The Bright Image: The SEC, 1961-1973
Ethical Crisis at the SEC
ITT
In mid-1972, the Department of Justice announced a settlement of an anti-trust case that had been brought against International Telephone and Telegraph ("ITT"). The SEC had brought insider trading allegations against officers of ITT that were pending at the time of the settlement. Critics wondered why the government, which earlier that year had expressed faith in the strength of its case, settled with ITT on such favorable terms.
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Congress began to investigate allegations that the settlement was reached after the Nixon administration pressured the Department of Justice in return for contributions to the 1972 Republican National Convention in Miami. The SEC insider trading investigation resulted from evidence that ITT officers had traded substantial blocks of stock after negotiations had begun between ITT and Justice.
The Senate Judiciary Committee, which was beginning its investigation of other allegations of campaign finance abuses in the 1972 campaign and eventually of the Watergate crisis, sought assurances from Chairman Casey that it would be permitted to view the SEC case file once the Justice proceedings had concluded.
Before Casey left the SEC, White House Counsel John Dean and former Attorney General and 1972 Nixon campaign manager John Mitchell met with him. While no record of the events of that meeting remain, Casey forwarded 34 cartons of ITT files the SEC had accumulated to the Department of Justice after the meeting, effectively putting those files beyond the reach of Congressional committees investigating the matter.
Casey's tenure ended, as it had begun, in controversy. But the SEC soon faced an even more significant public image disaster.
Related Museum Resources
Papers
Key Facts in Confirmation of Richard Kleindienst as Attorney General [Transcription] (Courtesy of the Nixon Presidential Library & Museum)
Statement of John N. Mitchell before the Committee on the Judiciary of the United States Senate on ITT [Transcription] (Courtesy of the Nixon Presidential Library & Museum)
Joint Letter from Senators Hart, Burdick, Kennedy and Tunney to Senator James O. Eastland with questions concerning ITT [Transcription] (Courtesy of the Nixon Presidential Library & Museum)
Memo from L. Higby to John Dean requesting analysis of contributors to 1972 Democratic candidates, particularly officers of ITT and subsidiaries [Transcription] (Courtesy of the Nixon Presidential Library & Museum)
Letter from John W. Dean III to Senator James O. Eastland invoking executive privilege for Peter Flanigan [Transcription] (Courtesy of the Nixon Presidential Library & Museum)
Memo from John Dean to Peter Flanigan in response to letter from Senator Eastland [Transcription] (Courtesy of the Nixon Presidential Library & Museum)
Memo from Caspar Weinberger to President Nixon on Troika Plus meeting [Transcription] (Courtesy of the Nixon Presidential Library & Museum)
Memo from Charles Colson to Fred Fielding on SEC handling of ITT investigation [Transcription] (Courtesy of the Nixon Presidential Library & Museum)
Memo from Charles Colson to Fred Fielding on upcoming SEC release of ITT files to Judiciary Committee [Transcription] (Courtesy of the Nixon Presidential Library & Museum)
Letter from SEC Chairman William J. Casey to U.S. Representative Harley O. Staggers explaining release of ITT materials to Department of Justice [Transcription] (Courtesy of the Nixon Presidential Library & Museum)
Letter of protest from U.S. Representative Harley O. Staggers to SEC Chairman William J. Casey on release of ITT files to Department of Justice [Transcription] (Courtesy of the Nixon Presidential Library & Museum)
Letter of protest from U.S. Representative John E. Moss to SEC Chairman William J. Casey on release of ITT files to Department of Justice [Transcription] (Courtesy of the Nixon Presidential Library & Museum)
Letter from SEC Chairman William J. Casey to U.S. Representative Harley O. Staggers on ITT investigation [Transcription] (Courtesy of the Nixon Presidential Library & Museum)
Letter from Ralph E. Erickson, Deputy Attorney General to U.S. Representative Harley O. Staggers on SEC transfer of ITT files to Department of Justice [Transcription] (Courtesy of the Nixon Presidential Library & Museum)
Letter from U.S. Representative Harley O. Staggers to SEC Chairman William J. Casey ordering examination of SEC handling of ITT materials [Transcription] (Courtesy of the Nixon Presidential Library & Museum)
Letter from SEC Chairman William J. Casey to John Dean, with draft response letter to Harley Staggers [Transcription] (Courtesy of the Nixon Presidential Library & Museum)
Photos
- Humes, Ted (July 16, 1971) (Courtesy of the Library of Congress)