President Eisenhower’s Chief of Staff Resigns for Influence Selling Summary

  • Last updated on November 11, 2022

In 1958, U.S. president Dwight D. Eisenhower’s chief of staff, Sherman Adams, faced charges that he had attempted to influence the Securities and Exchange Commission and the Federal Trade Commission on behalf of a textile manufacturer, who had paid some of Adams’s bills and given him expensive gifts. The scandal forced Adams, a former U.S. representative and governor of New Hampshire, to resign.

Summary of Event

Sherman Adams, a popular Republican governor of New Hampshire, helped Dwight D. Eisenhower win the Republican nomination for U.S. president in 1952. For Presidential campaigns, U.S.;Dwight D. Eisenhower[Eisenhower] Presidential campaigns, U.S.;1956 his campaign skills, Eisenhower asked him to serve as chief of staff in 1953, although Adams was never given a specific job title or description. Adams was among the most publicly visible members of the Eisenhower administration and one of the most visible chiefs of staff in modern presidential history. [kw]Eisenhower’s Chief of Staff Resigns for Influence Selling, President (Sept. 22, 1958) Adams, Sherman Eisenhower, Dwight D. [p]Eisenhower, Dwight D.;and Sherman Adams[Adams] Goldfine, Bernard Securities and Exchange Commission Adams, Sherman Eisenhower, Dwight D. [p]Eisenhower, Dwight D.;and Sherman Adams[Adams] Goldfine, Bernard Securities and Exchange Commission [g]United States;Sept. 22, 1958: President Eisenhower’s Chief of Staff Resigns for Influence Selling[01050] [c]Corruption;Sept. 22, 1958: President Eisenhower’s Chief of Staff Resigns for Influence Selling[01050] [c]Government;Sept. 22, 1958: President Eisenhower’s Chief of Staff Resigns for Influence Selling[01050] [c]Politics;Sept. 22, 1958: President Eisenhower’s Chief of Staff Resigns for Influence Selling[01050] [c]Business;Sept. 22, 1958: President Eisenhower’s Chief of Staff Resigns for Influence Selling[01050] Alcorn, Meade

Adams became well known for his colorful character. A terse man with a notorious lack of tact, he did not hold press conferences but, on many occasions, spoke to groups of reporters or presented the administration’s point of view in public forums. In January, 1958, he famously delivered a blistering attack on the Democratic Party, blaming it for the Japanese attack on Pearl Harbor in 1941 and for the loss of the space race with the Soviet Union;and space race[space race] Soviet Union.

Stories abounded about Adams’s supposed influence with Eisenhower. As chief of staff, Adams helped the president by serving as a buffer. He played gatekeeper, determining who and what got access to Eisenhower, as well as coordinating policy making and serving as a spokesperson. In his memoirs, Adams described his routine work as resolving differences between cabinet secretaries and agency heads before a given issue was submitted to Eisenhower.

By including some people while excluding others, chiefs of staff inevitably create ill-feeling on the part of those who feel that their message has been excluded. For his part, Adams acquired the nicknames great stone face and abominable no-man. He apparently relished this gruff, autocratic image, but it did not help him when he came under attack for ethical lapses. Given that hostility to chiefs of staff often arises from within the president’s own party and administration, chiefs of staff who fall from grace are typically with few allies and many intense enemies. Both the Republicans and the Democrats strongly disliked Adams. He essentially had a constituency of one: Eisenhower.

In early June, 1958, a subcommittee of the House Interstate and Foreign Commerce Committee claimed that Adams had allowed a New England industrialist, Bernard Goldfine, to pay some of the chief of staff’s hotel bills in Boston. Goldfine also had given Adams an expensive vicuña coat and an oriental carpet worth $2,400. In return, Adams allegedly lobbied for Goldfine, who was having tax and regulatory problems with the Securities and Exchange Commission (SEC). In his memoirs, Adams explained that he had also given gifts to Goldfine and that the hotel accommodations he used at the Sheraton Plaza in Boston were maintained by Goldfine for the convenience of his friends and business associates. Goldfine often gifted the prominent people of New England with the products of his mills, including vicuña coats. Adams contended that he did not see any strings attached to the gifts.

A Russian immigrant, Goldfine owned textile mills in four New England states, with his base in Lebanon, New Hampshire. As many other textile manufactuers moved out of New England in search of cheaper labor and low-cost power, Goldfine stayed put and paid his employees well. He was well-respected in the region. To further his business interests, Goldfine had wined and dined New England governors, including Adams. The Adams and Goldfine families had spent weekends together.

In 1953, the Federal Trade Commission (FTC) accused Goldfine of mislabeling his textiles. Goldfine took his problem to Adams, who called the chairman of the FTC, Edward F. Howrey. When the mislabeling continued, Adams set up a meeting between Goldfine and Howrey that resulted in the charges being dropped. Adams intervened again, in 1955, when Goldfine faced SEC charges for failing to find annual financial reports for one of his companies. The relationship between Goldfine and Adams raised suspicions.

Adams could have cited Eisenhower’s blanket protection for White House employees against testifying before committees, policy that was enacted in 1954 during the U.S. Army-McCarthy hearings. Instead, Adams faced his accusers. He later stated that he did so because he believed that the congressional committee intended to criticize his conduct as an aide to Eisenhower. Under the circumstances, Adams held that the usual restrictions against testimony by a White House staff member did not apply.

Adams declared in his memoirs that he felt a personal responsibility to make a public disclosure of every bit of information that he knew about the Goldfine case. Accordingly, on June 17, Adams appeared before the committee. He said that Goldfine had been a personal friend for eighteen years but that he knew little about his business dealings. Adams admitted to a lack of prudence with Goldfine, but also insisted that he had placed only one phone call to the SEC, asking the agency to expedite its Goldfine hearings.

Eisenhower also spoke publicly on Adams’s behalf at a news conference during the hearings. The president said that he had accepted gifts from friends that far exceeded the value of items accepted by Adams from Goldfine. Eisenhower also had accepted several yards of vicuña material from Goldfine. Privately, he noted that gift-giving was a worldwide custom and difficult to refuse without giving offense to the donor. Publicly, Eisenhower stated that no one could doubt Adams’s personal integrity and honesty. He described his aide as effective and dedicated.

Nevertheless, Democrats calling for Adams’s resignation were joined by such Republican stalwarts as Barry Goldwater and Bill Knowland. In July, Eisenhower sent Vice President Richard Nixon to advise Adams that he had become a political liability for the upcoming congressional elections. A sweep by Democrats appeared certain, especially in the wake of the crisis surrounding the racial integration of Little Rock High School in Arkansas and the debacle of Sputnik, the first satellite in space and a Soviet Union;and space race[space race] Soviet accomplishment. Adams refused to resign.

By early September, the demands for Adams to resign had become irresistible. Still, Eisenhower, loyal to the person who had served him well, hated to let his chief of staff go. Meade Alcorn, chairman of the Republican National Committee, forced Eisenhower’s hand by advising him that the Adams scandal made it difficult to raise money. Eisenhower asked Alcorn to join with Nixon in speaking to Adams. However, Adams still refused to resign, then spoke personally with Eisenhower. At this meeting, on September 17, Adams indicated that he was willing to resign but that he wanted to wait a month or so to get the personnel situation straightened out. Eisenhower initially agreed but then telephoned Adams to say that the situation could not continue for another month. On September 22, Adams announced his resignation. Eisenhower accepted it “with deepest regret.”

Adams returned to New Hampshire and opened a successful ski resort on Loon Mountain. He continued to play an active role in state government, serving on commissions devoted to road building and to conserving the state’s resources. Adams also privately advised state and national Republican politicians until his death in 1986.

Impact

In the 1958 congressional elections, Democrats reminded voters of the Adams scandal as well as a weakening U.S. economy. On election day, the Republicans suffered their worst defeat since the 1930’s. While Adams is not the sole cause for the losses, he certainly did not help the Republican Party.

After Eisenhower left office, the U.S. Justice Department, under President John F. Kennedy, received information that Adams had received more than $150,000 in cash from Goldfine over a period of about five years, an amount far higher than previously known. The Kennedy administration considered prosecuting Adams, but Eisenhower argued that he had suffered enough.

Scholars have been kind to Adams, with the consensus holding him to be the most effective presidential chief of staff of his era and essentially defining the position. Goldfine did not do as well. He received three prison sentences for contempt of Congress and for tax Tax evasion;Sherman Adams[Adams] evasion. Adams, Sherman Eisenhower, Dwight D. [p]Eisenhower, Dwight D.;and Sherman Adams[Adams] Goldfine, Bernard Securities and Exchange Commission

Further Reading
  • citation-type="booksimple"

    xlink:type="simple">Adams, Sherman. Firsthand Report: The Story of the Eisenhower Administration. 1961. 4th ed. Westport, Conn.: Greenwood Press, 1974. Adams’s account of his years in the Eisenhower White House provides his version of the scandal that ended his tenure as chief of staff.
  • citation-type="booksimple"

    xlink:type="simple">Ambrose, Stephen E. Eisenhower: The President. New York: Simon & Schuster, 1983. Massive examination of the Eisenhower presidency that includes a chapter on the Adams scandal. Volume 2 of a two-volume set.
  • citation-type="booksimple"

    xlink:type="simple">Ellis, Richard J. Presidential Lightning Rods: The Politics of Blame Avoidance. Lawrence: University Press of Kansas, 1994. Sets Adams in historical and political context by examining the role of presidential advisers who absorb blame for unpopular policies and thereby deflect criticism from the president and onto themselves.
  • citation-type="booksimple"

    xlink:type="simple">Roberts, Robert North. Ethics in U.S. Government: An Encyclopedia of Investigations, Scandals, Reforms, and Legislation. Westport, Conn.: Greenwood Press, 2001. A comprehensive encyclopedia documenting American political scandals, ethical controversies, and investigations from 1775 to 2000.
  • citation-type="booksimple"

    xlink:type="simple">Wise, David. “Why the President’s Men Stumble.” The New York Times, July 18, 1982. A well-written article on presidential-staff scandals from the time of Franklin D. Roosevelt through Ronald Reagan.

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