A WEEKLY COMMENTARY
Year Nineteen ... Number Forty-Eight ... December 1, 1972
PROOFS OF A CONSPIRACY TO BUILD
A TOTAL, MANAGED GLOBAL SOCIETY
PART THIRTEEN
THE INTERLOCKING DIRECTORATE
AND THE MAZE OF RAMIFICATIONS
"At a PTA meeting at North Hollywood High School on March 14, 1972," writes a California parent, "Dr. William Johnson, Superintendent of the Los Angeles School District, was questioned about the school district's commitment to the Planning-Programming-Budgeting System (PPBS), and what progress has been made so far. He responded:
"'Myself and (J) Graham Sullivan have been meeting with Roy Ash to ask how does a large business cope with PPBS.' He stated he also 'had three-hour meetings with Tom Jones, president and chairman of Northrup Corporation, and additionally with Al V. Casey, president of the Times-Mirror Corporation, to ask how do you plan, program and budget an enterprise like the Los Angeles School District.' He also compared the L.A. School District's Decentralization to the methods used by Litton Industries."
Roy Ash, who was consulted on how to apply PPBS to the L.A. school system, has been mentioned previously in this series of letters. He is president of Litton Industries, a multinational conglomerate which reported a loss of $14.23 million in one quarter of a fiscal year, after a loss of $8.8 million the previous quarter -- both losses occuring after Litton Industries had adopted performance budgeting (another name for PPBS).
Roy Ash also served as chairman of the President's Advisory Council on Executive Education, which recommended a major restructuring of federal departments and agencies during Mr. Nixon's first term as President. It was this Ash Commission that recommended the creation of the Democratic Council, the new White House Office of Management and Budget, the setting up of the Ten Regional Governments, the restructuring of the Cabinet Departmernts, etc. All of these reorganization measures were taken (or were to be taken when Congress approved) in order to install PPBS in every phase of Federal Government on a program basis.
The President carried out most of the Ash Commission's recommendations by Executive Order, but there were some recommendation on which Congressional approval was felt necessary at that time (1970).
Now, however, being "mandated" by the people to carry out the reorganization, the President has decided that he will, if necessary, defy Congress and complete the restructuring recommendations of the Ash Commission.
Hence, when the President retired to Camp David with Henry Kissinger, George Schultz, John Ehrlichman, and others, he called on Roy Ash to "help him decide how to reoganize the executive branch." Ash, according to the Wall Street Journal of Nov. 14, 1972, "is spending a week in Washington conferring with H.R. Haldeman, the White House chief of staff, and John Ehrlichman, Mr. Nixon's assistant for domestic affairs." After which conference they all joined the President at Camp David, where the reorganization plans were finalized. And then came the President's announcement:
Roy Ash would become the new head of the White House Office of Managment and Budget, a position created by Roy Ash himself, and now to be occupied by Roy Ash himself; a position equal in power and importance to those positions held by Henry Kissinger as Commissar for External Affairs and by Arthur Burns as Commissar for Monetary and Credit Control.
At the same time, Nixon announced the transfer of two other key figures in the PPBS Revolution. Casper Weinberger would move from OMB to HEW, and Elliot Richardson would be shifted from HEW to DoD.
However, a significant fact should be stressed in this connection: The appointment of Cabinet heads must have the "consent and approval" of Congress; while the President's White House Executive Office Staff has been set up as a new branch of government over which the Congress has no control whatsoever. Cabinet heads must appear before Congressional Committees when summoed, to explain and defend their policies, expenditures, proposed budgets, etc. But White House Executive Office Staffmen such as Kissinger, Haldeman, Ehlrichman, and now Roy Ash, can claim a newly discovered immunity called "executive privilege," and both ignore and defy Congress. This is why Nixon, during his first term and on the advice of this same Roy Ash, began to transfer actual decision-making from Cabinet heads to the chiefs of various pre-existing or newly created White House Executive Office bureaus and agencies such as Kissinger's National Security Council, Ash's Office of Management and Budget, the White House Communications Agency, Ehlrichman's Domestic Council, The Council of Economic Advisers, the Council on Environmental Quality, the Office of Consumer Affairs, the Office of Science and Technology, the Office of Intergovernmental Relations, and National Aeronautics and Space Council, the Council on International Economic Policy, etc. These matters, in the past, would have been handled by the appropriate Cabinet Department. But, to divorce them entirely from any Congressional control (and, therefore, from any citizen control), special agencies were created and given "executive immunity." This latter is an essential element of the PPB System, because "the entire operation must be the personal responsibility of the executive head of the organization" and any Congressional -- or people -- control would interfere with the totalitarian nature of Planning, Programming, Budgeting System.
Already it will have been observed that the new OMB Commissar is one of the chief theoreticians, the "game plan" of which is PPBS. However great or small the particular "program," be it the reorganization of a single school district, or the setting up of a "World Corporation," Roy Ash is the "expert" -- even though his conglomerate is said to be a money-loser (at least for taxing purposes). But, let's learn more about Roy Ash: He's been drawing a salary of $195,000 a year as president of Litton. He'll give that up for a $42,500 salary as OMB chieftain. He'll also sell his 200,000 shares of stock in Litton for an estimated $2.5 million -- a good deal if Litton actually is losing so much money after having installed the PPB System in the multinational conglomerate. Ash also is a director of the world-spanning Bank of America, the Bank-America Corporation, the Pacific Mutual Life Insurance Company, and Global Marine, Incorporated. He received indoctrination at Harvard, then at the California Institute of Technology. He is a member of the board of trustees at Caltech, along with such other promoters of PPBS as Tom Jones of Northrup, Robert S. McNamara of the World Bank, Robert Anderson of Atlantic Richfield, Robert Hansberger of Boise Cascade Corporation, Rudolph Peterson of the Bank of America, Simon Ramo of TRW, Inc., Thomas J. Watson, Jr. of IBM, etc. . . .
These men have succeeded in restructuring Caltech and in making it a real training base for PPBS operatives. An indication of this is contained in an article appearing in Caltech, the alumni publication, for May-June 1971. Under the heading "Creating the Next Discipline," eleven members of the engineering and science division faculty of Caltech "lay it on the line." Quotes:
"We're in a technological society and to effect change you have to understand science."
"Arms control and security problems are examples of the kinds of social problems we at Caltech should try to deal with; and in an environment that is highly skilled technically and scientifically, we ought to be able to get a line on such practical problems. This particular interest is expressed at present in our connection with the Southern California Arms Control and Foreign Policy Seminar, which Caltech and RAND Corporation jointly sponsor. Last year the Ford Foundation gave a three-year grant of $285,000 to enable RAND and Caltech to bring together people who are interested in these matters."
In Part One of this series of letters, we quoted extensively from a speech made by Roy Ash before California business men, in a meeting sponsored by the White House staff, the Department of Commerce, and the Los Angeles Area Chamber of Commerce, on March 18, 1972. In that speech Ash predicted the formation of a world economic community by 1990. He stated that the age of national economies is at an end, will become obsolete within the next two decades. This, mind you, is the statement of the man who is to be in complete and absolute control of all "performance budgeting" of all Federal, State and local "programs"!
He will be in the powerful position of being able to make his own predictions come true. Even more indicative of the world-mindedness of Roy Ash was a speech he made at the 1969 Awards Luncheon of the School of Business Administration of the University of California. Following are excerpts.
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THE WORLD CORPORATION
In its first stages the World Corporation is even now evolving de facto -- in the actual practice by a very few but increasing number of companies. In its ultimate form the World Corporation will, in law, be just that -- a corporation chartered not by one country, but by a supra-national chartering agency. . . . . The World Corporation will be a new species. Its perspective will be different; its philosophy -- if you could call it that -- will be different. It will consider the whole of the world its productive place, as well as its market, and will move factors of production to wherever they can most effectively be combined. . . . . Its ownership will be transnational, its management will be transnational. Its freely mobile management, technology and capital, today's agents for stepped up economic growth, will transcend individual national boundaries. In practice, it will be devoid of any single national identity or home; figuratively, its headquarters could be on the moon. It will be domestic in every place, foreign in none -- a true corporate citizen of the world . . . .
There will be many obstacles to the establishment and operation of the true World Corporation; it must proceed in stages. A first step, now made possible by enterprising managers of capital and of investment and banking systems, is the internationalization of business ownership. Even more important to the development of the global mentality, or culture, that must precede the World Corporation will be the step toward multinational management of companies -- the integration of diverse nationalities from the board of directors level down through the corporate officers and operating management. This is perhaps the single most important key to the development of the World Corporation plus its contribution to the ultimate unity of the earth's peoples . . . . The issues to be faced and resolved as World Corporations emerge more fully . . . . will tax the wisdom of heads of state, diplomats, bankers, economists, educators and several regiments of experts on international law. It will be necessary to unravel countless issues involving national soveriegnty, regulatory controls, monetary systems and exchange . . . . The peoples of the world are conditioned by nationalistic thinking. Just contemplating the existence of organizations that transcend national boundaries is frightening to some . . . . (but) "Nothing can stop an idea whose time has come . . . . (and) historically economic unity has been a major force for political unity. (End of quotation).
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Roy Ash "has been where the action is" in helping to develop world "economic unity" and now he is in a position to help develop world "political unity," or World Government through the development of World Corporations.
But this multinationalist who will be in one of the world's most powerful nationalist offices, appointed by a President who is intent upon converted our Government into a Corporation; this PPBS expert who is equally at home telling a superintendent how to run a school district, or telling a President how to run a Nation has somewhat against himself when it comes to running a Corporation by means of PPBS.
As of this writing, Roy Ash is president as well as co-founder of Litton Industries. In regard to the activities of that Corporation, there is considerable well-founded speculation. Senator William Proxmire, from Wisconsin, is a liberal, an Atlantic Union enthusiast (as is President Nixon), and has won much fame -- or notoriety, depending upon one's point of view -- from his unceasing championing of the United Nations Genocide Convetion. He is, however, an opponent of waste and extravagance in Government, and is outspoken in regard to the "military-industrial" complex which grew up out of PPBS-minded McNamara's handling of Defense Department contracts with equally PPBS-minded industrial concerns, which led to exposure of the "military-industrial" complex and such strange deals as that of Lockheed.
In line with these continuing military-industrial complex shenanigans, Sen. Proxmire demanded an investigation of Litton Industries and its boss and cofounder, Roy Ash. On June 26, 1972, Proxmire reported to his Senate colleageues:
"I have asked the Securities and Exchange Commission, the General Accounting, and the Navy to investigate the financial capability of Litton Industries to complete performance of its Government contracts. I have also asked Navy Secretary John W. Warner, in a letter I am releasing today, to reject proposals by Litton that the Navy pay inflated and unsubstantiated claims and take other actions in order to help the company solve its financial difficulties.
"It is becoming increasingly clear that Litton is unable to perform any of its major shipbuilding contracts without running up huge cost overruns. Litton's $450 million worth of shipbuilding claims against the Navy must be seen as an attempt to shift the costs of its own inadequacies to the American taxpayer.
"Litton executives, from the president on down, have been meeting almost daily with Navy officials in an effort to obtain a bailout from its financial plight.
"Because of Litton's cash shortages, the huge cost overruns, schedule delays, and technical difficulties encountered on its shipbuilding programs, a shadow has been cast over two of the largest ship contracts awarded in recent years.
"Litton is now 2 years behind schedule on the LHA contract and there is a serious question as to whether Litton is capable of building even the first LHA ship. The LHA contract has already been delayed with adverse effects to the DD-963 destroyer program and Litton may also be unable to deliver on that contract.
"Litton has given the Navy grounds for declaring the LHA contract in default, and continued failure to take corrective action on the Navy's part could increase the cost to the taxpayers by hundreds of millions of dollars. If the Navy does not pay the unstubstantied portion of Litton's claims, the company could face a financial crisis of major proportions in the near future.
"For these reasons, I have asked the Securities and Exchange Commission to tell me whether Litton's annual reports correctly state the company's earnings . . . . I have also asked the Commission to state whether Litton's reporting methods comply with SEC rules and regulations . . . . I have asked the General Accounting Office to conduct an independent investigation of Litton's financial capability to carry out its Government contracts." (End of quotation)
The LHA contract involved the building of nine amphibious assault boats; due to the complaints of Sen. Proxmire and others, the order was cut down from nine to five boats; but Litton is 26 months behind on delivery of the new boats. The DD-963 contract was 30 new destroyers, which critics say cannot be delivered on time because Litton's ship-building facilities are choked with overdue LHAs. The original contracts were worth more than $3 billion, but delays and cost adjustments, says Litton, has raised the amount by $550 million more.
"In the light of this performance," says AP as of Nov. 30, "Litton's common stock has moved down from a high of $26 per share to less than $13."
Clark Hoyt, Washington correspondent for the Knight newspaper chain, opines that "Litton has encountered serious production difficulties at its Pascagoula (Miss.) yard, when it tried for the first time in the United States to apply assembly line techniques to the old art of shipbuilding."
Correction please: Assembly line techniques in shipbuilding were applied in World War II. What Hoyt should have said was: "Litton encountered difficulties when it tried to apply PPBS techniques to shipbuilding."
As we have noted previously: Rolls Royce and Edsel motor cars have tried PPBS and found it wanting; Lockheed and Litton tried PPBS and it cost the taxpayers hundreds of millions of dollars; Penn Central couldn't make it work economically or efficiently; George Romney threw up his hands and resigned because PPBS wouldn't work for HUD; Mayor Lindsay tried it out in the city government, and New York City is in worse trouble than ever before; likewise the New York City school system, into which Ford Foundation president McGeorge Bundy injected PPBS.
If PPBS is neither efficient nor economical there has to be another reason for the appointment of Roy Ash as chief of OMB.
(To Be Continued)
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For information concerning this letter, write: DON BELL REPORTS, P.O. Box 2223, Palm Beach, Florida 33480