Villains Of A Feather Flock Together— Timothy Mellon, A Fascist Financing Trump's Politics

There are definitely some rich rappers who back Trump, especially the ones who he’s helped get out of jail. But, of course, it went beyond that. According to Statista, 12% of Blacks (up from 8% in 2016), 31% of Asians (up from 27% in 2016) and 32% of Latinos (up from 28% in 2016) voted for Señor Trumpanzee in 2020. So it wasn’t crazy for the Trump campaign to make efforts to capitalize on that momentum, especially as college-educated and suburban voters flee from his extremism in droves.

But after Trump took over the RNC, those efforts basically flatlined, at least in terms of resource allocation and organization. Instead, the RNC was turned into a fundraising arm of Trump’s personal criminal defense efforts. Yesterday, Matt Brown and Steve Peoples reported that Trump’s boasts about his big Madison Square Garden rally featuring Black hip-hop artists and athletes and his appearances in Chicago, Detroit and Atlanta with leaders of color meant to realign American politics, has basically petered out. “The Trump campaign removed its point person for coalitions and hasn’t announced a replacement. The Republican Party’s minority outreach offices across the country have been shuttered and replaced by businesses that include a check-cashing store, an ice cream shop and a sex-toy store. And campaign officials concede they are weeks away from rolling out any targeted programs… There are signs of frustration on the ground, where Republicans believe Trump has a real opportunity to shift the election by cutting into President Joe Biden’s advantages with voters of color.”

Darrell Scott, a Black pastor and longtime Trump ally who co-founded the National Diversity Coalition for Trump in 2016: “To be quite honest, the Republican Party does not have a cohesive engagement plan for Black communities. What it has are conservatives in communities of color who have taken it upon themselves to head our own initiatives… Communities of color aren’t leaning towards the right, they’re leaning towards Trump. Trump is the draw; Trump is the magnet.”

Jasmine Harris, the Biden campaign’s Black media director, described Trump as “a fraud” who “takes every opportunity available to him to demean our community… Trump and MAGA Republicans proudly admitting that they have no real strategy to reach Black voters because they believe all they need is rap concerts and free chicken is only surprising if you haven’t paid attention to Trump’s fraudulent relationship to Black America for years.”

Trump’s obsession isn’t so much the trials per se as it is raising the money to pay his lawyers, who are paid in advance. So much of his energy has been going towards wooing billionaires ready to sell out the country for whatever promises of gain Trump makes them. On Friday, Reuters reported that a small handful of billionaires has given Trump’s “campaign” $50 million. “With Trump's small dollar donations slowing, wrote Alexandra Elmer and Jason Lange, “and some major Republican benefactors snubbing him, a clutch of prominent wealthy Americans have become crucial to bankrolling his candidacy. They list the top 5:

• Timothy Mellon- $16.5 million, adding to the at least $20 million previously. Mellon, a Wyoming-based fascist and xenophobe, has also largely financed the RFK, Jr campaign ($20 million) in the hopes that it would draw votes away from Biden.

• Isaac and Laura Perlmutter (a shonda)- $10 million, on top of the $21 million they gave in 2020.

• Linda McMahon- $10 million, adding to the $25 she has given previously (which bought her the position as the head of the Small Business Administration. McMahon will need Trump to pardon her husband, Vince, who will soon go on trial for sexual assault and trafficking.

• Robert Bigelow, a UFO fanatic- $9 million towards the $20 million he says he pledged this cycle.

• Patricia Duggan,Scientology psychopath- $5 million so far this cycle.

On my birthday a couple of months ago, Robert Reich wrote that "If Donald Trump takes power this November, he’ll owe his victory in no small part to one of the richest Americans alive— in 1920. I’m talking about the Pittsburgh banker and industrialist Andrew Mellon, who as treasury secretary for Warren G. Harding, Calvin Coolidge, and Herbert Hoover, changed the U.S. tax code in ways that allowed— more than a century later— part of his personal fortune to bankroll Donald Trump’s reelection campaign. Andrew’s grandson, Timothy has so far contributed $20 million to Trump’s MAGA Inc. super PAC. Since 2018, Timothy Mellon has also donated $30 million to the House Republicans’ super PAC for electing Republicans to the House. In 2020, he gave $30 million to the Senate Republicans’ super PAC… Like his forebears (and like Donald Trump), Timothy Mellon rages against only handouts that go to those born without silver spoons. In his self-published 2015 autobiography, Timothy argued that expanded social programs have only made Black people ‘even more belligerent… For delivering their votes in the Federal Elections, they are awarded with yet more and more freebies: food stamps, cell phones, WIC payments, Obamacare, and on, and on, and on. The largess is funded by the hardworking folks, fewer and fewer in number, who are too honest or too proud to allow themselves to sink into this morass.’ Timothy Mellon— and the tens of millions he is shelling out to Trump, RFK Junior, and Republican candidates for the Senate and House— is the product of a tax system pioneered by his grandfather that allows the perpetuation of dynastic wealth and the maintenance of its political power. The Mellon money trail exemplifies the perils of dynastic wealth— and why we need a wealth tax in America. Or the capital gains tax must be applied to the appreciated value of assets held during someone’s life, before they die and hand them off to their heirs at current market value.”

In his epic book, Goliath: The 100 Year War Between Monopoly Power and Democracy, Matt Stoller wrote about Tim Mellon’s grandfather— and the source of his wealth— notorious robber baron Andrew Mellon. Warren G. Harding was arguably the worst president until Trump. When he, wrote Stoller, “appointed Mellon under the pretense that a plutocrat like Mellon was so rich he couldn’t be bought. The real reason was that a Mellon Bank had lent $1.5 million to Harding’s campaign in 1920. Mellon had become bored with being a mere tycoon. As one of his enemies put it, ‘Mellon needed a change, and the Grand Old Party needed the cash.’ Mellon’s appointment was probably illegal. A statute from 1789 prohibits the treasury secretary from engaging in commerce or trade, an absurd expectation for a man with such industrial power. The founders had also written a law blocking the treasury secretary from holding bank stocks, another absurdity. Mellon overcame these legal restrictions by pretending to sell his assets to his brother. The rules existed for good reason: a man clothed in public power should not use that power for private ends, though Mellon did exactly that throughout the 1920s. Mellon explained the need to raise tariffs to protect domestic industrial monopolies to Harding even before the election. Harding dutifully mentioned tariffs in his inaugural address. Mellon left even the other millionaire politicians shocked at the scale of his reach… Harding, so healthy at his inauguration, became consumed by corruption scandals, and ended up dying within three years of taking office. Mellon, by contrast, would remain treasury secretary for eleven years, under three presidents. Or, as progressive senator George Norris put it in a common joke of the era, ‘three presidents served under him.’ The decade might have started with Warren Harding’s presidential victory, but the political economy of the 1920s would be structured by Andrew Mellon.”

When Harding hired Mellon, he was installing the most powerful private banker in the country into the most powerful public office in the country.

Mellon was the perfect symbol of an administration hoping to return to the pre-1900 era. Mellon’s life and career bridged the conservative robber baron politics of the nineteenth century with increasingly large federal government structures of the twentieth. He was born just before the Civil War to a wealthy, austere father, Thomas Mellon, a judge and real estate developer. His gloomy Pittsburgh mansion was in the tony East End of Pittsburgh, a town so smoggy from pollution that someone described it as “Hell with the lid off.”

Judge Mellon was deeply suspicious of democratic politics and lower classes asserting power. During the Civil War, he held no strong views on slavery, but the imposition of high taxes on the wealthy during the war enraged him. Public schools drew his ire; he believed children would study harder if they had to pay. Labor unrest among lower classes, he believed, needed to be met with violence, and may even “require blood to purify.”

Judge Mellon imparted this ideology to his son. In the Mellon household, “the air was heavy with the imperative to acquire.” According to one in-law, “they had absolutely no fun … It was work, work, all the time. The one thing they understood, the end of all their efforts, was money.” Judge Mellon insisted that his children learn accounting, at a private school he had set up for them. Judge Mellon also helped launch his son in his career. Judge Mellon was the first lender to a young man on the make, Henry Clay Frick. Frick in turn became a best friend and mentor to Andrew.

Andrew, the smartest of the boys, inherited his father’s empire in his twenties. For most of his life, he had a solitary routine. Rising early, he took the train to work, spent the day at the bank, lunched at a private club, and then brought documents home at night for study, “after a silent supper with his parents.” He read little, enjoyed little music or plays, and did no sports. Mellon grew to become neurotic, secretive, and soft-spoken, suspicious of taxes and the press.

…Unlike other tycoons, he did not specialize in one area. At one point, five Fortune 500 companies owed their lineage directly to Mellon: Alcoa, Gulf Oil, Mellon Bank, Carborundum, and Koppers. He controlled a network of ninety-nine banks. He had interests in coal, steel, chemicals, oil, sleeping cars, railroads, building construction, utilities, magnesium, and airplanes.

…Mellon’s empire was unavoidable for ordinary Americans in myriad other ways. The Mellon system was a set of industrial and financial enterprises that aided each other and had interlocking boards of directors and even personnel. Coal unearthed on Mellon lands would find its way into Mellon steel mills, which would help build Mellon ships to carry Mellon oil, all financed by Mellon banks. Being a part of the Mellon system meant customers, credit, financing, and prosperity, but also control. Being outside of it meant a constant battle with the Mellon interests.

…Mellon was also the “financial angel” of the Pennsylvania Republican Party, so powerful that when his ill-considered marriage fell apart in a scandalous split, he had the state legislature pass a law giving judges the right to deny women a trial by jury in divorce cases. Local newspapers, afraid or in thrall to the Mellon family, reported little on the matter.

Mellon never had as much control over the private financial system and industry as the elder [JP] Morgan did. However, after his appointment as treasury secretary, Mellon did have one source of power Morgan did not: a large administrative state, and in that difference lay his power. Mellon, more than Morgan, would fuse government and business to make the world safe for monopolists. Throughout the 1920s, Mellon ran the Treasury Department, set tax and government debt policy, and sat as the chairman of the Federal Reserve.

Many of Woodrow Wilson’s achievements offended Mellon, but Wilson’s most rank achievement was the income tax on the wealthy. For the eleven years he was at the Treasury, Mellon sought to reduce that tax any way he could. He pestered Congress to lower the top individual rates, to lower rates for corporations, and to end that most odious of taxes, the one on inheritances. That tax would have blocked Mellon’s father from bequeathing Andrew the beginnings of an empire. Mellon won substantial reductions in the Republican Congress, but a combination of progressive Republicans and southern Democrats blocked him from a full victory.

When he couldn’t win through Congress, he could win through administration, and through his control of the Bureau of Internal Revenue, the forerunner of the Internal Revenue Service. Under Mellon, the Bureau of Internal Revenue changed the way it calculated tax liabilities incurred during World War I. As a result, billions of dollars of refunds, some to Mellon companies, flowed back to corporate America. The bureau was especially malleable in these years, because it had just started collecting income and corporate taxes. In 1916, Americans filed roughly 450,000 income tax returns. By 1921 the number had jumped to eight million. This surge allowed Mellon to decide a host of policy questions around accounting, as corporations demobilized factories and a suite of nationalized industries returned to private ownership. He would even set up a special tax court to interpret and make tax law.

Virtually every large corporation in the country received large rebates, including forty Mellon-affiliated companies or people. Mellon personally received a $400,000 tax refund, the largest awarded to a single individual. Gulf Oil got $3 million. Mellon even had men from the bureau preparing his own returns. These refunds achieved more than just cash in Mellon’s pocket. William Randolph Hearst, whose newspapers had decried Morgan’s spiderlike control years earlier, received $1.7 million of tax refunds. The Hearst papers were so grateful for Mellon’s financial wizardry that they talked up Mellon for the 1928 Republican nomination.

Mellon was a savvy bureaucratic infighter. In perhaps his most bitter feud of the era, with Republican senator James Couzens, the wealthiest member of the Senate, Mellon had the Bureau of Internal Revenue investigate Couzens and leak information about his tax returns. Few Democratic senators dared support Couzens because of the structure of the developing system for taxing corporate and personal income. Senators often had to ask the Bureau of Internal Revenue for decisions on technical questions, on behalf of constituents or corporations. As reporter Frank Kent put it, “not one of them knows when he will be forced to go there and ask for more. Almost any question can be decided by the bureau in three or four different ways— all legal. One of these ways saves a man or a firm a lot of money, and the other doesn’t.” Couzens later said, “Give me the control of the Internal Revenue Bureau and I will run the whole darned country … The Commissioner of the Bureau has the power to perpetuate a political party in power indefinitely … It is a power that no man should be allowed to exercise in secret.” And yet, Mellon did. There was, Kent wrote, no longer a Democratic or Republican Party, but instead, “a Mellon party and a small non-Mellon party.”

Mellon could also see to it that his industrial empire flourished in the era through other mechanisms. He blocked antitrust action against Alcoa. The FTC didn’t bother to look into Gulf Oil, or any of Mellon’s other vast holdings. Mellon didn’t just ward off attacks, but negotiated with foreign leaders for oil concessions for his own oil company, both in Colombia and in Kuwait. And the great tax reductions he pushed through Congress, which slashed his own tax bill, ended up slashing into the stock market, pushing up the value of the stocks he held.

Mellon could even hold up the entire political system to serve his own interests. In 1930, Democrats attacked the merits of the high protective tariff on aluminum imports, attempting to reduce the duty from five cents to two cents a pound on crude aluminum. The bill narrowly passed the Senate. Suddenly, New York Democratic senator Royal Copeland made a plea to reverse course and go back to the five cents a pound rate; the jobs of ten thousand workers in New York were at stake. If the tariff dropped to two cents a pound, Alcoa would move production to Canada.

Progressive senator George Norris noted that Copeland “frankly admits that it is on account of fear of the power of this corporation to bring distress, poverty, and unemployment to the American toiling masses” that he supported the Mellon monopoly tariff. Copeland replied that the “people of this country are at the mercy of this monster monopoly, no matter what we do.” The higher tariff held.

This might be unfair, but fairness didn’t matter. Treasury Secretary Mellon told voters that there were immutable economic laws that could not be evaded. “Just as labor cannot be forced to work against its will, so it can be taken for granted that capital will not work unless the return is worth while.” Great wealth not only shouldn’t be curtailed through government policy, in fact it couldn’t be.

Mellon promoted his philosophy in a 1924 best-selling book called Taxation: The People’s Business. Anything that taxed the wealthy was full of “menace for the future,” threatening the very stability of society. He went further. “Our civilization,” he wrote, “is based on accumulated capital, and that capital is no less vital to our prosperity than is the extraordinary energy which has built up in this country the greatest material civilization the world has ever seen.”

Placing power in the hands of business seemed to work. After a brutal recession of the early 1920s, economic growth soared. The unemployment rate for 1925 dropped to 4 percent, on its way to a peacetime century low of 1.9 percent in 1926. A giant financial bubble was undergirding economic growth, but it was easy to overlook that in the haze of prosperity and the continued spread of next-generation industrialization technologies.

At first little known, the Republican-dominated press gradually gave Mellon more and more credit for the boom times, especially after the horrific economic experience of 1919–1920. Millions of Americans soon revered him. He was commonly known as the best secretary of the treasury “since Alexander Hamilton.” Indeed, it was Mellon who placed Hamilton, America’s original proponent of monopoly, on the $10 bill.

“Never before, here or anywhere else,” wrote The Wall Street Journal, “has a government been so completely fused with business.” The Federal Trade Commission, created by Wilson, was in the Mellon years led by W. E. Humphrey, a man who proudly announced it would no longer serve as a “publicity bureau to spread socialist propaganda.”

It seemed like an endless sea of prosperity. Just not for everyone.

Life in the mines was only the most brutal manifestation of the other market of the Mellon decade, with inequality driven by low wages among workers and farmers. Crop prices were low throughout the decade, and Mellon and the Republicans blocked relief and farm supports. “Farmers have never made money,” said Calvin Coolidge to the Farm Loan Board. “I don’t believe there is much we can do about it.” A series of court decisions weakened the ability of workers to strike, and employers across the country sought to eliminate unions. The American Federation of Labor fell from 5 million to 3.6 million members from 1920 to 1923 and continued falling through the decade. Productivity jumped by 30 percent, but wages were up by just 8 percent in the decade. As one foreign visitor to the United States remarked in 1928, “America is an employer’s paradise.”

…In the final week of the 1928 election, Mellon gave a radio address to promote Herbert Hoover, the GOP nominee. “Russia is an example of what happens when credit values are destroyed,” he said, attacking the new communist state and linking it with the policy ideas of the Democrats. In the Soviet Union, the standard of living had collapsed, and “large corporations” had “ceased to operate.” By contrast, he said, in Italy “the Bolshevik menace was met and vanquished.” Mussolini had not only rescued “Italy from any possible danger of economic and social collapse,” but had “improved the well-being of the people of the country.” The Italian government, unlike the Soviet one, “operated in accordance with established economic laws.”

For misery, voters could elect Democrats. For prosperity, they should place their faith in big business leadership. In the boom times of the 1920s, many Americans had become docile, placid, increasingly tolerant of living under big business masters, less and less interested in high ideals.

An insidious form of corporatism was gaining power over not only America’s industrial sinews but the heart of the people. Many leaders attacked the corruption, the machine guns in the mines, the poverty in the South, the links to fascism both implicit and overt, Prohibition, deals with fascists, and the monopolization of essential goods and industries. But many other Americans, intellectuals weaned on the centralization of the war and its aftermath, were losing faith in traditional democratic balances. Nearly a generation had passed since the heyday of populism, and millions of Americans had known only centralized control, by the state during the world war, and by the monopolists since. After decades of antimonopoly crusading by aggressive politicians, pledging to stand up to big money, and failing spectacularly, this was the aftermath. The monopolists were in control.

The last presidential election of the decade was similar to the first one, ending with a smashing Republican victory. Republican nominee Herbert Hoover took forty states, in a third straight GOP landslide. Two days after the election, a reporter asked Mellon if prosperity would continue. “There is no reason why,” he said, “a steady improvement in our standard of living … should not continue indefinitely,” if, he continued, “conservative and well-tried economic principles continue to be followed.”

…A man stood and addressed the chamber. “On my own responsibility as a member of this House,” said Congressman Wright Patman, “I impeach Andrew W. Mellon, Secretary of the Treasury of the United States, for high crimes and misdemeanors.” With these words, on January 6, 1932, Patman began the next great campaign to destroy monopoly power in America.

Patman had been threatening impeachment of Mellon for the past year, but few believed him. Now he spoke for an hour, laying out his case in crisp terms that revealed his training and experience as a county prosecutor. Members of Congress scrambled to understand the charges, and the peculiar process of an impeachment, with “page boys moving like shadows about the chamber, rushing for law and reference books.”

He unveiled the charges, one by one. He started with an old anti-corruption statute prohibiting the secretary of the treasury from being involved with commerce or seagoing vessels. The charges grew more incendiary. Mellon had, as treasury secretary and thus boss of the Bureau of Internal Revenue, given his own companies tax refunds. He held bank stocks while serving as chair of the Federal Reserve. He also owned a massive distillery while enforcing Prohibition, and illegally traded with the Soviet Union. Patman even noted that Mellon had had the Treasury Department launch a magazine dedicated to the use of aluminum in architecture, while controlling the Alcoa aluminum monopoly. The basic accusation was self-dealing; Mellon had been transacting his own business at the Treasury Department, and had retained control, if not formal ownership, in over three hundred corporations engaged in global commerce.

Most of the accusations against Mellon weren’t new. The charges, and many others, had floated around Mellon since 1921, when Harding first appointed him secretary of the treasury. His brother, Richard King Mellon, had always been his junior partner, a director of almost every company from which Mellon had claimed he had divested. The feigning of disinterest was absurd.

In May of 1929, four progressive senators fulminated that Mellon “control[s] some of the most gigantic financial operations in the world,” that “most of the products of these corporations are protected by our tariff laws, and Mr. Mellon has direct charge of the enforcement of these laws.” He should be disqualified from holding his office, they wrote, because of the law against the treasury secretary having an interest in the business of trade or commerce. “It would perhaps be impossible to find in the United States a single citizen who has a greater interest in the business of trade or commerce.” But in the boom days, these arguments hadn’t worked.

The crash revealed the true cost of cynicism and self-dealing. Not only were Patman’s fellow congressmen now ready to take his impeachment charges seriously, senators in a nearby committee room were examining Mellon’s use of his office to extract oil concessions from the Colombian government for an oil syndicate put together by J. P. Morgan and his own company, Gulf Oil. Perhaps more important, outside the Capitol Dome, fifteen thousand unemployed people were demanding action. Theirs would not be the last large-scale protest of the economic emergency. Mellon’s political shield, a vibrant prosperous economy, had been shattered.

This time, it was Mellon’s opponents who had an army. This time, Mellon, and the entire apparatus he represented, his entire globe-spanning machinery of business, finance, and politics, was in trouble. The moneychangers system of rule over the economy had failed.

A week after Patman’s initial statement, the Judiciary Committee began hearings. Many members of Congress agreed with Patman quietly, but would not take on the power of Mellon. Why throw away their careers, as Patman had obviously just done? “It has been said that it is hard to convict a million dollars in the criminal courts,” said Patman. “It can also be said that it will be hard to impeach a billion dollars.”

But in the Judiciary Committee— the closest forum to a trial the Democrats could muster without control of the executive branch—  Patman drew blood. Mellon was forced to admit that when he had sold his bank stocks to gain eligibility for the Treasury position, he had sold the stock to his brother. Mellon was represented by a former solicitor for the Bureau of Internal Revenue, and a high-powered Pittsburgh attorney. But they were no match for the populist from Cumberland Law School, who had been obsessed with Mellon for years.

Mellon claimed that he had terminated all connection with his businesses “as completely as if I had died.” This statement was a lie. Mellon’s lawyer argued that Mellon had little to do with Alcoa, aside from his family relationship with his brother and former partner Richard, a key official in the company. But in 1924, there had been a merger between Alcoa and a company with substantial hydropower assets in Canada, which both aided Alcoa in producing more aluminum and blocked the entrance of a potential competitor. The head of Alcoa had brought Mellon into the negotiations because of his prestige as a financier and the treasury secretary. The negotiations took place in a private railroad car. Mellon’s lawyer admitted that Mellon had been in the private car with all of the key negotiators. But, he said, Mellon looked out the window the whole time and didn’t take part or pay attention to any conversations. Suddenly, impeachment seemed plausible.

At the same time as the impeachment hearing, on the other side of the Capitol, California Republican senator Hiram Johnson spent two hours cross-examining Victor Schoepperle, National City’s vice president responsible for Latin America loans, the man in charge of loans made to Colombia after the government had granted the oil concession to Mellon’s Gulf Oil. Schoepperle denied it. Two hours later, after lunch, Schoepperle mysteriously changed his story. It turned out the State Department had encouraged the bank to make the loan, mentioning the concession as a key reason. Two days later, Johnson put into the record information Patman had gotten from Colombia, including a newspaper interview where Olaya relayed a conversation with Mellon about the country’s fiscal crisis. Mellon, Olaya said, told him to “settle your pending questions on petroleum” and implied loans might be forthcoming.

The explosive news destroyed Mellon’s reputation and finally spurred the administration into action to address the economic downturn. Three days after the end of the Judiciary Committee hearing, Hoover established the Reconstruction Finance Corporation, a government bank that could lend to failing railroads and banks. The public interpreted this as a corporate bailout. Comedian Will Rogers mocked Hoover, noting “you can’t get a room in Washington … Every hotel is jammed to the doors with bankers from all over America to get their ‘hand out’ from the Reconstruction Finance Corporation.” The bankers, it seemed to Rogers, had “the honor of being the first group to go on the ‘dole’ in America.”

On February 4, 1932, less than a month after Patman filed his articles of impeachment, Mellon resigned. Hoover appointed him ambassador to England, where he would attempt to work out loans accrued during the war. Patman called this a presidential pardon. As he “goes to England with his bag of gold that has been wrenched from his innocent victims in America,” said Patman, “our people may enjoy a sigh of relief and turn their thoughts to rebuilding our Nation for the benefit of the plain people— the ones who build our country in time of peace and who save our country in time of war.”

Want to know more about one of the most villainous families in America? You may find this video useful: