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

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 _ g ash 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. 



^Y^--^--^-:^ 



I^L< 



"1-70 



_ x;;i \-^ywv-^ v^'^'"^^^ -r_ ■ ^ _ 






•^ 






J^^M^jlC^^JIa- (o 



r 



/ ; \/<,I^L^A^.^i-^' 6v ,.._ ^ 



X-r 






> T 



/ r) /-^ .-I o 



^^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; 



¥ 



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 



LIL LY, .-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'^^^ ' 


^ 












J- 


. 








M 


^-C 




n 




!0 




.^>^\ 




tj^' 


.e>* 




' 




f^.^i^' 





























i>^ 



'rf /. 



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. Te x. 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 S sjj fiatoni j 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 ypjp erty -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 p ro mptl y 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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6003 



Lilly Exhibit No. 8 




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AUSTtM.TFXAS 78767 
5I2--I72-1131 



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 



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p. O. Box 222 
SI2--J72-1I3I 



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 M ilk 
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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6010 
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. 
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P.O.BOX 222 

Austin, TEXA5 7&7e7 
5l2-.a72ll3l 



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 
CHK.<tD HGli^ES 
PAID - CHECK NO. 




Jake Jacobsen 



^JOE R.LONC 



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 



fA "-' 



oj/ 



R EQUE ST FOf CHECK 



TO DEFT:_ 



DATE: / ? - -j 1. - (. 



ISSUE CHECK TO: 



AMOUNT: -^.f r:-i O 



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CHARGE TQ ACCOUNT OR ACCOUNT NO 



2; 



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: 









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4. Pilfonice 
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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 
«lhtr distributions 
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 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 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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' 6037 

Sluart M- Rutceli 

ATTOHIMETir AT t_AW 
OKLAHOMA ClTr. OKL-flJHOMA 73103. 

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. 

ThlJ) li 6ome.thlng that I thoaght you 
would vjant In youK ille.6 . It was appafizntly 6znt 
to San Antonio and the.n ioKwaA.de.d to me anopznzd. 



'tfiuly youKi^^ 
lEt± 




SHU'.jh 
Attachmtnt 



604q,u; 



m. 



r-^^ 



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 



■40S/236-SS9I 



A 



J^CCS" 



jCZiJ .^i^^->y^ 4^^^^-^^ ^u^ ^Ji^^^i>te 




J.- »■«*».'"" i^-^Sl, 



6042 



Lilly Exhibit No. 23 



ejf i ©LIBERTY 

1/ „^'; NATIONAU BANK & TRUST COMR^^iY 

'■''^■f^ j"' OF OKUAHOM \ C1T^ 



_CiL£^ 



■ ' 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"" 



.■•0000 500000.'" 



Ajo ' .- T / . dl! 






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6043 



Lilly Exhibit No. 24 



aUBERTY 



7 ^^SK 



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■>fr^£<:..i..^H->..i.; 






STL'ART H. 'Rl-SSELL. SPECIAL 



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rioao'-oo !.s>: ""ioa aai, 3n* 



,'•00001,00000/ 



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6044 



Lilly Exhibit No. 25 



- s - = 



•-^^^THE ^ZZ?£>^-;NAT10IVAL BANK - a 




"^ 1125 



execunvejrn 



clubJ 



:A'(.3'jia^ ;?r. /97g 



Bob LlZlu 



% TO .aoo:oa 



'■''Tc}l'THCUSA:4V's.nd hla/lOO"** 



















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STUART H. RUSSELL-.- 



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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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I 



6050 



Lilly 


Exhibit 


No. 


27 






39S 


^ 


19 


^-^ 



TO ^^ _ J_i _ 






rHis che:c< 



BA1-AMC£ 



^-'^ . *.*-* . 



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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6093 



CONNALLY EXHIBIT NO. 2 



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6094 

CONNALLY EXfflBIT NO. 3 









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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. 



I mpact 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/l CO -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-thousa n d and no , ''100 -r ' 



April 4 ,»72 ea-zse? 

£ f^ >3 1141' ■ 

i \ 

»_J ri, 5,00 0.00 



. 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«: 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 



= 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 
COUNTY OF BEXAPt 

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" 
0.i -= 



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 



^'^^ 



"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. 






Sd 

So 

, 7 






H H 






^d, 



5--^ 



oA%^'0 



^ 






o 







7 



7 I ru-y^ -i/'>'^ 




!'< 






^^J L^ JjL n/f<--^ 



6232 



t^f^ <J>'>^\rU_^ /\J - . 

7 

>r^/w^^7TZ ^^^TTr~i) ?_ _ 

^2:/to^ d-':>", £tT=0 ' ^ 

/J\^^^^_Jlj-ja^^r.^=^ 

n Cu:/i.iiio'^ 1:<r Crr-0^. D 2^__ 



\^0 Q-trO 



Xj^yJ. _,^^^ 






^7 / __X _gz:g 



«s'H'iy</ - . , ^^ 



-^7,_^:r:^ 



30-337 3951 



6233 



^ -' ~^ — •,/ . »_y\.>*^^v' 



2^ 







^o^t 



^S 







7 7 






.,^ 




309 Sotedad 



•^JvT'df'^ ;^_.^_^ 227-7561 
' Texcs 



6234 



7^s 






// 
^9 s-^ 



,- _ f-f :$/}/ 2 S- S^^ 



<^ ) trPk /JS,v 






i.'C- 



y 



u^- 



>£5^ V" 



5'o 

_/_f ^'£>- 



-< ^^'<''' 

^ *''":, !^>-i 



i^ 



6235 



isr. .:_.. __.._... C,'^ - ^ 






- -; ■ -- A^ 

yA P 7 '^ ^, 



^oJ^ 






XoL-^-- r?^U f - ~-^^J ^^^1 -^ro^ ^ 






6236 







ii^ 



A'' 



VV^ 



>^' 



■rv^' 



4' Ji 1^ 






U 



X" T/t/^t /i-^A'' 



^]'S^^\^i^c^ ^ fit 









£ 



( ^-- 






-.yJ- 



/-'I^Jvl/i? 



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 Camp aign Committee and was a c on tribution 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 : Contribut iont? 

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 



roaniz3tion 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 Dodi cilod 
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