Four years ago, reputed billionaire John D. MacArthur set up a foundation that, on his death, would acquire a single, enormous asset from his estate: the insurance empire that he built from scratch and that he alone owned.
He died, at 80, last January. Now the foundation is preparing to take possession of the Bankers Life & Casualty Co. of Chicago and the 12 other insurance firms in the MacArthur group.
On paper, the companies are worth $255.6 million. But one director of the foundation, MacArthur's only son, J. Roderick, Predicts that an appraisal now under way finally will fix the value at nearly triple that amount - "in the range of three-quarters of a billion dollars."
If $750 million is on the mark, the John D. and Catherine T. MacArthur Foundation will rank among the half-dozen or so wealthiest - and hence most influential - foundations. And the tax laws will require it to pay out, for charitable purposes, at least $37.5 million a year.
How that money will be spent - and who will have the power and influence that accrue to the person making those decisions - is now the subject of an emerging struggle between Roderick MacArthur on one side and on the other side four long-time business associates of John MacArthur and their apparent choice to head the foundation - the powerful but low profile administrative assistant to the chief justice of the United States, Mark W. Cannon.
Possibly as soon as Friday the foundation board may name Cannon president of the foundation, largely because of the advice he has provided it.
By all accounts, John MacArthur was content to leave the spending decisions to the seven foundation directors he handpicked for the job. "No man can manage his money from his grave," said news commentutor Paul Harvey in a phone interview. Harvey is one of the foundation's directors.
In addition to Roderick MacArthur and Harvey, only three of the directors have played an active role. That are William T. Kirby, 67, outside counsel to Bankers Life; Paul D. Doolen, 73, its vice chairman, and Robert P. Ewing, 53, its president.
All three are virtually unknown to the public. "The luminaries of the world are all strangers to us," Kirby said. "We know about them if we read about them."
By contrast, Harvey is assuredly a luminary, thanks in part to Bankers life's 27-year sponsorship of his broadcasts.
Harvey calls himself a "long-time friend" of MacArthur, but noted, "I'm not sure a billionaire ever has any close friends."
But he felt he could say confidently that he and MacArthur had two common interest: projects to improve the welfare of animals and to improve journalism.
These are among dozens of relatively small-scale projects listed in a three-part, 534-page report and inch-thick appendix that Cannon prepared for the directors' guidance.
A drastically different approach, one never attempted on such a scale, is urged by MacArthur's son, who is skeptical of Cannon's vision of the foundation's role, Roderick MacArthur's idea: to give massive subsidies each year to hundreds of scholara for research in diverse fields.
"The people I'm talking about are the people we believe to have the best chance of making the great discoveries of tomorrow," he said.
He doesn't want to attach the strings usually attached by government, universities and conventional foundations, because he sees a great need to avoid the customary "management approach," which requires a great deal of accountability in the ordinary sense.
For discoveries that haven't been made, such accountability "is impossible," MacArthur said. "No one can write a project application on how he's going to discover something he does't know exists."
He said he has "very good reason to think" that his father would have liked the idea because "it's betting on individuals. That was his style."
Mark Cannon, while saying he was "delighted with the idea," told a reporter that he was concerned about making a "tremendous commitment" to it. He gave it no extraordinary attention in his report and said that ultimately it's matter for the board.
Cannon, 50, is in line to be president of the foundation and maybe on its board as well, so ultimately it may be a matter for him.
His involvement grew out of his work as factotum for Chief Justice Warren E. Burger, a role created by a special 1972 law that Burger sought.
Last March, Cannon attended a federal judiciary committee meeting in Palm Springs, Calif., where lawyer Kirby, a close friend who is also an acquaintance of Burger, told Cannon about the foundation and the decisions it must make. Kirby said Cannon told him, "That's an interesting assignment."
Kirby said he learned that Cannon, who has a Ph.D from Harvard in political economy and government, had been involved with foundations from 1964 to 1972, when he was with the New York-based Institute of Public Administration. Cannon headed the IPA for four years.
"He knew something about foundations," Kirby told a reporters. "And of course, I didn't."
A few weeks later, he and Cannon met again, in Denver. Both men agree that Cannon told Kirby the subject fascinated him, that he offered to propose some ideas, that Kirby took the matter to the board, and that the board approved.
As a result, Cannon sacrificed his four-week vacation and nights and weekends for four months to produce, with the aid of three researchers paid by the foundation, his mammoth report. He said he had Burger's permission because he worked on his own time.
Cannon wouldn't let a reporter see a copy of the report, saying he prepared it solely for the directors. They, too, declined to relaease it. "It's very preliminary," said Kirby.
Four of the directors were unstinting in their praise of the report and its author. Bankers Life president Ewing, for example, rated the report "very excellent" and said of Cannon, "I like the cut of his jib."
The two inactive directors didn't get copies of the report and haven't attended board meetings.They are John MacArthur's widow (and Roderick's stepmother), Catherine, of Palm Beach Shores, Fla., and Louis Feil, a New York City real-estate investor.
Thus the only note of disenchantment came from Roderick MacArthur, owner of the Bradford Exchange in Niles, Ill., which deals in collectors' decorative plates.
While MacArthur would "rather not" say how he'd vote on Cannon, he said he was "less than thrilled" by the report and gave some reasons why.
His point of departure was Cannon's initial mission: to divine the thoughts of the directors about the foundation's goals, collate them and provide related information so that they could make informed decisions about what to do.
"I've had a hard time getting a good view of what my fellow directors are interested in," MacArthur said. Refereeces in the report to their ideas "are often anonymous, so I'm not quite sure sometimes who is espousing what particular point of view," he said. "And, unfortunately, only a very small percentage of the report is given to our views, anyway."
MacArthur also was critical of the report's attention to what he called "diversions," such as a discussion of investment policy, "which I don't think has much to do with our goals."
Even the report's admirers were struck by its length. Harvey called it "overly documented." Kirby called it "fat." Part of the reason is that in good part it's a catalogue.
It treats some subjects "merely as topic headings, such as 'health' or 'habilitating criminals,'" without substantive analysis, MacArthur said. He said this left him "somewhat perturbed."
"There's no pretense in the report of even trying to create a plan to get started on a specific program," he said.
At least as troubling. MacArthur said, is the report's failure to delineate "the greatest human nees of our time," so that the directors could "select out those to which we should give special attention." It's "absurd" that a subject as important as malnutrition and starvation got almost no attention, he said.
MacArthur apparently was alone in emphasizing such issues.
Asked about the criticisms, Cannon said, "My intention was to do a report that would reflect their views. Obviously, most of them felt it did." Kirby agreed, implying that MacArthur was nit-picking.
Perhaps surprisingly, the foundation didn't pay Cannon a fee, except for expenses. "I would not have accepted any money," he said. "I've worked all my life to keep a good reputation. I've acted with high propriety."
But that is not to say that Cannon rules out the probability of reward. He confirmed that he is the only serious candidate for president of the foundation and, if the terms agreeable, would accept the post should it be offered.
Clearly, agreeable terms would include a big pay increase. At the Supreme Court, Cannon earns $54,500. By contrast, he said, presidents of top foundations earn 'around $70,000 to $120,000 or $125,000."
According to MacArthur, Cannon's report, at least implicitlu, "recommends a very high salary" for whoever becomes president.
Cannon denied having made a recommendation. Instead, he said, he merely listed salary data compiled by the Council on Foundations. He also noted a former Rockefeller Foundation official's statement that an extra $10,000 in salary, if it will attract or hold a superior executive, can be a foundation's best investment.
The report contains what MacArthur called "a very vague description of a personality" of presidential caliber. He declined to say if Cannon tailored the description to fit himself.
Cannon acknowledged that he could fill the bill. Indeed, he said, while preparing a section the report on "what to look for in a chief executive office." The possibility that he might be that person first crossed his mind. Despite the "intellectual excitement" the thought generated, he said, he kept it to himself.
Cannon said that neither a guest for personal enrichment nor for power led him to write the report or to entertain the heady prospect of becoming its president.
"The big reason was that it was fascinating," he said. It held out the possibility of swapping a 6 1/2-year concentration on a single area - "trying to improve the administration of the American judiciary" - for the kind of "intellectually very rich and varied" challenge he'd enjoyed at the IPA.
"What could be more fun than to try to think through the ways in which a foundation could have the maximum impact for the benefit of humanity?" Cannon asked.