Citizen Hughes - Michael Drosnin [141]
While Congress debated a complete overhaul of the country’s revenue code, the president focused on one minor provision—the repeal of charitable deductions for donations of documents. Nixon had been planning to make a gift of his prepresidential papers to the National Archives. In return for a half-million-dollar tax break. Now he had a real dilemma. Throughout the fall the effective date of the repeal fluctuated. Not knowing what the final cutoff date would be, Nixon withheld his gift until he was sure he could claim his deduction, while his chief White House lobbyist, Bryce Harlow, pushed Congress to leave the loophole open, at least long enough for the president to slip through.
In his strategy sessions with Harlow, Nixon kept raising another concern: the Hughes-O’Brien alliance. The president had learned about it a year earlier from his pal Rebozo, who had heard it from Danner, who had heard it from Maheu, just months after O’Brien first journeyed to Las Vegas. Larry O’Brien and Howard Hughes! The connection would never be far from Nixon’s mind in the years that followed, an obsession that grew throughout his presidency. And now O’Brien, the leader of the Kennedy gang, the former chairman of the Democratic National Committee, was actually out there lobbying Congress for Howard Hughes.
Nixon wanted all the details, all the dirt. Harlow kept bumping into O’Brien’s operatives, and every time he huddled with the president, Nixon kept asking him about O’Brien and Hughes.
“We discussed it as a matter of surprise and interest,” Harlow recalled. “I used to meet with the president every morning and in the evening, along with Haldeman and Ehrlichman and sometimes Kissinger. We’d sit there and chew the fat about whatever was going on, and from time to time that would pop up: ‘I wonder how Larry’s getting along with Howard Hughes.’ It seemed to us very odd that that arrangement existed and was acceptable to the Democratic party.”
Of course, Nixon also kept pressing Harlow to buy time for his papers, to save his big tax break. It was the president’s top legislative priority, but the issue remained unresolved as the tax bill headed for the final House-Senate conference.
Up in his penthouse, Hughes also sweated out the last crucial round. The capital gains tax had been cut, but not sufficiently, and his big charity loophole was still at risk.
“We have had our people in Washington practically sleeping on the Hill, watching every move that is being made,” Maheu assured his boss, but warned that he could expect no help from Nixon.
“The President continues to evidence his inability to control Congress insofar as the tax reform bill is concerned. Fortunately, we are not in an unfavorable position with that particular group because of your foresightedness in getting the O’Brien team aboard.
“I talked to O’Brien an hour ago and he has no fear about being able to incorporate language which is beneficial to us when this whole matter goes to conference.”
On December 22, 1969, the House-Senate conferees emerged from five days and nights of intense negotiations with a compromise version of the Tax Reform Act. It was swiftly approved by the full Congress the same day.
Larry O’Brien had come through. Howard Hughes had won an incredible victory. The historic new law would affect virtually every American taxpayer, every business, every corporation. Even the long-sacred oil-depletion allowance was cut. And more than thirty thousand tax-exempt organizations came under strict new controls. The Ford Foundation, the Rockefeller Foundation, and the Carnegie Endowment were all brought under the law. But not the Howard Hughes Medical Institute. It was completely exempt, thanks to Larry O’Brien.
Hughes did not thank him though. The philanthropist