Lyndon Johnson’s Criminal Financial Activities – 1937 to 1963

It is a generally understood – if not well-known on a detailed level – part of LBJ’s “other legacy”: That through his highly skilled manipulative abilities, he had become the inventor of dozens of under-the-table frauds against the federal government (i.e. taxpayers).  Most of them were so well-hidden that they were never exposed and adjudicated.  But two of them made extensive national front-page news stories, ripe with insinuations of Lyndon Johnson’s clear and obvious involvement – but none of that was ever proven in a court of law.  A dilemma that most “historians” thus avoid, like the plague.

This essay combines cited material from two of my books (LBJ: The Mastermind of the JFK Assassination, and LBJ: From Mastermind to The Colossus), with the addition of the story contributed by George C. Taylor of Houston, named for a signer of the Declaration of Independence whose contribution, as author Charles Beard, (An Economic Interpretation of the American Revolution) explained, could be traced back to the money trail left by all of the signers. For the 18th Century George C. Taylor, it was his gunpowder contract. The present-day George C. Taylor may one day finish his own compendium of insightful observations, much of it based upon the wit and wisdom of Will Rogers.

Lyndon Johnson’s most important fund-raisers during the 1940s-1950s were Tommy Corcoran, George and Herman Brown, Ed Clark and John Connally—the latter, who gathered unreported cash from Sid Richardson and H. L. Hunt, to keep their names at arms-length.  Clark, the Austin attorney who “owned” segments of the Texas judicial system, also funneled money from Clint Murchison, among others, for the same purpose.[1] Johnson received payoffs not only from numerous other oil men and industrialists, with promises to do their bidding in Washington, but also from Teamster leader Jimmy Hoffa, a long-term mutual enemy of Robert Kennedy.

For years, men came into Johnson’s office and handed him envelopes stuffed with cash. None of these funds was ever reported and handled properly as campaign funds. They were collected and disbursed “under the table” according to Lyndon Johnson’s direction in the same way that he would handle the tainted cash from his other partners-in-crime, Billie Sol Estes and Bobby Baker, whose scandals almost did blow up his political career, as we will examine below.

John Connally and Ed Clark spoke freely to Robert Caro about having taken envelopes stuffed with cash to Washington inside the breast pockets of their suit jackets; they stated that the amounts were much larger than that which Claude Wild Jr. eventually testified to the Senate McClelland committee[2]—that “the commitment was that Gulf Oil would furnish $50,000 [annually] to Senator Johnson for his use.”  

Yet Wild did not go to work for Gulf until 1959, and the payments had started many years before that. John Connally – implicitly under orders by his long-time mentor LBJ – stated, “I handled inordinate amounts of cash,” and Ed Clark said about the Gulf Oil payments, “I knew about that fifty thousand. I knew about two hundred thousand.” But that was only one company, and Clark was the cash courier for many other companies, including Brown & Root and the Humble Oil Company; he handled personal money transfers from many of the individual oilmen as well, even, on occasion, George R. Brown. Clark said all contributions were made in cash and given to Lyndon to disburse however he pleased, to himself, to his own campaigns, or to those of other favored senators – or to the ones not so favored if they merely sold their souls for some needed cash. Besides Connally and Clark, Jesse Kellam, and Tommy “the Cork” Corcoran all admitted to being involved in collecting cash campaign contributions in Johnson’s behalf as well as uncountable others who would never admit being involved in such crimes.

If Johnson decided that help needed to be extended to a particular senator, he would pass the word through his network, and shortly thereafter, the cash would be delivered to him. “All we knew was that Lyndon asked for it, and we gave it,’ Tommy (“The Cork”) Corcoran was to say.”[3]

Before Lyndon Johnson went to Washington in 1937 to act as personal emissary and “rainmaker” to George and Herman Brown – while also “serving” his other constituents as a Congressman – their company Brown & Root was practically bankrupt and Herman lived with his wife in a tent.[4] 

“We didn’t know the stern from the aft—I mean bow—of the boat”

~ George Brown, of Brown & Root Construction

After Lyndon went to Washington, thanks to his manipulative ability and his clever Austin attorney-friend Alvin Wirtz’s cut-throat contract-writing skills, government construction projects began to flow to the company.  They started with dams and roadways but quickly expanded into practically every conceivable construction area, leading to their becoming one of the largest independent government contractors in the country.  Practically every contract was guaranteed to be profitable, given that they were framed as “cost-plus,” and awarded as “no-bid,” without competitor’s, which removed all risk of losses due to a mistake in an estimate or quote – even, for that matter, losses due to graft and corruption, thanks to Johnson’s ability to keep government auditors at bay. 

One example of Johnson’s exercise of this illegitimate power can be traced to Brown & Root having been given a contract in 1941 to build Navy subchasers and destroyers, eventually worth $357 million ($6.3 billion in 2020 dollars), despite having no experience whatsoever in shipbuilding. After landing the largest navy contract in history at that point in time, which expanded his construction business into a new specialty, George Brown observed, “We didn’t know the stern from the aft—I mean bow—of the boat.”[5]  It should come as no surprise that George and Herman Brown became Lyndon Johnson’s premier cash cow for the entire duration of his political life, through his attainment of the Presidency with their help and support. 

As noted at the Spartacus Educational website, “In the 1950s Brown & Root constructed air and naval bases in Spain, France and Guam for the United States government. The company also built roads, dams, bridges, petrochemical plants and large offshore drilling platforms.”[6]

How the Johnson Space Center Got Built in Reclaimed Swampland Outside Houston Texas

In 1961, thanks to Lyndon Johnson’s control over the space program as Vice President, Brown & Root won the contract for the $200 million Spacecraft Center in Houston on what was then mostly worthless swampland that was given to the government by Humble Oil.   Brown & Root’s capitalized value at that point was at an all-time high, so the Browns sold it the following year to Halliburton, Inc., which continued their successes, using many of the same practices. It soon expanded even more, becoming the largest beneficiary of the enormous building projects that began in 1964 to prepare Vietnam for the U.S. military’s takeover of their civil war. LBJ’s association with the Brown brothers had become the largest, most prized cash-cows he had ever created, netting him and his friends hundreds of millions in new wealth. And it was only one of many of his successes, all based upon his brazen use of “quid pro quo” sales of political influence and “insider knowledge” at a time when such illegalities were easier to hide, at least for those who knew all the tricks to do so.

A single example of how he exercised these skills will illustrate the point: Regarding the original $200 million contract to build the NASA site, before anyone else knew about that news, the nearly worthless swampland adjacent to the site suddenly became highly valuable. The two men who had the “insider knowledge” about that were Lyndon Johnson and Congressman Albert Thomas. A life-long Texan named George C. Taylor shared this interesting related story about how Johnson and Thomas capitalized on that knowledge:

My mother Evelyn Taylor was executive secretary at a real estate company on Mail St in Houston. It was American Mortgage and her boss was Jake Cayman. In early 1960 Congressman Albert Thomas spent the day with Jake Cayman and my mother brought them snacks and drinks. The next morning Jake Cayman told my mother he had a vision in his last night’s dreams.

All that swamp land in Clear Lake might have value. Get on the phone and buy Clear Lake. If it is for sale buy it. If it is not for sale tell them we are going to buy it. And she did.

As vice president, LBJ was in control of the space program [that was one of the several perquisites he had negotiated with JFK, and before that, as the Senate Majority Leader, he had ultimate control of the legislation creating that site]. Thomas was head of the military budget committee in the US House.

On November 21, 1963, JFK was in Houston to give tribute to Thomas the day before his death. It was why JFK was in Texas. At the ceremony JFK credited Thomas with being the man responsible for “putting the largest payroll in history into space . . . I mean payload . . . well maybe payroll”.

[Albert] Thomas was a roommate at Rice with George Brown. Brown was the financial backer of Johnson. Brown got the contracts when LBJ came into power. As usual “follow the money”.

The gossamer web of political backscratching Taylor describes – beginning with Albert Thomas directly, and his old “roomie” George Brown indirectly – illustrates a circular interconnection that is tied back to its creator, Lyndon B. Johnson. It was another hidden example of how he indubitably succeeded – through the “Good Ol’ Boy” network he managed – in enriching himself and his closest friends and political associates.  The inadvertent blooper by President Kennedy, on the evening before his murder, was a subtle acknowledgement by him that he knew all about that caper.

Even as other politicians of lesser note (Senator Thomas Dodd of Connecticut, for example) would be censured by the Senate for illegally converting campaign funds to their personal use (which, collectively, paled in comparison to Johnson’s), LBJ —the most prolific campaign fund abuse practitioner in history—would escape such scrutiny, doubtlessly because so many others were indebted to him for funneling cash to their campaign and/or justifiably afraid of him.

LBJ’s “Quid Pro Quo” Skills Burnished, Acting as the de facto Chief Government Procurement Officer

LBJ’s Partner-in-Crime Billie Sol Estes Making it BIG TIME in the National News Media, 1962: These four examples were among several other “above the fold, front-page” NY Times articles.

Between April and August, 1962, hundreds of articles appeared in all of the national and local news media about the Billie Sol Estes scandal, one of many major scandals involving Lyndon Johnson.  If anyone missed it in their local daily or weekly newspapers because they didn’t read them, they would have surely seen it on the evening news on television, and if not that, then the radio news, whether in local broadcasts or nationally syndicated shows with commentators like Paul Harvey, Walter Winchell and Lowell Thomas. The point is, no one over 10 years old and cognitively aware of his or her own existence, could have escaped reading or hearing the name Billie Sol Estes for a period of six months in the middle of 1962.

One such specific example of the point is the May 25, 1962 cover article in Time magazine (shown in the above graphic), which contained this vivid description of Billie Sol Estes:

The Amarillo Daily News called him “probably the biggest wheeler and dealer in all of West Texas.” He conveyed an impression that he wielded a lot of political influence beyond the boundaries of Pecos and even beyond Texas. He liked to flash a card indicating that he had donated $100,000 to the Democratic Party during the 1960 campaign. He displayed on the walls of his office photos, some fondly signed, of President Kennedy, Vice President Johnson, Harry Truman, Adlai Stevenson, John McClellan and other Democratic political notables. He boasted of his friendships with politicians, including Texas’ Democratic Senator Ralph Yarborough.

But for all his aura of wealth and power, Billie Sol remained a somewhat ridiculous figure; the inner bumpkin kept showing through. One acquaintance recalls him as “the kind of man whose lapels always seem a little too wide.” He sported a diamond stickpin that seemed garish even in Texas. He was constantly bumbling into grotesque situations. Invited to Governor Clement’s second inaugural in 1955, he was the only guest to show up in the ornate regalia of a Tennessee colonel. In 1956, he made a fool of himself by trying to persuade the president of a Pecos bank to help finance a wacky scheme to help Adlai Stevenson win the election. Under the Estes plan, large schools of parakeets, trained to say “I like Adlai” in unison, would fly over U.S. cities. When the banker tried to tell Estes that parakeets could not be trained to say “I like Adlai,” much less  say it in unison, Estes got purple angry, accused the banker of being anti-Stevenson, and stomped out.

Though Billie Sol’s name was nationally ubiquitous in 1962, Lyndon Johnson’s name was not necessarily noted, and if it was, there were caveats like “alleged involvement” that served to minimize his role, for fear of provoking his wrath.  In one major exception to that, Farm & Ranch magazine printed allegations of the Johnson-Estes direct connection.  At Johnson’s request, J. Edgar Hoover quickly dispatched FBI agents to visit the editors of the magazine and threaten them with reprisals if they ever did it again.

This was in the middle of a six-month period (from late March to September, 1962), during which the Billie Sol Estes scandal had been covered on the front pages, at one time or another, in practically every newspaper in the country. So far, there had been mostly speculative charges, based upon telephone records showing that Estes had several conversations with Cliff Carter as well as an “unpublished” telephone number in Washington. No written communications between the two had been maintained. This was consistent with Johnson’s long-practiced dictum against such records on all of his most illegal, unethical or even merely outrageous actions.

That contemporaneous paradigm eventually extended to the early biographies of LBJ, mostly because those early biographies were done with Johnson’s blessing, by long-time friends like Harry Provence, whose Waco newspaper was one of his biggest supporters.  Others would follow, including Merle Miller and of course Doris Kearns, whose book does not mention Mr. Estes.  Nor is it mentioned in most other biographies written about Lyndon Johnson.  But, were it not for his involvement, the Billie Sol Estes scandal would have never been reported outside of Texas.

The reason the Estes scandal has been ignored by most of LBJ’s biographers, including the famed Robert Caro – who often claims to “turn every page” in his research – is because it is more than merely a “hot potato.”  It’s more like a bombshell.  Rather than being just another case of mishandling “campaign contributions,” it quickly and inexorably leads to multiple murders ordered by Lyndon Johnson according to Estes himself and others who knew them.  Thus, with not a single mention of the name Billie Sol Estes in his four lengthy volumes, the most acclaimed biographer of Lyndon Johnson evidently missed hundreds, perhaps thousands, of newspaper or magazine articles in what was a ubiquitous national scandal in 1962, with LBJ right in the middle of it. 

Johnson’s involvement with Billie Sol Estes came about because of Estes’ need to have someone in Washington pave the way for his complex frauds against the federal government. Of course, he needed someone very highly placed in order to accomplish his deceit—someone who could literally rewrite the rules of the Agriculture Department’s cotton allotments program, for example—and that kind of influence would not come cheap.

During the course of their volatile relationship, Billie Sol Estes had reportedly sent Johnson more than $10 million (in 1960 dollars – equivalent to $87.6 million today) altogether, and – as ordered by Johnson – Estes had also sent many millions to his nemesis Senator Ralph Yarborough as well, enough to keep him from complaining and sufficient for Johnson to keep Yarborough under his thumb. 

As long as Johnson was still alive, after the murder of six people associated with the Estes frauds, Billie Sol knew that if he said anything that would incriminate Johnson, he would instantly become, according to his own words, a “dead man walking” who would literally become dead within 24 hours.  That was the purpose of the murders, a deadly reminder of what would await him when he least expected it.  To further ensure that his word would lose any credibility, Johnson forced him to use his own lawyer, John Cofer, who Johnson had retained on his behalf, purportedly for a payment of $75,000, with orders, not to seriously defend him, but to ensure he received a lengthy prison term. Which he did, twice.

While the crimes of Billie Sol Estes summarized here are admitted and acknowledged, his later atonement for his sins, and his consequent personal vindication, must also be noted.  The testimony he proffered to the 1984 Grand Jury – initially at the request of Texas U.S. Marshal Clint Peoples, and repeated in many venues, and books, for decades afterwards – provided the very spiritual Estes the expiation he sought upon his release from prison. 

The result of that grand jury’s deliberations produced Clint Peoples’ most satisfying closure of a “cold case”:  It expunged the absurd “suicide” finding in the 1961 death of Department of Agriculture Agent Henry Marshall and determined it should have been “homicide.”  While that did not produce “justice” for the killers of Marshall (since they were all dead, 23 years after that murder) they did hear testimony that their names were Malcolm Wallace, Cliff Carter and Lyndon B. Johnson. 

And that was all that U.S. Marshall Peoples wanted to accomplish:  Closing a “cold case” that he had been impeded from closing for twenty-two years by Lyndon B. Johnson, who had been the most powerful man in Texas, the United States and the world during his reign of treachery.

The 1961-63 “TFX Scandal”

Lyndon Johnson was also behind the infamous “TFX Scandal” – a story merely summarized here, but meticulously detailed within “LBJ The Mastermind …” – for which Johnson had collected at least one known (probably more) suitcase filled with $100,000 in cash.  This scandal was the result of his clever plot that caused the cancellation of a government contract to Boeing (Washington state based) so that it could be given to General Dynamics (Texas based).  For that, he was assisted by a number of others, including Fred Korth, Secretary of the Navy (who was forced to resign his position due to the unfolding scandal), Deputy Secretary of Defense Roswell Gilpatrick, and Robert McNamara, Secretary of Defense. 

The intensity of questioning these officials in the weeks leading up to JFK’s assassination is reflected in this vignette:  During chairman John McClellan’s Senate Investigations Subcommittee hearings, which was then engaged in investigating the granting of the TFX contract to General Dynamics, Senator Sam Ervin asked Robert McNamara:[7]

“. . . whether or not there was any connection whatever between your selection of General Dynamics, and the fact that the Vice President of the United States happens to be a resident of the state in which that company has one of its principal, if not its principal, office.”

McNamara tearfully responded, “Last night when I got home at midnight, after preparing for today’s hearing, my wife told me that my own 12-year-old son had asked how long it would take for his father to prove his honesty.”

It is not clear whether McNamara ever proved his honesty to his son, but given everything else in evidence, including his later prevarications (which he referred to as the “fog of war”) described within the Mastermind book (and my Colossus and Liberty books as well), his entreaties to his son might not have been entirely convincing.

The Senate committee investigating this fraud was nearing their conclusion – and closing in on indictments – when JFK was assassinated and the new President Lyndon Johnson immediately forced the committee to disband. 

Instead of mass indictments, three weeks later, on December 12, 1963, Johnson went to Fort Worth to celebrate the official awarding of the TFX (a.k.a. the F-111 fighter jet) contract to General Dynamics.[8] Sharing that celebration was Henry Crown, who had the greatest ownership stake in General Dynamics, a major Democratic Party fund-raiser and financier from Chicago who had numerous Mob connections there, as well as in Los Angeles, Las Vegas, New Orleans, Miami, and Dallas.[9]   Crown was also a close associate of Sidney Korshak, a lawyer who worked for the Chicago Mob who was described by senior Justice Department officials as one of “the most powerful members of the underworld.”[10]

LBJ’s Scandal “Status Quo”

November 21–22, 1963

By the autumn of 1963, the rumors of Lyndon Johnson’s many entanglements with the Billie Sol Estes case and the TFX payoff were still percolating, but were overshadowed by the latest scandal, referred to generally under the name of its chief architect, Bobby Baker.  It must have been seen by Johnson as the biggest threat of them all, especially since Baker was no longer communicating with Johnson—or vice versa.

Johnson had spent the better part of the six weeks before the assassination at his Texas ranch, purportedly planning the “Welcome to Texas” party for JFK at his ranch, a celebration that required no real planning since he knew it would never actually occur.  He spent most of that time planning the Dallas motorcade, resulting in many of the well-known “anomalies”:  removal of the standard motorcycle formation surrounding the limousine and the two Secret Service agents from the rear bumper; the ending of all police protection within Dealey Plaza; the placement of JFK’s doctor, reporters and photographers in vehicles far behind the Presidential limousine; the late change in routing, to bring the motorcade up Houston Street with the 120 degree left turn onto Elm, among the numerous others, all of which clearly facilitated the multiple snipers surrounding the “kill zone.”

It was well known that JFK had been planning to remove Johnson from the vice presidency, either by dropping him from the 1964 ticket or through a possible indictment for tax evasion and fraud, even before the campaign began. JFK’s secretary, Evelyn Lincoln, had said that Bobby Kennedy was investigating Johnson’s involvement with Bobby Baker. This is where the matter was on November 19, 1963: The president had discussed the Baker investigation with Mrs. Lincoln and told her that his running mate in 1964 would not be Lyndon Johnson. President Kennedy knew that if he kept Johnson on the ticket, he would be like a time bomb that could go off at any time. Doing so could lead to certain defeat in 1964.

Unfortunately for President Kennedy, it was too late; the unraveling had already gone too far.

LBJ’s Ultimate Heist:  government-owned Gold Bars Hidden in a Mountain

Even the examples of public thievery noted above pale in comparison to the charges made in a trilogy of books titled The Gold House: The True Story of the Victorio Peak Treasure. According to the author, writing under the pseudonym John Clarence, Lyndon Johnson [began, and Richard Nixon, then Gerald Ford followed] stole hundreds of millions of dollars worth of gold bars (that was the value at the time — today’s estimate for eight million troy ounces of gold bullion would be over 15 billion dollars). The gold, according to this story, had been accumulated by the government and stored in a secret cache at Victorio Peak, a small mountain located on the White Sands Missile Range in New Mexico.

Author Clarence, who had done extensive research on this subject from many other sources, learned this story from a CIA operative whom he called “Mr. H.,” who had facilitated the theft, and who Johnson later tried to enlist to kill Senator Ralph Yarborough and Bobby Baker as well. When asked why he took Johnson’s assignment without having any intention to complete it, he explained that he “hated Johnson” for what he believed he had done to have Kennedy assassinated and just wanted to give Johnson something else to worry about, as to when and how Yarborough would be eliminated. During the same conversation he claimed that Johnson said, “Bobby Baker has been part of the family since we were kids, but that son-of-a-bitch could bury me. You might as well include him.’”[11]

LBJ’s Chickens Came Home to Roost Years After His Demise

Thus Were They Easily Ignored by “Historians” Who Stopped Looking for Records Post-1973

All of the information concerning the collection and disbursement of millions of dollars of “campaign contributions” as referenced in the first section above (that had begun in the 1940s) came not from any investigation into Lyndon Johnson’s illegal activities; those hearings had come to an abrupt close shortly after he became president, as he personally demanded they be. The startling information incriminating Johnson never came to light until 1975 — two years after his death.  It became public information accidentally, the result of a Securities and Exchange Commission lawsuit against the Gulf Oil Corporation.  It came about not because the federal bureaucracy initiated investigations into the crimes of Lyndon Johnson, but as part of the investigation into his successor’s much-smaller scale scandal named Watergate.[12]

Nine years after that, at the 1984 Grand Jury hearing referenced above, the jury panel heard evidence that — had they been alive — would have caused indictments to be issued to Lyndon Johnson and his aide Cliff Carter and hitman Malcolm Wallace. But that result was immediately well hidden by the press, as documented in LBJ: From Mastermind to The Colossus.[13]

Thus, in a prodigious historical irony, the wheels of justice—grinding ever so slowly, while aiming to bring down Richard Nixon for much smaller, nearly trivial by comparison, transgressions and abuses of power—accidentally uncovered some of the slightest of Lyndon Johnson’s criminal acts, over two years after his death. Saved again by the vicissitudes of time and space, the complete disinterest of journalists on a new political bandwagon to evict an even more-hated president, and the randomly-esoteric nature of “justice” — Lyndon Johnson again escaped penance, even twice in a post-mortem context.  

End Notes:

[1]Caro, Robert, Master of the Senate, p. 407

[2] Ibid.

[3] Ibid. pp. 407-408

[4] Brown, Madeleine, Texas in the Morning, p. 70

[5] Caro, Robert, Master of the Senate, p. 406

[6] See Spartacus Educational —

[7] Ibid.

[8] Nelson, Phillip, LBJ Mastermind of the JFK Assassination, pp. 192-193

[9] Scott, Peter Dale, Deep Politics and the Death of JFK, p. 155

[10] Scheim, David, Contract on America: The Mafia Murder of President John F. Kennedy, pp. 241-242

[11] Clarence, John & Tom Whittle, The Gold House: The True Story of the Victorio Peak Treasure: The Lies, The Thefts. (Vol. II), 2013.  pp. 198-99

[12] Op. Cit. (Scheim)

[13] Nelson, Phillip, LBJ: From Mastermind to The Colossus, pp. 14-18

3 thoughts on “Lyndon Johnson’s Criminal Financial Activities – 1937 to 1963

  1. Pingback: Globeinfolive

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s