CIA'S "BROWN & ROOT DIMENSIONS"

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP73-00475R000100740001-5
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 2
• Document Creation Date: December 27, 2016
• Document Release Date: June 4, 2014
• Sequence Number: 1
• Publication Date: December 1, 1967
• Content Type: OPEN SOURCE

RAMPARTS STAT
Decra'Ssified in Part - Sanitized Copy Approved for Release @ 50-Yr 2014/06/04 : CIA-RDP73-00475R000100740001-5
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CIA "BROWN & ROOT DIMENSIONS") known "street names," set up by banks to disguise ownership ?1. '
? of companies by corporate buccaneers.
HEN HOUSTONIANS WANT to refer to something
gigantic, they often describe it as being "of .
Brown & Root dimensions." But the Browns
hardly ever sought publicity?for good reason, as
we ;aye seen. Houston man-about-town coluvist. George .
F.,.. .'mann tells of L rare interview George Brown once granted
to ime magaz:...a: Brown gave one of three answers to all
significant questions: 1) "I'm not informed on that"; 2) "1
don't know"; 3) "No."
Brown o Root's assets and income have climbed geo-
rne:ricaliy from the early road contracting days. Balance sheets. .
filed at the secretary of state' office in Austin show assets of ?
$658,000 on December 31, 1935 (with a net profit for that
year of $E2,C,0), and $1,147,000 on December 31, 1937, after
the New --)e.a: contracts began to flow in. War contracts
brought )7; )ration's June 30, 1942 assets to $5,332,000,
and th... Brown Shipbuilding Co., its biggest war
breadwivale; ...e last balance sheet, on file, dated October 31,.
? 1954 (befor,! ae Spain contracts), byes a profit-loss surplus of
$13,271,0C.,-_, and assets of $27,497,000. The-figiures are those
reported by the company and do not include the concealed
assets for which the Browns were famous.
?
With Herman Brown's death in 1902, George sold the
company for an alleged $.36,745,000 to the Halliburton Com-
pany, the world's leading oil and gas serviee company, acquir..:
ing Halliburton stock in the process. Brown &Root continues
to operate independently as a subsidiary of Halliburton.
Ac-
.,ocdingo eauthoritative Engineering News Record, Brown
.? Root alone did $639 million worth of business in 1965, $211
.. ;Ilion of outside the U.S.
All over the world, wherever big money is spent, George
2:70%"3 holdings. His interests own or control companies
in insurance, real estate and banking, as well.as oil
n
ao gas production, distribution and service. They Control
Texas Eastern Transmission, which after the war bought up
:he government-built Big Inch and Little Big Inch pipelines for
$1- 3 million?a fraction of present value?and grew to a net
wort; 1 of more than $1.1 billion in 1966. The acquisition made
the Browns a power in the oil industry, and it was through
them that Johnson's intimate ties with the industry developed.
Throughout ?s career, George Brown has "remembered" his
political fads. In one bank, the Capital National in Austin, ?
Brown .erests were co-stockholders as of 1964 with Ed
? Clark, Lyndon's ambassador to Australia; former Texas gov-
ernors Allan Shivers and Dan Moody; two Johnson-controlled ,
? trust funds; and the Brazos-Tenth Street Co. The Browns used
to control the $91 million bank (Herman was board chairman),
but control has passed to what Texans call the "Johnson ?!:
group." It is part of what appears to be a concerted drive by. i?
?
Johnson to acquire control of central Texas banking.
But if Brown was willing to give Lyndon his little bank in
Austin, he is still a major power in Houston banking; with:
substantial holdings in the $900 million First City National .
Bank and reported interests in at least six others. Moreover, he '?
has long ago ceased being a strictly Texas tycoon. He is not
') only board chairman of Brown & Root and Texas Eastern.
Transmission, but a director of International Telephone and
' Telegraph, ARMCO Steel, TWA and other corporate gLats.
And there is no telling how much Brown has in ested under little.
Another interesting am y ent erpri i th B F se s e Brown ound a I ?
? tion, to which Herman bequeathed much of his holdings and
which acquired most of the $36 million paid by the Halliburton l'? ?
Co. for Brown & Root. Assets as of mid-1965 were reported at
$74,490,000. Aside from the Foundation's tax-free business
investments ($55,882,000 in corporate stocks alone), it has ?
contributed to the Lyndon B. Johnson State Park and heavily 'y
to oil-rich Rice University. It also contributed to the Vernon /-
Fund, a CIA conduit in Washington ($95,000 in 1W; $150,000
iii 1962), and to the CIA's Radio Free Europe: Especially in-
triguing are the Brown Foundation ifts to the American
Friends of the Middle East (AFME)ri CIA-supported group
working closely with various Arab countries?where Brown &.
Root and other Brown-affiliated companies do a healthy busi-
ness servicing the oil industry. The first donation to AFME on /...
record was $50,000 in 1960. Not long afterward, Brown & '? .
Root won a contract to lay oil pipelines in Saudi Arabia for
the Arabian-American Oil Co., a consortium of U.S. oil
companies?itself a contributor to AFME. There followed a .
$50,000 donation to AFME in 1962 and another for $150,000
' in 1964, as the Near East contracts continued to flow in. It is
a short step from backing Lyndon to helping the CIA subsidize .
the propaganda activities of Arab governments.
/1' jraq, Kuwait, Libya, Saudi Arabia, Egypt?wherever the
61(Ivis, Brown is, too. But his self-interest in helping Pro-Arab
i . ,1ses is not limited to immediate contract benefits. As ?
Thomas D: Cabot, head of the Boston-based Cabot Founday?
' tion (which also contributed to AFME) and the Cabdt
Corporation (which extracts carbon black from Middle East
? oil), wrote in the Christian Science Monitor in 1953: "Oil is
the key to war, the Middle East the key to adequate oil, and -
? [pre-Nasser] Egypt the key to the Middle East. We need the
friendship of Egypt. . . ." Since one of the apparent aims of
the CIA is to make the world safe for US. business, it is small
? ?
?
wonder that a man like George Brown would cooperate.
? ? Brown's interests were also peripherally involved in ?other
CIA funding operations. William A. Smith, a director of
Brown's Texas Eastern Transmission Corporation and senior
? board chairman of Southern National Bank (a Texas Eastern
property), was a founder and trustee of one of AFME's
principal benefactors, the San Jacinto Fund. This mysterious
tax-exempt foundation received large contributions from
anonymous sources and dispensed them to such CIA favorites
as AFME (which received $500,000 from the Fund in 1960-61)
and the National Student Association. Headquarters for the
Fund were in Houston's San Jacinto Building, downstairs
from the offices of. the Brown Foundation and several of L
George's oil companies.
,Other elements of the Houston corporate aristocracy as-
sodated with Brown in banking and business ventures also
volunteered to provide 'secret conduits for CIA money:The r..
interlocking ti are of bewildering complexity. One such
le
:conduit is the .D. Anderson Foundation, which shares with '.
? Brown and the Brown Foundation ;.or holdir.z.:-. in Hous- ? ?
ton's First City National Bank and oy.,.-.s ;;:ock :-. ..:o Brown- '
?' affiliated American General Insurance Co. (..i'i,ose board
chairman, Gus Wortham, is a longtime frie.:.d and iinancier of ;
Lyndon Johnson). LIU% pal Leon Jaworski, an attorney for big
eastern interests in Texas, is an M.D. Anderson trustee; his 1 -?
.e
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Contint.toa?;;0
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Declassified in Part - Sanitized Copy Approved for Release @ 50-Yr 2014/06/04: CIA-RDP73-00475R000100740001-5
Declassified in Part-Sanitized Copy Approved for Release @ 50-Yr 2014/06/04 : CIA-IRDP73-0645R000160740001-5
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law partner, John H. Freeman, is the foundation's president A
1 I close banking associate of the M. D. Anderson Foundation ?
Ernest Cockrell Jr., is a founder and trustee of the San Jacinto
?. Fund. With George Brown on the First City National board
' are two executives of Quintana Petroleum Corporation, whose
vice president, Douglas B. Marshall; set up the Marshall
Foundation, a pipeline for government subsidies to AFME
,
and other CIA charities. George Brown lunches regularly,? 1?:?,:...)
since Herman's death, with Oveta Culp Hobby, Eisenhower's ' ?-? ?
first secretary of Health, Education and Welfare, publisher of I.
? ' the Houston Post, friend of LBJ?and founder of the Hobby
. .
1 Foundation, another CIA conduit to AFM E. George A. Butler, r?6?
I a director of Texas Eastern Transmission and other Brown. ? ????
affiliated companies, as well as of the Houston Post, is a
? ? ?? Hobby Foundation trustee. William P. Hobby, Oveta's son
and another foundation trustee, readily admitted the CIA .1
? link. And he probably summed up the sentiments of George
j, Brown and all these millionaire beneficiaries of federal largesse
when he said! "We are glad to have done it and proud to have
been of service to the federal government." '
?
? ' ?.).".??
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Declassified in Part - Sanitized Copy Approved for Release @ 50-Yr 2014/06/04 : CIA-RDP73-00475R0001007400015