Public Interest Briefs

Officers of more than a dozen major U.S. corporations played major roles in the Watergates scandal when they illegally contributed millions of dollars to President Nixon’s 1972 re-election campaign.

Although the national focus of the Watergate investigations has zoomed in on the illegal actions of high government officials, corporate “dirty trick” practices have not gone unnoticed at the Center.

Center staff attorneys filed suit May 24th against the Northrop Corporation, a large U.S. government defense contractor, alleging the Corporation had deceived its shareholders about an illegal $150,000 Northrop contribution to the Nixon re-election campaign.

The suit, Springer v. Jones, was brought on behalf of Jay A. Springer, a shareholder, and other shareholders. The case alleges Northrop Chief Executive Officer T.V. Jones; another officer, James Allen; and the Corporation itself committed fraud, deceit, theft, looting and breach of fiduciary duty when the $150,000 in corporate funds was given to the President’s campaign.

The suit alleges the guilt officers unfurled a coverup of their activities when they issued misleading proxy materials and false documents and lied to a federal grand jury investigating illegal campaign contributions.

The Center’s case closely follows federal criminal convictions obtained against Jones, Allen and the Corporation because of its loss of reputation, and other grievances. Also, the case lacks removal of the guilty directors. Finally, the lawsuit seeks full disclosure of the illegal actions in a proxy statement, due to be issued to the Corporation’s stockholders.

Depositions in the case are now ongoing. No trial date, however, has yet been set.

The decision to undertake this case was based on a belief the lawsuit contains many pressing public-interest issues, including the upholding of our democratic electoral process and maintenance of corporate responsibility.

While the Springer case represents a challenge to a profit-making corporation’s abuse of the political and electoral process, another case in which the Center has participated, Braude v. Havenner, tackled electoral abuses by a non-profit making corporation: The Automobile Club of Southern California.

In Braude, brought on behalf of Los Angeles City Councilman Marvin Braude, the State Court of Appeal recently ruled the Automobile Club must reform its method of soliciting proxies to include adequate provisions for minority points of view to have access to the corporation’s proxy machinery.

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