The Invisible Government | Page 5

the remarkable case of the nomination and confirmation of Julius C. Holmes as United States Ambassador to Iran. Holmes was one of the CFR members who served as United States delegates to the United Nations founding conference at San Francisco in 1945.
Mr. Holmes has had many important jobs in the State Department since 1925; but from 1945 to 1948, he was out of government service.
During that early postwar period, the United States government had approximately 390 Merchant Marine oil tankers (built and used during World War II) which had become surplus.
A law of Congress prohibited the government from selling the surplus vessels to foreign-owned or foreign-controlled companies, and prohibited any American company from purchasing them for resale to foreigners.
The purpose of the law was to guarantee that oil tankers (vital in times of war) would remain under the control of the United States government.
Julius Holmes conceived the idea of making a quick profit by buying and selling some of the surplus tankers.
Holmes was closely associated with Edward Stettinius, former Secretary of State, and with two of Stettinius' principal advisers: Joe Casey, a former U.S. Congressman; and Stanley Klein, a New York financier.
In August, 1947, this group formed a corporation (and ultimately formed others) to buy surplus oil tankers from the government. The legal and technical maneuvering which followed is complex and shady, but it has all been revealed and reported by congressional committees.
Holmes and his associates managed to buy eight oil tankers from the U.S. government and re-sell all of them to foreign interests, in violation of the intent of the law and of the surplus-disposal program. One of the eight tankers was ultimately leased to the Soviet Union and used to haul fuel oil from communist Romania to the Chinese reds during the Korean war.
By the time he returned to foreign service with the State Department in September, 1948, Holmes had made for himself an estimated profit of about one million dollars, with practically no investment of his own money, and at no financial risk.
A Senate subcommittee, which, in 1952, investigated this affair, unanimously condemned the Holmes-Casey-Klein tanker deals as "morally wrong and clearly in violation of the intent of the law," and as a "highly improper, if not actually illegal, get-rich-quick" operation which was detrimental to the interests of the United States.
Holmes and his associates were criminally indicted in 1954--but the Department of Justice dismissed the indictments on a legal technicality later that same year.
A few weeks after the criminal indictment against Holmes had been dismissed, President Eisenhower, in 1955, nominated Julius C. Holmes to be our Ambassador to Iran.
Enough United States Senators in 1955 expressed a decent sense of outrage about the nomination of such a man for such a post that Holmes "permitted" his name to be withdrawn, before the Senate acted on the question of confirming his appointment.
The State Department promptly sent Holmes to Tangier with the rank of Minister; brought him back to Washington in 1956 as a Special Assistant to the Secretary of State; and sent him out as Minister and Consul General in Hong Kong and Macao in 1959.
And then, in 1961, Kennedy nominated Julius C. Holmes for the same job Eisenhower had tried to give him in 1955--Ambassador to Iran.
Arguing in favor of Holmes, Senator Prescott Bush admitted that Holmes' tanker deals were improper and ill-advised, but claimed that Holmes was an innocent victim of sharp operators! The "innocent" victim made a million dollars in one year by being victimized. He has never offered to make restitution to the government. Moreover, when questioned, in April, 1961, Holmes said he still sees nothing wrong with what he did and admits he would do it again if he had the opportunity--and felt that no congressional committee would ever investigate.
All Senators, who supported Holmes in debate, hammered the point that, although Holmes may have done something shady and unsavory during the three-year period in the late 1940's when he was out of government service, there was no evidence that he had ever misbehaved while he was in government service.
This amoral attitude seems to imply that a known chicken thief cannot be considered a threat to turkey growers, unless he has actually been caught stealing turkeys.
Senate debates on the confirmation of Holmes as Ambassador to Iran are printed in the Congressional Record: pp. 6385-86, April 27, 1961; pp. 6668-69, May 3, 1961; and pp. 6982-95, May 8, 1961.
The vote was taken on May 8. After the history of Julius C. Holmes had been thoroughly exposed, the Senate confirmed Holmes' nomination 75 to 21, with 4 Senators taking no stand. Julius C. Holmes was sworn in as United States Ambassador to Iran on May 15, 1961.
The real reason why Holmes was nominated for an important ambassadorship by two Presidents and finally confirmed by the Senate is