The Governor & the Company: An American Saga

Is Governor William F. Weld '66 a tool of big business? His opponents in the upcoming gubernatorial election would have you believe that he is. And if history is a guide, they may be right.

Meet Peter Berlandi, the governor's chief fundraiser, who has helped Weld amass an impressive campaign war-chest of nearly half a million dollars--more than all of his Democratic competitors combined.

Part of the Weld money machine's success is no doubt a result of Weld's standing in the state of Massachusetts: he's popular, he's well-connected, and he's expected to trounce his lesser-known rivals on Election Day.

But there's no denying that Berlandi also deserves much of the credit for bringing in the big bucks. Fundraising, after all, is a game of connections--the more connected you are, the more money you're likely to pull in. And Paul Berlandi is nothing if not well-connected.

Fundraising is also a game of favors--the more money a candidate raises, the more indebted he is to his supporters. This, too, is nothing new.

Taken together, however, the connections almost certainly relied upon by Berlandi in his fundraising efforts for the governor, and the favors almost certainly promised those people in exchange for their dollars, raise serious questions about Weld's accountability. Among them: who's interests is Weld serving--those of his well-heeled corporate patrons, or those of his millions of other constituents? And does serving the former mean selling out the rest?

All this because of one campaign fundraising official? It may not be as far-fetched as it sounds. For behind Berlandi--and it seems reasonable to conclude, behind Weld--is Berlandi's employer, the San Francisco-based Bechtel Corporation.

Berlandi is Bechtel's consultant for the Central Artery project, a massive, federally subsidized highway construction project in Boston that is currently the largest public works undertaking in the country. (The Central Artery may yet prove to be one of the nation's largest public works boon-doggles. To date, it is six years behind schedule and roughly $2 billion over budget, with no immediate end in sight.)

Founded in 1906, Bechtel quickly rose to the top ranks of American engineering contractors. The company's early and lasting prominence in the development of energy and transportation infrastructures was both the cause and the effect of a special, privileged relationship it has maintained with the nation's political leaders.

The list of elite political insiders who have been on the Bechtel payroll is sizable. John McCone, who headed the Atomic Energy Commission in the 1950s, and the Central Intelligence Agency in the 1960s, was a Bechtel man. So was George Schultz, the former secretary of state. And so, too, was Caspar W. Weinberger '38, the former secretary of defense who now publishes Forbes Magazine.

The Bechtel story is a significant one. It has larger implications for our political process as a whole, in terms of understanding the relationship between the public and the private domains and personal accountability in our system of government. Consider Bechtel's history:

After amassing considerable wealth during the 1920s by building pipelines for privately held oil and gas companies, Bechtel was hired by the government to build the Hoover Dam, in Boulder, Col. From the beginning, the company's business practices were suspect.

The firm has a history of cozy links to the federal government, and questionable business practices.

As journalist Laton McCartney relates in his 1988 book, Friends in High Places: The Bechtel Story, Bechtel workers were overworked, illegally paid in script, and compelled to live in dangerous, unsanitary conditions. Meanwhile, Bechtel played the corporate interest game, hiring powerful Jobbyists who successfully derailed the efforts of then-Interior Secretary Harold Ickes to initiate an investigation of the firm.

The ties raise serious questions about who's interests Bill Weld is serving.

The World War II era saw the further entrenchment of Bechtel's financial and political clout. The federal government turned to Bechtel to construct warships for both the British and American fleets. And after the bombing of Pearl Harbor, Secretary of War Henry Stimson literally ordered Bechtel to build the Alaska Oil Highway.

Towards the end of the war, a Bechtel subsidiary, Bechtel-McCone, started building bomber planes for the U.S. military. Afterwards, workers involved testified in court that Bechtel was guilty of war-profiteering, for adding fictitious overhead costs to the government's airplane bill. The charge was thrown out on a technicality.

Following the war's end, it was the barren deserts of the Middle East that yielded Bechtel's biggest prize to date--oil. The company seized upon the opportunity by building much of the Arab world's modern oil-producing infrastructure. McCartney reports that even as Bechtel was working hard to establish cozy ties with Saudi Arabian King Ibn Saud, former employees of the company were involved behind the scenes. Several worked for the U.S. Export-Import Bank, a government agency that subsidizes American corporate ventures abroad, to facilitate financing for the enormous projects.

In the 1950s, Bechtel developed close links with the Central Intelligence Agency. The firm and the government together sent covert operatives on overseas intelligence missions--to determine political trends in Israel and the practices of the Mossadeq government in Iran (that regime was later overthrown in a CIA-staged coup, shortly after it nationalized oil).

When Col. Moammar Khaddafi staged a coup in Libya in 1969, the United States determined that the new government would be favorable to oil interests, and actively encouraged Bechtel to continue its oil industry work there. In the 1970s, when the Arab boycott of Israel prompted legislation in Congress to punish companies that severed links with Israel to pander to Arab countries, Bechtel successfully lobbied against the proposed bill.

At the time, George Schultz, then executive president of the Bechtel Corp., noted that even if Arab countries barred Jews employed by U.S. corporations from working at their Arab subsidiaries, it was not so serious. "Jews assigned to these places by Bechtel mostly don't want to go there anyway," Schultz is reported to have said.

Also in the 1970s, Bechtel started working in the nuclear industry and soon dominated nuclear construction projects in the United States. But Bechtel's reputation for product quality in developing oil pipelines was not matched by its performance in building nuclear waste disposal facilities. The leaky Taranpur nuclear facility in India is one example. To help cover up the problem, Bechtel hired Indian workers to spread radioactive waste with bamboo poles.

And because Bechtel has operated unchecked by the government--or, for that matter, public interest groups and the mainstream media--its influence has waxed to dangerous proportions often.

This brings us back to the present and to the matter at hand. What do we make of the Weld connection to the powerful Bechtel Corp.? We can guess at the fate of the drawn-out Central Artery Project. And, though it may be too soon to tell whether the relationship Bechtel enjoys with the Weld administration has further significance, voters would do well to be inquisitive.

More importantly, the significance of Berlandi's Bechtel link goes beyond the campaign and the election. The fact that Berlandi works for Bechtel is not a cause, but a symptom, of a larger problem, for which the governor is not solely responsible.

How to prevent companies like Bechtel from taking advantage of the U.S. political system in the future is the larger dilemma. As far as that issue is concerned, Bill Weld and Paul Berlandi are small players in a much larger game.

Deborah E. Kopald '95 spent the summer researching energy issues pertaining to the Former Soviet Union for a Cambridge-based consulting firm.