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Poisoning The Press

Page 7

by Mark Feldstein


  The next year, in June 1958, Anderson revealed that President Eisenhower’s chief of staff had collected bribes from a disreputable Boston businessman. Although Nixon was not implicated in the corruption, he helped spearhead the administration’s counterattack by drafting rebuttals to newspapers carrying the “Merry-Go-Round” and having his staff investigate who was leaking to Anderson. Despite the Vice President’s attempts at damage control, however, Anderson’s exposé dominated the news for weeks. Behind the scenes, the legman helped orchestrate House hearings and planted “potent questions” with Democratic congressmen to sharpen their interrogation of witnesses.

  Anderson later acknowledged that his crusade was designed to strike “a mighty blow” at the respectable “façade that Richard Nixon was about to inherit” from Eisenhower and “redeem at one last roll our blunted offensives” against the Republicans. Anderson and Pearson tried to link Nixon to the scandal by drawing a connection between the lavish presents White House chief of staff Sherman Adams had received as payoffs and those the Vice President acquired on his many trips abroad. The “Nixon home is studded with gifts from foreign governments,” the journalists wrote, including “a teakwood chest inlaid with mother-of-pearl” and so many expensive Oriental rugs “in their new 22-room house overlooking Rock Creek Park that they even put them outside on the veranda.” Unlike Adams’s booty, Nixon’s was perfectly legal because no special favors were performed in return. But the muckrakers argued that the Vice President’s spoils came “indirectly from the American taxpayers” because Nixon’s benefactors “are heavy recipients of American aid . . . So when you see old Sherm [Adams] squirming over his gifts, you have to remember that he has precedent in very high places.”

  Nixon and the Republicans were soon able to change the topic by implicating Anderson in a scandal of his own. In July, the newsman and a Democratic congressional investigator were caught with bugging equipment in Washington’s Sheraton-Carlton Hotel while clandestinely recording the Boston businessman who had bribed Adams. Police were called to the scene and newspapers across the country plastered Anderson’s photo on the front page below banner headlines. The Washington Post, which had heavily promoted the reporter’s recent scoops, now published an editorial expressing “revulsion amounting to disgust” at his surreptitious newsgathering. The New York Journal-American denounced the bugging as “grotesque” and “offensive to the American sense of fair play.” Despite pressure to fire Anderson, Pearson stood by his legman, but the columnist confided in his diary that it was a “very embarrassing situation” made worse because “Jack had registered in the [hotel] room under an assumed name.”

  The White House immediately seized on the incident to divert attention from its own corruption scandal. Vice President Nixon instructed his staff to “get a congressman or senator”—later modified to the Republican National Committee—to ask leading journalistic organizations “whether they approve of Pearson’s ‘bugging’ technique as a means of acquiring news.” Nixon aides also dispatched two GOP congressmen to “raise question of violation of federal law,” including the “false registry of Anderson” at the hotel. In turn, a senior Republican congressman obligingly blasted the “disgraceful” conduct of “snooper” Anderson and demanded a grand jury investigation. The Vice President’s staff informed Nixon that it had planted “letters to editors of all newspapers handling Pearson columns as a follow-up to the attack here.” Anderson was publicly vilified as a “Peeping Tom.”

  At the same time, the White House began pressuring the Justice Department, led by the Vice President’s close political ally, Attorney General William Rogers, to launch a criminal probe of Anderson. The reporter soon received a subpoena to appear before a grand jury. Anderson’s sworn testimony was marred by so many convenient bouts of memory loss that a prominent opposing counsel labeled it “the greatest morass of concealment, dissemblance and demonstrable perjury to which I have ever been exposed in a courtroom.” Indeed, Anderson later admitted that he deliberately feigned amnesia on the witness stand to protect his sources. “Everybody knew I was lying,” the reporter cheerfully recalled, “but I knew I could get away with saying ‘I don’t remember.’ ” According to a confidential FBI informant, Anderson also paid off a key witness in the case with “four or five $50 bills” plus another thousand dollars for expenses.

  Meanwhile, Pearson began an aggressive counteroffensive, thundering in his column against “the uneven-handed justice now being meted out by the Justice Department,” which had “ignored” Sherman Adams’s bribery but “called a special grand jury to indict” Anderson and his sources who uncovered the corruption in the first place. This “political investigation” was the result of “pressure from the White House,” Pearson charged, and should be the subject of public hearings by Congress. Clearly, the administration could prosecute Anderson only at its own political peril. Authorities dropped their investigation of the newsman and his informants.

  It was a close call, but Anderson escaped the noose that had been prepared for him. At the time, he thought “getting caught was the most embarrassing thing that ever happened to me.” But he eventually decided it “didn’t hurt me at all” because “it proved we were getting [exclusive] keyhole evidence.” The scandal toughened the young legman, preparing him for the retaliatory strikes that inevitably followed his reporting. “What comes back to me with greatest pungency from those years,” he later reflected, “is the atmosphere of combat, of shooting and being shot at, of exposing villainies and being despised for it.”

  Ultimately, Anderson’s narrow escape reinforced his most brazen instincts, rewarding rather than punishing his rash excess. Now that he was quoted by NBC News anchorman David Brinkley and profiled in The Washington Post and other national publications, the legman relished the publicity that at long last allowed him to step out from Pearson’s shadow. After all, in Anderson’s eyes notoriety was better than anonymity, and although he admitted that “deep down” he wanted the approval of his journalistic peers, he also recognized that he and Pearson would always be “pariahs, and that there was no point in pretending we weren’t.” Above all else, Anderson learned the need to be fearless under attack, to respond ferociously when challenged, even to use bribery and blackmail if necessary when all else failed. It was an indelible lesson that Anderson would draw upon in the years ahead in multiple battles with adversaries.

  Vice President Nixon would draw his own conclusions from the bugging affair. He would repeatedly bring it up as evidence of Anderson’s dastardly tactics, and it would shape his conviction that electronic eavesdropping was standard fare in the nation’s capital. It was a rationale that would eventually lead to Watergate and forever stain his place in history.

  In the summer of 1960, the Republican Party nominated Richard Nixon for president. It was an extraordinary triumph for the Quaker boy from Whittier. By dint of hard work, discipline, and perseverance, he had elevated himself from nowhere to become the front-runner for the most powerful office in the land. Nixon’s deft maneuvering had led to steady advances from the House to the Senate to the vice presidency, and his vociferous anticommunism had earned the undying support of a hard-core base of Republican conservatives even while permanently antagonizing Democratic liberals. Although he had suffered several narrow misses at the hands of foes like Jack Anderson, Nixon managed to survive and go on to greater glory. Indeed, his steady rise underscored the lesser import of his journalistic critics, who achieved prominence only by splattering mud on the successful politician. For the undeniable reality was that the Vice President had overcome a harsh childhood, vitriolic political campaigns, and innumerable scandals without a single electoral defeat—and now seemed poised for his ultimate victory.

  Nixon’s opponent was Democratic senator John F. Kennedy, whose more modest political experience was offset by greater glamour, money, and media support. In particular, Anderson had been friendly with the Massachusetts politician for more than a dozen years, ever since
the two first moved to Washington after World War II. “Since we were both young bachelors at the time, it was suggested on occasion that we go out together on double dates,” Anderson recalled. But the straitlaced Mormon cautiously ducked the social opening: “Though I was sorely tempted to see how a Kennedy recreated himself, I was even more apprehensive that my frugal, abstemious, church-ridden manner of courting might have a depressing effect on the jet-set sophisticate and make an incongruous botch of the evening, so I would demur, a decision which no doubt contributed to the longevity of our cordial if episodic relationship.”

  Early on, Anderson learned of JFK’s womanizing, complete with some titillating if circumstantial photographic evidence of the embarrassed senator leaving a young female aide’s Georgetown apartment in the middle of the night while trying to hide his face with a handkerchief. But like virtually all journalists of the time, Anderson had “no intention of tattling” about Kennedy’s marital infidelity, believing that “an office holder should answer to a Higher Power than a muckraker for what he or she does in the privacy of the bedroom.” The Democratic nominee trusted Anderson enough to solicit his political advice, and in turn, Anderson pushed his boss, Drew Pearson, to crusade on Kennedy’s behalf. The battle against Nixon gave “Drew that which energized him above all else—a menace to combat,” Anderson later wrote. “Our columns and broadcasts were soon discovering Kennedy’s virtues and rediscovering Nixon’s old sins” as they “jumped into the fray on Kennedy’s side, rounding on Nixon from day to day with our routine ammunition while searching for the reporter’s desideratum—the exposé that would make a difference.” In the last two weeks before the election, Anderson and Pearson ended up publishing just such an exposé, one that would end up haunting Nixon for the rest of his political life.

  The muckrakers’ story would become known as the Howard Hughes loan scandal, named after the eccentric billionaire who secretly funneled money Nixon’s way in the latest instance of financial irregularity by the politician whose career had been shadowed by such impropriety from the beginning. Rightly or wrongly, the Vice President and his advisors would come to believe that the “Merry-Go-Round” exposé—unleashed on the eve of the 1960 election—cost them the White House. Indeed, the dirty tricks behind the revelation eerily presaged and in many ways helped sow the seeds of the Watergate scandal that would eventually topple Nixon’s own presidency fourteen years later.

  It all began in December 1956, just a month after Nixon had safely been reelected as Vice President, when his ne’er-do-well younger brother, Donald, suddenly received a $205,000 “loan” from the wealthy Hughes, whose far-flung business empire was heavily dependent on government contracts and connections. The billionaire was a “manipulative recluse,” Anderson recognized, “known for his nonplatonic relationships with politicians” of both parties. One month after Hughes signed off on the $205,000 payment to the Nixon family, the Vice President bought his elegant new house in Washington. Decades later, after Nixon was dead, one of his best friends admitted that while the Hughes money was channeled through his brother Donald, it “was really for Richard, to help him live. He was a relatively poor man.”

  Hughes’s investment was ostensibly to help Nixon’s brother finance a Los Angeles drive-in restaurant whose main attraction was a unique triple-decker menu offering called “Nixonburgers.” But the business venture proved to have as little popular appeal, as its main culinary dish and the eatery was soon on the verge of bankruptcy. Citing his brother’s financial woes, the Vice President approached Hughes’s lawyer, an old family acquaintance, to ask for help. According to the billionaire’s top lieutenant, Noah Dietrich, Nixon refused to take no for an answer. The Vice President “needs some cash,” Dietrich was informed. “Actually, he needs two hundred and five thousand dollars.” The Hughes executive literally let out “a whistle of astonishment.” The money would be equivalent to more than $1.6 million today. It made the Nixon slush fund that had nearly destroyed his career four years earlier seem puny in comparison.

  Dietrich asked Hughes about the audacious request and learned that his boss had already spoken directly with the Vice President about the payment. “I don’t give a darn about the size of it,” the billionaire told his aide, “because it’s a chance to cement a relationship.” Dietrich knew that Hughes frequently lavished money on politicians but felt that this time he “was going too far” because disguising the transaction as a loan through Nixon’s brother was so obviously “fishy.” The industrialist was unperturbed. “I want the Nixons to have the money,” Hughes instructed. “Let ’em have it.”

  The Nixon “loan” was unorthodox in many respects. To begin with, it was not really a loan: the paperwork Donald Nixon signed explicitly exempted him from personal liability and did not require that he ever pay the money back. He never did. In effect, the Hughes money ended up being a gift to the Nixons. Equally suspicious was the elaborate secrecy surrounding the payment. The money was funneled through various middlemen to hide the source of the cash. The Vice President’s name was deliberately kept off the paperwork, which referred to him only by a code name—“the Eastern division” of the California-based company—to conceal his role in the affair. As one writer observed, “This is perhaps the only instance in history when a secret code has been invoked in communications devoted to the affairs of a drive-in restaurant.”

  What Hughes received in exchange has long been debated. Less than three months after Nixon’s family received the money, the IRS reversed its earlier position and granted tax-exempt status to a Hughes offshoot, a ruling said to be worth tens of millions of dollars to the tycoon. In addition, the Pentagon awarded a defense contract to the Hughes Aircraft Company, the Justice Department agreed to settle a lawsuit against Hughes, and the Civil Aeronautics Board granted lucrative new routes to Hughes’s Trans World Airlines. But it was never proved that the Vice President was responsible for any of this government largesse nor that he intervened to influence the process. Reports of an explicit quid pro quo between Nixon and his financial benefactor “were impossible to verify,” one reporter who covered the story later wrote, but “politics rarely works that way” because the “exercise of political influence is more subtle; one uses one’s money to make friends and then waits hopefully for the functioning of gratitude.” At the time, there was no hard evidence that the Vice President himself personally pocketed any of the mogul’s money or even that he solicited the cash payment in the first place; such testimony would come only decades later, after Nixon was dead. Still, even at the time, it was obvious that Hughes “was definitely not a philanthropist,” as his aide Dietrich put it. “In the back of his mind, there was no question [the money] was to put the vice president of the United States under his obligation.” Indeed, Hughes bragged to intimates that Nixon was “eating out of his hand.”

  The Vice President’s elaborate secrecy kept the payment hidden for nearly four years. But in 1960, one of the middlemen who had been used to conceal Nixon’s role in the deal, a Los Angeles accountant named Phillip Reiner, had a falling-out with his Hughes-backed partners. Reiner, it turned out, was a Democrat. He and his lawyer contacted Robert Kennedy, manager of his brother’s presidential campaign, who enthusiastically referred the accountant to Washington attorney James McInerney, the man who ran what Jack Anderson called the “clandestine investigative arm” of the Kennedy machine. Nixon’s top political enemies now learned about one of his most sensitive secrets.

  But there was a problem: Reiner had no proof to back up what he knew. His thick file on the case—stuffed with letters, memos, court records, and other documentation—was in the hands of his estranged partners, who were still in Nixon’s camp. As the last few weeks of the neck-and-neck campaign began closing in, what happened next is a matter of dispute. According to Reiner, someone in his old office mistakenly sent the bulky Nixon-Hughes file to him at home in a fortuitous accident. According to one of the accountant’s former partners, however, someone broke into the off
ice and stole the precious file in an act of political sabotage that resembled the Watergate break-in a dozen years later. In fact, Reiner’s ex-partner filed a burglary report with the police, but no one was ever charged with the crime. Years later, the partner’s widow suggested that the accountant himself “purloined” his file to sell to the Kennedys, who did indeed pay Reiner the contemporary equivalent of more than $100,000 for the paperwork. Still, at this point the accountant was unwilling to go public and balked when Democrats tried to get him to sign an affidavit about the scandal.

  Soon, another bizarre twist occurred: twenty-eight-year-old Teddy Kennedy, campaigning on behalf of his brother, received a phone call from an anonymous attorney who said he had something “hot” that could swing the election. The lawyer would not discuss details over the telephone, but the youngest Kennedy brother agreed to meet the mysterious informant a few days later. The future senator flew to the Los Angeles airport, where he was handed a one-page contract to be signed by Robert F. Kennedy stating that “I and my father Joseph Kennedy” would pay $500,000 in exchange for paperwork documenting how Vice President Nixon “secretly negotiated and obtained $205,000.00 from someone engaged in multimillion-dollar contracts with the United States Government. The transaction was feebly disguised as a ‘loan.’ ” Uncertain what to make of it all, and undoubtedly suspicious of a setup, Teddy Kennedy mumbled, “I don’t know whether we would use this or not” and quickly departed. “I never heard another word from him or anybody else,” the attorney later said. “No one signed the agreement so of course no one paid me anything.” But the lawyer reportedly held more than one secret meeting with Democrats to discuss selling the documents.

 

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