The Nation: The Kingdom and its Power

To many of his hired managers, the supremely powerful man whom they never saw was “The Shareholder.” As such, Howard Hughes controlled everything through Summa Corp., headquartered in Las Vegas, and the Howard Hughes Medical Institute in Miami. Occasionally, the corpulent assets of the two organizations bump into each other, revealing the complex relationships. The institute, of which Hughes was sole trustee, owns all of Hughes Aircraft Co., the huge defense contractor (more than $1.4 billion worth last year). Hughes Aircraft, in turn, owns half of Theta Cable, a cable TV system in Los Angeles. The other half is owned by Teleprompter Corp., a non-Hughes company, and about 5% of Teleprompter’s stock is owned by Summa.

Of the two major Hughes entities, Summa is the most varied. Housed in a heavily guarded building near the Las Vegas strip, it owns most of the Hughes properties and has an estimated $200 million in cash and negotiable securities.

Of Summa’s four operating divisions, the most glittering is the recreational group. It supervises the hotels and casinos in Las Vegas, Reno and the Bahamas. Summa’s communications group supervises KLAS-TV and the Hughes Television Network Inc., which connects stations across the country for special programs. (Coming up: a two-hour Bicentennial extravaganza.)

The transportation group owns Hughes Helicopters Div., the big manufacturer of military choppers. It controls Hughes Airwest, the regional airline, through still another outfit, the Hughes Air Corp. The group runs Hughes Aviation Services Div., which services and repairs planes and provides terminal facilities for charter aircraft at Las Vegas’ McCarran International Airport.

A fourth group is concerned chiefly with land management.

It controls about 1,200 mines in Nevada and runs the Husite operation that owns about 30,000 acres of undeveloped desert near Las Vegas. Hughes bought most of the land during the Korean War as a possible site for relocation of defense plants. Total investment in the Nevada mining operations has been about $18 million, and return is described as inadequate. There is also an architectural engineering firm called Archisysterns.

The Howard Hughes Medical Institute, funded entirely by dividends from Hughes Aircraft, disburses about $1 million annually to medical experts. The institute, whose work is highly regarded, has a staff of more than 100 scientists and technicians working for it in its quarters near the University of Miami School of Medicine.

Unlike private foundations, the institute does not give grants.

Instead, it employs “medical investigators” in various places, paying them out of income received from Hughes Aircraft. The Government has been in a running battle with the institute over its status as a tax-free trust because it is so closely tied to Hughes Aircraft and gives out relatively little of its wealth. So far, all of the challenges to the institute’s tax-free status have failed.