New York, NY
Still exists today.
When he retired as the IT&T Board Chairman in 1979, Harold Sydney Geneen had led IT&T through 250 acquisitions and 2,000 separate working units. Revenues had grown from $800 million to $22 billion. IT&Tís earnings had grown from $30 million to $560 million. And with 400,000 employees, IT&T was the fifth largest employer in the United States.
Despite apologists such as Rand V. Araskog, Geneen was known as a brilliant, ruthless, dishonest chief executive who would ruin people (even his own), corrupt governments and crush corporations to gain his objectives. It was largely Geneen who grew IT&T into a world corporate power (but not in telecommunications), and it was Geneen who sowed the seeds for the eventual destruction of the original IT&T.
IT&T grew from a tiny bankrupt Puerto Rican telephone company. In 1917, when the United States purchased the Virgin Islands from Denmark for $30 million, the U. S. also gained the Behn family as citizens. The brothers Behn -- Sosthenes and Hernand -- caught on to the American capitalist system quickly. They began as sugar brokers in Puerto Rico and soon learned that the telephone was a wonderful business tool. They settled a bad debt for a bankrupt telephone company.
The brothers Behn saw the growth potential of the phone in 1917 and through their little phone company began to buy and install telephones throughout Cuba and Puerto Rico. Late in 1917, Sosthenes enlisted in the U. S. Signal Corps (WW I) and rose to the rank of colonel. After the war, the Behn brothers decided to get serious about the phone business and in 1920 organized the International Telephone & Telegraph Corporation. They deliberately named their company IT&T to confuse investors (especially foreign) with AT&T.
The brothers began to grow the international part of IT&T. They began the Compania Telefonica de Espania in Spain, purchased the International Western Electric Corp, Standard Telephones and Cables, and formed a holding company in Germany, Standard Elektrizitats Gesellschaft and tried to buy Ericsson.
The German holding company got ITT involved with the Nazi Party through a banker, Kurt von Schroeder. Thus, a former U. S. Colonel became a part owner of the Focke-Wulf Company, which produced the planes that bombed American troops throughout WWII. There is strong evidence that IT&T managers ran a German spy network in South America. There is also strong evidence that after the war turned against Germany the IT&T spy network became a tool for Allen Dulles and the U. S. intelligence community. Thirty years after WWII, ITT gained $27 million in compensation from the American government for damage to its German factories.
IT&T continued its single mindedness by working with the Hungarian Communists on an undersea cable deal against both British and American interests in 1948. Harold Geneen, vice president of Raytheon, came in to head IT&T in 1956 after Colonel Behn retired. But first he had to get rid of the president in place, Charles Francis Adams (related to the Presidents Adams). It took Geneen 3 years to do the job.
After setting up one of the most rigorous financial control systems in business history, Geneen went on a buying spree. The buying spree did not include telecommunications interests because of Fidel Castro. All of IT&Tís telephone business was in foreign countries such as Cuba. After taking power, Castro nationalized the IT&T-owned telephone company. There was nothing Geneen could do about it. Thus, Geneen decided that IT&T would buy into businesses where it could maintain control.
IT&T purchased Avis Rent-a-Car, Nancy Taylor Secretarial Finishing School, Bramwell Business College and Apcoa. Additional purchases included Transportation Displays, more business schools, a shorthand system, a text book publisher, Continental Baking, a chemical company, a sand and clay company, hotel chains, Levitt Housing Construction, television and radio companies.
Meanwhile, the feared nationalization of telephone companies didnít happen, and IT&Tís European phone companies were highly profitable. However, Geneen knew the telephone plant in Europe was out of date and would soon need a heavy infusion of capital to join the rest of the telecommunications world. Geneenís business operations shied away from capital investment and leaned toward profit taking. IT&T was getting tired of dealing with the scores of European regulatory agencies, so they began to get out of the phone business. Back in the United States, IT&T was buying Hartford Insurance. Even with the purchase of hundreds of widely diverse companies, Geneen maintained his iron-fisted financial control system which all of the IT&T companies had to adopt. Geneen also constantly ďupgradedĒ his top executive corps by pitting one top executive against another with the loser being dismissed. This method brought backstabbing to a fine art.
In the early 1970s, the IRS and the DOJ began to look into IT&T. IT&T money began to find its way to national political leaders, junkets were arranged, and gifts were given. In 1971, a political convention was moved to San Diego, because it was bought and paid for by IT&T. Big time lobbyist Dita Beard hit the scene and IT&Tís world began to fall apart. Beard was subpoenaed to appear before a Congressional investigative committee. After some testimony, Beard had a heart attack. As she was recovering, Beard disappeared. Later, she turned up in Denver, where Justice Department officials interviewed her extensively.
Government investigations were demanded by Larry OíBrien, national Democratic Party chairman and by newspaper columnist Jack Anderson. Embarrassing documents made the news. Congressional investigations began, IT&T stock prices began to fall. During the antitrust case, it was brought out that IT&T, with the help of the CIA, attempted to destabilize the legal Chilean Communist government and stop Salvador Allende from being president. (It didnít work.)
At the same time, IT&T was working on a profitable business relationship with the Russian government. The antitrust settlement allowed IT&T to keep Hartford Insurance, but required IT&T to begin selling off many of its assets. Many (e.g., Avis) were sold at a profit. After the fuss was over, Geneen remained in power and IT&T continued to function, but in a less robust way. After Geneen left IT&T, the giant conglomerate began to wither away to what it is today.
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