Citizen Hughes - Michael Drosnin [233]
The list of Hughes’s demands is quoted from Bell’s deposition.
Laxalt’s letter to Attorney General Clark is reproduced in a report of the Senate Watergate Committee. To the governor’s claim that Hughes’s purchase of the Stardust was necessary to drive out the mobsters who owned it, the Justice Department replied: “We feel sure that Nevada’s interests can be equally well served by means which do not violate federal antitrust laws.” The department also noted that Hughes said he planned to retain all the old personnel at the Stardust.
4 Network
The scene of Hughes watching “The Dating Game” is reconstructed from a transcript of the March 29, 1969, show and from a handwritten Hughes memo of the same date quoted later in this chapter (p. 155).
Hughes’s TV viewing habits were described by two of his Mormons and also gleaned from information in his own memos. His creation of the “Swinging Shift” is detailed in a series of memos.
Hughes bought KLAS in 1967 from Hank Greenspun, publisher of the Las Vegas Sun. “Right after Hughes appeared in Las Vegas, I began getting calls from his Mormons,” recalled Greenspun. “At first they asked that I keep the station open a little longer. Then they wanted to know if we’d put on westerns or airplane pictures. Finally I said, ‘Why doesn’t he just buy the damned thing and run it any way he pleases?’ ”
On February 14, 1968, the FCC granted Hughes a license for KLAS without holding any hearings, although it had always required other applicants to appear in person. Commissioner Nicholas Johnson issued a stinging dissent: “Before we grant the management of what may become the largest company town in American history one-third control over its television communication, we owe it to the public to air these issues in open hearing.” Maheu meanwhile reported to Hughes: “We ran into a problem with the FCC examiner who indicated the necessity of a hearing with you present as sole stockholder. We handled that situation at the Commission level. Sen. Bible was very helpful.”
The ABC tender offer Hughes called a two-hundred-million-dollar deal was actually a deal for $148.5 million. With ABC selling at $58.75 a share, Hughes offered $74.25 a share for two million shares, 43 percent of the outstanding stock. However, his memos make it clear that he ultimately planned to buy a controlling interest in ABC, at least 51 percent of the stock, perhaps far more.
My account of the ABC board meeting is based on interviews with then ABC vice-president Simon Siegel and general counsel Everett Erlick, both of whom were present. “It was a total surprise,” said Erlick. “Our key strategy was to force Hughes into public, but we never knew why he dropped the bid.”
Lyndon Johnson’s personal interest in the Hughes-ABC battle was recalled by a member of the White House staff and an associate of one of the president’s private attorneys, both of whom noted that Johnson always avoided contact with the FCC for fear it would raise questions about his own TV holdings in Austin. ABC’s Erlick also said that “LBJ had people watching it, but never got directly involved.” Johnson’s belief that Communists controlled the TV networks is quoted by Doris Kearns in Lyndon Johnson and the American Dream (Signet, 1977, p. 331).
Four of the seven FCC commissioners confirmed in interviews that the FCC was prepared to approve Hughes’s takeover of ABC if he appeared in person. “I regarded him as a much saner man then than I would now,” said Kenneth Cox. “We assumed that he would appear, and the FCC had already approved his purchase of KLAS, so we were on record in finding him qualified.” Even the maverick Nicholas Johnson, who opposed the KLAS license, was ready to approve the ABC deal. “Obviously he was mad as a hatter,” said Johnson. “But we didn’t know it at the time. Someone had to own ABC, and there are some who thought he’d do better at it than some guy brought in from some business school who used to work for Allied Chemical or something. It seemed to us to be merely a business deal.”
None of the commissioners was