Fifteen years ago a 39-year-old George Washington University professor asked the Internal Revenue Service to approve a novel proposal that would allow a tax-free foundation to lease his sprawling 1,200-acre Virginia farm and run it as a conference center.
Dr. Murdock Head's proposal for "The Airlie Foundation" troubled some IRS tax specialists. Teresa Prevost, who was asked to review the application, wrote that it "seems to be for the benefit of Dr. Head . . . helping him to buy Airlie Farms and maintain it, too."
Not everyone at the IRS shared her view. One who unquestionably didn't happened to be Prevost's boss at the time, IRS Commissioner Mortimer M. Caplin. Three years earlier, while he was still a law professor at the University of Virginia, Caplin has said he drafted the foundation's charter specifically in the hope that it would qualify for a tax exemption as a nonprofit foundation.
Caplin served as the foundation's first president and, while he specifically excluded himself from playing a role in the IRS's review, agency records indicate that his assistant, Mitchell Rogovin, took an interest in the case in mid-1963 shortly after members of Prevost's section had decided to rule against the foundation.
Rogovin, who was then the IRS's liaison with the Central Intelligence Agency and is now a Washington lawyer, has said he can't recall details of his actions. But IRS records form 1963 indicate he dispatched a special messenger to pick up the Airlie application after a member of Head's staff complained about the case. Rogovin asked to be informed of the future of the case and shortly after the doubts over the application began to disappear.
On Oct. 17, 1963, the IRS sent a form letter to the foundation, informing it that Airlie was being declared exempt form any federal income taxes from 1960 on.
While there is nothing in the IRS's files to indicate that Caplin's friendship with Head was a factor in the agency's decision, Head has been able to count on suppport of influential friends on many occasions. For example:
When The Washington Evening Star published an article in 1967 that accused the CIA of having secretly funded Airlie, Head's close friend, Rep. Melvin R. Laird (R-Wis.), later defense secretary, arose on the House floor to defend Head and the foundation. Head sued The Star and ultimately won $60,000 in damages for himself and the foundation on charges the newspaper had libeled them.
When officials at the Agency for International Development in 1974 threatened to cut off funding for a multimillion-dollar contract with Head, Rep. Otto Passman (D-La.), chairman of a House subcommitte that oversaw AID appropriations, persuaded AID to continue the project.
When Head wanted to do a film on heart attacks for the federal government, former President Eisenhower willingly sat down for a long interview on his recuperation after a heart attack.
Directors for Head's foundation were plucked from Washington's political elite: Laird, Caplin, former Deputy Secretary of State Joseph J. Sisco (Head's brother-in-law and now American University president), former Marine Corps Commandant Lemuel C. Shepherd, former Federal Communications Commission Chairman Newton Minow, and Dr. Lloyd A. Elliott, president of George Washington University.
The Pursuit of well-titled friends has been more than a social pastime for Head. If Head wants to meet someone, said a friend, he picks up Ms phone and calls around until he finds someone who can introduce him. Head "finds politics very interesting and fascinating," said John O. Marsh, White House counselor in the Ford administration adn a friend of Head's.
One fans to have a certain respect for Head as a craftsman," says one high government official who once clashed with Head over one of his projects. "He had this town wired like nobody else. He was into the agencies, the cabinet departments and the White House."
"This guy is brilliant and he's and artist . . . really a creative artist," said Laird, a longtime friend. Sen. Edmund S. Muskie (D-Maine) told a 1969 dinner at Head's farm that Head was "a Renaissance man, a showman, promoter, doctor, lawyer - all of that - but above all, he's a concerned citizen."
With the support of friends like Laird and Muskie and hard work by Head himself, federal dollars flowed swiftly into Head's operations. The result was to transform his bucolic country place outside Warrenton, Va., - "an island of thought," Head once called it - into a bustling multimillion-dollar enterprise. In all, federal population and movie-making contracts totaling around $15 million were directed to the Airlie Foundation and an allied George Washington University Medical Center department that Head ran.
Head's staff, which numbered as many as 240 people, would turn out such varied and exotic products as a Spanish-language film on vasectomies, a conference for Latin American soap opera writers, and planning sessions for Washington's Metro subway. Such diverse private groups as the National Association of Candle Dippers, a group of candle-making hobbyists, civil rights groups, and Fauquier County garden clubs have found the Airlie conference center 50 miles west of Washington a welcome, private retreat.
Compliments for Head adn his work were commonplace. The words "Omnia Pro Bono" (All for Good) are inscribed on the foundation's custom-designed heraldic coat of arms, its black-and-gold matchbooks, the staff's blue blazers, and the center's own flags. Black and gold are the colors of Head's two campuses: Airlie and GWU.
Today, almost 18 years after his conference center opened its doors, Head finds himself and his foundation catapulted into national attention by a former congressional aide's allegation that he gave the aide and two congressmen thousands of dollars in cash in return for their help in securing government contracts. Head has denied the charges and, with what seems to be uncharacteristic fatalism, has resigned himself to enduring the dispute. ". . . Although we will weather this storm, there is little we can do but watch it run its course," he has said.
That represents a sharp departure from the unbounded optimism with which Texas-born Head viewed the future in 1958 when he picked up his third graduate degree, in law, from GWU. "The only thing that limits you is your interests . . .," he told a reporter then. "Once you gun-barrel your vision, you've had it."
Not even Head's most severe critics would accuse him of being myopic when it came to dealing with the federal government. A look at Head and his Virginia empire provides an example of the thriving associaton that can be formed between an adroit foundation executive and those federal executives who control the purse strings.
Head's friends say that what Head has achieved is not unusual. "This town is full of Murdock Heads," said Werner Fornos, who runs a population program for Head at GWU.
Indeed, Laird insisted the other day that Head "Thinks he has underachieved. He sees what Johns Hopkins University and the [Research] Triangle down in North carolina have received [in federal funds] and he feels he has been shafted."
At 54, the trim, athletic Head is to many as complex and mysterious as the organization tables for the maze of organization on his Warrenton farm. "The only people who really know Murdock are MUrdock," said GWU law professor David J. Sharpe, who wote a textbook on forensic medicine with Head in the 1960s.
Head descibes himself as reclusive a description that may be apt since he spends most of his time on his hilly farm, jogging about five miles a day on the paths that connect his secluded home with the restored Georgian mansion that herves as his headquarters. Although the center does more than $1 million a year in bookings, guests are likely to find its rooms spartan. There are no telephones in the rooms and televisions and radios aren't available either.
"When they [convention guests] come down there, they feel like they've come down to Siberia, I'm sure," Head once said. "I'm sure they've come for the purpose of working . . . and there's nothing to do but work" there.
To guests, Head can be expansive and gracious, popping up at cocktail parties to tell them how he was the first of four generations of small-town East Texas doctors to move to the "big city."
Conversations with Head tend to be sprinkled with the names of the influential people in Washington he knows. A CIA official, asked to scout Airlie as a possible emergency retreat, expressed fears about Head's reputation for talking in an internal 1962 memo taht he sent to the agency's emergency planning officer. "This is not to imply that he is unreliable and suspect, but he is a name-dropper adn a talker," said the unnamed official.
For those drawn close to him "Doc" Head becomes something of a blend of family physician, political adviser, and outdoors companion. Both Laird and former White House counselor Marsh would turn to Head instinctively when they or members of their families faced medical operations. "If I wanted any medical advice, I'd go to Murdock," Laird said recently. "If he doesn't have the answer, he'll get the best damn answer possible."
In many ways Head is a mixture of down-home Texas and urbanity formed by his years in academic and foundation work. Although some of his Warrenton neighbors took a dislike to him for opposing a proposed housing subdivision near his farm in the early 1960s, environmentalists in the county now praise him for his stand against the housing and a highway interchange. "He's great," said Hope Porter, secretary of the Mid-Fauquier Association, an environmental group.
His 1961 decision to set up a pig farm ("Pork Research Inc.," he called it) across from the entrance to the subdivision so enraged some of the local populace that a special grand jury indicted Head and his wife on charges of creating a public nuisance. The case was dropped a year later when the local prosecutor declined to press the charges.
Ten years later when testifying in his libel suit against The Star, Head said ecology had become "my main interest."
"We had the first ecological conference there before people knew what the word meant," he told the jury.
An Airline film on pollution in the 1960s angered many industries and prompted Head to remark during The Star trial that he was worried about pollution from automoblies "long before Mr. Nader." His films won critical acclaim and got nine Emmys from the Washington chapter of the National Academy of Television Arts and Sciences.
Once a year Head's admirers and friends are drawn to the farm for a stag, black-tie dinner that is funded by a contributor whose identity is one of Head's best-kept secrets. Guests have included members of both the House and Senate committees that oversee health spending, such as former Sen. Lister Hill (D-Ala.) and Sen. Warren Magnuson (D-Wash.), cabinet secretaries like Laird and former Health, Education, and Welfare Secretary Caspar Weinberger., and numerous other bureaucrats in positions of influence over Head's government contracts. Nelson Rockefeller showed up for one dinner when he was awaiting confirmation as vice president.
The dinner is given to honor someone for contributing to medical research or education adn can cost as much as $26,000. Each year a media celebrity is hired to preside over the affair. David Frost, Hugh Downs, David Brinkley, Dan Rather, and Mike Wallace have shared the platform with Head in the past.
More often that not the winner of the award, called "The Statesman of the Year in Medicine," Roger Lewis turns out to be one of Head's friends. The winner is given a sculptured bust of himself, a scroll and an award of between $5,000 and $10,000.
When Laird picked up the honor in 1970, one doctor in the audience was heard to grouse: "What has 'Dr. Laird' ever done for us?" If the significance of the award wasn't apparent to the audience, it is to anyone who has studied the government's health funding in Congress.
Laird was the ranking Republican for many years on the House Appropriations health subcommitte, the same panel that Rep. Daniel J. Flood (D-Pa.) now heads. The late Rep. John Fogarty (D-R.I.), who preceded Flood, was honored posthumously with the Airlie award.
Dean Coston, an executive assistant to the three secretaries of health, education and welfare who served during his tenure, 1961 to 1969, recalled in an interview that when one of Head's projects at the department would appear to be in trouble, Airlie's founder would call on the secretary "woth a powerful congressman in tow." Among the congressmen who showed up on separate occasions were Flood, Fogarty and Laird, said Coston.
The dinner is one of 400 meetings held at the farm each year, events that have given Head an unparalleled opportunity to meet with members of Congress and top bureaucrats who flock there by the hundreds. The center was designed to give government agencies eager to meet away from their Washington offices a place to go without having to go too far or pay too much. The center's daily rate ($34.50) is priced just under the $35 maximum allowance the federal government will pay for government workers for food and lodging in Warrenton.
Despite Head's tireless public relations proselytizing on behalf of the foundation, there have been recurrent questions raised about Airlie's operations by government investigators. In addition to the current FBI investigation into the allegations against Head, Head has said the IRS is conducting "another review" of the foundation's financial activities througn 1975. It was previously audited in 1969 and 1970, he said.
Examples of some fo the government's questions were contained in internal AID and HEW memos and audits recently obtained by Washington Post reporters. The documents tell of government auditors who challenged the costs of Head's projects and who, like the IRS's Prevost, qustioned the dealings between Head and the maze of organizations on his farm and at GWU.
Now, as then, the lines between these organiztions are not easily defined. Head himself refused to be interveiwed for this article, and his associates both at the farm and the university said they cannot discuss details of financial dealings between the organizations.
Fauquier County land records, the Airlie Foundation's tax returns, and government audits detail some aspects of these relationships. Head, for example fills multiple roles at the farm, which now has 1,728 acres of pristino, gently sloping land in the foothills of the Blue Ridge Mountains.
Head is (1) executive director of the Airlie Foundation, (2) chairman of the George Washington University Medical Center's department of medical and public affairs, (3) holder of GWU's "Airlie chair," an endowed professorship, and (4) "principal investigator" on the department's research grants and contracts with the federal government. In addition, government auditors have said Head organized and appeared to control operations of Raven's Hollow Limited, a film production company that handles filming for both Airlie and the GWU department.
What Head himself has gained financially from his empire is not immediately clear. But it is apparent that from the outset dealings between Head and his foundation have been integral to the Airlie operations, a point that has repeately troubled the government auditors.
Officially Head is unpaid as executive director of the foundation. His GWU salary is said by his lawyers to be about $50,000 a year and it, the lawyers said, is donated to his foundation. However, Head and his wife recieve rental income from the foundation for use of the farm, payments that in 1970 were said by government auditors to be $92,665 a year. In addition, the foundation also paid county real estate taxes, maintenance and utility costs for the farm, the auditors said.
Foundation tax returns indicate that the Heads advanced large sums to the foundation in its infancy. In 1971 Head and his wife, Jane, were owed a total of $522,741, but by the end of 1976 the debts had been pared to $40,000 owed to Jane Head.
The debts to Head were erased in a complicated 1974 transaction when the foundation turned over securities valued at $575,563 to a newly formed Airlie Trust, which Head created.
Papers filed in Fauquier indicated the trust's income can be used to fund Head's death, proceeds from the trust can be used to purchase the Airlie Farm from Head's heirs and to fund the "Airlie chair" at GW, the papers say.
The most recent tax return available from the IRS indicates that the foundation in 1976 paid rents totaling $102,665. Presumably these payments now go th Kimmaren Corp., a real estate holding company that holds title to six major parcels of farm property. In late 1976, the Heads transferred title of the farmland to the corporation, which deeds indicate is controlled by their three children.
For government auditors, the most worrisome aspect of the Airlie maze has been the ties between Raven's Hollow and the foundation and the GWU department. Unlike the foundation, Raven's Hollow was initially formed as a profit-making venture, according to Virginia corporate records.
It was later changed to nonprofit status, but records filed at the courthouse in Warrenton indicate that for several years the organization had two characters outstanding - a for-profit one and a nonprofit one. Internal memos from AID contain complaints that the Raven's Hollow film crews would shoot lavish amounts of films, eating up large protions of a government grant, and forcing Head to press for additional sums of money.
HEW auditors were also troubled by the film-making company's relationship. "The interrelationship between Dr. Murdock Head, the Airlie Foundation, Raven's Hollow Limited, and George Washington University raises serious questions as to how independently the university can function when determining who would perform services related to the contracts and grants," said a 1970 HEW audit.
The issue appears never to have been resolved, according to documents The Washington Post has obtained. The Airlie Foundation refused to grant the government auditors complete access to its financial records, and said that since Raven's Hollow was a separate, private organization, the foundation could not order it to open its books to the auditors either.
The foundation has apparently advanced monies to Raven's Hollow, according to foundation tax returns. At the end of 1976 the film company owed the foundation $509,555, according to the most recent IRS filing.
The foundation's gross income peaked at $4.1 million in 1974, according to the returns. It had dropped to $2.3 million in 1976, a decrease that some Head associates say troubled him.
Earlier this month termination notices wnet out to 18 GWU staffers working on a Head-directed population study. Laird and others openly express fears that the current investigation may hurt Head's efforts for government-funded projects.
The irony of all this must be clear to Head as he jogs in the early morning mist across the rich green meadows of his farm. He came to Warrenton, he used to say, so he and his convention guests could escape the distractions of Washington. "You have to you have to take them away from entertainment; you have to take them away from the congressmen; you have to take them away from friends . . ." to make the concept work, he once said.
But in the spring of 1978, as Murdock Head has realized, the concerns of Washington have found their way to Airlie.