In 1931 Henry Kaiser was shown to be a big part of a terrible segment of California, Nevada and Arizona history. He certainly learned how to spread the liability and avoid responsibility in 1931.
The culture of corruption was profitable from the beginning for all of the Kaiser companies. They all were founded by a man, that while he may have been a personable guy, was still a jack of all trades. He came from the turn of the last century, where you had to think quick if you wanted to get ahead and did not want to bother with getting an education. He was primarily a road builder for the federal government working in the states of Oregon, Washington and later California rural areas. He had a number of other minor occupations before his road building business began. He had simply learned after the first federal contract that government funded jobs were the most lucrative.
The government always guaranteed payment to their contractors and so far at least has not declared any bankruptcies.
After the disaster in the Imperial Valley with the diversion of the Colorado River for irrigation purposes, flooding the region which led to the permanent creation of the Salton Sea, the Federal Government decided that there was a great need to find a more permanent way to irrigate the most southern portion of California. This was during the Great Depression and thousands of men no longer had jobs nor could they provide for their families.
The President at that time, Herbert Hoover was presented with a plan to build what we originally called Boulder Dam. It was later renamed Hoover Dam. This project brought many, many men and their families to the Nevada and Arizona area so that they could be employed on the Federally Funded project during the Great Depression.
Henry Kaiser was one of the major contractors on the Boulder Dam project and also was the primary Federal lobbyist for an organization created with the intent to spread the liability.
It was named “Six Companies” because there were six companies involved in forming this corporation. Kaiser was the smallest of all of the companies but Henry Kaiser was the slickest and the one with the biggest ideas when it came to self promotion. They put in their bid for the project and they got it.
From the beginning it was run as a shoddy deal. Corners were cut so deeply that lives were routinely lost. Henry Kaiser came to town and kicked out the Boulder City doctor, replacing the area doctor with a cousin of his.
The project cost many, many men their lives. In return for hard, honest work, many men’s families were left out in the cold because of the same shifty business practices that today are still being employed with not honoring guaranteed contracts with employees, patients and vendors.
A string of serious incidents began:
In 1931 and 1932 numerous men suffered carbon monoxide poisoning while working in the tunnels. The “Six Companies” attempted to ban state government inspectors. If they were allowed in the inspectors would have seen that gas powered engines were depleting the air. A great number of these men’s deaths were written off by the company doctors as pneumonia. The majority of those that survived the gas poisonings were left with permanently impaired health and were unable to ever work again.
A Las Vegas, plaintiff’s attorney, Henry F. Austin, on behalf of the injured Six Companies employees filed suit. The rest sounds like something out of an organized crime movie. The Plaintiff’s were each seeking approximately $50,000.00 in personal damages and $25,000 in punitive damages.
The gas problem was not a new one to “Six Companies.” Since 1931, the beginning of the project, they had been plagued with this problem. They didn’t seek to find correction for it. They were more concerned with coming in under budget.
The newspapers had been publishing this information from the beginning and denouncing the corporation – Kaiser and his friends kept trying to cover it up. That is well documented in Clark County, Las Vegas Nevada, Court Records.
The doctor who headed “Six Companies” in Boulder City was openly accused of intentionally diagnosing flu with complications of pneumonia. Those accusations were never solidly proven and in any event at that time there was no accountability for such actions involving this particular project.
The state of Nevada ordered “Six Companies” to obey state mining safety laws which forbade the use of gasoline powered vehicles underground. “Six Companies” in return, with the assistance of U.S. attorneys and a three judge federal panel over ruled the state of Nevada.
At this point Austin’s filing against “Six Companies” put them in jeopardy. All the focus was now on these public suits. If “Six Companies” lost then there might be a flood of future law suits. If they lost the lawsuits then their credibility would be challenged. They might lose any or all future government contracts. They knew that something had to be done.
“A black hole as wide and as dark as one of the diversion-tunnels portals, yawned before the contractors.” (Hoover Dam – page 206-7 ‘A Callous , Cruel Lump of Concrete’.)
“At a Six Companies board of directors meeting in San Francisco on December 16, 1932, the question of the gas cases and how to deal with them was discussed with attorney Paul Marrin of the San Francisco Law Firm – Thelen and Marrin.”
This is the same law firm that Kaiser still employs.
They decided to reject all out of court negotiation and decided to fight the suits aggressively.
“Just how aggressively became apparent during the spring and summer of 1933 when a strange and faintly sinister series of events culminated in the most sensational trial the city of Las Vegas had every seen.” (Hoover Dam – Page 207)
In March 1933, Bud Bodell was appointed as the chief investigator for Six Companies. His orders were to dig into the backgrounds of the gas case plaintiffs and spy on their current activities. In doing so they hoped that he would gather evidence that would contradict their claims of disability. In May of 1933 “Six Companies” was rewarded well when Bodell presented information on former truck driver Ed F. Kraus, one of the Plaintiffs, showing that in the state of Utah he had a police record for grand theft and receiving stolen property. He also claimed that Ed had been seen drinking and dancing in Las Vegas night clubs since he first filed suit in March. Ed Kraus apparently had made a mockery of his medical claims by his wild nights of partying on Fremont Street, in Law Vegas according to “Six Companies.”
That wasn’t enough for “Six Companies” though. The “Six Companies” legal team and investigators decided to make this the test case for all. Their intention was to degrade him and in doing so insinuate that all the other severely injured employees were not truthful. Their very open intent was to force Austin, the Plaintiff attorney to drop all the suits.
To achieve this end Bud Bodell hired a known thug, John Moretti. John was ordered to seek out and befriend Kraus to involve him in as many drinking bouts and sexual liaisons as possible to discredit Kraus’ claims. Moretti was then ordered to involve Ed Kraus in criminal activities.
Moretti posed as a two bit crook, went under cover and located Kraus in Salt Lake City where he was then visiting friends in June of 1933. Three months later the Las Vegas Evening Review-Journal headlined – “Holdup Reveals Dangerous Racket.” The story states that “Six Companies” Chief Investigator Bud Bodell with the assistance of Moretti had helped apprehended E.F. Kraus along with two other men and that they had been arrested for assaulting and robbing an old miner, Jack McEachern.
Less than 48 hours later, Judge William Orr announced that Kraus suit against Six Companies would be the first to go to trial even though several other identical cases had been filed months before his. Orr set the civil trial for October 16, two weeks after the criminal one began.
Austin refused to back down even though it had become obvious to all, including the press that “Six Companies” was flexing it’s muscles with local government. Austin did manage to get the criminal trial postponed while he continued to prepare for the gas injury trial.
When it came time for trial, as today, it was the usual insinuations that something else could have caused the medical problems, that a number of other things could have contributed to his serious medical problems which did result in his hospitalization for two weeks. Kraus was accused of turning away “Six Companies” doctors that wanted to examine, perform a spinal tap, and a number of other tests two weeks before the trial. In court Kraus’ sexual activities and his involvement with Moretti was brought up. Austin attempted to separate the two trials but the “Six Companies” attorneys continued on with what has become a decades old pattern.
When the “Six Companies” attorney began to present his case the court took on a circus like atmosphere. “Six Companies” painted a theatrical picture of Mr. Kraus and his alleged sexual exploits in Las Vegas. Moretti also provided testimony that Kraus had stated he “could look pretty sick for $76,000 dollars.” Mr. Kraus also testified regarding intimate matters to the embarrassment of both the court and the gallery.
Worker after worker was brought in to testify that the gas was bad in the tunnels and that sometimes was so thick that the lights were dim.
Moretti brought in the Lopez sisters Mary and Betty from Los Angeles that spoke about how Agent Moretti had brought them to Kraus for a special party and told of his sexual performance. This was important because they were attempting to discredit his medical condition.
The next week during the criminal trial against Kraus the bad light was focused on “Six Companies.” Moretti was accused of being behind the assault and robbery and it was brought out that the victim was a very old friend of Moretti’s boss Bud Bodell. It was also suggested that “Six Companies” had this done to discredit Kraus with his medical case against them.
The jury agreed with Kraus’ attorney and he was found not to be guilty. Austin had made an error on taking on a client with a bad background but the jurors still believed the story.
The next case came up in 1935 and the Plaintiff was more mature and had a stable background. He had previously worked for “Six Companies” in a position of responsibility and clearly showed the effects of wasting from the gas poisoning.
During this trial the “Six Companies” Assistant Superintendent of Construction, Woody Williams while having a few drinks in the vicinity of Austin in the bar of the Apache Hotel blurted out that “Six Companies” had at least three jurors that they were sure of and perhaps four or five. He went on to state that Austin didn’t stand a chance.
Austin went to find his co-counsel Clifton Hildebrand that had a similar disturbing story to share as well. James Begley, one of Bodell’s subordinates was also drinking that afternoon and bragged that they had an unlimited budget, had been working day and night and “knew how to fix juries.” He boasted that he and Bodell had been working day and night and that “Six Companies” would owe the loss of Austin’s then suit to them. Begley went on to say that he knew of five jurors that were in “Six Companies” pocket. Hildebrand expressed his disgust to Begley. Begley stated that if given chance he knew that Hildebrand would have done the same thing.
The case was lost, 9 to 3 and Austin and Hildebrand launched an investigation into the alleged jury tampering. Nine affidavits were filed, including statements from members of the jury selection panel that it was fixed. One of the jurors stated that “Six Companies” had paid one juror $5,000 while two others did not receive more than $500. The man reporting this stated that he had been offered $1,000. When questioned if this person would state this same information in a public setting he stated that if he did that “somebody will shoot me in the guts.”
Judge Orr, the original Judge for Kraus brushed off the accusations, sworn testimony and whatever else they had for proof and refused to do anything. Austin filed six more cases.
Six Companies realized that Austin was a man of integrity and realized that they had to change tactics.
On August 6, 1935 the Las Vegas Review-Journal reported that 48 cases had then been filed against “Six Companies” for a total of $4.8 million in Nevada Courts. With the number of cases growing swiftly and the Boulder Dam project winding down “Six Companies” called off Bud Bodell and began negotiating.
Kaiser and “Six Companies” knew that gasoline powered engines in tunnels was a violation of mining code, they also knew that it made people seriously ill. Remember “Six Companies” was created to spread liability. What they did with endangering so many lives and holding life so cheaply was to protect a $300,000 investment in gasoline powered trucks and to avoid a costly investment in a legal and safer system of electric motors.
When the bill for this resulted in a lengthy list of casualties and at least half a hundred law suits, “Six Companies” tried to hide and evade responsibility for their actions.
“This unnecessary and easily preventable disaster, was caused by corner-cutting and exacerbated by selfish concern for corporate image.” (Hoover Dam, Page 214)