[TAPE 1, SIDE A]

JACK FLEER:

[text missing]

Governor Holshouser, what was the most satisfying decision that you made as governor?

JAMES E. HOLSHOUSER JR.:

I am trying to think. I am not sure I remember what I said the last time. I look at the big picture and it was getting some things done that I had not been able to do as a legislator which is the reason that I ran for governor to start with I think. So just little things like changing the five-year license tags, saving the state money. We had the private sector come in and do an efficiency study. Came back with a whole bunch of recommendations about 600 of them and as implemented it was suppose to save us about 80 million dollars a year. Now that is the kind of thing that managers ought to be doing periodically, not every other year because it is fairly time consuming. But once a decade at least that kind of thing ought to happen. In terms of specific things I have a feeling that avoidance of damming up the New River probably not only took about as much time as any single thing during the whole four years but also had as much of my own heart and soul in it as about anything. That was a long fought battle that was won and that was satisfying. I think the establishment of an ombudsman office so that the people had some place to come when they could figure out who they were suppose to talk to about a problem in state government was a good step forward in terms of how people feel about their government. I guess overall looking back finishing four years with people feeling

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like the governor had been trustworthy and responsive to the kind of problems we had was as satisfying as any thing looking back at the four years. That is not a thing, a project, but it is important.

JACK FLEER:

Important legacy actually.

JAMES E. HOLSHOUSER JR.:

And in a sense secondarily to that from the standpoint of building a two party system in the state it was satisfying. People felt like that the government could be entrusted to Republicans without the world coming to an end.

JACK FLEER:

Let's talk a little bit about the ombudsman decision that grew out of or was certainly associated with your people's day efforts.

JAMES E. HOLSHOUSER JR.:

That is right.

JACK FLEER:

And what did you expect from the establishment of that office and what do you think it achieved?

JAMES E. HOLSHOUSER JR.:

Well sometimes you get results that you don't expect in a way. When we started off with the people's day things, it was one of these things that you do it as much as to let people have the opportunity even if they don't exercise it as you do for the people who come in. But at the same time setting up the mechanism with the people that was going to staff that project and then expanding that into a full-grown ombudsman effort. It seemed to me it should have been a very positive long term thing saying that John Jones out here on the street, you have got a problem with DOT or the Department of Corrections or Environment or whatever. You have got some place you can call without having to be bounced around from phone to phone in the government which happens an awful lot. I mean it still happens to me and I know the government pretty well. Occasionally I will call up and they will say no you need to talk to so and so and I'll

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call and he will be out of town until next week and he calls back and says no, that is not my department, somebody told you wrong. And I don't get frustrated because I sort of know about those things. But the average person on the street sometimes will just throw up their hands and say I can't get anywhere with this. Now I have not really kept up to see whether that office has functioned on a continuing bases or not. There has been a separate effort on volunteerism. It seems to me that maybe those two offices got merged.

JACK FLEER:

They have been.

JAMES E. HOLSHOUSER JR.:

And how well the office functions as an ombudsman, it is hard for me to know.

JACK FLEER:

I was tracking yesterday in the budget office, the growth of the governor's office and particularly the growth of what is now called the Office of Citizens Help or Citizens Affairs which title they are using right now. The ombudsman is part of that and it is pretty significant. I think Governor Hunt, for example, picked up on particularly the volunteer side but also kept the ombudsmen side going. But it has continued to a part of the governor's office and an important part of the governor's office.

JAMES E. HOLSHOUSER JR.:

And the trick about this is that I am not sure that Joe Jones out there on the street knows to call that particular office. Now if the people in the administration are turned in the first call that comes that it is not in my jurisdiction I ought just to send them to the ombudsmen office but I suspect that doesn't happen. It is a little hard to know you. Sometimes you set things in motion and you have a core but it takes more tentacles of reaching out within the various departments. But what I did find is that the people in that office, because they spoke with the authority of the governor's office, could cut through a bunch of what politicians call the bureaucracy and the red tape and get a response back to

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people even if it wasn't always what they were looking for. Frankly a lot of times if you got the response back to somebody even if it was no, if you could explain to them why it was no, that was enough.

JACK FLEER:

On the New River decision why was that so satisfying?

JAMES E. HOLSHOUSER JR.:

Well I grew up in the mountains. Watauga County was just adjacent to Ashe and Allegheny was next over. A long time a friend of my father, a lawyer by the name of Floyd Crouse over in Sparta, had been very involved during the Scott administration in the citizens' efforts against the dam so to speak. You had some people who thought this was going to be the greatest thing since slice bread. Real estate developers could just see lots of things but it was going to change the basic character of that part of the state. There were enough people who felt so strongly about the land and its use that I became convinced that it would be much better to leave it as it was. I don't guess I will ever know whether that was right or not because you don't know what would happen the other way. We spent a lot of time and books were written about it. But it was very well down the pipeline at the time I came into office. The state basically had a posture of not fighting the (national) government. There were three or four different initiatives in court, some in Congress, some in the state legislature. As I indicated to you previously there were congressional offices involved — Vinegar Ben Mizell, Steve Neal. Rufus Edmisten when he became Attorney General and Senator Helms office all took an active hand at one time or another. I ended up going to see, I think it was, four different secretaries of the Interior over time to get their support for the approach of using the Wild and Scenic River's Act as a mechanism to say you can't touch this.

JACK FLEER:

It was quite an effort coordinating the various levels of government and different offices. Now did you see any political benefits from this or was it essentially an environmental decision?

JAMES E. HOLSHOUSER JR.:

You total up the total votes in Ashe and Allegheny counties and they weren't going to get anybody elected on a statewide bases or anything. This didn't have anything to do with politics except in the best sense of the term.

JACK FLEER:

I was talking with the former editor of the Winston Salem Journal a couple of weeks ago about the New River decision.

JAMES E. HOLSHOUSER JR.:

Yes, Wallace Carroll was very interested in that too and as instrumental as anybody in helping to generate support.

JACK FLEER:

And he indicated that his paper decided to endorse you and he believes, although I haven't actually checked this, that in their major counties of circulation you actually won at least in part I suppose because of your New River decision and your involvement with the New River.

JAMES E. HOLSHOUSER JR.:

I don't know. I don't remember the New River being that big of a campaign issue per se. It was heating up but if you asked me right now what were the major issues in the campaign I wouldn't say that was one of them. I may be mis-recollecting.

JACK FLEER:

No I don't think he is implying that either but I think what he might have been implying was the power of the Winston Salem Journal.

JAMES E. HOLSHOUSER JR.:

Well you know the Republicans hadn't got many big city newspaper endorsements. Getting the Charlotte Observer and Winston Salem papers endorsements were probably as significant of a factor in winning as anything.

JACK FLEER:

What do you think was the most difficult decisions that you had to make as governor?

JAMES E. HOLSHOUSER JR.:

Personnel decisions in a lot of cases. Several incidents of having to let people go from positions. In some cases not because they had been bad in their intentions but because of the perception of what they had done came across looking bad. That hurt my feelings pretty bad because at times you don't feel like you are standing behind your friends like you should. At the same time there is a process of owing something to "the government" and people's perception of it not to have things appear to be accepted. I don't want to get quoted in the book as being a critical of the present administration. But the newspapers have written widely about the fact that every time some body in this administration seems to do something bad they don't get fired they get moved to another position. Sometimes with an increase in salary. But I think you have to decide early on where are you going to draw the line. For instance Commander of the Highway patrol got caught for speeding in his patrol car…

JACK FLEER:

During your term?

JAMES E. HOLSHOUSER JR.:

The press says first thing, are you going to fire him? And I said I just don't believe that justifies firing somebody even though the major job of the highway patrol is to keep the roads safe. That is a mistake that anybody could make. Shouldn't have done it. But that is not the kind of thing somebody ought to be fired about. Other people might disagree with that. And you had people who would just go off and do crazy things occasionally that anybody in their right mind shouldn't do it. I mean it wasn't bad. You couldn't have the administration appear to sanction the things that were happening.

JACK FLEER:

Now is the problem, you mention, sort of the loyalty to people in your desire to avoid having to dismiss them because they had been friends or whatever? Is the problem of this type also the difficulty of explaining the decision or an action, because in the explanation sometimes you make the issue bigger?

JAMES E. HOLSHOUSER JR.:

Yeah that is part of it. I am basically sort of a soft approach person just in general and always and frankly some of the experiences in Raleigh have taught there are ten different ways to do the same thing. If you do them one way you just come off looking awful, and make the person you are dealing with look awful and in other ways there is a way to even let people go. Sometimes you can help them find another job outside the government. Let them quietly resign and go their way. Sometimes it almost can reach the point of hypocrisy in a way. I will give you an example again not for publication. When Jim Hunt decided that he wanted to make a change in the chairman of the State Board of Education with Dallas Herring. Herring did not want to leave. But they had a big going away party and Hunt got up and said all of the nicest things in the world about the great leadership he provided forever. He had done a great job I thought. But at the same time it was sort of just kicking him out the side door but putting some foam down on the pad so it didn't hurt too bad.

JACK FLEER:

Did you have any experiences like that in your administration?

JAMES E. HOLSHOUSER JR.:

In a way, Henry Kendall at the Employment Security Commission had been there a long time. I did not have any personal contact with him. But his age had reached the point where it was time for him to step down. He still didn't want to. We decided that we would make a change. So we did a good farewell party for him. It was from my mind having to have him leave shouldn't have been a reflection on his service

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because he had been exemplary but there is just a time for all of us. So you just try to make it as good as you can. I saw people get fired in the most brutal kind of way and the smoothest kind of way within the same administration. Just different way people handling it. The smoother you can do it, the better off you are.

JACK FLEER:

Other than these sort of personnel decisions and the difficulty of making those and explaining it fairly to the people involved, were there any substantive or policy decisions that you wish you could have made more progress on or made progress on of any type?

JAMES E. HOLSHOUSER JR.:

Well we talked before about the bear of getting the mountain area management act through. I think that was the single biggest disappointment in the four years. Because the coastal act had gotten through and we just couldn't hold together the coalition for the mountain act. I still think the mountains would be a lot better off if we had. Since that is my part of the state, I feel a special sense of disappointment about that. Even though if it had passed, knowing the mountaineers and their independence, a lot of them would still be fussing about Jim Holshouser probably. So in a sense of personal legacy they probably think better of me because of how things happened than if we had gotten it through.

JACK FLEER:

I was thinking in the context of contemporary North Carolina politics that there is this discussion today about eliminating the sales tax on food. I believe that you made a proposal back in the 1970s to do that and you withdrew it, if I recall correctly.

JAMES E. HOLSHOUSER JR.:

That is right.

JACK FLEER:

Could you talk a little bit about that as sort of substantive decision that you proposed and were unable to fulfill?

JAMES E. HOLSHOUSER JR.:

I can't remember when we talked about what. But I have come to this conclusion over time that a lot of time your record, your achievements or lack of them, are controlled by events that are beyond your control. It is the same way that when you run for office and it's the same while you are in office. We proposed that in 1975 in a speech to the legislature probably in January. The week before that speech was made, we saw the first increase in applications for unemployment. The budget officer came down and talked with me and he said you need to be aware that this is happening. It maybe just the tip of the iceberg of what is coming. I am not saying change what you are going to say but you just need to be aware of this. Over the next two or three months those figures just continued to rise, sales tax figures started to drop, and it became apparent that the next fiscal year wasn't going to be able to support the repeal of the food tax, even on a partial bases. So finally you just bite the bullet and tell the legislature. I know I asked you to do this you probably are not going to do it anyway but I am telling you this is not a good thing to do right now.

JACK FLEER:

Now was that, of course you weren't running again for that office, but do you think that decision had any negative or positive consequences for the party having made that proposal and then changing it?

JAMES E. HOLSHOUSER JR.:

I don't think so. It is interesting the different views people have about that particular tax. There is a certain segment of the population says that is the only tax some people are going to pay and everybody ought to pay some tax so you shouldn't take that tax off. Other people say that it is regressive tax, it hits the people who can least afford it as a higher percent of their budget than anybody else. And that is true. It is not an avoidable tax because you have got to eat and if you need medicine you have got to get

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medicine. So you know that that equation is out there before you ever make the decision. But if you decide that you are going to do it try to do it. Having to back off always looks a little weak I think. But at the same time you have to be blind not to realize what was happening with the energy crisis and all of that at the time. And I didn't really think that had a lasting impact.

JACK FLEER:

The reason I mentioned that is because so often, not only among public figures and citizens but also among scholars, there is the idea that once you make a commitment there is all negative on the side of facing facts and realizing that you can't do what you said you were going to do.

JAMES E. HOLSHOUSER JR.:

Yes and I had the advantage in this case in that I hadn't promised it during the campaign. I think when you make promises during the campaign and then don't follow through on them it just adds fuel to the fire and the public feeling that politicians can't be trusted. I had been very careful in the campaign to say I believe that I know enough about the budget that I can assure you that there won't be any tax increases during our administration borrowing some kind of unexpected event. That is about as far as I ever went. Never talked about tax cuts.

JACK FLEER:

Right. Let's shift gears and talk a little bit about ethics in government. There is always a lot of talk about ethics in every administration and I would suppose that governors come into office with some kind of idea about what they find acceptable and what they would find unacceptable. Can you talk a little bit about what kind of ethical code you brought to the office of governor?

JAMES E. HOLSHOUSER JR.:

Well I think you start off with your own personal standard. It is sort of interesting because looking back I suspect even that changes with people from time to

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time over the passage of time. Maybe there is a better way to say that. That also gets affected by things that were out of your control. If you have a major scandal in another state or in Washington about a specific thing that makes everybody in every state more likely to set up and pay attention. We did things that everybody accepted as fairly standard at the time that today probably wouldn't be. (I) used the state plane a lot for things that people don't, I shouldn't say people don't let you do, but its become politically unwise to do any more. Never had the sense that we were taking public money to put in our own pocket because I made the determination early on in politics that if you are honest you couldn't get rich in politics, you probably lost money. And you shouldn't ever let that get to be a factor. I think you also had to figure that as the first Republican in administration, I thought it was especially important that we not get a black eye. The jury is still out at this point on whether that may happen with our legislative folks or not. And if it turns out that they do get a black eye, and to a certain extent they have got a black eye already just in fact that there has been as much publicity as there has about it. And I think they let the party down in this strictly partisan sense. In the broader political sense, they have let the governmental process down by having it appear that there is too much wheeling and dealing.

JACK FLEER:

And you are referring to the fact that the Republicans are in majority in the house and some action that has been in relation to the decisions there?

JAMES E. HOLSHOUSER JR.:

Right. Some of the accusations that have been made, if they are proven true and so far they haven't been it appears. And I generally told people they shouldn't do anything they wouldn't want on the front page of the newspaper.

JACK FLEER:

Did you feel the standard was higher for the first Republican administration?

JAMES E. HOLSHOUSER JR.:

I did.

JACK FLEER:

Yes.

JAMES E. HOLSHOUSER JR.:

I would hope that if I had been the fifth Republican I would still have thought the standard ought to be the same and keep it high. But I can't measure that.

JACK FLEER:

Right.

JAMES E. HOLSHOUSER JR.:

And I had always felt that the public in general had a feeling that there was something a little unsavory about politics. I remember talking to some of my mentors in the mountains about that, about whether you could actually get into it with both feet up to your ears so to speak without getting tangled yourself. That is harder today than it was when I was around I think because of the attack mode of the campaigns. When we talked before one of the things that I didn't mentioned that I probably should have is that despite the fact that Gene Anderson got some bad publicity during our administration, I think Gene felt one of his jobs was to keep his antenna out there, and his ears and eyes open, and have people talk to him about whether something was happening in one of the agencies that it was going to be an embarrassment. Somebody doing something wrong. And just periodically he would come in and say I think you need to take a look about this, something is happening. And I think he never did get any credit for that. It wasn't a public thing but it was very important in terms of keeping the administration's record clean.

JACK FLEER:

Is it—?

JAMES E. HOLSHOUSER JR.:

What I did find is this though. When you have got 60,000 people out there working for the state a few of them are going to screw up every day and the guy at

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the top eventually answers for all of that. It just depends on the degree the press gets interested as to how much publicity that gets.

JACK FLEER:

You mentioned Gene Anderson's role. It is necessary do you think and is it generally the case that an administration will have someone or should have someone who will sort of blow the whistle whenever that kind of potential difficulty occurs?

JAMES E. HOLSHOUSER JR.:

I think it is. I think somebody can. Sometimes it just happens because of the personalities and Phil Kirk shared that sense of responsibility but just in a slightly different way. It is sort of hard to explain and I am not sure that I can. Both of them felt an obligation to sort of keep their eyes and ears open. If you don't have something like that, then if the governor is doing his job he is out there being the spokesman for the state and looking at policy and this sort of thing. Something will just reach up and just bite you from behind in case you don't have time to personally oversee all of this stuff. So part of your own protection of yourself is to have somebody who is doing these things that you don't have time to do.

JACK FLEER:

Right, right. Some people argue that governors and other people in high positions of responsibility sometimes make it difficult, maybe unintentionally, to find out the things that are going wrong in the administration because they surround themselves with people who are loyal but want to be loyal want to make the job as, not necessarily as easy, but as doable as possible. Others argue that that is a recipe for disaster. If you don't have someone in the administration who will tell the governor that either he is doing something that may not be intentionally undesirable or someone else in the administration in his name are doing that, that you inevitably run the risk of having to look on. Can you talk about that dilemma?

JAMES E. HOLSHOUSER JR.:

I have seen that from both sides as a state chairman. I use to sit in meetings with other state chairmen from the south and other parts of the county, Republicans. With a Republican in the White House we would say you ought to do this, you ought to do this. Everybody would go in and everybody, either out of in awe of the Oval Office or the person with the presidency, gets cold feet. Or maybe they don't want to be the bearer of bad tidings so to speak. I told our staff, I told the cabinet early on that we couldn't afford yes men or yes women because we have them too. We had a disadvantage in not having a lot of experience but we also had an advantage in that we had all sort of fought the war together and there was a sense of a team and there wasn't much, there was tremendous respect for me as governor but there was a fair amount of disrespect for me as a person that was really good. And the staff would give me a pretty hard time occasionally about something or another. And I told them that we couldn't afford to screw up. Which is what would happen if any of them were afraid to bring something bad. Now I think that worked fine where the staff was concerned. I didn't think the same thing always worked where people coming in from some small mountain county who hadn't seen you while. He has known you and worked with you. He is still so thrilled that we have got a Republican governor. He doesn't want to tell you something. So it is a little hard no matter what you do to assure that people tell you what you need to hear all of the time.

JACK FLEER:

Did you have any cases during your administration where you would find out about something and thought, well why didn't somebody tell me about that?

JAMES E. HOLSHOUSER JR.:

Not a lot, not a lot. I am thinking it has been almost twenty five years now and times tends to blur these things. If I went back and looked at the newspaper clippings, I would probably find something.

JACK FLEER:

But nothing after twenty five years still bothers you that somebody didn't tell you at the time.

JAMES E. HOLSHOUSER JR.:

That is right.

JACK FLEER:

What do you think is the biggest threat to ethical behavior in politics and government?

JAMES E. HOLSHOUSER JR.:

Well I think it is when people who are honest and responsible are not willing to stand up to those who aren't and say we can't do it that way. I think the public is less inclined these days to be outraged. Maybe they have gotten, like people in Europe centuries ago, too jaded with things. There is not as much potential for political backlash as there once would have been in this country and in the state I think. Although I think we are a little bit better than maybe the country at large. It is hard to know. I think we are. And I said earlier there are some things that people fuss at you about today that they didn't fuss at you then. There are things today that are done that would have gotten a lot more outcry twenty years ago simply because I think there has been some lowering of the standards in some way or another.

JACK FLEER:

Do you have an example of that?

JAMES E. HOLSHOUSER JR.:

I think people who serve on boards and commissions in some cases may think of themselves as wheeler dealers a lot more than people did twenty and thirty years ago. Now that may have been because I was more naive twenty and thirty years ago and didn't see some of the wheeling and dealing that's going on. But it seemed like to me

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that maybe it started during that period of big federal grants from Washington during the '60s and '70s. But it seems to me that people have become more aware of the potential for use of the public trough for their own personal benefit than they did back years ago. Sometimes personal observations sort of shoot from the hip. They may not be well founded but that is sort of the impression I have.

JACK FLEER:

One of the things that seems to me has gotten somewhat more publicity in recent years in recent decades in fact, than it did possibly in the '70s or '60s or even earlier and that is what we commonly refer to as pork barrel activities. Some interpretations of pork barrel activities suggest that this is an unwise use of public treasury. Other people say no, it is a matter of good causes that are getting reasonable help from the state. The first of those suggest the kind of pressure, buying votes, those kinds of things. Others suggest the kind of public interest that benefits from this. Am I right that those kinds of things are more public today. If so is that something where in a sense ethical standards or standards for political decision making consistent with the public trust are greater today than in the past?

JAMES E. HOLSHOUSER JR.:

It is a mix. You start off with what I think is a fact, that pork barrel is always going to be a miniscule part to the overall budget. It gets a lot more attention than it deserves as a percentage of spending. There also are certain number of pork projects that a guy from West Virginia is going to call pork and a guy from Virginia is going to say it is just something that needed to be done and there wasn't any other way to get it done. I suspect that people who come from rural areas tend to look more at that latter approach. That they would never get anything based on the numbers. And at the same time there is also been just some blatant examples of tax monies that shouldn't have been

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spent on projects. There wasn't any way that you could justify it no matter how you cut it, except that Senator A wanted it.

JACK FLEER:

I was told yesterday in talking to some people in the budget office that there used to be a practice that whenever a particular project received a state allocation, let's say $50,000 pick a modest number in some people's judgement, the check would actually be made out and given to the legislator who in turn would present it to whatever organization it was.

JAMES E. HOLSHOUSER JR.:

You have seen pictures in the paper of the legislator actually handing the check.

JACK FLEER:

That is right. That is right. That is no longer the case apparently. It sounds that it might be an example of higher ethical or public trust standards today than in the past. Do you have any comment on this? Was the budget officer wrong when he told me about that?

JAMES E. HOLSHOUSER JR.:

I don't think the checks were made out personally to the legislator.

JACK FLEER:

Yes, I didn't actually mean personally.

JAMES E. HOLSHOUSER JR.:

And having been a Republican legislator I never got any checks given to me to give to anybody and it seems to me that that is one of those things that was sort of a phase. May have been during the early 1980s that that happen. Now today from Washington and from Raleigh, the chairman of the county commissioner is going to get a letter from one of our state Senators or representatives saying I am pleased to let you know that the department of so and so has approved a grant for you. That tells you that that legislator has asked the departments to let them know anything that is happening in your district or maybe the cabinet secretaries said to be sure to let the legislators know so

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that they get as much political credit as they can. It depends on how acknowledgeable the public officials are at the local level as to whether they think that letter from the legislator was important or not and that is just part of the political game I think. Part of the advantage of being an incumbent.

JACK FLEER:

One might argue, I remember in an earlier conversation that we had. I think you quoted a fellow named Andy Jones as saying I don't know why you want to be governor because you make at least an enemy a day. But the other side of that kind of thing as it relates to pork barrel projects is that if you as a legislator or governor are trying to help out some particular local organization with a state allocation that means that money is not going to somebody else and probably also has in their mind a legitimate request in there. So you do run the risk some times of making some people unhappy in that process.

JAMES E. HOLSHOUSER JR.:

And the more discretionary money you have the more those decisions have to be made. I am not big on discretionary money. They tend to be slush funds that are used for less than the best purposes all too often. At the same time the Appalachian Regional Commission and the Coastal Plaines Regional Commission monies from Washington were things that we used very effectively for things that needed to be done and because of the way the state budget was set up couldn't have been done that way in some cases because of timing. When Old Maine, the original Indian structure at Pembroke burned in '73 or '74, there had already been some talk about that building needed to be torn down and the Indians were all unhappy about it. I had promised them that if I were elected, that I would see that that didn't happen. When it burned down I called Bill Friday and I said just sort of an extension of that promise we needed to try to

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rebuild that building rather than demolishing what is left. Take the walls that are still standing and work from that. I will get you some planning money from Coastal Plains Commission to go ahead and start which is always the first thing you do with people is telling them you will help them a little bit with the money. Otherwise the university would have to come back in the next budget cycle with money for plans for building it; that would have been two or three years down the road. As it turned out they were able to start the planning the next week. And that is effective use of that kind of money. At the same time a lot of it just gets sort of frittered away on things. Because if Joe Jones who is your county manager in X county calls up and says we really got to have something done about our library up here; it is fallen in. An Appalachian Regional Commission has some money that can be used for libraries and so maybe that is not a bad thing. But that might not have been the best use of that money. It ended up there because Joe Jones was your old friend. And government ought to be on a basis of policies not people for the most part. But again, a lot of happens because of the Floyd Crouses of the world.

JACK FLEER:

Right. We do know however it is not possible to take politics out of government. I want to talk with you finally with some questions about your relationship to the political party and the development and particularly of the Republican Party in this state from the time that you were governor. During the time that you were governor one of your stated goals was to help develop a two party system, a stronger Republican party in the state and a two party system in North Carolina. What were you able to do as governor to move toward that goal?

JAMES E. HOLSHOUSER JR.:

Not nearly as much as I would have liked simply because of Watergate. That tainted the Republican party for not a decade but certainly for a couple of elections.

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The 1974 election, 1976 election, and 1978 election were all tainted. It was only Ronald Reagan's election in '80 that sort of turned that cycle back around. North Carolina's elections are impacted by national elections more than most people realize. If North Carolina doesn't carry the state for president on the Republican ticket, we don't do nearly as well in local and congressional elections. And I came into office with a different background than a lot of governors around the country having been the state chairman for almost six years and sort of seeing the state through those glasses. At the same time I also believe that once the election is over that the best job that you can do for the party is the best job governmentally. So while we went out and did rallies and speeches and different things on the side, from the governmental standpoint, I sort of thought that was over here on one side and politics was over here. While you have got people interested in jobs particularly from lower income areas of the state where government is more an employer of first resort or best resort. That personnel side of government is a function and it is there. But the policy side of government ought to be mostly, can't say non partisan because political philosophy that is involved in a party has to do with how you operate the government. But you don't try to operate the government as the vehicle of the party I guess is the better way to say that. And I know sometimes you can get sounding too high minded with these kind of things. If you have got a political bone in your body which you should if you run for something, you can't help but think about the impact of what you are doing on the political process. There are policy decisions that you make that can definitely effect how the party is perceived not just you as an individual. And I get a little concerned these days that our Republicans are potentially perceived as more libertarian than Republican and more laissez faire than we can afford to be at modern times. But on

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the other hand I know that, if I look back at the evolution of parties over the last forty or fifty years that I have been an adult, I realize that parties are not mondilitic and nobody in any party marches down the same road to the same beat all of the time. There is always that if the umbrella is big enough to be successful that it is going to have people with different stripes and philosophies in it. I think that when you are in office that what you propose and how you vote as a legislator does make a difference in how people perceive that.

JACK FLEER:

Now you talked about, you said that you didn't make quite the progress that you would have like to have because of Watergate. Were there steps as governor that you could take to offset the effect of Watergate on the Republican party in North Carolina and did you take those steps?

JAMES E. HOLSHOUSER JR.:

I don't think there was much. You tried to do what you could.

[TAPE 1, SIDE B]

JAMES E. HOLSHOUSER JR.:

I believe it was the Republican governors' conference in Memphis in November of 1973. Nixon had said coming into that particular conference that there were no more surprises. In the next day in the paper was the gap of the tapes of Rosemary Wood's tapes. I just came back and said we are not going to say anything more about this. Because the guy looked us in the eye yesterday and told us something that flat got proved wrong in today's' paper. He was bound to have known it was going to get proved wrong. So we are just going to sit tight. And I didn't try to just never go to Washington and distance ourselves from that administration because there was too many things in Washington that still had to get done. Frankly, Washington was in such a state

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of disarray in terms of function that you could only get some things done by going to the cabinet secretary as a rule. Only the governor could probably do that most of the time and say we need this done and he would tell somebody to do it and it got done. But you didn't get any more entwined with the president personally than you had to.

JACK FLEER:

As far as your effort, if you made it to try to shape the Republican party in North Carolina during that period, what about the resources of the Republican party of North Carolina in itself? How much "control" or influence did you as governor have over the party?

JAMES E. HOLSHOUSER JR.:

Well we had of course a major fight over the state chairmanship in the Spring of 1973 and won and put in a state chairman whom I felt comfortable with and was close to. That lasted two years and then another state chairman came in that I felt okay with and had not gone out and recruited and actively promoted around.

JACK FLEER:

Did not recruit the second person?

JAMES E. HOLSHOUSER JR.:

Right. And wasn't unhappy with him. Bob Shaw was fine. And you sort of become a little bit of a lame duck as you go along with that. It is obviously more up front. The main thing there was that you needed some kind of mechanism that if you can get it set up that would allow this business of personnel to be handled in some kind of organized way and the state headquarters has a way it gives a county chairman out here a vehicle to say Joe Jones' wife is sick and he has got a bunch of expenses and he needs a job that is going to pay more than what he is getting where he is. The county chairman calls the state chairman and he meets with somebody over in the governor's office that kind of thing periodically. If you can have a state party move in to function like that, it seems like to me that there's a process that helps government by not having government

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constantly involved in this political side. May be kidding myself about that. It may be it just has to happen anyway. But I have always thought that you didn't necessarily have to hire, fill every position with a Republican. Frankly I didn't think we had enough Republicans that wanted jobs to be able to do that. But I thought Republicans who did want jobs that if they were qualified could get just as easily hired. In previous administrations, understandably none of them got hired unless they changed their registration.

JACK FLEER:

You mentioned that you had a sort of a well publicized row over the selection of the party chair and some of that has happened with subsequent or the subsequent Republican governor. Would you talk a bit about why it appears, I don't know whether this is perception on my part, it appears that Republican governors have had more difficulty in securing chairmen that they want without challenge.

JAMES E. HOLSHOUSER JR.:

I think we are new at it. Democrats have had governors for years, well decades and decades and have gotten use to over time. Maybe it is sort of grown up. I have not done enough research to really know, that the state chairman is just selected by the governor. It is certainly still the case with the Democrats. Republicans have been selecting their state chairmen without anybody being able to tell you what to do forever in my lifetime. It is just something that there wasn't any tradition there. I don't think governors got turned down on their choices of state chairmen on our side but it has not been without a fight.

JACK FLEER:

Does it have anything to do with factions and the difficulty to overcoming factional differences within the Republican Party?

JAMES E. HOLSHOUSER JR.:

I think that is a part of it and that goes right down to the county level because you have factions in every county just about. In some cases I have probably said this to you before, if Joe Jones is for you in this county you can be sure that Joe Smith is going to be against you, not because he doesn't know anything about you or doesn't like you. He is just not going to be with Joe Jones. They are always on opposite sides. Maybe that is just the nature of how politics is. That is getting a little bit less clear these days as television is able to sort of bypass the organization posts and go directly to the voters even in the primaries.

JACK FLEER:

To what extent has the Republican Party fulfilled the expectations you had when you were governor of North Carolina? Has it met those expectations or exceeded them or not reached them?

JAMES E. HOLSHOUSER JR.:

I am really pleased. I feel like a real sense of personal satisfaction there. I think we have built a two party state. I think that is good for North Carolina. It is sort of hard to say it in a succinct, correct way Jack. But I am a Republican who made that conscious choice philosophically about how I view government. We talked about that big umbrella that I don't feel always comfortable with what my party is doing. I would feel less comfortable as a Democrat although there are times that I feel more comfortable with, an immediate Democrat position than I do a Republican position some places. But I think that the higher part of what I was about in that part of my life was building a two party system as such. I told Pat when I'd come home from a state's chairmen's meeting some time or another and I had heard a chairman from Indiana or Ohio or something talk about government and how it was and I came home and said you know he sounds just like the Democrats. Had to be his approach to this. They had been in control for so long and

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how their patronage machine was set up and how the contribution machine was set up. I said in that state I probably would be a Democrat. I doubt I know that is probably not so because philosophically I wouldn't move in that direction. At the same time I have always thought that balance helps the political process and that one party government is just not good even when it is Republican.

JACK FLEER:

Do you think that the advances that the Republican Party has made, let's say by 1998 when we are talking, are greater or lesser than what you would have anticipated in 1970, in the state I am talking about?

JAMES E. HOLSHOUSER JR.:

If you had asked me in January of 1973 I would have one opinion. By 1976 having seen the full impact of Watergate and how much of an impact it had, I am extremely pleased that that rebound came in the 1980s. By the 1990s we had a majority in one of the houses of the legislature. We haven't elected many Council of State people. That is the only area where we are sort of short.. We have elected judges, which is sort of another case, because I don't think they ought to be elected. That is an evolutionary process from 1982. But I thought it would be long time before we elected a majority in the legislature.

JACK FLEER:

Do you think the Republican party is more or less cohesive today than what it was in the 1970s? Is it more factionally ridden today than what it was in the past?

JAMES E. HOLSHOUSER JR.:

It is different. In the '70s there were two pretty clear factions. I shouldn't say the '70s, in the '60s there were two pretty clear factions. As we have grown and the base has grown, let me back up a minute on the legislative thing. I thought we had the potential to elect the governor, to elect congressmen, to elect a US senator, before we elect the legislature simply because that requires a base in so many legislative districts

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across the state that I thought it would come last. The lines have blurred in some ways and have changed in some ways. The issues in the '60s just aren't the issues in the 1990s. I think probably the single thing that sort of juts out at you that has happen in this period of time is the growth of the Christian Coalition. There have always been people who were concerned about social issues on either side of the spectrum. At the same time that in the 1960s and early 1970s I think the left side of those social issues was more organized. I served in the late 1970s and early 1980s on a thing called the Council on Theology and Culture of the Southern Presbyterian Church. I went to the meeting as part of that which was held in Washington in the early 1980s. George Chancey was basically a lobbyist for the Presbyterian Church in Washington at that time. But this was a multi-denominational thing. They were trying to organize a network in which if an issue came up in Congress you could send out wires to everybody and all of these networks would go out and everybody would write their congressmen back. And almost every issue that they talked about and position they were taking I was against. I came home feeling really bad about that. On the other hand in the 1980s and 1990s, you have seen the growth on the more conservative side of the social issues and it has been more visible than the left ever was I think. That may be simply because the media didn't view the left organization with fear whereas they do the right. I think what concerns me the most about both sides is the lack of tolerance for the other position. I wish I was as convinced of my own and certain about my own religious feelings as most of the people are in those organizations on either side. Life would be a lot easier if you didn't have to struggle with some of these things.

JACK FLEER:

Separate from, let me ask you, is separate from the Christian Coalition and the social conservatives that you talked about, a faction that for lack of a better term is referred to Libertarian?

JAMES E. HOLSHOUSER JR.:

Definitely is and those two necessarily don't go hand and hand. They both are a little bit out of a mainstream in a sense. Although the Christian Coalition's growth has made it more mainstream than it would have been at one time and Ralph Reed and people like that have made it more that way. There is definitely a laissez faire libertarian approach that says let the private sector do its thing and get out of the way. The less government the better. In an early day, a less complex day, I would probably have felt more like that than I do today. I still feel just like Lincoln. The government ought not do the things, people things, that people can do as well for themselves. But there are just so many issues today that people can't handle from a private sector's standpoint. Even though I am not a tree hugger in a sense I think the environment is one of those things; that acid rain doesn't stop at state lines or county lines. What may be contaminating the stream down in my neighborhood may be the direct results of what is happening up in your neighborhood. So I think government does play more of a role today than it did in Lincoln's time.

JACK FLEER:

Does and has to, you are saying because of

JAMES E. HOLSHOUSER JR.:

Yes I think it does. Those who take position of a less government the better and I have heard that stated directly by a young legislator in the east about ten years ago I guess. I understand the point of view that they have; I just don't agree with that.

JACK FLEER:

So in a sense as we talk about your history with the Republican party, it probably has made more advances, more quickly than what you had expected back in the 1960s and 1970s but it has become a much more complicated party.

JAMES E. HOLSHOUSER JR.:

It has, it has and the bigger you get, the more viable force you are, the more that is going to be the case just by the natural demographics of things. People get into politics for different reasons. Some of them get into politics simply because they see it as the only way they have any hope of getting done something they want to do, good or bad.

JACK FLEER:

Governor thank you very much.