Washington Press Club Foundation

Eileen Shanahan: Interview #1

December 6, 1992 in Washington, D.C.

Mary Marshall Clark, Interviewer

Eileen Shanahan - December 6, 1992 Tape 1 of 2

December 6th, 1992
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Eileen Shanahan - December 6, 1992 Tape 2 of 2

December 6th, 1992
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[Begin Tape 1, Side A]

Clark: Okay. I wanted to ask you about some of the stories that you covered in your beginning years of the Times. I know you covered taxes and you had been doing that actually at the Treasury, too. Are there any stories in particular that come to mind?

Shanahan: The tax story's always a great story because people care about their own taxes and about business taxes. And then, of course, there's always in addition the macro-economic effect of tax changes. So it's a good story and you get out front, as we say, onto page one with them quite often. That's one of the ways I got onto page one, over the years quite a lot.

There was all kinds of interesting tax legislation while I was at the New York Times. I rememberóhere again, an awful lot of economists knew a lot about the impact of tax and budget policy on the economy. The public at large didn't. And I remember one year in the early sixtiesóI don't even remember if it was Kennedy or Johnson who proposed a very substantial tax cut. I think it was the one that became the '64 tax cut, originally proposed by Kennedy, come to think of it, and enacted only after he was killed.

And I remember someone on the news desk in Washington saying, "But the budget! If they cut taxes like this, what's going to pay for the spending?" And my brilliant partner Ed Dale saying, "Well, the tax cuts will," which sounds an awful lot like what Jack Kemp and the Reagan administration were saying about the tax cuts they were proposing, which got enacted in 1981.

You just cut taxes enough it will generate so much revenue that you'll have more revenue than you did before because there'll be so much more economic activity, which is true up to a point but not true to a limitless extent as subsequent budget developments have shown for the Reagan tax cut. Charlie Schultze, whom I mentioned before, when the Reagan tax cut, a huge one, was being argued, said, "Well, there's nothing wrong with that theory, that if you cut taxes it will generate additional economic activity and that will increase the revenues. There's nothing wrong with what they're putting forth, if you divide it by ten." But they were simply claiming too much.

In fact, the Kennedy-Johnson tax cut did exactly what they said it would do and we had, of courseóeven before the Vietnam buildup got well underway in the latter half of the sixtiesóup until then and after then, we had eight uninterrupted years of prosperity. The recent Reagan-Bush years of prosperity are often called the longest period of peacetime prosperity, but the Kennedy-Johnson one really was the longest because the Vietnam buildup wasn't that big in terms of the economy.

But that's an ongoing story. It's not like some great exposé or one-timer. Important stories of my career have largely been that sort of ongoing story where you're covering it day after day over a long period of months or for the few months here in the House, say, and then another few months in the Senate. But it's important and it changes shape.

One of the reasons I've always liked doing taxesóand economic policy in generalóis that it rewards hard work. When they put out that five-hundred-page report at ten minutes of six and your deadline is ten minutes of seven, what you have in your head is all that matters. And if you've really worked hard and read all the stuff, you can shine. That's one of the reasons I have always liked doing it.

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There was a lot of important stuff I covered and not just taxes or part of a tax bill. Revenue sharing, which doesn't exist any more which actually is originally an idea of some people in the Kennedy administration, was enacted in the first year of the Nixon administration. The idea was to give federal money with few strings attached to state and local government. Subsequently, that's all been repealed, partly by Carter, the rest by [Ronald] Reagan, on the idea that the state and local governments had more money than the feds did.

But it was an interesting concept which I think might be coming back a little, if we get the federal budget problems out of the way in the Clinton years. Clinton's going to be a very interesting ex-governor. We've had a lot of governors who became president: both Roosevelts, Reagan and others. But this is a different world in which Clinton is becoming president. And he's going to be thinking a lot more about the federal system. And that's one of the things, what's the proper level of governmentófederal, state or localóto do certain functions and maybe have certain taxes. That's going to be interesting to watch and I'm in a good position to watch it and I'm going to watch it.

One thing I've thought about was the importance of television, being on television, to a reporter. It's kind of discouraging in a way. But I learned back there in the early sixtiesówhen I was with the New York Times, the importance of being on television, even if you're with the New York Times.

There was an occasion after I was on the New York Times when I was on "Meet the Press" with Wilbur Mills, the famous chairman of the House Ways and Means Committee where all tax legislation originated. And there was some hearing in the Ways and Means Committee Monday morning, the day after the "Meet the Press." And twenty-five out of twenty-five members of that committee stopped by the press table to say that they had seen me and I was great or something like that, including probably at least half of them who had never quite gotten straight who I was, even though at that time, I was the only woman at the press table and I worked for the New York Times. You would think they all would have troubled to find out.

Of course, a lot of members of Congress don't read the Times. You don't have to read the Times. You read your home town paper and the Post, a lot of them do. So that's when I formulated a rule: Never turn down an invitation to be on television. Your sources think you're important when they see you on television. I hate it! But it's true. It really bothers me as someone who has spent my life and wants to spend my life with the printed word.

One interesting thing about being on television that I discoveredóprobably still true. I don't get the chance to do a lot of TV any more. I think the public at large, the view the public at large takes of women, that we should be nice, that there's some kind of law written that we're supposed to be niceóstill exists and I was aware of it then.

You can see that the idea that a woman journalist isn't supposed to be tough as recently as [Ross] Perot having reprimanded a woman reporter by saying she was asking all these mean questions because she was trying to prove her manhood, to which a friend of mine said, "Why on earth would anybody want to prove that?" I should credit Jane Marshall of the Houston Chronicle who responded that way while I was still just seething.

But I remember one time in particular when I was on either "Meet the Press" or "Face the Nation" with Bill [William] Simon, then the secretary of the treasury and a real bully with the press and everybody else, and he could also filibuster. And I asked him some kind of a question and I got this long-winded answer that was no answer. So I asked the question again. And again I got this long-winded answer that was no answer. And I stood my ground and said, "Was that yes or no?" Whereupon, after looking startled for a minute, he answeredóone way or the other, he said either yes or no.

That's the most mail I ever got from any TV appearance. I got more than twenty letters. And by a margin of better thanówell, some of them said, "Good for you." And some of them said, "You bitch," often in those words. And the margin was two to one, "You bitch."

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Clark: This was when you were at the Times?

Shanahan: Yes.

Clark: Did you get any kind of comment from the Times?

Shanahan: No. I don't know whether they watched, knowing I was on. But I think here in 1992, we've all been a little dismayed at the depth of hostility towards smart, achieving women that the attacks on Hillary Clinton have surfaced. It's still much worse than I thought it was. And I thought we'd gotten past that. But I have sensed that if I were to be on one of those programs today and treat a nonresponsive official the way I treated Simon, I'd still get a preponderance of "you bitch" letters, I'm afraid. So we've come a short way. And don't call me "baby."

There were a lot of other things besides taxation and macro-economic policy, fiscal policy, that I covered at the Times. One I enjoyed a lot was antitrust which is an intellectually interesting field. Of course, anybody hearing me say that today would be very puzzled because we really have had no enforcement of the antitrust laws, practically, in the Reagan and Bush years, except for the Federal Trade Commission where a woman named Janet Steiger is the chair of that commission and she has done quite a lot.

But antitrust is a very intellectually interesting issue as to what createsóa tendency to create a monopoly in the language of the law and so forth. Also the hard-core antitrust things like price-fixing. And there's another case where knowing your subject makes it possible to write a better story. I remember one time a number of the large steel companies were indicted for price-fixing, that is agreeing among themselves what to charge for what, which is hard-core illegal.

And I wrote the story. And, knowing that most people wouldn't understand it, put the word, the correct word "criminal" in the lead, on indicted. Of course, "indictment" means "criminal," but a lot of people don't know that, either. You don't get indicted for civil offenses, I don't think.

Am I right about that? I'm not sure. In any event, I put it right in the lead: Bethlehem Steel, blah, blah, blah, blah, blah, were indicted today on criminal charges of agreeing what prices to charge. And the story led the paper that day. And I think if I hadn't known and been sure enough of myself to put that word "criminal" in the lead, "Hey, wake up, wake up! This is a crime," it probably wouldn't have.

So, I guess I'm singing the same song over and over but I am very much aware of the importance of really trying to learn your subject in depth. I'm a born beat reporter. I really like feeling like I know the subject. Sometimesóyou always get thrown into stuff in daily newspaper work that you don't know anything about when somebody's off or on vacation or whatever. I'm not altogether comfortable with that, though I've done enough of it in recent years to get a little more comfortable than I used to be.

One of the great fun times I hadóit turned out wellówas in 1971, when Nixon in an act of utter cynicism put in a price freeze, price and wage freeze, by executive order. There was authority on the books left over from the Korean War, I think, to do that. And his reason was utterly cynical. It was '71. He was going to have run for reelection in '72, the economy was expanding rather briskly and there were some fears that some inflation might not be far behind.

People won't believe you when you tell them what the inflation rate was at the time he imposed price controls. It was less than four percent. I forget the exact figure, three point something. And he did so that he could continue with policies that would keep the expansion going but without inflation. We paid a terrible price for it later when he off controls in January of '73 after he was safely elected. And that was the beginningóit wasn't the whole cause of the terrible inflation because the Arab oil embargo was possibly even a larger causeóbut it was a very major cause.

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Well, as it happened, when he did that in August of 1971 we were on vacation up at my sister's place in the Berkshires. And Nixon did it late on a Saturday night so that the markets would have all day Sunday to kind of absorb the whole thing. Friday night or Saturday night, I forget which.

Anyway, I remember we had been up half the night, my sister and her husband and my husband and I with their kids playing Monopoly until two or three in the morning. And the phone rings about ten o'clock. We're all still in bed. And somebody answers it and tells me the call is for me. And it was the news editor in the Times Washington bureau, the number two guy, Bob [Robert] Phelps, subsequently executive editor of the Boston Globe.

And he said, "Eileen, so-and-so is doing the story about the price controls, so-and-so's doing the story about going completely off the gold standard, so-and-so's doing the story about whatever, so-and-so's doing the European reaction story, and so and so. But we don't have anybody to put it all together in a news analysis. Can you do that?" I said something like, "What the hell are you talking about?" And he said, "Well, Nixonóyou know, Nixon imposed price controls and took us all the way off the gold standard," and there was a third element in the story.

Well, this guy was a great kidder and a great straight-faced kidder, who always took me in. I bit every time he ever kidded me about something. I said, "Okay, Phelps. Enough already. I mean, I'm not going to bite this time." Well, it took him about five minutes to convince me that this was true.

Clark: That's a great story in itself.

Shanahan: Anyway, he said, "We really need somebody to do an analysis and everybody else is tied up with, you know, the basic news." So I agreed to do it without figuring out how. I hung up and told my husband what the call was about.

And there's a wonderful, wonderful newspaper there in western Massachusetts. It's called the Berkshire Eagle, published in Pittsfield. It's just one of the absolutely fabulously good small newspapers in this country. And they had copies up there in my sister's cottage because they read that paper all summer long. And my husband said, "I'll bet you could go to the Berkshire Eagle and they'd give you a typewriter and a desk." And I suddenly realized that they were clients of the New York Times news service, so I didn't feel too pushy asking them. And I called them up and they said, "Oh, sure. Come on." So I did.

So I went up there and did a lot of telephoning and found out what had happened. They gave me all the wire copy that was coming in. They treated me just royally. And in fact, they came around and took my picture at the desk where I was working in their office and ran what I wrote, with my picture and a little note saying that this was written in the newsroom while Eileen Shanahan was staying with her sister and brother-in-law at Stockbridge. My sister said she became an instant celebrity, that all sorts of people had seen it. When they went to the concert at Tanglewood a couple days later, they were saying, "Oh, that's your sister."

Anyway, it was just kind of a fun thing I remember. It was an important story. I know it had all sorts of ramifications.

There were a lot of interesting things about the Nixon years I remember. People don't give Nixon credit that he deservesóI never thought that sentence would fall out of my mouth but it does. There was a much bigger reduction in the military under Nixon than most people realize.

There was a year somewhere in the course of the Nixon administration where the expenditures on the militaryóthe two budget lines crossed, the domestic and military expenditures, and the expenditures on the military became lower than those on domestic programs. And I remember sitting there sort of thinking that it was something that I needed to make a very major point of in my story, about the budgetóthis is when the

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budget came out that yearóand feeling a certain reluctance because we already knew an awful lot about what a truly immoral person Richard Nixon was, in the profoundest sense of the word.

But I don't think I ever hesitated. I thought about it. And I thought, in effect, "Um, hell, I've got to say something nice about Richard Nixon." But this is part of, I think, the press often has not gotten the credit it deserves. Yes, some have more opinions than others. I have very strong opinions by and large on lots of matters of public policy and in my evaluations of office holders. But I don't thinkóyou have to watch out for your unconscious biases. I certainly always am able to overcome my conscious ones. Sometimes I think your unconscious biases can get to you, can maybe influence what you're doing. But you try to train yourself.

I'll digress away from the time and the subject to tell you a story while I'm thinking about it, about unconscious bias when the Equal Rights Amendment was going through Congress and I was covering it, in the first year when it didn't pass in Congress. In due course, the Sunday section editor in Washington, the Sunday news "Week in Review" editor in Washington came to me and said, "How about writing us a piece on the arguments for and against the Equal Rights Amendment?" I said, "Oh, swell, sure."

So I sat down and wrote a piece I thought was quite all right and turned it in. And in a few minutes, after she read it, she came back to me and said, "But Eileen, didn't you leave out the most important argument against it?" I said, "What's that?" And she said, "Well, the argument that men and women are inherently different and should not have the same roles in life. And therefore laws that treat them differently are absolutely appropriate."

Well, she's right. That is the biggest argument against it.

Clark: Protective legislation, yes.

Shanahan: But it was so alien to everything I think, I had just forgotten about it. Well, once reminded, I could put it in and I did. So there are unconscious biases. Ever after, covering the women's movement, I tried to be always conscious of that.

I guess when I look back, as we all do, and try and think what are some of the most important things that we've done with our livesóI mentioned earlier, of course, my sense of contributing to public education on economic policy and my coverage of the women's movement.

But I think one of the other very important things, which wasn't as ongoing, were the stories on what should be called but was never legally called Nixon's tax fraud, his personal tax fraud. It was entirely clear to me that fraud, in the sense of intent, was present.

I had a tip that got me started on the story. That's often the case, I think, with a major story that you dig out. I don't know who it came from. That is, it came to me through an intermediary. I know who the intermediary was. Probably after all these years I ought to double back and ask him about the original source. He might tell me.

But the tip was that Nixon had donated his pre-presidential papers to the Archives after a date set by Congress when such donations became no longer tax deductible. This was a little retroactive anger at Lyndon Johnson, who had made a similar donation and taken a big tax deduction for itóor presumably had or maybe we knew he had. And Congress legislated that henceforth such papers of elected officials were not tax deductible, even though donated to properly tax-exempt recipients. And Nixon allegedly donated his pre-presidential papers to the National Archives before the change went into effect.

I was told, "Why don't you check that date? See whether or not it was before or after the effective date of the legislation." Well, it took quite a lot of digging. But there was a lot of goodóI don't remember a lot of the details, but a lot of good circumstantial evidence. And in due course, I did write a story.

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There were all kinds of people who were just dying to help me, I might add. But I did indeed write a story which on day one, the first one I wrote, the New York Times wouldn't print. So my intermediary then gave the same tipóand I think there were maybe some background documents that went with itóto a wonderful reporter, Lee Cohn of the Washington Starófirst-class guy. And he basically wrote the same story I wrote but had been unable to get into the paper. The Times just sort ofó"Well, you know, you can't say a thing like that about the president."

Clark: What year was this? In 1974?

Shanahan: '73 or '74. I'm not sure.

Clark: Who did you talk to specifically? Who told you specifically you couldn't do it?

Shanahan: It came back to me through channels. Up to New York and back to the news desk.

Anyway, Clifton Daniel who was by then the Washington bureau chiefóLee Cohn's story appeared. The Star was an afternoon paper. And he may have had the early noon edition of the Star and summoned me into his office. He had been out of town for several days. Daniel saidóI'll never forget his wordsóhe said, rather imperiously, "Why don't you scramble around and see if you can catch up on this very important story you missed?" Needless to say, I exploded.

Anyway, I then got the story into the paper the next day. And since Lee was an afternoon paper and I was a morning paper, the world at large didn't consider me to have been scoopedóor at least the world in journalism didn't. The Post, I don't think, made any effort to catch up with the story that fast. Of course, my story was all written and ready to go. But the Star printed it first.

But I didn't let it go. I got interested. A guy that would do that, I figured, would probably commit other tax frauds. So I started poking around on a lot of things. I knew that he had sold some property in California and property tax records are usually open, you know what the given piece of property is worth, you know what it was bought for, you know what it was sold for. That's all available stuff and I looked into that. It raised some questions about whether he had paid capital gains tax on what was a very large gain on property for which capital gains was owed. Two or three other elements here.

And the storyóother papers began being interested in it. And sooner or later there were enough questions, press conference questions and other things, that Nixon said that he was tired of all this. He was going to instruct or ask the staff of the Joint Tax Committee of Congress, which was known as one of the most prestigious staffs on the Hill, possibly the most so, to investigate, to clear his name from these terrible scurrilous, untrue charges.

Well, he underestimated the Joint Tax Committee staff. Somewhere in the midst of all this, a reporter on the Providence Journal got the information that truly enraged the American people, which was just four figures: the amount of money that the Nixons made and reported on their tax returns in the first two years of his presidency and the amount of tax they paid, which was seven hundred and some dollars in one year and eight hundred and some dollars in the next year on income well in excess of $200,000, less than a person with a rather mediocre income would have paid.

That reporter won the Pulitzer Prize for that disclosure. He probably wouldn't have known to go after it but for my work. I don't quarrel with the Pulitzer Committee and I don't think about it very often. But that was the real triggering event that enraged the American people, I think, and very much helped set the climate for Nixon must go.

All sorts of other stuff had already happened, the Watergate break-in and lots of other things had happened by then. And the Ervin hearings, that spread so much of just all the criminality around.

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The '72 campaign and so forth was either all on the public record or getting there, at that time. So this was an incremental thing.

It was not an item of impeachment, it proved, interestingly enough. There was a member of the House Judiciary Committee who brought it upóEd Mezvinsky of Pennsylvania, whose wife has just been elected to Congress this Year of the Woman. He offered it as an article of impeachment. The committee voted it down by a fairly lopsided vote on the peculiar ground that this was notóeven if a crime, not a public crime. It was sort of a crime in his private actions, which led some editorial writer to say, "That's interesting. In other words, if he had killed his law partner, that would have been a private act, not to be made a matter for impeachment." Anyway, it was voted down. It was not an article of impeachment. But I do feel that the whole issue of Nixon's taxes had a significant effect on public opinion about kind of a person Nixon was. And that therefore was some important work of mine.

Clark: Can we talk a little bit about the atmosphere during Nixon's decline? I think you told me earlier today, off-tape, that you had received a document of some kind to do a story on the Nixon years and that you ended up trashing the xerox because you felt it might be subpoenaed.

Shanahan: That's right. A lot of stuff had come out about [Henry] Kissinger's* wire-tapping of foreign policy reporters who had gotten various leaks and so on. So that there was aó"police state" is too strong a term. We knew the Constitution was there, even despite all the lives that were destroyed by the demagogue, Joe McCarthy.* The Constitution didn't seem too sturdy at that time. And there was some sense that maybe it wasn't too sturdy in the Nixon years, either, toward the end of them.

But yes, I know what you're referring to. I'm not quite sure in what year, '73, '74, somewhere in there, while Nixon was still president, the annual report of the President's Council of Economic Advisorsówhich always had a main chapter about where the overall economy stood but then traditionally has also had about four other chapters, each on some rather finite sector of the economyófor the first time in history was to contain a chapter on the state of the women in the economy.

The woman on the staff of the Council of Economic Advisors who researched it and wrote it was plainly, if you read the results, very much an anti-woman woman. I mean, there was no sense thatóit said basically that there wasn't very much discrimination, public or private, jobs or salary, it's all been greatly overblown. I don't remember the details that well. They probably surrounded this with some kind of statistics and so on purporting to show that, well, for getting paid less, it's because they went in and out of the work force, which wasn't true then and isn't true now. You can do the analysis and see that there are many other causes. Take the full effect of any X-years out of the work force and as explained, ten, twenty percent of the salary differential and nothing remotely resembling the whole thing.

Anyway, it was a terrible chapter. And someone leaked me a copy of the draft because there was an effort to get it changed. Actually, the person that handed it to me was on an advisory committee on women. But what she had was a xeroxed copy from somebody inside the Council of Economic Advisors. Here again, I don't actually know who my ultimate source was, only the intermediary.

______________________ * Henry Alfred Kissinger (b. 1923), German-born American scholar and diplomat, national security adviser and Secretary of State (1973) during the Nixon administration. *Joseph Raymond McCarthy (1908-1957), US Senator (R-WI) who led a communist "witch hunt" from 1950-54. In televised hearings from April 4 to June 17, 1954, McCarthy's claims against the US Army Signal Corps are unsubstantiated and he is finally recognized as a reckless fraud. In December 1954 the Senate condemns McCarthy for misconduct.

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So I wrote a story about what this chapter was saying and that the Advisory Committee now was trying to get it changed. And having written it, I would love to have held onto it and then been able to have this draft to compare with the final product. But this xeroxed copyóthey were actually already in page proofóhad handwritten notes on it, by the person who was the person inside the Council who had given it to my source.

And I was afraid it could be subpoenaed if they started trying to check a leakóI don't know what the legal grounds would have been. So that when I finished writing the story, I threw it in the trash. I didn't throw it in the trash at the New York Times bureau. I dropped it in a public wastebasket on my way to the bus. And thatóI look back on it as a fairly silly act. But that's what the atmosphere was like at that time.

Clark: Speaking of subpoenas, I'd like to ask you about your experience with the ITT scandal.

Shanahan: Oh, man! I guess that's the only time I've been called to testify on anything. And today we might have refused but at that time, we didn't.

Well, this was just a perfectly straight-forward little story I was covering. [Laughter] International Telephone and Telegraph Corporation was attempting to buy the ABC, American Broadcasting Companies, Inc., which is more than the basically ABC network. Under the law then, and maybe still, the normal antitrust agencies didn't have any authority to stop that merger. The Federal Communications Commission had jurisdiction over everything in the field of broadcasting. And the Federal Communications Commission was going to approve the acquisition by ITT.

The people in the Justice Department's antitrust division were horrified and before the FCC acted or did anything, they were writing memos saying, "Don't let this happen and here's why and why there's a big concentration of economic power, and so forth, shouldn't be permitted."

Back and forth the story went. It was a blizzard of memos. The FCC would write the reply and the Justice Department would write a new "Here's why you shouldn't do this." The FCC actually reopened the case and reaffirmed their approval by the same vote, four to three. And I'm justóyou know, I'm writing a story, as the two sides exchanged their legally worded insults.

And pressure began to emerge. I remember in particularóI mean, you would go to some hearing around this case and the ITT people would kind of demand to know, "Why were you there? This was no story." Then you'd tell them to go away, of course it was a story.

One night, when the Justice Department had come through with the latest in its memos about why this merger shouldn't be approved, I'm sitting at my desk writing the storyóactually rewriting it. I had had to write it rather hastily for the first edition, which doesn't have a big circulation, and I was not happy with what I had done because I hadn't had a chance to read it all. I just kind of skipped around and found the story as best I could. So I was rewriting it for the second edition, which was the big circulation edition, which is something I didn't do often but I did it when I thought I should.

And I sitting there, finishing reading the document and getting ready to write it for the second edition, when the PR guy for ITT suddenly appeared in the office. The newspaper offices didn't have any security in those days. Anybody could just walk right in.

Clark: What was his name?

We can look it up. We can attach these articles, actually, to the oral history.

Shanahan: [Edward] Garritty. And demanded to know if I was writing the story. And I said yes, in fact I'd already written it for the first edition and I was about to clean it up for the second. He demanded to see what I'd written. I said, "No way!" And we had some words and he left.

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There were two other reporters who were particularly following it closely, the AP reporter and the UPI reporter, and perhaps the Washington Star reporter, I don't remember a Post reporter. Anyway, there were several of us who were following it. Probably not as heavily as I was because, after all, the broadcast industry is headquartered in New York, it has some elements of a local interest story as well as a national interest story. I was getting on on page one with it more than most of my competitors were for that reason and had all the space I needed to tell this rather complicated story.

I'm trying to remember what the triggering event was.

Then finally the Justice Department pushed so hard, the FCC had to reopen the case, based on some indications that the Justice Department had stopped really making the antitrust caseóor finished making itóand was making another pointóITT was kind of a notorious, bullying, international company at that time, and they owned the telephone companies of a number of countries in Latin America and elsewhere.

And the Justice Department was making the point: How can we let thisóone of three American television networksócome into the hands of an organization that is known to intimidate governments around the world? Suppose, for example, that the government of Chileóa very interesting hypothetical in view of what subsequently happened in Chile with the overthrow of the Allende government.

But suppose the government of Chile decided to nationalize the telephone company which was then owned by ITT. Would ABC, if owned by ITT, report that story honestly? It seemed like a reasonable question to one person on the FCC who changed his vote to the point of saying, "Well, let's have another hearing."

Meanwhile, the people at JusticeóI guess maybe in the course of talking to them about it, perhaps I and some of the others who were covering it, told the Justice people that we'd been receiving these threats. You know, when you're interviewing somebody, you don't just ask questions, you do converse back and forth. And I don't have any specific memory that I told somebody at Justice that I'd been threatened but I very likely did. And I suspect that Steve Aug of the AP and Jud Stout of UPI may well have done the same.

In any event, the Justice Department was pushing the FCC to reopen the case. And one member of the Commission changed his vote which made it four to three in favor or reopening it. And that's when I and Aug and Stout of AP and UPI respectively were also subpoenaed to testify in the case, specifically about these threats that we had been receiving. And there were threats more than I had indicated in the earlier part.

[End Tape 1, Side A; Begin Tape 1, Side B]

Clark: For instance?

Shanahan: Well, there were things that weren't exactly threatening us personally but I remember that evening thatóI guess it was Jack Horner, the Washington PR person for ITT came in and demanded to see what I had written. He thenóor it might have been Ed Garritty, his boss in New York, I forget which one. He was talking about charging me with taking the Justice Department's side and being opposed to the merger and so on. He demanded to know if I knew that one of the FCC commissioners who had always voted against the mergeróNick Johnson, who was probably the most liberal guy on the commissionówas cooking up a bill that would prohibit any newspaper from owning any broadcast outlet.

Well, I knew and he knew I knew that the New York Times owned WQXR in New York and maybe some other stations as well. I said no, I didn't know Johnson was doing that, if he was. He subsequently said he wasn't. And he said, "Well, I think that's something you ought to pass on to your bosses. Then we'll see what attitudes they take toward your coverage of this case," and so on. Obviously, he was saying that I ought to put the presumed business interests of my bosses ahead of my coverage. Well, I didn't pay any attention to that stuff.

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Anyway, there was the testimonyóSteve Aug, Jud Stout and I all three testified in some detail about the threats we had received which, of course, helped to support the view of the Justice Department that letting this company own one of the three networks was a danger to the degree of integrity of the public information that might reach the public from ABC if ITT owned it.

What finally happened was that there was delay after delay after delay after delay. And there had been some exchange of stockóno, not exchange of stock, what was it?

They ultimately called off the merger. It had an expiration date, the merger agreement, of December 31, I think. And that time went and obviously somebody decided that it was more trouble than it was worth to go ahead with the merger. And so they called it off, more or less voluntarily.

I remember a man I knew very well and liked very well from covering the SEC, Gus Levy at Goldman SachsóI called right after that merger was abandoned, about something else, probably related to my SEC coverage. And he got on the phoneóhe was the number one guy there, a very important man on Wall Street. He said, "I shouldn't even be talking to you. You just cost me"óI think the figure was eight million dollars.

I said, "What do you mean?" He said, "Oh, we bought up a lot of"óit was either ABC or ITT stockó"thinking the merger was going to go through, and now its value has declined." But he was always very polite and genial and helpful and he did talk to me.

It's an interesting case that the point that was basically made by the ABC people throughout that hearing, throughout the whole process, was that they were the third network then and that there was no hope that they could survive without the merger. They were so far behind that they were ultimately doomed to die and leave the country with just two networks, which obviously any sensible antitrust person would prefer not to see.

Well, of course, people threatened with something they don't want to have happen to them always see dire consequences and in fact, as we know, ABC is the leader in quite a few ways now and has been for a long time. So those fears did not come true, even though the merger never went through.

There's one interesting-sounding footnote to all of this which is sometime while that whole merger was still pending I got a call from my old boss, Oscar Naumann, the Washington bureau chief of the Journal of Commerce who said, "Eileen, I think you ought to know that Jack Horner was just in hereóthis is the ITT Washington PR guyóasking questions about you, including who do you sleep with?" He said, "I told him as far as I knew you didn't sleep with anybody but your husband, as far as I had any reason to know or believe. And he pressed me and pressed me on that point until I almost threw him out."

Clark: This is after the merger had been dropped?

Shanahan: No. This was before it was dropped. It was also hanging fire. I thanked him kindly for informing me and then decided, well, I'd check around a little further. And I called Dixon Donnelley who had been my boss in the Treasury. That is, these are the two jobs immediately preceding my then-present job at the New York Times. And Dixon Donnelley said, "Oh, yeah, you know. He didn't make a special trip to see me but I ran into him somewhere and he asked me questions like that about you. And I told him as far as I knew, you didn't sleep with anybody but your husband."

Well, that was enough. So I'm trying to think, "What am I going to do about this?" I was furious, obviously. And I finally decided, after thinking about it for a few minutes, to call Marcus Cohn, the lead ITT lawyer. I remember, I got him on the phone, he came on the phone, and I said, "I'm so mad I'm going to be inarticulate!" and then told him what I had been told by these two former bosses of mine. And he said he'd look into it. And I told him, I said, "I want it stopped and I want it stopped today. Is that clear?"

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I remember speaking to him exactly like that. "Well," he said, "can I have till tomorrow?" So I said, "All right. Not a day longer."

Sure enough, he called me about midday the next day, basically saying it never happened but it won't ever happen again. He said he couldn't find any evidence there was any such inquiry but he had certainly made clear that such things should not happen and it wouldn't happen. And as far as I know there was in fact nothing further.

It was interesting. I remember talking later to someone who had been a corporate economist for many years, who was then in the government, and recounting this story. And he made an interesting point about ITT under its then quite nationally famous and notorious chairman of the board, Harold Geneen, who was, as I have mentioned, a great bully, among other things.

And what this guy who had spent most of his life inside corporations of that era said was, "Well, you know, probably a guy like Geneen, it would never occur to a guy like Geneen that you could leave jobs on excellent terms with your former bosses, to the point where they would say only nice things about you and, on top of that, call you up and warn you. I'll bet nobody ever leaves ITT on those kinds of terms." And I think that was a very interesting and probably correct insight.

Clark: We should also say for the record that this story itself was covered in the New York Times, that your sex life was being queried.

Shanahan: Yes. Yes. I think it used the more cautious word "private life," but I think people knew how to read that.

Clark: Well, I mean, to have your sex life chronicled by the New York Times is a public event.

Shanahan: Even if there wasn't any to chronicle. But yes, I remember telling myóI guess the Washington editor at the Times about all of this, who immediately said, "We should have a story on it." And I kind of demurred but they did get a story written about it.

Clark: There was another story I was going to ask you about, going through these same years. I guess it again was a series on the SEC, reforms in mutual funds. The story date I had is May 26, 1966. I think you won a Missouri Journalism School Award for that series.

Shanahan: That's right. That was earlier, I think. But anyway, yes, I did do a series, three parts I think, on how many mutual fund companies were really ripping off the most innocent investors in a variety of ways, the most flagrant of which was something called the front-end load fund. We paid all the commissions for the lifetime of a multi-year investment right in the beginning so that money was just gone, it wasn't invested, it wasn't earning anything.

And the terrible part about it was that you'd sign a contract foróI forget, five, ten, twenty years to make monthly investments and only an insignificant percentage of the people had ever signed one of those contracts that paid the whole multi-year commission up-front ever completed the investment program. Things come up and it's not a bill you have to pay, and so they didn't. So that people were making huge front-end load commissions and people who thought they'd made investments had practically nothing invested. And it was ultimately outlawed by statute.

The SEC was planning an investigation of this and I knew that. A lot of people thoughtóor charged that I got all my information from the SEC. In fact, there was some help there but basically I went around myself and did a tremendous amount of reporting, includingóone thing, I wanted to check the campaign contributions to members of Congress, not as egregious a matter then as it has since become, but still pretty bad even then, in the early 1960's, in terms of the influence you could buy and how it had been bought.

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At that time, Massachusetts, of all statesówe seem to think of Massachusetts as being a very corrupt state and it often has beenóhad the best campaign finance reporting law in the country then. There was no federal law worth a dime at that time. That didn't come about until after the Nixon scandal.

So I knew that Massachusetts where the mutual fund business started had this good campaign finance disclosure law and there are an awful lot of mutual fund companies that are headquartered in Massachusetts or do business in Massachusetts. And there was a directory of all the mutual funds that had the names of all the officers and directors of every mutual fund in the country.

And at that time, I paid my daughter Kate the minimum wage, whatever it was at the time, to go through that directory and make me on file cards an alphabetized list of all those officers and directors so that I could go to Boston, the state capital, and look up every name on the campaign contribution list of the people on the congressional committees. I remember it was two kind of standard-size, about three by five catalogue card boxesówhat are they, maybe about three inches deepótwo boxes full. And she did a wonderful, thorough, conscientious job. And as I say, I paid her well for thirteen years old and getting up there on this little table in the right office in Massachusetts, and just hitting pay dirt right from minute one. The only time in my life my hands have actually shaken with excitement at what I was finding. I could hardly get the cards back in the box.

And I wrote a storyóthere were people I admired, the chairman of the subcommittee of the Senate committee that handled securities matters, Senator Pete Williams of New Jersey was one of the ones who'd gotten a lot of money. He was subsequently caught in the Abscam thing and either quit or didn't win reelection. He was a worthwhile senator, though. It was a sad case. Anyway, it was great and that was one of the fun things I ever did. I'd almost forgotten about that.

Clark: Well, I'd noted it in the file, one, because you won a publisher's award for it. And also I came across thisó

Shanahan: And a Missouri [journalism award]? Yes, for the three-part mutual fund story. I did win theóit's an award that doesn't exist any more. At the time it was sort of the award of business journalism. There are a lot more now but there weren't very many then.

Clark: I also found that the New York Times covered you winning this story.

Shanahan: "This Little Lady."

Clark: Here we have Exhibit A. "Last spring this little lady caused a furor in the financial world."

Shanahan: Yes, they put that ad in a number of financial publications. And there I am, with my favorite picture of me, age thirty-seven or eight. That's the same one that's in Nan Robertson's book about the New York Times women. They advertised my award, I guess.

What you probably don't know about that ad is that one of the terrific young feminists on the New York Times at the time of the New York Times sex discrimination suit, Grace Lichstenstein, wrote that ad. She was then in the promotion department, what any other industry would call its public relations department. And she wrote that ad.

Clark: You must have had a chuckle with her about that.

Shanahan: Yes, we did have a good chuckle over it. Yes, we did. I had forgotten that they advertised, put that in that ad. "This little lady caused a furor." For the record, I'm five feet six. I was never a "little lady" physically or otherwise.

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Clark: On a little bit more serious level, looking back at this and thinking about some of the things that Carolyn Heilbrun wrote about in Writing A Woman's Life about ways in which we're portrayed and portray ourselves, did you have any feeling of discomfort then when you saw this ad? Or how do you feel about it now compared to how you felt about it then?

Shanahan: I don't quite remember. I don't remember being enraged. I do remember thinking it was amusing to be called "little" when I'm five six, which is pretty tall for my generation. And "lady"ówell, I like to think of some of the finer senses of the word, I'm a lady. But in terms of behavior, I'm not very ladylikeóclumsy and I swear a lot, might well be considered pushy at times and all sorts of the things that are not associated with being a lady.

I don't remember being enraged. I think I was probably pleased that they took the ad.