Watergate Plus 25

Still Following the Money
A Scandal Like No Other
in 20th-Century American History

By A.V. Krebs

Republicans, before they go positively euphoric over the daily revelations of the Democrats and Bill Clinton's White House bed-and-breakfast campaign funding scam, would be wise to not forget that June 14 is only a very few weeks away and the nation is assuredly to be again reminded of the GOP's "day of infamy" 25 years ago.

It was on that late spring Saturday evening in Washington, D.C., on the banks of the Potomac River, that the name Watergate would emerge as more than just the name of a high-price apartment-office complex, but would come to symbolize greed, political corruption, subversion of the Constitution and the makings of a scandal like no other event in 20th century American history.

History may ultimately come to view the scandal that resulted from the break-in of the Democratic National headquarters at the Watergate the night of June 14, 1972, and the infamous efforts to cover up that crime by Richard Nixon and "all the President's men," which led up to his eventual resignation in the face of impeachment proceedings, as nothing more than a sham.

The real scandal, which Watergate only threatened to expose, may be yet to be stripped bare.

Ignored by the news media at the time, the novelist Renata Adler, a friend and adviser of John Doar, special counsel and head of the House Judiciary Committee's impeachment inquiry staff, raised the possibility in a December 1976 essay in the Atlantic magazine that the grounds for impeachment of Nixon may have been closer to "Treason [and] Bribery" than "high Crimes and Misdemeanors."

In her essay, "Searching For the Real Nixon Scandal: A last Reference," Adler examined the circumstances of the impeachment inquiry with facts later exposed by the 1976 Senate Select Committee on spy activities headed by Sen. Frank Church.

After examining various legal theories upon which to base the impeachment articles for "Treason, Bribery, or other high Crimes and Misdemeanors" -- the only grounds on which a President can be impeached -- Adler relates that various and sundry theories based around the "high Crimes and Misdemeanors" clause "led to the ultimate argument for impeachment, and to the form of the Articles themselves."

But, she argued, "in spite of Nixon's departure, nothing was resolved, or laid to rest. The impeachment inquiry did what it could and the President was removed. But we were, I think, of legal and political necessity at the tip of the wrong iceberg.

"The story that required the end of the Nixon presidency, I think, was not Watergate -- or even 'other high Crimes and Misdemeanors.' It was Treason and Bribery . . . I think it is the bottom line. It has brought a disorientation beyond reckoning. People died for it. We are going to have to live, I think, with that."

In The Haldeman Diaries by H.R. Haldeman, Nixon's chief of staff, insists that the Watergate cover up was motivated primarily by "containment." In her essay Adler also points out that the problem for the White House was never burglary of the Watergate. The problem was the source of the cash for the burglars. As soon as hundred-dollar bills in the possession of the burglars had been traced via Bernard Barker's bank account to Mexico the course of events was set."

That discovery alerted the House Committee on Banking and Currency, chaired by Rep. Wright Patman, a Texas Democrat. That committee, unlike any subsequent investigating body or investigative reporters, took the words of the famous Deep Throat quite literally: "Follow the money!" Patman's committee also knew where to look, since in late 1969 and early 1970 it had held hearings concerning secret, numbered foreign bank accounts in Switzerland, the Bahamas and elsewhere, principally those accounts that belonged to organized crime.

Nixon immediately dispatched Gerald Ford, then the House Minority Leader from Michigan, to convince the Patman committee that an investigation at that time into the source of the burglars pay would "not only jeopardize the prosecution" of the burglars but also would "seriously prejudice" the defendants' rights. Patman later told journalists Frank Fox and Steven Parker "Gerald Ford was asked by the president to get with [John] Connally to get something on me."

By October 31, 1972 the Patman hearings were suspended. It was Ford, of course, who would later become Nixon's vice-president, succeeded him after his resignation and would eventually pardon him from any wrongdoing.

Curiously, in light of what is now being called "the best documented corporate crime in American history" -- price fixing in the corn derivative industry by Archer Daniels Midland -- the first solid link between the Watergate burglars and the Nixon campaign committee came when ADM's CEO and chairman Dwayne Andreas' contribution of $25,000 to Nixon fund raiser Kenneth Dahlberg ended up as a cashier's check in the bank account of Watergate burglar Barker. Later, when questioned about the fact that it was his money Andreas shrugged it off with the remark, "It was like being crapped on by a bird. It didn't bother me a bit."

Patman's committee staff, prior to the suspension of the hearings, had made little headway since they had no subpoena power. But, as Adler notes, even without subpoena power, the staff had found "enormous irregularities" in the bookkeeping of, among others, Hugh Sloan, the treasurer of the Finance Committee to Reelect the President (CREEP).

"The staff had also," she points out, "almost incidentally, discovered a campaign contribution to CREEP via the Banque Internationale à Luxembourg. There was so much cash and so much irregularity, though, that without the power to subpoena records or to take testimony under oath, the committee lost the trail."

Later, in hearings before Sen. Sam Erwin's Senate committee, in testimony by Maurice Stans, CREEP's Finance Chairman, it was noted that a $30,000 cash contribution from a "Philippine national" had been ordered returned by Stans. Stans, however, told the committee that he learned since from a Justice Department official that it would have been "perfectly proper" to accept that money from a foreign national "so long as he is not an agent of a foreign principal."

"It would not," Adler comments, "as it turns out, have been 'perfectly proper' to accept a campaign contribution from a foreign national. It would have been illegal."

Adler also wonders why Stans would testify at such length about a sum so trivial as $30,000? Four volumes later in the Erwin committee hearings there is a possible answer to Adler's question. Fred Larue, an assistant to CREEP chairman John Mitchell who had paid some of the hush money to the burglars, revealed that he had not been asked to return any money to any source until less than a month before the Erwin hearings began and a full year after Stans had said it was to be returned.

In a subsequent acknowledging letter from Stan's attorney to Larue's legal counsel, introduced in the hearings, it was also revealed that the money was "paid" to Anna Chennault, for "return to foreign nationals" -- nationality, Philippine or other, unspecified.

The aforementioned $30,000 only attracted attention because it had been part of the $81,000 in cash that Sloan was stuck with when the source of the cash in the possession of the Watergate burglars had been traced to checks endorsed by the Mexican lawyer Manuel Ogarrio.

That $81,000 first got the attention of Patman's staff after they had coincidentally discovered that $700,000 in cash had come to CREEP in a suitcase, from an American corporation by way of Mexico. The staff, as Adler writes, "was at first misled into thinking that the story had to do not with contributions by 'foreign nationals' but with donations by American corporations and citizens (illegally and in secret) by way of foreign banks.

As it turned out, she said, the story involved both Americans and foreign nationals and "there are anomalies great and small, everywhere one looks."

One domestic example was that in 1975, a year after Nixon resigned, the Committee to Reelect the President, now renamed the 1972 Campaign Liquidation Trust, was reporting to the Federal Election Commission an interest income of $80,000 a year. For campaign funds that usually end in deficits, $80,000 interest income, in Adler's words, "reflects a lot of capital -- which raises the question of who or what has that money" three years after the Presidential campaign in question.

Adler suggests later on that the large loans that Nixon received after he left office from friends Bebe Rebozo and Robert Abplanalp were never loans "in the normal sense," but were "if one pursues the records" simply "his own" which he could not, "for one reason and another, reach any other way."

In getting to the heart of her argument that the real scandal of the Nixon Administration was "bribery and treason" she cites some of the oddities that have turned up in the files of CREEP and the Federal Election Commission.

For example, on February 27, 1973, three months after the Presidential election, an entity called the "Committee of United States Citizens in Asia for Nixon" first filed a report with the FEC. The answers to several questions on the reporting document are curious.

(A) "Will this committee operate in more than one state?" Answer: "No -- only internationally outside the U.S."

(D) "Will it support a candidate for President or Vice-President in the aggregate amount of $1000 or more during the calender year?" Answer: "Yes."

(E) "Does this committee plan to stay in existence beyond the current calender year?" Answer: "Yes."

(F) "If so, how long?" Answer: "Perpetually."

Under "Name of bank, repository, etc" the reply is "none" and "List all reports required to be filed by this committee with states and jurisdictions" is answered by another "none."

Within a month this "Committee of U.S. Citizens in Asia for Nixon", which initially talked about staying in existence "perpetually," (!!!) would notify the FEC that it was no longer able to claim contributions in excess of $1000. However, despite the request that it be allowed to cease to report, it did seek "the approval of your office to cease reporting, until such time in the future as we may have receipts in excess of $1000."

An alarmed Adler wrote: "That a Nixon campaign committee in Asia should reserve to itself the possibility of such receipts at a 'time in the future' raises questions about which one does not care to speculate."

There was one other troubling aspect to the committee's February 23 report to the FEC. Under a question asking for the identity of the Committee's "custodian of books and accounts" there is listed "Marshall Hendricks, Lewis Burridge and Anna Chennault." In its Statement of Affiliated and Connected Organizations, the Committee listed: "(a) Committee of United States Citizens in Hong Kong for Nixon (b) Committee of United States Citizens in Japan for Nixon (c) Committee of United States Citizens in Korea for Nixon," and so on.

Anna Chennault was a familiar name in Washington, D.C., ever since the end of World War II. The widow of Lt. Gen. Claire Chennault of Flying Tiger fame, and whose Civil Air Transport would become a Central Intelligence Agency proprietary, she had been a dedicated anti-communism crusader in America. A long-time personal and political friend of Nixon, she had in 1968 operated as a clandestine channel between Nixon and the GOP and Nguyen Van Thieu, the U.S.-backed South Vietnamese strong man. She had convinced Thieu, at Nixon's urging, to pull out of peace talks in Paris prior to the 1968 election, thus helping to ensure Nixon's victory over Hubert Humphrey in the presidential race that year.

Parenthetically, as Hearst Newspaper columnist Robert E. Thompson wrote in May 1991, "if you substitute the [1980 Iran] hostage crisis for the Vietnam War, the circumstances in 1980 were similar to those in 1968."

In 1973 Nixon, in an attempt to get former president Lyndon Johnson to use his influence to "turn off" the Democrats' investigation of the Watergate cover-up, threatened to expose the fact that the Johnson Administration in 1968 had learned of the Chennault-Thieu connection by an "illegal" wiretap surveillance. But Johnson, not uncharacteristically, "got very hot," according to the Haldeman diaries, and promised he would "release [deleted material -- national security], saying that our side was asking that certain things be done." It is one of the two or three places throughout the entire 675-page Haldeman diaries that material has been "deleted" for "national security" reasons.

Adler reminds us also that just as it appeared in 1968 that a peace agreement might end the war in Southeast Asia so also in 1972, just two weeks before the U.S. presidential election, Secretary of State Henry Kissinger was saying of Vietnam that "peace was at hand." Yet, in the weeks to follow there was the unprecedented bombing and mining of Haiphong Harbor.

"One cannot help thinking back on 1968," Adler observes, "and believing that, in 1972, there must have been a deal . . . After all that, in January 1973, when the accords were signed, the terms were in no substantial way different from the ones Henry Kissinger had gotten, months earlier, when he genuinely thought peace was at hand."

She continues:

"Turning away from detail, one is struck by the logic overall. It does not make sense, for example, that the President's fund raisers would put by far the greatest pressure of any political campaign in our history on so many sources, individual and corporate, and reject a contribution from the most logical of them all: the administration of South Vietnam, which had the most to lose if the President's opponent . . .actually won.

"Nixon" she adds, "never seems to have felt any diminution of need for campaign contributions. In the fall of 1968, the South Vietnamese had only to dig in their heels and wait, while the war cost Humphrey the election. By the fall of 1972, if they wanted the support of the Administration, I think they had to pay.

"Unlike Watergate, unlike Rebozo, or [Howard] Hughes, or the CIA, or any previous administration in our history," Adler laments, "such a bribe and the taking of it would have cost not just the American taxpayer's money but his sons. And if the South Vietnamese government was bribing an American President, with American money, to keep our investment and our boys there any longer than was necessary, it is not to be borne. And that's what I think they did."

Adler notes that "premonitions of what I think must have happened in 1972" first came to light at the Patman hearings on secret foreign bank accounts when the Committee in 1968 found "kickbacks by Vietnamese importers to American exporters, involving a huge U.S. corporation" using Swiss bank accounts.

"In thinking about international political contributions," Adler reasons prophetically, "with the . . . revelations of payments by American companies to foreign officials in Europe, Asia, South America, and the Middle East, it began to seem highly probable in the very nature of secret cash transactions that some of that money was going to find its way back; and/or that some foreign interests rich enough to afford it were going to lobby, with cash, in America."

As a postscript, the Associated Press-Dow Jones News Service recently reported that "trade and foreign policy professionals say China fares best when it stays in the background and lets U.S. businesses take the lead in promoting their mutual interests. Corporate America has hired lobbyists to urge favorable trade status for Beijing, underwritten trade missions and fact-finding trips for U.S. officials and enlisted the help of former diplomats, even a former president, to open doors."

It adds, however, "the investigation into whether China tried to buy influence in Washington has overshadowed Beijing's most effective lobbying force: U.S. businesses eager to tap the world's largest market."

Foreign officials "using" American money and corporations to lobby the U.S. government in their own best interests? One can only wonder where that idea came from.

News | Current Issue | Back Issues | Essays | Links

About the Progressive Populist | How to Subscribe | How to Contact Us

Copyright © 1995-1997 The Progressive Populist