Donald M. Kendall (1921-2020) (BOOK EXCERPT)

by Unfrozen Caveman Law Writer

Donald Kendall, best known as CEO of PepsiCo, died over the weekend at the age of 99. Kendall played a large role in bringing Richard Nixon to Wall Street following his disastrous defeat in the 1964 California gubernatorial election, and helping him plan his successful comeback in 1968.

Long before Pepsi had the likes of Michael Jackson, Madonna, or Shaq as a celebrity endorser, it had Nikita Khrushchev and Richard Milhous Nixon.

Their commercial for Pepsi didn’t include pyrotechnics, choreographed dancing, catchy jingles, or sex appeal—unless you consider a debate over the merits of capitalism versus communism between the vice president of the United States and the premier of the Soviet Union sexy. In 1959, Nixon was visiting Moscow when he and Soviet leader Khrushchev made a joint appearance at the American National Exhibition at Sokolniki Park. The exhibition was held to promote cultural understanding between Russians and Americans, but the two leaders took the opportunity to engage in an impromptu debate that started inside the kitchen of an American-style display house and continued all over the showroom floor, with the two men gesticulating and jabbing fingers at one another while reporters and cameramen recorded everything. When they got to the Pepsi-Cola stand (which featured two different Pepsi drinks: one made in the United States and one made with Russian water), that’s when it happened.

The company’s new slogan was “Be Sociable! Have a Pepsi!” What better ad than a picture of America’s foremost adversary (and the scourge of Coca-Cola, which the Party in Europe equated with capitalist decadence) acting sociable over a Pepsi made in the USSR? “Don’t worry about it Don,” Nixon is said to have told Pepsi’s CEO, Donald Kendall. “I’ll bring Khrushchev by and we’ll get a Pepsi in his hand.”

Pepsi’s photographer got numerous shots of Khrushchev drinking Pepsi-Cola. Obviously, the Soviet leader preferred the one with Russian water, and touted its superiority over the American version, calling it “quite refreshing.” It may not have had the same cultural impact of Joanie Sommers singing “It’s Pepsi, for Those Who Think Young,” but it was no less effective. After all, in a totalitarian society like the Soviet Union, if the leader drank something, then everyone drank it. As such, Kendall was able to negotiate a fifteen-year exclusive deal with the USSR shortly after the expo ended—a deal that, effectively, shut Coke out of the Communist stronghold.

Kendall was grateful to Nixon for his role in making it happen. “We got front-page publicity all over the world, ‘Khrushchev learns to be sociable,’” Kendall recalled. “The publicity was unbelievable. It saved my job.” So when Nixon started job hunting in 1962, Kendall paid him back by giving him a very important chit to play with potential employers. He made it known that whichever firm hired Nixon would also get Pepsi, with its annual billings in excess of $3 million, as a client.

As promised, Pepsi had transferred its business to Nixon Mudge, and Nixon immediately went to work representing the cola giant’s interests throughout the world.

In one of his first major appearances for Pepsi, Nixon found himself in Dallas for a Pepsi bottlers’ convention on November 21, 1963. He had received a rude reminder of his diminished public status as he showed up in a city that was focused more on the president’s arrival the following day. In fact, Nixon wasn’t even the big cheese in his own entourage. The bodyguards stationed at Nixon’s hotel in downtown Dallas were there to protect Oscar-winning actress Joan Crawford, a member of the Pepsi board of directors and the widow of former Pepsi chairman Alfred Steele.

Despite the city’s fixation on Kennedy’s imminent arrival, Dallas wasn’t necessarily happy about the president coming to town. For one thing, Kenne- dy was highly unpopular in Dallas, as well as in Texas as a whole, and he was looking at an uphill battle to keep the state in his vote column in 1964. The Lone Star State was still a Democratic stronghold, but the party’s grip on power had been slipping for several years as voters had begun gravitating toward the Republicans. Eisenhower had won the state in both 1952 and 1956, and after the formerly all-powerful Senate Majority Leader Lyndon Johnson was elected vice president, it was a Republican, John Tower, that had won his former seat. Indeed, Nixon had actually won Dallas in 1960— garnering an impressive 62 percent of the vote there before narrowly losing the state.

In the years since the 1960 race, Kennedy seemed to have lost even more ground in the state. Most voters in Dallas, and Texas in general, distrusted the rich, preppy Kennedy and cared little about his New Frontier. Many were openly hostile to Kennedy’s embrace of civil rights and believed his administration wasn’t doing enough to fight communism. “The general opinion of the grassroots thinking in this country is that you and your administration are weak sisters,” Ted Dealey, owner of the Dallas Morning News, told the president at the White House in 1961. “If we stand firm, there will be no war. The Russians will back down. We need a man on horseback to lead this nation, and many people in Texas and the South-West think that you are riding Caroline’s tricycle.” A month before Kennedy’s trip to Dallas, his UN ambassador, Adlai Stevenson, found out just how angry many in the city were, having been hit by a placard and spit on during a protest. There were a number of demonstrations planned for the president’s visit, and Dealey himself had run a full-page ad paid for by three local businessmen in the Dallas Morning News on the morning of November 22, 1963, criticizing the president and accusing him of being soft on communism—mere hours before Kennedy would be gunned down at the plaza that was named after Dealey’s father. Stevenson had advised Kennedy against going to Dallas, and the president had seemed ambivalent about even making the trip. However, he felt an obligation to be there. Between jump-starting his reelection campaign and mediating a feud between the state’s two most powerful Democrats not named Johnson—conservative governor John Connally and liberal senator Ralph Yarborough—Kennedy felt he had no choice but to pay a visit to a state he had barely won in 1960 and would, most likely, need in 1964. Otherwise, Kennedy had no desire to be in “nut country,” as he described Dallas to his wife on the morning of his last day on Earth.

Nixon, meanwhile, was already looking ahead to 1964 and was in attack mode. Sensing that there was trouble within the Democratic ranks, Nixon stirred the pot by acknowledging rumors that Johnson could be dropped from the ticket. “But we must remember that President Kennedy and his advisers are practical politicians,” Nixon said during a press conference in Dallas on November 21, the day before Kennedy’s scheduled arrival in the city. “I believe that, if they think the race is a shoo-in, they will keep Lyndon. Otherwise, I think they’ll choose someone who can help the Democratic ticket.” Nixon couldn’t resist taking a slight dig at Johnson, pointing out that the Texas man had originally been chosen for his ability to deliver the South to the Democrats. “Now he is becoming a liability in the South, just as he is in the North,” Nixon said about the former Senate Majority Leader.

As for Kennedy, Nixon was no less critical, saying that the president had failed to deliver on his promises and had accomplished very little despite having a comfortable legislative majority. “President Kennedy’s stock is considerably lower today than it was in Texas in 1960 when I ran against him,” Nixon pointed out during his press conference. Among the reasons he listed for his erstwhile rival’s decline in popularity were persistent unemployment and the fact that Castro was still in power in Cuba.

Despite that, Nixon urged Dallas to give the president and First Lady a courteous reception. “Over-enthusiastic opponents really harm their own cause and help their opponents by showing discourtesy,” Nixon said. “On the other hand, peaceful picketing is in the American tradition.”

It was only after Nixon left Dallas and returned to New York that he realized that his words had not come true. He had flown out on the morning of November 22, 1963, having concluded his business for Pepsi, and was in a taxicab leaving New York’s Idlewild Airport (which would soon be renamed in honor of JFK) when he heard the news that Kennedy had been shot. According to Nixon, the cab was stopped at a traffic light when a random man ran over and said he heard a rumor that Kennedy had been shot and asked the cab driver if he had a radio. Nixon dismissed the man as “one of the nuts” and thought nothing of it until he got home and his doorman told him that Kennedy had been killed. Nixon recalled that he rushed up to his apartment and immediately called FBI director J. Edgar Hoover to find out more about it.

“What happened?” Nixon asked. “Was it one of the nuts?”

“No,” Hoover replied. “It was an anti-Communist.” Nearly fifteen years later, it was reported that the anti-Communist in question, Lee Harvey Oswald, had originally planned on assassinating Nixon after learning from the Dallas Morning News that he was in town, only to be talked out of it by his wife.

Nixon was shocked by the death of his longtime rival. However, in his memoirs and in interviews with reporters after the assassination, he claimed he never reflected on his own mortality—nor did he reflect on the simple twist of fate that had landed Kennedy in the White House after one of the closest elections in American history and Nixon in New York. “I never felt the ‘there but for the grace of God go I’ reaction to Kennedy’s death that many people seemed to imagine I would,” Nixon wrote in his memoirs. “I did not think of Kennedy and myself as interchangeable. I did not think that if I had won in 1960, it would have been I rather than he riding through Dealey Plaza in Dallas at that time, at that day.”

A Nixon aide had a different take. Stephen Hess, who was at Nixon’s Fifth Avenue apartment that afternoon to speak with Nixon about a possible book project, recalled that Nixon seemed highly shaken about what had happened. “He told me how he had heard it, and I did feel there was a degree of ‘there but for the grace of God go I’ there,” said Hess. Nixon then showed Hess the Dallas Morning News articles covering his press conference and asking the city to give the Kennedys a warm reception. “He tried to make the point that he had tried to prevent it,” Hess recalled. “It was his way of saying ‘Look, I didn’t fuel this thing.’”

Of course, Nixon only focused on the few sentences he had uttered encouraging Dallas to treat the Kennedys warmly without focusing on all of the stuff he had said leading up to it, including Kennedy’s lack of accomplishments, being weak on Cuba, possibly dumping Johnson, and whatnot. Others did not forget about his comments, and Pepsi received letters from outraged customers vowing never to drink their products again. While it’s unclear how many letters they actually received, Pepsi’s public relations officials saw fit to write up a form letter that they used to respond to the outraged writers:

Mr. Nixon’s statements regarding Pepsi-Cola Company were made in closed business meetings. They had nothing to do with the American political scene. It was this part of the trip—his meetings with bottlers and other executives— that was underwritten by Pepsi-Cola. His business advice is already being widely followed by the company.

It was inevitable that a national figure of Mr. Nixon’s stature would attract members of the press. It was equally inevitable that the press discussions would center around political questions, especially in light of Mr. Kennedy’s impending arrival the next day.

Mr. Nixon was interviewed as a former Vice President of the United States and a key member of the Republican Party. He was not representing Pepsi- Cola Company, but giving his views as a knowledgeable American citizen. His views, as you know, have been widely sought after in the press, the radio and on television. His comments as an American are widely respected around the world.

His ideas and thoughts about the upcoming Presidential campaigns were, in the American tradition, objective statements. He was exercising the same right of freedom of expression that you or I use when we discuss politics, and when we go into the voting booth on Election Day.

Mr. Nixon’s statements were sought after as a politician, not as a lawyer representing this company or that. And, incidentally, his firm represents some of the finest and most respected business organizations in the country, in addition to Pepsi-Cola Company. The political statements that he made were based upon the best possible news and information being circulated on the political scene at that time.

We, naturally hope that you will reconsider your decision about not purchasing Pepsi-Cola in the future. We also hope that you will consider the aforementioned facts concerning the Dallas, Texas interview.

Starting in March, Nixon undertook a three-week tour of Asia that was designed to promote Pepsi’s interests throughout the region. As would become custom during his time at the firm, his trip abroad would also include a political element, as Nixon would meet with dignitaries and diplomats while weighing in on foreign policy matters. For instance, during the first real stop on the tour, a seven-hour stay in Beirut, Nixon gave a press conference, took a tour of the local Pepsi plant while phalanxed by television and newspaper reporters, attended a reception at the home of a Pepsi bottler that was attended by various government officials and dignitaries (and also covered by local media), and filmed a video with the Pepsi bottler to be played on television. He also found time to call on Lebanon president Fouad Chehab.

Once Nixon finished up his activities in a particular city, he immediately jumped back on the plane and flew to his next destination, where he would do many of the same things he had done in Beirut on behalf of Pepsi. Nixon would be briefed before each stop on his tour, and would adjust his remarks or itinerary based on which city he was going to and what Pepsi was hoping to accomplish there. In Japan, for instance, Nixon met with Prime Minister Hayato Ikeda in Tokyo before heading to Hiroshima to dedicate a $1 million Pepsi bottling plant there. During his stay in Karachi, he posed for a lot of pictures, including a promotional shot with local bottlers standing next to a giant replica of a Pepsi bottle. On the other hand, Nixon got the opposite reception in Bangkok, as Pepsi bottlers there kept his visit low profile as they were concerned that business would suffer if it looked like the company was trying to exploit the former vice president’s visit for commercial purposes.

Meanwhile, Pepsi made sure to hold a reception at each airport Nixon arrived at or departed from so that government and business officials could speak with Nixon, as well as welcome him to their country or see him off to his next destination. Of course, Pepsi was served at each of these receptions. Nixon noted in his papers that the only time there was not an airport reception or press conference for him was in Saigon, which he attributed to the ongoing war in Vietnam.

There was also no reception in Taipei’s airport, but that was because Pepsi didn’t have any operations in Taiwan—something Nixon was there to help rectify. At that point, Taiwan (known formally as the “Republic of China”) was still recognized by most of the Western world as the legitimate government of China despite having been driven off the mainland by Mao Tse-tung and the Communists in 1949. Relations between the United States and Taiwan’s ruling Kuomintang (KMT) Party had long been complicated and marked by mutual suspicion and distrust. However, the United States had demonstrated a strong commitment to protecting Taiwan, starting in 1950, when President Truman sent the US Navy’s 7th Fleet into the Taiwan Strait to prevent an invasion from Mao’s People’s Republic of China. In the ensuing decade, the United States formalized its obligation to defend Taiwan from a PRC attack with the Sino-American Mutual Defense Treaty in 1955.

Self-defense, however, wasn’t enough for Generalissimo Chiang Kai-shek. Still smarting over losing the civil war and control of Mainland China to Mao, Chiang dreamed of retaking his former homeland, and even had secret plans drawn up for an ambitious (and some would say quixotic) invasion. Chiang knew he would need international support for such plans— especially from the United States. As such, it made sense for him to roll out the welcome mat for Nixon—a potential future president or secretary of state. It helped that the two had a warm relationship that dated back to Nixon’s tenure as vice president. Nixon had gone to Taiwan during his initial foreign tour in 1953 and had hit it off with both Chiang and his wife. Indeed, Madame Chiang had showered the Nixons with gifts and art, some of which were on display in Nixon’s Fifth Avenue apartment.

Chiang also considered Nixon to be a true ally to his cause. Nixon had long proven his anti-Communist bona fides, as well as his commitment to the ROC. After all, Nixon had launched his political career by going after Alger Hiss, and he had demonstrated his fealty with the China Lobby in the United States by pointing the finger at Dean Acheson, Truman’s secretary of state, for “losing China.” If anyone could be persuaded to support an invasion of the PRC, it would surely be Nixon—the ultimate Cold Warrior.

As a result, Chiang and his subordinates were in an accommodating mood when Nixon and Don Kendall arrived in Taipei. Pepsi had identified Taiwan as one of its best potential markets in Asia, and the company was determined to get access to its market. “The weather is unbearably hot, the local cola products are horrible, and the per capita income in Taiwan is rising at the highest rate in Asia—10 percent last year,” Nixon observed. Nixon and Kendall put forth a full-court press, requesting multiple times that the KMT grant Pepsi a franchise in Taiwan. Nixon noted in a memorandum that he brought up the Pepsi franchise during a luncheon with Vice President Chen Cheng, during a private conference with Premier Yen Chia-kan, and at dinner with Chiang and Madame Chiang. Chiang ultimately agreed and opened up Taiwan to Pepsi shortly after Nixon’s visit.

That didn’t mean that Pepsi’s trials and tribulations in Taiwan were over. In a 1965 memo to Kendall, Nixon pointed out that there were still a number of obstacles to overcome before Pepsi could start operating in Taiwan. For instance, Pepsi had to secure an import license for syrup and other necessary ingredients. Nixon, however, wasn’t concerned about getting the license, noting that the procedure was fairly routine. The big problem, as Nixon saw it, related to Pepsi’s intellectual property—particularly its trademarks. There was no problem trademarking the word Pepsi. However, Taiwan’s Central Bureau of Standards rejected Pepsi-Cola after finding that the word cola infringed on Coca-Cola’s trademark.

Pepsi had appealed the Bureau’s decision to Taiwan’s Executive Yuan (the executive branch of the ROC), but Nixon counseled Kendall not to press for a decision immediately, citing the possibility that the government would simply defer to the Bureau’s findings. Pepsi’s Taiwan attorney, Joseph Twanmoh, advised Nixon that the premier tended to accept the decision of lower courts unless he received guidance from a higher authority. Nixon advised that they wait until he had a chance to provide such guidance to high- ranking government officials, namely Premier Yen and Chang Chun, secretary general to the president, Chiang’s “closest and most influential adviser.” Nixon even went as far as to say that, even though Pepsi had secured an agreement with Coca-Cola permitting Pepsi to use cola, it would not be persuasive to ROC authorities. “The Taiwanese are very sensitive on the point that a private agreement cannot change the law of the Republic of Taiwan,” said Nixon in his memo to Kendall. “What will be more effective is reference to the fact that the term ‘cola’ is widely used in the United States by a number of so-called cola drinks and that the term is no longer considered to be a trademark which is special property of Coca-Cola alone.”

Their efforts finally paid off in June 1967, when the Executive Yuan ruled in favor of Pepsi. “After a two-year trying struggle, the battle is, at last, won,” Twanmoh wrote to Kendall. “And much of it is due to Mr. Richard Nixon’s effort and support.”