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The ARCO Connection


By Mark R. Anspach

THE ENGELHARD LIBRARY is a small, unpublicized basement facility used by only a few graduate students. This quiet commemoration of a million-dollar contribution provoked a vehement student reaction which needs no recounting here. On the other hand the Kennedy School accepted a like sum from a major oil company with great fanfare. It proclaimed the ARCO Public Affairs Forum the focal point of the new building. Every speech, debate, reception or symposium has been heralded by a series of posters and newspaper notices emphasizing the capitalized ARCO name. But this has not moved students to question its propriety. The Forum stands untouched by the controversy embroiling the library beneath it.

The lack of response seems all the more surprising considering how unprecedented the naming of the forum is. The Engelhard Library is part of a long tradition of purifying dirty money by honoring the former owner after his death. But there is no tradition of naming Harvard buildings for living corporations. ARCO is apparently the first brand name used for a Harvard institution. Yet the Kennedy School did not look into precedents or weigh the implications of such a policy departure. Since every announcement of a Forum event is also an advertisement for ARCO, the implications are far-reaching.

Far-reaching is also the term for ARCO's economic power. With annual revenues in 1977 topping $11 billion, and a net profit before taxes of close to a billion dollars, the Atlantic Richfield Company is one of the nation's largest oil firms. In 1977, it acquired the Anaconda Company, a leading mineral producer. Today ARCO's interests extend to copper, aluminum, coal, uranium, a few solar and geothermal energy operations, and even a London newspaper, The Observer.

ARCO President Thornton Bradshaw '40, and Director Frank Stanton were the Kennedy School's intermediaries with the ARCO Foundation. Both company officers are members of the School's Visiting Committee. The Kennedy School agreed to the ARCO name in 1977 in return for a contribution of $1.1 million, which equals only 0.16 per cent of ARCO's after-tax profits that year.

The association with Harvard is clearly a bargain for ARCO. But the money involved should not be enough to persuade Harvard to lend its prestige to this unsavory outfit or to compromise its own integrity.

The Kennedy School did not review ARCO's legal record or consider the possibility that future crimes by the company could bring Harvard disrepute. This may prove a serious oversight. Through the years, ARCO has been accused many times of willful violations of the law (see inset for charges and civil settlements). Still more significant for a Public Affairs Forum is the political thrust of much of ARCO's activity.

The Forum, an open, multi-level atrium in the center of the building, expresses architecturally its role as the School's center for open discussion of political issues. "It is physically and symbolically the soul and the heart of the School," Associate Dean Ira Jackson '62 said. Fifty scheduled events have taken place to date, before a total audience of 10,000. Last fall's debate between gubernatorial candidates Francis W. Hatch '46 and Edward J. King was broadcast by radio. Jackson said the debate wouldn't have been possible at the School without the Forum. But he admitted that if the Forum bore the name of a partisan political group rather than a corporation, this might tarnish its impartiality in the public eye. He does not know of any investigation by the School into ARCO's political activities.

Had the School studied ARCO's record before adopting its name, it would have found, in addition to sometimes overzealous profit-making, an active involvement in legitimate politics. The company advances its interests through its officers and its own political committee.

ARCO's Chairman of the Board is Robert O. Anderson, the entrepreneur responsible for the mergers that turned the company into an industry giant. Anderson's many political pursuits have won him a place in the current Who's Who in American Politics. Most notably, Anderson was a member of the finance committee of Nixon for President in 1967-68. Anderson was one of the oil executives who successfully sought Walter Hickel's nomination as Secretary of the Interior. Hickel was a development-minded governor of Alaska, and ARCO was intent on exploiting its North Slope holdings. Anderson served as a Republican National Committeeman from 1968 to 1972. In 1972, Anderson and eight other ARCO directors gave a total of $62,000 to Nixon's reelection campaign. Twenty-nine ARCO officials could be counted on federal advisory committees in 1972.

New federal campaign laws in 1974 allowed ARCO to organize a political action committee (PAC). The New York Times called ARCO's "Civil Action Program" one of the most sophisticated corporate PACs in the country. It is also one of the best financed. While other PACs usually confine themselves to soliciting campaign contributions from employees, ARCO spends about $750,000 annually giving political instruction to employees as well as retirees, shareholders, royalty owners, leaseholders and distributors. It encourages them all to pressure their legislators. In its latest annual report, ARCO notes, "In its continuing effort to heighten employee and shareholder political awareness, the Company has widened its Civic Action Program, which now has 45 local area committees operating in 13 states..." All told, the program maintains contact with 63,000 people. These figures uphold the contention that ARCO is a significant national political force on the basis of its PAC alone.

The company also bombards the public with advertising. To quote again from the annual report: "Advertising... is a fine way to carry on a dialogue with the public on topical issues. The Involved American Campaign of 1977, for example, appealed to citizens to take a stand on a number of national issues from energy to urban blight to aging. More than 35,000 Americans responded." An ARCO official told The New York Times that the company's three long-term public policy concerns were the withdrawal of public lands from development, the stringency of the Clean Air Act and increasing government regulation of corporations. ARCO's programs to mobilize employees and propagandize the public against these threats to its economic interest are described in its annual report under the rubric of "Corporate Responsibility." That takes chutzpah.

THERE ARE A number of reasons why ARCO's status as a political organization should stop the Kennedy School from using its name. The promotion of the name suggests a political endorsement. The academic community should be a haven for myriad viewpoints; Harvard should refuse to give its institutional backing to any single one.

The motivation for the naming of the ARCO Forum appears to be founded on the same type of concern that prompted Susan Ford to promote Subaru. This in itself is distressing. It would be irresponsible for Harvard to follow a policy of endorsing consumer products for cash. Even if the University were to deny that the name of the Forum constitutes an endorsement, the public would still assume Harvard would not associate its name with an institution of which it did not approve. Moreover, it is well known that a prime objective of advertising is simply to publicize the product's name. ARCO is a gasoline brand name. Every Forum notice helps hammer that name home.

Associate Dean Jackson said ARCO's motive for funding the Forum was its "excitement about the programmatic possibilities." He would not speculate on other possible motives. It is, of course, possible that ARCO has experienced a sudden access of patriotism since the years 1962 to 1968, when the company paid no federal income taxes on a book income of $410 million. There is a very simple test of this thesis. If ARCO is genuinely interested in the value of the program, not the benefits of advertising, it will instantly agree to change the name rather than jeopardize the program's integrity.

Otherwise, the ARCO connection may well cast doubt on the Forum's integrity. The Forum may lose potential speakers who object to the political implications of the platform's name. Jackson doesn't believe this has happened and has no reason to think it will, but he conceded it is "conceivable." It is true that some liberals and labor leaders have spoken at the Forum already; perhaps it is too early to judge this possibility. In any event, guests of the School should not be put in the positions of having to speak under a name that may be anathema to them.

Another problem is that Forum planners may exercise self-censorship when selecting topics. Jackson stated emphatically that ARCO's possible reaction to a particular event would never be a consideration. But self-censorship need not be conscious. For example, the subjects of oil industry corruption or "The Political Clout of Atlantic Richfield" might prove too embarrassing even to be considered. Again, business critics such as Cesar Chavez and former Iowa Senator Dick Clark have spoken at the Forum, and the School has also invited a couple of prominent socialists. However, the crucial point remains that there has been a conspicuous absence of energy iconoclasts.

Finally, even if the name has not yet influenced the Forum's agenda, it may nevertheless lose credibility because of that possibility and gain the reputation of having a pro-business tilt.

Already there is evidence that the Kennedy School deserves such a reputation. The invitation of Chairman Anderson to be one of the Forum's first speakers raises the question of the influence of ARCO's donation. His topic was "OPEC and U.S. Energy Policy." Participants in the sympathetic panel discussion that followed were all business professors.

The Kennedy School maintains this was not a quid pro quo. Jackson said, "Having the view of the private sector is indispensable for public debate of the energy crisis."

THE KENNEDY SCHOOL can educate future government leaders to sympathize with business interests. Lamont University Professor John Dunlop has worked to align the Kennedy School programs with those at the Business School. Last October he told Harvard Gazette, "... we need to work these two areas more together so that each can appreciate the setting, constraints, and personal context in which opposite number operates." Kennedy School Dean Graham T. Allison '62, told his School's Visiting Committee on March 14, 1977, "The natural alliance for a professional school of government should be the business school. We expect that the good relations which presently exist will be substantially improved by the proximity..."

Committee member Bradshaw must have been among Allison's more enthusiastic listeners. The oil executive received his MBA from the Harvard Business School in 1942 and taught there for the next ten years. In fact, two-thirds of the members of the Kennedy School's Visiting and Advisory Committees are corporate executives of partners in corporate law, management or investment firms. This is in spite of official University policy that Visiting Committees comprise persons who "are knowledgeable and experienced in the fields which they are called upon to examine." A Business School organ, happily echoing Allison's speech, said, "Now the two schools are moving closer together, both intellectually and physically..." The ARCO Forum is a symbol of this alliance between the School of Government and the School of Business.

Perhaps the reason the ARCO Forum has provoked no uproar is that at Harvard, such an alliance seems so natural. But it is not too late to begin to change this situation. Students should demand that the Kennedy School disavow this alliance and the political bias it represents. The School should heed the Biblical dictum, "A good name is rather to be chosen than great riches," by returning the money and renouncing ARCO's name in order to restore its own.

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