I PRESIDENTIAL CAMPAIGN ACTIVITIES OF 1972
7
^13
SENATE RESOLUTION 60
EXECUTIVE SESSION HEARINGS
•BEFORE THE
SELECT COMMITTEE ON
PRESIDENTIAL CAMPAIGN ACTIVITIES
OF THE
UNITED STATES SENATE
NINETY-THIRD CONGRESS
FIRST SESSION
WATERGATE AND RELATED ACTIVITIES
Milk Fund Investigation
WASHINGTON. D.C., NOVEMBER 13, 14, 15, 16, DECEMBER 4, AND 11. 1973
Book 14
Printed for the use of the
Select Committee on Presidential Campaign Activities
^
PRESIDENTIAL CAMPAIGN ACTIVITIES OF 1972
SENATE RESOLUTION 60
EXECUTIVE SESSION HEARINGS
BEFORE THE
SELECT COMMITTEE ON
PRESIDENTIAL CAMPAIGN ACTIVITIES
OF THE
UNITED STATES SENATE
NINETY-THIRD CONGRESS
FIRST SESSION
WATERGATE AND RELATED ACTIVITIES
Milk Fund Investigation
WASHINGTON, D.C., NOVEMBER 13, 14. 15, 16, DECEMBER 4. AND 11. 1973
Book 14
W
Printed for tbe use of the
Select Committee on Presidential Campaign Activities
U.S. GOVERNMENT PRINTING OFFICE
30-337 O WASHINGTON : 1074
For sale by the Superintendent of Documents, U.S. Government Printing Office
Washington, D.C. 20402 - Price $3.70
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. Thompson, Minoriti/ Counsel
RuFUS L. Edmisten, Depntp 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. Bellino, Chief Investigator
Marc Lackritz, Assistant Counsel
James C. Moore, Assistant Counsel
Ronald D. Rotunda, Assistant Counsel
W. Dennis Summers, Assistant Counsel
Alan S. Weitz, Assistant Counsel
Robert F. Muse, Jr., Assistant Counsel
Mark J. Biros, Assistant Counsel
Wayne H. Bishop, Chief Field Investigator
R. Scott Armstrono, Investigator
Michael J. Hershman. Investigator
Donald G. Sander.s, 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
^Executive session hearings released to the public after the filing
of the final report of the Senate Select Committee.3
(H)
CONTENTS
HEARING DAYS
Page
Tuesday, November 13, 1973 5859
Wednesday, November 14, 1973 5907
Thursday, November 15, 1973 6051
Friday, November 16, 1973 6105
Tuesday, December 4, 1973 6245
Tuesday, December 11, 1973 6293
CHRONOLOGICAL LIST OF WITNESSES
Tuesday, November 13, 1973
Hanman, Gary Edwin, senior vice president of Mid-America Dairymen,
Inc., accompanied by John C. Gage, counsel 5859
Wednesday, November 14, 1973
Lilly, Bob A., legislative director for Associated Milk Producers, Inc.,
accompanied by Anthony Nicholas, counsel 5907
Thursday, November 15, 1973
Connally, John B., former Secretary of the Treasury and former Governor
of Texas ; accompanied by William R. Eckhardt, counsel 6051
Friday, November 16, 1973
Lilly, Bob A., testimony resum.ed 6105
Tuesday, December 4, 1973
Harrison, Marion Edwyn, member of the former firm of Reeves and
Harrison, which was retained by AMPI 6246
Tuesday, December 11, 1973
Townsend, Tom, former special assistant to the general manager of AMPI,
presently director of special projects for Mid-America Dairymen, Inc. ;
accompanied by M, Randall Vanet, counsel 6293
AFFIDAVITS
John B. Connallv, April 11 and May 9, 1974 6102
Bob A. Lilly, April 23, 1974, v/ith attachment 6218
Alan S. Weitz, May 30, 1974, with attachments 6222
EXHIBITS SUBMITTED FOR THE RECORD
Hanman Exhibits
No. 1 — (5883) Letter to Gary Hanman from Marion Edwyn Harrison,
dated March 30, 1971, re names and addresses of
Republican committees -5901
Note. — Figures Sn parentheses Indicate page that exhibit was made part of the record.
{IH)
IV
Han MAN Exhibits — CJontinued
No. 2— (5888) Letter to ADEPT Committee from Gary Hanman,
dated September 13, 1971. Subject: Quarterly re- Paw
port 5903
No. 3 — (5890) Letter to Jake Jacobsen from Gary Hanman, dated
August 17, 1972, re foUowup letter 5905
Lilly Exhibits
No. 1 — (5920) Copy of a debit memo from Citizens National Bank to
TAPE, dated August 1, 1969, in the amount of
$ 100, 000 , 5990
No. 2 — (5921) Sheet of paper from a yellow pad with Isham's hand-
written notes, re attorneys' names, amounts of
money, and so forth 5991
No. 3 — (5923) Copy of pnjmissory note to Citizens National Bank,
Austin, Tex., and several renewals 5992
No. 4 — (5926) A security agreement dated December 17, 1969, in
amount of $100,000, with Bob A. Lilly as debtor... 5995
Nq. ,5 — (5926) A security agreement by TAPE for the benefit of Bob
A. Lilly for $100,000 and the collateral is stated as
Citizens National Bank Certificate of Deposit No.
219, for $100,000 issued to TAPE and signed by Bob
Isham as trustee 5997
No. 6 — (5935) A schedule compiled by Mr. Lilly's accountant of
various note transactions with various individuals 5999
No. 7 — (5935) Two checks with endorsements, drawn on account of
Jacobsen and Long. One check for $2,000, written to
Joe Long, the other for $3,000 to Jake Jacobsen.
Both are signed Eula Bulkley 6002
No. 8 — (5936) Two checks with endorsements drawn on account of
Jacobsen and Long; one check to Jake Jacobsen for
$2,875, the other to Joe R. Long for $2,125. Both are
signed Eula Bulkley . 6003
No. 9— (5938) Check and voucher for $10,000 from AMPI to Jacobsen
and Long. Also attached billing from Jacobsen and
Long with note attached to Bob Isham from Joe
Long, stating: "This is a special billing" 6004
No. 10 — (5938) Cover letter from Jacobsen and Long to AMPI, dated
April 21, 1970, with bilUug. Check and voucher for
payment also shown . 6007
No. 11 — (5939) Billing from Jacobsen and Long to AMPI dated July
16, 1970. Check and voucher for payment also
shown 6010
No. 12 — (5940) Cover letter from Jacobsen and Long to AMPI dated
August 31, 1970, with billing. Check and voucher for
paj'^ment also shown 6012
No. 13 — (5943) A series of documents relating to the invoice and pay-
ment in December 1969 to Mr. Van Dyk in the
amount of $18,050 6015
No. 14 — (5944) Check with endorsement to Bob A. Lilly signed by
Ted Van Dyk for $10,000, dated December 29,
1969 6018
No. 15— (5944) Letter dated March 10, 1970, from Ted Van Dyk to
Bob A. Lilly, re Lilly receiving a withholding slip
for $10,000 6019
No. 16— (5946) Cover letter to Bob Lilly from Ted Van Dyk, dated
August 27, 1970, with invoice, check, and voucher
in amount of $19,055.72, dated September 4, 1970. 6021
No. 17 — (5948) Typewritten memorandum for notes of Bob Lilly for
his own use, written on April 17, 1970 re conversa-
tion with Milt Semer having received check from
Ted Van Dyk as a contribution to Muskie cam-
paign for $5,000 6024
Note. — Figures in parentheses Indicate page that exhibit was made part of the record.
Lilly ExHierrs — Continued
No. 18 — (5950) Memorandum from Ted Van Dyk to Bob Lilly dated
September 14, 1970, relating to a $1,000 check to Page
" Maine for Muskie" 6025
No. 19— (5951) Letter of July 9. 1970, from Ted Van Dyk to Don
Nicoli pertaining to contributions to the Muskie
campaign; also making references to the milk pro-
gram. Two checks attached 6026
No. 20 — (5951) Letter fronri Milton Semer to David Parr re summary
of their telephone conversation about Muskie cam-
paign 6028
No. 21— (5951) Various handwritten notes, checks and correspondence
re contributions to the Muskie campaign 6029
No.' 22 — (5958) Note on Stuart Russell note paper re $5,000 cash con-
tribution for Page Belcher campaign funds 6041
No. 23 — (5964) Copy of check with endorsement shown made out to
cash for $5,000 and signed by Stuart H. Russell,
with handwritten notes at bottom written by Mr.
Nicholas 6042
No. 24 — (5965) Check with endorsement, dated October 5, 1971, made
out to cash for $4,000 and signed by Jane Hart 6043
No 25 — (5966) Check with endorsement dated August 27, 1970, made
out to Bob Lilly for $10,000, signed Stuart Russell
and endorsed by Bob Lilly and Joe Nigrelle 6044
No. 26 — (5972) Summary of notes of Bob Lilly re contributors with
dates and type of contribution, whether cash or
check, and where this money was used 6045
No. 27 — (5984) Check stubs numbered 398 through 409, all dated April
26, 1971, each for $2,500 with "Void"' written across
each. Only stubs 398-400 shown 6050
No. 28— (6119) Letter from Dr. Mehren to .John Butterbrodt, W. R.
Griffith, Melvin R. Besem.er, and Robert Bon-
necroy of the Committee for TAPE with attach-
ment of letter from Robert Strauss, chairman,
DNC, to Dr. Mehren 6186
No. 29 — (6119) Handwritten cover memorandum from George Mehren
dated March 29 with an attached letter of March 27.
R. M. "Dick" Herman to Dr. Mehren written on
stationery from the 1972 Republican National Con-
vention 6 189
No. 30 — (6121) Copies of 30 checks drawn on Citizens National Bank,
each dated April 1972, in the amount of $5,000,
signed by Dr. Mehren and L. E. Elrod with the
payee left blank and "Void" written across each
check. On the same page of each copy there is a
blank receipt io be used for each check. Only checks
Nos. 25 and 5i through 54 are shown; Nos. 26
through 50 have been omitted to avoid duplica-
tion 6191
No. 31 — (6148) Letter of agreement between Valentine, Sherman As-
sociates and AMPI, signed by Bob A. Lilly on
April 29, 1971, re Valentine, Sherman compiling
a master hie of farmers and farm-oriented families
with rural addresses for AMPI. Related corre-
spondence also shown 6193
No. 32 — (6164) Agreement between Valentine, Sherman Associates
and AMPI, signed by Harold S. Nelson with no
date, re compiling master file of farmers and farm-
oriented families for AMPI 6216
No. 33 — (6178) Handwritten notes of Bob Lilly of annual figures which
Stuart Russell said represented transfers of moneys
to Lilly or others 6217
Note. — Figures In parentheses indicate page that exhibit was made part of the record.
VI
CoNNALLY Exhibits
No. 1 — (6056) Record of phone calls and appointments for March 23, P»Be
1971 6092
No. 2 — (6056) Record of phone calls and appointments for March 16,
1972 6093
No. 3 — (6080) Record of appointments for August 2, 1972 6094
No. 4 — (6080) Letter to John Connally from Joseph J. Westwater, vice
president of Dairymen, Inc., dated August 15, 1972,
re needed changes in Federal programs 6095
No. 5 — (6080) Letter to John Connally from Gary Hanman, senior
vice president of Mid-America Dairymen, Inc., dated
August 17, 1972. This is a foUowup letter on the need
for Federal assistance to the dairy industry. Attempts
to restructure itself for increased demands for cheese.. 6099
Harrison Exhibits
No. 1 — (6252) Letter from Marion Harrison to Harold Nelson dated
November 2, 1970, re TAPE— contributions 6282
No. 2 — (6253) Letter to President Nixon from Patrick Hillings dated
December 16, 1970, re section 22, Tariff Commission
(milk) recommendations — Presidential Proclama-
tion 6285
No. 3 — (6264) Marion Harrison letter to Harold Nelson dated June
16, 1971, concerning contributions and enclosing
names and addresses of 25 committees for receiving
them 6287
TowNSEND Exhibits
No. 1 — (6296) Memorandum on Reeves & Harrison stationery to the
special counsel to the President, re milk import
quotas 6328
No. 2 — (6297) Memorandum to Harold Nelson and Dave Parr from
Tom Townsend, dated October 19, 1970, re visit of
Mr. Townsend with Mr. Harrison and Mr. Gal-
braith 6331
No. 3 — (6304) Price-support paper of Associated Dairymen, Inc.,
dated February 24, 1971--. 6332
No. 4 — (6305) 92d Congress telephone directory which has been
marked by Mr. Townsend for purpose of keeping
' track of "who was calling who" 6363
No. 5 — (6305) Handwritten list of legislative bills and their sponsors. 6369
No. 6 — (6315) Letter to David Parr from Gary Hanman dated
August 19, 1971, re enclosure of cover letter to Mur-
ray Chotiner. Also letter to Gary Hanman from
David Parr re instructions to mail $2,500 to each of
the 12 committees named. List of the committees are
enclosed 6372
Note. — Figures in parentheses indicate page that exhibit was made part of the record.
PRESIDENTIAL CAMPAIGN ACTIVITIES OF 1972
MILK FUND INVESTIGATION
TUESDAY, NOVEMBER 13, 1973
U.S. Senate,
Sei.£Ct Committee on
Presidential Campaign Activities,
W aslmigton^ D.C
The Select Committee met, pursuant to notice, at 1 :40 p.m., in
room G-334, Dirksen Senate Office Building.
Present : Senators Montoya and Weicker.
Also present: Alan Weitz, assistant majority counsel; and James
Leo Elder, minority staff investigator.
Senator Weicker. Would you stand and raise your right hand,
please. Do you swear the evidence you are about to give the committee
is the truth, the whole truth, and nothing but the truth, so help you
God'^
Mr. Hanman. I do.
Mr. Weitz. Mr. Hanman, for the record would you state your full
name and address ?
TESTIMONY OF GARY EBWTK HANMAN, ACCOMPANIED BY
JOHN G. GAGE, COUNSEL
Mr. Hanman. Yes. My name is Gary Edwin — E-d-w-i-n — Hanman.
My address is R.F.D. No, 2, Niangua — N-i-a-n-g-u-a — Mo.
Mr. Weitz. And I see you are accompanied by counsel, and would
he identify himself ?
Mr. Gage. John C. Gage, G-a-g-e, 1000 Bryant Building, Kansas
City, Mo. 64106. And I am counsel for Mr. Hanman individually and
for ADEPT, which are the initials for Agricultural and Dairy Edu-
cational Political Trust, and for Mid-America Dairymen, Inc.
Senator Weicker. Counsel for the committee, let me ask this ques-
tion.
Mr. W^eitz, would you at this time just for the mechanics, care to
have any exhibits entered and marked, identified as such, just so yon
can use them as you proceed without having to go through this?
Mr. Weitz. Yes, let us do that.
If in response to the subpena, if you have documents to produce
Mr. Gage. Here are the documents.
Now, before we proceed, there have been two subpenas served. One
was on Mr. Hanman, and had reference to ADEPT. Another was on
Mr. Hanman as senior vice presidimt of Mid- America Dairymen, Inc.
(5859)
5860
The latter siibpena by agreement was mailed to me, and I have it
here. And I am going to initial it and hand it back to the committee to
acknowledge sendee.
This is tlie group of documents Ave brought with us. We have not
quite had time to organize our bookkeeping sj^stem as well as we like,
and we may need a little time digging out copies when Mr. Hanman
is asked about some of them. Rut we have got copies here.
Mr. Weitz. Mr. Hanman. could you identify in at least n general
way what these documents or files represent?
Mr, Hanmax. It's my understanding that the documents presented
here are the documents rex]uested in the two subpenas.
Mr. Gage. With certain modifications, which Mr. Weitz and I
worked out.
Mr. Weitz. Or limitations, actually.
Mr. Gage. Limitations or, you might say, exceptions. Tlie subpena.
at least the second subpena was so broad it might have taken a truck
to bring all of the documents back relating to all contacts with the U.S.
Government and all of the milk marketing matters that Mid-America
Dairymen is engaged in, so that by discussion with Mr. Weitz those
documents were narrowed to documents relating to the 1971 milk price
support, increase.
Mr. Hanman. And the 1972 Presidential campaign,
Mr. Gage. Well, the 1972 Presidential campaign was covered, right.
Mr. Weitz, Could you identify by file, or are they marked ?
Perhaps we should enter on the record at least identification of
what each file contains without going through each individual docu-
ment.
Mr. Gage. Let me read the categories here. There are documents
relating to^ correspondence with or representation by Mr. Jake Jacob-
sen and Mr. Marion Harrison, and their firms, Jacobsen and Long,
and Reeves and Harrison.
There are documents relating to ADEPT, which further relate to
the 1972 Presidential campaign. There are documents with respect
to Mid-America Dairymen financial data.
Mr. Weitz. For what periods ?
Mr. Gage. For period 1968 through 1972. And here again, there
was some discussion between Mr. Weitz and myself to zero in on just
what was required. We have a list of legal fees and expenses paid.
We have a list of salaries and expenses paid to top management
personnel. We have an annual unaudited financial statement of
Mid-America Dairymen for each of those years. And then we
have another large group of documents relating to contacts
with persons in the administration, as opposed to contacts only with
persons in Congress, that had some reference to the 1971 increase in
price support level. This file does include copies of letters which
we received which Congressmen wrote to the President and the Secre-
tai-y of Agriculture, and because of our interest these letters were
mailed to Mid- America Dairymen.
But other than that, it does not include contacts with Congress-
men.
Mr. Weitz. Ts this the scope of your production ?
Do you have any other documents that you want to produce at
this time ?
5861
Mr. Gage. I believe that covers the general category.
Senator Weicker. Well, is there any reason why we cannot accept
these documents as characterized and described by counsel. Mr. Gage?
And he gave about five or six different categories there, as I under-
stand it. Is there any reason why thev cannot be marked and num-
bered corresponding to categories which he gave, and then receiA' ed ?
Mr. Wettz. T think that is adequate in terms of identification. I
was thinking more in terms of reviewing some documents. Perhaps
I will just have to do this at a later time, and should we have subse-
quent questions, have the witness return ?
Senator Weicker. Well, I think as the witness goes ahead and
gives testimony, if you want further identification when he refers
to a document, do it again. I think that would be the best way. But
at least this way we can receive the documents represented.
Mr. Weitz. And have them identified, at least bv catagories.
Senator Weicker, Have them identified as characterized by Mr.
Gage, and then if you want to have additional identification and
numbering, that can take place as the witness testifies.
Mr. Gage. I might also mention that these are Xeroxed copies,
including Xerox copies of checks. We have, I believe, all of the
originals" Avith us. But T discussed this with Mr. Weitz. We need these
originals back in the office.
Tf vou would like to verify, you can.
Mr. Weitz. For purposes of identification, the categories of docu-
ments produced : category No. 1 would be the folder containing the
Jacobseu and Harrison documents. Category No. 2 will be the ADEPT
documents.
Categorv No. 3 would be the financial data for Mid- America. And
cateiorort' No. 4 will be certain contacts with administration officials
concerning milk price supports.
Mr. Hanman, what is your present position with Mid-America?
Mr, Hanman. Senior corporate vice president.
Mr. Weitz. And how long have vou held that position?
Mr. Hanman. About a year. Prior to that, T had a different title,
but about the same job.
Mr. Weitz. What was your ti tie ?
Mr. Haxmax. Senior corporate executive vice president, I believe.
Mr. Weitz. And how long did you hold that title ?
Mr. Hanman. About 6 months prior to that. T think it was made
effective January of 1972, 1 believe.
Mr. Weitz. How long have vou been with Mid- America?
Mr. Hanman. Since it started in Julv of 1968.
Mr. Weitz. ^Vhen was ADEPT formed?
Mr. Hanman. ADEPT was formed in late 1970.
Mr. Weitz. Have vou ever held any official title with respex^t to
ADEPT?
Mr. Hanmax. Yes, Currently, I am chairmaji of the ADEPT com-
mittee.
Mr. Weitz. And how long have you held that position ?
Mr. Hanman. Since April of 1972. I believe that is when we reor-
ganized.
Mr. Weitz. Prior to that time, who was the official or officials re-
sponsible for ADEPT ?
5862
Mr. Hanman. Prior to that time, ADEPT was a political trust and
ADEPT operated — ^the trustee was William A. Delano. And there
was an ADEPT advisory committee, composed of six dairy farmers
who were contributoi-s to the trust, that advised Mr. Delano on his ac-
tivities as trustee.
I usually met with that committee.
Mr. Weitz. Were yo\i a member of that committee ?
Mr. Hanman. No, I was not.
Mr. Weitz. Were a 11 of the members of the committee either officers
or directors of Mid-A merica ?
Mr. Hanman. Yes.
Mr. Weitz. In what capacity did you meet with the committee? In
your capacity as an officer of Mid- America ?
Mr. Hanman. I met with them in the capacity as a contributor to
the ADEPT fund, and sort of served as a liaison man between Wil-
liam A. Delano, the trustee, and the committee.
Mr. Weitz. Did Mr. Delano usually meet with the committee?
Mr. Hanman. Usually, yes.
Mr. Weitz. Did you make recommendations to the committee from
time to time, or to Mr. Delano for political contributions ?
Mr. Hanman. Yes.
Mr. Weitz. In general, could you describe the way in which the
committee would operate ?
Or more specifically, who would have, in the normal course, responsi-
bility to decide whether or not certain political contributions would be
made?
Mr. Hanman. You are talking about prior to April 1, 1972?
Mr. Weitz. Yes.
Mr. Hanman. Well the final authority of course rested with the
trustee, William A. Delano. The Dairy Farmer Committee generally
reviewed various races, various candidates for office, reviewed their
positions on agricultural issues, on dairy issues, looked at their voting
records, and made recommendations relative to support for their
candidacy.
Mr. Weitz. In practice, who would you say made most of the rec-
ommendations, or had final approval in practice with regard to polit-
ical contributions ?
Mr. Hanman. I would say generally, well Mr. Delano of course had
the authority. He was a trustee. The original trust, as it was set up,
authorized him to have that sole and exclusive right to make this
decision.
I think generally he followed the recommendations of the commit-
tee, and I think generally the committee probably followed my recom-
mendations.
Mr. Weitz. Was there anyone else in the organization who the com-
mittee generally looked to for advice or consent for contributions,
outside of yourself ?
Mr. Hanman. Well you mean who else had input into it?
Mr. Weitz. Major input, in the sense that you did.
Mr. Hanman. Oh, I would say I did.
Mr. Weitz. All risfht.
5863
Could you tell us what role Mr. Nelson and Mr. Parr of Associated
Milk Producers played in the formation or consultation with regard
to the formation of x\DEPT ?
Mr. Hantman. I would say it was in an advisory capacity, in that
they were involved in a similar trust called TAPE that had started
before ADEPT. And so we looked to them for advice and counsel, and
others within the TAPE organization with respect to setting the
ADEPT program up.
Mr. Wbitz. Who might those others be?
For example, Mr. Isham ?
Mr. Hanman. Yes, I think Mr. Jacobsen, he would give us some
advice and counsel, John Gage gave us some advice and counsel. I think
even in the early days we had some advice and counsel from a DeVier
Pierson, a lawyer here in Washington.
Mr. Weitz. At that time, was Mr, Jacobsen retained as or act as
counsel, either for ADEPT or Mid- America ?
Mr. Hanman. No.
Mr. Weitz. Was Mr. Pierson in any way retained, or did he act as
counsel for Mid-America or ADEPT ?
Mr. Hanman. No.
Mr. Weitz. Were they at that time retained as counsel for Asso-
ciated Milk Producers ?
Mr. Hanman. Mr. Jacobsen was. And I am not sure of Mr. Pierson.
Mr. Weitz. What type of advice did Mr. Jac(>bsen give you ?
Mr. Hanman. Well, as I recall in the early days he advised the
various dairy farmers as to what a trust could do and what it could not
do, how you would go about setting one up. He would give us advice,
he gave Mid- Am some advice, or the board members of Mid- Am some
advice relative to what it could do as a corporation versus what could
be done by. a trust.
Mr. Weitz. Did Mr. Pierson give you similar advice, or did he coun-
sel you on some other area ?
Mr. Hanman. As I recall, DeVier's advice was along the lines of
compliance with the reporting requirement of the trust.
Mr, Weitz. Do you know whether, did you or do you know whether
anyone in your organization, either aSvSociated with ADEPT or Mid-
America, ever discussed with Mr. Jacobsen the question of either cor-
porate contributions by Mid- America or unreported political contri-
butions by ADEPT?
First of all, do you remember ever discussing such matters with Mr.
Jacobsen ?
Mr. Hanman. Yes; T am sure that his early advice was along the
lines that a corporation cannot make political contributions.
Mr. Weitz. Did he ever suggest by which way a corporation mi^ht be
able to use its resources for political contribution purposes without
apparently running afoul of the law ?
Mr. Hanman. What do you mean by resources?
Mr. Weitz Funds.
Mr. Hanman. Not that I recall,
Mr. Weitz. Or the funds of any of its employees or officers ?
Mr. Hanman. Not that I recall. As I recall, most of his advice was
along the lines of how you set up a political trust, so that you can be in
compliance with the law.
5864
Mr. Weitz. Did he ever suggest that certain funds that were col-
lected from dairy farmers by ADEPT or on behalf of ADEPT not be
reported so that they could be used to make unreported political con-
tributions ?
Mr. Hanman. Not to my knowledge.
Mr. Weitz. Did any of those activities ever take place with the use
of either ADEPT funds or Mid- America funds from the period, let
us say from the formation of ADEPT through 1972 ?
Mr. Hanman. Well first off, there were no political contributions
by Mid-Am. That is one of the reasons we felt the need for a politie-al
trust. So we wanted to set that up so that we would not run afoul of
the law.
Now, with respect to ADEPT'S reporting, to the best of my knowl-
edge, every contribution that we have made to a candidate for office
has been reported in accordance with the law, and the receipts of
ADEPT have been totally reported and accounted for.
Mr. Weitz. All right.
Now, you say ADEPT was formed some time in 1970, late 1970 1
think you said.
Do you recall the loan of $8,500 which TAPE made to ADEPT or
to the ti-ustee of ADEPT, to enable it to be formed and to make con-
tributions at the time of its inception ?
Mr. Hanman. Yes..
Mr. Weitz. How was that loan arranged ?
Mr. Hanman. I do not know the specific details. I believe in the
early days the predecessor to ADEPT was called Avery Associates,
prior to us settling on the name of ADEPT. And to the best of my rec-
ollection, the trustee of ADEPl', Mr. Delano, arranged for that loan
with the trustee of TAPE, Mr. Bob Isham.
Mr. Weitz. The loan was then to Avery Associates, or was it just
after Avery Associates became ADEPT ?
Mr. Hanman. I am not sure.
Mr. Weitz. But it was right around that period of time ?
Mr. Hanman. Eight around that same time, yes.
Mr. Weitz. If the loan was made in fact in mid-1970, would that
pinpoint the time more correctly, that ADEPT was formed.
Mr. Hanman. Yes. I believe the loan was in July 1970. And I do not
know what the exact date was when ADEPT was an active viable
trust.
Mr. Weitz. At that time, in the first 6 months or a year, could you
estimate the total amount of receipts, the approximate amount of re-
ceipts that were received or were expected to be received by ADEPT
f I'om its members ?
Mr. Hanman. For all of 1970 ?
Mr. Weitz. i^et us say for all of 1970, as a starter. It would be the
last 6 months of 1970, 1 take it.
Sir. Weitz. This does not show a summary though.
Mr. Hanman. Well, that's a blow by blow.
Mr. Weitz. I understand, but is there a summary figure?
Mr. Hansian. There is a sum somewhere.
Mr. Wettz. Do you run on a fiscal year '^
Mr. Hanman. Calendar year.
5865
Mr. Weitz. For the record, we are looking at a list of receipts, de-
posits, and disbui-sements, for ADEPT from the file marked "Finan-
cial Data of Mid- America."
Mr. Gage. That should have been in the ADEPT file.
Mr. Weitz. I'm sorry, of ADEPT.
Mr. Han MAN. There should be a summary in there for 1972.
Mr. Weitz. An approximate figure would suffice.
Mr. Hanman. Well, as cf January 1, 1972, we show a cash on hand
of $75,827.71.
Mr. Weitz. Of course that would reflect both receipts and disburse-
ment from that receipt, so it would not indicate — what I am after
really in some notion, for example, of a monthly or an annual level of
receipts in the first 6 months or a year or so.
Mr. Hanman. If I were to estimate, I would say during the year
1970 we would probably have taken in about S100,000. And I take that
from this summary which shows cash on hand as of January 1, 1972,
which shows $75,827.71, and we did make some expenditures during
this period. So this cash should have been in exce^ of what our receipts
were.
Mr. Weitz. When you say expenditures, would that include contri-
butions ?
Mr. Hanman. Yes. That's what I'm talking about,
Mr. Weit'z. We'll look through this later to see if we can locate the
specific figures, but that suffices for the present.
Mr. Gage. The record should be the best evidence, and I'm quite sure
they're in here.
Mr. Weitz. Of course.
Now, you say that your best estimate would be receipts of approxi-
mately $100,000 for 1970, or for the first full calendar year aftei the
beginning of ADEPT?
Mr. Hanman. Yes.
Mr. W^Eii'Z. Could you tell me why a loan was made of $8,500 at the
outset, rather than waiting for receipts to come in in order to begin
making contributions ?
Mr. Hanman. I think the reason was that the committee felt a need
to make a contribution at that time. In fact, I think they made two,
and they had signed authorizations or else checks in process which
would cover the loan ; and so they went ahead and negotiated the loan
and made the contributions.
Mr. Weitz. W^ere these contributions other than for a Presidential
candidate, these first two contributions you mentioned '?
Mr. Hanman. I think one of them maybe was, and one of them
wasn't.
Mr. Weitz. Could you identify the contribution to a Presidential
candidate? This would have bepn 1970?
Mr. Hanman. Yes. On Jnlv 10 a contribution was made to Hum-
phrey Volunteer Committee for $5,000.
Mr. Weitz. Wasn't Mr. Humnhrey running for election for Senator
that year ?
Mr, Hanman. He could have been.
Mr. Weitz. Or for reelection. I should say,
Mr. Hanman. It could have been.
5866
Mr. Weitz. So you're not sure in fact that was a Presidential
Mr. Hanman. No. I am not.
Now, there were two other contributions made, one on the 21st of
July to Maine for IMuskie. Tliat was probably — well. I don't know.
Let me back up. There was also on the same date another check made
out to Muskie Election Committee for $1,700, and I would assume that
one of those is probably for his Presidential effort and one for his re-
election effort; otherwise we wouldn't probably split it.
Mr. Weitz. I see. Did anyone from Associated Milk Producers or
TAPE encouraoe you. or su(><iest. or actually tell you to make any of
these first contributions in July of 1970?
Mr. Hanman. Well. I'm sure there were some discussions. Whether
they suf>:<rested or encouraored. I couldn't testify; but there were dis-
cussions I am sure.
Mr. Weitz. Do you recall whether, in fact, the loan was made in
order to make contributions that (hey were anxious to have you make?
Mr. Hanman. No. I couldn't testify to that.
Mr. Weitz. Now, throuirhout the rest of 1970, do you recall, well,
Avere there any other contributions, any other possible contributions
to Presidential candidates during 1970?
Mr. Hanman. I don't believe there were.
Mr. Weitz. All right.
Now, did Mid-America retain coiuisel and actively participate in
the effort to lower or eliminate im])ort quotas at the close of 1970 —
Federal import quotas for cei'tain dairy products?
Mr. Hanman. Well. I don't know that we retained any counsel for
that specific activity, but I am sui-e we Avere interested in it and made
several contacts with people in either Congress, or the Senate, or the
administration. To my knowledge we did not retain any specific legal
counsel on that.
Mr. Weitz. Was the law firm of Peeves & Harrison at that time
acting as counsel for Mid-America?
]\fr. Hanman. No.
Mr. Weitz. Have they ever acted as counsel for Mid-America ?
Mr. Hanman. Yes. They are now.
Mr. Weitz. At that time, they did not. When did they begin? Wien
were they first retained ?
INIr. Haniman. I belicA-e they were retained in either December or
January — December of 1972 or January 1973.
Mr. Weitz. T see.
Tn late 1970 did you or anyone connected with Mid-America con-
sult with either — first consult with members of the law fii-m of Peeves
Si Harrison in connection Avith the im])oi't quota question?
Mr. Hanman. Not to my knowledge, Ave didn't.
Mr. Weitz. Did you knoAv INIarion Harrison at that time?
Mr. Hanman. 1970? T think I AA'as introduced to Marion Harrison
in either late 1970 or earlv 1971.
Mr. Weitz. ^Y\m introduced you ?
]\Ir. Hanman. Probably somebodv in A]\IPT.
Mr. Weitz. Did you knoAv Mr. Hillings at that time. Pat Hillings
of that law firm?
Mr, Hanman. No. No, I did not.
5867
Mr. Weitz. Were you ever approached sometime around Decem-
ber of 1970, by anyone connected with or representing AMPI in con-
nection with a possible commitment of some substantial amount of
contributions over the next 2 years to the President's reelection?
Mr. Hanman. Not that T recall.
Mr. Weitz. Did you ever discuss with anyone at AMPI, such as
})erhaps Mr. Nelson or Mr. Parr or any of their counsel such as Mr.
Harrison or Mr. Hillings, a commitment or a possible com.mitment of
political contributions over a period of time to the President's re-
election ?
Mr. Hanman. Well, I'm sure we wouldn't have talked to Hillings
because I don't belie ^^e I knew Mr. Pollings. I could have talked with
Harrison relative to Mr. Nixon's reelection, and I'm positive — I can't
recall names of places and dates — but during this period of time I'm
sure there were discussions between Mid- Am and people in AMPI
relative to the job that the President was doing.
Mr. Weitz. Now, you said before that you were primarily — in prac-
tice primarily responsible for at least approving or consulting with
Mr. Delano concerning coiitributions by ADEPT.
Mr. Gage. May I interrupt just a minute. I don't think Mr. Han-
man's last answer was quite responsive to your question. As I recall
your question, it was whether any commitment was discussed. Wasn't
that it?
Mr. Weitz. Yes.
Mr. Hanman. No, there wasn't any commitment.
Mr. AVeitz. Well, leading back to that, did anyone discuss with you
their interest in making such a commitment, or at least whether or
not there was a commitment that they woidd, in fact, try to make sub-
stantial contrib)itions to the President's reelection?
Mr. Hanman. Well, again, I would have to say that there were dis-
cussions, I am sure, between people in AJNIPI, people in Mid- Am, me
included, relative to the job that the President was doing; and I'm
sure we had talked about possible contributions to this reelection ef-
fort. As to a commitment, I heard none from them,, and I made none
to themi.
Mr. Weitz. Did tliey ask you to make a commitment of any sort?
Mr. Hanman. Not tnat I recall.
Mr. Weitz. Did they discuss any amounts that they hoped they
could make, or you could make, or in fact the principal dairy co-ops
together could make over a period of time to the President's reelection ?
Mr. Hanman. No. I couldn't testify to tliat. In the early days of the
political action program tiieie were some discussions, I am sure, rela-
tive to what our potential might be as far as incbme, and as to how
you mijrht divide these incomes between congressional races, senatorial
laces, Presidential race.
Mr, Weitz. AVliat about the relative size of contributions between
the three co-ops, or I should say their political action trusts? For ex-
ample, did you ever discuss with any representatives of AMPI that if
they would make a contribution of so much, yours would be perhaps
half as much, or a certain percentage of their contribution to the
President's reelection?
Mr. Hanman. Well, I'm not sure whether it was on the President's
reelection, but there have been occasions when some individual running
for public office
5868
s ffo off the rec(
[Discussion oj9l tiie record.]
Senator Montoya. Now, I might ask you or your attorney if Mid-
America Dairymen, Inc., is a corporation in the ordinary sense of the
term; and if so, under what laws was it organized?
Mr. Hanman. I'll let my legal counsel answer that.
Senator Montoya. Yes.
Mr. Gage. Mid-America Dairymen is a corporation, incorporated
under the laws of the State of Kansas as a cooperative marketing
association under the Cooperative Marketing Act of Kansas. As such,
it is qualified to engage in business in Texas, Oklahoma, Arkansas,
Missouri, Illinois, Wisconsin, Iowa, Minnesota, South Dakota,
Nebraska.
Mr. Hanman. Wisconsin.
Mr. Gage. Wisconsin. And it has producer members in each of those
States.
Mr. Hanman. We do have a few members in Wyoming, and I believe
a few in Oklahoma, Did you mention
Mr. Gage. I think Mid-America is also qualified in Wyoming.
Mr. Hanman. Did you mention Texas?
Mr. Gage. Yes.
Senator Montoya. Have you had any court tests as to whether or
not under this law and the organization pursuant thereto, the organi-
zation is subject to the status of having complete entity to sue and to be
sued in the corporate name?
Mr. Gage. Yes, Senator, I think there is no question but that it is a
corporate entity and may sue and be used as such.
Senator Montoya. What about liability? Is it distributed to the
members, or is it the nature of the normal corporation?
Mr. Gage. It's in the nature of the normal corporation.
Senator Montoya. All right.
Mr. Weitz. And I understand in that regard, you have in iact,
received legal advice that under the prior law, the Corrupt Practices
Act, it would have been a violation of that law for Mid- America to
make political contributions of its corporate funds.
Mr. Hanman. That's right.
Senator Montoya. All right.
Mr. Weptz. Now, with regard to the activity, the time period at
the close of 1970, your testimony is that at no time do you recall any
discussions either with representatives of AMPI, with their counsel,
with regard to a commitment of funds of contributions to the Presi-
dent's reelection?
Mr. Hanman. With respect to commitment of a certain amount?
Mr. Weitz. Yes.
Mr. Hantvian. No.
Mr. Weitz, Or a commitment without a specific amount?
Mr. Hanman, Well, I don't know what you mean by a comm.itment.
Mr. Weitz. Did you ever bear them, or did they ever discuss in
your presence the fact that some commitment either was going to be
made or had in fact been made to certain representatives of the
administration?
Mr. Hanman. 1 did not know. I did not ever hear them say that
they had made a commitment. I am sure that in late 1970 and early
5869
1971, both of us were thinking in terms of contributing to Mr. Nixons'
reelection effort because we thought he was doing a hell of a good job.
Mr. Weitz. Did you discuss this with members of the ADEPT
committee?
Mr. Hanman. Yes.
Mr. Weitz. And in your discussions with them did you either recom-
mend or discuss a certain amount which you thought over a period,
perhaps of 2 years, would be made to the President's reelection?
Mr. Hanman. Not that 1 recall, any specific amount. As you know,
the records will show we made some contributions to committees. Later
on we made some more contributions to some other committees. And
I think we kind of played it by ear as we went along. But 1 ^on't know
of any early decision on amount.
Mr. Weitz. Now, turning to the decision, milk price support decision,
in March of 1971, before the first decision by the Secretary of Agri-
culture on March 12, were you involved in contacting members of
either the administration or Congress to lobby for higher price support
level ?
Mr. Hanman. Yes.
Mr. Weitz. Who in the Department of Agriculture did you contact
or meet with ?
Mr. Gage. Excuse me, Mr. Weitz, I think that you might give Mr.
Hanman a little more time on his answer^. There are some of these
questions that he might, in order to present a full, correct picture, want
tx) explain just a little more.
Mr. Weitz. I'm sorry if I gave the impression I was rushing the
witness.
Mr. Gage. All right.
Mr. Hanman. With respect to price supports
Mr. Weitz. Yes.
Mr. Hanman. Under the terms of the 1949 law, the Secretary of
Agriculture is required to make a decision sometime before April 1,
what level of milk prices he intends to support for the next marketing
year. Under the terms of that law, marketing year is April 1 through
March 31; and he has an administrative leeway between 75 and 90
percent of parity to set that level. He has to make that determination
annually, and so he starts generally in the Department of Agriculture
to gather data and facts on what he estimates production will be, what
thej' estimate consumption will be, what imports might be, what ex-
ports might be ; so that they can make an educated guess as to what
Government stocks might be, and what Government costs would be.
The now famous 1971 activity was preceded, I think we should men-
tion, by similar activity starting back ever since I can remember, to
1964 when I became involved in dairy co-ops ; because this was an an-
nual decision that had to be made.
So we had, starting in about 1964 or 1965, a concerted collective
activity on the part of all dairy co-ops to present the facts of milk pro-
duction and sales as we saw them. And I believe starting in 1968,
maybe 1967, we prepared some joint position papers on milk produc-
tion, sales, exports, imports. Government cost and so forth, to plead
our case, or if we thought we had a case, to present this case to any-
body that would listen to us.
10-331 G - 74 - 2
5870
Now, with respect to the 1971 decision, starting in late 1970, we
started making some estimates oui-selves on production and sales, be-
cause for the last 4 years prior to that time, USDA's statisticians had
been wrong. They were overestimating production in 1 year by as
much as 6.1 billion pounds; compare that to an annual production of
125 billion, sc they w^ere way off. They were high on the production
side.
So we started gathering data from our own sources, from the dairy
co-ops. We also got some professors from land-grant universities in-
volved, and they had done some studies for us — this was particularly
true in late 1970 — as to how they saw the picture, demand and supply,
and what they saw the costs to be on dairy farms as it would influence
total supply.
And we prepared a position paper in 1971. We tested our data with
about everybody in the Department that had an mput.
Senator Montoya. Do you have a copy of that ^
Mr. Hanman. Yes.
Senator Montoya. Would you submit it?
Mr. Weitz. These documents have been submitted en masse, but I
do appreciate bringing that up and identifying the separate docu-
ments. The record will show that this is a document entitled "The
Dairy Industry and the Public Interest: The Need for a Price Sup-
port Increase," It's dated February 24, 1971. It is signed by Associated
Dairymen, Inc., and it is located in the file marked "Contacts with
administration officials in re: price supports."
Mr, Hanman. You will also notice in here that there is a position
paper that was prepared exclusively by Mid-Am people, and most
of the data from this paper were incorporat-ed in this paper which
became a joint paper of Associated Dairymcri. And this pretty well
outlined our position on that price support issue.
We tested our data with, like I said, college professors. We tested
it with people in the Department of Agriculture. I am talking aj^out
the professional people^ people in Statistical Reporting Service, and
the Agricultural Marketing Service. We talked to people in the Com-
modity Credit Corporation Avhich buys surplus dairy products, to
se« what their stocks were and what their costs were, and this kind
of thing.
And finally the paper was presented by a group of us to Secretary
Hardin, and I believe Phil Campbell who was the Under Secretary
at the time prior to their first announcement in early March, pointing
out our position that we didn't think production was going to be as
high as they thought it was going to be : pointing out that we thought
sales were going to be better than they thought it was going to be ; and
that the picture was going to improve as far as governmental costs
were concerned.
Bear in mind also that price supports had been increased the year
before in 1970.
So we did — yes. in response to your ouestion, we did talk to the
people in the Departm.ent and make our views known that we wanted
90 percent of parity.
Mr. Weitz. For the record, the second d<>cument referred to is en-
titled "Justification for Increasing Price Supports to 90 Percent of
5871
Parity." It is dated February 17, 1971, and prepared by Lonnie
SpurgeoR, research economist for Mid- America Dairymen, Inc.
Mr. Hanman. Incidentally, he is a Ph. D. in agriculture economics.
Mr. Weitz. Did this analysis include recognition of problems with
regard to rising costs — feed costs particularly — of dairy farmers?
Mr. Hanman. Yes, right.
Mr. Weitz. Now, you say you met with Secretary Hardin and
Under Secretary Campbell sometime in early March before the first
decision was announced.
Mr. Hanman. Yes.
Mr. Weitz. What was their initial response ?
Mr. Hanman. I guess generally they were receptive. By receptive
I mean they were cordial. Bear in mind that we were presenting
some facts and data to them which was slightly contrary to what they
were getting from their own Department at the time, because we
were sajdng some of their numbers were wrong and ours were right,
and we were basing this on historical experience that we had that
tliey had been overestimating production supply response.
So I couldn't really tell you what their response was other than
they listened. They said they would consider it, and they expected to
have an early announcement.
One other time we criticized the administration for a late announce-
ment. In other words, the price changes under price support, if they
were going to make any, would be effective on April 1, and in order
to allow the industry to adjust to these new prices, we wanted some
leadtime.
Senator Montoya. Who met with Hardin and Campbell?
Mr. Hanman. Myself, Harold Nelson, Dave Parr.
Senator Montoya. Identify their associations.
Mr. Hanman. Myself, I was with Mid- America Dairymen. The last
two I mentioned were with Associated Milk Producers. I believe Joe
Westwater was there from Dairymen, Inc. Perhaps George Mehren,
I'm not sure if he
Senator Montoya. How do you spell that ?
Mr. Hanman. M-e-h-r-e-n.
Mr. Weitz. He was also affiliated with AMPI at the time?
Mr. Hanman. Yes; and an ex- Assistant Secretar^'^ of Agriculture
under Freeman.
Mr. Weitz. Do you feel that before the first decision these papers
and your presentations fairly presented the arguments and facts as
you understood them ?
Mr. Hanman. Oh, yes.
Mr. Weitz. Can you then explain why the first decision was that
there would be no increase in price support level ?
Mr. Hanman. At the time I couldn't, but I think since that time
inaybe I can shed some lisrht on it. Bear in mind that during this ac-
tivity I Avas spending quite a bit of time in Washington, and I was
getting some general feedback from newspeople and some congres-
sional sources maybe that the Department was looking favorably on
our i-equest — I'm talking about the Department of Agriculture.
And since that time and lust recently I haA^e noticed some press
stories where Secretary Hardin has said that they originally sent to the
White House a request to increase price supports. And I visited the
5872
otlier day with Bill Knox, K-n-o-x, who is editor of Ford's Dairy-
men— it's a national dairy magazine — who was with Secretary Hardm
in early March, Secretary Hardin made a speech at our annual meet-
ing, I believe, on March 4, in Kansas City. And Bill told me that during
his trip — he was with him in Des Moines, and they flew to Kansas City
for our meeting — but during that trip he got the impression from the
Secretary that he was favorably inclined to increasing price supports,
but that maybe he was being blocked somewhere in the White House
from doing it.
And so, Bill Knox reported that he had advised Secretary Hardin
that he heard a rumor that George Shultz, who was then Bureau of the
Budget Director, was not opposed to the price support increase. And
before he made his speech at our annual meeting, one of his aides called
Shultz' office to see whether or not in fact he was not opposed ; and he
reijponded back to Bill that somebody is playmg games with him. And,
he left the impression that Shuitz had not changed his mind.
Mr .Weitz. And that Shultz was m fact opposed ?
Mr. Hakman. Yes.
Mr. Weitz. Are you aware that Secretary Hardin has never said
publicly, to the best of my knowledge, whether or not Secretary Shultz
was opposed or in favor of the price support decision before it was
publicly announced on March 12 ?
Mr, Hanma?^. I am aware of it, and I probably was in error mention-
ing a newspaper report, because sometimes I get things a little jumbled
up. But I certainly did have the impression from this discussion with
Bill Knox, of Ford's Dairymen, who accompanied the Secretary, that
he was favorably inclined to increase.
Mr. Weitz. Now, after the first price support decision on March 12
and the second price support decision publicly announced on March 25,
do you know of any facts with regard to the problem of milk price
supports that were either made known — that you made known or were
made known to the Secretary which would have led him to change his
decision ?
Mr. Hanman. Well, I think after the decision was announced, a
group of our economists — and I believe Dr. Lonnie Spurgeon was one
of them — as well as some economists from the other dairy groups, DI
and AMPI, met with some of the people in the Department connected
with the data. And I'm not sure whether it was Dr. Paarlberg or who,
but we made another attempt after that decision was announced to
show them where their numbers were in error and to point out some
additional data to them.
The thing that was concerning us at the time was costs on the farm
were escalating rapidly, particularly feed costs; and we just couldn't
see how we were going to (r&t an increase in production w^ith those costs
going up at the farm, and with the number of milk cows that we knew
were there, and the replacement heifers: we just didn't see how we
were going to get an increase in milk production, which was what the
type of data coming out of USDA was ; that it was going to continue
to e:o up.
Mr. W^EiTZ. Was this information available to you, and did you in
fact utilize some of it before the 12th?
Or let me turn it around. Do you know of any new data that you
either have or could locate that was available to vou after the 12th that
was not available to you beforehand, and which you had not utilized?
5873
Mr= Hanman. Not that I recall.
Mr. Weitz. Hadn't feed costs in fact been increasing rapidly all
through the fall in 1970?
Didn't you and others bring that to the attention of the people in
the Department before the 12th ?
Mr. Hanman. I can't testify. I think this report would probably
show that.
Senator Montoya. Well, you would cover projection of feed costs
on the historical basis, wouldn't you, for the year?
Mr. Hanman. Generally that would be true, with an added input
based on what current supply was.
Senator Montoya. The trend was
Mr. Hanman. Yes.
Senator Montoya. Based on the trend.
Mr. Hanman. Yes. In other words, you might have an adequate
supply at the time and then you would come into a fall. This was
the fall of 1970, the winter of 1971 we are talking about. And if the
harvest was bad or if the stocks of grains — grain stocks were down and
demand was high, I think you could project at that time that feed
costs would escalate more than they would under a normal set of cir-
cumstances. But I don't know whether that was the case or not.
Senator Montoya. That's usually when the ingredients in a report
like that are presented to the Department of Agriculture in rebuttal
to their position, isn't it?
Mr. Hanman. Yes.
Mr. WErrz. Now, during
Senator Montoya. Just a minute.
Let's see if he did that.
Mr. Weitz. I'm sorry.
Mr. Hanman. This data goes through January of 1971, and I believe
those costs, I believe there would be more current data available at
the time they would make that decision.
Mr. Weitz. Do you have a copy of any such data that you may have
submitted to the Department ?
Mr. Hanman. No, I don't believe we do.
Senator Montoya. Just a minute.
Doesn't it stand to reason that when you bring your data up to date,
say up to January, which is the termination date of assembling data,
doesn't that take into consideration the projection of costs, at least
at the same rate as the previous year ?
Mr. Hanman. Yes, it would.
Senator Montoya. And you include that as the final ingredient for
consideration, do you not?
Mr. Hanman. Yes. Yes, you would.
Senator Montoya. And do you think you did that?
Mr. Hanman. I'm sure we did.
Senator Montoya. All right.
Now, on March 12, there was a price support decision rendered by
the Secretary of Agriculture, turning down any increase in price
supports. Correct?
Mr. Hanman. That is correct.
Senator Montoya. And then lie reversed himself on March 25?
Mr. Hanman. That is correct.
5874
Senator Montoya. Now, did you submit in writing, any additional
data which might either complement your January 1 figures on cost
of production, production, and imports, exports and consumption ?
Mr, Hanman. I don't believe we did, Senator.
Senator Montota. You didn't ?
Mr. Hanman. I don't believe we did.
Senator Montoya. So you just tried to prevail upon him to change
his mind, is that it?
Mr. Hanman. Between March 12 and March 25?
Senator Montoya. Yes.
Mr. Hanman. Well, actuallj'^, what we did, Senator, was that we
assumed at that time that, as far as the Secretary of Agriculture was
concerned, that we had been turned down. And so the only avenue we
had left, then, was to go to some of our friends in Congress and the
Senate, and to present the same data to them and try to convince them
the price supports should be increased.
And at that time, the only way we saw we could do that was by
amending the 1949 law which gave the administration the adminis
trative leeway to change price supports between 75 and 90 percent. So
we went back to some of our friends in Congress and the Senate and
we asked them to help us legislate a change in that 1949 law to move,
by legislation, the support from 75 to 85 percent of parity.
Senator Montoya, But the Congress didn't do that between March
4 and March 12, did it ?
Mr. Hanman. No. Between March 12 and March
Senator Montoya. I mean March 12 and March 25.
Mr. Hanman. No. Between that period of time, we had, I think,
about 130 U.S. Congressmen and about 29 Senators who had agreed
to sponsor or cosponsor or support this type of legislation.
Senator Montoya. Now, who devised the strategy that you go to
the Congress and get as many signatures on the legislation
Mr. Hanman. I guess all of us who were involved. I am talking
about myself, our board, Mid-Am board, the staff of AMPI, the staff
of DI. We are also members of the National Milk Producers Federation
here in Washington.
Senator Montoya. And was there any discussion during these
strategy sessions that one of the objectives to get this wide support in
the Congress was to try to preA^ail upon the administration to make an
administrative change in the decision ?
Mr. Hanman. Oh, yes. I am sure that was a part of the strategy.
Senator Montoya. All right.
Now, what other moves did you make with the executive department?
You went to the Secretary of xVgriculture ; you talked to Mr. Camp-
bell, also. Did you visit with anyone at the White House?
Mr. Hanman. Yes. On, I believe it was the 23d of March — you've
probably got the records on it — on the 23d of March, a group of us
met with the President.
Senator Mo>rTOYA. All right.
Who was in that group ?
Mr. Hanman. All right.
I am not sure I can name them all, but there was myself, and Mid-
Am's general manager, Wes Johnson, and our president, Bill Powell,
the three men from Mid-Am. There was Dave Parr and Harold Nel-
son, and I believe
5875
Senator Montota. Who are they with ?
Mr. Hanman. They are with AMPI.
Senator Montoya. All right.
Mr. Hanman. I believe their president, John Butterbrodt. There was
John Moser, who is the president of DI ; their executive director, they
call him, the same as our general manager, Paul Alagia. There was Paul
Affeldt, and William Eckles, who are the manager and president of
Pure Milk Products Cooperatives in Fond du Lac, Wis., were there,
too. I believe that's all I can recall from the dairy farmers' side who
were there.
On the administration side, the Pr^ident was there. The Secretary
of Agriculture was there, Hardin ; Under Secretary Phil Campbell ;
the Assistant Secretary, Richard Lyng; George Shultz was there; and
there were some aides. I think there were some aides from USDA and
some White House aides there, but I don't know who they were.
Mr. Weitz. Wasn't Secretary Connally also there?
Mr. Hanman. I don't believe he was.
Senator Montoya. Are you sure ?
Mr. Hanman. I am almost positive he wasn't there, sir.
Senator Montoya. "Wlio arranged for the meeting ?
Mr. Hanman. As I recall, the meeting was set up by AMPI people,
Associated Milk Producers.
Senator Montoya. You don't know who?
Mr. Hanman. No, I don't know who.
Senator Montoya. Was Secretary Connally in the picture as at-
torney or counselor ?
Mr. Hanman. I don't believe he was.
Senator Montoya. Was his name ever discussed ?
Mr. Hanman. I would assume that his name did come up in our dis-
cussions during strategy sessions, because some of the people in Texas
were friends of Secretary Connally.
Senator Montoya. Do you know whether he represented any of the
associations in Texas that were affiliated with the national association?
Mr. Hanman. Not to my knowledge.
Senator Montoya. But you did hear some discussion among the
Texas people ?
Mr. Hanman. Well, when I say that. Senator, you must remember
that between March 12 and March 25 the decision about all dairy
groups of any size throughout the country were in here, had brought
their people in, talking to Senators and Congressmen, whoever would
listen to us, working for a change in the price support. It was not to
be effective until the 1st of April, so we still had hopes that we could
get it changed.
I know in Mid-Am's case, we brought in dairy farmers from Con-
gressmen and Senators' home districts to visit with th^ir Senators and
Congressmen about the need for price support increase. I think -we
brought, maybe, in two different time frames, that we brought them
in to talk to people, and other dairj^ co-ops were doing the same thing.
Michigan Milk Producers' Land O'Lakes was in here on the other
side ; they were lobbying against it.
Senator Montoya. About what time was this ?
Mr. Hanman. This would be probably the first week after the
March 12 decision that we were back in here, whenever that would be.
5876
Senator Montoya. Did you have any indication from people in the
Department of Agriculture or from people in the White House that
you should do this to try to create a favorable atmosphere, in case
the administration would want to change the administrative decision
of the Secretary of Agriculture ?
Mr. Hanman. No; we had some advice and counsel from some
Congressmen and Senators to the effect that, "I will support you in your
effort, and this will add pressure to the administration if they want to
change their mind."
I think we have got some letters to that effect, sir.
Mr. Gage. There ^s a large number of letters that
Senator Montoya. From the Congressmen 'i
Mr. Gage. That the Congressmen wrote either to Secretary Hardin
or to the President.
Senator Montoya. The point I am trying to elicit from you is, did
you, in your strategy sessions, evolve a strategy which called for the
contacting of Congressmen and mustering of grassroots support from
the industry so as to create more or less an influence factor on the Presi-
dent prior to your meeting with the President on March 23, or when-
ever it was ?
Mr. Hanman. I would say, generally, our strategy was probably
twofold. I would not deny that part of the strategy was to put the
pressTire on the administration from all of us that were dealing with
the Congress and the Senate. But we fully intended — and that may
sound naive and unattainable — but we fully felt like we could pass
that legislation. We didn't know whether the President would veto
it or not. The chances are he would if he was dug in, and he wasn't
going to change it. He would probably veto it.
But we were getting advice and counsel from Congressmen : "let's
try it, let's go, I think we can pass it." And so I think probably our
strategy was twofold. One was that we could keep the pressure on them,
and the other thing was, well, you don't know until you try, we might
be able to pass it.
Senator Montoya. All right.
Wliat did you — who was the spokesman before the President?
Mr. Hanman. I think, generally — I think there was an opening
statement, maybe by Harold Nelson, and maybe a response by the
President. But from there on, I think all of us pretty well chimed in
in the discussion with the President on the price support issue.
Senator Montoya. And who was the coordinator for the President
in this, for the White House ?
Mr. Hanman. Well, as T recall, he did a lot of the talking himself,
the President himself. Secretary Hardin supported his position.
Senator Montoya. His previous position ?
Ml'. Hanman. Yes, he did. And Phil Campbell was there, and he
made some comments. And. as T recjill. Phi^ Campbell's commen+^s were
alonsr the lines that, we are fearful that « price support at tlvis time
would be a repeat of what Secretary Freeman did. I believe, in 1^62.
when he increased milk nrice supports, supply responded, and the
Government's costs went up.
And so there Avas nn exchange between the dairy farmers and tlieir
representatives and Campbell and Hardin and the PresidoTit. T don't
believe Secretary Shultz said anything.
5877
Pointing out how the things were different in 1971 than what they
were in 1962, we pointed out that we had some new authority under a
recently passed law — I don't know what the date was, 1960 or 1970 —
whereby we could put in class 1 base plans in our Federal milk orders,
which would design the supply to the sale. There was a technicjue
whereby milk producers would be assigned bases, and their production
would be tailored to the needs of the market, based on allocation of
bases for higher prices.
We pointed out we had new authority for promotion. The dairy in-
dustry for 40 years probably has been self-supporting — a generic-type
advertising program. And under the terms of this new legislation, we
could amend our Federal milk orders to where, if two-thirds of the pro-
ducers approved, all would pay to support this advertising program.
We thought we could get a lot more money from promotion which
would stimulate sales, we thought.
Senator Montoya. Increase the cost of production but also increase
the sales through advertising ?
Mr. Hanman. Yes. Yes, that's what we were doing, Senator, what
we were aiming at.
Senator Montoya. Yes.
Mr. Hanman. We also pointed out that the dairy industry, as far as
the production side, the dairy farmers themselves, was being restruc-
tured, starting in 1967 and 1968. The mergers were going on, whereby
the smaller co-ops were being merged into larger effective oo-ops, and
we could better tailor supply to market needs. We could put in bigger
and more efficient plants.
We were trying to make the case, I think, that the conditions at that
time, in 1971, were not the same as they were in 1962.
Senator Montoya. But that there was more merit in 1971 than there
was in
Mr. Hanman. 1962.
Senator Montoya. Yes.
Mr. Hanman. Yes, that's right.
Senator Montoya. All right.
What was the reaction of the President after he heard Hardin and
after he heard Campbell and heard your people ?
Mr. Hanman. I thought it was good. I came away
Senator Montoya. What did he indicate ?
Mr. Hanman. He didn't indicate anything, really, when we left, you
know, whether he was going to do anything ; but I was amazed at his
knowledge of the industry, I will say that. And as we would bring out
these new points, the restructuring of the new promotion, class 1 base,
he would say — ^he said on one occasion, I know, "Secretary Hardin, that
is different than what we had then,''
W^e did not in any way imply or leave the impression that he was
going to change it. But I would sa}^ we were favorably impressed with
his knowledge and with the reception that we got.
Senator Montoya. Had anyone else met with the President on behalf
of your group before this meeting ?
Mr. Hanman. Not to my knowledge. I understand that in late 1970
maybe, that there Avas a meeting with the President between Dave Parr
and Harold Nelson, but I couldn't testify that that meeting did take
place.
5878
Senator Montoya. Where did you hear that ?
Mr. Hanman. I believe I heard that from Mr. Parr.
Senator Montoya. That they had met with the President?
Mr. Hanman. They had met witli him before.
Senator Montoya. At the White House ?
Mr. Hanman. I don't know where it was, but he was supposed to
have been a guest speaker, I believe, at their 1970 annual meeting, and
he didn't come, so they met with him after that.
Senator Montoya. All right.
Now, when the March 25 decision was made, did the Secretary of
Agriculture niake new findings to coincide with the presentation that
you had made through this analysis ?
Mr. Hanman. 1 believe the announcement he made. Senator, was to
the effect that they had taken a look at cost data.
Senator Montoya. Y es.
Mr. Hanman. And based on their new analysis of cost data that they
had decided that they ought to increase it.
Now, let me esplain this, if I could. When we say increase, what we
are talking about is an increase in the per hundredweight support,
moving it from $4.66 to $4.92 to $4.93, 27 cents a hundredweight. But
as far as dairy farmers are concerned, net, that increase of 27 cents did
not increase their net increase, because all we were asking for, and ail
he granted, was a restoration, 85 percent of parity in 1971, that's the
same level that was set in 1970. So what this means, you see, is the
costs at the farm, all costs, as measured by parity, had increased by 27
cents per hundredweight in milk costs. And so really the increase was
no increase at all.
Senator Montoya. For the farmer ?
Mr. Hanman. For the farmer. \
Senator Montoya. Now, on the basis, using the figures which you
presented to him and which, presumably, he used in order to change
his earlier determination of March 12, now that you look back at the
figures that were submitted by the dairy industry, were your projec-
tions as to cost of production, consumption, and imports and exports
correctly reflected, or were you shoit ?
Mr. Hanman. No. We Avere right, in that we did export some butter ;
it was the first time we had been exporting butter in a long time.
Senator Montoya. No ; quantitatively, weie you
Mr. ILvnman, Yes. The Government costs were down, which was
the basic argument in all this that this would increase costs.
In here, if I can find that, is a table showing what production did,
milk production. And bear in mind that the milk production side of
this industry is a long term thing, and the dairy farmers don't get in
and get out very quick ; it's a long term trend.
The data that was announced yesterday by USDA indicate that
milk production is down 4.7 percent last month over the month before,
and it's decreasing in 1973 at an i ncreasing rate.
Senator Montoya. No; the point I want to make is, in order to sus-
tain a price support, 1971 to 1972, you had to show increased produc-
tion and increased consumption for 1972 ?
Mr. Hanman. That's right.
Senator Montoya. Now, did you have increased production ?
Mr, Hanman. Let me look.
5879
Senator Montoya, It doesn't necessarily mean you had increased
production because you had more people. But what about production ?
Mr. Hanman. Production, I believe, did come up but it did not come
up as total consumption did. So the tight situation, the supply versus
sales, was tighter in 1971, in 1971-72.
Senator Montoya. So actually, you did not have the sustaining in-
gredient for increasing the price support ?
Mr. Hanman. Yes; we did. My point is that even though production
may have responded some, sales went up more. And so from a point of
view of an adequate supply, long term adequate supply of milk, our
case, I think, was justified.
Senator Montoya. Your case has been sustained by the turn of events
and the statistical data that set in, is that right, during the course of
the year ?
Mr. Hanman. That's correct.
Mr. Weitz. Mr. Hanman, are you aware, for example, that the law
provides that the Secretary can increase price supports at any time
during the year ?
Mr. Hanman. Yes, sir.
Mr. Weitz. Are you also aware that the law provides that once he
increases them, he cannot further reduce them during the course of a
milk marketing year ?
Mr. Hanman. Yes; that is my understanding of the law,
Mr. Weitz. And yet, you have not indicated any additional data
which you provided within that 12-day period — that 13-day period —
that would have justified or provided any additional data to justify
a change in decision in so short a time ?
Mr. Hanman. I don't know that Mid-Am presented any data that
would change it, because it was our position before
Mr. Wefpz. That you had justified it before?
Mr. Hanman. Yes.
Mr. Weitz. But nonetheless, the Secretary, for whatever reason, had
decided not to increase milk price support?
Mr. Hanman. That's correct.
Mr. Weitz. All right.
Now, during this period, you indicated you were talking with — you
indicated you met, of course, with the President and certain assistants.
During this period, were you also meeting with other representatives
of the administration, other persons in the White House?
Mr. Hanman. In the White House ?
Mr. Weitz. Yes.
Do you recall meeting with anyone?
Mr. Hanman. No; I wasn't in on any meetings with anybody else.
Mr. Weitz. Do you know of any meetings or any communication be-
tween members of the White House and other dairy representatives
from A MPI, for example ?
Mr. Hanman. No ; not that I can testify to.
Mr. Weitz. During any of this period of time, did you have any
contact or were you aware of any contact between the dairy repre-
sentatives and, for example, Mr. Colson ?
Mr. Hanman. Not that I recall.
Mr. Weitz. How about Mr. Dent, Harry Dent?
Mr. Hanman. Not that I i-ecall.
5880
Mr. Weitz. Have you ever met either of those gentlemen?
Mr. Hanman. No.
Mr. Weitz. Did you have an occasion to discuss any of these mat-
ters with Murray Chotiner after he left the White House on March 6,
1971 ?
Mr. Hanman. I don't believe between that period of time I did.
Mr. Weitz. Were you aware of whether any other dairy representa-
tives were in contact with any of these people I mentioned including
Mr= Chotiner?
Mr. Hanman. I'm assuming — and I guess maybe you shouldn't
assume — I'm sure there were contacts because he was with the Harrison
firm.
Mr. Weitz. Which represented AMPI?
Mr. Hanman. Yes,
Mr. Weitz. During any of these discussions, or meetings, strategy
sessions, or otherwise m March of 1971, and particularly after the first
decision and before the second decision, were there any discussions
of political contributions by one or more of the trust arms of the
co-ops for the President's reelection?
Mr. Hanman. During this interim period ?
Mr. Weitz, Yes,
Mr. Hanman. Well, the only occasion when Mid-Am, or when
ADEPT would have had an occasion to discuss it was at the Re-
publican kickoif dinner that was held.
Was that the i:2d, 23dj or 24th '^ Somewhere in there.
Senator Montoya. In Chicago?
Mr. Hanman. No; it was here in Washington.
Mr. Weitz. Wasn't this a dinner the day after the meeting with the
President ?
Mr. Gage. The 24th, I think.
Mr. Hanman. OK. It may have been.
Anyway, on that occasion, the ADEPT committee, the six dairy
farmers did come to Washington. We did attend the Republican kick-
off dinner that night, and we did have long discussions that evening
relative to the price support issue, oar campaign of legisJation.
And I don't know any specifics, but I am sure contributions did
come up.
Mr. Weitz. Did you meet with them privately, or did at least some
of your meetings take place with members of the other co-ops?
Mr. Hanman. I would say probably both.
Mr. Weitz, Do you remember meeting particularly with Mr. Nelson
or Mr. Parr of AMPI?
Mr. Hanman. Yes. I recall that after we got back from the dinner
that evening, we sat up until the wee hours of the morning talking
about price support, talking about dairy farmers involvement in
government, and jUst general philosophizing.
Senator Montoya. What about contributions? You must have
Mr. Hanman. I'm sure we talked about contributions, but I have
no specific recollection as to what race or what candidate.
Senator Montoya. Well, did you discuss any quotas ?
Mr. Hanman. Quotas?
Senator Montoya. Yes; any amount that should be contributed to
the reelection campaign ?
5881
Mr. Hanman. I don't believe we did, sir.
Senator Montoya. Did you at any other time ?
Mr, Hanman. Yes ; I'm sure there were discussions about amounts of
contributions.
Senator Montoya. Give us the circumstances.
Mr. Hanman. Well, I think the data, the evidence that we brought
here would indicate that if
Senator Montoya. Refresh your memory from that data, and then
tell us just exactly what transpired with respect to setting up amounts
and collecting the amounts from whom, and where wore they to be
delivered?
Mr. Hanman. Well, in August of 1971, our committee indicated that
they wanted to make some contributions to Mr. Nixon's reelection
effort.
Senator Montoya. '\V1io did they indicate that to ?
Mr. Hanman. To me, and I got hold of — I believe— Dave Parr,
who said that the Marion Harrison firm could probably give me some
names of some committees, that there were committees being set up
to receive these funds. And I think I called Marion Harrison and got
some names of some committ-ees, or had some names of some com-
mittees sent to me.
Also involved during this period of time, our committee looked at
not only the Republican side of this reelection, or this Presidential
reelection, but we looked at the Democratic side as well. And our rec-
ords will show that ADEPT made during the primary, contributions
to Senator Muslrie for $6,000; Henrv Jackson, S4,500; Fred Harris,
$10,000, to Humphrey, $8,300; and |l6,600 to Wilbur Mills. All of
these were contributed to their efforts during the Presidential race.
Senator Montoya. During the primary ?
Mr. Hanman. Right, during the primary.
Senator Montoya. And how much did you contribute to Nixon
during the primary ?
Mr. Hanman. During the primary '?
Mr. Weitz. Well, to begin with, during 1971, for example.
Mr. Hanman. During 1971, the only — ^those August contributions,
I think, were the ones that went directly to committees specificallj
organized for Mr. Nixon's reelection effort. And I think after the pri-
maries were over with, we made some contributions tx> Mr. Nixon's
efforts at that time.
Senator Montoya. How much ?
Mr. Hanman. Well, I think we sent directly to the Committee To
Re-Elect, I believe it was $20,000, and we contributed $25,000 to the
Democrats for Nixon, and 1 think, in total, our contributions to Mr.
Nixon, including the primary and after the primary, about $60,300.
Senator Montoya. That's from your organization ?
Mr. Hanman. From ADEPT, yes.
Senator IMontoya. Yes.
Mr. Weitz. Let's go back for a minute to March and April of 1971.
Not August of 1971 or 1972.
Now, isn't it true that on March 24, the day of the dinner, you com-
mitted, on behalf of ADEPT, a contribution of $50,000 for tickets for
that dinner, or for other related contributions to committees. Repub-
lican National Committees ?
5882
Mr. Hanman. Well, I'm not sure whether it was that night or not,
but it was our intention to contribute to those six or seven or nine
committees $50,000; yes. I think we wound up giving $45,000, as I
recall ; like the Republican National Finance Commitfee, the Repub-
lican National Committee
Mr. Weitz. That would be shown in the record. They were duly
reported though, I understand.
When was that decision made, to the best of your recollection?
Mr. Hanman. Oh, T would say in earjy April.
Mr. Weitz. Wasn't the decision — let me step back for a minute.
In order to make that contribution of initially $45,000, and uiti-
mately $50,000, didn't you borrow $50,000: didn't ADEPT borrow
$50,000 from TAPE, tlie political arm of AMPI ?
Mr. Hanman. Well, we borrowed some money. Let me see if it was
$50,000. You might be right.
Mr. Weitz. All right.
Mr. Hanman. Yes; it was $50,000,
Mr. Weitz. On what date did you borrow that money ?
Mr. Hanman. On the 19th of April.
Mr. Weitz. That is the day on which the receipt would show there.
Are you aware, for example, that the check from TAPE is dated
April 5, 1971 ?
Mr. Hanman. It may be. I will take your word for it.
Mr. Weitz. No, I am asking whether you remember.
And are you aware of an opinion letter from the firm of Reeves and
Harrison to Bob Isham, the trustee for TAPE, dated, I believe,
March 30, 1971, indicating an opinion letter as to the legality of TAPE
making such a loan to ADEPT ?
Mr. Hanman. No ; I am not aware of that letter.
Mr. Weitz. Does that refresh your recollection, however, as to the
timing, let us say before March 30, 1971, the timing as to the decision
to borrow the money from TAPE and make the contribution to the
Republican National Committee?
Mr. Hanman. Wien was the opinion ?
Mr. Weitz. The opinion letter, let us say was March 30. 1971.
Now anytime, let us say between the 24th, which is the night of the
dinner, and the 30th, do you recall the decision being made somewhat
during that time to borrow the money and make the contribution?
Mr. Hanman. I would guess it would have been in March when we
made that decision.
Mr. Weitz. It would have been closer to the day of the dinner
than later?
Mr. Hanman. It probably would.
Mr. Weitz. How many people from Mid-America did attend the
dinner?
Mr. Hanman. From ADEPT?
Mr. Weitz. ADEPT or Mid-America.
Mr. Hanman. I believe there were seven of us. I am not sure,
but it was six, Jerry Farmer and myself.
Mr. Weitz. And the cost per ticket was how much? Do you
remember?
INIr. Hanman. I believe it was $1,000.
5883
Mr. Weitz. Was the entire $50,000 meant to also go for tickets,
or as a contribution related to the dinner, or was it separate from
the dinner?
Mr. Hanman. I think both, probably.
Mr. Weitz. Part of the fundraising campaign related to the din-
ner, would that be
Mr. Hanman. Probably.
Mr. Weitz. Now, in November of 1971-
Senator Montota. Let him refresh his memory on that.
Mr. Weitz. I am sorry.
Mr. Gage. There is a letter in here from Marion Harrison which
indicates the names of these committees, which as I recall from the
letter relates to the kickoff dinner. In other words, they were com-
mittees operating in connection with the dinner.
Mr. Hanman. I think here I do have a copy of this. This is a
memo I sent out to the ADEPT Committee under the date of Feb-
ruary 12. And attached is a reprint from the February 4 Congres-
sional Record file, and also a reprint of a letter from Lyn Stolbaum,
who is a representative in Washington, an ex-Congressman that I
sent to our people, to our ADEPT Committee, and it points out some
of the administrative decisions of the Nixon administration which
were favorable to the dairy industry. And while my recollection is
not specific as to time, this memo would indicate that even prior
to the March 30 meeting, we, in ADEPT, were thinking about contri-
butions to Mr. Nixon's reelection effort.
Mr. Weitz. Do you remember how much?
Mr. Hanman. No, I do not.
Mr. Weitz. And you do not remember discussing specific amounts
at that earlier time with representatives from the other dairy co-ops ?
Mr. Hanman. No, I do not.
Mr. Weitz. Let me mark the letter from Harrison to you, dated
March 30, 1971, as exhibit 1.
[Whereupon, the document referred to was marked Hanman
exhibit No. 1.*]
Mr. Weitz. Now, you spoke of the total amount. Let me ask you
about two other contributions. On November 2, 1971
Mr. Hanman. November 2, 1971?
Mr. Weitz. There were four contributions made of $2,500 each
to the following committees of ADEPT: Action Committee for the
Aged, Committee for Adequate Health Care, Committee for Citizens
Participation, and Committee for a Sound Economy,
Now, would they come in as established for some Presidential candi-
date or possible Presidential candidate ?
And if so, whom?
Mr. Hanman. These were $2,500 on November 2?
Mr. Weitz. That is right, for
Mr. Hanman. That was for Senator Harris.
Mr. Weitz. Was that contemplated as ijail of his Presidential
effort?
Mr. Hanman. Ye^.
Mr. Weitz. I see.
* Sec p. SiM)!.
5884
Now, on November 9, 1971 there was another $5,000 contribution,
and this was to the salute to the President dinner, and it is noted in
your report to the Clerk of the House as "dinner tickets" as opposed
to "contribution."
Do you recall that, or do you have anything that would refresh
your recollection as to
Mr. Hanman. No, I think that was another one of those dinner
deals that they have periodically.
Mr. Weitz. Would that have been related to the earlier $45,000
contribution, series of contributions?
Mr. Hanmax. I do not believe it was.
Mr. Weitz. But that also, obviously, was for Mr. Nixon's reelec-
tion eflFort?
Mr. Hanman. Yes.
Mr. Weitz. Now. if we add the $45,000 together with the $5,000,
that would be $50,000 for dinner, these two dinners.
Mr. Gage. I think we ought to get the documents about this
$45,000 out, and get Mr. Hanman to refresh his recollection on these.
Mr. Weitz. Fine. That would be April 1971.
May we take a recess for a minute?
[A brief recess was taken.]
Mr. Hanman. Looking here at this ADEPT file which you have,
at those earlier $45,000 contributions, none of the names on these
committees would indicate that any of this went to the President.
For example, Kick-Off '72 Republican Dinner, Republican Na-
tional Committee, Republican National Finance Committee, Repub-
lican National Finance Operations Committee, Republican National
Associates, Republican Victory Committee. These were all commit-
tees, either standing committees at the time, or they were set up — it
is my understanding — were set up in connection with that dinner.
The last one, Republican Congressional Candidate Conference.
That is why I think we have, when we summarized our 1972 Presi-
dential campaign contributions, that is why our summary shows
$60,300 that we know specifically went to Mr. Nixon's reelection
effort, the August group to those committees.
Mr. WErrz.'"Of $15,000?
Mr. Hanman. Right. The $20,000, I believe, was the amount that
went to the Committee to Re -Elect. It was to various State committees.
But they were committees to reelect, then the $25,000 that was con-
tributed to various State committees of Democrats for Nixon, So
our totals, if you take 1970 through 1972 for the Presidential election —
our totals would show a total contribution of $105,775, with $60,300
foing to Mr. Nixon, $16,600 going to Congressman Wilbur Mills,
8,325 to Humphrey, $10,000, Fred Harris, ^,500 to Scoop Jackson,
Senator Henry Jackson, and $6,050 to Edmund Muskie.
Mr. Weitz. Let me ask you a question about these committees. In
the accompanying letter to Mr, Harrison dated March 30, 1971, how
did you come to obtain these names — "arrange", I should say?
Obviously, they accompanied the letter.
How did you come to receive this letter and agree to these contri-
butions ?
Mr. Hanman. Again, I say we had early discussions as far as the
ADEPT was concerned with respect to contributions to the President.
5885
Also, with respect to contributions to various Members of Congress
and Senate. And some of these being national committees, we assumed
some of them probably would go to the President, because part of
these groups normally do fund Presidential races. Certainly, the Re-
publican National Committee ought to.
But again, we had no specific knowledge that that is where they
would go.
Mr. Weitz. Mr. Harrison was also the one, you indicated, who sent
you, and to whom you talked about the names of six committees in
August who received, who were purely committees for the reelection
of the President, established to receive dairy contributions, and to
which you actually did contribute $15,000.
Mr. Hanman. Well, I am not sure that they were established specif-
ically for dairy contributions. They were committees that were being
set up to receive contributions for jMr. Nixon's reelection effort. But
I do not know that they were exclusively for dairy contributions.
Mr. Weitz. Did Mr. Harrison ever talk to j'ou about or did you
ever receive names of committees from Mr. Harrison other than these
nine who were clearly for Republican candidates other than the
President ?
Mr. Hanman. Yes. I think on occasion we have.
Mr. Weitz. I see.
Did you discuss with him before receiving this list of committees
and this letter the purpose of these contributions, who would receive
them, and why you would be making the contributions at that time
and in these amounts ?
Mr. H.\NMAN. Generally, I think my recollection is that it would
go to the President's effort for reelection, and some of it would go for
Congressmen's and Senators' reelection efforts.
Mr. Weitz. So, to sunmiarize you cannot identify exactly how much
of this went to the President's reelection effort and how much went
to certain congressional candidates, but I take it your testimony is
that^ — at least your understanding is — that at least a portion of this
would also have been intended or gone for the President's reelection
effort?
Mr. Hanman. Yes.
Mr. Weitz, So in fact your summary of $105,775 is short by some
unidentified amount representing a portion of this $45,000?
Mr. Hanman. Yes, I think that would be true. But the only thing
we can specifically identify going to Presidential campaigns, and
that is what I thought your subpena was for, you know, the 1972
Presidential election, was this $105,775.
Mr. Weitz. I understand. But at no time, either before or after
making these contributions of $45,000 did you have a discussion with
anyone connected with AMPI about how much money they expected
you to make for the President's reelection effort ?
Mr. Hanman. Well, I am sure — I would assume — I think that the
contributions in August- — what, were $15,000?
Mr. Weitz. From ADEPT.
Mr. Hanman. Yes, I think I had some discussions with Dave Parr
on those. Now, I cannot recall what he indicated the TAPE, that
TAPE might contribute. But there were commimications, bear in
mind, between the ADEPT people and the TAPE people.
30-337 O - 74 - 3
5886
Mr. Weitz. At the time when you talked with Mr. Parr, had he indi-
cated how much they had already given in 1971 to the President's
reelection ?
Mr. Hanman. No, I do not believe he did.
Mr. Weitz. Did he ever mention to you, or did you hear him dis-
cuss, any overall commitment to the President's reelection by the
dairy co-ops?
Mr. Hanman. Not that I can testify, no.
Mr. Weitz. Do you know how many committees the six that you
received were a part of, the names of six committees that you received
in August of 1971 ?
Mr. Hanman. No, I do not. My recollection is that there were some
numbers beside some of them, were there not? Or was there? Where
is that list?
Mr. Gage. It is in the ADEPT file. I will find it.
Mr. Bu^NMAN. I may not be right, but it se-emed to me I remember
seeing some numbers beside them. I do not imagine it would mean any-
thing, anyway.
Senator Montoya. Is this it?
Mr, Hanman. The one I was looking for is not in there, Senator.
Senator Montoya. Here is the ADEPT list. Is that it ?
Mr. Hanman. That does not show the letter of transmitt-al that has
those names on it. There is a list I got from Marion Harrison.
Mr .Weitz. Well, perhaps we will come back to it, then.
Mr. Hanman. All right.
Mr. Weitz. You do not recall independently how many committees
were formed, of which these six were a portion t
Mr. Hanman. No, I do not.
Mr. Weitz. Were you ever informed whether you would be expected
to make another $2,500 contribution to each of the commitees to which
you contributed in August 1971 ?
Mr. Hanman. No.
Mr. Weitz. As I understand it, ADEPT contributed $2,500 each
to six committees?
Mr. Hanman. That is right.
Mr. Weitz. Was it ever discussed that you would contribute another
$2,500 to those committees at some later time?
Mr. Hanman. No, I do not believe so.
Mr. Weitz. Did you ever ask why six separate committees were sent
to you, each to receive $2,500 ?
Mr. Hanman. I think the committees that were sent to me, there were
more than six sent. Twelve Avere sent to me, and they numbered — ^there
were some numbers as I recall. They numbered from 52 through 63.
Name of the committees, the chairman, the treasurer, where it would go,
and I made the selection of the six, T believe.
Mr. Weitz. 'V\nio told you to select six out of those?
Mr. Hanman. I do not believe anybody did.
Mr. Weitz. How did you decide to select only six, or as many as
six?
Mr. Hanman. I really do not know why only six, and I really do not
know why $2,500, other than probably it was because of our financial
ability at the time, as far as the ADEPT Committee was concerned.
5887
how much money we had, what our plans were with respect to con-
tributions to other candidates other than the Presidential race.
Bear in mind, as you will notice when you look through the ADEPT
records, you will see that we have a lot of other races that we look at
and did look at, and there is a sheet in there for the year 1972 which
shows our total available funds of $344,000. And of that amount
$158,000 went to Democratic candidates and $104,000 went to Republi-
can candidates.
So within the ADEPT Committee we were weighing the whole
spectrum of government and political races, congressional races, sen-
atorial races, Governors' races. We had some requirements. We
thought we had some requirements in some individual States to make
contributions.
So, in other words, what I am saying is I think it was a judgment
decision of available funds at the time, and what we thought projected
our costs or our refjuirernents might be.
Mr. Weitz. Now, do you think it is coincidental that on the same
day that you made contributions of $2,500, each to 6 committees out
of 12 committees that had been sent to you, SPACE made contribu-
tions of $2,500 each to 12 committees in the amount of $30,000 total.
Were you aware of that, or did you discuss that with anybody?
Mr. Hanman. I was not aware of that, no.
Mr. Weitz. Mr. Parr did not discuss some coordinated effort ?
Mr. Hanman. SPACE ? -^
Mr. Weitz. By SPACE. But I am saying, Mr. Parr of AMPI did
not discuss at that time, either before or after he sent you the names of
these committees, a coordinated effort of contributions by the three
co-ops ?
Mr. Hanman. He was telling me that SPACE had given $30,000?
Mr. Weitz. Now, let me rephrase the question.
You said you were not aware that on the same day you made a
contribution of $15,000 to six committees which you had chosen out of
12 conmiittee names- sent to you, SPACE made a contribution of
$30,000 to 12 committees ?
Mr. Hanman. No, T was not aware of that; no. You are talking
about SPACE and not TAPE ?
Mr. Weitz. SPACE. TAPE was making other contributions. I am
talking about SPACE.
Mr. Hanman. No.
Mr. Weitz. "\Yliat I am asking you is, since this letter of transmittal
from Mr. Harrison to you. from Mr, Chotiner to you — the letter,
names of the 12 committees — my question is. did Mr. Parr of A^H*I
ever discuss with you, either before or after this time, some coordina-
tion or coordinated effort to make contributions from time to time by
the 3 co-ops ?
Mr. Hanman. Oh, yes. We talked about coordination of contribu-
tions from time to time.
Mr. Weitz. With some total amounts or regular amounts discussed?
Mr. Hanman. No, 1 think generally it was along this thing that we
would look at a race, some race, and we would say — the dairy farmer —
without making any specific reference to whether they were Mid-Am,
AMPI, or DI, dairy farmers should contribute so many dollars to this
particular candidate.
5888
And then we talked about how we were going to go about doing it.
There were some discussions, of course, during this period, to coordi-
nate, to make sure that wliat we were reading in a candidate, they were
also reading in a candidate, so that we did not get on opposite sides of
the fence, at least openly, not openly — at least consciously, is the way
I am saying it.
Now, in many instances our group and the TAPE group, and they
operated with a committee, as I understand it, and the SPACE group
does now operate with a committee, I think they did then. We may
make independent decisions about a particular race and we may wind
up supporting opposite people. But generally there was discussion
about races.
Mr. Weitz. But with regard to the Presidential campaign and the
funds going to the President's reelection, were there specific discussions
about coordinated contributions at specific times in a regular way to
these committees which were being provided by Mr. Harrison ?
Mr. Hanman. Not in a regular way, no.
Mr. Gage. Here is a document that is included that you might want
to inquire about.
Mr. Weitz. All right, thank you Mr. Gage. Let me mark this as
exhibit 2.
["V^Hiereupon, the document referred to was marked Hanman
exhibit No. 2.*]
Mr. Weitz. I am looking at a document dated September 13, 1971,
from Mr. Hanman to members of the ADEPT committee, and it is a
quarterly report. And it reads, the second paragraph reads as follows :
"The $15,000 contributions were a part of the continuing commitment
which we had with the administration." And then you go on to list
favorable administrative decisions-
Can you elaborate on what you meant by commitment ?
I may be being set up, but
Mr. Hanman. No, no, you were not.
Mr. Gage. I knew you would want to inquire about it after you looked
through the documents.
Mr. Hanman. He scorched me severely for using the word "commit-
ment," but my reason for making that statement was in communicating
with the ADEPT committee, and there is a memo again, February 12,
which would indicate that we had some earlier discussions about con-
tributions to Mr. Nixon's reelection effort. And we have talked, and
we did talk during this period involved, about making contributions
based on our availability of funds and our ability to do so. And I
think, as a general rule our committee, coming from the rural areas,
generally felt that we should support Mr. Nixon. They are basically
rural area people. They are farmers, of course, and they are basically
Republicans. And during this period of time we felt like we should
support Mr. Nixon's reelection effort.
I think it is significant that there were no contributions to Mc-
Govern, either during the primary or after the primary, even though
he comes from a farm State, because our people could not identify with
him. I think, generally, they could identify with these other Demo-
cratic candidates that we contributed to. They knew some of these
people themselves pei-sonally.
* See p. 5»03.
5889
Henry Jackson, as an example, has been a gnest speaker before the
National Milk Producers Federation before. He is identified as a friend
of the farmers and a friend of dairy farmers. And I think all of these
generally were.
So I think the use of the word "commitment" here was our internal
decision to make contributions to Mr, Nixon's reelection effort, based
on our ability at the time we had to make that decision to fund it.
Mr. Weitz. Now, you say "part of the continuing commitment."
At that time you had contributed at least $15,000 clearly eai-marked
for the President, perhaps some larger sum, depending on that portion
of the April contribntions that may have gone to the President.
At that point or at some later point, did you discuss the amounts
that in fact would be contributed to the President in addition to the
earlier contributions?
This is September?
Mr. Hanman. September 1971 ?
Mr. Weitz. Yes.
Mr. Hanmax. I think we had some later discussions in 1972 about
the contributions. We did, as you know, contribute $25,000 to the Demo-
crats for Nixon. And I think our records would show that at the end
of 1972 we pretty well cleaned out our fund, our available funds. I
think we wound up the year with just a small balance, maybe $4,000.
And that last, sort of clean-out effort of the available funds did go to
the Committee To Re-Elect, and I think that was $20,000. And that
was delivered pretty late in the campaign.
Mr. Weitz. November of 1972 ?
Mr. Hanman. Yes, right.
Mr. Weitz. Did there come a time — ht us move to 1972.
Did there come a time in 1972 or late 1971 when you discussed with
either representatives in the administration or other dairy represent-
atives, tlie advisability of stopping an}^ fui'ther contributions to nu-
merous committees, as you had done in 1971 ?
Mr. Hanman. I believe — and I could be wrong — that in April of
1972 the law was changed, whereby there was not a $5,000 limit to any
one committee. And so, I do not think we had that problem after that
law was changed.
Mr. Weitz. But before the law was changed, did you ever discuss
whether or not you should make additional contributions, small con-
tributions to numerous committees before the April 7 law ?
Mr. Hanman. To Mr. Nixon's reelection effort ?
Mr. Weitz. Yes, to Mr. Nixon's reelection effort.
Mr. Hanman. Not that I can recall.
Mr. Weitz, Did you ever meet with Mr. Kalmbach during 1972?
Mr. Hanman. No ; I do not even know ]\:Ir. Kalmbach.
Mr. Weitz. Did vou ever meet with. Loe Nunn on the Finance Com-
mittee To Re-Elect?
Mr, Hanman. No.
]Mr. Weitz. Did you, m 1972, meet v.ith Jake Jacobsen of the Demo-
crats for Nixon organization ?
Mr. Hanman. Yes.
Mr. Weitz. Could you tell us about those meetings or meeting?
]\Ir, Hanman. YvMl, we had one meeting. I do not know the date —
in Washington. I believe at the Madison Hotel with Mr. Jacobsen and
5890
John Connally. That was after he had left the administration. He
was out organizing this Democrats for Nixon. And I believe myself
and our manager Gene Baldi — we had changed managers in the in-
terim here. Wes Johnson had retired and Gene Baldi was our new
manager — and I believe Joe "West water and Ben Morgan from DT met
with
Mr. WF.rrz. All at the same meeting?
Mr. Hanman. Yes, I believe that the six of us were there.
And we talked in generalities, I think, to Mr. Connally about the
dairy situation.
Senator Montoya. What date was that ?
Mr. Haxmax. T have a letter, a followup letter ^ after the meeting, to
the Secretary, I think.
Mr. Gage. It is in the Harrison-Jacobsen correspondence.
Mr. Hanman. My guess would be that it would be mid-1972.
Well, the letter is dated August the 17th, so I would guess it would
be in early August when we met with Secretary Connally. Because
aftei- Ave met with him. I prepared sort of a sinnmation of the state
of the TTnion. as far as the dairy industry was concerned, and sent it
to him, and this is a cover letter that went along with that. It went to
Jake, because Mr. Jacobsen, at the time, was coordinating this Demo-
crats for Nixon effort with
Mr. Weitz. Let me mark this as exhibit 3.
[Whereupon, the document referred to was marked Hanman exhibit
No. H.^l
Mr. Weitz. Mr. Jacobsen arranged the meeting?
Mr. Hanman. Yes.
Senator Montoya. What did you discuss with the Secretary at tliat
meeting ?
Mr. Hanman. We discussed GATT for one thing. We discussed the
dairy situation, production, sales, costs. We discussed his Democrats
for Nixon. We indicated then that we would make a contribution to
the Democrats for Nixon effort.
Senator Montoya. Did you tell him how much ?
Mr. Hanman. Yes, I think we did ; $25,000.
Mr. Weitz. Did Dairymen, Inc., at that time also make a commit-
ment, or say how much they intended to contribute?
Mr. Hanman. I believe they made a commitment indicating they
would contribute $25,000.
Mr. Weitz. At the same time was there any mention as to whether
additional funds contributed either by ADEPT or SPACE to the
finance committee?
Mr. Hanman. To reelect?
Mr. Weitz. Yes.
Mr. Hanman. I do not believe so.
Mr. Weitz. So you only discussed contributions for Democrats for
Nixon ?
Mr. Hanman. Yes.
Senator Montoya. There were six people there ?
Mr. Hanman. Yes.
1 Spp Connally oxhihlt No. 5, p. 6090.
2 See p. 590f).
5891
Senator Montoya. How much was the total commitment by all of
them?
Mr. Hanman. Well, it would be $50,000.
Senator MoNTOYA. Each?
Mr. Hanman. No, I was there represontinfr ^he ADEPT commit-
tee. Mr. Baldi was there representing the Mid-America Dairymen.
Then, on the Dairymen, Inc., side'Joe Weswator w^as there discussing
their political action arm.
So there were really only two groups there. Each one committed
for $25,000.
Mr. Weitz. Was that the first time you met Secretary Connally?
Mr. Hanman, Yes, it was.
Mr. Weitz. Did you discuss any substantiye goyernmental policies
with the Secretary, in the sense of the price support level for 1972,
1973, or the import quota question ?
Mr. Hanman. My recollection is that we did discuss the price sup-
port issue, and we honed in specifically on the P'lanigan report, or an
administrative attitude relative to what position the administration
will take in our negotiation with the Common Market countries.
They were about to renegotiate the General Agreement on Tariff
and Trade, the GATT agreement. So Secretary Connally had been in
the international circle, so we talked to him abovit that.
Mr. Weitz. Did any of the representatives of Dairymen, Inc., or
SPACE, in any way mention or discuss the civil antitrust suit at that
time pending against them ?
Mr. Hanman. Not that I recall. We may have talked to Mr. Con-
nally about an attitude of the adm.inistration relative to co-ops in
general.
Mr. Weitz. An antitnist attitude ?
Mr. Hanman. Yes,
Mr. Weitz. By the Justice Department ?
Mr. Hanman. Yes. We felt then, and T think we still feel that there
are some people in the Justice Department that are anticooperative.
And I would guess we talked to him about it, because that is one of the
key issues that still bothers us.
Mr. Weitz. Did he indicate in any way he would talk to anyone else
about these problems, such as Mr. Mitchell ?
Mr. Hanman. No, I do not believe he did.
Mr. Weitz. Or anyone in the, administration at that time?
Mr. Hanman. I do not believe he committed to do anything at the
meeting. I do not believe he did.
Mr. Weitz. Did you understand at a later time that he, in fact,
did contact anyone on your behalf, such as Mr. Flanigan or anyone
else?
Mr. Hanman, No, not that I recall.
Senator Montoya. Why were you talking to him ?
Mr. Hanman. Where?
Senator Montoya, Why were you talking to him ?
Mr. Hanman. We were talking to him because he was ex-Secretary
of the Treasury. He did have an understanding or a working knowl-
edge of the administration. We were trying to get a feeling from him
as to whether or not some of the impressions we were getting were,
in fact, what the administration's attitude was, that being, are they g-
5892
ing to trade off the dairy farmers in order to get grain exports and
general agreements on tariff trade?
Are there really within the Justice Department people that are
mounting a movement to destroy dairy co-ops and co-ops in general ?
I think we were just generally trying to get impressions from him.
Senator Montoya. Why were you trying to get impressions from
him?
What expertise would he have in that area if he was Secretary of
the Treasury ?
Mr. Hanman. Probably no expertise other than what he had picked
up from other people in the administration.
Senator Montoya. Why would you tell him at that meeting that you
would contribute $50,000?
Mr. Hanman. Well, again, I think our group wanted to contribute
to Mr. Nixon's reelection effort.
Senator Montoya. Why did you select Secretary Connally as the
official recipient of the good news ?
Mr. Hanman. Well, I don't guess really there was any reason ex-
cept that he — we did have the attitude at that time that maybe you're
on both side^ of the fence — that you were supporting a movement
that was both Democratic and Republican — and we do try to main-
tain a posture within our ADEPT committee of being bipartisan on
both sides.
Senator Montoya. No. But what I'm getting at is why was this
particular meeting chosen to make a commitment to the contributions,
and why was Secretary Connally there if it was not for some purpose
that you had in mind before the meeting was set?
Mr. Hanman. I don't know that we had any specific — I don't know
that we had our minds made up really when we went in to see him
that we were going to make a commitment to contribute.
Senator Montoya. You mean you just went into the room, and after
you discussed tariffs and antitrusts, that you just up and said on be-
half of your organization, they commit $25,000, and Mr. Parr got
up—
Mr. Hanman. It wasn't Parr.
Senator Montoya. Whoever it was.
Mr. Hanman. Mr. Westwater.
Senator Montoya. And Mr. Westwater says "I commit $25,000.".
Now, what triggered that commitment ?
What triggered your coordination with him ?
Mr. Hanman. With him?
Senator Montoya. On the $25,000 ?
Mr. Hanman. I don't really know, to tell you the truth.
Senator Montoya, There has to be some basis for it ; you don't just
go into a room and commit $25,000.
Now. the committee members are going to ask you that question, and
that's what I'm preparing you for.
Mr. Elder. Did anybody suggest $25,000 per committee ?
INIr. Hanman. I'm sure there were discussions between ADEPT
and SPACE of contribution.
Senator Montoya. But you were representing ADEPT, you should
have known.
5893
Mr. Hanman. I should have known ?
Senator Montoya. That there were specific conversations to co-
ordinate this effort.
Mr. Hanman. Oh, yes. I did know we were talking about contribu-
tions to Mr. Connally's effort on behalf of Mr. Nixon. All I am say-
ing is — and we were going to contribute some money, but I don't
believe that at the time we went in that meeting — that we were going
in there with an understanding that we were going to make a specific
commitment.
Senator Montoya. But you did.
Mr. Hanman. But we did.
Now, why ? I think ]Mr. Connally asked us if we were going to make
a commitment, a contribution. He indicated that he was going to have
a party in Texas somewhere where the President would be there. He
would like for some of us people to be there.
Senator JSIontoya. With the money ?
Mr. HiVNMAN. No, he was inviting only those people, I think, who
were going to make some contributions. And as I recall, as the way the
meeting developed, that's how we got to the $25,000. It was an oppor-
tunity to go to this dumer and meet the President and meet some of his
supporters. And I believe that's about the way it developed.
Senator IMontoya. Did you take the checks to that meeting ?
Mr. Hanman. No, I don't believe we did. I believe they were deliv-
ered later. They were delivered. I don't know what the dates of the
checks were, but I believe they were delivered later to the Democrats
for Nixon here in Washington, where they had their headquarters set
up, and they were made out to some State organizations, and I don't
believe at the time that that meeting was set up that they had their
State organizations set up, the Democrats for Nixon.
Mr. Weitz. I am looking at a GAO report for the period covering
August and September 1972. It shows that on September 19, you made
contributions totalling $25,000 to five different committees in five dif-
ferent States, but essentially part of the Democrats for Nixon.
Mr. Hanman. Right. In other words, we made them after the meet-
ing, which probably was in early August.
Mr. Weitz. And when was this party for the President? Do you
recall ?
Mr. Hanman. I really don't know. I really don't know.
Mr. Weitz. Was it your recollection that these contributions would
have been delivered after the party ?
Mr. Hanman. What's the date ?
Mr. Weitz. September 1972, is what's reported.
Mr. Hanman. I would guess — and I'm not sure of this — that it was
probably before.
Mr. Weitz. The party was between the meeting with Mr. Con-
nally
Mr. Hanman. It was before, after the contributions were made. It
was in late September, I believe. -
Senator Montoya, The party ?
Mr. Hanman. Yes.
Mr. Weitz. So in other words, the contributions were made before
you attended the party for the President ?
Mr, Hanman. Yes.
5894 ^
Mr. Weitz. How did you come to make contributions for the Com-
mittee To Ke-Elect — the Finance Committee To Re-Elect ? Did that
come about as a result of some specific meeting or conversation?
Mr. Hanman. No, I don't believe it did. I believe there was a feeling
of our committee that after the November election in 1972, we prob-
ably wouldn't have a big demand for funds in 1973 because there
wouldn't be any race. There wouldn't be any demand until 1974.
So there wasn't any need to cslttj over any funds from one year
to another. And I believe the way that one came about was we got
down to pretty well the end of the election, the end of our year, and
we had some money on hand, and so we decided to make a contribution
to the Committee To Re-Eiect, and I believe our records will show
that we just about cleaned the fund out.
Mr. WErrz. Are you aware that around the same time, just before
the election, that SPACE also contributed $25,000 ?
Mr. Hanman. I was aware that SPACE was going to make some
contributions to the Committee To Re-Elect the — we ha-d some con-
tact with a fellow involved in Mr. Nixon's reelection efforts by the name
of Clayton Yeutter. He was directing Mr. Nixon's, I believe, Midwest
agricultural effort. He's from Nebraska originally where we have
quite a few members^ And we got to know him during this time.
And it was to him I delivered these checks.
Mr. Weftz. Did he tell you about the contributions that were being
contemplated by SPACE, or did you get that directly from the
SPACE people?
Mr. Hanman. I dont believe I got it from him. I don't really know
how much they gave, really.
Mr. Weitz. Did anyone ever come to you in late 1972 and talk to
you about the additional moneys they expected you to contribute as
a result of the milk price support decision ?
Mr. Hanman. No.
Mr. Weitz. Did anyone of the other dairy co-ops ever talk to you
about fulfilling a commitment that had been made as a result of the
milk price support decision ?
Mr. Hanman. No.
Mr. Weitz. And the contributions that were in fact made by
ADEPT were made as a part of the general commitment to the Presi-
dent or in support of the President, and not in exchange for or as
part of the commitment specifically for the milk price support deci-
sion in 1971 ?
Mr. Hanman. That's right.
Mr. Weftz; Did you ever discuss the antitrust policy of the admin-
istration with any other administration or ex-administration officials
during 1971 or 1972?
Mr. Hanman. Not that T recall.
Mr. Elder. There's one thing that I'm a little confused on; in a
meeting at the — with Secretary Connally
Mr, Hanman. With Secretary Connally.
Mr. EiJ)ER. With Secretary Connally. Who suggested the total
figure of $50,000 divided ? Did it come from you people or Secretary
Connally ?
Mr. Hanman. I don't know that there was a total of $50,000 divided.
I think we had some discussions — we, being ourselves and Joe West-
water, probably Ben Morgan — as to how much we might contribute.
5895
And as I recall the thought was that the SPACE funds generate
about the same amount of money that the ADEPT funds do, even
though we have, we may have more contributors than they do. I think
ours are generally smaller. If you look at a summary in here, you will
notice that — here is a breakdown of annual contributions by the dairy
farmers who contribute to ADEPT.
And you can see that our average annual contribution is — well,
we've got a lid. We say we don't want to have any more than $99.96.
The reason that lid was put on there originally is that under the old
law you had to report their name individually if they gave $190 or
more, and we didn't want to print every guy's name on a report to
the Clerk of the House.
But you can see that our sizes, our amount of contributions are rela-
tively small. But to answer your question, I think our funds generated
were about the same, and I think that generally what we thought what-
ever the one would do, the other would do about the same.
Mr. Elder. Generally, the two committees arrived at the conclusion
that they would donate a total of $50,000, or did Mr. Connally suggest
the total figure of $50,000 ?
Mr. Hanman. No, I think, generally, the two committees, maybe
more specifically myself and Mr. Wes water, probably recommended an
equal amount.
Mr. Elder. All right.
The only other question I would like to ask, and I think you've an-
swered it, out just to be sure. You did not donate, I take it, you did not
donate any funds to the McGovern Presidential committee ?
Mr. Hanman. No, we did not.
Mr. Elder. OK.
Mr. Wettz. One further question.
Did Mr. Jacobsen, either before or after or during that meeting with
Mr. Connally, suggest a particular figure or amount?
Mr. Hanman. No, I believe that Joe Weswater and I had agreed be-
fore that we were going to recommend $25,000 apiece. We did not in
tend, when we went in there to see Mr. Connally, that we would com-
mit at that time, because bear in mind as I recall their organization
structure really hadn't been firmed up. They weren't really ready to re-
ceive any funds, but we did make a decision while we were there, in
view of this party that was coming up, that we would tell them right
then what we were going to do.
But there was no arm-twisting from either Jacobsen or John Con-
nally as to amount.
Mr, Weitz. Let mc ask you one further question.
Before the meeting, did you tell Mr. Jacobsen of j^our intent at some
point in the future to recommend to your committee a contribution of
$25,000 or some amount ?
Mr. Hanman. I may have, but I don't recall that I did.
Mr. Wkitz. Senator, do you have any questions?
Senator Montoya. Yes, I have just one question.
The point I want to make is this : Now, you're going to be asked this
question in open hearing; now, John Connally doesn't go to the Madi-
son Plot el just to listen to dairymen talk about their problems during
the coiirsi of a political campaign.
5896
Now, he must have had some indication from you people or from
other people, that you were coming in there to commit yourselves to
make a contribution to the President. Now, give us some light on that.
Now, they're going to ask j^ou this.
Mr. Hanman. Well, I am sure — well, I'm not sure either.
Senator Montoya. I just don't want you to appear silly in open hear-
ing, that you just went in there because somebody was going to be in
room so-and-so.
Mr. Hanman. Oh, no. This meeting was set up by Jake Jacobsen,
and he was coordinating Mr. Connally's efforts, and I'm sure we indi-
cated that we would make a substantial contribution.
Senator Montoya. Before you went in there ?
Mr. Hanman. Yes, but not necessarily at that meeting, Senator. We
had indicated that we would make a substantial contribution to the
Democrats for Nixon. But we didn't. We did not intend, when we went
in to see Mr. Connally, that we would tell him at the time what we were
going to do.
And I'm not sure that we had even communicated to Mr. Jacobsen
what our intentions were to contribute.
Senator Montoya. Well, when did you first know that you would
meet Connally at that room ?
Mr. Hanman. You mean, when did we fi.rst
Senator Montoya. Before you left home ?
Mr. Hanman. Yes, sure we did. I didn't know about the specific
room, but I'm sure
Senator Montoya. Was that the purpose of your trip, to meet
Connally ?
Mr. Hanman. Not the only purpose, I wouldn't think. This was in
1972. Usually when I come to Washington, I work on some other things
while I am up here, but that might have been the major reason.
Senator Montoya. Who called you to meet Connally ?
Mr. Hanman. Probably, it would have been Jake Jacobsen.
Senator Montoya, And did you indicate to him that you would make
a contribution ?
Mr. Hanman. I'm sure we did.
Senator Montoya. And the amount ?
Mr. Hanman. I'm not sure we committed a specific amount.
Senator Montoya. You're not sure ?
Mr. Hanman, No.
Mr. Weitz. One further question. We keep saying this, but one fur-
ther question.
At the party for the President in September, late September of 1972,
did you and some other members of ADEPT attend ?
Mr. Hanman. No, I think our president and his wife and our gen-
eral manager. Mr. Baldi and his Avife went.
Mr. Wettz. Representatives of Mid- America did attend ?
Mr. Hanman. Yes.
Mr. Wettz. Did representatives of Dairymen, Inc?
Mr. Hanman. Yes, I believe they did.
Mr. Weitz. Do you know whether representatives of AMPI also
attended ?
Mr. H.xnman. No, I do not, whether thev did or not.
5897
Mr. Weitz. Could you tell us again who the representatives for Mid
America were ?
Mr. Hanman. Yes, our president, Bill Powell, and his wife, Joy, and
(rene Baldi and his wife, Eleanor.
Mr Weitz. Thank you.
Mr. Gage. Have you got any more questions? I have just one or two
clarifying questions.
Mr.* Weitz abked you about this memo that speaks of continuing
commitmont with the administration. Just so there is no question
about your testimony, this wasn't a commitment in terms of an ar-
rangement with the administration to contribute a particular amount?
Mr. IIanman. No.
Mr. Gage. Iri other words, it was just an internal commitment, that
you were going to make contributions dependent on how your monej'^
sources
Mr. Hanmax. That's right.
Mr. Gage. And how the other contributions worked out.
Now, there is a statement in here from — when did Jake Jacobsen
start representing Mid-Am ?
Mr. Hanmax. I would say in late 1972. I don't know what the exact
date was.
Mr. Gage. Was there some legal fee reimbursed to AMPI before that
for amoimts they paid Jake Jacobsen ?
Mr. Haxmax. Yes.
Mr. Gage. Do \ ou recall the amount of that ?
Mr. Haxmax.'I believe it was $5,000.
Mr. Gage. Now, what legal services to Mid-Am did that involve?
Mr. Hanmax. Well, this was back when our members were ta,lking
about setting up some type of political trust organization, and they
were hearing rumors about
Mr. Gage. The question was, Mid-Am, what services to Mid-Am were
involved ?
Mr. Hanmax^. He was advising our people, our board, as to what by
law they couldn't do. They couldn't make political contributions using
corporate funds.
Now, that is why that bill was tendered to Mid-Am, because he was
giving us that legal advice.
Mr. Gage. Was that done at a series of division board meetings?
Mr. Hanmax. Yes.
Mr. Gage. ^^Tiich included Mid-Am division directors.
Now, there is a statement hore dated October 2, 1973, which is in-
cluded in the documents. Would you look at that and comment on
whether it correctly states what the legal services were ?
Mr. Haxman. No, Mr. Jacobsen, as far as the ADEPT group was
concerned, was giving us advice on how we might restructiirc tlie
ADEPT organization rather than giving some legal opinion on the
price freeze. I think that more properly reflects some legal services
rendered to Mid-Am than
Mr. Gage. Did he also render a statement to Mid-Am at the same
time?
Mr. Hax'max\ Yes.
Mr. Gage. In a like amount ?
Mr. Haxmax. Yes.
5898
Mr. Gage. All ri^ht.
Now, we noted m going through these documents, we are missing
the October and possibly September statements to Mid-Am of Jake
Jacobsen. But we will furnish them. One way or another we didn't get
them in the documents.
Mr. Hanman. ok.
Senator Montoya. Why would he send a statement to ADEPT,
which was a political arm, for services with respect to the price freeze
and general dairy problems ?
Mr. Hanman. Well, I don't think he should have because I thinli
those types of advice were given to Mid-Am and not to ADEPT. Bear
in mind that during this period, he was also rendering some opinions
and legal advice to Mid-Am.
Senator Montoya. Did you pay him with other checks?
Mr. Hanman. From Mid-Am ?
Senator Montoya. Yes.
Mr. Hanman. Yes. And we also paid him this amount here from
the ADEPT account.
Senator Montoya. And did you pay from Mid-Am or ADEPT any
moneys to Harry Dent ?
Mr. Hanman. ISTo.
Senator Montoya. Chotiner ?
Mr. Hanman. No.
Now, I say no, but his jRrm, Marion Harrison, we do have on a re-
tainer for Mid-Am.
Senator Montoya. And how long have they represented you?
Mr. Hanman. I believe since December 1972 or January 1973.
Senator Montoya. Did you pay them any moneys prior to that
time?
Mr. Hanman. No.
Senator Montoya. At all ?
Mr. Hanman. No.
Senator Montoya. And is Mr. Hillings part of that firm? Pat
Hillings?
Mr. Hanman. I understand he was earlier, but he isn't now. He
wasn't involved in that firm at any time after I got there.
Mr. Weitz. In the same regard, are you aware of any legal fees
that were paid to any of the attorneys we have just mentioned through
the common organization of which Mid- America is a member, such as
the successor of Associated Dairymen or some other like associations ?
Mr. Hanman. Not to my knowledge.
Mr. Gage. Are you referring to CACF ?
Mr. Weitz. I think I am. I have seen it once, if you want to spell
out what that represents.
Mr. Hanman. Central America Co-op Federation.
Mr. Weitz. Do you want to take a minute?
Mr. Gage. I just want to make sure Gary is answering completely.
Mr. Hanman. I don't know of any legal bills to these people you are
talking about from CACF. I could be wrong.
Senator Montoya. Would you check on that, and then let us know ?
Mr. Hanman. Yes ; I'd be glad to clieck on that.
5899
Mr, Weitz, Were there any other bills that were submitted to you by
Jake Jacobsen tliat did not, in fact — invoices that did not, in fact,
represent the type of services provided ?
Mr. Hanman. Yes. There were — you will notice in here on some of
these that he was abbreviated in his billing, and in some cases for my
own purposes, I added to it issues on which I had consulted him about,
Mr. Gage. Tliese are in the other file on Jacobsen-Harrison.
Mr. Weitz. I take it he's now on a $l,500-a-month retainer ?
Mr. Hanman. No ; he's now on a $500 retainer from Mid-Am. It's
under review.
Mr. WErrz. And at no time during the past 4 years, to your knowl-
edge, were any moneys paid to either Jake Jacobsen or the Harrison
firm, or DeVier Pierson converted to cash and used for any purposes
related to Mid-America or ADEPT or any political purpose that you
know of ?
Mr. Hanman. No, sir.
Mr. Weitz. I have no further questions.
Mr. Elder, In the event we do have some questions after reviewing
the documents, is it agreeable that we can call you on the phone and
discuss it ?
Mr. Hanman. Firie, sure; if it's all right with Mr. Gage.
Mr, Gage. WTiy don't you call me, and I will get the answers?
Mr. Elder. OK.
Mr. Weitz. Thank you.
Senator Montoya. Thank you very much.
[Whereupon, at 4 :20 p.m., the hearing in the above-entitled matter
was adjourned.]
5901
Hanman Exhibit No. 1
HAKION CDWYN HARRISON
CRNCST GtNt RCCVES
ROBCRT F. SAGLC
MTRON SOlTER
LAW OFFICES
Rbeves & Harrison
SUITE 500
I701 PENNSYLVANIA AVENUE. N W.
WASHINGTON, D. C. 20006
TELEPHONE 202 29S-9030
TELEX ♦»0376 CRDK
CABLE "REEVLAW"
March 30, 1971
Mr, Gary Haninan
Executive Vice-President of Marketing
Mid-America Dairymen, Inc.
P. O. Box 1837 S.S.S,
Springfield, Missouri 65805
Dear Gary:
We send you herewith the names and addresses
of nine committees. We will get the tenth one later.
Please don't hold up waiting for it because we need a
few days.
MEH:ek
Enclosure
f^
Ci> w^-
30-337 O - 74 - 4
5902
Kick Off '72 Republican Dinner
Eisenhower Center
310 - 1st Street, S,E.
Washington, D. C.
Republican National Committee
Eisenhower Center
310 - 1st Street, S.E,
Washington, D. C.
Republican National Finance Committee
Eisenhower Center
310 - 1st Street, S.E.
Washington, D. C.
Republican National Finance Operations Committee
Eisenhower Center
310 - 1st Street, S.E.
Washington, D. C.
Republican National Associates
Eisenhower Center
310 - 1st Street, S.E.
Washington,' D. C.
Republican Victory Committee
Eisenhower Center
310 - 1st Street, S.E.
Washington, D. C.
Republican Campaign Committee
Eisenhower Center
310 - 1st Street, S.E.
Washington, D. C.
Committee for a Republican Congress
Congressional Hotel
300 New Jersey Avenue, S.E.
Washington, D. C.
Republican Congressional Candidates Conference
Congressional Hotel
300 New Jersey Avenue, S.E.
Washington, D. C.
5903
Hanman Exhibit No. 2
AGRICULTURE & DAIRY EDUCATION POLITICAL TRUST
p. O. BOX 1837 S.S. STATION, SPRINGFIELD, MO. 65605 • <I7 662-7071
FROM: Gary Hanman
DATE: September 13,1971
TO: ADEPT COMMITTEE
Ken Varner
Dale Hendricks
Dale Schaufelberger
Gordon Walle
Edgar Lampe
Curtis Phillips
SUBJECT: Quarterly Report
Attached is the Quarterly Report filed by Trustee Delano for
the ADEPT Fund.
The $15, 000 contributions- were a part of the continuing
commitment which we had with the Administration. Several administrative
decisions, favorable to dairy, have been rendered — more perhaps than
any other administration: (1) Restore Special School Milk Program;
(2) Curb imports in four major categories, with the over 47^ cheese still
being considered; (3) Use of CCC stocks of cheese in schools; (4) Export
(bf butter (a summary of this program attached); (5) Increase in price
supports by 27^^ per cwt. ; (6) Class I Base Plan promotion deductions
under federal milk orders; to name a few.
GH:bd
Ends.
5901
OVERSEAS JOTTER SnlZS
Week of May 17 1,139.437
V«ak of Kay 24 2,844,058
Week cf May 31 2,149,403
Veek o£ Jvne 7 3,114,083
Week of Juno 14 2,288,317
Voek of June 21 342,066
Veek of June 28 1,077,531
Week cf Jyly 5 1,197,358
Week of July 12 1,264,174
Week of July 19 199,910
Week of J;uly 26 41,102
Week of August 2 777,920
(8/3-239,360)
(8/4-538,560)
Weak of August 9 578,544
(8/10-308,040)
(8/12-270,504)
Week or August 16 1,063,137
(8/17-386,484)
(8/19-450,453)
(8/20-226,210)
Week of August 23 1,644,986
(8/23-349,180)
(8/24-223,229)
(8/25-449,126)
(8/26-399,677)
(8/27-223,774)
Veek of August 30 2,763,650
(8/31-779, 2G0)
(9/1-881,525)
(9/2-437,825)
(9/3-665,020)
Total to date 22,485,686
5905
Hanman ExraBiT No. 3
August 17, 19?2
Mr. Jake Jacobsen
Semer, White L Jacobsea
1156 15th Street, N. W.
WashingtoQ, D, C. 20005
Dear Jake:
Attached is a follow-up letter to our discussions with the
Secretary. 1 realize it is too long, but it was difficult for me to explain
this complicated subject on one page. If you think it is too long for the
Secretary to grasp, give me a ring and we will redo it.
Sincerely yours,
MID-AMERICA D/IRYMEN, INC,
GH:bd Gary Hanman
Senior Executive Vice President
Attachment
WEDNESDAY, NOVEMBEB 14, 1973
U.S. Senate,
Select Committee on
Presidential. Campaign Activities,
Washington, D.C.
The Select Committee met, pursuant to notice, at 11 a.m., in room
G-334, Dirksen Senate Office Building.
Present : Senator Joseph M. Montoya.
Also present : Donald Sanders, deputy minority counsel ; Alan Weitz,
assistant majority counsel.
Senator Montoya. We will start the proceeding now.
Will you state your name ?
Mr. Lilly. Bob A. Lilly.
Senator Montoya. Where are you from, Mr. Lilly ?
Mr. Lilly. San Antonio, Tex.
Senator Montoya. I will administer the oath.
Will you raise your right hand? Do you solemnly swear that the
testimony that you are about to give will be the truth, the whole truth,
and nothing but the truth, so help you God ?
Mr. Lilly. I do.
Mr. Weitz. Senator, let the record show that Mr. Lilly has been
granted use immunity by the U.S. District Court for the District of
Columbia this morning, and is appearing and will testify pursuant to
that order.
Senator Montoya. The record will so show.
Mr. Nicholas. Might it also show that he appeared with his counsel ?
Senator Montoya. Yes. Let the record also show that he has ap-
peared with his counsel, and will you, Mr. Counsel, state your name?
Mr, Nicholas. My name is Anthony Nicholas, attorney at law, San
Antonio, Tex., and I represent Mr. Bob A. Lilly, individually.
Mr. Weitz. Mr. Lilly, for the record, would you state your full name
and address ?
TESTIMONY OP BOB A. LILLY, ACCOMPANIED BY ANTHONY
NICHOLAS, COUNSEL
Mr. Lilly. I am Bob A. Lilly, 130 Paloma, P-a-1-o-m-a, San Antonio,
Tex.
Mr. Weitz. Let me just say in general that whenever names or other
items come up that might be somewhat obtuse, that they ought to be
spelled for purposes of the record.
Mr. Lilly, would you tell us of your earliest connections with, first,
MPI and then AMPI ?
Mr, Lilly. Yes. If I might, I have a short brief here that more or less
describes it.
Mr, Weitz. Is that a statement you have ?
( .5907 )
5908
Mr. Lilly. Yes. I might read it as far as I am concerned.
Mr. Wettz. Fine.
Mr. Lilly. My name is Bob Lilly. I reside at 130 Paloma, San An-
tonio, Tex. I am employed by Associated Milk Producers, Inc. and
National Dairymen's Cooperative with approximately 40,000 pro-
ducers in 21 States, headquartered in San Antonio, Tex.
My title is secretary of the Committee for Thorough Agricultural
Political Education, abbreviated as TAPE, and legislative director
for AMPI, abbreviation for Associated Milk Producers, Inc.
As secretary of the Committee for TAPE, I am responsible for rec-
ords of contributions, receipts, expenditures, reports, and correspond-
ence relating to the Committee for TAPE. As legislative director, I
work with State legislators as well as employees in the AMPI regions
charged with similar responsibilities ; State regulatory agencies, such
as health authorities, animal health authorities, pollution prevention
agencies, as well as comparable Federal regulatory agencies. And I
also work on national legislation.
I have been associated with the dairy industi-y since early 1965. In
1965, I was employed by North Texas Producer's Association, a dairy
cooperative headquartered at Arlington, Tex. In 1967, at the forma-
tion of Milk Producers, Inc., the North Texas Producers Cooperative
became a part of AMJPI, along with other cooperatives in Texas,
Oklahoma, Kansas, Arkansas, Tennessee, and New Mexico with ap-
proximately 12,000 members.
Later, in 19G8, Associated Milk Producers, Inc., AMPI, was formed
with approximately 30,000 members, and in time grew through con-
solidation to its present size of about 40,000 members. I served as an
assistant to the general manager of MPI and AMPI until early 1972,
when there was a change in management.
Since that time, I have seived in my present capacity.
Mr. Weitz. Thank you.
Mr. Lilly, what were the positions of Mr. Nelson — what was the
position of Mr, Nelson during the period of 1967 forward?
Mr. Lilly. He was general manager of Milk Producers, Inc., and
later Associated Milk Producers, Inc. until early 1972, January 1972.
Mr. Weitz. If you have no objection, I think we can refer alter-
nately to Milk Producers, Inc., as MPI, and Associated Milk Pro-
ducers, Inc., as AMPI, and TAPE, T-A-P-E, and Committee
for TAPE as either TAPE or CTAPE.
Mr. Lilly. That is fine. That would be easier for me.
Mr, Weitz, Can you tell us what position Mr. Isham, I-s-h-a-m, held
during that period ?
Mr. Lilly. Yes. Mr. Isham held the position of comptroller for
AMPI during the entire period until a change in management in
1972, and following that, at about that time, or shortly thereafter,
he was named as associate general manager and was replaced as comp-
troller, and was one of two associate general managers to the cur-
rent or present general manager, George Mehren.
Mr. Weitz. M-e-h-r-e-n ?
Mr. Lilly. M-e-h-r-e-n.
Mr. Weitz. "V^Hio was the other associate general manager, or at
that time who was?
5909
Mr. Lilly. At that time and presently still is associate general man-
ager, A. L. McWilliams, M-c-W-i-1-l-i-a-m-s.
Mr. Weitz. Is there a second general associate manager at this
time ?
Mr. Lilly. Not since Mr. Isham left AMPI several months ago.
He resigned and there has been no replacement for him in the associ-
ate general manager's squad.
Mr. Weitz. Did Mr. Isham also hold a position with MPI ?
Mr. Lilly. He held the comptroller position with MPI.
Mr. Weitz. So both with MPI and AMPI ?
Mr. Lilly. Eight.
Mr. Weitz. Can you tell us the position or positions that Mr,
David Parr, P-a-r-r, held from 1967 forward ?
Mr. Lilly. This is rather difficult. He was rather outspoken in not
wanting a title. He would come as near being an assistant general
manager as I could possibly think of anything being, but he actually
reque^:ed that he have no title. He was constantly with Mr. Nelson,
advising with him.
So I M^ould say that he dealt, even though he did not have the title,
in the capacity of assistant general manager.
Mr. Weitz. Do you know what his formal title was during that
period of time ?
Mr. Lilly. As far as I know, he had no formal title.
Mr. Weitz. He was not, for example, a division manager for Arkan-
sas?
Mr. Lilly. You are right. I am sorry. At the time we put MPI to-
gether, the CAMPA group that is Central Arkansas Milk Producers
Association, became a part of MPI, and during a brief period of 1967
until 1968, until we created AMPI, he served as division manager of
that group.
But prior to that time, he was manager of the CAMPA group.
Mr. Weitz. And when did they merge with AMPI ? Did he remain
a division manager of AMPI, or
Mr. Lilly. No; he remained in Little Rock as far as his residence
and his business place of operation was concerned. Certainly, he had
a great deal of influence on what went on in that particular division,
and it was maintained as a division. But he did not have the title of
division manager.
I am not sure who succeeded him in that capacity, but he moved
into a different relationship.
Mr. Weitz. Can you tell us, if you know, what assistance Mr. Parr
had in Little Rock throughout this time, from time to time ?
Mr. Lilly. He had Keiffer, K-e-i-f-f-e-r, Howard, Joe Johnson,
J-o-h-n-s-o-n, Forest, F-o-r-e-s-t, Wisdom, Bob Justice, J-u-s-t-i-c-e,
Tom Townsend. T-o-w-n-s-e-n-d, Joe Murphey, M-u-r-p-h-e-y. I think
that I have covered most of them.
Mr. Weitz. All right.
Now, we are turning to you. Could you tell us what your relation-
ship was with Mr. Nelson ? For example, you defined what your area
of responsibility was.
Could you tell us your contact with Mr. Nelson in general during
this period?
5910
Mr. LiiXY. Of course, during this time as an assistant to the general
manager, it covered practically anything which may or may not come
up; that put me in close working relationship with Bob Isham as
comptroller, Avith Dsive Parr in the capacity — he served with the divi-
sion managers we had actually named as division managers. And we
had a number of division managers.
At a later date, we created regions, which is a higher level than a
division, in close contact with the regional managers as to what was
going on — telephone conversations througli me directly with Mr.
Nelson on some plant problem or some legislative problem or what-
ever the problem might be; also lather closely tied to TAPE at that
time doing lobbying activities at a much higher level — not at a higher
level, that is a poor choice of words — but at a more intensified etfort
than under Dr. Mehren.
And I might say that whatever might fall within the realm of an
assistant to the general manager of a large national cooperative — I
mean, that would fit within my capacity.
Mr. Weh'z. Were there any other persons in approximately your
position with regard to Mr. Nelson ?
Mr. Lilly. No; Mi. Nelson, at tlie time of the creation or formation
of MPI and later, AMPI, refused to leave San Antonio and move to
Dallas, Tex., where the board wanted to have the office. And, in fact,
I moved to San Antonio in April of 1968, and was there for approxi-
mately a year and a half before any of the other people within MPI,
later AMPI, moved to San Antonio.
So, the two of us were togetlier for well over 1 year.
Mr, Weitz. You and Mr. Nelson ?
Mr. Lilly. That is right.
Mr. Weitz. Who was liis secretaiy at that time?
Mr. Ln.LY. A lady by the name of Madeline, M-a-d-e-1-i-n-e, that is
probably miss])elled, P-i-1-l-o-t.
Mr. Weitz. Did you have a secretary ?
Mr- Lilly. I had a secretary. I used Madeline Pillot, and had a sec-
retary by the name of Sarah Bezdek, B-e-z-d-e-k.
Mr. Weitz. For what period of time did Sarah Bezdek serve as your
secretary ?
Mr. Lilly. From my time moving to San Antonio in 1968, either she
or Madeline Pillot, later Sarah Bezdek, entirely up until March of
1972.
Mr. Weitz, And after that time ?
Mr. Lilly. After that time, I have used Annette, A-n-n-e-t-t-e, Tom-
isini, T-o-m-i-s-i-n-i, curently my secretary.
Mr. Weitz. Do you know who succeeded Madeline Pillot as Mr.
Nelson's secretary ?
Mr. Lilly. Yes ; a lady by the name of Jane Wright, W-r-i-g-h-t.
Mr. Weitz. Do you know when she replaced Pillot ?
Mr. Lilly. No ; I do not.
Mr. Weitz. Did Jane Wright continue on as Mr. Nelson's secretary
until he was removed as general manager?
Mr. Lilly. I think just prior to his being removed as general man-
ager, Jane Wright left him probably and went with an insurance
company. It possibly could have been immediately after. I mean, I
could not give you a date.
5911
Mr. Weitz. I see.
Do you know where Ms. Wright is located now ?
Mr. Lilly. She is — I saw her just a day or two ago. I know she is
still working with the insurance company, and she lives in Olmos
Park in San Antonio, as far as the residence is concerned.
Mr. Weitz. Do you know — what about Pillot ?
Mr. Lilly. She lives in New Braunf els, Tex.
Mr. Weitz. Where does Sarah Bezdek live ?
Mr. Lilly. In San Antonio, I am not sure of the address.
Mr. Weitz. I would like to move to some questioning concerning
the formation of TAPE. Can you tell us what the purpose of TAPE
was and who was instrumental in its formation ?
Mr. Lilly. Of course the purpose of TAPE was to provide a ve-
hicle for our dairy farmer members — the purpose of TAPE was to
provide a vehicle that dairy farmers could make political contribu-
tions, and it was so designed that they would contribute under $100
to prevent and to avoid having to report their names and addresses
at that time to the Clerk of the House.
And in our handling, dairy farmers were paid in such a way — w©
handled their moneys for them for the milk that they sold during the
month, and they would sign an authorization for us to make a deduc-
tion out of their checks. We originally started out at one-third of 1
percent, and I could not tell you truthfully why we were tied up on
that.
When they would reach $99.96, then they would be cut off and
contribute nothing further during the year. These moneys were used
to contribute to State and Federal candidates for political office. The
formation of it first started in 1968. We had a number of attorneys.
I remember DeVier Pierson had some comments on it. There was
some correspondence on his thoughts and ideas. Ted Van Dyk, that's
V-a-n D-y-k, had some input into it through correspondence and
ideas as to how it should be organized. Mr. Jake Jacobsen, J-a-c-o-b-
s-e-n, Austin, Tex., had some input into it; possibly other attorneys.
These, I can remember.
As to how it should be structured and organized, we fina^lly deter-
mined to set it up as a trust in the true sense of the word. It was
originally entitled "Trust for Agricultural Political Education," with
Robert Isham, our comptroller, as sole trustee of the fund.
The first deposits started in 1968. The actual first collection of the
first deposit was made in March of 1969.
Mr. Weitz. Was there a committee for TAPE that had some
function ?
Mr. Lilly. There was a committee for TAPE. We had it at that
particular time. I believe we had four regions within AMPI, and each
region, if my memory serves me correctly, had two representatives
that were directors on AMPI's board, corporate board members, as
we referred to them as.
It was not a committee in tlie true sense of the word. They would
make the determinations about where money would be spent. They
certainly could make requests. Their requests were probably accepted
and moneys were expended to the regions which they recommended.
But for the most part, the committee functioned as a committee that
we reported to after the fact, when we would report to the Clerk of the
5912
Plouse, at that time sometimes on a quarterly basis, and very similar to
the reporting date now. We would give the committee a copy of the
report, who we'd made contributions to, but it was an after the fact
thing rather than a before the fact thing.
In other words, we did not have to have their permission at that par-
ticular time, at the inception of TAPE to make a contribution.
Mr. Weitz. The TAPE committee was nuide up of dairy farmers
who were members of TAPE ?
Mr. Lilly. Right.
Mr. Weitz. Weie all of them members of the board of directors of
AMPI?
Mr. Lilly. Yes.
Mr. Weitz. Under the trust agreement, is it not true that Mr. Isham
had sole legal responsibility for the dispensation of the funds?
Mr. Lilly. That is true.
Mr. WEirz, In practice, who controlled the dispensation of funds
or who made the decisions as to contributions ?
Mr. Lilly. For the most part, myself, Mr. Nelson, Mr. Parr, Mr.
W. R. Griffith, G-r-i-f-f-i-t-h, a director from, I will say, Oklahoma,
New Castle, Okla. ; probably othei-s, but those were the major people.
Mr. Weitz. Is Mr. Griffith a member of the TAPP^ committee?
Mr. Lilly. Yes, he was chairman of the TAPE committee, and as a
matter of fact, he is chairman of the Committee for TAPE noAv/
Mr. Weitz. Now, you said that you, Mr. Parr, Mr. Nelson, and Mr.
Griffith had actual responsibility. If you were to estimate who made
the majority of the decisions, could you make such an estimate?
Mr. Lilly. I would say that Mr. Nelson and Mr. Parr, between the
two of them, made 80 to 90 per-cent of the decisions.
Mr. Weitz. How many instances do you i-ecall in which you made a
decision for a particular contribution without consulting with, either
Mr. Nelson, or Mr. Parr?
Ml'. Lilly. I remember one instance quite well.
Mr. Weitz > Only one now ?
Mr. Lilly. I am sure there were othei-s. One particularly comes to
my mind, but I am sure thei'e were other contributions I made with-
out consulting with them.
Mr. Weitz. Were there contributions that were made on the author-
ity of either Mr. Nelson or Mr. Parr, in which they did not ask yofur
advice or otherwise consult with you ?
Mr. Lilly. Yes, ye^.
Mr. Weitz. Numerous occasions?
Mr, Lilly. When they asked my advice, they might have told me
that they were going to — in most instances, I was aware that they
were going to, I might disagre^e or agree, but that had no bearing
on it. I think in most instances I was aware of it.
Mr. Weitz. You would say that perhaps Mr. Nelson, and to a
lesser extent, Mr. Parr, had final authority with regard to contri-
butions ?
Mr. Lilly. Insofar as I am concerned, Mr. Nelson had final
authority.
Mr. Weitz. Did Mr. Isham, or you, or anj^one else make reports to
the TAPE committee, other than those reports — copies of the reports
to the Clerk of the House ?
5913
Mr. Lilly. Mr. Isham did. Usually my assistants or my help would
be sure that he had it properly-
Mr. WErrz. How frequently did he make such reports?
Mr. Lilly. There was a report required at the end of February of
each year, the end of May of each year, the end of June — I mean
August — of each year, and the end of December. It was very similar
to what it is now with the Clerk of the House.
Mr. Weitz. You're talking about reports to the Clerk of the House,
but did he make independent reports to the committee ?
Mr. Lilly. Mr. Isham or myself would make reports to the com-
mittee ; sometimes, Mr. Isham, sometimes he was not even along and
I would make the report to the committee at about the same time or
shortly thereafter when we made a report to the Clerk of the House.
Mr. Weeitz. I see.
But you would not consult— you or Mr. Isham would not consult
with members of the TAPE committee beforehand as to particular
contributions ?
Mr. Lilly. In some instances, if we were going to contribute in
Oklahoma, Mr. Griffith lives in Oklahoma, and if we were going to
make a contribution decision, we would contact him and be sure that
we were not going to have his ire raised because of a contribution
we might make in Oklahoma; the same thing in Kansas or any of
the States. We usually would try to check with someone, but not in
all instances.
Mr. Weitz. I see.
Did the TAPE committee meet as a committee from time to time?
Mr. Lilly. No; not the TAPE committee.
Mr. Weitz. Were there reports made as to TAPE contributions
to the board of directors of AMPI?
Mr. Lilly. No; it was kept totally separate and apart, and to my
knowledge, during the period of TAPE, I do not think the minutes
will reflect any report having — AMPI boards minutes will not reflect
any report having been made. And I think this would hold true until
after the change in the law in 1972, when the new election code came
into effect.
Mr. Weitz. You say the minutes would not reflect, I take it, a
formal or oral report. To your knowledge, were there informal, off-
the-record reports made to the AMPI board by anyone knowledgeable
as to TAPE contributions?
Mr. Lilly. Tliere would be, not as to who might have been con-
tributed to. A question might have been raised informally by a board
member, had a contribution been made to someone, or what contribu-
tions had been made, or how much money TAPE had as far as balances
were concerned. And these things would usually be answered in an
informal, off-the-record, insofar as AMPI minutes — ^board minutes
were concerned.
Mr. Weitz. I see.
I would like to move to the period December 1968. Are you aware of
or do you know anything concerning a transaction in which funds were
delivered through one or more persons to Maurice Stans?
Mr. Lilly. I am unaware of any moneys having been moved in 1968.
Mr. Weitz. This is December of 1968.
Mr. Lilly. I am totally unaware of it.
5914
Mr. Weitz. And you neither discussed tliis with Mr. Isham or any-
one elvSe, or were never told of any such transaction 'i
Mr. Lilly. I certainly have no — I mean, t-o the best of my recollec-
tion, I have no knowled^i^e, no notes. It is a blank space in mv mind.
Mv. Wkitz. All ri<_rht.'
Xext, I would like to ask you about the transaction in 1969, that
culminated in a payment of $100,000 to ]Mr. Kalmbach.
WouKl you like to tell us how that transaction began, and what you
know of it?
Mr. Lilly. Yes.
Is it permitted for me to read this [indicating] to cover what I have?
Mr. Wkitz. Go right ahead.
Mr. Lilly. In late July of 1969, I was directed by Harold Nelson to
deliver $100,000 cash to Milton Seiner, S-e-m-e-r, a Washington. D.C,
attorney. I was informed at the time, or perhaps a little later by Mr.
Nelson, or Dave Parr, P-a-r-r, that the purpose of the $100,000, which
was ultimately to be delivered to Herbert Kalmbach was to offset an
AMPI personnel activity with the Democratic Party in the 1968 Presi-
dential election, and also to get the favorable attention of the
Republicans.
I was told to contact the Citizens' National Bank in Austin, Tex.,
the depository for our political TAPE fimds, and work out details. I
spoke with Mr. Marvin Stetler, president of the bank, that is S-t-e-t-
l-e-r. Apparently, Mr. Stetler was told tlie transaction by Mr. Nelson
prior to my conversation with Mr. Stetler, who told me that it would
take several days to accumulate this amount in $100 bills, because it
would have to be gathered from several banks in order to avoid
arousing iXyn, interest of the Federal bank authorities.
The money was debited to the account of TAPE, the political arm
of AMPL This required the approval of Robert O. Isham. a tnistce for
TAPE. It is probable that Mr. Isham discussed the transaction, but I
do not recall any conversation..
x\t this time, I was located in the San Antonio office, and Mr. Isham
was located in the Dallas office. I was called by Mr. Stetler and told
that the $100,000 would ])e ready on August 1, 1969. I notified Mr.
Semer in Washington, D.C, and we arranged to meet in Dallas, Tex.
On August 1, 1969. I went to Austin, I went to Mr. Stetler's office
in the Citizens' National Bank. Mr. Stetler counted $100,000 in $100
bills in my presence, and I then signed a debit memo acknowledging
receipt of $100,000 cavSh, this fii'st day of August 1969, per instructions
of Bob Isham, that is I-s-h-a-m.
The money was placed in a briefcase. I took it and went to the air-
port, and flew to Dallas, Tex. I do not remember if I went by commer-
cial airline, or in the AMPI private plane. The plane landed at Love
Field, and I went by taxi to the Executive Inn.
I called Milt Semer's room, and he asked me to come to his room,
which I did. I gave Mr. Semer the briefcase containing the $100,000.
He did not count the money, nor did he give me a receipt.
At a later date, several weeks as I remember. I saw Mr. Semer in
Washington, D.C. and he told me he had left my briefcase in Cali-
fornia, indicating to me that the money had been delivered. Sometime
after this it was decided that no contribution exceeding $5,000 should
5915
have been made under the then existing statute to any one individual
or committee in any one year.
I do not know who made this decision or when it was made. In
December of 1969, Mr. Nelson discussed with me ways to show the
$100,000 contributed in an acceptable manner. I suggested that the
$100,000 be returned to us, and we then give 20 State Republican com-
mittees $5,000 each, and they could in turn pass the money back to
Kalmbach. This suggestion was ruled out by Mr. Nelson, and I got
the clear impression that this approach had been discussed outside the
office and had been vetoed, probably by someone close to the admin-
istration.
I then suggested that if the State committees were not to be trusted
to do this, that 20 special committees be appointed. This idea was also
turned down.
The final decision was that I should borrow $100,000 from the Citi-
zens' National Bank in Austin, Tex. This was to be deposited to the
TAPE account. Then a TAPE check in the amount of $100,000 was to
l>e used to purchase a $100,000 non-interest-bearing CD to be held by
the bank as collateral for my personal note.
The personal note was executed on December 17, 1969, for 60 days,
and I deposited the $100,000 to the TAPE account on December 17,
1969. A TAPE check purchasing $100,000 non-interest-bearing CD
was issued on December 19, 1969, and cleared the bank on December 22,
1969.
Mr. Weitz. Off the record for a minute.
[Discussion off the record.]
Mr. Weitz. Let's go on the record.
Mr. Nicholas. Bob, do you recall how you were advised, if you were
so advised, as to how to get a hold, as to why to get a hold of Mr.
Semer? I mean, do you have any recollection of that, or did you know
Mr. Semer ?
Mr. LiixY. I knew Mr. Semer by name of the Jacobsen, Semer and
White law firm in Washington, D.C, because I had an appointment
with Mr. Jacobsen. Possibly I had met Mr. Semer, but I am not sure
that I had.
And why I contacted him^ — is this what you are asking?
Mr. Nicholas. You said that you contacted Mr. Semer for the pur-
pose of delivering to him the $100,000 that was given to you through
the debit
Mr. Lilly. Memo.
Mr. Nicholas. Memo from TAPE. Is that correct?
Ml'. Lilly. Yes.
Mr. Nicholas. My question is this, Avere you told to contact Mr.
Seiner ? Did Mr. Semer contact you ?
Mr. Lilly. I was told to contact Mr. Semer.
Mr. Nicholas. Who told you that ?
Mr. Lilly. Mr. Nelson.
Mr. Nicholas. Mr. who?
Mr. T^iLLY. Nelson.
Mr. Nicholas. Harold A. Nelson ?
Mr. Lilly. Yes.
^Ir. Nicholas. How was the contact made ?
5916
Mr. Lilly. Truthfully, I do not remember. I would have to assume
it was by phone.
Mr. Nicholas. Anyway, Mr. Nelson told you to make the contact?
Mr. Lilly. That is right.
Mr. Nicholas. The other question is this, was there any discussion
between you and Mr. Nelson or anyone else as to why the $100,000
was being delivered or given to Mr. Herbert Kalmbach ? I mean, did
somebody just say, "Well, we are going to give them $100,000," or was
there some reason for it '?
Mr. Lilly. I mentioned just briefly in my statement, it was to get
the attention of the Republicans, since we had worked rather heavily
in the Democratic Party, and we needed to get their attention.
Mr. Nicholas. You say, "we" needed to get their attention. Whose
idea was this ?
Mr. Lilly. This was a conversation that did take place outside of
the office. I do know that Mr. Parr, Dave Parr, was aware of this. 1
know that Mr. Jake Jacobsen was aware of this. I know that Mr.
Nelson was aware of this.
Who else might have been contacted, I do not know. Those three
people, I am awai-e tliat they were involved, and had knowledge of
it, and had talked about it outside; possibly, there had to be other
people as well,
Mr. Nicholas. This was the 1969 — I am going to use the word "con-
tribution"
Mr. Lilly. OK.
Mr. Nicholas [continuing]. Of $100,000. Now, as I understand, 1969
was not an election year.
Mr. Lilly. That is true.
Mr. Nicholas. And 1968 was an election year.
Mr. Lilly. That is right.
Mr. Nicholas. And that is when Mr. Nixon ran against Mr. Hum-
phrey. - '
Mr. Lilly. Right.
Mr. Nicholas. And Mr. Nixon beat Mr. Humphrey?
Mr. Lilly. Yes.
Mr. Nicholas. And the milk industry, as I understand it, supported
Mr. Humphrey heavily, right?
Mr. Lilly. That is true.
Mr. Nicholas. Was there any discussion as to what this $100,000
was for ?
Mr. Lilly. No.
Mr. NiCHor^s. Well, was it a political contribution ?
Mr, Lilly. Outside of what my statement covers, I mean this is
ahont the onlv knowledge that T have as to what it was for.
Mr. Nicholas. Was it to pay anybody back, or to pay otf political
campaigns, or was there any mention about getting your foot in tlio
door, or
Mr. LiM.y. To gain their attention, T mean, that would be to get
your foot ill tlie door to me.
Mr. Nicholas. What I Avant to know is wliose idea was it while we
are on the record, and while we are heiv. T.,et me a.sk you wliethei- it
■was your idea?
I
5917
Mr. Lilly. No, it was Mr. Nelson's idea insofar as I am concerned,
but he told me and directed me to do it.
Mr. Nicholas. Mr. Nelson told you to do it ?
Mr. Lilly. Right.
Mr. Nicholas. Go ahead.
Mr. Weitz. Before the payment was to be made, did you attend any
meetings at which this matter was discussed ?
Mr. Lilly. Not that I recall.
Mr. Weitz. So Mt. Nelson told you about this individually ?
Mr. Lilly. I know that he talked about this to me individually. I
am under the impression that Mr. Isham could well have been present
at some of the discussion when this was discussed with Mr. Nelson.
My notes — what few notes I have — do not indicate it. I know that
Mr. Isham is aware of it and, of course, Mr. Isham was in Dallas. I
was in San Antonio. It is quite possible we could have discussed it,
either on the phone or in person.
We must have had discussions between Mr. Isham and myself, and
probably between Mr. Nelson, but I cannot remember.
Mr. Weitz. Why do you say that you must have had a discussion
with Isham?
Mr. Lilly. Well, Mr. Isham and myself on a num.ber of occasions,
on practically any political contribution that was made — he would
usually talk with me about it. Whether I would approve or disapprove,
he wanted to make me aware of it and get mv thoughts and ideas as to
what I really thought about a contribution being made.
I am talking about TAPE contributions now. So we had a rather
close, working relationship. Possibly, he valued my candidness with
him, whether he agreed or disagreed with me on what I really and
truly thought about making a political contribution to a candidate.
I think we had a close, working relationship, and this is why I think
he would have since it originally involved TAPE funds.
I think he would have discussed it with me.
Mr. Weitz. On that point, since it did originally involve TAPE
funds, Wiis there any discussion between you and, either Mr. Isham
or Mr. Nelson or anyone else concerning how this transaction would
be reported by TAPE ?
Mr. Lilly. This is something that I have no knowledge of at all as
to how they reported it.
Mr. Weitz. Are you familiar with the Corrupt Practices Act of 1925,
which was then applicable ?
Mr. LnjLY. At that particular time, no. I am now, but at that par-
ticular time, I was not, and Mr. Isham was making the reports. I was
concerned about who we contributed to, which was not as detailed as
it is — certainly it was far different.
I am familiar with what goes into the report. He wanted people
identified and various other things, State and Federal people, because
he did not have this information. But the actual report itself, Mr.
Isham prepared it, and I did not ha\'e that much knowledge of it.
Mr. Weitz. Was it ever discussed whether or not it would be
reported at all, quite apart from
Zvlr. Lilly. I do not know. To my knowledge, it was not reported
with me, if it was ever to be reported at all.
5918
Mr. Weitz. Was it ever explained to you as to why the contributicHi
was made in cash ?
Mr. Lilly. No.
Mr. Weitz. Did you ever ask ?
Mr. Lilly. I did ask why we could not go with TAPE, and why we
could not use checks. We had money in 20 States, $5,0()0 in each, or
I could set up special people and argued a considerable length of time
with Mr. Nelson about this.
Mr. Weitz. Did you argue with him before August 1, or in December
before the loan was actually taken ?
Mr. Lilly. This was in December — before the loan was taken.
Mr. Weitz. So when it was originally proposed to you in July you
followed through, and there was no discussion of alternative ways of
making a contribution?
Mr. Lilly. Not to my memory.
Mr. Wbitz. And at that time, you did not ask why it had to be made
in cash?
Mr. Lilly. No.
Mr. Weitz. Do you know who proposed that it be made in cash?
Mr. Lilly. No; I do not.
Mr. Weitz. Mr. Nelson merely came to you with the decision that it
Avas to be made in this fashion ?
Mr. Lilly. And delivered to Mr. Semer.
Mr. Nicholas. On the cash part of it. Bob, or Mr. Lilly, let me ask
you this. Did anyone make any decision as to the amount of bills that
it would be made in — you say, like $100 bills?
"WHiere did that come from ?
Mr. Lilly. When I called Mr. St«tler at the bank
Mr. Nicholas. If you know,
Mr. Lilly [continuing]. He told me it would be in $100 bills. This
was my first knowledge that it would be in $100 bills.
Mr. Nicholas. Mr. Stetler told you ?
Mr. Lilly^ Mr. Stetler at the bank.
Mr. Nicholas. And Mr. Stetler, as I understand it, was president of
the Citizens' National Bank at Austin, Tex., at that time ?
Mr. Lilly. That is right.
Mr. Nicholas. Do you know of your own knowledge that that bank
was owned or controlled by Jake Jacobsen and Joe Long ?
Mr. Lilly. That is true.
Mr, Nicholas. Were they the majority stockholders, if you know ?
Mr. Lilly. They were major stockholders.
Mr. Nicholas. Was Jake Jacobsen, at that time, attorney for AMPI
or rather MPI?
Mr. Lilly. Yes; he was an attorney, that would have been AMPI.
And he was on a retainer for being an attorney for AMPI.
Mr. Nicholas. Was there any discussion at that time as to the type
of $100 bills that would be used in this contribution, gift or donation,
or whatever it turned out to be ?
Mr. Lilly. Well, Mr. Stetler told me that it would take several days
to get the money together. He would attempt to get older bills, and he
would attempt to get the money together Ix^cause if he too]<: — he named
n tiiifiiie in dollars. If vou take so nuuiv dollar.s out of a bank, the
5919
Federal banking authorities are going to start looking into it, as to
how many $100 bills come out of a particular bank and why.
This is why he wanted some time to accumulate it.
Mr. Nicholas. You were not talking to Jake Jacobsen at this time ?
Mr. Lilly. No; I talked to Mr. Stetler.
Mr. Nicholas. Mr. Stetler — is Mr. Stetler still with the bank ?
Mr. Lilly. No ; he is not.
Mr. Nicholas. Mr. Stetler then, I assume, did not relate to you as to
why he wanted to collect the $100 bills, as to who — I mean, he did
not relate to you if anyone had told him or advised him to do it in this
manner?
Mr. Lilly. No ; he did not.
Mr. Nicholas. He just told you how he was going to do it ?
Mr. Lilly. True.
Mr. Nicholas. Was anything said about serial numbers on the $100
bills?
In other words, was there any purpose in having different types of
$100 bills — old money, new money, money from different banks, and
so forth ?
Mr. Lilly. He probably meant to indicate this by his statement to
me, but when he said he had to collect it from a number of banks over
a period of time to keep from attracting attention, I would have to
assume that. But he did not tell me as much.
Mr. Weitz. Let me ask you concerning your transaction with Semer.
When you gave the money to him, what did you tell him, or what did
he tell you about it ?
Mr. Lilly. Of course, we had had a prior conversation, and he was
aware of my delivery of — truthfully, I do not know if I mentioned the
$100,000 figure to him. Possibly, I did.
I do remember asking him if he cared to count it, and he said, "No."
But outside of that, it was a short conversation; truthfully, it just
was not a, very long conversation.
Mr. Weitz. If you told him the amount of contribution, did he ex-
press surprise ?
Mr. Lilly. No ; he did not.
Mr. Weitz. Did he open the satchel in any way to see what was
there?
Mr. Lilly. I do not remember him even opening the briefcase.
Mr. Weitz. Did he give you a receipt ?
Mr. Lilly. No.
Mr. Weitz. Had you asked for one ?
Mr. Lilly. No; I knew him to be a partner of Mr. Jacobsen, as far
as law partners are concerned, in Washington.
Mr. Weitz. At any time, either before or after delivery to Mr.
Semer, did he ask you about the reporting requirements in connection
with the transaction, whether TAPE had. been given names of com-
mittees or otherwise provided with information to report it ?
Mr. Lilly. I think he did, at some time, ask me how it would be re-
ported ; if it would be reported by the committee.
Mr. Weitz, Would it have been in the conversation in which he said
he dropped off the package in California?
Mr. Lilly. It could well hp.ve been, because I remember him asking
how we reported it.
5920
Mr. Weitz. So he did ask that once. What did you tell him ?
Mr. Lilly. I do not know.
Mr. Weitz. You say you were not familiar with the reporting
requirements of the 1[^25 act ?
Mr. Lilly. [Nods affirmatively.]
Mr. Weitz. Would you have been able to tell him an3^thiiig?
Mr. Lilly. Well, I was familiar to the extent that you mean the
times or the days of the year that it was reported. I was aware of the
fact that there was a limitation on how much you can contribute.
Mr. Weitz. How much was that limitation ?
Mr. Lilly. It was $5,000 to any one candidate, in any one year.
Mr. Weitz. In fact, in December, when you meant to talk this matter
over with Mr. Nelson, you yourself suggested that they could break
down the $100,000 to 20 different committees ?
Mr. Lilly. That is right.
Mr. Weitz. Now, when you picked the money up from Mr. Stetler,
was Mr. Jacobsen thei-e ?
Mr. Lilly. He could possibly have been. But I do not remember
his being there.
Mr. Nicholas. On that point, let me ask you this.
"VNHien you picked up the money from Mr. Stetler at Citizens' Na-
tional Bank, did you say that Mr. Stetler insisted on counting the
money ?
Mr. Lilly. He insisted on counting the money.
Mr. Nicholas. Where was it counted ?
Mr. Lilly. It was counted in Ins office. He drew the curtains in his
glass-caged office, and he counted the money in his office.
Mr. Nicholas. Do you recall the time of day ?
Mr. Lilly. No. It seems for some reason, I have nothing to verify
this, it seems it was near closing hours of the bank.
Mr. Nicholas. Do you recall how the money was packaged? Was
it in
Mr. Lilly. In wrappers, $1,000 per wrapper.
Mr. Nicholas. $100 bills in $1,000 wrappers?
Mr. Lilly. That is how I remembei- it.
Mr. Nicholas. How long did you remain in ^Ir. Stetler's office
counting the money with him ?
Mr. Lilly. I do not remember this. I know that we counted each
package.
Mr. Nicholas. Did Mr. vStetler have any comment to make about
the money at that time ?
Mr. Lilly. No, he had none.
Mr. Nicholas. What was the money actually in? "N^Hiat was it con-
tained in?
Mr. Lilly. Oh, in a briefcase. It was put into a briefcase.
Mr. Nicholas. Do you remember the color of the briefcase ?
Mr. I^iLLY. No, I do not remember tlie color. It was not my briefcase.
They had provided a briefcase at the bank.
Mr. 'Weitz. When you delivered the money to Semer, you left the
briefcase with him ?
Mr. Lilly. I left the briefcase with him.
Mr. Weitz. Let me mark exhibit No. 1, and show it to you.
[Whereupon, the document referred to was marked as Lilly exhibit
No. 1 for identification.*]
• See p. 5990.
5921
Mr. Weitz. Tliis is a copy of a debit memo from Citizens' National
Bank, dated Au.a;ust 1, 1969., in the amount of $100,000, and it reads,
"Receipt of $100,000 cash acknov/Iedged this 1st day of' August 1969,
per instructions of Bob Tsham by" and there is a signature which
I appears to be "Bob A. Lilly.-'
Have you ever seen that ?
Mr. Lilly. Yes, I have.
Mr. Weitz. Is that a copy of the debit memo which you signed
that day? ' "^ "
Mr. Lilly. Yes, that is, and that is my signature.
Mr. Weitz. Now, I would like to turn back again to the events in
December of 1969, around the time when the loan was taken out, and
the funds transferred. Before the 17th, can you recall how you first
learned that this transaction was contemplated ^
Mr. Lilly. The transaction of the
Mr. NiCHOLuVS. Do you mean the transaction of the loan ?
I Mr. Weitz. That is right, the December 1969 transaction.
f _ Mr. Lilly.- No. I really cannot. I know that I had some conversa-
tion with Mr. Nelson about it ; the problems about the $5,000 limita-
tion. But I really do not have a great deal— I cannot remember a great
deal about it.
Mr. Weitz. Do you remember speaking to Bob Isham specifically
about the way in which you would be repaid for the loan ?
Mr. Lilly. Yes. We had a discussion at that time as to how it would
be repaid. Mr. Isham, at that time, had moved to San Antonio. His
office was located there, and he did draft a proposal as to how the
money would be repaid.
^ The note would be made for 60 days, the latter part of December,
the year of 1969, a portion of the money would be recovered through
a series of attornej^s; and then in 1970, another series of money would
be recovered m attorneys, and reduced to writing, some names of attor-
neys. Some of them would be contacted by DeVier Pierson. He was to
contact some of them, or I was to contact some of them to see if they
would.
In addition to that, he also suggested that myself and three other
employees would be given bonuses— not bonuses, salary advances, or
bonuses or expense advances— of $5,000 each to make up for $20,000 of
It. And then, Mr. Isham had, I believe, it was eight attorneys that we
would— he wrote down the figure $10,000: that means if we got $5,000,
he would be paying him back $10,000 to cover the tax situation.
Mr. Weitz. And if it was $10,000, you would be repaying them
$20,000? f J s
Mr. Lilly. Right, it would be double.
Mr. Weitz. Let me show you what I will mark as exhibit 2, which is
the xeroxed copy of wliat appears to be some writino- on, perhaps,
|a yellow pad, some legal-sized paper.
[Whereupon, the document referred to was marked Lilly exhibit
No. 2 for identification,*]
^ Mr. Weitz. Could you identify this as to what it is, and whether you
have seen it before ?
Mr. Lilly. Yes. It was on yellow paper. It is Mr. Isham 's writing;
insofar as tlie attorney's names, the amount of money, the asterisks
* See p. 5991.
5922
as to who to contact, what Lawyer, DeVier Pierson's Washington
telephone number are all his writing.
There are some other notes around the edges of it.
Mr. XicHOLAS. Whose writing ? DeVier Pierson's ?
Mr. Lilly. Robert Isliams writing. And the other writing around
the edge of it is my writing, and it indicates that I contacted Joe
Long and Frank Masters, because 1 see my OK, and this is my writmg,
and checkmark that appears to be made by me, that I did contact them
regarding this.
Mr. Weitz. And as to the others, which do not have any of your
markings next to them, they wolild have been contacted either by Mr.
Pierson or someone else ?
Mr. Lilly. Or by Bob Isham, I presume.
Mr. Weitz. Do you recall when this document was drawn up, or
when you first saw it ?
Mr. Lilly. It was drawn up at the time, right at the time, the note
was drawn up in December. I mean, this was how the money would be
paid back ; a personal note would be made, and this is how it would
be recovered and paid back within the 60-day period.
Mr. Weitz. "^Miy are there two columns next to the list of persons;
one marked 1969 with a series — $10,000 and a series of checks under-
neath it, and under 1970. another $10,000 written with a series of
checks marked beneath them ?
Mr. Lilly. On this, of coui-se, this would be^ — we would divide it
in years for one thing as far as reporting ^vith attorneys and ^'larious
other people, and they would recover a portion of it this year. They
would recover a portion of it in the next calendar year of 1970; of
coui-se, which totals $80,000.
And this would repay half of it [indicating] or approximately half
of it; and this column [indicating] in 1970 would repay approximately
one-half of it. as four people — Lilly, Parr, Anderson, Suttle with
$5,000 each. That would be $20,000.
I suppose it says "expense advance."' To recover $100.000 ; I mean
this was his determination of how the $100,000 would be paid back.
There is nothing figured in there for interest on the money. It is just
a total, $40,000 in 1969, $40,000 in 1970, that would be $80,000 and then
$20,000 here would be $100,000, that had to be paid back.
Mr. Weitz, T^^lat vou are saying is since the figures were all doubled,
it is actuallv $80,000 in 1969, $80,000 in 1970 plus the $20,000 expense
advance and that the company, it would be envisioned, would have to
pa-y to these individuals through billings; approximately $180,000 for
the original $100,000 loan ?
Mr. Lilly. That's right.
Mr. Weitz. Was it clearly understood in your conversation with
Mr. Isham that these attornevs would be making payments to vou, and
would in turn recoup throu<rh excess billings to the company?
Mr. Lilly. That is right. It would be. and further for the most part,
it was discussed that thev should be in cash.
Mr. Weitz. I see a note in here Avhere it savs, "check or cash to Bob
Liilv.''
Mr. Limy. Riffht.
Mv. Wk.itz. Whose writing is thai ?
5923
Mr. Lilly. That is my writing,
Mr. AVeitz. So you say it could be either in check or cash, but that
J you decided that it woukl be preferable if it were in cash?
* ]Mr. Lilly. Preferable in cash, yes.
Mr. Weitz. Did you talk to DeVier Piereon about this directly?
Mr. Lilly. I do not remember at the time. I have talked to De-
\'ier numerous times, but I do not remember talking to him
Mr. Weitz. Was this document prepared and did your conversa-
tion with Mr. Tsham take place before the loan was actually taken
out ?
Mr. Lilly. To my memory, yes. it was.
Mr. Weitz. We will get back to that arrangement in a minute. I
would first like you to identify certain documents. Let me mark
document No. 3, whicli is-— appears to be— a Xeroxed copy of a note
. and several renewals ; the first note in the amount of $100,000 is dated
- December 17, 1969, and it is signed ''Bob A. Lilly."
[Whereupon, the document referred to was marked Lilly exhibit
No. ?> for identification.*]
Mr. Weitz, And there is typed on it, "Cei-tifieate of Deposit No.
188."
Is that the loan and subsequent renewal notes represented for that
oiiginal $100,000 loan ?
Mr. Lilly. It is. That is for the $100,000 loan.
iNIr, Xk'holas. Before you get into the note, there is one thing that
I would like to get on the record, that I am confused about. In your
.i^stions to iMr. Lilly about the $10,000 beside each attorney's name,
uich totals $80,000 "in 1969, and the $10,000 by each of their names,
■iuit totals $80,000 in 1970; the question that bothers me is this that
I want cleared up. ,
Was tlie amount of $80,000 theoretically to be billed by the attor-
vs to AMPI, or was it MPI at that time f
Ml-. Lilly. It was AMPI.
Mr. Nicholas. The $80,000, was only $10,000 of that supposed to
go to payment ?
Mr. Lilly. That is true. This [indicating] was the figure, the
amount of money that it would actually co.st AMPI.
Mr. Nicholas. In order to be clear, look, for instance, if Stuart
. Russell billed AMPI $10,000 at this particular time in 1969, then
1=^ AMPI would then send Stuart Russell $10,000. Is that correct ?
Mr, Lilly, That's right,
Mr. Nicholas. As an example?
II Mr. Lilly. Right.
T Mr. Nicholas. Then Stuart Russell would then give you back, if
you were the party involved, the $5,000 to apply to the note?
]\Ir. Ltlly. That is right.
Mr. Xtciiolas. Not $10,000?
Mr. Lilly. That is right. It didn't work tluit way in every instance,
but that is what tliis was designed
JSIr. Nicholas. Tliat was the theory?
Mr. Lilly. That was the theory.
^Ii'. Weitz. Let me interi-upt for a minute. Now. on the same piece
of paper, erhibit 2, there is an asterisk to the figure of $100,000 under
* See p. 5392.
5924
the 1969 column and the asterisk footnote reads, "To be deposited
before 12-31-69 in TAPE."
Let me ask you a few questions about that. First of all, do you re-
call whether, in fact, it was originally contemplated the money would
be repaid directly to TAPE without the necessity of you making a
$100,000 loan?
Mr. Lilly. Not to my knowledge, and I think the asterisk — when he
talks about the $100,000, he is referring to the $100,000 note to be de-
posited; so that it would be clear, and TAPE would show that no
money had been taken out of it.
Mr. Weitz. So you are saying that at the time this was drawn up,
the note to make TAPE whole before the end of the year was already
contemplated ?
Mr. Lilly. That is true.
Mr. Weitz. And this procedure, since it says "check or cash to Bob
Lilly" at the top, was clearly to repay you after TAPE was whole?
Mr. Lilly. Yes.
Mr. Weitz. Was it contemplated that the $100,000 would be repaid
to you all in 1969, and then the excess taxes billed to these attorneys
in 1970; or were they, in fact, only to give you $50,000 in 1969, and
$50,000 in 1970?
Mr. Lilly. The note was 60 days, and if my memory serves me right,
and as I remembered it, tlie moneys would actuail)' be paid back in the
2-year time within the 60-day framework.
Mr. Weitz. Would that also, for example, enable the attorneys to
spread their tax burden over a 2-year period ?
Mr. Lilly. That is true.
Mr. Weitz. But it was contemplated, nonetheless, that they would
complete the transaction by, for example, February 17 — February 15,
maybe, in 1970?
Mr. Lilly. That's right.
Mr, Nicholas. Now, on that point, when this list was made up,
whenever it was made up, were any of these attorneys listed on this
list, that is exhibit No. 2 ? Were they a party to this ?
By that, I mean were they there ?
Mr. Lilly. None of them were present.
Mr. Nicholas. Had they been consulted ?
Mr. Lilly. I do not know that.
Mr. Nicholas. Do you mean that you and Mr. — did Mr. Isham
just write down the names ?
Mr. Lilly. No. When I met with Mr. Isham, he had the names. Ap-
parently, he had had a conversation with Mr. Nelson or with someone, I
am not sure who, and then he had these names. He drafted them down,
and asked me about the Gary Evat, E-v-a-t, question mark. He was
a young attorney with Jacobsen and I>ong.
And I said no, that you could not include him or you should not in-
clude him. So he was not a part of this. He then discussed the entire
operation. None of the attorneys were present.
He said — maybe he told me how to talk to DeVier or he would talk
to DeVier Pierson, and DeVier was to — it was clearly my understand-
ing that DeVier was to contact them, and so far as T know, he did con-
tact those marked with a "I".
5925
Mr. Nicholas. In order to bring this into the proper focus, in con-
text, earlier in your testimony, you testified, I believe, that attorneys
had put input into the organization and how to make contributions
and so forth. You mentioned DeVier Pierson, Joe Long, Stuart Rus-
sell, Jim Jones, Dick Maguire, et cetera.
Mr. Lilly. That's true.
Mr. Weitz. I think the record will show he only mentioned three
individuals ; Ted Van Dyk, DeVier Pierson and Jake Jacobsen.
Mr. Nicholas. My question is, "Whosever name the record does
reflect on this, would this have been part of the advice given by those
attorneys at a time prior to the time their names were listed on exhibit
No. 2?
Mr. Lilly. No, their input at the time that I mentioned the attor-
neys' names was when we were trying to establish, create what later
became known as TAPE, the veliicle for TAPE.
Mr. Nicholas. So then at this particular time, your memory is that
you do not really know whether or not any of these attorneys were
actually contacted by anybody, anyone in the organization ?
Mr. Lilly. No.
Mr. Nicholas. You did not contact them ?
Mr, Lilly. Evidently, I contacted two attorneys. I have an "OK"
and an "OK" by Joe Long and Frank Masters, and that is my writing.
And to me, this indicates that I must have.
Mr. Nicholas. But this writing of yours would have been put on
exhibit No. 2 after exhibit No. 2 was originally created by Mr. Isham ?
Mr. Lilly. It could have been that all of these notes were put on
after. They could have been put on at that time.
Mr. Nicholas. Your handwriting was put on at a subsequent time ;
is that correct ?
Mr. Lilly. This may have been a time when I might have collected
some money from them. I do not know.
Mr. Nicholas. All right.
Now, for instance, and to keep it in proper context, with the exhibit
2, take for instance Frank Masters, did you ever talk to Frank Mastei-s
about this plan ?
]Mr. Lilly. No. I talked to Frank Masters, and told him that I
needed money, and he was aware of it. He did deliver me some
money.
Mr. Weitz. I think that we will get into, over a period of time, each
individual person on this list, and the transactions that transpired.
Before we leave the exhibit, though, in the upper left-hand corner is
scribbled — it seems to be "February, March 15 to 26, April, May, July,
September 4 to 9; and October." Do you know what that means?
Mr. Lilly, No, I do not.
Mr. Weitz. Is that your handwriting ?
Mr. IjIlly. It is my handwriting, yes.
Mr. Weitz. Would that have been written on there at a different
time than the other handwriting of yours on this document?
Mr. Lilly. To me, yes, because of the different weight pen that
might have been used at the time. I do not rem^ember. It has no
significance to me.
Mr. Weitz. I would like to mark for exhibit 4. a security agreement
dated December 17, 1969, and the debtor's name is Bob A. Lilly in the
5926
amount of $100,000, and it pledges a Citizens' National Bank certificate
of deposit, No, 188 in the amount of $100,000 in the name of Milk
Producers. Inc. And it is signed "Milk Producers, Inc. by Bob A.
Lilly."
[Whereupon, the document referred to was marked Lilly exhibit
No, 4 for identification.^]
Mr. Weitz. Have you seen this document, and is that your signa-
ture?
Mr, Lilly. Yes, I have seen the document, and that is my signature.
It is rather hard for me to read. It is light, but it is.
Mr. Weitz. Do you remember signing this document?
Mr, Lilly, Yes.
Mr. Weitz. Did you have the authority to pledge funds of MPI ?
Mr. Lilly. No, I did not have.
Mr. Weitz. Did you know that at the time you signed this docu-
ment ?
Mr, Lilly. Yes.
Mr. Weitz. Did anyone explain to you what the purpose of this
document or pledge was?
Mr. Lilly, No,
Mr. Weitz. To the best of your knowledge, tlie transaction was to
be secured, if it had to be secured, by a certificate of deposit of TAPE ?
Mr. Lilly. True.
Mr. Weitz. Were you aware that MPI had previously on or about
this time purchased such a CD in the amount of $100,000?
Mr. Lilly. Yes. I do not know whether they had purchased it at
this time, but I knew they were contemplating TAPE to purchase a
Mr. Weitz. But whether MPI had such a CD ?
Mr. Lilly. No. I am totally unaware of that.
Mr. Weitz. Do you remember what document you thought you were
signing when you signed this ?
Mr. Lilly, A portion of the — well, security agreement pledging
$100,000 CD that I thought TAPE would purchase as collateral for
the loan that I had taken out.
Mr. Weitz. Let's go back then. I am going to mark as exhibit No.
5 a security agreement by TAPE for the benefit of Bob A, Lilly,
dated December 17, 1969, in the amount of $100,000, and the collateral
is stated as ope Citizens" National Bank certificate of deposit. No,
CD 219 for $100,000 issued to TAPE, And it is signed "TAPE by
Bob Isham, trustee,"
[Whereupon, the document referred to Avas marked Lilly exhibit
No, 5 for identification.^]
Mr. Weitz. Have you ever seen that document ?
Mr. Ln.LY. Yes, I liave seen it.
Mr, Weitz. To the best of your knowledge, is that Mr, Isham's
signature?
Mr, Lilly. Yes, it is.
Mr, Weitz. Do you know whether this document was executed on
the I7th or shortly thereafter?
Mr. Lilly. To my knowledge, it was executed on the I7th, but it may
have been shortly after.
1 See p. ,59S5.
=• See p. 5997.
5927
Mr. Wettz. But it was your understanding that such a pledge was to
be made in order to secure the loan to jou '^
Mr. Liij.Y. True.
Mr. Wettz. And that you Avere to be repaid directly and tlie money
was not to be repaid from the attorneys to TAPE, but rather to you,
and the loan was to make TAPE whole on the JTth or shortly
thereafter ?
Mr. LiEEY. That is right.
Mr. Nicholas. Mr. Weitz, I would like to ask Mr. Lilly a question
on those two documents, the two CD's.
Is exhibit No. 4 the MPI-purchased CD?
Mr. Weitz. Yes.
Mr. Nicholas. Is that an interest-bearing CD?
Mr. Lilly. Are vou asking me?
Mr. Nicholas. No. I am asking
Mr. Weitz. The pledge does not indicate — the security agreement
does not indicate whether it is interest-bearing.
Mr. Nicholas. Oh.
]Nfr. Weitz. However, we do ha\e a letter. Let's go off the record for
a minute.
[Discussion off the record.]
]Mr. Weitz. Back on the record.
Mr. NicTTOLAS. In reference. Mr. Lilly, to exhibit No. 4, which is the
$100,000 CD, which was apparently as I understand purchased bv
MPT, dated December 17, 1969. and exhibit No. 5, which is TAPE for-
the-benefit-of-Bob-Lilly CD for $100,000 bearing the same date, De-
cember IT, 1969 : do you understand ?
[Mr. Lilly nods affirmatively.]
Mr. Nicholas. Do vou have any personal knowledge of yoiu" own in
keeping with anv conversations, if you had any, with Bob Isham or
anybody else as to whv two CD's for the purposes of the security or
collateral of your original note for $100,000, dated December 17. 1969?
Mr. Lilly. I had a conversation with Mr. Isham at some time — early
1970, possibly in late 1969 — we discussed the fact that thei-o was an
interest-bearing CD, and it was the intention to haA'e a non-iiiterest-
bearing CD, but I do not know which.
Mr. Nicholas. In other words, you have nothing to do with the
paperwork involved in this?
Mr. Lilly. Nothing.
Mr. Nicholas. In order for the record to be clear, what were your
specific instructions as to how to borrow the $100,000, who you were to
borrow it from, and what you Avere to secure it with ?
Mr. Lilly. I was instructed by Mr. Nelson that the monev uould be
borroAved from Citizens' National Bank, that collateral would be put
up, and that I AA-ould sign the note personallv. I Avould recoAcr from
attorneys, and I aa^ouVI go to the Citizens' National Bank in Austin
to execute it.
And this is. in effect, what I did.
Mr. Nicholas. And pursuant to those instructions from Mr. Harold
Nelson, did you, in fact, go to the Citizens' National Bank, and borroAv
the $100,000 ?
^Fr. Lilly. I did,
Mr. NiCTK^LAS. Thafs all I have on that point at this time.
5928
Mr. Weitz. Off the record.
[Discussion off' the record.]
Mr. "Weitz. Back on the record.
Mr. Nicholas. Now, Mr. Lilly, on this point of the dates whoii you
delivered, and before we get too far afield from the date you actually
delivered $100,000 to Mr. Semer at the Executive Inn in Dallas, which
has been established as August, that is on August 1, 1969; had you,
prior to this time, indicated by statement to either Mr. Weitz or to Mr.
Jon A. Sale or to the Watergate grand jury a different date other than
the date which you have related here today ?
Mr. Lilly. Yes.
Mr. Nicholas. I want you to explain why there was the confusion
in the dates.
Mr. Lilly. Let me, if I may, read a statement that I had regarding
that.
"At m}'^ previous appearance before this grand jury" — this was
drafted — I have appeared before the Federal grand jury here in Wash-
ington. On what date, I cannot recall.
Mr. Nicholas. That would be on a Friday in the latter part of
October. I do not remember the date right now.
Mr. Lilly. And I made a statement at that time, that it was Decem-
ber 1, and here is where I would like to enter here
Mr. Nicholas. Not December 1 ; December 19 or 29.
Mr. Lilly. 29th, I'm sorry.
At my previous appearance before the grand jury, I testified that on Decem-
ber 29th. 1969, I picked up $100,000 in $100 bills at the Citizens' National Bank,
Austin, Tex., and delivered it to Milton Semer, a Washington, D.C., attorney at
the Executive Inn in Dallas, Tex.
After reviewing my diary for 1969, I find I was in error on the date. My diary
shows that I traveled from San Antonio to Dallas on December 29, 1969. but
no stop in Austin, where Citizens' National Bank is located. So I could not have
picked up the $100,000 on that day.
With the aid of my diary and various bank records. I reconstructed to the best
of my ability the correct sequence of events. August 1. 1969. is the date I picked
up the $100,000 in Austin and delivered it to Mr. Semer in Dallas.
My diary shows on August 1, 1969, I traveled from San Antonio to Austin to
Dallas, and on to Memphis and Humbolt, Tenn., and then back to San Antonio.
I have seen a debit receipt to the TAPE trust — Agricultural Political Education —
account signed bv me in acknowledgment of receipt of the $100,000 dated August
1. 1969.
This same receipt has a Citizens' Bank stamp dated August 1, 1969 on the face
of the receipt. Also, the August 29, 1969 statement of account for TAPE, covering
the period July 31, 1969 through August 29, 1969, shows a debit of $100,000 to
this account on August 1, 1969.
Mr. Nicholas. Now% at this time, for the record, do you wish to cor-
rect your prior statement as to the date of delivery of the $100,000?
Mr. Lilly. I do.
Mr. Nicholas. That is it was on August 1. 1969?
Mr. Lilly. And not December 29, 1969.
Mr. Nicholas. And not December 29, 1969 ?
Mr. T>iLLY. True.
Mr. NiCHOL.vs. OK.
That is all I have.
Mr. Weitz. OK. Off the record.
[Discussion off the record.]
Mr. Weitz. Rack on the record.
5929
Mr. Sanders. You have mentioned a diary. Has this diary been
shown to or made avnilable to our staff?
Mr. Lilly. Mr. Sanders — this morning', I believe it was delivered
this mornin<; — and it has been Xerox copied, and yon have the year of
1069, and possibly with 4 or 5 pages gone out of the very front portion
of it, as T remember. But you have a Xeroxed copy of that diary I re-
ferred to,
Mr. Sandeks. What vear does it cover there ?
Mr. Lilly. 1969. 1970, 1971, 1972—4 years.
Mr. Sanders. And you have possession of the original ?
Mr. Lilly. Yes. I do have,
Mr. Sanders. Prior to the time of your delivery of $100,000 to Mr.
Samer. did you learn of any circumstances whatsoever which indi-
cated to you that this contribution was solicited by any persons in the
Republican committee or the Republican cam.paign?
Mr. Lilly. I liave no knowledge of anyone in the Republican Party
or the campaign having solicited. I recall no conversation with Mr,
Nelson, or Mr. Isham, or Mr. Jacobsen, or Mr. PaiT about any
solicitation.
Mr. Sanders. My (|uestion relates to — as you may have gathered — •
to the actual way in which this thing was initiated. It appears to me
from what you said that it had its genesis with officials witliin AMPI,
as opposed to someone, some Republican official contacting AMPI for
a contribution ?
Mr. Lilly. Somewhere in the conversation in contributing to Repub-
licnns, because we had been heavily involved with the Democrats, really
was what I was intcuding to imply by my statement. I am not sure
Avhat T might have said in my statement.
This was my implicatio]i that someone within the Republican
Party — it would not be at too low a le^el. it would certainly not be
a State level ; it would have to be higher than that — had to have con-
tacted ]Mr. Xelson, and to have generated his approval, his final action
through me on this thing.
Mr. Sanders. Before the time of your delivery to Semer. did you
ever leai ii from Xelson or Parr who, in the Republican Party, might
have contacted AMPI ?
Mr. Lilly. Xo, I do not know to this day.
]Mr. S.VNDERS. But you think the rationale for wanting to make a
contribution to the partv — to the Republican Partv — was the heavy
imolvemont of A^NIPT on behalf of Democrats in 1968?
^Ir. TjIlly. This was their rationale, and it is a rationale to me, I
mean, I can rationalize it in this manner.
]\rr. Sanders. Were you personally involved in making contiibutions
to Democratic officials in 1968 ?
Mr. Lilly. Yes. T made personal contributions by personal checks
in 1968. I was reimbursed at that tiiric by ^VIPI into my personal ac-
count in 1968; nionevs. total monevs, some — I can know of records of
$30,000, of personal cliecks of over'>^20.000, jiossibly as much as $40,000
that went through iny own personal account, was expended by me on
behalf of Democrats in 1968.
Mr. Sanders. Did it appear to you that the funds, which were ex-
pended in that manner, were, in fact, A^NIPI funds as oi:)posed to of-
ficers' own moneys ?
5930
Mr. Lilly. Looking back now, yes.
Mr. Sanders. TAPE was not in existence in 1968 ?
Mr. Lellt. It was not in existence in 1968.
Mr. Sanders. So it would have been MPI as opposed to AMPI ?
Mr. Lilly. Right.
Mr. Sanders. Mr. Nelson was president that year ?
Mr. Lilly. He was general manager.
Mr. Sanders. General manager ?
Mr. Lilly. Right.
Mr. Sanders. In one of our earlier interviews, conducted by this
staff, there is mention of the contribution of $100,000 to Hubert Hum-
phrey. There is no time frame placed on it.
Do you have knowledge of when such a contribution would have
been made, or that in fact, first of all, that one was made ?
Mr. Lilly. I have some notes, and I will go into what contributions
I do have. I have some direct contributions going to Senator Hum-
phrey's campaign in 1970, and I have some records in 1971.
I have some records of 1968 of where they went into his campaign.
And the total, I am not sure.
There is another item that I will discuss while we are discussing,
and it gets into a total new area, and that is with Valentine & Associ-
ates, because this is possible — some of this money could have ended
there.
Mr. Sanders. I do not want to get into Valentine right now. I guess
what I do want to know is, if a $100,000 one-time payment had been
made to Hubert H. Humphrey, that would have stood out in your
memory and you would have known — —
Mr. Lilly. I did not make it and I have no knowledge of it.
Mr. Sanders. Aside from the Valentine possibility, do you think
other smaller payments could have totalled $100,000 ?
Mr. Lilly, I doubt it. The records that I have and the amounts
of money that I actually handled to him would not total that amount
of money.
Mr. Sanders. From on or about the date of the November 1968 elec-
tion until the time of this payment to Semer, do you know of payments
by AMPI to any other political adjuncts ?
Mr, Lilly. You are talking about political funds, as we've been talk-
ing about, handled in this manner. No, I do not, from after the election
until December 1969. There were some TAPE contributions made
during that period which were officially reported, but none of the cor-
porate funds.
Mr. Sanders. Well, before you delivered this money to Semer, did
you have only one conversation with Nelson about this subject?
Mr. Lilly. I am sure that I had more, I, truthfully, cannot re-
member. I may have said "a conversation." I^et me correct it to say that
I am sure that I had conversations, but I really do not recall and I do
not keep that in my diary. And I do not Imow.
But I must have had couA^ersations with him about it.
Mr. Sanders. And in your phone call to Semer prior to your meeting
with him
Mr. Lilly, Right.
Mr. Sanders [continuing]. Can you reconstruct that conversation?
Mr. Lilly. We had had — I cannot — I can paraphrase it, but I cannot
5931
reconstruct the conversation. I had been told that Mr. Semer would be
the one, when the money was ready, that I would be working with. I
was instructed to contact Mr. Semer.
We gave him notice, so he could make arrangements to meet me —
and to where we would meet, because this had not been determined —
and when I called Mr. Semer, I am sure it was before August 1, be-
cause he would have had to travel from Washington, D.C., to Dallas
and he would have made reservations and various other things.
So what day I called him, I am not sure. But I did tell him the time
rtr approximately the time that I would meet him in Dallas, possibly.
And the date, certainly, I recall that because he did arrive in Dallas
on that date.
Mr. Sanders. But when you first spoke with him on the telephone,
did it appear to you that he knew why 3'^ou were calling, or did you
have to explain it to him ?
Mr. Lilly. He knew why I was calling.
Mr. Sandeks. He knew ?
Mr. Lilly. Yes.
Mr. Sanders. WTiat appeared to you to be the extent of his knowl-
edge about the purpose of your contact ?
Mr. Lilly. I think that he was aware that I would be contacting him,
that I would be delivering him some money. As I remember the con-
versation, no numbers were even mentioned, but we were to meet in
Dallas. I was ready to meet him in Dallas at a certain date.
And I would say that he had had knowledge as to the amount that
it would be. as to when it would be delivered, as to where it would go
to ; because T am certain that this required him to make some contact
where he would have to deliver it to.
Mr. Sanders. OK.
Mr. Nicholas. On that point, Alan, I want to stay on the record.
Two things, Mr. Lilly : One is, Mr. Sanders has repeatedly stated in
his questions that you had made this phone call to Mr. Semer based
upon your testimony.
Mr! Lilly. Eight.
tMr. Nicholas. Do you have any independent recollection
Mr. Lilly. No, I do not.
, Mr. Nicholas [continuing]. Of having made the telephone calls?
Mr. Lilly. No. I do not.
Mr. Nicholas. Then why do you keep referring that you made the
phone calls?
Mr. Lilly. Well, T am having to assume — I think my diary shows T
did not go to Washington, D.C., during that time; certainly. I would
not have written to him. So I must have had to have telephoned him.
Mr. Nicholas. Covdd he have called vou ? The point is that.
Mr. TiiLLY. Yes, it's possible. It's quite possible he could have called
me.
Mr. Nicholas. Or could Harold Nelson have called him, and put
you on the line together, or anything of this nature?
Mr. Ltlty". That ( ould have easily have hapoened.
Mr. Nicholas. The reason I am asking these questions is because
these gentlemen, as T understand, are depending- unon you being as
accurate as you can be ; and when vou say you make a phone call, they
are going to assume that vou made it.
5932
Is there any way to check any records at the AMPI office, or the
MPI office or your telephone to find out if, in fact, you called Semer's
number in Washington ?
Mr. Lilly. I would say the only way, knowing how we kept our tele-
phone calls — we kept no record. I would say that you would have to get
it through the telephone company as to the date it was called, the bill-
ing at the office that we would have from the telephone company.
In 1969, we did not have a WATTS Ime. I assume even the WATTS
line would register the number. But this would have been in December
of 1969. I am not sure when we installed the WATTS line, so I would
say that we
Mr. Nicholas. It would be July of 1969 ?
Mr. Lilly. I mean July of 1969.
Mr. Nicholas. You keep referring to the December date, because in
your mind that is when you signed the note.
Mr. Lilly. That is true.
Mr. Nicholas. When you contacted Mr. Semer in Dallas at the
Executive Inn, did you have his room number, telephone number, and
so forth ?
Mr. Lilly, No, I went to the Executive Inn. I knew that he would
be there. I checked at the desk to get his room number and called him
on the interhouse phone.
Mr. Nicholas. Was he actually registered ?
Mr. Lilly. He was registered and in his room.
Mr. Nicholas. On or about August 1, 1969?
Mr. Lilly. That is right.
Mr. Nicholas. When Mr. Sanders asked you — had you personally
made contributions to the 1968 campaign to Hubert Humphrey or to
his reelection or for his election or political campaign for election, at
that time did you, in making your contribution — you stated you made
them out of your bank account ?
Mr. Lilly. Eight.
Mr. Nicholas. Some of them, is that right ?
Mr. Lilly. That is right.
Mr. Nicholas. Because TAPE was not in existence.
Mr. Lilly. That is right.
Mr. Nicholas. So you would write checks on vour bank account to
pay certain committees for H. H. H.. which is Hubert H. Humphrey.
And you have those checks, do you not ?
Mr. Lilly. I do.
Mr. Nicholas. During the coui*sc of tlie — after those contributions
were made, and — was there any plan to ])ay you back for the money you
were spending out of your own personal account to contribute to
Hul)ert Humphrey's campaign ?
Mr. Lilly. MPI. in 1968. was reimbursing me, either by salarv bo-
nuses, salary advances, expense advances. There were a number of tliese
checks.
Mr. Nicholas. I want to ask you this question since in the year of
1978. which is this year
Mr. Lilly. Yes.
Mr. Nicholas TcontinuiniQ:!. Has the Internal Revenue Service com-
menced a civil investigation/audit of yours and Mrs. Lilly's personal
i ncome tax retu rns ?
59^3
Mr. Lilly. They haA^e.
Mr. Nicholas. Would that be about March of 1973 ?
Mr. Lilly. March of 1973.
Mr. Nicholas. During that investigation, did the figure of $13,800
come up as to where you obtained this money from, or is there such a
figure that exists, that was text or subject matter of a dispute or con-
versation between you and Mr. Isham ?
Mr. Lilly. Yes, there was — in the Internal Revenue investigation,
that particular check has not come up, not to my knowledge. But Mr.
Isham said from the year of 1968, it had been carried forward on his
accounts receivable in 1968 and 1969.
In tlie year of 1970, on August the 27th, I wrote AMPI a check for
$13,800. It possibly might have been $13,840, but it was written on the
account at the Citizens' National Bank where these other funds had
been handled; to pay money that I could not account for the j^ear of
1968, that they had advanced me. But I had no receipts or no checks
for — apparently it went out in cash and this money went back to AMPI
to resolve these accounts receivable.
Mr. Nicholas. All right.
Now, in other words, as I understand, Mr. Isham then told you
that they were approximately $13,800 short.
Mr. Lilly. Right.
Mr. Nicholas. You could not account for these moneys ?
Mr. Lilly. Right.
Mr. Nicholas. Did Mr. Isham tell you that you would then have to
pay AMPI back the $13,800 ?
Mr. Lilly. He said it would have to be paid back ; this was discussed
with Mr. Nelson.
Mr. Nicholas. All right.
Mr. Lilly. And Mr. Isham.
Mr. Nelson informed me to go to tlie Citizens' National Bank, borrow
the money in the form of a personal note, recover the money from the
attorneys to pay the $13,800 back, or approximately $13,800—840—
back.
Mr. NichoLu\s. Did you do that ?
Mr. Lilly. I did do that.
Mr. Nicholas. Is there such a note in existence ?
Mr. Lilly. There is a note in existence.
Mr. Nicholas. Was that $13,800 paid back through the attorneys'
plan for the payment of these notes that were created by Isham and
Nelson, and whoever else created it ?
Mr, Lilly. That is correct.
Mr. Weitz. Off the record.
[Discussion off the record.]
[Whereupon, at 1 :30 p.m., the hearing in the above-entitled matter
recessed to reconvene at 2 :15 p.m. later the same day.]
Afternoon Session
Mr. Weitz. Mr. Lilly, I would like to turn to the arrangements for
repayment of the $100,000 loan. On exliibit No. 2, the name of Joe
Long appeai-s, and it is marked with a check and an OK. I believe you
said it was in your handwriting.
5934
Mr, Lilly. Yes.
IVIr. Weitz. Would you like to tell us your contact with Mr. T-^ong
or any others affiliated with him, and the way in which he repaid
moneys to you ?
Mr. Lilly. Mv. Long is a partner with ]Mr. Jacobsen. It is probably
going to be hard for me to separate the two.
On December 18, 1969, I received $5,000 cash from Joe Long. I do
not know if this came from Mr. Long and Mr. Jacobsen. or only Mr.
Long. But my notes indicate that I had $5,000 from Joe Long, but it
could be both of them.
Mr. Weitz. He gave you the money in cash ?
Mr. Lilly. Tn cash.
Mr. Weitz. Where did he give you that money ?
Mr. Lilly. I would say that he gave me the money in Austin, Tex.
That happens to be where the bank is located, and I noticed at about
that time I paid $5,000 cash on the note. T have m my notes the i2th
and the 18th, and I have on another note, the 12th and the 17th.
I would say this would be the $5,000 that I did receive from him, and
did deposit and pay on the note.
Mr. Weitz. Mr. Long's and Mr. Jacobsen 's law offices are also in Aus-
tin. Is that correct?
Mr. Lilly. True, that is correct.
Mr. Weitz. Exhibit 3, which is a copy of the $100,000 note and re-
newal note, isn't there a payment indicated on December IT, 1969, for
$5,000 curtailment of the note ?
Mr. Lilly. True.
Mr. Weitz. Is it your recollection, and since there is no other pay-
ment on the note until February, tliat that $5,000 was received by you
and paid on the note on December 17 ?
Mr. Lilly. That is true, l^ecause I have a memo that I have $5,000
cash from Joe Long at that particular time.
Mr. Weitz. Did he mention to you whether or not Mr. Jacobsen
had participated in that ?
Mr. Lilly. I do not remember him mentioning it to me. He gave me
the cash and I applied it to the note.
Mr. Weitz. Now, staying with Mr. Long for another moment, are
you aware of any subsequent payment from him ?
Mr. Lilly. Yes. Mr. Long and/or Mr. Jacobsen had a series of pay-
ments over this period. There was — the next notation that I have is
June 15, 1970, $5,000 from Jacobsen and Long.
I will change that statement. I will explain that further.
The next payment from Jacobsen and T^ong was the 12th and I7th.
a cash payment of $5,000 wliich we had mentioned. On February 2,
1970, I have a cash payment of $5,000 from Jacobsen and Long. On
August 6, 1970, two entries totaling $10,000 from Jacobsen and Long.
Then that totals $20,000 cash ^from December 17. 1969 through
August 6. 1970 from Jacobsen and Long, or Long and Jacobsen.
Mr. Weitz. Actually in each case, did Mr. Long — was he the one who
gave you the cash, or did sometimes the money come from Jacobsen?
Mr. Lilly. At one time. Mi'. Long and Mr. Jacobsen gave me a check.
I believe each one of them happened to l>e for $2,500 cash.
I went to anotlier bank in Austin. I believe it was Community Na-
tional, a bank also that they had a major interest in, and cashed two
5935
checks without having endorsed them. They were made out to "cash,"
and the two of them totaled $5,000. Mr. Jacobsen was present at that
particular time in the office where I picked up the checks.
Mr. Weitz. What was the name of the bank, Community National ?
Mr. Lilly. Community National, I believe, is the name of the bank.
They have controlling interests in three banks in Austin, but I believe
it was Community National.
Mr. Weitz. What was the third bank ? You mentioned the Citizens'
National Bank and the Comnumity National.
Mr. Lilly. Citizens' National, Community National and the First
State Bank, or it might be the First National Bank. It is in south
Austin ; that is all I remember.
Mr. Weitz. Do you recall the approximate time when you cashed
those checks in Mr. Jacobsen's presence ?
Mr. Lilly. He was not present. I picked up the checks from him, and
Avent to the bank alone.
Mr. Weitz. You said at one point though, because you did not en-
dorse them, that Mr. Jacobsen was, in fact, present at Community Na-
tional Bank with you.
Mr. Lilly. No. If I did, that w^as an error. I went to Mr. Jacobsen's
and Mr. Long's office. Both of them were present. They gave me two
checks made out to "cash," $2,500 each, and I in turn went alone to
the Community National Bank. They called an officer, and told them
that I would be coming out there, that I had two $2,500 checks, and to
cash them for me.
And I went to the Community National Bank, and I was alone.
Mr, Jacobsen was present when the checks were given to m.e.
Mr. Weitz. At this point I think it would be useful to enter into an
exhibit a number of items: First, exhibit No. 6, which is a schedule
compiled by you of various note transactions, and transactions with
these various individuals and others. And this is prepared by you ?
["Wliereupon the document referred to was marked as Lilly exhibit
No. fi for identification.^!
Mr. Lilly. Prepared by my accountant that worked for me there
with AMPI.
Mr. Weitz. T\'Tien was this prepared ?
Mr. Lilly. Within the last 2 weeks.
Mr. Weitz. But you have reviewed this, and this is accurate to the
best of your knowledge ?
Mr. Lilly. To the best of my knowledge and ability, it is accurate.
Mr. Weitz. Let me mark as exhibit 7, xeroxed copies of two checks,
both on the account of Jacobsen and Long, one for $2,000 written to
Joe Long ; one for $3,000 written to Jake Jacobsen, both signed by Eula
Bulkley, B-u-1 — it looks like B-u-1-k-l-e-y. And the endorsements on
the back of one is Joe R. I^ng and Bob A. Lilly, and the other is Jake
Jacobsen to Bob A. Lilly.
[Whereupon, the documents referred to were marked Lilly exhibit
No. 7 for identification.^]
Mr. Weitz. HaA-e you seen those checks ?
Mr. Lilly. That is my signature, there is no doubt that I have seen
those checks, and they compare to the date that I reduced those to cash
at the Citizens' Bank.
1 Se« p. 5999.
2 See p. 6002.
5936
Mr. Weitz. Does it refresh your recollection, that perhaps you cashed
those checks with one or more of those gentlemen at the bank, or even
without them, in order to make the payment ?
Mr. Lilly. I would not have had to have had either one of them
present at the bank. One of them could have been present. I do not
really recall that this was the way. I really thought it was in cash until
you showed me this, and T really cannot recall if one of them was with
me or not. But I did know some of the principal officers at the bank, so
it would not have been — I notice my name is on the
Mr. Weitz. Now, in exhibit 6 on the third page with the schedule of
payments to you from Long and Jacobsen, you have one payment ol
$5,000. This would probably be received or deposited on June 15, 1970.
I show j'ou, and I mark as exhibit No. 8, a xeroxed copy of two checks
dated June 12, 1971, to Jake Jacobsen in the amount of $2,875 ; another
to Joe R. Long in the am.ount of $2,125 ; again, signed by Eula Bulkley,
and the back one is endorsed Joe R. Long, for deposit only, paid to the
order of the First National Bank, Bob A. Lilly.
And the second check is endorsed Jake Jacobsen, pay to the order of
First National Bank, Bob A. Lilly.
[Whereupon, the documents referred to were marked as Lilly exhibit
No. 8 for identification.*]
Mr. Weitz. Do you recognize these checks, and are those your sig-
nature endorsements on the back ?
Mr. Lilly. Yes; they are my endorsements, and I do recognize the
checks. I have reason to. I show" this as cash. Those did go into my own
personal bank account at Evant, Tex. I do have a check for $5,000 from
Evant, Tex., to the Citizens' National Bank at Austin. Tex., bringing
the $5,000 back out. And I have it on this at the 6th and 15th of 1970.
So this went into the wrong account. It did come back out.
Mr, Weitz. But you deposited it in that account, didn't you ?
Mr. Lilly. I did.
Mr. Weitz. Is there any reason that you deposited it first in that
account ?
Mr. Lilly. No. I really thought that the checks had been sent from
Jacobsen and Long to this bank in Evant, Tex., but evidently I en-
dorsed the checks and sent them myself. Then when I did realize it,
I wrote a check for $5,000. It was within one day or two. It came back
into the Citizens' National Bank,
Mr. Weitz. Now, on your summary sheet on exhibit 6, as you say,
you show a total of $20,000 cash pavm'ents on the notes plus this $5,000
payment on or about June 15. 1970, for a total of approximately
$25,000.
"^^^at was the purpose of the June 1970, $5000 payment? Did that
go to-
Mr. Lilly. The June payment went to the loan on note transactions,
on June 15, 1970, on payment on notes; on the note transaction portion
of it. there is a payment on that particular date of $7,503.77; $617.27
interest.
It was either at that particular time, or on August 6. 1970. when a
payment was made on that note of $55,488.50, with $408 interest paid.
And it has been identified as
Mr. Weitz. Off the record.
[Discussion off the record.]
• Sep p. 600.^.
5937
Mr. Weitz. On the record.
Mr. Lilly. The $5,000 check that had been erroneous!}' deposited in
my personal account at the First National Bank at Evant, Tex., was
withdrawn. I would say, within 1 Aveek. I am not sure of the exact date
of the check, and it Avas made payable directly to the Citizens' National
Bank and paid on the note.
It Avas not deposited, and one of these note payments Avill reflect that
particular payment.
Mr. Wp:itz. Did you ever discuss. AA'ith either Mr. Jacobsen or Mr.
Long, the purposes for Avhich these payments AA-ere going?
Mr. Lilly. No. I have discussed political contributions. I needed
to make a payment on a note at Citizens" National Bank. I needed a
political contribution for some reason, outside of making a political
contribution, I am not sure that I did discuss as to AA'hat they would
be going for.
I had reason to belicA-e that they AA^ere officers in the bank; which
they Avere. Loans of $100,000 having been made, it must haA^e been
discussed at a board of directors meeting, and of course, they were
both on the board of directors.
]\Ir. Weitz. lYhen you say you just told them for ix)litical purposes,
did you tell them that or— —
Mr. Lilly. No ; I told them this. I told them for political purposes.
Mr. Weitz. Both Mr. Long and Mr. Jacobsen?
Mr. Lilly. I could make telephone calls. "I need some cash for polit-
ical purposes."
Mr. AVeitz. Well, how would you put it? That does not exactly ring
true.
Would it be more likely that you say "for some contribution"?
Mr. Lilly. For a contribution, "I need some money for a political
contribution."
Mr. Weitz. Would you normally tell them who or Avhat it was for?
Mr. Lilly. No.
Mr. Weitz. But you would say it in those general terms?
Mr. Lilly. General terms, yes.
Mr. Weitz. Was it also ever discussed with them that they could
recoup these funds through excess billings to the firm ?
Mr. Lilly. No, I did not discuss it with them.
Mr. Weitz. Are you aAvare whether anyone else discussed it with
them?
Mr. Lilly. Not from personal knowledge.
Mr. Weitz. Are you aware, if in fact — whether any of these pay-
ments Avere recouped by them, or whether there were any invoices from
the firm o^ Jacobsen and Long that Ave re reflected in some of these pay-
ments?
]\Tr. Lilly. There were invoices from Jacobsen and Long. A number
of them came across my desk with my initials on them for approval
for payment. There might be some correlation betAveen the dates that
they made ach^ances to me and the dates on AA-hich they billed. ^
I haA'e not had the privilege of looking at their checks to see if there
is a correlation, but possibly there is. and those particular documents
would have, probably, crossed my desk, and most of the Jacobsen and
Long bills crossed my desk for approA-^al for payments; be it for this
or for other purposes.
5938
Mr. Weitz. For example, let me mark as exhibit 9, and ask you about
a voucher and a copy of a check. The ^'oucher is from Jacobsen and
Long in the amount of $10,000 dated January 6, 1970. It is approved
by perhaps, Robert Isham. I am not sure. I will have you identify that
in a moment.
There is a Xerox of a note attached saying. "Bob Isham." This is a
special billing from Joe Long, and the check is written for $10,000,
Jacobsen and Long, on January 20, 1970.
[Whereupon, the documents referred to were marked as Lilly ex-
hibit No. 9 for identification.^]
Mr, Weitz. Can you identify that for us?
Mr. LiixY,. Yes, I can identify it. It is one of the repayments; the
writing, "Bob Isham. This is a special bill," indicates to me. from
some of the advances that Jacobsen and Long had given, that this was
to pay them back for the $5,000 that had been contributed on Decem-
ber 17, 1969.
Mr. Weitz. Are you fairly certain that that would be the repay-
ment for that $5,000 ?
Mr. Lilly. I am fairly certain that it would be.
Mr. Weitz, All right.
Is that your handwriting, that note to Bob Isham ?
Mr. Lilly. That is my handwriting.
Mr. Weitz. That is your handwriting, so presumably
Mr. Lilly. And I say that I approved the bill. Here's my "OK —
B.A.L."atthetop.
Mr. Weitz. And who is the [indicating] ?
Mr. Lilly, It says approval of payment, R. V. would be Hon Yoss,
Bob Isham's assistant there in the office at the time, assistant comp-
troller.
Mr. Weitz. I want to mark for identification exhibit 10, another
check to Jacobsen and Long in the amount of $10,000. It is dated April
25, 1970, and the attached billing for a particular piece of litigation
from Joe Long, and the bill dated April 21, 1970, is addressed to you.
[Whereupon, the docimient referred to was marked Lilly exhibit
No. 10 for identification.^]
Mr. Weitz. Could you look at that and see whether that is for
legitimate pui-poses, or part of this payback scheme for those
purposes?
Off the record.
[Discussion off the record.]
Mr. Weitz. Let's get back on the record.
Tjooking again at exhibit 10, do you recall what this payment may
have been for ?
Mr. Lilly. Exhibit 10, which is a $10,000 check to Jacobsen and
Ix)ng, OK'd with my initials, and sent to Bob Isham for- a payment.
I would be convinced from looking at my notes on February 2, 1970,
I have $5,000 cash having come in from Jacobsen and Long and that
would be a billing for Februarv 2, 1970.
Mr. Weitz. Just as a general matter, Avould you approve all of their
checks that came in, or only the ones that were repayments to you or
some of both ?
1 See p. 0004.
2 See p. 6007.
5939
Mr. Lilly. Some of both that I would approve. At times, I would
have Mr. Nelson approve them. If I felt that I really was not totally
aware of what might have happened, or that he should be aware of
what was happening, and I Avould go to him. And you will find some
of the billings with my initials, and his initials on it.
I, too, discussed it with Bob Isham, and he felt that this would be
a mucli l>etter situation if I cleared some of the billings with Mr.
Nelson.
Mr. Weitz. So the only way you would be able to tell as to particular
reimbursements from them, would be to look at each individual?
Mr. Lilly. I would have to tie it back, that is right.
Mr. Weitz. In general when you received a payment from them,
would they tell you specifically when they were going to seek reim-
bursement from that, or would you arrange it directly with Isham?
How would they be reimbursed ?
Mr Lilly. There was no prearranged — I would get cash from
Jacobsen and Long, and a billing would come in, and of course, a
great many of them ci-ossed my desk. And of course, it would be paid
off, and I would not l>e aware of the time they were going to bill or
the amount they were going to bill at the time.
There was no discussion between Jacobsen and Long or myself on
that.
Mr. Weitz. All right.
I have exhibit No. 11 marked for identification; check and voucher
dated July 22, 1970, for $22,000 from Jacobsen and Long, and the
breakdown on the attached invoice, which is approved bv you, indi-
cates a $10,000, a $6,000, and a $6,000 matter.
[Whereupon, the documents referred to were marked Lilly exhibit
No. 11 for identification,*]
Mr. Weitz, Looking at that, can you identify whether any of those
payments were recoupments for money to you ?
Mr. Lilly. I would be inclined— $iO,Odo portion of the $22,000 bill-
ing from Jacobsen and Ix)ng on July 16. I Avould tliink would refer
l)ack to the June 15, 1970, contribution for i)olitical purposes that they
made. It was in a check form. It went to Evant, Tex., and later back
to the bank.
Mr. Weitz. You do not know that for a fact, but you assume that
because it follows about a month after the earlier payment ?
Mr. Lilly. Yes; and it is an even amount.
Mr. Weitz. I have — and rather than go through each lengthy pe-
riod— I have a series of checks. There are 20 checks here and invoices,
and each of these indicates, as part of their billing, in various amounts
as much as $5,000, and the majority of them, $1,500 each, are designated
as "professional services rendered in excess of the amount covered
by the retainer," and on each bill there is a retainer of $2,500; and
these various amounts for. as I say, professional sei'vices rendered in
excess, and some or all o*" them — some ai-e also Olv'd by you.
Now, do you know whether in everv case when they billed in this
fashion, it would be for rei)ayment to you to recover payments made;
and would only some of them be
INIr. Lilly. Only some of them. A general thing following approxi-
mately 2 oi- .'') weeks, or 1 month behind the time, when others would
* See p. 6010.
5940
be the retainer, which was $2,500; and those fees in excess of retainer
usually would pertain to flights to Washino:t()n, D.C., or some other
point, or to represent AMPI in some other capacity, legitimately, many
of them would be — -and I, too, would have approved those as well as
other billing's,
Mr, Weitz. Do you have any way of knowing then exactly how much
was recou})ed by Jacobsen and Long with reg-ard to the — what you in-
dicate to be $25,000 paid to you ?
Mr. Lilly, I have no sure way of knowing'. I believe we would find
billings tieing; down $50,000. We have $25,000 over this period of time;
probably in equal amounts within this framework within 1 month
after T would show a deposit, I mean, make a payment to them.
Mr, Weitz, Off the record a minute,
[Discussion off the record.]
Mr. Weitz. Rack on the record.
All rig:ht. At this point, we are looking at what I shall mark as
exhibit 12, the check of Se]:>tember 1, 1970, for $22,000 for Jacobsen
and Long for an invoice dated August 31, 1970, which has an $8,000.
a $12,000, and a $2,000 item.
[Whereupon the documents referred to were marked Lilly exhibit
No. 12 for identification.*]
Now, your best recollection, or your assumption is, that the $8,000
and the $12,000 were the $20,000 to repay you for the earlier
Mr. Lflly. For Aug-ust 6, 1970.
Mr. Weitz [continuing], $10,000 payments on Augfust 6, 1970.
Mr. Lilly. Tliat's right.
Mr. Weitz. Your best recollection is they would try to recoup the
money in round amounts shortly after making the payment to you.
Is that the practice ?
Mr. Lilly. That is the practice they used.
Mr. Weitz. Do you know whether they were ever short in the
amounts of money that they recouped in terms of their excess ttixes ?
Mr. Lilly. If so, I am not aware of it.
Mr. Weitz. All right. Off the record.
[Discussion off the record.]
Mr. Weitz. Back on the record,
Mr. Sanders. Just one other question. Did you receive any other
moneys from Jacobsen and Long for political purposes which you did
not use to pay off your loans at the bank ?
Mr. Lilly. No, T did not.
Mr. Sanders. That's all.
Mr. Weitz. Before we leave Jacobsen and Long, let me ask you a
question with regard to the original payments in December. Did you
contact them or did Mr. Nelson contact them in regard to repayment?
Mr. Ln.LY. Do you mean Jacobsen and Long?
Mr. Weitz. Yes.
Mr. Lilly. I am sure Mr. Nelson talked with them. T also talked
with them, but I am sure that he talked with them. I do not rememVjer
the conversation.
Mr. Weitz. Do you know whether, either you told them, or from
some other source they understood the payments to you in December
to have been to help you repay n longstanding loan, as opposed to one
that was immediately taken out in December?
•See p. 6012.
5941
Mr. Lilly. Would you repeat that ?
Mr. Weitz. I aui sorry.
When they made the payment to you in December of 1969, did you
have any conversation with them tliat indicated to you that their belief
was that they were helping you pay off a loan that was overdue from
a previous period ?
Mr. Lilly. No.
Mr. Weitz. Was it your understanding; that they knew that they
were helping you repay a loan that had just been taken out ?
Mr. Lilly. I am not sure that they were totally aware that I was
paying on a loan just taken out, but again being officers of the bank,
I feel sure that they would have knowledge of a $100,000 loan close to
that period of time. And I am more inclined to think, even though it is
not personal knowledge, that it would apply on this particular loan.
As a matter of fact in the bank, to go back beyond that, I believe
you will find that I have no record of having borrowed any money
from that particular bank. Of course, that would not mean that I could
not have borrowed it from another bank, but this particular one.
]\Ir. Wkitz. And you say that at least several times when you talked
with them, you would tell them that you needed money for political
purposes?
]\Ir. T.,iLLY. Yes.
]Mr. AVeitz. In fact, of course, except for the one $5,000 payment
on June 15, which also went onto youi- notes, actually all the payments
you received from them went to repay existing loans?
:Mr. Ltlly. That is right. That is true."
Mr. Weitz. So it is lilcely you have said you need money for politi-
cal purposes, or is it likely that you said to pay off some loans I have?
Mr. Lilly. I i)robably would not have distinguished between the
two of them in my conver-sations with them. And as T remember,
I needed some money for a political contribution.
Mr. Weitz. AATiether or not it was actually to repay a loan that
you would have made to make that contribution, or to make the
conti-ibution directly?
:Mi'. Lilly. Yes.
]Mr. Weitz. I see.
Mr. XiciiOLAs. On tliat point, and on the i)oint that the other ques-
tion that was asked concerning the — all of these moneys that you
received from pTacobsen and Long apply to payments of notes only
in relation to that aspect of it ?
^Ir. Lilly. Yes.
Mr. Nicholas. Wait a minute. Let me finish.
Mr. Lilly. All right.
Mr. Nicholas. Do you recall whether or not thei-e wei-e any dii-ect
conti'ibutions that you made fi-om Jacobsen and Long nxmey, like—
I know that we are not talking about— it deviates a little bit; for
instance, like in a State campaign like the Bill Barnes or Gus Mut-
schei- or to Governoi- Smith, or lo anv of these ])eo])l(' that vou know
well.
Do you understand what I moan from political circles?
Mr, Ltliy'. Yes.
Mr. Nicholas. Did you ever give those people moneys from Jake
and Joe that were i-ecouped by them billing AMPI? This is impor-
tant because they have asked you a question.
5942
Did all of the money that they billed A^IPI go only to pay these
notes ? You have to understand that — —
Mr. Lilly, Let nie reanswer the question because on the face of
this, I have other contributions.
Mr. Nicholas. I noticed those on there. You've ^ot all kinds of
State things.
Mr. Lilly. They are State. They are all State.
Mr. Weitz. You're talking; about on page 2 of exhibit 6?
Mr. Lilly. See over on this side, the Speaker of the House, Gus
Mutscher, $200, unidentified — Speaker of the House, Gus ]Mutscher.
Then you pick up a Federal contribution, $1,200 to Beall ; $1,000 to
Gus Mutscher; $300 unidentified; $4,100 to Gleason, question mark,
and then of course, Lt. Gov. Ben Barnes, and then the House, the
State of Texas, two other State representatives
Mr. Weitz. Where did that cash come from ?
Mr. Lilly. It came out of this account, so it created — and some of
that money could have gone into these particular items. An example,
the $5,000 that was deposited in Jmie of 1970 of Jacobsen and Long
could easily, quite easily, have gone to some of these other political
contributions.
Mr. Weitz. But the others are noted, at least in your exhibit, as
cash payments on the notes.
Mr. Lilly. Having been applied on the notes.
Mr. Weitz. So if that is true, it might only be true of the June 15,
1970, payment, at least for Jacobsen and Long?
Mr. Lilly. It could be, yes,
Mr. Nicholas. So the record could be clear, Alan, the reason I am
asking this question is because going back in memory on prior dis-
cussions of these notes that we all know about, that were taken out
at Citizens' National Bank ; the reason I am asking Bob the question
is because most of the payments on those notes, as I recall, have been
traced to Stuart Russell money. Is this not correct ?
Mr. Lilly. That's right.
Mr. Nicholas. Almost $75,800 worth of them or more.
Mr. Weitz. Some of what money ? I am sorry.
Mr. Nicholas. Stuart Russell money to Bob Lilly.
Mr. Wetfz. We'll get to Russell.
Mr. Nicholas. That's the reason I'm asking this question, because
when vou asked him a specific raiestion — were all of these moneys
that Jacobsen and I^ong billed AMPI for, considered a scheme, a part
of the billing to pav back tlie moneys they had theretofore contributed
to Lilly to make contributions with.
I am asking you to think asrain and be as sure as you can as to
whether or not they all went to the payment of notes or not.
IMr. Lilly. Of course, some of those monevs could have been used
on political contributions within the State of Texas, or to other Fed-
eral elections, or Federal candidates; outside of going directly on the
note, because when I have identified a good portion of them having
been paid. I would have to have an accountant to interpret tliis for me.
But T would sav some of them certainly could have gone in.
Mr. Weitz. Talking about Jacobsen and Long, the only $5,000
Mr. Lilly. Tliat could be true.
Mr. Weitz. I understand. Let's move to Ted Van Dvk.
5943
Mr. Lilly. All right.
Mr. Weitz. His name appears on the list of conduits. Would you tell
me what you remember to have transpired after the loan was taken
out with regard to repayments to you by Mr. Van Dyk ?
Mr. Lilly. Yes ; Mr. Van Dyk was one of the attorneys.
Mr. Weitz. I believe he is not an attorney.
Mr. Lilly. Well, one of the people involved in paying back on this
scheme. In the latter part of December, he sent a check to me for
$10,000, and the check was apparently deposited in the Citizens' Na-
tional Bank, according to my records, on January 5, 1970.
And then in March of 1970, 1 filed my income tax, and then in March,
later in March, I received a letter from Mr. Ted Van Dyk as well as a
1099, where Mr. Van Dyk stated— the letter was dated March 10, 1970,
to me. He said, "As protection for both of us, you will be receiving a
withholding slip for the $10,000, just as I received one. That closes the
circles and keeps us beyond question."
Mr. Nicholas. Maybe I gave you the wrong one.
Mr. Weitz. Off the record.
[Discussion off the record.]
Mr. Weitz. Back on the record.
Mr. Lilly, let us go back to December. When did you receive — De-
cember of 1969 or January of 1970. TVTien did you receive the $10,000
payment from Mr. Van Dyk ?
Mr. Lilly. I deposited the payment on January 5, 1970.
Mr. Weitz. So you would have received it sometime just before
that?
Mr. Lilly. January 2 or 3, just prior to that time.
Mr. Weitz. Do you know who contacted Mr. Van Dyk to ask for that
payment ?
Mr. Lilly. After that?
Mr. Weitz. No ; asked for that payment.
Mr. Lilly. Oh, asked for the payment. According to the prior notes
that I have, DeVier Pierson would have contacted Mr. Van Dyk.
Mr. Weitz. Yoii don't remember contacting him ?
Mr. Lilly. No.
Mr. Weitz. Do you remember talking to him at all before receiving
that payment ?
Mr. Lilly. Not about the payment. I talked quite often with Ted
Van Dyk on other political things, but not about the payback, the
check ; no.
Mr. Weitz. Now, when the — I have and I want to mark for exhibit
13, a series of documents relating to the invoice and , payment in De-
cember to Mr. Van Dyk in the amount of $18,050 on or about December
22,19(59.
["\^niereupon, the documents referred to were marked Lilly exhibit
No. 13 for identification.*]
Mr. Weitz. Do you remember being asked about, or in some way
being involved in the approval of that invoice from Mr. Van Dyk?
Mr. Lilly. I think that Mr. Tsham might have checked with me had
T received — was T aware of the billing. I am not sure if I initialed
the billing or not, but Mr. Tsham would have checked with me to see
if T had received any money from Mr. Van Dyk.
* See p. 6015.
5944
Mr. Weitz. One of the documents in exhibit 13 is a letter dated
December '22 from Mr. Van Dyk. It sajs "Dear Plarold,'' to Mr. Harold
Nelson. And he refers — this is the letter apparently sending the in-
voice to AMPI.
And the letter reads: "Per my discussion today with Bob Lilly,
I am submitting the enclosed invoice." Do you recall discussing with
him some matter relating to submitting an invoice to recoup ttie
$10,000 payment?
Mr. Lilly. No; I do not recall it. I would not say that I had not,
but I certainly do not remember it.
Mr. Weitz. You do not remember yourself discussing this type of
matter before receiving the check from Mr. Van Dyk ?
Mr. Lilly. No ; I do not.
Mr Weitz. Now, marked as exhibit 14, is a check, a Xerox copy of
both the front and the back of a check to Bob A. Lilly, signed by Ted
Van Dyk in the amount of $10,000, dated December 29, 1969. xVnd it
is endorsed for deposit only, Bob A. Lilly. Have you ever seen that
check ?
Mr. Lilly. Yes; I have seen it, and that is my endorsement on the
check.
[Whereupon, the document referred to was marked Lilly exhibit
No, 14 for identification.^]
Mr. Weitz. Now, after receiving this check, when was the next time
that you talked to Mr. Van Dyk about this matter, about this trans-
action V
Mr. Lilly. I do not remember hnving talked with him. It is quite
possible, but the next time I remember is having received a letter from
Mr. Van Dyk on or about March 10, 1970.
Mr. Weitz. Which is the letter you just read into the rpcord.
Mr. Lilly. Eight.
Mr, Weitz. Do vou know whether Mr. Van Dyk knew the purpose
of the first $10,000 transaction ?
Mr. Lilly. No. I did not talk with Ted Van Dyk on this, and I
would have to say that evidentally from the letter, I had a conversation
with him, but I am not aware of the conversation. I do not remember it
with him. And I do not remember discussing the purpose of it, or any-
thing else.
I knew he was one of the people to make a contribution to pay this
back.
Mr. Weitz. Let me mark as exhibit 15, a letter dated "March 10, 1970,
from Ted Van Dyk to you, which you read into the record just a
moment ago.
[Whereupon, the document referred to was marked Lilly exhibit
No. 15 for identification.^"!
Mr. Weitz. T take it that you have seen that letter, and that is the
letter you received from Mr. Van Dyk?
Mr. Lilly. Yes, I have.
Mr. Weh'z. And accompanying that letter was the form 1099 ?
Mr. Lilly. That is right.
Mr. Weitz. Yes.
And subsequently, you filed an amended return to reflect that in-
creased $10,000 payment?
iSpep. 6018.
2 Sep p. eoifl.
5945
Mr. Lilly. True.
Mr. Weitz. And this is a copy of that amended return ?
Mr. Lilly. Yes,
Mr. Weitz. Which you provided to us ?
Mr. Lilly. [Nods affirmatively.]
Mr. Weitz. At the time you received this letter from Mr. Van Dyk
and the form 1099, what did you do ? Who did you talk to ?
Mr. Lilly. I talked to Bob Isham in regard to this, and told him
that Mr, Van Dyk has sent me a 1099, knowing that he had been paid
in excess of $18,000, that he had billed us for a $10,000 check, and
that I would be placed in the position of filing an amended report, ^
And I think at the time, and I cannot tell, I have no record of it, but
if my memory serves me correctly, I think that INIr, Isham gave me an
advance check to pay the income tax. But I would not laiow this,
whether he did or not. And I suppose AMPI records might reflect this.
Maybe this was one of those that I never recovered ; and if I did not,
and paid it myself. I do not really know.
Mr. Weitz. Now, if Isham had given you an AMPI check, how
would you have recovered it ? Through an expense voucher at a later
time?
Mr. Lilly, Yes, through an expense voucher. It might have been an
expense advance, expense voucher to me,
Mr, Weitz, What were the excess taxes ? Do you recall ?
Mr, Ln.LY, Approximately $4,000,
Mr, Weitz, Did anyone call Mr. Van Dyk and talk to him about
this?
Mr, Lilly, I do not know if Mr, Isham called him or not.
Mr, Weitz, Do you recall whether Mr, Isham suggested that you
just ignore it and not do anything further to your re^turn?
Mr, Lilly, No, I do not recall that,
Mr, Weitz, But you felt certain that you had to file an. tlhended
return to reflect this additional payment ?
Mr. Lilly, Yes, I did,
Mr, Weitz, And you did so ?
Mr, Lilly, Right.
Mr. Weitz. Do you recall any further payments or transactions
with Mr. Van Dyk in this vain ?
Mr. Lilly. No. In the name — there was a check on or about Au-
gust 27. 1970, September 15, 1970, that had the name Kirby Jones,
Riggs National Bank, Washington, D.C. ; and it showed up as having
been deposited on December 15. 1970, under that name.
And this apparently came from Mr, Van Dyk. I do not know Mr.
Kirby Jones.
Mr. Weitz. Let's back up a minute.
Do you recall whether you or anyone else contacted Mr. Van Dyk
in advance of September 15 to request anv such payment?
Mr. Lilly. I certainlv have no memory of having contacted him, but
it is possible that I could have.
Mr. Weitz. Do vou ha^e anv independent recollection, or hate it been
refreshed, as to what you did with the $10,000 pavment from Mr.
Jones ?
Mr. Lilly. I hnve refreshed mv memorv. It did qro into an account
in Austin, Tex., into the wrong account, at about September 15, and
5946
about a day or two later was redeposited in the Citizens', the other
Bob A. Lilly account, which v/as not a personal account.
Mr. Weitz. Was this deposited erroneously as had been those earlier
checks from Jacobsen and Long ?
Mr. Lilly. Only in the Citizens' National Bank, and not the First
National Bank.
Mr. Weitz. But it was you who deposited them, and switched them
over sometime later?
Mr, Lilly. A couple of days later ; the check was written on the fTth.
Mr. Weitz. And was the money used for any particular purpose,
such as paying off existing notes ?
Mr. Lilly. I would assume from my notes on disbursements to Citi-
zens' National Bank on September 17, 1970, tc receive payment of
$15,000 on an existing note or notes. And I would say that the $10,000
we are referring to is reflected within that $15,000 payment.
Mr. Weitz. Now, I marked for identification exhibit 16, which is a
check from AMPI to Ted Van Dyk x\ssociates on September 4, 1970,
for $19,055.72!. Attached to that voucher is an invoice dated August 28,
1970, to AMPI from Ted Van Dyk Associates, which includes a direct
expense July-August 1970 of $12,057; at the top of that is written
circled, "OK, K.B." And then it goes on "September 2, 1970, as per in-
structions from Bob Lilly on telephone this date."
[Whereupon, the documents referred to were marked Lilly exhibit
No. 16 for identification.*]
Mr. Weitz. Now, would you look at that first and tell me whether
you can identify it, and then tell me whether you can explain that
handwritten notation.
Mr. Lilly. The notation at the top was written by my secretary,
Sarah Bezdek. She used the name Katherine Bezdek in all of her let-
ters, and this is her, I would take it. It appears to be her writing. And
apparen*^^,:! instructed her to OK the bill for payment to Ted Van
Dyk from some place. Apparently, I was not in San Antonio.
Mr. Weitz. But that does not refresh your recollection as having
been personally involved in the arranging or asking for the
$10,000 from Van Dyk or approving, or telling him to bill the com-
pany direx?tly?
Mr. Lilly. I really do not recall the conversation. I mean, I could
have had a conversation with him.
Mr. Weitz. Do you remember whether Bob Justice was either in-
volved in this transaction, or do you know of any other transaction
which he might have been involved in picking up money from Mr.
Van Dyk?
Mr. Lilly. I was not aware that Bob Justice picked up any money
from Van Dyk.
Mr. Weitz. You had never heard that?
Mr. Lilly. No ; I was aware of other parties, but not Ted Van Dyk.
Mr. Weitz. Now, on the third page of the exhibit, there is a letter
from Ted Van Dyk, apparently sending the invoice, also dated Au-
gust 27, 1970. And it says, "Dear Bob, per our discussion earlier today,
please see the attached invoice for processing. See you in Washington
on the 10th, or thereabouts. Sincerely."
*See p 6021.
5947
Again, w^ould you look at that, and see if you have ever seen that?
Again, think back and see if you can recall any conversation about-
this.
Mr. Weitz. Off the record.
[Discussion off the record.]
Mr. Weitz. Back on the record.
As I just asked you, does this reflect your recollection, or were there
times when, for example, there were other bills when this might ap-
pear, and you in fact did not talk with Mr. Van Dyk?
Mr. Lilly. There are other bills and other times when Mr. Van
Dyk would write me letters, and indicate "as per our conversation," on
a certain day ; he is sending me a billing or he had taken certain action
as per my instructions, when in fact, I iiad had no conversation witli
him. And I do not recall this particular conversation, or the letter
but
Mr. Weitz. Do you have any idea who would have talked with him ?
Obviously, this would not have been spontaneous.
Mr. Lilly. Bob Isham had conversations with him, but very little
on this particular thing. Dave Parr had more conversation with Van
Dyk than anyone else. Mr. Nelson also had conversation with him.
They had much closer contact. My contact with Ted Van Dyk was
never that close.
Mr. Weitz. Let me just ask you one more time. Do you ever recall,
for example, talking to Isham about some incident of Bob Justice,
or anyone else connected with Parr, going to Ted Van Dyk's office and
picking up money from him or asking him for money ?
Mr. Lilly. I do not recall Ted Van Dyk — I do know I talked to Bob
Lsham about Bob Justice having gone to Cliff Carter's office and Dick
Maquire's office in Washington, D.C.. to pick up some money.
Mr, Sanders. With respect to Van Dyk, did he have some involve-
ment, to your knowledge, in the contributions being made to the Mus-
kie campaign?
Mr. Lilly. I believe the contributions I have referred to. and I have
some correspondence on it, went back to his election in 1970 when he
was seeking reelection as a Senator from the State of Maine. And Mr.
Russell did make some contributions to him.
Mr. Sanders. Do you have knowledge that the Kusscll contributions
were anything other than from Russell's own genuine resources ? What
I am saying is, do you have knowledge that Russell, in any way, was
reimbursed by AMPT or MPI ?
Mr. Lilly. I would liave to check billings to see if he was reimbursed.
But I have
Mr. Sanders. Before we get into Russell, what was the — I thought
this had some relationship to Ted Van Dyk. Does it ?
Mr. Lilly. It has a relationship to Ted Van Dyk, because Ted Van
Dyk
Mr. Weitz. Wliy don't we go off the record a minute ?
[Discussion off the record.]
Mr. Sanders. Back on the record.
We have been talking about Ted Van Dvk, and I have an interest
in whether or not, to your knowledge, Ted Van Dyk ever received any
funds for the Muskie Presidential campaign, which might haA^e origi-
5948
nated with AMPI or whether he liad involvement in procuring any
such funds?
Mr. Lilly. Yes, I do have some knowledge in the form of memos, and
some in the form of letters from Ted Van Dyk, some to Ted Van Dyk,
Milt Semer also. And it might be easier if I would read a memo that
I used.
Mr. Sanders. Perhaps if we could just make a Xerox of that,- we
could set this aside here with others that we might accumulate, and I
will bring my secretary down here to Xerox those while we continue.
And rather than taking the time to read that whole thing in the
record, let's mark it for the next numbered exhibit. Off the record.
[Discussion off the record.]
Mr. Sanders. Back on the record.
Now, can you — from your best recollection, can you state the thrust
of exhibit 17?
[Whereupon, the document referred to was marked Lilly exhibit
No. 17 for ielentification.*]
Mr. Lilly. It is a memo of notes that I have accumulated and reduced
to t^^-ping, apparently to keep myself advised, and it was written on
April 17, 1970, and it pertained to a conversation with Milt Semer
having received a check from Ted Van Dyk as a contribution to
Muskie, a $5,000 check.
And he was quite amazed, Mr. Semer was, that Van Dyk would be
involved in the campaign of Muskie. Muskie was seeking reelection as
a Senator at the time from the State of Maine. And I was totally
unaware of the total impact of it.
I did not know. I knew Milt Semer was closely related to Senator
Muskie, but Ted Van Dyk; I did not tie that closely. But in the
conversation, and in the memo that I made following that conversation,
I mentioned the fact that apparently Semer was getting ready for the
1972 campaign, because he did refer to a Mr. Martin Hauhn, H-a-u-h-n,
in Oklahoma, and wanted me to check him out to see who he is, what
he is, what ability he has, apparently for the 1972 campaign.
Mr. Sanders. In 1972, did you have any conversation with Van Dyk
about funds for Muskie ?
Mr. Lilly. No ; I have some memos from Van Dyk that crossed my
desk. Apparently some of them were written to me directly. 'He is refer-
ring to some things that I am totally unaware of.
Mr. Sanders. Did any of them make mention of any desire for funds
for Muskie?
Mr. Lilly. They referred to funds for Muskie. I have one on Sep-
tember 14, where he is referring to a check for $1,000 to Maine for
Muskie, September 14, 1970 — and he said it should be torn up and it
was going to be replaced.
Well, I do not know — I am not advised at all — the Wliittemore
check is all he referred to.
Mr. Sanders. Do you have other correspondence from Van Dyk
pertaining to contributions for Muskie ?
Mr. Lilly. I have anotlier one here, dated .July 9, 1970. And this is
from Ted Van Dyk to Don Nicoll, N-i-c-o-1-1, 1660 L Street NW.,
room 1004, Washington, D.C. And I am not aware of who Mr, Don
Nicoll might be.
♦See p. 6024.
5949
But it refers here to a memo. It says, "see attached a check for $1,666
to each Muskie Election Committee.'"
Mr. Nicholas. Read the whole thing.
Mr. Lilly. Back up and start over.
Dear Don, Harold Nelson, Dave Parr and their collea^es had a good meeting
yesterday with the Senator. Many thanks.
Here is the follow-up : please see attached two cheeks $1,666 each for the
Muskie Election Committee. And one for the Maine for Muskie Committee, addi-
tional checks for $3,334 each will be sent to you within the next few days to
reach a total of $5,000 for each committee.
Two. I will send you a memorandum and list reference to the special milk
program. The Senator offered to help on this.
Three. I will look forward to receiving from you a list of candidates the
Senator recommends for special help this fall. Contributions will be made to
them on the basis of the contributions that've come to the Senator's recommenda-
tion. I suggest that the list be relatively short, but consist of people who are of
high priority to you.
Four. The Senator said he would welcome the input of several academics
who have some help to offer re : agricultural policy. I will see that their papers,
etc., are channeled through you. You can judge their usefulness.
Five. Small favors department : Dave Parr has two sons, Travis and Steve,
age 18 and 17, who are anxious to spend 2 or 3 days this summer carrying bags,
driving cars, etc. in the Senator's campaign entourage in Maine. They are good
looking, intelligent boys. They would, of course, travel and work at their own
expense. Could this be arranged?
I will stay in touch on all of this. With best wishes, Sincerely, Ted Van Dyk.
Here are copies of the checks, Xeroxed copies of tlie checks that he
refers to from SPACE, which is the political arm of Dair5^men, Inc.
located with headquarters in Louisville, Ky.
Mr. Sanders. This is the letter that you have just read from Ted
Van Dyk to Mr. Don Nicoll ?
Mr. Lilly. Right.
Mr. Sanders. Did you say — you are not sure who he is or where he
fits in?
Mr. LiiJLY. I have no idea. I do not know why I have a copy of the
letter, or why I am into it, but it was sent to me. This is the reason I
have a copy.
Mr. Sanders. This handwriting up in the upper lefthand corner,
"file with Van Dyk letter.'' Is that your handwriting?
Mr. Lilly. That is my handwriting.
Mr. Sanders. You have no idea who sent this to you ?
Mr. Lilly. [Nods negatively.]
Mr. Sanders. Did you take any action on the basis of this Van Dyk
letter to Dan Nicoll ?'
Mr. Lilly. Not that I know of, because apparently I have been kept
informed about some transaction, and Mr. Van Dyk must have felt
compelled to send me a copy of it.
Mr. Sanders. Oh, you think it is likely that you received that, a
copy of that, from Van Dyk ?
Mr. LiLLi . Well, if not from Van Dyk, I don't — ^IVIilt Semer pos-
sibly, but I do not see his name mentioned in it, and then Don Nicoll —
or Nicoll, however the name is pronounced — I cannot think of who he
is. And I don't know why he would have been sending me something.
Mr. Nicholas. May T ask one question on this ?
Mr. Lilly, does the fact that the two checks that are attached to the
Van Dyk letter of July 9, 1970, are from the SPACE, which is the
Special Political Agricultural Community Education; would there
5950
have been a policy set up between TAPE and/or AMPI or MPI and
SPACE to keep you informed as to what they were doing?
Mr. Lilly. No.
Mr. Nicholas. No?
Mr. Lilly. To my knowledge.
Mr. Nicholas. Bear in mind that he was treasurer of the TAPE
committee.
Mr. Lilly. No; not in 1970. Bob Isham was a trustee of TAPE,
and it might have been someone's effort to keep me informed, but to
my knowledge, these are the only two checks that I have from SPACE
in my file.
Mr. Weitz. If I may ask a question. Is it possible that Dave Parr
sent you a copy, since his name is included in there ?
Mr. Lilly. Well, his name was mentioned.
Mr. Weitz. No. 5 in the "small favors department."
Mr. Lilly. That's a possibility ; that is where I could have gotten it.
Mr. Weitz. But you do not remember?
Mr. Lilly. No.
Mr. Sanders. Do you still get correspondence to or from Van Dyk ?
Mr. Lilly. Yes; I have correspondence on September 14, 1970, to
Bob Lilly from Ted Van Dyk regarding the Whittemore check.
Bob, per our discussion, please tear up the signed receipt for the Whittemore
check. The check itself has been destroyed on this end. A new check for $1,000
to Maine for Muskie should be drawn to replace it.
Please send it directly with new receipt for signature to Mr. Robert Nelson,
Room 1004, 1660 L Street, N.W., Washington, D.C. Many thanks.
Mr. Sanders. This is the one we already have, September 14?
Mr. Lilly. I did not realize that, I'm sorry.
That is all of the correspondence. I have some other correspondence
there to Milt Semer, or for Milt Semer pertaining to Muskie in the same
file, but nothing else from Van Dyk.
Mr. Sanders. Mr. Lilly has just furnished me a copy of a letter from
Milton P. Semer to David Parr. It is undated, but it says : "received
July 20, 1970." And handwritten at the top is a notation : "file Muskie
political."
I am including this with the other Van Dyke-Muskie letters that you
have just handed me.
Mr. Nicholas. Can we go off the record for a minute ?
TDiscussion off the record.l
Mr. Sanders. All right. We will go back on the record.
Mr. Lilly has just handed me a series of documents pertaining to
contributions to Senator Muskie in 1970. And I am going to add these
to the ones he has already given me, and I am going to go through them
and mark them for the record and identify them.
We have already marked as exhibit No. 17, his own memo dated
April 17, 1970.
I will mark as exhibit No. 18 a memo from Ted Van Dyk to Bob
Lilly dated September 14, 1970, relating to a $1,000 check to Maine for
Muskie.
[Whereupon, the document referred to was marked Lilly exhibit
No. 18 for identification.*]
•See p. 602.5.
5951
Mr. Sanders. Exhibit No. 19 is a letter dated July 9, 1970, from
Ted Van Dyk to Don Nicoll pertaining to contributions to the Muskie
campaign, and also making references to the milk program.
[Whereupon, the document referred to was marked Lilly exhibit
No. 19 for identification.^]
Mr. Sanders. Exhibit No. 20, a letter from Milton P. Semer to David
Parr, undated, marked "received July 20, 1970," concerning presum-
ably Senator Muskie's campaign.
["VVliereupon, the document referred to was marked Lilly exhibit
No. 20 for- identification.-]
Mr. Sanders. Exhibit No. 21 will be a multipaged exhibit containing
a note on the letterhead of Stuart H. Russell, addressed to "Bob, for
your information," undated; a letter from Semer to Russell dated
August 3, 1970 ; a letter from. Semer to Russell dated December 1, 1970,
thanking Russell for a $5,000 contribution to the Muskie Election
Committee.
A note on the letterhead of Russell to Bob, "for your information
and record," not dated. An undated letter from Muskie to Nelson
marked "received August 27, 1970"; a letter from Russell — correction,
a copy of a letter from Russell to Muskie Election Committee showing
a carbon copy to Bob Lilly, dated November 24, 1970, indicating a,
check had been enclosed in the sum of $5,000 payable to the Muskie
Election Committee; and that this was sent at the request of Bob
Lilly of AMPL
A copy of a letter dated Julv 28, 1970, from Lilly to Van Dyk en-
closing two checks for the Muskie campaign, and indicating that these
checks along with checks from Dairymen, Inc., and Mid-America,
make a total of slightly over $10,000 ; aii invoice on the billhead, Stuart
H. Russell, dated July 24, 1970, to Associated Milk Producers. Inc.
for $5,100 for lecal services rendered in the purchase of Wilsey-Ben-
nett and Pure Milk Producers Co-op of Winsted, Minn. A copy of a
Stuart Russell check for $1,750 to Maine for Muskie, dated July 24,
1970. and a Stuart Russell check for $1,650 to Muskie Election Com-
mittee, dated July 24. 1 970.
A copv of a legal-size page bearing handwritten figures and words,
apparently in reference to the precedinc two checks; a letter from
Russell to Lillv of Jannarv 13. 1971. attaching a letter of December 22,
1970. from Muskie to Russell expressing appreciation for help and
encouragement.
f^Vliereupon. the documents referred to were marked Lilly exhibit
No. 21 for identification.'']
Mr. Sanders. We will make copies of these for our use, and return
these to you.
All right. Now. for the record, Mr. Lillv, what, if any, conversations
have vou had sinre 19fi9 with Ted Van Dyk concerning contributions
to a campaign of Senator Muskie?
Mr. Ltij.y. I am not sure that I have had conversations. Certainly,
I do not recall any.
I have a series of letters. I have some memos. I do have notes of
telephone calls from Milt Semer about Van Dyk.
1 Spp p. fi02fi.
2 Rpp p. Rn2S.
^ Sop p. R02ft.
5952
Mr. Sanders. Do you have any personal recollections at the moment
of conversations with Van Dyk concerning contributions to the Muskie
campaign ?
Mr. Lilly. I have not ; no.
Mr. Sanders. The documents which you have just furnished to me,
and which you have identified for the record, all came from your
own files?
Mr. Lilly. From my own files.
Mr. Sanders. Do you have knowledge of any AMPI — funds and I
say this intending to separate any TAPE funds. Do you have knowl-
edge of any AMPI funds since 1969 being furnished for the use or
benefit of a Muskie political campaign? [Pause,] Off the record.
[Discussion off the record.]
Mr. Sanders. Back on the record.
From 1969 forward, do you have any knowledge of any AMPI funds
going for the use or the benefit of the Muskie campaigns ?
Mr. Lilly. Not any that I recall, and not any that I handled.
Mr. Sanders. Wliat knowledge, if any, did you have of Russell
making funds available for tlie Muskie campaign?
Mr. Lilly. Only the correspondence that we referred to earlier,
that he made contributions to Muskie, and some exhibits that you
have already marked. And that is my total knowledge.
Mr. Sanders. These exhibits would tend to indicate that. But are
you saying you have no independent knowledge of these transactions?
Mr. Lilly. Actually transpiring? Not until after the fact. I re-
ceived copies — they transpired and I was advised of it by having re-
ceived a letter with no prior knowledge to it.
Mr. Sanders. You had no involvement in the development of the
transaction ?
Mr. Lilly. No, no.
Mr. Sanders. Did you s\ibsequently, however, leam how Stuart
Russell came to make these contributions ?
Mr. Lilly. No, I did not outside of having received his correspond-
ence. And to this day, I do not know what spurred him on to make a
contribution, or how he became involved.
Mr. Sanders. Has Ted Van Dyk at any time solicited you to make
contributions to the Muskie campaign?
Mr. Lilly. I have correspondence from Ted Van Dyk, but to my
knowledge, I cannot recall having talked with him, or him having
solicited through a letter to ad^nse me of certain things happening.
It would indicate that, certainly, we had corresponded or had had
conversations about Muskie's campaign.
Mr. Sanders. Do you have any recollection of conversations between
you and Russell concerning contributions to Muskie?
Mr. Lilly. No, outside of his having advised me that he had made
contributions and sending me some copies of correspondence, but not
prior to. It was after.
Mr. Sanders. Now, these [indicating] documents which you fur-
nished me and which we have marked for the record contain Russell's
invoice to AMPI for legal services in the amount of $5,100, July 24,
1970. I see no indication of any notations on it by way of approval
or routing within AMPI.
5953
Do you have any independent recollection about, receiving or proc-
essing that document ?
Mr. Lilly. No. T do not have. It could well have crossed my desk,
and 1 could have jmssed it along, but I do not see my usual OK nota-
tion on it.
Mr. Sanders. Woidd there be any reason why you would have in
your files a bill of Russell to AMPI for services, which were indeed
legitimate?
Mr. Lilly. I would say that I have a copy in my file. Mr, Russell
sent me a copy to keep me posted of some of his actions that he was
taking, and I would assume that it was paid.
Mr. Sanders. I see.
What you are saying is that in as much as you have a copy of this
Russell invoice in your file, it might be that this was sent to you by
Russell ; at the same time, he would have sent the original to AMPI's
accounting office ?
Mr. Lilly. To the comptroller.
Mr. Sanders. And this was just to you foi* information ?
Mr. Lilly. For information, just a co])v of tlie checks he sent to me
at the same time.
Mr. Sanders. Now, what I am saying is, if Russell were indeed bill-
ing AJNIPI for services he had truly performed for AMPI, would there
be any reason why he, would send you a copy of the bill ? And let's be
more specific here.
This bill says for legal services rendered in the purchase of Wilsey-
Bennett and Pure Milk Producers Co-op in AVinstead, Minn. Is there
any reason why you would need to kno^^ that he had performed such
services for AMPI ?
Mr. Lilly. I will say that on the Wilsey-Bennett — I am familiar
with the Wilsey-Bennett operation in Oklahoma City, and I know
that Mr. Russell was involved in its purchase. It is a butter plant that
makes butter prints, little patties, butter patties. And it still carries
the same name, Wilsey-Bennett.
I am not familiar with the cooperative, but I tie the Inlling itself to
the two checks attached to it. to l)e more responsive to your question.
Mr. Sanders. To the two checks to Muskie ?
Mr. Lilly. True.
Mr. Sanders. You would, although you cannot — you have no facts to
establish it. your deduction is that he paid the checks to Muskie and
billed AlVfPi an even larger amount to cover those checks plus his
tax consequence ?
Mr. Lilly. That is true.
Mr. Sanders. Who \s-ould have asked him to do this, or arranged for
him to do this within AMPI ?
Mr. Lilly. It would be one of three people. It would be myself —
which I did not. It would be Mr, Harold Nelson, or Mr. Dave Parr.
Mr. Nicholas. Can we go off the record just a second ?
[Discussion off the record.]
Mr. Sanders. Back on the record.
Let me just ask you one more time this question : Is there any reason
why you would have had to know or Russell would have thought that
you should know that he was billing AMPI for legal services in the
purchase of this co-op ?
5954
Mr. Lilly. Mr. Russell knew that in my position, as far as AMPI
was concerned, I worked largely on the political end of it, if we might
use that word in the broadest sense. And I think he would have made
every effort to have kept me informed as to what might have tran-
spired, even though I would have had no knowledge of it; just to be
sure that I did know it.
Mr. Sanders. Does it appear to you that this copy of the Russell in-
voice came to you with copies of Russell's checks attached?
Mr. Lilly. Yes, it does.
Mr. Sanders. Does it appear to you also that the handwritten notes
were also attached, or are these yours ?
Mr. Lilly. Those are handwritten. Most of those handwritten notes
are Isham's. The note in the left-hand column are my notes. The rest of
them are all Isham's writing.
Mr. Sanders. So that Isham then was knowledgeable concerning
Russell's payments to Muskie and the contemporaneous billing to
AMPI?
I\Ir. Lilly. Yes.
Mr. Nicholas. Let me ask him one question off the record.
[Discussion off the record.]
Mr. Sanders. The handwritten notes would not have come to you
from Russell, but they were prepared in response to the receipt of the
invoice ?
Mr. Lilly. They originated in the home office, true. That is right.
Mr. Sanders. Then there is this copy of a letter from you to Van Dyk,
dated July 28, which purports to enclose the originals of the two checks
for which we have copies.
So I presume tliat in addition to Russell sending you copies of the
checks attached to his invoice copy, he must have sent you the originals ?
Mr. LrLLY. Evidently, he did send me the originals; the letter being
dated the 28th, and the checks, the 24th; he could well have sent me
this, because apparently I did forward the checks on. And apparently
I forwarded the checks to Dairymen, Inc., at the same time or re-
ferred to that.
So evidently, I did receive the checks, made Xerox copies of the
checks myself before forwarding them on.
Mr, Sanders. Why would not Dairymen and Mid-America have sent
their own rather than sending them to you for transmittal?
Mr. Lilly. Let me go off the record.
[Discussion off the record.]
Mr. Sanders. Back on the record.
Your letter of July 28 to Van Dyk makes mention of checks from
Dairymen and Mid-America. Why would you find it necessary to
explain to Van Dyk concerning checks from other firms?
Mr. Lilly. Well, of course, the two co-ops both have political arms.
They are both dairj^ co-ops in this instance. Somewhere between Ted
Van Dyk and Milton Semer — Ted Van Dyk is dealing with the same
people that Milton Semer is dealing with, meaning AMPI, Dairy-
men, Inc.. Mid-America, three cooperatives all had political arms.
And they were forwarding me the checks to move on forward to Ted
Van Dyk ; at the same time. Mr. Milton Semer and some of the corre-
spondence indicates, the telephone calls indicate, that he wanted to
know where Mr. Van Dyk got involved, because he, more or less, was
5955
raising the money for Mr, Muskie's reelection, and how did Van Dyk
come into this ? Apparently, there was some play, some animosity, some
feeling between the two of them as to who was to raise money for
Miiskie ; and why Ted Van Dyk would be involved in it.
Mr. Sanders. In other words, Semer was disturbed that Van Dyk
was contacting the same people he was contacting?
Mr. Lilly. That is right.
Mr. Sanders. But were these contacts that we have just now men-
tioned, for the purpose of obtaining funds from the political funds,
the legal political arms ?
Mr. Lilly. The checks from SPACE that I believe we have referred
to here are from their political arm.
Mr. Sanders. It does not say that.
Mr. Lilly. SPACE happens to be the political arm of Dairymen,
Inc. I just happen to know that.
The checks from AjNIPI via Stuart Russell are not from TAPE
funds, but are from his funds. Pie was reimbursed evidently from
AMPI corporate funds.
Mr. Sanders. You have no knowledge that the checks from Mid-
America and Dairvnieii, Inc.. were from other than their legal politi-
cal arms?
Mr. Lilly. That is true.
Mr. Nicholas. On that point, I wanted to ask you, Mr. Lilly: was
Mr. Stuart Russell also representing Dairymen's, Inc. at the same time
he was representing AMPI, or do you know ?
Mr. Lilly. No, To my knowledge, he v>-as only representing AMPI,
but having had some conversation with Mr. Russell, he, too, was being
contacted by Mr, Van Dyk and Mr. Semer, and was caught in the same
confusion that I was.
Mr. Sanders. Now, directing your attention to the copy of the letter
you received from Russell, v,hich he addressed to Muskie Election
Committee on November 24. It states that it encloses a check in the
sum of $5,000 at your request.
Do you have a recollection of receiving this copy from Russell ?
Mr. Lilly. The copy is in my file, and I am aware of that. I do not
remember the actual receipt of it, and on the request for the contribu-
tion itself, I certainly have a serious doubt that I originated that re-
quest to Mr. Russell.
Mr. Sant)ers. How do you tliink that would have occurred?
Mr. Lilly. I think it would have occurred through Mr. Van Dyk
having called Mr. Russell, and stating that he had talked with me,
and he should make a contribution to Mr. Muskie.
Mr. Sanders. And Van Dyk — any mention Van Dyk made to Rus-
sell of liaving talked to you was not accurate ?
Mr. Lilly. No; because T have no knowledge of the $5,000 check
with the exception of the instruments that you have there before you.
Mr. Sanders. This letter, being dated November 24, would have been
subsequent to the election in 1070, early November 1970. Did it strike
you at the time that the campaign was over ?
!Mr. Lilly. I am not sure that it did at the time. It would now, but
to me that is not too unusual, because you have campaign debts after
the campaign is over. And I really do not tie a great deal of significance
to it. but it minfht ha^e some ■
5956
Mr. Sanders. Do you have any knowledge as to whether Russell
received reimbursement from AMPI for this $5,000 in Noveniber?
Mr. Lilly. I have no personal recollection of whether he did or not,
but possibly a search of AlVIPI files, I feel, would reveal
Mr. Sanders. Off the record.
[Discussion off the record.]
Mr. Sanders. Back on the record.
Mr. Weitz. With regard to other transactions and, in general, all the
transactions for reimbursement for political contributions by Mr. Kus-
sell, what contacts do you remember with him or discussions with
regard to the repayment to you for the original loan or for other trans-
actions providing money to you for political purposes ?
Mr. Lilly. Are you referring to the original conversation ?
Mr. Weitz. Starting from the original; can you remember what
happened originally and what you talked to him about over a period
of time ?
Mr. Lilly. No. I do not remember originally what we might have
discussed following — once we got into the pattern, it really was, for
the most part, a telephone call for me to either Mr. Russell or his secre-
tary, Jane Hart, H-a-r-t, that I needed a check for $5,000, or I needed
a check for $2,000, or whatever the amount might be.
Consequently the checks she would send, or Mr. Russell would send
it — I did not go through the formality of having to talk to Mr. Rus-
sell personally. And many times, I did not talk to Mr. Russell, and
some of the checks were signed by Jane Hart. Apparently she had the
authority by Mr. Russell to sign. She did not question it either, and
she sent them to me.
Mr. Weitz. At the outset, did you discuss with him — let me start this
way. In exhibit 6, it indicates the first payment from Russell was on
December — received and deposited by you December 31, 1969; the
amount of $5,000.
Now, at that time or some short time thereafter, did you discuss that
from time-to-time you would need additional moneys and that is why
he established a procedure whereby you could call his secretary and
obtain it without him ?
Mr. Lilly. I do not know, in the beginning, if I talked with Mr.
Russell about repayment of this or not, or whether Mr. Isham might
have talked with him or whether Mr. Nelson might have talked with
him.
This, I do know ; that insofar as Mr. Russell and myself, we had an
understanding. He did not question me, and I did not tell him. I
told him I needed a check in a certain amount, and he would send it to
me. I do not truthfully remember the beginning.
After that, if we had a contribution to a particular individual, I do
not remember ever having told him that it was going to so-and-so to
repay a note. I just told him that I needed some money.
Mr. Weitz. Did you ever discuss the fact that in general these
moneys were being used directly or indirectly for political purposes?
Mr. Lilly. Yes ; I did that.
Mr. Weitz. Do you recall any specific conversation to that effect, or
specific circumstances to that effect ?
Mr. Lilly. No, I do not recall the circumstances. But I feel that we
h-^d betAv^en the two of ns — he realized they were for political purposes,
' : ' ^^p was not questioning me.
5957
Mr. Nicholas. Going back to the beginning, before you ever received
any checks from Stuart Russell — do you understand what I'm talking
about?
Mr. Lilly. Yes.
Mr. Nicholas. Remember tliat exhibit with the attorneys' names on
it, made out by Isham and Harold Nelson, were there any conversa-
tions between you and Russell, or Harold Nelson and you and Russell,
or you, Russell, Harold Nelson and Isham concerning how this was
going to operate? Bear in mind, if you just make out a list of lawyers'
names and put amounts by them, they are not a party to the transaction
at the time.
How did Russell become a party to that transaction? That is what
Alan is asking you, I believe.
Mr. Lilly. On
Mr. Nicholas. See if you can think back.
Mr. Lilly. On looking back at exhibit 2, where the list of lawyers'
naines are, I notice that to the left of the names, there is a dash; Joe
Long, F. Masters, S. Russell, Jim Jones.
I see on Jim Jones, there is a 1, indicating that DeVier Pierson
was to contact him ; just to the right. Bob Isham was to contact him —
I mean the figure with a dash to the left. I notice on Joe Long and
Frank Masters, I have a check that says OK, that indicates that I
talked with them or asked them for some money at the time.
And I am not sure what it is. It does not indicate on this par-
ticular instrument that I talked to Stu Russell at the time. But that
doesn't mean — I just cannot recall a conversation I had witli him
about it.
Mr. Weitz. Do you ever recall talking to him about his recouping
moneys paid to you by billing the firm, billing the company ?
Mr. Lilly. Yes. I have had conversations with Mr, Russell, and it
was in San Antonio, and it was one conversation, and I will tie it
down to a date, because I have a note of it. It is on May 3, 1971. And
this actual conversation — my notes read that I phoned him — meaning
Mr. Russell — on May 1, and met with him in person on the morning
of May 3 in San Antonio. "That" on page 4 should have dashes around
it.
And at that particular time, it was evident that an amount of
$10,000 was needed for a contribution, for an expenditure. And Mr.
Russell talked with Mr. Isham and myself, and we talked about ways —
he indicated this was an expensive route to sfo. For him to make avail-
able to me $10,000, it would cost AMPI $20,000, and surely there could
be another way set up.
And he suggested setting up dummy procedure accounts, set up re-
pair accounts, et cetera
Mr. Weitz. So it was clear from that, that he knew that whatever
he paid you he would recoup, and it would cost AMPI double?
Mr. Lilly. Yes.
Mr. Weitz. Were there occurrences though — you do not recall any
specific situation wliere you did discuss the political purposes to which
the funds were used ?
Mr. Lilly. I could have. I do not recall it.
Mr. Wettz. Of course, we have just referred to the moneys that
Russell paid to Muskie, and presumably was reirnbui-stHl by AjNIPI.
So that would be one instance at least^
5958
Mr. Lilly. Right.
Mr. Weitz [continuing]. In which he was using corporate funds
to funnel through to corporate purposes.
Mr. Lilly. True.
Mr. Weitz. But you were not directly involved in that?
Mr. Lilly. No, not directly involved.
Mr. Weitz. I would like you to take a look at exhibit 22, which is
a Xeroxed copy of a short note on Stuart Russell note paper. And it
reads, "Bob, this represents $5,000 cash given Preach Griffith for Page
Belcher campaign funds. My direction is due. This came from Leo
Suttle." And it is signed, apparently, Stuart H. perhaps with a
squiggle.
Could you look at this and see whether you have ever seen that, and
identify it for us?
[Whereupon, the document referred to was marked Lilly exhibit
No. 22 for identification.*]
Mr. Weitz. Off the record.
[Discussion off the record.]
Mr. Weitz. Let's go back on the record.
Mr, Lilly, can you tell us what transaction this exhibit 22 refers to ?
Mr. Lilly. Yes, In the year of 1970, Mr. Page Belcher, Congressman
Page Belcher, was running for reelection, and Jim Jones was his op-
ponent. I acted alone, on my own, without talking with anyone, and
made a contribution to Mr. Jim Jones from TAPE for $5,000, and
this apparently upset a number of people including Mr. Nelson and
Mr. Parr and other people in my own organization. And the determina-
tion was made that they would have to make contributions to Mr.
Belcher.
The contributions — ^the decision- was made by someone that the con-
tributions would be made in cash. And on or about June 1970, the first
contribution in the amount of $5,000 was made. It was made and de-
livered by Mr. Tom Townsend and Mr. Keiffer Howard — that's
K-e-i-f-f-e-r.
And Mr. Russell sent me this exhibit 22 to indicate to me that he had
spent $5,000, had cashed a check for that amount of money, and given
to them. Mr. Griffith, to my knowledge, was not along with them, but
Mr. Griffith was chairman of our TAPE committee ; he is an AMPI
board member. He does live in Oklahoma, and he certainly would be
involved and interested.
At a later date in 1970, at about September, $10,000 cash was con-
tributed in the same manner, delivered, in that instance, by Mr. Town-
send and by Mr. Dave Parr to Mr. Belcher. And, again, the cash was
obtained from Mr. Stuart Russell, and the delivery made. And, in turn,
in time, he billed AMPI for the contribution.
Mr. Weitz. So it is clear from at least this exhibit and your recollec-
tion of those two instances that Mr. Russell knew, and at least in two
instances acted as a conduit for corporate funds for political purposes
to a political candidate ?
Mr. Lilly. Yes.
Mr. Weitz. Were there any other notes which he would append to
his bills which would indicate moneys which he was funneling through,
in addition to his regular billing ?
♦See p. 6041.
5959
Mr. Lilly. I do not recall any notes. There possibly could have been
some, but the one you see there, exhibit 22, is the only one that I have
in existence. Of course, earlier we referred to the memo, that he sent
me some correspondence that pertained to. some contributions.
Mr. Weitz. Muskie contributions ?
Mr. Lilly. For Muskie. But to my knowledofe, this is the only thing
in writing that I do have from him, outside of this conversation that
was held with Mr. Isham at another time. But to my personal knowl-
edge, I know that we talked about it.
Mr. Weitz. "What about that conversation with Mr. Isham ?
Mr. Lilly. This was when we were talking about ways and manners,
a cheaper way of going about making these
Mr. Weitz. Are you aware of whether Mr. Russell, in both April
of 1971 and April of 1972. asked for additional funds to cover his
excess taxes as a result of this conduit operation ?
Mr. Lilly. In April
Mr. Sanders. May I just ask one question about this [indicating] ?
Mr. Weitz. Certainly.
Mr. Sanders. This exhibit 22 indicates that Russell gave the $5,000
cash to Griffith for Belcher. And yet, in explaining it to us, I thought
you said it was given to Townsend and Howard ?
Mr, Lilly. That is true; they delivered it. I think he mentions
Preach Griffith in this to indicate to me that ISIr. Griffith had OK'd a
contribution to him; but actually, physically handling it was Tom
Townsend and Keiffer Howard making delivery. And as to how much
involvement Preach Griffith had. I am not aware of that.
But I think this is an indication, because I do not think that Mr.
Griffith delivered it to Tulsa, and I assume they delivered it to Tulsa
to the (/ongressman.
Mr. Weitz. Was it not true that Preach Griffith had complained to
you personally about the contribution you had approved for Jones?
Mr. Lilly. Very violently ; yes.
Mr. Weitz. Did he also talk to you directly about this other contribu-
tion to Belcher?
]\Ir. LiTj,Y. He said, "Well, we are going to havo them unha])py with
us, and we are going to have to make contributions to Belcher and do
what we can to get him reelected." And, of course, we had a difference
of opinion on this, but that is neither here nor there, because in turn
the decision was made — I think Mr. Belcher made the decision that he
would not take a political contribution from TAPE. Since we had
made a political contribution to Mr. Jones, he would not take one.
So, evidently he was going to be reelected, so some effort was made
to make amends with Mr. Belcher.
Mr. Weitz. Could you tell us what you know about Russell's request
for additioncil compensation?
Mr. Sanders. I am sorry ; I am still on
Mr. Weitz. Oh, I am sorry.
Mr. Sanders. Griffith was a member of the board of AMPI?
Mr. Lilly. Yes ; he was then, and he is now.
Mr. Sanders. I have never heard before the name of Suttle. Can you
identify him?
Mr. Lilly. Leo Suttle is on physical disability retirement, living in
Kansas, Wichita I believe, Kansas. He was a division manager when
5960
we had MPI, and I am not sure of the time that he went on retirement,
disability retirement, but he still is on disability retirement.
Mr. Sanders. It indicates that he
Mr. Lilly. He was aware of it.
Mr. Sanders. Not only aware of it, but that he had some authority in
the matter. It said : "My direction to do this came from Leo Suttle."
Mr. Lilly. This would indicate that to me, and I have not talked
with Mr. Suttle — along about this time, he went on retirement, and he
has been rather inactive. He still is on retirement, I might say.
Mr. Sanders. Did he — in general, did he — was it your understanding
that he could exercise some authority in
Mr. Lilly. In this field ?
Mr. Sanders [continuing]. In granting political contributions?
Mr. Lilly. Mr. Suttle was division manager. He had the State of
Kansas that he was division manager in, and in the State of Kansas,
certainly, before you made a political contribution, you pretty well
checked with Mr. Suttle. He felt rather strongly about it.
Here we have a situation, being in the State of Oklahoma, which
was out of his domain, so to speak, but apparently he felt pretty
stix)ngly about my having contributed to Jim Jones, as well.
Mr. Nicholas. On that point, I would like to ask Bob a question
off the record, in case it is not germane.
[Discussion off the record.]
Mr. Sanders. Back on the record.
Mr. Weitz. You were going to tell me about your knowledge of Rus-
sell's request for additional money at tax time in 1971 and 1972.
Mr. Lilly. Mr. Russell and Mr. Isham had both told me along about
April of 1972, Mr. Russell talked with Mr. Isham and told him that
for the years 1969, 1970, 1971, in his political contributions that he had
made, even though he was contributmg and billing double the amount
he contributed, he had not recovered sufficient moneys to pay his in-
come tax, and he was some $66,000 — in excess of $66,000 — short and
lacked that much money having enough to pay the additional taxes
he had paid during those years.
And subsequently, a check was issued to him in 1972 in excess of
$66,000.
Mr. Weitz. Did he talk to you about it at that time ?
Mr. Lilly. No ; not that I recall. The conversation that I had with
him was about the particular $66,000. It was about 6 weeks or 2 months
ago.
Mr. Nicholas. Do you mean to Stu ?
Mr. Lilly. It was in your office [pause] 6 weeks ago that I talked
with him. Bob Isham talked to me at the time about it.
Mr. Weitz. Did Russell, either at that time or 6 weeks ago or at
any time, ever admit to you that he knew, or indicate 4o you, that he
knew this money was going for political purposes?
Mr. Lilly. I think this was the purpose. He indicated to me he had
not billed us enough money to pay for the political contributions that
he had made.
Mr. Nicholas. Did he use that kind of wording, as opposed to pay-
ments to you ?
Mr. Lilly. As I recall, yes. That is my recollection of it.
Mr. Nicholas. Can we go off the record.
5961
[Discussion off tlie record.]
Mr. Weitz. Back on the record.
So you say that several weeks ago, Russell said that he was angry
because of the fuss over the $66,000 he had received to cover his taxes
for the moneys that he had given to you for political contributions?
Is that the gist of it ?
Mr. Lilly. That is the gist of it. He felt rather bitterly or strongly
because someone would raise any objection. He was recovering $66,000
that he had been out in taxes in 1970 and 1971 that he had not been
paid for. Why should anyone raise a question or a point when he was
paid $66,000 to cover these taxes ?
Mr. Weitz. At any time during the 2- or 3-year period of these trans-
actions, did he ever ask you, for example, what the moneys were going
for?
Mr. Lilly. No.
Mr. Weitz. Do you know whether he ever asked either Mr. Nelson
or Mr. Isham %vhat types of purposes these moneys were going for?
Mr. Lilly. I feel sure he would not have asked Mr. Isham ; I doubt
if he would have know^n, to start with, Mr. Isham ; and I know, he and
Mr. Nelson certainl}' could have had conversations, but. I am not
aware. There were other — OK. I say that on one
Mr. Weitz. Why don't we go into it ?
It has come up in a few cases, so why don't you tell us about the
transactions leading up to the payment in May 1971 of $10,000 and
Russell's involvement in that ?
Mr. Lilly. All right.
In 1971, according to my notes, I have, on April 28, 1971 Jake Jacob-
sen called me in San Antonio, recjuesting $10,(K)0 cash for John Con-
nally, and he requested I deliver it to him for placing in Connally's
safe deposit box at Citizens' National Ba-nk, and this is what I have
in my notes.
On May 3, I contacted Stu Russell in Oklahoma City, and he ad-
vised me he would make the cash available in an amount of $10,000
as I requested it, but that it was expensive to AMPI to pay income tax.
I phoned him on May 1, and met with him personally on the morning
of May 3 in the San Antonio office on possible ways to get money with-
out doing it so costly, set up dummy procedures accounts, a repair
account, et cetera.
Money was not obtained through Stii, and I did not reeontact him
after May 3. T l)orrowed the money in that inptance.
Then, on May 4, 1 contacted
Mr. Nicholas. Wait a minute.
[Discussion off tlie record.]
Mr. Vv^'eitz. T>et's go back on the record.
Now, when you met with him on the 3d, you discussed with him
ways in which you could recoup the money, and he said you might be
able to get it directly from AMPI for dummy accounts?
Mr. Lilly. True.
Mr. Weitz. Did you then go back to Nelson and discuss that pos-
sibility?
Mr. Lilly. I went ba^^k and did discuss it with Mr. Nelson on the
morning of May 3. and he thought about it for a while and said that
Mr. Parr was coming over, Dave Parr, in the p.m. on the feame day ;
5962
tliat he would talk to Mr. Parr on this and make a decision if I would
request the money from Mr. Russell or from the attorneys or if I
would borrow the money.
And on the morning of May 4, Mr. Nelson advised me to borrow the
money, the $10,000, and I did, and it was note No. 17266 at the Citizens'
National Bank in Austin. And, of course, I borrowed the money ; I
i-educed it to cash ; I gave it to Mr. Jacobsen in the bank at the Citizens'
National Bank, and he in turn stated he would put it in Connally's
cashbox, or put it in his cashbox and hold it for Connally. I am not
sure what he might have said.
And Mr. Nelson did not advise me as to how to recover the money,
but did further state that the money was recovered through the attor-
neys' scheme procedure.
Mr. Weitz. Not necessarily Mr. Russell ?
Mr. Lilly. Not necessarily Mr. Russell ; no.
Mr. Wbitz. When you were talking to Mr. Russell about this, did
you tell him the purpose to which the money would be put, this
$10,000?
Mr. Lilly. I do not know if I did or not.
Mr. Weitz. Did he ask you what the money would be used for?
Mr. Lilly. That I do not know either.
Mr. Weitz. Now, to complete this, did either Mr. Connally or Mr.
Jacobsen again talk to you about that transaction ?
Mr. Lilly. On that particular transaction, no. At a later date, on
the October 13, 1971
Mr. Nicholas. You used the word "Mr. Connally."
Mr. Connally never did talk to Bob about
Mr. Lilly. No; Mr. Jacobsen.
Mr. Nicholas. Mr. Jacobsen did this.
Mr. Wbitz. Mr. Connally never talked to you about that trans-
action ?
Mr. Lilly. No ; he did not.
Mr. Weitz. From that point forward to today, have you ever talked
to Mr. Connally ?
Mr. Lilly. I have talked with Mr. Connally.
Mr. Weitz. From May 4, 1971, to the present time, have you ever
met with or talked with John Connally?
Mr. Lilly. Not in a private conversation. I have seen him, said
hello, shaken hands at a reception or in the airport, in passing, I
mean ; but no conversation since May 4.
But at a later date in 1971, Mr. Jacobsen, on October 13, called me
while I was stopped in Dallas en route to Washington, D.C. I was on
Braniff flight 415. He had called my San Antonio office; I checked
into the office and got his call from Annette — ^that's A-n-n-e-t-t-e —
Tomisini — T-o-m-i-s-i-n-i, Mr. B. W. Bain's secretary.
Mr. Weitz. B-a-i-n ?
Mr. Lilly. B-a-i-n.
Mrs. Buckley, B-u-c-k-1-e-y, answered my call. This was when I
called Mr. Jacobsen, and she was Mr. Jacobsen's secretary, and said
that Mr. Jacobsen was in his office. It was about 12:45 p.m.
He informed me he was going to Washington, D.C, soon and
wanted to tell Mr. Connally that we would have another $5,000 for
him in cash, and have it in "Jake's safety deposit box at the Citizens'
National Bank in Austin in a short time."
5963
And I told him OK, he could tell Mr. Connally that.
On November 10, 1 went to Austin and I bad a check from Mr. Stu
Russell for $5,000, and this was cashed, reduced to cash. And in the
presence of Mr. Joe Long, Mr. Jacobsen's law partner, I delivered
it to tlieir law office and gave the money to Mr. Jacobsen.
It was in an envelope. I did not count the money out. I just handed
him the envelope. And he left at about 11 :45 on November 10 to go
to the bank to put it in the safe deposit box.
Mr. Weitz. Now, that same day, did you also have an occasion to
see Mr. Jacobsen earlier in the day ?
Mr. Lilly. Yes ; as I arrived in Austin — and I had flown to Austin
from San Antonio — I went into the airport and I ran into Mr.
Jacobsen. I also ran into Mr. Tom Townsend, an AMPI employee,
Mr. Dave Parr, an xiMPI employee ; and Mr. Joe Long, Mr. Jacobsen's
partner, came in a little later.
Mr. Weitz. Where were they meeting ?
Mr. Lilly. They were meeting in the coffee shop. The Austin Airport
is so arranged that you see the coffee shop when you go into it, and
they spoke to me, and I walked in.
Mr. Jacobsen handed Mr. Parr an envelope and said, "this is $5,000
for Mills." There was no money counted at the time, but it was in
an envelope, and he did give it to him at the time. This was about
9 o'clock.
And then an hour or ly? hours later, I was in Mr. Jacobsen's office,
delivering him $5,000 cash, the proceeds of the Stu Russell check.
And if I am not mistaken, that Stu Russell check on that particular
date was made out to cash and possibly endorsed by Mr. Russell, or
maybe endorsed by me. It was Novemlier 10, 1971.
Mr, Weitz. Did you ask Mr. Jacobsen wlien you gave him the $5,000
later in the day, whether it had any connection with the earlier $5,000?
Mr. I^iLLY. No.
Mr. Weitz. How did you know the earlier money was, in fact,
$5,000?
Mr. Lilly. Only what he said: "Here is the $5,000 for Wilbur
Mills," in my presence, Tom Tov.-nsend's presence.
Mr. Weitz. Had you provided, except on these two occasions, other
monej'S to Mr. Jacobsen, other cash ?
Mr. Lilly. No ; these were the only two occasions.
Mr. Weitz. Now, do you know of a check that was drawn by Stu
Russell to cash on or around October 10 — no ; T am sorry, November 10?
Off the record.
[Discussion off the record.]
Mr. Weitz. Back on the record.
Mr. Lilly. I have a check, a Xeroxed copy of a check, No. 765,
signed by Mr. Stuart Russell, and it is made out to cash, dated Novem-
ber 3, 1071, in the amount of $5,000. That check is endorsed, "Stuart
Russell," and I recognize that. It certainly appears to be Mr. Russell's
signature.
And this particular check was handled ]>y me through the Citizens'
Bank and reduced to cash. And this is where I derived the cash to
give to Mr. Jacobsen on the 10th of November.
Mr. Weitz. That is check No. 765 ?
Mr. Lilly. No. 765.
5964
Mr. Weitz. ok.
Is this a copy of that check ?
Mr. Lilly. Yes ; it is.
Mr. Weitz. All right.
We will mark that as exhibit 23.
[Whereupon, the document referred to was marked Lilly exhibit
No. 23 for identification.*]
Mr. Weitz. These notes at the bottom of exhibit 23 are your notes ?
Mr, Lilly. These notes were made by Mr. Nicholas fairly recently.
Mr. Nicholas. Let me read you those notes.
Mr. Weitz. I would rather Mr. Lilly read the notes.
Mr. Nicholas. You can't read them off that. Use the original.
Mr. Lilly. The notes at the bottom that were made by Mr. Nicholas
refer back to November 10, 1971, the date we are referring to, when
this check was cashed.
Citizens National Bank, Austin, cashed this $5,000 check and took cash to
Jake Jacobsen at his law office and gave him the money in the presence of Joe
Long. Jake requested the money earlier in October 1970 and said Jake left for
bank at 11 :45 a.m. to put in his safety box at Citizens Bank to hold for Connally.
Mr. Weitz. Do those notes accurately reflect your recollection of the
events ?
Mr. L1L1.Y. Yes, they do.
Mr. Weitz. All right.
Then they will be included in the exhibit.
Mr. Nicholas. So that will be clear, that is what Mr. Lilly told me,
his lawyer.
Mr. IVeitz. But he has read it into the record, and he says that
refreshes his recollection. It is accurate to those events as best he can
recollect it.
Now, of the Stu Russell checks that we have, there are two checks
in addition to that, and they are also in cash, one on Octol>er 5, 1971,
one December 14, 1971, both signed by Jane Hart, one in the amount
of $4,000, one in the amount of $5,000. ^
Off the record.
[Discussion off the record.]
Mr. Weitz. On the record.
Mr. Lilly. Earlier I was reading notes that Mr. Nicholas had made.
It should read October 1971 instead of October 1970.
Mr. WEriv.»That would be on exhibit 23 ?
Mr. Lilly. On exhibit 23.
Mr. Weitz. With regard to the two checks that I have just men-
tioned, would you take a look at them and see if either of them has any
significance to you ?
Do you know what transactions tl^ey represent ?
Mr.' Lilly. On the check No. 847, dated December 14, 1971, for $5,000
cash, Jane Hart endorsed the check. This is Mr. Russell's secretary.
I had closed out the bank account in Austin, Tex., and in some notes,
I had already informed Mr. Nicholas that I have no knowledge of this
at all. It is a total blank to me ; I do not know what it is for.
On the October 5, 1071 [pause]. I have a payment to the Citizens
National Bank. The source of the money, according to my records
Mr. Weitz. Exhibit 6.
♦See p. 6042.
5965
Mr. Lilly [continuing]. On deposits, that this was deposited. It
says: "Cash payments on note, $4,000, Stuart Russell, October 8,
1970."
So I assume that the check went directly to pay on the note from
the note that I have here and was not deposited in the bank.
Mr. Weitz. Thank you.
We will enter that as exhibit 24.
[Whereupon, the document referred to was marked Lilly exhibit
No. 24 for the identification.*]
Mr. WErrz. Off the record.
[Discussion off the record.]
Mr, WErrz. Back on the record.
Mr. Lilly, I would like to ask you about the other individuals men-
tioned on the exhibit 2 as perhaps being involved in the repayment
plan.
In regard to Jim Jones, your exhibit 6 shows him having made two
checks to you in the amount of $5,000 each, one that you deposited on
December 31, 1969, and another that you deposited on May 6, 1970.
Now, with regard to these payments, or the preparations for these
payments, do you remember any contact directly with Mr. Jones or
any accounts given to you of his knowledge of these transactions?
Mr. Lilly. No, I do not. He was an employee at the time, and it is
quite possible that Mr, Isham could have talked with him. According
to this, Mr. DeVier Pierson — exhibit 2 — Mr, Pierson was to contact
him, and it is so indicated on this by Mr. Isham. I do not know that
to be true, but I did not contact him..
Mr. Weitz. Did you have any personal contact with him in connec-
tion rwith receiving these two checks?
Mr. Lilly. No. They were mailed to me, and I received them and
they were deposited.
Mr. Weitz. And he did not talk to you either before or after sending
you the checks?
Mr. Lilly. Not that I remember at all.
Mr. Weitz. So you have no personal knowledge or secondhand
knowledge, except his being listed on exhibit 2, of having known about
or participated in those transactions?
Mr. Lilly. No. That is true. I received his checks and they were
deposited, so that is my total knowledge of it.
Mr. Weitz. Do you know whether there was any additional moneys
paid to him above this retainer ?
Mr. Lilly. If so, I did not see the bill or handle the bill.
Mr. Weitz. Was he the only employee ultimately to have parti^i
pated directly in this conduit system ?
Mr. Lilly. Well, he was on the payroll as an employee. The others
were on the payroll as retainer fees. I do not know how you distir^
guish the difference. There is a difference, I am sure.
Mr. Weitz. Was he a full-time employee of the company ?
Mr. Lilly. A full-time employee on a stipulated annual salary.
Mr. Weitz. And he had no other employment to your knowledge ?
Mr. Lilly. Yes. He and his wife were both attorneys and practicing
law in Tulsa.
♦See p. 6043.
5966
Mr. WErrz. So, in effect, the pajTnents that he would receive may
not have been very much different than other attorneys on a retainer
fee basis?
Mr. Lilly. The only difference being he was charged with the respon-
sibilit}' of putting our publication together, and this falls generally
outside an attorney's role, I think. So in that sense I would say he
would be an employee, at least to my way of thinking.
Mr. Wettz. Did your decision to make political contributions, to
have TAPE make political contributions, to Jones in 1970 — was that
in any way related to his participation in this conduit scheme?
Mr. Liij^y. No. This was totally separate, apart, and independent.
This was a decision that I made to contribute to him.
Mr. WErrz. OK.
Off the record.
[Discussion off the record.]
Mr, Weitz. On the record.
Mr. Lilly, with regard to a check dated August 27. 1970, in the
amount of $10,000 from Stuart Russell to you, endorsed by you and
Joe Nigrelle, JsT-i-g-r-e-l-l-e, which I Aviil mark as exhibit 25, would
you please identify this and tell us what you know about that
transaction ?
["VN^iereupon, the documc^nt referred to was marked Lilly exhibit
No. 25. for identification.*]
Mr. Lilly. Yes, This was a check that Mr. Russell sent to me at my
request, and the money — it was reduced to cash in San Antonio. I do
not bank in San Antonio, and, consequently, Mr. Nigrelle did, and that
is why his signature appears on this. He helped me reduce this check
to cash. It went to Arkansas.
Mr. Dave Parr requested the check. He indicated to me that Mr.
Phil Campbell, who is Tender Secretary of Agriculture now and was
at that time, had made this request.
jMr. Parr asked me to delivei- $10,000 to Atlanta. I was to contact
Mr. Howard Calloway, who apparently was the campaign manager,
or had something to do with ^Ir. Bentley's gubernatorial race. But.
further. T was given the names of Larry Sizemore, S-i-z-e-m-o-r-e-,
and Terry, T-e-r-r-y, ISfcKenna, M-c-K-e-n-n-a, with a telephone
number of area code 404-521-2268 in Atlanta, and I was to contact
them about delivery of this $10,000.
I did contact them. I did make the delivery on the 9th and 2d
of 1070 at the Atlanta airport, to Mr. Sizem.ore and Mr. IMcKenna
and have a card signed, "Receij)t acknowledged, Mr. McKenna."
Mr. Weitz. Mr. Lilly, did Mr. Parr tell you anything further about
the request from Campbell?
Mr. Lilly. No. I checked with Mr. Nelson. I told him I had this
request from Mv. Parr, and should T go through with it. Mr. Nelson
told me that T should go tlirough with it and carrv out this partic-
ular thing, and it was can-ied out. I mean, this is all of the informa-
tion I have on it.
Mr. Weitz. Do you remember whetlier Mr. Parr told you Avhether
he had made a commitment voluntarily or whether Mr. Cnmpbcll
had initiated the request?
*Spp p. fin44.
5967
Mr. Lilly. His conversation with nie was that Mr. Campbell had
requested that we make such a contribution.
Mr. Weitz. And Mr. Parr agreed ?
Mr. Lilly. Well, evidently so, because he called me and asked me
to do it.
Mr. Weitz. Off the record.
[Discussion off the record.]
i\Ir. Weitz. Back on the record.
Exhibit 6 indicates that Frank Masters made payments totaling
$6,000 to you on three separate occasions.
Do you recall what contacts that you had with him and what you
told him about those transactions?
Mr. Lilly. I contacted Mr. ISIasters and told him that I needed
some political contributions, and that I was exj)ecting him to make
a political contribution, and he did make a political contribution.
I might say that I had to prod him a time or two, and he did make
the contributions, scattered out over a period of time. In my records,
the record, exhibit 6, indicates with the first deposit having been
made early in — at the beginning of the $100,000 note, and in Septem-
ber of 1970 and October or thereabouts of 1970.
Mr. Masters did deliver cash to me. He did not talk to me about
it. He went ahead and gave me the money, and, to my knowledge, he
did not bill AMPI.
Mr. Weitz. Did you tell him what the payments were for?
Mr. Lilly. No.
Mr. Weitz. And he never asked ?
Mr. Lilly. He said, "Do you have to?"
And I said : "Yes, sir. If you don't believe me, talk to Mr. Nelson."
Mr. Weitz. Did you tell him they were going to any State candi-
dates or going to Austin or anything like that ?
Mr. Lilly. As I recall it, I just told him they were political con-
tributions, I needed some help from him.
Mr. Weitz. Did he ask any questions?
Mr. Lilly. No ; not that I recall.
Mr. Weitz. To your knowledge, he was never reimbursed from
AMPI?
Mr. Lilly. To my knowledge, he was never reimbursed.
Mr. Weitz. Did you tell him he could be reimbursed ?
Mr. Lilly. No : I did not say that he could or could not. I told him
Avhat I needed.
Mr, Weitz. Had he talked to Nelson beforehand ?
Mr. Lilly. I feel that he had. yes. I do not know this. I do not think
Mr. Isham talked to him ; I think Mr. Nelson.
The reason I say that is because Mr. Nelson and Mr. Masters have
been close, have been acquainted or worked together for a number of
years, and they have a close relationship.
Mr. Weitz. Had you told any of the others ?
For example, I think I forgot to ask you — did you tell Jones that
he could be reimbursed or should be reimbureed ?
Mr. Lilly. No, I had not contacted Jones.
Mr. Weitz. So you do not know what was told to him ?
Mr. Lilly. I do not know what was told to him.
5968
IVfr. Wkitz. Had you ever told Jacobsen or Russell or anyone else
they could be reimbursed ?
Mr. Lilly. I do not remember tellinjj anyone that they could be
reimbursed on any of these checks. I told them what I needed. I felt
that they knew that they could be reimbursed. It was quite obvious,
because IjiUs were coming in.
Mr. Nicholas. May I ask him a question on that ?
Mr. Weitz. [Nods in the affirmative.]
Mr. Nicholas. On the Frank Masters thing, do you know from your
own knowledge whether or not Frank Masters and Harold Nelson
had a falling out in 1968 over the antitrust suits and the business that
Masters was not getting from Nelson — listen to the whole question,
now — or do you know about it ?
Mr. Lilly. I know a little bit about the backlash of it, but I really
don't know too much about it.
Mr. Nicholas. The question I am asking you is this : Do you know,
from knowing Frank Masters and from knowing Harold Nelson, that
at some time in tlie year 10(i8, Masters and Nelson had a fallino; out
because Nelson was retaining other lawyers in the lucrative antitrust
litigation and leaving out Masters?
Mr. Lilly. That T know.
Mr. NiCHOiiAs. That is correct?
Mr. Ln.LY. That is correct.
Mr. Nicholas. So would it be likolv that Masters would liave con-
sulted with Nelson about these kickbacks or schemes to pay back
moneys ?
Mr. Lilly. Probably not, because they were not speaking to each
other, truthfully. T do know that Masters made some board meetings
and went through the entire board meeting without a word passing
between the two of them. It went on for some time, so possibly not.
Mr. Nicholas. Is Masters, in fact, still working on a retainer fee
basis for AMPI?
Mr. Lilly. T think he works on a — not on a retainer basis.
Mr. Nicholas. On a time basis ?
Mr. Lilly. But on a time basis. He does do some work.
Hut I would like to clarify; you asked me just a moment ago if I
told any of these attorneys — I mean, I do not recall ; it is possible, but
I certainly do not recall, except some of the conversations that I have
already related that I had with Stu Ilussell.
Mr. Weitz. All right.
With resrard to Richard Maeuire, exhibit 6 indicates that four
payments in the amount of $10,000 were made from Maguire to you.
Can you tell us anything about those transactions?
Mr. Lilly. Yes ; I can.
On the transactions, the $5,000 transaction that occurred on or
about October 5, if I am correctly reading across the lines, I came
to Washington. I believe that was October 30, 1970.
My notes indicate that I have — I picked up $5,000 cash from
Maguire in Washington, D.C. The other money, insofar as I know,
most of the money from Maguire I would pick up at the same time
that I would pick up moneys from Cliff Carter.
He would deliver it to me, or I would pick up from Cliif. This
might have been Austin, Tex., Kerrville, Tex. I remember these were
5969
two of the places that I met Cliff Carter at one time or another. He
would usually have some money from Maguire and this is the way
I got a portion of the money from Maguire.
Mr. Weitz. So on those occasions you dealt just with Carter?
Mr. Lilly. That is true. I dealt with Carter.
Mr. Weitz. Did he tell you what he was telling Maguire about
those moneys ?
Mr. Lilly. He didn't tell me anything.
Mr. Weitz. In the billings which we have from Maguire to AMPI,
it indicates that his retainer was increased in January of 1970 from
$2,500 a month to $4,000 a month.
Are you aware of the background of why his retainer was increased ?
Mr. Lilly. No; I am not. It corresponded very closely to the time
some of these moneys started coming in.
Mr. Weitz. With regard to Cliff Carter, there are five transactions
indicated in exhibit 6 involving moneys from him to you in the total
amount of $10,000.
Can you tell us about those transactions ?
Did you deal directly ? You apparently dealt directly with Carter.
Mr, Lilly. Directly, as far as receiving moneys.
Cliff Carter would call me at San Antonio, or through some way or
the other meet me in Austin, Tex., or Kerrville, and tell me he was
coming that way, or call me if I happened to be coming to Washing-
ton and he would make an arrangement to meet me somewhere in
Washington, D.C. I never met him in his office.
And he would deliver some money to me, and say, "In the envelope
is $2,500, $1,500, $1,000 from Maguire," and that would be the
conversation.
Mr. Weitz. Did he know what purposes the moneys were going
to?
Mr. Lilly. Insofar as I know I did not tell him, and I did not con-
tact him. I did not know Cliff Carter that well.
Mr. Weitz. "Who did know him well at the company ?
Mr. Lilly. At the company I am not really sure that anyone knew
him that closely. I would think this would be an indicator that DeVier
Pierson contacted him, and it seems that that probably did happen,
that DeVier talked to him.
Mr. Weitz. I think you mentioned earlier that, in some connection.
Bob Justice might have picked up some money from Maguire and/or
Carter.
Can you tell us about that transaction ? [Pause.]
[Discussion off the record.]
Mr. Weitz. Let's go on the record.
Mr. Lilly. Cliff Carter called me at a date — I will have to check my
notes out to determine when — and told me that Bob Justice,
J-u-s-t-i-c-e, an AMPI employee of Mr. Dave Parr's from Little
Rock, Ark., was in Washington and had been to his office asking him
for money. And also he had asked Mr. Maguire, Dick Maguire, for
some cash.
Mr. Carter, wanted to know if I knew Mr. Justice was in town, and
I told him, no. And he wanted to know if he had authority to do it.
I told him this was not my decision to make as to whether he did or
did not.
5970
At any rate, Mr. Carter told me that — well, he called me back and
told me later that he had given Mr. Justice — and as my memory serves
me now, without referring back to my notes, I can't locate — it was
$2,500. And the money later went into the campaign of Senator
Humphrey. And this would have been when he was running for Sena-
tor in 1970.
Mr. Weitz. Did he indicate that any money was given from Maguire
or on behalf of Maguire ?
Mr. Lilly. Mr. Carter indicated to me that Maguire was quite upset
because Bob Justice or someone he didn't know had walked into his
office and was asking for cash. So Mr. Maguire did not give him the
money. As a matter of fact, Cliff Carter said he had given the money.
He was acting for both Maguire and Cliff Carter.
IVIr. Weftz. And the bast you can recall, that was the total, $2,500?
Mr. Lilly. That is right.
Mr. Weitz. '\^niat connection did either Carter or — I am sorry —
Justice or Parr have with the Humphrey campaign at that point?
Mr. Lilly. Well, Bob Justice had been employed — he had worked
for one of the Governore of Arkansas, and Mr. Parr had employed Mr.
Justice in a political capacity. And I believe along in 1968, 1 was first
working with him in 1968, in a political campaign.
I remember that I did send Mr. Justice back home and have Mr. Parr
furiously on me for the rest of my days while he continued to work
for AMPI, because Bob Justice was, to my own personal knowledge,
not very astute, very capable, ver}' qualified, so I sent him back home.
And Mr. Parr made me send him back, so T did not work with him.
And he raised moneys. And I can find other tracks at other places
where Bob Justice had been in getting some money for one reason or
the other.
At one time. T worked for Pat Hillings' campaign in California, in
a special election. Bob Justice showed up out there in California.
Various other places, Bob Justice would show up.
I never really knew what capacity he might have served in, but he
did raise some moneys. I am not sure who the moneys went to. In this
one instance, I believe that they did go to Humphrey, but I will have
to check my notes.
I do not know how much moneys, nor where he collected moneys, but
I am sure there was some money collected and spent at some place by
Bob Justice.
Mr. Sanders. What I would really like to know is how you learned
that his money went to tht^ Humphrey campaign ?
Mr. Lilly. In this particular instance — this is why I need to find
my notes, and I will find them— because the money was given to me,
it was sent to me by Bob Justice, and I in tui-n delivered it or mailed
it to Jack Chestnut, I believe, who was the campaign manager for Sen-
ator Humphrey,
Mr. Sanders. There is a note of that on your chronology, right?
Mr. Lilly. No.
Mr. Sanders. Yes ; there is.
Mr. Lilly. Jack Chestnut, yes; but this is other money that I am
personally aware of. I am talking about some money from Bob Justice.
Mr. Sanders. Justice gave this, perhaps $2,500. to you ?
Mr. Lilly. And I delivered it.
5971
Mr. Sanders. To Chestnut ?
Mr. Lilly. Right.
Mr. Nicholas. In cash or check ?
Mr. Lilly. I will have to look at my notes. Now I cannot recall. I
do have the information.
Mr. Weitz. Do you know whether Carter was reimbursed from
AMPI?
Mr. Lilly. This I do not know. If he was reimbursed, I do not know
what he was told, why the money was needed. I do not know if this was
the only occasion in which Bob Justice might have gone to him for
money or not.
Mr. Sanders. Did you say you cannot remember whether you hand
delivered it to Chestnut or mailed it ?
Mr. Lilly. The reason I cannot is because — if I could find my notes —
it was reduced to a check, a cashier's check, which it seems for some
reason it was. I would have mailed it rather than — unless I had a reason
to go to Minneapolis, I would have mailed it. And certainly if it was
cash I would not have mailed it ; it would have been hand delivered.
And that is why
Mr. Sanders. Do you want to take another few minutes to see if
you can find that ?
Mr. Weitz. Let's go off the i-ecord.
[Discussion off the record.]
Mr. Weitz. Let's go back on the record.
Upon reviewing your notes, now, Mr. Lilly, can you tell us — do you
recall what transpired with the moneys that Justice apparently col-
lected from Mr. Carter ?
Mr. Lilly. I^t me read from my notes, dated May 15, 1970, and
they state, "Cliff Carter told me he gave Bob Justice $1,500 in D.C."—
in parentheses, I have "cash" — "Carter also stated Justice saw
Maguire" — meaning Dick Maguire — "to get $750, but Carter gave
$1,500."
I would assume from that he was trying to get $750 from each of
them. And this is all of the notes that I have regarding that
transaction.
Mr. Weitz. So, at this point, you cannot identify what, in fact, did
happen to that $1,500?
Mr. Lilly. No, I cannot.
Mr. Weitz. And it was not given to you, to the best of your
recollection ?
Mr. Lilly. To the best of my recollection. I have no note of it.
Mr. Nicholas. But in the event we can locate — and when we go
through the other notes that we have — if we can locate this transaction,
we would like to have the right to send it to you and attach it to
the record.
Mr. Weitz. Of course.
Now, with regard to DeVier Pierson, he is identified by you as
apparently having assisted in the determination of who would be con-
tacted to repay the loan to you.
Did you have any direct contact with him, either with regard to
the setting up of the program or receiving funds from him ?
Mr. Lilly. Not in setting up a program ; no. I do not recall talking
with DeVier Pierson, even though it was not uncommon for me to
5972
visit with DeVier quite often, over the phone or in person. But in
this particular instance. I had not}iin<i' to do. that I can recall.
But DeVier Pierson did fund some — my records indicate that I have
a $5,000— on February 2, 1970, I have $5,000 from DeVier Pierson,
and I also have on exhibit 6 unidentified payments on February 2,
1970, imder "note transactions," of that particular numbered instru-
ment. This possibly could be money that could have come from
Ma^uire — I mean, DeVier Piei-son.
Mr. Weitz. Let me ask you this.
Would this February 2, 1970, payment from Pierson be part of the
$15,000 which is indicated as a curtailment of the note, the $100,000
note, on that date?
Mr. Nicholas. Ask that question again, Alan.
Mr. Weitz. Is the $5,000 cash payment from DeVier Pierson on
February 2, 1970 — did that go toward the $15,000 curtailment which
is indicated on the $100,000 note, a copy of which we have as exhibit 3 ?
Mr. Lilly. It is quite possible. I notice I do have a notation on the
third page of that under deposits where cash payments were made
on the note. I have $5,000 being paid on February 2, 1970, reflecting
it came f I'om DeVier Pierson.
Mr. Weitz. Let me ask you this. The records I looked at, such as
the note or your deposit slips, do not indicate DeVier Pierson's name.
Can you tell me how either you or accountants have determined
that, in fact, $5,000 was paid from DeVier Pierson for curtailment of
the note on that date ?
Mr. Lilly. On my itinerary, on January 27, 1970, the first page,
down about midway, "$5,000 cash, DeVier Pierson paid note 11169
CNB, 2-2-70."
Mr. Weitz. Are those from your notes ?
Mr. Lilly. These are from my original notes, yes.
Mr. Weitz. I see.
Mr. Lilly. There is still another possibility. In these payments., I
have $5,000 unidentified. I do not know what the source is. You find
$5,000 unidentified, and I do not know the source of that.
Mr. Weitz. There is another $5,000, for example, in your summary,
which I suppose at this point we ought to enter as exhibit 26, which is
indicated on January 30, 1970, as an unidentified source.
[WTiereupon, the document referred to was marked Lilly exhibit
No. 26, for identification.*]
Mr. Weitz. But that would be just 3 days after the earlier payment
from DeVier Pierson. Is it likely that he would have made two con-
secutive payments of that nature to you, or do you remember two con-
secutive payments from him ?
Mr. Lilly. No, I do not. I just have that as the unidentified source.
Mr. Weitz. Is that the only other imidentified $5,000 payment?
Mr. Lilly. No. If you will look on "Note transactions, unidentified,"
you will see $5,000 up near the top. I do not know what number exhibit
we are looking at, but
Mr. Weitz. Exhibit 6, page 2.
Mr. Lilly. Then you will see $4,264,460. Look on the first page of
that ; look way over to the righthand side.
♦See p. fi045.
5973
Mr. Weitz. Yes.
Mr. Lilly. Those payments are all $9,425. I cannot identify the
source.
Mr. Weitz. But the $5,000 is the other $5,000 that was used for
the February 2, 1970, curtailment ?
Mr. Lilly. Yes ; that is true,
Mr. Weitz. Do you remember at any time talking to Pierson about
these transactions and the purposes for which the money went?
Mr. Lilly. I cannot recall having talked with him.
Mr. Sanders. Off the record for just a minute.
[Discussion off the record.]
Mr. Weitz. Back on the record.
Mr. Lilly, did you attend any board of directors' meetings of AMPI ?
Mr. Lilly. Yes ; I attended most of the board meetings.
Mr. Weitz. Do you remember any board meetings at which the
question of high attorney fees was raised and discussed ?
Mr. Lilly. Yes ; I remember, as a matter of fact, two board meet-
inofs. I can give vou the town, but I cannot give you the year.
Mr. Weitz. Where were they held?
Mr. Lilly. One of them was in Madison, Wis. We do not meet
there often ; normally it is in October, because they have their World
Area Expo, so I would assume that it would be in October of a
year.
And the other one was in Las Vegas, Nev., and that would be in
conjunction with the National Milk Producers Federation's annual
meeting?.
Mr. Weitz. These were two particular meetings where you remember
the matters being discussed?
Mr. Lilly. That is true. And the matters were discussed off the
record. They were what the AMPI board refers to as executive session,
which means that there are no minutes kept. If there are any actions
that have to be taken, it is taken after thev come out of their executive
session.
It was Mr. Nelson, Mr. Parr, and myself and the AMPI board,
and thev were questioning high attorney fees, why and what they
were beinar used for. Mr. Parr and Mr. Nelson, for the most part_,
attempted to satisfy nnd pacify t^^^ board of directors that this was
a normal, routine business operation, and if we expected to get things
done, we were goinsr to have high attomev fees.
And the board asked how much of these fees might be going into
political funds, so there was an admission that some of the fees were
going into political funds to the board members.
Mr. Weitz. Who asked whether some of the fees might have been
goin.^ into the nolitical funds?
Mr. Ltt,ly. [Nods in the neo-ative.l
Mr. Weitz. One of the board members ?
Mr. Lilly. Oh, yes. There were a number of board members in-
volved, and I do not believe I could recall the individual who asked it.
Mr. Wettz. Who were the ones that were active on this type of
question who would have participated ?
Mr. Lilly. Frank White would have been one of the board members;
he is still nn the AMPI board. Norman Barker would be another one
from the State of Kansas, still on the AMPI board.
5974
Mr. Wp:itz. Would Zimmernian have been active in it ?
Mr. Lilly. Zimmerman was on the board at the time; he is no
lono'er on t}>e board. Zimmerman would not have been one to have
pursued the (<"(stion.
flack HesLier, H-e-s-s-e-r, from Oklahoma, no longer on the board,
but on the board at that time, could well have been one of them.
Mr. Weitz, What was Mr. Nelson's response ?
Mr. Lilly. Well, Mr. Nelson's response — I will sum it up. In effect,
it was, "Certainly, we have high attorney fees, and this is the way that
we are going to accomplish things. And I don't think the board really
wants to delve into these this far, and the cost of doing business" — I
don't know if I'm doing a fair job of summing up Mr. Nelson's — but
while there was no open admission as to what was actually happening,
I do not think there was any doubt in the board members' mind as to
what was transpiring.
Mr. Weitz. IVhen someone said, "Are some of these fees going to
political funds,'" did Mr. Nelson say, "Absolutely not," or "You are
wrong," or did he more or less rationalize it away ?
Mr. Lilly. That is true. He rationalized. I think all of them were
left with the impression that some of the fees were going to political
activities. In fact, that is why I was in the executive session itself, be-
cause I was asked myself if they were.
Mr. Weitz. What did you say ?
Mr. Lilly. Well, Mr. Nelson — I said that he is an employee, and I
am the general manager, so you can ask me the questions and T will
answer the questions. And that is where he rationalized it.
Mr. Weitz. At either of those board meetings or any others that you
recall, did he actually use the word "conduit" ?
Mr. IjTlly. That is quite possible. I could not say.
Mr. Weitz. Had he used the term, do you think you would have been
sufficiently surprised to have remembered it?
Mr. Lilly. No; not me as such: I would not have been, because the
term — T understood the term, and I would not have been. And he could
well have used it. and it would not have impressed me.
Mr. Weitz. Who, if any, of tliese — I think you mentioned Mr.
Masters attended a good many of these.
Did he attend the two in Las Vegas and Madison ?
Mr. Lilly. I think so, but I am not sure that he was present, because
at the executive session, they move those out except the employees they
want to talk with, and they would have looked upon Mr. Masters as an
employee in this instance, because he helped keep the minutes of the
AMPI board meeting.
Mr. Weitz. Any of the other attorneys that we talked about — were
anv of them present at these meetings or similar meetings ?
Mr. Lilly No : not that T remember.
IVFr. Wr.\r'A. Did Stu Kussoll attoTid !inv l>oard meetings?
Mr. Lilly. On a rare occasion he might if he happened to bo in a city
where a Federal order hearing was being held, and it was open that
ni.<Tht, he might drop by the board meeting.
Mr. Weitz. But you do not recall him being at eitlier of those ?
Mr. Lilly. No ; not at either one of these.
Mr. Weitz. I would like to ask you soroe questions now about the
milk ])rico-support decision in March of 1971.
5975
Could you tell us what contacts, general contacts, were being made
by employees and other representatives of AMPI during March of
1971 with members of the administration and other political officials?
Mr. Lilly. Well, of course, my contacts were being made with Con-
gressmen. I did contact Senators during that time, a number of them,
to work with some of our members, board members, and the dairy
farmers who were not on the boards that were here and had been
directing them to contact their own Congressmen. And most of our
efforts were directed toward Congressmen.
At the same time, there was considerable effort, with the help of
Mr. Marion Harrison, an attorney here in Washington, who was more
or less guiding Mr. Nelson and Mr. Parr to the various officials within
the Department of Agriculture. Certainly, the Secretary was contacted,
Mr. Phil Campbell was contacted. Those two I know. I am sure others
in the Department of Agriculture were contacted.
Dr. George Mehren is an economist by profession. He has his doc-
torate in agricultural economics. And having been a former Under
Secretary or Assistant Secretary of Agriculture, he was certainly in-
volved in this particular phase of it, in contacting that end.
At the same time, people in the White House — for the most part,
Mr. Harrison was meeting them. I heard the name of Chotiner ; I heard
the name of Colson ; and various dates were being set up by Mr. Harri-
son for Mr. Nelson and Mr. Parr and Dr. Mehren to contact, possibly,
some of the general managers or the leadership from some of the co-
operatives that could have been here during these meetings. But I am
only talking about AMPI people.
And, at the time, we were — daily, we would meet several times a day
to be aware of who had contacted who and where we might be in this.
There did come a time in March of 1971
Mr. Weitz. Off the record.
[Discussion off the record.]
Sir. Weitz. On the record.
Mr. Lilly. During the — a concerted effort was being made to influ-
ence legislators, administrative officials. Sometime during the week of
the 15th of March it looked as if, from the administrative side of it, it
was rather hopeless. Mr. Jacobsen had been in Washington quite fre-
quently, most of the time with us, even though he was not the lead in-
dividual in making the contacts. But he did set up an appointment with
John Connally, who was then Secretary of the Treasury, to talk with
him about what assistance he might be able to lend to us in influencing
the administration to make an administrative decision to increase the
price support.
Mr. Nelson. Dr. Mehren, M-e-h-r-e-n, Jake Jacobsen met with the
Secretary, and did discuss the need for a price support, the justification,
as far as the economics of it were concerned, projected it into the future,
and why we would have to have an increased price support.. And the
Secretary indicated to them shortly thereafter — an hour, an hour and
a half. 2 hours after their meeting, I met with Mr. Nelson, and with
Dave Parr, and with Jake Jacobsen, and with Marion Harrison.
Mr. Weitz. But not with Dr. Mehren ?
Mr. Lilly. Not with Dr. Mehren — in the Madison Hotel, where we
were staying at the time, and he indicated that Mr. Connally was go-
ing to do what he could in the way o P trying to convince the administra-
I
5976
tion that we. lind a problem, and it would certainly be justified to jrrant
an increase in price supports.
Mr. Weitz. Now, w^hat — can you pinpoint what day, for example, the
meetinfj with Connally would have taken place ?
Mr. Lilly. No. It was the week — I am lookin<r at the 1971 calendar,
and it would be the week of the 15th of Alarch. That is as near as I can
pinpoint it. I would say it would be possibly the 17th or 18th of March.
Mr. AVeitz. vVnd you say that you met with Nelson, Jacobsen, Parr,
and Harrison on the same day, shortly after the meeting with Con-
nally?
Mr. Lilly. That is true. One or two other people may have been
present, but I can remember those people being present.
Mr. Weitz. At that meeting with you, did they discuss at the same
time, or — did they discuss political contributions in the context of the
milk price support ?
Mr. Lilly. Yes, they were talking about the reaction of Mr. Connally
as to what he might do, and how many people we had had cosign the
bill and introduce it from the Hill, as far as legislators were con-
cerned. And then the conversation drifted into the amount of money
that was committed for getting an increased price support. Mr. Parr
was committed for $1 million to get an increased price support. Mr.
Nelson was of the opinion that it was in the neighborhood of $.">00,000.
IMr. Harrison entered into this conversation; I do not remember what
figure he might have had in mind.
So, the figure of commitment — we had a commitment, apparently,
according to the discussion, somewhere between $i/^ million and $1
million.
Mr. Weitz. This is a commitment that already existed at this time,
as vou understood it ?
Mr. Lilly. As T understood it.
Mr. Weitz. Do you understand who had made the commitment, or to
whom it had been made ?
Mr. Lilly. I assumed that Mr. Nelson. Mr. Parr, and Mr. Plarrison
had made the commitment. They were aware of it, and certainly, all
indications were that Mr. Jacobsen was aware that they had made a
commitment; but Mr. Jacobsen entered into the conversation at that
time, and said if Mr. Connally was going to be of any help, then cer-
tainly we were going to have to have some new money come in as a
commitment. And there was not too much argument against commit-
ting new monevs, there within that room, so a figure of — someone
asked how much would have to be committed, how much more, how
much additional moneys over and above somewhere between ^^nOO.OOO
and $1 million, the difference of opinion, and the figure of $250,000
wa'^. iniected into it at that point.
And Mr. Jacobsen airreed that that would be a reasonable amount.
I mean new money, monev that had not been indicated before.
Mr. Weitz. Have you learned whether, in fact. Nelson, Jacobsen,
and Mehren were together for the entire time with Connally, or
wliether, in fact, for a portion of that meeting or right after that
meetinp-, one of them met individually for a brief time with Connally?
Mr. LiLLv. Oniv this week. I was told by Dr. Mehren — I was in his
office, he ealled me into his office in San Antonio, and — I really do not
know what brought the discussion up, I was careful — but he brought
5977
up the meeting that they had had with Mr. Connally. I will digress
backwards for a moment, and say that he, Monday and Tuesday of
last week, had attended a meeting in St. Louis with the presidents of
food chains, and apparently, people in the food industry — I do not
know if it was an annual meeting, or what it was — but he had been
with these people, and they had heard some various rumors about
John Connally thrown about at this particular meeting, and asked him
if he knew them to be true, and he said he did not know anything to be
time.
And then be recalled when Harold Nelson and he and Jake Jacobsen
met with Connally, and truthfully, until that time, I really thought it
was Dave Parr and Harold Nelson who had met with John Connally,
along with Jake Jacobsen. But he gave him the information from an
economic standpoint, Dr. Mehren did. Mr. Nelson added to it. It was
this type of conversation ; a sincere, solid effort to justify.
How much time was spent, I do not know, but then they left, and
as they departed the office, Mr. Nelson and Dr. Mehren and Mr. Jacob-
sen, the Secretary called Jake back into the office and said "Let me
talk with you privately for a moment." And they had a conversation;
I do not know what it was related to. Dr. Mehren told me that this
week, or last week, I am sorry, that this actually transpired,
Mr. Weitz. Did he tell you whether or not he asked, or found out,
:vhat the Secretary and Jacobsen discussed in that brief meeting?
Mr. Lilly. He did not. I did not ask him, and he did not tell me, and
I am sure that he does not know. I am sure that Mr. Jacobsen did not
tell him.
Mr. Weitz. How long was that brief meeting or conversation?
Mr. Lilly. He indicated just a short time.
Mr. Weitz. A few minutes ?
Mr. Lilly. Just a few minutes.
Mr. Weitz. And at the subsequent meeting with you, several hours
later, it was — the topic was raised that in order to get Connally to
intercede, a commitment of new money should be made?
Mr. Lilly. That is right.
Mr. Weitz. Do you remember who made that suggestion ?
Mr. Lilly. I know that Jake Jacobsen strongly indicated it. In fact,
he said, this has to be done.
Mr. Weitz. Did he initiate this, to the best of your recollection ?
Mr. Lilly. I really cannot say if he did or not. I know he was very
strong in his statement that it had to be new money, other than what
had been committed, and there was really no argument with this among
Mr. Nelson and Mr. Parr. I do not know, though, if he initiated it or
not, but it is quite possible that he did.
Mr. Weffz. Now, after this meeting between you, Nelson, Jacobsen,
Parr, and Harrison, was there a subsequent meeting, to your knowl-
edge, with some representatives of AMPI and the Secretary before the
new price support decision ?
Mr. Lilly. Yes. As a matter of fact, according to my diary, and ac-
cording to the day I left Washington, D.C., on that weekend of
March 19, we were in the company jet. private plane, here at Page
Airways at National Airport. I know that Mr. Nelson and Mr. Parr,
Mr. Keiffer Howard, Mr, Tom_ Townsend, all employees of AMPI, and
possibly others, those are the ones that I can recall were present.
5978
We were waiting for the plane to be brought around, so that we
could — this was after dark, and the Secretary walked into Page Air-
ways, Secretary Connally, and he acknowledged our presence by
waving his hand. And then he called me aside and talked with me for
just a short time, and told me that he had made contact on our problem,
and that it looked good. He thought it was going to be all right, or he
said something to the effect, as I remember it, that "It is in the bag"
for us.
Mr. Weitz. Did he indicate who he had made contact with?
Mr. Lilly, No. I certainly would just have to assume, what he said
and the way he said it, that he had personally talked with the
President.
Mr. Weitz. He did not say so explicitly, though ?
Mr, Lilly. No, he did not sa}^ that, but certainly, he did not indicate
that it would have been the Secretary of Agriculture that he had talked
with, and T would not think that he would.
Mr. Weitz. Between the meeting you had with Nelson and the others
after the first Connally meeting and the time that you saw the Secre-
tary in the airport, were you aware whether any of them had recon-
tacted the Secretary, or had met with him ?
Mr. Lilly. No, I am not aware of any further meeting or contact
with him.
Mr. Weitz. Did he tell you to tell the others at that time?
Mr. Lilly. Yes, he did. Ho said. "You can pass the word along to
your other coworkei'S, or the other people with you," or whatever he
might have said. And when we were aboard the plane, and headed
back, T did tell them, and they Avere quite elated about the situation,
being Friday. The first part of the week we had felt rather downcast
and defeated on this thing, and tlien, it looked like we were going to be
successful in what we were trying to do.
Mr. Weitz. Who was on the flight back with you ? Do you recall ?
Mr. Lilly. Well, T named Harold Nelsori, Dave Parr, Tom Town-
send, Keiffer Howard, It seems the plane holds 10 or 12 people, and it
was near full, but this is all I can recall at the time.
Mr. Weitz. Why did he pull you over? He had met that week with
at least Nelson of this group.
Plow long have you known the Secretary ?
Mr. Lilly. Well, of course, I had known Connally prior to the time
that he was Governor of Texas. He was G'overnor for fi years, and he
has had what,'4 years since that time, and the present Governor that we
liave now. I have, known him prior to that. So I ha^-e known him prob-
ably 12 or 1.5 years. I knew him much closer than any of the other
people, Tom Townsend was originally from Kansas, Dave Parr from
Arkansas, Harold Nelson from Texas, but he did not work in State
politics like I did. Rut I lived in Austin. I knew Connally from a
number of years back, so I think it would be logical tliat he would talk
to mo, because I know him better than anyone present.
Mr. Weitz. Had vou ever worked on a campaign of his. or any-
thing?
Mr. Lilly. No; I had never worked on a campaign of his. I had
lobbied for the Texas Farm Rureau for a luunber of veai-s while Mr.
Connally was. Governor. He vetoed a number of bills. T was not
successful in overriding any. We did ])ass some, after he vetoed them.
5979
the next year. It was strictly an above-board type thing. He was a
hard scrapper, but it was a working relationship.
Mr. Weitz. How often do you think you had contact with him, for
example, during his years as Governor ?
Mr. Lilly. Oh, during his years as Governor, during the legislative
session, three or four times a week.
Mr. Weitz. Personally, you personally met with him ?
Mr. Lilly. Yes ; I personally
Mr. Weitz. How long were these ?
Mr. Lilly. This may be a 3-minute visit, a 5-minute visit.
Mr. Weitz. Were you alone, usually, at most of these meetings ?
Mr. Lilly. At some times, I would be alone, at other times I would
be with a legislator, a senator, a speaker of the house.
Mr. Weitz. But there would not be a large group of people ?
Mr. Lilly. Oh, no.
Mr. Weitz. Did he know you by first name ?
Mr. Lilly. Yes.
Mr. Weitz. Did you call him by his first name ?
Mr. Lilly. No.
Mr. Weitz. How did you address him ?
Mr. Lilly. I addressed him as Governor at that time ?
Mr. Weitz. And how did he address you ?
Mr. Lilly. He addressed me as Bob, and quite often as Mr, Lilly.
Mr. Weitz. When he left the governorship, when was that?
Mr. Lilly. About 6 or 6 years ago.
Mr. Nicholas. He left in 1968. In 1968 he appointed Roy Secretary
of State, so in 1969 was the last year.
Mr. Weitz. 1969 ?
Mr. Nicholas. Yes.
Mr. Weitz. So during the period until 1969, you had very frequent
contact with him ?
Mr. Lilly. Yes.
Mr. Weitz. Since 1969, have you had much contact with him ?
Mr. Lilly. Infrequent. I have run into him at an airport, maybe
at a political fundraising party or something to that effect, but
no close contact with him.
Mr. Sanders. Was Jacobsen in this group flying back ?
Mr. Lilly. No ; he was not.
Mr. Nicholas. I was going to ask him a question on that point.
What was the physical position of the parties that were boarding the
AMPI private jet at the time Connally saw you and you saw him?
In other words, was he passing one way, and you passing another,
that would have called you to his attention ?
Mr. Lilly. Well, as we were going to the airport, we were possibly
in two taxis if there were that many of us, and on the way to the air-
port, the Secretary — we passed him, and he passed us in the traffic. It
was near dark, I mean, in fact, we saw him on the way to the airport
to National Airport, and someone, I think it was Dave Parr, men-
tioned that there is the Secretary. And, as a matter of fact, I believe
he waved to him on the way to the airport, and I lam not sure if Sec-
retary Connally waved back or not. And then, of course, Page Air-
ways, if you are familiar with the National Airport, it is separated
somewhat from the commercial hangar, and has its own lobby. And it
5980
is not a large lobby, and it is not — here we were, a group, it would be
quite easy. It was not crowded like in the commercial airports, so it
would be pretty hard to walk into the Page Airways terminal and
not see us. I mean into their lobby
Mr. Nicholas. Who was Connally with, do you know ?
Mr. Lilly. He was alone.
Mr. Nicholas, He was alone ?
Mv. Lilly. He was alone.
Mr. NiCFiOLAS. Of the group that went with you, would you say
you knew him the best ?
Mr. Lilly. I certainly knew him the best: probably the only one
that knew him, had really worked with him in the past.
Mr. Nicholas. Because Jake was not there ?
Mr. Lilly. Jake was not there. That is right.
Mr. Nicholas. And Joe Long was not there ?
Mr. Lilly. No ; Joe Long was not there.
Mr. Nicholas. And how about Harold Nelson ?
Mr. Lilly. Harold Nelson was there, but Harold Nelson had never
really moved in this particular area, in working or legislation on a
State level. He had not been too active politically on State politics,
and just outside of knowing him and recognizing him, he really did
not know him.
Mr. Nicholas. Were you at all surprised that he singled you out?
Mr. Lilly. No; not particularly, because while he was Governor,
we have had many fights and many blowups, and I have raised the
devil with him because he would not take certain action and sign a
bill or veto it, and consequently he would do the same to me, and it
was strictly on a professional -type basis, nothing personal in it. So
this goes back to a long standing on that, so I think he would have
known me and talked to me. where he would not have talked to them
on a chance meeting like we did have.
Mv. Nicholas. Well, what he told you — you know, what he told you
at the time
l\fr. Lilly. Yes.
Mr. NiCH0i>AS. In your opinion, would he be more likely to tell
you something like that than he would anybody else ?
Mr. Ln.LY. I think so.
Mr. Nicholas. Except for Jake or Joe Long,
Mr. Tjlly. Well. I think he would have told Jake, but T doubt if
he would have told Joe Long, But T think he would have told Jake,
and if the three would have been there. I think lie would have told
the second, because Joe Long is not that close to him.
Mr. Nicholas. For instance, when you knew — you were the close
fi'iend of Price Daniel when he was Governor?
Mr. Lilly. Very close.
Mr. Nicholas. Did you know Connallv then?
Mr. Lilly. Yes; I knew Connally at that time.
Mr. Sanders. Just one question. Did you make any notes after your
conversation with Connally? Did you make any notes of what he said?
Mr. Lilly. No; T did not make any notes, because sliortly thereafter,
we were on the plane, and T told the other people, in essence, what I
hope that I have related here. And T told them, and we were quite
jubilant on our way back. T did not make any notes of it; the only —
5981
because we had been at this thing for several weeks, contacting legis-
lators, getting people to sign or cosign bills, introduce bills, and then,
the next week, we still had not gained anything. April 1 was just
around the corner. It looked like we had to go the legislative route
to get acconiplislied what we wanted to accomplish, and suddenly we
did not have to. In i'act, I was not in Washington, D.C, the next
week. We quit; I did not even go back and start working the Hill
anymore.
Mr. Weitz. At his instruction, or at a mutual understanding?
Mr. Lilly. Well, we were convinced tliat we did not have to go
back.
Mr. Weitz. I^et me ask you something. What was the jetliner ? Was
it the Saberliner?
Mr. Lilly. Saberliner.
Mr. Weitz. I have a jet log here for the month of March 197L
And can you tell me^ — you say you think it was the 19th, which is what
day of the week ?
Mr. Lilly. That is on Friday.
Mr. Weitz. To the best of your recollection, would it have been
Friday or Saturday that you flew back?
Mr. Lilly. Well, according to — it would have been Friday. It might
have been Saturday when we arrived at San Antonio, because we
left — I know it was dark here. Of coui-se, that time of year, the days
are shorter, but on Saturday, I show myself going back to San
Antonio, and being in San Antonio.
Mr. Weitz. From where ?
Mr. Lilly. From Washington, D.C.
Mr. Weitz. On Saturday?
Mr. Lilly. No ; on Friday, because Saturday I was in San Antonio.
In my calendar that I have made available to you, in my daily diary,
where I keep tab
Mr. Weitz. Have you ever looked at a jet log report — flight report?
Mr. Lilly. No.
Mr. Weitz. Off the record.
[Discussion off the record.]
Mr. Weitz. On the record.
I have the flight report for what I believe to be March 19 and
March 20 of 1971. March 19 shows the Saberliner going from San
Antonio to Dallas, Dallas to San Antonio, San Antonio to Washing-
ton. And on the 20th. it shows Washington to OTG; I think that is in
Minnesota somewhere. OTG to Austin, Aiistin to San Antonio, which
would have been Saturday. I am not sure 1 am reading this correctly.
Mr. Lilly. It does not show passengers ?
Mr. Weitz. No; unfortunately the list does not show passengers.
Mr. Lilly. Does it show the pilots ?
Mr. Weitz. Yes.
Mr. Lilly. Well, on the 19th, was Joe Bell one of the pilots ?
Mr, Weitz. No.
Mr. Lilly. It shows first pilot Blanten and second pilot Goggans,
or Goggans, G-o-g-g-a-n-s.
Well, on mj'^ calendar of 1971
Mr. Weitz. Off the record.
[Discussion off the record.]
30-337 O - 74 - 9
5982
Mr. Weitz. Where did the flight go from Washington ?
Mr. Lilly. It originated at Page Airways at NationB.1 Airport, and
the first stop was in Little Rock, Ark., to let Mr. Parr and some of
the other passengers off. Tom Townsend and Keiffer Howard, they
both lived in Little Rock, Ark., to let them both off. And the remainder
of us continued on to San Antonio.
Mr. Weitz. Did you stop in Austin ?
Mr. Lilly. No, we did not stop in Austin, We had gone from Little
Rock to San Antonio.
Mr. Weitz. When did you first learn of the actual — ^the second price-
support decision ?
Mr. Lilly. Officially, as far as I was concerned, I learned of it the
date that it was announced. The Secretary of Agriculture announced
it March the
Mr. Weitz. 25th?
Mr. Lilly. 25th.
Mr. Weitz. Between the time of your chance meeting with the
Secretary in the airport and the time when you learned of the public
decision, second decision by the Secretary of Agriculture, do you know
of any further contacts between representatives of AMPI and
Connally ?
Mr. Lilly, Possibly, there could have been. But I was not told of
any, and I am not aware of any.
Mr. Weitz. You were not told ?
Mr. Lilly. [Nods in the negative.]
Mr. Weitz. Do you know how and when the decision was made to go
ahead and actually make these contributions of the new money of one-
quarter of a million dollars that was discussed at that meeting plus the
prior commitment ?
Mr. Lilly. Would you restate that ?
Mr. Weitz. After the milk — well, during the following week, the
week of March 21 or 22, were you aware of any discussions which
related to the ways in which contributions would in fact be made?
Mr. Lilly. No. The next week, though, contributions were made by
TAPE— $10,000. The week of March 21 or 22, the Republicans had at
that particular week the Senate and House fundraising affair, which
is annually, and we normally contribute to the Republicans and to the
Democrats. The only difference in 1971 and other years, normally that
check is made out for $10,000, contributed to the amount of $10,000,
which usually buys a table for 10, or whatever it might be. But in this
particular year of 1971, a decision — I might say this, the decision to
contribute had already been made. We were going to contribute
$10,000. This had no bearing on it one way or the other.
But Marion Harrison instructed me, and I do not have the names of,
but he instructed me to make out four TAPE checks to four different
committees totalling $10,000. Two of them were for $3,000, and two of
them were for $2,000 each, making a total of $10,000. And this was a
little unusual and different, but Mr. Nelson said it was all right to do
this. So it made no difference to me. It was for the same purpose. We
did have people in attendance at the meeting which was held that
particular week that the price-support announcement was made, and
I am not sure of the date. And if I attended, I do not remember, but I
5983
possibly could have been one of the attendees of the Eepublican fund-
raising affair.
Mr; Weitz. But neither Mr. Nelson nor Mr. Harrison indicated why
the contribution should be made in that way ?
Mr. Lilly. No. And of course, following later there were other con-
tributions at other times in the year.
MrJVEiTZ. Were you privy, for example, to the discussions, any dis-
cussions, relating to contributions by the other two co-ops during this
period ?
Mr. Lilly. No.
Mr. Weitz. Were you aware, for example, of the $50,000 loan from
TAPE to ADEPT shortly after that week ?
Mr. Lilly. I was aware of that because shortly after — Mr. Isham
checked with an attorney and I cannot recall the attorney's name that
he might have checked with. It could well have been DeVier Pierson,
or it could have been Mr. Jacobsen, or it could have been both of them.
But he contacted them, if we could make a loan to ADEPT, which
was a newly organized political arm of Mid- America Dairymen. And
the decision was yes, we could. The loan was made.
Outside of Mr. Isham telling me that we were making a loan, I do
not know whether it carried any rate of interest or not, or whether
it was a noninterest loan.
It was later paid back. I do not know how much later, but other
than just in passing, Mr. Isham told me about it, and they were newly
organized, they had very little money to spend at that time. And this
is just my recollection, my understanding of it.
Mr. Weitz. I have here copies of check stubs of 12 checks, dat-ed
April 26, 1971, each in the amount of $2,500. The stubs indicate that
they are for, to various committees, in most cases, and "void" is writ-
ten across each stub. And these were provided to us from the TAPE
records by TAPE.
And I wonder if you would look at these and just tell me if you know
anything about those, the transactions or the intended transactions
indicated by those check stubs ?
Mr. Lilly. These particular stubs — I do not know how many we
have here. I have some correspondence, and I have copies of it, that
relate back. And there were several efforts on the part of Mr. Harri-
son. He supplied the names, or at least his signature was over the letter
where the names came in to TAPE. There is a series of names, letters,
those names canceled out, other names substituted for, and eventually
they came up with some names. And I think these were some of the
earlier names, and for some reason, and I am not aware — I am unin-
formed as to why they were voided and not issued at that time.
A series of checks were issued in June after this — I have fors:otten.
I know that they were $2,500 each, I did deliver the checks to Marion
Harrison's office, and did take the money that we got.
Mr. Weitz. Were both these intended contributions and the contribu-
tions that were in fact made that you delivered to Marion Harrison
later, do you know whether these were part of the commitment that was
discussed in March of 1971 ?
Mr. Lilly. Well, since there was a series of checks that came from —
that were contributed — I know it totalled $187,000 eventually.
[Discussion off the record.]
5984
Mr. Weitz. Back on the record.
I want to identify as exhibit No. 27 the check stubs that I have shown
to Mr. Lilly and which he has identified.
[Whereupon, the documents referred to were marked Lilly exhibit
No. 27 for identification.*]
Mr. Weitz. During the summer of 1971, other than the delivery of
some checks to Mr. Harrison, did you have contact with the process by
which contributions were made by TAPE to the committees estab-
lished by the predecessor of the Committee To Re-Elect the
President ?
Mr. Lilly. No ; I was kept aware of it by Mr. Isham.
In September of 1971, another series of checks were — I know the
first series of checks I did take to Mr. Harrison personally. The second
series, I do not know if I delivered or if they were mailed or if someone
else delivered them. But I think the total series of checks totalled 75,
covering the area that appeared in June. It appeared in September,
when the contributions were made, and they were all written at the
same time by names of the committees and addresses of people that
were supplied from Mr. Harrison's office.
And of course we had some problem from the fact that the com-
mittees that the checks were delivered to were fictitious addresses.
Some of the people happened to be Democrats, and they did contact,
and wrote to the Clerk of the House. We had a few problems along
that line, of which Mr. Isham made me aware. He was most unhappy
when he found that they could not give us good names and addresses.
He did get, and I probably had a conversation or two with Mr. Har-
rison about some statement, a signed statement that these funds that
were contributed would be used to help reelect the President. And we do
have in the TAPE files a statement to this effect, that they would be
used for this purpose.
Mr. Weitz. Was that not an opinion letter obtained at the insistence
of INIr. Isham in order to insure the legality of the contributions?
Mr. Lilly. That is possibly what it is, yes.
Mr. Weitz. I would like to move to 1972, to a series of meetings
Mr. Sanders. Are you finished with the price support?
Mr, Weitz. This ties it with it.
If you want to ask some questions
Off the record.
FDiscussion off the record.]
Mr. Sanders. Back on the record.
To your knowledge, were Connally and Mills close friends?
Mr. Lilly. I have no personal knowledge of that.
Mr. Sanders. What person in the House of Representatives did
AMPI consider to be the most significant individual to advance legis-
lation in its behalf ?
Mr. Lilly. Well, certainly the Ag Committee we could not ignore,
with Mr. Bob Poage being Chairman of the Ag Committee. And. of
rourse, Graham Purcell and Tom Folev. Ed Jones, some of the good
hardworking members that have been on the Ag Committee for some
time. Of course. Mr. Purcell is now ffone and no longer a member. But
pex)ple that — the entire Ag Committee, we worked with. That was our
first contact. We contacted the leadershin of the House as far as the
minoritv was concerned.
*See p. 6050.
5985
We talked with — I did not — ^but Mr. Ford was contacted, and we
did work with him in regard to this.
And I might say that we went about it in some organized manner,
taking the States in which we had members, the people, that those of
us that might be in contact, who could contact certain individuals and
be more effective with them. Louisiana we had — I remember Louisiana.
We, drawing the States of I^ouisiana and Texas, we had to call in
another cooperative from Louisiana, have them send some of their own
producers up here to contact people from Louisiana, because we did not
have the inroads to them that we did have Congressmen from Texas —
have the acquaintance with them, and know them as well as we do in
Oklahoma, Texas, Kansas, various other States.
And then we used other cooperatives across the country, on the West
Coast, from the East Coast to the southern area and mid-State area of
the United States. And they, too, would take their assignments, and we
made some efforts to coordinate this so that 10 people would not be
going to contact the same Congressman in an effort to develop this.
And I know you have asked me who was the most influential and
it
Mr. Sanders. Did you consider Wilbur Mills a significant person
to be persuaded ?
Mr. Lilly. Yes, very significant. Yes, very significant, very im-
portant.
Mr. Sanders. Why ?
Mr. LiixY. Possibly because of his long tenure of service. Probably
just as much so 'because of his chairmanship of the Ways and Means
Committee, which is rather important.
Mr. Sanders. Would that committee have been handling any legis-
lation that you were interested in ?
Mr. Lilly. No ; but Mr, Parr being from Arkansas and Mr. Mills
being from. Arkansas, they had a rather close working relationship.
Mr, Sanders. The legislation which you had desired would have
been processed by the Agriculture Committee, rather than the Ways
and Means ?
Mr. Lilly. That is right.
Mr. Sanders. Who in AMPI had overall responsibility for coor-
dinating the lobbying effort in the House ?
Mr. Lilly. Within AMPI 1 think ultimately it went to Mr. Nelson.
I had some input into it. Dave Parr had some input into it. Probably
the three of us. Other people certainly had some input. They had some
ideas and they were not — I can remember Joe Johnson, an employee
who worked for us at the time from Arkansas. Pie certainly had some
ideas. Tom. Townsend. who I have mentioned, originally from Kansas,
certainly had some input, into it because he too knew some people.
But as to who should contact who, probably I kept a closer record,
along with Lyn Stahlbaum, who was ari employee of ours then and
still is, and had been a past Congressman from the State of Wisconsin.
And he was very effective, very well known, very well respected on
the Hill, and is still in Washington working for us.
Mr. Sanders. In retrospect, does it appear to you that the lobby-
ing efforts which AMPI made with Members of Congress had some
impact on the ultimate decision to raise the price supports?
Mr. Lilly. This is an opinion of mine, I think
Mr, Sanders. If anybody is an expert on it, you are.
Mr. Lilly. I think it did have an impact. We had some 150 House
Members that had signed or cosigned a bill. Really, my projection
was — I have some figures somewhere, somewhere in the neighbor-
hood of 225 that we would have on the bill. We would have well over
one-half the Senate on the bilL And it is pretty hard, I mean this is
where we were headed.
And I might say, had I prevailed in my own argument we would
have gone the legislative route, because we had some very vicious
arguments over this particular issue.
Mr. Sanders. Had the House Agriculture Committee started hear-
ings on the bill ?
Mr. Lilly. Yes; they had started hearings on the bill, and it had
moved out rather rapidly.
Mr. Sanders. Was it reported out before the administration had
announced its decision ?
Mr. Lilly, I will say this. It was in a position to be moved out. I
do not know whether it moved out or not. I would have to go back
and check my notes. But I know that the subcommittee had, the dairy
subcommittee had met. I believe the dairy subcommittee had acted
favorably, and I believe it was pending a determination by us as to
when it should be moved out of committee.
So I am not sure
Mr. Sanders. Was the legislation still more favorable than the de-
cision that was made by the executive branch ?
Mr, Lilly. No ; there was no difference.
This is philosophizing, but to me we had committed in the neigh-
borhood of 150 legislators to put their name on the bill, and had com-
mitted themselves to go with us. I think we could have gotten more.
I felt sure, had the bill passed it would have been vetoed, I do not
think we had the votes to override it, I think if we came back the next
year, we could have passed almost anything we wanted to with the
legislators. I felt in leaving them and going the route we did, that
we had some of them that we had committed, and we ran off and left
them right in the middle of the stream,
Mr, Sanders, I am not familiar with the legislation.
Did it specify the extent of the support, or did it
Mr, Lilly, I believe most of the bills were 80 percent, if my memory
serves me right, 80 percent for 1 year. Some bills were introduced at 85
percent. Of course, it could have been between 75 and 90 percent,
according to existing law. And this would have set it at 1 year at 80
percent price support.
Mr, Sanders, At what level did the Secretary of Agriculture's
announcement fix it ?
Mr. Lilly. At about 80 percent.
Mr, Sanders, So the legislation and the Secretary's announcement
were
Mr, Lilly, Fairly close together.
Mr, Sanders, Comparable?
Mr, Lilly, I would have to review my notes to be sure on that, but I
feel sure — I mean that is close to correct.
Mr, Sanders. Did Chairman Poage take a public stand on your
Mr, Lilly, He introduced the bill,
Mr. Sanders. He introduced the bill ?
Mr. Lilly. He did.
5987
Mr. Sanders. Did Chairman Mills take a public stand ?
Mr. Lilly. He did not introduce the bill.
Mr. Sanders. Do you know if he declared his position on it ?
Mr. Lilly. He declared his position. And as a matter of fact he sug-
gested some of those we might talk with to endoi-se the bill.
Mr. Sanders. He was supportive of your legislation?
Mr. LiiJLY. He certainly w^1S.
Mr. Sanders. Do yoa know whether any commitments were made to
any Congressmen in connection with the AMPI desire to advance this
legislation?
Mr. Lilly. I am not aware of any. I made no commitments myself.
Mr. Sanders. No financial commitments?
Mr. Lilly. I made no financial commitments, and I am not aware of
any commitment being made.
Mr. Sanders. Do you know of any AMPI moneys going to any Con-
gressmen at any time in 1971 in relationship to the lobbying effort you
had made for this legislation ?
Mr. Lilly. I think that some honorariums were paid to some Con-
gressmen and to some Senators that attended our annual meeting. I
know that I introduced Senator Stevens at our annual meeting, and he
spoke to a number of dairymen. This was held in Chicago. This was
rather a large convention of some 40,000 dairy farmers. And we had a
great many, as a matter of fact, and I think we had the majority of the
House and Senate at this meeting. And most of those were given
honorariums, and these moneys, if my memory serves, I believe came
from AMPI for attending these meetings. And they did address our
people and
Mr. Sanders. What was the largest honorarium ?
Mr. Lilly. Oh, around $1,500 as I remember. Most of the hon-
orariums— I have seen some letters, thank you letters on them — in
that neighborhood. So to this extent, I mean there would have been
AMPI moneys. But here we had people to attend the meeting, and
they had to get out there and they had to get back. They took their
time. And it is not an unusual custom to do this.
Mr. Sanders. Do you know of any TAPE payments to Congressmen
in connection — resulting from your lobbying effort on the legislation?
Mr. Lilly. Well, not in my mind. We contributed, and I am certain
that we contributed to a great many of the people who did introduce
our legislation. I think our past track record would have indicated
that we would have contributed to the same people had they not have
introduced legislation. They were people that we can work with in
agricultural States, had built up some working relationship with,
and in the instance of some that may have supported us, there is quite
a possibility — and I have not checked this out — that we contributed
to his opponent to help get him defeated for other reasons, even
though he might have introduced legislation for us.
So it really had no bearing in the consideration of who we con-
tributed to with TAPE money knowingly. I am sure there had to be
some influence, but not knowingly, nor w^as it discussed.
Mr. Sanders. To your knowledge, would there be — ^to your recol-
lection, were there any documents which would have been filed by
AMPI, TAPE indicating TAPE payments or commitments to Con-
gressmen in connection with the lobbying efforts?
5988
Mr. LnxY. Well, we filed the TAPE reports, and at that time we
filed them with the Clerk of the House only.
Mr. Sanders. That would just show the amounts paid.
Mr. Lilly. It would show the amounts. But normally Mr. Isham
was filing those reports, and as a normal thing he would attach a sheet
on there as to who we had contributed to at that particular time. He
would just list everyone, both State as well as Federal candidates or
incumbents, as the case might be.
Mr. Sanders. What I am inquiring about is whether there would
be any file, memos, or correspondence that would be more elaborative
of the— —
Mr. Lilly. No. I believe in the TAPE files in some instances — I do
not know if it is in 1971 or 1970 or — ^but when contributions were made,
and I might have written a letter of transmittal transmitting the
check to, say the House Democratic Committee or the House Repub-
lican Committee, some of the moneys might be earmarked x dollars.
And I do know that I have earmarked x dollars for this Congressman,
and that Congressman, or this Senator and that Senatx)r. And they
are a matter of record. I mean, in my files. They are not a matter of
record here, but they are in the TAPE files where I would transmit
them.
Mr. Sanders. In your lobbying eflFort with the Members of Congress,
were you in addition to encouraging them to advance legislation, were
you also trying to induce them to encourage the administration ?
Mr. Lilly. Yes.
Mr. Sanders. To tuke administrative action ?
Mr. Lilly. Yes. As a matter of fact, we got a number of them to
write to the administration, to call the administration, and to be on
record, to put notices in the Congressional Record. I do not think a
day passed that we did not have a number of people get up and speak
to that particular subject.
Mr. Sa nders. Would you be able to provide me anything from your
files which would document this?
Mr. Lilly. Well
Mr. Sanders. That narrow, specific thing I have just mentioned.
Mr. Lilly. Well, I had it. It is all in mv files. Part of my files, I
know that I have not looked at^ — I mean, they were old files, 1971 is
what it would be in. And I know that there is some other litigation
that we were involved in. I mean, these files are tied up and I have
not been permitted to look at them even though they are old files. And
I think it would be in this particular thing.
If I could get free from that, I think I could produce some informa-
tion. I think I could probably reproduce it in another way, and that
is through Mr. Stahlbaum, because he is a fairly good recordkeeper,
and he too kept track ?
Mr. Sanders. Who has custody of the files that you have that you
say are not now available?
Mr. Lilly. I do not know if it is Uie Justice Department or the FBI,
to tell you the truth.
Mr. Sanders Here in Washington?
Mr. Lilly. No, in San Antonio.
Mr. Sanders. Would you ask Mr. Stahlbaum
"^ir. Lilly. Stahlbaum.
Sanders. Stahlbaum.
5989
Mr. Lilly. Lyn Stahlbaum.
Mr. Sanders, To search for material in this respect ?
Mr. Lilly. I c-ertainly will.
Mr. Sanders. And would yoii see if you can provide it for me?
Mr. Lilly. As a matter of fact, I will call him tx>night.
Mr. Nicholas, Wiio is he ?
Mr. Lilly. He works for CACF, Central American Club Federa-
tion. This is Mid-Am DI and AMPI. And he works — ^his office is down-
town, right across the street from where we are staying at the hotel.
Mr. Nicholas. Would the attorneys representing the antitrust suit
be the ones that would have the files that you are talking about ?
Mr. Lilly. Yes. They have them now. I do not think they have those
particular files. They might have.
But what I think my files, that I was referring to, are some of those
they found recently. They were old files that I just have not been
privy to look at yet, and 1 think that is where they are.
But I will check with Mr. Stahlbaum for what you are after.
Mr, Sandehs. Just a couple more.
Do you have knowledge) — do you know of any circumstances indi-
cating that Jacobsen may have subsequently related to anyone the
details of the conversation he had with Connally on March 15?
Mr. Lilly, I do not know that he would have related to anyone —
of course, two other people were involved, one of them being Harold
Kelson, and the other one being Dr. George Mehren.
Mr. Sanders, I am thinking of the conversation that followed the
group conversation.
Mr, Nicholas. He is talking about the conversation when Mr. Con-
nally called Mr. Jacobsen back and talked to him privately in his
office, is that right ?
Mr. Sanders. [Nods in the affirmative.]
Mr. Lilly. Mr. Jacobsen. Mr. Nelson, and Dr. Mehren were the only
people to my knowledge that were, there. Neither Mr. Nelson nor Dr.
Mehren have told me that Mr. Jocobsen told them what they discussed,
Mr. Jacobsen has ne>ver said anything to me, and in fact I was not
aware of it until last week that this had actually happened.
Mr. Sanders. You learned this from Mehren ?
Mr. Nicholas. The only likely party that he would have talked to
would have been Harold Nelson.
Mr. Ln.LY. Likely, if he had talked to anyone.
Mr. Nicholas. If he had talked to anybody.
Mr. Sanders, Now, during the week of March 22, some TAPE.
checks were issued for some dinners ?
Mr. Lilly, Conerresg-ional fundraising dinners,
Mr. Sanders. Would this have been Democrat and Republican?
Mr. Lilly. No, this was only Republican. The Democrats had one
that year, but I believe theirs was a;t a later time. And I believe you
will find the records show that wo contributed $10jOOO to theirs, too.
Mr. Sanders. Later in 1971 ?
Mr. Lilly. Yes, I believe it wafe later in 1971.
Mr, Sanders. Off the re<'.ord,
fDiscussion off the record,]
Mr, Wettz. 1 think at this point we will recess until Friday morn-
ing at 9:30.
[Whereupon, at 7:50 p.m., the hearing in the above-entitled matter
recessed.]
5990
I) i: If I r
Lilly Exhibit No. 1
Austin, Texas,
8- .1-09
We are charging your account as per items below
For Receipt of $100, OOP. pp_ gash ar.krinu/lpHgpH
*fe
IS 1st gay of Auqust7T969 per instructions
of Bob Isham.
y /■
By:/ •^•^"'^'<Z^
/ ^z.
PLEASE SEE THAT THE AMOUNT IS DEDUCTED 6H YOUR
BOOKS SO THAT OUR ACCOUNTS WILL AGREE.
APPROVED BY:
To:
AMOUNT/
CHARGED
loo
000 00
T. A. P. E.
MJG
1\9&B
Acct.-:C61-101-8'
is
/OOIOOQDOOO/
5991
Lilly Exhibit No. 2
"O.
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I^L<
"1-70
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•^
J^^M^jlC^^JIa- (o
r
/ ; \/<,I^L^A^.^i-^' 6v ,.._ ^
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^^e^tT/^
^
l^kAJU.
c^^jM
-/iJ^Mj^^^
Ay !■= l-'^^■:Ll-^J■^.^~J<J~..U■
f| ii _ /T-- c T.-^ . > o^; -J.
14 -f-
5992
Lilly Exhibit No. 3
liikiii "^"^
LILLY, BOB A.
,\^ inmBt ^ui^ivi ^5ivtg
. AUSTIN. TEXAS. .
12-17
On drmmd, or i/ no dmmi it mndt ikm
Citizens National Bank of Austin
One Hundred Thousand and no/100-
— dova «/*«■ *»*«. f" vabu nc*iv*d, I,
/'7**^MUl'lJ!^"*'rtt.rtl»^'P*i " '■»•'»•' •*•" *•>• •«* " promlMd thalt. •! Ik« «pU«i o* ft* 1^*1 Wd
(• " lM«OM». 11 "«« dxlMi «<• "Mid b*'*»<« "*•• •■4 nMtu.»<l -)ft*«l Mlk.
■p*dfltd abovv. lo appiT ■"! '''*d
:^.3 7*^
th« ll*bil»T •> •"* *>««•' hartAo (o
Tlia hold*' l>*r«3f .1 k*r«br «irU.ori
«r thlMOi ol *atM la th« poiMnlom
Certificate of Eeposit #188
Al^tCiL
1JL20_
Mr^JJL
^
23^
/iJb
£2^
^/ ^^.s^
■jj-
K- ,- I )
A
f'^/f,!/^ /^.y^ ZM^
1011 N. W. Military Road, San Antonio, Texas_
\no.
»- 1 ' ' ><- AUSTIN. TEXAS.
, "^.V. A_
g-/?- /t^'
^ On (ftfmoTWJ, or if no demand u nutd« tAen £C
~4fay« a/C«r dat«, /or vatua rwtivtdj J,
Citizens Nationai. Bai?k of Austin
OKC rv.M-1/..v.l Sf-vir>.. Mo.v..\acJ Ci^ry Zi'^\.\ ^i.2//cf Collars
m«n*y ol Iti* United 5UU* «l Amarfu vftfa Intmit th««>n •! tfc« rate ol ^ '/V »ot caat par aaMm. In Um
nola li ptacad with an aUofitvr fof Mllactlaa, er If collactad by tolt or Uuoogh piebala. banbapter «r otkaf |«d>-
••dlngt. tKa andanlsMvd aflr«a to pay 19^ •ddHIoml on tha prtaclpot aad intorati dy« m attonwr't faak F^ilara
, pn»ta(t, damaad.
V haraof, ai ipvrjriad ab«n, to apply ur «»■
I aar ol Um partia* lUWa b«raoa. le IfcrM^
r nwfa SkwHt AgrawMMlt. / <? >^
i(^
^
^mnr
r
Z;
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Z'
'/S/' a ^yL -^P
.^^
dciU4-
5993
On dsvumd.
12'UiS LILLY, Bob A.
austin, texas.
(A™ 60
4-lS
t dvmand 5
-days after d-ale, for vaiue r«ceiv«d.
Citizens National Bank OF Austin
--Fifty One Thousand Seven rfuffi-'eTSixty Eight and 23/100--
DOLUARS
•inum. In th*
1. >h. undanlQ
•H aer** t** P#r '?•'. •oditfonjf
llm»nt o( flilK*
prlncitMl or intarait wh.n du« am!
M«dn»M. If Ih
l«Sal tK)td*r of thii noU «t an.
«f*. it m*.y d*c
tfa the u-ipald baranc* dua ani
rantoi iav»:«tli
«.4iv«i gr^c*. prctut, dantand. na
;t* ma, b. •>!
rf/or taking af
iMunty cr cellataral, .;r tha tubri
an, .rgnef h,r.
o for th. p«,m.M of IhU not..
3( ii Kc(«br •«
Hiorii»d and dlraetad At any tlma
u* 'n :h8 pot:»
lion of tha hotdar lor th* crad'* o
Ota. ThIi nota Ii or mey ba tacur
..0.7 3/4 p.,..„,n,
at throL'oh prabdi*, bantnipli
lal and mtara^l du* n Altorn*)-'! feat, fjitura
halF, at tha opi:on cf tha Uael holdar, nutura
a dabl or ant lacarltr for Ua dab) |ll anr|
rt notiea t« aar partr Each makar. lorttf. ai^
ntmant for paymant and cantaats tfcat tiia p»y-
l raiaasa of any llabiTity ha'aunriar provUad,
bHIj or ullalarar. ttiall la a« naana> aHacl
Certificate of ueposit #*§§#- .^/V
Renewal of 11772
ADDRESS G. P. M. Eldg. 4i.h Floor
raof. ai ipacIRad abeva. to appljt^ foadi
' »l ll>a partial llabta ha.^ji^lo »,, p,,.
?SS
f^
^
h:4
•51/768. 23
^iLUi
2:
Tn
» Sacuflty Agraamtnti. ,
tf ^.>f
Y
'U.
/
Ho >,5'i (-
13{:S9
LILLY, .-Bob A.
Ju.ne 12
AUSTIN, TEXAS,
Cyn demand, or if no demand m madf then 1
days after date, for vrlue
ClTlZEN.S NATIONAI, BaNK OF AUSTIN
AUS'flK, TEXAS
-Forty Seven Thousand Five Hundred Three and 77/100-
I of AmarTc4 with Intaratt tharsen i
-isJZCL
•tceived, /,
-DOLLARS
ly of th« UnHad Slatai
> li pl«c»d ■mi\ an altorr.ay
igi, tho unrfanignad a^'aa I
' IS*!^ <
- o) t
bilitr of i
if tha legal hotd
ly iti'tf* tt.e uipald balanca du«
laraUy waivat gtau, protart, damai
>» (•(tandad and r»-a>.-l*ndad wlthoul
ng of tscurit, or collatara). or tha
- %\Q,M
caUof7 3/4, p« c»nt par an»«m. .nth.
laelco by loit oi (hiough prabtto, bankruptcy or olh»r judi-
o" th« principal and intaratt dua £i attarttay*! faat. Failjta
t a\ proRi.iao (hali, at Vt<i option of ifia l»gAl lioldar, matura
Wrftr deantt tiia dabt of any lacurlty for tjia dabi [<l iny]
mdt-j*ad wllho^ nottca to any party, tach frikar. turrty, on-
otlc* *rtd praiontmant for paymaat 4nd eonianti \\\»\ t^• pay-
iea and without JalaaM of cny IJabili*? (laraun^ar p'ovtdad.
(itution of tocurlty or collateral, tbatll In no mannar aff«cl
i« holder hfltaM is haraby authoriiad and dircclad at €
' thirtgt ol «alu» Ir the pc^iiauion of tha i>ofdar for tho
ant and latirfaction of thit not*. Thli nota li o( may ba laci
Renewal of 12438 and CD#219
Ann.,.. G-P-M. Bldg 4th Floor
aan Antonio, Texas vaiiltS
-iin.i.t^
Ji ^!
\ . ■"
::iiF
no.
•47.503.77
n«Tt
6-15
.750S
.77
^iO, 000
00 1
S'&'7C
.r///
^'V.""
S'^^^ '
^
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M
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i>^
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5994
K\/o/>.:ii
LILLY, BOB A.
AUSTIN. TEXAS.
8-6
I demand if ma<le then—
-60-
,eJO
-days afUr date, /or value received, I,
Citizens Nationai, Bank of Austin
Tliirty-l'our Thousand Five Hundred IL'leven and 50/100-
Unllad S(«Ui of Afnarica with
Int«nlt
d with «a
ttern«T fof eoll«ctIo
. or If c
Mlanlonst!
«gr«« to MY <(%
•ddltloA
kcipal Of ii.tif«it wUn du« i
r II lh« 1
g«l hold«r of th<i n
I* «l «n
mJT dacUr
• th» unpaid baUac
du« an
M««Miir «
■ivM QfK^ proUit.
dtnuBd
b« •>lM(
•d «nd r*-«tUnd«<l
vlthowt ■
.Uf.a oi M
<uritr or coll«tM«l.
M Ih. «!.
,..7-3/4
I d««mi lh« 1
t tkraogh preb
< and iatoratt du« «i attofnay't '••!■ Failtif*
ill, 4t th« vptioB of tho Isgsl holdar, matura
1 Mcurltv for th* daM (If any)
If M^tT- ^^ mabar, wratr, •»-
I aitd pfaiantmanl fof paymonl »»d eoMoitti tkat tha p4f-
ind wiUiout i«l*aM of aaf liability iMrtHador providad.
oa of wcu/ity of coJlaUrel. ihall la no miuar affoct
jfltr haraof. ai ipodfiad t
i^'^rr .
■ > '
-i:.
NO.
•.^4^B11.*,0
DATE
„,=
BAUkNCC
•
1
9 V 7^
^^ /.-/
-'.)
,'-'\ .'1.
1 1 V- ;o
/s ^<v
/.-v ;-,.•'
;>.
9/-.^h.
'/r^r-
V iSr
Vj^-
7 /
%
- 1
/J
/
/
r'
••/
kkW-
/^
,^
i\^'^
-^
/^y
or Ihingi ol *«lu« ti> lh« poiiatilon ol tht tioldar (or ttifl cradit of account of ooy ol th* partiot ll*bU hwoon. to tho P*t>^ ^
m«M and »»l.rf*rtloo o( th.t ooto TWi ooto li or n>«r •»• i«co»«d by ono or ntoro SKUrltf Aflroom^nU. /^U(-^ yV -. >^ y //
CDfr219 (Ren. BaL Note 13089) _^^ /r^-^^ ^ ^^^^C .,
^/^yn
, G. P. M. Bldq. . 4th Floor. San Antonio. Tex. 78216
^3/yi
,a-7f
On demand,
we OR EITHER
daya after date, for value received, /,
- ORDER OF
Citizens National Bank of Austin
y'/'- /• AUSTIN, TEXAS
..,.>... 7^s^p„„.,p„.'
luit Of through probata, banLnplcy c
AUSrm, TEXAS
d Statai of Amarie* with Inlarait If
JMd «or»« to pay IS% addmon.l
may ba ailandad ,
tlgnar tiarato for
ii»ad tfiaK, at tha optio« of ih, Ugal holdar, watgra
Tlrt.'^* "^'r ' "/ '"' i«curity for tha dafat '{II any)
w'tnoot nottca lo any party. Each mahar, turaty an.
■I ..c-,1, „ «ll.,.,.|. rt.ll i, „ m.»i,Vr .l(„i
-r^z/f^
► p^y?^
T
si-rj
5995
LILX.Y Exhibit No. 4
fSECUKITY. AGREEMENT
(PLEDGE)
B3b A. Lilly
Debtovs Name
lOll N W. ?.giit3ry Road Ssjj fiatonij T^xas
Mail Address Cit>' County Slate Zip
(hereinaffar called in accoidancs with the Uniform Comineicial Code— DEBTOR) for value received hereby graats to-
Clttsstis Matlonal Bank of Aostln
Secured Party's Name
(hereinafter called iii accordfnce with the Uniform Commercial Code— BANK) whose mail address is
i\u3iin Travis T-.sas
City County State Zip
a security interest :n and delivers to SECUBED PARTi' the following descnbed property (-.vhich hereinafter is referred
to as COLLATER.\L) to-witr
Citk:22is National Bank Tf Austiii Csrtiiizate of Deposit Ns. 18S in th3
■ amoiint of $l'DO,QOQ.ia the aajas of Milk Producers, iaz.
to secure DEBKJS'S note fo SECURED PARTY dated , 19 . for $' ' -^'^" -^^
DEBTOR WARRANTS, COVENANTS .VNT) AGREES:
1. That all financial or credit statements deposited with or relied upon by SECUKED PARTY prior to, contemporaneously with,
subsequent to execution of this Security Agreement are or will be true, correct, complete, valid and genuine.
2. That all investment securities, instruments, chattel paper and any li-Ve pioperty delivered to SECURED PARTY is COLLATER.AL:
(a) are genuine, iree from adverse claims or other security interest, default, prepaymert or defenses; (b) all persons appearing to be obli-
£ated thereon have authority and capacity to contract and are bound thereon as they appear to be from the tact thereof; and (c) the same
comply with applicable laws concerning form, content and manner or pr^paralioD and -'.vecutiGn,
3. That DEBTOR owns the COLLATERAL and has the right to transfer any interest therein; the COLI.ATERAL is not subject
to the interest of any third person; and DEBTOR will defend the COLLATERAL and its proceeds against the claims and demands of
all third persons,
4. That DEBTOR shall pay prior to delinquency all tx\es, charees. liens and assessments against the COI.LATEf^L, and upon
DEBTOR'S f.i'lure to do so, SECURED PARTY at its option mjy pay any of them and shall be the sole iudse of the leRality or valid-
ity thereof and the amount necessary to discharge the same. Such payment shall become part of the indebtedness secured by this Secur-
ity Asreement and shall be paid to SECURED PARTY by DEBTOR immediately without demand, with interest the^on at the rate of
ten per cent (ItyTO per annum.
'St thMeor
: inAe ci
pa;Qn£nts
5. SECUi^ED PARTY'S duty with reference to the COLL.ATERAL shall be solely to use reasonable care in/he custody and pre-
servation of COLL.\TER,AL in SECURED PARTY'S possession, and to receive collections, remittances and pa-^Hsnts on such COL-
LATER.AL as and when made and received by SECURED PARTY and the SECURED PARTY shall have the option of applying the
amo'int or amounts so received, after deductioni of any collection costs incurred, as pa>ment upon any indebtedness of DEBTOR to
SECURED PARTY pursuant to provisions of this Secunfy AEreement or holdinx the same for the account of DEBTOR. SECURED
PARTY =ii,i!I not be rc^pon5ibIe m any way for any depreciation in the value of the COLLATERAL nor sh.ill any duty of responsibility
wh.'^socvpf r-jt upon SECURED PARTY' to take necessary steps to preserve rights against prior parties or to enforce collection of the
COLL.ATERAL by legal proceedings or otherwise.
The u.i.Tanties, covenants, terms and at;reement3 on the reverse side hereof are incorporated herein and r
all ir.Vnts and purposes, DEBTOR and SECUBED PARTY as used in this Security Agreement include the heii
istrators. successors or assigns of those parties.
12-17-63
MUJi Prodiicsrs, Lac.
by
cant gsft^Pai^ RSffg&r
5996
DEB* OR WARKANTS, COVENANTS AND AGREESi ,. ..
* I. Title— Except for the security interest hereby granted, DEBTOR has, or upoa acquisition will have, full fee simple tide to CoUateral
free from any Iteo. security interest, eocuffibraiice, or claim, and DEBTOR will at DEBTOR'S cost and expense defend any action
which may affect SECURED PAHTTS security interest in or DEBTOR'S tide to CoUateraL
2. FinnncinK Statement— That no Financinj{ Statement covering Collateral or any part thereof Is on fil& in any public office and at
SECURED I'ARTVS request DEBTOR will join in e:tecuting all necessary Financing StatemenU in forau satiifactory to SECUFIED
PAHTY and will pay the cost of filing same and will further execute aJl other necessary instrriments deemed necessary by SECUflED
PARTY and pay tKe cost of filing same.
3. Sale. lease, or disposidoo of CoUatanl— DEBTOR will not, without written consent of SECURED PARTY sell. contract to sell, lease.
encumber or dispose of Collateral or any interest therein until this Security Agreement and all debts secured thereby have been fully
sati^&ed.
4. Assignment of Security Agreemeirt-This Security Agreement, SECURED PARTY'S rights hereunder or the indebtedness hereby
secured may be assigned from time to time, and in any such case the Assignee shall be entided to all of the riRhts, pnvileges and
remedies granted in diis Security Agreement to SECURED PARTY, and DEBTOR will assert no claims or defenses he may have
agamsl SECURED PARTY a;'ainst the Assignee except dio^e granted in diis Security A^rreement. SECURED PARTY may at any
time tranifer the Collateral to itself or its nominee, receive income, including money, thereon and hold the income as Colljleral '
Of apply die income to any of DEBTORS indebtedness to SECURED PARTY. SECURED PARTY may at any time demand, sue
for. collect or rr.nke any compromise or setdemenl with reference to the Collateral as SECURED PARTY, in its sole discretion, chooses.
SECURED PARTY may delay exercising or omit to exercise any nsht or remedy under this Security Agreement without waivins that
or any other past, present or future right or remedy, except in writing signed by SECURED PARTY.
5. Repurchase of Collateral in Defauil-DEBTOR shall upon demand of SECURED PARTY repurchase,
b-ilr-r-^e due. any Chattel Paper subject to this Security Agreement in which the account DEBTOR i
and provisiaos of the note nnd/or Security Agreement evidencing said account.
6. Additional Seeuiity Interest— DEBTOR hereby grants to SECURED PARTY a security interest in-all other property previously de-
livered to SECURED PARTY and all property hereinafter delivered to SECUFiSD PARTY for the jmrpose of securing any indebted-
ness or obligation by DEBTOR to SECURED PARTY. Collateral incliKies.-'v.ithout Irniitations. DEBTOR'S reserve account, any
stock rights, rights to subscribe, liquidating dividends, stock 'dividends paid in "stocks, any securities, or other property which DEBTOR
may hereafter become entided to receive on the "account of DEBTOR'S ownership or interest in Collateral and all proceeds and sub-
' ' stitudons of Collateral all of whisb-DEBTOR shall immediately deliver to SECURED PARTTand which shall be held by SECURED
PARTY in the same manner* as* the ypjperty -originally deposited as Collateral. The terms and provisions of this paragraph shall not
be construed to mean that DEBTOR is audionzed to sell or dispose of Collateral or any part thereorf without SECURED PARTY'S
consent. '' *
7. Taze»-DEBTOR will pay promptly when due all ta.xes and assessments upon the Collateral or for hs use and operation.
f '8. Debtor Includes— Texas Law AppUcmbi»-D£BTOR as used in this instnunent shall be constmed as singular or plural to correspond
;. with the rumber of persons executing this instrument as DEBTOR. If more than one person executes this instrument as DEBTOR,
L their obligations under this iostmrnent shall be joint ^nd several. Terms used in this instrument which are defined in the Texas Uni-
form Commercial Code are used with the meanings as therein defined. The law governing this secured transacdon shall be that of
the State of Texas in force at the date of this instrument. ' .
, 9. Futurt Indebtedness-The security interest hereby granted secures the indebtedness of DEBTOR to SECURED PARTY, direct or
■ ■ faidirect, absolute or contingent, due or to become d'je, whether existing or hereafter arising.
i 10. Decreve in Value of CoQaleral-DEBTOR will, if in SECURED PARTY'S judgment the CoHaleral has jnaterially decreased in value
i or if SECURED PARTY shall at any time deem that SECURED PARTY is ini^cure, either RTOvide enough addibonal Collateral
to satisfy SECURED PARTY or reduce the total indebtedness by an amount sufficient to satisfy SECURED PARTY. A call for
* addibonal Collateral may be oral or by telegram or by United States Mail addressed to the address of the DEBTOR shown on the
front page hereof.
;11, Re-imbursement of expenso-At SECURED PARTTS option. SECURED PABTY may discharge taxes, liens, interest, or perform
; or cause to be performed for and in behalf of DEBTOR any actions and conditions, obligations or- covenants which DEBTOR has
t failed or refos^-to perform and may pay for th>=: preservation and protections of Collateral and all sums so expended, including
but not limited, reasonable attorney's -ees and other lethal expenses incurred o- paid by SECURED PARTY in exercising or protect-
ing SECURED PARTY'S interest, righis and remedies under this Security Agreement, court costs, agenfs fees, or commissions, or any
other costs or expenses shall bear interest from the date of payment at the rate of 10% per annum and shall be payable at the place
designated in the above described note and shall be secured by this Security Agreement.
12. Payment— DEBTOR will pay the note secured by this Security Agreement and any renewal or extension thereof and any other
indebtedness hereby secured in accordance with the terms and provisions thereof and w-ll repay immediately all sums expended by
SECURED PARTY in accordance with the terms and provisions of this Security Agreement.
13. Change of Residence or Place of Business-DEBTOR will promptly notify SECURED PARTY of any change of DEBTOR'S residence,
or chief place of bu
14. Attomey-in-Fact-DEBTOR hereby appoints SECURED PARTY DEBTOR'S attomey-in-fac* to do any and every act whi-^i DEBTOR
Is obligated by this Security Agreement to do and to exercise all rights of DEBTOR in Collateral and to make collections and to"
execute anv and all papers and iristrtunents and to do all other things necessary to preserve and protect CoDateral and to protect
SECURED PARTTi'S security interest hi said Collateral.
15. Time- Waiver— DEBTOR agrees that in performing any act under this Security Agreement and the note secured" thereby thai time
shall be cf the essence and that SECURED PARTrS acceptance of par^al or delinqui;nt payments, or faUure of SECURED PARTY
to etercLse D"y right or remedy shall not be a waiver of any obligation of DEBTOR or right of SECURED PARTY or constitute a
waiver of any other similar default subsequently occurring.
16. Default- DEBTOR shall be in default under this Security Agreement upon tfie happening of any of the following events or condi-
1. Default in the payment or pcifonnance of any note, obligation, covenant or Tiab"ni^ contained or referred to herein;
2. Any warra.nty. representation or statement made or furnished to SECURED PARTY by or in behalf of DEBTOR proves to have
been faije in any material respect when made or furnished;
3. Any event which results in the acceleration of the maturity of the indebtedness of DEBTOR to others under any Indenture, agree-
ment or undertaking;
4. The mariing of any levy, seirure, or attachment oF any of the Collateral;
5. Any time the SECURED PARTY believes that the prospect of payment of any indebtedness secured hereby or the performance
of this Security Agreement is impaired;
6. Df-ath, dissolution, termination of eristcnce, insolvency, business failure, appointment of a receiver for any part of the Collateral
ossiRnrnt-nt for the benefit of creditors or the commencement of any proceeding under any bankruptcy or insolvency law by or
against DEBTOR or any guarantor or surety for DEBTOR.
17. R^rf.edif^-l'-jnn the occurrence of any such event of default, and at any time thereafter. SECURED PARTY mny declare all obligations
\tCir! d ' ■.-• Hv immediately due and pavaM" and m.iy proceed to enforce p;i>Tnenl of the same and exercise .Tny and all of the rights
.::..! r-.-,. ::r> Vr-.. uled by the Uniform "Oniimrrcial C-id..- of Texas, a:, well a. all other rights and remedies. po!,ses,*-d by SECURED
Pa:;:V Sf^-'nKD party may. at SECCRF.D PAH7VS option, sell, assitn and deliver all or any part of Collateral at any
E.-<.li<T*s ?;...:<! .T at p-iblic or private s.ilc, ■-. ;th,.iit written notit.- nr aJvrr'isrmi-nl ami hid and become ptirchasor .it any public
^..l- or nt .u>v n.-.iv'r's R..ard. If noli p to DIT.TOn is required hv t'v I'tnfonn Cntnmrrcial CnrV of Ti \ k nf pnh'ic or pri>-atc
sil- i.f anv p.rt of t:oII..t-:raI, Oi to that part „i Coll.iN'ral which the l"uif..im Cnminei^ial Code of Texas requires said notice. SE-
CURED i'AHTV utU cive DEBTOR rcasonabh- notice of the time and place of any public or pnvate sal*- thereof and the require-
ments of f..iv.n.hk' notice shall be met if such notice is mailed, postacc prepaid, to the address of DEBTOR shown at the hegin-
rin- nf thi-i S.turity Agreement at least five t'y) d.ivs before (he time of ih** salr.- of disposition. SECURED PAHTY may apply the
procc ds of any diiposttion of Collater.il available lor satisfaction of DEBTOR'S indebtedness and the expenses of sale in anv order
of ptcferr-nce which SECURED PARTY, in SECURED PARTY'S sole discretion possesses. DEBTOR shall remain liable for any
deficiency.
5997
Lilly Exhibit No. 5
SECURITY AGREEMENT
(PLEDGE)
T. A. P. E. for benefit of Bob /■. Lilly
Debtors Name
1011 N. V/. i.lilitary High'^iay Bexar L-an Antjolo, Te^as
Mail Address City County State Zip
(hereinafter called in accordance with the Uniform Commercial Code— DEBTOR) for value received hereby grants to
Citizens national Bank
Secured Party's Name
(hereinafter called in accordpnce with the Uniform Commercial Code— BANK) whose mail address is
P. O. Box 4 j9d Austin Travis Texaa
City County State Zip
a security interest in and delivers to SECURED PARTY the following described property (which hereinafter is referred
to as COLLATEIUL) to-wit:
One (1) Citizens National Bank of Austin Certificate o: Deposit Mo. CD219
lor 5:100, 000. 00 issued to T. A. P. E,
to secure DEBTOR'S note to SECURED PARTY dated 12-17-69 ^ jg f^^ jJ00j00a^0_
DEBTOR WARRANTS, COVENANTS AND AGREES:
1. That all Gnancial or credit statements deposited with or relied upon by SECURED PARTY prior to, contemporaneously with,
subsequent to execution of this Seowrity Agreement are or will be true, correct, complete, valid and genuine.
2. That all i-vestment securities, instruments, chattel paper and any like property delivered to SECURED PARTY as COLLATERAL:
(a) are genuine, free from adverse claims or other security interest, default, prepayment or defenses, (b) all persons appearing to be obli-
gated thereon have authority and capacity to contract and are bound thereon as they appear to be from the fact thereof; and (c) the same
comply with applicable laws concerning form, content and manner or preparation and execution.
3. That DEBTOR owns the COLLATERAL and has the right to transfer any interest therein; the COLLATERAL is not subject
to the interest of any third person; and DEBTOR will defend the COLLATERAL and its proceeds against the claims and demands of
all third persons.
4. That DEBTOR shall pay prior to delinquency all taxes, charges, liens and assessments against the COLLATERAL, and upon
DEBTOR'S failure to do so. SECURED PARTY at its option may pay any of them and shall be the sole judge of the legality or valid-
ity thereof and the amount necessary" to discharge the san" ^ ^uch payment shall become part of the indebtedness secured by this Secur-
ity Agreement and shall be paid to SECURED PARTY b) ^ ^BTOR immediately without demand, with interest thereon at the rate of
ten per cent (10%) per annum.
5. SECURED PARTY'S duty with reference to the COLLATERAL shall be solely to use reasonable care in the custody and pre-
servation of COLLATERAL in SECURED PARTY'S possession, and to receive collections, remittances and payments on such COL-
LATERAL as .-.nd when m.ide and received by SECURED PARTY and the SECURED PARTY shall have the option of applying the
amount or amounts so received, after deductions of any collection costs incurred, as payment upon any indebtedness of DEBTOR to
SECURED PARTY pursu.<nt to provisions of this Security Agreement or holding the same for the account of DEBTOR. SECURED
PARTY shall not be responsible in any way for any depreciation in the value of the COLLATERAL nor shall any duty of responsibility
whatsoever rest upon SECURED PARTY to take necessary steps to preserve rights against prior parties or to enforce collection of the
COLLATERAL by leg.il prnceedings or otherwise.
I
\ The warranties, covtnants. terms ;incl agreements on the reverse side hereof are incorporated herein and mnde a part hereof foi
a{\ intents and purposes DEBTOR and SECURED PARTY as used in this Security Agreement include the heirs, executors, or admin-
istrators, successors or assigns of those parties.
Al' ri;"-r(.r.':cs to LhETOF E.hali also be ani livable to OWIIZE CF CCLLATEPAL.
Dated ^^-^?-«9 .
Trust for Agricultural Political Education
By. ^ _ . , , Trustee
Signature of DEBTOR />^V>iNZi^ OF
COLLATERAI
30-337 O - 74 - 10
5998
DEBTOR WARRANTS. COVENANTS AND ACREESj
1. Title— Except foe the security interest hereby granted. DEBTOR has. or upon acquisition will have, full fee simple title to CoUaf^n^l
free from anv lien, security interest, encumSiance, or claim, and DEBTOH will at DEBTOR'S cost and expense defend any .iction
which may affect SECURED PAfiTV'S hecurity interest in or DEBTOH'S btJe to Collateral.
2. Financing Statement— Tliat no f tnanciDR Statement covering Collateral or any part thereof is on file iit any ptiWic office and «r
SECURED PARTY'S request DEBTOR wiJl join in executing all necessdiy Finunt-iDR Stateuienti m fonr.is satafactory to SECUSED
PART Y and «iU pay the cost of filing same .^od will further execute all other necessary iiulrumens deemed net-evary by SECURED
PARTif and pay the cost of filing same.
3. Sale, lease, or dispositiofi of Collateral- DEBTOR will not, without written conwnt of SECURED PARTY seU.contrect to sell, lease,
encumber or dispose of Collateral or ^ny interest therein until this Security Agreement and sll debts securt'd th«»reby have been fully
satisfied.
4l Assignment of Security Agreement-This Security Agreement. SECURED PARTY'S rights hereunder or the indebtedness Iwieby
- secured may be assigned from time to lime, and in any such case the A^signee shall be cntHled to all of the rights, privileges and
remedies gtanied in this Security Agreement to SECURED PAR1T. .ina DEBTOR will assert no cloims or deferv-es •>e mjy hav-
against SECURED PARTY against the ^.^signec except those granted in this Security Ajreemenl. SECUPED PARTY may at any
time transfer the Collateral to iUit'if or its nommee, rtceive income, including money, therwrn and hold :he income as Collateral
or apply the income to any of DEBTOfi'S indebtedness to SECURED PARTT SECUP.ED PARTY may at jn> hrae demand, sue
for, collect or make any compromise or settlement with reference to the Collateral as SECURED PARTT. in its sole discretion, chaises.
SECURED PARTY may delay exprcisinR or omit to exercise any rijihl or remedy under this Security Agreement without wn;vjnR that
or any other past. pre:>enl or future liijht or remedy, except in writing signed by SECURED PVRTY.
5. Repurchase of Collateral in DefauU-DEDTOR -Jiaii upon dt^mand of SKCL'RED PARTY repurchase,
balance due, aiw Chattel Paper subject to this Secunty Agreement in which the account DEt^TOK i
and provisions of tlie note and/or Security Agreement evidencing said account.
6. Additional Securitv Interest— DEBTOR hereby grants to SECITRED PARTY a security interest in all other property previna<;ty de-
livered to SECUP^D PARTY and ail prnperty hereinafter delivered to SECURED P.^RTY for the purpose of securing any indebted-
ness or obligaboa by DEBTOR to SECURED PARTY Collat.:ral inchi^es, without Imutations. DEBTOR'S reser\e actount. any
stock rights, rigiits to subscribe, liquidating dividends, stock dTvidends paid in stocks, any securities, or other property which DEBTOR
may hereafter become entitled to receive on the account t>f DEBTOR'S owuershio or interest in Collaterrd ami a!! proceeds and sub-
stitutions of CoHalerai all of which DEBTOR shall immediately deliver to SECURED PARTY and whicK shall be held by SECURED
Party in the same manner as the property originally deposited as Collateral. The terms yid provisions of this paragraph shall nf>t
be construed to mean that DEBTOR is authorized to sell or dispose of Collateral or any. part thereof without SECURED PARTY'S
consent.
7. Taxes— DEBTOR will pay promptly when due all taxes and assessments upon the Collateral or for its use and operation.
8. Debtor Includes— Texas Law Applicable— DEBTOR as used in this instrument shall be t.-onstnied as singuJir <;r pturaJ to ooiTcspond
with the nimiber of persons executing this instrume-'it^ as DEBTOR. If more than one person executes this instmrnent as DEBTOR,
their obligations under this instn-ment shaU be joint and sexeral. Terms used in (his instrxunent which are defined in the Texas Uni-
form Commercial Code are used with the meanings as therein defined. The law governing this, secured transaction shall he that of
the State of Texas in force at the date of this insL'ument.
9. Future Indebtedness-The security mterest hereby granted secures the indebtedness of DEBTOR to SECURED PARTY, direct or
indirect, absolute or contingent, due or to become due, whether existing or hereafter arising.
10. Decrease in Value of Collateral-DEBTOR will, if in SECURED PARTY'S judgment the Collateral has materially decreased in value
or if SECURED PARTY shall at any time deem that SECURED PARTY is insecure, either provide enough addiHonal Collateral
to satisfy SECURED PARTY or reduce the total indebtedness by an amount sufficient to satisfy SECURED P.-CRTY. A call for
additional Collateral may be oral or by telegram or by United States Mail addressed to the address of the DEBTOR shown on the
front page hereof.
11,-Re-imbursement of expenses-At SECURED PARTY'S option, SECURED PARTY may discharge taxes, liens, interest, or perform
or cause to be performed for and in behalf of DEBTOR any actions and conditions, obligations or covenunts which DEBTOR has
failed or refused to perform and may pay fr-r the preservation and protections of Collateral and al! sums so expended, including
but not limited, reasonable attorney's fees and other legal expenses incurreil or paid by SECURED PARTY in exercntng or protect-
ing SECURED PARTY'S interest, rights and remedies under this Security Agreement, court costs, agent's fees, or commissions, or any
other costs or expenses shall bear interest from the date of pavment at the rate of 10% ptr annum and shall be payable at the place
- designated in the above described note and shall be secured by this Security Agreement.
13. Payment— DEBTOR will pay the note secured by this Security Agreement and any renewal or extension thereof and any other
indebtedness hereby secured in accordance with the terms and provisions thereof and will repay immediately all sums e.xpended by
SECURED PARTY in accordance with the temis and provisions of this Security Agreement.
13. Change of Residence or Place of Business-DEBTOR will promptly notify SECURED PARTY of any change of DEBTOR'S residence,
or chief place of business.
14. Attomey-in-Fact-DEBTOR hereby appoints SECURED PARTY DEBTOR'S attorney-in-fact (o do any and every act which DEBTOR
is obligated by this Security Agreement to do and to exercise all rights of DEBTOR in Collateral and to make col!eciior« and to
execute any and nil papers and instruments and to do all other things necessary to preserve and prelect Collateral ai>d to protfect
SECURED PARTY'S security interest in said Collateral.
15. Time-Waiver— DEBTOR agrees that in performing any act uT«3er this Security Agreement and the note secured thereby that lime
shall be of the essence and that SECURED PARTYS acceptance of partial or delinquent payments, or failure of SECURED PARTY
to exercise any right or remedy shall not be a waiver of any obligation of DEBTOR or right of SECURED PARTY or constitute a
waiver of any other similar default subsequently occurring.
16. Default— DEBTOR shall be in default under this Securit>' Agreement upon the happening of any of the following events or condi-
1. Default in the payment or jierformance of any note, obligation, covenant or liability contained or referred to herein;
2. Any warranty, representation or statement made or furnished to SECURED PARTY by or in behalf of DEBTOR proves to have
been false in any material respect when made or furnished;
3. Any event which results in the acceleration of the maturity of the indebtedness of DEBTOR to others under any indenture, agree-
ment or undertaking;
4. The making of any levy, seizure, or attachment of any of the Collateral;
5. Any time the SECURED PARTY believes that the prospect of pavinent of any indebtedness secured hereby or the performance
of this Security Agreement is impaired;
8. De uh, dissolution, termination of existence, insolvency, business failure, appointment of a receiver for any part of the Collateral
assignment for the benefit of creditors or the commencement of any proceeaing under any bankruptcy or insolvency law by or
against DEBTOR or any guarantor or surety for DEBTOR.
, Remedies-Upon the occurrence of any such event of default, and at any time thereafter. SECURED PARTY mny declare all obligations
secufd hereby immediately due and payable and may proceed to enforce pa>'ment of the same and exercise any and all of the rights
and remedies provided by the Uniform Commercial Code of Texas, as well as all other rights and remedies possessed by SECURED
PARTY. SECURED PARTY may, at SECURED PARTY'S option. s,-II. a-isi-n and deliver aH or any part of Collateral at any
Broker's Bo.ird or at public or pri\ntfi sale, without written notice or .id%erti'!empnt and bid and become purch.Tser ,it any public
sale nr at any Brokers Board. If notice to DEBTOR is required by tht- Uiulorm Commercial Code of Texas of public or private
sale of any part of Cxillateral. as to that part of Collateral which the Uniform Commerci.d Code of Te.xas requires said notice, SE-
CURED PARTY will give DEBTOR reasonable notice of the time and place of any public or private sale thereof and the require-
ments of reasonable notice shall be met if such notice is mailed, postage prepaid, to the address of DEBTOR shown at the begin-
ning of this Security Agreement at le.ist five f5) days before the time o( the sale of disposition. SECURED PARTY may apply the
proceeils of any disposition of Colbteral available for satisF.iction of DEBTOR'S indebtedness and the expenses of sale in any order
of preference which SECURED PARTY, in SECURED PARTYS sole discretion possesses. DEBTOR shall remain liable for any
deficiency.
5999
Lilly Exhibit No. 6
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Lilly Exhibit No. 8
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6004
Lilly Exhibit No. 9
jACOFsSEra a I ONG
January 6, 1970
Mr. Bob Lilly-
Associated Milk Producers, Inc.
1011 N. V/. Military Highway
San Antonio, Texas
Dear Bob:
Subject: Cause No. 68-H-930, Marketing
Assistance Plan, Lie. , e.t al v.
South Texas Producers Association,
et al
Enclosed is our bill for services rendered in connection
with the captioned case, as we discussed.
SEMbR. B JACOBSEM
I15B riFTLtfrin 5t.,>-1.W.
\V/v5HlMCrro>^. D. C.20005
203-6S9-2&00
With best wishes.
Sincerely yours,
JRL:eqb
Enclosure
Jake Jacobsen
Gary Evatt. y\s50ciATiE
6005
o^^
P^
Jacobsek' & Long
x-tsTX^TT. SfcMIiK <3 jACOD5£>:
'O- BOX 222 115S FIFTIEMTM 5r..»..W.
^USTI^J.TEX^^ 7S767 WXsMIMcroN. D. C. 3000&
il2-47a-II3l 20S-6S9-2e00
January 6, 1970
Associated Milk Producers, Inc.
1011 N. W. Military Highway
San Antonio, Texas
Attention Mr. Bob Lilly
For professional services rendered in
connection with Cause No. 68-H-930
Marketing Assistance Plan, Inc. , et al
V. South Texas Producers Association,
et al $10,000.00
Thank you.
eqb
Jake Jacobsen Joe R..Lonc Gary Evatt. Associate
I
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Lilly Exhibit No. 10
Jacobs EN © Long
April 21, 1970
Mr. Bob Lilly
Associated Milk Producers, Inc.
1011 N. W. Military Highway
San Antonio, Texas 78213
Dear Bob:
Enclosed is the bill with regard to Associated Milk
Producers, at al. v. Texas Animal Health Com-
Semer a Jacobsen
use FlFTEEtwTM St.,N.W.
iW'AJHiNcn-ow, D. C. 20005
2oa-650-2000
mission which you requested.
With best wishes.
JRL:eqb
Enclosure
Jake Jacobsen
Joe R.Lonc
Gary Evatt. Associate
6008
JACOBSEW & LON'C
P. O. Sox £22
AusTil-i.TEXA-i 7e'^67
513-^72113!
SEMEB. a JACOBSEIM
Illife FirrtewTM ST.,M.\(^.
\X-AiHrlsiCTON. D.C.2OO05
202-SS9-3S00
AprU 21, 1970
Associated Milk Producers, Inc.
1011 N. W. MUltary Highway
San Antonio, Texas 78213
Attention Mr. Bob Lilly
For professional services rendered in
connection with Cause No. 179, 227,
Associated Milk Producers, et al. v.
Texas Animal Health Commission, et al.
$10,000.00
Thank you.
eqb
7 /^ ^
Jake Jacoosem
Joe R.Lonc
Cary Evatt. Associate
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Lilly Exhibit No. 11
Jacobsen a Long
WfrrcATI ■ S£MhR.,WHlTE a JACOBSEN
P.O.BOX 22S I15S FiFTiihrrM S-. .hi.W
AU3T1vi,TEXA3 7S7e,7 >X'AJMIlJCTON.D. C 20005
iil2--«7S-H.'^l 20a-63©-2000
July 16, 1970
Associated Milk Producers, Inc.
1011 N. W. Military Highway
San Antonio, Texas
For professional services rendered in
connection with Cause No. 179, 227,
Associated Milk Producers, et ai v.
Texas Animal Health Commission, at ai . .$10,000.00
For professional services rendered in
connection with matters pending before
the State Health Department 6, 000. 00
For professional services rendered in
connection with cooperatives in Minne-
sota b, 000. 00
Total $22,000.00
Thank you.
eqb
■ _ CMS"- •
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Fake Jacobsem Joe R..Lonc • Gary Evatt Associate
6011
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Lilly Exhibit No. 12
Jaccb.'Sen' ft Long
Semer. White 8 .Iacobsen
VJCashimcton, O. C. 2000S
202-6S9-2900
August 51, 1970
Mr. Bob Lilly
Associated Milk Producers, Inc.
1011 N. W. Military Highway
San Antonio, Texas
Dear Bob:
I enclose our statement for services rendered in ac-
cordance with our conversation of last week.
With best wishes.
Sincerely yours.
Joe R. LonE
JRLreqb
Jake Jacobsln
Joe R. Lonc
Carv Evatt. .Associate
6013
\ * P.O.Box 22;
Jacobsen a Long
August 31, 1970
Semer.. White 8 Jacobsen
WA4H1S1CTOM. D. C. 2000S
202-6S9-Be00
Associated Milk Producers, Inc.
1011 N. W. Military Highway
San Antonio, Texas
For professional services rendered in
connection with Cause. No. 179, 227,
Associated Milk Producers, et al v.
Texas Animal Health Commission, et al . .$ 8,000.00
For professional services rendered in
connection with the drafting of bills to be
presented to the Texas Legislature and for
preliminary committee work with regard
to same 12,000.00
For professional services rendered in
connection with research for opinion re-
quest to the Attorney General of Texas .
2, 0afJ,00
Total
$22, OilO^OO
Thank you.
eqb
CHARGE ACCOUNT NO.
AfPROVEO fOR PATMr:NT
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PAID - CHECK NO.
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TT, Associate
30-337 O - 74 - 11
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6015
Lilly Exhibit No. 13
-December 22, 1969
Dear Harold:
Per my diBcusslon todr.y with Bob Lilly, I am
BUbnltting the eaclosed invoice. ■
With best personal wishes.
Sincerely 3,
Ted Van Dyk
Mr, Harold Kelson
Milk Produc ero. Inc.
1011 IW iiilitary
San Antonio, Texas 782I3
Enclosure
bee: Bob Lilly
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Ted Van Dyk associates. Inc.
ttOXi Te3-3337
December 22, I969
TO: Milk Producers^ Inc.
1011 NW Military
San Antonio, Texas 78213
Expenses, OctoTDer-December, I969
Retainer, January-March, I970 $18,050
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REQUEST FOf CHECK
TO DEFT:_
DATE: / ? - -j 1. - (.
ISSUE CHECK TO:
AMOUNT: -^.f r:-i O
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REQUESTED EY
APPROVED BY
6018^
Lilly Exhibit No. 14
• ' .. " TkO VaM J)tK AM»iutUTK.H. Lst. ^ 216
^.^; i 1kAKHl>ini'<i.\. |>. «. Kuu.ia . "
iui'o.Vuw..."^ .Bob:A. UXi*-- - - ;. J...'. .:.",.. t \9»'N0,C>'1
^^ jeti Thouaand Dollars ontf 0O/l00»-»— -—•«--»•«— ——-» — .,..«... p„|^^,„^
I y j; ' t«» »*• »t» 4«»M>-MI«». Bl'.
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a >(»irc K'i»A«< '-» ;4 , 'fr' ^^.vf >;;•* _f J< >.s>fl 111* »¥< i* . . •>'t'/* IJ.
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6019
Lilly Exhibit No. 15
Anthony' Nicholas Copy 1969 Form 1099
Ted Van Dyk Associates, Inc. izz^ sevebteentw street, n.w.
WASMtNGTON, D. C. 20036
(202) 7B3-3337
March 10, 1970
Dear Bob: :
As .protection for both .of us, you will be
receiving a withholding slip for the $10,000-
just as I 'received one.
That closes the circle and keeps us beyon-d
.question.
Hope to see you soon.
W.ith best wishes.
Sincerely,
Mr. Bob A. Lilly
Associated Milk Producers, Inc.
-lOll N. W. Military
Saji Antonio, Texas '78213
I
6020
Form t03?pjJ.S. INFORMATION RETURH FOR O^DAR YEAR 1869 Copy a
^-^ (S« inii,uciion< on Form 1096) Fof Internal RevDHus Se:. t:
nitstsi
4. Pilfonice
opciitivtl
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S. Rcnb and roytltin
6. Annuitiei, p»nsrons,
ind oiner l.ied or
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foreign I'l-ni. (r.i
W-2 ilen.i
1. Croii dividends and
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en ilock
2. £*;«.
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TO WHOM PAID TYr.orpi.nlcon,. ,.ndoddr...(iccloi!oaP COM. Uoccounll. 3 BY WHOM PAID (Nimr. iJdreM (include ZIP eoJO. ind
I lor mull.pl. poy.oi w.lh diir.iort .^t„amr, or II iocludoi ihc oomo ol a i.duc.ory. Iioil. oi
t o«loU,d**.gDoiolh«i>aa«oflb«ind>viaualot ODUIrlowhom lb* idootiiyiog sumboi bolvogi.
U.S. Triitury Dipartmlnt, Inlfrnil Rt««nuo Sarvica
6021
Lilly Exhibit No. 16
Ted Van Dyk Associates, Inc. 122^ seventeenth street, n.w.
WASHINGTON, D. C. 20036
(20Z> 763-3337
Avigust 27, 1970
Mr. Bob Lilly
Associated Milk Producers Inc.
GPM Building
San Antonio, Texas 78216
Dear Bob:
Per our discussion earlier today, please see the
attached invoice for processing. See you in
Washington on the 10th, or thereabouts.
With best wishes.
Sincerely,
ed Van Dyk
'^■^P'l'for,.
6022
Ted Van Dyk Associates, Inc.
1224 SEVENTEENTH STREET, N.W.
WASHINGTON, O. C. ZOOSe
(ZOZ) 7a3-3337 .
August 28, 1970
TO: Associated Milk Producers
GPM Building
San Antonio, Texas 78216
Retainer, October-December 1970 % 6,250.00
Direct Expense, July-August, 1970 12,805.72
Total $19,055.72
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6024
Lilly Exhibit No. 17
4/17/70
I
Called Milt Semer, Washington, D. C. Ullb/lO. Milt Semer discussed
the Muskie Election Conanittee which is the official name of the fund
raising machinery to get Muskie re-elected as Senator from the State of
Maine.
Semer stated that Ted Van Dyk had contacted him and informed Milt
Semer that AMPI was ready to contribute $ 5,000 to the Muskie campaign.
Semer was quite amazed that Ted Van Dyk would have passed this
information along to him. I informed Semer that I had no knowledge of
why Ted Van Dyk had contacted him to give him this information.
Semer suggested that if we did contribute that we not contribute
this amount at this time, but hold it on a much lower scale, and he would
look upon AMPI to be held in reserve. I assume from that that he means
contributing in the neighborhood of $ 1,500 to $ 2,000 on the first
contribution we might make to Semer.
Semer asked me to check out Mr. Martin Hauan. He is a political
PR man, 1100 Sheraton Hotel, Oklahoma City-telephone no. CE 6-0931.
Semer informed me that Hauan is among the antl-Kerr forces in the state
of Oklahoma and his current assignment according to the information he
had given Semer is to work for the election of Howard Edmundson, ex-
Congressman, for the Governorship of the state of Oklahoma. Semer stated
he is a smooth dresser--rather suave sort of person, very candid--and he
did not know him and wanted me to check him out.
Hauan had volunteered to head up Muskie forces in the state of
Oklahoma if Semer saw fit for him to do this in a low-key manner, but
Semer seems to have some doubt about him as he questioned him on several
people that certainly are known politically in Oklahoma and Hauan was
not too well advised on them.
A TRUE COPY
6025
Lilly Exhibit No. 18
Ted Van Dyk Associates, Inc. izza seventeentm street, n.
WASHINGTON, O. C. 20036
UOZ> 763-3337
September 14, 1970
TO: Bob Lilly
FROM: Ted Van Dyk
RE: Whittemore check
Bob, per our discussion, please tear-up the signed
receipt for the Whittemore check. The check itself
has been destroyed on this end.
A new check for $1,000 to "Maine for Muskie" should
be drawn to replace it. Please send it directly,
with new receipt for signature, to Mr. Robert Nelson
Room 1004, 1660 L Street, N.W. , Washington, D. C.
Many thanks.
6026
Lilly Exhibit No. 19
Tcio Van Dyk Associates, Inc. izo scvcntccnth &TnccT. i^.
WASHINGTON. O. C. 20030
k
(iOi) 7e3-J33T
July 9, 1970
Dear Don:
Harold Nelson, Dave parr and their colleagues had a good
jTieeting yesterday with the Senator. Many thanks. Here is
the follov.-up,
1. Please see attached two checks--$l ,666 each for the
Kuskie E ection Coranittee and for the Maine, for Muskie
Coirirnittee. Additional checks of $3>33^ each will be sent
to you v/ithin the next fev; days, to reach a total of 55,OCv-
for each corrimittee.
2. I^il send you a mernorand'ir;:, and list, re the special
Kilk proi3raTi. The Senator offered to help on this.
3. I'll look forward "00 receiving froi^i you a 11 50 of
ca:"idldates the Senator recon'.rnends for special help Lhr" c
fall. Contributions v.'ill be ~,ade to ther., on the basis
■chat the contributions come at the Senator's reco:n.-nenda">-iO"'..
I suggest that the list be relatively short, but consist of
people v.'ho are of high priority to you.
h. The Senator said he would v.'elcome the input of several
acaderr.ics who have soine help to offer re agricultural
policy. I'll see that theiu papers, etc. are channeled
through you. You can Judge 'their usefulness.
5. Sniall favor departr.ent: Dave Parr has two sons, Travis
and Steve, ages 18 and 17, who are very arixious to spend
two or three days this summer carrying bags, driving cars,
etc. in the Senator's campaign entourage in Maine. They
are good-looking, intelligent boys. They would, of course,
travel and work at their own expense. Could this be
arranged?
I'll stay iri. touch on all of this.
V'ith best v;ishes.
Sincerely,
Ted Van Dyk
Mr. Don Kicoll
iCGO L Street, K.W,
Rm. 100^4
.' .'.-"" ir. ~ ". en D C
6027
Specral Political A;;ricultur:il Cominunity Ldiication ■i^ • loID
SOS I'OR rUANU UUILDING
LOUISVILLE. KiiNTUCKY -40202 July 7^ jg 70
aV
voth;-; Maine for Muskie Coirjnittee, '.vashir.Kton, D. C. "^ 1,666.00
>:{z>^ii ov— = "^ — ■ — -
' /^V.ii ■■ • I h o- (c^ !:^OiS O O CIS DoLL-vRs
SPACE - VIRGINIA TRUST
rSuSTiCOMPAMY, LOUISVILLE. KY. CI\ ^
U..CA.^
i:oa30-OQ5a*: oG-OB-o'ai-G-'
DETACH AND RETAIN TKIS STATEMENT
TTACHED CHECK t& IN PAVMvEWT OF tTEMS DTSCRIBCO
OW. xr NOT COHf.£CT PLEASE NOTIFY US PROMPTLY.
N9 1815
Contribution of dairy faxTr.ers of the southeastern states.
2i 52
S?eci£i Po'iticai Agricultural Community Education i^ • xC XI.
508 PORTLAND BUILDING
LOUISVILLE. KENTUCICY 40202 - .7uiy- 7_ .g 70
•'' ■'- - -it? ■;;" ig ■:"<.:•-■-■ O O CTS „^, . ^ ^^ 5iv66^^
r -I
Muskie Electioa Coamittee
Washington, D. C.
SPACE - KENTUCKY . TRUST
_CJ;SV:lLE. TRUST COMPANY, LOUISVILLE. KY.
^y^o,..^P.j^y
i:ofi TO'"Oa 5 iw oO'"Oa-o 2a-i,"'"
N9 -12:1
Contribution of dairy f ansers of the southeastern states .
6028
Lilly Exhibit No. 20
^X^HITE a Jacobsem
IStt IST*I »TRe«T.N.>sr. * \ • Jacobsew © LO>JG
wr^jHlwCTON. D. C.20005 AU»TIW,"rtx/\3 7e767
ao2-6so-aooo Vk . " " siaA72ii3i
PERSONAL.
Mr. David Parr
6423 Forblng Road
Little Rock, Arkansas
Dear Dave:
At your suggestion, here is a summary of our telephone conversation
of & few minutes ago.
1. I am working with gob Lilly to reshape the paper work originating
from sources such as SPACE. I understand you agree that, although the
figures are mathematicaU}' precise, they raise questions of logic and credi-
bility we may find difficult to ansv.'er.
2. It is vital that the relationship between AMPI and the Senator's
Campaign become highly personalized, with a mintmtim of intermediaries
and brokerage until it is firmly established en a first-name basis. 1 suggest
we a\'Did fragmenting or^bureaucratizing your inputs, whether they be finan-
cial, academic, cr your special brand '--! political savvy. At the moment,
■we have the largest supply of what v/e need the least, namely, the academic,
particularly when it is unfillered. Moreover, the intellectual contribution
you can make should arise cut of, rather than precede, a private session at
hlB cottage in Maine or his home in Maryland. I have been planning on this
since we first discussed this approach across the street that night of the
Republican Congressicnal Dinner. I hope that this format will make sense
to you and that you wQl also find it feasible to make it work beyond milk,
covering the entire agropclitlcal scene.
3. The summer seminar for your boys in Maine is in the works.
Sincerely yoiurs.
MUton P. Semer
Mr. Harold S. Nelson RECEIVED JUL 2 0 t370
Jake Jacobsen, Esq.
MiUTON p. Semer '■ Lee C. "White Jake Jacobsen Caviw >X'. O Briej-:
6029
Lilly Exhibit No. 21
ATTORNEY AT LAW
3309 FIRST IMATIONAI..BUII.DING
OKl_AHOMA CITY. OKLAHOMA 73103
40S/23e-B99t
,rt3ai303i
30-337 O - 74 - 12
6030
MUSKIE' ELECTION COMMITTEE
1156 15th stheet, n. w., suttb ^2
V,-ASHrNGTON, D. c. 20005
Milton P. Semer, Treasurer
August 3, 1970
Stuart H. Russell, Esq.
23.09 First National Building
Oklahoma City, Oklahoma 73102
Dear Mr. Russell:
.-.The contributions of $1, 750.00 to Maine for
Muskie and $1,650.00 to the Miiskie Election Commiittee
are a big help in assuring Senator. MuSkie's-re-election
this year to the United States Senate from the State of
Maine.
Thank you very much.
Sincerely,
Milton P. -Senaer
MPS/pym
6031
MUSKIE ELECTION COMNnTTEE
1156 15th stsbkt, n, \v,, sunu 302
WASHINGTON, D. C. 20005
Milton P. Semer, Treasurer
December 1, 1970
Stuart H. Russell, Esq.
2309 First National Building
Oklahoma City, Oklahoma 73102
Dear Mr. Russell:
Thank you for your generous contribution of
$5,000.00 to the Muskie Election Committee. We are
truly grateful for your support.
Sincerely, . h
Jlu/^lf-^^^
Milton P. Semer
MPS/pym
6032
Sivavi j-|. Russell
ATTORNEY AT LAW
2309 FIRST NATIONAU JSUfLDING
OKLAHOMA OiT^.'. OKLAHOMA V3102
8^8?
FoJi yoan. X.nloKmatA.on
and AdccAd,
SHR
6033
EDMUND S. MUSKIE
V
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/
aiCixHcb ^Ulcs ^CIT0£C
WASHINGTOr4. D.C
Mr- Harold S. Nelson
Associated Milk Producers, Inc.
1011 N.W. Jlilitaxy Highway
San Antonio, Texas 78213
Deal Harold:
Milton Semer has given me a summary
of the generous contributions you have in-
spired among your colleagues and friends.
1 hope you will convey my thanks and best
wishes to Dave Parr and Bob Lilly for their
continuing support.
_rf U**-*^ — >— <^ ^
Edmund S. Muskie
RECEIVED AUG 2 7 1370
6034
STUART H. RUSSELL
ATTOBNEY AT LAW
1W9 FIWT NATIONAI BUriDING
OKiAHOMA ary, oioahoma 73102
CEnnol J-7iJ9
MooenbeA. 24, 1970
Ain MAIL
Wa^inc\.ton, V.C. 10 0 OS
Ge.nt£.zmzni
At the. Kzouzit 0^ Hk. 806 Lx.lZif, of
AiAociate.d M^£h Pfioduczfii , inc. xr. San KntorJ^o ,
1 txat, , zncZoie-d -ke.A.zi.oZth iiou m^iZt {:,A.nd ny chzak
• 255, paajabtz to thz MuA.'i^e EZzctA-on Comm/.ttzz
in tkz piiu.nci.pai iam 0^ ^S ,000.00 .
Vtzaiz contact me ti you. kavz atiij
qaZit'Lom ,
V0U.K& vzMj tfimtij
SHRijk
EncioiufLZ
Sob Lillii
STUAnr H, nUSSELL
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6035
July 23, 1970
MX. Ted Van Dyk
in Van Dyk Associates, Inc
1224 Seventeenth Street N. W.
Washington, D. C. 20036
Dear Ted:
Enclosed are two checks tn the amounts of $ 1,750 and $ 1,650
^^— ^ r.ads out to Ilains for Muskie and iluskie Election Cainraittes
respectively.
These two checks along with the checks" from Dairyraenj Inc. and
2-Iid-A>T>erica make a total slightly in excess of $ 10,000.
Sincerely,
ASSOCIATED MIU< PRODUCERS, INC.
Bob A. Lilly
Assistant to the General Manager
BALikb
Enclosures — checks # 1002 & 0389
6036
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Sluart M- Rutceli
ATTOHIMETir AT t_AW
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July 24 70
ASSOCIATED MILK PRODUCERS, INC.
ATTEMTION:
Mr. Bod Isham
Box 32287
San Antonio,
Texas 78216
t pnorrssioNAL SeitviccSi
TO Legal Services Rendered in Purchase of Wilsey-
Bennett and Pure Hilk Producers Coop of Winsted,
Minnesota. $5,100.00
1
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6038
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6039
Stuart H. Kussell
ATTORNEY AT LAW
2309 FIRST NATIONAL BUILDING
OKLAHOMA CITY. OKLAHOMA 73102
403/2363991
January 13, 1971
H\. Bob Lilly
Kiiioclatzd tUlk FKoduce.A6 , Inc.
Box 32287
San Anionic, Te.xcu> 7S116
VzaA. Bob:
Attachzd li, a IzttzA. which T Azte.lve.d
^A.om StnatOK Uu^kle. conaz^nlng a A.zcznt coni.AU.ba~
tlon.
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would vjant In youK ille.6 . It was appafizntly 6znt
to San Antonio and the.n ioKwaA.de.d to me anopznzd.
'tfiuly youKi^^
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Attachmtnt
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Sex.\tor Edmund S. Muskie
\vASHLNGTON, D. C. 20510
December 22, 1970
S-tuart H. Russell, Esq.
c/o Harold Nelson "•
1011 N." W. Military Highway
San Antonio, Texas 78213
Dear Mr. Russell:
Before the year ends, I want to express to
you again my very warm thanks and appreciation
for all your help and encouragement to me in the
Eonths that have passed.
I need not tell you of the many great prob-
lems that face and divide our country in this
coming year, nor how vital it is that we^ — all of
us together — find a way to restore the faith,
the confidence, the vigor, that are the great
strength! and inspiration of America.
To succeed, 1971 must be a time of great de-
cision backed by positive action that will move
us irrevCTcably forward in the direction of our
great hopes. 1 am looking to you for the wise
counsel and guidance I need to assist me in form-
ulating policies and positions that will help us
all to achieve this goal.
So again, my thanks to you for your confi-
dence in me this past year. And with it my wish
for a New Year of great joy, of added accomplish-
ment, and of deepening friendship between'us.
S3.ncer ely .
6041
Lilly Exhibit No. 22
attorney at l^^vv
2309 FIRST NATIONAL. BUILDING
OKLAHOMA CITY. OKl.J\HOMA 73103
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6042
Lilly Exhibit No. 23
ejf i ©LIBERTY
1/ „^'; NATIONAU BANK & TRUST COMR^^iY
'■''^■f^ j"' OF OKUAHOM \ C1T^
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■ ' S 5,000. 00
FIVE THOUSAJSTD AND HO/IOQ-
""""°'' t..s«-ov,.„vt STUART K. RUSSELL. SPECIAL
i:io30'"00 i^i: wios aai, 3""
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6043
Lilly Exhibit No. 24
aUBERTY
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6044
Lilly Exhibit No. 25
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6045
Lilly Exhibit No. 26
12/18/69 $5000 (cash) from J. Long - deposited CNB
$5000 from Joe Long paid on $100,000 note
12/23/69 $500 (cash) deposited CNB
12/29/69 $5000 (check) fromS. Russell - deposited CNB
check made out to Bob Lilly
12/29/69 $5000 (check) from Jim Jones - deposited CNB
check made out to Bob Lilly
12/30/59 $3000 (cash) from Cliff Carter - deposited CNB
12/31/69 $10,000 (check) from Ted Van Dyk - deposited CNB
check made out to Bob Lilly
1/2/70 $1000 (cash) from F. Masters-deposited CNB
1/20/70 $5000 (check) from S. Russell-deposited CNB
check made out to Bob Lilly
1/27/70 $5000 (cash) DeViere Pierson-isd note #11169 CNB-2/2/70
1/30/70 $5000 (cash) from an unidentified source - Pd note 11169 2/2/70
2/2/70 $5000 (cash) from J. Long - pd note 11169 - 2/2/70
$15,000 paid to CNB on $100,000 note
2/1 1/70 $28,231.77 paid CNB on $100,000 note
4/17/70 paid CNB $4,264.46 - note 11169
5/4/70 $5000 (check) from J. Jones - deposited CNB
check made out to Bob Lilly
5/5/70 Borrowed $10,000 from CNB-ccntributed to HHH. Note 12639
B. Lilly check #105
6/11/70 $5000 (check) from Joe Long -deposited to 1st National Bank, Evant, Texas
Check on Evant Bank issued to CNB
6/11/70 To HHH - $1450 check from B Lilly (#106)
6/15/70 $2500 from Carter ($1500) and Maguire ($1000) transaction made in
Kerrville between Carter and Lilly
6/15/70 pd. CNB $7,503.77 on $100,000 note by check #108
30-337 O - 74 - 13
6046
.(2) -
6/30/70
7/16/70
8/6/70
Paid on $10,000 note at CNB (check #110) $2000 prin. and 129.17 int.
$5000 (check) S. Russell-deposit CNB
check made out to B. Lilly
$10,000 (cash) from J. Long paid on notes
note #13229 - 4000.00 cash and $4000 check #113, 103,33 int.
note #13089 - 5488.50 princ. and 274.36 int.; total 5762.86
8/24/70 $500 (cash) from Carter and $2500 (cashj) from Maguire
8/27/70 paid Isham $13,800 by check on CNB to clear accounts receivable -AMPI
borrowed $13,800 from Ken Odil, CNB
8/31/70 cashed $10,000 check from S. Russell to be delivered to Atlanta for
Howard Bo Calloway to go to Bently Gov. race. Contacts at Atlanta
airport. Lamar Sizemore or Terry McKenna, tele: 404/521-2268-
Transaction took place on 9/2/70 in Atlanta airport.
9/9/70 pd CNB $6161.38 on $100,000 note (#119)
9/17/70 pdCNB $15,000 on $100,000 note (check #118)
9/22/70 pd CNB $4000 on $100,000 note (Check #120)
9/22/70 Collected $4000 Frank Masters and pd CNB
9/24/70 $2500 (cash) from C. Carter - deposited CNB
9/30/70 $5000 (cash) from Maguire in D.C.
6047
(3)
10/2/70 $1000 (cash) fromF. Masters
10/12/70 borrowed $12,500 from CNB #14473 (cash)
10/13/70 $12,500 delivered to J. Chestnut for HHH
10/22/70 borrowed $5000 (note 14584) CNB. delivered $5000 (under Sec. of Agri.
Phil Campbell) for Pelcher -Fulton Public Utilities Comm, candidate (R)
Atlanta- traveling with H. Nelson
pd 12/18/70 (check #127) 5000,00 prlnc. and 60.42 int.
10/29/70 $5000 from S. Russell - deposited in CNB
11/12/70 $5000 from S. Russell - deposited CNB
11/16/70 paid CNB 4350.12 princ. and 40.27 int. , or 4390.39 on last of
$100,000 note by check #125
11/18/70 delivered $1200 cash for J. Glenn Beall, newly elected Senator, Maryland
thru Marion Harrison (check #124)
11/23/70 paid $143.97 to Futura Press for Bill Heatly
(check #12 6)
12/10/70 paid CNB $5000 princ. and 161.46 int. on $12,500 debit memo note 14473
12/16/70 Dep. 5000. Stu Russell in CNB
12/18/70 Pd CNB $5000 plus 52.50 int. (check #127) pd note 14584
1/19/71 Dep. 7500.00 from S. Russell in CNB
1/26/71 7500 princ. plus 68.54 int. on note 14473 (check #n 2 8)
2/7/71 Pd CNB $7500 plus 68.54 int. on note #15243 (ck #128) bal. on 12,500 note
6048
(4)
3/12/71 $5000 dep. CNB S. Russell
4/28/71 Jake Jacobsen called me requesting $10,000 cash for John Connally
be delivered to Jacobsen for placing in Connally' s safe deposit box
at CNB, Austin,
5/3/71 I contacted Stu Russell, Okla . City, and he advised me he would make
cash available to me in amount of $10,000 if I requested it, but that it was
expensive to AMPI due to income tax. I phoned him on May 1 and met
with him in person on morning of May 3 in San Antonio office on possible
ways to get needed money without it being so costly {set up dummy
procedure acct, set up repair acct, etc?) money was not obtained thru
Stu and 1 did not re-contact him after May 3 (I borrowed money)
5/3/71 1 contacted HSN as to how to get money thru attorneys or by borrowing.
He advised me he and D. Parr would meet in San Antonio on May 3 in p.
and decide.
5/4/71 HSN advised me to borrow $10,000 (note #17266) in my name at CNB
Austin, for J. Connally. 1 borrowed money and delivered it in cash to
J. Jacobsen who in turn stated he would put it in Connally's cash box
at CNB. HSN did not advise me how to recover money.
6/1/71 $1000 - S. Russell to Hal - deposit CNB (check)
7/1/71 paid $2000 to CNB on $10,000 (note #18196) note for Connally
check #136 - 1891.67 princ. , 108.33 int.
7/1/71 $1000 S. Russell to BAL - deposit CNB (Check)
7/29/71 $1000 dep. CNB - S. Russell
8/17/71 HSN instructed me in the presence of Bob Isham to get $5000 cash to
Dave Parr for Wilbur Mills -to deliver it to Parr personally. On 8/17/71
I borrowed $10,000 - CNB, note #18844, from CNB, Austin, for Mills
(personal note-BAL) and delivered $5000 of it same day to Little Rock
Central Flying Service to D. Parr's secretary. Norma Kirk, or Unis Hunt, the
$5000 cash in an envelope. Company Sabre Liner, Joe Bell, pilot, on
10/8/71 balance of proceeds of this note $5000 paid on same note #18844.
6049
AS] ■
8/25/71
8/30/71
$4000 S. Russell, deposit CNB (check)
pd CNB Austin (note #18196) $5000 on note
Check #137 - 4912.16 princ. , 87,84 int.
9/10/71
Borrowed $1000 from CNB, Austin, from Ken Odil - delivered to
Larry leaver in Insurance Bldg. , Austin, in CNB envelope
9/16/71 $3000 S. Russell - deposit 1st Natl. Bank, Evant, Texas (check)
on the same day I wrote $3000 check on Evant Bank to CNB, Austin,
to pay on notes
9/27/71 deposit
10/7/71
$4000 Jane Hart (S. Russell secretary) check cashed and pd on
note 18844.
paid CNP:
Note 18844: 10,000 princ, 93.89 int.; 10093.89 total
Note 19056: 1203.67 princ, 14.95 int.; 1218.62 total
4000.00 - Russell Check (no endorsement necessary)
check #138= 2312.51
5000.00 cash (?)
108.84 (?)
10/13/71 J. Jacobsen called me while stopped in Dallas enroute to D.C. on
BN #14. He had called San Antonio office and I checked into office
and got his call from Annette (Bain's secretary). Mrs. Buckley
answered my call and said Jake was in office about 12:45 p.m. He
informed me he was going to D.C. and wanted to tell Connally
we would have another $5000 for him in cash in Jake's safety deposit
box at CNB, Austin, in a short time. I okayed this.
a/10/71 Went to Austin-CNB, cashed $5000 check from S. Russell and took
cash to Jake Jacobsen at his office. In the presence of Joe Long, I
gave the money to Jake. Jake left for bank at 11:45 a to put in his
safety box at CNB to hold for John Connally.
11/10/71
11/10/71
Austin Airport - 9:00 a.m. ran into Jacobsen, Tom Townsend, Dave Parr
(Joe Long came in later) Dave was given $5000 cash by Jake for Mills.
Closed out
account at CNB (#139 - $1096.06)
i
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6050
Lilly
Exhibit
No.
27
39S
^
19
^-^
TO ^^ _ J_i _
rHis che:c<
BA1-AMC£
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19 ^y
NO. 399 ,=0. ,.=
TO-
11 il-i-^:^ . .<i:^ ^^ ^v
::z^
THIS CHECK *■. ^
^/z^^J-^ .1 9 :l
NO. 4QQ = = =■..
THIS CHECK
BALANCE J-
Editor's note: Check stubs numbered 398
thru A09 are all dated April 26, 1971, each
for $2,500, and "void" written across face.
Only stubs numbered 398 thru 400 shown.
THURSDAY, NOVEMBER 15, 1973
U.S. Senate,
Select Committee on
presroential campaign activities,
Wa.9hington, B.C.
The Select Committee met, pursuant to notice, at 5 :10 p.m., in room
1418, Dirksen Senate Office Buildins:.
Present : Senator Weicker.
Also present : Rufus Edmisten, deputy chief counsel ; David Dorsen,
and James Hamilton, assistant cliief counsels; Alan Weitz, assistant
majority counsel; Donald Sanders, deputy minority counsel; Robert
Silverstein, assistant minority counsel.
Senator Weicker. Do j^ou swear the evidence you will ^ve the com-
mittee shall be the truth, the whole truth, and nothing but the truth,
so help you God ?
Mr. Conn ALLY. I do.
Mr. Wettz. For the record, would you please state your full name
and address, please ?
TESTIMONY OF JOHN B. CONNALLY, ACCOMPANIED BY
WILLIAM E. ECKHARDT, COUNSEL
Mr. CoNNALLT. My name is John B. Connally, 2411 River Oaks
Boulevard. Houston, Tex.
Mr. Weitz. I see you are accompanied by counsel. Will he identify
himself ?
Mr. EcKHARDT. William R. P^ckhardt. I am a partner in the law firm
of Vinson, Elkins, in Houston, and I am here accompanying the Gov-
ernor as his attorney.
Mr. Weitz. Governor, I would like to direct your attention to a pe-
riod in 1969. Were you ever consulted during, let's say, the first half of
1969 in connection with possible contributions by either Associated
Milk Producer's, Inc., which for the record we can abbreviate also as
AMPI, or its political arm, TAPE ?
Mr. Conn ALLY. In what connection ?
Mr. Weitz. Political contributions to either the Republican Party
or to representatives of the President, either for his reelection or for
some other purpose ?
INIr. CoNXALLY. No; the only conversation that I can recall in this
time frame and this is shortly after I had left the Governor's office and
gone to Houston to practice law, I Avas informed, I would not call it
lieing consulted, and that is a question of semantics, about — by Jake
Jacobsen and I believe Mr. Harold Nelson — about their plans and ask-
ing about their i)lans to form what subsequently perhaps was then in
existence. TAPE, or a political arm of the milk producers, similar, as
I recall the conversations, patterned almost precisely after the COPE
(6051)
6052
arm of or<ranized labor. And I was asked if I knew of any objections
or any real reason Avhy it should not be done leo^al or otherwise.
Frankly, they didn't do it as a legal matter. I wasn't employed. This
was a very perfunctorj'-type meeting in which they merely informed
me about what they were going to do in a general way in terms of
structuring their future activities.
There was no talk of any specific contributions to any individuals
or parties or anything else. This dealt, as a generic matter, with their
mode of operations.
Mr. AVeitz. Can you place in time for us that meeting with Mr.
.Tacobsen and ]Mr. Nelson ?
Mr. CoxxALLY. No ; I really cannot. I don't have any idea.
Mr. Weitz. Where did it take place?
]SIr. Cox'XALLT. I am not even sure of that.
Mr. Weitz. At that time you were back at 3^our law firm in Houston ?
]Nrr. CoxxALLY. Yes, but I am reasonably certain it was not there for
some reason. It was more or less just an offliand type of meeting and I
would think, well, I just don't know. I just cannot place it.
Mr. Weitz. I take it that you had known Mr. Jacobsen before that
time?
Mr. CoxNALLY. I have known Mr. Jacobsen for 25 years.
Mr. Weitz. Has he ever served in a formal capacity in an}' of your
public service positions ?
]\Ir. CoxxALLY. I wovild say unofficial. He has at times been an offi-
cer of a convention or something of that type but his political activi-
ties were really alined with former Senator Price Daniel. He was with
Price Daniel when he was attorney general of Texas. He came to
Washington to serve with Senator Price Daniel during his time here.
He later served with him when the Senator went back as Governor of
Texas.
So, although I have known him over this entire period of time, he
has not ever been a part of my administration. He did serve, as I say,
as an officer of some of our conventions, I think, beginning in 1964.
]Mr. Weitz. Had he ever served, for example, in some fund-raising
capacity for you — any of your previous campaigns ?
Mr. CoxxALLY. No. I don't recall that he ever had any official posi-
tion like that.
]Mr. Weitz. Is this the first time that he had ever consulted with you
or discussed matters such as political contributions by some organiza-
tion in Texas?
Mr. CoNX'ALi.Y. I can't recall any specific prior instance, Mr. Weitz.
but there might well have been.
He was a part of Governor Daniel's campaign for Governor. He
was part of his organization in the race for attorney general. So far as
I know he cei'tainly was in a senatorial capacity, so we might well have
discussed it although at tliat point he and I were not discussing poli-
tical fnndi'aising as sucli, and you will recall tliat I actually ran against
Governor Daniel in 1962. And Mr. Jacobsen at that time understand-
ably supported Senator Daniel.
Mr. Weitz. Was tliat the first time that you met Mr. Nelson at this
meeting in 1969?
Mr. Coxx'ALLY. No; I had met him at some earlier time. I Avould say
in the latter years of the 1960's and I can't place it either because it is
6053
just one of those passing events. But I recall that it was in that time
frame because I recall very well that President Johnson was President.
Cliff Carter introduced me to Mr, Harold Nelson.
Mr. Weptz. During 1969, can you estimate for us how many times
you may have either met with or talked to Mr. J acobsen ?
Mr. CoNNALLY. No, I don't have any idea.
Mr. Weitz. Would it be as many as 10 times, for example ?
Mr. CoNNALLY. In 1969 it could have been. I don't know. I don't
want to guess at the number of times. I really don't know.
But I have talked to him — let me simply say, to try to answer your
question as best I can — I talked to him over the years on many occa-
sions, but to try to specify how many times in a particular year, I have
no idea.
Mr. Weitz. Now after this discussion, this brief discussion about
the formation of a political arm for AMPI, did you have an occasion
at any later time in 1969 to discuss either with Mr. Nelson or Mr.
Jacobsen or anyone else connected with AMPI the progress of that
political arm or any contributions that it might have made ?
Mr. CoNNALLY. No.
Mr. Weitz. Since that time until the present time have you ever
come to be aware of any contributions in cash that TAPE made in
1969?
Mr. CoNNALLY. No.
Mr. Weitz. Were you ever consulted either in 1969 or sometime later
by Mr. Jacobsen, Nelson, or other representatives of AMPI with
regards to, aside from contributions to AMPI ways in which AMPI
might have access to or approach the Nixon administration in terms of
substantive policies ?
Mr. CoNNALLY. No, I don't recall that I did.
Mr. Weitz. They never asked your advice as to who to contact or
what the best approach might be to the new administration.
Mr. CoNNALLY. No.
Mr. Weitz. Are you aware that they have been generally, heavily
identified with the Democrats in the previous election ?
Mr. CoNNALLY. That was my understanding but I knew nothing
about it. That was just a general understanding that I had.
Mr. Weitz. Governor, is there anything else you can recall with
regard to that meeting in 1969 betw^een you and Mr. Jacobsen and Mr.
Nelson ?
Mr. CoNNALLY. No, nothing of any import because I don't recall that
any specifics were discussed at all with me. As I recall, the thrust of
the conversation was purely the plan that they had to do apparently
what they have done.
Mr. Weitz. Now, Mr. Jacobsen was identified, as you have dis-
cussed it, as a lifelong Democrat up until that time ?
Would that be a fair characterization ?
Mr. CoNNALLY. I would say he probably still is.
Mr. Weitz. That is right. Do you think, given your relation with
him over a period of time, that he might have asked your consultation
with regard to substantial contributions to the Republican party?
Mr. CoNNALLY. No, he did not. And I might say in 1969 I was a
Democrat. There was no reason why you should be consulting me about
how to help the Republicans. We had just gone through a campaign
in 1968, and despite some of the rumors, I had indeed opposed Presi-
6054
dent Nixon. I had supported Vice President Humphrey publicly in
every way that I could and I might say we carried Texas for Mr.
Humphrey, one of the iev>' States that he carried. So I do not know
why anybody would approach me assuring that I was an authority
on the Republican hierarchy.
Senator Weicker. The question was asked by the counsel as to — I
can't repeat the exact question and answer, but in the identification of
contributions by A]MPI to the Democrats in the previous election.
Is that the substance of your question ?
Mr. Weitz. Being identified as supportive of the Democrats.
Senator Weicker. And, Governor, I believe you indicated that you
had knowledge of that or you did not, that is the point.
Mr. CoNNALLY. Senator, I said I only liad a general understanding
that they had been heavy contributors to the Democrats over no par-
ticular period of time but in the congressional as well as Presidential
campaigns, but I had no specific knowledge about it. This was merely
an understanding that I had.
Senator Weicker. Did you have any political or professional con-
nection with AMPI ?
Mr. CoNNALLY. No, none at all.
Mr. Weitz. Now, turning to a period in 1971, when did you become
Secretary of the Treasury ?
Mr. CoxNALLY. FebniaW 11. 1971.
Mr. Weitz.Now, did there come a time in March of 1971 when on
one or more occasions you met with representatives of AMPI in con-
nection witli tlie milk price-support decision that was then in dispute?
Mr. CoNXALLY. Mr. Weitz, as I recall, either in the latter part of
February or early March I had a communication with Mr. Jacobsen
who is the only man I liave talked to. He was in the private practice
of law, as you know, representing AMPI prior to the time, and I don't
i-emember the precise date, but it was prior to the time that the admin-
istration's decision was made on the milk price-support program^ which
I believe was March 12.
Mr. Weitz. That would be the first decision by the Secretary of
Agriculture ?
Mr. CoNXALLY. That is correct. Mr. Jacobsen either called me or
came by to see me. I am not sure whether it Avas a personal visit or a
telephone call but in effect saying to me that the milk people were very
distressed, very disturbed, that they thought that Secretary Hardin
was going to recommend a very low parity support price or a very low
support price which represented about 80 percent of parity and that
they thought this was a very great mistake. They thought it was unfair,
unwarranted, and that under the circumstances, with the decreasing
dairy herds and the rising cost of the dairymen, that indeed they
thought a higher support price was warranted and should be granted.
They expressed the hope that I would acquaint myself with the facts
on the assumption that I would be consulted and if, indeed, I agreed
with their position, he hoped I would give them some support. That
was the substance of the conversation.
Senator Weicker. "V^Hien was that conversation ?
Mr. CoxxALLY. Senator. I do not recall precisely. As I say, it was the
eaily pai+ of March or the very last part of February because it was
just not too long before INIarch 12 because they obviously, in their com-
6055
mimications with the Department of Agriculture, realized that they
were going to have some difficulty in persuading the Secretary to go
as high in setting the support price as they thought the facts justified.
Mr. Weitz. In that connection, do you keep or did you keep at that
time any records of either meetings or a calendar of some sort to re-
cord meetings and phone calls?
Mr. CoNNALLT. Yes, I did.
Mr. Weitz. Have you brought those records with you ?
Mr. CoNNALLY. I have brought those that you asked me to bring
that relate to this subject insofar as I could determine what they are,
yes.
Mr. EcKHARDT. Let me state that we have here all of the records
which were in Governor Connally's possession that came within the
category mentioned in the subpena, and in that connection we have
found only two pages that we thought might possibly apply and we
brought those two pages out of his records. And, of course, there are
other records here in other categories and at this time I would be happy
to make these available.
Mr. Weitz. Would counsel provide them ? Perhaps we could identify
them and enter them as exhibits.
Mr. EcKHARDT. Do you want only the ones that have to do with the
question you asked or do you want all of the records that we have pro-
duced here under the subpena ? Which are you asking for ?
Mr. Weitz. It would be appropriate to perhaps identify and enter
as exhibits the documents whicli you believe to be relevant and enter
those into the record and the remaining documents, if you will turn
them over to the committee, then we cari review them. And if we can
find nothing in them that we will want to keep in the record, then we
will return them to you.
Mr. EcKiiARDT. If I could correct that statement. I have no knowl-
edge as to whether or not these documents are relevant. We tliought
that they were the only ones that could come within the scope of the
subpena and for that reason they are produced. You will have to deter-
mine the relevancy of them for yourself.
Mr. Weitz. All right.
For identification here is a xeroxed copy of a record of phone calls
on March 16, 1972. Governor, would you identify this as to whetlier
this is a record of your phone calls for that period ?
Mr. Eckhardt. Counsel, the record contains other information in
addition to phone calls. It contains a list of callers, for example, and
other information.
Mr. CoNNALLY. All of my appointments, phone calls, and other in-
formation. This so far as I know is an accurate and correct copy of the
visits and phone calls and engagements I had on that dav. This hap-
pens to be March 16, 1972.
Senator Weicker. Might it not be easier, if the committee is going
to receive these documents, to identify them by the date of the docu-
ment rather than the contents? Is each one of these dated ?
^ Mr. Weitz. Yes. The others, it only says Tuesday, March 28. It is a
similar page-
Mr. Eckhardt. It is for 1972.
Mr. Connai>ly. 1971.
Mr. Eckhardt. One has March 16, 1972, which has a date on it. The
other, which only has Tuesday, March 23, on it, is 1971.
6056
Senator Weicker. Well, let's identify each one. then, as the log for
this particular date and year.
Mr. Weitz. All ri<rht. One would be the log for Tuesday, March 23,
1971, and the second for Thursday. March 16, 1972.
[Whereu]X)n, the documents referred to were marked Connally ex-
hibits Nos. 1 and 2 for identification.*]
INIr. Weytz. There are other papere. Perhaps we can identify them
by category for the record only.
Senator Weicker. Are the papers that you have. Governor, are they
xeroxes of the ones tliat you have ? Are those additional ?
Mr. Connally. No, these are xeroxes. They are copies.
Mr. EcKHARDT. He lias the original and counsel has the xerox.
Now, we also have a folder here which has General Accounting Of-
fice reports on the tab and it consists of some reports of Democrats
for Nixon. I will hand those to you. They are all of the reports filed
with the GAO.
And the next folder has a tab on it, "Dair\^men," and it has in it
some correspondence together with some pamphlets and a record of,
I believe, one meeting.
And this is all of the information, all of the records that come within
the categories asked for in the subpena which were in the witness'
possession.
Mr. Weitz. Now, to your knowledge, these are all the documents
in your possession, either actual or constructive, that come within the
scope of the subpena ?
Mr. Connally. So far as we can identify them and within — I might
further say, within the time frame that we had to work we believe
these are all of them. We had, what, 48 hours to look for them. I think
was about all, but I think these are all.
Mr. Weitz. In the event that you on further search find other docu-
ments, would you provide them to the committee?
Mr. Connally. We would be delighted to.
Mr. Weitz. Now, Governor, you just mentioned a meeting in either
late February or early March of 1971, either a meeting or a phone
call with Mr. Jacobsen. Now I notice you haA^e not provided us with
a log for that day.
Mr. Connally. Simply because I cannot identify. I have no way of
identifying what was discussed in any particular phone call on any
particular day. That was the only reason. I don't know, I am just
telling you what T do know from memory and T will be jrlad to give
vou the logs for the latter part of February and March, if you prefer,
but I cannot do it on the assumption that every one of the calls, if
any. from Mr. Jacobsen related to the subject.
Mr. Weitz. Is there more than one call ?
Mr. Connally. I do not know.
Mr. Weitz. Well, in searching for them, did you notice more than
one call ?
Mr. Connally. I do not think there is.
Mr. Weitz. Well, if there is onlv one call, we would obviously re-
quest that vou provide the log for that day. If there is more than one
call I would think that you should provide the logs for each of the
days on which Mr. Jacobsen appears and we can pursue the matter
'.See pp. 6092 and 6093.
6057
with him or in some other way try to determine the relevant phone
calls.
Mr. EcKHARDT. We will make copies of each log that has Mr. Jacob-
sen's name anywhere on it during whatever time period you want and
promptly furnish it to the committee. If you would tell me the time
period that you have in mind it would help us.
Mr. Wettz. Well, I think we may expand on it later. At this point I
would say from the time, perhaps, when you are reasonably certain the
call may have come in or, say, from the time you came on or mid-
February through March of 1971, at least to begin with.
Now, you are aware, of course, that the statutory authority for es-
tablishing milk price supports rests with the Secretary of Agriculture ?
Mr. CONNALLY. Right.
Mr. Weitz. Did you take Mr. Jacobsen's request as a request that if
you were consulted by the Secretary of Agriculture you would transmit
your views to him ?
Mr. CoNNALLY. Yes.
Mr. Weitz. Did he indicate that he also hoped you would express
your views to anyone else, for example, in the "^AHiite House ?
Mr. CoNNALi,Y. No, he obviously did not try to specify by whom I
would be consulted nor with whom I should talk.
Mr. Weitz. Did he mention anyone else other than the Secretary of
Agriculture ?
Mr. Conn ALLY. No.
Mr. Weitz. Did he mention the Secretary of Agriculture at all ?
Mr. CoNNALLY. He did. As I recall the conversation he expressed the
hope that T would be consulted by the Secretaiy and, if I was, he \sould
hope that I would agree with their position and so state.
Mr. Weitz. Can you recall anything else about the conversation ?
Mr. CoNNALLY, No ; I think that was about the substance of it except
my response was that I did not know to what extent I would be con-
sulted but that I most certainly would familiarize myself with it and if,
indeed, they were correct that he was thinking in terms of a support
price at 80 ])ercent of parity, I thought that was too low. I did not need
to familiarize myself with it, I was already familiar with it to that
extent. But I would certainly bring myself up to date.
And my position on it, INIr. Weitz. is very clear. It was in every con-
versation I had. It still is. And that is simply that in that time frame
in 1971, even though I had just come aboard, we Avere in the middle
of what was being called a stagflation, a recession. We wore involved
in a<lministering a budget that was in excess of $20 billion in deficit.
Part of the justification foi' the full employment biidget that we had
was that we were trying to stinmlate the economy to get economic
expansion to create the jobs. And we were putting out that kind of
money. I felt then that 80 percent of parity w^as an unreasonably
low level for price support of milk and made no bones about it and
I simply said, and in subsequent conversation, that the farmer, the
dairy farmer was probably in about the lowest income group in the
country and, under the circumstances, since the Johnson administra-
tion had always maintained the parity on milk prices at about 89 per-
cent, that I thought it was totally unrealistic and unjustified for us
to drop it to 81 percent.
Mr. Weitz. Would you have said all this to Mr. Jacobsen, a long-
time friend in Texas ?
6058
Mr. CoNNALLT. Would I ?
Mr, Weitz. AYould you liave ?
Mr. CoNNALLY. I do not know that I did at that point in time
but, sure, I would have.
Mr. Weitz. I see. So you are recounting your views on the matter as
opposed to exactly what you may have told Mr. Jacobsen?
Mr. CoNXALLY. Yes, I am just recounting mj^ views on it, not what
I told him.
Mr. Weitz. Did he discuss how their AMPI's political arm had pro-
gressed since they last talked to you ?
Mr. Con X ALLY. No, he did not.
Mr. Weitz. He had not talked with you about it, I take it, in the
interim between early 1969 and early 1971 ?
Mr. CoNNALLY. No.
Mr. Weitz. Now you have mentioned other conversations. Did there
come a time when you spoke to Mr, Jacobsen again about tliis matter?
Mr. Conn ALLY. Yes.
Mr. Weitz. Could you tell us about this ?
Mr. CoNX'ALLY. This was after the order was issued on INIarch 12
and it was a few days thereafter and maybe it was the day of the 23d.
I see his name is on here again. I am guessing about the subject mat-
ter, but the reason I assume that and the i-eason I guess that is be-
cause we did indeed have a meeting that day as reflected on mj^ calen-
dar at the White House on milk.
Now, in the subsequent conversation Mr. Jacobsen said to me that he
wanted me to know that when the order came out on March 12 that
they Avere bitterly disappointed, that they thought it was going to
create chaos in the milk industry where they were already losing tre-
mendous numbers of cattle and herd and a great many of them going
out of business and that they were frankly going to turn to Congress
for relief and they had done so, and that they had enormous support
and that they frankly were going to push for their 85 or 90 percent of
parity. And he told me then the relative success that they had had in
the intervening few days, and I might point out that on one bill in
the House of Representatives pending at that time they had been able
to secure 102 sponsors for 00 percent of parity and in the Senate, as I
recall, they had about 33 Members of the Senate already sponsoring a
bill calling for 85 percent of parity. But he said :
I want you to know this is going on because we are not trying to undercut the
administration, we are not trj-ing to create problems for you. but we do not
think we have been treated fairly and we don't have any recourse except to
proceed to try to get congressional relief. We think beyond any question we are
going to be successful and we just want you to know this.
That was the essence of the conversation. I said : "Thank you very
much. I don't have any argument with what you are doing and I
understand your position clearly."
Mr. Weitz. Did he discuss anything else with you at that time?
Mr. CoNNALLY. No ; I do not recall that he did.
Mr. Weitz. He did not mention any matters concerning political
contributions ?
Mr. CoNNALLY. No.
Mr. Weitz. This is, to the best of your recollection, on March 23?
Mr. CoN^NALLY. Yes ; and again I am guessing because I do have a
telephone call from him logged here so I guess that is correct.
6059
Mr. Weitz. Do you recall any meetings between the time that yon
first talked to Mr. Jacobsen on the phone or in person briefly in late
February or early March and this conversation on the 23d ?
Was there some other conversation that you may have had with him
and/or others from AMPI in connection with the milk price support
matter ?
Mr. CoNNALLT. No ; I do not recall any.
Mr. Weitz. Do you recall a meetino' with Mr. Nelson and a Dr.
G eorge Mehren during that time ?
Mr. CoNNALLY. No; I do not.
So far as I know the first time I ever met Dr. Mehren was almost a
year later.
Mr. Weitz. In 1972?
Mr. Conn ALLY. In 1972.
Mr. Weitz. During this period you do not remember a meeting in
your office with Mr. Nelson. Mr. Jacobsen, and Dr. Mehren ?
Mr. CoNNALLY. No ; I do not.
Mr. Weitz. If they were to recall such a meeting, would you just
take it to be that your memoiy was faulty on that point ?
Mr. CoNNALLY. I could be but, indeed, if I had a meeting in my
oificei during that period of time it woidd certainly reflect that I met
with them and we did go through the logs of these meetings in my
office as well as the telephone calls, and if, indeed, I had seen Dr.
Mehren, Nelson, and Jacobsen, I certainly would have submitted that
because that, obviously, would have been the subject matter.
Mr. Weitz. For example, if Mr. Jacobsen's name had appeared,
would he have established such a meeting and brought the otlier gen-
tleman with him which would not have been on the log ?
Mr. CoNNALLY. No; normally, if you will look, nearly all of tlie
names are there of everj^body that came in tlie office.
Let's take the date of March 16, 1972, which is on the sheet there.
It shows 3 :15 to 3 :50 I met with Mr. Jake Jacobsen, Dr. George
Mehren, Harold Nelson, dash. Dairy Co-op.
Mr. Weitz. Your logs do not establisli any other meeting, to the
best of your knowledge ?
Mr. CoNNALLY. No.
Mr. Weitz. Now, this meeting, or this call I should say, from Mr.
Jacobsen, was that before or after the meeting tliat is noted on the log
of March 23 with the President's office on milk ?
Mr. Conn ALLY. I have no way of knowing that because we did not,
except in rare cases, put down the time of the phone call but I would
assmne it was before because the meeting at the White House was at
4 :45, which was running fairly late in the afternoon. So I would as-
smne that it was before the meeting.
Mr. Weitz. The first phone call listed on the log of March 23 is
from the President at 10 :15 ?
Mr. Co>iNALLY. Right.
Mr. Weitz. Would that relate in an}'- wa,j to this matter of milk
price supports?
Mr. CoNNALLY. I would not think so but I cannot say with certainty.
Let me tell you why I do not think so.
If you will look down under calls and I do not know why this sheet
was ever pi'epared this way, but anyway, it does not reflect calls, it
reflects meetings from 8 in the morning to 10 :05.
6060
There was a meeting at the White House with Ecpiiblican leader-
ship, a 2-hoiir-and-5-miniite meeting at the White House with the
Republican leadership. Again the President called and they did put
a tirne on that call at 10:15 so obviously I just returned from that
meeting. I have to assume that his call had something to do with the
meeting that had just broken up and not relating to the milk matter.
Mr. Weitz. Are only calls that are actually completed listed on this.
on your log as opposed to callers whose calls are not completed ?
Mr. CoNNALLY. I think only the completed calls but I will have
to verify that. I cannot say it with certainty but I think that must be
right.
Mr. Weitz. Can j^ou tell us who Gus Mucher is who appears to have
received a call from you and he resides in Austin ?
Mr. CoNXALLY. Yes ; Gus Mucher was a former speaker of the house
of representatives from Brenham, Tex.
Mr. Weitz. Did that matter relate to the milk price support deci-
sion?
Mr. CoNNALLY. No, I would think not. No, and I frankly do not
know why I called him, probably to give him my condolences. You
will recall that he was involved in another time period but he was
involved in at a subsequent time or perhaps during this period of
time in the Sharpstown problem. I do not know why I called him.
Mr. Weitz. Now, either before or on this date you do not recall a
conversation with j^fr. Jacobsen in which the question of new monej-
from the milk people was raised ?
Mr. COXNALLY. No.
Mr. Weitz. If such a matter had been discussed that certainly would
stick in your mind, I take it ?
Mr. CoNNALLY. Well, I would not know what they meant by neAv
money because I did not laiow anything about any old money.
Mr. Weitz. Had any matters in connection with any commitments
by the dairy industry to the presidential or Republican Party ever
been discussed with you ?
Mr. CoNNALLY. Not at all ; not by anyone.
Mr. Weitz. Were you aware of any such commitments ?
Mr. CoNNALX-Y. I was not.
Mr. Weitz. Are you aware of any commitments to this day made
sometime in 1971 ?
Mr. Conn ALLY. Only through the press, and I read in the paper
where there was a letter written by some man in 1970 talking about a
$1 million or $2 million contribution but I was totally unaware of it
until I read it in the newspaper.
Mr. Weitz. And you never expressed an opinion on or before this
date to Mr. Jacobsen, as to additional moneys in addition to some prior
commitments, should be made in order to obtain a milk price support
increase support from the administration ?
Mr. CoNXALLY. Absolutely not.
Mr. Weitz. I take it you did not attend the meeting between the
President and the dairy farmers, the representatives of the dairy in-
dusti-y on the 28d ?
Mr. CoNNALLY. On the 23d of what ?
Mr. Weitz. The 2od of March — this day that you are looking at.
Mr. CoNNALLY. No, I am sure that I did not.
6061
Mr. Weitz. So, the first meeting that you had with the President
concerning the milk price support level would have been the meeting
at 4:45?
Mr. CoNNALLY. Right.
Mr. Weitz. Can you recall — where did that meeting take place?
Mr. CoNNALLY. I do uot remember ; it would be the Cabinet Room
or the Roosevelt Room, I would imagine.
Mr. Weitz. Can you recall for us who attended that meeting ?
Mr. CoNNALLY. There were quite a few, and as best I can recall,
Secretary Hardin was there, Director Shultz was there — he was then
Director of the Office of Management and Budget. I ibelieve Dr. Mc-
Cracken was there, perhaps other members of the Council of Economic
Advisers.
Mr. Weitz. And the President, of course ?
Mr. CoNNALLY. The President was there — there were two or three
staff people who were there ; I was there. I cannot be more precise than
that.
Mr, Weitz. Now, before this time had yoa discussed with either
Secretary Hardin, Director Shultz, Dr. McCracken, or anyone else
in the administration, the question of milk price supports?
Mr. CoNNAixY. Oh, I think beyond any question, I had. Not anj^
formal, structured meeting, but we were in constant meetings during
this period of time about all different types of subjects. I was appear-
ing on the Hill with great regularity ; following my confirmation. I
was particularly in communication with the Council of Economic
Advisers and Director Shultz about all types of administration policy ;
and I would dare say the subject had come up — but not in such a way
that I remember any particular meeting, or any particular comment
that was made by anybody.
Mr. Weitz. Do you remember, for example, the positions taken by
the gentlemen ?
Mr. CoNNALLY. Oh, yes ; I remember quite well.
Mr. Weitz. Let us take it one at a time.
Secretary Hardin ?
Mr. CoNNALLY. Secretary Hardin, basically — now you are talking
about the time frame of the 23d ?
Mr. Weitz. Let us say, before the 23d, your conversations with him.
Mr. CoNNALLY. Secretary Hardin obviously had stated his jiosition
and it had prevailed — in this position — on March 12. He basically was
recommending a support level at 81 percent of parity. I think that was
concurred in by Director Shultz. I think, beyond any question, and
perhaps others— I do not recall the others' positions with a degree
of certainty that I would want to try to speak for. Obviously the 81
percent of parity did not reflect my view, at all, but my views were not
that persuasive, nor that important. I liad stated them prior to the 12th
and subsequent to that time we had had — and the reason I think we
have had cursory talks, about the price-support program, because we
would begin to get feedback from the Hill — that a great deal of effort
was goins: on. on the Hill, and that the milk people were, indeed, active
on the Hill. That all of our — in my own case, T was up on the Hill, as T
said a moment ago, a great deal testifying before committees in the
House and the Senate, and I, from time to time, was talked to by
people on both sides of the aisle and they were very upset about it. It
k
6062
was obvious that there was building a real push on the Hill for con-
gressional action to overturn the price support level of 81 percent
of parity.
Mr. Weitz. Did you speak to anyone in the White House before this
meeting on the 23d to express your views ?
Mr. CoNNALLY. Well, I would say, again without being able to tell
you the times and places of precise details, I would say yes, I think
I had mentioned it to Secretary Slniltz. I think I had talked to Dr.
McCracken about it.
Mr. Weitz. Can you recall anyone else you might have spoken to '?
Mr. CoNNALLY. No ; but every time we got into a meeting, tlie sub-
ject miglit have come up, there might have been o people there, there
might have been 10 people there, but if you are asking me about any
other particular individual specifically than the President, I have no
rememberance of talking to the President about it.
Mr. Weitz, Do you recall talking to the President about it?
Mr. CoNNALLY. No ; T do not.
Mr. Weitz. Might you have ?
Mr, CoNNAixY. No; I did before the 12th, but I do not recall that I
did after the 12th, I frankly thought it was a closed issue and we had
made a mistake, and I simply, in the various comments that I made
on the 23d and what comments I made to George Shultz and others, if
indeed I made any, was to the effect that I thought we had made a mis-
take and that I thought the Congress was going to act.
Mr. Weitz. Now before the 12th, you mentioned you talked to the
President about this. Can you recall when that took place?
Mr. CoNNALLY. No; but all of us — those of us who were concerned
with economic matters — our opinion had been asked and I assume that
they asked advice of a lot of people. I expressed the opinion that I
had previously given to you, that I thought 80 or 81 percent was too
low. I thought it was a mistake and I gave all, the reasons why I
thought it was a mistake.
Mr. AVeitz. Did you ever discuss with the President, before the first
decision, anything concerning the political activity of these dairy
co-ops ?
Mr. CoNNALLY. No; political activities in what sense? In the argu-
ments, yes, in relation to their influence on the Hill — and I do not
use that in a crass or bad way — but they obviously wei-e in a i)Osition
to talk to a great many peojjje on the Hill and api>arently get a more
reasonable approach in answering their problem. And I must say that
I think the Congress was right when, indeed, yon ^ot 102 signatures
on the bill in the House asking for 90 {)ei-cent oiF parity, and when you
got Senators like Senator Nelson and Allen, Rayh, Bentsen, Burdick,
Cook, Cranston, Eagleton, P^astland, Fulbright, Gravel, Harris, Hart,
Hartke, Hollings, Hughes. Tnouye. Long, McCiee, McGoyern, Mon-
dale, Moss, MusTvie, Pi-oxmire, Si)ai'kman, Stevenson, Symington, and
Tunnev. all on one bill, calling for 8.5 i)ercent of ])arity ?
Mr. Weitz. The bill never passed, did it ?
Mr. CoNNALLY. No ; but the reason T think it did not pass was because
Secretary Hardin changed his mind about the level of parity.
Mr. Weitz. And you never discussed befoi-e this meetins: on the 23d,
possible political contributions by these groups, with the President?
Mr. CoNNALLY. I never discussed political contributions by this
group with them, or with him, or with anybody else.
6063
Mr. Weitz. Did you talk to him about the possible support they
might give him, without being specific about it ?
Mr. CoNNALLY. I do not recall that I did.
Mr. Weitz. Are you aware that he had had a brief meeting the
previous year with Mr. Nelson and another representative of AMPI ?
Mr. CoNNALLY. No; I was not.
Mr. "Weitz. Did he speak to you in terms that he indicated that he
was familiar with this particular co-op, or its leaders, or other co-ops?
Mr. CONNALLY. No,
Mr. Weitz. Now, at the meeting on the 23d, could you tell us what
views were the same views that you have heard earlier, were they
reexpressed ?
Mr. CoNNAixY. I would say "modified." And again, Mr. Weitz, let
me try to put this in the proper perspective. When we go into a meet-
ing with the President, all of his Cabinet officers and advisors tried to
analyze a problem in terms of tlie options and tlie alternatives and
the pros and cons of every position. So, there was no question of going
in and choosing up sides, or showing of hands, or anything of that
kind. Rather, we tried to analyze the problem from every standpoint.
I think it is fair to say that by the time this 23d meeting came about,
that everyone in that room was aware of what was happening on the
Hill— every one of them. And I think this went a long way toward
softening the position, we'll say, of George Shultz. Shultz — George
Schultz was pretty strong in his first attitude, I think, for two rea-
sons; and he is certainly more — I think he has appeared before you —
he is certainly more capable of expressing his own views than I am,
but as I recall, he has basically two objections.
The first — in the first place, he didn't believe in price supports. He
did not believe in the farm program, to be perfectly frank about it,
philosophically. And second, we had an enormous deficit in the budget
and he was fighting to keep a dime of additional expenditure down,
regardless of the program, and that was the principal thrust of his
argument.
I think this was basically Dr. McCracken and the Council of
Economic Advisers, I think weighed in. against it to begin with ; and I
can't recall any specific comments they made — that is my impression,
now, of their position then. Laigely, again, on philosophical grounds,
I think that we ought not to encourage, we ought to be working toward
the elimination of the price support programs, and the farm programs,
completely, and not encouraging the raising of the parity level and the
raising — the continuation of the program. But, because of the con-
gressional attitude, there's no question what everybody's view, includ-
ing Secretary Shultz, including Secretary Hardin's, had been softened
immeasurably. That was about the net of it.
I think, still. Secretary Shultz and Secretary Hardin, in particular,
on balance, would have still been slightly in favor of their position of
the lower parity. My position was the same. The only thing that — the
only additional argument I had was the proof of congressional activity
which I think they all, at that point, recognized.
Mr. Weitz. Was there any discussion at that meeting of any counter-
lobbying on the Hill or talking to Senators and Congressmen in the
hope of dissuading them from passing such legislation ?
6064
Mr. CoxNALLY. Yes, there was talk about it. and there was talk
about — suppose they pass it, you can still veto it. Maybe they can over-
ride the veto, maybe they cannot, but again, I do not think anybody
wanted to undertake that kin.d of a program, at that particular
moment in time.
Mr. Weitz. Was there any discussion of increased feed cost?
Mr. CoNNALLv. Of what?
Mr. Weitz. Increased feed costs.
Mr. CoNNALLY. Feed costs — Avell, I do not recall, except, no, I do not
recall.
Mr. Weitz. Are you aware that that was the sole justification, or the
principal justification mentioned by the Secretiiry of Agriculture in his
public decision?
Mv. CoNNALLY. Ycs, but tliis was an assumed thing, the rising costs
to the daii-ymen, as I mentioned earlier, ves, there is no question about
that.
Mr. Weitz. And in fact those costs had been rising all through the
previous year?
Mr. Conn ALLY. Correct.
Mr. Weitz. So would it be your conclusion that the decision by the
Secretary of Agriculture was not based on any new facts that had
come to light from an agricultural point of view, rather than perhaps
some new matters outside this — those areas?
Mr. CoNNALLY. I certainly cannot interpret, or try to read the mind
of Secretary — the Secretary of Agriculture, what he did. I do think
that the change in the parity level was, in my own judgment, was at
least substantially due to the activity on the Hill and it was a defensive
measure in order to retain some latitude in the law, and not permit
Congress to write a specific, mandatory level in there. And under the
law under which they were then operating, the Secretary of Agri-
culture could set the parity as low as 75 percent, as high as 90 percent,
and I think everybody concerned, particularly the Secretary of Agri-
culture, indeed, did not want to give up that type of latitude m order
to be faced with a bill that said it is going to be 85 percent, or 86, or 89.
Mr. Weitz. Did the President express his views at the meeting?
Mr. CoNNALLY. No, as a matter of fact, I do not remember that he
responded his views. He listened, as he frequently does during the
meeting, and he would turn to everybody and say, what do you think,
what do you think, what do you think, and sometimes he would express
an opinion, sometimes he would not. We normally discussed the
matters among ourselves. If he feels very strongly, he will obviously
make a comment, he will put in sometliing, but no decision was made
at that moment, and I was not present A\hen any decision ^yas made —
either the first time or the second time — so I cannot enlighten you
at all about that.
Mr. Weitz. At the conclusion of that meeting, a decision had not
yet been made, to the best of your knowledge?
Mr. CoNNATJvY. To the best of my knowledge, no.
Mr. Weitz. Or had at least not been communicated ?
Mr. Conn ALLY. That is correct.
Mr. Weitz. When did you first become aware of the change in the
decision ?
Ml. CoNNALLY. As far as T know, when I read it, T guess. I do
not recall any particular communication with respect to it.
6065
Mr. Weitz. Did anyone, between the time of this meeting on the
afternoon of the 23d, and the time on the 25th, when the decision was
publicly announced, indicate to you that in fact it was to be changed,
or was very likely going to be changed ?
Mr. CoNNALLY. Mr. Weitz, I cannot say that they did. I do not
recall anyone doing it.
Mr. Weitz. Did you talk about it with the President between the
time of this meeting and the 23d?
Mr. CoNNALLY. No, I don't believe I did.
Mr. Weftz. Did you talk with any other Presidential advisers
about it?
Mr. CoNNALLY. I do not think so. And again, let me say to you, this
was an extraneous matter, so far as I was concerned. It was an economic
matter and I was concerned with it to that extent. I had given my ad-
vice, and the next day I went on to something else. I was then within
6 weeks of being sworn in ; I was still trying to learn my lesson at the
Treasury. I was appearing constantly before committees, almost to
the day I was sworn in on February 11, and I have never had a more
strenuous, arduous time. So, frankly, I did not pay any attention to it.
I promptly forgot it, and as far as I know, no one communicated with
me about it until after the decision was made. I have no recollection
of it.
Mr. Weftz. Was not Mr. Jacobsen, a 25-year friend of yours, terribly
concerned about this, and wouldn't his cause at least have brought
it back to mind ?
Mr. CoNNALLY. Well, I do not even know that I even talked to him
after that.
Mr. Weftz. Between the 23d and the 25th, your recollection is that
you did not meet with Mr. Jacobsen ?
Mr. CoNNALLY. I do not recall that I did.
Mr. Weitz. Do 3'ou remember a meeting, either on the night of the
23d, or the night of the 24th, with Mr. Jacobsen and Mr. Nelson?
Mr. CoNNALLY. No.
Mr. Weitz. Now, the logs you have given us are logs that are kept
in your office, are they not ?
Mr. CoNNALLY. Yes.
Mr. Weitz. Any log, any meetings that you would either schedule
after hours, or schedule outside of your office, would not be reflected
in those logs?
Mr. CoNNALLY. That is correct, unless they were scheduled sometime
in advance, or unless by some means I told the office that I have got
an appointment at 8 tonight or 6 this afternoon, or am going so-and-so
for dinner, or something of that kind. It would not necessarily reflect
a chance meeting, or something of the kind, that occurred after I left
the office.
Mr. Weitz. So a meeting that you might have had outside of the
office on the night of the 24th, perhaps sometime late at night in the
Madison Hotel for example, would not be reflected in these logs?
Mr. CoNNALLY. If it had been scheduled it would, but if it had been
a chance meeting that came up at the last moment or almost by
happenstance, it would not be reflected on the logs.
Mr. Weitz. Now on the evening of the 24th, did you attend the
"Kickoff 1972" Kepublican dinner ?
6066
Mr. CoNNALLY. No, I did not. I^t me explain why I didn't. Simply
because T was a Democrat in a Republican administration, I had
made my decision that I was not goino^ to participate in any political
activities and I did not attend that dinner. I was asked to do so, and
I explained, and T did not attend it.
Mr. Weitz. Let's go back for a minute tx) the jieriod between the first
decision by Secretary of Agriculture on the Tith, and the second deci-
sion on the 25th. Do you recall meeting, or talking, to Bob Lilly during
that period of time ?
Mr. CoNNALLY. No, I do not.
Mr. Weitz. Do you know Bob Lilly ?
Mr. CoNNALLY. Yes, I casually know Mr. Bob Lilh\
Mr. Weitz. Can you recall how long you have known him, or when
the fii-st time it was that you met him ?
Mr. CoNNALLY. It was sometime when I was — during the period
when I was Governor of Texas, I would guess in the middle 1960's,
perhaps. At that time, I recall that he was an employee, or working in
some capacity I thought, with the Farm Bureau— now I do not know
whether it was the Texas Farm Bureau or the National Farm Bureau
Federation, but I am not even sure of that point.
Mr. Weitz. Li what connection did you meet him at that time?
Mr. CoNNALLY. T do not have the faintest idea. I just remember that
he was one of the men around the Capitol doing work before the legis-
lature and I have not the faintest idea where, or under what circum-
stances, I met him.
Mr. Weitz. Now, since that time, somewhere in the mid-t960's, when
you think you first came in contact with him. until, for example, you
had left the governorship, could you estimate for us how frequently
you would have come in contact with Mr. Lilly — say on a weekly or
monthlv basis, for example ?
Mr. CoNNALLY. I think — and again this is a pure guess just trying
to recall the years, how many times you have seen a casual acquaint-
ance, I would guess maybe T could count them all told, over a period of
since I have known him, on one hand, maybe five times over a period
of 7 or 8 years.
Mr. Weitz. You sav he was affiliated Avith some Farm Bureau?
Perhaps the Texas Farm Bureau ?
Mr. CoNNALLY. That is mv understanding, but I cannot be sure of
that.
Mr, Weitz. And you do not recall meeting with him, perhaps on a
number of occasions, in connection with certain matters that were then
]>endin£ri either before the legislature or the Texas administration?
Mr. CoNNALLY. Not unless he happened to he in a large group of
people. T have no recollection — can you elaborate what type of legisla-
tion ? I do not know; I am totally at a loss to know what you are re-
ferring to.
Mr. Weitz. Well, in jreneral, with regard to a number of pieces of
legislation — you do not recall for example meeting with him fre-
(|uently over numerous matters that might arise over a period of time?
Mr. CoNNALLY. No, but, again let me point out to you, you obvious-
ly— and I am not trying to read your mind — but you obviously have
some reason foi- asking the question, and I want to be as responsive as
I knov; how to be. At least once a month, sometimes every 2 weeks, as
6067
Governor, we would have proclamation day and I would go out in a big
reception room and we would sign bills and do all kinds of honors to
people. We would give awards, we would recognize every type of day,
we would recognize every type of queen, and we would be photo-
graphed ; we would have the room packed with people. It is entirely
possible that he could have been in the office or in a group like that on
several occasions without me having the faintest memory of it. But
so far as meeting with him about any particular legislation, I have no
memory of it.
Mr. Weitz. And if this happened, if he were to of met with you
several times a week, or several times a month, on a repeated basis
over a number of months, over a number of years in a fairly small
group or even just the two of you, you would probably recollect that?
Mr. CoNNALLY. Oh, I think I would,
Mr. Weitz. Now during the time between March 12 and March 25,
do you recall meeting Mr. Lilly at Page Airways in Washington, in the
Washington Airport ?
Mr. CoNNALLY. No, I do not.
Mr. Weitz. Do you recall, would your records show, where you were
either on the day of JSIarch 19 or March 20 of 1971 ?
Mr. CoNNALLY. Yes, I guess it would.
Mr. Weitz. Would you provide those two, that would be part of the
segment in late February. I think it would be useful to see all of
March.
Mr. Conn ALLY. All right, we will give you all of it, but I certainly
have no recollection of meeting him at Page Airways.
Mr. Weitz. Do you remember, perhaps a chance meeting, or passing
him and seeing him in the airport on that day ?
Mr. CoNNALLY. No, because frankly, I do not recall that I was out
there, and I do not recall I went anywhere during that period.
Mr. Weitz. You do not remember any trip out of Washington, let's
say between the 12th, which was the day of the first decision of the
Secretary and the meeting with the President on the 23d, for example ?
Mr. CoNNALLY. No, I do not. We can certainly check it though, and
I would be delighted to do so, but I certainly do not remember.
Mr. Weitz. Now I take it you do not go to Page Airways unless you
are actually in transit ?
Mr. CoNNALLY. I do not think I have, no.
Mr. Weitz. And normally when you travel, or during that period
when you were traveling, would you noi-nially travel by private plane?
Mr. CoNNALLY. Yes.
Mr. Weitz. If you are traveling on that day
Mr. CoNNALLY. Now by private plane ?
Mr, Weitz. As opposed to commercial aircraft ?
Mr. CoNNALLY. Yes.
Mr. Weitz. A private plane that would have in Washington de-
parted or arrived at Page Airways. So if your records would show that
you were in transit on one of those 2 days, in or out of Washington,
and you indicate that at least you, for some period of time, were in
Page Airways terminal ?
Mr. CoNNALLY. It might well do it.
Mr. Weitz. There would be no other way vou would come and go
during that period if you were traveling by air ?
6068
Mr. CoNNALLT. No — and not be there — no, I don't think so.
Mr. Weitz. Now you do not recall seeing Mr. Lilly. Do you perhaps
recall seeing a group of people, members and employees of AMPI
in the Page Airways sometime during that period, passing them
briefly, and perhaps seeing Mr. Nelson among them ?
Mr. CoNNALLY. During this time period ? No.
Mr. Weitz. Well, let me list a number of people, can you tell me
who you believe would be the person you would recognize most read-
ily, or would know the best, if 1 mention the following people : Kieffer
Howard
Mr. CoNNALLY. Who ?
Mr. Weitz. Kieffer Howard, Harold Nelson, David Parr, and Bob
Lilly; can you tell me who of those gentlemen you would think you
would know the best ?
Mr. CoNNALLY. I would probably recognize Dave Parr first; sec-
ondly, probably Mr. Harold Nelson ; third, Mr. Lilly ; and I am not
even sure I know Mr. Howard at all. perhaps I have met him, but the
name does not strike a chord with me at all.
Mr. Weitz. You would recognize Mr. Nelson over and perhaps
speak to hirn in a chance meeting, ahead of Mr. Lilly you think ?
Mr. CoNNALLY. Oh, yes.
Mr. Weitz. And you do not recall any such meeting held ever at
Page Airways during this period of time?
Mr. Cox N ALLY. No ; I do not.
Mr. Weitz. Did you ever, between the period of the 12th and the
25th — between the first decision and the second decision — ever com-
municate to any representative of AMPI your assessment that you
thought this decision would in fact change, and a new decision would
be made to raise supports by the administration ?
Mr. CoNNALLY. I don't recall that I did. no. As a matter of fact, I
do not think I talked to anybody excej^t Mr. Jacobsen in the communi-
cation that we have already talked about and during the period be-
tween the 12th and the 25th. I frankly had no real reason to be opti-
mistic about a change as far as the administration was concerned, be-
cause we had been down this road and the decision was made on the
12th to set the level at SI percent, and I frankly felt that if it was
changed at all it Avas going to have to be changed by the Congress at
that point.
Mr. Weitz. As you have testified, you do not remember meeting dur-
ing this period, either with Mr. Nelson, together with Mr. Nelson, Mr.
Jacobsen, Dr. Mehren ?
Mr. CoNNALLY. No.
Mr. Weitz. And if either of those gentlemen recall that, you think
that their memory will be faulty or perhaps yours will be faulty on this
point ?
Mr. Eckiiardt. Why don't you ask him to just speculate on that ?
Mr. Weitz. No; I am ti-ying to establish how firm his recollection is
for that ))eriod of time.
Mr. CoNNALLY. I do not know how firm my recollection is, and I am
not trying to be facetious Avith you — let me again point out to you that
I was working literally 18 hours a day, 7 days a week, and I mean 7
days a week. Saturdays and Sundays, trying to cover the giound.
trying to get briefed on what the Treasury was, eveiy available hour.
I took home — 1 had reading material ; T read as nnich as 10 hours every
6069
singfle night, on reports, documents, and Divisions of the Treasury,
what they did because of the constant work I was doing on the Hill in
testifying.
Now it is entirely possible that a chance meeting — I would not re-
member. But I am saying to you with all the sincerity that I possess
that I do not recall a meeting of this type with these people within
this time period.
Mr. Weitz. And as you say, you were actually taken by surprise,
you were actually pessimistic about the change during this period ?
Mr. CoNNALLY. I was, indeed.
Mr. Weitz. So your recollection is that you would not have commu-
nicated to any dairy people the optimism about the new decision ?
Mr. CoNNALLY. Not in this time j^eriod; I do not think there is any
basis upon which that I might have reflected optimism. And this, I
probably would have done, I certainly would have reflected optimism
with their chances on the Hill because every report we were getting
clearly indicated that the Congress was going to act. But I had no
reason to think that this was going to be translated into action by the
administration.
Mr. Weitz. Did there come a time during 1071 when you received a
communication from Mr. Jacobsen concerning some cash that he had
obtained from representatives of AMPI ?
Mr. CoNNALLY. In about the middle of June or the latter part of June
or the first of July, and T cannot be certain, I met with Mr. Jacobsen ;
he told me that the milk producers — and I cannot be more specific than
that because I frankly do not remember and I do not think he is more
specific than me — were prepared to start making contributions in 1971
to committees and to candidates for dinners^ — all types of activities
looking toward the election in 1972. He said then that he had available
$10,000 in cash to be given to any committee or any candidates that 1
might designate, and I said now Jake. I am not interested in that. I
said I am in this administration as a Democrat. I have refused to go to
any f undraising dinners ; I did not even go to the dinner for the Presi-
dent. I would not like to be in the position of trying to I'uise money for
Democrats against the Republicans as long as I am serving in a Repub-
lican administration.
By the same token, I wouldn't feel right about trying to suggest that
contributions be given to Republicans against members of my own
party. And I have made the decision tliat I am going to be as nonpoliti-
cal as I possibly can be and I am not going to take any interest in
party partisan politics, or party politics, during the foreseeable future,
and I interpret that to mean so long as I hold this office. And that was
the end of it.
Mr. Weitz. Did he tell you how he had obtained the money?
Mr. CoNXALLY. No ; he discussed no details and I was not sure he had
the money ; he just said that it was available, that amount, and that's all
he said and I stopped the conversation and I said what I did. It
ended it.
Mr. Weitz. Did you tell him to return the money ?
Mr. CoNNAixY. No ; I did not tell him what to do with it.
Mr. Weitz. Did he tell you where he was keeping the money?
Mr. CoNNALivY. No ; and he did not tell me he had it. He just said
tliere was $10,000 available to be jriven. I franklv didn't know whether
6070
he had it or whether somebody else had it, I had no way of knowing
that, I did not ask him, I did not want to know.
Mr. Weitz. Did he say it was in cash, or did he not specify (
Mr. CoNNALLY. As I recall, it was.
Mr. Weitz. Was it likely that $10,000 was available in cash — would
be available without it actually having been in the actual possession of
either Mr. Jacobsen or someone who was willing to turri it over to Mr.
fTacobsen ?
Mr. CoNNALL-Y, Well, I am not going to start speculating.
Mr. Weitz. What did you understand him to mean ?
Mr. Conn ALLY- Well I understood him to mean just what he said
that it was available.
Mr. Weitz. Wasn't that a a euphemism for I had the cash ?
Mr. Conn ALLY. Not necessarily in my mind, I do not know whether
he had it or whether he did not^ but I interpreted him to mean that
either he had it or he could get it.
Mr. Weitz. Why did he make such money available?
Mr. CoNNALLY. I think you would have to get a better answer from
him than from me. I am not sure but again I assume he thought that
it would do me some good, to get some credit for some Members of
Congress, if indeed they thought that I encouraged AMPI to give them
a contribution. That was my assumption; that was my interpretation.
Mr. Weitz. Of course it could have been easier for him to ask who
you wanted to recommend that AMPI or TAPE give sucli money ?
Mr. CoNNALLY. That's what he did. He said it is available for you to
designate. "V\nio do you want it to go to ?
Mr. Weitz. In cash, it was available ?
Mr. CoNNALLY. Yes, in cash ; that is what I understood, it was in
cash.
]Mr. Weitz. That would be separate for moneys that w^ere in a bank
account of some organization where he could write out a check from
any committee at any time ?
Mr. CoNNALLY. We didn't get into any of that at all.
Mr. Weitz. Well, from your experience, as an example, as head
of Democrats for Nixon, did you normally keep cash available for
certain purposes ?
Mr. CoNNALLY. No.
Mr. Weitz. And was it your experience tliat, for example, organiza-
tions that gave contributions of money to you, did they normally deal
in cash ?
Mr. CoNNALLY. No, in Democrats for Nixon we had a rule, and I
established it from the first day, I said there are certain things — one,
this is not going to be primarily a fundraising organization. I said 1
think there is going to be plenty of money in this campaign and we are
not going to do that. Now we will raise some, T do not mean we won't
attempt to do it in a ratliei- routine fashion, but second, I told eveiy-
body on the staff that I want to take no amounts of cash of any size
at all — I mean $2, or $3, or $5, or $10 that come in by mail, perhaps
yes, but no sizable casli contributions.
I said. No. 3, I want you to check every check that comes in and be
sure if there's any question about whether or not that check is a cor-
porate check; go back, write them a letter or call them on the tele]:)hone
and say: "We have your check; is it, indeed, a personal chock? We
don't want to get any corporate contributions."
6071
And those were things that I laid down and so far as I know we
followed them religiously during the whole campaign.
Mr. Weptz. Did Mr. Jacobsen, in this time frame, indicate whether
or not this $10,000 cash that was available was corporate funds ?
Mr. CoNNALLY. During this time he indicated that they were pre-
pared— that he was prepared — he brought up the suDJect again,
wanted to know whether we wanted a contribution from AMPI, that
he had $10,000 in cash or we could— and I said no, I do not want it. I
said I do not want that sizable contribution in cash and I said, as a
matter of fact : "Jake, you've got lots of problems in AMPI"— in the
meantime they had had a complete turnover of personnel and man-
agement had gone through a rather serious reorganization, all of which
I am not familiar with, but I do know that they had gone through —
tliey had tax problems. I know they had antitrust problems about that
time and I frankly said to him, "We would just prefer not to take any
money from you."
I would not say that there's anything wrong with it, necessarily, but
I just think it is the better part of wisdom for us not to have any cash
around.
And we took as you know, I assume, you can check the records, we
did take a $25,000 contribution from a Kentucky group which I believe
is SPACE, or their political arm, and we took a $6,000 political con-
tribution from the Missouri group and that is the total contributions
that I have any knowledge of from the milk industry.
Mr. Weitz. ok ; we will return to their activity later. In connection
with that, had Mr. Jacobsen ever made a similar offer to you before?
JNIr. CoNNALLY. No.
Mr. Weitz. Did he ever make a similar offer after the one in 1972 ?
Mr. CoNNALLY. No.
INIr. Weitz. Did you specifically tell him to return the money ?
Mr. CoNNALLY, No, I just said : "You do whatever you want with
these various funds. You know who your friends are." I said I frankly
do not want any part of it and I did not suggest one place that he put
a dime that he raised for anybody.
Mr. Weitz. Did he indicate whether he had intended the moneys to
go to either Democrats or Republicans?
Mr. Cox N ALLY. No.
Mr. Weitz. Did you know what he, in fact, did with the money ?
Mr. CoNNALLY. No.
Mr. Weitz. Do you know whether he, in fact, still has the money ?
Mr. CoNNALLY. No.
JNIr. Weitz. Do you maintain a savings deposit box in the Citizens'
National Bank in Austin?
Mr. CoNNALLY. No, I do not.
Senator Weicker. Am I correct, then Governor, in my understand-
ing of what you testified to so far that insofar as 1969 and 1971 are
concerned, the only mention to you of political moneys from AMPI,
from Jake Jacobsen, from Bob Lilly, George Mehren, Harold Nelson,
Dave Parr, was in this particular instance of May, June, July 1971,
insofar as the $10,000 availability of funds was concerned, otherwise
that you had no conversations relative to political contributions to
either the Committee To Re-Elect the President, to the Republican
Party, with any of these individuals in 1969 or 1971 ?
6072
Mr. CoNNALLY. Say, that except the contributions of these two
milk co-ops in 1972.
Senator Weicker. In 1969 and 1971, the only instance of any dis-
cussion of moneys, as between yourself and these individuals and/or
organizations, is this incident of May, June, Julv. whatever the specifc
date was, the $10,000 fund ?
Mr. CoNNALLY. That is absolutely correct in terms of specific money,
Senator. In the 1969 conversation, and I do not recall when it was, in
explaining to me what they were doing, they were going to set up a
political arm similar to COPE, to handle the contributions of the milk
industry, but this was a pure structural conversation dealing with the
method of providing political funds. It had nothing to do with con-
tributions to any individual or to parties for that matter.
Senator Weicker. Right. In 1971, and just so that we can be specific
on this point, the conversation of the $10,000 was a conversation that
Jake Jacobsen had with you ; is that correct ?
Mr. CoNNALLY. Yes, sir.
Senator Weicker. But at no time during 1971 were moneys dis-
cussed— political contributions discussed — between yourself and
others — Nelson, Mehren, Lilly, Parr, Milton Semer — is it?
Mr. CoNNALLY. I do not know. Can yon identify that?
Senator Weicker. The Washington attorney for AMPI.
Mr. Weitz. He is a partner of IMr. Jacobsen in his Washington of-
fice— or was, at that time.
Mr. CoNNALLY. I did not first recognize the name, I think perhaps
I have heard — no, the answer to your questions, that is absolutely cor-
rect. And I might even go further Senator and simply say that at no
time to this good day do I know, nor has anyone ever told me what they
contributed to whom, or by what means, or in what amount. I had
nothing to do with their political campaign contribution activities.
Senator Weicker. Let me just ask then, and let counsel continue in
a natural progression. But just while I am on the point, aside from
the May 1971 conversation with Jacobsen and Jacobsen repeating this
fact to you in 1972, was there any other discussion of political money
as between yourself and this group ?
Let me be specific, I have a list here, I put down a. list of all those
persons and organizations that appear in the milk hearing, the Asso-
ciated Milk Producers, Inc., AMPI, TAPE— political arm of AMPI—
is it CTAPE, is that correct? Harold Nelson, George Mehren, Bob
Lilly, Da\'id Parr, Milton Semer, who is the Washington attorney for
AMPI and a former law partner of Jacobsen, Joe Long, who is Austin
attorney for AMPI, Marion Harrison, Washington attorney for
AMPI; Murrav Cliotiner, Washinsfton attorney for AMPI; Pat
Hillings, Washington attorney for AMPI; Mid- America Dairymen.
Inc.; Gar^^ Hanman, executive vice president; ADEPT, political arm
of AMPI; Dairymen. Inc.; and SPACE, the political arm of Dairy-
men. Inc., discussion as to political monevs. witli the exception of the
contributions that vou have mentioned from SPACE — is it — from
what was the other one ?
Mr. Weitz. SPACE was the larger amount.
Mr. CoNNAixY. One gave us 25 and one gave us 6, frankly I don't
remember which it was.
Senator Wek^ker. And those two. and the discussion that have
come here with Jacobsen on the $10,000?
6073
Mr. CoNNALLY. That's all.
Senator Weicker. And that is it ?
Mr. CoNNALLY. Yes, sir ; that is it, and I might parenthetically saj',
Senator, a lot of those names you read off, I do not even know.
Mr. Weitz. Now, in that connection, do you recall any subsequent
conversations with Mr. Jacobsen, still in 1971, let us say in the fall of
1971 — again, raising either this matter or some related moneys that
he had obtained or made available, perhaps in the same way that
he had made the earlier $10,000 available to you ?
Mr. CoNNALLY. I do not — not only do not remember, it never hap-
pened. I not only do not remember it — I misstated myself. I not only
do not remember it, it did not happen.
Mr. Weitz. Now before we leave this, I just want to make clear,
when Mr. JacObsen raised this matter with you, did he make it fairly
clear this money was from AMPI ?
Mr. CoNNALLY. No ; frankly, I assumed it was from the milk people,
but to say it was from AMPI, I could not say.
Mr. Weitz. Well let me be more specific, I am not picldng between
the co-ops, but
Mr. CoNXALLY. I assumed it was milk money ; I do not recall that he
made that clear, but I think there was no doubt in my mind that that's
what it was.
Mr. Weitz. Did he make it clear, for example, that it was money
from TAPE, or from AMPI ?
Mr. CoNNALLY. No ; that is what I am saying.
Senator Weicker. If I might just ask — if I could hold the proceed-
ings for a minute. Governor, would you like a respite here, a coke?
[Off the record discussion.]
Mr. AVeitz. Shall we proceed back on the record ?
Mr. CoNNAixY. Certainly.
Mr. Weitz. Before we leave the period 1971. let me just ask you one
question. In connection with that discussion between Mr. Jacobsen and
yourself, was there any reference in that discussion to the earlier milk
price suppport decision ?
Mr. CoNNALLY. No.
Mr. Weitz. When he mentioned the availability of the $10,000 cash?
Mr. CoNNALLY. No.
Mr. Weitz. Would you provide to us, in addition to the periods you
previously mentioned, the log or logs that would identify the day —
possibly identify the day in which Mr. Jacobsen talked to you about
that matter ?
Mr. CoNNALLY. I would be glad to.
Mr. EcKiiARDT. Who talked to him ?
Mr. Weitz. When Mr. Jacobsen talked to him. I would suggest you
might start as early as May 1971, and perhaps go forward about 2 or
3 months until you ai*e reasonably sure that you have covered the
period.
Mr. EcKHARDT. I am quite sure that the only notation that would
appear on the log would be the name of Jacobsen.
Mr. Weitz. That would be sufficient. If it does not refresh your
recollection any further, then just provide us with those logs and we
will review them.
Now did there come a time in early 1972 when you did, in fact, meet
again with Mr. Jacobsen and perhaps others from AMPI ?
6074
Mr. CoNNALLY. Yes.
Mr. AVeitz. Would you like to tell us about that meeting?
Mr. CoNNALLY. This meeting occurred, as I recall, on March 16, 1972.
Mr. Jacobsen and Mr. Harold Nelson and Dr. George Mehren came
into my office and the meeting was for the purpose, really, of telling me
about the change of management in the organizational change of
AMPI. But, primarily, to introduce to me Dr. George Mehren ; and in
the process, it was a meeting in which I asked them how they were
doing, what their problems were, and as I recall they started off and
they had a number of problems. We finally got into that. They talked
about — if my memory serves me correctl}^ — their marketing practices,
this was a problem that was concerning them.
They talked about the pricing of the formulas for pricing buttered
cheeses and so forth, all of which was so complicated I did not quite
understand it. I never quite understood it and they talked about the
antitrust suit that had been filed against them, I believe, in Chicago —
at least it was in the Midwest. These are the only — there might have
been one or two other things, I do not recall, but these are the subjects
that were discussed at that particular meeting.
Mr. Weitz. In what connection were they discussed ?
Mr. CoNNALLY. I would say in the connection of just being an in-
formative type of thing, just informing me of what some of their prob-
lems were, and telling me what some of the difficulties were with which
they were dealing and that was about the extent of it.
Mr. Weitz. This was the fii^t time you had met Dr. Mehren ?
Mr. CoNNALLY. I believe it was — it was the first time that I recall
ever having met him. Now I will let it go at that. I am sure he would
be offended if, indeed, I had met him somewhere earlier and did not
remember it, but I believe this was the first time I had ever met him.
Mr. Weitz. Why did Mr. Nelson accompany him ?
Mr. CoNNALLY. Why ?
Mr. Weitz, Yes.
Mr. CoNNALLY. Well, I really do not know.
]Mr. Weitz. Dr. Mehren had replaced Mr. Nelson as I understand it ?
Mr. CoNNALLY, Yes ; that is correct, but I understood — then I asked
in as courteous a way as I knew how, what the structure was, and they
simply explained that — well. Dr. Mehren had become the head of the
organization — I do not know what you would call him but Mr. Nelson
was still a consultant I believe, or a lawyer or something for them,
and he was still going to be active with them, so that was the explana-
tion they gave me.
Mr. Weitz. Were there any other matters discussed that you recall ?
Mr. CoNNALLY. No ; I do not recall any.
Mr. Weitz. Now, in connection w4th raising these matters, did they
ask for your help or ask for any specific action on your part?
Mr. CoNNALLY, No ; I do not recall that they did. I do not really be-
lieve that that was the purpose of the meeting.
Mr. Weitz. Ix>t us take them one at a time, for example, marketing
practices — that would be within the jurisdiction of the Secretary of
Agriculture ?
Mr. CoNNALLY. Right.
Mr. Weitz. Did they ask you to call the Secretary at that time, Butz ?
Mr. CoNNALLY. No ; and I did not.
6075
Mr. Weitz. Do you know whether they ever contacted Secretary
Butz directly ?
Mr. CoNNAi.LY. Oh, I am sure that they were, but I do not know
whether they specified that.
Mr. Weitz. Is there any problem that was then a particular problem
such as the previous year ?
Mr. CoNNALLY. No, no, no, and I miofht parenthetically add there
that so far as — if there was indeed a problem with respect to support
prices in 1972, I was unaware of it. I was not a participant, really, in
any of the discussions relating to it, and so I assumed that there really
was no <rreat problem in connection with it.
Mr. Weitz. Now you mentioned tlie antitrust suit, do you know any-
thing further about that antitrust suit ?
Mr. CoNNALLY. No ; they pointed out that they were really very ir-
ritated about it, obviously, and expressed the thought that they
thought the Departuient of Justice had gone too far, that they were
irritated, that they thought it was aoing to have political repercussions
all through the Midwest, and I said, "Well, I am sorry to hear it. I am
sure the suit was not filed unless the Justice Department felt there
was ample justification for it." And they said, "Well, nevertheless, we
are very upset with it, and we think it is going to have a very damag-
ing effect."
Mr. Weitz. A damaging effect upon whom ?
Mr. CoNNALLY. Politically, upon the Republican Party.
Mr. Weitz. Wliat about on the farmers? Oi' farm co-ops?
Mr. CoNNALLY. Obviously, and on farm co-ops, but again I don't re-
call the details. In the process of saying tliat they didn't think that
the suit was justified, they said they thought the Justice Department
moved too quickly, that they thouaht that if, indeed, here were prac-
ices that they could have known about, or been advised of, the}- prob-
ably could have corrected them without the lawsuit. But it was done
then, and I said, "It is done and there's nothing I can do about it,'" but
I do not remember.
Mr. Weitz. Had they been in contact with Mr. Mitchell up to that
point ?
Mr. CoNNALLY. I do not recall that they did, but I called him —
either that day or at a later time and of course in the meantime he
Avas, as I recall at the time of that meeting, he was no longer Attorney
General. I called him and simply reported to him the substance of
the meeting, with respect to the antitrust things, and I said I thought
they were quite irritated, and that he ought to, from a political stand-
point, he ought to consider how to work around it.
Mr. Weitz. Did you call Mr. Mitchell in the presence of those
three gentlemen ?
Mr. CoNNALLY. I do iiot think so. If I did, it would have been highly
unusual.
Mr. Weitz. Why ?
Mr. CoNNALLY. Well, I just normally did not do that. I would say
it is possible that I did, t do not recall, but I just certainly don't
normally do that.
Mr. Weitz. Did they ask for— did they raise the issue of any prior
commitments that had been made by the dairy co-ops to the Republi-
can Party or to the Committee To Re-Elect?
Mr. CoNNALLY. No.
6076
Mr. Weitz. Were you aware of any such commitments at that time?
Mr. CONNALLY. No.
Mr. Weitz. Who arranged the meeting?
Mr. Conn ALLY. I cannot be sure, but I assume Mr. Jacobsen prob-
ably did.
Mr. Weitz. Did they mention any contacts that had be«n made
between Mr. Kalmbach and representatives of the dairy industry?
Mr. Conn ALLY. No.
Mr. Weitz. And they did not discuss, in any way, the question of
whether they should go forward or not go forM'ard on political con-
tributions before April 7 ?
Mr. Connally. I do not recall any discussion of contributions.
Mr. Weitz. What did Mr. Mitchell say ?
Mr. Connally. I do not recall. He took the information; he
obviously did not know a great deal alx)ut it. I think he grunted and
said, thanks very much. That was about the extent of it.
Mr. Weitz. Well, he was a former Attorney General; he was then
deeply involved, of course, in chairman of the effort to reelect the
President. Representatives of this large dairy co-op had said an anti-
trust suit would ha^e serious repercussions on the Republican Party.
Did you either suggest or did you take Mr. Mitchell to believe that it
would be prudent to take action to try to alleviate that problem ?
Mr. Connally. No, no; I did not. I have been in politics too long
to know that you cannot — when action like that is taken, you are going
to obviously offend somebody, you do the best you can to alleviate the
political damage, but 3^ou go on. There is no way you can do anything
-about it, and I did not suggest to him that we take any action at all. I
said 1 am simply telling you what I've been told, and you should use it
for your own guidance.
Mr. Weitz. Well, what was suggested, or what do you think he con-
templated with regard to alleviating the political impact?
Mr. Connally. I have no earthly idea. I will not speculate on what
he might have done. If it had been me, I Avould simply, if you are asking
me what I might have done, if I were running the campaign, I would
have probably contacted the head of the campaign effort in each one of
those States, and said the Government has taken some action here that
is irritating these farmers, we have to try to offset it with some aggres-
sive work in explanation — explain it the best you can, get out and try to
tell them that the Government action was justified and certainly was
not an effort to prosecute them or to treat them unkindl3\ but after all,
they have a responsibility for upholding the law, and that would of
been my general approach. But I certainly have no way of knowing.
Mr. Weitz. Was that in effect what you told him ?
Mr. Connally. No.
Mr. Weitz. Do you know whether Mr. Mitchell told them that?
Mr. Connally. No, I do not know that he met with them ; I do not
know what he did.
Mr. Weitz. You don't know whether in fact
Mr. Connally. I do not know whether he even talked to them.
Mr. Weitz. Were 3^ou aware of an Internal Revenue Service audit
then in progress of the predecessor of AMPI, MPI for the year 1968 ?
Mr. Connally. I think that might be the day I learned about it :
T am not sure.
Mr. Weitz. From whom ?
6077
Mr. CoNNALLY. From Mr. Jacobsen,
Mr. Weitz. What did they say about it ?
Mr. CoNNALLY. He, as I recall when that meeting was over, he
stepped back in for a minute — ^it was either there, and I cannot be
positive if this was the occasion, but about that period of tirae in any
eA^ent — he said, he asked me. He said : "We have some problems with
IRS dating back to the Johnson days. We would like to hire INIarvin
Collie to represent us; he is the best taxman we know of anywhere
close to us. We would like to hire him if you have no objection."
Mr. Weitz. Marvin Collie is who ?
Mr. CoNNALLY. Marvin Collie is the head of the tax department
of Vinson, Elkins, and was one of my partners prior to my disassocia-
tion from that firm, and that is why he obviously asked me ; he said,
"We would like to hire him if you have no objection."
I said, "No, Jake, I have no objection. You hire whomeA^er you
please." And that was the extent of it.
Mr. Weitz. Did either you or Mr. Collie write a letter to the Dis-
trict Director of the IRS in Texas in connection with this matter ?
Mr. CoNKALLY. I certainly did not. He might well have.
Mr. Weitz. Did 3'ou discuss this matter with him ?
Mr. CoNNALLY. No, I did not.
Mr. Weitz. You never discussed this matter with Mr. Collie ?
Mr. CoNNALLY. I since— I have since then, yes, since this business
came up, I asked him what have Ave, indeed, done? I remember the
conversation with Jake Jacobsen ; I said, "Did they employ you," he
said, "Yes," and I said, "Well, what happened ?"
He said, "Well, I spent a considerable time going into it." I told
him that I thought they had no defense to plead nolo and get it over
Avith, if that is what they did, and I said, "What did you charge
them ?" and he said, "I charged them $3,500."
Mr. Weitz. Now I am not quite clear. When did you discuss this
matter Avith Mr. Collie ? The first time you discussed it Avith him ?
Mr. CoNXALLY. I discussed it Avith him this Aveek.
Mr. Eckhardt. I am sure it has been within the last 2 or 3 days.
Mr. CoNNALLY. It Avas just before we came up here.
Mr. Weitz. Why did you discuss it Avith him ?
Mr. CoNNALLY. Just simply because I was coming up here and I
Avanted to be sui-e that I kneAA' AA^liat had happened because of the con-
A^ersation Jake had asked me about, saying they had some problems
Avith IRS and if I had no objection they AA^anted to approacJi Mr. Col-
lie, so I later asked him about it after I got out and after this came
out, I asked him about it and said, "Did they indeed employ you?"
Mr, Weitz. I am not quite certain — there were a lot of matters that
obA'iously you could have asked various people that might be covered
in this interview. For example, did you go back to Mr. Jacobsen in the
last fevA' Aveeks and discuss matters that might come up in this inter-
view?
Mr. CoNNALLY. No.
Mr. Weitz. Why not ?
Mr. CoNNALLY. Well, I have not seen him.
Mr. Weitz. Did you try to contact him ?
IMr. CoNNALLY. No. I Avent to Europe and I have not contacted him
since I have been back. And, responding to the subpena, Avell you asked
in the subpena for one thing, for us to bring any data that we had, and
30-337 O - 74 - 15
6078
1 just wanted to be sure, and particularly this information about
any — let me see what the wordino; is — yeah, any investij^ation or audit
conducted during lOTl or 1072 of the Internal Revenue Service of
AMPI or MPI.
iMr, Weitz. I understand. At the same time, the subpena also covers
a number of other matters in Avhich other persons to whom you have
talked, for example. Dr. Mehren, Mr. Nelson, and Mr. Jacobsen, by
3^our testimony, were also related to these matters. Did you discuss any
of those matters with an}^ of those individuals ?
Mr. CoxxALLY. Xo. I have not talked to Dr. Mehren, I have not
talked to Mr. Nelson, and T have not talked to Mr. Jacobsen in about
2 weeks.
Senator Weicker. There is one thin*! I am a little bit confused on
and before we get away f i-om the meeting; of March, with ]Mehren, Nel-
son, and Jacobsen, do I understand that during the course of this meet-
ing that 3'ou did or you did not talk to John Mitchell ?
Mr. CoxxALLY. Senator, I don't recall. I talked to John ^Mitchell
that day, or the next day, and I frankly do not know. I cannot say
with certainty at what precise hour (^f the day I talked to him. I do not
know. When he asked me if I talked when they were there, my response
was, I don't think so. it would have been unusual for me to do it with
them there, but it is possible that T did simply because T wa.s relay-
ing— merely relaying — information to him. I did not suggest any ac-
tion or ask him to do a thing. T merely was advising him of what I
thought was information that he 7*eally ought to have.
Mr. Weitz. But the content of the call to Mitchell, regardless of
when it v.-as made, did relate to the matters which were raised to you
by these gentlemen at their meeting?
Mr. Coxx^ALLY. Yes, that is correct. The antitrust aspect of it.
Senator Weicker. The antitrust aspect of it?
Mr. CoxxALLY. Yes.
Senator Weicker. Entered any discussion of contribution ?
Mr. CoXXALLY. No.
Senator Weicker. Any discussion of the IKS audit ?
Mr. CONXALLY. No.
Mr. Weitz. Now, I am still not quite certain ; for example, you were
calling not the then current Attorney General, but the former Attor-
ney General who was chairman — as I recall— of the Committee To
Re-elect; were you not calling him to discuss these matters and the im-
plications they might have on the reelection effort and the finance
effort ?
Mr. Cox X ALLY. No.
Mr. Weitz. "^^Hiat was the purpose of your call ?
Mr. CoxxALLY. Solely to tell him what I had been told.
Mr. Weitz. That these people might be offended, or irritated by the
antitrust suit ?
Mr. CoxxALLY. Right.
Mr. Weitz. And what effect did that have on the campaign ?
Mr. CoxxALLY. The farmere that they represented were obviously
irritated and I wanted him to know it.
Mr. Weitz. Well, who had control, for example, or do you know
who had control, for example, of the political funds of TAPE?
Mr. CoXXALLY. NOv
6079
Mr. Weitz. Would it be the f armere, do you know, or would it be the
officials ?
Mi\ CoNNALLY. I do uot know. Now let me be sure you understand.
I did not discuss any political contributions with John Mitchell in
any way in this conversation.
Mr. Weitz. Did you discuss mattei-s in such a way so that the reason-
able implication or understanding would be that that would be a
natural consequence ?
Mr. CONXALLY. No.
Mr. Weitz. And you never discussed with these gentlemen at the
meeting with them with Mehren, Nelson, and Jacobsen, the possibility
or the likelihood that the GoA-^ernment would go slow on the antitinist
suit, or the IRS, or anything of that nature ?
Mr. CoNNALLY. No, sir.
Mr. Weitz. And you did not discuss with them the timing, the ad-
visability, of waiting, perhaps until sometime later in the year to press
for higher price supports in the milk ?
Mr. CoNNALLY. No; as I recall, there was no problem with price
supports with milk and I am not even sure we discussed it. I guess we
did, but it certainly was not a matter of such importance that he raised
it with me.
Senator Weicker. At any time that you talked to Jake Jacobsen,
not necessarily in the meeting that we're discussing now, but any time,
did you indicate to him that you had m.ade efforts relative to the price
support situation within the White House on their behalf, at any time
in your discussion with Jacobsen, in other words, did you for lack of
a better term take credit for the fact that the price supports had gone
up and this was due to conversations that you had had with various
individuals in the administration ?
Mr. CoNNALLY. No, Senator, I was not that presumptuous. The
conversations — I had just as many conversations about the level of
price supports before March the 12th in which, obviously, I had dem-
onstrated no influence as I did after March the 12th, and I do not
think my position weighed very heavily, very frankly, one way or the
other, because I did as much to say that it was a mistake to set it at
81 percent of parity before March the 12th, as I did after March the
12th. And between that and the 24'th, and I must say to you again,
that it certainly was not due to any advocacy of mine that I think the
parity was changed. I think it was a defensive reaction to what was
happening on the Hill.
Senator Weicker. All right, but the only point that I make is, let
us assume that you say it is correct that it was not an advocacy of yours
that resulted in the change in supports, but did you indicate to Mr.
Jacobsen that your advocacy was responsible for a change ?
Mr. CoNXALLY, No, no; I really have a little more humility than
that. Senator, because I could not in good conscience take credit for it.
Mr, Weitz. In that same vein, did you ever, for example, try to im-
part the impression to or tell Mr. Jacobsen or any of the others of
AMPI, that their contributions would have that effect, if not your
advocacy ?
Mr. CoNNALLY. No.
Mr. Weitz. Now, just before we leave this March 16 meeting — you
may have a copy — but would you look at the log for that day and just
so that the record is dear, does that refresh your recollection that the
6080
call you made to John Mitchell to discuss this matter was, in fact, that
same day?
Mr. CoNNALLY. It may, or it might not have been. Now, during this
period it could of been anything, this might or might not have been
the call, I frankly do not know.
Mr. Weitz. Were you in touch with Mr. Mitchell frequently durmg
that period, or as much as once a day ?
Mr. CoNNALLY. No ; oh no, not once a day, but I assume, and it is a
rash assumption that that probably was the time I talked to him about
this matter, but that may not be correct.
Mr. Weitz. But it is your recollection that that day, or shortly there-
after, you did call Mr. Mitchell about this?
Mr. Conn ALLY. Sometime in that time frame.
Mr. Weitz. Now I would like to move to the period of August 1972,
and I think you provided the committee witli certain documents, and
perhaps we ought to identify these and enter these fomnally on the
record.
[Whereupon, the documents referred to were marked Connally ex-
hibits Nos. 3 and 4 for identification.^]
Mr. Weitz. And then exhibit No. 4 is a letter dated August 15, 1972,
it is a letter dated to you and it was from Joseph J. Westwater, vice
president of Dairymen, Inc.
Mr. Connally. That is correct.
[T^Tiereupon, the document referred to was marked Connally ex-
hibit No. 5 for identification.^]
Mr. Weitz. And finally, exhibit No. 5 is a letter dated August 17,
1972, dated to you at the Madison Hotel as is exhibit No. 4 and that is
signed by Gary Hanman, senior vice president of Mid-America Dairy-
men, Inc. ?
Mr. Connally. That is right.
Mr. Weitz. Now, the log for August 2 indicates that at 9 p.m. you
were scheduled to meet at the Madison Hotel suite with tlie milk pro-
ducers, and in particular it indicates Ben Morgan, Jr., of Dairymen,
Inc., and Joe Westwater of Dairymen, Inc., and then underneath that
is written coordinator of the Central American Co-op Federation,
Gene Baldi, B-a-1-d-i, Mid-America; Gary Hanman, Mid- America;
and George Mehren, Ass., pei-haps Associated Milk Producers, Inc.
Now, do you recall a meeting with those gentlemen on that day and
at that time ?
Mr. Connally. Yes ; I do. I think they were all there.
Mr. Weitz. Who arranged that meeting?
Mr. Connally. I do not recall, I frankly do not know.
Mr. Weitz. Was Mr. Jacobsen present at that meeting?
Mr. Connally. It does not indicate that he was.
Mr. Weitz, Do you racal] whether he was?
Mr. Connally. I do not think he Avas.
Mr. Weitz. Had you ever met any of these gentlemen before that day,
other than, I sup]:)Ose you said you had met Di-. Mehren ?
Mr. Connally. Yes ; I had met Dr. Mehren, I am not sure I had.
Mr. Weitz. You are not sure you had wliat ?
Mr. Connally. Met the gentlemen before.
Mr. Weitz. I see, so if it was not Dr. Mehren who had set up this
meeting, it would ha\e had to be
1 See pp. 6094 and 6095.
2 See p. 6099.
6081
Mr. CoNNALi.Y. It might well have been Jake, I do not know; it
might have been Dr. Mehren, I do not know.
Mr. Weitz. Was he in the habit of setting meetings and then not
attending those meetings with the gentlemen ?
Mr. CoNNALLY. No ; I would say most of the time he would set them
up, he would attend them — let me just simply say, I do not know and
I do not want to speculate. The meeting occurred, there is no question
about that.
Mr. Weitz. What was Mr. Jacobsen's function or relation to the
Democrats for Nixon at that time ?
Mr. CoNNALLY. Not any, really, he had an office across the street
and he was, from time to time, helpful to us in trying to arrange of-
fice space or trying to guide some of our people to get furniture and
things of this type, but he had no official connection with the campaign
as svich.
Mr. Weitz. And what was your official capacity at that point in
connection with the Democrats for Nixon ?
Mr. CoNNALLY. I think I had the title of chairman.
Mr. Weitz. In that position, normally would you characterize for
us, who you would norma,lly meet with and for what purpose in con-
nection with ^vour functions as chairman of Democrats for Nixon '^
Mr. CoNNALLY. Mr. Weitz, I obviously would meet with all types
of groups that I thought could be helpful in the campaign, could be
influential in the campaign, I met with — I traveled a great deal, I
made speeches, I met with editors, I met with publishers, I met with
potential donors, I met with anybody that was politically — I met with
Governors, I met with different factions of parties, I met with pri-
marily Democrats that I thought I could entice into supporting the
President.
Mr. Weitz. Can 3^ou recall in what category these people would fall,
or for what purpose you met them ?
Mr. CoxNALLY. Now, this was obviously a meeting at their request,
they came and talked to me and again about their problems and they
talked about — they got into such detail on them again — going back
to the marketing practices, where they were complaining about the fact
that they were doing a terriffic job for their members who were pay-
mg their dues, as I recall, but the nonmembers, whose milk bills were
processeci, were getting a free ride to the extent of about — T do not
know 15 or 18 cents a hundredweight for the milk they sold, so it is
the same old argument that they had in the unions where the unions
take the position that the benefits that they derive from unionization
apply to everyiwdy and they tliiuk that the nonmembers ought to pay
the freight. This is precisely the position that they were taking.
They also talked, again, about the formula on the pricing of cheese
and on butter and on whey and it frankly got so complicated that I
just said, "Well you all write me a letter about it." They were really
not complaining — let me put the meeting in context. I said, "I do not
know what I can do about this*' — all this — and they said, "We really do
not want you to do an^^thins: about this, we want you to be informed,
we are getting on very well with the Department of Agriculture, we
do not have any real problems, but we want to come and see you and
talk to you about it," and I said, "1 hank you very much.''
6082
Mr. Weitz. How long diti the meeting last, do you recall approxi-
mately ?
Mr. CoNNALLY. I would guess 45 minutes.
Mr. Weitz. Was the purpose of the meeting for you to meet with
them and listen to their status report of the dairy industry ?
Mr. CoNNALLY. Yes.
Mr. Weitz. Was the purpose also perhaps to see Avhether they were
interested in making political contributions ?
Mr. CoNNALLY. Not particularly.
Mr. Weitz. Was that one of the purposes of the meeting ?
Mr. CoNNALLY. Not really, not at all. I was, at that point, a little
skeptical as a matter of fact, when we got the first donation from the
political arm of the group in Kentucky. I believe it came in first, we
had a meeting in the office to debate whether or not we ought to even
take it.
Mr. Weitz. Why was that ?
Mr. CoNXALLY. Simply because there was already a great deal of
talk about the milk producers' contributions to the campaign and there
wasn't anything wrong with it, it was i:)erfectly open and above-
board, they have every right to contribute, just as every labor "union
has a right to contribute to campaigns, there was not a thing wrong
with it, but again we are trying to be like Caesar's wife as much as we
could and we finally said, "We have no justification for not taking it,
let's take it."
So the meeting was not for the purpose of trying to get campaign
contribution funds.
Senator Weicker. But, was the subject of campaign contributions
discussed ?
Mr. CoNNALLY. Senator, I do not even recall it being discussed, no.
Senator Weicker. It seems rather extraordinary that it was not dis-
cussed. If I am not mistaken, at this time, you were in your official
function, your official political function '-;
Mr. CoNNALLY. I was, I certainly did not bring it up, I was not look-
ing for contributions from them. I really was not trying to get one
here. We had three different groups represented, these were not the
people — these were the technicians, the fellow who did most of the
talking was Westwater and he is an economist, I believe — let me see
that letter from him, and. he is the vice president of special programs —
I think he is an economist. And substantially, the whole meeting was
talking about these highly detailed things until frankly I got inun-
dated with information that I could not quite assimilate and I finally
said to them, "Well look, you all are getting over my head with all
these details I cannot remember. If you Avould be kind enough to send
me a letter about it and I Avill have it here, and thank you very much,'^
and that was about it.
Mr. Weitz. Noav, I notice in the exhibit No. 4 from Mr. Westwater,
he begins by saying "On August 2d, Ben Morgan, Dave Parr and I,
from Dairymen, Inc.. and Eugene Bakli and Gary Ilanman of Mid-
America, Inc.. met with you."'
Do you remember Dave Parr's ptvsence at that meeting?
Mr. CoNNALLY. Yes. I do. I sure do. his name is not on the list, is it?
Mr. Weitz. No.
Mr. CoNNALLY. But he was there.
/
6083
Mr. Weitz. Is it likely that Mr. Parr set up the meeting ?
Mr. CoNNALLY. It could be, it is possible, but I do not think so. I
do not recall Dave Parr ever settings up a meeting,
Mr. Weitz. Now you mentioned, in response to a question a while
ago, that you were in a crowd with Dave Parr, Harold Nelson, and
Bob Lilly, that Dave Parr would be the one you most readily recog-
nized, when did you first meet Dave Parr ?
Mr. CoNNALLT. Oh, 5 or 6 years ago, but I have seen him, very
frankly, primarily on the Hill up here, off and on the last couple of
years, I came up here a very great deal as you know and in my appear-
ances before congressional committees, I would say Dave Parr was
pretty active around the Hill. I ran into him in the halls and outside
of offices and so forth.
Mr. Weitz. Is he essentially a lobbyist ?
Mr. CoNNALLY. I do not know what he is.
Mr. Weitz. Well he was an agricultural economist though as Mr.
Westwater was ?
Mr. CoNNALLY. I do not know, I do not know that much about his
background. One of the reasons I would recognize him is that he is
a pretty distinctive looking fellow.
Mr. Weitz. And neither Mr. Parr nor Mr. Hanman, nor you or
anyone else in the meeting discussed political contributions ?
Mr. CoNNALLY. I do uot recall that we did, no.
Mr. Weitz. Do you recall discussing
Mr. CoNNALLY. Let me — when you say a political contribution, they
might have said, well I see you are in operation, we might want to be
helpful to you — I might have said well that would be great, thank
you — some passing
Mr. Weitz. Would you have initiated that conversation ?
Mr. CoNNALLY. No, I would — did not.
Mr. Weitz. Would you, for example, have suggested that — well, let
me start it this way— did a party take place, or some type of reception
for the President in late September of 1972, for which you were respon-
sible, or the sponsor ?
Mr. CoNXALLY. In 1972 ?
Mr. Weitz. Late September 1972.
Mr. CoNNALLY. T\niat kind of reception ?
Mr. Weitz. Some reception or dinner honoring the President?
Senator Weicker. A fundraising dinner.
Mr. CoNXALi/Y. Fundraising ?
Senator Weicker. In other words. Governor, was there a fundraising
function sponsored by the Democrats for Nixon in September, which
function would have been under the auspices and direction of you?
Mr. CoNXALLY. Not that I am aware of. Tlie only one that I am
aware of is a reception that I had at tlie rancli and it was in that time
frame. I have forgotten the precise date, but that was in Sei)tcmber.
Mr. AVeitz. Did the President attend that ?
Mr. Coxx^ALLY. Oh, yes, it was for him.
Senator Weicker. Was it a fundraiser?
INIr. CoxxALi.Y. No. I would not classify it as a fundraiser. We had
made no attempt to raise funds at all. A lot of the people who were
there, indeed, contributed and as a matter of fact, I suppose nearly
all of them had — so. in that sense, it was not a fundraiser. We did not
6084
mention funds. T never heard the word mentioned. There was no pitch
made for funds, there was nothing.
Senator Weickek. But the makeup of the guests Avas that they were
contributors ?
Mr. CoNNALLY. No, not all of them were contributors of money, no.
Senator Weicker. I am just trying to distinguisli, in other words,
the fact that as I understand there was no charge for being there ?
Mr. Co-NTNALLY. No, that's correct.
Senator, let me posture the dinner in terms of what we were trying
to do with it. The dinner was given in the President's and Mrs. Nixon's
honor and we invited Democrats for Nixon from aroimd the country.
The purpose of it was to simply say to the Democrats who were coming,
and these whom we hoped we could prevail upon, to join us in Demo-
crats for Nixon that you are not going to be a stepchild, that indeed
we want you. The President wants your support. You are not going to
be completely unknown. You are going to be treated like anybody else,
in effect, that is the whole thrust of the meeting.
So people who were there were not just people who had contrib-
uted money. We invited a great many people. We iniated little Dave
Lukens, who is a little Jewish rabbi, 26-year-old, from New York and
he was there, of course, he was working with youth groups. Mayor —
the former Mayor John Collins was there, former mayor of Boston
who had contributed no money to my knowledge. A great many people
like this from all over the country were there, but the}' were Democrats
who had, in some way, been instrumental in trying to help us set up the
Democrats for Nixon organization. It was not a fundraising affair.
Senator Weicker. Were any of the gentlemen on that log there?
Mr. CoNXALLY. I think there were a couple of them there.
Senator Weicker. Do you know whether any of these individuals
are Democrats or Republicans, or what have you ?
Mr. CoNNALLY. I think they were all Democrats, as far as I know, we
tried not to invite — I do not know, we might have had a Republican or
two there, I do not know, but we tried to make it Democrats and we
tried, frankly, to keep well-known Republicans out of the Democrats
for Nixon organization so it would not look like just a cover of some
kind. We really wanted it to be an authentic organization to try to at-
tract disenchanted Democrats in support of the President, but who
are not prepared to go all the way and say I am a Republican, that wg-s
the thrust of it.
Mr. Weitz. Now at the meeting on August 2, would you have men-
tioned, or do you remember mentioning this reception and the possibil-
ity that these people might want to contribute money and attend that
meeting and that reception for the President ?
Mr. CoNXALLY. No invitation to that meeting was tied to a con-
tribution of one thin dime.
Ml'. Weitz. Well, rather than tied to, would you have perhaps men-
tioned that a reception was to be held in late September for supporters
of the President?
Mr. CoNNALLY. No ; I do not think I mentioned it to them.
Mr. Weitz, Now you say that tliese two, and the cooperative was
repi-esented by these gentlemen, two cooperatives, throusrh their poli-
tical arms, each donated certain amounts. I believe SPACE contributed
$25,000 to your recollection, and ADEPT contributed $6,000?
6085
Mr. GoNXALLY. Right.
Mr. Weitz. Do you know when SPACE made its contribution, its
$25,000 contribution ?
Mr. CoNNALLY. No; but it was very, very early, I think it was about
the middle of August.
Mr. Weitz. Could it have been August 2 ?
Mr. CoNNALLY. No ; I do not think it was that early.
Mr. Weitz. Well, if the reports of SPACE to GAO indicate that it
made a contribution on August 2 of $25,000, would that refresh your
recollection ?
Mr. CoNNALLY. Perhaps it was — well let us look at the^
Mr. WETFz.^Why don't you provide the reports that you have ?
Mr. EcKHARDT.'^ You have the reports filed with GAO there and it
would show the dates on the reports. As far as the Democrats for Nixon
are concerned.
Mr. Weitz. The record should show that the report by Democrats for
Nixon to GAO, dated September 8, 1972, indicates on page — on sched-
ule A that on August 10, 1972, a contribution for $25,000 was received
from the trust for SPACE, located in Louisville, Ky.
Mr. Conn ALLY. ^Vliat was the date again ?
Mr. Weitz. August 10. Now do the dates listed in the report to the
GAO listed by the Democrats for Nixon, does that reflect the dates on
which the checks— the moneys were actually received by the committee ?
Mr. CoNNALLY. I frankly do not know. I had nothing to do with
keeping these records or handling the money at all. Mr. Leonard Marks
handled that entirely. I have no memory whatever about it. I have no
knowledge, I never did know.
Mr. Weitz. And you are not aware of the date on which the contribu-
tion was actually sent or committed by SPACE ?
Mr. CoNNALLY, No.
Mr. Weitz. Did, at that meeting, either organization through their
representatives actually make a commitment of funds ?
Mr. CoNNALLY. No ; I do not think they did.
Mr. Weitz. They just listened to you and did not acknowledge the
fact — in fact whether they would go ahead and make some specijfic
contribution ?
Mr. CoNNALLY. What do you mean "just listened to me" ?
Mr. Weitz. Well, you would — ^all right, you say you had not raised
the matter of the President's reception ?
Mr. CoNNALLY. That is correct.
Senator Weicker. I gather from the Governor's testimony that he
indicated that he was listening to them,
Mr. CoNNALLY. That is correct.
Mr. Weitz. Yes ; the record should show that.
And it was only their suggestion that they be anxious to help or sup-
port you that elicited some type of favorable response ?
Mr. CoNNALLY. I am_ not even sure they brought that up, they might
have, I simply said they- might have made some passing reference to
it, but the meeting in no way on August the 2d was a meeting that dealt
with political contributions.
Mr. Weitz. You are certain of that ?
Mr. CoNNALLY. I am certain of that.
Mr. Weitz. And any recollection to the contrary on the part of any
of those gentlemen would be faulty, you would think?
6086
Mr. CoNNALLY. I would agrain simply say there mijs:ht have been a
passing reference to it. but the purpose of the meetin<r. as they stated,
was to discuss these problems and they did it in great detail to the
point where I said I got inundated with information that I did not
fully understand, and at the conclusion of the meeting, I said, "Gentle-
men you have lost me, and I think the best thing to do if you would
be kind enough to, is to please write me a letter setting out these facts
and I will have them."
Mr. Wettz. But aside from passing reference, had they made a spe-
cific commitment of $25,000 from each of the organizations ? That was
something you would have remembered ?
Mr. CoNNALLY. At that meeting ? No, I do not believe they did.
Mr. Weitz. So your testimony is they did not do so ?
Mr. CoNNALLY. No ; we never got $2.5,000 from each of them.
Mr. Weitz. Well, are you aware that ADEPT did make contribu-
tions on September 19, as reported in their GAO report, of $6,000
to Democrats for Nixon and $19,000 additional to four other State
Democrats for Nixon ?
Mr. CoNXALLY. No ; I was not aware of that.
Mr. Weitz. And they never mentioned that to yo\i ?
Mr. CoxNALLY. Until this moment.
Mr. Weitz. And they never mentioned that to you at that meeting,
or later?
Mr. CoNNALLY. No.
Mr. Weitz. And Mr. Jacobsen never mentioned that to you at that
meeting or later ?
Mr. CoNNALLY. I did not know what was being contributed to
various committees around the country. I made no effort to find out.
Mr. Weitz. In general, when people — for example, when you discuss
at any time possible contributions, would you in any wa}' encourage
them to make contributions, either on the one hand to the National
Democrats for Nixon, or on the other, to the various State Democrats
for Nixon committees ?
Mr. CoNNALLY. Yes ; or frankly, I said if you prefer, make them to
the Committee To Re-Elect. They have all kinds of committees all over
the countr3\ I said, "If you want to, we're not a fundraising organiza-
tion necessarily, make it to whomever you please."
Mr. Weitz. Would you at any time, though, encourage them one way
or the other — in otlier words, would prefer if you would make con-
tributions to a State committee as opposed to the National Democrats
for Nixon?
Mr. CoNNALLY. No ; I never really tried to do that, no.
Mr. Weitz. "WHio would handle those types of arrangements, for
example, if someone came to Leonard Marks or to you or to anyone
else connected with the committee, and said, we feel like we would
like to make a contribution of x dollars, would all of that money neces-
sarily go to Democrats for Nixon, or might some of the money, might
it be suggested that some of the money be contributed to a State
committee ?
Mr. CoNNALLY. I would say I do not frankly know. If they would
come to me, I do not know how to respond to your question. I would
saj' that Mr. Marks would be your best informant there, because he
talked to these people, I do not recall if I ever encountered that
problem.
6087
Mr. Weitz. Now, in general, looking as an overview for 1971 and
1972, aside from the suggestion by Mr. Jacobsen in mid-1971 in con-
nection with the $10,000 cash, do you recall any time when you handled
or — funds in the amount of $5,000 or more — were put at your disposal ?
Mr. CoNNALLY. I did not.
Mr. Weitz. Whether in cash or otherwise ?
Mr. CoNNALLY. I did not, cash or otherwise, at any time.
Mr. Weitz. Did anyone under your direction, other than Leonard
Marks, for example, in the regular course of Democrats for Nixon,
handle such amounts for you ?
Mr. CoNNALLY. No; not to my knowledge, no.
Mr. Weitz. And Mr. Jacobsen ?
Mr. CoNXALLY. Not to my knowledge, no, no one.
Mr. Weitz. I have no further questions.
Senator Weicker. I have just one question on this particular subject.
Have you ever met with David Wilson of the Wliite House staff rela-
tive to the suit brought by Ralph Nader on this matter?
Mr. CoNNALLY. No ; I have not, I do not believe I laiow him, Sena-
tor. I've certainly never met with him.
Senator Wfjcker. Do other counsel have any questions ?
Mr. Sanders. Yes, sir, I have a few things.
The Reporter. Your name, again, please.
Mr. Sanders. Sanders, S-a-n-d-e-r-s.
Grovernor Connally, did you, at any time in Feibniary or March 1970
or 1971, discuss the milk support problem with Chairman Mills,
Wilbur Mills?
Mr. Connally. Yes.
Mr. Sanders. Did you do this in connection with testimony before a
House committee or was this a private meeting you had with him?
Mr. CoNNALLY. I do not recall, Mr. Sanders. I rather think we dis-
cussed it several times.
Mr. Sanders. Did you have meetings with him for the particular
purpose of discussing the milk price support ?
Mr. CoNNALLY. I do not recall that we did. I met with him fre-
quently, because I was up there frequently, but I do not recall that
we had any meetings for that purpose.
Mr. Sanders. Did you have similar discussions with Chairman
Poage ?
Mr. CoNNALLY. T cannot be sure. I got a telephone call from him, but
I do not think I had — I do not think I had any meeting with him.
Mr. Sanders. My understanding is that the legislation that was
introduced in the House was referred to the Agriculture Committee.
Mr. CoNNALLY. I think that is right.
Mr. Sanders. Why would your discussions have been with Chairman
Mills as opposed to someone on the Agriculture Committee ?
Mr. CoNNALLY. Oh, Mr. Sanders, I testified earlier, I talked to a
great many — or a great many Members of Congress talked to me about
this matter. It was not something — and both sides of the aisle in both
Houses — both House and Senate, so I thought it not a bit unusual and I
must say they Avere amazed, those with whom I talked, that the admin-
istration would indeed set the parity — set the support price at 81 per-
cent of parit}^ and they thought it was extremely foolish and that they
Mere in effect saying they were going to set it themselves.
6088
INIr. Saxders. Do 3^011 have aii}^ recollection of any discussions con-
cerning this matter with Chairman Mills between Mai-ch 12 and
March 25 ?
Mr. CoNXALLY. I do not Avant to try to tie the time down, that spe-
cifically, I do not remember that precisely. I do remember that I
talked to him on several occasions about it.
Mr. Sanders. Do 3'ou have a recollection of any conversations in the
context of the administration decision already being made and your
desire to or your thoughts about overcoming this — about the potential
legislation ?
Mr. CoNNALLY. "Well, I do not want to try to define the conversa-
tions that precisely because I do not remember them that jirecisely. I
do know tliat there was a great deal of interest on the Hill. I do know
that Chairman Mills talked to me about it several times, as did a
number of other Members of Congress, and I am sure a number of
those convei"sations were between INIarch 12 and March 25th.
Mr. Saxders. Do you have any recollection of any discussion con-
cerning this subject in March 1971 with President Johnson?
Mr. Coxxally. No, I do not.
]Mr. Saxders. Do you have any knowledge as to whether President
Johnson made any effort to persuade Democratic Congressmen to go
to bat for the increased parity?
Mr. Coxxally. I do not know.
Mr. Saxders. Do you have any knowledge as to whether any officials
of AMPI were in contact with President Johnson in March 1971 ?
Mr. Coxxally. No. I would have no way of knowing that.
Mr. Saxders. Do you have any knoAvledge of any AMPI funds being
committed to Congressman Mills?
Mr. Coxxally. No — other than the published reports, but that is all.
Mr. Saxders. That would be TAPE ?
Mr. CoNNALLY. I do not even i-emember who it was.
Mr. Sanders. Well, my question related to commitments. Do you
have any knowledge of any AMPI funds being paid to Congressman
Mills?
Mr. Coxxally. The only thing I know, it seems to me I read in
either the report of the filings, but in any event, I read soinething in
the newspaper about funds that had been contributed by one of the
organizations to Chaii'man ]\fills.
ISIr. Sanders. In any of your conversations with Chairman
Mills concerning the milk problem, did you discuss with him the
availability of AMPI funds?
Mr. Conn ALLY. No.
Mr. Sanders. Do you have any knowledge of a commitment of any
AMPI funds to President Johnson ?
Mr. Coxxally. During this time period ?
Mr. Saxders. Yes. sir. in 1971.
Mr. COXNALLY. No.
Mr. Sanders. Or to anyone on behalf of or for the use of President
Johnson ?
Mr. Conn ALLY. No.
Mr. Sanders. No further questions.
Senator AYeicker. Are there any further questions on this matter?
Mr. Edmisten. Let me ask a question.
It seems as though the various milk groups sort of singled you out.
I
6089
To what do you attribute that — to comfort their woes and troubles?
Mr. CoNNALLY. I certainly would not characterize myself thusly. I
think I had meetings with one of their representatives in 1971. I had
one meeting which I have already described in March 1972. I had an-
other meeting in August 1972. Those were three m.eetings that I have
had in 2 full years. They were all over this town like locust in 1971, if
I remember correctly, and I do not think they singled me out at alL I
think you go to anybody in town and find that they had received about
as much attention or more than I had.
Senator Weicker. During the year 1973, Governoi", have you dis-
cussed this matter with — and when I say this matter, rather the events
that transpired as you knew them or the publicity that has been given
to this business — with the President of the United States.
Mr. CoNNALLY. No, Senator, T do not believe I have.
Senator Weicker. With any personnel of the White House ?
Mr. CONNALLY. No.
Senator Weicker. During 1973 ?
Mr. Connajlly. No, I do not believe I have.
Senator Weicker. I have one question while you aie before the
committee. T know you have been very patient and very responsive,
sir, ill your questioning by the committee. Wliile you are here, there
is one question T would like to relate to you on another matter.
During the course of the summer, certain memorandums were
handed over to the committee which contained public knowledge, one
of which was a memorandum from Mr. Charles Colson to H- K. Halde-
man relative to the ITT matter, and it was given to the Watergate
Committee, and it appeared in the press. In the course of that men^-
orandum, the following statement was made :
Certain ITT files which were not shredded and were turned over to the SEC —
it was talked yesterday in the Committee of subpoenaing these from IT&T—
these files would undermine Grinell testimony that he made, that he made the
decision not to take the appeal to the Supreme Court. The correspondence to
Connaliy and Peterson credited the dalay in Justice's filing of the appeal to the
Supreme Court in the Grinell case to indirect intervention by Peterson and
Connaliy. And they are referring to a letter that was sent to you on April 22,
1971 by Phil Meyer.
And I wonder if you might take this occasion to comment upon
that reference to you in the memorandum ?
Mr. CoNNALLY. Senator, I am grateful for the opportunity to do so,
because in spite of the reference in there as crediting Pete Peterson
and me with it, I had nothing whatever to do with it. It was a gratui-
tous thanks, which w^as richly undeserved.. And I cannot speak for
-Mr. Peterson, obviously, but as far as I am. concerned, I took no part
in the ITT matter as suggested in that matter.
Senator Weicker. Do you know the letter that I am referring to ?
I have a copy here,
great many — or a great many Members of Congress talked to me about
the 16th, April 22. Yes. I am now familiar with the letter. Frankly,
I do not even recall that I saw the letter when it cam^e in.
T had a meeting with these gentlemen, and I assume it was on this
Friday, April 16, that I saw Mr. Geneen and Dr. Mehren. They talked
to me about some of their problems for approximately 30 minutes.
I listened — I thought very patiently — to their problems. I tried, and
did to a certain extent, steer the conversation into other channels, be-
6090
cause obviously the matter was not one under my jurisdiction, one
under which I would have no control, and one under which I did not
intend to take any part.
I tried to direct the conversation to the area of administrative
hurdles, administrative barriers, obstacles that are placed in the way
of American businessmen by foi-eip;n governments Avhen they attempt
to do business in those countries, because we are getting; deeply in-
volved in international trade, international monetary affairs. We are
lookinp: at a bad balance of payments, a bad balance of trade, and it
was my responsibility at that point to take a look at this entire field.
I knew he operated extensively overseas. I tried to direct the conver-
sation in that area.
The only thing I remember of any significance out of the meeting
was the f a-^t that he told me that ITT, in their international operations,
made a net $300 million a year, or attributed a net $300 million a year
to our favorable trade balances. Now, beyond that, T had no part what-
soever in the rest of this.
Senator Weicker. In other words, you were not in contact with any-
body at the Justice Department ?
]\ir. CONNALLY. No.
Senator Weicker. As a result of this meeting?
Mr. Conn ALLY. No.
Senator Weicker. Did you ever discuss it with the President?
Mr. Conn ALLY. No.
Mr. Sanders. I have one more.
Senator Weicker. Yes. please go ahead.
Mr. Sanders. Governor Connally, do you have any knowledge of a
meeting between Dr. Mehren and President Johnson in October 1P72 ?
Mr. Connally. No.
Senator Weicker. I have no further.
Is there anything further. Governor, that you would care to go ahead
and say?
]\Ir. Connally. Senator. I believe not. I am grateful for the oppor-
tunity to be here, to hopefully clarify the role that I played in these
matters that are receiving the attention of the committee. We would
be delighted to supply you Avith any additional information that you
have asked for.
I know that this is an executive session. Senator, but the press is
rather larjre, I think, and assembled over in the press room. I assume,
without objections on your part, or I would like to, without objection
on your part, go over and at least touch the high spots of my testi-
money in response to their questions.
I do not want to volunteer anything to them, but they are there.
They have been there. They were there when I came in. I do not know
how to avoid it. And unless there are serious objections
SenatoT- Weicker. Theie is no objection as far as the Chair is con-
cei-ned. excent insofar as the information that has been given at this
meetiufr. as it i-elates to the vai'ious staff members. Obviously, we will
go by the i-egular rides of the committee, which is, this is an executive
session, and they Avill not be made available to the press.
6091
And I ceilainly appreciate your notifying us.
Mr. CoNNALLY. I do not want to do it, but I think I ought not to
walk out of here in a veil of secrecy and not respond to their questions
at all. I will do it in the absolute minimum.
I would be delighted for any of your stajff to go and listen to it if
they would like.
Senator Weicker. Thank you very much for your patience. I ap-
preciate it.
[Whereupon, at 7:35 p.m., the hearing in the above-entitled matter
adjourned.]
6092
CoNNALLY Exhibit No. 1
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6094
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6095
CoNNALLY Exhibit No. 4
Dairymen, Inc.
SUITE NO. 506, PORTLAND FEDERAL BUILDING
200 WEST BROADWAY, LOUISVILLE, KENTUCKY 40202
CENTRAL OFFICE
PHONE (502) 584-8123
August 15, 1972
The Honorcible John Connally^
Madison Hotel, Room 203
:15th and M Streets, N.W.
Washington.D.C. 20005
rOear Mr. ■ Connal ly ; ■ _:.
On August 2,- Ben Morgan, Dave Parr and i.from Dairymen, ,
Inc. and Eugene Baldi and Gary Hanman of Mid-America Dairymen,',-
Inc. met with you to discuss needed changes in federal programs ;
relating to milk marketing. You suggested we write to you
summarizing the needed changes and why these changes are necessary.
There are two vitally needed changes. The first of these
is the amending of Federal orders to expand the use of marketing,
service payments to include additional activities which are per-
formed by producer groups and which benefit all producers. The
second needed change is the adjusting of the milk price support
level to the market level which will prevail during October and
November of this year.
This letter is concerned with the first of these vital
chdnges--namely marketing service payments. Mid-America Dairymen,
Inc. will send a second letter concerning the needed adjustment
in the price support level.
MARKETING SERVICE PAYMENTS
Background. Marketing service, payments have long been used
in the Federal milk order regulatory process to reimburse cooperatives
for verification of producer v;eights., samples, and butterfat tests,
and for providing market information. These provisions were incor-
porated into Federal Orders at a time when the above enumerated ecti- -g
vities were practically all of the activities in which cooperatives
6096
The Honorable John Connally
August 15, 1972
Page Two
were engaged. Extension of the payment for ttiarketing services to
encompass all services with market-wide benefits and performed by
modern-day cooperatives is essential to fully achieve the objectives
of the Agricultural Marketing Agreement Act, as amended. ~
In recent months, representatives from Dairymen, Inc. have met
with the United States Department of Agriculture to discuss the expan-
sion of marketing service payments . The reaction has been encouraging
and we will meet again in coming weeks.
. ' Some -Karket-Wide Services Performed by Dal^yrnen, Inci Which -- '/^y-s
Benefit all Producer-Members and Non -Members Alike. Because consumers ■*.;■'<,
demand more milk, from- stores on Thursday, Friday and Saturday than on -
other, days ;^'many' processors have cut back to bottling four or. five days '.-
during the - week , However, cows continue to produce milk seven days ?
week. Milk supply also varies seasonally. Therefore, Dairymen, inc.
and other producer groups , have the responsibility of balancing supply
with the demand of an entire market. That is. Dairymen, Inc., and these
other cooperatives, guarantee all the milk needed in a particular market
and when milk supplies are not available locally, it is brought into the
market from distant areas.- This encompasses sizable investments in milk
storage or reload facilities in addition to expensive transportation
equipment. ■ .
. In. addition, members of DairyTnen, Inc. invest one percent of the
gross rev«nue-,-,receTved from the sale of their milk in milk promotion
and adyertistng to expand the market for milk and da^ry products.;
'^' .:'' J:?i^p^&1iaiiryfaQi^, Inc- has fceen respoRSibls for making ext^sive
maT^ctrt^^atysi^s, proposing changes, requesting hearings and preparing
"testiaKw'jf^HalT Qf which *ct1v1ties are necessary in the federal ^railk
enter regulatory program. ^V
■' '=- these above enumerated activities and some others have the effect
of raisitrg -'prices paid to producers in a particular markst abovewhat they
would otherwise be. Dairymen, Inc., and other producer groups, are bearing
the entire cost for these activities. However, non-member producers
receive the benefits of these activities without paying an equitable share
of their cost.
Impact on Consumers and Milk Dealers. Expansion of marketing
service payments to include additional services provided by some Pfc- ^
ducer organizations v/ould not result in an increase in the- price consumers
pay for milk. The purpose of our proposal is to allocate cost of services
provided among all those who receive benefits.
6097
The Honorable John Connally
August 15, 1972
Page Three
Dairymen, Inc. and other similar producer groups assume the
major responsibility and all the risks for performing functions
necessary to efficiently service the markets it supplies with milk.
The most efficient means to provide these market-wide functions is
through a highly interrelated system of plants, equipment and
personnel. Such an organization, as Dairymen, Inc., increases
efficiency which has the effect of enhancing the income of all pro-
ducers in a market and decreasing the cost of milk to milk processors
and consumers.
Impact on Producers. Currently, non-member producers are '
paying 5 to 6 cents per hundredweight for butterfat testing and
market information under marketing service provisions now in Federal
Orders. Members of Dairymen, Inc., and other similarly organized
cooperatives, are paying approximately 25 cents per hundredweight
to serve the total needs of the milk market. We estimate that
marketing service payments that we propose would vary from 18 to
25 cents per hundredweight depending on the services performed in
respective federal markets, which would be paid by all producers--
both members and non-members. We believe we can show at a public
hearing that non-member producers are gaining more than 18 to 25
cents per hundredweight through market-wide service activities of
Dairymen, Inc.
Impact on Government Costs. There will be no significant
increase in government program costs associated with the proposed
expansion of marketing service payments since the expansion would
have no effect on milk production or purchases of dairy products
by the Government under the price support program.
Recommended Procedure. The Southeast is a relatively homogenous
milk marketing area. We recommend that the U. S. Department of
Agriculture call a public hearing to consider expanding the use
of marketing service payments in the federal orders which are now opera-
ting in the southeastern states within which Dairymen, Inc. operates. If
Dairymen, Inc., on the basis of its testimony at the public hearing.
6098
The Honorable John Connally
August 15, 1972
Page Four
persuades the Department of Agriculture that the expansion of
marketing service payments is in the interest of dairy farmers
end the public, then it can call hearings to consider similar
changes in federal orders in other parts of the country. "'..
'. If we c.?ri provide any additional information,, please '-
1 et me know , -. - , ; ' ' ■ ' • -
Sincerely yours,- ■_,
('"x / [\ 'J]l. -4'" 4-~
(.^Joseph J. Westwater " . '^"
f::^: Vice-President .-•
{-:'■ Special Programs -
JJW:jh -^y-S^K-r^r' '
6099
CONNALLY EXfflBIT NO. 5
MID ->qMERIC/5 O/qiRVMEN, II^JC
1337 s s SIATIOTn • SPWINGFIELD MISSOURI 65805 • AREA CODE 417 e62-7C
August 17, 1972
The Honorable John Connally
MadisoQ Hotel
Room 203
15th St M Streets, N. W.
Washington, D. C_ 20005
Dear Secretary Connally.
This is a follow-up to our discussion earlier this month relative
to the need for governmental assistance as the dairy industry attempts to re-
structure itself for the increased demand for cheese. , '
Historically, the Commodity Credit Corporation has purchased
butter, powdered milk and cheese as a means of supporting milk prices.
These products have two important attributes that make them desirable as '
price support products. First, they represent the end-use of milk that cannot
be used in some higher value product and, secondly, they are storable for
substantial periods of time.
"f-^' ' 1 ■•■, \ . ^ . '
To understand the mechanics of establishing the prices at which
commodities are purchased, it is necessary to briefly discuss the yields that
can be expected from processing milk into various products. Basically,
100 pounds of milk contains enough butterfat and solids not fat to make about
4-1/2 pounds of butter and about 8. 1 pounds of powdered milk OR 10. 1 pounds
of cheese together with a small amount of whey by-products. By establishing
prices for these commodities and providing a processing allowance, S- target
value of 100 pounds of milk can be established. The following is an example of
the technique used to compute support prices as they were set ou April 1, 1971:
lOOnf Milk Made into Cheese
Cheese price 54.7?' per pound
X 10. 1 pounds cheese $ 5.52
Add value of whey . 18
Cross value of cheese and whey $ 5. 70
Less cost ol manufacturing . 77
Support Price Level $4.93
6100
Page n
The Honorable John Connaliy August 17, 1972
100" Milk Made into Butter and Powder
Butter price 67. 78? per pound
X 4. 48# butter $ 3. 04
Powder price 31. Si per pound
X 3. 13# powder 2. 56
Gross value of butter and powder $ 5. fcO
Less cost of manufacturing . 67
Support Price $ 4. 93 - ': '
It should be noted that the formula for establishing the price for
cheese is somewhat mere favorable than the butter -powder formula, represent-
ing an attempt to encourage the development of cheese processing facilities.
Certainly no one can question the desirability of this attempt, since the dorriestic
demand for cheese has absorbed an increase of about 18% during the past 3 years.
Also, cheese is a more desirable product for distribution and use in the school
lunch program and other relief feeding programs that utilize surplus commodities
from the Commodity Credit Corporation.
The problem confronting the industry at the present time is the
disparity in returns for plants that manufacture butter and powder, and those
that make cheese. With cheese markets at 58? per pound, these operators
have an ability to out-pay butter-powder plants (primarily coops) by about
30? per hundredweight.
About 75% of the butter-powder processing plants in the United
States are owned and operated by cooperative associations, thus dairy farmers,
or at least a part of the nation's dairy farmers, are, in effect, carrying this
burden of an unfavorable price relationship with little opportunity to recover
their losses in the short run.
There are indications that cheese prices will continue to strengthen
and this in turn will allow cheese processors to further increase prices and
widen the disparity with operators of butter -powder plants.
Cooperatives have"been systematically converting butter-powder
operations to the production of cheese as the domestic demand indicates a
continuing need for cheese and as capital is available. The cost squeeze re-
flected in the current situation actually is reducing the funds available to <
cooperative associations for continuing the conversion of butter-powder plants
to cheese processing, thus slowing a desirable trend.
6101
Page #3
The Honorable John Connally
August 17. 1972
To coiTect the present inequity and provide improved income to
dairy farmers, we suggest the following action:
1. Bring the present price support level to the competitive
price level currently being paid milk producers. This can be done hy in-
creasing the price at which the Commodity Credit Corporation will purchase
powdered milk by about 3^ per pound and moving the price support floor on
cheese and butter to present market price levels. This would allow cooperative
associations and others operating butter-powder plants to pay competitive
prices and thus continue the program of converting butter-powder plants to
cheese processing facilities. It is important to note that this action ■would
not increase the- price of cheese or butter since these items are already
reflective of present milk price levels; thus, consumers should experience
little if anyincrease'-in dairy product prices. -.;■
j 2. We suggest the Secretary review^ monthly the competitive ■•"
prices paid for manufacturing milk and make similar adjustments if there
are again competitive- increases in price levels. We again suggest, that such
increases be made only in the powdered milk price and thus allow prices on
consumer products'such as butter and cheese to be established at competitive .-
levels. , , . , " -'
CU-bS.-.
Very truly yours,
MID-AMERICA DAIRYMEN, INC.
//Hi
Gary/Hanman
Senior Executive Vice President
6102
AFFIDAVIT
I, John B. Connally, being first duly sworn according to
law, depose and say that the answers to the questions set forth
below are true to the best of my recollection, Information and
belief.
Q. Now during March 1971, do you recall meeting Mr. Lilly at
Page Airways in Washington, in the Washington Airport?
A. No, I do not.
Q. You do not remember any trip out of Washington during
March 1971?
A. After a review of my records, I do remember a trip on
March 5> Friday afternoon, when my wife and I left
Washington from Page Airways by private plane to New
York City and returned to Page Airways mid-afternoon,
Sunday, March 7- Also, during the weekend of March 20
and 21, my wife and I visited at a farm, near Washington,
with personal friends; we made this trip by automobile.
Q. Now you do not recall seeing Mr. Lilly. Do you perhaps
recall seeing a group of people, members and employees
of AMPI in the Page Airways sometime during March 1971,
passing them briefly, and perhaps seeing Mr. Nelson among
them?
A. I have no memory of seeing the AMPI people, including
Mr. Nelson, in Page Airways during March 1971, although
it is possible that I did. If I did, it was a chance
meeting that occurred while I was passing from the front
door to the back door of Page Airways or. vice versa on
my return.
6103
- 2 -
And you do not recall any such meeting held ever at Page
Airways during March 1971?
No, I do not.
In your meeting with Harold Nelson, Jake Jacobsen and
George Mehren on March 16, 1972, was the subject of
campaign contributions from the dairy people to the
President's reelection effort, including the amount,
form and timing of such contributions, discussed?
During Dr, Mehren 's discourse on AMPI's problems,
including Internal Revenue problems and the antitrust
suit which had been filed, as I recall, he made some
general comment to the effect that under all the cir-
cumstances AMPI probably should discontinue all political
contributions until later. I responded by saying
something to the effect that this sounded reasonable.
I do not recall any specific discussion of campaign
contributions to the President's reelection effort
in this meeting, nor a discussion of the amount, form,
and timing of any such contributions, except as the
general discussion mentioned above can be considered
to encompass these subjects.
DISTRICT OF COLUMBIA) ss:
Subscribed and sworn to before me this //2_' day of April, 197^'
NotAf-y Pub 11
/7^y:^--<--^^c2<2je^-U
My Commission E.\piics September It, IV/'f
6104
AFFIDAVIT
STATE OF TEXAS
COUNTY OF HARRIS
I, John B. Connally, being first duly sworn
according to law, depose and say that the answer
to the question set forth below is true to the best
of my recollection, information, and belief.
Q. During March, 1971, did you communicate at
Page Airways to Bob Lilly or any other
employee or representative of AMPI any
opinion of any kind, whether optimistic
or otherwise, concerning the possibility
of an increase by the Administration in
milk price supports for the 1971-72 mar-
keting year?
A. As I stated in my affidavit of April 11, 1974,
I do not recall any meeting, v/hether formal
or chance, during March 1971 at Page Airways
with Bob Lilly or any other employee or rep-
resentative of AMPI; therefore, it follows
that I do not recall communicating to any
such persons at Page Airways any opinion which
I might have held during that time concerning
the possibility of an increase by the
Administration in milk price supports for the
1971-72 marketing year.
Subscribed and
day of May, 1974.
Notary Public
FRIDAY, NOVEMBER 16, 1973
U.S. Senate,
Select Committee on
Presidential Campaign AcTmTiES,
Washington^ D.C.
The Select Committee met, pursuant to recess, at 9:50 a.m. in room
1418, Dirksen Senate Office Building.
Present: Dave Dorsen, assistant chief counsel; Donald Sanders,
deputy minority counsel; Alan Weitz, assistant majority counsel;
Richard O'Hanlon and James Le£» Elder, investigators.
Mr. Weitz. Let the record show that this is a continuation of the
executive session commenced on Wednesday, November 14, in connec-
tion with the testimony of Bob A. Lilly.
Mr. Lilly, I would like to turn to 1972 and some transactions during
that period that related to certain Presidential contributions. Can you
tell me what you know about certain meetings in January or February
of 1972 between certain representatives of AMPI and Herbert
Kalmbach ?
TESTIMONY OF BOB A. LILLY—Resumed
Mr. Lilly. Not having been a portion of the meetings, I do know
that in early 1972, January or February, that ]Mr. Nelson — Harold
Nelson, and Mr. Jake Jacobsen, and Dr. George Mehren went to Cali-
fornia and met with Mr. Kalmbach. And Dr. Meliren, possibly Mr.
Nelson, told me about this meeting, or indicated that they had been to
California, had met with Mr. Kalmbach following the meeting, and
the general nature of the discussion.
I don't have a great deal of detail on it. It had to do with the dis-
cussion of political contributions that the Committee for TAPE, the
political arm of AMPI, might make to the Committee to Re-Elect the
President.
Mr. Weitz. Now, at that point Dr. Mehren was general manager and
had succeeded Mr. Nelson, isn't that correct ?
Mr. Lilly. That's true, and it was immediately following that. That
had occurred in January of 1972.
INIr. Weitz. Do you know who arranged the meeting with Mr. Kalm-
bach in Los Angeles ?
Mr. Lilly. No. I don't know who arranged it.
Mr. AVeitz. Now, do you know whether the contributions or the
possible contributions that were discussed at that meeting were pur-
suant to any commitments that had l)een made the previous j^ear by
Mr. Nelson or anyone else to the representatives of the President's
reelection ?
Mr. Lilly. My understanding of the discussion was that Mr. Kalm-
bach felt, and in the discussion — it was related to me after — that he
expected certain commitments to be carried out that had been made
previously.
(6105)
6106
Mr. Weitz. Who related that to you?
Mr. Lilly. Dr. Mehren related that to me.
Mr. Weitz. Expanding on that, for example, when Dr. Mehren
became general manager hi January of 1972 — this would hav'^e been
before his meeting AvithlNlr. Kalmbach — did he engage in any of these
discussions with yon in which he asked or tried to inquire as to the
extent of any commitments that had been made in the previous year
by Mr. Nelson or others to representatives of the President ?
Mr. Lilly. Yes. He had asked me — I had assumed he had asked
Mr. Xelson and other people, but I knoAv he had asked me about com-
mitments that were made, amount of commitments and how much
total moneys that were really being discussed. And I truthfully told
him that I really didn't have a true and solid answer as to commit-
ments, total commitments that had been made.
Mr. Weitz. Well, aside from a true and solid notion or answer,
were you able to give him some idea or relate something that you
knew about — some idea about possible commitments'^
Mr. Lilly. Yes. because earlier in 1971, March of 1971, there had
been a discussion between Dave Parr, P-a-r-r, Mr. Harold Nelson, Mr.
Jake Jacobsen, and Mr. Marion Harrison, where moneys were dis-
cussed, as to how much moneys were obligated — already committed.
This happened in the Madison Hotel in Mr. Nelson's room. And the
disagreement between the amount of money that had been committed —
Mr. Parr indicated that some $1 million had been committed at that
particular time. Mr. Nelson was of the opinion that one-half million
dollars had been committed. Mr. Marion Harrison, also present, indi-
cated commitments had been made. I am not sure what figure Mr. Har-
rison might have used.
But apparently, commitments — the general consensus of the discus-
sion was commitments had been made somewhere between one-half
million dollars and $1 million at that particular time.
Mr, Weitz. Now, isn't it also true that at those earlier meetings
which you attended, it was decided upon the sugoestion of Jake
Jacobsen that peihaps another one-quarter million dollars would be
committed in order to obtain Mr. Connally's assistance?
Mr. Lilly. Yes. Eeally this ended the discussion when no decision
was arrived at as to how much moneys had or had not been committed.
Mr. Jacobsen stated that cei'tainly some new moneys, when Mr. Con-
nally entered into this, would have to be committed.
And in view of the discussion of somewhere between $500,000 and
$1 million, Mr, Jacobsen indicated that $250,000 would be a fair figure
to commit as additional or new moneys really, as he referred to them,
meaning moneys that had not been previously committed. And that
there was general agreement on the amount of $250,000 over and above
Avhat had been committed should be added to those figures.
Mr. Weitz, So to summarize then, at least from your understanding
of that meeting wliich you attended, that those gentlemen were speak-
ing in terms of the commitment of anywhere from a minimum of
$750,000 to perha]« even $11/4 million ?
Mr. Lilly. That is true.
Mr. Weitz. Did they indicate whether this commitment was for
AMPT alone or might it cover several other co-ops together with
AMPI?
6107
Mr. Lilly. It is possible that other cooperatives, one of them being
Dairymen's, Inc., and the other, Mid-America, could have been men-
tioned. But it was my clear understanding; tliat the commitments being
discussed here were the commitments that the Committee for TAPE or
TAPE and AMPI would be committed separate and apart from any
other commitments that might be made.
Mr. Weitz. Do j^ou have any idea as to the relative size or relative
ability for contributions by, for example, between AMPI and Mid-
America and Dairymen's, Inc. ?
Mr. Lilly. Well, normally Mid- America and Dairymen's, Inc., the
numbers of producers that they have as compared to the number of
nroducers that AMPI has, those two cooperatives. Mid- America and
Dairymen's, Inc., combined would equal the membership of AMPI.
AMPI had somewhere m the vicinity at that time of 30,000 mem-
bers. Those two cooperatives had in the vicinity of 30,000 members.
AMPI later grew to a larger size, but at that particular time this was
about the size of the two cooperatives.
Mr. Weitz. Aside from the relative size of the two cooperatives, had
you ever, either before that time or afterward, discussed with any rep-
resentatives, either at AMPI or of the other two co-ops, the relative
size of gifts that the}' would give — political contributions that they
would make to the same candidates?
Mr. Lilly. Certainly there had been conversation between various
' people, between myself, between people in Dairymen's, Inc., between
people in Mid-America, as to particular candidates — ma^'be Con-
gressmen, maybe Senators, maybe State officials — that Ave would dis-
cuss, asking me had we contributed what we were going to contribute.
They had contributed, or they were going to contribute a certain
amount.
Mr. Weitz. And would that in any way follow this hypothesis, that
7-elative size ratios such that generally, or at least in some specific in-
stance, their contributions miglit together equal those that had been
made by AMPI to the same candidates?
Mr. Lilly. It possibly could have been the same, but I think more of
the determination as to the amount that might be contributed would
be the vicinity or the State in which the particular candidate lived.
If he lived in Texas, Mid-America has members in Texas; we have
the largest portion of the members, and our contribution would be
far larger than that of Mid-America in most instances.
In an area like Missouri where we have about equal numbers in that
oai-ticular State — Mid- America was headquartered in Missouri, at
Springfield, Mo. — and they normally would contribute more money
than TAPE would contribute in that particular State.
So it is hard to answer your question direct. I think it is the time,
and the place, and the State, and position w^ould probably have more
bearing on that.
Mr. Weitz. I understand.
Now, I know we covered this the other day, but I do just Avant to be
very sure of it before we leave this matter. At the meeting in March
1971 between you and these other gentlemen, is it your understanding
that just prior to that on the same day, perhaps several hours before,
one or more of them had met with Mr. Connally in his office ?
Mr. Lilly. Yes.
6108
Mr. Wkitz. And at that time the milk-price-siipport question and
perhaps other matters were discussed with Mr. Connally ?
Mr. Lilly. Yes. That is true.
■ Mr. Weitz. Who told you that such a meeting had taken phice?
^Ir. Lilly. Mr. Nelson discussed it with me. Mr. Jacobsen discussed
it with me. And at a later time, being* about a week ago. Dr. Mehren
discussed it with me.
Mr. "Wkitz. Xow. are vou quite clear that in the first instance, and
more recently when Dr. Mehren talked to you about it. that they were
in fact talking about a meeting at which those gentlemen had all at-
tended together with Mr. Connally in March 1971 ?
Mr. Lilly. Of course. Dr. Mehren \s most recent conA'ersation about
a week ago could have been referring back to the IMarch 1972 meeting
that was later held with Secretary Connally. But from the discussion
held recently with Dr. Mehren and myself. Dr. Mehren stated that he
presented the economic reasonings that would have to be to justify a
price increase; and in 1972 the price-support issue, certainly always
important, but it was not the major factor as it was in 1971.
And I do not believe — the effort was not being put into having a
price-support increase made for milk in 1972. And so I think that Dr.
Mehren was referring to the 1971 conversation that he had; because as
an economist
Mr. Nicholas. Well, Alan, on that point, so there won't be any con-
fusion, as I understand it. Dr. Mehren's position is that he only at-
tended one meeting.
Now, this is just what Mr. Lilly is relating from his conclusions that
he drew from Dr. Mehren's conversations with him.
Mr. Weitz. So that if, for example, it were determined or it Avas
suggested that Dr. Mehren had attended only a meeting with ]\Ir.
Connally in March of 1972 and at that time discussed economic con-
siderations over a number of agricultural mattei's. you would not nec-
essarily dispute that ?
Mr. Lilly. No. no. T would not.
Mr. Weitz. But going back to the meeting that you attended with
these gentlemen. March of 1971, did Mr. Nelson clearlv relate to you
that he had attended a meeting with Mr. Jacobsen and ]Mr. Connally
several hours before ?
]Mr. Lilly. Mr. Jacobsen more clearly indicated it. Mr. Nelson, as my
memory recalls the incident rijrht, also had attended a meeting with
^Ir. Connally along with Dr. Mehren. because this was some 2 hours
after the meeting had been held. They were discussinc: about the recep-
tion that ]Mt-. Connally had given them : tliat he had listened and felt
like that they had a justifiable cause in pursuing the matter that they
were trving to cain the price-support increase.
Ml". Weitz. Well, in any event, whether oi- not Dr. MeliT-en, who was
no<- at the second meetininr in ^larch of 1971 with you
yiv. TjIlly. He was not.
Mr. Weitz. But whether or not he had attended that meeting, or
v/hether in fact ^Iv. Nelson had attended that meeting with 'Sir. Con-
nail v. it Avas clear to a'Ou that ]Mr. Jacobsen had attended the meetinir
with :\rr. Connally?
Mr. Lilly. There Avas certain! v no doubt in mA mind about that.
6109
Mr. Weitz. And there was no doubt also in your mind from what
those gentlemen said that Mv. Jacobson was of the opinion, and per-
haps as a result of his meetino; with Mr. Connall}', that in order to
obtain Mr. Connally's assistance in obtaining a favorable decision by
the administration with regard to milk price supports, new money
should be conmiitted by AMPI ?
Mr. liiLLY. That is true.
Mr. Weitz. Xow let us go back to 1972. and after the meeting be-
tween Mr. Kalmbach and Mr. Jacobsen and Xelson and Dr. ^Nlehren
in Los Angeles
]Mi-. Saxders. Well, now, if you're leaving that 1971, the possibility
of a meeting, could I develop that a little bit more ?
]Mr. Weitz. Cei-tainly.
Mr. Sanders. My line of questioning here, Mr. Lilly, will pertain
only to the information that you received which indicated to you that
Jacobsen had met with Secretary Connally before a number of AMPT
officials had a meeting in March, and also the possibility that Mr. Xel-
son attended that meeting.
From what you have said, would it be fair to say that toward the
end of March 1971, you and a number of other A^IPI officials had a
meeting at the Madison Hotel where there was a discussion concern-
ing the commitments which were due or owing to some adjunct of the
Republican Party. And Mr. Jacobsen was in attendance at that meet-
ing.
Is that correct?
Mr. Lilly. That's correct.
Mr. Saxders. And he made some remarks there which indicated to
you that he thought a new commitment of about one-quarter million
dollars would be necessary if Seci-etai'v Connally were to be involved ?
Mr. Lilly. That's true.
^Ir. Saxders. Was it at this meeting tliat Mr. Jacobsen told you
that he had met with Secretary Connally just pi-eviously ?
Mr. Lilly. This was the meeting that they were talking about hav-
ing met with Seci-etary Connally. And this is. as my memory serves
me: and that Mr. Connally had been fully advised — ^well, let me
digress back a moment, the reason for it.
Marion Harrison was there. Marion Harrison had been an attoi-ney
that had been working rather closely with Mr. Nelson and INfr. Parr,
and this had been going on practically the entire month of ALarch.
talking with tlie various officials in th° Agi'iculture De]:)artment. in
the executiA'e branch, and others. All of the officials that they contacted
I am not aware of.
It had come to a particular point — of coui'sc, certainly those of us,
many of us, including myself, were working on the Hill" contacting
legislators and getting bills introduced to accomplish the same thing,
as well as other peo])le from othei- cooperatives across the country.
But at this particular time it looked ratlier doubtful as far as getting
achninistrative action, and ]Mr. Harrisoii had mor-e or less exhausted
and indicated something to the effect that he had exhausted just about
all avenues that he knew to exhaust to come up, to influence anyone,
to convince anyone to make a chanire insofar as administration — anrl
I use that in a broad term — without leo-islative action.
30-337 O - 74 - 17
6110
And consequently, Mr. Jacobsen, havinjsrbeen a close associate, a close
friend of Mr. Connally's for many years, then had been in Washino:ton
during most of this time — what he might have been doing— I'd see him
miite often^ — I am not truly aware, but it was then decided that Mr.
Connally was going to have to be brought into this; and this was a
new avenue.
Mr. Harrison was not in a position to talk to Mr. Connally because
he did not know him as Avell as Mr. Jacobsen. So Mr. Jacobsen was
brought into it, then set up a date; and this was discussed also prior
to having contacted Mr. Connally the same week.
And then the meeting was set up ; and insofar as I know, the three
that attended the meeting with Mr. Nelson, Dr. Mehren, and Jake
Jacobsen with Secretary Connally. And then innnediately following
that in the Madison Hotel was where the discussion of amounts of
money was discussed. Mr. Jacobsen said to get Mr. Connally into this,
we are going to have to have $250,000 — this was a final determination —
at least one-quarter million dollars new money into it.
Mr. Saxders. '\^nien and where did you first learn that Jacobsen
had met with Sex?retarv Connally between March 12 and March 25?
Mr. Lilly. At the Madison Hotel the week of the lotli, 16th of
March 1971. I'm not sure what day that it would have been, but it was
that particular week in March.
Mr. Saxders. And it was at that meeting that you first learned from
Jacobsen that he had met with Secretary Connally just previous to the
meeting ?
Mr. Lilly. Yes; there had been a meeting with Secretary Connally
just prior to that meeting.
Mr. Sanders. Did it appear to you it liad been on the same day?
Mr. Lilly. Yes.
Mr. Sanders. AVere you meeting at nighttime in the Madison
Hotel?
Mr. Lilly. It was, oh, 5 o'clock, 5 :80. I mean it was almost dark. I
mean it was late in the evening.
Mr. Sanders. Did ISIr. Jacobsen reveal his contact with Connally
to you personally aside from the others, or was it in the presence of the
entire group ?
Mr. Lilly. No ; this was in the presence of the group there.
Mr. Sanders. Did he indicate that he had met with Secretary Con-
nally in the Secretary's office ?
Mr. Lilly. Yes.
Mr. Sanders. Do you recall whether he said who attended with him ?
Mr. Lilly. I am not sure that he stated that Mr. Nelson, Dr. Mehren,
and himself attended; and this might be an assumption on my part
that the three of them attended. But I am convinced that the three of
them had just returned to the Madison Hotel from a meeting with
Secretary Connally.
Mr. Sanders. Was Dr. Mehren at the Madi'-on meetiuir ?
Mr. Lilly. No: Dr. Mehren had left at about tliat time and had
Sfone to Eumpe. So two of the three that would have met Avere at the
hotel, and that was Mr. Nelson and Jake Jacobsen.
Mr. Sanders. Are you saying at the end of March of 1971 Dr. Mehren
was in Europe ?
Mr, Lilly. At along about the 20th, somewhere, 18th, the 20th, he
went to Europe.
I
6111
Mr. Sanders. But on the night you were meeting in the Madison
he was still in the United States ?
Mr. I^iLLY. He was in the United States, but he was not at the meet-
ing. I think he had gone to New York in preparation for going to
Europe. I'm not sure about this, but I do know on Friday, the same
week, which was the 18th, he was en route to Europe, because he had
asked me to take a briefcase back to San Antonio for him.
Mr. Saxders. Now, Avhat I want to get clear is what circumstances
did you learn at the meeting at the Madison, which indicated to you
that Dr. Mehren had attended the meeting in Secretary Connallv's
office?
Now, in answering this I want you to divorce what Dr. Mehren has
since told you, let's say a week ago. I want to know what you learned
that night at the Madison which indicated to you that Dr. Mehren
attended that meeting.
Mr. Lilly. "\^''ell. pi'obably T am getting the two — because Dr. Meh-
ren not being present, and as I truthfully recall the meeting, T was
under the clear impression that Tkive Parr and not George INIehren
had attended the meeting. And this was when I learned, about a week
ago, that Dr. Mehren said he had attended the meeting.
So Dr. jSIehren had provided the figures, the information that would
I)e used, being an economist.
Mr. Sanders. You are not now saying that Parr was present and at-
tended the meeting in the Secretary's office?
Mr. Lilly. No ; I was under the impression that he was probably the
third person that went to Connally at that particular time; but Dr.
Mehren about a week ago stated that he was the one that was at Mr.
Connally's meeting.
Mr. Sanders. During the meeting in the Madison Hotel
IVIr. Lilly. Yes.
Mr. Sanders [continuing]. Did you learn of facts which would have
indicated to you that Nelson was in attendance in the Secretary's office,
and what are those facts?
Mr. Lilly. Other than the discussion of meeting with the Secretary
and that the Secretary had listened to their justification for a price-
support increase, what might happen if they did not get the price-
support increase insofar as milk production was concerned, the overall
economic thing, and having presented that to Secretary of the Treasury
Connally.
Mr. Sanders. In other words, you were deducing, because of the im-
portance and complexity of the discussion they would have had to have
with the Secretary, that Nelson had to be there.
It that what you are saying ?
Mr. Lilly. I'think that Mr. Nelson w^ould have met with Mr. Jacob-
sen had he had met with Secretary Connally, for one thing.
Mr. Sanders. But at the meeting at the Madison did Mr. Jacobsen
say that Nelson had been with him in the Secretary's office ?
M)-. Lilly. Well, Mr. Nelson was talking about having met there,
and ]\rr. Jacol)sen was talking about having met with Secretary
Connally.
Mr. Sanders. OK.
Mr. Nicholas. On that point there's a couple of questions that I
would like to ask my client.
6112
Mr. Lilly, do yon have any recollection whatsoever of the pnrpose
or the reason why you came to Washin^on in the first place at this
particular time, which would be March of 1971 ?
I mean, was there any meetinor in San Antonio or Dallas or Arkansas
or on the telephone, conversations that would have brought you all
together here? There had to he some prearrangement, was there not?
Do vou recall anvthing?
Mr." Lilly. Into Washington, B.C. ?
Mr. Nicholas. Yes. Reservations had to be made, hotel reservations
had to be made, plane reservations.
Mr. Lilly. Yes, true.
Mr. Nicholas, Well, do you have any independent recollection of
any documents or any secretary that made the reservations, or anybody
that would have been talked to about this prior to the time you all
arriAed in Washington ?
And how did you arrive, if 3'ou know ? If you don't know, it's all
right. I'm just asking you since we're on this point, because I don't
know myself.
Mr. Lilly. In my diary I was in San Antonio ; I was in Austin, Tex. :
I was in the District of Columbia. I believe my calendar indicates I
was back from the District of Columbia, back to San Antonio. I had
some State legislation that I was concerned with at the time. And I
have forgotten what my calendar — and I have made it available —
my diary.
I had not been in Washington the full week. I had been in Wash-
insfton off and on most of the time during the month of March, and my
calendar will reflect that. How many days, I don't really know.
But I would have had reservations. I would have stayed at the
^Madison Hotel.
Mr. Nicholas. Well, would they be in your name ?
]Mi". Lilly. And it would be in m^' name.
Mr. Nicholas. Well. Avould there be reservations in Dr. Mehren's
name?
Mr. Lilly. Yes, there would be reservations in Dr. Mehren's name.
Mr, Nelson's name, Mr. Parr's name ; Mr. Jacobson stayed at the same
hotel. They would not ha^e been in Mr. Harrison's name. He lives in
the vicinity of Washington ; I'm not sure where.
Mr. Nicholas. Well, do you recall whether or not there was any dis-
cussion at all prior to anyone's arrival in Washington ? For instance,
Harold Nolsoi}, was there anything said by Harold Nelson in San
Antonio?
Was AMPI located in San Antonio at this time?
Mr. Lilly. Yes.
Mr. Nicholas. The main office ?
Mr. Lilly. Right.
Mr. Nicholas. And Dairymen's, Inc. ?
Mr. Lilly. Yes.
Mr. Nicholas. And Harold Nelson was general manager or Avas not
general manager at that time ?
Mr. Lilly. He was general manager.
Mr. Nicholas. What was Dr. Mehren's position at that time, if you
know ?
Mr. Lilly. Dr. Mehren was a consultant for AMPI. He was not on
as a regular employee in the true sense of the word. He was residing in
6113
New York City or thereabouts, and he had been on a consultant fee
basis foi- AMPI since about 1968.
Mr. NicFioLAs. Well, assumino- that Dr. Mehren was at the :Madison
Hotel Avith the other irentlemen, would they have been there before
they went to Mr. Connally's office ?
Mr. Lilly. At the hotel ?
Mr. XiCHOLAs. Yes.
Mr. Lilly. Oh. yes. They had been here. Mr. Xelson. Mr. Jacobsen,
Dr. iVfehren, Dave Parr, had been in Washington all week long.
Mr. Nicholas. They had already been here ?
INlr. Lilly. They had already been here.
Mr. Nicholas. You met them here then ?
Mr. Lilly. T met them here. T Mas in and out of Washington that
pai-ticular week.
]\rr. Nicholas. Wliy weren't you inclu^ted in the meeting in Con-
nail v's office, or was there any reason for that?
Mr. Lilly. No particular reason. I'm not sure.
Mr. Nicholas. Well, who made up the meeting?
Mr. Lilly. Jake Jacobsen made up the meeting, and he made the de-
termination. And at this point Marion Harrison's efforts, influence,
ability to go further with this outside of the legislative process had
come to an end, and this was discussed. And he had exhausted about all
avenues that he knew to approach. And at this point was when Mr.
Jacobsen had come into it and could have some additional input by
goine: through ISIr. Connally.
IVlr. Nicholas. Now in order to get in proper perspective, you testi-
fied that flake Jacobsen is a pei-sonal friend of Secretary John Con-
nally; is that correct?
Mr. Lilly. True.
Mr. NiCHOi^vs. Or Governor Connally?
Mr. Lilly. Yes, true.
Mr. Nicholas. And is Harold Nelson a pei-sonal friend of John
Coimalfy's. if you know?
]Mr. Lilly. Not on a close personal basis, to my knowledge.
Mr. NicimLAS. If you know.
Mr. T^iLLY. I don't know.
Mr. Nicholas. Now. the trip that Dr. Mehren took to Europe, are
you speaking from memory alone as to when he took that trip, or do
you have anything
Mr. Lilly. No, I don't have anv notes or anything. The only thing
that T do recall, we departed on March 18 to i-eturn to San Antonio.
Dr. Mehren was en route to Eui'ope. oi- was i)reparing to go to Europe.
At least he was no longer in Washington ; and he had left a briefcase
with me, and I did carry it to San Antonio.
Mr. Nicholas. Well, is it possible that Dr. Mehren could have
already gone to — taken his flight to make his connection to travel to
Europe before the meeting?
Ml-. Lilly. No, I don't think so. He was in town during the day. He
didn't shoAv up at the meeting on that particular night and at the
hotel.
Mr. Nicholas. All right.
Well, Dt-. IVIehren not being an employee oi- an officer of AMPT at
that time, or for TAPE
Mr. Lilly. Yes.
6114
Mr. Nicholas [contimnnfr]. And beinjr employed only in the capac-
ity of some type of economic consultant in the milk industry, would it
have been likely that he would have been at that meetinc: in that
capacity since he didn't know
Mr. Ltllv. It's quite possible, but T think had he been at the hotel
at that particular time, he would have probably been at the meetiner.
Mr. NiriTOLAs. TVell, did he have any other employers besides AMPT
at that time?
Mr. Lti,lt. Yes. He was employed Avith a — I'm not sure it's the World
Tm])ort-Export Bank — but in some capacity that had to do with import
and export of a<rricultural commodities in New York City. This wns,
his main occupation.
Mr. Nicholas. Well, do you know whether or not he had any con-
nection with the TLS. Government at that time ?
Mr. Lilly. No, T don't. I'm not sure of the tie-in between the ^roup.
Mr. Nicholas. All riffht.
That's all I have.
Mr. Saxders. Just a couple of more questions.
Did you tell us on Wednesday that you had learned that after
Jacobsen and Nelson finished their meetin<r with the Secretary and
were leaving, Jacobsen was called back in ?
Mr. Lilly. Dr. Mehren — T did not learn this until last week. And
when you say the meetings on Wednesday, I'm not sure it was on —
you're talkino; about March of 1971 ?
Mr. Sanders. When I said Wednesday, I meant our meeting with
you this past Wednesday.
Mr. Lilly. Oh, I'm sorry.
Mr. Saxders. T say, did you tell us this last Wednesdav
Mr. Lilly. Yes. I told you at our last meetinsf that last week Dr.
Mehren told me that he and Mr. Nelson and Mr. Jacobsen had met
with the Secretary. They discussed the price sup])ort, find it had been
sti'ictly on this level : and as they were leaving the meeting, the Secre-
tary said, "Jake, T would like to see you a mimite." And there was a
private discussion between Secretary Connally and Jake Jacobsen
without PTarold Nelson and Georce Mehren beincr present.
Mr. Saxders. Before you learned this from Dr. Mehren last week,
you had not known about those facts of Jacobsen beinp: called back in ?
Mr. Lilly. No. T had not.
Mr. Saxders. So that if Mehren in fact did not meet with Secretary
Connally in March 1971, then the circumstances of Jacobsen beins:
called back in had to have occurred in March of 1972?
Mr. Lilly. Well, that would be true. T mean, the same people were
at the same meeting in March of 1972 with the same efentlemen.
Mr. Nicholas. That's not the question he asked you.
Mr. Lilly. What did he ask ?
Mr. Nicholas. He said if Dr. Mehren was not at the March 1971
meetin£r< if it is a proven fact that he is not there, that he wasn't there,
then Dr. Mehren then would have had to be talkini; about the March
1972 meetino;. correct ?
Mr. Lilly. That's ricfht.
Mr. Saxders. Thank you.
Mr. Weitz. Just one other question. Did T understand you correctly,
that to your recollection Dr. Mehi-en had left Washinofton on the 18th?
Ts that vour best recollection ?
6115
Mr. Lilly, I know lie left about that time.
Mr. Weitz. T see.
Mr. Lilly. I know that I was carrying a briefcase, and the reason
I remember the briefcase is he said they had some stocks and bonds in
it that Avere his, and he wanted me to take them to San Antonio. He
wanted me to put them in the vault at tlie AMPI office, which I did.
And he handed me the briefcase, and 1 did carry it back. I mean, I was
res])onsible for gettino- it back. And he was leaving for Europe. I'm not
sure at what date he left. l)ut I know that he was not on the return
trip with us to San Antonio on Fi-iclay night.
Mr. Weitz. I understand. And again, to summarize, without regard
to whether Dr. Mehren had attended the meeting with Mr. Connally
in Mfirch of 1971, and without regard to whether or not Mr. Nelson
had in fact attended that meeting or merely the meeting thereafter
in the Madison Hotel in March of 1971 with you, is it your clear recol-
lection and testimony that Mr. Jacobsen had in fact met with Mr.
Connally shortly before that meeting in the Madison Hotel in March
of 1971?
Mr. Lilly. Well, certainly yes, he would have been there.
Mr. Weitz. All right.
Now I would like to turn back to the period of 1972. You have pre-
viously testified to your knowledge concerning a meeting between Mr.
Kalmbach and Dr. Meliren and Mr. Nelsori and Mr. Jacobsen in
February of 1972.
Now, do you know of a meeting that took place in March of 1972
between Mr. Connally, Mr. Jacobsen, Mr. Nelson, and Dr. Mehren in
Washington? And if so, could you tell us what you know about that
meeting ?
Mr. Lilly. I haA^e notes indicating there was such a meeting held
between Mr. Jacf)bsen, Mr. Nelson. Dr. George Mehren in Washington,
D.C., the days of :March 20, 21, 22, 1972, or :\rarch 27, 28, 29, 1972. And
they did meet with Secretary Connally, and I would assume it would
be in his office in this instance. I don't know where the meeting would
have been, but apparently it would have been, because of my notes, the
gentlemen mentioned above met with Secretary Connally. And Dr.
IVIehren told me of this meeting on April 4, 1972, according to my notes
that I did wi-ite down.
And while present Dr. Mehren told me that Secretary Connally called
John INIitchell in the presence of Jacobsen, Nelson, and Mehren; and
he discussed, first — and these ai'e my words — delaying contributions,
meaning conti'ibutions that the Committee foi- TAPE might make on
behalf of the Bepublican Party, be delayed; second, reducing the
AMPT antitrust suit; and, third, the promise to go slow on an IRS
investigation, this being an IRS investigation carried over from an
audit of AMPI in the year 1968.
My. Weitz. Now, when did Dr. Mehren relate the information about
that meeting to vou ?
Mr. Lilly. On April 4. 1972.
INIr. Weitz. So you're f aii-ly certain of that ?
Mr. Lilly. At least this is what I haA^e on my notes as to when the
conversation was held.
■: Mr. Weitz. Do you remember when those notes were prepared?
m Mr. Lilly. These notes were prepared on or about the time of the
W conversation.
6116
Mr. Wettz. So they were essentially contemporaneous to the meet-
injr?
INfr. Ltij.y. That's true.
Mr. Wtatz. Were they prepared dnrinc: tlie meeting or shortly
thereafter?
l\f r. Lilly. Shortly thereafter.
Mt". Wettz. T see.
Mr. Ltllt. Some notes may have been made durintj the meeting
and then broadened out following: the meetino:.
IMt-. Wettz. Now, when yon say perhaps the 20th to the 22d of March
as 1)einfr the time frame when those rrentlemen met with Mr. Connallv.
or perhaps the 27th to the 29th, is that vour best recollection as indi-
cated in your notes from what von had heard from Dr. Mehren?
Mr. Lilly. Yes. In my notes T have the 20th, 21st, 22d, and then this
was discussed with my wife. She has the dates of the 27th. 28th, and
29th. .And it's about the same meeting, the same people are involved,
and so her notes were written and there is some small difference in —
apparently a week's difference in the dates.
INIr. Weitz. Now. yon were told this on April 4.
Mr. NirTTOLAS. Now, Alan, on that point T would really like for my
client to read into the record what his notes reflect so that you can
draw your own conclusions from his notes that he made, if it is all
riirht.
Mr. Wettz. Let's go off the record for a minute.
[Discussion off the record.]
Mr. Wettz. Let's jro back on the record.
Now, as T started to say, you were told about this meeting on April 4.
The two time frames you have suggested are anywhere from 1 week to
2 weeks prior thereto,
Mr. Lilly. That is true.
Mr. Weitz. Is it possible, or does it refresh vour recollection in any
Avay, for example, if Dr. Mehren had said it had been as much as 21/2
weeks before that, perhaps around the 15th or 16th of March?
Does that refresh your recollection in any way?
Mr. Lilly. No ; it does not.
Mr. Weitz. Did he actually talk in terms of specific days or in terms
of time frame of a week or 2 Aveeks ago ?
Mr. Lilly. Tn terms of time frame.
Mr. Weitz. The second alternative T gave you ?
Mr. T^nxY. Yes.
Mr. Weitz. Tn other words, a Aveek ago or 2 weeks ago ?
Mr. Lilly. That's true.
■ Mr. Weitz. So if he were speakina: to you on A^ril 4 and had said,
according to your notes, 2 weeks ajro, or according to your wife's
notes, perhaps a week before T heard this from Dr. Mehren on April 4,
had he said 21/2 weeks before that or a little over 2 weeks a^o to you,
it might perhaps not have been rlear as to the exact dates rather than —
or as opposed to a time frame baekward from April 4?
Mr. Lilly. That's riirht. I'm sure that in March of 1972 there was a
meetincr; he was reporting to me on a meetinji that was held. And the
dates T think could be easily constructed because calendars are made
out as to activities, where we travel, and this is a matter of record, too.
Mr. Weitz. This would be Dr. Mehren's calendar, for example?
- >. Lilly. All of the people there within the home office.
6117
Mr. Weitz. That's right. But you are clear that sometime, perhaps
in the last half of March of 1971— March of 1972, I'm sorry.
Mr. Lilly. Yes, 1972.
Mr. Weitz. As Dr. Mehren related to you on April 4, he and Mr.
Nelson and Mr. Jacobsen had met with Mr. Connally in his office.
Mr. Lilly. True.
Mr. Weitz. All right.
Now, you have said that he had told you of the matters discussed,
and you said one of your words was that the antitrust suit would be
''delayed"; and you noted in your testimony that that was your word.
Do you recall what his word was ?
Mr. Lilly. "VMiat I have in my notes instead of "delayed," I have "to
slow down its antitrust suit against AMPI at a little later date to a
wrist slap."
ISIr. Weitz. Now. is that your l)est recollection of his word ?
Mr. Lilly. Yes.
Mr. Weitz. Or his phrase ?
Mr. Lilly. His phrase.
Mr. Weitz. And what is your best recollection of his words about
the discussion with regard to the IRS audits of AMPI presently at
that time pending ?
Mr. Lilly. On the IRS all I have in my notes "and promise to go
slow on IRS." This is my wording, but it would indicate that Dr.
Mehren said something comparable to this.
Mr. Weitz. I see.
Well, could you tell me what else Dr. Mehren told you transpired
either at that meeting or other meetings during their visit to Wash-
ington in March of 1972 ?
Mr. Lilly. Yes. Dr. IMehren indicated further while Mr. Nelson,
Mr. Jacobsen, and himself were present with Secretary Connally, that
he called Senator Dole, chairman of the Republican National Com-
mittee. And again, my notes indicate that Senator Dole called — I don't
know if John Mitchell had been called again or not — but Senator Dole
and John Mitchell both agreed to defer any obligations due the Repub-
lican Party, meaning contributions that might be due, but to delay
them until near the general election time.
Mr. Weitz. Do you know whether
ISIr. Lilly. When the heat was off.
Mr. Weitz. That was their language as I'elated to you?
Mr. Lilly. Yes. That was George Mehren's language,
Mr. Weitz. I see.
Do you know whether — or did Dr. Mehren in any way indicate to
you that the amount of the commitment, or the reason for the com-
mitment was discussed with either Mr. Connally, Mr. Mitchel, or Mr.
Dole?
Mr. LiLi>Y. At tbat particular conversation? Is tliat what you're re-
ferring to ?
[Mr. Weitz nods in the affirmative.]
Mr. Lilly, No. I have nothing in my notes, and he did not indicate
it according to my notes.
Mr. Weitz. So it was not discus.sed. and therefore, nothing signifi-
cant, or at least Dr. Mehren related to you nothing significant con-
cerning a discussion of commitments, but were only rather — or the rea-
6118
son for any commitments or the amount of any commitments, but
rather the timing to satisfy commitments that had been made?
Mr. Lilly. True.
Mr. Weitz. Did he in any way indicate that either Mr. Connally
or Mr. IVIitchell or Mr. Dole were aware of the fact the commitments
had been made or the amount of any such commitments ?
Mr. Lilly. Not in tliis conversation to me.
Mr. Weitz. Could you tell us what else was discussed between you
and Dr. Mehren on April 4 ?
Mr. Lilly. Yes; at the same time Dr. Mehren discussed some Com-
mittee for TAPE checks in the amount of $5,000. There would be 30
such checks, and that these checks — at this time he called John Butter-
brodt, B-u-t-t-e-r-b-r-o-d-t, AMPI president.
Mr. Butterbrodt was attending a meeting of Mid-America Dairy-
men in Wisconsin at this time, and he discussed the issuance of 30
TAPE, or Committee for TAPE checks in the amount of $5,000 each
with Mr. Butterbrodt.
And at the same time — I only heard one end of that telephone
conversation, and T would have to assume that Mr, Butterbrodt gave
approval because in time the checks were actually written.
But Dr. Mehren also insisted in my presence — and T might say
that Mr. Nelson was present at this conversation as well.
Mr. Weitz. During the entire conversation ?
Mr. Lilly. During the entire conversation on April 4. That he
wanted to talk with Mr. Kalmbach. And Mr. Nelson attempted to dis-
courage Dr. Mehren from placing a call, but Dr. Mehren did call
Jake Jacobsen in Austin and told him that he did expect to talk to
Kalmbach. And within a few minutes Mr. Jacobsen called back and
told Dr. Mehren that Mr. Kalmbach would call him at this home
that night. And this was to be the night of April 4.
Then Mr. Nelson — and I'm looking at my notes — asked Dr. Mehren
what he expected to accomplish by talking with Mr. Kalmbach. Dr.
Mehren stated that he wanted Mr. Kalmbach and all Republicans to
know that AMPI was not welching on our commitment.
Further, Mehren stated he expected the Justice Department to slow
down its antitrust suit against AMPI and later reduce it to a wrist slap.
Mr. Weitz. I^et me ask you something. To the best of your recollec-
tion, didn't you have a conversation before April 4 with Dr. Mehren
at which time, he discussed with you the results of the March meeting
in Washington? And to tell you that instead of the substantial contri-
butions that were going to be made, some relatively nominal contribu-
tions of $100,000 each to the Republican and Democratic Parties for
their convention programs were going to be made?
Mr. Lilly. Yes ; there was prior to that time.
Mr. Weitz. Why don't we take a break for a minute?
[A brief recess was taken.]
Mr. Weitz. Just to start again, is it tiue that you had met with Dr.
Mehren before, on or before March 30, 1972, and at that time had dis-
cussed the conversation and meeting that he had had with Mr.
(\mnally ?
Mr. Lilly. On March 30, 1972, my notes indicate that there was a
TAPE, a Committee for TAPE meeting held, at which time it was
discussed contributing to the National Democratic Party and the Re-
publican Party.
6119
On March 30 when the meetin<2: of the TAPE Committee members,
and Dr. Mehren presented the thou^L^lit and the idea of getting approval
of contribiitino- $100,000 to the Democrats and $100,000 to the Re-
publicans to be nsed to helj) bear a portion of tlieir expenses*. And I
mi<jht say that there is coriespondence from both the Republican na-
tional headquartei's and the Democratic national headtpiarters cai-ry-
in^ out this conversation, that they anticipated such c(mti-ibutions and
would certainly welcome them to help pay and be a portion of the
national convention.
Mr. Weitz. Yes. Well, in that connection would you look at what I
will identify as exhibit No. 2S, a memorandum from Geor^je Mehren
to John Butterbrodt, W. R. Griffith, Melvin R. Besemer, and Robert
Bonnecroy, of AMPI, with an attached letter dated March 16 to Dr.
Mehren from Robert 'Strauss, chairman of tlie Democratic National
Committee.
Would you identify that for us ?
^ [Whereupon, the document referred to was marked Lilly exhibit
N(\ 'IS for identification.^]
Mr. Lilly. Yes: this was a letter dated March 20, 1072. These were
members of the Committee for TAPE, with a cover letter from Dr.
Mehren, a letter of transmittal of a letter dated March 10, that he had
received from Robert Strauss, chairman of the Democratic National
Committee, indicating some discussion about purchase of 100,000 con-
l vention books at $1 ))er book, whicli wDuld .unoimt to $100,000.
[ Mr. Weitz. Now, T have what T shall mark as exhibit 20, which
appears to be a cover memo, handwritten, from perhaps (xeorfre Meh-
ren, but you will identify tliat to Bob Lilly, dated March 20, savings
"Info, please return to me with Demo letter for TAPE jri'oup here
, on r,-HO" and tlie attached letter of Mairh 27 from R. L. "Dick" ITer-
' man to Di-. Mehren. And it is on stationery from the Republican Na-
tional Convention.
Would you identify that for us ?
[Whereupon, the document referred to was marked Lilly exhibit
No. 20 foi- identificatioji.^]
Mr. T>iLLY. Yes; this is a memo from Dr. M<'hren to me dated 3-20 —
no, 1072, but it would be in 1072. Tt's a cover letter, or the letter attached
' to it is dated 1072. And he was keeping: mc^ advised — we discussed the
■ Democratic letter. Tliis is tlie I\("i)ul)licaii 1ettei\ si<2:ned by R. L. "Dick"
Herman, no title, dated March 27, 1072.
And it indicated that Mr. Ilennan or someone had talked with Mr.
Strauss, treasurer of the Democratic National C\)nnnittee and were
\ aware of n purchase of a number of our convention program books.
Mr. Weitz. "Our" meaninc^ ?
Mr. LifJY. "Our" meaniji<>: the Re])ublican Party Convention books
at their upcoTriin^' convention to be held in 1072, and copies of it did fjo
to Georirf^ Bristol. Don Tvendall. Deke DeliOach, Josephine Good.
Mr. Weitz. Who are thosc^ people?
Mr. Lilly. George Bristol T can identify. He was an employee of
the National Democratic Party. The others T camiot identify.
Mr. Weitz. So these ai-e the coii-espondence. Would these be the cor-
respondence that you referred to representing the request by both par-
ties for contributions with reirard to their convention booklets?
1 Sep p. filSfi.
- See p. r.l80.
6120
Mr. Lilly. Right.
Mr. Weitz. Now, when did you jfirst learn that in lieu of contributions
to the Republican Party that year for the previous commitment — in
satisfaction of the previous commitment, that it was the intention of
AMPI and TAPE to respond to these letters of solicitation, by contrib-
uting $100,000 each to the Rejjublican National Convention and the
Democratic National Convention ?
Mr. Lilly. Well, on March 80 the Committee for TAPE meeting was
held and approval was given for this particular action.
Mr. Weitz. Did Dr. Mehren tell you before that time he was going
to request such action as a result or as a followup to what had gone on in
his meetings with Mr. Connally, Mr. Mitchell, Mr. Dole, in Washing-
ton several weeks beforehand ?
Mr. Lilly. Yes.
Mr. Weitz. So essentially, you had learned of the transactions, what
had transpired in Washington in March 1972, and upon Dr. Mehren 's
return you also leaiTied that in lieu of satisfying some commitments
solely to the Republican Party, for the time being TAPE would con-
tribute to each of the two parties toward the cost of their convention
booklets ?
Mr. Lilly. That is true. And I am secretary for the Committee for
TAPE, and I think that he would haA^e told me this information, that
it was his intention to discuss it with the committee.
Mr. Weitz. Now, getting back to April 4 when you had a discus-
sion with Dr. Mehren and Mr. Nelson was present, was it at that time
then, as you started to tell us before, that this $150,000 contribution to
30 different State committees of the Republican National Committee
would be in lieu of the previous decision to contribute $100,000 to each
party's convention ?
Mr. Lilly. Yes. The idea, or the thought, or approval given to the
thought of contributing the $100,000 to each party would te scrapped
and be abandoned. And it did not happen in fact.
But in lieu of that, $1.50,000 in checks of $5,000 would be contrib-
uted to committees of the Republican Party.
Mr. Weitz. Now, was it your understanding that that $150,000
would be toward or in satisfaction of the commitment made in the
previous year for the milk price support, decision?
Mr. Lilly. I would think so, because he had discussed this, and the
commitments, the checks, wer-e made out in a similar way that they had
been in 1971. There had been discussions — to direct knowledge for- Dr.
Mehren to have said to me that this is a portion of our commitment;
he did not. But this is an assumption on my part.
Mr. Weitz. I see.
Now, did you see the checks that were drawn up ?
Mr. Lilly. Yes.
Mr. Weitz. Were those checks signed ?
Mr. Lilly. Yes, they were signed.
Mr. Weitz. Who signed them, to the best of your recollection ?
Mr. Lir-LY. Dr. George Mehren and Lynn Elrod. E-1-r-o-d,
Mr. Weitz. Now, what Avas Mr. P^l rod's position ?
Mr. Lilly. Mr. Elrod at this particular time was actually treasurer
for TAPE, or Committee for TAPE. Both of them were in existence
at this time, and he did have some official title. Certainlv he was one
6121
of the — ^tliere were three authorized to si^n checks, and Mr. Elrod
was one of the three.
Ml'. Wettz. Now, I have marked for exhibit 30 what appear to be
copies* of 30 checks drawn on Citizens' National Bank, each dated
April 4, 1972, in the amount of $5,000, signed by Dr. Mehren and
Mr. Elrod, with the payee left blank, with the word "Void" written
across the face of each of the checks. And on the same page of each
cneck, a Xeroxed copy of each check, there also appears to be a blank
copy of a receipt to be used for eacli check.
Would you look at these and tell me whether those are in fact the
checks that were drawn up and signed ?
[l^Hiereupon, the documents referred to were marked Lilly exhibit
No. 30 for identification.*]
Mr. Lilly. Yes. They are the checks that were drawn up and signed
that day.
Mr. Weffz. Now. as I indicate the payee, the name of the payee is
left blank. Can you tell us who the payees were to be, or at least Avho
Avas to }>rovide the names of the payees to TAPE ?
Ml-. Lilly. On Ai)rir 4, 1972, during the convei-sation with Dr.
Mehren, Harold Nelson, and myself in tlie San Antonio office, I have
notes here that the $5,000, 30 $5,000 checks, the names to be furnished
via Kalmbach, via Connally, question mark. One of the two were to
provide the names. And this was the information that I had.
Further, I might state that Mr. Nelson — in this convei-sation it was
discussed that he was to deliver these checks on April 6. "WHiere, T don't
know — after tlie payees had l^een provided.
And in addition, my notes also indicate there was discussion that
$100,000 from Mid-America was to be delivered by Mr. Nelsoii, and
that Daii-ymen's Inc. would conti'ibuto $50,000. ]My notes indicating to
me that $50,000 would be cont'-ibuted and delivered by Dairymen's Inc.
Mid-Amei'ica has a political arm, as well as does Dairymen's Inc.
]Mr. Weitz. Now, when you say the names were to be ]>rovided by
either Mr. Kalmbach or Mt-. Connally, question mark, do you know
whether anyone contacted Mr. Connally aftei- the meetings in Wash-
ington in March 1972?
Ml-. Lilly. No, I do not.
Mr. AYeitz. But you do know, or you have told us that at that meet-
ing with Mr. Nelson and Dr. IVIehren the request was made through
Mr. Jacobsen that Kalml)ach be contacted. And in fact. Mr. Jacobsen
called back and said tliat Kalmbach would be calling Dr. Mehren that
evening.
Mr. Lilly. That is true.
Mr. Weitz. Do you know whether in fact Dr. Mehren did talk to Mr.
Kalmbach ?
Mr. Lilly. No. I do not know.
Mr. AYeitz. But in fact, these checks which were drawn and dated
April 4 were voided and the contributions never made?
Mr. Lilly. Yes. And that resulted, according to Dr. Mehren having
told me Air. Kalmbacli called and told him he did not want the checks.
Mr. AYeitz. AVho told you that? I'm sorry.
Mr. Lilly. Dr. Mehren told me.
*See p. 6191.
6122
Mr. Weitz. When did he tell you that?
Mr. Lilly. At alon^j; about the same time. I don't have it in mj'^ notes.
But the checks — this is why they were voided, because Mr. Kalmbach
called and said he didn't want it.
Mr. Weitz. If Mr. Kalmbach called and said he didn't want the
checks, do you have any idea how the idea to contribute the $150,000
possibly in this manner originated in April, March, or April of 1972?
Mr. Lilly. Of course, there had been a convereation between Mr.
Jacobsen, Mr. Nelson, Dr. Mehren with Mr. Kalmbach earlier, either
February or early March 1972 — I'm not sure of the date—in Cali-
fornia. And I have no notes, but I don't know if Mr. Kalmbach did call
Dr. Mehren here or not. I would think — also there was a meeting in
the mciantime shortly thereafter with Secretary Connally ; so to me, the
request for the cliecks could have come from either place.
Mr. Weitz. When you say a meeting with Secretary Connally, arc
you referring then to the meeting in March of 1972?
Mr. Lilly. Thafs true. So the time frame, the meeting with Mr.
Kalmbach, a meeting with Mr. Connally, within a month of each
other.
Mr. Weitz. "\^niat I don't understand is this, though. After the
meeting with Mr. Kalmbach and the meeting with Secretary Con-
nally, both of which would have been finished by the end of March
1972, at that time you were told by Dr. Mehren that contributions —
they were going to go slow or delay contributions until the end of
1972 just before the election ; and that instead, they would make con-
tributions to each convention, each party's convention. Yet, just sev-
eral days later they were again talking about $150,000 plus other
moneys for the other co-ops, and no contributions to the two conven-
tions as such.
Mr. Lilly. That's true.
Mr. Weitz. Now, can you account for that change or possible change
in decision in that short a time ?
Mr. Lilly. No. I don't know.
Mr. Weitz. All right.
Now, one further question with regard to these checks. I notice
the last four checks appear to be smaller in size and a somewhat dif-
ferent type of printed check than the first 26 checks. I wonder if you
could look at those, which will be checks numbered 51 through 54 of
exhibit 30, and tell us if you r-emember- why those checks are diiferent,
why those check forms are diiferent.
Mr. Lilly. Yes, the checks are different. On April 4 Dr. Mehren
told me that they had run out of checks, the size check that this par-
ticular one. the 35 — checks Nos. 35 through 50, and they needed some
additional checks. I mean, I'm son-y, check 25 on exhibit 30. And he
asked me to call Mr. Jacobsen and to deliver some additional checks
from Austin, Tex. to San Antonio.
I did call Mr. Jacobsen and at about 4 p.m., at about 4:30 a Mr.
John Parker, an officer at the Citizens' National Bank, Austin, Tex.
called me and told me that a Mr. Dan Wallace from the bank would
be in San Antonio as soon as he could and deliver the checks. At about
f) p.m. the same day Mr. Wallace did arrive in San Antonio, delivered
the four checks that you see on the back, that are smaller in size and
tliat are different from the other checks. However, they are made
out in the same amount of $5,000.
6123
Mr. Wettz. All right.
And you don't rocall — or did Dr. Mehren ever t/cll yoii of any other
face-to-face meeting;? with Mr. Kalmbach that he might have had
after the meeting in IjOS Angeles in February of 1972?
Off the record.
[Discussion oif the record.]
Mr. Weitz. Back on the record.
Mr. Lilly. My notes do not indicate a meeting, but I am of the
impression, and it seems that I had a conversation with Dr. Mehren.
That at the March 1972 meeting in Washington, D.C., where Dr. Meh-
ren and others met with Secretary Connally, that he did in fact meet
with Mr. Kalmbach in AVashington, D.C. But I have no notes to verify
this.
Mr. Weitz. Off the record.
[Discussion off the record.]
Mr. Weitz. Back on the record.
Mr. Sanders. If I am going over something we have covered before,
I apologize, but I don't have a clear understanding of what Mehren
told you at any point in time alx)ut his February 1972 meeting with
Kalmbach.
Mr. DiLLY. What he told me in 1972 ?
Mr. Sanders. Yes.
Mr. Lilly. In February of 1972 I am aware, and Dr. Mehren did
tell me he met with Mr. Kalmbach. I have also read a deposition that
has been taken by Dr. Mehren
yir. Nicholas. From Dr. Meliren ?
Mr. Lilly. From Dr. Mehren, in the Nader lawsuit versus the Secre-
tary of Agriculture. And there was discussion, and I have had the
privilege and opportunity to have read that deposition, as to their dis-
cussion in California in February.
Mr. Sanders. Now, I would like you to ignore what you learned
from the deposition and tell me v,hat Dr. Mehren himself at any point
in time told you about his meeting with Kalmbach in February of
1972 ?
Mr. Lilly. Dr. Mehren told me that he had met with Kalmbach — he,
INIr. Jacobsen, Mr. Nelson, and — can I go off the record for a minute ?
Mr. Weitz. Yes.
[Discussion off the record.]
]Mr. Weitz. Back on the record.
Mr. Lilly. Following his meeting with Mr. Kalmbach — and I'm
not sure of the date, but it was after the meeting— Dr. Mehren told me
that they had met Mr. Nelson, ]Mr. Jacobsen, and himseU", and upon
meeting, ISIr. Kalmbach asked him when in the hell they were going to
give them the money that thev owed th(>m.
Mr. Weitz. Who said that ?
Mr. liiLLY. iNIr. Kalmbach.
Mr. Nicholas. In order that the record be clear, and this is on the
record, are you talking about a conversation that George said that he
had, that Dr. Mehren said that he had with Kalmbach later after
the
Mr. Lilly. No. This was thp one in February whore they had gone
to California and met with him ; and this was upon his return prior to
having gone to Washington.
6124
Mr. Sanders. Did Mehren tell you this shortly after the February
1972 meeting?
Mr. IjUAjY. Yes, very shortly.
Mr. Sanders. Approximately how long after?
Mr. Lilly. I don't know the date of the meeting, but it would have
been within the next day or the next day or two. Had it been on Fri-
day, he would have told me on Monday. Had he gotten back on Tues-
day, he would have told me Wednesday. T mean, it would have be^n
immediately following.
Mr. Sanders. Did he tell you this in the presence of anyone else?
Mr. Lilly. Not to my knowledge.
Mr. Sanders. And he indicated to you that Nelson and Jacobsen
were present at that meeting with Kalmbach ?
Mr. Lilly. Yes, they were present at the meeting.
Mr. Sanders. And it happened in Los Angeles?
Mr. Lilly. I would assume in California.
Mr. Sanders. In California. You don't know whether it was in Los
Angeles or not?
Mr. Lilly. No. I don't know where the meeting was.
Mr. Sanders. A few days after Mehren met with Kalmbach, then
Mehren told you that when they saw Kalmbach, Kalmbach asked
where in the hell was the money they owed him.
Did they use the term "owed" ? Is that to the best of your i-ecollec-
tion?
Mr. Lilly. To the best of my recollection, yes.
Mr. NiCHOi^\s. His statement was "When in the hell are you going
to give us the money that you owe us." Is that correct ?
Mr. Lilly. Right.
Mr. Sanders. Now, in this conversation with Mehren, when you are
being told that fact, t«il us anything else he said in elaboration of that.
Mr. Lilly. There were possibly other convereations following this.
I know that Dr. Mehren told me that
Mr. Sanders. I'm sorry. Let me interrupt vou.
Mr. Lilly. OK.
Mr. Sanders. On that day when you first learned from Mehren of
his meeting with Kalmbach a day or two earlier, on that day did he
give you any elaboration of this statement by Kalmbach ?
Mr. Weitz. Off the record.
[Discussion off the rexjord.]
Mr. Lilly. The answer — there was another statement made. Dr.
Mehren told me that he told Mr. Kalmbach that he didn't owe him
any damn money, and he wasn't going to pay him any.
Mr. Sanders. Now, I would like you to continue and tell me to the
best of your rexiollection all that Mehren told you on that day about
this conversation with Kalmbach.
Did Kalmbach then come back and respond to this declaration of
Mehren's ?
Mr. Lilly. Ti*uthfully, I can recall that — no doubt there were other
conversations — but all I can remember that Dr. Mehren told me on
their departure that Mr. Kalmbach was rather unhappy with him,
and he was rather unhappy with Mr. Kalmbach. This is about as far
as I can elaborate on the convei-sation, even though I know that there
were other words spoken between the two of us on his report about
this meeting.
6125
Mr. Sanders. Do you have any notes that would provide an elabo-
ration on this conversation between Mehren and Kalmbach?
Mr. Lilly. No. I do not have.
Mr. Sanders. Did Mehren on that occasion or at any later time give
you a better understanding of what Kalmbach might have meant by
the use of the term "owed'' ?
Mr. Lilly. I am not sure that he elaborated further on what Mr.
Kalmbach indicated by the word "owed." Tvater there were meetings.
Mr. Kalmbach seemed to have moved out of contact insofar as Dr.
Mehren was concerned, and Mr. Nunn, along with Mr. Jacobsen,
came into it, and at that time I have some notes that would indicate
what he meant at the time.
Mr. Sanders. Am I covering something, Alan, that you have
covered ?
Mr. Weitz. Off the record.
[Discussion off the record.]
Mr. Weitz. I do have one or two more questions. They're about
this conversation.
Do you know Mr. Kalmbach ?
Mr. Lilly. I have never met him.
Mr. Weitz. You know Dr. Mehren fairly well, I take it?
Mr. Lilly. Yes.
Mr. Weitz. You have worked with him at least several years ?
Mr. Lilly. Yes.
Mr. Weitz. Is he prone to, when he gets excited, to use profanity,
mild profanity?
Mr. Lilly. Either excited or unexcited he is prone to.
Mr. Weitz. So his response of, "I don't owe you any damn money,
and I'm not going to give it to you," would that be in keeping with
perhaps an excited response on his part to the type of language he
would use in that type of situation?
Mr. LiLi.Y. I think it would be, in keeping with the response that
he would give — not an excited response but a typical response.
Mr. Weitz. Now. to your knowledge, after the checks which we have
identified as exhibit 30 were drawn up and then voided, before Octo-
ber of 1972, between April 4 and October of 1972, were there any
other contributions made by the Committee for TAPE — let me limit
it at this point, and we will get to the others later— but at this point
to the Republican National Committee or any committee on behalf
of the Presidents' reelection ?
Mr. Ln.LY. No. There were no Committee for TAPE checks made
to the best of my rex^ollection. And I'm without the advantage of my
Committee for TAPE's notes in front of me. But to the best of my
recollection, from that time there were no contributions made.
Mr. Weitz. Now, did there come a time in October 1972 or some time
late in 1972 just before the ele<?tion when you were told of further
solicitations by representatives of committees on behalf of the Presi-
dent's reelection to Dr. Mehren and other representatives of AMPI ?
Mr. Lilly. Yes, there was. I was told by Dr. Mehren of a
Mr. Weitz. Off the record.
f DiscuSvSion off the record.]
Mr. Weitz. Back on the record.
Mr. Lilly. On the 23d of October Dr. Mehren had a conversation
with me, and he was reporting to me about a visit on Saturday, Octo-
30-337 O - 74 - 18
6126
IxT 21 by Mr, Ximn. T don't ]i<ave liis first name; and T have him as
treasurer of the Repiiblicfins To Re-Eleot President Nixon. And he
liad visited Dr. Mehren in San Antonio on October 21, 1972.
And at this meetinjr on tlie 23d wlien Dr. Mehren was relating this
conversation to me — T have some notes on this conversation, and it
indicates that Mr. Robert Tsham and A. L. McWilliams were present.
Tliey may or may not have been. T have tlieir names on a note to the
side. And I don't know wliether they were or were not present.
Rut according to the notes that I liave, Mr. Nnnn's visit to Dr.
Mehren was to solicit contributions to reelect the President, and ISTnnn
smrixested alternatives for the Committee for TAPE to contribute on
a $750,000 oblicration for the price support., indicatin«x this would «ro
back to 1071 price support. It was an obliofation created at that time.
And these were words that were used by Mr. Nunn. and a^rain,
related to me by Dr. Mehren of a meetinc: 2 or 3 days before.
So Mr. Nunn had in his mind a $750,000 oblitration, and he sujj-
irested ways the Committee for TAPE could fulfill this comuntment or
oblifTfition. And by contributinjr to the Democrats for Nixon, one ; two,
contribute to the Committee To Re-Elect the President; three, con-
tribute $325,000 to the Republican Conp;ressional Campaign Commit-
tee, and $325,000 to the Repul)lican Senate Campaiiru Committee.
Those two fiofures do not add up to $750,000 but this was from the
notes that T did take. And further, my notes indicate that the decision
was that $150,000 was contributed to the House Republican Campainrn
Committee, and $150,000 to the Senate Republican Campaicn Com-
mittee, which did in effect happen.
Mr. Weitz. Now, are you aware — you say it did, in fact, happen.
Do you know when those contributions were made ?
Mr. Ltli.y. On or about this time. T could ^et my Committee for
TAPE records and verify the date.
Mr. Weitz. Well, I haniien to have the Committee for TAPE records
here, the report filed with the GAO, dated November 2, 1972, as re-
ceived by them. Actually, it was filled out and signed by vou on
October '31, 1972.
And on pa<re 10 of schedule D of that report, it indicates that on
October 27, 1972. tliere were a number of contributions made, includ-
incf $150,000 to tlie National Republican Senatorial Camoaiofn, with
the recipient indicated to be U.S. Senators; $150,000 to the National
Republican Concrressional Camnaiijn. and the recipient is indicated to
be IT.S, Conofre^smen ; and, in addition, $02,500 to the Democratic Con-
fifressional Campaiofu Committee, with the recipient desio-nated as U.S.
Congressmen ; $25,000 to the National Republican Campaia^n Com-
mittee, with the recipient indicated to be IT.S. Conjrressmen ; $27,500 to
the National Republican Senatorial Camipaicrn Committee, with the
recipient indicated to be U.S. Senators; and $47,000 to the Democratic
Senatorial Campaiofu Committee, with the recipient indicated to be
U.S. Senators.
Now. would you look at that report, which is si<rned bv vou, and tell
me whether that is correct, to the best of your recollection?
Mr. Ltepy. Yes, it is correct, to the best of mv recollection.
Mr. Wettz. Off the record.
[Discussion off the record.]
6127
Mr. Wettz. Now, with regard to these contributions, obviously we
are not interested in exploring, since it is outside the mandate of the
committee, contributions that were strictly to non-Presidential candi-
dates in the 1972 election.
However, this report and the particular contributions I have men-
tioned indicate that there were contributions to Democratic Congress-
men, or Democi'atic congressional committees and a Democratic sen-
atorial committee, and there were separate contributions to a Republi-
can senatoi'ial committee, and a Republican congressional committee,
but then two other contributions on the same dfte to Republican
senatorial and to Republican congressional committees.
Now, you have indicated, I take it from your testimony, that the
$150,000 contributions, each to the Republican Senatorial and Re-
publican Congressional Campaign Committees, were the result of the
meeting between Dr. Mehren and Mr. Nunn in October of 1972, as an
alternative to Presidential contributions as a satisfaction of the com-
mitment foi" the price support.
Now, let me ask you simpl}^ this : In addition to the facts you have
alieadj^ related, do you know anything about the $150,000 to the Re-
publican Senatorial Campaign Committee and the $150,000 contribu-
tion to the Republican Congressional Campaign Committee that is not
otlierwise indicated on the face of this report ?
Mr. Nicholas. One second off the record.
Mr. Weitz. Off the record.
I Discussion off the record.]
Mr. Weitz. Back on tlie record.
Mi-. Liley. Yes; there was some significance. The original termina-
tion of my discussion with Dr. Mehren, there had been some discus-
sion with the Committee for TAPE members. I don't remember if it
was a telephone meeting, or if it was a meeting in pei'son, but it was
detei-mined that $25,000 each would be given to the Democrats and the
Republicans, both on the Senate side and the House side, making a
total of $100,000.
There wei-e some of the moneys obligated over and above that to
particular candidates, either Republicans or Democrats, and some of
those checks would be an increased amount over and above that to
cover some of those commitments to individuals that we said we would
contribute to, and we did contribute.
On the check in the amount of— what? $62,000 to
Mr. Weitz. $500.
Mr. LiLi.Y. $62,500. I had a conversation with Senator Dole on that
myself.
Mr. Weitz. That was to the Democratic congressional campaign?
Mr. Lilly. All right.
"Wliat was the one to the Republican
Mr. Weitz. Senatorial or congressional ?
Mr. Lilly. Senatorial.
Mr. Weitz. Well, there are two. There is one for $150,000 and one
for $47,000— no, $27,500.
Mr. Lilly. $27,500. There was to have been $25,000, and then it was
increased $2,500 over- and above that. I am not sure who the money was
earmarked for, but I can get the information for you.
Mr. Weitz. Well, I don't think that is germane to our inquiry.
6128
Mr. Lilly. Well, I'm getting into the. other— the $150,000 checks to
the Republicans, House and Senate, Senator Dole, in my conversation
with him — and this was at about the time he learned the checks had
arrived in Washington — was most unhappy, because he had no knowl-
edge of this particular thing happening at all, and we had rather
a heated discussion beLNVten the two of us.
I first started off talking with his administrative assistant, Mr. Tag-
gart. And the moneys, I believe, if this were pursued far enough, it
would be found and determined that these moneys, in effect, actually
went into the Re-Elect Nixon Campaign Conmiittec from both the
House and the^ Senate from the Republicans from the two $150,000
checks, but we reported it as a contribution as we made it.
A cover letter went along with it. Normally, I would write a cover
letter. In this instance. Dr. Mehren wrote the cover letter that did
accompany the checks to the committee. It clearly states there is no
commitment, you can do what you want to with the checks.
This is an unusual procedure, because 99 percent of the letters of
transmittals are over my signature.
Air. Weitz. Well, had you not, in fact, refused to be associated with
this contribution?
Mr. Lilly. I certainly had withdrawn and refused to have any part
to do with it. That is the truth.
Mr. Weitz. When Mr. Dole called, you said he was upset ?
Mr. Lilly. Yes.
Mr. Weitz. Would he normally have l)een upset if he learned that
the committee for TAPE had just made a $300,000 contribution to the
Republican Senate and congressional committees?
Mr. Lilly. He was upset— that was one of the reasons he was upset.
And he was upset, too
Mr. Weitz. I'm sorry. AVliat was one of the reasons he was upset?
He had just received $.300,000 ?
Mr. Lilly. He was upset that he had no knowledge of it coming in.
Mr. Weitz. So he was surprised ? '
Mr. Lilly. As the chairman of the Republican campaign commit-
tee, here was $300,000 coming in, and he had been in conversation with
Dr. Mehren, he had been in conversation with me; he had no knowl-
edge of it, and he was rather irritated that he had not be^n informed
that it would come in. And he was happy to receive it.
But I think what he was really upset about was because we had —
he, too, at about the same time the report went in, he had an opportunity
to look at the report, and we contributed some money to some Demo-
crats and some money had been contributed, and we got off on a dis-
cussion about Kansas politics, between the two of us.
l^iit his real upset — he was really upset because he felt the money
would not be of any l)enefit to come in that late, him not knowing about
it, where would it go, what Senators would be the recipients of it, and
how would it really help them to get them reelected. And this was
rather late in the campaign, and this was — I think he had some inkling
in his mind, even though this was not said, that the money might not
be available for senatorial candidates.
Mr. Weitz. Did he say that ?
Mr. Lilly. No; he did not. I said I think that he might have liad an
inkling in his mind. He did not say it.
6129
Mr. Weitz. I^t me ask you in general, when TAPE or committee
for TAPE within your experience had made contributions to Repub-
lican or Democratic senatorial or congressional committees, was the
money usually earmarked for particular recipients, particular
candidates ?
Mr. Lilly. Some of it would be, yes. I think you will find one made
to the senatorial, Democratic senatorial campaign committee in the
amount of $25,000, and I believe you will find that was earmarked
for Ed Edmondson from Oklahoma. And, of course, at that time or
at a time earlier, I am not sure, it might not be in that particular re-
port ; it might be in another report, some of the moneys, generally —
you have one there for $27,500 ; that — $2,500 of that was earmarked.
The balance of it was not earmarked. Usually, there might be some
portion of it, but only a small portion of it.
Mr. Weitz. All right.
So that, to the best of your knowledge, the transmittal letter said
there were no strings attached and the money was not earmarked?
Mr. Lilly. True.
Mr. Weitz. Mr. Dole did not expressly say that he knew he wasn't
going to have the benefit of that, or no particular Republican sena-
torial, congressional candidates were not going to have the benefit of it ?
Mr. Lilly. That's true.
Mr. Weitz. And, in fact, tlie only basis you have is the conversation
as related to you between Dr. Mehren and Mr. Nunn ?
Mr. Lilly. Right.
Mr. Weitz. About the reason why $300,000 would be contributed?
Mr. Lilly. Thafs true.
Mr. Weitz. Do you have any idea how, if, in fact, that money was
to go to the President, it would have been taken out of those commit-
tees or somehow transferred to the Committee To Re-Elect or some
other committee on behalf of the President ?
Mr. Lilly. I have no idea beyond that.
Mr. Nicholas. May I ask a question off the record before we
leave that point now ?
Mr. Weitz. Certainly.
[Discussion off the record.]
Mr. Weitz. Let's go back on the record.
I have just several more questions about these contributions.
First, let's take those two contributions to the National Republican
Senatorial Campaign Committee.
Now, one was of $150,000 on that day, and one was for $27,500.
Similarly, there were, as I indicated, two contributions on the same
date to the National Republican Congressional Campaign Committee,
one of $150,000, one of $25,000.
Is there any reason you can recall, or any explanation you can
give, why a total contribution was apparently broken down into two
checks each to the Republican Senatorial Campaign Committee and the
Republican Conarressional Campaign Committee?
Mr. Lilly. Well, part of the reasofis for the breaking down of the
contributions, some of the^ — in totaling the contributions that we had
made during the year of 1972 to Democratic candidates and Republi-
can candidates, this would pretty well balance out, total contributions,
equal contributions, to the two parties.
6130
Mr. "Weitz. Would that include the $150,000 contributions?
Mr. Lilly. That would include those two contributions of $150,000
each.
I think, if you would total the fi^ire.s for the year of 1972, you
would find Iie[)ublicans, total contribution to Republicans, would total
slightly more than those to the Democrats, but it was equal — I mean,
fairly well equal.
Mr. Weitz. But is there any sigrnificance to having two checks to
the same committee on the same day ?
Mr. Lilly. Yes, because — maybe I've testified to this — but one of
the checks, the smaller of the two checks to the senatorial committee,
was as a result of a discussion with Senator Dole, who then was the
chairman of the Republican Party. The other had been a discussion
outside and away from Senator Dole, evidently, and Dr. Mehren had
had discussions v^•ith someone outside of my knowledge to make those
two contributions of $150,000. So he originated that, insofar as I am
concerned.
Mr, Weitz. He meaning Dr. Mehren ?
Mr. Lilly. Dr. Meliren. The two for $150,000.
Mr. Weitz. Well, when you say someone outside of your knowledge,
would this be Mr. Nunn, or are you suggesting in addition to Mr.
Nunn ?
Mr. Lilly. I am suggCvSting possibly Mr. ?funn, because he had
been — had recently contacted Dr. Mehren, and I would say it would
have been as a result of his visit.
Mr. Jacobsen also knew Mr. Nunn and had contacted him about
the same time.
Mr. Weitz. Are you saying the only reason for two checks to each
of the two committees on the same day was that one $150,000 con-
tributio?! had l)een arrived at as a result of negotiations with one per-
son, and the other $27,500 was the result of negotiations with a se-cond
pei-son ?
IVfr. Lilly. That's true.
Mr, Weitz. T have no further questions on this matter.'
Mi-. Sanders?
Mr. Sanders. Yes, please.
Off the record.
[Discussion off the record.]
Mr. S.\xnET{S. Tlie GAO repoi-t of October 81, that we have been
makinsT reference to, indicates contributions to various Republican
committees in the total of about $352,000, and to the Democratic
committees in the total of about $100,000.
There is, then, a considerable disparity between those two totals.
Mr. TjIi>ly. True.
Mr. Saxders. Are you savins:, nevertheless, that other contributions
made at othei- times of the vear would t^nd to make the Republican
and Democratic contributions more equal, so that the Republican
contributions only slightly exceed those that Avere made to the
Democrats?
Mr. Lilly. Yes. for the e)itii-e calendar year of 1972, that would be
true.
Mr. Saxders. >\nd are vou i-oferrin.of to contributions made by
TAPE onlv?
6131
Mr. Lilly. By committee for— well, TAPE in the earlier part of
1972, for January, February, and March. And then committee for
TAPE, the successor of TAPE ; the two combined would total that.
Mr. Sanders. In making such a remark, you are not contemplating
any funds that would have been made available by AMPI. as opposed
toTAPEorCTAPE?
In talking about the comparability of funds given the Republicans
and Democrats, you are not, then, taking into consideration any funds
which might have been made available from AMPI resources, separate
and apart from TAPE or CTAPE ?
Mr. Lilly. To my knowledge, in 1972, if this is the year you are re-
ferring to
Mr. Sanders. I am.
Mr. Lilly [continuing]. I am not aware of any AMPI funds from
my knowledge that went in, corporate funds, so to speak, that went
into either the Republican or the Democrats.
Mr. Sanders. All right.
Are you also not taking into consideration any contributions that
were made by Dairymen's, Inc.. or Mid-America in talking about
comparability of contributions?
Mr. Lilly. I have no idea of what moneys— I know of some contri-
butions they have made, but totals, what they had to contribute — ^they
might have contributed the balance between Democrats and Republi-
cans, I don't have that information or knowledge.
Mr. Sanders. You have made mention on a couple of occasions
of a $750,000 commitment.
Is it your understandinir that this much, or approximately this
much, was, in fact, paid to the Renublicans in 1972, or are you speaking
of that as a total paid to Republicans and Democrats in 1972?
Mr. Lilly. No; I am speaking to the commitment. I think, is a
cai'i'vover from 1971, the year in which the price support was increased.
And when I refer to commitmeiit of $750.000 — and I have mentioned
several figui-es, because I truthfullv don't know the amount of the
commitment — but the $750,000 that I referred to in 1972 was a carry-
over from 1971 commitments that was to have been made either in 1971
or 1972, either to complete the total commitment, whatever it was, or
because in 1971. wp did contribute $187,500 in a series of $2,500 checks.
And if you add that $200,000. and if von add $750,000, when we talk
about commitments you (ret close to $1 million again.
Mr. Saxofrs. Off the record.
TDisf^nssion off tlip record.]
Mr. Sanders. Pnck on the record.
The October .SI G.VO renort mentions a $62,500 contribution to the
Democratic Con.q-res'^ional Campaififn Committee.
Do vou havp knoAvledqre of any earmarking of those funds?
Mr. T,TLT,Y. There Avas some earmarkin<T in those particular amounts
of funds. I do not have tho.se records with me, but I could ffet them.
Mr. Sanders. Do vou have knowledge that any of the persons, to
^vhom thosp funds mififht have been earmarked, had anv involvement
in thp AMPI pffort to jrpuerate legislation for milk supports?
Mr. Lilly. That nuestion I ran answer if vou will give me time to
get m v notes, and T don't have those jiotps. T do have the information to
answer your question. I don't know if it did or would have included
6132
people that supported us in our efforts in 1971 to introduce legis-
lation on the price support or not, without referring back to the notes.
Mr. Sanders. Witliout referring to your notes, can you state whether
any of that earmarking was to fulfill any obligation to any persons
in the Plouse for their assistance in the milk legislation?
Mr. Lilly. The commitments, or the earmarking that I made and
that I was responsible for and caused to be committed within a lump-
sum contribution, had no relation. I did not make all the decisions
about the earmarking, and so there might have been — this would have
been someone else within — Dr. Meliren, it could have been the influ-
ence of Harold Nelson relating it through to Dr. Mehren. It could
have been someone else in our organization making the commitment.
But the portions that I had any involvement in were, — no commit-
ments made from carryover from 1971, either to the Republicans or
the Democrats.
Mr. Sanders. And, then, as to w^hether any persons who, for whom
these funds were, indeed, earmarked might have had some — might
have been involved in the milk legislation, you would have to refer to
your notes?
Mr. Lilly. Yes; I would.
Mr. Sanders. And can you do that and so advise us ?
Mr. Lilly. Yes; I can. I sure will.
Mr. Nicholas. May we send them, or could we call Alan and arrange
to mail those to you so that you could have the accurate figures that
he lias in his notes — that Bob has in his notes?
Mr. Weitz. That would be fine.
Mr. Nicholas. Now, that's for the
Mr. Weitz. Contributions on the 27th.
Mr. Sanders. $62,500 to the Democratic Congressional Campaign
Committee.
And the question is whether any of those were earmarked to Mem-
bers of the House who had provided any support for milk legislation.
Mr. TviLLY. You're only interested in the one?
Mr. Sanders. No. Now I am going to the $47,000 to the Democratic
Senatorial Campaign Committee. I would ask the same series of
questions as I have iust asked you for the House.
Is vour answer the same, that vou need to refer to vour notes on
that also?
Mr. Lilly. Yes; it is, on all of those.
Mr. Sanders. So then I would ask also for you to advise us, after
checkinir your notes on that.
Mr. Nicholas. Well, you want to kiiow, actually, then, what his
notes reflect as to whether or not any of those moneys were earmarked,
any of the contributions were earmarked, to any individual for any
assistance they may have given in the price support increase?
Mr. Sanders. True. Except he is saying that he has no knowledge
that it was given for any such assistance.
So then what we are reduced to is providing the names of any per-
sons that were, in fact, instrumental in the milk legislation, whether
it resulted from a commitment to them or not.
Mr. Lilly. Yes. It would be a matter of earmarking any moneys
that might have been earmarked, to point those out, and at the same
time point out if that particular individual might have introduced
legislation in 1971 in regard to the price support.
6133
Mr. Sanders. Yes. Not only intTOdnced legislation, but took any
active support, any active support toward the enactment of that leg-
islation. He might not have cosponsored a bill, but he might have had
some other activity on your behalf, such as making a speech on the
floor of the House, speaking out publiclj^ in favor of the legislation.
Presumably, he would have also cosponsored the legislation, but not
necessarily.
Mr. Lilly. All right.
Mr. Sanders. Could you explain to me in a little more detail this
letter you mentioned which went as a cover letter in relationship to
the two $150,000 contributions ?
Was that a letter signed by Dr. Mehren ?
Mr. Lilly. Yes, it is.
Mr. Sanders. Who was it addressed to ?
Mr. Lilly. Oh, it would be addressed to the — I don't know the name.
It would be the — what would it be ? The chairman of that particular
committe^^ within the Republican ranks, both in the House and the
Senate, and they do have such a committee. It would probably be
addressed to the chairman of that particular committee.
Mr. Sanders. Do you think that these funds were sent by mail, as
opposed to personal delivery ?
Mr. Lilly. Yes ; because I have seen the letter of transmittal, and —
I would have to — I know that I did not deliver them. I would assume
that they were sent by mail ; tliey were not picked up.
Mr. Sanders. Have you furnished us a copy of that letter ?
Mr. Lilly. No.
Mr, Sanders. You don't have a copy of it ?
Mr. Lilly. Yes ; I do have, in the TAPE files ; I don't have it with
me, but in the committee for TAPE files, yes, I can produce tjie letter.
Mr. Sanders. Alan, don't you think we need that?
Mr. Weitz. Well, I have a general comment about all of this, but
I tliink you are certainly welcome to ask for it.
You are talkinff about this as a transmittal letter for all of these ?
]\rr. Sanders. For the $150,000.
Mr. Weitz. Yes.
Mr. Sanders. Don't you think we should have that ?
Mr. Weitz. Yes.
Mr. Sanders. I would lilve a little better understanding of why
you did not want anything to do with the payment of the two $150,000
increments to the Senate and congi'essional campaign committees?
What thinking was in your mind at the time?
Mr. Lilly. Well, this goes back to — and I will have to go back
to 1971. March of 1971. Of course, what limited experience I have
had in the field of, working in the field of legislation, I opposed at
the time the direction and the effort that Mi'. Nelson was going in,
an effort to try to go through the administration to get a price-support,
increase — ^meaning the Department of Agriculture or any other
administration.
A great deal of effort had been spent up on the Hill, contacting
Senators and Congressmen, a lot of them that are friends, acquaint-
ances, that I worked with, that T oot to introduce legislation. We had
other people come in from the far reaches of the TTnited States to
contact their Congressmen and Senators. We had in the neighbor-
liood of 150 Congressmen and Senators; we were well on the way to —
6134
in my projection — we would have had at least 50 percent of the House
and 50 percent of the Senate that wouhl have introduced it.
To have cut across this whole palh and find some other avenue
to get price-support increases when you have had a Congressman
or a Senator to have introduced a bill and be on record to the possibility
of increasing the price of milk to the consumer back home, but none-
theless he was conv^inced enough of the merits of our case that he did
introduce legislation, and I think that we should have continued the
legislative route.
I ain convinced — and I told Mr. Nelson. 1 told ISIr. Parr. I told
Dr. ]Mehrcn, I told Marion ITairison, I told Jake Jacol)sen, during
this conversation that we could pass it. Possibly it would be vetoed.
I doubt if we had the votes to override a veto, but in future years
we Avould have more friends in Congrt^s through having gone this
route and forgetting this other route than we ever would have.
And this is why, from the year of 1971, that I removed myself as
much as T could from this entire operation, because I had a great deal
of falling out with Mr, Nelson over it. Dr. Mehren picked it up and
discussed it; I agreed no further with Dr. Mehren than I did with
Mr. Nelson on it, even though I worked for him and worked in this
particular capacity.
I don't know if I have been responsive to your question or not, but
it is a feeling that I have in what limited experience that I have had.
Mr. Sanders. Well, I have gained the impression that you must
have felt there was sometliing more sei'iously wrong, besides a mis-
take in strategy.
And surely, through the years, you have had differences of opinions
with persons whom you worked over strategy, but which did not re-
sult in your disassociation with their activities?
Mr. Lilly. That's true.
Mr. Sanders. Did you have a feeling, or did you have facts within
your knowledge that there was something unlawful or seriously im-
proper about this contribution, and what was that knowledge?
Mr. Lilly. Well, I think I would back up a little bit farther on
something that is not a matter of record here, but to 1968, to be re-
sponsive to your question, when $100,000 contribution was made, that
I had a considerable argmnent and discussion about and was bitterly
opposed to, I had the privilege of having that information in 1971.
In an effort to try, after the Secretary of Agriculture — and I know
this much about the legislative process — he made an announcement.
I realized he can easily change that announcement if new information
were to come to light, whatever new information might come to light.
But he had made a determination that he would not increase it.
He had macl;' it unusually early, because he had until April 1, and
he made it along about Avhen — March 10, 11, somewhere in that vicin-
ity. I think it was earlier than they would normally make it.
This price support at the time that he did make it was below 75 per-
cent and was not in keeping with what the law actually said, because
it was not up even to the minimum of 7a ])ercent. And even in spite of
that, he said he would not inci-ease it. So I think we liad as good a case
as Ave would have evei- had, be it Republicans ov be it Democrats, to
go the legislative route without anything being e\il or bad or anything
else.
6135
T think we betrayed some of the Conofressmen and Senators with
whom we worked and asked them to put it on. This is a feeling, and it
is not anythinir ille2;al or immoral that I am thinking about. I mean,
this is just a matter of the way I feel.
In the legislative pro€ess, if you go to work on the Hill, and you are
going to pass something, it may be vetoed, but you have got friends
from now on on the Hill. And I am not talking about any contributions
anybody has made, because you tried and you lost. But the next year —
and there is always another year- — that you have got these same prob-
lems comin<r np, you are in a much better liglit to go back to the same
people, and they are going to make a much harder effort, and in 1972
we would have easily passed the price-support increase, and it could
have been easily overridden, any veto that the President might have
given to it.
But consequently, we were in no position in 1972 and 1973 to go back
to Congress, because we pulled off in 1971.
And maybe I am not being responsive to the question, but I am try-
ing to — this is the pliilosophy. This was the tliought ; tliis is my own
feelings about tlie thing, and I feel rather deeply about it.
Mr. Sanders. Did you have any conversation with anj^ Congress-
men concerning the $150,000 contribution comparable to that which
you had with Senator Dole ?
Mr. Lilly. No.
Mr. Sanders. Now, you have mentioned a $100,000 contribution in
1968.
Was that to the Republican Party ?
Mr. Lilly. The $100,000 in 1968 went to Herbert Kalmbach.
Mr. Weitz. In 1968 ?
Mr. Lilly. 1969. I'm sorry. I'm sorry ; on my dates it should have
been 1969 and was.
Mr. Nicholas. So that the record will be clear, he is talking about
August 1, 1969.
Now. on that point, Mr. Lilly, did you have any discussion with your
people — and when I say your people. I'm talking about Harold Nelson
and Jake Jacobsen, he was representing AMPI as lead counsel at the
time — as to vour feelings about this, giving this, whatever it was,
this $100,000 gift, donation
Mr. Lilly. Contribution.
Mr. Nicholas [continuing]. Contribution, what was your feeling
;il)out this, to Harold Nelson and to Jake Jacobsen ?
Mr. Lilly. AV<>11, I won't express my exact language here, but I was
bitterly, bitterly opposed and almost was relieved of my job at this
time because I was so ])itterlv op]>osed to doing this particular thing
and not going through political committees which could be done.
And if my information had been giAcn to me in 1068, the reason
it couldn't go through committees was because Republicans
Mr. Nicholas. 1969.
Mr. Lilly. In 1969. Because the Republicans couldn't trust commit-
tees so it would get to the ultimate source. And I said don't contribute
anything to them if this is really the way that they operate, and I
still feel the same way.
And I made this i-ather strong pitch to Mr. Nelson, and to the
extent that I almost severed relationships with the company at that
time.
6136
Mr. Ntcpiolas. Well, was there any discussion at the time when
this $100,000, Anjxiist 1. 1969— credit, "debit — I mean that yon sijrned
to procure this $100,000 to deliver it to Semei^ who alleg^edly delivered
it to Kalmbach as to the legality or illefrality of it ?
As far as committee for TAPE or AMPT was concerned, how were
they poino; to explain this?
Afr. Lir.LY. Well, of course, this was what later proved to l)f' n
problem, because the statutes at that particular time limited the amount
of contribution you could make to any one individual or any one com-
mittee in any one year, and limited it to $5,000. And this would have
violated that particular thing.
Too. at the end of the year, it would have had to have been reported
one way or the other as inadequate as the reportinir system was at
the time. But prior to the report, it was replaced into TAPE.
Mr. Weitz. Counsel, I don't want to interrupt or impede your ques-
tioning. However. I think the record on Wednesday did elicit and
does have all of these facts — now. if you think you want to proceed,
that is fine, but otherwise it mitrht be preferable to let Mr. Sanders
at l^ast complete questioning with regard to these 1972 transactions.
And if there is something else you want to elicit or question the witness
about, you would be welcome to do so after that.
Tsthat all right, Mr. Sanders?
]Nrr. Saxders. Yes.
Just a couple more questions.
Do von have any knowledflre that the funds which were transmitted
on October 27. 1972. to the Democratic congressional and Senate cam-
paign committees found their way to any Democratic Presidential
candidates?
Mr. LiLiEY. Tn 1972. when some of the moneys, some portion of the
moneys, might have been earmarked for a particular individual, the
moneys would not have been earmarked for a Presidential candidate.
Tf T am correct in the statement that none of the Presidential candi-
dates foT- the Democratic Party were up for reelection at the same
time for Senator. T am assuminc: that they were not.
Tsthat right?
Mr. Saxders. T think tliat's correct.
Mr. Ltley. ok.
Tf that be correct, then, the moneys were — what moneys were out
of those funds earmarked, would have been earmarked for Senators
that weie up for reelection within the Democratic Party or in the
House.
Mr. Sanders. And to your knowledge, you never learned of any of
those funds being subsequently routed to any Democratic- Presidential
candidates ?
Af r. LiLLT. No.
^Tr. Sanders. Do you have a recollection that Senator Gavlord
Xelson was the chief sponsor and spokesman of the legislation in the
Senate concerning milk supports?
Mr. LiELv. Are you referring back to 1971 ?
Mr. Sanders. 1971, yes.
Mr. LiEEV. AVell. he was one of them, certainly.
Mr. Sanders. To your recollection, were any of these funds ear-
marked for him?
6137
Mr. Lilly. No, I don't. I would say this, we have made contribu-
tions to Senator Nelson. They would reflect in the GAO audit, or in
the records prior to that time.
T could oret the records and educe how much and when we did con-
tribute to Senator Nelson.
Mr. Sanders. Do you have any recollection that any of the funds
contributed to him were as a result of any commitment for his sup-
port of the milk legislation ?
Mr. Lilly. No.
Mr. Sanders. OK.
That's all I've got.
Mr. Weitz. I just have a coimnejit.
We discussed this matter off the record on Wednesday, and T think
it is perhaps useful for at least me just to — and you may want to,
undoubtedly, respond, Mr. Sanders, to note for the record that while
it is certainly not my purpose nor my intention to in any way impede
anv of your questioning or the scope of this inquiry today-^I just, as
T say, for the record, do want to note that, while contributions to non-
Presidential candidates in 1971 and 1072 may relate in some way to
the milk price support decision, which is one of the subjects for in-
quiry in this investigation, the predicate, the scope of the committee's
mandate and the predicate for its investigation of the milk decision,
to use a shorthand, is the fact the independent evidence indicates, or
at least there is some suggestion, that that decision was procured in
exchange, perhaps, or at least contemporaneous with, contemporaneous
to, commitments and subsequent contributions to a Presidential can-
didate in 1972 election.
Now, as T say, it is moot todav, because it is not for us to pass on it,
but at least I just want to note for the record that it is not clear to me
that, for example, the earmarking of funds in October of 19.72 to cer-
tain candidates, certain congressional candidates, who were not then
Presidential candidates, is within the scope of the committee's work,
even if they were in some way related — and as yet we have no indi-
cation of that — some way related to their support for milk price sup-
port legislation in March of 1971.
Now, you are welcome to respond, as I know you will, but it is not
by way of objection to close you off. I just want the objection noted
for the record.
^fr. Sanders. T appreciate your remark, and T fully understand
vour position. And T want the record to show that our position is that,
if there is evidence that there were factors influencing the eventual
administration decision to increase the milk price support other than
the allegations of political contributions, by way of justification for —
not justification, but by way of reason for those supports, then these
other influencing factors become extremely relevant to the investiga-
tion, and I think we ai'e entitled to elicit facts in that respect.
In other woids, if the administration received heavy pressures from
Democratic Congressmen to enact statutory supports and to deprive
the administration of any future flexibility in those supports, then
anv political contributions which were made or promised to any legis-
lators for their support of such legislation becomes extremely rele-
vant. And that is the basis for my inquiries in this regard.
Mr. Weitz. All right.
I
6138
I have one other question, and then we can either take a break or
you can move to some other matters.
My question is this, and this takes us back a little bit, but this con-
cerns Mr. Connally.
T believe on Wednesday you were questioned concerning the extent
of your acquaintance and contacts with him over the period of time
preceding March of 1971.
Mr. Lilly. Yes.
Mr. Weitz. And I believe also — well, let me ask you this.
Is it your testimony that while he was Governor of Texas and while
you were engaged as a lobbyist in Texas for, first, the State Farm
Bureau, and then associated with AMPI, that for those several years
during the 1960's, up to as recently as the beginning of 1969, you had
frequent contact with him — and by frequent, perhaps as much as
three or four times a week — in small meetings, sometimes alone with
him, sometimes with one or two assistants, over various matters that
were then pending before the State government, and that he, perhaps,
would have had reason to discuss these matters at length with you at
those various meetings ?
Mr. Lilly. Well, that, basically, is what I did state.
Our legislature meets only every 2 years, limited to a 120-day term,
unless a special session is called, which can be called for 30 days at a
time. This would limit it. And he served — his tenure of Governor was
6 years, or three legislative periods. So it would put me in contact — and
when I say I was in contact, it would be during this 120-day period
that our legislature was meeting during these particular years that he
was Governor insofar as legislative matters were concerned.
So, when you say daily — I mean, that is not a true term in that sense,
or frequently during the legislative sessions, it is certainly true, yes.
iSfr. Weitz. And these contacts, as I recall your testimony, were not
in a large crowd, but rather in a meeting of j^eihaps no more than
several individuals, including yourself and former Governor Con-
nally ?
]\Ir. Lilly. Yes. There would be maybe 2 or 3 other legislators or 2
or 3 other lobbyists, maybe 8 or 10 people, but not large assembly-type
meetings.
Mr. Weitz. And you would speak on many of these occasions
directly with him, and he would speak directly to you?
Mr. Lilly. Yes. I have spoken to him on many occasions about prob-
lems that we had. a certain piece of legislation we were trying to pass,
trying to gain his support as to whether he would sign the legislation
or whether he would veto it, or if there was something in the legisla-
tion that he did not, he indicated he didn't like, to try to amend it or
change it in the committee system so it would meet his approval.
We discussed appropriations for some of the agricultural agencies
that we Avere vitally interested and- increased appropriations ns well.
Mr. Weitz. Did he ever curse in your presence?
Was he prone to curse from time to time ?
Mr. Lilly. Not in mv presence.
IVfr. Weitz. Did he ever get excited in your presence ?
Mr. Lilly. No. No more than — by nature, I mean, he appears to be
excited to me at times, but I mean, he is — this is his normal natui'f
to me.
6139
Mr. Weitz. Would you say that the meetin£:s that you had with him,
or at least many of the meetings which you had with him, were very
formal affairs with people that he was unfamiliar with or fairly in-
formal meetings in which there was a lot of give and take between
those present?
Mr. Lilly. Well, some of the meetings would be with farmers that
I happened to be representing, and he did not know them. I mean, in
the same light that he might know a legislator and probably the con-
versation would be a little more formal, but not a great deal more, be-
cause he isn't that type person. I mean, he is a rather informal person
to talk with, and rather easy to talk with.
I don't know if I'm being responsive to your question.
Mr. Weitz. You are.
But when these other individuals that he was not familiar with were
not present, it was you and some other lobbyists or assistants who he
was familiar with, the conversation was fairly freewheeling and in-
formaUas you put it?
Mr. Lilly. Rather outspoken in what — he would do this or he
wouldn't do that, and you had no misunderstanding about what he
intended to do, and he usually would do it.
Mr. Weitz. Is it your recollection that the Governor has a good
memory for names of people that he met ?
Mr. Lilly. I don't know whether he does or not, on memories of
names.
Mr. Weitz. Is there anything outstanding or particularly unusual
about his memory for names that you can recall ?
Mr. Lilly. Not to me.
Mr. Weitz. Did he ever, during this period of time, have to be re-
introduced to you or reminded of your name by anyone present?
Mr. Lilly. Not that I recall.
Mr. Weitz. So, to the best of your recollection, whenever you met
the Governor after the first or second meeting with him
Mr. Lilly. Well, several meetings.
Mr. Weitz. Well, after several meetings, perhaps, he knew you on
sight and would address you as Mr. Lilly ?
Mr. Lilly. Yes. And on occasions, he has addressed me as Bob, I
mean by first names. -
Mr. Weitz. Does he usually address people by their first names?
Mr. Lilly. Normally.
Mr. Weitz. People that he— would he, for example, when you
brought these farmers along with you who you represented, whom
perhaps the Governor at that time had not met previously, would he
address them by their first names ?
Mr. Lilly. I don't know.
Mr. Weitz. I have no further questions at this time.
If you would like to take a break, or if you would like to move to
some other areas that we haven't covered »-
[Discussion off the record.]
Mr. SA>n>ERS. Since we have talked with you 2 days ago, have you
had any different or clearer recollection concerning a meeting you told
us about with Governor Connally at Page Airways at National Airport
in Washington on March 19 ?
Mr. Lilly. If March 19 — is that on Friday or on Saturday ?
6140
Mr. Sanders. March 19 was a Friday. And as you recall, we searched
the airline logs for that day, and
Mr. Lilly. OK. I have no — I have gone back over it ; I have had an
opportunity to have reviewed it again, and I have no changes to make
in what I have testified to or what T stated earlier this week.
Mr. Saxders. Now, the record, of course, will reflect exactly what
you told us, but it was something to the effect that while you were in a
group there. Governor Connally came into the vicinity. He saw you
and spoke to you, somewhat aside from the others.
Mr. LiLi,Y. He nodded hello to the group and then called me aside.
Mr. Sanders. And then he said to you words to the effect that he
thought things looked good and it was in the bag, apparently referring
to a new, favorable decision on milk supports ?
INIr. Lilly. Yes.
Mr. Sanders. Now, what I wanted to do is just question you a little
further about his conversation with you on that occasion.
Mr. Lilly. All right.
Ml-. Sanders. Do you i-eeall that he actually keyed his conversa-
tion to a milk price decision when saying it looks good, or it's in the
bag?
INIr. LirxY. Well, to me, having had a meeting a day or two before
with some people that had had a conversation with him, and know-
ing that he was aware of it, en route to the airport, T know that Dave
Parr was in the taxi that I was in, Mr. Nelson, and I believe we were
in two taxis, and we saw the Governor — or Secretary Connally —
passed him several times. He passed us in the traffic in getting to the
airport, and this was mentioned at the time, the fact that, there he
goes. And I believe that we waved at him at one time: the traffic was
slowed. And then when we got to the air]>ort, I moan, we did beat him
to the airport, and he did walk in. and this was a very brief meeting.
Apparently his plane was ready to leave.
He was alone. He walked into the airport. We were all in a group, and
he called mc aside and briefly discussed this, and there is no doubt in
my mind that he was referring to the price support problem that we
had pending at that time.
Mr. Sanders. It may be that what he said to you on that occasion
will become a very crucial point, and T would like to establish, to the
best of your recollection, what he actually said, as opposed to what you
inferred from your activity of the past week or two.
Mr. Lilly. Well, it would be most difficult for me to recall the exact
words. And to the best of my ability, I have tried to sum up what I
thought that he said, or words to the effect of what he said. I moan, I
hope T have related that conversation as near as I could.
And, of course, this was in March of 1971. It was some time ago.
But even if I were to pursue it further, I would still come up with
basically the same thing. I have nothing to change in what I have said
in relation to that conversation.
Mr. Sanders. Could he not as well — strike that.
Could Governor Connally have meant that the possibility of legis-
lation looks good?
Mr, Lilly. Well, probably — I would assume anything would be
possible. But, again, I would go back and state that he was not talking
about legislation. I think he would have been — if he is as astute as I am
6141
convinced he is, he would have been well aware of our legislative
status as to how many sponsors or cosponsors we might have had on
the legislation. And I think that that effort, was being handled totally
separate and apart. We had no reason to have gone to him— ^anyone
did — to have talked with him about how we should proceed legislative-
wise.
I think we had the expertise in that field. It's a matter of knocking
on doors and convincing people that you have got a problem and you
need their help.
And any way that I might or could rationalize or rehash or rethink
about it again, he could only refer to the help that could come from an
administrative standpoint, and not from a legislative standpoint.
Mr. Sanders. Could his remarks to you have been as consistent with
general inf or-mation he had learned concerning the trend of the White
House to make some favorable decision for milk producers, as well
as it was consistent with any inside information he may have had con-
cerning a specific decision soon to be made by the White House ?
Mr. L11J.Y. I don't think it could have been a trend. Until the time
he came along, we were convinced that insofar as the White House or
the administration decision, that they were not going to grant an in-
crease at that time. So we had nothing going in our favor, insofar as a
favorable trend from the White House was concerned.
And I had put in a rather long day on Friday getting legislators to
introduce bills to do that. I was certainly planning to be back in Wash-
ington on Monday, hitting the same trail again, doing the same thing,
along with many, many other cooperatives across the country. And we
had no favorable information. So any favorable trend that might have
been coming out of the White House I would have been totally unaware
of. Mr. Nelson would — we were rather discouraged.
Mr. Sanders. Well, inasmuch as he was a Cabinet officer, that type
of information might have been available to him.
Mr. Lilly. It's possible, but I think that that type of information
would have come more from the Secretary of Agriculture rather than
from the Secretary of the Treasury in such discussion. At least, it
would have appeared to me to have gone that route, not through the
Secretary of Treasury. It is a little out of the field.
Mr. Sanders. Now, the de^'ision of the White House was not an-
nounced until March 25, which was 6 days after you saw Secretary
Connally at the airport on the 19th.
Mr. Lilly. Right.
Mr. Sanders. And was it on March 23 that the President met with
milk producers?
Mr. Lilly. Yes.
Mr. Sanders. Do vou know of any indications from events which
transpired between March 19 and March 25 that a decision had already
been made by March 19, other than what was said to you by Governor
Connally?
Mr. Lilly. Not that I can recall. I do know that the next week I was
not back in Washington contacting legislators. The other groups for
the most part had left Washington and departed.
The effort to contact legislators — I would have to go back and look,
but few bills if any. T am sure, were introduced after the 19th. Ap-
parently the effort did slow and stop along that time. And Monday,
30-337 O - 74 - 19
6142
when Cori<rress had gone back in session, there was little effort being
made, some little effort, was still being made, in regards to it, but very,
very little effort on the part of AMPI ; we had practically no one.
Mr. Sanders. Did you not return to Washington on the following
Monday, solely on the strength of what Governor Connally said to
you?
Mr. Lti.ly. If I could look at my calendar. Do you have it?
Mr. Weitz. I would have to get it from downstairs. I will get it,
if you want it.
Mr. Sanders. You mean just to get a date, or do you need notes?
Mr. Lilly. Well, I would like to see notes when I did return to
Washington. I'm not sure I was in Washington on Monday following
that conversation. I was in Washington the next week.
Mr, Sanders. Well, let me couch it differently.
Are you saying that you suspended or drastically curtailed your
legislative efforts solely on the basis of what was said to you by
Governor Connally ?
Mr. Lilly. Yes.
Mr. Sanders. Did you do so in consultation with Nelson?
Mr. Ltlly. This conversation that I had with Connally was related
to Nelson, to Dave Pan-, to others who were on the flight, all AMPI
employees, on Friday night following our return to Little Rock, to
San Antonio, and we were most elated about what the Secretary
had said.
I am not sure of their actions the next week, but it was generally
agreed that we did not have to push any harder on this particular
problem, and we more or less curtailed our activities. I don't know
that anvone gave an order on this, but we felt that we had won the
battle, I mean that it was over, that we weren't going to push on it
any more.
Mr. Sanders. Any curtailment of your legislative effort in the
following week would have been a key item of strategy; would it not
have been something — would it not have meant a decision which you
would have made in consultation with Nelson?
Mr. I/iLLY. He was aware of what Connally had told me. I made
him aware of it, and I truthfully can't recall if he said, "We are not
going to work any more," or "That's it," or what might have happened.
I would say that in a determination of deciding that we still needed
to contact legislators on the Hill to get them to introduce legislation
as to who we needed, how many, I probably would have made that
decision more than INIr. Nelson would have — ^with his approval, but
I would have told him we needed 5 people, we needed 10 people up
there to make contacts; we needed people from certain States because
we didn't have legislators from certain States supporting us that
should be supporting us.
Dave Parr would have some input into the particular same sug-
gestion. So Mr. Nelson would be aware of it, but he would not want
to issue an order on this particular thing in the sense that you pointed
out. Had he said. "Go back to AVashington and start, getting people
to introduce legislation." I would have been back in Washington and
have people introduce legislation, but^ — so I don't know that any order
went out or anything to that effect, that we're all through, we're OK.
Mr. Sanders. Now, in the (^ days after your cx)nversation with Gov-
6143
ernor Connally at the airport, did it ever appear to you that Nelson
had received any independent intellig^ence information that a more
favorable decision in the administration was imminent?
Mr. Lilly. 1 am not sure of Mr. Nelson's itinerary, where he might
have gone the following week. Had T in front of me his itinerary
and who he contacted, this would indicate to me a great deal as to who
he would have been working with.
For one. I think he would have been in contact and working with
Mr. Jake Jacobsen. T think he would have been in contact and working
Avith Marion Harrison, who was a portion and had been a portion of
this all the time. I think Mr. Parr would have been here. I think some
of the leaders from the other cooperatives, particularly Mid- America
and Dairymen's, Inc., would have probably been, involved in conver-
sations.
If I had the advantage of having his diary in front of me or know-
ing his itinerary or where he ^went or who he contacted, T could be
really more responsive.
Mr. Sanders. Did you convey the information from Connally to
anv counterparts of yours in Dairymen's Inc. or Mid- America?
Mr. Lilly. I did not. All of the people in our group were on the
plane, and this was my conA^ersation. If it had been conveyed — and
I'm sure it was conveyed — I think that Mr. Nelson or Mr. Parr would
have conveyed it to Mid-America and Dairymen's, Inc.
Mr. Sanders. Who did you consider to be your counterpart in Dairy-
men's Inc. ?
Mr. Lilly. You're talking about my particular counterpart?
Mr. Sanders. Yes, sir.
Mr. Lilly. At the time, they truthfully didn't have someone in the
true capacity that I was supposed to haA'e been serving in. Currently,
they do haA^e a gentleman by the name of Joe Westwater. He AAas Avork-
ing for them at that time; he still is Avorking for them. He is in this
capacity. This has been 2 or 3 years ago, but he had not had the
experience at that time. So I think he would be the counterpart, as
near as they had a counterpart at that time.
Mr. Sanders. Who did you consider to be your counterpart in Mid-
America ?
Mr. liiLLY. Crary Hanman ; that's H-a-n-m-a-n.
Mr. Sanders. And that would be true AA'ith respect to March 1971 ?
Mr. Lilly. Yes.
Mr. Sanders. That's all, Alan.
Mr. Weitz. Off the record.
[Discussion off the record.]
Mr. Nicholas. Mr. Weitz has been asking some questiois, prior
to this time, as to Mr. Lilly's personal acquaintance with Mr. Con-
nallv.
Mr. Lilly, in that connection, I want to ask you this. For how many
vears haA^e you known Mr. Connallv ?
Mr. Ln.LY. I haA^e known him for at least 12 to 15 years. I knew
him prior to the time that he Avas Governor of Texas, and he was
Governor for 6 years. And then we haA^^had a Governor 4 or 5 years.
vSome 12 to 15 years.
Mr. Nicholas. All right.
Was your acquaintance with Mr. Connally of a professional lobbyist
basis, or Avas it a personal basis ?
6144
Mr, Lilly. It was a professional lobbyist basis and certainly not on
a pei-sonal basis.
Mr. Nicholas. And in most instances would you call him Mr. Con-
nally, or would you call him Governor, or would you call him John,
or what would you call him ?
Mr. Lilly. I called him Governor Connally.
Mr. Nicholas. In other Avords, you would always address him
formally?
Mr. Lilly. Formally.
Mr. Nicholas. That's all.
Mr. Weitz. All right.
We'll take a recess now.
[Whereupon, at 1 :05 p.m., the hearing in the above entitled matter
was recessed to reconvene at 2 p.m.]
afternoon session
]Mr. Sanders. Mr. Lilly, I want to ask you a series of questions con-
cerning an arrangement or agreement between AM'PI and Valentine,
Sherman and Associates. Now, I have read your 3 page statement cap-
tioned "VI. Valentine and Associates" concerning this matter, and it
will not be necessary for you to cover this again.
Mr. Lilly. All right.
Mr. Sanders. I will just ask you some questions designed to amplify
this. You begin by mentioning "July 10 ( ? ) , 1 971 ."
Mr. Lilly. That is true.
Mr. Sanders. Was that date — did that date mark your first knowl-
edge concerning any arrangement between AMPI and Valentine?
Mr. Lilly. Yes. it did. That was my first knowledge of them.
Mr. Sanders. Did you have any knowledge that AMPI had pre-
viously any agreement with Valentine for still other work?
Mr. Lilly. No, I have no — prior to this July 1971 date, no, I have no
knowledge.
Mr. Sanders. A^^at is your general understanding as to the primary
business endeavor of Valentine?
Mr. Lilly. Having visited Valentine, Sherman and Associates at
their office, my impression would be that you miafht, in a loose sense,
refer to it as a public relations firm oriented in the field, the political
field. "V\nien I say PR firm, one that would send out solicitations, mail-
ings, send out;letters, bulk mailinar-type things, one that micrht ha^'e
to use a computer to compile mailing lists to feed other data into it,
but certainly oriented in the political media field.
Mr. Sanders. Did you come to understand that Valentine had an
internal capability to perform these services, the type of service you
have just described ?
Or did they in turn contract it out to other firms or persons?
Mr. Lilly. Truthfully. T do not know. I visited Mr. Valentine at his
office. It was located — T do not have the address here — but it was lo-
cated in a building in whicli a computer and all the equi})ment that
goes witli the computei- was located. It could have been other equip-
ment thnl he could have had time leased on it. It could have been equip-
ment that he had himself with his partner leased.
But it was quite apparent that he had access to this particular com-
puter equipment.
6145
Mr. Sanders. Do you know whether Valentine — and when I use that
term I mean the firm
Mr. Lilly. Right.
Mr. Sanders. Whether Valentine had just recently come into being?
Mr. Lilly. I have no idea of how long he had been in existence, or
operating in this particular wor.k, because this was my first encounter
with him.
Mr. Sanders. Is it your understanding that they are now defunct ?
Mr. Lilly. This I have heard. I don't know it to be true. But I do
understand that they are defunct.
Mr. Sanders. Was it your understanding that the firm was incor-
porated ?
Mr. Lilly. It would indicate it by the way and the manner in which
the checks were made out to Valentine, Sherman and Associates.
Maybe not incorporated. Certainly, a company. T^t me ])ut it in that
way. I really don't know whether they were incorporated or not.
Mr. Sanders. Did it appear to you that Mr. Valentine was the ownier
or principal owner of the firm ?
Mr. Lilly. Yes.
Mr. Sanders. "V^Hiat is his full name ?
Mr. Lilly". I don't know. I have some letters signed by him.
Jack; Jack Valentine is at least the way he signs his letters.
Mr. Sanders. iVnd you have had personal conversations with Mr.
Valentine?
Mr. Lilly. Yes ; on two or three occasions.
Mr. Sanders. Have you had direct contact — or, well, is there a Mr.
Slierman ?
Mr. Lilly. If there is, I didn't meet Mr. Sherman.
Mr. Sanders. Did Mr. Valentine emr mention a Mr. Sherman to
you?
Mr. Lilly-. Possibly. I don't recall it. I only dealt with Mr. Valen-
tine. And I know some checks, some correspondence referred to Valen-
tine, Sherman and Associates.
Mr. Sanders. Your statement indicates that a file was subsequently
prepared after the fact concerning the business transactions between
AMPI and Valentine.
Mr. Lilly. That is true.
Mr. Sanders. Is it vour undei-standing that no contract existed be-
fore Valentine undertook to do this work?
Mr. Lilly. If a contract existed I am not aware of it. It would
probably have been a verbal contract between Valentine and someone
else. Certainl}' not me.
Eventually, a contract did come into being at a time when Mr. Valen-
tine— that I referred to in my notes — but to my knowledge, that is
the onl V contract that we had.
Mr. Sanders. Did it appear to vou that Valentine and Associates
did in fact perform some work, did render some goods or services pur-
suant to some agreement with AMPI.
Now. aside from who might have had the benefit of them, that they
(lid in fact produce some goods or services?
Mr. Lilly. The only knowledare of what services were performed by
Valentine and Associates, at a time — and I have it — they did send me
six tapes, IBM tapes, apparently with names of farmers, including
6146
names, addresses, located in several States. And at a later date, one
single roll of IBM tape reel was sent, making a total of seven tapes
that were received long after the first conference with Mr. Valentine in
regard to this.
Mr. Sanders. Aside from your receipt of these reels, what other in-
formation do you have which would indicate that Valentine did in
fact perform some services pursuant to the arrangement with AMPI ?
Mr. Lilly. Actually, I have nothing else to do— outside of a series of
correspondence that, I'm not sure if it's been made available or not.
But there is available the correspondence which outlines the proce-
dure, the contract, the various things. And outside of that I have noth-
ing else from Valentine and Associates.
Mr. Sanders. The correspondence to which you are now referring,
would that have been prepared genuinely as it occurred, or was that
prepared after the fact ?
Mr. Lilly. This was prepared after the fact. It was prepared after
December 1971, and before March 23, 1972, as a matter of fact in March
of 1972 — ^March 23, I did visit with Mr. Valentine in the airport in
Minneapolis, and he signed and executed all of the correspondence in
the Valentine, Sherman and Associates file. It is in the AMPI files now.
I signed copies at the same meeting at the same time, and the entire
file was drafted at that particular time and signed and executed, in-
cluding the contract.
Mr. Sanders. Alan, do we have copies of all of this now?
Mr. Weitz. "Well, I believe so. This is what I think the witness is
referring to, and you ought to make sure that that is a complete file.
Mr. Sanders. Did they just now give you this ?
Mr. Weitz. No ; we have had this before.
If you're going to provide something else
Mr. Nicholas. No ; I just want to see if it's the same files.
Mr. Sanders. Why don't I just, let you look at it?
Mr. Nicholas. Yes.
[Discussion off the record.]
Mr. Nicholas. You've got one more letter than we do.
Mr. Weitz. Was that supposed to be in there ?
Mr. Nicholas. Yes, it's supposed to be in here.
Mr. Lilly. This has lieen shuffled through a lot of times. But we have
the original in our file.
Mr. Sanders. Well, Mr. Lilly just handed me a series of documents
which Mr. Weitz had previously received. Mr. Lilly has now examined
these with his counsel.
Can you state now, Mr. Lilly, whether these are the documents which
were executed by you in the airport when you met with Mr. Valentine?
Mr. Lilly. Yes ; they had been prepared by Mr. Valentine prior to
March 23. 1972. I had delivered to Mr. Valentine some blank AMPI
letterhead paper, and on March 23, 1972, when I met in the airport with
Mr. Valentine, all of the documents that you have there were executed
at that time by me and by Mr. Valentine.
Mr. Weitz. May we go off the record for a moment ?
[Discussion off the record.]
Mr. Weitz. Back on the record.
Mr. Sanders. None of these documents, then, were prepared con-
temporaneously with the date which they bear?
6147
Mr. Lilly, '^o ; they were not.
They may have been prepared, but they were not executed — with
the exception of one date, I am not sure when Mr. Valentine prepared
the documents.
Mr. Sanders. You have a duplicate set in front of you ?
Mr. Lilly. Yes.
Mr. Sanders. I just want to identify them very quickly and briefly
for the record, so we're sure we're talking about the same spurious
documents.
Why don't I mark these all with the next exhibit number?
Mr. Weitz. That would be 31.
Mr. Sanders. Exhibit No. 31 as follows. A letter of agreement, dated
April 29, 1971.
Mr. Lilly. Right.
Mr. Sanders. A letter from Valentine to Lilly, dated February 1.
1971.
Mr. Lilly. Right.
Mr. Sanders. Let me just continue through them, and interrupt me
only if one is not correct.
]\Jr. Lilly. OK, sir, all right.
Mr. Sanders. A letter from Lillv to Valentine, dated February 23,
1971; from Valentine to Lilly. date<:l March 1, 1971; from Lilly to
Valentine, April 10, 1971 ; Valentine to Lilly, April 17, 1971 ; Valentine
to Lilly, April 28, 1972.
Mr. Lilly. I don't have that one in my file.
Mr. Nicholas. That'sthe one we're missing.
Mr. Sanders. Can you state that that was one that was executed at
the airport?
Mr. Lilly. Yes ; I can.
Mr, Sanders. With attachment ?
Mr. Lilly. The attachment — can we go off the record ?
Mr. Weitz. Off the record .
[Discussion off the record.]
Mr. Sanders. All right, back on the record.
I have shown you the Valentine to Lilly letter of April 28, 1972. All
these others that we have been going through have been dated 1971.
Should that be 1971?
You said you met with him on March 23. 1972, most likely not
preparing a document to come into being thereafter.
Mr. Lilly. The one of April 28. 1972, is a cover letter foi- the attacli-
ment, and it states in there that this is the type layout for your com-
puter programers. And this is the key to the programs tliat he did
send to me.
Mr. Sanders. This letter of April 28, then, is most likely prepared
genuinely on the date it bears ? "
. Mr. Lilly. True. T would say it would be prepared genuinely.
Mr. Sanders. All right, we will lay that aside.
Lilly to Valentine. April 29, 1971 ;' Valentine to Lillv, June 25, 1971 :
Lilly to Valentine. July 15, 1971 ; Valentine to Lillyi October 4, 1971
Lilly to Valentine. October 13. 1971; Valentine to Lilly, Deceml3er 1,
1971 ; Lilly to Valentine, December 8, 1971; a sheet bearing only the
words "that must still be resolved."
6148
Mr. NiOHOiuVS. What was the last letter you read before that last
statement?
Mr. Sanders. Dated December 8.
Ml. LiLJLY. I believe it has no significance. I am not sure it is tied
with this particular correspondence. I have seen the document before,
but I don't tie any significance to it.
Mr. Sanoers. All right, then a series of Valentine, Sherman invoices.
I will read only their dates.
Mr. Lilly. All right.
Mr. Sanders. May 10, 1971 ; May 31, 1971 ; June 10, 1971 ; August 9,
1971; September 1, 1971; September 24, 1971; November 12, 1971;
December 1, 1971.
Mr. Lilly. Right.
Mr. Sanders. You confirm that all of these were executed by you
and Valentine in the airport March 23, 1971. Not prepared there, but
finalized there?
Mr. Lilly. Yes, the invoices that you referred to probably were
sent in at about the time that they indicate on there — separate and
apart, and were not a part of this correspondence, because some
checks had been issued and they had been paid. So I feel that they
had been sent separate and apart.
[Whereupon, the documents referred to were marked Lilly exhibit
No. 31 for identification.*]
Mr. Sanders. To your knowledge, has anyone within AMPI run
or made use of the IBM reels which were sent to you by Valentine?
Mr. Lilly. To my knowledge, no one has made use of them, nor
have they been put on the computer to see if any information is con-
tained on them.
Mr. Weitz. Counsel, if I may interrupt for a moment.
May I refresh your recollection ?
Might it have been possible that several weeks ago, when members
of the staff of the committee were at AMPI, that those reels were in
fact put on the computer ?
Mr. Lii,LY. The reels, at least six of the reels that were in my office —
1 don't know if the seventh reel that was in the safe in the office —
were put on the computer or not.
Mr. Alan Weitz and Andy Chinni were there, and with some of
the AMPI personnel who work in data processing, they did take th«
tape to the data processing machine, and I assume used them. But I
have not heard the results of that. I don't know.
Mr. Weitz. Let's go off the record.
[Discussion off the record.]
Mr. Sanders. OK, back on the record.
Until the time when this committee's staff visited your offices
recently, did you have knowledge of the content of the tape ?
Mr. Lilly. No, other tlian by correspondence that indicated some
information that names and addresses would be contained on them.
But I had no knowledge that the information was actually there.
Mr. Sanders. As a result of the visit of the staff, have you learned
of the content of the tape ?
Mr. Lilly. Yes. Apparently there aie names, addresses, and ZIP
codes on those tapes, and by States in which they are indicated.
•See p. 6193.
6149
Mr. Sanders. Do you know what the lists represent ?
Mr. Lilly. No. I think in the correspondence it refers to lists of
names.
Mr. Sanders. Well now, what you are about to tell me is what maybe
was intended. But what I am asking is what they in fact do represent.
Mr. Lilly. I do not know what they represent.
Mr. Nicholas. I don't think he understands the import of your ques-
tion. I don't think he understands your question, really, as to what
Mr. Lilly. Would you enlarge on your question ?
Mr. Sanders. Is it your understanding that the lists are the names
of dairy farmers?
Mr. Lilly. No. I talked with Mr. Nelson at one time. I asked him
what the lists were supposed to be for, and he said a list of farmers and
not necessarily
Mr. Sanders. Not limited to dairy farmers?
Mr. Lilly. Not limited to dairy farmers, in a series of States — was
being put together. And this was for the purpose of — we were going to
have a mail solicitation on soliciting these farmers in an insurance
program.
Mr. Sanders. Mr. Nelson told you this ?
Mr. Lilly. That's right.
Mr. Sanders. At what point in time ?
Mr. Lilly. That was sometime during 1971 when I became involved
with Mr. Valentine and met him, and was talking to him at that time.
Mr. Sanders. Would that be after July 19, 1971 ?
Mr. Lilly. It would be after July 19, 1971, and it would be prior
to mid-January of 1972. So somewhere in the time of July to January
he would have told me that.
Mr. Sanders. Do you know whether the contact with farmers for
insurance purposes on behalf of AMPI did occur?
Mr. Lilly. It did not occur. We did not — we had insurance, but we
went to insurance companies. We did not have our own insurance
company. And the contacts did not occur. The names on the tapes that
were to be contacted, if they were to be for insurance contacts, were
never utilized.
Mr. Sanders. Can you state any reason whatsoever — let me rephrase
that.
To your knowledge, did AMPI for any reason whatsoever at any
time send out a bulk mailing to categories of persons other than dairy
farmers ?
Mr, Lilly. Not to my knowledge. And I believe that I would have
had some knowledge of it had bulk mailings gone out, because it would
no doubt have originated in the home office in San Antonio, and we
had no solicitation of members outside of our own. I mean of potential
members or of potential insurance customers outside of our own mem-
bers did we have any bulk mailing.
Mr. Sanders. Any solicitation of farmers for insurance purposes,
would any solicitation of farmers for insurance purposes have had to
be limited to dairy farmers ?
Mr. Lilly. No. Well, in our instance I would say that it would have
had to, because we were organized as a dairy cooperative. And we
would have to be limited, not only to dairy farmers, but to dairy farmer
members that belonged, that were members of AMPI.
6150
Mr. Sanders. Who within AMPI had overall responsibility for your
computer services ?
Mr. Lilly. Mr. Bob Isham had overall responsibility for the com-
puters, not the day-to-day operation, the technical part of the com-
puter, but the supervisory people who were responsible for the com-
puters was the responsibility of Mr. Isham's.
Mr. Sanders. When vou received these reels from Valentine, why
didn't vou give them to Tsham ?
Mr. Lilly. T had had a conversation with Mr. Isham in Julv of 1971,
at a time when Mr. Nelpon had requested a $25,000 check, AMPI check
for Valentine. Sherman & Associates. And Mr. Isham at that time,
after issuing the check, asked me what knowledge I had of Valentine,
Sherman & Associates, who they might be, why a check for $25,000
would have been made out and delivered to them apparently by Mr.
Nelson.
And I told him I didn't know. And he was aware of the billings that
did come in from Valentine & Associates. I know that he contacted
Mr. Nelson to set approval for payment of those invoices that would
come in from Valentine, Sherman & Associates. And I personally had
no rea'^on to — maybe I made Mr. Isham aware that the computer tapes
were there in my office, and maybe I didn't. I truthfully don't re-
member.
One of them was actually sent to the computer room, received. I was
called bv Mr. Bob Semer who works — ^he's a programer — 'and he
asked me what I wanted to do with the tape. And I told him he could
put it in the file.
Now, this was a later, after the six had come in, this was a later
receipt — until we received the seventh one that came in.
Mr. Sanders. It would appear, then, that you felt that these seven or
it may be six reels of tape had no genuine value to AMPI then?
Mr. LiLT,Y. No, and it was based on some other conversations that I
had had with Mr. Nelson and Mr. Parr at various times.
Mr. Sanders. Now, you in your immediate response to my question
said. "No." Let me get a clear understanding here.
I will state the question again.
Mr. Lilly. All right,
Mr. Sanders. It appears to me now. from all you have said, that you
felt upon receipt of these reels that they had no genuine value to
AMPI. Is that true?
Mr. liiLLY. That is true, and I would like to enlarge on that answer.
Mr. Sanders. All right.
Mr. Lilly. I had had conversations durinar this time of July 1971
until Janiiarv of 1972 at various times with Mr. Nelson and Mr. Dave
Parr, and I had been given information as to what the total amounts of
monev that would .o-o to Valentine. Sherman & Associates in the amount
of $137,000 would be for. Conflicting stories, but my notes — ^and I did
make notes at or about the time I was given this information.
In one of them I was informed that Congressman Culver of Iowa
would receive $50,000 of this monev : and that No. 2. Governor Hall of
Oklahoma would be fho recipient of $80,000 of this monev; No. 3,
Governor Dockine: of Kansas would receive $25,000 of this monev;
No. 4, Congressman James Abourezk, who was elected Senator in
6151
South Dakota, $7,000; H. H. H., indicating Hubert Humphrey,
$25,000, totaling $137,000.
Mr. Sanders. Who told you this?
Mr. Lilly. Mr. Nelson, Mr. Parr, and at one time Mr. Tom Town-
send also indicated a portion of this conversation. Mr. Townsend
called — I will have to look up the date. I don't have the date, and I
don't have the note in front of me. But I received a telephone call from
Mr. Tom Townsend. He was still working with AMPI. He apparently
was in Wichita, Kans., and it was after Mr. Valentine had been paid.
Mr. Townsend asked for me. He talked with Gary WoofL Mr. Wood
is now the comptroller who replaced Mr. Isham. And Mr. Gary Wood
later told me that Mr. Townsend tried to reach me, and so I called Tom
Townsend. I'm not sure if I called him in Wichita, but I did talk
to him.
He asked me if the commitment — or he had asked Gary Wood, and
again he asked me if the commitment to Governor Dc-ckmg had been
fidfilled. And I told him, insofar as I knew, any commitment we might
have to Governor Docking had been fulfilled. Because we have con-
tributed, the committee — and I say this in the word of Committee for
TAPE funds, or TAPE funds, because we have contributed to
Governor Docking.
But he pressed a little further. He said, I'm not really talking
about — he has a Century Club membership that we contribute to. Tiiis
is a Kansas Docking club, an effort for him to raise money. We had
members of that. We contributed to his reelection. But this was, he
said, "This is an obligation, a commitment we have to him in the
amount of $25,000."
And I told Tom, "Insofar as I know, we've fulfilled all commitments
we have to Docking."
Since that time — I mean, for some reason nothing that Mr. — well,
certainly what Mr. Townsend said, but not in any other light, because
when we were going back to these notes that were made at that time,
I see $25,000 commitment to Governor Docking of Kansas. And pos-
sibly he was referring to the same $25,000 commitment. But I don't
know.
Then too, in talking with Mr. Parr and Mr. Nelson, I have some
notes and I have States listed. They total $140,000. But it indicates,
Iowa, $50,000 of this money would be spent in the State of Iowa. I've
got H. S. N., indicating Harold S. Nelson, that was his statement. Kan-
sas, $25,000, I have D. P., indicating Dave PaiT made that statement.
Oklahoma, $15,000, Dave Parr, D. P. indicating Dave Parr made that
statement. Minnesota, $45,000; H. S. N., meaning Harold S. Nelson.
Minnesota, $45,000, H. S. N., this totaled $145,000.^
At another place, on the — I have checked. And Senator Humphrey
was contributed $5,000 through committee for TAPE. But again, these
notes — I mean the figures may not add. JBut I mean — so, I really don't
know what obligations might have been obligated for these moneys,
what role that Valentine, Sherman & Associates had to play in it.
What the purpose of their having sent the bills to me might have
been for.
Mr. Sanders. Your listing of various funds for these States with
the initials of Nelson and Parr opposite, would you explain to me how
your notes in that respect were compiled ?
6152
Mr. Lilly. My notes, I'm not sure I have the original notes. They
were written on a
Mr. Sanders. Would it have been one at a time, and then you put it
all together?
Mr. Lilly. No ; these were at the same time, at the same meeting.
Mr. Sanders. You learned this information all at the same time?
Mr. Lilly. Mr. Parr and Mr. Nelson were at a meeting together,
and again, I tried to zero in on the Valentine, Sherman & Associates,
what is this. And well, we're getting names together, $50,000 would
be spent in the State of Iowa, and this was what they gave to me at
the time.
Mr. Sanders. Would this liave been after July 19, 1971 ?
Mr. Lilly. Yes, it would have been after July and sometime before
January 1972.
Mr. Sanders. And it would have been a meeting between you. Parr
and Nelson?
Mr. Lilly. Yes. It could have been in San Antonio. It could have
been at a board meeting. I don't know if my original notes, but I do
have the original notes, ami they would reflect approximately what
you see here, excepting it is in my handwriting.
Mr. Sandeirs. Do you thmk an3^one else besides Parr and Nelson
would have been present ?
Mr. Lilly. Tom Townsend, I did mention, "had a telephone call."
He possibly could have been present at this meeting.
Mr. Sanders. At that meeting Parr and Nelson made known to you
that the Valentine — ^that the funds going to Valentine would be allo-
cated tD the various States according to the list that you have now
given us?
Mr. Lilly. That was what they indicated at the time.
Mr. Sanders. Was that the first indication that you had of any break-
down of the funds to Valentine ?
Mr. Lilly. Well, in my notes I think, which you have, I have a sta^te-
ment in the prepared statement, "July 19(?), 1971," I stated about
this time a meeting was held. Harold Nelson, Dave Parr, Jack
Chestnut, possibly Tom Townsend, and others met at the Hubert
Humphrey — met at the home of Hubert Humphrey in New Waverly,
Minn.
And then I state shortly after this Harold Nelson, Dave Parr, and
Tom Townsend told me — I have in San Antonio, and that leaves a
question mark in my mind. I wouldn't be sure about that being the
place that we were committed. And you can see what my notes state.
Mr. Sanders. Now, is what you have just a few minutes ago been
telling me about a meeting between you and Nelson and how you com-
piled the list of State allocations, is that the meeting that is referred
to in the second paragraph of your statement?
Mr. LiLi^Y. I believe that would be. I believe it would be, it would
correspond. I have Iowa, and I have Kansas. I have Oklahoma, and
Minnesota.
Mr. Sanders. You think that would be the same thing ?
Mr. Lilly. I think that would be the same.
Mr. Sanders. So you indicate there tliat this is occurring shortly
after July 19?
Mr. Lilly. The meeting between them ?
6153
Mr. Sanders. Yes.
Mr. Lilly. Well, I'm not — when I say shortly after, this could have
been 2 weeks. It could have been a month. It could have been 2 months.
Mr. Sanders. OK.
Was it made known to you what would happen to those funds after
they were received in those States?
I mean at that meeting, now.
Mr. Lilly. I truthfully can't remember at what point Mr. Nelson
informed me that Valentine and Associates were putting together a list
of people for mailing for insurance solicitations. My notes are not that
complete, and I didn't make note of it. I didn't refer to it in my notes.
I don't believe I have any notes on it. And I would not rule out the
possibility of it being stated here.
But on the other hand, I would not say that he told me at this par-
ticular time.
Mr. Sanders. Later on in your statement, you say that the break-
down according to individuals, which totals $137,000, was given to you
by someone at AMP I.
Do you know who it is ?
Mr. Lilly. I have several notes, and at one place I have, I mention
the Tom Townsend telephone call. At another time, I have some notes,
and part of these are in my handwriting, and part of them would be
in Dave Parr's, and part of them would be in the handwriting of Tom
Townsend — figures. And I believe it is on a small piece of paper. It is
somewhere in my files. I mean, I could get it.
And again, when 1 say, this is at least who I tie to having met again,
Dave Parr and Tom Townsend at some time dunng this period of time.
So when I say someone at the office, I would tie it down to those two
people.
Mr. Sanders. Did you learn the means by which these funds would
ultimately be received by these individuals?
Mr. Lilly. No, I don't know that. I know that the invoices were sent
in. The checks, AMPI checks were sent to Valentine and Associates.
But I didn't pursue it any further.
Mr. Sanders. Did it appear to yon that Valentine was in fact doing
some work for the money being received from AMPI, even though the
r-esults were not for the benefit of AMPI ?
Or did it appear that it was a total conduit for funds to be paid out
ro these various persons in several States ?
Off the record.
[Discussion off the record.]
Mr. Liixy= In answer to your question, I have an opinion that there
IS a good possibility that the tapes that were mailed to AMPI office by
Valentine and Associates at a later date, could well have been prepared
at another time. I am not sure that the money spent here went to pre-
pare those particular tapes. I have no way of knowing that.
But I don't know how long it takes to accumulate names. But I
looked the other day when Mr. Weitz was there, and I noticed, Iowa,
20,000 names. And I may be wrong, but to compile and, if most of
these tapes — I do know that the reels can contain up to 20,000 name^.
One of the computer people told me that — if six reels or seven reels
of tapes, and for each one of them to be near full, to compile 100,000
names, or 140,000 names and addresses and zip codes in that short a
6154
time, from Jul}' until 1972, it would take a lot of computer work and a
lot of people workiujir. And Valentine and Associates didn't appear to
be this largre a type of operation to me. So I am not sure that the tapes
had not already been prepared, and were just merely sent down as a
completion of the cx)ntract. I really don't know.
Mr, Sanders. You say between, July 1971 and February 1972, you
say you think that's not enough time for them to have done this work ?
Mr. Lilly. I don't know where they started from. I mean, if they
had the names and all thev had to do was to put them together. But
if you're goings to get ZIP codes, you're going to get names, you're
going to get addresses, and be accurate about it, and assume that they
are accurate and they are meaningfully representative of the State,
it would take a great deal of time and a great many people to do this.
So the time factor alone, to me — I mean, it would not be impossible,
certainly. But it would rule out a lot.
Mr. Sanders. There are various possibilities here that I see, and I
realize that your answer may be No. 1, totally speculative, or No. 2,
an educated opinion based on a number of bits of circumstances that
you have learned, or No. 3, it could be based on substantial facts.
But I would like you to give me an answer to one of these possibili-
ties. That is, that funds, the payments which AMPI made to Valentine,
were to pay for work which Valentine did of that equivalent value.
That is one possibility. And that those, that the work done then went
for the benefit of various political candidates or committees in. the
States.
The second possibility would be that Valentine did no work what-
soever, and merely channeled the funds received to various individuals
in the various States.
And the third possibility might be that they did in fact some work,
but not of the total value of $140,000, and thus their billings were
somewhat inflated, and they were able to channel some funds to the
pei^sons in the various States.
Mr. Nicholas. May I interject one thing so the record will be clear
on this?
I think that Mr. Lilly's answer should be predicated upon what he
personally knows about Valentine, Sherman Associates, what was done
with the computer tapes by AMPI or committee for TAPE, and
what, if anything, anyone in the organization told him about this
Valentine, Sherman Associates file, because he only knows what was
told to him. Now, if you want just his opinion we could give you that
re^nl easy.
Mr. Sanders, First, I want to know if he has learned along the way
of any circumstances which would tend to show which of these alter-
natives were correct.
Did you learn of any circumstances bearing upon any one of those
circumstances ?
Mr. Lilly. No. Truthfully I don't know, and any one of them could
have been a possibility.
Mr. Sanders. Did anyone ever tell you anything that would be rele-
vant to indicate that some one of those alternatives was correct?
Mr. Lilly. No. Possibly the reason — I would have pursued it further
at a later time. Mr. Nelson — of course, we changed management — Mr,
Parr left our employment. Tom Townsend left our employment. This
6155
transaction of the sisrnin^ of the documents and whatnot actually
transpired after they had left, and this may have been the reason.
Maybe I'd have had an opportunity to o:ain more information, but this
is as far as I have ever gotten on it. And it really is. And after receiv-
ing the reels — —
Mr. Sanders. I'd like to go off the record.
[Discussion off the record.]
Mr. Sanders. All right, let's go back on the record.
The second paragraph of your statement makes mention of a meet-
ing between several AMPI officials and rlack Chestnut at the home of
Senator Humphrey.
Mr. liTLt.T. Yes.
Mr. Sanders. Who conveyed this information to you ?
Mr. Lilly. Mr. Nelson. Mr, Parr, and Mr. Townsend. I mean, I tliink
they conveyed it. T believe it says, at about the same time Harold Nel-
son, Bob Parr, Jack Chestnut — oh. T mean in the second sentence of
that — shortly after this meeting. Harold Nelson, Dave Parr, and Tom
Townsend told nie that we were committed.
In other words, the three of them told me about it. I say in San An-
tonio, and T put a question mark bv that. Probably it was in San An-
tonio, but the three people informed me about it.
Mr. Sanders. Now, that sentence is a little bit hard to understand in
the context of everything else. In other words, it infers that the com-
mitment is for the total amount to go to Humphrey and Mills?
Mr. Lilly. True,
Mr. Sanders. And yet, later it is broken down to individual politi-
cal figures in the various States ?
Mr, TiiLLY, That is true.
Mr. Sanders. Can you reconcile that ?
Mr. Lilly. No. I'm reporting here what was given to me at different
times during this short interval of time from July 1971 until Janu-
nrv. So then, given bv the same people, two or three different versions
of what actually happened and what the purpose of this Valentine,
Sherman and Associates money was for.
Mr. Sanders. Although Humphrey appears again in your subsequent
breakdown, Mills does not ?
Mr. Lilly. That is true.
Mr. Sanders. Do you have any further explanation for that?
Mr. Lilly. No. Aarain, I am not — well. T mieht have some explana-
tion to this extent, I don't know at what time in the PrCvSidential cam-
paign that Mr, Mills might have stopped pursuing the possibility of
being the nominee. I know that Senator Humphrey stayed in a rather
lono- time. This miirht indicate that the notes, the latter notes that I
have on here, given at a later date, you understand, than those that
were written on the first paafe of the statement. There miight have been
some change in plans. I really don't know.
Mr. Sanders. The second parasrraph indicates $50,000 for Minnesota,
the last $."^.000 to cro to Humphrey from TAPE. And yet, on the second
page breakdown by State figures, $25,000 appears opposite H, H. H,
Can vou reconcile those two differences ?
Mr. Lilly. No. On the second rsage, these are another set of original
notes. Maybe T could identify who gave them to me. And this was at a
later meeting, past this one. Again, another set of notes that I took
6156
down on the same — even though it does not — well, this one actually
totaled out to $137,000. The other one ^vas $140,000. And if it is meant
that H. H. H., that the money was spent in the State of Minnesota, I
don't know. But this is the way that I did write my notes down at the
time. And I will get my original notes, and there might be an indica-
tion as to either Tom Townsend and Dave Parr, Harold Nelson, who
I might have been talking to at this particular time when this set of
notes were made.
Mr. Sanders. Does it appear to vou that all payments were made by
AMPI?
Mr. Lilly. All payments were made by AMPI ?
Mr. Sanders. Does it appear to you that Humphrey did receive an
additional $5,000 from TAPE in this connection ?
Mr. Lilly. I believe that — not having the TAPE records in front
of me — ^but I believe we did make a contribution out of Committee for
TAPE, and it would reflect at the time — I mean, in the Committee for
TAPE report that we make. But if my memory serves me right, I
believe we did make a $5,000 contribution.
Mr. Sanders. How many meetings did you have altogether with
Valentine?
Mr. Lilly. I went to — well. I had a number of telephone conver-
sations, but actual meetings — T went to Minneapolis to see Mr. Valen-
tine. T believe Mr. Valentine was in San Antonio at one time during
this interim. His billings had been coming in. He had not been
paid quite as frequently as he thought he should be paid, and he was
down to possibly see me, possibly Mr. Bob Tsham. the comptroller, or
maybe Mr. Harold Nelson. And then I went to Minneapolis at another
time to sign these documents. That means I was in Minneapolis two
times and he was in San Antonio one time, to the best of my recol-
lection, during this period of time.
Mr. Sanders. Have you had any conversation with him, either in
person or by phone, since — oh. I'm sorry.^
What was the time of your last meeting with him?
Mr. Lilly. Mv last meeting, actually, was March 23, 1972.
Mr. Sanders. You've had no contact with him since that time?
Mr. Lilly. Well, there was another letter where he sent me a key
to the IBM reels. I have forjrotten the date of it.
Mr. 0'Hani>on. April sometime.
Mr. Lilly. July 1972, is that it?
Mr. O'Hanlon. April 23?
Mr. Lilly. April 28, 1972, and that was the correspondence. T don't
know if it was, if there was a telephone call in connection with that or
not. But that is about — cited from correspondence, or possibly a tele-
phone call. I have had no further contact with him.
Mr. Sanders. The letter from Valentine to you dated April 28.
1972, states that you will be receiving listings for North Dakota and
Iowa. Did you subsequently receive them ?
Mr. Lilly. I have seA^en reels in all. One of them may lap over in two
States. T believe I receiA'ed six of them in one mailing and one of them
separate in another mailing. Maybe I received five and two, I'm not
sure of that. But I do believe I have seven reels.
Mr. Sanders. Then he says he is anxious to complete the project
and proceed with the direct mail program for life insurance and
Cheese House.
6157
Do you know of any further action by AMPI with respect to that
statement ^
Mr. Lilly. No.
Mr. Sanders. Did you take, upon receiving' this letter from Valen-
tine, did you take anv action on the basis of this mention of life in-
surance and Cheese House?
Mr. Lilly. No; I did not.
Mr. Sanders. Did you have any conversation with Mehren about it ?
Mr. Lilly. No; it would have been Dr. Mehren fit the time and I
liad no conversation with him. As a matter of fact, it was placed in
the file and
Mr. Sanders. You're saying: that it was perfectly obvious to you that
the tapes did not have as a purpose the life insurance proofram or
Cheese House?
Mr. Lilly. Well, there's every indication of that, because no one
within AMPI had made any effort to get concerned about the tapes
and the names that Valentine was to get together. They had been
there for some time. And so it is evident to me, yes.
Mr. Sanders. You must have thought, then, that he was stating
this so as to complete the documentary record ?
Mr. Lilly. T think, in some of the documents, it might tie back
into — if you read them closely — to some of the information that he
had prepared, and it would be in keeping with the entire correspond-
ence file that he prepared about this list of names.
Mr. Sanders. Would you ha^'e thought that he was making a state-
ment like that in order to make the file look legitimate ?
Mr. Lilly. To close it out, yes.
Mr. Sanders. When in fact this was not true to the best of your
knowledge?
Mr. Lilly. Well, he closed out the file, but
Mr. Sanders. "When in fact the intention for the programs was
not. true ?
[Discussion off the record.]
Mr. Sanders. Back on the record.
As each Valentine invoice was received, did it come to you ?
Mr. Lilly. Yes. Well, no. T believe the invoices were mailed to Mr.
Tsham.
Mr. Sanders. They say, "Attention Bob Lilly."
Were they routed thi-ough you before payment?
Mr. Lilly. That's quite possible. T don't remember.
Mr. Sanders. Now, the copies we have bear no handwritten mark-
ings Avhatsoever.
Would these copies have been made before processing?
Mr. Lilly. Thev must have been, because I haA^e
Mr. Sanders. Or maybe they are copies of the Valentine file?
Mr. Lilly. T have copies of invoices. My copies of the invoice 459 —
Do you have a copy of invoice 459 ? — up at the top of that T have "OK,
B. A. L.", indicating T approved that for payment.
Mr. Sanders. T see that.
Mr. LiLT,Y. Invoice 460. dat<^d September 24, "OK," up at the top ;
invoice 415, August 9, it says. "Attention Bob Lilly." T see no signa-
ture on it, no approval mark, nor do I on invoice 168, directed to me,
nor is there any approval mark of mine or anyone else's on invoice
168. Invoice 157 has no markings or approval of mine. Invoice 474 has
6158
the approval of H. S. N. on it, indicating Mr. Nelson approved that
one. The same is true on invoice 473, November 12. Mr. H. S. N. ap-
proved that one.
I believe, if you were to pull out the actual invoices that are in the
file, you would find stamps and signatures — I mean, we have other
identification as to the account it's charged to. and other notations
marked on it. So I am not sure when these particular copies — pos
sibly they were made at the time they came in to me, I put the OK
on them, T sent them on to Bob Isham for payment. But I believe the
actual invoices that were actually paid that were sent in by Valentine,
Sherman & Associates, and not the xeroxed copies, would give you
more information as to who handled them and how they were handled
there within the office. I think they would still show, those that I have
my signature on or my initials on, would still have the same initials
on them. Then the ones with Mr. Nelson — I am not saying I did not
approve those that did not have any initials on them. I possibly could
have.
Mr, Sanders. Your statement indicates in the second paragraph
tliat there were still possibly others in attendance at the meeting in
the home of vSenator Humphrey ?
Mr. Lilly. Yes.
Mr. Sanders. Can you now add any dljbher possible names to that?
Mr. TyiLLT. There is one person that possibly could have attended,
an employee of AMPI, Mr. Joe Johnson.
Mr. Sanders. Was it ever indicated to you that Senator Hum-
phrey was present?
Mr. LiiJ Y. From the statement of Mr. Nelson and Parr and Town-
send it certainly indicated to me that Mr. Humphrey was present,
because
Mr. Sanders. Now, your statement does not so indicate.
Mr. Tvii,LY. Well, mv statement indicates in the second paragraph
that there was a meeting at the home of Hubert Humphrey in New
Waverly.
Mr. Sanderss. Are you saying that you meant to say by that that
he was himself also present ?
Mr. Lilly. Yes ; I did.
Mr. Weitz. I have a few questions.
When Dr. Mehren replaced Mr. Nelson. Januarv 1972. even though,
bv the records which we have, althousrh the invoices were apparently
paid, did you have occasion to discuss this matter with him at any
time ?
Mr. Lilly. With Dr. Mehren ?
Mr. Weitz. Yes.
Mr. T>iLLY. Tt has only been of recent times, within the last month
or 6 weeks, that I have mentioned Valentine, Sherman & Associates.
Mr. Weit7. a nd he never asked you what their billinirs represented ?
Mr. LiLi-Y. No, T am not sure, after the chancre in m.anaffement,
that he actuallv saw the billincrs that did come in after he became
.<^eneral manacrer, and T am not sure — unless there are other billings
than what T have, all the billinsTs would have been paid prior to the
time he became s'eneral manager.
Mr. Weitz. Well, besides billin.<rs, the accounting year for A1\H*T.
as T understand it, is Julv 1 to June 30.
6159
Mr. LiT.LY. True.
Mr. Weitz. So, for example, the 1971-72 fiscal year for AMPI
would include, for example, the financial statements for those periods
would include a breakdown. I have seen those breakdowns, and they
include, for example, moneys paid to Valentine, Sherman and Asso-
ciates. Do you know whether Dr. Mehren ever asked you or anyone
else in the organization what those expenses represented?
Mr. Lilly. I do not remember them having asked me. They could
have asked Rob, or I assume someone else, but I did not have any con-
^'ersation about it.
Mr. Weitz. All right.
Now, do you know of any connection between these transactions
involving Valentine, Sherman and Associates and either Bill Connell
C-o-n-n-e-1-1, or Ted van Dyk?
Mr. Lilly. No. Bill Connell — and it would be hard for me to put a
date on it, did, or was, employed, and I have very little information
about it, to produce a film of some kind. I have even forgotten w'hat the
film was to have been on. I think the total cost of that project was to
have been in the neighborhood of $100,000.
I do know, at one of the AMPT board meetings, that Mr. Connell
was present, and — oh, possibly 10 minutes of the board's time was
taken by Mr. Connell projecting a few slides on a screen, as to some
ideas that he might have been developing for the dairy industry, and
I do not even remember what those slides — possibly it was a movie.
Wliat I do remember is having made a board meeting, and taking a
few minutes of time, and that has been some time ago. I believe it was
after the change in managers from Mr. Nelson to Dr. Mehren. If any-
thing ever materialized out of that, I am not aware of it, so I do not
know a ffreat deal more about it.
Mr. Weitz. Was Mr. Connell in fact hired and paid any moneys in
connection with that presentation ?
Mr. Lilly. I do not know that — oh, you mean at that particular in-
stance ? T do not know that either.
Mr. Weitz. Or subsequent to that?
Mr. Lilly. T do not know. I do not have the records on it. I had no
connection with it, and I am not
Mr. Weitz. But you do not connect Bill Connell in any way with
these transactions that we talked about of Valentine, Sherman?
Mr. LiT,LY. T know Bill Connell quite well. T know him to be — I have
worked in political campaigns quite frequentlv, and quite effectively,
and it is certainlv not too hard for me to think that it might have been
some tie-in but I have no way — no one discussed it with me, and I have
no firsthand knowledge, and it is hard for me to go much further than
that on that.
Mr. Weitz. A^Hiat al)out Ted van Dvk ? Do you connect him in any
way with this? In other words, was his name ever mentioned in con-
nection with this transaction ? Did you ever discuss the matter with
him ? Did any of the others, either Mr. Valentine or anyone else, dis-
cuss his name or his firm in any way in connection with these Valen-
tine transactions?
Mr Lilly. No. I certainly do not recall it, and I think that either
Tom Town^end or Dave Parr would be the individuals that were with
AMPT that could give yon an answer closer than I could on it. I mean,
6160
T have had an association, too, with Ted van Dyk in other things in
past years. But I do not remember it in connection with the 1971 or
1972 election, with the fihn that Connell was to produce.
Mr. Wettz. Now% we have gone through your statement; Mr. San-
ders has, certainly, at length with you; and, as he has pointed out,
initially, you raised, or you reflected early discussions which mention
Mr. Humphrey and Mr. JVIills' commitments to them in this regard,
and then later Mr. Mills' name does not appear, and Mr. Humphrey's
does, as well as other parties.
Xow. do you know to what extent, if any, any of these moneys either
were expended on behalf of, or actually were contributed to. Presi-
dential candidates in, the 1972 Presidential election?
Mr. LiM.Y. No; I do not.
jSfr. O'Hanlon^. Do you know when Senator Humphrey last ran for
election as Senator?
Mr. Lilly. 1970.
Mr.O'HANLON. 1970?
Mr. Lilly. Yes, sir.
Mr. 0"Hanlon. You had indicated in that list that $25,000 of that
$187,000 went to HHH.
Am I correct in that ?
Mr. Lilly. Yes. That is what my note indicates.
Mr. O'Haxlon. Would you laiow whether that would be for his
Presidential effort, or whether that would have related to something
else?
Mr. Lilly. Here is a copy of my — this is a xeroxed copy of my note-s,
and on this, I have just HH, 25, leaving off three zeros on that. I have
several others; these are invoices and check numbers, what they were
paid. The States that were paid. On this particular page, I have some
other notes that you have seen, you see Minnesota, $45,000. and I be-
lieve on the other one it was less, JSIinnesota $5,000. 1 do not know what
it said on the other-. But anyway, that is a total of $140,000. This is
where I have HSN" or DP's, Dave Parr's initials beside this. So it is
quite easy, if I said Minnesota, I could have put HHH m the same con-
text. It is pretty hard.
I have another page of notes here. I knew that I had them and a
xeroxed copy. In a portion of this. I have "I~)ave Parr, notes," and the
T'eason I did is because he gave me this. I ha^e November 10, 1971 as the
date on it, and I have, over to the left, "Dave Parr, notes." meaning
that this is actually his writing. A portion of it is mine; and he put on
$15,000, Oklahoma — I put the Oklahoma in — I mean he put the figures
down, and I wrote in the amoinits 25, and then I wrote Kansas over
to the side of it; 10, and he has — looks like SD. and that is scratched
out, and a question mai'k by it. And then I put Tom over at the edge,
meaning Tom Townsend. Apparently, he and Dave liad some dis-
agreement.
Under that. Avherc I scratched out SD, I put 25 undei- that, and then
there is 50 over on the side, and I have the initials HHH, indicating-
this was what they would have told me at the time, and this is actually
their writing. And these figures only amount to $100,000. and this is
as late as November 10. 1971.
.Vnd then, on down a little further, in this same column, T have 50.
and I would assume $50,000. Iowa to Hugiies per HSN. \Ve11, over in
I
I
i
6161
my other notes I have $50,000 to John Culver, and then I have a 25
here, and these are in my writing again, and I do not know what that
was to be for.
And then I get into Deloss Walker, West Memphis — it has nothing
to do with this. See, these were some notes again, and my effort to — any
time I get an opportunity to talk with anyone or get some information
on this Valentine thing, I would jot down some notes, and it is quite
apparent, because I never got the same story twice, and
Mr. O'Hanlon. Well, then, the only item that could have been re-
lated to the Presidential campaign as such would have been the one
relating to Humphrey. The others, like Docking — of course, that is a
Governor's campaign. Is that correct ?
Mr. Lilly. Well, unless — I do not know how much credence you
want to lend to a portion of my statement where I mention that we
are obligated — but Mr. Nelson, Parr, and Townsend told me we were
committed $140,000 to Hubert Humphrey and Wilbur Mills.
Mr. O'Hanlon. How it was allocated, State by State, or for whose
benefit, you do not know, is that it ?
Mr. Lilly. I have all sorts of little scribbled notes again, and I
have attempted to — now here ai-e some notes, and this is Tom Town-
send 's note; it is actually in his writing: "$50,000 Iowa, $25,000 Kan-
sas, $10,000 SD"— South Dakota— "$15,000 Okla*"— Oklahoma— that is
$100,000. And then a line, and then "50 HHH." And this was in
Tom Townsend's writing. And again, that was a conversation, and so
I think this is just a duplication of those same notes, and my notes,
unfortunately, are rather barren, rather thin. Except, I believe, that
this is a conversation the week of — here is a note; the week of June 20,
1972. Tom Townsend repeatedly called me, but I was out of pocket.
Townsend talked with Gary Wood, AMPI comptroller, in desperation,
and asked Gary if we had fulfilled our commitment to Docking. I was
told this by Gary, meaning Gary Wood.
On June 22, 1972, 1 called. I talked with Tom Townsend. He was in
Topeka, Kans., and just before visiting Governor Docking; Townsend
asked me if we had completed our commitment to Docking, at the time,
I said I assumed so, and on Saturday, June 24, 1972, 1 realized he was
referring to the commitment of $25,000 paid through Valentine Asso-
ciates and referred to above. This may have been an assumption on
my part, because I did check, Ave had no commitment to him. So,
again I
Mr. O'Hanlon. What was — you mentioned INIr. Johnson. Was it
$55,000 or $50,000 of the $187,000 that you allocated to
Mr. Lilly. You mean in these notes I was reading from?
Mr. O'Hanlon. Yes; I was wonderinir what office he was interested
in. Is there not a $55,000 figure, or was it $35,000? I guess not.
That is all of Oklahoma?
Mr. Lilly. Oh ? TTli-huh.
Mr. Weitz. Mr. Lilly, I have one other question — you talked about
the contact by Tom Townsend. Do you recall an earlier contact in 1972,
or a conversation which Mr. Isham might have asked you about any
commitments with regard to some other State, oi- as part of this earlier
transaction?
Mr. Lilly. I cannot i-ecall at the moment.
6162
Mr. Weitz. Do you remember a contact that you either heard about
or received from someone on behalf of Bob Barker, requesting at an
earlier time whether the commitment to Kansas had been fulfilled?
Do you recall anything: in connection with that request?
Mr. LilIjY. You mean Norrnan Barker?
Mr. Weitz. Norman Barker, I am sorry.
Mr. Lilly. It is quite possible. Norman Barker is a dairy farmer
and an AMPT director, and rather active politically. And T have talked
to Norman Barker many times about political contributions with-
in the State of Kansas, and without— I mean, it is hard for me to be
more r^sponsiA^e to your question. If you could give me a tim.e and a
place
Mr. Weitz. It would be sometime in — let's see — February or March
of 1972, when he, or perhaps someone at his direction, contactins; Mr.
Isham with regard to having fulfilled a commitment, requesting
whether a commitment to Kansas had been fulfilled.
Mr. Lilly. I believe that I— I think so. and I believe I have a note
somewhere that Norman Barker did question about this commitment,
and I would assume that Mr. Barker was referrinjr to the same com-
mitment that Mr. Townsend was talking about to Governor Docking.
A.nd I do not have those notes with me, but I believe I do have, and
I think Mr. Barker would have been concerned. No. 1, and he would
have contacted me. No. 2.
Mr. Weitz. How do you suppose he came to know this commitment?
This was not a TAPE commitment, I take it? This was an expendi-
ture of AMPI funds.
Mr. Lilly. It certain! v was AMPI funds. He and Mr. Townsend —
Mr, Townsend originally was from the State of Kansas, and was
working with one of the cooperatives. It became a part of AMPI at a
later date, so he and Mr. Barker were rather close friends, and if Mr.
Barker became aware of it, I am sure this is how he was informed
about it.
Mr. Weitz. Mr. Lilly, you said that, in one portion of your notes, the
moneys are — certain moneys are designated, certain amounts are des-
ignated for Minnesota. In another portion of vour notes, similar
amounts or other amounts are designated for HHH or HH. Would
you take it that the moneys from Minnesota were intended, in fact,
for Hubert Humphrey, or the moneys from Minnesota, or that are
desiernated as HH. were intended for other candidates in Minnesota
at Mr. Humphrey's direction, or are you able to tell us one way or
another?
Mr. Lilly. I am not able to tell you one way or another. My notes
are so confusing, and I have so many different ways of going on this,
that it is hard for me to, without — it is rather limited. It is all the
information I really have on it.
Mr. Sanders. Just a few moments ago, you made reference to some
handwritten notes you have before you, and you indicated that one of
the sheets was in the handwriting of Townsend. How did you come into
possession of that?
Mr. Lilly. Mr. Townsend — this is an effort from me, again to try
to find out what happened, where these moneys went, and what the
Sherman Associates happened to be, and again, he wrote down, as
at an earlier time where he had written part of them, and he and Dave
6163
Parr — Dave Parr had written them before. And this is at another time,
and again I got him to reduce them to writing, and came up with c
totally different figure this time than I had before. So, I am not a lot
better.
Mr. Sanders. Can vou give me an approximate time when he would
have made those writings ?
Mr. Lilly. No. I have the originals, but there is no date on this,
and as near as I could time it, it would be between July 1971 and
January 1972.
Mr. Sanders. All right.
Are you delivering those to the committee ?
Mr. Lilly. These? I would like to get a copy from you, if I may.
[Discussion off the record.]
Mr. Sanders. Let's go back on the record.
Mr. Nicholas. Mr. Lillv, let me ask you this. In connectioh with the
file that you have on the Valentine, Sherman Associates, No. 1 is, who
actually made up that file ?
Mr. Lilly. Mr. Valentine made up the entire file, telling me that
they used different typewriters, different girls within his office to
do it.
Mr. Nicholas. In order to be quite clear in the record for any future
reference, for instance, this — outside of signing this letter of agreement
that is on the — that is attached to the front part of the files, and by
Jack Valentine, partner, April 17, 1971, and then by Bob A. Lilly,
April 29, 1971, Associated Milk Producers, Inc. — outside of signing
that, did you ever know anything about any letter of agreement ?
Mr. Lilly. This was my first knowledge, and it was signed — what
day it was signed on, it was signed on the same day. It was not sepa-
rate days.
Mr. Nicholas. In other words, these two dates were suggested, then,
by Mr. Valentine ?
Mr. Lilly. That is right.
Mr. Nicholas. All right.
Now, for instance, a letter addressed to Mr. Jack Valentine, dated
February 23, 1971 : "Best personal regards. Bob Lilly."
Did you write that letter ?
Mr. Lilly. No.
Mr. Nicholas. Did Jack Valentine write that letter, or someone in
his
Mr. Lilly. Or someone in his office.
Mr. Nicholas. All right.
Do you have the original of that letter ?
Mr. Lilly. I have the copy of this, a carbon copy. The original, that
happens to be a yellow copy in my file.
Mr. Nicholas. Does Jack Valentine have the original of the letter?
]\Ir. Lilly. He has the original.
Mr. Nicholas. Well, would the original of that letter be with an
envelope with a stamp on it, and postmarked, or were they all taken
up at one time, as you suggested ?
Mr. Lilly. They were all signed at one time.
Mr. Nicholas. Well, let me make this simpler.
INIr. Weitz. Counselor, I think there is absolutely no question on the
record that Mr. Lilly has stated that all these were fabricated by Mr.
6164
Valentine. They were all signed by Mr. Valentine and Mr. Lilly at
once, after the f act^ — as a phony file. Is that not clear ?
Mr. Sanders. I agree. The record is clear in that.
Mr. Weitz. I do' not think there is any question
Mr. O'Hanlon. That was at the airport, was it not ?
Mr. Lilly. At the airport.
Mr. Sanders. And what you were referring to is what we have
marked as exhibit 31 ?
Mr. "Weitz. I do not think there is any question in the record that
that is the case, or, at least, that is Mr. Lilly's testimony.
Mr, Nicholas. OK.
A couple of more questions. Did you personally have any — were you
any part of composing this file, or were you just following
instructions?
Mr. Lilly. I was following instructions.
Mr. Nicholas. That is all I have.
Mr. Weitz. I have one other question.
Mr. Lilly, I have a contract here. Well, it is actually a two-page
document dated with the heading of agreement. On the sexx>nd page,
it says, "Valentine. Sherman & Associates," and it is signed by John
Valentine, dated June 10, 1971. Below that, it is signed by Associate^d
Milk Producers, Inc., Harold S. Nelson, with no date written in.
Have 5^ou ever seen this document ?
Mr. Lilly. No ; I was not aware that this existed.
Mr. Weitz. Did Mr. Nelson ever talk to you about it ?
Mr. Lilly. No. I remember no conversation.
Mr. Weitz. And the first time you came to hear, as I understand,
about the Valentine, Sherman arrangement was approximately a
month later, when you were asked by Mr. Isham about the $25,000
invoice and the check ?
Mr. Lilly. That Mr. Nelson picked up for Valentine, Sherman?
Mr. Weitz. For Valentine, Sherman.
Mr. liiLLY. That is true.
Mr. Weitz. Wliy do we not mark this as — off the record.
[Discussion off the record.]
Mr. Weitz. For the record, let's mark this as exhibit 32.
[l^Hiereupon, the document referred to was marked Lilly exhibit 32
for identification*.]
Mr. Weitz. Off the record.
[Discussion off the record.]
Mr. Sanders. When you went to meet Valentine at the airport to
complete the preparation of the file, did you do so on the instruction
of anyone within AMPI ?
Mr. Lilly. I had had instructions from Mr. Nelson in AMPI to
complete this entire transaction, to see that the invoices were properly
paid, and that INIr. Valentine had gotten his money.
Mr. Sanders. Did Mr. Nelson indicate to you in conversation that
he was aware correspondence had not been generated contemporane-
ously with events as they developed in the Valentine project?
Mr. Lilly. No. In cxinversation, he did not. Mr. Valentine was the
one that became concerned, and contacted me in regard to this that
•See p. 6216.
I
6165
nothing existed in writing, and I am quite surprised to see this other
instrument that Mr. Nelson had signed
Mr. NiCHOL.\s. Exhibit 32 ?
Mr. Lilly. Exhibit 32.
Mr. Sanders. Before you completed the file with Valentine, before
you did it, was Nelson aware that you were going to do it ?
Mr. Lilly. You mean the actual signings, the actual documents, on
March 23?
Mr. Sanders. Yes.
Mr. Lilly. No, I do not think so.
Mr. Sanders. You did not discuss with him that Valentine was pre-
paring them, and that you were going to Minneapolis to execute them ?
Mr. Lilly. No, not on that particular date, because at that time, Mr.
Nelson was no longer the general manager of AMPI at that particular
time. This had been a prior discussion. There is no doubt in my mind
that it was to have been completed, and I carried it through.
Mr. Sanders. Was Dr. Mehren contemporaneously aware that you
were going to complete the file ?
Mr. Lilly. No.
Mr. Sanders. So, actually, you were doing it on your own initiative ?
Mr. Lilly. In the light that the day that I went to Minneapolis to
sign it, and did not so inform Dr. Mehren, yes, in that sense. But in
the sense of having received instructions from Mr. Nelson much ear-
lier, and his having initialed, even as late as December of 1971, some
of the invoices, and following that instruction, and then my having
delivered that letterhead paper to him at an earlier time, I think I
was only completing something. At least, I did not feel that I was
acting solely on my own without having been given instructions.
Mr. Sanders. When did Dr. Mehren become specifically aware that
correspondence was prepared to complete the Valentine- AMPI file,
which was not genuine ?
Mr. Lilly. Truthfully, I do not know.
re Mr. Sanders. Do you think he is aware today ?
■ Mr. LnxY. Yes, he is aware of it. I know I have mentioned it to him,
Kind he is aware of it.
^- Mr. Sanders. Is it only within the last few weeks that he became
aware ?
Mr. Lilly. I have mentioned it to him in the last few weeks. That I
know. Possibly I had mentioned it earlier to him at some time, some
place. To go into the total context of it, I am not sure that I ever
have. I do not think he has ever seen the correspondence relating
thereto. He is aware that the correspondence is there, but, to my knowl-
edge, he has never actually looked at the correspondence. He might
have, but the reason I do not think so is, because it has been in my file,
and he has not asked to see the file.
Mr. Sanders. AU right.
No further questions.
Mr. Weitz. Off the record.
[Discussion off the record.]
[A brief recess was taken.]
Mr. Weitz. Mr. Lilly, are you aware of any contributions or ex-
penditures on behalf of Mr. Wilbur Mills. Congressman Mills' Presi-
dential campaign, either during the years 1971 or 1972 ?
I
6166
Mr. TiiLLY. In 1071, about Angiist 17. 1971, Mr. Nelson did instruct
me to — and Mr. Robert Ishain was present — instnictcd me to deliver
to Mr. Dave Parr and to Mr. Parr personally, the amount of $5,000 to
be used for Mr. Mills. And oil this same date I did ^o to Austin. Tex.
I borrowed $10,000. $5,000 of wJiich was delivered to Little Rock. It
Avas not delivered to Mi'. Parr ]>ei"sonally, but it was delivered to one or
two of his secretaries, Norma Kirk, K-i-r-k, or Mrs. Hunt.
The company jet was used foi- me to fly from San Antonio to Austin
to Little Rock. And I met one of the two ladies at the central fiying^
service in Little Rock, and delivered the $5,000 cash in an envelope.
And on the way back to San Antonio shortly thereafter — and this
money was borrowed from the Citizens" National Bank in Austin, Tex.,
and it was paid off on October 8, 1971.
The extra $5,000 that had l>een borrowed at that time, T might say
tbat it was kept by me. It was put in my safety box. If somethinfj like
this came up again, and this was not an unusual thing from past experi-
ence, and it was ])aid on this particular note, and I think the record
Avould so mdicate that. So thafs the reason.
There were other contributions made from Committee for TAPE
I do not have the records in front of me. but I believe that they would
reflect contributions to IMills for President, or whatever name that
he used in his campaign. But I do know that some Committee for
TAPE contributions were made to him.
Mr. Weitz. Well, let's finish with this August 1971 transaction, then
we can move to the others.
"With legard to the August 1071 transaction, do you know how the
request was made to Harold Nelson or the transaction was arranged
by Mr. Nelson?
Mr. Lilly. You mean the transaction? You mean the
Mr. Wettz. He requested you to do something. How he came to know-
about the transaction, whether he was contacted directly by Mr.
Parr or Congressman Mills, or someone else ?
Mr. Lilly. I Avould assume he was contacted by INIr. Pan-, but
I don't know that.
Also, I would say that other moneys
Mr. Weitz. Well, before we get to those — I understand that. I
want to understand this transaction, and then you will certainly have
an opportunity to explain anything else yon knovA- about.
Did Mr. Nelson tell you how you would recoup this $10,000, or
repay it ?
Mr. Lilly. Yes, he told me that it would be. I would contact a
numlxi" of attorneys which we dealt with on retainer fees and what-
not, to send me a check or cash, and this money would be used to pay
off this Citizens' National Bank note. And the attorney in turn would
bill AINIPI double out of what would have been contributed and be
paid in that manner.
Mr. Weitz. So in other words, you would have been repaid in the
same way that you were repaid for other loans for similar trans-
actions?
Mr. Lilly. That's correct.
Mr. Wettz. Did you sa^' several attorneys, or did he in fact men-
tion one specific attorney?
Mr. Lilly. Well, at this particular time it w^as one attorney, and that
AA-as Mr. Stuart Russell from Oklahoma City. *■
6167
Mr. Weitz. Did Mr. Nelson say that, or is that who you took it
to mean ?
Ts that the only person you contacted ?
Mr. Liij.Y. That's the only person I contacted, and Mr. Nelson
did not direct me to go to him. But at that particular time I did
contact Mr. Stuart Russell, and he was the only attorney that I had
contacted for some time on similar transactions.
Mr. Weitz. Now, in making this loan did you have to contact
anyone ?
T\Tio did you contact at the bank ?
Mr. Lilly. I'm sure the bank record would show, but I would say
it would be Mr. Ken Odil, 0-d-i-l. I believe he is vice president at
the bank.
Mr. Weitz. Did you have to confer with Mr. Jacobsen at all, or Mr.
Long in connection with this loan, or did you
Mr. Lilly. No, I didn't.
Mr. Weitz. Now, when you delivered the money to one of two people
who worked for Mr. Parr, either Norma Kirk or IMrs. Hunt, did you
tell them what you were delivering to them, or did they seem to know
that it was $5,000 in cash ?
Mr. Lilly. When I left Austin the Little Eock office was called that
we were leaving, and the pilot had given me the estimated time at which
we would arrive at Central Flying Service. And she was waiting. It
was quite evident that she knew that she was there to pick up an
envelope.
If she was aware of what she was picking up, I don't know.
Mr. Weitz. 'When you say Central Flying Service, is that the private
airport or private
Mr. Lilly. That's right. That caters to private aircraft.
Mr. Weitz. And in fact you did later obtain fimds to repay this note
from Stuart Russell ?
Mr. Lilly. Yes.
Mr. Weitz. And to the best of your knowledge, did you — when you
contacted ]Mr. Russell, did you discuss the purpose of the loan ?
Mr. Lilly. No. I feel that— I say that and — I called Mr. Russell's
office. I don't know if I talked with Mr. Russell or Jane Hart, Mr.
Russell's secretary, and said that I needed $10,000 to — or $5,000 to pay
off a note.
I don't know what it would have been in this instance, but I could go
back.
Mr. Nicholas. Could we go off the record just a minute ?
[Discussion off the record.]
Mr. Weitz. Did you ever deliver any other monej'S in this way in
cash to either Dave Parr or one of his secretaries ?
Mr. Lilly. Not to one of his secretaries, nor do I remember directly
delivering any to Mr. Parr myself.
I do know that at the different time Mr. Jake Jacobsen delivered
some money.
Mr. Weitz. But you yourself didn't?
Mr. Lilly. No ; 1 did not.
Mr. Weitz. While you raise that, let's move to that. Well, before
we do, counsel, would you like to question as to each individual trans-
action, or question all at once?
Mr. Sanders. You're still talkinij about Mills ?
I
6168
Mr. Weitz. Yes.
Mr. Sanders. No; you go ahead.
Mr. Weitz. All right.
Did there come a time when you became aware of a cash transaction
involving Mr. Jacobsen and Mr. Parr, also on behalf of Congressman
Mills?
Mr, Lilly. Yes. In October of 1971, ^Ir, Jacobsen had requested
some money — cash money for Mr. Connally. And this eventually — the
$5,000 requested on October 13 was eventually delivered to Mr. Jacob -
sen in Austin on November 10, 1971. When I arrived at the airport at
Austin, and as I went into the airport, I ran into Mr. Jacobsen — th.s
is about 9 a.m., November 10, 1971 — and Mr. Tom Townsend and Mr.
Dave Parr. Jce Long, a partner of Mr. Jake Jacobsen's, came in a
short time later, and in my presence Mr, Jacobsen handed an envelope.
And he said, here is the $5,000 for Wilbur that you wanted, or the
$5,000 for Mr. Mills, or — there was no money counted, but Mr, Jacob-
sen handed the envelope to Mr. Parr. And later the same day I went
on to the bank and completed my transaction.
But again, evidently $5,000 did change hands between Mr. Jacobsen
and Mr. Parr for the benefit of Mr. Mills.
Mr. Weitz. Let's go off the record.
[Discussion of the record.]
Mr. Weitz. I show you exhibit No. 23, a check dated November 3,
1971 , in the amount of $5,000, paid to the order of cash, signed "Stuart
H. Russell," and it is endorsed on the back, "Stuart H. Russell".
Is this the check that was sent to you by jSIr. Russell which you
cashed to provide the $5,000 to give to Mr. Jacobsen ?
INIr. Lilly. Yes ; it is. Handling of the check was handled at the Citi-
zens' National Bank at Austin, Tex.
And while my records don't indicate it, I believe I would have dealt
with Mr. Ken Odil, and the reason I would say that, on the edge of the
check I notice "OK ! Ken," and it looks — that is comparable to Mr.
Odil's initials that he puts on.
Mr. Weitz. Now, before giving this money to Mr. Jacobsen, had you
arranged ahead of time to deliver it to him on that day ?
INIr. Lilly. Yes; I had called him and told him I would be in Aus-
tin on that particular date,
Mr. Weitz. So he knew you were to deliver it on that particular day ?
jNIr. Lilly. Right.
Mr. Wetcz. Either at the time you delivered it to him, later on the
day of the 10th, or earlier in the day when you ran into him and saw
the transfer of moneys to Dave Parr at the airport in Austin, did any-
one suggest in any way that the two transactions were related?
INIr. Lilly. No one suggested — ^I was quite surprised to see Mr. Parr
and Mr. Townsend that worked with AMPI and Mr. Jacobsen deliver-
ing cash to them. And I did not reveal my reason for being in Austin to
Mr. Townsend or Mr. Parr.
And too, it was in the lobby of the airport or in the cotfeeshop at
the airport, and I visited for a short time, possibly had a cup of coffee
with them, and then went on to the bank and cashed the check. But
there was no exchange of words in regard to this.
Mr. Weitz. But since, in sequence of time, the transaction with Mr.
Jacobsen was later in the day, did you raise it with him then?
6169
Mr. Lilly. No ; I didn't raise it with him then.
Mr. Weitz. Did it raise a question in your mind as to whether in
fact Mr. Jacobsen had told you the actual purpose to which he was
going to apply the monej^s you gave liim ?
Mr. Lilly. Well, certainly it raised a question in my mind, be-
cause in my notes that I did keep I made a note of it, and when I was
not involved in this transaction, the fact that I do have a note of the
transaction would indicate that it raised a flag, I mean, in my mind.
Mr. Weitz. Now, correct me if I'm wrong, but at least two ways
that Mr. Jacobsen could have obtained moneys that were not — that re-
lated to AMPI but were not of his personal moneys, would have been
on the one hand to ask you for money, or on the other hand to extend
his own personal funds. And in either case, to bill AMPI to reim-
burse him.
Those are two possibilities ?
Mr. Lilly. True.
Mr. Weitz. Now, do you know whether Mr. Jacobsen in fact ex-
tended any of his own moneys and was reimbursed by AMPI in trans-
actions that did not involve you ?
In other words, rather than get money, have you extend funds and
then perhaps pay you back, rather than do it directly ?
Mr. Lilly. No. I add too, this particular instance where I de-
livered money to Mr. Jacobsen that he was not involved in one other
instance in the amount of $10,000 that he had requested in April of
1971. That was the proceeds of a note from the Citizens' National
Bank. And to my knowledge, this is the only — otherwise, the moneys
would have been, I would have been getting checks or cash from
Mr. Jacobsen and Mr. Long.
Mr. Weitz, At the same time, however, I think I showed you the
other day, and you were unable to identify with any certainty whether
a number of bills of Mr. Jacobsen's, I believe, indicated services ren-
dered above the retainer, whether or not those were legitimate or not.
Mr. Lilly. That is true.
Mr. Weitz. That's true.
Mr. Lilly. Some of them I would be able to, I think, trace down.
INIr. Weitz. In round figures — but there were a series — I think I
showed you as many as 10 or 15 bills of his, that had an additional
$1,500 or more of — billed as services rendered above retainer.
Mr. Lilly. Over and above retainer.
Mr. Weitz. And you weren't able to identify any of those particular
payments ?
Mr. Lilly. That's true. No, I was not.
Mr. Weitz. So, it's conceivable that if those were not legitimate
billings, Mr. Jacobsen may have been providing funds directly to
other parties and recouping funds from AMPI without your knowl-
edge ?
Mr. Lilly. That is quite possible.
Mr. Weitz. And this $5,000 payment may or may not have been
related to the earlier, the later transfer on the same day^ of Novem-
ber 10, and you would have no knowledge of the connection?
Mr. Lilly. That is true.
Mr. Nicholas. You say may or may not.
6170
Mr. Weitz. May or may not. Well. I take it there is an implication
in your mind they may have been connected, but you do not know for
a fact?
Mr. Lilly. I do not know that.
Mr. Weitz. "Whether it was that $5,000, or whether Mr. Jacobsen
actually had access to other moneys through AMPI that you had no
knowledge of ?
Mr. Lilly. That is true.
Mr. Weitz. Now, were there any other transactions that you know
of in which moneys were either expended, AMPI funds were either
expended on behalf of or as contributions to Congressman Mills in
his Presidential campaign effort ?
Mr. Lilly. I do know that Mr. Joe Johnson, an employee during
that particular period of time, I believe — while an employee of AMPI.
was spending a considerable amount of time in behalf of Mr. Mills,
working full time, as well as a Mr. Tern' Shea — S-h-e-a, I believe, is
the way you spell Mr, Shea's name.
That would be one form, of assistance. If moneys were generated
from that, I mean outside of their own fiscal efforts, I am not aware
of it. And that is all I can recall that did go in to Mr. Mills.
Mr. Weitz. What about the — could you tell us what you know about
the Ames, Iowa, rally sometime in 1971 ?
Do you know anything about that ?
Mr. Lilly. I know that there was — I had forgotten it until you
mentioned it, and I doubt if I could recall the year. But there was
an Ames, Iowa, rally, and I believe Mr. Mills was the primary indi-
vidual there. And I believe that Mr. Joe Johnson had a considerable
part of the work in putting that together.
If moneys were involved or expended, I am not aware of it — AMPI
corporate funds outside of Mr. Johnson's own efforts.
Mr. Weitz. And finally, are you aware of any political contribu-
tions to Congressman Mills' Presidential election effort -that were
made, as I say, through TAPE or CTAPE, and were duly reported ?
Mr. Lilly. Yes; there were some political contributions. I believe
it would only be in CTAPE, and they were duly reported.
Mr. Weitz. Now, CTAPE was not formed, as I understand it,
until April 1972.
Is that correct?
Mr. Lilly. That is correct.
Mr. Weitz. Would that mean that these contributions to Congress-
man INIills'' 1972 Presidential election effort were still in existence
and active after April of 1972 ?
Mr. LiixY. I suppose I'd have to stand corrected. I suppose it would
haA^e been TAPE funds that went into — I know that either TAPE or
Committee for TAPE did make some contribution to the Mills for
President campaign.
Mr. Weitz. As contrasted with the Mills congressional reelection
effort sometime in late 1972 ?
Mr. Lilly. Yes ; true.
Mr. Weitz. Do you recall how much ?
Mr. Lilly. No, I don't. It has been reported, and if I had access
to the reports, I could tell you. But I don't have them with me. I am
talking about the report filed with the Clerk of the House and
the Secretar}'^ of the Senate.
6171
Mr. Weitz. I have no further questions at this time.
Mr. Sanders. When you arrived in Austin on November 10, was
it — did you say it was actually in the airport that Jacobsen handed
an envelope to Parr, saying that it was money for Mills?
Mr. Lilly. Yes.
Mr. Sanders. And this was in the presence of Townsend and
who — was Long already there ?
Mr. Lilly. Long joined the group, and if I recall the series of
incidents as it happened, I think the envelope actually changed hands
after Mr. Long arrived, indicating to me that probably Mr. Long had
brought it to Mr, Jacobsen to transfer to Dave Parr.
Mr. Sanders. Now, you went to Austin on that date in order to
give money to Jacobsen ?
Mr. Lilly. Right.
Mr. Sanders. You had $10,000 in c^sh with you ?
Mr. Lilly. No, I had a check.
Mr. Sanders. A check ?
Mr. Lilly. Yes.
Mr. Sanders. For how much ?
Mr. Lilly. $5,000.
Mr. Sanders. You had still not cashed it at the time that Jacoibsen
gave the cash to Parr ?
Mr. Lilly. No, I had not cashed it.
Mr. Sanders. Why was this group assembled at the airport?
Mr. Lilly. Mr. Parr and Mr. Townsend, I believe, had chartered
a plane. They had one chartered at about that time, and I believe
that they flew to Austin in the charter plane, and I didn't expect
to see them there. I flew up — we had a small private plane, a twin
engine plane, Cessna I believe is what it was — and I had flown to
Austin in it, and went through the municipal airport to rent a car
to go to the bank. And so — and Austin, not being a large airport,
you can pull up near the hangar. And I don't think, even though
Mr. Jacobsen expected me that particular day to see him — I don't
think that they expected to see me in the airport at that time of day.
Mr. Sanders. It was pure coincidence that you encountered them
at that time ?
Mr. Lilly. True.
Mr. Sanders. So it would appear to you that Jacobsen was there to
meet Townsend and Parr coming in ?
Mr. Lilly. He wasn't there to meet me.
Mr. Sanders. It appeared to you that Townsend and Parr had ar-
rived just shortly before that ?
Mr. Lilly. Yes. In fact, something was said about their just liaving
arrived.
Mr. Sanders. Well, when Jacobson handed the envelope to Parr,
did he indicate how much was in it ?
Mr. Lilly. He indicated $5,000.
iMr. Sanders. Did Parr make any response ?
;^, Mr. Lilly. No. He stuck it into his coat pocket, and possibly he
said thank you, or I appreciate it, or something. There was no response.
Mr. Sanders. Explain the means of dissembling of the group.
wk. Did you leave first ?
^ Mr. Lilly. When I arrived at tlie airport I saw Mr. Jacobsen, _Mr.
Parr, and Mr. Townsend in the coffeeshop — I mean, as you walk into
6172
the airport in Austin — the lobby itself is not too large, and the coffee-
shop is — well, from the door I came into, it was on my right, and it is
glass fronted, and you can see in the entire coffeeshop.
At that particular time of day there were few people in the airport.
It is not a busy airport. And they were sitting next to the glass — I
mean, the one nearest me, the aisle I w^alked by, because there's a stair-
way in the center of the lobby itself. And so, w^hen I saw the three of
them gathered I went in to say hello to them. And I believe they were
having coffee or milk, or whatever they might have been drinking.
And so I ordered a cup of coffee, and at about that time Mr. Long
came in, and I really believe that Mr. Long handed the envelope to
Mr. Jacobsen. And there in my presence Mr. Jacobsen gave the en-
velope to Mr. Parr and said, here's the $5,000 for Mr. Mills. ^
Mr. Sanders. In what sequence did the group separate ? ■
Mr. Lilly. I left alone because I had to go to the bank, and I mean, T
it opened at 9, and this was shortly after 9 by that time. And I knoM^
that something to the effect was said — I told Mr, Jacobsen, "I will
see you later," and Mr. Long, because I was going to their office.
And at the time I left, the four of them were still at the airport, and
I left first and then went to get a rent-a-car. And this was all at one
end of the airport, and possibly they could have broken up and left
while I was getting the rent-a-car. I mean, I don't know when they
left.
Mr. Sanders. At any time after that date did you learn of any facts
bearing upon Parr's handling of that money ?
Mr. Lilly. No.
Mr. Sanders, On this three-page schedule, prepared by your ac-
countants, concerning the note transactions at Citizens National Bank,
on the third page, under the "Stuart H. Russell" column, there is a
$5,000 entry for what I believe is November 12, 1970 — I can't be sure.
Mr. Lilly. It appears that that is right.
Mr. Sanders. That has no relationship to the November 3 check?
Mr. Lilly. No; that is in 1970 and I'm talking about 1971.
Mr. Sanders. Oh, yes, all right. Would you say, Mr. Lilly, that
every delivery of funds that you received from any one of the firms
which were originally established as conduits, is listed in some manner
or other on this three-page accountant's schedule you have provided
for us? Or on the five-page chronology you have given us, prepared
from your own notes ?
Mr. Lilly. Yes.
Mr. Nicholas. I just want to add that m answer to your question —
for any client to answer your question — could you restrict it — in other
words, what he has put down, as I understand on his — his accountant
has put down — on that exhibit, Avhatever nimiber it is, and on the four-
or five-page outline, everything that Mr. Lilly can trace
Mr. Weitz. Or remember.
Mr. Nicholas. Or remember, because if we find something else that
we — that isn't on here, well we are going to call you.
Mr. Sanders. Good, at the present time, everything that you can
remem.ber to the best of your knowledge, everything is contained in
these two documents ? ■
Mr. Lilly. Yes. That is true. '
Mr. Nicholas. We are still — for the record, we are still looking for
anything else we can find because
i
6173
Mr. Lilly. Well, on this, there are some unidentified — of course the
moneys were fjaid back, and it's unidentified as to what the source of
those moneys are.
Mr. Sanders. But there's some indication on here
Mr. Lilly. There's some indication on here of some deposits, which
is unidentified as to where it came from so there are still some un-
answered questions in this.
Mr. Nicholas. Also, while we're on this subject, before I forget
about it, and I don't think we brought this out the day before yester-
day, well — we may have, I just want to make sure — maybe you remem-
ber Alan — Mr. Russell had indicated, is this correct, Mr. Lilly, in his
conversation with you a month ago or 6 weeks ago, different figures
than what these checks reflect ? Is that correct ?
Mr. Lilly. That is correct.
Mr. NiCHOi^s. Now would you please give those figures to the com-
mittee so that they can have them, because we don't know this is
what we're looking for.
Mr. Lilly. Do you want me to answer ?
Mr. Sanders. [Nods affirmatively.]
Mr. Lilly. About — well, I believe it was in September ; the original
of what I am going to read to you has been given to the grand jury,
but this is an exact copy of that. It was a note put on, originally in
my handwriting, on the corner of a Wall Street Journal, dated — Sep-
tember 17, 1973, I believe, was the date. Mr. Russell, in the office of
Mr. Nicholas, with Mr. Roy Barrera present, myself
Mr. Nicholas. Harold Nelson.
Mr. Lilly. Harry Nelson and Mr. Nicholas, five people, stated
that moneys that he had contributed- — the day before or a couple of
days before, he had been to Little Rock, Ark., and I believe the day
he had been to Little Rock he said was on Saturday and he spent 6 or
7 hours with Mr. Ed Wright, an attorney in Little Rock. Mr. Ed
Wright had been employed by AMPI for its own in-house investigation
of the same thing we are discussing, along with a national auditing
firm, and Mr. Russell stated these were the figures that he gave to ]Mr.
Wright, that he had spent through these various schemes that we have
been discussing in the year of 1968, $8,500; in 1969, $10,000; in 1970,
$73,400 ; in 1971, $61,642. With another further note, he made at this
same time in 1971, he failed — Mr. Russell — to get sufficient moneys
from AMPI to pay income tax. And, in March or April of 1972, he got
one check and he stated, from Mr. Isham, for $66,000 to pay these taxes
that he had not collected enough money on. So, I don't know if the
check was in the exact amount of $66,000, but I rounded it off, and
I believe there was some odd figures there.
Mr. Weitz. For clarification, do these figures represent his billings
or his payments to others ?
Mr. Lilly. I would say, in the way he made his statement, he indi-
cated that this was expenditures that he had made.
Mr. Weitz. Transfers he had made to you or others ?
Mr. Lilly, True, and not collections or billings.
Mr. Nicholas. Let's go off the record a minute so I can explain that.
[Discussion off the record.]
Mr. Weitz. Is there any explanation you have for a possible dis-
crepancy between the figures he has provided to you and the checks,
30-337 O - 74 - 21
6174
for example, that you provided in the records you provided to the
committee ?
Mr. Lilly. No, I have no answer for tlie discrepancy.
Mr. Weitz. Where did you obtain the checks and records that you
novi' have, and provided to us?
Mr. Lilly. The checks that were provided to the committee came
from Mr. Eussell, at the request of Mr, Nicholas, and he had been asked
to send those checks that did involve Bob Lilly, that might have been
made payable to me, or cash checks that came to me.
Mr. Weitz. So the checks that you are ])roviding to us are all the
checks that you were able to obtain from Mr. Russell that related to
any of these transactions ?
Mr. Lilly. That is true, and I might state further that those checks
do tie up into what my accountant has put into here, deposit slips and
others — outside of two of his checks that were reduced to cash — and
without going through the bank.
Mr. Weitz. Well, at the same time, of course, as was the case on
November 10, 1971, any check which did not either go to a curtail-
ment of any of your loans, or it Avas not in some way deposited in your
account, would not shoAv up. You would not miss it unless you had an
independent recollection from your notes ?
Mr. Lilly. True. The two checks I can remember — well there's one
for $10,000 that was reduced to cash, he did send it. Tt was made out
to Bob Lilly, one for $5,000 made out to cash, that was reduced to cash
with only his endorsement on it that we talked about, cashed on No-
vember 10, 1971, and he sent — one of the checks dated in December
1971— I'm not sure if it's in the amount of $5,000 or $10,000— it is made
out to cash, and I have no knowledge of having received it — what it
could have been used for, because the bank account of the Citizens Na-
tional Bank had been paid out, we owed no moneys there. I have no
notes of anyone that contributions might have been made to, and so
far as I was concerned, so there is a
Mr. Weitz. Let me understand this. Are there two checks or three
checks at least, that you know about, that did not go through your
accountant? We have talked about one for $5,000 that you cashed and
delivered — the $5,000 that you cashed and that was delivered to Mr.
Jacobsen ?
Mr. Lilly. Right.
Mr. Weitz. All right, the second one for $10,000 in December 1971,
of which he sent a copy to you, but of which you have no records, either
bank records or independent notes ?
Mr. Lilly. That's right, and
Mr. Weitz. Are there any other checks that he sent you that you
have no other independent records or recollection of ?
Mr. Lilly. There are two other checks that came from Mr. Russell
that will not be reflected in this reconstructed bank transaction. One
of those checks was received by me on or about August 31, 1970. I am
not sure of the date of it, but it was from Mr. Stuart Russell ; it was
made out to Bob Lilly.
Mr. Weitz. And the purpose of that is set forward on page 2 of
exhibit No. 26?
Mr. Lilly. Right, and it was cashed — $10,000 — and delivered to
Atlanta, Ga., to Larry Sizemore and Terry McKenna.
6175
Mr. Weitz. That's the third transaction; what would be the fourth
transaction ?
Mr. Lilly. Well, all right, there's a fourth transaction on the —
reflected in one way, and then another as far as deposit slip. On de-
posit in the bank, Mr. Stu Russell, on September 27, 1971, a deposit
was made for $3,000 and that particular check shows under Mr. Stu
Russell's name.
Mr. Weitz. IVhat is the date ?
Mr. Lilly. September 27. 1971, on the third page of that deposit,
and it's the last entry, look over to the left-hand column^ — find the 9th
and the 27th and then look under Stuart Russell, you will find $3,000.
That's $3,000 — actually the deposit slip will be a deposit slip from Bob
Lilly — Bob A. Lilly. That particular check, I believe, was dated about
September 15, 1971; it was endorsed by me; it was deposited in the
First National Bank at Evant, Tex., wliich is where I keep my personal
account ; and about this time, whenever it was discovered, then I wrote
a check to the Citizens' National Bank and deposited that check — so
that Stu Russell check — that is reflected, and that is one of the
checks that has been given to you here. But it says, "Deposited in the
First National Bank, Bob Lilly," and then I did not bring, but I have a
check of my own personal check, that it went back to the Citizens'
National Bank.
Mr. Weitz. So that $3,000 is already included in this schedule?
Mr. Lilly. It is included, but the deposit slip wouldn't bear out a Stu
Russell check.
Mr. Weitz. So what you are saying is that in addition to what is
showing on this schedule, you have — ^because of checks sent to you by
Stu Russell — a record of an additional $25,000 in cash — from Stu Rus-
sell, checks that never went through either notes, or your checking
account ?
Mr. Nicholas. $28,000.
Mr. Weitz. No, $25,000— the $3,000 is already in here, so it would 1)0
$25,000 plus the total you show here of $56,500— that would be the
most that you can account for ?
[Discussion off the recoi^d.]
Mr. Weitz. As you have corrected me, Mr. Lilly, you have three
checks. The December 1971 check is for $5,000; so therefore, in addi-
tion to the $56,500 shown on this schedule, which is exhibit No. 6, you
have in addition three checks in the total amoimt of $20,000 that were
reduced to cash and would not show up in your bank statements. And
that would, therefore, result in a total of $76,500 which you can ac-
count for from the Stu Russell transactions ?
Mr. Lilly. No, I would have an additional $15,000 that I can account
for that actually cashed one $5,000 check and one $10,000. The $5,000
check made out to cash in December of 1971 I have no recollection of,
and I have no indication of having cashed it.
Mr. Weitz. Let's go off the record.
[Discussion off the record.]
Mr. Weitz. To rephrase the question, all told, you have given us the
record of the disposition of $76,500, even though in some instances you
don't have a recollection of how it was ultimately disposed of?
Mr. Lilly. That is true.
6176
Mr. Weitz. Now are yon sure that the fiirnres that Mr. Russell pro-
vided in that meeting in September 1073, which totals nearly $150,000,
are his expenditures as opposed to the billings which he — the amounts
he billed to AMPI, to the best of your recollection ?
Mr. Lilly. Well, it would total it. because it would be almost double,
and T added it up and the same thing — the only thing T do recall on
that particular date, he said he had his checks that he had made out.
and if that be ti'ue, then that would indicate that he didn't have AMPT
cliecks that he had received and it would indicate to me that
Mr. Weitz. That those were his expenditures ?
Mr. Lilly. Actually his expenditures.
Mr. Weitz. So what you're saying then is if his account is true, there
were numerous other transactions in whicli Mr. "Russell provided funds
to someone for some purpose of which you are not aware ?
Mr. Lilly. Tliat is true.
Mr. Weitz. To the best of your recollection ?
Mr. Lilly. To the best of my knowledge and i-ecollection.
Mr. Weitz. OK. I have no further questions.
Mr. Saxders. Presumably many of these funds that Russell would
have been able to provide to some other persons unknown, would have
resulted from the increase in the retainer which he began to show in
his monthly billings to AlVfPI after
Mr. Eldek. April 1971.
Mr. Sanders. His retainer went up from $1,000 to $0,000.
Mr. Lilly. That's quite possible ; however, on most of the checks that
I have knowledge of, that I have produced here for the committee, I
believe that you will see at a fairly close time in which the check was
issued to me. a billing came in for that amount, and it would be almost
double the amount of the check that I had received.
Mr. Sanders. All right; now you are saving that for funds which
Russell provided to you thei'e was some kind of special billing to AMPI
over and above his retainer ?
Mr. Weitz. Let's go off the record for a minute.
r Discussion off the record.]
Mr. Sanders. Let's go back on the record.
You have also indicated that it appeared to you that Jacobsen may
have been obtaining funds from AMPI by his billings ?
]\Ir. Lilly. Yes.
Mr. Sanders. For services not actually rendered, which funds did
not. eventuallv, come through you? A'^Hiich funds were not eventually
made available to you ? In other words, it appeared to you that Jacob-
sen may have generated extra funds from AMPI for payment to other
persons — persons otlier than you ?
Mr. Lilly. Well, that could be true — but the billings that I re-
ceived from. Jacobsen and Long of moneys that were advanced to me,,
normally Avould folloAv a pattern 3 weeks to a month after they
would advance me $5,000 of billing for $10,000; there's pretty much
of ; parallel, and I can pretty well identify those particular billings
from Jacobsen and Long. If Jacobsen were obtaining moneys, other-
Avise outside over and above, and if you Avould look at some of his
billings. Jacobsen and Long had a retainer fee, and then it would
say services rendered above and beyond the regular retainer, a trip
to Washington, D.C.. or mention some specific thing, and I am not
familiar enough — I have seen some of the billings but I don't know
6177
what they could have been for, they could have well been for some
of the extra monej^
Mr. Sanders. Besides Russell and Jacobsen, have you seen any indi-
cation that other firms, attorneys or consultants billed AMPI for
services not actually rendered, which funds were not then used for
payments to you ?
Mr. Lilly. Within what period of time are you referring?
Mr. Sanders. I'm talking about 1969 through 1971, 1972.
Mr. Lilly. Ln 1969, late 1969, 1970, 1971, there were other attor-
neys that did bill, send in billings, to recoup moneys that had been used
to pay off notes or make contributions with, in addition
Mr. Sanders. Through you ?
Mr. Lilly. Through me.
Mr. Sanders. Well, my question is: Do you know of any billings
by firms — attorneys or consultants — for services not rendered, which
they in turn did not use to make payments to you?
Mr. Lilly. No, I am not aware of
Mr. Sanders. Now, I'm using, for example, it has been indicated,
we figured out that Russell was probably doin^ this.
Mr. Lilly. Yes.
Mr. Sanders. Maybe Jacobsen was, do you know of any other
firms?
Mr. Lilly. Well, we have touched on the — it was some question
and at some length, the Valentine, Sherman and Associates, which
would raise a question.
Mr, Sanders. Right.
Mr. Lilly. TVliich I do have personal knowledge of. And I
believe when I have been asked about one or two others, I only have
passing knowledge of — I mean that Mr. Weitz or you have raised
of nothing else, of any firm that billed in the manner in which you
say.
Mr. Nicholas. Would you ask it the other way around ? Let me ask
you a question, Bob : Do you know of anyone else, other than yourself,
that received moneys from attomeys to apply to political contributions
or for any other purpose ?
Mr. Lilly. Well, I mentioned — outside of Mr.
Mr. Nicholas. Well, outside of Valentine, what I'm talking about is
do you know of any other instances, yourself, personally, that anyone
other than yourself, such as Isham, or Dave Parr, or Keiffer Howard,
or any of the othere, would have been given moneys for specific pur-
poses, including Harold Nelson ?
Mr. Lilly. Not during the year of 1969, 1970, or 1971-72, that I can
recall.
Mr. Sanders. Off the record.
I Discussion off the record.]
Mr. Sanders. Back on the record.
In giving us itemized, annual figures, which Russell said were his —
which Russell said represented his transfers to you or to others, and
which you said was first noted by you in the corner of a Wall Street
Journal, you did so by referring to a slip of paper ?
Mr. Lilly. Yes.
Mr. Sanders. Can we mark that as the next exhibit and copy it?
Mr. Nicholas. Yes, I would like to have the
6178
Mr. Weitz. It ^A'oiild be identified as exhibit No. 83.
[^Vliereiipoii, tlie document referred to was marked Lilly exhibit
No. 33 for identification.*]
Mr. Sanders. When did you prepare this exhibit No. 33?
]\Ir. Lilly. Exhibit No. 33 was prepared — I ^ave the fjrand jury yes-
tei'day the orioinal slip of paper — and I prepared that at that time, so
T would have a record of what I had (jiven them.
Mr. Sanders. And you prepared exhibit No. 33 by copyinof from the
document?
Mr. LiIjLY. T say yesterday, yesterday — it was probably 2 or 3 days
airo — but anticipating: I would <rive the original to them — and it's been
a recent copy, I'll put it that way, and it is an exact copy of what I
handed them.
Mr. Sanders. We will duplicate this and return it to you today.
Mr. Lilly. All right.
Mr. Nicholas. Do you still have the Wall Street Journal?
Mr. Lilly. No. Just the comer of it.
Mr. Sanders. Aside from Avhat we've already discussed, now you
know of no other AMPI funds being made available for Congress-
man Mills' Presidential race, either in 1971 or 1972 ?
Mr. Lilly. No, I don't ; not any that I had anything to do with, and
I'm not aware of any that anyone else had anything to do Avith, other
than what w^e have discussed.
Mr, Sanders. No further questions on that subject.
Mr. Weitz. Off the record.
[Discussion off the record,]
Mr. Sanders. We will moAC on to the L. B. J.-Mehren topic.
In section IX of your various statements, there is a page and a half
concerning a 1972 meeting between President Johnson and Dr. Meh-
ren, and I want to direct your attention to that now,
Mr. Lilly. All right.
INIr. Sanders. It is indicated by you that the notes in this regard
Avere made from a conversation you had with Dr. ]Mehren on October
23 ; is that coi-rect ?
Mr. Lilly. That is correct.
Mr. Sanders. Did you make these notes during the meeting, or at
a subsequent time ?
Mr. Lilly. If possible, very near the time, and I am not sure at
exactly what time I did make them, but I have the original notes and
I sav it could possibly have been at the time of the conversation.
Mr. Sanders. And these were made by you on the basis of what
Di'. Mehren told you?
Mr. Lilly. That's right.
JNIr. Sanders. It is also indicated that Isham and Mc Williams were
present ?
]\Ir. Lilly, That was put over to the side and in my statement it
indicates — I stated that it indicated, and that I am not totally sure
of — and there is a good possibility that they Avere present at this
meeting,
Mr, Sanders. Do you recall Avhether your meeting Avith Dr. Mehren
on this date had, as its primary purpose, his disclosure to you of his
meeting AA'ith President Johnson?
•See p. 6217.
6179
Mr. Lilly. His meeting with President Johnson, as well as to dis-
cuss a meeting with Mr. Niinn that had be^n in San Antonio on Sat-
urday, just prior, on October 21. So I don't know if the primary
purpose was to report on the Mr. Johnson meeting or the Nunn meet-
ing, or both of the meetings. I would assume both of them.
Mr= Sanders. Did Dr. Meliren's meeting with Nunn occur on the
same day as Dr. Mehren's meeting with President Johnson ?
Mr. Lilly, I don't know what the date was. But I do know that the
date that Mr. Nunn visited Dr. ISIehren was on the 21st, the Johnson-
Mehren meeting happened at very nearly the same time. If it had
been the same day, there's a possibility — unlikely, because of the
length of time that Dr. Mehren said he spent at the LBJ Ranch,
which was 5 hours, and driving time — or flying time — to the ranch.
Flying time would be 40 minutes out of San xVntonio— 45 : and driv-
ing time would be an hour and a half. So apparently, they were close
together but not on the same day, but I don't know, '
Mr. Sanders. Did anyone accompany Dr. Mehren at the meeting
with President Johnson ?
Mr. Lilly. At the ranch ?
Mr. Sanders. Yes.
Mr. Lilly. No; he was at the ranch with President Johnson and
from what he indicated to me, only the two of them were there, possi-
bly someone from the ranch could have been present, but no one from
our office.
Mr. Sanders. Did he indicate to you how he made the arrangement
to see President Johnson ?
Mr. Lilly. No; T would assume, though, that he called the Presi-
dent and talked with him.
Mr. Sanders. His relationship with President Johnson was such
that he could accomplish that by his own effort ?
Mr. Lilly. Yes. Of course he had been out to the ranch before; I
don't think he was that well acquainted vrith him. Mr. Nelson was
much better acquainted with Mr. Johnson and made many more trips
to visit at tlie ranch after Mr. Johnson had left, the President's office.
And Dr. Mehren — but during this period of time, and currently, we
still have leased from LBJ Corporation— or anyway, a portion of it— -
an airplane of King Air, and we did have at this particular time ; this,
further through the— some relation together — and this plane is kept at
the ranch and flies out of the ranch. The pilot lives out at that particu-
lar place and so it wouldn't be too uncommon to think that Dr. Mehren
could call him directly and say I'd like to come over and talk with you
and set up a date. And I have been to the ranch a time or two with a
group of people and he is most gracious to come out and have you look
at the ranch.
Mr. Sanders. Did you have occasion to see Mr. Nunn when he was
there to visit with Dr. Mehren ?
Mr. Lilly. No, I did not.
Mr. Sanders. Do you know of anyone else that was present during
the meeting between Mehren and Nimn ?
Mr. Lilly. There is a possibility that Mr. Jacobsen could have been
present. On one visit to San Antonio — I don't know if it was at this
particular meeting that Mr. Jacobsen did bring Mr. Nunn to San An-
tonio to visit with Dr. Mehren.
6180
Mr. Sanders. Did you see any indication that Dr. Mehren had ore-
]")ared any written memoi-andnm or commnnication as a result of his
visit with President Johnson?
Mr. Lilly. Not on the visit. That was spontaneous, without notes,
and there was no indication on it. any notes.
Mr. Sanders. T would hnvo to conchide fi-om a revievr of your pa^-
and-one-half statement that Dr. Mehren consulted with President
Johnson as to wliether he should honor some commitment to make
political contrihutions to the Repuhlican Party.
Air. Lilly. My notes indicate, and Dr. !Mehren stated that he
wanted to discuss tlie commitment of $750,000. and this was the fi^ire
that he did use.
Mr. Sanders. l^Tiich Avas a commitment to Republicans?
Mr. Lilly. To the "Republican Party from a carryover from 1971.
And he wanted to jjet Mr. Johnson's reaction to what he thoujyht
about this commitment and Mr. Johnson's reaction was rather strong
and open. If you made the commitment, Avell then, fulfill it and carry it
out. reofardless of how hard that it mi<rht hui-t. And that's
Mr. Sanders. Did it appear to you that F^r. Mehren conveyed to
President Johnson anv basis for the commitment?
Mr. Lilly. "Well. T have no way of knowincr that. As to the basis
for it, but T will sav tliis. Mr. Johnson Avas pretty well versed on Avhat
went on in the milk field, and by some of the statements of mv notes
here — and T would think in my own mind that Mr. Johnson was well
aware of what he was referring to.
Mr. Sanders. But you didn't learn any facts from Dr. Mehren which
would support that?
Mr. Lti-ly. No: T did not.
Mr. Sanders. Now. at the time Dr. INfehren went to see President
Johnson, presumably he knew Mr. Nunn was cominof ?
Mr. Lilly. This would indicate that Mr. Nunn was there on Satur-
day. But Mr. Nunn had also made another visit at another time. And
Ml'. Jacobsen and Mr. Nunn liad talked, and my notes indicate in this
particular instance that Mr. Nunn was alone in this and with Dr.
Mehren. And T would be inclined to think, because Dr. Mehren did not
discuss the first visit with me, with Mr. Nunn bein^ there — I only knew
that he was there. T knew that Mr. Jacobsen was with him.
I would sav this would be the second meetinij of Mr. Nunn haAnnpf
called on Dr. Mehren.
Mr. Sanders. At the time that Dr. Mehren went to see President
Johnson, presumably he knew that Nunn was coming apain on
October 21?
Mr. Lilly. That is quite apparent from my notes, or on — yes,
October 21 , on Saturday.
^Tr. Sanders. At any time since Octobei- 23. 1972. has Dr. Mehren
provided you with furtlier elaboration of his conversation with Presi-
dent Johnson ?
Mr, Lilly, No.
Mr. Sanders. Or has anyone else provided von with any further
elaboration on the basis o^ what they were told by Dr. Mehren?
Ml-. Lilly. They have not. no.
]Mr. Sanders. Li the first full paraarraph on pa^e 2 of this statement,
you liave indicated that President Johnson told Dr. Mehren of a
6181
qiiarter-million-dollar commitment to President Johnson which he
wanted fulfilled.
Mr. TjIlly. That's true.
Mr. Sanders. This was also told to you by Dr. Mehren ?
Mr. Lilly. That is correct. And T made a note of the $250,000 com-
mitment on my notes
Mr. Sanders. I see the attachment there.
Mr. Lilly [continuing]. Of the request of the statement that Dr.
Mehren made to me.
Mr. Sanders. Do you know of any basis for this commitment?
Mr. Lilly. No, sir ; I do not.
Mr. Sanders. Had you ever heard from any other source that AMPI
had a commitment to President Johnson ?
Mr. Lilly. No.
Mr. Sanders. Now, you have told us about payments on a book en-
titled "No Retreat From Tomorrow" ?
Mr. Lilly. True.
Mr. Sanders. From your knowledge of all the circumstances, does it
appear that there might be any relationship between that and these
remarks of Dr. Mehren ?
Mr. I^iLLY. Well, of course, "No Retreat From Tomorrow" was in
1968. This was in 1972, some 31^, 4 years later. It wouldn't seem too
likely.
There is one possibility, of course. At the time we had leased a King
Air from the LBJ Corp. I'm not sure of what the corporation might
be. I don't know what the cost of that particular contract may be. but
it is leased, I believe, at 40 hours per month. At about this time, the
change in management from Harold Nelson to George ]\Iehren. the
LBJ Corp. or President Johnson's company purchased a new King
Air, and a King Air costs somewhere in the area of three-quarters of
a million dollars. And at about the same time, the change in manage-
ment, a contract had been executed. I don't Imow if it was for 1 year,
2 years, or 3 years, it's still in existence, to utilize the King Air
Mr. Sanders. Wlien you use the term "King Air"
Mr. Lilly. That's the type of airplane.
Mr. Sanders. Oh, that's the type of airplane ?
Mr. Lilly. Yes, I'm sori*y. And the contract was showing 2 or 3
years at 40 hours per month. And the cost per hour — I don't know
what the contract stipulates. This means if you use it 40 hours, you
pay 40 hours. If you use it 10 hours, you still pay 40 hours. If you use
it over 40 then you pay at a certain rate. I mean this is spelled out in
the contract. This became somewhat of a bone of contention or argu-
ment between Dr. Mehren, the board of directors — Harold Nelson,
Dr. Mehren, and the board of directors, at the time the management
was changing. This is the only possible thing that I can think of
that would tie in. I don't know what the cost of this total contract
might be.
Mr, Sanders. Now this would be an airplane purchased and con-
tinued to be owned by a Johnson corporation ?
Mr. Lilly. And leased by AMPI.
Mr. Sanders. And leased by AMPI ?
Mr. Lilly. Riffht.
Mr. Sanders. Do you know for a fact that AMPI did use the ser\^-
ices of this Johnson King Air ?
6182
Mr. Lilly. We did and we still do use the services of this.
Mr. Sanders. And there is some dispute over payments ?
Mr. Lilly. The dispute \vas over the — at the time of relieving Mr.
Nelson from his responsihilities as general manacrer. and a short time
thereafter, they went into various contracts with employees, contracts
that we might have with haulers of milk, various types of contracts
that we might have in existence, Mr. Nelson being general manager
and having executed those contracts, so Dr. Mehren would be aware of
those.
The board was made aware of these various existing contracts, and
one of them that they were not made aware of was the fact that the
LB J plane contract had been renewed, and they were under the impres-
sion— they knew a contract existed, but they were under the impression
that it was at expiration date. But at about the time of relieving Mr.
Nelson they found out some 2 or 8 months later, that this contract had
been renewed, and I don't know what the cost of that contract might be,
but I only say this — there's one source of possibility of this.
Supposing the contract was executed b}^ Mr. Nelson just prior — a
day or two prior to his having been dismissed as general manager, and
I have never seen the contract and T don't kno^v the actual signing date
of it. but this has been quite a bone of contention ; $250,000 for the leas-
ing of the plane some 3 years, or something, T don't think would be —
at 40 hours per month — would not be a figure out of line at all, I don't
know what it costs to lease planes, but I'm sure this contract might
reveal sometliing.
Mr. Sanders. To your knowledge, is there a contract in effect today
with King Air?
Mr. Lilly. Yes, there is. The one I'm talking about is being honored
and is in eifect today.
Mr. Sanders. So it is possible that the reference by President John-
son to a quarter-of-a-million-dollar commitment here may have been
in reference to the lease of an airplane?
Mr. Lilly. It could well have been. I guess — I say it is a possibility,
yes.
Mr. Sanders. Did Dr. Mehren make any mention to you that the
remark by President Johnson was in the context of a political commit-
ment?
Mr. Lilly. No ; he did not.
Mr. Sanders. Nevertheless, the paragraph goes on to indicate a
process of generating the funds by checkoff and if this quarter of a mil-
lion dollar commitment to President Johnson did exist, and if in fact
it was a legal obligation. I assume AMPI would have had the financial
wherew^ithall to make the payment over a reasonable period of time
and would not have had to engage in some additional checkoif of its
members ?
Mr. Lilly. Well, of course, the only way that AMPI has of generat-
ing money is from its members, taking it from their checks. The figures
that are referred to here, as to the cost of AMPI, 13 cents per hundred-
weight, and we deal in hundred pounds in milk, goes for interest on
moneys that w^e have borrowed from the bank of co-ops, primarily — ^I
don't know how accurate that figure may or may not be — and the
3.6 cents per hundredweight for dav-to-dav operation costs of AMPI.
I think it probably is more than that at the present time. That may
have been an accurate figure at this particular time because this would
6183
be over in the accounting field, but what it really indicates is that
President Johnson had a good awareness of Avhat it cost us to operate —
that is somewhere in the vicinity of 20 cents per hundredweight that it
takes, interest, operations, and various things. And I think what was
trying to be pointed out here v.'as that if you have a commitment to
carry it out, I mean he's aware of how you generate money within a
co-op.
Mr. Sanders. Whsit I'm saying is, if, within that period of time,
your day-to-day operational costs were rated at about 3.6 percent
per hundredweight
Mr. Lilly. That's 3.6 cents.
Mr. Sanders. 3.6 cents per hundredweight ?
Presumably the costs of the leasing of an airplane over an exten-
sive period of time would be accounted for in day-to-day operational
costs ?
Mr. Lilly. True.
Mr. Sanders. And paid for in that manner ?
Mr. Lilly. That's right.
Mr. Sanders. And there wouldn't have to be a special checkoff to pay
for the routine operational cost ?
Mr. Lilly. That's right. The only reason I mentioned the airplane —
this is a i)OSsibility. Because I think you asked me if I knew if there
had been anything to tie it down. This is the only obligation or the
only tie-in that I have any knowledge of with LBJ ranch.
Mr. Nicholas. Unless it was a prior commitment made to
Mr. Lilly. Or a prior commitment made that I am not aware
of.
Mr. Nicholas. If there was a prior commitment, it could have been
when Lyndon Johnson was the President.
Mr. Elder. Back in 1964 ?
Mr. Nicholas. That's right, that George Mehren wouldn't have
known about.
Mr. Lilly. Well. I think that's evident, because I have "$250,000—
LBJ," by "HSN" on my notes, which means that George Mehren said
this was a Harold Nelson commitment.
Mr. Sanders. No further questions on that subject.
Mr. Weitz. I have just a few.
Let's look at the notes for a minute from which your recount
came.
Mr. Nicholas. The LBJ notes ?
Mr. Weitz. Yes.
Can you tell me whether, looking at these notes, you see any indica-
tion that former President Johnson suggested that an additional
checkoff be made to honor this $250,000 commitment to him by Harold
Nelson ?
Mr. Lilly. I would point out that
Mr. Weitz. I want to start with the notes, I will ^et to your inde-
pendent recollection if that is the case.
Mr. Lilly. Well, the notes to me indicate that President Johnson
did know how we generated our njoney — what it cost us to operate
our operation. And it does indicate to me — I mean in my mind think-
ing that you could generate some more, if we have a commitment and
we could pay it off.
Mr. Weitz. If there weren't sufficient funds?
6184
Mr. Lilly. If there weren't sufficient funds.
Mr. Weitz. And if there were sufficient funds, there'd be no need
for an additional checkoff?
Mr. Lilly. True.
Mr. Weitz. Now when Dr. Mehren came in — came on in January
1072, he was very budofPt-minded, wasn't he ?
Mr. Lilly. Yes.
Mr. Weitz. He tried to eliminate, and did eliminate most of the
expense of le^al fees that had been — or at least retainers up to that
time?
Mr. LnjLY. Riarht.
How about — T believe two of them immediately, and then eventually
those were eliminated.
Mr. Weitz. And he tried to eliminate other — what he considered
luxuries?
Mr. Lilly. Rig:ht.
Mr. Weitz. Is it possible then, or is it — really, aren't we reduced to
speculation as to whether in this discussion between Mr. Johnson and
Di-. Mehren. whether Mr. Johnson was trying to convince him that
they had funds because he knew they took mone^' off tlie top no matter
what farmers made ? Or even if they didn't have funds, or Dr. Mehren
said he hadn't budgeted for it. you could always increase this checkoff
to cover it ? Or for one reason or another tryinof to convince Dr.
Mehren that he should, and was able, financially able, to meet the
commitment?
Mr. Lilly. I think that's clearly indicated.
Mr. Weitz, So it doesn't necessarily — I don't take it from what you
say, that Mr. Johnson was sayin^r that an additional checkoff had to
be instituted in order to meet some type of commitment, perhaps to —
for excess political contributions necessarily?
Mr. Lilly. No. I think my note reflects here that I would be and
was quite surprised that President Johnson would know somewhere
within the ballpark of Avhat it actually costs us to run our operation —
what moneys we actually took off the top, so to speak, of our producers'
checks. Now this is the real sipiificance to me. more than anything:
else.
And then, too, tyino; it back up. I looked at the $250,000 commitment
up above, so I can certainly see a tie-in.
Mr. Weitz. Is it likely that if there were a commitment stretching
all the way back to 1068, that it would not of been fulfilled by Harold
Nelson in th^ 4-year period, or 3i/^-year period?
Mr. Lilly. Knowing Mr. Nelson, I believe he
Mr. Weitz. And knowing ISIr. Johnson ?
Mr. Lilly. And knowing Mr. Johnson, I have reason to believe
that it would have been fulfilled during that period of time because,
he had had the year of 1060, 1970, and 1071 to have accomplished
that.
Mr. Weitz. And, finally, to summarize then — or, first of all, do you
have any independent recollection in addition to these notes, that
would contradict what you have just discussed 'i
Mr. Lilly. No.
Mr. Weitz. And finally, then, to summarize, is there any indication,
either from these notes, from your independent recollection, or from
6185
anything anyone has ever told yon about that meeting, that this com-
mitment to President Johnson from Mr. Nelson was in any way
related to political contributions in general or, in particular, the 1972
Presidential campaign ?
Mr. Lilly. No.
Mr. Weitz. I have no further questions on this.
Mr. Sanders. Besides the lease arrangement for the airplane, do you
know of any other financial transactions between AMPI and President
Johnson, or any of his corporations ?
Mr. Lilly. No, I know of no other — and I'm not saying there
couldn't be some — but I'm not aware of any.
Mr. Sanders. Wliat is meant by "Albert — HKH" on your notes?
Mr. Lilly. To me, that indicates in that same conversation, on that
same day, that Dr. Mehren made some mention in particular of Carl
Albert and Senator Humphrey, but outside of the mention there, I tie
no significance to it, I don't know what it may mean.
Mr. Saistders. It would indicate to you, then, that Dr. Mehren told
you that in his meeting with President Johnson there is some mention
of Alljert and Humphrey ?
Mr, Lilly. Possibly that, or possibly that he had had a conversation
with House Speaker Carl Albert as well as Senator Humphrey. There
could be a relation and there could not be. Right above that, and the
reason I say it, I have "GLM" and "ALMC," meaning Al McWil-
liams. Then I have "GLM-BI," Bob Isham, that— this is what indi-
cates to me that during a poition of that — this conversation, that they
were present, or they were in the room. They might have come in for a
short time and left, or something, and this is why I don't tie a great
deal of significance to "Albert" to "HHH" on the note,
Mr. Sanders. It doesn't necessarily indicate to you that their names
came up during Mehren's conference with President Johnson ?
Mr. Lilly. No. No it does not.
Mr. Sanders, Then you know of no mention of financial contribu-
tions to or concerning them at the time their names were mentioned ?
Mr. Lilly. Outside of any — there could have been some Committee
for TAPE contributions made to them and the records, of course,
would reflect that — which I don't have with me.
Mr. Sanders, No further questions on that subject.
Mr, Weitz, Off the record.
[Discussion off the record,]
Mr, Weitz, Mr, Lilly, we want to thank you for your indulgence
and I think none of counsel have any further questions.
Mr, Lilly. Thank you.
[Whereupon, at 6 p.m., the hearing in the above-entitled matter
adjourned,]
6186
Lilly Exhibit No. 28
^ , ASSOCIATED MILK PRODUCEHS, IPJC.
Q2A\SnDay home office
PHONE: A/C 512 341-8651 TELEX 76-7446
P.O. BOX 32287 SAN ANTONIO, TEXAS 78284
March 20, 1972
PERSONAL AND CONFIDENTIAL
Mr. John Butterbrodt
Mr. W. R. Griffith
Mr. Melvin K. Besemar
Mr. Robert Bonnecroy
How do you react to the attached proposal? The other National
Committee wants to do the same. Please call me.
George L. Mehren
GLM:lhj
Attch.
6187
DEMOCRATIC
NATIONAL COX'.WITTEE 2600 Vi.'ginii Avenue. N.W. VVjs/imston. P. C. 20037 (202)233-8750
Roii>r S. Siitutt
Irtliurtr
March 16, 1972
Dr. George L. Mehren
General Manager
Associated Milk Producers, Inc.
P. O. Box 32287
San Antonio, Texas 78284 •'^'
Dear Dr. Mehren:
This will confirm and record for you the subject we discussed in
my office today.
It is my suggestion that your Association purchase 100,000 Convention
Books from each of the National Coirunittees — the Denocratic National
Committee and the Republican National Conaittee — at the cost of
$1.00 per Book, which is the approximate cost to each of the Commttees
for the publishing thereof. The books v/ould be mailed by you to your
members and friends . I can assure you that, each of our books are being
exceedingly well done and will contain material of great interest,
particularly, at Convention tine. Our book, for example, has among
other things a long, professionally written history of the Democratic
Party, articles on foreign affairs, welfare, problea of crime and other
critical issues of our American society by noted Americans such as
Averell Harriman, Wilbur Cohen and Claude Pepper. In addition thereto
a great deal of infoiination is contained concerning the Convention
process, the officials in the various States, Senators, Congressman
and so forth. It not only will be a book to be used during the
Convention itself, but, of course, will become a collector's item.
Each of our parties is anxious to get the widest possible distribution
of our Convention Book and are purchasing several hundred thousand
copies. This program would assist in such distribution, we further
very desperately need the income to assist us in planning and execution
of our Convention. I want you to know that I know of no better form of
good citizenship than the support of the Convention process. .After all,
this process is the very bedrock of our American political system.
6188
You, your associates on the Committee that make such decisions and.
Indeed, your entire Association could take great pride in your
participation of this activity. I urge its favorable consideration
and look forward to hearing fron you at the earliest possible tine.
Our counsel advises that this amount could be paid either from your
political fund, dues, or any 6ther funds which may.be available.
It was good to be with you today and I hope we will have occasion to
see each other from time to time in the future.
6189
Lilly Exhibit No. 29
From the desk of
DR. GEOI^GP ,JL. MEHREN
30-337 O - 74 - 22
6190
1972
Republican
National
Convention
Committee On
Arrangements
PU^f fptj to:
R. L "Dick" Herman
Post Office Box 189
Omoho, Nebraska 68101
(402) 346-8092
March 27, 1972
vic« CbtiiBiaa
OFFICERS
Bofe Dole. CbAinun
R. L "Oick" Hermii
Mrx. Hildrt£ K. ftrklM. S«reI&rT
Win. J. Wi)lv4 Marrtvtt. Treuofer
/rid C. ScribMc, Jr.. G^oenl Couuri
ttcOill e»r4. Spreii) Aui. to CbroQ.
Ray C. Btiu, Ad*lier
SUBCOMMITTEES
Badges sod Tickets
H«n7 R«Mn»B»|. Ctjbmaa
M*u Sv£> Ann SUufttr. Vie* Cb
Housing
H0W3J4 H. tD«) Cillswiy, ChAlrt
Mrj. HjHot 4 Anderi-^n. Vict Cti
News Media Operatioas
HcDill Boyd. Ctulrsisn
Hn. Hopi MeCtKoiic)^, Vice CUii
Program PUnntog
Rotitrt M. FTiinfgir.. Cbilrmvi
Mrs. Keith Ssurntr, Vk( Cb«Lrm
Tra D spcrtati o a
K*ndai) 0. Garff. Cti-.L
L. E. (Tammy) Thonj
Viet Ch,
Hose Coniiiurtee
Mr>. Elcaror P. Rinn, Ctulrioui
ThoMf C. Ri«d
Putnas Liver mort
EX OFFICIO MEMBERS
Thomai B. Enfl*, Jr., Co^halrmio
Rfpubllcan Nauuiial Comniice
Mri. Tohin ArmitfflBa. Co-Chilruian
R«I>ablic«a National CommlUfe
Miti
Jotephtni
1 L. Good, Conit
rnilon Dlrecwr
*)»»
;t P. Kn.
r*le». Contertiof
1 Coordinator
WiMi.
m S. Wi
iffiir, fomsiroKt
rf a.id
AdOilobli
ntUr AssbUDl
PFCFIVPn M^^' •) 9 {972
Dr. George L. Mehren, General Manager
Associated Milk' Producers, Inc.
Post Office Box 32287
San Antonio, Texas 78284
Dear Dr. Mehren:
Robert Strauss, Treasurer of the Democratic.
National Committee, has shared with me a copy of his
letter to you concerning your organization's desire to
purchase a number of our convention progratn books. We
are in full accord and complete agreement that this
would be a most meaningful way to support the two
party system.
Should you have further questions concerning
the details, please feel free to contact me at:
Republican National Committee
310 First Street, S. E.
Washington, D. C, 20003
Post Office Box 189
Omaha, Nebraska 68101
On behalf of the Republican National Committee
let me commend you and your organization for this gesture
imich to a large degree will insure the continuation of
the two party system.
Sincerely,
/->-<
R. L. ''Dick' Herman ''
RLHibe
cc: Mr, George Bristol
Mr. Don Kendall
Mr. Deke DeLcach
Miss Josephine Good
6191
Lilly Exhibit No. 30
!T!ZENS[^:AT10MALBA!MK
AUSTIN. TEXAS April 4
PAY TO THE ORDER OF
Five-thousand and no/100
\ v
$5,000.00
-DOLLARS
.</ JC0MI4ITTEE FOS, T.A.P.E. .
.:ut,;...E3&?.: oEo.,7aa an- ^J ^^ ^f^^
Received of TAPE $5000. 00 to
(Date)
Check No. . y_^
;7V=Z:iTI.7ENS NATiOrJAL BANK
PAY TO THE
ORDCR OF..
.5,000.00
rive- thousand and no/lCO -7 7
DOLLARS
CGM^UTTEE FOR T.A.P.E.
!■•: i ;u i". 2 3P>7i: OE. l"' ID I 8"'
Received of TAPE $5000. 00 to
(Date)
Editor's note: Checks Nos. 26 throug:h 50, each identical to check
No. 25, have been omitted to save space of printing.
6192
({7^iTIZEI\IS NATIONAL BANK
or itJiw
JSriN. TEXAS
Aprijr 4
•■ \ •.
#52
72 68.2367
— - I14J
^ 5,000.00 I
Five-thousand and no/100 —
DOULARS
THIS CHtCn tS IN FULL PAYMENT OF fOLlOwlNG ITEMS
CG2-LMITTEE FOR T.A.P.E.
O
h: ; lu i"'2 3&?i: o&i'-ioi S"' ^^ <-. cJ-u-zl
S53
a.TViXlTiZENS NATiONAL BANK
J? *CS7I« AUSTIN. TEXAS
Five-thousand and no, ''100 -r '
April 4 ,»72 ea-zse?
£ f^ >3 1141' ■
i \
»_J ri, 5,000.00
. DOLLARS
This CMtCK
IS IN f
JIL PtVMEMTOF
FOLLOW
/IN& iTt>
«S
1
J __
! 1
•,\rc;-i
IMITTEE FOR T.A.P.E.
bi: I lu i"'2 3E.7«: 0 6 I"' 10 I ail* ^- ^ b-/''-^^(''
\ ;H^ITiZEMS NATIONAL BANK
JSirN. TEXAS
S54
April 4 ia72 as-zse?
1 is» — jj^i
Five- thousand and no/100
.^>__A.
TmIS CKICK
IS IN FOL
L PiVMCf
JT O
r FOLLOWING
ITEMS
"^.
<i; 5.000.00
. DOLLARS
-COMMITTEE FOR T.A.P.E.
i feL, li.. ?36 7«: OE.l'"lOl 8"'
.^' /' ^y-u^/
6193
Lilly Exhibit No. 31
LETTER OF ACREr^'U'iHT
VALENTIliE, SHERPjiN Al'JD ASSOCIATES, horeinaftor rBfcrred to as VSA,
and h5S0Clh1\:.D MIj,!'. PRODUCLRf. , I'lC, heroincifter referred to as
T^'IPI , wutuully scree that V<^.A sIieI.I undertake tho task of cor.ipLlinq
a compr.teii zed master file of persons with rura] addresses for AMPI .
it is expected that a large percentage of such a list vjill be
ier:nors or farm oriented fann]:tE. These lictK sliall be prepared
and proce...S'ed by VSA in their Hinneap-.ilis office.
Moreover, it ir: vindev-ftcod that the list desired by Al'ff'I for use ir
its direct mail and/or ir.arketj.r.g services as they niay pertain to its
o\vn internal cownercial needs shnlj not be sold, rented or in c.ny
way given to any other vendor v/ithoutthe prior authori^r. tion of VS^'
which haS exclusive o\.pership rights to the raatcric-1. Ilov.'cvei , PJ-:i'l
he'," n<j rcptri ctior., v.'hatsoevcr , in using this 1? ^t for its own
jnteinal needs.
It is jiurthor i-inderrtcod by both parties that VSA vil] not proceed
jn enlarging the li&i- 03 materials unless it has prior v/ritti;n
agres.nrent fnoir. AMj?:f. officials. It is e::pected by both parties tha'.
a list of the fcllcv/ing states shall tr.ke at leaLi. 18 months to
three year.^ to coiiiojete: Hin/iescta, Wifriconsin, i-J'-rth Dctkota, Kansa.-,
OJclahonia, Iowa, Nebraska, Arkansas, Te>:?iS , IllinoJo, Missouri and
.Soutl: Dakotc^. VSA v/ill keep I'i-iPl advised on the dooelopment and
pj.ogjLeds of the li.^t. FiirUhei'ivoxe , VSA will keep AI-iPI advi:>ed on all
piojecred corts in development of tnc master file.
If .'a^'iPX desires any consultation froit; VSA on ntrrk'H-.iiig , direct nail
and survey application in usage ct its raa&ter file, VSA will invoice
A-'-lPI for these c,'^-j vice;. , Hov.'ever, such services v. ill be aivcanged by
Prioj" r.c'atual agreement.
VALE.'JTINS, Sl.l^r-MAN AiJD-'ALSOCIATJl^;
ASSOCIATED :ni,K PRCDUC!^RS, INC.
Py f^i<U^ (■< t^^^^ij
6194
VALENTINEv SHERMAN
AND ASSOCIATES
February 1, 1971
Mr. Bob Lilly
Associated Milk Producers, Inc.
GPM Building
San Antonio, Texas 78216
Dec.r Bob:
Some time ago I had a conversation wiLh Dave Parr regarding the
possibility of our company compiling a rural list of fanp.er and
farm oriented families for the Associated" Milk Producers.
Although our business heretofore has been primarily political ~
but not exclusively - vje are especially interesting in pursuing
more commercial work along the lines of list compilation and
direct mail. Dave toJ.d me that you may be interested in such a
program especially if such a list would include telephone numbers
and other pertinent demographic information. In any event, he
suggested I contact you regarding the possibility of such a
project.
If you are at all interested in such a program, please contact
me and we can pursue it in much more detail. I hope to hear from
you in the very near future.
Sincerely ,
^ack Valentine
6195
Feb run IT/ 23, 1971
iir. Oack Vdi'.ontiire
Valc:ritJr:c, Sbcrinan aad Associcitos
3050 :',etro Dr5.ve
I-inr.o.apo.i.io , I-'innc uota
Oee-r Jac?; :
Thank you for your letter of February 1st. AHPI ha'; not done
nmcli mail advartis.^. ng up to now, but Dave; was correct in ar..surdn.qf
thcu v;e might bo interested in such a proyran. Spocificallv I
v/i.)uld like information as to how nuch i.t v;ould co^st to build a
rural list - I'd be intex-ostcd in rural names only, cind root
ir;;3ortant]y those ncuics that have telephone nuinbers witn it. T.r\
addition, v;e would exi'cct such a list to be all zip coded and
have county codes on it as well.
h'e are intcres,ted in devaloping a life insurance nro-.jr^ir'. v.'hich v;e
caii sell to rujral residents piur, doinn ;:urvey vjork in tryinr: to
Qctennine i.^ayJceting concepts for our burjiness and oerhann doing
sojas survey vorj; which would },ic reared to the narketinr; co.iceptci.
All of these iteiv.3 v;ould be eiihanced by the telephone runber
v.'hich would allow us to do wore direct contact work. 7»t the
present tii..f; I have been unable to locate any list that has
tolep!\one nu'.ibors \:ith the nar.o. If you have such c^ list, T ara,
indeed, very interested.
As our cor^paiiy grows and hopefully as soine of the;-.e proqrans
expand, v.'C '.?oulc. hone to doved.op a national list bi;t for the tirie
beinc) and over the course of tlio next year or tvro v.'e V70ulc he
priiaarily interested in our cv;n nain area. States in this area
incJ.ude 'irJ.ansas, Teicas, Illinois and Missouri, Xc'n\ arsd ."ansr->s,
."•J.nn-^nota and l"ebra.~]ia, ^;ort!-^ and South Dakota and r';.:]aho":a and
V.isconsin. Although the above states are our prii.^.e interest for
V.ie ir-jnedinte tine bcinq, we v.'ould also be interested in nrr.os for
the follcv'inq states of Mew f":e::ico, Louisiana, ('coreia, ?'iF;sissippi,
I'lorida, liorth cuid Gouth Carolir.:;, Tennessee, Kentucky, Indiana arid
Oliio i>ui. I emphasise aqain that tjie second tier of states is not as
i)r.portant as the abovc-r.icntioned prime states.
If you tjii-ik you have a proqrar; that can supply t}>is infor^iatior.
in these particular states to us, please jot down ideas and cost
f iqures.
~~ Best personal recards.
Bob T i ] Iv
6196
VALEMTINE, SHERMAN
AND ASSOCIATES
March 1, 1971
Mr. Bob Lilly
Associated Milk Producers, Inc.
GPM Building
San Antonio, Texas 78216
Dear Bob :
It was nice to talk to you on the telephone the other evening
and per your request I am enclosing cost estimates for the
states which you consider to be of prime interest.
Iowa $25,000 Minnesota $27,500 Arkansas $17,500
Kansas 2^,000 No. Dakota 7,000 Texas 35,000
Oklahoma 25,000 So. Dakota 10,500 Illinois 35,000
Wisconsin 30,000 Nebraska 15,000 Missouri 27,500
As you know. Bob, we do have a small commercial business here in
the Upper Midwest and consequently we have lov/a, North Dakota,
South Dakota, Minnesota and Wisconsin aJ.ready on computer. There-
fore, it would not be much work for us to reformat and do some
update- work on supplying these lists. The other states we v^oulri
have to compile from the very beginning including directory coding.
This may work out for the better for both sides, because we can
keep the list coming to you on a steady basis and not burden you
with the great cost in the beginning by supplying all the states
what we have already computerized. Finally, all these names will
be fully zip coded, have county codes and most if not all names
will contain telephone numbers for each resident. The only
stipulation we make in selling you these list^ is that you not in
turn sell, rent or give them to anyone else and that you understand
that thay are for your exclusive internal lise and not to be used
Jjy anybody else other than AMPI.
If you have any questions regarding the above prices or information,
please let me know and we shall proceed from there.
Sincerely, // A .
Jack Valentine
6197
April .10, 19 71
I!r. JacJ: Vnler.tine
Valentino, Shcrii''.nn and AscociatGR
3050 Tietro Drive
Minneapolis, Minnesota
Der-r Jad::
I rocoived your price quotes on the various states sjilS
although it is n larqe aun, it r^oen not r;ee!n unrear.onnljle.
for the type of progrrir- \ie fire anticipntinci. It- is our
belief - ojid please correct ms if V7e are v7rong - that a
rurcil list is not ar; easily outdatoc atj an urban lirit
would be; tau3 a list that you senc. us o.f the r^ost current
directories ray ba good for tvo, throe and possiblv four
years before it vroulo have to be rocorfji led.
V'e v;ould e>:pect you to send such list on a mannetic tape.
coii.patible v/ith IHM 360 hcirdwaro. Nine (9) tract v-ill
fjuffico or so I'm told by r.;y co!;'.puter people.
The other evening you sugyostod v;p> start in the Tpper
Midwest and v;ork our v.'ay dov/n f-outh in the devcloro-^ent of
this list. I think that it i:; a good idea. Wny don't you
send soirte laore specifics alone; v.'ith the firopooed agreor^ert
wc talked about on the plione .
Best v/ishes.
Boi ) Li 1 ] y
s/
6198
Wi^LENTINE. SHERMAN
AND ASSOCIATES
April 17, 1971
nr. Bob Lilly
Associated Milk Producers, Inc.
GPM Building
San Antonio, Texas 78216
Dear Bob:
It was nice to talk to you again. Per your request I have
enclosed a simple letter of agreement or contract - whatever
the case may be. Mostly it reiterates niy point about TVI-lPI
having exclusive rights to use the list for its ov.'n internal
purpcces. However, vje want to make it perfectly clear that
you cannot and will not in any way sell, rent or give the list
to anybody else. As you understand. Bob, the selling of these
lists is our stock and trade and if you compete with us, we
are really giving away our business. In any event, please
read the contract and if you have no objections, sign it and
return one copy to me. Finally, as the contract calls for it,
wo need your written permission to commence. I suggest that
we start with lovja, Oklahoma and North Dakota and in order to
do so, I need a letter to that effect.
Sincerely, //^ y
'jack Valentine
6199
;-p;..-il 29, 1.0 71
r-'v. Jatf: Valentino
V'alcr.tine, 'ihormaii £uid Associates
3050 Hotro Drive
rliiisofipclirv , rii.nnssota
L::i;=ir Jack:
I rtcoivod your co?itract.. It lool:r? fino to re ar.<l as vou
crui BG:o, I iiave enclosed a si'rned copy frcro. cur office.
Wo fully uuderstand your dcisiro not to have us turn aroiim'.
end nell thin list to anybociy and v;e hciVG no intention of
cioiug so.
7\li;o consin''!" this lottor Ti cO:ifir!",ation of the fi;:>.-oa rstnter-;
you rivsntionua, Icf.ia, oklahor-:i nru"! Ji"ort;i Ti-Ahota. You can
cxpsct pay-.icmt from us v.'ithin cO to SO cItv':-. upon rr.ceivir.c
itivoicc froTTi you. 1 stionvfly rocors-nanc; , hov/evor, t!iat you
do the v7or!i at your end on a f;tc!utiy level ajid not invoic'."; U5
too heavily for any particul;'.r i^onth cr tv;o nonth porioc!. 7:
you kno\-.', v.'e Co not 6>~)cct to proceed v.'ith our life insiiranc'
progran; or Purvey •■.•or'y. unt5.1 at lea'-;t f'c rly 1372 isM tharo-
fore v'c- dop't nend all of tho '";ata nc^' .
I 'icpe this ir. the 'rjQni.v:niii(j of a lonn ancl pronncrour. rc.lal ii
bcil.v.'oen youi ccrpany and /''IPIC.
l--.r"t v.-ishcr. ,
Ijo J I.i i ly
6200
VALENTINE,SHERMAN
AMD ASSOCIATES
3O50 MtTF:0 oaiVC, MINiMCAK-OLIS. M'NN. 55420
PHONE (611^) 72/-1370
June 25, 19 71
Mr. Bob Lilly
Associated Milk Producers, Inc.
GPM Building
San Antonio, Texas 78216
Dear Bob :
We have now finished the first three states of our program,
Iowa, Oklahoma and North Dakota, and all have been invoiced
to you.
We would like confirmation from you to begin on Minnesota,
Nebraska and South Dakota. The prices on these three states
would be $27,500, $15,000 and $10,500 respectively for each
state.
I hope to hear from you in the near future.
Sincerely ,
,'y''3ack Valentine
6201
July 15, 19 71
Mr. Joe:]: Valentivi«
Valont.iuo, Shonr:a;i and AsEociates
3050 Metre Drxvci
tiimienpolir. , i:inr>e:;otn
IX-ar Jf.cl: :
Sorry that I have not gJAMn yo-o a vrrittcn ccnf.in-iation
before no.' rory'ir' '''"'T the rsr;:.': three Ptntcs. You TM^y
proceuu v.'i III ;'i!.,.c;,otr:., rroJjrr'jka am'' !^5outh na.':ota.
You \/ill bo rof;<jivinfj a ohr^c": for tbo state of lov/a
soiuo tir.ic;-- thifi inontjj. Tiio tapes loo}-, fine. I appreciato
yoiiv good vjork.
I-GKt vifAhcs,
i3o)> Li 11-^
6202
VAL E N'Vlll E, B HE R.M AI\T
AND ASSOCIATES
■'CAPOLIS. M\NN.\>'J''.ZO
October 4, 19 71
Mr. Bob Lilly
Associated Milk Producers, Inc.
GPM Building
San Antonio, Texas 78216
Dear Bob :
Just to remind you that the invoice for June 10 for North
Dakota for $7,000 is well past the originally agreed upon
payment schedule of 90 days. Could you please give your
special attention to this matter.
In addition., we have now completed and invoiced the s'?co);d
three states of Minnesota, Nebraska and South Dakota. Do
we have your permission to proceed with Kansas and VJisconsin
at a cost of ?20,000 and $30,000 respectively? I avv-ait your
v.'ord on this matter.
^
Sincerely,
^ack Valentine
6203
October 13, 1971
Nr. Jack Valciitine
Valentine, Sherr\and and /ssociatc.r.
3050 Iletro IT J vc
IlijincaiJOlis, i'iiuicsotn
Dtu;r Jcickr
I am very £-.orry al'Out the- delay of thr Soutli Da):ot<-. pavi-Riit .
You v.'ill receive it next votil-.
\'ou i: ciV beyin oij KaiiSi;.-.* and Ki.'jconsin at the cost mentioned i)i
your lottc^r of Octobar 4.
J^incoroly,
Bob Lilly
6204
VAI.ENTITvIE,SHERM.^rT
Mm ASSOCIATES
Deceniber 1, 1971
Mr. Bob Lilly
Associated Milk Producers, Inc.
GPM Building
San Antonio, Texas 78216
Dear Bob:
Ke have done some v.'orl; on VJisconsin. However, the press of
our political business is such now that I am going to ask
you if we can delay doing any more v/ork on it for at least
30 days. With your permission I have taken the unusual
procedure of invoicing you for part of V-7isconsin, namely
$7,000.
As I talked to you on the phone the other evening, I would
deeply appreciate if you could clear up all invoices for
1971 by the end of the calendar year. We would appreciate
this for our tax purposes. If you cannot do this I under-
stand, but, again, if you can I would deeply appreciate it.
Sincerely,
7
/Jack Valentine
End.
6205
Drcerubor 8, 19 71
'::r. Jack Valoncine
Valontip.e, Si'Cirnan- and /issociutor;
30!j0 i'etro nrive
?'innoripclis , f-'innosota
L'car Jack:
I have takGii your letter midor advisDerr.ent and talked it
ovcir v.'ith eur people h«re in Han Antonio. Kg aqrnsi that
i', ic OVx Lo. hoitl of £ 'i.Miconsiji Lor trie Line ix-.i.yic. anil u'e
v;ill iiiaks every cffoi-t to clean up all cl your irivolces
for 1971 by t'lc end .of this year. Jlopa to sec yoii in
the. near future.
Best viiihcs.
Bob idlly
30-337 O - 74 - 23
6206
FIL2 Lr-;'OUT FOP. RURAL ROUTE AI'-PI EXTRACT
record size = C7
Blca: Size = o2 x 87
T?.:-:^ LaJriel =^ ' (<? cos state name) AliPI extr^-ct', 99/365
Descrir>tion
5-29
30-54
55-70
71-72
73-77
7E-87
County
Title Code (llaifia)
rors
Mrs
Kane
Address
City
State
Sip Code
Telephone
0 = lis
1 = t-'.r
2 ^ Mrs
3 = His£
4 - Mr c
5 = Dr «
6 ^ Dr
7 = Reverend
8 = Honorable
Last, first MI
Space or rural rod
Area, Exch, Number
6207
Vli L E N T r N E, S I i E R M i\ N
mSiD ASSOCIATES
April 28, 1972
h'-r. Bob Lilly
Associatf^d -.Milk Producers
GPM Building
San Antonio, Texas 78126
Dear Bob:
Inc.
Under separate^ cover I have sent you the full rural route list-
ings for the stKi-.es of Nebraska, South Dakota, Kansas, Oklahoma,
Minnesota and partial listings — per our contractural agreanient--
of WiscQ-isin, Very shortly, you v/ill be receiving the.states of
North Dakota and lovv'a. Enclosed' please find a Xerox copy of the
tape layout for your computer programiners .
I am most anxious to complete this project and proceed with the
direct mail program for the .life insurance and cheese house. I
am loo):ing forward to hearihg from you in the near future.
^ck Valentine
JV/jk
Enclosure
6208
VALENTINE, SHERMAN
AND ASSOCIATES.
3050 MCTHO OHIVE, MINNnAPO'-IS. MINT-I. 55420
FHO.NE (G12J 7^?-1570
Invoice 5157
r
May -TO, 1971
Associated ?4ilk Producers, Inc.
GPM Building
San Antonio, Texas 78216
Attention: Bob Lilly
RE : lev/ a
Per April contract and letter of confirmation
of April 29, 1971. - • $25,000
6209
VALENTINE, SHERMAN
AND ASSOCIATES
3050 Msrno ddivf, M;rj,MEA'POCis. r.'.'.rjM'.ssazo
PHONE (C12) 727-1570
Invoice #163
May 31, 1971
.^!5.30oiated Milk Producers, Inc. .
G?M Building
San Antonio, Texas 78216
Attention: Bob Lilly
OklaliOin.a
Per April contract and letter of confirmation'
of April 29, 1971. . ! $25,000
6210
VALENTINE^SHERMAN
AND ASSOCIATES
3O50 ry.exfto drive, Minneapolis, minn. 55T20
P:^O.ME (612) 727-1570
June 10, 1971"
Associated Milk Producers, Inc.
GPM Building
San Antonio, Texas 78216
AiLc-ntion: Bob Lilly
RE: North Dakota
Invoice »168
Per April contract and letter of confirmation
of Aoril 29, 1971.
$7,000
6211
VALENTINE, SHERMAN
AND ASSOCIATES
20C0 fv-.ETHO DniVE. N'irC^JIHAPOLIS, r«/1l."viN. 55420
PHCrJE (Gi2) 727-1570
Invoice «4i5
August 9, 1971
Associated Milk Producers, Inc,
GPH Building
San Antonio, Texas 78216 -
Attention: Bob Lilly
I'linnesota
Per April contract and letter of conf irrr-ation
of July 15, 1971. ! $27,500
6212
VaXjENTINE, SHERMAN
AND ASSOCI/VrES
SOr-O h'lETRO L'KIV'E, K'.IWWt APOLIS. r';li\*:v. tJS'lZD
* Ijivoice 1 4 59
Sopternber 1, 1971
/associated l-5ilk Producers, Inc.
GPM Building - " .
Fan Antonio, Texas 78216
Attention: Bob Lilly
KS: Kebraslca
Per /ioril contract and letter of confirmation
of July' 15^1971." : ' -■-...'- . $15,000
I
6213
P^X
VALENTINE, SHERMAN
AND ASSOCI/VTES
rnO.Ne (0.2) 727-1370
Invoice J460
September 24, 19 71
Associated Milk Producers, Inc.
GPH Building
San Antonio,- Texas 78216
A'.tention: Bob Lilly • •
South 'j.tkot;
Per "-.oril contract and letter of conlM r;-'.! tion
or. July 15, 19 71. ■ . $10,500
6214
VALENTINE, SHERMAN
AND ASSOCIATES
30S0 K'.ETno D.-^IVE, MIfvWEAPOI.IS. N'iir>:>». 0542O
PHONE (612) 727-'Si-.70
Invoice '473
Noveniber 12, 19 71
Associated Hi Ik Producers, Inc.
GPM Building
San T^jitonio, Texas 78216
Attention: Bob Lilly-
Re : K r; st s a s
Per April contract and letter of confirmation
of October 13, 1971. '..-■'-- • $20,000
^/1^^ /-
6215
VADENTIME,SHERMAN
AND ASSOCIATES
'■3050 MnVKO DMVn, (.-.irviVftAPOUtS. N'.irjN. S5';20
PKlO.VH (i>12) 7i7-jii70
Invoice §4 74
Deceinber 1, 19 71
AssociatGd Ki Ik Pxoducors , Inc.
GPiM Building
San Antonio, Texas 78216
Attention: Bob Lilly
V;isco;:sin
Per April contract and letter of confirmation
of October 13/ l97i; ' < $7,000
6216
Lilly Exhibit No. 32
AGREEMENT
Valentine, Sherman and Associates, hereinafter referred to as
VSA, and Associated Milk Producers, Inc., hereinafter referred to as
AMPI, mutually agree that VSA shall undertake the task of compiling a
computerized master file of persons with rural addresses for AMPI. It
is expected that a large percentage of such a list will be farmers or
farm-oriented families. These lists shall be prepared, processed, and
maintained by VSA in their Minneapolis office. Moreover, it is under-
stood that this list is desired by AMPI for use in direct mall and/or
marketing services as they may pertain to its commercial needs. The
materials shall not be used for any other purpose without the prior
authorliation of VSA, which has exclusive ownership rights to the
material. V
It is further understood by both parties that VSA will not proceed
on enlarging the lists or materials unless It has at least verbal agree-
ment from AMPI officials. At any time, AMPI can terminate the contract
upon written notice to VSA.
It is expected, however, that this agreement shall continue for at
least two years, through June of 1973. Now therefore. In consideration
of this agreement, AMPI agrees to pay the sum of Twenty-Five Thousand
Dollars ($25,000.00) forthwith to VSA for its consulting services over
the two-year period. Upon receipt of same, VSA shall commence work on
the rural route directory list and keep AMPI advised on the status of
said list. It is expected that within six to eight weeks of the date
of this agreement, VSA will Invoice AMPI for an additional $25,000.00
based on the computer work performed during that interim.
A TRUE COPY
v.',L!:;.-TjK^r, she!>m;>k aki> A.<=soc3ATr?
By V - , ' ■' ■: ' ■ -">.
Date .' ; . .- y-.i , '";■■' -•*
~~7 '.
" //
6217
Lilly Exhibit No. 33
6218
SENATE SELECT COMMITTEE ON PRESIDENTIAL CAMPAIGN ACTIVITIES
AFFIDAVIT
1. My name is Bob A. Lilly, and I reside at 130 Paloma, San Antonio,
Texas.
2. I have been employed by Associated Milk Producers, Inc. ("AMPi")
from the time of its formation until the present. I am, also. Secretary to
the Committee for Thorough Agricultural Political Education (C. T.A.P.E. ).
I was relieved of this responsibility on March 14, 1974, due to ill health.
I am still an employee of AMPI at this time. In addition, I have a claim for
total disability pending action before the Retirement Commission of AMPI.
3. The Senate Select Committee on Presidential Campaign Activities
voted to confer use immunity and compel me to testify before it in connection
with its investigation. Judge John J. Sirica, Chief Judge, United States
District Court for the District of Columbia, entered the Order Conferring
Immunity Upon and Compelling Testimony and Production of Information
from Bob A. Lilly on November 14, 1973. Pursuant to that Order, I did
testify before the Select Committee in Executive Session on November 14
and 16, 1973. I am also submitting this Affidavit to the Committee in
pursuance of that Order.
4. I testified before the Committee with respect to a meeting between
John Conally and me in the Page Airways Terminal at National Airport. At
the time of my testimony, my best recollection was that that meeting took
place on March 19, 1971, just before I flew by AMPI jet to Little Rock and
San Antonio, and I so testified. Since that time, the Comriiittee staff has
informed me there is no entry in the AMPI jet log for that flight, but that
there is such an entry for March 5, 1971. Furthermore, the staff has in-
formed me that Mr. Connally's logs reflect a departure from Page Airways
on March 5, 1971, but not on March 19. Although my best recollection is that
my meeting with Mr. Connally took place later in March than the 5th, the
meeting might have taken place on or about the 5th. Whatever the exact date,
I reaffirm all other aspects of my testimony before the Committee with
respect to the meeting, including my previous contacts with Mr. Connally,
when he was Governor of Texas, and what wac said at our meeting and what
was ensued. In that connection, I am attaching, as Exhibit A, a newspaper
photograph of Mr. Connally and myself, concerning one of our frequent
contacts while he was Governor of Texas. Exhibit A appeared both in a
6219
2.
news publication entitled "The Valley Farm Bureau News" dated June 1,
1963, on Page 8, and'in the October 1963 publication "Texas Agriculture",
Page 11; said Exhibit A depicting a picture of Governor John Connally
affixing a signature to House Bill No, 56 7, and in the photograph with me
and Mr. Connally are left to right, Charles Huff, Texas Farm Bureau,
Legislative Director; Representative "Kika" de la Garza of Mission, and
Representative Bill Rapp of Raymondville.
5. I also remember that late on the evening of March 23, 1971,
Harold Nelson and Dave Parr, both of AMPI, Garry Hanman of Mid-
America Dairymen, Inc. ("Mid-America") and I, flew by the company jet
to Louisville to meet Paul Alagia, of Dairymen, Inc., when he returned home.
The purpose of our flight was to ask Mr. Alagia to commit a substantial sum
of money of his coop's political trust for President Nixon's re-election cam-
paign and in fact to contribute some amount of money that day (the 24th),
with the purpose irr-mind- of securing an increase in milk price supports.
Mr. Alagia arrived around 4 o'clock in the morning of the 24th. We rcB de
our request to him, hoping to pressure him into making such a commitment.
In order to show the import and seriousness of our cause, we told him that
we had talked to then-Secretary Connally about this matter. In fact Mr. Nelson
asked me to accompany them to Louisville because I had spoken to Connally
face to face at the airport and Mr. Alagia trusted me, and Nelson felt that
my presence would convince Mr. Alagia to contribute. My best recollection
is that v/e asked for a commitment of $300,000. When he refused, we asked
that his trust, SPACE, make a $100,000 loan to Mid-America's trust,
ADEPT. This, too, , he refused. Finally, he agreed to .have SPACE contri-
bute $25,000 that day. We then returned to Washington and, that day, a
representative of SPACE delivered the $25,000 contribution. This meeting
on the- night of the. 23rd constituted the first effort, of which I am aware, by
AMPI to obtain and coordinate commitments from the other two dairy trusts
for substantial contributions to the President's re-election campaign. Since
I was not asked about nor reminded of this matter during my transcribed
testimony, I did not testify to it at that time. I did, however, testify to the
Louisville-Alagia flight in an informal session of the Senate Select Committee.
6. In my testimony before the Committee, I testified concerning
contributions in October, 1972, by C. TAPE of $150,000 each to the National
Republican Senatorial and Congressional Campaign Committees. As Secretary
for C. TAPE, I normally would have sent those contributions to the committees.
However, 1 refused to transmit those contributions. My reasons were as
.follows: on October 11, 1972,. the Committee for. TAPE voted not to make any
-further contributions fro any 1972 Presidential candidates. On October 21,
Dr. George Mehren, General Manager of AMPI and Treasurer of C. TAPE,
met with Lee Nunn, a fundraiser for'the Finance Committee to Re-elect the
President. Some time after that meeting, I think on October 23, Dr. Mehren
told me that C. TAPE was to contribute $150,000 each to the Republican
6220
Committees and that all or a substantial portion of those contributions
would go to the President's re-election campaign. Because of the C.TAPE
resolution, I declined to participate in the transmittal of those $150, 000
contributions, although I did transmit separate contributions of $25,000
each to those same two committees in late October, 1972, Instead, Dr.
Mehren transmitted the $150, 000 contributions.
/U a /
Bob A. Lilly
THE STATE OF TEXAS 0
COUNTY OF BEXAPt 0
SUBSCRIBED AND SWORN TO BEFORE ME this .rj^day of April,
1974.
^^2XZm .a ^J-.ry^Jc:l .
^
Notary Public in and for
Bexar County, Texas
6221
EXHIBIT A
THE VALLEY FARM BUREAU NEWS
JUNE 1. 1963
r" f- \
GOVERNOR JOHN CONNALLY affixes his signature to HB567, the Citrus Bonding Bill,
as Interested parries look on. Shown left to right, are C. H. Huff, Texas Farm Bureau
Legislative Director; Representative "Kika" de la Garza of Mission; the Governor,
Bob Lilly, executive manager of Valley Farm Bureau; and Representative Bill Rapp
of Raymondville. Senator Jim Bates of Edinburg was sponsor of the bill in the Texas
Senate but could not be present for the official signing. (Bill Malone Photo)
OCTOBER, 1963
TEXAS AGRICULTURE
V/
4^
' W4M' j^ '
N \
CITRUS BONDING ACT — Farm Bureau officials and legislators look on as Governor John
Connally signs H.B. 567 by Rep. "Kika" de la Garza. The r>ew law, which had the support
of Farm Bureau, raises the amount of bond a citrus dealer must have in Texas. Others
pictured above (left to right): Charles Huff, TFB legislative director; Rep. de la Garza.
McAllen, author; Bob Lilly, Mercedes, Valley Farm Bureau manager; and Rep. Bill Rapp
of Rayrriondville. The bill was signed into law during the 58th session.
30-337 O - 74 - 24
6222
SENATE SELECT COMMITTEE ON PRESIDENTIAL CAMPAIGN ACTIVITIES
AFFIDAVIT
District of Columbia
City of Washington
I, Alan S. Weitz, a resident of Washington, D,C.
duly sworn, hereby depose and say as follows:
being
1. I have been Assistant Counsel to the Senate Select
Committee on Presidential Campaign Activities from September 24,
1973 to the present.
2. In the course of the Committee's investigation, I
have received the documents listed below from Bob A. Lilly
who has informed me that they are accounts written by him
either as his contemporaneous notes (Exhibits A and B) at
or about the time of the events referred to therein or as
summaries he prepared in connection with his testimony before
the Committee in November, 1973 (Exhibits C, D, E, F and G) :
Exhibit A:
Exhibit B:
Exhibit C:
Exhibit D:
Exhibit E:
Exhibit F:
Exhibit G:
Two pages of handwritten notes to
which is attached a typed
restatement of those notes.
Eleven pages of handwritten notes.
A document entitled "I. No
Retreat from Tomorrow"
A document entitled "iv. Other
Notes"
A document .entitled "VI. Valentine
and Associates"
A document entitled "IX. 1972 LBJ-
Mehren Meeting"
A document entitled "X. Gleason-
Harrison-Colson"
Subscribed and sworn to before me
this 30^ day of yy)ay , 1974.
Notary Public
6223
EXJflBIT "A"
w
CO
li^
_«.3: o
>:_
l-J
LB '^ .
U3<R
O
< E ii
Z i"
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uj <: <=> ^
zS5
O
6224
-s . ^^ctc^-^^cj--^ I 'y^j ^
A^V
^ CiSu^ . 2^c^ IKK C-A//?
A
6225
250,000 LBJ
by HSN - He wants int
750^000 to Rep. party for price support
GLM - al Mc
GLM - BI
Albert - HHH
LBJ
(1) Honor Commitment
(2) Com LBJ - 250, 000 13</ 36^ amt.
Know intimate oper. of AMPI
(3) Sanders Edmundson
Sat.
Nunn- Trfes crx>
Rep. to Re-elect Pres,
SA and SAT - talked to Mfihren "
1. Contri. to Demo, for Nixon
2- 750, 000 obligation for price support
3. Contri to Com. to re-elect Nixon
4. 325, 000 to Rep. House Com.
325,000 to Senate Rep. Com.
(Johnson said make com. regardless of how it hurt, 5 hrs.
GLM at Ranch plus 250, 000 com. to LBJ.^
5.! Pensit^n 150. 000 ^
Sen + 150 to Hoase ". -S'^^J-X'
6. Com. list on GLM Desk
622^6
EXHIBIT "b" /"
f t
^ f / /. '
' V i
6227
'^Y'>-\Jb ^JaU^^v C^wy-^d-^i C^.yij^^iL^^
6228
/Im/^l cAA4:fr ;7_3^3 . ay^ ^^
'-(i*< --■l^fr'u Ci^
6229
62S0
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"7 ^uv'-T^^'t^vW l^MZ^il- ly'^^U-h fr^,-y
\y^'^^
U^ ~fM<uAci. K^ouvi. ^ />i^ C-^JiC/^?^
_x<-^'^
/
C^
t^/wvwv^^
6231
CUAT fiUST STILL BE RESOLVED.
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6232
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^7/ __X_gz:g
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30-337 3951
6233
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309 Sotedad
•^JvT'df'^ ;^_.^_^ 227-7561
' Texcs
6234
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6235
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XoL-^-- r?^U f - ~-^^J ^^^1 -^ro^ ^
6236
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X" T/t/^t /i-^A''
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£
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6237
EXHIBIT "C"
I - No Retreat from Tomorrow
In 19-71, the Internal Revenue Service audited MPI's 1958 fiscal year.
The IRS Agent. Doyle Bond, questioned several transactions.
Robert Isham, AMPI's Comptroller, discussed some of tlie issues raised by
Mr. Bond with me to see what knowledge I had, or if I had no knowledge, to make
every effort to get answers. This was about Aug. of 1971.
Four items being questioned by the IRS Agent Bond were on checks as follows:
Central Arkansas Milk Producers Association, Little Rock, Ark., an Arkansas
dairy cooperative that was and still is a part of MPI and AMPI, issued a check
payable to McGregor & Werner, Inc., a Washington D.C. printing firm, in amount
of $31,961.07; North Texas Producers Association, a dairy cooperative that was
and is a part of MPI and AMPI headquartered in Arlington, Texas, issued a check
#18853 dated June 17, 1968, payable to McGregor & Werner, Inc. , in amount of
$30,250.00 and a Milk Producers, Inc. check in the amount of $28,500.00 payable
to McGregor & Werner, Inc., check #586, dated May 31, 1968.
In addition. Milk Producers. Inc. check #479, dated-May 8, 1968, payable
to Harlowe Typography, Inc., 35 K Street, N.E., Washington D.C. 20002, in the
amount of $7910.55.
At about this sams time, Mr. Bob Strauss of National Democratic Party
telephoned me that the IRS was checking his office about the McGregor & Werner,
Inc. checks issued by MPI and North Texas Producers Assoc, as they were
endorsed by "McGregor and Werner, Inc. , Duplicate Payment, Pay to Order of
the Salute to the President Committee, E. T. . Controller " and
30-337 O - 74 - 25
6238
i _ Page 2
a stamped "Salute To The President Committee," Mr. Strauss informed me the
National Democratic Party had no such Committee nor had there ever existed such
a Committee.
I am not informed of the Central Arkansas Milk Producers Association check
endorsement.
The MPI check #479 was endorsed by Harlowe Typography, Inc. , with a
signature mark. This was for photographic work.
a
The McGregor and Werner, Inc. billings are for printing, binding and mailing
of 26,104 copies of "No Retreat From Tomorrow," a book about President Johnson
and family in the White House. A portion of billing was addressed to Milk Producers,
Inc., c/o Mr. John Cri swell. Treasurer.
{
The total amount paid on this project amounted to $98,621.62 as reflected
In the year 1968 on MPI's books.
On August 26, 1971, I wrote Mr. Jake Jacobsen, an Austin, Texas attorney,
about this problem, to see if he could help resolve It. While there is no corresponds
the problem apparently was resolved by Mr. Jacobsen. Insofar as I know, the issue
was not pijrsued by IRS .
6238a
rv other Notes exhibit "d"
During the years of 1970 and 1971 other funds in addition to the $100,000
were spent by me in cash and checks as directed by Harold Nelson or Dave Parr.
These monies were all borrowed by rne from the Citizens National Bank, Austin,
Texas and paid back by AMPI attorneys advancing monies, cash and checks
to me and billing AMPI for reimbursement.
The first of these notes was signed on May 5, 1S70, when I was instructed
by Harold Nelson to contribute $10,000 to Hubert Humphrey's senatorial campaign
My instructions were to borrow the money and get it repaid by the AMPI attorneys
scheme. The $10,000 was borrowed and a check drawn on my Citizens National
Bank account #105 payable to Minnesota Democratic Campaign Committee and was
mailed or delivered to Mr. Jack Chestnut, Campaign Manager for Sen. Humphrey
in Minneapolis, Minn. This 60-day note was renewed on June 30, 1970 as only
$2000 had been paid on principle. The $8000 principle was paid off and the note
retired on Aug. 6, 1970. A total of $232.50 interest was paid.
On Oct. 12, 1370, I was instructed by Mr. Nelson and Parr to borrow and
deliver $12,500 to Mr. Jack Chestnut for Mr. Humphrey's campaign. The $12,500
was borrowed in cash and the cash delivered on 10/13/70 in Minneapolis to
Jack Chestnut by me. No receipt was obtained by me, A payment of $5000 plus
151.46 interest w^as paid on this note on Dec. 10, 1970, and the note was renewed
for $7500. On Jan. 26, 1971, an amount of $7500 plus $68.54 interest was paid
off. A total of $230 interest was paid on thds note.
On August 27, 1970, a note in the amount of $13,800 was signed by me and
check 41116 on this account was made payable to AMPI for reimbursement of accounts
receivable from Bob Lilly for the 1958 political contributions previously mentioned.
6238^)
This note was paid off on Sept. 9, 1970, interest totaled $40 on this note.
On October 22, 1970, Mr. Dave Parr instructed me to deliver $5000 cash
to Pelcher-Fulton Public Utilities Republican Commission, candidates from
Georgia. I borrowed $5000 on Oct. 22, 1970, for 60 days, picked up the cash and
later in day delivered to Pelcher-Fulton at airport in Atlanta, Ga. while traveling
with Mr. Nelson. (I4r, Parr informed me Mr, Phil Campbell, Under Secretary of
Agriculture requested this help.) The note was paid off on December 18, 1970,
and $60.42 interest was paid.
Marion Harrison, Washington D.C. attorney for AMPI, asked Harold Nelson
and Dave Pan for $1200 cash for J Glenn Beall, newly elected Senator of Maryland.
On Nov. 16, 1970, I cashed check #124 at Citizens National Bank, Austin, Texas,
and delivered cash to Marion Harrison on Nov. 17 or 18, 1970, at his office. No
receipt was obtained.
On September 10, 1971, $1000 on a 30-day note was borrowed from Citizens
National Bank, Austin, Texas, by me and cash was contributed to Larry Teaver,
Austin, Texas, an assistant to Gov. Smith. Note paid on 9/17/71. Interest
totaled $7.50.
The Citizens National Bank account reflects 5 checks in amounts of $200 each
for cash drawn on this account in 1970. $600 of this $1000 was given to Gus
Mutscher, Speaker of House of Representatives. I don't have a record of who the
other $400 went to.
In January 1971 there is a check #128 drawn for $1000 cash that was con-
tributed to Speaker of House Gus Mutecher's travel.
6238c
There are two (2) $300 checks drawn for cash in 1971. One of these is
endorsed by State Representative Bill Heatly for a dinner. The other $300 check
I cannot account for.
There is one $150 check for cash that was contributed to Lt. Gov. Ben
Barnes for a dinner.
There is a $100 cash check for a luncheon for 19 members of the House
Livestock Committee at Villa Capri Restaurant.
On June 11< 1970, check #106, in amount of $1450 was made payable to
Minnesota Democratic Campaign Committee and was a contribution to Hubert
Humphrey Campaign thru Jack Chestnut, his campaign manager.
On March 17, 1970, I deposited $6648.37 into this account which was
proceeds from monies borrowed on life insurance policies belonging to Bob and/or
Ruth Lilly. This money was deposited into this political account.
Of the 6648.37 personal money, checks totaling $5523.76 were withdrawn
from the account during 1970 and 1971. They were checks #107 for $500; #117
for$640;77; #121 for $2244.00; #122 for $2078.99; and #135 for $60 . Of the
$6648.37 personal funds deposited, $5523.75 were withdrawn leaving a balance
of $1124.61 not repaid. However, on closing out account a residual of $1096.06
was withdrawn which almost balances out personal funds of $6548.37. I have no
recollection of what iiapperieu to the $1G36.G5 -- wlietlier I kept it or whelhei it
was given as a political donation.
6239
y^ EXHIBIT "E"
VI Valentine and Associates
In July (? ) 1971, Harold Nelson requested Bob Isham to issue a check to
Valentine and Associates for $25,000. Isham coir^plied and Harold Nelson took the
check with him and. I assume, deliveied it to Valentine. Or. the day he issued the
check, Isham asked me if I knew who Valentine was . I told him I had no idea.
At abcut the same time, Harold Nelson, Dave Parr, Jack Chestnut, and
possibly Tom Townsend and others, met at the home of Hubert Hum.Dhrey in New
Waverly, Minnesota. Shortly ^fter this meeting Harold Nelson, Dave Parr and
Tom Townsend told me (in San Antonio) that we were committed to $140,000 to
Hubert Kumohrey and Wilbur Mills, through Valentine & Associates who were to
print names and addresses of farmers in Iowa ($50,000), Kansas ($25,000),
Oklahoma ($15,000), Minnesota ($45,000) and Minnesota ($5,000). The last
$5000 to go to Hubert Humphrey from TAPE.
During 1971, I went to Minneapolis, in the AMPI jet, to see Valentine,
returning to San Antonio the same day. Mr. Valentine was obviously worried by
the fact that he had no contract, no invoices, etc. , and yet had been billing
AMPI for various amounts. Mr. Valentine decided he would prepare a total file
for himself and for AMPI. I had brought AMPI letterhead stationery with me and
left it with Mr. Valentine. By March 23, 1972, Mr. Valentine had prepared the
files, including invoices, letters from me to him and from him to me. He told me
on March 23, that he had had letters, typed by different girls on different typewriters.
However, the carbon copies in the AMPI file are yellow and AMPI never used
yellow second sheets.
At a later time I was given the following information by someone at AMPI
concerning the $137,000 actually paid to Valentine & Associates:
6240
VI Page 2
(1) Congressman Culver of Iowa $50,000
(He, at that time, planned to run against
Sen. Jack Miller but later backed out and Dick
Clark (A. A. to Culver) ran and beat Jack Miller.
I don't know whether Clark received any of this
money.
(2) Governor Hall of Oklahoma $30,000
(3) Governor Docking of Kansas $25,000
(4). Congressman James Abourezk, who was
elected Senator in South Dakota $ 7,000
(5) HHH $25.00..
$137,000
I don't know that the above information is true; however, AMPI actually paid
Valentine and Associates the following:
AMPI check #7830 $25,000
#8578 25,000
#0630 7,000
#1469 27,500
#2191 25,500
#2353 27,000
$137,000
In February of 1972, Mr. Valentine sent, air express to me, several IBM
reels which are labeled Iowa, Minnesota, and other states. The tapes are in the
AMPI office, but I have never checked them on IBM to see what is on them.
The correspondence file is also in the AMPI office.
A copy of pages of notes on this matter, which I wrote at sometime during the
Valentine affair, follows:
Agreement
HSN
DP
DP
HSN
HSN
Iowa
50.000
Kansas
25,000
Okie.
15,000
Minn.
45,mrt}
J'-",
i.ono
140,000
6241
VI
Page 3
Paid
Inv. 157
25,000
July 30
ck 7830
Inv. 163
25,000
Aug 7
ck 8578
Inv, 168
7,000
Oct 21
ck 0630
Inv. 415
27,500
Nov 15
ck 1469
Inv. 459
15,000
Dec 6
Inv. 460
10,500
110,000
Dec 6
Due
Inv. 473
20,000
110
Inv. 474
7,000
27
27,000
137,000
6242
^ EXHIBIT "F"
IX 1972 LBI - Mehren Meeting
I have notes of a conversation that were written by me apparently on
Oct. 23, 1972. My notes indicate that Dr. George Mehren, AMPI General Manager,
was discussing a vi<;it at Pres. Johnson's ranch and a visit by Nunn,
Treasurer, Republican to Re-Elect President Nixon, to San Antonio on Oct. 21, 1972.
My notes indicate Robert (Bob) Isham and A.L. McWilliams were present at the
conversation but it is possible they only dropped by during Dr. Mehren's and my
visit.
The Nunn visit was an effort by Mr. Nunn to get Committee for TAPE con-
tributions to help re-elect the President. According to my notes. Dr. Mehren
stated Mr. Nunn suggested alternatives for Committee for TAPE to contribute on the
$750,000 obligation for price support. The ways as follows: (1) contribute to the
Democrats for Nixon, (2) contribute to Committee to Re-Elect the President, (3)
contribute $325,000 to Republican Congressional Campaign Committee and
$325,000 to Republican Senate Campaign Committee.
My notes indicate the decision was to contribute $150,000 to House
Republican Committee and $150,000 to Senate Republican Committee. This did
happen. -
My notes indicate a Committee list was on Dr. Mehren's desk but I cannot
remember what list, possibly one left by Mr. Nunn.
Dr. Mehren also discussed portions of the 5 hour visit that he had at Pres.
Jolinson's ranch, apparently just prior to Mr. Nunn's Saturday visit Oct. 21, 1972.
Dr. Mehren stated LET said to live up to commitment regardless of how it
hurt. My notes indicate LBJ was discussing the same $750,000 commitment
6243
IX Page 2
Mr, Nunn was referring to on Saturday, October 21, IS 72,
LBJ also pointed out to Dr. Mehren that AMPI had a $250,000 commitment
to h'*" and stated he wanted it fulfilled. L8J stated, as per my notes, that AMPI
was checking off its members milk checks, 13^^ per cwt. , JFor interest on monies
borrowed and 3.6^ per cwt for day to day operation costs of AMPI. This indicates
LBI had 'knowledge of our operations and obligations, and that we could fulfill his
commitment by deducting his $250,000 commitment off producers checks as well.
LBJ also encouraged Dr. Mehren to use Committee for TAPE to support Barefoot
Sanders (D) of Texas and Ed Edmondson (D) of Oklahoma, both U.S. Senatorial
candidates in 1972.
3244
EXHIBIT "G"
X Gleason - Harrison - Colson
At one time, I delivered cash to a Mr. Gleason, Executive Office Bldg. ,
Room 111, tele. #202/456-2777. At the time of delivery I talked with Marion
Harrison, and asked him why he would not deliver money as I did not know
Gleason. Harrison stated Gleason worked under Colson and that he (Harrison)
was too well known to go into the Executive Office Bldg. I went to Mr. G lea son's
office, introduced myself and handed him an envelope with cash. He very rudely
told me I was late and to sit down and wait while he counted the money. The
proper amount was there as he made no comment.
The amount could have been $4100 as I cashed a check in that amount on
March 31, 1971, and I cannot account for its delivery to any other place.
TUESDAY, DECEMBER 4, 1973
U.S. Senate,
Select Committee on
Jr^ilESIDENTIAL CAMPAIGN ACTTVITIES,
Washington^ D.C.
The Select- Committee met, pursuant to notice, at 3 :05 p.m., in room
G-334, Dirksen Senate Office Building.
Present : Senator Joseph M. Montoya.
Also present: Alan Weitz, Barry Schodhet, assistant majority coun-
sels ; Donald Sanders, deputy minority counsel^^ and Michael Kopetski,
research assistant.
Senator Montoya. Would you state your full name ?
Mr. Harrison. Marion Edwyn Harrison.
Senator Montoya. Would you raise your right hand ?
Do you solemnly swear that the testimony that 3'ou are about to give
will be the truth, the whole truth, and nothing but the truth, so help
you God?
Mr. Harrison. I do.
Mr. Weitz. Mr. Chairman, before we proceed, I believe that the
witness wanted to make certain comments or objections on the record
before proceeding. If that is true, I think it would be appropriate to
do so at this point.
Mr. Harrison, Senator Montoya, I do not feel that I make this
motion with the greatest of optimism. At any rate, I would like to move
that the hearing be open, pursuant to the provisions of 2 USC, section
1 90a-l (b) , on the ground that the statute as I read it requires an open
hearing unless certain conditions are fulfilled. And the one that seems
to be the paramount condition is that I am going to testify in a way
that is going to reflect on somebody else.
Inasmuch as I do not know of anything except what I read in the
newspapers that reflects on anyone else, I cannot testify in a fashion
that would reflect on anyone else.
Senator Montoya. May I hear from counsel ?
Mr. Weitz, Yes, Senator.
As Mr. Harrison notes, there is a clear exception in the provision in
the event — there are actually several exceptions. Two I would like to
address.
First, that the committee determines that the testimony may
adversely reflect on the character and reputation of the witness or some
other party, some other individual. With regard to that, this type of
objection and matter has come up under other circumstances.
The committee is investigating matters that relate to possible crim-
inal activity — w^hether or not on the part of the witness, certainly in
regard to third parties. As a regiilar course, the committee has con-
ducted numerous executive sessions in the interest of protecting such
third parties, who of necessity may arise, I of course cannot comment
(6245)
6246
ahead of time as to what Mr. Harrison may or may not testify to — it is
in all likelihood that matters may come up that would come within
the exceptions. And this is the way the committee has handled the mat-
ter in the past.
Second, another exception refers to divulging matters that are
deemed confidential. Here again, the committee, pursuant to its rules,
rule 27 in particular, has found that executive sessions are to be held
for the veiT purpose of assuring that matters that are raised are held
in confidentiality until such time that the committee deteraiines either
that those witnesses or such matters should be made public. Here again,
we do not know what matters will be testified to.
On both counts, we believe that it is part of the proper course of the
conmiitte« to proceed with its witnesses in executive session, and only
to make public that testimony, or to present in public those witnesses,
t hat it deems is necessary pursuant to the resolution.
Senator Montoya. May I also state, Mr. Harrison, that it has been
the policy of the committee to try to protect the names and reputa-
tions of people who are not directly involved and whose names may
become involved in testimony and undue reflection cast upon, them by
virtue of putting them within that context. It is not our desire to em-
barrass anyone, but to try to elicit the facts for legislative objectives
and purposes as stated in the charter creating this committee.
Having heard counsel and knowing the policy of this committee,
and its desire to try to be fair with respect to innocent persons, as well
as those persons who may be proven guilty, I am constrained to deny
your motion.
Mr. Harrison. I will note my exception, but I will cooperate.
Senator Montoya. Yes.
Mr. Weitz. Mr. Harrison, would you state your address, please ?
TESTIMOUT OF MARION EDWYN HARRISON
Mr. Harrison. Suite 500, 1701 Pennsylvania Avenue NW., Wash-
ington, D.C. 20006.
Mr. Weitz. That is your business address ?
Mr. Harrison. Yes.
Mr. Weitz. Your home address ?
Mr. Harrison. 4526 North 41st Street, Arlington, Va. 22007.
Mr. Weitz. Could you state the name of your firm if you are a mem-
ber of a law firm, please ?
Mr. Harrison. Harrison, Lucey, Sagle, & Solter.
Mr. Weitz. For the record, I would like to have you indicate, please,
the brief histoi-y, say, the last several years, in terms of the previous
name of the firm going gack to 1969 ?
Mr. Harrison. January 1969, when the partner who is now on the
bench withdrew, until May of this year, it was called Eeeves & Har-
rison, and consequently the period to which this conmiittee is address-
ing itself, we find the name of the firm to be Reeves & Harrison.
Mr. Weitz. In response to the committee's subpena, do you have any
documents Avhich should be produced pui-suant to that ?
Mr. Harrison. Yes. First I liand you, Mr. Weitz, a collection of
documents that meet the description of the subj^ena, paragraph 6, I
would sum up by saying paragraph 6 in fact asks for pieces of paper
])ertaining to fees for the period January 1969 to December 31, 1972.
6247
Then I have another collection of documente which i-nrns out, Mr.
Weitz, to be more than I thought it was going to be, which collection
ineets the requirements of paragraph 5 of thesubpena, as limited pur-
suant to our oral discussion to matters involving the dairy industry.
The bulk of our law piactic^ is what is somewhat loosely termed
"administrative law" ; therefore, there are all kinds of things in the file
that are communications either to or from a Government agency. But
the daily industry, to the extent that we do or have represented it, is
just a small part of the total clientele.
That is what you asked for, and there it is.
There is nothing in any of the other categories. The subpena actually
speaks of six ditferent categories.
Mr. Weitz. There is nothing relating to political contributions to
the Presidential campaign of 1972, either by you or correspondence
relating thereto?
Mr. Harrison. No, I made none. The answer to your question with-
out editorial comment is "No."
Mr. Weitz. I think we will mark these as they become relevant and
enter them as exhibits to the testimony.
Could you tell me when your firm first became associated with or re-
tained by Associated Milk Producers, Inc. — AMPI ?
Mr. Harrisox. x\s of Januarj^ 1, 1970.
Mr. Weitz. Who contacted you to retain your services ?
Mr. Harrison. "Who contacted me personally ?
Mr. Weitz. You, yes, you, or any member of your firm.
Mr. Harrison. The initial contact with me was Mr. T^avid L, Parr,
which was in either December of 1969 or January 1970.
Mr. Weitz. Had he contacted any other member of your firm prior
to that time ?
Mr. Harrison. He simultaneously met with Mr. Patrick J. Hillings
and myself.
Mr. Weitz. That was your first contact with him ?
Mr. Harrison. Yes.
That was a meeting in our office, which was either soon before or
soon after Christmas of 1969. It was probably 1970^ notwithstanding
the fact that for billing purposes the retainer was effective Janu-
ary 1, 1970.
Mr. Weitz. Were you retained at that time or at any time shortly
thereafter either by Mid- America Dairymen or Dairymen, Inc. ?
Mr. Harrison, Yes.
Mr. Weitz. Could you tell us when you were either retained by either
or both of them ?
Mr. Harrison. Associated Milk Producers, Inc., AMPI. was Jan-
uary 1, 1970 to June 80. 1972. Central America Cooperative Federa-
tion, which in spite of its name has nothing to do with Central Amer-
ica— namely, it is a federation, a kind of loose paper organization
consisting of AMPI, Mid- America Dairymen, Inc., and Dairymen,
Inc. — retained us for several months in 1972 retroactiA^e to July 1 —
in otlier words, when we ceased to be retained by AMPI. and contin-
uing I believe until November 1. Those statements in evidence Avill tell
the exact story. It may have been December 1. That in fact is the date
we ceased to be retained by Central America Cooperative Federation,
CACF. We commenced to be retained by Dairymen, Inc. and by Mid-
6248
America Dairymen, Inc., and to this day we are still retained by
Dairymen, Inc. and Mid-America Dairymen, Inc.
Sometimes Dairymen, Inc. is just called DI. and Mid-America. Inc.
is called Mid-Am.
Senator Montoya. Let me ask this question. I noticed in your letter-
head of Aufifust 7, 1972, you have of counsel Murray M. Chotiner and
Patrick J. Hillinjrs. Then on August Bl, 1972, 2 days later, you have
on your letterhead of counsel, Murray M. Chotiner, and you have
dropped Patrick J. Hilling:s.
Can you explain that ?
Mr. Harrison. Patrick J. Hillings started out in the context in
which we are speaking- — I do not mean he started off his life this
way — as an attorney in Los Angeles. Prior to that he had been a Con-
gressman. That was a good time before.
Senator Montoya. I knew him.
Mr. Harrison. Did you, Senator?
Senator Montoya. Yes.
Mr. Harrison. From time to time he would drop into our office in the
1960's, and he would either have a matter or he would iust borrow a
desk or whatever it may be. In due course, for what we thoujjht would
be mutually advantageous business reasons, we somewhat formalized
the arrangement. He then became counsel to the firm, and for a while
actually had an office in the law firm. He did not physically have an
office with us the entire time he was counsel to the firm.
For a while the arrangement was somewhat formal. Then, in 1971,
we had discussions concerning terminating the formal arrangement,
and as a practical matter, regardless of what stationery mav have been
used on a billing, it was terminated about September or October of
1971. It was officially terminated on December 81, 1971. If we used any
stationery with his name on it in 1972 someone was being parsimonious.
Mr. Weitz. Mr. Chotiner joined your fimi ?
Mr. Harrison. March of 1971, and is still there. There was a time,
as you said, when both were counsel to the firm.
Senator Montoya. If you terminated him in December or there-
abouts of 1971, how come you have some stationery where he does not
appear in August of 1972, and also some stationery where he does
appear?
Mr. Harrison. I think the short answer is, we should not have by
August of 1972, the stationery with his name on it. It long since should
have been discarded or used up.
Mr. Weitz. What was your original retainer arrangement?
Mr. Harrison. These things do happen. Today I noticed coming up
in the car — I happen to be a male without a secretary at the moment
because mine resigned. I do not have a new one yet. I reached into the
piles of envelopes in two different sizes in her desk. I noticed after I
had gotten in the car, one of them has the old name, one of them has the
new name of the firm. So God only knows how many envelopes and
sheets of stationery are floating around saying Reeves and Harrison.
Here it is December, and the change was made back in May.
Mr. Weitz. What w as the original fee arrangement with AMPI ?
INIr. Harrison. A flat retainer. It seems to me that it was $3,000 and
some odd dollars a month. There was no contract. There is not now
and there never has been any contract with any dairy co-op.. I could
almost say with any other client, that is not literally true, but it is
6249
almost true. It was just an indefinite arrangement of $3,000 and some
dollars a month. Then it has gone up and down from time to time.
Mr. Wettz. Did there come a time when it was increased to approxi-
mately $108,000 a year, which would be $9,000 a month ?
Mr. Harrison. Roughly, yes.
Mr. Weitz. When was that ?
Mr. Harrison. I cannot tell you without looking at those bills. I
think it was increased once before that, also.
Mr. Weitz. Would it be in March of 1971 ?
Would that refresh your recollection ?
Mr, Harrison. Probably March 1 or April 1, because it was about the
time that Mr. Chotiner came with us. Whether it was a little before
or a little after he came, I cannot tell you without looking at the bill.
Mr. Weitz. Was there also an arrangement whereby a portion or all
of the furnishings for Mr. Chotiner's office were paid by AMPI ?
Mr. Harrison. A portion of them were, not all of them.
Mr. ScHOCHET. Was there an arrangement also where a portion of
his rent was paid for by the Finance Committee To Re-Elect the
President ?
Mr, Harrison. No, the law firm as well as I personally has never re-
ceived any money from the Committee To Re-Elect the President, or
anv of those other various campaign committees.
Mr. ScHOCHET. Have you seen the report filed with the Clerk of
House of Representatives by the Finance Committee To Re-Elect the
President, where they say they did pay a portion of the rent in his
office in your firm ?
Mr. ITarrison. No, I have not. I can tell you they did not. I am the
managing partner. I am the one that signs the rent checks to the Inter-
national Bank of Washington, which is the holding company that
owns the building.
Mr. Weitz. Did Mr. Chotiner provide some money to you either as
a rebate on his draw to pay a portion of the rent ?
Mr. Harrison. No. We paid a portion of the rent, if you want to
call it that, out of the f e« paid by that client.
Mr. Weitz. AMPI?
Mr. Harrison. Yes.
Mr. Weitz. To your knowledge Mr. Chotiner has not received any
funds, either personally or on behalf of your firm, in order to cover
his portion of the rent for your firm ?
Mr. Harrison. Are you asking that as a matter of tax incidence, or
a matter as to how the books are handled ?
Mr. Weitz. I suppose I am asking it more as a matter of fact,
whether in fact you know he has received some remuneration or funds,
directly or indirectly, from the finance committee for some purpose
or any purpose that you know of, and in particular to cover portions
of your rent for your law firm. I really cannot tell you whether I mean
in terms of strictly tax consequences or otherwise.
Mr. Harrison. I do not really know. I suppose the finance commit-
tee, unknown to me, could have paid him x dollars, and then, depend-
ing on how he showed it on his books, a portion of the x dollars — no,
that is not possible.
I was going to say a portion of the x dollars could have ended up
paying som.e of the law firm's rent, but that is not possible- because
the law firm's rent is x thousand dollars a month. Each month I have
30-337 O - 74 --26
6250
somebody, usually myself, will sign the check to the International
Bank for the rent for that month, and as a bookkeeping entry we
would take a portion of that retainer from AMPI, which was attribu-
table to the value of the space he ocxsupied, and use that as rent.
That has nothing to do with any of these reelect committees, or with
the campaign at all.
Mr. Weitz. Did this arrangement with AMPI cease upon the ter-
mination of your retainer with AlVIPI ?
Mr. Harrison. We got no money from AMPI at all after that.
Mr. Weitz. Do you have a similar arrangement with either of the
two co-ops at this point ?
Mr. Harrison. We never had it with AMPI at all. I probably — I
do not want to say probably I told tliem what T was doing. I may have
told them what I was doing. It is likely I did Jiot. It was not an ar-
rangement with them. It was an internal arrangement with us.
Mr. Weitz. To your knowledge they had no arrangement with the
finance committee or any of the Republican committees, where some
moneys they gave to the finance committee would be turned over to
you or Mr. Chotiner ?
Mr. PTarrison, To my knowledge, they did not. That would cer-
tainly be most difficult if not impossible for them to have done that
without me knowing about it.
Mr. Weitz. Do you have any knowledge of any cash contributions
or payments by Associated Milk Producers to anv representatives of
the President in 1969 ?
Mr. Harrison. No. You are asking for mj^ knowledge, not what I
have read in the paper ?
Mr. Weitz. Other than what you have read in the paper, either
contemporaneous knowledge or loiowledge from any other source
other than what you have read in the paper ?
Mr. Harrison. Then the answer is no.
Mr. Schochet. Specifically no knowledge of anv funds coming
from TAPE? ' -
Mr. Harrison. To a representative of the President, no. All I know
about
Senator Montoya. Or the Committee to Re-Elect the President ?
Mr. Harrison. Not just TAPE, but all three of the trusts, TAPE,
ADEPT, SPACE. I have knowledge of some that they made by vir-
tue of having seen them. I have knowledge of some by being told
contemporaneously. I have knowledge of some of them of having
read the reports with the Clerk of the House. My knowledge extends
up to an including some, apparently not all, contributions made by
these three trust funds to various cx>mmittees and reported to the Clerk
of the House.
Also, I might mention that a great number of Congressmen and
Senators are also publicly reported.
Mr. Weitz. Other than those contributions that were publicly re-
ported, you have no other knowledge, other than what you read in
the newspaper, of any payments or contributions by either of any
of the three political trusts or any of the three cooperatives to the
President or any representatives of the President from 1969 to the
present time ?
Mr. Harrison. No. To a very limited extent^ — one of the people who
has been written up in the newspapers has mentioned to me that he
6251
did in fact hand over some cash to somebody else. But his mentioning
it to me was within the last month or two, and after I had read about
it in the newspapers.
Mr. Weitz. Who was that individual ?
Mr. Harrison. Stuart Russell.
Mr. Weptz. What did he tell you ?
Mr. Harrison. He said he had in fact handed over some money to
Mr. Robert Lilly, which is what the newspapers said he had done.
Mr. Weitz. Did he indicate for what purpose he handed that money
over ?
Mr. Harrison. He told me he did not know, because I asked him
specifically for what purpose.
Mr. ScHOCHET. Did he tell you the amount of the money ?
Mr. Harrison. No.
Mr. Weitz. Could I ask you why you asked him about that trans-
action ?
Mr. Harrison. It was abounding curiosity. I never knew a lawyer
handing over in excess of $100,000 to an employee of the corporation
who is retaining the lawyer.
Mr. Weitz. Have you ever handled or arranged for any contribu-
tion— political contributions to be made in cash during the last 4 years ?
Mr. Harrison. No, not in cash.
Mr. Weitz. Have you ever suggested that such contributions be
made, political contributions be made?
Mr. Harrison. Once, somewhat obliquely. One day — I cannot tell
you when it was — I read a newspaper article which rather alarmed me.
This was in the early days of the representation. A part of it that
alarmed me said one of the trusts — I think it was the AMPI trust,
which is called TAPE — had contributed an amount, it seemed to me
like it was somewhere around $15,000, I do not remember, to a Con-
gressman who was unopposed for reelection.
The same article also said that they had contributed on both sides of
a couple of races. And I wrote a letter to Harold Nelson, who at that
time was general manager of AMPI. It was a Saturday, I recall, when
I wrote it. Anyway, I wrote it, in which I objected to both practices.
He did not ask for my advice; I just volunteered it. The law does not
reward the volunteer.
At any rate, the jist of the letter, which I have long since forgotten
about— 6 months or so ago someone showed me a copy of it. The jist of
the letter was that you should not contribute to somebody that is unop-
posed. You should not contribute to both sides of one race. If you have
to contribute to both sides of one race, do not use TAPE money. Go
get some individual to make that contribution.
You can read that if you want to as saying, make an individual make
a contribution in cash. I do not think I had any thought about whether
it should be cash or not. I did have a thought that this did not seem to
make any sense. If you like the job a fellow is doing, if he is an in-
cumbent, contribute to him. If you do not like it, contribute to the
opponent, but do not contribute to both in the same race.
Mr. Weitz. Who showed you a copy of the letter ?
]Mr. Harrison. I do not remember who did. You are quite familiar
with the civil antitrust lawsuit in Kansas City.
Mr. W^eitz. Involving AMPI and others?
Mr, Harrison. AMPI and the National Farmers Organization.
6252
T know yon are familiar with it because T heard yon about 2 :30 in
the Monocle Restaurant telling Gerry Landauer of the Wall Street
Journal in detail how you and Scott Rowley traded information back
and forth, and so on. You probably know more about the suit than I do.
Apparently this letter was one of the items that came out in the
deposition. T cannot remembei- ^v'ho showed it to me. It could have been
most anybody.
Mr. Weitz. Is this a copy of the letter ?
T would like you to identify the letter.
Mr. Harrij^ox. I think maybe it was John Gage, now that I think
about it, general counsel for the Mid-America Dairymen, Inc.
Yes, Saturday afternoon — this is the letter.
Mr. Weitz. That is the letter you wrote to JSIr. Nelson ?
;Mr. Harrison. Yes.
Mr. Weitz. I would like to turn your attention to page 2 of the
letter.
Why don't we mark this as exhibit No. 1 ?
[Whereupon, the document referred to was marked Harrison ex-
hibit No. 1 for identification.*]
Mr. Weitz. On page 2 of this letter, in paragraph 4, you go into the
topic. You say —
It seems to me that a contribution to a candidate who is unopposed inherently
is risky.
The last sentence reads as follows :
Ck)nsequently, it would be my strong recommendation that TAPE and our other
like organizations contribute only to candidates who are opposed, unless sources
which can contribute in cash and without the risk of publicity do the con-
tributing to those candidates who are unopposed.
Does that refresli your recollection as to your suggestion that in fact
these other type of contributions be made in cash, as opposed to check?
Mr. Harrison. I do not think it has to be read as cash. I'll tell you
exactly what that was. The article said —
Congressman W. Robert Poage, of Texas, chairman of the Agriculture Com-
mittee, got |;15,000 or a rather large sum of money, from TAPE. He was unopposed.
I just reacted very negatively to that. T did not think and I do not
think anybody — not just a client of our law firm, but anybody — ought
to be contributing to somebody who is unopposed. Somebody who is
unopposed ought not to need a contribution.
Then I got to thinking, maybe they have their own reasons for it.
Except in a most, m^ost formal sort of way, I do not know Chairman
Poage. There are a number of dairy farmers that belong to AMPI
that live in Texas, a number living right in his district. So if they feel
so compelled that they are disposed to contribute to Congressman
Poage even when he is not opposed in the reelection, why don't the\
get one of those dairy farmers individually to do it ?
Mr. Weitz. What other sources were you talking about ?
What source — who can contribute in cash ?
Mr. Harrison. They are tlie sources.
Mr. Weitz. '\Y]^y would any dairy farmer be predisposed to con-
tribute in cash?
*See p. 6282.
6253
Mr. Harrison. Any dairy farmer in America could contribute.
Mr. Weitz. tape could contribute in cash ?
Mr. Harrison. It wouldn't do any good to TAPE, first they have
to report to the Clerk of the House. Second, its books have to balance
because it is audited.
So it would be foolish, it would seem to me, for TAPE to contribute
in cash, because the end result is going to be just the same, except less
orderly, as if TAPE had contributed by check.
Mr. Weitz. Did you ever counsel after the time of this letter either
AMPI or the other two co-ops, or their political arms to make contri-
butions in cash in whatever form?
Mr. Harrison. No. If there is an implication that that is what I was
counseling them — it is not. All I ever knew in regard to that letter.
Nelson either called me or said to me — I don't know which — "The sit-
uation down there involving the chairman — maybe it doesn't look
very good." I said "You are right, it certainly does not. Get some
farmers down there to contribute something, but do not get TAPE
to do it."
Mr. Weitz. Do you have any knowledge of any cash contributions
which were in fact made with or without your counsel, either by
AMPI, DI, or their political trusts?
Mr. Harrison. No, other than having read it in a paper that
$100,000 that Stuart Russell is alleged to have paid to Robert Lilly,
who is alleged to have spent it someplace.
I am a little curious as to where.
Mr. Weitz. Your answer would still be "No" if I included any of
their employees or representatives or attorneys on their behalf?
Mr. Harrison. No, I know of nobody contributing any cash other
than what I have read in the newspaper on and off for the past several
months.
Mr, Weitz. Let's mark this as exhibit No. 2.
[Whereupon, the document referred to was marked Harrison ex-
hibit No. 2 for identification.*]
Mr. Weitz. Have you ever seen this letter from Patrick J. Hillings
to the President, dated December 16, 1970 ?
Mr. Harrison. Yes, sir, I have.
Mr. Weitz. Do you know who composed the letter ?
Mr. Harrison. Yes.
Mr. Weitz. Who was that ?
Mr. Harrison. Basically, he composed it.
He and I were not in accord about the letter, and I made some
strong suggestions for changes, some of which were adopted and some
of which were not.
I have seen the letter twice, in answer to your question. Once,
the date that it was written ; and the other was about a month or two
ago.
A chap named Horrock of Newsweek magazine brought me a copy
of it. Actually he called me a few days before; he asked me what I
know about it, and I said, well, not much other than the very limited
extent involving the day it was written. Get me a copy of the letter
and let me see if I can recall by refreshing my recollection.
•See p. 6285.
6254
He came to the office a few davs later and brought me a copy of
it.
Mr. Weitz. In the third paragraph of the letter, it reads as follows :
AMPI has followed our advice explicitly and will do so in the future. AJSIPI
contributed :itM:)ut $135,000 to the Republican candidates in the 1970 election.
We are now working with Tom Evans and Herb Kalmbach to set up appropriate
channels for AMPI to contribute $2 million for your reelection. AMPI is also
funding a special project.
I would like to ask you special questions with regard to that para-
graph and the letter in general.
What advice, to your knowledge, did either Mr. Hillings or your
firm give to AMPI that they have followed explicitly?
Was it in connection with political contributions ?
Mr. Harrison. As distinguished between the strict practice of law,
you mean.
Mr. Weitz. Yes.
Mr. Harrison. I suppose there was a lot of advice I gave them that
they did or did not follow explicitly under the subject of various
aspects of administrative law. I presume what you are talking about
are political contributions.
Mr. Weitz. Or political contacts with the White House and the Re-
publican Party, also.
Mr. Harrison. T do not know ai>out the contacts business.
I can tell you some specific advice which I gave which was fol-
lowed specifically. Namely, one or more persons in the client organi-
zation brought up the idea to me of making some contributions to
Republican senatorial candidates in the 1970 election.
I am trying to phrase this in such a way as not to violate an attor-
ney-client privilege, as far as disclosing my advice.
These groups contributed vei-y heavily, I was told, to the Democrats
in 1968. It struck me, inasmuch as there are two political parties in
Washington, that an individual can vote a legislative record which
is just as helpful to an industry if he is in one party or another, that
they ought to look around and be a little more realistic about how they
contribute.
It also struck me, in view of the fact that in 1969 and 1970, that
the incumbent administration, which after all was the only adminis-
tration that could do anything to help the dairy industry at that
point since it was the administration at that point, had been helpful
to the dairy industry, the farmers generally, tnat they ought to make
some eifort to even up the contributions, not get pegged as a group
that supports only one side and not the other; but rather, get pegged
as a group that supports those people in public office, be he the Presi-
dent, Senator, or Congressman, who votes a legislatiA e lecord which
is 'helpful to thfe'Hairly industry. Conversely, you do not support
those who vote one that is not.
I hope I am reading loud and clear, without precisely divulging
advice which somebody might contend would "\aolato the attorney-
client privilege.
In 1970. TAPE contributed, to my knowledge, $110,000 to Republi-
can Senators seeking reelection, or Republican candidates for the
Senate.
And, although it is rare as to that particular instance. I can specif-
ically prove that they followed my advice, because a decision was made
on the spot im.mediatel}'^ following my giving the advice.
6255
Mr. Weitz. Did you speak to anyone in the White House about the
advice that you were giving to AMPI's or TAPE's intended
contributions ?
Mr. Harrison. In the particular instance of the 11 Senate candidates,
yes.
Mr. Weftz, Who was that ; what person ?
Mr. Harrison. Charles W. Colson, and a person by the name of
Gleason, who may or may not, at that point, have been on the Govern-
ment payroll. If he was not, then he had been earlier.
I remember it very, very explicitly, partly because it is the only
time it happened and partly because it was unusual.
Among other things, Mr. Colson recommended the contribution of
$10,000 to an opponent of yours. Senator Montoya.
Senator Montoya. I remember that.
Mr. Harrison. I said :
I am just your lawyer ; I am not sure of all the reasons why I am being
retained. I'd like to think that I am being retained because of a lifetime of
experience and exi)ertise in administrative law. I have also been around this
town a long time.
On the one hand, you have a Senator that is going to be reelected ;
on the other hand, you have a Senator whose — ^by and large — whose
voting record has been helpful to the dairy industry. I do not think
it makes any sense to contribute to the opponent.
They followed my advice.
They also refused, I remember, another one — or, did not refuse ; they
yielded.
]\Ir. Colson did not want a contribution to Senator Hugh Scott, and
I said, here again, I am just your lawyer. You don't have to follow
my advice. They were physically present in the room.
I might mention, that was the first I ever met Mr. Kalmbach.
Mr. Weitz. Who was at this meeting ?
Mr. Harrison. It was Mr. Colson, Mr. Gleason and Mr. Nelson and
Mr. Parr and me.
Mr. Weitz. Where did this take place ?
Mr. Harrison. In Mr. Colson 's office.
Mr. Weitz. Was the sole purpose of the meeting to discuss contribu-
tions for the 1970 campaign, or were there other matters that were
discussed ?
Mr. Harrison. The sole purpose, I was told by whoever set up the
meeting, set it up, was to come over and receive some recommenda-
tions— I think I was probably told this by Mr. Gleason, because I had
met him before, although I hardly knew him — someone told me the
purpose was to come over and receive some recommendations on
whom the dairy industry could contribute to in the Senate races.
Mr. ScHOCHET. You thought it was a noi-mal function and purpose
for the White House staff persons to give recommendations to AMPI
and others that you were representing as to whom they should con-
tribute money ?
Mr. Harrison. I would not phrase it that way.
First of all, we were only representing AMPI ; in the second place —
althougli I have heard through the years — I started off as a page boy
at 15 around here
Mr. ScHOCHET. I did, too.
6256
Mr. Harrison. I have heard of all manner of things that go on ; not
too much surprises me.
It did not surprise me that a very political type of fellow, as Mr.
Colson has always struck me as bein^, would want to get his oar deep
into the water if he thought somebody were disposed to make a lot of
political contributions, and wanted to make some suggestions as to
where those ought to go.
That did not strike me as unusual ; it ne^-er happened to me before,
it has not happened since. It did not strike me as unusual, though.
Mr. ScHOCHET. Was he a special assistant to the President?
Mr. Harrison. I think his title was special counsel to the President.
If it was not, then it became that in due course.
Senator Montoya. Gleason was part of the Whit^ House then, I
think.
Mr. Harrison. He either was or had ; then he kind of disappeared.
Then I read in the newspaper that he was operating out of an office
in the basement someplace. That struck me as rather peculiar.
I remember running into him one day on the street and asking him
how he was doing and getting what struck me as kind of a vague
answer. I also asked him where his office was, and getting a vaguer
answer.
Senator Montoya. How come you were called to the White House ?
Did you have any money to deliver for distribution to the candi-
dates ?
"Wliat brought this about ?
Mr. Harrison. I cajinot t«ll you in fact why we were called. I did
not do the calling.
I can guess that Mr. Colson and Mr. Gleason must have concluded
that the dairy industry would be willing to make some contributions
to Republican Senate candidates or Republican Senators seeking re-
election, and that Mr. Colson wanted to get his very strong advice m
as to whom it ought to be.
Senator Montoya. Was the money available already for contribu-
tion ?
Mr. Harrison. I do not know whether it was or not.
The way that these trust funds operated, and as far as I know still
do operate, a dairy farmer signs an agreement that out of his milk
check so much money per annum may be paid into the fund. And the
sum is a figure imder $100. The purpose of that was so the individual
dairy farmer does not have to report the contribution.
On any given day, T would have no idea. I had no idea then,
whether the fund was $100,000 or it was not. If it was not. presumably
sooner or later this money would come in from the withholds on the
check. One could audit the books as of that date to figure out
Senator Montoya. We have some information on that, do we not ?
Mr. Weitz. Yes.
Senator Montoya. The point I wanted to develop with you, if von
know, was Colson suggesting to you that you pass on this information
and this state of mind for the specific candidates to be a contribution
to that extent?
Mr. Harrison. More than that, what he did was suggest to the
clients who were physically present — I was just there, so to speak, as
their lawyer to help keep them out of trouble. The beginning and end
6257
of my contribution was to object affirmatively to two suggestions ; one
being yours, the other being Senator Mansfield's opponent. My reason-
ing Avas somewhat the same, it does not have much to do with law, but
it is practical reasoning. In addition, he was majority leader.
Senator Montota. Were those contributions made to the opponent ?
Mr. Harrison. The opponents of
Senator Montoya. Senator Mansfield and myself.
Mr. IL\RRisoN. I am sure they were not. The clients agreed on the
spot that they would accept my advice. I do know it as a fact they
accepted it. I hope they did.
I objected — mind you, these are not my words; this is my memory
of my words. I said this does not make sense. We were all in one room.
If the client wants to contribute $100,000 to Republican Senators, that
is fine with me ; there is no legal problem as long as they do it through
TAPE, report it, do it the way they have always done it. There is no
legal problem at all, except 1 do not want them contributing more
than $5,000 to any one committee in any 1 year, because as I interpret
the Federal Practices Act that was then effective, there is a prohibition
against any sum in excess of that.
I might say not everybody agrees with me, but I always stuck with
that view.
Anyway, I said, "As a pragmatic matter of practical politics, I see
no point why you are leaving off Senator Hugh Scott and I do not
know why you want money given to the opponents of Senator Mans-
field and Senator Montoya." The clients agreed with me.
They finally came up with a list of 11 names, adding: to it Hugh
Scott, out of 11 names, which was 10 other people; minus your op-
ponent and minus Senator Mansfield's opponent ; plus Senator Hugh
Scott.
That was the one and only discussion I ever had about specific
sums of money for contributions to Senate candidates with an official
of the Government. The official of the Government was Mr. Colson.
Senator Montoya. Did you in 1972 have a meeting with Mr. Colson
at the Wliite House?
Mr. Harrison. 1972 ; no, sir.
Senator Montoya. Anyone else at the White House ?
Mr. Harrison. No.
Senator Montoya. With respect to political contributions or alloca-
tions of campaign funds ?
Mr. Harrison. No, sir.
I think I know what you are getting at. If I may, let me anticipate
your question and just tell you.
On the subject of contributions for the 1972 race, the only meeting
that I ever had at which Mr. Colson was present was a peculiar sort of
a meeting. It was in November of 1970. But after the 1970 election, I
Avas either in Oregon in connection with matters for a nondairy client,
or if I was not in Oregon, I was here but was going to be in Oregon on
the day that I was requested to schedule the meeting.
The word I got in the office, somebody in the client organization
called and said Mr. Colson wanted to schedule a meeting and that it
was very important, on such-and-such a date; would I be there.
As I say, I cannot remember whether I was in Oregon or Washing-
ton. At any rate, I could not be there on that date. I said, if you want
me there, I cannot be there on that date.
6258
"V\niat it was about, I ne^^er did find out until the meeting — what the
subject matter of the meeting was to be.
In due course, the meeting came to pass. It was in Novemljer of 1970 ;
it was in the Madison Hotel, in somebody's suite, I do not remember
whose.
And as I arrived, Mr. Colson was leaving. He had his hat and coat
on. He may have hung around 5 or 10 minutes with liis hat and coat
on. He did not stay vei*y long.
Senator Montoya. T\nio was at that meeting?
Was Secretar}^ Connally there ?
Mr. Harrison. I never met Mr. Connally.
For r> or 10 minutes or less, Charles Colson was there; of course I
was there; Pat Hillings was there; Harold Nelson; David Parr;
Herbert Kalmbach; and a lawyer from New York who at that time
was a partner, probably still is, in the Mudge lav\' firm, the law firm
from which the President and former Attorney General came.
Mr. Weitz. Was that Tom Evans ?
Mr. Harrison. Yes.
There are two Tom Evans" ; one from Delaware and one from New
York. This is the New York Tom Evans.
The purpose of the meeting, I learned — and I actually learned it
earlier that morning. Because I had never met Evans — Hillings had—
I was a little unhappy about going into a meeting where there was
some lawyer I had never met before, and I am taking clients in there.
Why are we meeting ? This is not the way things normally are done.
And Hillings said, "Oh, he is a great guy, I have known him for
years'" and so forth.
As I recall we had breakfast that morning before the meeting.
Anyway, the purpose of the meeting was stated to be to set up
mechanics whereby the dairy industry could contribute money to the
Presidential campaign.
I guess I would be indulging in a little hyperbole if I said it was an
ineffective meeting. But it was not effective because it struck-me that
was not very complicated. It still does not strike me as being very com-
plicated as to how a trust fund which is a reporting body and which
publicly discloses not only to the Clerk of the House, but to its Mem-
bers what it is doing, how it contributes— that is, somebody gives us a
name of the committee and the address and the name of a real live
treasurer — who contributes not to exceed $5,000 to that committee per
calendar year. And it seemed to me that there was no mechanical prob-
lem, legal problem as far as the client was concerned.
If there was a mechanical problem, the mechanical problem was
on the part of the donees. They either had committees or they did not.
They had their internal structure so organized that they could funnel
money where they wanted to or they could not.
We spent what seemed to me, in terms of the time, an hour or so dis-
cussing what then, as now, does not seem to me to need much discus-
sion.
It was left that Tom Evans, who was going to set up some commit-
tees and find what committees already existed, and then he would
brush them by me for approval. Of course there was not really much
approval for me to give or not to giA'^e.
6259
Be that as it may, in due course over a period, presumably over a
couple of years — these things were all kind of ^^ague as to what the
period of time was — anyhow, the contributions were to be made by
these committees.
The long and short of it was, Tom Evans never set up any com-
mittees. I never heard about them ; I never heard anything until 4 or
5 months later when Lee Nunn, who at that point had just left the
Hill and come to the Finance Committee To Re-Elect the President,
came up with a couple of listings of committees.
Mr. Weitz. At that meeting ?
Mr. Harrison. I do not know what became of Tom Evans ; nobody
ever brushed them by me for my legal approval.
Mr. Weitz. Were there specific amounts that were discussed or
magnitudes of amounts that were discussed in terms of contributions
to the President's reelection ?
Mr. Harrison. I do not think so, other than no committee, as to
which my advice, if it were sought^ — and mind you, I could not antici-
pate the law was going to be changed so you could give more than
$5,000; I had to take the law as it wag, not as it might be — no com-
mittee on which my advice was sought was going to give more than
$5,000 in 1 year.
Mr. Weitz. How about the aggregate ?
Mr. Harrison. No aggregate sum was discussed.
Mr. Weitz. Do you know the origin of the $2 million figure in the
Plillings letter?
Mr. Harrison. The only place T heard it. I cannot say as a fact that
that is the place that Pat Hillings heard it or that he did not hear it
someplace else : the only place T heard it was from David Parr, several
times, in August, September, October — possibly earlier than August ;
let us say summer and fall of 1970. By several times, I mean two or
three times.
Senator Montoya. "\^^^o is David Parr ?
Mr. Harrison. David Parr at that time was an employee of AMPI.
As a practical matter, insofar as I was concerned, he was more or
less, if not the No. 2 employee, then the kind of right-hand man to the
No. 1 employee.
Senator Montoya. When he spoke of $2 million, he spoke with a lit-
tle authority, did he not ?
Mr. Harrison. Have you had him as a witness ?
Senator Montoya. No.
Mr. Harrison. He is capable of being a very expansive, very sales-
man-type of personality. I have heard him — as I said, the two or three
conversations in which I heard him use that figure, T heard him use
the figure of $1 million ; I have heard him use "bigger than the Sea-
farers' Union" ; I have heard him use "as big as the CIO."
I remember once he asked me, "How big is the CIO ?" I said, "How
in the world do I know how much they give or are going to give or are
capable of giving. You will probably never find out, either, because
they have different type of State committees and so on."
He told me somewhere — July, August, September, October, some-
vv'here in that period of 1970-^that he and Harold Nelson had had a
meeting with Charles Colson,
6260
T do not think he ever said when it was ; obvioiislv it was prior to
the time that he was mentioning it; at which he had told them — you
have to kind of understand his personality when he is saying this —
he had told them that the dairy industry was going t/o make a show,
was going to contribute a lot of money, was going to be a good friend
of the President.
Probably — I do not mean Dave Parr and I were sitting here pri-
vately. These are things he would have said whether theie had been
100 people. A couple of times I have heard him use the $2 million
figure, a $1 million figure, the "bigger than" figures.
To answer your question, that is the place I heard the 1^2 million
figure. ^^Hiere Mr. Hillings heard it. T do not know. T would kind of
guess he was in one of those meetings when he heard it from Mr. Parr.
Mr. Wettz. You refer to the $2 million figure as one of Mr. Parr's
expansive boasts or promises
Mr. Harrison. T would not call it a promise."
I do not know what he promised Mr. Colson. T was not there: he
did not tell me if he promised him anything.
Tn the c-ontext of my being present, there was no promise. You
could be kind and say it was a boast, but you could be kinder and say
it Avas Dave Parr's manner of expression.
Mr. Weitz. Why do you think, or why was that $2 million figure
taken and put into the letter, which was not David Parr's lett<»r, but
a letter signed by Hillings from your firm ?
Mr. Hakrtsotc. The precise thought going on in his mind at that
moment you would have to ask him. Maybe because it is the highest
figure that he ever heard. It is the highest one I ever heard until T
heard the President the other night on television mention $10 million.
Mr. Weitz. This was a letter to the President, a letter that you said
you reviewed a.t the time before it was sent.
Mr. Harrison. I tell you
Mr. Weitz. What T want to find out is, besides Mr. Parr's com-
ments, why it was taken over by members of your law firnr; why a
member of your law firm would represent it to the President?
Mr. Harrison. You would have to ask IMr. Hillings.
I do not know to this day what he did with it. Mr. Horrock brought
me a copy not too long ago, I subsequently asked Mr. Hillings what he
did with it. He either does not remember or did not want to tell me.
Mr. Weitz. Would you disagree with Mr. Hillings — if Mr. Hillings
would make a characterization that you drafted the letter, would you
disagree with that ?
Mr. Harrison. Yes. If it were phrased that sweepingly, yes.
Mr. Wettz. This was essentially his work.
Do you know who was the intended recipient ?
Was it intended that the President would rex'eive the letter?
Mr. Harrison. T do not know,
T^et me tell you what the genesis of the letter was.
Long before our meeting. I guess the summer of 1970, the Depart-
ment of Agriculture had recommended to the White House and the
White House had recommended to the Tariff Commission certain
studies concerning areas of imports.
As you probably know, the problems of impoi'ts. at least in my judg-
ment, are the most difficult and the most distressing, the most ubiqui-
6261
tous long-range problem affecting the dairy industry. Other things,
including parity, in my opinion are quite secondary.
That is one man's opinion.
At any rate, in due course after the usual hearings — as I recall this
was a section 22 of the Agricultural Marketing Act^ — after a series of
hearings and studies, the Tariff Commission came up with recommen-
dations concerning four areas of import quotas.
I think they are referred to in that letter, at least a couple of
them are.
In the normal course of things, the action of the President, when the
President — meaning the White House, meaning the people in it that
handle these sorts of things — when they are a part of the chain which
comes up with a recommendation — and the Agriculture Department
goes to the White House, goes to the Tariff Commission, they have
all these studies, all these hearings, many volumes of transcripts, ex-
pert testimony, then you have the recommendation. Normally you have
some change, some dramatic change in the relevant portions of the
economy.
You get a Presidential proclamation implementing the recommen-
dations under section 22 of the Tariff Commission. Those sat around
for months.
I was of the view, perhaps not with too many facts to base it on. so
was Pat Hillings of the view that Chuck Colson could have moved it
along had he been more disposed to do so.
I do not loiow whether I would go so far as to say that I was of the
view he was holding it up. It did not seem to me that he was helping
as in my opinion he should have, there being no change in the economy,
there being no legal impediment, nothing legal having happended.
And as Pat first wrote that letter, it contained what I regarded as a
vei-y rough personal attack on Chuck Colson. I seriously questioned the
wisdom of any kind of communication, much less one in that context,
which makes a very obvious and very, very strong att-ack upon a third
party, a party who is not the addressee of the letter; and at a time
when we were really kind of uncertain what had gone wrong, to say
nothing of the realistic aspect that it did not seem to me that Chuck
Colson was about to go away. So, I was quite unhappy with that por-
tion of the letter, and it got very materially toned down.
I do not know reading it now if you would know who Mr. Hillings
was talking about or not. Believe me, you could the first draft. I forget
whether it mentioned his name directly ; it was obvious as the day was
long.
I understood the purpose of the letter to be to try to get Mr. Colson
off the dime, to use the vernacular. Or alternatively, if he could not
be gotten off the dime, to try to get the liaison, such as it was, with the
dairy industry assigned to somebody else.
I suppose I wondered how someone would read the paragi'aph of the
$2 million. It was not my concern at the time.
Mr. Weitz. Did you ever talk to Mr. Colson about this letter at the
time ?
Mr. HARRisoisr. No.
Senator Montoya. May I interrupt here ?
We have a vote over in the Senate. Would joii require my presence
beyond this, or could you excuse me from being present?
6262
Mr. Harrison. I really want you here.
Senator Montoya. You want me to come back, then ?
Mr. Harrison. I realize it is a terrible inconvenience for your
schedule.
Senator Montoya. I have some other matters to attend to. If you
insist, I will come back.
Mr. Harrison, Mind you, I insist, in a legal, not a personal sense of
the word.
Senator Montoya. All right.
I have to go and vote, and I have to come back. If you want to con-
tinue while I am gone
Mr. Harrison. I will wait.
[A brief recess was held.]
Mr. Weitz. Back on the record. I hope we can move with greater
dispatch and perhaps try to keep both the questions and the answers
strictly to the point if possible.
Do you know anything about the special project which is referred to
in the Hillings letter ? What that refers to ?
Mr. Harrison. I do not know specifically what that refers to.
Mr. Weitz. Do you know of any special projects besides reported
campaign contributions that AMPI or TAPE had agreed to make or
in fact made at any time after this letter ?
Mr. Harrison. No ; other than what I have read the last couple of
months in the newspapers.
Mr. Weitz. Do you know anjrthing of any moneys that Mr. Colson
was raising to certain committees that he had organized or had orga-
nized for nim, for projects that did not involve, directly involve
moneys to the reelection of certain candidates either in 1970 or 1972 ?
]VIr. Harrison. I know of one, but my source of information is totally
hearsay; namely, Mr. Jon Sale, who was one of the assistants, special
prosecutors.
Mr. Weitz. Besides from what you have heard from either the prose-
cutor or what you have read in the paper. 3^ou know of nothing of any
committees organized in behalf of Mr. Colson to receive contributions?
Mr. Harrison. No.
Mr. Weitz. On that point, did there not come a time in either August
or September of 1971 when Mr, Colson requested a $5,000 contribution
from the dairy people ? Asked of you to obtain a $5,000 contribution
from the dairy people?
Mr. Harrison. Well, the precise way you phrased it does not lend to
a "yes-' answer.
If I can rephrase it slightly, the answer will be "yes." That is the
one Mr. Sale told me about.
Yes, there came a time, sometime in 1971, about August, when Mr.
Colson wanted to know if a dairv client, one of the trusts, would make
a contribution to a committee, and he named the committee.
Mr. Schochet. Which committee ?
Mr. Harrison. T do not know ; it was one of those nameless ones.
Mr. Schochet. Would you recall if you were refreshed ?
Mr. Harrison. I do not think T would.
Mr. Schochet. Peo[)]e TTnited for Good Government?
Mr. Harrison. It could be ; I am sure tliat it is one and the same com-
mittee I am going to testify to but I do not recall the precise name.
6263
The committee had as its treasurer, had an address — had as its treas-
urer George D. Webster, a very prominent Washin^on lawyer.
Mr. Colson either asked if that could be added to the list of commit-
tees or asked whether it could be contributed to, whatever way he
phrased it. The net result was the same as asking me if I would recom-
mend to the client that they make a contribution to that committee.
So I said, "sure," and passed on the request to somebody in the client
organization.
In due course, TAPE made a contribution of $5,000 to that com-
mittee. I remember it very, very distinctly because George Webster
has one of those little converted townhouse offices on Jefferson Place
NW. Our law firm had thought of buying a building and converting it ;
I had the idea that I would take the check over to him and have him
show me his office, which he did.
Except for that, I would not remember so distinctly.
Mr. WErrz, You delivered the check to Mr. Webster?
Mr. Harrison. Personally, I did.
Mr. Weitz. How did you receive the check ?
Mr. Harrison. Independently.
I do not remember. Mr. Sale of the prosecutor's office thinks he has it
established that at the AMPI annual meeting in 1971, at which I was in
attendance, along with 40,000 people and the President and everybody
else, a great number of Senators and Congressmen, somebody handed
it to me there.
Mr. Weitz. You do not remember that ?
Mr. Harrison. I do not remember having it handed to me. It could
have been handed me ; someone could have brought it to the office ; it
could have been mailed to the office.
Mr. Weitz. Do you know to what purpose the money was put?
Mr. Harrison. I know what Mr. Sale told me.
Mr. Weitz. Did you know other than that ?
Mr. Harrison. No.
I was pleased to get the name of a committee — I thought Mr. Colson
was doing us a favor — which had a prominent lawyer as the treasurer
and not some bank clerk at Union Trust.
I have nothing against bank clerks. I was very suspicious at the
names of some of those committees that Mr. Lee Nunn had come up
with, with bank clerks as treasurers. They were not organized as know-
ingly and thoroughly as they ought to have been.
Mr. Weitz. We will get to those committees in a minute.
Did you talk to Mr. Webster about the purpose to which their money
would be put ?
Mr. Harrison. No.
Mr. Weitz. Did he indicate that he would organize any other com-
mittees for Mr. Colson, or had provided names of any committees to
Mr. Colson?
Mr. Harrison. No.
Mr. Weitz. Is it likely, coming back to this letter from Mr. Hillings
that AMPI would have been "funding a special project" without your
knowledge ?
Mr. Harrison. Up until a couple of months ago, I would have said
no. In view of some of the things I have read in the papers the last
couple of months, I would say yes ; I suppose anything is possible with-
out my knowledge.
6264
Mr. Weitz. Did you ever talk to Mr. Hillings about such a project ?
Mr. Harrison. A special project?
Mr. Weitz. Yes.
Mr. Harrison. No.
I do not know what that word is referring to. He asked me and I
had a discussion, after Mr. Horrock brought it to me, if I could remem-
ber wliat it was referring to when he referred to the special project,
and I could not then ; I cannot now.
I do remember that Mr. Colson, or Mr. Cashen, his deputy assistant,
whatever he was, on a couple of occasions asked whether I would rec-
ommend contributions to defeated candidates. I was rather unhappy
about that. I was a little concerned that this was going to become an
ongoing operation, whereby the dairy trusts bailed out defeated candi-
dates; that did not much appeal to me for several reasons.
Mr. Weitz. To your knowledge, that had nothing to do with the spe-
cial project?
Mr. Harrison. I do not know whether it did or not.
I asked Pat; he could not remember anything on the day we dis-
cussed the letter on what tlie special project was. The only thing I
could think of was maybe the special project was what we thought
was going to be the ongoing series of bailing out defeated candidates,
to which I was opposed.
I am not sure.
Mr. ScHOCHET. There is a letter here signed by you which you wrote
on June 16, 1971 ; on the last part of the third paragraph
Mr. Weitz. Addressed to Mr. Harold Nelson.
Mr. Schochet. Eight.
I will read the third paragraph :
Let's not wait for the other 75 names. If Bob Isham or someone would bring me
these cliecks, each payable to the named committee, in the sum of $2,500, showing
for your records the address (but not the name) of the chairman as, the address
for the committee, and showing nothing about the treasurer or the bank, I will de-
liver them and we will be started on our project.
What was this project ?
Mr. Harrison. The project in that letter — let me look at that letter.
Mr. Weitz. Let's mark it as exhibit -3.
[Whereupon, the document referred to was marked Harrison exhibit
No. 3 for identification.*]
Mr. Harrison. I do not know whether it will make any diiference in
my recollection, but let me look at it anyway. [Pause.] Yes; these are
the committees that Lee Nunn came up with, and he came up with
them in several dribbles. He told me he was going to come up with 100.
I guess eventually he may have come up with more than 100, but he
came up with them in several dribbles. Those numbers probably refer
to certain numbers of the committees and contributions were made, oh,
perhaps not to all of them, but to most of them, oh $2,500 each.
Mr. Weitz. So, when was this project prepared, organized, or begun ?
Mr. Harrison. This is the one that had its genesis the day I went to
the somewhat futile or abortive meeting with Tom Evans and the
others at the Madison Hotel, at which Chuck Colson was leaving about
the time I was arriving.
*See p. 62&7.
6265
Mr. Weitz. Yon are saying the project referred to here, the 100
committees, of which the committee names represent a portion, was
begun or at least contemplated back in November of 1970.
Mr. Harrison. I did not hear any talk way back in 1970 about how
many committees. The talk at that meeting in 1970 was that Tom
Evans was going to produce some names and addresses of committees
and people, chairman and treasurer. Some of them would be extant
committees. Some of them may be new committees. I was going to ap-
prove them thereafter. The client was going to contribute to them.
Mr. Wettz. I do not want to belabor this.
Mr. Harrison. It kind of fell apart and then it came to life again, T
am thinking in perhaps May or June of 1971, in other words. 8, 9
months later, not in the person of Tom Evans, whom I do not think I
ever saw again, but rather in the person of Lee Nunn.
Mr. Weitz. Without belaboring this, one further question.
The letter of Pat Hillings to the President refers both to setting up
approval channels for the $2 million contribution and to funding of
special projects.
Do I understand your testimony to be that the arrangements with
Tom Evans for a contribution up to $2 million was the same proje^i't,
so to speak, as was finally carried out sometime later through Lee
Nunn in the 100 committees that were provided to the dairy people?
Mr. Harrison. What I said, the genesis of it was at the meeting. It
fell apart. Nothing happened. Tom Evans never came up with any
committees. I never saw the man again.
Mr. Weitz. The multiple committees later provided were separate
from whatever this special project was, to the best of your knowledge.
Mr. Harrison. I would say so.
As I read the letter, it seems like it is talking about two different
things.
Mr. Weitz. You don't know what special project
Mr. Harrison. "V\Tien Pat asked me what the devil is special project,
all I can think of at the moment, the thing, and all I can think of
now is I was unhappy, what seemed to me to be the likelihood of the
clients getting in the position of being a perpetual bail-out operation
for defeated candidates. At that point, I think they had given to some
defeated candidates.
Mr. Weitz. I would like to turn your attention to the milk price
support decision by the Secretary of Agriculture in 1971.
Could you tell me, in March of 1971, with whom you met at the
"\Yhite House in connection with that matter?
Mr. Harrison. Well, there is the much heralded big meeting to
which I took a dozen or so boai'd of directors of these three co-ops.
Mr. Weitz. With the President ?
Mr. Harrison. With the President.
Mr. Weitz. Before that, could you tell us who at the White House
you met with ?
Mr. Harrison. For certain, John Whita,ker and certainly Cashen
and Colson, or Cashen or Colson.
Mr. ScHOCHET. Did you also meet with Hariy Dent?
Mr. Harrison. I was asked that question in my deposition in the
Nader lawsuit. As I recall, I had myself meeting with both Bob
Finch and Harry Dent on the subject. Thereafter, Harry Dent called
30-337 O - 74 - 27
6266
Murray Chotiner and said, "We have never met on the subject." Harry
never mentioned it to me, but he mentioned it to Murray, I started
thinking: about it, and I giiess he is right. I guess we did not meet in
1971 on this or any other subject.
Mr. Weitz. Your testimony would now be contrary to what you re-
called at the time of your deposition ?
You did not meet with Mr. Dent at that time on milk price supports.
Mr. Harrison. My phraseology on the deposition was not correct.
I said, "included among whom T might have met with were" — so he is
still included among those I might have met with. I do not think I
met with him. I think the only time was 1970.
Mr. Weitz. Did you ever discuss with any of the persons at the
White House the matter of political contributions by the dairy people
in March of 1971 ?
Mr. Harrison. No.
Mr. Weitz. Do you know whether anyone on behalf of AMPI, your
law firm or otherwise, discussed political contributions with repre-
sentatives of the White House?
ISIr. Harrison. T do not know of anyone who did. I will answer that
way, although T have read allegations in the paper recently that some
of the clients, did, allegedly with Mr. Connally.
Mr. Weitz. Were you at a meeting with — did you ever meet with
Mr. Jacobsen in INIarch of 1971 ?
Mr. Harrison. No. I met him twice in my life.
]\Ir. Weitz. You never met with Mr. Jacobsen in March of 1971 ?
Mr. Harrison. T met him twice in my life, once in 1970 I discovered
that he was also an attorney retrained by AMPI and no one had ever
mentioned that to me before. I did not know what he did. I guess I
could be vain and say, on the legal sides of things, that which was done
I did.
Be that as it may, I also learned that he was also a very charming
fellow and he had just opened an office in Washington, across the street
from the Madison Hotel. So one day when I was in the IVIadison I
stopped in his office. He had not too long ago opened it. It did not
look like it. It was not completely furnished.
Mr. Weitz. This was not about a dairy support pricing.
Mr. Harrison. It was a 2-minute meeting. I introduced myself to
cliat. The second time I met him, I was on my way to the grand jury
the other day. A whole lot of attorneys were in the hall. Tliey siib-
penaed every attorney that ever represented AMPI. I introduced
myself.
Mr. Wcttz. In March of 1971, did you learn from whatever source
of discussions involving representatives of the White House, which
involved the matter of political contributions by the dairy people?
Mr. Harrison. No.
Mr. Weitz. "When did you first learn — did you know at the time,
for example, March 22, about a $10,000 contribution by TAPE to four
Republican committees?
Mr. Harrison. I do not know. They made so many contributions,
let me tell you. Fi ret there was the $1,000 dinner. Invitations went out
in January.
Mr. Weitz. I am asking about the contributions on March 22.
6267
M7\ Harrison. I conld never ansAver yon whether I know as to what
date I learned, if I learned at all, abont a specific contribution from a
specific trust fund.
Mr. Weitz. Did they ask your advice or inform you of contribu-
tions they were makinfii; to let's say the National Republican Party or
to representatives of the President in 1971 ?
Mr. Harrison. I do not know of any contributions. You use that
phrase over and over ag'ain. T did not know any then, I do not know
any now.
T only know of some alleg'ations in the paper recently.
Mv. Weitz. Who did you take to be the ultimate recipient of the
funds donated to the 100 or a portion of the 100 committees to which
TAPE donated money in 1971 ?
Mr. Harrison. The finance committee of the reelect committee.
Mr. Weitz. You were aware of the fact that those committees were
acting on behalf of or receivino; funds on behalf of the President?
Mr. Harrison. Sure. That does not make it representative of the
President. It was the campaign, they were froino: to the campaign. That
was the name of the game in these political contributions, contributing
to the campaign.
Mr. Weitz. In March of 1971, were you aware of contributions to
Republican committees, national Republican committees by TAPE
and/or the other dairy co-ops that we mentioned ?
Mr. Harrison. In March of 1971 there was a $1,000 dinner. The
dairy people bought five or six or more tables. There were great num-
bers of people there. Tliey invited my wife and me to go. We went.
That is how I know there were great numbers there. It was a $1,000
dinner. A great many of tickets, 50, 60, 80, something.
Mr. Weitz, By the dairy co-ops.
Mr. Harrison, By the dairy co-ops. Great numbers of dairy people
showed up at that dinner. I was aware of that; yes.
Mr. Weitz. Before or after the contributions were made?
Mr, Harrison. I got my invitation t^ the thing before, during, or
after, depending.
Mr. Weitz. Your advice was never asked in regard to those contribu-
tions? ^
Mr. Harrison. With regard to going to the dinner?
Mr, Weitz, No. with regard to the purchase of 70 or 80 tickets to the
dinner, a contribution of $70,000 or $80,000.
Mr. Harrison. My advice as to what?
Be specific,
Mr. Weitz. As to what amount should be given in what form.
Mr. Harrison. Tlie form was a check to half a dozen or 8 or 10
of the dinner committees that were running the dinner, I do not under-
stand your question.
T was in favor of them going to the dinner. I went. I ate. I had a
good time, I thought it was a good idea. I do not understand the
question,
Mr, Weitz. Did they ever ask your advice as to how many tickets
should be bought, what size of a contribution they should make?
Mr. Harrison. Aggregate sum ?
Mr. Weitz. Yes.
Mr. Harrison. No.
6268
Mr. ScHOCHET. In other words, the check that you are talking about,
-vvas it dated March 22 from TAPE to the dinner committees, to the
several dinner committees ?
Were there several checks on March 22 ?
^^^lat was the transaction ?
Mr. Harrison. I am not speaking about any particular checks. Evi-
dently Mr. Weitz is.
I cannot distinguish one check from another 214, 3 years later.
Mr. SciiocHET. Do you know 8 years later that TAPE had given an
aggregate of approximatley $10,000 to dinner committees ?
Mr. Harrison. Wliat was the date of the dinner?
Mr. ScHOCHET. I do not know,
Mr. Weitz. Do you recall ?
Mr. Harrison. No. T\niatever the date of the dinner was, on or
before the date of the dinner, that the trust funds — T cannot tell you
which trust funds — the trust funds were buying five, six, or some
such numbers of tables. T knew that. yes. As a matter of fact, I had
gone down to Lee Nunn. who was in charge of the dinner. He had not
gone to work for the finance committee yet. and told him it looked
like it was going to be fiA^e or six. At one point T hesitated, and then
I cut it back a couple of tables. I was not sure how many they were
going to buy or how many bodies were going to show up.
Mr. Weitz. Did you ever talk to Colson about the contributions
they were making, the tickets they were buying?
Mr. Harrison. About the dinner?
Mr. Weitz. Yes.
Mr. Harrison. No.
Mr. ScHocHET. The dinner occurred before the March 23d meeting
with the President.
Mr. Harrison. Yes. I do not know the date.
Mr. ScHOCHTET. It did occur beforehand. You knew before that
meeting that the money had been given, tickets had been bought.
Mr. Harrison. Yes. Not only that, I was there.
Mr. Weitz. Did there come a time when you sent names of com-
mittees to any of the co-ops for them for their political contributions
to the President?
Mr. Harrison. Certainly the very committees we were testifying
about, I^e Nunn came up with the names of the committees, which
I am estimating were 100 or more.
Mr. Weitz. Did you have anj'thing to do with sending out names for
the committee^ to receive contributions for the dinner we are talking
about in March of 19Y1?
Mr. Harrison. Yes. I got them from Lee Nunn.
Mr. Weitz. Did you arrange — were you also the one who for-
warded or informed Mr. Nunn of the total amounts that would be
given, the total number of tickets that would be purchased?
Mr. Harrison. Yes. I think I said I had to revise it a couple of
times. It changed a couple of times as to how many bodies, if you
will, actually wore going to occupy the tables.
I did not want him. for example, reserving six tables, then there
were only five tables Avorth of people. Worse yet, the other alternative.
Mr. Weitz. "Wlien is your best recollection that you forAvarded
the names of the 100 committees to the A^arious clients ?
Mr. Harrison. I haA'^e no best recollection as to when it was.
6269
Mr. Wkitz. Would it have been soon after the dinner?
Mr. Harrisox. I have no best recollection as to whether it was
before, during, or after the dinner. It was about that period of time.
Mr. Weitz, That you sent the names of the 100 committtees?
Mr. Harrisois-. The 100 committees.
Mr. Weitz. I am talking about the 100 committees.
Mr. Harrison. The 100 committees, that would have been several
months after that.
You are talking about two different things, the dinner
committees
Mr. Weitz. With regard to the 100 committees, within several
months after the dinner, you said.
What about these lists of committee names? Have you ever seen
that list before?
If so, could you identify it for us?
"Mr. Harrison. I definitely have seen a list of the names of these
committees because, as I tried to make clear, Lee Nunn gave them
to me and T forwarded it on to the client. Whether T have seen this
particular piece of paper or the original of this in this order, I can-
not tell you.
Mr. Weitz. Let me ask you this: The memo to which this is
attached, which is from Jane Wright, from the desk of Jane Wright.
She has typed on it from Marion Harrison, dated April 1, 1971.
Does that refresh your recollection as to the time period in which
you would have forwarded the names of the 100 committees to the
dairy people?
Mr. Harrison. 'No: not really. I would have still have thought
it was May or June. logically, I would have to say yes, it refreshes
m^^ recollection, it was April 1. The fact of the matter is, it does not.
Mr. Weitz. Do you recall whether soine of the names of the original
nrimber of committees had to be changed or reconstituted before
the final list went out?
Mr. Harrison. I remember I objected to half a dozen, maybe 2
dozen of them because I thought the names were misleading. T saw
nothing wrong as a matter of law or as a matter of politics to a
meaninarless name, but as a matter of law, I saw trouble with a
misleading name.
Mr. Weitz. With regard to that, however, this is a letter which
you addressed to INIr. Robert Isham, trustee for TAPE in 1971?
Mr. Harrison. Yes.
Mr. Weitz. Is it not true that that is an opinion letter in which
you stated that the letters are regular and are legal and may receive
contributions for the President's reelection?
Mr. Harrison. I think under the best evidence rule, it speaks for
itself. I do not think I would disagree with your characterization
of it.
Mr. Weitz. We are turning to exhibit No. 3 which you have iden-
tified. The last paragraph reads as follows — ^the letter fi-om you to
Mr. Nelson, dated June 16, forwarding the list of the 25 committee
names :
The faf't this all took so long and is yet incomplete frustrates me. believe me.
even more than it frustratees yon. Sometimes it is diflScult to honor a commitment !
Can jj-ou tell us what commitment you were talking about?
6270
Mr. Harrison. Yes. Lee Nunn said he was ^oing to produce, or I
gfuess he did produce 100, and it turned out to be a little over 100
names. The dairy clients had made it clear, I thought, insistently
clear that if they got names of committees, bona fide committees, over
a period of time they would make contributions to those committees.
Somehow, beginning with the meeting in November of 1970, the
Evans-Kalmbach-Colson meeting at the Madison Hotel, the ability,
if I may be uncharitable, of the donees to produce names of commit-
tees with addresses and treasurer and whatnot seemed unduly lim-
ited.
Mr. Weitz. Did you ever talk to Mr. Colson about this commitment
in 1971 ?
Mr. Harrison. No.
Mr. Weitz. Do you know whether anyone, on behalf of AMPI, dis-
cussed this matter with Mr. Colson?
Mr. Harrison. Not to m.y knowledge, other than the conversation I
alluded to befoi-e the Senator had to go vote; namely, Dave Parr's
saying on a couple of occasions that he and Harold Nelson had had
a conversation. That could not have been later than late summer or
fall of 1970, it might have been earlier than that, with Chuck Colson
which he, Dave Parr, had said, and then you have the several different
versions at different times of what David Parr had said.
The long and short of it is, if I do what a witness should never do,
is volunteer, the dairy clients intended to make contributions over a
period of time to the reelection of the President. You can call it a
commitment, an understanding or a statement of intention. You can
call it anything you want. They intended to do it.
Mr. Weitz. Was that ever communicated to any representative of
the Wliite House?
Mr. Harrison. I would suppose it was, but I do not know it as a
fact.
Mr. Weitz. Do you know whether it was ever told to Mr. Colson, for
example ?
Mr. Harrison. Remember that he was leaving the meeting at the
Madison as I was arriving.
Mr. Weitz. I was talking about subsequent.
Mr. Harrison. 1971, back in 1970, 1 think it was.
Mr. Weitz. Do you know whether the matter of political contribu-
tions or this commitment or intention was ever discussed with any
representatives in relation to the milk support?
Mr. Harrison. Not to my knowledge.
Mr. Weitz. No one ever told you about any conversation ?
Mr. Harrison. No.
Mr. Weitz. Do you know whether there ever took place any meet-
ings with the representatives of the dairy with John Connally in
1971?
Mr. Harrison. I subsequently read about them in the newspaper.
Mr. Weitz. Has anyone ever talked to you. other than what you read
in the newspaper?
Mr. Harrison. No.
Mr. Weitz. Do you know of any additional commitments of money
alx)ve and beyond this $2 million ?
Mr. Harrison. You are jumpiiig beyond my testimony. I know of no
commitment of $2 million. All I know of was a conversation — I must
6271
say Harold Nelson has never said word one about it, but Dave Parr on
several occasions did. a conversation between the fwo of them in 1970
and which Dave Parr said that what he was going: to do. the dairy
industry was groing to do A, B, C, D, whatever version Dave Parr
was enimciating at that time.
Mr. Weitz. Did you ever meet with Bob Lilly or ever present at
a meeting with Bob Lilly in March of 1971 ?
Mr. Harrison. No,
Mr. Weitz, Do you know Bob Lilly ?
Mr. Harrison. Yes
Mr. Weitz. Did you ever discuss this matter with Mr. Lilly, the
dairy price support increase question ?
Mr. Harrison. No.
Mr. Weitz, Did you ever discuss political contributions with Mr.
Lilly?
Mr, Harrison. I probably did.
Mr, Weitz. To the President's reelection.
Mr. Harrison. No. Vis-a-vis some Congressmen and Senators.
Mr. Weitz. In the context of contributions to the Committee To
Re-Elect the President,
Mr, Harrison. Bob Lilly has very extensive knowledge as to the
workings and financial needs of Congressmen and Senators from the
Southwest, and parts of — South and parts of the Midwest.
Mr. Weitz. You never discussed political contributions in the con-
text of the Presidential campaign in 1972 ?
Mr, Harrison. No.
Senator Montoya, T will have to go and vote.
[A brief recess was taken.]
Mr. Weitz. To clear the record, when you met with Mr. ^Yhitaker
in March of 1971 and Mr. Colson and/or Mr. Cashen, did you discuss
with them the milk price support question ?
Mr, Harrison. Yes.
INfr, Weitz, Did you discuss with them at the same time an\i:hing
to do with political contributions by the dairy people ?
Mr, Harrison. No,
Mr. ScHOCHET. At any time in March of 1971 ?
Mr, Harrison. No; politics in the sense that you have an industry
which literally is 300 percent in favoi- of keeping parity at 85 percent,
and you have it strewn all over the country. Every State in the
Union has some, even Rhode Island.
Mr. Weitz. But not political contributions ?
Mr, Harrison. No; I do not know whether John T\niitaker knew
that anv contributions had been made or not,
Mr. Weitz. That is my next question. Do you know whether any-
body, the President or anyone at the White House, was aware of any
contributions that had been made on the 22d ?
Mr. Harrison. No ; I do not know.
^NIi-, Weitz. You were never told or aware of any discussion that
anyone else — I mean, of the dairy people — had about contributions,
any of those peoj^le or anyone else representing the President or the
President himself ?
Mr. Harrison, That is a fair statement, yes.
Mr, AYettz. Did you meet with Mv. Lilly concerning milk price
supports for the 1971-72 year at any time other than March 1971?
6272
Mr. Harrison. No; I never had any discussion with Mr. Lilly
about milk price supports at all.
Mr. Weitz. Were he and you ever present in the same room at the
same meeting, whether you were conversing with him or not, March
of 1971 or at any other time, where discussions of political contribu-
tions took place ?
Mr. Harrison. It is possible, if it were a meeting of people from
the client organization and he is one of them. That is possible. As far
as having been in the same meeting with anybody from the Govern-
ment, no.
Mr. "Weitz, Talking about the possibility of him being present in
a meeting with you as the representative of the client, is it possible
that a meeting took place in March of 1971 ?
Mr. Harrison. Not March of 1971. Somewhere in 1970, 1971, there
might have been a meeting where contributions were discussed with
client people. He may have been there. I have no recollection of his
having been there. He could have been.
Mr. Weitz. You were never at any meeting, February, March,
April, of 1971 at which, with representatives of the client, client
people, in which commitments, as requested by Mr. Connally, were
discussed, commitments of contributions ?
Mr. Harrison. No; not only that, T think I can say, even though
it is a rash statement, I do not believe I ever heard the name Connally
in connection with anything during this period.
Mr. "Weitz. Did you meet with Mr. Jacobsen during this period ?
Mr. Harrison. I met him twice in my life, the other day and way
back in 1970.
Mr. Weitz. Besides meeting with the gentlemen, were you ever
present or ever become aware, other than what you read in the paper,
of any discussions which Mr. Jacobsen had with Mr. Connally or
members of the — or the client of contributions to the President as a
result of a meeting with Mr. Connally ?
That is kind of convoluted.
Mr. Harrison. I get your point.
Sometime in 1972, somebody told me that one or more of these trust
funds had contributed to the Democrats for Nixon, or Democrats to
reelect the President, whatever it was, the Connally operation. To
that extent the answer to the question is "Yes."
Mr. Weitz. Do you know who that person was ?
Mr. Harrison. ISTo ; it was somebody from one of these co-ops.
Mr. Weitz. Did that contribution have anything to do with the
milk price support decision in 1971 to your knowledge ?
Mr. Harrison. No.
Mr. Weitz. With regard to the contributions made by the political
trust funds in 1971 to the multiple committees, the 100 committees
Mr. Harrison. Yes.
Mr. Weitz. "Who provided , the names of the committees to the
trust funds ?
Mr. Harrison. Within the client organization ?
Mr. Weitz. To the client.
Mr. Harrison. T sent them the names I got from Nunn.
Mr. Weitz. Did you send them to all three of the trust funds or
just representatives of AMPI ?
6273
Mr. Harrison. I rather think that 1 just sent the list on to Harold
Nelson, general manager of AMPI. I do not want to say — I think — I
do not believe I sent them to the leadership in Mid-Am and DI. I
miofht have, or if I did, I sent them with a transmittal letter with
carbons, the whole works.
Mr. Weitz. Was Mr. Chotiner involved at all ?
Mr. Harrison. In doing what?
Mr. Weitz, In sending names of committees or helping to organize
or assist in the contributions ?
Mr. Harrison. After the fact he was, to this extent. I went to
Europe. I delivered a paper at the American Bar Association meeting
in London. I took my wife and children and stayed in Europe quite a
while, about 6 weeks. Before I left. I advised the girls in the office
that if anything came up concerning the dairy clients, be it legal or be
it anything pertaining to contributions, that he should handle it. And
just before I left, as I recall, there was some discussion about some
more contributions that had been made or mailed or were going to be
mailed or something, and I specifically wanted him to be sure, if we
ended up getting them, that they got delivered to Lee Nuim.
Mr. Weitz. Do you know Gary Hanman ?
Mr. Harrison. Yes.
Mr. Weitz. Wliat is his position ?
"WHiat was his position in 1971 ?
Mr. Harrison. Approximately what it is now. He is the senior em-
ployee of Mid- America.
Mr. Weitz. Was it your understanding that Mr. Chotiner may haA^e
actually sent the names of committees to the other two co-ops, or may
have received contributions from them as part of the contributions
to the 100 committees?
Mr. Harrison. As I recall, he did. There was some discussion about
this in the deposition that I have rather forgotten at the moment. But
as I recall, the client sent some checks to our office — something to do
about the checks — while I was gone.
Mr. Weitz. Did your office or you receive the checks made out to the
100 committees made out of the trust ?
Mr. Harrison. It was an erratic proposition. Sometimes somebody
in the form of an employee of one of the co-ops, being in Washington
anyway — they are in and out all the time — would bring a check or
checks and leave it in our office. We are on,the fifth floor. Lee Nunn and
the finance operation was on the second floor. Just so somebody — it
would usually be the receptionist, my secretary, or me — would take the
check downstairs and leave it, either get a receipt or remind them that
we want receipts because we report all of these contributions. That is to
say, the trusts report them. Sometimes they would mail them in to us,
and then sometimes they would contribute them directly. I was a, ware
of no particular pattern.
Mr. Weitz. Did you ever deliver any of those checks to Robert
Bennett?
Mr. Harrison. I never met Robert. Bennett.
Mr. Weitz. All the checks that your firm received were received by
the finance committee on the second floor at 1701 ?
Mr. Harrison. To the 100 give-or-take committees, yes, if you count
the Colson recommended W^ebster committee as not iDeing one of the
100, In other words, I took that check over to George Webster.
6274
Mr. Weitz. Were there any other moneys — in connection with the
moneys that you delivered to Mr. Webster, were there any other con-
tributions that Mr. Colson ever asked of you, asked of the dairy peo-
ple through you, other than this one $5,000 contribution ?
Mr. Harrison. Oh, yes. The two I referred to a while ago, in what
I feared would be a commencement of a syndrome of contributions to
assist in paying off debts of defeated candidates.
Mr. Weitz. Other than that, in connection with the 1970 campaign,
other than those two requests, were there any other requests in 1971 and
1972 that Mr. Colson made of you for contributions, either in cash or
check, for either the President, the reelection of the President, or any
other special committees that he had organized ?
Mr. Harrison. No.
Mr. ScHocHET. Do you not think it was unusual for him to come to
you in the circumstances and ask for you to get a check, to get this
money together, if he had never done it before ?
Mr. Harrison. What check ? What money ?
Senator Montoya. The $5,000.
Mr. Harrison. George Webster's committee ?
Mr. ScHOCHET. Yes. Was that not unusual ?
Mr. Harrison. I did not think it was unusual.
Mr. ScHOCHET. Why not ?
Mr. Harrison. Wliy would I think it unusual ?
He gave me a name of another committee. The client was in the
process of contributing to committees. It was more or less an ongoing
source of contributions to committees, and he produced the name of a
committee with a respectable lawyer's address for the committee and
asked if we would also contribute to that one.
Mr. ScHOCHET. He had not done that before, had he ?
Mr. Harrison. Other than the two previous times.
Mr. Weitz. Wasn't it natural that the other contributions to the 100
committees, give or take, were in the amounts of $2,500 each ?
Mr. Harrison. I think it is. I could not swear to it.
Mr. Weitz. Did you not think it unusual that this request was for
$5,000 rather than for $2,500 ?
Mr. Harrison. I am not sure it was for $5,000.
Mr. Weitz. If it were for $5,000.
You do not recall the amount ?
Mr. Harrison. No. Jon Sale and I discussed that very point. He
was quite interested in trying to find out, if Mr. Colson gave me the
name of another committee and ask if we would add it to the list of
committees or ask if we would contribute to it. However he may have
phrased it, or did he ask for $5,000 for that committee.
I cannot remember whether he asked for $5,000, or whether I recom-
mended $5,000, or someone in the client organization decided on $5,000.
If it were an odd figure, it would solve it. I*^ the figure had been
$47 I would know that he would have had to ask for that figure, be-
cause my approach worked in terms of $2,500 and $5,000.
Mr. ScHOCHET. Could it have been $2,000 ?
Mr. Harrison. I would have recalled it if he had asked for $2,000.
My approach was $2,500 and $5,000. This was very simple. I warned
them several times of the risk of contributing more than $5,000 in
one calendar year to one committee. The way you can avoid that is
don't ever contribute to a committee other than $2,500 or $5,000. That
6275
is one contribution, and one case, too, and you are not going to get
mixed up.
Mr. Weitz. Do you know why, in fact, they chose $2,500, if in fact,
they did contribute $2,500 to each of the more or less 100 committees,
rather than $5,000?
Mr. Harrison. For a fact, no. With 100 committees, my God.
Mr. Weitz. Were there other arrangements providing for $2,500
per committee in 1971 or later ?
Mr. Harrison. No arrangement.
Mr. Weitz. Was there any understanding or discussion of that
possibility ?
Mr. Harrison. Not that I participated in.
Mr. Weitz. Did you ever hear of such a discussion ?
Mr. Harrison. No.
Mr. Weitz. To your knowledge there was no such discussion or pro-
posal or arrangement ?
Mr. Harrison. To my knowledge that is right.
Mr. Weitz. No one has ever told you of any such arrangement ?
Mr. Harrison. No, I never heard other than the Parr conversations
of which I have alluded to probably too many times of any aggregate
figure or any specific period of time.
Mr. Weitz. Did there come a time in late 1971 when you discussed
the possibility of delaying contributions to these 100 committees or to
other committees provided bv the Republicans with Mr. Sloan — Hugh
Sloan?
Mr. Harrison. No.
Mr. Weitz. Herb Kalmbach ?
Mr, Harrison. No, I had no discussions with Herb Kalmbach at all,
other than the Evans-Kalmbach-Colson meeting at the Madison.
Mr. Weitz. In 1970?
Mr. Harrison. In 1970. Prior to that, this business of $110,000 to tlie
11 Senators, other than going to lunch with him once.
Mr. Weitz. Did you discuss the question of delaying these contri-
butions to the committees in 1971 or 1972 with Lee Nunn ?
Mr. Harrison. Not that I can recall.
You must be trying to get at something. Can you give me something
to refresh my recollection, whether it be a reason why I would have
discussed delaying with him or with anybody ?
Mr. Weitz. Let me ask you this. Was there ever any discussion,
either by you with a client or by you with representatives of the
reelection effort as to whether additional contributions other than
those that were actually made by TAPE and the other two trusts in
1971, about delaying those contributions either until 1972, prior to
April 7, or to delaying them after April 7 ?
Mr. Harrison. No discussion about April 7 at all in which I
participated.
Mr. Weitz. Was there any discussion about the timing of subse-
quent contributions, a discussion in general terms of delaying, holding
off, or postponing ? Anything of that nature ?
Mr. Harrison. To this limited extent, yes. I cannot say to a cer-
tainty that it was ever articulated in so many words, but I got the
impression in late 1971 that the management of AMPl was not as
enthusiastic with the Nixon administration at that time as it had been
6276
at an earlier time. I know of no conscious effort either to turn on or
turn off contributions. The public position as well as the private posi-
tion at any time I was present continued to be that the three dairy
trusts were supporting the reelection of the President.
Mr, Weitz. There was never any discussion that either you were
aware of or participated in, in which the actual timing or amounts
of further contributions were discussed, subsequent to those that were
actually made through the summer and early fall of 1971 ?
Mr. Harrison. I had some discussions with George Mehren when
he took over in 1972 about whether they were or were not.
Mr. Weitz. Where did those discussions take place ?
Mr. Harrison. Where ?
Mr. Weitz. Yes.
Mr. Harrison. I do not recall. Either on the telephone, his office,
my office.
Mr. Weitz. Do you recall flying out to San Antonio in late January
1972, and meeting with him?
Mr. Harrison. Yes. Right after the change in command — the revo-
lution, one might term it — within Associated Milk Producers, Inc.
Mr. Weitz. • When you met with him, what did you discuss with him
in relation to contributions to the President's reelection effort?
Mr. Harrison. As I recall, he was not very enthusiastic about mak-
ing more contributions. In the first place, he did not have and still
does not have as much influence in the organization as his predecessors
had, as I read it. Be that as it may, I got the impression he was
not as enthusiastic as his predecessors had been about making
contributions.
Mr. Weitz. Did he indicate that in fact he would recommend con-
tributions to honor any previous commitments ?
Mr. Harrison. No. I do not think any previous commitment was
discussed.
Mr. Weitz. Did he ask you whether a previous commitment had
been made to the Republicans ?
Mr. Harrison. Yes.
Mr. Weitz. What did you tell him ?
Mr. Harrison. I told him about the Dave Parr conversation. He
knows Dave Parr far better than I do. They worked together from
various vantage points for years and years, so it was not necessary for
me to educate him on Mr. Parr's personality. Anyhow, I discussed the
fact that Dave Parr had referred to the meeting of Colson, what we dis-
cussed earlier here today. Depending upon one's interpretation of it,
the intent was either $1 million or $2 million, or the intent was to equal
or exceed other major contributors in order to get the dairy industry
on the map.
I cannot remember for sure. We probably discussed the extent to
which others might know of that. I think we probably both concluded
great numbers of people would have been told.
Mr. Weitz. Including representatives of the reelection effort for the
President ?
Mr. Harrison. I do not think we have any way of knowing whether
Dave Parr had specifically told them. I do not; I am not even sure
whether he knows any of them.
Mr. Weitz. Herb Kalmbach?
6277
Mr. Harrison. He is a talker.
Mr. Weitz. He had met with Herb Kalmbach and Charles Colson
for two.
Mr. Harrison. Of course, for all I know he could have met with
either of those at times I do not know about.
Mr, Weitz. After this meeting — did Dr. Mehren at this time with
you in January of 1972 indicate as to what he intended to do as far as
contributions to the President's reelection ?
Mr. Harrison. No, if it was not at that meeting down in San
Antonio. I spent the night with him and his wife. We had discussions,
you know, over a scotch at his house all evening on all manners of
subjects, including the rather impressive cellar in their home.
Mr. Weitz. With regard to contributions ?
Mr. Harrison. Somewhere along the line, or in a subsequent con-
versation, he might have expressed some concern as to the wisdom or
lack of wisdom in making more contributions. In other words, was it
helping or hurting the dairy industry.
Mr. Weitz. Did you make a recommendation to him?
Mr. Harrison. I do not think I made a recommendation.
Mr. Weitz. Did you offer your own opinion ?
Mr. Harrison. I offered my opinion, yes.
Mr. Weitz. What was the opinion you offered to him?
Mr. Harrison. My opinion was, I would go on and make a few more.
I am not sure just how many or for what time sequence, and, of course,
a lot would depend on who the Democratic nominee was going to be
and what it looked like the Democratic nominee if successful might
do or not do for the dairy industry, and the extent to which it looked
like the Democrats v>^duld win. In other words, the practical
consideration.
Mr. Weitz. Did there come a time after this meeting with
Dr. Mehren when you learned that, in fact, they intended or would be
giving — they meaning TAPE — would be making no further contri-
butions to the President's reelection ?
Mr. Harrison. No, T do not think so. George Mehren was ambivalent
on it for a while. Somewhere along the line in 1972, a good bit later
in 1972, he told me that Herbert Kalmbach had suggested to him that
they not give any more, which rather surprised me because that was
not the Herb Kalmbach I had heard about and read about, and it fur-
ther surprised me because I was wondering what he was doing talking
to Herb Kalmbach. But I let it pass.
Mr. Weitz. Did you ever communicate what you learned to anyone
in the finance committee or its predecessor ?
Mr. Harrison. Not that precisely. I probably had a few quick dis-
cussions with Lee Nunn on the overall dairy situation. He is a farmer
from Kentucky.
Mr, Weitz. Wlien would these have been ?
^\niat time period in 1972 ?
Mr. Harrison. I cannot tell you. There were probably two or thiree
of them. Spring, summer, I cannot be sure.
Mr. Weitz. Would they have been prior to April 7, do you recall] ?
Mr. Harrison. I cannot recall, but April 7 would have had no signifi-
cance one way or the other as far as I'm concerned. There is nothing
involving the dairy industry on April 7.
6278
Mr. Weitz. There is with that particular campaigfn.
Mr. Harrison. It makes no difference to these trusts. They report
the contributions publicl3\ The only difference is, under the old law
you had to liave, if you're going to get $10,000 and you're going to give
it in 1972, you had to have two committees. Under the new law, one
committee is all you need.
Mr. WErrz. Did you ever tell Lee Nunn or Hugh Sloan — did you tell
Mr. Nunn in any of these conversations whether or not you related
the exact content of your discussion with Dr. Mehren that TAPE
would not be making any further contributions to the reelection effort?
Mr. Harrison. No. I never knew that as a fact.
Mr. Weitz. You never communicated that to Hugh Sloan either'
Mr. Harrison. I communicated nothing to Hugh Sloan. Hugh Sloan
had a desk in a cubbyhole next- to Lee Nunn's, and Bill Dobrovir
showed me what he, Sloan, said in his deposition. I would say he
slig'htly exaggerated the number of conversations we had.
Mr. ScHOCHET. Are you referring to Mr. Sloan's statement that you
were disturbed that the committees were not available to resen^e con-
tributions on the deadline which was indicated to you ?
Mr. Harrison. There was not any deadline.
Yes, that statement is inaccurate. I was not concerned about any
deadline. There wasn't any deadline we were talking about back in
1971, not in 1972.
Mr. Weitz. I just have a few more questions.
Do you know who else in the White House was aware, in 1971,
besides perhaps Mr. Colson, of contributions that were contemplated
or were in fact made by the dairy trusts to the President's reelection ?
Mr. Harrison. No, nor do I know as a fact that Mr. Colson was
aware. I was rather surmising that he was. I do not know it as a fact.
Mr. Weitz. Do you know a Mr. Baroody, Joe Baroody ?
Mr. Harrison. There are several Baroody brothers. There is one
of them that used to be some kind of an assistant to Melvin Laird
when Melvin Laird was at the Pentagon, and now is assistant to him
at the White House. I met him 1 day at the White House 3 or 4 or
5 months ago.
Mr. Weitz. Do you know a Baroody who, I believe, is in private
business in Washington, the consulting business in the name of the
firm of Wagner and Baroody ?
Mr. Harrison. I do not think I know that one. Conceivably, I could
have met him at a cocktail party. I do not even think I have done that.
Mr. Weitz. Do you have any questions ?
Mr. ScHOCHET. I have a few questions.
The March 23 meeting of the President, at that meeting
Senator Montoya. May I go into something else ?
Mr. ScHocHET. Yes.
Senator Montoya. Did you hear about a meeting which was held
at the Madison Hotel between Jacobsen and Connally and some of
your people in March, on or about March 21 or 22, 1972?
Mr. Harrison. No, sir.
Senator Montoya. Did you hear of any meeting at which Connally
was present with respect to campaign contributions, with respect to
the dairy industry ?
Mr. Harrison. No, sir. I never heard other than reading it in the
newspaper of any of these people having a meeting at any time with
6279
Mr. Connally. Mind you. I'm not suggestinof they did not. I never
heard about it.
Senator Montoya. All riffht.
Mr. ScHOCiiET. On the March 23 meeting: with the President in
which you were present and executives from AMPI and your other
clients "were present, and Secretary Hardin and Under Secretary
Campbell were present, did Secretary Hardin indicate at that meeting:
that thev were still opposed to changring: the price support level, or
indicate something to that effect, that they were still questioning, they
still stood on their decision ?
What was their viewpoint expressed at that meeting?
Mr. Harrison. You have two questions there. The answer to the
first question is yes. they both indicated that they were still opposed
to keeping parity at 85 percent, which would have involved raising it
from $4.66 to $4.96 a hundredweight. As to the degree of expression,
I don't know if you know these two gentlemen at all. They are differ-
ent sorts of personalities. Secretary- Hardin is a professional type,
bright, scholarly, well-informed. I would sum it up in one sentence by
saying he made a statement which on balance was in favor of $4.66,
but which acknowledged arguments on both sides, as somewhat of an
academician's statement.
T would say Mr. Campbell, who is an absolutely delightful and
charming fellow and a different personalitv, former commissioner of
agriculture for the State of Georgia. He's used to being out talking
to farmers, presenting issues on stumps. He made a stronger presenta-
tion in support of $4.66.
Mr. ScHOCHET. Were there any discussions of campaign contribu-
tions or a quid pro quo type of relationship at all ?
Any indications?
INIr. PTarrtsox. No, no discussion of politics at all. T rather thought,
considering the fact that these groups represented some substantial
votei-s around the countr\% that somebody sooner or later would sa}"^
something about politics. But nobody did.
Mr. ScHOCHET. Did Mr. Nelson tell the President that his group
was the most aggressive political organization in asrriculture?
Mr. Harrtson. I do not think the word "political" in any part of
the speech was used at all. It could have been. I was not taking notes.
Mr. ScHOCHET. Something to that effect was being said by Mr.
Nelson ?
Mr. Harrison. I kind of doubt it. The picture that he was painting
was that the dairy co-ops had come to life and were growing rapidly
and expanding rapidly and doing great things for the farmers, and I
think that was in the context of the President's concern, the President
obviously having been well briefed, if I may say so. on the question of
overproductioTi. because individual farmers cannot effectivelv control
production. If it were going to be controlled at all, apart from any
antitrust law implications, it has to he controlled by the mass processes
of large co-ops or co-ops working together.
Mr. ScHocHET. Did you see any notes that Mr. Nelson took at that
meeting ?
Did he show you any or mention to you that he had taken any notes
at that meeting ?
Mr. Harrison, No, he did not show me any and he did not mention
that he was taking any or had taken any.
6280
Mr. ScHOCHET. Tliat afternoon the President met with Mr. Ehrlich-
man and Secretary Hardin.
Did Secretary Hardin or anyone else tell you what went on during
that meeting?
Mr. Haerison. No. In fact, I did not learn about the meeting until
long thereafter.
Mr. Weitz. Mr. Sanders.
Mr. Sanders. Do you know of any facts that would prove or tend to
prove that the March 25, 1971, decision to raise the support level for
milk was based on any promise, agreement, understanding, or commit-
ment that the dairy trusts or any of their affiliates would provide funds
to a certain level for the reelection of President Nixon ?
Mr. Harrison. I know of no such fact. I hear a lot of allegations,
including cartoons ; but I do not know of any facts.
Mr. Sanders. Did you have any reason to think that TAPE would
contribute to each of the 100 committees, the names of which you pro-
vided to them ?
Mr. Harrison. Oh, no. In fact, if I had any thoughts on the matter,
I would rather doubt that it would, because that would be $250,000 in
1 year from one trust. I am not sure I had any particular thoughts
on the matter.
Mr. Sanders. That is all I have, Alan. Since I was out of the room
for a few minutes, I do want to cover that meeting again with Evans.
Maybe you can brief me on that afterward.
Mr. Weitz. Or you can just rsad the record. We are fairly complete
on that.
Mr. Sanders. That's all I have.
Mr. ScHOCHET. I have one further question.
On April 5, 1971, the ADEPT Committee contributed $45,000 to
several committees. Were these funds borrowed from TAPE ?
Mr. Harrison. I do not know. Somebody — I believe it was Mr.
Dobrovir — ^told me they were. Thereafter I inquired — somebody in
the client organization or one of the client organizations — ^there ap-
peared to be some kind of debating back and forth. I do not know. I
did not know at the time, I do not know now.
Mr. ScHOCHET. All right. That is all I have.
Mr. Weitz. You say it was not your understanding that TAPE
would contribute $2,500 in 1971 to each of the 100 committees?
Mr. Harrison. No.
Mr. Weitz. Was it your understanding that the three trusts taken
together in tlie aggregate would contribute $2,500 to each of the 100
committees ; the 100 committees would be used by the three trusts taken
together?
Mr, Harrison, It was never spelled out. I guess maybe I probably
had the notion that they would. I got no direct, clear impression from
anybody.
Mr. Weitz, I have here a letter dated August 9 from David Parr
to Gar}' Hanman, Mid-America Dairymen, "Dear Gary, please mail
checks for each committee number in the amount of $2,500 each to
Reeves and Harrison, attention Murray Chotiner." And I believe there
are 12 committees.
Looking at these names of committees, do you recall whether those
committees were to be provided by Mr. Chotiner to Mid- America?
6281
Mr, Harrison. I don't need to look at it. I do not remember one
name of a committee from another name of a committee. They are
rather meaningless, euphemistic-type names.
Mr. Weitz. Were you aware at the same time 12 commit/tee names
were sent out to Dairymen, Inc., for contributions from SPACE?
Mr. Harrison. No. What one co-op was going to do in relation to
another, or whether there was to be any relationship is a matter a;bout
which I have no knowledge, and the ultimate results rather grew like
topsy rather than by mutual planning.
Mr. Weitz. You say you had knowledge about what they would do.
Did you have knowledge of any advice that was given to them either
by you or anyone else, or direction, or suggestion as to how they should
do what they were being requested to do in terms of coordinating the
contributions to the reelection effort ?
Mr. Harrison. The only advice I gave, "Don't give more than
$5,000."
Mr. Weitz. Why did Mr. Chotiner send them ?
Mr. Harrison, t was in Europe at that time.
Mr. Weitz. Did you give any instructions to that effect ?
Mr. Harrison. Yes. I testified earlier. I thought some more contribu-
tions might come in, and they might come in to us.
Mr. Weitz. In advance of that, what about the list of names being
sent out?
Mr. Harrison. I already told you. I sent out the names that I got
from tliem, and minus some names to which I objected because, several
of the names were totally misleading. I may have sent those out, too,
with a notation on them that I opposed these, and I'm going to see if
they will forget about them.
Mr. Weitz. You have no knowledge of the division of the committees
between the three trusts ?
Mr. Harrison. No, and still do not. I suppose. I could go to the
Clerk of the House and figure it out, which one reported which, which
I have not done.
Mr. Weitz. Do you know, or were you ever told how that division
was ever made?
Mr. Harrison. No.
Mr. Weitz. Do you know whether it was made from Mr. Parr or
Mr. Nelson ?
Mr. Harrison. I have no idea.
Mr. Weitz. To your knowledge all of the committee names were sent
to representatives of AMPI ?
Mr. Harrison. You asked that question before. I will give the same
answer — "No" — as I did then. My recollection is that I sent the names
to the management of AMPI. I may also have sent them to the other
two managements, or I may have sent carbons to the other two.
Mr. Wettz. Do you have any further questions. Senator ?
Senator Montoya. No.
Mr. Weitz. I have no further questions.
Senator Montoya. That terminates the hearing.
[Whereupon, at 5 :55 p.m., the hearing in the above-entitled matter
adjourned.]
30-337 O - 74 - 28
6282
Harrison Exhibit No. 1
LAW 0«"1 ICFG
l\KJ.=:VJi.>S tN JiAiCKISON
EUITL BOO
IVOI PENNOVl VANIA AVCNUC. N. W.
WASHINGTON, D.C. SOOOS
TCLCPllONC: ?02 2oa-uo3o
TCCCX rt10S70 CH^K
CAnLL'TjCrvt-AW"
November 2, 1970
Mr. Harold S. Nelson
General Manager
Associated Milk Producers, Inc.
GPJ-; Building, 41.h Floor
Sau Antonio, Texas 78216
Re: TAPE - Contributions
Dear Harold:
The enclosed article appeared in the WASHINGTON
POST on Saturday, October 31. I am dictating this letter
Saturday afternoon so truthfully I can say nobody has
called rae to complain about the article. ilov/ever, I have
little doubt that sooner or later I will get corr.plaints .
Fortunately ir.ost political types . are out of tov;n and will
not see the October 31 issue of the POST.
You have not solicited my .opinion concerning
all the activities of T/APE but in the spirit of attoropting
to be of some value to AJiPI , let me offer some corrur.ents
wl\ich I hope v)ill be helpful.
1. Publicity in general is undesirable. If a nev.'s-
hound gets on Mr. Isham's back or on the back of somebody
else knov.'ledgeable, some publicity is unavoidable. Hcvever,
the less said, the better. A statercent like the last one
in the ajrticle - the very last paragraph - is realistic to
the sophisticated but does not loo); good in print.
2. T)ie conLributions to the U/o incu'.'.'.bents mentioned
in the penultimate pariigrapli strike me as unv.ise because I
believe the general practice of hedging a bet is unv;ise.
Vta-yhe one reason 1 alv/ays louse up on the s^tock market is
bccaurio- I do not understand the basic principle that there
are tv,'o v/ays to sell and ma);e a profit - cither long or
short, depending upon v;hether tb.e market is going up or
down. Never Lhelefis ,■ in politics, I tliink the safer thing
to do is detcrinino in one particular race which of the tv.'o
6283
Mr. Harold S. Nelson - 2 - November 2, 1970
candidates for various reasons is the. preferred and then
contribute only to that one candidate. It may be that the
wiser decision will be to contribute to the candidate more
likely to loE^e hut at any rate to contribute to both just
undermines the value of both contributions if the fact of
hedging gets known to the wrong people. In particular, I
am afraid the contribution on one side of the fence in
Indiana will cause some trouble even if that gentleman is
reelected. There are some considerations v/ith regard to
that which we can discuss some time when v/e are together.
3. The biggest problem of all I see stemming from
this article is disclosure of the fact - v/liich I certainly
did not knov; - that there v/as a sizable contribution to
Page's opponent. No single person vjas of more help to us
concerning certain events last March than Page. It is pos-
sible that the decision that was made would have been made
without his help. We never can knov;. Hov/cver, he was a
great help and never once when I asked him to do something
\/ in connection v/ith that matter did he fail to do it. He
also spoke on one occasion directly and personally to the
President. I really don't think that conversation was V7hat
effected the final outcome but it was marvelous offensive
running for us. Page is getting old and he might just be
very upset if ever he learns about a hedging contribution.
4. It seems to m.e a contribution to a candidate v/ho
is unopposed inherently is rislcy. Anybody who knows any-
thing about tho practicalities of politics knov.-s that an
incumbent must get out newsletters and otherv;ise spend
money for v/hich there is no fedei^al appropriation. Every
time my own Congressman sends out a nev.'sletter - and he
has to send out tv/o or three each year - it costs him in
excess of $3,000.00. Unfortunately he always is very
vigorously opposed. Even if he weren't, he v:ould need to
send out the nevrslcttcrs and v;ould need soise contributions.
Uov/evcr, it is hard as the devil to explain to people un-
sophisticated in matters political why it is that a fellow
who is unopposed needs a campaign contribution. Conse-
quently, it would bo my strong recoiTjnendation that TAPii
t/ and our other liJce organizations contribute, only tqjcr^r;^^
dates v.'ho are opposed and let sov.rces -..'hich can _cbntr_ibu-;:v:
in cash and without the risk of publicity do the contributing
to those candidates v/ho are unopposed. , , -
We all are going to be meeting liere on Novcir.bcr 19,
if not sooner.- May I suggest at that time, or sooner, we get
together and discuss this whole subject of who gets v.'hat con-
6284
Hr. lUirold G. Nelson - 3 - November 2, 1970
tribution. Pat and I probably should knov/ who has gotten
v;hnt in case somebody jumps us. We also v;ant to );no"v/
v/hat our strategy will be if Page jumps \is. V7e must remem-
ber, allov/ing for some difference in ago, he has been a
very good friend of mine and of Pat's for 19 ye<irs . During
all tliOGc years, I have never asked him to do anything for
me or. for a client, until Pat and I were retained by PJ-lPI .
Since then, to the limit of his ability, he has done what
I have asked.
There is much more we could discuss on this
general subject but it v/ould not be the best to try to do
it by correspondence.
SxncereT^/, // ,
MAUIOiSr'in5w7"N HARRISON
cc: Mr. David L. Parr
Enclosure
i«;H : e>;
CRMCSTCCNC MCCVCS
nOBCHT r. ftACLC
MTKON kOkTCA
6285
Harrison Exhibit No. 2
. LAW OFFICCS
Reeves Sc Harhison
SUITE SOO
t70l PENNSYLVANIA AVENUE. N. W.
WASHINGTON, D. C. 20006
TCLCPMONC 202 296-9030
TCLCx '•Aoare cook
CABLE "beEVLAW"
December 16, 1970
The Honorable Richard Nixon
The White House
Washington, D. C.
Re: §22 Tariff Commission (Milk) Recommendations
■- Presidential Proclamation
Dear Mr. President:
This letter discusses a matter of some delicacy
and of significant political impact.
Since January 1 my Washington partner Marion
Harrison (one of your 1968 Virginia Co-Chairmen) and I have \
represented Associated Milk Producers, Inc. ("AMPI"). At
the White House in September you privately met AMPI ' s two
key leaders, Harold Nelson and Dave Parr. You spoke by tele-
phone from the beach at San Clemente to Secretary Hardin and
to Harold Nelson during AMPI's annual convention in Chicago
Labor Day weekend. You told Harold of your intent person-
ally to address AMPI's next annual convention (a gathering
of almost 30,000 dairy farmers and their families);
• ' AMPI has followed our advice explicitly and will .
do so in the future. AMPI contributed about $135,000.00 to
Republican candidates in the 1970 election. We are now work-
ing with Tom Evans and Herb Kalmbach in setting up appropri-
ate channels for AMPI to contribute $2 million for your re-
election. AMPI also is funding a special project.
On September 21 the Tariff Commission recommended
to you, after it did a study you requested in May, four spe-
cific quotas for four specific dairy products. These recom-
• ' mendations are well documented and by now are well known in
the dairy and related industries. No Presidential Proclama-
;^ tion has been issued.
j The problem is this. The dairy industry cannot '
; understand why these recommendations were not implemented '
6286
- 2
very quickly. The longest the Democrats ever took to im-
plement a Tariff Commission dairy recommendation was 16
days. On one occasion, President Johnson even imposed
quotas before he received the Tariff Commission's recom-
mendations I
The overall parity ratio is at its lowest since
December 1933. Farmers generally are unhappy with the
economy. You know our farmbelt losses in the election.
The Government saves money (by saving price sup-
port payments) and the farmer makes money when the recom-
mended quotas are imposed. The products are all "evasion"
products - that is, products which historically were not
imported but which started to be imported only after quotas
were imposed on other products.
The dairy and related industries have great faith
in your personal leadership. At the same time, they are
shaken by the economy. The right kind of Proclamation is-
sued quickly would dramatize your personal interest in a
large segment of agriculture.
This problem is bogged down within the White
House. It is a victim of the bureaucracy - the Trade Bill
people, the National Security Council people, the domestic
people. It has been studied and restudied. It is not
moving .
VJe write you both as advocates and as supporters.
The time is ripe politically and economically to impose the
recommended quotas. Secretary Hardin, the Tariff Corro^ission
and the dairy industry all support this. All that is neces-
sary is a simple Proclamation implementing the four specific
Tariff Commission recommendations.
(We attach a more detailed Memorandum, The sub-
ject is quite interesting if yau have time for it.)
iK J. HILLINGS
PJHrek
Enclosure
6287
Harrison Exhibit No. 3
sun Li 5CO ', ,
/ ■ ' >.
\VA?;Hif.'e-! ON. D c. ■•icoos 'oTtcv.-.x,
ll.lL-r'i o-r ?o:? i.OS-C'OSO Patrick j w,_^,K
TEi> ^ •-.■rr^.j CRDK
C«.BLF'F.ECVLAW
June 16, 1971
Harold S. Nelson, Esq.
GeriGral Managcsr
Aosociated t;ilk Producers, Inc.
GPK Builaing, Fourth Floor
San Antonio, Texas 78216
Re : Contributiont?
Dear Harold:
VJe enclose a list sho'ving 25 co^Timittees, each
with a chairiV.an and a treasurer. As to each, the ad-
dress of the ccrrnittee is the address of the chairrr.an.
Twenty-t?iree of the 25 committees are from the
lift I already gave you. In scquonce, beginnin-j" with un-
m.irribered pEice one, the oo;!!r.;ittee& as tJiey correspond to
that list are t'^lS, 17, 13, 21, 22, 24, 25, 27, 30, 31,
32, 33, the Citizens for More Effective Co."nnanity Involve-
ment (not on the list) , AiTvericans l!G:dicated to fupport
Denocracy (also not on the list), 1, 2, 5, 8, 9, 10, 11,
12, 13, 14 and 16.
Let's not '-iait for the other 75 names. If Bob
Isham or sor.ebody v7ou3.d bring me these checks, each pay-
able to the n3r.;e5 com.iittec in the surc of $2,500.00 show-
ing for your records rhc- address (but not the name) of
the chairnan as the address for the criramitteo, and siiovJ-
ing nothing abcut the treasurer or the bank, I would de-
liver them ar.d we would be started on our project.
The fact all tliis took so long and "is yet in-
corr.plete frustrates me, btliove rr.e, even more than it
frustrates you. Sometimes it is difficult to honor a
cor^ir.itir.ent!
.^lEH ; ek
'^n
6288
^y v/
Americans Dedicated to P- ' ' -r Public Ad-tiinistrati
, Chairman: Kobort ' c '
1000 C(- :ticut Avenue, N.W.
Washinj' >, D.C.
Treasurer: Vera I don
Union Trust Building
15th and H Streets, N.W.
Washington, D.C.
Association of An'.oricajr^ for Good Governroent; <^ 1 ^
Chairman: Leonard J. Bonner ' ' '
1420 Now York Avenue
Washington, D.C. 20005
Treasurer: Rosemary Hutchinson
Union Trust Building
15 th and n Streets, N.W.-
Washington, D.C.
^yy
^/./
League for Concerted Action:
Chciiraian: Maurice S. Williams
2104 Orchcirii Place
Landover, ."'.oi-'yland 20795
Treasurer: J. D. BoworKock
Union Trust Zvuilding
15th and H Streets, N.W.
Washington, D.C.
League of Dedicated Voters:
Ciialrmanj Mrs. Inga Vi.rr
2148 Georgian Woods Place
Silver Spring, Maryland
Treasurer: Kenneth A. Williams
Union Trust Building
Washington, D.C.
Association of Political Volunteers:
ChairiTian: Harold Smith ^ 'Z ;')'
1420 New York Avenue
Washington, D.C. 20005
Treasurers August Zinsser • .
Union Trust Building
15ih and K Streets, NW
Washington, D.C.
6289
0roaniz3tion of Con.i-.iuni ty Voluntoors; ^ '^ ,''
Chairman: Mrs. Freoric Tower
8033 lierb Karm Drive
Bcthesda, Maryland 20030
Treasurer: Paul M, Garden
Union Trust Dviilding
15th and H Streets, NW
Washington, D,C.
fenericems Dedicated to Greater Public Awareness t ^^
Chairman: John M. Quick
10134 Little Pond Drive
Gaithersburg, Maryland 20760
Treasurer: Wilbur Biggs
Union Trust Building
15th and H Streets, NW
Washington, D.C.
¥9/
Anericans United for Better Federal Administration;
Chaircians Mrs. John M. Quick
10134 Little Pond Drive
Gaithersburg, Maryland 20760
Treasurer: Richard Barrett
Union Trust Building
15th and H Streets, N.W.
Washington, D.C.
Association for Sensible Disaraament:
Chairman: Katheryn Beck
6609 Hillendale. Road
Chevy Chase, Maryland 20015
Treasurer: James Shank
Union Trust Building
15th and H Streots, NW ■
VJashington, D.C.
Organization of Moderate Americans; p "' j' .{)
Chairmein: Mr. John Packard
1840 14th Street, N.W.
Washington, D.C.
Treasurer: Stephen D. Kozna
Union Trust Building
15th and H Streets, NW
Washington, D.C.
V
6290
/Vncricar.s Oro.-.nizod for Politicjl Stability; ^- - y
Chairman: W. Carter Uqwlcs "^
10100 Dcntcross Drive
Potomac, Marylajid 20854
Treasurer: Gordon Silcox
Union Trust Building
15th and H Streets, NW
Washington, D.C.
Association of Neighborhcod Volunteers:
Chairman: Mas ton K. Jacks
1451 Aldenham Lane
Keston, Virginia 22070
Treasurer: Jackson Ritchie
Union Trust Building
15th and H Streets, KW
Weishington, D.C.
Citizens for Kore Effective ConMnunity Involveir.ent;
Chairman: John L. Kilcullen
1250 Connecticut Avenue, NW
Washington, D.C.
Treasurer: J. G. Addison
Union Trust Building
15tli and H Streets, NW
Washington, D.C.
Americans Dedicated to Support of Democracy;
Chairman: Jerome Powell
1250 Connecticut Avenue
Washington, D.C.
Treasurer: Susan Kuiin
Union Trust Building
15th and H Streets, NW
Washington, D.C,
6291
Organir-ntion of Dodicilod
Chair.v.an: David L.
■1 cans :
l'',20 New Avenue
Washingtc- .C.
Treasurer; Harriet Ami i'als
Union Trur,t building
15th and II Streets, NW
Washington, D.C.
League of Involved Citizens:
Chalman: Jordan S. Hinolfarb
1420 New York Avenue
Washington, D.C.
Treasurer: Clifford C.Caslow
Union Trust Building
15th and ii Streets, NW
Washington, D.C.
Corcnittee for a Better Nation:
Chairman: Sarripson P. Holland
1809 Varni.;n Street, N.W.
Washington, D.C.
Treasurer: Brainard H. V7arner III
Union Trust l:;uilding
15th and li Streets, NW
VJashington, D.C.
Citizens for Sound Policies at Hox.e and Abroad;
Cnaircian:- iiarold Loure
Woodward Building
Washington, D.C.
Treasurer: Decay T. Ritchie
Union Trust Building
15th and H Streets, NW
Washington, D.C.
Americans United for Sensible Agricultural Policy;
Chaimans Calvin D. Johnson
2121 Wisconsin Avenue, KW
• Washington, D.C. 20007
Treasurer; ."-lildred J. Warner
Union Trust Building
15t.h and H Streets, NVI
Washington, D.C.
I
6292
Citizens for a Better K:v.-- ronmcnt; '~" / n
Chairsian: Edward , . .'cggans "^
2504 Sou. Dakota Avenue, N.E.
Washing!.. ,, D.C.
Treasurer J James M. Siaynes, Jr.
Union Trust Building
15th and H Streets, N.W.
Washington, D.C.
flr:>ericans for Sound Ecological Policy; ^ / J
CicLLrman: Walter C. Barber
1000 Connecticut Avenue, N.W.
Washington, D.C.
Treasurer: Thomas L. Anglin
Union Trust Building
15th and H Streets, N.W.
Washington, D.C.
Committee for Better Governinent:
Chainnan: Peter R. Taylor
108 Mimosa Lone
Silver Spring, Maryland 20904
Treasurer: James M. Johnston, III
Union Trust iiuilding
, 15th and li Streets, N.W.
Washington, D.C.
Association of Political Activists;
Chairman: Cnarles G. liotsford
1730 M Street, N.W.
Washington, D.C. 20036
Treasurer: Irma M. Orpin
Union Trust Building
15th and H Streets, N.W.
Washington, D.C.
Americans Dedicated to Peace :
Chairman: Rose M. Botsford
1730 M Street, N.W.
Washington, D.C. '
Treasurer: Julian Gillespie
Union Trust Building
15th and H Streets, N.W.
' Washington, D.C.
Americans United for Better Leodcr- ■ :
Chairman: Ozra Y. Fcggons
128 Kennedy Strc. N.W,
Washington, D.C. ...Oil
Treasurer: John w. Maxwell
Union Trust Building
15th and H Streets, N.W.
Washington, D.C.
o
•rv.y'
TUESDAY, DECEMBER 11, 1973
U.S. Senate,
Select Committee on
Presidential Campaign Achtvities,
Washington^ D.O.
The Select Committee met, pursuant to notice, at 1 :30 p.m., in room
G-334, Dirksen Senate Office Building.
Present : Senator Joseph M. Montoya.
Also present: Alan Weitz, assistant majority counsel; Bob Costa,
investigatoi.
Senator Montoya. I will swear you in.
Will you state your full name for the record, first?
Mr. TowNSEND. Tom Townsend.
Senator Montoya. Raise your right hand.
Do you solemnly swear that the testimony you are about to give will
be the truth, the whole truth, and nothing but the truth, so help
you God ?
Mr. Townsend, I do.
Mr. Weitz. OK, we will proceed.
Senator Montoya. OK, good luck.
TESTIMONY OP TOM TOWNSEND, ACCOMPANIED BY
M. RANDALL VANET, COUNSEL
Mr. Vanet. Prior to any interrogation, I want to make for the
record, a formal request or demand that this be a public hearing pur-
suant to title 2, section 190a-l (b) of the United States Code, and I
understand it is not going to be and he is going to be testifying irre-
spective of whether it is public or nonpublic. I want to make for the
record, a formal demand that it be public.
Also for the record, so I don't forget, I want to make a formal
demand pursuant to rules of the Senate Select Committee on Presi-
dential Campaign Activities, under which this interrogation is con-
ducted, that the witness be provided a transcript of his testimony today
prior to any divulgence of it formally on the record, to give him an
opportunity to read it and see if there are in fact any errors to be
corrected, and he will promptly read it, make corrections, if any are
necessary, and return it with his approval.
Mr. Weitz. Counsel, let me just say I appreciate those requests. With
regard to the first request, that has been made a number of times be-
fore and it is being tested in litigation, though I think the outcome is
fairly certain. For the record, it should be noted that the exceptions,
Senators have ruled a number of times with regard to exceptions in
the statute which you cited. Both for matters which may be deemed
by the committee to be confidential and which maj^ reflect adversely on
either the witness or some third party, for both of those reasons the
committee has decided in every case either informal or executive ses-
(6293)
6294
sion, their testimony will be taken prior to decision whether someone
will be asked to testify in public, and that will be followed here, al-
though, of course, your objection should be noted for the record.
With regard to your second request, the rules provide, before any
executive session testimony is put on the record, the wntness is given an
opportunity to review his testimony.
Mr. Vanet. I would like to ask you. since you raised the reasons, why
it is not a public session ; obviously, that decision has been made prior
to his interrogation ; and what are the third persons or parties who are
endangered by his testimony ?
Mr. Weitz. I think it will come out; it may vary from witness to wit-
ness. In general, when we're investigating possible criminal activities
on the part of corporations or various individuals or entities, even the
nature of the questioning may raise an implication or a possibility of
impropriety on the part of some third person, and while in this case
it is not yet known until the witness testifies as to who exactly may be
subject to it, I think this very same investigation in the areas covered
has been ruled on because of the sensitive nature and the implications
they do cast on both Associated Milk Producers and current and past
employees.
Mr. Vanet. Is that a full explanation ?
Mr. Wettz. I am not a member of the committee, but the reasons that
have been stated with regard to this as well as other executive sessions
is that- — that is consistent with the statute that there is a possibility in
this typ<^ of sensitive area where criminal activities have either been
shown or indicated, that such matters may come up in any executive
session that may tend to indicate criminal activity on the part of third
persons, that is really the problem, and we have a fairly ample record
of such activities, at least so far on the part of some persons or entities,
and in order to protect them and others Avho may be involved, how-
ever tangentially, in those matters, we're trying to keep the investiga-
tion in executive session until such time as we decide who and under
what proper circumstances it should be made public.
Now, if we may proceed, we should have done this at the outset, will
counsel identify himself, counsel for the witness?
Mr. Vanet. M. Randall Vanet, Kansas City, Mo., attorney for Mr.
Townsend.
Mr. Weitz. And Mr. Townsend, for the record, will you state your
full address and telephone?
Mr. Tow^^sEND. 2135 South Rosebrier Place, Springfield, Mo. 65804.
Telephone number is 417-888-9141.
Mr. Weitz. Mr. Townsend, I take it you are appearing today pur-
suant to a subpena served on you by the committee ?
Mr. Townsend. Yes, sir.
Mr. Weitz. And in response to that subpoena have you anv docu-
ments in your possession that you wish to produce at this time?
Mr. Townsend. Yes, I do.
Mr. Weitz. Off the record for a nnoment.
fDiscussion off the record.]
Mr. Weitz. Back on the record.
The witness lias produced the following category of documents
which we will not formally mark at this point but only desci'ibe for
the record and then as documents which are relevant, come up, we can
mark them for the record.
6295
No. 1 is his calendars for the years 1970, 1971, and 1972.
The second category is several documents indicating minor expendi-
tures and other financial transactions between Mr. Townsend and
AMPI plus a sheet indicating his employee contributions to ADEPT
for the year 1972.
No. 3 is a large group of technical documents relating to import
quotas and milk price supports for the years 1969, or perhaps even
earlier, through 1972.
Mr. Townsend. I think it is 1967 through 1973. That is everything
I had in my file.
Mr. Weitz. All right, and finally a document entitled "The Goals
of Organized Milk Producers," a statement by the Associated Dairy-
men, dated May 1969.
Mr. To^Tisend, could you tell us what your employment has be^n
since 1967, and I am speaking in terms of MPI and then AMPI?
Mr. Townsend. In MPI, which started in the fall of 1967, I was
assistant division manager of the Kansas division of MPI. Up until
about the beginning of 1970, 1 guess, and for a period starting in about
1970, 1 started as assistant regional manager of the southern region of
AMPI. Then from that period until Febniary of 1972, approximately,
I was special assistant to the general manager of AMPI.
Mr. Weitz. Mr. Nelson.
Mr. Townsend. Mr. Nelson.
Mr. Wettz. And in that position you were located in San Antonio,
Tex.?
Mr. Townsend. In that position I was located in Little Rock, Ark.
Mr. Weitz. Although your title was special assistant to the general
manager, did you, as a practical matter, report or work primarily with
Mr. Parr?
Mr. Townsend. Primarily with Mr. Parr,
Mr. Weitz. All right.
Mr. Townsend. Some things I would do specifically for Mr. Nelson,
but primarily for Mr. Parr.
Mr. Weitz. And in 1972, did you leave the employ of AMPI ?
Mr. Townsend. Yes, I did.
Mr. Weitz. And did you then take on your current employment ?
Mr. Townsend. No, for a period of 2 months I was a consultant on
my own and I believe I was hired by Mid-America Dairymen, I believe
it was April 17, 1972.
Mr. Weitz. And that is your current employment?
Mr. Townsend. That is my current employment. I am currently the
director of special projects.
Mr. Weitz. I see. Wliat type of responsibilities did you have, let's
say, for AMPI?
Mr. Townsend. Well, generally I functioned as an agricultural
economist, probably the single largest responsibility I had was in the
area of national milk production, national sales, imports and exports.
Generall}' I felt that I was in charge of the dcA-elopment of price sup-
port papers that were used in Washington with the Department of
Agriculture and congressional people, the same would be true with
imports and exports also. Then I also did some organizational work for
AMPI and MPI. I worked with the base plan quite a bit. I worked
with establishing price relationships between various markets in the
MPI area but that is clear back in 1960.
6296
Mr. Weitz. We ought to limit ourselves to about 1967 and thereafter,
the area particularly relevant to 1969 and forward.
"V\nio did you work with in developing these economic data and these
agricultural papers ?
Mr. TowNSEND. Within the organization I worked with Lynn
Elrod. Joe Mnrphy, let's see
3Ir. Weitz. Did you work with Mr. KiefFer Howard ?
Mr. TowNSEND. Not very much in tenns of these papers, no. We had
a group that we called the Dairy Marketing Advisory Committee
which is a group of professors from land grant colleges and institu-
tions, we used them to a considerable degreo m the development of those
price support papers. They were — some of them were Dr. J. Robert
Strain of ToAva State T^niversity. Dr. U. Cook of the University of
Wisconsin, Dr. Steve "Whittcd of the University of Missouri, Dr. Paul
Kelly, Kansas State University.
Mr. Weitz. Were there any people in the other co-ops that you
particularly worked closely with in developing common papers or
papers for Associated Dairymen?
Mr. Town-send. Yes, I might mention Dr. Leo Blakely of the
Oklahoma State University. Dr. Emerson Bab of Purdue TTniversity,
and sometimes Dr. W. H. Alexander of Tx^uisiana State University.
In addition to that we worked with some people of Mid- America
Dairymen, primarily Gary Hanman.
Mr. Weitz. Hanman ?
Mr. TowNSEND. Yes, Hanman.
Dr. Louie Spurgion, Sam McCroskey, Walt Wosje and sometimes
Lyn Stahlbaum. also helping in the development of these papers at
least for two of these years was W. DeVier Pearson. I think that is
most of the people that worked on it.
Mr. Wettz. I would like to turn your attention to the questions of
import quotas in late 1970. 1 take it from the documents you produced
for us, you worked on that matter.
Mr. TowNSEND. Yes, I did.
Mr. Weitz. You prepared certain papers and so forth. Did you have
anything to do with the preparation of this memorandum which ul-
timately was typed which 3^ou produced for us, addressed to the
Special Counsel of the President, dated October 16. 1970. from Marion
Harrison. Is this either your work or based on data, which you would
have prepared ?
Mr. TowNSENo. T didn't write this. Mr. Harrison, I would assume,
wrote it. It is based on information that I provided to Mr. Harrison.
Mr. Weitz. Did you work with Harrison on that?
Mr. TowNSEATD. Yes, I did.
Mr. Weitz. Did you work with anyone else in his law office?
Mr. TowNSENn. Not that I can recall.
Mr. Wettz. All right. Now, let's mark this, as I have identified it,
as exhibit 1.
[The document referred to was marked as Townsend exhibit No. 1,
for identification.*")
Mr. Wettz. In the upper left-hand corner, it savs to: Galbraith,
Chotiner, Colson, Do you know who Mr. Galbraith is?
♦See p. 6328.
6297
Mr. TowNSEND. Yps : T belipve he ^-^as Deputy T'^nder Secretary, U.S.
Department of A nrvirnltiiT-e at that time.
Mr. WwTZ. Aiirl Mr. Chotiner. what was his r>osition nt that tim«»^
Mr. TowNSENo. I believe he was special counsel to the
President.
Mr. Wettz. And Mr. Colson ?
Mr. TowNSENo. He wps on the Wliite Plouse staff. T do not know
what his position was at the time.
Mr. Weitz. Do yon know if each of the orentlemen received copies
of this memorandnm, exhibit Xo. 1 ?
Mr. TowNSENn. ATo.
Mr, Wettz. Dirl von ever henr whether Mv. Ha'T'son or nn^'one else
discussed talkinjT to i-hese p^entlemen nb'^nt t^^e imnort question ?
Mr, TowisrsENo. T pm not sure that I can sav that, you know, that he
did talk to them. Tt is ny impression that tlie people that are listed
there did receive it.
Mr. Wettz. Did T ronpi vp nopies o* the memo ^
Mr. Tov/NSENn. T iust don't — T can't ronT^mber nnv sneciflc comment
from Mr. Harrison savins- that thev did in fact receive them.
Mr. Wettz. A^] ri.o-ht. ^ow. T will mark ps ex^^ibit Xo. 2 and show
you a memorandum for iddtificntion from Tom Townsend to Harold
Nelson, to Dave Pnrr, dnted October 19, 1970.
Mr. TowNSEisrn. AVas this your copy ?
Mr. Wettz. No. it is Tiot,
[The document referred to was marked Townsend exhibit No. 2 for
identification.*]
Mr. Wettz. Is this a memorandum, from you ?
Mr. Townsend. Yes : it is.
Mr. Wettz. Have vou seen it before ?
Mr, Townsend. Yes : T have,
Mr. Wettz. Now, the first narn^ranh says: "Attached are the memo
and workinsT papers wliich are cun-enth" b^infr circulated to Mr.
Galbraith, Deputy Assistant Secrotnrv. T^SDA, ]\fr. Thotiner. Mr,
Colson and two n«sistants to Mr, Colson, IMr. Geor^-e Bell and Mr.
Henry Cashen." Then "'^oit jto on to describe a visit that you had with
Mr. Harrison and Mr. Galbraith.
Does that refresh your recollection as to either this memorandum or
other similar documents beinc: circulated to Mr. Chotiner on the im-
port, quota question?
You say that was vour imr>ression. did vou in fact know or Avas it
represented to you that that or similar dcx'uments wei-e beinof ^iven
to Mr. Chotiner?
Mr. Townsend. T sruess T believe that they were because — I just
don't have any absolute proof.
Mr. Wettz. T understand that.
Mr. Townsend. To tlip best of my knowledge,
Mr, Wettz, You didn't ffive them the documents?
Mr. Townsend. No.
Mr. Wettz. Tt was your understand inij that thev wore to receive the
documents?
Mr. Townsend. That is right.
♦Seep. 6331.
30-337 O - 74 - 29
6298
Mr. Weitz. Who told you, who would have ^ven the documents to
him, who would have been going to the Wliite House, was it Mr.
Harrison who was in touch with these people ?
Mr. TowNSEND. It would have been through Mr. Harrison.
Mr. Weitz. All right. Did you ever discuss with Mr. Harrison the
position or the role being played by any of these gentlemen, let's say,
Mr. Colson?
Mr. Vanet. You laiow, I hope to be very unintrusive in this hearing,
this is such a general question, if you are relating it to specifically the
import quota question and this particular line of questioning, the ques-
tion is just so general I am not sure what you are really asking.
Mr. Weitz. All right. Let me se^ if I can rephrase it.
With regard to the import quota question and in connection with
distributing these and similar documents to Mr. Colson and Mr. Choti-
ner, was it explained to jou for what purpose they were to receive
these documents, whether they were advising the President or assist-
ing Mr. Harrison or the dairy industry in their effort to obtain a
change in import quotas or do you know what they were being asked
to do and for what purpose they were receiving these documents ?
Mr. Townsend. The dairy industry, the purpose of the document as
far as I was concerned was to try to get something moving in terms
of the whole area of dairy imparts. The dairy imports are extremelj^
vital to the price that dairy farmers received and I was working for
dairy farmers and essentially every billion pounds of milk equivalent
that came into this country in terms of dairy imports had a very neg-
ative effect on the price that dairy farmers received. And gosh, I was
sure hopeful that contacting Mr. Harrison and Mr. Harrison's con-
tacting the other people would result in stopping the evasion, just flat
evasion of the import laws of this country. It seemed to me that it
kind of relates to a story that, and I want to mention this guy's name,
he was one of the professors I worked closely with, Dr. Calvin Berry,
University of Arkansas, the whole question of dairy imports I think
was fairly broad, that the Johnson administration and the Nixon ad-
ministration had both expressed a desire to have dairy imports around
1 billion pounds milk equivalent and anything other than that was,
as far as I was concerned, a violation of those policies.
Mr. Weitz. Wliat role, to repeat my question, what function or for
what purpose were you approaching or was Mr. Harrison approaching
Mr. Chotiner and Mr. Colson ?
Mr. TowNSEND. I was hopeful it would be to aret something moving.
One of the — ^^aS I recall, one of the problems that we had in this ad-
ministration was that who in the world should we contact in terms
of the White House if there was something that needed to be moved
in relation to agriculture?
Mr. Weitz. And who was that ?
Mr. Townsend. I don't recall.
Mr. Weitz. Who was it to vour understanding, who were those per-
sons, or persons in the White House?
Mr. Townsend. That was the problem, to my knowledo-e there was
no one assigned specifically to agricultural matters within the White
House. It was a real problem as far as T was concerned; toward the
end of the Johnson daministration. W. DeVier Pearson was the man
that seemingly dealt with agricultural matters in the White House.
6299
I just don't, think there was anyone assigned specifically to agricultural
problems in the White House.
During this period of time there may be someone now that I don't
know about, but we wanted to get something moving. Dr. Berry re-
lated a story on dairy imports, I think it is entirely appropriate. He
said you have the rules and regulations and you are not supposed to
bring into this country any more than that and then they change the
composition of the product and bring it in in evasion of existing quotas
established and then you have a Tariff Commission hearing, they
then take into account and the only way they issue new licenses for im-
ports is to take the historical level of imports by various countries
and so they bring in a product which is not under the Tariff Com-
mission schedules as being under a quota, as an evasion of that quota,
and then they turn riglit around and allocate a new quota for this
evasion product based on the amount the importers brought into this
country. It is very similar and very frustrating. It was just like I
came over to your house and stole 30 chickens every night for a month.
Then at the end of 30 days you caught me. As a result of your catch-
ing me, what we would agree to is that I would only be able to steal
10 chickens a night from then on. That is essentially the way that
our import quotas work.
Mr. Weitz. Ultimately what was — was action taken on the Tariff
Commission recommendations ?
Mr. TowNSEND. Yes.
Mr. Wettz. Did it meet the requests made by AMPI and the other
dairy farmers ?
Mr. TowNSEND. No, it was far in excess of what we wanted. As I
recall it was far in excess of what the Tariff Commission had recom-
mended be established for these products. This particular one that we
were talking about here related to ice cream and animal feeds and I
believe low fat cheese and chocolate to the best of my recollection.
Also there was a study that had been done by the Ways and Means
Committee called a section 322, 1 believe it was.
Mr. Weitz. All right.
Mr. TovvNSEND. Section 332, excuse me, request to investigate over
47 cents cheese and lactose and I believe two of the other products
that were covered in the Tariff Commission investigation. I am not
sure whicli oiiCvS they were.
Mr. Weitz. Let's go o ff the record.
rDiscussion off the record.]
Mr. Weitz. Back on the record. Were you aware during the No-
vember-December period of 1970 of any discussions, meetin.«?s or
other communications that related to possible contributions to Presi-
dent Nixon's reelection effort, by TAPE and other dairy organiza-
tions ?
Mr. TowNSEND. You are talking — late December?
Mr. Wettz. Late December 1970. November-December 1970.
Mr. TowNSEND. I was aware that there was consideration being
given to making contribations to the campaign to reelect the Presi-
dent, yes.
Mr! Weitz. Beginning as earlv as December. November 1970 ?
Mr. To-wNSENo. November. December.
Mr. Weitz. 1970.
6300
First of all, do you know who in AMPI or associated with TAPE
were contemplating: such contributions ? A^Hio told you of this ?
Mr. TowNSEND. I think probably Dave Parr and Harold Nelson.
Mr. Weitz. Did they tell you of any specific meetings they had in
that connection or anyone in the administration or interested in fund-
raising for the President to whom they communicated that interest
or contemplation ?
Mr. TowNSEND. No, I can just tell you my knowledge of that was
that some time in the late fall of 1970, 1 was asked to remind Marion
Harrison that there was supposed to be some committees that were to
be supplied.
Mr. Weitz. In the fall of 1970 ?
Mr. TowNSEND. To the best of my recollection, it would have been
late fall, 1970.
Mr. Weitz. Now, would that be in connection with contributions to
the President's reelection?
Mr. TowNSEND. I assume it was ; yes, sir.
Mr. Weitz. "Who asked you to do that ?
Mr. Townsend. Gosh, I don't specifically remember, I believe it
would have been either Mr. Nelson or Mr. Parr.
Mr. Weitz. Did they ever discuss with you how many committees
they expected to have organized or what magnitude of contributions
they expected to make over a period of time to the President's
reelection ?
Mr. TowNSEisTD. No. sir ; not that I can recall.
Mr. Weitz. Did they ever characterize it in terms of substantial,
several hundred thousand, millions or anything of that nature?
Mr. TowNSEND. I had the general idea that it would be probably
more than 50 committees, some of which probably already existed,
some of which might have been new committees.
Mr. Weitz. Did you have any idea how much would be contributed
to each committee ?
Mr. TowNSEND. No, sir ; I did not.
Mr. Weitz. Did you know why there was a need for more than one
committee to accept contributions for the same candidate?
Mr. TowNSEND. My understanding was that the law then said, I
think in general, $5,000 was a maximum that could be provided to any
one committee I believe.
Mr. Weitz. In any one year or total ?
Mr. TowNSEND. Yes, I guess in any one year.
Mr. Weitz. So that would mean that in any one year for at least 50
committees, that w^ould be at $250,000 ?
Mr. TowNSEND. Yes.
Mr. Weitz. Perhaps.
Mr. TowNSEND. Yes, perhaps.
Mr. Weitz. In any one year. Did you tell this to Mr. Harrison ?
Mr. TowNSEND. Yes, I did. I told him, I said that we're supposed to
be getting a list of committees and my understanding was — from some-
one I heard the names of Kalmbach and Tom Evans. I don't know
either, I never met either one of those individuals, but I heard those
names and I can't remember whether that was in late 1970 or in 1971.
But during essentially that same time period.
Mr. Weitz. Did you know of Mr. Kalmbach, did you know who he
was at the time ?
6301
Mr. TowNSEND. No.
Mr. Weitz. Do you know who Mr. Evans was ?
Mr. TowNSEND. No, sir ; I still don't.
Mr. Weitz. Did Mr. Harrison tell you this or Mr. Nelson or Mr. Parr
mention these names 'i
Mr. TowNSEND. I honestly don't remember.
Mr. Weitz. Wliere did this conversation with Mr. Harrison take
place in which you told him you relayed this message concerning the
committees ?
Mr. TowNSEND. In his office.
Mr. Weitz. Did you meet with him in his office during that period ?
Mr. TowxsEND. Yes, I did.
Mr. Weitz. Would you say as frequently as once a month or once a
week?
Mr. Vanet. You are talking about specificalLy what period ?
Mr. Weitz. We're still in the period late fall, November-December
1970.
Mr. TowNSEND. I would say I was in his office every time I was in
Washington and whatever my calendar would show in terms of Wash-
ington, if he was in town 1 feel relatively confident I would have been
working with him.
Mr. Weitz. Wliat was his response, do you recall ?
Mr. TowNSEND. His response to what ?
Mr. Weitz. When you relayed that message, did he have any par-
ticular response that you recall ?
Mr. TowNSEND. Yes, we're working on it.
Mr. Weitz. Did he say who he was working on it with ?
Mr. TowNSEND. No, and I don't recall that I inquired.
Mr. Weitz. Did you pass that massage back to either Mr. Nelson or
Mr. Parr?
Mr. TowNSEND. Yes, I would say I probably passed that back to
probably both of them.
Mr. Weitz. Did it occur to you it was unusual that they were dis-
cussing setting up committees and making contributions to the Presi-
dent's reelection almost 2 years in advance of the election ?
Mr. TowNSEND. No, I didn't think that was ,
Mr. Weitz. Did anyone suggest it was in any way related tx3 any
pending matters that concerned the dairy industry that were pending
before the Government such as import quotas or anything of that
nature ?
Mr. TowNSEND. Oh, no ; I would say that most of the time that we're
talking about here, both previous to that time and since that time in-
cluding today, there are matters of vital importance to the income of
dairy farmers that are pending before the Government.
Mr. Weitz. Constantly.
Mr. Tov/NSEND. Oh, yes, ^r ; and I don't think that is in terms of the
committees, I guess I didn't look at that much differently than I
would congressional committees. I know that some of them set up some
committees with two or three names of different committees, both
Senators and Congressmen.
Mr. Weitz. Of course we're talking about — ^you said at least 50,
that was your impression.
6302
Mr. TowN-gE^TD. That, was my impression. There is only one Presi-
dent, of the United States and ^osh, there are 435 Congressmen and
100 Senators and so on. I -wouldn't — that didn't
Mr. Wettz. Do you know what happened with rejrard to the setting
up of tliese committees and making contributions between the time
you talked to Mr. Harrison and say March of 1971, during that
period, did you hear anything further from anyone about that matter?
Mr. To%vNREND. The best T can recall, I probably mentioned some-
thing about the committees, oh, maybe once every 6 weeks.
IMr, Weftz. To Mr. Harrison ?
Mr. TowNSEND. To Mr. Harrison.
IVIr. Weitz. Was that at the request of either Mr. Nelson or Mr.
Parr?
Mr. TowTsrsEND. Yes, T think that mv understandin5r was that every
once in a while I was supposed to ask him until he advised otherwise,
you know, that is the feelin.g that T had. T am not sure those words
were conveyed to me. But I don't believe that those — I don't believe
there Avas any committees submitted until gosh, the middle of the
summer or something.
Mr. WErrz. Of 1971 ?
Mr. Townsend. Of 1971.
]\Ir. Wkitz. None that you are aware of.
liv. TowxsEND. Not that I am aware of really. I am not sure I
am aware of if and when they really were. I was aware of some names
of some committees, T do not recall.
Mr. Wettz. We will get to that shortly. We keep using Mr. Parr and
Mr. Nelson interchangeably. Do you have any recollection of which
of the two ,<rentlemen or both from time to time made this request of
you or was it only one ?
Mr. TowxsEND. I am really not sure. It would have been most
logical that INIr. Parr would have mentioned it to me and T am not
sure that as I said that he mentioned it more than once. I thought
this kind of a continuing responsibility to mention the committees to
Mr. Harrison.
Mr. Wettz. You say probably Mr. Parr because you worked in
Little Rock and had more contact with him ?
Mr. TowxsEND. Yes, sir.
Mr. Wettz. Did vou have much contact with Mr. Nelson during
this period. 1970-71?
Mr. TowNREND. You said with Mr. Nelson ?
IMr. Wettz. Yes.
Mr. TowxRExn. Oh, it varied quite a bit. T nrobably attended half
of the AMPT board meetinj^s and T would sf><^ hiiri in there and jren-
erallv, when he was in Washington T wouM bft in Washing-ton and I
would see him there. Then occasionally I would see him in San
Antonio during this and I think probably other time periods there
were other occasions when Mr. Parr and I would fly to and from
WashiniQrton with Mr. Nelson.
ISIr. Wettz. On the company jet ?
Mr. TowNSEND. Yes.
Mr. Wettz. Now, in late 1970 they were talkinr about contribu-
tions to the President's reelection. From the period Januarv 20. 1969,
until this time in late 1970, did you know contemporaneously or
since that time of any previous transactions that involved the delivery
6303
of money to the President or some fund raiser on behalf of the
President ?
Mr. TowxsENTD. The only thincr I know is what I have read in the
newspapers in the last year I would say.
Mr. Wettz. And you have not discussed what you have read in
the newspapers wjth any of the people that may have been involved
at that time ? Mr. Nelson or Mr. Parr or anvone else?
Mr. TowxsBNP. I think I may have mentioned about the newspaper.
Mr. Weitz. But other than what you have read in the newspaper
you have no knowledge of that ?
Mr. TowA^SENi). No, sir ; absolutely not.
Mr. WErrz. Now, turning to the price support decision in question
and in :March of 1971, I notice here a paper that is entitled "Parity
Relationships are Down and Sliding Further," dated Febraary 11,
1971.
Mr. TowNSEND. It was drafted by Dr. Hugh Cook.
Mr. Weptz. Are you familiar with that document ? Have you seen
it before ?
Mr. TowxsEND. Yes ; I have seen it before.
Mr. Weitz. Does that document accord with the types of data that
you were collecting and preparing to make a presentation for the dairy
industrv for increase in milk price support?
Mr. TowxsEND. Yes, sir; that would be one of probably several
drafts that were drafted.
Mr. Weitz. T think we have others here.
Mr. TowxsEXD. Yes. sir.
Mr. Weftz. I just pinked this out among others. Now, this, I take it,
tries to bring together the relevant pieces of information that would
bear on the need for price support increases.
Mr. TowisrsEND. Yes, sir.
Mr. Weitz. And now. one of the items — one of the first items men-
tioned is the main expense items are up and out of proportion, that is
the title for a particular segment of this : is that correct ?
Mr. TowxsEND. Yes, sir.
Mr. Weitz. It begins on page 1 of the document. Now, turn to
pas'e 2, it lists a number of items and the first one mentioned I think
is feed
Mr. TowxsEND. Feed purchase.
Mr. Weitz. A.nd that indicates or tries to show a relationship in
terms of the increased cost of feed or is that just in terms of quantity?
Mr. TowNSEisrn. That is in dollar amounts.
Mr. Wfitz. That would show increased quantities that were pur-
chaspd ?
Mr. TowxsEND. No ; dollar amount.
Mr. Weitz. Dollar amount.
Mr. TowNSEND. Those are, as I look at the figures — I am just assum-
ing that Dr. Cook used USD A published information. It is commonly
known that they published data of two typical farms, one in central
New York and one in southwestern— I believe it is southwestern
Mr. Weitz. Southeastern.
Mr. TowT^SEVD. Southeastern Wisconsin, they keep kind of a typi-
cal record.
Mr. Weitz. Now, in a paragraph on page 2 it says with minor ex-
ception these cost items and I would say feed is one of them, livestoo!:
6304
expense, fertilizer, and so forth trended upward at 4 percent and it
goes on to say from the official figures that can be put together it ap-
pears that costs to dairymen were up on an average of at least 5 percent
in 1970 compared to 1969. Does that accord with statistics and infor-
mation that you are familiar with ?
Mr. TowNSEND, I think generally that 5 percent would be right.
Mr. Weitz. And is it your recollection that these types of informa-
tion with regard to increased costs including increased feed costs were
available and in fact used to make presentations on the part of the
industry before the first price decision in March of 1971, information
that was available and was utilized to make presentations to the De-
partment of Agriculture concerning — that reflected increased feed
costs and so forth?
Mr. TowNSEND. Yes, sir.
Mr, Weitz. That was one of the arguments that was used to have a
price increase ?
Mr. TowNSEND. Yes, sir, I think you will find that in the final draft
of the price support paper that we had for 1971.
Mr. Weitz. Let's mark that as exhibit 3 and that is entitled "Dairy
Industry and Public Interest : The Need for Price Support Increase,"
dated Februarj'^ 24, 1971, and signed "Associated Dairymen."
[The document re erred to was marked Townsend exhibit No. 3 for
identification.*]
Mr. Weitz. Did you have a hand in preparing this document ?
Mr. Townsend. Yes, I did.
Mr. Weitz. ^Vlio else was involved in this ?
Mr. Townsend. Dr. George Mehren.
Mr. Weitz. Any others at AMPI ?
Mr. Townsend. I don't believe anyone else at AMPI, DeVier Pear-
son— it was physically written — the final draft was physically written
in DeVier Pearson's office.
Mr. Weitz. I see.
Mr. Townsend. George Mehren was there, Dr. Lonnie Spurglon of
INIid- America Dairymen was there, I believe Sam Lacrosite of Mid-
America Dairymen was there and there may have been one or two
others there.
Mr. Weitz. And increased feed costs are reflected in this, apparently
starting on page 9, and it apparently has a good deal of data concern-
ing these increased costs including fee^ costs to the farmer as one of
the reasons advanced for a price support increase.
Mr. Townsend. Yes; the feed costs are approximately 50 percent
of the total cost of producing milk and the problem we had was that
dairy farmers were not making enough money. I think you can find all
kinds of Government statistics that show that they are doing a lot of
this. Dairy farmers were not even receiving the minimum wage. I think
that is outrageous.
Mr. Wettz. Despite that argument however, the Department of Agri-
culture did not raise the price support levels on March 12; is that
correct ?
Mr. Townsend, That is correct.
Mr. Weitz. Now, were you in Washington during that period of
time?
•See p. 6332
6305
Mr. TowisrsEND. Yes, I was.
Mr. Weitz. What was your principal activity, were you involved
in helping io prepare these economic papers and so forth ?
Mr. TowNSEND. Yes ; there wasn't very much in terms of economic
papers that would be presented. There was some, probably some minor
summaries that were prepared for individual Congressmen or Sena-
tors.
Mr. Weitz. And to brief farmers who were going to meet with vari-
ous people?
Mr. TowNSEND. Yes, sir, we had a lot of people that came into Wash-
ington for the next 2 weeks
Mr. Weitz. Can I just go over with you, I am sorry, go ahead. I
did not mean to cut you off.
Mr. TowNSEND [continuing]. Well, one of my jobs was to keep
track of who was seeing whom in terms of Senators and Congressmen.
As a matter of fact there is one exhibit here that I have submitted
that has a list of the Congressmen and Senators and has my markings
on it. This is my writing, these are my x's.
Mr. Weitz. Why don't we mark this as exhibit 4.
Mr. TowNSEND. I kent track of who was calling who.
Mr. Weitz. This exhibit 4 is the 92d Congress directory and it has
Mr. Townsend's markings on it.
[The document referred to was marked as Townsend exhibit No. 4
for identification.^]
Mr. Townsend. I helped to brief people that were coming in to call
on their congressional delegations.
Mr. Weitz. And in that connection why don't we also mark as ex-
hibit 5, this list of bills and their sponsors that you prepared at that
time.
Mr. Townsend. I did not prepare that at the time, that actually
was prepared about 2 months ago by another man in our office.
[The document referred to was marked as Townsend exhibit No. 5
for identifiration.^]
Mr. Weitz. This was not prepared contemporaneously.
Mr. Townsend. No, it was not.
Mr. Wettz. Who was it that prepared this, do you know ?
Mr. Townsend. I believe Glen Davis called on — shoot, either CQ.
or what is the other one up here, Congressional Quarterly.
Mr. Weitz. The Congressional Record ?
Mr. Townsend. One or the other, we subscribe to both.
Mr. Weitz. Is this to your understanding a correct list of bills and
sponsors ?
Mr. Townsend. My understanding?
Mr. Weitz. Bills and sponsors for increased price supports in March
of 1971.
Mr. Townsend. That is my understanding that it is, yes.
Mr. Weitz. Is it not true that all except two of the bills call for 90-
percent minimum, the others call for an 85-percent minimum, is that
correct ?
Mr. Townsend. That is what the list indicates.
Mr. Weitz, It appears that is what the list indicates.
1 Rpe p. RSR3.
' See p. 6.^69.
6306
Mr. TowNSEND. Yes.
Mr. Weitz. You said you were in Washington during that period.
I wonder if we could look at your calendar for the year 19Y1 and
determine, beginning on March — February 22, 1971, when you were
in Washington, Now, let's see if we could look at it, it appears for
example, February 22 to 26, you were in Washington, is that correct?
Mr. TowNSEND. Yes, sir ; I would say that it was correct.
Mr. WErrz. And let's look to March, can you tell me, in the first
week in March, if you were here?
Mr. TowNSEND. Monday through Friday.
Mr. Weitz. You left on the 5th, is that your understanding from
looking at your calendar ?
Mr. TowNSEND. Yes, sir.
Mr. Weitz. Is thi^ an expense report that you submitted at the
time to Associated Milk Producers ?
Mr. Townsend. They appear to be copies of the exhibits and reports
that I submitted, yes.
Mr. Weitz. Maybe we can look at those along with the calendar to
determine when you were in Washington. It appears that you were in
Washington on February 2 to 25, and you say you left on the 26th, is
that what your calendar shows, you might not show any expenses for
the 26th but that would be the date you were leaving ?
Mr. TowNSEND. Yes, sir.
Mr. Weitz. Let's turn to the report filed April 5 with AMPI, cov-
ering the period of March. Could you look at this and indicate whether
that substantiates your opinion that you were there to the 5th ? Now,
this only indicates expenses for the 3d, would that be consistent with
your calendar that you might have stayed to the 5th?
Mr. Townsend. Yes, I think I was here through the 5th.
Mr. Weitz. Do you recall this expense or voucher or bill I guess it
is — the itemization from the Madison Hotel with your signature on
it — it does not have a date but indicates charges for March 4 and
March 5?
Mr. Townsend. This is Mr. Bob Lilly's.
Mr. Weitz. Is that your signature ?
Mr. Townsend. That is my signature, that means I probably checked
Mr. Lilly out of the Madison Hotel.
Mr. Weitz. The last charge on the 5th, is that consistent in fact,
it notes from rooms 415, 17, 19, were there, in fact, three rooms in
addition to ]\Ir. Lilly's room which was 414, which were held together
by four AMPI people, Mr. Nelson, and others. Is that your
recollection?
Mr. TowNspND. It is quite possible, if that is a corner suite at the
Madison, it was quite often that we — Mr. Nelson had a corner suite
at the Madison Hotel.
Mr. Weitz. If Mr. Lilly checked out on the 5th, and you signed
out for him, essentially you had the bill paid for him or signed out
for him ?
Mr. Townsend. Yes, sir.
Mr. Weitz. That would be consistent with your calendar that you
were there on the 5th and signed out.
Mr. Townsend. Yes, sir. I think what this means to me, the best
I can recall, is that if I was there through the 5th I had written
nothing in here, that means I had no expenses.
6307
Mr. Weitz. It is interesting, on the 4th you show taxi 7 which I
assume to be $7 on your expense report, you don't show anything for
the 4th.
Mr. ToAVNSEND. Then I would say I overlooked it on my expense
card.
' Mr. Weitz. Is it too late ?
Mr. TowNSEND. I am afraid it is, I could never come out on expense
reports.
Mr. Wettz. Now, when would be the next time your calendar shows
you in Washinoton ?
Mr. TowNSEND. It would show I was in Washington the 8th
through the 12th and in New York it looks like.
Mr. Weitz. Is that consistent with your expenses for that period,
the 8th through the 12th? It looks like it — ^Washington, New York,
and Washington.
Mr. TowNSEND, Yes ; I was supposed to be home on the 10th.
Mr. Weitz. It was extended to the 12th ?
Mr. TowNSEND. Yes.
Mr. Weitz. When was the next time you were in Washington, it
looks like beginning on the 15th, is that right?
Mr. Townsend. Yes.
Mr. Weitz. Can you tell from these how long you stayed in
Washinerton ?
Mr. Townsend. It looks like I was there the 15th, 16th, and 17th.
Could I look at the expense report ?
Mr. Weitz. It looks like the expenses go through the 18th and
perhaps
Mr. Townsend. I would say I went home on the 18th.
Mr,. Weitz. On the 18th ?
Mr. Townsend. Yes.
Ml-. Wettz. How M'ould you have flown during this period of time,
would vou liave flown bv commercial jet or companj^ jet, do you recall ?
iSIr. Townsend. Well, it looks to me like I charged expenses for the
airlines on the week of the 8th. so I probably came in on — and also
thefii-st week, I can't answer that.
Mr. Weitz. OK. Now, let me show vou copies of express check
vouchers which we obtained from AMPI which indicated charges to
you — to your credit card — during this period. I wonder in looking
at these, D:ii"ticu1arly these American Airlines Jet Express, does that
indicate March 18, 781, there being a charge, is that consistent with
vour recollection that you returned home or flew somewhere on the
18th ?
Mr. Townsend. I can't read the top of the A'-oucher, it does say Little
Rock on the bottom so I would say that I did go horae on the 18th.
Mr. Weitz. It looks to me like Baltimore, does that refresh your
recollection?
Mr. Townsend. No ; not really, but it
Mr. Wettz. Baltimore to Little Rock, but you would have been
returning from somewhere to home on the 18th of March ?
Mr. Townsend. Yes, sir.
Mr. Weitz. And that is consistent with the voucher, and the
calendar?
Mr. Townsend. And the calendar, yes, sir.
6308
Mr. Weitz. On your calendar on the 18th, there is something that
says : "Exec. Board, DI-AMPI, 10 :30 a.m.," and then Clarksville is
scratched out and "Washington" is written in. Do you recall what that
represents ?
Mr. TowNSEND. I would say that there was — I am not sure whether
those are two separate deals or not. I would say that there was prob-
ably a DI board meeting scheduled for Clarksville, Ind. and I am
just really guessing, that that was changed to Washington and it also
says that AMPI had some kind of a
Mr. Weitz. Would it have been a joint meeting when it says
DI-AMPI?
Mr. Townsend. No ; I think it looks like to me like — my writing is
a little different — that I probably wrote this several weeks before, I
put down Clarksville-DI, meaning that there would be a meeting of
the Dairymen, Inc., in Clarksville.
Now, sometimes you just hear things and you doodle and that is
what I do on my calendars a little bit. Sometimes Mr. Parr would want
to know something or he would say that there is going to be a meeting
3 months from now that I want to go to and he says remind me, so I
write down that meeting. It is possible that there would have been a
meeting of the executive board of DI and AMPI in Washington at
that time. I really can't tell you.
Mr. Weitz. Now, during this period of late February and March, did
any of these times, when we — when you left Washington do you re-
call seeing or knowing of a brief encounter or meeting or conversation
in the airport in Washington between Bob Lilly and John Connally?
Mr. TowNSEND. Yes.
Mr. Weitz. Could you tell us first of all— do you recall when that
took place?
Mr. TowNSEND. No ; I don't remember when that meeting took place.
I am not sure that it was during that time period that you're talking
about.
Mr. Weitz. You are not sure that it would have been any of these
occasions when you left Washington ?
Mr. TowNSEND. No, sir ; I am not sure.
Mr. Weitz. Do you know what day of the week it was ?
Mr. TowNSEND. No, I sure wouldn't.
Mr. Weitz. Do you know where it took place ?
Mr. TowNSEND. Yes, I do.
Mr. Weitz. Where was that ?
Mr. TowNSBND. It took place in the lobby of Page Airways at
National Airport.
Mr. AVeitz. And it was not on the 10th of March, because your recol-
lection was refreshed by your records ; they do not indicate that you
were in Washington or leaving Washington on. the 19th of March ?
Mr. TowNSEND. I am certain that I was not there on the 19th of
March. See, I have another check here, these numbers here indicate the
number of nights that I was out from home.
Mr. Weitz. Yes.
Mr. TowNSEND. That was extremely critical to me at that time and
for a long period of time I kept track of every night that I was out.
Mr. WErrz. So for the week of the 15th, just three nights.
Mr. To^vNSEND. Tliree nights. I was out on Monday, Tuesday, and
Wednesday night.
6309
Mr. Weitz. And you flew home Thursday ?
Mr. TowNSEND. Flew home Thursday.
Mr. Wettz. And I see the week of March 1, it shows four nights, so
that could be the 1st, 2d, 3d, and 4th.
Mr. TowNSEND. Yes, sir.
Mr. Weitz. And as your records show.
Mr. TowNSEND. Yes, sir.
Ml. Weitz. Could you tell us what you know about that meeting
between Mr. Connally and ]\Ir. Lilly ?
Mr. Townsend. Sure. Mr. — I will even back up a little bit, because
this I do remember. !Mr. Nelson, Mr. Parr, Mr. Lilly, and I were rid-
ing in a taxi going to Page National. I can tell you the approximate
time, it was around 5 o'clock because there was a tremendous traffic
jam on the 14th. Street Bridge.
Mr. Weitz. Rush hour.
Mr. Townsend. Right.
Mr. Weitz. Let me stop you for a minute. W^as it a taxi or a private
chauft'ered car that you had hired for the week ?
Mr. Townsend. I just don't remember, sometimes there were taxis
hired for a week.
Mr. Weitz. Yes. Do you recall whether this was one such instance ?
Mr. Townsend. No, I don't.
Mr. Weitz. Could you tell us who was in the cab with you ?
Mr. Townsend. Mr. Nelson, Mr, Parr, Mr. Lilly and myself.
Mr. Weitz. How about Mr. Elrod ?
Mr. Tow^nsend. Not that I recall.
Mr. Weitz. W ere there two taxis or was this the entire contingent ?
Mr. Townsend. One cab.
Mr. Weitz. OK. Could you tell us what happened on the way to the
airport?
Mr. Townsend. Yes. We were out on the entrance of the 14th Street
Bridge, moving slowly in the right-hand lane and looked over and the
car right beside us was a Government limousine with Governor Con-
nally ill it. I am not sure what, you Iniow, what position he had in
terms of the Government at that time and Bob Lilly said I be-
lieve there is Governor Connally and I said, oh, this is the first time I
had ever seen Governor (^onnally and I stretched around to look.
Mr. Weitz, Was he visible in the car ?
Mr. Townsend. Yes, he was. And then we pulled on ahead and we
were in the right-hand lane and that was moving, we got to National
x\irport.. Some time later,
Mr. Weitz. To Page, Airways ?
Mr. Townsend. Page Airways. We were in the lobby waiting to
get on our plane and Governor Connally walked in and I don't know,
someone in the group said, ''There is Governor Connally" and I believe
Bob Lilly said something like, "I need to talk to him" and he went
over and talked to Governor Connally .
Mr. Weitz. You were in the group at that point?
Mr. Townsend. What ?
Mr, Weitz. You were standing with Mr. Parr, Mr. Lilly and Mr.
Nelson when Lilly said this ?
Mr. Townsend. I am not sure those were his words.
Mr. Weitz. He said something to that effect ?
Mr. Townsend. Yes.
6310
Mr. Weitz. You were there, you heard it.
Mr. TowNSEND. Yes, sir.
Mr. Weitz. Connally did not, I take it, walk by or somehow ap-
proach the group but rather Mr. Lilly approached him somehow?
Mr. TowNSEND. I would say that was correct. I think it was prob-
ably— it probably happened when Governor Connally walked in and
Bob said, "there is Governor Connally, I will go talk to him," or some-
thing you know to that effect and he walked over and shook hands
with the Governor and visited with him for a few minutes. What
refreshed my memory on that was an article in Time magazine.
Mr. Weitz. It may have refreshed your recollection, but you are now
telling me what you recollect, not just what you read in the paper?
Mr. TowNSEND. Oh, yes, definitely.
Mr. Weitz. Now, do you know whether Mr. Lilly knew Mr. Con-
nally before this meeting ?
Mr. TowNSEND. I have no personal knowledge but it was, I believe,
that he did, I believe that he knew liim.
Mr. Weitz. Do you know the extent of his acquaintance ?
Mr. TowNSEND. I sure wouldn't know.
Mr. Weitz. Now, when Mr. Lilly was standing off with Mr. Con-
nally for a few minutes
Mr. Townsend. Yes.
Mr. Weitz [continuing]. Was there any discussion about that meet-
ing among the people who remained behind, you, Mr. Nelson and Mr.
Parr?
Mr. TowNSEND. Oh, I feel sure there was some little small talk in
terms of the Governor but I can recall nothing specific.
Mr. Weitz. Do you recall, for example, Mr. Parr wanting to walk
over himself and join in the conversation and speak to Governor Con-
nally ? And being restrained by anyone in the group ?
Mr. TowNSEND. Oh, its — I think that being restrained
Mr. Weitz. Weil, at least indicating that he wanted to join them
and someone objecting or saying something to him in that regard ?
Mr. Townsend. It is quite possible that Dave said something like :
"I would like to go talk with him."
Mr. Weitz. Do you remember this or are you just speculating?
Mr. Townsend. I vaguely remember Dave saying something like:
"I would like to go to talk to him,- ' and Harold saying : "No, let Bob
talk to him. Bob knows him."
Mr. Weitz. Or something like that, you're not quoting him ?
Mr. Townsend. Somethmg like that.
Mr. Weitz. But I am not putting words in your mouth, you remem-
ber something to that effect ?
Mr. Townsend. Yes.
Mr. Weitz. What happened then ?
Mr. Townsend. I guess the conversation between Bob Lilly and
Governor Connally stopped and we got out and went on the plane.
Mr. Weitz. Do you remember any conversation immediately after
or on the ride home — hearing any conversation that indicated what
Mr. Lilly had talked with Mr. Connally about ?
Mr. Townsend. None whatsoever. The only thing I remember is
that there was, I believe, on the way out to the plane, and I am not
sure whether the Governor left before we did or we left before the
6311
Governor, but I remember that there was a question raised as to
whose airplane it was that the Governor was flying on and I believe
that one of the pilots that was on the AMPI plane said, "If it is that
Saberliner we can che€k it out."
Mr. Weitz. One of the pilots on the AMPI plane said this ?
Mr. TowNSEND. Mm-hmm, and I believe he may, some time during
either taxiing or flying, one or the other, I believe he maybe said
whose airplane it was.
Mr. Weitz. Do you remember ?
Mr. TowNSEND. I wouldn't have any idea.
Mr. Wettz. Do you have any idea or do you remember who the
pilots were that day? Generally who were the pilots for the AMPI
Saberliner?
Mr. TowNSEND. Joe Boll and I don't know that for sure, that Joe
was on that day.
Mr. Wettz. I understand.
Does Paul Blanton refresh your recollection ?
Mr. TowNSE^^). Yes.
Mr. Weitz. How about Mr. Coggins ?
Mr. TowNSEND. I may have been on a plane once or twice when
Goggins
Mr. Weitz. Goggins.
Mr. Townsend [continuing] . Goggins was the pilot.
Mr. Wettz. Of those three gentlemen, do you recall which of the
three, if any of those three made this comment ?
Mr. TowxsEXD. I really don't know. I would assume that the air-
plane loar would show who the pilot was that day.
Mr. Weitz. Now, if you remember, if you are not sure what date
this was
Mr. Towxsend. I am not sure what day it was and who the pilot
was.
ISIr. Weitz. Could you relate this meeting with an activity to gain a
price support increa?e? In other words, February or March of 1971?
Mt. TowNSEXt). I am tiying to think of other actiidties that hap-
{)ened along that period.
Mr. Weitz. Yes.
Mr. TowNSEisTD. I just reallv don't remember.
Mr. Weitz. So you attach no significance or no relationship be-
tween that ne««^ssarily and the price support decision activity ?
Mr. TowNSEXD. I really don't know.
Mr. Weitz. But if otliei-s did, if others placed it during that period
you wouldn't dispute them ?
Mr. TowNSEND. No, my lands no. I sure wouldn't.
Mr. Weitz. ^Yherc did the plane go, the AMPI jet?
Mr. Towxsend. After that?
Mr. Weitz. That day.
Mr. Tow>rsE]ST>. liittle Kock.
Mr. Weitz. And then?
Mr. TowNSEND. I really don't know, I assumed it was going to
San Antonio.
Mr. Wettz. No stops between Washington and Little Rock?
Mr. TowNSEND. Not that I can recall.
Mr. Weitz. Who was on the flight, to the best of your recollection?
6312
Mr. TowNSEND. Mr. Parr, myself, and Bob Lilly.
Mr. Wettz. Do you recall Lynn Elrod on that flight?
Mr. TowNSEND. No, I really don't. He could have been but I just
don't recall it.
Mr. WErrz. If he was in Washington and flew back — if he was
in Washington with Mr. Nelson, would he accompany him if Mr.
Nelson and Mr. Elrod were both returning to San Antonio, would
Mr. Elrod accompany him on the company jet?
Mr. TowNSEND. That is kind of a funny situation in terms of the
jet. I have been in the same company with Mr. Nelson sometimes,
and we would go commercial and he would go by company plane.
Mr. Weitz. Mr. Nelson would always fly the company jet if it
was available?
Mr. TowNSEND. Yes: oh there are probably exceptions to that.
Mr. Weptz. Generally?
Mr. TowNSEND. Generally ; yes.
Mr. Weitz. Mr. Parr, does he normally fly the jet also with Mr.
Nelson if they were both leaving and going the same direction?
Mr. TowNSEND. I would say "generally," and generally if I were
going, I would go on it, too.
Mr. Weitz. Right.
Mr. TowNSEND. And the same would be true with Bob Lilly or
Bob Isham or Lynn Elrod.
Mr. Weitz. Do you recall during the period of the price-support
activity in March of 1971, any contact or overhearing of any conver-
sations referring to Mr. Connally? i
Mr. Townsend. Gosh, I feel sure IMr. Connally was aware of the
price support and I can't cite you any specific
Mr. Weitz. Do you know of anyone who was speaking to him,
or talking about meeting with him, or mentioning his name in any
way connected with the price-support decision?
Mr. Townsend. I don't recall any specific instances of — ^you know,
I just don't remember any instances where I knew specifically where
there was anyone meeting with Governor Connally at this point.
Mr. Wettz. Were you aware of the activities of — any activities
by Jake Jacobson on behalf of the dairy people in March of 1971 in
connection with the dairy price-support decision?
Mr. Townsend. Boy. I would sure think that Jake Jacobsen would
have been, if he would have been available because Mr. Jacobsen was
an attorney for AMPT and my understanding was that he was — ^had
been with Governor Connally when he was Governor of Texas. I
believe he had a relationship there and if there was any way I think
that it would probably have been explored and probably would have
been asked. ■
Mr. Weitz. Was Marion Harrison working in Washington on
behal" of the dairy people in March of 1971 for an increase?
Mr. Townsend. Yes, sir.
Mr, Weitz. Did you meet with him during that period?
Mr. Townsend. 1 would say that I did, yes. but I probably met
with him during the week, the first week of March and the second
week of March.
Mr. Weitz. How about Murray Chotiner? Do you recall his name
being mentioned or in some way being involved in the effort to secure
an increase?
6313
Mr. TowNSEND. I am just not sure; I had no contact with Mr.
Chotiner in relation to this, during that March period at least that I
can recall right now.
Mr. Weptz. I see. I notice on your calendar on the 24th you have —
well, on the 23d you have WH 10 :30 to 11 and on the 24th Kepublican
dinner. Does that refer to the "White House meeting, the meeting at
the White House on the 24th, the Eepublican fundraising dinner?
Mr. TowNSEKD. Yes, sir.
Mr. Weitz. Did you attend either of those?
Mr. TowNSEND. I attended the Republican fiindraiser on the 24th.
Mr. Weftz. On the 24th?
Mr. TowNSETSTD. Yes, sir.
Mr. Weitz. How many tables were filled with representatives of
the dairy industry, do you recall or how many people were there
from the three co-ops?
Mr. TowNSEND. I would guess about 15.
Mr. Weitz. Fifteen?
Mr. TowNSEND. People, not tables.
Mr. Weitz. Do you recall Mr. Nelson attending the dinner, he
did attend, didn't he?
Mr. TowNSEND. Yes. sir.
Mr. Weitz. And did Mr. Parr attend the dinner?
Mr. TowNSEND. Yes, sir.
Mr. Weitz. Do you recall any discussion in advance to the dinner
as to whether or not the dairy people would go or who would, amongst
you, go to the dinner?
Mr. ToNWSEND. I am sure that there was, you know, some discus-
sion of who would go. I think some of the people were to be in on the
meeting on the 28d with the President and T assume they stayed over.
Mr. Weitz, Did you talk to anyone after the meeting with the Presi-
dent or did you hear what the feeling was among the group who met
with the President as a result of that meeting? Were they optimistic
about an increase? Did their outlook change somehow as a result of
the meeting?
Mr. TowNSEisTD. Yes ; I talked to whoever it was here on the 24th and
went to the dinner and also went to the Wliite House meeting with the
President. T suspect I asked them what their impression was and as a
general rule, I thought that the overall impression would be that they
were impressed that the President knew quite a little bit about the
dairy industry, knew quite a little bit about AMPI and the other
gix)ups that were in the meetinjr with the President and was aware of
their problems and was a very sympathetic listener and I thought
that — I guess my general feeling was encouragement. You know, things
had changed in terms of^ — I guess I felt that before that that the Presi-
dent knew absolutely nothing about the dairy industry. I never met
the President at that time and I thought he was probably kind of
cold and aloof. I was disappointed in the Department of Agriculture,
I had a feeling that the Department of Agriculture would recommend
a price-support increase.
Mr. Weitz. And this was at the outset.
Mr, Townsend. At the outset.
Mr. Vanet. Let me just interrupt you for a moment. Probably he is
not wanting to get into things he is not asking you about. I think this
30-337 O - 74 - 30
6314
is far beyond the question. If he wants to know about that, he will
ask you.
Mr. TowxsEND. T^%at was the question ?
Mr. WErrz. I think you have answered it.
Mr. Vanet. About two pages ago.
Mr. TowNSEND. I am sorry. I will try to be more responsive.
Mr. Weitz. Did you hear from those who attended the meeting what
the response was, what the attitude of either Secretary Hardin or
either Under Secretarj^ Campbell was that was demonstrated at that
meeting?
Mr. TowNSEXD. T remember no s}3ecific comments on that.
Mr. Weitz. Now, when did you first hear of the increase, that the
increase had in fact been granted ?
Mr. TowxsEXD. I believe it was the 25th.
Mr. Weitz. That was the day it was publicly announced, that was the
day you heard of it ?
Mr. Towxsexd. Oh, yes.
Mr. Weitz. Did you know in advance of the 25th, did anyone tell you
of any likelihood, from inside information that they had. that the in-
crease would be granted ?
Mr. Towxsexd. No, sir.
Mr. Weitz. It came as a complete surprise ?
Mr. Towxsexd. Yes, sir, a very pleasant one.
Mr. Weitz. You were in town on the 23d and 24th, is that correct ?
Mr. Towxsexd. I was not in Washington on the 23d. I was in Wash-
ington on the 24th and 25th I would say.
Mr. Weitz, Now. after the dinner or at the dinner, do you recall any
discussion that took place between Mr. Nelson and either Mr. Chotiner
or Mr. Kalmbach ?
Mr. TowNSEX'D. No, sir.
Mr. Weitz. What did you do at the end of the dinner, did you go
right back to your hot«l ?
Mr. Towxsexd. I think that I did, yes.
Mr. Weitz. Did you go back with Mr. Nelson ?
Mr. Toavxsexd. I just really don't remember.
Mr. Weitz. All right. Did you see Mr. Chotiner at the dinner?
Mr. Towxsexd. I don't recall seeing Mr. Chotiner at the dinner,
Mr. Weitz. Did you at any time know who Mr. Kalmbach was or
recognize him on sight?
Mr. Towxsexd, I would not recognize him today; I have never met
Mr. Kalmbach.
Mr. Weitz. Was Mr. Harrison at the dinner ?
Mr. Towxsexd. Boy, I honestly don't know. He could have been at
the same table with me. I just don't remember.
Mr. Weitz. Now, any time during March of 1971, February or March
1971, was there any discussion that yon overheard or have since heard
about other than what you read in the newspapers that referred to
contributions by the dairy industry to the reelection of the President,
specifically by TAPE and other dairy trusts ?
Mr. Towxsexd. I am lost in the question ; would you mind repeat-
ing it?
Mr. Weitz. In March 1971, you were in Washington, and the effort
was made to secure a price increase. During that time, do you recall
any discussion or reference to political contributions to the reelection
6315
of the President, or support the President that would have included, in
the context of the discussion, political contributions?
Mr. TowNSEND. I don't remember anything specifically. I feel sure
that I probably — I may even have mentioned something about those
committees in the early part of March to Mr. Harrison. I do not be-
lieve they were established at that point. You know, I did not hear any
conversations by anyone relating to a specific amount of any
contribution.
Mr. Weitz. I did not say a specific amount ; I said a discussion of
contributions to the reelection of the President.
Mr. TowNSEND. I just feel certain there must have been conversa-
tions ; I can't recall any specifics.
Mr. Weitz. You have no specific recollection.
Mr. TowNSEND. Nothing specific. That really wasn't my bag.
Mr. Wettz. So it is not unusual, had there been such discussions, it
would have been unusual for you to have been a part of them or privy
to such discussion ?
Mr. Townsend. Yes, sir.
Mr. Weitz. "\Ylien did you first become aware of the fact that con-
tributions were made in 1971 to the President's reelection?
Mr. Townsend. I guess I assumed that there were contributions
being made to go to that Republican dinner on the 24th. I would say
that would be the first.
Mr. Weitz, And after that, what about the committee or committees
that were to be established by Mr. Evans and Mr. Kalmbach through
Mr. Harrison? Did there come a time you knew of any contributions
to any committees provided by Mr. Harrison ?
Mr. TowNSEND. Yes, I can't tell you a time frame, probably in that
fall — summer or fall.
Mr. Weitz. Summer or fall 1971.
Do you recall a conversation between yourself and Gary Hanman
in the summer of 1971. relating to contributions by ADEPT to the
President's reelection ?
Mr. Townsend. Yes, I believe that Dave Parr asked me to call Gary
and give him the names of — I don't know, five committees or something
like that, and I believe I called, I am sure I called and gave him the
names of the committees.
Mr. Weitz. Is that the first you knew of the existence of some of the
committees? Did you know for whom they — what candidates they were
organized for?
Mr. Townsend. I would say it was about that time, you know; I
can't say whether that was the exact moment, you know, or even the
day. I think that was the first time I knew specifically of the names of
any of the committees, yes.
^Ir. Weitz. Let me mark this as exhibit 6, a letter from Gary Han-
man to David Parr, dated August 1971, in which he encloses a cover
letter to Cliotiner with $2,500 each to six committees, and the last
sentence says, "This information was related to Tom Townsend last
week," and then underneath a letter from Dave Parr to Gary Hanman
instructing him to mail $2,500 each to each of the 12 committee names
enclosed, which is attached as a part of exhibit 6.
[The document referred to was marked Townsend exhibit No. 6 for
identification.*]
♦See p. 6372.
6316
Mr. Weitz. Have j'ou ever seen either of those two letters?
Mr. TowNSEXD. I believe that I have. I believe that I have seen these
in Springfield.
Mr. A^'eitz. I see, in the ADEPT file or Mr. Hanman's file?
Mr. TowNSEND. Yes, or information that was gathiered by ADEPT
to bring up here.
Mr. Weitz. Now, do you recall telling Mr. Har.ni'in or discussing
with him the fact that there were 12 committees to be contributed to,
each to receive $2,500 ?
Mr. Townsexi), Yes, as a matter of fact.
INIr. Weitz. That information was relayed to you by Mr. Parr?
Mr. TowxsENi). Yes, I believe when I called Gary he told me some-
thing about they didn't have enough money except for seven or five of
the committees. 1 ami not sure which.
Mr. Weitz. Something less than 12.
Mr. Townsexd. Something less than 12.
And he said "what do I do?"' and I said "I don't know, you will have
to talk to Dave."
Mr. Weitz. Why did he talk to you; why didn't he talk directly to
Mr. Parr, do you know ?
Mr. TowxsEXD. I can't answer that.
Mr. Weitz. Was Parr out of the city at that time ?
Mr. TowxsEXD. I just have to assume that he was either out of the
city, or he asked me to do this as he was going out the door to go out of
the city. I really just don't recall.
Mr. Weitz. Is there anything else about the contributions from
either TAPE or the other two dairy trusts to the President's reelection
effort through these multiple committees that you recall, anything else
that you directly participd^ed in or any other information that you
were told or heard about ?
Mr. Vaxet. So the witness understands, your question seemed to be
limited so far in scope of — your inquiry thus far seemed to be limited
solely to President Nixon's reelection.
Mr. Weitz. Right.
Mr. Vaxet. The campaign and not other Presidential aspects.
Mr. Weitz. At this point, T am not talking about all of President
Nixon's campaign either; I am talking about the 100 multiple commit-
tees which were organized, of which these 12 were a part, which are
represented in exhibit 6 ; that is what I am asking.
Are there any o'^hers besides this particular reference to you — do vou
recall what you recounted in connection with your discussion with Mr.
Parr and Mr. Hanman, anything else that you knew of in connection
with or participated in, in connection with contributions in 1971 to
these multiple committees for the reelection of the President?
Mr. TowxsEXD. Not that I recall right now.
Mr. Weitz. OK. Did you know of tlie total contributions or the
number of contributions organized for the President's reelection, to
receive contributions from the three dairy trusts?
Mr. TowxsEXD. No, sir.
Mr. Wett7. Did vou know why these names were being sent from
Mr. Parr to Mr. ITanman and not directly to Mr. Hanman who was
providing Mr. Chotiner in this case ?
Mr. Towxsexd. No, 1 don't know that.
6317
Mr. Weitz. Do you know if there was a coordinated effort or som?
coordination between the three co-ops in the amounts or timing of the
contributions to the President's reelection ?
Mr. TowNSEND. In terms of the President's reelection ?
Mr. Weitz, The President's reelection and the multiple committees.
Mr. TowNSEND. Not that I recall.
Mr. Weitz. All right. Do you attach any significance to the fact that
on the same day, that ADEPT sent in $2,500 contributions to each of
6 committees for the President's reelection, that SPACE mailed in
and reported having made contributions of $2,500 each to 12 commit-
tees for the President's reelection ?
Mr. TowNSEND. No, I am not aware of that.
Mr. Weitz. All riglit. Did you ever hear of, either before that time
or since that time, any discussions of commitments of money or goals
or intentions of the three dairy trusts of the TAPE or the dairy indus-
try, in genei-al, to contribute to the President's reelection ?
Mr. TowNSEND. The specific amounts?
Mr. Weitz. The magnitude or the specific amounts, yes.
Mr. TowNSEND. Oh, shoot. It is hard for me to separate out what I
have read in the darn newspapers. I have read more in the newspapers
in the last year than I ever knew when I worked for AMPI.
Wr. Weitz. If you can't recall
Mr. TowNSEND. I just can't recall any specific amount.
Mr. Weitz. Do you know why no contributions were made by TAPE
to the President's reelection or at least ostensibly to the reelection com-
mittees for the President in 1972 ?
Mr. TowxsEXD. No, sir.
Mr. Weitz. Do you know whether that was in fact the case ?
Mr. TowNSEND. I would have no idea at all. I never — my recollection,
I never saw a TAPE record, I never attended a Tx\PE meeting.
Mr. Weitz. Were you a member of TAPE ?
Mr. TowNSEND. Yes, I was.
Mr. Weitz. Did you receive monthly reports of TAPE members,
or periodic repoT'ts ?
Mr. Townsend. I don't recall receiving a report as a member of
TAPE.
Mr. Weitz. Did there ever come a time when you either were or you
knew of or do you know of any instances in which cash was transferred
from either one employee representative of AMPI to another for a
Presidential candidate, 1972 Presidential candidate?
Mr. Townsend. I have no knowledge of any of that, of any transac-
tion wliere cash went to candidates to reelect the President.
Mr. Weitz. Do you know whpther Mr. Parr ever received cash or
some other payment for a Presidentinl candidate from an employee
or an attorney in the employ of AMPI for 1972 Presidential candi-
dates?
Mr. "N-^ anet. Any candidate ?
Mr. Weitz, Any candidate.
Mr. Townsend. From anv employee or attornev?
Mr. Wettz. Yes. to Mr. Parr, cash or some other form of payment
for a Presidential candidate?
Mr. Townsend. Yes.
Mr. Weitz. Would you tell us about it ?
6318
Mr. TowNSEND. I know that I gave $50 to the Conunittee To Re-
Elect or excuse me, I can't think of the name of the committee, it is in
my checks, for Wilbur Mi lis.
Mr. Weitz. When was that ?
Mr. TowNSEND. I would rather refer to my checks.
Mr. Weitz. Certainly. It was only in the amount of $50?
Mr, TowNSEND, Yes, sir.
Mr. Weitz. W ould it be either 1971 or 1972 ?
Mr. TowNSEND. T believe 1971.
Mr. Weitz. Do you recall any moneys beiiia: handled from Jake
Jacobsen to David Parr for Wilbur Mills in 1971 ?
Mr. TowNSEXD. No.
Mr. Weitz. You know of no such transaction ?
Mr. TowNSEND. I know of no such transaction.
Mr. Weitz. Were you ever present at a time when something was
transferred from ^Ir. Jacobsen to Mr. Parr in 1971, in the airport in
Austin, Tex., and in which some envelope or something was transferred
which may have contained money, you do not know for a fact that it
contained money ?
^ Mr. TowNSEND. Austin, Tex. I only recall being in the airport in Aus-
tin, Tex., one time and Mr. Jacobsen was there.
Mr. Weitz. Do you recall when that was?
Mr. TowNSEND. No, I do not. I believe Mr. Lilly was there. I be-
lieve by chance we happened to meet or see Mr. Lilly there.
Mr. Weitz. TMio else was there.
Mr. TowNSEND. I don't recall.
Mr. Weitz. Do you know what the reason was that you were at the
Austin Airport?
Mr. TowNSEND. I believe we were there because Wilbur Mills was
going to make a sneech to the joint session of th>e Texas Legislature.
Mr. Weitz. And was he flying into the airport ?
Mr. TowNSEND. Mr. Mills?
Mr. Weitz. Yes.
Mr. TowNSENi). Yes, sir, I believe that — well, to the best of my
knowledge, I don't know if he was flying in or not.
INfr. Weitz. That was the reason you think you were at the airport.
Mr. TowNSEND. Yes, sir, T think we went on down to the capitol
and T hoard his speech.
Mr. Weitz. So. whatever date would be indicated is the date which
Mr. Mills spoke to the joint seSvSion of the legislature which would, I
take it, would not be very often, which miaht be the dav in which you
were at the Austin Airport with IMr. Jacobsen and by chance met Mi'.
Lillv or about that day?
Mr. TowNSEND. There may have been another time I was in the
Austin Airport, but that is the only time T can ever recall being at the
Austin Airport.
IMr. Weitz. You were there with Mr. Jacobsen and by chance ran
into Mr. Lilly?
Mr. TowxsEND. No. I was there with Mr. Parr.
INfr. Weitz. Mr. Parr Avas there, was there anyone else there?
INfr. TowNSExn. No, no one that T knew that T can recall now.
INIr. AVeitz. Did Joe Long meet you there or meet anyone there?
Mr. TowNSEXD. I just honestly don't remember.
6319
Mr. Weitz. Just so I understand, you recall at least once being in
the Austin Airport?
Mr. TowNSEND. Yes, sir.
Mr. Weitz. And on that occasion, being there with Mr. Parr and
Mr. ,Tacobsen, being there and running into, by chance, Mr. Lilly, you
think that is the day on or around the time which Mr. Mills came to
speak to a joint session of the Texas Legislature?
Mr. TowNSEND. Boy, I could be all off, that is the best of my
recollection.
Mr. Weitz. And you don't recall on this occasion anything passing
between Mr. Jacobsen and Mr. Parr.
]Mr. Towxsend. No, sir.
Mr. Weitz. Were you with Mr. Parr — ^by his side every moment?
Mr. TowxsEND. Oh, no.
Mr. Weitz. So there could have been an occasion in which he trans-
acted or engaged in some conversation or did something without you
knowing of it?
]Mr, Towxsend. Most certainly.
Mr. Weitz. Wliy was Mr. Lilly there, do you know ?
Mr. TowNSEXD. I reallv don't know.
Mr. Weitz. Did vou speak with him ?
INlr. TowxsBND. Yes. I said hello.
Mr. Weitz. That is all ? But you ran into him by chance, you didn't
see him or prearrange to meet you at the airj^ort ?
Mr. TowxsEXD. No.
ISfr. Weitz. Do you remember what year that this was ?
Mr. TowxsEXD. I think my records — my calendar would reflect it.
Mr. Weitz. JjeVs go off the record.
fDiscussion off the record.]
Mr. Weitz. Back on the record.
Tvct me ask you again, in referrins; to your calendar, yon have down
an entry on April 30, 1971, "Mills-Texas, Legislature and LB J," does
that refresh your recollection as to when you think you were in the
Austin Airport with Mr. Parr?
Mr. Towx'SEXD. Yes, sir, I think it. was on April 30, 1971.
ISIr. Weitz. Now, on that same day, it says "P Exec-X in Dallas" do
you know what that was ?
Mr. TowxsEX'^D. That is a promotion committee of AMPI.
Mr. Weitz. All riofht. sir.
Mr. TowxsExn. We also went to the LBJ ranch that day.
]\f r. Weitz. OK, do you know Bob Justice ?
Mr. TowxsEXD. Yes. sir, I do.
Mr. Weitz. Do you know if he ever received any cash or moneys from
anv attorneys of AMPT for anv political purposes ?
Mr, TowxsEXD. Not to rnv knowledge.
Mr. Weitz. Do vou know of anv instances where Norma Kirk went
to the airport, to the Central Flving Service in Little Rock, to pick up a
package from Mr. Parr from Mr. Lillv in 1971 ?
Mr. TowxsEXD. Not to mv knowledge, that I recall.
^Tr. Weitz. Do you know whether Norma Kirk ever received, in
whatever form, any cash of say $1,000 or more, or anv amount that you
know of on behalf of Mr. Parr for political purposes ?
Mr. Towx^sEXD. Not to my knowledge.
6320
Mr. Weitz. Are you familiar with the rallies that were held in 1971,
in which AMPI employees participated on behalf of Mr. Mills?
Mr. TowNSEND. There was a Mills rally in Little Rock — I noticed
that as I was — I believe it was on the 26th of some month.
Mr. Weitz. Au|2rust 26, 1971 ?
Mr. TowNSEND. Yes.
Mr. Weitz. Where was that, in Little Rock?
Mr. TowNSEND. Held in I^ittle Rock.
Mr. Weitz. And did AMPI employees participate in the prepara-
tion or organization of that rally ?
Mr. TowNSEND. I believe they did.
Mr. Weitz. Did you ?
Mr. TowNSEND. I went to the rally, I took my wife and children.
Mr. Weitz. Did you assist in any work in the organization or prep-
aration of the rally ?
Mr. TowNSEND. Boy, if I did it was extremely minimal.
Mr. Weitz. All right. Do you remem}>er a rally in Ames, Iowa, also
in which AMPI employees helped organize for Mr. Mills ?
Mr. TowNSEND. I remember an Iowa cooperative campaign in which
Mr. Mills spoke.
Mr. Weitz. Do vou know what the principal purpose of it was — of
the meeting in whicli Mr. Mills spoke ? Was it for Mr. Mills or for the
rally ?
Mr. TowNSEND. As far as I was concerned that was secondary, the
dairy industry has been completely disorganized in Iowa ever since I
have been in the milk business. It has been difficult for the numerous
cooperatives to ever do anything cooperatively.
The Iowa cooperative campaign was an effort to get a lot of different
cooperatives in Iowa involved in trying to make a substantial contribu-
tion in terms of getting together and doing something at least — talking
together — to that extent, I think it was somewhat successful.
There were a lot of co-ops involved in the thing in that carnpaign.
Mr. Wettz. You say that was not the principal purpose of the rally
at which Mr. Mills spoke, the Presidential campaign ?
Mr. TowNSEND. No.
Mr. Weitz. Are you familiar with Jo© Johnson's work on behalf of
Mr. Mills' Presidential campaign ?
Mr. TowNSEND. Just in a general way, yes.
Mr. Weitz. What do you know about it?
Mr. TowNSEND. Well, he worked for the — whatever that committee —
Mills' committee is, he worked for that committee.
Mr. Weitz. "VVliat period of time, do you know ?
Mr. Townsend. No, I don't.
Mr. Weitz. Were there any other AMPI employees who worked
with him for Mr. Mills ?
Mr. Townsend. Oh, I think on a part-time basis as it fit in ; gosh,
I would have thousrht that probably numerous AMPI employees
would have been helpful to the campaign of Wilbur Mills.
Mr. Weitz. Were you familiar with a checkoff system that Avas pro-
posed for Southern employees in 1972 — the beginning?
Mr. Townsend. Yes, I am.
Mr. Weitz. To collect contributions for Mr. Mills ?
Mr. Townsend. Yes.
6321
Mr. Weitz. Did you attend a meeting in McAllen, Tex. ?
Mr. TowNSEND. Yes, I did.
Mr. Weitz. And who proposed such a checkoff system ?
Mr. TowNSEND. I believe probably Mr. Parr.
Mr. Weitz. He attended the meeting?
Mr. TowNSEND. There were a series of about three meetings at the
beginning of the year in McAllen, Tex. I am not sure whether Mr.
Parr was at this one or at all of them. I specifically remember Mr.
Nelson — we all got our pictures taken with Mr. Nelson.
Mr. Weitz. But your recollection is that Mr. Parr proposed a check-
off system.
Mr. TowNSEND. Yes, sir.
Mr. Weitz. Was it ever instituted ?
Mr. TowNSEND. No; I signed an authorization form and it was
returned to me.
Mr. Weitz, Do you know why it wasn't instituted and why the form
was returned to you ?
Mr. TowNSEND. I guess it was the policy of AMPI that they not
honor such authorizations for checkoffs for political candidates.
Mr. Weitz. You said before that you attended about half of the
AMPI board meetings ?
Mr. TowNSEND. Yes, sir.
Mr. Weitz. Do you recall at any of those meetings the question of
high legal fees for the home office or for AMPI in general coming
up — being discussed ?
Mr. TowNSEND. I don't specifically recall that at the meetings that
I attended. The board meetings — I have talked with individual board
members I guess.
Mr. Weitz. Did anyone ever talk to you in AMPI about the problem
or any of the lawyers or consultants ?
Mr. TowNSEND. I would say Bob Isham talked to me about it in
general — the high general and administrative, legal, advisers,
airplanes.
Mr. Weitz. Did he mention any particular transactions that he
thought were illegal, or certainly were very fi^hy, besides the amoimt
of them — the way certain things or certain transactions were carried
out?
Mr. Tow^nsend. He started to one day.
Mr. Weitz. Did he mention any names ?
Mr. Townsend. No ; he said this would have been, I think, Decem-
ber 1971,
Mr. Weitz. Just before the change of management ?
Mr. TowNSEND. Yeso-I was in his office — in Bob Isham's officein
San Antonio, and Bob seemed to be a little bit nervous and I said :
"Bob, what is wrong ; is there anything I can do to help you ?" And he
said : "Oh, Tom, I don't know ; do you know anything about the book ?"
And I said: "No; I don't know what you're talking about." He said,
"Tom, there are so many things you don't know: I am nervous, but
it is probably better you don't know." And I said : "If I can help in any
way, let me know."
Mr. Weitz. Did you ever at any board meeting or outside of any
board meeting hear any of the' AMPI employees use the word
6322
"conduits" with reference to its employees, certain attorneys, or
consultants?
Mr. TowNSEND. Yes; I think so. You know, I am not just — I am not
sure what time period we are talking about.
Mr. WErrz. 1971.
Mr. TowNSEXD. Spex^ifically.
Mr. Vanet. All of his inquiry is with respect to Presidential cam-
paigns— the time periods of 1970, 1971, and 1972.
Mr. Weitz. Yes;
Mr. Vanet. And he is not including in his questions any inquiry
about congressional races or about other Presidential campaigns back
in the 1960's or whatever, T think you can answer — I think you can
answer with that understanding, with respect to his questions, that
they are limited in that scope.
Mr. TowNSEND. Yes; I would have to say that. I don't recall specific
instances.
Mr. WErrz. Do you know who, if any, of AMPI's attorneys or con-
sultants served as conduits for moneys to political contributions?
Mr. TowNSEisTD. Oh, I did not think of conduits in that respect.
Mr. Weitz. I meant conduits in that text.
Mr. Town SEND. Oh. no ,■ I was thinking of conduits as anyone who
knew somebody that might be beneficial politically, like Marion
Harrison, that is the first one that popped in my mind.
Mr. Weitz. You are talking about who someone knows rather than
serving as a transferee for money ?
Mr. TowNSEND. Correct. I knew of no instances where an amount of
money was given to someone +or political contributions for the —
I guess for any political candidate in 1072.
Mr. Weitz. Are you aware of such a scheme that was devised
which — for any transactions which involved non-Presidential candi-
dates ?
Mr. Vanet, I would object to that because I don't see how that
would be pertinent to the scope of this inquii-y.
Mr. Weitz. Well, it is if the scheme is devised which covers both
Presidential and non-Presidential and if you are aware of transactions
that utilized attorneys for tliat purpose. I am not asking you what
political candidates but do vou know of transactions which involved
transfers of money through consultants or attorneys for political
purposes ?
Mr. Vanet. I will object to the question as it is framed and advise
the witness not to answer it. If you limit to anv scheme whereby money
was passed to any Presidential candidates, it is a proper inquiry. That
may be the intent of the question but T would have to object to that.
Mr. Weitz. Let's start with that. Do you know of any scheme
whereby moneys were transferred through attorneys or consultants?
Mr. Townsend. I have read quite a bit about it in the newspapers in
the last 6 months.
Mr, Weitz. For Presidential candidates besides what you read in the
paper, do you know anjii-hing about that?
Mr. Townsend. I guess 1 suspicioned it in general, but I had no
direct knowledge.
Mr. Weitz. Did there come a time in 1971 when vou were cither told
or participated in the destruction of certain sensitive or incriminating
documents in the Little Rock, Ark. office of AMPI ?
6323
Mr. Vanet. I will object to the characterization of sensitive and
everything- else that you said, if you could just say destruction I think
that would be all right.
Mr. Wfjtz. Did there cpme a time in 1971 when you were asked or
participated in a destruction of documents in the Little Rock, Ark.
AMPI office in 1971?
Mr. TowNSEND. Yes, sir.
Mr. Weitz. Can you tell whkt transpired ?
Mr. Vanet. I would — excuse me, and I would ask that the answer be
restricted only to those records that involve political contributions or
anything involving Presidential reelections, within the scope, not in the
antitrust litigation and other matters involved among other people that
are outside the scope of this inquiry, and would just advise you to limit
your questions to anything involving the Presidential race.
Mr. Weitz. I will have to differ with you, counsel. The antitrust suit
is within the scope of the inquiry to the extent that any of these docu-
ments which might refer to any matters that indicate contacts with
Government officials who might have knowledsre both of campaign con-
tributions as well as the problems involving the antitrust suit.
Mr. Vanet. I have no objection to him answering about destruction
of records, if any, with respect to political contributions, who they
were, who the contact men were, or anything involved in that. If any
of those records were destroyed he certainly can answer.
Mr. TowxsEXD, Yes ; I would say in March or April of 1971 1 got a
phone call from Dave Parr in which he told me to destroy or get rid
of, I am not sure, I do not know his wordings, you know, of records
that we had in that Little Rock office relating to political activities or
contributions.
Mr. Weitz. Did he specify what political acti\'ities or what contri-
butions, or did he just say generally all papers relating to such
activities ?
Mr. TowNSEND. All papers.
Mr. Weitz. Did he tell you why?
Mr. TOAVNSEND. No.
Mr. Weitz. He was making the request, did you ask him ?
Mr. TowNSEND. I made a comment. I said something to the effect
that we couldn't operate the office unless we had some information and
he said something to the effect of — I recall the phrase — dad-dammit,
that was a common phrase.
Mr. Wettz. An expletive of some sort.
Mr. TowNSEND. I don't know how to spell it. That's what he said.
Just do as I say.
Mr. Weitz. And at that conversation, or any time thereafter, did
he ever explain whv he gave you that instruction ?
Mr. TowNSEND. No, sir, not that I recall.
Mr. Weitz. Did he tell you who was to participate in this in addi-
tion to vourself, if anyone?
Mr. TowNSEXD. He said get everybody.
Mr. Weitz. And did you pass that word on to others?
Mr. TowxsEXD. Ye.s, I did.
Mr. Weitz. Who did you tell that to ?
Mr. TowNSEND. I think everybody in the office that was there that
day and probably the next day.
6324
Mr. Weitz. Just to be specific would that include Joe Murphy ?
Mr. TowNSEXD. Joe Murphy.
Mr. Weitz. Mr. Elrod ?
Mr. TowNSENi). I don't know if Lynn was there or not.
Mr. Weitz. If he was in the office during that period of time of the
year before he went back to San Antonio, would yon have told him ?
Mr. TowNSEND. Yes.
Mr. Weitz. Was KeiflPer Howard in the office at that time?
Mr. TowNSEND. No, he was not.
Mr. Weitz. How alx)ut Forest Wisdom ?
Mr. Townsexd. Yes.
Mr. Weitz. Anyone who was in the office other than the secretary,
anyone who would have files that might include these types of papers?
Mr. TowNSEND. Eight.
Mr. Weitz. Do you recall anyone else you asked ?
Mr. TowxsEXD. Not specifically, but if they were in there that day
I asked them.
Mr. Weitz. Did they ask you why or did 3^ou have to enter into some
explanation of why they were being asked to destroy those documents?
Mr. TowNSEND. T suspect they did and I said, "I don't know."
Mr. Weitz. Did you in fact destroy documents in your files pursuant
to this instruction ?
Mr. TowNSEXD. Yes, I did.
Mr, Weitz. Do you loiow whether the others in fact destroyed files —
destroyed documents in their files pursuant to their instructions ?
Mr. TowxsEXD. Yes.
Mr. Weitz. Can you tell me or will you tell me whether any of the
documents that you destroyed relating to political activities related
in any way to Presidential contributions or contributions to Presi-
dential fundraisers?
Mr. TowxsEXD. I dont recall specifically any, you know, any spe-
cific documents. I think that probably they did.
Mr. Weitz. Do you recall what type of documents you would have
had in your files that related to political activities or political con-
tributions that related somehow to the Presidential reelection ?
Mr. TowxsEX^D. I had none in my files.
Mr. Vaxet. When you say "your files," you mean in the Little Rock,
Ark., office?
Mr. Weitz. No ; I am starting with your files.
INIr- TowxsEXD. I said there were none.
Mr. Weitz. Do you believe there were some in some of the files in
the Little Rock, A rk., office ?
Mr. TowxsEXD. Yes, sir.
Mr. Weitz. Did you actually go into Dave Parr's files also or did
you have his secretary do that pursuant to these instructions ?
Mr. TowxsEND. I think both of us did, his secretary and I.
Mr. Weitz. In other words, you were also not doing it only in your
files, but also in Mr. Parr's files on his behalf?
Mr. TowxsEXT). Yes, sir ; that is correct.
Mr. Weitz. Who would have engaged in this with you, Norma
Kirk? ^ ^
Mr. TowxsEXD. Yes.
Mr. Weitz. In his files. Did you have to tell her in order for her
to assist you as to what type of documents she was looking for ?
6325
Mr. TowNSEND. I think generally it was a question of some file fold-
ers and she — I can't tell you specific instances. I know there were
several instances she asked me "what about this," and I would say
"yes" or "no."
Mr. Weitz. Now, particularly in Mr. Parr's files, I gather you had
only direct contact with your files and Mr. Parr's files pursuant
to this instruction ?
Mr. TowNSEND. Correct.
Mr. Weitz. The others handled their own files.
Mr. TowNSEND. To the best of my knowledge that was true.
Mr. WErrz. In your files or Mr. Parr's files do you recall any docu-
ments or files, file folders, which in any way related to the import
quota questions and/or campaign contributions or political contacts
in relation to the quota question or to
Mr. TowNSEND. I feel there was no — I just think its — ^there were
none in my opinion. I think that whole area is in terms of any rela-
tionship between contribution and action on the part of Government,
I just can't believe that for the life of me.
Mr. Vanet. That is not really his question, the question is do you
remember seeing anything in the files involving those things ?
Mr. TowNSEND. No, sir.
Mr. Weitz. Can you tell me, you said you did destroy some
documents ?
]Mr. TowNSEND. Yes, sir.
Mr. Weitz. Now we're limiting ourselves to political activities or
contributions and in fact, I think you also said that it some way
related — may have related to the Presidential political activity or
Presidential contributions ?
Mr. TowNSEND. Yes ; there may have been some.
Mr. Weitz. Could you tell us what those files were ?
Mr. TowNSEND. No.
Mr. Weitz. Or what categories of files they were ?
Mr. TowNSEND. No, I really can't.
Mr. Weitz. Since that time
Mr. TowNSEND. Man, you know, it was a mad scurry.
Mr. Weitz. Did Mr. Parr give you anv reason for the urgency of
the rex:[uest, why didn't he wait until he returned back to the office
for example ?
Mr. TowNSEXD. I don't know. He said "todav."
Mr. Weitz. I see. Since that time have you ever discussed this with
Mr. Parr or anyone else that could shed any light on why the request
was mpde as it was and with such urgency ?
Mr. TowNSEXD. Not that I recall.
Mr. Weitz. All right. With regard to the antitrust suit, the Gov-
ernment's antitrust suit againt AMPI, do you know of anv con-
nection between that and anv political contacts that were made with
members of the White House by representatives for AMPT or with
any political contributions or promised contributions by TAPE or
the Committee for TAPE ?
Mr. TowNSEND. Well, I read in the paper
Mr. Weitz. Other than what vou read in the paper.
Mr. TnwNSEXT). No, sir ; not that I recall.
Mr. Wett^. Finally, do you know the firm of Valentine, Sherman
and Associates ?
6326
Mr. TowNSEND. I have heard the name.
Mr. Weitz. Do vou know of any work that they were asked to do
or in fact did for AMPI in 1971 ?
Mr. TowNSEND. I don't know of any work that they ever did for
anyone.
Mr. WErrz. Do you know whether they were paid for or paid
any sums of money in 1971 by AMPI ?
Mr. TowNSEND. I would have no idea of that.
Mr. WErrz. Did you ever attend — overhear or attend any meeting
or hear any conversations which the — in which the funds to be paid
to Valentine, Sherman and Associates were discussed ?
Mr. TowNSEND. Yes, sir.
Mr. Weitz. Can you tell us about those ?
Mr. Townsend. I can't tell you when or where — there was a group
of AMPI people, we were having dinner one evening and I don't
even know what town, I can see the restaurant itself. We were the only
ones in the restaurant and Nelson, Isham., and Parr and Lilly were
sitting at a table off to my right and there were a group of us sitting
at the same table that I was sitting and they called me over and they
said, "We have got a commitment to Valentine, Sherman for Gov-
ernor Docking." This was Dave asking me and I said, "yes" and he
said, "Do you know of any other commitments to Valentine, Sher-
man" and I said "no, I know of none." And he said "OK" and I
went back and sat at the other table.
Mr. Weitz. How did you know of this commitment to the Governor?
Mr. TowNSEXD. I attended a meeting in Topeka at the top of some
hotel, I don't mean hotel, it was a bank building with Governor Dock-
ing and his AA and two dairy farmers, at which we talked about
Governor Docking's 1972 campaign.
Mr. Wei-^z. Do you know whether this had anything to do with
Hubert Humphrey's or Wilbur Mill's Presidential campaigns in 1972?
Mr. TowNSEND. I thought I heard no relationship at all.
Mr. Weitz. And in that connection did a Norman Barker who is
an AMPI director ever ask you about such a commitment to Governor
Docking ?
Mr. TowisrsEND. Norman Barker was at this dinner with — or lunch-
eon I guess it was — with the Governor.
Mr, Weitz. And did you call Bob Lilly in connection with that
meeting before or after to check on any commitments ?
Mr. Townsend. Yes; as a matter of fact this year I asked Bob if
the commitments to Governor Docking had b^en met.
Mr. Weitz. 1973 or 1972 are you talking about ?
Mr. Towxsend. 1972. He told me that as far a.s he knew they had.
Mr. Weitz. But to your knowledge you know of no moneys or no
arrangements with Valentine, Sherman that involved either Mr.
Humphrey's Presidential election effort, campaign effort, or Mr. Mills'
Presidential campaign.
Mr. TowxsEND. No, sir ; I recall none.
Mr. Weitz. Your only knowledge of this was in relationship to
Governor Docking?
Mr. TowNSEN-D. I think that I recall hearing the name of Valentine
and Sherman in terms of Hubert Humphrey's effort but I have no
knowledge of any activities.
6327
Mr. Weitz. Who would have told you about this if it did relate to
Mr, Humphrey?
Mr. TowNSEND. I just really wouldn't have any idea. It could have
been one of a lot of different people.
Mr. Weitz. All right, let's go off the record.
[Discussion off the record.]
Mr. Y/eitz. Back on the record. I have no further questions, thank
you.
[Whereupon, at 4 :05 p.m., the hearing in the above-entitled matter
was adjourned.]
6328
TowNSEND Exhibit No. l
MARION COWVN HARRI!
CRNCST OCNC RCCVCS
ftOBcnr r saclc
MtWON 50LTCW I
JVOr n. POTTER ^^
^'lAlK I
,Jr
LAW OFFICES
Reeves & Harrison
, SUITE SOO
I70I PCNNSYLVANIA AVENUE, N. W.
WASHINGTON, D.C. 20006
TELEPHONE 202 29e»030
TCLCX '*'»0376 CRDK
CABLE "rEEVLAW"
October 16, 1970
WW. HONTCOHCftV SMITH
MEMORANDUM TO THE SPECIAL COUUSEL TO THE PRESIDENT
Re; Milk Import Quotas
1. FACTS
The goal of the Administration is to limit
dairy imports to an annual level of one billion pounds
milk equivalent.
The American dairy farmer is faced in 1970
with growing, unrestricted imports of many dairy products.
This is not normal trade. It is an artificial commerce
consisting of a series of loopholes. -As fast as one loop-
hole is plugged foreign importers find another. The Tar-
iff Commission in a Seption 22 report to the President
dated September 21 and in a Section 332 report released
October 16, 1970 to the Ways and Means Committee confirms
this growing use of loopholes.
All unrestricted dairy imports cost the Govern-
ment money because they replace domestic commercial sales
and increase the quantity of dairy products that must be
purchased by the CCC under the price support program.
Until recent years dairy imports never had been
as high as one billion pounds milk equivalent. In 1966
imports rose to 2.8 billion pounds milk equivalent and
were running at an annual rate of 4 billion until limited
by President Johnson in 1967. (The Johnson Administration
also had the announced goal of one billion pounds milk
equivalent. It never met that goal.)
6329
- 2 -
Because the importers found so many loopholes,
imports in 1969 rose to 1.6 billion pounds, in 1970 will
exceed 2 billion pounds and in 1971 will reach 4 billion
pounds — the highest in history.
The Tariff Commission in its Section 22 report
recommends corrective action for four products. The Sec-
retary of Agriculture supports the Tariff Commission rec-
ommendation and has asked the President to implement it.
The dairy industry also wants it implemented.
The Tariff Commission in its Section 332 report
identifies two new very dangerous loopholes — "over 47^
cheese" and lactose.
II. CONSIDERATIONS
Dairy and dependent industries exist in every
state. These industries are particularly strong in the
Mid West and Border States, where we have tight races.
The cheese portion of the dairy industry in Minnesota
and Wisconsin is hard hiti The political impact of the
right kind of Presidential Proclamation will be inesti-
mably greater if the Proclamation is issued within the
next fev; days than if it is issued later. The longer the
delay, the more people in the dairy and related industries
will learn that the President is not following the well-
documented recommendations of the Tariff Commission. To
voters, there is no difference between a Section 22 re-
port v;hich formally recommends quotas and a Section 332
report which recites the facts as to why there should be
quotas but makes no formal recommendation due solely to
a technical statutory difference in the jurisdiction of
the Tariff Commission. As far as voters are concerned
the Tariff Commission has issued two reports calling- for
quotas on six items. All six items are vitally important
to the dairy and related industries.
III. RECOMMENDATION
The President should issue a Proclamation, just
as soon as possible and in any event in ample time for its
impact to be felt before the election, putting the recom-
mended quotas on all six items.
30-337 O - 74
6330
- 3 -
a; There is no problem in issuing a Proclamation
implementing the Section 22 Tariff Commission recommend-
ations as to the four items — so-called "ice cream",
certain chocolates, certain animal feeds, and low-fat
cheese.
b. There is only a very minor technical problem
as to issuing that part of the Proclamation relating to
the two Section 332 products — "over 47^ cheese" and
lactose. The Secretary of Agriculture must write a let-
ter to the President requesting this and the President
must direct the Tariff Commission to give him a Section
22 report on the subject (even though the Tariff Commis-
sion today issued a Section 33 2 report on the same sub-
ject) . Statutory authority for the President to issue
the Proclamation covering all six items is clear and
there is no need to wait for a Section 22 report on
"over 47^ cheese" and lactose.
Because the importers have discovered the
"over 47fi cheese" and lactose loopholes, the President's
Proclamation needs to cover all six items to be meaning-
ful. Although the long range economic impact on the
American economy might be almost the same if this six-
product Proclamation comes out the day after the election,
the political impact by comparison would be almost non-
existent. So, therefore, it is imperative the Proclama-
tion be issued before the election.
MEHsek
6331
TowNSEND Exhibit No. 2
ASSOCIATED MILK PRODUCERS, INC
LITTLE ROCK, ARKANSAS 72209
PHONE: 501 562- J 900 TELEX 53-6455
October 19, 1970
MEMORANDUM
TO: Harold Nelson
Dave Parr
FROM: Tom, Townsend
Attached are the meno and working papers which are currently being
circulated to Mr. Galbraith, Deputy Assistant Secretary, USDA; hfe?, Chotiner;
Mr, Colson; and two assistants to Mr. Colson - Mr. George Bell and Mr. Henry
Cashen.
The Tariff Commission's Section 332 report to the Ways and Means Conmittee
was released at 10:00 A.M. Friday, October 16, 1970. Although this report
does not contain recommendations, the facts clearly indicate a very favorable
case for restricting imports of "over 47^ cheese" and lactose.
Mr. Harrison and I visited with Mr. Galbrmth last Friday afternoon,
October 16, 1970. Galbraith indicated that there would be no problem with
the Department in terms of obtaining favorable recommendations for reconmending
Section 22 action by the President on "over '+7<t cheese" and lactose. Mr.
Galbraith told us that Secretary Palmby was visiting with the State Department
Friday afternoon concerning dairy import quotas.
The biggest difficulty that I see is catching Secretary uardin- "to write
the Section 22 letter to the President, and then catching Chuck Colson for a
long enough period to get his attention so that he will bring the matter before .
the President. Lynn Stalbaum is contacting Congressional people to get them to
send telegrams to the Secretary, urging prompt action as a result of the 332
report, Harrison will be contacting Galbraith today, and Galbraith will brief
Phil Campbell when Campbell returns tomorrow (Tuesday). Chuck Colson is
travelling with the Pi>esident, but Marion will be in touch with Mr. Bell and
Mr. Cashen today or tomorrow morning, urging prompt Presidential action. My
best guess would be that the President will announce a favorable decision in
the Midwest (possibly Kentucky) the middle of next week.
In addition to the attachments, each of the people previously named have
copies of our tVhite Paper, the Tariff Corrmission Section 22 report, the Tariff
Commission Section 332 report, and a revised sumnary of recOTimended dairy
import program dated October 15, 1970,
TT/bbc
6332
TowNSENfD Exhibit No. 3
February 24, 1971 Associated Dairymen, Inc.
THE DAIRY INDUSTRY AND THE PUBLIC INTEREST:
• THE NEED FOR A PRICE SUPPORT INCREASE
The U.S. dairy industry has led the agricultural sector of our
economy in organizing so as to better serve both producers and con-
sumers.
The Federal Order program has been an effective means of orderly
marketing of dairy products and of assuring the public an adequate supply
of pure and wholesome milk and milk products.
In recent years, dairymen have further improved their efficiency
through the consolidation of many small and often inefficient cooperatives
into more effective regional cooperatives.
The development and operation of the standby pool has made it
possible for milk producers in surplus areas to share equitably in the
proceeds from the higher class I markets.
Despite this progress, the economic stability of the dairy industry
still largely depends upon the income floor provided by the dairy support
price for manufacturing milk. Dairymen have sometimes been able to
bargain for prices above the minimum. Yet they cannot depend solely
on this means of improving their incomes. Dairy farmers still can-
not precisely tailor production to demand. Thus, the level of dairy
income is still subject to shifts in consumption, to unanticipated
increases in dairy imports and to other factors that are beyond the control
6333
- 2 -
of the individual producer.
The dairy support price for the marketing year beginning April 1,
1970 was set at $4 .66 cwt -- or 85 percent of parity at that time.
Increased costs since April 1, 1970 have now reduced the parity ratio
for milk to 81 percent. And, unless the Government takes remedial
action, inflationary pressures in prices paid by dairy farmers will reduce
the parity ratio to even lower levels.
Public interest would best be served by a support level of 90 percent
of parity or an estimated $5.35 cwt, for the year beginning on April 1,
1971. Both consume-'s and dairy farmers would benefit. The industry
would have the stability needed to deal effectively with anticipated pro-
duction and consumption patterns foreseen for the 1970's.
There are compelling reasons for such an increase:
1) A stable and adequate supply of milk is critically important
to the health and welfare of the people of this nation.
2) Adequacy and stability of dairy supplies are threatened by
sharp acceleration in the downward trend of milk production.
Severe and irremediable contraction in the dairy industry
would be catastrophic in impact upon consumers and upon
the national economy.
3) Despite recent milk price increases, average income to dairy ~
farmers still remains extremely low. Dairy producers are now
6334
- 3 -
faced with a harsh and continuing cost-price squeeze that
can be mitigated only by adjustment of the support price level.
4) Establishment of the support level at the legal maximum of
90 percent of parity is needed if there is to be an orderly
adjustment of milk output to milk demand during the 1970's.
5) The contribution to the national interest of an increase in the
support price to 90 percent of parity would far outweigh its
relatively minor adverse impact.
a) The Federal budgetary impact will be fully consistent
with budget commitments of previous years. Stocks
acquired by Government can be used effectively in pro-
grams to which there is firm national commitment.
b) The price support increase would not cause substantially
increased prices to consumers, nor would it provoke
inflationary price pressures.
6) An increase of price supports to 90 percent of parity is critically
needed in order to further dairy industry' "self-help" activities
that can lead to eventual termination of price support assistance.
I. A stable and adequate supply of milk is critically important
to the health and welfare of the people of this nation.
Milk is one of our most basic foods. A sound dairy industry is.
6335
therefore, vital to the nutritional welfare of our nation.
Milk and dairy products, excluding butter, provided the following
1/
components of consumer diets during 1968:
22 ,6 percent of the protein supply
13.5 percent of the fat supply
76.2 percent of the calcium supply
36.7 percent of the phosphorous supply
9.9 percent of the riboflavin supply
11.8 percent of the Vitamin A value
1.7 percent of the niacin supply
4.7 percent of the ascorbic acid supply
2 . 2 percent of the iron supply
7.2 percent of the carbohydrate supply, and
11.8 percent of the food energy supply.
Virtually every developed country has a national policy assuring >
adequate returns to its dairy farmers in order to assure an adequate and
stable supply of milk and dairy products for their consumers. Such assis-
tance often includes subsidies — both for export and domestic consumption —
and even direct financial assistance in maintaining a stable dairy cow
population.
The European Community promulgates price guidelines for butter
and non-fat dry milk and, when necessary, the Community sets "inter-
vention" prices, to assure adequate income to its dairy farmers. Australia
has a support price program for butter and cheese. Denmark has a two-
price marketing plan through which consumers pay prices that return
1/U.S.D.A, "Agricultural Statistics" 1969, Table 805.
6336
enhanced income to producers and facilitate exports. The United
Kingdom supports the price of milk used for fluid purposes and also sets
prices for manufactured products to yield a blended pool price that will
assure adequate domestic production. Canada supports dairy prices.
New Zealand subsidizes milk consumption.
Recognizing the nutritional importance of dairy products — par-
ticularly for children — the United States has for many years undertaken
to insure that we shall always have an adequate and stable and dependable
supply of milk. There can be differences as how best to achieve this
national objective. No one disputes the national purpose to assure that the
dairy industry will remain economically viable. Accordingly, there is cause
for national concern when continued deterioration in the economic condition
of the dairy industry threatens this national goal.
II. Adequacy of milk supply is threatened by acceleration of the
downward trend in milk production through a severe con-
traction of productive capacity.
To maintain an adequate supply of milk and dairy products for the
growing population of the future requires protection against sudden and
sharp decline in productive capacity. During the past 20 years, there
has been a steady and continuing decrease in the number of dairy farms.
6337
This contraction of numbers is expected to continue. This trend is
summarized in the following table:
Number of U.S. Farms Selling Milk and Cream
Year (Thousands)
1950 1,959
1955 1,475
1960 1,032
1964 641
1969 400^
1980 200^
Thus, there ai-e now only 400,000 dairy farms in this country.
Four- fifths of the dairy farms operating in 1950 have gone out of business,
The Department of Agriculture considers that in 1980 there will be only
one-tenth as many dairy farms as there were in 1950.
This contraction has not simply been a consolidation of dairy herds
into larger farms. The number of milk cows on U.S. farms has also
2/Dairy Situation, September 1969, p. 29, U.S.D. A. estimate.
3/Dairying in the 1970's. Anthony G . Mathis, Agricultural
Economist, Economic Research Service, U.S. Department of Agriculture,
DS-329, March 1970, p. 30.
30-337 O - 74 - 32
6338
4/
been declining sharply.
In 19 50, there were almost 22 million milk cows on
American dairy farms.
By 1970, this number had decreased by nearly 10 million
cows to a total of 12.5 million.
By 1980, milk cows on farms are expected to decrease by
another one-third or some four million cows, to a total of
eight or nine million.
Decreases in cow numbers have been offset in part by increases
in milk production per cow. Thus the decreases in numbers of farms
and cows does not always mean an absolute reduction in milk production.
In the early years of the downtrend in numbers, offsetting increases in
efficiency have tempered its impact upon output. Yet efficiency gains
are increasingly hard to come by. As the number of cows decreases, capa-
city to maintain aggregate output becomes more difficult. Dairy cows
cannot be replaced quickly and inexpensively and it is increasingly difficult
to increase output per cow.
All of these factors are reflected in the steady downward trend of
milk production during recent years. It is a remarkable fact that 1970
milk production of 117.4 billion pounds was no higher than the production
4/See Exhibit A and Mathls, ibid.
6339
SMOO iO av3H Nomiw
V xiaiHxa
6340
level of 1950 -- despite the expansion of the American economy.
Moreover, annual production of milk has declined from the 1964
high of 127 billion pounds by approximately 10 billion pounds in the
past six years.
U.S.D.A. estimates indicate that output rose slightly in 1970
to 117.4 billion pounds, or about one percent above the 1969 output.
This is tlie first time since 1964 that milk output deviated from its pro-
longed downward trend. Even so, the sustained decline in production
6/
per capita continued through 1970.
A number of factors -- such as exceptionally good weather con-
ditions and deterioration in pork and beef prices — contributed to this
slight increase. Moreover, the general slowdown of the economy during
1970 provided less off-farm employment opportunities for dairymen who
might otherwise have quit dairying. It also provided sources of labor for
those dairymen who wanted to expand production.
Ignoring possible statistical errors in estimating 1970 output,
sustained increase in annual production is not foreseen by the Department.
High economic growth will eliminate the causes for the slight upturn in
1970. General increases in wages and other costs will generate increases
in dairy farm wage rates and other production costs. Currently rising
dairy cattle prices are again inducing close herd culling. As unemploy-
ment rates decline, off-farm employment opportunities will attract dairy
5/ See Exhibit B.
6/ See Exhibit C.
6341
EXHIBIT B
Milk Production
and
Per Capita Milk Production
(U.S. 1960-1970)
1/
2/
Year
Total Milk Production
Per Capita Milk Production
(Million Pounds)
(Pounds)
1960
12 3,109
681
1961
125,707
684
1962
126,251
676
1963
12 5,2 02
661
1964
126,967
661
1965
124,173
638
1966
119,892
609
1967
118,759
597
19 68
117,234
583
19 69
116,345
573
1970
117,436
572
Sources: 1) Dairy Situation, November 1970, p. 6.
2) Milk Production SRS US DA February 1971, p. 6.
6342
/
/
-^
CT) _^
2 2
O XiaiHX3
6343
- 9 -
fanners and dairy labor. All of these economic factors are likely soon
to reverse the 1970 increase in production and to resume the long-term
downtrend projected by the Department. Indeed, U.S.D.A. economists
consider that, by 1980, milk production could fall below 110 billion
7/
pounds. Thus, there is standing danger that sharp contraction of
output could occur, with major injury to consumers and to the national
economy.
III. Despite recent milk price increases, average income
to dairy farmers remains extremely low and dairy
producers are faced with a continuing cost-price
squeeze.
The reasons for the sustained downtrend in production are not hard
to find. As in any industry, dairy farmers must have sufficient income
incentive if they are to remain on the farm. They must have reasonable
prospect that they can produce and market milk at prices that will yield
reasonable returns for their work and investment.
These fundamental conditions do not exist today for many daiiy
8/
farmers. The statistics tell the story in vivid terms;-^
From 1952 to 1970, the wholesale price of milk increased
by only 17.3 percent.
7/Mathis, supra, p. 32
8/See Exhibit D.
6344
INDEX OF EXHIBIT D
PRICES PAID BY
FARMERS FOR
PRODUCTION ITEMS PRICE OF REAL PER CAPITA
INTEREST, TAXES ALL MILK DISPOSABLE
& WAGE RATES WHOLESALE 2/ INCOME 3/
(DOLLARS)
1,641
1,697
1,693
1,786
1,841
1,838
1,818
1,877
1,879
1,203
1,958
2,002
2,109
2,213
2,298
2,360
2,425
2,434
2,470
Percent change 1952-1970 17.3% 50.5%
\
2/ Dairy Situation, November 1970, Pg. 10 and other issues of Dairy Situation
3/ Dairy Situation, November 1970, Pg . 13.
(1957-59 - 100)
1952
100
1953
95
1954
95
1955
94
1956
94
1957
97
1958
100
1959
102
1960
103
1961
104
1962
106
1963
108
1964
108
1965
111
1966
116
1967
119
1968
123
1969
131
1970 (Prel.)
136
PRICE OF
ALL MILK
WHOLESALE 2/
(DOLLARS)
4.
,85
4.
,32
3.
,97
4,
.01
4,
,14
4,
.21
4.
.13
4,
.16
4.
.21
-^
.22
4.
.09
4,
.10
4
.15
4
.23
4
.81
5
.02
5
.24
5
.49
5
.69
17
.3%'
6345
- 10 -
Prices paid by farmers for production items Increased by
36 percent. Currently, production cost increases are out-
stripping price increases. Under present conditions,
further production cost increases appear to be inevitable.
During these years, real per capita disposable income
for all U.S. wage earners rose by 50.5 percent. There
is little wonder that dairy farmers have sought better
opportunities .
As a percentage of parity, average prices paid for all milk sold
to plants are now lower than a year ago. In January 1971 the average
price of all milk amounted to only 81 percent of the parity equivalent as
compared to 82 percent in January 1970.
At the end of 1970, the Index of Prices Paid by Farmers was up
nearly 5 percent above the previous year. The Index of Prices Received
by Farmers was up only 3 percent. The percentage increase in prices paid
for manufacturing grade milk was greater than for fluid milk, due largely
to a relatively strong market for cheese. Prices for cheese may not in-
crease as much during 1971 as in 1970, while milk production costs can
be expected to increase at least as rapidly as in 1970.
Some of the production items that have increased dairy farmers
costs are reported in February 1971 "Farm Cost Situation" as follows:
6346
- 11 -
Farm wage rates in 1970 were nearly seven percent above
1969,
Farm machinery and equipment costs were six percent
higher in 1970 than in 1969, but will likely be greater in
1971.
1970 interest cost on real estate debt rose seven percent
above 1969, while interest cost on non-real estate debt was
up 18 percent.
State and local taxes on farm real estate in 1969 increased
by 11 percent over 1968,
Insurance related to farm production is expected to increase
in cost by about ten percent in 1971,
Herbicide costs have increased by 50 percent from 1964 to 1968,
If herbicide use is reduced, as expected, due to anti-pollution measures,
crop production costs will be increased through increased cultivation and
lower yields .
A significant feature stressed in the February 1970 Farm Cost
Situation is that purchased inputs were three-fourths the total in 1969 _
whereas they were less than one-half the total in 1940, This means that
fanners are Increasingly vulnerable to price increases in the commercial
market for purchased inputs.
6347
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6348
- 12 -
The single most important expense item for dairy farms is the
concentrate ration fed to milk cows. The key indicator of the relation-
ship of feed prices to returns to dair^' farmers is the milk-feed price
ratio. This ratio indicates the number of pounds of concentrate ration
which can be purchased with the value received from one pound of
9/
milk sold to plants and dealers.
As feed prices increase without a corresponding increase in
milk prices — such as we have witnessed the past six months — the
milk-feed ratio is lowered. This is a prime example of the recent
and continuing cost-price squeeze on dairy farmers.
Corn is a major component of the dairy ration. The cost of con-
10/
centrate rations has increased rather dramatically since July of 1970.
The corn blight crisis, and the resulting increase in feed grain prices has
definitely affected this cost increase.
Accordingly, as this ration value has increased, the milk-feed
price ratio has been diluted to its lowest January level since 1968,
With further indications that the corn blight may have further impact in
19 71 which vrould further increase the cost of dairy rations, an upward "
adjustment of at least 30 cents per cwt in the milk price is needed to off-
set just this one cost increase.
9/See Exhibit E.
rO/See Exhibit E,
6349
- 13 -
The special hardship to dairymen that is caused by the downward
slide of milk prices as a percent of parity is compounded by the fact
that dairying is more labor intensive than most farm enterprises.
. The labor intensive nature of dairying. is demonstrated by the table
in Exhibit F., More labor is used to generate $1000 of cash receipts in
dairying than in nearly all other enterprises for which U.S.D.A. reports
such data .
Further, more operator and family .labor is used to generate $1,000
.of incorre than in mos.t other farm enterprise.s . This is partly because a
high qualiti' of labor is required for a productive dairy farm. Such labor
tends to be relatively scarce and high-priced even in times of high
unemployment because the quality of labor required by a dairyman is also
likely to be demanded by industrial enterprises.
Because of predictable increases in costs of production, milk
prices as a percentage of parity — and therefore real income levels —
will continue to slide downward for the next two years unless the price
support level is increased. The upward trend in costs of production of at
least 5 percent per year will continue at its present rate during 1971 and
1972. Indeed, a review of major items suggests that annual rates of
increase may go even higher than 5 percent during those two years.
Recent history indicates that when dairy farmers finally respond
6350
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6351
- 14 -
to sharply unfavorable price relationships they often do so through
massive exodus from farming. The ultimate cost of repairing such a
sharp dov/n swing could be much more than the relatively modest price
increases that would avert large-scale exit of resources out of dairying.
IV. Maintenance of the support level at the legal maximum is
needed to provide for an orderly adjustment of rnilk output
to milk demand during the 1970' s.
There is no real disagreement between the dairy industry and the
government as to the basic economic conditions that will face the industry
during the 1970's. There will be sharp and continuing contraction of the
industry.- There Vi?ill be fewer commercial dairy farms, fewer cows,
higher capital costs and a higher proportion of paid labor and other
purchased inputs. While number of cows per farm will rise, aggregate
milk production will continue to decline. Indeed, the U.S.D.A. forecasts
that the "dairy surplus will fade" during the 1970's if price supports were
11/
maintained at the present level.
We differ Vvfith this analysis only in degree. The surplus may well
disappear, but the productive capacity to meet the needs of the nation for
milk may also disappear. We believe that probable U.S.D.A. estimates
of milk production place too little regard on the price-cost factors that can
11/ See Mathis, supra.
6352
- 15
hasten production declines. We consider that consumption estimates
are unduly pessimistic.
Our estimates of U.S.D.A. projections for 1971 both at the present
price support level and at 90 percent of parity are compared with estimates
derived by Associated Dairymen in Exhibit G.
The U.S.D.A. projects substantial decline in dairy production over
the next ten years at current levels of price support and government
acquisition of stocks. Therefore, it is unrealistic to believe- that the
proposed 1971 support price of 90 percent of parity would have dramatic or
sustained effect upon U.S.D.A. projections. For example, average milk
prices rose by $1.30 per cwt. during the 1960's. Gross dairy farm
income rose by $1.5 billion. Yet, production trended down because net
income to dairy farmers was still among the lowest in the economy.
Dairy incomes are still at distress levels. Prospective cost in-
creases indicate little prospect for improvement. Given adequate and
stable income, production will continue to shrink and surpluses will
indeed vanish. These are the basic trends.
The challenge is so to manage this downward trend as to serve the
national interest — to provide an orderly adjustment of milk output to
milk demand -- and to avert sudden shrinkage that bankrupts producers
and deprives consumers of adequate supplies at reasonable prices. Indeed,
6353
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iH rH
rH
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rH rH
r-t
rH <
o u
to M O
(^ K) -H -H C to
a Cr^ -ij c oj j->
(D c > ^^
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r-i 10 t< bOM D.
tH lU c) II) G
s ^j &: ca M
(ti -H C
>>
-rt i;> bO
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o
fH <u ai
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-U M
o iiaiHxa
6354
- 16 -
the prevention of such liquidation and the assurance of orderly adjust-
ment are major objectives of the price support program.
The level of price support set for the 1970 marketing year cannot
fully assure against the threat of such costly and irreparable liquidation.
It is not even certain that support at the maximum statutory level of 90
percent will fully serve the intent of the Congress in defining milk as
a mandatory price support commodity. But it is clear that this level is
needed now if the intended objectives of the program are to be achieved.
V. An increase in the support price to 90 percent of parity
would not have adverse public policy consequences sufficient
to offset its contribution to the national interest.
In weighing the need for higher support price, there must be
consideration of likely impact upon production, consumption, prices
and net Treasury costs.
A. The Federal budgetary impact would be consistent with
budget costs in previous years and stocks acquired by
the Government could be used effectively in programs
to which there is a national commitment.
We estimate that milk production in calendar 1971 will not exceed
118.2 billion pounds if the price support goal is set at $5.35 or 90 per-
12/
cent of parity.
Supply elasticity coefficients in use some years ago are no longer
12/ See Exhibit G .
6355
- 17 -
valid. Farmers do not now respond to milk price increases with production
increases as they did prior to 1965. As example, the $1.26 increase in all
milk wholesale prices from 1965-69, an increase of 30 percent, was
accompanied by a milk production decline of 6.4 percent.
We also estimate that commercial consumption in 1971 will be not
less than 109.3 billion pounds if support prices are set at 90 percent of
parity .
Population will increase in 1971 by more than two million people.
Per capita disposable income should be higher. The March, 1970, Dairy
Situation points out that increases in per capita disposable income of
about four percent per year can be expected.
The November, 1970, Dairy Situation states that commercial dis-
appearance of milk in all products turned upward in the third quarter of
1970 by about one percent, and that sales for 1970 are likely to be near
the 1969 total of 109 billion pounds of milk equivalent. This demand
strength should be maintained in 1971, even with the proposed increased
support price, as a result of the stronger economy, the larger population
and increased sales promotion by producer groups, using newly authorized
pool funds in Federal order markets for this purpose.
Given these production and consumption estimates, projected CCC
purchases during calendar 1971 — assuming an increase to $5.35 cwt. —
6356
- 18 -
would be 5.4 billion pounds as compared to 5.8 billion pounds in 1970.
The budget cost would be approximately $324 million as compared to
$331 million in 1970 — a level consistent with previous budgetary commit-
ments to this program.
Of course, it may be argued that budgetary costs would be even less
if the price support were set at a lower level. But this "savings" would
be achieved at the expense of denying the necessary minimum income level
for dairy farmers to be able to assure an adequate supply for the dairy
consumer. The nation would forego the benefits of long-term stability and
incur the costs of long-term dislocation of productive capacity. This is
too high a price to pay. It is much too high a price to pay when regard is
given to the need for dairy products in programs for which there is already
firm national commitment.
B. Price support at 90 percent would not cause substantial
consumer price increases nor would it provoke inflationary
price pressures .
This needed price support increase would not be at the expense of
substantially higher consumer prices.
Present market prices for milk and dairy products are above the
"price floor" of $4.66 established by the support price announced April 1,
1970. Thus, increase to 90 percent would not increase farm or consumer
6357
- 19 -
prices hy as much as the increase in the support level.
Dairy farmers have increased productivity at remarkable rates since
World War II. They have not shared equitably in the returns for such
productivity. In fact, real wage costs of dairy products have decreased
dramatically. Yet, these efficiency gains passed onward to consumers
have not been paralleled by comparable increases in real income to dairy
farmers .
The sharp declines in real wage costs of milk are set out below:
1950
1955
1960
1965
1967
1968
1969
As the House Com.mittee on Agriculture states it:
Man Hours Required
to Produce 100 Pounds
of Milkl^/
Pounds of Annual
Milk Production
per Cow 11/
2.36
5314
1.97
5842
1.42
7029
1.04
8304
.88
8797
.82
8992
.77
"9166
H/
13/ Derived from Changes in Farm Production and Efficiency, USDA
Statistical Bulletin No. 233, June 1970, Table 14 and Dairy Situation,
Nov. 1970, Table 2 with Revised Estimates for 1968 and 1969.
14/' Food Cost - Farm Prices, "Re port to House Committee on Agriculture
June 20, 1970.
6358
20
"One hours work in a factory buys more food today than it did
20 or 30 years ago. Pay for one hours factory labor would buy:
MILK: (Deliv) 10.2 quarts in 1969
6.5 quarts in 1949
5.1 quarts in 1939."
With these efficiency indicators, a valid case cannot be made that
an increase in the support price to 90 percent of parity would generate an
inflationary effect in real wage terms .
The average price in December 1970 was $4.96 per cwt. for manu-
facturing milk of average butterfat test of 3.80 percent. The 90 percent of
parity price proposed is approximately $5.35 for milk of average test for the
year. Allowing for the difference in butterfat test of approximately 0.12%,
the proposed increase over the December 1970 level would amount to about
47 cents per cwt. for manufacturing milk.
This 47 cents would not be reflected in its entirety in the cost of all
milk sold to consumers. Approximately 50 percent of total marketings of
milk is used for fluid purposes. Much of the fluid milk supply is priced
under formulae reflecting factors other than manufacturing milk values.
Other fluid milk prices based , directly on the Minnesota-Wisconsin manu-
facturing milk series values, are currently higher than the minimum Federal
order price. Such milk being sold at premium prices will not automatically
reflect the higher values for manufacturing milk established by the 90 percent
announcement. The average price of all milk wholesale could be expected
to Increase by approximately 6 percent from its January 1971 level of $5.98
6359
- 21 -
to $6.34.
The American consumer has not paid a disproportionately high price
for milk. As noted, the real v.;age cost of milk has fallen sharply. Further,
increases in money prices for milk at retail have been substantially lower
than for all foods or for all consumer goods. The consumer price index
(1957-59 price = 100), .shows the following relative price increases at the
15/
end of the third quarter of 1970. — '
The overall consumer price index was 135.0
The retail price for all foods was 132.3
The retail price for fluid milk was 12 6.6
Thus, milk has been a "good buy" even during this inflationary
period. In the balancing process between the consumer interest in
reasonable prices and the dairy farmer's need for an adequate return,
the consumer has continued to fare well in the market place.
One note of caution: There i_s_a continuing danger to the consumer
interests. Price instability causing losses to dairy producers could
generate drastic and prolonged dislocation of production and of productive
capacity. Such dislocation could in turn generate drastic and prolonged
increases in consumer prices.
15/ Sec Exhibit H .
6360
EXHIBIT H
COMPARISON OF INDEX OF AVERAGE RETAIL PRICES FOR MILK (GRO);
INDEX OF AVERAGE PRICES FOR ALL FOODS AND CONSUMER PRICE
INDEX, BY YEARS, 1950-70^
YEAR
Fluid Milk^
(Grocery)
y
AlK
Foods
Consumer
Price
Index^
1950
81.8
85,8
83.8
1951
90.7
95.4
90.5
1952
' 95.2
97.1
92.5
1953
94.1
95.6
93.2
1954
92.1
95.4
93.6
1955
92.3
94.0
93.3
1956
95.1
94.7
94.7
1957
98.4
97.8
98.0
1958
100.3
101.9
100.7
1959
101.3
100.3
101.5
1960
103.7
101.4
103.1
1961
104.0
102.6
104.2
/
1962
103.5
103.6
105.4
1963
103.0
105.1
106.7
19«4
103.3
106.4
108.1
196S
102.8
108.8
109.9
1966
109.4
114.2
113.3
1967
113.8
115.2
116.3
1968
118.5
119.3
121.2
1969
121.8
125.5
127.7
1970
126.6^
132.3^
135.0-3/
jy Source: "Dairy Situation" November 1970, Page 13.
2/ 1957-59 = 100
3/ Nine Month Average
6361
-12 -
Thus, consumer interest is best served by stable prices at adequate
levels. This is why support prices are of benefit to consumers. The
f^.qi'estsd s"ppcrt level will assure feirm income that is reasonably related
to prevailing and projected farm production costs. Assured farm prices for
milk can assure stable and equitable prices for consumers.
VI. An increase of price supports to 90 percent of parity is needed
to maintain dairy industry "self-help" efforts so that price
support assistance may eventually be terminated .
No dairy farmer wants to be permanently dependent on the government
for part of has income. In recent years, regional dairy cooperatives have
been formed to bargain for better prices, to enhance efficiency of dairy
operations, and to assure more dependable dairy supplies. These cooperatives
are instruments of "self-help" in the best sense -- and they represent the
best opportunity for eventual termination of price support programs.
But the dairy industry is still in a state of transition. Still unable
fully to tailor production to demand, it must depend upon a "price floor"
to maintain the returns needed for maintenance of adequate production
capacity. With incomes still among the lowest in the economy, support
prices must be set at levels that will counter inflationary pressures and
cost increases if the industry is to reach the self-sufficiency that is now
in view.
As the dairy industry "comes of age" through price bargaining, marketing
6362
23 -
activities, product research, nutritional education and improved
organizational techniques, it is essential that dairy prices be maintained
at tenable levels. The alternative is a permanent and growing dependence
on the government as dairy price levels sink below the minimum necessary
to sustain the individual producer.
Thus, an increase in the support price to 90 percent of parity is
important — not only to assure adequate long-term supplies, to provide
a more equitable income level, and to assure an orderly adjustment between
production and demand — but to realize the potential for a fully self-
supporting industry.
*****
For these reasons, we submit that an increase of the support price
to 90 percent of parity will best nerve the interests of our nation in 1971
and in the years ahead.
6363
TOWNSEND ExmBIT NO. 4
/*r>«-»^ //p, <?^
•^eoo
l^y-l
Ceiilrci H-ni-it Hi
.t:n;: Ii.-.lri:cli:.iv::
Inlc.onice f.-r
,<— dial toiic— <li;il llie 5-(!i:il i
Uiul..
r f,r
the r.(;.iKMi f
cairctl.
For inccn.lr-; c
nils— dial 22 i.!us llic 5-<',;;i( i;i
iv.I,or
SZd CONGRESS
TEIlIPORi;.RY TSLEPKONE DmECTCSY
UNITED STATES HOUSE OF EEPRESEr^TTATIVES
REPRESEKTATIVES
T/. PAT JENNINGS
Tdcphont
Kftnic No.
i-\'X Abbilf, 1\'atk!ns M. CV'^n.)-- 5C3G5
^i--f^M><'fnc\hy,'r\\o-M'.iG. (Mis^.)-';^--- 55S7C
'" Abourczl;, Jnmcs (S. Da!:.) 551C.T
Abziig, Bella S. (N.Y.) 556S3
Ador.i.^ BiocV. nVns'.i.) 53105
Addiibbn. Jo.-^eph ]'. (N.Y.) 631C1
/^Xyiiuerl, C.ul (Okl.-..) /O .'JJ.'IC.S
p^}f Alcxaiulrr, Bill (.\rk.) O.l. 5107(1
Aiiclcrsoii, Glnm M. (Cnlif.) 5GG76
>C\'>l7i<'f.-V'c"i, Jo.'</: 7i. (111.) 55G7G
K>tAntlcv50ii,AViHi;\ir. 11. (Tciui.). C... 52811
/v./ktidiews, George W. (Aln.) S^-!?.?
y!r.rf)cu-,5. .a/crt (X. DaU.) _ _ . 5.^.61 1
Aniiunzio, Fi onk (111.) f 5CGG1
yj./lrc/.cr, iW (Te.\-.)_-: Ci 52571
y4rc;K/s, ;.c.-;f.-f. C. (111.) /. 52MG
AsUiooh, Join M. (Ohio) ._._ oGiSl
Asl.lcy, Tl)onin?;L'(01iio) 5114G
){)(,As.i>in,ljC?i (Wh.) 5^... 5303)
A.spisinjl, Wayne N. (Colo.) 54131
Badillo, Ilcnnaii (N.Y.) 513G1
rcf^ yjMcr, Ln^fcr p-onn.) 532V1
Bniii.j;, AA'aKoi- S. (Ncv.) 55SC5
Barrett, ■Wniinm A. (I'n.) 51731
Xa'B-"S"'"1'. -^''<;I; (.Masica)...- SSTCS
X/J'W.CJ', /Vjf (0!;la.) 52.?I1
}:dl,M],l,o,izo (Calif.) 5Ci51
Ber,..ct(, Charles R. (Fla.)... 5.2.^01
X/i)'erj;lan.l, Bob (Minn).... O. 52IG5
Ikih, JncKsoii E. (Ohio) . _ 53SG.")
>xBcvill, Tom (Ala.) 5.1.SVG
Biagsi, Mario (X.Y.) ^ 52-5C{
BicsUr, ICdrcrd C, Jr. (I'n) 512VG
Name
2209 Bin^liani, .Ton.'vthan B. (N.Y'.).
2371 ){r>i<icHuin, ncnjamin B. (Ga.)..
, SOS'V; Bhi.ann, Ray (Tcmi.)
lEOG^V'Blatuil;, John A. (.Minn.)
43G )(J'.o£gi.lW,<:(Ln.)
2-l'iO Boland, Bdv.-a.'-u P.. (Mass.)
K-liS !;>'B(5lling, Bichard (Mo.)...'.
IIG Bow, Fianh T. (Oiiio) .
1132:xX3iiadcinns, John (Ind.)
1101 Braseo, Frank J. (N.Y.)
31G B:vii, WilliaT^i G. (Ind.)
ZiGG XBrinkley, Jnek (Ga.)...
4C9 XWJiooks, Jack (Te\.)
1224 Bioamfuld, ^Villir.m S. (Mich.).
1G08 KBrotzinan, Donald G. (Colo.)...
f.30G Brown, Clan ncc J. (Ohio)
20G Brov;n, Gurnj (Mich.)
2427 rjircyh Vl, Ja n:a T. (N.C.)
615 XBroi/hill, Jod T. (\'a.) -.
2313 VsBjcliai.an, John (Ala.)
510 Biulc, J. tkrhcrl (Fla.)
lUG - Biivke, Janios.A. (Mass.)
2-134 "/^BiulcBon, Omar (Tex.)
230iy.;{Buili.son,Bill D. (Mo.)
J210 Burton, ]'liil!i|> (Calif.)
2-1G2 Byrne, Juinc> A. (I'a.) .-,.
\nr<y^Biif,us,Joh:, W. (\Vi.--.)-..:-.\
2113 Byron, Gof^rlloe E. (Md.)
Cabell, Karle (Tex). 7.
y.Caflerv, I'atricI; T. (La.)
VvCa;;.;,, >/,« N. } laj,],:/ iOhh.) .
Carey, Hni;h L. (N.Y.)
Carney, Charl.s J. (Ohio)
lOOS
2310
1207
1221
32o
Tclcphoni
No.
54411
54272
..a 570R''.
_.£ 5C211
SG53G
..., 55G01
. 0 54535
52S7C
5301.5
55471
5227G
. 55S0I
<7j.. 565G5
..'... 5C135
521G1
54324
53011
5257G
6513G
54S21
53025
53215
SGGOj
54401
5-ir,G5
52431
55CC.5
52721
52231
51031
555C.';
54 1 05
S52GI
-jO.
Tlooni
No.
133
1019
1005
2449
2207
2111
24C5
2ir;2
2134
405
2204
317
22,''.S
2135
4)3
212
404
244S
?;C9
1212
1127
241
23G5
133S
339
2412
22fiG
1730
4IS
21G
140 G
ICG
112.1
Issued 1
»i-oi 0-:
6364
%
HOUSE Q^ REPRESEKTATIVES
K.-..i,c No.
X'/^CarlM, Tim T^e (Ky.) SlCOl
W.X Cascj, Bob (Tex.)...- -W 559.51
Cahrlafl, Eljoid A. (Mii-.li.) 535CI
CcUcr, Einnniicl (K.Y.) 53531
Chamhcrlain. Charles h\ (Midi.).-.- 5ISV2
Chaiippll, Bill, Jr. (Fin.) S^IOSS
Chi.^liolni, SliiiU-y (N.Y.).. 5G231
Clancy, Donahl D. (Oliio) 5221G
Clark, Finn): M. (P.i.) 52oG5
Clausen, Don II. (C.ilif.) 53311
Cfawso", /)f/ (Calif.) S357G
Clny. ■\Villiu..i (IJill) (Mo.) 5240G
CUvda ml, James C. (N.Jl.) 55208
Collier, UaroU Jt. (111.)...., 545G1
Collin.s, George W. (111.).... .- 5500G
Collins, James-M. (Tc.x.) 64201
KCoImer, Wiliain M. (Miss.) 55772
Conablc, Jiarhcr n., Jr. (N.Y.) . 53G15
- 'Conic, Silrio 0. (Mnss.) 5b335
Conycrs, John, Jr. (Mich.) 5512G
Corlctt, Robert J. (Pn.) 52135
C6rdov!i, Jorge. L. (P.I?) 52G15
Connni), Jaim-s C. (Cnlif.) 55S11
Cotter, \Yi!liam R. (Conn.) 522G5
Coitamn, n. Lawrence. (Pa.) 5GI11
Gave, I'hilip M . (111.) 1 53711
TsJC Culver, John C. (low.-i) Q.- 52311
Xr^Danicl, AY. C. (Dan) (\'a.).-_. 54711
Danic!?;, Dominick V. (N.J.) 527C5
I P-t'"' Danielson, George E. (Calif.) 554C4
rL^-XX Vavis, Glenn 1!. (Wh.) 55101
^U- >( Davis, John W. (Ga.) y 52931
-—JiA '■c'" Gar7-.a, Eligio (Tex.) .{/ 52531
s^^Mu^ Dclnnev, James J. (N.Y.) 539G5
DellcniacJ:. John (Orcg.) 5G41G
Dellunis, Ron.-ild V. (Calif.) 57177
>^>^Denholrn, Frank E. (S. Dak.) 52801
X»en'i'5, Vavht 11'. (Ind.)r..' O. 53021
Dci.l, John II. (Pa.) 55631
. Derwinskl, lidward J. (111.) 539C1
Devinc.SamvelL.iOVm)..- - 65355
. •/^D^c1■.;nson,^yilliam L. (A\t^.).. 52901
Digg-s Charles C, Jr. (Mich.) 522G1
Dingell, John D. (Mich.) 54071
Donohiic. llnroUl D. (Mass.) 5G101
XXDorn, \Xm. Jennings Bryan (S.C.)3 5530!
Dow, John G. (N.Y.) 5377C
Dowdy, John (Tex.) 62401
X Downing, Thomas N. (\'a.) . 542G1
Drinan, RoherlF. (Mnss.)_ 55931
. Dulski, ThnddcusJ. (N.Y.) 5330C
Ko. Kftinc
1202 KYjJimcan.JohHj. (Tenn.)
2353 diiPont, Pierre S. (Pelc) (Del.)
2303 Dicyv, Florence P. (N.J.)
213G XXEckliardl, Boh (Tex.) O
2233 7^>^Edincml.son, Ed (Okla.) O
1131 Edwards, Don (Calif.)
123 X-Edwards, Edwin W. (Ln.)
23-!2 ){Edv;ard^,Jacl: (Ala.)
2238 Eilbcrg, Joshna (Pa.)
1035XXii>/f;iio;;!, John N. (111.)
227 Esch, Marvin L. (Mich.)
328 Eshhmnn , Edwin .D. (Pa.)
in2K>.'Evans, Frank E. (Colo.)
143G KEvins, JocL. (Tenn.)
lOO-I FasecU, Danlc B. (Fla.)
^Z\2ry,Findlcy, Paul (111.) .
2307 Fish, JJamilton, Jr. (N.Y.)
230 x;'>Fisher. O. C. (Tex.) ...O
239 Flood, Daniel J. (Pa.)
222 XFlov.crs, AYaltcr (Ala.)
24G7 >(^FIynl, John J., Jr. (Ga.)
3404 f^JPo\cy, Thomas S. (Wash.)
203 Ford, Gerald 11. (Mich.)
514 Ford, Willi.im D. (Mich.)...
33G . Forsylhc, Edv-in P. (N.J.) .
14C7 KFoimlnii,, L. H. (N.C.) .
107 XFrnscr, Donald .M. (Minn.) fJ.
1705 Frelinghvysca.PclcrH.n. (N.J.).._
2370-;.^y^Frcn;cl, Bill (Minn.) -O
1513 Frey, Louis, Jr. (IHa.)
2d54 F-uUon, Januc G. (Pa.)
172S };_>;^ruUon, Kichard H. (Tenn.)
319 F.Kum, Don (Tla.), O..
22G7 \Galifianaki5, Nick (N.C.)
l^l.'J Gallagher, Cornelius E. (N.J.)...Q-
Garmnlz, Edward A. (Md.)
Gaydos, Joseph M. (Pa.).
1729 1( Gctlys, Tom S. (S.C.)
2!30 Giaiino, Kobcrt. N. (Conn.)
Gibbons, Sam (Ma.) .^.
Golduatcr, Parry M., Jr. (Ciilit.)
Gonzalez, Henry )5. (Tcx.)...^
Goodling, Gcorye A. (Pa.).
Grasso. ElhiT. (Conn.)-.
22G5 jt^Gray, Kenneth J. (III.)
22oG Qrccn, Edith (Oreg.)
23S Green, AVii!ian> J. (Pa.)..
2301 XGrifln., Charles II. (.Mi=s.) -O-
2135 GrifTiths, Martha W. (Midi.)
500 MGross, n. II. (Iowa) . . .<?>
203 Groi-cr, James 71., Jr. (N.Y.)
1417
1321
1401
2^G2
204
24 G4
2210
"clciil.onc
Kooin
No.
No.
55133
117
541G3
1200
553C1
2421
54901
1741
52701
2402
53072
2422
52031
423
54931
137
54GG1
1139
53515
330
54401
412
52411
410
547G1
1.'27
54231
2300
5450G
21 CO
65271
21 G2
55441
153!
5423G
2 1 07
5G511
lOS
62GG5
327
54501
2335
5200G
J201
53831
H-230
562G1
125
547G5
331
64531
2188
54755
1111
57300
2110
52S71
1725
53671
1315
52915
21G1
54311
401
55235
434
52515
225
53S01
23-:
5C1G1
218?
54G31
103S
55501
341
53GG1
233S
5337G
430
54461
1421
5323G
2446
55836
1714
54476
513
55201
2372
54811
2441
5G271
112S
55SG5
1330
549C1
153G
53301
23 OS
53335
l.?31
6365
HOUSE OP REPRESENTATIVES
TclcplioiK
Nninc No.
Gubscr,Cha)!rsS. (Cnlif.) 52G31
Gitclc.GMnl (SU].). _.. 55311
yilnsnn, G. KllioU (On.) 55S31
Hnloy, Jnnu'sA. (Fl.i.) 55015
KK IMl, Dinuard G. (Mo.) - 5053G
Iloljiait, Scijmoiir (N.Y.)_.- 5253G
j(lInmillon, Lpc II. (IikI.). .O 55315
I^IIammcisdmidl, John Paul (Aik.).O 51301
Hp.nlcy, Jnmci M. (N,y.)..L 53701
•y^'Hnmin, Ttichaid T. (Ciilif.).: 52i)C5
H(iiis.en, Julia Bullcr OTnsli.) 5353G
Hansen, Onal (Id.-ilio) 55531
Hnningloii, Miclincl (Mass.) 5S020
JIarsU, Willicm 71. (Ohio) 55705
Hamy, James (.Mich.)_. __ 52S0G
mslinijs, Janus F. (N.V.). 531C1
Hn;lin\voy, 'Willinm D. (Mniiic) 5G300
H(iwki)i<;, Augustus F. (Cnlif.) 52201
Hays, Wnyiic L. (Oliio) 5G2G5
y.ncbcil.F. Edward Qm.) 53015
)Iccldci, Ken (W. Ya.) 53152
Herf.-kr, i\/airi(irct ?J. (Mass.) 51335
Hehtosl;!, Ilcnvy (N.J.) 550G1
Xjlendrrsoii, David N. (N.C.)-..: 53U5
nicks, Floyd V. (Wasli.) 55S1G
Hicks, ].oui-:c Day (Mass.) 58273
^'X W'fti, E/iiow/ (lad.) .- 55037
Uogan, Ixiurcncc J. (Md.)... 54131
llolificld, Clipl (Calif.) 53976
Horlon , Fianh (X.Y.) 5401 G
Hosmci; Ciaio (Calif.).. 62415
TToward, James J. (N.J.) 54G7I
>LKnull,AV. R., Jr. (Mo.) 570-11
f-XJfuiisalc, \Yilliam L. (Mo.) G' 5235C
llunl, John E. (N.J.) 5G501
IIvtchinson.EJvaid (Mich.) 537G1
KXIchoid, Richard II. (Mo.) Q 55155
Jacobs, Andrew, Jr. (Ind.) 54011
Jarmnn, John (Okla.).. 52132
. Johnson, Jilberl 11'. (Pa.).. 55121
Johnson, Harold T. (Calif.).. 5307G
y- Jonas, Charhs napn (.\.C.).. 5347G
>^X Jones, Ed (Tenn.).. .O- 54714
>=v)onc.s, Robert E. (Ala.) 54801
T\Joiic.s, AVaher ]5. (N.C.) 53101
KAKRrl,h, Josepli )^. (Minn.) Cj 5GG31
Jl; yiCnstcnincier, Robert W. (\Vis.)..<0 5290G
XXKazen, Abraham, Jr. ('l'c.\.) O. 54511
Kcatlnt), WilHainJ. (Ohi.,)_ 531G1
KcK, James (W. Va.) 5217G
Kcillt, JJaslhi'js (\fass.).. 63111
Itonm Tclopl.onc Room
No. Name No. No.
2373 Kcmp.JaclcF.i^i.X.) .55205 1229
332 Kinq, Cailclon J. (K.Y.) 55GI5 2245
•2443 i(Kluc/,yn.ski, John C. (III.)-.. .55701 2302
123G Koch, Edward 1. (N.y.) 5243G 1134
2351 X.XKuij!:eiid<ill, Dan (Tenn.) '^ 63205 152G
223GK/''A'7//, Jo/m (Iowa) ^ 53DCG 102G
224 Kyros, Peter N. (Maine). 5G11G 22S
437 I^ndgrcbc, Karl F. {hid.). 65777 123S
109 X;l,andrum, Phil M. (Ga.) 65211 230S
213 J^tla, Dclbcr! L. {Ohio) 5G105 2423
201 Legs^oll, Robert 7v. (Calif.) 5571G 22C3
312 KEcnnon, Alton (N.C.) 52731 2437
435 Lcnl, Norman F. {'^.Y.)... 578BG 1230
2457 Link, Arthur A. (N. Dak.).. 5573G IGIO
2352 JJoyd,S!<cin.an.P. (Vlnh) 53011 1114
118 Long, Clarence D. (Md.).. 530G1 112G
329 X.Long, Speedy 0. (La.) HT. 5492G 419
1124 Lvjan,Manud,Jr.{J>i.'Mcs.)...J^.S03}G- 1323
2264 y^%McClory, nobal (111.) .O. . ^ _ . 55221 426
2340 hIcCloshcy, Paul N., Jr. (Calif.) 554 1 1 1511
242 McClwc.JoMcs A. {Idaho) 5GGI1 1034
318 X^McCollislcr, John Y. {Kchv.) 64155 511
32G McConnack, Mike, (\Yas;h.).-. 55SiG 1203
217 ^rrCvllnr.h, William .Af. {Ohio) 526VG 218G
1203 McDodc, Joseph Sf. {\^a.): 53731 2438
1232 il/c/)o«aW, Joe/: 77. (Mich.) 52101 1204
1510 McEmn, Jioba-lC. {K.r.). 54fill 423
1027 McFall, John J. (Calif.) 52511- 234G
24G9 McKay, K. Gunn (Utah) 63171 1427
407 McKcviU, James'D. {Mihc) (Colo.).. 53331 50G
2217 McKinncy, Stemarin. {Ce^nn.)... .55541 1007
131 ^McMillan, John L. (S.C.) 53315 220S
2349 Macdonald, Torberl II. (Mass.) 52S3G 2470
439 Madden, P>ay J. (Ind.) 52401 2409
1440 Mahon, George II. (Ton.) . 54005 2314
243G .A/ai«io)(/, ll'i<7ia),i S. (Calif.) 651C1 233G
2429 >;Mann, James R. (S.C.) 5G030 1109
1535 yMariin,J)avc Qichr.).. jfl 5G435 2227
2410' .Va//,!as, ;,'o6cr/ 7y. (7:foi) (Califr)... 63341 1024
1424 >(Mathis, Dawson (Ga.).... ...53031 502
2347 XMalsunaga, Sp.ark M. (Hawaii) -.G. 52720 442
2133 Yj.Moync, Wiley (Towa) 55476 114
1313 ;;Mnzx.oli,l!(.manoL. (Ky.) 55401 1017
242G Meeds, Lloyd (Wash.). : 52C05 308
130>v>\Melcher, John (^r.>lll.).- :... 54415 1504
2.(32 .\rctcalfe, Ralph H. (111.) 54372 1110
223?.)(X^fi<^l'ci. I''"bcn 71. (111.) 5G201 2112
1514 Mikva, Abner J. (III.)- 54S35 1527
1317 Miller, Cln,cnecE.{Ohin) ..55131 128
215 Miller, George P. (Calif.) 550G.5 2365
2344 >;x;Mills, Wilbur D. (Ark.) .<?. 5250G J13G
?7 n - 74 - 3d
6366
HOUSE OF REPRECEHTATIYES
Tclcnl.oiu
Knnic . No.
Minisli, Josoph G. (N.J.)- 55035
Mink, l'»tsy 'J', (llaunii) S-iOOG
il/insAnH, William K (Ohio) 55731
Mitchell, I'.iricii J. (M<1 ) 5-17.11
y J\/i>cH, iri7»if/- {Vinegar Ihml)
(N.C.) 52071
Mollolif.u, Robcil JI. (W.Vii.)...-.. 54172
Mon:igaii, John S. (Conn.) 53S22
\ Monlgomoiy, G. V. (Sonny) (Mi«.). 55031
MoorlicnO, Wllimn S. (P;i.). 52301
Moi-gan, Tlionms E. (Pa.) 54GG5
Morse, F. SradJorJ (Mass.) 53411
Morton, nogcr.^ C. Jl. (Md.) 55311
Mosftcr, Chnihs A . (Ohio) 53401
>vX Moss, John E (Cnlif.) 571 G3
Murp'uy, John M. (N.y.) 53371
Murpliy, Mor<xiinF. (111.) . 5340G
)C^Mucrs, John T. (Intl.) iC^ 55805
X Kntehcr, AVilliam 11. (Ky.) 53501
Ncdzi, Liicicu N. (Mich.)..-- 56276
KXNchcn, Ancficr (Minn.) 52472
KNicliols, Bill (Ahi.) 532G1
Kix, Ro"u;'ii N. C. (Ph.) SdOOl
Xy^Ohoy, Dftvid )i. (Wis.)........^:... 533G5
' O'Hara, James G. (Mich.) 5210G
>' y^i'Konski, Ah-i,i K. (Ws.) G 53361
O'NciU, Thomas P., Jr. (Mass.) 55111
XPassman, OUo E. (La.) ._ 52SVG
^;;Paluiaii, ViVight (Tex.) .-.<5 53035
Patten, Edward J. (N.J.). 56301
PcUij, nomas M. OVash.). 563)1
Pepper, Claude (Fla.) 53931
KBcrl.ias, Carl D. (Ky.) 5-1935
Petlis, Jerry L. (Cr.llf.) 55861
Peyser, Pcler A. (N.Y.) ..-. 5553G
>^icl;lc, J. J. (Tex.). 4.''i':-k'f?i'i- .lU 54S05
Pike, Otis G. (X.Y.) 53S2G
Pirnic, Alexander (N.Y.) 53CGo
XX i'oasc, ^V. R. Cl'cx.) JQ SG105
JPo<Iell, Pertram L. (N.Y.) 523C1
>^KPoJI, niclardU. (Va.)... 55151
Powell, V.'alttr E. (Ohio) 5G203
^sPreyrr, liichardson (N.C.) 530C5
^'V Price, Mclvin (111.) 0.-. 55GG1
KX Price., I'ohcrt (Tex.) A> 5370G
>Sf_Pryor, David (Ark.)._. Q.. 53772
XX Pucinski, Roman C. (111.) .f:.. 51211
X < Purc.ll, (Jralnim (Tox.) O- 53G05
Ay^,Quie. A'Urt rr. (Minn.) 52271
*■ )^QuHU II, James n. {Jimmy) (Tonn.). 5G3^;G
y^Ilailsiac!:, Tom (111.) ...1...Q 55505
l!nO"> Tclri.honc KoOJil
Nn. Name No. No.
•13S X/iRumlall, Wm. J. (Mo.).. 0. 52SVG ?131
301 Kan<;>>l, Charle..; 15. (N.Y.) 513G5 220
2213 X.J*arrek, JolnHi. (La.) ..53001 1523
1228 Ke«, Thomas M. (Calif.) ...55011 1113
%X]}ci>l, OkarlotU T. (II!.). 53G35 2350
42'X<^l\J!cid,0,idcnl!.{ti.Y.) ... 5G50G 2'!0
31-1 X^?eiiss, ilomy S. (AVis.)... 53571 2159
2331 7Wio(/cs, Jo/m J. (Ariz.) , 52C35 2312
503 lUegk, Donald M:, Jr. {Midx.) 53G11 .', HOS
2118 J'./Kobnrts, Ray (Tex) .<? SGG73 '2455
2183 \Kf!obi>ison, J. Kcnndh (Va.) 565GI 1723
22-14 llobiion, Howard 11'. (N.Y.).., 5G335 2330
214 Rodino, Peter W.. Jr. (N.J.). 53-136 225G
2442 ■ Roe, Robert, A. (N.J.) 5575) 1009
2IS5 'Rogci^, Paul G. (Kin.). _../» 53001 2-117
2445 Roncnlio, Teno (AVyo.).. ..52311 1314
nOS Rooney, Fred P.. (Pa.) .56411 23C
103 Roonej, John J. (N.Y.) 6593G 2268
2333 Rosenthal, IJenjaniin S. (N.Y.) 52G01 .2453
1125 Rostenkow.-;ki, Dan (li!.) 54061 ' 2.348
2329 XARoush, J. Edunid (Ind.) f? 5443G ' 2400
1037 noiissclol.John IJ. {Cnh!.) 5420G 1706
?''ni J-vXRoY. WiHi:'.in R. (Knns.) O 5CG01 ' HIS
415 Royb.nl, Edv.-ard R (Calif.) . 5G235 604
2241 Runnels, Harold (N. Mex.) .'? 523G5 1726
2403 'Jiiippr, P!,ili2> E. {Mkh.) 1. 54735 12-1
2231 Klhrfh,Earl]J. (K.C). 53713 129
2)08 Ryan, William F. (N.Y.)... 5GG1G 303
■2328 St Germain, Vernand J. (R.I.) 54011 23C7
2332 Sandman, Oiarles W., Jr. 'K.J.)_... 5r.rj72 1)5
2211- Sarbanes, Paul S; (Md.). 540)0 1507
432 XSaKcrfield, David E., Ill (Va.) 52S)5 32-.'
2232 Saylor,JohnP. {V,i.) ._... 52063 235!
427 ,• ySchcrIc, William J. (Io«a)..0.':^.. 53S0G 5)2
1133 Schciier, James il. (N.Y.) 538)0 431
231 Scl,mih,Jolin C. {CM.) :. .55611 1208
2428- Schnceleli, Herman T. {Vn.) 54315 l."3G
)434 VLSc/iitaisf/, Fw/ (lov.a) .-...C2.. 5G57G 2220
2107 )i Scot!, V.'illiam Lloyd (\'r.) 54376 )21V
1712>'X'ScW"'5, Kcitk G. (Ran.^.) ..Q 52715 ))17
7.408 Sciberling, John F. (Ohio)... .55231 1223
1532 V-^'Shipley, GeorscE. (111.) O. 55001 237
501 ' Slwuj,, Iliclinrd G. {^U,uL) 53211 1724
24CS Xv< •'^'"■iucr, Garner E. (Kans.). . . 5(.216 2 '."iO
507 Sikcs, Robert L. F. (Fhi). S4I3G 22G9
307 Sisk, 15, F. (Calif.) .56131 2?..!2
?.\<H\'lSkuljitz, Joe (Kans.) 0 53011 2447
)20 Slack, John M. (W. Va.) ...5271) ??-.00
2334 Smith, JJ. Alien (H'axWI.) 54)76 24.33
)02 Smilh.rrenryr.,/I/{S.y.) 5323) 4^-''-
2)8 >;r£miUi, Nca! (Io«a) <? 64426 2438
6367
HOUSE OF REPRESELITATi\^ES
Tclcplior.c
Nnmc Ko.
\){Sni'(icr,7,f. G. (Gene) (Ky.) 53.!G5
\SiKncc, Floi/il (S.C.) 52-552
)< y. S]»!ngcr. W'llliom L. (111.) 52371
Slajord, Jlohat T. O't.) 51115
Stn^SCis, llarlcy 0. (\\\ Vn.) 54331
Stanton, J. William (O)iio) 55305
Slanton, Jniiu-3 Y. (Oliio) .- 55S71
XX Steed, Tom (Okln.) ...O 5010;-'
Steele, Itohcil JJ. (Conn.) 52C7G
Stcigcr, Sam (Ariz.) .-. 5457C
"K X^Stcigcr, William A. (\\h.) ^ 62i7C
XvSlcphcnR, Kobrrt G., Jr. (Gn.) 54101
Stokes I^oiiis (Ohio) 67032
Sirnllon, Snmncl S. (f^Y.) 5507G
X;/ Stdl.blcncUl, Frank A. (Ky.) (/ 53115
;t.Sturl:cy, \Y. S. (Bill), Jr. '(On.) 5GS3I
SulUvnn, Lconor K. (Mrs. Jolm B.)
. (Mo.) 52G71
J^^-Spninglon, James W. (Mo.) C> 525C1
. . Taleod, Burt L. {CnVii.) .62801
KTpylor, Koy A. (N.C.) 56101
TtogiicCliarUs M. (CnVi!.) 53C01
K>;Tcs"j;uc, OlinE. (Tex.)... <3 62002
Terry, John JI. (N.Y.) 5S0DO
X.Thomi>son, Flrlrhcr {Ga.) 53801
K. ^.ThomjKon, Frnnk, Jr. (N.J.)....... 53765
KX Tlior.'.son, Vernon W. (\Vis.)_ 5.5505
XA n.onc, a-.arhs (Xcbr.) O. 51K0G
Tiwiipn, Kobert O. (K.I.) 52735
Udnll, Morris K. (Ariz.) 54CG5
XK unman, Al (Oreg.).- --Q 5571)
Vni) Deerlin, Lionel (Calif.). 55672
Vender Jag!, Guy (Micb.) 53511
1^;^'" ,, Tclopl.onc
No. Nninc tin.
306 Vniiik, Clmrlc.-; A. (Ohio) 5C33I
516 Veysey.Vietor V. (CnW!.) 52305
2202 Vigorilo, JoEcjili P. (I'll.) 5510G
2452 ysWaggonncr, Joe D., Jr. (I>n,) 52777
23GG WnUiie, Jerome K. (Calif.) 55511
mh'i^Vamjilcr, William C. (Vn.) 53SG1
1107 Ware, John (Vn.) 55761
24C5 XaWoUs, John C. (Ky.).. 5-1705
120G V<'l,alcn, Charles W., Jr. (Oh\o) 5G1G5
126 Whalley, J. JrLinr; (Fn.) 54G76
1025 K)CWliile, Eicbartl C. (Tc.v.) J^ 51S31
313 XYJVhitchurst,, G. Willicnn (Va.) 5'12]5
315 >C WliiUcn, JnmicL. (Miss.) 54303
2404 Widnall, WilHam B. (N.J.) :.. 544C5
2228 Wiggins, Charles E. (Calif.) 54111
223 Williams, Leiwrenec G.(Vn.) 52011
Wilson, Bob (Calif.) 53201
2221 Wilson, Charles n. (Calif.) 55425
1533 )\Y,Winn, T^rry, Jr. (T^ans.) 52SC5
1524 .Wolff, LeslerL. (N.Y.) 55!)5G
2240 X'^'^'iisht, Jim(Tex.) ..j(2 55071
1414 Wyall, Wendell (Oicg.) 5220G
2311 Wydler,JohnW.CN.r.).., 55516
1410 Wylie, Chalmers P. (Ohio). 52015
208 Wyman, Louis CA^-I"!-) - 55456
2246 Yates, Sidney R. (Fii.)...,.. £2111
2305 Yalron, Gus(Pa.) ". _.. 65S40
1531 Young.C.W. BiU(Fh.).... 55951
417 Young, John (Tex.) .Ci.. 52S31
119 Zoblocki, Clement J. (Wis.)....?... 54572
2410 y,Zion, lloger II.(lnd.) 54636
211 ^X'^'*^^"'^''. >^''''" •'^^- (Minn) 52331
1211
Doom
No.
2463
1227
440
221
40S
323
1021
2-111
1255
1235
322
424
2413
2309
229
1503
2235
104
428
403
2459
414
2444
1331
410
2234
313
1721
2419
2184
1226
1502
N
6368
^
c
Tclcplionc
Kninc No.
Vice I'rc.sidcnl Agiicu-, Spiro T.
(Mi)!)-. sai^i
X/v'1''-<"'. Gcorijc.V.iy\.) 5)212
y, Allen, J,imc.sB.( Ala.)... SSY-M
>^A ^"f", ^f'</"« (C('lo.).__ 55011
Audri-oM, Clinlon )'. (N. Mo.x.).... 5GC?1
KK A'^tf, 7/oirar(Z 7^., J; . ('IV.iiii.) 5-19 11
X \ Baj)i, Birch (Ind.) ...£?.. SaG.^S
Umn, J. Glci„>. Jr. (Md.) 64521
. X Scllimn, Ucnnj (OkUi.) .._.__ ' 5575'!
/. Beimel!, V/alldce F. (Ulnh) 554-14
X3(Bonl5?ii, Lloyd M. (Tox.) 55922
Bible, Alnii(Ncv.) ..: 53542
Jionns, J. Caleb ( Del .) : . 550 12
y^liiocl:, ir KiBill) iTcnn-)- ---</■■--- 53344
)(. BrooLe, EduanUV. iMas^.) ._ 52742
BucMpy, Jumri ]-.' (N.Y.).... 5445r
Biirdicl;, Qiionlii) N. (N. Dak.)-._.'_ 52551
y.T. Byrd, )lam F., Jr.' (Yn.) 54024 ■
Byrd, Bobcrt C. (NY. Vn.). 53954
Cniiion, llo-.vnr.! \Y.(Ncv.). ...... 50244
Case, CiiJIonl P.CSJ.y. .-.. 53224
Cliilc:-., Lawloii (Fla.) 55274
Ch-jrc'i, Fr-nV (Trifllia) _.. 56142
)( X Cool, hiarlov) II'. ( ICy .) 54343
y\ Cocpcr, John ShcrnaniKy.) 52542
Cotlon, XoriisiS.n.) 53324
... Cic'.;,ion, Ab.i) (Calif.).. 53553
r./"''3X OiirUe, Carl r. (Kchr.) O. 54224
X /. Dole, Robert J. (Kfins.) SG52I
/• X Duirinicl:, J'cfn- 7^. (.Coh.) 55S52
XvX Kns'f'on, Thomns F. (Mo.) H^.., 55721
AKn.,ll&iid, James O. (Mi?.s.) 0-- 55054
Ellcsidor, Allen J. (I.«.) :. 55824
)\Eiviii, Sam J., Jr. (K.C.) 53154
Fannin, Paul J. ( Ai iz.) 54521
Fong, JJi.am L. ( Hiiwaii) 5G3C1
^.XruU.riglit, .1. NY. (Ailc.) ..Q.. 54843
Gotdwolcr, Harry M.iAiiy..) ...52235
XX Grrvcl, MiI;c(AlaiI;a).. 5CCC5
Grijjin, Jiohcri P. ( Midi.) . . . 56221
Gurncy, Kdwai d J. ( ]''la.) 5304 1
^X Hansen, Clifford P. (W vo.) 53424
)t^y^iicnU, Fred R. (OIcl.i.) £>... 54721
Jim I, riiilip A. (.Mir.li.) 54S22
...-j ^■X^'''""<='^'""'-'= ('"'■)-- 54814
"jjoijldj, Marl: 0. (On-.) 53753
;l ll.illin--, KiiKst F. (S.G.) SG121
X X Ilrud.i,, ItnmuK L.{Kehr.) _ 5C55I
X X Jliijl.c:;, ll:,i(,!d ]:.. (Io«-a). ..53744
;( >, llui.ii-hicy^llulieit.ll. (Mini..)... .^53244
'Ceiir-'rvjtlv^.- 'Inilej'-.'oJtiit.
I 21''
i.-^Vf"
SBHATORS
Kooai Tcliailiom
No. N.'unc No.
/<,Inoiiyc, Poiiicl K. (llawnii) ... 53934
2203 /Jacl;s(,ii, Ilciiiy M.'(NVasIi.), o34!l
35S Jat ils^ Jacob K.(K.y.) .... 5G542
G313 /\ Jordnii/B. lOvorcll. (N.C.)..'...''.... SC342
5229"'.>s./o;(/n«, Zc« //.(Idaho) 52752
4215 Kciincdy, Kdwaid M. (Mnss.) . 54543
2107 ^^-Fonj:, KussellB. (I.a).. 54G23
3G3 AMcCk-Ilaii, Jolm L. (AiU.)...>. 52353
45S \\McGoc, Gale W. (Wyo.) .0.. 5G441
4203 }'j; McGovcrn, George (S. Dak.)....._ 52321
1 121 Mcliily re, Thomai J. (N.H.) 52S41
115 Magmisoti, ■\Varroii G. (Wash.) 52G2I
145 MnnsHrld, Mil:c(Moiil.) S.'.GM
3311 Mathici, CliarlcsjVcC, Jr. {Mil). ._ 51C54
45G Mctcair, Lcc(Monl..). ---/-r 52G51
232 '/..'Miller, Jack (Iowa) A'A^i-Wyi 53254
«2X.--Moiidalc, Walter F. (Minn.) Z? 55G41
110 Monloya, Jo,<C|ih M. (N. Mc.\-.) 55521
417 Mo;.s, Frank E. (Utah) . 55231
105 KKMvmU, Karl K. (S. Dak.) 55S12
'259 MhsWc, Fdnumd S. (Maine)-. 55314
315 .\Nclson, Gaylord (Wis.) C? 55S23
i?.\'Ai^Pachwood, Poberl 11'. (Orcg.) 55244
204 • Pastore, John 0. ( P..T.) .. .-, 52921
342 i^y^Pearson, James B. (Kan?.).. ...■..'.. 54774
US- Pell, Claiborne (K.I.) 54G42
4121 X-'^'^rcy, r/,ar/c..! 77. (111.) 52152
2102 3'rouly, Winston L. (Vt.).. 52051
5311 //Proxmire, William (Wis.) .1... 55G53
2327 Jlnndolph, Jcnnint;s(W.Va.) 50472
248 Ribicofl', Abraham (Conn.) ; . . . 52823
4102 7?o//i, ira/iflCT P. (Del.).... 52441
22 !1 yjliiSEcli, Kichard B. ( Ga.) ..... 63521
245 Saxbc, Williavi B. (Ohio) 53353
337 Sclnocihtr, Pichard S. (Pa.) .... 54254
l'<.Oy(XScott, I/ugh {Vr.). 5G324
1313 Smith, Margaret Chase CShuno). 52523
1215 XSparkmaii, Jolin (Ala.) 54124
449XXSi)oi:^, Willk-im B., Jr. (Va.).i..... 52023
1231 XStcniiis, John C. (Miss.) 5C233
353 ■ Stevens, Ted (.AU^U) . 53004
510r.>;XStcvenson, Adlai E., HI (111.) 52S54
31 07X;v Syminston, Si iiart ( Mo ) '. 5G1 54
?..54 ' TaJ(,Poherl.Jr.(Oh\o) 52315
253;; ,. Talmadsc, ITennan F. (Ga.)O 53G43
451 y.O'inirmond, Strom {S.C.) .• 55972
4C3 }VJ'oircr,J„huG. (.Tex.) 52934
432 y/Amney, John Y. (Calif.) 63S41
313 H'ctoVrr, 7-oimY/ /'. (Conn.) 54041
1327 Williain-s, }!!-.ni,on A., Jr. (N'.J.)- - - 54744
4 1 1 :j ■; Ywn'J, Mill'M P. (N. i:)ak.) ., 52043
rooal
No.
442
137
320
3229
437
431.
217
3241
344
3G2
405
.127
133
240
427
4313
443
4109
G203
5241
221
404
CS27
3215
4327
323
1200
6215
2311
5121
321
3123
7.05
1203
0221
2G0
2121
3203
53.17
209
304
107
225
3331
347
4241
142
C237
5313
352
5205
6369
'JJ:i_
M.AJiS'JJ^
TowNSEND Exhibit No. 5
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TOWNSEND EXfflBIT NO. 6
■'a;;ust 19, 1971
Iv'r. David L. I-'arr
Associated V ilk Producers, Inc.
F, O. Box 9589
Little Kock, Arkansas 72209
I ear Dave:
Enclosed is n.y cover letter to Vurray .':hotiner
accompanyiag payment of '2500 to the six con.i~ittee3 iciuicated.
Our ba.lance in the fund was insufficient to h.'^ndle all Cyelve
con'-Jx^ltteeB and the 5i.xccr.i; ittees l5iJ through 63 Jacl'isive)
v/erc not handled. I'his Laforniatioa was relayed to Ion. Tov/nsead
iast week.
Sincereiv vours.
" H:bd
-•^rclos ures
6373
Wavid J^. £rai>i
6423 FORBING ROAD
LITTLE ROCK, ARKANSAS 72209
August 9, 1971
Mr. Gary Hanman
Mid-America Dairymen, Inc.
P. 0. Box. 1837, SS Station
Springfield J Missouri 65805
Dear Gary:
Please mail checks for each committee
numbered in the amount of $2500.00 each to:
Reeves & Harrison, Attn: Mr. Murray Chotiner,
1701 Pennsylvania Avenue, N.W., Washington,
D. C. 20006.
Sincerely yours,
/^-^
David Parr
DP/bk
encs .
6374
^ ^' ■ ^^LUD -Tic ,-'. : 1 s Vni t f-' cl_ J o r Dk-c c nj_ CjOj-^j p. :t\ c n t
Chairniaii; Joyce M. l-cn.'.cti (^/
1729 H Street. N. V,'.
V.'ashiii-ton. D. C. 20006 •
Trejt surer: Rodney H. Becker
15tii and N'cv York Avenue, N. W.
V/ashini^ton; D. C. 20005
^3. Americans United for an Lriforrned E'le.ctorate
Chairnian. Frances B. Je.ppson
9004 Honeybee I ane
Bethcsda. Maryland 20034
Treasurer: James V.', Bray
iSth and Nev/ York Avenue, N, W.
W'aGhington, D. C. 20005
6375
54.
The Organization of Lnvolved Anier ici'.ns
Chairman:
Treasurer;
John Y, Mcrrell
815 - ISth Street, N. W.
Washington, D, C. 20006
Benjamin H. BurrcU
15th and Now York Avenue, N.W.
Washington, D. C. 20005
55. Americans United for Political Awareness
Chairman:
Marjorie Merrell
4630 North Dittmer Road
Arlington, Virginia
Treasurer: Servando Calub, Jr.
15th and New York Avenue, N. W.
Washington, D, C. 20005
56. Americans United for Political Involvement ^-^^
Chairman: Georgette K. PitrelU
4319 Americana Drive
Annandale, Virgioia
Treasurer: Margaret A. Cooke
.'l5th and New York Avenue, K. W.
Washington, D. C. 20005
57, Americans Participating
Chairman: Thelrna J. Stewart
11901 Popes Head Road
Fairfax, Virginia
Treasurer; David Creech
■15th and New. York Avenue', N. V.\
Washington, D. C. 2000 5
6376
5 8. Americans United for a Mural Society
Chairman: Camille N. Ryder
4?. 17 Hoi born Avenue
Annandale, Virginia
Treasurer: William C. Creekniore
15th and New York Avenue, N. W.
Washington. D. C. 20005
59. Americans Organized for Action
Chairman: Ronald Frost
3801 North Fairfax Drive
Arlington, Virginia
Treasurer: Curtis R. Deily
15th and New York Avenue, N, W.
Washington. D. C. 2000 5
60. Americans Organized for Citizen Activity
Chairman: Catherine Frost
40I2-27th North
Arlington, Virginia
Treasurer: Suzanne O. Dembowski
15th and New York Avenue, N. W.
Washington, D. C. 20005
61. American Association for Citizen Participation
Chairman; Clyde Flynn'
1511 K Street, N. W.
Suite 1120
Washington, D. C. 20006
Treasurer: Dennis. D. Dorsey
15th and New York Avenue, N. W.
Washington, D. C. 20005
6377
62. Americans Organized to Preserve Good Government
Chairman: \I. E. Melton
1730 M Street. N. W.
Washington, D. C. •
Treasurer; Dorothy A. Eldridge
15th and New York Avenue, N. W.
Washington, D. C. 20005
63. Americans Organized for Sound Fiscal Policy
Chairman: Jessie R. Smith •
3830 Garrison, N. W..
Washington, D. C.
Treasurer: Luis G. Estefani
15th and New York Avenue, N, W.
. Washington, D. C, 20005
o
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