The Arrogance of Power

by Anthony Summers

  Nixon’s response to the allegations that had been made, moreover, were less than accurate. It was not true that “not one cent” of the fund money had gone to his personal use. One of the contributors, interviewed by the press, revealed that the appeal for funds had been pitched in part on the grounds that the Nixons needed a larger home and were “so poor they haven’t got a maid.” Nixon had indeed put twenty thousand dollars down on a forty-one-thousand-dollar Washington house soon after becoming senator, and had hired an interior decorator to refurbish it in style. He even admitted to one reporter that without the fund he could not have made the down payment. (The Nixons had also acquired a full-time maid.)

  Later reports commented archly on the apparent increased prosperity of the extended Nixon family, including the fact that Nixon’s brother Donald—by now running both his parents’ former grocery and a drive-in restaurant—was talking of setting up another restaurant on land owned by a contributor to Richard’s fund.

  In the Checkers speech Nixon had also made much of the claim that every cent of fund cash had been spent on items he thought should not be charged to American taxpayers. This defense ignored the fact that the money had gone toward purchases that could not legally have been charged to the taxpayers in any case. He had told a newsman that while in Washington he had no income except his Senate salary. This was not true: Money from the fund aside, Nixon had earned $6,611.45 from speech-making fees—about $44,000 at today’s rates and about half as much again as a senator’s salary in those days—in 1951 alone.

  The fund money admitted by Nixon and formally audited may in fact not have represented the only fund in existence or all the money. When journalists first interviewed fund organizer Dana Smith before the story broke, one of them spotted on his desk a sheet of paper headed “Nixon Fund No. 2.” Another journalist discovered that Smith had paid a bill for Nixon using checks on two accounts: the trust fund and a special account. Later still it was reported that three separate funds were involved.

  These leads were never investigated, nor was the remark made by one of the fund’s contributors to a journalist that “we’ve been paying his expenses for sometime now.” No one knew then that as revealed in this book,* Nixon had let it be known to his supporters as early as 1946 that he could not live on a congressional salary and needed “a lot more than that” to match what he could expect to make as an attorney. The response of his big business backers, as described by corporation financial officer William Ackerman, had been to make a long-term financial commitment.

  In 1952, as in the past, the driving force behind Nixon’s campaign was Murray Chotiner. Years later Chotiner admitted that the fund had been his idea, with Dana Smith. He saw it as “a necessary source of the money Nixon needed to advance his career.”

  The seventy-six known fund contributors were as the New York Times put it, “an abbreviated Who’s Who of wealthy and influential southern California business figures.” Most reportedly were big-league millionaires, the majority being from the world of real estate, followed by oil magnates and manufacturers.

  Why did they reach into their pockets? Smith, the fund’s organizer, was disarmingly open about their motives when he first met with reporters before the scandal broke and damage control began. “We realized,” he said of Nixon, “that his salary was pitifully inadequate for a salesman of free enterprise for his people in California. . . . [Earl] Warren never has gone out selling the free enterprise system. But Dick did just what we wanted him to.”

  No one seriously questioned another of Nixon’s assertions: that none of the fund contributors had ever asked for or received a special favor in return. Again, that representation was less than the truth.

  Solicitations for money had begun within a week of Nixon’s election to the Senate. Two of the oilmen who responded were Tyler Woodward and William Anderson, who had been unsuccessfully trying to get clearance to drill for oil on government land in California. A dairy industry man who contributed, Alford Ghormley, wanted continued restrictions on European cheese imports. Others, including savings and loan executive Joseph Crail, Morgan Adams (chairman of a mortgage corporation), and the Rowan brothers (real estate brokers), all were vocal campaigners against public housing.

  Within months of arriving in the Senate, Nixon had introduced a bill designed to allow precisely the sort of oil exploration that Woodward and Anderson wanted. He voted for strict limits on dairy trade with Europe, in contrast with his usual record of support for aid to the Continent. He was outspoken in opposing an increase in public housing, and voted for an amendment to a tax bill that favored building and loan associations.6

  “Never, so far as the people that contributed to this fund are concerned,” Nixon said in the Checkers speech, “have I made a telephone call for them to an agency.” Here, again, he was skirting the truth. In February 1952 he had reportedly telephoned the secretary of the air force, Thomas Finletter, to arrange an interview for the head of Hammond Manufacturing. Hammond’s bid for a half-million-dollar contract, previously rejected, was accepted soon afterward. The manufacturer was not known to have contributed to the Nixon fund, but he was a registered client of the law firm of which Dana Smith was a partner.7

  Smith was a friend of Nixon’s, and had often played host to him in his home. Not only did he manage the fund, but he and his law partner were contributors. He had also received two favors from Nixon, both of which place in doubt Nixon’s claim that he had never phoned or “gone down to an agency” on behalf of his financial supporters. One of these episodes is an instance of questionable behavior, while the other suggests serious deception.

  _____

  Not six months into Nixon’s Senate term Smith had written to him asking for help with a long-standing tax problem, a wrangle with the IRS involving more than half a million dollars. The letter got results, including a meeting with Nixon in Washington and a phone call by Nixon’s administrative assistant to arrange a half-hour interview with an IRS attorney. The outcome was “progress” for Smith with his tax problems, and eventually a settlement was reached.

  In early August 1952 Nixon had written on Smith’s behalf to the State Department, a curious intercession given that the matter concerned a gambling debt, a mob-run casino in Havana, Cuba, and controversy about the involvement not only of Smith but of Nixon himself.

  Nixon’s letter, according to the State Department, stated that Smith was “a highly respected member of his community” and that “the Senator would appreciate anything which the Embassy might be able to do to assist Mr. Smith in his problem.” The enclosure, a letter from Smith himself, explained the nature of the problem. The previous April, on a visit to Havana’s Sans Souci casino, he had lost forty-two hundred dollars—more than twenty-five thousand dollars in modern terms—while playing a dice game. He had then written a check to cover the losses, but subsequently put a stop on it. The casino management was considering legal action to recover the money.

  Since it came from a senator, Nixon’s request received attention. In Havana it was handled by the ambassador himself, who ordered local diplomats to respond immediately, within hours if possible, and department records show that they did so. They obtained a legal opinion from an outside attorney to answer Smith’s queries as to whether the game in question was legal in Cuba and whether Smith would be held liable for the debt under Cuban law. The attorney responded with a yes on both counts.8

  Later, when it emerged that Nixon had pressed the government to help his friend, his staff downplayed the story. An aide acknowledged that he had written the letter, while insisting that it had been a “routine service for a constituent.” Later still his office claimed that the letter had in fact been written and signed by a secretary—an odd procedure, if true—and that Nixon did not know it had been sent or indeed anything at all about the case. The senator’s staff was doing everything possible to disassociate him from Smith’s run-in at the Sans Souci, and for good reason.

  On October 30, a month after
Nixon had survived the fund crisis and just days before the presidential election, the St. Louis Post-Dispatch added an intriguing detail to the affair: Nixon, it said, had been with his friend Smith at the Havana casino the night of the gambling incident.

  While “in Miami on a combined holiday and political trip” and staying at the exclusive Quarter Deck Yacht Club on Pirate’s Key, the paper reported, the two men had “decided to visit Havana,” an hour’s trip away by airplane. To take care of the embarrassing matter, Smith had since been trying to settle the dispute by offering to pay half the sum owed. The casino operator, Norman Rothman, was insisting on full payment.

  When others in the media picked up this story, Nixon demanded an immediate retraction. He had not been in Havana, he maintained, in the past ten years, a reference to his 1941 vacation trip with his wife.* At the time in question, he was later to claim, he had been in Hawaii.

  While Nixon’s denial cited his whereabouts for the period “from March 14 through April,” it is not clear exactly when Smith got into trouble in Havana. The Post-Dispatch story did not specify the date any more closely than “March or early in April.” Moreover, the information as to when Smith wrote his check and when he stopped it is conflicting.9

  Fresh study meanwhile indicates that the evidence that Nixon was in Havana with Smith cannot be easily dismissed. The reporter who wrote the St. Louis Post-Dispatch story, Theodore Link, was a distinguished journalist with thirty years’ experience and relevant qualifications. His articles on corruption in the IRS had recently led to the resignation of President Truman’s attorney general and won his paper a Pulitzer Prize. He had been praised by the Kefauver Committee on organized crime for providing vital leads on “the underworld, conniving politicians, and corrupt law enforcement.” He also had extensive contacts in the criminal world of Miami, the segment of the mob primarily involved in running Cuba’s casinos.

  Information now available reveals that before writing his story, Link interviewed the manager of the Quarter Deck Yacht Club, Warren Freeman. Freeman confirmed that he and Richard Danner, Nixon and Bebe Rebozo’s mutual friend, had “squired” Nixon and Smith during their visit; Nixon was known as a freeloader who habitually let others pick up the tab. Freeman confirmed to Link that Nixon had indeed accompanied Smith to Havana.

  Separately Link located five witnesses who said they had seen Nixon at the Sans Souci with Smith. He had not gambled or drunk to excess, while Smith had been “lurchingly drunk.”

  After Nixon complained about the stories that placed him in Havana, moreover, the Post-Dispatch sent Link to interview the man himself. Nixon, he said, proved to be “chiefly sore at two other newspapers which had intimated that the gambling trip involved some girls. We had made no mention of any women. Nixon agreed that all the facts we printed were correct.”

  Mercifully for Nixon at the time, the published facts did not include the ominous element at the heart of the Cuba trip story, organized crime.

  _____

  Two years after the 1952 election, when Nixon was well into his first term as vice president, Sans Souci operator Rothman met with a Pennsylvania district attorney, Horace Culbertson, and stated “categorically” that Nixon had indeed been in Havana at the time of the Dana Smith episode and had been gambling. Later still, in other interviews with law enforcement officers covering a range of matters, Rothman said that while Smith had written the offending check, on a 1950 Nixon campaign account, it had been Nixon who actually lost money that night.

  Even more troubling was Rothman’s assertion that he had covered up for Nixon, falsely telling a journalist in 1952 that Nixon had not been with Smith. In the months that followed, he claimed, he had shielded Nixon by avoiding giving testimony in the lawsuit against Smith. In response, he said, Nixon had sent him a message of thanks through a fellow member of Congress.10

  Norman Rothman was a significant player in the organized crime apparatus that ran gambling in Havana. The casino he ran, the Sans Souci, was Cuba’s classiest gaming palace, located in the heart of the Country Club district, home to the capital’s elite families. Just weeks before the Dana Smith incident, the dictator, Fulgencio Batista, had returned to power. The American mafiosi who owned him, and filled his Swiss bank accounts, had already been flourishing. Now they virtually controlled Cuba.

  If the likes of Dana Smith or Richard Nixon wanted to sample Havana’s swankiest nightlife, the Sans Souci and the Hotel Nacional were the places to visit. Patrons of the Sans Souci, most of them Americans over from Florida on brief excursion trips, dined, danced, and gambled on a twenty-five-acre spread set with lush tropical vegetation enhanced by thousands of towering palm trees. Rothman ran the place for the Mannarino brothers of Pennsylvania, who were associated loosely with Florida mobster Santo Trafficante, but always in thrall to the organization’s business brain, Meyer Lansky. Lansky, through his brother, Jake, was the power at the Hotel Nacional.

  In Cuba and much farther afield, Lansky had become the most influential figure in moving organized crime away from the old-style extortion and mayhem to the penetration and sophisticated control of legitimate businesses and officialdom. In probing Nixon’s possible links to gambling and to Cuba—and specifically to the Dana Smith embarrassment—Lansky’s name crops up again, as it has repeatedly in connection with Bebe Rebozo.

  The most authoritative study of Lansky was written by the Israeli journalist Uri Dan, working with two colleagues in the seventies, when Lansky was living in enforced exile in Tel Aviv. In their book, which drew on exclusive interviews with Lansky and his longtime intimate Joseph Stacher, they cast new light on the Dana Smith affair that would have pleased neither Nixon nor his fund organizer. Lansky, they learned, knew Smith “very well,” well enough to contact him years later, during the earliest discussion of assassinating Fidel Castro.11 The authors were also told that Nixon had been one of a group of men who accompanied Smith to Havana the year he hit a losing streak. One of the group was Rebozo’s associate Dick Danner, and other information suggests Rebozo himself was on the junket.

  “The really close friendship between Nixon and Rebozo,” said former IRS operative Norman Casper, “began in Cuba.” Casper, a Republican supporter who met Rebozo in the relevant time frame and on occasion did background checks for him, gained that impression from a conversation with a gambler friend who often visited Havana during the Batista period. The gambler, Arch Horner, told of seeing Nixon and Rebozo together in Havana at the Hotel Nacional in the early fifties. “I think Horner was either at the same table or at one nearby,” Casper recalled in a 1999 interview, “because he described watching Nixon. Nixon was gambling pretty heavily. And, from a relative who worked in the cage, Horner said he learned that Nixon lost thousands of dollars—I think he said fifty thousand dollars—and Bebe picked up the marker on it. Bebe bailed Nixon out.”

  Newly released testimony appears to dispel doubt that Nixon, the strictly raised Quaker, indulged in gambling. In 1967 Max Courtney, one of three notorious bookmakers known to have worked for Lansky, appeared before a commission probing gambling in the Bahamas—in connection with Lansky’s attempt to re-create his lost Cuban casino empire in the islands. Courtney had been hired by a Lansky associate to run a Nassau casino, he said casually, because of the extensive U.S. clientele he had, “from the ex-Vice President down.” In 1967 “ex-Vice President” could mean only Nixon.

  In a recent interview a second former investigator offered further allegations about Rebozo’s background as well as a startling claim about Nixon and Lansky’s people in Cuba.

  “Rebozo,” said Jack Clarke, a former OSS operative and a source of information on organized crime in the period, “was involved in Lansky’s gambling. Lansky ran gambling illegally in Harlandale, Fort Lauderdale, and the areas east of Miami, and Rebozo was involved. He was tight with Lansky. . . . In 1951, when I was doing an investigation in the Miami area, Rebozo was pointed out to me at the racetrack by one of the hotel owners. He said, ‘He’s one of
Lansky’s people. We try to keep the Jews [Jewish criminals] out of Lauderdale. Rebozo’s a pimp for them.’ . . . When I checked the name with the Miami police, they said he was an entrepreneur and a gambler and that he was very close to Meyer.”

  An FBI document released in 2000 cites an informant who emphasized Rebozo’s involvement, with Nixon and others, in business ventures in Cuba during the Batista period. “Rebozo,” according to the informant, “fronted for the Italian money.”

  Later in the fifties, Clarke recalled, he stumbled upon Nixon’s name while doing a black bag job, pilfering documents in an office at Havana’s Hotel Nacional in connection with an unrelated investigation. “I was in the accounting office, looking for something on a fellow whose name began with P and going through the file alphabetically. I couldn’t find it, and I went back further and came up with ‘Nixon.’ I took a quick look and snatched it. It showed that when Nixon stayed at the Hotel Nacional, which Lansky owned, they comped the whole deal—paid his bill. And it was the presidential suite, before he was really anything. The guy that signed the register, that authorized comping him, was Jimmy ‘Blue Eyes’ Alo.”12

  Vincent Alo, known always as Jimmy, came out of New York, as did Lansky, and became Lansky’s trusted henchman. The criminal fraternity quickly learned that when Alo issued an order, it came from Lansky himself. Interviewed in Hollywood, Florida, in 1997, still sprightly at ninety-four, Alo remembered having been aware that Rebozo handled money matters for Nixon. Alo was involved in the management of the Hotel Nacional. What of the suggestions that Nixon had a relationship with Lansky? “He met him in Havana,” Alo acknowledged, “in the old days,” by which, he explained, he meant the fifties. He would say no more.

  Using his mob contacts, veteran organized crime specialist Hank Messick was told only that Lansky was “impressed” by the Havana gambling incident involving Nixon and Dana Smith. In 1948, said his close associate Joseph Stacher, Lansky and Charles “Lucky” Luciano “had hoped fervently that Tom Dewey would win the presidency for the Republicans.” “Meyer and Charlie,” said Stacher, “were certain Dewey would accept financial support from them, and in return they would be allowed to operate their gambling without much interference.” “In evaluating Nixon,” Messick wrote, “Lansky could not fail to note that it was Governor Dewey of New York—having abandoned his own ambitions—who sponsored Nixon for Vice President in 1952.”13