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Full text of "Presidential campaign activities of 1972, Senate resolution 60; Watergate and related activities"

J 



r'2^ PRESIDENTIAL CAMPAIGN ACTIVITIES OF 1972 

5^ SENATE RESOLUTION 60 



HEARINGS 



BEFORE THE 



SELECT COMMITTEE ON 
PRESIDENTIAL CAMPAIGN ACTIVITIES 



OF THE 



UNITED STATES SENATE 

NINETY-THIRD CONGRESS 

FIRST SESSION 



WATERGATE AND RELATED ACTIVITIES 
Phase III: Campaign Financing 

WASHINGTON, D.C., NOVEMBER 7, 8, 13, 14, AND 15, 1973 

Book 13 




Printed for the use of the 
Select Committee on Presidential Campaign Activities 

FRANKLIN PIERCE LAW CENTER 

Concord, New Hampshire 03301 

OM DEPOSIT MAR 1 9 '"TA 



PRESIDENTIAL CAMPAIGN ACTIVITIES OF 1972 

SENATE RESOLUTION 60 



HEARINGS 



BEFORE THE 



SELECT COMMITTEE ON 
PRESIDENTIAL CAMPAIGN ACTIVITIES 



OP THE 



UNITED STATES SENATE 

NINETY-THIRD CONGRESS 

FIRST SESSION 



WATERGATE AND RELATED ACTIVITIES 
Phase III: Campaign Financing 

WASHINGTON, D.C., NOVEMBER 7, 8, 13, 14, AND 15, 1973 

Book 13 




Printed for the use of the 
Select Committee on Presidential Campaign Activities 

U.S. GOVERNMENT PRINTING OFFICE 
24-650 O WASHINGTON : 1973 



For sale by the Superintendent of Documents, U.S. Government Printing Office 

Washington, D.C. 20402 - Price $4.10 

Stock Number 5270-02231 



SENATE SELECT COMMITTEE ON PRESIDENTIAL 
CAMPAIGN ACTIVITIES 

(Established by S. Res. 60, 93d Congress, 1st Session) 



SAM J. ERVIN, Jr., North Carolina, Chairman 
HOWARD H. BAKER, Jr., Tennessee, Vice Chairman 
HERMAN E. TALMADGE, Georgia EDWARD J. GURNEY, Florida 

DANIEL K. INOUYE, Hawaii LOWELL P. WEICKER, Jr., Connecticut 

JOSEPH M. MONTOYA, New Mexico 

Samuel Dash, Chief Counsel and Staff Director 
Fred D. Tnouvsoyi, Minority Counsel 
RuFUS L. Edmisten, Deputy Chief Counsel 

Arthur S. Miller, Chief Consultant 
David M. Dorsen, Assistant Chief Counsel 
Terry F. Lenzner, Assistant Chief Counsel 
James Hamilton, Assistant Chief Counsel 

Carmine S. Belling, Chief Investigator 

Wayne H. Bishop, Chief Field Investigator 

Eugene Boyce, Hearings Record Counsel 

Marc Lackritz, Assistant Counsel 

James C. Moore, Assistant Counsel 

Ronald D. Rotunda, Assistant Counsel 

W. Dennis Summers, Assistant Counsel 

Alan S. Weitz, Assistant Counsel 

Mark J. Biros, Assistant Counsel 

Donald G. Sanders, Deputy Minority Counsel 

Howard S. Liebengood, Assistant Minority Counsel 

Michael J. Madigan, Assistant Minority Counsel 

Richard L. Schultz, Assistant Minority Counsel 

Robert Silverstein, Assistant Minority Counsel 

Carolyn M. Andrade, Administrative Assistant 

Carolyn E. Cohen, Office Manager 

Joan C. Cole, Secretary to the Minority 

(H) 



CONTENTS 



HEARING DAYS 

Page 

Wednesday, November 7, 1973 5273 

Thursday,' November 8, 1973 5359 

Tuesday, November 13, 1973 5403 

Wednesday, November 14, 1973 5439 

Thursday," November 15, 1973 5483 

CHRONOLOGICAL LIST OF WITNESSES 

Wednesday, November 7, 1973 

Marumoto, William H., formerly employed by the White House under 

Fred Malek, accompanied by William M. Treadwell, counsel 5274 

Priestes, John J., building contractor from Coral Gables, Fla., accom- 
panied by Jerome S. Ilichman and I. Richard Jacobs, counsel 5327 

Thursday, November 8, 1973 

Fernandez, Benjamin, former organizer of National Hispanic Finance 
Committee for the Re-Election of the President, accompanied by 
Clement H. Jacomini and Nathaniel J. Ely, counsel 5360 

Tuesday, November 13, 1973 

Clark, Matthew E., Jr., director of purchasing with the American Ship 

Building Co., accompanied by Leonard C. Greenebaum, counsel 5404 

Bartlome, Robert, secretary of the American Ship Building Co., accom- 
panied b}- Leonard C. Greenebaum, counsel 5419 

Wednesday, November 14, 1973 

Atkins, Orin E., chairman of the board, Ashland Oil, Inc., accompanied 

by Fred M. Vinson, Jr., and John E. Jenkins, counsel 5439 

Wild, Claude C, Jr., vice president for Government relations of the Gulf 

Oil Corp., accompanied by Leo T. Kissam, Jr., counsel 5460 

Thursday, November 15, 1973 

Fabrega, Camilo, regional vice president for Braniff in Panama, accom- 
panied by Dennis Lyons, counsel 5484 

Robinson, Neal, assistant treasurer of Braniff Airways in Dallas, accom- 
panied by Dennis Lyons, counsel 5489 

Spater, George A., former chairman and chief executive officer of American 

Airlines, accompanied hy Lloyd N. Cutler, counsel 5494 

De Young, Russell, chairman of the board of directors and chief executive 
officer of the Goodyear Tire & Rubber Co., of Akron, Ohio, accompanied 
by Daniel Gribbon, counsel 5421 

(III) 



IV 

INTERROGATION OF WITNESSES BY MEMBERS OF THE 
COMMITTEE AND COUNSELS 

Page 
Ervin, Hon. Sam J., Jr Priestes : 5348-5350. 

Atkins: 5448, 5449. AVild : 5469-5475. Robinson: 5492, 5493. 

Spater : 5512-5516, 5520, 5521. De Young : 5528, 5529. 
Baker, Hon. Howard H., Jr Marumoto: 5325. 

Priestes : 5350. Wild : 5475-5478. 

Talmadge, Hon. Herman E Marumoto : 5314-5319. 

Inouye, Hon. Daniel K Marumoto: 5311-5314. 

Clark : 5418, 5419. Bartlome : 5435. Atkins : 5459. 
Montoya, Hon. Joseph M Marumoto: 5301-5308, 

5325, 5326. Priestes: 5353-5355. Fernandez: 5386-5399. 

Bartlome: 5435, 5436. Atkins: 5457, 5458. Wild: 5478, 5479. 

Robinson : 5492. Spater : 5518, 5519. 
Weicker, Hon. Lowell P., Jr Marumoto: 5308-5310. 

Priestes: 5350-5353. Atkins: 5458. Spater: 5516-5518. De Young: 

5529, 5530. 
Dash, Samuel, chief counsel and staff director Marumoto: 5273-5296, 

5319-5325. Priestes: 5326-5339, 5355, 5356. Clark: 5403-5416. 

Bartlome : 5419-5431, 5437, 5438. 
Thomp.son, Fred D., minority counsel Priestes: 5339-5345, 

5348. Fernandez : 5382-5386. 

Edmisten. Rufus L., deputy chief counsel Spater: .5498-5505, 5519. 

Dorsen, David M.. assistant chief counsel Fernandez: 5359-5382, 

5399-5402. Wild: 5460-5466. 5479-5481. Fabrega : 5483-5487. 

Robinson : 548^5491. DeYoung : 5521-5527. 

Hamilton, James, assistant chief counsel Atkins: 5439-5448. 

Sanders, Donald G.. deputy minority counsel Marumoto: 5296-5301. 

Madigan, Michael J., assistant minority counsel Fabrega : 5487. 

5488. Robinson: 5491. Spater: 5505-5512, 5519, 5520. DeYoung: 

5527, 5528. 
Schultz, Richard L., assistant minority counsel Clark: 5417, 

5418. Bartlome : 5432-5435, 5438. Wild : 5467-5469. 
Silyerstein, Robert, assistant minority counsel Atkins: 5450-5457. 

EXHIBITS SUBMITTED FOR THE RECORD 

No. 262-1* — Undated memorandum with heading "Capitalizing on the 

Incumbency" 5532 

No. 262-2 —Not for publication. 

No. 262-3 — Committee for the Re-Election of the President memorandum 

for the Attornej" General. Subject: Interest group reports.- 5533 

No. 262-4 — Not for publication. 

No. 262-5 — White House memorandum for Hon. James Lynn from 

William H. Marumoto. Subject: El Diario editorial 5535 

No. 262-6 — White House memorandum for Chuck Colson from Bill 
Marumoto. Subject: Weekly report for Brown Mafia, week 
of February 28-March 3 5536 

No. 262-7 — White House memorandum for Bob Brown, Bill Marumoto, 
Paul Jones, and Alex Armendariz from Fred Malek. Subject: 
Office of Minority Business Enterprise grants 5542 

No. 262-8 — White House memorandum for Chuck Colson from Bill 
Marumoto. Subject: Weekly report for Brown Mafia, week 
of March 13-17, 1972 _" 5543 

No. 262-9 — White House memorandum for Chuck Colson from Bill 
Marumoto. Subject: Weekly report for Brown Mafia, week 
of March 20-24, 1972 _" . 5547 

No. 262-10 — White House memorandum for Chuck Colson from Bill 
Marumoto. Subject: Weekly activity report for Spanish 
speaking, week of March 27-31 5551 

No. 262-11 — Memorandum for Chuck Colson and Fred Malek from Bill 
Marumoto. »Subject: Weekly activity report for Spanish 
speaking, week of April 3-7 •'5556 



♦Exhibits 262-1 through 262-63 officially made part of the record on page 5323. 



No. 262-12 — Memorandum for Chuck Colson and Fred Malek from Bill 

Marumoto. Subject: Weekly activity report for Spanish Pa&e 
speaking, week of Ai)ril 17-21 5561 

No. 262-13— Not for publication. 

No. 262-14 — Memorandum for Chuck Colson and Fred Malek from Bill 
Marumoto. Subject: Weekly activity report for Spanish 
speaking, week of Ai)ril 24-28 5566 

No. 262-15 — Memorandum for Chuck Colson and Fred Malek from Bill 
Marumoto. Subject: Weekly activity report for Spanish 
speaking, week of Ma,y 1-5 5571 

No. 262-16 — Memorandum for Chuck Colson and Fred Malek from Bill 
Marumoto. Suioject: Weekly activity report for Spanish 
speaking, week of May 8-12 5576 

No. 262-17 — Memorandum for Chuck Colson and Fred Malek from Bill 
Marumoto. Subject: Weekl.y activity report for Spanish 
speaking, week of May 15-19 5579 

No. 262-18— Not for publication. 

No. 262-19 — Memorandum for Chuck Colson and Fred Malek from Bill 
Marumoto. Subject: Weekly activity report for Spanish 
speaking, week of May 22-26 - 5583 

No. 262-20— Not for publication. 

No. 262-21 — Memorandum for Chuck Colson and Fred Malek from Bill 
Marumoto. Subject: Weekly activity report for Spanish 
.speaking, week of May 29-June 2 5588 

No. 262-22 — Memorandum for Carlos Conde from Fred Malek. Subject: 

Spanish speaking task force media team 5593 

No. 262-28— Not for iniblication. 

No. 262-24 — Memorandum for Chuck Colson and Fred Malek from Bill 
Marumoto. Subject: Weekly activity report for Spanish 
speaking, week of June 5-9 5599 

No. 262-25 — Memorandum for Chuck Colson and Fred Malek from Bill 
Marumoto. Subject: Weekly activity report for Spanish 
speaking, week of June 12-16 5607 

No. 262-26— Not for publication. 

No. 262-27 — Memorandum for Tony Rodriguez and Alex Armendariz from 

Bill INIarumoto. Subject: Fred Romero 5611 

No. 262-28— Memorandum for Chuck Colson and Fred Malek from Bill 
Marumoto. Subject: Weekly activity report for Spanish 
.speaking, week of June 19-23 5613 

No. 262-29— Not for publication. 

No. 262-30— Memorandum for Chuck Colson and Fred Malek from Bill 
Marumoto. Subject: Weekly activity report for Spanish 
speaking, week of June 26-30 5617 

No. 262-31 — U.S. Department of Commerce memorandum for Desmond 
Barker, special assistant to the President, from Joseph R. 
Wright, Jr., Deputy Administrator 5622 

No. 262-32 — Memorandum for Chuck Colson and Frek Malek from Bill 
Marumoto. Subject: Weekly activity report for Spanish 
speaking, week of Julj^ 3-7 5624 

No. 262-33— Not for pubHcation. 

No. 262-34 — Committee for the Re-Election of the President memorandum 
for William Marumoto from Alex Armendariz. Subject: 
Selected characteristics of persons and families of Mexican, 
Puerto Rican, and other Spanish origin, March 1972 5627 

No. 262-35 — Memorandum for Chuck Colson and Fred Malek from Bill 
Marumoto. Subject: Weekly activity report for Spanish 
speaking, week of July 10-14 5629 

No. 262-36 — Memorandum for Rob Davison from Bill Marumoto. Sub- 
ject: Development associates 5635 

No. 262-37— Memorandum for Chuck Colson and Fred Malek from Bill 
Marumoto. Subject: Weekly activitv report for Spanish 
speaking, week of July 17-21 ^ 5637 

No. 262-38— Memorandum for Chuck Colson and Fred Malek from Bill 
Marumoto. Subject: Weekly activity report for Spanish 
speaking, week of July 24-28 5643 

No. 262-39 — Committee for the Re-Election of the President memorandum 
for the Hon. Frederic Malek from Alex Armendariz. Sub- 
ject: Spanish-speaking organizational chart 5648 



VI 

No. 262-40 — White House memorandum for Frank Herringer from A. F. Page 
Rodriguez. Subject: Surrogate plan 5650 

No. 262-41 — White House memorandum for Alex Armendariz and Tony 
Rodriguez from Nathan Bajer re current status of OMBE 
proposals 1 5652 

No. 262-42— Not for publication. 

No. 262-43 — Memorandum for Chuck Colson and Fred Malek from Bill 
Marumoto. Subject: Weekly activity report for Spanish 
speaking, week of August 7-11 5658 

No. 262-44 — Memorandum for John Clarke from Bill Marumoto. Subject: 

Judge Alfred Hernandez 5663 

No. 262-45 — Memorandum for Chuck Colson and Fred Malek from Bill 
Marumoto. Subject: Weekly activity Report for Spanish 
speaking, week of AugU'^t 14-18 5666 

No. 262-46— Not for publication. 

No. 262-47 — Committee for the Re-Election of the President memorandum 
for Alex Armendariz from David E. Florence. Subject: 
Ed Pena— GS-18— EEOC _ _ 5669 

No. 262-48— Not for publication. 

No. 262-49 — Memorandum for Chuck Colson and Fred Malek from Bill 
Marumoto. Subject: Weekly report of the Spanish speaking, 
week of August 28-September 1 5670 

No. 262-50 — Committee for the Re-Election of the President memorandum 
for the Hon. Frederic Malek from Alex Armendariz. 
Subject: The Raza Unida Party national convention 5677 

No. 262-51 — Committee for the Re-Election of the President memorandum 
for Charles Colson from Alex Armendariz. Subject: Raza 
Unida convention 5679 

No. 262-52 — Memorandum for Chuck Colson and Fred Malek from Bill 
Marumoto. Subject: Weekly activity report of the Spanish 
speaking, week of September 18-22 5681 

No. 262-53 — Letter to Leveo V. Sanchez, president. Development Asso- 
ciates, Inc., from Russell Hamilton, Jr., U.S. Government 
Small Business Administration re graduation from 8(a) 
status 5685 

No. 262-54 — Not for i)ublication. 

No. 262-55— Not for publication. 

No. 262-56— Not for pubUcation. 

No. 262-57— Not for pubUcation. 

No. 262-58 — Memorandum for Chuck Colson and Fred Malek from Bill 
Marumoto. Subject: Weekly activity report of the Spanish 
speaking, week of October 2-6 5686 

No. 262-59— Not for publication. 

No. 262-60— Memorandum for Chuck Colson and Fred Malek from Bill 
Marumoto. Subject: Weekly activity report of the Spanish 
speaking, week of October 16-20 _- 5692 

No. 262-61— Not for pubUcation. 

No. 262-62 — Committee for the Re-Election of the President memorandum 
for Ken Cole from Alex Armendariz. Subject: La Raza 
Unida programs 5697 

No. 262-63— White House letter to Daniel K. Trevino from A. F. Rodri- 
guez re Trevino's firm and SB A meeting 5699 

No. 263 — (5324) SBA form with extracts from regulations of the Small 
Business Association pertaining to the policy behind the 
award of contracts and grants, and the statutory basis for 
those regulations 5700 

No. 264— (5332) Manger-Hay-Adams Hotel biU of John J. Priestes for 

March 12-13, 1972 5705 

No. 265 — (5348) Letter to Senator Ervin from Robert W. Barker re 
enclosure of statement of Maurice Stans, note to Maurice 
Stans from G. Richard Dunnels, of HUD. Another letter 
from Robert W. Barker to Senator Ervin re enclosure of 
analysis of Chairman Ervin's characterization of Maurice 
H. Stans' testimony. A third letter from Robert W. Barker to 
Senator Ervin with enclosure of affidavit of G. Richard 
Dunnells 5706 

No. 266 — (5371) Affidavit of Carlos Nunez re contributions for the reelec- 
tion of the President to the Hispanic Finance Committee 5736 



VII 

No. 267 — (5375) Affidavit of Jose Manuel Casanova re campaign contri- Page 
butiftns 5737 

No. 268 — (5379) Letter from James R. Stoner to Senator Ervin with 

enclo.sure of statement of Hugh W. Sloan 5740 

No. 269 — (5394) Letter to Peter G. Peterson, Secretarj^ of Commerce, 
and Thomas Kleppe, Administrator, SBA, from Alfred R. 
Villalobos, executive vice president of NEDA, re charges 
made against Benjamin Fernandez, former president of 
NEDA 5743 

No. 270 — (5398) Letter with attachment, to Miss Carolyn Andrade, 
Select Committee on Presidential Campaign Activities, 
from Nathaniel J. Ely, attornej-, re Ben Fernandez' appear- 
ance before the Select Committee on Novem})er 8, 1973 5747 

No. 271-1*— Paycheck stubfor social security No. 299-32-5234 for $5,000 

gross pay, $3,700 net pay, for pay ending April 6, 1972 5767 

No. 271-2 — Two bank deposit slips for the First National Bank, and two 

checks written by M. E. Clark, Jr 5768 

No. 271-3 — Handwritten notation of checks to the Stable Societ}^ Coun- 
cil for $100, and the Loval Americans for Government 
Reform for $3,000 .' 5769 

No. 271-4 — American Ship Building Co. certificate signed bj'^ M. E. Clark, 

Jr., re $5,000 bonus 5770 

No. 271-5 — Handwritten statement of Matthew Edward Clark, Jr., to 

agents of FBI, re finances at American Ship Building Co-- 5771 

No. 271-6 — Interdepartmental memo of American Ship Building Co. 
from M. E. Clark, Jr., to S. Lepkowski, re paycheck de- 
duction of $200 to be credited to account of George M. 
Steinbrenner III - 5777 

No. 271-7 — American Ship Building Co. financial records and checks of 

bonuses paid to employees 5778 

No. 271-8 — Check to Dedicated Americans for Effective Government 

for $3,000 from Robert E. Bartlome 5783 

No. 271-9 — American Ship Building Co. memo to file, re bonuses to nine 

employees, dated April 5, 1972 5784 

No. 271-10 — Handwritten statement of Robert E. Bartlome made to FBI, 

re Bartlome's salary, finances, and political contributions- 5785 

No. 271-11 — Affidavit of Ronald II. Slater, corporate vice president, the 

American Ship Building Co., Cleveland, Ohio 5792 

No. 271-12 — Record of long-distance telephone calls 5794 

No. 272-1 — (5448) First National City Bank record of payment to be 

made to William R. Seaton of Ashland Oil for $100,000,.- 5795 

No. 272-2 —(5448) Letter to Mr. and Mrs. Orin E. Atkins from Kenneth 
Wells Parkinson, re contribution to FCRP in the amount 
of $100,000 5796 

No. 272-3 — (5448) Letter to Maurice H. Stans from Fred M. Vinson, re 
contribution of Mr. and Mrs. Orin E. Atkins representing 
a contribution from Ashland Petroleum Gabon Corp 5797 

No. 272-4 — (5448) Letter to Fred M. Vinson from Paul E. Barrick, re 
return of corporate contribution of Ashland Petroleum in 
the amount of $100,000 with a copy of the returned check_. 5798 

No. 272-5 — (5448) Unsigned letter to Orin E. Atkins re the illegal cor- 
porate contribution to FCRP with reply letter from Atkins 
to George R. Berdes 5800 

No. 273-1 —(5466) Letter to Claude Wild from Kenneth Wells Parkinson 

re contribution to FCRP of $100,000 5803 

No. 273-2 —(5466) Letter to Kenneth Wells Parkinson from Cloyd R. 
Mellott, re contribution of $100,000 being Gulf Oil Corp. 
funds 5804 

No. 273-3 —(5466) Letter to Cloyd R. Mellott from Paul E. Barrick, re 
return of $100,000 campaign contribution with copy of 
check ■ 5806 



♦Exhibits 271-1 through 271-12 officially made part of the record on page 5431. 

Note. — Figures in parentheses indicate page that exhibit was officially made part of the 
record. 



vin 

No. 273-4 — (5466) Press release re announcement of Gulf Oil Corp.'s Page 

campaign contribution 5808 

No. 274-1 —(5491) Record of Braniff International payment to CAMFAB 

Co. of $40,000; copy of Braniff voucher check support for 

$40, 000 5810 

No. 274-2 —(5491) Braniff check to CAMFAB Co. for $40,000 with 

endorsement 5812 

No. 274-3 — (5491) Braniff financial records with checks made out to 

Braniff International for varying amounts 5813 

No. 274-4 — (5491) Account analj^sis of debits and credits for Braniff 

International 5830 

No. 274-5 — (5491) Cash accounting report and bank deposit slips of 

Braniff 5832 

No. 274-6 — (5491) Copies of nine checks made out to Braniff in varying 

amounts 5834 

No. 275-1 —(5504) Issue voucher dated Oct. 5, 1971, paying $100,000.20 

to Chemical Bank 5837 

No. 275-2 — (5504) American Airlines check to Chemical Bank for 

$100,000.20, Avith endorsement 5838 

No. 275-3 — (5504) Correspondence between Kenneth Wells Parkinson, 

Herbert J. Miller, and Paul E. Barrick, re contributions _. 5839 
No. 276 — (5505) American Airlines economic regulations department, 

CAB calendar; status of regulatory proceedings 5842 

No. 277 — (5513) Supplement to memorandum. Subject: Regulatory 

matters affecting American Airlines, dated November 15, 

1973 5850 

No. 278-1 — (5526) Letter to Arden Firestone from Kenneth Wells 

Parkinson, re $40,000 contribution to FCRP 5852 

No. 278-2 —(5526) Response to letter referred to in exhibit 278-1 5854 

No. 278-3 — (5'^26) Correspondence between Kenneth Wells Parkinson, 

Fred S. Myers, and Paul Barrick, re $40,000 campaign 

contribution 5855 



PRESIDENTIAL CAMPAIGN ACTIVITIES OF 1972 
PHASE III: CAMPAIGN FINANCING 



WEDNESDAY, NOVEMBER 7, 1973 

U.S. Senate, 
Select Committee on 
Presidential Campaign Activities, 

Washington^ D.C. 

The Select Committee met, pursuant to recess, at 10:10 a.m., in 
room 318, Russell Senate Office Building, Senator Sam J. Ervin, Jr. 
(chairman). 

Present : Senators Ervin, Talmadge, Inouye, Montoya, Baker, and 
Weicker. 

Also present : Samuel Dash, chief counsel and staff director ; Fred D. 
Thompson, minoritv counsel ; IJufus L. Edmisten, deputy chief coun- 
sel; David M. Dorsen and Terry F. Lenzner, assistant chief counsels; 
W. Dennis Summers, Alan S.' Weitz, and Barry Schochet, assist- 
ant majority counsels; Donald G. Sanders, deputy minority counsel; 
Michael J. Madigan and Robert Silverstein, assistant minority coun- 
sels; Jed Johnson, investigator; Pauline O. Dement, research assist- 
ant; Eiler Ravnholt, office of Senator Inouye; Robert Baca, office of 
Senator INIontoya ; Ron McMahan, assistant to Senator Baker ; Ray St. 
Armand, assistant ])ublications clerk. 

Senator Inouye [presiding]. The hearing of the Senate Select Com- 
mittee will please come to order. Counsel will call the first witness. 

Mr. Dash. ]Mr. William INIarumoto. 

Senator Inouye. Will you raise your right hand? Do you swear 
that your testimony before this committee will be the truth, the whole 
truth, and nothing but the truth, so hel]! you God ? 

Mr. Marumoto. I do. 

Senator Inouye. Thank you very much, sir. 

Counsel will proceed. 

Mr. Dash. Mr. Marumoto, you are accompanied by counsel. Will he 
please identify himself for the record ? 

Mr. Treadwell. Yes, sir. William M. Treadwell, attorney at law. 
counsel for ;Mr. Marumoto. And, Mr. Chairman, Mr. Marumoto has 
prepared a brief opening statement which we would like to ])resent to 
the committee at this time. 

Mr. Dash. Would he like to read it at this time ? 

Mr. Treadwell. Yes, it is a written statement and we have by your 
rules and guidelines, presented you with written copies. 

Mr. Dash. Yes, sir, we have received those and Mr. Marumoto, if 
you wish to, will you proceed to read your opening statement. 

(5273) 



5274 

TESTIMONY OF WILLIAM H. MARUMOTO, ACCOMPANIED BY 
WILLIAM M. TKEADWELL, COUNSEL 

Mr. Marumoto. Members of the Select Committee, I would like to 
make a brief statement and then open myself to any questions this 
committee may wish to ask of me. 

First, I desire to state that I come here today voluntarily, and also 
that I am accompanied by counsel, AVilliam M. Treadwell. Together 
we will try, within the limits of the law and the Constitution — and 
yet without waiving any of my own legal rights — to respond intel- 
ligently to all questions of this committee. 

I am told by your staff that the reason for calling me here today 
is to provide information relating to my work in President Nixon's 
administration, and to my involvement in the Presidential election of 
1972. 

I am most happy to provide this information. The work I did I 
believe to have been a public service, for the American people, and most 
importantly, for Spanish-speaking Americans. Furthermore, may I 
also state categorically and clearly, here and now, and for the record, 
that at no time did I ever involve myself in illegal or unethical ac- 
tivities, or even engage in what could be called "political dirty tricks." 

On the contrary, at all times I tried, to the best of my ability, to 
perform my work — both in the administration and in the campaign 
of 1972 — honestly, openly, with honor, and without anything to hide. 

Most .of my 3 years on the White House staff were spent in recruit- 
ing individuals for high level positions in the executive branch. Later 
I became a Presidential assistant for coordination of Nixon admin- 
istration efforts on behalf of Spanish-speaking Americans, and I 
worked closely with the Cabinet Committee on Opportunities for 
Spanish-Speaking People, and with other Federal agencies, identify- 
ing needs, creating programs, and making sure the programs were 
implemented. 

As you may know, Spanish-speaking people are the second largest 
minority in our Nation, but have been for many years sorely neglected. 

President Nixon set out to do something about meeting the needs of 
the Spanish-speaking. He created a statutory Cabinet Committee on 
Opportunities for Spanish-Speaking People. He assigned the top mem- 
bers of his administration, which included the Cabinet officers, and 
members of the White House staff, to participate in making the Fed- 
eral Government sensitive to the needs of the Spanish-speaking. 

Most of all, he made the Spanish-speaking people active participants 
in their Government by appointing top caliber Hispanos to executive 
level policymaking positions in his administration. It is significant 
that President Nixon appointed more than 50 Spanish-speaking people 
to top positions in Government. According to records, this is eight times 
more than the last two administrations combined. Furthermore, he 
initiated the "16 point program'' to bring Spanish-Americans into all 
levels of the Government. As a result, more Spanish-speaking persons 
have been brought into the Federal Government than ever before. 

In addition. President Nixon proved the Spanish-speaking people 
did not have to take a back seat to any other Americans in benefiting 
from Government programs and aids. 



5275 

In education, he created special programs for Spanish-speaking 
children ; in housing, innovative programs to provide more and better 
homes for Spanish-speaking Americans ; in health, the President ap- 
proved more and more funds for improved health care programs ; and 
in the area of economic opportunities, the administration worked to 
increase business and job opportunities. This is because of the eco- 
nomic mainstream of this country, that they wanted to be businessmen, 
industrialists, developers, and to share in the Nation's economic wealth. 
President Nixon also wanted them to have that legitimate oppor- 
tunity. Consequently, during Mr. Nixon's administration, more Span- 
ish-speaking have participated in business, and other opportunities 
provided by Government, than at any time in history. 

This was due, in part, to the fact that a team, of which I was a part, 
helped to identify Spanish-speaking people that wanted to take ad- 
vantage of these opportunities. In other words, we helped the Spanish- 
speaking people to know and understand the great variety of Federal 
programs, how to qualify for them, and how to apply for them. 

In doing this work, we never compromised the principle of legiti- 
macy, but we also did not compromise the right of opportunity for 
those who wanted to participate in Government programs and con- 
tracts. We encouraged this activity, and we are proud of the progress 
for Spanish-speaking Americans that we created. 

You may ask why was I chosen to do this job — me, an Asian- 
American. The simple reason is that I wanted to do it. I am a Japanese- 
American, but I grew up with Mexican- Americans in the barrios of 
southern California. I— like them — know what discrimination and 
lack of opportunity can mean. I was 8 years old when the United 
States of America placed me and my family in a concentration camp. 

But I also know what opportunity and justice is in America, gentle- 
men. I know the pride and the joy that comes when someone gives you 
the opportunity and the dignity that, to most all other Americans, has 
always been a birthright. 

Richard Nixon gave me and many other Spanish-speaking Ameri- 
cans that opportunity and that dignity. He did it and he continues to 
do it, not just because he is seeking their votes and patronage, but be- 
cause he is doing what is basically just and basically right. 

I am proud to have served the President in that capacity. I am proud 
that I had a small part in creating that opportunity for Spanish- 
speakino- Americans. 

Thank you. 

Mr. Dash. Mr. Marumoto. your opening statement, I think, explains 
a number of introductory questions that I might have asked. First, 
can you tell us when you first came to Washington ? 

]\Ir. Marimoto. Yes. I came in the fall of 1969, was first at HEW, 
was there on Secretary Finch's staflf. as assistant to him, and then in 
the fall of 1970 caine over to the White House, as part of a new execu- 
tive recruiting effort, headed up by Fred Malek. 

Mr. Dash. What were your responsibilities and duties in that 
position ? 

]\Ir. MARuivroTO. In the latter position ? 

INIr. Dash. Yes. 

Mr. Marumoto. During the 8 years I was part of the team that 
helped recruit individuals throughout the executive branch with con- 



5276 

siderable emphasis in the minority recruiting area for blacks, Spanish- 
speaking, and other minorities. In addition to that, I recruited other 
individuals who did not fit that category for all different kinds of 
positions, and then about the last 2 years* I concurrently was respon- 
sible, on a day-to-day basis, for programs affecting Spanish-speaking, 
reporting to Charles W. Colson. 

Mr, Dash. So under Mr. Malek would it be fair to say you were the 
^^Tiite House liaison staff person for opportunities for Spanish-speak- 
ing Americans ? 

Mr. IMarumoto. I would further define that by saying, in terms of 
Mr. Malek, it related only to high-level appointments. 

Mr. Dash. Now, during the period of what might be considered 
the campaign of 1972, was there an understanding that you had with 
Mr. Malek, with regard to your position, that you would also engage 
in seeking opportunities for obtaining grants for Spanish-speaking 
American grantees ? 

Mr. Marumoto. I think it was a much broader program than that, 
Mr. Dash. 

Mr. Dash. Will you describe that program ? 

Mr. Marumoto. Yes, sir. Basically, it fell into five areas: One, in 
the grants and contracts area where Ave were assisting eligible and 
qualified Spanish-speaking firms and organizations to obtain Federal 
funds for whatever program they were involved in. This could range 
from manpower programs, health, education, economic opportunity. 

Second, we were responsible for any special activities that related 
to Spanish-speaking communities. One example was when Mr. Eche- 
varria of Mexico was here last year. I believe, we had to provide some 
suggestion as to what States and cities and activities he might partici- 
pate in, in conjunction with some of our Spanish-speaking 
communities. 

Third, we were responsible for any communications pertaining to 
Spanish-speaking in terms of public relations and publicity, coordi- 
nating our efforts with the various departments and agencies and the 
White House. 

Fourth, I had the responsibility of all the recruiting efforts for 
Spanish-speaking in terms of primarily residential and supergrade 
positions but, in addition to that, we also assisted in the 16-point 
program. 

Fifth, in conjunction with the speakers bureau at the White House, 
which scheduled most of the Cabinet, all of the Cabinet officers and, 
also Avith the surrogates program at the Committee for the Re-Election 
of the President, we had our own separate Spanish-speaking surrogates 
program. 

Mr. Dash. Was there any introductory meeting or meetings some- 
time in tlie period of 1972, when your role with regard to opportunities 
for grants to Spanish-speaking American grantees was exjilained in 
terms of relationship to the Committee To Re-Elect the President, the 
finance committee or to the various departments or agencies that had 
the grant-making po'wer ? 

Mr. Marumoto. I don't think there was any discussion in terms of 
the Committee for the Re-Election or the finance committee which 
was tlie arm of the first committee, but there was discussion in terms 
of trying to get a better handle on the grant-making process in the 
various departments and agencies. 



5277 

Mr. Dash. Well, did you work in close liaison with any parties or 
persons with the Fniance Coinmittoe To Re-Elect the President? 

JSIr. Marumoto. Yes; I was -well ac(|uainted with one gentleman who 
headed up one part of the finance committee, and this was a group 
that dealt primai-ily with the Spainsli-s[)eaking community, called the 
National Spanish Finance Committee, that I believe was chartered 
the first part of 1972 and headed up by Benjamin Fernandez of Los 
Angeles, Calif. He, in turn, organized the national etl'ort in most of 
the States where we had a high concentration of Spanish-speaking, and 
I might add that this Avas the first time that the Spanish-speaking 
community had any kind of meaningful role in a national campaign. 
JNIr. Dash. Was liis res])onsibility to engage in fundraising for the— 
under the National Hispanic Finance Committee i 

Mr. Marumoto. Would you repeat that question, please ? 
Mr. Dash. Was Mr. Fernandez' role of fundraising for this His- 
panic, the National Hispanic Finance Committee which -was a part 
of the Committee To Ke-Elect? 

^[r. Marumoto. I believe their goal was $1 million and they raised 
about $400,000. 

Mr. Dash. Was there any liaison or working relationship that you 
had with any person in the Committee To Ee-Elect the President that 
dealt Avith Spanish-speaking Americans? 
Mr. Marumoto. Of the finance committee ? 
Mr. Dash. No; the Committee To Re-Elect the President. 
JSIr. jNIarumoto. Yes, sir. 

A party by the name of Alex Armendariz was director of the Span- 
ish-speaking division of the Committee for the Re-Election. 

Mr. Dash. Was any formal arrangement set up with these parties, 
either Mr. Armendariz or Mr. Fernandez, your office and other mem- 
bers of the Committee To Re-Elect the President ? 

Mr. Marumoto. It was an informal arrangement, Mr. Dash. First 
of all, we had a team of about five of us who were involved in the 
Spanish-speaking area. And Antonio Rodriguez, who was my deputy, 
Carlos Conde, who was on Herbert Klein's staff, who was at that time 
the director of communications, worked very closely with me. 

Third, Henry Ramirez, who was chaii-man of the cabinet committee 
for the Spanisii-speaking, and, fourth, Alex Armendariz. We used to 
meet every ISIonday afternoon, beginning, I believe, in the early part 
of 1972 to strategize in terms of the Spanish-speaking vote, and to 
keep ourselves abreast of our progress. 

Mr. Dash. And was the major part of that role in the meeting 
political in nature, in terms of attempting to get as many of the 
Spanish-speaking Americans either giving financial contributions or 
being favorable to the reelection of the President ? 

Mr. Marumoto. I think that, certainly, some of the agenda that we 
discussed at those meetings were political in nature, in terms of what 
kind of impact we could make in the Spanish-speaking community. 
On the other hand, I think that the kind of commitment and dedica- 
tion that the members of this team had was one of an advocacy role. 
We felt that this was the first time that any administration gave this 
particular minority group an opportunity to get into the mainstream 
of the American economic and social and political life. I think w^c 
had a tw of old situation there. 



5278 

Mr. Dash. Now, you have before you, I understand, Mr. Marumoto, 
a file of memorandums 

Mr. Marumoto. Yes ; I do. 

Mr. Dash [continuing]. Which we have gone over with you. I am 
going to refer to a number of tliem and ask you to respond to certain 
questions I have concerning them. 

I will say this, that consistent with your opening statement and the 
responses you have given to the opening questions that I have made, 
a large part of the information in these memorandums indicate a 
definite effort on your part, as well as others in the administration, 
to aid and assist Spanish-speaking Americans, both for employment 
and other opportunities. And I want to make that clear for the record 
that a large portion of these memorandums show that and if at any 
time during my questioning you wish to point to any particular part 
of the memorandums and emphasize that, please feel free to do so. 

Mr. ]Marumoto. Can you explain the memorandums ? These are the 
memorandums that I used to do on a weekly basis with Chuck and 
Fred Malek and they pertained to the Spanish-speaking, right? 

Mr. Dash. Yes; not all of them will be that, but a number of them 
are the weekly memorandums, a report that you made to Mr. Malek 
and Mr. Colson on the operation of yourself and ]\Ir. Rodriguez, pri- 
marily. 

As a matter of fact, turn to exhibit No. 262-7 — no, exhibit No. 
262-8*, Mr. Marumoto. In your earlier memorandum to Mr. Colson — 
this is exhibit No. 262-8 from you to ^Ir. Colson alone, and some of 
the earlier ones were also to ]\Ir. INIalek and Mr. Colson — you entitled 
this, and perhaps you can explain this — I do not know whether this 
was for humorous purposes, but it is entitled "Weekly Report for 
Brown Mafia." week of March 13, 1972. 

Now, why did you entitle your memorandums, your weekly memo- 
randums, the "Weekly Report for the Brown Mafia"? 

Mr. Marumoto. This was, I guess, the humorous part of me that 
cropped up in these reports. We did that. I think, for only just a 
very few occasions and dropped it, not only at the susfgestion of Mr. 
Malek but we also decided it would not be a good use of that particular 
term. 

However, I would say it was being similar to Kennedy's Irish Mafia 
or ■ 

Mr. Dash. You will notice on that particular memorandum a note 
by — I guess this Avas Malek, Fred — "p-ood rcT^tort — see notes. Please 
drop Brown Mafia title — it would look bad if it ever got out." 

Thereafter. I think your reports referred to "Weekly Report on the 
panish-Speaking." 

Mr. Marumoto. Yes, sir. 

Mr. Dash. Now, would you turn to exhibit No. 262-1. The heading 
of that exhibit — it is an undated memo, a copy of which you did re- 
ceive. The heading is "Capitalizing on the Incumbency." I will just 
read briefly portions of that memoi-andum. 

Bill Marumoto is responsible for submitting a plan to capitalize on the in- 
cumbency by May 1. 



*For more detailerl information as to description and location of exhibits Nos. 262-1 
througii 262-63, see contents pages. 



5279 

It opened by saying : 

Substantial assistance to Spanish-speaking campaign can be provided through 
use of the control of the Executive Branch. Through this control, we can fill in 
any gaps in the President's record and generate favorable publicity for the 
campaign persuasion effort. In addition, a number of Spanish-speaking programs 
are sources of political information. 

Then, in a number of the elements of the plan that you were sup- 
posed to develop are listed — 

No. 1. To develop specific ideas for using grants, personnel appointments, and 
programs to fill out any gaps in the President's record, for example, appoint a 
Mexican-American to a regulatory commission. 

Some other additional items : 

No. 5. To insure that those federally-subsidized programs which serve as 
havens for opposition political operatives are closely supervised so they are de- 
voting all their energies toward solving the problems of Spanish-speaking poor 
(particularly in September and October). 

Now, could you give us any more elaboration of this memorandum, 
"Capitalizing on the Incumbency'" — how it came into being? What its 
meaning was ? What you understood it to be ? 

Mr. Marumoto. Let me try to give you an overall view of how this 
fits into the sort of big picture. Under Mr. Colson, he had responsibility 
for all special interest groups such as veterans, the labor, youth, Jewish 
vote, the ethnic. Catholic, women, elderly, Spanish speaking, black, and 
T think there were several other groups. All of us had the mandate to 
develop programs that would best benefit our respective constituencies 
and within that umbrella was included appointments to high level 
positions, included generating grants and contracts, and included 
trying to publicize all of these accomplishments and achievements 
under the Nixon administration to our respective constituency. 

Mr. Dash. But the term used in the memorandum "through use of 
the control of the executive branch,"' and "to capitalize on the 
incumbency,"' would it be fair to say that the memorandum and the 
responsibility you had Avith regard to certain Spanish-speaking Amer- 
icans was to prepare a plan and implement the plan to use the poAver of 
the executive branch and its departments, its grant-making powers, 
its employment poAvers in this particular campaign? 

Mr. Marumoto. OK. 

Mr. Dash. Did you develop that kind of plan? Did you in fact 
develop and submit a plan to capitalize on the incumbency? 

Mr. Marumoto. Yes, sir. 

Mr. Dash. Now, would you turn to exhibit No. 262-5, Mr. Maru- 
moto? This is a White House memorandum, dated March 2, 1972. It 
deals with an editorial that apparently caused some problems with an 
organization called NEDA. Do you know what NEDA is ? 

Mr. Marumoto. Yes, sir. 

Mr. Dash. What is NEDA. N-E-D-A ? 

Mr. Marumoto. That is the National Economic Development As- 
sociation, which is a national Spanish-speaking economic development 
organization, funded out of the office of Minority Business Enterprise 
at the Department of Commerce. 

Mr. Dash. Now, in the memorandum, you say : "I am attaching an 
editorial written by a NEDA employee opposing the appointment of 
Cip Guerra as deputy director of OMBE." A^Hiat is OMBE? 



5280 

Mr. Marumoto. OMBE is the Office of Minority Business Enterprise. 
Mr. Dash [reading] : 

This is the latest example of the unwillingness to cooperate in a "spirit of 
cooperation" with the Administration. I thinl: before Commercial signs off 
on their $2 million grant, you should sit down with Frank Viega and explain the 
facts of life. 

I would appreciate being kept abreast of this highly important matter. 

This was sent to Mr. James Lynn. Who was Mr. Lynn ? 

Mr. Marumoto. Mr. Lynn at that time was Under Secretary of 
Commerce. 

Mr. Dash. And who is Frank Viega ? 

Mr. Marumoto. He was the — I believe he was the president of that 
organization, of tlie NEDA organization. 

Mr. Dash. What facts of life should be explained to him ? 

Mr. Marumoto. Let me just explain that on this $2 million grant, 
if I recall correctly, it was the refunding of that particular program. 
During that past year or so, we found that in trying to unify our 
whole Spanish-speaking effort, a couple of the senior people with that 
organization were very disruptive and uncooperative in trying to 
further some of our goals and objectives. This editorial was the latest 
one. For some reason JVIr. Guerra was recommended for the job after 
a national search as the No. 2 man at the Office of Minority Business 
Enterprise. For some reason, some of the members just didn't want 
him to get it. They felt he was a threat to them because he would have 
been the controlling agency or individual for that program. 

Mr. Dash. Was it part of — I am sorry. 

Mr. Marumoto. Of course, the other point I would certainly make 
is that this was the first time that a Spanish-speaking individual had 
an opportunity to be in either the No. 1 or No. 2 position there at 
OMBE. 

Mr. Dash. Who was Mr. Alfred Villa-Lobos? 

Mr. Marumoto. He was at that time the executive vice president 
of that organization. 

Mr. Dash. Did you ever ask him to stage a phony demonstration 
in front of the I.(Os Angeles Times office ? 

Mr. Marumoto. Yes, sir. I don't know if I agree with the term 
"phony." 

Mr. Dash. Wliat term woidd you use ? 

Mr. Marumoto. I was asked, on that particular occasion by Mr. 
Colson, when the Los Angeles Times came out with an antiadminis- 
tration editorial, I believe — I can't recall the particular subject, but 
we had asked if Mr. Villa-Lobos would organize a group to demon- 
strate in front of the Los Angeles Times. 

Mr. Dash. Did you receive cooperation in that request? 

Mr. Maru^ioto. I think after a couple of days, he called back and 
said he just could not do it. 

Mr. Dash. Was it part of the strategy of your program that orga- 
nizations that showed themselves to be unfriendly to the administra- 
tion or had individuals who were causing trouble to the administration 
would not be i)iefer7-ed in the grant-making powoi? 

Mr. Marumoto. I don't think so, Mr, Dash. I think our main thrust 
was not that so much as it was to try to enhance and do everything Ave 
could to get the Spanish-speaking people in the mainstream of the 
governmental process. 



5281 

Mr. Dash. I understand that was your goal, and I think tliat yon, to 
a large extent, accomplished it. But among those who were competing 
in the Spanish-speaking American community, there was quite a bit of 
discretion, was there not, in various agencies as to who would get a 
grant ? 

Mr. Marumoto. I think in some cases when an organization might 
be totally antiadministration, there would be a neutralizing factor 
there, yes. 

Mr. Dash. Now, on exhibit No. 262-6, which is again a weekly, ;one 
of your weekly reports on March 3, if you will turn to page 2. 

Mr. Marumoto. Excuse me, sir, that is not a weekly report. It is a 
memo from Mr. Malek to — — 

]Mr. Treadwell. I am sorry. My exhibit No. 262-6 is — we have a 
memorandum here from Fred Malek. That is our exhibit No. 262-6. 

Mr. Dash. In the compilation of these, perhaps there has been 
some error. The one I am referring to is a March 3, 1972, weekly report 
for February 28 and March 3. Do you have that report in your folder? 

If you will take from Mr. Edmisten his report, I just want to ask 
this question. On page 2 of that weekly report, paragraph 3 reads : 

"Alex Armendariz," which you have already identified as being with 
the Committee To Ke-Elect the President liaison for Spanish-speaking 
Americans — "and Tony Rodriguez," your assistant, "met with Roy 
Blasher of GEO regarding a $200,000 grant to a Spanish-speaking 
firm in California. This grant is to study and review Spanish-speak- 
ing grants that were made last year by OEC' 

Now, what was the role of Alex Armendariz from the Committee 
To Re-Elect the President, which was the political branch of the CRP 
for the campaign, in meeting with Mr. Blacher of OEO and discussing 
a grant of $200,000 { Why was he there 'I 

Mr. ]Marumoto. He was involved in terms of signing off on any 
grants. 

Mr. Dash. When you say "signing off,"' did that mean he would have 
to agree? 

Mr. Marumoto. A])prove, yes. 

Mr. Dash. He would have to approve ? 

Mr. Marumoto. Yes. 

Mr. Dash. And he was not actually a staff member of OEO, was 
he? 

Mr. Maru]moto. No ; he wasn't. 

Mr. Dash. In fact, as you pointed out, he was the Committee To Re- 
Elect the President liaison man with the Spanish-speaking community, 
and therefore, a ])olitical signing off was necessary for the making of a 
grant to a Sapnish-speaking American grantee. Is that your testimony ? 

Mr. Marumoto. Yes, sir. 

Mr. Dash. Now, on page 3 of that memorandum, paragraph 12, 
again there is a statement, "Armendariz and I are scheduled to see 
Larry Silberman at Labor, Jack Venneman at HEW, and Joe Blach- 
fordat ACTION next week. This should wi-ap up the departments 
and agencies we want to cover to date." 

Was this an effort at this period in March for you from the White 
House and Afr. Armendariz from the committee to be meeting with 
various governmental agencies that give grants to wrap up business? 

Mr. Marumoto. I think it was more than grants again. What we 
tried to do was select any department or agency that had vacancies for 

24-650 O - 74 - 2 



5282 

high-level positions or grants or contracts that would jDertain to this 
community and we asked that they cooperate in trying to involve our 
particular constituency. 

Mr. Dash. Nov/, are you aware of a program that was called the 
"Responsiveness Program" ? 

Mr. Marumoto. Yes, sir. 

Mr. Dash. Can you briefly tell the committee v/hat your understand- 
ing of that program was ? 

Mr. Marumoto. Yes, sir. I believe it was the latter part of 1971, 
or the firsc part of 1972, when top officials on the White House 
staff decided that we needed a vehicle to coordinate any requests and 
action through the executive branch in terms of high-level employ- 
ments in grants and contracts, possibly public relations and other 
functions that would fit into this area. There were either four or five 
men who were part of that group and at first reported to Fred Malek 
and then, I believe, to Dan Kingsley. 

Mr. Dash. What specifically^ — who was to be responsible for what? 

Mr. Marumoto. Within the four or five men who were on that staff, 
they each had responsibility for so many de})artments and so many 
agencies. Those of us in Mr. Colson's operation and the special inter- 
est groups then would phone any of our requests to them so there was 
a coordinated effort out of the White House. 

Mr. Dash. And the program contemplated that the agencies would 
be responsive to the requests ? 

Mr. Marumoto. Yes, sir. 

Mr. Dash. And this was fitted in also into the campaign efforts at 
this time ? 

Mr. Marumoto. Yes, sir. 

Mr. Dash. Will you turn to exhibit Xo. 262-7 and, I hope we have 
the same exhibit, it is a memorandum from Fred Malek to Bob Brown, 
yourself, Paul Jones, and Alex Armendariz with copies to Ken Cole, 
Bill Gifford, and John Evans. You might identify Bob Brown for us. 

Mr. Marumoto. Mr. Brown was special assistant to the President 
and had the responsibility for the black community. 

Mr. Dash. Paul Jones ? 

Mr. INIarumoto. Mr. Jones was the director of the black division at 
the Committee for the Re-Election of the President. 

Mr. Dash. I think we have already identified Mr. Armendariz. Who 
was Ken Cole ? 

Mr. MarI'Moto. Mr. Cole was the No. 2 man on the Domestic Coun- 
cil under Mr. Ehrlichman. 

IMr. Dash. In the White House? 

Mr. Marumoto. Yes, sir. 

Mr. Dash. INIr. Bill Gifford ? 

INIr. Marumoto. IMr. Gifford, T believe, was on the legislative or con- 
gressional relations staff at the time. 

Mr. Dash. And John Evans ? 

Mr. Maritmoto. Mr. Evans Avas a member of the Domestic Coun 
cil ; and among other things, had lesponsibility for the Department 
of Commerce. 

Mr. Dash. All right. 

Now, it is a brief memorandum and let me just read it. 

Each of you has expressed concern to nie recently about the use of OMBE grants. 



5283 

I think you have ah-eady identified OMBE for us. 

This, obviously, represents an excellent opportunity to make a contribution 
and sain headway in the black and Spanish-speaking area. 

I have discussed this situation with Ken Cole, and we are in agreement on 
the importance of this program to our efforts. However, if we are to be at all 
effective in the OMBE area, we must insure that the White House speaks with 
a single voice. Ken and I are agreed that that single voice will be John Evauii 
of the Domestic Council staff. 

I believe assigning John the complete responsibility in this area can be quite 
effective and helpful to our efforts. John has the same objectives that you do, and 
I am sure you will find him most receptive to your inputs and needs. In this 
regard, I think it would be helpful if at an early stage you each sat down with 
John to discuss the blacks and the Spanish-speaking prol»lems, respectively, to 
ensure he is fully apprised of your needs and that a meaningful liaison is estab- 
lished. 

Was that the beginning of — sort of a concentration in dealing with 
one person in this particular area ? 

Mr. INIarumoto. Yes ; I think up to this point it was Fred Malek at 
the Wliite House, so we were trying to channel it into office. 

Mr. Dash. Now, on exhibit No. 262-8 in your weekly report that I 
think I referred to once before for the period March 13 to 17, dated 
March 17, if you will look at paragraph 1 of that report on the first 
page. 

Alex Armendariz, Tony Rodriguez and I met with representatives of Harry 
Dent, Clark MacGregor and Bob Brown's offices with the grant officials of OEO 
to discuss ways of improving coordination and more effective means of getting 
political impact in the grantmaking process. Discussions iwinted out the tremen- 
dous need for a centralized computer capability for all departments and agen- 
cies whereby one could obtain data regarding grants to any congressional dis- 
trict and/or organization. 

By the way, did you ever accomplish this computerized system? 

Mr. Marumoto. We talked about this, I think, on several occasions 
but never could put that together. 

]\Ir. Dash. Your meeting again, "I met with representatives of 
Harry Dent." Who is Harry Dent ? 

Mr. Marumoto. Mr. Dent at that time was special counsel to the 
President. 

Mr. Dash. Clark MacGregor? 

Mr. Marumoto. He was head of the legislative office at the White 
House. 

Mr. Dash. And does this paragraph, is it self-explanatory, the lan- 
guage, "Improving coordination and more eifective means of getting 
political impact in the grant-making process" ? 

Mr. Marumoto. I would onlv amplify on that again and say we 
wanted to get the Spanish speaking more involved, so beside perhaps 
political impact there were the other considerations. 

Mr. Dash. If you Avill just turn quickly to exhibit No. 262-9, which 
is another weekly report, dated March 24, on page 2, i:)ara<rraph 5, and 
here Mr. Evans is now assumiiig a role, the jiaragraph 5 briefly states : 

Attended a meeting called by John Evans regarding minority business enter- 
prise. Asked that Armendariz and Rodriguez also be invited. Discussed were 
recipients of grants for fiscal year 1972 as well as those being considered for 
additional grants for fiscal year 1972. 

Now, Armendariz. as you pointed out, represented the political 
branch of the committee in the campaign, and what was the purpose 



5284 

of going over the recipients of the fiscal grant 1972, as well as consid- 
ering additional grants for fiscal year 1972 'i 

Mr. Marumoto. There Avere some instances where these recipients 
could get refunded so, for that reason, that particular group would 
be used, and I think there is a typographical error here in the second 
mention of 1972 should probably be 1973. 

Mr. Dash. 1973. 

Now, on page 3 of that same memo, paraoraph 15, you report that 
Rodriguez met with UMTA, what is UMTA ? 

Mr. Marumoto. That is the Urban JNIass Transportation Admin- 
istration which is under the Department of Transportation. 

Mr. Dash. And "Administrator Carlos Villarreal and his deputy 
to set aside $300,000 for one of our Spanish-speaking contractors. 
More details to follow." 

What is the meaning in that paragraph you wrote for "one of our"' 
Spanish-speaking contractors ? 

Mr. Marumoto. Well, let me before ansAvering that, explain the 
word "set aside." Under the Nixon administration, we established a 
minority business program out of SBA and Commerce where we 
could encourage more minority business, more minorities to get into 
business. This is a program which calls for a set-aside- — calls for a 
department or agency or funding organization can put aside so many 
dollars for a minority contract. In terms of our, I think, here we 
really meant one of our qualified, competent management consultants 
from the Spanish-speaking community. 

Mr. Dash. Well, but the reference is, this is obviously competition 
between the Spanish-speaking contractors. What is the meaning, to 
your best recollection, of the term "for one of our Spanish-speaking 
contractors" ? Would that mean a friendly contractor ? 

Mr. Marumoto. If I recall, there are only one or two Spanish- 
speaking firms that do any work in the transportation area so that, 
I think, beside this particular meaning of the Department of Trans- 
portation, there is one other meaning, and I think the firm is named 
so we covered both and I don't think they were competing against 
each other. 

Mr. Dash. You say it was not an effort here to prefer one over 
another. 

Mr. Marumoto. No, sir. 

Mr. Dash. Well, look at exhibit No. 262-11, which is your w^eekly 
report dated April 7 to Mr. Malek and Mr. Colson, and on page 2, 
paragraph 10a — do you have that, Mr. INIarumoto ? 

Mr. Marumoto. Yes, sir. 

Mr. Dash. "In the grants area" — you report — "Rodriguez and I 
are working on the following" — and the first thing you mentioned 
is — "Reviewing with John Evans, Bob Brown, and Wally Henley 
proposals and grants at OMBE to make sure the right people are 
being considered and receiving grants from OMBE." Wlio are the 
right people? 

Mr. Maritmoto. One, I — these are those who are eligible, qualified 
to get Government contracts. I think you have to remember there were 
very few Spanish-speaking firms that have gotten Government con- 
tracts during the past several years. One of the things we were trying 



5285 

to do was to get new ones involved, to make them qualified and file for 
funds. 

Mr. Dash. Would it be fair to say, included in that were also those 
sympathetic to the administration, the right people? 

Mr. Marumoto. I would say those who were supporters. 

Mr. Dash. Yes, sir, it would include qualified people as you told our 
staff. 

Mr. Marumoto. Yes, sir. 

Mr. Dash. But also those who are sympathetic to the administration 
or supportive. 

Mr. MarI' MOTO. Yes ; and I think here I would like to clear the air 
in terms of any — of the fact we weren't just looking for Republican 
contractors because in the Spanish-speaking communities there are 
very, very few, so we Avere I'eally looking for those who were supportive 
and qualified. 

Mr. Dash. Well, as I think you indicated earlier, the effort was for 
you and those who were working on the special program to fill gaps in 
the Federal Government, not just President Nixon's gaps, but gaps 
in earlier administrations, and filling these gaps was to bring in more 
Spanish-speaking Americans and I think as you have told us earlier, 
that a number of the Spanish-speaking Americans were actually Demo- 
crats, not Republicans, Was it not the effort of the Committee To Re- 
Elect the President to win over as many of the — and legitimately so — 
as many of the Democratic Spanish-speaking Americans to the cause 
of the reelection of the President? 

Mr. MarT' M'OTO. That is riglit. 

Mr. Dash. So that a number of these contractors would be Demo- 
crats but you would, at times draw a distinction between a qualified 
supporting Spanish-speaking American Democrat and a qualified 
nonsupporting one ? 

Mr. Marumoto. There might have been that occasion, yes, sir. 

Mr. Dash. Now, if you look at exhibit No. 262-19, which is your 
weekly report to Mr. Malek and Mr. Colson of May 26, 1972, and if 
you look at page 2, 5b, and there in your report to Mr. Malek and Mr. 
Colson you say : 

Expressed concern to OEO re a $3 million grant to the Mexican- American 
Unity Council only to find there wei-e some legal hangups to try to cut them 
off. They promised at least to monitor the group. 

What was the opposition to the Mexican-American Unity Council ? 

Mr. Marumoto. I tliink this was a situation where they had received 
a grant from OEO and before someone realized that they had a group 
that weren't necessarily supportive of the administration and there 
was some inquiry of trying to unfund them. Upon checking \Vith their 
general counsel we found that it could not be done. 

Mr. Dash. Was there any question as to their qualification ? 

Mr. Marumoto. I don't recall, sir. 

Mr. Dash. So the effort to unfund them, really, was based on their 
learning that they were nonsupportive ? 

Mr. Marumoto. Yes, sir. 

Mr. Dash. At least they were going to be monitored by OEO, that 
was at least the commitment you obtained. 



5286 

Now, in exhibit No. 262-15, which is another one of your weekly 
reports of May 5, 1972, to Mr. Malek and Mr. Colson, if you will turn 
to page 3 and look at paragraph 12 : 

Rodriguez is in the process of developing a list of all Spanish-speaking Federal 
employees, grades GS-14 and up, for various uses by 1701. 

Now, 1701 we all understand by now in this committee was the 
Committee To Re-Elect the President offices. 

Mr. Marumoto. Yes, sir. 

Mr. Dash. What uses were to be made of Spanish-speaking Federal 
employees, grades GS-14 and up by 1701 ? 

Mr. Marumoto. I seem to recall, Mr. Dash, that the purpose of this 
particular project, and I can't recall if it was completed, because we 
could not get any computer printouts that I can recall, but the pur- 
pose or intended purpose was to try to identify who they were in order 
that we can get them to assist us in identifying programs that the 
Spanish speaking could be involved in. In addition to help us state 
the case in terms of the administration's achievements in Spanish- 
speaking. 

Mr. Dash. In other words to utilize sojne of the Govei-nment em- 
ployees who were GS-14 and over as stating the best cause for the 
administration. 

Mr. Marumoto. Yes, sir. 

Mr. Dash. I take it you were concerned about the Hatch Act and 
what roJe that might play in their activities? 

Mr. Marumoto. Yes; but I don't think we asked them to get in- 
volved politically but to articulate to the best of their knowledge the 
achievements of this administration. 

Mr. Dash. And in a real sense that might even be a legitimate use 
of the incumbency because, if you had good programs and they could 
demonstrate them, this would also have an impact on the campaign. 

If you look at exhibit No. 262-16, page 3, paragraph 16, your re- 
port, another weekly report to Mr. Malek and ^Mr. Colson — 

Rodriguez met with Carlos Villarreal, administrator of UMTA, to talk about 
setting aside specific moneys for some of our Republican Spanish-speaking 
contractors. 

I think you have already explained what setting aside wa:s under 
the special program. But here this was a meeting with UMTA to set 
aside money for some of your Republican Spanish-speaking 
contractors. 

Mr. Marumoto. I think, Mr. Dash, tliis is one of the very few times 
that the word "Republican" was ever written in any of these reports. 
I don't think that that intention was really intended. 

Mr. Dash. Well, is it — again I think I am being perfectly fair, Mr. 
Marumoto, I think you have made it clear in your opening statement 
and the answers that you have made, tliere was a very substantial ef- 
fort made on your part to assist Spanish-speaking Americans and 
Spanish-speaking American businesses, but I think it is fair to say 
for the record, is it not, that in the eti'ort to do so, there was kept in 
mind the political impact that such activity would have and, as a mat- 
ter of fact, there was preference as you have already indicated on a 
number of occasions for those who were supportive to the program? 

What I am doing in a number of references in your report, is to 



5287 

show repeatedly in your reports to Mr. Malek and Mr. Colson that 
you were reporting meetings with various Federal agencies in which 
an effort was made to establish the relationship and to obtain, under 
either the response program or your own program, preference for 
supportive qualified Spanish-speaking Americans, is that a fair state- 
ment ? 

Mr. Marumoto. Yes, sir. 

Mr. Dasii. Now, there is a group of memorandums that I want to 
just quickly refer to after having talked about these in general, that 
deal with particular companies. 

Now, do you know the J. Reyes Association ? 

Mr. Marumoto. Yes, sir. 

Mr. Dash. They would be a District of Columbia company ? 

Mr. Marumoto. Yes, sir. 

Mr. Dash. What company were they and what did they do? 

Mr. Marumoto. IVIr. Reyes, the name of his firm is J. A. Reyes and 
Associates, he has had his own firm here in the District for, I believe 
over 10 years or so. I believe he is a Democrat but he headed up the 
Maryland, Virginia, District Committee for the National Hispanic 
Financial Committee. 

Mr. Dash. Now, I think on a number of your memorandums you 
indicate that progress has been made to obtain grants for him or to 
work on grants that were pending for him ? 

Mr. Marumoto. He had already received some Government con- 
tracts even before this program by the administration but then dur- 
ing the course of our efforts he again was involved, and I believe he 
did receive a few, yes. 

Mr. Dash. By the Avay, we have referred from time to time— you 
have said it and I have "repeated it with you — to grants to qualified 
Spanish-speaking American businessmen. How did you determine 
whether a particular business was qualified or not when you looked 
over a grant ? Who made that decision ? 

Mr. Marumoto. ITsually the program people in the departments and 
agencies. They advised us; if the firm was totally unqualified, we 
would have to explain that or have them explain it to these firms. But 
I would say, generally speaking, most of the firms that submitted pro- 
posals were well qualified. 

Mr. Dash. Well, if one was more qualified than another but not 
wholly unqualified, then this question of preference would come in, 
is that not true ? 

Mr. Marumoto. Excuse me ? 

Mr. Dash. If one of the contenders for the grant was more quali- 
fied than the other, although the other was not wholly unqualified — 
I think you mentioned if a person was completely unqualified, the 
agency would report that to you and you would not press for a grant. 
But if there was a question of — if one contractor who was not sup- 
portive of the administration was more qualified than another who 
was supportive, the preference would be given to the one that was 
supportive? 

Mr. Marumoto. Yes, but I think that was an exceptional situation. 

Mr. Dash. Did you personally know whether IVIr. Reyes' organiza- 
tion was a qualified organization? R-e-y-e-s? 



5288 

Mr. Martjmoto. Yes; I think so. I generally did not deal directly 
with these contractors or management consultants. 

Mr. Dash. Did you make any inquiries concerning them ? 

Mr. Marumoto. Yes. I think either Mr. Rodriguez or my staff did 
some checking on him and two or three of the agencies where the OEO 
had Government contracts. 

Mr. Dash. Now, a number just make reference to assistance to Mr. 
Eeyes, who, as you say, was the head of the District of Columbia, 
Maryland, and Virginia Hispanic Finance Committee to Re-Elect the 
President. On your exhibit No. 262-10, your INIarch 31 report, page 3, 
the bottom, paragraph 19, you report that you "worked with Ramirez 
re a grant application at OEO for Joe Reyes of Washington, D.C." 
Then, if you look at exhibit No. 262-15, page 2, 7b, "Department of 
Transportation, working with UMTA re a $70,000 grant and on J. A. 
Reyes Associates of Washington, D.C." Then even a comment to Mr. 
Malek and Mr. Colson : 

"He is the Chairman of the District of Columbia, Maryland, and 
Virginia section of the National Hispanic Finance Committee." 

On exhibit No. 262-37 — I am just selecting a few. There are some 
others, but I do not want to take the time to go through all the mem- 
orandums. On exhibit No. 262-37, page 2, 10a : "Following an inquiry 
from HUD, recommended they award a $50,000 film contract to Nick 
Reyes and Associates" — is Nick Reyes Associates the same or differ- 
ent? 

Mr. Marumoto. They are not related, sir. They are separate com- 
panies. 

Mr. Dash. That is a separate company, also of Washington, D.C. ? 

Mr. Marumoto. Yes. 

Mr. Dash. Now, this particular grant recommendation states : "Over 
two other Spanish-speaking firms," and then your comment is, "He 
has been most helpful to Carlos." 

Wlio is Carlos? 

Mr. Marumoto. That is Mr. Conde. 

Mr. Dash. Who was he? 

Mr. Marumoto. He was the fellow in charge of our communica- 
tions apparatus for the Spanish-speaking Americans. 

Mr. Dash. Now, it is because he was most helpful to Carlos that 
he was preferred for a $50,000 grant over two other Spanish-speaking 
firms? 

Mr. Marumoto. Mr. Reyes has his own Spanish-speaking TV show 
here in the District, or had at that time. His firm was in the com- 
munications business and he devoted a lot of his free time to Mr. 
Conde in terms of assisting him in setting up a viable communications 
organization. I do not recall who the other two firms were. 

Mr. Dash. Now, there was also a number of these other memoran- 
dums referring to efforts on your part involving an organization 
called SER. Were those initials for a particular organization, SER ? 

Mr. Marumoto. Yes, I do not recall the full name of SER, but 
they are a national Spanish-speaking manpower organization. 

Mr. Dash. I think we may have it here. Service Employment 
Redevelopment. 

Mr. Marumoto. Right. 

Mr. Dash. Does that sound familiar to you? 

Mr. Marumoto. Yes. 



5289 

Mr. Dash. If you look at exhibit No. 262-38, page 2, 9a, under, 
again, heading "Grants" — this is another weekly report. Do you 
have that? 

Mr. Treadweu.. What exhibit is that again? 

Mr. Dash. Exhibit No. 262-38. 

Mr. Treadwell. Yes. 

Mr. Dash. That is your weekly report of July 28, 1972, Mr. Maru- 
moto, to Mr. Colson. Under your heading, "Grants," on page 2, 9a : 
Ray Hanzlik, Rob Davison, Rodriguez and I have all been involved 
in increasing a grant for SER out of Labor. It will average out to 
about $18 million for fiscal year 1973." 

Was there any problem with regard to the ultimate obtaining of 
that very large grant of $18 million? 

Mr. Marumoto. If I recall, SER had received a considerably smaller 
grant from the Department of Labor for their manpower programs 
and they just needed assistance in terms of increasing that to make 
it a more viable organization. The people involved here — Mr, Hanzlik 
was at that time executive assistant to Mr. Finch, who had the policy- 
making responsibility to the Spanish-speaking. Rob Davison, who 
was part of our responsiveness unit, had the Department of Labor 
as part of his responsibility. And Mr. Rodriguez — that is another case. 

Mr. Dash. That is quite a large grant, $18 million. Compared to 
its program 

Mr. Marumoto. Excuse me? 

Mr. Dash. As I say, that is quite a large grant, $18 million, for 
fiscal year 1973. 

Mr. Marumoto. I think in relationship to the population of the Span- 
ish-speaking, it is very small. If I were to do it over again, I think I 
would recommend more money there. This was one of the very first 
times that the Spanish-speaking community ever got any money out of 
the Department of Labor. 

Mr. Dash. In exhibit No. 262-43, there is another reference to a 
SER grant. If you will look at paragraph 12a — I do not find that refer- 
ence myself to Mr. Armendariz. Turn to exhibit No. 262^5. If you will 
look at lib on exhibit No. 262-45, again you report that you were work- 
ing with SER officials and Rob Davison on the $18 million manpower 
grant from the Department of Labor. I think the accomplishment 
ultimately may have been, if you will look at exhibit No. 262-58, para- 
graph 37, you report in another weekly report that : 

Conde working with John Leslie of the Department of Labor on media event to 
announce an .$18 million contract to SER for job training for Spanish-speaking. 
The event will be staged in Los Angeles. . . . 

So, apparently, that went through ? 

Mr. Marumoto. Yes. 

Mr. Dash. Now, there is another organization — if you will turn back 
again, Mr. Marumoto, to exhibit No. 262-15, which I was looking at a 
little while ago, on page 3, which is paragraph 12. Again, this is one of 
your weekly reports and under "Grants" — 

Rodriguez discussed with Richard Zazueta, executive director of SER, about a 
complaint that his San Jose, Calif., director went to the Democratic convention as 
a McGovern delegate on SER time and funds. If true, we want disciplinary 
action taken against him. 

Now, was that because this is a violation of any regulation or law? 



5290 

Mr. Marumoto. Yes, he violated, I believe, the Hatch Act as an 
employee of a Federal program. That was brought to our attention by 
several individuals. 

Mr. Dash. Was this effort on your part to bring to the attention of 
those who could bring disciplinary action, the political activities of a 
person working for grantees, was that applied uniformly to those who 
might have been active in the campaign for the reelection of the 
President ? 

Mr. Marumoto. Excuse me, I did not understand your question. 

Mr. Dash. "Would your recommendation have been the same with 
this particular director, if his activities were for the reelection of the 
President ? 

Mr. Maruihoto. I think that we tried not to get those who were 
"Hatched" to get involved in the political arena. The recommendation 
was that they could articulate the achievements of the President in the 
Spanish-speaking area but not to campaign politically. 

Mr. Dash. Rut you did ask, did you not, the NEDA group for 
advance men and for space for the campaign ? 

Mr. Maruimoto. I did not understand you. 

Mr. Dash. Did you ask NEDA, which I think you have identified to 
us as one of the organizations for advance men, and space for the cam- 
paign for the reelection of the President. 

Mr. Marumoto. I did not, sir. 

Mr. Dash. Were you aware that they were asked ? 

Mr. Marumoto. I do not recall that. 

Mr. Dash. Xow, there are other Spanish-speaking organizations 
that were contractors. One was the Development Associates and I take 
it the head of that was Mr. Sanchez ? 

Mr. Marumoto. Yes, sir. 

Mr. Dash. Now, he didn't, apparently, fare as well. If you look at 
exhibit No. 262-36 — by the way, was he considered a supportive person 
for the administration? 

IMr. Marumoto. I think it was called to our attention from various 
sources that he was active with the Democratic National Committee 
and with Cesar Chavez, as well as having worked for 

Mr. Dash. I would like to ask, if that is the memorandum that you 
are reading from of July 19, 1972. to Mr. Bob Davison? We have 
mentioned his name. Who was Rob Davidson ? 

Mr. Marumoto. He was part, of the responsiveness group. He had 
the Small Business Administration as one of his liaison. 

Mr. Dash. And here now : 

Development Associates, headed up by Leveo Sanchez, is a Washington-based 
consulting firm that has been funded for ,$1 to $2 million by our Administration. 

Sanchez prior to formation of this firm was Regional Director of OEO under 
Sargent Shriver and prior to that, with the Peace Corps, working for Franli 
Mankiewicz (one of McGovern's Camnaign Co-Chairmen) and Jack Vaughn. 

Most recently, he was awarded a five-year grant for $722,383 from HEW to 
evaluate an experimental .«chool program and he also received an 8a SBA con- 
tract for over .$200,000 to evaluate bilingual educational programs in the United 
States. It also appears he will obtain a $30,000 grant from HUD, Region IX 
relatively .soon. In addition, he is prcsentl.v under consideration at the Depart- 
ment of Labor for a $70,000 grant. 

This is a clas.sic example of a firm, not necessarily on our team, which is 
making a comfortable living off of us. These are grants that we were aware of 
which indicates they may have a few others. 

I would recommend if it is not too late, we stop the proposals at the Depart- 
ment of Labor and HUD. 



5291 

Now bv the way, that was vour memorandum of July 19 and a 
return 'a "memorandum for Rob Davison from Alex Armendariz ot 
the CRP, who received a copy of your memorandum, says that, on 
the next page of that memo, this exhibit : 

We have inquired about Development Associates and have learned of their 
close ties witl? the DNC and Cesar Chavez. We fully concur with BUI Maru- 
moto to his memo of July 19th. 

In Other words, this was now a company, Development Associates, 
Spanish-speakincr American contractors, Leveo Sanchez, who was 
clearly not supportive, and the recommendation you make is that they 
be cut off ? 

Mr. Marumoto. Yes, sir. . ., . .i ^ 

Mr. Dash. Now, did you have any information that they were not 
a qualified organization ? 

Mr. Marumoto. No, sir, they were qualified. 

Mr. Dash. As a matter of fact, did you ever hear that Development 
Associates was one of the most competent firms in the business? 

Mr. Marumoto. I don't know if I heard it that way, but I did 

hear 

Mr. Dash. Well, they were competent ? 

Mr. Marumoto. Yes, sir. 

Mr. Dash. And the grant moneys that were given to these agencies 
by the Departments of Labor, HTTD, and the others that I have 
referred to were all moneys appropriated by Congress, moneys coming 
from taxpayers' funds. 

When you say "living off of us," who is "us" ? 

Mr. Marumoto. I meant this administration. 

Mr. Dash. The administration. 

"Living off of us" means the taxpayers' money as well, all the people. 

Mr. Marumoto. Yes. t j 

Mr. Dash. And because Mr. Sanchez happened to be closely alined 
to the Democratic efforts, your recommendation was that he be cut off. 
Clearly, that had nothing to do with qualification, had nothing to do 
with a Spanish-speaking American contractor. But it w\as certainly 
an effort, a punitive effort, would it not be 

Mr. Marumoto. Yes, sir. 

Mr. Dash [continuing]. Because of his lack of support for the 
administration. 

As a matter of fact, wdiat happened to Mr. Sanchez ? 

Mr. Marumoto. I believe he was graduated out of the 8(a) 
program? 

Mr. Dash. What does it mean to be graduated out of the 8(a) 
program ? 

Mr. Marumoto. The 8 (a) program is— earlier in our discussion, your 
questioning, which was geared for minority business firms — when you 
hit a certain amount of money, a certain amount of sales volume, like 
$2 or $3 million, then you get graduated where you have to compete 
against nonminority firms. 

:Mr. Dash. Right. Isn't it true, let me explain, that under the policy 
of this administration, 8 («) of the Small Business Administration Act, 
there was an effort to utilize the 8(a) money for disadvantaged contrac- 
tors and it's a sort of sheltered kind of program, and that once such a 
contractor got on his own feet and was able to do well, then you would 



5292 

want to move him out so that another person who needed that kind of 
money would get it ? 

]\Ir, ]Marumoto. Yes. 

Mr. Dash. Isn't it true that Mr. Sanchez' well-being came pri- 
marily from Federal grants ^ 

Mr. Marumoto. I believe so. 

Mr. Dash. And if you graduate him, he has to compete now, not 
in this favored, disadvantaged group under 8(«) in the policy, but 
he has now to compete with other grantees. 

jMr. ^Marumoto. That is right. 

Mr. Dash. As a matter of fact, if lie had a 3-year grant in which, 
under the special sheltered arrangejnent, he would only have 1 year 
of that grant operating and he hired ])eople in anticipation of the next 
few years, if lie was graduated out, would he not have to finish up that 
1 year and he would not get the balance of the 2 years ? 

Mr. Marumoto. That I don't know, sir. 

Mr. Dash. If you turn to page 53 — I mean exhibit No. 262-53, you 
will see the graduation diploma. This was sent on September 25. 1972, 
to oNIr. Leveo Sanchez, president of the Development Associates, Inc., 
by the Small Business Administration : 

Gentlemen : A recent review of your file indicates tliat the level of 8(a) con- 
tract assistance in the dollar amount requested in your business plan has nov? 
been attained. 

We are pleased to include your firm as one of the 8(a) "graduates" and sin- 
cerely hope that the contracts furnished to you have been instrumental in the 
progression of your firm to viability. Your success now permits other disad- 
vantaged firms a similar opportunity to participate in 8(a) program. 

We congratulate you for making such raiiid progress in developing your com- 
pany. The Small Business Administration staff is proud to have had a hand in 
your development. 

Obviously, once he gets this graduation letter and no longer fits 
within this program, he actually may not any longer be in a position 
to receive the grants that made him so viable. Is that true ? 

ISIr. Marumoto. Yes and no. I think he had a big enough firm that 
he could compete both in private and public sectors. 

Mr. Dash. Oh, he cannot compete ; yes, but there was a preferred 
role he was having prior to that. 

Mr. Marumoto. Right. 

Mr. Dash. Are you aware of any other graduates of Spanish-speak- 
ing American contractors ? 

Mr. Marumoto. Not offhand, sir. 

Mr. Dash. Mr. Sanchez happens to have been the most successful? 

Mr. Maruinioto. At that time, yes. 

]\Ir. Dash. Was there a political input on the decision as to who 
would graduate or not? 

INIr. Marumoto. In this case, yes. 

Mr. Dash. Did you know Avhethei- Mr. Sanchez was solicited by ]Mr. 
Reyes for any financial contributions ? 

Air. Marit'moto. I Avould think so. As an individual who was doing 
well here in the area, I am sure that ]Mr. Reyes, who was chairman of 
the National Hispanic Finance Committee for this area, would have 
done so. But I don't know for a fact. 

Mr. Dash. Did you have lunch with Mr. Sanchez 2 days before the 
memo ? 



5293 

Mr. Marumoto. I don't recall when I had lunch with him, but I did 
have lunch with him and also with someone else on the White House 
staff. 

Mr. Dash. Do you know whether Mr. Sanchez made any contribu- 
tions ? 

Mr. Marumoto. No, we didn't even talk about it, sir. 

Mr. Dash. Did you learn from Mr. Reyes whether he made any 
contribution ? 

Mr. Marumoto. I don't know, sir. 

Mr. Dash. I think with his affiliation, he probably did not. 

Mr. Marumoto. I don't recall such a discussion. 

Mr. Dash. Also, who is Ed Pena ? 

Mr. Marumoto. He was the director of, I believe, the Federal com- 
pliance over at the Equal Employment Opportunity Commission. 

Mr. Dash. There was some unhappiness with Mr. Pena. Do you 
recall what it was ? 

Mr. Marumoto. It seems to me there was an exhibit memo here. 

Mr. Dash. Yes, I probably can help you on it. Exhibit No. 262-17, 
page 2, lie. This is, again, one of your- weekly reports of May 19, 1972. 
You report that your "working witli Kingsley, Ramirez, and Rod- 
riguez, reclismissal of Ed Pena, director of compliance of EEOC." 

WhatisEEOC? 

Mr. Marumoto. It is Equal Employment Opportunity Commission. 

Mr. Dash. Why were you working with Mr. Kingsley, Mr. Ramirez, 
Mr. Rodriguez, to have him dismissed ? 

Mr. Marumoto. Mr. Kingsley was head of the patronage operation 
under Mr. Malek. We — Mv. Ramirez, Mr. Rodriguez, and I — had 
gotten several telephone calls and letters saying that Mr. Pena, who 
was in a civil service job, was actively campaigning at various Span- 
ish-sj^eaking meetings. 

Refer to exhibit No. 262-47. 

Mr. Dash. Exhibit No. 262-47 is a memorandum from David Flor- 
ence to Alex Armendariz, actually with regard to Mr. Pena. That is 
true, isn't it ? 

Mr. Marumoto. Yes, sir. 

Mr. Dash. That brief memorandum reads : "August 25, 1972. At our 
Nixon hospitality room during the LULAC Supreme Council" — what 
isLULAC? 

Mr. Marumoto. Tliat is the largest Mexican-American association, 
called the Elite of the United Mexican- American Citizens. 

Mr. Dash. At the meeting of the LULAC Supreme Council, it says : 

Ed Pena spent a great deal of time attempting to undermine our efforts. Some 
of the typical comments were the following : 

"I have posters of Nixon in my office showing a little pregnant girl pointing 
her fingers to 'Tricky Dicky' and saying 'he did it'." 

During the banquet, he addressed a group over the microphone with the 
following comment : 

"Earlier today. I attended a hospitality room for the re-election of the Presi- 
dent. The only president I recognized has already been elected. That president 
is Pete Villa." 

"Who is Pete Villa ? 

Mr. Marumoto. I am sorry. 

Mr. Dash. Who is Pete Villa ? 



5294 

Mr. Marumoto. He is the national president of that organization. 
Mr. Dash [continues reading] : 

"The only President I recognize has already been elected. That President is 
Pete Villa." 

Other comments tending to undermine our efforts were also made. 

Later, Pete Villa commented to me that Ed Pena thought LULAC was getting 
too Republican and that he, Ed, wanted LULAC to invite Shriver to the October 
Supreme Council meeting in Washington. 

It is my belief that one of the reasons Pete Villa and Roberto Ornelas fo'low Ed 
Pena around and speak up for him is so that they will be in "thick" with the 
McGovern Administration if McGovem is elected President. 

It is my belief that it would be wise to terminate Ed Pena from his position as 
a GS-18 at EEOC. 

The complaint, apparently, of the memorandum was that LULAC 
was becoming too Republican apparently, the memorandum, his recom- 
mendation was that someone would invite over Sargent Shriver or 
somebody from the Democrats, who would talk. 

Did you consider that the substance of this memorandum was polit- 
ical activity on the part of 

Mr. Marumoto. I think there is a lot more that isn't written down 
here in terms of his political activities, but generally speaking, yes, I 
would also say that he struck a number of j^eople in referring to his 
posters of Nixon in his office, showing a little pregnant girl, was ob- 
scene and disrespectful of the Office of the Presidency. 

Mr. Dash. And it was that kind of consideration that led to the rec- 
ommendation? 

Mr. ISIaruimoto. Yes. 

Mr. Dash. In other words, was he fired ? 

Mr. INIarumoto. There was considerable discussion with Chairman 
Bill Brown at EEOC, who was the head of that agency, but he was 
not : nothing occurred, to my knowledge. 

]Mr. Dash. Was there anything different from what Mr. Pena was 
doing than from what various persons were doing who were working 
in similar positions who may have been Republicans? 

]\Ir. Marumoto. I don't think so. 

Mr. Dash. So in a sense, this, too. was an act, although maybe proper, 
based on the evaluation of his activity, that was directed against him 
because he was against the administration, not for the administration. 

Now, do you know a person named Judge Hernandez ? 

Mr. INIarumoto. Yes, sir. 

]\Ir. Dash. Who was he ? 

Mr. INlARi^iNroro. Alfred Hornandoz used to be a judge. I am not 
sure what kind of court. He is froin Houston, Tex., where he was a 
three-time national president of IJ^LAC, a verv active Democrat. 
There were some discussions between the judi^e and some members of 
our staff as to his support of the Piesident during the election. 

Mr. Dash. As a matter of fact, in exhibit No. 26'?-24, in your 
weekly repoit to INIr. Malek and INlr. Colson of June 9, on page 2, 
paragraph 7, you say : 

Alex Armendariz, Carlos Conde, Rodriguez and I met with .Tudge Alfred Her- 
nandez of Houston. Texas, re his interest in supporting the President. He is a 
lifelong Democrat iind national leader, who is very well known in the Mexican- 
American community. 

Now, if you will turn to exhibit No. 262-44; there are a series of 
memos and letters. The first one is a memorandum of August 18, 1972, 



5295 

memorandum from you to John Clarke. Have we identified John 
Clarke? 

IVIr. Marumoto. No. 

Mr. Dash. Who is John Clarke ? 

Mr. Marumoto. He was part of our executive team there at the 
White House. 

Mr. Dash. Subject of the memorandum is Judge Alfred Hernandez : 

If any vacancies come up for the Federal bench in Texas, 1701 and our opera- 
tion would like to see Judge Hernandez appointed. 

He is a Democrat who is presently heading the Spanish-speaking Democrats 
for the President and is a three-time past national President of LULAC, the 
largest Chicano service organization in the country. 

It would be a real coup if we could appoint him. 

By that time on August 18, he had accepted his position as head of 
the Spanish-Speaking American Democrats for the President. Now, 
there is a letter that you wrote on June 12, 1972, after having a meeting 
apparently, with Judge Hernandez. I think he was a judge at one 
time. Page 2 of the same exhibit. 

Mr. ]\Iarumoto. Yes, sir. 

Mr. Dash. He was once a judge or is a judge ? 

ISIr. IMarumoto. Yes, he was in private practice at this time. 

Mr. Dash. But you still refer to him as Judge Hernandez. 

Your letter is dated June 12, and you say to him : 

It was good to have seen you again and particularly to hear of your interest 
in supporting the re-election of the President. 

I want to emphasize that if you implement your plans as we discussed, the 
President will adequately recognize you. 

Look forward to seeing you at the LULAC National Convention. 

All good things to you, William Marumoto, Staff Assistant to the President. 

Now, page 3 of that exhibit. 

Apparently, on June 8. just prior to that which probably led up to 
that meeting, is a memorandum which is to a blank person, you might 
explain why it was for anybody from Alex Armendariz and whoever 
would go see him. 

Mr. Marumoto. Yes. 

Mr. Dash. In other words, whoever would go to see Judge Hernan- 
dez, Armendariz would write him a memo and that would be you and 
it said : 

With reference to your appointment tomorrow, Alfred Hernandez is past three 
term national chairman of the League of United Latin Americans Citizens 
(LULAC) and is presently serving on the Democratic National Advisory Com- 
mittee. Mr. Hernandez has campaigned vigorously for Democrats (Humphrey in 
1968 included) in past elections and is a well known Democrat. 

Impressed with the President's record in assisting Spanish-.speaking and dis- 
enchanted with a lack of recognition from Democrats, Mr. Hernandez is consider- 
ing taking action in public support of the President. Preliminary discussions in- 
volved the possibility of Mr. Hernandez coming to Washington along with other 
leading Spanish-speaking Democrats for a press conference to be held one week 
after the National Democratic Convention and articulating their support of the 
President. Mr. Hernandez has hopes that this move will bring him better recogni- 
tion than he has received from Democrats. His final decision will be made within 
a few days after the National LULAC Convention, June SOtli to July 1st, unless 
you can help get him committed now. 

Apparently, he was committed later. 

By the way, did he to your knowledge, ever receive any appoint- 
ment? 



5296 

Mr. Marumoto. He was offered the commissionership on the Con- 
sumer Safety Products Commission earlier this year but turned it down 
because he decided he did not want to come to Washington. 

Mr. Dash. Now, in a number of these memorandums, Mr. Marumoto, 
I have been referring to various grants that you had or this responsive- 
ness program that had something to do with Spanish-speaking Ameri- 
can grantees, and in order to sort of quantify that to some extent, we 
have prepared and, I think we have shown you a list and I do not 
know whether you have had an opportunity to examine it, but we have 
taken this from the various grants that have been referred to and it is 
a three-page list which totals for the 45 firms, nine departments and 
agencies involved and of a total of about 60,000 — $60 million, excuse 
me, $89,000 in grants, so approximately $61 million in grants were 
achieved, which — ^by your efforts and the efforts of all of those who 
were attempting to fill the gap, as you explained in your earlier memos. 

Mr. Marumoto. Mr. Dash, I would like to clarify that. These grants 
were not achieved. These were grants and contracts that we were try- 
ing to get for Spanish-speaking contractors and organizations, but 
many of them did not get it. 

Mr. Dasti. Many of them did not get through ? 

Mr. Marumoto. Right. 

Mr, Dash. Or may be pending ? 

Mr. Marumoto. Right, for one reason or another they could be 
pending. 

Mr. Dash. Your testimony is that the effort amounted to about 
$61 million in grants. 

Mr. Marumoto. That we could identify. 

Mr. Dash. Right, and again, this is my last question at this time, 
these amount of grants that you have identified and were attempted 
to direct toward Spanish-speaking businessmen, contractors, in large 
part were tied up to a responsiveness program and a responsiveness 
program was an effort to reward, as you would put it, to the extent that 
you knew they were qualified supportive businessmen and contrac- 
tors of the administration. That was sort of the thrust of it. And again, 
I want to in all fairness, state that it was to aid the Spanish-speaking 
American contractors but in this case aid, more than others, those 
who were supporting the administration, is that true ? 

Mr. Marumoto. Yes. 

Mr. Dash. At this time, Mr. Chairman, I have no further questions. 

Senator Baker [presiding]. Mr. Dash, thank you very much. The 
witness will be examined next by Mr. Don Sanders, who is the deputy 
minority counsel. 

Mr. Sanders. Mr. Marumoto, to your knowledge, did any firms, 
any minority enterprises, receive any contracts for which they were 
not qualified ? 

Mr. Marumoto. I am not aware of any but that could be a situation, 
sir. 

Mr. Sanders. Do you have knowledge of any firms not qualified 
being encouraged to make application for contracts or grants ? 

Mr. Marumoto. I do not recall any. 

Mr. Sanders. It was, as I undei-stand then from your tes.timony, 
the policy of the administration to put contracts and awards into the 



5297 

hands of minority enterprises in order to increase their share in the 
business activity in the United States. Is that correct ? 

Mr. Marumoto. Yes. 

Mr. Saxders. Was this not a policy based on official reo;nlations of 
the Department of Labor and the Small Business Administration? 

INIr. Marumoto. That is right. 

Mr. Sanders. And did this not have some statutory basis ? 

]Mr. Marumoto. It sure does. 

Mr. Sanders. In the Economic Opportunity Act ? 

Mr. Marumoto. That, I am not aware of. 

Mr. Sanders. Was it not the thrust of those official policies to ac- 
tually encourage the participation of minority enterprise in America? 

Mr. INIarumoto. That is right. 

Mr. Sanders. To your knowledge, did anyone working under your 
direction or in association with you, solicit applications from firms 
who were not qualified ? 

Mr. Marumoto. I am not aware of that, sir. 

Mr. Sanders. Do you have knowledge that once applications for 
any unqualified firms were made that you are anyone associated with 
you pressed for awards to such firms ? 

Mr. Marumoto. I do not recall any. 

Mr. Sanders. I have not seen this list of awards that Mr. Dash 
made reference to. This three-page document indicates there was a 
total of $60 million in contracts and grants, I presume awarded to 
minority enterprises. 

Mr. Marumoto. These were not awards, sir. I think that the heading 
on this list is misrepresented in that they were not effected. This reads, 
"Contracts and grants affected by Marumoto." That is not correct, 
sir. That is correct if one is going to put a heading on it that should 
read grants and contract proposals that we were involved in. 

Mr. Sanders. Well, can you tell from looking at this, is it in fact 
a listing of contracts and grants which were effected ? 

Mr. Marumoto. Effected ? 

Mr. Sanders. Which were effected, concluded. 

Mr. Marumoto. No ; they were not all successful, sir. 

Mr. Sanders. They were not successful. Some of them were ? 

Mr. Marumoto. Pardon me ? 

Mr. Sanders. Some of them were? 

Mr. Marumoto. Effected ? 

Mr. Sanders. Yes. 

Mr. Marumoto. Yes, sir. 

Mr. Dash. Did you say "affected" or "effected" ? 

Mr. Sanders. I deliberately chose the word "effected." 

Senator Baker. I am not going to mediate. 

Mr. Dash. That was the caption. 

Mr. Sanders. Your indication here, I understand what you mean 
here by the title but I was seeking information in a diffierent respect. 

Did you or your associates in the "Wliite House at any time make an 
estimate of the total amount of money which might be available for 
awarding of contracts and grants to minority enterprises? 

Mr. Marumoto. I think we tried to do this but because there was 
not anyway of calculating this within the departments and agencies, 



24-650 O - 74 - 3 



5298 

I do not think it ever happened. In fact this is the first time I have 
ever seen a listing of proposals from the Spanish-speaking community. 

Mr. Sanders. You are not able to state an approximate sum which 
might have been available ? 

Mr. Marumoto. No, sir. 

Mr. Sanders. Can you state the total amount which was awarded 
to minority enterprises in the last fiscal year ? 

Mr. Marumoto. No, sir; I could not do that. I am sure that it might 
be an overall record but I do not know how that would break out in 
terms of Spanish-speaking firms or black firms or other minority 
firms. 

Mr. Sanders. Did you ever calculate the amount which was awarded 
to any firms, which was awarded to firms to which you provided some 
encouragement or assistance ? 

Mr. Marumoto. No, sir. I think our main objective was to help 
these individuals and firms to get contracts or grants and to get the 
greatest impact out of that but we never, to my knowledge, calculated 
the amount of money that any individual or organization had. 

Mr. Sanders. Mr. Marumoto, did you solicit at any time any votes 
from any persons who were associated with any minority enterprise? 

Mr. Maritmoto. Any votes ? 

Mr. Sanders. Yes. Any votes for the reelection of President Nixon. 

Mr. Marumoto. No, sir. 

Mr Sanders. To your knowledge, did anyone working under your 
direction or associated with you solicit any votes from any persons 
connected with minority enterprises ? 

Mr. Marumoto. Not that I am aware of, sir. 

Mr. Sanders. Did you 

Mr. Marumoto. Can I just amplify that a little bit. I think here the 
officials over at the Committee for the Re-Election as well as the 
National Hispanic Committee — finance committee really took that 
responsibility. 

Mr. Sanders. I was speaking of persons within the White House. 

Mr. Marumoto. No ; I am not aAvare of any, sir. 

Mr. Sanders. Did you solicit any contributions from any persons 
associated with minority enterprise ? 

Mr. Marumoto. In terms of the National Hispanic Finance Com- 
mittee again the chairman and his committee would actively solicit 
any contributions. We never did. There was one instance though that 
I would like to bring to your attention in terms of an Hispanic- Ameri- 
can firm in Texas. The gentleman whose name is Claudio Arenas and he 
is the head of [conferring with counsel], I can't recall the name ol 
the firm but the party's name is Claudio Arenas from, I believe, Dallas. 
He, during, I believe, 1972 or it could have been 1971 for that matter, 
discussed with my deputy, Mr. Rodriguez, the fact that he did not 
want to make a political contribution to either the National Hispanic 
Finance Committee or to the Texas State Republican Committee. 

Mr. Sanders. I think you might find this in exhibit No. 262-50, and 
see if that is what you are looking for. 

Mr. Treadwell.' Did you say exhibit No. 262-50 ? 

Mr. Sanders. Fifty. Is that what you are referring to ? 

Mr. Marumoto. No. He contacted Mr. Rodriguez and indicated 
he did not wish to make a political contribution to either of those 



5299 

two organizations but that he felt very, very strongly of what we 
were trying to do, in terms of the Spanish-speaking people through- 
out the Federal Government, and suggested that he would like to 
make a donation to what w^e were trying to do, so he gave Mr. 
Rodriguez, and I don't know now the exact date or what it was, 
$2,000 in cash in various dollar amounts to one, to be used for some 
of our special activities. During this period of time I think we spon- 
sored about five or six receptions or dinners, mostly here in Wash- 
ington, for the Spanish-speaking leaders throughout the country, 
and there were costs incurred for postage, printed invitations, re- 
freshments, hors d'oeuvres and most of that money was spent for those 
functions. The other part of it, Mr. Rodriguez gave me $800 of this 
$2,000 in cash, which I had in a white envelojie in my office located 
in a file cabinet to be used to buy gold medallions of the President, 
I believe, 1968 inaugural from the Department of the Treasury. One 
of the things we tried to do, when T was at the White House, was 
accommodate as many of the Spanish-speaking people who came 
into Washington through various means and one thing we did do, 
when they came into the office, was to give them a momento such 
as a color photograph of the President, a gold pen with the Presi- 
dent's signature, these medallions and some other things and that 
was done before and after the election [conferring with counsel]. 
There were other instances, maybe two or three and I don't even re- 
call what they were, where individuals, not necessarily contractors, 
wrote saying they wanted to contribute to our offices for the Presi- 
dent's campaign. We sent those letters back to those individuals and 
suggested how they could make a contribution. I believe you will 
find those records in my files at the White House. 

Mr. Sanders. Why didn't you send those directly over to the fi- 
nance committee? 

Mr. Marumoto. We sent the check. You mean these checks I am 
referring to ? 

Mr. Sanders. Yes. 

Mr. Marumoto. I guess it was a matter of mechanics but I sug- 
gested that they send it directly. I think in most cases that I can re- 
call, for one reason or another, they would have personality prob- 
lems with those at the National Hispanic Finance Committee. Plus, 
it is legally not my job to accept any political contributions. 

Mr. Sanders. So you felt that by sending it directly to the fi- 
nance committee there would be, at least could be, an appearance of 
some impropriety ? 

Mr. Marumoto. Pardon me ? 

Mr. Sanders. Would you have thought that by sending it direct- 
ly to the finance committee there could even be the appearance of some 
impropriety ? 

Mr. Marumoto. Perhaps. 

Mr. Sanders. This $2,000 which Mr. Arenas 

Mr. Marumoto. Yes, sir. 

Mr. Sanders [continuing]. Gave to Mr. Rodriguez, did Mr. Rod- 
riguez solicit that from Mr. Arenas ? 

Mr. Marumoto. I don't believe so, sir. Mr. Arenas, sir, I think 
wanted to make some kind of contribution and there was a tangi- 
ble way of doing it. 



5300 

Mr. Sanders. Did you suggest to Mr. Rodriguez or direct him to 
contact Mr. Arenas for this contribution ? 

Mr. Marumoto. No, sir. They had known each other previous to 
this and I don't know — I believe Mr. Arenas called him saying he 
wanted to make some kind of contribution and they had a discussion 
about it. Mr. Rodriguez asked me, told me about the situation, and I 
guess I made that final judgment to go the route that we did. 

Mr. Sanders. In fact, this money had never found its way to the 
finance committee or to the CRP for use in the campaign ? 

Mr. Marumoto. Right. He didn't want it that way. 

Mr. Sanders. Did you use any of these funds for any personal gain ? 

Mr. Marumoto, No, sir. 

Mr. Sanders. Or to your knowledge, did Mr. Rodriguez ? 

Mr, Marumoto. No, sir, I did not, and the record, I think, will show 
that. 

Mr. Sanders. Were you counseled or directed or encouraged by any 
persons to whom you reported in the White House to seek political 
contributions from minority enterprises ? 

Mr. Marumoto. No, sir. 

Mr. Sanders. Would you have judged that you were, in fact, not 
entitled to do so or were not authorized to do so ? 

Mr. Marumoto. Right. Let me just emphasize. I didn't see any role 
in terms of soliciting any kind of contribution or trying to work 
directly with these contractors, grantees. But it was more a thrust 
of getting things done for the Spanish-speaking. 

Mr. Sanders. Do you have knowledge as to whether any persons 
in the White House or in any of the Departments, any persons who had 
any responsibility whatsoever for any aspect of a decision affecting 
the grant of an award or contract, solicited funds from any minority 
enterprises ? 

Mr. Marumoto. I am not aware of any, sir. We didn't work that 
closely with the other special interest groups or individuals who 
were outside of our area. 

Mr. Sanders. Would it be fair to say then, that part of your pro- 
gram, one of your responsibilities, was to insure that the administra- 
tion received some recognition for awards which were made to minor- 
ity enterprises. 

Mr. Marumoto. That is right. 

Mr. Sanders. Is there anything illegal in this ? 

Mr. Marumoto. Not that I know of, sir. One of the things we wanted 
to do was to publicize it very loudly. Any grants or contracts that 
the Spanish-speaking got from the Federal Government to make sure 
the Spanish-speaking media throughout the country got any kind 
of attention. 

Mr. Sanders. Did you view this as in any way being unethical? 

Mr. Marumoto. No, sir. 

Mr. Sanders. Based on your experience in Government, particularly 
in the award area, have you had occasion to observe any practice 
whereby Congressmen and Senators make public announcements of 
grants and awards which are given to persons or firms within their 
own districts? 

Mr. Marumoto. Right. We worked with them, too. 

Mr. Sanders. Democrats and Reijublicans ? 



5301 

Mr. Marumoto. Yes, sir. 

Mr. Sanders. And by such public announcements by the Congress- 
man or Senator, thereby receiving some measure of recognition for this 
award in liis dist rict ? 

Mr. Marumoto. Yes, sir. 

Mr. Sanders. Do you know whether, in reference to exhibit No. 262- 
53, do you know whether LaKaza solicited Sanchez for a contribution? 

Mr. Marumoto. I don't know that for a fact, sir. 

Mr. Sanders. AVith respect to seeking persons to fill positions within 
the executive branch of Government, do you know of any persons re- 
ceiving ap})ointments to vacancies for which they were not qualified? 

Mr. Marumoto. I don't recall any, sir. I think most of those who were 
appointed were carefully screened. We did recruiting efforts on a 
national basis to find the best qualified and most competent men or 
women to join the administration. 

Mr. Sanders. To your knowledge, were any contracts or grants 
awarded on the basis of your recommendation ? 

Mr. M.\RUM0T0. Well, I think it was a combined recominendation 
of a number of us, people in the responsiveness group, individuals and 
officials at the Committee To Re-Elect, and then our operation. 

I would say the department or agency also had a big hand in making 
that decision. 

Mr. Sanders. Did not the department or agency, in fact, have the 
final authority over the decision ? 

Mr. Marumoto, That is right, and that occurred on a number of 
occasions, as you can tell by this list that the majority of the commit- 
tee compiled. 

Mr. Sanders. Mr. Chairman, I have no further questions at this 
time. 

Senator Baker. Thank you, Mr. Sanders. 

Senator Montoya. 

Senator Montoya. Mr. Marumoto, who placed you in charge of this 
particular division under Mr. Malek ? 

Mr. Marumoto. That decision was made concurrently by Mr. Colson 
and INIr. Malek. 

Senator Montoya. When was this done ? 

Mr. Marumoto. I believe sometime in 1971. I don't recall the exact 
date, sir. 

Senator Montoya. When did you really start to activate the mission ? 

Mr. Marumoto. I believe we started in late 1971. 

Senator Montoya. I know that most of your memorandums here are 
dated 1972, starting about March and April. 

Mr. Marumoto. I think there were some before, I am almost sure. 
Senator, there were memorandums before that time. 

Senator Montoya. What were you doing in 1971 ? 

Mr. Marumoto. I was working both in recruiting individuals for 
sub-Cabinet positions throughout the executive branch and also in the 
Spanish-speaking area. 

Senator Montoya. When did you start working on these projects 
to try to get grants for these minority organizations ? 

Mr. Marumoto. I believe it was about the latter part of 1971, sir. 

Senator Montoya. And how many grants would you say you got 
through your organization at the White House for these minority 
groups ? 



5302 

Mr. Marumoto. We never kept a list of that, Senator, so I couldn't 
tell you how many or what the amounts were or who they were. 

Senator Montoya. Didn't you get any reports? 

Mr. Marumoto. No, sir. They were in the memorandums. We never 
made separate reports. 

Senator Montoya. I notice in your opening statement that you, on 
page 2, you make a statement President Nixon set out to do something 
about meeting the needs of the Spanish-speaking. He created a statu- 
tory cabinet committee on opportunities for Spanish-speaking people. 

Did the President do this? 

Mr. Marumoto. Yes ; he did, sir. 

Senator Montoya. How did he do this ? 

Mr. Marumoto. He did that by legislation and signed that law on 
December 30, 1969. 

Senator Montoya. Did he recommend it ? 

Mr. Marumoto. No. 

Senator Montoya. Initially? 

Mr. Marumoto. Pardon me ? 

Senator Montoya. Did he recommend it initially ? 

Mr. Marumoto. I believe there was another organization under Pres- 
ident Johnson called the inneragency • 

Senator Montoya. It was an ad hoc committee under President 
Johnson that started this, wasn't it? 

Mr. Marumoto. Right. 

Senator Montoya. And then I introduced the bill in the Senate on 
my own initiative, without recommendation from the President, and 
that is how this was created. 

Mr. Marumoto. I was not aware of that. 

Senator Montoya. Yes; I just wanted to clear the record here. 

Now, can you tell us what the Cabinet level committee has done for 
the Spanish-speaking people? I notice that all your memorandums 
are concentrated on getting grants from other departments and no 
credit is given to the Cabinet level committee. Now, did they do any- 
thing for the Spanish-speaking people ? 

Mr. Marumoto. I think so, Senator. 

Senator Montoya. Like what ? 

Mr. Marumoto. Well, for instance, they were also very — we worked 
together, I might say, very closely and any of these things that took 
place, they were also very actively involved. To give you an example, 
whenever we wanted to find qualified individuals for any positions, 
the members of that committee, both staff and the advisory council, 
were notified of these opportunities. [Conferring with counsel.] And 
there were a number of other things that they got involved in. 

Senator Montoya. I have been trying to get a report from them as 
to what they have done and they haven't been able to furnish me one. 
I do know that Mr. Ramirez went all over the country campaigning. 

Mr. Marumoto. Excuse me. Senator. I did not hear your question. 

Senator Montoya. I do know Mr. Ramirez went all over the country 
campaigning for President Nixon. 

Mr. Marumoto. He certainly did a lot of traveling last year to ar- 
ticulate the achievement of the administration, yes, sir. 

Senator Montoya. What did you do about Leveo Sanchez? Did you 
send him down and tell him just how grateful he should be to the 
administration for all the grants which he had received? 



5303 

Mr. Marumoto. No, sir. 

Senator Montoya. Are you sure you didn't send him down with the 
people in the Department of Labor and tell him about these things and 
also exhort him to show his appreciation through a little contribution? 

Mr. Marumoto. No, sir. 

Senator Montoya. Now, if he states that in subsequent testimony, 
would you deny this? 

Mr. Marumoto. Yes, sir. 

Senator Montoya. Now, do you remember a meeting that you had 
with liim about the time that contributions were in season, with Mr. 
Wimmer of the Department of Labor? 

Mr. Marumoto. Yes, sir. 

Senator INIontoya. And that was 2 days before you submitted the 
memorandum of July 19, was it not? 

Mr. Marumoto. I don't recall the exact date that I had lunch with 
him. 

Senator Montoya. It was at that time, too, that you suddenly sug- 
gested to him that he should make a contribution and he refused? 

Mr. Marumoto. No. To the best of my recollection, Senator, there 
was no discussion whatsoever in terms of any political — in terms of 
the — of any contribution to the campaign. 

Senator Montoya. What made you suggest in the memorandum that 
he was getting fat and he was not very considerate or appreciative? 

Mr. Marumoto. I don't think I worded it that way. 

Senator Montoya. Well, that is the import of it. 

Here is what you say, "This is a classic example of a firm not neces- 
sarily on our team which is making a comfortable living off us. These 
are grants that we are aware of which indicates they may have a few- 
others." 

What did you mean by that paragraph? 

Mr. Marumoto. That he was extremely well. 

Senator Montoya. What did you mean when you said that he was 
"making a comfortable living off of us"? 

Mr. Marumoto. Again, that his volume of business was extremely 
well and he had a good income. 

Senator Montoya. On July 24, there was another memorandum 
from Alex Armendariz, presumably he was investigating this for you, 
and the memorandum indicates as follows and I quote: 

"We have inquired about Development Association and have learned 
of their close ties with the DNC and Cesar Chavez. We fully concur 
with Bill Marumoto of July 19." 

Now, what interconnection does the observation of Mr. Armendariz 
have Avith your memorandum of July 19 ? 

ISIr. Marumoto. That we both made the same observations of Mr. 
Sanchez. 

Senator Montoya. In other words, you were not very well pleased 
with his cooperative spirit or cooperation with respect to the reelection 
campaign of Pi-esident Nixon. 

Mr. Marumoto. No, sir. I did not discuss any cooperativeness or of 
any conrtibutions with Mr. Sanchez. I think what came up was his 
background in terms of his activities with the Democratic Party. 

Senator Montoya. Tell me about Ed Pena, why were some people 
anxious to get him fired ? 



5304 

Mr. Marumoto. He was just vocally expressing ant i administration 
sentiments. 

Senator Montoya. Did the White House have a policy of doing that 
to every employee in the Government who was against the President? 

Mr. Marumoto. No, sir. 

Senator Montoya. Why did you pick on Mr. Pena ? 

Mr. Marumoto. I guess he was the most visible. 

Senator Moxtoya. Do you know whether or not Mr. Pena has been 
told that he was on the White House list to be fired by the new EEOC 
chairman? 

Mr. Marumoto. No, sir, I believe that matter has been long dropped. 

Senator Montoya. Do you know whether anything else has ? 

Mr. Marumoto. No, sir. 

Senator Montoya. Do you know whether Mr. Tom Robles has? Do 
you know Mr. Tom Robles ? 

Mr. Marumoto. I don't recall meeting him, sir. 

Senator Montoya. This is one of the regional directors in the Al- 
buquerque office. 

Do you know whether they have been told ? 

Mr. Marumoto. I don't know, sir. 

Senator Montoya. How many grants have you procured through 
your setup at the White House since November ? 

Mr. Marumoto, November of last year. 

Senator Montoya. Of last year ? 

Mr. Marumoto. I don't recall, sir. 

Senator Montoya. Do you mean you forgot, since November, about 
cooperating with these people ? 

Mr. Marumoto. We haven't had a list, sir. 

Senator Montoya. Did you make any effort to obtain any grants for 
these people ? 

Mr. Marumoto. Let me just explain that the day after the election, 
I went back into Fred Malek's operation in terms of executive recruit- 
ing for positions, so I was out of the responsibility for Spanish-speak- 
ing. There was a gap there when my responsibilities and Mr. Finch's 
responsibilities were transferred to Anne Armstrong who is now 
counselor to the President, so I was really out of that responsibility. 

Senator Montoya. And did you leave any memorandums with him, 
with the moral responsibilities you had in view of the assurances that 
these people were given to file applications and their applications 
would be considered? 

Mr. Marumoto. When Mrs. Armstrong came on the staff and was 
somewhat settled, I gave her a briefing on what we were doing in the 
Spanish-speaking area and gave her all of our files. 

Senator Montoya. You don't know what has been done since ? 
Mr. Marumoto. No, sir. 

Senator Montoya. Now, you mentioned that the National Hispanic 
Finance Committee had solicited some camjiaign funds and that you 
had, and that it had realized collection of contributions in the total 
amount of $400,000, Now, Avhat happened to these conti-ibutions? 

Mr. Marumoto. Those contributions are recorded with tlie national 
finance committee, sir. 

Senator Montoya. And were any of these contributions from the 
contractors which received benefits from the administration? 



5305 

Mr. Marumoto. I am sure that some of them are included. On the 
other liand, already a number of other individuals \\ho were able to 
make a contribution did so through that connnittee. 

Senator Montoya. Now, you mentioned in the testimony which you 
presented in executive session to the committee staff that the respon- 
siveness group^ — that is what you called your group, was it not ? 

Mr. Marumoto. That was not our group, sir. 

Senator Montoya. Whicli was the responsiveness group ? 

Mr. Marumoto. They were another part of the White House opera- 
tion that was initially under Mr. Malek and I believe under Dan Kings- 
ley. There were four or five individuals. 

Senator Montoya. Will you mention that group ? Who were they ? 

Mr. Marumoto. Stan Anderson, Frank Herringer, Rob Davison, 
Jerry Jones, and Dan Kingsley now. I also mentioned in executive ses- 
sion the other day that I was not quite sure about the overlap there and 
I could have left out one or two people. We have had some changes 
because some of them went over to the campaign staff. 

Senator Montoya. Did you mention the names of contractors or 
grantees to any particular finance group yourself ? 

Mr. Marumoto. From time to time, I had discussions with particu- 
larly Mr. Fernandez, who was the chairman of that committee, in 
terms of high-level appointments, in terms of some of the contractors. 
There was no formal arrangement there. He never asked me for a list, 
nor did I give him one. There were also discussions in other areas 
affecting the Spanish speaking. 

Senator Montoya. Well, there was a desire on the part of the people 
in the White House, including those in the responsiveness group, to 
ti*y to get some contributions from these people who had received 
contracts or grants, was there not ? 

INIr. Marumoto. On the part of the White House ? 

Senator Montoya. On the part of the responsiveness group in the 
White House ? 

Mr. Marumoto. No, sir. 

Senator INIontoya. Did you not testify in executive session as fol- 
lows : 

In turn, the responsiveness group would encourage the persons applying for a 
grant or contract to give political contributions directly to the National His- 
panic Finance Committee. 

Mr. Marumoto. Sir, I do not recall making that statement, but I do 
not believe any of the responsiveness group people knew any of these 
contractors directly. 

Senator Montoya. Did you not also state that in addition, they were 
encouraged to contact friends and solicit other contributions? 

Mr. Marumoto. I do not recall that I said that. 

Senator Montoya. That is part of the written summary that I have 
here before me. 

"Wliat did you state to the staff in your interview ? 

Mr. Treadwell. Senator, we would like to refresh our recollection 
of our testimony in that executive session with notes that we made. 
Then perhaps we can be more directly responsive to those questions. 

Senator Montoya. All right, you may do so. 

Mr. Treadwell. Also, is it possible that we can have from the staff 
a copy of that summary ? That might be helpful. 



5306 

Senator Montoya, It appears on pa^e 11. I was quoting verbatim 
from the summary. 

Mr. Dash. Mr. Marumoto, I think it is the last paragraph on the 
first page that I think is relevant. 

Mr. Marumoto. Senator, I do not recall this wording in the last 
two sentences of the last paragraph on page 1 : 

In turn, the responsiveness group would encourage the persons applying for 
a grant or contract to give contributions directly to the National Hispanic 
Finance Committee. In addition, they were encouraged to contact friends and 
solicit other contributions. 

I do not recall saying that in the executive session. First of all, I 
think the earlier responsiveness group staff members did not have any 
direct contact with the applicant. 

Senator Montoya. What did you 9tat«, then ? 

Mr. Marumoto. I cannot get this in the proper perspective, because 
we are talking about two or three things here. 

Senator Montoya. Let me turn you over to the next page, second 
paragraph of the witness summary : 

Marumoto stated that when a Spanish-speaking firm received a grant or 
contract, Mr. Ben Fernandez, chairman of the National Hispanic Finance Com- 
mittee, was then notified so that this company could be solicited for political 
contributions. Generally, Tony Rodriguez would coordinate these activities with 
Mr. Fernandez. 

Did you make that statement to the committee? 

Mr. Marumoto. I think that statement is a little strong, Senator, 
in that I did not say we notified Mr. Fernandez. 

Senator Montoya. What did you state ? We have a transcript, but 
it is not available at the present time. 

Mr. Marumoto. It is not verbatim. That is why I say it seems to 
be thrown out of context in terms of these last two questions you are 
asking me. 

Senator Montoya. Well, what is your version of it ? 

Mr. Marumoto. As I indicated a little earlier, I had periodic contact 
with Mr. Fernandez on a number of matters pertaining to the Spanish- 
speaking, but I did not officially notify him of any contracts or grants 
that any firm got. 

I believe we talked very informally about it; we did not even discuss 
the amounts. It was just a matter of principle that another Spanish- 
speaking firm got a contract. 

Senator Montoya. Now, on the last page of the memorandum, or 
the witness summary, it is stated by the staff who wrote this 
memorandum : 

According to Marumoto. his activities in the White House during 1972 were 
approximately 75-percent campaign related. Rodriguez, according to Marumoto, 
spent even more time in relation to campaign activities. Exhibit No. 262-12. para- 
graph 23. portrays Rodriguez meeting with potential contributors from Miami. 
The same exhibit, paragraph 13. indicates contact between Marumoto and Ben 
Fernandez, chairman of the National Hispanic Finance Committee. 

Is that a correct statement or summary ? 

Mr. Maritmoto. It has the general tlirust of what I stated, sir. 

Senator Montoya. Well, you did discuss contributions Avitli Mr. 

Fernandez and the role of the 

Mr. Marumoto. We did not discuss contributions, sir. 



5307 

Senator Montoya. Did you inform him as to who had received 
contracts and grants ? . i j. t 

Mr. Marumoto. From time to time, we had that kind of discussion ; 
yes, sir. 

Senator Montoya. Why did you furnish those names to Mr. i^ eman- 
dez ? What did you have in mind ? 

Mr. Marumoto. I did not have anything in mind, except that he 
came abreast of some of the accomplishments that we were making m 
the administration. 

Senator Montoya. Oh, I understand. I think that explains the whole 
thing. Thank you. 

Mr. Treadwell. Mr. Chairman, may we make a point about the 
summary of the witness' statement in executive session ? 

Senator Baker. Please proceed. 

Mr. Treadwell. This statement is much stronger than what we 
recollect having said — the witness having said in the executive ses- 
sion — and it is not consistent with notes that I made at the time of 
that session. I have 16 pages of notes here and in those, 1 or 2 instances 
of disagreement. I find nothing in my notes to support this summary 
statement. 

Furthermore, I would like to say that we requested in writing, in a 
letter to Mr. Hershman of the staff, and also orally to Mr. Dorsen, 
that we receive a copy of this summary and we probably could have 
objected or made our" position clear at that time and eliminated this 
confusion. But I can see there is going to be some disagreement over 
this, and we would just like to make our position on it. 

Senator Baker. The Chair would say that it is the Chair's under- 
standing that the interview was not taken verbatim as a transcript and 
that the summary 

Mr. Dash. Mr. Chairman, it was not an executive session, it was an 
informal interview. The summary, by the way, is not a matter of 
record, it is not introduced in evidence, and it is used as an aid 

Senator Baker. I was about to say, Mr. Dash, that if it was not 
taken under oath and was not a verbatim transcript in the nature of an 
executive session, the memorandum really is for use by the com- 
mittee. 

Mr. Dash. It is a staff aid. 

Senator Baker. And the chairman would point out that the testi- 
mony of the witness is the evidence on which the committee will pro- 
ceed and not the unsworn summary of the staff. 

Now, that is in no way a criticism of the staff. There are obvious dis- 
agreements when someone tries to summarize an interview. But that is 
not evidence and it will not be received as evidence by the committee, 
but rather, the sworn testimony of this witness before the committee. 

Senator Montoya. Well, Mr. Chairman, if I may be permitted to say 
this, the summary can be used to try to develop a recollection on the 
part of the witness. That was my purpose in doing so. 

Senator Baker. The Chair has not tried to exclude the questions that 
Senator Montova put. He may ask anv question based on the staff 
summary that he wishes. Tlie statement that the Chair made in no- 
wise tries to exclude the questions that Senator Montoya put. The bur- 
den of mv remarks was to the effect that the sworn testimony, as 
distinguished from the staff summary, is the record on which the com- 
mittee will base its future findings of fact and conclusions. 



5308 

Senator Montoya. If the chairman will further permit me to say 
this, in view of the motive that permeates the planning and the blue- 
print of this mission and the testimony of the witness, I feel very much 
obligated to comment on the incredible insult that the administration 
has perpetrated on the Spanish-speaking people of this country by 
this blatant attempt to buy the Spanish-speaking voters. They are not 
for sale in this country. There was a concerted effort to try to convince 
them that there was money in the trough if they just lined up, and the 
Spanish-speaking people of this country are not that kind of voter. 

Senator Baker. The Chair thanks the Senator for the statement 
and suspects that there may be varied interpretations of the same facts. 

Senator Weicker, 

Senator Weicker. Thank you, Mr. Chairman. I only have one ques- 
tion of Mr. Marumoto and I am going to comment on this entire line 
of questioning for a few minutes. 

Do I understand — I arrived late at the hearings this morning. Mr. 
Marumoto. Did you read your statement, which I have in printed 
form here — make the statement under oath before the committee ? 

Mr. Marumoto. Yes, sir. 

Senator Weicker. In that statement, you have there — 

Furthermore, may I also state categorically and clearly here and now for 
public record that at no time did I ever involve myself in illegal or unethical 
activities or even engage in what could be called political dirty tricks. 

Did you make that statement under oath to the committee ? 

Mr, Marumoto. Absolutely, sir. 

Senator Weicker. Mr. Chairman, I have sat here this morning and 
tried to assimilate the lines of questioning and responses to that ques- 
tioning. I have had a great deal of difRculty in understanding exactly 
what it is that is going on in relation to the mandate of this commit- 
tee. If I didn't feel that it would endanger our achieving our goal in 
this committee, I would probably keep quiet. But I think there is a 
great danger here where, in effect, what you are doing is, you are 
blending legitimate actions on the part of Government with the illegal 
and unconstitutional and what all of us would consider the gross. 

I think it is important to point out that ours is a political system. 
Nobody has ever tried to advertise it as anything other than that. That 
doesn't mean that political goals are necessarily dissimilar from na- 
tional goals. The fact is that the way the Nation as a whole, individ- 
uals and groups within that Nation, achieve their aspirations is 
through the political processes, regardless of the fact whether it is 
the Democratic Party or the Republican Party which pays attention 
to what those needs happen to be. 

As Ave wejit through the summer months, we heard of the types of 
actions which no political party should engage in. There is not point 
in reciting the lonqf list of wrongdoing Avhich would fall into any one 
of the categories I have mentioned before. They have no place on the 
American scene. But rather than hide from the word "politics," rather 
than ffive it a kind of connotation which indicates that it is akin to 
illegal, I would point out that the more politics Ave have, the better, 
insofar as politics standing for accountability, and if something is 
done right by the Republicans, that is fine ; if something is done wrong 
by the Republicans — some Republicans, some individuals, certainly 
have been proven to do that during the course of these hearings — then 



5309 

we are to be held accountable, or they are to be held accountable. The 
same holds true for the Democratic Party. So, T worry when I hear 
about the legitimate functions of a Government being thrown into the 
same pot with what has been brought before the committee here before. 

Let's face up to it, in all deferences to Senator Montoya, who cer- 
tainly, I think, is one of the finest :Members of the U.S. Senate, and 
certainly whose State is— rather, his own life has been involved with 
furthering the lot of the Spanish American in the country. But the 
fact is, the plain, cold, hard, political fact is, that the Spanish Ameri- 
can was left out in the cold and has been for a long time insofar as 
the national scene is concerned. If anything, I suppose I should be 
standing up and cheering, because I am the one who has been needling 
my party for year after year, will you please try to get the blacks 
into the Republican Party, will you try to get the urban dwellers into 
the Republican Party, will you try to ^et labor into the Repub- 
lican Party. And we did nothing. That is the reason why we are 
the minority party. So here we finally try to make an effort on behalf 
of a segment of our American population who have been short- 
changed, and I can attest to that, at least in my own State of Con- 
necticut — very much shortchanged. 

This isn't a question of what we have heard prior to this hearing 
of trying to tear down some segment of our population. Here we were, 
tlirough the political processes, trying to recognize a group that had 
been left out. And very frankly, that type of plus effort is entirely 
different from the effort which categorized certain people as enemies 
and literally tried to cut them off because they disagreed or whatever 
happened. 

I object very strenuously, unless there are specific allegations of il- 
legal activities, unconstitutional activities, gross activities. All that is 
being alleged here is what goes on has gone on and legitimately gone 
on in this Government for decades. Why in heaven's name do you think 
that the Democratic Party became the majority party? It is just these 
types of efforts that we are talking about right here being applied to 
other disadvantaged groups throughout the United States. That is why 
they are the majority party. 

I see here, as has the committee, an example of holding a hand out 
to a particular group that I very much think still needs our very spe- 
cial care, and I would hope, quite frankly, that maybe we would score 
some points in a political sense, just as we lose points when the other 
matters that have been raised before the committee come to the atten- 
tion of the American people. 

All things being equal, I think there is no question about the fact 
that the administration, any administration, Democratic or Repub- 
lican, has the right to take credit for its concentration of effort and its 
attitudes toward any segment of our national life, and certainly, I 
think any administration is entitled to its own team. 

So, I think it important to lay out, so that we don't try to estab- 
lish ideas, that the American people look to this comniittee to give an 
accurate picture of American politics and what it consisted of. This is 
the legitimate type of activity that has been going on for a long time 
in this country and is responsible for many who would still be stand- 
ing outside the door having been brought into the system and sharing 
in political power, which I think is so important to each one of us. That 



5310 

point I want made, so again, the American people will have an ac- 
curate picture of politics. 

I also want the point made that this, in nowise, in my mind — and I 
am only one man on this committee — does this fall into the same cate- 
gory of matters which we have heretofore heard ? Because if you say 
it does, then it diminishes the importance in the minds of the people 
in this country of the illegal and unconstitutional acts that did occur. 
They are bad. They are wrong, and we throw business like this in and 
the American people say, well, maybe really all of it was not so bad and 
it was not important. What I have heard up to this point, anyway, was 
very important and it hopefully will register in people's minds as such. 

On the other hand, to go ahead in what I consider to be a strictly 
political exercise and condemn these types of efforts — I go, mind you, 
on the testimony of this witness. He has sworn under oath that he did 
not engage in illegal or unethical activities. He understands what it is 
to go ahead and promise governmental positions or governmental con- 
tracts or whatever for money ; that is illegal. He says, I haven't done 
that. 

As I said, I only raise these points because I think it is necessary to 
put the testimony in the proper context. I am very much worried, as 
I say, as to the effects of what will happen on what we have heard inso- 
far as what has gone on before and also, I think the U.S. people should 
have an accurate picture of what goes on in politics. And I think the 
peojple of this country ought to understand that politics is not some- 
thing dirty. There is a way each of us achieves our aspirations. I would 
hope the Republican Party would make more efforts in the directions 
of many more people and groups thoughout this country to try to get 
us to be the majority party. 

I don't know, I just had to get that off my cheft, Mr. Chairman. 
That is about all I have to say. 

Senator Baker. Thank you very much, Senator Weicker. 

Before I recognize chief counsel for the committee, I want to an- 
nounce two things : One, that the hour of 12 :30 p.m. has arrived and 
shortly, we will recess for lunch. 

Second, I want to say that speaking as a member of the committee 
and not in my capacity as vice chairman, I want to commend Senator 
Weicker for a perceptive and, I think, very, very useful analysis of the 
essence of politics. I have often taken the position that there is an 
obligation to seek the votes and the support of every segment of society, 
no matter how small the prospects of success may be. It has often 
been the situation in politics in my State where, in the case of 
he black vote, some say, well, they are beyond the reach of the 

epublican Party. They aren't. I have received a great number of 
black votes. But the important thing is the prospects of success are 
not the guiding factor. The responsiblity of a political party is to 
try to speak for all of the people and to exclude no one. 

In that philosophical vein, I especially want to commend Senator 
Weicker for his contribution and to associate myself fully with his 
appraisal. 

Mr. Dash. Just a brief comment, Mr. Chairman. T don't think it is 
appropriate for me at this time to interpret the evidence. As I think 
we have said from time to time, it will be the duty of the committee to 
listen to the evidence, observe it, read the documents and evaluate them. 
I just want to make an observation. 



5311 

Perhaps Senator Weicker did not have an opportunity to hear all 
of the testimony or read the documents. The brunt of the inquiry was 
not whether or not the administration sought to give grants to a minor- 
ity group, but whether or not certain members of that minority group 
were made enemies. Senator Weicker, an enemies group was that if you 
were not in favor of the administration, you were cut off. If you were 
getting grants, you were dismissed as a potential grantee. You were 
graduated out of a particular program which was meant for you as a 
disadvantaged person. And only if you supported the administration, 
either by financial contributions or assistance, were you in the program. 
Therefore, Senator Weicker, this was not a program, as we brought out 
with the documents and in the evidence, one between minorities against 
nonminorities but discrimination within a minority group, within 
Spanish-speaking American people, perfectly competent. I think the 
witness has testified that perfectly competent Spanish-speaking con- 
tractors were dropped from grants because they would not support the 
administration or give contributions and those who were preferred 
were those who were supportive. The question of whether or not that is 
proper politics 

Senator W^eicker. Wait a minute, Counselor. If you are making that 
allegation, that is an illegal act. 

Mr. Dash. He has testified under oath that Mr. Sanchez 

Senator Weicker. That he has solicited contributions? 

Mr. Dash. No; I didn't say he solicited contributions; that Mr. 
Sanchez was recommended by many to be dropped from all grants be- 
cause he was not supportive of the administration. He testified in direct 
testimony to a question by me and he always answered as to other 
memorandums that the politics — and I don't believe. Senator Weicker, 
that you said that American politics guides and controls how our in- 
dividual agencies that receive appropriations from congressional com- 
mittees is spent for the interest of the people — the taxpayers are all the 
people — that those moneys are only to be given to those grantees who 
pledge themselves to a particular administration and that competent 
persons who are from the same minority group who refused to pledge 
themselves for a particular administration are dropped and dropped 
brutally. This is the evidence. 

Senator Baker. The Chair would say that I believe it is appropriate 
for counsel to confer and advise with members of the committee, but I 
do not think it is appropriate to get into a long, extended argument 
about the fair intendment of the testimony. The record will speak for 
itself. 

I thank the chief counsel for making his remarks. I think the time 
has come to recesss and the committee will recess until 2 o'clock. 

[Whereupon, at 12 :35 p.m., the committee recessed, to reconvene at 
2 p.m., the same day.] 

Afternoon Session, Wednesday, November 7, 1973 

Senator Baker. The committee will come to order. 
The chairman is occupied with an executive session of the Govern- 
ment Operations Committee and will return to these hearings shortly. 
Senator Inouye. 
Senator Inouye. Thank you very much. 



5312 

Mr, Mariimoto, I recall in response to Mr. Dash's inquiry on the 
SER grant, I believe of about $18 or $20 million, you responded that 
the Department of Labor did provide this grant. 

Mr. Marumoto. Yes, sir. 

Senator Inouye. And this, I believe, was approved on October 11, 
1972 or thereabouts ? 

Mr. Marumoto. I do not recall the date, sir. 

Senator Inottye. I was made to understand that the national presi- 
dent of LULAC and the American GI Forum, the most prominent or- 
ganizations of Spanish-speaking people, were invited to San Clemente 
for a special contract-signing ceremony and reception with the Secre- 
tary of Labor ; is that correct, sir ? 

Mr. Marumoto. I believe that is, sir. I was not there, but if I recall, 
there was a ceremony there with just Secretary Hodgson. The Presi- 
dent was not there. 

Senator Inouye. Can you tell us what has happened to this grant 
since election day ? 

Mr. Marumoto. That, I do not know. As I indicated just before our 
break. I changed over from the wearing of my Spanish-speaking hat 
to my executive hat that day after the election, so I was really out of 
the mainstream of Spanish-speaking capacity. 

Senator Inouye. I believe the SER received notification in early 
January, I believe the first week in January, that the funds had been 
frozen. Were you aware that this was about to happen ? 

Mr. Marumoto. No, sir. 

Senator Inouye. At the present time, I think most of the funds have 
been frozen and I just want to know if you were aware of this pos- 
sibility of the freeze ? 

Mr. Marumoto. There could be such a freeze, sir, but I do not recall ; 
I was not involved in that aspect. I really got completely out of the 
Spanish-speaking and I did not keep up with the activities that were 
going on at this time. 

Senator Inouye. Are you convinced that this granting was on good 
faith? 

Mr. Marumoto. Definitely, 

Senator Inouye. That the freeze was not anticipated ? 

Mr. Marumoto. Not to my knowledge, sir. 

Senator Inouye. Just for clarification, sir, ai-e you presently on the 
^Vhite House staff ? 

Mr. M^\rumoto. No ; I resigned at the end of August and now am 
president of a firm that is headquartered here in Washington with 
offices in Los Angeles, and we are specializing in East-West trade. 

Senator Inoitye. The AP at the time of your resignation quoted 
you, and attributed words to you wliich are quite different from your 
statement. Were you properly quoted ? 

Mr. Marumoto. I recall that particular AP release about the first 
of September, Senator, and that particular repor-ter quoted me out of 
context on a number of occasions thei-o, altliough I thought we had 
a clear understanding. What I said this morning is how I feel about 
what the President did in the Spanish-speaking area during the past 
4 years. 



5313 

Senator Inotjye. So you are stating that the AP quotation to the 
effect tliat you were disappointed that the wliole program lias eroded 
to practically nothing was not a proper quotation ? 

Mr. Marumoto. That is right. I did say I was disappointed since it 
slowed down temporarily because we were having a change of the 
guard; Mr. Finch and I were getting out of the Spanish-speaking 
area and Anne Annstrong was coming on. There was some slack time 
there. So there was a period when things were a little slow. But I did 
not approach that in any negative fashion. 

Senator Inouye. I have a final question, sir. Section 3 and section 
4 of the Hatch Act — section 3 makes it a misdeameanor to promise 
employment or other benefit or consideration for a political activity 
or for the support of or opposition to any candidate or any political 
party in connection with any primary or general or special election. 

Do you believe that any one of you in the special task force may 
have been violating this provision? 

Mr. Marumoto [conferring with counsel]. Not that I know of, 
Senator. 

Senator Inouye. Section 4 makes it a misdeameanor to deprive an- 
other of any employment, position, work, or other Federal relief ben- 
efit on account of race, creed, color, or any political activity or opposi- 
tion to any candidate or any political party in any election. Do you 
believe that any one of the members of the special task force may have 
been operating in violation of this section ? 

Mr. Marumoto. I don't recall. I don't think so. 

Senator Inouye. I believe that technically you would be exempted 
from this because your pay, I believe, came from the White House — 
Presidential account. 

Mr. Marumoto. That is right. 

Senator Inouye. But if I recall your testimony, there were those 
in your task force w^ho were from other departments. 

Mr. Marumoto. No; well, Mr. Ramirez w^as chainnan of the cab- 
inet committee and is exempted from the Hatch Act as an appointee 
of the President, confirmed by the Senate. Armendariz was on the staff 
of the campaign committee; Conde was on the Wliite House rolls, 
and — I take that back, Rodriguez was detailed to us from the State 
Department, and paid by them. Excuse me. 

Senator Inouye. Were all of you made aware of these provisions of 
the Hatch Act before proceeding in your activities? 

Mr. Marumoto. I don't recall any discussions there except I recall 
the counsel for the President sent a memorandum to Mr. Colson say- 
ing that I was exempted from the Hatch Act. 

Senator Inouye. Section 5 of the Hatch Act makes it unlawful to 
solicit funds for political purposes from any person known to be re- 
ceiving any benefit provided for or made possible by any act of Con- 
gress appropriating funds. 

Do you believe that any one of you in the Spanish-speaking en- 
deavor may have been in violation of this section ? 

Mr. Marumoto, No, sir. 

Senator Inouye. And it is your testimony that you did not involve 
yourself in f undraising activities ? 



24-650 O - 74 - 4 



5314 

Mr. Martjmoto. I was involved in fundraising activities in terms 
of speaking at various dinners and banquets, but not in terms of 
actually soliciting funds from any individual or organization. 

Senator Inouye. Senator Montoya referred to a paragraph which 
appears in the summary which suggested that it was some practice 
on the part of your office to immediately notif^^ Mr. Fernandez of 
the Hispanic Finance Committee of a grant or some personnel appoint- 
ments so that this committee could then solicit funds. I was not quite 
clear as to your response. 

Mr. Martjmoto. I also pointed out that I didn't think that the 
person transcribed that quite accurately — what I was trying to articu- 
late at the meeting yesterday. I did have discussions with Mr. Fer- 
nandez from time to time in terms of those who have gotten con- 
tracts from those who, I feel, were outside of the Government arena 
but were doing quite well and that they could participate in this 
program. 

Senator Inouye. Were you aware that Mr. Fernandez was going to 
seek contributions from these people ? 

Mr. Martjmoto. I would assume that he was going to ; yes, sir. 

Senator Inouye. And it was on this assumption that you sub- 
mitted these names? 

Mr. Marumoto. I didn't submit the names. These were in our 
discussions on the telephone or whenever 

Senator Inouye. It was not a standard procedure? 

Mr. Marumoto. No, sir. 

Senator Inouye. And it is your testimony that, to the best of your 
knowledge, at least not knowingly did vou involve yourself in any 
activity which would be in violation of the laws of the TTnited States. 

Mr. Marumoto. That is correct. 

Senator Inouye. Thank you very much, sir. 

Senator Baker. Senator Talmadge. 

Senator Talmadge. Mr. Marumoto — is that correct ? 

Mr. Marumoto. That is close enough. 

Senator Talmadge. "Wlio is the present director of OMBE ? 

Mr. Marumoto. Alexander Armendariz. 

Senator Talmadge. What was his former position ? 

Mr. Marumoto. He was director for the Spanish-speaking division 
at the Committee To Re-Elect the President. 

Senator Talmadge. So the present director of OMBE was part of 
the influence group bringing pressure on Spanish speaking 

Mr. Marumoto. He was heading up the effort there in that cam- 
paign ; yes. 

Senator Talmadge. What was Charles Colson's role in your 
operation ? 

Mr. Marumoto. He was my immediate supervisor, because he was 
in charge of all special interest efforts during 1972. 

Senator Talmadge. In your opening testimony, you expressed the 
view that this administration set out to do something about meeting 
the needs of the Spanish-speaking people. That is a very commendable 
thing. But would it not be more accurate to say, from the testimony 
that has been elicited here today, particularly with Armendariz, that 
the administration was more interested in meeting the needs of the 
Spanish-speaking people who were in a position to reelect the Presi- 
dent or help to reelect him ? 



5315 

Mr. INIarumoto. I am sure that Avas part of it. Senator. On the other 
hand, I feel very strong:ly that those who were also involved in this 
effort — that this was a sincere effort on the part of the administration 
to do something for the Spanish speaking that has never been done 
before. 

Senator Talmadge. But the whole operation was designed to aid 
those who helped in the election effort, was it not ? 

Mr. Marumoto. Excuse me ? 

Senator Talmadge. The whole operation was designed to aid those 
who helped in the election effort, was it not ? 

Mr. Marumoto. No, sir. 

Senator Talmadge. Did yon not give favoritism to those who helped 
in the election ? 

Mr. Marumoto. No. 

Senator Talmadge. And denied favoritism to those who did not? 

Mr. Marumoto. I am sure there were some who got some assistance, 
but I do not think we can generalize. Senator. 

Senator Talmadge. Did you not solicit campaign contributions from 
those who got contracts ? 

Mr. Marumoto. I did not ; no, sir. 

Senator Talmadge. Someone else did ? 

Mr. Marumoto. The National Hispanic Finance Committee may 
have ; yes. 

Senator Talmadge. The whole effort was coordinated, was it not? 

Mr. Marumoto. No ; it was a very informal arrangement, sir. 

Senator Talmadge. I believe some of these tabs indicate that some 
were solicited even before they got the contract. 

Mr. Marumoto. I do not recall that. 

Senator Talmadge. Several memorandums that I have had an op- 
portunity to thumb through here indicate that. 

Now, exhibit 262-48 — would you take a look at that? It shows a 
memorandum and attached letter. Paragraph 3 of the letter mentions 
an Executive pardon for Mr. Tijerina. Do you know anything about 
this letter or the subject matter of it ? 

Mr. Marumoto. The first time I saw this, Senator, was last night, 
when Mr. Dash's committee presented this whole briefing; but I am 
not familiar with what transpired last August 1972. 

Senator Talmadge. He was under Federal sentence at the time, was 
he not? 

Mr. Marumoto. Pardon me ? 

Senator Talmadge. He was under Federal sentence at the time, 
was he not ? 

Mr. Marumoto. I do not recall, sir. 

Senator Talmadge. Do you know Mr. Tijerina? 

Mr. Marumoto. I recall him but I do not remembei* having a dis- 
cussion of this with anybody. 

Senator Talmadge. Has it not been prominently discussed in the 
news media ? 

Mr. Marltmoto. It could have been. 

Senator Talmadge. You still are not familiar with him ? 

Mr. Marumoto. Let me explain my role — why I cannot recollect 
some of these things. I used to get into the office at 6 :30 every morn- 
ing and probably put in over 14 to 16 hours a day, made or received 



5316 

probably over a hundred phone calls a day, saw a number of people, 
either in meetings or just informal discussions. So I had to delegate a 
lot of my work out to Mr. Rodriguez, Mr, Conde — relied on others, not 
only in our task force but throughout the White House and other 
Govemment agencies and departments. So even though a particular 
item might come up, they had the responsibility t^ get whatever had to 
be accomplished, done. I, therefore, did not always know the details. 

Senator Talmadge. You were working with Mr. Armendariz, were 
you not ? 

Mr. Marumoto. We were working closely ; yes. 

Senator Talmadge. And also Mr, Henry Ramirez? 

Mr. Marumoto, Yes, sir. 

Senator Talmadge. I call your attention to this exhibit No. 262-48 
dated August 29, 1972. The letter from Mr. Henry Ramirez to Mr, 
Armendariz, Subject, "Attached letter to Mr. Tijerina." [Reading :] 

Please see attached letter with specific reference to the third paragraph. Mr. 
Tijerina indicated that he would work for us in return for due considerations. 
I await your recommendations, if you want me to move on this matter. 

Now, I call your attention to the third paragraph thereof. It is 
signed by Mr. Tijerina. I am not sure I have that pronunciation 
correct. 

I am very glad that I got to know you. I also want to make it very clear that I 
am very thankful for what you mentioned to me in your oflSce concerning my pro- 
bation, parole, and the possibility of a full Executive pardon. As I said it before 
while I was in your oflBce, I want to repeat in writing most of the Spanish-speak- 
ing people in the United States would feel grateful if an Executive pardon would 
be granted. 

Are you familiar with that instance ? 

Mr. Marumoto. No, sir. 

Senator Talmadge. You know nothing whatever about it ? 

Mr. Marumoto. No, sir. 

Senator Talmadge. Now, to summarize your testimony, isn't it true 
that a Spanish-speaking cabinet committee and Spanish-American ap- 
pointed officials were used in conjunction with the Hispanic Finance 
Committee to bring in campaign funds for the election of the 
President ? 

Mr. Marumoto, No, sir. That is not true, sir. There was a difference 
of responsibilities there. The only people that were raising funds for 
the President's reelection was the National Hispanic Finance Com- 
mittee as it applies to the Spanish-speaking areas. 

Senator Talmadge. Now, you testified, in effect, that Spanish- 
speaking persons and corporations which did not help us — that is, the 
administration — lost out to those who did in grants and other benefits. 
It seems to me from listening to your testimony that the administration 
was granting a lot of money in return for campaign fimds in contracts 
that didn't necessarily serve the public interest. They weren't neces- 
sarily the best qualified recipients, were they ? 

Mr. Marumoto. I disagree with several points that you brought up. 
Senator. 

Senator Talmadge. You identified a number of documents this 
morning that Mr. Sam Dash interrogated you about. The purport of 
those documents was without exception to help those people who were 
active in the campaign and to deny benefits to those who were inactive 
in the campaign. Is that not correct? 



5317 

Mr. Marumoto. No, sir. There were a few of those firms that were 
active in the campaio^i, but there were other firms that were not nec- 
essarily active in the campaign. They were fully qualified to receive 
a Government contract or grant to do some work for the Federal 
Government. 

Senator Talmadge. There was one firm in three different memoran- 
dums where you pureued it for 3 we«ks to get $18 million for a Wash- 
ington firm. "V\Tiich one was that ? 

Mr. MARmnoTO. SER, S-E-R. 

Senator Tai.madge. Did they contribute to the campaign funds? 

Mr. INlARrnvroTO. Not that I know of. I don't think the people in that 
particular organization were foolish enough to do that. In the first 
place, they were a nonprofit organization that addresses itself to man- 
power training. 

Senator Tai>madge. You testified in your opening statement that you 
did nothing illegal, unethical, or improper in your activities at the 
Wliite House in 1972. Exhibit No. 262-^4, if you will look at it, shows 
a series of letters and correspondence referring to Judge Alfred Her- 
nandez. You wrote a letter on June 12, 1972, to Judge Hernandez, 
stating : "I want to emphasize that if you implement your plans as are 
discussed, the President will adequately recognize you." 

A month later, you wrote a memorandum on August 18 stating: 
"If any vacancies come up for the Federal bench in Texas, 1701 and 
our operation would like to see Judge Hernandez appointed." 

You further state in that letter: "It would be a real coup if we 
could appoint him," 

Judge Hernandez headed the Spanish-speaking Democrats for the 
President, did he not ? 

Mr. Marumoto. That is right, sir. 

Senator Talmadge. Was not Judge Hernandez offered a Federal 
judgeship or some other high position in the administration in re- 
turn for his accepting a position as chairman of the Spanish-speak- 
ing Democrats for the President? 

Mr. Marumoto. Senator, as I recall the discussions that we had 
with Judge Hernandez at the time, we explored the possibilities of 
the judge joining the administration because he was so well known 
in the Mexican-American community. At no time do I recall any- 
one promising or offering Judge Hernandez a position. However, 
sometime after the election, there was a vacancy on the Consumer 
Safety Products Commission where the President wanted to appoint 
someone of Spanish-speaking extraction and his name came up. I 
believe he was in for one or two interviews and offered a position, 
which he turned down. 

Senator Talmadge. Can you identify the documents referred to 
under exhibit No. 262-14 ? One is a memorandum to Mr. John Clarke, 
dated August 18, 1972, from you. Subject: Judge Alfred Hernandez. 

Another letter that follows is dated June 8, 1972; another letter 
dated June 12, 1972, from you to Judge Hernandez. You admit the 
authenticity of these copies? 

Mr. MARUMt>To. Yes, sir. 

Senator Talmadge. If they haven't been inserted in the record, Mr. 
Chairman, I ask unanimous consent that they be appropriately iden- 
tified and inserted at this point. 



5318 

Senator Baker. The documents will all be made part of the record 
as a group when we have discussed them further. 

Senator Talmadge. Were you not aware of the provision of title 18, 
section 600, of the United States Code that makes it a crime to promise 
Federal employment or other benefits under consideration for polit- 
ical support for a candidate or political party ? 

Mr. Marumoto. Yes, sir. 

Senator Talmadge. Isn't that the indication of these documents that 
I have just shown you ? 

Mr. Marumoto. One moment, sir. 

I would like to reemphasize that there was no promise or no offer 
whatsoever to Judge Hernandez about a Federal judgeship. 

Senator Talmadge. The letters speak for themselves. But I under- 
stood that you made a specific pledge that he would be appropriately 
recognized. 

Mr. Marumoto. That is right. 

Senator Talmadge. And shortly thereafter, you recommended him 
for a Federal judgeship. 

Now, you denied that any moneys or grants were made available 
either to aid the campaign or to thwart the efforts. You did campaign, 
did you not? 

Mr. Marumoto. Yes, sir. 

Senator Talmadge. Now, look at exhibit No. 262-36 entitled "Ad- 
ministrative Confidential," dated July 19, 1972. Memorandum for Rob 
Davison from Bill Marumoto. "Subject: Development Associates." 

Can you identify that as your memo ? 

Mr. Marumoto. Yes, sir. 

Senator Talmadge. I read further : 

Development Associates headed up by Leveo Sanchez, is a Washington-based 
consulting firm which has been funded for from $1 to $2 million by our Adminis- 
tration. 

Sanchez, prior to the formation of this firm, was regional Director of OEO 
under Sargent Shriver and prior to that, with the Peace Corps, working for 
Mr. Frank Mankiewicz — one of McGovem's campaign eochairmen — and Jack 
Vaughn. 

Most recently he was awarded a 5-year grant for $722,383 from HETW to 
evaluate an experimental school program, and he also received an 8a SBA con- 
tract for over $200,000 to evaluate bilingual education programs in the United 
States. It also appears he will be obtaining a $30,000 grant from HUD, Region 
IX, relatively soon. In addition, he is presently under consideration at the De- 
partment of Labor for a $70,000 grant. 

This is a classic example of a firm not necessarily on our team which is mak- 
ing a comfortable living off of us. These are grants that we are aware of which 
indicate there may have been a few others. 

I would recommend if it is not too late, we stop the proi>osals at DOL and 
HUD. 

Do you still swear that you didn't make any effort to penalize the 
people that weren't on your political team ? 

Mr. Marumoto. This is an opinion of mine. Senator, that I passed 
on to a member of our responsiveness group and they in turn con- 
tacted the Small Business Administration. Technically, he had reached 
his goal, his dollar goal, where he could have been graduated on his 
own. 

Senator Talmadge. What was the responsiveness group ? 

Mr. Marumoto. As I explained this morning, this was a group of 
four or five gentlemen who initially were under the leadership of Mr. 



5319 

Malek and later under the leadership of Dan Kingsley, who were 
responsible to and working: with various special interest groups under 
Mr. Colson's operation as well as our personnel operation to make sure 
that the various departments and agencies were responsive to requests 
that went to them from the White House on personnel matters, 
publicity, public relations, and grants and contracts. 

Senator Talmadge. Simplified, it was a group to take maximum 
political advantage of public dollars that were awarded in the form 
of public grants and contracts, was it not ? 

Mr. Marumoto. A system to facilitate some of our requests. 

Senator Talmadge. "Facilitate"— "Nvhat do you mean by that? 

Mr, Marifmoto. Try to get through the bureaucratic redtape. 

Senator Talmadge. In other words, my statement is correct. It was 
to maximize the advantage of the American taxpayers' dollars in a 
political eifort, was it not ? 

Mr. Marumoto. Yes. 

Senator Talmadge. Thank you, Mr. Chairman. That is all I have. 

Senator Baker. Thank you very much, Senator Talmadge. I believe 
that concludes the first round of interrogation of committee members. 
Are there other questions by committee members? If there are none, 
are there further questions by the staff? 

Mr. Dash. Yes, I just have a few, Mr. Chairman. 

Mr. Marumoto, I do not think the record is clear as to exa,ctly what 
took place on the meeting you had with Mr. Sanchez prior to the 
writing of your memorandum of July 19, 1972, which is exhibit No. 
262-36 and to which the Senator just referred. 

Now, do you recall having the meeting with Mr. Sanchez ? 

Mr. Marumoto. Yes, sir. 

Mr. Dash. Can you, to the best of your recollection, tell the commit- 
tee what it was that you discussed with Mr. Sanchez at that meeting? 

Mr. Marumoto, If I recall, the other party that was involved in that 
meeting at the time was David Wimmer, who was Under Secretary 
Silberman's aide in the Department of Labor, who had the responsi- 
bility on the other side — on the Department side, on this responsive- 
ness program. He and I had lunch in the White House staff dining 
room and discussed generally a number of things pertaining to Mr, 
Sanchez' operation, 

Mr. Dash. Wlio initiated the meeting ? 

Mr. Marumoto. I believe I did, sir. 

Mr. Dash. And at this time, as this memorandum later shows, you 
were concerned with Mr. Sanchez' lack of cooperation in support of 
the administration's very strong memorandum and, as a matter of fact, 
your testimony this morning, in response to my questions concerning 
this memorandum, was quite forthright and did not refer to the ques- 
tion of whether it exceeded the dollar limit or not. I ask you very spe- 
cifically whether or not you were making this rex^ommendation as you 
show in your memorandum because you felt that this was a contractor 
"who was living off of us," and was not supporting the administration 
and you were recommending he be cut off for that reason. Your 
testimony, as I recall it, was that was the reason that you wrote the 
memorandum. 

Mr. Marumoto. That is correct. 



5320 

Mr. Dash. Now, just prior to your writing that memorandum, you 
met with him. Was there a discussion with him as to whether or not 
there was a possibility of his getting any additional grants at that 
meeting ? 

Mr. Marumoto. There could have well been, sir. 

Mr. Dash. Are you aware of the fact that a Labor grant was dis- 
cussed with him in whicli he had already received information from 
the Department of Labor that he had been turned down? 

Mr. Marumoto. That I do not recall. 

Mr. Dash. Did you in good faith really, when you were meeting 
with him, expect him to be getting any grants? 

Mr. Marumoto. That was over a year ago, Mr. Dash, and I just 
really do not recall the details. 

Mr. Dash. I know you were asked earlier, questions as to whether 
you solicited contributions, but that is not my question to you. Was 
there any effort, after that meeting at least, to enlist his cooperation 
in support of the administration ? 

Mr. Marumoto. I do not think so. 

Mr. Dash. It was just a bychance meeting? 

Mr. Marumoto. No ; it was a meeting that I believe, as I indicated, 
I initiated; to become acquainted with Mr. Wimmer. 

Mr. Dash. That was shortly after— just 2 days after that meeting 
that you wrote this memorandum ? 

Mr. Marumoto. Right. 

Mr. Dash. Is there any relationship between this memorandum 
written 2 days after that meeting and the meeting ? 

Mr. Marumoto. I am sure there must have been. 

Mr. Dash. If you are sure there must have been, can you recall 
what that relationship may have been or must have been? 

Mr. Marumoto. I guess it was our impression — not impression, but 
our decision, that it appeared, from sources outside of our meeting, 
that he was not going to support the administration so this was a 
recommendation that we made. 

Mr. Dash. Now, were you aware of an organization called the 
Southwest Council of La Raza ? 

Mr. Marumoto. Yes, sir. 

Mr. Dash. Did you engage in any discussions with them con- 
cerning any grants ? 

Mr, Marumoto. Yes. 

Mr. Dash. Could you tell us what discussions you had with them ? 

Mr. Marumoto. The Southwest Council of La Raza is an active 
Democratic group that I believe was founded in Arizona and now is 
expanded into the Southwestern States. 

Mr. Dash. Were they supportive of the administration ? 

Mr. Marumoto. Well, in some discussions that some of our people 
had from the campaign staff as well as our staff, there was some dis- 
cussion about them supporting the President. They, in turn, said they 
would, provided they could get some Federal contracts. 

Mr. Dash. Did you discuss any particular Federal contracts with 
them? 

Mr. Marumoto. I believe there were some discussions — I had only 
one meeting with them, if I recall, and the others picked up on it. I 
think what finally happened was that the Committee to Re-Elect, the 
Spanish-speaking division, recommended a strategy for working with 



5321 

them that they be funded for $30,000 for a national conference they 
wanted to hold. 

Mr. Dash. What were they actually looking for — what kind of 
grant ? 

Mr. Marumoto. I believe they were looking for either two or three 
grants at maybe two or three different departments or agencies. 
Mr. Dash. That amounted to approximately how much ? 
Mr. Marumoto. I am sure of six figures, I do not know. 
Mr. Dash. Sums were about $400,000 ? 

Mr. Marumoto. It could be more, I do not know the exact figure. 
Mr. Dash. What was being offered to them at that time or suggested 
was $30,000 for a conference ? 

Mr. Marumoto. Right, with consideration for assistance in a few 
months. 

Mr. Dash. Mr. Marumoto, do you recall discussions we had yester- 
day, concerning this particular organization and your statement to us, 
that at no time did you believe they were going to get any grant, but 
that you were in a sense engaging with them in what has been known 
as a stroking session ? 

Mr. Marumoto. We were neutralizing them. 
Mr. Dash. You were neutralizing them ? 
Mr. Marumoto. Yes, sir. 

Mr. Dash. And by holding them at bay, not giving them a grant, but 
discussing the possibility of a $30,000 conference grant, this sort of at 
least held them away from being an opponent if they were not going 
to be supportive ? 

Mr. Marumoto. That is right. 

Mr. Dash. Were you doing the same thing with another organization 
called La Raza Unida ? 

Mr. Marumoto. I was not involved in those discussions. 
Mr. Dash. Will you look at exhibit No. 262-50 ? Were you aware that 
this memorandum, that was sent to Mr. Malek from Mr. Armendariz 
recommending an $8,000 contribution to the Muniz campaign for the 
Republican Party, was brought up in a meeting off the convention 
floor? A promise was made to publicly condemn McGovern if such a 
donation were made. 

Mr. Marumoto. As I indicated, in yesterday's meeting was the first 
time I saw this particular memorandum. 

Mr. Dash. If you will look at exhibit No. 262-51, September 14; 
there was a discussion of Raza Unida Convention, and the concerns 
over Raza Unida as an orgnization and you see, on page 2, that you re- 
ceived a copy. 

Mr. Marumoto. Correct. 
Mr. Dash. Do you recall this memorandum ? 
Mr. Marumoto. I vaguely recall it, yes. 

Mr. Dash. And is it not the sense of this memorandum that an 
effort should be made to at least work with them as best possible, 
with the recognition they may not support the administration but 
if they could be worked with they might neutralize them? 
Mr. Marumoto. Correct. 

Mr. Dash. As a matter of fact, are you aware that certain grants 
were made to this organization for that purpose ? 

Mr. Marumoto. Yes; I found out about it, I think, just before 
election, that they did receive some grants. 






5322 

Mr. Dash. I think there was an earlier memorandum, Mr. Marumoto, 
exhibit No. 262-3. Are you aware of this memorandum that is ad- 
dressed to the Attorney General, whidh is sort of an action memoran- 
dum, and wJiat it says here, if you will turn to page 2 : 

The report makes detailed recommendations for highly-visual social and 
economic development projects and for publicizing the same. It suggests heavy 
exploitation of the Cabinet Committee on Opportunity for Spanish-Speaking 
Peoples which is now closely allied with Colson's shop and Bill Marumoto on 
political and public relations questions. It advocates consideration of under- 
cover funding of La Raza Unida, a splinter party, in exchange for an agreement 
that La Raza Unida runs Presidential candidates in California and Texas. 

Were you aware of this memorandum ? 

Mr. Marumoto. I think I received a copy of this, Mr. Dash, but it 
has been almost 2 years and I do not recall the details. 

Mr. Dash. Do you recall discussions urging or at least encouraging 
La Raza Unida to support or run Presidential candidates in California 
and Texas ? 

Mr. Marumoto. In Texas, I don't recall California. 

Mr. Dash. Now, it is true, and I think that the record is very clear, 
that Mr. Armendariz, who was the Committee for the Re-Election of 
the President liaison with Spanish-speaking Americans in the cam- 
paign and therefore playing a political role, did sign off on govern- 
mental contracts to Spanish-speaking contractors. That was your 
testimony this morning. 

Mr. Marumoto [conferring with counsel]. Let me just perhaps try 
to explain that. He had input into it. He didn't have authority of 
course to signoff. 

Mr. Dash. He didn't have legal authority. 

Mr. Marumoto. Right. 

Mr. Dash. You said this morning he didn't have legal authority 
but if he didn't signoff on it 

Mr. Marumoto. He had a say in it. 

Mr. Dash. In other words, a Department, HEW, HUD, Depart- 
ment of Labor, would not give the grant to any one of the grantees 
who were asking for it if Mr. Armendariz did not signoff on it? 

Mr. Marumoto. Not necessarily. In fact even if the White House 
had not signed off on it, the primary agency didn't have to have that. 

Mr. Dash. I am not saying they didn't have to but 

Mr. Marumoto. That was the principle. 

Mr. Dash. They expected him to signoff on it and generally if he 
didn't signoff on it, it wasn't granted. 

Mr. Marumoto. Generally speaking, yes. 

Mr. Dash. Therefore it would be fair to say that a very strong out- 
side political influence was introduced in the grant-making process 
of the various agencies. 

Mr. Marumoto. Yes. 

Mr. Dash. Now, we were talking about organization or whether or 
not there Avas any organization, or how loose this was. Will you look 
at exhibit No. 262-39. First there is a covering memorandum of Au- 
gust 3, 1072, from Alex Armendariz to Mr. Malek with copies to Henry 
Ramirez, Marumoto, Carlos Conde, Tony Rodriguez, Frank Her- 
ringer, Stan Anderson, SS appointees — Spanish-speaking appointees. 
Now it says "Attached is the Spanish-speaking organizational chart 
and phone numbers for your convenience." Attached appears to be 



5323 

a chart, and the chart shows a lino, in the middle, which has the 
Spanish-speaking task force with your name, Marumoto, Ramirez, 
Conde, Rodriguez, were these White House people ? 

Mr. Marumoto. Just Conde, Rodriguez, Armendariz was over on 
the committee. 

Mr. Dash. Then going over on that line; Armendariz, you have 
already indicated, was the Committee To Re-Elect the President liai- 
son, and then a line to Fred Malek who, in August, had gone over to 
the committee, had he not ? 

Mr. Marumoto. I don't recall the exact time he resigned. 

Mr. Dash. The record will show that he had, and also Jeb Magruder 
and Clark MacGregor, so that what this chart shows is the political 
arm of the campaign, the Committee to Re-Elect the President was 
working closely with your Spanish-speaking task force in the White 
House, and it wasn't just a loose relationship. It was actually a chai-ted 
relationship. Did you receive a copy of this ? 

Mr. Marumoto. Yes. 

Mr. Dash. I have no further questions, Mr. Chairman. However, 
there w-ere one or two of these memorandums which Mr. Marumoto has 
indicated he had not seen before and cannot identify and adopt as his 
own. I think most of the memorandums, he either received a copy 
of or are his own, and I would like those memorandums which Mr. 
Marumoto has reviewed, or has received a copy of, or which he has 
been able to identify today, Mr. Chairman, to be identified as exhibits 
and introduced in the record, and exclude from these memorandums 
any memorandum which he has not been able to identify or could 
not indicate he has seen prior to our shownng it to him. 

Senator Baker. The Chair understands the request to be that those 
memorandums which are identified by the witness as his own memo- 
randums or of which he received copies 

Mr. Dash. Yes, sir. 

Mr. Baker [continuing]. Be identified as exhibits and be received in 
evidence, is that correct ? 

Mr. Dash. Yes. 

Senator Baker. Is there objection to that request? Without objec- 
tion, it will be so ordered. 

[The documents referred to were marked exhibits Nos. 262-1 through 
262-63.* Those exhibits not identified by the witness were numbered as 
referred to for identification only and are not published but will be 
retained in committee files.] 

Senator Baker. Are there further questions of the witness? 

Mr. Sanders. 

Mr. Sanders. Just one remark, Mr. Chairman; may I have leave 
of the Chair to insert, at a subsequent time in the record relevant 
extracts from regulations of the Small Business Administration per- 
taining to the policy behind the award of contracts and grants, and 
the statutory basis for those regulations? 

Senator Baker. Is there any objection to the request of Mr. Sanders, 
which I understand that to be that relevant portions of the SBA 
regulations, and what else? 

Mr. Sanders. And statutory basis for it. 



•See p. 5532 through p. 5699. For more detailed description and location of individual 
exhibits, see contents pp. v-vii. 



5324 

Senator Baker. And statutory references may be received as an 
exhibit. 

Mr. Dash. I join in that request, Mr. Chairman. 
Senator Baker. Good. Without objection, so ordered. 
[The documents referred to were subsequently received and marked 
exhibit No. 26.3.*] 

Senator Baker. Do you have any further questions? I understand 
Mr. Dash you have other questions. 

Mr. Dash. Yes, I am sorry, Mr. Chairman, there is one other item 
I didn't bring up. 

Mr. Marumoto, do you recall having any discussion with persons 
you were working with concerning tlie Census Report for 1972? 

Mr. Marumoto. Yes, I received a plione call from Des Barker who 
was then Mr. Colson's deputy in the public relations area, and he, in 
turn, was working with some officials at the U.S. Census Bureau on 
some publication that was to be released, I believe, some time in 1972. 
He, in turn, asked me for my advice. I sent that on to Armendariz 
and Mr. Conde for their suggestion, and I think the way that turned 
out there was some information that was held back from that report. 
Mr. Dash. As a matter of fact, you recommended that some infor- 
mation be held back, did you not ? 
Mr. Marumoto. Yes. 

Mr. Dash. Could you tell us — unless you want to refer to the. exhibits, 
262-31, 262-32, and 262-35. On 32, it is page 3, paragrapli 20; on 35, 
it is page 4, paragraph 12 ; which together discuss the census material 
and the sensitive material tliat you thought ought to be held back. 

Do you want to tell the committee in your own Avords what the 
problem was and why you felt it should be held back? 

Mr. Marumoto [conferring with counsel]. I had to recollect some of 
my ideas at that time. If I lecall this particular portion of that par- 
ticular study showed the Spanish-speeaking not doing as well as some 
other minorities in comparison to the general public. 

Mr. Dash. I think the memo spoke specifically to blacks, did it not? 
Mr. Marumoto. Eight, and we didn't want to associate that with 
this administration and to tlie incumbent Government. 

Mr. Dash. And, therefore, the official census report that was to 
come out, that originally may have included the relationship between 
how the Spanish-speaking American community was doing with rela- 
tionship to another minority such as the blacks, did not include that in- 
formation at your request, is that correct ? 

Mr. Marumoto. Well, it was my understanding it was a legitimate 
deletion. 

Mr. Dash. At least it was an effort on vour part to persuade the 
census people not to include it, and they did not include it on your 
request. 

Just one final question. I think some mention was made— it is a 
small amount but I think the record ought to make it clear— there 
was $2,000 that you received. I think yesterdav when the staff was dis- 
cussing it with you, that you did sav you understood that to be a finan- 
cial contribution, a campaign contribution. 

Mr. Marumoto. Well, if I said that I would like to clarify my 
wording. 

*See p. 5700. 



5325 

Mr. Dash. Yes, sir. 

Mr. Marumoto. It is a matter of semantics but I felt it was a dona- 
tion, he didn't want to liave that associated with the campaign. 

Mr. Dash. Donation for whom ? 

Mr. Marumoto. "Well, this was for some activities, if you recall, 
one of the five areas that I was responsible for were special activities 
as it related to the Spanish-speakinor. "We had about five or six informal 
receptions or dinners for Spanish-speakiuir leaders who came into 
Washington from time to time, either honoring, in most occasions hon- 
oring high level Spanish-speaking appointees or. I recall two gather- 
ings during the inaugural which were specifically just for Spanish- 
speaking. 

Mr. Dash. But the $2,000 was given to you during the course of 
the campaign ? 

Mr. Marumoto. Yes, sir. 

Mr. Dash. "Was it given to you in cash ? 

Mr. Marumoto. Yes, sir. It was given to Mr. Kodriguez. 

Mr, Dash. Right. As I understand your testimony you received 
some of it ? 

Mr. Marumoto. About $800 to be used to buy these gold medallions 
that we got from the Treasury with the President's face on it. 

Mr. Dash. To your knowledge was this ever reported as a cam- 
paign contribution ? 

Mr. Marumoto. Xo, sir. 

Mr. Dash. "\M\o contributed that to you ? 

Mr. Marumoto. Claudio Arenas, A-r-e-n-a-s of — 1 believe of Hous- 
ton or Dallas, Tex. 

Mr. Dash. "Was he a contractor who was receiving grant immey ? 

Mr. Marumoto. Yes. 

Mr. Dash. "Were you authorized to receive contributions ? 

Mr. Marumoto. No, sir. 

Mr. Dash. I have no further questions. 

Senator Baker. I have just one question, if I may. just to make 
sure I understand what the $"2,(H">0 was about. It was a ^-J.OOt) cash con- 
tribution: was it ever turned over to the Connnittee To Ke-Elect the 
President? 

Mr. Marumoto. No, sir. 

Senator Bakfr. "Was it ever turned over to nnv political oriraniza- 
tion ? 

Mr. Marumoto. No, sir. 

Senator Bakkk. "Was it held in-l\ouse for these receptions and din- 
ners y o\i spoke of ? 

Mr. Marumoto. Yes, sir. 

Senator Bakf.k. And sjient f(u- those ]>urposes? 

Mr. Marumoto. Solely, for those purposes. 

Senator 1V\kkr. Are tl\eiv other oiiest ions ? 

Senator INIoNTOYA. Thave a (iuesti(ni, Mr. Chairman, 
deferring to exhibit No. t20'2 5i2, Mr. iSrannnt^to, you mention here 
in paraiirai^h -'"> of the memoi-andinn dated September i!-J that you had 
met with Ed Romero of Ea T.iuz magazine '*ie prospective national 
advertisers for his publication." 

What did you mean by that ? 

Mr. Mari^moto. Senator Montoya, as you may know, I believe this 
is the only national Spanish magazine, and I guess I would compare it 



5326 

to Ebony for the black community. These people were having a dif- 
ficult time in getting this off the ground. They came to a number of 
us to see if we could help them. I gave them a list of individuals that 
I knew in the corporate and advertising arena who might be able to 
take either half- or full-page advertisements from them, such as 
General Motors or Sony. 

Senator Montoya. Who made contacts with these national 
advertisers ? 

Mr. Marumoto. They did. 

Senator Montoya. And did they have any letter from you ? 

Mr. Marumoto. No, sir. 

Senator Montoya. Or anybody else from the TVHiite House ? 

Mr. Marumoto. No, sir, I just gave them names of people who were 
both professional and personal friends. 

Senator Montoya. Is it not true that after you met with them that 
they had articles, glowing articles, about President Nixon in every 
one of their subsequent issues up to election day ? 

Mr. Marumoto. One of their thrusts, Senator, was to articulate the 
achievements of the Spanish-speaking both in the private and public 
sector, so that part of that program certainly included what the 
Spanish-speaking people were doing with this particular administra- 
tion. 

Senator Montoya. Well, the articles actually revolved around Presi- 
dent Nixon and his candidacy and not the accomplishments of the 
Spanish-speaking people, isn't that right ? 

Mr. Marumoto. As I recall it. Senator, it had to do with achieve- 
ments of the President and his administration's first 4 years. 

Senator Montoya. Had they been able to project the President in 
his image before the flat advertisers stepped in with persuasion ? 

Mr. Marumoto. That I don't recall, sir. I think at this point in time 
they may have only had one or two issues published. 

Senator Montoya. How much did they realize from the national 
advertiser, did you get a report ? 

Mr. Marumoto. No, sir. 

Senator Montoya. Was it a substantial amount? 

Mr, Marumoto. I really don't know, sir. I understand it is still in 
existence but again we didn't — there was no follow up there. 

Senator Montoya. That is all, Mr. Chairman. 

Senator Baker. Are there further questions ? 

If not, thank you very much. The witness is excused and the com- 
mittee will stand in recess briefly so — at the request of the chairman — 
so that he may return for the balance of the hearing. 

[Recess.] 

Senator Ervin. The committee will come to order. 

Council will call the next witness. 

Mr. Dash. Mr. John Priestes. 

Senator Ervin. Will you stand up and raise your right hand. 

Will you swear that the evidence you shall give to the Senate Select 
Committee on Presidential Campaign Activities wnll be the truth, 
the whole truth, and nothing but the truth, so help you God? 

Mr. Priestes. I do, sir. 

Mr. Dash. Mr. Priestes, I see you are accompanied by counfeel. 

Would counsel identify himself, please? 



5327 

Mr. RiCHMAN. Jerome S. Richman, and I. Eichard Jacobs, Miami, 
Fla. 

Mr. Dash. Mr. Priestes, do you have any preliminary statement 
you wish to make to the committee? 

Mr. Priestes. No, sir. 

Mr. Richman. Mr. Dash, I have a couple of introductory remarks 
that I would like, at your pleasure, to bring to the attention of the 
Chair. 

Mr. Priestes is appearing here today pursuant to the committee's 
subpena. He has not requested any grant of immunity and his intent 
is to cooperate fully with any and all questions. It is already known 
that he is under sentence now for matters relating to FHA violations 
which are unrelated to the purpose for which he has been called 
today. 

One further remark. The matters to which he is to testify today 
occurred approximately a year and a half ago. While he did^ not 
keep any documentary records, he has reconstructed the events from 
his memory and I am certain the committee will bear with him as to 
his recall. 

As Mr. Priestes indicated, he has no opening statement. He is 
prepared for inquiry at this time. 

Senator Ervin. Thank you very much. 

Mr. Dash. Mr. Priest-es, would you first tell us where you live? 

TESTIMONY OF JOHN J. PRIESTES, BUILDING CONTRACTOR FROM 
THE STATE OF FLORIDA, ACCOMPANIED BY JEROME S. RICHMAN 
AND I. RICHARD JACOBS, COUNSEL 

Mr. Priestes. Yes, sir, I live at 1221 Marbella Court, Coral Gables, 
Fla. 

Mr. Dash. Are you in business or a profession in Florida ? 

Mr. Priestes. Yes, sir ; I am a building contractor. 

Mr. Dash. Where do you engage in that activity ? 

Mr. Priestes. In the general area, south Florida area. 

Mr, Dash. Could you give us the names of the companies or busi- 
nesses you do your work under ? 

Mr. Priestes. The two major businesses I work under are John 
Priestes Homes, Inc., and Priestes Development Corp. 

Mr. Dash. And basically, what kind of building do you engage in ? 

Mr. Priestes. Primarily single-family homes and FHA 221 and 235 
homes. 

Mr. Dash. In the course of your activities within the recent period 
of the last couple of years, did you run into any difficulties with the 
FHA? . ^ 

Mr. Priestes. Pardon me, sir? 

Mr. Dash. Did you run into any difficulties with the FHA? 

Mr. Priestes. Yes, I did. 

Mr. Dash. Were you in fact informed that you were going to be 
suspended ? 

Mr. Priestes. Yes, I did. 

Mr. Dash. Could you tell us what information you received as the 
basis upon which your suspension would be made ? 



5328 

Mr. Priestes. Well, the newspapers had been running a lot of 

Mr. Dash. Instead of referring to newspapere, Mr. Priestes, why 
don't you answer based on your own knowledge ? 

Mr. Priestes. Based on my own knowledge, the suspension was 
going to be due to a corporation by the name of Richard Greene Corp., 
which was not registered. It was a fictitious name. 

Mr. Dash. Now, after knowing of this information and the prob- 
lems you had with the FHA, were you contacted by a Mr. Ben 
Fernandez ? 

Mr. Priestes. Yes, sir. 

Mr. Dash. Could you tell us briefly the circumstances under which 
Mr. Fernandez contacted you ? 

Mr. Priestes. Well, Mr. Fernandez called me at home one evening 
and told me has was from either a Hispanic Finance Committee — I 
don't recall the exact name — or just the Committee To Re-Elect the 
President. They were raising funds primarily from Latin-speaking 
contributors in the south Florida area. 

Mr. Dash. By the way, are you a Latin-speaking or Spanish-speak- 
ing American? 

Mr. Priestes. No, sir, I am not. 

Mr. Dash. Do you happen to build for Spanish-speaking Ameri- 
cans ? Are your customers 

Mr. Priestes. Some of my customers are Latins, yes, sir. 

Mr. Dash. Do you know of your own knowledge how Mr. Fernandez 
who identified himself as representing the Committee to Re-Elect the 
President, or the Hispanic Finance Committee, dealing with Spanish- 
speaking Americans, came to your attention ? 

Mr. Priestes. Well, I know how he came to my attention, yes, sir. I 
found out that he had been to a party the night before and had met 
several builders, Latins, and real estate people. It had been in the news- 
papers and they had discussed me 

Mr. Dash. What was in the newspapers ? 

Mr, Priestes. My problems with the FHA. 

Mr. Dash. Continue. 

Mr. Priestes. They discussed with Mr. Fernandez my name as a 
possible contributor. 

Mr. Dash. Can you place as close as you can, the date when Mr. 
Fernandez contacted you ? 

Mr. Priestes. It was on or about February 26, 1972. 

Mr. Dash. You say contacted you by telephone. 

Would you briefly relate the conversation by telephone that Mr. 
Fernandez had with you ? 

Mr. Priestes. To the best of my knowledge, it was just a conversa- 
tion that he stated his name and that he was a fundraiser for the Com- 
mittee To Re-Elect the President for Latin-descent people and he pos- 
sibly could help me in my troubles with that. 

Mr. Dash. Did he indicate on the telephone that he knew of your 
troubles ? 

Mr. Priestes. He had indicated that he had heard aibout my troubles, 
yes. It was all over the papei-s. 

Mr. Dash. As a result of that telephone conversation, did you ar- 
range a meeting? 

Mr. Priestes. Yes, sir. 



5320 

Mr. Dash. When and where did that meeting take place? 

Mr. Priestes. The meeting took place the next day at the Sheraton 
Four Ambassadors Hotel at Miami, Fla. 

Mr. Dash. AVas this Mr. Fernandez' hotel room ? 

Mr. Priestes. Yes, sir. 

Mr. Dash. And you went to that hotel room ? 

Mr. Priestes. Yes, sir. 

Mr. Dash. Did you go with anybody ? 

Mr. Priestes. No, sir. 

Mr. Dash. Did you meet with Mr. Fernandez alone? 

Mr. Priestes. Yes, sir, I did. 

Mr. Dash. Now, can you, to the best of your recollection, briefly tell 
us about that meeting, the conversation, what did Mr. Fernandez say 
to you and what did you say to him ? 

Mr. Priestes. Well, he invited me up to his room and we sat and he 
offered me a drink. He told me after a small amount of small talk, he 
said that he could help mo with my FHA problems, that he thought he 
could help me. He said it would require a contribution. 

He said, as you know, "I am a fundraiser." He told me that the con- 
tribution would have to be $100,000. 

Mr. Dash. Wliat did you say to him ? 

Mr. Priestes. Well, I wanted to know what he had done before and 
exactly what type of help he was talking about. He told me that he had 
previously helped other building contractors. 

Mr. Dash. Was he specific as to the manner in which he had helped 
other builders, what kinds of problems these other building contrac- 
tors had ? 

Mr. Priestes. No, he was not, sir. 

Mr. Dash. Were they the same type, suspensions 

Mr. Priestes. Well, they were building contractors that he said wera 
on the URD list. 

Mr. Dash. What is the URD list ? 

Mr. Priestes. That is the restricted, disbarred list for the FHA. 

Mr. Dash. Is that a more serious problem than being suspended ? 

Mr. Priestes. Yes, it is more serious than suspension. 

Mr. Dash. So he indicated he could help builders on more serious 
problems than you had? 

Mr. Priestes. Yes, sir. 

Mr. Dash. In other words, did he specifically say he could help you 
be cleared of this suspension ? 

Mr. Priestes. Yes, he did, sir. 

Mr. Dash. And in return, he wanted a contribution of $100,000 to 
whom? 

Mr. Priestes. Contribution to the Committee To Re-Elect the Pres- 
ident. 

Mr. Dash. Did he tell you what form that contribution had to be 
in? 

Mr. Priestes. He wanted either cash or a cashier's check. He told me 
it would be in three different payments. 

Mr. Dash. How were the three different payments to be worked 
out ? What was the scenario of the payments to be ? 

Mr. Prif^stes. Well, the first payment, he wanted a cashier's check 
for $25,000, and if I gave him that, after the first payment, he would 

2*s650 O - 74 - 5 



5330 

then take me to Washington and introduce me to former Commerce 
Secretary Maurice Stans. 

Mr. Dash. What position did you understand Mr. Stans to have 
at that time ? 

Mr. Priestes. Well, at the time he first spoke to me, I did not know 
exactly who the Committee To Re-Elect the President was. I had never 
heard of them. I had known Maurice Stans to be the former Secretary 
of Commerce. He told me Maurice Stans was now the chairman of the 
finance committee for the Committee To Re-Elect the President. 
He showed me a letter that he had received from Maurice Stans 
designating him as the representative of that committee to collect 
funds. 

Mr. Dash. So for the first $25,000, you would get to see Mr. Stans. 

When would you have to pay the next $25,000 ? 

Mr. PmESTES. Well, he told me quite confidently, he said if we went 
to see Mr. Stans, he would pick the phone right up in front of me ■ 

Mr. Dash. Who would ? 

Mr. Priestes. Mr. Stans would, and call Secretary Romney. 

Mr. Dash. About your problem ? 

Mr. Priestes. Yes, sir. 

Mr. Dash. Were you then to make another payment ? 

Mr. Priestes. I was then to make another payment of $25,000. 

Mr. Dash. That would leave $50,000 unpaid. When would that have 
to be paid ? 

Mr. Priestes. The $50,000 w^as to be paid when my suspension was 
to be completely lifted. 

Mr. Dash. After that was explained to you, did you agree to that ? 

Mr. Priestes. Yes, I agreed to it, sir. 

Mr. Dash. Was that the end of that meeting or was there any other 
conversation at that time ? 

Mr. Priestes. That was the end of the meeting, but, of course, I 
w^anted to — he told me that he wanted the check made out to the Com- 
mittee To Re-Elect the President. I eliminated the cash and he told me 
he wanted a cashier's check then. PTe said it was to be made to the His- 
panic Finance Committee To Re-Elect the President. 

Mr. Dash. Did Mr. Fernandez give you a business card at that 
time? 

Mr. Priestes. Yes, he did, sir. 

Mr. Dash. Was this a card of the Hispanic Finance Committee ? 

Mr. Priestes. Yes, sir. 

Mr. Dash. Showing his name on it? 

Mr. Priestes. Yes, sir. 

Mr. Dash. Now, what, if anything, did you do after that meeting 
with regard to that conversation ? 

Mr. Priestes. Well, I made a phone call to Mr. William Pelski, the 
FHA Director in Miami, Fla., and asked him if he could verify this. 
I described the whole meeting and the circumstances with him, and 
asked him if he could verify, was this a way that I could obtain this 
favor. He said he would make a few phone calls and call me back. 

Mr. Dash. Did you tell him or did you identify Mr. Fernandez to 
him? 

Mr. Priestes. Yes, T did. I sat and talked to him, actually, for about 
an hour about the whole thing, re-created the whole conversation. 



5331 

Mr. Dash. Did he call you back ? 

Mr. Priestes. Yes, he called me the next day, sir. 

Mr. Dash. What did he tell you ? 

Mr. Priestes. He told me that he had checked and it was all right, 
this would be a wiay that I could have my impending suspension 
lifted. 

Mr. Dash. What, if anything, did you do next ? 

Mr. Priestes. Sir? 

Mr. Dash. What, if anything, happened next? Did you call Mr. 
Fernandez ? 

Mr. Priestes. Mr. Fernandez told me that he would meet me a week 
later. I told him I did not have the cash or the check. I could not 
obtain it for him right there. He said he would be back in town 1 week 
later and made arrangements to meet me at the Sonesta Beach Hotel 
in Key Biscay ne. 

Mr. Dash. Prior to that time, after speaking to Mr. Pelski, did you 
make any effort to obtain funds ? 

Mr. Priestes. Yes, I had made efforts to obtain funds. By the time 
I met Mr. Fernandez the following Saturday, I had not yet obtained 
them. But I went to business associates, and I met with Mr. Fernandez 
a week later. 

Mr. Dash. This was at the Sonesta Beach Hotel ? 

Mr. Priestes. Yes, sir. 

Mr. Dash. All right. Could you tell us, do you know about what 
date that was ? 

Mr. Priestes. That was March 4, 1972. 

Mr. Dash. Could you tell us whst occurred at that meeting ? Were 
you alone ? 

Mr. Priestes. No, I was not. I had a date with me, Mre. Eose Marie 
Jayne from Miami, Fla. 

Mr. Dash. And can you now tell us what occurred at that meeting? 

Mr. Priestes. Well, it was a meeting — it was not a meeting, it was a 
formal dinner, as I recall, and you had to have a card to get inside. 
I liad no card, but I went to the door and I asked to see Mr. Fernandez. 

They called him and he came out, brought us inside, and asked me 
if I had the check. I said no, but I was working on it and I thought 
I could get it. 

He told me that he had made arrangements to meet me 1 week later 
in Washington and said he would call me back and make hotel reser- 
vations to meet Maurice Stans. 

Mr. Dash. Was that the sum. and substance of that meeting? 

Mr. Priestes. Basically; yes, sir. 

Mr. Dash. After that meeting, did you make any effort to raise the 
$25,000? 

Mr. Priestes. Yes, sir ; I contacted an associate who I purchased land 
from — Mr. Martin Woolin, in Florida — and asked him if he could 
lend me $25,000. 

Mr. Dash. Was he willing to do so? 

Mr. Priestes. He was willing to do so. I asked him if he could make 
the loan in cash and said that he had sold me land previous to this. 
He was involved in the regard that I had purchased land from him 
at one time. He told me he would give me a check. 

I explained the whole thing, what I wanted the money for, what 
was going to be done with the money. 



5332 

Mr. Dash. Did you show him Mr. Fernandez' card ? 

Mr. Priestes. Yes, I did show him Mr. Fernandez' card. 

Mr. Dash. Did that mean anything; to him? 

Mr. Priestes. No, he said he had never heard of the Hispanic 
Finance Com.mittee To Re-Elect the President, and he made the check 
out to the Republican National Committee direct. 

Mr. Dash. That was in the amount of $25,000 ? 

Mr. Priestes. $25,000; yes, sir. 

Mr. Dash. Once having that check, did you receive any further 
communication from Mr. Fernandez concerning your meeting in 
Washington ? 

Mr. Priestes. Yes, Mr. Fernandez had called me, I would say, about 
two or three times that week. He had also called me two or three times 
the week before, before the meeting at the Sonesta. Each time he called, 
he wanted to know how I was doing with obtaining cash, and I wanted 
to know how he was doing with his arrangements for having my trou- 
bles taken care of. 

Mr. Dash. The conversations were from Mr. Fernandez to you, did 
you get the money — and from you to Fernandez — what have you been 
able to do for me? 

Mr. Priestes. Yes, sir. 

Mr. Dash. At all times, was it your understanding that you were to 
give that money on a quid pro quo to have your FHA problem cleared 
up? 

Mr. Priestes. Yes, sir. 

Mr. Dash. Did he finally tell you what hotel you were to come to ? 

Mr. Priestes. Yes, sir, he called me on the phone and told me he had 
made reservations at the Hay-Adams Hotel, that I was to come in there 
on the night of March 12. 

Mr. Dash. Did you go to Washington on March 12 ? 

Mr. Priestes. Yes, I did, sir. 

Mr. Dash. I just want to show you a copy of a voucher form and 
a — T guess an American Express charge retainer on the bill for the 
Manger-Hay-Adams Hotel, 16th and H Streets, Washington, D.C. Ts 
that a memorandum that you submitted to us just yesterday? 

Mr. Priestes. Yes, sir. 

Mr. Dash. Does that show a stay at the Hay- Adams beginning March 
12, 1972, in room 716 and leaving March 18, 1972 ? 

Mr. Priestes. Yes, sir. 

Mr. Dash. Mr. Chairman, I would like to have this bill and the 
accompanying receipt from the American Express identified for the 
record and made an exhibit. 

Senator Ervin. The paper referred to will be received in evidence 
and appropriately numbered as an exhibit. 

[The document referred to was marked exhibit No. 264.*] 

Mr. Dash. You arrived on the evening of March 12. Did you receive 
a call to meet Mr. Fernandez at that time ? 

Mr. Priestes. Mr. Fei-nandez told me. when T arrived at the hotel 
I was to ring his room up and meet with him. 

Mr. Dash. Was he there at the hotel ? 

Mr. Priestes. Yes, sir, T checked. T did ring his room up and told 
him T had just checked in and he told me to come down to his room. 

♦Seep. 5705. 



5333 

Mr. Dash. What was the nature of the discussion at that time ? 

Mr. Priestes. Well, at this meeting, Mr. Fernandez' attitude, I 
noticed, was not quite as confident as it was in Miami. I talked to 
him. It had come out somehow in the newspapers — they had the head- 
lines about the ITT contribution of $200,000, and I told him— I said 
I thought this was one of the biggest corporations in the United States 
contributing $200,000; I thought he was very heavy on me for the 
$100,000. 

Mr. Dash. In other words, you felt that if a conglomerate like ITT 
could do it for $200,000, $100,000 was unfair 

Mr. Priestes. Well, I did think it was unfair, and I told him so. 

Mr. Dash. Wiat resulted from your bringing that to his attention? 

Mr. Priestes. Well, after quite a bit of discussion, it was agreed 
upon that I Avould only make a contribution of $50,000. 

He also mentioned to me that the ITT contribution was actually 
$400,000. 

Mr. Dash. Did you detect there was some nervousness on the part 
of Mr. Fernandez ? 

Mr. Priestes. I detected, sir, a lack of the previous confidence. He 
had previously told me, no less than three times, that there would be 
nothing to this. He said that the contribution — Secretary Stans would 
call Mr. Romney in my presence, which was the thing I wanted to see. 
I knew who Secretary Stans was and I knew who Secretary Romney 
was, and I felt this would be enough assurance. 

Mr. Dash. In other words, Avas there anybody else present in his room 
that evening Avhen you met with him ? 

Mr. Priestes. Yes, sir. 

Mr. Dash. Wlio was that ? 

Mr. Priestes. There were three other fellows, I believe of Cuban 
descent; one from Miami. I think his name is Manolo Casanova. 

Mr. Dash. Did you know the others ? 

Mr. Priestes. No, sir. I was introduced to them, but I cannot re- 
member their names. 

Mr. Dash. Could you spell for the reporter the name of the person to 
the best of your ability ? What was his name, the one you did know, 
or at least, knew, his name ? 

Mr. Priestes. Casanova, C-a-s-a-n-o-v-a. 

Mr. Dash. That is his last name ? 

Mr. Priestes. That was his last name, sir. 

Mr. Dash. What was his first name? 

Mr. Priestes. Manolo. 

Mr. Dash. Do you know how that is spelled ? 

Mr. Priestes. M-a-n-o-l-o, I believe. 

Mr. Dash. Now that you had arranged to cut the payment in half — 
in other words, $50,000 — was there to be a different payment arrange- 
ment? 

Mr. Priestes. Yes, sir. The payment arrangement was to be $25,000 
to get into meet Maurice Stans, to be presented to him at one meeting 
immediately, and another $25,000 when my troubles with my suspen- 
sion were taken care of. 

Mr. Dash. At that time, did they ask you if you had the money 
with you ? 



5334 

Mr. Priestes. Yes; he did ask me if I had the check with me at that 
time. I told him, yes, I did. 

Mr. Dash. Did you show him the check at that time ? 

Mr, Priestes. Yes, I did show him the check. Pie was concerned that 
the check was not made out to tlie Committee To Re-Elect the Presi- 
dent. 1 told him — I said, well, I could not get the fellow I borrowed 
the money from — he hadn't heard of this committee, but he had heard 
of the Republican National Committee, and I explained it to him 
like this. 

He said, well, we will see what we can do with it. 

Mr. Dash. When you came up to Washington from Florida, did you 
bring anything with you ? 

Mr. Priestos. Yes, sir. In Miami, Fla., Mr. Fernandez had told me 
to bring a scrapbook of all my press clippings, I guess you call them. 
I don't know whether you call them press clippings, but the previous 
news writeups. 

Mr. Dash. These were news clippings relating to your particular 
problem with FHA ? 

Mr. Priestes. Yes, sir. 

Mr. Dash. Were they self-explanatoi-y if somebody read them? 

Mr. Priestes. They were quite — I would say they were self-explana- 
tory. It was not exactly in detail, but you could read through the lines 
and understand pretty much that there was something wrong. 

Mr. Dash. That evening, then, besides now arranging for a $50,000 
payment and a new method of payment, and the fact that — what else 
took place, what other conversation took place at that time? 

Mr. Priestes. The evening in the hotel room ? 

Mr. Dash. Yes, the evening of March 12. 

Mr. Priestes. Just a moment. 

Mr. Dash. Did you make ai-rangements for the following morning? 

Mr. Priestes. Oh, yes, sir. We made arrangements to meet the fol- 
lowing morning. He told me that — I had originally thought I was 
going to meet Mr. Stans at 9 o'clock in the morning. Now he told me 
it was changed to 11 o'clock. He said that he would leave at 9 o'clock 
and T was to show up at 11 o'clock. He gave me a name and a telephone 
number — Hugh Sloan and a telephone number. In case T was late, I 
was to call him. 

Mr. Dash. Did he tell you who Hugh Sloan was? 

Mr. Priestes. Yes, sir. I believe he said he was Mr. Stans' assistant. 

Mr. Dash. Is that all that occurred now on the evening of the 12th, 
substantially ? 

Mr. Priesit;s. To the best of my knowledge, that is basically it. 

Mr. Dash. The following moiiiing, did you go over to the Commit- 
tee To Re-Elect the President ? 

Mr. Priestes. Yes, I did, sir. 

Mr. Dash. What room did you go to, if you recall ? 

Mr. Priestes. T don't recall the room muiiber. It was on Pennsyl- 
vania Avenue. T had to go up to the second floor and turn to the right. 
As I recall, Mr. Sloan w\as thei-e with Mr. Fernandez — Mr. Sloan's 
office on the i-i<rht, Mr. Stans' on the left. 

Mr. Dash. Mr. Sloan and Mr. Fernandez were there, you say? 

Mr. Priestes. Mr. Sloan's office T recall being on the right, Mr. 
Stans' on the left. 



5335 

Mr. Dash. Was Mr. Sloan there ? 

Mr. Priestes. Yes, sir. 

Mr. Dash. Were you introduced to Mr. Sloan ? 

Mr. Priestes. Yes, I was introduced to Mr. Sloan. 

Mr. Dash. ^Vlio introduced you ? 

Mr. Priestes. Mr. Fernandez. 

Mr. Dash. What occurred next? Did you fret in to see Mr. Stans? 

Mr. Priestes. Yes, sir. We spoke briefly to Mr. Sloan. Mainly, he 
was <jlad I was a contributor, words to that effect. 

Mr. Dash. Did Mr. Sloan, to your knowledge, knofw what the ar- 
rangement was that you had with Mr. Fernandez ? 

Mr. Priestes. I don't recall that, sir. I don't believe he knew. 

Mr. Dash. At least, Mr. Fernandez not in your presence 

Mr. Priestes. I don't really recall what happened. That was a year 
and a half ago, and I don't think he was familiar with 

Mr. Dash. He understood, however, that you were coming to make 
a contribution ? 

Mr. Priestes. Yes, he understood about the contribution. 

Mr. Dash. You say then you went in to meet Mr. Stans ? 

Mr. Priestes. Yes, sir. 

Mr. Dash. Is that the first time you met Mr. Stans ? 

Mr. Priestes. Yes, sir. 

Mr. Dash. "^^Hio was in the room ? 

Mr. Priestes. Mr. Fernandez, Mr. Stans, and myself. 

Mr. Dash. Will you tell us as clearly as you can what occurred, 
who first spoke? Were you introduced to Mr. Stans? What then took 
place ? 

Mr. Priestes. I was introduced to Mr. Stans by Mr. Fernandez. Mr. 
Fernandez spoke first. He said, this is Mr. Priestes and he is going to 
make a contribution to the committee. 

T had a scrapbook with me of the press clippings from Miami. 

Mr. Dash. "Wliat did vou do with that scrapbook ? 

Mr. Priestes. Mr. Fernandez asked me to show it to Mr. Stans, 
which I did. He looked at the scrapbook. 

Mr. Dash. Did he look through it? 

Mr. Priestes. Yes, he did. 

Mr. Dash. How long did it take him to look through it? 

Mr. Priestes. T would say about 15 minutes. 

Mr. Dash. Did you get the impression that he was reading particu- 
lar newspaper clippings? 

Mr. Priestes. He was reading. I was explaining as we were going 
along. I was making a point of trying to explain the trouble that I 
was in and I said this was a Richard Green thing. The papers had 
made headlines about it and I explained that this was a fictitious name 
for the corporation which was not registered. 

Mr. Dash. Did you say anything to Mr. Stans besides explain- 
ing 

Mr. Priestes. Yes. ]\Tr. Fernandez had told me previously that when 
I handed the chock to Mr. Stans — he told me in INIiami that Mr. Stans 
would pick the phone up and after hearing him call Romney, Mr. 
Fernandez would ask me to present the chock to him. 

I gave him the check. He did not pick the phone up and call Secre- 
tary Romney. I asked him then, I said — he did accept the check. I 



5336 

asked him, I said, well, wait a minute, aren't we supposed to have a 
phone call here? I said, you promised me tliat Secretaiy Romney 
would be called on the phone. 

Mr. Stans said that he would make the call and if he could not do 
me any good, they would return my check. 

Mr. Dash. You say he made the call then, or later ? 

Mr. Priestes. No, he did not make it then. He just said he would 
make the call and I said — I asked : "Do I have any reassurance here 
that I am going to get anything for my money?" I mean I did not 
make the contribution for any other reason than 

Mr. Dash. You were not seeking to make a contribution to the elec- 
tion of the President? 

Mr. Priestes. No, sir, I really was not interested in making that 
contribution. 

Mr. Dash. What did Mr. Stans say to you when you made clear 
that you wanted to know what else you wore going to get for your 
money ? 

Mr. Priestes. Mr. Stans told me that he would make a call and see 
what he could do, and I said "Well, what does it look like here?" He 
said, "If we cannot do any good for you we will return the check to 
you." 

Mr. Dash. All right. Now, by the way, did he make any statement 
to you, did he react to the fact that the check was not a cashier's check 
but was a check made out to the National Republican Committee? 

Mr. Priestes. Yes, sir, Mr. Stans did make a notation the check 
had been made out to the wrong committee, and Mr. Fernandez said, 
"Yes," well he said, "this is done in error," and Mr. FeiTiandez men- 
tioned that possibly I could obtain casih in replacement of that check 
or smaller checks from a — with Spanish surnames, other than my own. 
He did not want the check made out to my name anyway. 

Mr. Dash. By the way, was any reference made, either at that meet- 
ing or prior to your having that meeting, when a discussion of the 
payments were made concerning the date April 7, 1972? 

Mr. Priestes. Yes, sir. The reference April 7 came up because I do 
not know what it meant. He told me that the final payment would 
have to be made before April 7. He said any payments after April 7 — 
he also mentioned that in the hotel room, the night before, which I 
forgot to say — he said any payments made after April 7 had to be 
reported, and stated that in my situation this was something that 
would be wiser not to have reported. 

Mr. Dash. All right. Now, after this. Did anything else, any other 
conversation take place in the presence of Mr. Stans or Mr. Fernandez 
at that time ? Was that the sum and substance of it ? 

Mr. Priestes. I would say basically. I might have left a few un- 
important details out. 

Mr. Dash. All right. Now, what did you do after you left his 
office? 

Mr. Prif^stes. Pardon me? 

Mr. Dash. Wliat did vou do after you left his office? 

Mr. Priestes. After T left his office, I went back to the hotel, checked 
out, and took a plane home to Miami. 

Mr. Dash. At that time, did you see anything in the newspaper 
concerning your matter ? 



5337 

Mr. Priestes. Yes, sir. When I got back to Miami, Fla., that night 
I found out Mr. Eugene Gulledge was down there and had a press 
conference that afternoon and had suspended me. 

Mr. Dash. So that on the day you were up there talking about that 
problem, in fact, you were suspended ? 

Mr. Priestes. Yes, sir. 

Mr. Dash. Did that concern you ? 

Mr. Priestes. No, not really, it did not concern me because I had 
known that I was going to be suspended previously. 

Mr. Dash. What you were really going to be doing would be mak- 
ing an appeal, as I understand it. 

Mr. Priestes. Yes, sir, this was mainly concerned with my appeal 
because the suspension was, shall we say, imminent, because the news- 
paper publicity — I had known there was going to be some 

Mr. Dash. And the help you expected would be on the appeal ? 

Mr. Priestes. The help I exj^ected would be primarily on the appeal. 

Mr. Dash. All right. Now, when was the next time you were con- 
tacted by anybody with regard to this matter? 

Mr. Priestes. Well, back home in Miami, I made a few calls to Mr. 
Fernandez. 

Mr. Dash. You called him. Wliere did you call him ? 

Mr. Priestes. I called him in California, at a California phone. 

Mr. Dash. Was that his home? 

Mr. Priestes. He had gone back to California, yes, sir. 

Mr. Dash. And what was the purpose of your calls to Mr. Fernandez ? 

Mr. Priestes. To find out how everything was going, you know, to 
find out if they were getting the job done. 

Mr. Dash. What kind of response did you get from Mr. Fernandez? 

Mr. Priestes. Well, I did not get a positive response, completely, 
but lie said they were working on it and he would be back in touch with 
me in small — he would keep in touch with me and let me know what 
was going on. 

Mr. Dash. All right. Now, after these kinds of calls you were mak- 
ing and seeking information, did someone get in touch with you later 
in Florida and liad in his possession your check ? 

Mr. Priestes. Yes, sir. Approximately 2 weeks later a man came to 
my home with the check in hand and said he was from the Commit- 
tee To Re-Elect the President. 

Mr. Dash. And having the check in his hand you didn't need any 
further introduction ? 

Mr. Priestes. No, sir; he gave me his name and told me he was from 
the committee. I don't remember his name but I really wasn't conscious 
or concerned. He had the check that I had given to Mr. Stans 2 weeks 
previous to that. 

Mr. Dash. What, if anything, did he tell you ? 

Mr. Priestes. He told me it was a serious situation, more so than 
they had previously expected and it could be handled but it would re- 
quire $25,000 in cash, and the check — he didn't want the check. He was 
going to return the check in exchange for $25,000 in cash. 
Mr. Dash. What did you say to him ? 

Mr. Priestes. I said I agreed to it. I said that is fine with me. I 
asked : "When do you want me to meet you in Washington to meet 
with Mr. Stans?" 



5338 

Mr. Dash. What did he say to you ? 

Mr. Priestes. He told me they weren't going to do it that way any- 
more. He said he expected me to hand — I said "You don't expect me to 
just give you the cash," I said, "to you," not having known him. He 
said "Well, that is the way" — I can't remember verbatim but, "That is 
the way we are working it now." 

Mr. Dash. You wanted assurances if you gave him cash it would get 
to the right person. 

Mr. Priestes. Yes, sir. I agreed I would give him the cash if Mr. 
Stans can witness the cash too. I said : "As long as I have some assur- 
ance that he knows you have the cash," because I wanted assurance to 
know something is going to be done. 

Mr. Dash. Was he willing to give you that asimrance ? 

Mr. Priestes. No, he said he could not do it that way. 

Mr. Dash. All right. Then how did you terminate your talk'i 

Mr. Priestes. I was a little upset, and I told him — I think he felt 
that it wasn't, you know — he did return the check to me. 

Mr. Dash. He returned the check and then he left, was that it? 

Mr. Priestes. Yes, sir. 

Mr. Dash. What did you do next ? 

Mr. Priestes. I then called Mr. Fernandez in California and I told 
him. I asked him what was going on, related what happened and he 
said : "I wall call you back. Let me make some calls and I will call you 
back." 

Mr. Dash. Did he call you back ? 

Mr. Priestes. He called me back 2 or 3 hours later. 

Mr. Dash. Will you tell the committee, as best you can recall, what 
his conversation was, what he told you ? 

Mr. Priestes. Well, his conversation was that he said : "Well, we 
can't do anything for you. You can, if you would like to, make a con- 
tribution for $5,000 but it would have to be reported and there is noth- 
ing" — I said I didn't understand it at all. I said: "Wait a minute, I 
don't understand this at all. You are talking about $5,000." He said: 
"We never promised you anything," and I guess I got a little indignant 
and I said : "What was I doing in Washington with a $25,000 check, 
I am not even a Republican." And he said : "Well, we never made you 
any promises at all. You can make it if you would like," and I said : 
"What would I get for the $5,000?" and he said : "Well, we would make 
it known publicly that you gave $5,000", and I said : "Would I get any- 
thing?" He said : "You would not get anything from it." It was a com- 
plete turnabout. 

Mr. Dash. And was that — is that how the conversation ended ? 

Mr. Priestes. That was about the end of that conversation with Mr. 
Fernandez. 

Mr. Dash. All right. Were you visited by anybody shortly after 
that? 

Mr. Priestes. I was called, and I can't really recall, about a week or 
maybe it was only 3 or 4 days later, about 4 o'clock and asked for 
$5,000, and I recall asking him — the Hispanic Finance Committee 
again — and I asked him if there was anything I could get for the 
$5,000. They said they would just make it known publicly, like they 
would do for any contributor and I said there is nothing that really 



5339 

can be done then, and they said it will be known. It wasn't enough 
assurance for me. 

Mr. Dash. And did anything else happen, did you meet that person 
or did you make a contribution ? 

Mr. Priestes. No, I never did make another contribution. 

Mr. Dash. What did you do, by the way, with the $25,000 check? 

Mr. Priestes. I returned the $25,000 check approximately 1 week 
later to Martin Woolin in Miami. 

Mr. Dash. Did you hear any more from Mr. Fernandez ? 

Mr. Priestes. I don't recall now. If I called him after that in some 
regard, I just can't really recall. I know I didn't — nothing else 
happened after that. 

Mr. Dash. You made no further trips to Washington on this 
business ? 

Mr. Priestes. No, sir. 

Mr. Dash. That is the sum and substance of the effort of the Hispanic 
Finance Committee to obtain a contribution from you? 

Mr. Priestes. Yes, sir. 

Mr. Dash. I have no further questions, Mr. Chairman. 

Senator Ervin. Mr. Thompson. 

Mr. Thompson. Thank you, Mr. Chairman. 

Mr. Priestes, you have indicated in your statement here that you 
pleaded guilty to two criminal counts for making false statements, 
involving false statements of corporate tax returns, and second, false 
statements in connection with an FHA matter. I would like to ask 
you, and the counsel can respond to this so far as I am concerned, if this 
was a plea bargaining arrangement, whether or not there were other 
matters under inquiry, whether there was an agreement that they 
would not be pursued ? 

Mr. RiCHMAN. Yes, there was a plea bargaining agreement which 
was entered in the records of the southern district of Florida, and as 
a result of that plea bargaining he pled guilty to those counts that 
you mentioned. 

Mr. Thompson. Could you give us the substance of that agreement ? 

Mr. RiCHMAN. The substance of the agreement was that he was to 
enter a plea on those two counts basically, that he would cooperate 
with the Federal Government in any way that was required of him, and 
that any other charges that may have come about of anything of FHA 
relationship on this matter would not be brought against him by the 
U.S. attorney's office. 

Mr. Thompson. All right. Were the matters pertaining to Mr. 
Fernandez, the matters that have been related here, in the possession 
of the U.S. attorney's office at that time there? 

Mr. RiCHMAN. Yes, sir. 

Mr. Thompson. That is all I have to ask on that. 

Mr. Priestes, you indicated that your first contact with Mr. Fer- 
nandez was February 26, I believe, 1972. 

Mr. Priestes. On or about that. 

Mr. Thompson. He called you at that time and indicated he had 
some familiarity with your FHA problems. 
Mr. Priestes. Yes, sir. 

Mr. Thompson. And could help you. Did he state to you the basis 
of his knowledge ? 



5340 

Mr. Priestes. Well, he did state it; it is very difficult; I think 
he was the fundraiser. He had been to a party and had met someone. 
I can't recall in detail ; it was in the papers but he had stated he had 
heard from Cuban builders or real estate people. 

Mr. Thompson. Do you know a man by the name of Nunez ? 

Mr. Priestes. Yes, sir. 

Mr. Thompson, Who is he ? 

Mr. Priestes. Carlos Nunez ; he was a former employee of mine. He 
is now a building contractor in Miami, Fla. 

Mr. Thompson. Did you ever talk to Mr. Nunez and ask him whether 
or not he had ever spoken to Mr. Fernandez about you ? 

Mr. Priestes. Yes ; I did. 

Mr. Thompson. Wlien did you talk with him ? 

Mr. Priestes. Just about 3 months ago. 

Mr. Thompson. What did he say about any conversations he had 
with Mr. Fernandez ? 

Mr. Priestes. He told me he had met Mr. Fernandez that night and 
they had discussed whether they could get potential contributors to 
the Latin group finance committee and he said my name had come up. 

Mr. Thompson. Did he indicate to you that he suggested your name 
as possibly someone who might contribute ? 

Mr. Priestes. He said he could have done that, sir. He said it could 
have been him or others there. He said he doesn't recall who brought 
my name up, but it was brought up. 

Mr. Thompson. Did he state whether or not your FHA problems 
could be brought up at the same time ? 

Mr. Priestes. Well, that was in the papers. It was in the headlines 
of the papers. 

Mr. Thompson. Excuse me, did he state whether or not your FHA 
problems were brought up at that time, in that conversation with Mr. 
Fernandez ? 

Mr. Priestes. He said they had spoken about my FHA problems or 
the newspapers, that the headlines 

Mr. Thompson. That they had spoken about in the newspapers; I 
want you to divorce what was in the newspapers from that conversa- 
tion that he had with Fernandez. 

Mr. Priestes. Well, he told me they had spoken about the headlines 
in the papers which were all concerning my FHA problems ; yes. 

Mr. Thompson. Dir Fernandez indicate that he had spoken to Nunez, 
specifically, when he talked to you ? 

Mr. Priestes. Yes ; I believe he might have mentioned Nunez and 
others. 

Mr. Thompson. How did Fernandez identify himself over the tele- 
phone ? 

Mr. Priestes. To the best of my knowledge as Mr. Benjamin Fer- 
nandez, who was the local chairman of the Hispanic Finance Commit- 
tee or something like that. I really can't remember exactly how he iden- 
tified himself. 

Mr. Thompson. Did you give his last name at that time? 

Mr. Priestes. Yes, sir. 

Mr. Thompson. In the telephone conversation ? 

Mr. Priestes. Pardon me? 

Mr. Thompson. I am asking you whether or not he gave his last 
name, Fernandez. 



5341 

Mr. Priestes. Yes, sir. 

Mr. Thompson. Did you know anything about Mr. Fernandez at 
that time? 

Mr. Priestes. No, other than what he told me on the telephone. 
Mr. Thompson. Did he indicate to you that he would try to get some 
help for you ? 

Mr. Priestes. On the telephone ? 
Mr. Thompson. Yes. 
Mr. Priestes. Yes, he did indicate that. 

Mr. Thompson. Did he also indicate that although he would try 
to help you that he would make indefinite promises? 

Mr. Priestes. On the telephone it was more — that was the indica- 
tion ; yes, sir. 

Mr. Thompson. Did he indicate what kind of help over the tele- 
phone ? 

Mr. Priestes. No, sir. I had assumed it was political help. 
Mr. Thompson. All right. At any time during that telephone con- 
versation or any other meeting that you had with him, did you discuss 
the specifics of exactly what kind of help he might give you ? 
Mr. Priestes. Yes, I did. 

Mr. Thompson. What kind of help did he say? 
Mr. Priestes. Well, he told me the next da}^, in the hotel room, that 
he would go directly to the top, so to speak, and he would introduce 
me to Maurice Stans who would call Secretary Romney. 
Mr. Thompson. Was there anything more specific than that ? 
Mr. Priestes. No, I felt that was specific enough. He told me more 
than once. 

Mr. Thompson. Were you under suspension at that particular time ? 
Mr. Priestes. No, I wasn't under suspension but I knew I was going 
to be suspended. 

Mr. Thompson. Did you tell him that you knew you were going 
to be suspended ? 
Mr. Priestes. Yes. 

Mr. Thompson. Did he indicate that he could prevent that ? 
Mr. Priestes. He indicated that he could either prevent it or if I 
were suspended, which was the likelihood, that the suspension could 
be appealed and lifted. 

Mr. Thompson. Wlien you had your conversation with Mr. Stans on 

March 13, was Mr. Sloan present during any part of that conversation ? 

Mr. Priestes. I recall Mr. Sloan being present. I met Mr. Sloan, he 

spoke briefly and we went into the office together, and I don't think 

he stayed there but a few minutes. I don't really recall. 

Mr. Thompson. Do you recall 

Mr. Priestes. I recall meeting him. 

Mr. Thompson. Do you recall whether he was present when you gave 
the check to Mr. Stans ? 

Mr. Priestes. I do not recall whether he was present or not. [Con- 
ferring with counsel.] 
Mr. RicHMAN. Would you repeat the question ? 

Mr. Thompson. Was Mr. Sloan present when you gave the check to 
Mr. Stans? 

Mr. Priestes. I do not recall. 

Mr. Thompson. But you do recall the details of the conversation ? 



5342 

Mr. Priestes. Yes ; basically, yes, sir. 

Mr. Thompson. When you walked in, how were you introduced to 
Mr. Stans, wlio introduced you ? 

Mr. Priestes. Mv. Fernandez introduced Mr. Stans to me as "Mr. 
Secretary." 

Mr. Thompson. Did he give any of your background or say anything 
about you ? 

Mr. Priestes. Yes, he said, "This is John Priestes, he is a building 
contractor from Miami and he is going to make a contribution to us for 
$25,000." 

Mr. Thompson. All right. "He is going to make a contribution of 
$25,000," and you gave him the check at that time ? 

Mr. Priestes. Yes, sir. 

Mr. Thompson. That check was made out to the Republican Na- 
tional Committee? 

Mr. Priestes. Yes, sir. 

Mr. Thompson. And that was unsatisfactory so far as Mr. Stans 
was concerned. 

Mr. Priestes. Yes, sir. 

Mr. Thompson. Was there any discussion concerning breaking 
the check down into $3,000 contributions for gift tax pur-poses? 

Mr. Priestes. Yes, sir. I recall the check was unsuitable for Mr. 
Stans and he looked at Mr. Fernandez and he explained to him 
that — why I could not get the check made out properly and Mr. 
Fernandez mentioned possibly it could be done with a series of smaller 
checks, cashier's checks or cash, 

Mr. Thompson. Or cash. 

Mr. Priestes. Yes, sir. 

Mr. Thompson. Did he indicate that smaller checks made out 
properly to tlie Finance Committee to Re-Elect or whatever, would 
have been satisfactory with him at that particular time? 

Mr. Priestes. I do not understand the question, sir. 

Mr. Thompson. I said, did lie indicate if checks, if the check or 
smaller checks, for $3,000 were made out by you to the finance com- 
mittee that they would have been satisfactory? 

Mr. Priestes. Yes, sir. 

Mr. Thompson. In other words, checks as such were not unsatis- 
f actoi-y ? 

Mr. Priestes. Yes, sir, he indicated that, yes, sir. 

Mr. Thompson. All riglit. 

Wliat other conversation did you have about the check or tlie pos- 
ible ways that you could make a contribution? 

Ml'. Priestes. I do not recall too mucli conversation about the check, 
otlier tlian Mi'. Stans did not find the check exactlv acceptable in its 
foim. T cannot reallv recall too much on the check itself. 

Mr. Thompson. At that time did he indicate, in anywav, that lie 
did not want the fact tliat you were making the contribution to the 
Committee To Re-Elect to be of public record or he did not want it 
to be of public knowledge? 

Mr. Priestes. T got the impression it was not to be of public 
knowledge ? 

Mr. Thompson. T am talking about your conversatioTi T am talking 
about what he said. 



5343 

Mr. Priestes. I cannot remember in detail, it was a year and a 

half ago. But, as I said, I cannot remember verbatim, word-for-word 

about the whole conversation, I can just give you a summarizing of it. 

Mr. Thompson. Did he say anything to the effect that he did not 

wish it to be a public record? 

Mr. Priestes. Did Mr. Stans say that? 
Mr. Thompson. Yes. 
Mr. Priestes. Not that I can recall. 

Mr. Thompson. All right. But he was willing for a check or checks 
to be made out at that particular time? 

Mr. Priestes. Mr. Fernandez, as I recall, was speaking about the 
checks. Mr. Stans did not, as I recall, did not actually talk but he was 
listening. 

Mr. Thompson. Was there any other conversation at all about the 
way your contribution might be handled before you got into looking 
in the scrapbook, that you can remember ? 
Mr. Priestes. I cannot really recall. 

Mr. Thompson. All right. So we have that discussion about the 
check. 

Now. you mentioned the fact that Mr. Fernandez suggested that you 
bring your scrapbook relating all your problems — publicity that you 
had? ■ 

Mr. Priestes. Yes, sir. 

Mr. Thompson. Plow did you get into the conversation about that? 

Mr. Priestes. Well, that was — I told him I had been in some trouble 

in Miami, Fla., and I said — he looked at the scrapbook, and I got the 

impression that Mr. Fernandez might have told him something before 

I came up there and I went over 

Mr. Thompson. How did you get that impression, Mr, Priestes? 
Mr. Priestes. Well, he seemed a little bit — you mention your laying 
out for somebody and explaining to him this was — the main problem is 
this Richard Green thing and I got the impression, I say because he did 
not seem to have to ask a whole lot of questions about him. 

Mr. Thompson. Did he look at 

Mr. Priestes. Yes, he looked at it. 
Mr. Thompson. 15 minutes or so? 
Mr. Priestes. Approximately, yes, sir. 
Mr. Thompson. Go over the clippings? 
Mr. Priestes. Yes, sir. 

Mr. Thompson. What was your purpose in showing him this? 
Mr. Priestes. Well, my purpose was to sliow him the type of trouble 
that I was in, what type of help I would need. 

Mr. Thompson. Was there any discussion about the unfair treatment 
you had been given in the newspapers ? 

Mr. Priestes. I do not recall anything about any unfair treatment 
from the newspapers. The fact that it was in the press, no, I do not re- 
call that at all. 

Mr. Thompson. Did you ever indicate to them that while you might 
have been in some violation of regulations or laws, that it was more 
of a t<^chnical violation ? 

Mr. Priesti<:s. Well, I did indicate that it was not a serious violation. 
Mr. Thompson. Not a serious violation. Could you not have ex- 
plained the nature of your problems to him without the benefit of the 
newspaper clippings ? 



5344 

Mr. Priestes. I could have explained the nature without the news- 
paper clippings ; yes, sir. 

Mr. Thompson. All right. When did you first discuss what might 
possibly be done to help you? Was it after you looked through the 
scrapbook or while you were looking through it or when ? 

Mr. Priestes. Well, we looked through the scrapbook and like I said, 
I cannot remember how it came up but I was concerned, I presented 
the check to Mr. Stans and after we looked at the scrapbook and I ex- 
plained it to him, I asked him if anything was going to be done. I said 
I was supposed to have a phone call made. 

Mr. Thompson. Was supposed to be done or whether anything could 
be done ? 

Mr. Priestes. Well, whether anything could be done or was going to 
be done, either, 

Mr. Thompson. Did you relate to Mr. Stans your previous conversa- 
tion with Fernandez ? 

Mr. Priestes. Concerning him calling ? 

Mr. Thompson. Yes. 

Mr. Priestes. No, I did not relate that. 

Mr. Thompson. Were you surprised when he made no offer to call 
Romney ? 

Mr. Priestes. Wait a minute, I did relate — I did not relate the con- 
versation. I did say : "Are you going to make a call to Romney ? I was 
promised that." Yes. 

Mr. Thompson. Did you mention Mr. Romney by name ? 

Mr. Priestes. Yes, sir. 

Mr. Thompson. "\Yhat did he say in reply to that ? 

Mr. Priestes. To the best of my knowledge, his reply was, "I will 
make a call and see what we can do. If we cannot do anything for you 
we will return the money." 

Mr. Thompson. Did he make any calls while you were there ? 

Mr. Priestes. No, sir. 

Mr. Thompson. Did you discuss the nature of your problems with 
him? You said you went through the scrapbook, and I am sure there 
are things in there, but did you discuss exactly what your problem 
was, exactly what your position was, the fact that you might be 
suspended, for example? 

Mr. Priestes. Well, yes. I did not discuss everything. There was quite 
a bit in there. I just told him basically, that the problem was this 
Richard Green. Everything in there was innuendo except concerning 
other matters, this Richard Green Building Corp. which did not exist 
or was not registei-ed, was the one that T was concerned about. 

Mr. Thompson. Everything in the newspaper articles was innuendo, 
is that what you are referring to ? 

Mr. Priestes. Everything — just a minute, let me qualify that. Every- 
thing in the newspaper articles were if — we are going into basically 
other areas. [Conferring with counsel.] Yes, sir, the item we were 
mainly concerned about was the Richard Green situation. 

Mr. Thompson. Rut you did not discuss any unfair treatment the 
press had given, pertaining to this particular matter with Mr. Stans, 
as a matter of educational benefit? 

Mr. Priestes. No, it was not unfair treatment by the press, it was 
their — T mean it was not an issue at all. 



5345 

]Mr. Thompsox. Did you discuss the fact tliat your help might be of 
the nature wliere you would need help on appeal, to Mr. Stans? 

Mr. Priestes. Yes, sir. 

Mr. Thompsox. Do you know whether or not Mr. Stans ever made 
any inquiry? 

Mr. Priestes. No, sir. 

Senator Baker. ]\Ir. Chairman, if Mr. Thompson would yield at 
this point. I think it mi^rht be helpful to the committee and in fair- 
ness to the record to call the committee's attention to a letter addressed 
to the chairman, dated November 6, 1973, from Wilkinson, Cragun and 
Barker of "Washington, counsel for Mr. Stans, and signed by Robert 
W. Barker which has attached to it a statement of Mr. Stans, dated 
November 6, 1973. which deals with the same subject matter; and the 
statement has attached to it a memorandum on the stationery of the 
Department of Housing and Urban Development, dated March 14, 
1972, from the Office of the Assistant Secretary for Housing Manage- 
ment, addressed to Mr. Stans and signed by G. Richard, I am sorry, 
I cannot read the last name, I believe it says Dunnells. 

Mr. Chairman, I realize this is out of order but this material is of 
such extraordinary importance that I believe, at this point in the rec- 
ord, I would ask that I might offer this letter and the statement of 
Mr. Stans to be read into the record, not only because I think fairness 
indicates that but because I think it might be useful in the further 
examination of this witness. 

Senator Er\ix. I would say that if the statement had been notarized, 
it would be admissible under the rules of the committee, unless some 
member of the committee disagrees. I would say, I think we could 
waive that rule, the verification, at the appropriate time, if the Senator 
agrees and the witness is asked to comment on it. I think that would 
be fair to the witness and Mr. Stans, both. 

Mr. Dash. I think the record should show it is not a sworn 
statement. 

Senator Baker, Yes. It should show that and, in effect, the chair- 
man has asked that I ask unanimous consent that it may be put in 
the record, which I now do. 

Senator Er\^x, If there is no objection, the letter will be admitted 
in evidence to go with the exhibit attached to it, notwithstanding the 
fact that it is not verified. 

Senator Baker. Thank you, Mr. Chairman. The letter, as I had said 
is dated November 6, 1973, addressed to the chairman: 

Deab Mr. Chairman : Your staff counsel have requested me to obtain and 
submit to you an affidavit of the Hon. Maurice H. Stans concerning a projwsed 
contribution to the Finance Committee to Re-Elect the President by a Mr. John 
Priestes. Mr. Stans is out of the city on prearranged matters and cannot be back 
this week. 

This request rai.ses questions of Mr. Stans' fundamental rights in the case 
of U.S. V. Mitchell, et al.. 73 CR 439. in New York. We draw your attention 
to our letter of June 4. 1973. Exhibit No. 26 in your hearing record, and my 
statement appearing at pp. 680-687 of the printed Hearings. Mr. Stans is unwill- 
ing voluntarily to do anything which will contribute to publicity which may 
tend to deny him a right of fair trial. 

The present request places Mr. Stans in the same position as your direction 
on June 12. that Mr. Stans testify. If Mr. Stans fails to respond, it could infer 
guilty knowledge. If he adds to publicity, he could interfere with a fair trial. 

Therefore, this letter and the attached statement are submitted without anv 



24-650 O - 74 - 6 



5346 

waiver on Mr. Stans' part and with the request that it be used by the Committee 
without publicity, in order not to add to the already inflamed climate of publicity 
so far as fair trial is concerned. 

I might say parenthetically, Mr. Chairman, I believe it is a fair 
statement to say you and I were both concerned with that language, 
how do you use it without publicity and I will make it part of the 
record. At our request Mr. Barker was contacted telephonically and 
indicated to Mr. Thompson that he was agreeable to the letter and 
the statement being used as a part of our hearing record. 

Senator Ervin. That is correct, as I understand it. 

Senator Baker. The letter continues : 

Since your hearings involving Messrs. Priestes and Fernandez go forward 
tomorrow, it is not possible to get to you an aflada\at. We have, instead, after 
telephone conferences with staff counsel discussed this matter in detail with 
Mr. Stans, checked Committee records and Mr. Stans has given us, by telephone, 
the enclosed statement of facts known to him. 

AVe enclose the statement for Committee use on the terms and conditions 
outlined above. 

And signed by Mr. Barker showing a carbon copy to Mr. Stans. 
The statement is as follows : 

November 6, 1973 : 1. This statement is made at the request of the staff of the 
Senate Committee on Presidential Campaign Activities for the puri>ose of furn- 
ishing it to that Committee in connection with the investigation of pending 
matters. It is furnished under conditions stated in the accompanying letter of 
counsel. 

2. Since February 15, 1972, I have been and now am the Chainnan of the 
Finance Committee to Re-Elect the President and predecessor committees with 
offices at 1701 Pennsylvania Avenue, N.W., Washington, D.C. 

3. Ben "Fernandez of Los Angeles, California, served as Chairman of the 
Hispanic Finance Committee to Re-Elect the President during the recent Presi- 
dential election campaign. 

4. On March 13, 1972, I met briefly in my office with Mr. Fernandez and a 
potential contributor named John Priestes. Mr. Priestes was brought to my 
office pursuant to a previous appointment by Mr. Fernandez. Mr. Fernandez had, 
on March 8, called Mr. Hugh W. Sloan, Jr.. Treasurer of the Committee, and 
had told him that my meeting with a potential contributor would be helpful. 
Mr. Sloan arranged the appointment through my sec-retary. Until the meeting, 
I did not know the name of the individual with whom I was to meet or the 
circumstances of the proposed contribution, only that Mr. Fernandez felt that 
it would assist in finalizing the proposed contribution if I were to meet with 
him and the contributor. 

5. At the meeting, Mr. Priestes offered a contribution to the campaign in the 
form of a check for $25,000, signed by another person (a Martin Woolin) and 
made payable, as I recall, to something like "Republican Party" or a similar 
phrase. It was not made payable to the Finance Committee to Re-Elect the 
President. We discussed that the payee of the check would have to be changed. 
While I do not recall discussing this point, normally to protect a contributor 
against unintended gift taxes we would have discussed designation of several 
committees to receive $3,000 or a breakdown into several checks. I do not 
recall specifically whether we discussed this with Mr. Priestes but I believe we did. 

6. After discussing the check, Mr. Priestes then proceeded to give me a file of 
newspaper clippings from the Miami Herald, dated in February of 1972. highly 
critical of Mr. Priestes. The gist of the articles was that Priestes had realized a 
large windfall profit on a FHA low cost housing program, primarily because of 
favors allegedly granted to him by a suspended FHA director in Miami named 
Pelski. The newspaper articles related that as a result, Priestes liad moved 
from 19th to 2nd in homebuilders in Dade County, Florida, in one year's time. 
The allegations also stated that Priestes had used a number of disguised corpora- 
tions for the purpose of handling the contracts. Copies of the newspapers have 
been furnished the Committee staff. Mr. Priestes stated that he was an unfair 
victim of the Miami Herald and that he was fearful that action might be taken 
against him by HUD or FHA on the basis of the unfavorable publicity without 



5347 

his having an opportunity to defend himself. He said that he hoped that HUD 
would treat him fairly. 

7. I flipped through the file of newspaper clippings in his presence and promised 
to read them later. I also told him that I could not evaluate the situation without 
knowing FHA's attitude toward him and his transactions ; that I would have to 
check with HUD. I returned the check either to Fernandez or Priestes to hold 
until I had been able to do so. 

8. On the same day, I had a meeting with Mr. G. Richard Dunnells, Deputy 
Assistant Secretary of HUD. At that meeting. I asked Mr. Dunnells to check 
out Priestes" records with FHA and HUD, and advise as soon as possible. Later 
on the same day at a scheduled meeting with Bill Gifford of the White House 
staff, I discussed the Priestes visit and asked him to check such sources as were 
properly available to him and to let me know what he could learn from those 
sources about Priestes. 

9. On March 14, Dunnells wrote me a letter stating that HUD had suspended 
Priestes on March 13. and "any contact with Priestes at this time would, in our 
opinion, be highly inappropriate." So far as I can recall, at the time of my conver- 
sation with Priestes. no mention was made of the fact that he had been suspended. 
I made a notation on the letter received from Mr. Dunnells : "Drop Contact." 
Attached as exhibit 1 is a copy of Mr. Dunnell's report. 

10. On March 17, I received a phone call from Gifford saying, "Priestes is not 
clean ; lie uses dummy corporations, is unreliable and undesirable." 

11. On March 18, I talked by telephone with Mr. Fernandez ^nd reported this 
information to him and told him to terminate any contacts with Mr. Pi-iestes. Mr. 
Fernandez told me that he would do so at once and would accept no contribution 
from him. 

12. To the best of my knowledge, the Finance Committee has never received a 
contribution from Mr. Priestes directly or indirectly. A special check by the 
Finance Committee staff of the committee records, discloses no contribution from 
Mr. Priestes. 

13. So far as I know, Mr. Fernandez acted carefully and properly in this 
matter, but in any event, if Mr. Priestes had any idea of getting favors l)y 
offering a contribution, it is obvious that not only did he not receive them 
but that he was totally ,and permanently rebuffed because of his record with 
FHA. 

Attached as exhibit 1 to the statement, is the memorandum addressed 
to Mr, Stans, which is short and which I will read. It says : 

Mr. Priestes is under investigation by both HUD and Justice regarding his 
dealings with HUD's FHA Coral Gables office. Allegations of his .seeking favorit- 
ism from FHA Director Pelski have been made. 

HUD has suspended Priestes from further dealings with FHA as of Monday, 
March 13. 1972. 

Allegations regarding Priestes and Pelski have been highly publicized by 
Miami Pre.ss. 

Any contact with Priestes at this time would, in our opinion, be highly in- 
appropriate. 

Signed by Richard Dunnells and, at the bottom, is the script hand- 
written notation which INIr. Stans refei-s to in his statement saying 
"Drop Contact— MHS" encircled. 

Mr. Chairman, pursuant to the previous unanimous consent and 
order, I now offer these documents for identification and inclusion in 
the record as appropriately numbered exhibits. 

Mr. Thompson. Pardon me. 

Sejiator Ervix. Do you wish to see this? Let counsel see them, then 
the reportei" can mark them for the record. 

In view of the statement in the first letter from Mr. Barker, we 
have received a second letter authorizing us to make public the state- 
ment Mr. Stans forwarded to the committee. So to keep the record 
straight and remove any misapprehensions, the committee will offer 
the documents in evidence to be received as an exhibit and appro- 
priately numbered as such. 



5348 

[The document referred to was marked exliibit No. 265.* At the 
request of the chairman, a letter to liim, dated August 21, 1973, with 
attachment, is appended to exhibit 265 for the record on p. 5714. Sub- 
sequent to the hearing, another letter, dated November 13, 1973, was 
received by the chairman and is also included on p. 5733.] 

Senator Baker. Mr. Chairman, it has been pointed out to me by 
both Mr. Dash and Mr. Thompson that the reference by Mr. Stans that 
he has supplied the committee staff the newspaper articles he referred 
to, if we interpret that correctly, is apparently in error. I understand 
we do not have the newspaper clippings, and I assume counsel will then 
ask counsel for Mr. Stans to supply that so that the record will be 
complete. 

Senator Ervin. Do you have any more questions ? 

Mr. Thompson. Mr. Chairman, just one or two more questions. 

Mr. Priestes, the reason I was asking you about the specific nature 
of the conversation was to determine the situation on one hand, when 
Mr. Stans was indicating he would try to do something for someone, 
who in effect, had given a substantial contribution, which would be 
proper or legal, or doing something improper or illegal on the other 
hand. 

First of all, did you know that Mr. Stans had made inquii-y of the 
Deputy Assistant Secretary of HUD ? 

Mr, Priestes. No, sir. 

Mr. Thompson. This letter is dated March 14, which was the day 
after your meeting with him, was it not ? 

Mr. Priestes. Yes, sir. 

Mr. Thompson. This is a response to Mr. Stans on official Depart- 
ment of Housing and Urban Development stationery ? 

Do you know why he would make this inquii-y through official chan- 
nels concerning the nature of your situation and was that in keeping 
with what he told you on that case ? 

Mr. Priestes. I don't know why he would, sir. 

Mr. Thompson. That is all I have. 

Senator Erven. Mr. Fernandez was engaged in raising campaign 
contributions for the Committee To Ee-Elect the President? That is 
what he told you ? 

Mr. Priestes. Yes, sir, he told me that. 

Senator Ervin. You told him that you were in trouble on account 
of some controversy with the FHA ? 

Mr. Priestes. Yes, sir. 

Senator Ervin. He told you that if you could raise $100,000, he 
could help you out ? 

Mr. Priestes. Yes, sir. 

Senator Ervin. And you did get a check from a friend for $25,000 
at the instance of Mr. Fernandez ? 

Mr. Priestes. Yes, sir. 

Senator Ervin. The check was made to the ENC, the Republican 
National Committee ? 

Mr. Priestes. Yes. 

Senator Ervin. And you came to Washington at Mr. Fernandez' 
request? 

Mr. Priestes. Yes, sir. 

*See p. 5706. 



5349 

Senator Ervin. Mr. Fernandez accompanied you and made an ap- 
pointment with Secretary Stans ? 

Mr. Priestes. Yes, sir. . a. ^.u^ ^^^^ 

Senator Ervin. And with Mr. Fernandez, you wwit to the olhce 
of Mr. Stans as chairman of the Finance Committee To Re-Elect the 
President, didn't you ? 

Mr. Priestes. I didn't go with him, I 

Senator Ervin. You met him there ? 

Mr. Priests. I met him there ; yes, sir. ,, 01 j j^^ 

Senator Ervin. Then you were introduced to Mr. Sloan and after 
you were introduced to Mr. Sloan, as I understand it, there was nothing 
said about any condition being annexed or anything about the agree- 
ment between you and Mr. Fernandez to Mr. Sloan. He was merely in- 
formed that you were a prospective contributor ? ,^ . ^ 11. 

Mr. Priestes. I don't think Mr. Sloan was really informed about 

Senator Ervin. At any rate, Fernandez and you then went into Mr. 
Stans' office ? 

TVTr Priestes Y^es sir. 

Senator Ervin. And you had brought with you some newspaper 
clippings which showed that you were in trouble with FHA? 

Mr. Priestes. At Mr. Fernandez' suggestion. 

Senator Ervin. Yes, sir, and you gave those clippings or scrapbook 
to Mr. Stans? 

Mr. Priestes. Yes, sir. 

Senator Ervin. And Mr. Stans looked through them ? 

IVTr Priestes ^^es sir. 

Senator Ervin. They stated that you were in trouble with FHA? 

Mr. Priestes. Yes, sir. 

Senator Ervin. Then you gave the check to Mr. Stans, didn't you? 

Mr. Priestes. Yes, sir. 

Senator Ervin. Mr. Stans discussed with you that it would be prefer- 
able to make the contribution in cash or to make it in the form of 
checks, either cashiers' checks or checks bearing the signature of people 
who had Spanish names ? 

Mr. Priestes. Sir, I am not exactly clear whether it was Mr. Stans 
or Mr. Fernandez. I think, to the best of my knowledge, it was Mr. 
Fernandez. It was quite a while ago, I am not really clear. But the 
suggestion was made ; yes, sir. 

Senator Ervin. In the presence of Mr. Stans? 

Mr. Priestes. Yes, sir. 

Senator Ervin. And you indicated to Mr. Stans that you wanted 
some assurance, that you had expected him to call Mr. Romney, the 
Secretary of HUD ? 

Mr. Priestes. Yes, sir. 

Senator Ervin. And you wanted some assurance that he would call 
Mr. Romney? 

Mr. Priestes. For my contribution, yes, sir ; I expected that. 

Senator Ervin. Theii he told you that he would call Mr. Romney, 
and if he couldn't do anything for you, that he would return the check 
to you? 

Mr. Priestes. Yes, sir. 

Senator Ervin. And you left the check in his hands ? 



5350 

Mr. Priestes. Yes, sir. 

Senator Ervin. Did you take the clippings with you or leave them 
there? 

Mr. Priestes. I left the clippings with Mr. Stans. 

Senator Ervin. And after some days, some man whose name you 
do not recall or did not know returned the check to you in Florida? 

Mr. Priestes. Yes, sir. 

Senator Ervin. How long after you left it with Mr. Stans ? 

Mr. Priestes. To the best of my knowledge, it was approximately 2 
w^eeks. 

Senator Ervin. Thank you. 

Senator Baker. 

Senator Baker. Mr. Chairman, thank you. 

I have just one question. I believe, Mr. Priestes, you have heard the 
statement that Mr. Stans submitted ? 

Mr. Priestes, Yes, sir. 

Senator Baker. Do you disagree with it in any material respect? 

Mr. Priestes. Well, basically, as I heard the statement read, I 
thought it was basically true. 

Senator Baker. Thank you, sir. 

Senator Ervin, Senator Inouye. 

Senator Inouye. I have no questions, sir. 

Senator Ervin. Senator Weicker, 

Senator Weicker. How would you categorize what you were doing 
here? In other words, not speaking for anybody else involved in this 
rather extraordinary sequence of events, what did you think you were 
doing? 

Mr. Priestes. I am not exactly clear 

Senator Weicker, Let's categorize, what did you think vou we^ 
doing ? 

Mr. Priestes. What did I think I was doing? 

Senator Weicker. Right. 

Mr. Priestes. I thought I was paying $25,000 down, with a promise 
to pay an additional $25,000 for a political favor. 

Senator Weicker. A political favor or governmental favor? 

Mr, Priestes, Well, I don't know how, exactly how to describe it. I 
don't know what type of favor you would describe it as. The end 
result was that I was going to be an eligible building contractor again. 
It would have been a favor. 

Senator Weicker. Did you think of this in your mind as a bribe to 
Government officials ? 

Mr. Priestes, I didn't give it a lot of thought as a bribe. No, I didn't 
really give it that thought, I just thought it was the way things are 
done. 

Senator Weicker. You know, I confess, even during the recounting 
of your story, I heard some laughter from time to time throughout this 
room, I tell you, I don't see much funny about this, I am sure you 
don't, either. 

Mr. Priestes. No, sir. 

Senator Weicker. Let me ask you this question : The gentleman who 
testified before this committee this morning — I believe his name was 
Mr. Marumoto. Did you have occasion to see him on television as he 
was testifying ? 



5361 

Mr. Priestes. No, sir, I did not watch it. 

Senator Weicker. Have you ever met Mr. Marumoto ? 

Mr. Priestes. No, sir. 

Senator Weicker. I was wondering wlio the others were in that 
room on JNIarch 12. You say tlicre were others in the room. One Avas 
named Manolo Casanova. He came from Miami. 

Mr. Priestes. I just retraced that later, after — I had forgotten his 
name. Later on, in testimony before tlie FBI, I — actually, I heard 
that from the newspapers. I had forgotten what his name was and the 
newspaper reporters in Miami, Fla., asked me if I had known a Manolo 
Casanova. I didn't give them an answer, but at that time, I remem- 
bered that that was Manolo Casanova. 

Senator Weicker. How many other persons were in that room ? 

Mr. Priestes. To the best of my knowledge, there were two other 
persons in the room besides Mr. Manolo Casanova. 

Senator Weicker. Besides Manolo Casanova ? 

Mr. Priestes. And then, Mr. Fernandez. 

Senator Weicker. Besides yourself and Mr. Fernandez, there were 
two other persons ? 

Mr. Priestes. Yes, sir. 

Senator Weicker. But you do not know who they were? 

Mr. Priestes. No, sir. They all heard the discussion about the ITT 
contribution though. 

Senator Weicker. When you say discussion, you mean 

Mr. Priestes. That was the reason I told them that they were hitting 
me too heavy. I said, because of this, this does not seem fair to me. 

Senator Weicker. Well, in other words, were the persons in that 
room then also aware of your problem and how you were going to 
resolve this problem? 

Mr. Priestes. They seemed to be aware of the problem, because we 
discussed— I talked about coining down from $100,000 to $50,000. The 
main issue was this thing, this ITT thing. I did not think it was fair. 

Senator Weicker, So that the persons in the room on March 12 at 
the Hay- Adams were there when you actually walked into the room ? 

Mr. Priestes. Yes, sir. 

Senator Weicker. And were party to the conversations that you 
were having with Mr. Fernandez ? 

Mr. Priestes. Wei, it was a very informal-type group. They were 
sitting there and it was not anything like walking silently and talking 
to you privately. It was nothing like that. I just told him, listen — ^I 
had just read the papers — I see where ITT got in some trouble for a 
$200,000 contribution, something like that. I said, this is rather heavy 
for me to pay $100,000. 

One of the fellows said, well, the contribution was really $400,000, 
something like that. 

I said, I do not care. You are talking about one of the biggest cor- 
porations in the United States and I think I should get a better break. 
Senator Weicker. Well, I am still trying to pin down these other 
indi\dduals. Did they appear to be associated with Mr. Fernandez? 
Mr. Priestes. They definitely appeared to know Mr. Fernandez, 
because it was informal. As I recall, they might have had cokes or 
drinks or something. I was sitting — they were sitting like on the edge 
of the bed and the desk and they appeared to know what was going on. 



5352 

Senator Weicker. Did they have any comments to make on your 
own particular situation ? 

Mr. Priestes. No, but they seemed familiar with my situation, 
familiar basically, that I was contributing $100,000. 

Senator Weicker. Now, the contacts that you had with Mr. Fer- 
nandez, your initial contact with Mr. Fernandez, am I correct in assum- 
ing from testimony that you have given that he seemed to know of 
your situation through — well, let me ask the question. Did he seem 
to know of your situation through the press, through friends of 
yours ? 

Mr. Priestes. He seemed to have known it through Latins in the 
Miami area and also through the press, possibly. It was well known, 
primarily through the Latins that told him about the papers. I did not 
really question him thoroughly as to how he found out about it. 

Senator Weicker. In any event, it did not seem as if — did it seem 
as if he were apprised of these matters through the FHA ? 

Mr. Priestes. No, sir. No, I do not think so, because I later, I told 
you, I 

Senator Weicker. You called William Polski. the FHA director at 
Coral Gables ; is that correct ? 

]\Ir. Priestes. Yes. 

Senator Weicker. After your initial contact with Mr. Fernandez ? 

Mr. Priestes. Yes, I did. 

Senator AVeicker. I notice in your witness summai-y here, it says 
that Pelski said, Fernandez was legitimate. Well, Avhat was the nature 
of your question to Pelski and what was the nature of liis response to 
you ? 

INIr. Priestes. Well, I told Mr. Pelski that I Avanted to meet with 
him and I met with him at a restaurant, went into complete detail. T 
told him exactly what had happened. He did not seem like he knew 
exactly. I showed him the card and he Avrote Mr. Fernandez' name 
down and also wrote the writing on there, which was Hispanic Finance 
Committee To Re-Elect the President. 

He said he would make some calls and call me back later, which he 
did the next day. 

Senator Weicker. And then in the call back, they were legitimate ? 
I mean, obviously, the word "legitimate,'' was that the substance of 
the telephone call, or what ? 

Mr. Priesti:s. Sir, when T said legitimate, I mean I do not exactly 
mean it. I mean that the job was going to be done, this Avas the AA'ay 
the job Avas to be done. 

Senator Weicker. In other words, then, I gather what you are tell- 
ing me is, in your convei-sation Avith Mr. Pelski, you indicated to him 
that you looked upon this as a AA^ay of getting out of your difficulties 
with the FHA ; is that correct ? 
Mr. Priest]:s. Yes, sir. 

Senator Weicker. So you Avere asking him for his analysis as to 
whether, in fact, this AA\as a Avay of getting out of vour difficulties AAnth 
the FHA? 

Mr. Priestes. Yes, sir. 

Senator Weicker. And he called you back and said, yes ? 
Mr. Priestes. He told me he would make a call and find out and he 
would get back Avith me the next day, which he did. 



5353 

Senator Weicker. Did he give you any idea as to whom he contacted 
to get tills type of infoi ination ? 

Mr. Pkiestes. No, sir. 

Senator "Weicker. He just called you back and said, indeed, this was 
a proper channel for you to get out of your j^redicament. But he in no 
wise gave you indication as to who he talked to? Did he tell you he 
got in touch with FHA or HUD or anyone ? 

Mr. PuiESTES. Sir. lie made a telephone call. He said he had checked 
it out and that they could handle the job. 

Senator Weicker. A^'ho could handle the job ? 

Mr. Priestes. Tlie job could be handled thi-ough the Hispanic Fi- 
nance Committee. He told me that the committee would be — the con- 
tribution, if I made the contribution, that the suspension would be 
lifted, that they could indeed handle that. 

Senator Weicker. So he indicated that he had been in touch with 
the Hispanic ■ 

Mr. Priestes. No, sir, no, no. He did not indicate that. He indicated 
that he had been in touch with someone else. 

Senator Weicker. Were you ever in touch with anybody from — 
with the exception of Pelski — were you ever in touch with anyone from 
either HUD or FHA? 

Mr. Priestes. Will you repeat that, please, sir ? 

Senator Weicker. Aside from your contacts with Mr. Pelski, did you 
have any contact relative to this matter, which you have testified to 
before the committee, with any one from HXTD or FHA? 

Mr. Priestes. Do you mean was it ever mentioned to anyone ? 

Senator Weicker, No, did you have contact with officials — did you 
have any contact with officials from HUD? 

Mr. Priestes. No, sir. 

Senator Weicker. Aside .from Pelski, did you have contact with any- 
one from FHA ? 

Mr. Priestes. No, sir. 

Senator Weicker. So your contacts in this matter were with Mr. 
Fernandez of the Hispanic Finance Committee, or whatever the com- 
mittee name is, Mr. Sloan, and Mr. Stans of the Committee to Re-Elect 
the President? 

Mr. Priestes. Yes, sir. 

Senator Weicker. And that is the sum total of your acquaintances 
as to your attempt, as you described it to us, to resolve your difficulties? 

Mr. Priestes. Yes, sir. 

Senator Weicker. I have no further questions on this subject, Mr. 
Chairman. 

Senator Frvin. Senator Montoya. 

Senator Montoya. Mr. Priestes, did you ever receive the newspaper 
clippings? 

Mr. Priestes. No, sir. 

Senator Montoya. They were kept by Mr. Stans ? 

Mr. Priestes. T do not know. T assume they were. 

Senator Montoya. T was wondering why the statement was so accu- 
rate, the statement referred to a while ago. 

Now, after vou received the check, you made a call to Mr. Fernandez 
in California? 

Mr. Priestes. Yes, sir. 



5354 

Senator Montoya. And Mr. Fernandez again solicited you for a 
cash contribution of $5,000 ? 

Mr. Priestes. No, I made the call. Mr. Fernandez told me he would 
call me back, he would check and call me back. He called me back 3 
hours later, approximately 2 or 3 hours later. 

Senator Montoya. What did he say in that conversation ? 

Mr. Priestes. At that time, it seemed like I was talking to a different 
man. He said, well, we cannot help you, we cannot do you any good. 
You can make a contribution of $5,000 if you would like. 

I said, well, wait a minute. I said, what can I get for the $5,000? 
He said, well, we cannot promise you anything at all for the $5,000. 
He said, we would like you to make the $5,000 donation, but the only 
thing we can do is, he said, we will make it known. 

I said what about the other deal ? 

He said, no, we never promised you anything like that at all. 

Senator Montoya. What do you have to say about the fact that the 
memorandum came from HUD to Mr. Stans on March 14 indicating 
that you were under charges before HUD and that you were under 
investigation by the Department of Justice and bv HUD, and that, 
therefore, they should forget about this contribution, and then they 
waited 2 weeks until they gave you back the check? 

Mr. Priesti^s. Just a minute. You said what do I have to say about 
the fact that — the question was sort of lengthy. I got lost. 

Senator Montoya. Well, HUD informed Iklr. Stans 

Mr. Priestes. Yes, sir. 

Senator Montoya (continuing). On or about March 14, as I recall 
that you were under investigation by HUD and by the Department 
of Justice, and you did not receive the check until 2 weeks later. Was 
that not kind of strange? 

Mr. Priestes. Yes, sir. 

Senator Montoya. Was that not kind of strange? 

Mr. Priestes. Well, I thought it was strange; yes, sir. 

Senator Montoya. And I think the statement by Mr. Stans indi- 
cated that he had passed on this information to Fernandez to forget 
about you. Therefore, is it not kind of strange that Mr. Fernandez 
still continued to solicit you the day after he got the check? 

Mr. Priestes. Yes, sir. Well, I thought it was strange, and I tell you, 
in my home, I have a recorder that records telephone calls when I am 
not there. Mr. Fernandez had called a few times and tlie message was 
on a tape. I assumed that he thought, possibly, he did not want to dis- 
cuss this too much on the phone, maybe he would think it would be 
taped or something, I do not know. Then he called later and he was 
talking m circles. I did not understand him. 

Senator Montoya. What did he say to vou on the day that he was 
soliciting the $5,000 contribution ? 

Mr. Priestes. That was tlie phone call— said that lie could not do 
anything — no, he said he never promised me anything. 

I said, well, I wanted what I had made the $25,000 check out for, 
why I did that. 

He said, well, we never promised you anything at all. He said, we 
would like you to make a $5,000 contribution, legitimate, whatever, and 
we could not do anything for you but just let it be known that you had 
made this contribution. 



5355 

I still don\, know why he went from $25,000 to $5,000. He denied 
that ho even asked for the — that he could do anything. It was a riddle 
why, all ot a sudden, it was $25,000 and now down to $5,000 with no 
promise of anythino;. 

Senator Montota. Didn't it appear strange to you that out of a 
clear, blue sky, Fei-nandez from California would knock at your door 
and ask for a '$100,000 contribution ? 

Mr. Priestes. lie didn't knock at my door, sir, but he did call me 
on the phone. 

Well, it didn't appear strange. He had told me that he was collecting 
funds for the Latin group, the Hispanic Finance Committee, and I 
didn't think it strange, because he had told me he had been to a party 
and met other builders and building contractors and my name was 
mentioned as a potential contributor. 

Senator Montoya. Why would he cite an amount to you for a 
contribution ? 

Mr. Priestes. Pardon? 

Senator Montoya. AVhy would he tell you to contribute $100,000? 

Mr. Priestes. You mean why the high amount? Well, he mentioned 
that at this party, they had told him that I could afford that amount. 
That is the w^ay I got it, that it was a good round number. 

Senator Montoya. Now, what did you tell Mr. Pelski when you made 
inquiry about Fernandez? 

Mr. Priestes. I told him exactly what happened and I told Mr. Pel- 
ski — showed him this card and I told him that they had promised that 
it could be done for me. He then told me he would make a call and 
check on it and get back with me. 

Senator Montoya. Why did you go to ]VIr. Pelski to check on Fer- 
nandez when you knew that Fernandez was from California ? 

Mr. Priestes. Mr. Pelski — I had an association with him. 

Senator Montoya. What indication did you have that Mr. Pelski 
would be the man to check on Fernandez ? 

Mv. Priestes. I understand the question, but I don't — I knew Mr. 
Pelski very well. 

Senator Montoya. That is all. 

Thank you, Mr. Chairman. 

Mr. Dash. I have just a couple of questions. 

Mr. Priestes, when Mr. Fernandez first discussed what help he might 
be able to obtain for you, according to your testimony, for your con- 
tribution, did he put it on the basis that he could help you obtain a fair 
trial or a fair hearing ? 

Mr. Priestes. No, sir. I expected to receive a fair trial without pay- 
ing any money. I mean it was not — there was nothing to do with a 
fair trial, a fair hearing. 

Mr. Dash. That was not mentioned at all ? 

Mr. Priestes. No, because I made it clear that was not what I wanted. 
I said I didn't want to make a contribution, I was not interested. 

Senator Ervin. You were like one of my clients I had one time. He 
asked me what I could do and I said, I will try to get you justice. He 
said, that is the last thing in this world I want. [Laughter.] 

Mr. Dash. Now, did Mr. Fernandez, during his discussion with you 
at any time, tell you that he expected to obtain any high Government 
appointment? 



5356 

Mr. Priestes. Yes, sir, he did. He told me he expected to be appointed 
as Secretary of Commerce. 

Mr. Dash. When did he tell you that ? 

Mr. Priestes. At the very first meeting. He told me that he was try- 
ing to raise funds and he was doing as good a job as possible and he had 
hoped that he would obtain that position — was looking forward to 
it. 

Mr. Dash. Now, you responded to a question put to you when you 
heard Mr. Stans' statement that essentially, that was a truthful state- 
ment. The one specific thing I wanted to know, wanted to keep for the 
record, as I recall your prior testimony, that it is your testimony that 
when you were with Mr. Stans, you told Mr. Stans you expected him 
to call Mr. Romney at that time and that he told you he would call 
later? 

Mr. Priestes. Yes, sir. Words to that effect. 

Mr. Dash. Did you mention Mr. Romney 's name ? 

Mr. Priestes. Yes, sir. 

Mr. Dash. And did he say he would call you later? That is not in 
the statement. 

Mr. Priestes. He said he would call later or he said he would make 
a call. That was the main reason for the contribution to begin with, not 
that I wanted to make a contribution at all. The main reason was what 
could be done. 

Mr. Dash. All right, now, just prior to this event, you never met 
Mr. Fernandez before ? 

Mr. Priestes. No, sir. 

Mr. Dash. You never had any dealings with Mr. Stans? 

Mr. Priestes. No, sir. 

Mr. Dash. Or anybody else at the Committee To Re-Elect the Presi- 
dent? 

Mr. Priestes. No, sir. 

Mr. Dash. You have already been sentenced, is that true ? 

Mr. Priestes. Yes, sir. 

Mr. Dash. Is there any benefit that you may receive as a result of 
giving this testimony before this committee ? 

Mr. Priestes. I have no benefit at all right now, sir. 

Mr. Dash. Do you harbor any grudge against Mr. Fernandez, Mr. 
Stans, or anybody you testified about ? 

Mr. Priestes. No, sir, I have no grievance of any kind. 

Mr. Dash. As a matter of fact, we approached you for this testimony, 
did we not ? 

Mr. Priestes. Yes, sir. 

Mr. Dash. I have no further questions. 

Senator Baker. Mr. Chairman, might I say that I have been 
advised by Mr. Thompson since my previous statement that we have 
now received or the staff has now received the newspaper clippings 
which were referred to. If there is no objection Mr. Chairman, we will 
ask that they go into the files of the committee for appropriate 
reference. 

Senator Ervin. I will say counsel can look at them and see what 
they offer and just be put in the files. 

[The documents may be found in the files of the committee.] 



5357 

Mr. Tjiompson. I might point out the letter was correct, they were 
in our files. They had not come to Mr. Dash's or my attention before 
this time. 

Senator Ervin. Mr. Priestes, I want to thank you on behalf of the 
committee for your appearance today. You didn't ask immunity and 
we want to thank you for your cooperation. 

Mr. Priestes. Thank you, sir. 

Senator Ervin. The committee will stand in recess until 10 o'clock 
tomorrow. 

[Whereupon, at 5 p.m., the committee recessed to reconvene at 
10 a.m., Thursday, November 8, 1973.] 



THURSDAY, NOVEMBER 8, 1973 

II.S. Senate, 
Select Committee on 
Presidential Campaign Activitibs, 

Washington^ D.G. 

The Select Committee met, pursuant to recess, at 10 :05 a.m., in room 
318, Eussell Senate Office Building, Senator Sam J. Ervin, Jr., chair- 
man. 

Present: Senators Baker (presiding), Talmadge, Montoya, and 
Weicker. 

Also present: Samuel Dash, chief counsel and staff director; Fred 
D. Thompson, minority counsel; Rufus L. Edmisten, deputy chief 
counsel ; David M. Dorsen and James Plamilton, assistant chief coun- 
sels ; Barry Schochet, W. Dennis Summers, and Alan Weitz, assistant 
majority counsels ; Michael J. Madigan and Robert Silverstein, assist- 
ant minority counsels; Jed Johnson, investigator; Pauline O. Dement, 
research assistant; Eiler Ravnholt, office of Senator Inouye; Bruce 
Jaques, Jr., office of Senator Montoya; Ron McMahan, assistant to 
Senator Baker; Emily Sheketoff, assisting Senator Weicker; John 
Walz, publications clerk. 

Senator Baker. The committee will come to order. 

The chairman is unavoidably detained with other duties this morn- 
ing and he asked me to open the hearings and proceed. He announced 
he will be here shortly. 

Counsel will call the first w^itness, please. 

Mr. Dasti. Mr. Benjamin Fernandez. 

Mr. Chairman, Assistant Chief Counsel David Dorsen will question 
the witness. 

Senator Baker. Will the witness please stand ; hold up your right 
hand, please. 

Do you solemnly swear that the testimony you will give before this 
committee will be the truth, the whole truth, and nothing but the 
truth, so help you God ? 

Mr. Fernandez. I do. 

Senator Baker. Thank you, sir. Would you be seated ? 

Mr. Dorsen. 

Mr. Dorsen. Mr. Fernandez, I see you are accompanied by counsel. 
Will counsel please identify themselves ? 

Mr. Jacomini. Clement jacomini, Los Angeles, Calif. 

Mr. Ely. I am Nathaniel Ely of Washington, D.C., and Maryland. 

Mr. Dorsen. Mr Fernandez, I understand you have an opening 
statement to read. 

(5859) 



5360 

TESTIMONY OF BENJAMIN FERNANDEZ; ACCOMPANIED BY 
CLEMENT H. JACOMINI AND NATHANIEL J. ELY, COUNSEL 

Mr. Fernandez, Yes, sir. 

Mr. DoRSEN. Would you please go ahead and read it ? 

Mr. Fernandez. My name is Benjamin Fernandez. My address is 
19913 Blackhawk Street, Cliatsworth, Calif. I am an economist. 

I have been active in community and civic affairs for the past 10 
years. Currently, I serve as a trustee of the Claremont University Cen- 
ter, Claremont, Calif.; as a trustee, the Council on Opportunity in 
Graduate Management Education, Cambridge, Mass. ; as a member of 
the board, the National Center for Voluntary Action ; and a member of 
the board of the President's National Council for Minority Enterprise. 

Previously, I served as board chairman/president of the National 
Economic Development Association, which was established to foster 
the free enterprise system among the Spanish-speaking people of the 
United States. I served in this position as a full-time executive without 
compensation. 

Knowing that Maurice H. Stans, then Secretary of Commerce, was 
soon to become chairman of the Finance Committee To Re-Elect the 
President, I asked him for permission to organize the National His- 
panic Finance Committee for the Re-Election of the President. On 
February 24, 1972, permission was granted, and I became chairman of 
the committee, reporting directly to Secretary Stans. 

Spanish-speaking Americans responded to the President's positive 
programs, and it was my good fortune to be included among the Span- 
ish-speaking leadership in the 1972 Presidential campaign. 

The formation of the National Hispanic Finance Committee meant 
that for the first time in our Nation's history, the Spanish-speaking 
people were invited to participate in an up-front manner during a 
Presidential campaign. 

Hundreds of people like myself who had never been involved in a 
political campaign of any type, donated our time, our money, and our 
energies to return to office a President who had, by his actions, em- 
braced us as first-class citizens. We were totally committed. Indeed, our 
dedication has not wavered. 

We are proud of our modest accomplishments in 1972, and look for- 
ward to further participation in the political process of our country. 

As a result of the administration's program for minority citizens 
nationwide, the percentage of Spanish-speaking voters casting ballots 
for the Republican nominee increased from approximately 6 percent in 
1968 to about 35 percent in 1972. 

I like to think: that the efforts of the National Hispanic Finance 
Committee contributed substantially to this dramatic increase. For 
the first time in our Nation's history, hundreds of thousands of Span- 
ish-speaking voters became viable participants in our two-party sys- 
tem of Government. 

The final financial statement of the National Hispanic Finance 
Committee was filed with the Comptroller General of the United 
States on August 31, 1973. To my knowledge, the figures contained 
in this report reflect a true and accurate accounting of all moneys 
collected and expended by the National Hispanic Finance Committee 
for the Re-Election of the President. 



5361 

I think it is vital to note that more than 75 percent of these campaign 
funds were in contributions of $100 or less. 

To my knowledge, in no single instance was there ever offered a 
promise of political favoritism, coercion, or other similar tactic em- 
ployed in the solicitation, collection, or expending of these campaign 
contributions. 

Yesterday, I sat in this hearing room while a man named John 
Priestes did everything in his power to stain my good name and that 
of the National Hispanic Finance Committee. 

I am appalled, shocked, and disgusted with the tenor of his testi- 
mony. I am now forced to defend myself against these accusations. In- 
deed, his allegations against me and the committee — the National 
Hispanic Finance Committee — are so onerous, that had I not been 
asked by the Senate committee to testify, I would have demanded the 
opportunity to address this committee. 

For reasons known only to himself, Mr. Priestes has completely mis- 
stated the facts. For example — 

1. He testified that I called him at his home and introduced myself 
as a fundraiser on behalf of the President. This statement is totally 
false — his associates asked me for an appointment to accept his 
contribution. 

2. He testified that prior to our meeting I was fully aware of his 
problems with HUD and FHA. This statement is totally false. I did 
not even know he had problems until I met him. At that time he told 
me that he was a victim of a bad press. To this day I know nothing of 
the nature or extent of his problems. 

3. He testified that I asked him for a $100,000 campaign donation. 
This statement is totally false. I never asked him for a dime. He told 
me that he was going to make a contribution of $25,000. 

4. He testified that in exchange for a $100,000 donation I would 
guarantee to solve his problems with HUD and FHA. This statement 
is totally false. He was never promised any favors, directly or indi- 
rectly, in exchange for his donation. 

5. He testified that I asked him for three checks : The first one being 
in the amount of $25,000. This statement is totally false. He volun- 
teered to make a $25,000 donation which would be paid by one check. 

6. He testified that on March 12, 1972, he met me and two other men 
in my room at the Hay-Adams Hotel, Washington, D.C. This state- 
ment is true. 

He testified that he complained that I.T. & T., with a $200,000 dona- 
tion, had managed to solve some of its Government problems, that he 
was just a little guy and therefore he was going to reduce his donation 
to $50,000. This statement is totally false. At no time was there ever 
a discussion with Mr. Priestes about I.T. &T.'s problems, nor was 
there a discussion at the hotel or elsewhere about a reduction in his 
donation because of I.T. & T.'s donation. 

7. He testified on numerous occasions that he was asked to make 
his donation in cash. This statement is totally false. At no time was 
Mr. Priestes, to my knowledge, ever asked to make a cash donation. 

8. He testified that at the meeting in Mr. Stans' office he asked Mr. 
Stans to pick up a telephone and call Secretary Romney about his 
troubles with HUD. This statement is totally false. I was present dur- 
ing the meeting, and at no time did he ask Secretary Stans to call 
anyone. 

24-650 O - 74 - 7 



5362 

Gentlemen, it is my unshakable belief that the American system of 
fair play will prevail, not only in politics but in our day-to-day expe- 
riences. Defending myself as I have done today might deter some peo- 
ple from participating in the political process. I am not deterred. I am 
more convinced than ever that I must continue to work with the 
Spanish-speaking people, that this must be a lifetime commitment on 
my part. 

I will continue to give of my time and energy, in the full belief 
that our people will continue to move upward in our society, partic- 
ipating fully in every aspect of our society. 

Thank you. 

Mr. DoRSEN. Thank you, Mr. Fernandez. 

Before we turn to the testimony of Mr. Priestes, I would like to ask 
you some questions concerning your background and the background 
of the formation of the National Hispanic Finance Committee. 

Could you first tell us how the committee came to be formed? 

Mr. Fernandez. Yes, sir. 

I conceived the idea of a national unity effort on the part of the 
Spanish-speaking people with respect to the Presidential campaign. I 
had just recently completed a tour of service wherein I worked with 
the Spanish-speaking people in the field of economic development, and 
it was that experience that proved to me that the Spanish-speaking 
people, of which the three major groups are the Mexican American, 
the Puerto Rican, and the Cuban American, could indeed work to- 
gether on a unified basis. I conceived the idea of developing a national 
organization which would participate in the Presidential campaign, 
collecting funds from all over the United States, with the idea of sup- 
porting a President who had done so much on our behalf. 

I presented my idea to Secretary Stans, who was still Secretary of 
Commerce at the time, inasmuch as I knew that he was soon to become 
the finance chairman of the Finance Committee To Re-Elect the Presi- 
dent. Mr. Stans thought it was a good idea and asked me to put it in 
writing and to submit it to Hugh Sloan, who then was chairman of 
the Finance Committee To Re-Elect the President. I prepared a com- 
plete report outlining the objectives, the management principles, the 
methodology, goals, the merchandising techniques, a management 
team — things of that sort. That report was submitted not only to 
Mr. Sloan but to Mr. Odell, at the Republican National Committee, 
the President, the Vice President, anyone that I thought might be in 
a position to help us in getting approval of this effort, something that 
had never been done before by the Spanish-speaking people. 

On February 15, Secretary Stans became chairman of the Finance 
Committee To Re-Elect the iPresident. On February 24th, he issued a 
letter authorizing the organization of the National Hispanic Finance 
Committee. 

Mr. DoRSEN. Now, Mr. Fernandez, what was the goal of the Na- 
tional Hispanic Finance Committee ? 

Mr. Fernandez. We set a goal of $1 million for the first time out. 
However, when it was discussed with Secretary Stans, he smiled and 
said, "Mr. Fernandez, if you can get a million dollars from the 
Spanish-speaking people, having started at a point less than zero, 
that will be a miracle. If you can break out — your committee can break 
out even, we will be pleased and delighted because it will not have cost 



5363 

the campaign 5 cents to have this major national effort. If you can 
show a profit, we will be thrilled, because this would be an unbelieva- 
ble accomplishment." 

At no time did we believe that we would actually hit the $1 million 
goal. But we certainly tried. 

Mr. DoRSEN. I gather you tried to come as close to $1 million as 
possible, is that correct ? 
Mr. Fernandez. Yes. 

Mr. DoRSEN. Now, with respect to your own personal situation, I 
gather you served without any compensation, is that correct? 

Mr. Fernandez. Yes, sir. I took off approximately 9 to 10 months 
from my own business and worked as a full-time national chairman 
of the National Hispanic Finance Committee with no compensation 
whatsoever. I was a full-time volunteer. 

Mr. DoRSEN, I gather, however, that you were interested perhaps in 
some Government service should President Nixon be reelected. Is 
that correct ? 

Mr. Fernandez. Yes, sir, that had occurred to me. 
Mr. DoRSEN. What kind of position were you interested in? 
Mr. Fernandez. A Cabinet post or under-secretaryship. 
Mr. DoRSEN. Am I correct that when people asked you why you 
ware doing this, in addition to stressing the goal of the Spanish- 
American people and what President Nixon did for them, you would 
at times get around to talking about what your personal role might 
be in the future administration, is that correct ? 

Mr. Fernandez. No, not really. I was not looking for a job. I took 
on the assignment with no promises of appointment whatsoever by 
Secretary Stans or anyone in the administration. Inevitably, the con- 
A^ersation would lead to my own future, but it was brought about by 
people who saw me in action during this campaign, who saw me on 
television, who heard me on radio, who read about me in newspapers, 
and speculation ran wild throughout the country among Spanish- 
speaking people that perhaps I would be the first Spanish-speaking 
member of a Presidential Cabinet. 

Mr. Dorsen. So, you were hoping that you would be the person to 
benefit from the recognition that the campaign effort might produce, 
is that right ? 

Mr. Fernandez. No, that is not accurate at all, sir. I was hoping 

that if the President in his wisdom saw fit to appoint someone like 

myself to a Cabinet post, I would be pleased and delighted. But if it 

were someone else, I would still be pleased and delighted. 

Mr. Dorsen. Your background is as an economist, is that correct? 

Mr. Fernandez. Yes, sir. 

Mr. Dorsen. Is one of the positions you thought you might be 
qualified for, that of Secretary of Commerce ? 
Mr. Fernandez. Yes, sir. 

Mr. Dorsen. And do you believe you might have mentioned this to 
Mr, Priestes? 

Mr. Fernandez. I don't recall ever mentioning anything of that 
particular effect to Mr. Priestes. 
Mr. Dorsen. But is it quite possible that you did mention it? 
Mr. Fernandez. It is possible. 



5364 

Mr. DoRSEN. How were the funds soug'ht to be raised in connection 
with the eflFort to get $1 million ? 

Mr. FernajJdez. Initially, we went to the direct contribution route, 
asking members of our executive committee, for example, to make a 
$1,000 donation. We also had a national advisory council. Each of 
the States in which we worked, in which we had committees, had an 
advisory staff. They were asked to make direct contributions, but the 
direct contribution route ended very swiftly because that is a very 
tou<rh proposition, and our people, the Spanish-speakino; people, don't 
have a track record of making donations, and it was — we had a lot of 
pioneerinfj work that had to be done. 

Mr. DoRSEN. Am I correct that you solicited campaign contributions 
for the National Hispanic Finance Committee from individuals other 
than Spanish-speaking persons ? 

Mr. Ferivtandez. Yes, on occasion. I have a lot of non-Spanish-speak- 
ing friends, for example, and I would have no reluctance whatsoever to 
ask them to make a donation to the National Hispanic Finance Com- 
mittee. A lot of people who identify with the problems, Spanish- 
speaking people, and were interested in seeing to it that we came as 
close to our goals as possible. 

Mr. DoRSEN. Am I correct that the goal would be measured by de- 
posits or contributions to the National Hispanic Finance Committee? 
Is that correct ? 

Mr. Fernandez. Yes, sir. 

Mr. DoRSEN. And that payments oi' contributions or checks made out 
to some other organization w^ould not count toward your goal ? 

Mr. Fernandez. No. That is not accurate. For example, if a check 
were made, a donation were made out to one of the many committees 
authorized by the Finance Committee to Re-Elect, those funds would 
be credited to our committee. 

Mr. DoRSEN. You were stressing your role, of course, as chairman of 
the National Hispanic Finance Committee ; is that correct ? 

Mr. Fernandez. In regard to wliat ? "\^nien you say I was stressing 
my role. 

Mr. DoRSEN. With respect to solicitation of campaign contributions. 

Mr. Fernandez. Not really. I was the national chairman. Mv name 
appeared on the letterhead, which spoke for itself. My job primarily 
was to organize a national effort. My job primarily was to identify 
Spanish-speaking leadership throughout the TTnited States. Then once 
having done that, recruit them to our program. Then motivate them, 
and give them an outline as to how they should organize their States. 
Then my job was to submit different financial programs to each of 
the State chai?'men. On numerous occasions I was the keynote speaker, 
both in Spanish and in English, in different States throughout the 
country. But — and I would be introduced as the national chairman of 
the National Hispanic Finance Committee for the Re-Election of the 
President. 

Mr. Dorsen. I gather because 

Mr. Jacomini. May we have a moment ? 

Mr. Fernandez. Sir, if I can just add to my last answer, the tenor 
of the questions and answers right now pertain to monetary goals. 
Now, this was a means to an end, achievement of donations on behalf 



5365 

of tlie President. I had two major motivating factors in getting in- 
volved and it certainly was not an appointment for Ben Fernandez. 
First, I was primarily concerned in terms of bringing the Spanish- 
speaking people into the two-party system of our Government. Some 
85 or 90 percent of the Spanish-speaking people in this country are 
registered Democrats and in my judgment this is to the disadvantage 
of the Spanish-speaking people. And it was my hope and expectation 
that as a result of my efforts with the National Hispanic Finance Com- 
mittee we could swing many of the Spanish-speaking people into the 
Republican Party. 

Second, I was truly motivated and turned on by the efforts made on 
behalf of the Spanish-speaking people by the President of the United 
States. His track record on our behalf is unbelievable. And it was my 
hope and expectation that Spanish-speaking people throughout the 
United States would agree with me and work with me toward his 
reelection. 

Mr. DoRSEN. Mr. Fernandez, were you, during 1972, familiar with 
some of the matters that came out yesterday during Mr. Marumoto's 
testimony concerning the effects of the executive branch of the Gov- 
ernment to give contracts to Spanish-speaking companies favorable to 
the administration, and deprive companies that were unfavorable to 
the administration in terms of these contracts ? 

INIr. Fernandez. No, sir. 

Mr. DoRSEN. So that was not knoAvn to you when you made your 
decision ? 

Mr. Fernandez. That is correct. I knew that nationally there was a 
major effort on the part of the administration to award contracts to 
Spanish-speaking businessmen. This was part of the 8(a) program 
which is administered by the Small Business Administration which 
makes provisions for the awarding of contracts to minority entrepre- 
neurs. This is a program that had been in operation for some 3 years. 
I was fully aware of that aspect of the administration's efforts to award 
contracts, but I was not aware of any program, official or unofficial, on 
the part of the administration to use this program as a political tool. 

INIr. DoRSEN. You mentioned a minute ago the question of various 
State committees. How many State committees were there ? 

Mr, Fernandez. Let's see. We had a committee in California, Colo- 
rado, Arizona, Texas, Illinois, New York, and Florida. 

Mr. Dorsen. And in your own mind, did you have a particular Stati^. 
that you thought would be most successful ? 

Mr. Fernandez. Yes, sir. 

Mr. Dorsen. And what was that ? 

Mr. Fernandez. Florida. 

Mr. Dorsen. And is that the State that you chose to initiate your 
f undraising efforts ? 

Mr. Fernandez. Yes, sir; we needed a model to show the Spanish- 
speaking people throughout the United States as to what could be 
done by management, careful organization, solid management tech- 
niques. "We selected Florida as the target State for several reasons. 

First of all, the State of Florida has a heavy Spanish-speaking pop- 
ulation, of which the most are Cuban Americans. 

Second, the Cuban Americans are very sensitive to the political 
process because so many of them did not participate in the political 



5366 

process in Cuba and it resulted, of course, in a situation where they 
were deprived of everything that they owned. They came to the 
United States pledging that they would never again permit themselves 
to be used in such a way that they could not participate in the political 
system. 

Furthermore, they were very — as a whole they are very staunch 
Republicans. Consequently, it was my reasoning that they would be 
more responsive to the program which I have outlined to this com- 
mittee today, and as it turned out, my thesis was verified by the splen- 
did action of the Culian Americans in Florida. 

Mr. DoRSEN. Let me turn to the time when you first heard the name 
John Priestes. How did that come about? 

Mr. Fernandez. Soon after I held a press con,ference in Miami, in 
Spanish, to announce the organization of the National Hispanic Fi- 
nance Committee, one of the members of the organization in Florida 
held a cocktail pai-ty at his home. There must have been 100 to 150 
Cuban Americans, primarily Cuban Americans, at that cocktail party. 
I was invited to be the keynote speaker, to address the group. T did. 
During the course of the evening, of course, I tried to meet every per- 
son in the room. I met some Cuban-American businessmen who indi- 
cated to me that they knew of a dynamic, aggressive, younc: multi- 
millionaire who wanted to make a donation to the Presidential cam- 
paign of some $50,000. Naturally I was pleased and delighted to learn 
of this situation. 

I was asked whether I could meet with him in my hotel and T in- 
formed the Cuban Americans that I would be delighted to do so. I met 
Mr. Priestes the next day in my hotel. 

Mr. DoRSEN. How was the meeting actually set up ? 

Mr. Fernandez. One of his associates called me and asked me to 
set up the meeting at a given time. I agreed to the meeting and Mr. 
Priestes came to the hotel and came to my room and proceeded from 
that point on. 

Mr. DoRSEN. Do you know the name of the associate that set up the 
meeting ? 

Mr. Fernandez. No, sir ; I do not. 

Mr. DoRSEN. Do you recall being inten'iewed on October 19 by mem- 
bers of the staff of the committee ? 

Mr. Fernandez. Yes, sir. 

Mr. DoRSEN. And do vou recall at that time stating that you believed 
that the associate was Mr. Carlos Nunez ? 

Mr. Fernandez. Yes, sir, I do, but it is sheer speculation. As I stated 
at that time also, I identify Mr. Nunez with Mr. Priestes because they 
have some sort of a business relationship and I recall discussing Mr. 
Priestes with Mr. Nunez, but I am not positive that Mr. Nunez was the 
man that set up the meeting. 

Mr. DoRSEN. Do you know that members of the staff of this commit- 
tee have interviewed Mr. Nunez in Florida ? 

Mr. Fernandez. No ; I do not. 

Mr. DoRSEN. And do you know what he told members of the staff? 

Mr. Fernandez. No, sir ; I do not. 

Mr. DoRSEN. So, are you stating that whatever he told the staff is un- 
known to you and would not form any basis of your present recollec- 
tion that it might not have been Mr. Nunez ? 



5367 

Mr. Fernandez. That is correct. 

Mr. DoRSEN. What happened at the meeting with Mr. Priestes ? 

Mr. Fernandez. Mr. Priestes came in and sat down by the desk and 
told me that he was prepared to make a donation to the President's 
campaign effort. I told him I was pleased and delighted to meet him 
and that I — I told him that I had been informed that he was going to 
make a $50,000 donation. He said that is incorrect. It is my intent to 
make a $25,000 donation which is still a considerable amount of money, 
and I agreed, and I was pleased and delighted that he was going to 
make a donation of that amount. 

I asked him if he had brought his check, donation. He said he had 
not but that he would give it to me at a ball which was to be held in 
one of the hotels in Miami. I agreed that I would meet him there and 
he would make his donation at that time. 

Then he said, "Now, Mr. Fernandez, I have a problem that I want 
to discuss with you." I said, "Certainly." Anyone that makes a $25,000 
donation, I will be happy to listen to him all day long. He sat down 
and told me that he was a victim of a bad press, that the Miami Herald 
was harassing him ; that he was a contractor that had been involved 
in the construction of low-cost housing and that his company, because 
of his ability, had been able to garner some 85 percent, 80 percent of 
the total contracts being awarded by HUD in his area; and that as 
a consequence, the local newspaper was carrying on a program against 
him almost on a daily basis. He had with him, as evidence of this 
harassment, a stack of newspaper articles showing the headlines, show- 
ing photographs of his housing tracts and what have you. He handed 
me items and I just thumbed through them because I did not have 
time to go through a massive file of newspaper clippings, and he said 
that he was sure that he was being investigated at the time. He told me 
that his main concern was that I give him assurances that he would 
have a fair investigation, a fair hearing, because he was concerned 
about the outcome of the investigation as a result of a newspaper 
harassment. 

I told him, "No. 1, I cannot give you any assurance of that kind, 
but No. 2, Mr. Priestes, have you done anything illegal or immoral 
with respect to your business activities ?" He told me, "Absolutely not." 
I then told him, then you have nothing to worry about. He says, "Well, 
I am worried. This is my bread and butter, my livelihood." I then told 
him, "The only thing I can do, Mr. Priestes, I can call Secretary Stans 
and arrange for you to repeat your story to him. I cannot do anything 
for you." He leaped at the opportunity and said that he would be 
pleased if something like that could be arranged. 

About at that point the conversation ended and that was the last 
time I saw him for a few days. 

Mr. DoRSEN. With respect to that meeting, Mr. Fernandez, is it your 
testimony that the first time you were aware of any problem on the 
part of Mr. Priestes was when he told you about it following the dis- 
cussion of the $25,000 contribution ? 

Mr. Fernandez. Yes, sir. 

Mr, DoRSEN. And if Mr. Nunez recalled, that at the party where you 
and he discussed Mr. Priestes, he told you that Mr. Priestes may not be 
willing to make a contribution because of his problems, would you say 
that that was incorrect? 



5368 

Mr. Fernaistdez. Yes ; I would say that that is incorrect. 

Mr. DoRSEN. So you would be prepared to stand by your testimony 
even if Mr. Nunez' recollection was that he told you Mr. Priestes was 
having problems and, therefore, might not be willing to make a con- 
tribution at this time ? 

Mr. Fernandez. That is correct, because no such conversation took 
place between Mr. Nunez and myself. 

One thing that I would like to stress to this committee — this was the 
first cocktail party on behalf of the President by the National His- 
panic Finance Committee. As I testified a few minutes ago, there were 
between 100 and 150 people there and I do not think I knew more 
than three or four in that entire room. So being the national chairman 
of the National Hispanic Finance Committee, I was being pulled on 
and tugged on by every person in that room. I was being introduced 
to every person in that room, I gave the keynote speech that night. 

I do not recall making any, having any discussion regarding dona- 
tions to the President along the lines that have been suggested by your 
question. 

Mr. DoRSEN. But now, you are saying it is possible because you were 
in effect the guest of honor and might have heard it ? 

Mr. Fernandez. No, it is not possible. That discussion with Mr. 
Nunez never took place. 

Mr. DoRSEN. Mr. Fernandez, when for the first time did you hear 
a particular sum of money mentioned as a contribution or anticipated 
contribution of Mr. Priestes ? 

Mr. Fernandez. The Cuban Americans who arranged for the meet- 
ing between Mr. Priestes and I are the individuals who mentioned that 
he was prepared to make a donation of $50,000. At no time, in any of 
my conversations with Mr. Priestes, was a figure of $100,000 ever 
mentioned, which I keep seeing in the record and some of the state- 
ments which have been made by Mr. Priestes. 

Mr. Dorsen. So is it your testimony, then, that you never on any 
occasion even alluded to the figure of $100,000 with Mr. Priestes and 
that Priestes never, in any conversation with you, alluded to the figure 
of $100,000 to you? 

Mr. Fernandez. That is correct, sir. 

Mr. Dorsen. And is it also fair to say — well, let me ask the question, 
if I may. Did you ever tell anybody that you thought Mr. Priestes 
would, or might, give $100,000 to the Republican effort? 

Mr. Fernandez. No, sir. 

Mr. Dorsen. And in your conversations with anybody — whether INIr. 
Stans, Mr. Sloan, your associates, other people — did you tell any of 
them that Mr. Priestes might give a contribution of $100,000 ? 

Mr. Fernandez. No, sir, the only time the figure of $100,000 ever 
developed throughout the campaign was from several Cuban Ameri- 
cans in the Miami area at the beginning of the campaign who were so 
committed about what we were doing, who were so committed about 
participating in the Presidential campaign, actually pledged that they 
would raise $100,000. The fact that they did not raise 5 cents was 
beside the point. They were very committed and enthusiastic about it. 
Indeed, one of the fellows that pledged $100,000 is an M.T). who is a 
member, who was a member of the Florida Advisory Council of the 



5369 

National Hispanic Finance Committee. But that is the only time the 
figure of $100,000 ever came up. 

Mr. DoRSEN. Did you ever repeat the possibility that Mr. Priestes 
might give $100,000 to anybody ? That is really what I am focusing on. 

Mr. Fernandez. No, sir, that situation never occurred at any time 
during the course of this campaign with respect to Mr. Priestes. 

Mr. DoRSEN. Did Mr. Priestes at that meeting tell you why he wanted 
to give $25,000 or any other sum to the President's campaign ? 

Mr. Fernandez. Yes, I have already testified; not in conjunction 
with the effort, because I kept a line of demarcation between a donation 
and the conversation I held with Mr, Priestes. There was no quid pro 
(juo involved with respect to any donation, any time, anywhere, dur- 
ing the 1972 campaign. He did — after the discussion of his donation — 
he did discuss with me the fact that he had this problem with the 
Miami Herald. 

Mr. DoRSEN. Well, here's a man, as you learned after those meetings, 
that was having a problem with the Federal Government, is that- 
correct ? 

Mr. Fernandez. No, he told me he was a victim of the press. To this 
day, I don't know that he had problems with the Government. My total 
conversation with him was the harassment that he claimed he was get- 
ting from the Miami Herald. That was the tenor of our discussion. 

Mr. Dorsen. But you knew the problems were serious enough so 
that a hearing of some sort, or some proceeding was anticipated, is 
that correct? 

Mr. Fernandez. All I know is what he told me. 

Mr. Dorsen. Did he tell you that some sort of hearing was antici- 
pated that could cause him some problems ? 

Mr. Fernandez. Yes, he did. 

Mr. Dorsen. Did he indicate to you why he was interested in giving 
$25,000 in the midst of all this trouble ? 

Mr. Fernandez. No, sir, he did not. 

Mr. Dorsen. Do you know why a person under that sort of pressure 
was willing to make a donation of $2.5,000 ? 

Mr. Fernandez. No, sir, I would not care to speculate as to what his 
motives were. 

Mr. Dorsen. Do you know why you were chosen as the vehicle for 
him to make a $25,000 contribution ? 

Mr. Fernandez. Yes; I assumed that I was the man involved be- 
cause I was head of the Spanish-speaking financial effort and the per- 
son that introduced me to Mr. Priestes was a Hispano, like myself, 
and it was only normal and natural that he should come to me with 
his offer to make a donation. 

Mr. Dorsen. But Mr. Priestes is not Spanish-speaking, is that cor- 
rect? 

Mr. Fernandez. That is correct. However, some of his associates 
are. 

Mr. Dorsen. But this was Mr. Priestes' contribution we are talking 
about ? 

Mr Fernandez. Yes, sir. 

Mr. Dorsen. And presumably, if he wanted to have somebody's ear 
to discuss the problems he was having, then he could choose other per- 
sons if he so wished, is that correct ? 



5370 

Mr. Fernandez. Yes, sir. 

Mr. DoRSEN. But he chose you ? 

Mr. Fernandez. Yes, sir. 

Mr. DoRSEN. And in effect you are saying that through his asso- 
ciates he came to you to give a contribution, and completely inde- 
pently, discussed the problem he was having with the Government? 

Mr. Fernandez. That is correct. 

Mr. Dorsen. Do you know whether Mr. Priestes is a Democrat or a 
Republican ? 

Mr. Fernandez. I do not know. 

Mr. DoRSEN. Do you know whether he played any role whatsoever 
in any other political campaign ? 

Mr. Fernandez. I don't know anything about Mr. Priestes other 
than what I am prepared to testify to today. 

Mr. DoRSEN. Did he indicate whether he was at all interested in 
politics? 

Mr. Fernandez. No, sir, I didn't discuss politics with him. 

Mr. Dorsen. Did he indicate why it was Mr. Nixon to whom he 
wanted to contribute ? 

Mr. Fernandez. No. 

Mr. Dorsen. Do you have any explanation why he would give 
$25,000? 

Mr. Fernandez. No ; and to be frank with you, I really didn't care. 
If the man wanted to make a $25,000 donation to the Presidential 
campaign, I was pleased and delighted to meet him. I would have 
been pleased and delighted to have accepted his donation. 

Mr. Dorsen. Did he indicate whether he expected to have any dif- 
ficulty in raising the $25,000 ? 

Mr. Fernandez. He might have, but I don't recall. It is possible. 

Mr. Dorsen. Didn't this sound strange, that a person in the midst 
of trouble would want to make a $25,000 contribution for no appar- 
ent reason and indicate at the same time that he was having difficulty 
raising the money? 

Mr. Fernandez. I didn't find it strange. It has been my experience 
in economics and finance that people with a heavy net worth generally 
have a cash-short situation. They generally invest in land, stocks ; they 
have a stock portfolio, and some people witli net worth in excess of 
eight figures have difficulty in scraping up $5,000. That didn't strike 
me as strange or peculiar. 

Mr. Dorsen. But even with respect to a person who is in serious or 
apparently in serious difficulty at the time? 

Mr. Fernandez. I didn't go into his background or the seriousness 
of his background or his problems, other than what he discussed with 
me with respect to the press. 

Mr. Dorsen. I gather you were happy that he was coming to you 
with the $25,000, though. 

Mr. Fernandez. I was delighted because it would have really built 
up our track record. 

Mr. Dorsen. And were you encouraging him to make this contribu- 
tion? 

Mr. Fernandez. Yes, sir. I did everything I could to please him — 
offered him coffee and listened to his story of woe, and I was busy. 
I was running around this country like a chicken with his head cut off. 



5371 

Last year I traveled over 250,000 miles on behalf of the Presidential 
campaign. I worked an average of 80 hours a week and I still sat — 
felt that I could sit down and listen to a $25,000 donor any time, any- 
where. 

Mr. DoRSEN. In fact, $25,000 was larger than any sum contributed — 
you solicited, is that correct? 

Mr. Fernandez. I did not solicit $25,000 from him. That is the 
largest possible donation that we would have received. 

Mr. DoRSEN. Did you indicate to him that you had heard he wanted 
to give $50,000? 

Mr. Fernandez. Yes, sir, I did. 

Mr. DoRSEN. And what did he say about that? 

Mr. Fernandez He said no, that is wrong, it is $25,000, to which 
I still smiled from ear to ear because that is a lot of money. 

Mr. DoRSEN. Mr. Chairman, with your permission I would like to 
offer the affidavit of Carlos Nunez. I provided copies to the Senators 
and to counsel. Could I show 

Senator Baker. The affidavit of Mr. Nunez has been supplied and 
it will be received for identification. If there is no objection it will 
be received as an exhibit and made a part of the record. 

[The affidavit referred to was marked exhibit No. 266.*] 

Mr. DoRSEN. If there is no objection, Mr. Chairman, I would like 
to read the affidavit. It is one page. 

Senator Baker. The exhibit has been received in evidence, I believe. 
Counsel may proceed to read it. 

Mr. DoRSEN. Thank you. [Reading :] 

AflBdavit to the Senate Select Committee on Presidential Campaign Activities. 

State of Florida, Dade County. 

Carlos Nunez, being duly sworn, deposes and says : 

1. I am presently employed and have been employed for many years as a 
builder. 

2. In early 1972, around February, I was invited by Mr. Julian Vinas to attend 
a cocktail party at his home in Coral Gables to raise money for the re-election 
of the President through the Hispanic Finance Committee. At this party I was 
introduced to Mr. Benjamin Fernandez, chairman of Hispanic Finance Commit- 
tee, by the host, Mr. Julian Vinas. I talked to Mr. Fernandez about my association 
in the past with Mr. Priestes in a general way. At the time Mr. Priestes was 
making headlines about his problems with FHA. 

I was asked, besides my contribution, if I knew any persons who could make 
contributions. Obviously Mr. Priestes' name came up. I said with all the problems 
at that time I didn't know if he would be in the position to make any contribution. 

A few days later I found that there had been contact between Mr. Fernandez 
and Mr. Priestes, and I was told by Mr. Priestes that he made a contribution and 
that Mr. Woolin loaned him the money. 

I did see INIr. Fernandez a couple of times after the party but never discussed 
Mr. Priestes' contribution or any related matter with him. 

Furthermore, I was never told by IMr. P^ernandez that he could help Mr. 
Priestes or by Mr. Priestes that he could get help from Mr. Fernandez. 

It is signed by Carlos Nunez and notarized. 

Mr. Fernandez, what was the next event in the — excuse me. Do you 
want to add anything to what you said concerning the conversation 
you had with Mr. Nunez ? 

Mr. Fernandezv No. 

Mr. DoRSEN. What was the next event in your dealings with Mr. 
Priestes ? 

*Seep. 5736. 



5372 

Mr. Fernandez. A few days later — I am not certain of the time. I 
thought it was either that day or within the next week — I met Mr. 
Priestes at a charity ball held in Dade Coimty, Fla. It wns at this time 
that he vrns to bring a $25,000 check which represented his donation 
to the National Hispanic Finance Committee. T was a <xnest of Mr. 
Manolo Cnsanova who was the Stnte chairman in Florida of the 
National Hispanic Finance Committee. We were sittinjr in the 
audience when a waiter or waitress came to me and asked me to go to 
the front door, that a Mr. Priestes was there. 

I went to the front of the door— not the front door but the entrance 
to the banquet and I met Mr. Priestes. He was accompanied by a younj^ 
lady and he was supposed to make delivery of his donation at that 
time. So when — after I saluted him, greeted him warmly, I asked him 
whether he had brought his donation with him as he had promised. He 
said, no, he had not. However, that he would bring it with him when 
we went to Washington, D.C, to visit with Secretary Stans. 

Again, he was a $2.5,000 potential donor and whatever he wanted Avas 
my wish. Whatever I can do to please you will be fine. No problem 
whatsoever, Mr. Priestes. And I said some pleasantries and excused 
myself and Avent back to my table. 

Mr. DoRSEN. ]Mr. Priestes was indicating that he just wanted to meet 
with Mr. Stans? 

Mr. Fernandez. Yes, sir. He wanted to repeat to Secretary Stans the 
same story which he had given to me. 

Mr. DoRSEN. And what did INIr. Priestes indicate was the reason why 
he wanted to repeat this story to Mr. Stans ? 

Mr. Fernandez. The same reason he gave me. That he wanted assur- 
ances that he would be treated fairly in the course of his investigation, 
in the course of his hearing, that he would not be crucified as a result 
of the bad press which he was receiving in Miami, Fla. 

Mr. DoRSEN. Was he concerned particularly about the bad press in 
the abstract or was he concerned about the effects of the bad press on 
his hearing ? 

Mr. Fernandez. Who knows? I don't know what his main area of 
concern was. All I can repeat to you is what he told me. 

Ml". DoRSEN. Hut he tried to get assurances, at the very least, or you 
say he told you, that he would get a fair hearing despite an unfavor- 
able pi'css; is that right? 

Mr. Fernandez. Yes, sir. 

Mv. DoRSEN. And how would you accomplish that if you were trying 
to accomplish that ? 

Mr. Fernandez. I haven't the slightest idea. That is beyond my 
province and I told him so. "I can't give you that kind of an assurance. 
All I can do is to bring it to the attention of my superiors and let them 
discuss it with you. I don't know what can be done, if anything." 

And I might add something else, sir. Had Mr. Priestes come to me 
and said, "Mr. Fernandez, I need your help. I am in trouble with HUD" 
or FHA or the press or wliat have you, I would have listened to Mr. 
Priestes, whether he had given a $1 donation or none. I have a track 
record of volunteerism in this country that is unbeatable. In the last 4 
years I have served as a volunteer, 2 of the last 4 years, without com- 
pensation from anyone. I like to think of myself as a kind, compas- 
sionate man who reaches out to help the people that are asking for as- 



5373 

sistance and help, whenever possible, and I will continue to work in the 
field of volunteerism. 

So as far as Mr. Priestes is concerned, he could have come to me di- 
rectly and asked me for my help and if it were within my province to 
give him that help, he would have received it. 

Mr. DoRSEN. But I gather you do not consider Secretary Stans in 
quite the same category as you with respect to generosity of his time. 

Mr. Fernandez. That is absolutely not true. I have known Secretary 
Stans for some 5 years and I consider him one of the kindest, most 
compassionate men I have ever met in my life. What he has done with 
respect to the minority communities as Secretary of Commerce — 
namely, the organization of the Office of Minority Business Enter- 
prise, with all of its components, from the standpoint of bringing us 
into the free enterprise system — is one of the most remarkable stories in 
America that one day Avill be told in depth. I love that guy. I think 
he is one of the finest Americans I have ever known. 

Mr. DoRSEN. How many people did you bring in to Mr. Stans who 
were potential contributors during the campaign ? 

Mr. Fernandez. I think Mr. Priestes was the only one, although I 
did, on occasion, bring members of the National Hispanic Finance 
Committee, who were all donors — and some of them pretty heavy do- 
nors — in to meet ]\Ir. Stans and be photographed with him, get the full 
treatment. We liked it. 

Mr. Dorsen. Who were some of those individuals ? 

Mr. Fernandez. Mr. Casanova, Fernando Oaxaca, and Mr. Fred 
Berens. 

Mr. Dorsen. Reyes ? 

Mr. Fernandez. No. You are referring to Mr. Joe Reyes. 

Mr. Dorsen. Yes, sir. 

Mr. Fernandez. No. I never took him in to visit with Secretary 
Stans. And I can't think of anyone else. 

]Mr. Dorsen. Am I correct then, that Mr. Priestes is the only contrib- 
utor that you saw fit to introduce to Mr. Stans? Is that right, sir? 

Mr. Fernandez. Yes, sir. 

Mr. Dorsen. And how many individuals who had problems, who 
were not contributors, did you introduce to Mr. Stans ? 

Mr. Fernandez. Would you repeat that question ? 

Mr. Dorsen. Yes. 

You said in effect that Mr. Stans was as generous with his time, as 
you were Avith yours. If a person who had a problem wanted to come 
to you about a problem, you would listen, and I am asking whether you 
ever brought any other individual to Mr. Stans who was not a con- 
tributor so that he could listen to this individual's problems? 

Mr. Fernandez. I never brought any other individuals to Mr. Stans 
who had problems and he, like myself, was fantastically busy last year. 
I was grateful that he could give us even the few moments which he 
did give to members of my committee. 

Mr. Dorsen. Well, let's move ahead to the time that Mr. Priestes 
met you in Washington, D.C. 

Mr. Fernandez. Yes, sir. 

Mr. Dorsen. When was that ? 

Mr. Fernandez. I believe that was March 12, 1972. I was registered 
at the Hay-Adams Hotel, Washington, D.C. This was the night before 



5374 

Mie meeting with Secretary Stans. I was in my room having a drink 
with a couple of members of our committee when the phone rang. Mr. 
Priestes was in the lobby and asked to come up to discuss with me the 
place of meeting. I invited him to come up and have a drink with us. 
He came to our — to my room and I gave him the address of the Fi- 
nance Committee To Re-Elect the President, told him the time that I 
expected him there, and offered him a drink which he declined. He 
said he had just arrived and he was tired and he left. 

The two men who were in the room with me were Fernando Oaxaca, 
the treasurer of the National Hispanic Finance Committee for the Re- 
Election of the President and also a member of the executive commit- 
tee. The other man was Manolo Casanova, the State chairman in the 
State of Florida of the National Hispanic Finance Committee. There 
were no discussions in that room with respect to Mr. Priestes' donation. 
There were no discussions with him with respect to the I.T. & T. matter 
to which he testified yesterday. None whatsoever. 

Mr. DoRSEN. Am I correct, though, that that was just about the time 
that the ITT was in the newspapers ? 

Mr. Fernandez. I don't know whether it was or not. 

Mr. DoRSEN. Well, were you following the fortunes of the Republi- 
can campaign effort at that time ? 

Mr. Fernandez. I sure was. 

Mr. DoRSEN. And when you learned of the ITT allegations I gather 
you were upset, is that correct ? 

Mr. Fernandez. Yes, like everyone else. 

Mr. Dorsen. And was this a subject you were discussing among your 
friends, particularly friends who were working with you on the cam- 
paign ? 

Mr. Fernandez. No, not particularly, but as an individual, I 
would be concerned with matters of that type. When we got — when two 
or three Spanish-speaking fellows got together we were concerned al- 
most exclusively with our own organization, with our own efforts, as 
I have testified today ; and matters like the ITT case and Dita Beard, 
and others, just did not occupy any, very little if any, of our time. 

Now, Mr. Casanova indicated to me that when he was interview^ed 
by your investigators, he told them that there had been no discussion 
whatsoever, of the I.T. & T. case and that your investigators took notes 
to that effect. The reason I am mentioning that, sir, is that I was 
shocked about this kind of testimony, which I heard yesterday for 
the very first time, and it was a surprise which did not appeal to me 
at all because I had no time to prepare or rebut or to get ready to de- 
'^nd myself against that kind of an allegation. 

Mr. DoRSEN. Yesterday was the first time you had any word that 
i,nis allegation was made? 

Mr. Fernandez. Yes, sir. 

Mr. Dorse N. No word had come to you ? 

Mr. Fernandez. None whatsoever. 

Mr. DoRSEN. Incidentally, when Mr. Casanova spoke to you and 
told you what he had told us, did he also tell you that he had told the 
investigators that he recalled that the sum of $100,000 was mentioned 
in connection with Mr. Priestes? 

Mr. Fernandez. Yes, he did. 



5375 

Mr. DoRSEN. Does that refresh your recollection as to whether it 
was mentioned ? 

Mr. Fernandez. No, he told me when I discussed this matter with 
him that he had indicated to the interviewers the possibility that a 
$100,000 donation had been discussed and/or the possibility of addi- 
tional donations. But he told me that he was hazy in his recollec- 
tion and that he was not certain of the figures involved. 

Mr. DoRSEN. And he is mistaken with respect to that, is that correct? 

Mr. Fernandez. Well, I have never read his statement, so I do not 
know what he stated to you, of course. 

Mr. Dorsen. No, if he told you that a $100,000 jfigure was mentioned, 
in connection with Mr. Priestes' contribution, he was mistaken, is that 
correct ? 

Mr. Fernandez. Yes, sir, he would be mistaken. 

Mr. Dorsen. But he is right when he told you that ITT was not 
mentioned ? 

Mr. Fernandez. Yes, sir, because Mr. Oaxaca also indicated to me 
that at no time when Mr. Priestes was in that room, or anywhere else, 
anywhere in the country, did we discuss the ITT situation in relation 
to Mr. Priestes and his donation ; and both men have indicated to me 
their desire and interest to testify and verify my statements to you 
today. 

Mr. Dorsen. I think when you found out that, Mr. Oaxaca was in 
the room — yesterday. We found out earlier about Mr. Casanova, and 
we have solicited an affidavit from him just like we have with every 
other participant. We are awaiting that and with the chairman's per- 
mission, we will offer it and make it a part of the record when it 
comes. 

Senator Baker. You are speaking, Mr. Dorsen, of the affidavit of 
Mr, Casanova? 

Mr. Dorsen. This is simply notes of an interview, Mr. Chairman. 
We asked Mr. Casanova if he would provide us with an affidavit. This 
was, I believe, sometime last week. We have not received that affidavit. 

Senator Baker. Last evening? 

Mr. Dorsen. Last week. 

Senator Baker. All right, when the affidavit is produced, of course, 
it can be submitted by counsel and the chairman at that time can pass 
on its admissibility. 

[The affidavit of Mr. Jose Manuel Casanova was subsequently re- 
ceived and is entered as exhibit No. 267.*] 

Mr. Jacomini. I wonder, Mr. Chairman, if we might be privileged 
to have a copy of that summary ? 

Mr. Dorsen. I have no objection. I just have two copies now, but we 
will be happy to show you one. 

Senator Baker. Wliy don't you give the witness a copy now, if we 
have two copies, and we will supply a permanent copy for your files 
later. 

Mr. Jacomini. Thank you. 

Senator Baker. This is not the affidavit, Mr. Dorsen? 

Mr. Dorsen. That is correct. 

♦See p. 5737. 



5376 

Senator Baker. This is a staff summary, and it is not an affidavit. 

Mr. DoRSEN. Did you arrange with Mr. Priestes to see Mr. Stans the 
following morning? 

Mr. Fernandez. Yes, sir. 

Mr. Dorsen. How was that done? 

Mr. Fernandez. I originally contacted Hugh Sloan, who was then 
treasurer of the Finance Committee To Re-Elect the President. I 
explained to him the nature of the meeting which had been requested 
by Mr. Priestes. He felt that there would be no problem in arranging 
for said meeting and said meeting was established. 

The next morning, after the brief meeting in my room, I met Mr. 
Priestes at 1701 Pennsylvania Avenue, Washington, D.C., outside of 
the Secretary's office. 

Mr. DoRSEN. I am sorry to interrupt, but I do want to do this 
chronologically, 

Mr. Fernandez. Fine. 

Mr. Dorsen. What time was the meeting set for? 

Mr. Fernandez. I do not recall. It was in the morning, though. 

Mr. DoRSEN. Could it have been 11 o'clock? 

Mr. Fernandez. It could have been. 

Mr. Dorsen. Do you recall whether the meeting was postponed 
originally from 8 to 11 ? 

Mr. Fernandez. I do not. 

Mr. DoRSEN. But that is possible also? 

Mr. Fernandez. Yes, sir. 

Mr. Dorsen. Could you have communicated with Mr. Stans to set 
up this meeting? 

Mr. Fernandez. I do not recall whether I talked to Secretary Stans 
directly, but I do know that whenever I made appointments to visit 
the Secretary, I went through Hugh Sloan. So I am a little hazy on 
that aspect of it. 

Mr. Dorsen. Was Hugh Sloan, in effect, your liaison with Mr. 
Stans? 

Mr. Fernandez. Yes, sir. 

Mr. Dorsen. And HUD extended dealings with Mr. Sloan? 

Mr. Fernandez. By extended — Mr. Sloan is the very first man I 
talked to in the Finance Committee To Re-Elect when we were orga- 
nizing our committee, and throughout the period of time when Mr. 
Sloan was treasurer of the committee, whenever I was in Washington 
and I had occasion to go to the finance committee, I always tried to 
make it a point to at least say hello to him. 

Mr. Dorsen. I guess you are familiar with Mr. Sloan's role in 
this overall investigation, bringing it to the attention of some of his 
superiors right at the beginning. x\re you familiar with that ? 

Mr. Fernandez. I do not understand your question. 

Mr. Dorsen. The testimony in an earlier phase of this hearing was 
that Mr. Sloan was upset about some of the events that came to his 
knowledge back in late June of 1972 and brought his knowledge to the 
attention of other persons. Is that correct? 

Mr. Fernandez. Yes, sir. I am familiar with that. 
Mr. Dorsen. Are you familiar in general with Mr. Sloan's caliber 
or reputation for truthfulness? 
Mr. Fernandez. Yes, sir. 



5377 

Mr. DoRSEX. Do you agree with that reputation as being an excellent 
one? 

Mr. Fernandez. Yes, sir. 

Mr. DoRSEN. Did you tell any of the persons in Mr. Stans' office any- 
thing about Mr. Priestes' background before the time he came to 
Mr. Stans' office? 

Mr. Fernandez. Other than what I have indicated to you today in 
my testimony, I didn't know anything about Mr. Priestes' background. 

]\fr. DoRSEN. But did you tell anyone that he was coming up, in 
part, to discuss his problems ? 

Mr. Fernandez. No ; I didn't discuss this, his visit, with any mem- 
ber of Secretary Stans' office. I talked to Mr. Sloan and to Mr. Stans. 
These are the only two people I talked to with respect to the Priestes 
affair. 

Mr. DoRSEN. And it is your recollection that you advised neither of 
them about Mr. Priestes' potential problems, is that correct ? 

Mr. Fernandez. No ; that is not correct. I don't recall whether it was 
the Secretary or whether it was Mr. Sloan, but I indicated to them 
exactly what Mr. Priestes had told me in Miami ; to wit, that he was a 
victim of a bad press, that he was being harassed by the Miami Herald, 
and that he wanted assurances from somebody that he would get a fair 
investigation, a fair hearing. Now, that kind of — that information I 
advanced to either Mr. Sloan or Mr. Stans. 

Mr. DoRSEN. And what size contribution did you tell Mr. Sloan or 
the Secretary that Mr. Priestes would bring ? 

Mr. Fernandez. $25,000. 

Mr. Dorsen. Did you ever tell anyone in that office — Mr. Stans, 
Mr. Sloan, their secretaries or staffs — that Mr. Priestes would give a 
contribution of anything larger than $25,000 ? 

Mr. Fernandez. No, sir. 

Mr. DoRSEN. Did you ever mention that he was a $100,000 con- 
tributor ? 

Mr. Fernandez. No, sir. 

Mr. DoRSEN. Please tell us what happened at the meeting in 1701. 

Mr. Fernandez. Yes, sir. 

Mr. Sloan opened the door to admit us and I stepped in ahead of Mr. 
Priestes. I introduced Mr. Priestes to Secretary Stans, and introduced 
him as a potential contributor in the amount of $25,000. We both sat 
down. The Secretary shook hands with him warmly and Mr. Priestes 
handed me a check in the amount of $25,000. It was made out, I be- 
lieve, to the Republican National Committee and signed by a man who 
I have since learned is named Martin Woolin. I didn't notice the sig- 
nature other than the fact that it w^as not Mr. Priestes' signature. 

Mr. Dorsen. And this is the first time you saw that check ? 

Mr. Fernandez. Yes, sir. 

Mr. Dorsen. Please continue. 

Mr. Fernandez. I took the check and handed it to the Secretary 
who thanked Mr. Priestes for his donation and thanked him warmly. 
Then ^Nlr. Priestes told the Secretary that he wanted to discuss with 
him his problems in Miami with respect to the harassment that he was 
receiving by the INIiami Herald. He had with him his folder of news- 
paper clippings to verify to the Secretary the fact that he was being 
subjected to a great deal of criticism and a great deal of pressure al- 



24-650 0-74-8 



5378 

most on a daily basis by the Miami Herald. He handed the folder to the 
Secretary. 

The Secretary thumbed through it, possibly in 10 or 15 seconds, 
no more than that. The entire meeting, I miarht add, only lasted about 
12 minutes. He told the Secretary the same story that he had told me 
in Miami, Fla. At no time did Mr. Priestes nsk the Secretary to pick 
up the telephone and contact Georcre Romney, who was then Secretary 
of HTTD, and discuss with him his particular problems with HUD. 

The Secretary probed as to the difficulties that he was bavins:. The 
man stated that he was involved in minor technical difficulties, that he 
was not a:^iilty of anythina; illegal, and the Secretary turned to him 
and said, young: man — or words to this effect — I don't know anything 
about vou. I don't know what kind of problems you are involved in. but 
I think I had better take a look into your personal backcfround. If we 
find that you are indeed in difficulties of a serious nature, we want 
nothin"- to do with vou and we want you to know this. 

Mr. Priestes said "Fine"; words to the effect that he would welcome 
that kind of a check on his background. 

Mr. Stans handed the check back to me and said, "Ben, do not deposit 
this man's check until vou hear from me," and I told the Secretary that 
I would adhere to his instructions. That was about the end of the 
meetinsf. 

Mr. Priestes excused himself, walked out. 

I talked to the Secretary and he said, "Well, Ben, I will look into this 
and you will be hearing from me soon." 

Abont 10 days later 

Mr. DoRSEN. Excuse me, if I may interrupt. I have a few questions 
about the meeting. 

Mr. Fernandez. Surely. 

Mr. DoRSEN. At any time, was there discussion about Mr. Stans 
making a telephone call to anybody ? 

Mr. Fernandez. No, 

Mr. Dorsen. Did Mr. Stans indicate how he would proceed to check 
into INIr. Priestes' problems ? 

Mr. Fernandez. No, sir. 

Mr. DoRSEN. That just did not happen ? 

Mr. Fernandez. No, sir. 

Mr. DoRSEN. Had you asked Mr. Priestes to bring up his scrapbook 
with him? 

Mr. Fernandez. Yes, sir ; I did. 

Mr. DoRSEN. IVhat Avas the purpose of that ? 

Mr. Fernandez. So he could show the Secretary how he was being 
harassed by the Miami Herald. 

Mr. Dorsen. Do you know whether the stories in the Miami Herald 
were true? 

Mr. Fernandez. T hadn't the slightest idea. 

Mr. DoRSEN. Wouldn't it have been just as easv then to have Mr. 
Priestes explain what was happening to him, so the stories would not 
presumably add that much to the verbal account ? 

Mr. Fernandez. Not actuallv. He was emotionally involved in this 
matter, he Avas a very agitated man, not the most coherent of people 
in maintaining a steady conversation. I don't think he would have 
helped me in explaining his particular problems. 



5379 

Mr. DoRSEN. At any time during the conversation, did Mr. Stans 
indicate surprise or disappointment over the size of the contribution ? 

Mr. Fernandez. No, sir. 

Mr. DoRSEN. At any time did Mr. Stans indicate surprise, disap- 
pointment, or concern over the fact that somebody with problems was 
being presented to him in connection with, or at the same time as, a 
campaign contribution? 

Mr. Fernandez. Yes, he was concerned. Because, to reiterate, so 
concerned that he instructed me not to deposit his check. He said, 
"Let's take a look at this fellow and see what kind of trouble he is in ; 
you will hear from me." 

Mr. Dorsen. But there was no concern or surprise at the size of the 
contribution ? 

Mr. Fernandez. No. My reaction would be that he was pleased that 
a check in the amount of $25,000 was going to be donated to the Na- 
tional Hispanic Finance Committee. 

Mr. DoRSEN. Mr. Chairman, we have received, as you know, or Mr. 
Thompson knows, a communication from James R. Stoner, Mr. Sloan's 
lawyer, that is of the same nature as the communication received by 
Mr. Stans and I would like to ask the indulgence of the committee to 
receive it on the same basis as Mr. Stans' letter was received. 

Senator Baker. Thank you, Mr. Dorsen. I have a copy of a letter 
from Stoner, Treese & Ruffner, attorneys of Washington, D.C., 
dated November 7, addressed to the chairman with copies to others; 
to which is attached a statement of Hugh W. Sloan, Jr., dated Novem- 
ber 7, which is signed but not notarized. 

Under the rules of the committee, of course, it can't be received 
without unanimous consent. The Chair would hope in view of the 
precedent we have set previously that unanimous consent will be 
granted. If there is no objection from anybody on the committee, the 
letter w4th the attached statement of Hugh W. Sloan, Jr., will be re- 
ceived, marked as an exhibit, and j)laced in the record ; identified as 
an exhibit, and received as evidence. 

Mr. Jacomini. Mr. Chairman, we would request a copy of that state- 
ment, too, if we may. 

Mr. DoRSEN. One is on its way. 

Senator Baker. Mr. Dorsen, since there is no objection, please pro- 
ceed with that statement. 

[The document referred to was marked exhibit No. 268.*] 

Mr. Dorsen. It is a letter dated November 7, 1973, addressed to 
Senator Ervin and signed by James R. Stoner on behalf of Stoner, 
Treese & Ruffner. [Reading:] 

Dear Senator Ervin : I understand from counsel for the committee that testi- 
mony of Hugh W. Sloan, .Jr. would be helpful to the committee in completing its 
record concerning events that occurred at a meeting in late March 1972 in the 
office of the Finance Committee to Re-Elect the President between Messrs. 
John Priestes, Ben Fernandez, Maurice Stans, Hugh W. Sloan, Jr. and others. 

Mr. Sloan presently resides in Birmingham, Mich., and it would be inconven- 
ient for him to come to Washington to testify or to execute an affidavit concern- 
ing this matter on a timely basis and accordingly, he has authorized me to sub- 
mit a statement on his behalf. 

As Mr. Sloan's attorney, I have discussed this matter with him on numerous 
occasions and I enclose herewith a statement which I have signed on his behalf 

*Seep. .5740. 



5380 

and which I have reviewed with him and which he has informed me accurately 
reflects the testimony which he would give if called as a witness. 
I trust the enclosed statement will be helpful to the Committee. 

Then there is a two-pap:e statement of Hn^h W. Sloan. Jr. : 

I was informed that about late February 1972, Ben Fernandez approached 
Maurice Stans. chairman of the Finance Committee To Re-Elect the President. 
and told him that he thought that the Spanish-speaking communitv in the United 
States could raise $1,000,000 for the President's re-election effort and asked that 
records of contributions by the Spanish-speaking communitv be kept separate 
from other campaign contributions. Thereafter, a Hispanic Finance Committee 
was formpd with Mr. Fernandez as chairman and Mr. Stans asked me to act as 
liaison with this committee which I thereafter did. 

About early March 1972 Mr. Fernandez indicated that he wanted a big kiekoff 
for the Hispanic Finance Committee and said that he would start off with the 
potential contributors from Florida and mentioned that he hoped that he had a 
couple of contributors in the $100,000 class, inclurling John Priestes. whom he 
wanted Mr. Stans to meet. After I took this up with Mr. Stans. Mr. Stans asked 
for further background. Based upon what Mr. Fernanrlez told me. I prepared a 
short memorandum to Mr. Stans including the fact that among the persons who 
wanted to see him was a potential $100,000 contributor according to Mr. Fer- 
nandez. Mr. Stans agreed to meet with the prospective contributors identified by 
Mr. Fernandez. 

In mid-March 1972. five or six Spanish-speaking persons, including Mr. Fer- 
uandez and Mr. Priestes. met briefiy with Mr. Stans and me. There was no signifi- 
cant discussion that I recall. Immediately after the larger meeting, Mr. Stans met 
privately with Mr. Priestes and perhaps Mr. Fernandez. After the meeting. Mr. 
Stans was upset and expressed his displeasure with the meeting to me. stating 
that the contributor was not in the $100,000 class as he had been led to believe and 
further that he was concerned about Mr. Priestes personally. Mr. Stans told me 
that we would have to have better clearance of potential contributors who wanted 
to meet him. 

Mr. Priestes had arrived at this meeting with a contribution in the form of a 
check. However, there were problems regarding the use of the check as a cam- 
paign contribution inasmuch as the check was not made out to the proper payee, 
probably being payable to the Republican National Committee rather than to 
one of the campaign committees. In addition, ordinarily a contributor who made a 
contribution by check in an amount over iK3.000 would break his contribution into 
units of $3,000, and the check which Mr. Priestes had was for an amount in excess 
of $.S.000. 

The above occasion was the only specific occasion that I recall Mr. Stans meet- 
ing with potential contributors introduced by Mr. Fernandez but there may have 
been one or two others. 

It is dated November 7. 1978. and is executed Hugh W. Sloan, Jr., by 
James "R. Stoner. attorney. 

Mr. Fernandez, is there anything yon want to state concernino: Mr. 
Slonn's statement? 

Mr. Fernandez. Yes, sir. Yes. sir. I have read the memorandum and 
as a whole, I agree with the data submitted. I do not recall at any time 
ever mentionhig Mr. Priestes to anyone as being a potential $100,000 
contributor. There were several $100,000 potential contributors, as I 
indicated earlier in my testimony, and who met with me and pledged 
that they would raise $100,000 or more. But I do not recall at any time 
that Mr. Priestes was included in that category. 

Mr. DoRSEN. Did any contributor pledge that he would contribute 
$100,000 or more? 

Mr. Fernandez. No, sir. 

Mr. DoRSEN. What happened next after the meetincr? 

Mr. Fernandez. About 10 days later I received a phone call from Sec- 
retary Stans and he told me that we should return Mr. Priestes' check 
to him, that the man was in serious trouble, contrary to what he had 



5381 
indicated to us in the Secretary's office. The Secretary said, much as I 
liate to return this money to the man, we had better return it because 
he is in trouble up to his eai'S and it will make us all look bad if we ac- 
cept his donation. I thanked the Secretary and within several days the 
check was returned to Mr. Priestes. 

Mr. DoRSEN. During the period in question did you have a number 
of teleplione conversations with INIr. Priestes ? 

Mr. Fernandez. I may or may not have had. I do not recall. I do 
recall, of course, that there was one telephone call where I informed 
Mr. Priestes that we could not accept his donation and it was a brisk 
phone call. The check was returned. I had been instructed to break off 
all communication with the man and I was following my instructions. 

Mr. DoRSEN. Do you recall whether during the period from — be- 
tween the meeting and your communication to Mr. Priestes that the 
committee did not accept his contribution — whether Mr. Priestes tele- 
phoned you ? 

Mr. Fernandez. I do not recall whether he did or not. 

Mr. DoRSEN. You heard his testimony that he did. Do you have any 
reason to doubt that that particular portion of the testimony is not 
true? 

Mr. Fernandez. Yes. The man is a convicted liar and his entire 
story is a complete fabrication. I would not believe him if he said that 
the sun was rising tomorrow. I have reason to doubt his integrity. 

Mr. DoRSEN. Mr. Fernandez, in many respects your testimony with 
his is inconsistent in many of the details, is that correct ? 

Mr. Fernandez. Yes, sir, it is. 

Mr. DoRSEN. And you just heard two people indicate — Mr. Casanova 
and Mr. Sloan — that your testimony, your recollection concerning 
$100,000 was probably not correct, is that true? 

Mr. Fernandez. No, sir. That is not correct. As I indicated to you, 
Mr. Casanova informed me that there was a possibility that the 
$100,000 figure was mentioned when he was interviewed by your staff. 
Furthermore, I do not recall ever discussing a $100,000 donation by 
Mr. Priestes with anyone, and if there is a problem, the problem is a 
simple one, faulty memory over something that took place almost 18 
months ago. 

But, other than that I do not see where I have to agree with the 
statement that — the question you have asked. I also have this memo- 
random from your committee addi'essed to you stating "Casanova 
stated that the initial figure could have been $100,000 but he thought 
$25,000 was more accurate." 

So I think that pretty well establishes the limit as far as I am 
concerned. 

]Mr. DoRSEN. When did you find out that the contribution would only 
be $25,000 rather than $50,000? 

Mr. Fernandez. In Miami, the clay I met him, the first day I met 
him. 

Mr. Dorsen. And you testified, I believe, that the $100,000 figure 
was never mentioned as far as you can recall ? 

Mr. Fernandez. That is correct, sir. 

Mr. Dorsen. I think the record does speak for itself, Mr. Fernandez. 

Mr. Fernandez. I think so and I am prepared to stand on it. 



5382 

Mr. Thompson. Excuse me. Mr. Chairman, may I inquire — I have 
not seen that before and as I understand it — I think that is one of only 
two copies we have and as I understand it, that is correct, that the 
memorandum states that the figure could have been — the initial figure 
could have been $100,000 but he thought $25,000 was more accurate. 
And as far as I know, that is the only reference we have in a memoran- 
dum or an interview. I think it ought to be made quite clear. 

Mr. DoRSEN. I think it is clear, Mr. Thompson. 

Was there any further contact with Mr. Priestes ? 

Mr. Fernandez. Not to my knowledge. 

Mr. DoRSEN. Did you ever solicit him for a contribution of $5,000 ? 

Mr. Fernandez. No, sir. I don't recall — let me qualify that. I don't 
recall ever having solicited him for any money after the initial con- 
tacts with him. 

Mr. DoRSEN. But it may have occurred ; is that right ? 

Mr. Fernandez. It is possible but improbable. 

Mr. Dorsen. And if it did occur, it would have been after Mr. Stans 
told you to cut off contact with Mr. Priestes ; is that correct? 

]\Ir. Fernandez. That is correct, and that is why I state it is improb- 
able that I would have communicated with the man other than the 
phone call when I informed him we could not accept his donation. 

Mr. DoRSEN. Mr. Chairman, I have no further questions at this time. 

Senator Baker. Thank you, Mr. Dorsen. 

Mr. Thompson. 

Mr. Thompson. Mr. Fernandez, when you talked with Priestes in 
your initial conversation, did he indicate any relationship at all with 
Spanish-speaking people in his business or otherwise ? 

Mr. Fernandez. Well, he did allude to the fact that he was building 
low-cost housing and that a large number of the people that were buy- 
ing the units were Spanish-speaking people, and that he had Spanish- 
speaking business associates. 

Mr. Thompson. When he first made the offer of $25,000 and you 
had that discussion, as I understand it, then he immediately men- 
tioned the problem that he was having with the FHA ? 

Mr. Fernandez. Yes, sir. 

Mr. Thompson. That was in the same conversation? 

Mr. Fernandez. Not in the same conversation. We terminated the 
discussion with respect to the donation and I thanked him, and then 
he said, "Now, Mr. Fernandez, I would like to talk to you about some- 
thing else." Then we proceeded to discuss his problems in relation to 
the harassment he was receiving from the newspapers or he claimed 
to have been receiving, and of course, those problems pertained to his 
activities with HUD. 

Mr. Thompson. Was his contribution conditioned on what you 
might be able to do for him? 

Mr. Fernandez. Absolutely not, sir. 

Mr. Thompson. Was it not obvious that he expected some return on 
his money from the tone of the conversation, the fact that he wanted 
to speak to Mr. Stans and all of the surrounding circumstances ? Didn't 
that occur to you? 

Mr. Fernandez. Yes, it occurred to me particularly — he made a re- 
quest and his request was to get assurances of a fair and equitable 
investigation and hearing; that the results of the harassment of the 



5383 

press would Jiot have, a bearing on Dw, ontcorriR of the investigation. 
The man told nui lie had done nothin^r jllc^ral or irnrnoral, and he was 
a frij.d)tened man. He said he was afraid, iiut J didn't know how to 
handle, that kind of a situation. 

This was my first effort at fundraisin^ ever in my life. So I just 
turned him over to tlie boss and let him Ijandle this fellow. 

Mr. Tjiomi'Son. Did you have any contacts with FJfA officials at 
that time? 

Mr. I^'krnan'okz. No, sir. 

Mr. Tjiomj'SOX. Have you ever had any dealinj( with the FHA ? 

Mr. Fernandkz. No, sir; other- than as a homeowner many years 

ago. . 114- 

Mr. TiroMr-so.v. Did you hsive. an impression in your mind at that 
particular time as to wliat f;er}ia[>s mifrlit \xt done for a man in these 
circumstances? 

Mr-. Vy.nsASDi//.. No, sir. J would not }i(ti involved in any kind of 
a sitiration I hat would be s\jf<^'esti vf, of political hanky-panky in tlie 
background. I don't want to get into any kind of trouble; and even 
not wanting to g<;t into trouble, look at me now. 

Mr-. TiroMi'Sfj.v. You mentioned your high regard for Mr. Slans. 
Would you have, put Mr-. Stans in a position wher-e he might be ques- 
tioned or his motivations migdit be questioned ? 

Mr-. VEiiSASi)}//,. No, sir. 

Mr-. TrroMr'Ho.v. When you caljfd Mr-. Stans and pr-oceeded lo set up 
tlie meeting, liow muf;h did you tell Mr. Stans about your conversat ion 
with l^riestcs, and how mucl'i did you tfll him about his FHA problems 
in the, telephone conver.sation ? 

Mr-. Fkh.vaxi^kz. I didri't tell him about his FHA fnoblems because 
I didn't know what his FHA problems were. I told him vcjy briefly 
aljout the fact that the man was — had indicat/td, staffed that lie was 
bciing harassed by the pr-ess, and the Secretary was vitry sympathetic 
with that statement from the standpoint that I think he had been 
having some, problerns of his own, and ho he agreed to listen to the 
man, and he agreed to gr^ through his ne\vspa[>er clipfjings. 

Mr. TiioMi'Ko.v. And he had shown you his newspaj^er clif>pingH, is 
that dorntct'i 

Mr. Fj-:i{.VAxnKz. Yes, sir. 

Mr. TiioMJ'SOx. Did you sugge.st to Priest/ts that he take thes*i 'tlip- 
jjings and show them to Mr. Slans? 

Mr. Fi:r;xA.vr>KZ. Yes, sir. I flid. 

-Nfr. Tr/OMr'Sox. Why did you suggest tluit to him ? 

Mr. FKKXAxr^KZ. There was a physical documentation of hifl assertion 
or his claim that he was being harassed by the newspapers, and it was 
a xiivy formidable packet of newspaper clippings. 

Mr. 'J'rroMi'SOx. All right. Was it then to present the publicity prob- 
lem that he was having or was it to inform Mr. Stans of the substantive 
problems that he was having with the FHA '. 

Mr. Fki{Xaxi>kz. Well, as far as J was coriCMrucA. it was to demon- 
strate the- publicity problems that he, was having. 

Mr, TiiOMPBOX. As far as you know, crjuld he have explained t/> 
Mr. Stans his substantive FJIA problems just as well orally without 
newspaper clippings? 



5384 

Mr. Fernandez. I think he would have had problems in common. 
He IS not— m the few moments that we were with Secretary Stans he 
was not very articulate. ' 

Mr. Thompson. So they could have had a double purpose, then ? 

Mr. Fernandez. It is possible ; yes, sir. 

Mr. Thompson. When you .a:ot to the meeting with Mr. Stans in his 
othce on March 13, you say that Mr. Priestes never asked Mr. Stans to 
call anyone? 

Mr. Fernandez. That is correct. 

Mr. Thompson. Did he ever indicate to you in any way, by anything 
he said or any look he ajave you, that he was disappointed or surprised 
at the tenor of the meeting or the way things were goin^ ? 

Mr Fernandez. I certainly don't recall that he did other than the 
tact that he was very nervous and he was possibly disappointed that 
the meetmg didn't last longer than it did. But other than that, I don't 
know what was going through his mind. 

Mr. Thompson. Did he say anything to you after the meeting? 

Mr. Fernandez. No, sir. I didn't see him after the meeting. 

Mr. Thompson. I see. Could you, with as much specificity as pos- 
sible, tell us exactly what happened, as it happened, with regard to 
the conversation pertaining to the check and Avith regard to the con- 
vereation pertaining to his problems, and how long each conversation 
lasted ? 

Mr. Fernandez. Yes, sir. The first time I met with him in Florida 
we had a meeting that lasted, I would estimate, between a half hour 
and 45 minutes. 

Mr. Thompson. All right. I am talking specifically with regard to 
the meeting with Mr. Stans when he presented the check. Did he give 
the check to you or did he give it directly to Mr. Stans ? 

Mr. Fernandez. I believe he gave me the check and I turned it over 
to Secretary Stans who then returned it to me. 

Mr Thompson. When did you first realize it was made out to the 
Kepublican National Committee? 

Mr. Fernandez. Immediately outside the Secretary's office 

Mr. Thompson. The first time you had seen the check ? 

Mr. Fernandez. Yes, sir. 

Mr. Thompson. All right. Tell us what happened. 

Mr Fernandez. We went into the Secretary's office; the meeting 
lasted approximately 12 minutes, 13 minutes, and Mr. Priestes related 
to the Secretary basically the same things he had told me in Miami, 
h la., and 

Mr. Thompson. When did he do that, in the beginning ? 

Mr. Fernandez. At the beginning. First of all. he made his donation 
and he handed— handed me the check which I then gave to Secretary 
Jo tans. 

Mr. Thompson. Did the Secretary ever mention making out other 
checks, smaller checks, $3,000 checks, perhaps ? 

Mr. Fernandez. T do recall that he was informed that he would have 
to rewrite the check and make it to the proper committee— one author- 
ized to receive funds for the Presidential campaign. I don't recall 
whether there was any conversation about breaking it down into 
smaller amounts to avoid the gift tax. 



5385 

Mr. Thompson. Do you know if there was any consideration with re- 
gard to possibly giving another check or more than one check in the 
names of individuals other than Mr. Priestes ? 

Mr. Fernandez. I don't recall. That is possible, too. I don't recall. 

Mr. Thompson. All right. Was there any talk or conversation or any 
mention by Mr. Stans to the effect that perhaps he should give his 
contribution in cash, a certain portion of it in cash ? 

Mr. Fernandez. Absolutely not. Nowhere during this entire affair 
was there any effort on anybody's part from the Finance Committee 
to Re-elect or Hispanic Finance Committee to obtain a cash donation 
from this man. At no time at all was cash ever discussed. 

Mr. Thompson. All right. Exactly what did Mr. Stans say to him 
about the check when he took it ? 

Mr. Fernandez. Mr. Stans informed this man that the check would 
have to be rewritten because of the fact that it was not made to the 
proper committee. The Secretary kept the check on his desk and then 
Mr. Priestes stated that he wanted to discuss with Mr. Stans this prob- 
lem that he was having with the press in Miami. He then proceeded to 
go into the same dialog that he had had with me in Miami, Fla. 

Mr. Thompson. Did Mr. Stans give the check back to you before he 
went into this dialog, or after ? 

Mr. Fernandez. He gave it to me after the dialog — after the pre- 
sentation by Mr. Priestes. That is when the Secretary returned the 
check. 

Mr. Thompson. And the check was on his desk during the con- 
versation ? 

Mr. Fernandez. Yes, sir. 

Mr. Thompson. Did he look at the newspaper clippings ? 

Mr. Fernandez. He thumbed through them. 

Mr. Thompson. For about what period of time ? 

Mr. Fernandez. About 10 or 15 seconds. 

Mr. Thompson. What was his reaction to the newspaper clippings ? 

Mr. Fernandez. None, because I do not think he had time to read 
them. 

Mr. Thompson. What did he say to you or Mr. Priestes ? 

Mr. Fernandez. After he listened to Mr. Priestes, he asked Mr. 
Priestes whether or not Mr. Priestes was guilty of any wrongdoing 
with respect to his corporate activities in Miami, Fla. Mr. Priestes 
informed the Secretary that he was not 

Mr. Thompson. Excuse me. How did Mr. Priestes characterize his 
problems ? 

Mr. Fernandez. As minor technical problems — that is the way he 
referred to them — and of no serious consequence. 

Mr. Thompson. He was suspended, I believe, that same day. Did 
he indicate to you or Mr. Stans that he was in danger of possibly being 
suspended by the FHA ? 

Mr. Fernandez. It is possible that he stated that he might be sus- 
pended. He was concoi-nod about tlie bad pi'ess and subsequently an 
unfair hearing, which could result in some form of suspension for 
him and his firms. 

Mr. Thoimpson. You mentioned cash a moment ago and said "ab- 
solutely not" in response to my question about discussion of cash. Was 



5386 

it your policy with regard to your particular organization to solicit 
cash contributions? 

Mr. Fernandez. Absolutely not. 

Mr. Thompson. Why ? 

Mr. Fernandez. Because, first of all, the receipt of cash in our or- 
ganization presented a very serious problem. There were very few of 
us involved. National headquarters, for example, consisted of two 
people: myself and a secretary. And as a consequence, on the few 
occasions when we did receive cash, $25 or $50 donations, we would 
have to go to a bank and get a cashier's check before we submitted it 
to the Finance Committee To Re-Elect the President. "We did not 
have time to do that sort of thing. Consequently, we discouraged at all 
times, in writing and orally, to all the people involved with us — we 
discouraged the receipt of cash. 

Mr. Thompson. Of course, Mr. Priestes was present in Washington 
at the headquarters. If he had had cash on him at this particular time, 
you would not have had this particular problem that you mentioned. 
Was there any discussion or any inquiry as to whether he had cash 
with him, or anything like that ? 

Mr. Fernandez. No, sir. 

Mr. Thompson. Was this the last time you ever saw Mr. Priestes ? 

Mr. Fernandez. Yes, sir. 

Mr. Thompson. I believe you said Mr. Stans called you back some 
time later. Approximately how long was it before he called you back? 

Mr. Fernandez. I would estimate it about 1 week to 10 days later. 

Mr. Thompson. And you have already testified to what he told you. 
How long was it after that before you had the check returned to Mr. 
Priestes ? 

Mr. Fernandez. About 2 or 3 days. 

Mr. Thompson. How did you effectuate the return of the check ? 

Mr. Fernandez. It was physically returned to one of the finance 
committee people in Florida, who then returned it to Mr. Priestes. 

Mr. Thompson. Do you happen to recall the name of this person? 

Mr. Fernandez. No ; I do not. 

Mr. Thompson. I have no further questions. 

Senator Baker. Thank you, Mr. Thompson. 

Senator Montoya. 

Senator Montota. Mr. Fernandez, I believe you stated that when 
Mr. Priestes came to see you, he showed you the clippings and then 
offered the $25,000 contribution, is that about it ? 

Mr. Fernandez. No ; that is incorrect. 

Senator Montota. How did that happen ? 

Mr. Fernandez. Mr. Priestes came into my room and sat down. We 
chatted for a few minutes. Then I told Mr. Priestes that I had been 
informed that he was going to make a $50,000 donation to the cam- 
paign. Mr. Priestes corrected me and said that is not accurate, Mr. 
Fernandez, it is only $25,000. I agreed to accept his donation. I was 
pleased to receive it. 

Senator Montota. Who had informed you that he was going to con- 
tribute to the organization which you represented ? 

Mr. Fernandez. One of his Cuban associates, whose name I do not 
know. 

Senator Montota. When did he show you the clippings? 



5387 

Mr. Fernandez. After we got through discussing his donation to 
the Presidential campaign. He then said to me, "Mr. Fernandez, I have 
another problem I would like to discuss with you." Then he proceeded 
to describe his problems with the Miami Herald. It was at that time 
that he pulled out his folder of newspaper clippings to show me, to 
give evidence as to how he was being persecuted, almost on a day-to- 
day basis. 

Senator Montoya. Did you read these clippings ? 

Mr. Fernandez. No. 

Senator Montoya. He just showed them to you ? 

Mr. Fernandez. He showed them to me, handed them to me, and I 
saw some of the headlines. But it was a very thick folder, probably 2 
to 3 inches thick and I would not have had time to read the articles. 

Senator Montoya. Did he explain to you that he had some problems 
pending with HUD or with FHA? 

Mr. Fernandez. Yes, sir. 

Senator Montoya. That there were charges filed against him 

Mr. Fernandez. No. 

Senator Montoya [continuing] . To suspend his eligibility ? 

Mr. Fernandez. No, sir. 

Senator Montoya. What did he tell you about that ? 

Mr. Fernandez. He told me that he was a low-cost housing builder 
and that because of his aggressiveness and ability to produce, that he 
had received the bulk of the HUD contracts in Dade County, Fla. ; 
that the Miami Herald had knowledge of the high percentage of houses 
that he was building and was taking him to task on that particular 
subject and that they had photographs of the foundations of his build- 
ings, things of that sort. He was very much chagrined over the fact 
that he had been a major individual with respect to the local office of 
HUD producing on the low-cost housing program, and now that he 
had produced, he was being harassed. This was the nature of his prob- 
lem with the HUD people. 

Senator Montoya. Well, if you did not read the clippings, why did 
you ask him to bring the clippings to Mr. Stans ? 

Mr. Fernandez. Because I did not have time to read the clippings. 
Possibly Secretary Stans or members of the staff could review those 
clippings. 

Senator Montoya. Well, you must have thought that they were very 
important and very revealing, because you did ask him to bring the 
clippings with him to Washington, did you not? 

Mr. Fernandez. I sure did. I thought that he brought those clip- 
pings to verify the intensity of the harassment by the press, and I 
could not think of a better way to demonstrate that position than by 
bringing the clippmgs along with him. 

Senator Montoya. Now, did you ask him why he had thought of the 
National Hispanic Association ? 

Mr. Fernandez. No, sir. 

Senator Montoya. Or finance association ? 

Mr. Fernandez. No. 

Senator Montoya. Did you inquire as to who had advised him of 
your presence in Miami or wherever it was ? 

Mr. Fernandez. No, sir, I did not, because the individual who intro- 
duced us, if I recall correctly, brought him to the hotel. So he came 
with someone. I don't know who that individual was. 



5388 

Senator Montoya. How did they know that you were there ? 

Mr. Fernandez. I had been receiving a lot of publicity in INIiami be- 
cause of the appointment as national chairman of the National His- 
panic Finance Committee. I had met some of his colleagues previously 
at a Cuban-American cocktail party, which was a small fundraiser 
on behalf of the National Hispanic Finance Committee. 

Senator Montoya. I can't understand why Mr. Priestes would select 
the National Hispanic Finance Committee by reading some publicity 
about you in the paper and selecting you to make a contribution of 
$25,000 or $100,000, whatever it was, when he could have opened bigger 
doors at the Committee To Re-Elect the President in Washington. 

Mr. Fernandez. Well, it was, I think, a matter of convenience. One 
of his colleagues who was a Cuban-American introduced us and set 
up the arrangements for the meeting. I had met his colleague during 
the cocktail party, the small fundraising cocktail party. Consequently, 
it was a convenient thing to do. The man knew Priestes and he knew 
Fernandez, so he got us together. 

Senator Montoya. Well, he must have been told by someone that 
you would be a good courier for this contribution and since he was not 
interested in politics, as he so testified yesterday, he must have been 
interested in trying to get some satisfaction in return with respect to 
his problem. 

Mr. Fernandez. Well, Senator Montoya, I think that is sheer specu- 
lation. I don't know what went through that man's mind. 

Senator Montoya. Well, did that go through your mind, that he 
might have had that kind of interest ? 

Mr. Fernandez. No ; my interest in the man was that he wanted to 
make a donation in the amount of $25,000. 

Senator Montoya. You just looked at him and you thought to your- 
self, well, here is a good man and he wants to contribute to the cause, 
is that it ? 

Mr. Fernandez. Yes, sir. 

Senator Montoya. $25,000? 

Mr. Fernandez. Yes, sir. 

Senator Montoya. Now, the word NEDA has entered into the testi- 
mony here. Would you explain so that we can clarify the record what 
NEDA stands for? 

Mr. Fernandez. Yes, sir. 

NEDA are the letters of a nonprofit corporation called the National 
Economic Development Association, which I founded several years 
ago for the purpose of fostering the free enterprise system among 
Spanish-speaking people throughout the United States. It is still in 
operation. It is basically, sir, a manafrement consulting company with 
regional offices throughout the United States. 

Senator Montoya. How is its operation financed ? 

Mr. Fernandez. Wlien I was chairman-president, we received a 
grant from the Small Business Administration in the amount of $605,- 
350. It has since been transferred into the Department of Commerce 
under the Office of Minority Business Enterprise, where it receives its 
funds for operation. 

Senator Montoya. And what functions did you perform through 
NEDA while you were the president of this organization ? 



5389 

Mr. Fernandez. Well, I was a full-time chairman of the board and 
president of NEDA. It was my primary responsibility to organize the 
corporation in its entirety, to establish a board of directors, to lay out 
the policy, working with the board as to the objective of NEDA. It 
was my role to recruit, train, motivate all of the members of the 
executive team of NEDA, and with one or two exceptions, I personally 
handpicked every management consultant that worked with the or- 
ganization in every office in the United States when I was its chairman. 

Senator Montoya. Did you, as president, give counsel to applicants 
for charters for banks and building and loan associations ? 

Mr. Fernandez. Yes, sir. 

Senator Montoya. And did you have your own organization also 
doing some work ? 

Mr. Fernandez. Yes, sir. 

Senator Montoya. What was the name of your own individual or- 
ganization? 

Mr. Fernandez. Research, Inc. 

Senator Montoya. What was the function of this organization ? 

Mr. Fernandez. Researching, helping in the organization of finan- 
cial institutions. 

Senator Montoya. Did you aid some of these applicants in conjunc- 
tion with the effort that was being put forth by NEDA ? 

Mr. Fernandez. No, sir, other than describing to them what the pro- 
cedure was if they wanted to organize a bank or savings and loan or 
an investment company. I went into great detail so that our people 
would know what the procedures would be to move into the field of 
finance. 

Senator Montoya. Did you charge them for this service ? 

Mr. Fernandez. No, sir. 

Senator Montoya. You mean to tell me that Research, Inc., would 
not receive any fees for these services at all ? 

Mr. Fernandez. No; that is not what I intended to say, sir. You 
asked me whether I charged people for fees in terms of instructing 
them on how to prepare an application. I did not charge them for any 
fees whatsoever. If Research, Inc. were to be retained to do, actually 
do the work for them, that is a different matter. 

Senator Montoya. Were they retained ? 

Mr. Fernandez. On numerous occasions. 

Senator Montoya. And Research, Inc. was your organization ? 

Mr. Fernandez. Yes, sir. 

Senator Montoya. Were there any other owners of Research, Inc ? 

Mr. Fernandez. Sir? 

Senator Montoya. Were there any other owners ? 

Mr. Fernandez. No, sir. 

Senator Montoya. You were the sole owner of Research, Inc? 

Mr. Fernandez. Yes, sir. 

Senator Montoya. And while NEDA was advising these people 
to process applications and to form applications for charters and 
for — for charters for banks, to operate banks and building and loan 
associations; they were — these applicants were — in turn, hiring Re- 
search, Inc., to do most of the work ? 

Mr. Fernandez. That is not necessarily true. 

Senator Montoya. All right, what is true ? 



5390 

Mr. Fernandez. In every instance as chairman of NEDA, when I 
would frive a lecture — for example, in El Paso, Tex., where I lectured 
before the business community — I urged them in the organization of 
a bank. I gave them complete details as to how to organize a bank. It 
is very complicated. And I urged them to move into the banking field. 
"VVTiether Ben Fernandez was involved or Research, Inc., was involved 
was immaterial, and I went to great length to stress this. My main 
job was to motivate these people, to be the catalyst to move into the 
field of finance, in which we have been almost completely ostracized 
until the time that I got involved in it. 

Senator Montoya. How many retainer fees would you say Research, 
Inc. received from these applicants ? 

Mr. Fernandez. I don't know. 

Senator Montoya. More or less ? 

Mr. Fernandez. I don't know. 

Senator Montoya. Well, you were the sole owner. 

Mr. Fernandez. Right. But during the time that I was with NEDA, 
I had divested myself from Research, Inc. operations. It had its own 
management. They operated their own shop. It was a small consulting 
corporation. I think during the time that I was chairman of NEDA I 
visited Research, Inc. one time physically, to — I don't recall the cir- 
cumstances. 

Senator Montoya. What was the usual fee that you charged ? 

Mr. Fernandez. To organize a bank — legal fees, economic fees, are 
$10,000, which are prescribed by the controller of the currency or the 
State superintendent of banks in a given State. 

Senator Montoya. Go ahead. 

Mr. Fernandez. To organize a Federal Savings and Loan — we are 
talking about a 1-year period of time — the total fees are approximately 
$15,000, for legal fees, economics fees, financial fees, consultant fees. 
Plus costs are included— included are all of the costs involved in 
producing a package. 

Senator Montoya. Approximately how many $10,000 fees were re- 
ceived by Research, Inc. ? 

Mr. Fernandez. During what period ? 

Senator Montoya. During the period that you were rendering serv- 
ices to these institutions or to the applicants ? 

Mr. Fernandez. I would estimate just roughly, to the best of my 
recollection, maybe 10. 

Senator Montoya. All right. Now 

Mr. Fernandez. I would— sir, may I make a statement, qualification 
also? Because of the fact that I was no longer involved in Research, 
Inc's operations, it was also the worst fiscal year that that corpora- 
tion ever had and I can't stress that strongly enough. I think they 
paid corporate taxes on less than $10,000. 

Senator Montoya. I am not speaking of the profit. I am speaking of 
what you received. 

Mr. Fernandez. I just wanted to get into the records that there were 
no windfalls or money-making schemes involved here. 

Senator Montoya. Would you supply all you received from these ap- 
plicants, supply it for the record ? 

Mr. Fernandez. Would I 



5391 

Senator Montoya. Would you supply the record of receipts for re- 
tainers which you received from these applicants for the record? 

Mr. Ferxandez. I personally received nothing, sir. 

Senator Montoya. No. Research, Inc. 

Mr. Fernandez. Well, Research, Inc. is no longer my firm but I am 
sure the records to which you refer can be made available to you. 

Senator Montoya. Can you supply that information ? 

Mr. Fernandez. No, sir, I cannot. It is no longer my firm. I can re- 
quest the information be supplied and I am sure that it will be. 

Senator ^SIontoya. Well, I ask counsel to request that information. 

Senator Baker. I think the best way to handle that is with the clear 
understanding that the records are not in your possession and Senator 
Montoya's clear, and I think justified, request that some efforts be 
made to obtain them. So if counsel can indicate a willingness to try 
and obtain them and file it as an exhibit 

Mr. Ely. We will certainly agree to try to get those records. Senator 
Baker. 

Senator Baker. Is that agreeable ? 

Mr. Jacomini. Yes. 

Senator Montoya. Now, why did you leave the presidency of the Na- 
tional Economic Development Association ? 

Mr. Fernandez. I had a knockdown, dragout battle with a certain 
group, members of the board, who wanted control of the organiza- 
tion and they had the numbers and consequently I resigned. 

Senator Montoya. What charges did they bring up during this 
encounter ? 

Mr, Fernandez. The executive vice president, in this encounter, set 
me up from the standpoint of having the members of the board vote 
against me in a vote of confidence. 

For example, first, he stated that I had given instructions to the 
staff that under no circumstances was the treasurer to have the books 
made available to him — the books of the NEDA organization. That 
was an absolute falsehood. However, when I referred the matter to 
the treasurer or the — not the treasurer but the administrative vice 
president who was working with Mr. Villalobos in this coup d'etat, if 
you will, he verified Mr. Villalobos' statement. 

Second, Mr. Villalobos stated that he had received instructions from 
me that under no circumstances was the treasurer of the organiza- 
tion, Mr. Frank Vega, to be permitted into the NEDA headquarters, 
national headquarters in JjOS Angeles, and this also was a fabrication. 
He went right down the line on a series of allegations against me. 

When I asked for a vote of confidence from the board and did not 
receive it, I resierned. T mi^-ht add. subsequently ]Mr. Villalobos moved 
up to the presidency, Mr. Vega became chairman of the board, and the 
small group that was involved took over the organization. 

Senatoi- ]Montoya. Well, I want to give you an opportunity to an- 
swer charges that were made in the Congressional Record by Con- 
gressman Gonzalez. 

]N[r. Fernandez. I am familiar with them. 

Senator ^Montoya. And these are related in a letter which was writ- 
ten on NEDA stationery by the executive vice president, Alfred 
Villalobos. 



5392 

Now. let me read this, and then I will introduce the entire letter for 
the record. 

Mr. Jacomini. May I ask. are there copies of that letter available? 

Senator Moxtota. I don't think it is available. I was presented with 
this letter and I am sorry that I didn't have time to make a copy but 
I will read it and then show it to you. [Reading :] 

We have studied the transcript in the Congressional Record and would like 
to discuss the most vital points made by Congressman Gonzalez. First of all, the 
following charges are made : 

That is against you. 

1. That Mr. Fernandez used his position as Chairman and President of NEDA 
for his personal financial betterment. 

2. That NEDA sponsored all of his banking and Savings and Loan charter 
applications. 

3. That certain members of the NEDA staff were involved for personal finan- 
cial gain. 

4. That the "Fernandez team" is still very much in control of NEDA and im- 
plies that he can still carry on in the same manner. 

5. That the NEDA operation is in need of a house cleaning. 

Now, the letter further goes on : 

We would like to answer these charges one at a time. 

Firstly, the allegation that Mr. Fernandez used his position at NEDA for his 
personal financial betterment is true and while illegality would be difficult to 
prove, there is no doubt that certain of his actions were improper. We would like 
to inform you that this was one of the facts which led the Board of Directors to 
terminate his relationship with the National Economic Development Association 
at our annual board meeting in August 1971. 

Secondly, to the allegation that NEDA sponsored the formation of banks and 
Savings and Loan organizing groups, NEDA did not ; Benjamin Fernandez spon- 
sored their formation, many of them prior to the formation of NEDA, and he 
did receive his standard fees of upwards of $10,000 per group, however, NT5DA 
staff and NEDA as an organization never set the policy of sponsoring such 
groups so that Mr. Fernandez's surveys required by the appropriate agencies. 
However, that is not to say that individuals employed by NEDA might not have 
been influenced and maybe even directed by Mr. Fernandez to do his bidding ia 
regard to forming these groups and assuring that Research, Inc. would receive 
the survey contracts. This is a matter which during our troubles with Mr. Fei-- 
nandez, was almost impossible to control, and was another reason for terminating 
our relationship with him. 

Thirdly, regarding NEDA staff and Board Members being involved for personal 
gain in the formation of Savings and Loan Associations and banks. It is the 
policy of NEDA that its employees may participate as investors in business ven- 
tures which do not involve NEDA clients, or NEDA resources and facilities. 
Therefore, if a member of our staff wanted to participate as an organizer of a 
bank or in the capacity of an investor, it would certainly be allowed within the 
framework aforementioned. 

Fourth, the allegation that a "Fernandez team" is in control of NEDA and, 
therefore, that Fernandez can continue to operate in the alleged manner, is to- 
tally untrue. 

Fifth, the allegation that the NEDA operation is in need of a house clean- 
ing is completely untrue and certainly unfair. 

For your information and possible use in the future, please be advised that we 
have a complete tape recording of our last year's annual board meeting as well 
as a transcript of the meeting, which we will be more than happy to make avail- 
able to you, if you so require. Also, we wish to inform you that a representative 
of the SBA, Henry Zuniga, was present at that board meeting. 

Please be assured that NEDA is a hard working, highly productive arm of 
the Department of Commerce and the Small Business Administration, and we 
will endeavor to continue to do the type of job that will make you and our 
community proud to be partners in the progress of the Spanish speaking people 
through business enterprise. 

And so on. 



5393 

Now, this letter was written to Secretary of Commerce Peter G. 
Peterson. 

I want to say at the outset that I do not want to cast any reflection 
on NEDA, I think it is a fine organization. But since these allegations 
have been made I now offer you the opportunity to make your own re- 
buttal with respect to same. 

Mr. Fernandez. I would appreciate that vei"y much. 

Senator Baker. 1 wonder, Senator INIontoya, since that has hap- 
pened, if we could submit a copy of what you read so that the witness 
can see it. 

Senator Montoya. I might say that I did not read all of it but I tried 
to highlight the allegations and the answers with respect to the allega- 
tions. 

Mr. Jacomini. Mr. Chairman, before Mr. Fernandez attempts to 
answer those allegations we would like to have a copy of the letter and 
have an opportunity to read it. 

Senator ^Iontoya. You have it right there. 

Senator Baker. Has a copy of the letter been supplied ? 

Senator INIontoya. Yes. 

Mr. Ely. Yes, it has. Senator. 

Senator Baker. Is it the request of counsel that the committee re- 
cess briefly so that you can look it over ? 

Mr. Jacomini. What time does the committee normally recess for 
lunch, Mr. Chairman ? 

Senator Baker. It can recess now if you like and come back at 2 
o'clock, or at 1 :30, or we can recess briefly and try to finish, whichever 
you prefer. If you would like to take 5 minutes or 10 minutes now, we 
can do that and try to finish at 12 :30 or we can reconvene at 2 o'clock. 

ISIr. Jacomini. We think it would be better to recess now for lunch 
and come back at 1 :30 or 2 o'clock, whenever you normally 

Senator Baker. Is there any objection to that? Is 1:30 p.m. agree- 
able ? 

Senator ]\Iontoya. If it is possible — I do not have any more ques- 
tions, Mr. Chairman. If it is possible, we could continue and finish be- 
fore we go to lunch so we will not have to come back this afternoon, if 
it is all right with the witness. 

Senator Weicker. I gather counsel for the witness has indicated he 
would like to have time to assimilate this question and out of fairness 
to him, I think that on the 

Senator Baker. I understand from counsel there is a staff meeting 
at 1 :30 p.m., so I think it would be necessary then to recess until 2 
o'clock. If there is no objection, then the committee will stand in re- 
cess until 2 o'clock. 

[A\niereupon, at 12 noon, the hearing was recessed, to reconvene at 2 
p.m. this same day.] 

Afternoon Session, Thursday, November 8, 1973 

Senator Baker. The committee will come to order. 

The state of proceedings when we recessed for lunch was, a copy of 
a document had been delivered to the witness and his counsel. Senator 
Montoya was the last interrogator. I wonder if the witness has any 
response or if Senator Montoya has any further questions. 



24-650 O - 74 - 9 



5394 

Senator Montota. Mr. Chairman, I would like to offer the letter in 
toto for identification and introduction into the record. 

Senator Baker. Is there objection? 

The Chair hears no objection. The letter will be received and marked 
as an exhibit and made an exhibit in the record. 

[The letter referred to was marked exhibit No. 269.*] 

Senator Montoya. I believe the last question I asked the witness 
was : Did he care to give any rebuttal to statements made in the letter 
with respect to him? 

Mr. Witness, you may proceed to do so. 

Mr. Jacomini. Mr. Chairman, if I may, before Mr. Fernandez an- 
swers Senator Montoya's questions, I would like to make a statement 
for the record. We seem here to be departing, at least for the moment, 
from the Priestes matter and I have a few things that I would like 
to say about that. 

Yesterday, Mr. Fernandez was accused of some rather serious things 
by Mr. Priestes. In order to put those accusations in their proper light, 
I would like to point out that Mr. Priestes is a man who is currently 
under a Federal sentence for, as I understand it, two counts of render- 
ing false statements. These statements were obviously rendered in some 
form under which the making of a false statement was a Federal crime. 
As a result of the plea bargain under which this sentence was rendered, 
Mr. Priestes was also able to have several additional substantial Fed- 
eral charges dropped. I think it is important to point out, in consider- 
ing Mr. Priestes' testimony, that he is a man who stands convicted of 
making false statements. 

I would also like to point out that in the opening statement made 
by Mr. Priestes' counsel, it was emphasized tliat Mr. Priestes was ap- 
pearing voluntarily and without offer of immunity. This subsequently 
turned out to be incorrect and that, as a result of the same plea bar- 
gain under which Mr. Priestes was sentenced, he was — had been 
granted immunity from all of the additional charges growing out of 
his activities in Florida. 

Mr. Fernandez, on the other hand, is appearing here without any 
grant of immunity, nor has INIr. Fernandez asked for any grant of 
immunity. He has made his statements fully and fairly of the facts, 
as he remembers them, of all of his transactions with Mr. Priestes and 
has made them with full knowledge. He had a perfect right to claim 
a fifth amendment privilege and to refuse to answer any questions. 
But with regard to the questions raised by Senator Montoya, Mr. 
Fernandez feels that these questions have nothing whatever to do 
with the investigation of the Presidential campaign activities, but 
nevertheless, out of courtesy to a very distinguished Senator, Mr. Fer- 
nandez will attempt to answer these questions also fully and fairly. 

Thank you very much. 

Senator Baker.'I might say that as I understood Mr. Priestes' state- 
ment on yesterday and the question put by counsel, the reference to 
immunity had to do with immunity granted by this committee and not 
immunity or its equivalent as it might be given by a prosecuting attor- 
ney or U.S. attorney. 

I might also say, without any criticism of this witness or his counsel, 
that the committee, I believe, will view the testimony taken before 

*Seep. 5743. 



5395 

us; whether under oath or by affidavit or by other statement, other 
merits, taking into account all of those factors that may be made to 
appear in the record. All of those matters that you mention, I believe, 
will be already proven in one form or the other. That should not be 
prejudicial to the status and standing of Mr. Priestes, nor should 
it be prejudicial to this witness. But I would point out that the state- 
ments of both Mr. Priestes and Mr. Fernandez will be considered im- 
partially by this committee and all the attendant circumstances as 
well. 

On the question of the relevance of the questions put by Senator 
Montoya, I am happy to hear that counsel has no objection to their 
bein^ answered. I think we have conducted a pretty free-wheeling 
inquiry so far and I would hope that we could proceed apace with 
answers to these charges. 

Would you continue then, please, Mr. Fernandez? 

Mr. Fernandez, ^'es, sir. I have before me a letter having the letter- 
head of the National Economic Development Association. The letter 
is dated May 11, 1972, and it is signed by Alfred R. Villalobos, execu- 
tive vice president and chief operating officer. This letter, to put it in 
its proper context, was submitted by Mr. Villalobos soon after I was 
attacked on the floor of the House of Representatives by Congress- 
man Henry B. Gonzalez of San Antonio, Tex. Mr. Gonzalez, accord- 
ing to the Congressional Record which I have read, attacked me 
approximately 2 weeks after I visited San Antonio, Tex., in the role 
as national chairman of the National Hispanic Finance Committee. I 
went into San Antonio, Tex. — which is a hotbed of Democratic activ- 
ity, very little Republic Party activity — and I rented a storefront 
office in downtown San Antonio. I put a big red, white, and blue sign 
on the window stating, "Re-Elect the President." I called for a press 
conference, had the TV people there, radio, newspapers, and put out 
a news release outlining the purposes of the National Hispanic Fi- 
nance Committee. I hit very hard on the necessity of bringing the two- 
party system of politics to the Spanish-speaking people wherever we 
were located. 

I emphasized very strongly the track record of President Nixon and 
the administration with respect to Spanish-speaking people. I urged 
the people of Bexar County, Tex., which is the county surrounding 
San Antonio, to do everything in their power to support our financial 
campaign and to support the President in his bid for reelection. 

Approximately 10 days or 2 weeks later, the Democratic Congress- 
man, Henry B. Gonzalez, attacked me on the floor of the House of 
Representatives. He attacked me on possible conflicts of interest. He 
attacked me on the grounds of the possibility of wrongdoing while I 
was chairman of the board and president of the National Economic 
Development Association. It was a beautiful piece of character assas- 
sination, done under the sanctity or privilege of the House of Repre- 
sentatives. In other words, I don't think he would dare make the 
statements he made against me in public. 

Mr. Gonzalez, by innuendo, by suggestive phrases, lined out a black 
picture as to my character and as to my qualities as a national leader 
among the Spanish-speaking people. 

I received a copy of the Congressional Record from a friend of mine. 
I read it in great detail and in great amazement, because I had never 



5396 

been attacked by any Congressman any where, any time, and this was 
all new to me. And I was enraged. 

I contacted some of my Mexican-American friends in San Antonio, 
Tex., and asked them whether I should fly to San Antonio and call 
for a press conference and rebut Congressman Gonzalez. I was told 
by my friends who knew this Congressman that that was not neces- 
sary — incidentally, I never met the man, at least not to my knowl- 
edge — that this was a technique used by Congressman Gonzalez when- 
ever he found Mexican-American leadership anywhere in his turf, a 
threat to his Congressional domain ; that he would lash out in every 
direction hoping that the recipient of the whiplash would fight back 
and therefore, he would be in the newspapers for the next 90 days. 

I was urged to ignore this attack. I was told that if I did not follow 
that advice, I could not get anything accomplished with respect to my 
fundraising activities in San Antonio, Tex. 

I swallowed my pride, I took my beating, and I moved out into the 
next State. 

This brings to mind a cliche that I learned from my father, a Mexi- 
can immigrant from Michaocan, Mexico. He told me as a boy, "Son, 
if you ever, as an adult, work with the Mexicans, I want you to 
remember something ; that more Mexicanos have died from envy and 
jealousy than from cancer." 

We have this propensity to cannabalize our leadership and I am no 
different than any other Mexican- American trying to serve his people 
and his country. 

I am the prime founder of the National Economic Development 
Association. I was particularly asked to chair this organization be- 
cause of my background. I think I have an outstanding background in 
finance, economics, marketing, and management. And certainly, my 
background in the field of finance is second to none with respect to my 
area of expertise — second to none anywhere in the United States. 

I was urged by the members of the board — I was urged by some of 
the people from the administration, to take charge of this organiza- 
tion. We highlighted the fact that at the time that I organized NEDA, 
there were some 13,500 insured banks in the United States, only 1 
organized, managed, and controlled by Spanish-speaking people. 
There were 4,500 insured savings and loans, none organized, managed, 
and controlled by Spanish-speaking people. I was urged to provide my 
leadership, my expertise, my management know-how, as a volunteer, 
to lead our people out of the economic wilderness. I accepted this 
assignment and I am proud of everything that I did while I was 
chaii-man of the National Economic Development Association. 

This letter was written by Mr. Alfred R. Villalobos who participated 
in tlie coup d'etat against me when I was chairman of the board. I am 
a big boy. I can't worry about things like that. Those things happen. 
1 was chairman for 14 months. I am surprised I lasted as long as I 
did. 

Let us go down the series of allegations by Mr. Villalobos beginning 
on page 2. 

It states here : 

First, the allegations that Mr. Fernandez used his position at NEDA for his 
personal financial betterment is true and while illegality would be diflBcult to 
prove there is no doubt that certain of his actions were improper. 



5397 

What actions? I do not know. That his personal betterment was 
improved. I do not know anything about that. When I organized 
NEDA I divested mj^self from Research, Inc. Certainly, I still own 
the corporation, which is a small corporation. I think it had five 
employees working under its direction, and during the 

Senator Montoya. May I ask you there, how did you divest your- 
self? 

Mr. Fernandez. I had my stock set aside from the standpoint of not 
participating in any of the management activities of the organization. 
I removed myself from salary from the organization. I made no at- 
tempts to manage the organization directly or indirectly. 

Senator Montota. But that did not disqualify the organization 
from entering into contracts with respect to applications for charters ? 

Mr. Fernandez. Oh, of course not. They can do whatever they wish. 
It is a general purpose corporation. 

Senator Montoya. And you were the sole owner ? 

Mr. Fernandez. Yes, sir. 

Senator Montoya. All right. 

Mr. Fernandez. For the first 6 months of the organization of NEDA, 
then finally I sold my interest, Mr. Montoya. 

It states here also that : 

We would like to inform you that this was one of the facts which led the 
Board of Directors to terminate his relationship with the National Economic 
Development Association at our annual board meeting in August 1971. 

This is a minor technical point but it is important to me. The board 
did not terminate my activities. When I saw that I was in the middle 
of a coup d'etat and there was no way of my winning, I resigned. 

Soon after my resignation one of the members of the board who 
voted against me, a man from Albuquerque, N. Mex., by the name of 
Julian Garcia, came to me in Los Angeles and apologized to me for 
his having participated in that onerous effort, particularly since my 
resignation, he had learned of the true facts which resulted in my 
resigning from that nonprofit corporation. 

The second paragraph states that : 

Benjamin Fernandez sponsored the formation of banks and savings and loans, 
many of them prior to the formation of NEDA. 

I did receive my standard fee of upwards of $10,000 per group. 

However, NEDA staff and NEDA as an organization never set the policy of 
sponsoring such groups so that Mr. Fernandez's group, Research Incorporated, 
could be hired to prepare the survey required by the appropriate agencies. 

Of course, NEDA would not sponsor any financial institution so 
that my firm. Research, Inc., would benefit thereof. There was, how- 
ever, a written policy passed by the board of directors of NEDA urg- 
ing the Spanish-speaking people throughout the United States to move 
into the field of finance, an area in which we have been virtually ne- 
glected, and this was a policy which was adopted by the board. Indeed, 
Senator Montoya, I believe I still have copies of the reports, the 
monthly reports, written by Mr. Villalobos where the policies I just 
indicated are spelled out in detail and I would very much like to send 
copies of that report to this committee to verify the statement that it 
was a policy of the NEDA board of directors to foster entree into the 
field of finance on the part of Spanish-speaking people. 



5398 

Senator Baker. Is the witness requesting permission for inclusion of 
that in his testimony ? 

Mr. Fernandez. Yes, I am. 

Senator Baker. Is there any objection? If not, it will be received. 

[Subsequent to the hearing, the information referred to above was 
received and made part of the record as exhibit No. 270.*] 

Mr. Fernandez. At no time have I ever personally received a $10,000 
fee, or for that matter, any kind of a fee for organizing financial 
institutions while I was chairman of the board of NEDA. I never di- 
rected employees of NEDA to organize banks. 

Senator Montoya. Let me ask you a question right there. 

Mr. Fernandez. Svire. 

Senator Montoya. Did Research, Inc., receive any such fees while 
you were president of NEDA ? 

Mr. Fernandez. No, sir. 

Senator Montoya. All right. 

Mr. Fernandez. The third paragraph, the last paragraph on page 
2, states that : 

Third, regarding NEDA's staff and board members being involved for per- 
sonal gain in the formation of savings and loan associations and banks. It is 
the policy of NEDA that its employees may participate as investors. 

That statement is accurate. 

The fourth paragraph, on page 3, the last sentence. It states there 
that — Mr. Villalobos states : 

As a matter of fact, we have made it very clear on numerous occasions of- 
ficially and unofficially, that we want no part of Mr. Fernandez or the activities 
in which he is involved. 

In fact, numerous members of the board of directors are close and 
personal friends of mine w^ho participate in social, political and busi- 
ness activities with me. Among them are: Mr. Julian Garcia, Mr. 
Frank Casilles, Monte Montez, Tony Maxwell, Frank Fouce, Rafael 
Corona. The next paragraph. Again I take exception to this point 
where the — Mr. Villalobos states: "We took immediate steps to re- 
move him from NEDA, lock, stock and barrel." 

I have already testified that I resigned at my own volition and left 
with my head held high. 

Again this committee — I do not know the background of this com- 
mittee with respect to its knowledge of minority enterprise, minority 
activities throughout our country. It is the toughest thing I have ever 
done in my life to try to work the Spanish-speaking people into a co- 
hesive unit. We have a tradition of not working together. Indeed, 
among ourselves we joke that the Mexican-American does not talk to 
the Puerto Rican, the Puerto Rican does not talk to the Cubano, the 
Cubano talks to no one, and it is tough getting these three diverse 
groups to work together — as I am sure Mr. Montova knows — ^but the 
gist of it w^as, I was able to do it when I organized NEDA, and I want 
this committee also to know, to fief this entire letter in its true per- 
spective, that in 14 months I organized a national management con- 
sulting company. I opened 11 offices from coast to coast. I recruited, 
trained, and motivated the management of that organization. Our 
firm processed over $100 million in loans for Spanish-speaking busi- 

*See p. 5747. 



5399 

nessmen of which some $50 million were actually approved. I think 
a sound use of taxpayer dollars. 

That was my role with NEDA; fully committed, fully dedicated, to 
the point where, at that time, my future was determined as with re- 
spect to the Spanish-speakintr people because for the rest of my life 
I will devote myself to working with the Spanish-speaking people. 

The fourth paragraph states that there is a transcript of the last 
board meeting when I resigned, that there is a tape recording of that 
meeting, and this is probably true because it was my policy at all 
meetings to request a tape recording of the — an open tape recording 
of the meeting so that the secretary would be able to prepare the min- 
utes accurately and properly. 

Again, since Mr. Villalobos has offered to submit this tape and this 
transcript, I request of this committee that the record be left open so 
that both of these pieces of evidence can be submitted. 

Senator Baker. I think the appropriate way to handle this, since we 
are a little afield from the jurisdictional aspects of the committee, 
would be to permit that document or that tape to be received for the 
files of the committee with a later determination on its relevance and 
importance to the record rather than including it as an exhibit to the 
report at this time, and if there is no objection to that procedure. Sen- 
ator IMontoya, if it is agreeable to you 

Senator INIontoya. I have no objection. 

Senator Baker [continuing]. Then the proffered document and tape 
Avill be received for the files of the committee for later determination. 

Mr. Fernandez. Senator Montoya, tliat terminates my comments on 
that letter. Thank you. 

Senator Montoya. Fine. Do you have any other statement? 

Mr. Fernandez. On this letter ? No, sir. 

Senator Montoya. That is all, INIr. Chairman. 

Senator Baker. Thank you, Senator Montoya. 

Are there other questions ? 

Mr. DoRSEN. Yes, Senator. I have a few. 

Mr. Fernandez, did you have any conversations with ISIr. Marumoto 
or Tony Gonzalez concerning grants — Tony Kodriguez, excuse me — as 
to people who Avould receive grants or may have received grants or 
contracts ? 

Mr. Fernandez. There was no formal discussion with either of these 
two men with respect to who had received a grant or a contract. The 
subject of grants or contracts, on occasion, would arise in the form of 
gossip where these were matters of public record and we would be — 
we know the Spanish-speaking leadership throughout the United 
States, both Democrat and Republican, and so occasionally it was 
brought to my attention that so-and-so had received a grant or a con- 
tract in the field of minority enterprise and we knew who the people 
were and that was the extent o,f it. 

Mr. DoRSEN. And I believe you indicated, in response to a question 
of the staff yesterday morning, that you had no discussions. It is your 
testimony that you did not need to' include these gossip sessions by 
your answer ? 

Mr. Fernandez. I don't believe I understand your question, sir. 

Mr. DoRSEN. I believe you were asked yesterday morning whether 
you had any discussions with Mr. Marumoto or Mr. Rodriguez con- 
cerning the recipients of the grants and contracts and I believe you 
said that you did not. 



5400 

Mr. Fernandez. I did not other than as I have just qualified my 
statement. 

Mr. DoRSEN. And did you know whether Joseph Reyes, the head of 
J. A. Reyes Associates, was receivinij; contracts with the Government 
during the period he was chairman of the Washington, D.C., Virginia, 
and Maryland branch of the Hispanic Finance Committee? 

Mr. Fernandez. I do not know whether he had contracts at that 
time. I do know that he is a management consultant in Washington, 
D.C., and that — but I don't know the nature of his business, as to 
whether he himself has contracts. 

Mr. DoRSEN. And do you know whether the members of the ^Vhite 
House staff, including Mr. Marumoto, were making efforts to secure 
contracts for him ? 

Mr. Fernandez. No, sir, T do not know anything to that effect. 

Mr. DoRSEN. And that was done without your knowledge ; is that it, 
if it was done? 

Mr. Fernandez. If it was done, I have no knowledge. 

Mr. DoRSEN. How often were you speaking to Mr. Marumoto and Mr. 
Rodriguez ? 

Mr. Fernandez. I would venture to say on an average of at least once 
a week during the campaign and when I arrived in Washington, D.C., 
I always made it a point to try to at least have lunch with Mr. Rodri- 
guez who is a close personal .friend of mine. 

Mr. Dorsen. And this was not mentioned in those conversations ? 

Mr. Fernandez. What was not mentioned ? 

Mr. DoRSEN. The fact that— the possibility that the White House 
staff was working to secure contracts for Mr. Reyes. 

Mr. Fernandez. No, sir, not at all. 

Mr. DoRSEN. And Mr. Rodriguez, what is the name of his firm ? 

Mr. Fernandez. Ultra Systems, Inc., in Newport Beach, Calif. 

Mr. DoRSEN. And do you know whether there were any efforts made 
durmg the campaign to secure contracts or grants for "his company ? 

Mr. Fernandez. I know of no such effort by anyone. 

Mr. Dorsen. And you did not discuss this with Mr. Marumoto or Mr. 
Rodriguez, is that correct ? 

Mr. Fernandez. No, sir. 

Mr. DoRSEN. Now, we discussed during Mr. Marumoto's testimonv 
yesterday exhibit No. 262-5 which he identified. I would like to read 
that again and ask you if you have any knowledge of that or had any 
participation in it. It is a memorandum dated March 2, 1972, from Mr. 
Marumoto, a memorandum for the Honorable James Lynn, Subject • 
El Diario Editorial. [Reading:] 

In line with our recent discussion of NEDA and our comments of "the tail 
wagging the dog," I am attaching an editorial written by a NEDA employee 
opposing the appointment of Cip Guerra as Deputy Director of OMBE 

This IS the latest example of the unwillingness to cooperate in a "spirit of co- 
operation" with the Administration. I think before Commerce signs off on 
their $2 million grant, you should sit down with Prank Viega and explain the 
facts of life. 

I would appreciate being kept abreast of this highly important matter. 

Do you have any personal knowledge of the circumstances surround- 
ing that memorandum or the preparation of the memorandum itself? 

Mr. Fernandez. No, sir. 



5401 

Mr. DoRSEN. And you had no input at all into that memorandum, is 
that correct ? 

Mr. Fernandez. None whatsoever. I don't want to mislead you, sir. 
I knoAv the people involved in the memorandum. I know Mr. Guerra, 
but I had no knowledge that such a memorandum was being prepared 
nor of what efforts were being made to get him an appointment. 

Mr. DoRSEN. Incidentally, I think you told us in private session that 
the National Hispanic Finance Committee raised one-third of a mil- 
lion dollars, is that correct ? 

Mr. Fernandez. Yes, sir. 

]Mr. DoRSEN. Now, did you do anything that could be called digging 
into Mr. Priestes' problems with FHx4. ? 

Mr. Fernandez. No, sir. 

Mr. Dorsen. Did you ever tell anybody that you were going to dig 
into Mr. Priestes' problems with the JFHA ? 

Mr. Fernandez. No, sir. 

Mr. Dorsen. Are you familiar with a newsstory quoting you to that 
effect — that is a newsstory that appeared on September 3, 1972, in the 
Miami Herald ? Is that correct ? 

Mr. Fernandez. I am familiar with the newsstory, yes, sir. 

Mr. Dorsen. Is that newsstory correct, then ? 

Mr. Fernandez. Not in its entirety. As a matter of fact, I was very 
upset with the reporter who interviewed me because he did not give full 
disclosure, as I offered to give him, and that he withheld certain in- 
formation, and some of my phrases were distorted. 

Mr. Dorsen. I am talking specifically about that phrase. That is an 
inaccurate quote ? 

Mr. Fernandez. Yes, sir. 

Mr. Dorsen. Now, you have commented on Mr. Priestes' credibility 
from your standpoint and I would like to ask you whether you have 
any reason to believe that Mr. Priestes bears any grudge against you? 

Mr. Fernandez. I do not. To reiterate — the last time I saw this man 
was the day we visited Secretary Stans' office. I had completely for- 
gotten him until this newsstory in the Miami Herald came out. 

Mr. Dorsen. I gather, then, you have no reason to shed — or no way of 
shedding any light on why Mr. Priestes might be testifying falsely 
against you, if he did so ? 

Mr. Fernandez. No, sir, I do not. 

INIr. Dorsen. Are you familiar with the provisions of title 18, sec- 
tion 611, which deals with soliciting contributions from a Government 
contractor ? 

Mr. Fernandez. I don't know if I am or not. 

Mr. Dorsen. If I may, I would like to read the section and ask you 
if you are or were familiar with it. 

Mr. Fernandez. Is that the Hatch Act, sir ? 

Mr. Dorsen. It is section 611 of title 18, which I will read to you. 
[Reading:] 

"Contributions by government contractors." Whoever (a) entering into any 
contract witli the United States or any department or agency thereof, either for 
the rendition of personal services or furnishing any material, supplies, or equip- 
ment to the United States or any department or agency thereof, or for selling 
any land or building to the United States or any department or agency thereof, 
in payment for the performance of such contract or payment for such material, 
supplies, equipment, land, or building, is to be made in vphole or in part from 



5402 

funds appropriated by the Congress, at any time between the commencement of 
negotiations for and the later of (1) the completion of performance under, or 
(2) the termination of negotiations for, such contract or furnishing of material, 
supplies, equipment, land or buildings, directly or indirectly, makes any contribu- 
tion of money or other thing of value, or promises expressly or impliedly to 
make any such contribution, to any political party, committee, or candidate for 
public office or to any person for any political purpose or use ; 

Or (b) knowingly solicits any such contribution from any such person for any 
such purpose during any such period ; shall be fined not more than $5,000 or im- 
prisoned not more than 5 years, or both. 

Now, were you familiar with that section during the events in 1972 ? 

Mr. Fernandez. No, sir, this is the first time I have ever come across 
that section in its entirety — for that matter, even partially. 

Mr. DoRSEN. That is my second question, then. You were not famil- 
iar with it when you spoke to members of the staff or gave testimony 
until this minute, is that correct? 

Mr. Fernandez. That is correct, sir. 

Mr. DoRSEN. Mr. Chairman, I have no further questions. 

Senator Baker. Thank you, Mr. Dorsen. 

Are there further questions ? 

If there are no other questions, Mr. Fernandez is excused. 

Thank you, Mr. Fernandez. 

There are no other witnesses before the committee and the commit- 
tee will stand in recess until 10 o'clock, Tuesday morning. 

[Whereupon, at 2 :35 p.m.. the committee recessed, to reconvene at 
10 a.m., Tuesday, November 13, 1973.] 



TUESDAY, NOVEMBER 13, 1973 

U.S. Senate, 
Select Committee on 
Presidential Campaign Activities, 

Washington^ D.G. 

The Select Committee met, pursuant to recess, at 10 :0G a.m., in room 
318, Russell Senate Office Jiuilding, Senator Sam J. P>vin, Jr., 
chairman. 

Pi-esent : Senators Talmadf^e, Inouye, Montoya, Baker, and Weicker. 

Also present: Samuel Dasli, chief counsel and staff director; Fred 
D. Thomixson, minority counsel; Rufus L. Edmisten, deputy chief 
counsel ; David M. Dorsen, assistani" chief counsel ; William T. Mayton, 
Ronald 1). Rotunda, l^)ajry Schochet, W. Dennis Summers, and Alan 
Weitz, assistant majority counsels; Donald (i. Sanders, deputy minoi-- 
ity counsel; Micliacl ]\Iadi<j:an, Richard Scliultz, and RolK'it Silver- 
stein, assistant minority counsels; fled .lolmson, investi<;atoi-; Pauline 
(). Dement, reisearch assistant; Kiler Ravidiolt, office of Senator 
Inouye; I^ruce Jaques, Jr., office of Senator Montoya; Ron McMahan, 
assistant to Senator Baker; A. Searle Field, assistant to Senator 
Weicker; Micliael Flani<raii, assistant i)ul)lications clerk. 

Senator Baker [presiding]. The committee will come to order. 

The chairman is necessarily absent attending another committee 
meeting this morning and will return later in the day. I nmst leave 
the hearings very shortly to attend a meeting of the (Commerce (Com- 
mittee in conjunction with the Northeast railioad legislation and other 
matters. Senator Inouye will preside in the absence of the chairman 
and the vice chairman. 

Counsel will call the first witnevSS. 

Mr. Dasti. Mr. Matthew E. Clark, Jr., the witness, is here. 

Will you stand and take the oath ? 

Senator Baker. AVould you hold up yoiu- right hand, please? 

Do you solemnly swear that the testimony you aic, about to give 
before this committee will be the truth, the whole truth, and nothing 
but the truth, so help you God ? 

Mr. Clark. I do. 

Senator Baker. You may be seated, sir. 

Mr. Dash. Mr. Clark; t see you are accompanied by counsel. Will 
counsel please identify himself for the record ? 

Mr. Gkeenebaitm. Leonai-d C. Greenebaum, Washington, D.C. 

Mr. Dash. Mr. Clark, do you have any preliminary statement which 
you wish to read or give to the committee ? 

(5403) 



5404 

TESTIMONY OF MATTHEW E. CLARK, JR., ACCOMPANIED BY 
LEONARD C. GREENEBAUM, COUNSEL 

Mr. Clark. No, I do not. 

Mr. Dash. What is your present position, Mr. Clark ? 

Mr. Clark. I am director of purchasing with the American Ship 
Building Co. 

Mr. Dash. Wliere are you located, your place of business ? 

Mr. Clark. Our corporate office is in Cleveland, Ohio, and our Am- 
ship Division, which I am affiliated Avith, is in Lorain, Ohio. 

Mr. Dash. Could you just briefly describe the nature of this corpora- 
tion, what the corporation engages in as a matter of business ? 

Mr. Clark. It is a major shipbuilding and ship repair corporation. 

Mr. Dash. Does it operate in various parts of the country ? 

Mr. Clark. Yes, in various divisions in Nashville, Tenn., and Cin- 
cinnati, Ohio. 

Mr. Dash. Do you have, or of your own knowledge, could you give 
us any idea as to the number of employees that the corporation has ? 
There is another witness on that. We can ask him that. 

Mr. Clark. Yes, I think so. 

Mr. Dash. How long have you personally been with the company, 
Mr. Clark? 

Mr. Clark. Since March of 1968. 

Mr, Dash. At that time — have you held this particular position 
during all this time ? 

Mr. Clark. No, my first position with the American Ship Building 
Co. was that of an estimator. Then I moved on to chief expeditor, then 
to director of purchasing. 

Mr. Dash. In your present position, could you briefly describe for 
the committee your duties? 

Mr. Clark. I am in charge of the purchasing functions of our Am- 
ship Division for the boats as well as inventory materials. 

Mr. Dash. What is your salary, Mr. Clark ? 

Mr. Clark. $16,300. 

Mr. Dash. That is an annual salary ? 

Mr. Clark. Yes. 

Mr. Dash. As part of your compensation, did you as a normal mat- 
ter receive bonuses from the company which you do keep for your own 
use? 

Mr. Clark. No. 

Mr. Dash. In 1972, during the Presidential campaign, did ,you re- 
ceive a bonus ? 

Mr. Clark. Yes. 

Mr. Dash. From the corporation ? 

Mr. Clark. Yes, I did. 

Mr. Dash. What was the size of that bonus? 

Mr. Clark. $5,000. 

Mr. Dash. Would you please briefly give the committee the details 
of how you received the bonus, and in that, who informed you about 
it and what did you expect to do with that bonus ? 

Mr. Clark, On April 6, I was called to Mr. Bartlome's office 

Mr. Dash, Who is Mr. Bartlome ? 

Mr. Clark. He is secretary of the corporation. 



5405 

Mr. Dash. Please continue. 

Mr. Clark. I was informed by him that I had a bonus of $5,000 
that I was to make out a check for $3,000 to a Committee To Re-Elect 
the President. 

Mr. Dash. Did he inform you as to who had informed him to tell 
you about this? 
Mr. Clark. No, he did not. 

Mr. Dash. Did you know or have you learned who set up the bonus 
plan? 
Mr, Clark. I cannot say. 

Mr. Dash. You do not have any knowledge or even hearsay knowl- 
edge? 

Mr. Clark. My contact was strictly with Mr. Bartlome. 
Mr. Dash. Through Mr. Bartlome ? 
Mr. Clark. Yes. 

Mr. Dash. Did you say you were to make one check? 
Mr. Clark. I beg your pardon. It was two checks, one for $3,000 
and one for $100. 

Mr. Dash. Do you know why you broke up the contribution for the 
Committee To Re-Elect the President into $3,000 and $100, two sep- 
arate checks? 

Mr. Clark. No, I received a slip of paper from Mr. Bartlome stat- 
ing the committee name and the amount to be made out. 
Mr. Dash. What date was this ? Did you say April 6 ? 
Mr. Clark. April 6. 

Mr. Dash. Were you told anything concerning whether or not that 
date, April 6, was relevant, why the contribution had to be made then? 
Mr. Clark. Yes; the intent of writing the check on April 6 was 
because of the disclosure law going into effect on April 7. 

Mr. Dash. So that having given the contribution on April 6 would 
mean that it did not have to be disclosed ? 
Mr. Clark. Yes. 

ISIr. Dash. Now, you have been provided by the committee staff 
with some exhibits and tabs. Would you look at exhibit 271-1 ? Could 
you identify this exhibit for the committee ? 

Mr. Clark. That is my check voucher for the bonus in 1972. 
Mr. Dash. And does it show that a payment of $5,000, and after 
deductions, a net pay of $3,700 ? 
Mr. Clark. Yes, it does. 

Mr. Dash. And it was from the $3,700 that you made the two checks, 
one a $3,000 check and one a $100 check, as a political contribution? 
Mr. Clark. Yes. 

Mr. Dash. That would leave some money left over. Tliat would be 
$3,100 from $3,700. Six hundred dollars left over. AVhat did you do 
with the other $600 ? Was this for your own use ? 

Mr. Clark. No ; it was not. There were some cash donations that I 
cannot recall at this time, the amounts or to whom. 

Mr. Dash. You say a cash donation. Did you deposit the original 
$3,700 in your own account ? 

Mr. Clark. Yes, sir. One amount of the cash I think was the amount 
of $300, was a check written to cash and deposited through the Amer- 
ican Ship Building Co. petty cash. 



5406 

Mr. Dash. You understood that to be used for other political contri- 
butions that would be made in cash ? 

Mr. Clark. Mr. Bartlome always informed me of the amounts of 
"^y^-^" whom. He kept the record of this. I did not 

Mr. Dash. Would you look at exhibit 271-2 ? Exhibit 271-2 appears 
to be a copy, a photocopy of two checks, one made out to Loyal Amer- 
icans tor Government Reform in the amount of $3,000 on your bank 
account signed by you, dated April 6. The other a check made out for 
stable Society Council for $100 on your bank account and signed bv 
^^^.^ ^^^- ^^'® *'^^se the two checks that you made out? 

Mr. Clark. Yes, they are. 

Mr. Dash. And you gave to Mr. Bartlome ? 

Mr. Clark. Yes, I did. 

Mr. Dash. By the way, if you look at exhibit 271-3, there is a photo- 

oTui^o^ ? P ^^ P'^P®^ ^^^^ ^^^ *^^^ *^'o committees on it— one, the 
stable Society Council, $100, and the other. Loyal Americans for Gov- 
ernment Reform $3,000. What is that slip ? How did you receive that ^^ 
Mr. Clark. This is the slip of paper that Mr. Bartlome gave me in 
order tor me to make out the correct amount and to the correct 
committee. 

Mr. Dash. So he really gave you that slip of paper to guide you 
and direct you as to which committees actually should receive the 
contributions ? 

Mr. Clark. Yes. 

Mr. Dash. Did you know that those committees were Committees To 
Re-Elect the President ? 
Mr. Clark. Yes. 

Mr. Dash. Did you receive any personal receipt for this contribu- 
tion ? 

Mr. Clark. No, I did not. 

Mr. Dash. And you made the contribution from the bonus which 
was, in fact, not a bonus for vou but a bonus to give political contribu- 
tions through these personal checks ? 

Mr. Clark. Yes, sir. 

Mr. Dash. And you gave that to Mr. Bartlome ? 

Mr. Clark. Yes. 

Mr. Dash. Do you know whether or not he in fact gave those checks 
to the Committe To Re-Elect the President ? 

Mr. Clark. I don't know personally if he did. 

Mr Dash. Did he ever report to vou that he did ? Did he ever tell 
you that he did? 

Mr. Clark. Yes. 

Mr. Dash. Now. without specifically indicating the nature of the 
political contributions, you have received similar bonuses at earlier 
times for political contributions from the company in the same pro- 
cedure that you have just indicated in this 1972 bonus. Is that true^ 

Mr. Clark. That is true. 

Mr. Dash. And again, these so-called bonuses were in fact not 
bonuses, but in fact, was monev from the corporation being eii^en to 
you in the form of a bonus which vou understood vou had to pay back 
in the form of a contribution, a political contribution ? 

Mr. Clark. Yes. 

Mr. Dash. And you in fact did that? 



5407 

Mr. Clark. Yes. 

Mr. Dash. "Were you aware as — well, I think you have answered the 
question. You were not aware as to who ultimately approved this bonus 
plan? 

Mr. Clark. No. 

Mr. Dash. You worked with Mr. Bartlome, you say ? 

Mr. Clark. Yes. 

Mr. Dash. Did you know that it was illegal for a corporation to 
make a political contribution out of corporate funds ? 

Mr, Clark. Not at first, very truthfully, but I have since learned. 

Mr. Dash. You have since learned ? 

Mr. Clark. Yes. 

Mr. Dash. Now, in August of 1973, were you interviewed by the 
Federal Bureau of Investigation or by agents of the Federal Bureau 
of Investigation, concerning your contribution to the reelection of the 
President ? 

Mr. Clark. I was. 

Mr. Dash. Prior to this interview, Mr. Clark, did you have a con- 
versation with Mr. Steinbrenner, the president of the corporation ? 

Mr. Clark. Yes ; I did. 

Mr. Dash. Could you briefly tell us what that meeting or conversa- 
tion was about ? 

Mr. Clark. Mr. Steinbrenner mentioned that the FBI would be 
interviewing us about our contributions and that Mr. Melcher, our 
corporate lawyer, would be talking to us about it further. 

Mr. Dash. Did he suggest that you meet with Mr. Melcher ? 

Mr. Clark. Evidently, he had already preplanned that Mr. Melcher 
would contact me. 

Mr. Dash. And did he contact you ? 

Mr. Clark. Yes ; he did. 

Mr. Dash. Did Mr. Steinbrenner say anything further to you about 
that? 

Mr. Clark. Just not to be concerned with it, it was routine. 

Mr. Dash. That this was a routine investigation, that you shouldn't 
be concerned about it ? 

Mr. Clark. Yes. 

Mr. Dash. Now% you did meet with Mr. Melcher. When did you 
meet with Mr. Melcher? How much before, how much prior to the 
meeting with the FBI agents ? 

Mr. Clark. I believe it was 3 or 4 days prior to my meeting with 
the FBI agents. I believe there was a weekend in between. 

Mr. Dash. All right, now, what, if anything, did INIr. Melcher tell 
you ? 

Mr. Clark. He told me that we would be questioned by the FBI and 
to tell them that my wife and I had decided on our own to donate the 
money to reelect the President. I mentioned to Mr. Melcher that I did 
not want to involve my wife and would not, but I would say that I 
had decided to do this. 

Mr. Melcher had in his possession previous statements by Mr. Bart- 
lome and Mr. Lepkowski. 

Mr. Dash. Mr. Lepkowski, an employe who also received a bonus 
for the purpose of making a political contribution ? 

Mr. Clark. That is what I imderstand. 



5408 

Mr. Dash. And he had in his possession statements from Mr. Bart- 
lome and Mr. Lepkowski, and these statements were given to the FBI ? 

Mr. Clark. Yes. 

Mr. Dash. They had already been interviewed by the FBI ? 

Mr. Clark. Yes. 

Mr. Dash. And you say Mr. Melcher had these in his possession ? 

Mr. Clark. Yes. 

Mr. Dash. Did he show them to you ? 

Mr. Clark. Just by holding them up in front of me and saying, "Re- 
ports by Mr. Lepkowski and Mr. Bartlome, and I want you, after we 
are through here, to go down and take a look at them to get an idea what 
they had said." 

Mr. Dash. And what impression did you get from that recommenda- 
tion? 

Mr. Clark. Well, the impression I got — he had mentioned that 
we should say that we gave the donation because of — because of Pres- 
ident Nixon's involvement in the shipping industry and to help the 
shipping industry to get an idea of what vein the other fellows had 
made the 

Mr. Dash. In other words, would it be fair to say, what he was sug- 
gesting to you was that your stories be the same, or approximately the 
same, that you were giving a voluntary contribution out of your own 
funds and that it was for President Nixon's reelection because of what 
he had done for the shipping industry ? 

Mr. Clark. Yes. 

Mr. Dash. Now, did you in fact go down and read Mr. Bartlome's 
and Mr. Lepkowski 's statements ? 

Mr. Clark. I went down and contacted Mr. Bartlome. He did not 
have this report there. I then went and saw Mr. Lepkowski. He did 
have his report. I did read it in Mr. Lepkowski's presence and returned 
it to him. 

Mr. Dash. Then were you interviewed by the FBI agents ? 

Mr. Clark. Yes, 

Mr. Dash. And did you in fact give the kind of statement that Mr. 
Melcher and Mr. Bartlome and Mr. Lepkowski indicated that you 
should give? 

Mr. Clark. Similar, yes. 

Mr. Dash. Now, if you look at exhibit 271-5, there is a — what ap- 
pears to be a handwritten copy of your statement. Is this the — will you 
look at it and could you identify it. 

Mr. Clark. Yes. 

Mr. Dash [continuing]. As the statement which you gave and it was 
put down in this form by the FBI agents ? 

Mr. Clark. Yes, it is. 

Mr. Dash. Do you want to read the statement for the committee? 

Mr. Cl.\rk [reading] : 

I, Matthew Edward Clark. Jr. make this free and voluntary statement to 
Ambrose P. Burke. .Tr. and Michael T. Hartley, who have identified themselves 
to me as .special agents of the Federal Bureau of Investigation. 

Agent Burke furnished me with an interrogation ; advice of rights from which 
I read, understood the meaning of. and executed the waiver section of this form. 

I have been employed by American Ship Building Company since March of 
1968. I am presently the director of purchasing and previously held positions 
of chief expediter and estimator. 



5409 

My salary in March of 196S when I began employment with this company was 
$8,600 and my present salary as of August 1973 is $16,300. 

In connection with bonuses received from American Ship Building Company 
I received none in 1968 and may have received one in both 1969 and 1970, but 
I am not sure of this. In the years 1971 and 1972 I recall receiving a bonus of 
about $5,000 each year. This bonus would be paid by regular payroll check and 
would be less deductions for taxes, et cetera. I cannot recall the exact net 
amount of these bonuses. 

In connection with stock options at American Ship Building Company, I have 
two options to purchase 500 shares of stock each, one option being in the range of 
.$21.00 per share and the other option at about $22.00 per share. These options 
will expire in 1975 or 1976 and to date I have not purchased any of the stock. 

During the early part of 1972, the exact period of time unrecalled, I discussed 
the presidential campaign mth many of my fellow employees. I felt that I wanted 
to contribute in some way to the reelection of President Nixon as I felt the 
shipping industry was profiting more since the passage of the Maritime Act of 
1970. I also feel that I hoped indirectly to bring to the attention of Mr. George 
Steinbrenner, chairman and chief executive officer of American Ship Building 
Company, that I was personally interested in the future of the shipbuilding 
industry by backing the Nixon administration which administration helped the 
industry. 

In particular, I recall speaking more with Mr. Robert Bartlome about making 
a contribution to assist in the reelection of President Nixon, in that I inquired 
of Mr. Bartlome how I would go about making a contribution. Mr. Bartlome 
said he would get a list of organizations connected with Nixon's reelection cam- 
paign and that I could choose one of the.se organizations to contribute to. I 
chose one of the organizations from a list provided me by Mr. Bartlome, how- 
ever. I cannot recall the name of the organization or committee, but do recall 
it had the word "Society" in it. 

I also learned sometime around February 1972 from Mr. Bartlome that I 
would be receiving a bonus, but I did not know the amount of the bonus or when 
I would receive it. 

In April of 1972 I wrote a check in the amount of $3,000, on my Cleveland 
Trust checking account payable to the committee mentioned above. I gave this 
check to Mr. Bartlome with the implied understanding that he would see the 
check arrived at its proper destination. 

Also in either late 1971 or early 1972 I purchased 2 tickets to a political din- 
ner to be held in Washington, D.C. 

Mr. Dash. By the way, in the face of your statement, this has nothing 
to do with the Presidential campaign of 1972 ? 

Mr. Clark. Yes. 

Mr. Dash. So that actually you have now arrived at the point of your 
statement to April 1972, you wrote a check in the amount of $3,000. 
That was to the committee — a committee of the Committee To Re- 
Elect the President ? 

Mr. Clark. Yes. 

Mr. Dash. Now, the balance of your statement which will go into the 
record 

Mr. Clark. Could you repeat your last question ? 

Mr. Dash. You began to get into a paragraph of your statement to 
the FBI dealing with tickets to a political dinner or something, and 
the question T asked was whether or not that part of your statement had 
anything to do with the Presidential campaign of 1972 ? 

Mr. Clark. I really cannot say. I really do not know. 

Mr. Dash. Well, if you do not know, you can read that paragraph. 
It may have. Is that what you are saying ? 

Mr! Clark. Yes. 

Mr. Greenebaum. He just does not know. 

Mr. Clark. I just do not know. 



24-650 O - 74 - 10 



5410 

Mr. Dash. Well, in any event, without having to go through the en- 
tire statement, there were other contributions your statement indi- 
cates you made based on the bonus received from the company. 

Mr. Clark. Yes. 

Mr. Dash. The statement, although not in total but in those parts 
dealing M-ith your desire to make a contribution to the Committee To 
Re-Elect the President, and for the purpose of supporting the Presi- 
dent for his position in the shipbuilding industry, and the fact that 
this was your own voluntary contribution ; this was a false statement 
that you were making to the FBI ? 

Mr. Clark. Yes. 

Mr. Dash. Now, did you later sign a statement claiming that the 
bonus was not connected to any political contribution but was actually 
a bona fide bonus given you for your work in the corporation ? 

Mr. Clark. Yes. I believe it was around April of 1972 — I beg your 
pardon. 

Mr. Dash. Actually, it is earlier rather than later that you signed 
that statement. What was 

Mr. Clark. Let me 

Mr. Dash. Do you want to read that ? 

Mr. Clark [continuing]. Let me correct that. It was April 1973. And 
1973 is when I received the certificate from Mr. Bartlome. 

Mr. Dash. Could you briefly tell the committee how that came about ? 
You said you received a certificate from Mr. Bartlome ? 

Mr. Clark. Mr. Bartlome called me to his office and said that I would 
like you to sign this. And I read it and I said something to him to the 
extent, you have got to be kidding, and he said, no, I would like you 
to sign it. 

Mr. Dash. All right. Now, would you look at exhibit 271-4 and will 
you identify the certificate under the heading "American Ship Build- 
ing Co.," as the certificate that Mr. Bartlome gave you and asked you 
to sign? 

Mr= Clark. Yes. 

Mr. Dash. Let me just read that brief certificate. [Reading:] 

The undersigned acknowledges that in the year 1972 he received a bonus for 
services rendered to the company in the amount of $5,000. 

The undersigned does hereby certify that the receipt of such bonus was in 
no manner, either directly or indirectly, conditioned upon or subject to the mak- 
ing by him of any contribution, whether charitable, political or otherwise. 

The undersigned does hereby further certify that at no time during the year 
1972 has any director, officer, or supervisory employee of the company or any 
of its subsidiaries or affiliates, directly or indirectly, directed, requested or sug- 
gested that I make contributions to any charitable or religious group or orga- 
nization or to any political organization or candidate, and that any contribu- 
tions so made by me during the year 1972 w^ere entirely voluntary and of my 
owTi choosing. 

Now, you said this — when you saw that language, is that the lan- 
guage about which you said "you have got to be kidding," to Mr. 
Bartlome ? 

Mr. Clark. Yes. 

Mr. Dash. But nevertheless he asked you to sign it and you did 
sign it. 

Mr. Clark. Yes. 

Mr. Dash. And you knew this was a false statement ? 

Mr. Clark. Yes. 



5411 

Mr. Dash. And, by the way, the date of that is December 30, 1972. 
Is that the date you actually sigrned that statement? 

Mr. Clark. No. It was signed in April of 1973 and Mr. Bartlome 
asked me to backdate it. 

Mr, Dash. This was backdated for the purpose of giving some 
legitimacy to that bonus and the contribution. 

Now, were you subpenaed to appear before the special grand jury 
sitting in Washington, D.C. ? 
Mr. Clark. Yes, I was. 

Mr. Dash. And when were you subpenaed to appear? 
Mr. Clark. I was subpenaed on Friday, August 31. 
Mr. Dash. And on what date were you to appear? Do you recall 
the date your appearance was called for ? 

Mr. Clark. At that time it was September 5. 

Mr. Dash. What did you do, Mr. Clark, when you received the 
subpena ? 

Mr. Clark. Immediately upon receiving the subpena I went to the 
phone and called Mr. Steinbrenner. Mr. Steinbrenner was not at home 
and I left word for him to call me back. My next stop was to call Mr. 
Melcher. I didn't have his home phone number, so I called Mr. Bart- 
lome. I told Mr. Bartlome that I had been subpenaed and I would like 
to have Melcher's phone number. He gave it to me and I called Mr. 
Melcher and told him that I had been subpenaed. 
Mr. Dash. And what did Mr. Melcher tell you ? 
Mr. Clark. He was surprised, I think, that I had been subpenaed 
and he told me not to worry about it, that if it came that we had to 
go he would definitely go with me. 

Mr. Dash. Now, on September 3, 1973, did you and Mr. Bartlome 
meet with Mr. Steinbrenner? 

Mr. Clark. Yes. That was Labor Day and Mr. Bartlome called me 
in the morning and said that Mr. Steinbrenner wanted to see me. 
Mr. Dash. And who else was present at that meeting? 
Mr. Clark. Present at the meeting were Mr. Bartlome, Mr. Lep- 
kowski, myself, and Mr. Steinbrenner. 

Mr. Dash. What were you told by Mr. Steinbrenner at that meeting ? 

Mr. Clark. Basically we were told that Mr. Steinbrenner would do 

everything in his power so we wouldn't have to go, that we should 

not worry about it, and be calm about it. It was a very short meeting. 

Mr. Dash. Did you say anything to Mr. Steinbrenner ? 

Mr. Clark. Later on Mr. Bartlome — we all left that particular 

office. 

Mr. Dash. Prior to leaving, do you recall saying to Mr. Stein- 
brenner at that time that you would not perjure yourself before the 
grand jury? 

Mr. Ci^^RK. This is what I am driving at. We all left that office 
and went into another office, Mr. Lepkowski and I did, and later 
Mr. Steinbrenner followed. At that time Mr. Lepkowski and I both 
told Mr. Steinbrenner that we would not perjure ourselves, that we 
would tell the truth to the grand jury. 

In fact, Mr. Lepkowski had his FBI statement present and said he 
couldn't abide with everything that was in that statement. 

Mr. Dash. Now, prior to the September 5 scheduled grand jury 
appearance what occurred ? Did you have to appear before the grand 
jury personally on September 5 ? 



5412 

Mr. Clark. No. On September 4 we knew that Mr. Melcher was in 
Washington trying to delay our appearance and we were expecting 
a phone call from him one way or another. We then got the under- 
standing, about 5 :30 that night, that he had not been successful in 
postponement and we all were prepared then to go to Washington 
the next morning. About 10 :45 that night Mr. Robert Dibble of our 
corporation called me and in essence told me that four people were 
going and four people weren't going the next day. And I was one 
of the ones that was riot going. Mr. Bartlome was not going. Mr. Kissel 
was not going. 

Mr. Dash. Now, at this time were you continuously being assured 
that you shouldn't worry, that you would not be called before the 
grand jury? 

Mr. Clark. Well, at this time, at the meeting on September 3, I 
had told Mr. Steinbrenner that I had this piece of paper that said I 
had to be there and I sure would like a piece of paper saying I don't 
have to be there. 

Mr. Dash. You didn't get such a piece of paper, did you ? 

Mr. Clark. No. 

Mr. Dash. Was the grand jury September 5 appearance for any- 
body, a postponement ? 

Mr. Clark. Yes. Four of the fellows did go down and our appear- 
ance before the grand jury was postponed to September 18. 

Mr. Dash. September 18 ? 

Mr. Clark. Yes. 

Mr. Dash. Now, did you and others meet with Mr. Steinbrenner 
the day after the — on Thursday, September 6 ? 

Mr. Clark. Yes. 

Mr. Dash. Could you tell us who attended that meeting? 

Mr. Clark. On September 6 around — a little after lunchtime the 
following met with Mr. Steinbrenner: Mr. Dibble, Mr. Bartlome, 
Mr. Lepkowski. Mr. Walker, Mr. Stafford, and myself. 

Mr. Dash. And, by the way, were those the employees who had re- 
ceived a bonus and made political contributions out of them? 

Mr. Clark. Yes. 

Mr. Dash. Now, what was the purpose of the meeting and can you 
briefly tell us what was discussed at the meeting? 

Mr. Clark. Yes. Mr. Steinbrenner called the meeting to announce 
to us that Mr. Williams, an attornev in Washington 

Mr. Dash. Is that Edward Bennett Williams ? 

Mr. Clark [continuing]. Yes. And Mr. Lawless were going to be 
in on the case now and that Mr. Williams' group would help consider 
the nature of the activity of our appearance. During that meeting it 
got to be kind of lighthearted because we were now postponed and it 
was some relief that we didn't have to go. Mr. Steinbrenner mentioned 
that he had wanted to go before the grand jury or before the com- 
mittee — the prosecuting committee, then the Cox committee — as did 
previous companies, such as American and Braniff, I think are the 
names he mentioned. He wanted to do that but he was advised not to. 

I mentioned to Mr. Steinbrenner again, as others did, that we — if 
we had to go we would tell the truth. We felt sorry for that because 
we had to go back directly to Mr. Bartlome. It came about in some 
confusing words that Mr. Steinbrenner thought, that we thought. 



5413 

that he did not have concern for us and there were some words between 
he and Mr. Tjepkowski about this. 

At that time he said, I think Mr. Steinbrenner said, "Don't worry 
about it," and I said, "I wish you would stop using that statement." 

Mr. Dash. Were you worrying about it, by the way ? 

Mr. Clark. Yes. We were very worried about it and we were getting 
a little upset about it then because we could not see any particular 
path that we were following. 

I had mentioned to him ; before, Mr. Melcher told me not to worry 
about the FBI report, Mr. Melcher told me not to worry when I got 
subpenaed, he told me not to worry because I did not have to answer 
a grand jury subpena, and he told me not to worry about having to go 
down at all. I said, all I can see is me standing with my face behind 
bars and Mr. Melcher telling me not to worry about it. At that time, 
we all laughed about it and the phone rang and it was Mr. Melcher. 
George turned to me with his hand cupped over the phone and said, 
"Matt, it is your friend." I said, "tell him not to worry about 
anything." 

Mr. Dash. On the next day, September 7, you saw Mr. Steinbren- 
ner again. Did he offer you or did he ask you to take any time off ? 

Mr. Clark. Well, during that meeting — at the tail end of that meet- 
ing — it was getting into the newspapers quite readily now about this, 
and so on, and we were quite concerned about our families and our 
children. So I said to Mr. Steinbrenner — he said to all of us, he said : 
"Why don't you all take an extended weekend and go away for the 
weekend?" This would have been Friday. Some of us discussed it and 
then finally, I decided to myself, yes, I would go. 

I said, well, I am going down to get some expense money, and Mr. 
Steinbrenner said, no, don't do that. 

Mr. Dash. You would be getting expense money from the corpora- 
tion, corporation money ? 

Mr. Clark. Yes. 

Mr. Dash. What did he say to you ? 

Mr. Clark. He said no, don't do that. He had gotten some money and 
he said, here, take this. 

Mr. Dash. How much did he give you ? 

Mr. Clark. I received $200. 

Mr. Dash. Did you learn that any other employee 

Mr. Clark. This was in the presence of Mr. Walker and he also of- 
fered it to Mr. Walker. In the beginning, Mr. Walker refused to take 
the money, but then, as we further discussed, he did take the money. 

Mr. Dash. Did Mr. Lepkowski receive $200, too ? 

Mr. Clark. Mr. Lepkowski told me he was offered the money but he 
did not take it because he did not plan on going anywhere that 
weekend. 

Mr. Dash. Did he offer that money in the form of a loan to you ? 

Mr. Clark. It is difficult to say. I had just paid all my bills and I 
was going to go away for the weekend and I did not have any cash to 
do it, so I decided to go down and get expense money to cover the ex- 
penses, and he said no, take this. 

Mr. Dash. So he gave it to you. Did you make up your own mind at 
that time that you were going to pay him back ? 

Mr. Clark. Somewhat, yes. 



5414 

Mr. Dash. As a matter of fact, did you actually have a letter in- 
structing payroll to make payroll deductions to allow you to have that 
money paid back ? 

Mr. Clark. Yes; I did, but Mr. Steinbrenner, said, take this now 
and go and have a good weekend for your family, because they have 
been through a lot and they should not have to be through all this, 
so take them away. 

Mr. Dash. If you look at exhibit No. 271-6 of the exhibits, on the 
letterhead of the American Ship Building Co., a letter dated Septem- 
ber 26, 1973, a letter to Mr. — I take it Lepkowski 

Mr. Clark. Yes. 

Mr. Dash [continuing]. Stamped, "Please deduct $25 from pay- 
check for the next eight pay periods for a total of $200. The $200 
should be credited to the account of George M. Steinbrenner III," with 
your name. 

Did you in fact go through or implement that payroll deduction 
plan? 

Mr. Clark. No ; I did not. 

Mr. Dash. So you did not pay the money back, and I understand 
that you did not because you thought the money really was given to 
you because of the hardship that was provided for your family during 
this time. 

Mr. Clark. I had found out subsequently that the — I had thought 
that the other fellow had paid it back. Therefore, I had proceeded to 
make out this form. I later found out that he did not pay it back, so 
I decided not to. 

Mr. Dash. On September 11, 1973, did you and others meet with a 
lawyer recommended to you, a lawyer by the name of — known as 
Judge Lawless ? 

Mr. Clark. Yes. 

Mr. Dash. Who was at the meeting ? 

Mr. Clark. There was Mr. Melcher, Mr. McMahon, Clifford Roth, 
Ronald Slater, myself, Mr. Bartlome, Mr. Lepkowski, Mr. Walker, 
Mr. Kissel, and Mr. Stafford. 

Mr. Dash. And again, aside from Mr. Melcher, who was counsel 
for the corporation, the others were employees like yourself who had 
been given bonuses and made political contributions from the bonuses? 

Mr. Clark. No ; there was— our corporate counsel was there. 

Mr. Dash. That was Mr. Melcher ? 

Mr. Clark. No ; Mr. Roth. 

Mr. Dash. Mr. Roth ? 

Mr. Clark. And also Mr. Slater was there — I do not believe he was 
in the same category. 

Mr. Dash. All right. Now, did Judge Lawless, Mr. Lawless, indicate 
to you that he was acting as your lawyer during this meeting? 

Mr. Clark. No; he did not. He said he was there only to advise us 
and he was not acting as our counsel. 

Mr. Dash. What in fact did he advise you ? What did he tell you ? 

Mr. Clark. Well, we had a general discussion. We then had found 
out about the statute 1001, which came as a great surprise to all of us. 

Mr. Dash. How did you find out about that? This is title 18, U.S.C. 
1001, which generally deals with making false statements to a Federal 
agency and is a felony under the Federal Penal Code. How did that 
come to your attention ? 



5415 

Mr. Clark. As I got off the elevator in the corporate office, Mr. Staf- 
ford came up to me and said, "I think we have got a little problem 
here. I have been told earlier this morning by Judge Lawless that our 
statement made to the FBI was to be considered under oath." 

At that time, or subsequently, in the meeting, Judge Lawless got 
in to explain what he had meant by telling that to Mr. Stafford earlier 
in the morning. 

Mr. Dash. Did you resolve the discussion at that meeting as to 
whether or not your statements were in violation of title 18 U.S.C. 
1001? 

Mr. Clark. Not really. 

Mr. Dash. Did this add to your concern, by the way ? 

Mr. Clark. Most certainly. 

Mr. Dash. Did Mr. Lawless talk about anything else with you ? Did 
he give you other advice? Did he evaluate your situation for you? 

Mr. Clark He went through and told us, I think it came up about 
immunity, and he explained to us the general procedures on getting im- 
munity, and mentioned that perhaps our FBI statements were not com- 
plete, or we now recall a little more than what we had before. 

At that time, I got my FBI report and said to him, no, Judge Law- 
less, I lied on this report, because now we were getting somewhat up- 
set — I mean the eight fellows — because there seemed to be no ends tied 
together and we wanted people to understand that we were going to 
tell the truth. I explained to him that my statement was not totally 
correct. 

Mr. Dash. Did he suggest at that time that you should have your 
own counsel, or have counsel representing you ? 

Mr. Clark. Yes. 

Mr. Dash. Now, after this meeting, did you meet with Mr. Stein- 
brenner ? 

Mr. Clark. Yes; I returned to Lorain and Mr. Steinbrenner was 
there and I talked with him briefly, mentioned to him that we had had 
a meeting with Mr. Lawless and some more things came to light. He 
had mentioned generalizations as to types of contributions and what- 
not. 

Mr. Dash. I don't understand what you just said, "he mentioned 
generalizations of the types of contributions." 

Mr. Clark. Well, Judge Lawless was telling us in that meeting of 
the types, that our contribution was kind of like a gray area and that 
the people that had given cash were in a black area and other people 
that had given other types of contributions were in a white area. 

Mr. Dash. In other words, you were being advised as to the prior- 
ities of impropriety that were involved in the various transactions and 
that your activity was a sort of gray area, is that it ? 

Mr. Clark. Yes. 

Mr. Dash. And you reported this back to Mr. Steinbrenner ? 

Mr. Clark. Yes. All through this meeting with Judge Lawless, he 
did say if we must appear before the grand jury, we are definitely, 
without doubt, to tell the truth and the whole truth. 

Mr. Dash. Did you tell Mr. Steinbrenner at this meeting what you 
were going to do ? 

Mr. Clark. No ; I don^ believe so. I don't recall. 

Mr. Dash. Did he ask you to do anything, what he wanted you to do ? 

Mr. Clark. No. 



5416 

Mr. Dash. Did he tell yoii what he had wanted to do ? 

Mr, Clark. Oh, yes. He had mentioned that all along, he wanted to 
go forward and talk to the committee as did American and Braniff. 

Mr. Dash. And what had prevented him from doing so ? 

Mr. Clark. He was advised by legal counsel not to. 

Mr. Dash. Did you retain your own counsel ? 

Mr. Clark. In a roundabout way, he was retained by Mr. Melcher. 

Mr. Dash. Is this present counsel who is with you now ? 

Mr. Clark. Yes. 

Mr. Dash. By the way, who is paying the fee of your counsel ? 

Mr. Clark. In a meeting we had at our attorney's office, Mr. Melcher 
mentioned that the corporation would take care of all the fees in- 
volved. 

Mr. Dash. Was there any understanding on your part that on the 
basis of the corporation paying your fees, either your testimony before 
the grand jury or before any other body, would be affected by that? 

Mr. Clark. No. 

Mr. Dash. In other words, you were telling eveiybody that you were 
going to tell the truth as you knew it ? 

Mr. Clark. Yes. 

Mr. Dash. Did the company, however, seek to obtain an indemnity 
agreement from you for the payment of fees should impropriety or 
illegality result from your testimony ? 

Mr. Clark. Yes. 

Mr. Dash. Did you agree to enter into such indemnity agreement? 

Mr. Clark. Immediately, I sent the agreement off to our attorneys, 
who advised us not to sign it. 

Mr. Dash. And you have not signed it ? 

Mr. Clark. That is correct. 

Mr. Dash. Did you meet with the special prosecutor's staff ? 

Mr. Clark. Yes.'^ 

Mr. Dash. Do you know when you had that meeting ? 

Mr. Clark. We met Avith the special prosecutor staff on IMonday 
evening, September 17. 

Mr. Dash. At that time, did you agree to cooperate with the special 
prosecutor's force and give testimony that would be truthful testimony 
concerning these events ? 

Mr. Clark. I did. 

Mr. Dash. Were you offered immunity ? 

Mr. Clark. I was. 

Mr. Dash. Did you in fact testify before the grand jury ? 

Mr. Clark. I did. 

Mr. Dash. When did you testify before the grand jury ? 

Mr. Clark. Tuesday, September 18. 

Mr. Dash. Is the testimony that you have given here today before 
the committee the testimony that you have given to the grand jury? 

Mr. Clark. Yes. 

Mr. Dash. I have no further questions, Mr. Chairman. 

Senator Inoiti'e [presiding]. Mr. Thompson. 

Mr. Thompson. Mr. Chairman, Mr. Richard Schultz, assistant 
minority counsel, will question this witness. 

Senator Inouye. Mr. Shultz. 



5417 

Mr. ScuuLTz. Mr. Clark, would you describe for us the conversa- 
tion when Mr. Bartlome first solicited the contribution and explained 
the bonus plan to you ? 

Mr. Clark. It is ver^' vague, because this conversation took place 
in 1970. 

Mr. ScHULTz. When in 1970? 

Mr. Clark. I do not recall. I just knew from that conversation that 
the bonuses I was to receive were for political purposes only, that I 
could not use them for my own personal expenses. 

Mr. ScHULTz. Does Mr. Bartlome have authority to grant bonuses ? 

Mr. Clark. No, I don't believe so. 

Mr. ScHULTz. Who does? 

Mr. Clark. I believe Mr. Steinbrenner does. 

Mr. ScHULTz. What is your relationship with Mr. Steinbrenner? 

Mr. Clark. Well, I am an employee of the American Ship Building 
Co. I have known Mr. Steinbrenner for some years. 

Mr. ScHULTZ. In what capacity ? 

Mr. Clark. Well, he is a sports enthusiast and I played sports, 
played football, and knew him casually from that. 

JNIr. ScnuLTz. "Wlien you say played football, you mean you grew 
up in the same community ? 

Mr. Clark. Yes, we grew up in the same community. 

Mr. ScHULTz. Is there any question in your mind that, in fact, Mr. 
Steinbrenner was the moving force behind the bonuses and political 
contributions ? 

Mr. Greenebaum. Are you asking him to speculate, Mr. Schultz ? 

Mr. Schultz. I am asking him if there is any question in his mind. 
He stated before that he dealt specifically only with Mr. Bartlome, 
but I am asking him if in his mind, he knows the moving force behind 
this ? 

Mr. Clark. I cannot say. I cannot answer that properly. 

Mr. Schultz. Well, does Mr. Steinbrenner delegate a lot of author- 
ity in the company ? 

Mr. Clark. There is delegation of authority, yes. 

Mr. Schultz. Then are you saying that it is conceivable that Mr. 
Bartlome was delegated authority to grant these bonuses and that 
Mr. Steinbrenner would have no knowledge ? 

Mr. Clark. No, I don't believe that is true. 

Mr. Schultz. Then it is a fair statement to say that you believe 
Mr. Steinbrenner knew about the bonuses and/or approved them ? 

Mr. Clark. Yes, I would say so. 

Mr. Schultz. Did vou receive a bonus in September of 1970 ? 

Mr. Clark. Yes, I did. 

Mr. Schultz. Was this bonus gfranted for the specific purpose of 
raising money for campaign contributions ? 

Senator Inouit^.. I would like to interrupt at this point. Is this a 
contribution for the Presidential election of 1972 ? 

Mr. Schultz. I don't know ; I am merely trying to establish the 
number of bonuses that Mr. Clark received. 

Mr. Clark. Would vou repeat the question, please ? 

Mr. Schultz. I believe my question was: What was the amount of 
the bonus in 1970 ? 

Mr. Clark. In 1970, it was $5,000. 



5418 

Mr. ScHTJLTZ. Did you receive a bonus in 1971, November of 1971? 

Mr. Cl.\rk. Yes, I did. 

Mr. ScHULTz. "V\liat was the gross amount of this bonus ? 

Mr. Clark. The same, $5,000. 

Mr. ScHULTz. And you received a bonus on April 6 of 1972. TVliat 
was the gross amount of this bonus ? 

Mr. Clark. $5,000. 

Mr. ScHULTZ. What was the net amount of each of these three 
bonuses ? 

Mr. Clark. $3,700. 

Mr. ScHULTz. So from September of 1970 through April 6 of 1972, 
you received a net total am.ount of $11,100, is that correct ? 

Mr. Clark. Yes. 

Mr. ScHULTZ. And out of that $11,100 ; you contributed $3,100 to 
the two committees for the Committee To Re-Elect ? 

Mr. Clark. Yes. 

Mr. ScHULTz. Mr. Clark, are you aware of any other techniques that 
were used to raise campaign contributions by the company ? 

Mr. Clark. Yes, there was a time when Mr. Bartlome came to me 
and asked me to make out false expense reports. 

Mr. ScHULTz. When was this ? 

Mr. Clark. It was in 1973, 1 believe it was February 1973. 

Mr. ScHULTz. Sometime in 1973 ? 

Mr. Clark. Early 1973. 

Mr. ScHULTz. Did these false vouchers result in cash fund ? 

Mr. Clark. Very truthfully, I just turned over the expense voucher 
to Mr. Bartlome. I don't know what he did with it. 

Mr. ScHULTz. To your knowledge, were any of these funds used for 
the Presidential campaign of 1972, to clear up debts? 

Mr. Clark. Not to my knowledge. 

Mr. ScHULTz. Thank you. I have no further questions. 

Senator Inouye. Mr. Clark, I just have a few questions here for 
clarification. 

Did Mr. Steinbrenner at any time ask you to make this contribution 
to the Committee To Re-Elect the President ? 

Mr. Clark. No, he did not. 

Senator Inouye. Did he ever discuss this contribution with you prior 
to your making it ? 

Mr. Clark. No, he did not. 

Senator Inouye. I recall in your testimony, you indicated that Mr. 
Steinbrenner had told you that he wanted to go to the special prosecu- 
tor? 

Mr. Clark. Yes. 

Senator Inouye. Did he go to the special prosecutor? 

Mr. Clark. Not to my knowledge. 

Senator Inouye. And I believe you testified that he did not because 
of advice of someone? Who advised him not to go, sir? 

Mr. Clark. Well, most of the time when Mr. Steinbrenner made this 
statement he would say his attornevs, although I do think on one 
occasion he did mention the name of Mr. Melcher and Mr. INIcMahon. 

Senator Inouye. So it is your testimony that at no time did Mr. 
Steinbrenner request, direct, or ask you to make this contribution? 

Mr, Ci^vRK. Correct. 



5419 

Senator Tnouye. Thank you very much. 

Senator Weicker. 

Senator Weicker. I have no questions. 

Senator Inouye. Senator Montoya. 

Senator Montoya. No questions. 

Senator Inouye. Counsel. . 

Mr. Dash. I have no further questions of the witness, Mr. Chairman. 

Senator Inouye. Mr. Clark, thank you very much, sir. 

[Recess.] 

Senator Inottye. The hearing will please come to order. 

Counsel will call the next witness. 

Mr. Dash. Mr. Robert Bartlome. 

Senator Inouye. Mr. Bartlome. will you please rise and raise your 
right hand, sir ? Do you swear that the testimony you will give to this 
select committee will be the truth, the whole truth, and nothing but 
the truth, so help you God ? 

Mr. Bartlome. I do. 

Senator Inouye. Thank you very much, sir. 

Mr. Dash. INIr. Bartlome, you are accompanied by counsel and coun- 
sel is the same counsel who has already identified himself for the 
record with Mr. Clark. Do you have aiiy statement, Mr. Bartlome, 
that you wish to read or give to the committee in advance of your 
testimony ? 

TESTIMONY OF ROBERT BARTLOME, ACCOMPANIED BY LEONARD 
C. GREENEBAUM, COUNSEL 

Mr. Bartlome. No ; I do not. 

Mr. Dash. "What is your present position, Mr. Bartlome ? 

Mr. Bartlome. I am secretary of American Ship Building Co. 

Mr. Dash. And how long have you been with the company ? 

Mr. Bartlome. Since 1965. 

Mr. Dash. Did you hold this position as secretary with the company 
during that period of time ? 

Mr. BarttvOme. No ; since 1968. 

Mr. Dash. All right. What position did you start at? 

Mr. Bartlome. I started in the planning department, programing, 
assistant secretary, gradually promoted to secretary. 

Mr. Dash, What salary do you now earn as secretary to the corpo- 
ration ? 

Mr. Bartlome. $27,500. 

Mr. Dash. Could you briefly describe your duties as secretary ? 

Mr. Bartlome. Well, everything pertaining to the board of direc- 
tors' meetings, minutes of the American Ship Building Co., and all of 
our subsidiaries, stockholders information, correspondence. 

Mr. Dash. Now, as part of your compensation in addition to your 
salary, did you regularly receive bonuses from the corporation which 
you were to keep for your own use ? 

Mr. Bartlome. No. 

Mr. Dash. In fact, did you receive specific bonuses, especially one 
in 1972 from the company? 

Mr. Bartlome. Yes. 



5420 

Mr. Dash. Could you briefly tell the committee how and when you 
learned about the bonus program, from whom, and what the program 
was? 

Mr. Bartlome. It started back in 1970 in a meeting with Mr. Stein- 
brenner and Mr. Lepkowski and I. 

Mr. Dash. Will you just speak a little slower so we can all hear you ? 

Mr. Bartlome. OK. I said there was a need to 

Mr. Dash. This meeting was with Mr. Steinbrenner and — Mr. 
Steinbrenner is — what position does he hold in the corporation ? 

Mr. Bartlome. Chairman and chief executive officer. 

Mr. Dash. Who else was there ? 

Mr. Bartlome. Mr. Stanley J. Lepkowski. 

Mr. Dash. "What was his position ? 

Mr. Bartlome. Treasurer and controller. 

Mr. Dash. Please tell us what happened at that meeting. 

Mr. Bartlome. There was a need to make contributions. 

Mr. Dash. Who was speaking ? 

Mr. Bartlome. Mr. Steinbrenner. He suggested that Mr. Lepkowski 
and I develop a list of half a dozen or so trusted employees to whom 
we could grant bonuses, the net of which would be held for further 
distribution as contributions. 

Mr. Dash. When you speak of contributions you mean political 
contributions ? 

Mr. Bartlome. These were all political contributions. 

Mr. Dash. Now, did you arrange — were you the person that was 
going to implement the program? 

Mr. Bartlome. Yes. 

Mr. Dash. And did you arrange to implement their program and 
provide bonuses for political use of corporate funds to certain 
employees ? 

Mr. Bartlome. Yes. 

Mr. Dash. Did you keep records, Mr. Bartlome, of these trans- 
actions ? 

Mr. Bartlome. Yes ; I did. 

Mr. Dash. What did the record contain? Will you describe basically 
what was in the records ? 

Mr, Bartlome. Basically, it was a sheet for each of the eight in- 
dividuals involved that had their name, gross amount of the bonus, tax 
withheld, net amount of the bonus, and the date and the amount and 
the person, the recipient of each of the contributions. 

Mr. Dash. Now, if you look at exhibit 271-7, this is not part of the 
record that you just — in other words, you have with you — the staff has 
provided your counsel a series of documents that are bound together 
with tabs. And if you look at exhibit 271-7, could you identify the 
document or the exhibit in exhibit 271-7 ? 

Mr. Bartlome. It is the payroll register of American Ship Building 
Co., dated April 6, 1972, for the bonuses that were granted on that date. 

Mr. Dash. And how many bonuses does this payroll register show? 

IVfr. Bartt.ome. Nine. 

Mr. Dash. And all in the amount of $5,000; is that true? 

Mr. Bartlome. Eight of them were in that amount. 

Mr. Dash. Oh, that is right. Eight in the amount of $5,000 and one 
to Mr. Baumhart in the amount of $2,325.17. Is there a snecial reason 
why that particular bonus was that particular amount? 



5421 

Mr. Bartlome. I am not aware of it. 

Mr. Dash. Was that, too, a bonus given for political purposes? 

Mr. Bartt^ome. Not that I know of. 

Mr. Dash. All right. Then the eight that are shown, the eight each 
of $5,000, these were all given to the various employees listed in that 
payroll register for the purpose of political contributions. 

Mr. Barti.ome. Yes, sir. 

Mr. Dash. And, therefore, a total of $40,000 in bonuses. 

Mr. Bartloivie. Gross. 

Mr. Dash. That was the gross. And the net pay to them amounted 
to what ? 

Mr. Bartlome. $26,200. 

Mr. Dash. Now, what led up to the giving of these particular 
bonuses ? 

Mr. Bartlome. In a meeting with Mr. Steinbrenner in his office in 
which Mr. Steinbrenner, Mr. Lepkowski and I were present, he said 
there was a need to make a contribution of $25,000. 

Mr. Dash. He wanted you to arrange for a contribution of $25,000, 
from the employees. 

Mr. Bartlome. Yes. 

Mr. Dash. And using the bonus program you arranged to have these 
eight, $5,000 bonuses given to the employees, is that true ? 

Mr. Bartlome. Right. 

Mr. Dash. Now, would you look also at that same exhibit No. 271-7 
and one of the last— the last two pages, you will see— I take it these 
are eight checks. Are these the checks— can you identify the checks as 
the checks which were given to the employees showing the net amount 
of bonus to each 

Mr. Bartlome. Yes. 

Mr. Dash [continuing.] To each of the employees? 

Mr. Bartlome. The payroll checks. 

Mr. Dash. Payroll chex^ks, and they represent the net amount of the 
$5,000 after you take regular payroll deductions, is that true? 

Mr. Bartlome. Right. 

Mr. Dash. Now, when you gave these bonuses to each of the em- 
ployees who are identified both in the payroll register and on these 
checks, how did these employees know what committees to make out 
a check for in the Committee To Re-Elect the President ? 

Mr. Bartlome. I received a list of committees from Mr. Stein- 
brenner. 

Mr. Dash. You showed them this list ? 

Mr. Bartlome. No. 

Mr. Dash. We have already had some testimony just prior to your 
testimony, from Mr. Clark and he testified he received a set of papers 
from you which had the names of two committees on it and he made 
out his check to those two committees. Was this the procedure you 
followed with the other employees ? 

Mr. Bartlome. Yes. 

Mr. Dash. And you took the names of the committees off the list you 
had? 

Mr. Bartlome. Right. 

Mr. Dash. You knew these to be committees for the reelection of 
the President ? 



5422 

Mr. Baktlome. Yes. 

Mr. Dash. Now, did all the employees who received bonuses, these 
particular employees who appear on this exhibit, on the payroll regis- 
ter, on the checks, who received these bonuses give you a check or 
checks back for a particular committee for the reelection committees? 

Mr. Bartlome. Yes, for a total of $25,000. 

Mr, Dash. There was a balance left over ? 

Mr. Bartlome. Yes. 

Mr. Dash. And what was done with the balance ? 

Mr. Bartlome. Other contributions. 

Mr. Dash. Did this become part of the cash fund ? 

Mr. Bartlome. Other contributions. 

Mr. Dash. What did you do with these checks that you received from 
the employees who are now sort of kicking back the checks for political 
contributions ? 

Mr. Bartlome. I received from Mr. Steinbrenner a name of an agent 
in Washington and an address and phone number to which I was hav- 
ing a courier deliver these checks along with his personal contribution. 

Mr. Dash. Do you now recall the name of the person you received 

Mr. Bartlome. The name of the person was Mr. Kalmbach. 

Mr. Dash. Mr. Herbert Kalmbach ? 

Mr. Bartlome. I believe so. 

Mr. Dash. And do you now recall the address that the checks were 
to be sent to ? 

Mr. Bartlome. 1701 Pennsylvania. 

Mr. Dash. And do you know what offices are at 1701 Pennsylvania 
Avenue ? 

Mr. Bartlome. The office of the committees 

Mr. Dash. The Committee To Ke-Elect the President. 

Mr. Bartlome. Yes, sir. 

Mr. Dash. Now, if you look at exhibit 271-11, exhibit 271-11 is an 
affidavit by Ronald H. Slater. Who is Ronald H. Slater ? 

Mr. Bartlome. He is a corporate vice president, works in the admin- 
istration department, American Ship Building Co. 

Mr. Dash. Was Mr. Slater the courier who took the checks to the 
Committee To Re-Elect the President ? 

Mr. Bartlome. Yes, he was. 

Mr. Dash. And this is an affidavit, without reading it in its complete 
form, which attests to the fact that he did take the checks to the 
committee. He flew to Washington and that in the last paragraph, that 
April 7, 1972, he says : 

I went to my office in the Lorain Office Building and advised Mr. Bartlome that 
the gentleman to whom I was to deliver the envelope had not been there and 
I left the envelope with a lady in this office. While in Mr. Bartlome's office this 
morning Mr. Bartlome called Washington and talked to the gentleman to whom 
I was to deliver the envelope and that gentleman told him that everything was in 
order. 

Now, in fact, is that what occurred ? 

Mr. Bartlome. In fact, I placed the call and the gentleman was not 
there but the call was later returned. I do not remember if he identi- 
fied himself or not. But he told 

Mr. Dash. You are not sure whether you talked to Mr. Kalmbach ? 

Mr. Bartlome. Right. 



5423 

Mr. Dash. You did talk to somebody and the somebody you talked 
to at the telephone of the Committee To Re-Elect the President in- 
dicated everj^thing was in order, that he received the checks ? 
Mr. Bartlome. Right. 

Mr. Greenebaum. Mr. Dash, in fairness to Mr. Slater, could the 
record also reflect as his affidavit indicates, that he did not know 
the contents of the envelope ? 

Mr. Dash. Yes. I am sorry. I did not mean by trying to expedite the 
reading of the affidavit to leave out any important information. Yes. 
The affidavit does indicate that he did not know the contents of the 
envelope. 

Mr. Greenebaum. Thank you, sir. 

Mr. Dash. Now, if you look at exhibit 271-12, Mr. Bartlome, you 
will notice that — will you identify exhibit 271-12 for us? 

Mr. Bartlome. It is the company's long distance telephone log for 
April 7, 1972, wherein I placed through the operator a call to 
"Washington. 

Mr. Dash. And does it show that the person asked for was a Mr. 
Kalmbach ? 

Mr. Bartlome. It appears that way. 

Mr. Dash. It says — it actually is spelled C-a-1-m-b-a-k, or some- 
thing, but it is probably phonetically spelled. 

Mr. Bartlome. Right. 

Mr. Dash. Reading Kalmbach, And the number, 333-0920 would 
be the number of the Committee To Re-Elect the President. 

Mr. Bartlome. [Nods in affirmative.] 

Mr. Dash. So in fact you did make the call — you had a confirma- 
tion that the contributions had been received. Now, what was the total 
amount sent ? 

Mr. Bartlome. $100,000. 

Mr. Dash. Now, how did it come to be $100,000? You collected 
$25,000 through the bonus arrangement to the employees. Who made 
up the balance of $75,000 ? 

Mr. Bartlome. Mr. Steinbrenner gave me his personal contribution 
of $75,000 which was to accompany the $25,000 from the eight 
employees. 

Mr. Dash. Was that a personal check from Mr. Steinbrenner? 

Mr. Bartlome. I believe it was 25 checks for $3,000 each. 

Mr. Dash. That is right. The contributions were all in the amount 
of $3,000 each, were they not ? 

Mr. Bartlome. Right. 

Mr. Dash. Did Mr. Steinbrenner ever receive a bonus in the amount 
of $75,000? 

Mr. Bartlome. In 1970. 

Mr. Dash. And that was considerably before this particular con- 
tribution. 

Mr. Bartlome. A year and a half. 

Mr. Dash. Do you recall Mr. Steinbrenner ever receiving any other 
bonus? 

Mr. Bartlome. Not prior to this time. 

Mr. Dash. So the only bonus that you are able to testify to was the 
1970 bonus of $75,000 ? 

Mr. Bartlome. Right. 



5424 

Mr. Dash. And it happens to be the same amount that Mr. Stein- 
brenner did contribute of his own personal funds in the amount of 
$75,000 which made up the total contribution of $100,000. 

Was this the amount that you understood the committee expected 
the company to give ? 

Mr. Bartlome. I dj d not know the reason for it. 

Mr. Dash. Did anyone question this program that was set up by 
Mr. Steinbrenner when it w^as originally set up ? 

Mr. Bartlome. Only one. Mr. Lepkowski questioned it. 

Mr. Dash. What did he say ? In what way did he question it ? 

Mr. Bartlome. I believe he wanted to know w^hether it was appro- 
priate to do this. Mr. Steinbrenner advised him that many corpora- 
tions in the United States do it in this manner, or in a similar manner. 

Mr. Dash. Now, you testified that you kept records of the trans- 
actions where bonuses were given, checks were received back for 
political contributions, and indicating who, in fact, received these 
contributions. Mr. Bartlome, what happened to your records? 

Mr. Bartlome. One day — it was in my office — Mr. Steinbrenner was 
shown the records for some reason ; I don't recall the reason. Later, 
he contacted Mr. Lepkowski and a meeting was scheduled that after- 
noon. He asked Mr. Lepkowski to bring any records that we might 
have at Lorain which would show the bonuses and the distribution 
of the bonuses and the dates. 

Mr. Dash. Do you recall about when this was that you were asked 
to turn these records over to Mr. Lepkowski and he took them over 
to Lorain and to Mr. Steinbrenner ? 

Mr. Bartlome. To the best I can recall, it was April of 1973. 

Mr. Dash. Do you knoAv what happened to those records ? 

Mr. Bartlome. Mr. Lepkowski advised me that Mr. Steinbrenner 
destroyed the records. 

Mr. Dash. Did you personally receive a bonus in 1972 ? 

Mr. Bartlome. Yes. 

Mr. Dash. You are one of those who received a $5,000 bonus ? 

Mr. Bartlome. Yes. 

Mr. Dash. And you made out a check to a committee? 

Mr. Bartlome. Yes. 

Mr. Dash. If you will look at exhibit 271-8 — it is a photocopy of 
a check drawn on a joint account to the Dedicated Americans for 
Effective Government, April 6, 1972. in the amount of $3,000. signed 
by you. Is that the check that you made out ? 

Mr. Bartlome. Yes. 

Mr. Dash. And is the Dedicated Americans for an Effective Govern- 
ment one of the committees on your list of the Committee To Re-Elect 
the President ? 

Mr. Bartlome. Yes. 

Mr. Dash. How w^as the gross amount of $40,000 in bonuses kept on 
the corporate books ? 

Mr. Bartlome. That was an expense charged to an OSS researcher 
claim. 

Mr. Dash. And you say expense — it was treated as a business 
expense? 

Mr. Bartlome. Yes. 



5425 

Mr. Dash. In January 1973, when some questions were being asked 
about the bonuses, did Mr. Steinbrenner direct you to arrange a "legiti- 
mate bonus payment plan" ? 

Mr. Bartlome. We issued a bonus in January 1973, which was not 
for contributions. 

Mr. Dash. These were not for political contributions ? 

Mr. Bartlome. Right. 

Mr. Dash. Would it be fair to say that these were being issued for 
what would be called cosmetic purposes ? 

Mr. Bartlome. I believe so. 

Mr. Dash. Mr. Steinbrenner then was concerned about the fact that 
these bonuses, that had been given to employees, and kickbacks as 
political contributions might cause a problem ? 

Mr. Bartlome. I don't know the reason. 

Mr. Dash. Were you then asked to prepare a corporate record of the 
bonuses to show that they were for business purposes ? 

Mr. Bartlome. Yes. 

Mr. Dash. Will you look at exhibit 271-9? Is that the memo that 
you prepared for that purpose ? 

Mr. Bartlome. Yes ; it is. 

Mr. Dash. It is dated April 5, 1972. It is a memo to the file. It is on 
paper with the printed, "American Ship Building Co." on it. It states : 

Mr. George M. Steinbrenner III today determined that the Amship division had 
performed in an extraordinary manner and determined that the following receive 
the bonuses approved in the November 11, 1971, Board of Directors meeting. 

It lists Mr. Bartlome, Mr. Lepkowski, Mr. Cushenan, Mr. Kissel, 
Mr. Clark, Mr. Stafford, Mr. Walker, Mr. Dibble, and Mr. Baumhart. 
Except for Mr. Baumhart, the others were all for $5,000, right? 

This in effect was a false memo to the file, was it not ? 

Mr. Bartlome. Right. 

Mr. Dash. Were you also asked to prepare certificates or statements 
to be signed by the recipients of these bogus bonuses which alleged 
that they were bona fide and not connected with any political 
contribution ? 

Mr. Bartlome. I didn't prepare the statements. I was asked to have 
them signed. 

Mr. Dash. Do you know who prepared the statements? 

Mr. Bartlome. Mr. Melcher. 

Mr. Dash. And he gave them to you and asked you to have them 
signed. Signed by whom ? 

Mr. Bartlome. By the gentlemen who received the bonuses in 1972 
and 1973. 

Mr. Dash. Did you, in fact, distribute these to the various persons 
and have them sign them ? 

Mr. Bartlome. Yes, I did. 

Mr. Dash. If you will look back at exhibit 271^, we have already 
had testimony from Mr. Clark. He apparently retained his certificate, 
which we read into the record, indicating that this contribution was a 
bona fide one, made voluntarily of his own choosing, and that nobody 
had asked him to make any political contributions. Do you recognize 
that and identify that as a certificate ? 

Mr. Bartlome. That is a certificate. 



24-650 O - 74 - 11 



5426 

Mr. Dash. And that similar or identical certificates were given tc 
all the other persons ? 

Mr. Bartlome. True. 

Mr. Dash. These were, in fact, false certificates. 

Mr. Bartlome. Yes. 

Mr. Dash. In August, did you learn that agents of the Federal 
Bureau of Investigation wanted to interview you about political 
contributions ? 

Mr. Bartlome. Yes- 

Mr. Dash. Did you discuss this with Mr. Steinbrenner ? 

Mr. Bartlome. We discussed it a couple of days prior to the inter- 
view — approximately April 19. 

Mr. Dash. Wliat, if anything, did Mr. Steinbrenner tell you about 
this interview that you were about to have ? i 

Mr. Bartlome. He related a story to us which is the basis of my 
testimony. 

Mr. Dash. What story did he relate to you ? 

Mr. Bartlome. That the group in Lorain had met ; had determined 
that they wanted to make contributions to the Committee To Re-Elect 
the President ; that we had approached Mr. Steinbrenner, asking him 
if there was a manner in which we could make a contribution, and 
were told if it was a small contribution, to do it locally ; if it was a 
large contribution, he would furnish us the names of committees, and 
that the money could be delivered in Washington. 

Mr. Dash. Did you, in fact, give this kind of statement to the agents 
of the FBI? 

Mr. Bartlome. Yes, I did. 

Mr. Dash. Would you look at exhibit 271-10? This appears to be 
a statement dated Auarust 23, 1973, Lorain, Ohio, a statement at the end 
of which it is attested : "I have read the statement consisting of this and 
six other pages. Initialed each page and each correction. This state- 
ment is true and correct to the best of my recollection." 

It is signed by Robert E. Bartlome. 

Is this the statement or a copy of the statement that you gave to 
the FBI? 

Mr. Bartlome. Yes, it is. 

Mr. Dash. Without going into a full reading of the statement, in es- 
sence, does the statement incorporate the story that Mr. Steinbrenner 
had talked to you about, the fact that this was a voluntary contribu- 
tion and that you were giving it out of your own funds? 

Mr. Bartlome. Yes. 

Mr. Dash. In effect, this was a false statement ? 

Mr. Bartlome. Yes. 

Mr. Dash. Did you show this statement to any of the other em- 
ployees ? 

Mr. BartIvOme. We exchanged statements among us after we — 
Mr. I^pkowski and I — had been interviewed. 

Mr. Dash. What was the purpose of exchanginsr the statements ? 

Mr. Bartlome. Well, there were questtions and inquiries on the 
parts of the other six, since thev had not been interviewed at that time. 
They wanted to know what was asked and how we answered them. 

Mr. Dash. As a matter of fact, in between vour interview and some 
of the others, you had discussions and meetings with some of these 
other employees who had received bonuses? 



5427 

Mr. Bartlome. Not scheduled meetings. 

Mr. Dash. Not scheduled meetings but 

Mr. Bartlome. But many meetings. 

Mr. Dash. Was there a general agreement that you would all be 
giving the same story ? 

Mr. Bartlome. I believe so. 

Mr, Dash. And they were shown these statements so that they could 
give consistent statements themselves ? 

Mr. Bartlome. Right. 

Mr. Dash. By the way, did you see any of the statements that some 
of these employees gave to the FBI ? 

Mr. Bartlome. Only Mr. Lepkowski's. 

Mr. Dash. Is it true that each of the employees who gave statements 
made a copy of the statement that he gave ? 

Mr. Bartlome. Yes. 

Mr. Dash. Now, did you learn that the employees who had been in- 
volved received subpenas to testify before the special grand jurv in 
Washington, D.C. ? 

Mr. Bartlome. Yes. 

Mr. Dash. When did you learn that, by the way — approximately ? 

Mr. Bartlome. August 31. 

Mr. Dash. Did you receive a call from Mr. Steinbrenner on August 
31,1972? 

Mr. Bartlome. Yes, I did. 

Mr. Dash. And later met with him ? 

Mr. Bartlome. Yes. 

Mr. Dash. Could you briefly tell us about that meeting? 

Mr. Bartlome. He told me that Mr. Clark had received a subpena 
and was to appear before the grand jury on September 5 ; that we prob- 
ably all would be receiving subpenas, but we would not have to go be- 
fore the grand jury. 

He again recalled the story which was basically the same as in the 
FBI interview statement. 

Mr. Dash. In other words, in this meetin,g, he restated to you in his 
own words the so-called story, the fact that there was a meeting and 
that all the employees had on their own decided to give contributions 
for the reelection of the President and out of their own funds? 

Mr. Bartlome. Yes. 

Mr. Dash. What did you say to Mr. Steinbrenner at that time, if 
anvthing? 

Mr. Bartlome. It was my feeling from the conversations with these 
gentlemen that they would not perjure themselves if they went before 
the grand jury. 

Mr. Dash. Did you say anything about what you would do? 

Mr. Bartlome. I said I would not perjure myself. 

Mr. Dash. Did you again meet with Mr. Steinbrenner on September 
1, which was the very next day ? 

Mr. Bartlome. Yes. 

Mr. Dash. Was there anything particular of note in that conversa- 
tion? 

Mr. Bartlome. Same conversation. 

Mr. Dash. Same thing. Mr. Steinbrenner again sort of renewing his 
recollection, or at least what he would like it to be, of the story told to 
you? 



5428 

Mr. Bartlome. His recollection of what happened on the granting of 
bonuses. 

Mr. Dash. Did you dispute that with him or did you understand 
that to be an effort just to try to get the story straight ? 

Mr. Bartlome. At one of the meetings here in the next 2 or 3 days, 
I did discuss with him Avhat I felt to be the truth. 

Mr. Dash. Apparently on Labor Day, there was a meeting about 
which we have already heard testimony from Mr. Clark. You attended 
that meeting ? 

Mr. Bartlome. Yes. 

Mr. Dash. That was September 3. Who else was there ? 

Mr. Bartlome. Mr. Clark, Mr. Lepkowski, and myself. 

Mr. Dash. This was a meeting with Mr. Steinbrenner ? 

Mr. Bartlome. Yes, it was. 

Mr. Dash. Can you briefly tell us what was discussed, what Mr. 
Steinbrenner said and what was said by others at the meeting, includ- 
ing yourself? 

Mr. BartTjOMe. I told him I could not testify as to the accuracy of the 
FBI statement; that the rest of the fellows would not perjure them- 
selves, and we were told : "Don't worry, you won't have to go before the 
grand jury." 

Mr. Dash. In other words, Mr. Steinbrenner told you, you don't have 
to worry about anvthing; you won't have to go before the grand jury ? 

Mr. Bartlome. That is right, 

Mr. Dash. What was your state of mind at that time? Did that 
satisfy you? 

Mr. Bartlome. No. 

Mr. Dash. Were you, in fact, worried ? 

Mr. Bartlome. Absolutely. 

Mr. Dash. Did you, after that meeting or shortly after that meeting, 
meet with Mr. Clark and Mr. Lepkowski in a parking lot ? 

Mr. Bartlome. Yes, we did. 

Mr. Dash. Wliat was the purpose of that ? 

Mr. Bartlome. To discuss our conversations that we had had with 
Mr. Steinbrenner. We sort of agreed that the only wav to go was to 
tell the truth. 

Mr. Dash. Was the grand jurv appearance, wliich I understand was 
set originally for September 5, 1973, postponed ? 

Mr. Bartlome. It was postponed for 2 weeks. 

Mr. Dastt. Do you know to Avhen it Avas postponed? I think the 
record would show that it was September 18. 

Mr. Barti^me. September 18. 

Mr. Dash. Yes. 

Now, prior to the September 5 date, when the original grand jury 
appearance was set, did vou meet with Mr. Steinbrenner on Septem- 
ber4? 

Mr. Barti.ome. Yes, I did. 

Mr. Dash. Who else was there ? 

Mr. Bartt>omk. Mr. Lepkowski, Mr. McMahon. nnd Mr. Melcher. 

Mr. Dash. "\Yliat did Mr. Steinbrenner say at that meeting? 

Mr. Bartt.ome. Basically, he related the same recollection as to how 
the contributions were made and why thev were made : that they were 
larsre and small — ^how thev would be made and distributed. He re- 



5429 

membered that on the bonus list there were only two of the gentlemen, 
,not the eight ; and that verj' likely he would recollect there would be 
payment of the bonus up to April 6 — authorizing payment up to 
April 6. 

Mr. Dash. What did you say at that meeting ? 

Mr. Bartlome. I told him that this was not the way it was handled, 
and I again mentioned at this meeting that the gentlemen — it was my 
fooling they would not perjure themselves but would tell the truth 
bo fore the grand jury, 

Mr. Dash. Now, did Mr. Steinbrenner react to that when — in fact, 
did somebody at that meeting say, "Finally, we learned the truth"? 

INIr. Bartlome. That was the following meeting with Mr. McMahon 
and Mr. Melcher. 

Mr. Dash. Was Mr. Steinbrenner at that meeting ? 

Mr. Bartlome. The same date. 

Mr. Dash. Mr. Steinbrenner was at that meeting ? 

Mr. Bartlome. Yes, he was. 

Mr. Dash. And did Mr. Steinbrenner make any statement of reaction 
to the fact that the truth might come out ? 

Mr. Bartlome. I was questioned my Mr. McMahon and related to 
him what I felt was the true story, and he said something to the effect, 
"Well, now we have finally learned the truth." 

Mr. Dash. And what did Mr. Steinbrenner say ? 

Mr. Bartlome. Mr. Steinbrenner was distraught, and I believe he 
did not change his recollection of what happened at that time. 

Mr. Dash. Is it correct, do you recall, that he laid his head on the 
desk and said he was ruined, the company might be ruined, and he 
mentioned something about jumping off a bridge ? 

Mr. Bartlome. That was in the meeting without Melcher and 
McMahon upstairs in his office — between him and me. 

Mr. Dash. Now, on September 6 there was a meeting of all em- 
ployees with Mr. Steinbrenner. Apparently there were meetings during 
this period of time almost on a daily basis ? 

Mr. Bartlome. Hourly basis. 

Mr. Dash. On an hourly basis. 

I take it you were being told, as Mr. Clark has testified, that you 
should not worry ; and these hourly meetings indicated, I take it, you 
were worrying? 

Mr. Bartlome. Yes. 

Mr. Dash. What took place on the September 6 meeting with all 
the employees involved with Mr. Steinbrenner? 

Mr. Bartlome. They weren't all there. There were about six of them 
there, and a couple of them advised Mr. Steinbrenner that they could 
not testifv that the FBI statement was the truth. I believe Mr. Kissel 
and Mr. Cushenan were not at the meeting. 

Mr. Dash. Did Mr. Steinbrenner make any other statements at that 
point? Was that the meeting in which he mentioned that another 
lawver was going to be coming in and coordinating the matter? 

Mr. Bartlome. Yes. 

Mr. Dash. He said Mr. Edward Bennett Williams ? 

Mr. Bartlome. Judge Lawless would be in the meeting. 

Mr. Dash. Judge Lawless. 



5430 

You again met with Mr. Steinbrenner September 9, and was this 
another meeting in which he was recalling the facts as he had been 
doing continuously ? 

Mr. Bartlome. The same recollection. 

Mr. Dash. Now, we have heard testimony about a meeting with 
Judge Lawless who is an attorney — former judge — and this was on 
September 11. Did you attend that meeting? 

Mr. BARnqLOME. Yes, I did. 

Mr. Dash. And who else was there at that meeting ? 

Mr. Bartlome. Well, it was quite a group. 

Mr. Dash. Well, again, was this the involved group, would you say? 

Mr. Bartlome. Yes. 

Mr. Dash. Could you tell us briefly what the purpose of that meet- 
ing was ? 

Mr. Bartlome. Mr. Lawless was trying to advise us as to what was 
happening down here in Washington. He was trying to explain how 
we got all the — he advised us he was not counseling or advising us 
on what to do. 

Mr. Dash. In other words, he was not indicating that he was acting 
as your lawyer ? 

Mr. Bartlome. Right. 

Mr. Dash. Just giving you some friendly advice ? 

Mr. Bartlome. He gave us friendly advice and said we should not 
perjure ourselves, and the penalty for perjury was far more severe 
than other crimes. 

Mr. Dash. Did he indicate you were in any serious problem ? 

Mr. Bartlome. No, he did not. 

Mr. Dash." As a matter of fact, did he sort of put your particular' 
contributions in any priority form, or did that come out in any dis- 
cussion of that nature ? 

Mr. Bartlome. Well, he described ours as being gray — not either 
black or white. We were gray. 

Mr. Dash. Did any discussion come up about possibly getting im- 
munitv or what procedures one would follow to get immunity? 

Mr. Bartt^ome. I don't recall. 

Mr. Dash. Was there any discussion that you should best have* 
counsel ? 

Mr. Bartlome. Yes. 

Mr. Dash. Was there any discussion concerning postponement or 
delav? 

Mr. Bartlome. The postponement we had received from the grand 
jury, the 2-week postponement, was the best thing we could do until 
wo had received legal counsel. 

Mr. Dash. Your own legal counsel? 

Mr. Bartlome. Right. 

Mr. Dash. Now, in fact you did obtain counsel. Will you tell us how 
you went about obtaining counsel? 

Mr. Bartlome. We were sent on to Washington on Saturday, Sep- 
tember 15. We went to a law firm who advised us there might be some 
conflict of interest and several of the group, I believe eiflfht, were 
sent over to the law firm of Sachs, Greenebaum. We gave them brief 
statements. They advised us that since Mr. Lepkowski and I were 
officers of the company, there might be some conflict between us and 






5431 

'the other six, and it would be best if the two of us would try and 
obtain separate le^al counsel. 

Mr. Dash. And did you? 

Mr. Bartlome. On Monday, the I7th, around 4 o'clock, we did. 

Mr. Dash. And what counsel was that ? 

Mr. Bartlome. Wilmer, Cutler & Pickering. 

Mr. Dash. And did you meet with the Special Prosecutor shortly 
after that? 

Mr. Bartlome. Met with him on Wednesday, the 19th. 

Mr. Dash. And did you agree at that time to cooperate with the 
Special Prosecutor? 

Mr. Bartlome. Yes. 

Mr. Dash. And tell the true stories concerning these events? 

Mr. Bartlome. Yes. 

Mr. Dash, And were you offered immunity? 

Mr. Bartlome. Yes. 

Mr. Dash. And in fact were you granted immimity? 

Mr. Bartlome. Yes. 

Mr. Dash. Did you in fact testify before the grand jury ? 

Mr. Bartlome. The same day. 

Mr. Dash. And did you testify to the grand jury to the same fact 
you testified today before this committee ? 

Mr. Bartlome. Yes. 

Mr. Dash. Mr. Chairman, I have no further questions. I think for 
the record it should be stated that — both with Mr. Bartlome and also 
Mr. Clark — their testimony before this committee has also been given 
under a grant of immunity signed by Judge Sirica at the application 
of our committee by unanimous vote of the committee, and that the 
testimony that they have given today is coA-ered by this grant of im- 
munity. Also, what I would like to do, all the exhibits 271-1 through 
271-12 having been referred to, Mr. Chairman, I would like to have 
them identified for the record as they have been during the testimony 
and introduced in evidence. 

Senator Inotiye. Without objection, so ordered. 

[The documents referred to were marked exhibits Nos. 271-1 
through 271-12.*] 

Mr. Dash. I have no further questions. 

Senator Inouye. Mr. Schultz. 

Mr. Schultz. Mr. Bartlome, I direct your attention to your tele- 
phone conversation on or about April 6 or 7 confirming that the checks 
had, in fact, been received at 1701 Pennsylvania. I take it that your 
testimony is that you were not absolutely certain that you talked to 
Mr. Kalmbach, but someone, in fact, received the check; is that 
correct ? 

Mr. Bartlome. I don't know who I talked to. Some gentleman. 

Mr. Schultz. Did the gentleman that you talked to give any indica- 
tion that he knew that the checks represented a contribution from cor- 
porate funds ? 

Mr. Bartlome. No, sir. 

Mr. Schultz. To your knowledge, does any Republican official know 
that the contributions — or did they at that time know that these con- 
tributions were made by the use of corporate funds ? 

♦See pp. 5767-5794. For more detailed description and location of individual exhibits, 
see contents page vii. 



5432 

Mr. Bartlome. I don't believe so. 

Mr. ScHULTz. In your conversation with Mr. Steinbrenner just prior 
to the bonus for $25,000 or the raising of $25,000 through the bonus 
scheme, did he indicate to you who had made the request for funds, if 
anyone ? 

Mr. Bartlome. He did not. 

Mr. ScHULTz. Did he indicate to you any promises had been made to 
induce this contribution ? 

Mr. Bartlome. No. 

Mr. ScHULTz. Did he indicate to you that he had been threatened or 
coerced to raise this money ? 

Mr. Bartlome. No. 

Mr. Schtjltz. I would like to go back now to 1970, when the bonus 
scheme first developed. Can you describe for us the conversation that 
you had with Mr. Steinbrenner and Mr. Lepkowski? How did this 
come about ? 

Mr. Bartlome. It was a meeting in Mr. Steinbrenner's office with 
Lepkowski and myself; Mr. Steinbrenner stated that he was under 
pressure to make contributions. 

Mr. Schtjltz. Did he say by whom ? 

Mr. Bartlome. No, he did not. He suggested that we develop a list 
of loyal employees who would participate in this plan. 

Mr. Schultz. And did he direct you to implement this program ? 

Mr. Bartlome. Yes. 

Mr. Schultz. And did you, in fact, tell each employee of their bonus, 
how much they were to contribute, and to whom ? 

Mr. Bartlome. Yes ; I did. 

Mr. Schultz. Did you tell each employee that you were doing this 
at the direction of Mr. Steinbrenner ? 

Mr. Bartlome. I can't recall that. 

Mr. Schultz. Do you think you told some of them ? 

Mr. Bartlome. Yes. 

Mr. Schultz. Do you have authority to grant bonuses or sign the 
authority for bonuses to be granted ? 

Mr. Bartlome. No. 

Mr. Schultz. Who does have that authority ? 

Mr. Bartlome. Mr. Steinbrenner. 

Mr. Schultz. Does anybody else have that authority ? 

Mr. Bartlome. No. 

Mr. Schultz. When was the first bonus issued ? 

Mr. Bartt^me. September 27, 1970. 

Mr. Schultz. Was there any other bonus issued in September 1970 ? 

Mr. Bartlome. Yes, there was. 

Mr. SciHH.TZ. There was another bonus besides the one on Septem- 
ber 27, 1970? 

Mr. Bartlome. It is not in the file, but I believe there was, and it 
was charged to the U.S. Coast Guard claim. 

Mr. Schultz. Was Mr. Steinbrenner granted a bonus in October 
of 1970? 

Mr. Bartlome. Yes, he was. 

Mr. Schultz. What was the amount of the bonus ? 

Mr. Barti^me. It was two bonuses: One for $37,500 in 1970 and, 
one for $37,500 in fiscal 1971. 



5433 

Mr. ScHULTz. Isn't it a fact that these bonuses were paid on October 
9 and October 12, 1970? 

Mr. Bartlome. Yes. 

Mr. ScHULTz. You told Mr. Dash a little earlier that subsequent to 
the bonus scheme and in April of 1973 you entered "false statements 
to the file" — I believe were your words — concerning the bonuses that 
had been granted. 

Mr. Bartlome. April 1973. 

Mr. ScHULTz. April of 1973. In connection with Mr. Steinbrenner's 
bonus, did you enter any memorandums into the files or change any of 
the record ? 

Mr. Bartlome. Yes. 

Mr. ScHULTZ. As secretary of the company, did you sit in on the 
corporate meetings? 

Mr. Bartlome. Yes, I did. 

Mr. ScHULTz. Was Mr. Steinbrenner's bonus granted by the board 
of directors or by action of the board of directors ? 

Mr. Bartlome. Yes, it was. 

Mr. ScHULTz. Did you write the minutes for this meeting ? 

Mr. Bartlome. Yes. 

Mr. ScHULTZ. Is this the change that you referred to just a minute 
ago? 

Mr. Bartlome. Yes. 

Mr. ScHULTz. What change did you make? 

Mr. Bartlome. Well, we deleted the words that it was granted for 
the effective settlement of a U.S. Coast Guard claim and changed it 
to read : "For the effective operation of the company during the year 
just ended." 

Mr. ScHULTz. Why was this change made ? 

Mr. Bartlome. I do not know. 

Mr. Sghultz. Wlio directed you to make the change ? 

Mr. Bartlome. Mr. Steinbrenner. 

Mr. Shultz. Was the change made at the direction of the board 
of directors ? 

Mr. Bartlome. No. 

Mr. ScHULTz. Mr. Steinbrenner directed you to change the minutes ? 

Mr. Bartlome. Yes. 

Mr. ScHULTZ. What was the gross amount of the September 27, 1970, 
bonus ? 

Mr. Bartlome. $30,000. 

Mr. ScHULTz. What was the net amount ? 

Mr. Bartlome. $19,750. 

Mr. ScHULTz. What was the gross amoimt of the bonus in Novem- 
ber 1971 ? 

Mr. Bartlome. $25,000. 

Mr. ScHTTLTz. What was the net amount of that November bonus? 

Mr. Bartlome. $16,530. 

Mr. ScHULTZ. What was the gross amount of the April 6 bonus? 

Mr. Bartlome. $42,325. 

Mr. ScHULTz. AVhat was the net amount of this bonus? 

Mr. Bartlome. $26,200. 

Mr. Schultz. I don't know if you have added it up. What was the 
total amount of the bonus — the gross amount ? 



5434 

Mr. Bartlome. The ^ross amount was approximately $97,000. The 
net amount was approximately $62,000. 

Mr. SciiuLTZ. Out of tlie $62,000 net amount, was the $25,000 sent 
to the Committee To Re-Elect the only contribution made to the 1972 
Presidential campaign ? 

Mr. Bartlome. As far as I know. 

Mr, ScHULTz. Did Mr. Steinbrenner ever direct you in how to 
answer inquiries of the FBI ? 

Mr. Bartlome. He did not direct me "how." 

Mr. ScHULTZ. Will you explain how you gained an inference of 
what he wanted you to say ? 

Mr. Bartlome. In the meeting that I had 2 days prior to the FBI 
interview, he related the story which I took to be an inference and 
that is the basis for my testimony. 

Mr. Schultz. What did he tell you ? 

Mr. Bartlome. He told me that the group in Lorain had had several 
meetings out there and we had determined to make a contribution; 
that I came to Mr. Steinbrenner and asked him the best manner in 
wliich we were to make a contribution. He told me that if the con- 
tribution was small it was to be included in the local Republican 
Party. If it Avas large, he would furnish us the list of committees and 
the contribution would be made in Washington. 

Mr. Schultz. Did you subsequently ride in the car with Mr. Lep- 
kowski and Mr. Steinbrenner on your way to the grand jury, at which 
time this story was repeated ? 

Mr. Bartlome. Yes. 

Mr. Schultz. What did he tell you specifically ? 

Mr. Bartix)me. It was on Wednesday, September 5. He related the 
same story that he had in the past. He asked us if we could live with 
this story, everything would be all right, because we were not going 
before the grand iviry anyway. 

Mr. Schultz. Did he state to you in the September 5 meeting what 
your relationship should be with him at this point ? 

Mr. Bartlome. He said there should be a separation between us. 

Mr. Schultz. Wliat did he mean by that? 

Mr. Bartlome. I do not know. 

Mr. Schultz. Did he further clarify what he meant by that? 

Mr. Bartlome. No, he did not. 

Mr. Schultz. Mr. Bartlome, do you have knowledge of another 
technique employed by the American Ship Building Co. to raise 
moneys for the purpose of making campaign contributions ? 

Mr. Bartlome. Yes, sir. ■ 

Mr. Schultz. What is that ? I 

Mr. Bartlome. Early in 1973, several of us issued expense reports, 
the net of Avhich were reserved for contributions. 

Mr. Schultz. How many employees were involved ? 

Mr. Bartlome. Three or four. 

Mr. Schultz. I take it that the employees submitted a false voucher 
and received cash for it ; is that correct ? 

Mr. Bartlome. Received a false voucher and the cash was stored in 
the cashier's office. 

Mr. Schultz. What was the total amount of money raised in this 
way? 



i 



5435 

I Mr. Bartlome. Approximately $1,800. 

' Mr. ScHULTz. To your knowledge, was any of this money disbursed 

"or the Presidential campaign in 1972 ? 

Mr. Bartlome. No. 

Mr. SciiuLTz. Thank you. 

I have no further questions, Mr. Chairman. 

Senator Inouye. I have just one question, Mr. Bartlome. Did Mr. 
5teinbrenner elaborate upon the word "need" ? 
j Mr. Bartlome. No ; he did not. 

I Senator Inouye. In your testimony, you said there was a need to 
make a contribution. 

Mr. Bartlome. No. He advised me that there was pressure for con- 
:ributions, but did not elaborate. 

Senator Ixouye. Did he say where the pressure was coming from ? 

Mr. Bartlome. No, he did not. 

Senator Inouye. Thank you very much. 

Senator Weicker. 

Senator Weicker. No questions, Mr. Chairman. 

Senator Inouye. Senator Montoya. 

Senator Montoya. Mr. Bartlome, in your summary which is on file 
3efore the committee, it is indicated that you are also vice president 
ind director of the Lorain-Elyria Sand Co., secretary and a director 
3f the Cincinnati Sheet Metal & Eoofing Co., the Nashville Bridge 
Co., Kinsman Marine Transit Co., Great Lakes International Corp., 
Great Lakes Association, Inc., and Biogest Corp. Are any of these 
5ubsidiaries of American Ship Building Co. ? 

Mr. Bartlome. All but the first one, yes. 

Senator Montoya. Were they tapped for any bonuses which in turn 
were used for political contributions ? 

Mr. Bartlome. Not that I am aware of. 

Senator Montoya. Did you receive any bonuses from these com- 
panies ? 

Mr. Bartlome. No, sir. 

Senator Montoya. Did American Ship Building or any of these com- 
panies receive any subsidies from the Government under the shipbuild- 
ing subsidy program ? 

Mr. Bartlome. We are building ships under the title 11 insurance 
program. 

Senator Montoya. Were any subsidies received by the company ? 

Mr. Bartlome. I do not understand the question, Senator. 

Senator Montoya. Was there any subsidy received by American Ship 
Building or any of these companies from the Government under the 
shipbuilding subsidy program ? I do not recall what title or what law 
it is. 

Mr. Barti^ome. I do not know. 

Senator Montoya. Were you building any ships for the Federal 
Government? 

Mr. Bartlome. No, sir. 

Senator Montoya. What conversation transpired in the board of 
directors room with respect to the memo of April 5, if any? 

Mr. Bartlome. None. 

Senator Montoya. Was there any formal meeting of the board of 
directors to discuss this particular question and the giving of bonuses ? 



5436 

Mr. Baetlome. At the annual meeting following the annual meet- 
ing of stockholders 

Senator Montoya. And when was that ? 

Mr. Bartlome. It would have been approximately November. 

Senator Montoya. And what was the discussion with respect to these 
bonuses ? 

Mr. Bartlome. The chairman was given authority to grant bonusesij 
to individuals who are — where he sees a need. ' 

Senator Montoya. Were these bonuses discussed and approved with- 
in the context that they, in turn, be used for f unneling campaign con- 
tributions by the recipients ? 

Mr. Bartlome. No. , 

Senator Montoya. Wlien did you first hear that these bonuses would 
be used for such a purpose ? ' 

Mr. Bartlome. In 1970. I 

Senator Montoya. And this was not discussed at the board of direc- 
tors meeting ? I 

Mr. Bartlome. No. ; 

Senator Montoya. Do you have any reason to assume that the board 
of directors were very much aware that that was the purpose of the { 
bonuses ? 

Mr. Bartlome. I am not aware that they knew. 

Senator Montoya. Now, you mentioned this morning that American 
Ship Building was represented by a firm of Mudge, Rose, and I believe 
Alexander and Guthrie, did you not ? 

Mr. Bartlome. No, I did not. 

Senator Montoya. Does this firm represent American Ship Build- 
ing, or have they in the past represented your firm ? 

Mr. Barti.ome. They have handled some legal cases. 

Senator Montoya. Is that not the firm that President Nixon wasi 
associated with? 

Mr. Bartlome. Yes. 

Senator Montoya. Do you know who made the first contact with thei 
officers of American Ship Building for this particular contribution?! 

Mr, Barti>ome. No, I do not. 

Senator Montoya. How did the name of Kalmbach enter into the 
picture which resulted in your calling him at 1701 or 1706 Pennsyl- 
vania Avenue? 

Mr. Bartix>me. I received the name and the address and the phone 
number to which the contribution checks were to be delivered. 

Senator Montoya. Did you have anv trouble getting an answer from 
Mr. Kalmbach, to whom the call was directed ? 

Mr. Barti.ome. The party was not there when I first called. We left 
word and the call was returned. I do not know who returned the call. 

Senator Monit)ya. For all intents and purposes, is it vour assump- 
tion that Mr. Kalmbach, to whom the call was directed, did in fact 
return the call? 

Mr. BartivOM?:. I do not know that to be a fact. 

Senator Montoya. Did he identify himself? 

Mr. Barti^ome. I do not recall. .t 

Senator Montoya. That is all, Mr. Chairman. 

Senator Inouye. Mr. Dash. 

Mr. Dash. I just have a couple of questions. 



5437 

Senator Montoya just asked you how you knew to either call Mr. 
{^ahnbach or send the checks through the courier to Mr. Kalmbach. 
Vho gave you Mr. Kalmbach's name ? 

Mr. Bartlome. Mr. Steinbrenner, 

Mr. Dash. Now, you mentioned, Mr. Bartlome, that Mr. Steinbren- 
jier mentioned his receiving some pressure. I take it that this whole 
x)nus plan, which turns out to be a use of corporate funds for illegal 
ontributions for campaign purposes as a sort of dodge to make it look 
jike individuals in the company — employees, were making personal 
jifts — was not a very pleasant one for you. Is that tiTie ? 
' Mr. Bartlome. That is true. 

: Mr. Dash. And that, as a matter of fact, you have gone through a 
ponsiderable amount of personal suffering, family suffering, as a result 
)f this plan. 

i Mr. Bartlome. True. 

i Mr. Dash. You have testified that when Mr. Lepkowski questioned 
;;he program, that Mr. Steinbrenner said that a lot of corporations do 
^his, a great many corporations do it. Do you, of your own knowledge, 
inow that this is sort of a part of corporate giving? 

Mr. Bartlome. No. 

Mr. Dash. But it was at least in American Ship Building, where 
his plan was in operation ? 

Mr. Bartlome. Right. 

Mr. Dash. Do you feel this is an appropriate thing for a corpora- 
tion to do in a political campaign ? 
I Mr. Bartlome. No. 

Mr. Dash. As a matter of fact, you knew these were illegal 
contributions ? 

Mr. Bartlome. Not at the origin ; but later, yes. 

Mr. Dash. You now know ? 

Mr. Bartlome. Yes. 

ISIr. Dash. And you presently have testified that you don't feel this 
s an appropriate method, certainly of a corporation, using its money 
hrough this kind of ruse— to give political contributions. 

Having really gone through this experience yourself and as secre- 
ary of the corporation, do you have any recommendations that you 
nay want to make to this committee concerning corporate gifts; what 
egislation that we may want to consider involving the situations that 
^ou found yourselves in, and the other employees? 

Mr. Bartlome. I haven't considered any proposal. 

Mr. Dash. We don't need any additional laws to make this particu- 
lar act illegal. I take it the obstruction of justice that may have been 
involved is also covered by our criminal laws. But it is obvious that 
pressures were on to get money and to get money from corporations 
ind to have the money routed through these bonus plans. 

Do you consider that the — we have heard this from other witnesses 
:hat the pressure of obtaining money for political campaigns actually 
produces this kind of illegal activity. 

Mr. Bartlome. I am not aware that it does. I had no other knowl- 
edge of this. 

Mr. Dash. Well, you are aware that it happened at American Ship 
Building Co. ? 

Mr. Bartlome. Yes. 



5438 

Mr. Dash. Would you want this committee to seriously take this 
into consideration in its recommendations for legislation? 

Mr. Bartlome. Yes. 

Mr. Dash. I have no further questions, Mr. Chairman. 

Senator Inouye. Mr. Schultz. 

Mr. Schultz. I have one additional question, Mr. Chairman. 

I wanted to be certain, Mr. Bartlome, that 

Mr. Greenebaum. Can we have just one moment, please ? 

Mr. Schultz. Yes. 

Mr. Bartlome. There is some problem with Senator Montoya's 
question about Government ships that the company was buildino;. In 
1972, we were not, but prior to that time, we had built some Govern- 
ment ships. 

Mr. Dash. This is just in clarification of your response to Senator 1 
Montoya's question ? | 

Mr. Greenebaum. Yes; there was some confusion. 

Mr. Dash. By the way, are there any claims that your company has 
against the Government at the present time ? 

Mr. Bartlome. The OSS Researcher claim has been turned down by 
the Government. I do not know the plans of the company now. 

Mr. Schultz. Do you know when that was turned down ? 

Mr. Bartlome. Sometime in 1972. 

Mr. Schultz. AYho turned down the claim ? 

Mr. Bartlome. I did. 

Mr. ScHLTLTz. Do you have any other particulars or details? 

Mr. Bartlome. No. 

Mr. Schultz. Who might have that information ? 

Mr. Bartlome. Mr. Steinbrenner. 

Mr. Schultz. I wanted to clarify. Mr. Bartlome, for my own mind, 
and ask a question about your conversations with Mr. Steinbrenner, 
both April 1972 and preceding the contribution. At that time, do I 
understand your statement that he told vou he had a need to raise 
$25,000 ? 

Mr. Bartlome. Right. 

Mr. Schultz. And in September of 1970, when the bonus plan first 
came up, he said that he was under pressure to make campaign 
contributions ? 

Mr. Bartlome. Contributions, yes. 

Mr. ScHTTLTz. Did he repeat tliat statement in Anril of 1972, that 
he was under pressure to make campaign contributions? 

Mr. Bartlome. No. 

Mr. Schultz. Thank you. 

I have no further questions. 

Senator Txouye. The hearing will stand in recess until 10 o'clock 
tomorrow. 

["N^Hiereupon, at 12:05 p.m., the committoo i-ecessed, to reconvene at 
10 a.m., Wednesday, November 14, 1973.] 



i 



WEDNESDAY, NOVEMBER 14, 1973 

U.S. Senate, 
Select Committee on 
Presidential Campaign Activities, 

Washington^ D.C. 

The Select Committee met, pursuant to recess, at 10 :10 a.m., in room 
318, Russell Senate Office Building, Senator Sam J. Ervin, Jr. (chair- 
man), presiding. 

Present: Senators Ervin, Inouye, Montoya, Baker, and Weicker. 

Also present : Samuel Dash, chief counsel and staff director ; Fred 
D. Thompson, minority counsel; Rufus L. Edmisten, deputy chief 
counsel ; David M. Dorsen and James Hamilton, assistant chief coun- 
sels; Ronald D. Rotunda, W. Dennis Summers, and Alan Weitz, assist- 
ant majority counsels; Michael J. Madigan, Richard L. Schultz, and 
Robert Silverstein, assistant minority counsels; Jed Johnson, inves- 
ti<rator; Pauline O. Dement, research assistant; Eiler Ravnholt, office 
of Senator Inouye ; Bruce Jaques, Jr., office of Senator Montoya ; Ron 
McMahan, assistant to Senator Baker; A. Searle Field, assistant to 
Senator Weicker ; Ray St, Armand, assistant publications clerk. 

Senator Ervin . The committee will come to order. Counsel will call 
the first witness. 

Mr. Dash. Mr. Orin E. Atkins. 

Senator Ervin. Will you stand up, Mr. Atkins, hold up your right 
hand. Do you swear that the evidence that you shall give to the Sen- 
ate Select Committee on Presidential Campaign Activities shall be 
the truth, the whole truth, and nothing but the truth, so help you 
God? 

Mr. Atkins. Yes, sir. 

Senator Ervin. Be seated. 

Mr. Dash. Mr. Chairman, Mr. James Hamilton, assistant chief 
counsel, will begin the questioning. 

Senator Ervin. Let the record show that Mr. Fred Vinson appears 
as counsel for the witness. 

Mr. Vinson. That is correct, Mr. Chairman, and with me as co- 
counsel, I have Mr. John Jenkins from Huntington, W. Va. 

Mr. Hamilton. Will you state your full name, please? 

TESTIMONY OF ORIN E. ATKINS, ACCOMPANIED BY FRED M. VIN- 
SON, JR., AND JOHN E. JENKINS, COUNSEL 

Mr. Atkins. I am Orin Atkins, chairman of the board of Ashland 
Oil, Ashland, Ky. 

Mr. Hamilton. What is your address, please ? 

(5439) 



5440 

Mr. Atkins. 602 Amanda Drive, Ashland, Ky. 

Mr. Hamtlton. As chairman of the board of the Ashland Oil, are 
you the chief executive officer of that company ? 

Mr. Atkins. Yes, sir. 

Mr. Hamilton. I wonder if you would tell us the principal activities 
of Ashland Oil ? 

Mr. Atkins. Ashland Oil is what is termed an independent refining 
company which means that it probably buys about 90 percent of its 
crude oil, primarily a refining, marketing, and transportation com- 
pany. We also engage in the chemical business and in road construction 
and mining of coal. 

Mr. Hamilton. Is the principal business of Ashland the refining 
of crude oil ? 

Mr. Atkins. Approximately 50 percent of our — 54 percent of our, 
business is in the petroleum industry. 

Mr. Hamilton. For the fiscal year that ended in 1973, September, 
what was Ashland's consolidated net income? 

Mr. Atkins. We earned about $85 million in 1973. 

Mr. Hamilton. And its consolidated sales ? 

Mr. Atkins. About $2.3 billion, including about $300,000 

Mr. Hamilton. Its consolidated assets. 

Mr. Atkins. About $11^ billion. 

Mr. Hamilton. $11/2 million ? 

Mr. Atkins. $11^ billion. 

Mr. Hamilton. Where does Ashland rank in terms of sales on 
Fortune's list of the 500 largest American manufacturers ? 

Mr. Atkins. We are approximately 70th in terms of sales in the 
Fortune 500. 

Mr. Hamilton. How many countries does Ashland operate in ? 

Mr. Atkins. I am not sure of the exact number but I suspect in the 
range of 30 to 35 countries. 

Mr. Hamilton. And is one of these nations the African country of 
Gabon? 

Mr. Atkins. Yes, sir. We have offshore concession in Gabon en- 
gaging in drilling there. 

Mr. Hamilton. What is the name of the Ashland subsidiary that 
operates in that 

Mr. Atkins. T believe it is Ashland Petroleum. Gabon. 

Mr. Hamilton. Is that a Delaware corporation ? 

Mr. Atkins. Yes. sir. 

Mr. Hamilton, Mr. Atkins, were vou contacted in early March of 
1972 by Maurice Stans ? 

Mr. Atkins. Yes. sir. 

Mr. Haimilton. How was this contact made? 

Mr. Atkins. Mr. Stans called me on the telephone. 

Mr. Hamilton. What was tlie purpose of Mr. Stans' contact ? 

Mr. Atkins. He was soliciting a contribution for President Nixon's 
campaign. 

Mr. Hamilton. Did Mv. Stans request that any specific amount be 
contributed? 

Mr. Atkins. Yes, sir. 

Mr. Hamilton. And what was that? 

Mr. Atkins. $100,000. 



5441 

Mr. Hamilton. Did he also mention that he desired that the cor- 
poration purcliase an advertisement in the Republican convention 
brochure ? 

Mr. Atkins. Yes, sir. 

Mr. Hamilton. Did Mr. Stans recommend that you should person- 
ally contribute a certain portion of the $100,000 and solicit the 
remaining amount from your associates? 

Mr. Atkins. No, sir. 

Mr. Hamilton. Well, did you feel that Mr. Stans was requesting 
that the contribution be one from you personally or was he soliciting 
in your opinion, a contribution f i-om the corporation ? 

Mr. Atkins. Well, that is a difficult question to answer. In respect 
to Mr. Stans, he did not make any comment as to where the contribu- 
tion should come from. He might have had one thing in mind and I 
may have had something else in mind. 

Mr. Hamilton. Wliat Avas your impression ? 

Mr. Atkins. Well, the impression again is probably not a precise 
word but in my own mind it could only have come from one place, 
from the corporation. 

Mr. Hamilton. "Wliy did you hold that opinion ? 

Mr. Atkins. Well, a $100,000 is an awful lot of money and it would 
not be practical to raise it from any other source. 

Mr. Hamilton. Did you consider that because Mr. Stans at the same 
time was seeking a corporate ad in the Republican National Conven- 
tion brochure and since he made the request for the contribution in the 
same breath, that this was another reason to believe he was soliciting 
a contribution from the corporation ? 

Mr. Atkins. I guess I didn't really relate the two necessarily. I 
viewed them as one proposition and that was that. 

IVIr. Hamilton. Did Mr. Stans suggest to vou that the money be con- 
t ributed before the 7th day of April 1972 ? 

Mr. Atkins. Yes, sir. 

Mr. Hamilton. And what was the reason for that suggestion that 
Mr. Stans gave you ? 

Mr. Atkins. Contributions prior to that date were supposed to be 
secret and not disclosed. 

Mr. Hamilton. Whose anonymity was Mr. Stans attempting to 
protect ? 

Mr. Atkins. Well, again I am not sure whose anonymity Mr. Sta.ns 
was attempting to protect, I was interested in protecting my company 
and myself. 

Mr. Hamilton, But it is fair to say, I think, as you have stated, that 
Mr. Stans never expressly requested that the corporation make a cam- 
paign contribution. 

Mr. Atkins. That is right. 

Mr. Hamilton. What was vour response to Mr. Stans' request? 

Mr. Atkins. That we would give it study and think it over and 
be back to him. 

Mr. Hamilton. Did you then consult Ashland officials as to the de- 
sirability of a corporate contribution and as to the amount ? 
Mr. Atkins. Yes, sir. 
Mr. Hamilton. Of that contribution ? 
Mr. Atkins. Yes, sir. 



24-650 O - 74 - 12 



5442 

Mr. Hamilton. With whom did you consult? 

Mr. Atkins. I believe the first person who appeared in my office, 
after I received the call, was Clyde Webb and sometime later 1 con- 
sulted with our vice chairman of our board, William R. Seaton. 

Mr. Hamilton. I am sorry, go ahead. 

Mr. Atkins. I am not sure at what stage it could have been, before 
or after, my recollections are imprecise, I undoubtedly talked to our 
president, Mr. Yancy. 

Mr. Hamilton. What was Mr. Webb's position in the corporation ? 

Mr. Atkins. Mr. Webb is, his title is, vice president of external 
affairs. 

Mr. Hamilton. And I believe you said Mr. Seaton was the vice 
chairman ? 

Mr. Atkins. Vice chairman of the board. 

Mr. Hamilton. Mr. Yancy is the corporation president ? 

Mr. Atkins. Yes, sir. 

Mr. Hamilton. Did you consult Ashland's board of directors about 
this contribution ? 

Mr. Atkins. No, sir ; I did not. 

Mr. Hamilton. After your consultations, did you decide to honor 
Mr. Stans' request regarding the contribution and the ad? 

Mr. Atkins. Yes, sir. 

Mr. Hamilton. And did you decide to use corporate funds for that 
purpose ? 

Mr. Atkins. Yes, sir. 

Mr. Hamilton. When you made this decision, did you know that the 
contribution of corporate funds to a Presidential campaign was 
illegal? 

Mr. Atkins. Well, again that is — to be pTecise to your question, I 
did. I guess I viewed it as somewhat analogous to the situation in 
prohibition, the Volstead amendment, where it was more honored in 
the brief than by observation. In thinking back on it, it all has a some- 
what unreal atmosphere today ; we were more concerned about the in- 
come tax aspects of the situation than we were about the contribution 
aspects. I guess we had our priorities in the wrong sequence. 

Mr. Hamilton. What were the reasons that prompted you to make 
this illegal corporate gift ? 

Mr. Atkins. Well, again the situation today is difficult to rationalize. 
We were not seeking any particular privilege or benefit because we 
don't do any significant business with the Government. I think all 
we were attempting to do was to assure ourselves of a forum to be 
heard. Were we a larger factor in our respective industries, we could 
expect to have access to administrative officials in the executive branch 
of Government with ease, but being a relatively unknown corporation, 
despite our size, we felt we needed something that would be sort of 
a calling card, something that would get us in the door and make our 
point of view heard. 

We didn't expect those points of view to be accepted, but only 
from the point of view of being able to express them and that was our 
thinking or rationale as to why we were interested in making any type 
of contribution. 

Mr. Hamilton. After you reached the decision to contribute, what 
steps did vou take to get the money together that would be used for 
the contribution ? 



5443 

Mr. Atkins. Well, it naturally presented a problem because it is 
a very significant amount of money and we really had, as I viewed 
several choices, we could have padded expense accounts, we could have 
gone the route that others have gone of paying bonuses and having 
them kick back a portion of them. Both of those seemed to me to be — 
to create a nimiber of problems income-tax- wise and also present the 
points of view of internal controls, we elected to just take it out of one 
of our companies and elected to use Ashland Oil, Gabon. 

Mr. Hamilton. Now, did you send Mr. Seaton to Geneva? 

Mr. Atkins. Mr. Seaton was planning to be in Europe in any event 
on other business, and since he was going to be there, we asked him 
to stop by Geneva and pick up the necessary funds. 

Mr. Hamilton. And he withdrew the $100,000 from the Geneva 
branch of the First National City Bank of New York, is that correct? 

Mr. Atkins. Yes, sir, that is correct. 

Mr. Hamilton. Why did you make the decision to use the Gabon sub- 
sidiary to disburse the funds ? 

Mr. Atkins. Again, we were concerned about the income tax con- 
sequences of the money transaction. We wanted to be sure that it was 
not written off for income tax purposes. Ashland Oil, Gabon was 
engaged in oil exploration in that country. We felt that we would 
carry that as an investment in land, so to speak, for an undeveloped 
leasehold thing is the technical expression, and it would just sit there 
and never be written off for income tax purposes. That is the primary 
reason why it was done that way. 

Mr. Hamilton. I think it would be helpful, Mr. Atkins, if you would 
explain to the committee what type of account this undeveloped lease- 
hold account is and how the money, that was attributed to that ac- 
count, would be taken into account for tax purposes, because I believe 
it is not totally clear at the moment. 

Mr. Atkins. I am not sure I can exactly explain it. It is an account 
which represents the investment in the raw acreage, which is a non- 
depreciable asset. It just sits there in a lump sum, is not written off, 
and various expenses go into that. The cost of sending people down 
to negotiate the concession would normally be capitalized in there. 
Some seismic costs, rentals, things of that nature would go into 
there and be capitalized. I am not sure that is completely clear, but 
that is probably as good an explanation as I can make of the situation. 

Mr. Hamilton. As I understand it, the $100,000 was to be capitalized 
in this undeveloped leasehold account. 

Mr. Atkins. That is right. 

Mr. Hamilton. I take it, if the lease had been productive, the $100,- 
000 would have been written off during the life of the operation, is 
that correct ? 

Mr. Atkins. Well, if it had been productive, it would have, sometime 
flown the road, miarht have been written off. As a practical matter, I 
fhink Ave had it red-flagged so that it would not be; it was just going 
to sit there. 

In other words, it might have been written off 25 or 30 years from 
now, but until that time, it was iust going to sit there. 

Mr. Hamilton. If the leasehold was unproductive, is it correct that 
it would have been written off when the concession was surrendered? 

Mr. Atkins. It would have been written off for book purposes, but 
it would never have been written off for tax purposes. 



5444 

Mr. Hamilton. Why was the decision made to withdraw the money 
from a Swiss account ? 

Mr, Atkins. Well, $100,000 in cash is a commodity which U.S. banks, 
I do not believe, normally deal in from day to day. But I think the 
Swiss, being a more sophisticated financial society than ours, I believe, 
are used to dealing in such numbers, and it does not excite anybody's 
curiosity if you Avalk in and ask for $100,000 out of a Swiss bank. If 
you did that in the United States, everybody and his brother would be 
wondering what you did with it. 

Mr. Hamilton. Was the money withdrawn from the Geneva branch 
in cash ? 

>Tr, Atkins. Yes, sir. 

Mr. Hamilton. Mr. Atkins, I am going to show you a document 
entitled "Statement of Cable Transfers Sold." Does this document 
reflect the cablegram that was sent by the First National City Bank 
of New York to the Geneva branch to effect the transfer of the money 
to Mr. Seaton ? 

Mr. Atktns. It savs : "Notify and pay Mr. William R. Seaton, vice 
chairman, Ashland Oil, Inc., who will identify himself with passport 
No. A 120024, Mondav. March 27, 1972, in cash or cashier's check at 
his disposition," [exhibit No. 272-1] $100,000; yes, sir. 

Mr. Hamilton. When was the deliverv of the $100,000 from the 
Geneva branch actually made to Mr. Stans ? 

Mr. Atktns. I am not completely positive, but I think it was on 
April 3. 

Mr. Hamilton. Who made the delivery ? 

Mr. Atkins. Mr. Webb flew over from Ashland and delivered it to 
Mr. Stans. 

Mr. Hamilton. Did Mr. Webb report to you on the substance of his 
conversation at that time that he had with Mr. Stans? 

Mr. Atkins. He reported to me that he delivered the funds to Mr. 
Stans and Mr. Stans took the briefcase and dumped it in his desk 
drawer and said thank you, and he left. I do not believe he was in Mr. 
Stans' office more than a minute or two. 

Mr. Hamilton. To your knowledge, did Mr. Webb and Mr. Stans 
discuss the actual source of the money in Mr. Stans' office ? 

Mr. Atkins. I am positive that they did not. Maybe "positive" 
is too str-ong a word, but I am sure they did not. 

Mr. Hamilton. Did Mr. Webb, in the spring of 1973, have another 
occasion to speak with Mr. Stans? 

Mr. Atktns. Yes, sir. 

Mr. Hamilton. And at that time, did Mr. Stans make a request 
that he be allowed to speak with you? 

Mr. Atkins. Mr. Stans, I believe, had originally called for me, and 
I was either out of the office or I wps away from the office. In my ab- 
sence, Mr. Webb called him back and talked to Mr. Stans; yes, sir. 

Mr. Hamilton. What did Mr. Stans want to speak to you about, 
according to Mr. Webb's account? 

Mr. Atkins. I believe that it was about the contribution. 

Mr. Hamilton. You say he wanted to talk about the contribution. 
Was he interested in talking about the source of the contribution? 

Mr. Atkins. No, sir. 



5445 

Mr. Hamilton. I believe you told us in a staff interview that Mr. 
Webb reported to you that Mr. Stans wanted a reconstruction of the 
list of contributors ; is that correct ? 

Mr. Atkins. Yes, sir. 

Mr. Hamilton. In other words, he wanted you to give him a list of 
individuals who had contributed to the $100,000 amount; is that 
correct ? 

Mr. Atkins. Yes, sir. 

Mr. Hamilton. Did you ever speak with Mr. Stans on this matter? 

Mr. Atkins. No, sir. 

Mr. Hamilton. Why not? 

Mr. Atkins. Well, I didn't see that very much could be gained by 
talking to Mr. Stans. I was not about to do what he wanted us to do, 
so I didn't talk to him. 

Mr. Hamilton. Did you feel he was trying to make you create a list 
that didn't exist? 

Mr. Atkins. Well, I believe the conversation, to be as precise as I 
recall it, was to the effect that Mr. Stans told Mr. Webb that in all 
probability, there was a list of contributors, that it had not come from 
him, that it was floating around, and that we were on it. We, being 
Ashland Oil, were shown on it as being a contributor, and that he was 
trying to reconstruct the list and would like to have from us any in- 
formation that we could reconstruct. 

Mr. K^milton. Mr. Atkins, did you get a letter from Mr. Kenneth 
Parkinson, who is the counsel for the Finance Committee To Re-Elect 
the President, that he wrote on July 9, 1973, [exhibit No. 272-2] 
that requested information on the source of the contribution? 

Mr. Atkins. Yes, sir. 

Mr. Hamilton. I would like to show you a copy of this letter and 
have you identify it. 

Mr. Atkins. Yes, sir. 

Mr. Hamilton. This letter states that you and your wife had re- 
cently informed the finance committee that the two of you were the 
source of the $100,000. Had you so informed the finance committee? 

Mr. Atkins. No, sir. I had assumed when I saw this letter, that it 
must have come from President Nixon's Christmas card list. It had 
my home address on it, my wife's name on it. The only contact I ever 
had with the committee were contributions through the office and in the 
name of Ashland Oil. I just concluded when I saw it that— I guess you 
refer to it as Rosemary 's'list— they must have picked it up and taken my 
home address off it. It was more a social thing than a business trans- 
action. 

Mr. Hamilton. Did you respond to Mr. Parkinson's letter through 
your counsel and inform Mr. Parkinson that corporate funds had been 
used ? 

Mr. Atkins. Yes, sir. I might add that prior to that time — prior to 
receiving the letter on July 9, we had been in touch with the Cox com- 
mittee and informed them of our contribution, the nature of it. 

Mr. Hamilton. I would like to show you a copy of a letter written 
to Mr. Stans on July 16 by your counsel, Mr. Vinson, [exhibit No. 272- 
3] and ask you to identify this. 



5446 

Mr. Atkins. Yes, sir. That letter was a letter written by Mr. Vinson 
on our behalf, informing the committee that the contribution had been 
from corporate funds and requesting a refund. 

Mr. Hamilton. And this letter does state that the finance committee 
was not informed and had no way of knowing that this contribution 
orginated from a corporate source ? 

Mr. Atkins. That is right. 

Mr. Hamilton. Mr. Vinson in his letter also requested that the 
$100,000 be returned. Was it returned ? 

Mr. Atkins. Yes, sir. 

Mr. Hamilton. Did the return come in the form of a check for $100,- 
000 from Paul E. Barrick, who was the treasurer of the finance 
committee ? 

Mr. Atkins. I presume it did. I don't recall seeing the check. 

Mr. Hamilton. I have a copy of the check here and a copy of Mr. 
Barrick's letter to Mr. Vinson [exhibit No. 272^] . I would like to show 
these to you ; and if you can identify these, I would appreciate it. The 
letter from Mr. Barrick to Mr. Vinson is also dated July 16, 1973, as 
is the check. 

Mr. Atkins. I recall now seeing both the letter and the check. 

Mr. Hamilton. Does Mr. Barrick's letter also indicate that the fi- 
nance committee did not know the $100,000 was a corporate contribu- 
tion ? 

Mr. Atkins. That is what it states. 

Mr. Hamilton. But it is still your testimony, is it not, that when 
you initially talked to Mr. Stans, you did have the impression, at least 
in your mind, that the money he was asking for was corporate money ? 

Mr. Atkins. In my mind, there was never any doubt that that is 
where it was going to come from. 

Mr. Hamilton. I believe you said that you reported this contribu- 
tion to the Special Prosecutor's Office. 

Mr. Atkins. Yes, sir. 

Mr, Hamilton. When was that, Mr. Atkins ? 

Mr. Vinson. Mr. Hamilton, I think I could best answer that. I 
don't recall the precise date of the first visit. It was sometime, I think, 
in early July. 

Mr. Hamilton. Mr. Atkins, have you and Ashland Petroleum, 
Gabon, now entered pleas to misdemeanor charges in regard to this 
contribution? 

Mr. Atkins. Yes, sir, in the Federal district court in Kentucky. Ash- 
land Petroleum, Gabon pleaded guilty and was fined $5,000. 1 pleaded 
nolo contendere and was fined $1,000. 

Mr. Hamilton. The charge the corporation pleaded to was a viola- 
tion of 18 use 610, making a corporate contribution, is that correct ? 

Mr. Atkins. I believe so. 

Mr. Hamilton. The charge you pleaded nolo to was aiding and abet- 
ting, is that true ? 

Mr. Atkins. Yes, sir. 

Mr. Hamilton. Mr. Atkins, do you feel that the $100,000 contribu- 
tion that the corporation gave, produced any distinctive benefit to Ash- 
land Oil? 

Mr. Atkins. No, sir. 



5447 

Mr. Hamilton. Let me ask you about one specific instance, that in- 
stance that has occurred in the last several months. As you know, on 
April 18 of this year, the Federal Government lifted import quotas on 
foreigii oil. Do you feel that this governmental decision was in any 
way effected by Ashland's gift or by the gifts of other oil companies? 

Mr, Atkins. No, sir. On the part of Ashland, we are approximately 
8 percent of the petroleum business in the United States. I am sure 
we did not have any effect on it. The facts of the matter are that the 
import program was originally established to protect the price of 
domestic crude oil when foreign crude oil was selling for less than 
domestic oil. Today, as I think most of us are unfortunately aware, 
foreign oil is much more expensive than domestic oil, and there was no 
logic to continuing the import program. So I am sure that no action 
on our part or action on the part of any other company, in the petro- 
leum industry, led to the dropping of the quota system. 

Mr. Hamilton. Can you think of any way that your corporation was 
distinctively benefited by its contribution ? 

Mr. Atkins. I am afraid that I can't. It is an unfortunate statement 
to make on behalf of our shareholders, but I can see no way that we 
were benefited. 

Mr. Hamilton. Mr. Atkins, I am going to show you a copy of two 
more letters [exhibit No. 272-5] — actually, I am going to show you 
the original of these letters. The first letter is a letter of July 26, 1973, 
by a Mr. George Berdes, I believe. 

Mr. Atkins. Yes, sir. 

Mr. Hamilton. The second one is your reply to Mr. Berdes of July 
28, 1973. 

Mr. Atkins. Yes, sir. 

Mr. Hamilton. I will read one paragraph from your letter. 

First of all, Mr. Atkins, do you recognize these letters? Is this your 
signature? 

Mr. Atkins. Yes, sir. I wrote both letters — I mean I wrote the letter. 

Mr. Hamilton. I will read you one paragraph from your letter to 
Mr. Berdes : 

There was a good business reason for making the contribution and, although 
illegal in nature, I am confident that it distinctively benefited the corporation and 
the stockholders. 

Mr. Atkins. Yes, sir. 

Mr. Hamilton. My question to you again, sir, is how did the con- 
tribution distinctively benefit the corporation and the stockholders? 

Mr. Atkins. It is very difficult to be precise on how that benefited. 
As I stated earlier, its intention was to give us a means of access to 
present our point of view^ to the executive branch of the Government. 
That in itself is sort of like water wearing away a rock; you present 
your point of view and hope a little bit of it will rub off. We have 
continually presented what we think is best for the country in terms of 
our position on various matters, and when we do so, we feel that it was 
beneficial to our shareholders, and that is what was intended by the 
remark in the letter to Mr. Berdes. 

Mr. Hamilton. Do you feel that your contribution did give you ac- 
cess to governmental sources ? 



5448 

Mr. Atkins. I don't believe that it did. With the lapse of time, and 
I would have hoped that it might eventually ^ve us access, but the 
timelag and so on, nothing really occurred. 

Mr. Hamilton. Mr. Chairman, 1 have no further questions of Mr. 
Atkins, but I would like to have the documents that he identified — 
I believe there were five documents — introduced into the record. 

Senator Ervin. Let the record show that the documents are received 
in evidence and will be marked appropriately as exhibits by the 
reporter. 

[The documents referred to were marked exhibits Nos. 272-1 through 
272^5.*] 

Senator Ervin. I have to go to the Senate floor, and with the consent 
of Mr. Thompson, I will interrogate the witness next. 

Mr. Atkins, it looks to me as if Mr. Stans had made an assessment. 

Mr. Atkins. I think that is a correct assessment. 

Senator Ervin. In other words, he told you in effect that he would 
let you off with a contribution of $100,000 plus a $10,000 advertisement 
in the convention paper. 

Mr. Atkins. I believe you are right. 

Senator Ervin. He never left you much option in the matter, did he ? 

Mr. Atkins. I don't believe so. It is true that I didn't have much of 
an option. 

Senator Ervin. Now, this question of maintaining the anonvmity of 
contributions is a two-way street. It not onlv protects the disclosure of 
the fact of the identity of the contributor but it also prevents disclo- 
sures of facts which would indicate — give a lead as to who raised the 
contribution and by what method it was raised. 

Mr. Atkins. Yes, sir. 

Senator Ervin. Mr. Stans made a great profession when he was 
before this committee that he was merely trying to conceal the identity 
of contributors. But do you not agree with me that the method — when 
you concealed the identity of a contributor you also concealed a 
method, the way by which you can find how the recipient of the con- 
tribution got the contribution ? 

Mr. Atkins. Yes. I completelv agree with you and I think that is 
one thing that should definitely be done awav with by legislation. 

Senator Ervin. Now, you never represented to Mr. Sitans or to the 
Committee To Re-Elect the President or anybody else that your wife 
was one of the contributors of this $100,000 ? 

Mr. Atkins. No; in fact, my wife was fairly upset when her name 
appeared in the letter. 

Senator ER^^N. But you found out that the records of the Finance 
Committee To Re-Elect the President listed your wife as well as you 
as a ioint contributor ? 

Mr. Atkins. I f ranklv do not think the list of the committee ever 
listed my wife. I do not believe it ever did. I think that list came from 
just where it came from — it came from the "V^Hiite House. 

Senator Ervin. It came from the W^iite House ? 

Mr. Atkins. I suspect it came from the White House. 

Senator Ervin. So the White House which professed to stand above 
the battle also had information about who the contributors were? 

Mr. Atkins. That is my supposition. 



i-See pp. 5795-5800. 



5449 

Senator Ervin. Now, you made a reference to campaign contribu- 
tions in which you called attention to the Volstead Act. My father, who 
was just an old country lawyer, used to say "John Barleycorn" had 
more friends in private and more enemies in public than any other 
people. 

Mr. Atkins. Your father was correct, sir. 

Senator Ervin. Do you not think we are going to have to have 
some drastic reforms in the method by which campaign contributions 
are obtained ? 

Mr. Atkins. I think so, and I think you are going to have to recog- 
nize that the cost of these campaigns is exorbitant and they are going 
to have to be financed out of public funds myself. I do not think 
it is practical to expect 

Senator Ervin. It certainly is a human weakness or desire for any- 
one engaged in business to have a friendly ear in government. 

Mr. Atkins. That is right, very much so. 

Senator Ervin. And so departing from the realm of politics into 
the realm of the spiritual, the method of raising campaign contribu- 
tions now borders on extortion, does it not ? 

Mr. Atkins. Very much so. 

Senator Ervin. Do you not agree with me that there ought to be a 
statute putting very severe limits on the amount of a contribution any 
individual or organization can make ? 

Mr. Atkins. Yes, sir, I think it should also cover the form. I do not 
think there is much excuse for contributions in cash being given or re- 
ceived. If you want to make a contribution you ought to write out 
a check and make your contribution. Giving it in cash is not a normal 
business transaction today. Nominal contributions of $10, $15, or $20 
in cash is all right but anything above that you should have a check. 

Senator Ervin. We have an astounding fact here revealed by the 
testimony that over a $1 million in cash was disbursed by the com- 
mittee. Finance Committee To Re-Elect the President which was 
headed by an accountant and that no records were kept by the com- 
mittee to show what became of the over $1 million. Do you not think 
we need more stringent reporting requirements? 

Mr. Atkins. We most certainly do. 

Senator Ervtn. Do you not think it would be a helpful thing to re- 
quire not only the committee that raises the money to make the report 
but any individual or organization which contributes a substantial 
amount of money to make the report also ? 

Mr. Atkins. No question about it. It should be done. 
Senator Ervin. I want to commend you for the frank statements 
you make and for making a voluntary disclosure to the Special Pros- 
ecutor, as I understand. 

Mr. Atkins. Thank you very much. 

Senator Ervin. You are certainlv blessed, some people do not like 
me to quote scripture but rest in the implicit, "Blessed is he who swears 
to his own hurt and changeth not," so I think you are entitled to that 
blessing. 

Mr. Atkins. Thank you. 

Senator Ervin. Mr. Thompson. 

Mr. Thompson. Thank you, Mr. Chairman. 



5450 

Mr. Kobert Silverstein, assistant minority counsel, will question this 
witness. 

Mr. Silverstein. 1 just have a very few short questions. 

Mr. Atkins, with reference to the telephone call you received in 
March 1972 from Mr. Stans, had you had any previous discussions 
with Mr. Stans on the same subject ? 

Mr. Atkins. No. 

Mr. Silverstein. When was the last time you spoke to Mr. Stans ? 

Mr. Atkins. I think the last time I had seen or talked with Mr. Stans 
was when we were at one stage interested in a petrochemical project 
in Yugoslavia. 

Mr. Silverstein. About how long ago was this ? 

Mr. Atkins. I am not the greatest fellow in the world on dates. 

Mr. Silverstein. Roughly. 

Mr. Atkins. It would probably have been 18 months to 2 years prior 
to that time. Mr. Stans had just returned from Yugoslavia and we 
happened to be in the Department of Commerce, it was w'hen he was 
still Secretary of Commerce. 

Mr. Silverstein. How would you categorize your relationship with 
INIr. Stans, business, casual, or friendly ? 

Mr. Atkins. Extremely casual. If he knew I was coming in he prob- 
ably would recognize me. If he passed me on the street he probably 
would not. 

Mr. Silverstein. Do you have any idea why Mr. Stians called you 
personally for a contribution ? 

Mr. Atktns. Well, I really do not have any idea. 

Mr. Silverstein. Do you know whether or not Mr. Stans called 
other corporation officials in the oil industry ? 

Mr. Atkins. I really have no way of knowing whether he contacted 
anybodv else or not. 

Mr. Silverstein. When Mr. Stans spoke to you on the phone did he 
mention a specific amount ? 

Mr. Atkins. Yes, sir. 

Mr. Silverstein. "VVliat was that specific amount ? 

Mr. Atkins. Well, we talked in generalities for a while and then he 
suggested the sum of $100,000 and $10,000 through a campaign ad. 

Mr. Silverstein. Would you say that he reduced the amount to 
$100,000 ? 

Mr. Atkins. Well, I am sure of Mr. Stans' background as a good ne- 
gotiator and if I volunteered sometliing higher, he might never have 
mentioned it, but if I mentioned something low he might raise it. 

Mr. Silverstein. So far as you could remember ? 

Mr. Atkins. So far as I could remember that was the specific sum. 

Mr. Silverstein. How did he open the conversation when he called 
you? 

Mr. Atkins. I really don't recall. It was a very short couA^orsation. 
I didn't expect the call. I have a habit of answering my own telephone 
and I picked up a phone and Mr. Stans was on the other end of the 
wire. 

Mr. Silverstein. About how long Avas the conversation, roughly? 

Mr, Atkins. Oh, some of my friends accnso me of talking short- 
hand and I suspect that the conversation, if it lasted 3 minutes Avas a 
long conversation. He told me what he wanted and I told him I would 
think about it and that was it. 



5451 

Mr. SiLVERSTEiN. Did Mr. Stans make any promises to you ? 

Mr. Atkins. None. 

Mr. SiLVERSTEiN. Did he just say "Mr. Atkins, I would like to have 
a donation"'? 

Mr. Atkins. As near as I remember that was just about it. He may 
have prefaced it by some comment about how good a job the President 
was doing and why we should support him, something like that, that 
was generally the point. 

Mr. SiLVERSTEiN. You were under no obligation to Mr. Stans ? 

Mr. Atkins. None, sir. 

Mr. SiLVERSTEiN. You weren't threatened, of course. 

Mr. Atkins. No. 

Mr. SiLVERSTEiN. Did Mr. Stans specifically ask for cash ? 

Mr. Atkins. No, sir. 

Mr. SiLVERSTEiN. Did Mr. Stans mention where the money would 
come from — from the corporation ? 

Mr. Atkins. No, sir. 

Mr. SiLVERSTEiN. You stated that it was your impression that Mr. 
Stans expected the contribution to be a corporation contribution ? 

Mr. Atkins. No ; I don't believe I said that. 

Mr. SiLVERSTEiN. Wliat did you say ? 

Mr. Atkins. I believe what I said was, I can't testify as to what 
Mr, Stans had in mind but the minute he mentioned it I knew it had 
to come from the company. 

Mr. SiLVERSTEiN. Why did you say that ? 

Mr. Atkins. Well $100,000 is an awful lot of money and I knew 
what I had in the bank and it wasn't anywhere close to that and I 
knew what my associates had and there was only one source that it 
could come from, from my point of view. 

Mr. SiLVERSTEiN. Well, the question I am coming up to is, why didn't 
you just say "Thank you, Mr. Stans," and just decline the invitation? 

INIr. Atkins. Well, that would in retrospect have been an extremely 
logical thing to do, in retrospect I wish that is what I had done in 
retrospect. I am sure Mr. Stans wishes that is what I would have done. 

Mr. SiLVERSTEiN. What was going through your mind at the time ? 

Mr. Atkins. Well, I think you have to again try to move back in 
time and it was a situation, as I assessed it, which was very difficult to 
turn down. 

Mr. SiLVERSTEiN. But you felt that you more or less were obligated 
to make a contribution, was that your feeling at the time? 

Mr. Atkins. I think that is, ISIr. Silverstein, probably a correct as- 
sessment. 

Mr. Sil\'erstein. Well, after the telephone conversation you said 
you discussed this matter with others. Who were the others? 

Mr. Atkins. I think a INIr. Webb came in my office right after I had 
had the conversation and I told him about it, and I discussed it with 
Mr. Seaton who was vice chairman of our board. 

INIr. Silverstein. And Mv. Yancy ? 

Mr. Atkins. I discussed it at some stage with Mr. Yancy, I am not 
real positive just when T discussed it with Mr. Yancy. 

INIr. SiL\TERSTETN. What is Mr. Yancy 's position in the firm? 

Mr. Atkins. ^Mr. Yancy and T are sort of like partners. I run one 
side of the business and he runs the other. He does the work. He runs 
the refineries and the chemical company. 



5452 

Mr. SiLVERSTEiN. Would it be fair to say that you are No. 1, Mr 
Seat on is No. 2, and Mr. Yancy is No. 3 ? 

Mr. Atkins. No. It is more like I guess on the letterhead I am No. 1 
biit the operations are more or less split between Mr. Seaton and Mr. 
Yancy but the financial side of the business is more in Mr. Seaton 's 
sphere than Mr. Yancy 's but Mr. Yancy is the operating head of divi- 
sions which account for about 75 percent of our profits. 

Mr. SiLVERSTEiK. Approximately how many employees do you have? 

Mr. Atkins. We have about 22,000 employees. 

Mr. SiLVERSTEiN. Well, after you spoke to these individuals, did 
tM decision to make the contribution come as a result of the group 
discussion? 

Mr. Atkins. I think the decision was made by me. If they had 
objected strenuously, I would probably have rethought it but\vhen 
I talked to them, I, in my own mind, had made the decision. 

Mr. SiLVERSTEiN. Did you discuss anything pertaining to problems 
of the Ashland Oil Co. that might be helped by the contribution? 

Mr. Atkins. No, sir. 

Mr. SiLv-ERSTEiN. Did you discuss any problems that the Ashland 
Oil Co. had with tlie Government? 

Mr. Atkins. No, sir. 

Mr. SiLVERSTEiN. Or with the administration ? 

Mr. Atkins. No, sir. 

Mr. SiLVERSTEiN. And as far as you can remember those are the 
only individuals you discussed it with ? 

Mr. Atkins. As near as I recall, sir. 

Mr. SiLVERSTEiN. Well, after the decision was made to make a con- 
tribution, then the next decision was, how was the contribution ffoinff 
to be made? ^ ^ 

Mr. Atkins. That is right. 

Mr. SiLVERSTEiN. Now, who was in that conversation? Who par- 
ticipated in it ? 

Mr. Atkins. I would think it probably evolved out of discussions 
between Mr. Seaton and myself. 

Mr. SiLVERSTEiN. Did you consider false vouchers, false bonuses, 
things of that sort? 

Mr. Atkins. I guess we may have considered it but, as I say, the 
decision had been made and I pretty much had been thinking about 
how it would be done, rejected those approaches. 

Mr. SiLVERSTEiN. But they did come up ? 

Mr. Atkins. Yes, sir. 

Mr. SiLVERSTEiN. Did the discussion at that time include who was 
to make a delivery ? 

Mr. Atkins. No. I think that eventually just naturally evolved and 
Mr. Webb, he was more or less a handcuffed volunteer in carrying 
the money. 

Mr. SiLVERSTEiN. Well, Ashland Petroleum-Gabon Co., can you 
just tell me something about the type of organization it is? 

Mr. Atkins. When you go into these foreign countries for a variety 
of tax and other reasons you go in tlirough a separate company, and 
this was a company which was organized and created to operate in 
Gabon. Actually the company was one we had acquired originally 
from— which had been organized by Union Carbide and we bought 



5453 

the properties of Union Carbide, incliidin<j the stock of this company, 
and it holds two offshore concessions of Gabon and it covers probably, 
oh, 60 or 70 square miles of offshore territory. We drilled two dry 
holes on it, spent about $6 million down there and found no oil. It is 
a typical exploration company. 

Mr. SiLVERSTEix. "Would you say it was a successful operation? 

Mr. Atkins. ^AHien you have spent $0 million and you don't have 
anything to show for it but GO square miles of ocean land, I wouldn't 
call it exactly successful. 

Mr. SiLVERSTEiN. Do you have a tax writeoff on that? 

Mr. Atkins. No, sir ; we have not taken a tax writeoff on it. We have 
written it off for book purposes but not for tax purposes because we 
are still holdino; the concessions hopino; we will get lucky. 

Mr, SiLVERSTEiN. You have mentioned that you felt it necessary to 
have a voice in the administration. 

Mr. Atkins. It wasn't a voice. I just wanted 

Mr. SiLVERSTEiN. How did you categorize it ? 

Mr. Atkins. I categorized it as the ability to be heard. 

Mr. SiLVERSTEiN, Before wdiom ? 

Mr. Atkins. Well, that is more difficult to assess, and I guess we 
never really had an occasion to try to figure that one out. 

We do know that the larger segments of our industry have no diffi- 
culty in making their points of view heard. We have operations in 
many States but most of tlie time, because of our rather obscure name 
and rather obscure identity and the fact we operate through sub- 
sidiaries, the size and scope of our operation is not generally appreci- 
ated or understood, so if we were to call for an appointment for secre- 
tary of some agency the chances are he probably would say, "Ashland 
who?" [Consulting with counsel.] 

Also, Mr. Vinson reminds me, which is very true, that we speak for 
a different segment of the industry than most of the companies. Most 
of the major oil companies supply their own operations; we primarily 
sell independent distributors. More than GO percent of our business is 
selling to independent businessmen who resell our products under their 
own brand name, and, as I am sure you are aware from the energy 
crisis we have had, these businessmen are a different breed of cat, so 
to speak. 

Mr. SiLVERSTEiN. Would you categorize yourself as one of the 
independents? 

Mr. Atkins. We are definitely one of the independents. 

Mr. SiLVERSTEiN. Aiid one of the problems common amongst the 
independents is that they would like to have a larger quota of crude 
oil? 

Mr. Atkins. Well, we feel that we benefit from a surplus of crude 
oil. If crude oil is in ready supply with easy access to it, we think the 
consumer benefits if we benefit; so I think that is economy of abun- 
dance ; we like to operate in an economy of abundance. 

Mr. SiLVERSTEiN. Did you notice any benefits after you made the 
contribution? 

Mr. Atkins. Things went on just like they were before. No benefits. 

Mr. SiLVERSTEiN. Last Monday night, I showed you a news clipping. 
You said you were familiar with it. I have it here. 

Mr. Atkins. Is it the one in the Jack Anderson column? 



5454 

Mr, SiLVERSTEiN. Jack Anderson, yes, sir, 

I refer to a news clipping of the Washington Post dated August 8, 
1973, In this particular article, I will just quote a particular sentence 
which I think is appropriate, 

Ashland will reap billions from an agreement reached July 25 with the oil-rich 
kingdom of Iran. The landmark agreement needed U.S. Government sanction. 

Would you care to comment on that ? 

Mr, Atkiks. We negotiated on this agreement for approximately 
4 years. We did not advise the Government, the U.S. Government, of 
our negotiations. They knew nothing about it. We did not contact the 
Embassy in Iran at any time during the negotiations. We contacted 
no branch of the Government, We asked for no help, and we did not 
need any Government approval or sanction at all to enter into the 
contract. It was purely and simply between ourselves and the National 
Iranian Oil Co,, which is the state oil company of Iran, and the 
statement is completely incorrect, 

Mr. SiLVERSTEiN. Thank you. Last Monday night, I showed you a 
copy of a committee report dated November 8, 1973, which was very 
recent. This committee report was the result of the Permanent Com- 
mittee on Investigations of the Committee on Government Operations 
of the U,S, Senate, I invite your attention to page 45. 

I would like to read a very, very short paragraph, 

Roherit E. Yancy, President of Ashland Oil, met with officials of the OflSce of 
Emergency Preparedness on April 6, 1972. Mr. Yancy reported Ashland was 
having "extreme difficulty" obtaining crude oil. He requested import increases of 
the magnitude of 300,000 barrels per day. 

Would you care to comment on that, please ? 

Mr, Atkins, Well, that comment was made in a meeting between a 
Mr, Trupner, who was at that time — I am not sure what his rank was 
at the Office of Emergency Planning, Mr, Lincoln w^as the head of it 
and they were meetin,<r with Mr, Trupner, We felt that the import 
quota system was obsolete and should be removed and were urging 
that it be taken off. Our position, we are positive, was correct. If you 
Avill note on the following page of that repoit, the White House 
opposed our position — that is page 47, Also, that Humble Oil, which 
is a subsidiary of Standard New Jersey, also opposed our position. So 
it is, what I guess I would term, a classic situation, 

Mr, Stlversteix, I notice the date, April 6. Were you aware of this 
particular problem at that time, April 6, 1972? 

Mr, Atktxs, Oh, I am sure we were. It is more or less a perennial 
problem, I think. Any time in the last 3, 4, or 5 years we would have 
had problems with the imports, 

Mr, Stiversteix, These problems that your subsidiaries have or your 
organizations have, do they bring those to you when they relate to the 
company ? Who handles those when thev need assistance? 

Mr, Atkins, We are a fairly closely knit organization. We live in a 
relatively small town and we are in pretty constant communication. 
If there is a problem, a number of people know about it, I think we 
know about our problems just because they are there, they exist. We 
do not have anv cleai- cut method of coming to me and saying, we have 
a problem in Washinjfton and we need hel]) with it, 

Mr, SiLVERSTEiN, I iuvite your attention to page 54 and page 55. 

Mr, Atkins, Yes, sir. 



5455 

Mr. SiLVERSTEiN. The top of pafje 55. This pertains to "Ashland 
attacks borrowing concept." That is on pag:es 54 and 55. 

Mr. Atkins. Yes, sir. 

Mr. SiLVERSiT.iN. I assume that you have an objection to a particular 
concept or something there. 

INIr. Atkins. Well, rather than increase the amount of oil which 
could come into the country, as a substitute measure, they gave you 
a quota and permitted you to borrow against next year's quota. We 
were sort of leaking our own liole, so to speak. You used up tomor- 
row's oil today and then tomorrow, you were out of business. We felt 
that was an unsound way to run any business. It prevented planning, 
prevented you from saying what you would be doing 3 years from 
now. We were in a position of having to charter tankere to move oil 
from Iran and Saudi Arabia to the United States and these things all 
take planning. This borrowing concept made planning pretty nearly 
impossible. 

Mr. SiLVERSTEiN. Who could have helped you with that? 

Mr. Atkins. This is another problem, because I guess the import 
program never really had a home. 

Mr. SiLVERSTEiN. Are you familiar with the Office of Emergency 
Preparedness ? 

Mr. Atkins. Yes, sir. 

Mr. SiLVERSTEiN. How docs that organization relate to your indus- 
try? 

Mr. Atkins. I hate to admit it, but I have never been really com- 
pletely sure. They are one of the planning organizations having to do 
with oil import quotas. The Department of the Interior actually is- 
sues the quotas and administers them, but some way or other, the 
Office of Emergency Planning had an input and they did some of the 
planning and was sort of a think tank, maybe, for the Department of 
the Interior. 

Mr. SiLVERSTEiN. Well, the Oil Import Appeals Board. 

Mr. Atkins. That is under the Department of the Interior, as I 
understand it. 

Mr. SiLVERSTEiN. Aiid how^ does that Board relate to your 
organization ? 

Mr. Atkins. Well, if you have a problem on imports and you have 
to get a quota, an additional quota to stay in business, you file an 
appeal with the Oil Import Appeals Board. It is a 3-man body. Then 
they study and tell you wiiether you get an additional quota or do 
not get an additional quota. 

Mr. SiLVERSTEiN. Are tliese the areas you are referring to when you 
say you would like to be heard a little bit more? You were not being 
heard ? 

Mr. Atkins. No, in those areas you had access to administrative 
methods and procedures. As I am saying, I am not sure where we 
wanted to be lieard or how we wanted to be heard. I suspect if we had 
the occasion, we would have hoped it would be some place else. 

Mr. SiLVERSTEiN. Are you familiar with — I am sure vou are— with 
Ashland Oil Co. of California ? 

Mr. Atkins. That has no connection with us whatsoever. 

Mr. SiLVERSTEiN. Has no relationship ? 



5456 

Mr. Atkins. None wliatsoever. It is owned by an individual who 
organized it some years before we qualified to do business in California 
and we have tried to buy the name back from him and unfortunately, 
we have not been able to. He travels around the world and passes him- 
self off as Ashland Oil, and it is a source of great embarrassment 
tons. 

Mr. SiLVERSTEiN. It is the same name, but a different organization ? 
Mr. Atkins. Completely different. You have done your homework 
well. 

Mr. SiLVERSTEiN. Thank you. The Union Oil Co. of California— is 
that one of your organizations ? 

Mr. Atkins. Yes, sir. 

Mr. SiLVERSTEiN. Have they had any problems that they brought to 
you that you are aware of ? 

Mr. Atkins. No, sir. 

Mr. SiLVERSTEiN. Do you know of any reason why the U.S. Geolog- 
ical Survey would be of assistance to your organization or any rela- 
tionshij:) to them ? 

Mr. Atkins. I am sure some of our people have contacts with USGS, 
but I am not aware of what they are. 

Mr. SiLVERSTEiN. This pertains to a petition of the Ashland Oil Co 
T-119. Would you be familiar with that ? 

Mr. Atkins. No, sir. What is the title o f it ? 

Mr. SiLVERSTEiN. This pertains to a petition to develop— for the 
increase of the allocation of Canadian crude oil imports. 

Mr. AilKiNS. We are a large importer of Canadian crude. 

Mr. SiLVERSTEiN. But you do not have any particular problems in 
that area ? 

Mr. Atkins. Well, just like all oil companies 

Mr. SiLVERSTEiN. I am trying to see where the contribution would 
help you and Avhere the voice 

Mr. Atkins. Our petition in that regard is just like everybody 

Mr. SiL\^ERSTEiN. I will go into another area now. Have you made 
any contributions or your organization— I am referring to the 1972 
Presidential campaign— to the Democratic National Convention « 

Mr. Atkins. To the Democratic National Convention? Yes, 
contributed— we bought a program in the Democratic Convention. 

Mr. SiLVERSTEiN. Will you describe when, where, and how? 

Mr Atkins. I am not really sure how it occurred. I think when we 
bought a program, an ad, in the Republican, we assumed we would buy 
one m the Democratic, which we did. 

Mr. SiLVERSTEiN. T just have a few very short questions. 

Did vou receive a questionnaire from' this committee? 

Mr. Atkins. Yes, sir. 

Mr. SiLVERSTEiN. Did you read the questionnaire? 

Mr. Atkins. Yes sir. 

Mr. SiLVERSTEiN. One of those questions, T believe, pertained to— 
have any of your subsidiaries coutriluitod to any party primary et 
cetera, pertaining to tlie 1072 Presidential campaign ? Do vou remember 
tliat question? 

Mr. Atkins. I don't remember it snecifi-allv. no. But I am sure it is 
in there. The answer to your question is no. 



we 



5457 

Mr. SiLVERSTEiN. You say you have not checked with them or they 
have not been in contact with you 'i 

Mr. Atkins. Well, I would know. 

Mr. SiLVERSTEiisr. You would loiow ? 

Mr. Atkins. Yes sir. 

Mr. SiLVERSi-EiN. Have you specifically asked them or is it your 
assumption ? 

Mr. Atkins. In our situation, our control is such that I would know. 

Mr. SiLVERSTEiN. You have no further knowledge of the $10,000 con- 
tribution to the brochure in the Democratic 

M)r. Atkins. I know it was made. 

Mr. SiLVERSTEiN. But do you know w^ho made it ? 

Mr. Atkins. I know who requested it. 

Mr. SiLVERSTEiN. Wlio requested it ? 

Mr. Atkins. I think when Mr. Webb — when we agreed to make the 
one to the Republicans, I think he then contacted the Democrats and 
told them he would take an ad there. 

Mr. SiLVERSTEiN. Is it your understanding that Mr. Webb volun- 
tarily contacted the Democrats ? 

Mr. Atkins. That is my impression, yes. I think when we decided 
to take the one with the Republicans, we called the Democrats and told 
them we would take an ad in theirs. 

Mr. SiLVERSTEiN. Do you know whether or not the Democrats asked 
them for a voluntary contribution in addition to that ? 

Mr. Atkins. It is my impression that they did not. 

Mr. SiLVERSTEiN. I have no further questions. 

Senator Inotjye [presidingl. Senator Montoya. 

Senator Montoya. Mr. Atkins, let's go back to the initial approach 
made by Mr. Stans. Did you receive any advance notice that he was 
going to call you ? 

Mr. Atkins. No, sir. 

Senator Montoya. Did you have any conferences with your asso- 
ciates anticipating that possibility ? 

Mr. Atkins. No, sir. 

Senator Montoya. Had you read in the newspaners that he was Paul 
Revereing for finances for the Committee To Re-Elect the President all 
over the country ? 

Mr. Atkins. I suspected, but I don't recall specificallv. 

Senator Montoya. Now. you sav that you spent 3 minutes, and dur- 
ing" those 8 minutes, he persuaded you to the tune of $100,000. Now, 
will you tell us just exactly what conversation you had during those 3 
minutes? 

Mr. Atkins. Well. I can't recall exactly. Senator, but I think it was 
what you would probablv term a fairly casual convereation. He called 
and told me who it was. I told him I was glad to hear from him. 

Senator Montoya. Were you ? 

Mr. Atkins. Pardon me? 

Senator Montoya. Were you glad to hear from him? 

Mr. Atkins. No, sir. 

Senator Montoya. Give us the substance of the c^nvei'sation. 

Mr. Atkins. That pretty much was the substance. T didn't see any 
percentage — I knew there was not much percentage in arguing with 
him. My objective was to get off the phone and 



24-650 O - 74 - 13 



5458 

Senator Montoya. Well, what words did he use, more or less, in mak- 
ing yon arrive at the acceptance of the $100,000 fee ? 

]\ir. Atkins. Pretty much as I said before — on account of the ex- 
cellent job he thought the President was doing, everybody needed to 
help him, his usual sales pitch, which I think, if you normally sat down 
to write out what you would say if you were calling somebody to ask 
him for $100,000, you would preface it by something, and it was sort 
of that kind of approach. 

Senator Montoya. Did he indicate to you that he was calling in be- 
half of the President? 

Mr. Atkins. No, sir. 

Senator Montoya. Noav, Avill you list the subsidiaries of Ashland 
Oil? 

Mr. Atkins. There are approximately 250 of them. 

Senator Montoya. And you are not aware that they contributed to 
the Committee To Re-Elect the President or to the Republican Na- 
tional Committee. 

Mr. Atkins. I am positive they did not, other than the ones dis- 
closed here ; I am positive that they did not. 

Senator Montoya. And you said that I^nion Oil was a subsidiary? 

Mr. Atkins. Oh, no. Union Oil is a very substantial California oil 
company, much as we are. 

Senator Montoya. That is all. 

Senator Inouye. Senator Weicker. 

Senator Weicker. I gather that there were no specifics that precipi- 
tated your agreeing to make the contribution to the administration? 

Mr. Atkins. That is right. Senator. 

Senator Weicker. So w^ould you categorize your response as being 
the usual businessman's response to a politician's request? 

Mr. Atkins. I guess I can't speak for the bulk of them, but if I had 
to express an opinion, I Avould think that would have been the general 
res?ponse. 

Senator Weicker. Has the Ashland Oil Co. — I notice you have been 
with them since 1950. During that period of time, have similar requests 
been made of the company by administration officials. Democrat or 
Republican ? 

Mr. Atkins. I don't really recall any other. To my knowledge, this 
is the only one. 

Senator Weicker. This is the only request from a Cabinet official 
that you recall from either- party ? 

Mr. Atkins. Yes, sir. That is one of the advantages of being off the 
beaten track. 

Senator Weicker. You say the usual sales pitch. Does Ashland have 
a representative in Washington ? 

Mr. Atkins. Yes, sir. we haA'e an office in Washington in which we 
have two lawyers. 

Senator Weicker. Do they pei-form sti'ictly legal services, or are 
thev registered also as lobbyists ? 

Mr. Atkins. T am not sure. T think tliey are not registered as lobby- 
ists arid their services are legal. 

Senator Weicker. Did you consult with your Washington office 
when you received the request from Mr. Stans? 

Mr. Atkins. No, sir. 



5459 

Senator Weicker. I have no further questions, Mr. Chairman. 

Senator Inouye. Mr. Atkins, you described your relationship with 
Mr. Stans as casual at best ? 

Mr. Atkins. Yes, sir. 

Senator Inouye. Did Mr. Stans have any reason to believe that you 
could personally afford a contribution of $100,000'^ 

Mr. Atkins. No, sir. 

Senator Inouye. What denominations did these contributions come 
in? 

Mr. Atkins. I am not positive, but I suspect they were in $100 bills. 

Senator Inouye. In your conversation, your short conversation with 
Mr. Stans, was $100,000 the first and only amount mentioned? 

Mr. Atkins. I believe so. 

Senator Inouye. Did Mr. Stans sav that your company is assessed 
$100,000? 

Ml'. Atkins. Well, I don't think that word was used, but that was 
the amount mentioned. 

Senator Inouye. And did you try to resist this ? 

Mr. Atkins. Well, as I indicated, I jjuess my objective was to get 
off the phone and think about it. I just listened and told him we would 
think about it and terminated the conversation. 

Senator Inouye. Before the delivery by Mr. Webb of this packaged 
sum, did someone communicate with Mr. Stans to advise him of the 
delivery? 

Mr- Atkins. I suspect, and I guess my recollection is that Mr. Webb 
called and made an appointment to see Mr. Stans. 

Senator Inouye. So Mr. Stans was aware of what was in the 
package ? 

Mr. Atkins. Yes, sir. 

Senator Inoi^ye. Did Mr. Stans call you later to thank you ? 

Mr. Atkins. No, sir. 

Senator Inouye. Did you receive a letter of acknowledgment or a 
thank you letter ? 

Mr. Atkins. No, sir. 

Senator Inouye. Did your company receive a letter of acknowledge- 
ment or a thank you letter ? 

Mr. Atkins. Not to my knowledge. 

Senator Inouye. The first letter received by the campaign committee 
was for this reconstruction of the donors list ? 

Mr. Atkins. Yes, sir. It wasn't a letter, it was a 

Senator Inouye. Was it your understanding that this gift would be 
unreported ? 

Mr. Atkins. Yes, sir. 

Senator Inouye. I thank you very much. I wish to join the chair- 
man in commending you for your assistance. 

Mr. Atkins. I appreciate the opportunity. 

Senator Inoi ye. I appreciate it very nnich, sir. Thank you. 

Counsel will call the next witness. 

Mr. Dasit. Mr. Claude C. Wild, Jr. 

Senator Inouye. Mr. Wild, will you rise and raise your riglit hand, 
please, sir? 

Do you swear that the testimony you arc ahoni to give is the truth, 
the whole truth, and nothing but the truth, so help you God ? 



5460 

Mr. Wild. I do. 

Senator Ixouye. Thank you, sir. 

Mr. Dash. Mr. Chairman, David Dorsen, assistant chief counsel, 
will begin the questioning. 

Mr. Dorsen. Mr. Wild, would you give your full name for the record, 
please ? 

TESTIMONY OF CLAUDE C. WILD, JR., ACCOMPANIED BY LEO T. 

KISSAM, COUNSEL 

Mr. Wild. My name is Claude Wild. Jr. My middle initial is C. 

Mr. DoRSEx. I see that you are represented by counsel. Will counsel 
please identify himself ? 

Mr. KissAM. My name is Leo T. Kissam, New York City. 

Mr. DoRSEx. ]\Ir. Wild, what is your present position? 

Mr. Wild. I am vice president for Government relations of the Gulf 
Oil Corp. 

Mr. DoRSEX. How long have you held that position ? 

Mr. Wild. I have held that position — I have been vice president 
since July of 1968, and before that, I headed the office with the title 
of director of Government relations since 1963. 

Senator Ixouye. Mr. Wild, would you mind if Ave take a short recess 
to take a vote, sir ? 

Mr. Wild. Please do. 

[Recess.] 

Senator Ervix. The committee will resume. Counsel may resume 
interrogation of the witness. 

Mr. Dorsex. ]\Ir. Wild, just before the recess for a vote you were 
telling us what your position is with the company, what is it now ? 

Mr. Wild. I am vice president for Government relations for the 
Gulf Oil Corp. 

Mr. Dorsen. "\^^lat are your duties and what were your duties in 
1971 and 1972 ? 

Mr. Wild. They were the same then as they are now. I am in charge 
of the rather substantial governmental relations department. I basi- 
cally watch and monitor governmental actions, interpret those actions 
to my executives around the country, particularly in the headquarters 
of Pittsburgh. To the contrary I interpret views and thoughts of my 
company to various officials in the Government, whether they be in the 
executive or legislative branch. 

Mr. Dorsen. Could you please give the committee some idea as to 
the size and business operations of your company ? 

Mr. Wild. Size and business operations of the company, the com- 
pany last year had approximately $9 billion in revenue. Our profits 
were approximately $4-35 million' after — or before an extraordinary 
writeoff of $250 million. The size of my department is. if you are 
interested in that, T have about 43 or 44 employees depending on how 
many secretaries I have at the time, and I have four regional vice 
presidents working for me. We service the corporate headquarters in 
Pittsburgh. We inform all the other subsidiaries of the company of 
governmental actions, legislative actions, anything that involves — the 
Government is in all of our businesses in a big way, as you know, and 
it is important for us to know what is going on in Government and just 



5461 

keeping up with it is one hell of a task. I have a budget of over $2.2 
million, so I liave a sizable operation. I report directly to the chief at 
this point in time, in 1971 and 1972 I reported directly to the chief 
executive officer of the corporation. 

Mr. DoRSEN. Did there come a time, Mr. Wild, during the 1972 Presi- 
dential campaign when you were solicited for a campaign 
contribution ? 

Mr. Wild. You said 1972? 

Mr. DoRSEN. In that campaign. Well, let's start, were you solicited 
in 1971 for a campaign contribution? 

]\fr. Wild. I think it would be better to take it in that order. Yes, in 
1971, and my memoi-y of dates is not as precise as one or two of your 
earlier witnesses have been, but in early January or February, a Mr. 
Lee Nunn came to my office or visited and inforaied me that there was 
being set up a Committee To Re-Elect the President and that they 
would handle the campaign outside of the normal Republican channel 
which he meant the Republican National Committee, and Mr. Nunn 
was hopeful that I could arrange to get $100,000 in their hands one 
way or the other. He suggested if I wanted some verification of his 
legitimacy of his role in the operation because this was a new role for 
him — he had been up here, as you know, with the Republican Sena- 
torial Campaign Committee for any number of years, and Mr. Nunn 
suggested that if I wanted verification for his participation in this role, 
that he suggested that I contact Mr. Mitchell because he was going to 
be active in the strategy part of the campaign and Mr. Stans was 
going to handle the finances. 

Mr. DoRSEx. How long had you known Mr. Nunn ? 

Mr. Wild. Well, I knew Mr. Nunn when he was working for Senator 
Thruston Morton and since that time. I don't know how long ago that 
was. That was 6, 8 or 10 years ago. 

Mr. DoRSEN. Did you make any effort to corroborate what Mr. Nunn 
told you about his role in the campaign ? 

Mr. Wild. Yes, I did, because I was rather curious, this was early' 
1971, tjie campaign — well, firetly, I had never heard of the Committee 
To Re-Elect the President. This was something new, as far as I was 
concerned, and I have been in Washington a long time, and normally 
the Democratic and Republican committees handle these things. With- 
in a period of time, another friend of mine also had been approached 
by Mr. Nunn and he also was curious, and it was also suggested to him 
that we check this out with the Attorney General. Mr. Mitchell. So, we 
made the appointment. We did visit with Mr. IMitchell in his office at 
the Justice Department. 

Mr. DoRSEX. Who was your friend that you referred to, Mr. Wild? 

IMr. Wild. His name is Jack Mills. He is with the Tobacco Institute, 
I have known him for 10 years, I suppose, both as business friends 
and personal friends. 

Mr. DoRSEx. "Wlio made the appointment with Mr. Mitchell ? 

Mr. Wild. Mr. Mills did because I did not know Mr. Mitchell suffi- 
ciently well to get an appointment. 

Mr. DoRSEx. Did you, in fact, meet with Mr. Mitchell ? 

Mr. Wild. I, in fact, did. Mr. ]\Iills and I both met with Mr. Mitchell 
at the same time. 

Mr. DoRSEx. This was when he was the Attorney General of the 
Ignited States, is that correct ? 



5462 

Mr. Wild. That is correct. 

Mr. DoRSEN. And in the meeting in the Justice Department with 
Mr. Mitchell, what occurred at that time ? 

JNIr. Wild. Mr. Mitchell indicated that this was an operation such 
as the Committee To Re-Elect the President, that Mr. Nunn was going 
to participate in that, that he had full confidence in ]VIr. Nunn, and that 
is about it. 

Mr. DoRSEK. Was there any mention of campaign solicitation specif- 
ically or campaign contributions specifically ? 

INIr. Wild. No, there was never mention of any campaign contribu- 
tions or expressions of desire to be helpful. 

Mr. DoRSEN. Thereafter, did you make a contribution to the Presi- 
dent's reelection effort ? 

Mr. Wild. After thinking the matter over, it was my mistaken 
judgment, in hindsight, it was a mistake, but my judgment then was 
that this is something I had better do, and so I did. I didn't give him 
$100,000 ; I gavehim $50,000. 

Mr. DoRSEx. Was this a decision that you arrived at by yourself? 

Mr. AViLD. Completely. 

Mr. DoRSEN. And did you speak to any other persons in the company 
before reaching the conclusion that vou wanted to make a contribution 
of $50,000 ? 

Mr. Wild. No, sir. 

Mr. DoRSEX. And when you made this decision, what did you do? 

Mr. Wild. Well, I had to find a place for the money — where the 
money was. So I called the controller of one of our companies in the 
Bahamas and told him I needed $50,000, and he brought it to me. 

Mr. DoRSEx. What is his name ? 

Mr. Wild. His name is Mr. William Viglia. 

Mr. DoRSEX. What was the name of the company of which he was 
the controller ? 

Mr. Wild. I think he is the controller of a number of companies down 
there, but this particular company was the Bahamas Exploration, Ltd., 
I believe. 

Mr. DoRSEx. Is that a subsidiary of Gulf Oil ? 

Mr. Wild. It is a wholly owned foreign subsidiary. 

Mr. DoRSEx. Is that company still in existence ? 

Mr. Wild. No. sir; that company was liquidated sometime last year. 

Mr. DoRSEx. What was the business of that company ? 

Mr. Wild. Well, we had exploration activities going on in the Carib- 
bean area, separately and jointly with other companies, and it was 
my understanding this was its primary )')urpose. We were unsuccessful 
in finding oil down there, and it was liquidated. 

INIr. DoRSEX. How many subsidiaries, approximately, does Gulf Oil 
Corp. have ? 

Mr. Wild. AYell, I am not really the person to ask, but it is between 
800 and 400, probably closer to 400. 

Ml". DoRSEX. Do you know how Mr. Vijrlia recorded the Avithdrawal 
of the money on the books and records of the Bahamas Exploration 
Co.? 

Mr. Wild. It is my understanding that it was charged to 
miscellaneous expense account. 



5463 

Mr. DoRSEN. Did there come a time when Mr. Viglia brought you 
$50,000? 

Mr. Wild. Yes, sir. 

Mr. DoRSEN. In what form was the $50,000 ? 

Mr. Wild. It was in cash. 

Mr. DoRSEN. Do you know or recall when he brought you that money ? 

Mr. Wild. I cannot recall the precise date. It w^as sometime after 
I had met witli Mr. Mitchell; I would say April or May of 1971. 

Mr. DoRSEN. What did you do with the money ? 

Mr. Wild. Well, I believe Mr. Nunn ultimately came to my office and 
got it. 

Mr. DoRSEN. Was there any convereation at this time ? 

Mr. Wild. Well, he said thank you. I do not know whether he wah 
really expecting $100,000 or not, but he is probably a good poker 
player and figured if lie could not get all, he would get half and prob- 
ably be satisfied with it. I had a little intuition in the back of my mind 
that I might see him again. 

Mr. DoRSEX. This was in 1971 ; is that correct? 

Mr. Wild. That is correct. 

Mr. DoRSEX. More than a year before the election ? 

Mr. Wild. That is correct. 

Mr. DoRSEx. Were you contacted again ? 

Mr. Wild. Yes, sir. 

Mr. DoRSEX. When and by whom ? 

Mr. Wild. Mr. Nunn in 19 — I guess it was January of 197'2. 

Mr. DoRSEx. Where was that and what occurred ? 

Mr. Wild. Well, I think he came to my office again and indicated that 
this would be a very expensive campaign and that they wanted more 
money and he would like another $50,000, making: a total of $100,000, 
the implication being to me, and I cannot remember whether he made 
that exact statement or not, but the implication was that this was kind 
of a quota that they were expecting from large corporations. 

Mr. DoRSEX. What was the result of that meeting ? 

Mr. Wild. Well, he suggested that I might like to visit with Mr. 
Stans about this, which I did. He set the appointment up. This was— 
not my records but their records indicated that it was the 4th of Febru- 
ary, which was after — probably while Mr. Stans was still Secretary of 
Commerce, but after he had announced he was going to resign. I met 
with him for about 15 minutes. 

Mr. DoRSEx. What occurred at this meeting? First of all, wdio was 
present ? 

Mr. Wild. Just Mr. Stans and myself. 

Mr. DoRSEx. And what was said ? 

Mr. Wild. Well, he indicated that he was hopeful of obtaining $100,- 
000 from the large American corporations. Ours being one of the top 
10, he hoped that we would participate. He knew of the previous 
$50,000, and he said he would like $50,000. 

Mr. DoRSEX. What did vou tell Mr. Stans ? 

Mr. Wild. Well, I told him T would see about it. 

Mr. DoRSEX. What did you do after that ? 

Mr. Wild. I contemplated it a little further, and I guess I made 
another mistake and said, "All right, I wnll do it." So I called Mr. 



5464 

Viglia again and got the money, delivered it personally to Mr. Stans. 
By that time, he had moved to his office in the Committee To Re-Elect 
the President. 

Mr. DoRSEN. Did you deliver the money to Mr. Stans ? 

Mr. Wild. I did, in person. 

Mr. DoRSEN. Is it your understanding that the money was generated 
the same way by Mr. Viglia ? 

Mr. Wild. That is my understanding. 

Mr. DoRSEX. Did you make any contributions to any campaigns for 
Democratic candidates for the nomination of the President during 
the 1972 campaign ? 

Mr. Wild. I thought you would never ask. [Laughter.] Yes, I did. 

Mr. DoRSEN. Would you please describe what contacts you had with 
representatives of Democratic candidates themselves ? 

Mr. Wild. All right, sir. As I recall the time frame, it was in early 
January, could have been February of 1972, I was contacted by Mr. 
William Brawley, Bill Brawley, who is on the staff of Senator Jack- 
son. He called me two or three times. My intuition told me what he was 
calling about. Finally, I agreed to meet with — ^he wanted to arrange 
a meeting with me with Senator Jackson. Subsequently, that meeting 
did take place. I met with Senator Jackson and his assistant. Sterling 
Monro. 

At that time. Senator Jackson indicated that he was having a dif- 
ficult time raising money, and this was well documented, at least bv 
the press, and he was hopeful that I would be helpful. I told him I 
would see what I could do. 

What I did was arrange, through the same sources, to get $10,000 and 
delivered it to Sterling Monro. That is the last I saw of Senator Jack- 
son or Sterling Monro. 

Mr. DoRSEx. Is it your testimony that Mr. Brawley called you and 
contacted you for the contribution ? 

Mr. Wild. That is my testimony. 

Mr. DoRSEX. And is it your testimony that the subject of money was 
discussed at the meeting that you j ust described ? 

Mr. Wild. No specific sum, but when you say, "a politician says to 
someone, I hope you will be helpful," you kind of understand what that 
means. 

Mr. DoRSEx. But no sum was discussed at that meeting? 

Mr. Wild. No sum was discussed. 

Mr. DoRSEx. Were you solicited and did you make a contribution 
to any other candidate for the Democratic nomination for President in 
the 1972 campaign ? 

Mr. Wild. Yes, sir. 

Mr. DoRSEX. How did that come about ? 

Mr. Wild. Well, I have a very close friend who is from my town 
and used to work for the Petroleum Institute. I know him to be a very 
close fi'iend of Wilbur Mills. I trust hirn implicitly. He is now on a 
consulting basis and I do not know, really, who his clients are, but he 
is a friend of Congressman Mills. Again, I guess when you are not 
President, you have a little more trouble raising nionev than you do 
if you are President. So Mr. Mills was having a little difficulty. This 
was about the time of the New Hampshire primary. 



5465 

Aa:ain, I contemplated the matter and subsequently arranged to give 
$15,000 to Mr. Arnold. I assume he passed it on to the committee who 
was handling Mr. Mills' campaign. 

Mr. DoRSEN. Where was the money transferred to Mr. Arnold ? 

Mr. Wild. I imagine, as I remember, it was in my office or his office. 
They were right across the street from each other. 

Mr. DoRSEN. This money was generated in the same way by Mr. 
Viglia? 

Mr. Wild. That is correct. 

Mr. DoRSEN. In connection with any of the contributions you have 
described, did you speak with anyone else at the corporation during 
the period of time when you were contemplating making the contri- 
bution or when you in fact made the contribution ? 

Mr. Wild. No", sir,*I did not. I felt like that was my full responsi- 
bility, that I had the authority. It may sound unusual, but in my 
understanding, I did have authority, broad authority, to handle gov- 
ernmental matters. 

Mr. DoRSEN. During 1972, did you tell anyone in the company that 
you had made the contribution or allude to making the contribution 
in any way? 

Mr. Wild. Not until sometime after the contributions were made. 
It so happened that in July, the Gulf board of directors had a meet- 
ing at Reston, which we own, as you know, out here in the suburbs of 
Washington. I was playing gin' rummy and, I don't know, I guess 
the general subject of politics was being discussed and talked about. 
I knew that Mr. Stans and others were going around the country ask- 
ing for substantial contributions, and I happened to mention just — 
the conversation didn't last over one sentence, I believe — to one of our 
executive vice presidents that if we Avere approached, approached in 
Pittsburgh or anywhere else that we may have an office, that we should 
just ignore it because I felt that we had done about all that was called 
for. 

Mr. DoRSEN. \Mio was the individual to whom you spoke ? 

Mr. Wild. His name was Mr. Henry, W. L. Henry. He was one of 
our executive vice presidents. 

Mr. DoRSEN. During 1973, were you advised of the fact that the 
contribution might be made public? 

Mr. Wild, Yes, sir. 

Mr. DoRSEN. How did that come about? 

Mr. Wild. W^ell, let me see here. Sometime in the spring of 1973, 
I received a call from Mr. Nunn asking me, saying he would buy 
my lunch at the Mayflower. I accepted. We had a nice luncheon at 
the Mayflower and talked about a lot of pleasantries and unpleasan- 
tries and so on and so forth. He finally got around to, I guess, the 
reason for his luncheon invitation was to ex])ress to me the feeling that 
the Committee To Re-Elect, or at least the finance committee, was 
under substantial pressure from either Common Cause or Ralph Nader 
or the press or whatever, to make disclosures of pre-April 7 contribu- 
tions. As I remember, he said that I should be prepared to give names. 

Three or four weeks later — I tliought about this. I reallv didn't know 
what to do. I didn't discuss it with anvone. I thought a little bit about 
it at night while you are supposed to be sleeping, but I didn't. 



5466 

Then Secretary Stans called me and wanted to know how the $100,- 
000 contribution should be — he expressed again a concern at this mat- 
ter, he re<^retted it very much because these contributions were sup- 
posed to be made where no disclosure would be made. He was very 
apologetic and so forth. But at the same time, he said, it looks like 
we are going to have to make a listing of these contributions made 
prior to April 7. He asked me how I wanted it listed. 

I told him that, well, I didn't have any names to give him, so I said 
Claude Wild & A;5Sociates. 

All right, that was the conversation and he apparently either for- 
got it or thought that was not sufficient or maybe he was thinking of 
my own protection, probably was. He didn't think that would float 
vei-y good in the newspapere or anywliere else. So he called me again 
at home and asked me the same question. I gave him the same answer, 
Claude Wild & Associates. 

Mr. DoRSEN. Were you thereafter contacted with respect to this 
information again? 

INIr. Wild. The next contact I had was in a letter dated July 9, 1973, 
from Mr. Kenneth Parkinson, who was the counsel for the finance 
committee, asking me to verify the fact that $100,000 contribution had 
been made and the proper showing on their listing should be employees 
of Gulf Oil Co., Mr. and Mrs. Claude Wild. It was at that point that I 
thought things were sufficiently of a serious natui-e that I arranged 
a meeting with the chairman of the Gulf Oil Co., Mr. Dorsey, and 
discussed this matter. 

Then we obtained counsel in a short period of time, made a disclosure, 
voluntary disclosure, to the then Cox committee, and requested our 
money back from the Committee To Re-Elect the President, which we 
did obtain. 

Mr. DoRSEN. Mr. Wild, you have in front of you a letter, dated 
July 9, 1973 [exhibit No. 273-1], from Mr. Parkinson to vou, a letter 
also dated July 26, 1973 [exhibit Xo. 273-2], from your* attorney to 
Mr. Parkinson, and a letter dated July 26, 1973, from Mr. Paul E. 
Barrick [exhibit No. 273-3], treasurer", to your attorneys. Are those 
the letters to which you referred in your testimony ? 

Mr. Wild. Yes ; the one I have is the one of July 9 and counsel wrote, 
was in contact with the other attorneys. 

Mr. DoRSEx. On August 10, 1973, did the Gulf Oil Corp. make a 
public announcement of its contribution [exhibit No. 273-1] ? 

]Mr. Wild. That is the date of the press release ; yes. 

Mv. DoRSEN. Do you have a copy of that press release in front of 
you ? 

Mr. Wiu). Yes, sir, I do. 

Mr. DoRSEX. IVIr. Chairman, I have no furtlier questions at this time. 

Senator Ervin. Do you want the papers, the letters, put in the 
I'ecord ? 

Mr. DoRSEx. Yes ; I think I would. 

Senator Ervix. Let the record show tlie documents identified by the 
witness are received in evidence and will be appropriately marked as 
exhibits by the reporter. 

[The documents referred to were mai'ked exhibits Nos. 273-1 through 
273-4.*] 



•See pp. 5803-5808. 



5467 

Senator Ervin. Mr. Schultz. 

Mr. Schultz. Thank you, Mr. Chairman. 

Mr. Wild, in your discussion with Mr. Nunn in February of 1971. 
did he ask you for casli ? 

Mr. Wild. No. 

Mr. ScHui.TZ. In the course of the solicitation of the $100,000 
contribution? 

Mr. Wild. No ; he did not ask for cash. 

Mr. Schultz. In your subsequent conversation with Mr. Mitchell, 
was the sum of $100,000 ever mentioned ? 

Mr. Wild. I never discussed money with Mr. Mitchell. 

Mr. Schultz. So then, we might infer from that that cash was not 
mentioned either? 

Mr. Wild. That is correct. 

Mr. Schultz. Did Mr. Nunn or Mr. Stans, in your subsequent 
meetings, ever ask for cash ? 

Mr. Wild. No, sir. 

Mr. Schultz. Was there any conversation in any of your meetings 
with regard to your contribution in connection with the disclosure 
mentioned at all? I am talking about the solicitation conversations 
now. 

Mr. KissAM, I am not sure he understands the question. 

Mr. Wild. Are you asking me, did anyone who solicited me say there 
would be no disclosure of these contributions ? Is that your question ? 

Mr. Schultz. Yes. Was there any discussion of whether or not the 
identity of the individual who furnished the money would be disclosed 
to the public or in any public record ? 

Mr. KissAM. Were there any such discussions ? 

Mr. Schultz. Yes. 

Mr. Wild. Yes; I imderstand the question. Well, in one way or 
another it was inferred that these contributions were — it was very 
important to get them in before April 7, the day when the disclosure 
law became effective. That is basically the extent of it. I do not think 
there was any desire on the part of Mr. Stans or Mr. Numi to really 
hide these things, but there was a great push to get this money in be- 
fore April 7. So I would deduce there was some desire on the part of 
Mr. Stans to — disclosure bothers a lot of people, and I think he for one 
reason, not the reason that most people think, people just do not like 
to read their names in the paper. They become, some of them, fearful 
of robbery- and just their own personal business and, therefore, dis- 
closure is offensive to some people. I think, perhaps one reason Mr. 
Stans thought it would be easier to raise the money prior to April 7, 
when, under the laAv then existing, disclosure was not necessary to the 
detail that it is today. 

. Mr. Schultz. I understand the significance of April 7, but I was 
just wondering whether there was any conversation concerning dis- 
closure prior to that time or whether any representation had been 
made to you that there would be no disclosure. 

INIr. Wild. I truthfully cannot remember on that score. 

Mr. Schultz. Was the possibility of disclosure discussed in your 
contributions to Senator Jackson and Congressman Mills or their 
representatives ? 



5468 

Mr. Wild. The subject was never discussed. This was all pre- April 7 
and they were operating under the rules like everyone else was. 

Mr. SciiuLTz. When you were solicited for a $100,000 contribution 
by Mr. Nunn, was there any discussion in this request of the moneys 
to be contributed to come from corporate funds ? 

Mr. Wild. No, sir. 

Mr. ScHULTz. Was there any question in your mind as to where 
the money would come from ? 

Mr. Wild. In my mind ? 

Mr. ScHULTz. Yes. 

Mr. Wild. No; there was not because there was no other source 
available to me. 

Mr. ScHULTz. I believe you stated that Gulf Oil does about— did 
$9 billion worth of business last year and you yourself have a $2.2 
million budget. Could you tell me', for instance, a ball park figure of 
how many executives in Gulf Oil have incomes of over $50,000 ? 

Mr. KissAM. Does this have any relevancy at all ? 

Mr. ScHULTz. "Wliat I Avas wondering is whether it was conceivable 
that contributions could have been made by Gulf Oil executives. 

Mr. KissAM. I think a lot of this information is already on file with 
the SEC. I have no objection to him answering the question if he has 
the answer. 

Mr. Wild. I do not have the answer. 

Mr. ScHULTz. You do not have a ball park figure ? 

Mr. KissAM. Ball park figures are pretty dangerous. 

Mr. Wild. I could not guess offhand. 

Mr. ScHULTz. You do not know ? 

Mr. Wild. I do not know. No ; I do not know. 

Mr. ScHULTZ. What I am trying 

Mr. Wild. We can get that information for you and supply it for 
the record. 

Mr. SciiULTz. I am trying to make clear that there was no request 
for corporate funds by either Mr. Stans or Mr. Nunn or Mr. Arnold or 
Mr. Brawley. 

Mr. Wild. That is correct. There was never any mention of that 
by any party. 

Mr. ScHULTz. Was there any request for cash by Mr. Brawley ? 

Mr. Wild. No, sir. 

Mr. ScHULTz. Was there a request for cash by Mr. Arnold ? 

Mr. Wild. No, sir. 

Mr. SciiULTz. Would it be a fair statement to say that with the 
understanding of the usual pressures that an individual feels, when 
he is being solicited for anything, tliat the contributions that were 
requested by Mr. Brawley and Mr. Arnold and Mr. Stans bore no 
unusual significance related to each other except for the size of the 
amount of money involved ? 

Mr. Wild. Well, any time, anybody, either a person in office or his 
agent, solicits you for funds there is a certain amount of pressure. 

Mr. SciiuLTz. I understand. 

Mr. Wild. Sometimes — in the instance of the Committee To Re- 
Elect the President T dealt with two Cabinet officers, this was, I guess 
I am a weak soul, but anyway I did succumb to that, made a mistake 
in judgment for whicli I regret, shall regret. 



I 



5469 

Mr. SciiuLTz. Were any promises made to you or, were you the 
subject of any coercive efforts to encourage you to make this 
contribution ? 

Mr. Wild. No, sir, there was no theats or coercion. 

Mr. ScHULTZ. AVas the $100,000 returned to Gulf Oil Corp. on 
the same day that it was requested ? 

Mr. AViLD. It is my understanding, yes, isn't that correct? 

Mr. KissA3i. Yes. 

Mr. SciiULTz. Has the $15,000 for Mr. Mills been returned to the 
Gulf Oil Corp.? 

Mr. Wild. No; it has not. This was just revealed in court yesterday 
and received fines of the corporation, as well as myself, and met with 
your staff yesterday afternoon, we really haven't had time to get 
into that matter. 

Mr. ScHULTz. Thank you. I have no further questions, Mr. 
Chairman. 

Senator Ervix. Mr. Wild, why didn't Gulf Corp. or its subsidiaries 
make these contributions by check ? 

Mr. Wild. Well, since they were contributions by the corporation 
and since knowing this was an improper contribution, I guess I did 
not want to stir the water, so to speak, and I thought the Bahamas 
was discreet and, well, it was close. 

Senator Ervin. Did this corporation — did the subsidiary operate 
only in the Bahamas ? 

Mr. Wild. I tliink that is correct. 

Senator Ervin. Well now, isn't it a fact, to make it very explicit, 
that the contributions were made in cash rather than by check because 
the contributions were known to be illegal ? 

Mr. Wild. [Conferring with counsel.] 

Mr. KissAM. Senator, Gulf Oil has already admitted these contri- 
butions were illegal. It is not in dispute. 

Senator Ervin. I just wanted to go over it again. 

Mr. KissAM. Do you think it will aid it any ? 

Senator Ervin. I think so, because we are conducting senatorial 
hearings. 

Mr. ICissAM. Gulf Oil has conceded and will concede again, that the 
contribution violated the law. 

Senator Ervin. Well, does it concede that was the reason it was made 
by cash rather than by check ? 

Mr. KissAM. Well 

Senator Ervin. And that the reason a subsidiary recorded that as 
miscellaneous expenses was for the purpose of concealing the fact that 
the illegal contribution had been made ? 

]\Ir. KissAM. I think you have to conclude that the contributions were 
made in a manner not to attract public attention. [Laughter.] 

Senator ER^^N. Well, does anybody take issue with the fact that I 
infer that when thev were made in that manner, they were made in 
order that thev might be concealed from the public and also law 
enforcement officers and the Internal Revenue Service ? 

Mr. KissAM. No. the Internal Eevenue wasn't involved. 

Senator Ervin. Yes. I think it was the Bahamas Corp., a wholly 
owned subsidiary of Gulf. 

Mr. Wild. A wholly owned foreign subsidiary. 



5470 

Senator Ervin. Wholly owned or not ? 

Mr. Wild. Wholly owned foreign subsidiary, that is not included in 

our consolidated return. The information about the contributions was 

given to the Internal Revenue Service the same day it was given to the 

Cox committee. 

Senator Ervin. The first person who approached you asking for a 
contribution was Mr. Lee Nunn of the Committee To Re-Elect the 
President. 

Mr. Wild. That is correct. 

Senator Ervin. And he talked to you about making a contribution, 

and before you made the contribution he arranged a meeting with youi 

and himself with Mr. Mitchell ? 

Mr. Wild. No, sir. No, sir, that is not correct. He did not arrange the 
meeting. He suggested a meeting. The meeting was arranged by Jacki 
Mills. 

Senator Ervin. Well, anyway, before the contribution was made 
you and Mr. Nunn met with Mr. Mitchell ? 

Mr. Wild. No, Mr. Nunn did not meet with Mr. Mitchell and 
myself. 

Senator Ervin. It was just you and Mr. Mitchell ? 
Mr. Wild. Mr. Mills, Mr. Mitchell, and myself. 

Senator Ervin. This meeting was held in the office of Mr. Mitchell 
as Attorney General in the Department of Justice. 
Mr. Wild. That is correct. 

Senator Ervin. And Mr. Mitchell did leave you with the decided 
impression by what he said, that he was trying to assist in raising 
campaign funds for the Committee To Re-Elect the President ? 

Mr. Wild. I can't say tliat anythino; he said would infer that ; no, 
sir. He established the legitimacy of Mr. Nunn's activity with the 
Committee To Re-Elect the President, and he established the fact that 
there was a Committee To Re-Elect the President. 

Senator Ervin. Well, didn't he also make it clear to you that he 
knew that Mr. Nunn had solicited a campaign contribution from you? 
Mr. Wild. No, sir ; he didn't make it known to me in that conversation 
with him. We never talked about money. 

Senator Ervin. Well, can you explain how the written summary that 
the staff prepared, stated that Mitchell knew Wild had been solicited 
by Nunn ? 

Mr. KissAM. Senator, I don't think Mr. Wild can take responsibility 

for 

Senator Ervin. Well, I agree with you, but did Mr. Mitchell say to 

you he didn't want any campaign contribution from Gulf or you? 

Mr. Wild. You knoAv lie didn't say that. Senator. 

Senator Ervin. I am just trying to find out what he did say. He told 

you tliat vou could deal with Mr. Nunn as an authorized representative 

ofCREP? 

Mr. Wild. That is correct. 

Senator Ervin. Yes. And this occurred in 

Mr. Wild. I don't know that he used the word "deal." He said that 
yon can work with Mr. Nunn. 

Senator Ervin. Work with Mr. Nunn. 

Mr. Wild. And that he had his complete confidence. 



5471 

Senator Ervin. And did Mr. Mitchell tell you that he, Mr. Mitchell, 
vas or was to become the director of the Committee To Re-Elect the 
^resident ? 

Mr. Wild. I think Mr. Nunn told me that. I don't think Mr. Mitchell 
old me that. 

Senator Ervin. Well, anyway, this meeting occurred in the office of 
he Attorney General of the United States ? 

Mr. Wild. That is correct. 

Senator Ervin. Yes, sir. You said you decided it would be in the best 
nterests of Gulf to comply with the request made by Mr. Nunn after 
»eing requested to make a contribution. How did you figure that ? 

Mr. Wild. That was the decision I arrived at. 

Senator Ervin. Yes. How did you figure that the best interests of 
Tulf would be promoted by making a contribution ? 

Mr. Wild. Well, Senator, you have to make decisions in the context 
if the situation that existed at the time. I arrived at the decision that if 
^•e were going to be treated in an equal way, I knew other corporations 
vere going to — a big effort was going to be made, and if there was 
lot some participation on my part or our part, we may be, you know — 
vhether you call it a blacklist or bottom of the totem pole, I would just 
ike to answer my telephone calls once in a while and that may not 
lappen sometimes. 

Senator Ervin. Well, the fact is the Attorney General of the United 
states has jurisdiction over all corporate mergers, for example, does 
le not ? 

]Mr. Wild. Pie does. So does the Securities Exchange Commission. 

Senator Ervin. And Gulf, you can correct me if I am wrong, has a 
^ood many mergers from time to time. 

Mr. Wild. We have nothing pending, no merger pending, none pend- 
ng at that time. 

Senator Ervin. Xone pending at that time? 

Mr. Wild. Xone at tliat time, and none since. 

Senator Ervin. And also, the Attorney General has jurisdiction over 
mtitrust suits and many other matters that affect business, does he not ? 

Mr. Wild. Senator, he does, and there are 61 agencies of Government 
hat have something to do with the energy business in this country in 
his Government. Everybody in Government has something to do with 
Towr business, unfortunately. 

Senator Ervin. I agree. That is the reason I am opposed to so much 
jrovernment regulation. 

Mr. Wild. So am I. 

Senator Ervin. The Secretary of Commerce has a lot of things to 
io with business, does he not ? 

]Mr. Wild. Yes, he does. 

Senator Ervin. In fact, in oil import quotas, he has quite a voice in 
'he question of wliether oil quotas will be increased or lowered or abol- 
ished, does he not ? 

Mr. Wild. Well, mostly tliat was. as you knoAv, there was a great 
concentration of power inside tlie AVhite House. INIost of the big de- 
cisions, I think, weve made there. 

Senator Ervin. And you felt that the interests of Gulf would be 
promoted, because it would be naturally a good thing for any busi- 



5472 

ness to have the goodwill of people who exercise a great deal of power 
and touch their lives at so many points. 

Mr. Wild. That is right. I did not think that we wanted to be dis- 
criminated against. 

Senator Ervin. And you did not feel you could just rely solely upor 
the assumption that Government would deal with you fairly and 
justly, regardless of whether you made contributions to a particulai 
political party? 

Mr. KissAM. That is a pretty tough question, Senator. 

Mr. Wild. I am not going to say that you cannot be dealt wnth fairl} 
by the Government, certainly not, Senator. 

Senator Ervin. I notice that you made contributions to candidates 
on both sides, to two candidates on the Democratic side. 

Mr. Wild. AVhat was it the judge said yesterday, that we were 
impartial ? 

Senator Ervin. Impartial in varying degrees. 

Mr. Wild. The Republicans always cost you twice as much as the 
Democrats. They ask for twice as much. 

Senator Ervin. Was that because the demands of the Democrats were 
more moderate than those of fundraisers for CREP ? 

Mr. Wild. I do not think there is any correlation. 

Senator Ervin. Well, anyway, at the time you made this contribu- 
tion, the first contribution of $50,000, which you obtained in cash from 
the subsidiary, it was delivered to Mr. Nunn ? 

Mr. Wild. I am sorry, sir, were you asking a question or making a 
statement ? I did not understand it. 

Senator Ervin. You made a $50,000 contribution in the spring of 
1971 to Mr. Nunn, in cash ? 

Mr. Wild. That is right. 

Senator Ervin. I am told there is a vote on the conference report on 
emergency petroleum allocation. 

Mr. Wild. By all means, go and vote on it. 

Senator Ervin. We will stand in recess until we get back. 

[Recess.] 

Senator Ervin. Mr. Wild, I assume that you and your lawyer would; 
rather finish this and not have a recess for lunch ? 

Mr. Wild. Absolutely, if it is all riglit with you. 

Senator Ervin. Who suggested the amount of the first $50,000 
contribution ? 

Mr. Wild. Who suggested it ? 

Senator Ervin. Yes, was it suggested by Mr. Nunn ? 

Mr. Wild. Yes, sir. 

Senator Ervin. Then later, you had a conversation 

Mr. KissAM. Excuse me, Senator. I don't think Mr. Wild under- 
stood you. You asked who suggested the first $50,000 ? 

Senator Ervin. No, I mean the amount of it. 

Mr. KissAM. His testimony is he was asked for $100,000. He decided 
it. 

Senator Ervin. Yes. First you were asked for $100,000? 

Mr. Wild. Yes. 

Senator Ervin. And you gave $50,000. Did Mr. Nunn complain 
about the size of it or not ? 



5473 

Mr. Wild. As I indicated, I think yon were ont of the room earlier, 
Senator, no, he didn't complain abont'it. He probably was a good poker 
player and figured if he got half of what he asked for, he was doing 

all right. -,1 Tvr 

Senator Ervin. But then a little later, you had a meeting with Mr. 
Stans and Mr. Stans asked for another $50,000. 

Mr. Wild. Another $50,000, that is right, to make a total of $100,000. 

Senator Ervin. Did Mr. Stans say that as chairman of the Finance 
Committee To Re-Elect the President, he was seeking large contribu- 
tions from a number of American corporations or industries ? 

Mr. Wild. Yes. He indicated to me that he was hopeful that large 
American corporations— he didn't specify any particular number or 
who they might be, but that they should participate to the extent of 
$100,000 apiece. 

Senator Ervin. Then it was at this meeting with Mr. Stans that you 
decided that there should be another $50,000 contribution made, 
making a total of $100,000, which was the original demand of Mr. 
Nunn. . 

Mr. Wild. Tliat is correct. I didn't decide it that particular day, 
but I contemplated it a while. 

Senator Ervin. You had this conversation with Mr. Stans while he 
was still Secretary of Commerce, didn't you? 

Mr. Wild. He was. He had already announced that he was going to 
resign. 

Senator Ervin. But he was still in office? 

Mr. Wild. He was still in office. I met him in his office at the Depart- 
ment of Commerce. 

Senator Ervin. Then later, you were called twice by Mr. Stans and he 
spoke of some suit that had been brought by Common Cause or some 
other organization. 

Mr. Wild. I don't know whether it was Common Cause or the 
Democratic National Committee or who, but the resulting pressure was 
so great that they would have to release the names of the contributors, 
I will put it that way. 

Senator Ervin. So he asked you how the names of the contributors 
should be listed ? 

Mr. Wild. How— well, I think the phrase he used was how the 
contributions should be listed. 

Senator Ervin. Didn't it strike you as sort of funny that they didn t 
have a listing before that time? 

Mr. Wild. Well, he never asked for a listing. This was pre- April 7 
and there was not to be any requirement. They were operating under 
those rules at that time. He never, I guess it never entered his mmd or 
he never asked for it. 

Senator Ervin. Would it not be rather queer for an accountant by 
profession not to make a record of where two $50,000 contributions 
came from ? 

Mr. Wild. Well, that is trying to read his mind. Senator, and 1 am 
not able to do that. 

Senator Ervin. Well, you were asked some questions by minority 
counsel about where the exnected contributions of this size come from. 
Isn't it a fact that a corporate executive would have to receive a tre- 



24-650 O - 74 - 14 



5474 

mendous salary in view of our present tax laws, to make a contribution 
of $50,000 or $100,000 ? 

Mr. Wild. Yes, sir ; 1 would say so. 

Senator Ervin. If my recollection serves me right, I believe that along 
about 54 percent — that along about when a man reaches the income of 
$50,000, the Federal Government alone takes something like 53 percent 
of it and when it gets to $64,000, they start taking 55 percent, and when 
he lives in a State that also has a State income tax, why, by the time 
the tax gatherers get through with him, he hasn't got much left. That 
is true in the great majority 

Mr. Wild. That is so in my case, Senator. 

Senator Ervin. So any man who goes out and seeks a $50,000 or 
$100,000 contribution, if he does not expect those to come from corpo- 
rate funds as against individual funds, in every instance, he ought to 
win an award for sim^jleness ; ought he not 'i 

Mr. Wild. That is your statement. Senator, not mine. 

Senator Ervin. Mr. Wild, don't you think it is very unfortunate that 
we have so much regulation of business in America that business 
necessarily is susceptible of being coerced by people in authority to 
make a campaign contribution which, if left to themselves, they 
certainly would not make ? 

Mr. Wild. I could not have said it better. 

Senator Ervin. Don't you agree that Congress should give serious 
consideration to making it a criminal offense for any official clothed 
with great governmental power to solicit or receive a campaign 
contribution ? 

Mr. AVild. Senator, I don't think I would be prepared to go quite that 
far. There is certainly the right of an individual to do what he pleases 
with his money. 

Senator Ervin. I agree with you on that. But this is a different 
question, I think. Here, for example, is an Attorney General of the 
United States who has so much power and in large part, discretionary 
power over American business 

Mr. Wild. That is right. 

Senator Ervin. And likewise the Secretary of Commerce, which in 
many cases is discretionary in nature, that when he requests a campaign 
fund, it is almost a coercive practice, isn't it'^ It is quite close to it, 
isn't it? 

Mr, Wild. Well, that is the way it came through my brain, anyway. 

Senator Ervin. That is the way it strikes me from the testimony we 
have received here, not only from you but from others and, therefore, 
wliile I think an American citizen has perhaps a first amendment right 
to try to influence public sentiment in any way within his poAver, I do 
think that tlie American businessmen are entitled to some protection at 
the hands of Government. It strikes me that one of the effective ways to 
do it, would bo for Congress to enact a law making it a criminal offense 
for a man who has large discretionary governmental power to go out 
and solicit campaign contributions. 

Mr. Wild. Well, that would limit you to those in the executive 
brancli of Government. 

Senator Ervin. Yes, but there is already 

Mr. Wild. There is a great deal of solicitation done by the legislative 
branch, too. 



5475 

Senator Ervin. There is a statute already on the books that makes it 
a criminal offense, for me as a Senator, to go out and solicit a contribu- 
tion from a Federal employee and that was put there to protect the 
Federal employees from demands made by Senators and Congressmen. 

]Mr. Wild. That is correct. 

Senator Ervin. And it seems to me we ought to have a law to pro- 
tect American business and American people against demands made by 
people who possess and exercise great governmental powder in the ex- 
ecutive branch of Government. 

Mr. Wild. I certainly think serious consideration should be given 
to that type of legislation. 

Senator Ervin. And the situation you described here, I think, has 
almost become inevitable because people have to face realities, and 
realities of business are pretty drastic in many ways, they are subject 
to so much Government regulation. 

Mr. AViLD. That is correct. 

Senator Ervin. That is all. 

Senator Baker. 

Senator Baker. Mt. Chairman, thank you very much. 

Mr. Wild, I have read the staif interview and I have listened to your 
testimony or to most of it this morning, and the central legislative 
purpose of this committee recurs in my mind as I hear your words and 
assess your dilemma. I suppose at some point the Congress will have 
to consider at length the alternative merit of a continuation of the 
private financing of Presidential campaigns, versus those proposals for 
public financing of Presidential campaigns. I will not burden you 
greatly with, a comparative analysis of the two concepts. I would 
rather invite your comments on the private financing side and assume, 
for the sake of this interrogation, that we elect to proceed with private 
financing of Presidential campaigns in the future and decide to do 
what we can to increase its responsiveness and to improve its 
character. 

One thought that occurs to me and I would like 3^our com.ment on 
it, because you are familiar with the Washington scene, you have been 
through a difficult situation already and I think you are uniquely 
qualified to give is a judgment. One thing I would like to ask, is 
whether or not you would think there is any merit to a proposal that 
would bar any contribution by anyone except a person, that is a 
citizen, an individual. I think particularly of the existing law, of 
course, against contributions by corporations but there is no such law 
against contributions by partnerships, by associations, by trade 
groups, by unions. There are great numbers of aggregations of people 
that more often than not have a particular interest, who can and do 
contribute. Whether you are talking about COPE or whether you are 
talking about AMPAC or BIPAC, whatever you are talking about, you 
are talking about a contribution that may very well have a relationship 
to a legislative purpose and it seems to me, if you limited contribu- 
tions to individuals and excluded contributions from associations or 
groups or aggregations of people, that you would get closer to an ex- 
pression of support by the electorate. After all, associations — neither 
COPE nor BIPAC vote, only its members vote and obviously, we have 
a member here because there is a law against campaign contributions 
by corporations and we have dealt with the transgressions in that re- 



5476 

spect. But would you care to express any view to me on whether that 
w^ould be an improvement or not, assuming that we continue with the 
private financing of political campaigns for President ? 

INIr. Wild. It is a very deep subject and I personally have thought 
about it for some time, but I never can come to any conclusion because 
there are so many — it is such a confused area. If you take one action 
then something else happens. The AMPAC, and the BIPAC opera- 
tions that you are talking about, those are contributions from indi- 
viduals. I contributed to BIPAC, for instance. 

Senator Baker. So is COPE. 

Mr. Wild. And COPE, that is correct. We ourselves have a good 
Government fund which our individuals contribute to and 

Senator Baker. Which is recognized under the statute? 

Mr. Wild. In Gulf, our Gulf employees. 

Senator Baker. Which is recognized under the statute. But you see 
what I am driving at. 

Mr. Wild. But, you see, I don't have any firm conviction on your 
question. Senator. I think it is something that certainly deserves a great 
deal of thought and when you get into the question of limitations of 
amounts wdiich is an important area, disclosure, and some people think 
a corporation itself, being a person in the legal light, should be per- 
mitted to — I am not saying that is my position — but I am saying there 
is a body of thought that a corporation within prescribed limits 
should be able to make a contribution as long as — and I think complete 
disclosure is an absolute must. I don't think anybody likes the system 
like it is., 

Senator Baker. A corporation doesn't vote; AMPAC, BIPAC, 
COPE, they don't vote. Is there some requirement in the election 
scheme in the United States that nonenfranchised, artificial entities, 
such as corporations or associations, ought to be able to contribute even 
though they can't participate in the elective process. I mean what is 
the justification for that? Shouldn't financial support be limited to the 
same segment, sector of the population that can give their franchise 
support, people wlio vote ? 

Mr. Wild. I wasn't arguing for the corporate view^point, Senator. 

Senator Baker. I understand, Mr. Wild. But I am 

Mr. Wild. They do pay taxes, and there is — some people think they 
might have a right to express their views and if they are going to be 
regulated by the Government as severely as they are 

Senator Baker. What do you think about the relative merit of pub- 
lic versus private financing? 

Mr. Wild. Well, that is a difficult question. 

Senator Baker. I am not asking you to express Gulf's opinion. I can 
see your lawyer 

Mr. Wild. It makes my lawyer a little nervous for me to discuss 
this matter. 

Mr. KissAM. It isn't a question of that, Senator. You are asking ques- 
tions which manv, many people wish they knew the answers. I know 
that one of the functions of your committee is to try to get the an- 
swers, and these are ratlier monumental questions and Avhile I have 
great 

Senator Baker. Well, they are monumental questions but he doesn't 
have to give mo a monumental answer. I will take it in stride. Why 
don't you just tell me what you think about it? 



5477 

Mr. KissxVM. I am afraid the best answer is he honestly doesn't know 
and if you people do know 

Senator Baker. Well, many people don't know, 

Mr. KissAM. That is why he can't give you an answer. 

Senator Baker. But Claude Wild has been on the Washington scene 
for a long time, lie is a lobbyist, he has known political workings in this 
icity, he lias recently gotten himself into a bind, and I can't think" of a 
better man under more appropriate circumstances to comment from 
the heart on what he thinks about revising the campaign situation. 

Now, Claude, if you will, which one would you rather do? 

Mr. KissAM. Do you mind if I make a minor correction ? 

Senator Baker. Yes. 

Mr. Kissam. He is registered as a lobbyist but his primary function 
is as a vice president. 

Senator Baker. O^^. All the other factors stand. Now, tell me 
Avliat you think. 

Mrl Wild. Well, my personal view- is. Senator, that we should have 
a little bit of both, public as well as private financing, and I think that 
if you take care of the subject that Senator Ervin was driving at, pub- 
lic financing for a national campaign such as for the Presidency is — 
might be in a different character than a campaign for Senator and 
Congressman or Governor or Avhatever you may have. 

Senator Baker. But you wouldn't intermix; in your view, you 
wouldn't intermix public and private financing, say, in one race for 
President. 

Mr. Wild. I don't see why it couldn't be done if there are proper 
limitations. 

Senator Baker. Do you think it ought to be done ? 

Mr. Wild. Either that or control the costs of campaigns. Wlien it 
costs $60 million to run a campaign for one party, I think that is a — 
that is unreasonable. 

Senator Baker. Mr. Wild, let me ask you one last and concluding 
question : The contributions about whicli you have testified were all 
made prior to April 7 ? 

Mr. Wild. That is correct. 

Senator Baker. The new law- went into effect, of course, on April 7. 

Mr. Wild. Yes. 

Senator Baker. AAHiat is the probability that such a contribution 
would have been made with funds channeled through your Baha- 
mian subsidiary more or less as you have described it to us had it 
been after April 7, what effect would the new campaign law have had 
as a deterrent on that contribution ? 

Mr. Wild. I don't think the legality would have changed from one to 
the other. 

Senator Baker. Do you think the contribution would still have been 
made after April 7 ? 

Mr. Kissam. You are asking him to speculate, of course, you appre- 
ciate that. 

Senator Baker. What T am really trying to do, of course, is to see 
how effective a statute might be in the judgment of this witness. I 
understand that he is speculating, but the committee has to s]ieculate 
pretty good if we are going to come up with recommendations on what 
ought to be done. 



5478 

Mr. Wild. I think if the time frame would have been April 7, or 
whenever the Watergate break-in took place, I think that might have 
been a significant factor as far as my own thinking would be con- 
cerned. 

Senator Baker. So you are saying so far as April 7 is concerned, that 
might or might not have prevented an illegal contribution, but April 7 
coupled with June 21 probably would have ? 

Mr. Wild. Well, it would have a dampening effect on my enthusi- 
asm, I must say that. 

Senator Baker. So, in effect, what you are telling me, Mr. Wild, is 
that the precedent that has been established, the problem that has been 
identified by new^spaper and radio and television publicity and by the 
hearings of this committee, possibly have served as a deterrent to such 
contributions as well as the deterrent factor of the statute that went 
into effect April 7? 

Mr. Wild. I think so, very clearly. 

Senator Baker. Thank you, Mr. Chairman. 

Senator Ervin. I might state in ])roof of that — I got a letter from 
my colleague, who happens to be a Republican, asking me to make a 
contribution to the Young Republicans because they said the Water- 
gate thing had cut down their contributions. [Laughter.] 

Senator Baker. Did you make it, Mr. Chairman ? 

Senator Ervin. No. 

Senator Baker. I commend it to you. 

Senator Ervin. Senator Montoya. 

Senator Montoya. Mr. Wild, you mentioned that you also made 
contributions to campaigns of Senator Jackson and Congressman 
Mills. 

Mr. Wild. That is correct, sir. 

Senator Montoya. Did you make these contributions out of corpo- 
rate funds ? 

Mr. Wild. Yes, sir. 

Senator Montoya. "What did you do with the funds that you ac- 
cumulated under the Gulf Good Govonnnent Fund ? 

Mr. Wild. Well, prior to April 7, I sent^I do not know the fig- 
ures — I think it was in the period of 1971 through April 7 of 1972. in 
the neighborhood of $50,000 or $60,000. No contributions have been 
made since that time. 

Senator Montoya. Did you make any contributions to any of the 
Presidential candidates out of that fund ? 

Mr. Wild. No, sir. 

Senator Montoya. How was the monev delivered which was deliv- 
ered to the Committee To Re-Elect the President? 

Mr. Wild. Well, it Avas delivered in cash. Is that what you mean? 

Senator Montoya. Yes To what individuals did you deliver it? 

Mr. Wild. Oh, to Mr. Nunn in one instance and to Secretary Stans 
in- another instance; to Mr. Monro — Sterling Monro in the case of 
Senator Jackson, and to Carl Arnold in the rase of Wilbur Mills. 

Senator jNIontoya. Do T undei-stand that you had two meetings with 
Mr. Stans with respect to the second $50,000, then ? 

Mr. Wild. That is correct, sir. 

Senator Montoya. The first one, when he told vou that he needed 
another $50,000 and that it was customary for big corporations to 
contribute $100,000 ? 



5479 

Mr. "Wild. Well, he did not use the word "customary," but he was 
expecting $100,000. That is what he was going to ask. AVhether he 
would have been satisfied with something less than that, I do not 
know. 

Senator Montoya. Did it not become a customary thing? 

Mr. Wild. Apparently, it did ; yes, sir. 

Senator Montoya. The Gulf Corp. issued a press release on August 
10, 1973. 

INIr. AViLD. Yes, sir. 

Senator Montoya. I will quote from this press release as follows — 
third paragraph : 

These contributions were made In response to persistent requests to Gulf's 
Washington representative, Claude C. Wild. Jr.. from representatives of the 
Finance Committee to Re-Elect the President. The company was not seeking 
any special favors and did not have any corporate activity under Government 
scrutiny. 

There was enormous pressure in the political system, and the fact that others 
apparently also yielded is evidence of this. This pressure was intense * * *. 

Now, was Gulf Corp. correct in making this evaluation of the 
kind of pressure that Avas applied ? 

Mr. Wild. Well, we were talking in the release about pressure in the 
whole political system. 

Senator ]Montoya. How would they know about the other pressures 
and not know about the pressure that v>as applied to you ? 

Mr. Wild. This was written after they found out about the pres- 
sures. I did not disclose anv of this information to anyone prior to 

Senator Montoya. Well, were they not directing the context of the 
statement to the pressure that was applied as a basis for their corpo- 
rate funds being used in the contribution? Was that not the main 
thrust of this release ? 

Mr. Wild. The first thrust of the release, I think, was that there was 
pressure in the system on me as a representative of the corporation. 

Senator Montoya. Yes. Now, what kind of intense pressure was 
applied to you by these individuals? Let us start with Mr. Nunn, and 
then let us continue with Mr. Stans. 

Mr. Wild. I guess the wording here, "intense pressure," is subject 
to various interpretations, but in my days, I considered it consider- 
able pressure when two Cabinet officers and an agent of one of the 
the committees that was handling the election asking me on various 
occasions that I have enumerated, the times that I have enumerated, 
asking me for funds — that is just a little bit different than somebody 
collecting for the Boy Scouts. 

Senator Montoya. In other words, having been around Washington 
for quite a bit, you read the message. 

Mr. Wild. Well, I thought I had a message. 

Senator Montoya. That is all, Mr. Chairman. Thank you very much. 

Senator Ervin. Any further questions of counsel ? 
. Mr. DoRSEN. I have a couple, Mr. Chairman. 

Mr. Wild, you indicated that you might have made a contribution 
in the same form between April 7 and June 21. How would you have 
listed this contribution if there were going to be public disclosure? 

Mr. Wild. I did not say I would have made a contribution. 

Mr. DoRSEN. You said you might have, I believe. 



5480 

Mr. Wild. This was a discussion with Mr. Baker. I did not contem- 
plate any 

Mr. KissAM. I think you are incorrect in your recollection, Mr. 
Dorsen. I think he indicated this would be speculative, what would 
you do if 

Senator Ervin. This is somewhat hypothetical, and we have enough 
trouble on facts without going into hypotheses. 

Mr. DoRSEN. Let me ask you, Mr. Wild — ^the contribution was listed 
on the records of the Committee To Re-Elect the President as from 
employees of Gulf Oil Corp. I understand your understanding is some- 
what different than Mr. Stans, is that correct ? 

Mr. Wild. That is correct. 

Mr. DoRSEN. If someone were to come to you and say, show me how 
this money was generated, are you in a position to do that? Your name 
was listed under the phrase, "Employees of Gulf Oil Co.," rather than 
"Claude Wild Associates." Were you in a position to identify in any 
fashion the source of that $100,000 *? 

Mr. Wild. You mean something like in behalf of the 

Mr. DoRSEN. No, I mean Common Cause, this committee, or any- 
body else ? 

Mr. KissAM. In addition to the testimony he had already given to 
you? 

Mr. Dorsen. No, what I am suggesting is this: The records that 
were about to be made public, or possibly about to be made public, 
indicated employees of the Gulf Oil Corp. and your name as the source 
of the contribution. If you were required to give more detail, how 
would you have gone about giving more detail ? 

Mr. KissAM. This also is a highly speculative question. You mean 
there is a law passed and you are operating under the new law or a laAv 
about to be passed, or what ? 

Mr. Dorsen. I can be more specific. The objective is that if you are 
not in a position to answer that question following inquiries that were 
going to take place following the disclosure of this information, how 
voluntary is your disclosure ? 

Mr. KissAM. I think the disclosure was complete because as soon as 
it became known. Gulf voluntarily came to Washington, took it up 
with the tax people, and admitted that the source of the funds was 
corporation funds. I can't conceive of any way of being more com- 
plete than that. 

Mr. Dorsen. What I am suggesting is, if it had not been done that 
way, it might have come out in some other fashion. I do not mean to 
detract from Gulf Oil Corp.'s coming forward, but I am suggesting 
that if there was a lawsuit or any other way that Mr. Wild would be 
put under oath or in a deposition, he could have explained the $100,000 
contribution. 

Mr. Ktssam. No matter how you go at it, it is funds of the corpora- 
tion, period. It was a wliolly owned subsidiary. He said that they were 
corporate funds. Tliev were corporate funds, period. 

Mr. Dorsen. Mr. Wild, along the lines of this organization, you are 
the second corporate executive wlio lias testified concerning the for- 
eifrn source of these funds. Is there a valid corporate purpose in per- 
mitting large transfers of cash from foreign subsidiaries to American 
companies? 



I 



5481 

Mr. KissAM. I don't know whether he is qualified to answer that or 
not in the scope of his corporate responsibilities, but if he thinks he is, 
I have no objection. 

Mr. Wild. I would think that any corporation ought to have a 
right to transfer large sums of money. After all, with $9 billion of 
revenue and -400 subsidiaries, there are going to be a lot of transfers of 
funds. I don't know how on earth— I am not qualified, really, to an- 
swer this question, but I am just speculating to you that it would be 
impossible to prevent transactions, transfers of funds. How could a 
company operate ? 

Mr. DoRSEX. What I am talking about is possible legislation requir- 
ing the reporting of transfers of currency above a certain amount. Do 
you think that would hamper the operations of the company for which 
you work ? 

Mr. Wild. There is already a law on the books that you cannot — I 
don't know that it is prohibitive, but you just have to register your 
money if it is over $5,000 to bring it into the United States. 

Mr. DoRSEN. Do you know if tliis was registered ? 

Mr. Wild. This was all done before the law took effect. 

Senator Ervin. There is a law, as I underetand it, that requires any 
financial institution that pays out money in cash at one time in excess 
of $5,000, to list the serial number of the bills, as I understand it. 

Mr. Wild. I don't know. I am not familiar with that. It could be. 

Senator. , . , , • j. i t 

Senator Ervin. I believe that is the law. There is a little bit ot law 1 
don't know for certain. 

Mr. KissAM. You know a lot of laws. 

Mr. Dorsex. Just a last question. I gather from your testimony that 
at the meeting with John Mitchell, there was no discussion of any 
possible problems of Gulf Oil Corp. ; the only purpose of the meeting 
was, in effect, for Mr. Mitchell, Attorney General Mitchell, to vouch 
for T^e Nunn, is that correct, as a responsible official ? 

Mr. Wild. That is correct. 

Mr. Dorsen. And Mr. Lee Nunn was a high official in the Finance 
Committee To Re-Elect the President ? 

IVIr. Wild. That is correct. 

Mr. DoRSEX. I have no further questions. 

Senator Ervin. Mr. Schultz. 

Mr. Schultz. I have no further questions. 

Senator Ervin. Thank you, Mr. Wild. 

The committee will stand in recess until 10 o'clock tomorrow 
morning. 

[\Vhereupon, at 1 :10 p.m., the committee recessed, to reconvene at 
10 a.m., Thursday, November 15, 1973.] 



THURSDAY, NOVEMBER 15, 1973 

U.S. Senate, 
Select Committee on 
Presidential Campaign Activities, 

Washington. B.C. 

The Select Committee met, pursuant to recess, at 10:10 a.m., in 
room 318, Russell Senate Office Building, Senator Sam J. Ervin, Jr. 
(chairman), presiding. 

Present : Senators Ervin, Montoya, and Weicker. 

Also present: Fred D. Thompson, minority counsel; Rufus L. 
Edmisten, deputy chief counsel ; Arthur S. Miller, chief consultant ; 
David M. Dorsen and James Hamilton, assistant chief counsels; 
Ronald D. Rotunda, Barry Schochet, W. Dennis Summers, and Alan 
Weitz, assistant majority counsels; Michael J. Madigan, Richard L. 
Schultz, and Robert Silverstein, assistant minority counsels; Jed John- 
son, investigator; Lacy Presnell, assistant investigator; Pauline O. 
Dement, research assistant ; Eiler Ravnholt, office of Senator Inouye ; 
Bruce Jaques, Jr., office of Senator Montoya; A. Searle Field, 
assistant to Senator Weicker ; John Walz, publications clerk. 

Senator Ervin. The committee will come to order. Counsel will call 
the first witness. 

Mr. DoRSEN. Camilo Fabrega. 

Senator Ervin. Will 3^ou stand up, please, and hold up your right 
hand? Do you swear that the evidence that you shall give to the Senate 
Select Committee on Presidential Campaign Activities shall be the 
truth, the whole truth, and nothing but the truth, so help you God ? 

Mr. Fabrega. I do. 

Mr. DoRSEN. Counsel will identify himself. 

Mr. Lyons. Dennis Lyons of Arnold & Porter, Washington, D.C. 

Mr. DoRSEN. Mr. Chairman, Mr. Fabrega is a national and resident 
of Panama and is appearing voluntarily. 

I would like, with the permission of the Chair, to read first a press 
release of Braniff Airways, Inc., in order to place Mr. Fabrega 's role 
in the proper perspective [reading] : 

Braniff Airways, Incorporated said today — 

And that is August 23, 1973— 

that it had made a voluntary disclosure to the OflBce of Special Prosecutor 
Archibald Cox concerning contributions made in 1972 to the Finance Committee 
to Re-Elect the President. 

Contributions were made on two occasions to the committee totaling $50,000. 
The first contribution, in the amount of .$10,000, was contributed out of the 
pergonal funds of Harding L. Lawrence, chairman of Braniff, and of another 

(5483) 



5484 

officer of Braniff. The chairman of the committee, who received the first contri- 
bution, solicited a substantial further contribution, and in response to this 
solicitation, moneys were made available in the amount of $40,000 out of 
corporate funds. 

Certain officers of Braniff and other individuals identified themselves as donors 
of the $40,000 contribution and, the spokeman for Braniff stated, these individ- 
uals reimbursed Braniff for the total amount of the contribution. 

The spokeman also stated that no business deduction had been taken for the 
corporate payment and that the corporate payment had had no effect on Braniff's 
reported revenues or net income. 

The spokesman also stated that a disclosure of the transaction had been made to 
the staff of the Civil Aeronautics Board. 

Mr. Chairman, Mr. Lawrence will be a witness on another day and 
it is our intention now to question ]Mr. Fabrega concerning his knowl- 
edire of the contribution. 

Mr. Fabrega, where do you live ? 

TESTIMONY OF CAMILO FABREGA, ACCOMPANIED BY DENNIS 
LYONS, COUNSEL 

Mr. Fabrega. I live in Panama, sir. My position in Panama is 
regional vice president for Braniff. As a vice president I am responsible 
for the operation in that country. 

Mr. DoRSEN. Is this your only business in Panama ? 

Mr. Fabrega. At Braniff, yes, and then I had personal business. 

Mr. DoRSEN. What is the amount of monthly ticket sales for Braniff 
in Panama ? 

Mr. Fabrega. Amounts of about half a million dollars a month. 

Mr. Dorsen. Am I correct that the U.S. currency is used in Panama ? 

Mr. Fabrega. Yes, we operate with paper money and we use the 
dollar. 

Mr. DoRSEN. Do you own a company called CAMFAB ? 

Mr. Fabrega. Yes. sir, I do. 

Mr. DoRSEN. IVhat is the nature of the business of CAMFAB Co. ? 

Mr. Fabrega. CAMFAB is a private enternrise, family enterprise, 
family company, and we do business in condominiums, apartments. 

Mr. DoRSEN. Does that company have anything to do with Braniff? 

Mr. Fabrega. No, sir, it does not. 

Mr. DoRSEK. Did there come a time in March of 1972 when you were 
contacted by a Charles South of Braniff ? 

Mr. Fabrega. Pardon me. sir? 

Mr. DoRSEN. Were you contacted by Mr. South of Braniff ? 

Mr. Fabrega. Yes, sir. 

Mr. DoRSE^^ Who is Mr. South ? 

Mr. Fabrega. Mr. South is the vice president in charge of Latin 
American Division. 

Mr. DoRSEX. You had a conversation with him at that time ? 

Mr. Fabr?:ga. Yes, sir, I did. 

Mr. DoRSEx. What Avasthat conversation? 

Mr. Fabrega. Mr. South called me up and requested if there was any 
way I can help him to raise some fuiids. 

Mr. DoRSEX. Did he tell vou how iinicli he wanted to raise? 

Mr. Fabrega. He wanted to raise about $40,000. 

Mr. DoRSEx. Did he tell you why he wanted to raise money ? 

Mr. Fabrega. No, sir. 



5485 

Mr. DoRSEX. Was anything else of significance said in that conver- 
sation? 

Mr. Fabrega. Xo, sir. The only thing what I mentioned, I have the 
company which I help him was CAMFAB. 

^Ir. DoRSEX. Did you have a later conversation with Mr. South? 

Mr. Fabrega. Yes. After a few days he called me back and he told 
me that he is going to issue a check under the name of CAMFAB and 
would send it to me to Panama. 

Mr. DoRSEx. And what happened after that ? 

Mr. Fabrega. After that I went to the bank and I cashed the check 
for $40,000. 

Mr. DoRSEX. You received a check from Mr. South ? 

Mr. Fabrega. Yes, sir. 

Mr. DoRSEX. Do you have the exhibits in front of you that we have 
described. Could you please turn to tab 2 [exhibit 274-2], and I ask 
you if that is a copy of the check that you received and cashed? 

Mr. Fabrega. Right, sir. 

Mr. DoRSEX. What did you do with the $40,000 in cash ? 

Mr. Fabrega. AYell, after I cashed the check I took the money to my 
house, which I put in a safe over there. 

Mr. Dorsex. And that was the $40,000, is that correct ? 

Mr. Fabrega. Yes, sir. 

Mr. Dorsex. And can you place this in time, when was this check 
cashed ? 

Mr. Fabrega. Well, I believe I cashed the check — as soon as I received 
a check, I cashed it. 

Mr. Dorsex. And the check is dated March 29, is that correct, 1972 ? 

Mr. Fabrega. Yes, sir. 

Mr. Dorsex. Did you take the $40,000 and deliver it to Mr. South? 

Mr. Fabrega. Yes, sir. A few clays after I came over to Dallas for 
business and I brought the money over to him. 

Mr. Dorsex. Did you have a conversation with Mr. South concern- 
ing any repayment of this money in any form or raising any cash 
concerning this $40,000 ? 

Mr. Fabrega. Not at that time. I delivered it to him. 

Mr. Dorsex. When did you have a conversation ? 

Mr. Fabrega. About a couple of weeks after he called me up in 
Panama and he said he would have to pay this money back to the 
company, and he will send me some ticket stocks. 

Mr. Dorsex. Ticket stocks ? 

Mr. Fabrega. Yes, sir. 

Mr. Dorsex\ These are blank tickets ? 

Mr. Fabrega. Blank tickets, of course for Braniff, to be sold in 
Panama and from this money to pay him back. 

Mr. Dorsex. Did you receive these tickets ? 

Mr. Fabrega. I received the ticket stocks. 

Mr. Dorsex. What did vou do with them ? 

Mr. Fabrega. When the tickets arrived in Panama I gave them to 
one of my supervisors to put on the counter to be sold. 

Mr. Dorsex. Did the supervisor sell the tickets ? 

Mr. Fabrega. Yes, sir. She sold the tickets. 

Mr. Dorsex. What where her instructions ? 



5486 

Mr. Fabrega. My instruction was for her to sell the tickets and mab 
reports just like other tickets but on these special tickets these report! 
have to be, to give it to me. 

Mr. DoRSEN. What is the normal procedure with respect to ticket 
sold by Braniff in Panama ? 

Mr. Fabrega. The usual procedure that every ticket that we sold w 
make a special form and this has to be sent over to our accounting 
people in Panama. 

Mr. Dorsen. How often is this done ? 

Mr. Fabrega. That is on a daily basis. 

Mr. Dorsen. What happened with respect to the tickets that you 
supervisor sold on the basis that you just described ? 

Mr. Fabrega. For these tickets, she was giving a report to me an( 
this report was taken over to my house and put in my safe. 

Mr. DoRSEN. Did you get cash for these tickets or get 

Mr. Fabrega. No ; I only got cash for these reports. Once in a whili 
we have checks, t^o. 

Mr. Dorsen. Did you ask her to try to obtain just cash for thes' 
tickets ? 

Mr. Fabrega. I told her this ticket has to be sold only on a cash basis 

Mr. DoR&EN. What happened that made that impossible? 

Mr. Fabrega. Sometimes people was coming over to the counter t(' 
buy some tickets and at the last minute didn't have enough cash an( 
then they make a check. 

Mr. DoRSEN. What did you do with the cash and checks that you s< 
received ? 

Mr. Fabrega. Well, I took this money over to my house, as I ex 
plained before, and then when I have about a few thousands I was 
come over to Dallas on other trips and I was delivering this money 
to Mr. South with this report- 
Mr, DoRSEN. How often did you do this ? 

Mr. Fabrega. I don't recall, but it may have been maybe three oi 
four trips I made. 

Mr. Dorsen. As of the end of December 1972, how much money had 
you generated by ticket sales in this fashion ? 

Mr. Fabrega. You mean by December ? 

Mr. Dorsen. Yes; by December 1972 how much money had beer 
obtained ? 

Mr. Fabrega. I believe it was about, I mean, there was a total amount 
of $27,000 which I delivered. 

Mr. Dorsen. And you delivered the entire $27,000 to Mr. South? 

IVfr. Fabrega. Yes, sir. 

Mr. Dorsen. Did you have a conversation with Mr. South at the end 
of December? 

Mr. Fabrega. Yes; when he told me tliat lie has some pressure from 
Braniff that we have to pay the $40,000 to the company and to please 
to try to see if I can get the total amounts to cover the $40,000. Well, 
then, T t.old him, "Charlie, what T can do is T liave to go over to the bank 
to borrow some monev for my own business. Tf vou want to I can 
borrow tlie difference from tlie 5??40,()00." Tt was $18,000, which T did. 
and then T boucht a draft which T sent to him. 

Mr. Dorsen. That is that $13,000 draft payable to Braniff which 
represented money you had personally borrowed from a bank in 
Panama, is that correct? 



5487 

Mr. Fabrega. Yes, sir. 

Mr. DoRSEx. Mr. Fabrega. I direct your attention to tab 3 [exhibit 
274_3] and ask you if the documents other than the first two pages of 
hat exhibit reflect, among other things, the cliecks that you delivered 
;o Mr. South as well, including the $13,000 check that you had 
X)rrowed ? 

Mr. Fabrega. Yes, sir, right sir. 

Mr. DoRSEX. Did you get repaid the $13,000 that you borrowed ? 

Mr. Fabrega. Yes, sir, they paid me Ijack in just the same way, selling 
tickets. 

Mr. Dorsen. What did you do with the money then ? 

Mr. Fabrega. Well, I mean it was my money, $13,000. 

Mr. DoRSEN. And you recovered the entire 

Mr. Fabrega. I recovered the entire $13,000. 

Mr. Dorsex. And approximately when did you receive the final bal- 
mce on the $13,000 ? 

Mr. Fabrega. I don't recall but I believe it was about February, 
March, or April, something like that. 

Mr. Dorsex. It was early 1973, is that right? 

Mr. Fabrega. Yes, sir. 

Mr. Dorsex. Did you have any tickets left over? 

Mr. Fabrega. YevS. All the tickets he had to send back to Dallas. 

Mr. Dorsex. Did you send them all back ? 

Mr. Fabrega. Yes, sir. 

Mr. Dorsex. During this entire period did you know the purpose of 
the $40,000, what the $40,000 was going to be used for ? 

Mr. Fabrega. No, sir. 

Mr. Dorsex. I have no further questions at this time, Mr. Chair- 
man. 

Senator Ervin. Mr. Madigan. 

Mr. Madigax. Mr. Fabrega. in addition to the CAMFAB Corp., 
what other businesses, if any, do you operate in Panama? 

Mr. Fabrega. You mean besides Braniff ? 

Mr. Madigan. Yes ; besides your work for Braniff, what else do you 
do? 

Mr. Fabrega. I have other businesses in Panama, sir. 

Mr. Madigax. What do they consist of ? 

]\Ir. Fabrega. I have a hotel business. I have a restaurant business. I 
have a few franchises, regular franchises — Avis Rental Car. 

Mr. Madigax\ Do I understand your testimony to be that, subse- 
:(uent to the request for you to raise this money, at no time did you 
have any idea as to what the money you raised was going to be used for 
by Mr. South and the people at Braniff ? 

Mr, Fabrega. Never, sir. 

Mr. ISIadigax. Did you sell these tickets in the ordinary course of 
business the same as you would sell any other tickets ? 

Mr, Fabrega. Right, sir. 

Mr. Madigax. Did you employ any procedures to make sure that you 
received only cash and not checks for these tickets ? 

Mr. Fabrega. Yes; that was my instruction given to me by Mr. 
(South. 

Mr. Madigax. And why was that ? 

Mr. Fabrega. Why? Because I did not want to get involved in 
tehecks, just in cash. 



5488 

Mr. Madigan. My question is why didn't you want to be paid by 
means of checks ? 

Mr. Fabrega, Why I did not want to be paid in checks ? 

Mr. Madigan. Right. 

Mr. Fabrega. Because for me it was easy to get in cash the money 
and take it over to the States. 

Mr. Madigan. Was that not unusual for you, to come to Texas with ; 
cash ? 

Mr. Fabrega. Never, sir. 

Mr. Madigan. So I take it that this was something unusual for you 
to raise money in cash and bring it to Texas, is that right ? 

Mr. Fabrega. That is correct, yes, sir. 

Mr. Madigan. Now then, you have no knowledge whatsoever as tci 
any conversations that may have occurred between anyone at the Com- 
mittee To Re-Elect the President and any official of Braniff Airways, , 
is that correct ? 

Mr. Fabrega. No, sir. 

Mr. Madigan. Did you have to pay interest on this loan that you re- 
ceived, this $13,000? ' 

Mr. Fabrega. Yes, sir, I had to pay it back with interest. 

Mr. Madigan. How did you get repaid that interest ? 

Mr. Fabrega. In the same way, by selling tickets, sir. 

Mr. Madigan. You continued selling the tickets? 

Mr. Fabrega. Right, sir. 

Mr. Madigan. Did you sell them for checks or cash ? 

Mr. Fabrega. Cash. 

Mr. Madigan. How did you insure that you would always be paid 
in cash for the tickets ? What if a customer wanted to pay by check ? 

Mr. Fabrega. If a customer wanted to pay by check, we would take' 
the other stock which we had and issue tickets. 

Mr. Madigan. I take it that you knew that there was something ir- 
regular about this batch of tickets that you received from Mr. South i 
and then proceeded to sell ? 
Mr. Fabrega. Yes, sir. 

Mr. Madigan. I do not believe that I have any further questions, Mr. 
Chairman. Thank you. 

Senator Erven. Senator Montoya. 

Senator Montoya. No questions, Mr. Chairman. 

Senator Ervin. Senator Weicker. 

Senator Weicker. No questions, Mr. Chairman. 

Senator Ervin. I have no questions. 

Thank you very much for making a voluntary appearance here. 
Had it not been for your willingness to do so, we could not have had 
you appear personally as a witness. 

Mr. Fabrega. I am happy to do it. 

Thank you. 

Senator Ervin. Counsel will call the next witness. 

Mr, DoRSEN. Mr. Neal Robinson. 

Senator Ervin. Mr. Robinson, do you solemnly swear that the evi- 
dence you shall give to the Senate Select Committee on Presidential 
Campaign Activities sliall be the truth, the whole truth, and nothing 
but the truth, so help you God? 

Mr. Robinson. I do. 

Mr. DoRSEN. Would you please give your name for the record? 



5489 

TESTIMONY OF NEAL ROBINSON, ACCOMPANIED BY DENNIS LYONS, 

COUNSEL 

Mr. KoBiNSON. My name is Neal Kobinson. I am assistant treasurer 
of Braniff Airways in Dallas. 

Mr. DoRSEN. You are also represented by Mr. Lyons? 

Mr. Robinson. I am. 

Mr. DoRSEN. How long have you been assistant treasurer of Braniff 
Airways ? 

Mr. Robinson. Since March 1973. 

Mr. DoRSEN. Am I correct, Mr. Robinson, that you had no knowl- 
edge of any events concerning these transactions until late July of 
this year, when you were asked to examine and trace some transaction ? 

Mr. Robinson. That* is correct, sir. 

Mr. DoRSEN. Did you conduct an examination and attempt to trace 
the various entries that went into and comprised this transaction? 

Mr. Robinson. I did. 

Mr. DoRSEN. Mr. Robinson, I direct your attention to tab 1 [ex- 
hibit 274—1] that you have before you. 

Mr. Robinson. Yes, sir. 

Mr. DoRSEN. Can you identify that exhibit? 

Mr. Robinson. This is our file copy — Braniff file copy of the check 
made payable to CAMFAB, along with the remittance advice, mean- 
ing remittance attached. Immediately following is a voucher check 
support, which is used in the ordinary course of business to support 
the request for personal funds. In this particular case, it is charged to 
the accounts receivable account. 

The third piece of paper appears to be an interoffice request for 
payment to CAMFAB in the amount of $40,000. 

Mr. DoRSEN. What is tab 2 [exhibit 274-2] ? 

Mr. Robinson. Tab 2 is a copy of a check, both sides, made payable 
to CAMFAB, which in this case had been attached. 

Mr. DoRSEN. So tab 2 is a check in advance for expenses and services 
to CAMFAB Co. ; is that correct? 

Mr. Robinson. That is correct. 

Mr. DoRSEN. Is that an unusual type of transaction, according to 
your experience? 

Mr. Robinson. No ; Braniff is a large corporation and it is ordinary 
for Braniff on occasion to advance money for services and expenses. 

Mr. DoRSEN. Could you please direct your attention to tab 3 and 
tell us what that is — a portion of that, of course, has already been 
described by Mr. Fabrega. 

Mr. Robinson. This asfain is a cash accounting report which is used 
bv Braniff to record the receipt of cash. In this particular case, 
$81,679. 

The second sheet is a cash receipt item distribution form and it 
shows the collection of $40,000 crediting accounts receivable to 
CAMFAB and of the cash account. 

Mr. DoRSEN. Is that a series of entries of odd amounts ? 

Mr. Robinson. The debits to the cash account are a series of entries 
of odd amounts. There is one single credit to the CAMFAB account 
receivable. 

Mr. DoRSEN. Does the balance of those documents in tab 3 [exhibit 
274—3] reflect checks deposited to the account of Braniff? 

24-650 0-74-15 



5490 

Mr. RoBiNsox. They reflect deposits of cash and checks, $19,203 38 
with various support for the checks. 

Mr. DoRSEN. Is the second document to which you refer a series of 
entries reflecting- receipt of money by Braniff an unusual document 
according to your experience ? 

Mr. Robinson. It would be; yes, sir. 

Mr. DoRSEN. In what way would it be unusual ? 

Mr. Robinson. Well, it would not be usual to receive a corporate 
account to liquidate account receivable a series of checks in odd 
aniounts made payable to Braniff International by different parties. 

Mr. DoRSEN. I direct your attention to tab 4 [exhibit 274-i]. Could 
you summarize what this is ? 

Mr. Robinson. These are copies of sheets from Braniff's detailed 
account analysis. It reflects all transactions which are made to accounts 
in a given period. In this particular case, two documents are present, 
one showing a debit to account 128013, which is a commercial account 
receivable ; the other showing a credit to account 128013 subsequent 
to that, both m the amount of $40,000. 

Mr DoRSEN. Under accounting procedures performed by Braniff 
and other airlines, is income from the accounting point of view o-eii- 
erated before tickets are sold ? *' 

Mr. Robinson. I would prefer to state that from an accounting stand- 
point, revenues are recognized— realized— when earned. That occurs 
when a passenger flies. 

Mr. DoRSEN. How is it treated when a ticket is purchased? 

Mr. Robinson. Wlien a ticket is purchased, either cash or account 
receivable becomes a debit to the cash account or receivable account 
and a credit to account 2160, which is earned passenger transportation 
revenue. 

Mr. DoRSEN. I direct your attention to tab 5 [exhibit 27^5] and ask 
you to identify that. 

Mr. Robinson. This is a cash accounting report which shows the 
receipt of $40,000 in cash crediting 216011, which is unearned pas- 
senger transportation revenue. 

Mr. DoRSEN. Wliat is the source of those funds ? 

Mr. Robinson. The source of those funds are checks from Braniff 
officers and others in varying amounts totaling $40,000 [exhibit 274-6]. 

Mr. DoRSEN. Am I correct, then, that according to your inquiry, 
Braniff was repaid by its executives the $40,000 expended out of cor- 
porate funds ? 

Mr. Robinson. That is correct, sir. 

Mr. DoRSEN. To your knowledge was reimbursement sought from 
the Finance Committee To Re-Elect the President? 

Mr. Robinson. To my knowledge, it was not. 

Mr. DoRSEN. Mr. Robinson, if you can do so briefly, would vou ex- 
plain why it is that according to the i^ress release of Braniff, there 
were no income tax consequences flowing from the transactions that 
you describe ? 

Mr. Robinson. I^.t me state first that none of the amounts ever 
reached the income statement whicli wjis to be required for the trans- 
actions to have income tax effect. All tlie entries were balance sheet 
entries and were balance sheet in effect. 



5491 

Two dates really become significant in terms of the flow of any 
moneys unearned transportation revenue. One is July 31, the other 
is December 31. The unearned passenger transportation revenue ac- 
30unt is reconciled 5 months subsequent to a balance sheet date, such 
;hat the balance sheet amount as of July 31 must be reconciled on 
December 31. It would show the progression of items through that 
iccount. 

In our particular case, all moneys were returned to Braniff prior to 
July 31, 1973, such that no adjustment was required in unearned pas- 
senger transportation. No adjustment, therefore, was made to un- 
earned revenue. 

Mr. DoRSEN. Mr. Chairman, I ask that tabs 1 through 6, identified by 
the witnesses, be accepted as part of the record. 

Senator Ervin. They will be received in evidence and appropri- 
ately numbered as exhibits by the court reporter. 

[The documents referred to were marked exhibits Nos. 274-1 through 
274-6.*] 

Mr. DoRSEN. I have no further questions. 

Senator Ervin. Mr. Madigan. 

Mr. Madigan. Mr. Robinson, I take it that while there were no tax 
consequences, there was an attempt to conceal this transaction by 
means of the false invoice that appears in exhibit 274-1; is that 
C5orrect ? 

Mr. RoBixsoN. I really can't comment with respect to the intent. 
I had no knowledge of this transaction at the time it was made. 

Mr. Madigax. You will agree, will you not, that this is an invoice 
which purports to indicate that $40,000 was paid by Braniff to the 
CAMFAB Co. for expenses and services and, in fact, that is not tru^e, is 
it? 

Mr. RoBixsox. Well, I don't believe that I can comment on what the 
intention might have been at the time that check was drawni, sir. It 
would appear that it may have been, but I really don't believe that I 
would be knowledgeable as to the intent. 

Mr. Madigax. Well, from your examination of the books, you have 
found, have you not, that there were no expenses and services for which 
the CAMFAB Co. would have been paid ? 

Mr. RoBixsox. There were not, sir. 

Mr. Madigax. Now, if this sale of irregular tickets and use of those 
tickets by the passengers had occurred in May and June rather than 
December, I take it that there would have been tax consequences pur- 
suant to the July 31 accounting, is that right ? 

Mr. RoBixsox. Had they occurred in significant amounts prior to 
July 31, 1972, they may have been recognized in the adjustment entry 
on December 31, 1972. As it turns out, the account of earned passenger 
transpoitation revenue was, in fact, overstated. 

Mr. JNIadigax. That recognition, as you put it, would have produced 
tax consequences, w^ould it not ? 

Mr. RoBixsox. It would have. 

Mr. Madigax. Xo further questions, Mr. Chairman. 

Senator Ervix, Senator Weicker. 

Senator Weicker. No questions, Mr. Chairman. 



•See pp. 5810-5834. 



5492 

Senator Ervin. Senator Montoya. 

Senator Moxtoya. Just a couple of questions, IMr. Chairman. 

When is the fiscal year of Braniff — when does it terminate ? 

Mr. RoBixsoN. The fiscal year is the calendar year. It terminates on 
December 31 of each year. 

Senator MoxTOYA.'What negotiations or conversations did you have 
in-house when you started account No. 216011 with respect to the 
credit of $40,000 ? What instructions did you receive, what conversa- 
tions transpired with respect to this ? 

Mr. Robinson. Senator, are you speaking of the credit to 216011 
which was made July 1973 ? 

Senator Montoya. No, I am speaking of the cash accounting report 
dated July 31, 1973, in which you assigned account No. 216011 and 
entered a credit of $40,000. 

Mr. Robinson. Senator, I received no instructions at that time to 
debit or credit any specific account. From my examination, I deter- 
mined that the account which would be deficient should the transaction 
continue the way that it had so far would be 216011, that that was the 
appropriate account to credit with $40,000. 

Senator Montoya. Was this a running account in the organization ? 

Mr. Robinson. 2160 is the account specified by the cash accounting 
report. It is a running account. The balance is quite heavy. 

Senator Montoya. I notice you have printed numbers for the other 
accounts and this is written in ink. 

Mr. Robinson. The document that you are looking at is a cash 
accounting report, showing receipt of funds for a number of purposes. 
Those most usually represented on this particular document have a 
preprinted account number and specified in the ordinary balance. 
That would be correct. In this case, the cash accounting report also 
provides for the entry of accounts which were not preprinted and 2160, 
as you see, is not listed, and therefore had to be written. 

Senator Montoya. Is this the date on which you received the 
$40.000 ; that is, July 31 ? 

Mr. Robinson. Sir, it is my understanding that the checks were 
received several days in advance of July 31, 1973. 

Senator Montoya. How far in advance ? 

Mr. Robinson. A few days, sir. 

Senator Montoya. That is all, Mr. Chairman. 

Senator Ervin. This entry to the effect that this $40,000 had been 
transferred to CAMFAB Co. was fictitious, was it not, to conceal what 
actuallv happened to it ? 

Mr. Robinson. Sir, as I stated earlier, I really do not feel that I can 
comment with respect to whether it was fictitious or not at the time. 
I have stated, however, that I found no expenses that may have 
occurred with respect to CAMFAB. 

Senator Ervin. Can you tell exactly how this money got from 
Panama to the TTnited States ? 

Mr. Robinson. Sir, I have no knowledofe about the money. 

Senator Ervin. Do the papers you have analvzed as an accountant 
disclose that? 

Mr. Robinson. Excuse me. sir? 

Senator ER^^N. Do these papers disclose to you as an accountant, 
as to how this $40,000 contribution managed to get from Panama to i 
the United States? 



5493 

Mr. Robinson. No, sir, they do not. What they do disclose is the 
.money was deposited in the operating account in the First National 
in Dallas and, therefore, had to be physically carried to Dallas. 

Senator Ervin. I know Braniff is a very large company with many 
interests. Is it customary for individuals to carry cash payments as 
much as $40,000 rather than carrying checks or some other method? 

Mr. Robinson. No, sir ; it is not the usual course of business. 

vSenator Ervin. Well, the company issued a press release to the ef- 
fect they did make a corporate contribution of $40,000 to the finance 
Committee To Re-Elect the President. And this money— this $40,000— 
was either used by the Committee To Re-Elect the President or was still 
retained by the Committee To Re-Elect the President, was it not? 

Mr. Robinson. Yes, sir. 

Senator Ervin. The corporation never got a refund yet ? 

Mr. Robinson. Sir, the corporation has received payments from 
corporate officers. 

Senator Ervin. But that was done, was it not, after there was some 
demand by Common Cause that this contribution, that the people who 
made this contribution be made — their names be disclosed? 

Mr. Robinson [conferring with counsel]. Sir, I really do not know 
what the purpose was. 

Senator Ervin. When does the record show that the executive of- 
ficers of Braniff reimbursed Braniff ? 

Mr. Robinson. In July of 1973, sir. 

Senator ER\^N. Well, that was long after the election which had hap- 
pened the previous November. 

Mr. Robinson. Yes, sir. 

Senator Ervin. And is the only inference to be drawn by you as an 
accountant from the papers that up to that time the corporate contribu- 
tion was in the hands of the Committee To Re-Elect the President, 
and still is? 

Mr. Robinson. Yes, sir. 

Senator Ervin. Well, in view of the way this was handled I will have 
to say some men are like the Lord in one respect, they move in mysteri- 
ous ways their wonders to perform. 

Thank you very much. 

Mr. Robinson. Thank you. Senator. 

Senator Ervin. Wait, one question. 

Do you know whether these executive officers who repaid Braniff 
for the corporate contribution previously made by Braniff to the Com- 
mittee To Re-Ele<;t the President have" ever been reimbursed by any 
kind of a bonus arrangement on the part of Braniff ? 

Mr. Robinson. Sir, it is my understanding they have not been. 

Senator Ervin. Thank you. 

Counsel will call the next witness. 

Mr. Edmisten. Mr. Chairman, the next witness will be Mr. George 
A. Spater. 

Senator Ervin. Mr. Spater, will you hold up your right hand? Do 
you swear that the evidence that you shall give the Senate Select Com- 
mittee on Presidential Campaign Activities shall be the truth, the 
whole truth, and nothing but the truth, so help you God ? 

Mr. Spater. I do. 

Senator Ervin. Be seated. 



5494 

Will counsel identify himself for the purpose of the record ? 
Mr. Cutler. My name is Lloyd N. Cutler, counsel for Mr. Spater. 
Senator Ervin. Counsel may proceed. 

Mr. Edmisten. I think Mr. Spater has an opening statement that he 
would like to read. ^ 

TESTIMONY OF GEORGE A. SPATER, ACCOMPANIED BY LLOYD N. 

CUTLER, COUNSEL 

Mr. Spater. Until September of this year I was chairman and chief 
executive officer of American Airlines. And as the committee also 
probably knows, in July of this year American voluntarily disclosed 
to the Special Prosecutor and to the public that in the fall of 1971 I 
was approached by Mr. Herbert W. Kalmbach and asked to arrange 
for a contribution of $100,000 to the Committee To Re-Elect the Presi- 
dent. I was told that contributions of this amount would be regarded 
as in a special class. Since I knew that Mr. Kalmbach was the Presi- 
dent's personal counsel as well as counsel to American's principal com- 
petitor, I decided that some affirmative response was necessary. I did 
arrange for contributions aggregating $75,000, of which $50,000 came 
from American Airlines corporate sources and the balance from per- 
sonal sources. 

Full details of how the corporate source contribution was generated 
and paid have been provided to the staff of the committee as well as to 
the Special Prosecutor, but, in brief summary, I informed an Ameri- 
can financial officer that we might be asked for a substantial contri- 
bution, perhaps as much as $100,000. Some months later he advised me 
that the money was available. I later learned, and this was a great deal 
later, in 1973, that it had been generated by an invoice for payment 
of a commission to a Lebanese firm for the sale of used aircraft. It so 
happens that the principal in the Lebanese firm has performed real 
services for American Airlines from time to time, but in this case this 
invoice was a false one. By arrangements with him the funds were 
returned in cash to American, and $55,000 of this total was used to 
make the contribution to the committee. The $55,000, along with the 
$20,000 obtained from personal sources was delivered on Mr. Kalm- 
bach's instructions to the committee's offices in Washington. Payments 
were made in cash. There were three installments of $5,000 each, the 
first one in December 1971, and final installment of $60,000 was made 
in INIarch of 1972. 

Turning to a separate point, I would like to describe the circum- 
stances which led up to my decision of last July to make a full disclo- 
sure of the matter before the pertinent facts had become known to 
the Government from other sources, and I shall also want to oifer 
some suggestions for removing what I see as unfair pressure that is 
placed on business executives under our present system of campaign 
financing. 

In April 197-3, after these contributions had been made, representa- 
tives of the Committee To Re-Elect the President asked American how 
the $75,000 of contributions should bo recorded on the list the com- 
mittee anticipated it would have to file in the Common Cause lawsuit. 
After an extensive review of the matter with counsel, and a review 
by counsel of the facts, I decided that the illegality of the contribu- 



5495 

tion from corporate sources should not be compounded, and that all the 
facts should be disclosed to the appropriate authorities. 

As a result of the counsel's discussion with the Special Prosecutor 
and his staff, we decided to join with the Special Prosecutor in making 
a public disclosure of the facts. Encouragement for such a public 
disclosure came from Mr. John Gardner of Common Cause. Our 
counsel had consulted Mr. Gardner because of his earlier public in- 
vitation to corporate executives to come forward and to disclose any 
unreported pre-April contributions in the 1972 Presidential campaign. 
And although I knew then how much personal damage these public 
disclosures would do, I concluded that they ought to be made, and 
they were made. 

Attached to my statement is American Airlines' press release of 
July 6, 1973, disclosing the corporate contribution. 

It is true that in making these steps we sought to mitigate the law 
violation involved in the corporate contribution by assisting the Spe- 
cial Prosecutor's enforcement effort. In addition to disclosing our 
own wrongdoing, it provided details that should help the prosecutor 
in investigating other cases. ISIoreover, by making the public announce- 
ment, we enabled the Special Prosecutor in his statement of July 6 to 
urge other companies to follow our example and come forward volun- 
tarily in an effort to put an end to illegal campaign funding practices 
and, in fact, at least six other major national companies did so, and 
those names of companies have been announced. 

The Special Prosecutor recognized this contribution to law enforce- 
ment in his announcement of last October 17 which I also have 
attached to this statement. He stated that he believed American's 
decision to come forward voluntarily at a time when no other corpo- 
ration had evidenced any willingness to do so, "had something to do 
with prompting others to come forward with voluntary disclosures of 
corporate contributions." 

I believe, and I hope, that American's disclosure also helped to 
stimulate Senate passage of S. 372, which it finally enacted and great- 
ly strengthened the present campaign financing laws, and I strongly 
support the strengthening of these laws. 

Turning to the area of remedial legislation, I believe that the pres- 
ent system places unfair pressures both on the candidates and on 
corporate executives. As I have said before, I said specifically in my 
statement of July 6 that most contributions from the business com- 
munity are not volunteered to seek competitive advantage but are 
made in response to pressure for fear of a competitive disadvantage 
that might result if thev are not made, and the process, in my opinion, 
clearly degrades both the donor and the donee. 

The present situation is particularly dangerous when the pressure 
is implicit in the position occupied by the individual making the 
solicitation. I suggest, however, that congressional consideration be 
given to the advisability of making certain individuals wholly ineligi- 
ble to engage in campaign solicitation. In effect, this is really expand- 
ing the number of individuals who are ineligible. In particular, I 
recommend that solicitation by individuals who have just left the 
Cabinet, or who have just left other high positions in the Government, 
or by individuals who are personal representatives of officers currently 
holding such positions be made unlawful. 



5496 

Now, there is one other aspect, and I am departing somewhat from 
my written statement to introduce this, that I think cries for legisla- 
tive remedy. 

The usual legislation which forbids acts by corporations also in- 
cludes officers, directors, and principal stockholders. There is no com- 
parable feature in either the existing legislation or anything that I 
have seen discussed, that is, take for example, corporation A that has 
stockholders, excuse me, that has officers who have held very profitable 
stock options ; they can, under existing legislation make a gift ; they can 
give $50,000, whatever figure they desire. In case B, a corporation 
that has very large principal stockholders, perhaps all of his income i 
is derived from the corporation, perhaps all of his assets are derived 
from the corporation, he is free to make a gift of $50,000. Corporation 
C, which doesn't have any politically minded directors or rich direc- 
tors, that either cannot make a gift or must make only an illegal gift, 
now if this is looked at purely from the standpoint of the impact on 
the Government, any possible influence that might exist, there is abso- 
lutely no distinction that can be made between the case of corpora- 
tion A, corporation B, or corporation C. It has exactly the same im- 
pact. But in one case corporation C which happens to be my situa- 
tion, I have done something that is wrong and I realize it is wrong, 
on the other hand, the same impact can be had by other companies and 
is currently the case in other companies that make contributions 
through their directoi^s or principal stockholders, and I think that is 
a very unfair thing, and there is certainly nothing inherent in our law 
that says that a corporation that doesn't have rich directors or big rich 
stockholders shouldn't somehow or other be prejudiced in our process 
of administration of the Government. 

But wliatever the proper legislative remedy may be, I feel strongly 
a disclosure such as those being made during these hearings compel 
prompt remedial action. It is time to put a stop to such practices, and 
I pledge to do all I can to support corrective legislation that Common 
Cause and others are advocating. 

I would just like to add in closing that I think this committee has 
made one of the great contributions to the history of our Republic, 
to good administration of Government, and I think it can go on and 
make another enormous contribution by pressing for remedial legisla- 
tion which will take off the unfair pressures which exist both on candi- 
dates and on businessmen under the present law. Thank you very 
much, sir. 

[The documents above referred to follow :] 

PRESS RELEASE OF .TULY 6, 1973 

The special prosecutor, Archibald Cox, announced today that one of the 
Nation's major corporations — American Airlines — lias voluntarily acknowledged 
illegal corporate contributions to the Committee To Re-elect the President in 
1971-72 and agreed to cooperate fully with this office. 

Mr. Cox noted that the Federal election laws, .specifically section 610 of the 
Federal Criminal Code, forbid coriiorate contril)utions to political campaigns 
and that campaign committees, campaign officials, corporations, and also in- 
dividual cori)orate officers violate 18 TT.S.C. 610 when such a contribution is made.. 
He added, "We are not adopting any blanket policy toward either corporations 
or individual officers ; but it is fair to .say that when corporate officers come ■ 
forward voluntarily and early to disclose illegal political contributions to can- 



5497 

idates of either party, their voluntary acknowledgment will be considered 
lS a mitigating circumstance in deciding what charges to bring." 

The Watergate special prosecution force is pressing ahead its investigation 
ato violations of campaign contribution laws. Mr. Cox commended the forth- 
ight action of American Airlines' executives and expressed the hope that other 
esponsible corpoi-ate executives would also realize the damage created by 
llegal campaign financing and come forward like American Airlines in an effort 

put an end to such practices. "Whether they come forward or not," he said, 
'we intend to get to the bottom of illegal campaign funding practices." 

George A. Spater, chairman of American Airlines, confirmed that American 
Lirlines officials made cash contributions totaling $75,000 to the Committee To 
le-Elect the President. He said that some of the contributions came from 
orporate funds in possible violation of the campaign financing laws. 

Mr. Spater said that before any knowledge of these facts had reached the Gov- 
irnment from other sources, American disclosed the full circumstances to the 
ippropriate authorities. "Our purpose in so doing and in making this public dis- 
losure," he said, "has been to mitigate any resulting charges or penalties against 
he officials involved, and also to focus attention on the evils of the present polit- 
cal fund-raising system. We need honest and sensible new laws that will effec- 
ively reduce both the pressures on candidates to seek political campaign contribu- 
ions from business firms, and the pressures on business firms to make such 
ontributions." 

Mr. Spater said that he took full corporate responsibility for the decision to 
Qake the contributions. He said, "I was solicited by Mr. Herbert Kalmbach, who 
aid that we were among those from whom $100,000 was expected. I knew Mr. 
Calmbach to be both the President's personal counsel and counsel for our major 
omi^etitor. I concluded that a substantial response was called for. At my direc- 
ion, American officials made the payments of $75,000 in cash in five installments 
rom November 1971 through March 1972, of which the first four, totaling $20,000, 
ame from noncorporate sources ; and the last $55,000, paid in March 1972, came 
rom corporate sources." 

"Based on my knowledge and experience in the business community," Mr. 
3pater said, "I believe that such pressures have been regularly applied by cam- 
)aign solicitors, and that contributions made by corporate officers and employees 
ire directly or indirectly financed out of corporate funds to an extent that creates 

1 significant national problem. I do not make these statements in criticism either 
)f campaign solicitors or of campaign contributors, or of any political party or 
andidate. All of them are victims of a bad campaign financing system. 

"We need stronger campaign financing laws. The present laws are hypocritical 
ind, in the view of our counsel, may be unconstitutionally vague. The law says 
hat it is improper to solicit a corporation or for a corporation to make political 
ontributions, but allows political contributions to be solicited from and made by 
salaried officers and employees of a corporation or from a stockholder who derives 
substantial income from the corporation. The corporation, however, is usually the 
arget of the solicitation and usually receives the political credit for the contribu- 
ions that are made. The corporation with independently wealthy officers or 
stockholders is thus placed in a preferred position in comparison with a corpora- 
ion whose officers or stockholders are less fortunately endowed. 

"The law is allegedly designed to prevent corruption in government, but does 
lot focus on the factors that lead to corruption— it is based on a system by which 
andidates for public office must seek funds from persons affected by the actions 
)f such candidates when elected to office. The system provides no limits on the 
otal amount that may be raised or spent, and hence places a premium on pres- 
sure to raise greater and greater amounts. 

"Under the existing laws, a large part of the money raised from the business 
ommunity for political purposes is given in fear of what would happen if it were 
not given. A fair and honest law is one that would remove the need of any candi- 
late to exert .such pressures, as well as the need for any businessman to re- 
>pond. 

"I fully support the propo.sals made by Common Cause and many legislators of 
both parties to reform existing election laws relating to the support or political 
candidates. I urge others in our position to come forward. I urge the business 
ommunity to get behind campaign financing legislation that will really work, and 
fhat will put a stop to pressures to which officers of companies are subject when 
•iolieited for campaign contributions." 



5498 

Watergate Special Prosecution Force, 

Washington, D.C., October 17, 1973. 

FOR IMMEDIATE RELEASE 

Special Prosecutor Archibald Cox issued tlie following statement today : 

I am today announcing a general policy toward violators of 18 U.S.C. 610, the 
law prohibiting corporate contributions in connection with Federal elections. 

You may recall that, on July 6, American Airlines, Inc., became the first com- 
pany to voluntarily acknowledge an illegal corporate contribution. I said then 
that when corporate officers come forward voluntarily and early to disclose such 
acts, this would be considered as a mitigating circumstance in deciding what 
charges to bring. 

Since then a number of corporations have come forward, at various times and 
under various circumstances. We also have underway investigations of some 
other illegal corporate contributions by "nonvolunteers" — cases where the parties 
have not come forward voluntarily. 

Today we have filed criminal charges against three corporations and two 
corporate chief executives, and it seems an appropriate time to generally describe 
our policies and make clear how we expect to proceed in the future. 

As a matter of prosecutive policy and commonsense, the effective enforcement 
of a statute prohibiting corporate contributions to political campaigns requires, 
absent the most unusual circumstances, that the responsible corporate officer be 
charged as well as the corporation. Without such a policy, the statute will have 
little deterrent effect. 

So the general policy of this office, even in cases where the company voluntarily 
came forward, will be to charge the primarily responsible corporate officer with 
the misdemeanor violation of section 610 of title 18, as well as charging tlie 
corporation. Only the most unique circumstances would warrant a departure 
from that policy. In accordance with that policy we have charged Goodyear 
Tire & Rubber Co. and Minnesota Mining & Manufacturing Co. and individual 
officers of those two corporations with the misdemeanor violations of .section 610. 

We have also charged American Airlines. Inc., with the misdemeanor violation 
of section 610, but in that case we have not charged the responsible individual 
corporate officer and we have not done so principally because American Airlines 
and its chairman, George Spater, were the first to voluntarily come forward, at a 
time when no other corporation had evidenced any willingness to do so, and 
that, in my judgment, is a unique and specially mitigating circumstance. I 
believe that the example of American Airlines had something to do with prompt- 
ing others to come forward with voluntary disclosures of corporate contributions. 
We will be bringing charges in the weeks to come against other corporations and 
corporate officers, both "volunteers" and "nonvolunteers." 

There are, in addition, certain aggravating rather than mitigating circum- 
stances where more serious charges may be brought. In those cases where the 
violators do not come forward voluntarily, but the violations are uncovered as a 
result of investigation by this office, we may in serious instances charge the 
individual corporate officer or officers with the willful felony violation of section 
610 rather than the misdemeanor. This more serious charge might also be brought 
in instances in which there are indications that the contribution was given with 
the intent improperly to influence some Government action, or where there has 
been an effort to conceal or withhold evidence of other Federal crimes by the 
persons under investigation. 

Finally, it should be understood that, while we have established these public 
policy guidelines to govern our handling of these and future cases of violations 
of 18 U.S.C, section 610, the.se policies will be subject to review as our investi- 
gations and pro.secutions go forward, and as we are better able to asse.ss the 
prosecutive effectiveness of these policies. 

Senator Ervin. Counsel. 

Mr. Edmisten. Mr, Cutler, will you identify for tlie record your 
two associates? 

Mr. Cutler. With me is my imrtner Mr. Howard Willeus sittinsf 
to my immediate left, and to tlie rifjht Mr. Herbert J. Miller, both 
also of counsel to Mr. Spater of American Airlines. 

Mr. Edmistex. Mr. Spater, were you at one time the general coun- 
sel for American Airlines? 



5499 

Mr. Spater. I was. 

Mr. Edmisten. And you are familiar with legal ramifications of all 
natters affecting American Airlines ? 

Mr. Spater. Yes. 

Mr. Edmisten. When was the first time you met Mr. Herbert Kalm- 
Dach? 

Mr. Spater. I can't be exactly sure but I think I met him at a Re- 
Dublican dinner given in Washington, in March 1971. I have a vague 
recollection, I have tried to search my memory, that I met him at that 
lime. I don't recall any particular conversation that I had with him 
l)ut I think that I may have met him on that instance. 
1 Mr. Edmisten. So you laiow of no discussion at that particular 
linner with Mr. Kalmbach regarding any contribution because you 
lon't even know whether he was there or not ? 

iNIr. Spater. Yes. 

Mr. Edmistex. When was the next time you met Mr. Kalmbach ? 

^fr. Spater. The next time I met him was in July, it was on July 30, 
071, and the circumstance was that I had been asked by a Mr. Hof- 
jron — Mr. Hofgren had been at the Eepublican dinner, asked me to 
lave lunch with Mr. Kalmbach and I agreed to do that and I did 
lave lunch. 

Mr. Edmisten. Will you explain who Mr. Hofgren is, and tell us 
omething about him? 

Mr. Spater. He is a partner or officer in Goldman, Sachs, an invest- 
nent banking firm in New York. Prior to that time he had various 
)ositions in the Government. The only one I am familiar with, and 
naybe this is the only one, that it was, as I recall in 1969, he was work- 
ng with jNIr. Ellsworth who was part of the administration and later 
)ecame, I think, assigned to some job in Europe, that is where I first 
net him. 

Mr. Edmisten. Wasn't Mr. Ellsworth in the White House in an 
irea that decided on foreign routes awarded ? 

Mr. Spater. Yes, very briefly. I also found out later, I didn't know 
it the time Mr. Hofgren was at some point a vice chairman of the Com- 
nittee To Re-Elect the President. Finance Committee To Re-Elect 
;he President. 

Mr. P^DMiSTEN. He vras your first contact ? 

Mr. Spater. Yes. 

Mr. Edmisten. Now, you had this luncheon with Mr. Kalmbach; 
vhat did you discuss at that luncheon ? 

Mr. Spater. Well, the lunclieon didn't discuss much about finances. 
[ think Mr. Kalmbach told me that he was engaged, or INIr. Hofgren 
explained, in raising money from large givers, and other than that the 
onversation was a general one about weather, golf or some other 
lubiect of that type. 

Mr. Edmisten. Now you met Mr. Kalmbach on a third occasion, 
vhere was that ? 

Mr. Spater. Yes, sir. Mr. Kalmbach called me several months later, 
md my recollection is that he called from California, although I 
•annot be sure of that, and asked me would I have dinner with him 
ind he named the place, 21 Restaurant in Ncav York. The date the 
linner was held was October 20, and I think he called me sometime in 
September although it seemed a long time in advance. It was well in 
idvance of the date when the dinner meeting was held. 



5500 

Mr. Edmisten. At this particular dinner was this where Mr. Kalm- 
bach mentioned to you the words like ''Special class" ? 

Mr. Spater. Yes, sir. 

Mr. Edmisten. Hundred thousand dollar contributors would be in 
a special class? 

Mr. Spater. Yes, sir. 

Mr. Edmisten. What was Mr. Kalmbach's method of operating? 
How did he approach you in soliciting contributions? Was he soft 
sell, hard sell, or what ? 

Mr. Spater. He is very soft sell. A ver;/ congenial gentleman. He 
first spoke of the special class and he said he wanted American Air- 
lines — I am sorry, he didn't say that he wanted us or you to be in this 
special class. 

Mr. Edmistex. What did you think he meant by that ? 

Mr. Spater. Well, I guess from my point of view not of thinking my- 
self capable of being in that special class, because I am not financially; 
able, I thought he was referring to American Airlines, but he didn't 
use the name and it was a slip of the tongue when I said he had, ht 
had not. He said, "We want you to be a member of the special class."' 

Mr. Edmisten. Although he said you, when you left that meeting 
you had an impression in your mind that the "you" referred to Ameri- 
can Airlines as a corporate body ? 

Mr. Spater. Well, that may have been because of my own financia 
inadequacy, but certainly, yes. 

Mr. Edmisten. Now, did you promise Mr. Kalmbach anything? 

Mr. Spater. I said in response that I w^ould do my best to produce 
$70,000 or $75,000. 

Mr. Edmisten. And he was wanting a hundred thousand ? 

Mr. Spater. Yes, sir. 

Mr. Edmisten. Did he voice any displeasure at your offer of $75,000 '< 

Mr. Spater. Well, I haAe searched my memory to see if I can recall. 
My recollection is that he said somethin'o' bland, "if he said something at 
all, on the effect that he hoped we would do better, but in any event 
it wasn't a very strong response. 

Mr. Edmisten. Well, why were you in a sense offering $75,000 ? Were 
you bargaining with him ? 

Mr. Spater. Well, I hoped to reduce the amount as much as I could, 
Perhaps I should have suggested a lower figure but I didn't. It was just 
impulse. 

Mr. Edmisten. You w^ere trying to pave the corporation money? 

Mr. Spater. Yes, I was trying to save money. 

Mr. Edmisten. As a good chief executive officer. 

Now, you went about collecting this money; whom did you first 
contact? 

Mr. Spater. I talked to our chief financial officer, and this was 
somewhat after tlie Julv 80 meeting-, when I heard that thev were 
searching for $fOO,000 givers. T knew pretty much what was aroing 
to hapjien to me next, so I warned the man that I miffht be hit for 
$f 00,000. 

Mr. Edmisten, Tliis was prioi- to the third mooting Avhero vou met 
Mr. Kalmbach? 

Mr. Spater. Yes, sir. I am pretty sure it was prior to the third meet- 
inn-, but the handwriting was pretty clear on the wall as a result of the 
July meeting. 



I 5501 

■ Mr. Edmistex. After the second meeting you went back and tried 

set things in motion because you were going — I won't say hit for 
5100,000 — but you were going to be very strongly urged to give 
>100,000? 

Mr. Spater. That is correct. 

Mr. Edmisten. What were the mechanics in raising $100,000 ? You 
irst contacted Mr. Lloyd Jones ; you are the next man in charge. 

]Mr. Spater. Yes. 

Let me first add that what I am going to describe now is something 
. learned after April 1973, when we put our counsel to work on dredg- 
ng up all the facts. I did not know at the time, but I have told you pre- 
,'iously that I asked him to get it — see if he could get it; that is all I 
:new at the time. What happened thereafter was, that through ar- 
angement with our Lebanese agent, we drew a check on the Chemical 
i^ank for $100,000 cash and the Chemical Bank was requested to trans- 
nit that amount to a corporation at its Swiss bank account — Amarco, 
[ think, is the company name, which apparently was a company con- 
trolled by our Lebanese agent. 

The money was transmitted to Switzerland, and transmitted back 
"rom Switzerland to the Chase National Bank in New York. The Leba- 
lese agent came to New York. He went to the bank, called one of our 
ubordinate officials at the bank and he received $100,000 in cash ; gave 
his to our official, our official took it back to our office and put it in the 
)ffice safe. 

Mr. Edmistex. Mr. Spater, would you identify for the record, tab 1, 
he voucher for $100,000 [exhibit 2T5-1] ? 

Mr. Spater. Yes, sir. 

Mr. Cutler. The voucher— if you want to place it in evidence, yes. 

Mr. Edmistex. All right, let's go back and find out who the Lebanese 
Lgent is. You contacted Mr. Lloyd Jones and you said, "We need to 
aise $100,000" ; as far as you were concerned, was that the end of it to 
l^ou? 

INIr. Spater. I didn't know anything about it until he came back 
md said, "We have the money" and I didn't know where it was raised 
mtil an investigation which took place in May or June of 1973. 

Mr. Edmistex. You have subsequently gained many facts to tell you 
vhat happened? 

Mr. Spater. Yes, sir, I know all the facts now. 

Mr. Edmistex. Who was the Lebanese agent ? 

Mr. Spater. He was a man named Andre Tabourian. 

Mr. Edmistex. Why did you pick him ? 

Mr. Spater. I did not pick him. 

Mr. Edmistex. Now, he was picked by someone down the line to be 

1 conduit to turn the $100,000 draft into cash [exhibit 275-2] . 
Mr. Spater. Right. 

Mr. Edmistex. He brought it back to New York, and what happened 
o the cash ? 

Mr. Spater. The cash was brought in by him to one of our assistant 
)fficers who took it and put it in the office safe. 

Mr. Edmistex. Let us go back and pick up a little piece here that 
night help us straighten something a little later on. On August 20, 
1971, you received four checks of $5,000 apiece in the mail from a 
source. 



5502 

Mr. Spater. Subsequently, I did. 

Mr. Edmisten. What did you do with the checks ? 

Mr. Spater. I turned those over to one of my subordinates. 

Mr. Edmisten. All rig^ht, now, we have the money collected, $100,000, 
in a safe deposit box in the American Airlines offices. How did this get 
to the Committee To Re-Elect the President ? How much ? What were 
the details ? 

Mr. Spater. Beginning in December 1971, we made payments — there 
were four in all — one payment of $5,000 in cash, I think, all in $100 
bills in an envelope, an unmarked envelope, taken to the office of the 
committee and delivered either to Mr. Sloan or Mr. Nunn — Lee Nunn. 
I say "either" — on some occasions, they both were there; other oc- 
casions, one or the other. Again, this is material that I discovered later. 
But in any event, one payment in December, one in January, one in 
February, that is three 

Mr. Edmisten. $5,000 each time? 

Mr. Spater. $5,000 each, and one final payment of $60,000 in March 
of 1972. 

Mr. Edmisten. Was this all in cash ? 

Mr. Spater. Yes, sir. 

Mr. Edmisten. Were they pleased with that arrangement, the Com- 
mittee To Re-Elect ? 

Mr. Spater. I recall the man who made the deliveries said to me one 
time they seemed to be pleased to receive cash. 

Mr. Edmisten. Was it in $100 bills ? 

Mr. Spater. Yes, sir. 

Mr. Edmisten. Do you know if that Avas a request made by the 
Committee To Re-Elect, to be in $100 bills ? 

Mr. Spater. No, sir. There was no request how it should be made, 
either by Mr. Kalmbach or, as far as I know, by the committee. That is 
the way our people chose to deliver it. I think that is the way it was 
received by Mr. Tabourian, too. 

Mr. Edmisten. So what was the total amount that was delivered to 
the Committee To Re-Elect ? 

Mr. Spater. $75,000, of which $55,000 came from corporate sources. 

Mr. Edmisten. Now, that leaves $45,000 somewhere that you had 
been collecting through the exercise of the Lebanese agent. What hap- 
pened to that $45,000 ? 

Mr. Spater. All the money in the safe at the time of the investigation 
was turned back to the company, into the regular channels of the 
company. 

Mr. Edmisten. So far as you know right now, that $45,000 is back in 
the operating capital ? 

Mr. Spatf:r. Yes. 

Mr. Edmisten. Now, at any time during this — I will call it "epi- 
sode" — did you have contact with Mr. Maurice Stans regarding the 
contribution ? 

Mr. Spater. No. 

Mr. Edmisten. Did you have contact with him otherwise regarding 
any business dealing with American Airlines? 

Mr. Spater. Yes. 

Mr. Edmisten. Would you explain ? 



5503 

Mr. Spater. This was, of course, after the contributions were made. 
We had pending at the time, a merger with Western Air, and the 
merger agreement expired, as I recall it, in February and had to be 
Bxtended, and it was extended about three or four times. During this 
time, rumors began to fly around Washington that the "White House 
was opposed to the merger. You realize that in a merger of this type, 
under section 801 of our act, the President makes the final decision. 
The Civil Aeronautics Board is merely advisory. Tlie final decision is 
made in the White House, and it is not reviewable by the court. 

I made an effort to find out whether these allegations were true, 
because when I came to Western people wanting to renew the agree- 
ment, they were very skeptical about the desirability of doing it. Under 
the agreement, they were expected to make dividend payments and 
make a change in their corporate structure. The agreement had already 
3een held up over a year at this time, and we still did not have an 
answer from anybody as to whether we could or could not merge. 

So I went to Mr. Stans — I had known him in another connection — 
asking him if he could find out Avhether it was true that the "White 
House did oppose, to let me know if that w'as the case. 

Mr. Edmistex. Did he let you know ? 

Mr. Spater. He never — no. 

Mr. Edmistex. First of all. why did you choose Mr. Stans? There 
were people at the White House who could have given you a direct 
answer. 

Mr. Spater. I did not know anybody in the political arena at the 
White House. T knew Mr. Flanigan. and I checked with him, but he 
did not seem to think there was anything to it. There were nimors 
GToing around, for example, even articles published in our Aviation 
Xews, one bv Mr. Robert Six, who said the White House was opposed 
to it. I could not find out any opposition, but here were our rivals 
in the case, announcing publicly that the White House was opposed 
to it, and I was having great difficulty getting the agreement extended 
with Western Airlines. 

Mr. Edmistex. Mr. Spater. did you receive a call from Mr. Kalm- 
bach around about April 26. 1973, regarding the contribution that you 
had set into motion ? 

Mr. Spater. I did. 

Mr. Edmistex. What was that call about ? 

Mr. Spater. T was in San Francisco on my way to the Far East, and 
he called me — called mv office m Washington — left word with my sec- 
retary that he was anxious to reach me. He left his home number and 
his office number. My secretarv inquired what he was calling about and 
he would not tell her, so I thought it was important to call him. 

I did call him and reached him immediately. He said that ]Mr. Stans 
had called him and told liim. Mr. Kalrnbach, that it might be neces- 
sary, he thought it would be necessary, to release information as to 
contributions in the Common Cause lawsuit, and if this were done, it 
would .show that American Airlines had given $75,000. 

Mr. Edmistex. "\^niat did he want you to do. give him some names? 

Mr. Spater. He did not sav anything more at the time. There were 
subsequent calls that involved the question you asked me. 

Mr. Edmistex. All right, explain those sul>sequent calls. Who made 
them ? 



5504 

Mr. Spater. They did not come to me, but our office in Washington 
did receive calls from Mr. Kalmbach's office, not him personally, but 
I believe his secretary, first in which we were asked to state the names - 
in which the $75,000 contribution should be reported. 

Mr. Edmisten. And what did you respond ? 

Mr. Spater. This was the time we made no response. We talked with': 
counsel. As I pointed out in my statement, we could not compound 
the situation, we had to tell the truth, who it was, that the money had 
come from American Airlines. Therefore, as a consequence of this, 
after deliberating Avith counsel, we decided we must make a disclosure. 

Mr. Edmisten. Did your counsel make contact with American Air- 
lines about this time and ask that the money be returned, the corporate 

Mr. Cutler. With the committee did you mean? You said: "Did 
counsel make contact with American Airlines ?" 

Mr. Edmisten. With the Committee To Re-Elect the President. 

Mr. Spater. Yes. 

Mr. Edmisten. I believe that is tab No. 3 [exhibit 275-3], Mr. 
Chainnan, a letter from Mr. Herbert Miller. 

Mr. Chairman, may we enter the complete American Airlines folder 
consisting of tabs 1-3 into the record at this time ? 

Senator Ervin. It will be received in evidence, and appropriately 
numbered by the reporter as an exhibit. 

[The documents referred to were marked exhibits Nos. 275-1 
through 275-3*] 

Mr. Edmisten. Was that request honored by the Committee To 
Re-Elect the President ? 

Mr. Spater. It was, and they returned the money. 

Mr. Edmisten. How much ? 

Mr. Spater. $55,000. 

Mr. Edmisten. What happened to the other $20,000 ? 

Mr. Spater. It still remains in the coffers of the committee or has 
been expended. I do not know what has happened to it. We made no 
request for its return. 

Mr. Edmisten. Was that listed as a contrib-ition by you personally ? 

Mr. Spater. Yes; it was listed as a contribution by me. 

Mr. Edmisten. When the people of the Committee To Re-Elect 
called you and asked you for names to contribute to the contribution, 
did you have the feeling that they wanted you to come up with some 
kind of a name ? 

Mr. Spater. I had no feeling exce))t that they wanted us to tell who 
the real contributors were. I did not think that subsequent examination 
of the list would indicate that the names of employees of American 
Airlines were stated — that is, in the Rosemary Woods list. I think an 
examination of that showed that in that list, predated, it was called — 
I am sorry. The list that the committee finally filed in the Common 
Cause suit says employees of American Airlines. 

Mr. Edmisten. Mr. Spater, aside from the contribution we have just 
been talking about, were tlieie any other instances of services rendered 
to Presidential campaigns in 1072 for wliich there was no consideration 
received by American Airlines ? 

•See pp. 5837-5839. 



5505 

Mr. Spater. Yes, there was one incident. 

Mr. Edmisten. AVliat was that? When was it? 

Mr. Spater. One of our employees in Texas worked for the Demo- 
crats for Nixon and he went off the payroll unbeknownst to me — I 
knew he went off the payroll. Unbeknownst to me, out of a humani- 
tarian belief that he needed the Jielp, he Avas assisted and paid in the 
amount equivalent to his compensation. When it was revealed to him 
that this came from corporate sources, he reimbursed the company. 

Mr. Edmisten. His name was Mr. Woodward ? 

Mr. Spater. That is right. 

Mr. Edmisten. And he received an equivalent of his salary for 2 
months. How much was that ? 

Mr. Spater. $10,000. 

Mr. Edmisten. So that means he was making about $60,000 a year? 

Mr. Spater. Yes, I think that probably would include all of his 
compensation, plus benefits, 

Mr. Edmisten. Was that reported to the Special Prosecutor ? 

Mr. Spater. Yes, sir. 

Mr. Edmisten. Was any action taken on it adverse to you or the 
company ? 

Mr. Spater. No ; it was treated as part of the whole picture that you 
are familiar with. 

Mr. Edmisten. Do you know of any other instances? 

Mr. Spater. No, sir. 

Mr. Edmisten. Mr. Spater, at any time, to your knowledge, was 
there any quid pro quo involved in this transaction, the main trans- 
action, the $100,000 ? 

Mr. Spater. No, sir. Absolutely not. 

Mr. Edmisten. Now, you did have a number of things pending be- 
fore various Federal agencies at that time, like all airlines. 

Mr. Spater. Yes, and as we always have had for the last 35 years 
and presumably always will have. 

Mr. Edmisten. Mr. Chairman, I think Mr. Cutler has supplied a 
listing for the committee of all matters affecting American Airlines. 

Mr. Cutler. That is a list furnished in response to a request from 
committee counsel of all matters currently pending before the CAB 
in which American Airlines has an interest. 

Senator Ervin. This is accurate? 

Mr. Cutler. That is a current list ; yes. 

Senator Ervin. Let the record show it is submitted in evidence and 
will be appropriately numbered by the reporter as an exhibit. 

[The document referred to was marked exhibit No. 276.*] 

Mr. Edmisten. Mr. Chairman, I have no other questions at the 
moment. 

Senator Ervin. Mr. Madigan. 

Mr. Madigan. Thank you, Mr. Chairman, 

Mr. Spater, I would like to ask you a few questions concerning that 
dinner meeting that you had with Mr, Kalmbach at which this contri- 
bution was discussed. During that meeting, did Mr. Kalmbach make 
any promises, either express or implied, that he would be able to help 
you in some way if you contributed to the Committee To Ee-Elect the 
President ? 



►Seep. 5842. 



24-650 O - 74 - 16 



5606 

Mr. Spater. No. 

Mr. Madigan. Was there any discussion at that meeting with Mr. 
Kalmbach about whether your contribution should be made in cash ? 

Mr. Spater. Not that I recall. 

Mr. Madigan. Well, you would recall it if there were, would you 
not? 

Mr. Spater. So much has happened since then. I didn't think there 
was, but I simply — you know, we are talking about a conversation that 
took place quite a long time ago and I just don't recall it. 

Mr. Madigan. You have no recollection that there was any such dis- 
cussion, is that correct ? 

Mr. Spater. No ; I have absolutely no recollection. 

Mr. Madigan. Now, during tliat conversation and subsequent there- 
to, when did you decide that you would make a contribution to the 
Committee To Re-Elect the President, and when did you decide in 
what amount that contribution would be ? 

Mr. Spater. Well, I more or less decided at that dinner meeting. 
I said that we would make a contribution of $70,000 or $75,000, or 
try to. Then when I got back to the office, I decided, well, I said $70,000 
or $75,000, I will make it $75,000. It was not a very scientifically ar- 
rived at decision, but that is the way it took place. 

Mr. Madigan. As I understood your testimony, did you indicate 
that you had a vague recollection that there was some statement that 
you could do better than the $70,000 or $75,000 ? 

Mr. Spater. I am sorry. I didn't hear the last part. It was drowned 
out. 

Mr. Madigan. I am sorry. 

Is it your testimony that it is your recollection, vaguely, that there 
was some statement made by Mr. Kalmbach that you could do better 
than $70,000 to $75,000? 

Mr. Spater. I think what I said, at least what I meant to say, was 
that there was no strong response. If there was any response at all, it 
was a mild response, such as perhaps: "I hope you can do better." But 
tliere was not any vigorous response that it had to be $100,000, that 
type of thing. 

Later on, and maybe these two things have been confusing, but 
later on, when money was actually being delivered at the committee 
headquarters, either Mr. Nunn or Mr. Sloan said: "We thought it 
was going to be $100,000." 

Mr. Collins, who delivered the money, said — well, he didn't under- 
stand that from me, and he came back and asked me. 

I said, "No, $75,000." 

That was the end of that, but they were the only two instances you 
might have in mind. 

Mr. Madigan. My question was directed to any statement by Mr. 
Kalmbach. As I understood your answer, you are not sure whether he 
said anything at all. 

Mr. Spater. No; he may not have said anything. If I recall any- 
thing, it may have been some mild remonstrance, but it was not 

Mr. Madigan. Was it your decision that the contributions should be 
made in cash ? 

Mr. Spater. No. 

Mr. Madigan. Whose decision was it ? 



5507 

Mr. Spater. Well, it was probably made by default in some respect. 
If we had cash, I think we said that is the way it will be delivered. 
I don't think there was any great cogitation over it. The money we 
received from Mr. Tabourian came in cash, so we probably delivered 
it without any great discussion. 

Mr. Madigan. Was it requested to come in cash ? 

Mr. Spater. No, sir. 

Mr. Madigaist. You didn't have any cash lying around. You had to 
generate a false inventory to raise that money, did you not ? 

Mr. Spater. That is true. 

Mr. Madigan. Did you instruct Mr. Jones or any other employee 
that it bo raised in cash ? 

Mr. Spater. No. 

Mr. Madigan. Wlien you told Mr. Jones that you thought you were 
going to be asked for $100,000, did he ask you any questions about how 
he was going to raise that much money ? 

Mr. Spater. No. 

Mr. Madigan. No questions whatsoever ? 

Mr. Spater. No. 

Mr. Madigan. I take it that he knew^ how to operate false invoices 
and how to carry it out without being instructed ? 

Mr. Spater. Well, that is a hard question to answer. I don't think 
he actually handled the transaction himself. He asked somebody else 
to do it. But a company that handles a large amount of money prob- 
ably' does know how to handle those transactions. 

Mr. Madigan. Well, what I am getting at is, whose idea was it to 
create this false invoice and raise the money that way? 

Mr. Spater. That was somebody lower down in the organization. 
It was not Mr. Jones. 

Mr. Madigan. Someone who Avas employed by American Airlines, 
I take it? 

Mr. Spater. Yes, I think it was a man who was formerly employed 
by us and no longer is. 

Mr. Madigan. When you were asked — not in this instance 

Mr. Spater. His departure from the company had nothing to do 
with this case. 

Mr. Madigan. "When you were asked for this contribution in the 
$100,000 range and when you instructed Mr. Jones to raise that 
money, I take it that you knew that it was going to be raised from 
corporate sources ; is that correct ? 

Mr. Spater. I wasn't sure. I guests I could have concluded it would 
be, but it wasn't clear. They didn't tell me to take it from corporate 
sources. If we could have derived some money from other sources, 
I would have been very pleased. 

Mr. Madigan. You indicated that in response to an earlier question 
that you, yourself, as chief executive at American Airlines, couldn't 
have raised that much money from personal sources. 

How did you think a subordinate would be able to raise that money 
from personal sources ? 

Mr. Spater. From other sources than myself. 

Mr. Madigan. Pardon? 

Mr. Spater. From sources other than myself— other people. 

Mr. Madigan. Other people in American Airlines? 



5508 

Mr. Spater. Other people in American Airlines, people we have 
done business with, done favors to. 

Mr. Madigan. Other corporations have funds known as good gov- 
ernment funds, or political action funds in which employees con- 
tribute their own money, and contributions are therefore made in a 
lawful manner? 

Mr. Spater. Yes, and we have since created such a fund. 

Mr. Madigan. I guess that answers my question. You didn't have 
such a fund at the time you made the corporate contribution ? 

Mr. Spater. No. 

Mr. Madigan. Why didn't you raise the money that way, rather 
than taking it from corporate source's? 

Mr. Spater. You couldn't do it in time. We have had this in effect 
for several months and I put a percentage of my compensation into 
the fund, but if you add up all the amounts, it takes a long time to 
accumulate $55,000. 

Mr. Madigan. So I take it that you had no knowledge as to whether 
Mr. Kalmbach knew or did not know whether you had such a system 
or whether you might raise the money that way? 

Mr. Spater. No, sir; I didn't know. 

Mr. Madigan. Now, inviting your attention to what has been ad- 
mitted into evidence before the committee, found at exhibit No. 275-3, 
in the letter which was sent by American Airlines to request the refund 
of that contribution, American Airlines stated that they had no evi- 
dence that the Committee To Re-Elect the President had any knowl- 
edge that the funds received were corporate funds. 

Is that a correct statement ? 

Mr. Spater. This is a statement by our counsel, Mr. Miller, that he 
had no such evidence. 

Mr. Cutler. Based on our investigation, Mr. Madigan, that is a cor- 
rect statement. 

Mr. Madigan. Now, turning, if I might for a minute, to the litiga- 
tion that was pending before regulatory agencies, could you tell us, 
first, how Ions you were the chief executive at American Airlines prior 
to these meetings in July and October of 1971 ? 

Mr. Spater. I became chief executive in February 1968. 

Mr. Madigan. Were you a working chief executive, working on com- 
pany matters all the time ? 

Mr. Spater. Yes : T certainly was. 

Mr. Madigan. Did you spend anv of vour time on the proposed 
merger between American and Western Airlines ? 

Mr. Spater. Yes ; I did. 

Mr. Madigan. Were you working on that matter at the time that you 
had the two meetings with Mr. Kalmbach ? 

Mr. Spater. Yes. 

Mr. Madigan. During those meetings, was this merger discussed at 
all? 

Mr. Spater. No. Mr. Kalmbach was an attorney for the nrincipal 
rival in that case — principal opposition and opponent in that case. 

Mr. Madigan. Now, did the fact that this merger was pending play 
any role in your decision to contribute this money to the Committee 
To Re-Elect"the President? 



5509 

Mr. Spater. I think I was motivated by a host of fears, and as I 
explained, it is impossible for me to tabulate all of the items that went 
into it. 

Senator Ervix. There is a vote on. Senator Montoya and I will have 
to go over to the Senate to vote. We will stand in recess until the Sen- 
ators get back. 

[Recess.] 

Senator Ervin. The committee will come to order and counsel will 
resume questioning the witness as soon as the witness and his attorneys 
are seated. 

Mr. Madigax. Thank you, Mr. Chairman. 

We were discussing the merger agreement between American and 
Western with respect to your participation as the chief executive of 
American Airlines in those merger negotiations. I understood from 
your testimony, Mr. Spater, that you contacted Mr. Stans with regard 
to the White House's position or opposition or rumored opposition 
to that merger ; is that correct ? 

Mr. Spater. Yes, I asked him whether he could find out whether it 
was true the White House was opposing the merger. 

Mr. Madigax. When did you contact Mr. Stans ? 

Mr. Spater. I believe it was in June — late May or June of 1972. 

Mr. Madigan. So this would have been after the contribution was 
made, is that correct ? 

Mr. Spater. Yes. 

Mr. Madigax. Now, there is in the White House, according to 
statute, a branch which is designated by statute to approve or be 
involved in the approving process of the CAB decision wdth respect 
to that merger. Why did you not contact that branch of the White 
House rather than Mr. Stans ? 

Mr. Spater. I do not know what branch that is. I am familiar with 
Mr. Flanigan's function but I had heard this was a political branch 
of the White House taking this action and I did not know anybody in 
the political branch of the White House. 

Mr. Cutler. Mr. Madigan, the statute vests the power to approve 
or disapprove mergers involving international air routes within the 
President, not in any branch of the White House. 

Mr. Madigax'. It vests that power in the President. And there is a 
group, a branch, whatever you want to call it, headed by Mr. Flanigan 
that deals with these matters on a day-to-day basis, is that not correct ? 

Mr. Spater. I knew about Mr, Flanigan's function and I explained 
I did make an effort through his office to find out whether it was true 
and his office reported they knew nothing of it. But the rumors con- 
tinued and they did not emanate from his function but they did emanate 
from what I would call the political end of the White House. 

Mr. Madigax. Did you ask Mr. Stans to take anj^ action with respect 
to this pending merger agreement ? 

Mr. Spater. No, I asked him to find out whether it was true that the 
White House was opposed to it. You see, the reason for it — and of 
course, there is no good purpose served in extending it — if the White 
House is going to turn it down, there is no court review, I just take my 
marbles and go home. That is what Western wanted to do ; they wanted 
to call it off. I wanted to find out whether it should be called off. 



5510 

Mr. Madigan, You had an interest in seeing the merger was ap- 
proved, did you not? Was that not American's position? 

Mr. Spater. Oh, yes; I was interested in having it approved and 
if it was not going to be approved then I wanted to call it quits and 
go in a different direction. We had been held up for a year this way. 

Mr. Madigax. Xow, in response to an earlier question, you indicated 
there w\as no cpid pro quo expected and, in fact, that decision was 
decided adversely to American Airlines and the merger was dis- 
approved; is that correct? 

Mr. Spater. True. 

Mr. Madigax. When did that occur ? 

jNIr. Spater. Let me just rack my recollection. Actually, I knew 
about it at the end of July. The decision by the Civil Aeronautics 
Board, I believe, was made in June. Such decisions in international 
cases are not publicly announced, they are transmitted, they are recom- 
mended decisions, and they are transmitted to the White House and 
then circulated by the White House, by Budget, I believe, to the other 
departments and then after the final action is taken by the President, 
in this case disapproved or turned down the merger, it was publicly 
announced ; it was announced in July. I think the action by the CAB, 
the recommendation that it be turned down, was made sometime in 
June. 

Mr. Madigan. In your testimony, Mr. Spater, you directed your 
remarks at some point to the possibility of or the advisability of creat- 
ing restrictions upon persons who were high Government officials or 
formerly high Government officials from soliciting contributions. 
Would you feel that similar restrictions should be ])romulgated with 
respect to a prohibition, say, of a person who either personally or 
through his business is engaged in major litigation with a regulatory 
agency, to prohibit him or his company from contributing to Presi- 
dential campaigns ? 

INIr. Spater. Well, I haven't thought anything about it. 

Mr. Madigax"^. Excuse me, when I say "prohibiting him from con- 
tributing in Presidential campaigns," I mean during the pendency of 
that litigation — as long as the litigation is pending. 

Mr. Spater. Personally as far as I am concerned that would be fine, 
but am not sure about^ — I think I would like to analyze it if I am going 
to give a broad-gage judgment on something like that as to how it 
would impact the whole economy. It would not affect me adversely; I 
would be for it. 

Mr. IMadigax. Now, with respect to the mechanism used for raising 
this $100,000, how did you decide, once you knew you had $100,000 to 
contribute, to give only $55,000 to the' Connnittee To Re-Elect the 
President? 

Mr. Spater. I think I explained that earlier. I made the decision 
really on tlie niglit on wdiich I saw Mr. Kalmbach to give $70,000 or 
$75,000. I decided the following dav to make it $75,000 of the two 
figures I mentioned. Then things fell in line. I had $20,000 to give 
from personal sources that was given, that left $55,000 to be given from 
corporat<^ sources, and that was given. 

Mr. Madigax-^. And what was done with the remaining $45,000? 
Was it kept outside the normal course of bookkeeping with respect to 
American Airlines' books? 



5511 

JNIr. Spater. Well, until the investigation by counsel, and then any 
imoney in that safe was returned to the corporate coffers. 

Mr. Madigax. During the time that it was kept in the safe, was that 
i$45,00() used to pay the $10,000 salary of that employee that worked 
Ifor Democrats for Nixon ? 

Mr. Spater. I believe it was. I am not certain but I think it possibly 
was. But, however, that money was paid back by him so that would 
have been replaced. 

Mr. Madigan. Did you arrange for a false invoice of any kind — 
false voucher to cover the $10,000 that was paid to that employee? 

Mr. Spater. I never arranged for any false voucher at any time, and 
there was no false voucher in the $10,000 case arranged by anybody. 

Mr. Madigan. Well, I take it that the books must have shown that 
he was on leave when in fact he was being paid $10,000 ? 

Mr. Spater. That is right, and there was no necessity to create more 
cash because the cash had already been created. The reason for the 
voucher, as I explained, was to provide the cash. The cash was there, 
presumably it was taken from that cash, used for that purpose and 
replenished when the individual repaid the amount. He discovered that 
it came from corporate funds and he repaid it. 

Mr. Madigan. In deciding on a $75,000 contribution, why was not 
the contribution made entirely from corporate funds? Why did you 
use the $20,000 in personal funds, that you received ? 

Mr. Spater. Because it was available for that use and I used it. 
I didn't really focus on — — 

Mr. Madigax. No particular reason ? 

Mr. Spater. No, I would have preferred making the wdiole contribu- 
tion in a way that would be unobjectionable but I wasn't able to 
do it. 

Mr. Madigax. Is the reason that you made the contribution from 
the $20,000, which were not corporate funds, because you felt that 
the reelection of the President would be in the best interests of the 
country? Was that the reason or were there some other reasons for 
the contribution? 

Mr. Spater. I made the contribution for the reasons I explained, 
I was fearful if I didn't do it our company would be placed at a com- 
petitive disadvantage. 

Mr. Madigax. By the administration ? 

Mr. Spater. Yes. 

Mr. Madigan. Well, I go back to my earlier question. If that was 
the reason you gave it, why didn't you use the corporate funds; why 
did you use this $20,000 of noncorporate funds? 

]NIr. Spater. It made no difference to the recipient where the money 
came from. I had money available from personal sources, so I used 
it. I really didn't focus on it. There was a pile of money so I used 
it. As I explained, there was no decision other than the fact I indi- 
cated; I would have preferred to make it all from personal sources 
if I could have raised it that way. But I couldn't. 

Mr. ^Madigax. Did you make any attempt to raise it through vari- 
ous executives who are in executive positions at American ? 

Mr. Spater. I didn't. It may have been done by Mr. Lloyd Jones and 
other people who reported to him. I just told you what actually took 



5512 

place. There is nothing else that I know of other than what I have 
told you. I made no other efforts. 

Mr. Madigan. You say it may have been done. You know from the 
investigation that it was not done, do you not? 

Mr. Spater. I am sorry. 

Mr. Madigan. I say, you indicated that it may have been an attempt 
to raise it from personal sources. Well, you know from your investiga- 
tion of the facts that it was not attempted ? 

Mr. Spater. Yes. Well, I know it was not attempted. I know none 
was raised. All the money was raised as I have explained it to you. 
There was no other money raised. 

Mr. Madigan. Was there any resti'iction on this $20,000 that should 
be contributed to the reelection of the President as opposed to 

Mr. Spater. Absolutely not. I had a free hand whatever way I 
wanted to use it. I made the decision personally. 

Mr. Madigan. Now, the law has been settled for some time since 

Senator Ervin. I am going to have to recess. There is another 
vote. 

[Recess.] 

Senator Ervin. The committee will come to order. 

Mr. Madigan. Mr. Spater, I began to ask you a question with regard 
to the fact that there has been a law since 1910 or so that prohibits 
corporations from contributing to political campaigns. I note your 
suggestions with respect to the solicitation activities of Government 
officials i,n your statement before the committee. Do you have any sug- 
gested remedy to put a stop to the procedures, that testimony before 
this committee has indicated has gone on with the use of false invoices, 
et cetera, to generate corporate funds which are used for contributions ? 

Mr. Spater. Well, I think it is necessitated by the pressures that are 
brought. If the pressures were relieved, invoices would not have 
developed. 

There is another element, of course, that for the first time since 1910, 
the law is being enforced. The law has been in effect for 60 years and 
has never been enforced until a special ])rosecutor was appointed. 

Mr. Madigan. I take it then that you feel the present laws we have are 
sufficient if they are enforced vigorously, is that correct ? 

Mr. Spater. No, I do not think they are. I tliink it is very unfair that 
the present laws are applied as they are and limited as they are. I 
think that laws on the books should be enforced. 

Mr. Madigan. I do not believe I have any further questions, Mr. 
Chairman. 

Senator Ervin. Is it not fair to sav that if there is any industry 
in the United States which is peculiarly susceptible to express or 
im plied jH-essures from people exercising governmental powers, it is 
thv airlines? 

Mr. Spater. Yes, sir, you are absolutel v right. 

Senator Ervin. Is it an exaggeration to say that the Federal 
Government, through its various agencies, including the White 
House, has virtually the power by their decisions, one way or another, 
to determine the economic life or economic death of an airline? 

Mr. Spater. You are absolutelv rii^ht. Senator. 



5513 

Senator Ervix. In a supplemental memorandum which was supplied 
oy jNIr. Cutler at the request of the committee, this statement appears 
[reading] : 

It is generally recognized that American Airlines is a member of an industry 
mbject to comprehensive Federal regulation. At any particular time, officials 
)f American Airlines estimate that the company may be directly interested 
in approximately 20 or so important matters pending before the Civil Aero- 
lautics Board or other Federal agencies. To give the committee some idea 
3f the number and range of the regulatory matters before the CAB, attached is a 
recent listing of matters at the CAB in which American Airlines is participating. 

The most important matters before the CAB during the period fri.m 1969 to 
1972 included the following: (1) implementation of the award to American of a 
route to Australia ; (2) the proposed American Airlines-Western Airlines merger ; 
(3) general investigation of passenger fares; (4) mutual aid agreements among 
the airlines; (5) capacity limitation agreements among the carriers; and (6) 
investigations and proposed regulations relative to commission and other pay- 
ment to ticket agents and tour packagers. In addition, the company had several 
applications pending during this period to serve destinations in the Orient and 
Europe and to provide service to important markets in the United States, such as 
Miami and Des Moines/Omaha.* 

And the footnote reads : 

*The above list is intended to be illustrative rather than comprehensive. Amer- 
ican has not undertaken a review of its files to identify all of the matters pending 
before the CAB or other Federal agencies during this period. 

Is that a correct statement ? 

Mr. Spater. That is a correct statement. 

Senator ER\^^^. This statement — I have already put in the record 
the economic regulations exhibit [exhibit 276], and I will put this 
statement in the record and have it marked as an exhibit. 

[The statement referred to was marked exhibit No. 277.*] 

Senator Ervin. Now, American was very much interested in the con- 
itinuation of a merger agreement that it had with Western Airlines at 
the time of this contribution, Avas it not ? 

Mr. Spater. Yes, sir, that is right. 

Senator Ervin. And that was a matter that was subject to the un- 
appealable decision of the President himself ? 

Mr. Spater. Yes, sir. 

Senator Ervin. And Mr. Herbert Kalmbach, whom you knew to be 
the personal counsel of the President and a man very close to the Presi- 
dent, contacted you in the manner that you have described and he 
stated that he would like to have a contribution of $100,000 for the 
Committee To Re-Elect the President. Now, did you draw the infer- 
ence from what he said, that he was trying to get the $100,000 from you 
personally ? 

Mr. Spater. Well, it never entered my mind that he was, because I 
simply do not have the capacity to do it, but that is a subjective 
evaluation. 

Senator Ervin. Well, as a matter of fact, in facing reality, with the 
tremendous, almost confiscatory natui'e of Federal income taxes in this 
day, it is not reasonable tliat thei'e can be very many $100,000 con- 
tributions obtained without resorting to corporate funds, is that not 
true? 

Mr. Spater. That is right, except possibly from major stockholders. 

*See p. 5850. 



5514 

Senator Ervix. Yes. 

Mr. Spater. We don't happen to be one of those. 

Senator Ervix. There are not many people with income tax rates on 
a joint return going to 55 percent up to as much as 64 percent, with all 
the other living expenses and obligations that they have, that cdn 
give such things as $100,000. To use a Xorth Carolina expression, they 
are about as scarce as hens teeth, aren't they ? 
Mr. Spater. Yes, sir, among my friends, it is. 

Senator Ervix. Now, here in these circumstances, Mr. Kalmbach 
came in and said he wanted a contribution of $100,000 and he hoped 
that it would be received and all those wdio made n contribution of as 
much as $100,000 would be put in some kind of a select class. 
Mr. Spater. Yes, sir. 

Senator Ervix. Well, didn't you interpret that as a sort of implied 
promise, as far as Mr. Kalmbach could make one, that people who 
had made contributions of $100,000 would have a superior consider- 
ation to people who were not able to make contributions of that nuich ? 
Mr. Spater. Well, there was the other ])ossibility, and that was a 
negative one, which was very much in my mind. I think as a result of 
the hearings before this committee, it probablj^ might be something, 
and that is that you would be regarded as persona non grata if you 
didn't. There were two aspects : Would you get something if you gave 
it, or would you be prevented from getting something if you didn't 
give it? 

Senator Ervix. In other words, to use the vernacular expression, a 
request of this kind has a tendency to instill the fear that if you don't 
comply, you might get, in the use of the vernacular, get it in the neck 
from some Government agency? 

Mr, Spater. Yes. Mr. Kalmbach, of course, is a lawyer for our 

principal competitor who was opposing us in the merger case, so I 

didn't believe that giving him the money would help us in that case. 

Senator Ervix. But you did fear that if you didn't give the money, 

there might be some advei*se consequences ? 

Mr. Spater. Yes, sir, I was Avorried. 

Senator Ervix. Departing from the normal use of language, would 
it not be fair to say that requests of people of high authority who 
control great Government power, or who have direct access to those 
who control great Government power, when they ask foi- contributions, 
there is a sort of unspoken coercion in the request, isn't there ? 
Mr. Spater. Unspoken what, sir? 

Senator Ervix. Does not a request for a campaign contribution of 
persons from industries or the officers of industries that are particu- 
larly subject to Government regulation have the effect, although there 
is no coercion spoken, but they have the effect of some kind of an 
implied coercion, don't they ? 

Mr. Spater. Yes, sir. I explained it when I was talking to counsel 
of the staff that it is something like the old medieval maps that show 
a flat world and then what they called '"tei-ra incognito"', with fierce 
animals lying around the fringes of this maj). You just don't know 
what is going to happen to you if you get off it. I think that sometimes, 
the fear of the unknown may be more tei-rifying than fear of the 
known. I think this is a very large element in the picture. 



I 



5515 

Senator Ervin. Well, I think that is a very apt illustration of the 
point that you are making. 

Now, most all of these regulatory agencies which have to do with 
the regulation of tlie airlines are headed by men who are Presidential 
appointees, aren't they ? 

Mr. Spater. Yes, sir. 

Senator Ervin. I thought you made some very helpful suggestions 
as to possible legislation and I would like to ask you another one 
that is not covered in your statement. Don't you believe that the Con- 
gress should adopt a law similar to that which it did in the bill which 
was passed by the Senate, which puts a severe limitation upon the 
amounts of contributions that can be made for political purposes in 
3ash ? 

Mr. Spater. Absolutely. 

Senator Ervin. And as a corollary to that answer, I take it that you 
agree that there should be some positive requirement that campaign 
contributions be made, if it is of a substantial nature, in the form of 
checks rather than cash ? 

Mr. Spater. Yes, sir. 

Senator Ervin. And furthemiore, in this day of shredding of docu- 
ments that have potentially dangerous consequences or embarrassing 
consequences, don't you think that some positive requirement should 
be made by law upon persons making campaign contributions of a sub- 
stantial nature, and upon persons receiving campaign contributions 
of a substantial nature, that they preserve all documents and records 
relating to those contributions for a substantial period of time after 
the elections ? 

Mr. Spater. I think that would he a very valuable provision. 

Senator Ervin. I want to commend some of your statements. You 
state : 

I believe that the present system places unfair pressures botli on candidates 
and on corporate executives. As I said in my statement of July 6, most con- 
tributions from the business community are not volunteered to seek a comi)etitive 
advantage, but are made in response to pressure for fear of the competitive 
disadvantage that might result if they are not made. The process degrades both 
the donor and the donee. 

I don't believe that a more accurate statement could be made than 
that statement made by you. 
Mr. Spater. Thank you, sir. 
Senator Ervin. You followed this with : 

It is particularly dangerous when the pressure is implicit in the position of 
the individual making the solicitation. I suggest, therefore, that Congressional 
consideration be given to the advisability of making certain individuals wholly 
ineligible to engage in campaign solicitation. In particular, I recommend that 
solicitation by individuals who have just left the Cabinet or other high posi- 
tions in the Government or by individuals who are personal representatives of 
oflScers holding such positions be made unlawful. 

Now, if Congress prior to the campaign which preceded the elec- 
tion of 1072 had passed a law Droliibiting the solicitation of campaign 
contributions from the executives of business organizations by people 
occupying positions such as those you suggested, a lot of the contri- 
butions which American Airlines made would never have been made, 
would they? 



5516 

Mr. Spater. No sir, they would not have been made. 

Senator Ervin. And don't you think it is reasonable to assume that 
that is true in respect to other contributions which came from corpo- 
rate funds rather than individual funds ? 

Mr. Spater. I believe so. Reading the accounts in newspapers, I 
think the same thing would have been true and that is w^hy I feel so 
strongly about this provision as being a very basic one. 

Senator Ervtn. Do you not agree with me tliat we must have some 
strong legislation in this field if the confidence of the American people 
in those who hold high political office and in their Government is going 
to be restored ? 

Mr. Spater. Yes, sir. I am certain. 

Senator Er\^n. May I commend you on recognizing the truism that 
an honest confession is good for the soul. I think you have done a fine 
thing in going to the Special Prosecutor. The American Airlines and 
you were, I think, the first ones to go to the Special Prosecutor and 
make revelations and I think you have done a fine thing in tlie presen- 
tation that you have done before this committee. 

Mr. Spater. Thank you. 

Senator Ervin. Senator Weicker. 

Senator Weicker. Mr. Chairman, I would just like to follow up 
to that point. If I am not mistaken, Mr. Spater, weren't you the first 
person to step forward and, in this area of corporate contributions 
during the campaign of 1973, make a voluntary statement of what 
had occurred ? 

Mr. Spater. Yes, sir, I was. 

Senator Weicker. I think — and up to that point, if I am not mis- 
taken, I don't think anybody had. Nobody in industrv had opened up 
at all. 

Mr. Spater. No, sir. 

Senator Weicker. And I suppose the thing that concerns me 
throughout here — I think we have every right to expect leadership, 
certainly from industry, and at almost from the outset, at least from 
the public comments that have been made, there has been sort of a mini- 
mizing of the entire area known as Watergate, There have been very 
few people like yourself to stand up. A^^iat motivated you? Did you 
figure that the time had come to draw the line here? I know that your 
career with American Airlines has spanned a period of time. Had you 
run into this type of situation. I am not saying giving of corporate 
funds, saying doing anytliing illegal, but the putting the arm on indus- 
try or more particularly on your company by other administrations, 
had this gone on before ? 

Mr. Spater. I think there never had been an example like this in 
two respects : (1) the individual who made the solicitation or the solici- 
tations and, (2) the amounts. 

Now, if you are talking about highiumping, you ask somebody 
to jump 2 feet, he can do it and if yon ask him to jump 8 feet he can't 
do it. I think one of the results was that the amounts were so enormous 
that they drove people to do things they didn't want to do. 

Certainly, I didn't find any relish in doing this. I knew it was wrong 
in aiding it and it was very much on my conscience, so obviously I 
Avas delighted to be able to rid my conscience of it. 



5517 

Senator Weicker. So actually this was unique in the way of the 
size of the amount requested and from insofar as where the request 
came from? 

Mr. Spater. Yes, sir. 

Senator Weicker. In your experience? 

Mr. Spater. Yes, sir. 

Senator Weicker. You did make reference in your testimony to the 
fact that this was the first time that the law has been enforced. The 
laws have been on the books since the early 1900's. AMiat is the image — 
this is the thing that bothers me sometimes — but what is the image of 
the business community and of the leadershij) of the business com- 
munity as far as politics is concerned ? Are we all looked upon as having 
our hands in the till or of the fact that entrance into our offices or 
to the seats of power can only be gained by money ? I sort of have the 
impression that there is an image held by business leadership of politi- 
cal leadership that almost has us all for sale. 

ISIr. Spater. Xo. sir, I don't agi'ee with that. I have had many ex- 
periences in Washington since 1933. I found it possible on many 
occasions to go into offices, make a presentation purely on the basis 
of merit. There is no interest on the part of the ^lember of Congress 
receiving information other than to arrive at a just result and I have 
been very fairly treated. I would say that my own experience has been 
good, and I thijik that most men feel that way. I think sometimes peo- 
ple like to write a rousing speech and they might want to find fault 
with somebod}' but I think the general attitude of businessmen toward 
Congress. ^Members of Congress, is just like toward another business- 
man. Tliey are humans and some of them are better than others, that 
is all. But I don't think there is any feeling, such as you have ex- 
pressed, that the Congress is not doing a good job. that the Members of 
Congress are not devoted to work. I have been around enough to know 
that I have put in a lot of long hours myself, averaging 60 and 70 
houi-s a week, and I find the same thing down here. Evening sessions, 
weekend work, so I have high respect for the Congi^ess. 

Senator Weicker. The work of this committee, and I am not trying 
to ask your evaluation of the individual guilt or innocence because 
that is not the job of this committee, but the work j)roduct of this 
committee and what it is bringing forth; do you consider what is 
roming out here to be a good thing for the political system in the 
United States or do you think it is tearing down the country? 

Mr. Spater. I think it is one of the greatest contributions made M^ 
any committee since the Republic was founded. I really think it is one 
of the outstanding perfomiances, and I think this is the general atti- 
tude of the people of our country. The people feel secure that a com- 
mittee of divergent views is ultimately desirous of getting at the truth. 
I made some comment like that in my opening statement. I wanted to 
add to it. I did add to it at the time. I think a gi-eat job remains to be 
done, which is the effort by this committee to insure that the neces- 
saiy legislative changes are made so that what you have done is not 
done in vain. I think it is very important that it be carried forward. 

Senator Weicker. In the same spirit, I thank you. I think obviously 
it was a difficult decision for you. I do not know if ever, frankly, the 
facts would have come foi-ward if it had not been for your voluntarily 



5518 

stepping forth and indicating a matter that obviously was a concern 
to your conscience. As I said, I think many times, the business com- 
munity is behind, just as my profession is — it is good to know there 
are still some men with some guts who go ahead and stand up and 
draw the line and face up to facts. 

I thank you for doing what you did and we will try to go ahead 
and do what we have to do. 

Mr. Spater. Thank you very much, sir. 

Senator Ervin. Senator Montoya. 

Senator Montoya. Mr. Spater, I want to associate myself with the « 
commendatory remarks which have been expressed here by Senator' 
Ervin and Senator Weicker. 

Mr. Spater. Thank you, sir. 

Senator Montoya. Now, one of the things that disturbs me here is ' 
why you succumbed to the competitor's lawyer's solicitation at the' 
time. 

Mr. Spater. I think if the man who had made the solicitation had 
only been a lawyer for our competitor it would not have been any 
problem. The problem arose from the fact that the man who solicited 
was personal counsel to the President. He was a trustee of the Presi- 
dent's personal estate and there is implicit in such a position, pressures 
that may be even more frightening than the explicit pressures. 

Senator Montoya. Did you not consider the solicitation very auda- 
cious at the time in view of the fact that the solicitor was the lawyer 
for one of your competitors ? 

Mr. Spater. Well. I certainly was very suiprised by it. I did not 
know, which I explained earlier, what it meant. It meant to me some- 
thing akin to this medieval concept that the world you do not know 
about has got a lot of beasts in it, and you do not know what the 
beasts are; and actually what has been revealed before hearings of 
this committee indicate — if I had known that I might have been more 
afraid than I was at the time. [Laughter.] 

Senator INIontoya. You did not, during your three conversations 
with Mr. Kalmbach, give any slight thought to the possibility that 
he was trying to obtain from you a voluntary contribution for $100,- 
000, with emphasis on the "voluntary" ? 

Mr. Spater. No. I do not think he would have introduced this idea 
of a special class nor would he have approached me from that point 
of view. 

Senator Montoya. I know that, and I think we ought to put this in 
proper perspective, that you had settled with him for $75,000. 

Mr. Spater. I had not actually. I think Avhat I had said to him was 
that I would try to get up $70,000 or $75,000. It was not a bargain or 
anything like that. It was a comment that applied to him. 

Senator Montoya. On or about October 4, you already had four 
checks for $5,000 each. 

Mr. Spater. No, sir ; those came later. 

Senator Montoya. Those came later ? 

Mr. Spater. Yes, sir. 

Senator Montoya. So actually, you had assembled $120,000, all 
together ? 

Mr. Spater. Yes. 



5519 

Senator Montoya. And then contributed $75,000 to the Committee 
To Re-Elect the President ? 
I Mr. Spater. That is correct. 

Senator Montoya. How were these funds delivered ? 

Mr. Spater. The funds were- 

Senator Montoya. I know you mentioned how $5,000 was initially 
delivered, and other sums, but give me the chronology and the detail 
3f how every bit of these funds was delivered. 

Mr. Spater. The first $5,000 was delivered to the Committee To 
Re-Elect the President in December 1971. A second $5,000 was 
delivered in January. A third $5,000 in February, and the remaining 
^60,000 in March 1972. Each— excuse me. 

Senator Montoya. Let me interrupt you. 

Mr. Spater. Yes, sir. 

Senator Montoya. Where did you get the $20,000 that you delivered 
prior to the cashing of the checks ? 

Mr. Spater. That was a personal source. 

Senator Montoya. From those checks ? 

Mr. Spater. Yes, sir. 

Senator Montoya. That is the question I asked you. Had you these 
checks in your possession prior to the cashing of the $100,000? 

Mr. Spater. Yes, sir; I am sorry, we did. 

Senator Montoya. All right, proceed. 

Mr. Spater. In each case money was delivered in cash in an envelope 
which was unmarked, and I think in each case in $100 bills. 

Senator Montoya. Who were the individuals who contributed $5,000 
each ? 

Mr. Spater. It came from one source — from a friend of mine. 

Senator Montoya. Were there four checks from the same source ? 

Mr. Spater. Yes, sir. 

Senator Montoya. That is all, Mr. Chairman. 

Senator Ervin. Are there anv further questions? 

Mr. Edmtsten. Mr. Spater, I have onlv one question. Senator Ervin 
quoted your statement a moment ago : "The ]:)rocess degrades both the 
donor and the donee." In fact, when you are put into a situation like 
that it degrades them and the stockholder, does it not? That stock- 
holder has a right to know where his money is going? 

Mr. Spater. Yes. sir. 

Mr. Edmisten. And I think we have forgotten that many times. 
Your stockholders had no voice in that whatsoever? 

Mr. Spater. No, sir. 

Mr. Edmisten. Nor do any of the others ; so it is not only the donor 
and donee, it is the stockholder. 

Mr. Spater. Yes, sir; we were glad, tlierefore, to get the money 
back so the stockholders would not suffer anything in our case. The 
money, all the corporate money, was replaced. But what you say is 
certainlv true. 

Mr. Edmisten. Thank you. 

Mr. Madigan. Just a few ouostions, Mr. Spater. 

With respect to your testimony concerning the state of mind of Mr. 
Kalmbach or what he might have thought, would you explain a little 
bit about this good government fund that American Airlines is begin- 
ning to institute or has instituted since these matters have arisen? 



5520 

Mr. Spater. Yes ; I can explain it very briefly. 

We set it up in October 1972, and it is completely voluntary. Any 
officer or employee may contribute wliatever amount he designates. 
I think we have indicated in some cases that 1 percent is OK. Nobody 
has been forced ; I don't know who the other contributors are — I know 
myself, but I don't know of a single other one. There probably are 
some, but I simply don't know the names. The money is handled by a 
bank as trustee, and the individual who puts the money up designates 
the candidate to whicli the funds should go. 

Mr. Cutler. Mr. Madigan, I think I should point out that the legal- 
ity of such voluntary funds and corpoi'ate activity in organizing such 
funds was made clearly legal for the first time in the Campaign 
Financing Act of 1971, which took effect early in 1972. 

]\Ir. INIadigan. Well, I believe it is true that certain corporations did 
use either political action funds or such good government funds well 
prior to the time that act went into effect. 

Mr. Ct'TLER. The legality of those funds was in considerable doubt 
up to that time. 

IVfr. Madigan. But the point I am making, Mr. Spater, is that we 
really don't know what went through Mr. Kalmbach's mind, and my 
question to you is : Do you know whether he thought maybe you had one 
of those funds or that you might have raised the money some other 
way? 

Mr. Spater. I don't know. 

Mr. Madigan. Now, was there any reason that these contributions 
were made by four separate trips of $5,000, $5,000, $5,000, and $60,000. 
As opposed to a lump-sum contribution ? 

Mr. Spater. No, I think that the time the first contribution was 
made, that was all that we had. We liad one check for $5,000. But I 
don't think there was any great deliberation over that. Certainly I 
didn't narticipate in it. 

Mr. Madigan. Was there any particular reason 

Mr. Cutler. Mr. Madigan, if I can help on that, our investigation 
showed that the money was delivered as each of these four checks was 
received and could be cashed and then after the large amount came 
in through the source Mr. Spater described and that was the reason 
why the money was delivered in the four installments; as the money 
was received, it was paid over to the committee. 

Mr. Madigan. Was there any reason why you just didn't transmit 
the checks rather than transmitting cash to that committee ? 

Mr. Spater. Not that I can think of. 

Mr. Madigan. No other questions, Mr. Chairman. 

Senator Ervin. This so-called good government fund — that is en- 
tirely a voluntary fund? 

Mr. Spater. Completely voluntary. 

Senator Erwn. And each donor has the riffht to designate the can- 
didate) that he wants to receive his contribution ? 

Mr. Spater. Correct; and no one in the company knows who he 
designates. 

Senator Ervin. Yes. 

Now, the thing that concerns me, T don't know how you avoid a 
lot of regidation in the airline industrv or in the radio and TV, but 
I have been concerned for years about the steady acci-etion of power in 



I 



5521 

the Federal Government, find I have resisted it to the best of my 
advantage. I ha^e been in the minority in resisting it, Bnt what con- 
cerns me, I think it caused them to play Lord Actons aphorism that 
power corrupts and absolute power corrupts absolutely; and is, I 
tliink, one of the greatest tragedies in this country whenever put on 
the decision of any man, in any man, an unendurable decision. 

Thank you very much for your very fine contribution to the w^ork 
of this committee. 

Mr. Spater. Thank you very much, sir. 

Senator Ervix. We will stand in i-eccss until 2 :80 p.m. 

[Whereupon, at 12 :45 p.m., the committee recessed, to reconvene 
at 2 :30 p.m., the same day.] 

AfTERXOGX SeSSIOX, TlIlTRSDAY, NOVEMBER 15, 1973 

Senator Ervix'. The committee will come to order. 

Counsel will call the next witness. 

iNIr. DoRSEx. Mr. Russell De Young, please. 

Senator Ervix. Will you hold up your right hand? 

Do you swear that the evidence that you shall give to the Senate 
Select Committee on Presidential Campaign Activities shall be the 
truth, the whole truth, and nothing but the truth, so help you God ? 

Mr. DeYouxg. I do. 

Senator Ervix. Be seated, and counsel will please identify himself 
for the record. 

Mr. Grirbox. INIy name is Daniel Gribbon. I appear as counsel for 
Mr. De Young. Seated behind me is Mr. Lane, vice president of Good- 
year; and seated behind liim is Mr. ]\Iyers, vice president and general 
counsel for Goodyear. 

Senator Ervix. Thank you. 

Mr. DoRSEN. IVIr. De Young, I understand you have a prepared state- 
ment and if you would like to read it, please do so now. 

TESTIMONY OF RUSSELL DeYOUNG, ACCOMPANIED BY DANIEL 

GRIBBON, COUNSEL 

Mr. DeYouxg. I would like to read it. ]My name is Russell De Young. 
I am chairman of the board of directors and chief executive officer 
of the Goodyear Tire & Riibber Co. of Akron, Ohio. I began to work 
for (loodyear in 1928 and have spent my entire working life with the 
companv in various capacities. I became chief executive officer in 
1964. 

I am appearing here under subpena to state the circumstances under 
which Goodyear made a political contribution in the 1972 Presidential 
election. 

The contribution originated in a conversation I had with INIr. 
Maurice Stans, whose acquaintance I had made largely as a result of 
our association on the Business Advisory Council and other groups 
involving meetings between businessmen and Government officials. At 
a meeting of such a group in Washington on or about February 16 or 
17, 1972, that T believe was concerned with environmental problems. 
Mr. Stans told me that he would be contacting me about a contribu- 
tion to the Committee for the Re-p:iection of the President. The dis- 



24-650 O - 74 - 17 



5522 

cussion occurred in a brief informal conversation between business 
sessions. 

I told Mr. Stans that it would be unnecessary for him to come to 
Akron, because I would send someone to see him. I recall no discussion 
at that brief meeting; of amount, by whom the contribution should be 
made, or the method by which it might be made. There was some men- 
tion of making a contribution — should be made, or the method by 
which it might be made. There was some mention of making a con- 
tribution prior to April 7 in order that it would not have to be publicly 
reported. 

When I returned to Akron, I discussed the matter with Mr, Arden 
Firestone, vice president of Goodyear. As a result of that discussion, 
Mr. Firestone, on March 9, delivered $20,000 in cash to Mr. Stans in 
Washington, D.C. I did not attend that meeting, but was later in- 
formed that ]Mr. Stans did not ask, and was not told, the source of the 
funds ; Mr. Stans said he had hoped for a contribution in the range of 
$50,000, but he did not state or imply that any pressure would be 
brought if a larger contribution were not forthcoming. 

It was decided that, in the light of Mr. Stans' reaction, an additional 
contribution would be made. An additional $20,000 in cash was turned 
over to Mr. Stans by Mr. Firestone at a second meeting in Washington 
on March 14. On this occasion, two personal checks, one from my wife 
in the amount of $2,000 and the other from me in the amount of 
$3,000, were also delivered to Mr. Stans. I did not attend that meeting 
either, but understand that, as on the ISIarch 9 occasion, there was no 
discussion with Mr. Stans as to the source of the contribution. 

The cash used in making the contribution came from volume dis- 
counts from suppliers of Goodyear's foreign subsidiaries. Such 
amounts were transferred to the Ignited States through normal bank- 
ing channels from an account maintaiiied in Switzerland. I was never 
personally involved in the handling of these discounts. I am advised, 
however, that for a period of time prior to 1967, certain of our Eu- 
ropean suppliers were directed to deposit volume discounts in an ac- 
count in a Zurich bank designated "Goyeda,'" standing for Goodyear 
deposit account. From time to time amounts were withdrawn from this 
account and kept under the control and custody of an officer of the 
company in Akron. No discounts were channeled into this account after 
1967 when a new financial officer. B, M. Robertson, took over. The ac- 
count itself was finallv terminated in 1970. There is no longer any cash 
from this source in the custody of anv company official. The amount 
used in making the contribution was iiever entered on the company's 
books as income, and it was never taken on its tax return as a deducti- 
ble expense. 

The $40,000 contribution that I have described was the only contri- 
bution made by Goodyear in connection with the 1972 Presidential 
election. It was made solely because we thought the reelection of the 
President was in the bcvSt interest of the country. It was not made with 
a view to obtaining Government favors. Nor was I pressured in any 
way into makinjr it. Goodyear's total business with the Federal Gov- 
ernment, most of which is obtained at competitive bidding, constitutes 
less tlian 3 percent of its sales. At the time the contribution was made, 
the companv was not entraged in anv significant litigation with the 
Government and was not aware of any material problems it faced 



5523 

with any branch of the Federal Government. No Goodyear employee 
in charcre of Government bnsiness was aware of the contribution, and 
there is no indication tliat any Government official was made aware of 
the contribution. 

In July of this year, company officers voluntarily disclosed to the 
special Watergate prosecution staff the full details of Goodyears 
1972 contribution to the Finance Committee for the Ee-Election of the 
President. At that time, the company's board of directors was informed 
of the contribution for the first time. Following such disclosure, the 
company requested the Finance Committee To Re-Elect the President 
on August 9, 1973, to return the $40,000 contribution. The company 
has received a check from the treasurer of the finance committee, which 
will be reflected in the company's income for 1973. 

Mr. DoRSEN. Mr. De Young, would you please give the committee 
some idea of the nature of the business of Goodyear, and the size of 
Goodyear ? 

Mr. De Young. Goodyear is a company that basically manufactures 
rubber and mbber-i-elated products such as wheels and brakes for 
planes, trucks, and passenger cars. We manufacture chemicals, poly- 
esters, synthetic rubbers, and other petrochemicals of that type. We 
are very largely involved all over the world in manufacturing opera- 
tions. Our sales for the year of 1972 was $4,076 million. 

JNIr. DoRSEN. Mr. De Young, I gather from your opening statement 
that Mr. Stans did not suggest any particular amount for you or your 
company to give, is that correct ? 

Mr. De Young. That is correct. 

Mr. DoRSEN. How was the figure, the initial figure of $25,000, 
arrived at? 

Mr. De Young. Well, we kicked that around plenty, and we decided 
that was the least we could do. [Laughter.] 

Mr. DoRSEN. What do you mean by that ? 

Mr. De Young. Well, anything below that figure didn't look like 
much. 

Mr. DoRSEN. "Wliat did you base that on ? 

Mr. De Young. Well, there really wasn't any reason for it. 

Mr. DoRSEN. Had you heard what other companies 

Mr. DeYoung. Not at that time. 

Mr. Dorsen. Later on you became aware ? 

Mr. De Young. Yes, later on we did. 

Mr. DoRSEN. To your knowledge, did Mr. Stans ever request that 
cash be supplied? 

Mr. DeYoung. No, he did not. 

Mr. DoRSEN. Why was the contribution made in cash ? 

Mr. DeYoung. Because we had the cash available. 

Mr. Dorsen. And the cash that was available had come earlier from 
the source you described ? 

Mr. DeYoung. From the volume discount account which I have de- 
scribed. 

Mr. DoRSEN. So that tlie nature of the fund would be a little clearer, 
could you give us a possible example of, even a hypothetical one, how 
the cash might have been generated? 

Mr. DeYoung. Well, in Europe a lot of your suppliers give a sort 
of volume discount if you purchase a lot of your materials. As an ex- 



5524 

ample, if you purchase $1 million of material for the year, which you 
may or may not purchase, you may not need that volume, but on the 
assumption that you do, then you may get a — roughly, say, one-half of 
1 percent additional discount, and that would not be known until you 
completely purchased that amount. 

Mr. DoRSEN. What would happen to that discount ? 

Mr. De Young. Well, in certain companies, it was directed to this 
bank discount account that I have described. 

Mr. DoRSEN. And the money was kept on deposit in that account, 
is that correct? 

Mr. De Young. Yes. 

Mr. DoRSEN. So, in effect, the documents supplied to the foreign sub- 
sidiaries by the suppliers would fail to reflect a quantity discount that 
was being granted to the subsidiary of Goodyear ; is that correct ? 

Mr. De Young. I don't quite understand that question now. 

Mr. DoRSEN. Well, in the documents that would reflect the purchase 
by the Goodyear subsidiary, there would be no mention, I gather, of 
the quantity discount. 

Mr. De Young. Well, they don't mention it until you happen to reach 
that quantity purchase. So there is no mention at all until — in other 
words, if you had purchases, in your hypothetical example I used, 
if you only purchase, say, $950,000, at the end of the year there would 
be no discount. There is no reason to be any paper to that effect until 
that is current, 

Mr. Dorsen. And the final document would indicate the quantity 
discount or would that be handled separately? 

Mr. De Young. That is generally handled separately. 

Mr. Dorsen. So that the quantity discount would not be reflected in 
the ordinary document exchange between Goodyear's foreign sub- 
sidiaries and the foreign supplies, is that true? 

Mr. De Young. No, not necessarily, because there may be several 
subsidiaries of different countries purchasing in the same series and 
they wouldn't know what the quantities were. 

Mr. Dorsen. "But the companies that made the contributions to the 
Swiss bank account would not indicate on the invoices or other docu- 
ments if, in fact, they were paying this quantity 

Mr. DeYouno. Well, once again technicaliy I didn't know. I was 
not involved in this so I can't really describe to you the technical 
problems that were involved. 

Mr. Dorsen. Wliat was your understanding as to the source of the 
funds, Mr. De Young ? 

Mr. De Young. Just the Avay I described, volume discounts. 

Mr. Dorsen. No, at the time the contribution was made t>o the 1972 
Presidential campaign, what was the extent of your knowledge at that 
time? 

Mr. De Young. The source of the funds. 

Mr. Dorsen. Did you know they were quantity discounts at that 
time ? 

Mr. De Young. T believe so. 

Mr. Dorsen. And you also, of course, knew then they were cor- 
porate funds? 

Mr. De Young. Oh, yes. 



5525 

Mr. DoRSEN. Now, after the initial delivery of $20,000 to Mr. Stans, 
I gather Mr. Firestone came back to you and expressed what Mr. 
Stans had told him ; is that correct ? 

Mr. De Young. That is right. 

Mr. DoRSEN. And it took you and Mr. Firestone 5 days before an 
additional $20,000 was forthcoming? 

Mr. De Young. That is right. 

Mr. DoRSEN. Along with the $20,000 in cash on the second occasion 
was $5,000 that you and your wife contributed; is that correct? 

Mr. De Young. That is correct. 

Mr. DoRSEN. And these represented your personal funds 

Mr. De Young. My personal funds. 

Mr. DoRSEN. Was there any reason why, in the light of Mr. Stans' 
request for $50,000, $45,000, rather than $50,000, or less was granted ? 

Mr. De Young. We never gave anybody as much as they asked for. 

Mr. DoRSEN. Did there come a time when you or your associates 
were contacted with respect to the possible disclosure of the contri- 
bution ? 

Mr. DeYoxtng. Did there come a time? 

Mr. DoRSEN. Yes. 

Mr. De Young. Yes. 

Mr. Dorsen. When was that and how did that occur? 

Mr. De Young. That occurred in April of 1973. 

Mr. DoRSEN. What happened then ? 

Mr. De Young. Mr. Firestone had all the contacts with Mr. Stans 
on this matter. Mr. Firestone consulted with me throughout and I 
understand the basic facts to be as follows: In April of 1973, Mr. 
Stans asked for the names of individuals who had made the $40,000 
contribution in March of 1972. He stated that it was highly probable 
that the finance committee would eventually have to make public a 
list of the individual contributors. He said that the committee records 
merely showed that the contribution came from Goodyear. employees. 

We first tried to get the money back, but Mr. Stans said that was 
not possible. A iter further discussions within the company, we decided 
to give Mr. Stans the names of eight Goodyear executives, including 
my oAvn, and divide the $40,000 among the eight. This was done with 
the approval of the executives but with a clear understanding that 
they would not at any time become involved in any perjury. 

We gave the names because we thought the company might be 
harmed by the publicity if it became known that Goodyear had, as a 
company, made a sizable contribution to either political party. 

Mr. DoRSEN. Did you personally ask the company executives if their 
names could be used in response to the request by Mr. Stans ? 

Mr. DeYoung. I did. 

Mr. DoRSEN. And did eacli of the employees agree to have his name 
utilized in this connection ? 

Mr. DeYoung. They did, on the basis that they would not become 
involved. 

Mr. DoRSEN. Thereafter, did you or Mr. Firestone receive a letter 
from :Mr. Parkinson asking confirmation of the contributions by the 
individuals? 

Mr. DeYoung. They did. 



5526 

Mr. DoRSEN. Is that tab 1 [exhibit 278-1] in the exhibit in front of 
you? 

Mr. De Young. That is right. 

Mr. DoRSEN, What was the response of tlie company ? 

Mr. De Young. We replied that we could not confirm these names. 

Mr. DoRSEN. Is that the document tab 2 [exhibit 278-2] ? 

Mr. De Young. Yes, July 11. 

Mr. DoRSEN. What occurred after that in your communications 
with the finance committee ? 

Mr. De Young. Well, thereafter, during July 1973, we discussed it 
with counsel. We declined. We then decided to bring all the facts 
to the attention of the Watergate staff, as I have indicated in my 
statement. 

Mr. DoRSEN. Did you ask that the contribution be returned ? 

Mr. De Young. We did. 

Mr. DoRSEN. And was it returned ? 

Mr. De Young. It was. 

Mr. DoRSEN. In connection with that I'equest, was that the first 
time that you notified the Finance Committee To Re-Elect the Presi- 
dent that the funds were corporate funds ? 

Mr. De Young. I think it was a day or two prior to that, but I am 
not sure. 

Senator Ervin. I am informed that there is a vote taking place. We 
will have to go and vote, so the committee Avill have to stand in recess 
until we return. 

[Recess.] 

Senator Ervin. Mr. Dorsen, you may proceed. 

Mr. Dorsen. Mr. De Young, I believe when the committee went to 
vote, you were discussing the communications you had, or your com- 
pany had, with the Finance Committee To Re-Elect the President. I 
asked you if tab 3 [exhibit 278-3] represents communications between 
your company, your attorneys, and the Finance Committee To Re-Elect 
the President ? 

Mr. De Young. That is correct. 

Mr. Dorsen. Mr. Chaiinnan, I ask that these tabs 1 through 3 be 
accepted as part of the record. 

Senator Ervin. Let the record show that they were received as 
evidence and will be appropriately marked as exhibits by the reporter. 

[The documents referred to were marked exhibits Nos. 278-1 through 
278-3.*] 

Mr. Dorsen. Mr. De Young, with respect to the othei* officials of 
Goodyear, am I correct that at no time were they ever asked to make 
any false statements by you to anybody in connection with their role 
in the campaign ? 

Mr. De Young. That is correct. 

Mr. Dorsen. One other matter to clarify something. Mr. DeYoung, 
you testified during your opening statement that the Swiss account 
was closed in 1970. At that time, was a sum of money brought to the 
United States or transferred to tlie United States ? 

Mr. De Young. It was. 

Mr. Dorsen. Where was that sum of money kept ? 

Mr. DeYoung. In a safe on company premises. 



See pp. 5852-5855. 



5527 

Mr. DoRSEN. In the company offices? 

Mr. Df.Yottxg. Yes. 

Mr. DoRSEN. Mr. Chairman, I have no further questions at this time. 

Senator Ervix. Do you liave any questions, Mr. Madigan? 

Mr. ]\Iadigax. Thank you, Mr. Chairman. 

Mr. DeYoung, was the only contact that you had with Mr. Stans 
your initial meeting with him in February 1972 with respect to your 
contributing to the Committee To Re-Elect the President? 

Mr. De Young. That is correct. 

Mr. Madigan. Had you spoken to Mr. Firestone, I believe it is, who 
talked to Mr. Stans at the two meetings in March of 1972? 

Mr. De Young. Did I speak to Mr. Firestone? I don't understand 
your question. 

Mr, Madigan. Right. Did you speak to him concerning what took 
place at those meetings ? 

Mr. De Young. Yes. 

Mr. Madigan. At any time did Mr. Stans apply any pressure, directly 
or indirectly, on your company or on Mr. Firestone, to contribute to the 
Committee To Re-Elect the President ? 

Mr. De Young. No pressure except they felt our amount the first 
time was low. 

Mr. Madigan. Now, could you tell the committee what the reason 
was that you decided to give this $40,000 to the Committee To Re-Elect 
the President? 

Mr. De Young. Well, on that basis we felt we were low, 

Mr. Madigan. Pardon? 

Mr. DeYoung. We felt that what we were giving to Mr. Stans — we 
were low, 

Mr. Madigan. I mean why did you decide to give any contribution 
to the Committee To Re-Elect the President rather than to anybody 
else? 

Mr. De Young. What do you mean by anybody else ? 

Mr. Madigan. Any of the opposing Presidential candidates. Why 
did you decide to give money, give a contribution to the Committee 
To Re-Elect the President ? 

Mr. DeYoung. As I said in my statement, we solely thought it was, 
the election of the President was, in the best interests of the country. 

Mr. Madigan. That was your sole reason ? 

Mr. DeYoung. That is correct. 

Mr. Madigan. Now, do you know of any reason that Mr. Stans should 
have had to think that you could not have raised the $40,000 through 
some source other than cor])orate sources ? 

Mr. DeYoung. I don't know what his thoughts were. 

Mr. Madigan. Does your company have any sort of good govern- 
jnent fund by Avhich individuals contribute to a Presidential campaign ? 

Mr. DeYoung. We do not. 

Mr. Madigan. Would it be possible to raise that nioney through 
contributions from various executives of the corporation? 

Mr. DeYoung. Well, I assume if I wanted to bring enough pressure 
I could but I am not about to do that. 

Mr. Madigan. Now, if I might ask you a few questions about the 
Swiss account you utilized to raise the money. 



5528 

Do I understand your testimony to be that — to use an example — if 
you had a purchase for $100,000 and you received a 10-percent dis- 
count that $10,000 woiild be funneled off into this special Swiss 
account and that is the money that you used for this corporate 
contribution ? 

Mr. De Young. That is right. 

Mr. Madigan. And that system stopped in 1967, is that correct ? 

Mr. De Young. That is correct. 

Mr. Madigan. And in 1970 the account was completely closed ? 

Mr. De Young. That is correct. 

Mr. Madigan. The money, the $40,000 that was contributed, was that 
money in that account in 1970 ? 

Mr. De Young. Yes. 

Mr. Madigan. And since that time has the company engaged in any 
system to generate cash such as the discount system ? 

Mr. De Young. We have not. 

Mr. Madigan. I believe those are all the questions I have, Mr. 
Chairman. 

Senator Ervtn. Mr. De Young, how did this money get from the dis- 
count account over in Switzerland to the United States ? 

Mr. De Young. Bv normal business channels, banking channels. 

Senator Ervin. What were they ? 

Mr. De Young. We are constantly transferring money back and forth 
between banks and we are doing business all over and it is just through 
the normal channels, debit on one and a credit on the other. 

Senator Ervin. Then it wasn't carried by hand from Switzerland 
to the United States? 

Mr. De Young. Oh, no, not at all. 

Senator Ervin. Now, 1 will have to be frank to say I don't find your 
statement, the reason that this company sent this monev in two pay- 
ments of cash, very convincing. I spent a large part of my life as a 
lawyer, and I did much work for corporations and I have searched my 
rnemory in vain since hearing your testimony and I don't recall a 
single time that a corporation ever paid me a single penny in com- 
pensation for legal services except by check. So, wasn't there some 
reason different than the fact that you had cash that you paid in 
cash? 

Mr. De Young. Cash has a tendency to get lost. 

Senator ER^^N, It particularly has a tendency to get lost from view, 
doesn't it, as compared to a check ? 

Mr. De Young. That is right. 

Senator Ervin. So I would find it more convincing if j^ou had 
stated that Goodyear sent this $40,000 of corporate funds down here 
by cash in order to conceal the fact that it was making a corporate 
donation. Now, is that not a fact ? 

Mr. DeYoung. That is right. 

Senator Ervin. Yes, fine. And they could have transmitted it down 
hero — if it would have boon a legitimate transaction they would have 
transmitted it down here — in all probability by either sending a 
letter down here with a check in it and an 8-cent stamp instead 
of paying the transportation cost of the vice president, to and fro, 
four times between Washington and England, would it not? Would 
that not have been the normal thing to do ? Either that or let the bank 



5529 

in England or whatever other bank you had down here in Washing- 
ton — let them issue a check for it? 

Mr. De Young. That is normal business practice, yes. 

Senator Ermn. Yes. Now, after the election and when Common 
Cause got to be active in this, Mr. Stans had a conversation with you, 
did he not ? 

Mr. De Young. Not with me. 

Senator Ervin. It was with Mr. Firestone, then ? 

Mr. De Young. That is correct. 

Senator Ervin. And he told Mr. Firestone that they needed some 
names of some individuals that might help to divulge this instead of 
the name of the Goodyear Co., did he not ? 

Mr. De Young. That is correct. 

Senator Er%t;n. So he was kindly supplied with the names of eight 
men, corporate executives, who allegedly, or rather were posing as 
donors of this money when they had not given a single penny of it, 
is that not correct ? 

Mr. De Young. That is correct. 

Senator Ervin. So was that intended to — who was that intended 
to deceive ? Somebody. 

Mr. De Young. Well, really, it was a delaying action. 

Senator Ervin. A delaying action? That was given to Mr. Stans 
so he could tell the court in the Common Cause suit that ? 

Mr. De Young. No, when we were asked to confirm it we denied that. 

Senator Ervin. I know. But as I get it, you say these men would 
not have gone and committed perjury. That had they been summoned 
and given, required to take an oath tellino- the truth they Avould not 
have committed perjury but they were willing to have a false repre- 
sentation made that was not uiider oath, is that not so ? 

Mr. De Young. That is correct. 

Senator Ervin. Thank you. 

Senator Montoya. 

Senator Montoya. I do not care to ask any questions, Mr. Chairman. 

Senator Ervin. Senator Weicker. 

Senator Weicker. I notice in your statement, you indicated it was 
solely because "we"" thought the reelection of the President was in the 
best interest of the country, it was not with a vieAv toward obtaining 
Government favors, nor were you pressured in any way into making 
it. Who was the "we"' who thought that ? 

Mr. De Young. Mr. Firestone and I. 

Senator Weicker. Mr. Firestone liimself ? 

Mr. De Young. Yes, sir. 

Senator Weicker. Did you step forward and volunteer information 
to the prosecutor after American Airlines did it? What motivated you 
to step forward at all ? 

Mr. DeYoung. Because of the publicity we were getting and we 
found out then that it was very, very serious, what we had done. 

Senator Weicker. Well, the degree of seriousness didn't cliange. It 
was serious when you did it. So it was a matter of being discovered or 
the publicity that was of concern to you ? 

Mr. De Young. That is right. 

Senator Weicker. Has any judgment been passed on Goodyear? 

Mr. De Young. There has. 



5530 

Senator Weicker, What does that consist of ? 

Mr. De Young. October 17, 1973, the special Watergate prosecutor 
staff filed in the U.S. District Court for the Xorthern District of Ohio 
an information which charged both the company and me with having 
committed misdemeanors in violation of section 610 of title 18, United 
States Code, by making and consenting to a $40,000 contribution in con- 
nection with the Presidential election of 1972. The company and I 
pleaded guilty to the charges. Maximum fines which were assessed by 
the court have been paid, both by the corporation and myself. 

Senator Weicker, What fines were assessed ? 

Mr. De Young. $5,000 — the maximum fine was $5,000 to the company 
and $1,000 to me personally. 

Senator Weicker. And the shareholders all will be sharing in the 
paying of the $5,000 fine, is that right ? 

Mr. De Young. What do you mean ? 

Senator Wicker. Well, the $5,000 fine was paid by the corporation, 
so in effect, all the shareholders are involved in paying the fine, is that 
right ? 

Mr. De Young. That is correct. 

Senator Weicker. Even thouo-h the shareholders weren't consulted 
as to whether or not they thought the reelection of the President was 
in tlie best interest of the country. Nevertheless, they are going to 
pay for the actions of you and INIr. Firestone. Is that right? 

Mr. De Young. Well, they pay for all actions of the corporate deci- 
sions that are made. 

Senator Weicker. Well, I would say it is a pretty sorry day for 
Goodj'ear, wouldn't you ? 

ISIr. De Young. Not necessarily. 

Senator Weicker. Of course, again, it is only a matter of publicity, 
not of principle, that had you step forward and has you before this 
committee, is that correct ? 

Mr. DeYoung. That is probably correct. 

Senator Weicker. It is a pretty sorry day. 

That is all I have, Mr. Chairman. 

Mr. Dorsen. I have no further questions. 

Senator Ervin. Do you have anything further, Mr. Madigan ? 

Mr. IVIadigan. No further questions. 

Senator Ervin. Thank you, Mr. DeYoung. You are excused. Thank 
you very much. 

Senator AYeicker. Mr. Chairman? 

Senator Ervin. Senator Weicker. 

Senator Weicker. ]Mr. Chairman, I wonder if I might inquire of the 
chairman whether or not the committee has received the courtesy of a 
response to the request that it made of the President of the United 
States, which request was voted by the committee at its meeting last 
Tuesday. 

Senator Ervin. No, the committee has not received any response 
whatsoever concerning the request that the committee meet with the 
President and receive a statement from the President and exercise the 
privilege of questioning him on tliese tragedies known collectively as 
the Watergate affair. 



5531 

Senator Weicker. Might it be possible, then — I really do not know 
if, in a civilized community, when the Congress cannot even commu- 
nicate with the President, I think that obviously, serious problems 
exist. Is there anything further that counsel would suggest that can 
be done to get a response? I do not care whether — well, obviously, I 
care, but ^s'e do not have either his yes or no. All we have is a series of 
leaked statements which I hardly consider a dignified response to what 
I believe was a courteous request by the committee of the President. 

Senator Ervin. "Well, I am inclined to think the committee has done 
all it can do. We have been asking ever since Alexander Butterfield 
testified here and revealed the fact that conversations with the Presi- 
dent had been electronically recorded since the spring of 1971 until 
after these hearings started. We have asked for those tapes and been 
refused them. 

We have asked for records, memorandmns, and documents and other 
materials under the control of the President which are relevant to the 
matters this committee is authorized to investigate, and we have not 
received them. So I see nothing to do except to try to pursue our case. 
We have a bill passed through the Senate that gives the committee, 
gives the courts undoubted jurisdiction of the suit brought by the 
committee for the tapes and certain memorandums, and I am infoniied 
by the House Judiciary Committee that unfortunately, it cannot be 
acted on until after their recess. But I hope that we can pursue that 
case. 

I hope above everything else, that the White House will relent and 
assist us in our search for the truth in respect to the Watergate affair. 

The committee will stand in recess subject to the call of the Chair. 

[Whereupon, at 8 :25 p.m., the hearing was recessed, to reconvene 
subject to the call of the Chair.] 



5532 



EXHIBIT NO. 262-1 



\Zyi :i:x ._ ^ TAB G 



CAPITALIZING ON THE INCUMBENCY 



S'.ibstanf iai assistance to the Spanish speaking ca:npaign can be provided 
through use of the control of the Executive Branch. Through this control, 
we can fill in any gaps in the President's record and generate favorable 
publicity for the campaign persuation effort. In addition, a number of 
Spanish speaking programs ore sources of political information. 

Bill Marunioto is responsible for submitting a plan to capita'lize on the 
, .incumbency b'y May 1. The elements of this plan will be directed to 
achieving the following end results. 

(1) To develop specific ic'cas for i;sing grants, pcrsonr.el appointji-ents 
and prograins to fill out any gaps in the President's record, e.g., 
appoint a \!cxican An.erican to a rcgul^.tory commission. 

(2) To set up organii^ational procedures and contacts with the appro- 
priate White House Staff members and the Executive Branch for 
accomplishing the above steps. 

(3) To provide the campaign tc'a;n v.ith up to date information on all 
programs directed at the Spanish speaking community. 

(4) To use the Departments and Agencies public information offices 
to publicize favorable Adn-.inist ration activities in behalf of the 
Spanish spc-aking. 

(5) To ensure that triose Fidcraily subsiciiz-ed progra:ns which serve 
as ha\ens for opposition political operatives are closely supervised 
so that they are devoting all their energies toward solving the 
problems of the Spanish speaking poor (particularly in Septeinber 
and October). 



5533 



Exhibit No. 262-3 






COMMITTEE FOR THE RE-ELECTION OF THE PRESIDENT 
CONFIDENTIAL December 16. 1971 



MEMORANDUM FOR THE ATTORNEY GENERAL 
SUBJECT: Interest Group Reports 



Bart Porter and Chuck Colson's staff have compiled extensive 
reports in four areas — Spanish-speaking, Labor, Middle 
America, Ethnic-Catholic. Although these reports are being 
transmitted to you in full, much of the material in them 
does not require immediate action on your part. The follow- 
ing summarizes the central direction of each report and 
gives the decision-points which require your attention now. 
If you subscribe to the general viewpoint expressed in the 
following, we will see that copies of the full reports are 
circulated among the senior members of the campaign staff. 



Spanish- Speaking 

Spanish-surnamed Americans comprise approximately 5% of the 
total population (9 million Mexican-Americans, 3 million 
Puerto Ricans, 700,000 Cubans, the rest scattered). Although 
this group votes less frequently than other groups, it is 
significant because of its concentration in such key states 
as California, Texas, Illinois, New Jersey and Florida. And 
despite its overv;helming Democratic registration, it is felt 
that some movement can be induced in its voting habits. 

Each group must be handled separately with specially-tailored 
appeals. Cuban-Americans, upwardly mobile and avidly anti- 
Communist, are most open to appeal f r< n the President. Puerto 
Ricans, the nation's most impoverishe ■ minority, are least 
attractable. On the other hand, all Spanish-speaking 
Americans share certain characteristics — a strong family 
structure, deep ties to the Church, a generally hard-line 
position on the social issue — which makes them open to an 
appeal from us l_f^ they can be convinced the President has 
recognized their social and economic problems. 



5534 



CONFIDENTIAL 



This is especially true now that the Di locratic Party is 
under suspicion for favoring politically potent blacks at the 
expense of the needs of the Spanish-speaking people. 

The report makes detailed recoranendations for highly-visual 
social and econocic cevelcprrent projects £nd for publicizing 
the same. It suggests heavy exploitation of the Cabinet 
Committee on Opportunity for Spanish-speaking peoples which 
is now closely allied with Colson's shop and Bill Karumoto on 
political and public relations questions. It advocates 
consideration of undercover funding of La Raza Unida, a 
splinter party, in exchange for an agreement that La Raza 
Unida runs presidential candidates in California and Texas. 

The following specific recommendations require your immediate 
attention: 



It is recommended that the Cabinet Committee jremain a 
responsibility of Finch, but that Colson have responsibility 
for political and public relations questions. 

APPROVE DISAPPROVE COMMENTS 



It is recommended that Magruder be charged with coming up 
with somebody to direct Spanish-speaking political activity 
from the Campaign Committee. 

APPROVE DISAPPROVE CO^!^IKNTS 



The organized labor movement in this country is comprised of 
approximately 21 million people, some 17 million'of whom are 
members of AFL-CIO affiliated unions. It is felt that up 
until one year ago the Administration was in a strong position 
witff labor, but that the combination of our foreign policy, 
the Philadelphia Plan, the suspension of the Davis-Bacon Act, 
the new economic policy, and subsequent events have changed 
that. There are some significant exceptions. The Teamsters, 



5535 



EXHIBIT NO. 262-5 



THE WHITE HOUSE 
CONFIDENTIAL Washington 






March 2, 1972 



MEMORANDUM FOR THE HONORABLE JAMES LYNN 

FROM: ■ WILLIAMW.-'S'LARUMOTO 

SUBJECT: El Diario Editorial 



In line with our recent discussion reg?rding NEDA and our comments 
of "the tail wagging the dog, " I am attaching an editorial written 
by a NEDA employee opposing the appointment of Cip Guerra as 
Deputy Director of OMBE. 

This is the latest example of the unwillingness to cooperate in a 
"spirit of cooperation" with the Administration. I think before 
Commerce signs off on their $2 million grant, you should sit down 
with Frank Viega and explain the facts of life. 

I would appreciate being kept abreast of this highly important matter. 



Attachment 



ADMINISTRATIVE 
CONFIDENTIAL 



5536 



Exhibit No. 262-6 

THE WHITE HOUSE 
WAS H I NGTON 



March 3, 1972 



MEMORANDUM FOR: 

FROM: 

SUBJECT: '' 



CHUCK COLSON 



BILL ( 



\oX 



ivIARUMOTG 



Weekly Report for Brown Mafia 
Week of February 28- March 3 



The following action took place this week: 
1. Personnel Matters 

a. We have recommended a Los Angeles Chicano for one of the 
positions on the ICC. Could get a lot of mileage out this one. 

b. Continuing to work on developing Chicano Candidates for the FMC, 
U.S. Tax Court and the FPC. 

c. Tony Rodriguez compiled and sent a list of Spanish Speaking for 
any of the 22 advisory committees for USOE. 

d. Compiled a list of 1 5 key Spanish Speaking leaders regarding the 
Elair House Dinner. 

e. In the process of compiling another list for invitations to the 
Sequoia. v 

f. Compiled a list of Spanish Speaking for advisory committees ali 
the S^^ate Department. 

g. Working with ACTION in an attempt to get them -to hire a Puerto 
Rican for the New York Regional Director j <b. 

h. Working on transferring the present executive director at the 

Cabinet ComiTiittee to another agency and finding a replacement. 



5537 



Rodriguez met with Senator Tower's Chicano campaign coordinator 
regarding a Chicano Republican campaign organization for the Senator. 

Alex Armendariz and Tony Rodriguez met with Roy Blatchor at OEO 
regarding a $Z00, 000 grant to a Spanish Speaking firin in California. 
The grant is to study and review Spanish Speaking grants that were 
made last year by OEO. 

Rodriguez hosted the Board of Directors of the National Hispanic 
Finance Committee for the Re-Election of the President (the group 
that plans to raise $1 million from the SS community) prior and after 
the testimonial dinner for Maurice Stans last week. 

Rodriguez coordinated ticket arrangements for 4 people for the Presi- 
dential Box at the Kennedy Center. "" 

Rodriguez requested several weeks ago, autographed photos of the 
President be sent to some of our key SS leaders. The request was 
filled this week and we will continue to do this. Ditto for the Vice 
President. 

In conjunction with a speaking engagement I have on March 25th in 
San Francisco, Rodriguez has arranged for me to meet with the three 
Regional Directors for Region X who are Chicanes (Labor, HEW and 
SBA). Will discuss plans regarding the coming months as a follow-up 
to their meeting with Bob Finch and Henry Ramirez. 

Attached is a schedule of speaking engagements for our SS appointees 
for the month of March. As soon as Alex gets his demographic study 
completed, we will generate nnore of the engagennents so we have some 
better platforms to speak fronn, particularly for the Sanchez's, 
Banuelos', Ramirez's, and Villarreal's. 

Continued working with Harry Dent's shop and Bob Brown re a Chevrolet 
dealership in Dallas, Texas. 

Met with Ray Hanzlit, Dave W erner (OMB), Ramirez, Arinendariz, 
and Conde regarding the SS report to the March 8 Under Secretaries' 
meeting. 



A TRUE COPY 



24-650 O - 74 - If 



5538 



11. The testimonial dinner in Los Angeles on March 19th for our SS 
Presidential appointees is coming along very nicely. The organizing 
committee has already reportedly sold 2, COO tickets and are projecting 
an audience now of 4, 000 people composed of 90% Chicanos. The 
dinner has been moved from the Century Plaza Hotel to the new Los 
Angeles Convention Center which has much larger facilities. Bob 
appears to be lined up as the M. C. The Archbishop will also be in 
attendance. 

12. Armendariz and I are scheduled to see Larry Silberman at Labor, 
Jack Venneman at HEW, and Joe Blatchford at ACTION next week. 
This should wrap-up the Departments and Agencies we want to cover 
to date. 

13. Arranged a meeting for March 7th with Bob Brown, Henry Ramirez, 
and Stan Pottinger regarding a black-brown problem we're having in 
San Francisco. 

14. Kicking around an idea of holding a series of briefings for our SS 
leaders from throughout the country. Format would entail a one-day 
program centered in the Indian Treaty Room with representatives of 
the Donnestic Council, National Security Council, OMB, and Cost of 
Living Council making presentations. The idea here would be to 
give this segment of our country an over-view of the domestic and 
international scene and not just address ourselves to Spanish Speaking 
issues and programs. Would appreciate your reaction on this idea. 



A TRUE COPY 



5539 



SPANISH SPEAKING APPOINTEES SPEAKING SCHEDULE FOR MONTH OF Mj 



PHILLIP V. SANCHEZ, DIRECTOR, OFFICE OF ECONOMIC OPPORTUNITY 



March 2 CAP visit and meeting with corrununity leaders Houston, Tex 

March 3-4 Texas CAP directors and commujiity leaders San Antonio, 

March 4 Testimonial dinner for Edward Aguirre Sacramento, 

March 10 Testimonial dinner for Chairman, Coalition New York, N 
of Hispanic American People, Luis Quiera- 

Chiesa . 

March 13 '. Legislative seminar of the National Federation Washington, 

\ of Steelements & Neighborhood Centers 

March 15 " Alabama and Tennessee CAP Directors Assn. Huntsville, A 

March 16 Arkansas CAP Directors Association Little Rock, 

March 17-18 U.S. Jaycees Tulsa, Oklah 

March 19 Presidential Testimonial Dinner - ' Los Angeles,' 

March 22 Taping - State Economic Opportunity Ofc. San Francisc 

March 23 American Medical Association Chicago, Illi 

March 27 Comstock Club Sacramento, 

March 28 Testimonial dinner for Bert Gallegos Denver, Col< 



HENRY M. RAMIREZ, CHAIRMAN,' CABINET COMMITTEE ON OPPORTUNl 

■_ SPANISH SPEAKING PEOPLE 

1 

March 3-4 National Urban Fellows Mentor's Conference Atlanta, Geo 

Georgia State University 

March 11 ~~ Spanish Speaking Political Assn. of San Diego Mission Vail 

County Convention Center 

March 19 Presidential Testimonial Dinner \ Los Angeles 



5540 

..■qPANIS H SPEAKING APPOINTEES SPEAKING SCHEDULE FOR MONTH OF MARCH , 

RO mNA ACOSTA BANUELOS, UNITED STATES TREASURER 

March 1 TY Interview by U. S. Information Agency Washington, D. C. 

from Madrid 

March 2 Republican National Committee Leadership Washington, D. C. 

Conference Luncheon 

March 3 Republican National Committee Leadership Washington, D. C. 

Conference Breakfast 

March 4 Panel member on TV Interview - WTTG Washington, D.C.' 

March 4 Pan American Liaison Committee , ' Washington, D. C. 

March 6 - Interview by HEW Voice of America Washington, D.C. 

Kiarch 7 Continuation of Readers Digest Interview Wa^Jiington, D.C. 

March 8 Senate-House Majority Dinner Washington, D.C. 

March 10 Budget hearings on House Committee Approp. Washington, D. C. 

March 11 Women's National Republican Club Luncheon Ne-w York, New Yo 

March 13 All Nations Womens Club visit (guests are Washington, D.C. 

from New York, N. Y. 

March 14 Board of Trustees of Federal Womens Award Washington, D.C. 

Dinner . 

March 17 Our Lady of the Lake College San Antonio, Texas 

March 18 San Antonio Mexican Chamber of Commerce San Antonio, Texas 

Installation of Officers Banquet 

March 19 Presidential Testimonial Dinner Los Angeles, Calif, 

March 21 Soroptimist Club of Los Angeles Los Angeles, Calif. 

March 22 East Los Angeles D.W. Griffith Jr. High Los Angeles, Calif. 

March 23 East Pasadena Republican Womens Club > Los Angeles, Calif. 



5541 



. SPANISH SPEAKING APPOINTEES SFEAKING SCHEDULE FOR MONTH OF MARCH V 
CARLOS C. VILL.'.RREAL, ADMINISTRATOR, URBAN MASS TRANSPORTATION," DC 
March 10-20 Traveling with Secretary of DOT in Mexico City Mexico City, Mexico 

March 28 Urban Transportation Advisory Council Washington, D. C. 

DR. JAVIER MENA, DEPUTY DIRECTOR, JOB CORPS, DOL 

March 2 AFL-CIO Convention Pittsburgh, Penn. 

March 11 Spanish Speaking Political Association San Diego, Calif. 

March 13-14 Conference on Federal and Private Foundation San Francisco, Calif, 

Programs Related to High Education ■' 

March 16 ' EEOC Meeting - Speech - "The Spanish Washington, D. C. 

Speaking and Manpower'' 

March 21 Montgomery College - Speech - "Mexican Takoma Park, Maryll 

Americans - Americas Forgotten People" ' I 



MEMORANDUM 



5542 



Exhibit No. 262-7 



THE WHITE HOUSE 



March 3, 1972 



MEMORAIMDUM FOR: 



FROM: 
SUBJECT: 



BOB BROWN 
BILL MARUMOTO - 
PAUL JONES l-'-^" 
ALEX ARMENDARIZ 



FRED MALEK' 



Office of Minority Business 
Enterprise Grants 



Each of you "has expressed concern to me recently about the use of 
OMBE grants. This, obviously, represents an excellent opportunity to 
make a contribution and gain headway in the Black and Spanish- Speaking 
areas. 

I have discussed this situation with Ken Cole, and we are in agreement 
on the importance of this program to our efforts. However, if we are 
to be at all effective in the OMBE area, we must ensure that the V.Tiite 
House speaks with a single voice. Ken and I are agreed that that single 
voice will be John Evans of the Domestic Council staff. 

I believe assigning John the complete responsibility in this area can be 
quite effective and helpful to our efforts. John has the same objectives 
that you do, and I a«i-&ure you will find-him most receptive to youx 
inputs and needs. In this regard, I think it would be helpful if at an 
early stage you each sat down with John to discuss the Blacks and 
Spanish- Speaking problems respectively to ensure he is fully apprised 
of your needs and that a meaningful liaison is established. 



Ken Cole 
Bill Gifford 
John Evans 



5543 



MEMORANDUM 



Exhibit No. 262-8 



THE WHITE HOUSE 



ito 



' ^^A n n^ 1^ n • S --/^arch 17. 1972 y . \ 



MEMORANDUM FOR: 
FROM: - . 
SUBJECT: 



CHUCK COLSON 

BILL (MQ)V-UARUMOTO 

Weekly Report for Brown Mafia 
Week of March 13-17, 1972 




The following action took place this week: 

1. Alex Armendariz, Tony Rodriguez and I met with rep- 

resentatives of Harry Dent's, Clark McGregor's and 

Bob Brown's offices with the grant officials of OEO to 
discuss ways of improving coordination and more 
effective means of getting political impact in the grant- 
making process. Discussion pointed out the tremendous 
need for a centralized computer capability for all 
Departments and Agencies whereby one could obtain data 
regarding grants to any congressional district and/or , 
organization. 

2. Armendariz, Rodriguez, Conde and I were all involved in 
someway regarding the Macch 19th Testimonial Dinner for 
the Spanish Speaking Presidential appointees. 

3. Armendariz and I met with Under Secretary Silberman at 
Labor to discuss their role in the Spanish Speaking arena. 
He appears to be understanding and responsive to our 
challenges and problems. 



5544 



4. Tony Rodriguez distributed 18 tickets for performances for 
the Presidential Box at the Kennedy Center. 

5. On personnel matters, Rodriguez and I worked on the 
following: 

a. Advisory Council for the Bi- Centennial Commission. 

b. .Associate Director, Domestic Operations, Action 
\ (Level rv). 

c.': Wrapped up the placement of Maurilio Ortiz as 
':''. ..'Regional Director (GS-16), Community Relations 
.,^"- Service, Department of Justice, Region VI (Dallas). 

Ortiz Lecomes the 28th Presidential and/or supergrade 

appointee under the Nixon Administration. 

d. Over-seeing the paperwork on Cip Guerra, proposed 
deputy director for OMBE (GS-17). " ^ 

e. Rodriguez assisting OMBE in getting SS candidates for 
field representatives. 

f. Continue work with Kingsley's operation to place Ed Aponte, 
Executive Director at the Cabinet Committee in another 
agency. Labor Department appears to be the best bet. 

g. USIA just hired Ed Hildalgo as Special Assistant to 
Frank Shakesphere at USIA (GS^IS). 

h. Continue to work on/FCCyand U. S. Tax Court actively 

looking for SS. ( j/ , 

6.- Rodriguez and Armendariz met with several hundred state-wide 
Mexican Arnerican Republican leaders and potential- contributors 

, in San Diego last Saturday at a reception. It v/as an opportunity 
for both jmen to strike the troops in the field. 



5545 



In the proposal and grants area, Rodriguez was involved 
in the following: 

a. . Worked ^yith HUD officials re a Chicane Builders- — 

Consortium in San Antonio interested in a $100, OOCT grant. 



b. In conjunction with Conde, arranged a signing ceremony, 
for Urban Interface Corporation (Albert Trevino) of 

■ I^aguna Beach, the grantee; Bob Finch and Carlos 
\ VUlareal. •: 

c. Again in conjunction with Conde, arranging a signing 
ceremony for a $646, 000 8(a) grant to Professional 

• '. Placement Services (L. R. Gutierrez) of Kansas City 
. - with Bob Finch and hopefully the Administrator of 

■ SBA. n 

Rodriguez and I nnet with Pat O'Donnell re briefings for nf^~ (V 

SS leaders and press. We plan one per month beginning in " /-^ 
April in groups of 20 to 25. Rodriguez also working with tnX 
State President of LULAC, California, regarding our SS }S)i- ''^^'^ 
appointees as speakers for their State Convention next rnojitbVV^ ^a 

Rodriguez met with Manuel Gonzales, Assistant to the State 
Republican Chairman of New York regarding the Puerto Ricaa 

community. ' I 

Armendariz, Rodriguez, Ramirez andl attended a -reception [ 

by a joint Chicano and Japanese Republican group in Los Angeles 
last Friday in honor of Ramiirez and nnyself. 



Met with Ben Fernandez and other representatives of the 
National Hispanic Finance Committee for the Re- Election 
of the President. > 

Rodriguez arranged to have expenses for three Chicano rep- 
resentatives to fly in for a meeting with Curtis Tarr at the 
Selective Service system last Wednesday, 



I 



5546 



I am still working with a Chicano group in San Antonio - / 

who are trying to obtain a Chevy dealership. 

On the L. A. Testimonial, Conde is coordinating a television A (/ ^^ 
taping with KMEX in a Meet the Press format. KMEX is -/(/^ (j 

part of the Spanish International I^twcKrk^ndJh_e_show--v,dU--^-/)j^T/-^l 
be seen in New York, Miami, San Antonio and Los A-ngele|^^ '^ 
Participants will be Phil Sanchez, Romana Banuelos, ' 



Henry Ramirez and three others. 

15. Conde assisted Mrs. Banuelos in re-writing a speech she's 
going to give in San Antonio, 



16. Conde edited the Cabinet Committee Newsletter that is 
' coming out with it's second edition. 

17. Conde trying to wrap up the Adininistration' s achievement 
list. Will want to show you the draft possibly t,°xt week." 






18. Conde taUcing to Time Magazine re an article about the ' YpirTV' 

SS in the Administration. He is also working on a feature ^^ av^___ 
with Esquire Magazine. '•'^ uO .^-^ 

19. Conde nnet with Nick Reyes regarding the launching of a SS | 
magazine based on the Ebony-Lii'e format. The publishers appear | 
to be very receptive to articles about the SS appointees and 

, Administration achievements. 

20. Conde wrote a statement for Armendariz on his announcement " _ j 
as SS director for the campaign cornmittee. 

cellared Malek . ' ' , 

Ray Hanzlik . . ' •• 

Doug Hallett ' " -- - .' 

Alex Armendariz 

^ •. Tony Rodriguez 

-—; Carlos Conde 

; ' ■ Henry Ramirez . 



5547 



Exhibit No. 262-9 

MEMORANDUM ^ ~^^ ^ ^ 

THE WHITE HOUSE 



ADMINISTRATIVE- CONFIDENTIAL 

March 24. 1972 



MEMORANDUM FOR: CHUCK COLSON 

FROM: ' BILL {MO) MARUMOTO 

SUBJECT: Weekly Report of Brown Mafia, 

Week of March 20-24, 1972 



The following action took place this week: 

1. The Los Angeles Testimonial Dinner for five out of our six 
Presidential SS appointees was held last Sunday. Despite 
some of the problems that occurred, the sponsors had 
3,000 plus in attendance. This event emphasized the need 
for better coordination from The White House. There were 
too many "fingers in the pie" and the inexperience of the 
sponsors showed in the press coverage, protocol, and 
program contents. 

2. Reviewing the draft of the SS campaign plans that Armendariz 
developed. Looks very good. 'Will >iave a copy to you after 
we have an opportunity to polish it up. 

3. Met with Assistant Secretary Malcolm Lovell (Labor) 
regarding coordinating manpower grants and supergrade^ 
hiring in the SS arena. 

4. Met with Howard Phillips, Associate Director for Program 
Review at OEO regarding coordinating OEO grants in the SS 
community. 



b 



5548 



5. Attended a meeting called by John Evans regarding minority 
business enterprise. Asked that Armcndariz and Rodriguez 
also be invited. Discussed were recipients of grants for FY 1972 
as well as those being considered for additional grants for 

FY 1972. 

6. Armendariz and I worked with Des Barker regarding a news 
' release from the Census Bureau on the SS. 

•7. Working with Pat O'Donncll and Armendariz to obtain the _ 

Vice President for a May 5th or 6th $100 fund- raiser for the 
National Hispanic Finance Committee in Miami. 

8. Conde is submitting a schedule proposal for the newly 

' : appointed OMBE National Advisory Council to meet with 
the President in the Oval Office some time next nnonth. 

9. Rodriguez and I worked on following personnel matters: 

a. Office of Special Drug Concerns National Advisory - — 
Council. ^ 

b. Regional Manpower Administrator, Region II (New York), 
Department of Labor. 

c. Regional Manpower Administrator, Region VI (Dallas), 
Department of Labor. 

d. U.S. Tax Court ' 

e. Federal Marj,time Commission 

f. Federal Power Commission 

g. Deputy Director, OMBE 

» 

10. Rodriguez and I worked on the agenda for briefings for the 
SS leaders to begin next month. Will have our ideas to you 
by next week. 



5549 



I. Rodripiiczi making arrangements for Testimonial Dinners 
in California and New Mexico for four of our supcrgrades 
during tlie montlis of April and May: Fernando DcBaca, 
(Regional Director, DIIEW, San Francisco) in New Mexico 
and Xavier Mena (Deputy Director, Joh Corps), Edward 
Aguirrc (Regional Director, Department of Labor, Sin 
Francisco) and Joe Casillas (Regional Director, OEO, 
Denver), in California. 

I, Rodriguez met with Commissioner Figueroa, a Puerto Rican 
from the Governor of Connecticut's office to assist him in 
coordinating community relations activities with the 
Department of Justice. 

S. Rodriguez met with Bart Porter at 1701 to coordinate their 
respective responsibilities regarding the Spanish speaking 
Speaker's Bureau. 

I. Rodriguez met with the Director of Spanish Speaking Affairs 
of the Veteran's Administraticn regarding Spanish speaking- 
participation. 

). Rodriguez met with UMTA Administrator, Carlos Villarreal 
and his deputy to set aside $300, 000 for one of our Spanish 
speaking contractors. More details to follow. 

). Rodriguez met with Ray Gonzalez, Deputy Director of SER 
to assist in their activities with, the Department of Labor. 

I. Rodriguez met with Claudio Arenas, President of Urban 
Research Group'of Austin, Texas to assist in obtaining a 
migrant contract at the Department of Labor. 

I. Rodriguez wrote a critique on the Presidential Appointees 
Dinner held last Sunday in Los Angeles, which was prepared 
fpr 1701. 

\ ■ ■ — ■ 



5550 



19. Rodriguez submitted a request for a telegram from the — 
President to be sent to Mrs. Josefa Arrendendo of Terhpe, 
Arizona. A new elementary school is being named after 
her and her deceased husband in honor of their work in the 
community. ■ ' 

20. Rodrijguez submitted resumes of attorneys for the Legal 
Advisory Council at the Department of Commerce. 

21. Rodriguez coordinated the invitation, through Joseph Juarez, 
President of the American GI Forum for April 3rd Blair 
House Dinner. He is the first Spanish speaking invitee. 



: Fred Malek 
Ray Hanzlik 
Doug Hallett 
'■^lex Armendariz 
Tony Rodriguez 
Carlos Conde 
Henry Ramirez 



5551 



Exhibit No. 262-10 



MEMORANDUM 



THE WHITE HOUSE 
ADMINISTRATIVE- CONFIDENTIAL 



%^ 



March 31. 1972 



MEMORANDUM FOR: 

FROM: 

SUBJECT: 



CHUCK COLSON 

BILL (I«6nvlARUM6TO 

Weekly Activity Report for 

Spanish Speaking 

Week of March 27-31, 1972 



a. 



The following activity took place this week. 
1. Personnel matters: 

a. Rodriguez submitted a list of names for OEO 
Regional Advisory Committees. 

b. Rodriguez working with Departinent of Labor re 
candidates for regional nnanpower director for 
Region II (Dallas). 

c. Rodriguez developing candidates for Director of 

the Bi-Lingual Program at USOE. 

d. Rodriguez developed candidate for the B i- Centennial 
Connmission's National Advisory Committee. 

e. A list of SS celebrities is being developed for various > 
purposes. This will include entertainers and athletes. 

f. » The papers on the new deputy for OMBE are completed 

and job will be offered today. This is a WHPO placennent. 

g. Rodriguez developing SS candidates for the Federal 
Power Commission and Interstate Commerce Commission. 



5552 



-2- 



h. Six SS candidates developed by Rodriguez for the U.S. 
Tax Court are not heavy enough. 

i. Continuing to work with John Buggs at the U. S. 
Commission on Civil Rights re his §2 man. 

j. Coordinating with Herringer re Ed Aponte's appoint- 
ment as RMA, Department of Labor, New York. 

2. Worked with Finch's office re the NLRB- Farm Workers 

issue. To resunne nneeting next week again. 

3. Phil Sanchez met with the President yesterday for a 
stroking session. Conde arranged for photos which vnll 
be distributed immediately for maximum use. 

4. Wall Street Journal is doing a feature on the Administration's 
efforts with the SS and interviewed Finch, Armendariz, 
Rodriguez, Conde and myself. This should be breaking — 
within the next few weeks. 

5. Had an excellent meeting with our three SS regional 
directors of Labor, HEW and SBA in Region IX last 
Sunday. We're developing a master plan to generate 
maximun-i impact through their respective programs for 
their region. Will probably use this as a model for the 
other regions. 

6. Rodriguez met with Congressnnan Manuel Lujan (R-N. M. ) 
to coordirate a testimonial dinner on April 30 for 
Fernando DeBaca, Regional Director, Region DC for HEW. 

7. Rodriguez met with Manuel Queveda of Lyn Nofziger's ^ 
staff to become acquainted and coordinate our efforts. 

8. Rodriguez distributed 9 tickets for the Presidential Box 
at the Kennedy Center for a performance on March 29th. 

9. Rodriguez is assisting a Cuban group to obtain a $30,000 
grant to provide English as a second language. 



5553 



10. Rodriguez met with Homero Del Castillo of the Migrant 
Affairs, Department of Agriculture to discuss assistance. 

11. Rodriguez working with OEO to identify a sole-source 
contract for migrant studies for one of our SS research firms. 

12. Armendariz and I signed off on a $600,000 SBA/Navy grant 
to a SS California firm. 

13. Rodriguez established a program with some of our regional 
directors to offer technical assistance in the economic 
development area to small SS firms in the Southwest. 

14. Rodriguez coordinated a reception for Carlos Villarreal 

on April 8th with the Dallas Mexlcan^^American Republicans. 

15. Rodriguez worked with Ben Fernandez, President of the / 
National Hispanic Finance Committee regarding the Texas ~- 
situation. 

16. Rodriguez and I met with the following re various issues: 

a. Ray Ronnero, Deputy Director, Private Programs 
Division, OMBE 

b. Xavier Mena, Deputy Director, Job Corps 

c. Fred Romero, Director, Office of Training and 
Employment Opportunities, Department of Labor 

17. Met with Roy Batchelor, Assistant Director, OEO on 
Tuesday for a stroking session. 

18. Mei with Dave Gonzales and Sylvester Gonzales of 
Lo8 Angeles re assistance on two grants at OMBE. 

19. Worked with Ramirez re a grant application at OEO for 
- Joe Reyes of Washington, D. C. 



24-650 O - 74 - 19 



5554 



20. Worked with Conde re an Oval Office schedule proposal 
for the announcement of the newly-appointed members of 
the OMBE National Advisory CouncU. 

21. Continuing to work with Wally Henly and Bob Brown re a 
Chicano Chevy dealership in San Antonio, Texas. 

22. Working with lUy Hanzlik and Russ Deane re a proposed 
Brown Caucus meeting with the President. 

23. Conde has completed his first draft of the accomplishments 
under the Nixon Administration. 

' 24. The next SS appointees meeting is scheduled for April 3rd. ^ 
Herb Klein will be the guest speaker and wiU address--— 
himself to the communications area. We have also asked 
him to emphasize the importance of coordinating public 
appearances with our office, as well as their publicity. _ 
efforts. 

25. Conde and fare working with Stan Pottinger, Director of 
the Office of CivU Rights at HEW re a Bi-Lingual Education 
grant. An excellent possibility for an Oval Office meeting. 

26. The attached are the speaking engagements for our SS 
appointees for the month of April. 

27. Conde coordinating the appearance of Herb Klein at the 
opening of a new SS national magazine headquartered out 
of Denver, Colorado. 

28. Conde finished the achievement list and in the process of. 
■ sending it to Departmental PIO's for accuracy check and 

additions. Sending only the section pertaining to each one. 
♦Stan Scott and Conde have been meeting all week with 
Departmental PIO's who have been designated to disseminate 
minority group information. They have been going over 
their plans and discussing ways to implement them- 



5555 



29. Conde working on a fact sheet for the National Labor 
Relations Board - Farm Workers Union issue on the 
secondary boycott. 



Attachments 



cc: Fred Maiek 

Ray Hanzlik 
(..Mex Arnnendariz 

Tony Rodriguez 
■ — Carlos Conde - — 

Henry Ramirez 



MEMORANDUM 



5556 



EXfflBIT No. 262-11 



THE WHITE HOUSE 



ADMINISTRATIVE- CONFIDENTIAL 



April 7, 1972 



MEMORANDUM FOR: 

FROM: 
SUBJECT: 



CHUCK COLSON 
FRED MALEK 



BILL 



lud)j 



MARUMOTO 



Weekly Activity Report for Spanish 
Speaking - Week of AprU 3-7, 1972 



The following action took place this week: — 

1. Developed a plan for visits and Oval Office nneetings re the 
SS for the President and members of the First Family. 

2. Arranged for a meeting between Romana Banuelos and 
George Bell to discuss the three-week strike at her plant 
with the local union. 

3. Met with Frank Carlucci of the Office of Management and 
Budget to discuss programs regarding the SS. 

4. Held our monthly SS appointees meeting last Monday. 
Following items occurred: 

a. Herb Klein spoke on importance of good communications 
and how to use it effectively. 

b. Henry Ramirez briefed the group on the NLRB-Farm 
Workers Union situation. Conde developed a fact sheet 
with the cooperation of NLRB and Department of 

/ Agriculture. 



5557 



c> Tony Rodriguez discussed the briefings that are 

planned for SS leaders; the SS Speaker's Bureau; and 
recent fuU-tinne and advisory appointments. 

d. Carlos Conde discussed the SS fact sheet and requested 
appointees review it for accuracy, etc. 

e. Ray Romero of OMBE discussed a proposed conference 
\ for SS to be jointly sponsored with the CCOSS in July 

at the Air Force Academy. It will be focused on the 
needs and priorities of the SS in the seventies and will 
be limited to approximately 150 SS leaders throughout 
the country. 

Conde worked with the Treasury PR people on the Banuelos 
bill signing last Wednesday. It hit the media yesterday and 
we should get a lot of coverage on this one. 

Conde met with a staffer of La Luz, the new national SS " 
magazine a la Life, to discuss feature' articles in the ensuing 
months. The first edition had a favorable article on the 
Cabinet Committee. Banuelos and Conde will be at the 
magazine's dedication ceremonies in Denver this month. 

Resubmitted a request to the Vice President's office to 
appear at a $100 a plate black tie dinner in Miamisponsored 
by the National Hispanic Finance Committee of the Committee 
for the Re-Election of the President some time in the next 
' few months. Armendariz also working on it from his end. 

Working with Ray Hanzlik' of Bob Finch's staff on the NLRB 
Farm Workers Union situation to develop a game plan. 

Continuing to work with Russ Deane of Clark McGregor's 
office and Hanzlik re the proposed Brown Caucus meeting 
with the President. 



In the grants area, Rodriguez and I are working on the following: 

a. Reviewing with John Evans, Bob Brown and Wally Henley 
proposals and grants at OMBE to make sure the right 
people are being considered and receiving grants from 
OMBE. 



A TRUE COPY 



5558 



-3- 



b. Working with Conde and Stan Pottinger regarding the 
Oval Office announcement of the Bi-lingual/Bi-cu'Uural 
Spanish speaking television series for later this month. 

c. Worked with the OEO Region IX Director to distribute 
$200,000 to $250, 000 grant monies to 3 to 4 Chicane 
groups. 

11. The following personnel actions occurred: 

a. Rodriguez developed a half dozen candidates for the 

■. Federal Power Commission and the Inter-State Commerce 
Commission. 

b. Kept on top of the progress re the appointment of 

Ed Aponte as Regional Manpower Administrator, GS-16, 
Region II (New York), Department of Labor; Cip Guerra 
as Deputy Director, GS-16, OMBE; and also the director- 
ship of the Bi-lingual Education program at OE. 

c. Working with Bill Brown, Chairman of EEOC re the 
appointment of Pedro Esquivel as the Regional Director 
in Denver. 



12. 



d. Working with ACTION re Regional Director, Region I 
(New York). Have recommended a Puerto Rican; and 
Assistant Director for International- Operations^ — 

e. The National Advisory Council for the Bicentermial 
Commission has accepted our recommendation to 
appoint Dr. Frank Angel, President of New Mexico 
Highlands University as a member. 

Rodriguez nnet with representatives of Tuscon, Arizona, 
regarding preserving the name of a historical home which 
the Arizona Historical Society wanted to change from Carrillo 
Fremont House to John Charles Fremont House. He talked to 

tor Fannin's people in reference to this matter. 
Mrs?'~'^ix£n-rs^^l^cheduled to be at the dedication ceremonies 
and tire Chicanp--€ommunity was going to picket. Connie Stuart 
wireoSn-Ofisituation. . \ 



5559 



13. Rodriguez talked with Lee Pierson of OE to get some of 
our people on the forthcoming openings on two HEW •. 

- commissions. . -.^-. :.. ._. — 

14. Rodriguez discussed with Dave Wimer, Department of 
Labor, about a project being conducted in the country of 
Panama by two Spanish speaking representatives of DOL. 

It appears that AID wants the task force meeting to exclude 
our Spanish speaking. He got involved because AID does 
not have any Spanish speaking to do that work. The main 
person involved is Jim Silva. 

15. Rodriguez working with Fred Romero at DOL in the funding 
of La Causa Comun, a Puerto Rican group. We have tried' 
to be of assistance in this area, but found that the group is 
not on the up and up. Dr. Romero told Rodriguez that they 
are using someone else's proposal to obtain funding for 
themselves. They are strictly anti-Mejicano and are playing 
it to the hilt. 

/ 

16. Have been involved in the recruiting and placement of 
candidates for the Regional Director of EEO in GSA for / 
Chicago and Dallas. The two candidates have been Carlos /' / 
Ruiz, Chicago, and Zeke Rodriguez, Dallas. Both are ,. , 
Republicans. 

17. Rodriguez was called by Jose Lopez re the forthcoming 

"Chicano meeting" being held in San Jose, California, 

April 22-23, to nnaet with approximately 10-lS leaders of 
their meeting. 

^\ 

18. Rodriguez met with Jesse Bojorquez, President of Bronze 

Research Associates, Los Angeles, California, regarding a 
$60, 000 grant from the Office of Economic Opportunity- 
San Francisco, for his group. 



19. Scheduled Phil Sanchez to be at a fund raising reception on 

September 21st in Sacramento. The affair is being put together 
by the National Hispanic . Finance Committee. 



5560 



-s- 



20. Rodriguez met with the newest of our supergrades, 
Edward Hidalgo, GS-18, USIA, to give him the back-' 
ground of what our SS group is doing, and he has 
promised to fuUy cooperate. 

21. Rodriguez worked on the activities for the I6th of September 
(Mexico's independence from Spain)for the Chicago com- 
munity speakers. 

22. Rodriguez and I met with the Executive Director of Youth 

' Opportunities Foundation, Felix Castro, who is involved in 
obtaining scholarships for Mexican Americans in East 
Los Angeles. We will help to get funding from OEO for 
' - approxinnately $200, 000. 

23. Rodriguez has been in contact with Richard Zazueta, the Chairman 
of the Ad-hoc Committee on Manpower that met with Assistant 
Secretary Lovell this week and opened up lines of communication 
between their group and ours. .. _ 



cc: Ray Hanzlik 

urfTex Armendariz 
Tony Rodriguez 
Carlos Conde 
Henry Ramirez 
Tom Korologos 



5561 



Exhibit No. 262-12 



VJEMORANDUM 



TIIF. WIIITK IIOl'SK • 

WASHINGTON 

ADMINISTRATIVE- CONFIDENTIAL 



April 21, 1972 



MEMORANDUM FOR: 

FROM: 
SUBJECT: 



CHUCK COLS ON 
FRED MALEK 



} . >. 



Weekly Activity Report for 

Spanish Speaking 

Week of AprU 17-21, 1972 



The following action took place this week: 

1. Worked on proposal re the June visit of President Echeverria 
of Mexico. Had in-put from Armendariz, Ramirez, Conde, 
Sanchez, Telles, and Rodriguez. 

2. Arnnendariz and I met \with representatives of the SouTfhwest 
Council of La Raza re their interest tn obtaining federal 
funding. We are in the process of evaluating the pros and 
cons of funding them. 

3. Rodriguez and I met with a dozen or so Chicano ennployees 
at OE in the GS-13-15 area who were interested in what the 
Administration was doing for the SS. Had a very good 
nneeting, > 

4. Contacted several colleges re honorary doctorates for 

Phil Sanchez or Ronnana Banuelos for this year's comnnence- 
ment. Should get sonne good mileage out of it if we can 
swing it, 

• 5. Met with Irv Kator of the Civil Service Commission and Gene 
Costalea, director of the President's 16-Point Program, to 
impress upon them the importance of the program and the 
need to have a Puerto Rican in the #2 spot. 



5562 



6. Met with Fred Malek and Dave Parker along with the other 
project managers re scheduling activities for the President 
and members of the First Family. 

7. Met with Betty William? special assistant to Joe Blatchford 
at Action, re grants in the Foster Gransparents program as 
it relates to the SS and in particular, in California and Texas. 
It appears they will be able to develop some grants in a few 
key counties, 

8. Rodriguez and I met with Don Dunlop at SBA re grants to the 
SS from his agency. He has already been most cooperative 
and helpful in assisting some of our SS friends. 

9. Armendariz and I attended a meeting-re the Farm Worker* 

Union-NLRB situation. Others there included Bob Finch; 
Larry Silberman, Under Secretary of Labor; Phil Olson 
representing Dick Lyng, Assistant Secretary at Agriculture- 

10. Spoke to Bill Blair of Bob Brown's staff and Henry Cashen 

re the Chevrolet dealership for a Chicano group in San Antonio. 
We see scoring a lot of points if we can help on this one. 

11. Attended the CCOSS meeting yesterday. They discussed the 
NLRB-Farm Workers strike; President's 16-Point Program; 
Regional Council visits; the Committee's long-range plans; etc 

12. Met with Banuelos, Telles and Gallegos re their speaking 
engagements between now and the election in the 44 key counties 
Armendariz has identified. -Saw Sanchez last week on this 
matter and will see Villarreal next week to connplete the 
discussions with our Presidential SS appointees. 

13. Had lunch with Ben Fernandez, and three Cubans from Miami 
re stroking thenn for the National Hispanic Finance Committee. 
Between the three we will be raising $100, 000 plus. 

14. Working on the second cut re Presidential and First Family 
activities in the SS arena during the ensuing months. Deadline 
is Monday. ^ 



5563 



-3- 



15. Working with Ivarry Silberman's office at Labor re a 
$2 million manpower grant for the American GI Forum 
which addresses itself to training Vietnam SS veterans. 

16. Asked the RNC to stop distribution of their SS fact sheet 
which doesn't appear to articulate the President's accom- 
plishments in the SS area. 

17. Discussed with Armendariz, Rodriguez, Conde and Ramirez 
a better means of utilizing the Banuelos dollar bill project; 
i. e. , encasing it in plastic which would cost only about 65^ 
each. 

18. Worked up a schedule proposal at the request of Dave F^rker 
re the President visiting a bi-lingual program in Orange County. 

L9. Requested appearance of the Vice President for a $100 a plate 
dinner in Miami for the National Hispanic Finance Committee; 

20. Suggested to the both of you that four of our high-level SS 
appointees be included in the President's proposed trip to 
Texas on April 30th. 

21. Suggested to Armendariz that some time in the near future he 
schedule a meeting with John Mitchell and the National Hispanic 
Finance Committee Executive officers. We need to continue 
stroking these guys. 

22. Rodriguez lining up Ed Nixon-for a couple of testimonials 

coming up next week. 

23. Rodriguez met with a group of Cubans from Miami who want to' 
contribute $100, 000 to the campaign but not through the National. 
Hispanic Finance Committee. Will keep you abreast of his 
progress. 

24. Rodriguez met with Jose Useva, Republican State Chairman for 
Puerto Rico to discuss appointing sonne of their key people on 

. Presidential Boards and Commissions. He also met with 
Maime Pieras, the Puerto Rico State Nixon Chairman re 
assistance in their fund raising activities and positions with 
the Administration. 



5564 

-4- 

25. Rodriguez working on following activities: 

a. May 13 - Testimonial Dinner for Antonio Machado- Miami. 



b. May 21 - Fund raiser with Bob Finch sponsored by the 
National Hispanic Finance Committee. 

c. May 11 and 19 - Cocktail reception with Banuelos sponsored 
, ^ by the Nixon State Chairnnan in California. 

d. April 21 - F\jnd raiser with Phil Sanchez sponsored by the 
National Hispanic Finance Committee in Sacramento. 

e. April 29 and 30 - Fund raiser with Henry Ramirez in 
East Los Angeles for the National Hispanic Finance 
Committee. 

26. Rodriguez met with Art McZier of SEA re publicity for SBA's. 
Minority Business Enterprise program. 

27. Rodriguez working with the three Chicano regional directors 
of Region DC re the game plan involving employment, funding 
and publicity for the SS in that region. 

28. The following action took place in the personnel area: 

a. Rodriguez and I met with SS representatives of HEW re 
their 16- Point Program. They're having problems 
effectively implementing their program. 

b. Rodriguez assisting Arnnendariz and the November 
Group re hiring of a consultant to head the advertising > 
section for the SS. 

c. Rodriguez monitoring the selection of the new director 
of the Bi-lingual program at OE. 

d. Ed Aponte, the #2 man at the CCOSS will join the Labor - 
Department on Monday as a consultant and will soon 
thereafter become the Regional Manpower Administrator 
for Region L • 



5565 



-5- 



e. Cip Guerra, the proposed #2 guy at OMBE still handing 
on re getting a GS-17 rating. Monitoring this at Commerce. 

f. Submitted Chicane candidates for either the FPC or ICC 
vacancies. 

i9. Conde helped Mrs. Banuelos prepare her speech for LULAC 
gala in Chicago on Saturday. 

30. Conde taped a TV program for a San Francisco television 
station. Discussed his job in the White House and covered 
general Spanish Speaking topics. 

51. Conde submitted allist of Mexican American farm owners and 
a status sheet on the San Antonio manpower training center. 

}2. Conde helped to coordinate press coverage for Carlos Villarreal' 
visit to Dallas which included reception and press conference. 

}3. Conde rewrote Oval Office proposal for National Economic 
Developnnent Association. 

34. Conde helped obtain press credentials for New Jersey Spanish 
language newspaper which wants to cover Vice President 
Agnew's speech in New Jersey on Saturday night. 

35. Conde held reorganizational meetings with Cabinet Committee 
public information staff and assigned new responsibilities. 

36. Conde worked on quote by Mrs-v Banuelos to be used in a 
pamphlet displaying the signing of the national currency. 

37. Conde is putting final touches on final achievement list and 
is working a final media plan to fit the coming months. 

38. Met with Ray Maduro of the Selective Service System re 
super-grade positions for minorities. Would be an excellent 
opportunity to do this. 

cc: Ray Hanzlik , \ 

t-<lex Armendariz > . 

Carlos Conde 
Henry Rannirez 

Tony Rodriguez ' 

Tom Korologos 



MKMOKAMM'M 



5566 
Exhibit No. 262-14 

Tiir. winTF. iiorsF. . 

ADMINISTRATIVE - CONFIDENTIAL 



MEMORANDUM FOR: 

FROM: 
SUBJECT: 



April 28, 1972 



CHUCK COLSON ._ 

FRED MALEK 

BIlJi..(MO) MARUMOTO 

Weekly Report for Spanish Spea 
Week of April 24-28, 1972 



The following action took place this week: 

I ,_ ■ "" 

1. Submitted on Monday, schedule proposals for the months of 
May through November, for the President and members of 

■ the First Family. Input on this was coordinated by 
Tony McDonald. He's been assisting us when he^s not busy 
with Bill Rhatican or Don Johnson. ■ — 

2. A number of us, Henry Ramirez, Alex Armendariz;, Carlos 
Conde, etc. and myself, have each spent some time with the 
publishers and editors of La Luz, a Mexican American version 
of Life Magazine that is just getting off the ground. They need | 
assistance in obtaining national advertisers which we've given 
them leads. Of equally importance, we got them committed 

to writing at least one feature per month on the Nixon 
. Administration. 

3. Ramirez and I are working very closely with Under Secretary 
Silberman re a $2 million manpower grant for veterans to the 
American GI Forum. There are soine problems on the grant 

and we are working out the best possible solution for all concerned. 



5567 



4. Rodriguez and I met with Al Solano of Assistant Secretary- 
Pat Hitt's stafr at HEW re their grants to SS groups. He 
appears to'liavc final sign-off authority and want him 
tracking with us. 

5. Rodriguez, Dan Todd'and I arc working on a $2 million plus 
HUD project in East Los Angeles that is having some problems. 
We. will be meeting with Under Secretary Van Dusen on 

Monday on this matter. 

6. ■ Ramirez and 1 have met individually with Al Villalobos, the 

Executive Director of NEDA, re mutually assisting each 
other. Up to now, he has been the chief trouble-maker from 
tliat organization to everyone here. 

7. Lunched with Carlos Villarreal yesterday to discuss his 
speaking schedule for the ensuing inonths and other SS matters. 

8. Rodriguez and I met yesterday with Pete Villa, national -- 
president of LU LAC and Richard Zazueta re the Labor 

$2 million manpower grant. 

9. Conde, McDonald and I worked on the Bi-lingual Drop- In in 
Santa Ana, California involving Julie on Wednesday, May 3rd. 

10. We have developed the master plan for the SS Speaker's Bureau 
and it is now being reviewed by Alex Armendariz at 1701. 

I 

11. Rodriguez is working with Ben Fernandez on a master list of 
his fund raising activities so we can plug in our speakers. 

12. Rodriguez coordinated a meeting between the Black appointees 
executive committee and our group, headed by Phil Sanchez. 

The request came from Assistant Secretary Samuel Jackson, HUD. 

13. Rodriguez is working with Pat O'Donnell to get a Cabinet level 
.- ■- speaker for the California State LULAC convention on May 27. 

14. At their request, Rodriguez will be meeting with the Mexican 
.Anierican Advisory Committee of the Republican Party of Texas 
this Saturday, April 29. They arc asking for "some direction as 
they are highly disorganized. This has been cleared through 
Senator Tower's Office. 



5568 



-3- 



15. Rodriguez coordinated wilh the California Re-election 
Commiltee for t)ic President (SS section) the appearance of 
Mrs. Banuclos on tlic l6tli of May on a school and hospital 
tour, plus activities with Mexican American Republican women 
in Riverside and San Bernardino areas. 

16. Rodrigviez is working with Lee Pierson at the Office of Education 
to lielp locate funds for Mexican American scholarships for the 
Youth Opportunities Foundation which is headed by one of our 
guys. 

17. Rodriguez is obtaining names of our supportive people for 
funding and grants from our three Mexican American regional 
directors in San Francisco. , 

18. The following action took place in the personnel area: 

a. Interviewed two prospects for Armendariz for 

his staff. .. _ _ 

b. Rodriguez and I met with Sam Singletary, Assistant 
Director of Minority Affairs for ACTION and 

Art Palacio also of ACTION re hiring more minorities. 

c. Rodriguez and I met with Ray Maduro of the Selective 
Service Systenn re hiring of more minorities. 

d. Rodriguez worked with GSA in finding a Regional 
Director for OEO for their Chicago office. Carlos 
Ruiz has been selected for this position. 

e. Rodriguez developed candidates for a GS-16 slot at the 
Office of Education. The position is Assistant to % 
Dwayne Mattheis, Deputy Commissioner for School 
Systems. 

• /. Rdorigucz developed new candidates for the Deputy 

Regional Manpower slot in Dallas - working with Dave 
' Wimer on this one. . ' ^ 



5569 



g. Uoclriiiuuis is woriiing witn Bill Oldakcr in developing 
candidates /or their ten new supergradc slots at EEOC. 

h. Rodrigue;^ developed candidates for the Deputy to the 
Director of the President's l6-Point Program at the 
Civil Service Coinmission. He is working with Gene 
Costales on Ihis.- 

15. Conde spoke to John Horton of RNC's "Monday" on the feeding 
gf Spanish Speaking issues generated by the opposition which 
they can help answer. He sees them in his weekly review of 
news clips but it is difficult to respond to'them because of the 
political implications but "Monday" can do it very well. 

16. Conde met with E. B. Duarte of Southwest Council of La Raza. 
He will write a story for their publication on OEO director 
Phil Sanchez, 

17. Conde participated in a meeting in Ken Clawson's office with 
Ray Hanzlik and OMB officials to discuss media plan for _ 
announcement in early June of more than 40 million dollars 
earmarked for Spanish Speaking projects in six key regional 
areas. His office will produce a fact sheet on the regional 
council concept and also asaist in the preparation of statistical 
data. They will coordinate the media plan to announce the 

$40 million. 

18'. Conde is working with Department of Labor's minority PIO 

Don Smythe on a mir.ority inodia scininar on June 7 sponsored 
by the Labor Department. He and Stan Scott will participate. 
There will be four Spanish Speaking media reporters and they'll 
arrange a briefing on the President's Spanish Speaking record 
in the afternoon. 

19. For the past two weeks Conde has been spending considerable 
time v/ith the Cabinet Committee's public information section 
putting a reorganization plan into effect and helping impleir>cnt 
some projects that came from the reorganization. 

20. Diana Lozano has been assisting Conde in preparing the final 
Administration achievement list. All materials have been 
collected and checked and the revisions are now being typed. 



24-650 O - 74 - 20 



5570 



■5- 



21. Conde is also preparing an updated media plan /or the Spanish 
Speaking tliat tells wliat has been done to date, how it is being 
done and what is being proposed /or the coming months. 

22. We provided Julie Eisonliower at her request (via Dave 
Parker's of/ice) a copy o/ the Administration's achievement 
list. Since it was in the completion stage, wo provided & 
dra/t copy with penciled corrections and insertions. We will 
provide a /inal copy to her on Monday. 



cc: 5ay Hanzlik 

■'''Alex Arnicndariz 
". Carlos Conde 
Henry Ramirez 
Tony Rodriguez" 
Tony McDonald 
Tom Korologos 



5571 



Exhibit No. 262-15 



VIEMOKANUUM 






THE WHITE HOUSE ' 
ADMINISTRATIVE- CONFIDENTIAL 



May 5, 1972 



MEMORANDUM FOR: 

FROM: 
SUBJECT: 



CHUCK COLSON 

FRED MALEK 

BILL (Md^MARUMOTO 

Weekly Activity Report for the 
Spanish Speaking 
Week -of J^Uy-a-5r-l9 72 



The following action took place this week: 



C 



1. Alex Armendariz and I met with Under Secretary Dick Van Dusen 
at HUD re a $2 million plus Chicano project for East Los Angeles. 
It appears that HUD will be able to resolve some problems they 
were having on this project very shortly. 

2. Armendariz and I met with Manolo Reyes, the Latin American 
News Editor of WTVJ in Miami. He is a well-respected news 
man in tne Cuban community cnat we were stroking. 

3. Our "team" developed recommendations of SS guests for 
President Echeverria of Mexico 's State Dinner and submitted 
to you yesterday. , 

4. Armendariz gave an excellent briefing on the SS portion of 
•the campaign plans at the SS appointees meeting last Tuesday. 

Ramirez covered the NLRB-Farm Workers situation and we also 
discussed recent SS appointments, speakers bureai and grants. 

5. Discussed with Tom Korologos a May 16th Mexican American 
Parliamentarian Oval Office meeting and suggested Henry Ramirez 
be included in a meaningful way. 



5572 



-2-" 



6. Worked with Ben Fernandez, Chairman of the National Hispanic « 
Finance Committee re prospective donors and activities. 

7. In the grants area, the following transpired: 

a. Department of Labor: 

1 (1) Rodriguez working out arrangements re the 

announcement of a $6. 5 million Yellow Bus 
grant in seven cities in Texas. Suggested 
Ramirez and Senator Tower jointly announce 
it in Texas. 

(2) Ramirez and I are working out arrangements for 
a $2 million manpower grant for SS veterans which 
also includes a Puerto Rican veterans group in 
New York City. 

b. Department of Transportation: working with UMTA re 

a $70, 000 grant to J. A. Reyes Associates of Washington, D. C. 
He is the Chairman of the D7 C. , Maryland aiid~Virginia section 
of the National Hispanic Finance Committee. 

c. OEO: working with the Region DC Regional Director re a 
grant for Evaluation, Audits and Systems in Education (EASE) 
of Los Angeles. 

8. Rodriguez working with Fred LaRue re a Chicano owned and 
managed bank in San Antonio, Texas. 

9. Rodriguez con-ipleted the plans for the Spanish Speaking Speaker's 
Bureau for 1701. . 

10. Rodriguez coordinating speaking arrangements for: 

a.~--Ed Nixon appearance for Dr. Antonio Machado's 
testimonial in Miami, Florida on May 13. 

b. Romana Banuelos' appearances in Los Angeles 

at a bi-lingual school and a Mexican American hospital 
on May I6th and for political appearances on June 2 and 3 
in San Francisco and Orange County. 



5573 



c. Working on a Cabinet-level official for the 

- - - inauguration of the first branch of the University 

of Mexico in the United States which will take place 
in San Antonio. 

11. Rodriguez met with Nick Lugo, Jr. , Director of the 
Commonwealth of Puerto Rico Migrant Division, 
Department of Labor, re relationships between one of 
the New York Puerto Rican groups and The White House 
SS Task Force. 

12. Rodriguez is in the process of developing a list of all SS 
federal employees (grades GS-14 and up) for various uses 
by 1701. 

13. Rodriguez distributed 21 tickets for the Presidential Box 
at the Kennedy Center. 

14. The following occurred in the personnel area: 

a. Rosa Maria Fontanez, a Puerto Rican, to be 
Deputy Director (GS-14) of the President Sixteen 
Point Program at CSC. 

b. Developing some positions at ACTION. 



c. Bringing in two Mexican American Democrats 
from California next week for the Democratic 
vacancy on the ICC. Also interviewed Ed Garcia 
who bombed. 

d. Working on candidates for the Executive Director's 
slot at the Cabinet Conamittee. 

*. Recruiting for Regional Director of EEOC, Dallas, Texas. 

f. Met with a Puerto Rican group last Tuesday re recruiting 
more of them into high-level positions in the Administration, 

g. Conde, Rodriguez and I attended the swearing in of Jorge 
Cordova, General Counsel of ACTION yesterday. 



5574 



-4-* 



h. Met with Louis Nunez, the Deputy Staff Director-designate 
of the U.S. Commission on Civil Rights re various matters, 

15. Armendariz, Rodriguez and I met with Phil Sanchez's PR man 
to discuss his public appearances and to stress the importance 
of properly scheduling him in the key states. 

16. The Administration achievement list has been completed in 
final draft and has been distributed to pertinent people for a 
final review. 

17. Conde has completed an updated Spanish speaking media list. 

It has been made available to the Comnnittee for the Re-£lection 
of the President. 

18. Conde is still holding twice a weckmeetings with the-Cabinet 
Connmittee and is presently working on upgrading the Newsletter 
and plan to install a two-a-month production schedule. 

19. Carlos Villarreal is speaking to the LULAC Convention in 
Austin, Texas. It is an important meeting so Conde has been 
working with his PIO to make sure that the speech is targeted 
correctly and the media is altered. A press conference is 
scheduled. 

20. Conde has been working with Mrs. Banuelos on her trip to 
Arizona for two appearances. At her request, he has agreed 

to accompany her to help her with the press and to then, offer • 
suggestions on how to improve her poise ■with thena. 

21. Conde interviewed Phil Sanchez for a magazine article which 
he is writing for a Southwest Council of La Raza publication. 

22. Conde met with a PIO representative from OMBE to plan a 
Spanish speaking brochure. This is part of the Spanish 
Speaking media plan and it will be done in Spanish and English. 



5575 



-5-' 



23. Conde met with Raul Comensanas, publisher of La Nacio and 
a Cuban community leader in New Jersey. Comensanas wanted 
to brief Conde on the upcoming Cuban demonstration in 
Washington on May 20 to protest Nixon's trip to Moscow. They 
will present a statement at the White House gates to a 
Presidential represerttative--or hope to. There is a possibility 
that Conde will get the statement a week before the event. 

J4. Conde will be in Arizona on Thursday and Friday with 

Mrs. Banuelos and on Saturday at the LULAC Convention with 
Ramirez and Villarreal. ^ 



:c: Ray Hanzlik 
l.«6^rlos Conde 
Alex Armendariz 
Henry Ran-iirez 
Tony Rodriguez 
Tom Korologos — - 
Tony McDonald 



5576 



Exhibit No. 262-16 



MI.MORANDIM 



Tllli WlllTK IlOUSPi 
ADMINISTRATIVE- CONFIDENT iAL 



May 12, 1972 



MEMORANDUM FOR: 

FROM: ^ 
SUBJECT: ' 



CHUCK COLSON 
FRED MALEK 

BILVj'ylO) MARUMOTO 

Weekly Activity Report cf the 
Spanish Speaking 
Week of May 8-12, 1972 



The loUowing action took place this week: 

1. Rodriguez and I met, along with representatives from 
Bob Brown's office and 1701, Under Secretary Lynn and 
John Jenkins, Director of OMBE re funding proposals to 
Spanish Speaking and black groups. This is about the third 
such mefeting we've had to either approve or disapprove funding 
proposals from OMBE. We are generating some new proposals 
from the SS in key states. 

2. Rodriguez and I met with Petq Mirales of OEO who now is 
coordinating all SS grants. 

3. All of our team has been intimately involved in the activities 

re the President's Vietnam speech. We've generated telegranns, 
lefters to the editor, and Armendariz and Conde are putting 
together a major rally in Miami for next week. 

4. Armendariz and I met with Ray Hanzlik and Russ Deane re the 
Brown Caucus proposal to nneet with the President. Details. 
still being worked out." " . ' - — \ 



5577 



5. Armcndariz, Condc, Rodriguez and I met with Lou 

Churclivillc, Phil Sanchez's PR guy re Sanchez's speaking 
platform the next few months and in particular, to properly 
program him in terms of platforms and context. 

). Our group met with Fred Malek today to discuss the SS 
Speakers Bureau. 

J.'- Had Howard Hunt check out Enrique Huertas, President of the 
Cuban Medical Doctors in Exile. (Report attached) 

J. Working with Under Secretary Lynn, Tom Kleppe, Ray Hanzlik 

.and Armendariz re accusations of improprieties against 
., Ben Fernandez, President of the National Hispanic Finance 
Committee, by Congressman Henry B. Gonzales (D-Texas). 
He is also charging two Texas Mexican Americans of the sanne. 
We are convinced after some checking that there is no truth 
to the charges. 

). Working with Hanzlik re Finch's participation in a testimonial 
for Tony Rodriguez in San Antonio next month. 

0. Personnel action: 

a. Rodriguez and I hosted two candidates for thek CC this week. 
One of them Rudy Montejano, a Chicano Democrat from .. 
Santa Ana, California, has been selected for the vacancy 
becoming the first person of SS background to be named to 
a federal regulatory Commission.^ - 



b. -Working with Department of Labor re Ed Aponte and his 

status on his supergrade. 

c. Rodriguez sent resumes of attorneys to Richard Crawford 
at the NLRB. 

d. Rodriguez working with Dave Winner in getting candidates 
(Puerto Rican) for Director of the DOL Women's Program. 

Rodriguez spoke on the Washington, D. C. Radio Program 
Confetti. Talked about the President's activities regarding the 
Spanish Speaking. 



5578 



12. Rodrigxiez is coordinating a meeting with the SS regional 
directors in Dallas to brief them on how they can be of 
assistance in the campaign. 

13. Rodriguez met with Roy Batchelor, Assistant Director of 
Office Operations, OEO, and his staff to discuss how their 
section could help us with different projects at the White House. 

'14. Rodriguez obtained the endorsements of the National Presidents 
of LULAC and the GI Forum, Pete Villa and Joseph Juarez 
respectively, for the President's action in Vietnam this week. 

15. Rodriguez briefed Congressman Barry Goldwater's people on 
SS programs. The redistricting put the Congressman into a 

" large Mexican American area. 

16. Rodriguez met with Carlos Villarreal, Administrator of UMTA, 
to talk a.bout setting aside specific monies for some of our 
Republican SS contractors. 

17. Rodriguez briefed Ed Nixon on his appearance at the testimonial 
for Dr. Antonio Machado this Saturday, Also advised his speech 
writer. 

18. Rodriguez is logistically putting together Henry Ramirez' Texas 
appearances for fund raising purposes during the month of May. 



cc:ti<Riex Armendariz 
Ray Hanzlik 
Tony Rodriguez 
Ca rlos Conde 
Henry Ramirez 
Tom Korologos 
. Tony McDonald 



: 5579 

Exhibit No. 262-17 

lEMORANDUM -. ., Lii:-nllir 



THE WHITE HOUSE 

^ WASHINGTON 

ADMINISTRATIVE- CONFIDENTIAL. 



May 19, 1972 



MEMORANDUM FORs . "' •- CHUCK COLSON 

' , FRED MALEK 



.W«5) 



FROM: * •■ • BILlVilMQ) MARUMOTO 

SUBJECT: > ! Weekly Activity Report for the 

•',.•' ^ ; ' I . Spanish Speaking 

'. V. ■ ! ■ ■■ Week of May 15-19, 1972 

' ■ ■ - ■; ■ . / /' 



The following action took place this week: ' ._ 

1. Tony McDonald and I developed at the request of Gordon 

Strachan A memo :froTrt-«aldema«"to-Sooretary Rogers. re 

President Echeverria's visit in June. Our task force is now 
developing guest lists for the State Dinner, arrival ceremonies, 
and the luncheon to be held by Secretary Rogers. Will be meeting 
with Bus Masbacher's staff ne*>ct week re the Secretary's luncheon. 

2. Assisted Alex Armendariz in arranging the receiving of 
signatures from the Cuban community this afternoon. 

3. Working with Under Secretary Lynn of Commarca, Tom Klapp* 
of SBA arid Ray Hanzlik re accusations of impropriety brought 
against Ben Fernandez while he was president of NEDA by , 
Congressman Henry B.' Gonzales. 

4. McDonald wrote a strong memo from the both of you to the 

, Vice President's staff re his appearance before the American 
CI Forum next month. -;« ' ' . 



5580 



-2- 



5. Five of our Presidential appointees were invited last Tuesday 
to the Oval Office meeting with the Mexican Parliamentarians. 
Conde will use photos of t)iem with the President for publicity 
purposes. 

6. Rodriguez, Ramirez and I met with Ray Romero of OMBE re a 
Spanish Speaking Conference that will address itself to their 
challenges and problems late, summer or early fall. 

7. Pat Sagon of Medill News Service interviewed me at Conde's 
request re the Spanish Speaking. Her chain covers the Texas 
scene. 

8.' Rodriguez and I met with Art McZier, Assistant Administrator 
for Minority Enterprises at SBA re grants and contracts to SS 
organizations. 

9. Met with Carlos Villarreal re miscellaneous nnatters pertaining 
to the SS. 

10. Will be meeting with 20 to 25 Cubans in Miami tomorrow re the 
National Hispanic Finance Comnnittee's fund-raising efforts. 
These are men who are prospects for $1,000 contributions. 

11. The following took place in the personnel area: 

a. Cip Guerra officially accepted the deputy's slot (GS-17) 
at OMBE and will be on board in about three weeks. 

b. Rodriguez and I met with Dan Kingsley and Ray Hanzlik 

re strategy on the Executive Director's slot for the CCOSS. 

c. Working with Kingsley, Ramirez and Rodriguez re the ' 
dismissal of Ed Pena, Director of Compliance at EEOC. 

dt Working with the National Institute of Education re staffing 
needs in the minority area. 

e. Rodriguez developing Puerto Rican candidates for the SS 
/ . coordinator (GS-15) at HUD. 



5581 



• 3- 



• f.' 'Assisting Armendariz re Adolf Echeveste on 

Governor Williams' (Arizona) staff. He wants to 
hire him as one of his field men at 1701. 

g. Rodriguez and I are working with Roger Crampton r« 

SS candidates for Public momberi on tho Administrative 
t. Coincil of the United States. 

h. Rodriguez is recruiting for Puerto Rican candidates for 
, Deputy Regional Director positions in Philadelphia and 
New York for the EPA (GS-16). 

12. Phil Sanchez, Henry Ramirez and Tony Rodriguez met with 
Assistant Secretaries Sam Jackson, Sam Simmons, James 

"Johnson and Norman Houston to open lines of communication 
. between Black and Brown appointed officials. 

13. Briefed members of VA working on a Spanish Speaking Van 
Project to start in July in Austin, Texas. 

14. Rodriguez is coordinating with SER (Joe O'Campo) the speakers, 
tours and guests for their June National Directors meeting 
here in D. C. 

15. Rodriguez met with the Chairman of the Hispanic Baseball 
Association, Osvaldo Vega, from New York (Puerto Rican) 

to help them obtain a grant for $200, OOa for fun^injf-a-proposal 
for graduates of a manpower program. 

16. Rodriguez generated an invitation for a speaker for the GI Forum 
State convention in San Diego on June 23rd. The epeaker wUl be 
Carlos VUlarreal. 

17. Rodriguez met with, the state director of the Spanish Speaking 
Committee for the Re- Election of the President in California, 
Rafael Vega, Sr. , to coordinate special events <pr our super- 
grades in the California area. 

18. Rodriguez is assisting Ultrasystems, Inc. , of L,ong Beach, 
California with a $200, 000 grant from OMBE. This organization 
strongly supports the Administration. ^ 



5582 



-4- 

> ./ . • • ... 

19. Rodriguez is coordinating the appearance of Mrs, Banuelos 
for fund raising affairs in Texas during the month of June. 
We coordinated her appea/ancee for California during the 
month of May. 

20. Rodriguez is assisting a Cuban group in obtaining funding to 
train Latin American Professionals in the English Language. 



cc: Ray Hanzlik 

l»*Uex Armendariz 

Carlos Conde 

r-._ . Henry Ramirez 

.Tony Rodriguez 

Tom Korologos 

. Tony McDonald 



5583 
Exhibit No. 262-19 

MEMORANDUM 

----- THE WHITE HOUSE 

WASMINCTON 

• ADMINISTRATIVE- CONFIDENTIAL 



May 26, 1972 



MEMORANDUM FOR: CHUCK COLSON 

FRED MALEK 

FROM: . . . 

SUBJECT: Weekly Activity Report of the 

/ Spanish Speaking 

Week of May 22-26, 1972 



The following action took place this week: 

1. All of us have been involved to some degree, working on ~ 
President Echeverria's pending visit with the State 
Department and various member s of T he White House-staff. — 

2. Rodriguez and I met with Ray Romero of OMBE re a proposed 
"National SS Conference for the Seventies" scheduled in 
August. We've been working on this for a few months and 
everything appears to be tracking. 

3. The SS Task Force has recommended that the Brown Caucus 
idea of meeting with the President be shelved for the time being, 
A separate nnemo was sent to Chuck this week regarding our 
reasons. 

4. On personnel matters: 

a. Rodriguez and I met with Lou Ramirez who is being 
considered for a supergrade slot at OEO. 

b. Developing Puerto Rican and Cuban candidates for public 
members to an advisory committee for the Bi- Centennial 
Commission. 

\ 



5584 



-2- 



C Working with Clark McGregor's shop re John Buggs' 
confirmation as Staff Director of the U.S. Commission 
on Civil Rights so the deputy (Louis Nunez, a New York 
Puerto Rican) can be appointed. 

d. Rodriguez working on the Regional Director of GSA, 
Region VIII slot; Deputy Regional Manpower Administrator 
for Labor, GS-16; Deputy Regional Director, ACTI ON, 

, Regions I (N. Y. )"and II (Philadelphia). 

J- - 1 

e. Working Senator Javits' office re Ed Aponte, the 
• new Regional Manpower Administrator for Region II 

(Labor-New York) and his GS level. 

f. Continuing to work with Departnnent of Commerce re the 
Deputy Director of OMBE. 

g. Rodriguez submitted candidates for the SS Director of HUD. 

h. Rodriguez submitted names for the Deputy Director of the 
Women's Division at DOL. 

V. Rodriguez reworking the regional director of Action 
position in New York. 

5. In the grants area: 

a. Working. with Under Secretary Silberman at Labor re a 
$2 million trucking drivers school in Texas for Chicanos. 
Looks very good. 

b. Expressed concern to GEO re a $3 million grant tn the - 
Mexican Annerican Unity Council only to find there are 
some legal hang-ups to try to cut them off. They promised 
to at least monitor the group. 

c? ^Working with ACTION re Foster Grandparents in California. 

d. Working with Under Secretary Van Dusen re a housing 

project in Arizona sponsored by a California Chicane firm. 

\ 



5585 



6. Rodriguez met with Edward Hidalgo, newest of the supergrades, 
to discuss how he can participate in the speakers bureau and 
through his speeches show how^USIA would benefit the Spanish 
Speaking community of this country. . 

7. Rodriguez briefed Anna Maria Riojas of Senator Dole's 
Kansas staff on our speakers bureau. They have agreed to 
keep us informed of their activities in that area. 

8. Rodriguez met with the Chairman of the Republican Minorities 
Committee from Ventura, California, Ralph DeLeon, and dis- 
cussed how we could help some of his supporters organize and 
obtain government funds for a regional agricultural develop- 
ment committee in that area. 

9. Rodriguez met with the Rockefeller Spanish Speaking leadership, 
Manny Gonzalez, Nick Lugo, Jr. and group in New York and 
covered several areas of interest to them, i. e. , Executive 
Director of the CCOSSP, National Hispanic Finance Committee, 
their role in the campaign, etc. The objective was to open 
lines of communications between our office and their group. 

10. Rodriguez met and discussed with Alex Armendariz the funding 
of a conference for' the Southwest Council of Laraza. Our job 
is to find those monies. 

11. Rodriguez met with Senator Tower's patronage man. Bill Keener, 
and exchanged ideas of how our office could be of assistance to 
them. 

12. Rodriguez met with the Assistant to the Speaker of the House of 
Puerto Rico, Otto Riefkohl, to discuss how we could assist 
them in the area of patronage. They will be sending us additional 
resumes of qual ified people from the island. 

13. Rodriguez is working with Dave Wimer, DDL, to see that one of 
our groups gets close consideration for a grant under the 
national migrant workers progrann.- The group is CPI from Texas. 



24-650 O - 74 - 21 



5586 



14. Rodriguez finalized with Sam Martinez the arrangements for 
our meeting in Dallas on June 2. Will be meeting with the 
Spanish Speaking regional directors of that region to brief them 
on how they can be of assistance in the campaign. 

15. Rodriguez started working with Tony McDonald on writing the 
schedule proposals for the Vice President's office from here 
to the election. 

16. Conde traveled to Houston with Armendariz to meet with an ^ 

influential Mexican American democrat who is thinking of 

supporting the President in November. Alex is to continue 

the discussions with hin:i and work out the scenario if he 
comes aboard. 

17. Two contract signing ceremonies on SBA-8A minority contracts 
were held in Bob Finch's offices. Two Mexican Americans fronn 
California were present to pose for pictures. SBA sent out the 
pictures and news releases to general and nainority media. 

18. Conde is working with Nancy Lamberding of State Department 
on a reception for the Mexican newsmen that will accompany 
the President. Klein, Ziegler and McCloskey will host. 

The date has been tentatively set for June 13. 

19. Conde working with Don Smythe of Labor on the minority media 
seminar to be sponsored by Labor on June 7. Four of the 
participants are Spanish Speaking newsmen and Conde is setti-'g 
up a briefing on Administration accomplishments. 

20. Cond met with Mutual Broadcasting representatives to discuss their 
new Spanish Speaking radio network. They have signed up about 

25 Spanish language stations in predominantly SS centers across 
the nation. Conde will feed them all news that breaks from his 
office. He also did a newscast in Spanish with Mutual on President 
Nixon's trip to Moscow and his efforts on behalf of the SS. 

21. Conde discussed advance stories with Washington correspondent 
of Excelsior , one of the top newspapers in Mexico City. They 

^ will start doing advance stories on June 1 and need information 

on possible topics of discussions by the President. He is trying to 
set up a meeting with Bob Finch and the Excelsior correspondent. 



5587 



22. Conde and Diana Lozano worked on several projects with 
1701. One included reviewing a brochure produced for the 
California primary and developing a three page mailer for 
California. He is also working on a plan involving his office, 
the Cabinet Committee's PIO section and Armendariz' s office 
to make the operations nnore effective and give Armendariz 
more support. 

23. Conde worked with Mrs. Banuelos on her speaking activities. 
She still needs some speechwriting help and Conde suggested 
that she hire a speechwriter to do a six- speech bank on general 
topics that she speaks on. He is also setting up a meeting with 
Treasury's new PIO to see if we can resolve her problems. 
Conde worked on a similar assignment with Carlos Villarreal, 
Villarreal, in his estimation, is developing as one of the 
President's top surrogafes and he is getting good press wherever 
he goes. One of the reasons is that he is a fresh face and he 
speaks forcefully and eloquently ;' 7 — 



cc: Ray Hanzlik 
Carlos Conde 
\,yrtex Armendariz 
Tony Rodriguez 
Henry Ramirez 
Tonn Korologos 
Tony McDonald 



MEMORANDUM 



CONFIDENTIAL 



5588 



Exhibit No. 262-21 



THE WHITE HOUSE 

WASHINGTON 



June 2, 1972 



MEMORANDUM FOR: 

FROM: 
SUBJECT: 



CHUCK COLSON 
FRED MALEK 



iIL\Xi\?< 



,10) MARUMOTO 

Weekly Activity Report of the 

Spanish Speaking 

Week of May 29-June 2, 1972 



The following action took place this week; 

1. Met with Ray Hanzlik, Henry Ramirez and Dave Wimer 
and Jim Robinson of OMB to discuss the status of Regional 
Councils. In sum, it was decided to give some additional 
thoughts on how to handle the $40 million grants program 
announcement and what we're going to do on a long range 
basis with this regional concept. 

2. Discussed with the White House Task Force on SS, the pros 
and cons of the use of a Spotmaster. It was decided the 
Cabinet Committee would obtain one immediately. 

3. Rodriguez and I met with Jim. Robinson of OMB re some 
management problems at the Cabinet Committee. 

4. Conde, Rodriguez and I cor.tinuing to work on various aspects 
of President Echeverria's visit this month. 

5. Continuing to work on the following vacancies: 

a. Developing a case re Ed Pena, Director of Compliance 
at EEOC (GS-17) who has been violating the Hatch Act. 

b. Working with Senator Javits' office and Henry Ramirez re 
the Executive Director's slx>t at the Cabinet Connmittee. 



5589 



c. Regional Manpower Administrator-Dallas: working with 
Rob Davison of Kingsley's staff re both the top and number 
two slots. 

d. Deputy Director-OMBE: This should be finalized by the 
first of next week. 

e. Rodriguez is working with Jack Bow, ACTION, in getting 
candidates for Regional Director's positions in Puerto Rico 
and New York. 

6. Speaking at a testimonial for Hector G. Godinez, Postmaster 

, of Santa Ana, California, my hometown, at the Disneyland Hotel 
tonight and will be an honored guest at a reception in Miami 
sponsored by the National Hispanic Finance Connmittee tomorrow 
night. _ 

7. Found out decision for a doctorate for Phil Sanchez from the 
California State Colleges will be delayed until next month. 

8. Working on the following grants: 

a. OEO - a small grant for ElASE of Orange County, California. 

b. Rodriguez is assisting a Cuban group obtain its bank 
charter. Working through Fred LaRue. The importance 
in this is that this is the first bank owned, managed and 
controlled by Cubans. 

c. Rodriguez is working to get $75,000 for a national 
conference for the Raza Unida. This decision was reviewed 
very carefully by Alex and me. 

d. ~ Rodriguez is assisting Gran Logia de Cuba obtain a grant 

of $35, 000 frooi Fred Romero. The group is one of ours and 
it appears we can help. 

9. Rodriguez set up invitations for people to be principal speakers 
at California's State Conventions of LULAC and GI Forum. 



5590 



10. Rodriguez is setting up meeting between past and present 
national president of LULAC and some top Texas Democrat 
leaders who want to assist in the campaign. 

11. Rodriguez arranged to have Juan del Castillo to be keynote 
speaker at the City of Hope Banquet. Mr. del Castillo is our 
highest official at DOA. 

12. Rodriguez is working with Dr. Aguirre to coordinate the 
meeting between the Manpower Ad Hoc Committee and the 
Secretary of Labor. Situation needs attention as the community 
people feel their requests are not receiving sufficient 

cons ide ration. 

13. At the invitation of Carlos Villarreal, F.odriguez attended a 
DOT ceremony in which he inspected some buses from 
Mexico. 

14. Rodriguez is working with Alex Armendariz to see if Bishop 
Patrick Flores from San Antonio can be asked to give the 
Invocation at the National Convention. He has already been 
asked by the Dennocrats. 

15. Rodriguez is working on having Secretary Hodgson be the 
guest speaker at the National GI Forum Convention here in 
Washington, D. C. on July 28th. Very important because they 
first asked the President and were turned down. 

16. Rodriguez is arranging to get Nixon to appear at the annual 
banquet of the Hispanic International Research Institute in 
New York on the 21st of this month. They expect 1500 people. 
1,000 tickets have already been sold @$50 a plate. 

"17. Conde reviewed a 1701 draft reply on Administration policy 
concerning the political status of Puerto Rico. Done at the 
request of Ed Harper's office. 

18. The Spanish Speaking division of the Committee for the 
Re-Electlon of the President requires more communications " 
support than it is receiving, particularly in production writing. 
It is putting a lot of strain on manpower capabilities so Conde 
wrote a manpower media plan to nneet the needs of this cffice, 
the Cabinet Committee and 1701. 

19. Conde helped me prepare a portion of a speech in Spanish to be 
used in Miami and California. 



5591 



20. Diana Lozano and Conde assisted Alex Armendariz in writing 
the draft Spanish Speaking agenda for the Republican Convention. 
It included the platform and the publicity plans. The three then 
met to refine some of the publicity plans. 

21. Conde met with Henry Ramirez and Pete Patino of the Cabinet 
Committee to discuss his communications department and a 
revamping in personnel in order to give better support to Alex 
at 1701. 

22. Stan Scott and Conde met with Don Smythe and John Leslie of 
the Department of l^bor on the final plans of an information 
seminar for the minority press. It will be held June 7 and will 
include five editors of SS newspapers from Texas, California 
and New York. In the afternoon, a briefing session by Ramirez 
for these editors is also being planned. This seminar developed 
from the minority information progran-i which was developed by 
the White House's Office of Communications. 

23. Conde wrote the SS portion of the convention booklet for 
Stan Anderson's office. 

24. Conde met with Eugene Marin of Phoenix at the request of 
Alex Armendariz. Marin nnight work for the campaign in the 
Southwest and he wanted to discuss some of the SS issues that 
will develop. 

25. Conde was contacted by-fCichard de Sii-^^Tptthe Southern 
California Contractoivs on an appeajiwt^e by Secretary Romney, 
Herb Klein and Phil SancTr ez a r"ahousing development ceremony. 
Conde told him it would be difficult to get all three but would 
work on Ronnney since they have already made contact with hinn. 

26. Conde is working with Mrs. Mercedes Meyer of Winchester, 
Massachusetts on a White House cerennony involving Secretary 
Volpe and Henry Ramirez and diplonnatic dignitaries from 
Venezuela. Volpe, a friend of Mrs. Meyer, and Ramirez will 
accept, on behalf of the President, two volumes of the writings 
of Simon Bolivar from the Sociedad Bolivariana de Venezuela. 
The Sociedad is a well-known and respected organization In 
Venezuela and has affiliations throughout the world. Billed as 
a good will gesture. Scheduled for June 2l3t at 10:30 a. nn. in 
White House library. 



5592 



27. Conde participated in a ceremony at ACTION installing 
Manuel Villalobos as Peace Corps country director for 
Columbia. Voice of America, Associated Press, Dallas 
Morning News and Mutual Broadcasting were among the 
representatives. Picture and press release mailed to the 
national media. 



: Ray Hanzlik 
^<^lex Armendariz- 
Carlos Conde 
Henry Ramirez 
Tony Rodriguez 
Tom Korologos 
Tony McDonald 
Dan Kingsley '. 

Stan Anderson 
Rob Davison. 



5593 



Exhibit No. 262-22 






MEMORANDUM FOB: 

FROM: 

bUBJECT: 



June 5, 1972 

CARLOS CONDE 

FRED M.'XLEK 

Spaoiah Speaking Task Force 
Media Team 



Your May Slst memo on the above subject raised some excellent points, but 
I anri not in full agreement with all of your conclusions. 

I feel that the Spanish Speaking Team is doing an outstanding job in the cona- 
munications and PR area, and you are to be congratulated for the progress 
made. This is due primarily to the quality of the individuals involved, but 
it in also attributable to the fact that the Spanish Speaking T'.am is generously 
staffed - more so than any other group. V/ith Messrs. Maruttroto, Rodriguez, 
and Conde engaged primarily full time, and with strong support from Henry 
Ramirez and the Cabinet Committee, you have a considerable amount of 
talent available. 

Because the Spanish Speaking Team is more generously staffed than any of 
the other groups, I am not terribly receptive to your recommendations for 
additions. To take the specific points: 

1. Cardenas seems well qualified, but 1 am against detailing 
another person to the White House. If you are in dire need of 
help and can make this case to Mr. Klein, we can have Cardenas 
spend a good percentage of his time on the project but do so from 
his current offices rather than being detailed to the White House. 

2. If Alex wants to add a research person to his staff, he will 
have to make the case to me. Basically, I question the long-term 
need in view of the fact that we have centralized research and ad- 
vertising at the Committee and because a Spanish Speaking con- 
sulkint is being added to the advertising group. If, however, Alex 
can still dennonstrate the need for Miss Lozano's help, we can 
arrange for her to remain at the Cabinet Committee but spend 
part of her time supporting our activities. 



5594 



3. If you feel the Cabinet Committee public information office 
needs to be strengthened, I would defer to your judgment, I, 
therefore, recommend you work with Henry Ramirez to get 
Mr. Duarte on board. If Henry agrees, you should have no 
problem. 

4. I agree that it is important to have some Spanish Speaking 
expertise connected with the November Group. In this regard, 
they are planning to bring on a consultant. You and Alex should 
coordinate closely with Novelli to ensure that the choice meets 
your requir ennents. 

The above points should clarify my thinking on the subject. As you can see, 
I'm against adding further members to the team, but there are certainly ways 
to gain at least part of the added support if you need it. 



Herb Klein 
Chuck Col son 
Henry Ramirez 
Bill Marumoto 
Alex Armendariz 
Tony Rodriguez 



5595 



MEMORANDUM 

THE WHITE HOUSE 



iDKIiNISTKATIVE CONFIDENTIAL 



May 31, 1972 



TO: Herbert G. Klein Bill Marurnoto 

Fred Malek Alex Armendariz 

Chuck Colson Tony Kodriguez 
Henry Ramirez 

FROM: Carlos Conde 

SUBJECT: Spanish Speaking Task Force Media Team 



The campaign to re-elect the President is to present his record and his 
Administration as second to none. The best way to do this is through an 
effective communications plan that highlights his record in all of the public 
sectois. The developnnent of the best possible bi-lingual cqmmvinications 
network is essential to the success of the overall plan. 

The Spanish speaking nnedia plan developed by this office is now underway, but 
it has become increasingly apparent in the past several weeks, however, that 
Tc Spanish speaking division of the Coinnriittee to Re-Elect the President will 
■Buire more support than the plan originally envisioned. While the White House 
Slan is built largely on general media cannpaign, Alex Armendariz' s office 
needs specialized research and production writing for cannpaign materials which 
exceeds available manpower capabilities. The resources of the November Group 
and the Cpdfmittee to Re-Elect's coinmunications office have not proved adequate-- 
or satisf'jiMfcry- -to Arnnendariz because they lack the special expertise and 
exneJSiencc of ethnic writers. 

/Th^Tsituation has forced Armendariz to depend frequently on this office and on 
JWfe Cabinet Committee for staff support. This arrangement has not been effec- 
"tive for two reasons. First, the White House is priinarily involved in directing 
the Spanish speaking communications plan, rather than producing it. Coordina- 
tion responsibilities are severely restricted when it engages in singular production 
projects. Second, the Cabinet Committee's public information office, though 
integrated to the Spanish speaking campaign plan, has not fulfilled its function 
well because its staff requires broader journeyman experience. 

Two alternatives are available to provide Arincndariz's office the comiTiunications 
support it needs and to improve the overall effectiveness of the Spanish speaking 
media plan. 



5596 



The first alternative is to create a special Hispanic communications unit 

in Armcndariz's office geared exclusively to ethnic productions. A minimum 

of three people--a researcher-writer, copy editor and typist- -would be needed. 

The other alternative is to revamp the existing media structure witliin the 
White House, the Committee to Re-£lect and the Cabinet Committee and 
include a consultant for the November group. The option is favored because 
it requires the hiring of only one additional staff person to strengthen the 
Cabinet Committee, provides proven nnedia experience and follows the integra- 
tion concept of the campaign's media projects. 

The present structure and the details of the suggested revamping follow: 

1. WHITE HOUSE Carlos Conde directs and coordinates tlie production 
of Spanish speaking media activities in the White House and Federal agencies 
with special attention to the Spanish speaking presidential appointees. This 
I office also produces and reviews special materials for Bill Marumoto's office. 
Assisting part time is researcher-writer Diana Lozano of the Cabinet Committee 
who also does special assignments for Chairman Henry Ramirez and Alex 
Armendariz. ' 



Armendariz. 'i J 

/ro^aivil/^TPater coordination to the White He 
h^_pd fjyiws. experience is essential. I reco 



ouse nnedia plan, an assistant with 
mmend Leo Cardenas of the 



i/ /gXip rnfrruiTrtv Relatio ns Service , who is willing to come on White House^etail 



ardenas is a University of Texas graduate and came to the government after 
10 years of experience as a reporter-editor on the San Antonio Express-News. 
Cardenas would help provide greater White House media support to Armendariz' s 
office in addition to helping direct the overall Hispanic news projects in the 
government agencies. 

2. THE COMMITTEE TO RE-ELECT THE PRESIDENT As stated, 
Armendariz' s greatest need is for a researcher-writer on Spanish speaking 
topics. The production of campaign literature is considerably different than 
writing media copy and more time-consuining because it requires meticulous 
message development. Diana Lozano is a highly efficient and capable researcher- 
writer whose services have been requested full-time by Armendariz. She is 
not only knowledgeable on the Hispanic issues but she also has good political 
sense and an ethnic sensitivity, which is another requireinent of Arinendariz' s 
office. Miss Lozano is willing to take a leave of absence from the Cabinet 
Committee to join the Committee to Rc-Elect the President. This move would 
also strengthen the tripartite media activities, since Miss Lozano is familiar 
with the inforinatiDn operations of the tlirce officesand would work in tandem 



with them 



witn tnem. A A ^ 



i,r^s2^^e. lih^ . 



^/-^ 



5597 



3. THE CABINET COMMITTEE ON OPPORTUNITIES FO R THE 
SPANISH SPEAKING 

The Cabinet Coi-nmittee' s public information office suffers not so much from 
inadequate manpower as from insufficient experience. 

Its director is an outstanding idea inan with an excellent knowledge and rapport 
with the Spanish language press in the East. He is also a good writer in Spanish. 
V/hile he is highly motivated and energetic, however, he is young and without 
solid media background. His inexperience gives him a faulty news judgement 
and his youthful impetuousness makes it difficult for him to motivate and direct 
the information staff. Although American edvicated he is of Cuban refugee 
background and his writing proficiency in English is still developing. 



'fo in 



o increase the potential of the Cabinet Committee inforinalion office, it is 
necessary to bring in a new director of public information. That person is 
W. B. Duarte, the current information director of the Washington office of the 
Southwest Council of La Raza. Duarte is a young Mexican American with 
extensive experience in the information field. He knows and understands the 
eds of the Cabinet Committee information office. 



■Eike 



ike Cardenas, Duarte is a veteran all-around newswriter with experience in 
directing an infonnation staff. He has fine news judgennent and knows the 
(essence of topicality and, more important, the nuances of partisan journalism. 
He is willing to take the assignment and is available immediately. The current 
director of information could either be retained with the title of Assistant 
Director or else a new position could be created for him to allow him to concen- 
trate on Spanish language media activities, particularly among Puerto Ricans 
and Cubans in the Eastern seaboard. 

4. THE NOVEMBER GROUP As the advertising arm of the campaign, the 
November group and the Republican National Committee have been producing 
iTiost of the special Spanish speaking materials. It is evident, however, that 
the materials are being produced by non-Spanish speaking writers who lack 
the flair for this specialized audience. Most of the materials reviewed by this 

ffice have required greater insight on the subject matter and a more acute 
t icme development. Although the November Group is planning to hire a Cuban 
f rm to handle its ethnic productions, it is important to note that the Mexican 
A ncricans which form the largest bloc of Hispanic voters require a distinct 
si Ic arid appeal. In deference to this fact, the Cuban advertising firm should 
oL lin a Mexican American consultant to help develop the material. The best 
m^ I for this assignment is Martin Garcia, a young, outstanding political 
thfc rctician from Texas who is currently a Yale University Urban Fellow in 



J/'. 




I 

5598 . 

i 



Cnlifornia. Garcia is an experienced campaigner who helped run the Nixon 
for President campaign in Houston in 19t>8. He also has a keen sense for the 
sub-culture appeals of the Mexican Americans. Garcia is available in mid- 
summer. 

I urge strong consideration of these suggestions, wliich will both increase the 
effectiveness of the campaign's nnedia plan and provide better comniunications 
support to Alex Armendariz's office. They are vital to the developinent of a 
viable information program Ihat projects the President's performance and 
imparts his strong kinship with Hispanos. 



5599 




MEMORANDUM 



Exhibit No. 262-24 



THE WHITE HOUSE 

WASHINOTON 

•ADMINSTRATIVE -CONFIDENTIAL, 



% 



"< 



June 9, 1972 



MEMORANDUM FOR: 

FROM: 
SUBJECT:' 



CHUCK COLSON 
FRED MALEK 



■BILL 



(i4b)\^RU 



MOTO 



Weekly Activity Report for the 
Spanish Speaking 
Week of June 5-9, 1972 



The following action took place this week: 

1. Henry Ramirez and I met with Ed Aguirre, Regional Director, Departmer 
of Labor, Region IX, re miscellaneous matters pertaining to the Spanish 
Speaking in the Southwest. 

2. Tony Rodrigues! and I met with John Evans, Nate Bayer, Paul Jones of 
1701 and Stan Scott re status of OMBE grants for minorities. Very 
disappointed at the lack of responsiveness of OMBE. Need to get them 
off their hind-ends. 

3. Carlos Conde and I met with Bill Greene, the Department of Treasury'*: 
acting public relations guy, regarding Romana Banuelos. Discussed her 
public relations, public appearances, and speeches. 

4. Met with Pete Villa, National President of LULAC re Administration 
involvennent in their national convention June 29 -July 2 in Beaumont, 

. . Texas. All of our Spanish Speaking Presidentials will be main speakers 
' ' at their luncheon and evening banquets, which Rodriguez had already 

been working on. Also discussed a $2 million GEO education grant whicl 
we hope to aruiounce at the convention. He has beer, cooperative in 
assisting us and was delighted to be. invited to the State Dinner for 
.' President Echeverria next week. 

5. Met with Ray Hanzlik regarding miscellaneous matters pertaining to the 
Spanish Speaking. — ■ 



5600 



■ 6, 'Rodriguez and I attended the SER Board of Director's reception last 
night. This is a joint program of LULAC and the GI Forum. 

7. Alex Armendariz, Carlos Conde, Rodriguez and I met with Judge Alfred 
Hernandez of Houston, Texas, re his interest in supporting the President. 
He is a life-long Democrat and national leader, who is very well known 

in the Mexican American community. 

8. Spoke at two National Hispanic Finance Committee fund-raisers over 

the weekend in Orange County, California, and Miami, Florida. - - 

9. Discussed with Conde status of Wliite House Spanish Speaking mailing list. 
We agreed to beef it up. 

10. Armendariz and I discussed developing a paper on amnesty for Mexican 
wetbacks and will have a paperon it next week. Could be a shrewd move. 

11. Rodriguez met with the four Spanish Speaking Regional Directors of 
Region VI, Dallas, of OEO, Action, HUD, and Community Relations Service 
Justice, regarding their role in the ensuing months. 

12. Regarding the Spanish Speaking Speaker's Bureau, Rodriguez is working 
to have a speaker at the Kansas State GI Forum convention; Secretary 
Hodgson to keynote for the GI Forum National Convention on July 28-30; 
and he is meeting individually with each Spanish Speaking Presidential 
appointee on this ma:ter. 

13. Rodriguez is working with Dave Parker's office re Julie doing a visitation 
to a bilingual program in Brownsville, Texas, later this month. Conde 
developed briefing papers for Julie for a VIP White House tour today for 
the wives of LULAC Board of Directors. 

14. Armendariz and I discussed with Fred Malek the importance of the Preside) 

speaking at the LULAC National Convention. Bob Teeter at 1701 
has come up with some data re the Spanish Speaking that substantiates this. 

15. Rodriguez is working with Fred Larue re the application of a Mexican 
American owned and managed Savings and Loan Association in San Antonio 
and a Cuban owned and managed bank in Miami, 

16. /The following occurred in the personnel area: 

a. Arranged with Dan Kingsley to have the announcement of the President's 
appointment of Rudy Montejano to the ICC done next Wednesday in 
conjuction with Echeverria's visit. 



5601 



"b. Continuing to work with Connmerce officials re appointnnent of 
Cip Guerra as Deputy Director of OMBE. 

c. Working with Senator Javits office re appointment of Frank Negron 
as Executive Director of the CCOSSP. 

d. Armendariz to hire Diana Lozano as his Administrative Assistant- 
researcher-writer at 1701. 

e. Rodriguez and I are developing candidates for Spanish Speaking field 
directors and Spanish Speaking co-chairmen of state and county 
organizations for Armendariz. 

f. Rodriguez is working with Al Solano and Gil Chavez at HEW - 

re generating Spanish Speaking candidates for their Fe flows program. 

g. Rodriguez is developing candidates (Puerto Rican) for the Bi-Centennial 
Advisory Council. 

h. Developing Spanish Speaking candidates for the NIE Advisory Council. 

17. In the grants area, the following transpired: 

a. Rodriguez working with two Black/Mexican groups from Texas and 
Washington, D. C. re grants from Labor and OEO. 

b. Rodriguez working with the National Hispanic Manpower Association 
of Washington, D. C. re information on grants. 

c. Rodriguez working to obtain $30, 000 for the Southwest Council of 
LaRaza for a conference next month. This is the group we want to 

■neutralize. 

18. President Echeverria's visit - The attached provides information about 

the various activities we've programmed around his visit. State Department 
says that the New York, San Antonio and Los Angeles itinerary has yet to be 
totally arranged so we're waiting in the wings to schedule some drop-by's. 



24-650 O - 74 - 22 



5602 



19. Conde has been spending most of the week working on the visit 
of President Echeverria on June 15-19. He has worked with 
Fausto Zapata and Manuel Alonso, press secretaries to 
President Echeverria. Also met with Alonso and Zapata several 
times to give assistance to their advance work such as providing 
media representatives for San Antcnio and Los Angeles. 

20. .The list of the Mexican newsmen accompanying the President of 
Mexico was obtained and given to Ken Clawson for clearance. 

21. A reception at the Tayloe House has been arranged for June 14 
at 6:30 to 8 p. m. An invitation list was prepared for the local 
media. Arrangements for the reception were nnade through the 

- State Department and White House. 

22. Conde assisted Ken Clawson in arranging briefing for the Mexican 
media. They want Schultz, Rogers and Kissinger. Thus far, we 
have secured Schultz and Clawson is working on Rogers. Kissinger 
apparently is out. Briefing by Schultz will be at 3 p.m. on June 13th 
in the Executive Briefing Room. 

23. Conde prepared a list of topics and questions for George Schultz. 
These are the possible questions which the Mexican press will ask. 
The information was provided by Zapata. 

24. Conde met with Clawson and protective service to discuss clearance 
and security plan. Clawson assigned Conde to plan a central 
staging area for the reporters. 

25. Conde arranged with superintendent of House Press Gallery to 
provide working space for the Mexican press- -about 35 working press 
and 18 assorted Presidential staff and technicians - to cover 
President Echeverria's jointed address to Congress on June 15th 

at 12:30 p. m. 

26. Stan Scott and Conde participated in a minority media seminar on 
Wednesday. We helped John Leslie and Don Smythe arrange the 
seminar attended by eight newsmen and editors from throughout 
the country. Also attending were PIO officers from throughout the 
government. Discussed how to better reach the minority media. 



5603 



27. Later in the afternoon, Conde arranged a press briefing for the 
SS media at the Cabinet Committee. Ramirez was scheduled to 
brief but, was ill so Conde had to step in. They were provided 
information on the Administration' s^aTchievernenrs; Representa- 
tives from Houston, New York, San Antonio, Corpus Christi, 
Los Angeles and Washington attended. 

28. Conde addressed and participated in a media discussion with 
regional minority correspondents attending a news seminar with 

■ Social and Rehabilitation Service. Talked about the Administration': 
efforts to provide nnore information to minority media, 

-29. Conde did a Spanish interview with KUNO Radio Station cf 
Corpus Christi on the Administration's achievements. 

30. Conde developed a schedule proposal for the President to greet 
youth group attending OEO leadership seminar. No success on 
the proposal. 

31. Diana Lozano and Conde prepared a briefing paper for 
Tricia Nixon Cox, on the SS organizations, LULAC, SER and 
GI Forum. Mrs. Cox greeted the wives when they took a VIP 
tour of the White House on Friday afternoon. OUie Atkins took 
pictures for distribution to the Spanish Speaking media. 

32. Conde is working with John Richardson, Department cf State, 
and Ken Towery, USIA on Colson's request to develop as much 
modia activity as possible for Echeverria's visit. Richardson 

will send his plan to the White House on Monday. Towery is workin; 
on a similar assignment for USIA. Conde is finding difficulty In 
securing film footage, particularly if intended for domestic use. 

33. Conde is working with Mrs. Mercedes Meyer on presentation of 
Bolivar papers to the President. Volpe and Ramirez will accept 
for the President In the White House library. Scouten said we 
couldn't use It unless approved by Haldeman, because it is the 
private quarters of the First Family. Dick Howard of Colson's 
staff said he would shake it loose for us. It is scheduled for 
June 21st at 3 p. m. 



5604 



-6- 



34. Conde prepared a press release for the Hispanic Fundraising 
Committee at the request of Georgina McCormick who is working- 
on the fund raising event in Washington in late June. 

35. Conde talked to OMBE about announcement of Cip Guerra's 
appointment. They were supposed to give him a plan by Thursday 
but did not hear from them. 



cc: Ray Hanzlik 

•i'^Clex Armendariz 
Carlos Conde 
Henry Ramirez 
Tony Rodriguez 
Tom Korologos 
■Tony McDonald 
Dan Kingsley i 

Stan Anderson ' 
Rob Davison 



I 



5605 



ACTIVITIES SCHEDULED AROUND 
PRESIDENT ECHEVERRIA'S VISIT 



Tuesday, June 13 

6:30 p.m. Spanisli Speaking Appointee's Meeting 

Sequoia 



^yednesday, June 14 

6:30 p.m. Dinner with out-of-town Spanish Speaking Leaders 

6:30 p.m. to 8:30 p.m. Reception for Mexican Press hosted by Herb Klein 
and Carlos Conde, Tayler House 

8:00 p. m. ^ Presidential Box at the Kennedy Center witli above gro' 

Thursday, June 15 

8:00 a.m. VIP White House Tour for out-of-town Spanish Speakin] 

Leaders 

10:00 a.m. Arrival Ceremonies for President Echeverria 

Several hundred Spanish Speaking leaders, Presidentia 
and Supergrade appointees have been invited. 

12:00 Noon _ ■' State Department Luncheon ^____ 

About 50 Spanish Speaking leaders and their spouses 
have been invited to this 

2:00 p.m. Presidential Box, Kennedy Center 

The Marquise , 8 tickets, Eisenhower Theater 
A. F. Rodriguez, Host 

6:00 p.m. Reception for Spanish Speaking Leaders sponsored 

by the National Hispanic Finance Committee 
""■^. Madison Hotel 

7:30 p.m. Presidential Box, Kennedy Center 

The Marquise , 6 tickets, Eisefihower Theater 



5606 



. Friday, June 16 
8:00 a. m. 

7:30 p. m. 

8:00 p.m. 

8:30 p. m. 

9:00 p. m.- 

Sunday, June 18- 



Monday, June 19 
12:00 Noon 



Tuesday, June 20 



VIP White House Tour for out-of-town Spanish ! 

Speaking Leaders 

■i 
Presidential Box, Kennedy Center i 

The Marquise, 4 tickets, Eisenhower Theater j 

Presidential Box, Kennedy Center i 

' Mass , 8 tickets - A. F. Rodriguez, Host , 

Presidential Box, Kennedy Center j 

Big Show of 1936 , 12 tickets - William H. Marumoto' 

Reception at Mexican Embassy 

About 20 Spanish Speaking Leaders and their spousej 
have been invited to this 



Mayor's Dinner 
San Antonio, Texas 



Chamber of Commerce Luncheon 

A number of Mexican Americans in Texas are being 
invited to this affair which will accomodate 1800 peop 



Luncheon sponsored by the World Affairs Council 

Reception for President Echeverria 

Governor's Dinner, Los Angeles, California 

A number of our Mexican Americans in Southern 
California are being invited to this 



MEMORANDUM 



5607 



Exhibit No. 262-25 



THE WHITE HOUSE 

WASHINGTON 



June 16, 1972 



MEMORANDUM FOR: 

FROM: 
SUBJECT: 



CHUCK C OLSON 
FRED MALEK 



BILE 



4/^D 



M ARUMOTO 



Weekly Activity Report f 

Spanish Speaking 

Week of June 12-16, 1972 



The following a ction was accomplished this week: 

1. I met with Bill Rhatican regarding his participation in the 
public relations area relative to the Spanish Speaking. Carlos 
Conde and I will nneet with Bill on Monday morning-for break- 
fast to pursue this matter further, 

2. Tony Rodriguez, Nate Bayer, John Evans, Paul Jones of 1701, 
Stan Scott and I met with Under Secretary James Lynn, and 
John Jenkins regarding the status of grant proposals at OMBE. 
It appears we are tracking well on about seven of these in the 

^ SS area with announcements pending within the next month or so. 

3. Alex Armendariz and I met a Richard Lydon who wants to assist 
in the campaign full-time in California and Texas for about 

60 days. Rhatican introduced us. Armendariz to follow through. 

4. We held our monthly SS appointees meeting last Tuesday and 
covered the following items: 

a. Armendariz - status report on the campaign. 

b. Rodriguez - Speakers Bureau and SS appointments. 



5608 



c. Conde - status report on media and Echeverria's visit 

d. Romero - status report on SS Conference of the Seventies 

5. Conde, Armendariz and I were interviewed by Carolyn Elliott 
of the Dallas News regarding a feature article on the 
Administration's efforts in the SS area for the June 25th 
Sunday edition. 

6. Armendariz and I assi sted Ben Fernandez of the National 
Hispanic Finance Committee regarding getting Secretary Romney 
as a speaker for one ojf their fund-raising events next month. 

"7. Relative to President Echeverria's visit we had 125 SS 
appointees and national leaders involved in several of the 
activities surrounding his visit. They included the Slate Dinner 
and after dinner, Arrival Ceremonies, State Department Luncheon, 
Mrs. Agnew's luncheon, and the reception at the Mexican Embassy. 
In addition, a number were involved in VIP White House tours, the 
Presidential Box at the Kennedy Center, White House Mess, 
private dinners and a reception and dinner at the Madison Hotel. 
We also presented to most of them a photo of the First Family, 
gold pens with the President's signature, a copy of "Life of 
Leadership" recently published by 1701, and to others some 
other "special" goodies. Henry Ramirez was requested by 
President Echeverria's staff to submit a dozen or so names of 
Mexican Americans in this country for consideration for a high 
civilian medal to be given during his visit. We brainstormed 
this and came up with a good cross section of names. We were all 
also involved in submitting names for the various activities during 
his visit to Chicago, New York, San Antonio and Los Angeles. 

8. Personnel ' 

a. The nomination of Rudy Montejano of California to the ICC 
was released on Wednesday. We brought him in for 

^"-Echeverria's visit and included him and his v/Lfe in the activities 

b. Submitted a half dozen names of Chicanes for the White House 
Sumnnor Intern program. 



1 



5609 



-3- 



c. Submitted a half dozen names of SS for a special assistant's 
slot for Phil Sanchez. . 

d. Tracking with Carnnen Maynriol &■ one of two deputy 
* directors (GS-15) of the Women's Bureau at DOL. 

e. Working with appropriate parties on Frank Negron as 
\ Executive Director (GS-17) of the CCOSS. 

■ \ 

9. * Grants 

a. Continuing to work on a $2 million DOL grait for a Truck 
Driver's School in Texas. 

b. Continuing to work on a grant for La Causa Comun, a 
Puerto Rican group. 

c. Continuing to work on an OEO grant for EASE, a Chicano 
group fronn California.. 

d. Rodriguez met with Polly Gallando, Cuban, Miami, to help 
obtain grant for Cuban, Mexican American, Puerto Rican 
community agency in Dade County. 

/ 

ei_ Rodriguez met with Abe Tapia, California community leader, 

' who is trying to form the first Mexican American owned life 
Insurance connpany. The seed nnoney for the probability 
study could come from the Department of Labor. 

. i, Rodriguez talked to Senator Thurmond'* AA, Dan Garrison, 
about possibilities of Black/B rown business proposals. This 
is being tried in Bob Brown's shop. " 

g. Rodriguez is assisting Modesto Guerra /rom New Orleans 
in getting a grant from OMBE for an educational project. 

10. Arranged to have Secretary Hodgson be the keynote speaker for 
the National Anr^erican GI Forum Convention, July 28th here in 
Washington. 



5610 



11. Rodriguez and I working with Dave Parker's office re 

Julie Eisenhower's participating in a few SS activities during 
the next two months. 

12. Rodriguez met with Ed Aguirre to work out the details d. the 
forthcoming National Conference of the Southwest Council of 
L/a Raza. 

\ 

13. Rodriguez was interviewed by Mexican television about the 
events of this week's activities on President Echeverria's visit. 

'^■^■■: ■• /' ■ - ■ ■ 



5611 



Exhibit No. 262-27 



June 22. \972 



MEMORANDUM FOR: 

FROM: 
SUBJECT: 



TONY RODRIGUEZ 
W'Xkx ARMKNDARIZ 



BILL (MO) M(\RUMOTO 
Fred Romero 



The attached article on Frc-i's speech in Colorado Springs does 
not show any connection with the President. Although he's' 
"Hatched", it would appear to nie Fred .could work it into his 
speeches. Please discuss this matter with him. 



Attachnnent 

cc: Fred Malek 



5612 

June 28, 1972 

MEMORANDUM FOR: BILL MARUjVOTO 
FROM: A.F. RODRIGUEZ 

SUBJECT: Fred Romero 



In reference to your moino on Fred Romero's speech in Colorado Springs, 
as you requested I have talked to him and he has assured nic that he will 
work into his speeches the President's work for the Spanish Speaking in .' 
his department. ' ■ '- . 



Alex Armcndariz 



MEMORANDUM 



5613 



Exhibit No. 262-28 



THE WHITE HOUSE * 

WASHINGTON 

ADMINISTRATIVE- CONFIDENTIAL 



June 23, 1972 



MEMORAI'^DUM FOR: 

FROM: 
SUBJECT: 



CHUCK COLSON 
FRED MALEK 



BILL 



t|jV9 



MARUMOTO 



Weekly Activity Report /or the 

Spanish Speaking 

Week of June 19-23, 1972 



The following action occurred this week: 

1. Carlo3 Conde and I are working together regarding a follow-up 
report on President Echeverria's visit and will have it to you 
the early part of next week. 

2. Tony Rodriguez is developing the SS Surrogates Plan and will 
meet the July 7th deadline. 

3. Alex Armendariz, Tony Rodriguez and I met with Phil Sanchez's 
PR and Region IX staff re his public appearances particularly in 
California. They will provide some in-put for the Surrogates Plan. 

4. Met with Kathleen Balsdon regarding beefing up the SS portion cf 
the White House mailing list. 

5. Spoke to the Mexican American leadership in Orange County, 
California re the sponsorship of a reception-dinner for Rudy 
Montejano, the recently nominated Commissioner to the ICC 

6. Bob Finch accepted an invitaUon to speak at the July 25th SS 
appointees meeting. Bill Rhatican arranging for the Blair House. 
Fred Malek is requesting John Mitchell to be the August speaker. 



5614 



-2- 



7. Sending the Flag Day Proclamation to about fifty of our 
SS leaders. '■ 

8. Armendariz, Rodriguez, Conde and I are working on various 
aspects of the LULAC National Convention next week. 
Tricia NLxon Cox is tielivering an address on July 1st. Phil 
Sanchez, Henry Ramirez, Carlos Villarreal and Romana 
Banuelos also giving major addresses. 

9. Rodriguez and Conde worked on the National Hispanic Finance ~ 
Committee's Tamalada for tonight sponsored by the Washington, 

D. C. , Virginia and Maryland Committee. They anticipate about 
a thousand of our SS. 

10. The San Antonio Mexican American comnnunity is organizing 

a reception for Tony Rodriguez on July Zlst and anticipate 1000 
people. 

11. Working to hire a project manager through Rob Davison for the 
SS Conference of the Seventies in August. 

12. Rodriguez unplugged through Fred LaRus of 1701 an insurance 

of accounts for the first Mexican owned and operated savings and 
loan in San Antonio, Texas. They will now open on July 15th and 
we are arranging for a speaker. 

13. Grants 

a. Continuing to work through Rob Davison regarding a truck 
driver's school in Dallas. Monies would be funded out of DOL. 

b. Also continuing to work with Davison re a voter registration 
grant out of DOL. for a '-•hicano group in California. 

c. Working with Roy Batchelor at OEO regarding a revenue 
sharing study grant for the City of Santa Fe Springs. This has 

~ been in the hopper for several months. 

d. Rodriguez working with the Southwest Council de La Raza, and 
their national conference. $30,000 obtained several months ago 
from DOL. \ 



5615 



e. Rodriguez working with SEED, a Washington, D. C. Latin 
American group re a $159, 000 grant from OMBE. 

f. Rodriguez working with Nate Bayer of the Dome stTc^Affairs 
Council re identifying SS groups who have applied for federal 
grants at DOL who are unfriendly toward the Administration. 

14. Personnel . 

a. Rodriguez developed for Stan Anderson, Puerto Rican 
candidates for a Special Assistant slot for Phil Sanchez 
at OEO. 

b. Rodriguez developing SS candidates for State Co- Chairman 
for Armendariz. 

c. Rodriguez and I met with Stan Anderson and Rob Davison 
to identify Presidential and supergrade vacancies for SS. 

d. Rodriguez developing Puerto Rican candidates for regional 
director, NLRB for New York. 

e. Recommended to Malek and Dan Kingsley that If a 

U.S. -Mexico Commission is formed following Echeverria's 
visit, Phil Sanchez be recommended to head it up. 

£. Discussed with Malek the Deputy Under Secretary's slot at 
Labor for a Chicano. Tennporarily on a hold pattern. 

g. Wca-king through Stan Anderson, candidates for the vacancy 
on the OEO National Advisory Council. Developing Puerto 
Rican candidates from New York, Illinois and New Jersey as 
well as Chicanos from California, 

15. Rodriguez working with Armendariz on having our SS Presidentials 
and supergrades at the National Republican Convention as guests. 



5616 



-4- 



16. Conde arranged a briefing for about 50 Mexican and U.S. 
newsmen with Secretary of Commerce Pete Peterson in 
EOB Executive Briefing Room. 

17. Conde arranged seating arrangements and passes for visiting 
Mexican newsmen at Congressional Press galleries. 

18. Conde arranged White House reception at Tayloe ^louse for 
visiting Mexican newsmen. Also produced the invitation list 
and other arrangements for reception. 

19. Conde arranged with Mexican Presidential assistants to have 
President Echeverria invite Henry Rannirez to accompany him 
on national tour. 

20. Conde arranged a visit and escorted President Echeverria'a 
son to Library of Congress. 

21. Conde arranged and coordinated a SS media list for participation 
in White House ceremonies for President of Mexico. 

22. Conde arranged filming and audio of Echeverria' s vi it in 
Washington, New York, Chicago, Los Angeles and San Antonio. 



23. Conde arranged a press interview on President Nixon's efforts 
on behalf of the SS with Karen Elliott of Dallas Morning News. 

24. Conde provided material on SS to Ben Wells of New York Times 
for a story that will be printed in the future. 

25. From June 17-21, 1972, Conde traveled with President Echeverria's 
party to New York, Chicago, San Antonio and Los Angeles. He 
coordinated coverage by special crews hired by this office and ob- 
tained film footage and all audio. He also helped Mexican media, 
obtain coverage. 



: Raj- Hanzlik 
t'jClex Armendariz 
Carlos Conde 
Henry Ranairez 
Tony Rodriguez 
Tom Korologos 
Dan KLngsley 
Stan Anderson 
Tony McDonald 
Rob Davison 
Bill Rhatican 



5617 



Exhibit No. 262-30 



MEMORANDUM 



THE WHITE HOUSE 

WASHINGTON 

ADMINISTRATIVE- CONFIDENTIAL 



June 30. 1972 



MEMORANDUM FOR: 

FROM: ^ . ■■•' 

SUBJECT: > 



CHUCK ODLSON 
FRED MALEK 



BIL 



\m 



) MARUMOTO 



Weekly Activity Report of the 

Spanish Speaking 

Week of June 26-30, 1972 



The following action took place this week: ' 

1. Carlos Conde, Tony Rodriguez, Alex Armendariz and I 
attended the National LULAC Convention June 29- July 1 in 
Beaumont, Texas. Tricia Nixon Cox is to speak today and 
three of our SS Presidential appointees (Sanchez, Ramirez 
and Villarreal) will speak at other times during the Convention. 
We had the Convention stacked with our people who did a lot 

of stroking. Ramirez and Rodriguez received special citations 
for their work for the Spanish Speaking. 

2. Conde prepared a fact sheet for Tricia Nixon Cat for possible 
use at LULAC Convention Friday, and assisted Tricia's 
speechwriter in preparing speech. 

3. Conde arranged with Scott Peters and Alex Armendariz of 1701, 
~audio and possibly film strip to be done on Tricia when she 

speaks to LULAC. 

4. Conde called PIO's for the SS Presidential appointees to assure 
that the speeches reflect President Nixon'^a position and that 

it is well asserted. .■..'•' 



24-650 O - 74 - 23 



5618 



-2- 



5. Conde secured copies of Tricia's speech and provided, with a 
12:30 p.m. Friday release, to Dallas Morning News, AP, 
UPI, Houston Post, Houston Chronicle and Mutual Spanish 
network; 

6. Conde secured the complete schedule of convention activities 

at the request of Ray Hanzlik. This was generated late Tuesday 
when possibilities arose that the President might do a drop-in. 

7. Conde provided Tricia's advanceman Jack Packard with a 
Spanish media list for southwestern states. Packard is assisting 
L.ULAC prepare a press release on Tricia's appearance and 

will include her speech. Release will go under LULAC letterhead. 

8. Conde arranged with Signal and State Department to copy White 
House audio taken during Echeverria's visit to Washington and 
tour of New York, Los Angeles, San Antonio and Chicago. 

The Office of the President of Mexico did not tape his messages 
and as a courtesy, we are nnaking the tape's available to them. 
Conde received a call on Monday from Deputy Press Secretary 
Manuel Alonzo that the President was in urgent need^of^Ke tapes 
and made arrangements through American Airlines to ship them 
the first portion on Thursday. 

9. Conde called Treasury's Acting PIO Mr. Greener to check on 
progress in hiring a PIO for Mrs. Banuelos. Greener reports 

no progress and says he has tried in vain to talk to Mrs. Banuelos. 
Conde called Mrs. Banuelos and urged her to meet with hinn. She 
explained that the problem was finding a common time to meet. 
Will push for the meeting early next week, although it seems we are 
no closer to solving this problem than we were several weeks ago 
and Mrs. Banuelos' public affairs continues to suffer. 

10. Conde did a translation for Chuck Colson on McGovern letter to 
Latin News Agency giving his foreign policy views on Latin America. 
He professed recognition to Cuba and made somo interesting comment; 

11. Stan Scott and Conde helped green group of Puerto Rican and Black 
kids from Hunts Point, the Bronx, who toured White House. 
General Chappie James and Henry Ramirez also attended and spoke 
to the kids. White House photographer took pictures and Scott and 
Conde plan to do miailinga. 



5619 



12. Conde met with Henry Ramirez and Pete Patlno of Cabinet 
Committee on public information program. The PIO office 
will be restrengthened by bringing in an outstanding media 
man, E. B. Duarte. .The plan is to greatly accelerate the 
output of CCOSS information in the next few months and to 

produce timely information. This is in keeping with long-range 

plans developed several weeks ago with Ramirez and Patino. 

13. Compiling a list of Democratic SS leaders who would support 
the President. 

14. Ramirez, Conde and I met with Ray Hanzlik, of Finch's office, 
Dave Weinnnan of OMB re publicity for the regional council 
meetings and sonrE of the things resulting from it. 

15. Met with John Bareno and Bill Dominquez of San Diego, California 
who are two key Chicano Republicans offering their assistance 

in the campaign. 

16. Grants 

a. Department of Labor - working with Rob Davison regarding 
the following four grants; truck drivers school training 
program (Texas); English as a Second Language (several 
'states); Migrant Clearing House (California) and Voter 
Registration Project (Southwest states). 

b. Working with Rob Davison regarding the application of a 
proposed Cuban owned and managed bank in Miami, Florida. 

c. Rodriguez conferred with Phil Sanchez in trying to obtain 
year end monies for some of our people in the field. 

d.^Rodriguez talked with Cheo Sandoval from Texas, who is 
receiving a $2 million grant from the Labor Department. 

e. R.odriguez worked with Louis Cardona, Director, National 

Spanish Speaking Management Association, Washington, D. C. ; 
Julie Marquez, Director, United Businessmen of San Antonio, 
San Antonio, Texas; and Clemente Saenz, Director of a non- 
profit Methodist Association, Texas; to give them direction as 
to how they could obtain fui^ds for their organizations. 



5620 



17. Personnel 

a. Cip Guerra of San Antonio, Texas who was offered the 
Deputy Director (GS-17) of OMBE job has turned it down 
this week to become the Assistant City Manager of the 
same city. 

b. Frank Negron, a Puerto Rican from New York appears 
to be on track re the Executive Director's slot at the 
Cabinet Committee 

c. Dr. Charles Leyba cf Los Angeles comes on board on 
a consultant basis July 5th to plan and organize the SS 
Conference of the Seventies. 

d. Working with Rob Davison regarding the RMA-RD slot in 
Dallas and also an EEOC-RD slot in Denver and/or Dallas. 

e. Rodriguez is assisting Alex Armendariz in getting candidates 
for fieldmen, i. e. , Joe DeLeon, Jce Montoya. 

18. Rodriguez met with Francisco Vega, a businessman from 
Michigan, who is trying to gain government support (not funding) 
for a private venture of producing a bilingual film. 

19. Rodriguez made final arrangements for a meeting with Robert 
Ornelas and company and other Texas Democrats in Beaumont, 
Texas, for this weekend. 

20. Rodriguez talked to Manuel ■Giberga and Edgar Buttari to try to 
calna the feud between these two gentlemen in Miami. 

21. Rodriguez working with Annbassador Jova in trying to submit 
nannes for the forthconaing State Department Latin American 
Women's Conference. 

22. Rodriguez arranging for the speakers for the forthcoming national 
convention of the Southwest Council of LaRaza. Phil Sanchez, 
Henry Ramirez and Romana Banuelos will be involved. 

23. Rodriguez is helping the San Diego Republican people in getting 
a Cabinet level speaker for their forthcoming fund- raising dinner 
during the last week of July. 



5621 



24. Rodriguez worked with Larry Kaufman, Carlos Villarreal's 
PIO man, on his speech for the National LtJLAC convention. 

25. Rodriguez met with Gil Chavez, Director, Office for Spanish 
Speaking American Affairs, DHEW, to see how we could be 
of assistance with his organization. 



cc: Ray Hanzlik 

f^Ji^x. Armendariz 

Carlos Conde 
" Toiy Rodriguez 
Henry Ramirez 
Tom Korologos 
Dan Kingsley 
Stan Anderson 
Rob Davison 
Bill Rhatican 



5622 



Exhibit No. 262-31 



CONFIDENTIAL 
VOR EYES ONLY 




U.S. nSPAKTr.TEWT OF COr.nWEKCE 
Scciii! end Economic Statistics Admi 

V.'csl.ingion. D C. 20?33 

Of-flCE Of THE ADMi;'.'iST.RA10R 



July 6, 1972 



MEMORANDUM FOR Mr. Desmond Barker 

Special A.ssittant to the President 



Joseph R. Wright, Jr 
Deputy Administrator 




I, 



A.ttachcd are two draft copies of ^fie upcoming report entitled/"Selc-cted 
Characteristics of Persons and Families of Mexican, Puerto Rican, 
and Other Spanish Origin: March 19VZ. "/This report was originally 
.■scheduled to coine out in late July. 

As I discussed over the phone, the .omparison of Spanish vs. the 
Blapl^E was originally left out of this year's draft report. I have added 
the con".parisons in pencil for your evaluation -- they were in last year 
but we got quite a reaction from both minority races accusing us of 
trying to polarize the minorities. 

Pr eliniinary conclusions from the con-:par; sons include: 

There are 11. 1 percent Elaclt'" and 4.5 percent Spanish in 
the United States. 

The i"nedian age of Blacl;s and Scanish are around the 
same. However, both are seven to eight years younger 
than the median age of the tclal population, v^hich is 
Z8 years. 

17 percent of Spanish faniilies have a female head 
compared to 32 percent of Biacl< fainilies and 12 percent 
of total population fainilics. The average number of 
children for both minorities i-3 higher than the total average. 

The Blacks are better educati;d tlian the Spanish -- however, 
the Spanish niake higher inco-r'.es. In every educational 
category, the Spanish have h'';her median incomes than the 
Blacks but lower than the toiil population. 



(mO' c) 



5623 



CONFIDENTIAL 



FOR EYES ONLY 

A higher percent of Spanish males are in the labor force 
than Black males, and a lower percent of Spanish females 
are in the lahor force than the black females -- partially 
because of the higher income earned by the Spanish male. 
Unemployment is lower for ail age categories of Spanish 
males compared to Black males with the exception of the 
45 to 64 year old category. Black males, however, have 
a higher representation in the white collar jobs than 
Spanish males. 

, Finally, 25. 6 percent of the Spanish population is below 
the low income level compared to 32. 5 percent of the 
Black population. 

If you would look over the tables and give us your reaction as soon as 
possible, we would appreciate it. We can add numbers to the tables 
for the white population if you think this is appropriate -- this was 
done last year. If you have any questions, let me know. The text 
would, of course, be changed if we decide to leave the figures for the 
Blacks in. 



AJso attached are the three draft press releases for the black, incoir^e, 
and low income reports. We will wait for your comments. 

Attachments 
As stated 



MEMORANDUM 



5624 
Exhibit No. 262-32 

THE WHITE HOUSE 

WA?;lllNGTON 

ADMINISTRATIVE- CONFIDENTIAL 



July 7, 19< 



MEMORANDUM FOR: CHUCK COLSON 

FRED MALEK 



^.^^ 



FROM: - BILL (^vTVMARUMOTO 

SUBJECT: Weekly Activity Report of t 

Spanish Speaking 
Week of July 3-7. 1972 



The following action occurred this week: 

1. Tony Rodriguez and I met .vith Louis Nunez the Deputy 

Staff Director-designate re miscellaneous Puerto Rican matters 

Z, Met with Romana Banuelos re the NLRB and their negotiations 
with her company. Referred her to our legal counsel. 

3. Henry Ramirez and I met with Jack Hughes, Deputy 
Commissioner of OE re the Bureau of Higher Education and 
its thrust in the SS area. 

4. Compiled a list of Spanish Speaking "Democrats for the 
President" and submitted it on Wednesday. Continuing to 
add more prominent names. 

5. Discussed various matters with Ben Fernandez, Chairman of 
the National Hispanic Finance Committee 

6. "Replied to Dave Parker re the participation of the President in 

the City of Juarez, Me>dco Centennial Celebration. 



5625 



7. Personnel 

a. Ray HanzUk and I are working on the executive director 
or the C COSSP. Suggesting we put an acting executive 
director in until this fall. 

b. Continuing to work with OMBE re a deputy director. 

c. Rodriguez, Ramirez and I interviewed the prospective 
field men for Alex's shop. Also arranged for part of- 
their travel. 

8. Grants 

a. DOL - working with Rob Davison re the status of the 
$17. 5 million grant to SER and truck driver's training 
school grant to J. A. Reyes and Associates. 

9. Rodriguez finalizing the Spanish Speaking surrogates plan 
for submission. 

10. Rodriguez arranging for a testimonial to be given to Mrs. Banuelos 
in Houston, Texas by a Mexican- American Republican group. 

U, Rodriguez arranging for our surrogates to be main speakers at 
the forthcoming G. I. Forum National convention. 

12. Rodriguez working with Senator Tower's office to see that grant 
announcements are funneled through that office whenever possible. 

13. Working with Ray Romero at OMBE in getting assistance for the 
minority contractors association. Corpus Christi, Texas. 

14. Conde is working with Larry Kaufman on contract signing ceremony 
with Carlos Villarreal and two Mexican American firms. One is 
Joe Reyes, the local consultant. Will try to work Finch into 
ceremony. 

15. Conde worked with Cabinet Committee in bringing E. B. Duarte 
as the new PIO officer. His presence is expected to significantly 
upgaade the quality and quantity of CCOSS news activities. 



5626 



-3- 



16. Conde is working to get more news visibility for MontejanQ 
the Mexican American appointed to Interstate Commerce 
Commission. CCOSS did a press release on Montejano. 
Conde did a news spot for Mutual Spanish network and also 
contacted ICC-PIO to discuss publicity. Will work with them 
on the dissemination and ann also thinking of doing special 
mailing on him. 

17. Conde is working with Gil Pompa on his film "Viva" and still 
looking for suitable format to present it in Washington. It is 
a hone-hour film produced independently in cooperation with 
Community Relations Service of JuTtice. Story line is on 
Mexican American culture and includes Spanish Speaking 
celebrities. 

18. Conde talked to 45 LULAC student interns on the White House 
and the Nixon Administration. Concentrated on the appointinents 
and achievements of President on behalf of the Spanish Speaking. 

19. Conde is working with Mo Garcia of Cabinet Comrnittee on 
television projects involving Presidential appointees. The plan 
is to include one or two Presidential appointees in key Spanish 
Speaking cities in the Southwest and let them face a panel of local 
newsnnen. The format would be the Nixon Administration and 
the Spanish Speaking. Garcia has already set up one with KTLA 
in Los Angeles. Conde will work on San Antonio, Corpus Christi, 
Houston and the Rio Grande Valley. 

20. Conde discussed with Census Bureau the upcoming social and 
economic report on the SS. The report will show that the SS are 
doing better by comparison than the Blacks and the question is 
whether the report should show the comparison. It will have a 
SS-Anglo comparison which is course will show the Whites in a 
dominant position. The representative also talked to Des Barker 
on this. Conde discussed this with Alex Armendariz of 1701 and the 
inclination is not to show SS-Black comparisons. Report is due out 
July 20 and Conde will look over the figures with the Census rep- 
resentative and determine if other than Census media dissemination 
is warranted. 

cc: Ray Hanzlik 

p^ftlex Armendariz 
Carlos Conde 
Henry Ramirez 

Tony Rodriguez ^ 

, Tom Korologos 
' Dan Kingsley Rob Davison 

SUn Anderson Bill Rhatican 



5627 



Exhibit No. 262-34 



v/-/%b' 



Co;7nr^iv?33 



'■^ 



Cl' l':i3 i'i''GciIv,LC:'l li 1701 Pr\T»'5YlVANIA AVEK'UE, N.W., WASHINGTON, D.C. 20006 !202) 333-0920 






July 12, 1972 



-TA 






MEMOR-ANDlC-! for WILLIAl'l >iAJ!U>10T0 

FSOM: ALEX AK'ENDARIZ 

SUBJECT: SELECTED CHARACTERISTICS OF PERSONS AND F.i>iILIES 



OF >EXIC.AK, PliERTO RIC.AN, A„ND OT HER SP.AKISH 
ORIGIN: >1.AF.CH 1972 






Ve have revievjed Hr. Joseph R. Wright, Jr.'s raeno to ^■ir. Besriiond 
Bciker on the subject matter end offer our views on the subject, 
hoping soiTie action can be t£)<en to stop publication for the 
reasons mentioned below. 

One of our severest handicaps during the early stages of the 
campaign is the necessity to counter the poor iir.age given the 
Spanish-speaking corxnunity by various agencies of the United 
States Govemr-.ent itself. The Civil Service Coir.mission 's 
report which engendered such headlines as, "Cnicanos Gieated 
in Public Schools" and "Mexican-Americans Receive Little from 
Public Schools," is a prime example. On several occasions 
ye have disseminated our views on the publication of surveys 
inimical to our efforts. Our position is that any statistical 
c'ata which show the Spanish-Sneaking community lagging behind 
ot her elements of the population will be construed as the 
fault of the incumbent Government . If it is absolutely 
necessary to release such material, it should be coordinated 
with, and preceeded by, announcements of Government prograns 
designed to alleviate the specific poor conditions. Further- 
niore, it would be well to make such presentations reflect the 
Administration's concern and empathy for those members of the 
community involved. Specifically, with reference to the 
attached, we find all but the straight demographic material 
potentially damaging to our current objectives. To bring home 
to a segment of the population one is wooing, facts that look 
either like, (1) their shortcomings as viewed by us, or as 
(2) our failure to help theTn, would not be considered an 
intelligent campaign strategy. Ue , therefore, reco?\mend that 
while publication of the report can do no good, it could do 
considerable harm. It would ar.iount to supplying the Democrats 
with more campaign material. .».s the facts in these studies 



5628 



;-EMOR.ANDlC-I FOR WILLIAM v.ij:L^10T0 
FROM: -"XEX AR.'-END.«ilZ 

JULY 12, 19 72 



are mere upriating of things everyone knew anyivay, -sybe it 
could be held up until efter the election. It is hard to see 
why it should be considered in ^ny-.v-ay vital. 

Another fact v.'hich we have been trying to nake nanifast is that 
Spanish-Speaking .'jr.ericans strongly resent being lur.ped into 
a hetrogeneous category labeled "minority." Spanish-Speaking 
Anericans are proud of their heritage and culture, and 
react adversely whey they are not dealt with singly. For this 
reason and the reason given by yourself vis-a-vis polarization, 
we recorjnend that the two groups be treated singly. 



Dc: Frank Herringer 



I 



5629 



Exhibit No. 262-35 



MEMORANDUM 



THE WHITE HOUSE 

WASHINGTON 

ADMINISTRATrVE- CONFIDENTIAL 



July 14, 1972 



MEMORANDUM FOR: 

FROM: 
SUBJECT: 



CHUCK COLSON 
FRED MALEK 



BI 



O) MARUMOTO 



Weekly Activity Report of the 

Spanish Speaking 

Week of July 10-14, 1972 



The following action took place this week: 
1. • Personnel 

a. Sylvia Garcia of Dallas, Texas interviewed by Henry 
Ramirez, Tony Rodriguez, Carlos Conde, Alex Arnnendariz, 
Frank Herringer and myself for a fieldwoman's slot for 
Alex's staff at 1701. Impressed everyone and very likely 

to be hired. 

b. Tony Rodriguez and I met with Ed Hidalgo of USIA who is 
anxious to assist in the -re-election of the President, and 

, is willing to spend full-time on the campaign. 



Ray Hanzlik and I continuing to work on the Executive 
Director's slot a t CCOSS. - 



Charlie Leyba of Los Angeles to come on board next week 
on a consultant basis to begin planning on the SS conference 
of the Seventies. 

Rodriguez met with the newly -appointed Deputy Director of 
HEW's Office of Spanish Surnamed Americans, Phillip Garcia 
for an orientation session. 



5630 



f. Rodriguez working on the sweaf Lng in of the newly-appointed 

RMA and his deputy, for the Department of Labor in Dallas. 

g. Rodriguez working to obtain jobs for two Cubans from 
Dade County, Florida via Dr. Edgar Buttari, a friend of 
the Administration. 

h. Rodriguez working with Senator Tower's office to get 

Abe Rannirez, a Houston Democrat attorney-cleared politically 
'. for a possible high-level appointment. Ramirez is supportive 
of the President. 

i, Rodriguez also working with Tower's office re L/arry Ramirez 
for the regional director's job with EEOC (GS-16^ 

j. Rodriguez assisting Dr. Bruno Trevino at EEOC regarding a 
promotion. 

k. Rodriguez spoke to Manuel Ruiz, a well-known Los Angeles 
Attorney to serve as a co-chairman for the Committee for 
the Re-Election of the President, representing the SS community. 

1. Rodriguez working with Paul Gomory to determine how many 

SS supergrades are at non-donnestic agencies such as State, ^ 

OAS, Inter-Annerican Bank, etc. | 

m. Working with Wally Johnson and Dan Kingsley re the confirmation 
of Rudy Montejano to the ICC. Appears a few ■weeks away, 

n. Working with the Departnnent of Commerce people re the 
Deputy Director of OMBE (GS-17). 

o. Developed candidates for the Executive Director of the 
Inter-American Bank. 

2. Rodriguez and I a re compiling a master list of SS names for 

The White House mailing list. Contacting our key people in about 
a dozen states to accomplish this. 

\ 



5631 



-3- 



3. Rodriguez working with the Puerto Rican community in 
New York and New Jersey to generate invitations for our 
SS surrogates. 

4. Rodriguez met with Paul Wood, Vice President of Consultants 
International re assistance in forming a training seminar for 
SS businessmen. 

5. Rodriguez spoke to Jose Casanova, State Chairman of the 
National Hispanic Finance Committee for Florida and 

Dr. Arturo Hevia, Chairman of Cuban- Americans for the 
Re- Election of the President for Florida re the running feud 
between Manuel Giberga of Washington, D. C. and Dr. Edgar 
Butarri of Miami. Tony suggested they stop answering charges 
in the newspapers generated by Giverga's man in Miami. 

6. Rodriguez working with Al Cruz of DOL and OUie Olivas of the 
Southwest Council of La Raza re the Council's national _ 
convention in Washington, D. C. next month. 



7. * Rodriguez working with the planning committee of the GI Forum 

re speakers for their national convention July 28-30 in 
Washington, D. C. Secretary Hodgson, Carlos Villarreal, Henry 
Ramirez and Phil Sanchez lined up thus far. 

8. Henry Ramirez and I met with Joe Cosand, Deputy Conamissioner 
of Higher Education at OE re grants in the SS area, 

9. Met with Bill Rhatican re Blair House dinners for our SS leaders 
on September 14 and October IE. Also discussed the SS situation 
from a PR point of view and his role as an advisor. 

10. Spoke to Nick Ruwe of the protocol office at State Department re 
arrangements for the July 25th SS appointees meeting at the 
Blair House. 

11. Contacted Nate Bayer of the Domestic Council re the next 
progress meeting on OMBE grants. 



5632 



• 4- 



12. Armendariz an ^_I_xey.iewed Census material on the SS that is 
to be relea sed soon . Re^^nrnended_s_orne_inforrnation be held 
"ba^k; 



13. Continuing to work on the charter for a Cuban-owned and managed 
bank in Miami. Appeal now being considered by the Comptroller's 
office. 

14. Wrote a memo to the both of you re where I personally feel the 
priorities are in terms of our group's role for the next few oionths. 



cc: Ray HanzUk 
Carlos Conde 
^^lex Armendariz 
Tony Rodriguez 
Henry Ramirez 
Tom Korologos 
Dan Kingsley 
Rob Davison 
Bill Rhatican 



/ 



5633 

r5-- . -July 17. 1972 

Addendum to Weekly Report of July 10-14. 1972 



15. Conde worked with ha. Luz Magazine on a cover story montage 
it is planning for its October issue. It will have the President 
in the center s urrounded by a g roup o f S panish Speaking 
appointees and key Administration officials. A local art man 
is working on the cover. ^ 

16. Three brochures are on the way -- two with the Cabinet 
Committee and one with the Office of Education. OEO is supposed 
to give a production plan by Monday on their b rochure and will 
pursue Commerce and Labor this week. Conde is being careful 
not to flow the market with brochures in August and September 
and also to maintain the in/ormational value of them. Conde met 
with slight problem at OE, mostly bureaucratic, but Des Barker 
pulled him out of that one. 

17. Conde planned the White House ceremony on the swearing in of 
John Buggs as Staff Director of the Civil Rights Commission. Justi' 

- - Thurgood Marshall did the swearing-in. It was w ell— attended by 
.the media and we got s onne good verbage from Buggs. Leonard 
Garment presided. Stan Scott assisted. 

18. We are planning a similar ceremony for Luis Nunex, a Puerto 
Rican who was named Deputy Staff Director. Nunez wanted it 
for next week but we will wait about two weeks before doing it. 
Henry Ramirez will do the swearing in. 

19. Conde wrote the lead story for Cabinet Comn-xittee newsletter on 
visit of President Echeve^ria and produced picture for it. 

20. Conde did a radio show on W RC radio on Nixon Administration 
and the Spanish Speaking and his work at The White House. A lot 
of questions were political centered around Democratic convention 
and upcoming election. Can get a tape of the interview if you want 
to listen to his remarks. 

21. Conde worked on the upgrading and addition of Spanish Speaking 
media list with the Cabinet Comnnittee. This latest list will be 
given to the Re-Election Committee. \ 



24-650 O - 74 - 24 



5634 



-6- 



22. Conde met along with other members of Klein staff , RNC on 
the media plans for the upcoming convention. 

23. Conde is working on a plan to utilize Spanish Speaking radio at 
the convention and from August to November at the Re-Electioa 
Committee. Has a sprospect who will be willing to do the audio 
for us. 

24. Conde worked on the campaign slogan and ^ways to trim it down to 
nnake it snappy. No es solamente que viva la raza pero que cuente 
la raza was reduced to President Nixon hace que cuenta la raza. 
The latter is proposed for bumer stickers. 

25. Conde produced about 700 words on answers to political issues 
involving the Administration for Mrs. Banuelos. She is doing several 
radio shows in Los Angeles and needed assistance on the political 
questions she is sure to be asked. He prepared suggested replies 

to some of the more obvious questions. 

26. Conde is working with Valdez on the upcoming CI Forum 

• convention in Washington. We have some good players speaking 
but the Democrats' heavy guns like Kennedy and Montoya are 
scheduled to speak. Conde is trying to top them by getting the slot 
for the wlndup speech. 



5635 

Exhibit No. 262-36 

administratrve- confidential 

July 19, 1972 

MEMORANDUM FOR: ROB DAVISON 

FROM: BILL (MO) MARUMOTO 

SUBJECT: Development Associates 



Development Associates headed up by Leveo Sanchez, is a Washington- 
based consulting firm that has been funded for $1 to $2 mlUion dollars 
by our Administration. 

Sanchez prior to the formation of this firm was Regional Director o£ 
OEO under Sargent Shriver and prior to that with the Peace Corps 
working for Frank MaNkiewicz (one of McGovern's campaign 
co-chairmen) and Jack Vaughn. 

Most. recently he was awarded a five-year grant for $722, 383 from 
HEW to evaluate an expericnental school program and he also re- 
ceived an 8a SEA contract for over $200,000 to evaluate bi-llngual 
education progranris in the U.S. It also appears he will be obtaining . 
a $30,000 grant from HUD, Region DC relatively soon. In addition, ; 
f^ is presently under consideration atQX)L for a $70,000 granti 

This is a classic example of a firm, not necessarily on our team,':., 
which is making a connfortable living off of us. These are grants 
that we're aware of -which Indicates they may have a few ethers. :■ 

I would recommend if it's not too late, we stop the proposals at '.~ -' 
DOL, and HUD. ,.. :' 



cc: "^uex Armendarix 
Tony Rodriguez 



5636 



Committee 
for the Re-election 
of the President woi pinn».iv«ni« avinui. nw., washinoion, d.c. 30006 uoji 33j.o9jo 



July 2A, 1972, 

CONFIDENTIAL 

MEMORANDUM FOR ROB DAVIDSON 

FROM: ALEX ARMENDARIZ 

SUBJECT: DEVELOPMENT ASSOCIATES 



We have inquired about Development Associates 
and have learned of their close ties with 
the DNC and Cesar Chavez. We fully concur 
with Bill Marumoto's memo of July 19. 



William Marumoto 
Tony Rodriguez 



MK.MORANDL'M 



5637 



Exhibit No. 262-37 



THE WHITE HOUSE 

WASHINGTON 

ADMINISTRATIVE- CONFIDENTIAL 



July 21, 1972 



MEMORANDUM FOR: 

FROM: 
SUBJECT: 



CHUCK COLSON 
FRED MALEK 

BILL (MqVI'GrUMOTO 



Weekly Activity Report of the 

Spanish Speaking 

Week of July 17-21, 1972 



The following action took place this week: 

1. Requested comments from the SS Task Force re The Theme and 
Issue Schedule for Full Committee Hearings and Witness Schedule 
for the Republican Platfornn Committee and forwarded them on to 
Ed Harper. 

2. Met with Dan Kingsley re the Manuel Giberga-Edga r Buttarri 
feud. We are taking positive steps to resolve the situation. 

3. Alex Armendariz, Tcny Rodriguez, Carlos Conde and I are all 
involved in the SS Democrats for the President. Press conference 
with eight representatives from throughout the country will be held 
next Wednesday. Clark McGregor is being asked to introduce the 
group. We will have the only Mexican Annerican councilwoman 
(City of Dallas, Texas) and the young represented. 

4. .Met with Dave Florence, Alex's new fieldman for California re 

orientation session. 



5638 



-2- 



5. Alex, Carlos and I met witli Dill Rhatican re miscellaneous 
PR problems and will continue to meet on a weekly basis. 

6. Carlos and I met with Ken Clawson re responsibilities, etc. in 
the SS area of The White House and 1701. 

7. Checked on Mayor Sam Yorty's credibility with the Mexican 
American community for Dan Kingsley. 

8. Tony checked out Dr. Alex Bravos of Los Angeles for Finch, 

9. Continuing to work with Rob Davison re a Cuban bank charter 
in Miami. 

10. Grants 

a. Following an inquiry from HUD, recommended they award 
a $50, 000 film contract to Nick Reyes & Associates of 
Washington, D. C. over two other SS firms. He has been 
most helpful to Carlos. 

b. Recommended to Rob Davison that he carefully review the 
background of Leveo Sanche* whose firm has been receiving 
a number of grants. 

c. Tony and I met with Art Mc Zier, Assistant Administrator 
for Minority Business Enterprise re SS grants and loans. 

d. Met with Jerome Jaffe of the Special Office of Drug Abuse 
re grants possibilities for the SS connmunity. 

11. Personnel 

a. Keeping in touch with Rudy Monte jano, the recently nominated 
ICC inember re his confirmation by the Senate. This is ex- 

^^pected to occur within a month. 

b. Concurred with Under-Secretary Lynn at Commerce to put 

a non-SS person in as Acting Deputy Director of OMBE while 
a full-scale recruiting effort is made for an SS individual. 

c. Working with Rob Davison to get Larry Ramirez on board as 
the Regional Director (GS-16) of EEOC. 

d. Rodriguez working through Rob Davison in finding candidates 
for Director, of Bilingual Education, HEW. The Acting Directc 

' is AlbtrfPena. 



5639 



e. Rodriguez developing a new list of candidates for the Deputy 
Director slot at OMBE. Also working through Rob Davison 
on this. 

f. Rodriguez developing candidates for Contract Compliance 
Deputy Director, Department of Labor through Rob Davison. 

12. Rodriguez setting up a meeting with HEW's Spanish Speaking caucus 
for next Tuesday to explain our work and to see how we can assist 
them. This group is recognized by the Secretary and they need 
assistance in implementing the l6-Point Program. 

13. Rodriguez worked on and received agreement of four strong 
Democrats to come to Washington to take part in the press con- 
ference in which they will publicly endorse the President. They 
are: Mrs. Anita Martinez, Dallas City Councilv/oman; Santiago 
Grevi, Commissioner, Narcotics Board, N. Y. ; Luis Rios, Merchant 
who was named Puerto Rican of the year, N. Y. : and Benjamin Leon, 
President, Clinical Association, Cubana. 

14. Rodriguez assisting Pete Villa, National President of LULAC in 
obtaining employment as a consultant within government. 

15. R. met Don Dunlap, SEA, to help hinn identify some of the "good 
guys" applying for assistance in his shop. 

16. Rodriguez working with Ed Aguirre and his group in planning Phil 
Sanchez' appearance in California between now and Novennber. 

17. Rodriguez working with Patsy Von Schegel in charge of surrogates 
in California to program Mrs. Banuelos on her appearances in 
California. 

18. Rodriguez met with Manuel Giberga to assure him that Buttari's 
forces were no longer at war with him. hb feels we should find him 
a non-paying spot in State or USIA before the convention. 

19. Rodriguez met with Congressman Lujan, who wants some of his 
key constituents on agency boards and commissions. He will send 
a list so we can forward to Rob Davison. 



5640 



26. Working with White House photo office and designer Dan Lopez 
on pictures of President and SS appointees to be used for cover 
story in October in La Luz magazine of Denver, plan national 
distribution. 

27. Department of Labor manpower magazine has all Spanish edition 
scheduled for September. lam contacting niagazine editors so 

I can review the articles and make sure it gets the required Admin- 
istration emphasis, 

28. Worked with Larry Kaufman, PIO for Carlos Villarreal on fluff 
piece on Villarreal. The final version is a good feature story 
and DOT will mail to SS press with picture as soon as possible. 

29. Am working with Hector Santana of OEO on brochure. Santana j 
knows what we want and is supposed to give me a production schedule, 
next week. 

30. Still working on Mrs. Banuelos PIO. Her candidate was out of the 
city this week. 

Weekly Activity Report: Carlos Conde 

31. Arrange a video and radio screening of Miss Hebe Russo, corres- 
pondent for Mutual Broadcasting Hispanic division. It will be 
valuable for the campaign to produce radio news spots in Spanish 
using a trained professional voice. Miss Russo has these qualities. 

32. Produced a briefing paper on SS topics for John Connally to be used 
on network show on Sunday. Included some of the more pertinent 
facts about the Administration and the SS. 

33. Met with Leo Cardenas of Justice's Community Relations Service. 
Cardencs is a SS journalist with solid media experience. I need 
his assistance to produce nnore White Hcuse mailings. Cardencs 
and his boss, Ben Holman, agreed to let him assist me on a limited 
basis. Worked out the details with Ken Clawson. 

34. Helped arrange the press activities for th6 announcement of SS 
Democrats for Nixon which is being coordinated by Armendariz' 
shop. It will include press and radio dissemination with follow-up 
mailings to the SS media. Am working closely with Mike Venute of ] 
Committee to Re-Elect who is in charge of press arrangerre nts. 



5641 



The following by Carlos Conde: 

20. Met with Alex Armendariz to discuss the media needs of his SS 
division in relation to the White House. Wrote a proposal on the| 
need and the how-to on a newsletter. Because of the political I 
sensitivity Armendariz' shop must begin pursuing an independen: 
media program keyed chiefly on issues. No plan has been estab-: 
lished for this phase and will produce a suggested format for 
Arn-iendariz which we will discuss in Tuesday meeting with Ken 
Claws on. 

21. Had two lengthy meetings with Office of Education information | 
specialists on bi-lingual brochure. They Tiave come up with a | 
very interesting format that gives prominent attention to the 
Administration's role. On Thursday, they brought the prelimin; 
sketches. Need to work out some details on pictorial emphasis. 
Gil Chaves and Albert Pena of OE working closely with me on 
this. I will involve SS task force at next meeting. j 

22. Met with representatives from Federal departments to ask for 
final update on Administration achievement list. Each represen-l 

■ tative will take it back to department for updating from May. Dd 
COB Tuesday. This is the final sign-off and what we will use th(j 
rest of the year. 

23. OMBE, OEO, Labor, Migrant Division OEO, bi-lingual program} 
division and Cabinet Committee and Job Corps are producing i 
briefing papers for my office due Friday, July 28. Met with thef 
this week to tell them what was needed in the briefing papers. F 
to use this for surrogates kits and Administration officials who r 
information on the SS programs and issues. 

24. Am working with Fernando Del Rio, television producer from 
Los Angeles on the production of a SS GI film. Needs Defense De 
nnent to help him defray transportation costs. DOD said no. Ho 
I feel the film will have good effect on SS. The outlay is about $; 

"•Working with Del Rio on another angle involving CCOSS and allov 
Ramirez to make film introduction and for us to have editing par 
cipation. To be distributed in Southwest. 

25. Ajn working with Luis Nunez, Henry Ramirez on swearing in of ; 
as Deputy Staff Director of Civil Rights Connmission. Nunez is 
highest ranking Puerto Rican. Will follow same format use for 
Bugg's swearing in. Scheduled for Roosevelt Room, Monday, Ju 
at 10:30 a. m. 



5642 



-•6- 



35. Wrote first draft statement to be given by Alfred Hernandez at 

SS Democrats for Nixon press conference. The statement is also 
submitted to Colson's office who requested two different statemen; 
to be used by SS Democrats for Nixon. Armendariz advised nne 
that to his knowledge this was not related to his Wednesday press 
conference activities. Doug Hawlett, who sent the memo via 
Marumoto, also did not know the reason for the Kvo statements. 
I submitted the draft statement prepared for Armendariz' shop 
and will send the second when I do the rewrite. 

36. Met with E. B. Duarte of Cabinet Committee to discuss progress 
of two brochures which CCOSS is producing. The production will 
be contracted out and Duarte has lined up the writer and designer.' 

- One brochure is a general topics brochure on the CCOSS that unde' 
scores the role of the President. The second brochure is contei-n| 
plated as a "Hispanics In Government" similar to that produced b-^' 
Blacks, Still have to wrinkle out some policy issues which we wil 
discuss with Chairman Ramirez. Issue is how to make it apoliti 
One suggestion is to make a sort of SS directory of key federal 
officials that constituents can contact like they do their congressii 

37.. Am working with Duarte on the raw film footage taken of Presidei 
Echeiveirra's visit. Really don't have much to work with but I 
feel we have to do somethirgwith this expensive footage. We are 
working on the possibilities of a 24-minute documentary that depi 
President's involvennent with SS through the Echeiveirra's visit. 
More of an inferred message. We must move fast on this to get 
any useful mileage and Duarte is lining up outside producer. 



Ray Hanzlik 
Carlos Conde 
Alex Armendariz i^ 
Tcny Rodriguez 
Henry Ramirez 
Tom Korologos 
Dan Kingsley 
Rob Davison 
Bill Rhatican • 



5643 



Exhibit No. 262-38 



THE WHITE HOUSE 
WASHINGTON 

ADMINISTRATIVE- CONFIDENTIAL 



July 28. 1972 



MEMORANDUM FOR: 

FROM: 
SUBJECT: 



CHUCK COLSON 
FRED MALEK 



BILL 



\^o)^J 



MARUMOTO 



Weekly Activity Report of the 

Spanish Speaking 

Week of July 24-28. 1972 



The following action took place this week: 

1. Alex Armendariz, Carlos Conde, Tony Rodriguez, 1701 PR, 
Alex's staff, and I were all involved in the Spanish Speaking 
Democrats for the President Press Conference yesterday. 
From some quick checks across the country today, we received 
good and favorable coverage in the nriedia. Alex is to follow 
through on a continuing program. 

2. A number of us attended some portion of the G I Forum National 
Convention at the Statler- Hilton Hotel this week. Secretary 
Hodgson delivered an address along vrith Romana Banuelos, and 
Carlos Villarreal. 

3. Conde and Armendariz are reworking the Spanish Speaking 
position of the Republican National Platform plank for Ed Harper. 

4. Arnnendariz, Conde and I met with Ken Clawson on Tuesday to 
discuss our respective roles and iron out some problems. 

5. Met with Fred Mendoza of the U.S. Jaycees re a recognition 
/ program he is putting together in conjunction with the Cabinet 

Committee. ,\ 



5644 



-2- 



Met with Pete Villa,- National President of LULAC, and Richard 
Zazueta, National Director of SER, re our assistance. 

Rodriguez and I met with Rod Brady, Assistant Secretary for 
Management at HEW re the Spanish Speaking. 

Rodriguez and I met with our black counterparts and Nate Bayer 
today re OMBE grants. Some progress is being made but all 
too slow. OMBE has been very unresponsive. 

Grants 

a. Ray Hanzlik, Rob Davison, Rodriguez and I have all been 
involved in increasing a grant for SER out of Labor. It 
will average out to about $18 million for FY'73. 

b. Rodriguez is working with Rob Davison re proposals for 
two Texas Chicano firms, GPI a nd Urban- Re sea r<A-, which 
were submitted at Labor. 



c. Bud Evans, Armendariz and I have been working with Hernnan 
Gallegos of Human Developnnent Corporation of San Francisco 
regarding and OEO aging grant for $1. 5 million. It appears 
it will be announced the latter part of August. 
10. Surrogate Program 



a. Rodriguez is working with Pat O'Donnell re the Southwest 
Council of La Raza National Conference in arranging for 
Under Secretary Jack Veneman and Assistant Secretary 
Pat Hitt as speakers. In addition, he has some of our SS 
surrogates as speakers. 

b. Rodriguez working With Hector Rodriguez, Executive 
Director of the Puerto Rican Conference re surrogate 
appearances in New Jersey. He also has the Governor of 
Puerto Rico and the Mayor of San Juan as surrogates. 

C. . Rodgiguez will be on a Puerto Rican TV show this Sunday 

in New York. This has the largest PR audience in New York 
and New Jersey. 

d. Rodriguez assisting Banuelos re Senator Tower's record 
with the SS. 

11. Armendariz, Rodrigviez and 1 met separately with a small group 
of Puerto Ricans from New York active in the National Hispanic 
Finance Committee and brought in by Ben Fernandez, its Chairman. 



5645 



Under Secretary Veneman pinched-hit for Bob Finch at Tuesday 
evening's Spanish Speaking Appointees meeting at the Blair House. 
He did an outstanding job. Next meeting is scheduled for August 15 
at the Taylo House. 

Personnel 

a. Developed SS candidates from California and Texas for Dan 

Kingsley re the UN Delegation. 

b. Rodriguez developed candidates for the Board of a new in-town 

housing experimental program in San Antonio for HUD. 

c. We have now appointed 45 SS to Presidential and super-grade 
positions versus six for Johnson and three for Kennedy. Conde 
to play this up. 

d. Rodriguez developing SS candidates for 1701 for two committees; 
Attorneys for the President and Athletes for the President. 

e. Rodriguez met with Lorenzo Ramirez, Special Assistant 
Associated to National Service, (GS-16), one of our newest 
appointees re orientation. 

Conde working on a suggestion by Connie Stuart for White House 
theatre showing of "I Got a Friend, " a bi-Ungual education film 
produced by Dan Moss, husband of Vickie Carr. Connie saw the 
film in California and believes it has good potential for a White | 

House showing involving Vickie Carr and perhaps one of the Nixon I 
girls. It would present positive aspect for President Nixon on bi- 
lingual education, one of the chief issues among Spanish Speaking | 
in the coming campaign. 

Tony Rodriguez' office receiving a lot of mail on SER, (A Spanish 
Speaking manpower program) saying Administration ignoring it. 
Tony asked Conde to help him draft a reply to writers. Asked i 

for particulars on issue from Department of Labor. 

Conde working with Office of Education on brochure. Helping 
them get materials from Library of Congress and hopefully expects 
first proofs in about a week. | 

I 
Conde working with OEO on brochure. Their outline and productioi 
plan arrived Friday and looks good. He will emphasize the Presi-; 
dent's role. Shooting for a September 10 deadline. 



1 



5646 



18. Conde completed the updating and checking for accuracy on the 
Administration Achievement list. The pertinent departments 
reviewed it, updated it and signed off on their section as being 
factually accurate. Sent copy to Marumoto for rapid approval 
by Donnestic Council and then to Armendariz for insertion in 
Speaker's kit. 

19. Conde worked with Mrs. Banuelos and Alan Wade on her 

public information officer. They recommended Stan Arnastrong 
which Mrs. Banuelos favors. However, Armstrong asked for 
GS-15 gradeand Mrs. Banuelos wants to offer only GS-14. If 
Armstrong doesn't accept a GS-14, we're back looking again. 

20. Conde arranged a White House tour on Wednesday, August 2, 

for 45 Spanish Speaking youths interning with government agencies. 
Henry Ramirez will meet them after tour on White House lawn for 
pictures and Cabinet Committee will mail pictures and releases 
to various honnetowns. 

21. Conde arranged for the swearing in of Luis Nunez, Deputy Staff 
Director of U.S. Commission on Civil Rights and top ranking 
Puerto Rican in Administration. Ceremony will be held 10:30 a.m. 
Monday, Roosevelt Room. Cabinet Committee and Civil Rights 
Commission are handling press releases, and followup activity. 
White House photographer will take pictures for Conde's use. 
Also involving White House press corps. 

22. Conde worked on draft statement for press conference announcing 
Spanish Speaking Democrats for Nixon. Worked with Alex on the 
coordination. He placed individual calls to his media contacts in 
Texas and the Southwest. Al Snyder helped with network television 
and we received good coverage in all papers except Post which 

did not run story. 

23. Conde tracked down the happening on the dismantling of minorities 
division in opposition party. Talked directly to person who headed 
the division who is his personal friend. 

24. Conde arranged radio show appearance for WRC Sunday Hispanic 
talk show. Had Rodriguez originally scheduled but for Hatch reasons 
replaced Tony with Bert Gallegos. 



5647 



-5- 



25. Conde arranged with State Department and Community Relations 
Service (Justice Department) for showing of Viva, a film produce 
by Chicanos, at monthly meeting of surrogates. 

26. Conde got press accredition for El Sol of Houston to cover Republ 
Convention in Miami Beach in August. 

27. Conde worked with various agencies on the production of position 
papers on Spanish Speaking issues. They were due Friday and 
will submit to Alex Armendariz for use in speaker's kit. Conde 
will also use for development of media news stories. 

28. Conde working with La Luz Magazine on cover layout of Presideq 
Nixon and Spanish Speaking surrogates for October issue. ' j 

29. Conde working with Cabinet Committee PIO on the development o 
two brochures, a radio news program and the production of filin 
on the visit of President of Mexico. Must move fast if we are to 
get any value out of it. 



cc: / Ray Hanzlik 

/ Alex Armendariz •" 
Carlos Conde 
Henry Ramirez 
Tony Rodriguez 
Tom Korologos 
Dan Kingsley 
Stan Anderson 
Rob Davison 
BUI Rhatican 



5648 
Exhibit No. 262-39 



Commiilee 
for the Re-election 
of the President • 



August 3, 1972 

MEMORANDUM FOR THE HONORABLE FREDERIC MALEK 

FROM: ALEX ARMENDAR],g! ^ 

SUBJECT: SPANISH-SPEAKING ORGANIZATIONAL CHART 



Attached is the Spanish-speaking organizational 
chart and phone numbers for your convenience. 



bcc: Henry Ramirez 

Mo Marumoto 
Carlos Conde 
Tony Rodriguez 
Frank Herringer 
Stan Anderson 
SS Appointees 



5649 




24-650 O - 74 - 25 



MEMORANDUM 



August 8, 1972 



5650 



Exhibit No. 262-40 



S ijk*^^vo«Jt- q 5^ 



THE WHITE HOUSE 






MEMORANDUM FOR: 

FROM: 

SUBJECT: 



FRANK HERRINGER 
A. F. RODRIGUEZ 
Surrogate Plan 



K 



In reference to your memo of August 3rd on the above subject: 

1. Tab Dl - We are not restricting this area to Presidential 
appointees only. We have included such persons as Governor Ferre; 
Carlos Romero Barcelo, Mayor of San Juan; Commissioner Cordova, etc. 

The hatched supergrades have also been instructed to make as many 
appearances as possible in key media markets. This is starting to improve. 
Until the plan was approved, we had no actual authority to enforce the rules 
or requests. Up to this point, we are continuously having to push the 
surrogates in many areas. 

2. In reference to the reporting system, we still have it on a monthly 
basis. These reports will be sent to you and as soon as we get all to send 
their reports weekly, we will send them to you also. 



Bill Marumoto 
Alex Armendariz 



5651 

.-"■- --^ -'---". August 3, 1972 

MEMORANDUM FORj ■ ~ ■ ' TONY RODRIGUEZ '. 

FROMt _' "S -:-;^^"- ^.- ■ - FRAIMK HERRINGEa. - i 

SUBJECT: . -^^;!l;'^' _ Sxi^rogata Plan "- PJ^": 

As I told Mo, yourturrogate plan is excellent, aad we bope yott ">-. > 
are proceeding to implement it fully. 

Two comnnent»i .■■-=. .. ~ ? 1' .- 

1. Schedules. The proposed appearaxices for Presidential "-; ' . ." 
Surrogates (Tab DJDonly Include Presidential appointees. I 
as8um« you are proceeding to obtain commitraents from the 
suporgrauJea and non-government types, and are developing - - 
schedules for them. There is no reason why Hatched super- 
grades should not make their non-partisan appearances in key 
n^edia markets, 

2. Reporting System. I would be interested in receiving copies 
of your weekly reports (Tab D3). 



Alex Armendarlz 
Bill Maromoto 



FCH:mrr 



5652 



Exhibit No. 262-41 



f 



b 



Q 



^^^ 



THE WHITE HOUSE 
WASHINGTON 



August 8, 1972 



2. 



MEMORANDUM FOR: 



/O^EX ARMENDARIZ 
TONY RODRIGUEZ 

NATHAN BAYER (X)/ 



I spoke with John JerJcins t)ns afternoon concerning the current 
status of your priority OMBE proposals. 

In the case of AMEX Civil Systems and Ultra Systems, Inc. , 
John expects to have P.equests for Information in their hands 
by the first of next v.'eek. I strongly advise you to encourage 
them to complete the RFIs as qiiickly as possible and ret-urn 
tlieiTi to Jenkins. He assures me that even in the absence of 
their completion, he will have tlic investigation and security 
clearance begun and the audit begun. 

In the case of Southern California Latin American Contractors 
Association, Jolm tells me that the security check is currently 
under way, and we will have a final repo'rt by the end of next 
week for sure. 

In the case of the Southwest Council of Laraza, John met with 
them this morning and spoke with them for about two hours. 
John is very impressed with this group and says that he would 
have no difficulty in funding thcni. He awaits your signal on, 
this matter. 

Please let me know how you wish to proceed vHth this as soon 
as possible. 

I trust tliat the $600, 000 SBA contract, announced August 7 in 
Los Angeles by Bob^'inch to AMEX Civil Systems will hold them 
until we can complete action on their OMBE proposal. 



cc: Bill Marumoto 



5653 



Commiiiee 
or the Re-elecFtbn 
of the President 



1701 PCNNSnVANIA AV£NUE, N.W. 




July 26, 1972 



MEMORANDUM FOR NATHAN J. BAYER 
FROM: - ALEX ARMENDARIZ 
SUBJECT: OMBE PROPOSALS 



We have reviewed the list of proposed grants to be funded 
listed in your July 24th memo. Two of those listed that appear 
to be not funded at this point are highly recommended by this 
office. 

Spanish-Speaking Business Alliance, Los Angeles 

Amex Civil Systems, Lawndale, California 

The others listed as not funded to date I can offer no opinion 
due to lack of information. ~ 




p^ 



.^^ 



,^^ 



5654 

. SUMMARY STATUS OF SELECTED APPLICATIONS 
AT JULY 20, 1972 

Applications currently in process 26 

Applications forvrarded to other agencies 6 

Applications awarded U 

Total V, ■ "~ . 36 



5655 



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5657 



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5658 



Exhibit No. 262-43 



MEMORANDLM 



THE WHITE HOUSE 

WASHINGTON 

ADMINISTRATIVE- CONFIDENTIAL 



August 11. 1972 



MEMORANDUM FOR: 

FROM: 
SUBJECT: ^ 



CHUCK COLSON 
FRED MALEK 



XhAQ: 



) MARUMOTO 

Weekly Activity Report of the 

Spanish Speaking 

Week of August 7-11, 1972 



The following action took place this week: - - 

1. Working on additional' schedule proposals for the First Family. 

" 2. Carlos Conde and I working with Doug Hallett on mailings for 
next three months. 

3. Tony Rodriguez and I met on Tuesday with Pete Mireles of OEO 
in a stroking session. 

4y\Met with Fred Mendoza on Tuesday of the U.S. Jaycees re 
progress on a special recognition program he's been working 
on for the CCOSS. 

^C Rodriguez and I met on Tuesday with Pete Villa, National 
/ ^^resident of LULAC XiS. rni scellaneo us rnattfi-rs. 



>^ 




Rodriguez, Arm g.nda_ riz and^I/riet on Wednesday with Ed Aguir re 
and FerrjaJodoDeBaca, Regronal Directors of Labor and HEW, 
Region DC re various matters. 



7. Ray Hanzlik and I met on Wednesday with six Puerto Rican leaders 
from the Northeast • . . . 



5659 



r> 



8. Rodriguez and I working on next Tuesday's Spanish Speaking 
Appointees meeting at the Tayloe House. We've invited all of 
the appointees and their spouses. Counsellor Finch is to speak. 

Crmendariz a3d I working on getting three SS Democrats for ■ 

■''ice ChairmenV --" : 

SXRodriguez assisted the Puerto Rican Horneowners Association 
of New York obtain a speaker for their banquet in September. i 



11. Discussed with Bud Krough the advisability of a SS for one of 
the three D. G. City Councilman vacancies. 

12. Personnel 

a. Met with Dan Kingsley and Dick Howard re Rudy Montejano's 
Senate confirnnation to the ICC. -^. 

h. Interviewed Mack Garcia for Romana Banuelos's PIO slot. 
He wrill start work shortly. 
^ . / 

c. Developed'six SS names for the Foreign Service Selective 
Board at State Department. 

d. A Mexican American wonnan from California was selected 
Wednesday for OEO's National Advisory Council and is going 
through the security check. 

e. Discussed with Dan Kingsley the Assistant Secretary for 
Equal Opportunity vacancy at HUD and filling it with a SS. 

' Appears to be a hold on it until after November. 

f. Discussed with Armendariz Ed Hidalgo's deep interest in 
joining the staff at 1701 and Alex is contemplating hiring hinru 

g. ^Rodriguez is working with Paul Gomory in trying to keep 

Jose Cardenas from being used as a consultant a.t the 
Department of Justice. He is an expert on bilingual education, 
but very outspoken against the Administration. 

h. Rodriguez assisted Diana Herr, Dick Mastrangelo's staff, 
in obtaining names of Spanish Speaking female educators for 
an advisory board at OE. 



Rodriguez is working with Alex to get 8, 000 volunteer workers 
in Calif ronia. We are working through some of our friendly 
contractors and key regional personnel. 



5660 



13. Grants 

a. Rodriguez and I working with Rob Davison oh the following: 

Development Associates, Washington, D. C. , $75, 000 at DOX.. 

^ 

Urban Research, Newport Beach, California, $400, 000 at DOL. 

■ - \ '• . ■ " 

\ Urban Tech, Dallas, Texas, $300, 000 at DOL. . , 

\ Southern California Contractors, Los Angeles, California 
"'. $300, 000 at OMBE. 

SER, Los Angeles, California, $20 million at DOL. 

b. Rodriguez met with Tom Baca, Student Representative of the 
California Spanish Speaking Law Students Association re ^ 
grants information,. ■ . -- — 

c. Rodriguez is assisting Laszlo Pa szt^r^^from. RNC- with a — 
Filipino group that is having funding problems with OEO. 

y 

14. Rodriguez met with Sylvia Garcia, the nev/ field representative ^ 
for Armendariz, /io go over names of contracts in Texas and Illinois. 

15. Alex and Rodriguez met with Phil Sanchez and key regional directors 
in Region IX to discuss how to effectively use the known supporters 
of the President in the cannpaign. 

16. Rodriguez arranged to have ^ert Gallegos at a fund-raising dinner 
in Kansas for this month. The guest of honor will be actor 
Lloyd Nolan. V 

17. Rodriguez met with Rob Davison to go over the list of key contacts ^ 
we are trying to assist between now and November. 

18. Rodriguez is working with Pat O'Donnell in getting Manolo Sanchez 
exposed to key groups in selected communities (New York, Texas 
and California). 

19. Rodriguez assisted Dick Wise in getting background irLformation for 
Under Secretary Larry Silberman's banquet speech at the National 
Conference of the Southwest Council of LaRaza. 



5661 



-4- 

20; Rodriguez met with the representatives of our Spanish Speaking 
surrogates to give thenn up-to-date information on the campaign, 
material for their speeches and a list of key counties in California, 

21. Rodriguez met with Andy Gonzalez, OMBE employee, who is or- 
ganizing the Spanish Speaking in that agency. 

22. Rodriguez is assisting Wally Henley in getting a SS priest to assist 
in a special service given in Miami for members of the Cabinet .— 
and selected friends of the Administration. t 

23. Conde finished the final review and corrections on Spanish Speaking 
achievement list. It is being typed in final and will be turned over 

■' to Armendariz. 

24. Conde finished the final review on SS briefing papers. Ajrmendariz 
will utilize in his canapaign kits. 

25. Conde is preparing bi-llngual fact sheet as requested lay Arnnendariz. 
To"be completed by August l6th. ,. -' . 



26. Conde is continuing to work on "President Echeverria's visit to U.S. 
Received film treatment yesterday, now moving to script. To be 
ready by September l6th. 

27. The first attempt at bi-lingual brochure was a disaster. OE bired 
writer did not produce the material we wanted to-he was replaced 
with SS writing team. Shooting for September 15th date. 

28. Conde cofnpleted updating of SS media as requested by Kathy Balsdon 
and has been submitted. 

29. Conde has received constituent's list from Tony Rodriguez and has 
inserted into White House mailing list. 

30. Conde produced a suggested draft reply from Department of Labor 
for SER funding issue. Rodriguez will use as draft reply. 

i^'31, Condo has begun the preparation of short fact shoots on SS achiovo- 
y ments in the special categories. 

•' ■ • . \ 



5662 



32. Conde is working on a five page sumnnary of SS achievements for 
Ed Harper's office. 

33. Conde worked with Dave Parker's office on several Presidential 
schedule proposals involving housing for minorities in California.. ! 

34. Conde coordinated a White House ceremony for Spanish Speaking Age 
Ramirez and Dr. Art Fleming spoke to the group. Mailing and' 
photos done for SS media. ' • * 

35. Conde wrote speech for me for use in San Antonio. 

36. Conde assisted Mrs. Banuelos in hiring new PIO officer. 



cc: Ray Hanzlik 

fc^Clex Arnnendariz 
Carlos Conde 
Henry Ramirez 
Tony Rodriguez-^. 
Tom Korologos 
Dan Kingsley 
Rob Davison, • I 
Bill Rhatican 
/ ■ 



5663 



Exhibit No. 262-44 



\ .-■ 



Is'o. i; 



August 13, 1972 



■> '■ 



UEUo&ANDVu. yoai 

FROM: ' 

SUBJECT* 



;/ 



JOHN CLARKE 

BULL (MO) MARUMOTO 

Judge Alfred Horoacdea 



It nay vacancies cooio up for tho fodoral bench In Texas, 1701 and 
our oporatloa woald Ilka to see Judge Heroajidox appolntod. 

Ho ie a Democrat ■who ia preecntly heading tho Spanish Speaking 
Den^ocrat* for tha President and is a threo-ttma past National 
Prosidant of LULAC, tho largest Chiciao sorvlco organliitioa 
ia the country, . . _ 

It would b« a roaX coup if wo could appoLnl him. 



Attachnsont 

cc: 0aa Kingslay 
bcs Tpny Rodriguez 
t^Alex Armendariz 



5664 



e 



Juna 12. 1972 



Dear Judge Hernandezt 

It was good to havo seen you again and particularly to hear of your 
interest In supporting the re-election of the President. 

I wajit to emphasize that if you implement your plans as we dis- 
cussed, the President will adequately recognlzo you. 

Look forward to seeing you at the LUI-AC National Convention. 

All good things to you. 



William H. Marumoto 
Staff Assistant to the President 

Judge Alfred Hernandez . - 

Attorney at I^aw t? '-" ^- 

515 Kress Building ... 

Houston, Texas 77002 

cci'-'^ox Arnnendarlz ' " 

Carlos Conde 

Tony Rodriguez , 
' ~ Henry Ranolrez 



5665 



Committee ^ 

for the Re-election 

Ot the r resident WOI PINNSYIVANIA avenue, N.W., WASHJNGTON, O.C. 30006 (303) 333-0930 



June 8, 1972 



MEMORANDUM FOR: 



FROM: ALEX ARMENDARIZ 

SUBJECT: ALFRED J. HERNANDEZ 



With reference to your appointment tomorrow, Alfred Hernandez 
Is past three term National Chairman of the League of 
United Latin Americans Citizen (LULAC) and is presently 
serving on the Democratic National Advisory Coinmittee. 
Mr. Hernandez has campaigned vigorously for Democrats 
(Humphrey In '68, Included) in past elections and is a 
well know Democrat (see attached). 

Impressed with the President's record in assisting Spanish- 
speaking and disenchanted with a lack of recognition from 
Democrats, Mr. Hernandez is considering taking action in 
public support of the President. Preliminary discussions 
involved the possibility of Mr. Hernandez coniing to 
Washington along with other leading Spanish-speaking 
Democrats for a press conference to be held one week after 
the National Democratic Convention and articulating their 
support of the President. Mr. Hernandez has hopes that this 
move will bring him better recognition than he has received 
from Democrats. 



His final decision will "be made withljS~a~few'~3ay8 after 
the National LULAC Convention, June 30 to July 1 unless you 
can help get him committed now. 



24-650 0-74-26 



MEMORANDUM 



5666 



Exhibit No. 262-45 



THE WHITE H€H:;SE 

WASHINGTON 



August 18, 1972 



MEMORANDUM FOR:" 



FROM: 



^SUBJECT: 



CHUCK coLsaw 

FRED MA LEK 

BILL ffi/lQ^^ARUMOTO 

Weekly Activity Report of the 

Spanish Speaking 

Week of August 14-18, 1972 



The following action took place this week: _ 

1. Had one of our best Spanish Speaking appointees meeting last 
Tuesday at the Tayloe House with Bob Finch as the special 
guest. Next one scheduled for September 12th. 

2. Alex Armendariz, Tony Rodriguez and I met with Pete Villa, 
National President of LULAC and three of his lieutenants 
Wednesday evening to discuss miscellaneous itenns. 

3. Armendariz's staff putting together schedule proposals for 
members of the First Family with special focus in California, 

_.,_ Texas, New York and Illinois. 



4. Provided a list of Presidential and other high-level Puerto Rican 
appointees for Bob Haldeman which he requested. 

5. Contacted Ben Fernandez re obtaining the services of Caesar 
Ronnero to narrate the Echeverria documentary film and other 
matters pertaining to the National Hispanic Finance Committee. 

6. Met with Stan Armstrong, Phil Sanchez's newly appointed 
Special Assistant re SS matters at OEO. \ 



5667 



-2- 



7. Working with Carlos Villarreal's staff re an honorary 
doctorate for him from a college in Texas. 

8. Met with Don Dunlap re SS 8{a) contracts at SBA. 

9. Requested Carlos Conde to crank up appropriate publicity 

re the President's nomination of Admiral Horacio Rivejrp 

as Ambassador to Spain. 
• » , ' 

10.' Personnel 

a. Working with Ray Hanzlik re situations at C COSS 
with particular e mphasis on personnel matters. 
Should resolve within the month. 

b. Developing candidates for the SS coordinator at HUD. 

c. Discussed possibilities of a SS Washington, D. C. 
Councilnnan with Bud Keough. Negative on next three 
appointments to be made soon. 

d. Working with Department of Commerce officials re the 
deputy director's slot for OMBE. 

e./ Rodriguez met with Carlos Villamiel, SBA Regional 

Director, New York, who is seeking assistance in getting 
another position at another agency. 

f. Rodriguez met with Vidal Cantu from Laredo, Texas in 
reference to patronage, he is seeking to get more Spanish 
Speaking Texas Republicans in government jobs. 

g. Rodriguez discussed with Congressman Lujan the possibility 
of his announcing the appointment of Dr. R. Dordova-HEW 
from New Mexico to an Ejcecutive Training Course. The 

^ employee is the only Spanish Speaking appointed to this 
exclusive training class. 

h. Rodriguez met with Eliaa Rodriguez who works for FAA. He 
a Republican and seeks assistance to become Legislative 
Director in that agency. \ 



5668 



i. Rodriguez met with Oscar Cano, Director of Catagorical 
Programs, EPA. He wants more SS in his Division but 
feels he needs our push. 

11. Grants 

a. Working with Rob Davison re a Southwest Council of 

LaRaza $6 million HUD proposal,ln Sa n Francisc o. 

b. Working with SER officials and Rob Davison re SER's 
$18 million manpower grant from DOL. 

c. Rodriguez met with Sonny Davis, at the reque st of 
Senator Tower, to review a proposal for funding an 
educational Southwest project. 

12. Rodriguez discussed with Richard Zazueta, Executive 
Director of SER, about a complaint that his San Jose, California 
Director went to the Democratic Convention as a McGovern 
delegate on SER time and funds. If true, we want disciplinary 

^«L action taken against him. 

13. Rodriguez discussed with Jose Lopez, San Jose, California about 
his wanting to get ten top Democratic political leaders to meet with 
him or Alex. The purpose is to get an endorsement from them. 
The group is disenchanted with McGovern. 

14. Rodrigue.z briefed Ed Hidalgo on Democrats friendly towards the 
Administration. He want -to make a list and meet these people if 
and when he is asked to serve at the Re-Election Committee. 

15. Rodriguez met with Jim Griffen, Director of Headquarters 
Operations at OEO. He was asking assistance on the Democratic 

\y P^rty activities going on in the agency. He asked Bert Gallegos 

to help on this. 

16. Rodriguez is working on a farewell reception for Art Troilo, 
Assistant to Secretary Romney, who is returning to private practic' 
in San Antonio. He is the first supergrade ^o leave in over a year 
and-a-half. > 

cc: Ray Hanzlik 

irrtlex Armendariz 
Carlos Conde ' ' • 

Tony Rodriguez . Bill Rhatican 

■' Henry Ramirez Dan Kingsley 

Tom Korologos Rob Davison 



5669 



Exhibit No. 262-47 



Committee for the Re-election of the President 



MEMORANDUM.- 

August 25, 1972 




CONFIDENTIAL 

FOR: ALEX ARMENDARIZ 

FROM: ■, DAVID E. FLORENCE 

SUBJECT: ' ED FENA — GS— 18, EEOC 



l^-Af^A-^ 



Ac our Nixon Hospitality Room during the LULAC Supreme 
Council meeting at Anaheim, California, Ed Pena spent a 
great deal of time attempting to undermine our efforts. 
Some of typical comments were the following: 

I have posters of Nixon in my office showing a little' 
pregnant girl pointing her finger to "Tricky Dicky" and 
saying "he did It," etc. 

During the banquet he addressed the group over the micro- 
phone with the following comment: 

"Earlier today, I attended a hospitality room for the 
Re-election of the President. The only President I 
recognize has already been elected. That President is 
Pete Villa." Other comments tending to undermine our 
efforts Were also made. 

Later, Pete Villa commented, to me, that Ed Pena thought 
LULAC was getting too Republican and that he, Ed, wanted 
LULAC to invite Shrlver to the October Supreme Council 
meeting in Washington. 

It is my belief that one of the reasons Pete Villa, and 
Roberto Ornelas follow Ed Pena around and speak up for 
him is so that they will be in "thick" with the McGovern 
Administration if McGovern Is elected President. 

\ 
It is my belief that it would be wise to terminate Ed Pena 
from his position as a GS-18 at EEOC- 



5670 



Exhibit No. 262-49 



MtMORANDl M ^ 



(J T"HL WHITE HOl'SE 



WASllJNGTON 

ADMIN ISTFIATIVE- CONFIDENTIAL 



r \V\l^ ^ '"^ K September 1. 1972 

O ^ MEMORANDUM FOR: CHU OK COLSON 

FRED XiALEK 

FROM: Bli^^^O) MARUMOTO ; 

SUBJECT: ' Weekly Rep&rL of the 

Spanish Speaking 
Week of Augus; 28-September 1, 



The following action took place this week: 

1. Sent telegrams on oehalf of the President to three National 
Hispanic Finance Committee for the Re-Election of the President 
fund-raising dinners in Houston, Te-":as; New York City and 

Los Angeles featuring Romana Banuelos, Maurice Stans and 
Carlos Villarreal respectively. Also one co Art TroUo, Special 
Assistant to Secretary Rorrmey and the highest ranking Spanish 
Speaking American at riUD who is resigning as of today to return 
to private practice of law in San Antonio. 

2. Alex Armendariz, Tony Rodriguez and I met -./ith Ed Aguirre, 

. Regional Director of the Department of Labor and Regional Council 
Chairman for Region IX tofiiscuss miscellaneous SS'matters. 

3. Alex Armendariz and I met with Ray Hanzlik re the CCOSS and 
other SS matters. 

4. Met with Richard Zazueta, Executive Director of SEIR, a joint 
manpower and training program co- sponsored by LULAC and 
GI Forum and" funded by the Department of Li-bor for $18 million 
re their progrann. 

5. Discussed with Alex Armendariz several schedule proposals for 
the First Family for the next two months. 



5671 



6. Working with Kathleen Balsdon to send a mailing to our SS 
constituents next week. 

7. Met with designer Dan Lopez re the cover of the October issue 
of La Luz, a national Spanish Speaking magazine. They are 
featuring -someof.the Administration's top SS appointees. 

8. Tony Rodriguez and I met with Ray Romero of OMBE and 

Dr. Charles Leyba re the Spanish Speaking Conference of the 
Seventies. 

Discussed with Rob Davison the prospects of a Mexican American 
group in Northern California called Banco de Norte who wants 
to acquire 19 branches from Wells Fargo Bank. Prospects 
appear dinri because of a Justice Department anti-trust suit against 
Wells Fargo. 



10. Grants 



Tony Rodriguez and I met with various representatives re 
OMBE grants to tKe black and SS communities. We V\ave 
approximately 10 SS proposals who should be receiving 
top p riority. 

Met with Bob Mariscal of Mariscal and Associates of 
Los Angeles who recently received a $100, 000 grant 
from OMBE. 



Ay 



c. Spoke to Leveo Sanchez of Development Associates of 
y Washington, D. C. re his firm's status on federal grants. 

He formerly worked for Sargent Shriver, Frank Mankewicz 
and Jack Vaughn at OEO and Peacf 



d. Tony Rodriguez as 
contract fronn SB 




rps. 



urich o f Los Angeles. re a 



v^ e. Henry Ramirez cCTTTpTUng a list of all Puerto Rican grants 

under this Administration. _^ V \ k \ P ' 

— So vj\\cY hcjo Tni^ 



To 



Oow, 



M^^ 



5672 



f. Rodriguez assisted in getting t)uth Opportunities 
Foundation, Los Angeles, refunded by OEO. The 
Foundation's money was cut off effective August 31st. 

g, Rodriguez is working through Rob Davison and Dave Winner, 
DOL, in isolating through SB A 8(a), two contracts for CPI j 
Dallas. CPI is extremely cooperative and helpful. The 
contracts are for $52, 000 and $85,000. 

h. Rodriguez is assisting a D. C. Spanish Speaking concession 
contractor, Mrs. Olga Gomez, in getting a GSA contract 
straightened out. Mrs. Gomez was assured a contract and j 
now finds that no space is available for the firm. Paul | 

Gomory is contacting GSA on this. I 

■ -. _ _ I 

i. Rodriguez is assisting Dave Florence of Armendariz' staff 

with groups who want to endorse the President. Most want 

governnnent contracts or information for contracts. 

j. Rodriguez, Ricardo VUlalobos, area representative of NEDA 
visited me. Villalobos asked for our assistance in establish-, 
ing their new offiQe, i. e. , contacts, etc. 

k. Rodriguez has contacted all of our contractors that have 
/ pending contracts with OMBE to urge them to complete all 

1 requirements requested by the agencies. 

11. Personnel 

a. Alex Armendariz, Tony Rodriguez and I met with Nacho Lop 
of Los Angeles regarding his interest in the SS coordinator's 
job at HUD (GS-15). 

b. Armendariz is hiring Ed Hidalgo, former Special Assistant I 
■ • ■ Frank Shakespeare at USIA as the National Chairman of the 

SS for the Re-Election of the President. Hidalgo is voluntee 
-» his services for the next two months. Armendariz will arra 
for press coverage of the appointment. 

c. Developed SS candidates for the National Minority Purchaser 
Council at Commerce. 

d. Endorsed Rudolph Sanchez of Arlington, Virginia for a Spec 
Assistant to Assistant Secretary Hyde at HUD (GS-15) via 
Rob Davison. . ' 



5673 



e. Developed SS candidates for the National Credit Union 
Council. 

f. Assisted In obtaining the release of Rose Mary Bulloth of 
SER to join Armendariz' staff in Texas. 

g. Working with Cal Collier, Exe cutlve Assistant to XTnder 
Secretary James Lynn at Commerce regarding some problems 

. with NEDA. , ' ' — 

h. Rodriguez worked with Paul Lavrakas of Bob Brown's shop, 
in getting a SS representative on a U.S. Army civilian team 
inspecting bases in Germany. Our participant is Alvin 
Padilla, San Antonio. 

i. Rodriguez is assisting Ed Hidalgo, at Alex's request, in 

forming his new office. This includes names of key persons 
in key states, schedules, speeches, advisors, etc. 

Surrogates . .' 

a. Rodriguez is assisting Ben Fernandez in getting speakers 
for his NHFC fund raisers this month in Los Angeles and 
other areas. Carlos Villarreal and Bert Gallegos will 
participate. 

b. Rodriguez is working through Alex Armendariz in seeing 
that our surrogates are invited to the forthconning MAPA 
convention. Phil Sanchez will represent the President. 

c. Rodriguez met with Stan Armstrong, Phil Sanchez's 
Special Assistant, and went over Phil's schedule from now 
until the election. We reviewed his invitations and will 
generate some in key areas. 

d. Rodriguez is working with the National GI Forum President 
in generating banquets for Veteran' 9_Day Octob_er_2.3rd^ _ . 
Hope to have one in San Antonio and Los Angeles. Good 
exposure for our speakers. 

e. Rodriguez is assisting Frank Alnnaguer, of Alex's shop, in 
setting up banquets and appearances for Admiral Rivero, newly 
designated Ambassador to Spain. New York, Connecticut, 
New Jersey and Pennsylvania will be key areas we v/ould like 

" to hit. • 



5674 



-5- 



£, Rodriguez is assisting Mack Garcia, Mrs. Banuelos' new 
PIO man, in her scheduling and also as to what we feel he 
needs to assist Mrs. Banuelos on. 

g. Rodriguez is assisting Pat O'Donnell in getting one of our 

surrogates at the Mexican Independence Day Event, San Jose, 
California, and the Annual Fiesta Pan- Americans Plaza of - - 
■ • ; Mesilla, New Mexico, September 9. We have suggested 
i... Carlos Villarreal as first choice for both events. 

! 

13. Rodriguez is working through Rob Davison to see that i 
Armando Rodriguez, HEW, is kept in line; he is a Democrat ' 
that is screening all Spanish Speaking applicants at OE. ' 

■ - Commissioner Marland was told about him a year ago. 

14. Conde is working on bi-lingual brochure. Has. had three meetings wi 
writers-and designers on brochure and moving on schedule. Final 
copy due next week and then goes to printer. 

15. Conde is working on President Nixon-President Echeverria's 
film. Has reviewed the film treatnnent and met with project 
leaders and producer on technical details and financing. Because 
of problems encountered with getting portions of footage fronn 

Navy Lab, the deadline of September l6th has been extended one week 

16. Conde is working with nne and Ben Fernandez to get nanne celebrity 
to narrate fUm. Gilbert Roland has tentatively agreed to do 
narration and we are providing his representatives -with details. 

17. Conde reviewed layout and story line for cover story of 

President Nixon and SS Administration officials due for October 

issue of La Luz . - The cover looksextremely-good-a-nd^wUi impact 
annong SS. 

18. Conde did cover letter and White House mailing on Robert Finch 
and Henry Ramirez visiting with SS sunrxmer interns at the White 
House. Mailed to hometown newspapers in. the Southwest. 

19. Conde did photo and is doing story on White House SS intern 
Tannara Ortega for mailing to SS media. 



5675 



■ 6- 



20. Conde is working with E. B. Duarte of CCOSS on brochure 
featuring SS Administration officials. Reviewed copy with 
Armendariz and brochure is now on way to printers. Will 
include about 60 photos. 

21, Conde wo rked on information action plan for bi-lingual 
education. Armendariz' office has taken care of fact sheets; 
Conde's office will do about three mailings on bi-lingual education 
themes with photos and working on bi'-lingual film ceremony in 
White House with Vicki Carr. i 

!2. Conde reviewed three schedule proposals on SS with Dave Parker 
at my request. Concluded that prospects dim for acceptance so 
did not submit. 

;3, Conde wrote and presented Oval Office schedule proposal to 

Dave Parker for meeting of President with SS surrogates. Need 
such a meeting for photo taking purposes to use in SS campaign. 

4. Conde did a media action plan for Manolo Sanchez at request of 
Bruce Kehrli. Sanchez is being considered a Presidential 
surrogate for limited-use in SS community media. Suggested 
in-house feature for Hispanic media and television exposure in 
California as a starter. 

V 

5. Conde worked with SBA PIO on developing nnore new materials on 
SS grants and loans, particularly in the Southwest. SBA PIO also 
produced two feature stories on this subject and will be used for 
White House mailing, 

6. Conde is working with OEO on their brochure on SS programs. 
Moving on schedule. 

7. Conde did a review and recommendation on Madrid's ABC news- 
paper which is due to begin U. S. edition in October. A White House 
ceremony is a strong possibility. Suggested that we also do such 

■■ a ceremony --or replace ABC proposal with domestic SS magazine. 
La Luz . 

8. Conde has been in contact with Dan Moss, husband_of_ Vicki Carr, 

to do special White House showing of their bi-lLngual education film. 

. Connie Stuart viewed it in California and considered it outstanding. 

Moss and Carr willing to participate in event Ln early October. 
Conde will preview film with SS task force before submitting a 
firm proposal. F^art of bi-lingual action plan. 



5676 



29. Conde is reviewing two sets of copy for radio and brochure 
materials at my request. 

30. Conde is working with Duarte on CCOSS brochure which is to 
follow SS officials brochure. He reviewed first draft of copy. 
Design is in progress by Dan Lopez. 

31. Conde reviewed along with Armendariz and myself the copy of 
Manpower Magazine due in a few weeks and to be special edition 
on SS programs. Conde discussed with Labor PIOs possibility 
of flyer or excerpted materials for special mailing rather than 
brochure due to tinne element. Will probably go with excerpted 
material. 

/32. Conde is trying to locate new Ambassador to Spain Horacio Rivero 
for more media exposure. CCOSS PIO working on media action 
plan. CCOSS did press release along with White House release 
at time of announcement. > 



cc: Ray Hanzlik 

lUAfSx Armendariz 
^^rlos Conde 
Henry Ramirez 
Tony Rodriguez 
Tom Korologos 
Bill Rhatican - 
Dan Kingsley 
Rob Davison 



5677 



Exhibit No. 262-50 



CommiKee 
for the Re-election 
of the President ,,o, P^^ 









Sejiteraher 8, 157:^ 



MEKORANnUM FOR THE HONORABLE FKEDF/IC MALEK 



FROM: 
SUBJECT: 



AT.EX ARIEtlPArrij'-, 




r 






.0. 7 



^ 






J-^cSOrW-, 



THE PA7.A IINTPA, rARTV/l'ATTONAL CONVENTION 






vv<-^ 






The first Kaza Inida National ronvention, licld September 1-A in El Paso, 
MPS attended by approximntely fe ,000 delegates and 1,000 other participants 



/' 



■/■ 



Various observers have report 
activities and decisions: 



Jose An[;cl Gutierrez \'as 
the National Party. In a 
"Conjreso de Aztlan," the 
substantial 3 to 1 inar.'jin 
interpreted as a deniont:t): 



d the following significant convention 



Iccted Chairman of the Convention and of 
dition, h.e was elected Chairman of the 
Executive coiTjiiittco of tlic Party. His 
over Rcdolfo "Corky" Gonzalez may be 
tion of preference for the calculated 
political leadership styld of Gutierrez over the militant activist 
imape of Gonzalez. Gutierrez also' represerits a political strategy 
centered around La Raza Unlda as an instrument to maintain a balance 
of po-.'er between the two m.ljor parties. 

Ramsey Muviiz-, the Raza Unidji candidate for Governor of Texas won a 
strong endorsement from thel assembly. The highest-ranking Raza Unida 
candidate, Muniz has a clcaA image witli no record of militancy and 
apparently has the cnthusiarkic support of the party. Raza Unida 
will support no other politiVa) candidate of either party, including 
Presidential candidates. Ai 

The issue of an $8,000 contribution for Muniz' campaign from 
Republican party was brouglit up in a meeting off the conventic 
A promise was made to publically condemn McGovem if such a dc 
v"y made. 

C r Cliave.z' invitation as gucj,: speaker was cancelled because f 
his endorsement of McGovem and his efforts to register Democrats. 

5. Convention activity was considerably more unified and harmonious than 
^jas anticipated. This was largely the result of the death -of delegate 
Richard Falcon of Colorado, which seemed to bring all factions closer 
together. 




cc: Frank Herringer 



5678 



CommitSee 
for fhe Re-elecHon 
of the President i 



October 30, 1972 

MEMORANDUM FOR WILLIAM MARUMOTO 
FROM: ALEX ARMENDARIZ 

SUBJECT: LA RAZA UNIDA 



In view of your concern over the article in this nnorning's 
Washington Post on La Raza Unida, please be assured that so 
far everything went as expected. Far from attennpting to 
control this volatile organization, our ainn is specifically 
to disassociate it from the Democrat party for which its 
members have voted almost unanimously for decades. It is 
unrealistic, unnecessary and unwise to expect a Nixon 
endorsement from La Raza Unida. The purpose of disassociation 
is to elicit criticism of McGovern. In order to criticize 
him effectively and to maintain any credibility with Mexican- 
Americans, La Raza Unida has taken the line that both parties 
are untrustworthy. They, therefore, must criticize the 
President as well. 

La Raza Unida is very pleased with the Zavala County health 
grant which was the major topic of discussion in their press 
conference of yesterday. Our image certainly is not hurt 
by the fact that Phil Sanchez, Mexican-American director of 
OEO under Nixon, overrode the veto of the grant by Democrat 
Governor Preston Smith; and overrode it because of the grant's 
intrinsic merit. The fact that La Raza Unida is attempting 
to speed up the grant's implementation gives it a degree of 
publicity which we could never get for it through normal press 
channels. 

cc: Fred Malek 

Frank Herringer 
Phil Sanchez 
Ed Failor 



A TRUE COPY 



5679 



Exhibit No. 262-51 
for ihs R3-e!3cJicn 

Ol ii\Q lTGSIC3il/ 1701 Pi.VIJSYlVtNlA AV£NU£, N.W., WASHINGTON, DC. 30006 (303) 333-0930 

CCT.'FIDI'ATIAT. 

September 1^, 1972 



ll;:!■;or;.■^^,'DUM for ciiakles colson 

FROM: AinX /\l!MLriDA?aZ 
SimjCCT: R.V./. UHIDA COKVENTJON 



The firut Raza Unj'rla National Convention, held Septeiifoer 1-4 in El Paso, 
Texas, i;aa attended by npproxinately 2,000 delegates and 1,000 media 
personnel, observers and other participonts. Although 18 states sent 
delegates, real delegate strength was from Texas, California, Colorado, 
New M'-'x'co and Illinois. t ■,~r 

The Rnxa Unida party Convention did not officially endorse any Presidential 
candidate. The lIcGovem troops uade their i.iove very early, before any 
issues had either been presented or voted upon. Consequently, there was 
not yet a consensus of opinion, and it v;as relatively easy to stop the 

KoverTient. 

The interesting fact is that tlie I'fcGovern movement was stopped by two 
persons for two separate reasons. Rodolfo "Corky" Gonzalez of Colorado 
stopped the movement because he wanted to become the party's nominee for 
President. Jose Angel Gutierrez, founder of the party, realized that any 
endorsement would preclude any negotiations with either major party since 
they would be bound to support tlieir own candidate. 

The emergence of Gutierrez as the undisputed leader of the Party was 
demonstrated by his victory by nearly a 3 to 1 over Corky Gonzalez for the 
Chairmanship of the Congreso de Aztlan, the "National Committee" of the 
Raza Unida Party. (Gutierrez had already been elected Chairman of the 
Convention and of the National Party.) This substantial victory may be 
Interpreted as a demonstration of faith in the shrewd and calculated 
political leadership of Gutierrez over the more militant image pf Gonzalez. 
It may also bo inferred that the delegation supports Gutierrez' strategy 
to make La. Raza Ur'da an instrument to maintain a balance of power between 
the two inajor pifrties. This position is substantiated by the following 
facts: 

1. Cancellation of Cesar Qiavez' invitation to spealc to the convention 
because of his McGovem endorsement and his use of registration monies 
to register Democrats instead of Kaza Unida Party voters. 

2. The "Dump Nixoti" Resolution, introduced by California and popularly 
supported, was killed in Committee by Jose Angel Gutierrez. 



5680 



Ip. a privnte incj'jlInL; sovcrcil weel;s ago, Gutierrez iippro.-ichril iV.is office 
for a nuiot RcniibJ ic.nn contribuf ion to J. a Raza Unidn. A pro:^!.-':; ■...-ig 
maclo to jHib] ici] Iv condeiTi tlcCovcrn if such a donation were iiaco. Tliio 
pOE^il) ;] i ty i.'i still icnoor co:is;id<.'r.'.tion on the grcmids tliat f.n effort 
to I'laiMtain the neutrality of l.a Kaza llnida it; to our advanCi";?.. 

The contriliut Ion would be \1r.2d for the c.ampaif;n of Uamr;ey Kuniz, Ilaza 
Daida C.rndidate for Governor cf TexaG, wlio won a stronc endorsement 
from the conve-ation. The hiphept-vanking Raza Unida Candidate, Kuniz 
is an attorney and distinguiclied high school and college football 
player. )'.e has a cJeaii image, a professional appeal with no record of 
militancy and apparently has the enthusiastic support of the party. 

The danp.crs of SMch a move arouse question as to whether the end will 
justify tlie means. Such a contribution would be certain to annoy 
Texas Republicans as well as Connally Democrats supporting the Pre;;ident. 
Furtherraore, Raza Unida may have no alternate recourse anys.'ay, which 
would give us no reason for sticking our necks out. In any event, it 13 
obvious that any contribution should not come from the Coniaittee for 
the Re-election. of the President, but from a Independent third source. 



CC: Bilj. Marumoto 



CONFIDENTIAL 



MEMORANDUM 



5681 



Exhibit No. 262-52 



THE WHITE HOUSE 

WAJHINCTON 

ADMINISTRATIVE- CONFIDENTIAL 



September 22, 1972 



MEMORANDUM FOR: 

FROM: 
SUBJECT: ~ 



CHUCK COLSON 
FRED MALEK 



BILL 



MARUMOTO 



Weekly Activity Report of the 

Spanish Speaking 

Week of September 18-22, 1972 



The following action took place this week: 

1. Met with some key SS businessmen from Denver, Colorado 
arranged via Ed I^ucero, President of the Colorado Economic 
Development Association and Jim Fresques, Governor Love's 
Housing Director. 

2. Delivered keynote address to the National Hispanic Finance 
Committee dinner in Denver last Tuesday. 

3. Met with Ed Romero of La Luz nnagazine re prospective 
national advertisers for his publication. 

4. Met with Bill Hosokawa, Associate Editor of The Denver Post 
re article on SS effort. 

5. Met with sonne key SS regional officials in Denver arranged via. 
Joe Casillas, Regional Director of OEO, Denver. 



24-650 O - 74 - 27 



5682 



6. Met with Ed Hidalgo, National Chairman of the SS Committee 
for the Re-Election d. the President re his progress of signing 
up nationally known figures. 

7. Met with Gil Montano, Regional Director of SBA, San Francisco, ! 
and Don Dunlap of the Washington office re miscellaneous SS matte 

8. Met with Roy Batchelor, GEO, Washington; Tom Mercer, Regional 
Director, OEO, San Francisco; and Tqny Rodriguez re miscellanec 

■, SS matters. . I 

- V I 

9. . Personnel 

a. Interviewed Louis Gonzales re liaison job on our staff. 
Too young and immature. 

; b. Working with Dan Kingsley re Rudy Montejano's 
r •. confirmation to the ICC. 

c. Rodriguez met with John Rodriguez, the new Associate 
Deputy Conr^missioner for School Systems, OE, (GS-16) 
to explain our role and to let him know of the cooperation 
we expect fronn his office. 

10. Carlos Conde and I worked with the advance office re the 

, President's visit to Rio Grande Valley High School. Invited 
■■^ Carlos Villarreal, Ray Telles, Tony Rodriguez, Henry Ramirez, 

and Carlos Conde to participate. Only Ramirez and Conde were j 
able to comply. i 

' 11. Alex Armendariz and I worked on trying to get some SS Dennocrats 
to the Connally party tonight. , 

12. Rodriguez met with Governor Ferre's administrator for U.S. ' 
affairs, Louis Quinot in reference to having the Governor appear 

^ at two functions as a surrogate. 

13. Rodriguez has been in contact with the committeewoman fronn | 
i^\y>^ Bexar County, Mrs. Ruth Baker to assist her Ln identifying 

' Mexican Annerican-Republicans willing tOvhelpTiejc_in that county. | 



5683 



14. Rodriguez is working through Dave Parker's office in getting 
a. member cC the First Family to the opening ceremonies of 

the largest SS job corps center In the U.S. in San Jose, California. 

15. Rodriguez met with OUe Olivas and Marty Springer of the 
Southwest Council of La Raza in reference to their regional 
conferences in California and Texas. It appears that these 
will be postponed until after the election. 

16. Rodriguez met with Louis Cardona, Executive Director of tne^ 
National Spanish Speaking Management Association, to revj. 
their programs and facilities. I have been invited to sj 
their board in San Antonio on the 22nd of October. 



17. Rodriguez met with Pete Oliverez and^^-trS^^-Fuen^M'^ Western 
Econonnic Developnnent CorporatiorfT TJiey asked for directicn 
y and assistance in obtaining prograriKijiforjiiatTon for their 

transportation project. Working through Carlos Villarreal on 
this matter. 



yO^ 



18. Surrogates 



Rodriguez is working with Lou Churchville in setting up 
Phil Sanchez' appearances as a surrogate for the~month of 
October. 



b. Rodriguez is working with Carlos Villarreal's new public 
affairs director, Rod Larson, in generating invitations for 
Carlos during the month of October. His schedule needs 
beefing up. We have generated invitations for him in 

San Antonio, Corpus Christi and the Rio Grande Valley. 

c. Rodriguez is assisting Tom Reed in scheduling Phil Sanchez 
and Carlos Villarreal on a week tour through the Southwest 
on October 15-20. 



5684 



-4- 



19. Conde Ln Texas with the President. His media report will 
be submitted on Monday. 



cc: Ray HanzUk 
Carlos Conde 
Tony Rodriguez 
lyiQ.ex. Armendariz 
Henry Ramirez / 
■■ .' ' Tom Korologos^z^^ 

Bill Rhatican 

Dan KLngsley 
Rob Davison 






5685 



Exhibit No. 262-53 






U. S. rOVEKNMENT 

SMALL BUSINESS ADMINISTRATION 

PHILADELF^HIA REGIONAL OFFICE 

REGION 111 

SUITE -aoo - EAST LOBBY 



September 25, t3?2 



Mr. I.cveo V. Sanchez, President 
Develop:,-.ent Associates, Inc. 
1521 New Hiinpshire Ave. , N.W. 
'.v'ashiciijtcn, 0,C. 20036 



Gent 1 t;nen: 

A recent revic.v of your file indicates that the level of 8(a) contract 
assistance in the dollar i.iiount requested in your business plan has now 
been a t ta i ned . 

\le are pleased to include your firm as one of the 8(a) "grcduatcs" and 
sincerely hope that the contracts furnished to you h.^ve been i ns t rurrienta 1 
in the progression of your firm to viability. Your success novi permits 
other disadvantaged firms a similar opportunity lo participate in the 
8(a) program. 

V/e congratulate you for making such rapid progress in developing your 
company. The Small Business Administration staff is proud to have had a 
hand in your development. 




ZP -A^'.-tcJC^-^Vn 



MEMORANDUM 



5686 



Exhibit No. 262-58 



THE WHITE HOUSE 

WASHINGTON 



\'0 



October 6, 1972 



MEMORANDUM FOR: 

FROM: 
SUBJECT: 



CHUCK COLSON 
FRED MALEK 

BILL;iiv/9) MARUMOTO 

Weekly Activity Report of the 

Spanish Speaking 

Week of October 2-6, 1972 



The following action took place this week: 

1. Met with two of Senator Javits' top aides at a meeting 
arranged by Ray Hanzlik re miscellaneous Puerto Rican 
problenns. 

2. Discussed Romana Banuelos with Fred Fielding and Don Rogers 
re her continued involvement with her Mexican Food Connpany 
and bank. Fred is working d osely on this matter with the 
Treasury people. 

A 3. Met with Bill Rhatican and Carlos Conde on miscellaneous SS 
PR problems. 

\ A. Conde and I have been trying to arrange a photo session with the 
President and Ambassador Horacio Rivero for the last couple of 
weeks. It appears we will be unable to do it at this point with 
Rivero now stationed in his new post in Spain. /I f>p(J».r t ►^'^' Y ' ' ' 

• 5. Mailing to our SS constituency list the Department of Labor special 
issue on SS manpower progranns. 

6. Working with SER officials and Carlos Conde on a SER $18 million 
grant signing ceremony later this month in California with 
Secretary Hodgson. ' 



5687 



7. Rodriguez and I have been arranging for several Presidential 
telegrams during the past several months for various SS activities 
throughout the country. 

8. Our last SS appointees meeting before November 7th will be held 
next Thursday at the Blair House. Pat O'Donnell is arranging 
for a drop-by. 

9. Will be speaking tomorrow night at the State of Florida National 
Hispanic Finance Committee for the Re-Election of the President 
$100 a plate dinner at the Fontainebleau in Miami. They expect 
1000 people. 

\/ 10. Provided information on SS accomplishments under the Nixon 
Administration to HKW Under Secretary Veneman re his 
appearance on a New York Puerto Rican TV station arranged 
by Rodriguez. 

y 11. Coordinating a letter writing and editorial campaign re the 
Senate confirmation on Rudy Montejano to the ICC. 

12. Reviewed the list of SS candidates for the OMBE Blue Ribbon 
Panel to review the best minority businessman of the year. 

13. Tony Rodriguez discussed with Gil Chavez and Hank Diaz their 
role in the Spanish Speaking coalition cf HEW. The group is new 
and has already had discussions with Secretary Richardson and 
key personnel at HEW. 

14. Rodriguez met with Gil Flores. a leading Democrat from the 
State of Nevada, who wants to support the President. He will 
organize SS Democrats for Nixon in that area. 

15. Rodriguez is working with Roy Batchelor, OEO in getting 
surrogates to a conference in Kansas. These are all Demos who 
want to support the President. 

16. Rodriguez working through Bill Kenner, Senator Tower's office, 
in getting the Senator to participate in award signing ceremonies 

' in Dallas this month for two black and one Mexican American SBA 
grantees. 



5688 



17. Rodriguez assisted Paul Lavrakas in getting Tony Gallegos, 
National Chairman of the GI Forum to go on a European tour 
of military bases in Germany. 

18. Rodriguez met with Harry Dent to discuss assistance to SS 
groups in New Orleans. They want to have SS broadcasts in 

their area, but need FCC authorization and they are having a' 

problem obtaining it. 

19. Rodriguez working through Dave Wimer and Ed Aguirre in 
scheduling Secretary Hodgson's visit to Santa Clara County in 
California for a meeting with manpower leaders in that state 

" plus the opening of the largest SS job corps center. 

20. Rodriguez assisting B. Switzlsr, Special Assistant to Secretary 
Peterson, in identifying some of the "good guys" in California. 
The Secretary is receiving all types of requests from unknown 
SS groups. : " " ■ ^ 

21. Rodriguez attended an award signing ceremony of a SS contract 
given out by GSA to a Mrs. Olga Gomez. She is a local Republican. 
Participants were the Administrator, Art Sampson and Rodriguez. 

22. Rodriguez is working through Ed Aguirre in meeting Dick Amador, 
a leading Mexican American demo (he headed Latinos for Humphrey 
and Latinos for Kennedy in California) who wants to assist the 
President. 

23. Rodriguez met with Hector Vasquez and William Rodriguez of the 
Puerto Rican coalition to see how we can be of assistance in moving 
some of their proposals. 



24. Surrogates 



■s: 



\j a. Rodriguez met with Lou Churchville and Stanley Armstrong 
|J0 to map out the four state tour Phil Sanchez is starting the 

/^ 15th of this month. 

b. Rodriguez is working with Ed Aguirre in scheduling all SS 

supers in his region from here until the election. Fernando 
- - DeBaca is doing an outstanding jqb_in thia^area. — ~ 



F 



F 



F 



^ 



-> 



5689 



Rodriguez is assisting Manuel Gonzalez, Nixon's SS State 
Chairnnan in New York, in getting surrogates anl White House 
representation to thei r forthcoming fund raising affair en the 
20th. This is the best fund-raiser the Puerto Ricans are 
scheduling. 

d. Rodriguez working with Governor Ferre in seeing t>tat he 
makes at least two appearances on behalf of the President. 
Hopefully one will be the one mentioned above. 

e. Rodriguez is assisting Allen Hall in the scheduling of Ed Cox 
and Louis Nunez in the big Puerto Rican festivities in 

New York this Saturday. 

f. Rodriguez assisting Warren Hendricks in scheduling 
Robert Finch for the forthconning Mexican American Political 
Association convention in California. 

g. We have generated a number of invitations for some of the 
surrogates with weak schedules from here until the election, 
Rodriguez met with Henry Ramirez and reworked his 
personal schedule for speeches and appearances. He has been 
doing aneccellent job in the surrogate program but he wanted 
some direction for this "key time. " 

5. The Departnaent of Labor's special edition of Manpower Magazine 
featuring the Spanish Speaking is out. Copies have been delivered 
to the Cabinet Committee and other sources for mailing. 

26. The Echeverria-film is completed and Conde has been working with 
Hanzlik and me to secure funds to pay for it. USIA source dried 
up and will buy film for only $5, 000. Therefore must seek other 
sources. 

7-7- Jj>vp_raj_Spd mnnpy for the SS appointees brochure which was 
produced by the Cabinet Committee which cannot publish it for 
lack of funds. The plan last week was to sell the materials to 
' private source and let theni publish it which would be a rriatter 
of days. Armendariz working on this but he has not unsnarled 
this end yet, therefore brochure is stalled. 



5690 



■5- 



28. OE brochure was completed about three weeks ago but is moving 
slowly through GPO. Unable to give any assistance from this end 
because of decision not to involve White House in it. 

29. Conde edited Cor mailing by DOT a feature article on Urban Mass 
Administrator Carlos Villarreal. The feature with photo has 
been mailed to SS media and general readership newspapers in 
Texas, California in _ the Los Angeles area. 

,-v,,^ ^ 30. Mailing on White House Fellow Henry Cisneros has gone cut. 

'f^ All SS_me-dia_jwas_covex<l£i and the South Texas area was saturated. 

31. Mailing on President Nixon's trip to Rio Grande City has gone out. 
The story, with photo, was written in time copy, feature style to 
retain its usage. Also attached was text of President Nixon's 
remarks. Photos went to selected media only. 

32. Conde is publicizing the appointment of Admiral Riviro as 

U.S. Ambassador to Spain. Concentrated in the Puerto Rican 

j areas of the East and Midwest. Cabinet Committee did 35 Lnter- 

^_ I, I views with Spanish language stations. The Committee for the 

Vo/\S?-cVV • Re- Election of the President did a radio feed -Lg Cali fornia^ Conde 

; also provided it to USIA and Voice of America. Next week, we 

will do a White House mailing of a Rivero feature story with 
photo to SS media across the country. 

33. Conde working with Mrs. Banuelos public affairs program again. 
She dismissed the PIO we had hired for her because of dissatis- 
faction and other problems. 



^ 



34. Conde worked with Advanceman Allan Hall on the appearance of 
Ed Cox at Columbus Day Parade in New York. Louis Nunez cf ' 
Civil Rights Commission as the highest ranking Puerto Rican 
in the Administration will join Cox on the reviewing stand. Pro- 
vided background and speech rraterial to Ed Cox's speechwriter. 

35. Conde met with Carlos Villarreal's new public affairs officer to 
diBcuss media plans for Villarreal in October and to brief him 
on tho type c£ coverage wc seek. 



/ 



5691 



3i6. Conde working with Dr. Rene Cardenas, producer of bi-lingual 
educational television program. in California, and Stan Pottinger 
on press activity in Los Angeles on October l6th to announce- 
ment Administration's $5 million commitment to bi-lingual 
education through the television series. Secretary Richardson 
is expected to be there. Cardenas is arranging for celebrities 
such as Ricardo Montalban, Fernando Rey, Trini Lopez, etc. 
to be present. Cardenas' artistic staff is preparing a good 
media visual. Cardenas will give Conde the scenario by midwef 

37. Conde working with Jolin Leslie of Department of Labor on medi 
event to announce $18 million contract to SER for job training 
for SS. The event will be staged in Los Angeles October 23 or 
24. Secretary Hodgson will appear the preceding week in San Jc 
for Job Corps dedication. Conde is concentrating on California 
where we need the biggest thrust. 



y. 



38. Conde discussed w/ Eugene Cope, counsel for USIA, the legal 
aspects of the Echeverria film. 

39. Arn-iendariz and Conde did interview for National Catholic Repoi 
a weekly newspaper distributed nationwide to Catholic faith. T? 
interview concerned President Nixon and the SS. Due for public 
tion this week. 

40. Conde arranged an interview with Armendariz for an editorial 
■ column for Congressional Editorial Research, Congressional 

Quarterly. The writer is an Administration friendly. Alex did 
the interview and Conde provided materials. The column due 
to be mailed to about 300 newspapers across the country next we 



Coiide provided a list of SS media for Ed Blecksmith who is coor 
ting White House press briefing for Ethnic Press, "^o C Lii't 



42. Conde did second week monitoring of newspapers In New Mexico 
and Arizona for Herb Klein's press status book. 

43. Roy Chalk, owner and publisher of El Diarlo, largest Spanish 
r^ language newspaper in New York and the nation wants to meet 
I with Herb Klein. He favors President Nixon and possibilities 

that El Diario might endorse the President. 

cc: Ray Hanzlik •''Si ex Armendariz 

Carlos Conde Tony Rodriguez 

Henry Ramirez Bill Rhatican 
Tom Korologos Dan Kingsley 
Rob Davison ' 



Mr.MOI^ANnL'M 



5692 



ExrilBiT No. 262-60 



Tin; wiiiTi". iioi'si". 

WASIIJNCTON 

ADMINISTRATIVE- CONFIDENTIAL 






October 20, 1972 



MEMORANDUM FOR: 
/ 

FROM: 

SUBJECT: 



CHUCK COLSON 
FRED MALEK 



BIEJ/\^JO) MARUMOTO 

Weekly Activity Report of.tl- 

Spanish Speaking 

Week of October"l6-20, 1972 



The following action took place this week: 

1. Gave keynote address before the National Hispanic Finance 
Committee dinner in San Antonio honoring Roinana Banuelos. 
-,'500 in attendance and excellent press coverage. 

■ 2. Continuing to work on Rudy Montejano's confirmation. 

3. Spanish Speakmg appointees photo session postponed until 
Friday, October 27th at 3:00 p.m. , 

4. Discussed Nixon Administration accomplishments with 

■ Jiian Patlan, Executive Director of the Mexican Annerican 
. Unity Council in San Antonio. 

5. Working with Herman Gallegos, President of the Human 
Development Corporation of San Francisco re various SS progran 






5693 



6. Sent Governor Ferre of Puerto Rico re his speaking chgajc- 
mcnt before the Niilional Hispanic Finance Committee for tliC 
Re- Election of the President dinner in New York. 

7. Over the weekend spoke to the following grou-ps: 

a.. Northern California Chinese Aincricans for the 
Rc-Election of the President, San Francisco 

■ b. Northern California Japanese Ainericans for the 

Re-Elcction of the President, Hillsborough, California 

c. Southern California Japanese Americans for the 
Re-Election of the President^. Los Angeles 

d. Mexican Americans for the Re-Election of the 
President, Los Angeles. 

8. Personnel ' . . • 

a. Rodriguez working with John Freeinan, Treasury Department 
/ on candidates for the U.S. Executive Director of the Lnter- 

American Deyelopment Bank. 

b. Rodriguez assisting Carmen Maymi, the highest female 
Puerto Rican in government, in getting her permanent rating 
at DOL. ; She was teinporarily hired as a consultant. 

c. Rodriguez working with Armando Rodriguez, HEV/, in finding 
candidates for the Regional Director position in Dallas. The 
slot has hopefully been set aside for a Mexican American. 

^d. Rodriguez discussed v/ith Peter O'Donnell, Jr. , Texas, the 
^ names of Spanish Speaking in his area for political positTons 
within the state party. 



1 



:\/ 



5694 



9. Surrogates 

a. Rodriguez has set up a week of appearances for Ed Hidalgc 
in California starting the 23rd. This will be his first and 
only trip to that area in his present role. 

b. Rodriguez is assisting Nacho Lopez in getting our surrogat 
to major functions he has put together in California. 

10. Rodriguez working with OEO on one of their grantees, Mexicar. 
American Unity Council. MAU C is doing campaign work for 
McGovern in Texas and they have received 1. 3 million in grant 
from OEO this year. 

11. Rodriguez assisting Richard Amador, Democrat for Nixon, 
California, with materials and information. He heads or is 
connected with several comnnunity anti-poverty organizations 
in that state. 

12. Rodriguez met with Willie Vasqucz, La Causa Comun, to assis 
them with HEW. That agency-is slow with La Causa's projects 

13. Rodriguez assisting a group from Laredo (Tony Sanchez) in 
getting them some information on federal assistance for their 
newly' formed savings and loan. Sanchez is the former adminis 
trative assistant to Lt. Governor Ben Barnes, Texas. 

14. Rodriguez, met with Pete Villa, National President of LULAC, i 
discuES his activities in assisting us in the campaign. 

15. Conde worked with Lou Churchville on appointment of Stella C. 
Sandoval to OEO national advisory council OEO is handling 
distribution. Will do special mailing on saturation basis. 

16. -Conde worked with OMBE on the advisory' council meeting in 
Los Angeles on October 19-20 in Los Angeles. Public Infornnat 
Officer is doing special inailings -witli photos of SS members wit 
Secretary Peterson. Will.provide Conde with a group photo she 
and he will send to selected SS media list^ 



5695 



17. Coiido did Wliitc House mailinj; on SS media on DOL s 
$1.7 million project recently approved by DOL. 

18. Conde woi-king on two features on Rodriguez and himseU 
as first SS American to serve on Wliite Mouse staff. To be 
mailed to Texas media and selected SS media. Both features 
with pictures will go out next week. 

19. Conde provided background material to Chicago Tribune on 
Ambassador Uoracio Rivero. Sent to niagazine section and 

'. it wanted to expand on the release. 

•20. OEO's SS brochure is off the press and is being mailed to 
SS constituency. Because OEO has a list of only 6, 000, 
Conde njade arrangements for Cabinet Cominittee to provide 
them with their list for additional mailing. 

■ 21. Conde wo^-ked with DOL - PIO to plan 18 million grant signing 
ceremony in Los Angeles, Tuesday, October 24. The grant 
is to SER, a Mexican American inanpowcr training agency. 
Participating will be Labor Secretary Hodgson, Malcolm Lovclj 
Regional Director for Labor Ed Aguirre and Cabinet Committee 
Chairman. It will be held in San Clemente followed by a press 
conference by Secretary Hodgson. A reception and luncheon wi 
/ also be held. Involving as nnany of the SS. media as possible. 

22. Act ivity on the OE SS brochure ceased about four weeks ago. 
Nevertheless OE considers it valuable informational material 
and is proceeding on a regular schedule of its publication. Con 
has been informed that the brochure is scheduled off the press 
NovennbeT 7th. 

23. Because of money probleins, Nixon- Echeverria film has been 
shelved. The film was completed several weeks ago but still 
hasn't been paid for. Scttlei-nent date is November 15. 



.24. Conde checked speech material for Vice President Agnew. The 
material pertained to SS accomplishments in the Nixon Administ 

\ 



5696 



25. Concin provided Doiiicslic. Council wiLh materials- Qi SS 
accompUshiiicnts to be used in speech preparation lor • 
Domestic Council members, 

26. Condc working on speech for Bob Finch. 

27. Condc provided speech materials- to Herb Klein for use at 
reception- rally Tor Mexican American veterans in San Ani.o;uj 
on Veterans' Day. Also worked with SS coordinator in Texas 
on Klein news release. 

28. Contie working on news story of Mrs. Cardenas Cardwell, a 
Mexican American retired school teacher from Del Rio who 
has been appomted to President's Advisory Council for 
Disadvantaged School Children. Will do mailing to South-west 
states. 



_r 



29. Conde provided i-naterials and talking points to Walt Minnick 
John Ehrlichman staff for speech in New Mexico to high 
school students. 

30. Conde did weekly newspaper monitoring in Arizona and 
New Mexico for Herb Klein's press book. 



cc: Ray Hanzlik 

"i^rATex Armendariz 
Carlos Conde 
Henry Ramirez 
Tony Rodriguez 
Bill Rhatican 
Tom Korologos 
Dan Kingsley 
Rob Davison 



for i!ie R:;-c:ec?!cn 
of mIO Prccicleni- . 



CONFIDENTIAL 



5697 



Exhibit No. 262-62 



701 PfNNSTlVANIA AVENUt, N.W„ WflSHIN&ION, DC. 20006 I20J) 03].O»3O 



November 2, 1972 



M EMORAi.DUM FOR KEN COLE 
FROM: ALEX ARMENDARIZ ■ 
SUBJECT: LA RAZA UNIDA PROGRAMS 



As you know, Raza Unida leader Jose Angel Gutierrez was 
contacted to get a reading on his response to the forth- 
coming formation of an Advisory Committee to the Zavala 
County Health Corporation grant. Predictably, Gutierrez 
was infuriated by what he regards as Anglo supervision 
and control of a Mexican American program. It now appears 
that the announcement of the advisory body will bring 
a public condemnation from the Gutierrez troops, 
charging the President with insensitivity and manipulation 
of the Mexican American community. 

Needless to say, it is to the President's advantage to 
maintain the neutrality of La Raza Unida throughout the 
last week of the campaign. The attached list outlines sev- 
eral pet Gutierrez programs which have become enmeshed .._ . . 
in bureaucratic tieups and technical difficulties. In 
spite of the usual Gutierrez rhetoric, it's likely that 
Jose Angel would become considerably more conciliatory 
if some of these programs could be sprung loose within the 
next few days. As such action would mutually benefit the 
President and La Raza Unida, your assistance In this matter' 
will be appreciated. 



Enclosure 

cc : Fred Malek 

Frank Herringer 
Bill Marumoto 

CONFIDENTIAL 



24-650 O - 74 - 28 



5698 



TIXnCON WITH viviana saktiago 

From the R.iza Unlda point of view, tlie lollowing projects are three 
free from technical problems or rcsponslblity at the local level, and 
just need to be unsnarled at the national level. They are listed In 
order of priority. 

1 . CRYSTA L CITY NEIGHBORHOOD DEVELOP^^:NT PROGRAM 

All local responsibilities have been met on this project, I am 
told. Tlie only remaining technicality is the acquisition of a 
release of amcndatorles . 

1. TEX-R-38 3. TEX-R-75 

2. TEX-R-63 It. TEX-R-107 

The first two need a shove at the regional level. 

The last two have to be taken care of in Mr. Hyde's office (no 
first name was given) here in Washington. Tliere is apparently 
an Executive Order stating that programs Initiated before a 
certain date need a special administrative waver to be funded. 
The regional office has already signed off on these two 
amendatorles, and they are supposedly sitting on Hyde's desk 
at this moment. 

Lois Dean of HUD Is the Washington, D.C., Urban Renewal contact 
on this matter. 

2 . HO G FARM PROJECT IN CRYSTAL CITY 

This is a simple continuation of a supposedly successful program 
currently in operation in Crystal. The program was funded by OEO 
through Pete Mireles' office. All papers have been completed, 
but there is no word or communication of any kind from Fete 
Mireles, who has stopped returning phone calls from the Raza Unida. 

3. M UNICIPAL MANAGEMENT TRAINING PROGRAM FOR CRYSTAL CITY 

Again, all the paperwork from the local level has been completed 
on this project. The only remaining detail is the negotiation 
of the contract between the regional and state offices. 

Arangements have been made to administer this program through 
the University without Walls concept of the University of 
Michigan. This means that the student stipends must go through 
the HUD 701 State Planning Agency. This is where the contract 
negotiations have become hung up. A regional person was supposed 
to have tied the loose ends last week, but has not been heard 
from. The contact person at HUD Is Mr. Rogers (no first name 
was Kiven) . 

There Is also apparently so.ne question regarding matching of 
funds. Crystal City has arranged to complete its responsibility 
on this matter, as is detailed in the proposal. 



5699 



Exhibit No. 262-63 

THE WHITE HOUSE 

WASHINCTON 



30, 1973 



Dear Dan: 

Thank you for your letter of January 10, 
in which you recap the meeting between 
you, Ijcveo and n"iyseir. I thought it was 
a good meeting, one we should have had 
long a^;o. 

We rire trying to get your firn:; ai.d S3A 
together.as soon as possible to have your 
certification designation straighten out. I 
feel the results will be positive arid to your 
advantage. 

Next time you are in town, please call so 

we can get together and discuss matters of 

mutual concern. We are planning to close 

this office up within the next two weeks but 

you will be able to locate me thru Wm. Maruinoto's 

office. 

Sincerely, ' 



h 



vca 



A. F. Rodriguez 

Consultant to the White House 



-Mr. Daniel K. Trcvino . 
203 Louisiana Building 
Houston, Texas 77006 



5700 



Exhibit No. 263 



SMALL BUSINESS ADMINISTRATION 
POLICY 

NATIONAL 



9 



SECTION 8(A) PROGRAM 



p 60 ko 



Introduction 



1. Purpose . To set forth Agency policy governing the Section 8(a) 
Program, 

2. Personnel Concerned . All personnel who are directly or indirectly 
responsible for carrying out th^ Agency's Section 8(a) Program. 



Pi St ri but ion . A, plus chiefs and assistant chiefs, regional and 
district PMA divisions, all business development personnel in Central 
and field offices, and procurement center representatives. 



CONTENTS 



SECTION 8(A) PROGRAM 



Paragraph 



Page 



Pu rpose 5 

Eligibility 5 

Ownership and Control 6 

Business Planning 7 

Selection of Potential Contracts J 8 

Negotiation of Contracts 9 

Contract Administration 10 

Professional Services 10 

Program Completion 10 

Payment of Fees II 

Other SBA Programs 11 

Prior Agreements II 



AUTHORIZED BY 

Thomas S. Kleppe 



SBA FORM 988 (S-71) 



PREPARED BY 



Office of Business Development 

N.D./MANUAL REF. 



EFFECTIVE DATE 

8-15-73 

PACE 

1 



5701 



POLICY CONTINUATION SHEET 



P I 60 I ttO 



SECTION 8(A) PROGRAM 



1 . PURPOSE 

The authority of Section 8(a) of the Small Business Act will be used, 
to the fullest extent that available resources permit, to assist in 
the expansion and development of profit-oriented small business 
concerns owned and controlled by eligible disadvantaged persons. 
It is intended that conce-ns participating in the 8(a) Program 
will enhance their opportunities to achieve a competitive and 
profitable positio:, in the mart.etpl ace. It is not intended that 
8(a) contracts will support a concern i ndef^ fiTteJ y_but_ r'itTie r 
wiTl serve as "an adj anct~ro~assTsf~ in its development. Consequently, 
participation in the 8(a) Program must be in accordance with an 
acceptable business plan projecting the business developmental goals 
of the eligible firm together with the amount and duration of 8(a) 
assistance required. 

2. ELIGIBILITY 

To be considered for the 8(a) Program, a small business concern must 
be owned and controlled by a disadvantaged person- These are 
persons who have been deprived of the opportunity to develop and 
maintain a competitive position in the economy because of social 
or economic di:iHvantage of long standing. Such disadvantage may 
arise from cultural, social, or chronic economic circumstances 
or background or other similar cause. In many cases, such persons 
include but are not limited to members of the following minority 
groups: Black Americans; American Indians; Spanish-Americans; 
Oriental -Americans ; Eskimos and Aleuts. Vietnam era service 
in the Armed Forces may be a contributing factor in establishing 
social or economic disadvantage. 

Good character is an eligibility requirement. Determination of 
good character will be made in accordance with the provisions in 
ND I020-2B "Investigations." 



EFFECTIVE DATE 

8-15-T3 



SOP 00 22A EOT 



PAGE 

■ 5 



5702 



Amendment 5 

Sections I 24.8-1 and 124.8-2 



PART 124 
SBA RULES AND REGULATIONS 

Filing Instructions: File this Amendment 5 immediately following Amendment 4 of Part 124. 

This Amendment 5 revises the policies and procedures for implementation 
of the contracting authonty under Section 8(a) of the Small Business Act, as amended. 



{AmcH. 5] 

PART 124 — PROCUREMENT AND 
TECHNICAL ASSISTANCE 

Contracting 

Notice of proposed amendments to 
part 124 of chapter I of title 13 of the 
Code of Federal Regulations was pub- 
lished in the Federal Register on 
March 29. 1973. at 38 CFR part 8178. The 
Small Business Administration has care- 
fully considered the comments submitted 
on this proposal and decided to adopt the 
regulations substantially as proposed. 
The only changes are inlnor and tech- 
nical In nature. 

Accordingly, i>art 124 of chapter I of 
title 13 of the Code of Federal Regula- 
tions is amended by revising 55 124.8-1 
and 124.8-2 to read as follows: 
§124.8-1 The 8(A) Program. 

(a) General: — These regulations Im- 
plement section 8(a) of the SmaU Busi- 
ness Act (15 U.S.C. 637(a)) which au- 
thorizes SBA to enter into all tj'pes of 
contracts (including, but not limited to, 
supply, services, constnictlon. research 
and development) with other Govern- 
ment departments and agencies and ne- 
gotiate sul)contracts for the performance 
thereof: 

(b) Purpose. — It is the policy of SBA 
to use sucli authority to assist small busl-. 
ness concerns owned and controlled by' 
socially, or economically disadvantaged 
persons to achieve a competitive posi- 
tion in the market place. 

(c) Eligibility. — (1) Social or economic 
disadvantage. — An applicant concern 
mast be owried and controlled by one 
or more persons who have been deprived 
of the opportunity to develop and main- 
tain a competitive position in the econ- 
omy because of social or economic dis- 
advantage. Such disadvantage may arise 
from cultural, social, chronic economic 
circumstances -or backgiound, or other 
similar cause. Such persons Include, but 



are not limited to, black Americans, 
American Indians, Spaoiah-Amfericans, 
oriental Americans, Eskimos, and Aleuts, 
Vietnam-era service In the Armed Forces 
may be a contributing factor in estab- 
lishing social or economic disadvantage. 

(2) Ownership and control. — Disad- 
vantaged persons must presently own 
and control the concern except where a 
divestiture agreement or management 
contract, approved by the Associate Ad- 
ministrator for Procurement and Man- 
agement Assistance, temporarily vests 
ownership or control In non-dlsadvan- 
taged persons. 

(1) Proprietorships. — .An applicant 
concern may be a proprietorship. 

(ii) Partnerships. — The ownership of 
at least a 50-percent Interest In the part- 
nersiiip by disadvantaged persons will 
create a rebuttable presumption of own- 
ership and control. 

Uii) Corporations. — The ownership of 
at least 51 percent of each class of voting 
stock by disadvantarjed persons will cre- 
ate a rebuttable presumption of owner- 
shilp and controL 

(Iv) Divestiture agreements. — If an 
applicant concern Is not presently owned 
and/or controlled by disadvantaged per- 
sons, the persons exercising such owner- 
ship and/or control muqt execute a di- 
vestiture agreement which will provide 
for ownership and control vesting In dis- 
advantaged persons In accordance with 
the foregoing prescribed criteria within 
a reasonable period of time. AH divesti- 
ture agreements must be approved by the 
Associate Administrator for Procurement 
and Management As,'^istance. 

(v) Management contracts. — All man- 
agement contracts entered into by sec- 
tion 8(a) concerns must be approved by 
the Associate Administrator for Procure- 
ment and Management Assistance. 



Published Date: May 25, 1973 
Effective Date: May 25. 1973 
Cite: 38 F.R. 13729 



5703 



§ 124.8-2 Procedures. 

(a) Submission of business plans. — 
Applicants must submit a business plan. 
Including complete Information regard- 
ing the concern's qualifications, which 
will demonstrate that section 8(a) as- 
sistance will foster its participation in 
the economy as a self-sustaining, profit- 
oriented small business. In no event may 
the acceptance or approval of a business 
plan by SBA be construed as a commlt- 

ment by SBA to award a single contract, 

a continuing series of contracts or pro- 
vide any other assistance, contractual or 
otherwise. 

(b) Selection of potential contracts. — 
SBA will. In consultation and coopera- 
tion with other Government departments 
and agencies, select proposed procure- 
ments suitable for performance by sec- 
tion 8(a) concerns. In making these se- 
lections, among the factors given consid- 
eration will be the percentage of all sim- 
ilar contracts awarded under the section 
8(a) program over a relevant period of 
time. Issuance of prior public solicitation 
of the procurement under a small busi- 
ness set-aside, the probability that an 
eligible concern could obtain a competi- 
tive award of the contract, and the ex- 
ter.t to which other small concerns have 
historically been dependent upon the 
contract in cjuestion for a significant 
percentage of their sales. 

(c) Non-disndvantaged participants in 
a contract. — To insure that the purposes 
of the section 8la) program are being 
accomplished, applicant's will disclose 
the extent to which non-disadvantaged 
persons or firms will participate in the 
performance of profxised section 8(a) 
contracts. Section 8(a) contractors may 
not subcontract any portion of a section 
8(a) contract without tlie written con- 
sent of the SBA contracting officer. Joint 
venture agreements must be approved 
by the SEA Regional Director. 

(d) Negotiation of section 8(a) sub- 
contracts. — Section 8ia) subcontracts 
shall be negotiated with approved sec- 



tion 8(a) companies on a limited com- 
petitive basis to the extent feasible and 
practicable. Price will not be a factor 
in such competition. It is recognized that 
in some cases competition will be neither 
feasible nor practicable due to limited 
availability of qualified concerns, geo- 
graphic considerations, or other factors. 
Section 8(a) subcontracts shall be 
awarded at prices which are fair and 
reasoYiable to the Government emd to the 
subcontractor. 

(e) Program completion and termina- 
tion. — A section 8 (a) concern which has 
substantially achieved the objective of 
Its business plan will be notified that 
its participation in the program is com- 
pleted. The Judgment as to the comple- 
tion- of program participation will be 
made in the light of the purposes of the 
program. 

If the objectives and goals set forth 
In the business plan are not being met, 
the concern shall be informed what cor- 
rective measures are necessary. In cases 
where It is determined, in the judgment 
of SBA, that continued participation in 
the section 8(a) program will not further 
the program objectives, the concern will 
be notified that its participation in the 
program is terminated. Reasons which 
would indicate the necessity for program 
termination prior to completion of the 
business plan termination date are, 
among others: The imavailability of ap- 
propriate section 8(a) contracting sup- 
port; the inability of the section 8(a) 
cpncern to develop suitable commercial 
or competitive markets; inadequate 
management performance; and evidence 
of continued inadequate technical per- 
formance. 

(Catalog of Federal Domestic Assistance Pro- 
gram No. 59.009, Procurement Assistance to 
Small Business.) 

Effective date. This amendment shall 
become effective on May 25, 1973. 

Thomas S. Kleppe, 

Administrator. 



5704 



15 §636 



AID 'l'(J Kft^AlJ. l{USINi:SS 



Ch. MA 




or oJiti.'Hist rit'lits iipnlnst dnnviil of Eueli coUntcrnl In B.'iccllKd 



fi-tlnfe- rlRlilt, 
lloiilT, D.C. 



iiiiill liusiiiOKa Adiiili 
nssoiit of lo:in gUMni 



■iMirlly fcir ii"l- 
v;ihii'il Mt V.,\: 



iil.ilni- 
.Unii.t 



I nKTood r:ite lit which collaU'ia! 
uan could be withdrnwn by in-iu- 
oipal debtor, wns no dcfenso in action 
nij^'nst triinranlors to recover loan bvl- 
iuicc, uflej' baiilu'ijplcy of principal dilit- 
or, ill viuw of loan provision pcrniittlnfj 
pai-licipatini; bunU to conaont to wlili- 



(oi-iMinitlu 

lino on loan and bad mil rcsorlcd to 
Hiicli security before .snine Bnarantors of 
loan, \VM3 no dcfeuse In octiun ii;;alniit 
gnnrantors, in vio^v of fact tliai guaranty 
was iibsohito and did not ncpilre Ad- 
ministration to pursue or exbmi.st rights 
ajrainst borroiver b.'foro asserting righla 
uniUr giiaratily. Id. 



I< 



637. 



Additional powers — Procurement conlTacts; siilj-con- 

tracts to sniall-biisincss concerns 

(a) It sh.'ill be the duty of the Administration and it is empowered, 
whenever it determines such action is necessary — 

(1) to enter into contracts with the United States Government 
and any department, agency, or odiccr tliereof liaving ju-ocure- 
ment powers obligating tlie Administration to furni.sh articles, 
equipment, supplies, or materials to the Government. In any 
case in which the Administration certifies to any ofliccr of the 
Government liaving procurement pov/eis that the Administration 
is competent to perform any specific Government procurement 
contract to be let by any such ofiicer, such officer shall be au- 
thorized in his discretion to let such procurement contract to the 
Administration upon such terms and conditions as may be 
agreed upon between the Administration and the procurement 
ofi^lcer; and 

(2) to arrange for the performance of such contracts by ne- 
gotiating or otherwise letting subcontracts to small-business 
concerns or others for the manufacture, supply, or assembly of 
such articles, equipment, supplies, or materials, or parts there- 
of, or servicing or processing in connection therov/ith, or such 
management services as may be necessary to enable the Ad-j 
ministration to perform such contracts. 



iicnt niul [iriMK'rty dNjiosnl poi' 



dctcriiiinnti 



u 



(b) It shall also be the duty of the Administration ami it is em- 
powered, wlicncvcr it determines such action is necessary — 

(1) to provide technical and managerial aids to .'^niull-bur.incss 
concerns, by advising and counseling on matters in connection 
with Govtn-nineiit procurement and jn opei-ty dispos.,1 and on \H-\i- 
cies, principles, and practices of gooii management, including 
but not limited to cost accounting, methods of financing, Inisinoss 
insurance, accident conirol, wage incentives, and methods en- 
gineering, by coojierating and advising Vv'itii voluntary biisincsg, 
profesiioiial, educational, and other nonprofit oigatiizations, aa- 

186 



5705 



Exhibit No. 264 



Sl<l«enth & H Si.. N. W. 

WASHINGTON, D.C. 20006 



D 79941 




KARIZP! 


WM 716 


c* 


30.C0 


KAR12~ 


TAX 716 


c* 


1.50 


KAR13?! 


DlSl 716 


A* 


3.30 


MAR 13" 


DISI 716 


A* 


3.74 


KAR13" 


DISI 716 


A* 


1.32 


KAR13" 


OISI 716 


A* 


Z.92 


MAR 13? I 


DISl 716 


A* 


8.111 


HAR13~ f 


•HONE 716 


A* 


.ZO 






'VtoKfer - 7<& "piieiuUicit Ttatne in 't^oteti & TKotax Ihh^ 







5706 



tBMEST L. WILKINSON 
JOHN W. CRAOUN i.»c.«- 
OIXM A.WILKINSON 

ROacirr w. mARKER 

CKAI«LC» A.HOBBS 
ANOCLO A. lAOAROLA 
PAUL S.QUINN 
LCON T. KNAOCR 
■ICNARD A BAENEN 
JERRT c STRAUS 
HERBERT E NARKS 
PIERRE J. laTORCE 
FRANCES L.NOHN 
GORDON C.COFFMAN 



Exhibit No. 265 
wilkinson, cragun 5, barker 

LAW OFTICES 

THE OCTAGON BUILDING 

1735 NEW YORK AVENUE, N.W. 

WASHINGTON, O. C.ZOOOe 

(202) B33.eaoo 

CABLE AOOHESS 
"WILCBAR" 



November 6 , 1973 



30NALD C.OOBNLET 
HERBERT F DcSIMONE" 



.ANTHONY ROGERS 
fcTBICIA L. BROWN 
'ILLIAM R, LOFTUS 
TEPHEN R BELL 
HO MAS J. BACAS 
OSTER DEREIT2ES 



[t.^^^eot.mi^ 



fefc^. 



HAND DELIVER 



Honorable Sam J. Ervin, Jr. 
Chairman, Senate Select Committee 

on Presidential Campaign Activities 
Senate Office Building 
Washington, D.C. 20510 

Dear Mr. Chairman: 

Your staff counsel have requested me to 
obtain and submit to you an affidavit of the Honorable 
Maurice H. Stans concerning a proposed contribution 
to the Finance Committee to Re-Elect the President by 
a Mr. John Priestes. Mr. Stans is out of the city on 
prearranged matters and cannot be back this week. 

This request raises questions of Mr. Stans' 
fundamental rights in the case of U.S . v. Mitchell, et al . 
73 CR 439, in New York. We draw your attention to our 
letter of June 4, 1973, Exhibit No. 26 in your hearing 
record, and my statement appearing at pp. 680-687 of 
the printed Hearings. Mr. Stans is unwilling voluntarily 
to do anything which will contribute to publicity which 
may tend to deny him a right of fair trial. 

The present request places Mr. Stans in the 
same position as your direction on June 12, that Mr. 
Stans testify. If Mr. Stans fails to respond, it could 
infer guilty knowledge. If he adds to publicity, he 
could interfere with a fair trial. 

Therefore, this letter and the attached 
statement are submitted without any waiver on Mr. Stans' 
part and with the request that it be used by the Com- 
mittee without publicity, in order not to add to the 
already inflamed climate of publicity so far as fair 
trial is concerned. 



5707 



Honorable Sam J. Ervin, Jr. 
November 6, 1973 
Page Two 



HAND DELIVER 



Since your hearings involving Messrs. Priestes 
and Fernandez go forward tomorrow, it is not possible 
to get to you an affidavit. We have, instead, after 
telephone conferences with staff counsel discussed this 
matter in detail with Mr. Stans, checked Comm'ittee 
records and Mr. Stans has given us, by telephone, the 
enclosed statement of facts known to him. 

We enclose the statement for Committee use 
on the terms and conditions outlined above. 

Sincep^y yours, 

WH/g^NSON, CRAGUN & pARIjaR 




^ 



By: Robert W. Ba 




Enclosure 



cc: Honorable Maurice H. Stans 



5708 

STATEMENT OF MAURICE H. STANS 

November 6, 1973 

1 . This statement is made at the request 
of the staff of the Senate Committee on Presidential 
Campaign Activities for the purpose of furnishing it to 
that Committee in connection with the investigation of 
pending matters. It is furnished under conditions 
stated in the accompanying letter of counsel. 

2. Since February 15, 1972, I have been and now 
am the Chairman of the Finance Committee to Re-Elect 

the President and predecessor committees with offices 
at 1701 Pennsylvania Avenue, N.W., Washington, D.C. 

3. Ben Fernandez of Los Angeles, California, 
served as Chairman of the Hispanic Finance Committee to 
Re-Elect the President during the recent Presidential 
election campaign. 

4. On March 13, 1972, I met briefly in my of- 
fice with Mr. Fernandez and a potential contributor named 
John Priestes. Mr. Priestes was brought to ray office 
pursuant to a previous appointment by Mr. Fernandez. 



5709 



Mr. Fernandez had, on March 8, called Mr. Hugh W. Sloan, 
Jr., Treasurer of the Committee, and had told'him that 
my meeting with a potential contributor would be helpful. 
Mr. Sloan arranged the appointment through my secretary. 
Until the meeting, I did not know the name of the in- 
dividual with whom I was to meet or the circumstances of 
the proposed contribution, only that Mr. Fernandez felt 
that it would assist in finalizing the proposed contribu- 
tion if I were to meet with him and the contributor. 
5. At the meeting, Mr. Priestes offered a 
contribution to the campaign in the form of a check for 
$25,000, signed by another person (a Martin Woolin) and 
made payable, as I recall, to something like "Republican 
Party" or a similar phrase. It was not made payable to 
the Finance Committee to Re-Elect the President. We 
discussed that the payee of the check would have to be 
changed. While I do not recall discussing this point, 
normally to protect a contributor against unintended 
gift taxes we would have discussed designation of several 
committees to receive $3,000 each or a breakdown 
into several checks. I do not recall specifically 



5710 

- 3 - 

whether we discussed this with Mr. Priestes but I believe 
we did. 

6. After discussing the check, Mr. Priestes 
then proceeded to give me a file of newspaper clippings 
from the Miami Herald , dated in February of 1972, highly 
critical of Mr. Priestes. The gist of the articles was 
that Priestes had realized a large windfall profit on a 
FHA low cost housing program, primarily because of favors 
allegedly granted to him by a suspended FHA director in 
Miami named Pelski. The newspaper articles related that 
as a result, Priestes had moved from 19th to 2nd in home- 
builders in Dade County, Florida, in one year's time. The 
allegations also stated that Priestes had used a number of 
disguised corporations for the purpose of handling the 
contracts. Copies of the newspapers have been furnished 
the Committee staff. Mr. Priestes stated that he was an 
unfair victim of the Miami Herald and that he was fearful 
that action might be taken against him by HUD or FHA on 
the basis of the unfavorable publicity without his having 
an opportunity to defend himself. He said that he hoped 
that HUD would treat him fairly. 

7. I flipped through the file of newspaper 
clippings in his presence and promised to read them later. 
I also told him that I could not evaluate the situation 
without knowing FHA's attitude toward him and his 



5711 

- 4 - 

transactions; that I would have to check with HDD. I 
returned the check either to Fernandez or Priestes to 
hold until I had been able to do so. 

8. On the same day, I had a meeting with Mr. G. 
Richard Dunnells, Deputy Assistant Secretary of HUD. At 
that meeting, I asked Mr. Dunnells to check out Priestes' 
records with FHA and HUD and advise as soon as possible. 
Later on the same day at a scheduled meeting with Bill 
Gifford of the White House staff I discussed the Priestes 
visit and asked him to check such sources as were properly 
available to him and to let me know what he could learn 
from those sources about Priestes. 

9. On March 14, Dunnells wrote me a letter 
stating that HUD had suspended Priestes on March 13, and 
"any contact with Priestes at this time would, in our 
opinion, be highly inappropriate". So far as I can recall, 
at the time of my conversation with Priestes, no mention 
was made of the fact that he had been suspended. I 

made a notation on the letter received from Mr. Dunnells 
"Drop Contact". Attached as Exhibit 1 is a copy of 
Mr. Dunnell's report. 

10. On March 17th, I received a phone call from 
Gifford saying "Priestes is not clean; he uses dummy 
corporations, is unreliable and undesirable." 



5712 



11. On March 18th, I talked by telephone with 
Mr. Fernandez and reported this information to him and 
told him to terminate any contacts with Mr. Priestes. 
Mr. Fernandez told me that he would do so at once and 
would accept no contribution from him. 

12. To the best of my knowledge, the Finance 
Committee has never received a contribution from Mr. 
Priestes directly or indirectly. A special check by 
the Finance Committee staff of the Committee records 
discloses no contribution from Mr. Priestes. 

13. So far as I know, Mr. Fernandez acted 
carefully and properly in this matter, but in any event 

if Mr. Priestes had any idea of getting favors by offering 
a contribution it is obvious that not only did he not 
receive them but that he was totally and permanently 
rebuffed because of his record with FHA. 



Maurice H. Stans yj 



5713 



EXHIBIT 1 



' * r' • i '■ ■' '\/l-''--l'''^'">l '•"'■'-'T OF HOlir.ING AND lIKOAtJ D'J VLLORMGNT 

■; |j.'._,j ^■■' v/asim:ihoii. D. c. vein 



March 14, 1972 



V^ri: TO I'i/iURICE STANS 



Mr. PrioGtess is under investigation by both HUD and Justice 
regarding his dealings v.'ith IIUD's FIIA Coral Gables Office. 
Allegations of his seeding favoritism from FILA Director 
Pelslci have been made.- 

HUD has suspended Priestess from further dealings with FHA 
as of Monday, March 13, 1972. 

Allegations regarding Priestess and Pelslci have been highly 
publicized by Miami Press. 

Any contact v;ith Priestess at this time v.'ould, in our opinion, 
be highly inappropriate. • ' 

G. Ricliara'Djiir/clS-i.'" 
Deputy Assistant Secretary 



24-650 O - 74 - 29 



5714 



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WILKINSON, CRAGUN 5. BARKER 

LAW OFFICES 

ROSEL H. V 
THE OCTAGON BUILDING DONALD C 

HERBERT I 
1735 NEW YORK AVENUE, N.W. 

WASHINGTON.D. C 20008 



August 21, 1973 !;„'J', 

HAND CARRIED 



Honorable Sam J. Ervin, Jr. 
Chairman, Senate Select Committee on 

Presidential Election Activities 
Room 337 - Russell Building 
United States Senate 
Washington, D. C. 20510 

Dear Mr. Chairman: 

Because we believe you to be a fair person, we 
are writing you this letter. 

In the hearings before your Committee, you 
characterized Mi'. Stans ' testimony before the Committee 
in terms which seem to be highly critical. In view of 
the voluminous testimony adduced before your Committee, 
the passage of time and the many witnesses appearing since 
Mr. Stans' role was discussed, it may be that you have 
forgotten the record testimony on the subject matter 
concerned. We feel it necessary to call your attention 
to the fact that your assertions as to what Mr. Stans 
said before the Committee are in conflict in a number of 
instances with what he and others actually testified to. 

Also, during the testimony of the witnesses 
Ehrlichman, Kleindienst and Petersen, you engaged in 
colloquy with each of them concerning the fact that 
Mr. Stans had given his sworn testimony last year for 
use by the Watergate Grand Jury through the process of a 
deposition. You indicated on several occasions that had 
Mr. Stans come personally before the Grand Jury it would 
have learned "... what Mr. Stans testified before this 
Committee. ..." 



5715 



Honorable Sam J. Ervin, Jr. 
August 21, 1973 
Page Two 



As you know, Mr. Stans is to face trial in 
New York City soon in connection with the Vesco contri- 
bution. Your characterization of Mr. Stans and his 
testimony on nationwide television in our opinion was 
prejudicial, and it inevitably has a severe impact on 
that trial as well as on his general reputation for 
veracity . 

With respect to the deposition given by 
Mr. Stans, the important point is that his deposition 
of August 2, 1972 was given for the purpose of presentation 
to the Grand Jury and was read to the Grand Jury. When 
Mr. Stans gave the d