Bribes, a bill and an Argus bagman

A brief historical note dug up recently by historian and Sen. John Thune aide Jon Lauck and Rapid City lobbyist Jeremiah M. Murphy:

In 1956, as a controversial bill deregulating the natural gas industry was rolling towards a narrow but safe passage, a South Dakota senator blew up the proceedings with an incendiary accusation: that a lobbyist for a natural gas company had offered him a $2,500 campaign donation, dubbed “a serious charge of attempted bribery.”

Sen. Francis Case at first declined to identify the lobbyist, but it was eventually revealed to be Nebraska attorney John Neff. In a statement on the Senate floor and then in later comments, Case said the offer represented “some abnormal interest” in the bill because of the potential it had to bring “windfall profits” to natural gas companies.

A $2,500 donation today wouldn’t raise many eyebrows. But that money in 1956 would be worth $21,500 today.

Case’s accusation sparked an uproar involving a number of still-famous names. Sen. J. William Fulbright, who wrote the natural gas bill, said “if an attempt was made to bribe a senator,” the perpetrator “ought to be pursued and prosecuted.” Then-Senate Majority Leader Lyndon Johnson huddled with Case for an hour, pressing him to disclose the name of the culprit.

The donation was 25 $100 bills, given through the intermediary of Ernest J. Kahler, the business manager of the Argus-Leader (as the Sioux Falls paper was then spelled).

Despite the uproar, and Case’s vote against the bill, it narrowly passed the Senate. But President Dwight Eisenhower vetoed the bill, leaning heavily on the incident in his veto message, which said he regretted striking down the bill because he is “in accord with its basic principles”:

A body of evidence has accumulated indicating that private persons, apparently representing only a very small segment of a great and vital industry, have been seeking to further their own interests by highly questionable activities. These include efforts I deem to be so arrogant and so much in defiance of acceptable standards of propriety as to risk creating doubt among the American people concerning the integrity of governmental processes.

Neff apparently received his money from Superior Oil Co. of California, paid $1,000 per month to travel “through five states, trying to discover how 10 senators intended to vote on the gas bill. He also took $7,500 in hundred-dollar bills from the oil moguls to pass out to good political causes.”

Some of the reaction seems unusual by today’s standards, where politicians routinely raise money from companies, unions and interest groups who support their positions on controversial issues.

"When the passage of a bill becomes so alluring that dollars are advanced to potential candidates even before primaries are had, warning signals go up," said Case, quaint in a day when politicians routinely raise more than a million dollars for their primary elections.

But expensive campaigns were rare then.

"I knew that if the contribution were listed and reported, a contribution of that size would stick out like a sore thumb among the $5, $10, $25 run of contributions in any list of mine," Case said.

The whole incident took place before the post-Watergate campaign finance reforms, which created a regime still in place, with considerable changes, today.

It’s unclear what the ultimate fate was of the gas bill, whether it was brought back in the future and passed without the taint of alleged bribery.

Several decades later, another South Dakota senator would become briefly famous for refusing a much more explicit and clear-cut attempt at bribery.

This post was derived from these four newspaper articles compiled by Murphy:

Tags: history