The Strong Man: John Mitchell and the Secrets of Watergate

by James Rosen

  According to published reports, Mitchell also personally telephoned Theodore A. Korontjis, the FBI legal attaché in Beirut, and instructed him to approach Ambassador William B. Buffum directly on Vesco’s behalf. To establish contact with Korontjis, Mitchell used the FBI’s communications system, again bypassing State. Ambassador Buffum reportedly “did not take kindly” to Mitchell’s methods. Incensed, the ambassador cabled Washington to ask why Vesco deserved special treatment, only to hear back that he didn’t. Queried by the State Department, Mitchell said Korontjis must have misunderstood him or exceeded his instructions.

  The Beirut episode, like the Swiss jailing incident, came to haunt Mitchell. “The genesis of this,” he later testified, “was a request from somebody over at the White House—I believe it was John Ehrlichman—that such a representation be made in connection with whatever Mr. Vesco’s activities were in Lebanon, which had, I gather, been hampered somewhat by the Swiss jailing incident.” Asked on cross-examination if he had tried to open doors for Vesco abroad, Mitchell testified it was “more to establish a fact or clear a misimpression than…to open a door.” Yet Mitchell’s claim that his overtures to Ambassador Buffum came solely at Ehrlichman’s instigation contradicted Mitchell’s corresponding claim never to have received the memo in which Ehrlichman requested such overtures; no one caught the discrepancy.13

  “Are you sure Bob Vesco is everything you represent him to be?” So a newly skeptical Mitchell greeted Harry Sears in the attorney general’s office on the morning of February 11, 1972. Sears’s reply was notably ambivalent: “Bob Vesco is my friend and I am his advocate…. I have to take this position until somebody proves I amwrong.”14

  Like all of Sears’s meetings with Mitchell in this period, the February 11 session later provoked sharp clashes of memory—and criminal charges against the former attorney general. Most important among these disputes was Sears’s claim to have informed Mitchell on this occasion that Vesco wished to contribute to the president’s 1972 reelection campaign; in typical style, the ICC chairman “wanted to be among the top contributors” to the Committee for the Re-Election of the President (CRP). “I told [Mitchell that Vesco] was talking about giving very substantial amounts,” Sears testified. Mitchell supposedly asked what Vesco had given in ’68; Sears didn’t know. Mitchell then supposedly said this was a matter for Maurice Stans, the former secretary of commerce now managing CRP’s finance committee, to handle.15

  Owlish and bespectacled, a big-game hunter and enjoyer of the finer things, the sixty-two-year-old Stans stood imperiously astride the nexus of politics and finance. As head of CRP’s Finance Committee, he was, by March 1972, well on his way toward raising $60 million for Nixon’s reelection drive, a then unheard-of sum for a political campaign and equivalent to roughly $256 million in current figures. Prior to joining Nixon’s cabinet—where Stans developed courteous, but never especially close, relations with his Watergate neighbor, Mitchell—Stans had served as President Eisenhower’s budget director. In between his government stints, Stans earned millions as a senior partner in a powerhouse New York investment banking firm, and was elected, in 1960, to the Accountants’ Hall of Fame.16

  On March 8, 1972, Vesco himself and ICC president Laurence Richardson arrived at CRP, located at 1701 Pennsylvania Avenue, across the street from the White House, to meet with Stans and Daniel Hofgren, a CRP fund-raiser. Vesco, according to Richardson’s testimony, began by saying he had contributed generously to Nixon in ’68 and wanted to do better in ’72. “But I have a problem,” Vesco said. “My company and I are under investigation by the SEC…. It’s completely without merit and amounts to a personal vendetta and harassment.” He concluded: “I want to find a way to bring the case to a conference and a settlement.” Stans, according to Richardson, replied: “Well, I can’t help you with this, but let’s see if we can get you an appointment with John Mitchell today while you are here.”

  Richardson recalled that Stans picked up the phone, but failed to make the appointment with Mitchell. “How much you got in mind to give?” Stans asked. “I want to be in the front row,” Vesco answered, his arriviste ambitions laid bare; he proposed $500,000 in two installments. Stans asked if Vesco understood the new election law. “I’m not sure I do,” Vesco replied. After April 7, Stans explained, all contributions of the size Vesco had in mind had to be publicly reported, along with the donor’s name; thus Vesco might want to make the first payment of $250,000 before April 6. Vesco agreed.

  As he and Richardson left, Vesco bragged how “clever” he had been in broaching the SEC problem; he had not asked directly for a quid pro quo for his contribution, but made plain his desires. In fact, it was the white-haired Stans who’d played the snickering Vesco for a fool. “Stans was a true professional,” wrote Vesco’s biographer. “He knew exactly where to draw that line while giving Vesco the come-on. Vesco…did in fact think he was buying influence. Although Stans did not offer any discouragement, he knew how not to transgress the boundaries of criminal liability.”17

  That same night, Daniel Hofgren strolled the corridors of the Washington Hilton, wading among two thousand tuxedoed guests at a fund-raiser for GOP candidates. At one point, Hofgren spotted a familiar face: John Mitchell, whose resignation as attorney general had taken effect a week earlier. “I recall going up to him and saying, ‘Did you see Mr. Vesco?’” Hofgren later testified. “And [Mitchell] turned around and said, ‘You stay away from that,’ and that was the sum and substance of my conversation.” Asked what happened next, Hofgren replied: “When John Mitchell says, ‘You stay away from it,’ I stay away from it.” Mitchell, of course, remembered no such conversation—and once again, it earned him a perjury charge.18

  If the Watergate era was defined by the corrupting influence of cash in the American political system, the moment when Richardson and Sears showed up at the well-appointed offices of Maurice Stans, on April 10, 1972, was paradigmatic—even if, as a jury later found, no crimes occurred. Assembled were three upright, business-suited members of “the greatest generation,” one carrying a briefcase stuffed with $200,000 in hundred-dollar bills. The meeting, like the briefcase, bulged with connotations: No one suffered any delusions the cash was being given anonymously, past the date required by the new law, because Robert Vesco believed in détente or wage and price controls.

  Ever the hustler, Vesco had had trouble rounding up the cash. In the end, he required a loan from the Bahamian bank he controlled. At ICC offices on April 7, he had scowled at Richardson: “One more thing. I have got a message for Stans that I want you to give him.” “What’s the message?” “Tell Stans to get that fuckin’ SEC off my back,” Vesco said. “Well, I will give him the message,” Richardson replied, “but not in those words.” “Be damned sure you give him the message,” Vesco persisted.19

  Now, the following Monday, Richardson placed the briefcase atop Stans’s desk, angled it toward him, and opened it just enough for the former commerce secretary to see the Ben Franklins stacked inside. “Mr. Stans, here is your currency,” Richardson said. “Do you want to count it?” Stans said that wouldn’t be necessary. Richardson closed the briefcase, set it aside, and sat down. According to Sears, seated on a couch across the room, Richardson then uncorked the genie. “Mr. Vesco wants me to deliver you a message,” Sears quoted Richardson as saying. “He’d like to get some help.” “Tell him that’s not my bailiwick,” Stans supposedly replied. “That’s John Mitchell’s department.” “Now, wait a minute,” Sears interjected, bolting from the couch. “What we brought here today is a political contribution. There’s nothing else involved. Larry, I think perhaps we better leave.” Richardson took the hint. When the two were alone, Sears was spitting mad. “Larry, what the hell is that all about?” “Well,” Richardson replied, “I really think Bob would have wanted me to deliver the message stronger.”20

  That afternoon Sears went to see Mitchell, now officially campaign manager. According to Sears, the meeting dwelt on two main topics:
Vesco’s cash contribution, delivered in the bulging briefcase to Maurice Stans in the same building hours earlier; and Vesco’s continuing desire for an audience with William Casey. Mitchell denied learning about the briefcase, but agreed the question of an audience with Casey had again arisen. “The situation is worse, if anything, as far as the SEC staff attitude,” Sears pleaded. Having shared a drink with Casey at his own Watergate apartment four days earlier, Mitchell knew this was so; the agency’s staff believed Vesco guilty of crimes. Rather than tell Sears that himself, Mitchell picked up the phone and asked his secretary to get Casey on the line. “Harry Sears is here,” Mitchell told him. “He would like very much to sit down with you for a few minutes.” Casey was free at four o’clock; Sears finally had his elusive audience with the SEC chairman.21

  To federal prosecutors, Mitchell’s brief call to Casey formed the heart of the crime, epitomized the discreet, businesslike abuse of power they aimed to punish. By all accounts, however, Mitchell, in requesting the meeting for Sears, made no mention of Vesco’s contribution. This exculpatory fact the prosecutors stood on its head: They made it the first obstruction of justice count in Mitchell’s indictment, arguing he had to keep Casey ignorant of the contribution, so as to enlist his aid in quashing the SEC probe.

  At 4:30 p.m., Sears entered Casey’s office to find the SEC chairman and his youthful general counsel, Brad Cook, the resident expert on ICC. Sears laid out Vesco’s position: The SEC’s endless subpoenas had far exceeded the original scope of the investigation; the “high emotional feelings and abrasions” between the SEC’s lawyers and Vesco’s own were certain to produce an adverse ruling that Sears did not want to see rubber-stamped by Casey and the other four commissioners. “Well, Mr. Sears, I can assure you of one thing,” Casey replied. “We don’t rubber stamp staff recommendations down here. We consider them very carefully.”

  Cook conceded that “fights” and “confrontations” had broken out during Vesco’s depositions. “But there is something that you should know,” Cook continued, “and that is that there is a very good possibility that there is no way that this case can be settled without an injunctive order. A report recommending suit…is a very likely eventuality here…. There is also a possibility in this case that Vesco may be subject to a perjury charge…. Vesco lied when he was hereon deposition, and if Vesco lied, we have to consider the possibility of a criminal referral.”

  Sears cannot have been taken entirely by surprise; by his own account, Mitchell had given him an internal memo Cook had written that said all the same things, a full sixty days earlier (another charge Mitchell denied). Still, the New Jersey politician seemed unnerved by Cook’s blunt talk of perjury and criminal referrals. Sears offered to be of help in getting the SEC whatever documents it needed, then looked imploringly to Casey: Did he have the chairman’s assurance Vesco would be permitted another opportunity to plead his case before the filing of any suits or referrals? “Mr. Sears,” Casey repeated icily, “we don’t rubber stamp anything.” The audience was over.22

  At CRP headquarters, meanwhile, Maurice Stans called in Hugh Sloan, the CRP treasurer, a young, handsome former White House aide, and gave him a white bank bag containing $200,000 in cash. Stans ordered Sloan to count it, then store it in a safe. According to Sloan, he asked his boss who the donor was. Appearing before the grand jury, Sloan testified that Stans replied: “For the time being, list it under John Mitchell’s name.” Yet a year later, testifying as a government witness at the Mitchell-Stans trial, Sloan claimed that Stans, in his reply, attributed this order to Mitchell himself, and specified the entry should not use Mitchell’s full name. “John Mitchell wants it listed under the initials ‘JM’ for the time being,” Sloan quoted Stans as saying.23

  In his ledger, Sloan listed Vesco’s contribution and the initials “JM.” To the prosecutors, Mitchell’s initials represented incontrovertible evidence of corruption. Another witness testified the use of the initials “was based on a telephone conversation [Stans] had with John Mitchell.” But Stans himself, testifying before the grand jury in March 1973, said he only told Sloan to “put [down] Mitchell because it came through his end: Sears.” Mitchell testified that he first discovered his initials appeared alongside the entry for the Vesco contribution in February or March 1973. When he found out, Mitchell testified, he growled at Stans: “What the hell did you ever do that for?” He continued: “Mr. Stans said he didn’t know…. He did not have a rationale for it.”24

  Small wonder that Mitchell, asked on the stand if he considered Stans a close friend, replied, “I believe so” or that the New York Times, observing the interaction between the defendants at their historic trial, reported: “The two men seldom speak.”25

  Vesco and Sears paid another grim visit to Brad Cook in May 1972. If it would end the SEC’s probe, Vesco said, he was willing to commence, in the parlance of the era, the “deVescoization” of ICC. Cook sternly replied that any settlement would have to include an acknowledgment of wrongdoing by Vesco, and an injunction against further violations of federal securities laws. At this, the volatile financier blew his stack. “Your investigation has been going on for a year,” he fumed, “and you have nothing!” When Cook alluded to perjury, Vesco grew angrier: “There is nothing to that! There is no way I’m going to settle the case in a way that will leave open a perjury charge.” Finally, when Cook mentioned criminal referral, Vesco became defiant: “No way, baby!”26

  Now knowing the feds considered him a criminal, Vesco soon found himself, for the first and last time, in John Mitchell’s office, where Sears “reintroduced” the two men. “John, this is Bob Vesco,” Sears said. “You met him at my dinner.” After some pleasantries, Vesco retreated to a couch along the perimeter of Mitchell’s office, while the former attorney general spent the next fifteen minutes talking politics with Sears. For all his wealth and grandiose aspirations, his infatuation with Mitchell and hunger for status and respect, Vesco, in this setting, was a zero—reduced to looking on from afar, sitting mute while his elders, masters of electoral realpolitik, conversed on a level beyond his ken.

  From Vesco’s perspective, the meeting was a bust: Sears didn’t even broach the SEC issue with Mitchell! But the financier had other cards to play. He put Nixon’s knockabout nephew, Donald Nixon Jr., on the payroll. And he called in a favor from an overseas friend. Since 1969, Vesco had quietly been funneling money to Costa Rica, where his investments, mostly in government bonds, would eventually total an estimated $60 million. Of that money, $2.15 million landed in the accounts of San Cristobal, S.A., a holding company controlled by the country’s aging president, José Figueres Ferrer, aka “Don Pepe.” A vain little tyrant—he stood five-three, got a hair transplant and facelift in his mid-seventies, and once smacked a protester who called him un hijo de puta, or “son of a bitch,” saying, “I’ll teach you respect”—Figueres was only too happy to help his rich gringo patron when Vesco asked.27

  Thus on July 22, 1972, President Figueres wrote to “Your Excellency Richard M. Nixon” saying he was reaching out “in the spirit of good relations which exist between our two countries.” Figueres said Vesco’s largesse “may provide the ingredient that has been lacking in our plans to create…a show piece of democratic development.” Then came the pitch, president to president.

  Mr. Vesco has had difficulties with the Securities and Exchange Commission, because of his past association with the I.O.S. Ltd. Mr. John Mitchell, your former attorney general, is familiar with the matters. I am concerned that any adverse publicity emanating from the S.E.C. against Mr. Vesco might jeopardize the development of my country…. If we are apprised in time, we may take precautions to counter the adverse effects.

  Figueres had not asked Nixon to do anything more than provide advance notice in the event the SEC moved against Vesco; but the implication was plain: If the SEC took down Vesco, Costa Rica’s fledgling democracy might crumble too, leaving only Latin American communists to benefit! Figueres had also dropped M
itchell’s name, insinuating that Nixon’s most trusted confidant supported the Vesco cause. Yet the letter never reached the Oval Office. Vesco later told Sears that proud “Don Pepe” received only a “cryptic, unsatisfactory” response from “some low-level White House staff.” Vesco’s stab at international diplomacy had failed.28

  That month, SEC lawyers concluded Vesco and his corporate cronies were guilty of “looting” ICC’s companies on a massive scale: Assets had been shifted, shell companies created, controlling interests, supposedly relinquished, secretly maintained. Where SEC lawyers focused originally on the takeover of IOS and the veracity of Vesco’s sworn statements, they now saw larceny on an unprecedented scale, with investors across the globe losing their savings so Vesco could jet around in his Boeing 707, The Silver Phyllis, outfitted with the world’s only airborne sauna and discotheque.29

  On September 29, 1972, the SEC summoned Vesco for an October 11 appearance. Vesco immediately suspected the feds were wise to his contribution to CRP, or at least to the unexplained movement of $250,000 in cash. Sensing the end was near, Vesco flew into a rage: “Those bastards would like nothing more than to nail me and the president to the wall together,” he ranted. “There’s no way that I’m going to testify…. It’s going to be blown up like the ITT affair. Nixon may survive some of the other things but this would be the crusher.”

  Since suasion and $200,000 in cash hadn’t got him anywhere, the furious financier turned to blackmail. Perhaps the very thing that most imperiled him could prove his salvation. He told Sears: “Get hold of Mitchell and those guys and tell them that they will have that thing quashed or I’ll blow the lid off the whole thing.” Sears left the room “angry” but, still indebted to Vesco, agreed to see what he could do.30