Heraclitus, Greek Poet and Philosopher, 6th Century B.C.

An Open Letter to Hank Paulson

You got it right. Integrity is both “bedrock” and “cornerstone.”

By Egil (Bud) Krogh

October 2006

Warmest congratulations to you on your appointment as Secretary of the Treasury. As one of those who knew you and respected your remarkable talents back when we were young staffers together on President Nixon's Domestic Council staff, I was delighted with the news. Your career at Goldman Sachs following your early days in government is proof of the extraordinary promise you demonstrated as a young man. While many people are very pleased with President Bush's wisdom in nominating you, my enthusiasm is due to your clear understanding of how central integrity will be to your success.

In the wake of the Enron collapse, your speech to the National Press Club on June 5, 2002 , constituted a canon for corporate conscience. Entitled “Restoring Investor Confidence: An Agenda for Change,” the speech should be required reading for all seeking to cure the wounds of business misconduct. You used the word “integrity” nine times in your speech. Your observation that “integrity is the cornerstone, if not the bedrock, upon which all financial markets are based” is fundamental not only to restoring trust in our business system but also to maintaining trust in government at all levels.

The past few years have sharpened my focus on integrity as well. I have searched my memories and my soul to understand how I could have concluded, on the basis of national security, that government force should be deployed to break into the office of Dr. Lewis Fielding, who at that time was serving as Dr. Daniel Ellsberg's psychiatrist. You might recall that this crime, a precursor to Watergate in 1972, was committed by a small group known as the White House “Plumbers.” We were tasked by the President to find out why the Pentagon Papers, (which contained a history of the Vietnam War and carried the dubious classification of “Top Secret”) were leaked to the New York Times, and, we were informed by the Central Intelligence Agency, provided to the Soviet Embassy beforehand. We wanted to know who besides Dr. Ellsberg might be responsible for these leaks, Dr. Ellsberg's mental state at the time he released the Pentagon Papers, and the likelihood that he would leak more classified information. We were also looking for information that we could use to discredit Dr. Ellsberg - especially anything that would link him with the USSR .

After years of reflection, I now know that my recommendation to carry out this operation constituted a massive breakdown in integrity. I believe this breakdown contributed in some direct measure to the ending of the Nixon Administration. The “Plumbers” were operating, sometimes willfully and at other times unknowingly, outside what I've come to call the “Integrity Zone.”

The “Integrity Zone” is a safe harbor from which to chart a course to function safely and effectively. The course depends on the ability to answer these three questions affirmatively: Is it whole and complete? Is it right? Is it good?

The first question – is it whole and complete? - relates to whether a proposed action or project, whether it be a boat, a building, or a major public policy, can fully accomplish its purpose. Boats and buildings must have watertight and structural integrity or they sink and collapse. One must think through policy options and understand not only their immediate consequences, but second, third, and fourth order consequences as well.

You came to the Nixon staff after Daniel Patrick Moynihan left. He had served Nixon as Counselor to the President and Special Assistant for Urban Affairs. He invited several of the younger staff members to meet regularly with him on Friday afternoons in his basement office in the west wing. These get-togethers were in part a celebration of making it through another week but they also profoundly illuminated matters of high policy and politics. Pat impressed on us with his wit, erudition, and wildly funny Irish charm the critical importance of integrity in all that we did. He urged us constantly to carefully think through the consequences of our recommendations to the President. As you know, Pat lived a life of deep integrity, bringing vision and clarity to the great debates on public policy during his career as Harvard professor, White House aide, Ambassador to the United Nations and India , and seventeen years of service as a Senator from New York .

The White House “Plumbers” unit formed in 1971, a year after Moynihan left the Nixon staff, and our failure to measure up to Pat Moynihan's integrity standards was catastrophic. We never thought through the consequences for the President and the country if our covert action were to be uncovered. More basic, we didn't ask whether the proposed covert action was legal. We didn't try to understand the limits on the Commander-in-Chief's authority under well-established statutes and precedents. We just assumed that as agents of the Commander-in-Chief working on a national security issue, we could exercise his general authority, under some vague notions of prerogative and emergency powers.

The second question of the Integrity Zone – Is it right? – focuses on the moral requirements. When you ask yourself, “Is this the right thing to do?” your answers should align with core values - truth, honesty, fairness, respect, responsibility, fairness, and compassion. This kind of reasoning creates an atmosphere of trust and it is, as you observed in your speech, absolutely fundamental to confidence in business and government. When I wrote my statement to the court before being sentenced to prison in 1974 for my role in the Fielding office break-in, I pointed out to Judge Gesell that not once during the deliberations of the Plumbers did any of us ask the question “Is it right?” We asked all of the pragmatic, expedient questions such as “Who can do this?” and “How do we avoid having it traced to the White House?” and “How much will it cost?” But not once did we ask “Is it right?” We just assumed we were right because the President was pressing for action and we were working on his behalf. As you well know in business as well as government, these kinds of assumptions will not hold up under later scrutiny.

The final Integrity Zone question – “Is it good?” – helps clarify whether the result of an action or idea will benefit others. Government should be, after all, in the business of trying to make things better for its citizens and striving for more perfect outcomes in its policies and programs.

I do not need to tell you that you are entering a whole new ball game by joining the Bush Administration. As a member of Nixon's Domestic Council in 1972 and 1973, you participated in government at the highest level. So you saw up close what can befall those who deviate from the path of integrity.

After being confirmed by the Senate, you received your commission signed by the President appointing you Secretary of the Treasury. The integrity imperative is embedded in the appointment clause in your commission which reads something like, “Reposing special trust in the integrity…of [your name], the President appoints you Secretary of the Treasury.” Your personal integrity is the bulwark that can protect you when the winds of political and ideological expediency – often with level-five hurricane force – engulf the White House, the epicenter of politics in American government.

As you embark on your journey on President Bush's “Ship of State,” you will encounter enormous pressures to get results. You will experience pressure at times to go along unhesitatingly with your colleagues in a collective “group think.” While you must be a team player, at every critical juncture you must stop and ponder the questions, “Is it whole and complete?” “Is it right?” and “Is it good?” If you can answer “yes” to all three questions you will be safely in the Integrity Zone. There will be a higher likelihood that the President and our country will be well served. To paraphrase two famous comments from our former boss, John Ehrlichman, your work will probably “play in Peoria ” and you will avoid being abandoned by your colleagues “to twist slowly, slowly in the wind.”

Bon voyage and good luck.

Egil (Bud) Krogh, a Seattle-based energy lawyer, lectures

on integrity and ethics