National Affairs: The Money Man

In a column about horse races, the New York Herald Tribune’s Red Smith last week wrote: “Mr. Joe E. Lewis, who says comical things in nightclubs and bets on them at race tracks, is the author of a profound observation made after years of first-hand study. ‘I have been rich and I have been poor,’ Mr. Lewis says, ‘and believe me, rich is better.’ There are various ways of getting rich without help from the Federal Housing Administration.”

By now, obviously, the FHA scandals have become part of nightclub repertories, Red Smith’s column and American folk lore generally. (The tabloids had fun with the story of Ian Woodner, a Washington builder who charged to FHA projects $87,000 for detectives—partly to check up on his ex-wife.) Until last week, however, nobody knew much about the central character: Clyde L. (for Lilbon) Powell, 58, who joined FHA under the Democrats in 1934 and was forced out last spring. From 1946 to 1950, as assistant commissioner, he authorized projects that netted some $500 million in unwarranted windfall profits.

Powell, who looks like Santa Claus with a shave, twice refused to testify before Senator Homer Capehart’s Banking Committee. Last week, called up again, he refused again—to avoid incriminating himself. But other witnesses were more obliging.

Easy Come. An officer of the Riggs National Bank, where Powell kept an account and a safe-deposit box, testified that from 1945 through 1953 Powell deposited $218,630—nearly three times as much as his total federal salary, which he listed as his only income on his tax returns.

Nathan Manilow, developer of Chicago’s $30 million Park Forest project, indicated where Powell’s extra money came from. One source, it turned out, was Manilow himself. In March 1948 Manilow lent Powell $7,500. Soon afterwards Powell authorized Park Forest to collect two months’ advance rent from tenants.

Outright bribery was reported by Albert Cassel, an architect who had asked Powell for a $709,000 added mortgage on a Washington apartment project. “Mr. Powell told me the amount of work he had done on the thing,” said Cassel, “how he helped the project to survive from the very beginning, and before this thing would be finally approved by him we would have to give him $10,000.”

Did he pay up? Yes, said Cassel; he gave Powell $10,000 in three installments, and right away the $709,000 increase was approved.

Easy Go. Powell’s pressing need for money was explained, in part, by a Damon Runyonesque witness: Wardwell Dexter, onetime bookie commission man, whose yellow, shortsleeved shirt brightened the somber Senate caucus room. Dexter related that Powell made racing bets by phone almost every day, averaging $100 or more daily for a time. Sometimes he did not pay the losses. One day he bet $1,500, and lost. “What was your relationship with Clyde Powell?” he was asked. “Unfortunate,” replied Dexter, summing it all up.

A sad episode was related by William Taylor Johnson of Virginia Beach, Va., a contractor who built five Powell-approved projects. In August 1950, he said, Powell came from Washington and went to the nearby Dunes Club to gamble. “He had quite a few drinks” and lost heavily, Johnson said. At dawn they returned to Johnson’s home but were followed by the Dunes Club operators, who demanded $3,000 to cover Powell’s losses at dice. Johnson related that he gave Powell money to pay off the gamblers.

“You handed Clyde Powell $3,000 in cash [and] you never saw the $3,000 again?” he was asked. “That’s right,” said the contractor morosely. Powell listened with wide-eyed interest and said nothing.