“It’s going to be a continual blackmail operation by Hunt and Liddy and the Cubans,” warned Dean. “It’ll cost money. It’s dangerous. People around here are not pros at this sort of thing. This is the sort of thing Mafia people can do: washing money, getting clean money, things like that.”
Nixon was all business. “How much money do you need?” asked the president.
“I would say these people are going to cost a million dollars over the next two years,” replied Dean.
“We could get that,” said Nixon. “You could get a million dollars. And you could get it in cash. I, I know where it could be gotten.”
Nixon was determined to handle Watergate the same way Hughes had tried to handle Nixon—with a big bribe. In fact, Nixon planned to use his accumulated payoffs, the money he had taken from Hughes and others, if need be the entire secret slush fund gathered by Rebozo, to buy his way out of Watergate.
As the scandal engulfed him in mid-April, Nixon sat with his last two stalwarts, Haldeman and Ehrlichman, told them they would probably have to resign—and offered them money from Bebe’s little tin box.
“Legal fees will be substantial,” said the president, desperate to buy off his two closest aides. “But there is a way we can get it to you, and uh—two or three hundred thousand dollars.”
“Let’s wait and see if it’s necessary,” replied Ehrlichman.
“No strain,” Nixon quickly assured him. “Doesn’t come outta me. I didn’t, I never intended to use the money at all. As a matter of fact, I told B-B-Bebe, uh, basically, be sure that people like, uh, who, who have contributed money over the contributing years are, uh, favored and so forth in general. And he’s used it for the purpose of getting things out, paid for in check and all that sort of thing.”
Nixon was nervous. He stuttered and stammered, barely able to spit out the name of his personal bagman B-B-Bebe. This was the first time he had revealed to anyone that Rebozo maintained a secret fund for his personal use, cash gathered from “contributors” who were “favored and so forth in general.” Clearly the Hughes $100,000 was just part of a much larger kitty.
“Very substantial” is all the president now told Haldeman and Ehrlichman, and he was still nervously pushing the money on his reluctant henchmen as they walked out the door.
“I want you to, I hope you’ll let me know about the money,” he said in parting. “Understand, there’s no better use for it. Okay?”
Nixon made the offer all over again two weeks later when he called Haldeman and Ehrlichman out to Camp David to tell them the time had come, that they had to resign.
“It’s like cutting off my arms,” wailed Nixon, weeping now, but not at all certain this display of emotion was enough. Ehrlichman, especially, remained bitter and suggested that Nixon himself resign.
“You’ll need money,” said the president, desperately. “I have some—Bebe has it—and you can have it.”
Ehrlichman shook his head. “That would just make things worse,” he said, turning to go, leaving Nixon alone with his money.
Years later Nixon would tell TV interviewer David Frost that the cash he offered Haldeman and Ehrlichman was the $100,000 Rebozo got from Hughes, and it is tempting to believe that Nixon tried to buy his way out of Watergate with the same payoff that led him into it.
But, in fact, even as the president was trying to bribe his two closest aides, Bebe Rebozo was frantically trying to return that hot hundred grand to Howard Hughes.
There was only one problem. The money was gone.
At eight A.M. the next day, Monday, April 30—as Nixon prepared to announce the purge of his top White House staff in a nationally televised speech from the Oval Office—Rebozo met furtively in a room down the hall with the president’s personal lawyer, Herb Kalmbach.
Rebozo was tense. He swore Kalmbach to secrecy, said he was there at the request of the “big man,” and then revealed his big problem. It was the Hughes money.
The IRS, Rebozo said, had finally asked to see him about the unreported $100,000 “campaign contribution,” the tax interview was just ten days away, and Rebozo told Kalmbach that he no longer had all the money. It had already been spent. And not for any campaign.
Rebozo said he had given some of the secret Hughes cash to Nixon’s two brothers, Edward and Donald, to the president’s personal secretary, Rose Mary Woods, and to unnamed “others.”
He asked Kalmbach what to do. Kalmbach was not merely the president’s lawyer but also his backstage fund-raiser, the chief source of hush money for the Watergate burglars, and he realized that Rebozo was hoping he would volunteer to find fresh cash to replace the missing Hughes money. He figured it was probably all gone. And he had a pretty good idea which unnamed “others” it had gone to. But Kalmbach had had it. He was through playing bagman for the “big man.”
He told Rebozo to hire a good tax lawyer, return what was left of the $100,000 to Hughes, and come clean with the IRS.
Rebozo was shocked. “This touches the president and the president’s family,” he exclaimed. “I just can’t do anything to add to his problems at this time, Herb.”
On May 10, Rebozo met with the IRS. He did not come clean. He said he had kept the Hughes money intact and untouched in his safe-deposit box for three years and now planned to return it all. The bitter power struggle in the Hughes empire had made him nervous about putting it into Nixon’s campaign. The president was not even aware of the contribution, not until Rebozo mentioned it to him a few weeks earlier. Nixon immediately said, “You ought to give it back.” That was the whole story.
The IRS agents did not probe. They were not eager to interrogate the president’s best friend. Indeed, although Danner had confirmed the $100,000 transaction a full year earlier, agents handling the Hughes case were refused permission to interview Rebozo until now. And before they had come to see him, Nixon’s man in the IRS commissioner’s office called the White House to ask if it was okay. “We’re scared to death,” he told Ehrlichman. “He’s so close to the president.”
As soon as the agents left, Rebozo started calling Richard Danner. He told his old pal to come to Washington immediately, but he didn’t tell him why. Danner flew in on May 18. Only when they met over breakfast in Danner’s room at the Madison Hotel did Rebozo reveal that he wanted to give back the Hughes money. He said he had the very same hundred-dollar bills Danner had delivered three years earlier. Rebozo stressed that repeatedly. The money was still in the original Las Vegas bank wrappers. It had never been touched. Not once. Not a penny.
Danner refused to take it. For two and a half hours they argued, but Danner wanted no part of it. The cash that Rebozo first feared was too hot to take, and now feared was too hot to keep, Danner feared was too hot to take back.
“It’s your money,” the Cuban shouted at him angrily.
“It’s not my money,” said Danner. “It’s your money. And if I were in your place, I’d go see a lawyer.”
Rebozo instead took Danner to see Nixon’s other millionaire crony, Bob Abplanalp. “Do you like fresh trout?” asked the aerosol king. “I know just the place.” They drove out to the airport, hopped on Abplanalp’s private jet, and flew up to his lodge in the Catskills. Just for lunch. It was an impressive display of the rewards of good fellowship. But Danner remained unwilling to take back the Hughes money.
Rebozo was desperate to unload that cursed cash. He told Danner to stay in Washington over the weekend. The president wanted to see him. The three men met at Camp David on Sunday, May 20. It had been a bad week for Nixon. On May 17 the Senate Watergate Committee began its televised hearings. On May 18 Archibald Cox was named special prosecutor. And now Nixon was holed up alone at his rustic retreat preparing a “definitive statement” on Watergate, to be released Tuesday. But he took time off to see Danner.
The president exchanged a few pleasantries, then launched into a lengthy and passionate defense of himself. “I’m not guilty of anything,” declared Nixon. He said he would weather
the storm. He would not resign. The three old friends spoke for more than two hours, but all would later claim that no one mentioned the $100,000 Nixon had personally asked Danner to get from Hughes. Not in the hour they sat in the cabin. Not in the hour they walked together through Camp David in the light misting rain.
But Danner knew why he had been summoned to the mountaintop, and both before and after he met with the president, Rebozo pressed him again to take back the money. Danner refused.
A few days after the failed summit meeting, Rebozo told Nixon’s new chief of staff Alexander Haig about the Hughes problem. Haig called Deputy Treasury Secretary William Simon and asked for a status report on the IRS case. Simon informed him that Rebozo was going to be audited.
Rebozo hired a good tax lawyer. On June 18, following his lawyer’s advice, Bebe called the FBI’s chief agent in Miami, an old friend, and asked him to come over to his Key Biscayne bank. They entered the vault, and there in the presence of the agent and his lawyer, Rebozo opened safe-deposit box number 224. He slipped out two large manila envelopes and emptied bundles of hundred-dollar bills onto the table. It was the Hughes money, said Rebozo, and they counted it out.
There were no longer twenty bundles in bank wrappers, but ten bundles in rubber bands. Still, it was the same money he received, Rebozo insisted. He had simply removed the Las Vegas wrappers because of “the stigma applied to anything from Las Vegas.”
And it was all there, every penny, in fact it had multiplied. The count came to $100,100. Rebozo could not explain the extra hundred-dollar bill.
The next day he brought it all to his lawyer’s office, and prevailed on Danner to meet him there. Danner never showed. Finally, however, Danner put Rebozo in touch with Chester Davis, and the bluff Hughes attorney readily agreed to take back the money. “Be glad to accept it,” said Davis without ceremony.
Rebozo immediately unloaded the loot on Abplanalp’s corporate secretary, who handed it over to a Davis associate in New York on Wednesday, June 27, 1973.
Richard Nixon was finally rid of the Hughes cash, but he had not escaped the Hughes curse.
Out in Los Angeles one week later, on the Fourth of July, Robert Maheu blew the lid off the payoff.
Alone in a room with four lawyers, he celebrated the holiday by giving his deposition for a seventeen-million-dollar slander suit he had filed against Hughes, a suit triggered by his former boss’s outburst at the Clifford Irving press conference, the angry accusation that Maheu “stole me blind.”
It was the final act of their bitter divorce, and Maheu now openly revealed their most intimate dirty secrets.
“I have religiously protected Howard Hughes relative to political contributions,” said Maheu, posing as the still faithful spouse. “I think I should warn you,” he told the Hughes lawyers, “that if you want to push into the political world of Howard Hughes, I will put the consequences squarely on your shoulders.”
And then he told the tale of the big Nixon bribe.
“Mr. Hughes wanted to own the presidents of the United States,” said Maheu, and in the case of Nixon “certain political obligations had to be met.” Half of the hundred-thousand-dollar contribution was in direct payment for Attorney General Mitchell’s waiver of antitrust laws, the handshake deal he made with Danner that allowed Hughes to continue buying up Las Vegas. “Upon the return of Mr. Danner from Washington, D.C.,” said Maheu, “I made available to Mr. Danner the sum of $50,000 for delivery to Mr. Rebozo.”
When news of Maheu’s sworn revelation reached the Senate Watergate Committee, a team of investigators began to explore the hidden transaction, to push into the political world of Howard Hughes, and to find there the world behind Watergate.
The Hughes connection burst into public view on October 10. For the first time, the hundred-thousand-dollar deal was front-page news across the country, and the senators announced that they planned to subpoena Rebozo, the entire Hughes gang, even Hughes himself, haul them all before the committee and question them live on national television.
Staff investigators had already grilled Rebozo in Key Biscayne. In that and subsequent testimony, the Cuban tried to explain why he had kept the money hidden for three years and then returned it.
“I didn’t want to risk even the remotest embarrassment about any Hughes connection with Nixon,” said Rebozo. “I was convinced that it cost the president the 1960 election and didn’t help him in 1962 in California.”
He admitted that he held on to the cash until the IRS came after him, afraid that any public disclosure might destroy Nixon.
“Here was a possibility that we get another Drew Pearson type series about Hughes money, and it goes on and on. It would break him forever.”
Rebozo’s fears were not unfounded. In the days that followed, Nixon’s desperation to hide the Hughes payoff may have led him to take the final fatal step of his presidency—the Saturday Night Massacre.
It was a showdown that could have been avoided. Nixon was about to strike a deal on his White House tapes. He was moving toward a compromise with his respected attorney general, Elliot Richardson, that would bypass the hated special prosecutor, Archibald Cox, and keep the tapes hidden.
Instead of tapes, Nixon would release transcripts authenticated by Senator John Stennis, who was practically stone deaf. No one expected Cox to accept the deal, but Richardson was ready to go along with it, and Nixon was actually hoping that Cox would resign in protest.
Just as the deal was about to go down, however, the specter of the Hughes money apparently spooked Nixon into scuttling it.
On October 18, the day the final details were to be worked out with Richardson, Rebozo suddenly discovered that Cox had joined the Hughes investigation. A friendly IRS agent told him that the special prosecutor had demanded all files on the Hughes $100,000, and that same morning a banner headline in the Miami Herald declared: “COX BEGINS TAX PROBE OF REBOZO.”
Back at the White House, Nixon flew into a rage. “That fucking Harvard professor is out to get me,” he railed. “This proves it.”
The president told Haig that he would not have Cox poking into Bebe’s private affairs, that the Hughes money was none of his damn business. This was a perfect illustration of how Cox was out to get him, Nixon repeated angrily.*
For the moment, at least, it seemed that Nixon was more angry about the Hughes-Rebozo probe than about Cox’s relentless pursuit of the tapes. And his hysteria about Hughes immediately began to undermine the carefully wrought “Stennis Compromise.”
Haig called Richardson later that day. Before they even discussed the tapes, Haig let the attorney general know that Nixon would not stand still for a Hughes probe by Cox. The president, he said, didn’t see what the special prosecutor’s charter had to do with Rebozo or Hughes.
Late that night, Haig and Nixon’s lawyers came to see the president. They told him they could still finesse the special prosecutor—force Cox to resign, yet keep Richardson aboard—if only the president would set aside the question of Cox’s future access to tapes. Just leave that open, urged the lawyers; make the deal.
By nightfall, however, Nixon was in no mood for subtle strategies. He had been on the phone with Rebozo, he was furious about Cox’s intrusion into the Hughes affair, and he wanted above all to get rid of the special prosecutor.
No more tapes, said the president. None, period. And Cox would have to agree to that in writing or be fired.
The next day, as Nixon headed for his inevitable showdown, Rebozo flew into Washington and installed himself at the White House for the duration of the siege.
His presence always made Nixon more combative, especially when they were drinking together, and Nixon now began to spend much of his time alone with Rebozo. Haig did not know what they were saying to each other, but he had often before heard the two complain bitterly about the “unfair and unjust persecution” of Bebe over the Hughes money. Clearly it touched a raw nerve.
In a desperate effort to hide that payoff Nixon had
already brought himself to the brink of ruin, and now his obsession with Hughes created an atmosphere in the White House that made compromise impossible.
Two days after he learned of the Hughes probe, on Saturday night, October 20, 1973, Nixon fired the special prosecutor. Attorney General Richardson and his chief deputy both resigned. Everyone called it the Saturday Night Massacre.
Within days twenty-two bills had been introduced in Congress calling for Nixon’s impeachment.
Howard Hughes was also about to be called to justice.
It was not only Watergate that was closing in on him but also a side deal he had made with Nixon, his illegal Air West takeover the president had agreed to approve the same day Hughes agreed to give him the hundred-thousand-dollar payoff.
Early on the morning of December 20, Hughes fled London one jump ahead of the law. He boarded a jet borrowed from the Saudi arms merchant Adnan Khashoggi and flew back to the Bahamas, where two floors were reserved and waiting in a Freeport hotel owned by shipping magnate Daniel K. Ludwig.
Hughes had hardly settled in when he was indicted by a Las Vegas grand jury, accused of criminal fraud and stock manipulation in the Air West deal. He faced a possible twelve years in jail.
A fugitive from justice now, he desperately needed sanctuary, and the Bahamas seemed a safe bet. Just a few weeks before he arrived, the islands had refused to extradite another fugitive American financier, the notorious swindler Robert Vesco.
Hughes was taking no chances, however. He had not forgotten how he had been forced to flee the Bahamas in the wake of the Clifford Irving affair, and he was determined to buy off his new protector, Prime Minister Lynden O. Pindling.
“Regarding the Honorable P.M.,” Hughes wrote Chester Davis, “I truly admire his courage and the actions he has been brave enough to take.
“I urge you to tell him this: I would like to be of assistance. The question is: how much assistance does he need and how quickly?”
While Hughes dangled dollars in front of Pindling, Chester Davis was unloading the Nixon hundred grand Rebozo had unloaded on him. After resisting for months, he brought the cash under subpoena to the Senate Watergate Committee, opened his briefcase, and angrily dumped the hundred-dollar bills in front of a startled Senator Sam Ervin.
Citizen Hughes Page 48
