its present form.” 93 He warned that “Without some immediate legislative action on the coastal zone, we simply will not be in a position to be credible with industry in asking them to locate in Delaware and expand our ever shrinking tax base.” 94 The DuPonts’ Wilmington Trust bank agreed. Vice-President Paul Shipley said the law and the state’s taxes on higher personal income, bureaucratic “red tape” and “management by crisis” was similar to a “beware sign” at the state borders. 

5. PETE’S MAGICAL MYSTERY TOUR 

Pete DuPont, while campaigning for governor, had pledged to keep the Coastal Zone Act intact. After taking office, he reversed his position in alignment with amendments proposed by DuPont and Wilmington Trust. The reason was obvious: oil. Studies had indicated the possibility of large deposits of oil under water in the Baltimore Canyon off the northeastern coast. 

“We hope to get the coastal zone legislation that is in the Senate through so we can take advantage of the offshore oil situation,” 95 the governor said during a trip to New York to consult with Wall Street investors about Delaware’s financial situation. By January 1979, the Delaware State News was reporting that Du Pont “also called on the General Assembly to amend Delaware’s Coastal Zone Act to allow pipelines on shore and support facilities along the state’s coast.” 96 

There was only one problem: Pete was breaking the law. Title 29, Section 5851, Subsection 1 of the Delaware Code read that “In our democratic form of government, the conduct of officers and employees of the State must hold the respect and confidence of the people. They must, therefore, avoid conduct which is in violation of their public trust or which creates a justifiable impression among the public that such a trust is being violated.”

There was no question that Governor DuPont, by pressing for a change in the Coastal Zone Act, was creating an impression that he was violating the public trust. Two of the successful bidders for Lease Sales 40 and 49 were Exxon and Texaco. According to the financial report the governor filed in April 1978, Pete held 1120 shares of voting stock in Exxon, worth over $50,000 as well as additional non-voting Exxon stock held in an income-producing trust the value of which du Pont refused to disclose other than to admit they were worth in excess of $5,000. 97 He also owned 222 voting shares in Texaco worth $5758 and 3280 shares in Phillips Petroleum worth over $97,000, and 440 shares in Standard Oil of Indiana worth over $20,000. 

All of these companies were involved in bidding for Lease Sales 40 and 49. Governor DuPont recorded that his $160,000 holdings in oil companies only brought in a gross income of over $8,000, but there is no way of knowing how much more he received from the Exxon stock in his trust which, considering the huge size of most DuPont family trusts, might easily have been quite a lot. According to Forbes magazine, Pete’s father, Pierre III, reportedly has a $250 million fortune. Considering his age, 72, much of this probably has already been passed on as trust accounts to his three heirs, including his only son, Pete. This would include oil stocks worth millions of dollars, and Pete acknowledges that his trust account holds shares in Exxon and Gulf Oil. Pete’s trust number at Wilmington Trust is 4980, but the total worth of its assets remains undisclosed. By 1983, however, Pete’s admitted shareholdings in Exxon had doubled to 2240 shares. 98 These, like his other admitted holdings, were not put in a blind trust by Pete as other officeholders, such as President Carter, had done. 

Oil’s role as a feedstock for DuPont also compromised the governor’s promotion of oil exploration off the Delaware coast. From 1978 to 1979, the Governor’s admitted stock in DuPont rose in value from over $626,000 to over $891,000, a gain of almost 30 percent in one year alone. 

Title 29, Section 5855 of the Delaware Code is specific: “No employee shall have any interest, financial or otherwise, direct or indirect, or engage in any business or transaction or incur any obligation of any nature which is in substantial conflict with the proper performance of his duties in the public interest.” 

But this was not the first time DuPont had a conflict of interest. He had owned oil stocks as a congressman, 99 too, when, as a member of the Oceanography subcommittee of the Merchant Marine and Fisheries Committee, he took an active role in scuttling the Outer Continental Shelf Lands Act. He was opposed to provisions that restricted drilling to government-owned operations, insisting that private oil corporations could do a better job. Conservationists and environmentalists thought no drilling at all was the best way to protect some of the world’s richest fishing waters from pollution. “I just feel Pete has sold us down the river to the oil companies,” 100 said Delaware’s Grace Pierce. The League of Conservation Voters, which had previously given him high marks, also noticed the subtle change in his votes, and his score declined from a 90 percent rating on “critical issues” to a low 36 percent during his last year in Congress. But no one noted Pete’s oil holdings or asked if any federal conflict-of-interest laws were being violated. Instead, environmentalists were puzzled. 

“He feels his constituency is revolving more and more around the major energy industries,” 101 conjectured Delaware Audubon Society president John Shields. 

It was not a bad guess. 

In mid February, 1978, Governor DuPont flew to Louisiana to discuss Delaware’s potential for oil companies there. In April, as reports of dry wells being drilled offshore grew, Pete told local business leaders not to be discouraged; over 200 wells were drilled in the North Sea, he said, before oil was struck. He predicted that if oil was found off the coast the Port of Wilmington would rival Philadelphia as the number one port on the Delaware River. He had potential boons for other parts of Delaware also. Lewes, for example, could become an important port and Sussex County Airport, he explained, would be an ideal base for helicopters servicing the oil industry. It was enough to make any small businessman swoon. 

May found the governor happily touring Shell’s drilling rig offshore. One year later, he had amendments to the Coastal Zoning Act introduced in the state house, HB 447, and HB 448. “The Governor says he needs the amendments to the Coastal Zone Act as a probusiness signal,” fumed former Governor Russell Peterson. “Yes, Big Oil would be pleased. They have always resented the people of Delaware stopping their plans for despoiling our coastal zone.” 102 Even the News-Journal was opposed to rushing to amend the law. 

HB 447, allowing a Getty pipeline, passed the House on June 12, 1979, but was bottled up in a Senate committee. HB 448, allowing onshore support facilities, almost met the same fate, but escaped the committee bottleneck when it was amended to exclude all tank farms and was passed by the Senate, modified, and returned to the House, where it was not expected to be voted on before the Assembly’s session ended at the end of the month. 

On the next to the last day of the legislative session, Majority Leader William Gordy, realizing that defenders of the Coastal Zone Act were absent from the House chambers, suddenly asked that House Bill 448, containing the governor’s proposed amendments, be considered even though it was not on the agenda. House Speaker John Ferguson quickly moved for an immediate roll call vote on the bill, ignoring amendments that had been proposed and were properly supposed to be considered first. Some representatives rose to object. Ferguson simply ignored them, and the bill was passed. Delaware’s famed Coastal Zone Act had been gutted right on the floor of the House amidst shameless procedural violations. 

In an uncustomary move, the bill was then immediately taken to the governor’s office. There, Pete DuPont signed it into law. 

“Governor DuPont and his legislative allies are sending a message all right,” said an angry Peterson, “a clear anti-environmental signal to the country that will drive away existing and potential businesses and lose more jobs than Big Oil would ever provide. The anti-business image was concocted by the oil companies, their partners in the petrochemical industry and the law firms in Wilmington that represent them.” 103 

Four months later a jet owned by Getty Oil company landed at Tulsa Oklahoma’s airport and careened to a stop. Out stepped Pete DuPont, accompanied by his wife, Elise, and Secretary of State Glenn Kenton, fresh from the Southern Governor’s Conference in New Orleans. Pete and his party climbed into a car and were driven to the Oklahoma Petroleum Council, where he was to address 250 oilmen and their wives on energy. 

“The atmosphere in the room, before his talk, was less than electric,” Theodore Barrington, senior editor of the Oil and Gas Journal, recalled. “He started late; before a group sated with food and drink and panel sessions. Most chins, including mine, were propped up by elbows. We had heard it all before, so many times, and yet here was one more politician about to assault us with the energy word.” 104 

But Pete was not simply “one more politician.” In July, he was one of the few Northeastern governors to join oil state governors at the National Governors Conference in opposing the use of a portion of a proposed windfall profits tax on deregulated oil to assist the poor in meeting their heating bills. Pete said he wanted the money to finance the search by private companies for new sources of energy. Not many politicians from up north were willing to back the oil companies like Pete was. 

If Barrington did not know this, the introduction Getty Oil’s Jack Jones gave DuPont should have been a clue. Jones praised Pete’s “strong leadership” in improving Delaware’s attitude toward business interests, and noted that the changes in Delaware “have been noticed in our industry and around the country. He understands the need for business and government to work together. We have worked closely with the DuPont administration.” 105 

Barrington noticed the audience shaking off its stupor about 15 minutes into Pete’s speech. “People’s eyes opened,” he wrote. “Everybody sat up straighten Soon, no one wanted to miss a word.” 106 

“All you representatives of the big, bad oil industry don’t look so bad to me,” said Pete. He heaped praise on Getty for forging a working alliance with his administration, and pointed out the changes in the Coastal Zone Act as proof of how Delaware’s business image had improved. He encouraged the oil men to bring their business to Delaware and criticized government regulations and “the belief in Washington that it can be solved with conservation alone.” He blamed bureaucracy for the failure of power plants to switch from oil to coal, and attacked President Carter’s curbs on foreign oil imports. He speculated about an oil shortfall by 1985 which could produce “terrible shortages, massive unemployment, and a crippling of American industry’s competitiveness on the world market.” The only solution, he argued, was to “start producing energy just as fast and just as hard as we know how. Stop moaning and groaning about how tough it is to work with the government and get out and do it.… I’m going to count on you all to drill, take risks, invest a little more and find us some more oil.” 107 

The banquet hall rocked with applause. 

“Get smarter,” he exhorted. “Get the government off your back.” 

He was given a standing ovation. 

“He talked our line,” said CONOCO’s Assistant Controller Thomas Pickerell. 

“I am amazed that he is so knowledgeable,” said another oil man. 108 

Barrington was impressed with Pete’s speaking style. “Had he not gone beyond energy, this could easily be written off as the result of a good speaker addressing a sympathetic audience.… This was not the case. Rather, it was one of a stunning, overwhelming speaker capturing an audience.… With barely a reference to his notes, without the slightest break in his logic, he spoke with that sincerity which jaded journalists almost never hear, and when they do, are perhaps overly impressed. 

“As, perhaps, am I. But I don’t think so. The irony of hearing DuPont is that regarding energy or anything else, I have barely heard of him. Scion of a famous family, well into his 40’s, he prompts one to ask: Will he one day be running for higher office?” 109 

As if to answer that question, Pete took the Getty jet to Washington, where he visited the offices of GOPAC, the Republican fund-raising outfit he helped launch to finance Republican legislative candidates—and, of course, future national convention delegates. But first he stopped off at the Getty headquarters in Tulsa to discuss the Baltimore Canyon drillings and the company’s consideration of Delaware for a planned $90 million methyl alcohol plant. He also raised the question of Getty’s proposed pipeline from its Delaware City refinery to Marcus Hook, Pennsylvania. Later that month, the state Department of Natural Resources and Environmental Control, over the protests of Delaware Citizens for Clean Air, granted Getty a state variance to allow its refinery to operate a malfunctioning catalytic cracking unit that was violating air control standards. Repairing the cracker would have given jobs to up to 1000 skilled workmen. Not repairing it allowed small particles of pollution to be emitted that are more easily inhaled in human lungs. 

“I consider myself an environmentalist,” said Pete, back in Delaware, “a person who is very concerned about developing our energy resources from a national economic point of view and someone who’s a friend of bringing jobs here.” 110 

Jobs, in fact, became Pete’s rationale for about every major change he made in Delaware law. It also was his excuse for logging 27,000 miles in out-of-state trips in the first 14 months of his administration. Because the oil and banking contacts on Pete’s itinerary were often kept secret, Dover legislators dubbed the trips a “Magical Mystery Tour,” borrowing the title of a Beatles album. “It always fascinated me that he says he is going out of state to drum up jobs,” commented Senate President Pro Tern Richard Cordrey, a Democrat, “but these trips always involve a small political speech. I believe he gets invited to the political speeches and then arranges (state business) on the side.” 111 Ten of the 30 trips were openly for political appearances at GOP fund-raisers, even delivering the keynote guest speech at the New York Republican Convention, an event that underlined his continuing alliance with Rockefeller interests which dominated New York Republican politics. But Pete was obviously also wooing the oil-rich Sunbelt. In Oklahoma, GOP chairman Harold Hunter, responding to “glowing reports” from oilmen about DuPont’s Tulsa speech, asked Pete to do some fundraising on behalf of his state’s Republican legislative candidates. Texas also called on the governor to raise money among oilmen. In November, he returned to Texas to attend the Republican governors conference. 

His entourage was impressive; it included his energy adviser, two cabinet officials, his press secretary and an aide. There, at Austin’s enormous University of Texas Special Events Center, DuPont strolled up the aisle bathed in spotlight as the university’s 200- piece band struck up “Our Delaware” as part of Gov. William Clement’s $200,000 three-day extravaganza featuring Henry Kissinger, fireworks flashing the outline of Texas near the ceiling, and shouting and hooting Texans—all paid for by corporations, including DuPont Company. 

During that trip, Pete, Kenton and their aides also visited Guatemala, where State Police Sergeant Andy Stayton reluctantly surrendered his pistol before entering the well-guarded office of the dictator, and Mexico, where President Pedro Diaz made a point of playing host wearing a tie from Hagley, the DuPont Company’s ancestral home on the Brandywine. “Did you see his Hagley tie?” Pete asked repeatedly. “That made me feel at home.” So did the DuPont plant he toured. “You’d have known you were in a DuPont plant,” he said to an accompanying Delaware reporter. “They have all the pollution controls in.” 112 

Why Guatemala and Mexico? 

“Both nations are rapidly developing and are particularly interested in Delaware’s technological prowess in poultry production,” Pete later explained. But more was involved than chickens. The Guatemalans hoped “to become self-sufficient in oil and food,” a task easier in the case of oil as Shenandoah Oil of Fort Worth, a company DuPont Company had considered buying, drilled in the western highlands where Indians fought expropriation and some joined leftist guerrillas. 

Oil also held Pete’s fascination in Mexico. “The largest single factor in Mexico’s sudden growth is its large reserves of oil and natural gas … it is important that we work closely with Mexico and Canada in the future.… It would be best—and I have said it many times—if we could reduce our foreign oil imports and rely solely upon production in this nation. However, we must forge closer links and stronger cooperation with Mexico and Canada to bring economic prosperity to our hemisphere.” 113 

DuPont, in both his courting of conservative domestic oil producers and his perspective on Mexican, Guatemalan and Canadian oil providing some replacement for the volatile Middle East’s, was beginning to sound more like a national office holder than a governor of a small state, and others had taken notice. 

“Someone with national ambitions would naturally consider them (oilmen) a political ally,” analyzed former Governor Peterson. “There is a possibility a northeast governor would conceivably be looking for that support in the long run. I don’t want to attach any motive to what Governor DuPont is doing, but it seems to me pretty obvious anyone with national ambitions would find support from the major financial interests very inviting.” 114 

The News Week of Jack Costello, the former State News reporter, also noted that DuPont would be “rapping both President Carter and Ted Kennedy, until he knows for sure who will be the Democratic nominee. A few days ago he popped Ted as the ‘classic liberal’ going off in another direction while the country is going conservative. No doubt the Governor said all that with a straight face, figuring most people would swallow it without ever wondering when DuPont became a conservative.” News Week noted that “DuPont has set up a GOP Political Action Committee to find GOP legislative candidates around the country. Now why would the governor of little Delaware do anything like that? Because he’s building up a bankfull of IOU’s when he makes his national move in ’84.” 115 

Although Pete disclaimed any national ambitions, commentators noted his visits to half the nation’s states since taking office, charming Orange County’s conservative kingmakers of the Lincoln Club, who launched both Richard Nixon’s and Ronald Reagan’s rise, as well as the corporate bigwigs of the exclusive Bohemian Club in California. His GOPAC, thanks mostly to his speeches, had raised $200,000 in one year and helped Republicans win control of the legislative houses of two states, one of them Delaware. By now, Republicans around the country were taking the hint. “Du Pont for President!” shouted the New Jersey host of a $75-a-head cocktail party, and Pete’s dodging of controversial issues such as abortion and right-to-work and his chameleon pragmatism had served him well in all surroundings. “Pete strikes me as a conservative,” said Texas GOP chairman Chet Upham. “He comes across to Texans extremely well. I think he’d do real well.” Wisconsin GOP leader Paul Swain happily called him a “moderate Republican, rather than being a conservative.” But a political aide to Iowa Governor Robert Ray spoke for the consensus: “Du Pont was in Iowa last year” and “he went over very well … I’m sure Pete du Pont has some political ambitions.” 116 

That the support was wide was evident, ranging from Tennessee’s Charles Overby, administrative assistant to Governor Lamar Alexander (“Very attractive. If he wanted to pursue the presidency, he’d have some friends in Tennessee”) to Michigan’s former GOP chairman Bill McLaughlin (“Governor du Pont and his philosophy is a saleable philosophy in Michigan. He would have a good image and would do well. Among organization Republicans, Pete DuPont would be well received in Michigan”). 117 

And the top presidential contenders knew it. “DuPont,” reported Sam Walty of Delaware Today, “is frequently mentioned on most lists of potential vice-presidential candidates. He also remains the most prominent of Delaware’s politicians still uncommitted to any presidential camp.” 118 

Texas’s John Connally and George Bush both visited Pete in Delaware, angling for his support. The message was about the same: more oil, more coal, less government spending, less government regulations, helping big business in helping America. Only the style was different, Connally’s sounding like Oral Roberts, Bush’s like a Harvard professor. 

Pete seemed inclined toward Bush, and the former CIA director reciprocated, calling Pete “a man of total, total integrity … the hope of the Republican party lies in people like Pete DuPont.” 119 

“I gather DuPont wants to be president too,” Bush had told a reporter in New Hampshire after a Wilmington visit, “but not this time. I think he’s trying to broaden his base.” 120 DuPont was certainly in the running as a possible Bush running mate. Bush was not put off by the similarity of their well-heeled backgrounds, stating, “I wouldn’t look for philosophical balance, (though) to some degree you have to have regionalism.” 121 

The ex-CIA chief was also the favorite of the Brandywine. In contrast to his runner up fund-raising position nationwide to Connally, Bush was the DuPont family’s first choice. Bayard Sharp, long a Republican funding angel, threw a party for the Texan from Connecticut which won Bush thousands of dollars from such Du Ponts as Hugh Sharp, Jr., Mary Sharp, Ruly Carpenter, C.B. McCoy, George Weymouth, Mrs. Henry B. du Pont, DuPont Vice-President Charles Harrington and Richard C. DuPont. 

6. RICHARD’S CARIBBEAN CAPERS 

Richard was then also involved in more clandestine operations. He was fuming over President Carter’s lack of support of Nicaragua’s besieged dictator, General Anastasio Somoza. He had met Somoza over the years during his frequent sojourns to the Caribbean and felt that Somoza, whose family had ruled Nicaragua since U.S. Marines had crushed the rebellion of General Sandino in the Thirties, was owed his due as a U.S. ally no matter how bad the State Department ranked his human rights record. Federal law prohibited arms sales to Somoza because of his regimes flagrant violations of human rights. So Richard turned to his private air fleet, Summit Aviation. 

Summit was the multi-million-dollar airplane charter and overhaul company that Richard had founded shortly after the failure of the CIA’s invasion of Cuba’s Bay of Pigs. Growing up with the name and legend of his father, Richard had always been a flying bug. As a boy he went to St. Andrew’s, the exclusive elementary academy founded by his uncle, A. Felix du Pont; there, amidst other DuPonts, he studied at the Irénée DuPont Library and walked the grounds listening to the bells of the carillon dedicated to his father’s memory. Richard C. DuPont had been the champion glider flier who died testing a glider for the army during World War II. A pioneer in aviation, he had founded Delaware’s Civil Air Patrol, and after his death the Du Pont family continued leading the wing in honor of their hero, Hugh Sharp becoming its second commander. 

Richard’s legend grew over the years. In 1946 the first Delaware Air Show was dedicated to him, and his only son, who had flown with his father in a makeshift airborne cradle, must have felt the pull to follow his father’s calling. The insecurity of being a fatherless child was evident in his problem with his weight, but Richard, known as “Kippy” to the family, developed a jovial personality that was genuinely amicable. And he kept his eyes focused on his goal. By the time he entered Emery Riddle College in Miami in 1955, he had already flown solo and was the 1000th member of the Delaware Civil Air Patrol. At Riddle, he majored in aviation business administration. “I’m just naturally interested in it,” 122 he said. It was probably at Riddle, named for the man who founded Riddle Airlines, a CIA asset later active in mounting the Bay of Pigs operation, that young Richard first came in contact with the CIA. This, too, may have seemed “natural.” He was young, fatherless, impressionable, patriotic, all the classic characteristics for recruitment as an “asset.” Whether he was witting or not was not as important as the pro-CIA feelings that predominated among his ultra-conservative family. 

In December 1960, Richard announced he was going to develop Baker Field off Delaware’s Route 896. Baker had become an available option after the closing in January of that year of the Piasecki Airport, named after the company founded by uncle A. Felix DuPont, Jr., and Laurance Rockefeller. 

Within a year Richard had founded Summit Aviation, apparently with the help of a friend, Patrick J. Foley. Foley, however, was no ordinary chum. According to Washington sources, he was an operative for the Central Intelligence Agency. 123 

The following year the DuPonts gathered at their Vic Mead Club for a special event. Richard had married a pretty young woman named Caroline Johnstone. The wedding party was made up of young DuPonts: George Weymouth, Robert H. Robinson, Anne Canby, Natelle Riegel, Julie Smith, Laura DuPont and Richard’s cousin, Richard S. DuPont, son of Sam Hallock DuPont. 

Cousin Richard S. soon emerged as one of Kippy’s closest business partners. In March 1965, the News-Journal ran a photograph of both young men together; Richard S. was named vice-president of Manor Aviation, a charter service company that had held a Cessna franchise since its 1960 founding. The following year Summit was named as a sales outlet for Lear executive jets. Richard had also ventured into other fields, buying the Chesapeake Inn on U.S. 213, a quarter of a mile from the Chesapeake City Bridge, and taking his seat on the board of the aviation company his father had founded and uncle Henry B. DuPont effectively ran, All American Aviation, now called All American Engineering. That year another man was also elected to All American’s board by the DuPonts—Robert Vesco. 

Richard was by then considered one of the most informed men in Delaware on aviation products. His employees often won aviation mechanics safety awards. He was a respected man, owner of a new company, Delaware Air Freight (DelAir), and named by J. H.T. McConnell, a family in-law and head of Delaware Trust, as a member of the bank’s local advisory board at Middletown, Delaware, where Summit was headquartered. He was also a happy man, living contentedly with his wife at Great House Farms at Chesapeake City, just over the Maryland border, where his mother also resided, raising such horses as Kelso and the filly Me at her famous Bohemia Stables. 

Richard lived the good life, and looked it, sporting a rotund figure and beard during his frequent fishing trips to the Caribbean, where he hobnobbed with rich Americans and their not infrequently Latin dictator allies and business partners. Richard showed little regard for the “natives of the Caribbean.” On one such expedition, in 1970, he and his wife took their small diesel-powered yacht, the “Yellow Dot,” some 1500 miles through the Bahamas, catching marlin, tuna, albacore, and dolphins. Pulling in at the dock of the Diamond Salt Company on Long Island in the Bahamas, Richard gave some fish to natives while he took on fresh water and plugged into an electrical outlet. 

“They were really excited,” he said later. “This was like somebody giving us steak. They love fresh fish, but are too lazy to go after them. When you toss one on the dock, they’ll do handstands.” 124 

But with other Americans, it was as clubbish as anything one would find among colonialists of an earlier, British empire. Pulling into French Cay, the DuPonts found a sailboat anchored belonging to an old friend, Dr. Gifford Pinchot of Baltimore. “Here we had gone all the way down the Bahamas chain and see a boat just 30 miles from home. But that wasn’t all. It was owned and skippered by Dr. G.B. Pinchot and the other day at Summit I went into the coffee room and there he was. He has an airplane and gets it serviced at Summit.” In the balmy air of what was then still the playground of the American rich, it was a small world indeed. That night, as if to demonstrate how casually Americans like the DuPonts took themselves as heirs to empire—was World War II really the war for British succession?—Richard and his wife dined at the Pan American Club with Robin Wainwright, British Commissioner of Grand Turk. Strictly Kipling. 

It is, perhaps, too easy to see how Richard, lost in this relaxed and privileged world of fronds and beaches and leaping marlin, would see the Cuban Revolution. Its sweaty desperation and rising outrage simply made no sense amidst the tinkling crystal of chilled Margaritas and hushed, civilized white-tie conversations. It could only seem an aberration, some evil visitation from afar, where bandits schemed to steal what is rightfully ours and enslave a people, first with dreams of the impossible, then with guns. 

So it came to pass that Jimmy Carter opened a window and Richard S. DuPont looked out at the world with fresh eyes and called upon his cousin to join him in a great adventure. They would go to Cuba. 

Richard and his wife met their cousin and Newsday publisher William Attwood and his family in Florida. Attwood had long been invited to come to Cuba by the head of the Cuban mission to the United Nations, Teofilo Costa. From Florida, they flew by private plane to Havana, where they were met by members of the Cuban Foreign Service. 

They toured the giant island widely, visiting a school, a factory, the Revolutionary Museum with its artifacts describing the history behind the 1958 revolution, a youth camp, even a 45,000-acre dairy cooperative managed by Ramon Castro, brother of President Fidel Castro. In Havana, the former waterhole of vacationing Americans and gambling den of Florida mobster Meyer Lansky, they met with intellectuals and several government ministers. It was a far cry from the days when their cousin, Irénée DuPont, Sr., held sway over the island with an influence second only to the U.S. Ambassador, if not the dictator General Batista. They found that Cuba was still a poor country by U.S. standards, but its people were no longer starving and could read and write, attend free school and have a right to a job and medical care. If the individual freedoms and conveniences Americans were used to were not in evidence, they never had been available to most Cubans, who now had more than under the Batista regime. 

Richard S. DuPont was visibly impressed. What he saw shook his political biases to the marrow. “God knows, we’re not pure along these lines, but Cuba has us whipped hands down when it comes to turbulent development. So anyone trying to understand Cuba today must first appreciate what they’ve gone through. To me it’s no surprise that Cuba got behind Castro and, when we failed to extend our help in any meaningful way, that Fidel went the Marxist-Leninist route. What other choice did he have?” 125 

Richard S., or “Dick” as the family called him, was no communist or even a socialist. He was an unabashed believer in capitalism. But to him, U.S. policy had played a role in preventing capitalism from ever having a chance to really develop an internal market in Cuba. “I do not believe that Cuba became a Communist country because socialism prevailed over capitalism. I believe the change was directly attributable to the failure of capitalists to practice good capitalism … our system works only when successful individuals maintain the self-discipline to consider the less fortunate, and do something about their problems. It works only when our government is truly responsive to the majority of its constituency. 

“Today’s Latin American countries bear striking resemblances to pre-revolutionary Cuba. What course they choose will depend largely on how we handle ourselves and on an accurate and enlightened understanding by the United States of these countries.” 

Dick DuPont explained the placement of Soviet missiles in Cuba and the sending of Cuban troops to fight CIA-backed UNITA and South African troops invading Angola as a quid-pro-quo of Cuban reliance on Soviet aid, and termed it “naive” for Americans “to think Cuba wouldn’t respond.” On the other hand, “we have by no means compiled a record we can brag about. It is an indisputable fact that we organized, equipped and launched the Bay of Pigs invasion, based on amateurish and unreliable data collected by our CIA … we have used our ‘good’ offices to pressure other American countries, through the OAS, often against such countries’ wishes, to support the blockade.… The recent CIA hearings chaired by Senator Church have revealed that the CIA has attempted on eight separate occasions to assassinate Fidel Castro. These are not bits of Communist propaganda. These are just plain facts—hard things to accept about ourselves; but this we have done! It is little wonder, therefore, that the Cubans see us as imperialists. We’ve given them every reason to do so.” 

It was an extraordinary admission for any American of the business class, much less a DuPont. Apparently Dick DuPont felt chagrined by what had been done in the name of the American people. He certainly seemed angry at being deceived for so long. “Whether the CIA got out of hand or whether a government sponsored these maneuvers is an important question, but I cannot believe the majority of Americans would condone any of these moves if put to popular ballot. Therefore I say it is high time we as citizens of the United States put some pressure on our representatives to conduct themselves in a manner worthy of the American people. We don’t think of ourselves as imperialists or expansionists or aggressors. Let’s see that our officials conduct themselves accordingly.” 

Dick seemed particularly embarrassed about having to answer for illegal CIA operations when confronting Cubans. He and his cousin had a three-hour conversation with Fidel Castro, and meeting face to face the man who had been billed as an arch villain by the American government and media for so long was an unsettling experience. “I for one didn’t like apologizing for my government’s abuses in Cuba,” he fumed. “I would have preferred to look President Castro squarely in the eye and say, ‘We have only tried to help,’ but I couldn’t, because we clearly hadn’t.” 

As if to ward off any suggestion that a DuPont could be harboring sympathies for socialism or for the communist form of government, Dick was also quick to affirm that he did not have any use for their system. “I believe that capitalism, despite its many imperfections, has clearly proven the best means to the universal end of all forms of government—namely, the funding of the goods and services requisite to an orderly society.” Dick held onto the fundamental tenet of capitalism since the system emerged out of medieval Europe: the essential “fallen” nature of man. Once this view of human nature was accepted, one could more wisely structure checks and balances into government to protect individual rights from abuse by other individuals or government. 

Whatever merit one gave to such a pessimistically weighted view of human desires, the competitive marketplace’s need for individual freedoms balanced by some order had undoubtedly given birth to concerns for individual political rights which may prove to be capitalism’s greatest contribution to social theory and government. The fact that this contribution was often undermined by the economic side of capitalisms competitiveness, however, seemed to escape du Pont in his praise of the “funding” the system generated. For that funding was also based on the acceptance of humanity’s “fallen” nature, and the extraordinary belief that the best way to meet the needs of all the people was to accept and appeal to the worst side of human individual selfishness. Through the individual acquisition of wealth, held and owned exclusively, society was indeed advanced beyond the backwardness of rural life, but at terrible human cost. It was this cost that Dick DuPont recognized as what the majority of working Cubans had been unwilling any longer to accept and had backed Castro’s revolution, much to the CIA’s shock at the Bay of Pigs. 

But to those on the other side of the tracks like Dick DuPont, scion of America’s richest family, capitalism had more good than pain to offer. The misery of Cuba under a U.S.-sponsored Batista dictatorship and the excessive abuses of corporate exploitation was, to him, an aberration, an exception. That the celebration of individual selfishness in the name of “funding” had naturally resulted in a wealthy elite in Cuba and in the control of its economy and government by American business interests, including those of his own family, was simplistically seen as merely a “mistake,” just as the CIA’s analysis was merely “amateurish and unreliable” and its invasion, like the U.S. policy which promoted the intervention and continued the economic blockade, were also only “mistakes.” Dick DuPont, for reasons obviously of his own background’s “blindspot,” had been unable to see any better purpose for government and economic organization than “funding”; in spite of his humanitarian and democratic impulses, he had ultimately, like Irving Shapiro and Irénée DuPont, reduced politics to a question of private financial investments. 

Still, Dick earnestly told readers of the News-Journal that “Cuba has achieved a great deal since the revolution. It is truly amazing to see the high degree of employment, the very strong work ethic, the national pride and the greatly improved standard of living, education and productivity which those people have attained, particularly when compared to the rest of Latin America.” To ideologues among his family who read such a rebuke of their life-long assumptions that work ethic, national pride, and productivity can only exist in an atmosphere of selfish accumulation of money and wealth, such words must have seemed to border on treason. 

But Dick DuPont appealed to reason and history, to the “long-standing ties” of culture and trade that existed in the Americas, and begged his readers to remind themselves that Cubans were culturally more like Americans than Russians and that they should not allow themselves to lose sight of that in their phobia of the Soviets. “It seems absurd that we now espouse a policy of mutual open hostility,” he concluded. “I cannot see why the U.S. supports an economic blockade against Cuba, but does nothing of that sort with Romania, Bulgaria, East Germany and the like. Why wouldn’t it be a simple matter for us to curtail the CIA nonsense, lift the blockade and have the kind of ‘normal’ arms length policy with limited trade, etc., that we espouse with all the other Communist countries?” 

His cousin, Richard C., provided the answer. It was impossible for Kippy to conceive of socialism or revolution in Latin America as being anything but an extension of Soviet subversion, of “outside agitators” from whom Latin Americans, much like DuPont workers with respect to the Steelworkers Union, had to be protected, often despite themselves. 

That meant arms, and Kippy had myriad ties to the military industrial complex through his All American Industries. In May 1974, for example, All American joined ILC Company of Dover and DuPont Company in a $65,000 study funded by the Navy to develop an “Aerocrane,” a lighter-than-air craft using helicopter engines and dirigibles made with DuPont’s Revlar 29 fabric, for logging, ship loading and earth-moving. In 1975, the Air Force awarded All American a $2 million contract to produce launchers for unmanned drones for target practice at Florida’s Tyndall Air Force Base. In 1977, the navy awarded Richard a $1.5 million contract for landing aids for military helicopters, an extension of All American’s business of producing arresting gear made of DuPont nylon tape attached to the ends of cables for aircraft carriers and Navy and Marine land-air bases since World War II. By the 1980 elections, All American had climbed out of the $13.5 million net loss left in 1973 by a fleeing Robert Vesco (who had been allowed to buy 75 percent of the stock in exchange for needed capital) and was registering net sales of $17.5 million and building a new $1.6 million plant near South Chapel Street to produce such new products as the Nissley wind turbine and rotary hydraulic arresting gear. 

The practicalities of such business affairs with the Pentagon and the accompanying regular associations with the military mind, combined with an upbringing molded by family expectations and the fatherless boy’s characteristic need to identify with authority symbols, probably contributed much of the explanation for why Kippy’s mind remained more closed than his cousin’s. 

Given the ultra-conservatism of his family, that was not surprising. What was extraordinary was Dick’s ability to break out of the ideological mind-set of his brethren, a feat no doubt aided by his relationship to the better-informed publishing family of his fiancée, Janet Attwood. 

In May 1977, some 700 guests gathered in Philadelphia to honor eighty-one-year-old Jimmy Doolittle at the Spirit of St. Louis Dinner. Dick flew up a party of seven to the Friday night banquet, including his fiancée and his mother, Mrs. S. Hallock DuPont. It was a testament to the high regard with which Dick and his family were held in aviation circles that he shared the speakers’ table with actor and aviation buff Cliff Robertson and Montana rancher Land Lindbergh, son of the famed aviator who had died three years before. Also at the table was Dick’s aunt, Mrs. A. Felix DuPont; her title as honorary chairman averring the key role the DuPont family had played in the development of American aviation. The Spirit of St. Louis dinners were named for the airplane in which Lindbergh had flown the first trans-Atlantic flight a half-century ago. They were held across the country by the Lindbergh Memorial Fund Committee, chaired by astronaut Neil Armstrong, to raise money for special projects. The project this year was the reconditioning of the original B-25 that Jimmy Doolittle had flown over Tokyo in the first of America’s air raids over Japan. 

Dick had been chosen to escort Doolittle to the reconditioned bomber at Philadelphia International Airport TWA hanger, another symbol of DuPont presence in aviation, Henry B. DuPont having been TWA’s chairman. Doolittle was now old and frail, a mere wisp of the man who had once commanded thousands, been a director of Shell Oil, and during the Fifties, President Eisenhower’s personal inspector of secret CIA operations and assets throughout Latin America. The moment was magic with nostalgia, harkening to the days when American leaders openly analogized their nation with the young Roman Republic, when a courageous “lone eagle” named Lindbergh carried the nation’s banner back to a war-exhausted Europe and another young ace named Doolittle struck at the Pacific heart of an opposing Axis. Now it seemed that the Republic had aged with its warriors, its institutions straining under the mighty burden of militarily defending the unique empire it had molded as Europe’s uneasy heir. 

In many ways, Dick DuPont as an heir to America’s richest dynasty and his family’s proudest days, the son of aviation pioneers and a patrician uncomfortable in the purple robes of an “imperialist,” symbolized the American Republic as it approached what the Trilateralists had called the “crisis of democracy” and what others whispered were its last days. There were those who disagreed, of course, and held that like the dark 1850’s, these days too would pass and the American Republic, through trial and struggle, would enter a new stage in its life and again offer hope for humanity. 

But there were others who felt that no metamorphosis was needed; no fundamental change was being urged by history, that America, like they, had grown too old of mind to change, or need not, indeed, must not. And then there was Richard C. du Pont, who, while his cousin wondered about the future America beside the shoulder of an aging Doolittle, confidently gave tours of the DC-3 he flew against Caribbean revolutions, and time. 

“He has a place in the Caribbean. And he often flies down there,” Steve Seningen, manager of Summit Aviation’s charter operation, said of Richard C. “Sometimes he flies supplies, too. Big stuff he might need. You know.” 

Richard owned a hotel in Haiti and a project in Providenciales, an island in the Turks and Caicos northeast of Haiti. His Summit Aviation had cargo planes which moved “hazardous materials” in small batches out of Delaware for various chemical firms. 126 Summit also had a fleet of Cessna and Piper single- and multi-engine airplanes. Some of these were converted into sophisticated warplanes and sold to dictatorships in the Caribbean basin, including Haiti, Honduras, Guatemala and Somoza’s Nicaragua. 

Richard was not happy with President Carter’s ban on military sales to the Somoza regime. Neither was the CIA. Patrick Foley, the Summit executive Washington sources identified as a former CIA operative, insisted that all of Summit’s sales abroad, including the modified Cessna Skymaster he and du Pont called the “Summit Sentry,” had been approved by the U.S. Government. But when News-Journal reporter Phil Mildford and Joe Trento asked to see copies of export permits, Foley and DuPont refused. Nor could the State Department locate them. 127

It was illegal to ship arms to Somoza or the Guatemalan dictatorship, and whether reports of automatic arms being flown out of Summit’s airport to those countries were true or not, there was no question that the Summit Sentry was outfitted with switches, controls, wiring and mountings for machine guns, bomb racks, rocket launchers, spy cameras, aerial loudspeaker systems and devices for dropping propaganda leaflets. Foley at first had denied the modifications were done at Summit, but later confirmed that they had been done since at least 1976. The conversion, which hikes the cost of the Skymaster from $100,000 to as high as $500,000 when it leaves Summit’s hangers, turns the civilian plane into a miniature attack-fighter-bomber that has the military designation 02–337. This “civic action” aircraft was used extensively in Vietnam for counterinsurgency operations. It was also used to protect the illegal southeast Asia heroin connection by which the CIA funded mercenaries while avoiding Congressional appropriations and committee oversight. 

“I can tell you emphatically,” said an international arms dealer who knew Foley when he was operating openly as a CIA officer, “that these planes have been used by high- ranking members of the Thai military in northern Thailand to protect illegal drug operations along the Cambodian border. They are perfect for that sort of action. You can move some drugs with them, but better, you can keep out intruders with them.” 128 A Thai Royal Navy source confirmed current sales. “We have been promised by Summit … further military conversions,” he said. “We have made the arrangements with Summit,” 129 using airframes made in France, to which Cessna had shifted Skymaster production to avoid stringent export laws. 

Foley also identified two airplanes he said were being modified “for the State Department” for use along the Vietnam coast. 

However deeply Kippy was involved, and reports of automatic weapons being fired from the direction of DuPont’s Maryland farm suggest he is very deeply enmeshed, it appears that Foley is the one who actually runs the operation, assisted by Clifford C. Barry. Both men refused to give News-Journal reporters details of their backgrounds (although Foley admitted being also a 747 freighter pilot for Flying Tiger Airlines, the firm founded by General Claire Chennault of the China Lobby of the 1950’s, who in turn was linked to Robert Dix of the CIA’s Civil Air Transport and Air America). At one point, Barry attempted to prevent Kippy from answering reporters’ questions about Summit’s military conversion. 

The CIA operation apparently worked like this. Cessna manufactured the airframes in France. These were classic bush planes, short-take-off-and-landing (STOL) aircraft capable of a take-off in only 538 feet, and having a ceiling of 10,000 feet, 28,500 feet for the pressurized model. 

A Swedish company made the machine-guns and flew them to the U.S. Army’s Aberdeen Proving Grounds in Maryland for test-firing. Then the guns were shipped across the Delaware border in violation of federal law. Foley denied purchasing any machine guns, but later, according to the News-Journal, “complained about the exorbitant prices the Swedes charge for equipment.” 130 One source told the reporters that at least one machine gun system had been installed at Summit. Another source later told this author that automatic weapons were also being shipped out of Summit Airport to Somoza’s Nicaragua. 131 Still another source said that ultra-light aircraft were being outfitted for spraying such materials as crop defoliants and were being shipped to Guatemala. 132 A visit to Summit in August 1983 found the company still outfitting planes for at least one Latin American regime, probably Guatemala. 

From Summit, the planes were flown to Florida for an expedition, filing papers with customs before being flown out of the country. Theodore Roosevelt III, grandson of the president by the same name and a stockbroker in Philadelphia with the Delaware Fund, flew Summit Sentries down to Haiti in 1978, despite Richard DuPont’s claim that he used commercial ferry services. Roosevelt is known in intelligence circles. Members of his family have been top members of the intelligence agencies, including Kermit Roosevelt, who organized the 1953 CIA coup against Prime Minister Mossadegh that returned Shah Muhammad Pahlevi to power in Iran. Theodore confirmed flying the planes first to Palm Beach, Florida. This is the state, it will be recalled, where Dick DuPont’s brother, Sam Hallock DuPont, Jr., also runs an airline charter service out of Orlando and a company called Aero Finances, Inc., as well as a firm which imports West German firearms, Krieghoff Gun Company. 

Another DuPont aviator said to have favored Somoza was Alexis I. DuPont. “Lex” owns New Garden Aviation and an airfield at Toughkenamon, Pennsylvania. Bearded, trim, with dark hair despite his 50 years, Lex and his son Everitt promote business reliance on general aviation and had ties to Air Force personnel in 1979 and 1980, including Upper Darby’s Major General Mike Bohanick and Philadelphia’s Paul Heintz and airline owner Charles Ludington. 

7. A THORN CALLED 

HUMAN RIGHTS, ABROAD … 

President Carter’s human rights policy also clashed with the DuPonts’ over South Africa. Under apartheid, or segregation, non-whites, comprising 83 percent of the country’s population, receive only 33 percent of the national income. The average African family income is less than the officially defined poverty level, while white per capita income exceeds that of Africans by over 1000 percent. Whites get a free education; Africans must pay. And only whites are legally entitled to vote; Africans are made foreigners in their own country, denied citizenship and forced to live in arid “Bantustans” and carry official passbooks when travelling or working in white areas or living in segregated housing compounds. Black trade unions are subjected to terror and refused recognition. Predictably, the infant mortality rate for Africans is over four times that of whites. Amnesty International documents over 10,000 political prisoners. 

At first the controversy centered around the University of Delaware, which holds some $49 million worth of common stock in American companies with investments in South Africa. Four of these companies, Exxon, IBM, Caterpillar Tractor and Minnesota Mining and Manufacturing played a key role in the apartheid economy, accounting for some $140 million worth of investments. The university also held shares of Chase Manhattan and Citicorp, whose loans had kept the apartheid regime afloat after a world financial boycott following the Sharpville massacre in 1960 and the Soweto uprising in 1976. Students and faculty, accordingly, petitioned the university’s board of trustees to divest their holdings in these companies, as scores of other universities, colleges and other religious institutions and trade unions had done. A chapter of the national Coalition Against Investment in South Africa (CAISA), backed by Clergy and Laity Concerned, presented a detailed 47-page documented report on South African conditions and the American corporations involved. 

The trustees, including many DuPonts, gathered to deliberate. Irving Shapiro assured the trustees that DuPont Company had no investments, branches or offices in South Africa and does no business there; therefore, the university’s holding of over $2 million worth of DuPont stock should be immune from any projected sale. He did not tell the trustees, however, that DuPont does do business in South Africa through distributors. In Johannesburg, for example, are DuPont Cellulose Film, S.A., and the E.I. DuPont de Nemours Photo Products Department; both distributors are openly listed in the city’s telephone directory. 133 

In any case, the DuPonts refused CAISA’s proposal, and the trustees kept their lucrative investments. 

So did Governor Pete DuPont. Pete owned stock in AMAX (which operates mines in South Africa and Namibia, the former German colony now militarily occupied by South Africa in violation of UN accords), Armstrong Cork, General Electric, Exxon, IBM, General Motors and Texaco, all with heavy investments in South Africa. 134 

Pete’s cousin and state director of economic development, Nathan Hayward III, was even more blatant in his support of apartheid. Hayward owned stock in a South African mining company, Vaal Reefs Exploration and Mining Company. 135 

Behind the continuation of American corporations to refuse to honor international sanctions was also another DuPont-supported Republican politician, Thomas B. Evans, who had replaced Pete as Delaware’s sole congressman. Before entering Congress, Evans had represented the DuPont family’s enormous financial clout in the Republican Party as co-chairman of the Republican National Committee. He had followed the political thrust of most of the family in endorsing Richard Nixon’s campaign for the presidency in early 1968 and had been an enthusiastic supporter of Maryland’s Spiro Agnew’s attacks on the media and liberals. “He deserves respect for what he says and stands for,” 136 Evans said in January, 1971. Working under Kansas’s conservative senator, Robert Dole, Evans claimed to have a direct line to the Nixon White House. In 1976, Dole joined Nixon’s hand-picked successor, Jerry Ford, on the Republican presidential ticket, while Evans was carried into Congress by a DuPont-financed campaign. 

The Soweto uprising and its brutal crushing by the South African army that year moved millions of Americans to reconsider their nation’s economic ties to the apartheid regime, but not Evans. On May 1, 1978, the House Committee on Banking, Currency and Housing by a vote of 28–16 reported out an amendment to its Export-Import Bank financing bill that had been sponsored by Massachusetts Congressman Paul Tsongas and passed by the Subcommittee on International Trade, Investment and Monetary Policy. The Tsongas amendment called for the ending of all Bank financing to South Africa. 

By early June, however, the mood in Congress had been changed by frightening statements by Carters National Security Advisor (and Trilateralist) Zbigniew Brzezinski about the dangers of Cuban involvement in Angola and the use of American military planes to supply the efforts of the Mobutu dictatorship in Zaire to crush an invasion by Zairean rebels into Shaba province from across the Angolan border. 

Seeing that the atmosphere in Congress had become more frightened, Evans seized the opportunity to circulate a “Dear Colleague” letter on May 31 saying he intended to offer “a vehicle for positive social change in South Africa but (which) would not impair our exports to that country with which we enjoy a one-half billion (dollar) surplus.” Evans’s new amendment reflected the position of his friend, Leon Sullivan, a General Motors director and Baptist minister who developed a Code of Ethics for U.S. companies in South Africa which called for continued investments as long as the particular company implemented reforms for integration at the workplace. The Evans amendment, which was passed, struck out Tsongas ban on Export-Import Bank financing and substituted the Sullivan code, giving the apartheid regime, in the words of Florida’s arch conservative Representative Richard Kelly, “a whack in the shins rather than a kick in the head.” Exports by American banks and corporations of capital and goods to South Africa continued, giving the regime a vital lifeline of financial and technological support. 

Twenty-six DuPonts, including Dick DuPont, flocked to Evans’s support in his 1980 reelection bid, donating $22,525. In a small state like Delaware, such a contribution carries inordinate weight. DuPont Company’s Edward Jefferson and retired vice president Charles H. Harrington gave another $1000, while Wilmington Trust retired director W.A. Worth wrote out a check for $250. Over $3000 was donated to Evans in 1979 before his campaign even began; among those donors to the Republican was former Democratic gubernatorial candidate John H. Tyler McConnell. 137 

George Bush got a similar amount for his primaries, $21,175 from 33 DuPont family members; DuPont Company officials Jefferson, Heckert and Harold E. May gave another $1000, and Worth, $500. Texas’s John Connally attracted only $5,600, plus another $1000 from DuPont’s C.H. Harrington. Tennessee’s Senator Howard Baker received the least, $1750; Harrington seems to have spread his bets here also, giving $1000. 

Ronald Reagan was not favored, perhaps because he was widely considered too conservative to be electable. W. Laird Stabler was the only Republican family member in Wilmington who gave to his run for the nomination, and then only $500. Philadelphia’s James Biddle, married to Lammot DuPont Copeland’s daughter, Louisa, gave $500, while Florida’s Coleman Walker, an in-law of the Andrew and Bissell families, got up $250. After the election, Ronald Reagan apparently inspired John H.T. McConnell to again show his capacity to cross party lines if the Republican candidate is conservative enough. On November 21, 1980, he donated $1000 to the Reagan/Bush Committee. 

Reagan seems to have inspired little confidence at DuPont Headquarters. No executive except retired C. H. Harrington ($250) gave to his primaries, although he was clearly the front-runner. This undoubtedly reflected Du Pont’s concern that the Republicans needed a candidate with wide appeal to beat an incumbent Democratic president. And Wilmington clearly wanted Jimmy Carter out of office. 

This was not just the average big businessman’s preference for a Republican president. Carter had, in Wilmington’s view, bungled foreign policy while proving unreliable on domestic issues such as regulatory relief and organized labor. DuPont was struggling to free itself of its traditional dependence on artificial fibers and was hoping to recoup losses by further investing in cheap labor factories in the Third World and by moving away from the bulk commodities end of petrochemicals in the United States and moving “downstream” to specialty chemicals and high value-added thermoplastics, X-ray films, pharmaceuticals and agricultural chemicals. “Fibers isn’t the business of the future as it was of the past,” 138 Chairman Shapiro had finally admitted in October 1978. 

Abroad, the big loss was Iran. The sheikhs and shahs of the Middle East had told American companies that if they wanted to ensure their access to oil supplies, they should build petrochemical plants in the Middle East. When oil shortages eased in the West, many American and European companies cancelled their plans for Middle East plants. Shapiro, however, had already pushed Du Pont’s new polyester plant in Iran to completion. When civil strife broke out in that country in late 1978, Du Pont was stuck with its 40 percent investment in a large factory that had just started production that year. 

As protests in Iran grew into revolution, private entrepreneurs fled the country with $3 billion and production shutdowns forced the Shah to cut $10 billion from his $47 billion budget because of lost tax revenues. He had planned to borrow $4 billion from American and European banks to mitigate the financial crisis, but the potential instability had also hurt Iran’s credit standing in the West. 

The DuPont plant became expendable. The Shah backed off from the guaranteed subsidies he had promised DuPont, including exemption from import duties on raw materials. Amid mounting unrest, the Shah suddenly became a titan of humanitarian concern for Iran’s laboring classes, the rural peasants and industrial workers, and waxed gloriously nationalistic. “It will be unconscionable to extend such protection to this (DuPont) venture which favors some wealthy people,” stated one of his officials, “and to take the money from basic needs at home.” When the smoke cleared, the Shah, too, had fled with billions of dollars, the Carter administration was confronted by the Ayatollah Khomeini’s withdrawal of billions of dollars in Iranian assets from Chase Manhattan and other New York banks, and DuPont was out $40 million. After the CIA and U.S. military officials, working out of the Tehran embassy, failed to repeat their 1953 success in fomenting a military coup and the Iranians seized the embassy, President Carter froze Iran’s assets in U.S. banks. DuPont was among the first American companies and banks to apply for a cut of Iran’s money to recover its $40 million loss. Iran, meanwhile, held the embassy’s personnel as hostages for its seized assets. The stalemate would last exactly a year, fatally hurting the presidential campaigns of both Carter and his major Democratic challenger, Senator Edward M. Kennedy. 

As a result of media coverage which all but ignored the key issues of Iran’s assets until the hostages’ impending release, and the growing frustrations of a misinformed public, and the ensuing public anger, American political opinion took a sharp turn to the right, benefitting mostly the one man the DuPonts had thought unelectable: Ronald Reagan.

By the time the presidential campaigns were underway, DuPont Company had other reasons to dislike the Carter Administration. Carter’s severing of diplomatic relations with Taiwan cast a shadow over DuPont’s expanding Pacific operations. The company had just opened a new “Tovex” water gel explosives plant in Hong Kong and owned two subsidiaries in Taiwan. At the Neili industrial district in the capital of Taipei, DuPont Taiwan Ltd. employed hundreds of Taiwanese to manufacture electronic connectors for slitting and packaging “Mylar” polyester film and made paste compositions and components for DuPont’s new automatic clinical analyzer. And more was on the agenda. DuPont Taiwan Ltd. was then in the middle of constructing a plant near Lung Tang to produce its “benlate” fungacide and “Lamate” insecticide. In addition, its Pacific marketing subsidiary, DuPont Far East, Inc., had a branch office in Taipei. Of 650 DuPont employees, all but seven were Taiwanese. In Wilmington, the International Department uneasily announced DuPont expected to continue its activities on the island. 

DuPont then had 26 percent of its capital invested abroad, and Shapiro had plans to increase this to 33 percent. Behind this move was not only the lure of cheap labor but the worry that consumer spending in the United States would continue to drop as the economy slipped deeper into expected recession. But foreign competition was stiff and expected to get tougher, especially as the socialist countries began to increase exports. In Eastern Europe, 60 modern petrochemical plants were on the drawing boards or under construction, and Third World markets were expected to dry up as those countries developed their own industries. Libya already had a $2-billion petrochemical industry, Iran a $4-billion complex, and Saudi Arabia had four world-scale ethylene crackers. 

In Europe, where oil feedstocks were higher priced than in the United States, synthetic fibers continued to operate at a loss compounded by price cuts resulting from a lack of demand and a glutted market. DuPont’s European headquarters at Geneva, faced by the third straight year of losses, phased out its acrylic fibers plants in Holland, and looked with relief when eleven European competitors established a fibers cartel to fix prices; DuPont had already seen its prices decline 15 percent since 1974 and hoped the cartel would stabilize prices while it reduced output. The Europeans, meanwhile, charged DuPont with dumping its surplus on the market. 

In the States, DuPont made the same charge against Japan, threatening to unleash a politically dangerous trade war by filing an official request for a Justice Department investigation. Pressured by a worried White House and the Tokyo government, Japanese firms agreed to raise their price for yarns by as much as 30 cents per pound, and DuPont, satisfied, dropped its charge in Washington, ignoring the protests of consumer federations.

Although Du Pont’s $545 million earnings on 1977’s $9.4 billion sales was a lower performance than, for example, Eastman’s $643 million earnings on only $5.9 billion in sales, Shapiro had not given up his goal of restoring the company to the 20 percent earnings it had scored in the legendary Fifties. “Our gamble is that with the largest R&D (research and development) budget in the chemical industry we will create enough products each year to keep our momentum going.” 139 He downplayed the lag in the industry and the 30 percent excess capacity during the summer of 1978, claiming “our greatest strength is we can go worldwide every time we invent a product.” He was banking on his newer “high-tech” ventures in electronics, photo products, agricultural chemicals and pharmaceuticals, and analysts noted that they now produced 25 percent of DuPont’s total sales. “I hope I’m not selling myself to you,” he said, “but I would rather be around for the next ten years than the last ten years.” 140 Shapiro was then 62 years old and scheduled to retire in 1981. 

Despite such displays of optimism and a relative increase of profits from the bottom DuPont had reached in 1975, there were disturbing signs that most of Du Pont’s problems were out of its control. The worldwide recession had hurt sales of new houses and cars, big users of DuPont plastics. The ARCO deal had fallen through, and Shapiro tried to compensate with joint ventures with CONOCO in 1978 and Shell Chemical in 1979, the latter designed to provide Du Pont with about one-third of its ethylene, propylene and butadiene needs for at least ten years. But oil prices were not expected to decline during that period. In fact, they would probably rise even higher. 

The impact of this had been felt by DuPont in more diverse ways than simply increased costs in feedstocks. Sometimes it was felt in public relations. Conservationists charged that synthetic fibers were a waste of fossil fuels when natural fibers were available. DuPont, however, had led the conquest of the natural fibers market with its low-priced synthetics, and was criticized in both Europe and the States for doing exactly what Shapiro had lauded.

Rising oil prices, on the other hand, had eroded the value of DuPont’s cash reserves. European countries using much more imported oil than the United States were soon forced to use the price of a barrel of oil as a barometer of gold’s market value rather than the U.S. dollar. The higher values set on gold reserves in turn affected the value of paper money they backed. To make the diminished value of currency palatable and avoid a tight money market, more paper money was printed to keep up credit lines for business. The value of gold began to rise.

The International Monetary Fund, dominated by American banks, had attempted to defend paper currency against gold, insisting on valuing gold at the traditional $35 per ounce, but when it auctioned some of its gold reserves, it was forced by the soaring price to abandon its own principle and take the $275 per ounce others would have profited by if it had not. European demand for gold increased even more, draining reserves held by the U.S. Treasury from 1971’s 70 percent of American gold reserves to 1979’s 25 percent; 75 percent, or roughly 1 billion ounces, were held in the vaults of the nation’s private central banks. Three billion ounces of gold were in circulation in the world that year and only one billion ounces were estimated left to be mined. With production held at a steady 50 million ounces per year, mostly by South Africa, that meant that the gold supply would be exhausted within 20 years, or the year 2000. In the long run, then, gold prices could be expected to continue to rise. In the short run, gold could be expected to be very volatile, responding to political events that, for example, might increase the price of energy; anything that stymied production from the wells of the Middle East, such as Iran’s revolution, would increase gold’s value in oil importing countries such as Europe and Japan, eroding the value of paper money held by American banks and corporations, including DuPont. And as long as American industry’s productivity lagged behind that of Europe and Japan, creating deficits in trade and payments, the value of the dollar would in the long run decline more than the value of European or Japanese currencies. Measured against each other, the U.S. dollar would be worth less than Swiss francs, deutsche marks and Japanese yen.

DuPont, like other American banks and corporations, tried to mitigate the impact of this loss in the dollar’s value by speculating in the world money markets, but currency fluctuations cut deeply into DuPont’s earnings, costing 13 cents per share in the last quarter of fiscal year 1977 alone. Yearly improvements in earnings, therefore, became even more crucial to Shapiro—if his 20 percent goal was ever to be reached. And he tried to salvage their value by struggling daily “to maintain a favorable balance in other currencies,” using the computers run by H.R. Sharp III of the Finance Department. “Manipulating foreign currencies is the closest thing we do to shooting craps,” 141 Shapiro assured a concerned stockholder at the April 1978 annual meeting.

In his modest, wood-panelled office with its unusual, neo-impressionist portrait of the famous three DuPont brothers who made DuPont into the world’s largest chemical firm, Shapiro insisted: “We’ve regained the momentum. Now we can restore ourselves as the premier company in this industry,” but the fibers division still lagged at only a 4.4 percent net profit on its huge capital investment of plants and debt service.

8.… AND AT HOME 

The DuPonts on the board were placing much of the blame on the president. Carter had lowered the chemical industry’s rating for priority allocations of oil. He had also not thrown enough support, they believed, behind the company’s struggle to keep up tariff duties against foreign fiber imports. Nor had he stopped the Federal Trade Commissions suit against alleged anti-competitive pricing by DuPont, NALCO chemicals, PPG Industries and Ethyl Corporation for antiknock gasoline additives.

The FTC had charged that the four companies which controlled 80 percent of the $600 million a year titanium dioxide pigment market had signalled price changes to each other well in advance through press releases, “eliminating uncertainty about each other’s willingness to follow an upward price lead,” according to FTC’s Alfred Dougherty, and “not overreact to downward momentum.” The Justice Department concurred, stating that the practices, while not showing evidence of collusion, constituted anti-competitive action. Shapiro accused the FTC “of seeking to impose on industry the personal social views” of Carter’s FTC chairman Michael Pertschuk, and held that any of thousands of price decisions routinely announced to the business press could at any time be alleged illegal at the FTC’s whim. But the Justice Department denied that. “This kind of communication may have anticompetitive effects only in certain well-defined circumstances.” 

Shapiro developed a legal strategy that he would use in other circumstances, including the Behind the Nylon Curtain suit, resting his case on the Bill of Rights and stating that DuPont, as a “corporate citizen,” had the right of free speech. He filed suit in Wilmington Federal Court to block the FTC complaint, knowing that the Supreme Court under Chief Justice Warren Burger and other Nixon-era appointees were now opposed to broad readings of enforcement powers of federal regulatory agencies. On September 18, 1979, the deadline for compliance, administrative law judge Miles Brown dismissed the FTC’s case, holding that DuPont’s advantage had resulted from “intelligent planning” and the company was not required to be less aggressive in capitalizing on its advantage. Shapiro was elated, but large problems still loomed. That day, as the Iran crisis grew, wild trading soared gold to $377.

Shapiro, in his desperation, tried many tacks. To cut costs, he closed DuPont’s dyes factories, surrendering back to the Germans the business the DuPonts had stolen in the 1920’s when they took over the dye patents seized from German companies during World War I. One of the plants affected was the controversial one in Puerto Rico’s Manati River, where 300 workers were employed. 

Shapiro also continued to restrict research, and overhauled the company’s time honored committee structure founded by Pierre DuPont. The star of former President Edward Kane fell with fibers. “It was a management failure,” 142 Shapiro said of the decision to expand fiber plants and absorb the $1 billion in shipping cost increases with OPEC’s price rise, forcing the whole fibers industry to follow DuPont into disaster. Kane took the fall.

On the other hand, the star of Robert C. Forney, vice-president of plastics products and resin which had 21 percent net earnings, rose. Forney, who had enough courage to foresee the end result of 27 years in fibers and act on it to join the photoproducts department in 1977, came onto the board as a senior vice-president in January 1979. His successor, Roger Drexel of biochemicals, signalled the rewards accruing to those who found themselves part of DuPont’s shift to specialty products and genetic engineering; Drexel had emerged in the hierarchy with agrichemicals and followed that development into biochemicals when the latter department was established in 1972, underlining the close affinity between the chemistry involved in insecticides and drugs for humans. Drexel, in turn, was succeeded by Dale Wolf, one more rising star out of agrichemicals into biochemicals. Another winning division was Pharmaceuticals. Endo Laboratories’ business in anticoagulants and painkillers was grossing $75 million a year in sales. By 1979, DuPont admitted it was on the lookout for a $400 million pharmaceutical company.

In Photo Products, another money-maker, Shapiro placed John Metzger, Jr., an ambitious young executive who had managed to escape the Polymer Intermediates Department in late 1974 and latched onto the growing new field. Photo Products offered much promise, particularly in X-rays, DuPont’s largest contribution to the growing health-care field. 

But perhaps the most significant personality to emerge out of all this was Edward Jefferson. A native of England, Jefferson represented everything Shapiro admired; he was calm, decorous, charming, well-educated (he had a doctorate from the University of London), reserved—and very effective as a manager. Jefferson had joined DuPont in 1960 and used his English schooling to successfully run the research program of the plastics division. Soon he had been promoted to assistant general manager of two departments and then was running the entire division. In 1972 he was appointed vice president and general manager of the film division and in 1973 was made a senior vice-president and member of Du Pont’s six-member executive committee under the new chairman, Irving Shapiro. 

In January 1979, Shapiro reorganized the Central Research and Development Department, the company’s fundamental research and long-range development arm, to respond directly to Jefferson, who was given responsibility for “the broad direction and coordination” of all other research and development activities in DuPont. Industrial and staff departments were effectively stripped of their liaison representative in the Executive Committee. Shapiro acknowledged Jefferson’s appointment as “an important departure from past practice.” 143 Jefferson would now act as liaison for both the Corporate Plans Department and the Engineering Department as well as for all research and development matters. Shapiro, in making the appointment, cited “the changing availability and cost of energy and raw materials, environmental considerations and government regulation, as external elements affecting the course of research and development.” 144

Jefferson had been particularly adept at grasping Shapiro’s points about manipulating mass media and influencing congressmen. Shapiro had launched DuPont’s Governmental Affairs Action Program (GAAP) as his complement to his broader Business Roundtable program of mobilizing corporate executives into political involvement. He had the Public Affairs Department draw up a GAAP handbook encouraging sales managers and plant managers to “become aggressively and constructively involved in the workings of government at every level and to participate in the well-directed and coordinated effort to disseminate information on legislation being considered in government.” 145 “Lobbying used to be based on ‘whom you know,’” senior vice-president and director William Simeral told one audience of 100 executives. “Now it has become a means of providing factual information to government decision makers.” 146 To explain exactly what this “factual information” was and how it should be presented en masse to congressmen and local lawmakers, Shapiro conducted GAAP seminars for his executives. To buttress this with local workplace propaganda, he called in 63 company newsletter editors and communicators from over 50 worksites to a conference. “If the First Amendment makes sense in a political structure,” he told them, “it also makes sense in an industrial structure.” 147

Now here was a man who knew how to make use of the potential of his organization. “The people who work for DuPont are intelligent, they’re knowledgeable, they want to know about their jobs, they want to know about their company,” he said, smiling reassurances. “And they have a right to know. I think that’s fundamental. This isn’t an act of grace by management. People who work for DuPont have a right to know what’s happening in their plants, what’s happening at the management of the enterprise, where our problems are, and what risks there are that ought to be disclosed.” 148

These plaudits to corporate responsibility did not extend, however, to standards set by the federal Occupational Safety and Health Administration (OSHA) for exposure to acrylonitrile, a toxic chemical used in the making of synthetic fibers. A DuPont News article headlined how “DuPont informs employees of TSCA ‘substantial risk’ reporting responsibilities,” outlining how the company theoretically responded to the guidelines of the Toxic Substances Control Act (TSCA), although a hint of what was at play was found in the article’s comment that of the average one report per week that reached Wilmington, it was “still too early to decide what fraction routinely will contain information that should be sent to the EPA,” according to DuPont’s director of environmental affairs, James Reilly. 149 Paul Harding of the DuPont-funded Society of Plastic Industry was more specific. He called OSHA’s exposure standard of two parts of acrylonitrile per million parts of air in any eight-hour period “totally uncalled for in the case of acrylonitrile since the industry is already operating with plant levels considerably lower than the existing standard of 20 parts per million,” or 1000 percent higher. “It is impossible at this point for the industry to determine if it can comply,” he asserted, “because OSHA has not established adequate testing procedures.” 150 Nevertheless, DuPont confirmed that through engineering changes and other means, the OSHA level could and would be met that year.

It was a perfect example of what Chairman Shapiro meant when he told the site editors that “good communication is good management,” especially since DuPont’s own studies showed that workers exposed to acrylonitrile at its Camden, S.C., plant had contracted three times the “expected” cancer rate among DuPont workers. As the Du Pont News headline that ran below the site editors’ conference article explained, “DuPont’s industrial hygienists help protect your on-the-job health.” 151 

The conference was addressed by David Broder, associate editor of the Washington Post, which for years had DuPont in-law Colgate Dardin on its advisory board.

In June of 1979, DuPont again demonstrated good communications when the White House lifted the federal ban on MMT, a gasoline additive used to raise the octane level of unleaded gasoline. Extensive tests by the Coordinating Research Council on behalf of auto producers and gasoline companies had confirmed that MMT resulted in an increase in emissions of hydrocarbons, a major component of smog. In addition, MMT eroded catalytic reactors in automobiles and for that reason was opposed by General Motors. Finally, the National Institute of Health had found that MMT releases manganese oxides and chlorides into the atmosphere, which, even in small doses, impair people’s nervous system and has been suspected of brain damage “indistinguishable from Parkinson’s disease.” As Dr. Ellen Silbergeld explained, “the symptoms, signs, prognosis and treatment are the same.” 152

Carter’s lifting of the ban for summer driving until October 1979 may explain why Irving Shapiro was reluctant to disavow the president, but it did not placate the DuPonts. The outlawing of MMT and tetraethyl lead in the oil refining process was laid at the White House’s doorsteps along with Iran’s oil cutoff and Saudi Arabia’s cutbacks to 65 percent of its total light crude output. All of that had resulted in an increase in the price of naptha, which was made from light crude oil, from 1973’s $22 per ton to 1979’s $250 per ton. And naptha, as any good artificial fibers chemist knows, is necessary for creating benzene, a basic ingredient in the production of nylons.

Here, again, Shapiro saw reason to be soft on Carter. Carter’s price controls had allowed domestic oil purchases to be made below the world market price. The European Economic Commission had accordingly charged Carter with unfairly subsidizing Du Pont and other synthetic fibers producers such as Dow, and publicly warned it might brand U.S. oil price controls an unfair subsidy in violation of international trade agreements signed by the U.S. Du Pont, the Europeans claimed, was able to undercut continental producers by as much as 30 percent on certain acrylic and polyester yarns. There was no questioning the fact that the American corporate share of Britain’s market for polyester filament yarn had risen in less than one year from 4 percent to 1979’s 20 percent. Furthermore, American corporations were charging low prices for oil-based chemicals, including vinyl acetate, used in the manufacture of plastic products. If it didn’t stop, additional tariffs would be imposed on the American companies’ booming exports of synthetic fibers and oil-based chemicals to the Common Market. Article 20(1) of the Geneva Agreement on Tariffs and Trade allowed protection “during periods when the domestic price of such materials is held below the world price as part of a Government stabilization program.”

Carter was worried about the Commissioner’s report to Europe’s foreign ministers, and he knew that the British and the Italians, as well as the French, were under considerable pressure from companies and unions hit by layoffs. He knew he was in violation of the trade rules. His administration had held that such price controls were designed precisely for the reason enunciated in Article 20(1), namely to stabilize the U.S. economy by keeping prices down while encouraging trade unions to keep their wages down. The fallacy, again, of blaming inflation on wages and of measuring productivity (the real cause of inflation) against wages—apples against pears—was clear enough to Shapiro. But DuPont won European markets by Carter’s price controls.[No the real cause of inflation is making money out of thin air,backed by nothing,the more fiat paper,the less it is worth. DC] 

The DuPonts were not happy when Carter bent to European pressure. He was anxious to save the Tokyo Round tariff reductions of the previous summer, which had hurt DuPont’s fibers market. Article 20(1) had never been used, and for the Common Market to now do so would mean a historic departure from the Atlantic alliance that was the cornerstone of the international trade and military strategy of the Trilateralists who dominated Carter’s cabinet.

Shapiro, however, realized Carter’s dilemma and sought to adjust DuPont’s gears. If domestic oil was to be deregulated, perhaps Du Pont would best move in that direction. It was this logic, at least partly, that led Shapiro down the path to CONOCO, one of the nation’s largest holders of domestic oil and gas reserves. 

But if there was anything that infuriated the DuPonts to the breaking point with Carter it was his acquiescence to his labor constituency as reelection time approached. Concern had earlier been expressed during the long ten-day coal strike, when some DuPont plants, particularly the Washington Works in Parkersburg, West Virginia, were forced to cope with 30 percent reductions in electricity by March 1978. In the hard-hit Southeast and Mid-Central regions, where power companies depended on coal, DuPont gratefully noted that strike-breakers had provided non-union coal to utilities to keep its plants going. At the height of the strike in February, Shapiro sent a telegram to the president urging him “to obtain an equitable solution to the strike as soon as possible,” and warned that some DuPont plants “will be forced to begin closing about March 1,” 153 a totally misleading and incorrect assessment. In fact no plants were closed.

But what really concerned both Shapiro and the DuPonts most was the United Steelworkers’ continued efforts to organize DuPont Company. At Seaford, the world’s largest nylon plant, a four-year effort to unionize its 3200 employees, backed by a 1975 NLRB ruling ordering management not to further interfere, was making steady progress, with several hundred already signed up by March 1978. DuPont’s favorite local, the Seaford Nylon Employees Council, argued that under the current system workers did not have to pay union dues. “But our Blue Shield coverage is $7.15 a month that we have to pay out of our own checks,” countered Russell Shockly, head of the 38-member organizing committee at the plant, “plus $1 dues to the council, and $100 deductible on Blue Shield—that works out to $192 a year. With the Steelworkers, you pay $144 a year to have them represent you … you’d get sick days and have the bargaining power the Steelworkers have.” 154 When DuPont gave the Seaford workers only an 8 percent wage increase in 1979, hardly enough to keep up with inflation, more employees there began signing up with the Steelworkers.

Seaford, according to the Steelworkers, was one of “six large independent unions (that) hold the key to moving … to the bargaining table in Wilmington.” 155 All of those six, except the Chambers Works, were in the union-resistant South. In May, a majority of the 600 workers at the Florence, South Carolina, textile plant signed Steelworkers cards, prompting national organizer Elmer Chatak to predict “we may be closer than we think.” At Newport, Delaware, another victory was scored. “Things are coming together,” said the Steelworkers’ Peter Vaccarella to 50 DuPonters in Wilmington. “I have the feeling that it’s starting to break.” 156 But the four DuPont-controlled industrial fortresses remained: Richmond, Virginia; Waynesboro, Virginia; Seaford, Delaware; and, of course, the Chambers Works in Deepwater, New Jersey. 

The Steelworkers helped laid off workers at Carneys Point, New Jersey, to get special federal aid through a program under the Trade Act of 1974 for workers who suffered unemployment because of foreign imports, in this case nitrocellulose. Production there had been slated for phase-out when an explosion ripped through the gunpowder plant and killed three workers, terminating production completely. DuPont area supervisors blamed the Steelworkers drive for Carney’s closing. Local workers blamed the plant’s losses on excess management overhead, namely the promotion of unqualified employees to supervisory positions in order to undermine union organizing. In fact, the local union wrote Shapiro warning that the plant would end up closed. “Each and every answer,” said employee Robert Wygand, “was that it was plant management’s responsibility.… Beware Chambers Works, you are in the same boat as Carneys Point Works was. Until DuPont Wilmington management converts the system they now have, Chambers Works will continue to decay and finally die. Here, it is too late. So let’s put the blame where it belongs, on the shoulders of DuPont management and not the unions as Mr. Gatanis stated.” 157 Gatanis was a former vice-president of the Chemical Workers Association, the Chambers’ local union, who had been promoted to management. In June 1978, Chambers had also suffered an explosion, setting fires in several areas and injuring seven workers. Just a week before, the plant had been told it had won a New Jersey Governor’s Safety Award.

Promotions were just one way DuPont tried to undermine blue-collar solidarity. DuPont had a conscious policy of dividing its workforce by discriminating between blue and white collars with differentiated benefits, including profit sharing. It had been seen at annual meetings, when proposals to bring blue-collar benefits on a par with white collar were drowned in a sea of millions of shares voted by DuPont family members or when pleas extending beyond the time allotted by the chairman were suddenly silenced by Shapiro’s flick of a switch that cut the speaker’s microphone dead.

With federal agencies, Shapiro found the going rougher. During the Carter Administration, up until February 1980, DuPont was hit with 65 citations for violations of national workplace standards by the Occupational Safety and Health Administration. 158 Another gadfly was the National Labor Relations Board. DuPont was charged by the board with threatening and coercing United Steelworkers’ supporters at its Martinsville, Virginia, plant 159 and was found guilty of unfair labor practices during an unsuccessful Chattanooga organizing effort in 1979 by the Teamsters Union. In the later case, Judge James M. Fitzpatrick held that DuPont had shown a tendency to violate the National Labor Relations Act and “has engaged in widespread misconduct demonstrating a general disregard of employee statutory rights.” 160 

In September 1980, DuPont also fired a steelworker activist at the Seaford plant. “Any small thing that would come about, they would write it down,” said the discharged worker, Robert Hooper. “They can get at anyone at any time. I was more or less a scapegoat.” William Gaylor, the Seaford plant manager, disputed the charge. “We’re not aware whether he was an organizer or not,” he said. “His discharge was solely because of his performance.” 161 Hooper had been actively organizing for the Steelworkers for four years.

Some of the most serious incidents, however, occurred at the Newport pigments plant. In December 1978, the NLRB cited DuPont for violating federal law by keeping employees under photographic and videotape surveillance during a strike over the same issue that triggered a walkout two years before and the company’s reneging on promises to negotiate any vacancies with the local union. Then, like now, DuPont was convicted by the NLRB of unfair labor practices for refusing to discuss the workers’ grievances until they returned to work. 

But more important, perhaps, was DuPont’s own 1979 study that showed that Newport workers between 1957 and 1977 had a lung cancer death rate 75 percent higher than the general DuPont workforce, and a fatal heart disease rate 27 percent higher. 162 The only material at Newport that was a known cause of cancer was asbestos, used for pipe insulation. Two other suspected carcinogens, chromium dioxide and perchlorolthylene were also used. In 1980, six Repauno and Chambers workers suffering with asbestosis, a fatal lung cancer, sued DuPont for “willful and wanton” misconduct in not telling them about the general danger of asbestos or about health problems that four DuPont doctors allegedly knew were developing in the workers’ lungs. Just the previous year, OSHA had fined DuPont $63,000 for asbestos health violations at the Repauno plant.

Shapiro’s lawyers were contesting the fine, but there was no contesting a 1964 DuPont internal memo from G.J. Stoops, chief of the physiology section of the Haskett Laboratory to Dr. C.A. D’Alonzo, of DuPont’s Employee Relations Department. That memo, written on official DuPont Company stationery, confirmed that DuPont had known about the asbestos danger it was exposing its workers to for at least 16 years before the New Jersey workers filed suit.

“The DuPont Company spends between 3 to 7 per cent of the cost of new construction on insulating materials, much of which contains asbestos,” Stopps wrote. “Roughly 200,000 pounds of pipe insulation are used every year and approximately 70 percent of this insulation is asbestos. With figures of this magnitude it is not difficult to visualize a real health hazard existing just in this one use of asbestos.

“Because of the long time lag from first exposure to diagnosis (the mean period is about 40 years), the potential respiratory disease problem is liable to grow in size. This is particularly true of the nylon plants which are big users of asbestos insulation on their “Dowtherm” lines, all of which have been installed in the last 26 years. The compensation aspects of this problem speak for themselves and point to the need for adequate pulmonary function studies on all workers exposed to a definite risk of respiratory damage.” 163  

Stopps warned of legal suits and disability allowances and suggested that “for less money than would be involved in the loss of a single court suit an effective pulmonary function testing program can be set up and operated for a trial period of five years.” 164 

Stopps’s proposal was effectively ignored. Even x-rays, the afflicted workers charged, were inadequately done. 165 The pride of DuPont’s Photo Products Division, the x-ray, was never seriously put to work by DuPont to help its own workers.

Asbestos-related claims were common in many states, but not Delaware. In fact, OSHA’s senior safety officer in Wilmington, Paul Tackett, said his office had never investigated a claim involving DuPont. “Unfortunately, the unions representing the Delaware DuPont workers are independent,” said former state Representative Thomas Little, who was the lawyer for the Edgemoor workers. “They don’t have the communications network the other, larger national unions have used to educate their workers about asbestos. They’re just catching up here.” Asbestos existed at the Chambers Works, the Edgemoor plant, and the Newport pigments plant, where two afflicted workers also filed suit. 

Du Pont lawyers asked the court to dismiss the Newport case also, claiming that it was irrelevant because the plant did not use asbestos in the manufacturing process and had stopped using it for insulation in 1970 and had begun to replace it with non-asbestos material. Some workers, meanwhile, needing DuPont’s compensation for medical bills, dropped their suits against the chemical company in order not to delay the payments. Litigation continued against 23 other corporations identified as manufacturers and suppliers of asbestos insulation to DuPont; the corporate defenders merely split most of the legal costs; the workers, however, had few financial resources to fall back on. By 1983, according to Wilmington labor lawyer Jacob Kreshtool, at least one of them was approaching death as the corporate lawyers continued their delaying tactics in the courts. 166 Meanwhile, DuPont, thanks to the state’s workers compensation law, once again managed to evade responsibility, this time, the Stopp memo indicated, getting away with what might well be criminal negligence.

9. THE $550 QUESTION 

“Are large corporations substances or are they running out of control?” Shapiro rhetorically asked while debating Carter’s SEC chairman, Harold Williams, on corporate accountability at Carnegie Mellon University in October 1979. “Where I come out is, there is room for improvement, but a lot of changes have been made. Corporate directors are watching the store more closely today than at any other time in our industry. It doesn’t correct past mistakes.… But there is no need today for fundamental changes.… There is no system in view that is demonstrably better.”

But Williams warned the DuPont Chairman of overconfidence. “Arrogance is bred in the corporate board room by handpicked insider directors who rely on the chief executive for promotions and are anxious to keep the atmosphere amiable; and by outside directors whose social and professional connections may overlap. They often do business together and are involved in the same community charitable and social organization.” Nothing better described the insular community of the DuPonts and Shapiro’s executives, and Williams probably knew it. He argued that the chief executive officer should not be the chairman. “The role of the chairman and CEO are not the same. The chairman’s role is to create the kind of open, contributing and questioning environment which I have described. The CEO’s role is to speak for management. These roles are not the same and can conflict.”

No one was shocked that Shapiro did not agree, but the fervor of his response was unsettling. He insisted that tension has no place in the boardroom and inside directors who know the business are indispensable. Besides, being a director requires “experience and perspective” that no amount of sincerity or independence can replace. Williams would not be put off. “Over time, no activity can flourish if the public takes a dim view of it. Over a longer term, no activity can continue unaltered if public apathy or distrust becomes public antagonism.” He cautioned about the “accountability gap.” “There can come to be a growing sense that business no longer attempts to balance its interest and the public’s but rather focuses entirely on its narrow objectives.” Without accountability, “the institution becomes an end unto itself, out of touch with its relationship and its responsibilities to the rest of society.… If the mood—the social ethic—is one of disinclination to criticize, if directors are expected to ratify management decisions and if inquisitiveness is interpreted as distrust of the chief executive and a violation of good corporate manners or protocol, that system breeds a tendency to rubber stamp management, make comfortable decisions and avoid confronting significant issues as long as possible.”

“Two centuries of national experience,” Shapiro retorted, “have shown that the United States has been uncommonly successful at meeting economic needs through the reliance on private initiative.” He opposed reliance on government and held at the same time that public perceptions had no place in business decisions. “I don’t think that’s any way to run a business.… If corporations succumbed to that pressure, and in effect declared the public’s work to be their own, the next step would be to turn them into institutions accountable to the public in the same way that units of government are accountable.”

How Shapiro perceived reconciling the refusal to take seriously public perceptions when making decisions of substance and the avoidance of making public intervention through government accordingly inevitable was revealed by his conclusion, said in words almost identical to those he offered to the Philadelphia Inquirer three years earlier when launching the public relations campaign he disliked calling “PR”: “For many years, corporations have played their cards too close to the vest. The relative silence and anonymity of leadership has hurt business,” contributing to “distrust and fear.” It had been said many times, in many speeches, but Shapiro always made it sound as if he were saying it for the first time. It was a measure of his performance that Williams ended the debate by praising the DuPont chairman as “an honest man and good citizen” and commenting that if all chief executives were like him his agency, the Securities and Exchange Commission, would soon be out of work. 167

But what if all, or at least most, chief executives were like Irving Shapiro. There had to have been some consensus for Shapiro to be elected chairman of the Business Roundtable in 1976, and chairman of DuPont in 1973. Some of the reasons had to be Shapiro’s capacity for leadership, to dare to take initiative, and he showed it again at Carnegie-Mellon when he proposed that “corporate leaders have no choice but to state the standards by which they intend to play the game. A code of ethics needs to come from the board.” 168

A month later, not a code of ethics, but an heir apparent came from DuPont’s board. Shapiro had elevated, with the DuPonts’ concurrence, Edward Jefferson to the presidency. Jefferson was the ideal choice. Ever the courteous English gentleman, Jefferson was liked by the DuPonts and respected for his capacity to manage men as well as ideas. He was also very much in line with the Shapiro philosophy that DuPont’s top executive must be accessible to the mass media and public opinion shapers, serving as both the company’s lightning rod for public concern and the spokesman for the board of directors. “We have to continue what Irv Shapiro has already handled so effectively,” said Jefferson upon his appointment, “upgrading our communications with the public, press and Government. We need to be more available to people who have questions about us.” 169 

The questions were certainly mounting.

The EPA wanted to know what DuPont intended to do about “Benlate,” a fungicide it made out of benomyl, one of 26 pesticides which laboratory evidence indicated, according to EPA pesticides chief Edwin L. Johnson, “unreasonable health or environmental risks.” Benomyl has been shown to cause birth defects among research animals; one of its breakdown products, MBC, also causes gene mutations. The fear was for farmers, housewives, gardeners, and contamination to fish, wildlife and crops such as rice, fruit, peanuts, and beans. DuPont made Benlate at the Hermitage Island, Georgia, plant for the Biochemicals Division, headed by Dale. The product was claimed by DuPont to be “biodegradable.” 170

Likewise, West Virginia’s Department of Natural Resources wanted to know what DuPont intended to do about anitine hydrochloride and composite plant waste spills by the Belle, West Virginia, plant into the Kanawha River in violation of Water Pollution Control Permit No. 5302. The Department termed the violation “inexcusable.” 171 The state’s Air Pollution Control Commission also recorded 11 releases of pollutants into the air by the Belle plant between 1976 and January 1979. 172 

But perhaps the biggest controversy surrounding DuPont in 1980 was the company’s practice of screening of employees from ethnic minorities for “defective” genes. Workers in the chemical industry found to have a “hypersusceptibility” to industrial poisons were often arbitrarily transferred. 

DuPont admitted to conducting thousands of these genetic tests, but had no systematized data on the results or conclusions about which tests were better than others. 173 There was therefore no way to measure how results might be applied in the workplace. Nor could DuPont Headquarters provide specific information to the New York Times on how its workers might be benefitting from the tests. 

Why, then, did Du Pont even conduct the tests?

Irving Shapiro tried to provide an answer. “In 1972, at the request of Black employees who wanted the information for their own personal benefit, the company began testing Black employees and Black job applicants for the sickle-cell trait.” 174 He did not acknowledge that the original request asked for tests for sickle-cell anemia which affects 2 percent of American Blacks, not the trait, which affects up to 10 percent of America’s Black population. DuPont’s program had been expanded beyond the original request, affecting, at least at the Chambers Works, job placement. But there was a riddle even in Shapiro’s line of argument. Why thousands of tests anyway? At such costs to a company infamous for its OSHA and EPA violations, for its reluctance to establish health safeguards for the workplace and the environment? And with a management committed in every other instance to cutting costs? 

Costs, however, were precisely the reason the program was set up. DuPont was attempting to decrease the number of future workers’ compensation drives and negligence suits by workers who were fatally poisoned or bore deformed children. With individual records proving such tests, the company would be able to build a stronger legal case that it had attempted to safeguard the health of those workers who did bring suit. As Shapiro confirmed, “when the results have been positive, the individuals have been told.” 175

Shapiro was affronted by charges of scientific racism. “DuPont does not discriminate against Blacks on the basis of sickle-cell blood tests.… Without qualification, DuPont does not use sickle-cell tests to screen for employment, job placement or promotion.… The effect of the (New York Times) articles suggesting scientific racism by DuPont is offensive to a management that has worked diligently to foster an end to racism in this country and has about 11,000 Black employees. The implication of the articles was especially unfortunate since the tests for the sickle-cell trait were simply part of a long-established program for the welfare of employees using medical resources to protect their health and safety.” 176

The Times article, written by Richard Severo, quoted the director of Du Pont’s Haskell Laboratory, Dr. Charles Reinhardt, who had written an article in 1978 for the Journal of Occupational Medicine affirming that anemic Black workers at the Chambers Works, where he was instrumental in starting a genetic-screening program, were “restricted from work involving the fondling of nitro and amino compounds.” 177 The Shapiro statement, however, was printed without comment by the Times and a subsequent letter by DuPont President Edward Jefferson accompanied by a copy of the original 1972 tests request by Dr. Meade of the Black DuPont Employees Association, prompted a hasty retraction by the Washington Post, claiming “our sources were wrong” although they were quite right. 

Nevertheless, by admitting that DuPont merely “informed” the workers with the trait and insisting it did not use the tests to transfer them from jobs, Shapiro was acknowledging that DuPont had put the onus on the workers to have information on just how badly chemicals at the worksite could affect his or her genes. Instead, the worker was left in place exposed. 

That, in turn, raised a broader question. Why, if DuPont was genuinely concerned for “the welfare of employees,” did it not simply clean up the worksite or provide adequate protection? Or, just as the EPA has done in the case of the environment, ban such highly dangerous chemicals from workplaces which cannot be cleaned up or workers adequately protected?

The answer was obvious. Some of those chemicals are highly profitable. Neil Holtzman, associate professor of pediatrics at Johns Hopkins Medical School, was not impressed by that corporate ethic. It forced humanity to endanger its own gene pools that were created, defined and redefined over thousands of generations of pastoral life, long before the industrial revolution or DuPont’s claim on life. These gene pools are precious and “go to the skein of life itself,” said Holtzman. “It is only in the last half dozen generations that man has come into contact with these new chemicals.” 178 

The DuPonts have been in the center of introducing these chemicals to humanity. Of 40,000 to 90,000 chemical compounds currently used by American industry and 35,000 chemicals now on the market, most have been introduced only since the end of World War II, many by DuPont Company and without testing for what their long-term effects might be on life and the environment. 179

“Essentially, what we’re doing is imposing the human gene pool to an environment that is quite different from the environment in which man evolved,” said Dr. Holtzman. “We don’t know how many of man’s genes that predominate today are predominant because of natural selection. Regardless of that number, the fact is that man’s genetic constitution did not evolve in an atmosphere filled with chemicals that fill it today.” 180 

Nor can humanity’s continuing biological evolution outpace the risks in being exposed to many of the 1000 new industrial chemical compounds invented every year that reach the market. The 700,000 Americans now recorded by the U.S. Department of Labor as permanently and totally disabled with workplace-related diseases and the 400,000 new cases of workplace-related diseases estimated to develop annually by the President’s Report on Occupational Safety and Health in 1974 have already borne grim testimony. 181

The United States, governed by parties since the Civil War that have admittedly championed, if not been dominated by, business interests, has lagged behind Europe in the field of industrial medicine and providing social safeguards for labor. As Alice Hamilton, pioneer in the field in America, noted to her chagrin when attending the International Congress on Occupational Accidents and Diseases in 1910 in Brussels, Belgium, “For an American it was no occasion for national pride. There were but two of us on the program.… It was still more mortifying to be unable to answer any of the questions put to us: What was the rate of lead poisoning in such and such an industry? What legal regulations did we have for the dangerous trades? What was our system of compensation? Finally, Dr. Gilbert, of the Belgian Labor Department, dismissed the subject: ‘It is well known that there is no industrial hygiene in the United States. Çan’existe pas.’” 182

But Americans, culturally isolated by oceans from the rest of the industrial world, did not know that. The absence of labor representation in Congress levied its toll on workers’ health, and workers paid dearly for their non-participation in politics. It was not until 1970, with the passage of the U.S. Occupational Safety and Health Act, that America showed it was awakening to an enormous “quiet crisis” that had for decades been denied by DuPont as the leader of the chemical corporations. 

So then, two years later, DuPont initiated genetic testing. At issue supposedly was thalessimia, a deficiency of the enzyme glucose-6-phosphate-dehydrogenase (G-6-PD), which manifests itself in blood as an anemia. Of two million American Blacks estimated to have a single gene for the trait, fewer than 50,000 have actual anemia, a debilitating disease; the other 1,950,000 cases are relatively harmless. To get the disease seriously one must have the gene from both parents. 

Sickle-cell anemia affects not only Afro-Americans, however, but also people with hereditary roots in the Mediterranean and in the Middle East: Italians, Greeks, Yugoslavs, Spaniards, Portuguese, Arabs, Jews. Similar traits can be found in Chinese, Filipinos, and East Asians as well. People from central and northern Europe, particularly Swedes, Danes, and Norwegians, also have a deficiency of serum alpha called antitrypsin; exposure to certain chemicals can trigger chronic bronchitis and emphysema.   

“What if you do, in fact, demonstrate that a certain group is more at risk than another subgroup,” said Dr. Nicholas Ashford, associate professor of technology and policy at MIT. “You could eliminate them from those jobs or you could make the workplace safe for everybody, including the most sensitive members of the population. I believe the latter is the only sensible policy.” 183 

DuPont, or rather its profits, did not agree. If so, there was more than hyperbole, then, to charges that DuPont was practicing scientific racism, despite Shapiro’s protestations about feeling personally wounded or affronted. Such statements smacked, at best, of self-deception; at worst, of psychological tactics remarkably similar to Gestalt’s projection of guilt from oneself onto one’s accusers. For by expanding a request by Afro-American workers into a major program of thousands of tests in search of “defective” genes, DuPont had, perhaps inadvertently, singled out a particular ethnic group; that done, DuPont management chose to lock the attention of its genetic testing program on a single ethnic group. Conscious or not, its program was racist precisely because its focus on reducing work compensation and negligence suits ended up concentrating on that ethnic minority least able to defend its legal rights; Black Americans were being singled out if not in the workplace today, then ultimately in the courtrooms tomorrow. How, also, would these people be regarded when treated as “inferior,” when they were really the proverbial canaries of the mines, the living guinea pigs of future illnesses that broke down even the healthiest of their fellow workers years later. 

Anthony Mazzochi, an official of the Oil Chemical and Atomic Workers Union, recognized the implications immediately of DuPont’s focusing on the genetic “hypersusceptibility” of ethnic minorities rather than removing the hazards of work conditions. “1984 is already here,” he portended. “I think that in the 1980’s we are going to see a lot of victim-blaming. The emphasis will not be so much what you work with; it will have to do with who your mother and father are.” 184 

While Shapiro would insist again and again there was no racism, no discrimination based on ethnic background, he would still authorize the transfer of women workers from a worksite where genes could be affected by chemicals, perhaps stubbornly mindless of the connection to the central issue at dispute: a protected, healthy environment for all workers. Such transfers, like such genetic testing, was really, in the words of MIT’s Dr. King, “a major effort to deflect the issue.” To King, “From the point of view of the whole work force it [ethnic genetic testing] is an extraordinary waste of social resources. Most of those genetically linked problems are very rare. But the benefits to the company are immense. Testing switches the focus of the problem from the company to the worker, it gets the company out of having to start a cleanup program, it is a forum of social and intellectual propaganda, it may protect management later against legal claims, and it deflects attention from the real problems. It costs a lot more to lower cadmium levels than to screen.” 185 Beyond that was the psychological impact on the person tested. “I don’t want someone telling me that the chronic anemia I may suffer because of benzene that has been dumped illegally is really that my genes aren’t adequate,” Dr. King said. “I have as much right to be healthy as anyone else. But some in industry are saying that because you have less G-6-PD you do not have the same rights as other Americans to be employed and to be healthy.” 186 

There were disturbing implications here in the chemical industry. On October 9, 1971, OSHA charged that a DuPont competitor (or ally, if one took the Federal Trade Commission’s complaint on monopoly pricing at its word), had initiated a formal employment policy that effectively required women to be sterilized in order to hold jobs in areas where certain toxic substances were exposed. The government imposed a paltry $10,000 fine which American Cyanamid, “surprised and shocked,” said it would fight “with all the resources at its command.” The charges, brought by 13 women, including four who had been unquestionably sterilized, were held as “absolutely false” by American Cyanamid. 

DuPont transferred women workers out of a similar dangerous area, replacing them with men. The labor movement and feminists, however, argued that chemical poisons were just as dangerous to men, and the company was using women and potential pregnancies discriminatorily as a rationale for conditions dangerous to all workers; “It’s not even clear what the relation is between the worker’s blood level and the blood level of the fetus or the embryo,” said Dr. Jeanne Stillman, Executive Director of Columbia University’s Women’s Occupational and Health Research Center. “There is not one clear-cut experiment establishing that lead is a teratogen. If it is going to be the policy of this society to ban fertile women from working with teratogens, let’s not talk about it with lead—let’s talk about it with x-rays. We know x-rays have a tremendous teratogenic effect. I haven’t heard anyone suggest that we eliminate all fertile women from the health-care industry where they can be exposed to radiation.” 187 Male sperm, she pointed out, is at least as susceptible to environmental hazards as the ovum.

It went without saying in Wilmington that 75 percent of all women have finished their child-bearing by 35 years of age. The ban on women without even taking their age into account or their consent could easily be considered as DuPont’s effort to keep women out of an overcrowded and therefore politically volatile labor market. 

Although the issue was allowed to subside during the 1980 election, after the Reagan victory DuPont boldly moved forward. In testimony before the subcommittee of the House Committee on Science and Technology in October 1981, Bruce Karrh, DuPont’s medical director, insisted that genetic screening was voluntary and for employees’ “personal use” and their “education and edification.” 188 Subcommittee chairman Albert Gore questioned DuPont’s revealing such personal records to at least two federal agencies dealing with occupational safety without the employees’ consent. Access to the employees’ records, Karrh blurted out, were on a “need to know” basis, and he then acknowledged under questioning that DuPont had no national program to counsel or educate Black employees on what the results of the genetic tests really meant. The only criterion for their selection for the tests was skin color and facial features. Obviously the incentive for the tests came from DuPont, not the workers.

In the course of Karrh’s testimony, in fact, it was revealed that the original inspiration for the testing was President Nixon. The president in 1972 signed a bill providing $115 million to find a “cure” for the anemia. That was not such a whimsical task, however, because the trait may well have been, ironically, a genetic boon: the immunizing of African slaves from the ravages of malaria in the swampy rice plantations of the South, another case of human adaptation to environment and natural selection not easily or wisely tampered with. What was equally revealing was that the initiator of the request for the testing was not rank and file Black DuPont “employees,” as Shapiro had previously led the press to believe, but a Du Pont white-collar worker, Dr. Alston Meade, a senior research biologist and president of the Black DuPont Employees Association. Meade had responded to Nixon’s allocation of funds and his own sense of concern about the anemia. What was originally requested as a study of the anemia, became a broader study of the trait and a wider basis for job displacement or denial of work with certain chemicals by Blacks who carried the broader trait. 

The National Academy of Sciences had warned, however, that specific symptoms in ethnic minorities resulting from exposure to chemicals was based on inconclusive research; drawing conclusions too fast, the Academy warned, might result in unnecessary and harmful stigmatization of that ethnic minority. The fact that Mediterranean whites also susceptible to the trait were not tested by DuPont did not go unnoticed, nor did the barring of women from working with hexafluoroacetone and six other compounds. Laboratory tests with male animals had shown that the chemicals also affected the production of sperm, and DuPont did not differentiate between what it considered safe for men (1 per million exposure) and what it held safe for women. Why then were women barred? The answer, from DuPont’s Karrh, was a classical case of sexism; pregnancies occur with women, he explained, despite the best of intentions.

Representative Gore probed Karrh’s biases further. Had there ever been an unexpected pregnancy of a DuPont employee in an area of risk? Dr. Karrh replied as if on cue. He had no knowledge of such an instance, he said, but he was sure there must have been some. 

Whether Karrh was just an example of how corporate life, particularly in DuPont Company, could insulate a man from the progress in social values that had occurred all around him, or whether he was, more darkly (and less possibly), a naïve goat for more machinating minds in DuPont’s upper hierarchy, the medical directors testimony obscured the cost-cutting goals involved in Du Pont’s genetic screening.

Shapiro’s letter to the New York Times, like Jeffersons’ to the Washington Post, was typical of the kind of response DuPont gave to criticism. On October 9, 1976, when columnist Jack Anderson reported about the aforementioned confidential Congressional report by a California doctor labeling DuPont’s cancer study as “misleading” and a “public relations snow job,” DuPont denied the report and claimed that Anderson’s charges were politically motivated. The insinuation was that holding political beliefs to the left of the DuPonts’ own conservative values discredited a historians’ or reporter’s facts; such tactics had been applied by the DuPonts over the decades in attempts to discredit facts by smearing their reporter. In the 1970’s and 1980’s, the Du Ponts proved in the cases of Jack Anderson and the book Behind the Nylon Curtain that time had neither mellowed their views nor given them reason to alter a strategy that had been allowed to succeed for so long. 

The same applied to the EPA’s report in April 1980 that DuPont was among the nation’s top 20 carcinogen emitters. The mass media, which received millions of dollars in advertising revenue from the listed 20 companies, mostly ignored the report. In northern Delaware, where the Chambers Works’ emissions of carbon tetrachloride, chlorobenzene, toluene and D-diochlorobenzine into the area’s atmosphere was certainly worthwhile local news, only Newark’s Delaware Alternative Press carried it. 

Likewise, when the Delaware Today magazine ran a two-part series on the poisoning of the Potomac Aquifer, the major source of water for northern Delaware, specifically citing EPA studies that criticized leaks of radioactive materials, dangerous pesticides and other dangerous chemicals from the Newport pigments plant as being responsible for endangering the aquifer’s survival, 189 DuPont’s L.L. Hash fired off a memo to the Newport management staff claiming the articles were “highly inaccurate and misleading.” While not denying the presence of radioactive waste at Newport’s landfill, DuPont’s Hash issued a broad refutation of the charges, then advised the staff in a handwritten afterthought that “If anyone calls for info on this article tell them someone will be able to answer any questions on Monday. Give them the guards’ number if they ask for a phone number. P.S. Do not answer any questions.” 190 He did not remind his staff that Newport had already been identified by a Congressional report on the 3383 worst waste-dumping sites in the United States. The report also cited the DuPont Edgemoor plant’s Cherry Island Industrial Landfill near Wilmington, the DuPont Experimental Station’s Central Research and Development Department, and two other landfills, Tybouts Corner and Llangollen, used by DuPont. Kenneth Weiss, a resource engineer in the state’s solid waste section, acknowledged the fouling of underground water wells. “It’s probable something hazardous must have gone in there,” he said. 191

Who, if not top management and the board of directors, was responsible? In 1979, the Hart-Scott-Rodino Antitrust Improvements Act attempted to deal with that question. Irving Shapiro successfully pressured Senator Joseph Biden to drop his support for the bill. Shapiro also involved himself in personal negotiations to revise the proposed Criminal Code Bill (S.1. and S. 1437), getting provisions holding corporate management criminally liable for failure to prevent a subordinate manager’s felonies struck from the bill, along with another statute criminalizing “reckless endangerment” when anyone, including a corporation, placed innocent people “in danger of imminent death or serious bodily injury.” 192 The subject of corporate responsibility was the focus of 1980’s Big Business Day convened by Ralph Nader and sponsored by scores of trade unions and environmentalist and religious organizations. Part of the event was a meeting of “shadow boards of directors” made of public representatives who had monitored what were claimed to be some of the worst violators, including DuPont. Shapiro failed to send a spokesman, but DuPont did have two executives present at the DuPont shadow board, quietly taking notes for the home office.

But the sharpest answer Shapiro gave critics was also his most clandestine. It was directed at the United Steelworkers and involved attitude surveys (with only selected answers communicated to the workers) to identify “trouble spots,” a 156-page mimeographed book originally prepared for the Old Hickory plant managers on strategy and tactics of psychological warfare at the workplace, covering psychological profiles and a wide range of situations and optional approaches to manipulating workers. 193 Additionally, a 141-page mimeographed volume on strategy and tactics for defeating union organizing efforts across the country circulated among DuPont managers in the Southern plants. Titled “The Way to Win,” its own introduction describes it as “an anti union book.” “We are convinced that an organization known as a labor union serves no positive function in our society.” 194 Its recommended attitude toward fair labor practices ordered by law was like a page out of the “dirty tricks” that the Nixon White House and the CIA’s Clandestine Operations Division had visited upon the nation, bequeathing Watergate and CIA-mobster scandals and a growing cynicism about corruption that gnawed at the heart of America’s body politic: “All of us are familiar with the idea ‘It’s not whether you won or lost but how you played the game.’ That sentiment may be fine for football games, but it doesn’t apply to union campaigns. The late Vince Lombardi had the more proper approach: ‘Winning isn’t the important thing, it’s the ONLY thing.’” If such lack of ethics could be preached by a coach to young athletes and win wide approval in corporate America, corruption was less exceptional in the corporate suites than probably most Americans believed or public relations offices would have them believe. But it had already been evident in politics and the vehemence with which unions were attacked had scored growing victories in elections. The significance of the fact that the authors of “The Way to Win” were editors of the New Right’s Labor Analysis and Forecast newsletter and allies of the National Right to Work Committee was probably not lost on those DuPont managers who read the mimeographed copies circulating in the offices.

DuPont’s own “Employee Relations Venture Plan” may have been actually the more formidable of the two books because its less strident anti-unionism was a much more subtle and therefore effective means of influencing workers. It reflected the company’s official paternalism and its endorsement of the local “councils” DuPont had originally set up in the Thirties as bulwarks to unionism. It also confirmed DuPont’s long-standing practice, since Ruly Carpenter first set up a labor spy network in DuPont plants during World War I, of keeping secret files on DuPont employees. Now called “The Know Your Employee Program,” the files were compiled by floor supervisors and office managers and delved into such personal areas of a worker’s life as his prejudices, outside interests, relatives and friends, health problems, and his general psychological make-up. 195 

“Do you know of any personal problems an employee is having?” was one of 24 typical questions supervisors were to answer for an “employee analysis.” “Does the employee have any relatives, friends, etc. who may have an influence over employees?” 196 Designated “Personal and Confidential,” neither the results nor even the existence of the files were revealed to the workers. It was not “personal” or “confidential” for the workers, but for management, a blatant violation of the American worker’s right to privacy and the confidentiality of his personal records. Ironically, it was exactly this right that DuPont used as grounds to deny medical records to NIOSH during its investigation of cancer-related diseases in DuPont plants.

DuPont supplemented this with video displays at “high traffic” areas in the plants, speakers, films (produced at $50,000 each) and leaflets purporting to show how the Steelworkers had misled the workers on facts; the latter were compiled by Employee Relations into working “Facts Books” used by managers in talks on the plant floor. One film, made at High Point, North Carolina, backfired. It was so obviously slanted that it regularly received boos at showings. The Employee Relations Department was not discouraged. As it geared up for action, “fact sheets” began appearing more frequently in plants, one-on-one conversations increased between supervisors and workers, and the company emphasized top union executives’ salaries, ignoring its own incentive compensation bonuses in 1980 alone of $478,000 to Shapiro, $354,000 for Kane, $260,000 for Jefferson, Sineral, Heckert and Forney, and $5.3 million for all directors and officers as a group. Another $1.8 million was paid to them in dividend units, and another $126,000 under DuPont’s Thrift Plan. 197

What propaganda could not succeed in accomplishing, other tactics did. In Philadelphia, where the Steelworkers enjoyed local DuPont worker support and had set up their regional organizing headquarters, the local DuPont paint plant was struck by Headquarters’ announcement of its closing. The company rejected a city offered tax subsidy and proceeded to plan a shift of its production to Front Royal, Virginia, telling 350 workers they were now out of a job. In Camden, New Jersey, union supporters charged that work assignments and close supervision had become so discriminatory as to constitute “intimidation.” In early 1980 Billy Holden distributed 30 Steelworkers’ baseball hats to eager takers at the plant. By July the climate had worsened. “Right now,” he said then, “if you put a $100 bill on these hats, they would not wear it. The supervisors scared these guys.” 198

Grievances mounted in DuPont plants across the country, driving up legal costs for the locals, 20 of whose executive committees had endorsed the Steelworkers. “Du Pont keeps these guys broke,” 199 said John Kitchen, organizer for Virginia and North Carolina. Not only was the organizing drive stymied, but some plants had followed the Chambers Works and reversed their earlier endorsement of national unions. Such was the case in Florence, South Carolina, where the International Brotherhood of Electrical Workers was ousted after DuPont refused to bargain in good faith. By the time the IBEW’s charge to that effect was upheld by the NLRB and a Federal Appeals Court, the union’s momentum had been lost. In Waynesboro, Virginia, a similar situation resulted in the decertification of the Steelworkers as collective bargaining agent for the plant’s workers. Both reversals convinced John Oshinski, successor to Elmer Chatak as the Steelworkers’ national organizing director for DuPont, that holding certification elections piecemeal, as the campaign in each plant peaked, was folly. He tried to put on the brakes. “We’ve restrained quite a few locations from rushing into an election,” he explained. “We will move in concert when we have a majority of plants going.” 200 It was an all-or-nothing strategy, requiring great skill to control the tempo of organizing in each plant in order to crescendo in unison. The key question was whether Oshinski had the organizing capacity to be such a maestro.

When one considered DuPont Headquarters’ financial resources, ironically generated by the labor of the very workers the Steelworkers hoped to organize, and the long administrative training of Shapiro’s crack team of executives and lawyers, most analysts put their bets on DuPont. Oshinski simply did not seem much of a match against Shapiro, who had decades of experience in manipulating men and ideas and was a master propagandist who easily commanded the attention of mass media to put forth the company’s best profile while he organized less savory tactics behind the doors of the Headquarters’ 9th floor. 

Shapiro, however, spurned overconfidence. Gold had hit $718 an ounce on February 7, undermining the company’s cash reserves. Inflation could not only drive workers against Du Pont management, but influence votes in the 1980 election. Usually, an increase in workers’ voting benefited the Democratic Party. But now the Democratic incumbent in the White House was catching the blame, and he was a president to whom Shapiro had developed close ties.

Shapiro’s honeymoon with the Carter White House had been over a long time ago, and relations had become strained as the 1980 election approached. The issue of contention was predictable enough: labor. The American workers who constitute over 80 percent of the population and cast the great bulk of its votes had in fact been the underlying issue behind not only Du Pont’s friction with the Occupational Safety and Health Administration and the National Labor Board but also the EPA, the FDA, and other regulatory agencies. Shapiro’s Business Roundtable had advocated cost-benefit accounting for measuring the value of health standards, and calculated the value of human lives at $550 apiece. 201 Most Americans understandably put a higher value on their lives, and it was this sense of self-preservation that had been behind most of the checks on industry that had been legislated over the last 80 years. Labor had been at the forefront of the movement for these reforms, usually pressuring liberal members of the professional class who sat in Congress as Democrats, rather than electing to Congress members from their own ranks. But as long as Labor could deliver the votes and campaign contributions, the laws were passed, the regulatory agencies were set up, and the DuPonts fought back, bankrolling political opposition, most often Republicans.

To get reelected in 1980, Jimmy Carter was expected to rely on the coalition of labor, ethnic minorities, and liberal urban professionals that had traditionally dominated the Democratic Party since Roosevelt’s New Deal, His growing acquiescence to the needs of organized labor, then, came as no jolt for Shapiro. The chairman nevertheless had his duty to do for DuPont. 

Carter’s Achilles’ heel was inflation, a problem industry had created but he was expected to cure. He focused his economic program against that aspect of inflation most felt by the vast majority of voters, consumer prices, which were rising at an annual rate of 13 percent in 1979. To lower that to a targeted 9 percent by 1980, 8 percent by 1981, and 6.5 percent by 1982, he had to induce the continued cooperation of organized labor. He hoped to keep labor costs down so corporations would be encouraged to take advantage of tax credits and invest in the expensive new technology needed if industrial productivity was to increase and restore America’s competitive edge on the world market. To keep labor in line meant keeping the largest labor unions in line, including the Steelworkers. His wage and price guidelines may have shown, as Shapiro charged, a fallacious wage-price spiral theory of inflation, but the retarding of wage demands was still useful to DuPont and other corporations, and their representatives joined the AFL-CIO union leaders on the President’s Guidelines Board. By 1979, however, the standard of living of millions of workers had declined to such an extent that rank and file pressure on the union leaders forced them to demand some relief from the president in his guidelines and board representation which had been decidedly weighted in favor of the corporations.

In the fall of 1979, Carter finally granted more flexibility on pay guidelines and gave labor a more powerful role on the new Pay Advisory Board. Shapiro quickly attacked the president. The Pay Board, he said, was nothing more than a “forum for showboating and playing to constituent groups and not a way to conduct government policy.” 202 

“This is a plan designed to line up the AFL-CIO,” Shapiro objected. “It does not reflect industry’s thinking. Our views were solicited and rejected. As Election Day draws closer, we can expect more of this, and that is not necessarily good news for the nation.” 203 Shapiro’s friend, General Motors’ chairman of the Business Roundtable, was a bit more restrained but the message was the same. “The Government sets the nation’s basic fiscal and monetary policies and has been responsible for the nation’s energy and regulatory policies,” he told reporters on the “Meet the Press” television show. “These are the fundamental causes of inflation; and restraint and discipline must be applied in these areas as well as by business and labor.” 204 He did not, of course, volunteer to take a cut in his six-figure salary to set an example.

Publicly, at least, Shapiro kept his iron in Carter’s fire, stating he supported him for reelection. Contrary to popular impressions, though, Shapiro was not a Democrat. “I’m not registered for any party,” he once admitted. “I really haven’t been involved in partisan politics.” 205 And he proved it when Carter named him as co-chairman of his proposed Economic Revitalization Board two months before the election. Shapiro accepted and at the same time expressed doubts about Carter’s plan to encourage pension funds to invest in industry, in areas affected by economic dislocation or industrial bottlenecks. DuPont’s pension fund was then approaching $5 billion, and Shapiro was hot about to deprive DuPont of the use of the bulk of that capital by shifting the Plan’s holdings in DuPont to any potentially risky ventures urged by government no matter how much Carter promised to guarantee a minimum return. If an industry or an urban area were unable to attract new investment with its own profit making potential, it was doubtful “that pension financing being available is the answer.” 206 DuPont enjoyed its control of the pension fund and was not about to voluntarily surrender it.

The chairman had other reservations about Carter, namely his future. To make that point perfectly clear, he accepted the co-chairman’s role and then declined to invite any corporate representatives. “I have talked to some of my friends in the business community,” he explained, and “timing will affect who you can get to serve.” Some business leaders were backing Ronald Reagan and would be unwilling to act as if Carter had their support. “You don’t want just Democrats,” he said, adding that “If the president is not re-elected, this thing is academic.”

It was, and he probably knew it. Reagan had attracted the support of most corporate leaders when he demonstrated that his folksy style and Hollywood charisma outweighed many Americans’ concerns about his reputation as an arch-conservative.

For many corporate officials, it was a delightful surprise and an indication of just how far the country had come from Barry Goldwater’s disastrous 1964 campaign. But it was also a sign of the weakened position of organized labor in America. Unions represented fewer Americans and were no longer able to deliver the vote that made the New Deal coalition, on which Carter relied, viable. Once the primaries showed that an arch-conservative was electable, the corporate money poured into Reagan’s coffers. Corporate political action committees (PAC’s) and individuals gave $10 million through individual donations not subject to any contribution or spending limits, over 382 times the $27,773 Carter’s re-election received. One man, Cecil Hadin of Houston, Texas, gave $143,221, and that was after having already spent $182,176 on Connally’s campaign. Arch-reactionary Senator Jesse Helms’s Congressional Club spent $4.6 million on conservative candidates. The Fund for a Conservative Majority spent $2 million. The National Conservative PAC spent $3.3 million, of which $1.8 million went to support Ronald Reagan. It also spent $1 million financing media attacks on Democratic senators, some 78 percent of all the money spent in 1980 to influence the senatorial races. 207

It was all defended before the Supreme Court on grounds Shapiro had pioneered for DuPont in his cases against the FTC and the book, Behind the Nylon Curtain: the constitutional right of freedom of speech. And it was all designed to influence the American voter. 

The DuPonts were among the nation’s largest contributors to the Republican campaign that culminated in the election of Ronald Reagan and George Bush, later, significantly, also chairman of the Presidents Commission on Deregulation. They gave over $215,000; DuPont Company executives gave another $37,900 for a total DuPont contribution of over $250,000.

Most of these contributions went through the Republican National Committee. A few went to such far-right organizations as: 

Fund for a Conservative Majority 
Committee for the Survival of a Free Congress 
National Conservative Political Action Committee 
Americans for Constitutional Action 

Only Alexis I. DuPont Bayard and Jamie Wyeth gave to Democrats. Wyeth donated to Senator Kennedy’s doomed campaign. Bayard, as if trying to balance the rest of his family’s Republicanism, gave $32,500 to the Democrats. 

Here is the list of Du Pont family contributions to the Republican party presidential campaigns as reported to the Federal Elections Commission:

Edward Ball 3000 
James Biddle 1000 
Robert H. Boiling, Jr. 8500 
J. Bruce Bredin 1000 
C. Douglas Buck, Jr. 125 
Donald F. Carpenter 1000 
Edmund N. Carpenter, Jr. 2000 
R.R.M. Carpenter III 1950 
Garret Van S. Copeland 2000 
Lammot and Mrs. Lammot DuPont Copeland 47500 
Colgate Dardin 500 
J. Simpson and Mrs. Dean 2500 
Alfred DuPont Dent 1250 
Ellason Downs 4500 
Robert N. and Mrs. Downs 1000 
A. Felix DuPont, Jr. 7350 
Eugene DuPont III 1250 
Ewel S. DuPont 200 
Francis I. DuPont III 250 
Mrs. Henry B. (Emily) Du Pont 500 
Mrs. Marka T. DuPont 750 
Mrs. Martha V. DuPont 1000 
Mr. and Mrs. Pierre S. DuPont III 4000 
Pierre S. DuPont IV 1500 
Reynolds and Mrs. DuPont 17250 
Mr. and Mrs. Richard C. DuPont 400 
Richard S. DuPont 1605 
Sam Hallock DuPont, Jr. 500 
Thomas L. DuPont 750 
William F. DuPont 250 
William K. DuPont 11000
Willis H. DuPont 1500 
George P. Edmonds 250 
Lucille Flint 500 
Robert Flint 500 
Mr. and Mrs. Baron Kidd 4600 
W. Frederick Laird 500 
Walter J. Laird 250 
Rodney Layton 1000 
Jane D. Lunger 500 
Mr. and Mrs. Ernest May 5850 
Mrs. Irénée Sophie DuPont May 5500 
John H Tyler McConnell 1200 
Charles B. McCoy 2900 
Mrs. George B. Pearson, Jr. 2000 
William G. Reynolds 1355 
Donald P. Ross 3000 
Jane Richards Roth 250 
Mr. and Mrs. Philip G. Rust 3250 
Bayard Sharp 25500 
Hugh Rodney Sharp 5750 
Henry H. Silliman 950 
W.A. Speakman III 450 
(Republican candidates and 
Business Industry PAC) 10144 
Mr. and Mrs. William Laird Stabler, Jr. 2750 
Mr. and Mrs. Coleman Walker 1250 
George and Betsy Weymouth 8575 
DuPont Company David K. Barnes 1100 
Richard E. Emmert 300 
Charles J. Harrington (Retired) 31750 
Mr and Mrs Richard E. Heckert 1530 
Edward Jefferson 700 
Harold E. May 250 
William Simeral 1750 
Dale Wolf 200 
Wilmington Trust Bernard Isaacson 250 
William Worth 4200 

Following the Reagan - Bush victory, the Du Ponts, as if startled by the enormity of the Republican victory, rushed forward with donations totalling an amount unparalleled for a non-presidential year:

DuPont Family donations=$183,600
DuPont executives= $40,850
Total=$224,450

Perhaps this had all been anticipated by the alliance between Delaware’s U.S. Senator William V. Roth, who is married to a DuPont in-law, and conservative New York Congressman Jack Kemp. They had joined in bequeathing America the Kemp-Roth Tax Act which gave 17 percent of all its benefits to the wealthiest 1 percent of the population, and 35 percent to the wealthiest 5 percent. Later, in a December, 1981, Atlantic Monthly interview, the Reagan Administration’s budget director, David Stockman, would admit that the Kemp-Roth Act was a “Trojan horse” for tax cuts for the rich. 

But the most intriguing sign that the DuPonts were moving into new political and financial alliances was the unexpected election to the DuPont Company board of Margaret P. MacKimm. Described in the 1979 Annual Report as a “Vice-President and Director of Public Relations for Kraft, Inc.,” the food processing conglomerate, Margaret MacKimm’s title was changed in 1980 to vice-president of Dart and Kraft. During the election year, Kraft had merged with Dart Industries, the $2.4 billion sales giant of Tupperware and Duracell batteries, founded by Justin Dart, a key financial force behind the rise of Ronald Reagan.

next
A DYNASTY IN WAITING 

footnotes are here starting at page 961
source
http://www.dupontasbestosdocuments.com/Du%20Pont%20Dynasty%20%20Behind%20the%20Nylon%20Curtain%20%28Forbidden%20Bookshelf%29_nodrm.pdf

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