Books: Musical Flags

THE SOVEREIGN STATE OF ITT

by ANTHONY SAMPSON

323 pages. Stein & Day. $10.

The beginning of World War II found the company in a peculiar position. Its communications systems were supplying information to German submarines, and its American factories were assembling "Huff-Duff," the High Frequency Direction Finder used by the Allies to save their ships from German torpedoes. This is not one of Milo Minderbinder's fast-buck schemes from Catch-22. It is, in fact, a part of the corporate record of ITT, the American-based telecommunications conglomerate with worldwide interests as diversified as smoked meats and rental cars.

To be sure, ITT's German equipment was under Nazi control, though, as Anthony Sampson argues, the company tried to conduct business as usual for as long as possible. In Sampson's view, ITT is not merely a multinational giant but a state within states, a moral chameleon that will do business with any complaisant regime and try to prevent the election of politicians who threaten the corporate interests.

Last year ITT's power and presumptuousness came to light with disclosures that it stood ready to underwrite with cash any efforts the CIA might be considering to prevent the election of Salvador Allende, Chile's Marxist President. At home—if such a cozy term can be used for a multinational—ITT provided an early trickle to the Watergate. ITT Lobbyist Dita Beard's secret memo found its way into Jack Anderson's column, where it told of a $400,000 pledge for the 1972 Republican Convention. All this occurred shortly before the Justice Department settled an antitrust action against ITT.

International Telephone and Telegraph Corp. was founded in 1920 by Sosthenes Behn, who was born of Franco-Danish parents in the Virgin Islands and was educated in Corsica and Paris. With such a background, it is not difficult to see how Behn's buccaneering character developed. Starting out as a sugar broker, he got into telecommunications almost by accident. He and his brother Hernand bought a small, foundering telephone company in Puerto Rico. The brothers soon acquired another phone system in Cuba, moved on into Spain, and bought the international holdings of Western Electric. By the mid-'20s the young empire was known as I T & T—a name chosen to confuse its rickety little venture with the mighty AT&T. When Hernand died in 1933, Sosthenes became the undisputed master, "the Prince of Telephones" as he came to be known. At his New York headquarters, he worked in a Louis XIV salon with a portrait of Pius XI on the wall. Haute cuisine for 200 in the private dining room was not uncommon.