Poisoning The Press

by Mark Feldstein

  In any case, word of this strange shakedown quickly reached Reiner. “It bowled me over,” the accountant recalled. “There I was in the middle of this loan and suddenly a guy is trying to peddle something about it for $500,000. I decided that if this story was going to blow, I wanted the whole thing told.” Reiner agreed to go public and Kennedy attorney McInerney put together a package of incriminating paperwork for dissemination to the news media. In early October, he delivered his hot file to St. Louis Post-Dispatch reporter Richard Dudman, who had aggressively covered Nixon’s slush fund scandal eight years earlier but had never even met the Democratic operative before. The startled newsman couldn’t believe his good fortune. “We had a terrific scoop,” Dudman recalled, “a red-hot story.” He raced to verify the report and (in an era before copying machines) hired a photographer to shoot pictures of the documents. But Dudman accidentally left his briefcase filled with the records behind, and by the time he realized his mistake, a scavenging employee of the photographic studio evidently realized there was money to be made peddling the damaging paperwork to the media.

  Within forty-eight hours, an enterprising private eye approached Time magazine and offered to sell the Nixon-Hughes file for “a large sum.” Time said no but immediately assigned five reporters to investigate. One of them, Frank McCulloch, was friends with former Hughes aide Noah Dietrich, whose recent falling-out with his ex-boss led him not only to confirm the story verbally but also to provide key documentary evidence to back it up. Time, too, was now in striking distance of exposing the scandal.

  An alarmed Hughes called his aide Robert Maheu and asked him to “save Nixon’s neck.” The billionaire realized that if the transaction “came out in public, the loan could cause Richard Nixon tremendous embarrassment, and possibly the election.” Maheu lobbied news outlets to kill the story. “Fortunately, those were the days when you could count on the press to have a heart, and they printed not a word,” Maheu later said. The journalists who worked on the story were unhappy but they were also accustomed to having their scoops spiked for political reasons. “I pushed for it like hell,” McCulloch recalled, but Time’s pro-Nixon editors decided that it would be unfair to publish such an explosive article just three weeks before the election. Other journalists had similar concerns. None dared run the story.

  Except, as usual, for Jack Anderson and Drew Pearson.

  As Election Day neared, the Kennedy camp told Pearson about the Nixon-Hughes deal. The columnist eagerly summoned Anderson to his Georgetown office. “Jack, this time we may have Nixon,” Pearson declared. “Of course,” he quickly added, “Nixon is still the great contortionist, and this is just the hour to be hung with a hoax. Before this is over, he may have us.” While Anderson took notes, his boss explained the complicated loan. “On the face of it, this looks like a thinly disguised gift,” Pearson observed. Anderson agreed and began digging into the story. But he realized that at such a late date in the campaign, his proof would have to be ironclad to avoid backfiring: “If the public did not perceive the story as legitimate, its effect would be to create sympathy and votes for Nixon, the more so given his genius for tear-inspiring self defense.”

  Because public records carefully concealed Nixon’s link to Howard Hughes, Anderson returned with only circumstantial evidence that was too flimsy to torpedo the Republican nominee. Pearson was disappointed: “The trouble with all this is that [Hughes] is always winning [airline] routes and contracts and settlements from the government. Unless we catch Nixon directly intervening, you can’t put your finger on any of them and say ‘this is a pay-off.’ ” Without disclosing the identity of his source, Pearson suggested that Anderson contact James McInerney: “I’ve called Jim and he’s been looking into it for me. Jim has the resources to crack this for us in a hurry. I suggest you see what he’s come up with, and then get back to me.” Anderson hurried to see the Kennedy operative. “On my way to McInerney’s office,” the newsman recalled, “I mulled over his presence among us.” Anderson knew that McInerney “was helping the Kennedy campaign in some murky way having to do with intelligence” and recognized that it was “something of a journalistic atrocity for Drew, near the climax of the campaign, to enlist the Kennedy hawkshaws to help us get the goods on their opponent.” But Anderson’s appetite was whetted by the story’s undeniable potential, “evocative of semisleeping perceptions of Nixon the sharpster, the corner-cutter, the huckster whose personal ethics were less than presidential.”

  McInerney greeted Anderson with a truculence that the reporter attributed to “a reluctance to reveal any details that might further implicate the Kennedy campaign as a helpmate to this exposé.” But with “a pride that only the diligent investigator can know, he presented a neatly arranged packet which I devoured unceremoniously, in the reflexive manner of a vagrant who has been offered a bottle he fears might be reclaimed at any moment.” The paperwork included internal documents indisputably linking Nixon’s money to Hughes and corroborating affidavits put together by the Kennedy gumshoes.

  But Pearson surprised Anderson by expressing reluctance to publish the story. “It’s late,” Pearson told his legman, “awfully late, to lob something ugly like this into a presidential campaign.” The columnist worried that the loan was not really “relevant” to Nixon’s fitness for office and would needlessly “distract” voters. “Distract?” Anderson was incredulous as he felt his scoop slipping away. “What is more relevant than whether a candidate is on the take?” Pearson quietly reminded Anderson of the backlash their previous election-eve mistakes had produced: “People never forgive you for something like this. Editors don’t. Maybe we should hold it till after election day.”

  “What good will it do to footnote it after the election?” Anderson retorted. “It’s what voters know before that counts.” The reporter argued it was their “duty” to make the information public, especially because the rest of the press was afraid to.

  “Jack, believe me, when you have one of these things in front of you there’s no way to know for sure what’s the right thing to do . . . I don’t want the column to be identified mainly with eleventh-hour campaign assassinations of politicians we’re known to be against. It undermines all the things we’re trying to do.”

  “I was sick,” Anderson recalled. “I had not yet learned to let go of any story, let alone one of this size and personal significance . . . I feared that by pressing hard I would push him over the edge of a ‘no’ decision, yet I knew how important it was to contest what he said, to get in a last word . . . I said, as softly as I could manage, ‘Drew, this is just the kind of story, at just the kind of time, that our column exists for.’ ”

  A few days later, Pearson came up with a Machiavellian ploy that, as Anderson put it, would eliminate the “onus of starting such a brawl while making it more likely . . . that people will perceive it as a proper dispute rather than a last-minute smear job.” Although Anderson and Pearson usually avoided tipping off targets of an ongoing investigation, this time they deliberately contacted Nixon and Hughes in a manner designed to “alarm them” that they were “about to pounce” but falsely “reassure them as to the rudimentary nature” of what they knew, dribbling out just “fragments of the story” as if they had learned only of the sanitized documents that were already in the public record but nothing else. Their goal was to “agitate the Nixon antennae . . . to provoke Nixon’s fears and then his counterattack.” The muckrakers’ response would depend on the Vice President. “If Nixon bites and tells anything near the truth, Drew will leave it alone,” Anderson explained. “If,” however, “Nixon bites and lies, to expose him will be proper, for a calculated lie in a presidential candidate on a question of personal honesty should be made known to the voters no matter how late the campaign hour.” If Anderson and Pearson were lucky, the candidate and his staff “might yet [try to] lie their way out of it, at least for two weeks. If they opted for this course, we had them.”

  Nixon fell headlong into the trap that Pear
son and Anderson set for him. According to the Vice President’s press secretary, Herbert Klein, Nixon learned that the “Merry-Go-Round” was “about to unload some kind of ‘blockbuster’ regarding the loan.” In response, “Nixon decided that the best way to defuse such a story” was to leak “the Nixon side of the case” to a friendly reporter “rather than sit back and wait for a column to put us on the defensive.” The Republican nominee realized that he was taking a “gamble,” Klein said, because “the election was close and no one actually knew what Pearson might write, if anything.” Still, Nixon “put out a story knowing it was negative, but feeling we could better protect our side of the story” if we “scooped” the muckraking columnists.

  The Vice President turned to a conservative journalist for Scripps Howard who had written positively about the candidate in 1952 when he successfully used the same tactic to neutralize the “Merry-Go-Round” exposé of the notorious Nixon slush fund. Under a headline that implied Nixonian forthrightness—VP BARES STORY OF KIN’S “DEALS”—the story was framed as if it had been written by the Republican nominee himself. According to Scripps Howard, the Vice President had learned that the Democrats were investigating his brother to try to embarrass him just before the election: “In an attempt to offset any such move, the Nixon headquarters here in Washington has made available to this reporter a full explanation of all relevant facts in the record, to get the story out in the open and end the gossip.” But the account ignored the two most important names in the financial deal: Richard Nixon and Howard Hughes. The Vice President’s pivotal role in arranging the transaction was not reported, and Hughes’s name was not mentioned once. Instead, the article included only the names of the obscure middlemen as if they, not the billionaire, were behind the payment. “To call it unbelievable was being kind,” one Hughes aide involved in the scandal admitted years later. “I counted many outright lies in the story.” The Nixon campaign simply “lost their heads” and “panicked” at the possibility of another exposé by Anderson and Pearson, Hughes’s lawyer explained, and “put out a cock-and-bull story.”

  Nixon’s disinformation gave the muckrakers precisely the excuse they had been looking for to unload their election-eve stink bomb, which could now be righteously defended on the grounds that they were merely correcting the Vice President’s falsehoods. The day after the Scripps Howard article appeared, on October 25, Pearson and Anderson announced in their column that they, too, had been digging into the same story “but hesitated to write” about it “chiefly because it was late in the election campaign and any revelation regarding another conflict-of-interest case involving Mr. Nixon was certain to bring charges of ‘smear.’ ” But now that the campaign had issued “a completely distorted version of the facts, the public is entitled to know all of them.”

  For the first time, the newsmen publicly revealed that Hughes, not his middlemen, bestowed the money “with the approval and knowledge of the Vice President.” Pearson and Anderson also exposed the secrecy designed to conceal the payment, including the code name used to refer to the Vice President and the “dummy owner” used to hide Hughes’s involvement. They pointed out that the billionaire “had various important matters before the government at the time” and that “many of these problems”—which they detailed—“got better treatment after the loan.” While there was “no evidence that the Hughes loan was connected with any government favors given Hughes,” Anderson explained that “the reason for conflict of interest laws is because of this very fact—namely that it is difficult, if not impossible, to prove favoritism in high places.” Which is why, the muckrakers argued, the deal was unethical even if there was no conclusive proof that it was a payoff.

  Headlines trumpeted the “Merry-Go-Round” revelations around the country. Nixon’s press secretary refused to allow journalists to question the Vice President directly, and the middlemen who had supposedly put up the money for the loan suddenly could not be located. Public suspicion intensified. In response, Nixon’s campaign manager, Robert Finch, publicly announced that the Vice President was not involved in any way with the payment; the story was just another Pearson-Anderson “smear” and there was “no basis for any claim” that the money “came from Hughes.” This final lie ultimately proved to be fatal because it could be so easily refuted. “Drew did not want the story to come to a head too quickly,” Anderson recalled, “so he turned the Nixon camp slowly on the spit. Referring mysteriously to correspondence in his possession . . . he issued a challenge: ‘I should be delighted to produce photostats of the secret deeds, transfers and other documents pertaining to the Howard Hughes loan, and show them on television with Don Nixon or Howard Hughes or Robert Finch present to deny them.’ ” Not surprisingly, the offer was declined.

  The Vice President began an abrupt retreat. Nixon’s campaign manager was forced to admit that he could “not make a flat statement” about whether Hughes was behind the loan “because I was not privy to the transaction.” Aides said they would need another week to gather “all the documents together” to answer reporters’ questions. “Now fearing the worst,” Anderson recalled, “the Nixon camp had to go into reverse gear and back off, a fatal shift once a dispute has reached the headline state . . . The telltale aura of culpability hovered over the sweating evasions of public relations men.” The candidate’s silence, Anderson realized, “conveyed a sense of the sinister” and “the announcement that ‘the Nixon family’ was to be suddenly thrust out front to do the talking from now on seemed to presage that there remained no defense but bathos.”

  Indeed, on October 31, just eight days before the election, Donald Nixon for the first time issued a public statement pronouncing himself “deeply grieved” that Pearson and Anderson have “attempted to smear my brother by detailing my unsuccessful business ventures.” He invoked every family member but his brother’s dog Checkers: “Those were humiliating times for my wife, my children and my mother. The scars they left are deep.” Obviously, the muckrakers were only bringing it up now “in the hope that somehow they would embarrass my brother” and “influence the outcome of the presidential election.” But after all the self-pitying rhetoric, Donald finally acknowledged that Hughes was in fact the source of the loan, contrary to the Nixon campaign’s previous denials.

  News accounts trumpeted the Vice President’s about-face. LOAN ADMITTED BY NIXON KIN was one of many banner headlines across the nation. In a report picked up by hundreds of newspapers, the Associated Press stated that “Donald Nixon, the Vice President’s brother, now admits that the controversial $205,000 loan came from industrialist Howard Hughes” even though “the Vice President’s personal campaign manager denied this last week.” Meanwhile, Anderson and Pearson convincingly refuted the Vice President’s claim that he knew nothing of the deal by citing documents showing that he was a stockholder in his brother’s company. Other legal paperwork revealed that the transaction was notarized in Nixon’s Capitol Hill office building. Even the conservative Scripps Howard journalist who had defended the Vice President admitted, “They made a sucker out of me.”

  The following day, accountant Reiner went public and further demolished the California politician’s version of events. Contrary to Nixon’s claims, Reiner revealed, “all major decisions” involving the Hughes money “were cleared” in advance with the Vice President himself, who even flew from Washington to Los Angeles to plot how to shield the payment from taxes on capital gains. Nixon and his financial angel Hughes were so determined to hide the deal, the accountant added, that he was instructed to use pseudonyms, backdate legal papers, and make sure key documents were never filed in court. CODE NAME HID DICK NIXON’S ROLE, blared the New York Post, which denounced “the fantastic attempt of the Nixon organization to conceal and distort the facts.”

  A day later—less than a week before the election—former president Harry Truman joked that Nixon needed “a bigger dog,” a sarcastic reference to Checkers. Hecklers greeted the Vice President on the campaign trail wi
th derisive signs. “Nixon and Hughes,” rhymed one, “You’re going to lose.” “Henceforth,” Anderson recalled, “the Nixon camp hunkered down on its past statements and retreated into silence.” Silence, however, was not what Anderson and Pearson had in mind. They milked their scoop for six separate columns in the last days before the election, taking care not to let subtlety get in their way. “Mr. Nixon has been talking about experience,” Pearson declared in an election-eve broadcast. “It now develops that his experience, which began with an $18,000 personal expense fund, has progressed to a $205,000 loan, which later became a gift . . . This is the kind of experience the American people can do without.”

  The muckrakers also began a drumroll to get Congress to hold public hearings on the scandal. They drafted a statement for their friend Senator Lyndon Johnson, the Democratic vice presidential nominee, requesting that “a special Senate committee be convened at once to investigate” Nixon’s financial dealings, complete with subpoenas and sworn testimony. “The charges are too serious to be brushed aside or dismissed as a political smear,” the newsmen wrote in their statement for LBJ. “Nixon owes the voters an explanation.” The reporters used the same tactic with Democratic congressman Jack Brooks, wiring him a telegram headlined: SUGGEST PRESS STATEMENT SOMEWHAT ALONG THESE LINES. Brooks parroted the Pearson-Anderson statement virtually word for word to the rest of the media: “Because of the seriousness of the charges, and the right of the American people to know the facts,” Brooks announced, his House subcommittee would “conduct a thorough investigation at the earliest opportunity.” Senator Estes Kefauver, another friend of Anderson and Pearson, also called for a federal inquiry into the Nixon loan, which the Tennessee Democrat declared was directly related “to the integrity of our government and the leadership of the political party which is asking for a mandate by the American people less than two weeks from now.”