The Winner Is Still Champion

Standing in the marbled corridor outside Room 2227 of the Dirksen Senate Office Building during a break in his confirmation hearing last Wednesday morning, Hale Champion was at ease. Surrounded by a half dozen Washington correspondents for newspapers like The Washington Post, The Los Angeles Times, and The Boston Globe, the former Harvard financial vice president answered questions he must have heard five or six times before, always retaining his easy good humor and calm assurance. As an ex-reporter, he seemed to understand why they had to keep asking the same questions, but as a newly nominated government official, he was also careful to give the same answer to each--a denial here, a shrug of the shoulders there, and a smile of I've-done-no-wrong innocence for all. Champion had endured these sessions too many times to blow it now. He was at his best.

Question: Did you ever talk to anyone from California about the Souza case?

Champion: No, I never did.

Q: Is is true that Souza got a summary of the investigator's files?

Champion: We never denied that. They asked for a summary of the files under the Freedom of Information Act. My understanding is that they did not get what the GAO (Government Accounting Office) got.

Q: How would you characterize the hearings today? Are there any open questions left?

Champion: I think that there are no open questions.

Q: Will the Secretary make a statement today?

Champion: I think the Secretary sent over a statement in answer to the committee's request. He would have come, but they didn't think that was necessary.

Q: We haven't seen the statement.

Champion: I think he sent it over to the committee, so you can ask them where it is.

Q: Will the Secretary come up here to testify today?

Champion: Yes--I think he's on his way up here right now. He said he'd be perfectly willing to testify. He wants to get this out of the way as soon as possible.

How did a former Harvard administrator suddenly find himself embroiled in arcane issues and possible scandals like the Freedom of Information Act, the GAO, the Inspector General's Office, the General Counsel's Office, and the Justice Department, not to mention the "Souza case"? And written up in the pages of The New York Times, The Washington Post and Newsweek? The story is long and more than a little twisted, but perhaps indicative of the slow road to the top of the American political heap.

Primary Allegiances

A little more than a year ago, Hale Champion was a loser. He ran in the March 9 Massachusetts primary as a delegate to the Democratic national convention, pledged to Rep. Morris K. Udall (D-Ariz.). Although he came in second in the Mass primary, just slightly behind Alabama Gov. George C. Wallace and well ahead of Jimmy Carter, Champion couldn't pull enough votes to get on the delegate's train to New York. One might have thought that Champion's political career would end there. But in the wake of Jimmy Carter's march through the primaries and his choice of Cabinet nominees, Champion was about to find resurrection.

Throughout nearly all of 1976, local media ranging from The Crimson to the Globe speculated about which members of the Harvard-MIT community would be called upon to spend a year or two in Washington. After all, the last Democratic administration created a demand for a Boston-Washington shuttle flight all by itself.

But with the advent of the Georgia mafia and lots of rhetoric about new faces, that kind of mass migration was just not going to be repeated. Those few Harvard academics who started preaching peanut power last spring seemed genuinely pessimistic about their own chances for an administration post, so administrators like Champion--who had supported other candidates--were largely ignored.

Come January of 1977, however, it was a different story. Carter turned to a veteran--indeed an architect of the Great Society--Joseph A. Califano Jr., for his Secretary of Health, Education and Welfare. Califano, a graduate of Holy Cross College and Harvard Law School, was known as a policymaker, a man who steered his own course. When he went looking for people to fill the sub-Cabinet posts at HEW, he wanted someone with financial expertise to serve as Undersecretary, the number two post in the department. He obviously wanted a Democrat, and preferably a liberal one, with some experience health, education or welfare, but he really didn't care who his nominees had supported in the primaries.

Champion fit the bill pretty well. He was a reporter on a financial beat for the San Francisco Chronicle in the 1950s, and spent the year 1956-57 at Harvard as a Nieman Fellow in journalism. He was press secretary to Edmund G. Brown Sr. in his campaign for Governor of California, and was the state's director of finances in 1961-62. He also had experience as the vice president of the University of Minnesota for finances, planning and operations, and served as the director of the Boston Redevelopment Authority in 1968-69. Champion came to Harvard as one of President Bok's new vice presidents, and began to enforce a policy under which each of the University's faculties was financially like a "tub on its own bottom;" they were all to balance their budgets and make themselves secure and independent.

But Champion was more than a mere overseer. He launched his own projects, like the Mission Hill Medical Area power plant and housing project in Roxbury and the plan to set up a new, quasi-independent firm to manage Harvard's endownment portfolio, instead of farming it all out to independent brokerage houses. Some, like the Med Area power plant, met with opposition, but most were implemented in one way or another. And Champion, unlike two of Bok's other V.P.'s, had no major blots on his record. Yes, the power plant plan caused an unlikely alliance of opposition between Roxbury residents and the Boston Edison Company, but it is being built. Charles U. Daly, Bok's first vice president for government and community affairs, lost the Kennedy Library to UMass-Boston despite his long ties to the Kennedy family and his one-time post in the Kennedy White House. Steven S.J. Hall, Bok's first vicepresident for administration, displayed an extraordinary inability either to get along with the faculty or to keep his mouth shut. Generally, Hall would dream up a new costsaving procedure like using palm-print bursar's card checking machines for the dining halls, and casually tell a reporter about it before consulting with anyone else. But Champion's projects went through, and he knew how to move quietly through the University.

Friends in D.C.

Champion not only had a good resume, but he had friends who remembered him. Among them was Daley, who is now in Washington working on a citizens' review of the workings of Congress. Daly is very friendly with a lot of Washington biggies, including House Speaker Tip O'Neill, so apparently when he suggested that the Carter team consider Champion as Under-secretary of HEW, his suggestion was not considered lightly--particularly when other political heavyweights echoed the idea.

On January 19, Carter announced that he had chosen Champion as the department's Undersecretary and the next day sent the nomination to the Senate for confirmation. Two months later, Champion was still only an acting undersecretary, and his nomination hadn't even made it out of the committee. What was the problem?

The problem was Flora Souza. Flora Souza is the president of Home Health Inc., a California health care company that HEW pays through the Medicare program. In early January, the Social Security Administration notified HEW's office of investigations that there might be fraud involved in the department's payments to Souza's companies. Enter John J. Walsh, director of HEW's office of investigations.

Walsh is a career investigator. From 1938 until 1953, he worked for the FBI, and from 1963 to 1976 for the Senate Government Operations Committee's permanent subcommittee on investigations. In 1976, he became HEW's first chief investigator; above all, he says, he wanted to maintain his independence from the rest of the department, especially its Office of the General Counsel (HEW's chief lawyer).

Meanwhile, a Congressional committee began investigating the possibility of fraud in the Souza case, and Walsh notified his superiors, including Champion, of the investigations.

On February 4, Walsh was summoned to Califano's office, and found Califano, Champion, and HEW's General Counseldesignate Thomas Barrett in the office. Walsh says Califano asked him if he had begun the Souza investigation, and then told him that he should henceforth clear all investigations with the General Counsel's office. Califano also asked Walsh to wait until after Barrett had drawn up a plant for the investigation.

Walsh was upset. In his experience, he says, investigations that proceed under the direction of a general counsel usually don't produce anything because the lawyers are overly cautious in their investigating techniques. So he went back, asked for more specific instructions on how to proceed with other investigations, and, feeling that he did not have Califano's full support or confidence, resigned, effective March 6.

On March 8, the health subcommittee of the Senate Finance Committee held its first set of hearings on Hale Champion's nomination as Undersecretary. Most of the questions were routine. But then Sen. Herman E. Talmadge (D-Ga.), chairman of the health subcommittee, asked Champion about the Souza case and Walsh's resignation. Champion replied that Walsh had simply been instructed to keep the General Counsel's Office informed of his activities, not to actually "clear his work" with the counsel. Champion also said that until the HEW Inspector General was installed in the then empty post--Congress had only created the post last year--Walsh was to report to him.

Talmadge had his committee staff show Champion's responses to Walsh, who disagreed with them. Later, Walsh submitted an affadavit giving his version of the incidents that led to his resignation. The committee staff also suspected that the directives from Califano and Champion to put the investigation under the General Counsel's Office were the result of pressure from California's governor or congressional delegation. The Congressional committees had been under pressure to go easy on probes into California Medicare fraud, so Talmadge and company reasoned that HEW could have been responding to similar pressure. Champion's ties to California also made them suspect dirty work at the corssroads.

Second Hearing

So the committee scheduled another hearing on Champion's nomination for March 17 to get to the bottom of the Souza scandal. Champion was the target, of course, because he alone of the participants in the February 4 meeting was still unconfirmed. But there was a sudden death in Talmadge's family, so the hearing was rescheduled for March 23.

It was at that hearing last week that Talmadge read a statement saying that while HEW "had not distinguished itself" in investigating fraud, he did not want to hold up Champion's nomination any longer.

Other senators, sitting behind a table at the end of a hearing room packed with more than 100 spectators, chimed in with praise for Champion. Sen. Daniel P. Moynihan (D-N.Y.) said Champion was "transparently honest and impeccably honorable," and others praised him as "able" and "honorable." But Sen. Carl Curtis (R-Neb.) held the vote up until after the committee could hear from Califano in person, so word was sent down Capitol Hill that his testimony was needed.

Califano came up from his office in the new HEW building just a few blocks down Independence Avenue, and took the witness chair next to Walsh.

Walsh reluctantly agreed with Califano that the whole affair was basically a "misunderstanding" about how much supervision Califano wanted the General Counsel's Office to exercise. Califano and the senators then agreed that Walsh was a fine investigator, and that welfare cheaters should be prosecuted, and that Champion was a fine choice for Undersecretary. On that note, with half the senators standing up in their rush to leave the hearing, the Finance Committee voted unanimously to confirm Champion. The full Senate is expected to approve his nomination sometime this week.

In March of 1973, reporters crowded into a hearing room on Capitol Hill to watch the Senate Judiciary Committee grill L. Patrick Gray, Nixon's nominee for FBI director, about his role in the Watergate investigation. Like Champion, Gray was the only official available for questioning, and his nomination was eventually withdrawn. Champion was clearly luckier, for the Souza Medicare fraud scandal has apparently blown over. So he can now turn his attention to simpler problems--like welfare reform.

Too Many Cooks

But there is one minor scandal that is still brewing on the sixth floor of HEW's offices on Independence Avenue. On the day of Champion's confirmation hearing, the world learned that Califano hired a private chef for himself and Champion, using a 402-word job description that never mentioned words "chef" or "cook." After answering about ten minutes' worth of reporters' questions about Souza, Walsh, and his own nomination, the ice finally broke:

Q: OK, now, what about the chef?

Champion: Well, uh,...I never had a lunch there (at HEW with Califano) that wasn't working.

Q: Is the food any better than the Harvard Faculty Club?

Champion: Oh, even the food in the cafeteria is better than the Harvard Faculty Club.

Although he is technically on a leave of absence from Harvard, and could return, Champion seems quite at home in Washington. And it's nice to hear he's eating better.