Both Sides of the Aisle

Gadsby & Hannah Goes Bi-partisan

It became apparent by the mid-sixties that Gadsby, Hannah, Colson & Morin was “too Republican.” Several of their clients, including Grumman’s Lew Evans, told them they should get a high-profile Democrat in the firm. It turned out that, at that very moment, Lynch’s pal Dick McGuire was looking for a place to hang his hat – if he were to join, he would add the Democratic powerhouse to the firm. Dan Lynch brought Dick into the office, and they chatted for a long while. Colson had done a good deal of work with McGuire while representing the New England Council. McGuire was very close to the entire Democratic leadership, especially Tip O’Neill, who was then chairman of the House Rules Committee. Due in large part to Lynch’s relationship with McGuire, he was eager to join the firm, but he said he wanted to bring in a lawyer from New Orleans named Merrigan with him. How could they say no?

Morin and Colson reviewed the scenario over a few drinks. Now how would they name the firm? Merrigan wanted his name in it, McGuire too. They came to a practical solution. They were running the firm – who cared what the name of the firm was? So they agreed – they both dropped their names, and the firm became Gadsby, McGuire, Hannah, and Merrigan. Befitting their new powerhouse image, they moved into penthouse offices at 1700 Pennsylvania Avenue, perhaps the most prestigious address in the District, looking out at the White House next door.

In 1968, Florida Senator George Smathers retired from the U. S. Senate. Smathers was elected in 1950 after Harry Truman recruited him to run against Claude Pepper, who had been part of a cabal that attempted to dump Truman from the 1948 ticket. He beat incumbent Pepper soundly, but the race is most famous for a speech Smathers apparently never gave. Smathers was alleged to have given a speech in rural Florida that went something like, “Are you aware that Claude Pepper is known all over Washington as a shameless extrovert? Not only that, but this man is reliably reported to practice nepotism with his sister-in-law, and he has a sister who was once a thespian in wicked New York. Worst of all, it is an established fact that Mr. Pepper before his marriage habitually practiced celibacy.” No one could prove that he ever said these things, but it has become part of political lore.

Smathers was a friend of Merrigan, and landed at 1700, where business was rolling along stronger than ever.

But not all was fine in the penthouse. Merrigan and Colson did not get along at all. Merrigan was very high-strung and had a ferocious, uncontrollable temper – a brilliant lawyer, and a New Orleans gentleman, except when he got mad. Colson couldn’t resist goading him, and eventually Merrigan had had enough of Colson and left.

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The Mutual Fund Business Explodes

By 1967, due in large part to Morin’s reputation, the firm had been retained to represent the ten largest mutual fund organizations in the country (Keystone, the United Fund, Fidelity, Mass Investors Trust, to name a few) against the SEC’s attacks. The SEC’s offensive, and Morin’s defense of the industry, would eventually culminate in the passage of Investment Company Amendments Act of 1970.

At the same time, there was a ferocious battle going on between the banks and the mutual funds. Banks wanted the rules of their common trust funds relaxed so they could take fees from them and still be exempt from registration with the SEC (giving them a competitive advantage over the mutual funds). One of their most important allies was James Saxon, who was Comptroller of the Currency at the time. Saxon’s top priority as Comptroller was to expand the national banking industry and to liberate national banks from regulation he determined to be unduly burdensome, putting them in direct competition with the mutual funds. During his first year in office, Saxon approved 434 new bank charters, compared to the 237 charters issued in the previous decade.

Five years earlier in February 1962, Saxon had appointed an Advisory Committee of 24 bankers and lawyers to review the findings of a survey conducted with national banks. The committee published its findings the following September in a volume entitled National Banks and the Future. With these recommendations as a foundation, Saxon permitted national banks to engage in businesses they had previously been denied entry to, including the sale of insurance, revenue bond underwriting, and the issuance of credit cards.

These developments exacerbated the disputes between the two industries, to the point where the Investment Company Institute (then called the National Association of Investment Companies) brought a lawsuit against Citibank and the other major national banks to enjoin them from conducting these forms of business. It was a very, very bitter fight between mutual funds and national banks, with billions of dollars at stake.

Saxon was one of Dick McGuire’s cronies in the government. In 1967, he was preparing to leave the Comptroller’s office and enter private business.

Morin received a call one day from Wilfred Godfrey, the chairman of the Keystone Funds. Godfrey, a hard-nosed, crisp Welshman and CPA by training, was calling from Paris.

“Mr. Morin?”

“Yes, sir.”

“Say it isn’t so.”

“What isn’t so?”

“I’m reading in the Herald-Tribune here in Paris that Jim Saxon has become a member of your firm.”

Who?

“James Saxon.”

Morin said emphatically, “No way is he a member of this firm, or ever will be.”

“Well I’m pleased to hear you say that, because obviously our relationship is at an end if he becomes involved in your firm.”

And Morin assured him there was no truth to it, and promised him he would find out how the report had come to light.

Morin and Colson went straight to McGuire, who confirmed that, without consulting either Morin or Colson, he had told Saxon, “I’ve got an office for you, you make the announcement.” So Saxon announced to the press that he was joining the firm.

Colson let McGuire know there was no way that Saxon was coming into the firm.

McGuire said, “it’s Saxon or me.”

Colson said, “It’s you then – good luck!”

And McGuire left, joining with Saxon in a venture that failed in short order.

With McGuire and Merrigan gone, Colson and Morin were once again faced with the name change issue, which they resolved once and for all. The firm would simply be called Gadsby & Hannah, no matter who came or left. And that is the way it remained, even decades after both Morin and Colson had left, until the firm merged with McCarter & English in 2006.

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The First Big Whale

In 1962, NASA solicited eleven firms to bid on the design and construction of the Lunar Excursion Module (LEM) – a vehicle that would be capable of making a landing on the moon. While the invitation went to eleven firms, there were two major competitors. One was Martin-Marietta from Georgia, and the other was Grumman Aircraft Engineering, which had been responsible for building most of the military’s fighter aircraft – Wildcats, Hellcats, Tigercats Bearcats and others.

Clearly, Grumman was the better candidate, and they felt they had submitted a far superior bid. But Martin-Marietta was based in Georgia, and the chairman of the Senate Armed Services Committee (succeeding Saltonstall, in fact) was Richard Russell, an enormously powerful man with a reputation as an autocrat. He was going to see that the award went to Martin-Marietta. Fortuitously, the general counsel of Grumman was Colson’s former Navy boss, Llewelyn Evans, and when Evans saw the bind his company was in, he called Colson.

Evans told Colson, “I have a big problem –we’ve been working on the LEM project for years, we’re by far the best bid, and we’re going to get buried by Russell. I’ve got to get in to see Dick McGuire[1]– can you help me?”

So there were Colson and Morin, two Republicans from Boston representing Grumman in a street fight against an autocratic southern Democrat and his hometown boys, and looking to the Boston Latin Mafia for their silver bullet.

Colson called Dan Lynch at Saltonstall’s office and told him the problem; Lynch invited Colson to bring his clients in, and soon, Evans and his Grumman team spent an hour in Saltonstall’s Senate office educating Lynch about LEM. When Lynch was through learning, he called Dick McGuire, his childhood pal, and asked him to see Evans, and of course, Dick said, “Anytime Danny, bring him right up!” Evans had been trying for a year to get an appointment with McGuire, and there he was five minutes later, sitting in McGuire’s outer office with Dan Lynch after one phone call. Soon, McGuire came out.

“Danny boy, HOWAHYAAHH!!! My Gawd it’s great to see ya,” he said in the archetypal Boston dialect.

Lynch returned McGuire’s hug and tried to introduce him to Evans, but McGuire cut him off – “we’ll get to that in a few minutes – Danny, come on in, I want to talk to you,” and McGuire took Dan Lynch into his office and left Evans in the waiting room alone.

In his office, Maguire said, “Danny, let him sit for a while, let him know how important you are. What can I do for you?” Lynch explained why they were there, and the two of them mapped out a game plan; and then McGuire allowed Lew Evans to join them. He explained to Evans that because of Grumman’s advocacy (i.e., Colson), he would interceded with Senator Russell, provided that certain political contributions were made to certain people.

The contract was awarded to Grumman, and in July of 1969, LEM landed on the moon and Grumman was permanently on the map.

Grumman was an appreciative and loyal client, retaining Colson & Morin annually for years to come; and as a result of their early success with Grumman, Colson & Morin signed on Harrington & Richardson Arms (later H&R Firearms), a Worcester company that was then the biggest rifle manufacturer in the world (they made the M-1 and M-14 rifles for the U. S. Military), and a number of other regional clients.

It couldn’t have happened too soon. Colson and Morin didn’t have a lot of money to establish their firm; and both had growing families and now a double office overhead. Colson borrowed $3,000, and they rented all of their office furnishings, right down to the carpeting (a relatively new scheme introduced to them by Bob Zeltzer, whom they had assisted in the creation of his new business, “Offices Unlimited”).

[1] McGuire was then the treasurer of the Democratic National Committee and one of Kennedy’s people.