The Path to Power (71 page)

The Marshall Ford Dam, that structure in an isolated gorge in the Texas Hill Country, was the vehicle that would give both of these men—Herman Brown and Alvin Wirtz—what they wanted.

T
HERE WERE
, however, two problems that even Alvin Wirtz had not been able to solve concerning this dam on which the Bureau of Reclamation had begun spending millions of dollars.

One problem was that the Bureau had not been authorized to build the dam.

Each public work built under the Emergency Relief Appropriation Act had to be separately and specifically authorized by Congress after hearings and, generally, an affirmative vote by the proper congressional committee—which, in the case of the Marshall Ford Dam, was Joseph Jefferson Mansfield’s Rivers and Harbors Committee. But the Rivers and Harbors Committee had never voted on the Marshall Ford Dam. It had never even held a hearing on the dam.
No
committee had voted or held a hearing on the dam, and neither had Congress as a whole. Appropriations for a specific project were not supposed to be made until authorization—approval of the project by Congress—was given; otherwise, a congressional committee would be giving money to build a project before Congress had decided whether or not to build it. Authorization was supposed to come first—and in the case of the Marshall Ford Dam, authorization had not come at all.

The genesis of this situation lay in the informal way Buchanan had obtained President Roosevelt’s “birthday present” approval of the project—and in the fact that the approval had been obtained, in late June, 1936, after Congress had recessed. The Comptroller General’s office had noticed the lack of authorization, and had at first refused to approve the initial first-year $5,000,000 expenditure on the $10,000,000 dam. But Buchanan, in a series of tense conferences with that office, had persuaded it to allow work to begin, assuring it that he would have the dam authorized during the 1937
session of Congress. Because Buchanan’s power made such authorization a certainty, the Comptroller General’s office reluctantly agreed.

Accepting the contract prior to authorization was, of course, a gamble for Brown & Root—and Herman and George Brown knew it. “The appropriations were for one year at a time—piecemeal,” George Brown recalls. “And [because of the lack of authorization] they were illegal. Wirtz was telling us all along that the money was wrong, and that if someone in Congress raised a question they would stop it [would stop paying out money under the contract].” If a Congressman made enough of a fuss over the fact that the Bureau of Reclamation was paying out money for a project that had not been authorized, the money could conceivably even be “stopped” permanently; the Bureau might say it could no longer honor the contract with Brown & Root. Wirtz had told the Brown brothers that in that eventuality the ordinary legal remedies for contractors against the government might not apply in this unusual case. The word that George Brown uses to describe the appropriations—“illegal”—is too strong; the dam was not “illegal” in the sense that anyone connected with it was violating a criminal statute; a more precise word would be “unauthorized.” But the consequences to Brown & Root could be as disastrous as if the appropriations
had
been illegal, for what Wirtz was telling the Brown brothers was that they might not be legally entitled to payment for the work they were doing.

This would normally have been a gamble with only a limited risk. Despite the law, the initiation of projects prior to authorization—in the expectation that authorization would come later—had occurred before, and would occur again. But in this case the risk was heightened by another factor. So much larger was the dam than any previous Brown & Root project that the company would have to purchase $1,500,000 worth of heavy construction equipment, including one particularly expensive item—a cableway consisting of two steel towers erected on either side of the river, with, hung between them, huge cables along which ran a trolley from which buckets filled with concrete mixed on the cliffs could be lowered to the men pouring it into the foundations—for which they might never again have a use. “We had to put in a million and a half dollars before we could get a penny back,” George Brown recalls. Nor could this investment be recouped from the initial $5,000,000 appropriation. Their estimated profit on that appropriation, without the cost of equipment figured in, was just under $1,000,000; on the first appropriation, in other words, they would be losing $500,000. It was on the second $5,000,000 appropriation that their profit would be made. On this second $5,000,000, Herman Brown had calculated, he and his brother would make a profit of almost $2,000,000—enough to cover the $500,000 and leave them with an overall profit on the dam of $1,500,000, an amount double all the profit they had made in twenty previous years in the construction business.

Ordinarily, of course, a contractor starting work on a $10,000,000 government dam—an
authorized
government dam—could be reasonably certain that he would receive the entire $10,000,000—not only the first year’s $5,000,000 but the second year’s $5,000,000 as well. But no such certainty could exist here. The Comptroller General, who had approved the expenditure of the first $5,000,000 so reluctantly, had flatly told Buchanan at the time that if for any reason congressional authorization was not forthcoming in 1937, he would never agree to the expenditure of the second $5,000,000, and Buchanan had accepted this. If there was no second appropriation, therefore, Herman and George Brown would lose half a million dollars—or most of what they had accumulated in twenty years of harsh struggle. And since they did not have the $1,500,000 necessary to buy the new equipment, they would have to borrow most of that sum, mortgaging all they owned. Building the Marshall Ford Dam was, therefore, a huge gamble for Herman Brown. If the authorization for the dam did not come through in 1937, he would be virtually wiped out.

But although the Browns were gambling, the power of Buck Buchanan hedged the bet. “Wirtz was telling us that Buchanan would take care of things, that he would arrange it [the authorization] as soon as Congress reconvened [in 1937], and of course we had no doubt of that,” George Brown said. “We had already seen what he could do.” And there were reasons for taking the gamble—compelling reasons.
The paper was running out
. The Browns needed a job, and there weren’t any jobs in Texas—none big enough to help them at any rate.
Everything was broke down here
. If the gamble was huge, $1,500,000 was a stake big enough to justify a man in shoving in his whole pile. And Herman Brown was forty-five now. The Marshall Ford job represented the only chance in sight for him to move up to a higher plateau of construction, one of the big jobs he had been dreaming of for twenty years. He decided to go ahead. Brown & Root bid on the contract, were awarded the contract, mortgaged all they owned, purchased the new equipment and, in September, 1936, built the giant cableway—sank, in other words, $1,500,000 into an isolated gorge in the barren Hill Country.

And then the second problem came to light: not only was the Bureau of Reclamation not authorized to build the dam, it was effectively forbidden to build it.

The prohibition was contained in the Act of Congress that had created the Bureau in 1902, and in interpretations of that Act by the Federal Board of Land Appeals. These interpretations had specifically prohibited the Bureau from building any project on land not owned by the federal government. In 1905, for example, the Board of Land Appeals had stated flatly that the Secretary of the Interior “has no authority under the provisions of the Act of 1902 to embark upon or commit the government to any [Bureau of Reclamation] enterprise that does not contemplate the absolute transfer of the
property involved to the United States.” The reason for the prohibition was simple. “Well, of course you couldn’t build a dam—a dam that costs millions of dollars—on land you didn’t own,” explains a Bureau official. “If someone else owns the land, you’re just a tenant, and what are you going to do if the landlord says: ‘I don’t want the dam on my land any more. Get it off!’? What are you going to do? You can’t move a dam.” The prohibition had, moreover, been reaffirmed, without qualification, in every opinion on the subject by a federal court or a federal agency. During the Bureau’s three decades of existence, an occasional—very rare—exception to this prohibition had been made, generally through special contractual arrangements between the Bureau and the local body with jurisdiction over the dam. But no such arrangements had been made, or even discussed, between the Bureau and the LCRA. In the case of the Marshall Ford Dam, the prohibition was in force.

In sixteen of the seventeen Western states in which the Bureau was authorized to build dams, this prohibition would have caused no problem. By the terms under which these former Territories had been admitted to the Union, the ownership of all publicly owned lands—which included most of the riverbeds in which dams would be built—was transferred, at the time of admission, to the federal government. But the seventeenth state was Texas, which, before its admission to the Union, had been not a Territory but an independent Republic, a sovereign state. The terms of its admission were different from those for the Territories, and one of the differences was that Texas was admitted to the Union still owning its public lands—including riverbeds.

This difference had apparently been overlooked by the Bureau, possibly because no one was aware of it (the Marshall Ford was the first dam the Bureau was to build in Texas), possibly because of the haste, due to the presidential telephone call, with which the dam was approved. So far as can be determined from the sketchy Bureau files still available today (most of the pertinent records no longer exist) and from the recollections of federal and LCRA attorneys involved, no one in the Bureau had thought to check the title of the land beneath the $10,000,000 dam.

This oversight was, moreover, not correctible easily—if at all. In the Act that had, two years before, created the LCRA, the Texas Legislature had, in the strictest of terms, forbidden it to sell its land to any person or body, including the federal government—or to lease it, to mortgage it, or, indeed, to transfer it in any way whatsoever. And there was no realistic possibility that the Texas statute would be changed in the foreseeable future. These restrictions had been placed in the Act by a Legislature violently jealous of the state’s rights and determined that the federal government should never gain control over one of its rivers—by a Legislature that was, moreover, in the grip of the state’s politically dominant public utilities, who had specifically insisted on the inclusion of the anti-transfer provisions to
ensure that no federal power-generating body like the Tennessee Valley Authority could ever be set up in Texas. The Act as a whole was so strict that it effectively foreclosed the normal contractual remedies to the prohibition in the 1902 federal Act.

Under federal law, then, the Bureau of Reclamation was required to own the land on which its dams were built; under state law, it could
not
own the land on which this dam was being built.

Sometime late in 1936—after Brown & Root had begun construction—the Bureau learned about this second problem. Alvin Wirtz (who assured Herman and George that he hadn’t known about it) told the two brothers that some low-level attorney in the office of the Comptroller General had thought to do what no one in Washington had done before: had checked the title for the land under the dam, learned that the federal government didn’t own it, and informed his superior. Wirtz also reported that the Comptroller General, in a face-to-face confrontation with Buchanan, had pointed out that he was charged with the responsibility of certifying the legality of public works contracts. This contract, he said, was clearly illegal. Unless the conflict with the federal law was resolved, he said, he would not approve a second appropriation, whether or not Congress authorized it.

Decades later, George Brown agreed to tell a story he had never told before except to a handful of intimates: the story of the Marshall Ford Dam. He would, he said, never forget the day he and his brother discovered that the federal government was required by law to own the land on which the dam was being built—and that the federal government didn’t own the land. The words “legal” and “illegal”—referring not to lack of congressional authorization but to lack of federal title to the land—recur frequently as he tells about that day. “We had put in a million and a half dollars in that dam, and then we found out it wasn’t legal,” he says. “We found out the appropriation wasn’t legal, but we had already built the cableway. That cost several hundred thousands of dollars, which we owed the banks. And we had had to set up a quarry for the stone, and build a conveyor belt from the quarry to the dam site. And we had had to buy all sorts of equipment—big, heavy equipment. Heavy cranes. We had put in a million and a half dollars. And the appropriation wasn’t legal!”

As he recalls that day, George Brown, eighty-two, almost blind but still physically vigorous and clear of mind, gets up from behind his desk, and begins to pace up and down his long office. Wheeling, he walks back to his desk. It is cluttered with reports, pictures of his wife, memorabilia (including a solid gold ingot, into which his name has been chiseled in Arabic characters, that is a gift from a Shah), but without groping he picks up a small, plain piece of weathered steel; on whatever desk he has had, it has lain in the same place for almost forty years. “There, you see that?” he says. “That’s a piece of the cableway.” He hands it to his visitor, then
snatches it back and replaces it in the same spot on the desk, and begins to walk up and down the room again. Reaching out a hand to feel the back of another chair, he sits down and begins to talk again, much more rapidly than is his wont. “That was one of the pulleys,” he says. “One of the pulleys from the cableway. We had put in a million and a half dollars in that dam. Then we found out it wasn’t legal. But we had already—by the time we found this out—built the cableway. That cost several hundred thousands of dollars, which we owed the banks. … The Bureau of Reclamation had been making the appropriations. They were, under the law, allowed to spend money only on land that was owned by the federal government. They had assumed [that] the land on which the dam was being built
was
owned by the federal government, because that would be the situation in any other state, but in Texas the federal government didn’t own any land. The appropriations had all been for one year at a time, AND THEY WERE ILLEGAL!!!”