And then in the midst of all this, something terrible happened. I had a Toolco lawyer named Ray Cook handling certain things for me, doing in part the sort of job that Noah did before I fired him. Cook decided that the way I was dealing with the TWA situation was proof that I was losing my mind. Behind my back, he contacted Noah Dietrich. Noah, to give him credit, just laughed. He’d heard this phrase many times before, relative to me, from people who didn’t understand how I operated. But in this instance Cook happened to be serious. He wanted to start legal proceedings against me, on behalf of all the Toolco management and employees, to prove that I was incompetent.
Not just incompetent to manage Toolco and TWA – I’m talking about incompetent in the full and legal sense of the word. He wanted to have a guardian appointed to take care of my financial holdings while he milked me dry. He alleged, among other things, that in the midst of the most delicate and vital negotiations for control of TWA, I had taken three days off to organize a posse for a missing cat. That may have been true, but so what? I was just acting like a decent human being and that meant I was crazy.
Cook managed to bring Verne Mason, my doctor, into the picture. Verne Mason, who had been my personal physician for forty years, and was the head of my medical foundation, was going to help certify me as a loony and come to court and give all sorts of testimony about the crazy things I had done and my addiction to codeine as a painkiller. They wanted to take everything I had and put me in a straitjacket, lock me up in a closet. I’d scratch at the closet door like one of those poor people who are shut away in attics in the Ozark Mountains. It gives me the shakes just to think about it.
How did you find out?
A loyal employee in Houston tipped me off, and then I got some more information from people around Cook and Mason, and sure enough, those people came up with a copy of a secret memo from Cook to Mason that revealed everything – it was a list of people who would testify to my insanity and a list of psychiatrists who would offer affidavits, and also the names of some hospitals they were considering for me.
How did you stop them?
I had Ray Cook fly out to California and meet with me on the Santa Monica pier. I said, ‘I know what you’ve been doing, you double-dealing son of a bitch. You want to have me put away.’
He turned white as chalk and he denied it, but finally he saw that I knew what I was talking about. ‘Well, Howard,’ he said, ‘it would have been for your own good.’ He knew already he was fired, he had nothing to lose by telling the truth then, and he tried to tell me it would have been for my own good. ‘And you would have gotten well again. And when you were well you could have come back and taken over.’
I grabbed him by the collar and almost shoved him off the pier into the Pacific Ocean. But I restrained myself in the nick of time. That might have given them just the evidence they wanted.
Firing Cook right in the middle of the negotiations put me in a terrible plight. I saw everything that I’d worked for all my life about to slip out from under my fingers like an ice cube. My back was to the wall, and the entire Eastern banking establishment – that’s a lot of muscle – had hold of the carpet and was trying to yank it out from under me. I didn’t see how I could hold out, how I could win. My strength was giving out.
I got Greg Bautzer, a Hollywood lawyer, to take Cook’s place. I sent Bautzer to New York to Merrill Lynch. Dillon Read was handling things but I thought I might get a better deal from Merrill Lynch. But everybody construed this the wrong way and thought I couldn’t make up my mind and was stalling. Of course I was stalling, but my mind was made up. I had to get the money, and I’d do anything to get it, short of giving up Toolco and Hughes Aircraft.
Merrill Lynch wouldn’t play ball and we went crawling back to Dillon Read. By then they’d come up with the final touches on that famous, or should I say, infamous, trustee agreement, which I consider the most unfair thing that’s ever been done publicly to an American businessman of high repute and good financial standing. Shameless. But par for the course, the way they operated.
The idea was that three men would have control over my stock in TWA. Toolco could appoint one of them, and this consortium of banks and insurance companies would appoint the other two. This was a ten-year trusteeship agreement. At the end of the ten years I was supposed to get it all back. So they said. They appointed their trustees. One was Ernest Breech of Ford and the other was Arnold Oldman, former Chairman of U.S. Steel.
Now is this a horror story or isn’t it? Lon Chaney never starred in anything to match this one. ‘Howard Hughes, who brought you Hell’s Angels, The Front Page, The Outlaw, Toolco Versus the Relatives, and Hercules Versus the Dragon from the State of Maine, proudly presents: Trans World Airlines Versus the Wolves of Wall Street. The plot: a simple Texas boy turned pilot, financier and medical benefactor, loses his head, and from his secret laboratory in the mountains high above Los Angeles inadvertently looses upon the unsuspecting world a monster of his own creation. Is it a man? Is it a bird? No! It’s TWA! But all is not lost. The heroes –Prudential, Irving Trust, and First National Bank of Boston – charge to the rescue to protect the American public from this raving monster. Battling singlehandedly against tremendous odds, with only $20 trillion in assets and a ragtag army of 7,500 lawyers to help them, they vow to achieve a just solution.’
That’s the script they tried to play. I was desperate. And I felt I had to have a man on the inside to know what those guys were really up to. I had to sign by the last day of 1960. I stalled as much as I could until I could find someone who I knew was going to be on that board, someone I could trust, so I could get access to the private meetings of the board.
Greg Bautzer had power-of-attorney for me to sign and I had to get him to pretend he was sick. He was staying at the Hampshire House in New York and just before the signing I said, ‘Greg, tell them you’re dying. And if they don’t believe you, if you feel that there’s the slightest doubt on their part, check into some hospital.’
He claimed he had stomach ulcers and back pains. You can never diagnose back pains. He went into Roosevelt hospital.
Why did you have him delay in this way?
Because I was still trying to get to one of those trustee guys. I would never have agreed to the whole arrangement if I didn’t feel that I’d know what they were going to be doing behind my back. I thought of Breech at first, because I’d known Ernie Breech for years. When I came back from my trip around the world there was some dinner in New York and Breech was the toastmaster and I remembered he had been very friendly to me.
I checked out his financial position and my men reported to me on his personal and family life, and I realized there was no leverage. I needed leverage.
That left Arnold Oldman. He was vulnerable, in his bank account. I don’t mean to say he was a poor man, but for reasons of his own, which I won’t go into, he needed money. There are only two things in the long run which will appeal to a man in a situation like this – one is money, and the other is the satisfaction of any perverse desires he may secretly harbor. As far as I was able to find out, Oldman was not a secret pervert. And in any case that’s not my style. I won’t stoop to that. But everybody needs a little extra cash, and if it’s tax-free and out of the country, so much the better. Oldman was no exception. So we had a little talk.
Face to face?