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The furor over ITT is not likely to die down. Last week it took some new turns. In Washington, Presidential Assistant Peter Flanigan, Nixon's chief problem solver for businessmen, appeared at long last before the Senate Judiciary Committee to testify on his role in the consent decree that allowed ITT to keep Hartford Fire Insurance. His appearance averted a confrontation between the Senate and White House over "executive privilege"—the claimed right of presidential aides not to be summoned before Congress. But Flanigan declined to answer many questions, among them what meetings about the case he might have had with Kleindienst or ITT officials. He would only say that he had served as a "conduit" to get for the Justice Department an independent appraisal of the effects of an ITT-Hartford breakup, written by Richard Ramsden, a financial analyst. The committee then voted to end the six-week hearings on Kleindienst's nomination for Attorney General that have delved deeply into the consent decree. Kleindienst's confirmation now seems likely but not certain.
Earlier last week, Ramsden had cut the ground out from under a key part of the Administration's explanation of why it had let ITT get away with a consent decree allowing it to keep Hartford. Ramsden's report went to Richard McLaren, former Justice Department antitrust chief, who said that it had convinced him that breaking up the merger would have shaken the stock market and hurt the U.S. economy. Ramsden testified last week that his report justified no such conclusions.-
Not surprisingly, ITT was also under siege in Chile. An angry President Allende announced that he would ask the Chilean Congress to nationalize the $222 million Chile Telephone Co., which is 70% owned by ITT, and possibly other ITT Chilean properties as well. He made no mention of compensation. Expropriation seems likely; no Chilean Congressman is now prepared to defend ITT. Thus the company seems to have little hope of recovering the $70 million that it deducted from 1971 profits to cover expected losses, even after insurance payments, on its Chilean investment. Counting that deduction, the company's net profits dropped from $362 million in 1970 to $337 million last year, though operating profits before the deduction rose to $407 million.
Monastic Order. Naturally, ITT could brush off that blow—but not gracefully. To company executives, any interruption in net growth, even if it is temporary and local, appears to strike at the essence of ITT. Geneen views his company not as a collection of plants and products, nor even as the management system on which ITT incessantly prides itself, but as a mystique. ITT men consider themselves an elite corps dedicated to a single cause: operating profits shall increase every quarter—a goal that ITT achieved for 50 consecutive quarters through the end of 1971. To that cause they are expected to sacrifice, ITTers. A Brussels host who gave a party for ITT European officials from New York last year got them to attend only by promising that he would be the sole non-ITT person there.