p' 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
SECOND SESSION
WATERGATE AND RELATED ACTIVITIES
Milk Fund Investigation
WASHINGTON, D.C., MARCH 20, 22, 25, 26, APRIL 2, 11, 26,
MAY 21, 31, AND JUNE 13, 1974
Book 17
Printed for the use of the
Select Committee on Presidential Campaign Activities
FRAN-^iJ-" !M;-:-. h L /^W CE:JTER
Concord, New Hampshire 03301
DEPOSIT °^T 2 4 1975
PRESIDENTIAL CAMPAIGN ACTIVITIES OF 1972
SENATE RESOLUTION 60
EXECUTIVE SESSION HEARINGS
bp:fore the
SELECT COMMITTEE ON
PRESIDENTIAL CAMPAIGN ACTIVITIES
OF THE
UNITED STATES SENATE
NINETY-THIRD CONGRESS
SECOND SESSION
WATERGATE AND RELATED ACTIVITIES
Milk Fund Investigation
WASHINGTON, D.C.. MARCH 20. 22, 25, 26, APRIL 2, 11, 26,
MAY 21, 31, AND JUNE 13, 1974
Book 17
Printed for the use of the
Select Committee on Presidential Campaign Activities
U.S. GOVERNMENT PRINTING OFFICE
30-337 O WASHINGTON : 1974
For sale by the Superintendent of Documents, U.S. Government Printing Offlce
Wasliington, D.C. 20402 - Price $4.40
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 D-^sh, Chief Counsel and Staff Director
Fred D. Thompson, Minority Counsel
RuFUS L. Edmisten, Deputy Chief Counsel
Arthur S. Miller, Chief Consultant
David M. Dorsen, Assistant Chief Counsel
Terry F. Lenzner, Assistant Chief Counsel
James Hamilton, Assistant Chief Counsel
Carmine S. Belling, Chief Investigator
Marc Lackritz, Assistant Counsel
Ja.mes C. Moore, Assistant Counsel
Ronald D. Rotunda, Assistant Counsel
Barry Schochet, Assistant Counsel
W. Dennis Summers, Assistant Counsel
Alan S. Weitz, Assistaiit Counsel
Robert F. Muse, Jr., Assistant Counsel
R. Scott Armstronc, 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.]
(H)
CONTENTS
HEARING DAYS Page
Wednesday, March 20, 1974 7535
Friday, March 22, 1974 7577
Monday, March 25, 1974 7625
Tuesday, March 26, 1974 7679
Tuesday, April 2, 1974 7693
Thursday, April 11, 1974 7699
Friday, April 26, 1974 7707
Tuesday, May 21, 1974 7731
Friday, May 31, 1974 7749
Thursday, June 13, 1974 7805
CHRONOLOGICAL LIST OF WITNESSES
Wednesday, Mabch 20, 1974
Nunn, Lee, former vice chairman for the Finance Committee To Re-Elect
the President, accompanied by Wallace N. Duncan, counsel 7535
Friday, March 22. 1974
Kalmbach. Herbert W., former associate finance chairman for the Finance
Committee To Re-Elect the President and personal attorney to the Presi-
dent, accompanied by Edward P. Morgan, counsel 7577
Monday, March 25, 1974
Butterbrodt, John E., president of AMPI, accompanied by Thomas C.
Green, counsel 7625
Tuesday, March 26, 1974
Harrison, Marion Edwyn, member of the former firm of Reeves & Harrison,
which was retained by AMPI 7679
Tuesday, April 2, 1974
Johnson, Joseph P., former AMPI oflScial and chairman of the Mills for
President Committee in 1972, accompanied by J. D. Williams and Eric
Roiter, counsel 7695
Thursday, April 11, 1974
Chestnut, Jack, campaign manager for Senator Humphrey's Presidential
campaign in 1972, accompanied by Douglas Thomson and John Cochrane,
counsel 7700
Friday, April 26, 1974
Pepper, Gerald R., executive director of the Iowa Institute of Coopera-
tion 7707
Tuesday, May 21, 1974
Hanman, Gary Edwin, senior vice president of Mid-America Dairymen,
Inc., accompanied by Wayne Hoecker, counsel 7731
(III)
IV
Friday, May 31, 1974
Page
Campbell, J. Phil, Under Secretary of the U.S. Department of Agriculture- 7749
Thursday, June 13, 1974
Kalmbach, Herbert W., testimony resumed 7805
EXHIBITS SUBMITTED FOR THE RECORD
Kalmbach Exhibits
No. 1 — (7596) Memorandum from John Dean to DeMarco, Evans
and Kalmbach, dated March 18, 1971, re draft
charter 7623
No. 2— (7615) Article in Washington Post of February 29, 1972, by
Jack Anderson, regarding ITT antitrust case 7624
No. 3— (7807) Kalmbach letter to Maurice Stans dated April 17,
1969, re $100,000 contribution of Jack Mulcahy 7816
No. 4 — (7807) Itinerary/agenda for meetings March 24, 25, 26, and
27, 1971, of Mr. Kalmbach 7816
BUTTEBBBODT EXHIBIT
No. 1 — (7653) Letter from E. C. Heininger to Kenneth Parkinson,
dated January 21, 1974, re $100,000 political contri-
bution to the Committee To Re-Elect the Presi-
dent 7674
Select Committee subpena for Jack Chestnut 7704
Peppeb Exhibits
Xo. 1 — (7719) Letter written to the Governor of Iowa by Gerald R.
Pepper, dated March 26, 1974, re co-ops being "used"
in a cooperative rally in October 1971 7726
No. 2 — (7719) Letter, with attachment, from Harry Oswald, repre-
senting Arkansas Electric Cooperatives, Inc., to Roger
Peterson, dated September 14, 1971, indicating sup-
port of Congressman Mills 7727
No. 3 — (7720) Letter from Gerald Pepper to REC managers, dated
September 18, 1971, re "Kick-off — October is Coopera-
tive Month." '. 7729
No. 4 — (7722) Advertisement announcing Iowa Cooperative Month
kick-off, which appeared in a number of newspapers
in Iowa 7730
Campbell Exhibits
No. 1— (7749) Affidavit of J. Phil Campbell dated March 10, 1972 7791,
No. 2 — (7757) Press release from Department of Agriculture of ex- /
cerpts of a speech by Mr. Campbell at Pennsylvania
State College, March 22, 1971 7801
AFFIDAVITS
Baroody, Joseph. June 25, 1974 7817
Bell, Joe, January 21, 1974, with attachments 7821
Bethke, Monroe, February 7, 1974, with attachments 7832
Blanton. Paul E., undated, with attachments 7839
Cohen, Sidney, January 25. 1974, with attachment.s 7847
Dale, John W., January 29. 1974, with attachments 7881
Elmore, John A.. June 27. 1974, with attachments 7891
Goggans, .John, January 21, 1974, with attachments 7900
Hamilton, W. A., January 28, 1974, with attachments 7913
Hardin, Clifford M., March 7, 1972 7916
Hart, Jane S.. March 14, 1974, with attachments 7920
Johnson, Roger E.. January 25, 1974. with attachment 7936
Jones, Kirby, February 13, 1974, with attachments 7938
Kalmbach, Herbert W., .June 11, 1974. with attachments 7944
Keema, Alexander W.. March 1, 1974, with attachments 7959
Long, Joe R., April 8, 1974, with attachments 7969
McLaren. Richard W.. December 19, 1973 7977
Manuel, Eleanor, January 25, 1974, with attachment 7985
Page
Morgan, Ben E., March 1, 1974, with attachment 7988
Parker, John, January 8, 1974 7990
Pleasant, William D., January 25, 1974 7992
Stetler, Manan M., February 7, 1974, with attachments 7994
Wallace, Don, January 8, 1974 8001
Weitz, Alan S.. February 27, 1974, with attachments 8002
Wilson, Bruce B., January 23, 1974, with attachments 8012
Zittle, John, February 4, 1974 8053
ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD
Billing of $10,516.21 from Sharon, Pierson & Semmes to MPI for legal
retainer, services, and disbursements, dated December 19, 1969 8055
Check for $5,000 to "Cash," signed by W. DeVier Pierson, dated January
26, 1970 8056
Check for $5,000 to Bob Lilly, signed by James R. Jones, dated December
23, 1969 ; check for $5,000 to Bob Lilly, signed by James R. Jones, dated
May 5, 1970 8057
Letter from Congressman James R. Jones to Senator Ervin, dated June 22,
1974, re Jones' involvement with MPI/AMPI 8058
Letter from Thomas A. Kennelly to David M. Dorsen, dated March 27, 1974,
re Jones' billings to AMPI on December 19, 1969, and April 9, 1970 8061
Billing of $6,890 to Bob Lilly of MPI from James R. Jones for professional
services and expenses, dated December 19, 1969 8065
MPI request for check form, invoice, and check of MPI for $6,980 to James
R. Jones for legal services, dated December 19, 1969 8066
Letter from James R. Jones to Robert Lilly dated April 9, 1970, with
attached billing for $7,150 for professional services 8069
AMPI invoice dated April 9, 1970, and AMPI check dated April 20, 1970,
for $7,150 to James R. Jones for professional expenses 8071
White House press release and white paper "The Milk Support Price Deci-
sion," dated January 8, 1974 8073
Photograph of President Nixon, Harold Nelson, and David Parr taken
during their September 9, 1970 meeting 8093
liist of documents identified by White House custodian of records in search
of White House records pursuant to subpenas duces tecum in Nader
v. Butz 8094
U.S. Tariff Commission response to the Select Committee request for infor-
mation on imports of certain dairy products in 1969 and 1970 8108
White House memorandum from John Brown to "JC" with handwritten
comment 8112
USDA organization chart for the 1971 milk price support decision 8113
U^SDA/ASCS memorandum from Kiester Adams, Deputy Director, Live-
stock and Dairy Division, to Deputy Administrator of Commodity
Operations, dated September 25, 1970, re dairy and wool program
considerations 8114
Memorandum from Carl Farrington, Deputy Administrator of USDA/ASCS
Commodity Operations to the Administrator, dated January 7, 1971, re
recommended dairy price support, 1971-72 marketing year, with esti-
mates attached 8117
Letter from Gary Hauman, Mid-America Dairymen. Inc., to William
Beezley, dated March 16. 1971, re 1971 milk price supports 8127
Memorandum from George Shultz to John Ehrlichman. dated March 4.
1971, re telephone call from Wilbur Mills regarding milk price supports. 8128
Check for $200 from L. E. Elrod for William Pleasant for "Services,"
dated March 19. 1971. with endorsement 8129
Memorandum from John Dean to Frank DeMarco, Tom Evans, and Herb
Kalmbach, dated March 18, 1971, with cc John N. Mitchell, re attached
charter for committees Avorking for the President's renomination. with
charter 8130
White House letter from Dwight L. Chapin to Secretary Hardin dated
February 25, 1971, re March 23, 10:30 a.m. milk producers meeting
with the President 8135
Memorandum from J. Phil Campbell. Under Secretary of Agriculture, to
John Whitaker, Deputy Assistant to the President, dated March 22.
1971, re enclosed opening statement and dairy fact sheet for March
23 milk producers/President meeting 8136
VI
Letter from Gary Hanman. Mid- America Dairymen. Inc., to Carl Baumann,
dated March 29. 1971. re March 25 price support decision and TAPE, P***
ADEPT, and SPACE role in the decision 8139
Letter from William A. Powell, president of Mid- America Dairymen. Inc.,
to Mr. and Mrs. Floyd S. Spidle. dated June 7. 1971. re political action
by dairymen and the March 2.5 milk price support decision 8141
Select Committee chart of Senate and House 1971 milk price support bills- 8143
S. 1277. 92d Congress 8147
Select Committee chart of Presidential vetoes from January 1969 to
March 1971 8149
Letter from Gary Hanman, Mid-America Dairymen, Inc., to Marion
Edwyn Harrison, dated April 19, 1971, re enclosed checks, cover letters,
and receipts for ADEPT contributions 8150
Letter from Judge Richard TV. McLaren to David M. Dorsen dated May
10. 1974, re r..S. v. AMPI 8151
Letter from Bob A. Lilly of AMPI to Jake Jacobsen dated August 26,
1971. re IRS audit 8155
Three paragraph document concerning IRS audit of MPI relating to "Xo
Retreat From Tomorrow'" 8157
Memorandum from Robert O. Isham to George Mehren dated April 4,
1972, re attached Isham to Mehren letter, April 4, 1972 ; and attached
April 20. 1972. Isham to Monroe Bethke letter, re Isham resignation
from AMPI 8158
CRP memorandum dated August 7. 1972. entitled "Agri-Business" and re-
ferring to "Milk Producers'" ^. 8164
CRP memorandum from Clayton Teutter to Fred Malek dated September
6, 1972, re Agricultural campaign materials 8167
Page 121 from the "Rose Mary Woods Ust"' pertaining to the "Milk Pro-
producers Association" 8168
Check to Republican Congressional Campaign Committee for $140,000;
check to Republican Senatorial Campaign Committee for $140.000 ;
check to Congressional Boosters Club for .?50,000, all from Republican
National Finance Committee and dated September 27. 1972 8169
Two checks from the Republican Campaign Committee, each for S60.000
and dated September 27. 1972, one to the Republican Congressional
Campaign Committee and the other to the Republican Senatorial Cam-
paign Committee, with endorsements 8170
Two checks for the National Republican Senatorial Committee from the
Republican Campaign Committee, each for $8,000 and dated October
6. 1972. with endorsements 8171
Two checks from the Republican National Associates Committee, each
for $100,000 and dated October 9. 1972. one to National Republican
Congressional Committee and the other to National Republican Sena-
torial Committee, with endorsements . 8172
Republican Campaign Committee check to the National Republican Sena-
torial Committee for $23,500. dated November 1, 1972. with endorse-
ment 8173
PRESIDENTIAL CAMPAIGN ACTIVITIES OF 1972
MILK FUND INVESTIGATION
WEDNESDAY, MARCH 20, 1974
Ij.S. Senate,
Select Com:mtttee ox
PRESIDEXTIAIi CaMPAIGX AcTmTLES,
'Washington, B.C.
The Select Committee met. pursuant to notice, at 2 :10 p.m., in room
1418, Dirksen Senate Office Building;.
Present : Senator Talmadge.
Also present: Da%'id M. Dorsen, assistant chief counsel: Alan S.
Weitz, assistant majority counsel : and Donald Sandei-s. deputy minor-
ity counsel.
Senator Talmadge. Do you swear that the evidence you shall give
the Select Committee on Presidential Campaitrii Activities of 1972
shall be the truth, the whole truth, and nothing but the truth, so help
you God ?
Mr. Ntjxx. I do.
Senator Talmadge. Thank you, sir.
[Brief recess.]
Mr. Weitz. TTell, I guess we can begin now.
Just as a preliminai-y question. I wonder if you would get some
background on the record, Mr. Xunn ? For the record, would you please
state your full name and address?
TESTIMONY OF LEE NUNN. ACCOMPANIED BY WALLACE L.
DUNCAN. COUNSEL
Mr. Nuxx. Lee Nunn. Route 1. Cave City, Ky.
Mr. Weitz. And would your counsel please identify himself for
the record ?
Mr. Duxcax. Wallace L. Dmican : Duncan. Brown & Palmer. 1700
Penns^'lvania Avenue, Washington. D.C.
Mr. Weitz. Mr. Xunn. just by way of background. I understand
you were director of the Senatorial Campaign Committee — the Repub-
lican Senatorial Campaign Committee from 1968 until 1971?
Mr. Nuxx. Yes: that is correct. ]Maybe it was a little earlier than
that. I don't recall the exact dates.
Mr. Weitz. I see. Did you also have responsibility during that
period and earlier for national Republican annual dinners?
Mr.NTTxx.Yes;Idid.
Mr. Weitz. For what j^riod : do you recall ?
Mr. ^iTTxx. Probably going back to 19fi7. 1 guess, through ^farch of
1971. ISIarch of 1971 was the last dinner that I held for — including
the dinners at the Republican National Conventions.
(7535)
7536
Mr. Weitz. Now, did you leave the Senatorial Campaign Com-
mittee in March of 1971 ?
Mr. NuNN. At the end of March of 1971, yes; March 31, 1971, I
guess was my last day.
Mr. Weitz. And then at that time, or shortly thereafter, did you
join the predecessor organization to the Finance Committee To Re-
Elect the President ?
Mr. NuNN. Yes, at sometime in April I became active in that.
Mr. Weitz. Was that the earliest time you were connected with
the reelection effort, the reelection campaign ?
Mr. NuNN. Yes.
Mr. Weitz. What was your position there ?
Mr. NuNN. Well, I eventually was vice chairman. I was named the
vice chairman without my knowledge. It just suddenly appeared on
the letterhead one day and that was that.
Mr. Weitz. Do you know when that 'first happened ?
Mr. NuNN. That took place when Secretary Stans came into opera-
tion— shortly after he arrived in 1972 that happened.
Mr. Weitz. Prior to that you did not hold any specific title?
Mr. NuNN. I held no specific title. I worked both politically and
with the finances.
Mr. Weitz. What were your responsibilities or areas of activities?
Mr. NuNN. Well, in the beginning we set up a direct mail cam-
paign to bring in funds to help sustain the small operation that was
there. I worked on political matters in the 50 States due to my
knowledge of the political people all around the country just keeping
an ear to the ground as to delegates and potential opponents that
might come up, and things of that nature; just general politics as
well as finance.
Mr. Weitz. How long did you serve as vice chairman of the
committee ?
Mr. NuNN. lentil the end of the conmiittee, I guess.
Mr. Weitz. Who did you report to first before Secretary Stans
came on, and then after?
Mr. NuNN. To Attorney General Mitchell. Then Secretary Stans
came in and I reported to Secretaiy Stans and to Attorney General
Mitchell. Then also I reported to Clark MacGregor when he came in
on matters that related to politics. I never was completely out of the
political 'field. I did a little politics along with the fundraising at all
times.
Mr. Weitz. Did your position change in any way, either practically
speaking or in title, after April of 1972 ?
Mr. NuNN. No.
Mr. Weitz. Were you reporting to or coordinating with the efforts
of Mr. Kalmbach? Were you reporting to him or was he reporting
to you?
Mr. Ntjnk. No; there was some relationship. Kalmbach was on
board when I came in, but he was outside most of the time. He was
seldom in the office, but we did have discussions from time to time
chiefly on fundraising; yes.
No one ever told me that T Avas to report to anyone in particular.
John Mitchell just said :
Gro on over there. We are going to .set up an organization and I will be over
very Shortly and we will get thing's going.
7537
Mr. Weitz. All right. Now I would like to turn your attention to
1971 and ask you when, either at the senatorial campaign committee
or after you joined the reelection effort, you first became aware of tlie
milk producers and potential contributions by them ?
Mr. NuNX. Well, the milk producers had contributed to our dinners.
Xow, I can't recall the first one that they contributed to, but I do know
they contributed subst antially to the March dinner.
Mr. Weitz. Had they, to the best of your recollection, Mr. Nunn,
contributed before 1971 ?
Mr. NuNX. I believe they had. I can't say that for certain. You
would have to check the records of the senatorial campaign committee.
It was not large prior to that time if they had.
Mr. Weitz. Either prior to 1971 or in connection with the 1971 con-
tributions, did you deal with them directly ?
Mr. NuNX. No, I never did get acquainted with the top people in
the milk producers.
You say "dealing with them directly," and at one time I was in the
milk business, a farmer myself, and the milk producei*s deducted from
my checks for their purposes. So I did have some knowledge that there
was such an organization in existence at that time. And then as di-
rector of the dinners, the people working for me were calling con-
tributors from all over the United States and milk producers were on
that list, of course. And they were contacted by the people working
for me out there on those dinners. They were usually conducted from
t he Washington Hilton Hotel .
Mr. Weitz. Do you know how, in fact, the milk people were solicited
for their contributions to the 1971 dinner? Was it through this tele-
phone operation ?
Mr. NuNX. Through this telephone operation ? Yes, we didn't have
anyone out in the field vrorking. It was all done by telephone from
here in Washington.
Mr. Weitz. Did you discuss the possibility of contributions by the
milk people with Marion Harrison ?
Mr. Nuxx. Yes, Marion Harrison was the principal contact here
in Washington for the milk producers at that time.
Mr. Weitz. Did you know him prior to that ?
Mr. Nuxx. No, 1 did not. I think the first time I met Marion Harri-
son w^as when he delivered checks over there to the dinner committee
or else he attended a dinner. I can't recall which, but it was on one of
those occasions.
Mr. Weitz. Do you recall when you were first told of the intention
of the milk producers to contribute to the dinner ?
Mr. Nuxx. Well, I cannot because we had a card system with about
30,000 cards that we solicited and each day I would go through these
as the telephone people would turn them in at night, and we would
study the cards as to who had made commitments and we would try to
follow up. All commitments didn't always come through so we had an
intensive followup on those. And at some time now during that period,
I am sure I must have noted from the cards that the milk producers
intended to contribute. Also I may have had a call from someone, pos-
sibly Harrison, but I just don't recall how that happened it has been
so long ago.
Mr. Weitz. With respect to reviewing those cards or otherwise,
what was the amount of the commitment that the milk producers in-
tended or had made — or intended to contribute?
7538
Mr. NuNN. I have no idea, because they were in the thousands. You
see, those dinners at that time were running $2 or $3 million for a
single dinner and there were a lot of contributors. Tlie records will
show all of that, whatever it is.
Mr. Weitz. Well, the records will show what they ultimately con-
tributed. "What I am asking is if there is possibly any discrepancy
between that and their commitment, and if so, if you were aware of
Avhat that amount was ?
Mr. NuNN. No, I am sure there was not.
Mr. Weitz. Did you discuss the milk producers' pledge or contribu-
tion to the dinner with anyone in the White House ?
Mr. NuNN. I don't recall. I could have. I don't recall it because my
contacts at that time were with the committees here on the Hill and
with the Republican National Committee. They were the three that
shared in the dinner. I don't think the White House had any part of
that dinner.
Mr. Weitz. Was there any preexisting commitment by the Wliite
House people to the Republican National Committee or to your com-
mittee, "your" meaning the senatorial committee, at that time that Avas
outstanding in either moneys that they had taken or moneys that they
had been committed to raise for you ?
Mr. NuNN. They hadn't taken any money from our committee or
agreed to raise any money as far as our committee was concerned.
Now the Republican National, I just don't Imow. Thei'e could have
been because the Republican National Committee had a custom, and
I presume they still do, of an amount set up in their budget to take
care of White House expenses. But as to what that was, I did not
know at that time. At a later date I did know.
Mr. Weitz. Now, the Republican National Committee — is it not
true that it or its aiRliate committees normally share in the proceeds
of the dinners, they would share in the March of 1971 dinner and
similar dinners?
Mr. NuNN. The March of 1971 dinner they did. At one time it was
Senate-House only and then I think we had just a Senate dinner and
then we had the Republican National Committee coming into the pic-
ture. At the 1968 or 1969, or somewhere in there at one dinner, the
"Wliite House shared by way of the Republican National Committee to
help defray some of the expenses of the inauguration and so forth.
You know, the legislation had been enacted here setting up funds
to change over the administration, but it was not adequate so the
Republican National Committee made up the difference. I think some
of that money came from the dinner operation.
Mr. Weitz. So if there was some type of commitment or arrange-
ment between the White House and the Republican National Commit-
tee, at least in 1971, you were not necessarily aware of it?
Mr. NuNN. No, I didn't know anything about it because at that time
I hadn't the faintest idea I would be involved in the Presidential
campaign.
Mr. "Weitz. And I take it no one in any way discussed the connection
between the milk producers' contribution to the dinner and any
arrangements between the White House and the Republican National
Committee for fundraising?
7539
Mr. NuNN. If they did, I don't recall it. They could have. They could
very well have done so because there were all sorts of discussions on
the dinner and everyone was interested in the dinner. We had asked
people connected with the party, including the Wliite House, for
anything they could do to assist in selling dinner tickets. So there
could have been. I don't recall if there was.
Mr. Weitz. Wlio would have told you that, if, in fact, you were
informed of any such arrangement? Who were you in contact with
who would have had that information ?
Mr. NuNN. Well, Murray Chotiner, I would imagine, because he
was the man we had most of the contact with concerning the 1970
campaigns.
Mr. Weitz. In the White House ?
Mr. NuNN. In the White House, yes.
Mr. Weitz. How much was each ticket to the dinner?
Mr. NuNN. $1,000.
Mr. Weitz. And was there a set number of seats per table ?
Mr. NuNN. Yes, 10 per table ; that is $10,000 per table.
Mr. Weitz. If the 'W^ite House had wanted to get credit for the
milk producers' contribution to the dinner from the Republican Na-
tional Committee, that is, credit from the Republican National Com-
mittee, would that again have been something that could have taken
place between the White House and the Republican National Com-
mittee without you people knowing about it ?
Mr. NuNN. Oh, yes, without our knowledge. We wouldn't have
known anything about that.
Mr. Weitz. Do you recall how much was contributed by the milk
producers, the three dairy co-ops, or their political trust to the dinner?
Mr. NuNN. Well, I tried to reconstruct some of it and I think some-
where around $60,000 or more ; $60,000 sort of sticks in my head, but
there again they would have it over at the Senatorial Campaign Com-
mittee. It is on the records.
Mr. Duncan. This is the March of 1971 ?
Mr. Weitz. Right.
Mr. NuNN. Wliatever their records are, I mean.
Mr. Weitz. Well, I would like to read for you and ask you, with
respect to the following nine committees, which of these committees,
because these are committees that received funds from the milk
producers in the period of March, April, and May of 1971, and I
would ask you which received funds ?
Mr. NuNN. Well, at the March dinner in order to spread the money
that they contributed — in order to do that, we used practically all
of the committees that national had and the Congressional Campaign
Committee had, too, in order to spread the money.
Mr. Weitz. So that if a contribution was made, not directly to a
dinner committee as such, but to the Republican National Commit-
tee, it still might count against their share in the proceeds of the
dinner ?
Mr. NuNN. Oh, yes ; when the final settlement was made and when
it was noted they had been advanced that much.
Another thing that happened through a dinner occasionally, par-
ticularly with the congressional side, they would need additional
funds before the end of the dinner, before we could render an ac-
7540
counting, so we would make an advance of $50,000 or $100,000 or
something of that kind, so that they could go ahead.
There was interchange amongst the committees from time to time,
on the basis of need, more than anything else.
Mr. Weitz. Let me just read the names of the nine committees and
at the end, assuming they probably all were used at the time — at the
end ^ou can tell me if any were not used.
First, Republican National Finance Committee; Republican Na-
tional Candidates Conference; Republican National Committee; Re-
publican National Associates ; Kick-Off 1972 Republican Dinner Com-
mittee ; Republican National Finance Operations Committee ; Repub-
lican Victory Committee; Republican Campaign Committee; Com-
mittee for a Republican Congress ; finally. Republican Congressional
Candidates Conference-
Mr. NuNN. The one that doesn't ring a bell is that candidates
conference.
Mr. Weitz. The Republican National Candidates Conference?
Mr. NuNN. But it could have been used. Probably they were all
used. If the records show that, I would agree.
Mr. Weitz. Well, the records do show the contribution. I am just
asking for your best recollection of whether they were associated witli
receiving moneys for the dinner ?
Mr. NuNN. Yes, if the records show that, I am sure they are.
Mr. Weitz. Do you recall any problem with any of the particular
dairy trusts or the dairy people in the timing of their contribution;
that is, not having the money available before the dinner and either
Mr. Harrison or someone else advancing money for any tickets?
Mr. NuNN. It could have happened. That very often happened
that people would not have the money available and it would come
in later and we would extend credit to them and so it could have oc-
curred with the milk producers. I don't recall offhand. It seems to
me there was something about that, but I have no recollection of it
offhand. Again, the records would show because following the dinner
there would be a sheet that would show those that were outstanding
and had not made payment but had been extended credit. So it would
show on those records.
Mr. Weitz. Do you know who kept the records ?
Mr. Nttnn. Well, let's see. That may have been Lynda Clancy at
that time. I'm not sure. No, I guess not. Maybe she came in later.
Mr. Weitz. I think she may have told us she did.
Mr. NuNN. She could have. She has custody of the records now and
I presume she could tell you that.
Mr. Weitz. Did you speak with, either at the dinner or before or
after the dinner, any of the representatives of the daily co-ops, par-
ticularly from your State of Kentucky ?
Mr. NuNN. Not that I recall. The firet member of the dairy opera-
tion that I met, I guess, and that I recall was not too long ago when
I was having lunch — wlien you and I, Mr. Duncan, were having lunch
over at the
Mr. Duncan. The Lawyers' Club.
Mr. NuNN. Yes; at the Lawyers' Club with a man — well, I don't
recall the man's name but he was introduced as being with the Associ-
ated Dairy in Louis\'ille, Ky.
Mr. Weitz. I see, but I meant in 1971.
7541
Mr. NuNN. No, I had no contact with them.
Mr. Weitz. Do you recall any solicitation sometime after the din-
ner, say 4 to 6 weeks after the dinner, to the co-op or its trust in Ken-
tucky in comiection with the dinner, some oversight of a contribution
that hadn't been made but had been committed in connection with
the dinner ?
Mr. NuNN. No, I don't. If there had been anything of that nature,
it would have been handled through Marion Harrison's oiSce.
Mr. Weitz. Do you recall any dealings with Harrison in that
regard ?
Mr. NuNN. I don't recall, but there again, the records would show
if there was an3i:hing.
Mr. Weitz. Did you have a conversation with Attorney General
Mitchell in connection with your joining the Finance Committee To
Re-Elect the President and, in fact, asked to join the committee?
Mr. NuNN. Well, he called me and asked me if I would stop by his
office. I don't recall when that was but again his records would show
that because he had a record of all of his appointments.
Mr. Weitz. Was it after the dinner ?
Mr. NuNN. Yes, it was — well, I guess it was after April 1, if it was
after I had resigned. Again, I don't recall but you would have that.
But he did call me in and ask me what my intentions were and I told
him that I had neglected my home and farming operations for a long
time. He said that he would like for me to stay on in Washington for
the duration of the President's campaign and asked me to think about
it and see if I couldn't extend my stay up here and assist in the re-
election campaign. He said that he expected to be the chairman and
about the same type organization would probably be set up as had
been set up in New York in the previous campaign. So I said, "Well,
let me talk to my family," because I was commuting back and forth,
you know. And I did talk to my family. And then at a later meeting
I agreed that I would continue on in the Presidential campaign and
do what I could to assist in the reelection efforts.
Mr. Weitz. Either before joining the reelection campaign or shortly
after coming on board, were you made aware of any outstanding
pledge or commitment by the dairy producers for the reelection effort. ?
Mr. NuNN. I was told that one of the immediate jobs was the money
coming in from the dairy co-ops and the problem was to set up the
committees to receive these funds. Now all of this was in process
and Bob Bennett was setting up committees to receive fmids from the
co-ops. And, yes, I was made aware of that and it was not going too
well, not very rapidly.
Mr. Weitz. "Wlio did you discuss that with, do you recall ?
Mr. NuNx. Oh, probably Hugh Sloan, probably Herb Kalmbach. I
don't recall specifically. They would have made me aware of that and
particularly Hugh Sloan would have briefed me something about it.
And then from time to time there were discussions with others I am
sure because of the slowness with which this thing proceeded. And I
never did quite understand the reasons for the effort to set this up in
the manner in which it was being set up.
Mr. Weitz. How many committees were either being or to be estab-
lished in that connection ?
Mr. NuNX. Well, as I recall it, it was a couple of hundred, maybe 250.
It seems to me there was a figure of about a couple of hundred com-
mittees we were going to need but
7542
Mr. Weitz. Now I'm talking about the milk producers.
Mr. NuNN. Yes, but the immediate need was for 100 committees.
Mr. Weitz. Then ultimately several hundred ?
Mr. NuNN. Well, I never did get beyond maybe 200 or 300 possibly.
But, no, I never did go beyond that or hear any figure beyond a couple
of 100 or maybe 250.
Mr. Weitz. Wliat amount did you understand would be contributed
to each committee and overall ?
Mr. NuNN. Well, to each committee, now that was another problem.
The contribution was to be only $2,500 and we had such difficulty in
setting up committees, and so I brought up the matter of "why not
make it $5,000," which Avas the limit. I understood that their counsel
would not go along with this. At a much later date I was told that the
reason was that he was afraid that because there were so many com-
mittees, that someone would make a mistake and make two contribu-
tions of $5,000 in one committee and then they would be in trouble.
So it was just set up for $2,500 each.
Mr. Weitz. So that if there was a mistake, they would still be within
the law?
Mr. Ntjnn. Yes, and there was a great problem. Mr. Bennett was
having great difficulty in trying to get together the people who would
serve as treasurers and chairmen of these committees.
Mr. Weitz. Did Mr. Kalmbach or Mr. Sloan or anyone else indicate
what the total contribution would be ?
Mr. NuNN. Not at that time ; not that I recall, no.
Mr. Weitz, Why were separate committees being set up by Mr.
Bennett for these contributions ?
Mr. NuNN. Well, the theory was that they wanted to keep these
committees undercover without publicity as long as possible and that
they felt the best way to do this apparently was to use bank personnel
as treasurers and then people that were close party members as chair-
men, but I never did have any confidence in their ability to keep them
confidential because there were so many people involved in so many
committees and of course it didn't stay confidential very long. And
I couldn't see the need of it because milk producers were filing right
over here to the Clerk of the House. It was a matter of public record.
The only thing that Avas secret about it was that the press had dif-
ficulty in getting a treasurer or a chairman to tell for whom they were
acting. But I believe, anyway, they filed only treasurers' names as I
recall it.
Mr. Weitz. The milk producers ?
Mr. Ntjnn. Yes. And the. treasurers being at the bank, why then,
when they called the bank, no information.
Mr. Weitz. So although it may not have been totally effective, there
was some element of secrecy involved by using bank officials, I take it?
Mr. NuNN. Well, yes. They felt it would not be good business to
disclose immediately that these funds were coming in for the Presi-
dential campaign, politically, because the later you postpone those
things, the better. If you don't, you alert the opposition party that
you are out there active, so then it activates them. They get moving
much earlier too.
Mr. Weitz, Did anyone ever discuss with you any other reasons
for keeping these contributions, as you put it, "undercover," besides
what you have already enumerated ?
7543
Mr. NuNN. No, there was very little discussion of anything of that
nature with me. The discussion with me was: "Let's get these com-
mittees formed and Harrison has some more money." And Harrison
would call me occasionally and would say : "Look, if you will give me
some committees' names, we can send some additional funds in."
Now Bob Bennett was the man setting up the committees, but on
the other hand they didn't want me to press Bob Bennett too hard
because he was the son of a U.S. Senator, So the thing seemed to drag
and so we just did the best we could in getting the committees set up.
It was delayed and slow moving.
Mr. Wefiz. I understand you said Marion Harrison would call you
and say that he had money if you had the committees ?
Mr. NuNN. Yes ; the committees, yes — that tlie money would be avail-
able if we had the committees that the checks could be written to.
Mr. Weftz. Now, was there any reason why it seemed to be a re-
verse situation from the normal fundraising situation where a fund-
raiser presses, or at least solicits, or at least approaches the contributor
rather than the contributor actually seeking out the fundraiser and
informing him that they are anxious to give as soon as the commit-
tees are formed ?
Did you have an understanding as to the relationships or the ar-
rangements between Mr. Harrison and the Committee To Ee-Elect?
Mr. NuNN. No, all I understood was that Mr. Harrison — ^that his
office was the contact for the milk producers' contribution and if they
wanted to make these contributions we should get together a hundred
or a couple of hundred committees. But we needed 100 committees,
and that was the immediate goal we had there.
I couldn't understand the difficulty in getting them together. And
then also Bennett was supposed to do this with his organization or
himself. And it was slow and there was no pressure to be exerted on
Bennett to get him upset in any way. There was no urgent need for
money because funds were coming in from our little direct mail
campaign that was underway at that time.
Mr. Weftz. What was the money from the milk producers to be
used for?
Mr. NuNN. General campaign purposes as far as I was concerned.
I didn't know. I had nothing to do with that end of it. My job was to
try to get the committees established so the contributions could be
made.
Mr. Weitz. Well, didn't you have a discussion with Kalmbach and
Sloan, either separately or together, in May of 1971, discussing what
the best use of the moneys from the milk producers would be?
Mr. NuNN. I could have, I could have. I don't recall. I mean, I could
have very well done so. We had discussions from time to time because
of the slowness with which these funds were coming in. The use of
the money was just general campaign as far as I knew.
Mr. Weitz. Was there first a suggestion that it would be used for
the operating expenses of 1701 and then that suggestion was rejected?
Mr. NuNN. It could very well have been, it could very well have
been. I think my contention all along way that it could be sustained
very easily by direct mail or direct contacts from the committee be-
cause tliere were so few people there and the expenses were not heavy
at that time. I don't recall.
7544
Mr. Weitz. We have a White House memorandum from Gordon
Strachan to H. R. Haldeman in May of 1971 and there is reference to
the fact that both you and Mr. Kalmbach opposed the use of the milk
money for the ongoing expenses of the Citizens' Committee to Re-
Elect. Is that consistent with your recollection ?
Mr. NuNN. It could have been because the committees were being
set up and it could very well have been. There was no reason to dis-
turb the committee setup. It could ^^ery well have been. I don't recall.
Mr. Weitz. Was one of the reasons for that view, if you had it, that
the use of that money might increase the possibility of disclosure of
those contributions?
Mr. NuNN. I don't recall. It could have been. Let's see, well, they
would have had to have transferred the money out of those committees
to other committees. It could very well have been. I don't recall the
details of the thinking behind it at that time. It has been so long ago.
Mr. Weffz. Was there ever any discussion as to a special need or
particular desire to maintain the secrecy of the milk money contri-
butions as opposed to other large eontributions during 1971 ?
Mr. NuNN. No; you see, I guess the reason for the milk producers'
contribution, that is, hopefully, the keeping of that undercover for
awhile, was because it was a fairly substantial amount early. All you
are doing is activating the opposition when you disclose a substantial
contribution early.
Mr. Duncan. You are talking about the memorandum of May 21
of 1971 from Gordon Strachan to Haldeman?
Mr. Weitz. Right. It is already in there. I won't make an exhibit
to this, partly because you can't identify it, Mr. Nunn, and partly
because we already have had it admitted into the record.
Mr. Duncan. He had never seen it.
Mr. Weitz. At the time, yes.
Mr. Duncan. And still hasn't, to my knowledge.
Mr. Weitz. I see. Now, there is a reference in the memorandum to
the effect that the milk money, if it were to be transferred into the
committees holding Kalmbach-collected money, might contaminate
them. It says "might contaminate them," and that is the language;
of the memorandum. Can you explain what that means ? , "
Mr. NuNN. Well, I guess the fear there was — you are increasing
the amount of money in the accounts and the milk producers were
filing, and the other people would not be filing up here. I think that
would probably be it. You see, the milk producers' situation was
peculiar in two respects : One, it was $2,500 when it could have been
$5,000; and the other was they filed with the Clerk of the House.
Mr. Weitz. So from their end they were reporting?
Mr. NuNN. Yes; so they said, "We are reporting and there is no
secrecy here and we are a trust and we have to report." That is what
I understood from Harrison.
Mr. Weitz. Were you aware in April-May of 1971 of 75 checks
of $2,500 each that, in fact, were either prepared or delivered or ready
for delivery but were not delivered or deposited because of the lack
of readiness of the committees ?
Mr. NuNN. Sure I was, because I was following through on that
about that time. I would have* known about those, yes.
7545
Mr. Weitz. Let me ask you this. There is something; that puzzles
me. Both the checks and the records of the dairy trust indicate that the
first series of contributions to these multiple committees was made in
July of 1971. Now in this May 21 memo, it refers to the fact that "76
checks for $2,500 each have been transferred into Bennett-created
committees."
In other words, it is speaking in the past tense. And in fact, Mr.
Nunn, the milk producers' records do indicate voided checks that were:
drawn around that time to numerous committees in the amount of
$2,500 each.
My question is this: Do you have any knowledge as to why the
memo speaks in terms of the past tense, that is, delivery of the checks,
whereas according to the records of the milk producers, they were
voided and weren't ultimately deposited — well, that subsequent checks
were made out and were not deposited until 2 or 3 months later ?
Mr. ISTuNx. Gee, I don't recall that. Of course I had nothing to do
with the depositing of the checks. When I received the checks, I
turned them over to the treasurer and that was the end of it as far
as I was concerned.
Mr. Weitz. So you don't know whether in May of 1971 checks were
in fact delivered to the committees ?
Mr. NuNN. Oh, I think that checks were delivered. I don't recall, I
mean, I don't recall the dates.
I do know this, that there was a long delay in getting these Bennett
committees established. It was very frustrating. I think that it proba-
bly created a bad impression as far as people over there were con-
cerned with the management of the campaign, you know, that since
there was so much delay it must be the fault of the personnel. But
then we had this other problem that on the other hand you couldn't
put any pressure on Bob Bennett. And so I don't recall the dates, but
whatever the records would show should be correct on that.
Mr. Weitz. Did you discuss this matter or any other matter in con-
nection with these contributions with Murray Chotiner ?
Mr. NiTXN. Oh, if Harrison was out of town, yes. Chotiner was in
that Harrison firm up there. As I understood it, Harrison was the prin-
cipal one but Chotiner was involved from time to time and I knew
Murray Chotiner personally. Murray was the man we worked with
in 1970 in the Senate races when John Tower was the chairman of
the committee here. So naturally it would just be a normal thing for
him and I to discuss it if Harrison was out of the city or unavailable.
INIr. Weitz. Did Mr. Kalmbach ever express any other problems to
you or any other reservations he had about the milk producers' con-
tributions other than this delay in the committee's preparation and
also in the $2,500 amounts? Is there anything else that he ever dis-
cussed with you in that connection ?
Mr. NuNN. I don't recall anything. He could very well have done so,
but I don't recall it.
Mr. Weitz. Did he ever raise the problem of the lack of control or
somehow about their being less control over these funds from the
committee's viewpoint and more control of the donor's viewpoint
than from other contributors ?
Mr. Nuxx. Not that I recall, no.
pt. 17
7546
Mr. Duncan, There is one thing that I want clarified there. I don't
think the prior testimony shows he ever discussed with Mr. Kalnibach
the problem of making the checks out for $2,500 as opposed to $5,000.
I think your question presupposed that conversation took place.
Mr. Weitz. Right. The question essentially should have read that
other than these problems, which you were aware of and perhaps
others were, did you ever discuss with Mr. Kalmbach any other prob-
lems in connection with these contributions? I gather your answer
was no ?
Mr. Ntjnn. No, I don't recall any.
Mr. Weitz. Were you aware of any overall pledge to the campaign,
either overall pledge or some monthly pledge or pledge by a timetable
by the milk producers to the reelection campaign ?
Mr. NuNN. Not that I recall other than this 100 committees that we
were to set up. Now, sometime down the line — well, as a matter of fact,
it is fairly recently that I first read that famous letter that was writ-
ten by the former Congressman from over there in Harrison's
office
Mr. Duncan. Pat Hillings?
Mr. NuNN. Yes, Pat Hillings. But I don't recall hearing any figure
at all. Of course I was always accustomed to hearing these boxcar
figures dropped when I was here with the committee and, you know,
in Washington you pay no attention to those until it is actually money
in hand. We always had a policy at our dinner committee where, when
some livewire that was doing the calling would come in and say "Well.
I just sold 10 tables" or "Well, I just sold two tables," or whatever
it was, and he would say "Write it up for me and put it on the record,"
and so forth. Well, we would just say, "Now, look, just don't count
anything until the money is in hand."
And so if I had heard of any figure, I would have paid attention to
it. I did know that the milk producers were very substantial j^eople
and could contribute substantially because they were deducting a lot of
money.
Mr. Weitz. From their members ?
Mr. NuNN. Yes.
Mr. Weitz. Well, how much do you remember was received from
the milk producers in 1971 ? T^t's limit ourselves for the moment to
these committees.
Mr. NuNN. I don't remember the figures at all except in a general
Avay. It seems to me that there was $200,000 or $300,000 that finally
came in there while I was active in the early stages.
Mr. Weitz. Were you reporting your activities to anyone in the
White House?
Mr. NuNN. No; I would just take the checks and turn them over
to Hugh Sloan or mavbe to Gordon Strachan. Gordon was sort of
a runner between the White House and the committee over there and
maybe in a conversation with him he would ask questions of me, or
Sloan would or somebody else, you know, sort of needling me as to
"What about getting some movement on this?" or "What about getting
some movement on that?"
Mr. Weitz. So he would ask about particular areas and not a general
report?
Mr. NuNN. No, I didn't make any general report to anyone over
there.
7547
Mr. Weitz. In other words, you would answer his specific question ?
Mr. NuNN. Oh, yes, sir ; why any question I would get over there,
why of course you would answer it.
Mr. Weitz. Do you recall any questions or conversations with
Strachan about the milk producers' contributions ?
Mr. NuNN. No, I don't recall any but I am sure there were conversa-
tions concerning how it was coming along because it was the one that
was being delayed and dragged out because of the problem of getting
those committees together.
Mr. Weitz. Was the Wliite House aware of this problem ?
Mr. NuNN. Strachan, I assume, was, and I assumed that they were.
Mr. Weitz. Do you recall reporting to Strachan in 1971 and — let's
say September or the fall of 1971 — as to the amounts that had been
received up to that time ?
Mr. NuNN. I could very well have done so. I don't recall it offhand,
but I very well could have done so.
Mr. Weitz. Do you recall either calling him, discussing him, or
otherwise becoming aware of the fact that a $90,000 commitment had
been made by the milk producers ?
Mr. NuNN. I don't recall any commitment.
Mr. Weitz. Or representation of a $90,000 contribution ?
Mr. NTJiSTN. No, I never made any commitment figure of that kind.
Mr. Weitz. Do you recall in the course of any conversations with
Mr. Strachan in 1971 his observations or discussion to the fact that
whatever had been contributed by the milk producers, was below the
amount — was below the goal figure for the amount that was expected
of them?
Mr. NuNN. I do not recall, but it could have happened; but I doubt
it very much because Gordon Strachan did not speculate and did not
give out any information at all. He did specifically, according to my
view of it, what he was told to do and nothing else. There was just no
information from Gordon Strachan.
Mr. Weitz. What about anybody else like either Hugh Sloan or
Herb Kalmbach?
Mr. Ntjnn. Well, Hugh Sloan was our treasurer and of course
Hugh and I might discuss it from time to time if there was some prob-
lem. But about the only ^-NHiite House contact at that time over there
was Gordon Strachan and I do not recall any of the other people being
over. There was just not much activity.
The chief interest was in delegates and things of that nature and
whether someone was going to come out and oppose the President and
that sort of thing.
It was political more than f unclraising. There was no pressure in the
fundraising field particularly and certainly not by comparison with
that that was put on when Maurice Stans arrived on the scene. And I
was advised that we did not want to make any special effort until or
after the Republican National Finance Committee had their — well, I
believe it was their November dinner of 1971. They had a November
dinner and we were not to interfere with that. And hell, if we talked
to very many people, why they would get upset about our interfering
with their activities. They felt that they should get their budget out
of the way before the Finance Committee To Re -Elect started their
activities.
7548
Mr, Weitz. I think you mentioiipd some reference to a concern not
so much with contributions but with positions of newspapers and other
public issues. Did there come a time in the fall of 1971 when there was
some adverse publicity in connection with the milk contributions?
Mr. NuNN. Yes, there were some articles that appeared somewhere
in the news and I cannot recall what State or where it was. It could
have been — no, I do not think it was Washinp^ton. And I was never con-
cerned about it at all. I could not see any problem with it.
Mr. Weitz. Well, did not the articles in addition to Just stating
the fact that there were substantial amounts coming in from a feAv
sources relatively early in the campaign — were there not some sug-
gestions in the articles which did cause concern, linking or suggest-
ing that there was a link between those contributions and the milk
price supports ?
Mr. NuNX. Yes, I think so. At some point in time that came in and
then, yes, there was reason for concern at that time. But all of that
happened before I ever became involved with the committee. I did not
even know I was coming there at the time of those price supports.
Mr. Weitz. You mean the decision itself ?
Mr. NuNN. Yes.
Mr. Weitz. I take it during March of 1971 — and just to backtrack
for a moment, when you were running or preparing for the dinner, I
take it that you had no knowledge of either any action in connection
with those decisions or any active solicitation by Mr. Kalmbach or
others of the milk producers ?
Mr. NuNN. I had none whatsoever. I was so tied up in the dinner
that that was all that was on my mind. ^Yliatever knowledge T might
have had would have been something that was in the press. But, no,
I did not know what was going on.
Mr, Weitz. Now in the fall of 1971 after you were involved, and in
connection with these articles and the investigation by newspapermen
in preparation for these articles, did you discuss both the contributions
and any other matters relating to them with anyone either in the
"\'\niite House or other people connected with the committee?
Mr. NuNN. I could have but I do not know who it would be in the
^Vliite House. I probably did with Sloan and maybe with Kalmbach;
and possibly could have had some discussion with John Dean because
John was consulted on the setting up of the committees, the cliarter
and so forth, and things of that nature. But as to the problems that
would be with the White House, those involvements there, as to that,
no ; our chief discussion was being sure that we were able to get these
committees set up and that they were set up legally and that t;vpe of
thing and just to maintain the confidentiality of funds coming in.
Mr. Weitz. We have another memo and this is September of 1971
from Gordon Strachan to H. R. Haldeman, and it discusses both the
report, by you to Mr. Strachan on the amounts received up to that time,
which was slightly over $200,000. but also it goes on to discuss the in-
vestigation by a reporter from the Minneapolis Star in connection
with an article relating to the milk fund. Now in the course of the
memo Mr. Strachan says that "Bennet has told Nunn that no damag-
ing information has been released."
Now, did he discuss with you what information be considered dam-
aging that either was or was not released ?
7549
Mr. XuNx. Well, the release of the names of the treasurers would
have been — well, I do not mean the treasurers, of the chairmen — was
always considered to be somewhat of a problem because the only infor-
mation that the press had at that time was the treasurers' names, as I
recall it, that were filed over there. I do not believe the milk producers
filed the chairmen but I do not recall anything- specific about that.
Mr. Weitz. AYell, do you recall in September of 1971 meeting or dis-
cussing this matter with — and I know you said with Mr. Dean or Mr.
Kalmbach, perhaps, and Mr. Sloan^ — but do you also remember dis-
cussing it with Tom Evans ?
Mr. NuNN. Tom Evans of New York ?
Mr. Weitz. I believe so.
Mr. NuNN. Could have. He was with a New York law firm and he
came down there and was eventually deputy chairman for a while.
Could very well have been so, yes.
Mr. Weitz. He was a partner in Mr. Mitchell's and the President's
law firm, was he not ?
Mr. NuNN. Yes, and I met Tom earlier and knew him, yes.
Mr. Weitz. Do you remember a meeting together with Mr. Kalm-
bach, Mr. Dean, and Mr. Evans to discuss the possible articles and any
matters in connection with the milk contributions ?
Mr. NiTNN. Could very well have been. I do not recall the specific
meeting, but there could have been because they were considerably dis-
turbed over the publicity concerning the milk producers as to what
damage it might cause the Presidential campaign.
Mr. Weitz. Let me go back. Do you recall any specifics about that
meeting or in connection with discussing the matter with these people
and do you recall any particular views or recommendations that were
made, anything particularly that was said ?
Mr. NuxN. I do not recall any, no. I do not think there was anything
that could be said or any action taken particularly. I do not recall.
I know at some point there the press began to telephone concerning
the funds. They were trying to uncover who these committees were act-
ing for. And at that time of course they were acting for the milk pro-
ducere' committees. We had no funds and the Committee To Ee-Elect
had none at that time, as I understood from Mr. Sloan. I do not know
at what point in time these transfers ever took place.
Mr. Weitz. But they were ultimately acting for the reelection cam-
paign ; wei'e they not?
Mr. NuNN. Yes.
Mr. Duncan. I am sorry but I want to clarify one thing. I think 1
heard you say in enumerating the participants in that conference, I
think you said that Mr. Mitchell was there ?
Mr. Weitz. No. If I did, it was incorrect. I said Mr. Kalmbach, Mr.
Dean, and Mr. Evans.
Mr. NiTNN. I never did see John Mitchell on the second floor, which
was the finance operation during the entire campaign.
Mr. Weitz. Did this meeting take place in the reelection head-
quarters ?
Mr. NuNN. I would think so. I would think so, yes.
Mr. Weitz. Did you ever meet in Dean's office ?
Mr. NuNN. I met in Mr. Dean's office and with Mr. Dean and Mr.
Sloan. I discussed the charters in his office at one time on those
committees.
7550
Mr. Weitz. All right.
Mr. NuNN. I think that maybe Dean either prepared or checked the
charters for the committees.
Mr. Weftz. Were there other large contributions either from similar
or related sources or from any one source, during that period of time
in 19Y1 ?
Mr. Nfnn. Oh, there were a few. It seems to me in 1971 we got a
part of the Claude Wild contribution and I guess the C. V. ^^Tiitney
contribution came in — a ad that was ultimately returned and then a
part of it rereturned early — and then the Phillips Petroleum — well, I
do not remember. That could have been in 1971 or a part of it but I
cannot recall how much. There were probably others.
There was no great active effort going forth at that time, but there
were others. I am sure there were others, but whatever the records
show.
Mr. Weitz. Let the record show that Mr. Sanders has just come in.
Off the record.
[Discussion held off the record.]
Mr. Weitz. Back on the record.
My question is this, Mr. Nunn. There were, as you indicate, other
contributions and although we will return to it later, Mr. Whitney's
contribution also was about $205,000 I think the record will show?
Mr. Nunn. Eight.
Mr. Weitz. So therefore there were other contributions in 1971 of
the magnitude of the milk producers' contribution ?
Mr. Nunn. No, the onlv one would be the Whitney contribution,
which was $205,000. The Phillips Petroleum and Claude Wild would
be somewhere in the range — well, I think Claude Wild's contribution
was $50,000, the first one. I think the Phillips' contribution would be
somewhere around $50,000 or $75,000 or somewhere in there. There
could be others that would be — oh, there could have been some at
the $10,000 or $15,000. I do not recall any other large ones but there
could very well have been. It was so long ago that you just do not
recall it, but whatever the records show.
Mr. Weitz. Was not there a list in fact of different classes of con-
tributors projected like one from 0 to 100 and then one from 100 and
above, meaning $100,000 ?
Mr, Nunn. I do not know. I never had access to those lists. All lists
and things like that were prepared by Hugh Sloan and I never had a
list of that nature in my possession other than by States for the
purpose of dealing with the State finance chairmen at later dates.
But it seems to me that somewhere down the line a list, probably
after Secretary Stans came in, was prepared. But those records were
not available to me.
Mr. Weitz. In the May 21 memo that we referred to, the Strachan
memo, on page 2 he actually says : "Kalmbach and Nunn argue that
the money being collected by Nunn through the direct mail solicitation
and the 0-100 contributors should cover citizens' expenses."
Now were you then aware of people, Avhether or not you saw the
whole list, of people who were considered to be targets of either 0 to
$100,000 contributors?
Mr. Nunn. Those were the ones I just mentioned that were the 0 to
$100,000 contributors.
7551
Mr. Weitz. Similarly were you not awa^-e, whether or not you saw
the whole list, that there were contributors with goal figures that had
been established by someone in the fundraising effort with figures
above $100,000?
Mr. NuNN. No, I cannot say that. At that time we were not setting
goals. That came about after Secretary Stans came into the picture.
There may have been other lists but not that were available to me.
]Mr. Weitz. Well, the ^ery fact of people being targetted in the 0 to
100 grouping, now if there was no one above $100,000, the grouping
would be somewhat needless. Was there not, in fact, a grouping of
people beyond the $100,000 that were being handled by Mr. Kalmbach
and others?
Mr. NuNN. There probably was but not that I had any knowledge
of. We had not gotten organized to that extent at that time. Later on
we were highly organized and we had all sorts of areas but not at
that time.
Mr. Weitz. My point is this. Now let us return again to the milk
producers' situation, even though they had given close to a quarter of
a million dollai-s by September of 1971, by the end of September of
1971, did anyone express any other concern in connection with these
news articles other than the fact that they were large contributoi-s ?
In other words, did anyone relate it back to tlie milk price-support
decision ?
Mr. NuNN. Not that I recall.
Mr. Weitz. During the 1972 campaign or at the outset, was there
a concern expressed by anyone in the White House about fundi-aising
being centralized through various sources so as not to permit various
people with connections to the same contributors all to solicit them
at the same time ?
Mr. NuNN. I do not recall any. There was always a problem amongst
the committees on that score but generally everyone went ahead and
solicited and did not Avorry about duplication of effort or overlapping.
Mr. Weitz. What about'solicitation for nonreelection efforts, strictly
for citizens' expenses, other tlian that — in other words. White House
people or others for their own special projects ?
Ml-. NuNN. There was no solicitation as far as we were concerned for
anything except the reelection effort.
Mr. Weitz. In fact, did you not receive a memorandum fix)m Mr.
Haldeman specifically requesting or prohibiting, rather, solicitation
for purposes other than the reelection effort by the authorized and
organized reelection fundraising effort?
Mr. NuNN. I do not recall any such memorandum. Mr. Sloan may
have received one or someone else, but we never solicited funds except
for one purpose and that was for the reelection campaign, which
included the Senate and the House and the party and so forth.
Mr, Weitz. Right, were you aware, however, of fundraising efforts
by others for other purposes ?
Mr. NuNN. No.
Mr. Weitz. Other political purposes, I mean.
Mr. NuNN. At a later date, yes; I have read reports and so forth
where there was solicitation for other purposes, but not at that time.
Mr. Weitz. Do you know Avhether Charles Colson engaged in any
such independent solicitation for purposes other than the strictly
speaking reelection effort that you were involved in?
7552
Mr. NuNN. I do not specifically know of any. We sometimes would
suspect that people were getting involved in the areas that they
sliould not be in, but I never had any proof that they were.
Mr. Weitz. Did you have an understanding or become aware some-
time in 1971 of a separate — shall we say a separate agreement or
arrangement between Mr. Colson and the milk producers for funds?
Mr. NuNN. Not that I recall, no. As far as I knew, all milk producers
were coming in by way of Marion Harrison's office to us.
Mr. Weitz. To your committees ?
Mr. NuNN. Yes. Now there could have been some funds coming in
to Kalmbach that I would not have known anything about perhaps,
but all I knew about was what was coming to us.
Mr. Weitz. And you do not recall discussing this matter or reporting
this either to Hugh Sloan or to Gordon Strachan ?
Mr, NuNN. I could have discussed it with Hugh. We were always
concerned that someone would set themselves up as a solicitor for the
committee and would be getting funds and using them for their own
personal use. That was a concern even when I vas here with the
committee. So you constantly guard against that sort of thing. Yes,
so that could have been discussed.
Mr. Weitz. I am not talking now in terms of mishandling of books
for personal use but rather solicitation for other political purposes
rather than, strictly speaking, the operation at the citizens' com-
mittee ?
Mr. NuNN. I do not recall any. I do not recall. There could have
been. The whole thing is a little bit hazy at this point in time. It
has been a long, long time.
Mr. Weitz. That is all right. Let me read to you something that may
refresh youi recollection in that connection. In the same memo in Sep-
tember from Strachan to Haldeman he makes the following statement :
"It is Nunn and Sloan's opinion that Colson has established a separate
agreement with the milk people in order to have cash available."
Does that refresh your recollection of any such arrangement that
you became aware of or discussed with either Sloan or Strachan ?
Mr. Nunn. We could have been suspicious of Colson. Colson was
quite an operator at the T\niite House. I do not remember. It does not
ring any bell. I could have discussed it with him.
Mr. Weitz. I take it you do not remember?
Mr. Nunn. I do not recall it, no.
Mr. Weitz. Did you ever discuss the matter with Murray Chotiner
or Marion Harrison ?
Mr. Nunn. No.
Mr. Weitz. Did you ever discuss some separate agreement or sepa-
rate fimd?
Mr. Nunn. Not that I can recall, no.
Mr. Duncan. That memo was the September 11 memo ?
Mr. Weitz. Yes. Did there come a time in 1971, when the milk con-
tributions slowed or terminated or stopped because of some reason ?
Mr. Nunn. Well, they stopped. And as to why, I do not know other
than the publicity that was being given in the press to it, but the pres-
sure from Strachan concerning committees and so forth just suddenly
stopped and the thing just sort of collapsed there at one point in time
and then Stans moved in and we began to move in other directions.
7553
And I did not concern myself with milk producers much after Sep-
tember or October, as far as I recall now, until very late in the
campaign.
Mr. Weitz. Was it your understanding that moneys that were sup-
posed to be contributed or that they intended to contribute were not in
fact contributed in 1971 ?
Mr. NuNN. Well, other than if we expected to use a couple of hun-
dred committees, like 200 or 300 committees, then I do not think we
would use as large a number of committees for milk producer funds
as someone thought we were going to. But, no, I do not recall any dis-
cussion of any specific amounts or anything like that.
Mr. Weitz. But in fact, for example, if someone is asked to contrib-
ute $100,000 and contributes $100,000, 1 suppose normally your percep-
tion of it would not be that the contribution had stopped ? Your per-
ception would be that rather, in fact, it was made.
My question here is : Is there any distinction between that situation
and the milk producers' situation where the expectation on someone's
part is greater than the amount contributed ?
Mr. NuNN. I do not recall. There was no definite expectation, as
fas as I was concerned, on the milk producers because no one had ever
made any commitment to me and I did not know anyone connected
with the milk producers at that time, that is the official group that
they were dealing with. My contact was Marion Harrison. And the
funds stopped coming in really. And I think Kalmbach may have
been interested in that to a greater extent than I at that time.
Mr. Weitz. Was he still involved all through 1971, or did you more
or less take over from him at a certain point ?
Mr. NuNN. When he took a trip abroad, he at that time asked me to
follow up on the committees and getting the funds in, which I did.
I continued to maintain my contact with Marion Harrison. At some
point in time it seems to me Harrison was relieved as counsel for the
milk producers and some other arrangement was made.
Mr. Weitz. Do you remember the name of Jake Jacobsen?
Mr. NuNN. Yes.
Mr. Weitz. Do you associate him in late 1971 or early 1972 with the
milk producers' situation ?
Mr. NuNN. I tell you this. I met Jake Jacobsen at the time that
Secretary Connally set up the Democrats for Nixon.
Mr. Weitz. That would have been later in 1972 ?
Mr. NuNX. I do not remember when it was. Whatever that date,
that Avas when I met Jake Jacobsen shortly after that setup was
underway.
Mr. Weitz. Now, you testified that at some point in late 1971 the
milk producers' contributions stopped.
Mr. NuNX. No ; I say in 1971, but there could have been some going
over into 1972. My miemory is hazy, but whatever the records show.
But they stopped at some point in time and nothing was done,
nothing happened over a long period of time. Then I made a trip late
in the campaign out to San Antonio to try to get milk producers'
funds again,
Mr. Weitz. Well, we will get back to that in a minute but we are
still in this earlier period.
7554
Do you recall at any point where Mr. Kalmbach was in touch with
someone else, either you or Mr. Kalmbach was in touch with some-
one else in lieu of Marion Harrison, like perhaps after he was relieved
as counsel to the milk producers ?
Mr. NuNN. I do not recall. Of course that would not necessarily
have been conveyed to me because my area was getting in the funds,
establishing the committees.
Mr. Weitz. Are you aware of any contacts or meetings between Mr.
Kalmbach and the milk producers in 1972 ?
Mr. NuNN. I am aware of them now. I cannot say that I was at
that time because I do not recall although I could have been from
press reports and so forth. I am aware he was in contact with them
from that, yes.
Mr. Weitz. Have you talked to Mr. Kalmbach about them ?
Mr. NuNN. I have not talked to Mr. Kalmbach since — well, since
I left the campaign over here as far as I can recall.
Mr. Weitz. Did you discuss the dairy situation with Mr. Mitchell
in 19— well, in the first half of 1972 ?
Mr. NuNN. Gee, I do not recall because John Mitchell was never
interested in the finance end of it. It could have been, but I have no
recollection of it.
Mr. Weitz. Wliat about with Mr. Stans when he came on board,
what about either before or after he came on board?
Mr. NuNX. I recall discussing it or mentioning it to Mr. Stans
shortly before my trip to San Antonio. T could have talked about it
earlier, but I have no recollection of it.
Mr. Weitz. Were you aware of an investigation vmderway by the
Justice Department into the possible antitrust violations by the milk
producers in late 1971 or early 1972 ?
Mr. Nttnn. I read the press reports on it. I was aware of it, yes.
Mr. Weit;?;. At that time ?
Mr. NuNN. Yes; whatever was in the papers. Now, no one ever
discussed it with me that I can recall.
Mr. Weitz. Was there any discussion in late 1971 or in 1972 about
any possible relationship, either adverse or positive or negative,
between contributions or solicitations for contributions by the milk
producers and the investigation and subsequent civil antitrust suit
by the Justice Department ?
" Mr. NuNN. I do not recall. There could have very well have been.
Mr. Weitz. Was not that a concern in fact, or was that a subject of
concern ?
Mr. NuNN. You mean the antitrust suit ?
Mr. Weitz. The antitrust suit and the past contributions and the
ongoing solicitations ?
Mr. NiTNX. Could have been, but not that I recall. I have no rec-
ollection.
Mr. Weitz. Did Mr. Kalmbach ever inform you as to the reason —
well, ever explain to you why the contributions stopped?
Mr. Nttnn. I do not recall. He could have, but I do not recall. I
guess it could have been just as soon as the contributions would stop
with the antitrust and so forth, when that would get going, but T do
not recall any advice or conversations concerning it.
7555
Mr. Weitz. Aside from Mr. Kalmbach, did you have any knowl-
edge from wliatcA-er source at the time, that is during 1971 and the
first half of 1972, of the reason that the contributions stopped ?
Mr. NuNX. No ; not that I recall.
Mr. Weitz. Now, I believe in the early interview with us, if my
notes are correct, that j^ou indicated that there possibly was some
discussion with Mr. Stans before April 7 of the dairy contributions,
of the dairy situation.
Mr. Ntjnn. Before April 7 ?
Mr. Weitz. Before April 7, 1972.
Mr. NuNN. There could have been, could have been. I cannot recall
just what the discussion was other than the fact that they had con-
tributed. But I do know that before going* to San Antonio that I
did mention it probably at a meeting.
Mr. Weitz. Right, I am still trying to stick up to the first half of 197Q
for a moment.
Mr. NuNN. No; I do not recall any discussion with Stans, but I
say there could very well have been because when Stans came in,
he did review everything that had been going on and laid his own
plans. I guess it could have come up, that all of the contributors, that
everyone that had made a contribution probably would have been
discussed with Stans or he would have discussed it certainly with
Sloan and probably with me as to the ones I had knowledge of.
Mr. Weitz. Was there any attempt to solicit or receive another
single or series of substantial contributions from the dairy coopera-
tives or their trusts just prior to April 7 ?
Mr. NuNN. Not that I know anything about. Now there could
very well have been, but I did not make any solicitation of those
people at all.
Mr Weitz. Was Mr. Kalmbach still in touch with them at that
point ?
Mr. Ntjnn. I do not know.
Mr. Weitz. That is prior to April 7 ?
Mr. NuNN. I do not know.
Mr. Weitz. Was there any discussion that you were aware of that
indicated that there were such contacts or solicitations prior to April
7?
Mr. NuNN. Not at that time. I just know from what I have read
in the papers since then that he was in contact.
Mr. Weitz. Now between April 7 and the time when you planned
and in fact did go out to San Antonio in October 1972, were you
aware of any further contacts between the dairy people and the
reelection campaign ?
Mr. NuNN. No; I was not. I was so busy during this period with
my 50 State finance chairmen that I just did not know veiy much
about anything going on in those areas during that period of time.
Mr. Weitz. How did you come to arrange for and meet with Dr.
George Mehren ?
Mr. Ntjnn. Dr. Greorge Mehren ?
Mr. Weitz. That was in October of 1972.
Mr. NuNN. Well, following the convention Secretary Stans became
very concerned that we were not going to get together the funds that
were necessary for the campaign. The so-called November Group
that was doing the advertising and television and so forth out in
7556
New York had rather grandiose plans. And as we progressed and
moved along following the convention, funds tightened up again and it
seemed the general public assumed that the President was going to
be reelected and he did not need the money and we had plenty of
money or at least there were a lot of stories out to that effect. And
so we got into October and Secretary Stans estimated that we would
be about $10 million short, of the funds that were needed for the
campaign, based on what the November Group was going to do and
other expenses.
So he reviewed with the entire staff the situation and asked every-
one to review all prior contacts, any new contacts, an3i:hing where we
could come up with some additional funds.
And I guess, but I do not recall the eiact words of what was said,
but I guess I suggested that we should contact the milk producers again
because they are very substantial people. And apparently there were
no objections to this. And I said "Wlien I am home and since I am
part way there, I will go on over to San Antonio and see what can be
done."
And so I talked to Mr. Jacobsen and asked him if he would set up an
appointment with Dr. Mehren. I did not know Dr. Mehren, but I did
know that he was a member of the opposition party and he had been an
assistant secretary, I believe under President Johnson. So Mr. Jacob-
sen said that he would be glad to do so and he called me back and said
that I had the appointment. It was on a. Saturday morning.
And I flew from Tx)uisville I belie\^
Mr. Weitz. Let me stop you there and we will just take it one piece
at a time.
Mr. NuNN. OK.
Mr. Weitz. Wliy did you suggest the milk producers ? I take it that
nothing had happened with them for months and months and you had
not been involved ?
Mr. NuNx. Nothing had happened for months and months and, of
course, the first thing that you do when you are looking for political
money, you find out where the money is located.
Mr. Weitz. Did anyone indicate that they had made a commit-
ment or had represented that they could contribute far more than they,
in fact, had already contributed ?
Mr. NuNN. Not to me they had not. There probably had been some
prior publicity at that time on what they were going to do. I do not
recall when that came into being.
But you see, living down in Kentucky and being a farmer and seeing
those beautiful shiny trucks going by every morning and the deduc-
tions coming off of those farmer's trucks, it is just a falbulous opera-
tion. These people can gather funds together in a hurry and it is just
a logical place you can go for money. There is no reason why you
should not — it did not seem to me at that point in time that we should
overlook the milk producere. It was a possibility.
Mr. Weitz. Who was present at this meeting when the matter was
suggested and you made the suggestion ?
Mr. NuNN". I have not any idea. It could have been at a morning
meeting, just going around the table. You see, Stans had a morning
meeting every morning and would take each individual's comments to
see what he had in mind. At that time I probably said "Why don't we
7557
check on the milk producers and I will be glad to go out and talk to
them." I do not even recall, but I would imagine it was at that time.
Stans was very busy and so in order to get to see him we would
usually bring our notes in for the morning meeting. I cannot say for
sure that was it.
Mr. Weitz. And in connection with that meeting, there was no dis-
cussion after you made your suggestion, of what amounts you should
request from them or how much they had pledged or represented and
had not contributed ?
Mr. NuNN. No; and I do not think that I requested any specific
amount when I was out there either.
Mr. Weitz. Now, in your earlier interview with us — and again it
might have been an error in our notes — but I believe you indicated
that you had asked Marion Harrison to set up a meeting through Jake
Jacobsen. I take it your best recollection now is that Mr. Harrison
was not involved in arranging this meeting in October ?
Mr. NuNN. I think maybe I said I might have discussed it with
Marion Harrison, I think probably Marion Harrison was the individ-
ual that gave me a rundown on George Mehren and that he was a
former member of the Johnson administration. Maybe he could have
suggested that Jacobsen would be a better man than he.
Mr. Weitz. But you contacted Jacobsen ?
Mr. NuNN. Yes ; I did ; and I had a very dim recollection of that too
until I read in someone's notes — and I guess it was George Mehren^s
testimony — that Jacobsen had called him. That sort of confirmed it
in my mind.
Mr. Weitz. Well, you were in touch with Jacobsen, were you not,
off and on in connection with Democrats for Nixon efforts?
Mr. NuNN. Occasionally, but not very often.
Mr. Weitz. Did not he at various times talk to you or urge another
solicitation to the milk producers ?
Mr. NuNN. No ; he never did urge it and did not predict one way or
the other. All he did say was that "I will set up the appointment."
Mr. Weitz. Did he accompany you to San Antonio ?
Mr. NuNN. No, no.
Mr. Weitz. You went alone and met with Dr. Mehren ?
Mr. NuNN. I went alone.
Mr. Weitz. This was on October 21 of 1972 ?
Mr. NuNN. That is what the records show and my expense reports
are not available to me so I will accept that date. Yes, it was very late.
Mr. Weitz. The only purpose for your trip to San Antonio was to
meet with Dr. Mehren ?
Mr. NuNN. To meet with Dr. Mehren ; yes.
Mr. Weitz. As you had indicated before, there is a milk producing
co-op in Kentucky ?
Mr. NuNN. That is right.
Mr. Weitz. Where you live ?
Mr. NuNN. Eight.
Mr. Wettz. Why did not you go and meet with them ?
Mr. NuNN. Well, because I knew the group in San Antonio sort of
controlled what the others did. They generally followed San Antonio.
If San Antonio suggested a contribution, why the others usually
would go along. And also I did not know anyone in the Louisville
co-op either. I suppose if I had known someone personally, I would
have gone there.
7558
Mr. Weitz. You had not met Dr. Mehren before this time either?
Mr. NuNN. No ; I had not.
]\Ir. Weitz. Could you tell us to the best of your recollection — and
I would like you to ^ve us as much detail as possible — what was said,
what transpired at that meeting with Dr. Mehren ?
Mr. NuNN. Well now, for me to tell you what I said and what he
said would be an impossibility. I can tell you in general, based on the
usual solicitation, because that too has been quite a while ago.
There are several things I do recall about it. I know it was on a
Saturday morning and I went out Friday night and stayed overnight
in San Antonio and I got over to Dr. Mehren's office and there was
just he there. The place seemed to be closed down. It was in a sub-
urban area I know, and he and I talked alone for some little time. It
ended up they delivered me to the airport to get my plane back.
My solicitation of Dr. Mehren was the usual one. I may have shown
him the telegram that Secretary Stans had sent to our State chair-
men. We used that as one of our lead-ins. So that was to the effect
that we expected to be about $10 million short in funds and I might
have said that I came out with the thought that maybe they could give
us some additional help and that we were very grateful for what they
had done, and just to see what they could do for us.
And I know Dr. Mehren told me that they would not make any
further contributions to the Presidential campaign, and he said that
also goes for Senator McGovem's campaign.
Mr. Weitz. Let me stop you just for a moment on that and let us
go off the record.
[Discussion held off the record.]
Mr. Weitz. Let the record show that Da^nd Dorsen is present.
I suppose from what you have said, Mr. Nunn, that before you
did go to San Antonio you found out how much they had contributed ?
Mr. NuNx. I guess that I did. I do not recall.
Mr. Weitz. Or just as a general matter, you knew?
Mr. NuNN", In general, yes.
Mr. Weitz. Did you mention any specific figures to Dr. Mehren ?
Mr. NuNx. I do not recall that I did. I could very well have done so,
but again, as I say, I do not recall what I said and what he said. I do
not believe that I did.
Dr. Mehren said that I did not in one place and then he says in an-
other testimony that I did. So he is not a very reliable source as to
whether I did or not.
But I do not recall mentioning any specific figure. I do not think
he let me get that far along. He cut me off pretty short on this thing
of no further contributions to either of the Presidential campaigns.
Mr. Weitz. Did you make any specific requests or ask for it more
specifically than the Presidential campaign for the President, than
the reelection campaign for the President, that is, some vehicle such
as Democrats for Nixon or the finance committee ?
Mr. NuNX. I do not recall that I did. I think that Dr. Mehren pretty
much took over and began to explain to me some of his problems. One
thing that I do recall and I was impressed by the fact that he had 50
farmers as directors. He was telling me how difficult it was to deal
with farmers and I said, "Now, you are talking to a farmer."
7559
And when he was so adamant and so flat-out on that no contribu-
tions to Presidential campaigns, then I put on my other hat and began
to solicit for the Senate and the House Members.
And I think, as you recall when I was in here the last time, why I
mentioned the same subject that we had a list of incumbent Senators
and incumbent Congressmen and nonincumbent candidates of both
Houses that were always available. So that where we were turned
down on a Presidential contribution, we would endeavor to get money
for the candidates most in need. And so from time to time I would
check with Buehl Berentson and whoever was in charge over on the
House side, as to which candidates seemed to be most in need of money.
And we were constantly in effort on behalf of Senate and House
candidates.
Mr. Weitz. Specific candidates who were in need?
Mr. NuNN. Specific candidates. We even did this in some instances
where they were making — the man was making a contribution to the
committee but he was also solicited for the House and Senate. This is
part of Secretary Stans' operation and, as part of that, we asked our
State finance chairmen and others to do the same.
Mr. WErrz. Now, you had gone to San Antonio, however, I take it
for one reason and that was to try to make up this debt ?
Mr. NuNN. Make up the debt that we had, that is right.
Mr. Weitz. And that was a deficit pursuit at least by Secretary
Stans for the President's reelection campaign ?
Mr. NuNN. That is right.
Mr. Weitz. Now, when you made this solicitation on behalf of the
congressional committees or this recommendation, now do you remem-
ber exactly what you said or how you put it ?
Mr. Ntjnn. I do not recall exactly. I remember what I generally
said. I generally talk about the candidates that were in need of funds,
how important it was for President Nixon to have a Republican Con-
gress. We stressed this all along. We stressed it was a very important
part of our operation. We felt that the polls indicated that the Presi-
dent was going to win big and that we should be able, with somewhat
of a landslide vote, we should be able to bring in a Republican Con-
gress, but we wanted to insure this and there were many of the can-
didates that still needed funds.
Mr. Weitz. Did you in any way indicate to Dr. Mehren that at
least some of the money that might be contributed by his organization
to the congressional committees, if they were committees rather than
particular candidates, would go for the President?
Mr. NuNN. No, no.
Mr. Weitz. Or for his reelection ?
Mr. NuNN. I probably said to Dr. Mehren, as we did for everyone
that didn't want to contribute to Richard Nixon for one reason or an-
other, that we can go over the list of candidates and the contributions
to these candidates will be tremendously helpful to us because one of
our goals also is to gain a Republican Congress. And we were very
pleased, we were almost as well pleased to get a contribution for the
Senate and House candidates as we were for the committee itself.
I do recall one other thing about the solicitation for the Senate and
the House candidates. The first name that I had on the list and one
that I thought would maybe appeal to Dr. Mehren was Senator John
7560
Tower. And of course Senator Tower is a good friend of mine and I
think an awful lot of him. And George Mehren almost went through
the ceiling. He didn't want to make any to him. He would never do
anything to help him.
I continued down the list of the incumbents and then I went to the
nonincumbents, and he would maybe have some remark or statement
like, you know, "this fellow hasn't been particularly helpful to us."
Mr. Weitz. He wasn't in unanimous accord with the people you
supported ?
Mr. NuNN. No, he wasn't, and I didn't expect him to be because he
was a member of the opposition party and also had been in the John-
son administration.
Mr. Weitz. Is there anything else about the meeting that you can
recall ?
Mr. NuNN. Well, the result of the meeting was that he told me that
he either had or he was considering recommending to his board that
they make a contribution to the Senate and to the House committees.
I don't know whether he told me at that time that it was going to be
$150,000 to each, or whether I got a call telling me that. Again he
could recall, and our records should show it, but it seems to me he
probably told me at that time, that he was going to make a r'^commen-
dation to his board that this be done.
Mr. Weftz. That is that $150,000 be contributed to each of the two
committees ?
Mr. NuNN. To each of the two committees, yes. And I told him
this would be greatly appreciated and I hoped that he was successful
in getting this done. Then he told me something about the Johnson
ranch and a trip that he was taking down there. I don't know whether
he was going to see Pr-esident Johnson or not, but he asked me what
time my plane was going out and I told Ixim and he said : "Well, I'm
going that way and I will be glad to drive you to the airport" wliich he
did.
Mr. Weitz. Now you had mentioned, you had testified that a number
of both incumbents up for reelection and nonincumbents whom you
favored and you indicated that Dr. Mehren
Ml-. NuNN. No, not that I favored, that the committee on the Hill.
Mr. Weitz. Yes, that they needed f imds.
Can you explain then why Dr. Mehren either told you then or there-
after that they would contribute substantial funds to the committee
for it to distribute to anyone it wanted, including candidates such as
Senator Tower, whom Dr. Mehren quite explicitly indicated he did not
support ?
Mr. NuNN. I don't think we got into any discussions as to why he
would contribute to the committee.
The list that I had of individual candidates that needed fmids was
quite long. Now I don't recall. There could have been some discussion
as to some candidates — well, I do recall John Tower and he did not
want Tower to receive any funds.
Mr. Weitz. Did you have any discussion or do you know Avhy he
didn't take down the list and contribute to the candidates that he did
favor ?
Mr. NuNN. No, I do not. I don't think he knew much about the Re-
publican candidates because of his being a member of the opposition
party.
7561
Mr. Weitz. Of course he indicated that he wasn't the only one re-
sponsible, I suppose, but wasn't there some discussion about the use-
fuhiess, either at that meeting or shortly after, if he called you
to notify you of the contribution, wasn't there some discussion of the
usefulness of the money for the President ?
Mr. NuNX. No, other than that any funds that would be contributed
to the Republican Party, to any candidate who was running for elec-
tion or reelection on the Republican ticket would automatically be
helpful to the Pi-esidential campaign.
Mr. Weitz. In the Congress but not for the reelection of the Presi-
dent himself?
Mr. NuNN. Oh, it would be helpful to the President's re-election for
any Congressman or Senator to have recei\'Bd a campaign contribu-
tion, and particularly that late in the campaign, because that late
in the campaign, the odds were that that money would be used for
election day expenses. The hauler that is going to bring in that voter
for the Senator or the Congressman that is running on the Repub-
lican ticket, well the odds are that he is a Nixon voter, too. So funds
coming to Republican Senators and Congressmen at that stage of the
campaign would be tremendously lielpf ul to Nixon.
Mr. Weitz. Did he indicate the way it could be used for the media
for the President ?
Mr. NuNN. I probably mentioned to him that one of our problems
was media money, this almost $10 miillion that Stans had wired to all
of our State finance chairmen that we had to have was because of
this November Group in New York, which had a grandiose plan for
a lot of late television and so forth.
Mr. Weitz. Was there any discussion of how this money contributed
to the committees might go to cover some of those expenses?
Mr. NuN?v". None of tliose, no. no, no. I don't think we got into any
discussion, particularly as to how Congressmen and Senators might
use it other than on election day. That is usually what happens to late
money that is coming in. I have been in many campaigns and you get
down close to the end and you find that, well, for election day expenses
we haven't got any money because we spent it all on TV and other
things.
Mr. Weitz. I believe you know Bob Odell. of course ?
Mr. NuNx. Yes, I do.
Mr. Weitz. What was his position ?
Mr. NuNx. Well, Bob Odell was the director of the Republican Na-
tional Finance Committee. He also assisted and worked with our com-
mittee and coordinated with the committee down there.
You see, following the convention at this period we are talking
about, Secretary Stans was chairman of Bob Odell's committee as
well as chairman of the committee that I was working for.
Mr. Weitz. Mr. Odell, I take it he is fairly well experienced in
political cami>aigns ?
Mr. Nuxx. He should be. Well, in finance, yes.
Mr. Weitz. Especially from the finance side ?
Mr. NuNX. Yes.
Mr. Weitz. Now, Mr. Odell has testified before the committee, in
his opinion, that money as late as this in the campaign could not have
been used judiciously for a particular Senator's campaign. Can you
reconcile his opinion with yours ?
30-337 O - 74 - pt, 17 - 3
7562
Mr. NuNN. Well, Mr. Odell is speaking as a finance man who never
ran a campaign in his life and knows nothing about the political side
of it. Any campaign operator will tell you that those last few days
of getting together on election day expenses for the organizations go-
ing out there to bring out your vote is tremendously important, and
you are always scratching around at the last minute trying to get
those funds together.
Money coming in that late may be difficult to use in the field of the
media, yes, because you can't put together the television programs.
You can get together election night activities maybe, though.
Anyway, it is tremendously useful.
Mr. Weitz. How soon after the October 21 meeting with Dr. Meh-
ren did you inform the committees of the contributions ?
Mr. NuNN. Well, when I returned, I met with Secretary Stans and
told him that my mission had been unsuccessful as far as the Finance
Committee To Re-Elect was concerned, but I did feel that I had been
successful as far as the committees on the Hill were concerned and I
said, "of course, that you never count it until it actually arrives."
I didn't bring any funds with me.
And he said, "Well, that is fine." He said, "Contact the two commit-
tees and see if they can't make some repayment on the loans that we
have advanced."
Mr. Weitz. Wliat loans were those ?
Mr. NuNN. At the time of the Republican National Convention in
Miami Beach, Secretary Stans declined — now this is as chairman of
the Republican National Committee — declined to take a fair share of
the funds from the dinner that was held down there and he gave it to
the two Hill committees, and that was first.
Then at later dates he had advanced additional funds to the sena-
torial committee and to the House committee with the understanding
that, if at a later date they came into funds, that they would "repay all
or part of these advances. This was sort of customary in transferring
funds back and forth and I guess Secretary Stans assumed that, if
they received these checks, they should be in a position to repay some
of the funds that he had advanced.
Mr. Weitz. I take it that the heads of those committees, the con-
gressional committees, were aware, of course, at the time of the trans-
fers and so forth, that they would be expected to repay, if possible?
Mr. Nltnn. Oh, yes. This is more or less an implied understanding
on those things that if you do get into a position to repay, you do.
Yery often in campaigns you come into late moneys and that makes
that thing possible.
Mr. Weitz. And I take it also, that when the transfers that we are
going to discuss subsequent to the milk money coming in were made,
that it was discussed that these were in fact repayments or in response
to those earlier transfers as repayments of loans ?
Mr. NuNN. Well, that was pretty ob\nous. I don't recall the words
of what I said and what he said but, as I recall it, I talked to Senator
Dominick and to Bob Wilson. That would be the normal thing to do.
They were the chairmen of those two committees.
I was hopeful that the funds would come in from San Antonio. And
I negotiated with them what they thought they could do toward a
partial repayment on the indebtedness.
Mr. Weitz. Well, what did they decide ?
7563
Did you talk with both Dominick and Wilson ?
Mr. NuNN. I'm not positive about Wilson. I think that I did. I think
that I talked to Dominick, too. There was so much going on and the
pressures at that time in the campaign are almost unbelievable when
you are sitting there with hmidreds of telephone calls coming in and
50 States that you are worndng about, but I am sure I would have
talked to the chairmen of the committees.
Mr. Weitz. When Secretary Stans made this observ^ation that the
moneys could be used to repay the loans, didn't you tell them that the
milk producers had specifically not wanted to contribute to the Presi-
dent's campaign ?
Mr. NuNN. I probably did and they didn't contribute to it. That had
210 relation to the contribution to the President's campaign. That was
not a contribution to the President's campaign.
Mr. Weitz. ISTow, if, as we will discuss later, the only way that those
moneys could be transferred to the reelection campaign was the avail-
ability of the money from the milk producei^ and that was the con-
tingency upon which you talked with Senator Dominick and Repre-
sentative Wilson, wouldn't in fact that money then become the source
of the repayment to the finance committee ?
Mr. N'tjnn. Not necessarily. They deposited those moneys in their
own accounts.
Mr. Weitz. You mean they didn't endorse them over to the finance
committee ?
Mr. N'uNN. They certainly didn't. If we had wanted that money for
the finance committee, what I would have said to those gentlemen, I
would have said : "We would like to have this money transferred to us"
and I would have asked for the entire amount. There was no splitting
up of the milk moneys at all. What we were doing was getting some re-
payment on the indebtedness.
Now, as to how much the indebtedness was, or what the total repay-
ment was, I don't know, because I did not get into those figures. I did
not have access to those figures.
Mr. Weitz. Well, how did you know the $150,000 to each committee
was sufficient?
Mr. NuNN. Was sufficient ?
Mr. Weitz. To cover the loans.
Mr. NuNN. I didn't know that it was sufficient to cover the loans.
I don't know whether it did cover the loans. I don't think it was. I
think the loans were much greater than that and I doubt they were
ever covered.
Mr. Weitz. Do you know why the loans weren't reported in any of
the reports of any of the committees during that period ?
In other words, the reports in that period don't reflect any loans or
transfers between the committees.
Mr. NuNN. I don't know. I didn't know that. No, that was out of my
area. I had nothing to do with that.
Mr. Weitz. What was decided with Dominick and Wilson ?
Mr. NuNN. I don't recall, but apparently from my efforts to recon-
struct the thing and talking with the personnel of the two commit-
tees, I called the two committee staff members and told them that I
had talked with their respective chairmen and I asked them to make
out checks for whatever the amounts of the checks were and to send
them to the Republican National Committee.
7564
Mr. Weitz. Who did you talk with at each committee? Do you
recall that ?
Mr. NuNN. I talked to Lynda Clancy I know over at the Senate
committee and I prcybably talked to Ed Terrar at the Eepublican
Congressional Campaign Committee.
Mr. Weitz. Do you know when you first notified them?
Mr. NuNN. Oh, right after I returned from San Antonio.
Mr. Weitz. Let's see, the 21st was a Saturday ?
Mr. NuNN. It must have been probably a Monday or Tuesday.
Mr. Weitz. Now, if Lynda Clancy recalls that you called either on
the 26th or the 27th, but probably the 26th, is that consistent with your
recollection ?
Mr. NuNN. I have no recollection of it whatsoever except that I re-
call calling her sometime right after the return. I called everyone
shortly thereafter.
Mr. Weitz. Do you remember what you told Lynda Clancy?
Mr. NuNN. No, I probably told her the amount of the check to
draw and send to the Republican National Committee.
Mr. Weitz. Did you tell her that the milk money was coming in and
that out of that money she was to draw the checks ?
Mr. NuNN. No, not out of that, no. I probably told her the milk
money was coming in and when it arrived, to deposit it into the
accounts.
Mr. Weitz. And you also told her what ?
Mr. NuNX. I probably told her I had discussed this with Senator
Dominick and over on the other side with Jidb Wilson and that this
3uld make it possible for a repayment to our committees, and that we
had agreed on whatever x number of dollars was involved there, and
to write out the checks and send them over. I don't recall what I
said and what they said. But Lynda has the figures and so does the
House committee.
Mr. Weitz. Did you discuss with Miss Clancy how much of the
money from the milk producers was going to be kept by the committee,
by the senatorial committee ?
Mr. NuxN. Not that I recall. T may have. Miss Clancy could have
said something about what this was going to do to their bank account
or anything of that nature. I don't recall.
Mr. Weitz. I take it you are not saying that you did not tell her a
certain amount would be kept by the conniiittee. but rather you don't
recall ?
Mr. NuNN. I don't recall I talked about the amount she was to send
to the Republican National Committee. As to the exact amount, I
don't recall, but I know that I would have told her that, and I would
have told Ed Terrar, if he is the man I talked to or whoever I talked to,
because this would have been the normal thing to do.
Mr. Weitz. But just to make it clear, you are not saying you did not
tell her a certain amount would be retained by the senatorial commit-
tee from the contribution but that rather vou do not recall telling her
that?
Mr. NuNX. T don't recall telling her that. She may have said this
does thus and so to our bank account or something like that. It may
have come up in discussion. I can't recall. It has been a long time.
INIr. Weitz. Did you have a similar con\ersation with Mr. Ed Terrar
or someone on the congressional side ?
7565
Mr. NuNN. Terrar, I would think, yes. Ed Terrar would probably
be it, because I think he was working in that same capacity over on
the House side at that time. I don't believe he is there any longer.
]\Ir. Weitz. Let me get this straight. Who was the money supposed
to be transferred to from the two committees, from the congressional
and the senatorial committees ?
Mr. NuNN. The Republican National Finance Committee. You see,
Stans was chairman of the Republican National Finance Committ-ee
also. He was acting in two capacities at that time. And his advance to
these two committees had been made from the Republican National
Finance Committee, I believe. Again, I don't know. I don't have rec-
ords or access to that and I know nothing about the Republican Na-
tional Finance Committee's affairs since the 1971 budget meeting,
which I think was the last one that I attended.
Mr. Weitz. Did you talk ^vith Bob Odell about these transactions?
Mr. NuNN. Oh, probably so. Bob Odell was sort of a right arm down
there. He worked with me at the committee and he was the director of
the Republican National Finance Committee. The Republican Na-
tional Finance Committee supplied the list usually that was used for
solicitation. They handled the computer operation. Bob Odell had a
big telephone operation going.
Mr. Weitz. Do you remember what you told him about the moneys
he would be receiving ?
Mr. NuNN. I don't recall.
Mr. Weitz. Did you give him any instructions as to what he was
supposed to do with the money ?
Mr. NuNX. I don't recall, I don't recall. That probably would have
been Secretary Stans' area because Secretary Stans was chairman of
that committee and I was not a member of the Republican National
Finance Committee.
Mr. Weitz. Therefore, if either you or Mr. Stans issued instructions
to Mr. Odell about the transfer of moneys to the finance committee
from the moneys received from the two congressional committees, it
was not you but rather Mr. Stans ?
Mr. NuNN. Probably. I don't know why Odell would take any in-
structions from me on transferring the funds. These people were work-
ing for someone else. Odell would take his instructions from Stans,
who was chairman of the committee and certainly not from me. I wasn't
even a member of the Republican National Finance Committee.
I could have discussed it with him for some reason. I don't know why.
Mr, Weitz. Well, you had discussed it with Secretary Stans, I take it,
when you returned from San Antonio and he in fact had told you to
get in touch with the congressional committees and perhaps see if they
could repay the money. Therefore, in dealing with them, you were not
members of those committees either but you were acting under Secre-
tary Stans' direction ?
Mr. NuNX. That is right and I dealt with the chairmen, as I recall
it of those committees because I don't think that Miss Clancy and Ed
Terrar would take instructions from me, although they could because
it was a repayment of indebtedness that was on the books and was due.
Mr. Weitz. Do you remember what instructions you gave to Lynda
Clancy and, for example, the senatorial committee as to what dates and
what amounts to issue ?
7566
Mr. NuNN. I don't remember it at all. I wanted to be sure that it was
not construed as a division of milk money. I do know that.
When the checks came in, they deposited the checks in the usual
manner and then they made the payment on the indebtedness.
Mr. Weitz. Wliy Avere you concerned that it wouldn't be construed
that way ?
Mr. NuNN. Because it was not that way. That is all.
Mr. Duncan. I'm not sure he understood that question.
Mr. Weitz. Could you read back the last question ?
[Whereupon, the reporter read back the previous question and
answer.]
Mr. Weitz. Do you want any further elucidation of my question?
Mr. NuNN. Yes.
Mr. Weitz. You said that you asked her to deposit the money and
make certain disbursements in a way that it would not be construed
Mr. NuNN. No, not in a way. I told her specifically, I am sure, to
make a check out to the Republican National Committee and the date
because it was not in any sense of the w'ord a "division" of milk money.
It was a repayment of the indebtedness that the two committees had
incurred by accepting the loans from Secretary Stans.
In other words, I was carrying out Secretary Stans' instructions.
Mr. Weitz. And his instructions were based on the fact that, if the
milk money did come in, the funds generated from that could be used
to repay the loans ?
Mr. NuNN. No, not the funds. But this should make it possible — well,
to see if this would make it possible for the two committees to make
repayments.
Mr. Weitz. Right, and without that contribution he would not have
given you that direction ; is that right ?
Mr. Ntjnn. That is right. This was a rather unexpected contribution
that we knew they were receiving or should receive late in the cam-
paign and w^e had reasons to believe that this would swell their bank
accounts to the point where it would be possible for them to make some
repayment. Now, if these gentlemen had said it doesn't make it possible,
or our bank accounts are in the red, that would have been something
else. But they were able to make these repayments.
Mr. Weitz. Now, Mr. Nunn, you said that when you went out to see
Dr. Mehren, you made it clear that if he was not interested in contribut-
ing to the Presidential compaign, that there were numerous Senators —
and you gave him a list or listed a number of people
Mr. Nunn. Now, let's don't put words in my mouth. I didn't say it in
those words.
When we finished our discussion and I had a flat turn-down on the
Presidential compaign, then I said to Dr. Mehren — and this was the
usual procedure — "You know, it is very, very important that we carry
a Republican House and Senate and we have many of those candidates
that need help." And then I had a list which I produced. In fact, I
have that list with me because it was the same one that I brought in here
the last time that you people would not discuss or talk about it.
Then I proceeded to discuss that list or a part of it with Dr. Mehren,
and I completely got away from the Presidential compaign. I was
dealing only with the Senate and the House candidates and their need
for money.
Mr. Weitz. Could you tell me how those Senators and Congressmen
or candidates for those positions benefited from the milk contributions ?
7567
Mr. NuNX. Well, I don't know. That was up to the people up here
and however they distributed it, and however they handled the money.
I don't know whether they gave it to nonincumbents or what.
Mr. Weitz. What I am askings you is this. In light of Secretary
Stans' direction to see whether — if 1 am paraphrasing this correctly —
whether the committees would have money to repay the loans previ-
ously made to them, in light of this direction, in light of your discus-
sions with Senator Dominick and Representative Wilson, in light of
the subsequent transfers from the senatorial and congressional com-
mittees to the Republican Finance Committee, could you tell us how
the milk money contributions in October of 1972, made to the Senato-
rial and Congressional Finance Committees, ultimately benefited Sen-
ators and Congressmen or candidates for those positions?
Mr. NuNisr. I don't knoAv. I don't know Avhat the committees did with
the funds they had on hand. The milk money made it swell their ac-
counts to where we thought it would be possible for them to make some
repayments to us. Now, they might have had a lot of other funds on
hand.
Mr. Weitz. Well, if they had, what need would they have for t e
funds which would form the basis of your solicitation of Dr. Mehre: . ?
In other words, you said to him that these people needed money, and
you asked him to contribute.
Mr. NuNN. That is right. They gave me a list of candidates tjif't
needed money and both of the committees contributed directly to
candidates.
Mr. Weitz. Did Secretary Stans or either Representative Yfilson
or Senator Dominick indicate that they couldn't give you the money
because they needed money for Senator Tower and others ?
Mr. Ntjnn. No. I don't recall the words, but I do know that in ^-he
discussion of a repayment on the indebtedness, that we arrived ai a
figure and I talked to Lynda Clancy and Ed Terrar evidently, and that
was it.
INIr. Weitz. Did you call Dr. Mehren over the phone afterward*
and tell him his contributions had swelled the bank accounts of these
committees to the point where they could repay loans ?
Mr. NuNN. I don't think I ever talked to Dr. Mehren again after
this, no.
Mr. Duncan. May I inquire? Do you intend to put the actual
amounts transferred from these committees to the Republican Na-
tional Committee and the amounts transferred from the Republican
National Committee to the Finance Committee To Re-Elect in the
record because the line of your questioning implies that all of ihe
money that was received by the House and Senate committees ^ as
eventually transferred to the Republican National Committee and
eventually to the Finance Committee To Re-Elect and that is not the
case.
Mr. Weitz. I would be happy to enter it into the record. I think the
record shows the following — if you will take my word for it based on
the available records •
Mr. NuNN. Yes ; whatever the records show. I don't remember.
Mr. Weitz. I believe the record shows that on October 30, the sena-
torial committee transferred $65,000 to the Republican National Fi-
nance Committee.
Let's go off the record until I get the records.
7568
[Discussion off the record.]
Mr. Weitz. Back on the record.
As I started to say, on October 30, $65,000 went from the senatorial
committee to the Republican Campaign Committee and the following
week, that is, October 7 or rather November 7, $55,000 was transferred
from the senatorial committee to the campaign committee. Another
transfer is indicated, although it may not be related. And I believe our
records do not show it is related, but there was another one on Novem-
ber 20 of $2,000. That would be a total of $120,000 plus $2,000 from the
senatorial committee to the Republican Campaign Committee.
On November 1, the congressional committee transferred $95,000 to
the campaign committee. The following week on November 7, $6,000
was transferred.
Mr. Duncan. Are you sure that is related ?
Mr. Weitz. No ; I am not sure that is related. On November 7, the
date of two of the transfers, the Republican National Committee trans-
ferred $100,000 to the Finance Committee To Re-Elect the President.
The following week on November 13, the Republican Campaign Com-
mittee transferred $100,000 to tlie Finance Committee To Re-Elect
the President.
Let me also say that our record is complete. I take it obviously that
at each executive session, not all facts are brought out, but that all of
these facts are complete and I think it is useful to state in this record
that our record is complete as to all of the transfers.
Mr. Duncan. I don't think the record here reflects what the total
contribution was from the milk producers' committees to the Senate
and the congressional committees. Did you say it was $800,000 ?
Mr. Weitz. On October 27, 1972, or at least as of that date, checks
on those dates for $150,000 each were made out to the Senatorial Cam-
paign Committee, the Republican Senatorial Campaign Committee,
and the Republican Congressional Campaign Committee.
Mr. Duncan. Do your records show those funds were commingled
with the funds of those two committees?
Mr. Weitz. I believe so.
Mr. Duncan. So that there was a substantial amount of money even
after the payments were made by the Senate and congressional com-
mittees to the Republican Campaign Committee that remained in the
Senate and the House ?
Mr. Weitz. Right, and there is testimony as to the genesis for that
arrangement.
Mr. NuNN. Well, did someone else make contributions? At least
when I was at the committee, contributions were always coming in in
some amounts. Didn't other people, were not they making contributions
to those committees about the same time, too ?
Mr. Weitz. Did you solicit any other contributions that you can
recall at that time ?
Mr. NuNN. Oh, I solicited — well, not specifically, I can't mention
one specifically. But as I said, tliroughout the entire campaign, and
going all of the way back to the very beginning, we solicited funds for
the Senate and for the House. That was a part of our operation. This
was all of the way through the campaign and I did that more so myself
than anyone else because, having come from the Hill and knowing
the problems, and then, too, trying to coordinate with the committees
up here, I guess I did a little more soliciting for the Senate and the
7369
House than anyone else. And I know that indirectly we were respon-
sible for a lot of money going to Senate and House candidates and to
the committee on the Hill right here, to both committees, actually.
This wasn't the first time that I had solicited funds for those commit-
tees. In fact, I never stopped soliciting from the time I left the com-
mittee over here.
Mr. Weitz. Can you explain why Mr. Odell has testified that to
his recollection, there was no mention of any loans or repayments in
connection with these transfers?
Mr. NuNN. No; I can't. I don't know. I don't know who talked to
Odell.
Mr. Weitz. He testified under oath before this committee.
Mr. NuNN. No; there would be no reason necessarily to get into
that area with Mr. Odell because Odell didn't owe anything. The
people who were owing was the Senatorial Campaign Committee and
the House Campaign Committee.
Mr. Weitz. Well, his committee, though, the committee which
he was affiliated witli, they received the transfers from the senatorial
and the congressional committees. If they were repayments, presum-
ably he would know.
Mr. NuNX. They would be to those accounts, yes. I don't recall. I
could have talked to Odell, probably did, but I don't recall what was
said or anything of that kind. I do know what tlie intent was and
what we were endeavoring to do.
Mr. Weitz. Off the record liere.
[Discussion off the record.]
Mr. Weitz. Back on the record.
Mr. Sanders ?
Mr. Sanders. At the time you spoke with Dr. ISIehren in San An-
tonio in the fall of 1972, were you aware that he had consulted with
former President Johnson about a solicitation made or to be made
by you ?
Mr. NuNN. No ; I was not. I read in the papers since, that he had
consulted with him, but even now I don't know whether it was before
or after I was out there.
Mr. Sanders. I was going to ask you that.
Mr. NuNN. I don't know. I don't know but just what I read in the
paper. I do know he was going down to the ranch. No, I can't recall
whether he said he was going down to specifically see him, but he
was going to the ranch that day.
Mr. Sanders. While vou were there he told you he was going to the
LB J ranch?
Mr. NuNN. That is right.
Mr. Sanders. But he did not tell you wdiy ?
Mr. NuNN. No; he didn't at all. He just said "if you are going
out to the airport, I will drop you off." He said he was going that way.
Mr. Sanders. Did he give you any indication that he was seekmg
some independent counsel as to whether he should honor any
solicitations?
Mr. NuNN. No ; he didn't. What he talked about was his 50-f armer
board of directors.
Mr. Sanders. You subsequently learned that he had been to see
President Johnson only through the news media ?
Mr. NuNN. I read it in the news media.
7570
Mr. Sanders. Do you have any knowledge that in September 1972,
that the Kepublican National Finance Committee transferred $104,-
000 to the Eepublican Campaign Committee ?
Oh, I'm sorry, wait a second. [Pause.] Yes; that is correct. To the
National Republican Campaign Committee, I mean to the House
Campaign Committee?
Mr. NuNN. The Congressional Campaign Committee? No; I have
no specific knowledge as to the time and the amount. I do know that
they transferred or loaned funds to both committees. As to when, as
to the dates and the amounts, that was not available to me. I didn't
ask. I probably could have had it, if I had asked for it, but I didn't see
those records. But I do know that was done.
Mr, Sanders. Were you contemporaneously aware of it?
Mr. NuNN. Oh, yes, it started as early as the convention in Miami
Beach when the directors of the Senatorial Campaign Committee and
the House Campaign Committee — and I'm not sure whether Dominick
and Wilson were present or not, but they probably were — and they met
with Secretary Stans and told him of their problem, that they needed
immediate funds, that they were in need of funds. And Stans at that
time conceded the Republican National Committee's share of the
dinner money on the spot, and then, apparently, he advanced these
other funds to them quite soon afterwards and there was the under-
standing that their finance situation might improve as time moved
along and, if so, they would make these repayments.
And the milk producers' funds, of course, were something that came
in late and that apparently they hadn't counted on. We felt that this
swelled their bank accounts to the point where they should be able
to make those repayments.
Mr. Sanders. Were you aware that there were several transfers and
that the total amount transferred into the House Campaigii Commit-
tee was $300,000 ?
Mr. NuNN. $300,000 ? I probably have been made aware since, but
not at that time of the exact amounts because I was so busy and
wrapped up in other things that I didn't get into those details.
Mr. Sanders. Did you have an awareness that it was a figure that was
that substantial ?
Mr. NuNN. Oh, I knew it was very substantial. I knew it was quite
a substantial figure. It would have to be in order to be of any particular
help to them in the Senate and House races.
Mr. Sanders. You would presume, would you not, that those funds
were not held in escrow but made of use to incumbents and non-
incumbent candidates ?
Mr. NuNN. Oh, yes, they were made of use to them, I would think
almost immediately.
Mr. Sanders. And Mr. Weitz asked what would be the benefit to any
House and Senate candidates from the funds transferred in from
CTAPE in October, if the money was then used to repay a loan, well,
but there was a transfer in, to begin with, that was of benefit to the
House and the Senate ?
Mr. NuNN. That is right and the transfer was made early. So at
this stage of the campaign now, Mr. Weitz, you mentioned Odell and
his view as to the use of the money, and at this stage of the campaign,
when Stans was making these loans to the committees, it was useful
for television, newspapers or anything else because you were early
enough then and you had a little time to plan.
7571
Mr. Sanders. Is there aii}^ doubt in your mind. Mr. Nunn, but that
there were truly legitimate transfers into the House Campaign Com-
mittee and that the transfers back later on were in repaj-ment of
those loans?
IVIr. NuNN. No doubt in my mind. Of course that is something
that I didn't handle. Secretary Stans was chairman of the Republican
National Finance Committee. The only part I played in that is the
movement of the fimds to the two committees and then to the Republi-
can National Finance Committee.
Mr. Sanders. You know of no facts which would derogate the
legitimacy of the transactions ?
Mr. NuNN. Pardon me ?
Mr. Sanders. You knew of no facts which would derogate to the
legitimacy of those transactions ?
Mr. NuNN. No, no.
Mr. Sanders. Now the House and Senate Campaign Committees
operate as independent entities, do they not ?
Mr. NuNN. Yes ; they do.
Mr. Sanders. Now, you have had experience on one of them and
indirect experience with the other. Do they not function with some
considerable independence over the acquisition and use of their funds?
Mr. Ntjnn. Yes; they do. On the other hand, the committees are
always very cooperative, too, and they do cooperate particulary when
the dinner operations are going on.
It was customary to transfer funds back and forth and to give one
committee a greater share of the funds than they had originally
agreed to at the time of going into it, because their need was greater
or you would advance funds during the dinner. At one time, of course,
the Republican National Finance Committee financed everything
and then it got too much. This thing has been going on constantly,
this transferring of funds from one committee to another. There is
nothing unusual about it.
Mr. Sanders. Could any funds be transferred out of the House or
Senate Campaign Committees without the genuine approval and
authority of the chairmen of those committees ?
Mr. NuNN. Well, I know when I was the director of the com-
mittee, I would never dream of transferring — well, I couldn't, you just
couldn't do it — you just didn't dream of transferring any funds to
anyone without the approval of the chairman of the committee.
I think there was a limitation on the amount of a check that would
be drawn without approval there at one time. It may have been res-
cinded since. I don't know. But the bank always was the custodian
and the treasurer of the funds.
I never signed a check in my life for the Senatorial Campaign Com-
mittee. There were always requisitions that would go down to the
bank and they would sign the checks. The treasurer was the presi-
dent of the bank, as a matter of fact, for a long time. I think they have
a new one now.
Mr. Sanders. Do you laiow of any circumstances in October or No-
vember 1972, which might indicate that the House and Senate Cam-
paign Committees did not have complete prerogative to withhold re-
]^ayment of the loan to the Republican National Committee if it so
desired ?
7572
Mr. NuNN. It was completely in their hands. They could very well
have told me to ^o to hell, that "We are sorry but we need all of that
money and w^e will pay your loan 10 years from now." There wasn't
anything that we could do about it. It was completely in their hands.
We had no authority over them at all.
Mr. Sanders. Except for what you have learned through the news
media, did you have or do you have any knowledge of any commit-
ment on the part of the AlVIPI or TAPE or CTAPE to provide the
reelection effort with a certain amount of funds in payment for an in-
crease in the milk price support ?
Mr. Ntjnn. No, I never had any know^ledge of anything of that na-
ture. And of course all that you read in the papers, as to what hap-
pened and the timing and so forth, I was Avith the Senatorial Cam-
paign Committee and knew nothing about the period, which the alle-
gations allege all this supposedly to have taken place.
Mr. Sanders. Do you have any knowledge that any payments made
by AMPI or TAPE or CTAPJE or any offers of payment had any
relationsliip to the antitrust suit filed against AMPI?
Mr. NuNN. No.
Mr. Sanders. At or about the same time as the October-November —
well, I guess it was all in October, the 1972 contributions by CTAPE
to the House and Senate Republican Cailipaign Committees, there
were similar contributions to the Democratic House and Senate Cam-
paign Committee. Now did you have contemporaneous knowledge of
those contributions ?
Mr. NuNN. I think Dr. Mehren told me — well, actually I know one
thing he did tell me Avas that he was a member of the opposition party
and he had occupied a position in President Johnson's cabinet. And
he inferred that in this position they Avere nonpartisan, that to a great
extent they Avere looking after the interests of the membership and
their dairy people and that they did contribute to both sides. And of
course I knew that they had made contributions to the Democratic
Party. I think that they felt that President Nixon was better for the
dairy farmer and, therefore, they supported him. But anyAvay, at the
same time they Avere supporting Democratic candidates for both House
and Senate all around the country.
Mr. Sanders. At or about the same time, did you learn of the exact
amounts of their contributions to the Democratic campaign ?
Mr. NuNN. No. I don't think any exact amounts were discussed at
all.
Mr. Sanders. At or about the same time, did you have any knoAA'l-
edge that the contributions by CTAPE to the Democratic campaign
committees were to be under the review authority and control of Mr.
Mills, Senator Humphrey, and Speaker Albert?
Mr. NuNN. No, I don't believe I had that information.
Mr. Sanders. Did you learn that at any subsequent time ?
Mr. Nunn. Yes, I did.
Mr. Sanders. "Wlien did you learn that ?
Mr. Nunn. I don't recall what time. It Avas late.
Mr. Sanders. And by AA^hat means did yoii learn that?
Mr. Nunn. I don't remember, but probably through one of the
Republican National Committees' operations. I don't recall.
Mr. Sanders. Did yo\i learn of any exercise of that authority by
those men?
7573
Mr. NuNN. No, I did not.
Mr. Sanders. Do you know why those particular individuals were
designated ?
Mr. NuxN. No, I do not. Much of what you hear in that area is of
course by word of mouth, rumor and speculation and so on.
Mr. Sanders. Well, before we leave the subject of milk contributions,
I would like to make sure that you have every opportunity to offer
whatever explanation you would 'ike to, in order to spread it on the
record, and also have sufficient opportunity for your attorney to offer
any clarification. You can take it now if you wish. Is there anything
else you would like to say about it ?
Mr. NuNN. I don't know that there is anjrthing further that could
be said to clarify it any more. I do know that at this period in time that
we were all, and I especially, completely overwhelmed with work and
sort of running around like a wild man when you have an election a
little more than a week ahead and you are handling 50 State finance
chairmen.
The only thing that I could see that might have been confusing
would have been a lack of explanation or not enough discussion with
the people involved.
I don't see how anyone could gain the impression that it was a divi-
sion of the milk money, although the milk money evidently did make it
possible for the two committees to make a substantial repayment on
their loans. I'm of the opinion that had we been told to funnel this
milk money to your committee through these chamiels, that if there
was anything of that nature, that we would have asked for the entire
amount.
And I am still confused over the problem. I know what our intent
was and I know the loans were made and I know that there was inten-
tion by both committees, I am sure that, if it was possible, that they
would repay part or all of those loans, as has happened in the past, and
that this was an opportunity for them to make substantial repayments,
which they did.
I guess the thing that created so much confusion is that it was truly
milk money that made possible those repayments because, unless those
contributions had been received, they couldn't have made them. But I
am still unable to see what is wrong with the transaction. Maybe it is.
I don't know.
Mr. Duncan. There is one thing I would like to clarify and that is
the amounts of these transfer. Our records agree pretty much with
yours. We didn't have the record of, well, I believe you said Novem-
ber 27, 1972. We didn't have that transfer of $2,000, which you were
not sure was related or was not.
Mr. Weitz. November 20.
Mr. Duncan. November 20 ?
Mr. Weitz. November 20, 1972.
Mr. Duncan. Well, that would have meant that there was a total of
$202,000 eventually transferred back to the Committee for the Re-
Election of the President.
Mr. Weftz. No, I am sorry. Let me say this. As I say, of all, the
$2,000 I mentioned was not necessarily related. The record does not
indicate that, but the $2,000 on November 20 was from the senatorial
committee to the Republican campaign committee. I think we are in
7574
agreement that the amoimt transferred from the campaign committee
and the Republican National Finance Committee to the Finance Com-
mittee To Re-Elect the President was a total of $200,000, that is, two
$100,000 transfers.
Mr. Duncan. We have another transfer on November 27, 1972,
which again may be related or unrelated, and that is of $12,000. In any
event, it would appear that about $88,000 more or less remained with
the House congressional committees.
Now, I believe Mr. Sanders mentioned that the total advanced in
one way or another to the congressional and Senate committees was
$300,000 ; is that correct ?
Mr. Sanders. That is my understanding.
Mr. Duncan. This record does not coincide with our records. Again,
we may be talking about what Mr. Stans authorized for transfer to
those committees. Mr. Sanders may be referring to what was actually
transferred, because our records don't make that distinction.
The records that we were able to develop indicate that Mr. Stans
actually authorized the advance of some $605,000 to the Senate and
congressional reelection committees at or about the time of the Repub-
lican National Convention in Miami, and that it was against the ad-
vances actually made on that commitment that payments were made
in late November or during November through the Republican cam-
paign committee and back to the Finance Committee To Re-Elect.
I wonder if you could clarify the record as to what the discrepancy
between the $605,000 actually authorized by Mr. Stans and the $300,000
figure, which you mentioned, was ?
Mr. Sanders. I can state to you what information I have, which
is provided to me by Bob Costa, who is an accountant on our staff, and
it may be that he is not completely right. It is not completely clear to
]ne whether his information is based solely on what he was told by
Mr. Ed Terrar or whether some record examination is included in it.
But he has informed me that on September 27, 1972, the Republican
National Finance Committee transferred $140,000 to the NRCC and
that on the same date the Republican campaign committee, another
name for the RNC, transferred $60,000 to the NRCC, and that $100,000
was transferred on October 9, 1972, from the Republican National
Committee to the NRCC. That is a total of $300,000.
Mr. Duncan. Perhaps tlie discrepancy is one of the original authori-
zation for transfers as opposed to what was actually transferred, but
the only records we come up with are those that indicate the original
authorization, which was by Mr. Stans, and I understand that other
than the statement given, the formal written statement, the prepared
statement given by Mr. Stans, he has been unwilling to comment. In
other words, he has been unwilling to testify further, in light of his
pending trial in New York, further in the matter. I suggest that this
ought to be a matter that is clarified.
Mr. Weitz. I might add that is absolutely correct. I believe we have
talked to his attorney but have been unable to talk to Mr. Stans about
this.
Mr. NuNN. Well, the only thing that I can figure out is that I must
have done a pretty good selling job on the effort that I was making
on behalf of these people and overstressed the milk producers' money
and made it more important in their minds than it really was.
7575
Mr. Weitz. Do we want to take a brief recess before we go on ?
[A brief recess was taken.]
Mr. Weitz. Back on the record.
Anything else you would like to add, Mr. Nunn ?
Mr. NuNX. Yes, I would. I would like to point out that my authority
throughout the entire Presidential campaign was somewhat limited.
I had no authority to sign checks, authorize expenditures, or make
final decisions in any manner other than details of handling the 50
State organizations. I had access to no cash boxes and I don't recall
ever having signed a check as a chairman of any committee.
I believe I may have been chairman of one committee at some point
during the campaign.
Mr. Weitz. Anything else ?
Mr. Nunn. My authority Avith the Republican National Senatorial
Committee ended on March 31, 1971 when I left that employment. Dur-
ing my employment with that organization, I signed no cheeks. All
records, all incoming cash and disbursement, were handled by the
treasurer who was an employee of the First National Bank in
Washington.
Mr. Weitz. OK.
Mr, Nunn. Anything else ?
Mr. Duncan. I can't think of anything.
Mr. Weitz. I have no further questions.
[Whereupon, at 5 :15 p.m., the hearing in the above-entitled matter
was concluded.]
FRIDAY, MARCH 22, 1974
U.S. Senate,
Select Committee on
Presidential Caivipaign Activities,
Washington^ B.C.
The Select Committee met, pursuant to notice, at 10 a.m., in room
G-334, Russell Senate Office Building:.
Present : David M. Dorsen, assistant chief counsel ; Alan S. Weitz,
assistant majority counsel; Donald G. Sanders, deputy minority coun-
sel ; Robert, Silverstein, assistant minority counsel.
Mr. Weitz. Mr. Kalmbach, just for the record, would you state your
full name, please ?
TESTIMONY OP HERBERT WARREN KALMBACH, ACCOMPANIED
BY EDWARD P. MORGAN, COimSEL
Mr. Kalmbach. My name is Herbert Warren. Kalmbach, K-a-l-m-
b-a-c-h.
Mr. Weitz. And your address ?
Mr. Kalmbach. My home address is 1056 Santiago, S-a-n-t-i-a-g-o,
Drive, Newport Beach, Calif.
Mr. Weitz. And as we discussed just before we went on the record,
our understandino; here today is that your statement is under oath as
a continuation of your prior testimony before the committee ?
Mr. Kalmbach. That is correct.
Mr. Weitz. Would your counsel please identify himself for the
record ?
Mr. Morgan. Edward P. Morgan, law fimi of Welch & Morgan,
Farragut Building, Washington, D.C.
Mr. Weitz. Mr. Kalmbach, following the 1968 election did there
come a time when you had a responsibility for the surplus funds from
that election ?
Mr. Kalmbach. Yes.
Mr. Weitz. "What was your role of responsibility ?
Mr. Kalmbach. My recollection is that on or about Januaiy 14,
1969, Secretary of Commerce-designate, Maurice Stans, asked if I
would agree to act as trustee for certain funds that were left, over from
the 1968 campaign. And, as I remembered, he categorized those funds
as primarily from the primary campaign period, and indicated that
they would be substantial in amount, and I agreed to undertake that
role, that of trustee.
Mr. Weitz. Were funds actually placed in your physical possession
or control, and certain bank accounts for which you were a trustee.?
Mr. Kalmbach. Yes.
Mr. Weitz. Named account ?
(7577)
337 O - 74 - pt. 17 - 4
7578
Mr. Kalmbach. Yes, and of course these funds came into my — under
my control at a later date, subsequent to that January 14, 1969 meeting
with Mr. Stans.
Mr. Weitz, Now, did there come a time, in 1969, when you were
contacted by a representative of the dairy lobby, or dairy industry ?
Mr. Kalmbach. Yes, on or about April — the early part of April —
as I remember it. I was contacted by telephone by a man by the name
of Milton Semer, S-e-m-e-r, who identified himself as an attorney in
Washington, D.C., and indicated, as I remember it, that he was call-
ing at the suggestion of John Mitchell.
Mr. Weitz. Did he say in what connection he was calling you ?
Mr. Kalmbach. No, he did not. As I recall that very first telephone
conversation, I think I was at the Madison Hotel and he called me
from his office, which, as it turned out, is right across the street. And as
a result of that conversation we met in the Madison Hotel coffee shop,
I think either that day or the next day, for 10 or 15 minutes as a
remember it.
And I think it was at that time that he identified himself as an
attorney, or the attorney for the milk producers.
Mr. Weitz. What was the purpose of his contact, did he indicate
what he wanted to discuss with you, or what in fact, did you discuss
with him ?
Mr. Kalmbach. Yes, he indicated, in the coffee shop, that his client,
or clients — I don't remember if he was representing more than one of
the milk cooperatives or not, but he indicated that his client, or clients,
wanted to make a contribution and that he had been referred to me by
John Mitchell, who he said was a friend of his.
Mr. Weitz. Did he indicate anyone else in the White House with
whom he had talked, and who might have suggested that he contact
you, that you recall at this point ?
Mr. Kalmbach. I don't recall it. He might have mentioned Jack
Gleason, but my best memory is that he said that he was calling — had
called me at the suggestion of John Mitchell.
Mr. Weitz. Did he discuss in that first conversation, anything with
respect to the organization or political activity of his client ?
Mr. Kalmbach. I think that he said that — words to the effect that
his client, or clients, had been very much involved in the 1968 election,
but that they had been on the side, and had been very supportive of
Senator Humphrey in that campaign. And now, words to the effect,
that they were AA;dthout friends in the administration and this was the
reason they wanted to make a contribution.
Mr. Weitz. Did Mr. Semer indicate the amount of the contribution,
or the range of the contribution ?
Mr. Kalmbach. I seem to recall that at that first meeting he indi-
cated $100,000, but I'm not certain on that — of the early April meeting.
Mr. Weitz. Did he specifiy the recipient, or the intended purpose or
use of the funds ?
Mr. Kalmbach. No, he did not. He simply used the word "contribu-
tion", and again, as I say, he told me that he had been referred to me by
John Mitchell. And I don't recall that he indicated any use of the
funds, other than categorizing the funds as a contribution.
Mr. Weitz. And was it your understanding that it was at least for
the purpose, or in connection with, the matter of counteracting the fact
7579
that they had no friends, so to speak, as he put it, in the admin-
istration ?
Mr. I^LMBACH. Yes.
Mr. Weitz. Did he say in what form he intended to make the
contribution ?
Mr. Kalmbach. Again, on this my memory is that he indicated
that — ^and I don't know whether it was at this conversation or a sub-
sequent conversation. We had several conversations, many conversa-
tions, in fact, prior to the time that I actually received the funds in
August of 1969. And either at this very early time, or subsequently, at
some point, it's my memory — and my best memory — that it became
clear that they were talking of contributing cash as their contribution.
Now, one of the reasons, as I try to reconstruct this in my mind,
and it's of course 5 years old now, is that there were no committees out-
standing that could receive those funds that I know of, and it's just my
memory that he suggested cash. And that is my best memory now.
Mr. Weitz. When you took over responsibility as trustee for the
surplus funds from the 1968 campaign, or at any time thereafter, in
connection with that responsibility, did you have any discussions with
either Mr. Haldeman, Mr. Stans, or anyone else in connection with the
preferred form of moneys that you would either handle or receive
from the outside?
Mr. Kalmbach. Yes. At the outset it was made clear to me that Mr.
Haldeman would be the one to whom I would report as far as my
duties as trustee for these funds. And Mr. Haldeman made it clear to
me in many conversations, that I was to retain the nature of the funds
as I received them, insofar as it was possible for me to do so. By that I
mean that the cash I received should remain as cash, and there was a
checking account that I was — that was established in New York City,
some $570,000, and that was to remain as a checking account until I
was ordered to change that, by him.
But it was credited. Cash was to remain cash and the check was to
remain in that form.
Mr. Weitz. 'WTiat about subsequent moneys that you received or
solicited ?
Was there ever any — at any time, expressed by either Mr. Stans or
Mr. Haldeman, to you — preference for seeking cash, rather than some
other form of contribution ?
Mr. Kalmbach. I recall at least once, and I think it was more often,
that in talking to Mr. Haldeman, he made it clear that if I was offered
cash, or if I could obtain cash, I should do so. And the reason for that
was clear, because I was disbursing funds from the cash fimds at quite
a rate, and I think that they were concerned that the funds would be
depleted, and they wanted to add to the funds whenever they could.
But I remember that I talked to Mr. Haldeman and he so advised
me, at least on one occasion that, if you can get cash get it. And I
think there were several other times that he said essentially that
same thing.
Mr. WEiTz.Well, given the fact that there were two different sources
of money at your disposal, one a checking account and one a cash fund,
was the purpose of expending moneys over a period of time, from
the cash fund, and the need to replenish it so it would not be depleted,
7580
because of the nature of the expenditures that were being made, by the
use of the cash ?
Mr. Kalmbach. Yes, that is correct, and I never did disburse it
all from the checking account from the day that it was established
or at the time it was established. And it was established with funds,
as I recall it, that came from two so-called nonreporting States. I think
they were from Illinois and Delaware. Those two States contributed
approximately $500,000.
And then there was a payment of $50,000. That was received, as I
remember it, in the first quarter of 1969. That was received from a
contributor in cash, and then the $20,000 was the balance of what they
call the transition budget that was left over from the Pierre Hotel
transition operation. So in the aggregate, that was $570,000 that was
set up in a checking account at the National Bank of North America in
New York City under the name of The Public Institute, which is a
New York voluntary association.
Now, there were no disbursements from that $570,000 after it was
once set up, until all of those funds were transferred to Mr. Sloan
in the first week of February of 1972, when we zeroed out that account
and also zeroed out the balance of the cash funds that I still held at
that time, which was approximately $234,000.
Mr. Weitz. But that cash fund was essentially the end balance that
you transferred from fimds that you had both received and dis-
bursed over a period of 3 years ?
Mr. Kalmbach. That is correct. The several safe deposit boxes,
one at the Chase Bank in New York, and one at the Riggs Bank in
Washington, and a box at the Security Pacific National Bank in New-
port Beach, Newport Center branch ; and the fourth box was at the
Crocker Citizens Bank main office in Los Angeles.
And we emptied those four boxes, and the aggregate of those four
boxes came to approximately $234,000, so when you add that $234,000
and the $570,000, or however it came up, you came up to approximately
$915,000. I guess it was $571,000, we recorded in the checking account.
So the aggregate amount that I turned over to Mr. Sloan in the first
week of February was $915,000, approximately, of which $571,000
was out of the checking account and $234,000 was the balance of the
cash.
Mr. Weitz. Let's go ofi' the record for a moment.
[Discussion off the record.]
Mr. Weitz. Back on the record.
Just to clarify the record, would you state what the sum total of the
moneys that you transferred to Mr. Sloan in 1972 was?
Mr. Kalmbach. The sum total was approximately $915,000. And,
again, as I think about it, that in addition to the $570,000 in the Na-
tional Bank of North America account, there was approximately
$111,000 in checking accounts that I had established in Newport Beach,
so that the aggregate of those two checking accounts, the $570,000 plus
the $111,000 plus the $234,000 in cash should total approximately
$915,000.
Mr. Weitz. Just one more question before we leave this area. From
the cash in these various safe deposit boxes during the period from
1969 to 1972, I take it that it was those funds that were used for pur-
poses such as disbursements to 'Anthony Ulasewicz and also part of
7581
the funds disbursed for the candidacy of Governor Brewer in Alabama
in 1970?
Mr. Kalmbach. That is correct.
Mr. Weitz. Now, returning to the contracts between you and Mr.
Semer on behalf of the dairy cooperative in 1969, did you have occasion
to meet with Mr. Semer out in California before the delivery of the
contribution ?
Mr. Kalmbach. Yes, and my memory has been refreshed on that, from
notes, and I find that I think I met him in early July of 1969, in New-
port Beach, Calif., and then I met him on or about August 2, 1 think, of
1969, in Newport Beach.
Mr. Weitz. Now, in the conversations and meetings leading up to
the actual delivery of the contribution, is there anything else that you
can now recall that took place or was discussed, in addition to what
you have already mentioned ?
Mr. Kalmbach. Well, yes. I think, again from my memory being
refreshed, I find that at some point, and I think more than once it was
stated to me by Mr. Semer, that his client or clients were talking of
contributing in the aggregate, or as a goal figure for 1969 $250,000.
And he gave me a range, as I remember, of from $100,000 to $250,000
that they had as their goal to contribute in 1969, by December 31, 1969.
Also, my memory is now refreshed, and it's my recollection, that they
made it clear to me that he had three objectives in mind. He, as the at-
torney for these clients; these objectives were, one, I think 90 percent
of parity was a goal. Two was that they would like to have the Presi-
dent address their convention, I think — the convention that was
scheduled to be held in Kansas City the next year. And three, that they
wanted to have some identity or an audience or contact with the
President so that they could meet him. And, of course, that was also
included. And they wanted to be able to talk to various people within
the White House, meaning Milton Semer and his clients making their
case.
Mr. Weitz. And the range of $100,000 to $250,000 was in no way
distinguished from the original discussion, in terms of amount, source,
use of the money, than the original $100,000 figure mentioned by Mr.
Semer ?
Mr. Kalmbach. It was not.
Mr. Weitz. Do you remember any discussions with Mr. Semer before
or at the time of the delivery of the contribution of any alternate
method of reporting or receipt of the moneys to committees and so
forth?
Mr. Kalmbach. Absolutely not. He transferred the funds to me
on or about August 2, and there was no mention of any reporting
requirements, or no request for a receipt for funds at all, that I can
remember.
Mr. Weitz. Do you recall any discussion as to the source of the
funds?
Mr. Kalmbach. No, I do not.
Mr. Weitz. What was your understanding of the source of the
money ?
Mr. Kalmbach. My understanding of the source of the money was
from his clients, and be^^ond that I have no memory at all of him
telling me how these funds were, in fact, raised.
7582
Mr. Weitz. Do you remember any discussion as to the existence of
political trusts as adjuncts to the cooperatives ?
Mr. Kalmbach. Yes, I do, and I think at some point during these
rather — and there were numerous conversations that I had with Mr.
Semer, dating from early April through to the time that I received
the $100,000 in cash — that at various points during this time, he gave
me background on the way these people, these cooperatives, raised
political funds.
Mr, Weitz. But at no time did he specify, and particularly at the
time of the delivery of the money, did he specify the source of the
money ?
Mr. Kalmbach. No, I have no memory at all that he told me of
the source of it, that it was just my understanding that these funds
had come from his clients.
Mr. Weitz. Did you understand whether or not there were more
than — whether there were as many as 20 sources for the money ?
Mr. Kalmbach. No, I did not understand that. Again, as I say, I
don't remember that he particularized as to the source, and it was
just my assumption that he obtained these funds from his clients.
But I was not aware of how, in fact, they were obtained.
Mr. Weitz. Now, you've mentioned — ^but first, before we get to
that — ^before receipt of the money, did you check with, or report to
Mr. Haldeman, with respect to the offer of a contribution offered by
Mr. Semer ?
Mr. Kalmbach. Of course.
Mr. Weitz. Did you explain to him what you've told us today ?
Mr. Kalmbach. I did. I told Mr. Haldeman that I had been
approached by Mr. Semer and I know, too, that I talked to — I con-
firmed with Mr. Mitchell that Mr. Semer was known to him, and
I did talk to Mr. MitchoU, I think it was within a day or two. after
I talked to Mr. Semer, just to make certain that this person was what
he said he was. And it's my clear memory that Mr. Haldeman author-
ized me to receive any contribution that was offered by these people.
Mr. Weitz, Did you also indicate to Mr, Haldeman, discuss with
him, the goals or interests of Mr. Semer's clients ?
Mr. Kalmbach. I don't think at the outset these goals or interests'
were made known to me. But when they were made known to me later
in our conversation, I'm certain that I made those known to Mr. Halde-
man, inasmuch as he was the one to whom I was reporting as trustee.
Mr. Weitz. When you said "later," would this have been later in
your series of meetings but before or contemporaneous with the de-
livery of the firet contribution ?
Mr. Kalmbach. Yes.
Mr. Weitz. Did you also report to Mr, Haldeman upon receipt of
the contribution ?
Mr. Kalmbach. Yes, I did, and I'm certain that I told Mr, Halde-
man immediately or within a week or so after I received the $100,000
that I had, in fact, received that money, and again stated to him the
objectives that Mr. Semer had given to me.
Mr. Weitz. What did you do with the money ?
Mr. Kalmbach. I put it in a safe deposit box in the Security Pacific
National Bank, Newport Center branch, Newport Beach, Calif.
7583
Mr. Weitz. And it was out of those funds, commingled with others,
that was applied to the various purposes, some of the purposes to
which you referred to today ?
Mr. Kalmbach. That is correct.
Mr. Weitz. And the surplus from those moneys was transferred
together with the amounts in the checking account, to Mr. Sloan in
1972 ? Is that correct ?
Mr. Kalmbach. That is correct.
Mr. Weitz. Did you report or discuss your contacts with Mr. Semer
with anyone else that you can recall in 1969 in the White House, other
than Mr. Mitchell, who, of course, Avas the Attorney General, and
Mr. Haldeman?
Mr. Kalmbach. Yes. I think I advised Mr. Flanigan, Mr. Ehrlich-
man, and Mr. Stans. Of course, Mr. Stans was not in the A'NHiite House
as such, but he was in the administration.
Mr. Weitz. I should enlarge that question to include anyone in the
administration.
Mr. Kalmbach. Yes.
Mr. Weitz. Were there any reactions or comments or messages that
you recall from those gentlemen ?
Mr. Kalmbach. No, there were no particular reactions, other than —
oh, Mr. Dent would be another man that I would have advised of tliis.
And I think the reactions were siniiply that I told them, either one
or all of them, told them of Mr. Semer's objectives, certainly, as to the
objectives that he had, that he wanted to meet with certain of the
people within the "\Yhite House.
And Mr. Gleason, incidentally, would be another one that probably
I advised of this.
And it was made clear to me by one or more of these people that meet-
ings would and could be arranged between Mr. Semer and one or more
people within the AVliite House.
Mr. Weitz. Not the President, yet, ])ut at least some aides ?
Mr. Kalmbach. Yes. And I don't recall that the President was
mentioned.
Mr. Weitz. By them ?
Mr. Kalmbach. By them.
Mr. Weitz. But you, in fact, mentioned to them the dairy people's
interest in meeting with the President ?
Mr. Kalmbach. That is correct. And also, of course, their interest
in having the President address their convention, I think, the follow-
ing year in Kansas City, as I remember.
Mr. Weitz. And the setting of parity at 90 percent ?
Mr. Kalmbach. That is correct.
Mr. Weitz. Do you remember taking any steps within the next
several weeks after the receipt of the contribution to, in fact, arrange
or assist in the arrangement of a meeting between Mr. Semer and
Mr. Dent?
Mr. Kalmbach. Yes, I do.
Mr. Weitz. How did you go about that?
Mr. Kalmbach. I think I called Mr. Dent. It was subsequent to the
time that Mr Semer gave me the $100,000, on or about August 2, 1969,
and I think I called Mr. Dent, and Mr. Dent agreed to see Mr. Semer.
7584
And I think I also talked to one or more of the others in the White
House to set up other appointments for Mr. Semer.
Now, I'm not — my memory is not clear as to what people he met
in the administration.
Mr. WErrz. You were not present ?
Mr. Kalmbach. But I was never present at any of those meetings
that I remember at all. But I'm certain that the people that he did
meet in the administration were — it was probably the result of calls
that I made to either Bob Haldeman or John Ehrlichman or Harry
Dent or some of the others that I've named.
Mr. Weffz. Did either you, in your conversations with people in
the administration in comiection with this contribution and the con-
tract with the dairy people, or did any of those individuals with whom
you talked, express any concern about the discussion, both contribu-
tion or contributions — substantial contributions — and certain aims or
interests that they had in substantive policies and in contacts with
the administration ?
Mr. Kalmbach. Excuse me. I'm not certain as to your question.
Mr. Weitz. Did you perceive the dairy people as hoping; that their
contribution would assist them in fjaining, No. 1, access to the White
House, meetings with the President, and some substantive policy
decision with regard to parity, the setting of parity ?
Mr. Kalmbach. I don't know if this is responsive to your question,
but it was clear in my own mind, that as a result of this contribution
and contributions by, or further contributions by, Mr. Semer and his
clients, that meetings would be arranged for Mr. Semer and his clients
to meet with certain people within the White House to put forth his
case on behalf of his clients.
Now, I don't recall that I had any understanding beyond thai as
to any substantive results that would be forthcoming. I simply stated
to one or more of these people in the White House or in the adminis-
tration, the objectives that Mr. Semer had made known to me.
fDiscussion off the record.]
Mr. Weitz. I take it, then, that you expressed no concern that fur-
ther contributions should not be received from the dairy people as a
lesult of their expressed interest to make contributions and seek out an
audience for the serious matters that you've outlined ?
Mr. Kalmbach. I did not.
Mr. Weitz. And no one in the White House expressed such a
concern ?
Mr. Kalmbach. I don't recall.
Mr. Weitz. To you ?
Mr. Kalmbach. No. I don't recall any such concern, and I don't
recall that I expressed — or I don't recall that I had any concern.
Mr. Weitz. Subsequent to the receipt of the contribution from the
dairy people in August of 1969, were there any further contacts that
you had shortly after arranging for the meeting between Mr. Dent
and Mr. Semer? Any further contacts in 1969 with Mr. Semer in con-
nection with additional contributioiis?
Mr. Kalmbach. I don't recall. I remember that I talkeil to Mr.
Semer — oh, probably three or four times after the August meeting,
before the end of the year, and I think there were a couple of conver-
sations in October; and I'm not certain whether those were telephone
7585
conversations or personal meetings when I was in Washington. Often-
times, I would see him when I was in Washington. I would be at the
Madison, and we would have a cup of coffee together, and something
like that, and my memory is, I think I called the White House two or
three times on Mr. Semer's behalf, attempting to arrange meetings
between Mr. Semer and people in the administration. And I don't —
I think, as I say, he met with Mr. Dent, I believe. I believe he met
with others. I don't remember who they were, but very possibly
Mr. Ehrlichman. But I feel relatively certain that anyone who he
met with, it was probably the result of my making calls to arrange
such meetings.
Mr. Weitz. Can you shed any light as to why there were no further
conversations, or, more importantly, contributions by them up to
the $250,000 range in 1969 that they had mentioned ?
Mr. Kalmbach. Well, I think that one of the — as I think about it,
one of the reasons that probably there wasn't additional contributions
is that I feel, in looking back on that and having my memory re-
freshed, that Mr. Semer expressed a little dismay to me in late 1969,
words to the effect that he wasn't really getting — wasn't meeting with
too many of the people, and the response wasn't really what he had
lioped for. And I had the feeling that he was a little turned off on all
of this, that he had had maybe two or three meetings, or whatever
it was, but they weren't as productive as he had hoped. So there was
no offer of additional contributions, and I don't remember that I
solicited additional amounts.
I think I should add here, that it is my memory that I did not solicit
Mr. Semer. Mr. Semer came to me at the suggestion of Mr. Mitchell,
and I don't know that Harry Dent and some of these other people kner\v
of these surplus funds that I held. I'm not certain that they knew at
that time. I think they became aware of it later, but I'm not certain
that they knew about it. But I want to make the point that I did not
solicit Mr. Semer.
Mr. Weitz. But they did understand whether or not you were a
trustee of the previous funds from the previous election ? You at least,
as of August 1969, became custodian, some way, of a contribution from
the milk people ?
Mr. Kalmbach. I think they all understood that Mr. Semer was
representing a contributor. I'm not sure as to — in my own mind — as to
whether they understood that he had. in fact, contributed — all of these
people had contributed — that he had contributed that year. But cer-
tainly, Mr. Haldeman knew about it; Mr. Stans knew about it; Mr.
Mitchell knew about it. As to Mr. Flanigan and some of those people,
I'm not certain in my own mind.
Mr. Weitz. I'd like to show you a letter dated January 21, 1974, from
Mr. E. C. Heininger to Kenneth Parkinson.
It refers to a request by Associated Milk Producers, Inc., for the re-
turn of a $100,000 contribution delivered to you by Mr. Semer in 1969
on the basis that it was ultimately generated out of corporate funds.
And I'd like to ask you whether you have any knowledge of the way in
which the funds were repaid out of corporate funds, allegedly in this
1 etter , at the end of 1 969 ?
INIr. Kalmbach. I do not. I have no memor3^
7586
Mr. Weitz. Have you ever seen this letter, or are you familiar with
the request made by Mr. Heininger on behalf of AMPI ?
Mr. Kalmbach. I have never seen this letter. I think I noticed in the
newspapers, something; to the effect that there had been such a request
made, but I had no knowledge at all. I haA'e no memory at all that I
had any understanding that this was corporate funds.
Mr. Weitz. Did you have an understanding of whether or not the
cooperatives, or his clients, were, in fact, corporations?
Mr. Kalmbach. No. It was my understanding that his clients were
cooperatives. Of what sort of an entity, I'm not absolutely certain, but
groupings of individual dairymen who contributed. I think I remem-
ber that they contributed approximately $100 apiece per year per
dairyman, and that they had 40,000 or 50,000 dairymen in this one
major cooperative. I think it was AMPI plus several more thousand
dairymen, and two or more additional cooperatives.
Mr. Weitz. I believe the records that we have uncovered, and also
some records released by the White House in connection with the
President's personal finances, indicate that in July of 1969, $100,000
was transferred from a personal bank account of the President's in
Key Biscayne, to an account for which you w^ere trustee in California.
Mr. Kalmbach. That is correct.
Mr. Weitz. And those funds were ultimately used as part of the
purchase price of this San Clemente residence ?
Mr. Kalmbach. That is correct.
Mr. Weitz. What I want to ask you, is whether any of the money
that you received from Mr. Semer on behalf of the dairy people, was
used, either for the purchase of San Clemente, or to reimburse the
President for the moneys transferred to effectuate the purchase ?
Mr. Kalmbach. The answer is no.
Mr. Weitz. Off the record.
[Discussion off the record.]
Mr. Sanders. I'd just like to explore with you some thoughts you
may have had as to the — that is, at the time of actual receipt of the
money from Semer, about what possible uses would be made of the
money.
Did you consciously have in mind that the money was to be held
for the 1972 Presidential campaign, or what other thoughts did you
liave in mind about it ?
Mr. Kalmbach. I had in mind the thoughts that these funds were
being added to trust funds that I then had under my control, and that
they would be commingled with those trust funds, and used as I was
directed, for political purposes, by Mr. Haldeman.
Now, by the time I received this $100,000 in early August, I had
already m^dp the arra nsrement to pav Mr. Ulasewicz, again at the
direction of Mr. Ehrlichman, I think, Mr. Haldeman. And there had
been several payments. I think, by this time of pooling costs; and if I
had any thought on that at all, it was just my thought that similar
type expenditures would be authorized, and these were all commingled
with the balance of my trust fund.
Mr. Saxders. Did your thoughts — did the 1970 congressional race
expenditures enter into your tlioughts for this money ?
Mr. Kalmbach. I'm not certain if they did. I don't recall that I was
told that any of these funds would be disbursed to congressional can-
7587
clidates, and I don't recall that I did so understand, or think about
that at that time.
Mr. Saxders. Did you reg^ard the payment of moneys to Ulasewicz
as being for political purposes ?
Mr. Kalmbagh. I understood that from Mr. Ehrlichman particu-
larly, that this was work of a political nature, and investigative work
that ]Mr. Ulasewicz was doing; and I understood Mr. Ulasewicz was
reporting to Mr. Caulfield, Avho in turn was reporting to Mr. Ehrlich-
man. And I was not aware of the type of assignments that Mr. Ulase-
wicz had, or the specific assignments, other than that they were politi-
cal in nature and that they were investigative in nature.
Mr. Sanders. And did it ever occur to you that any of these expendi-
tures, then, were not for some political use ?
Mr. Kalmbagh. No. I don't recall any expenditure that I made from
my funds, or from the trust, funds that were not political in nature.
Mr. Morgan. That depends on one's definition of political.
Mr. Sanders. Well, with the j)redicate of his explanation of the
Ulasewicz expenditures
Mr. Morgan. I would just, so the record is clear, be sure that we're
talking now about the Ulasewicz activities prior to the time which he
delivered funds. Ulasewicz — in other words, I want the record clear
that you have now been talking to this point with respect to funds that
went to Ulasewicz — I mean, who worked with Caulfield.
Mr. Weitz. Prior to the 1972 election.
Mr. Morgan. In other words, I don't want this confused with the
other situation.
Mr. Weitz. After the 1972 election ?
Mr. Morgan. Eight.
Mr. Weitz. Yes, I understand.
Mr. Kalmbagh. Now, I don't understand whether this is true or
not, but I have some memory that Mr. Ulasewicz had some and you
know, my memory on this is very vague, as to whether or not Mr.
Ulasewicz did some investigative work as to Don Nixon. But I'm
not certain on that. Now, whether or not that could be classified as
political, I'm not certain. But I think that, just for the full story, I
must say that I have a vague memory of that.
Mr. Sanders. At one point during Alan's questions, you remarke(J
that Semer had explained to you how the dairy co-ops raised their
funds, and at another time, that you were told that the farmers
checked off up to $100 a year, and this money was aggregated. Was
this explanation to you by Semer before the delivery of the money ?
Mr. Kalmbagh. I'm not certain. I'm just not certain. I think that
it was, but I'm not certain of that, and it could be that I'm confusing
myself here with later explanations of how the milk cooperatives
were — how these political funds were developed, that I learned in
1970, when I learned that from Marion Harrison and Pat Hillings,
that I may be confusing myself there.
But I do have a memory, it seems to me — my best recollection is
that Mr. Semer advised me of this, but I could be wrong on that.
Mr. Sanders. If he did not tell you before the delivery of the funds,
did we at least establish that he did not tell you anything contradic-
tory of that ?
7588
Mr. Kalmbach. My memory on. that is just not too — it's not good. I
don't know, really, whether he got into that or not. He indicated to me
that he was — I remember now that he indicated to me that he was
working on gathering the funds together, but I don't have any specific
memory as to how that was, or whether he was talking to me about
the $100 per dairyman during this time. I'm just not certain of that.
Mr. Sanders. Would you say, however, that you had no thought that
this was a corporation, in essence ?
Mr. Kalmbach. I would say that I had no thought at all that these
were corporate funds that he was gathering.
Mr. Sanders. And therefore, you could not have made any such
explanation to any persons working in the administration ?
Mr. Kaliubach. I have absolutely no memory ever, of having any
thought that he was getting corporate funds, and certainly never men-
tioned that, because I had never thought of that. I never would have
mentioned that to anybody within the White House.
Mr. Sanders. Can you explain why you would have mentioned the
Semer contact to Flanigan, Peter Flanigan ?
Mr. Kalmbach. No. except that I think Peter Flanigan had respon-
sibilities in certain areas where the milk people had some interest. I'm
not certain of that, but my memory is that my diaries or my notes in-
dicated that I did talk to Flanigan about Semer at least once, or maybe
more times.
Mr. Sanders. Would it be perhaps because of the imports of dairy
products ?
Mr. Kalmbach. It might have been. I mean, prc^bably I think it
would have been, and I'm going to come up with my very best recollec-
tion here. But I think it would prcvbably have been that perhaps Mr.
Semer asked to see Mr. Flanigan, and I talked to Mr. Flanigan about
meeting Mr. Semer, and whether or not Mr. Semer ever, in iact, did
meet with Mr. Flanigan, I don't really know.
Mr. Sanders. I believe that the record showed that, shortly before
you told us about Semer's three objectives, you made some remark to
the effect that your recollection had been refreshed by reference to
notes.
Mr. Kalmbach. Yes.
Mr. Sanders. You have some contemporaneously prepared notes of
remarks to that effect by Semer ?
Mr. Kalmbach. I have notes that I made to myself that are with the
Special Prosecutor, and these are notes of 1969 and 1970.
Mr. Sanders. What was your habit in preparation of such notes?
Mr. Kalmbach. Well, these notes were notes that I had a habit, dur-
ing that period, of making almost a diary of my activities during this
period, and carried it in an 8 by 10 notebook, and beginning about late
1970, I discontinued that practice, and I took all of those notes from
1969-70 and put them together with old notes that I had. pre-1969, and
put them away in my house. And it was only — oh, several months ago,
whenever it was, that I remembered I was doing my damdest to get
every scrap of information that I could possibly get to refresh my
memory on what had transpired. I found these notes. I delivered these
notes, in total, to the Special Prosecutor's office and these notes are —
on these notes is indicated these meetings, these telephone conversa-
tions, these objectives, and as I say, all of these notes are in the hands
of the Special Prosecutor.
7589
Mr. Sanders. And usually, they would have been — the notations
would have been made very soon after the events occurred ?
Mr. Kalmbach. Yes.
Mr. Sanders. And your recollection is that there is some mention of
these three objectives in these notes ?
Mr. Kalmbach. Yes, I'm certain of that,
Mr. Sanders. In the course of your advising the various persons
in the "VVliite House of Semer's objectives, was anything said to you
about any action to be taken with respect to the 90-percent parity
objexitive?
Mr. Kalmbach. No; I don't have any memory of anything being
said to me on that score, and I think that my memory of the 90 percent
of parity was just one of those three objectives. And I think — and I
can't be at all certain here — but I think that I mentioned these objec-
tives to one or more of the people within the administration, these
three objectives. And this is really what these people wanted, and
particularly Milton Semer, on behalf of his clients.
Now, I don't remember beyond that that I got into the substance
of that at all. My sole function was to arrange for these meetings.
As I told Mr. Weitz, I don't recall that I was ever at a meeting with
Mr. Semer, with his clients, and with anyone in the administration.
Mr. Sanders. During any of your 1969 contacts with Semer, did he
remark to you about the price level for the then-current marketing
year ?
Mr. Kalmbach. I don't recall that. I think he simply told me of
the objectives, and I remember in my notes that those three objectives
are stated at the time that he gave me the $100,000; about August 2.
And I remember in my notes, one, two, three ; but I don't remember
that Mr. Semer really got into substantive discussions about parity and
things like that.
I think I'm absolutely not knowledgeable in it, and the only func-
tion, as I say — and I'm being repetitive here — I felt that the only
function I had was to arrange for Mr. Semer to see people within the
administration, to whom he would then talk about these matters.
Mr. Sanders. Do you recall that he might have mentioned how
they proceeded to obtain the price level for milk during the previous
year ?
Mr. EIalmbach. No, I don't remember that.
Mr. WErrz. Let's go oif the record.
[Discussion off the record.]
Mr. Weitz. I'd like to turn your attention to 19Y0, Did there come
a time in late 1970 — say November — that you met with and discussed
with Mr. Haldeman the role or functions you might play in early
fundraising for the 1972 campaign ?
Mr. Kalmbach. Yes.
Mr. Weitz. Do you recall when that was ?
Mr. Kalmbach. I think it was in mid-November of 1970.
Mr. Weitz. I think the records reflect that either — on either or both
November 19 or November 20, you met with Mr. Haldeman, according
to his logs. Is that consistent with your recollection?
Mr. Kalmbach. Yes, it is.
Mr. Wettz. AYhat was your role to be ?
Mr. IL\lmbacii. My role was to act as the fundraiser, the principal
fundraiser for the forthcoming 1972 campaign, and I was to approach
7590
a number of the major prospective contributors between that date,
which was in mid-November 1970, and on into 1972, whenever the
finance chairman was ultimately appointed. I was authorized by Mr.
Haldeman to deduct from my trust funds my out-of-pocket expenses.
My time was not to be charged. I was acting as a volunteer, as far as
my own time was concerned.
Mr. Weitz. At about the same time, did you have occasion to meet
with representatives of the milk producers ?
Mr. Kalmbach. Yes; I did. I think it was probably — ^and again,
my notes tell me this, the same notes that I've discussed earlier today —
my notes tell me that I met, I think, with Chuck Colson in October,
which is before, of course, my meeting with Bob Haldeman in No-
vember. And then my notes also indicate that I probably met with
Chuck Colson in December.
Now, when exactly these meetings occurred, I'm not certain. I
think there was a meeting in Chuck Colson's office in October of 1970,
and I think at that meeting there was Chuck Colson, Harold Nelson,
Marion Harrison, perhaps Murray Chotiner, perhaps Pat Hillings,
perhaps David Parr.
Mr. Weitz. Do you recall whether Tom Evans of New York was
present ?
Mr. Kalmbach. I don't recall if he was present at that meeting. He
was present at a subsequent meeting, which I think probably was in
December of 1970 at the Madison Hotel, at which time it was myself,
Tom Evans, Pat Hillings, I think Marion Harrison, and I think Chuck
Colson was at that meeting. And there could have been one or two
others at the Madison Hotel meeting.
Now, I recall that at the earlier meeting, which I think was in
October, there was a statement to the effect that the milk producers
were going to make a major contribution to the forthcoming— 2 years
hence — Presidential campaign. And I'm not certain that it was at
that time that $2 million was stated as their goal figure, or whether it
was stated at the later meeting at the Madison Hotel, or whether it was
stated to me by Pat Hillings in just a personal meeting at someplace
along the line.
Mr. Wectz. Could you tell us what the purpose of the first meeting
was that you referred to ?
Mr. Kalmbach. I think the purpose of the first meeting, which was
in Chuck Colson's office, as I remember it — and I could be confused
on my dates here — ^but, as I remember it, the purpose was that my role
was not that of a solicitor of this contribution. My role was to help
them organize their procedures as to how they were to effect these con-
tributions to the 1972 campaign.
Mr. Weitz. Was it your understanding, then, that prior to that
time, they had either agreed to, or represented that they would, make
that contribution independent of any solicitations by you ?
Mr. Kalmbach. That was my understanding.
Mr. Weitz. Do you know who, in fact, did solicit, or did receive the
news from them as to their intentions ?
Mr. Kalmbach. No; it would be my understanding that probably
Marion Harrison, who was the lawyer representing AMPI at that
time, and Pat Hillings, who I think was of counsel to that firm, had
7591
been or were in touch rather frequently with Chuck Colson, and it
would be my thinking— and I'm just giving you my impressions here—
that they indicated to Chuck Colson that this is the general goal figure
for the 'milk producers. But I was advised of this $2 million goal
figure either in Chuck Colson's office in October— and it could have been
that early — or maybe before that, or between that day and the end of
the year, by Pat Hillings or Marion Harrison or somebody.
And I remember the Madison Hotel meeting, I think, was involved
again with the legal mechanics of effecting these contributions. I re-
member we discussed the fact that the milk producers or the coopera-
tives had independent reporting requirements, independent of the 1925
Corrupt Practices Act.
And they were asking for my counsel and, I think, Mr. Evans'
counsel on 'how they could best proceed to effect the future contribu-
tions.
Mr. Weitz. I want to give you a few more questions as to the sub-
stance of the meeting, as to both meetings. But just to place these in
point of time, do you recall any instance when you stayed — you visited
and stayed in Washington, D.C, in that time period 1969 through
1972, when you did not stay at the Madison Hotel ?
Mr. Kalmbach. No ; but there could have been times that I did not.
I don't recall.
Mr. Weitz. Do you know whether Tom Evans — when he carne to
Washington for that meeting, did he stay overnight, and if so, did he
stay at the Madison Hotel ?
Mr. Kalmbach. I don't recall that he did. It would have been my
memory that he did not, and — ^but I'm not certain.
Mr. Weitz. I ask you this because we've had testimony that those—
remember that the meeting in the Madison Hotel took place in — after
the election in November of 1970. And the records of the Madison
Hotel indicate that Messrs. Nelson, Parr, Evans and you were all
there on the 18th and 19th of November. Now, that's why I ask the
question.
Mr. Kalmbach. I think that with that information, Mr. Weitz, I
think that that could well have 'been the date of that meeting, because
that was just about the same time as my memory is telling me. I mean,
I was thinking that it was maybe into December, but this same group,
Mr. Evans, myself — this would be about the time and that could well
have been the time that we had that meeting in the Madison Hotel.
And, as I remember, it was probably in Mr. Nelson's room or suite.
Mr. Weitz. So he did have a room at the time ?
Mr. Kalmbach. Well, I think Mr. Nelson. I think you asked me
about Mr. Evans, but I think it was in his suite at the Madison, or
that would be my best memory. And I think that this squares with
what I would remember.
IVfr. Weitz. Let me ask you another question a'bout that meeting.
That happens to fall, if that is the time, essentially contemporane-
ous with your meeting with Mr. Haldeman in which you discussed
meetings or a meeting in which you discussed your role for the 1972
campaign.
Do you recall discussing with Mr. Haldeman in November or De-
cember of 1970 your meetings and the result of the meetings with the
dairy people ?
7592
Mr. Kalmbach. Well, I know that I, of course, was reporting to Mr.
Haldeman in this area, the finance area. I reported to him throughout,
not only in my role as trustee, but throughout the 1970 program, which
was a senatorial campaign program. But I regarded myself as report-
ing to Mr. Haldeman for that program, and I'm certain that I did
report to Mr. Haldeman on my meetings there, in Chuck Colson's
office, and in the Madison Hotel meeting. And, in fact, when I was
advised of the $2 million goal figure, I am certain that I reported that
to ]Mr. Haldeman.
Mr. Weitz. Was that one of the largest, or at that time the largest,
outstanding pledge or goal figure that had been mentioned to you in
connection with the 1972 campaign ?
Mr. Kalmbach. No.
Mr. Weitz. Was it one of the largest ?
Mr. Kalmbach. One of the largest.
Mr. Weitz. Wliose was the largest ?
Mr. Kalmbach. Mr, Clement Stone and Mr. John A. Mulcahy.
And, to elaborate on that, my memory is that both Mr. Stone and Mr.
Mulcahy pledged in mid-November of 1970, pledged — each of them
pledged $1 million for 1971, $1 million in 1972, and $1 million after
1972 if there was a deficit in the campaign. So there you had an aggre-
gate of $6 million pledged, $2 million of which was contingent on a
deficit.
At that same time, Mr. Scaif e — at this same general time, Mr. Scaife
pledged $1 million in 1971.
Mr. Weitz. In connection with your meetings in Mr. Colson's office
and then in the Madison Hotel with the daiiy people, was there any
reference to any goals or interests of the dairy people in any way simi-
lar to, or in addition to those mentioned to you by Mr. Semer the pre-
vious year ?
Mr. Kalmbach. No, I don't remember that, Mr. Weitz. I just don't.
It seemed to me that my role and that of Mr. Evans was that of really
the legal mechanics and the procedures involved, and 1 had the im-
pression— and again, I'm giving you impressions in this statement —
that Mr. Hillings, Mr. Harrison, in any discussions as to substantive
matters were discussing those directly with Mr. Colson and with oth-
ers. 1 don't recall that this came up as an item of substantive conver-
sation in these talks.
I think we were concerned about how to set up committees, where to
set up committees. I think there was an expressed concern about pub-
licity and how you could set up the committees so that the fact that
they were — these people would be contributing to the Nixon campaign
in 1972 would not become loiown to the media and how you could han-
dle that, in light of their independent reporting requirements to the
House.
Mr. Weitz. Now, the independent reporting requirements you re-
ferred to, you refer to the organizations themselves, the dairy organi-
zations or trusts
Mr. Kalmbach. Cooperatives.
Mr. Weitz. Cooperatives, right. I think the record shows that it re-
fers to the trusts themselves.
Mr. Kalmbach. That's right. The political trusts.
7593
Mr. AVeitz. Now, was there any discussion that you recall at either
of the two meeting's you refer to in 1970 as to ways to avoid that re-
quirement or avoid that necessity by, for example, having farmers
contribute directly to political committees established for the cam-
paign ?
Mr. Kalivibach. Well, the concern was how do you avoid the pub-
licity that would come from these people's contributing to Nixon for
President committees in 1971, 1972, and having that become known
because, of course, as you loiow, under the Corrupt Practices Act nom-
ination period there was no disclosure required. And the thought, it
was made too clear to me and, I think, to Mr. Evans, that there was
this concern that these people — the fact that they were contributing
and not that it not be known. There was no thought of doing anything
improper to do this, but the question was, how do you handle it
mechanically as to the effect of this.
And I think — my memory is that there was the thought that they
could contribute to a number of campaigns in various States through-
out their operating areas, and the money could be held in committees.
Now, those committees, in fact — the fact that they contributed,
say, to Good Government Committee in Iowa, that would have to
be made known to the Clerk of the House. Now, that's the fact. And
then those funds would be held for later use and, perhaps, in the
Presidential campaign in 1972.
Mr. Weitz. Without necessarily disclosing any transfers from the
Iowa committee, as an example ?
Mr. Kalmbacii. That is correct; and without disclosing the fact
that this Good Government Committee was. in fact, going to use its
funds to support the campaign in Iowa. And I'm using that as an
example; and Iowa could well have been a State that was not included
here.
But we were trying to develop a procedure that — where they could
meet their independent reporting requirements and still not result in
a disclosure.
Mr. Weitz. Who was the principal' spokesman for the dairy people
at these meetings ? Do you recall ?
Mr. Kalmbacii. I think the principal spokesman — well, first of all,
I think Marion Harrison was the principal spokesman and probably
the architect of this, of these procedures. And Marion Harrison was
the attorney.
Now, he had succeeded Milton Semer. And I thought that the reason
he succeeded Milton Semer is that INIilton Semer was identified with
the Democrats and Harrison was identified with the Republicans. 1
think Marion Harrison was, in fact, a good friend of Chuck Colson,
and probably Chuck Colson was instrumental in, perhaps, his selection
by AMPI — Harrison's selection.
And I felt that Chuck Colson had a great deal of antipathy, and
he expressed it several times, toward Milton Semer, kind of a personal
thing. And he and Chuck Colson and Milton Semer, I think, at one
time were in the same law firm. And although I must say that in all
of my dealings with Milton Semer I found him to be a 'fine man.
Mr. Weitz. What was the result of the meetings that you referred
to in 1970?
30-337 O - 74 - pt. 17 - 5
7594
Mr. Kalmbach. Well, the result was that there was — I think one
thing that was decided on, I'm not certain on this, but I think one
thing was the thought that the committee — that no one committee
should take more than $2,500 from any one co-op or trust.
Mr. Weitz. In any one year or ever ?
Mr. Kalmbach. Well, I think the thought was — and I don't know
if it was tied into any one year, but perhaps ever. You have one com-
mittee set up and a trust could contribute $2,500 to that one committee.
Now, another two or three other trusts could also contribute $2,500
to that one committee. But I'm not sure that in these discussions
whether we were talking only about AMPI or whether we were talking
also about the other two or three political trusts.
Mr. Weitz. That would amount to, by my estimate, of upward
of several thousand committees. Was that your understanding? A
thousand committees, if I'm correct. No, perhaps approximately 1,000
or 750 committees.
Mr. Kalmbach. No. That isn't too many committees. I recall that
there were 338 committees, I think, more or less that were established,
that had to be established to receive Mr. Scaife's $1 million. So it's an
interminable amount of paperwork, but it's necessary to meet the gift
tax problems, and this is not a scheme to avoid the tax. This is just —
this has been pretty well said that a committee set up this way with
'an independent treasurer and an independent secretary-treasurer
and a chairman, under maybe a rather form-'written charter would
constitute a separate committee for the purposes of the gift tax.
And I know that Tom Evans and I were wondering to ourselves,
really, whether there's a gift tax problem when you have a political
trust like this. And without going into it at any great length, the
thought, I think, was that it would be better to set up independent
committees, even at the risk of all of this paperwork than to run any
risk of having a gift tax problem.
Mr. Weitz. Wasn't there also concern about the $5,000 limitation
to any one committee in any one year ?
Mr. Kalmbach. That is correct, but it's under the Corrupt Prac-
tices Act, and there is a good cause for some concern that you should
not exceed $5,000.
Mr- Weitz. Now, you mentioned that in the case of some other
large pledges that you became aware of in 1970. there was a rep-
resentation that thev would contribute $1 million in 1971, $1 million
in 1972. at least in the two instances you mentioned. Were there any
timetables mentioned with respect to the dairv pledges ?
Mr. Kalmbach. No. I felt that the dairy pledge of $2 million was
between the time that I learned of it and the date of the election.
I mean, that's what I understood at the time. As we got closer to the
election in that turn, that changed.
Mr. Weitz. Now, in December of 1970, we have both the letter and
the evidence with respect to the letter from Pat Hillings to the Presi-
dent, of Avhich you mav be aware.*
Mr. Kalmbach. I am aware of that letter.
Mr. Weitz. I would like to — it has already been introduced into
our record. There's no need for you to either identify it or enter it
as an exhibit. But I would like to ask you several questions about it.
♦See Nelson Exhibit No. 1. Book 15, p. 6701.
7595
In that letter dated December 16, 1970, Mr. Hillings refers to the
fact that Tom Evans and Herb Kalmbach were working with the
dairy people to set up appropriate channels for AMPI to contribute
the $2 million for your reelection — this is addressed to the President.
That would reflect the meetings that you've already discussed ?
Mr. Kalmbach. That's thoroughly consistent with what I've testi-
fied to here.
Mr. Weitz. It also refers to $135,000 that AMPI had contributed to
Republican candidates in the 1970 election. And without going into
any details, I take it you were also involved in the receipt of those
moneys or at least arrangement for those contributions ?
Mr. Kalmbach. Yes, I was. I received, as I remember, a pledge of
$100,000 from the dairy industry for that particular program, and
my notes and records tell me that the $110,000 was received by Mr.
Gieason, who was the administrator of that 1970 program, as a result
of that earlier pledge. And I think $10,000 of that was, in fact, cash.
Mr. Weitz. Now, the final sentence I would like to ask you about
indicates that AMPI was also funding a special project. Do you have
any knowledge — did you have any knowledge at the time, in con-
nection with your contacts with the dairy people, or do you have any
knowledge up to the present time, as to what that reference means?
Mr. Kalmbach. No. I have been asked about this. At the time I had
absolutely no knowledge of that so-called special project. "Within the
recent past, I don't know how long ago it was, I was asked about this,
and, evidently, this was involved with a $5,000 payment. This was a
$5,000 payment or amount that was received by Chuck Colson, and I
had not known about this.
Mr. Wepfz. Is that speculation or something that you've learned
that does connect this special project to monevs received by Mr. Colson
in 1971 ?
Mr. Kalmbach. That's what I understand to be the case. And I
could be wrong on it, but that's my understanding.
Mr. Weitz. Did you have any knowledge in, let's say, around this
time, December of 1970, or shortly thereafter, of any particular criti-
cisms the dairy people had of — their arrangements or contacts with Mr.
Colson, either in advance of or following the delivery of this letter to
the White House ?
Mr. Kalmbach. No, I really don't. There was an expressed criticism
that was relayed to me somewhat stridently by, I think it might have
been Bob Haldeman and Gordon Strachan, Chuck Colson and others,
to the effect that the mechanics weren't being set up, these committees
were not being: established to receive these contributions.
And I recall at one time Mr. Strachan asking me to go over to Chuck
Colson to see what I could do to improve that. I think that was what
gave rise to my meeting subsequently with Bob Bennett, I know that
I did not want to have the responsibility for this area, because I had
not : why, almost 95 percent plus of the people I was talking to were
not Washington representative types or lobbyists, and I preferred not
to deal with lobbyists or people of that type.
And I recall that eventually, and this is just my understanding, that
Mr. Bennett, I think, was enrolled in this program.
Mr. Weitz. To organize the committees ?
7596
Mr. Kalmbach. To organize the committees, and, I think, probably
without knowing for certain, Mr. Weitz, that Mr. Colson was in-
strumental in recruiting Mr. Bennett for that assignment.
Mr. Weitz. Now, we have a series of White House memorandums
which are primarily in the period February-March of 1971, and these
are primarily communications between Mr. Colson, Mr. Haldeman,
and Mr. Strachan, with reference to the very topic you've mentioned;
that is, your interest in having some one else handle certain outside
fundraising and the enrollment of Bob Bennett in this. Is this the
time period that you're talking about right now ?
Mr. Kalmbach. Yes, it is.
Mr. Weitz. Do you remember the first time you met with Bennett,
or approximately the time you first met with Bennett?
Mr. Kalmbach. I think it was in the first quarter of 1971, although
it could have been immediately, it could have been in the first half
of 1971, but I'm not certain on that. But I remember meeting him
in the coffee shop of the Statler-Hilton Hotel and just getting a prog-
ress report.
And, as I remember, he was setting up the 100 committees at that
time, getting independent secretary-treasurere and independent
chairmen.
Mr. Weitz. Now, I would like to show you for your identification
a memorandum dated March 18, 1971, from John Dean to Frank
DeMarco, Tom Evans, and Herb Kalmbach.
Let me mark this as exhibit 1 and ask you if you recall receiving a
copy of that memorandum.
["V^Hiereupon. the dcx-ument referred to was marked Kalmbach ex-
hibit No. 1, for identification.*]
Mr. Kalmbach. I don't have an independent recollection of receiving
this, but I could well have, inasmuch as I'm one of the addressees. It
had been my memory, and it is my memory, in my best memoiy, that
Mr. Evans supplied the form, the suggested form of draft charter to,
I think, Mr. Bennett, and he could have given it to Mr. Dean and Mr.
Dean revised it and sent it on for us to look at. But I don't remember
seeing this. But, you know, inasmuch as I'm one of the addressees, it's
likely that I did, but I just don't recall it.
Mr. Weitz. Now, during the period January, February, and March
of 1971, we have a fair amount of testimonv with respect to the efforts
by the dairy lobby to secure an increase in the price level for price
supports — milk price supports.
Were you at all familiar — let me take the period from January 1
to March 12, which was when the Secretary of Agriculture issued his
first decision not to increase price supports — were you aware, or did
you have any contact with anyone in the administration or the daiiy
people to discuss this matter, their interest in that particular matter,
that year ?
Mr. Kalmbach. ]Mr. Weitz. I've been asked about this, and I just
don't have any memory of being involved in these discussions at all.
NoAv, I could have been, and people could have talked to me about it,
but I have the feelino: — and I'll snv this ajrain — because it's mv impres-
sion that iNIarion Harrison, Pat Hillings, were very well acnuainted
with Chuck Colson and Murray' Chotiner and other people within the
•See p. 7623.
7597
White House, and I would think that those discussions were ongoing
among those people. And I don't remember that I was involved in
those discussions, and I don't remember that ]\[r. Evans was involved.
And we were in the picture to try to be helpful as far as effecting
the mechanism and procedures for them to follow in effecting their
contribution. Now, I'm not saying that I wasn't talked to, but I don't
recall that I was.
Mr. Weitz, Do you remember any — I'm sorry.
Mr. Sanders. Before you fully get into 1971, I wonder if I can ask
some questions about 1970 ?
Mr. Weitz. Fine.
Mr. Saxders. I'm sorry to interrupt you, Mr. Weitz.
Do you think, Mr. Kalmbach, that you most likely first learned of a
$2 million contribution intention by the dairy co-ops sometime about
October 1970?
Mr. Kalmbach. It's very difficult, because I'm relating it to the Pat
Hillings letter of December, and it was either — it could have been in
October or very possibly in November or De^'ember. It's in that period
some place that I learned of the $2 million goal figure on the part of
the milk producers, l)ut I just can't be certain of this.
Mr. Sanders. You also, then, have no specific recollection of the
individual who first mentioned it to you ?
Mr. Kalmbach. No, I don't. I think it was Pat Hillings, but it could
have been Marion Harrison. But it's most likely it was Pat Hillings.
Mr. Sanders. Were you ever present at any meeting with any dairy
co-op officials Avhere the $2 million contribution intention was
mentioned ?
Mr. Kalmbach. I don't remember, Mr. Sanders. I remember there
were dairy officials present in Chuck Colson's office and present at the
Madison Hotel, which, I believe, was either in November or December.
Now, whether or not the $2 million figure was mentioned at that
time or was mentioned in a separate conversation, I'm not certain.
I think my best memory, and this is so long ago and so much has
happened since that I'm not really certain at all, but I think my best
memory would be that in the meeting in Chuck Colson's office, when-
ever that was, when that was in October, that probably I learned
about it then. And I think Harold Nelson and others were present at
that meeting, but I'm not at all certain. I'm just giving you my very
best recollection here.
Mr. Sanders. Was it understood by you that any part o± the $2
million to be contributed would come from any corporate assets?
Mr. Kalmbach. No, it was not. I understood that it was co come
from the trusts.
Mr. Sanders. I did not get a clear understanding of your explana-
tion of the mention of the special project in the Hillings letter.
Mr. Kalmbach. Mr. Sanders, my memory is that I did not know
about any so-called special project at the time this happened. Sub-
sequent to that time, and it has been within the last — it's been since
I've been asked about this and have seen documents, I've been advised
that there was such a $5,000 paynient, and I think it was receiv3d by
Chuck Colson, and that Chuck Colson and John Ehrlichman were in-
volved in this in some way. and I don't know, really, what the money
was used for or if it was used. I'm just giving you my best memory
of it.
7598
Mr. Sanders. In or about December of 1970, you had no knowledge
of any such special project?
Mr. Kalmbach. I have no knowledge of that special proiect. Now,
my memory tells me there were a number of things that Mr. Colson was
doing, placing ads in newspapers and this and that, and I don't know
whether there was any funds that were used to pay for those ads. I
don't know that, but that was just a general thought.
Mr. Sanders. Concerning the discussions about the establishment of
gift tax committees in 1970, was it intended that the committees to be
established for the receipt of contributions by the dairy cooperatives
were not to be used for the receipt of contributions by other large
contributors ?
Mr. Kalmbach. I'm sorry. Please restate your question.
Mr. Sanders. Were the committees that were to be established for
receipt of contributions from the dairy cooperatives to be used only for
receipt of those contributions, or were they to be available for the
receipt of contributions from other large donors ?
Mr. Kalmbach. No. And I've been asked this question, too, and my
memory now is I've seen some copies, I think ]Mr. Dobrovir showed me
some copies, copies of some material that they had received from the
AVhite House, and as I reviewed it and tried to refresh myself and re-
fresh my recollection, it seemed to me that the reasoning in back of that
went this way : One, that these committees should be established in
1971 and should receive $2,500 per committee from the milk producers,
from the trusts, such as TAPE and others. The thought was that no
other contributions from individuals should go into those committees,
for the reason that these committees would have to be reported to the
Clerk of the House, and there might be some disclosure as a result of
that, that would not be fair to individuals who had a right under the
1925 act up through the nomination to contribute with absolute
anonymity.
So. I think the reasonina: was. Mr. Sanders, that the milk money
and the milk committees be kept separate so that individuals who
might contribute to those same committees, that the whole thing might
come out as a result of the independent reportinsf reouirements.
Mr. Weitz. So the record is clear. Mr. Kalmbach — I believe you re*
f erred earlier to tlip faf^t that vou did not recall anv meetings that you
attended between the dairy people and any administration official. And
just so the record is clear, I take it the meetings between you and some
of the dairy representatives — and Mr. Colson would be an exception
to that
Mr. Kalmbach. Yes, I thank you. Mr. Weitz, for clarifynng that. I
don't regard those meetings as meetings, you know, where thev were
talking about paritv and substantive items. I really regarded those
meetings, particularly the one with Mr. Colson in his office, and the
meeting in the ]Sradison. as meetings where I was trvinp- to be helpful
in their gettins: themselves set procedurallv and leg-allv on the me-
chanics. And I think that was true of Mr. Evans. And I don't recall
that there were discussions in those meetings of their objectives, or
parity or this or that.
Mr. Wettz. In another vein, do vou have a familiaritv with the pub-
lic relations firm in Washington, of Wagner & Baroody ?
7599
Mr. Kalmbach. I do not. If that is Baroody, who was a Bill Baroody,
and who was formerly with the "WHiite House
Mr. Weitz. I think it's Joseph Baroody.
Mr. Kalmbach. Was this the Baroody that was in the White House?
No — ^then I'm not familiar with him.
Mr. Weitz. And you don't associate that firm, if there is such a firm,
with the milk producers or Mr. Colson, in any way?
Mr. Kalmbach. I don't, Mr. Weitz. I don't have any memory of
that.
Mr. Weitz. Now, going back to 1971, particularly in March of 1971,
and the 1971 period, did you attend a Republican fundraising dinner
on March 24, 1971, in the Washington Hilton Hotel ?
Mr. Kalmbach. I did.
Mr. Weitz. Did you have any ix>le in fundraising for that dinner?
Mr. Kalmbach. I don't know if I did or not. This was something
that would be completely aside from what I was doing. I think I con-
tributed— I bought one' ticket. But I don't recall that I helped sell
tickets for that dinner. I might have. I don't remember.
Mr. Weitz. Were you familiar with any contributions by the same
dairy trusts to the dinner, or for dinner committees ?
Mr. Kalmbach. I don't recall that I was at the time. Subsequently,
and particularly in the last year, or whatever it is, that I've been asked
about this and have seen documents, I have an understanding that the
milk people contributed funds or bought tickets to this dinner and in
that way effected a contribution to the campaign in some manner. I'm
not certain as to what the mechanics were.
Mr. Weitz. To the 1972 campaign ?
Mr. Kalmbach. That's what I would understand, but I'm not cer-
tain that I'm right on this.
Mr. Weitz. Now, we have a memorandum dated February 2, 1971,*
from Mr. Colson to Larry Higby, who I believe was an assistant to
Mr. Haldeman ?
Mr. Kalmbach. That is right.
Mr. Weitz. And it refers to an intention of the milk producers to
purchase 10 tables to the committee dinner, the national committee
dinner, for a total of $100,000.
Mr. Kalmbach. That is correct.
Mr. Weitz. Did you have any knowledge of any such intention?
Mr. Kalmbach. I don't know if I did or not. I could well have, but I
don't remember now that I did.
Mr. Weitz. Now, the memo goes on to refer to the fact that this
money, if it were, in fact, contributed by the milk producers, would be
an offset to moneys which had been committed to be raised by the
White House for the committee. That's the substance of the memo,
at least.
Mr. Kalmbach. Yes.
Mr. Weitz. And that Mr. Colson is expressing concern that the
money coming up from tlie milk producers would be clearly attributed
to that commitment by the "WHiite House, so to speak.
Mr. Kalmbach. Right.
Mr. Weitz. Did you have any familiarity with the arrangements
between the White House and the national committee as to that, or
other similar commitments ?
♦See Strachan exhibit No. 2-C, p. 7476.
7600
Mr. Kalmbach. No; I have a general impression that somebody
talked to me about it, but that was kind of a bookkeeping arrangement
as far as I was concerned, between the White House and the national
committee. And I think that was effected — maybe Lee Nunn would
be the one that would be particularly knowledgeable about this as to
what the arrangement was.
Now, I don't really have any memory of anything more specific
than that, but it would seem to me that if I had heard about this it
would be not other than in a casual manner. Beyond that, I don't
recall that I was involved in setting up this arrangement, this and
that. I just don't recall this.
Mr. Weitz. The first paragraph of this same memorandum, which
I just referred to, which is already a part of our record, the first to a
$150,000 commitment by Mulcahy to the same — to the national com-
mittee— did you have any involvement in that ?
Mr. Kalmbach. No, I did not. And Mr. Mulcahy gave me a pledge
of $1 million in 1971, $1 million in 1972, and $1 million in 1973, if
there was a deficit, as I've already testified. But I don't recall that there
was an understanding separately with Mr. Mulcahy as to this.
Mr. Weitz. Now, returning to that period, the dinner, as I say^
took place on March 24, and you've testified that you attended that
dinner.
Prior to that dinner, or during that dinner, did you have occasion to
discuss, either with Mr. Ehrlichman — let's say, Mr. Ehrlichman first,
let's say discussed with Mr. Ehrlichman — either thej progress of
the arrangements for committees, for the milk people, or any other
matter relating to the milk producers ?
Mr. Kalmbach. Yes. Now, the problem on this is, Mr. Weitz — and
I've been asked this question too — I don't recall exactly whether I
talked to Mr. Ehrlichman about the progress of this or not. but I
do have a recollection that I met with Mr. Nelson and Mr. Chotiner
immediately following the dinner.
Mr. Weitz. Do you know how that meeting came about?
Mr. Kalmbach. Well, and again, I just have to tell you that my
memory on it is very hazy. But my best memory is that Mr. Chotiner
approached me, and I think it was at the dinner or as we were leaving
the dinner, and this was the night of March 24, as I remember, at the
Washington Hilton Hotel, and asked me if I would be willing to
meet with him and Mr. Nelson at my hotel — at the Madison Hotel —
that evening following the dinner. And I said that I would be willing
to do so.
Mr. Weitz. Had anyone else spoken to you about such a meeting,
or possible contact, at some time before Mr. Chotiner's discussion?
Mr. Kalmbach. It could well have been that Mr. Ehrlichman spoke
to me about it, but I just don't remember it.
Mr. Weitz. Did you talk to Mr. Colson, or anyone else that you can
recall in the administration, in this period of March 1971, in connec-
tion with the dairy people ?
Mr. Kalmbach. I just — again, I had been doing my darndest to
dredge up my memory on this, but I don't recall that I did.
Mr. Weitz. Now, you've mentioned a number of times that from
time to time you've reported, either to discuss matters in connection
with contributions or solicitations, with — I think you mentioned Mr.
Haldeman, Mr. Dean, and Mr. Colson.
7601
Could you tell us whether — or the circumstances why you 'believe
you discussed milk producers in any connection with Mr. El^rlich-
man, during that period in March of 1971 ?
Mr. Kalmbach. Well, I know — I think I had lunch with Mi . Ehr-
lichman on March 25.
Mr. Weitz. Also on March 12, these records indicate.
Mr. Kalmbach. Yes. This would be something that — this would be
a reason, on the ISIarch 12 meeting, that very possibly Mr. Ehrlich-
man would advise me that the milk people were talking with the ad-
ministration about this parity situation. But I don-t have an inde-
pendent recollection of him doing — recollection of him' doing so.
However, I do have a recollection that following my meeting with
Mr. Chot iner and Mr. Nelson on the 25th
Mr. Weitz. The meeting was on the 24th, and then following that,
you're saying on the 25th ?
Mr. Kalmbach. Didn't I meet with Mr. Ehrlichman on the day
following that ?
Mr. Weitz. Right.
Mr. Kalmbach. I think that at that meeting — I think it was on the
25th that I told Mr. Ehrlichman that ^Mr. Cliotiner and Mr. Nelson
had reaffinned their $2 million pledge to the campaign.
Mr. Weitz. Let's go, then, back to the night of the 24th.
Mr. Kalmbach. Yes.
Mr. Weitz. Could you tell us, after the dinner, what happened?
"\AT^iere did you go and how you happened to meet with them '(
]Mr. Kalmbach. Well, I remember I met them in the lobby of the
Madison Hotel around 10 or 10 :-30, and we then went up to my room
and after some preliminary conA'ersation I was informed, I think it
was by Mr. Chotiner, that he had been talking to Mv. Ehrlichman and
that — it's my best memory that I was informed that there was going
to be an announcement on the price support the following day. And
in view of that, that jSIr. Ehrlichman had asked Mr. Chotiner to talk
to me and reaffirm to me that the milk people would reaffirm their
pledge of $2 million to the 1972 campaign.
Mr. AYeitz. You mentioned preliminary conversations. Was there
anything substantive, or was it just pleasantries ?
Mr. Kalmbach. Just pleasantries.
Mr. Weitz. You also already — you already knew Mr. Chotiner and
already met with Mr. Nelson, prior to that time ?
Mr. Kalmbach. Right.
Mr. Weitz. Was there any reference by anyone at that meeting to
Mr. Harrison — INIarion Harrison ?
Mr. Kalmbach. I don't recall that there was.
Mr. Weitz. What about Pat Hillings ?
Mr. Kalmbach. I don't recall. There could well have been, but I
don't have the recollection of it.
Mr. Weitz. Was there any reference to any bad feelings or any
disruption in communications between the Harrison law firm, of which
Chotiner was a counsel at that point, and the White House or Mr.
Colson?
Mr. Kalmbach. I think there was, as I think about it. I think there
was probably a statement of some displeasure at the breakdown in
mechanics in setting up committees and the whole organizational
approach.
7602
And now, I'm not certain as to this point, but for some reason I have
that feeling.
Mr, Weitz. Did anything go more to the substance of relations be-
tween— as a personal matter, for example — between the Harrison law
firm and/or Mr. Harrison, personally, and Mr. Colson ?
Mr. Kalmbach. No, I don't recall that it did, ]Mr. Weitz. And I say,
I'm doing my very best to remember what, in fact, did happen. But
to me the main, and almost sole purpose of that meeting was the re-
affirmation of the $2 million pledge and the fact that they told me that
the price-support decision was to be announced the next day and that
in view of that fact, and in view of the fact that INIr. Ehrlichman had
asked Mr. Chotiner to make sure that I was informed of this reaffirma-
tion, that they were in fact reaffirming the $2 million pledge to the
campaign.
JVIr. Weitz. At that time was there — or shortly thereafter — was
there any discussion of any further details with respect to the $2 mil-
lion pledge ? That is, any breakdown as to timetable of amounts ?
Mr. Kalmbach. On that point I think- — -
Mr. Weitz. I'm sorry, I believe you were going to answer my ques-
tion with respect to any details or timetables as to
Mr. Kalmbach. I have a recollection that at some point I was in-
formed that there was a kind of monthly goal figure of $90,000 a month
to be received by the campaign.
Now, when that actually was made known to me, I don't know, and
I Ve done my darndest to try to recall it, but I can't place it in the time
frame.
Mr. Weitz. Do you place it, for example, or, although you can't
place it specificolly, do you think that it related to a time period fol-
lowing your meeting on the night of the 24th ?
Mr. Kalmbach. I just cannot place it.
Mr. Weitz. But you have no recollection that at the meeting on the
24th, or during the period of March 1971, for example, the dairy
people were in any way delinquent on a monthly commitment if such
a commitment was made ? For example, in your discussions with either
Mr. Chotiner of Mr. Ehrlichman?
Mr. Kalmbach. Very possibly, and what would cause me to think
thatmight well be the case is that I think if you divide $90,000 into $2
million, you can find the number of months that are involved. And it
could well have been that. And I remember it so well now, that the —
Gordon Strachan talking to me about the fact that Marion Harrison
and the others were oftentimes, I think — had checks in hand, but there
were no committees established to which these checks could l)e routed.
And it very possibly could be, Mr. Weitz, that this $90,000 a month
quota, or whatever you might call it, that I had learned of that much
earlier than March, but I just cannot place it as to any specific date that
I learned of it.
Mr. Weitz. I don't want to jump too much out of turn but we have,
on this point, a September 11, 1971, memorandum from Gordon
Strachan to Haldeman.*
Now. the first paragraph reads as follows, "Lee Nunn reports that
$232,500 has been realized." Parenthetically, I believe the records in-
*See strachan exhibit No. 4, p. 7483.
7603
dicate that of the 100 committees established by Mr. Bennett during
1971 had received that amount up to that period of time.
It goes on to state, "This is slightly more than one-half of the
amount that should have been delivered on the commitment" — $90,000
per month in parentheses.
Now, one way of interpreting this memorandum is that $232,500 is
slightly more than half of $450,000. $450,000 divided by $90,000 is 5
months worth on a $90,000 per month commitment, according to the
memorandum.
September 11, 1971, is the date of memorandum. That would relate
back, depending on whether the fifth month ends in September or in
August to either March or April of 1971.
I guess I'm just asking you again, does that shed any light on what
your recollection was as to such a $90,000 a month commitment — when
you first became aware of it ?
Mr. Kalmbach. Yes, it's helpful to me. And I think in view of that
memorandum from Mr. Strachan, that it's very likely that the $90,000
a month goal figure was to be from and after the March 25 date. And
that I could well have been apprised of it that evening or maybe shortly
thereafter.
Mr. Weitz. At your meeting on the 25th of March, with Mr. Ehrlich-
man, I believe you testified that you related to him the substance of the
previous evening's conversation. Did he further elaborate in any way
on the price-support decision and/or its relationship to the contribu-
tions in your meeting the previous evening ?
Mr. Kalmbach. No, I don't remember that he did that, Mr. Weitz.
And I don't remember — it seems to me that that meeting on March 25
was a meeting with Mr. Ehrlichman, Senator Murphy, and Mr. Mil-
bank. And it seems to me that I just informed Mr. Ehrlichman of my —
of this message that I had received from Mr. Chotiner the night
before.
I think I just mentioned that in a very brief aside to him either
immediately before the meeting or immediately after the meeting, and
the two of us together only.
Mr. Weitz. Would it be a fair statement to say that you had no real
opportunity to go into any detail with him as to the previous night's
conversation ?
Mr. Kaembach. Yes, I think that would be fair and I think all I
wanted him to know was the fact that this reaffirmation had, in fact,
been made to me. And he just simply, very summarily, acknowledged
that statement of mine. And I don't remember that he added anything
to it.
Mr. Weitz. Now, on a May 21, 1971, memorandum, from Strachan
to Haldeman, that we have — and that is part of our record — the sub-
ject is a "Kalmbach telephone call of May 21," and among other things
it refers to the collection of milk money. It states that the responsibility
has been shifted entirely to Mr. Nunn, and that there were 76 checks in
hand, each for $2,500, with 26 more available when the committees
were established.*
Now, this is in May of 1971. Is that consistent with your recolle<*tion
as to approximately the timetable in establishment of the committees
and receipt of the moneys ?
•See strachan exhibit No. 3, p. 7478.
7604
Mr. Kalmbach. Yes, it is. And this could well be when Mr. Bennett
was operating.
Mr. Weitz. Do you remember any instance in which checks were
actually made out and even delivered, but had to be voided because the
committees weren't yet ready ?
Mr. Kalmbach. No, but I think I was told that there were checks
that had been received by Mr. Harrison and that he had to hold them
because the committees weren't extant. But I don't remember checks
being voided. They could well have been.
Mr. "Weitz. Because you were no longer responsible at that time ?
Mr. Kalmbach. Well, I just didn't stay close to the administration
of this program. I was in and out. And after Mr. Nunn, who, as I
remember it, was the one primarily responsible for the kickoff dinner
on March 24, he came over to the campaign, I believe, subsequent to that
dinner, and then took over the administration, or took over the respon-
sibility for dealing with these milk people.
Mr. Weitz. Now, on page 2 of that memorandum, it refers to the
fact that the money would be collected in the Bennett committees and
that it would be unwise to transfer them into committees receiving
moneys from other sources for fear that it would contaminate those
other moneys.
Now, that, I suppose, is explained by the reasoning you've given us
today, as to separate the milk money from other contributions for fear
of disclosure?
Mr. Kalmback. That is my feeling and that is my feeling as to the
explanation for the word "contamination."
Mr. Weitz. Now, in the committee's hearings last summer with Mr.
Dean, there was a memorandum introduced into the public record,
dated May 18, which summarizes a meeting between Mr. Dean and
Mr. Haldeman — it was agreed by those gentlemen that the milk money
would be used to pay the operating expenses of the citizens connnittee,
the predecessors to the Committee To Ke-Elect the President.
Yet, in this memorandum, 3 days later, Mr. Strachan reports to
Mr. Haldeman that both you and Mr. Nunn suggest that it would be
too risky and, therefore, the money from the milk people should
not be used to pay those operating expenses.
Do you remember that, and if so, do you recall the reasoning behind
that?'
Mr. Kalmbach. I'm not sure I remember that, but it could well have
been that I was asked about it. or Mr. Nunn was asked about it and
I was apprised of it. And I think that probably the reasoning in back
of such a statement would be that if cliecks were written from these
committees that had already reported to the Clerk of the House, that
there would be the possibility the checks written in support of the
then startup campaign in 1971 would be traced back to that commit-
tee, and there the media and others would know that this was, in
fact, milk money that was being contributed to the campaign. T think
that's the reasoning in back of it, and it could well be, Mr. Weitz, that
that was a statement that I made, but I just don't remember it.
Mr. Weitz. Now, we've — you've alluded a number of times today
to the problem of disclosure, the fact that certain contributors had the
right, as you put it — and I want to speak to you for the time being —
not to have their contributions publicized prior to the nomination.
7605
Now, with respect to the milk producers, we've all agreed and
you've testified that the understanding was that they were reporting
and therefore contributions should be kept separate.
Now, my question is this, with respect to the citizens committee ex-
penses what was the fear, or what was the concern, if the milk pro-
ducers themselves were reporting to the Clerk of the House, if those
contributions were linked to the citizens committee ? Was it the size,
the timeliness of it, or some other reason ?
Mr. Kalmbach. No, the reason is this. I think as I recall it, if the
milk people had established, for example, a better Government com-
mittee and there had been a $2,500 contribution by a particular milk
trust to that committee, and that $2,500 sat in the bank account for that
particular committee, the Clerk of the House, they would have been
to conform with the requirements of the statute or whatever law was
pertaining, that it would meet the requirements of the law if the trust
would simply report to the Clerk of the House that a $2,500 pay-
ment had been made to this particular committee.
Now, there it would sit and that was the end of it. Now, if, in fact,
there was a disbursement of $2,500 to an advertising group that was
known to be doing advertising for the Nixon campaign, and that check
was drawn in favor of that advertising group and the reporter found
that check or knew about that disbursement, you could then track back
and it would become evident that this $2,500, in fact, was a contribu-
tion to the Nixon campaign, I think that was the reasoning, Mr. Weitz.
Mr. Weitz. Mr. Haldeman agrees with the suggestions set forth
that the money be kept separate and not used for such operating
expenses, but then he writes — or this is what has been identified as
his comment — "AVliat are they going to use the milk money for?" And
I suppose my question to you is, do you know what your recommenda-
tion was or what was in fact done with the milk money ?
Mr. Kalmbach. No, I think the thinking was, Mr. Weitz, that the —
that these funds would be held just for later use in the campaign.
Mr. Weitz. No decision was made ?
Mr. Kalmbach. I just don't think any decision was made.
Mr. Weitz. Now, you've referred to the problem of disclosure via
reporters and other means.
Mr. Kalmbach. Yes.
Mr. Weitz. The September 11 memo that I've already referred to —
September 11, 1971, after the reference to the $90,000 a month com-
mitment— goes on to discuss a concern about a report, an investigative
report, by a Minneapolis Star reporter. And it goes on to refer to the
fact that the previous day, which would have been September 10, you,
Mr. Dean, Mr. Nunn, and Tom Evans discussed this development.
Do you remember that meeting, or do you remember in general
terms, in September of 1971, what discussions took place with reference
to possible disclosure of the milk contributions ?
Mr. Kalmbach. No. I've been asked about this, of course, but very
evidently they did discuss this with me. I think there was a concern
as to this disclosure and the effects on the forthcoming campaign.
I don't recall that during this period that I had had any particular
involvement with the milk people since from and after the time that
Mr. Nunn had come upward and had assumed that responsibility. I
think it was in May of 1971, and I think I was informed of it just as
7606
a general observation and that it was a matter of some concern just
because of the publicity. And I don't know whether there was a concern
that this might, in fact, stop the future contributions by the dairy
industiy.
But I don't have an independent recollection of it, but inasmuch as
it is in this memorandum, I could well have been and I'm almost cer-
tain that I was advised of it. But I don't remember other than thesp
general observations, anything more about it.
]\Ir. Weitz. Xow, in that connection, the record shows that after —
at least with respect to these multiple committees established— that
after September 10, no further contributions were made to the reelec-
tion campaign through that medium.
And my question is, do you recall any time when, in fact, it was made
known to you that the contributions were being stopped or being
slowed down, for whatever purpose?
Mr. Kalmbach. Well, of course I've been asked that question and I
don't recall it. I have a memory, of course, now as we get into 1972,
that at some point, either November, December, or January, some
point in that period, I met with a Mr. Jacobsen. And Mr. Jacobsen
had been, or was then at that time for all — I'm not certain — a law part-
ner of Mr. Semer's. And Mr. Jacobsen was a very pleasant and nice
person and he made known — and I think this was in a meeting in
January of 1972 — he made known to me several things. And I recall
one meeting in January, and I'm not certain as to the date — I think it
was in mid-January, or at some point mid or early January — that a
number of points, one was that Mr. Jacobsen had been engaged by, I
think, AMPI. And from that I assumed that Mr. Harrison was no
longer active as one of the attorneys for AMPI, although I'm not cer-
tain of that.
I remember that the main purpose of the meeting, as I recall it, was
to advise me that a Mr. George 5lehren had been appointed or elected
as general manager of AMPI, replacing Mr. Nelson.
That in spite of that change in management, when Mr. Nelson was
then to become, I think, a consultant to AMPI rather than general
manager, that AMPI would continue to want to be supportive of the
President.
I think I had a feeling from these conversations with Mr. Jacobsen
and Mr. Nelson, that there was some disarray within the milk groups,
or whatever, but I just — as I look back and try to reconstruct this, the
main purpose of that meeting was to advise me of Mr. Mehren. I think
it was also to advise me, and I think I also reported this to Mr.
Strachan, that they would continue to make the contributions to the
campaign. And I think they indicated to me, at this meeting — but I
could be wrong — I think they indicated to me, at this meeting, that
their pledge would be $1 million, rather than $2 million. And I had the
feeling that the publicity — I think they had been irked, by the way,
that these committees had been established in such a manner that there
had been publicity. They were very concerned about the publicity, as
I was.
But they were reaffirming the fact that they would continue to sup-
port the campaign. And, as I say, I think they told me at this meeting
that they would contribute $1 million to the 1972 campaign and then
scale it back from the $2 million that I understood in March of 1971.
7607
Mr. Weitz. Now, this gets us into 1972, and although I have a num-
ber of questions on that meeting and subsequent meetings — Mr. San-
ders, do you have questions as to 1971 ?
Mr, Saxders. Yes.
This pertains to your March 24 meeting with Nelson and Chotiner.
Today, in telling us of this, you made mention of some remark at
that meeting about a price announcement to be made the next day.
Mr. Kalmbach. Yes.
Mr. Sanders. Can you explain that for me ?
Mr. Kaxmbach. I think as I remember it, that Mr. Chotiner, in
telling me of the fact that Mr. Ehrlichman had asked him to advise
me or relay to me the fact that they were reaflEirming their pledge
of $2 million in contributions to the 1972 campaign, that this was
that Mr. Chotiner also indicated, along with Mr. Nelson, an announce-
ment as to the price support or parity problem.
There was to be an announcement the next day and this was, in
fact, linked to this reaffirmation of the $2 million pledge, or that is
the way that I so understood it from that conversation.
Mr. Sanders. Did it appear to you that Nelson knew, before the
meeting with you, that there was to be a public announcement the next
day, of the price support ?
Mr. Kalmbach. My memory would be that I did understand that.
Mr. Sanders. Did they give you any perception of how they knew
there was to be an announcement ?
Mr. Kalmbach. No, I just — I'm not certain of that. I know that
Mr. Chotiner had said that he had talked to Mr. Ehrlichman, and
that Mr. Ehrlichman had asked him to advise me what evidently he
had advised Mr. Ehrlichman, that the $2 million pledge was being
reaffirmed.
Mr. Sanders. You've just now said that the reaffirmation of the $2
million pledge was linked to this price announcement ?
Mr. Kalmbach. That is correct.
Mr. Sanders. Would you be able to elaborate on the phraseology of
Chotiner or Nelson as to how they were linked ?
Mr. Kalmbach. No. I think the words were to the effect that
Murray Chotiner had indicated that John Ehrlichman had asked
him to see me and reaffirm this $2 million pledge, and I think, as
I remember it, he was saying that this was in view of the fact that
the announcement was to be made the following day, that he was
reaffirming the pledge, and that's the linkage that I recall on it.
Mr. Sanders. That's all I have.
Mr. Weitz. Returning to 1972, you've described just a moment ago
a meeting that you had with Mr. Jacobsen, you believe in the middle
or first part of January 1972 ?
Mr. Kalmbach. Yes.
Mr. Weitz. Was Mr. Nelson in attendance at that meeting ?
Mr. Kalmbach. Yes. The three of us met together, and I think it
was either January 14 or January 7, 1 am not certain.
Mr. Weitz. I think we have evidence that on January 14 the three
of you met. Was this in California ?
Mr. Kalmbach. I'm not certain.
Mr. Weitz. And that was 2 days following the replacement of
Mr. Nelson by Dr. Mehren ?
7608
Mr. Kalmbach. Excuse me. Do your records tell you that we met in
California ?
]\f r. Weitz. Yes.
Mr. Kalmbach. Well, that helps me. It must have been in California.
Mr. Weitz. Could you tell us how you came to meet with Mr. Jacob-
sen and Mr. Nelson ? Who first contacted you ?
Mr. Kalmbach. Just my memory is that Mr. Jacobsen first con-
tacted me, and I don't have a good feeling on when that was, whether —
how much earlier than January 14 it was. It could have been in
December, or it could have been all the way back into November. But
he contacted me and he indicated to me that he represented the, I
think it was AMPI, and, further, that Milton Semer had been — I
think he told me that the reason, not only that he was the attorney for
AMPI, but that he was a law partner or former law partner of Mr.
Semer.
And it is also my recollection that, following my conversation with
Mr. Jacobsen, the first meeting that I had with him, that I con-
tacted Mr. Mitchell to make certain in my mind that it was all right
for me to deal with Mr. Jacobsen, inasmuch as Mr. Semer was then
either to be appointed or was or had been appointed the finance chair-
man for Senator Muskie.
Mr. Weitz. What was the Attorney General's response ?
Mr. Kalmbach. And the Attorney General had no objection at all
for me to deal with Mr. Jacobsen.
Mr. Weitz. And as I understand it, and as reflected in the memos
we already discussed, Mr. Nunn had taken over, sometime in the mid-
dle of 1971, responsibility for arranging for the mechanics of the
milk contributions.
Can you tell us whether there was any particular reason you agreed
to or were brought back in to meet with the milk producers in 1972 ?
Mr. Kalmbach. All I can do is give you my best impression on that.
I feel that they were, first of all, this publicity had thrown it all off
the track, and I think they wanted to deal with someone that they
thought was just looking at it from a standpoint of an attorney rep-
resenting clients in Washington, that they thought that probably I was
the one that they should deal with. And I think Mr. Jacobsen sought
me out for that reason, and I think that probably Mr. Semer had told
him that I had arranged for Mr. Semer to see several people in the
White House or in the administration in 1969, and that Mr. Parr and
Mr. Nelson would probably have informed him of our contacts in 1970
and in 1971.
So it seems to me that thev had a new lawyer, or a lawver that I
had never known, that was involved before Mr. Jacobsen. He wanted
to come back and he wanted to deal with me, and he knew I was a
primary fundraiser for the campaign. And I think that's the back-
ground to it.
Mr. Weitz. Now, in a January 18, 1972, memorandum from Strachan
to Haldeman, political matters memorandum, item No. 1, refers to
the fact that you met with Messrs. Jacobsen and Nelson on January 14
and I take it that would be the meeting that you just described.*
Mr. Kalmbach. That is correct.
•See strachan exhibit No. 10, p. 75()2.
7609
Mr. Weitz. Now, it goes on to say that Kalmbach would take over
this project and he would discuss it with the Attorney General on
January 20. Would that be consistent with your recollection of dis-
cussing it with Mr. Mitchell after you met with those gentlemen in
California ?
Mr. Kalmbach. Yes, it would be.
Mr. Weitz. Now, it goes on to say that Kalmbach informed Colson
of the meeting. This is the January 14 meeting, but would not tell Col-
son who asked him to see Jacobsen.
Then, my question is this: Do you have any recollection as to
whether someone, perhaps, in the administration suggested that you
meet with Mr. Jacobsen, or that Mr. Jacobsen represented to you that
someone had suggested that the two of you meet?
Mr. Kalmbach. My memory on that is that Mr. Jacobsen came to
me and just introduced himself to me as, I say, a law partner or former
law partner of Mr. Semer. I don't recall that he said he was coming to
me as a result of any direction to do so from Mr. Mitchell or anyone,
or it's not like my 1969 meeting with Mr. Semer.
I felt that by this time that Mr. Harrison was probably no longer
active. They were not dealing with Mr. Colson, I don't think, but I'm
not certain of that. But for some reason, and I think it was because of
Mr. Semer and Mr. Colson being unfriendly, that I just felt that,
inasmuch as Colson had been so much involved in early 1971 and all,
that he would be apprised of this, but not told it was Jacobsen, if I
remember that memo right.
Is that consistent with that memo ?
Mr. Weitz. Well, it is consistent with that statement, and also the
previous sentence does refer to the fact that you were going to talk to
the Attorney General because of the relationship between Jacobsen
and Semer, and Semer's role in the Muskie campaign.
AVas there also — you mentioned an antipathy, as you characterized
it, between Mr. Semer, or at least some bad relations between Mr.
Semer and Mr. Colson. Did you understand what the relationship
was between Mr. Mitchell and Mr. Colson ?
Mr. Kalmbach. I think Mr. Mitchell had a great deal of antipathy
toward Mr. Colson. I think I remember him at one time characterizing
Mr. Colson as a walking time bomb.
Mr. Weitz. Was it Mr. Mitchell's counseling, or was any of his
involvement in this matter — was there any involvement by Mr. Mitch-
ell other than what you've referred to ?
And would that have, if so, would that have in any way led to the
decision to keep Colson only informed on a limited basis, in addition
to the role of Jacobsen ?
Mr. Kalmbach. I don't recall that. I don't recall that Mr. Mitchell
was instrumental in having Mr. Jacobsen see me, but it could well have
been. I just don't recall it.
Also, I want to go back here and say that the antipathy, I think,
between Mr. Colson and Mr. Semer was expressed to me by Mr. Colson
on Mr. Colson's side, and I don't remember Mr. Semer ever being
critical or negative toward Mr. Colson.
Mr. Weitz. I believe the record shows that on January 24, 1972,
about 10 days after your first meeting in January of that month of
30-337 O - 74 - pt. 17
7610
that ye<ir with the milk people, the Nader v. Bufz litigation was filed.
It challenged the validity of the pre\'ious year's establishment of the
milk supports.
And we have a February 1, 1972. memorandum from Strachan to
Haldeman and, again, a political matters memo* that refers, in part,
to the cutting back of the $2 million commitment to $1 million, to
which you already referred. But it also goes on to say that "you will
accept the risk'' — "you" being Kalmbach — "will accept the risk of
being subpenaed by the court in connection with the Xader milk suit."
In addition to what you have told us already today, was there any-
thing else that came to your attention, either at that time or later,
that bore on the setting of milk price supports in 1971, and any rela-
tion with that to subsequent contributions or subsequent activities by
the dair\' people?
Mr. Kalmbach. No, I don't recall anything further at this time.
Mr. Weitz, in addition to what I've testified to.
Mr. Weftz. AYhat risks did you envision, or what concerns did you
have at that point, if you had them ?
Mr. Kalmbach. Well, I don't know that I had any real concerns at
all. I had been involved in eflPectins: the legal mechanics and proce-
dures, and I don't remember that T was involved in any substantive
discussions in the areas in which the Nader v. Butz suit would be in-
quiring, and I didn't feel that if I was deposed that it would be — that
it was something that I didn't feel would be particularly harmful. At
least I had that feeling.
Mr. Weitz. Xow, 2 days after that memorandum on February 3,
the record — we have testimony that you met with Dr. Mehren. Mr.
Nelson, and Mr. Jacobsen and several other law partners in Los
Angeles.
[A brief recess was taken.]
Mr. Weitz. Back to the February 3 meeting. I was about to say,
before our break, do you recall that meeting with ]\Ir. Nelson, Dr.
Mfehren, Mr. Jacobsen, and two of your partners?
Mr. Kalmbach. I do.
Mr. Weitz. Those partners were Frank DeMarco and Bob Olsen?
Mr. Kalimbach. That's correct.
Mr. Weitz. What was the purpose of that meeting ?
Mr. KALiiBACH. The purpose of that meeting, as I remember it, was
that Mr. Jacobsen had talked to me, I think it was in Januar\% and
asked me to meet with Dr. Mehren, who was then the new general
manager, to be appointed the general manager of A]\IPI. And he
just wanted me to get acquainted with him. And they flew out, as I
remember, from Texas to California, and we met in our Los Angeles
office about 11 or 11 :30 in the morninsf on the 3d and after a rela-
tively short time adjourned to the Jonathan Club for lunch. And we
said goodby to them on the street corner, where they left to return to
the airport to fly back to Texas.
Mr. Weitz. Was there a discussion, either in your offices or at lunch,
as to contributions ?
Mr. Kalmbach. I don't remember too specifically on this. I think
I indicated to them at the luncheon table that anv contributions would
•See strachan exhibit No. 11, p. 7503.
7611
be appreciated. And the first time I ever met Dr. Mehren was then,
and I made it just plain to them and at some length, because I had
never met Dr. Mehren before.
I went into quite a little statement at the outset that you have to
understand that there was no quid pro quo involved, because I was,
frankly, concerned, and I wanted to be sure that he understood that.
And I recited that at that meeting.
Mr. Weitz, Was there any particular reason for that concern?
Mr. Kalmbach. I didn't know what they wanted to talk about,
and I didn't know what might come up later. And by this time there
had been the Nader-Butz suit filed. And there had been publicity in
September, October. I frankly was not enthused about handling these —
this particular contributor group. I had taken it on because I had
been asked to do so, but I made it clear, I think, to Gordon Strachan.
I think I made it clear to Bob Haldeman, either directly or through
Gordon Strachan, that I would prefer not to handle this assignment.
It was something I just really would have preferred not to do. But
because I liked Jake Jacobsen and because I felt that I would be
willing to meet with this man, I agreed to meet him out in Los Angeles.
Mr. Weitz. Now, our records show that in 1971 there was an ongoing
investigation by the Justice Department of the milk producers, and
particularly Associated Milk Producers, AMPI, that there was some,
in the fall of 1971, some concern expressed by Mr. Colson to Mr. Halde-
man about the impact of that investigation on their relationship with
the milk producers, possibly some discussion between Mr. Haldeman
and Mr. Mitchell on that score also.
Subsequently, I think the record also shows that at some time in
late November 1971, Mr. Mitchell rejected a request to have a grand
jury impaneled. Ultimately, on February 1, 1972, 2 days before the
meeting you just described in TiOS Angeles, a civil suit was filed against
Associated Milk Producers by the Justice Department.
Now, my question is this: Wasn't there some concern, and if it
was not expressed by you, at least to you, or awareness, that this
increased activity in January and February of contacts or attempted
contacts by the milk producers was in some way connected to the
antitrust suit ?
Mr. Kalmbach. Well, I've been asked questions in this area, and my
memory on it is just not too good. I remember that I talked with
Mr. Mitchell back and forth through this latter part of January and
in early February. This was just shortly before Mr. Stans came aboard
as finance chairman. There were a number of things we discussed.
It would be my best memory that at some point in these discussions
there was some mention of the fact of the antitrust action being filed,
the fact that there was a great deal of displeasure expressed, I think,
by some of the milk people. And for some reason, Chicago comes into
my mind.
Mr. Weitz. I think the investigation was run out of the Chicago
office.
Mr. Kalivibach. And I think Mr. Mitchell was indicating to me that,
although I was dealing with these people, that I ought to understand
that they were probably upset.
Now,' I don't know whether he indicated to me that he was being
talked to by Mr. Colson. It just — I don't have a really good memory
7612
as to these discussions, other than that I was advised, I think by Mr.
Mitchell, of these ongoing things.
Mr. Weitz. In that connection, were you asked either directly or
was it your impression that Mr. Mitchell or Mr. Stans, or perhaps
even Mr. Haldeman, were asking you to, in a sense, soothe over the
wounds of the dairy people and still see if something could be sal-
vaged from your contributions, from the earlier commitment?
Mr. Kalmbach. I think essentially that is right. I think I indicated
to Mr. Strachan, as a result of my meeting earlier with Mr. Nelson
in Los Angeles, now, as you refresh me with your record, that I indi-
cated to Mr. Strachan that it was a good meeting, in the sense that the
milk people were reaffirming their decision to support the campaign,
even though there was a cutback from $2 million pledged to $1 million.
Now, I ought to go on and indicate, because it is from my memory,
now, again it has been refreshed, that Mr. Jacobsen and I worked out
a balance of the pledged amount of $750,000, which I had come upon,
as I remember the figures here, that there was approximately $250,000
that had been contributed up to that time, and that if they were re-
affirming the pledge of $1 million now, or affirming the pledge of $1
million, modified from $2 million, that left $750,000 still to be paid.
Now, I remember that I advised Mr. Stans of that. And I have a
memory that I worked out a month-by-month schedule with Mr. Jacob-
sen, as to the manner in which the milk people would get these contri-
butions over to us. I think that most of those contributions were to be
go<-ten ovpr to us prior to April 7, but some would be gotten over to us
after April 7.
Mr. An^eitz. Do you recall at the meeting in February in California
any reference either by you or Mr. DeMarco to the schedule which
might entail, for example, one-third payment in February, one-third
payment in March, one-quarter just prior to April 7, and the remainder
after April 7 ?
Mr. Kalmbach. You mean with Mr. Jacobsen ?
Mr. Weffz. Mr. Jacobsen and/or Dr. Mehren or Mr. Nelson.
Mr. Kalmbach. I don't recall that.
Mr. Weftz. Is that consistent with your recollection of discussions
with Mr. Jacobsen alone?
Mr. Kalmbach. Yes, it is. And perhaps with Mr. Nelson. But I don't
have any recollection at all of such a discussion with Dr. INIehren. And,
of course, not at all with Mr. Olsen or Mr. DeMarco.
Mr. Weitz. ^Vlio was to be the recipient of those contributions prior
to April 7?
Mr. Kalmbach. The various committees, the names of which we
would ffive the milk producers.
Mr. Weitz. Was there any negative reaction ? Was this plan, whether
or not its specific amounts, but this general plan of committees to re-
ceive additional contributions mentioned in the February 3 meeting?
Mr. Kalmbach. I don't remember that it was.
Mr. Weitz. And you don't recall Dr. Mehren reacting negatively
to the thought of additional committees receiving contributions prior
to April 7?
Mr. Kalmbach. I don't recall Dr. Mehren reacting negatively at all.
I think there was some discussion about the complexities of campaign
7613
finance and all, but I don't remember that we talked at all about
amounts or a timetable or that sort of thing.
jNIr. WErrz. "When did these discussions with Mr. Jacobsen, alone,
with respect to timetable and so forth, take place ?
]Mr. IvALiMiiAcii. I think they took place in January, but it could
have been in February. I'm just not certain on that.
Mr. WErrz. There's a February 16, 1972, memo from Strachan to
Haldeman, political matters memo, that has one short paragraph re-
ferring to the milk money. And it says that "Kalmbach is working with
the milk people to increase the $233,000 currently banked to $1 million
byxVpril7."
And that's the arrangement that you referred to, the approximately
$750,000 remaining balance ?
Mr. Kalimbacii. Yes, and I think that memo, it may be that he told
me about the $1 million from $2 million in Febiniary instead of Jan-
uary. But my best memory is that it was in January.
Sir. Weitz. I think that's consistent with the February 1 memo that
already cuts it back to $1 million.
Mr. Kalmbach. That's correct. But as I think about this carefully,
it would be my memory that there was some of that $750,000 that would
be contributed after the April 7 date.
iNIr. Weitz. Was there any reference, either in the Februar}^ 8 meet-
ing or these other meetings, meeting or meetings, with Mr. Jacobsen,
to any substantive problems, including the antitrust suit ?
Mr. Kalmbacit. You mean at this meeting ?
Mr. Weitz. The February 3 meeting or these other meeting or meet-
ings with Mr. Jacobsen to work out the details of the contributions.
]\Ir. Kalmbach. I just don't remember any. It could well have be^n
that there Avas a mention of the filing of such a suit, but I just don't
have a memory on it.
jNlr. Wei rz. But, as you say, you were already aware of that through
conversation either with Mv. Stans or Mr. Mitchell ?
Mr. Kalmbach. Yes. And I think it would be probably more likely
Mr. Mitchell than Mr. Stans.
Mr. Weitz. The February 1 memo we referred to, which talks about
the $2 million and the $1 million and the Nader suit
Mr. Kalmbach. Right.
Mr. Weitz. It is indicated there that Haldeman was to discuss the
matter with the Attorney General, and there's a reference or talking
paper for a Februaiy 9 meeting. And although there's no meeting in
the logs for that date, there is around that time, between Mr. Mitchell
and J\Ir. Haldeman.
Did you ever find out or get any further guidance from either Mr.
Haldeman or ]Mr. Mitchell as to what they wanted you to do with
respect to the milk people or any further or specific references you can
think of to the antitrust suit ?
Mr. Kal:mbach. No, I don't remember that, jSIr. Weitz. I don't—
I didn't have any feeling that I was to, that I was expected to talk to
anybody a])out the antitrust and that sort of thing. My sole dealings
with Mr. Jacobsen and with Mr. Nelson was to work out a timetable
for this $750,000 to be received. I know that I, during tliis period, I
Avas concerned, as I've expressed, about my dealing with the milk
7614
people. I felt that the publicity and all was not worth, frankly, the
money to be received, and this led up to a second meeting with Dr.
Mehren. And I think I only met with him twice, but I don't remember
any other time but the second meeting, the second meeting with Mr.
Mehren in mid-March.
Mr. Weitz. You do recall meeting with him in mid-March 1972?
Mr. KalmbiAch. I think it was in mid-March. I'm not certain of
that, but that's my best memory, and it could have been later. But my
best memory of it is in mid-March.
Mr. Weitz. Would it have been before April 7 ?
Mr. Kalmbach. That's my memory. I was not in Washington after
April 7 until early May, and then I was in Washington, I think, in
early May for one period before I left on a trip. And I thought and
wondered to myself if I could have met with Dr. Mehren in early
May. But my best memory is that I met with he and Mr. Jacobsen and
Mr. Nelson in their suite at the Madison in mid-March.
Mr. Weitz. Now, I believe the records of the Madison Hotel indi-
cate that the only time in March, and even all of April 1972 when
the four of you were all registered at the Madison Hotel was on
March 15 and 16, 1972; and I take it that would be consistent with
your recollection ?
Mr. Kalmbach. Absolutely consistent.
Mr. Weitz. I think we also have independent evidence that the
meeting — independent testimony that the meeting took place on the
16th.
Mr. Kalmbach. That's very helpful, because that's my memory.
Mr. Weitz. Could you tell us how you came to meet with them on
that date ?
Mr. Kalmbach. Yes, I can, because when I left, and we said goodbye
to each other on February 3 in Los Angeles, I left it with them, and
particularly with Mr. Jacobsen, that I would be willing to meet with
them again, at their convenience, as a followup to that just-get-
acqiiainted meeting with Mr. Mehren, Dr. Mehren. And it would be my
memory that Mr. Jacobsen called me or talked to me — oh, a few days
prior, or whatever it was prior, to the March 16 meeting. I think that's
the date you said. And I said, fine, that I would meet with them.
Mr. Weitz. Did he call you long-distance ?
Mr. Kalmbach. I don't remember.
Mr. WErrz. But he was setting up a meeting, rather than by haj^pen-
stance running into you, and asking you if he could meet with you for
a few minutes ?
Mr. Kalmbach. That would be my memory, yes.
Mr. Weitz. Did he
Mr. Kalmbach. He could have been that casual. It could have been
that he ran into me. But my best memory is that he called me — but he
could have just seen me someplace and said that we're here in Wash-
ington, and let's meet.
Now, I went into that meeting convinced of my own mind that I
didn't want to deal with these people any more. And this is consistent
with two or three other things that I was doing at this time, where I
felt contributions had been offered and, in fact, had been received by
the campaign, that we should not deal with particular contributors.
Not that these contributors were — ^anything was wrong with them, but
7615
I felt the publicity for the campaign, the negatives of that far out-
weighed the actual funds received, and I went into that meeting with
tAvo purposes in mind, and I made up my mind I was only going to be
there for 5 or 10 minutes. One, that I was going to tell them that, as
far as I was concerned, we were not interested in receiving any more
funds from AMPI and the people representative of that meeting ; and
second, that if they felt they had a pledge outstanding to the campaign,
that that pledge was, in fact, abrogated. And I did that.
I went in and met with both of those points. At that time, I was the
associate finance chairman of the campaign, I felt I had the authority,
on my own volition, to abrogate the pledge ; and I felt I had authority,
on my own volition, to tell them that I would not deal any longer with
the milk people.
Mr. Weitz. We have a copy of an article by Jack Anderson, dated
February '29, 1972, and the headline is "Secret Memo Bares Mitchell-
ITT Move." I'd like to mark this as exhibit 2.
[Whereupon, the document referred to was marked Kalmbach ex-
hibit No. 2, for identification.*]
Mr. Weitz. I believe this is the first public article about what has
come to be known as the ITT scandal, which led to a number of dis-
closures that year. Was this one of the principal, or one of the reasons —
this disclosure in connection with the ITT matter in late February or
]March that led to your decision not to accept any further milk con-
tributions?
]Mr. Kalmbacti. No. I don't remember. Mr. AYeitz, that that entered
into my thinking. I felt that whatever the ITT — any purpose relative
at all to ITT had no relationship, particularly, at all with the milk
fund.
Mr. Sanders. Finally, to see that we're finally getting Jack Ander-
son into these hearings, even though indirectly
Mr. Weitz. What about the antitrust suit that Avas then pending?
Wasn't there, at least in your awareness, from either Mr. Stans or
probably Mr. Mitchell, didn't that present — or, perhaps on a less
glamorous scale, the same type of problem as the milk producers?
INIr. Kalmbach. Yes, it would have, and I have a particular memory
here, Mr. Weitz, of a telephone call on or about April 4 that I made
to Dr. Mehren at the request, I think, of jNIr. Jacobsen. And when I
called him, it was just 3 days before the new law took effect, and 3 days
before I left to return to California and resigned as associate finance
chairman of the campaign. I recall that Mr. Jacobsen said — asked me
to call Dr. Mehren, and it seems to me he was in Texas, or wherever —
San Antonio or wherever ; and when I called, it's my very best recollec-
tion that he indicated to me that concern about the antitrust situation
then pending, and indicated to me he would like to have me intercede
with someone at the "Wliite House on their behalf, at least to indicate
their concern or whatever.
jNIr. Weitz. Let's be more specific. They were concerned, and they
were expressing their concern ?
IMr. Kalmbach. That's correct.
Mr. Weitz. Did you understand that they were expressing their
concern to people in the White House already ?
•See p. 7624.
7616
Mr. Kalmbach. I don't remember. I felt that there was just kind
of a general tone of frustration after Dr. Mehren's — in Dr. Mehren's
voice.
]\Ir. Weitz. Hadn't Mr. IMitchell already indicated that they were —
the milk people — were concerned about the antitrust suit?
Mr. Kalmbach. Yes.
Mr. Weitz. So therefore, he was aware ?
]Mr. Kalmbach. My recollection is that ]Mr. Mitchell expressed that
to me in late January or early Februa^J^
Mr. Weitz. And therefore, at least, he was aware. And I believe,
that period you mentioned, he was Attorney General then, that he
was aware of their concern or their displeasure?
]\Ir. Kalmbach. Right.
Mr. Weitz. What did you understand Mr. Jacobsen actually to be
asking vou to do ?
Mr. Kalmbach. Again, I'm giving you my very best memory on this,
but my feeling was that he was asking me to talk to somebody at the
White House. I don't remember that he mentioned any particular
person's name, but to talk to somebody in the White House on their
behalf, as to this antirust problem. And I also had the understanding,
or the feeling at the time, that they were about to make another con-
tribution just prior to April 7.
Mr. Weitz. To the reelection campaign ?
Mr. Kalmbach. Yes ; and this was following my very abrupt break-
off of conversations with him on March 16, and consistent with that
breakoff, my memory is that I advised Dr. Mehren that I would not
intercede and would not do anything in this area, and that our dis-
cussion, our telephone discussion, terminated rather abruptly.
Mr. Weitz. Let me, if I might, go through this slowly, so that we
can extract the extent of your information on this. Do you recall, in
the conversations, where Mr. Jacobsen — I take it he calls you?
Mr. Kalmbach. That's my memory.
Mr. Weitz. Was there only one call, with both Mr. Jacobsen and
Dr. Mehren calling you ?
Mr. Kalmbach. I think I placed the call to Dr. Mehren, that Mr.
Jacobsen asked me to call Dr. Mehren.
Mr. Weitz. Let me indicate to you what we have in our records,
and maybe we can refresh your recollection this way.
Mr. Kalmbach. Thank you.
Mr. Weitz. And reconstruct it.
We have records that indicate that on March 31, 1972, there is a
call charged to your credit card, or the credit card you were using, that
came from the Republican National Committee to Mr. Jacobsen's home
telephone ; a completed call from Mr. Jacobsen using tlie credit card
that you used for the Republican National Committee. On April 4,
that is 4 days later, there are two calls charged to the same credit
card, one to Mr. Jacobsen's home telephone again, and the second
to Dr. Mehren's home telephone.
Now, my question is, there appears to be three calls. I take it the
third call would reflect the call from you to Dr. Mehren on April 4.
Is that correct ?
Mr. Kalmbach. That would be fair.
7617
Mr. Weitz. Could you reconstruct them for us? Could you recon-
struct what took place prior to that telephone call; that is, particu-
larly, the reason for and the substance of the two telephone calls to
Mr. Jacobsen?
Mr. Kalmbach. No; other than it's my memory that I called Mr.
Jacobsen, or Mr. Jacobsen and I talked, because he wanted me to talk
to Dr. Mehren.
Mr. Weitz. With regard to the antitrust suit and contributions?
Mr. Kalmbach. I'm not sure if Mr. Jacobsen mentioned the antitrust
suit or antitrust matter when we talked.
Mr, Weitz. But certainly, that was a subject of your conversation
with Dr. Mehren ?
Mr. Kalmbach. That is my memory.
Mr. Weitz. And can you tell us, as carefully as you can, whether
Doctor — excuse me — Mr. Jacobsen referred, if not to the antitrust suit,
then to the interest and contributions prior to April 7, or was his
telephone call merely to set up the later call to Dr. Mehren?
Mr. Kalmbach. It would be my memory that Mr. Jacobsen called
me, or we talked, and that he was setting up for me to call Dr. Mehren.
Mr. Weitz. Now, can you tell us, as carefully as you can, what took
place in the telephone conversation with Dr. Mehren ?
Mr. Kalmbach. Well, my memory on that telephone conversation is
that he was — ^he expressed a great concern about the antitrust matter
that was proceeding, and expressed a desire for me to be helpful to him
or to AMPI, and I understood — and this is my very best recollection
of this — ^that he wanted me to intercede with someone in the admin-
istration.
Mr. Weitz. In the White House ?
Mr. Kalmbach. And I understood it to be in the "\\Tiite House.
Mr. Weitz. This was Dr. Mehren talking, and not necessarily Mr.
Jacobsen ?
Mr. Kalmbach. That's correct.
Mr. Weitz. Did he mention contributions ?
Mr. Kalmbach. I don't remember if he did or not, but I had the
feeling that he was ready to make a contribution of some size to the
campaign, and that he was calling me just before he did it. I had that
impression.
Mr. Weitz. Did you also have the impression that the contributions
were to facilitate or encourage you to make the contact to the White
House or the administration ?
Mr. Kalmbach. Yes, sir ; I did.
Mr. Weitz. Now, we have evidence that on April 4, checks totaling
$150,000 ; in fact, 30 checks, each in the amount of $5,000, were drawn
by AMPI's political trust, with the name of the recipient committee
left blank, and those checks were ultimately voided, we understand, in
a day or two following April 4. We also have some evidence, some
testimony that as much as $300,000, by perhaps all thre<. dairy politi-
cal trusts, were contemplated as contributions prior to April 7, right
in that April period.
Do either of those figures, or an^ of those matters, refresh your
recollection as to either the amounts, the mechanics, or anything else
that either Mr. Jacobsen or Dr. Mehren discussed with you ?
7618
Mr. Kalmbach. I don't remember that we discussed any amounts.
The $150,000 or $300,000, that doesn't refresh me at all. The fact that
checks were voided would be consistent with my conversation with
Dr. Mehren, or my recollection of my conversation with Dr. Mehren
on April 4.
Mr. Weitz. It was your understanding or your impression that a
substantial contribution was contemplated prior to April 7 ?
Mr. KALMBACH. Absolutely. Now, whether I gained that under-
standing or impression from Dr. Mehren or from Mr. Jacobsen, or
from both of them, I can't be certain.
Mr. Weitz. Did either Dr. Mehren or Mr. Jacobsen, in any way,
indicate whether they checked with or discussed this contribution just
prior to April 7, and called to you and asked for your help with anyone
in the White House or the administration ?
Mr. Kalmbach. I don't have a memory that they did, or that I had
that impression. I wanted to — I had the feeling that there was a great
amount of — and I don't know whether I got this from Mr. Jacobsen
in that call or not — but I had the impression that there was very
mixed emotions among the milk people as to whether that should be
contributed at all, or that they should contribute at all to the campaign.
And that's just an impression, but a very strong impression, that there
was a difference of opinion among the milk people. But this was
subsequent to the March 16 meeting that, I think, took place on
March 16. And my action in talking to Dr. Mehren on the 4th, and
my recollection of it, is consistent with my actions on March 16.
Mr. Weitz. Either following your March 16 meeting, or the April 4
telephone conversation, did you discuss or in any way report this
matter to anyone in the Wliite House or the administration, or such
as Mr. Mitchell in the campaign ?
Mr. Kalmbach. I don't remember that I did. I went home to Cali-
fornia on the 7th of April. I did not come back to Washington until,
I think, the first week of May, and then I left on a trip that took me —
that was 3 weeks, and I don't recall that I discussed it.
Mr. AVeitz. Mr. Ehrlichman has testified here that at some point,
and he is not clear when — although he thought it was much earlier,
such as in 1969 — he thought that you had reported to him that the milk
people, from whom you had received the contribution, were seeking
a quid pro quo. And I am paraphrasing, but I think I am being fair
in the paraphrasing — they were interested in somehow making over-
tures regarding a quid pro quo, and because of that, you had cut off
contact with them. And I think he mentioned this in connection with
Mr. Semer.
Now, let me ask you several questions. First, do you recall any
discussions with Mr. Ehrlichman in connection with cutting off milk
money because of the possibility, or an overture of a quid pro quo ?
Mr. Kalmbach. Yes. This refreshes me, because I remember very
clearly at one meeting I had with Mr. Ehrlichman, and certainlv not
in 1969, absolutely not in 1969. But I remember in 1972, and I think
what Mr. Ehrlichman has testified to is consistent with this, that I
met with Mr. Ehrlichman. and I told him that I had broken off
with the milk people, and he said, that was good judgment.
Mr. Weitz. And did you mention, in that connection, that it was
because of a possibility or an overture for a quid pro quo?
7619
Mr. Kalmbach. No, I don't remember that I did. I just indicated
that I was concerned about the publicity on their side, and the pub-
licity on our side, and I don't remember that I mentioned any quid
pro quo, but I just told him that I had broken it off.
Mr. Weitz. You may not have mentioned a quid pro quo, but let me
put the question to you this way. This is no longer 1970, where early
money or large contributions might be an embarrassment. This is also
not a private contributor whose contributions would be totally anony-
mous, as opposed to some of the individuals.
My question is this : In March or April of 1972, although there was
an interest, pre- April 7, even for the milk producers, was your con-
cern with respect to their possible contributions and the appearances
created by that any greater than, or caused for any other reason other
than just a large contributor prior to April 7, or did it go to some
substantive policies, or some other similar reason ?
Mr. Kalmbach. Well, it could be this, Mr. Weitz, as I think about
it. It could be that I anticipated a request that if they gave additional
contributions, that they would come back to me with a request for me
to intercede with Justice or with Jolin Ehrlichman, or somebody. And
maybe I anticipated a request for a quid pro quo, and that may be the
explanation for it. But in my conversation with Mr. Ehrlichman, and
I think this is the time I told him I had broken it off, John Ehrlich-
man said, "Herb, that's good judgment," and that was the end of it.
But it would be my memory that I did not — I had not been asked to
intercede in any antitrust matter at that time. I seem to have a memory
that Dr. Mehren, when I talked to him on April 4, wanted me to
intercede.
Mr. Weitz. It was clear at that time ?
Mr. Kalmbach. That's my recollection, and this is consistent with
Mr. Ehrlichman 's memory, except that Mr. Ehrlichman, if he relates
that back to 1969, that is not true; because when I talked to him, and
talked to others, about Mr. Semer, at that time there was absolutely
no expression on the part of anyone that this is something that should
not be done.
Mr. Weitz. Following April 7, do you recall any further contacts
with representatives of the dairy industry ?
Mr. Kalmbach. I think I met with a man by the name of Ben Mor-
gan in Los Angeles with Mr. Jacobsen, because Mr. Jacobsen was rep-
resenting that man, and I just simply said that I'll be glad to meet
with you. But it was a social meeting and nothing else.
Mr. Weitz. No particular solicitation or pledges?
Mr, Kalmbach. No ; I don't remember any.
Mr. AVeitz. In your records which you provided to the committee,
there is a notation on May 1, 1972: At 11:30 a.m., Jake Jacobsen.
Would that have been the meeting with Mr. Morgan and Mv.
Jacobsen ?
Mr. Kalmbach. It might be, but I'm not certain. Also, Mr. Jacob-
sen at that time was working, I think, with -John Connally, and I had
been up to New York, and had obtained a contribution from — now, I
don't know if it's this time or at another time, but I'm trying to relate
it to that date— from Mr. Watson, Tom Watson of IBM, who is a
Democrat. And Tom Watson indicated to me that he would be willing
to be prominent in a Democrats for Nixon organization. And I think
7620
I advised both John Connally and, I think, Mr. Jacobsen, although
I'm not certain of that, that that may have been that meeting,
Mr. Weitz. In March of 1972, by the way, in connection particvilarly
with your meeting of March 16 with the dairy people, did they refer
to anyone else they had talked to, or attempted to talk to, and I would
include in that question Mr. Connally ?
Mr. Kalmbach. No. I don't ever remember
Mr. Weitz. It was just a brief meeting, in which you basically said
your piece?
Mr. Kalmbach. It was 5 or 10 minutes, and then I was gone.
Mr. Weitz. Now, we ha"v^ testimony that, at your meeting with Mr.
Morgan, which was placed, probably, in May or June — it may very
well have been this May 1 meeting. But, in any event
Mr. INIoRGAN. Make sure it's Ben Morgan.
Mr. Weitz. Ben Morgan, of Dairymen, Inc.. that at the end of the
meeting, you and the other gentlemen went to the airport, and after
Mr. Moro^an denarted, Mr. Jacobsen stayed behind. Do you remember
that sequence of events ?
Mr. Kalmbach. No.
Mr. Weitz. Do you recall anvthing in particular you discussed with
Mr. Jacobsen, apart from Mr. Morgan ?
Mr. Kalmbach. I do not. I just liked him as a person, and I don't
recall that we discussed anything. He was very well aware of the way I
felt.
INIr. Weitz. Did you become aware later that Dairymen, Inc., and the
third of the three co-ops, Mid-America Dairvmen, made contribu-
tions to the Finance Committee To Re-elect the President ?
Mr. Kalmbach. No. At a later time, I became aware that contribu-
tions were made at election time. But I was not inA'olverl in t^ose.
Mr. Weitz. Did you also become aware, at a later time, that con-
tributions were made by the trusts of those two organizations to Demo-
crats for Nixon ?
Mr. Kalmbach. I have no recollection of bein.<r aware of that. I knew
that Jake Jacobsen was working with John Connally. and I would
have assumed that thev would have contributed to the Democrats for
Nixon program. But I was not aware of that, and did not stay close
to that picture.
Mr. Weitz. Did Jake Jacobsen ever ask you. after this April 4 tele-
phone conversation or this meeting with INIorgan. to renew the attempt
to have the finance committee or Democrats for Nixon accept contri-
butions from the dairy people from his or from Dr. IVIehren's orga-
nization?
Mr. Kalmbach. T don't remember that he did.
Mr. Weitz. Did you become aware that, later on in 1972, Lee Nunn
made a solicitation, or met with Dr. INfehren ?
Mr. Kalmbach. I became aware of that much subsequent to that.
Mr. Weitz. You were not aware contemporaneouslv of either Lee
Nunn referring to you. or Jake Jacobsen, or anyone else ?
Mr, Kalmbach, I don't remember I^e Nunn talking to me about
that, and I learned about that much subsequent to the time, I think
he went to Texas, I was so told that he did.
7621
Mr. Weitz. Did you learn whether or not it was subsequently that
he was soliciting or requesting the three-quarters of a million dollars
that had not been contributed prior to April 7?
Mr. Kalmbach. I learned of that subsequent to this, and I did not
know about this at the time. I have no recollection of knowing about
this at that time at all.
Mr. Weitz. Do you know whether, in fact, the money was con-
tributed ?
Mr. Kalmbach. I do not.
Mr. Weitz. Mr. Sanders ?
Mr. Sanders. Have you ever met John Butterbrodt?
Mr. Kalmbach. I don't recall that I have.
Mr. Sanders. Or have you ever talked to him by telephone ?
Mr. Kalmbach. I don't recall such conversation. I have no recol-
lection of ever meeting or talking to him.
Mr. Sanders. In your telephone conversation with Dr. Mehren on
April 4, can you recall his reaction or reply after you gave him an
indication that you would not intercede at the White House ?
Mr. Kalmbach. Well, as I said, Mr. Sanders, in my earlier testi-
mony today, I had the feeling that first, he was — it was somewhat of
an abrupt termination of our discussions, and one of disappointment
and the feeling that we were just breaking off. Now, that is consistent,
of course, with my March 16 meeting with Dr. Mehren, ]Mr. Nelson,
and Mr. Jacobsen.
Mr. Sanders. But do you have any recollection of any remarks by
him which would have given you some insight into what he intended
to do thereafter ?
Mr. Kalmbach. No. I just felt that he was just signing off. I just
felt that he was kind of giving up and signing off, and here you peo-
ple are asking for contributions and you're not willing to help. I'm
not saying that this is what he said, but this was the gist of what I
got out of that conversation, and it doesn't make sense, or something
like that. It just terminated the conversation.
Mr. Sanders. Did you give him any reason to think that there might
be some consideration given to his request ?
Mr. Kalmbach. I did not.
Mr. Sanders. Or that you might even make some inquiry for him?
Mr. Kalmbach. No, sir, I did not, and I have no memory at all of
doing so. And my memory of that is consistent with what I did on
March 16 at that meeting.
Mr. Sanders. Between the time that you spoke with Jacobsen, on
or about the 4th of April and the time you called Dr. Mehren, did you
talk with anyone in the administration ? That is
Mr. Kalmbach. No, I don't recall that I did.
Mr. Sanders. Did you advise anyone within the administration?
Mr. Kalmbach. I'm sorry. Mi'. Sanders. You're talking as to this
conversation ?
Mr. Sanders. Yes.
iNIr. Kalmbach. I do not recall that I talked to anybody about my
conversation with Mr. Jacobsen prior to the meeting on the 4th.
Mr. Sanders. In your April 4 conversation with Dr. Mehren, did
you advise anyone within the administration of your conversation
with him ?
7&22
Mr. Kalmbach. There, I'm confused a little bit, and this is the
same question, in a way, that Mr. Weitz asked. I do have a recollection,
and it was refreshed by Mr. Weitz, telling me of John Ehrlichman's
statement in an earlier deposition. I do have a recollection that I
talked to John Ehrlichman and told him that I told the milk people
that I'm abrogating whatever pledge they think they have still out-
standing, and I was done with it; and that John Ehrlichman said
to me, Herb, that's good judgment. And that's my clear recollection.
Now, I do not recall, Mr. Sanders, with any real clarity whether
that was after the March 16 meeting, or after the April 4 telephone
call. I just can't get a good fix on it.
Mr. Sanders. Aside from your recollections about the conversation
with Ehrlichman, do you have any recollection of talking with any-
one else after the conversation with Mehren; that is, anyone within
the administration ?
Mr. Kalmbach. No, sir, I do not have any recollection of so doing.
Mr. Sanders. Now, the telephone records as read to you by Mr. Weitz
showing charges to your phone credit card account for calls from
you to Jacobsen and Mehren on the 4th, just to try to develop some
refreshing of your recollection as to why the records show you called
Jacobsen when you have told us that you think he called you, could
it be that he may have called for you and you were not there, and you
were returning his call ?
Mr. Kalmbach. That would be my memory. You know, again, this
is consistent with what I did on the 16th of March in breaking off
with these people. It would be my memory that I called Dr. Mehren
at the request of Mr. Jacobsen, and it would also be my memory thaf
I called, if I made a call to Mr. Jacobsen, it was because he — I had
received a request to make the call to him.
Mr. Sanders. No further questions.
Mr. Weitz. Mr. Kalmbach, thank you.
[Whereupon, at 1 :45 p.m., the hearing in the above-entitled matter
was recessed.]
7623
Kalmbach Exhibit No. 1
March 18, 1971
CONFIDENTIAL - EYES ONLY
MEMORANDUM FOR: FRANK DEMARCO
' TOM EVANS
V HERB KALMBACH
FROMi JOHN DEAN
As per our discussions, I am forwarding a draft chArter .
for the 1701 Pennsylvania Avenue operation and a document
that might serve as a model to be used in connection with
the Milk Producers Association Committee, et al.
X would suggest you nnark up the document if you have
cuggested changes and return It to me. I will then
coordinate with you before a final draft is prepared.
cci Johji N. Mitchell
CONFIDENTIAL - EYES ONLY
7624
Kalmbach Exhibit No. 2
The W»glil«^it lHerry.6».Bo—d the WASHINGTON POST r..,^. m. 2t. ,9n gj^
Secret Memo Bares MitchelhlTT Move
, By Jack- Ander$on
We now h»Te evidence that
the settlement of the Nixon
admjnutratton's biggest anti-
trust case was privately ar-
raoXed between Attorney Gen-
eral John Mitchell and the top
lob^it for the company in-
volved.
Wa have thli on the word
of the lobbyist herself, crusty,
eip^ile Dtta Beard of the In-
ternational Telephone and
Telesraph Co. She ackoowl-
edged the seoet deal after we
obtained a highly Incrlmlnat-
; tog memo, written b; her, from
Mirri flies.
'The memo, which was In-
tended to be destroyed after it
was read, not only indicates
that the anti-trust case bad
been tlzed but that the fix was
• payoff for ITTs pledge of
up to $100,000 for the upcom-
ing Republican convention In
San Diego.
Confronted with the memo,
Mrs. Beard acknowledged Its
authenticity. The next night,
badly shaken and acting
against the wishes of ITT offi-
cials who wanted her to leave
town, she met with my-Hl^
elate Brit Hume at her home
to try to explain the docu-
ment
By this time, she said, ITT
security officers from com-
pany headquarters in New
York had put most of her of-
fice files through a document
shredder to prevent their
being subpoenaed after disclo-
sure of the memo.
She said she met with
Mitchell at the Governor's 31,
mansion in Kentucky during a
dinner reception given by Re-
publlca%.Gov. I/Oule Nuhn last
May after the Kentucky
Derby.
At the governors reception,
she said, Mitchell took her
and Nunn aside and to her as-
tonishment and shock,
launched into an hour-hmg
diatribe against her. He critl
died her for putting pressure
through Congress and the
on the Ju.sUce Department
White House on the anti-trust
cases.
She said MltcheU confided
to her he was sympathetic to
ITT btit bad been prevented
until then from helping the
company because of the teal
of the Justice Department's
antitruat chief, Richard Mc-
Laren.
After Ids harangue, Mrs.
Beard said, Mitchell agreed to
discuss the ai\ti-trust niatters
and asked bluntly, "What do
you want?" meaning what
companies did ITT most want
to keep If the anti-trust cases
were settled.
■^e have to have Hartford
Fire because of the economy,"
Mrs. Beard recalled saying.
She said she also told Mitch
ell ITT wanted to keep "part
of the Grlnnell Corporation,"
a manufacturing concern. She
said Mitchell at first replied,
"You can't have part of Grin
nell," but he subsequently re
lented.
And, she said, when the Jus-
tlc< Department announced its
more than two months nitely helping us, but cahnot
later, it conformed to the , jjt it be known."
agreement she had made with
Mitchcli
Mrs. Beard insisted the sub-
ject of the GOP convention
never came up with Mitchell
and was never a factor in the
anti-trust matter. But thiSj^-ajes. It is unfair to the in-
ITT RepUea
ITT issued the foUomng-
ttatement yesterday.
"There was no deal of any
kind to settle our antitrust
dearly cootradlets her memo-
randum, which was written
about six weeks after the Ken-
tucky Derby dinner.
It is addressed to W. R.
(BiU) Merriam, head of ITTs
dlviduals involved to even sug-
gest such a possibilit>'. .Agree-
ment was reached with the
Justice Department only after
hard negotiations between o'ur
outside legal counsel and the.
Washington office. It is then-Assistant Attorney Gen-
marked "Personal and Confl-ierai Richard McLaren and hisj.
dentlal" and its last line asks,
"Please destroy this, huh?"
The memo warns Merriam
to keep quiet about the ITT
cash pledge for the Republi-
can convention. "John Mitch-
ell has certainly kept It on tbe
higher level only," the memo
says, "we should be able to do
the same . . .
"I am convinced, becatise of
several conversations with
Louie (Gov. Nunn) re Mitchell
that our noble commitment
has gone a long way toward
our negotiations on themerg-lwas made as a nonpartisan
err eei»ing out as Hal (ITT joint effort of the SSn Diegi^
President Harold Geneen) community and was purely in
wants them. Isupport of a loral situation
"Certainly the President has | Sheraton has two hotels in
told Mitchell to see" that San Diego and a third is un-
thlngs are worked out (lig^g^g^aaMaltMatiaB. which would
It is stlU only McLaren's mlck- ] t>e completed in time for the
ey-mouse we are suffering . . . convention There was no tie-
staff.
"Neither Mrs. Beard nor
anyone else except legal
counsel was authorized to car-
ry on such negotiations. Tne
Jime 23, 1971, memorandum
attributed to Mrs. Beard waf
seen for the first time by tlvi
ITT official to whom it was
I addressed when it was
brought in by a member of
Mr. Anderson's staff last
week.
"The San Diego contribu-
tion of the Sheraton Hotei^ n
i^
"If (t ; convention commit-
ment) gets too much publicity,
you can believe our negotia-
tions with Justice will wind up business."
settlement with ITT on July 'shot down. Mitchell is defl-l »ea-i««nnr»syn(ijc.it
In of any kind between this
local joint participation and
any other asgects of ITT'4
MONDAY, MARCH 25, 1974
U.S. Senate,
Select Committee on
Presidential Campaign Activities,
Washington^ D.C.
The Select Committee met, pursuant to notice, at 2 :45 p.m. in room
G-334, Dirksen Senate Office Building.
Present : Senator Inouye.
Also present: Alan S. Weitz, assistant majority counsel; Donald G.
Sanders, deputy minority counsel.
Senator Inoute. Mr. Butterbrodt, raise your right hand.
Do you swear that the testimony you are about to give is the truth,
the whole truth, and nothing but the truth ?
Mr. Butterbrodt. 1 do.
Senator Inouye. State your name and address.
Mr. Butterbrodt. John E. Butterbrodt, 500 North Park Avenue,
Fond du Lac, Wis.
[A brief recess was taken. ]
Mr. Weitz. Mr. Butterbrodt, you've identified your address for the
record. Would your counsel please identify himself ?
Mr. Green. Thomas C. Green, the firm of Ginsburg, Feldman &
Bress, here in Washington.
Mr. Weitz. Mr. Butterbrodt, what is your position with respect to
AMPI?
TESTIMONY OF JOHN E. BUTTERBRODT, ACCOMPANIED BY
THOMAS C. GREEN, COUNSEL
Mr. Butterbrodt. I serve as president of AMPI.
Mr. Weitz. For the record, AMPI being Associated Milk Producers,
Inc.
How long have you held that position ?
Mr. Butterbrodt. Since November 1, 1969.
Mr. Weitz. Was that when AMPI was officially formed?
Mr. Butterbrodt. Technically, we started operating, or AMPI
started operating its fiscal year on October 1, and we held a board
meeting on October 31 at which time the co-op I was associated with
merged into AMPI, and because some of the co-ops' fiscal year started
on October 1, we went back and picked up the month of October as an
operating month, but it was after the fact, and we really started phys-
ically November 1.
Mr. Weitz. Was Harold Nelson one of the principal persons respon-
sible for the organization of AMPI ?
Mr. Butterbrodt. Yes.
(7625)
30-337 O - 74
7626
Mr. Weitz. Was Dave Parr another?
Mr. BuTTERBRODT. Yes.
Mr. Weitz. "WTiat is your role or your responsibilities in connection
with the presidency of AMPI, the presidency of the board ?
Mr. BuTTERBRODT. Well, of course, No. 1, I'm a dairy farmer and live
on the dairy farm and operate a dairy farm and I still manage that
dairy operation. And then serving as president of AMPI, I am re-
sponsible of course for board activities, and board agendas.
And second, I would say it's reporting to producers. I make a lot of
producer meetings and report to producers as to what's going on in
AMPI.
Mr. Weitz. Producer members of AMPI ?
Mr. BuTTERBRODT. Yes.
Mr. Weitz. As a board member and as president, do you sit on any
type of executive committee ?
Mr. BuTTERBRODT. Well, we've got an executive board of, say, the 10
officers. We seldom meet. When we do meet, it's usually in conjunc-
tion with a corporate board meeting to take up any matters that, you
know, we might want to discuss at the time of the board meeting. But
basically, the executive board has little authority.
Mr. Weitz. Who, in practicality, actually under the organization
of AMPI, has the day-to-day management responsibilities?
INIr. BuTTERBRODT. The general manager has full control of the busi-
ness operation and he and he alone has the authority to hire and fire,
et cet^^ra.
Mr. Weitz. Whiat about financial reports? Are those made to the
board periodically ?
Mr. BuTTERBRODT. YcS.
Mr. Weitz. And as a member of the board, you've had occasion to
review those financial reports when they've been made ?
Mr. BuTTERBRODT. YcS.
Mr. Weitz. Now, the Trust for Agricultural Political Education
known as TAPE, was formed in 1969, was it not?
Mr. Green. If you know.
Mr. BuTTERBRODT. I'm not sure of the date. It was formed before
AMPI was.
Mr. Weitz. It was in existence when AMPI was formed ?
Mr. BuTTERBRODT. Yes.
Mr. Weitz. Did you become a member of TAPE ?
Mr. BuTTERBRODT. By contributions you mean ?
Mr. Weitz. Yes.
Mr. BuTTERBRODT. Not in 1969.
Mr. Weitz. Before its closing, however, in 1972 or 1973 ?
Mr. BuTTERBRODT. YcS.
Mr. Weitz. Did you ever hold any official position, such as on a com-
mittee or an executive committee of some sort for TAPE ?
Mr. BuTTERBRODT. No.
Mr. Weitz. Are you a member of the committee for TAPE ?
Mr. BuTTERBRODT. YcS.
Mr. Weitz. That is the successor, so to speak, or similar organization
to TAPE?
Mr. BuTTERBRODT. Right.
7627
Mr. Weitz. Do you hold or have you ever held a position of respon-
sibility in connection with the Committee for TAPE ?
Mr. BuTTERBRODT. Yes — isn't that what you just asked?
Mr. Weitz. I said were you a member
Mr. Green. A contributing member.
Mr. Weitz. A contributing member ?
Mr. Butterbrodt. Yes.
Mr. Weitz. You Avere a contributing member. Are you also a mem-
ber of the governing committee for TAPE ?
Mr. Butterbrodt. Yes.
Mr. Weitz. Isn't the Committee for TAPE a separate organization
from TAPE and there is an executive committee of the Committee for
TAPE, or am I incorrect ?
Mr. Butterbrodt. I think you're incorrect. The Committee for
TAPE came about in 1972 with a change in the law, the Federal law,
and at that time the trust for TAPE was j)hased out or went out of
existence and the Committee for TAPE was structured according to
the Federal law, and that is the only organization in existence today,
as far as political.
Mr. Weitz. So you say Committee for TAPE is an organization
which has members that contribute to a fund from which political
contributions are made, is that right ?
Mr. Butterbrodt. Right.
Mr. Weitz. And do you have an official position in connection with
the Committee for TAPE?
Mr. Butterbrodt. Yes.
Mr. Weitz. What is that position ?
Mr. Butterbrodt. I'm one of the committee members of the TAPE
committee.
Mr. Weitz. Off the record.
[Discussion off the record.]
Mr. Weitz. I think for convenience we'll refer to the organization
Committee for TAPE as CTAPE. And I take it from what you said
that you are a member of the four-man administering body for
CTAPE ; is that correct ?
Mr. Butterbrodt. Right.
Mr. Weitz. "Who are the other three individuals?
Mr. Butterbrodt. Mel Besemer, Preach Griffith, and Dr. Mehren.
Mr. Weitz. And do the four of you taken together, this administer-
ing body, have full responsibility for the collection and disposition of
funds of CTAPE?
Mr. Butterbrodt. Yes.
Mr. Weitz. Now, I'd like to direct your attention to 1969. Do you
have any knowledge of the delivery of $100,000 to Herb Kalmbach by
Milton Semer in that year ?
]Mr. Butterbrodt. I do from the report, the Ed Wright report, and
from a letter that Mr. Heininger wrote to the CRP committee.
Mr. Weitz. Have you seen a copy of that letter ?
Mr. Butterbrodt. Yes.
Mr. Weitz. Before we complete the day's session, I don't have a
copy with me, I'd like to include that in the record and I'll show it to
you for identification.
7628
Do you have any knowledge of the source of the money that was
delivered to — other than those that you just mentioned — the source of
money that was delivered to Mr. Kalmbach, other than the Wright
report ?
Mr. BUTTERBRODT. No.
Mr. Weitz. Now Stuart Russell was an attorney that was employed
by AMPI ; is that right?
Mr. BuTTERBRODT, Correct.
Mr. Weitz. When I say "was employed," he no longer performs any
services for AMPI ?
Mr. BuTTERBRODT. That's right.
Mr. Weitz. Before 1972, did you have any knowledge of any pay-
ments made to Mr. Russell or any billings by Mr. Russell that were not
for services performed — for legal services performed by Mr. Russell
for AMPI?
Mr. BuTTERBRODT. Yes.
Mr. Weitz. And what knowledge did you have?
Mr. Butterbrodi'. I was informed that additional payments were
being made to Mr. Russell to pay other attorneys and other personnel
that they did not want to — whose names they did not want to appear on
our statement or records.
Mr. Weitz. Do you know approximately when you came into this
knowledge ?
Mr. BuTTERBRODT. It would have perhaps been lat« 1971.
Mr. Weitz. Who told you ?
Mr. BuTTERBRODT. Harold Nelson and Bob Isham reported it to the
board after questions were asked if that was the reason for his
high billings.
Mr. Weitz. Was this the explanation given by both of them or only
by Mr. Nelson?
Mr. BuTTERBRODT. I think both of them in about — you know, that
many words. They both explained it that way.
Mr. Weitz. Was the whole board present — was it a board meeting ?
Mr. BuTTERBRODT. I'm not sure whether it was at a board meeting or
a finance committee where it was discussed, but I believe the whole
board was in session at the time that the answer was given.
Mr. Weitz. Hasn't Bob Isham told you something along those lines,
but perhaps a slightly different version several months before?
Mr. BuTTERBRODT. No ; in fact I met with Bob Isham on at least two
occasions separate and apart from, say, a board session where I asked
Bob Isham in detail whether there was anything going on that was
unethical or illegal or anything that the board should be knowledge-
able of and on both occasions Bob Isham said, "No," that everything
was above board. Bob Isham was a very honorable individual and
highly respected in my book until he left this last summer, and I be-
lieved Bob Isham when he told me there was nothing wrong going on
in the financial field.
Mr. Weitz. What led you to ask him the question in the first place ?
Mr. BuTTERBRODT. Oh, I think, one, out of responsibility. I perhaps
at different times asked different employees what they know about,
be it insurance or finances, and Bob Isham didn't show up at one of
our board meetings and I was concerned that maybe something was
bothering him, so I got in touch with him and asked him if something
was bothering him that he didn't show up at a board meeting.
7629
Mr. Weitz. Now, at this board meeting in late 1971, when Mr. Isham
and Mr. Nelson gave the explanation that you've mentioned, did they
explain or did you ask what attorneys and other costs were covered
by these payments to Mr. Russell and similar attorneys ?
Mr. BuTTERBRODT. If the question was asked, the general type answer
we would get was that it would be better if we didn't know, for the
good of Associated Milk Producers, Inc., if it wasn't known, so the
question was never answered.
Mr. Weitz. Did you have any understanding either at that meeting
or otherwise as to what was intended by that answer or what, in fact,
was the case?
Mr. BUTTEKBRODT. No.
Mr. Weitz. Now, in 1972, did you have occasion to meet with Dr.
Mehren and Mr. Russell to discuss these matters further ?
Mr. Butterbrodt. Yes.
Mr. Weitz. What was the occasion of that meeting ?
Mr. Butterbrodt. Shortly
Mr. Green. Can we identify — you use the whole year there.
Mr. Weitz. My next question was going to be when.
Mr. Green. All right.
Mr. Weitz. Let me ask you first, do you recall when such a meeting
or meetings took place ?
Mr. Butterbrodt. It would have been shortly after we changed
management, within 2 or 3 weeks after we changed management.
Mr. Weitz. The record shows that that change took place on Janu-
ary 12, 1972. Would it then have been by the end of January 1972?
Mr. Butterbrodt. The end of January or the first of February.
Mr. Weitz. What was the occasion for the meeting ?
Mr, Butterbrodt. We went through a process of calling in, basically,
virtually all the employees that were connected with the home office
because we were trymg to trim costs. We were cutting out personnel
and were trying to cut back personnel, that we did not need, and we had
Stu Russell in to discuss with him, No. 1, the need for retaining him
and, No. 2, reducing his costs and so forth— was the reason for the
meeting.
Mr. Weitz. Did you also take that opportunity to ask him what
attorneys or other persons were receiving payments from him to which
Mr. Nelson had alluded ?
Mr. Butterbrodt. We asked him — of course, the question put was
more along the lines of why the high legal fees, and he indicated to
us then that he was passing fees or paying out money to other
attorneys and personnel and he indicated that this was how Harold
Nelson had instructed him to operate. And that's why he did it.
Again, at that point, Ave said there'd be no more of that, that if
somebody was going to work for us the name would appear on the
statement and we would not fund anybody through that method.
Mr. Weitz. And you did not know at that time that some portion
of that money or other moneys had gone for political contributions?
Mr. Butterbrodt. No; he indicated to us even at that point he — he
did not indicate that it was for political activity.
Mr. Weitz. And you knew nothing to the contrary, is that correct?
Mr. Butterbrodt. That's right. "Wlien we asked him — and we did
ask him about where the funds were going and why — -his answer was
basically that before — he would not tell us, and Dr. Mehren asked
7630
him the question about what he would do if he got in a courtroom
where he had to raise his hand and explain where it went. And Stu's
words were something to the effect that he would take the fifth amend-
ment there and he would not tell us where it went.
Mr. Weitz. Did he explain his reluctance or his refusal to tell you ?
Mr. BuTTERBRODT. No ; he indicated he had his books coded, that he
felt he was doing nothing illegal, and that if he had, say, to prove to
somebody where the dollars went, that it did not — you knoAv, he did
not get it or benefit from it. But he wouldn't tell us.
Mr. Weitz. Do you know how much money was involved in these
transactions ?
Mr. BuTi'ERBRODT. Only from the Ed Wright report.
Mr. Weitz. Did Mr. Eussell indicate how much money was
involved ?
Mr. BuTTERBRODT. No.
Mr. Weitz. Did Mr. Russell also indicate that there was still some
money due him as a result of previous transactions to cover his excess
taxes ?
Mr. BuTTERBRODT. Yes ; he indicated that he had a commitment from
Harold Nelson that any costs or liabilities to him in regard to paying
other employees — and I've since learned, too, that one of the employees
was a former NFO employee that was on his payroll, and I guess this
is what I gathered even when I first heard about it, that I gathered
that that's what it was used for.
Mr. Weitz. Was that employee Wynn Hollowell ?
Mr. BuTTERBRODT. No ; I don't believe so. I can't say his name. He
came from Wisconsin.
Mr. Weitz. That's all right.
Didn't you know or have a serious suspicion, that much of the
money that went to Russell, went for political purposes when Mr. Nel-
son was replaced in January of 1972 ?
Mr. BuTTERBRODT. No. And if I could, you know, elaborate on that,
we did have the political fund where dairy farmers were voluntarily
putting money into the political fund and I never suspected, and
I still don't understand why, if they wanted dollars for pplitical
activities they didn't use that fund, because the funds were there to be
used and there were dollars there to be used for political activity. I
think I felt at the time that there was no reason to use any other funds.
Mr. Weitz. You indicated that Mr. Russell did ask for additional —
did indicate that more money was due him to cover his back taxes.
Did he indicate how much ?
Mr. BuTTERBRODT. No ; not as I recall.
Mr. Weitz. Was he told to go and find out how much or did he
suggest he would do so ?
Mr. BuTTERBRODT. I dou't think we talked about it at that time.
This was, like I indicate, late January or early February, and he just
indicated that there was a commitment made and we didn't, I don't
believe, get into it any further at that meeting.
Mr. Weitz. Who made tlie commitment, or who did he indicate made
the commitment to him ?
Mr. BuTTERBRODT. Harold Nelson.
Mr. Weitz. Was there anything else about that meeting that you
can recall?
7631
Mr. BUTTERBRODT. No.
Mr. Weitz. Did you meet with him again ?
Mr. BuTTERBRODT. With Stu Russell ?
Mr. Weitz. Yes, sir.
Mr. Butterbrodt. I don't believe so.
Mr. Weitz. In connection with this matter.
Mr. Butterbrodt. No.
Mr. Weitz. Did you discuss the matter any further outside of Mr.
Russell's presence with Dr. Mehren ?
Mr. Butterbrodt. At that time ?
Mr. Weitz. At that t ime or any time thereafter.
Mr. Butterbrodt. Well, thereafter we certainly talked about it.
Mr. Weitz. Wliat about in the next— let's limit it — ^through April of
1972, February, March, and April of 1972 ?
Mr. Butterbrodt. At the time tiiat Stu Russell came in and actually
received a settlement, Dr. Meliren reported that he, Stu Russell, had
been in and they worked out a settlement, and that Stu was paid.
Mr. Weitz. You were not present at that settlement?
Mr. Butterbrodt. No.
Mr. Weitz. Did he tell you how much was paid to Mr. Russell ?
Mr. Butterbrodt. I believe he did. yes. I don't recall, but I'm sire
he did ; because we communicated on a daily basis.
Mr. Weitz. How much was that ?
Mr. Butterbrodt. I know now it was $66,000. I am not sure at t-.iat
time whether he said $60,000 or $66,000, but he indicated a settlement
was made,
Mr. Weitz. Wasn't there, in addition, a note that was forgiven Mr.
Russell?
Mr. Butterbrodt. From the Ed Wright report, yes.
Mr. Weitz. You didn't know about it at the time?
Mr. Butterbrodt. No.
Mr. Weitz. Did you know that any note had been made out by Mr.
Russell?
Mr. Butterbrodt. No.
Mr. Weitz. Did vou know of the $50,000 payment made to Mr.
Russell in April 1971 ?
Mr. Butterbrodt. Yes.
Mr. Weitz. When did you come to know about that ?
Mr. Butterbrodt. When the issue came up at the board meeting.
It was in the fall of 1971 when the $50,000 note appeared on our finan-
cial records, that there was a note, and a question was asked why j,r^
we borrowing money to an attorney, and the answer given was that
Stu Russell
]Mr, Weitz. From an attorney? I believe it was a note from otu
Russell.
INIr. Butterbrodt. No. It was the the other way around.
Mr. Weitz. Are you talking about a payment ?
Mr. Butterbrodt. Well, it was Stu Russell's note. He borrowed
$50,000 from AMPI.
Mr. Weitz. I see.
Mr. Butterbrodt. And it showed up actually that he owed us
$50,000; and the question was why Ave re we borrowing from an at-
torney $50,000, and the answer was that Stu Russell had financial
7632
problems at the time of tax, and so he borrowed $50,000 and gave a
note for it to pay his taxes, and that he would pay it back.
Mr. Weitz. Nobody indicated that had anything to do — or his taxes
that he could not cover had anything to do with his transactions for
AMPI?
Mr. BUTTERBRODT. No.
Mr. Weitz. "^^Hien Dr. Mehren informed you of the settlement with
Mr. Eussell in April 1972, did he mention or did you mention any-
thing about the note ?
Mr. BuTTERBRODT. No ; I don't believe so.
Mr. Weftz. Whatever happened to the note, do you know ?
Mr. BuTTERBRODT. Well, from the Ed Wright report I know it was
washed out.
Mr. Weitz. Was that part of the settlement as you understand it?
Mr. BuTTERBRODT. Yes.
Mr. Green. That settlement — his understanding is based on the
Wright report. That's what he's testified to earlier.
Mr. Weitz. All right. Now, you say when Mr. Russell met with you
and Dr. Mehren in late January or early February, he refused, or at
least declined, to elaborate on the purposes for which the moneys he
delivered to certain unknown — unnamed employees or attorneys was
used.
Was any further light shed on that matter at the time of the
settlement, or at least did Dr. Mehren inform you of any further
information he received at that time ?
Mr. Butierbrodt. No.
Mr. Weitz. Can you explain why the payment of approximately
$66,000 was made without a further explanation of the transactions for
which the liability arose ?
Mr. Green. Do you mean explanation to him ?
Mr. Weitz. Either explanation to him or to him throusfh Dr. Mehren.
Mr. BuTTERBRODT. Well, the answer being that Dr. Mehren informed
me that the figures, you know, were put together by Bob Isham as
what we owed ; and that he had run it by Heininjrer — using his lan-
guage, he ran it by Heininger and Heininger OK'd it. So to me, if
Heininger OK'd it and Bob Isham OK'd it and Dr. Mehren was satis-
fied with it, I didn't question it.
In the first place, that is not part of my obligations to start with.
Mr. Sanders. I believe you've answered to Alan's questions that
when you and Nelson — you and Mehren talked with Russell in Febru-
ary of 1972, he declined to furnish to you the names of persons to whom
pavments were being made by him.
Was there any discussion between you and Mehren as to withholding
fitrther payment from Russell until he made a disclosure of the
identities?
Mr. BuTTERBRODT. I dou't think we discussed, reallv, the withhold-
ing of the payments. We discussed at great length about cutting him
ofP altoflfether as a firm that was employed by us.
Mr. Sanders. Are you saving that to the best of your recollection it
did not occur to you, nor did it appear to have occurred to Mehren to
"inRi«5t upon that disclosure as the price for meeting his additional
billing?
7633
Mr. BuTTERBRODT. No ; I would say that after talking with Mr.
Grossman, the lawj'^er in Chicago, that our advice was, that we were
not the FBI. It was not our obligation to investigate to find out
whether there was wrongdoing or wasn't. We honored commitments,
not only Stu's, but other commitments that were made at that time.
And we cut it off, so to speak ; anything like that we cut off at that
time. And it was not our obligation to investigate the past and see
what was done wrong.
Mr. Sanders. Well, without respect to your obligation to investigate
criminal wrongdoing, didn't you feel you had an obligation to your
40,000 members to insure that any substantial funds paid to Russell
were for legitimate purposes ?
Mr. Butterbrodt. Well, no different than we did for Joe Johnson
or anybody else in that position.
Mr. Sanders. But here you had a situation where he wouldn't even
tell you who the money was paid to. How could you feel that your
40,000 members were being protected if you don't even know the
identity of the recipient of the funds ?
Mr. BurrEKBRODT. Well, the dollars went to Stu Russell and
Mr. Green. I think the record should also indicate, if you want to
question the witness about it, that Mr. Russell was their attorney with
respect to certain legal matters that were pending at the time, and
was, in fact, terminated within a relatively short period of time.
Mr. Sanders. Yes, certainly the record should show that. Neverthe-
less, the facts are that a substantial svun of money was paid to him at
the time of, or soon after his termination. I think the record would
sliow that.
Mr. Weitz. In that connection, when was Mi'. Russell — when did his
employment by AMPI terminate ?
Mr. Butterbrodt. I couldn't tell you exactly.
Mr. Weitz. Was it within several months after that payment?
Mr. Butterbrodt. It seems to me that it would have been the early
part of 1973.
Mr. Weitz. Was it in October of 1973 ?
Mr. Butterbrodt. Let's say 1973. I'm not sure what month.
Mr. Weitz. I'd like to turn to 1970". Do you have any knowledge of
any meetings or contacts between representatives of AJMPI in 1970
with Charles Colson ?
Mr. Butterbrodt. No, sir.
Mr. Weitz. I'll address the same question with respect to Herb
Kalmbach.
Mr. Bittterbrodt. No, sir.
Mr. Weitz. Do you have any knowledge of any representations or
pledges or commitments of campaign contributions by representatives
of AMPI made to Republican fundraisers in 1970 ?
Mr. Butterbrodt. iN o, sir.
Mr. Weitz. Do you have any knowledge of efforts by AMPi to
secure the attendance of the President at the first annual convention of
AMPI in 1970?
Mr, Butterbrodt. Yes, sir.
Mr. Weitz. What efforts were made in that direction?
Mr. Butterbrodt. Well, how much effort of what was, you know,
made to get him there, I am not aware of. But I know leading up to
7634
that annual meeting in 1970, that Harold Nelson and Dave Parr con-
tinually told the board that they thought the President was going to
speak at our annual meeting in 1970 ; and for that reason, that was one
of the reasons that we needed something like 10,000 people in our
annual meeting in Chicago. And by the same token, there were a lot
of people that, you know, indicated he would not come to the annual
meeting.
At the time of the annual meeting, when I got to Chicago and got
out to the Chicago Stadium, and saw the stadium and how they had it
set for the annual meeting, I realized that President Nixon would not
speak at that meeting. There wasn't enough security, that kind of
thing, the way they had it set up for the meeting; that he was not
going to come. And yet, Harold and Dave insisted up to the day before
the meeting that he was going to speak, and that's why the very day of
the annual meeting, they had to substitute Senator Muskie and get
Senator Muskie on a last minute sort of program, to get in and speak
to the annual meeting that night.
Mr. Weitz. I take it at that meeting — we understand that President
Nixon called the convention and spoke with Mr. Nelson. Do you have
any knowledge of that ?
Mr. BuTTERBRODT. I don't know whether Nelson called — you know,
who called who. Harold Nelson indicated he talked to President Nixon
and that President Nixon indicated there was some program — I'm not
sure whether it was imports or what it was — that they were — some
proclamation
Mr. Weitz. The school lunch ?
Mr. BuTTERBRODT. Scliool luuch, that's what it was. Indicated they
were going to fund the school lunch program again.
Mr. Weitz. Did Secretary Hardin speak at the convention?
Mr. BuiTERBRODT. Yes.
Mr. Weitz. Did he make the announcement with respect to the
school lunch program ?
Mr. BuTTERBRODT. I belicve so.
Mr. Weitz. Do you have any knowledge of any meetings between
Mr. Nelson and Mr. Parr or Mr. Parr with the President in 1970 other
than this telephone conversation ?
Mr. BuTTERBRODT. Yes; as I recall, and as they reported to me, within
perhaps — and I don't know the time, but I'd say within 2 weeks of the
1970 annual meeting, Harold and Dave met with President Nixon at
the TYhite House, is the story that I have.
Mr. Weitz. Did they tell you ?
Mr. BuTTERBRODT. I belicve both Harold and Dave told me, but I
may not have the story, you know, just exact. But they met with Presi-
dent Nixon. He indicated, one, he was sorry he did not come out to our
annual meeting. When people told him there would be 10,000 people
there, he didn't believe there would be that large a crowd. He indicated
he was sorry he had been misinformed or misread the meeting, that he
wished he had come to the meeting.
And No. 2, he told them that he'd like to meet with some of the dairy
farmer leaders of AMPI. and could they arrange a meeting with some
of us to meet with the President.
7635
And three, he indicated that he would be the speaker for our annual
meeting in 1971. And as the story goes, Dave told him if he would be
the speaker, wc would have 40,000 at the annual meeting.
Following that, of course, at least two or maybe three different oc-
casions— that would have been September of 1970 until March of
1971 — Harold or Dave notified me and said "We've got a tentative
date to meet the President at the White House." We were going to talk
to him in November of 1970 and again in December and perhaps Jan-
uary 1971. There were indications to me that they were setting up a
meeting and holding certain dates to go to the ^Vliite House because the
President wanted to talk to us. And as we got closer to those meeting
dates, they were then canceled, something came up ; <and again, I don't
know if it was management, or say from, the President's side that they
were canceled. But I was told that they were canceled. And con-
sequently, the meeting on March 23d was set when we went to the
White House. And as far as I'm concerned, it was continuation of that
conversation that we had in the fall of 1970.
Mr. Weitz. How much in advance of the March 23d meeting did
vou receive firm information as to time and place — not place — ^time and
date?
Mr. BuTTERBRODT. I really don't know. I would say 2 weeks perhaps.
I really don't know though. It could be 3 ; it could be 1 ; but I'm just
guessing it would have been a couple of weeks, maybe a little longer.
Mr. Weitz. Now, 1971, did you take part in the effort to secure a
price support increase ?
Mr, BuTTERBRODT. YcS.
Mr. Weitz. "What was your role ?
Mr. BuTTERBRODT. I Came to Washington perhaps on one, maybe two,
occasions just with that, you know, respect in mind, where we met
and then talked to Congressmen and Senators, the Congressmen and
Senators perhaps from Wisconsin that I knew, and encouraged them
or asked them to support the bill to increase price support.. Perhaps I
spent time on the phone talking to co-ops in other parts of the country.
And I'm thinking of, oh, Mountain Empire out in Denver — ^I knew the
people, and I talked to their Congressman. But it was maybe 1 to 3
days at the most that I worked on it.
Mr. Weitz. January through March of 1971?
Mr. BuTTERBRODT. Ycs. I dou't know if they were working at it dur-
ing January, because we really, as I recall, didn't put any, you know,
real effort — other than the original call, we didn't put really any real
effort into it until after Secretary Hardin announced lower supports,
when we came out and tried to get the bill introduced. That's as I re-
member it.
Mr. Weitz. I take it you had no contacts directly with anyone in the
administration and the Wiite House other than the meeting with the
President on the 23d ?
Mr. BuTTERBRODT. Just SO the record is clear, you know, I can get
trapped on that one, because as I recall from this morning, in perhaps
early March or the end of February, President Nixon had — and per-
haps it was February — President Nixon had a program on world de-
velopment that really had nothing to do with dairying or the milk
industry. But he invited farm leaders to the White House to discuss his
7636
rural development program. That isn't really the right technical name
of what the program was, but that was the intent — to help develop the
rural areas, communities, and cities and so forth.
And I got a telegram or a notice of the meeting at the White House ;
and I remember this because I called Harold Nelson and I indicated to
Harold that I had gotten a notice to go to the White House. I didn't
think it really related to dairying, and should I go. And his instruc-
tions to me — and right or wrong, I still operate with those instruc-
tions or follow that kind of philosophy — that when the Wliite House
calls and invites you to the White House, you go, and you don't call
up and give excuses and so forth.
And so I did come to Washington, and I was at the White House with
that conference. I did meet that time in the Oval Office. It had nothing
to do with dairying, but I was there.
Mr. Weitz. Let me rephrase the question then with respect to the
dairy price support program. Did you have any contacts during
January, February, or March of 1971 with members of the adminis-
tration other than the meeting with the President on the 23d ?
Mr. Btjtterbrodt. No.
Mr. Weitz. Do you have any knowledge of any contacts during that
same neri'^d, W rpr»resentatives of AMPI and the other dairy coopera-
tives, with either Mr. Colson or Secretary Connally ?
Mr. BuTTERBRODT. No. Maybe I should ask, is Colson an attorney ?
Mr. Weitz. I think at that time he was counsel, a special counsel to
the President.
Mr. BuTTERBRODT. The answer would be no.
Mr. Weitz. Do you know of any contacts with anybody in the admin-
istration other than the March 23 meeting?
Mr. BuTTERBRODT. No, other than I'm sure there were contacts in
setting up that March 23 meeting.
Mr. Weitz. With respect to substantive discussions concerning the
dairy price support program ?
Mr. BuTTERBRODT. No, Other than they certainly probably contacted
thp ftef^ctarv of A<Tfrir>nl^"re.
Mr. Weitz. Secretary Hardin ?
Mr. BuTTERBRODT. YcS.
Mr. Weitz. How about Under Secretary Campbell ?
Mr. BuTTERBRODT. I wouldu't be aware of that.
Mr. Weitz. What about with respect to political contributions or
possible political support for the Presidential campaijni. President
Nixon's reelection campaign, were there any discussions that you were
aware of — not with the administration necessarily, but among the
cooperatives or representatives of the dairy farmers in Washington
at that time, January, February, or March of 1971 ? Was there any
discussion of contributions that might be made or would be made to
the reelection campaign ?
Mr. BuTTERBRODT. No.
Mr. Weitz. Was there any internal discussion in AMPI or TAPE
as to who you would support for the reelection campaign ?
Mr. BuTTERBRODT. No.
Mr. Weitz. How soon before the March 23 meeting did you arrive
in Washington ?
7637
Mr. BuTTERBRODT. I bclieve I came in the night before; and there
again I could be wrong, but I believe I came in the night before.
Mr. Weitz. The 22 ?
Mr. BuTTERBRODT. Yes,
Mr. Weitz. Were you aware of the $10,000 contribution or four
contributions totaling $10,000 to four Republican committees made
by TAPE on March 22, 1971 ?
Mr. BuTTERBRODT. No, sir. I WIS aware, of course, that they were
going to — that they had bought tickets for the Republican national
fund-raising dinner, which was rather a yearly thing and always had
been something that we bought tickets for. And I knew they had
bought, say, $10,000 worth of tickets for that, or were goin^ to.
Mr. Weitz. Do you know how much the other cooperatives' trusts
were going to contribute, if anything?
Mr. BuTTERBRODT. No, I dou't know.
Mr. Weitz. For either the dinner or the reelection campaign ?
Mr. BuTTERBRODT. No.
Mr. Weitz. Did you see or meet with Marion Harrison while you
were in Washington ?
Mr. BuTTERBRODT. I believe we met in his office the morning before
we went over to the White House.
Mr. Weitz. Any other occasion that you can recall ?
Mr. BuTTERBRODT. No.
Mr. Weitz. Did you meet or talk with Murray Chotiner during that
same period ?
Mr. BuTTERBRODT. I bclieve so, if he was a part of that law firm. We
met across the street, and the names are not familiar with me.
Mr. Weitz. So you don't actually recall ?
Mr. BuTTERBRODT. I think he Avas there. The name, you know, rings
a bell, but
Mr. Weitz. How about Pat Hillings, do you know him 2
Mr. BuTTERBRODT. No.
Mr. Weitz. Do you know if he attended the meeting with the Presi-
dent on the 23d ?
Mr. BuTTERBRODT. I doii't think so, but I don't know.
Mr. Weitz. Did Mr. Colson attend the meeting ?
Mr. BuTTERBRODT. I doii't kuow.
Mr. Weitz. With the President?
Mr. BuTTERBRODT. I dou't kuow.
Mr. Weitz. You don't know Mr. Colson ?
Mr. BuTTERBRODT. I dou't kiiow Mr. Colson.
Mr. Wettz. How about Jake Jacobsen— do you know him ?
Mr. BuTTERBRODT. Yes.
Mr. Weitz. Was he present, or did you hear any discussion relating
to him while you were in Washington ?
Mr. BuTTERBRODT. No. I do not think he was here. Really — let's see,
that would have been 1971 ?
Mr. Weitz. March of 1971.
Mr. BuTTERBRODT. I wouldii't havc known Jake at that time, but
knowing Jake, you know, from when I did meet him, I'm sure if he
was there — he's an individual of rather outstanding appearance and I
would have remembered him. So I don't think I had even met Jake
Jacobsen or knew him at that time.
7638
Mr. Weitz. Without regard to whether or not you met him at that
time, do you recall any discussion of any contacts between representa-
tives of any dairy co-ops and Secretary Connally, John Connally?
Mr. BUTTERBRODT. No.
Mr. Weitz. What did you do after the meeting with the President?
Mr. BuTTERBRODT. As I recall, I left — as most of us did when we
left the White House, we got out to the street and kind of dispersed
in various directions. I grabbed a cab and went back and picked up
my suitcase and went back to Wisconsin.
Mr. Weitz. Was there any reason why you did not come in earlier
than the night before the meeting with the President, or any reason
that you left immediately after the meeting — if the reason for your
being in Washington for a few days in that period, March of 1971,
was to push some milk price-support legislation, why didn't you take
that opportunity to visit some Congressmen ?
Mr. Butterbrodt. Well, I had called on, say, my Congressman, and
usually, as the case this year, the Wisconsin Congressman, my Con-
gressman and Senators from Wisconsin were on record and would be
on record supporting the dairy industry because they come from a
dairy State. I'm not a part of, you know, management in the sense that
it would be my job, so to speak, to line up others. And as the president
or board member, that wouldn't be my responsibility in the first place;
and I'd probably not be very effective at it if it were.
So my position — the reason I was at the Wliite House was because
of my title and not my capabilities in the political field.
Mr. Weitz. When did you first learn that the price-support de-
cision was going to be, or would probably be, increased ? Did you learn
of that before it was publicly announced ?
Mr. Butterbrodt. No, unless it was just an hour or two. It was
about, I'd say, a week to 10 days later. I was at a meeting in Chicago
when someone informed me that, you know, support prices were going
to be increased ; and it was announced to the delegates — I believe we
had kind of an annual meeting of that area — and it was announced to
the delegates there. But it was made public that day.
Mr. Weitz. If the record indicates that the decision was made pub-
lic on March 25, 2 days after the meeting with the President, would
that be the day you're talking about ?
Mr. Butterbrodt. What was the 23d then ? A Tuesday ?
Mr. Weitz. Tuesday.
Mr. Butterbrodt. It would have been Thursday.
Mr. Weitz. Thursday, the 25th ?
[Mr. Butterbrodt nods in the affirmative.]
Mr. Weitz. Was that the day of the meeting of the Central America
Cooperative Federation ?
Mr. Butterbrodt. No. I believe that was — 1971 ?
Mr. Weitz. 1971.
Mr. Butterbrodt. I believe we had an annual meeting of that partic-
ular region in March out at — I don't know — Arlington Park, Pheasant
Run, one of those type places. We had a delegate body at the meeting,
so it would have been that Thursday at that particular meeting. I be-
lieve I was serving at that time as president of that particular region
and was conducting the meeting there, and it was reported at that
meeting.
7639
Mr. Weitz. Do you want to ask questions about 1971 before I go on
to 1972?
Mr. Sanders. This is off the record.
[Discussion off the record.]
Mr. Weitz. Back on the record.
Actually, let me ask one more question. Did you ever learn of any
information from either Mr. Nelson, Mr. Parr, or anyone else con-
nected with AMPI, as to the reason for the increase announced on
March 25 ?
Mr. BuTTERBRODT. Did I learn of the reason ?
Mr. Weitz. Did they shed any light on the decision ?
Mr. Green". Why the President changed his
Mr. Weitz. Increased the supports.
Mr. Butterbrodt. Not really. I'd have to say not from them. But
when I left the meeting with the President, I was pretty well con-
vinced he was going to change his mind, and that the price supports
would be increased.
Mr. Weitz. So it didn't come to you as much of a surprise when you
heard fehe announcement ?
Mr. Butterbrodt. No.
Mr. Weitz. Did they ever indicate to you — Mr. Nelson, Mr. Parr,
or any others connected with AMPI — ^that they had made any com
mitments or representations with respect to contributions during that
period of March 1971 ?
Mr. Butterbrodt. No.
Mr. Weitz. Whether or not connected to the milk price-support
decision ?
Mr. Butterbrodt. No.
Mr. Weitz. Apart from March 1971, did you learn of any commit-
ments or representations made in 1971, as to contributions to be made
by TAPE for the President's reelection ?
Mr. Butterbrodt. No.
Mr. Weitz. When Dr. Mehren became general manager in January
1972, did he ask you whether any commitments were outstanding with
respect to political contributions to the President?
Mr. Butterbrodt. I don't believe he asked me, no.
Mr. Weitz. Did you know whether any commitments were then
outstanding ?
Mr. Butterbrodt. To my knowledge there were no commitments
outstanding.
Mr. Weitz. Either outstanding or had been made and satisfied ?
Mr. Butterbrodt. That's right.
Mr. Weitz. Do you know why close to $250,000 had been con-
tributed by the three dairy trusts in 1971 to the President's reelection
campaign ?
Mr. Butterbrodt. Other than that the President did reverse him-
self or did increase the price support, he did fund the school milk
program the year before ; we had some favorable decisions from the
administration. That's what the fund is for, to help those people that
are friendly to the industry. And I saw nothing wrong with contribu-
tions going to President Nixon's committee.
Mr. Weitz. Even before his announced — the Democratic nominee
had been named ?
7640
Mr. BuTTERBRODT. No. To me, you know, that's what the fund was
for. And again, it was a political fund to be used for political
activities.
Mr. Weitz. What political activities were underway in 1971, do
you know, for the President ?
Mr. BuTTERBRODT. I couldu't tell you, other than to get him elected
again, I suppose. I did not, you know, work with the committee or
have any input into where the funds went or how, so I just assumed
that those people with that responsibility knew where the proper funds
should go and how they should be spent.
Mr. Weitz. Turning your attention to primarily 1972, when were
you first apprised of an investigation by the Justice Department of
AMPI?
Mr. BuTTERBRODT. I belicve it was the end of January when we got
word — you're talking about the antitrust suit being filed 2
Mr. Weitz. But it was preceded by an investigation, and I am won-
dering whether you had any knowledge of the investigation that was
conducted by the Antitrust Division of the Justice Department ?
Mr. Btjtterbrodt. No, I wasn't aware of any investigation.
Mr. Weitz. Were you told by anyone else that such an investigation
had taken place or was underway ?
Mr. BuTTERBRODT. I don't believe so.
Mr. Weitz. When was your first knowledge of either the impending
suit or the suit itself ?
Mr. BuTTERBRODT. I believc it was the end of January when there was
an indication that Justice was — and I don't understand, you know, the
terms and et cetera. But that Justice was charging us, and it seems to
me — I don't know whether the consent decree comes first, or just what.
But that they were, in fact — had charged us and gave us a consent
decree. We had something like 24 hours, or whatever, to sign it, "or
else." And Dr. Mehren indicated, after reading it, that he couldn't
sign it ; it would virtually put us out of business. And so, I guess we
got the "or else."
Mr. Weitz. That is, the suit was filed ?
Mr. BuTTERBRODT. Yes.
Mr. Weitz. Did you have any knowledge of a request by the Justice
Department to the Attorney General for approval for the impaneling
of a grand jury to investigate criminal violations by AMPI ?
Mr. BuTTERBRODT. I do now ; I did not know then.
Mr. Weitz. Wliat is the source of your knowledge ?
Mr. BuTTERBRODT. Depositions.
Mr. Weitz, In the antitrust suit ?
Mr. Green. We call it a civil suit.
Mr. BuTTERBRODT. There are so many depositions out, I don't know.
Mr. Weitz. In some litigation. Did you first learn about the possible
filing of the antitrust suit from Dr. Mehren ?
Mr. BuTTERBRODT. Yes.
Mr. Weitz. At that time, or afterwards, was there any discussion of
political contributions to the President's reelection effort ?
Mr. BuTTERBRODT. No.
Mr. Weitz. None that you were privy to ?
Mr. BuTTERBRODT. No.
7641
Mr. Weitz. Did you have any knowledge of any meetings in early
February 1972, between Dr. Mehren and Herb Kalmbach ?
Mr. BuTTERBRODT. Yes.
Mr. Weitz. Could you tell us how you came to that knowledge ?
Mr. BuTTERBRODT. I believe Dr. Mehren and I were together — well,
again, I think it was that same meeting where we first heard about
the suit, which would have been about the 27th or 28th — maybe I
shouldn't be that specific on dates, because I'm not, you know, that
good with dates. It would have been the end of January when we were
together in Chicago. And Dr. Mehren indicated that he had a meeting
with Kalmbach, or that he had gotten word that Kalmbach wanted
to talk to him. And he asked me if I thought it would be advisable that
I go along with him to meet with Kalmbach. And as I recall, my answer
would have been or was something to the effect, "There's no point in
me going up there to meet with Kalmbach. You know what he wants ;
he's going to want some dollars, and we're not going to contribute
any dollars."
Because, basically, we were on record at that time of not spending
any money out of the TAPE Committee — it was TAPE at that time.
Because one of the second or third question that was asked by the board
of Dr. Mehren, at the time we were hiring Dr. Mehren, was what his
position would be in regard to TAPE and expenditures of TAPE. And
he committed to the board that we would restructure TAPE and that
(1) we Avouldn't make any contributions for something like 30 days
or until we had it restructured. And then we'd have a committee set
up that would actually approve the payments before they were made,
under the new management.
And therefore, say, at the end of January, we were under a commit-
ment of Dr. Mehren that we wouldn't spend any money out of TAPE.
And I perhaps indicated to the doctor that it didn't pay me to go along
and see Kalmbach. But knowing who Kalmbach was, he should go and
talk to him and meet with him, and not turn him down, as far as
having a session.
Mr. Weitz. In other words, listen to him. But certainly your un-
derstanding was that he wasn't going to commit any funds to him at
that point ?
Mr. BuTTERBRODT. That's right.
Mr. Weitz. He wasn't going to turn him down, though, at the meet-
ing, I take it ?
Mr. BuTTERBRODT. That's right.
Mr. Weitz. Not just for the meeting, but at the meeting. He was
not necessarily going to refuse to give
Mr. BuTTERBRODT. He wouldn't refuse, but he wouldn't offer or agree
to, either.
Mr. Weitz. Wlien had you first heard about Herb Kalmbach, first
learned who he was ?
Mr. BuTTERBRODT. Being a member of the Republican Party, and
knowing, you know. President Nixon and having been to the White
House, I am sure I knew who Kalmbach was in 1971, sometime in 1971.
Mr. Weitz. Was it in relation to any of the dairy trust contributions
that you knew who he was ?
Mr. BuTTERBRODT. No ; strictly through political party lines.
7642
Mr. Weitz. The fact that the antitrust suit was pendin.^ or was about
to be filed, did that have any bearing; on your instructions or recom-
mendations or discussion with Dr. Mehren about how he should han-
dle the meeting with Kalmbach ?
Mr. BuTTERBRODT. No ; Dr. Mehren made his, you know, statement
to the board on January 12, that we would restructure TAPE, and
there'd be no expenditures out of it for a period of time until it was
restructured. And so the antitrust suit which was filed, say, 2 weeks
later had no bearing on his meeting with Kalmbach.
Mr. Weitz. If you had no concern, or vou said it wasn't your re-
sponsibility for TAPE in 1971, Avhen close to $200,000 was spent by
TAPE for the President's reelection effort, why did you think it was
advisable to change that structure in January of 1972, with respect,
now, just, to TAPE?
Mr. BuTTERBRODT. Two reasons, really. One, committee members,
producer members who served on the former committee that was
basically, let's say, a reporting committee of the old trust, or the
TAPE — in particular. Glen Schaffer and Gene Tennyson, from Wis-
consin, and Glen Schaffer from Indiana — in the year 1971, com-
plained to me, as well as to other board members, that in sitting on
that committee that they did not have any input into where the fimds
were being spent. That they were, say, after the fact, they were told
where the dollars went ; and they didn't think that was a proper way
of handling TAPE. They said they'd rather — they were going out to
the producers and explain why they should continue to voluntarily
contribute to TAPE — but they'd rather have a program where some
producers or someone had input, you know, before the fact.
And then, at the time, say 2 weeks before we changed management
and the time we changed management. Bob Isham, who was the trustee
of TAPE, indicated that he wanted to get out as trustee of TAPE,
that he didn't want to remain the trustee. He indicated that he had
enoufifh work and obligations without taking care of the trust for
TAPE.
And, because of those two reasons, we indicated to the board, at the
time we changed management, that we would change that system and
go to a committee that actually approved of those expenditures before
the fact : and that we'd set up a new trustee of the TAPE Commitltee.
Mr. Weitz. Was it your understanding that Harold Nelson had
substantially full responsibility for the decisions with respect to
TAPE, prior to that time ?
Mr. BuTTERBRODT. Technically, the answer we got was that there was
only one trustee, you know, for TAPE, and that was Bob Isham. And
Bob Isham could write, you know, whatever checks he deemed neces-
sary or wanted to spend because he was the trustee. But he, on the
advice of Harold Nelson and Dave Parr, as well as his own decisions
as to where the funds went.
Mr. Weitz. Getting back to January or early February of 1972, did
Dr. Mehren explain to you why he was asked, for what reason he was
supposed to meet with Kalmbach? How he came to go to a meeting
with Kalmbach ?
Mr. BuTTERBRODT. Oh, I believe he indicated something to the effect
that Harold Nelson was encouraging him or, you know, persuading
7643
him that he should meet with Kalmbach; that Kalmbach had con-
tacted— Harold was saying he should meet, and that would have
been
Mr. Weitz. Nelson had met with Kalmbach a couple of weeks before,
hadn't he ?
Mr, BuTTERBRODT. Accordiug to the Ed Wright report, yes.
Mr. Weitz. You had no knowledge of that at the time ?
Mr. BuTTERBRODT. No.
Mr. Weitz. Dr. Mehren didn't indicate that he knew of that at the
time?
Mr. BuTTERBRODT. No ; he didn't know of it at the time.
Mr. Weitz, At the time he talked with you, not at the time of the
meeting. At the time he talked with you, did he indicate that he had
any knowledge that anyone from AMPI had met with Kalmbach in
1972?
Mr. BuTTERBRODT. No.
Mr. Weitz. Was there any discussion at that time or thereafter
about possible use or benefit that could have been gotten with relation
to the antitrust suit for further contributions ?
Mr. BuTTERBRODT. No.
Mr. Weitz. Why not ?
Mr. BuTTERBRODT. It wasu't talked about.
Mr. Weitz. Did he report back to you — did Dr. Mehren report back
to you after the meeting with Kalmbach ?
Mr. BuTTERBRODT. YcS.
Mr. Weitz. Wiat did he tell you happened ?
Mr. BuTTERBRODT. I believe Dr. Mehren and I were together the next
day, and as I recall, he indicated that he had a session with Kalmbach.
I don't recall who, you know, was involved there, who was at the meet-
ing, but he said that Kalmbach did indicate that if we wanted to make
contributions to the Nixon people or committee, that they would set
up State committees in which to fund money through ; and as far as
our records would show, the money would go to State committees.
Mr. Weitz. State Republican committees ?
Mr. BuTTERBRODT. He didn't really say State Republican, but State
committees — maybe he did. You know, we're getting technical on that,
but State committees of some sort that they could fund through. And
as far as our records, all we had to be concerned with was that it was
going to a State committee and it would not matter where it went
from there.
Mr. Weitz. Was that for the purpose, as you understood it, of not
to show on the TAPE reports that the ultimate recipient would be the
President's campaign ?
Mr. BuTTERBRODT. Yes.
Mr. Weitz, What did you understand to be the purpose for conceal-
ing, as it were, the ultimate recipient of the funds ?
Mr. BuTTERBRODT. I guess the publicity, as much as anything.
Mr. Sanders. I'm sorry, I didn't hear you.
Mr. BuTTERBRODT. Publicity.
Mr. Weitz, Did anyone express the concern that publicity, if I may
characterize it, related to contributions to multiple committees and the
price support decision of the previous year, did anyone express the con-
7644
cern that publicity now might reflect upon the antitrust suit? Did
anyone connect it in that fashion ?
Mr. BuTTERBRODT. I don't think so, no. I know the discussions the
doctor and I would have had was that it didn't make any difference as
far as we were concerned. We were not going to fund, because if we did
do any funding, we could only — you know, we couldn't help ourself or
better ourself or get anything by funding — that if we did fund, we'd
only put the administration in the position that if they did — if we
could work out a settlement, it would appear that they were bought
off. So we'd be better off not to fund any committees.
Mr. Weitz. Would that also apply to State committees which would
not, by their name or designation, necessarily reflect the fact that they
were Presidential campaign committees ?
Mr. BuTTERBRODT. Well, the fact that Doc and I had agreed from
January 12 down, that we were not going to do anything like that
anymore, if we were going to make a contribution it would be direct ;
we were not going to operate that way. So we wouldn't even have con-
sidered, say, that proposal.
Mr. Weitz. Did you dicuss this — was there a reorganization, or at
that time was it still just the trust for TAPE ?
Mr. BuTTERBRODT. At that time it would have been just the trust for
TAPE, and we were not spending any money out of it.
Now, again, I shouldn't say that, because the record might show
that we did spend some money out of it ; but I don't believe we did.
Mr. Weitz. Did you discuss these alternatives with Bob Isham, who
was still trustee ?
Mr. BuTTERBRODT. I don't believe so, and yet I don't know. We could
have. I didn't ; let's put it that way.
Mr. Weitz. Did you, subsequently, learn of any further attempts by
Mehren, or anyone else connected with TAPE, re AMPI, to make
contributions, let's say through April of 1972 — February, March and
April of 1972 — to the President's reelection campaign, or to the Re-
publican Party?
Mr. BuTTERBRODT. Did I what ?
Mr. Weitz. Did you subsequently learn of any attempts to make
contributions, on the part of AMPI or TAPE, to make contributions?
Mr. BuTTERBRODT. No.
Mr. Weitz. Did you learn of any further contacts between Kalm-
bach and Mehren ?
Mr. BuTTERBRODT. Yes.
Mr. Weitz. What were those ?
Mr. BuTTERBRODT. Again, after Dr. Mehren made a trip to Wash-
ington— and I believe again we were together, you know, a few days
after that — and he indicated that when he was in Washington, he had
met with Kalmbach and Kalmbach had indicated to him that he didn't
want any funds from the AMPI or our political fund for the Presi-
dent.
Mr. Weitz. "When did this conversation take place ? Approximately
when ? Can you place it by month ?
Mr. BuTTERBRODT. No. I would guess March.
Mr. Weitz. March of 1972 ?
Mr. BuTTERBRODT. YcS.
7645
Mr. Weitz. And you spoke with Dr. Mehren several days after he
returned from this trip to Washington ?
Mr. BuTTERBRODT. I believe the next day or so, but I'm not, you
know, positive on that.
Mr. Weitz. Did he indicate whether Kalmbach had indicated why
he didn't want anymore money ?
Mr. BuTTERBRODT. No. He indicated that while he was in Washing-
ton, he had a session with Kalmbach and Kalmbach indicated that
they didn't want any funds — or didn't care for any funds from the
milk people.
Mr. Weitz. Do you know whether anyone else was in Washington
with Mehren at the time of the meeting with Kalmbach ?
Mr. BuTTERBRODT. I have since learned that Harold Nelson was
there.
Mr. Weitz. How did you learn that?
Mr. BuTTERBRODT. In talking to Dr. Mehren.
Mr. Weitz. How recently have you talked to Dr. Mehren about
this?
Mr. BuTTERBRODT. Friday and Saturday.
Mr. Weitz. This past Friday and Saturday ?
Mr. BuTTERBRODT. Yes.
Mr. Weitz. Did he tell you anything else about those meetings —
meeting, rather ?
Mr. BuTTERT^RODT. Not that I can recall.
Mr. Weitz. Did he tell you anyone else he met with while he was in
Washington on that trip ?
Mr. BuTTERBRODT. Yes, he met with Mr. Connally on that trip.
Mr. Weitz. "What did he t«ll you about that meeting?
Mr. BuTTERBRODT. I really don't know the details, but he indicated
he met with him. He might have told me he met with Connally, you
know, back in 1972, but I don't recall it,
Mr. Weitz. Did Mehren indicate whether or not the antitrust suit
was discussed or referred to in any way in his meeting, either with
Kalmbach — supposedly in March of 1972 — or with Connally?
Mr. BuTTERBRODT. No.
IMr. Weitz. He didn't indica/te one way or the other ?
Mr. BuTTERBRODT. No.
Mr. Weitz. Do you recall where you were on April 4, 1972 ?
Mr. BuTTERBRODT. Yes.
Mr. Weitz. "Where were you ?
Mr. BuTTERBRODT. I was iu Twin Cities — Mid-Am's annual meeting.
]\Ir. Weitz. Do you recall receiving a telephone call from Dr. IVIehren
when you were there ?
Mr. BuTTERBRODT. I dou't recall receiving a call. I know from the
record I made two phone calls to San Antonio, so I perhaps talked to
Dr. Mehren.
Mr. Weitz. "When you say, San Antonio, do you mean AMPI's home
ofRce ?
Mr. BuTTERBRODT. Eight.
Mr. Weitz. Both on April 4 ?
Mr. BuTTERBRODT. Both on April 4, and to the best of my knowledge,
in the morning of April 4.
7646
Mr. Weitz. When you say, to the best of your knowledge, is that
your recollection ? Or do the phone records indicate the time ?
Mr. BuTTERBRODT. Well, the phone records don't indicate the time.
I do know from the records at what time I checked out of tlie hotel. I
turned in a car and started flying
Mr. Weitz. The charge — ^the telephone calls were charged to your
hotel bill, is that right ?
Mr. BuTTERBRODT. To the hotel room. Look under the number from
the hoteL
Mr. AVeitz. Do you know why you called the AMPI home office
twice that morning, twice that day ?
Mr. Buttekbrodt. No. It's not unusual for me to call the office twice.
Maybe I didn't get the person I wanted the first time. I might have
had two people to talk to. They've got a poor system of transferring
calls in the San Antonio office.
Mr. Weitz. Do you recall anything about those two calls ?
Mr. BuTTERBRODT. No, sir.
Mr. Weitz. Did you talk to Dr. Mehren twice that day ?
Mr. BuTTERBRODT. I don't know if I talked to him at all. I believe I
would have if I called twice.
Mr. Weitz. Do you know whether you talked to Dr. Mehren that
day ? Whether or not you called him or he called you ?
Mr. BuTTERBRODT. I'm not positive, no.
Mr. Weitz. Didn't Dr. Mehren call you that day and ask your ap-
proval or advice with respect to a substantial contribution the next
day or so, prior to April 7, to the Republicans ?
Mr. BuTTERBRODT. I dou't bclicve so. If he did, I don't recall it. I
don't recall that he talked to me about that.
Mr. Weitz. Have you ever approved a contribution of over $50,000 ?
Mr. Green. At any time?
Mr. Weitz. In the last 4 years ?
Mr. BuTTERBRODT. Yes.
Mr. Weitz. Those were what, the two contributions in October 1972 ?
Mr. BuTTERBRODT. Yes.
Mr. Weitz. Other than those two times — you recall those, I take it?
Mr. BuTTERBRODT. Yes.
Mr. Weitz. Those were each of $150,000 ?
Mr. BuTTERBRODT. Uh-huh.
Mr. Weitz. We'll return to that in a minute. You recall those, do
you recall any others of that magnitude ?
Mr. BuTTERBRODT. No.
Mr. Weitz. Do you believe that, had you approved or been asked for
approval with respect to any contribution of, let's say, over $100,000,
that you would remember it ?
Mr. BuTTERBRODT. Ycs, because I remember the $25,000 ones, which
was probably the next biggest ones.
Mr. Weitz. Did you talk to Jake Jacobsen that day, the 4th ?
Mr. BuTTERBRODT. No.
Mr. Weitz. How about on the 31st, March 31 ? Did you talk to Jake
Jacobsen that day ?
Mr. BuTTERBRODT. No.
Mr. Weitz. Do you have any knowledge of a meeting that took
place on April 4 iii the San Antonio home office which included Dr.
7647
Mehren and Mr. Nelson. and which included reference or discussion of
possible contributions, substantial contributions to the Kepublicans,
prior to April 7, 1972?
Mr. BuTTERBRODT. Ycs, when we got the Ed Wright report, the
report shows that there was a meeting there in which Bob Lilly indi-
cated that Dr. Mehren picked up the phone and called me from that
meeting that was held that afternoon and that's why I made such
an effort to check my records to see where I was, because Bob Lilly in-
dicates that Dr. Mehren picked up the phone and called me. And, if
that were a fact, to the best of my records, I was flying in the air over
Wisconsin, someplace at that particular time, and so Dr. Mehren
would have had to be able to call the airplane in order to talk to me at
the time that Bob Lilly indicates.
Mr. Weitz. Aside trom the time Bob Lilly indicated, you don't re-
call any calls from Dr. Mehren that day ?
Mr. BuTTERBRODT. No, sir.
Mr. Weitz. Quite apart from any particular calls, you recall no
discussions of that sort that day ?
Mr. BuTTERBRODT. No, sir.
Mr. Weftz. Did you talk to Gary Hanman about the other $150,000 ?
Mr. BuTTERBRODT. No, sir.
Mr. Weitz. How about $75 or $100,000?
Mr. BuTTERBRODT. No. sir.
Mr. Weitz. Did you talk to members of the other co-ops in 1972 ?
Let's say the first 4 months of 1972, the others being mid-America
and
Mr. BuTTERBRODT. I don't believe so.
Mr. Weitz. Or to the President's reelection ?
Mr. BuTTERBRODT. I dou't bclieve so. Not to my knowledge.
Mr. Weitz. Are you aware that 50 checks, each for $5^000, totaling
$150,000, were drawn apparently on April 4, 1972, on the CTAPE
account and voided sometime the next day or so ?
Mr. BuTTERBRODT. No.
Mr. Weitz. Have you ever discussed that with Dr. Mehren?
Mr. BuTTERBRODT. We discussed 30 checks, but not 50
Mr. Weitz. I'm sorry. Thirty checks each in the amount of $5,000.
Mr. BuTTERBRODT. Yes, I have discussed that with Dr. Mehren.
Mr. Weitz. Was that just this past weekend ?
Mr. BuTTERBRODT. No. I would say it was perhaps either late in
1973 or early 1974, after — I don't know, you, or someone started asking
Dr. Mehren about them.
They called me and asked me what I knew about those 30 checks, if
I could shed some light on those 30 checks, and I indicated no, I
couldn't. And I still can't, you know. If they were reported, if Dr.
Mehren — he could have told me about them. If he did, I don't recall.
You know, it was insignificant. The money wasn't spent. I can't say
that someone didn't tell me about it, but to me it was so insignificant
that I don't remember
Mr. Weitz. It was insignificant when ?
Mr. BuTTERBRODT. All I'm saying is if someone, you know, told me
about it at that time on Api'il 4th or 5th, whenever, that it was voided
or what, I don't recall it. I have no recollection.
7648
Mr. Wettz. You said, yourself, at the time of the transition in Janu-
ary of 1972, a policy was established by Dr. Mehren that reorganiza-
tion would take place and that, at least for the time being — perhaps
for 30 days or the time the reorganization would take place — there
would be no spending of funds.
In fact, that was your understanding before you went out to see Mr.
Kalmbach and yet on April 4, 1972, checks totaling $150,000 are drawn
and, presumably shortly thereafter, voided.
Now, at the time, had someone mentioned to you "we almost con-
tributed $150,000 to somebody or something?" That wouldn't be in-
significant, I take it ?
Mr. Greex. I think I, for the most part, have not interrupted and
have not tried to make any comments on the interrogation. But I don't
know that a question like that serves any useful purpose, because he
says he has no recollection. It's in a philosophical vein and I don't
think it advances anything materially.
Mr. Weitz. To be more specific. Dr. Mehren has testified, and it's a
matter of record, that he signed those checks that were ultimately
voided.
Now on April 5. 1972, did you meet with him in some type of an-
nual— some type of regional meeting of AMPI ?
Mr. BuTFERBRODT. We Had a board meeting on the 5th. Now I should
also point out to you that we had restructured, you know, the com-
mittee for TAPE, by April — I believe it was in March, at our March
board meeting. We had restructured TAPE and from that point on
had a committee of fovu* that had to approve any expenditures, so
that $150,000 or those checks could not go out without approval of at
least three people on that committee.
Mr. Weitz. You were a member of that committee ?
Mr. BuTTERERODT. Ycs, and I did meet with — or was at the same
meeting. We had a board meeting in Fond du Lac, Wis., on April 5
at which Dr. Mehren came up and spoke to the board, at which
time the board approved going to the delegates and asking them for
an increase in checkoffs in that region.
And, again, because in my — you know, what affected me at that
particular time was again producers and the increase in checkoff, and
keeping AMPI alive and financially sound, you know, was more im-
portant.
But, by the same token, those checks could not liave gone out with-
out getting committee approval. And I don't believe the committee
was asked for approval.
Mr. Weitz. But the normal course, before they would have gone out,
would have been to ask for their approval ?
Mr. BuTTERBRODT. That's right.
Mr. Weitz. "\^nio is Dwight Morris?
Mr. Butterbrodt. Dwight is a dairy farmer in Arkansas ; a former
secretary of AMPI.
Mr. Weitz. A secretary to the board ?
Mr. Butterbrodt. Board secretary, office of secretary.
Mr. Weitz. Did you have occasion to meet with him in April of
1972?
Mr. Butterbrodt. Yes, sir.
Mr. Weitz. Was that on April 11, 1972?
7649
Mr. BuTTERBRODT. Yes, sir.
Mr. Weitz. Where was that meeting?
Mr. BuTTERBRODT. Ill Chicago.
Mr. Weitz. What was the purpose of the meeting?
Mr. BuTTERBRODT. Well, the purpose was probably threefold. I met
with Mr. Grossman, who is a lawyer in Chicago. I went to him for
advice on various subjects in 1972. I met with Mr. Grossman that
morning at which time he finalized the 9- or 10-page document for
me, as to the removal of Dwight jNIorris and other board members from
Arkansas from the board of directors.
Dwight had gotten involved in the formation of Southern Milk
Producers in Arkansas. I'd refer to it as a rump group within AMPI
and some of us felt — the board felt that he had a conflict of inter-
est and we should remove him from our corporate board. And I
went to Mr. Grossman and went over in detail with him that morning,
the procedure we had to follow under our AMPI by-laws and the
Kansas law — which we were incorporated under the law of the State
of Kansas — and how the Kansas law affected the removal of a board
member who had a conflict of interest.
I had previously written to Dwight and asked him to resign from
the board, and resign as secretary, and I spent the morning with ]Mr.
Grossman getting the detailed document as to what procedure I had
to follow to remove Dwight.
The second purpose of the meeting was to ask Dwight for our
corporate seal back. Dwight was the secretary involved with a rump
group. There were some of us concerned that he would use the cor-
porate seal, not in the best interests of AMPI.
He had chosen not to attend board meetings and for a number of
reasons, we needed the seal in the hands of our assistant secretary to
conduct business.
And, third, I wanted to talk to Dwight about, was there any possi-
bility of working out our differences with the southern milk group,
the rump group.
Mr. Weitz. I take it you discussed these various matters with him
at that meeting?
Mr. BuTTERBRODT. Yes.
Mr. Weitz. Did you also refer, in any way, to the antitrust suit?
Mr. BuTTERBRODT. No ; I don't believe so.
Mr. Weitz. Did you refer, in any way, to any contacts that Mehren
had or your people had had with the administration or Republican
fundraisers in 1972 ?
Mr. BuTTERBRODT. No.
Mr. Weitz. Did you refer to any political contributions or attempted
political contributions?
Mr. BuTTERBRODT. I clou't belicve so, no.
Mr. Weitz. In the Wright report there is an account of a telephone
conversation between Mr. Heininger and Mr. Dwight Morris, sup-
posedly recounting part of the meeting, the substance of part of the
meeting he had with you on April 11.
We have information directly from Mr. Morris, but limiting our-
selves for the moment to the account in the Wright report — the account
refers to the fact that you related to Mr. Morris an attempt by Meh-
ren— an agreement between Mehren and Kalmbach. to contribute —
7650
TAPE to contribute a large amount of money, perhaps $300,000, to
fix the antitrust suit.
I take it that you did not engage in any such discussion with Mr.
Morris to that effect on that day ?
Mr. BuTTERBRODT. I don't think you're relating the Ed Wright report
accurately, to start with.
As I recall, the Ed Wright report, and what Dwight Morris said,
was that I went to Washington and met with various officials or
attempted to, and then he indicated that I went to California and met
with Kalmbach and that I related that to him.
Mr. Weitz. You did not go to California ?
Mr. BuTTERBRODT. No.
Mr. Weitz. And you did not meet with Mr. Kalmbach ?
Mr. BuTTERBRODT. No, sir.
Mr. Weitz. And you did not tell him that Mehren had met with
Kalmbach ?
Mr. BuTTERBRODT. No, sir.
Mr. Weitz, Mehren had met with Kalmbach ?
Mr. BuTTERBRODT. That's right.
Mr. Weitz. You did not tell him that attempted contributions or an
agreement had been made to make contributions ?
Mr. BuTTERBRODT. No, sir, there was no such agreement.
Mr. Weitz. How do you know that ?
Mr. BuTTERBRODT. I talked to Dr. Mehren.
Mr. Weitz. He told you there wasn't any ?
Mr. BuTTERBRODT. That's right.
Mr. Weitz. You weren't present at any of the meetings with Mr.
Kalmbach ?
Mr. BuTTERBRODT. No, sir.
Mr. Weitz. You weren't at any of the meetings with Dr. Mehren
in Washington ?
Mr. BuTTERBRODT. No, sir.
Mr. Green. I'd like you to also ask him if he's been to Washington.
Mr. Weitz. Ever?
Mr. Green. Aside from these meetings.
Mr. Weitz. I'm sorry ?
Mr. Green. Aside from the meeting with the President.
As I understand in the Wright report — I haven't got it in front of
me, I read it some days ago — but there's some reference, I believe,
and I may be imprecise as to Mr. Butterbrodt traipsing around cer-
tain agencies or certain areas, and it might be helpful to ask him — ^it
might be helpful to dig it out, to get the actual
Mr. Weitz. Let's go off the record a minute.
[Discussion off the record.]
Mr. Weitz. Mr. Butterbrodt, apparently not in the statement in-
cluded in the Wright report, but in some other public statements, Mr.
Morris has alleged that he believes you told him at that April meet-
ing, that you had been to Washington and visited with a number of
agencies, including the FTC and the Justice Department, and such.
Have you ever had occasion to go to any of those agencies or meet
with anyone there ?
Mr. Butterbrodt. No ; my records show from January 12 to April
11, I was not in Washington. D.C. And on no occasion have I been
to the Justice building or the FTC.
7651
Mr. Weitz. Dr. Mehren, as you've testified, was in Washington at
least once during that period ?
Mr. BuTTERBRODT. Yes.
Mr. Weitz, Do you know where he went ?
Mr. BuTTERBRODT. No ; I don't.
Mr. Weitz. Did you understand, either from public testimony or the
Wright report, or any other source, of Mr. Morris' allegations that he
was necessarily referring to you in the first pei-son, that is, John But-
terbrodt, having gone to those places or that representatives of AMPI
had done so ?
Mr. BuTTERBRODT. His reference was that I went, and I think, in some
public statements he's made since, he has changed that to say that when
he refers to John Butterbrodt, he's referring to AMPI personnel.
Mr. Weitz. I don't — and counsel may be veiy quick to point out —
I don't like to engage in speculation, but let me ask you this question.
If you had met with him, or described your activities — I shouldn't
say "your" activities, that's the very problem — activities of Dr.
Mehren, and you had said "we," would you understand— would that
be an explanation for Dwight Morris' assumption that you, person-
ally, John Butterbrodt, had engaged in certain activities ?
Mr. Greex, Don't
Mr. Weitz. You don't want him to answer that ?
Mr. Greex. I don't think he should answer that.
Mr. Weitz. I take it you did not tell him that either A^NIPI or any
of its representatives or in a collective sense "we" had done any of the
things he had mentioned ; that is, meet with Mr. Kalmbach or go to
Washington, or make an agreement to make contributions or related
matters ?
Mr. Butterbrodt. That's right.
Mr. Weitz. Although some of those facts would have been true :
that is, Dr. Mehren having gone to Washington and also having met
with Mr. Kalmbach ?
Mr. Greex. If you limit it to that.
Mr. Weitz. If vou had said that, that would have been true. But
you say you didn't tell him that or any of the other matters ?
Mr. Butterbrodt. That is possible, but I don't believe that that issue
or subject came up whatsoever.
Mr. Weitz. I'd like to snow you Lilly exhibit 28 * which is a memo-
randum from Dr. Mehren, plus an attacneU letter, une or cue ad-
dressees is yourself, addressees of Dr. IMehren's memorandum. Have
you ever seen that memorandum or attached letter ?
Mr. Butterbrodt. I've seen this, yes.
Mr, Weitz. It's been marked as an exhibit in Lilly's session, and we
need not mark it again. If I may characterize it, the letter refers to a
request by the Democratic National Committee for a contribution
from TAPE for the purchase of convention booldets at the 1972 con-
vention.
Mr. Butterbrodt. For both
Mr. Greex. Let me object to the characterization. I don't see the word
"contribution."
Mr. Weitz, For the purchase ?
Mr. Greex. For the purchase.
» See Book 14, p. 6186.
7652
Mr. Weitz. I believe the cover memorandum from Dr. Mehren
refers to the fact that the other national committee wants to do the
same. My question is, do you recall any request or discussion in con-
nection with requests by the two national committees for TAPE to
purchase convention booklets from the two conventions?
Mr. BuTTERBRODT. Yes, and they're both mentioned in the letter.
Mr. Weitz. So both the letter and the cover memorandum refer to
them?
Mr. BuTTERBRODT. Both the Republicans and the Democrats.
Mr. Weitz. Do you know whether that matter was ever discussed
by the committee, the four of you together ?
Mr. BuTTERBRODT. I dou't know if we were together when it was dis-
cussed, or it was discussed by phone, but the four of us did discuss it ;
Mr. Weitz. Now we have another exhibit, Lilly 29,* which consists
of a cover memorandum from Mehren to Bob Lilly and an attached
letter which I believe also refers to the same matter. Have you ever
seen that memorandum or the attached letter?
Mr. BuTTERBRODT. What was the question ?
Mr. Weitz. Have you ever seen that letter ?
Mr. BuTTERBRODT. I dou't bclicve so ; no.
Mr. Weitz. Now the attached memorandum, which has been identi-
fied in another executive session, says "Please return to me with demo
letter for TAPE group here on 3/30," which would be March 30, and
the date of this is March 29, and the letter is dated March 27, 1972.
Now your expense reports, which you submitted to the Associated
Milk Producers, Inc., indicated on March 30, 1972, you were in
San Antonio for an executive board meeting. Do you recall on that oc-
casion meeting with the TAPE committee to discuss these requests by
the Democratic and Republican National Committees ?
Mr. BuTTERBRODT. I dou't recall, but the records you have in front
of you should show that because the minutes of the TAPE committee —
if the TAPE committee met, you should have minutes of it.
Mr. Weitz. Do you know what was done with the requests, whether
they were approved or refused ?
Mr. BuTTERBRODT. They were refused.
Mr. Weitz. What was the reason for that ?
Mr. BuTTERBRODT. I don't really know, other than I didn't think we
were getting our money's worth for $100,000 — I believe it was $100,000
for each committee, or each party — am I right? For each party
$100,000?
Mr. Weitz. Yes ; I think so.
Mr. BuTTERBRODT. I didn't think we were getting our money's worth
for programs. No. 1, and, if my memory serves me right, I believe some
of the people, you know — I believe Jake Jacobsen's name was men-
tioned as working on this project, and I guess I was so gun shy of some
of the former people like that, that were involved, that I just couldn't
see it. So, for my money, it wasn't a good program.
Mr. Weitz. I'd like to show you for identification the letter from Mr.
Heininger, dated January 21, 1974, to Kenneth Parkinson, attorney for
* See Book 14, p. 6189.
7653
the Committee To Re-Elect the President. I believe that you've said
you've seen that letter and I'd like you to identify it, please. Is this a
copy of the letter ?
Mr. Green. Could we go off the record ?
Mr. Weitz. Sure.
[Discussion off the record.]
Mr. Weitz. Is that a copy of the letter ?
Mr. Butterbrodt. Yes.
Mr. Weitz. Let me mark it as exhibit 1 to your session.
[Whereupon, the document referred to was marked Butterbrodt
exhibit No. 1, for identification.*]
Mr. Weitz. Finally, I think you referred to several — ^two large con-
tributions, each of $150,000, that you had knowledge of in October of
1972. Would you tell us, did you approve those or have knowledge of
those in the course of your activities for the committee for TAPE ?
Mr. BurrERBRODT. Yes, sir.
Mr. Weitz. Wlio asked for your approval ?
Mr. Butterbrodt. I believe we were at a committee meeting of
TAPE when it was discussed, about fimding those committees.
Mr. Weitz. Do you know when that meeting took place ?
Mr. Butterbrodt. It would have been in October of 1972.
Mr. Weitz. Just so the record is clear, there is a record of an Octo-
ber 11, 1972, meeting at which time the committee for TAPE voted —
I believe the records indicate — not to contribute any funds to the
Presidential campaign, but to contribute $25,000 each to the Repub-
lican and Democratic congressional campaign committees. Do you
recall that meeting and that decision ?
Mr. Butterbrodt. I recall that meeting, but I don't recall that deci-
sion, and I've seen the minutes of that meeting and again, I question
whether those minutes are accurate. I don^ keep the minutes.
Mr. Weitz. "\^Tio keeps the minutes ? Or, who's responsible for com-
piling them ?
Mr. Butterbrodt. Bob Lilly keeps the minutes.
Mr. Weitz. So you're saying that you're not sure that that decision
was made, or any such decision
Mr. Butterbrodt. It was made. But I don't know if it was $25,000
for each committee.
Mr. Weitz. I'm saying October 11, 1972.
Mr. Butterbrodt. My recollection was we had approved funding to
those committees, but the dollar amounts
Mr, Weitz. What do you mean "the dollar amounts"? Was that left
open, or what?
Mr. Butferbrodt. The minutes show that we gave $25,000 to each
committee and, No. 1, looking back, I can see no real reason for giving
$25,000 to each committee when what we really talked about was a
balancing effect, as far as payments were concerned, and wanted to
balance out the payments to the two parties. And we talked about
using those four committees as a method of balancing the payments
out.
Mr. Weitz. Just so I understand, were there two committee meet-
ings in October at which this matter was discussed, or just one?
• See p. 7674.
7654
Mr. BuTTERBRODT. I think just one.
Mr. Weitz. Whenever that took place, it was at that meeting, to
the best of your recollection, a discussion and a decision to approxi-
mately balance out contributions through those committees that I
mentioned, was made?
Mr. BiTTTERBRODT. Right. We might have left the dollar amount —
you know. Bob Lilly, or somebody, to come up with a dollar amount as
to how much it would take to balance out.
• But my recollection was that, you know, we talked about balancing
out. those payments and I believe, if you checked the TAPE records,
you would find that after, you know, let's say at the time of the
election, or at the end of November, if you checked the record on
November 15, you would find that the payments that were made in
October, after all those payments were made and we got to this, you
know, that point that the Democrats for the year — now I'm talking
about local, State. Governor races, everything — the Democrats got
as much as the Republicans and that's what I mean by "balancing out,"
and that was the method or vehicle, to use those four committees to
balance out those payments.
Mr. Weitz. Do you recall whether at that meeting, or in connection
with that meeting, anyone mentioned any recent solicitations by
Republican fundraisers for the President, such as Lee Nunn ?
ivxi". ijU'iiERiiKODT. No. As I recall — I mean it would help with the
dates, but I thought that Dr Mehren met with Lee Nunn after
October 11.
Mr. Weitz. That's true. So you are fairly certain, then, that the
meeting you're talking about, at which this decision was made for
substantial contributions to balance out, and your recollection was in
excess — or different than necessarily $25,000 each — was made at a
meeting on or around October 11, in advance of the time when Dr.
Mehren met with Lee Nunn ?
Mr. BuTTERBRODT. YcS.
Mr. Weitz. Did you have occasion, after that meeting between
Mehren and Nunn, to discuss those contributions or any other contri-
butions with him to these committees, these four committees ?
Mr. BuTTERBRODT. With Dr. Mehren ?
Mr. Weitz. With Dr. Mehren.
Mr. BuTTERBRODT. I dou't recall. I'm sure we talked about it because,
again I was in San Antonio the day before Lee Nunn came in to
meet with Dr. Mehren. And again Dr. Mehren asked me if I wanted
to stay over and meet with Lee Nunn and again I indicated, as I did
earlier in the year, that, you know, there's no basic reason for me to
spend anotlier night in San Antonio, spent part of my weekend in San
Antonio, to meet with Lee Nunn because we were on record as not
funding the Nixon people and we told that to Senator McGrovern.
We had met earlier with Senator McGovern and as I indicated all
along, you know, we were on record as not funding — and again,
knowing wno Lee Nunn was, he wasn't the type of individual that I
would have said to Dr. Mehren, "don't meet with him." "N^lien he
asked my advice, it was "meet with him, don't commit yourself, don't
make him sore at us. But, by the same token, if nothing else, tell liim
that, you know, I'm the fault, I'm the problem, or the committee's
the problem, but we are not going to fund." So I did not stay over for
7655
the meeting, and I'm sure that Dr. Mehren informed me that night
or the following Monday about the meeting with Lee Nunn.
Mr. Weitz. Do you remember what he told you about the meeting ?
Mr, BuTTERBRODT. I don't really recall. I do recall that Dr. Mehren
met on tliat Saturday with President Johnson, too.
Mr. Weitz. He told you about that ?
Mr. BuTTERBRODT. Yes.
Mr. Weitz. Do you remember anything about that discussion?
Mr. BuTTERBRODT. I do recall, and maybe — and visiting this weekend
on that issue — that I do recall that Dr. Mehren made a statement that
President Johnson indicated that by funding those Senate and con-
gressional committees, that a candidate running for President could
get some value or good from those contributions. And so we could also
be helping both Presidential candidates by funding those committees.
Mr. Weitz. But you didn't want to help the Presidential candidates?
Mr, BuTTERBRODT. That was not our intent, no,
Mr. Weitz. Did he ask for your approval in connection with an addi-
tional $150,000, each to the Republican Senatorial and Congressional
Campaign Committees ?
Mr, BuTTERBRODT. I'm under the impression that that was given
earlier, but I could be wrong. Again, the records would show when ap-
proval was received for the $150,000,
There was discussion about — as far as that money going to those
committees — that a detailed letter would be written indicating that
that was not a commitment, or that we were not tying anybody's
hands as to where those dollars could go, but that that committee that
received them could, you know, use it for whatever, wherever they
wanted to,
Mr, Weitz, Was it your understanding that if they had a surplus
they could transfer it on to the national committee ?
Mr, BuTTERBRODT. No, that was not my understanding.
Mr. Weitz, Just so I am clear, because there are a number of dates
and a number of meetings here, do you recall appro\ang, after the
meeting between Nunn and Mehren — specifically approving — an ad-
ditional contribution to the Republican congressional and senatorial
committees, $150,000 each, above and beyond what had been deter-
mined previous to the meeting between Mehren and Nunn?
Mr. Green, There's been no testimony as to what has been deter-
mined, what amount was determined.
Mr, Weitz, I gather his testimony is that a meeting was held on
October 11. It was decided to balance out. And that the amounts were
left to Lilly or somebody to figure out. Is that correct ?
Mr. BuTTERBRODT, Evcn at that time we were talking that it would
take something like $210,000 to balance out. That figure has always
rung a bell with me, as far as what it would take to balance out, Mel
Besemer, you know, he said we should balance it out, and I think
Preach Griffith said the same thing.
You see. one of the problems we have had and we've got again with
the TAPE fund is, at the end of the year, if you give more money to
the Democrats than you do to the Republicans, then all the Republi-
cans are biting on you all the time. And, if you give more to the
Democrats than the Republicans, even though you look at 2 years or
3 years and it comes out even, you still get bit every year. And this
7656
last year, I didn't pay enough attention — or the committee didn't pay
enough attention — and we put more money in one party than the
other, and we got bit hard on it and I maintain — that year, I made a
point out of the fact that we want to balance it out.
And again, I haven't looked at the record, but I think that the rec-
ord would show that we did balance out and that was the purpose of
funding those committees, was to balance out.
Mr. Weitz. And the approval for that was given, in principle, on
October 11?
Mr. BuTTERBRODT. On October 11, yes.
Mr. Weitz. And I'm asking you whether you gave any approval,
either in principle or for specific sums, for additional contributions
after the Mehren-Nunn meeting on October 21, other than what you
had already approved on October 11 ?
Mr. BuTTERBRODT. I could havc, but I don't recall. It would have
been all one kind of program, before or after. The Nunn meeting had no
significance as to what dollars or where it was going.
Mr. Weitz. Suppose, if in fact it is the case, the Democratic contri-
butions had already been drawn up before the Nunn-Mehren meeting,
and the- — in other words, that two $25,000 checks had eacli been drawn
up for the Democratic congressional and senatorial committees before
the 21st
Mr. Green. Let's ask him if he knows that.
Mr. Weitz. Do you know that ?
Mr. BuTTERBRODT. No, I dou't
Mr. Weitz. When Mehren talked to you, after the meeting on the
21st, you had no knowledge of what had been spent or what hadn't
been spent?
Mr. Btjtterbrodt. No, sir.
Mr. Weitz. Was he asking you for any further approval ?
Mr. BuTTERBRODT. I guess maybe I'm confused here, because I
thought it was, you know, like $47,000 and $60,000 went to the Demo-
cratic committees, and not $25,000, but ^'ou're losing me on figures now.
Mr. Weitz. You're saying that all of this was part of a continuum
from October 11, so once you gave the approval in principle on Octo-
ber 11, you can pinpoint or recall no specific approval jou gave for
any separate contribution other than the one, in principle, you ap-
proved on October 11 ?
Mr. BuTTERBRODT. That's right. But they might have come back and
said look, this is what we're going to do. They might have called back
and said, these are the figures, now is it OK with these figures? And T
would have said yes, because in principle, as long as it was a balancing
out effect — now, when I say that I also have to say that at one time
in the committee meeting we discussed, you know, giving so much
money to the Republicans to balance out, and Mel Besemer, or some-
body indicated "well, if you're going to use those national committees,
you should give some to the Democrats at the same time." You know,
at that level. Even though — in other words, if my figures were — say
we had to srive $210,000 to the Republicans to balance out, and some-
one said "well, let's give $90,000 or $100,000 to the two or four— two
Democratic committees," then we'd have to o^ive, say, another $100,000
or $90,000 to the Republican committees. But the dollar amounts, I
don't recall exactly what they were — only that we were going to fund
7657
the four committees and whatever we gave x committee, we were going
to balance out — so it did balance out at the end. Because we were
talking, you know, in a range of $300,000, or $350,000, that we were
going to spend.
Mr. Weitz. Overall ?
Mr. BuTTERBRODT. Overall.
Mr. Weitz. To all four committees?
Mr. BuTTERBRODT. Yes.
Mr. WErrz. Can you explain why $350,000 was contributed to the
two Republican committees and thereby either requiring, according
to the principle you've outlined, around $150,000 to the two Demo-
cratic committees?
Mr. BuTTERBRODT. As I indicated. I know Mel Besemer, a Democrat,
indicated if we were going to put that kind of money in the Republi-
can— the national level — we should also put some money in the Demo-
crats at that level.
And T believe — I don't know what the minutes would show, but if
I recall — we had a letter from a contributor that kind of went along
the lines of, you know, we gave this money as producers, we put the
money in the fund, and hell, you should use it all ; you shouldn't be
sitting on it. And we had a lot of members that were asking, you know,
are you going to spend the money ? We put it in there, are you going
to spend it ?
And so, there was also discussion about spending the money. In
other words, if you've got $600,000, or $650,000. we should spend'^it in
the election. And with that in mind, we talked about, vou know, spend-
ing $300,000 or $400,000. And one of the problems we had, we wanted
to balance out at the same time.
Mr. Sanders. I want to go off the record a minute.
[Discussion off the record.]
Mr. Sanders. "^^Hiere is your home ?
Mr. BuTTERBRODT. It s at Route 1, Burnett, Wis.
Mr. Sanders. Is that where your dairy farm is located ?
Mr. BuTTERBRODT. That's the dairy operation. I live within 150 feet
of the barn. I still manage the operation, go down to the barn when
I'm home.
Mr. Sanders. Do you have some business in connection with the
office you've identified, aside from the farming business ?
Mr. BuTTERBRODT. Yes. I spend on the average of a day to a day
and a half a week in the office at Fond du Lac, Wis. The rest of the
time I spend at meetings or in travel.
Besides serving as president of AMPI, and again because the presi-
dent is not a part of management or running the operation, I also
serve, for example, on the board of directors of the United Dairy
Association. I serve on the board of directors of the American Dairy
Association. I serve on the National Dairy Council board. I serve on
the national DRINC, which is Dairy Researcn, Inc., board. While I
do not serve on the National Milk Producers Federation board, I am
active in their activities through the national organization and so with
the other organizations, and connecting responsibilities as well as
producers' meetings, I spend a great deal of time traveling and at
meetings.
7658
Mr. Sanders. The office that you go to is connected with papers,
and all these other matters ?
Mr. BuTTERBRODT. Well, basically, board and other functions,
agendas and so forth, plus the fact that all property is, of course, in
the name of the corporation. I have to sign for any property we sell,
and we do, through the merger we acquired a lot of plants and prop-
erty and equipment that cannot be sold without my name, so there are
legal documents itself, you know, most of the time, that's sizable.
Mr. Sanders. Are you salaried by AMPI ?
Mr. BuTTERBRODT. No.
Mr. Sanders. You receive only out-of-pocket expenses?
Mr. BuTTERBRODT. No, I rcceive out-of-pocket expenses as well as
in dairy terms that we refer to it as per diem, and the Government
looks at per diem as expenses, but in this case, I receive a payment
for those days that I actually work or spend on AMPI business or
dairy-related business. And, if I spend a half a day, I get a half a
day's per diem. And if I spend all day, I get 1 day. And if I spend
24 hours, I still get 1 day.
Mr. Sanders. Prior to your assumption of the office of president in
November 1969, were you a corporate officer of MPI ?
Mr. BuTTERBRODT. No. I was not part of MPI.
Mr. Sanders. Were you part of some group or association which
was merged into AMPI ?
Mr. BuTTERBRODT. Ycs. I was serving as first vice president of Pure
Milk Association. Their office was in Chicago and Pure Milk Asso-
ciation merged into AMPI on November 1, 1969.
Mr. Sanders. How do you spell that ?
Mr. Weitz. "Pure"
Mr. Sanders. Pure Milk. I do know how to spell "Pure".
Is it correct, then, that for TAPE, as opposed to CTAPE, you had
no official position on the administering body ?
Mr. BuTTERBRODT. That's right.
Mr. Sanders. Were you, nevertheless, consulted at times on contri-
butions to be made from that fund ?
Mr. BuTTERBRODT. No, sir, never.
Mr. Sanders. Did you ever make suggestions for disposition of the
funds?
Mr. BuTTERBRODT. I doubt it. I might have made, you know, one or
two small suggestions, say for a local Consrressman or Senator in my
area, but I don't recall, you know, that I did.
I did attend both the Democrat and the Eepublican national fund-
raising dinner with tickets purchased out of the TAPE fund, either
in 1970 or 1971.
Mr. Sanders. Did you — and again I'm speaking strictly with regard
to TAPE — did j'ou make any suggestions for contributions to be made
to Senator Humphrey for his Presidential campaign, regardless of the
year?
Mr. BuTTERBRODT. No, of course I think he only ran once.
Mr. Sanders. What I mean is whether in 1969, 1970 or 1971 ?
Mr. BuTTERBRODT. No. I don't believe so, althousfh I think since the
committee — are vou talking about the Committee for TAPE ?
Mr. Sanders. I'm talking about TAPE.
Mr. BuTTERBRODT. I would say — well now you're talking about
7659
Mr. Sanders. TAPE, not CTAPE.
Mr. BuTTERBRODT. No, I doii't believe so. I don't think I ever put —
I wouldn't have to put in a request for Humphrey because he had
closer friends on the TAPE committee than me.
Mr. Sanders. Who is your Congressman ?
Mr. BuTTEKBRODT. Kasteumeier.
Mr. Saxders. With respect to CTAPE, have you made any sug-
gestions for the disposition of funds to Senator Humphrey's Presi-
dential campaign in 1972 ?
Mr. Butterbrodt. I wouldn't have. Again, because Mel Besemer,
who is also a committee — a member of the committee for TAPE, is
from Minnesota and a close friend of Senator Humphrey's would
have made that — I might have made the motion, you know, on rex'ord,
but Mel Besemer would have come in with the recommendation or
suggestion.
Mr. Sanders. Have you, individually, made proposals for contribu-
tions from that fund for any other Democratic Presidential
candidates ?
Mr. Butterbrodt. I don't know — I wouldn't have originated, say,
a proposal. I carried — or after one of the board members talked to
me, I know I requested a contribution for Senator Jackson, you know,
at my request. But it didn't originate with me, it came from other
board members.
I'm aware of, you know, other contributions, but I don't believe I —
there were not, and still are not even today— I don't generate many
requests. I did for Bob Kastenmeier. I put in a request for Bob Kasten-
meier on my own volition, but other than that, I'm not that close to
the political end that I would make a, you know, recommendation or
suggestion to the committee. It would come from somebody else. It
might come to mo then I'd go to the committee with it, not on my own.
Mr. Sanders. You're aware that Congressman Mills received a
$25,000 contribution from CTAPE ?
Mr. BurrERBRODT. That's right.
Mr. Sanders. Did you participate in the deliberation on that
contribution ?
Mr. Butterbrodt. Yes.
Mr. Sanders. Are you knowledgeable as to whether those delibera-
tions appear in the minutes of CTAPE ?
Mr. Butterbrodt. I'm not aware. I'm sure they must — well, I don't
know. I don't think they'd show up in the minutes because I believe
that was a telephone conference or a telephone, you know, approval.
But the records would show that it was approved by the various com-
mittee members — I assume the records will show that.
Mr. Sanders. Eather than have a formal meeting, it was — —
Mr. Butterbrodt. I'm not sure when, but I'm aware of the
contribution.
Mr. Sanders. Do you know who generated that request?
Mr. Butterbrodt. No. I couldn't say for sure.
Mr. Sanders. You don't recall who spoke with you about it?
Mr. Butterbrodt. No, I really don't. It could have been, you know,
anyone of the committee. It could have been Dr. Mehren.
Mr. Sanders. Could it have been Dave Parr?
Mr. Butterbrodt. No, it couldn't have been Dave Parr.
7660
Mr. Sanders. You say that because you don't have many conserva-
tions with him ?
Mr. BuTTERBRODT. Two reasons. One, since January 1972 Dave Parr
and I rarely speak and Avhen we do we don't speak vr-y friendly to Oiie
another, and I believe if Dave Parr had called and asked for it, I
would have voted no, so I'm sure it was not Dave Parr because Dave
Parr doesn't call me.
Mr. Sanders. Do you have any recollection of any contemporaneous
explanation of why $25,000 would be allocated to Congressman Mills,
from the person Avho proposed the sum ?
Mr. BuTTERBRODT. You're asking me why we gave $25,000 ?
Mr. Sanders. Yes.
Mr. Green. For clarification, are you asking why they gave, or why
they gave $25,000?
Mr. Sanders. I wanted to know, first, if whoever suggested it, the
sum, offered any reason to accompany it?
And then I'm going to ask him if
Mr. BuTTERBRODT. I dou't belie ve anybody — whoever it was, whether
it was Dr. Mehren or Preach Griffiith, or Bob Lilly that called in regard
to this sum — I don't believe whoever it was would haA'e explained
to me why, only that Mills at that time was a candidate for a nominee
for President, and they Avould not have had to explain to me, why
that amount, or I would not have questioned that amount.
Mr. Mills— Mr, Chairman, as we refer to him — is very knowledge-
able in the dairy industry, understands- — and it's the purpose, again,
of the political funds — the reasons the producers put them in there, is
to trv and get friends elected to positions, be it Congress. Senate, or
President, and if $25,000 would have helped Congressman Mills to get
nominated or to get to the White House, he is a friend of the dairy
industry and I recognize him as a friend of the dairy industry and
he has voted favorably for the dairy industry and so we would support
him and help him in his efforts.
Mr. Sanders. Was that not a greater sum than was allocated to
Senator Humphrey ?
Mr. BuTTERBRODT. I believc so, only on the basis that I think that
was the largest contribution to any single candidate, and that's why
it stands out in my mind.
That's not to say that Senator Humphrey is not a friend of the
dairy industry.
Mr. Sanders. Senator Humphrey doesn't chair a committee that
Mr. BuTTERBRODT. No, I bclievc it was more a case at that particular
time, at the time of the Democratic National Convention, or the week
prior to it, when the $25,000 commitment was made. Senator Hum-
phrey was not in the running for nomination at that time. And of
those people in the running for Democratic nominee. Congressman
Mills was a better friend of the industry.
IMr. Sanders. Are you aware of any support by Chairman Mills for
statutorily increasing the milk price level in March of 1971 ?
Mr. BuTTERBRODT. I'm aware that he w^as, you know, supporting our
position, yes.
Mr. Sanders. Did you have any personal contact with him in Feb-
ruary and March of 1971, for the purpose of discussing the milk price
level?
7661
Mr. BuTTERBRODT. I met with Chairman Mills, but I couldn't recall
whether it was in February or March of 1971. It was not significant
if I did. I might have been in his office and out, or something like that,
but no detailed session with him.
Mr. Saxders. Without regard to the time, would the purpose stand
out in your mind, that is, that the meeting was in connection with an
increase in the milk price ?
Have you ever talked with Congressman Mills about increasing the
price support for milk ?
Mr. BuTTERBRODT. I dou't bclievc I did, no, and I don't believe I was,
you know, in a session with him. I'm sure because people have re-
ported that other people have. Again, there's people a lot closer to
Chairman INIills than what I am, and therefore, they would have
talked to him about those issues.
Mr. Saxders. Did other key officials in AMPI report to you in the
early months of 1971, any contacts with Congressman Mills concern-
ing the support for milk?
Mr. BuTTERBRODT. Ycs, thev would have given reports. I think at
times they asked Chairman INIills for recommendations as to, you
know, what they should do or how they should handle the program to
try and reverse, you know, the de^'ision on price support.
Mr. Saxders. In the early months of 1971, did you learn of any af-
firmative actions on his part to enhance the prospect of an increase in
milk support?
Mr. BuTTERBRODT. I bclicve he had his name — no, I don't know if
he did have his name on one of the bills. In fact, I don't think he did
have his name on one, I really don't know. Did he have it on ?
jNIr. Greex. If you don't know, you don't know.
]Mr. Saxders. Are you aware of any efforts on his part to persuade
members of the administration to support an increase?
iNIr. BuTTERBRODT. No, I'm not aware, although he may have, but
I'm not aware.
Mr. Saxders. Was the $25,000 allocation to him from CTAPE re-
lated to his attitude toward the price-support level in 1971 and any
efforts on his part ?
Mr. BuTTERBRODT. No. That would not have any bearing on it.
Mr. Saxders. You stated earlier that you regarded Congressman
Mills as a friend of the dairy industry. Such a characterization is a
composite of his many postures on various laws and regulations affect-
ing the dairy industry, is it not ?
Mr. BuTTERBRODT. Yes.
Mr. Sax^ders. Including dairy imports?
Mr. BuTTERBRODT. YcS.
ISIr. Saxders. Would it not include the milk price-support level to be
fixed each year?
Mr. Greex. Well, I think the question is starting to get argumenta-
tive with the witness because he has indicated that it's on a variety of
factors. He has not been asked to define what he means by "friend." It
might be more instructive to ask him that, if that's the purpose of the
inquiry. But I don't think that — I think he's given his answer basically
to the line of questioning.
Go ahead and rephrase it and he'll try to answer it to the best of his
ability.
7662
Mr. Sanders. I giiess it boils down to this : Are you saying, Mr. But-
terbrodt, that the support of Congressman Mills for an increase in the
price level for milk in 1971, does not enter into your characterization of
him as a friend of the dairy industry ?
Mr. BuTTERBRODT. I'd answer by saying it could, but I'm not aware
of what his activities were in 1971, only that they were favorable to the
dairy industry.
Really, when I say "a friend of the industry," I recall that there's
times that we've talked to him about, you know, what legislation we
could look to get passed that would be favorable to the industr5\
The farm bill, for example, could we get it passed, how do you get
it passed. He'll sit down and tell us, you know, what the prospects are.
I recall that he spoke at the World Dairy Expo meeting of dairy
farmers at Madison, Wis., on one occasion so that he has, you know,
over the years supported the dairy industry and been a friend to the
industry.
Mr. Sanders. During February and March of 1971, did you have
any personal contacts with any Senators or Congressmen concerning
the milk price — support of it ?
Mr. BuTiT.RBRODT. I belicve I talked to Congressman Kastenmeier,
Senator Proxmire. and Nelson; I believe I talked to Congi'essman
Thomson and perhaps one or two other Congressmen. I believe I
talked to Congressman Obey, and there might have been a few others
from Wisconsin that I talked to at that time.
INIr. Sanders. Did these Congressmen and Senators take any affirma-
tive actions in response to your contacts ?
Mr. BiTTERBRODT. I belie ve in most cases they were already on record
as supporting the bill to increase the amount that the price support
should be set at.
Mr. Sanders. What purpose did your contact serve ?
Mr. BuTTERBRODT. I really called on them to, vou know, find out if
they would or if they had supported, if they had talked to other Con-
gressmen or Senators about supporting it and, you know, what we
should do to try to get such a bill passed. And who we ought to talk
to, advice perhaps.
Mr. Sanders. Between 1968 and 1972, did you learn of any deci-
sion on the part of the AMPI management to support one or more
Democratic candidates for the Presidency?
Mr. BuTTERBRODT. Between when?
Mr. Sanders. 1968 and 1972.
Mr. BuTTERBRODT. I dou't bclieve so, no. Candidates for President,
you say ?
Mr. Sanders. Democratic candidates for the Presidency.
Mr. BuTTERBRODT. No.
Mr. Sanders. Did you ever learn that it was a determination of the
top management to give Senator Muskie as much support as possible?
Mr, BuTTERBRODT. lu 1968 ?
Mr. Sanders. No, no. I'm talking about between 1968 and 1972,
sometime in 1969. 1970 and 1971 ?
Mr. BuTTERBRODT. No. I dou't recall anything about Muskie.
Mr. Sanders. Or Senator Humphrey?
INIr. BuTTERBRODT. There was no — you Icnow, to my knowledge, there
was none, no.
7663
Mr, Sanders. Did you, at any time, become aware of any AMPI
board authority, express authority, for the use of AMPI corporate
funds for political candiates ?
Mr. BuTTERBRODT. Givc me that again ?
Mr. Sanders. Did you ever learn of any AMPI board authoriza-
tion for the use of AMPI corporate funds to be given to political
candidates for their benefit?
]Mr. Butterbrodt. No.
Mr. Sanders. There was never any formal action taken by the board
to endorse the use of corporate funds for such purposes ?
Mr. Butterbrodt. No, not that I'm aware of.
Mr. Sanders. Would you say that there was also never any implicit
authority of the board, that is the board never took any action, which
would implicitly authorize the management to use corporate funds for
political candidates ?
Mr. Butterbrodt. No.
Mr. Sanders. So that any expenditures by any officials of AMPI
of corporate funds, for the benefit of the political candidates, would
be totally unauthorized by the board ?
Mr. Butterbrodt. That's right.
]Mr. Sanders. Aside from the recent request of Mr. Heininger to
Mr. Parkinson, are you aAvare of any demands for reimbursement of
any other political contributions?
Mr. Butterbrodt. No, I don't think so.
Mr. Sanders. Has the board instructed its attorneys or management
to seek reimbursement of any other
]Mr. Butterbrodt. The board appointed a committee at the last
board meeting after receiving the Ed Wright report — a committee
of four people, one of Avhich I serve, to talk to our inhouse counsel
and legal firms, that are presently employed by AMPI, to recommend
to the corporate board at the next meeting as to possibilities, feasi-
bilities of recovery of funds.
]\[i'. Sanders. Until you read the T.'right report, were you aware of
AMPI corporate payments to Valentine, Sherman?
Mt-. Bi'tterbrodt. I believe the name Valentine, Sherman showed
up on our financial statement, but I was not aware of what they were
for, wliore they were going, until I saw the Ed Wright report.
]Mr. Sanders. Until reading the Wright report, you had no knowl-
edge that any payments to Valentine, Sherman were for the use or
benefit of the Presidential campaign of Senator Humphrey?
Mr. Butterbrodt. No.
Mr. Green. I don't know that that characterization is absolutely
con-ect as to what benefit — I think it's academic.
]Mr. Weitz. That's the ([uestion. If it's inaccurate and the witness
knows nothing about it — I mean says he doesn't know anything about
that question, then the record is complete, I think.
I'm not saying I dispute the characterization.
Mr. Sanders. According to the Wright report, in October of 1971
there was a cooperative rally in Ames, Iowa, and the report goes on
to explain that AMPI, with corporate funds, paid much of the ex-
pense of that event and that Congressman Mills addressed a rally
there. Were you present at that event?
Mr. Butterbrodt. No, sir.
7664
J^Ir. Sanders. Did you know in advance of the event to be held?
Mr. BuTTERBRODT. Ybs, sir.
Mr. Sanders. Was it discussed at a board meeting?
Mr. BuTTERBRODT. No, sir.
Mr. Sanders. How did you learn of it ?
Mr. BuTTERBRODT. I learned by phone call and I'm not sure just
where the first call — I believe Kieffer Howard — I guess if I backed
up I'd say I was attending a meeting when one of the executive board
members asked me what the executive board was being called to a
meeting for, and I said I was unaware that a meeting was called. And
thev indicated that they were told to be at a meeting, and I said I
dicfn't know anything about it or what it was for. And then through
subsequent phone calls, Kieffer Howard called and indicated that
he had instructions or wanted to get the executive board of AMPI
together, and I told him I didn't see why or for what, you know,
purpose. And he indicated that they were talking about having a
rally in Iowa that would be bigger than what our annual meeting
was. And the purpose of the meeting was to expound on the cheap-
food policy that the administration was on. And knowing that we
were having financial problems and costs were excessive, I indicated
that I didn't think we should have — get involved in that kind of a
rally.
And consequently, Dave Parr called me and indicated that we
should have, you know, a rally in Iowa of farmers, not only dairy
farmers but all farmers, to expound on the cheap food policy.
Again, I objected to any conference or meeting of that kind or
magnitude. And we got into a very heated telephone conversation
over it, to the point that I told Dave I w^ould not call, you know, a
meeting of the executive board. In fact, we were supposed to meet
here in Washington to invite Consrressman Mills to speak at that rally,
one of the speakers, and meet with the Iowa co-op people about set-
ting this rally up.
And again, I objected to the meeting and I told him that I would
not call the executive board together until I talked to Harold Nelson,
which, in those days, if I talked to Harold once a month — between
board meetings is all I've ever talked to Harold. I didn't hear from
Harold Nelson and Ave were scheduled to leave for Washington like
on — I don't know what date, but let's assume it was a Thursday, that
the executive board was to go out on Thursday to have a meeting the
following day with Congressman Mills. And I of course indicated
to some of the executive board members that I wasn't going to call
the meeting and they weren't to go.
So on the morning of this particular day they called me from
Minnesota and said, "Look, if we're going out there I have to leave
by noon in orcler to f^et out to Washington tonight, if we're going to
have the meetincr tomorrow." And so I called one of the girls who
takes care of settinir up meetings and so forth, and told her to notify
the executive board that I was going to have the meeting in Chicago
that night. And so she called some of the various board members
and as soon as she called Dwight Morris, Dwight got Dave Parr,
and they're very close friends, and indicated that I was calling the
executive board into Chicago that night. And within an hour or two
7665
Harold Xelson did call me and indicated why I called the meeting
in Chicago and I said I was going to have a Chicago meeting to de-
cide whethei' we were going to go to Washington.
And we did have the executive board meeting in Chicago that night
at which time Harold and Dave, after first meeting with me, explained
to the executive board, and I agree^d in our meeting Avith them, I believe
it's strictly up to the executive board if they voted in favor of going to
Washington and asking INIills to apeak, and so on, why, I'd go along
with it.
And so they explained to the executive board the reason for me hav-
ing a meeting in Iowa on the cheap food policy and the board voted
in favor of it. They indicated it would be a small gathering. And they
came out here and we met with the Iowa co-op people, Mid-Am, DI,
Dairymen Inc., were represented here in "Washington. We did meet
with Chairman ISIills. The invitation Avas extended to him to be the
principal speiaker with the understanding that it would be nonpartisan.
Republican and Democrats alike would be there. And the primary
intent given to the board people was that we had to expound on the
cheap-food policy of the present administration and get that story
told to the consumers.
And that was the reason or philosophy used to sell it to the A-^rious
board members. And they 'went ahead and had the rally. I was opposed
to it from the start. I always had been opposed to it. But in my posi-
tion, if the board or executive board votes for a xerogram, I go along
with it and put it on, or do not put obstacles in the road.
INIr. Sanders. Were you opposed to it solely on the basis of the cost
toAMPI?
Mr. BuTTERBRODT. Ycs ; we had just come off an annual meeting of
40,000 people in September. This was — I don't know if I've got my
dates right — 1971. What year was the rally ?
j\Ir. Sanders. October 1971.
Mr. BuTTERBRODT. It was a cost factor.
Mr. Sanders. Have you noticed in the Wright report the mention
that Congressman Mills called Mr. Pepper in Iowa and offered to speak
at the rally ?
Mr. BuTTERBRODT. I douit recall that from reading the Ed Wright
report.
Mr. Sanders. It's so stated in the Wright report and I'm just won-
dering if you knew of that at the time ?
Mr. Bitterbrodt. No, I didn't. I thought we came to Washington —
as least we presented a formal request. We met here in Washington,
kind of a group, there was the Iowa co-op, INIid-America, DI, our-
selves. It was a joint venture, not any one group, and again the theme
Avas the cheap- food policy.
Mr. Sanders. But your executive meeting was after the annual
meeting ?
Mr. BuTTERBRODT. Ycs ; I'm sure it was. It was the night before — yes,
I'm sure it was. I think it was.
Mr. Sanders. Was it at or about the same time ?
Mr. BuTTERBRODT. It could have been a month later — it would have
had to have been shortly after our annual meeting.
Mr. Sanders. Shortly after the annual meeting?
Mr. BuTTERBRODT. It would have had to have been.
7666
Mr. Sanders. Did you ever discern that Parr's motive in wanting to
hold the event in Ames was to advance the Presidential candidacy of
Congressman Mills?
Mr. BuTTERBRODT. I don't know if that was really his idterior motive.
While it mig'ht have been a part of liis motive, I>ave was also inter-
ested— and I say this with a dislike for Dave Parr — Dave also had a.
.you know, motive for betterment of the dairy farmer as well as all
farmers. And Dave was very energetic and spent a great deal of time
and effort for the good of fanners.
And so, even in my dislike for Dave Pairr today, as it was then, we
were never what I would say, good friends — I hold Dave very high
in his efforts to improve the farmer, dairy farmer and other farmers'
situations and income.
Mr. Sanders. After the Ames rally, was it reported to you that it
had served its intended purpose ?
Mr. BuTTERBRODT. I don't believe so. I don't know if, for the record.
it^s known that Wilbur ]Mills left the Ames, Iowa meeting and came
up to Madison, Wis., where the World Dairy Expo was in session, and
he spoke at that conference. I was in attendance at that conference.
And so he spoke at both of them that particular day. both interests
being farmers. But I don't believe anybody said, you know, any real
intent.
There was a further movement to try and hold more sessions like
that, not with Chairman INIills as the speaker, but rallies of producers.
Again, I objected on the grounds of financial costs, the burden to the
organization.
Mr. Sanders. One might reasonably, I think, conclude from the
Wright report that it states or infers that the purpose of the Ames
rally was to enhance the Presidential candidacy of Congressman Mills.
Did you ever assess it in that way ?
Mr. BuTTERBRODT. I dou't bclievc so, no. It was a nonpar'tisan meet-
ing. I believe there were Republican Senators there, too. And while
there was no question. I suppose anytime you have a conference or
rally, somebody could benefit personally from it. But that, I don't
believe was ever, you know, put out as the reason or means. That isn't
why they had the session or proposed the session.
Mr. Sanders. Prior to the issuance — or the board's receipt of the
Wright report, had you ever heard of the firm of Lennen and Newell
in New York?
Mr. BuTTERBRODT. No, I dou't recall, even since the Ed Wright
report.
Mr. Sanders. It's in there.
Mr. BuTTERBRODT. I'vc Only read the Ed Wright report once, anc
that's when we went throug'h it at the board meeting. I have not har
a chance to go back tlirough it to digest what's in it. But the name
does not ring a bell even now.
Mr. Sanders. Aside from the name of the firm, were you ever, prior
to the issuance of the report, aAvare that AMPI had delivered funds
to a New York advertising agency for the benefit of an account of the
Humphrey campaign with that finn ?
Mr. BuTTERBRODT. No.
Mr. Sanders. Befoie the board's i-ecoipt of the Wright leport, had
you known of a firm in Memphis named AYalker Associates?
Mr. BuTTERBRODT. No, sir.
7667
Mr. Sanders. Or Deloss Walker i
Mr. BUTTERBRODT. No.
Mr. Sanders. And similarly, had you known of a Mr. Warren Bass
in Little Rock?
Mr. BuTTERBRODT. No, sir.
Mr. Sanders. Had you known before the issuance of the report, that
Joe Johnson, while still on the AMPI payroll, worked for the Presi-
dential campaio;n of Congressman INIills?
Mr. Butterbrodt. Yes, sir.
Mr. Sandees. Did you know that Betty Clements did so?
Mr. Butterbrodt. No.
Mr. Sanders. Or Teri*y Shea ?
Mr. BuTTERBfRODT. No.
Mr. Sanders. What is it you know about Joe Johnson's activity in
behalf of Congressman Mills ?
Mr. BtiTTERBKODT. Joc Johusou was one of the few employees of
AMPI at the time we changed management in January 1972, that
called and asked to have an appointment with Dr. Mehren and myself.
He came in one afternoon and indicated to us that he was basically a
front man, tliat he was spending virtually all his time as an employee
on the campaign activities of Chairman Mills. He indicated in that
capacity he had expenses in travel, expenses in setting up meetings,
holding meetings, that he covered on liis expense accomit.
He indicated that he had apartments here in Washington that were
leased by him, that he put on his expense account and was reimbursed
by AMPI.
Dr. Mehren asked him — questioned somewhat to the effect, "Jo©, do
you know that this is illegal, to be doing it — involved in this kind
of activity?"
His answer was somewhat to the effect, "Yes, that's exactly Avhy
I came in and asked to talk to you and John, because you've publicly
declared you're going to run a clean ship, an aboveboard type of opera-
tion, and I do not want to go to the end of the month and find that
I have commitments on my expense account that you will not honor."
We did not go into detail as in the Ed Wright repoit, you know,
other employees that he knew about or was covering for, but indicateid
to him that he'd have to take a vacation starting the next day, take a
week's vacation, at which time he'd have to make up his mind whether
he wanted to go to work for AMPI on legitimate business, or whether
he wanted to remain with the Mills campaign. He'd have to eiither take
a 6-months leave of absence or work out some other arrangement, leave.
AMPI to go to work for Mills on a full-time basis.
I recall — remember very vividly that just before the meeting broke
up, Joe turned to me and said, "John, my expense accounts are quite
sizable because of the apartments and other travel relations, and will
you honor — what about my expenses to this point ?"
And again — of course, I put this in the same category Avith Stu Rus-
sell, it was a commitment by former management telling him this is
how^ they operated, this is what they did. I said, "Joe, we will honor
your expense account, what you have to this point. I will not have an
employee get caught with expenses that someone else committed you to.
And so we wnll honor your expense account this month, but there wall
be no more of it."
7668
Again, we related this to Mr. Grossman, what we knew of the Joe
Johnson activities and asked the question, "Do we have an obligation
to report — investigate further, et cetera." And our advice again was
that it was not our obligation to investigate or report what we had, but
to inin a clean ship and make sure that it didn't happen again.
And so, while there was a great deal of concern about the Stu
Russell matter, I put the Joe Johnson action in the same category and
said it was a commitment of former management. We were not aware
of it until after we changed management and after we found out about
it, we cut it out and there was no more of that. But we did honor those
commitments made by former managements, even if there was a ques-
tion of legality.
Mr. Sanders. Did Johnson give you an understanding of the period
of time for which he had been working for Congi-essman INfills?
Mr. BuTTERBRODT. No. I clou't recall that he did. At that particular
time, as I recall, he was basically full time for ^lills. I don't know if
he had other activities — you know, AISIPI activities or not.
Mr. Saxders. In your terminology, he said he was a front man. Is
that a word that he used or is this an interpretation ?
Mr. BuTTERBROET. That's my word.
Mr. Sanders. Do you mean advance man ?
Mr. Butterbrodt. He, as I understood — and asrain, we did not go
into detail as to exactly what he was doing other than he was spending
his time for Mills' campaign, but I viewed it as the type of indi\ndnal
that went out and set up meetings, arranged to have a place for the
Congressman to speak, get a room, talk to the party, in that area,
et cetera.
Mr. Sanders. Did he sav who at AMPI had authorized him to do
this?
Mr. Btttterbrodt. Again, I couldn't be sure today. At that point
I would have assumed it was Harold Xelson. Now whether he indi-
cated that or whether it was — ^it's a strong feeling that it would have
to be Harold Nelson, because Harold Nelson was the .q:eneral manager.
Mr. Sanders. Was Joe Johnson responsible directly to Nelson? He
was the north Texas division manager, was he not. at that time?
Mr. Butterbrodt. I don't know what his real title — position was —
but in fact, all employees report and are obligated directly to the gen-
eral manager. They may report to someone else. But their obligation
is really to the general manager.
Mr. Sanders. At that point in time, to your knowledge, did Dave
Parr have any control over responsibilities to be performed by John-
son?
Mr. Butterbrodt. He could have, but again, I am not sure under
Harold Nelson or who had control OA-er who or reported to who.
Mr. SvNDERS. Did Johnson give you any understanding as to
whether any ofRcialfs in the Mills campaign were aware of AMPI's
payments of tlie salaries and expenses?
Mr. Butterbrodt. I don't know if Joe Johnson, you know, told us
who was tiware or what. I really dont know other than I do know
he eventually — I believe, and t he record should show — ^but to my knowl-
edge he took a 6-months leav^^ of absence from AlSiPI, and then did
not renew it, but went full time to work for Chairman Mills.
7669
Mr. Green. Can I inquire off the record how long you fellows are
goin^ to go ?
[Discussion off the record.]
iVIr. Sanders. When you were given this explanation by Joe John-
son. 3'ou were with Dr. Mehren ?
Mr. BuTTERBRODT. Ycs, sir.
Mr, Sanders, Was this in the AMPI offices ?
Mr, Butterbrodt, Yes, sir.
Mr. Sanders. And it was veiy soon after Dr. Mehren became general
manager ?
Mr. Butterbrodt. Yes, sir.
Mr. Sanders. Were you ever given a report as to the total amount —
the total cost of Johnson's expenses and salaries?
Mr. Butterbrodt, Xo, sir. Not until the Ed Wright report,
Mr. Sanders, In 1970, Bob Lilly made two deliveries of funds to
the Humphrey campaign. One was a $10,000 check and one later in the
year was $12,500 cash, which went to Jack Chestnut, his campaign
manager. Were you contemporaneously aware of either of those cam-
paign contributions ?
Mr, Butterbrodt. No. sir.
Mr. Sanders. Did you thereafter learn of them before the issuance
of the Wright report ?
IVIr. Butterbrodt. No, sir,
Mr, Sanders. In the Wright report there is mention of, in Novem-
ber of 1968, a $31,000 check cashed by Joe Nigrelle for Harold Nelson,
Were you contemporaneously aware of that transaction ?
Mr. Butterbrodt. No, sir.
Mr. Sanders. Do you, even to this day, know what happened to
those funds?
Mr. Butterbrodt. No, sir.
Mr. Sanders. Have you asked for any investigation of that?
Mr. Butterbrodt. No, sir. Our committee has only met once and
we have not got into it.
Mr. Sanders. In 1971. according to Lilly, he delivered $5,000 to
Norma Kirk in Little Rock, which money then went to Parr for the
Mills campaign, and this money Avas generated by a loan Lilly made
and was repaid by means of moneys received from conduit attorneys.
Were you contemporaneously aware of that?
Mr. Butterbrodt. No. sir.
Mr. Sanders, When did you first learn of it?
Mr. Butterbrodt. Is it in the Ed Wright report?
Mr. Sanders, Yes,
Mr, Butterbrodt, I'm not familiar with it even now. That would
be the first I'd know about it. I'm not aware of it right now even,
Mr, Sanders, Other than payments from TAPE or CTAPE, have
you ever authorized any funds to be given to the 1972 Presidential
campaign of Senator Humphrey?
Mr. Butterbrodt. No.
Mr. Sanders. Or to Congressman Mills?
Mr. Butterbrodt, No.
Mr. Sanders. Or to Senator Muskie ?
Mr. Butterbrodt. No.
7670
Mt. Sanders. Have you approved any such contributions after the
fact?
Mr. BUTTERBRODT. No.
Mr. Sanders. Or do you have knowledge of any to those three men
or to their campaigns, rather, aside from any that you've read in the
Wright report or what I have mentioned to you today ?
Mr. BuTTERBRODT. No, sir.
Mr. Sanders. In October of 1972, contributions were made to the
Democratic House and Senate campaign committees as well as to the
Republican committees. Do >ou recall — excuse me. You've already tes-
tified that there was a meeting in early October where it was decided
that there would be a balancing of contributions. Was that for the
year, did you say, or for what period of time ?
Mr. BuTTERBRODT. For the year. TAPE operates on a calendar year,
the idea being that because after election there would be very few
contributions and the idea being that we would balance at the time
or before the election period, so that it would balance at the end of
December.
Mr. Sanders. Do you have any recollection of any discussion at
the committee meeting in October for the earmarking of any funds to
be given to the Democratic House and Senate committees?
Mr. BuTTERBRODT. No.
Mr. Sanders. To your knowledge, was there any earmarking?
Mr. BuTTERBRODT. Not that I recall, and yet I believe, in the con-
versation this last weekend, Dr. Mehren mentioned that there was
a $2,500 earmark, or they talk about $2,500 going to somebody, but
I don't recall who or why.
Mr. Sanders. Do you recall any discussion in the committee meet-
ing of control to be exercised over the disposition of those funds by
any Congressmen or Senators, other than those who operated the
committees ?
Mr. BuTTERBRODT. I belicve Mel Besemer indicated something about
that money going to the Democratic committees, that someone ought
to talk to Humphrey or Mills about having them talk to the com-
mittee about where it could be best used or how it could be best used
Mr. Sanders. Was any action taken on that suggestion?
Mr. BuTTERBRODT. I really don't know.
Mr. Sanders. Was Lilly present at that meeting?
Mr. BuTTERBRODT. I bclieve so. The records should show. That was
a TAPE committee meeting and I believe he would have been there,
but I'm not positive.
Mr. Sanders. ^^Hio would you logically expect to be the one to
follow through on any suggestions made by members of the com-
mittee ?
Mr. BuTTERBRODT. Bob Lilly.
Mr. Sanders. During the committee meeting, do you have any recol-
lection of a discussion that funds given to the Democratic Hoiise and
Senate committees would pass through for the benefit of either the
Democratic Xational Committee or the Democratic Presidential
candidate ?
Mr. BuTTERBRODT. N'o, I dou't think there was any discussion like
that.
Mr._ Sanders. Did you subsequently learn of any passthrough
intention?
7671
Mr. BUTTERBRODT. No.
Mr. Sanders. Or that any passthroiigh occurred ?
Mr. BuTTERBRODT. No.
Mr. Sanders. Was there any discussion at the meeting of any money
passing through the Republican House or Senate committees for the
benefit of the Republican National Committee or the reelection of the
President ?
Mr. BuTTERBRODT. No.
Mr. Sanders. Did you subsequently learn of any ?
Mr. Bxjtterbrodt. No.
Mr. Sanders. Are you personally acquainted with Senator
Humphrey ?
Mr. BuTTERBRODT. Ycs.
Mr. Sanders. Are you personally acquainted with Jack Chestnut ?
Mr. BuTTERBRODT. No.
Mr. Sanders. Have you ever met him ?
Mr. BuTTERBRODT. I dou't bclievc so.
Mr. Sanders. Have you ever talked with him ?
Mr. BuTTERBRODT. I dou't believe so.
Mr. Sanders. Have you ever visited at Senator Humphrey's home
in Waverly ?
Mr. BuTTERBRODT. No.
Mr. Sanders. Or at the — what is it — Macalester College when he
was in residence there ?
Mr. BuTTERBRODT. No.
Mr. Sanders. Were you ever informed by Mehren or Nelson or Parr
that they had visited at any of Senator Humphrey's homes?
Mr. BuTTERBRODT. No.
Mr. Sanders. Did Senator Humphrey, during the Presidential cam-
paign, make any solicitation of you for a contribution from TAPE or
CTAPE ?
Mr. BuTTERBRODT. No.
Mr. Sanders. Or any of his Presidential officials ?
Mr. BuTTERBRODT. No.
Mr. Sanders. Were you advised by anyone else in the AMPI orga-
nization that the Humphrey campaign had made any solicitation?
Mr. BuTTERBRODT. I'm sure, again, that Mel Besemer from Minne-
sota, at various times, you know, asked for funds or has brought up
the subject of money for Humphrey, and I'm aware that the com-
mittee at various occasions — we approved — I as part of the committee
approved funds for Humphrey.
Mr. Sanders. With respect to TAPE, was it your understanding —
let me put it this wav. Who had practical authority to authorize dis-
bursements from TAPE ?
Mr. BuTTERBRODT. Bob Isham.
Mr. Sanders. Isham sianed the checks. Do you think that Isham had
the autliority to make the decisions as to who would be the payee on
the check?
Mr. BuTTERBRODT. That was the impression given to the board at
various times on the questioning that TAPE was a trust, there was
onlv one trustee. Bob Isham had tlie final decision as to who got money
and wlio didn't get money, or wlio he wrote the checks to, but that
Harold Nelson and Dave Parr, if they made recommendations, he
would honor them or pay those.
7672
There's no question Bob Isham worked for Harold Nelson, and so
any time Harold Nelson went and asked for a check, he would have
issued it.
Mr. Sanders. Did you conceive that anyone besides Nelson or
Parr — let me put it this way : That Isham would have acceded to a
reouest for funds from anyone besides Nelson or Parr?
Mr. BuTTEKBRODT. I believc, yes, if I or any regional president, or
maybe any corporate board member asked Isham for funds, if Isham
thought it was, say, a good cause or proper, he Avould have wrote the
check.
Mr. Sanders. Do you think he would not have checked with Harold
Nelson ?
Mr. BuTTERBRODT. I dou't bcUeve so, no.
Mr. Sanders. Regardless of the amount ?
Mr. Butterbrodt. There was a limit on amounts. I don't think
Mr, Sanders. What was the limit ?
Mr. Butterbrodt. $5,000.
Mr. Sanders. Do you mean for a sum in excess of $5,000, he would
have checked with Nelson? There could be no expenditure
Mr. BuTi'ERBRODT. As I Understand the law, there could be no
expenditure over $5,000 to any one candidate.
Mr. Sanders. That is unless it's broken down into various committees.
Mr. Green. Are you asking for a legal conclusion or what?
Mr. Sanders. No, I'm asking for his understanding.
Mr. Butterbrodt. jNIy understanding was $5,000 to any one candi-
date, period.
Mr. Sanders. Thank you.
I have no further questions.
Mr. Weitz. Mr. Butterbrodt, in the Wright report that we referred
to a number of times today, 021 page 152, there is a recitation, a sum-
mary of an interview between Mr. Wright's firm and yourself with
respect to the Dwight Morris conversation, and the last paragraph
on page 152 begins with the following sentence: "Mr. Butterbrodt said
he recalled the visit with Mr. Morris and acknowledged that there was
no doubt a discussion of possible milk contributions for Republican
causes as being 'hot' in view of the publicity that had broken on the
ITT contributions."
And it goes on to say that you denied having ever traveled to Cali-
fornia or Washington and met with Mr. Kalmbach.
With respect to the sentence I just read, Avould you tell us whether
that's a fair sunnnary of what you told Mr. Wright's firm ?
Mr. Buttterbrodt. No. In regard to the Ed Wright rei:)ort on that
issue, you would have to understand that I called Ed Wright at his
home on a Sunday afternoon and, after a conference on other issues,
Mr. Wright said to me. "John, this will perhaps save me a phone call
tomorrow to you," And he said, he indicated that one of his partners,
Gus Walton, had talked to Dwight ]Morris.
Mr. Wright indicated to me that he did not have Dwight Morris'
statement or the facts of what he said in front of him at the time. And
he said, "I can only go from memory, from what I know about the
Dwight Morris statement."
And he indicated to me that Dwight had indicated I was to
Washington and that I had been to California. And then he indicated
that, he asked if it were possible that I talked to Dwight ]Morris about
contributions.
7673
And my answer to him was, "Yes, it was possible I might have talked
to him. I don't recall that I did."
And because he did not have Dwight ]\Iorris' statement there, or
I did not know what he really had said or charged, my answer to him,
kind of in a laughing way, is, I don't know how he can say that,
because I wasn't to Washington and I wasn't to California. I've never
met Kalmbach. So how could somebody be saying I was there, that
I met with these people and dealt with them, and then talk about a
fixed contribution or amount.
And so the answer there is partially two reasons. One, Mr. Wright
did not tell me the exact substance of what Dwight was saying. He was
operating from memory at his home on Sunday afternoon. I didn't
know exactly what the charge was that I was i-eally answering him at
the time. But to my recollection, I did not talk to Dwight Morris about
contributions, those issues.
Mr. Weitz. You're saying that Mr. AYria:ht's. or his firm's summary
of their conversation with you to the extent that you, according to
them, acknowledged that there was no doubt a discussion of milk
contributions for Republican causes, and they were "hot" in view of
the ITT publicity, you're saying that some or all of that is incorrect ?
Mr. BuTTERBRODT. I'm saying that part of it
Mr. Weitz. I'm just asking about that part. As I indicated, they do
go on to say that you clearly denied meeting with Kalmbach or travel-
ing to California.
]\Ir. BuTTERBRODT. I dou't belicve that's quite correct. He apparently
asked me about, you know, the contributions, did I talk to Dwight
JNIorris about it, and my answer was, again, that I possibly could have
talked to him, I possibly could have said that, but I don't recall.
Mr. Weitz. So, in other words, the statement that there was no doubt
a discussion of possible milk contributions for Republican causes was
discussed, that would be inaccurate?
Mr, BuTTERBRODT. Right.
Mr. Weitz. Aiid could you explain why in their summarv — in their
report they say that you explained that there was no doubt a discus-
sion of such contributions as being "hot" in view of the ITT publicity ?
Could you explain that ?
Mr. BuTTERBRODT. Again, Ed Wright was working from memory
and as he recalled over the phone, he mentioned that Dwight indi-
cated something to the effect that we had discussed the contributions
and the fact that they were "hot'' because of ITT. Those are kind of
his words to me over the phone.
And I indicated to him it's possible, but I don't recall talking to
Dwight Morris about it, that issue or those issues in that context.
Mr. Weitz. But it is possible? I mean, that's your testimony today
also ?
Mr. BuTTERBRODT. That's right. It's possible, but I don't recall talk-
ing; to Dwigfht Aforris about it at all.
Mr. Weitz. Mr. Sandere ?
Mr. Sanders. No, thank you.
Mr. Weitz. I have no further questions.
Thank you, Mr. Butterbrodt.
[Whereupon, at 6 :?>5 p.m., the hearing in the above-entitled matter
was adjourned.]
30-337 O - 74 - Dt. 17
WASHINGTON.
?O2-709
7674
BUTTERBRODT EXHIBIT NO. 1
MA^T.R.IIROWN 8: IM.ATT
231 SOUTH LA SALLE STREET
CHICAGO, ILLINOIS 6060A
312 - Tea - 0600
TCLCX 2S37eO
CAPLC LCMAY
January 21, 197^
Kenneth Parkinson, Esq.
1828 L Street, N.W.
Washington, D.C. 20036
Dear Mr. Parkinson:
This confirms our telephone conversation of January
15j IST'^^- with respect to a political contribution in the
amount of $100,000 to the Coniraittee to Re-Elect the
President, your client, from the corporate funds of our
client. Associated Milk Producers, Inc. (AMPI). You reported
that the Coramittee does not recognize any legal obligation
to return corporate fiinds or other illegal contributions,
but that it has taken the ethical position that it does not
wish to retain any contributions made in violation of law.
We do not intend to argue the merits of the Committee's
legal, obligation at this time. However, we do appreciate
the good faith expressed by the Committee in its polity
of returning contributions which originated from illegal
sources. We also understand from you that Committee con- -
sideration for refunds is based on the facts of each case.
AMPI is a milk marketing cooperative incorporated under
the laws of Kansas, wi^h approximately 40,000 dairy farmer-
members located in l4 states in the midwest from Minnesota
through Texas. In early I969 the Trust for Agricultural
Political Education (TAPE) was established to permit farmer-
members of AiAPl to make contributions for political purposes
as permitted under I8 U.S.C.A. § 6IO. TAPE in 1971 did make
substantial lawful contributions to a number of committees
which may have found their way to the Committee to Re-Elect
and we have no problem with what appear to be lawful contri-
butions. However, there is at least one exception, a
7675
contribution in the amount of $5,000 given to the People
United for Good Government. We understand that this money
ultimately wound up in the heinds of the Ellsberg burglars,
but we have no information at this time which links this
in any way to the Committee to Re-Elect,
The rather complicated factual recitation which
follows establishes an unlawful contribution from AMPI
funds and, accordingly, we would like the Committee to re-
turn the $100,000 to AMPI on a voluntary basis.
On August 1, 1969 Mr. Bob A. LilJ-y, an employee of
AWPI, obtained $100,000 in cash from the Citizens National
Bank in Austin, Texas. Mr. JaJte Jacobsen, active in Democrats
for Nixon, was the dominant figure in that bank. Mr. Lilly
delivered the $100,000 to Mr, Milton Semer, a law partner
of Mr. Jacobsen, at the Dallas airport. Mr. Semer in turn
delivered the $100,000 to Mr. Herbert W. Kalmbach in Los
Angeles. According to the recent White House White Paper
press release of January 8, 197^:
"In August of 1969, an attorney for AMPI delivered
to Mr. Herbert Kalmbach the sum of $100,000. Mr.
Kalmbach deposited the funds in a Trustee account
he maintained at the Security Pacific National Bank
in Newport Beach, California. The account contained
political contributions remaining from the 1968
election campaign."
From the attached excerpt from'tlie 'Watergate Senate
investigation, pp. 1229 and 1230, it appears that these funds,
including the $100,000 delivered to Mr. Kalmbach, ultimately
found their way to the Committee to Re-Elect the President.
Notice the reference to paying expenses of 1701. You should
be able to readily determine this from Committee to Re-Elect
records or Mr. Kalmbach.
The original $100,000 was charged to a TAPE bank
account. It appears that Vjr . Robert 0. Isham, the former
Controller of AMPI, became aware of the requirements of the
Note. --The above referred-to excerpt has been previously printed in
Book 3 as Exhibit 34-26 and is not reprinted herewith.
7676
then existing l8 U.S.C.A. § 6o8 which limited contributions
to $5,000 and if $100,000 were to be reported, it would be
a clear violation of the statute. However, the money had
already been delivered.
Harold S. Nelson, the former General Manager and Mr.
Isham, the former Controller of AMPI, implemented a plan to
pay back the $100,000 out of corporate funds in an attempt
to avoid the problem. The first step was to have Mr. Lilly
borrow xinder his own name $100,000 from the Citirens National
Bank, which he did on December 17, I969. , The proceeds were
used to replace the $100,000 taken f rom^' TAPE funds which had
been given to Mr. Kalmbach in August of 1969. Lawyers and
public relation consultants retained by AMPI were asked to
remit amounts to Mr. Lilly and these amounts were used by
Mr. Lilly to repay the December 17, I969 loam to the Citizens
National Bank. Arrangements were made to increase the fees
that were billed to AMPI to cover funds which were transmitted
to Mr. Lilly. In addition, AMPI made commitments and addi-
tional amounts were paid to take care of the income tajc
consequences of the added income to at least one of the
attorneys involved. By the end of I97I the $100,000 Lilly
loan had been repaid and what started out to be a TAPE contri-
bution was converted to a contribution out of corporate funds.
This has been rather fully explored in the depositions
of Mr. Stuart H. Russell, one of the attorneys, which was
taken in United States v. AMPI and related cases, and Mr.
Jacobsen, whose deposition was taken in Nader v. Butz. Mr.
Lilly and Mr. Isham have been granted immunity by both the
Watergate Grand Jury and the Senate Committee and also will '
confirm the facts set forth above. Mr. Nelson was replaced
as General Manager of AMPI as of January 12, 1972. The new
General Manager, Dr. George L. Mehren, was not involved in
these transactions, nor was the Board of AMPI informed of
them.
If you require more information, let us know. Needless
to say, both the Committee to Re -Elect and AMPI have sufficient
7677
litigation and other problems in these troubled times without
adding another one. I hope the Committee will find its way-
clear to refiind the $100,003 quickly. Please let me know when
we may expect an answer to our request.
Sincerely yours,
E. C. Heininger /
/•
ECH/dt
Enclosure
Ralph E. Hartraan, Esq.
Edward L. V7right, Esq.
Dr. George L. Mehren
Alan Weitz, Esq.
Jon Sale, Esq.
Don Graham, Esq.
Edward C. Rustigan, Esq,
Robert Uvick, Esq.
Mr. John Butterbrodt
TUESDAY, MARCH 26, 1974
U.S. Senate,
Select Committee ox
presroextial campaign activities,
Washington^ D.C.
The Select Committee met, pursuant to notice, at 10 :20 a.m., in room
G-334, Dirksen Senate Office Building.
Present : Senator Inouye.
Also present : Alan S. Weitz and W. Dennis Summers, assistant ma-
jority counsels; Donald G. Sanders, deputy minority counsel; and
Gordon Freedman, research assistant.
Senator Inouye. Raise your right hand.
Do you SAvear to tell the truth, the whole truth, and nothing but
the truth, so help you God ?
Mr. Harrison, I do.
Senator Inouye. Give your name and address.
Mr. Harrison. INIarion Edwyn Harrison, 1701 Pennsylvania Avenue
NW., Washington, D.C.
Mr. Summers. Before I begin to question you, I would like to state
from the outset that Mr. Harrison is appearing before the committee
under a committee subpena, wliich is an ongoing subpena.
Mr. Harrison, when you were testifying before the committee in
your first appearance, you stated that your law firm was retained by
Associated Milk Producers for a period of time running between
January 1, 1972, and June 30, 1972. Is that substantially correct?
TESTIMONY OF MARION E. HARRISON
Mr. Harrison. January 1, 1970, to June 30, 1972—21/2 years.
Mr. Summers. I see. And your firm was on a retainer of $3,000 per
montli, is that correct ?
]Mr. Harrison. The last time I was here, I presented the actual state-
ments we sent out which state the amounts we billed and the amounts
we were paid. I can't call to mind the precise figures Avithout looking
at those statements.
Mr. Summers. But the retainer arrangement was $3,000 per month
with additional billings according to the work that was done, is that
right?
]Mr. Harrison. Not exactly ; $3,000 was not the exact figure. If you
have those bills^ — it's an odd figure. It's close to it, but that's not the
precise figure.
Mr. Summers. But you were on retainer. That's the point. Your
firm wfis on retainer, though ?
Mr. Harrison. Yes, sir.
(7679)
7680
Mr. Summers. Woiild you please explain to us the nature of your
law firm's representation of Associated Milk Producers ?
Mr. Harrison. Washington counsel for Associated Milk Producers,
Inc.
ISIr. Summers. "\^Tiat Avas the nature of the legal work that you per-
formed for the cooperative ?
INIr. Harrison. Professional advice involving any area of the law
on which we were asked for advice.
Mr. Summers. In what areas were you asked for advice?
Mr. Harrison. A large spectrum of the probleins affecting the
dairy co-ops, including but not limited to, import and export matters
before the Agriculture Department and the Tariff Commission and the
White House, parity matters, legislation short of actually lobbying for
anything; to some extent problems involving Federal milk marketing
ordei-s; to a limited quantitative extent, mattei-s involving the legal
limitations upon TAPE, which was the — speaking somewhat loosely —
a political trust fund controlled by A!MPI.
Mr. Summers. Any other matters ?
Mr. Harrison. There probably were some others but I would think
that most of them would come within the scope of the broad categories
I just enumerated.
Mj-. Summers. Did you represent AMPI on any matters relating to
antitrust suits by either civil or government — either civil or govern-
ment suits ?
Mr. Harrison. Not really. On one occasion I was asked to look into
an antitrust matter which I did.
Mr. Summers. And what was that matter ?
Mr. Harrison. A lawsuit was filed early in 1972 by the Justice
Department against AMPI. That was the matter.
Mr. Summers, "\\1io asked you to look into that ?
Mr. Harrison. Stuart Russell.
Mr. Summers. And what did he ask you to do ?
Mr. Harrison. He telephoned me on or about the day the lawsuit
was filed, which was somewhere in the neighborhood of February 1,
1972, and told me in substance — not necessarily these words — that
Justice liad filed a lawsuit, specifically a civil antitrust suit, against
AMPI ; that he had just gotten word of it from the Chicago office of
the Antitrust Division of the Justice Department ; that he had had no
advance notice of it; that contrary to the usual modus operandi in-
volving antitrust suits — which I can tell you from my own experience
in administrative law involves most suits in Avhich the Government is
the plaintiff — -there had been no overt investigation of A^IPI and no
discussions with AMPI counsel, so to speak, it had just come out of the
blue. And that the Justice Department, contrary to its usual practice,
was allowing A!MPI a brief period of time, which I think Avas 48 liours
— at any rate it was a very short period of time — to consent to a pro-
posed consent decree or the lawsuit would actually be filed, and was not
allowing A^IPI its own copy of the proposed complaint in the
lawsuit, but was limiting it to coming to the Chicago office and reading
the complaint there.
And as I interpreted Stuart Russell's remarks, he was most alarmed
at the dramatic and unusual and, as he characterized it to me, un-
precedented manner in which the lawsuit was filed and his query was
7681
to nie — again these are my words now, not necessarily his words — why
was AMPI being singled out for this type of treatment and what, if
anythhig, could be done about it ?
Mr. Summers. Was your conversation with Mr. Russell the first time
you had learned of the Government antitrust suit against AMPI I
Mr. Harrison. Yes, and I took it it was the first time he learned — at
any rate, it was the first time I had.
Mr. Summers. When was it that he called you ?
Mr. Harrison. Well it was within a day or two, if not the very same
day, that AMPI was notified that the proposed complaint was reposing
in the Chicago office of the Antitrust Division of Justice and that it
would be filed within the time period that I just mentioned. If some-
one would look at the date, we could reconstruct.
Mr. Summers. The suit was in fact filed on February 1, 1972, so using
that as a frame of reference, what date would you place the phone call 'I
]Mr. Harrison. Probably the business day before that.
Mr. Summers. Were you, prior to the time of your conversation with
Mr. Russell, aware that AMPI was, in fact, being investigated by the
Antitrust Division of the Justice Department?
Mr. Harrison. No, I was not.
Mr. Weitz. Did you ever have occasion to discuss with Mr. Chotiner
such investigation?
Mr. Harrison. Before or after the telephone call from Stuart
Russell?
Mr. Weitz. Before.
Mr. Harrison. No.
Mr. Weitz. What about after ?
Mr. Harrison. Yes.
Mr. Weitz. And what was the substance of — was there more than
one conversation, or just one ?
Mr. Harrison. I would say several, although in a very short period
of time.
INIr. Weitz. Are you able to summarize the substance of this con-
versation ?
Mr. Harrison. Oh, yes. My reaction to Stuart Russell was that what
was done was done and I doubted anything could be done about it
other than possibly some kind of assurance that the future handling of
the case would be no harsher than tJie future handling of any antitrust
case.
Mr. Weitz. Was that your understanding of his request of you, to
seek such assurance ?
Mr. Harrison. Oh. more or less. His request was not specific and was
presented in what I interpreted to be a state of some measure of shock
and agitation and concern as to why it was his client was being — to
use my words now which may not have been his words — persecuted
and not just prosecuted.
Mr. Summers. AYhat affirmative action did you take to pursue the
matter after you talked to Mr. Rus^sell ?
Mr. Harrison. Well, first I thought about it, wondering if I had
accurately opined to Stuart Russell that probably not much if any-
thing could be done about it and certainly nothing concerning the
peremptory nature of the filing of the compla-int.
7682
And then I discussed it with Murray Chotiner and inquired of — and
inquired of him if his view was substantially similar to mine, which it
was.
And then I decided that it would be useless to discuss it with the
then-Attorney General because under the law it's the Attorney Gen-
eral that signs the complaint in an antitrust case, and apart from a
particular personality, it's most unlikely that somebody who had
signed a complaint presumably — although I don't know this as a fact
and of course didn't know it as a fact then — presumably knowing
that the complaint is going to be filed suddenly with something like
48 hours' notice to consent and no more — it's most unlikely that that
person is going to backtrack.
I may not have learned much in my years of practicing law inside
and outside of the Government in Washington, but one thing I've
learned is that human nature is such that if a Government official or
employee puts something in writing, most of the time it's unreasonable
to ask him to undo what he has done. Often in an informal discussion
prior to the time something is put in writing, sweet reason will prevail
and one can dissuade somebody from doing something or induce them
to do it slightly different or with a slightly different time limit.
At any rate, I probably — I'm a rather candid fellow particularly
when talking to fellow lawyers and clients — I probably told him that
at the moment I didn't know what I could do, if ever. And that in
any event, John Mitchell was going out as Attorney General and Judge
McLaren, who was Assistant Attorney General, Antitrust Division,
had gone on the bench from Chicago and had left on or about the very
day that the lawsuit was filed; so therefore the likelihood of an})
reasonable discussion with either of those two was most remote.
Mr. Summers. I take it then at the time of your conversation witli
Mr. Russell, it was your understanding that the complaint had in fact
been signed by Attorney General Mitchell; is that correct?
Mr. Harrisox. That was my understanding, yes.
Mr. Summers. As a result of your conversation with INIr. Russell,
did you contact anyone in the Justice Department to find out the
status of the lawsuit?
Mr. Harrisox. Subsequently, yes.
Mr. Summers. Wlio was it that you contacted ?
Mr. Harrisox^. Richard G. Kleindienst.
Mr. Summers. And when did you contact Mr. Kleindienst ?
Mr. Harrisox. It was not until after he became Attorney General,
which was sometime thereafter.
Mr. Summers. And what did you ask him ?
Mr. Harrison. Well, first I told him the story as I knew it of the
sudden and peremptory and unusual nature of the filing of this suit.
And, as he knows, so I didn't have to tell him, our law firm does not
practice antitrust law. but we do practice many other varieties of ad-
ministrative law and I said I was quite concerned. And the client's
counsel who handled their antitrust matters was quite concerned with
the peremptory and sudden nature or means of the filing of the suit.
And I thought our client ought to get treatment which was no harsher
than the treatment that anybody else got.
And he said that — probably using an expletive or two which is color-
ful in private conversation— that he didn't know anything about the
7683
lawsuit because at the time it came up he was Deputy Attorney Gen-
eral and antitrust suits for approval <t:o from the Assistant Attorney
General, Antitrust Division, to rho Attorney General, they don't ffo
through the Deputy. But, as a broad philosophical proposition, ne
agreed with me. He said, ""Wliy don't you go talk to Tom Kauper?"
who by that time had come down from Michigan Law School to be
Assistant Attorney General, Antitrust Division — mind you, this was
months later — so I did.
Mr. Su]\iMERS. Would you place this conversation after the time that
Mr. Kleindienst was confirmed ?
Mr. Harrison. Yes.
Mr. Summers. Now he was confirmed on June 8, 1972, so would it
be vour testimony that you discussed the AMPI antitrust suit with him
after that date?
Mr. Harrison. Yes.
Mr. Summers. And was it your understanding at that time that
Mr, Kauper had assumed the position of Assistant Attorney General,
Antitrust ?
Mr. Harrison. He either was in "acting" status, or actually had been
confirmed. He physically was in the office but all his personal desk
adornments and whatnot had not been laid out, so he had not been
there very long.
Mr. Summers. Is it your testimony, then, Mr. Harrison, that the
first contact you had with the Justice Department after discussing the
suit with Mr. Russell was the conversation which you just described
with Mr. Kleindienst ?
Mr. Harrison. Yes. Mind you, I w^ould have had it much sooner if
he had been confirmed much sooner, but as you may recall, his con-
firmation ran into quite a hassle and was considerably delayed beyond
what the press earlier was predicting.
Mr. Summers. Are you aware of any oontax^ts which might have
been made by Mr. Chotiner with anyone in the Justice Department
concerning this suit ?
Mr. Harrison. I'm aware of one.
Mr, Summers. And when was that ?
Mr. Harrison. That was very soon after Stuart Russell telephoned
me. Murray ran into John Mitchell at a cocktail party and I don't
know whether Murray brought up the subject to John or vice versa.
I rather assume it must have been Murray who initiated the conver-
sation, inquiring about the unusual nature of the filing of the suit.
He got a couple of puffs of John Mitchell's pipe and a rather non-
committal response which is what I had predicted to Russell in the
first conversation would happen if anybody discussed it with John
Mitchell.
Mr. Summers. What was your understandin<r of what Mr. Chotiner
had asked Mr. Mitchell or raised with Mr. Mitchell at that cocktail
partv ? A^Hiat was the subject of th-^ conversation ?
Mr. Harrison. The subject of th^^ r-onversation was told to — as told
to me by Murray Cliotiner- -was the sudden and unusual and strange
and peremptory manner of the filing of this lawsuit.
Mv. Sum:mers. And what was Mr. Mitchell's response ?
Mr. Harrison. Vye just described it.
Mr. Weitz. Do vo i know if there was any reference either by Mr.
Chotiner or Mr. Mitchell in their conversation to the political sup-
7684
port which the dairy cooperatives had previously given or intended to
provide to the President's reelection campaign ?
Mr. Harrison. Mr. Chotiner mentioned no such discussion to me.
Mr. Weitz. In your discussions with Mr. Chotiner either before or
after his conversation with Mr. Mitchell, did either of you refer to such
support in relation to the antitrust suit ?
Mr. Harrisox. I don't quite understand the question. "V\Tio was talk-
ing with whom now ?
Mr. Weitz. Between you and Mr. Chotiner, either before or after
the time he met Mr. Mitchell at the cocktail party ? In the course of
your discussions with reference to the antitrust suit against AMPI,
did there enter into your discussion any considerations or any refer-
ences to the political support or campaign contributions of AMPI or
its trusts, to the reelection campaign of President Nixon ?
Mr. Harrison. Well, over a long period of time Mr. Chotiner and I
had several conversations with one another — is that what you're talk-
ing about?
Mr. Weitz. Yes ; in the course of those conversations.
Mr. Harrison. With one another, during the course of which one or
the other of us would mention the fact that dairy' cooperatives were
supporters of the Nixon administration, but whether in a conversation
during this particular period — which I take it to be February 1972
you're talking about — whether in one and the same conversation one
of us was discussing the antitrust suit and contributions, I can't recall
as a fact. I would doubt it considering both of us were aware of the
contributions. It's illogical, it seems to me, that one would be stating the
obvious to the other.
Mr. Weitz. I'm not talking about restating the fact that contribu-
tions had been made, but to put another question to you : Was there
any reference to a possible connection or impact that the antitrust
suit would have upon additional contributions by AMPI and its
political trusts to the reelection campaign ?
Mr. Harrison. Oh, there might have been, in this context. The Nixon
administration, to generalize somewhat, from the summer or fall of
1971 up to and including, for that matter, almost to the present date,
has done very little affirmative for the dairy co-ops, so I suppose Mur-
ray and I somewhere along the line, talking one to the other, might
have alluded to the political fact of life that there's a point beyond
which an administration can't be hostile to a particular industry or
farm group and expect indefinite support from that same industry or
fa mi group.
Mr. Weitz. Was there any reference in these conversations between
you and Mr. Chotiner during that same Deriod, Avith respect to whether
or not additional contributions, if made by the dairy trusts, would have
a beneficial impact or influence upon the proceedings of the antitrust
su^^'
Mr. Harrison. No.
Mr. Weitz. Were you aware of any such discussions or intentions on
the part of anvone connected with AMPI or representing AMPI in
1972?
Mr. Harrison. No.
Mr. Weitz. Were you aware of any such position taken or suggestion
made bv Jake Jacobsen ?
Mr. Harrison. No.
7685
Mr. Weitz. Did Dr. Mehren or anyone else connected with AMPI or
TAPE seek any advice from you or discuss with you possible addi-
tional contributions to the i-eelection campaign in 1972 ?
Mr. Harrison. George Mehren might have. I don't recall anybody
else that did or would have. George Mehren became general manager
of AMPI in January 1972. He and I had a discussion on all manner of
subjects in San Antonio soon thereafter, in January 1972. Of course
that was before I knew anything about the possible antitrust suit and
I take it it was before he did. I don't recall any discussion after that
about contributions.
Mr. Weitz. Do you recall at that conversation — at that meeting —
reference to the fact that he was to meet with Mr. Kalmbach several
days thereafter ?
Mr. Harrison. No. As a matter of fact, I not only did not k'low about
that meeting in advance, but it was very long thereafter that I learned
about it, which I took to be a lack of confidence on his part with regard
to me, which I guess was accurately taken because I was asked for very
little advice on any subject after he became general manager and the
retainer was terminated in May or June, etfective June 30.
Mr. Summers. Mr. Harrison, I hand you copies of two letters. Would
you please identify these letters for the record ?
Mr. Harrison. Yes, these are two letters I wrote; one to George
Mehren and one to Stuart Russell on the same date and I sent a copy
of each to the other.
[The letters referred to above appear in Book 16 as Mehren exhibits
Nos. 1-C and 1-B, respectively.]
Mr. Summers. What was the occasion of your writing these two
letters, Mr. Harrison ?
IVIr. Harrison. T couldn't reach either one by telephone to continue,
or conclude as it were, a conversation or conversations that I had had
with each and I was about to leave to go somewhere — skiing, I believe.
I think maybe if we check a calendar, February 25, 1972, turns out
to be a Friday, Saturday, or Sunday, so I put in writing what I would
have said had I been able to reach them by telephone. Otherwise the
matter, you see, would have gone over for another week or two.
TDiscussion off the record.]
Mr. Summers. Mr. Harrison, I refer you to the first letter, dated
February 25, 1972, to Dr. George Mehren. In the first sentence of that
letter you state :
In view of the changing of the guard, apart from Jake's reasoning, I decided,
with Murray's concurrence, not to talk with the incumbent but to take the matter
up anew with his successor.
What did you mean when you said "In view of the changing of the
guard" ?
Mr. Harrison. The guard was changing. Judge McLaren had left
and Jolm Mitchell, if he hadn't left was soon to leave.
Mr. Si mmers. Were you referring to both those changes ?
Mr. Harrison. Yes.
Mr. Summers. What was "Jake's reasonina-" on this matter?
Mr. Harrison. According to Stuart Russell, his reasoning was, as
quoted to me in the very first conversation when Stuart Russell called
me and invited this problem to my attention, he quoted Jake Jacoibsen
7686
as having said that nothing could be done about itr— what was done
was done. His reasoning was the same as mine.
Mr. Summers. But you are contrasting what you planned to do as
indicated in this letter, with what Jake's reasoning was. So how can
you say that yours is concurrent?
Mr. Harrisox. "Apart from" means "in addition to."
]Mr. Weitz. Just to clarify, in other words you're saying that Mr.
Jacobsen's reasoning, as related to you by Mr. Russell, was that noth-
ing could be done with those, at tliat time, in charge of the Justice
Department ? Is that correct ?
Mr. Harrisox. Precisely ; and I'm saying that that is my view apart
from Jake Jacobsen's reasoning. In other words, I'm not relying on
his reasoning. I'm telling my client that it's my reasoning.
Mr. Weitz. But you did think it should be taken up with the suc-
cessor leadership of the Justice Department ?
Mr. Harrison. Yes. Bear in mind, this is the written conclusion to
a series of two or three telephone conversations. Consequently I had
no need to explain or lead into these comments. The addressees could
have had no doubt what I was referring to.
Mr. Summers. If you felt nothing could be done about this matter,
why did you decide to even take it up with the successor, meaning I
take it, Mr. Kleindienst ?
Mr. Harrison. I felt that nothing could be done with the present
guard and that nothing could be done concerning the filing. I hoped
for fair treatment for the future.
Mr. Weitz. Mr. Harrison, in the second paragraph, the sentence
reads as follows — ^before I quote, there's a reference to Murray talking
to John at the party, which I think you referred to, and the following
sentence goes: "The version of the facts I surmised to you by tele-
phone is confirmed. I guessed 'right'." What version of the facts was
that?
Mr. Harrison. The ones to which I have testified— namely, that
John Mitchell puffed on his pipe and indicated or implied that he
knew little about it. It was a recommendation from Judge McLaren
which he signed off on.
Mr. Weitz. Mr. Mitchell did relate that to Mr. Chotiner ?
Mr. Harrison. Yes, and I claim no prowess as a pundit, but that^s
what I predicted to Stuart Russell, that in the very first conversation
if anybody discussed it with him he would puff on his pipe and be
noncommittal and say, "Well, Judge McLaren sent me the complaint
so I signed it, what they do with it afterwards is a matter for the Anti-
trust Division," which, of course, it is.
Mr. Weitz. Was there any discussion between vou and Mr. Chotiner
or between you and anv other lawvers for AMPI concerning the nos-
sibility that Mr. Mitchell had signed the complaint with the idea
that the negotiation period would run beyond the time Mr. McLaren
would be at the Justice Department and would have no further say
in the a("tual filing r>f the complaint ?
Mr. Harrison. The answer to vour question is "No." I don't want
to speculate on Avhat the Attornev General's intentions were.
Mr. Wettz. I didn't ask you to speculate, I asked you whether you
discussed that possibility with Mr. Chotiner or any other lawyers for
AMPI.
7687
Mr. Harrison. No ; I don't recall discussing that possibility. I sup-
pose it is one.
Mr. Summers. In the third paragraph of this same letter, you state,
"The confirmation vote will be no earlier than February 29 and prob-
ably later next week." Wliose confirmation are you referring to there ?
Mr. Harrison. Mr. Kleindienst's, except as you may recall it was
months later.
Mr. Summers. Now in the last paragraph of this same letter, you
state that, "In a week or two I'll endeavor to zero in." AVhat affirmative
action did you take to "zero in" on this matter ?
Mr. Harrison. Nothing until several months later because Mr.
Kleindienst didn't get confirmed until several months later. In fact,
you said awhile ago it was June, so it was more than several months.
Mr. Weitz. What did you intend to do — what did you intend to
mean by that letter, or that phrase ?
Mr. Harrison. I intended to do precisely what I did except I in-
tended to do it much sooner because I anticipated the confirmation
would occur much sooner and that is, to go see Mr. Kleindienst as
Attorney General, not merely as Acting Attorney General, and explain
to him the facts as reported to me and ask his advice on what, if any-
thing, could be done to gain for this client the same measure of treat-
ment as other defendants got in civil antitrust suits.
Mr. Summers. I refer you now, Mr. Harrison, to the second letter
dated February 25, to Stuart Kussell.
In the first paragraph of this letter you state, "There's nothing like
being able to control a subordinate or, plirased another way, beware
of confirmed judges who aren't judging yet." What did you mean by
that?
Mr. Harrison. It requires knowing the story of Judge INIcLaren's
confirmation. Richard McLaren was nominated and confirmed very
quickly. I have heard it said that in recent years nobody on the Federal
bench has been nominated and confirmed so quickly. As I recall it
was a matter of hours, all in 1 day. But then he didn't leave the Justice
Department for a month or two after that, so he was a confirmed judge
still sitting as Assistant Attorney General and he churned out, I am
told, several antitrust cases of which this was merely one, and obvi-
ously issued instructions to the people down the line as to the time-
tables and other matters as to how those cases were to be handled.
Now bear in mind, Stuart Russell and George Mehren knew all of
that. They may have known it on their own or I may have told them.
But at any i-ate, in a couple of conversations before this letter — bear
in mind this letter is a substitute for the concluding conversation on
the subject I am referring to, and franklv I think that's a pretty good
axiom. There isn't anything like the ability of a superior to control
his subordinate.
Mr. Summers. Which superior were you referring to when you
said "control the subordinate" ?
Mr. Harrison. The Chicago office of the Antitrust Division which
was and is as I understand it in charge of this case.
Mr. Summers. So you're referring to more than one individual?
You mean collectively, all of those people in the Chicago office who
were working on this antitrust suit ?
7688
Mr. Harrisox. Plus all the pec pie in the Washington office who
were working on it.
Mr. Summers. Would that include Mr. Walker Comegys who was
Acting Assistant Attorney General when Judge McLaren left?
Mr. Harrisox. If he was involved in this case, yes.
Mr. Weitz. Would it include Mr. McLaren ?
INIr. Harrisox. No, because it was his instruction.
Mr. Weitz. In other words, you are not referring to Mr. Mitchell
controlling Mr. McLai*en ?
Mr. Harrisox. No, no. I'm referring to Judge McLaren controlling
his subordinates. I don't know whether you've ever worked in the
Government or not, but I have and I've been at various levels of the
totem pole and I think it's a very fundamental axiom that if a superior
sends down an instimction, barring something most unusual, that
instruction is going to be followed.
Mr. Weitz. Didn't John Mitchell send out an instruction by sign-
ing the complaint to his subordinate. Judge McLaren ?
Mr. Harrisox. That's not the way I interpret the functioning of
the Antitrust Division.
Mr. Summers. The antitrust suit was filed on February 1. Judge
McLaren left office, as I understand, on February 2. The date of the
writing of this letter is February 25. Now are you stating that Judge
McLaren, even though he had gone, still retained some sort of con-
trol of the lawsuit?
Mr. Harrisox. I am stating that his instruction was still binding.
IVIr. Summers. In spite of the fact that there was an Acting As-
sistant Attorney General for Antitrust and at the time of the writing
of this letter there was a new Attornev General nominated ?
Mr. Harrisox. But not confirmed. I hasten to tell you, Mr. Sum-
mers, my experience is that pereons occupying governmental positions
in acting capacities, be they active candidates for nomination or
otherwise, are very reluctant to overrule instructions of predecessors
and probably the better part of wisdom in most instances is that they
not do so.
Mr. Summers. In terms of negotiations of this suit after the suit
was filed, have you participated in the negotiations that may have
taken place between the Justice Depai'tment and AMPI since the
time period that we have just been discussing?
Mr. Harrisox. No.
INIr. Weitz. Are you aware of anv efforts by AMPI to make addi-
tional contributions prior to April Y, 1972^I'm sorry, not AMPI
but TAPE or CTAPE, to the President's reelection campaign?
Mr. Harrisox. I don't understand the import of your question. All
contributions prior to April 7, 1972
Mr. Weitz. From January 1, 1972, to April 7. 1972, were you
aware of any efforts during that period by TAPE or CTAPE to
make contributions to the President's reelection campaign?
Mr. Harrisox. No. I was aware of almost virtuallv nothing between
the change in management in Januai-y 1972 in AINIPI and April 7,
1972. Or, for that matter, June 30, 1972.'
Mr. Weitz. Were you aware of any contacts between representatives
of AMPI during that period and Mr. Kalmbach ?
7689 ^ ■
INIr. Harrisox. Somewhere along the line I learned that Dr. Mehren
had met with INIr. Kalmbach but I don't think I learned it during the
period I was still retained by AMPI.
Mr. Weitz. "What was your understanding of the purpose and sub-
stance of those contacts, or contact ?
Mr. Harrison. AVell, I had no understanding. I also had consider-
able curiosity as to why the meeting in view of the fact that Dr. INIeh-
ren's comments to me about the administration in general — and I'm
not referring to ad hominem comments — were quite negative.
Mr. Weitz. Did he indicate that he did not want to make any con-
tributions?
Mr. Harrison. In spirit, perhaps, if not in words.
Mr. Weitz. Were you aware of any contacts during that same
period between representatives of AMPI and Secretary Connally?
Mr. Harrison. Xo. The entire Connally bit, such as it may be, I have
become aware of quite recently through hearsay, the newspapers and
television being asked questions about Mr. Connally and myself whom
I have never met.
Mr. Weitz. Do you know of any other contacts or eiforts made be-
tween representatives of AMPI during that period and those in Gov-
ernment, outside of the Chicago office of the Justice Department, in
connection with the antitrust suit ?
Mr. Harrison. No.
Mr. Weitz. I have one other area. Would you like — Don, would you
like to ask a question ?
Mr. Sanders. No questions.
Mr. Weitz. I have one other brief area I'd like to ask you about.
Are you aware of any contact between Murray Chotiner and Herb
Kalmbach on either March 24 or ISIarch 25, 1971 ?
Mr. Harrison. Clue me in as to what happened on those two dates.
Mr. Weitz. All right ; let me step back for a moment. Do you recall
a meeting on March 23, 1971, between the President and certain dairy
leaders ?
INIr. Harrison. Yes. I was there.
Mr. Weitz. Do you recall that on March 25, 1971, 2 days later, the
administration announced an increase in milk price supports'
Mr. Harrison. I can't attribute the date, but I do recall it was 2 days
later.
Mr. Weitz. Then that would be March 25. During that period from
the time of the meeting with the President and the time of the an-
nouncement of milk price supports, do you have any knowledge of any
contacts or meetings between Mr. Chotiner and Mr. Kalmbach ?
INIr. Harrison. Yes. I know of one.
Mr. Weitz. And how did you come to that knowledge ?
Mr. Harrison. I was told by Mr. Chotiner.
jNIr. Weitz. Do you recall when he told you ?
Mr. Harrison. I figured that would be your next question and I
was trying to think in advance of about when it was.
Mr. Weitz. Would it have been shortly after the meeting?
ISIr. Harrison. No. A ffood bit thereafter.
Mr. Weitz. Within 1 971 ?
Mr. Harrison. It might have been within 1971 but a very good bit
thereafter, many months — if even 1971 at all.
7690
Mr. Weitz. Do you place any connection with arrangemerits to have
TAPE make contributions to the President's campaign in 1971 — in
other words, did the conversation take place in connection with con-
versations relating to contributions ?
Mr. Harrison. Would you like to repeat, or restate, that question ?
Mr. Weitz. Your conversation with Mr. Chotiner in which he
informed you of his prior meeting with ]Mr. Kalmbach, did that con-
versation take place in connection with you discussing with Mr.
Chotiner then ongoing contributions by the dairy people to the Presi-
dent's reelection campaign ?
Mr. Harrison. No. As I recall it took place at about the time counsel
for plaintiff in Nader v. Butz was taking, or was going to take, my
deposition and Mr. Chotiner's deposition.
Mr. Weitz. Could you tell us what Mr. Chotiner told you about this
meeting ?
Mr. Harrison. Yes. He told me that he and Harold Nelson, who, in
1971, was general manager of AMPI, had a brief meeting with Mr.
Kalmbach and that the meeting was the evening of the Republican
fimdraising dinner in March 1971 — some of this I might have been
listing while he was deposing. He may not have been telling me as much
as telling the record. But at any rate, I think it's still responsive to your
question and he probably said the hotel at which the meeting took
place, but I don't recall that oifhand.
Mr. Weitz. Do you recall whether it was the Madison Hotel ?
Mr. Harrison. It was either the Madison or else it was the Wash-
ington Hilton.
Mr. Weitz. Did he tell you how he came to meet with Mr. Kalmbach ?
Mr. Harrison. "VYliat do you mean by "how" ?
Mr. Weitz. Who arranged for the meeting ; what the purpose of the
meeting was.
Mr. Harrison. No. But I got the impression that either he or Mr.
Kalmbach arranged it. I am not sure he ever told me that in so many
words.
Mr. Weitz. Did he mention Mr. Ehrlichman's name in connection
with the arrangements for the meeting ?
Mr. Harrison. No.
Mr. Weitz. What did he tell you transpired at the meeting ?
Mr. Harrison. He told me that Harold Nelson reiterated to Herbert
Kalmbach that the dairy cooperatives wanted to make further con-
tributions to the Nixon Presidential campaign.
Mr. Weitz. What was Mr. Kalmbach's response as related to you
by Mr. Chotiner?
Mr. Harrison. Do you want to know the truth ? His response was
that Mr. Kalmbach was very sleepy and he thought they had probably
awakened him and that he thought Mr. Kalmbach was a rather unen-
thusiastic solicitor of campaign contributions and that was said, I
hasten to say, in a somewhat lighthearted manner.
Mr. Weitz. Did he tell you anything else that was said at the
meetinsr?
Mr. Harrison. No. I don't think so. As I recall he said it was a very
brief meeting.
7691
Mr. Weitz. Now in your previous appearance and testimony before
this committee — and 1 don't want to go into it — I believe you indi-
cated there was at least one previous meeting in 1970 which you at-
tended and the topic of which was ways in which — you know, setting
up of committees to receive contributions from the dairy trusts for the
President's reelection campaign.
Now, could you tell me whether you understood from Mr. Chotiner
what the purpose of this meeting between him, Mr. Nelson, and Mr.
Kalmbach was on March 24 in view of those earlier meetings where
such arrangements and declarations had perhaps already been stated?
Mr. Harrison. I was and still am a little unclear of the full pur-
pose. The logical purpose would be that way back in November of 1970
at the meeting to which you refer there was discussion that names and
addresses of committees and committee officers would be furnished to
the dairy co-ojjs so that the dairy co-ops could make contributions to
the Nixon campaign and it was then 5 or 6 months later and nobody
had produced the name of committee No. 1.
Mr. Weitz. Did Mr. Chotiner in any way indicate to you that the
purpose, or in some way — some of the discussion of this meeting be-
tween Kalmbach and Nelson on March 24, related to the milk price
support decisions?
Mr. Harrison. No.
JNIr. Weitz. Did he say it did not? Or did he just not refer to it ?
Mr. Harrison. I don't recall his referring one way or another.
Mr. Weitz. Are you on good terms with Charles Colson ?
Mr. Harrison. I rather doubt that I am too high on Chuck Colson's
list of admirers, but I'm not sure.
]Mr, Weitz. Did Mr. Chotiner in any way indicate that your rela-
tions with ]\Ir. Colson were the subject matter of any meetings he had
with the dairy people or Republican fund raisers? When I say "your
relations," your esteem, and so forth, in Mr. Colson's view.
Mr. Harrison. Long thereafter, ISIurray Chotiner told me that he
had learned Chuch Colson wanted to steer our client away from me
to somebody who was less difficult or easier to get along with, more
amenable or more pliable.
Mr. Weitz. Now, without casting any aspersions on you or anyone
else, was this in connection with the — in 1972 — any increased repre-
sentation for AMPI by Jake Jacobsen or his firm?
Mr. Harrison. No. I have no knowledge of the Jacobsen people en-
tering into this at all.
Mr. AVeitz. But you say that Mr. Chotiner indicated this to you
"long after," long after what? Your representation of AMPI had
ceased?
Mr. Harrison. Yes.
Mr. Weitz. He didn't indicate that to you at any time in 1971 ?
Mr. Harrison. Oh, no. In fact, I think it was in 1973.
Mr. Weitz. Is there anything else that you can recall that Mr.
Chotiner related to you about the meeting between himself and Mr.
Nelson and Mr. Kalmbach on March 24?
Mr. Harrison. No.
Mr. Weitz. Did he tell you what was decided, or whether anything
at all was decided at the meeting, other than Mr. Nelson's declaration
and Mr. Kalmbach's somewhat unenthusiastic or sleepy response?
7692
Mr. Harrison. Oh, yes. That the fiindraising effort would o;et on
the ball and in due course they'd come up with some names of com-
mittees and names and addresses of officers of the committees.
Mr. Weitz. When did you learn of the milk price-si'pport decision —
that it would be increased?
Mr. Harrisox. The day it was announced.
Mr. Weitz. March 25?
Mr. Harrison. If that's the day it was announced.
Mr. Weitz. Did you learn it shortly before, or at the time of the
public announcement?
Mr. Harrison. I learned it either at that time or a few minutes
before. I I'eceived a call from somebody in the Agriculture Depart-
ment who said that the messengers were on the way to the Hill, or had
gone to the Hill — I don't recall which — and the decision was about to
be announced, or was being announced.
Mr. Weitz. You didn't learn of it the evening before at the Eepub-
lican fundraising dinner or shortly thereafter?
Mr. Harrison. Absolutely not.
Mr. Weitz. If Mr. Chotiner had known about the decision to increase
price supports the previous evening, it's your belief he would have
told you of his information — of that information?
Mr. Harrison. I think he would have.
Mv. Weitz. He didn't do so?
Mr. Harrison. He did not do so.
Mr, Weitz. To your knoAvledge, did he know of the price support
increase before it was announced on the 25th ?
Mr. Harrison. To my knowledge, he did not.
Mr. Weitz. Mr. Sanders, do you have any questions?
Mr. Sanders. No questions.
Mr. Weitz. Senator? Any questions?
Thank you, Mr. Harrison.
Thank you, very much.
[Whereupon, at 11 :20 a.m., the hearing in the above-entitled matter
adjourned.]
TUESDAY, APBIL 2, 1974
U.S. Senate,
Select Committee on
Presidential Campaign Activities,
Washington^ D.C.
The Select Committee met, pursuant to notice, at 3 p.m., in room
109, Russell Senate Office Building.
Present : Senator Talmaclge.
Also present: James Hamilton, assistant chief counsel; Donald
Sanders, deputy minority counsel; Richard L. Schultz assistant
minority counsel.
Senator Talmadge. We might as well go ahead and swear the
witness.
Would you please stand up and raise your right hand ? Do you, Joe
Johnson, solemnly swear that the evidence you shall give the Select
Committee on Presidential Campaign Activities of 1972 shall be the
truth, the whole truth, and nothing but the ti-utli, so help you God ?
Mr. Johnson. Yes, sir.
Senator Tauhauge. All right. Now you are recognized, Mr.
Williams.
Mr. Williams. Thank you, Mr. Chairman. Well, first off, Mr. John-
son's first appearance, as I am sure Mr. Sanders will concede — at that
he appeared voluntarily. Xow, he could have made a transcript or not
made a transcript. You had a girl there reporting things and we didn't
object to that and even ask for a copy of the transcript, which wasn't
available. He testified then as to all the details of what went on, both
with respect to his employment by the Associated Milk Producers,
Inc., and its predecessor, and then as to his role with the Mills
campaign.
Now^, it came back into focus in connection with the records of the
Mills campaign — and I don't mean to be disrespectful to the commit-
tee. Senator, I mean Mr. Chairman — but we first started coming up
here and our people appeared voluntaril}' and it was only shortly
thereafter that we began to read in the national newspapers about all
this and we, that is, people comiected with the campaign, began to get
calls from reporters, where they either liad read to them or received
verbatim transcripts of investigators' reports about certain activities.
That is when we just said that our voluntary cooperation Avas going
to cease because there is just no point in coming up here and talking
about things and then reading about them in the newspapers, particu-
larly where there are inaccuracies in the newspapers.
Your concern, Mr. Sanders, with Joe Johnson ''round two," let's
call it, arose when he had the records from the campaign and you
wanted those records and we talked and he could have been in on
(7693)
7694
April 1 and I jokingly said that we wouldn't come in on April 1
because our appearance on that date might be suspect, but we agreed
to come in on April 2 and bring all of the records.
Your concern at that time was whether any of the records had been
destroyed or otherwise altered and I said that he will answer the ques-
tions about that to the extent that he has not altered or destroyed any
of the records. Then you wanted to get back into the milk thing and
our position on that is he is not going to testify. This is the subject
of grand jury investigation. We have no assurance and indeed no assur-
ance can be made by even this committee that this won't appear in the
newspapers in a distorted form. The grand jury is not sequestered and
they could read this and they could form the wrong interpretation and
Mr. Johnson could be summoned before the grand jury and there is
just no telling what could happen.
Mr. Sanders. I would like to proceed with the questioning I sup-
pose. That is where we stand, Mr. Chairman.
Senator Talmadge. "What about Mr. Williams' argument?
Mr. Sanders. Sir. do you want me to respond to it ?
Senator Talmadge. Yes, either you or Mr. Hamilton. First, let me
ask this question : Do you intend to plead the fifth amendment for
Mr. Johnson?
Ml". Williams. We intend to assert all of his constitutional privi-
leges and encompass therein his privilege, as recognized by the Dis-
tinct of Columbia, against incrimination, penalty, and forfeiture, in-
cludhig public degradation. Now we don't want to be put in a posi-
tion— that is, Mr. Johnson has not read the Constitution in full since
his days in college and he is not going to respond to the question "Do
you plead the fifth amendment?" He is going to read a statement
prepared by his counsel and is under my instructions in this regard.
Mr. Sanders. Then I would like to respond, Mr. Chairman. Just
for the record, there was a subpena issued and signed by Senator Baker
dated March 18 for Mr. Johnson. Soon after it had been given to the
marslial for service, I did receive a call from Mr. Williams saying he
would voluntarily appear, so the subpena has been withdrawn and has
not yet been served. The reason for requesting the subpena in the first
place was that Mr. Williams had said that Mr. Johnson had the rec-
ords, which had been returned by the Special Prosecutor, but that he
would not voluntarily bring them in. So, therefore, I requested the
issuance of a subpena.
These records had been in the possession of the Special Prosecutor
for some time and liad been given to the Prosecutor by Mr. Williams.
Tliev are Draft Mills' records and had before that been in the custody
of Mr. George Jernigan. I had subpenaed Mr. Jernigan, and then
Mr. Jernigran told me they had been given to the Special Prosecutor
and the Special Prosecutor wouldn't release them to me, but finally
said lie was finished with them.
Senator Taijmadge. But what is your response to the argument
about the grand jury investigation ?
Mr. Sanders. Well, I think that the nature of that argument is
pleading the fifth amendment. That is my understanding of the true
nature of what he is saying. And if Mr. Johnson asserts the fifth
amendment — and I don't want to ask a long series of questions; I want
only to ask a few — and if he asserts the privilege of tlie fifth amend-
ment, I think there is no recourse but to adjourn the session.
7695
Senator Talmadge. That is my understanding of the law. You may
proceed with your questions and if counsel wants to invoke the fifth
amendment, he may do so.
Mr. Williams. All right.
Mr. Sanders. You have already stated your name for the record.
Would you state your place of residence ?
TESTIMONY OF JOSEPH P. JOHNSON, ACCOMPANIED BY J. D.
WILLIAMS AND ERIC ROITER, COUNSEL
Mr. Johnson. 907 Sixth Street SW., Apartment 515C, Washington,
D.C.
Mr. Sanders. Do you have any other residence ?
Mr. Johnson. I list as a permanent home address the residence of
my oldest daughter in Arlington, 1806 Hershaw Street.
Mr. Sanders. Do you have a place of business other than your
residence ?
Mr. Johnson. No, sir ; negative.
Mr. Sanders. And what is your present employment ?
Mr. Williams. Well, hold on here. I mean if you want to go into the
question of the records, which is the initial reason we are here, that
is
Mr. Sanders. This isn't going to take but a minute, Mr. Williams.
I am trying to make it very quick. I just want a little background.
Mr. Williams. Well, I thought you wanted the records. We turned
over the records. If you want to ask some questions about the records,
OK. I will state that the witness will state the following answers to
three questions: First, the records turned over were the ones he re-
ceived in my office and the answer to that one would be "Yes." Second,
he has not destroyed, altered, or mutilated in any way those records
turned over to him in my office, and the answer to that question would
be "No." Third, to the best of his knowledge no one else has destroyed,
altered, or mutilated any of those i.^cords.
Now would those be your answers to those questions?
Mr. Johnson. Yes, sir.
Mr. Hamilton. I would suggest on the other areas you want to get
into, that you ask those questions now so you will get a ruling.
^Ir. Williams. He will read a statement also. He has given his name
and address and has been sworn. If you want to ask him to read the
statement — or I will read it for him
Mr. Sanders. I would like to ask a few questions which would be
relevant to your responding in this matter.
Senator Talmadge. I think you can get over to the important ques-
tion where counsel can state his reasons for refusing to answer and
then we can get a ruling there.
Mr. Sanders. All right. In August 1971 there was in Arkansas an
appreciation day for Chairman Wilbur Mills. Following that event,
and while you were still on the AMPI payroll, did you provide any
assistance to the Draft Mills campaign ?
Mr. Williams. First off, he has already answered questions like that
in much more detail. Rut just for the purpose of protecting the record,
I want to read the following statement on behalf of Mr. Jolinson.
As you know, Mr. Sanders, he went into some detail and answered
questions like that, even those that were pure speculations about per-
7696
centages, and then we read in the newspapers about his answers very
shortly thereafter. But just let me read this statement
Mr. Sanders. Mr. Chairman, what Mr. Williams has just said is in
the nature of argument rather than a response to the question and I
would like an opportunity
Mr. Williams. Well, I would respond — here is what he will respond
to. Now, if you want him to read it himself, he will read it.
Mr. Sanders. I think the witness should read it, Mr. Chairman.
Mr. Johnson. Acting; on instructions of my counsel. I respectfully
refuse to answer any questions other than those enumerated earlier
relating to any aspect of my employment by AMPI or the period
thereafter. The bases for this position have been enumerated earlier
by my counsel, but they encompass my constitutional priA'ileges and,
without limitation, I enumerate amongst those constitutional privi-
leges, the privilege to avoid compulsory penalty and forfeiture, in-
cluding public degradation.
I wish to point out that I have appeared earlier without any re-
striction and I have voluntarily turned over all campaign-related rec-
ords in my possession. The only other records of which I have personal
knowledge are those on file with GAO or which have been available
for inspection by the committee.
Senator Talmadge. Do I understand that your response is that you
stand on every constitutional rigrht you have; is that correct, Mr.
Johnson ?
Mr. Johnson. That is correct, sir.
Senator Talmadge. I think he has invoked the fifth amendment, as
I understand it.
Mr. Sanders. All right, ISfr. Chairman. I want to say in response
to the mention that he has testified before, in the first place he has
not testified before. He was interviewed previously .
Second, since that time, and I said this before, but it was before the
young lady began to record, new information has c<)me to our atten-
tion; some of it contained in the Wright report, which is an internal
investigation conducted by A^IPI. and some of it which I learned act-
ing upon information from the Wright report. And these are some
new areas that have come to my attention and that I wanted to ask
him about. There are three or four separate categories there. Now, they
don't all relate specifically to the question I have just asked. The ques-
tion is — shall T state it difPerently ? Should I state the different areas?
Senator Talmadge. Do you intend to invoke the fifth amendment on
any and all questions the counsel asks ?
Mr. Williams. His statement is all-encompassing, INIr. Chairman,
for any question, no mattei* how unrelated, or Avhatever. And under —
particularly under the laws of the District of Columbia, you Avaive
your constitutional privileges, and not just the fifth amendment but
others, if he answers any questions.
And he gave his name and address and he permitted himself to be
sworn. He has appeared voluntarily without anv need of subpena. We
think the witness has done all that is required by the law.
Mr. Sanders. May I ask this? INIr. Johnson, do you intend to assert
all of your constitutional privileges to any question T would ask con-
cerning your activities for oi- on behalf of the Mills campaign for the
Presidency in 1972?
7697
Mr. Williams. Now, I object to this. This is exactly what we got
into before. And since the McCarthy days it has been recognized — and
Ave don't want this witness to be put into this position — ^it has been
recognized you can't ask questions like "Wlien did you stop beating
your wife?" — those kinds of questions. And what has been done in the
past is when the witness has indicated an attempt to invoke the fifth
amendment, then the questioning has stopped. I mean, you know, you
could ask him ""WTien did you stop beating your wif e ?"
Mr. Sanders. I don't intend to ask a question like that.
Mr. Williams. Well, don't ask any questions then. He has read his
statement.
Mr. Sanders. I have several categories here, but they would all per-
tain to the Mills for President campaign in 1972.
Mr. Williams. Well, you have gone over this once.
Mr. Sanders. What I am saying is, are you saying that you would
invoke that same privilege to every question in that period ?
Mr. Williams. He has stated before, his employment and periods
thereafter, and that encompasses today, tomorrow, and whatever. The
statement speaks for itself, Mr. Chairman.
Mr. Sanders, you had a number of opportunities during the last
year to talk to these witnesses. Now, all of a sudden right after the
chairman says that in his opinion the President is going to be knocked
out of office, then we have this sudden interest in him
Mr. Sanders. That predated any criticism by Chairman Mills and
I think you are making undue use of the record for propaganda pur-
poses and I think it is improper. You are making accusations and
requii'ing me to respond to them.
Mr. Williams. I am not requiring you to do anything. As I say, he
turned over the records. You can read them at your heart's content.
Mr. Sanders. Well, if the chairman feels that the witness has suffi-
ciently invoked his privilege
Senator Talmadge. That is my understanding of what the witness
Mr. Hamilton. May I make a suggestion ?
Senator Talmadge. Sure.
Mr. Hamilton. May I suggest that you rule that his refusal to
testify is justified on the basis of the fifth amendment, and the fifth
amendment alone, and not other unspecified constitutional privileges?
Mr. Williams. You are requiring, in effect, the chairman to mle in
such areas as the invasion of rights of priva'cy and you could get into
any number of areas. Noav he says he asserts all of his constitutional
privileges. I don't think it is fair to put the chairman in the position
of limiting it to just one privilege,
hear that.
Mr. Williams. I don't think it is right for the chairman, even as
astute as he is, to ask him these questions, some of which the Supreme
Court hasn't ruled on, is in fairness to him.
Mr. Hamilton. If you would like to argue his right of privacy and
why the chairman should rule right now on that, we will be happy to
Mr. Hamilton. That is the purpose of the presiding officer.
Mr. Williams. I accept his ruling and, if you gentlemen agree, we
can adjourn.
7698
Mr. Hamilton. But I suggest that the ruling be couched in terms of
the fifth amendment.
Mr. Williams. Well I object to that. What would happen then, we
would be laying inadvertently aside his other constitutional rights.
Senator Talmadge. If I understand the witness' statement cor-
rectly, he invoked each and every provision of the Constitution that he
possesses, including the right for protection against self-incrimination
under the fifth amendment. And it was the ruling of the chairman
that if he invokes the fifth amendment, that would prohibit further
interrogation of the witness based only on that.
Mr. Williams. That is right. We accept that too.
Mr. Sanders. May I ask a couple of additional questions that would
relate only to the i*ecords ?
Mr. WiLLL\MS. Now, you had your chance to do that.
Mr. Sanders. I have not had my chance. You stated three answers to
questions that I hadn't even asked, and I have not asked a single ques-
tion on the records.
Mr. Williams. Now, he read his answer. If you want to talk to him
privately, that is fine. You see the point I am making
Mr. Sanders. Mr. Cliairman, I would like to ask the witness one or
two or three questions concerning the records that he has produced
pursuant to the subpena duces tecum.
Mr. Williams. He has read his statement. First, there was no sub-
pena. We didn't require a subpena. This man has appeared voluntarily.
Senator Talmadge. I think that is irrelevant. The only thing that is
relevant here is whether he has invoked the fifth amendment and, as I
understand the witness, he has. I think that would
Mr. Williams. I want to state that if Mr. Sanders wants to ask pri-
vately about the information, we would be happy to liave that.
Mr. Sanders. I want to ask about everything you received from
him, Mr. Johnson, and all of the
Mr. Williams. I stated that he has turned over everything he had
received from me. I don't know what the Prosecutor has furnished. I
am not that privy to Mr. Jaworski's actions.
Mr. Sanders. I think we have gone about as far as we can go, Mr.
Chairman.
Senator Talmadge. That is my conclusion, gentlemen, unless you
can negotiate amongst yourselves and find out what areas he is willing
to testify on, if any.
Mr. Sanders. I thank you very much, Mr. Chairman, for your
time.
Mr. Williams. Would this constitute a dismissal of the witness?
Senator Talmadge. Is there anything further ?
[No response.]
Senator Talmadge. It does.
[Whereupon at 3 :50 p.m. the committee recessed, subject to the call
of the Chair.]
THURSDAY, APRIL 11, 1974
U.S. Senate,
Select Committee on
Presidential Campaign AcTivrriES,
Washington^ D.C
The Select Committee met, pursuant to notice, at 11 :13 a.m., in
room G-334, Dirksen Senate Office Building.
Present : Senator Baker, presiding.
Also present : James Hamilton, assistant chief counsel ; and Donald
Sanders, deputy minority counsel.
Senator Baker. The committee will come to order. We have today
Mr. Chestnut as our witness. We are ready to proceed. Would coun-
sel identify themselves for the record.
Mr. Thomson. My name is Douglas Thomson, lawyer from St. Paul,
Minn. My address is 55 East Fifth Street.
Senator Baker. Thank you, sir.
Mr. Cochrane. I am John Cochrane, lawyer, St. Paul, Minn. My
address is 830 Minnesota Building, St. Paul, Minn.
Senator Baker. Thank you, gentlemen. My name is Howard Baker.
I am vice chairman of the committee. This proceeding is in the nature
of an executive session of the Select Committee on Presidential
Campaign Activities, which is authorized to be conducted imder the
provisions of the resolution creating the committee and the rules and
bylaws of the committee.
I understand the subpena now has been served on Mr. Chestnut. I
would ask that counsel make that subpena part of the record at this
point.
[The material referred to appears on page 7704.]
Senator Baker. Mr. Chestnut, if you would stand and raise your
right hand, I will administer the oath now.
Mr. Cochrane. If I could make just one statement, Senator. As I
understand the rules of this committee, these hearings are secret and
confidential under executive session under rule 12 of your rules.
Senator Baker. That is correct.
Mr. Cochrane. I would ask the Senator to instruct me, the witness,
Mr. Thomson, and other counsel present and the reporter that they are
so secret, shall remain secret until the committee, by majority rule,
decides to make them public or not.
Senator Baker. The request is perfectly in order and is entirely
agreeable, and the chairman so instructs.
Mr. Cochrane. Thank you.
Senator Baker. Mr. Ctiestnut, would you hold up your right hand,
please. Do you solemnly swear that the testimony you are about to
(7699)
7700
give will be the truth, the whole truth, and nothing but the truth, so
help you God ?
Mr. Chestnut. I do.
Senator Baker. Thank you, sir; you may be seated. And if you
would identify yourself for the record, please.
TESTIMONY OF JACK CHESTNUT, ACCOMPANIED BY DOUGLAS W.
THOMSON AND JOHN A. COCHRANE, COUNSEL
Mr. Chestnut. I am Jack Chestnut. I reside at S282 Owaso Heights
Boulevard, St. Paul, Minn.
Senator Baker. Thank you, sir. Would counsel then proceed with
the examination of the witness.
Mr. Sanders. Yes, sir. Would you state your office address, please ?
Mr. Chestnut. 854 Midland Bank Building, Minneaj>olis, Minn.
Mr. Sanders. Now, you previously appeared before personnel of
the committee for interview on October 18, 1973. and we have a tran-
script of Ward & Paul of that interview. We asked you at that time
a number of questions about your personal background, your work
in the campaigns for Senator Humphrey, and I don't want to take the
time to cover all of that ground again. I might just summarize myself,
quickly, for the purposes of this transcript.
My understanding is that you are practicing law in Minneapolis
at the present time, with the firm Chestnut, Brooks & Burkhart ; that
you served for Senator Humphrey as an advance man from 1963 to
1968; that you were his campaign manager for his 1970 senatorial
campaign ; and his campaign manager for his 1972 Presidential cam-
paign. Is that correct ?
Mr. Chestnut. Senator, counsel, upon advice of counsel, I respect-
fully refuse to answer upon the grounds that it may tend to incrimi-
nate me.
Senator Baker. Thank you, sir.
Mr. Cochrane. Senator, may I say I have advised — Mr. Thomson
and I have advised our client to give this specific answer to all ques-
tions put to him at this executive session, and we will do that.
Senator Baker. All right. Now, to qualify the questions and the
claim of the witness, let me put a few questions, if I may.
Mr. Cochrane. Yes, sir.
Senator Baker. You understand the nature of the questions put
by counsel? Is it agreeable for your client to answer these questions?
If not, you may say so.
Mr. Cochrane. Well, I am sure Mr. Chestnut understands the
questions, but T have instnicted him to assert his fifth
Senator Baker. Answer no questions at all ?
Mr. Cochrane. Answer no questions and assert the fifth amendment
privilege.
Senator Baker. Well, that is a little broader, really, than the Chair
would care to rule on in one ruling; that is, that any question that
might be put in this session would be subject to the claim of personal
privilege under the fifth amendment to the Constitution. And my pur-
pose in asking the question I just did, was to lay the basis for asking
him if he would answer any questions at all, regardless of their nature
and content.
7701
Mr. Cochrane. He would assert the fifth amendment privilege upon
advice of counsel on any question put to him, on the nature of any
inquiry legitimately made under Senate Resolution 60, pertaining
to any area of inquiry that this committee may choose to delve in.
And I am sure the committee is not going to go into areas not qualified,
so in any areas legitimately before the committee, he will assert the
constitutional privilege against self-incrimination.
Senator Baker. Thank you, sir. Does counsel have anything further?
Mr. Sanders. Senator, I would propose this course, so we don't un-
necessarily prolong the proceeding.
There were about half a dozen, roughly, categories of information
that we intended to inquire about. And I would propose simply asking
maybe one question in each category to establish that he will not
answer in that area.
Senator Baker. I think the statement of counsel probably already
answers that, I think, to track the procedures that the committee has
followed in the past, that what you suggest is appropriate, Mr.
Sanders.
The Chair specifically disclaims any desire to run this witness
through a long series of constitutional claims. But to make the record
complete, I think it is appropriate to ask not more than one question
in the major categories of inquiry that you had in mind, and that the
claim be made in those respects. So the Chair rules that you may pro-
■!eed in that respect.
Mr. Sanders. All right. Mr. Chestnut, are you acquainted with
1 obert. Lilly of Associated Milk Producers, Inc. ?
Mr. Chestnut. Senator, upon advice of counsel
Senator Baker. You can paraphrase that you make the same claim
in this respect.
Mr. Chestnut. I make the same claim.
Senator Baker. Thank you, sir.
Mr. Sanders. Did Mr. Lilly make a $10,000 contribution in May of
1970 to the Humphrey campaign ?
Senator Baker. You make the same claim ?
Mr. Chestnut. I make the same claim.
Senator Baker. Thank you.
Mr. Sanders. In October of 1970, did Mr. Lilly make a $12,500 cash
contribution to the Humphrey campaign ?
Mr. Chestnut. I make the same claim.
Senator Baker. Thank you, sir.
Mr. Sanders. Mr. Chestnut, did you have any involvement in ar-
ranging for Associated Milk Producers to make a payment to Len-
nen & Newell, Inc. of New York City on the account of Senator Hum-
phrey in 1970?
Mr. Chestnut. Senator, I make the same claim.
Mr. Sanders. Did you have any involvement in 1971, in arranging
for the payment by Associated Milk Producers Inc., a payment to
Valentine, Sherman & Associates which was credited to the account of
the Humphrey campaign at that time?
Mr. Chestnut. Senator, I make the same claim.
Senator Baker. Thank you, sir. Do you have other questions?
Mr. Hamilton. I was going to do that area, Senator, and Don's
question takes care of it.
7702
Senator Baker. All right, fine.
Mr. Sanders. Do you have knowledge, Mr. Chestnut, of any arrange-
ments which were made for the sale of Archer-Daniels-Midland stock
by persons, to the end that they could make a contribution of proceeds
of these sales to the Humphrey campaign in 1972 ?
Senator Baker. Same claim ?
Mr. Chestnut. Senator, yes ; I make the same claim.
Mr. Sanders. Did you participate in a contact with John Loeb in
1972, for the purpose of seeking from him a contribution to the
Humphrey campaign?
Mr. Chestnut. Senator, I make the same claim.
Senator Baker. Very well. The Chair rules that the questions put
by Counsel are relevant; under the scope and the authority of the
committee according to Senate Resolution 60, and understands that
the witness has, on the advice of counsel, declined to answer each ques-
tion without, as far as the Chair can ascertain, a question as to the
relevance of the question.
Mr. Cochrane. Well, Your Honor; Your Honor, if I may
Senator Baker. I am not going to ask you to say that. The Chair
rules that the questions put are relevant and are within the scope and
purview and the authority of the committee, under Senate Resolution
60, and understands that the witness has claimed his privilege accord-
ing to the fifth amendment to the Constitution with respect to each
question ; is that correct ?
Mr. Cochrane. That is correct.
Senator Baker. Thank you, sir.
Mr. Cochrane. Can we make an exception to the Chair's ruling?
Senator Baker. Yes, you may.
Mr. Cochrane. Thank you.
Senator Baker. Now, does counsel have any other matter, any other
proceeding or any other questions ?
Mr. Sanders. I just have one more remark, Senator, if I may. And
that is that I think counsel's and the witness' invocation initially of the
privilege is even broader than the categories I have inquired about. But
I did want to insure that the understanding here, today, is that the in-
vocation is not necessarily limited strictly to the categories I have in-
quired about, because there are tangential matters relating, and I say
here, to the 1972 Presidential campaign. And I would like to be sure
we understand that any questions concerning Mr. Chestnut's service for
Senator Humphrey in the 1972 Presidential campaign would receive
the same claim of privilege.
Mr. Cochrane. You are quite correct, counsel.
Senator Baker. And you understand, of course, that the Chair's
rule is that your questions, including the questions about the 1972 cam-
paign, are relevant and within the scope and jurisdiction of the
committee.
Mr. Sanders. Yes, sir.
Mr. Cochrane. An informational point, Senator, Your Honor, Are
we entitled to a transcript of this ?
Senator Baker. You are entitled to see the transcript, and you are
entitled to receive and purchase a copy of the transcript on the au-
thorization of the committee ; and I will be glad to recommend to the
committee that they authorize that if you wish.
7703
Mr. Cochrane. I would appreciate that, Your Honor. We, therefore
order— Senator, we order and will pay for, either upon receipt or
advance billing, we will pay.
Senator Baker. The matter will be taken up then at the next execu-
tive session. You will be notified. In the meantime you are free to see a
copy as soon as it is transcribed.
Mr. Cochrane. Thank you, sir.
Senator Baker. Very good. The hearing is adjourned.
[Whereupon, at 11 :25 a.m., the hearing in the above-entitled matter
adjourned.]
7704
UNITED STATES OF AMERICA
Congre^2( of tlje Winitth States
yo JACK CHBSTTIUT
., (Erecting:
^m^nmt to lawful authority, YOU ARE HEREBY COMMANDED to
appear before the SENATE SELECT COMMITTEE OJV PRESIDEA'TIAL
CAMPAIGir ACTIVITIES of the Senate of the United States, on
April 11 , iP7. 4, at Meven o'clock „ A„. rn.,
at their committee room 3-3:^^i3.J^^..^J^^±S>tIl!k§..:^^2^^^^ ,
then and there to testify what you may know relative to the subject
matters under consideration by said committee.
IB^ereo! fail not, as you will answer your default under the pains and pen-
alties in such cases made and provided.
To _4.^?wi^A..<-3 \mJ^vij:.]..t!Vi
to serve and return.
@iben under my hand, by order of the committee, this
11th day of AB?il , in the year of our
Lord one thousand nine hundred and^..?.Y.^rz1i^~.?.9}i.K.
-^^r^
i^iiti Chair man, Senate Select Committee on Presidential
Campaign Activities.
7705
CiA.r^:yl II ,197}.^
I made service of the within subpena
hij \\A^A
the within-Jiained
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at iL±J...t::'.. o'clock ..H.. la., on
the ,.1L.S1. daij
of CifltLi .., 197^.i
iSi<^ned
U.S. covrKrjHEHT FiilNTlNC OFFICE 10 — 8:;CS2-1
FRIDAY, APRIL 26, 1974
U.S. Senate,
Select Committee on
Presidential Campaign Activities,
Washington^ D.G.
The Select Committee met, pursuant to notice, at 10 a.m., in room
4300, Dirksen Senate Office Building, Senator Daniel K. Inouye,
presiding.
Present : Senator Inouye.
Also present : Robert Muse, assistant majority counsel, and Donald
G. Sanders, deputy minority counsel.
Senator Inouye. Raise your right hand, sir.
Do you swear that the testimony you are about to give is the truth,
the whole truth, and nothing but the truth ?
Mr. Pepper. I do.
Senator Inouye. Your name and address, sir.
TESTIMONY OP GERALD R. PEPPER
Mr. Pepper. Gerald R. Pepper, Ames, Iowa.
Senator Inouye. Thank you very much.
Mr. Sanders. Thank you very much. Senator.
[Whereupon, the Select Committee recessed briefly, to reconvene at
10:15 a.m. in room G-334, Dirksen Senate Office Building.]
Mr. Sanders. Mr. Pepper, would you state your business association ?
Mr. Pepper. I am executive director of the Iowa Institute of
Cooperation.
Mr. Sanders. And what is your business address ?
Mr. Pepper. It is 63 Ninth Street, Ames, Iowa.
Mr. Sanders. How long have you served as executive director?
Mr. Pepper, Approximately 12 years.
Mr. Sanders. So you were serving in that capacity in October of
1971 and September of 1971 ?
Mr. Pepper. That is correct.
Mr. Sanders. Was there, on or about October 2, 1971, a function
sponsored by the Iowa Institute of Cooperation in Ames?
Mr. Pepper. Yes ; there was.
Mr. Sanders. Would you describe that, please. "What was it?
Mr. Pepper. The function was designed to promote an annual pro-
motion. It was a rally. It was attended by somewhere between 7,000
and 8,000 persons. It was held in the James Hilton Coliseum, which
happened to be the first meeting of any function held in that building.
The idea primarily was to focus attention of as many people as we
could on agriculture and agriculturally related cooperatives.
Mr. Sanders. The event, then, on October 2, was to highlight Iowa
Cooperative Month?
Mr. Pepper. That was the function ; that was the purpose.
(7707)
7708
Mr. Sanders. Did you have an annual event of that nature ?
Mr. Pepper. Not an annual event of that nature. We had an annual
event called cooperative month, but never one of the magnitude that
this turned out to be. In prior years, I might add, we always secured
a proclamation from the Governor of the State. We always developed
and sent to participating organizations advertisements, this type of
thing, that they could use in highlighting the program statewide.
Never, prior to this particular time, did we have a large meeting
function of this type.
Mr. Sanders. Wliat was the next previous statewide function spon-
sored by the Iowa Institute ?
Mr. Pepper. This would have been our own annual meeting, I sus-
pect, that we have annually. It would have been the Tuesday before
Thanksgiving of 1971. No, I guess that wouldn't be — well, it would
be afterward. Other meetings would have been training programs for
managers and directors of farmer cooperatives within the State. We
do this every winter.
Mr. Sanders. My question was, before October.
Mr. Pepper. Well, this would be an annual thing. I suspect it would
be the next statewide function, and we had conducted — now, we did
have
Mr. Sanders. Earlier in 1971 you had had some other statewide
function ?
Mr. Pepper. Well, I am not exactly sure I understand, but in our
continuing program, annually we would have had in 1971, early, like
in January, we would have had a series of meetings that we would
have conducted throughout the State whose purpose was designed to
provide training for managers and directors to better do their jobs.
And this wo aid have been sometime in January of that year.
Mr. Sanders. Does the Iowa Institute of Cooperation have member
co-ops throughout the State ?
Mr. Pepper. Yes. Yes, we are composed of approximately 200 local
farmer cooperatives, and all of the, nearly all of the regional-type
farmer cooperatives that operate in the State, even though they may
be headquartered outside of the State.
Mr. Sanders. Is the institute funded or financed by means of con-
tributions or assessments from each of these co-ops ?
Mr. Pepper. We have called them mer bership dues, and they are
based on gross volume of business, with minimums and maximums.
Mr. Sanders. Are all of the co-ops related in one way or another
to agriculture?
Mr. Pepper. Yes.
Mr. Sanders. How did the October 2 event originate ?
Mr. Pepper. Well, the first thing that happened, I would suspect,
is that sometime in the spring of the year I, as an annual affair,
requested a proclamation from the Governor of the State to identify
cooperative month in October. We had secured that commitment from
the Governor and had developed materials for distribution to coopera-
tives— copies of the proclamation, and newspaper advertisements,
radio scripts, and all of this type of thing.
And tney had in fact gone out to the membership, not only to the
membership, but to all cooperatives, members and nonmembers alike,
by September 1.
7709
At this point in time I thought it was probably all set from my stand-
point, and we probably would not have done anything in advance.
Now, on Labor Day of that
Mr. Sanders. Let me interrupt you for a minute.
Mr. Pepper. Yes.
Mr. Sanders. As executive director of the institute, were you also,
then, immediately responsible for the management of this October 2
event ?
Mr. Pepper. Yes. We have a person — this is a national event, and
we coordinate with the national program. And this has been through
evolvement over a number of years, and we have historically accepted
the responsibility for the State of Iowa to do this. And because of my
job, I am the one that does it.
Mr. Sanders. Well, up to September of 1971, had you already
planned and scheduled the program for the October 2 event?
Mr. Pepper. No.
Mr. Sanders. It was still an open matter as to what the program
Mr. Pepper. There was never an intent at that point for there to be
a program. No one was even cognizant that there was such a possibility.
Mr. Sanders. Oh, are you saying that up until September there was
no one event planned ?
Mr. Pepper. There was no rally planned, as it turned out, no.
Mr. Sanders. It was just to be a whole month of recognition of the
cooperatives ?
Mr. Pepper. Right, this is right.
Mr. Sanders. Well, in previous years when you had a co-op month,
was there some day during those months when there would be a
rally?
Mr. Pepper. No, not in Iowa. There had been in other States. But
not in our State.
Mr. Sanders. All right. Now, during the first part of September,
did you receive any communication from Congressman Wilbur Mills ?
Mr. Pepper. I did.
Mr. Sanders. Could you explain how that occurred and when it was ?
Mr. Pepper. It was on Labor Day of 1971. That is the reason I
remember it specifically. I was at my home in Ames, and it seems to
me it was some time shortly after lunch, but I am not quite sure of that.
The telephone rang and I happened to be the one that was closest to it,
and I picked it up. And there was a young lady's voice, and she said,
"Mr. Pepper." And I said, "Yes." And she said, "One moment please
for Congressman Wilbur Mills."
And I thought to myself, surely somebody's playing a joke or some-
thing of this kind. I picked up — or I waited." In a few moments a rather
noted voice came on the line and he said, "Mr Pepper." And I said,
"Yes." And he said, "This is Congressman Wilbur Mills from
Arkansas."
And I still thought somebody was proibably trying to pull my leg.
However, I sad, "Yes, sir." And he said, "Mr. Pepper, we have power-
ful problems in agriculture." And I responded, "Yes, this is true." And
he made a few comments that would be vague at this point.
But the next thing that I recall was that he said, "I wonder if you
would do me a personal favor." And I asked him what the nature of
it vras. And he said. "I wonder if you would rent the TTniversity of Iowa
football stadium and fill it with farm people and give me an oppor-
7710
tunity to come out and meet with them." My response was, of course,
that was kind of a large request, and I didn't really know, but indi-
cated that there was a possibility that we might be able to put on some
kind of a function, and I would have to explore that possibility and
think it through.
And he invited me to call him back at his apartment on the following
night, which I believe was a Tuesday. After I sat back and thought this
thing over rather carefully, I wondered just exactly what we could
do, and I visited various and sundry friends in our area to deter-
mine whether or not this was a feasible project for us.
And the more I thought about it, the more I thought that, well, this
is co-op month. Here is a tremendous opportunity to focus attention on
this program. And so I called the Congressman back at his apartment
the following evening, Tuesday, and I told him what I felt that we
could do. I stated it this way :
I indicated to the Congressman that, first of all, any program that
the institute was involved in had to be bipartisan. The reason for
this was that the institute is composed of cooperatives that are com-
posed of farmers who are from all political parties. As a result of
this, we have not participated in any partisan activity, nor would we
dare. I would be chastised by my board of directors. I would not be
able to respond effectively to the membership. And so that was the first
requirement.
The Congressman indicated, "by all means." Those were his words.
The second thing that I said was that the meeting could not be
held at the University of Iowa football stadium for a number of
reasons, but if we needed any particular reason, it could rain that
day and that would be a terrible situation, to have all those people in
that rainy atmosphere and so forth. And I didn't like that. And I
did propose the opportunity to perhaps be the first group to meet
in the new Hilton Coliseum, which would hold about 15,000 people,
if we were able to turn them out — this was agreeable.
The third thing that I insisted on was that I would have the final
say as to program, that I would be accountable for it, and from my
standpoint I had to have the final veto of any promotion, project, or
anything that might eventually reflect upon our organization.
That was agreeable. He thanked me and indicated that "someone"
would be in touch with me. He didn't really identify the "someone,"
nor who the "someone" represented.
That is how it started.
Mr. Sanders. At that point, the date of October 2 had not yet been
selected ?
Mr. Pepper. That's right.
Mr. Sanders. When was that chosen ?
Mr. Pepper. I am not sure that I can recall specifically. I do know
that there was some question about Avhat date the coliseum would be
opened or would be available, and they were pressing for a deadline.
I'm not really sure I can recall.
Mr. Sanders. Subsequent to the second telephone conversation with
Congressman Mills, were you contacted by anyone representing them-
selves as acting on his behalf ?
Mr. Pepper, Yes. I received a call from Joe Johnson, Joseph P.
Johnson, who was traveling in our State, or seemed to be, and agreed
to meet with him and visit about the proposal and the plan.
7711
Mr. Sanders. He called, you ?
Mr. Pepper. He called me, yes. We agreed to meet and did.
Mr. Sanders. Did he make reference to the contact by Congressman
Mills?
Mr. Pepper. No. No ; I don't believe so.
Mr. Sanders. Do you remember how he initiated the conversation ?
Mr. Pepper. He introduced himself.
Mr. Sanders. You had not known him previously ?
Mr. Pepper. No; I had never seen him nor known the name. And.
the telephone call, it seems he said — he introduced himself on the tele-
phone and indicated that he was to get in touch w^ith me to discuss
the co-op rally event. And his identification was as a representative of
Associated Milk Producers.
Mr. Sanders. All right. Then did you meet with him ?
Mr. Pepper. Yes ; we met and we talked over the same things that
I had told Congressman Mills, what I w^ould insist upon if the pro-
gram were to be conducted. And at this point he advised me that I
didn't have to worry about money. Nobody had ever told me that
before, because you know, in our kind of operation you had to worr}'
about the income as well as the expense. But he indicated my responsi-
bility would be released to spend my time on developing the program,
the promotion that went with it, and that he would be — the matter of
jfinancial arrangements would be his obligation.
Mr. Sanders. Was this within a few days following your phone
conversation with Congressman Mills?
Mr. Pepper. This was on Wednesday, this was the following day
that I called back — in the morning.
Mr. Sanders. In other words, Johnson contacted you a day after
your second conversation with Congressman Mills?
Mr. Pepper. That's right.
Mr. Sanders. Did Johnson discuss with you the matter of a formal
invitation to Congressman Mills?
Mr. Pr^ppER. He did not say anything at that time about it.
Mr. Sanders. Did he subsequently ?
Mr. Pepper. Yes. In the afternoon he called me back. I am a little
vague if it was Wednesday afternoon or early Thursday morning. But
I'm quite sure it was Wednesday afternoon. And he called me back
from Des Moines. I believe, and asked me if I could be in Washington
at 10 o'clock Friday morning. And my response was, "No; I can't be,
because I have scheduled a meeting with my executive board of di-
rectors in Ames for Friday."
And his response was,* "Well, would you — is it possible that your
board could meet on the plane going to Washington?" And that was
kind of a shock, and I indicated that I didn't know for sure, but I
thought it might be appealing to the board. And as a consequence, I
said, "I will check it out and let you know."
And so I did. I called every member of the board of directors, and
they agreed that they would do this. I assumed that we would be on a
commercial flight. I did not know what it would be. But on the call
back to him, I told him that the board was meeting.
He said, "Have them at the airport at Des Moines at 8 o'clock on
Friday morning." OK, so we contacted all of our directors, all execu-
tive board members. They all met at the airport about 7 : 45. And we
7712
were taken across to the private hangars, and there were two air-
planes. There was a Jet Commander and there was a I^arjet, and
we were put aboard the two planes, and approximately an hour later
we were in Washington.
Mr. Sanders. When you first met with Johnson on Wednesday, did
he talk with you about the appearance of Congressman Mills at the
rally ? Did the two of you discuss
Mr. Pepper. I think he must have. AVe must have discussed it, be-
cause my only contact at this point had been with the Congressman,
and I'm sure we did.
Mr. Sanders. So would the two of you have discussed Congress-
man Mills' call to you and his interest in talking to the Iowa farmers ?
Mr. Pepper. I'm sure that I must have talked about this, because
there was no other reason for conversation. This was the only thing
that had occurred.
Mr. Sanders. When Johnson called you back later, on Wednesday,
did he then ask you if you could go to Washington? Did he tell you
why he wanted you to go to Washington ?
Mr. Pepper. No ; he didn't. He didn't tell me why. I think he may
have said that — I think maybe he said to meet the Congressman, and
that was about it.
Mr. Sanders. You surely wouldn't pack up your whole board and
carry them into Washington without having some idea of why you
were coming to Washington.
Mr. Pepper. Well, generally speaking ; no. But the idea, I'm sure,
was that here would be an opportunity for our people to meet the
Congressman himself, and the Congressman's prestige, particularly
at that time, was running pretty high. And to have a board meeting en
route, or in Washington, seemed like a fun thing to do, you know. I
mean, if somebody else is going to pay the bill, why, that is great.
I'd like to go for a ride.
Mr. Sanders. What happened when you arrived in Washington ?
Mr. Pepper. I should indicate that en route to Washington, John-
son told me that I would be expected to make an invitation. I didn't
exactly know anything beyond that. But he just Avanted to know if I
needed to have it typed out or written out or anything of this kind.
I wasn't quite sure what he was talking about, and I said, "You
mean you just want me to issue an invitation to the Congressman for
this event?" He said, "Yes." And well, it seemed a little strange, but
what the heck, the whole thing was strange. So I agreed to do this.
Mr. Sanders You didn't prepare anything in writing?
Mr. Pepper. Oh, no. No; it wasn't necessary. I think I know how to
issue an invitation when it comes to something like that.
And so we landed at, I think it's called Page Airport. And we were
met by three taxicabs. We were loaded aboard these cabs. And to this
day I don't know the names of the buildings, except it's where the
House Ways and Means Committee hearing room is. I don't recall
for sure what that building's name it. We were ushered in. and taken
in eventually, after a period of waiting, to the House Ways and Means
Committee hearing i-oom. And in tlio room there were a large number
of people, and nobody indicated prior to this that there would be any-
one there except the Congressman.
7713
I have met a few Concrressmen in my life, and I just figured we'd go
into his office and shake hands and liowdy a bit and that's it. But this
was different. There w^ere a large number of people there, and the
meeting appeared to be under the control of David Parr. He was tlje
one who made the introductory statements. We were lined up as we
entered the room. The Congressman came in, in a little bit, and he met
each of my directoi's, and shook their hands.
I was the last one. and introduced myself to him. And then there
was a series of chairs set up and I was a pretty good-sized fellow, and
the Congressman made a very particular point of getting a very
large chair and bringing it up and setting it near the end next to me.
And then he took a very small chair and sat right beside me. And
this made me uncomfortable, because at this point I felt that I was not
at home in this kind of a situation, and I didn't quite understand what
was going on.
After Mr. Parr started his remarks and they identified some of the
people in the audience— and most of those that I recall identified,
Avere people from the dairy industry — as soon as our discussion started,
alongside me on this side were other people, presidents of farm co-ops
and that type of thing. And he was over here, and as soon as the meet-
ing started, then he conveniently lifted his chair and set it over so
that he would be at flank to the group.
And then it became more obvious to me that there was some staging
involved in all of this, and this bothered me a great deal. Mr. Parr
introduced me and I offered my invitation. The Congressman re-
sponded and accepted the invitation. And after all of this was done
and everybody was invited to go around shaking hands with the Con-
gressman and they took his picture and identification, name, and all
of this business — local newspapers, I guess, and all of that — this fur-
ther bothered me. and it perhaps could have bothered some of my di-
rectors because they were unfamiliar with this entire setting. As soon
as the pictures were taken and all of this business, my board and I
went to lunch in the building and we held a brief board meeting in
the "Ways and Means Committee meeting room. And then we were back
in Des Moines by 3 :30.
Mr. Saxders. This occurred on the first Friday following Labor Day
in September 1971 ?
Mr. Pepper. Yes.
Mr. Sanders Approximately how many directors did you bring to
Washington ?
Mr. Pepper. Exactly 10.
Mr. Sanders. You have just now told us that in this House Ways and
Means Committee hearing room you issued an invitation to Congress-
man Mills — would you be more specific in that respect ?
Mr. Pepper. I probably said something to this effect, that — this is
hard to recall here, but t would have said — "On behalf of the Iowa
Institute of Cooperation, the farmer members in our State would like
to extend to you an invitation to participate in our cooperative month
rally October 2." That's about what I would have said.
Mr. Sanders. The date had already been chosen by that time ?
Mr. Pepper. Again, I'm not positive. But I doubt if it had. It may
have been a little more vague than that, because this was very early in
the event.
7714
Mr. Sanders. Now, there have been some Associated Press news ac-
counts of recent months in which it has been stated that a spokesman of
Congressman Mills said he received an unsolicited invitation to speak
at that event. The facts you've just related to us would seem to indicate
that the remark of Congressman Mills' spokesman is not correct. Is
that true ?
Mr. Pepper. The remarks of Congressman Mills' spokesman, as far
as I'm concerned, is absolutely incorrect. And I think that you will find
there later on, in some news releases, there was a concession on behalf
of the Congressman that he may have made the call.
Mr. Sanders. I might mention for the record that I am looking
specifically at an AP story appearing on March 25, 1974, in the Des
Moines Tribune.
While you were in Washington on that occasion, did you meet Gene
Goss, administrative assistant to Congressman Mills?
Mr. Pepper. I do not know. A number of people were introduced
rapidly and with only a few exceptions can I recall their names.
Mr. Sanders. Yes; there is another account in that Des Moines
Tribune, March 30, 1974, in which Mr. Goss is quoted as saying, "Mr.
Mills does not specifically recall a conversation with Mr. Pepper, but
concedes the possibility it took place."
Mr. Muse. May I look at those, Don ?
Mr. Sanders. I'm going to keep referring to these. I'll let you see this
whole package and give you a chance to question when I get through.
Mr. Muse. All right, good. Thank you.
Mr. Sanders. Did Johnson subsequently come to Ames and provide
services for the event to be held on October 2 ?
Mr. Pepper. Johnson came to Ames and he brought a large delega-
tion of people who were identified as staff members of Associated Milk
Producers. At different times there were different numbers there.
He established a bank account in an Ames bank, the same bank with
whom we have our general account in, and made whatever deposits he
had for the finances of the function. I had one check that came in my
mail that I turned over to him, and to the best of my recollection, that
was a $15,000 check from Mid- America Dairymen, made payable to
the Iowa Cooperative Month rally, and that was the name of the
account, the "Iowa Cooperative Month."
He brought the staff people in. They were very knowledgeable peo-
ple. They proceeded on promotional efforts, basic organization, and
this type of thing. And even at this point I was insisting that every-
thing that was to be done was to have my approval in regard to the
program aspects.
Mr. Sanders. Do you recall the names of any other AMPI personnel
accompanying Johnson ?
Mr. Pepper. Yes; Forest Wisdom was among them. John Holmes
was with them. I should have brought some notes.
Mr. Sanders. Tom Townsend ?
Mr. Pepper. Tom Townsend was with them ; right.
Mr. Sanders. Terry Shea ?
Mr. Pepper. Terry Shea, right. Mis. — a lady.
Mr. Sanders. Clement?
Mr. Pepper. Yes, Betty Clement ; right. She appeared to be in charge
of the clerical staff in the operation. They installed — we have a fairly
7715
large board of directors room that we also use for meetings — they in-
stalled a number of telephones and their own telephone setup back in
there.
Mr. Sanders. You provided office space to them within your own
quai-ters ?
Mr. Pepper. Yes.
Mr. Sanders. Did they have, to your knowledge, any independent
office space?
Mr. Pepper. It appeared, as the thing progressed, that they were
also using the Holiday Inn as kind of a central headquarters.
Mr. Sanders. Could you give an estimate of the total number of
AMPI personnel, the average number on the scene during September
in preparing for October 2 ?
Mr. Pepper. Well, that is rather difficult. I would suppose that there
were always half a dozen around, and a high of maybe 15 to 20 some-
times.
Mr. Sanders. At what bank was the account located ?
Mr. Pepper. First National Bank in Ames.
Mr. Sanders. Do you know under what name it Avas carried?
Mr. Pepper. Iowa Coopei'ative ^Nfoiith.
Mr. Sanders. Who had the power to draw on that account?
Mr. Pepper. Joe Johnson.
Mr. Sanders. Did you ?
Mr. Pepper. No.
Mr. Sanders. Did anyone with the Iowa Institute of Cooperation?
Mr. Pepper. No; no one other than Joe Johnson, as far as I krtow,
and I'm quite sure of this because I have in our safety deposit box the
statements and all the canceled checks that were written on the ac-
count. And the reason that I have tliem is, first of all, our address was
given as the address for the statements to be sent from the bank. Also,
I had the opportunity to review the checks, and at the end of the rally
in 1971 and after everything had been paid, I had been keeping —
Johnson had given me copies of every invoice that was paid. I still
have those.
At the end of that time, all of the money was dissipated with the
exception of $1,000 and, I think, 97 cents. At that period of time, the
bank accoimt was still there, and we were still getting the statements.
And I kept my eye on it because I thought, OK, this money was given
by somebody to promote Iowa Cooperative Month, and I thought it
would be a gross error if somebody were able to close that account
out. So I advised the bank that I would like to know in the event that
someone had intended to do that.
Then not, probably not over — it would have been in — our fiscal
year ends May 31, and I would suspect it would have been during the
month of May, 2 years ago, that this money was still there. And I
wrote Associated Milk Producers and suggested that the account was
still there, and that they ouffht to, if they had not other disposition, I
would like to have it turned over to the Iowa Institute.
I got a letter back from them indicating that they would consider
this possibility, and a tele])hone call — and apparently they were having
some difficulty. They said it was all right with them, but they were
having a little bit of difficidty with Johnson writing the check to
close the account ov.t. I didn't quite understand how all that could be,
but I didn't do too much.
7716
And then I called back to talk to Mehren, George Mehren, who is
the general manager now of Associated Milk Producers, and asked him
if I could have authorization to close out the account, because John-
son had been an employee at the time the account was established.
And they sent me a letter giving me that authority.
I took it to the bank. We closed out the account. We put the $1,000.97
into the institute's account, and gave the bank a copy of the letter,
and also advised the bank if there should be any problem in the future,
the institute would reimburse the bank if they were in any trouble.
Mr. Sanders. Did you at any time make any deposits to that
account ?
Mr. Pepper. No.
Mr. Sanders. Are you cognizant of the total amount of money de-
posited to that account ?
Mr. Pepper. Yes ; I am, at least as far as I made some calculations
based on the deposits that were made and totaled them, and I don't
have that figure with me.
Mr. Sanders. Is that in the vicinity of $30,000 ?
Mr. Pepper. I think it was in excess of that. I think it was closer
to $38,000 or $39,000.
Mr. Sanders. Do you know who provided those funds ?
You've already mentioned a $15,000 check.
Mr. Pepper. The only one that I knew for positive was the amount
that was deposited by the check that I inadvertently received. I had to
make the assumption that the rest of it was from Associated Milk
Producers. But I have no verification of that.
Mr. Sanders. You say you have all the bank records from that ac-
count ? Do the deposit slips not disclose the
Mr. Pepper. I have the checks and the statements, but no deposit
slips. And the only hope that I could have of ascertaining that
would be if the bank should have microfilmed deposit slips, and they
might have.
Mr. Sanders. Did Johnson ever reveal to you that AMPI was pay-
ing the expenses ?
Mr. Pepper. I don't think in so many words. It just seemed to me
that was the way it was.
Mr. Sanders. He had told you that you needn't be concerned about
the expense ?
Mr. Pepper. He had told me I needn't be concerned. He represented
AMPI, and I guess two and two made four as far as I was concerned.
Mr. Sanders. As you received bills for expenditures in connection
with the rally, then. I presume you forwarded them to Johnson for
payment ?
Mr. Pepper. I just handed them to him. We were in the same office
part of the time.
Mr. Sanders. Were rally expenses incurred which were paid by re-
sources other than from that bank accoimt ?
Mr. Pepper. There may have been some minor ones that I paid and
they reimbursed me for them. But there wouldn't have been anything
extensive.
Mr. Sanders. Substantially, that bank account, then covered the
total expenses of the rally ?
7717
Mr. Pepper. Of the rally itself ; yes. I did not determine any place in
the checks, though, that I reviewed where it would have covered any-
thing like the cost of the airplanes, the jets, or anything — and there
Avere some other expenditures that they made for me somewhere along
the line, because in several instances I was provided with a small plane
to get around the State of Iowa, so that I could conserve my time. Well,
there was one bill in there paid to an air company, as I recall, a charter
service. It didn't look like it was the same. It was payment for the
planes that were used on my behalf.
Mr. Sanders. Did Johnson make provision for you to make flights
around the State of Iowa?
Mr. Pepper. Yes.
Mr. Sanders. By that I mean, it w as Johnson was arranging for the
financial costs of those ?
Mr. Pepper. He was arranging for the financial costs. All he would
tell me was that — I would indicate usually considerably in advance
that — I have got to be at this town at 6 o'clock on this evening. And
he would identify the aircraft for me and tell me where it would be at
the Ames airport, and usually what the pilot's name was.
Mr. Sanders. Do you have any knowledge that any of your member
co-ops made contributions or were assessed for the expenses of this
rally?
Mr. Pepper. I don't think any of our member associations were
assessed for any expenses of the rally. They did help them in mailing
lists and in sending out perhaps some of the promotional materials to
farmers. They would be the only ones in a position to know who those
people were.
Mr. Sanders. Is AMPI a member of your institute ?
Mr. Pepper. They are not. They perhaps did have a couple of local
membere of theirs who are members of ours. However, AMPI was
not, had not been, and is not a member of the organization.
Mr. Sanders. How long after October 2 did AMPI personnel remain
on the scene ?
Mr. Pepper. We closed up, in the words of Johnson, like a circus
tent. As a matter of fact, I don't think they were — I know as a matter
of fact, most of their staff members went on to "Wisconsin that night
for another meeting with Congressman Mills. Some of them, I think,
went aboard the same aircraft.
Mr. Sanders. Did Congressman Mills speak to the rally ?
Mr. Pepper. Yes.
Mr. Sanders. Did you have any conversations with Congressman
]\Iills concerning the agreement or arrangements by which he came to
Iowa, other than what you have already told us?
Mr. Pepper. None that I am aware of. The only additional corre-
spondence was that after the meeting was over I wrote him a letter of
thanks, appreciation, and mentioned in that letter that I thought
that we had achieved certain aspects, such as focusing the attention of
a lot of people on agriculture and its problems.
Mr. Sanders. Early in 1974, did you complain that it appeared that
the cooperatives in Iowa had been used by the Wilbur Mills campaign
or personnel ?
My. Pepper, Early in 1974, I voiced agreement with the Governor
of the State when he indicated that cooperatives had been used. I did
7718
not identify, if I am correct, I am quite sure I did not identify that
the Congressman had used us. The Governor came out — I would like
to review, if I may, exactly how all this publicitj^ started.
Mr. Sanders. I wanted to develop that, so go right ahead.
Mr. Pepper. This will bring you up, I think, as to why I was irri-
tated at all.
Some time, I think it was in January, I was on a series of meetings
around the State and I had a telephone call from a man by the name
of Beauford who said he represented the Wright law firm in Little
Rock, Ark. He indicated to me that their firm had been commissioned
to conduct an internal audit of AMPI's money, and they were trying
to determine what happened to the money between 1969 and 1971.
I asked him, I said, "How do I know you are who you say you are?"
And he kind of stuttered and stammered a bit. And I asked him for
his telephone number, and I said, "I will call you back if this appears
to be legitimate."
I called Dr. George Mehren, who is now general manager of the
Associated Milk Producers and I said, "Is this a legitimate request?"
And he said, "Yes, I hope you will cooperate with the attorney."
So I called the attorney back and he asked me many, many ques-
tions about what had transpired with the rally situation. And I told
him everything that I knew.
Subsequent to that I got a call one morning, on Friday — I think it
was March 22, because I had a meeting scheduled that evening with
one of our Congressmen — and it was from Brooks Jackson, Associated
Press. And he said he had written an extensive story based on a court
report, and he had quoted me in it. And this came as rather a shock
because I wasn't even aware that the internal audit that had been
commissioned by the board of directors of AMPI had been turned over
to a court. No one advised me of this. So this came as a shock.
And so I asked him to review the quotes, and he did. And that was
tne purpose of his call. And with one exception they were accurate,
and I said they were accurate. And so the following Monday a story
came out in the Des Moines Register or Tribune, one or the other,
and the immediate publicity was kind of heavy where all of these
things that he had written had come out.
I had no problem, with one exception, because everything was ac-
curate as far as I could tell. And that exception was that the Congress-
man's spokesman had been quoted that he denied making the tele-
phone call. Now, it appeared to me that there were about four possi-
bilities. Either Pepper was a liar. Mills was a liar, Mills' spokesman
was a liar, or Mills' spokesman had the wrong information.
So this did irritate me greatly. I didn't like that kind of publicity.
On Tuesday the Governor of the State in a press meeting released his
commentary that cooperatives had been used. Well, having reviewed
from the news media everything that had happened with AMPI, it
was obvious that we had been used, and I felt that we had.
I also felt a tremendous responsibility to the Governor, who is a
Republican; to Senator Jack Miller, who was a Republican at the
time ; to Senator — Congressman Smith, who had been on our platform ;
to imiversity president, Robert Parks, who had appeared on our pro-
gram. And I felt that if I had misled the Governor in this instance I
had also misled these other people. And so I had two motives in writing
7719
the letter to the Governor, first to express a sincere apology and second
to put some words in there that some good reporter might pick up
and say, "Hey, what did you mean by this," so I would have an oppor-
tunity to get my story before the press. And that was the two purposes
of the letter.
The letter went to the Governor and an astute reporter in Des
Moines picked up the phraseology and asked me what I meant by it,
and I had the opportunity to tell him what I meant by it and the
opportunity, hopefully publicly, to justify our arguments.
Mr. Sanders. I will show you what I am marking as exhibit No. 1 to
this hearing and ask if you recognize it.
["Whereupon, the document referred to was marked Pepper exhibit
No. 1 for identification.^]
Mr. Pepper. Yes.
Mr. Sanders. What is it?
Mr. Pepper. This is the letter I wrote to the Governor of the State,
a letter of apology.
Mr. Sanders. Dated March 26, 1974.
Mr. Pepper. Correct.
Mr. Sanders. Have you since that time had any communication
from or with Congressman Mills' office ?
Mr. Pepper. No.
Mr. Sanders. During the month of September 1971, did you discern
any effort on the part of anyone to use the rally as a political forum
for Congressman Mills ?
Mr. Pepper. Yes ; on a couple of occasions — pretty hard to identify.
But the attitude of a few of the individuals was particularly pro-
Mills. Well, I mean there are pro-Mills people who are pro-Nixon
and all this type of thing. However, the one thing that did disturb
me that did occur is that a letter was sent by a man by the name of
Harry Oswald, who represented the Arkansas Rural Electric State
Association, to the rural electric cooperative managers in our State,
and this letter indicated his strong support for the Congressman, and
appeared to attempt to encourage Iowa rural electric co-op managers
to be strong; Mills supporters. And he included in his letter a copv of
a draft Mills label.
And when I learned of this information I immediately sent a let-
ter of my own to the rural electric cooperative managers that I knew
received it asking them to disregard it and maintain the thrust of the
meeting as we had planned it in its initial stages.
Mr. Sanders. "NYhat did Mr. Osw aid want the Iowa rural electric
co-op managers to do ?
Mr. Pepper. I don't really know. It would be a little difficult for me
to determine what his motives were.
Mr. Sanders. Well, what I mean is, was it explicit in his letter what
he wanted them to do ?
Mr. Pepper. May I see it ?
Mr. Sanders. Let me mark this exhibit No. 2, and I will hand, this
to you for identification.
[Whereupon, the document referred to was marked Pepper exhibit
No. 2 for identification.^]
1 See p. 7726.
= See p. 7727.
7720
Mr. Pepper. I would suspect that he was soliciting support for the
Congressman to be an active Presidential candidate.
Mr. Sanders. Do you recognize the exhibit No. 2? Have you seen it
previously ?
Mr. Pepper. Yes ; yes.
Mr. Sanders. Did you at some point come into possession of a copy
of this document ?
Mr. Pepper. Yes ; a copy was sent to my office by one of the rural
electric managers. And after I saw the copy I was quite concerned and
wrote my letter to the same people asking them to disregard it.
Mr. Sanders. And you are referring to this letter of September 14,
1971, from Hariy L. Oswald to Mr. Roger Peterson, manager of But-
ler County Rural Electric Cooperative ?
Mr. Pepper. Yes.
Mr. Sanders. Was it Mr. Peterson who sent the copy to you ?
Mr. Pepper. I'm not sure. I assumed that it was, but I don't know
that.
Mr. Sanders. Will you look at the attachment to exhibit No. 2 and
identify it, please?
Mr. iPEPPER. Well, the attachment was the label that was sent to the
Rural Electric Cooperatives in the letter by Mr. Oswald. It is a Draft
Mills for President label.
Mr. Sanders. This came to you Avith the letter — the attachment came
to you ?
Mr. Pepper. Yes ; the Xerox of the label came with the letter.
Mr. Sanders. Would it appear to you from this letter that Mr.
Oswald wanted his Rural Electrical Cooperative managere, directors,
and employees, to appear at the rally wearing the Mills for President
identifications ?
Mr. Pepper. Yes ; I think I would agi-ee that that is what he said.
Mr. Sanders. I'm going to mark as exhibit No. 3 a memorandum of
September 18, 1971, from Gerald Pepper to REC managers.
Can you identify that document ?
[Whereupon, the dociunent referred to was marked Pepper exhibit
No. 3 for identification.*]
Mr. Pepper. Yes; this is the memo that I sent to these people in
regard to persuading them to forget the Oswald letter, and concen-
trate on the intent oJf the program that we had originally established.
I might add that that was simply consistent with the original policj'
of keeping the program a bipartisan event.
Mr. Sanders. Subsequent to Joe Johnson's departure from Ames,
right after the rally, since that time have you had any conversations
with him concerning the event ?
Mr. Pepper. Yes; very brief ones in regard to bills that had not
been paid. That was about it. Immediately within a couple of weeks,
why. bills had come in. and I forwarded the bills to him in Washing-
ton. There was a Washington address, as I recall, and we might have
talked about one or two of tlie bills that had come in. But that was
the only conversation.
Mr. Sanders. Did it appear to you that your effort to keep the rally
from becoming a partisan event for Mills had any success?
* See p. 7729.
7721
Mr. Pepper. Yes ; I think it was successful in this regard. Until all
of this other information came out — Associated Milk Producers pub-
licity and so forth — I thought we had kept the thing pretty much on
a bipartisan line, and I thought that it was a good event.
I was really a little shaken after all of these other things came out.
I felt it was successful. It was a beautiful day in October and many
of our farmers were in the field, and we still got between, around 7,000
people, and I thought that was a success.
Mr. Saxders. The Des Moines Tribune news account of March 25,
1974, to which I previously made reference, also says this, quote : "But
the sponsoring group's executive director, Gerald R. Pepper, of the
Iowa Institute of Cooperation, said Mills appeared to be testing the
water for a possible Presidential run."
Is that an accurate quotation of what you have said ?
Mr. Pepper. Yes ; I think it is an accurate — I know it's an accurate
quotation. I did say that. And the only logic for having said it was
simply one of sixth sense as to the things that were going on, the con-
versation and the news at the time. There is nothing to document that
statement from my standpoint. I guess it was simply an opinion, really,
more than anything else.
But I did say it, I didn't know he was going to print it. But I did
say it.
Mr. Sanders. Did you have personal conversation with Governor
Ray concerning the event ?
Mr. Pepper. Prior to it ?
Mr. Sanders. No ; prior to 1974.
Mr. Pepper. No ; I talked to one of Governor Ray's administrative
assistants.
Mr. Sanders. Governor Ray is quoted in the Des Moines Register of
March 25 as saying that: "Iowa faim cooperatives apparently were
used in setting up what amounted to a Presidential campaign appear-
ance by Representative Wilbur Mills in 1971."
Do you have any knowledge that he did in fact say that?
Mr. Pepper. Could I prove that — no; I read it in the papers like
everybody else did.
Mr. Sanders. Did Governor Ray's aide say something to that effect
to you ?
INIr. Pepper. I called Governor Ray's aide after this came out and
I asked him if a letter of apologj' would be appropriate. He indicated
that it would be. And I have no reason to doubt that the Governor
said that.
INIr. Sanders. Did you provide any information to the person or
persons who spoke with you in connection with the investigation
of the Wright law firm doing the audit for AMPI ?
ISIr. Pepper. Would you restate that for me ?
Mr. Sanders. In talking with the person or persons from the
Wright law firm
Mr. Pepper. Mr. Beauford ; yes.
Mr. Sanders. Did you provide to them, any information concern-
ing this event which you have not told us today ?
Mr. Pepper. No. Well, I don't think so.
Mr. Sanders. No information of substance or significance 2
30-337 O - 74 - pt. 17 - 13
7722
Mr. Pepper. Not that I can recall. Certainly not that isn't in all
those documents that you have.
Mr. Sanders. I will show you what I have marked exhibit No. 4 for
identification.
["Wliereiipon, the document referred to was marked Pepper exhibit
No. 4 for identification.*]
Mr. Sanders. Off the record.
[Discussion off the record.]
Mr, Sanders. Back on the record.
I show you what I have marked as exhibit No. 4 and ask if you
can identify that for the record ?
Mr. Pepper. This is an advertisement that was placed in a num-
ber of papers in the State of Iowa. I believe this specific one was
placed in the Ames Tribune prior to the meeting announcing the
kickoff activities.
Mr. Sanders. Let's go off the record.
[Discussion oft' the record.]
INIr. Sanders. Back on the record.
T want to refer Mr. Pepper to the report of Wright, Lindsay and
Jennings to AMPI, dated March 13, 1974, pages 119, 120, and 121,
and I want to ask you just a couple of questions about some remarks
that were attributed to you. First, on page 120 it is said that you
told the Wright firm that "a few weeks after his conversation with
Congressman Mills. Mr. Joe P. Johnson of AMPI contacted him
about the rally."
Mr. Pepper. That's right — that's incorrect.
Mr. Sanders. As you told us today, it was a day
Mr. Pepper. Yes ; the following day.
Mr. Sanders. Second, the Wright report says that at the law firm's
request you reviewed the bank statements and checks for the rally
account and advised that they reflected a total of $38,319 deposited
to the accomit. Does that seem to you now to be approximately
correct ?
Mr. Pepper. I reviewed the bank statement for them. I did not re\'iew
the checks for them, and I think the bank statement is accurate.
Mr. Sanders. In other words, you totaled up the deposits from the
bank statements ?
Mr. Pepper. Yes. But I did not review the bank checks for them. I
reviewed them for myself.
Mr. Sanders. I have no further questions.
Mr. ]\IusE. One second, please. Could Ave go off the record just
briefly?
[Discussion off the record.]
Mr. Muse. JNIr. Pepper, I hope you will excuse me if I am some-
what repetitive. I came in a little bit late. I didn't hear all of the
questions.
Mr. Pepper. You are excused.
Mr. ]\Itjse. When you had the conversations, the telephone conversa-
tions with Congressman Mills
Mr. Pepper. The first one?
Mr. Muse. The September, Labor Day call.
Mr. Pepper. OK.
♦ See p. 7730.
7723
Mr. Muse. Did he discuss his candidacy with you at all ?
Mr. Pepper. No.
Mr. Muse. In any conversation did he discuss his possible candidacy ?
Mr. Pepper. He did not.
Mr, Muse. In fact, at that time, to your knowledge, had he declared
himself a candidate?
Mr. Pepper. I don't know, not to me.
Mr. Muse. All right. Did you discuss with any of his aides his
possible candidacy ?
Mr. Pepper. I think it was general conversation at different periods
of time, but in no hard, no real specific cases. But I do remember hear-
ing i:>pople talking about it.
Mr. INI USE. And when you flew on the plane with the other board of
directors, was there discussion about Mills' possible candidacy?
Mr. Pepper. I think there was some speculation.
Mr. Muse. And was there any discussion about an invitation being
extended to him? To come out at that point? You were the onljt:; —
Mr. Pepper. No : only between Joe Johnson and myself.
Mr. Muse. So the other board members did not have any knowledge
of the invitation being extended ?
Mr. Pepper. They did not.
Mr. Muse. And when you extended the invitation, did you discuss
the candidacy with Congressman Mills ?
Mr. Pepper. No.
Mr. iNIusE. And when he appeared at the rally, was there any dis-
cussion of his candidacy ?
Mr. Pepper. By whom ?
Mr. Muse. By — well first, did he make any pitches in his speech?
Mr. Pepper. No ; not that I am aware of.
Mr. Muse. Did any of his aides make pitches to anyone that you are
aware of at that time ?
Mr. Pepper. No.
Mr. INIusE. And in fact, I think you described the rally itself as
turning out to be bipartisan in effect?
Mr. Pepper. Yes ; because we insisted that it be so.
Mr. Mi'SE. And other than the letter from the electrical workers —
the electrical co-op, Avhicli was exhibit No. 2, did you have any indi-
cation that this was an attempt to move Congressman Mills' can-
didacy ?
Mr. Pepper. Only the enthusiasm of some of the staff people who
Avere present. It was obvious who they were for.
Mr. Muse. Whose staff people were those?
Mr. Pepper. I think Johnny Holmes particularly appeared to be a
real pro-lNIills man. and I think there were probably a couple of others
that were very, very much in favor of the Congressman and would
have liked to have seen him run. But as far as anything organized, this
would just be like discussion among people considering political
affairs.
Mr. INIusE. Would it be much different from any two citizens having
a general discussion about a possible candidate?
Mr. Pepper. No; they were enthusiastic about their support about
someone. No ; it Avouldn't be any different from that.
7724
Mr. Muse. Now, in regard to this letter which is exhibit No. 2, from
Harry Oswald to Roger Peterson, who was Avith the Iowa Electrical
Cooperative, did you ever have any discussion with Mr. Oswald about
their efforts to generate activity for Congressman Mills?
Mr. Pepper. No.
Mr. Muse. And did you have any discussion with Roger Peterson ?
Mr. Pepper. No.
Tklr. Muse. So tlie only knowledge you would have had about their
attempts would have been this general letter?
Mr. Pepper. Right.
Mr. Muse. And with regard to the campaign poster or campaign
bill
Mr. Pepper. Label, I call it.
Mr. Muse [continuing]. Label that is appended to the letter, did
you have any discussion with any of the people who sent it out?
Mr. Pepper. No.
Mr. Muse. And do you know exactly who was sponsoring this, other
than the fact it was appended to the letter ?
Mr. Pepper. No.
Mr. Muse. Did you have any knowledge that anything, that there
was any effort by the electrical co-op and AMPI to jointly use this
rally as an effort to move Congressman Mills' candidacy ?
Mr. Pepper. Would you restate that ?
^Ir. INIusE. Do you have any knowledge that there was any joint
effort by the electrical co-op and AMPI to jointly sponsor or jointly
move Congressman Mills' campaign effort?
^fr. Pepper. I certainly didn't at that time. Perhaps my opinion is
now influenced by what lias transpired in
Mr. Muse. Aside from your speculations, do you have any knowl-
edge ?
Mr. Pepper. Aside from speculation ; no.
Mr. Muse. Incidentally, did you ever talk to any of Congressman
Mills' aides about this I O IJ draft movement, Avhich is appended to
exhibit No. 2?
Mr. Pepper. No, I've never talked to any of his aides that I know of.
JNIr. Muse. Did you talk to anyone from AMPI about it ?
Mr. Pepper. No. Wait a minute — about the label itself at that time ?
Mr. Muse. Yes, sir.
Mr. Pepper. Yes, I got mad.
Mr. Muse. And who did you speak with ?
Mr. Pepper. Well, I don't remember who was in the ofRce at the
time. But Avhen this came across my desk, I'm sure that I showed it
to Johnson and a few of the others, and I kind of blew my stack a
little ])it because this was not in accord with the agreement, to begin
with. And I know that I let them know my feelings about it.
And it Avas immediately then that I Avrote the memo.
;Mr. Muse. The agreement you lefer to is the effort at bipartisan-
ship?
Mr. Pepper. Yes.
Mr. INIusE. Was there any effort to solicit any funds bv Congressman
Mills at the rally ?
Mv. Pepper. No.
7725
Mr, ;Muse. And again, his speech and his actions didn't demonstrate,
or didn't seek to generate a candidacy, did they ?
Mr. Pepper. As a matter of fact, I thought it was pretty dry.
Mr. Muse. Fine, thank you. I have no other questions.
Mr. Sanders. No further questions. That will be the end of the
record.
Thank you.
[Whereupon, at 11 :40 a.m.. the hearing in the above-entitled matter
was adjourned.]
7726
Pepper Exhibit No. 1
J^{Hif^ ^t4£/i^ €^^ ^€f^i^a/€{m
Post OHicg Box 663 • AMES, IOWA 50010
March 26, 197l»
Hoipirt, I A
Glinn Short, Sac'V.
Adal. I A
DIRECTORS
Ralph O. BaKar
Wabilar City, lA
Jamas Olskaly
Klaton City, lA
Harold Bolton
Ma
. lA
CJMI Chapman
Chatokaa, lA
Larry Crotsar
Cra^ton, I A
Edtvin Oecktr
Claranca, lA
Kallh Drahn
Elgin. lA
Paul Erb
Floyd, lA
Jamat Faurot
Siblay, I A
Warran Garrala
Ml. Plaatanl, lA
Macy E. Garwood
. >A
Vinti
Cloyd Hall
Ron Hanricht
EIn
• Hu
, lA
H. L. McMahan
SprlngvHIa, lA
Robart Nana
Eagia Grova, lA
David Neuroth
' Halbur, lA
JOKph O'Hara
Shanandoah, lA
Orvllla Pugh
Mount Union, lA
Gtann Saalock
Council Bluffa, lA
Norman Still
Dal MolnM, lA
Harold Van Za«
Otlay, I A
Ktlth Volgt
Eegla Grova. lA
Orlyn Waatandorf
Raadlyn, I A
STAFF
Garald R. Peppor
Exacutlva DIrMtIM
Lillian Oodd
Offics Managaf
Carolyn Carr
OKIca AMialant
OFFICE
023 Ninth StrMt
TELEPHONE
i.r
Governor Robert Ray | , , -
State Capitol Building | ■■;}•,■;
Dee Moines, lA
•A
Dear Governor Ray, ••■• , ■■a'
I read with conaideratile interest your comment in this
morning's Register saying that cooperatives had been
"used" in the Cooperative Rally in October, 1971, in Amesa
In retrospect and in light of information provided by • '
AMPI's ovn investigation, I believe you are right. It
hurts to have to admit that I may have made an error in
Judgement by falling prey to someone's carefully planned ;
strategy. In the beginning I really had no reason to be
suspicious of anyone's motives, except perhaps one — and
that was — why would Wilbur Mills call Gerald Pepper at home "
on Labor Day of 1971? (A point his spokesman denied in
last night's Des Moines Tribune, and perhaps impossible to
prove.) Obviously the public would scoff at such a ridi-
culous idea, were it made public. And yet, is it not more .
ridiculous to believe that Gerald Pepper could even get an
audience with Wilbur Mills, much less convince him to come .
to Iowa. To cover this possible challenge to the projects
integrity a carefully staged meeting in Washington was held
in which I "officially" issued an invitation. This, of
course, was documented, filmed and made a part of the
record. I believe, now, that I'd been "had" — had by ex- ■
perts in political games, apparently.
Governor, if I have caused you or any of the other digni-
taries on the platform that day euiy grief or embarrassment . '
over this strange episode, I sincerely apologize and hope
that you understand that it was in no way intentional nor
contrived by myself nor the people I work for. I'm sure
that you and the other dignitaries who appeared that day-
did so on a basis of confidence in the Iowa Institute of ■
Cooperation. Perhaps by this letter we .c tin maintain that
basis of integrity.
For myself, I'm expendable — for the thousands of fairmer
cooperative members across Iowa it must be most embarrassing.
I am confident that eventually! we will all realize the truth
of the matter and that's as iV should be. ,:
Sincerely,
jerald R. Pepper
Executive Director
cy
7727
Pepper Exhibit No. 2
:C \S00^^ ^^^^/C CoOP€{l«TIV€S INC.
i ■■' , • BOOO INTERSTATE DRIVE • P. O. BOX SdGS • TELEPHOME: B6S-02S0
• LITTLE ROCK. ARKANSAS 7SS09 •
MILTON W. SCQTT . C«>,.4-«n,K=^ lA 10 71 HARRY L. OSWALD
Pi^iOci September 14 r 19 71 General Manager
RALPH U. DITTLE - LELANO F. LEATHERMAN
Vtf.c President General Counsel
JOHN L. FAULKNER , .- .
Secrelarv
DEAN HODGES
Treasurer
Mr. Roger Peterson, Manager , .
Butler Coxonty Rural Electric Cooperative - \
Allison, Iowa 50602
Dear Mr. Peterson:
Congressman Wilbur Mills of our Second District has been a close
friend of the electric cooperative program throughout his career
in the Congress. 1 have had his influential help since 1948.
We would not have had our first or succeeding generating loans
without his aid; He has been a vigorous supporter of adequate
loan funds for the total program; \
He was most important in writing the- tax laws that have been most
important to the status of the electric cooperatives in his posi-
tion as Chairman of the powerful Ways & Means Committee. All of
us in the rural electrification program, wherever we are, owe him
a debt of gratitude.
On .^Saturday, October 2, at 1:30 p.m.. Congressman Mills will be
the principal speaker at the kickoff meeting for Iowa Co-op Monti
in the Hilton Coliseum on the campus of the University of Iowa at
Ames. Perhaps"you know of the efforts of many to persuade him to ■"
become an active candidate for the Presidency of the United States.
We need a large attendance at this meeting — it will help our
program.
At a similar type of recognition meeting here in Little Rock, over
3,000 managers, directors, employees cind members of the electric
cooperatives were in attendance. Can you help ks in a similar way
for the Iowa meeting? We identified ourselves as electric coopera-
tive people with the attached badge. (We will supply these to you
if you can help.)
Yours truly.
Harry L. Oswald
General Manager
P.S. Regardless of his decision ^lbout running,: his strength will,
help us with whomever is nominated. And regardless, if his part^
prevails in electing a majority in the House of Representatives,'
he will again be the Chairman of the Ways & Means Committee.
7728
7729
Pepper Exhibit No. 3
OFflCEKS
Joieph Slow, Prat.
Wcller. lowo
Tra«i> Foliar, V. Praa.
Hoiperl, lowo
Williom Porroll. SacV
Donvilla. lowo
DIRECTODS
William Bchrani. Jr.
Fradcricklbui^, lowo
Horold Bsllon
Morcwi, lowo
Co.i Bucfcmon
C-orrtorillo. Iowa
Clill Chopmon
Cherokee, lowo
lorry Croliar
Crellort, lowo
KeilS Drohn
Elgin, lowo
Foul Erb
Fiord, lowo
Jomal Fourol
Siblay, lowo
Moey E. Gorwood
Vinlon, lowo
Cloyd Holl
Napier, lowo
Elmer Huenemonn
Gornar, lowo
Alton Jorlh
Vincent, lowo
Glenn lovig
Del Moines, Iowa
Sei McCornick
Kolbur, lowo
H. I. .'A.Mohon
Springvilla, lowo
Sobtrl Ne lO
Eagle Grove, lowo
loiepi) O'Horo
Stienondooh, lowo
Orville Pugli
Mount Union, Iowa
Glenn }<heperi
lott Notion, Iowa
Slenn Seolock
Council Blvifft, Iowa
3lenn Sborl
Adal. lo»a
lormon Slill
Oet Moinei, Iowa
-lorold Von Ze*
Otiey, lowo
(eitli Volgl
Eoglo Crovo, Iowa
STAFF
5e'old R. Pepper
Eieculive Oiretlor
illion Dodd
Office Manoger
!arolyn Corr
Office Aiilllonl
OFFICE:
13 Ninth SirmI
^^{f4i^a ^nd^/e^ €^ ^-^€^ie^€^€}m'
Post Office Box 668 • AMES, IOWA 50010
September l8, 1971
To: RKC Managers
Fromr Gerald Pepper, Executive Director
Re: KICK-OFF - OCTOBER IS COOPERATIVE MONTH '
Dear Sir:
It has come to my attention that interests outside the State
of Iowa have misread the intent of the October 2 kick-off meeting
at the James Hilton Coliseum in Amea.
This is a bipartisan meeting to focus attention on agriculture
and its problems - and the role cooperatives take in solving these
problems .
We ask you to disregard any attempt to change the thrust of
this meeting and ask you to support this meeting by eucouraging
all co-op members to participate in a sincere effort to maintain
a bipartisan effort. Iowa Institute of Cooperation does not
sanction any efforts to divert the original intent of the meeting.
7730
Pepper Exhibit No. 4
^/p mWA COOPERATIVE MONTH
^^
KICK-OFF
Attend the first function at the
newJAMES HILTON COLISEUM
1:30 pm Saturday, October 2
Iowa State University -Ames
Is-**-"
/'
-■■tBiS.^ f" W -'j^:^;^^ fe.«*»»-y*^at^x
^!/Stiln^=|■^,a,<J^ Xk^Xi*.
Hear and Meet
■
,^
,
-•■■"'■J
-inl
,»
">
Robert D. Ray
Governor of the State of Iowa
Senator Jack Richard Miller
Contreisman Wilbur Mills
Congressman Neal Smith
FREE ATTENDANCE PRIZES -
• Two color television sets • Clothes washer
• Clothes dryer • Home Freezer
• Refrigerator/ Freezer combination
Sponsored By The
IOWA INSTITUTE OF COOPERATION
TUESDAY, MAY 21, 1974
U.S. Senate,
Select Committee on
Presidential Campaign AcTi\T[TiES,
Washington^ D.C.
The Select Committee met, pursuant to notice, at 2 :05 p.m., in room
G-334, Dirksen Senate Office Building.
Present : Senator Weicker.
Also present : David Dorsen, assistant chief counsel ; Alan S. Weitz,
assistant majority counsel ; Donald Sanders, deputy minority counsel ;
Deborah Herbst, research assistant.
Senator Weicker. Would you raise your right hand ? Do you swear
that the evidence that you are about to give to the committee is the
truth, the whole truth, and nothing but the truth, so help you God?
Mr. Hanman. I do.
]\Ir. Weitz. Mr. Hanman, fij-st I would like to serve you with a sub-
pena from the committee for your appearance here today as previously
agreed to by your attorney. Now, I think the record should show that
you have already appeared and testified on November 13, 1973, and
therefore we will not ask you the background questions that we did,
since they will be included in tlio record for that day. Would your
counsel, however, identify himself for the record ?
Mr. HoECKER. Wayne Hoecker. I'm a partner in the law firm of
Gage, Tucker, Hodges, Kreamer, Kelly & Verner in Kansas City, Mo.
Mr. Weitz. Mr. Hanman, did you attend a meeting at the Louisville
Airport late on the night of the 23d or early in the morning of the 24th
of March 1971 ?
TESTIMONY OF GARY EDWIN HANMAN, ACCOMPANIED BY WAYNE
HOECKER, COUNSEL
Mr. Hanman. Yes.
Mr. Weitz. Who attended that meeting ?
Mr. Hanman. To the best of my recollection it was myself, Dave
Parr, Harold Nelson, and Paul Alagia at the airport.
Mr. Weitz. Was Bob Lilly also present?
Mr. Hanman. He may have been. But my recollection — I am not
sure ; he may have been.
Mr. Weitz. Could you tell us who arranged the meeting and how
you came to meet at the airport for that meeting ?
Mr. Hanman. As I recall, I believe I had gone to bed that night, and
Dave Parr, I believe is the one, woke me up or got me and said : "We
are going to Louisville to meet with Paul Alagia."
Mr. Weitz. You were in Washington at the time ?
Mr. Hanman. Yes.
Mr. Weitz. Mr. Parr and others were in Washington after the meet-
ing with the President that morning?
(7731) 1
7732
Mr. Hanman. Yes.
Mr. Weitz. Did he tell you what the purpose of going to Louisville
to meet Mr. Alagia was ?
Mr. Hanman, Yes. As I recall, the purpose of the trip was to talk
to Alagia — Paul Alagia — about the advisability of attending the
Kepublican fundraiser that was scheduled the next day here in
Washington, if ADEPT was to participate, and to talk to anyone
alone.
Mr. Weitz. You mean participate — contribute to the dinner ?
Mr. Hanman. Yes.
Mr. Weitz. Do you know how much money ADEPT had in its
treasury at that point ?
Mr. Hanman. No, I do not.
Mr. Weitz. Was it at least $10,000 ?
Mr. Hanman. I would surmise it was. I really do not know what the
balance was.
Mr. Weitz. What was the need to go to Mr. Alagia ? In other words,
what would be the purpose of talking to him about whether people
from your organization, or possibly from the Associated Milk Pro-
ducers, Mr. Parr's organization, would attend the dinner?
Mr. Hanman. As I recall the circumstances, collectively we had been
attempting to get some legislation passed that would have amended
the 1949 support law for milk. We had been contacting Congressmen
and Senators. We knew this fundraiser was coming up. Tentatively,
we thought we would attend this fundraiser.
After the Secretary had made his announcement of no increase
in supports, we pretty well agreed that we would not attend, at least
not in any significant amount. The reaso2i for going to this meeting-^
the thought was, maybe we ought to go in a larger amount — buy more
tickets than what we originally thought.
Mr. Weitz. Had you bought any tickets or made any contributions
up to that point for the dinner or to the Republican Party ?
Mr. Hanman. I do not think we bought any tickets to the dinner.
To the Republican Party, I do not recall.
Mr. Weitz. How about in March 1971 ?
Mr. Hanman. I do not believe that we had.
Mr. Weitz. How much was contemplated prior to the Secretary of
Agriculture's decision on the 12th ? Let's start with ADEPT.
Mr. Hanman. I really do not recall. I think what we were thinking
about would be a ticket apiece for the ADEPT Committee membere.
Tha/t would generally be the type of contribution that we would make
to something like that.
Mr. Weitz. How many committee members were there at that time ?
Mr. Hanman. Six, plus myself ; it Avould be seven.
Mr. Weitz. That would have meant a contribution of $1,000 a ticket,
or $7,000?
Mr. Hanman. Right.
Mr. Weitz. How about the other two co-ops or their trusts ? Wliat
was contemplated before the Secretary's decision on the 12th?
Mr. Hanman. I really do not know.
Mr. Weitz. Did you have any discussions about that with them?
Mr. Hanman. Beforehand ?
Mr. Weitz. With the representatives of the other two co-ops?
7733
Mr. HoECKER. Prior to March 12 ?
Mr. Weitz. Prior to March 12.
Mr. Hanman. No ; I did not.
Mr. Weitz. You do not know whether they were intending to go or
contribute before March 12 ?
Mr. Haxman. Not that I recall.
Mr. Weitz. What about after March 12? Between the Secretary's
decision on March 12 and this flight out to Louisville on the night of
the 23d, had you had any discussions with them about contributions
either to the dinner, the Republican Party in general, or to the
President's campaign ?
Mr. Hanman. I do not believe I did with SPACE. My recollection
is that TAPE had made some tentative plans to buy a substantial
number of dinner tickets before the March 12 decision or immediately
thereafter. After the decision was rendered they were having some sec-
ond thoughts about attending it in that large a number. As I recall,
they were talking about six to eight tables, and there are 10 plates
to the table.
Mr. Weitz. That would be 60 to 80 tickets, or $60,000 to $80,000.
Mr. Hanman. Yes.
Mr. Weitz. Your understanding was that they, too, were having
second thoughts about it after the decision on the 12th ?
Mr. Hanman. Yes ; that is my recollection.
Mr. Weitz. Who did you talk to about that? Who indicated that
to you ?
Mr. Hanman. I believe that it was Dave Parr. My recollection would
be that it would be Dave.
Mr. Weitz. By the time that you flew out to Louisville on the 23d,
did they indicate that they had made any contributions to the dinner
or to the Republicans ?
Mr. Hanman. Not that I recall.
Mr. Weitz. You had attended the meeting with the President the
morning of the 23d, is that correct ?
Mr. Hanman. Yes.
Mr. Weitz. Dave Parr had attended that meeting, too ; is that cor-
rect?
Mr. Hanman. Yes.
Mr. Weitz. I believe you said Harold Nelson had also attended
the meeting at Louisville. He also attended that morning, did he not?
Mr. Hanman. Yes.
Mr. Weitz. Paul Alagia was also at the meeting with the President,
was he not ?
Mr. Hanman. I believe that is correct.
Mr. Weitz. Can you tell us what the reason was that you flew out
from Washington to Louisville for this meeting, rather than having
discussed the matter that morning, either before or after the meeting
with the President ?
Mr. Hanman. My recollection of it was — the first thought was that
the dairy farmers would attend this Republican dinner in substantial
amounts. Then after the March 12 decision, the thought was that we
would not — maybe even boycott it ; not go at all.
Sometime, I believe, between the meeting with the President and
the dinner, which was to be the next night, I believe Dave got a call
7734
from somebody — I do not know from whom — who indicated that we
should not boycott the meeting ; that we should go ahead and go to this
dinner as previously planned. And as I recall, the flight to Louisville
Avas to talk to Alagia about Avhat lie thought about that,
Mr. Weitz. Do you know Avho called Parr ?
Mr. Hanman. I do not know for sure.
Mr. Wbitz. Did he tell you or did anyone else tell you who called
Parr?
Mr. HoECKER. Did Parr t«ll him that ?
Mr. Weitz. Did Parr tell you that or did vou know that it was a
fact?
Mr. Hanman. I do not know who called him. But it is my recollec-
tion that's why we went.
Mr. Weitz. Did someone tell you, or do you recall from whatever
source who, you were told, had called Parr ?
Mr. Hanman. My understanding was it was a call from Phil
Campbell.
Mr. Weitz. He was Under Secretary of Agriculture ?
Mr. Hanman. Yes.
Mr. Weitz. Were you told or do you have any recollection of what
was supposed to have transpired in that telephone conversation ?
Mr. Hanman. No. My understanding was that the call, in effect, said
we should go to the dinner; we should not boycott the dinner; we
should go ahead with the plans as previously made.
Mr. Weitz. Had you ever talked to Phil Campbell about contribu-
tions activity, as opposed to the merits of the price-support decision?
Mr. Hanman. No.
Mr. Weitz. Do you know whether anyone connected with any of the
three principal dairy co-ops had spoken to Campbell about contribu-
tions activities or possible contributions ?
Mr. Hanman. Not that I could testify to, no.
Mr. Weitz. Do you know how Campbell knew about the plans to go
to the dinner, the possible boycott of the dinner ? -
Mr. Hanman. No ; I do not.
Mr. Weitz. Do you Ivuow whether there was any reference by Camp-
bell to the price support matter, either any meetings that were going
on within the administration or a review of the price support ^ — the fii-st
decision, and so forth ?
Mr. Hanman. No. I do not.
Mr. Weitz. Do 3-011 know whether Campbell indicated to Parr any
reason that you should not boycott the dinner ?
Mr. Hanman. No. As I i-ecall, the general statement was. "Progress
is being made. We should go ahead and go to the dinner.'-
Mr. Weitz, Progress is being made with regard to what ?
Mr. Hanman. To this price-support activity — working on this legis-
lation.
Mr. Weitz. Campbell was in the administration. He would not have
to call vou to tell vou progress Avas being made with legislation, would
he?
Mr. Hanman. Normally not. I would think that would be true.
Mr. Weitz. In fact, was he not referring to the fact that the progress
that was being made in the administration Avas regarding an adminis-
trative increase ?
7735
Mr. Hanman. I do not know.
Mr. Weitz. Is that not what yoii understood ?
Mr. Hanman. I understood that progress was being made in our
objective — to get price support increases, legislatively or administra-
tively.
Mr. Weitz. What was Campbell referring to ?
Mr. Hanmax. I do not know.
Mr. Weitz. Wliat was your understanding, talking about it with
Parr and others?
Mr. Hanmax. I do not know. I do not recollect whether it was legis-
lative or administrative. I think it could have been legislative. I think
there would have been some calls to him from Republican Congress-
men or Senators with respect to this. One of the things that we asked
them to do was to call the administration people — the people in the
administration.
Mr. Weitz. They had been doing that for a number of weeks, had
they not?
Mr. Hanmax. That's right.
Mr. Weitz. The effort had been going on with the dairy people in
Congress and elsewhere for a number of weeks or months.
Mr. Haxmax-^. Intensively since that INIarch decision; yes.
Mr. Weitz. Did you have any knowledge or were you told of any
meetings in the administration or the White House after the morning
meeting with the President ?
Mr. Haxmax^. No.
Mr. Weitz. Have you ever heard, in connection with that call from
Campbell or otherwise, any question put to Nelson or Parr or any of
the dairy co-op representatives, about whether the increase^ — if the
administration were to have granted the increase in March of 1971,
they would have gotten the dairy people "off their backs" — meaning
the backs of the administration ?
Mr. Hax-^max'. If the administration would increase it, would that
get the dairy people off their backs ?
]\Ir. Weitz. Eight. Did you ever hear any reference about that in
connection with the call from Campbell to Parr?
Mr. Haxjiax. No.
Mr. Weitz. Was that phrase or that understanding talked about at
all in March of 1971 ?
Mr. Hax'max'. No ; not in my presence.
Mr. Weitz. Did you understand that the contributions or the re-
quests that you not boycott the dinner and the subsequent meeting in
Louisville was for the purpose of raising contributions that would
somehow improve your chances of getting a price-suoport increase?
Mr. Haxmax\ In this total environment that we were in, working
with Congress and Senators, I think we had some request that we at-
tend this dinner, and I think in that vein would be why we would be
going to the dinner ; yes.
Mr. Weitz. Do you recall what time you left Washington for the
meeting in Louisville ?
Mr. Haxmax. No, I do not. It was late, I know that.
]Mr, Weitz. You were already in bed — close to midnight, before you
left Washington ?
Mr. Haxmax. I do not know ; I suppose.
7736
Mr. Weitz. You flew to Louisville by AMPI jet ?
Mr. Hanman. Yes.
Mr. Weitz. This was a special trip ; the plane was not going any-
Avhere else on the way?
Mr. Hanman. That is my recollection. That is right.
Mr. Weitz. Were you told of any arrangements to try to meet, Al-
agia there — contact Alagia or his wife, or so forth — to make sure he
would be there ?
Mr. Hanman. It was my luiderstanding when we took off that was
who we were going to talk with.
Mr. Weitz. Do you know where he was at the time ?
Mr. Hanman. No, I did not at the time.
Mr. Weitz. Was he there when you arrived in Louisville ?
Mr. Hanman. I do not believe he was.
Mr. Weitz. How long did you wait before he came ?
Mr. Hanman. I do not know. I don't think very long, because I do
not believe we were in the airport very long.
Mr. Weitz. Was he arriving by plane from somewhere else ?
Mr. Hanman. Yes, that is my recollection.
Mr. Weitz. When he came, what happened ?
Mr. Hanman. "When he came, we sat down in the lobby right out
in the foyer of the little airport, on the benches out there, and talked
to him about the Republican dinner that was coming up and the fact
that we wanted to attend it. We thought it would look better if all
three political action trusts bought tickets, and if ADEPT was going
to buy a significant amount of tickets, we would have to negotiate a
loan. Generally, that was the gist of the discussion.
Mr. Weitz. Negotiate a loan from SPACE or TAPE— or both?
Mr. Hanman. Either one.
Mr. Weitz. How much was needed ?
Mr. Hanman. As I recall, we were talking in the neighborhood of
$40,000 or $50,000.
Mr. Weitz. From ADEPT?
Mr. Hanman. Yes.
Mr. HorxKER. For ADEPT.
Mr. Weitz. So ADEPT could take the money and contribute it?
Mr. Hanman. Yes.
Mr. Weitz. How much was contemplated that would be contributed
from the other two co-ops ?
Mr. Hanmax. I really do not know ; I do not recall.
Mr. Weitz. At least $100,000 ?
Mr. Hanman. My recollection is that the total we were talking about
was like eight tables, which would be $80,000.
Mr. Wettz. tape was larger than ADEPT, was it not. in terms of
membership and cash on hand ?
Mr. Hanman. Yes.
Mr. Weitz. At that point, at least, SPACE had more cash on hand
than ADEPT, too ; was that not your underetanding ?
Mr. Hanman. T would guess that is right ; yes.
Mr. Weitz. Could you tell me why ADEPT would be targeted, so
to speak, to contribute $40,000 or $501000 out of a total of $80,000 when
you had two more wealthy co-ops or trusts that would participate?
Mr. Hanman. No, I could not.
7737
Mr. Weitz. Was not the targeted fignre actually much more than
$60,000 or $80,000, all told, not only for the dinner but the total con-
tribution that was being discussed at the airport ?
Mr. Hanman. My recollection of the meeting was with respect to the
dinner — in the neighborhood of eight tables. Tliat is my recollection
of what we were talking about.
Mr. Weitz. You do not recall a discussion of perhaps $200,000 or
$300,000 total contributions from the three trusts?
Mr. Hanman. For the dinner ?
Mr. Weitz. For the dinner and also to other Eepublican committees ?
Mr. Hanman. No. My recollection is, we talked to him in the neigh-
borhood of six to eight tables.
Mr, Weitz. For the dinner ?
Mr. Hanman. For the dinner.
Mr. Weitz. No other moneys for any other purposes or over a period
of time?
Mr. Hanman. No; that is my recollection of what happened.
Mr. Weitz. Was SPACE, if they were to loan ADEPT the $40,000
or $50,000, would they also make a contribution in addition?
Mr. Hanma^st. I think we talked to him about his feelings on attend-
ing this dinner at this time. We talked to him about SPACE making
contributions. I cannot testify that he made any specific commitment
of an amoimt for SPACE at that meeting.
Mr. Weitz. Was he asked for an amoimt or was any amount dis-
cussed with him above the loans — the possible loan to ADEPT?
Mr. Hanmax. I cannot recall.
Mr. Weitz. It may have, but you don't recall either way. It may
or may not have ?
Mr. Hanman. Yes.
Mr, Weitz. Was there any reference at the meeting to the meeting
with the President that morning, or about the price-support matter in
general ?
Mr. Hanman. I am sure there was.
Mr. Weitz. What was said ?
Mr. Hanmax. I do not know that I could specifically quote any-
body as to what was said. I am sure we talked about each other's
impressions of the meeting with the President. The reason I say that,
right after the President — everybody just scattered. There was not any
meeting afterwards that I recall. I am sure we talked to Paul about his
impressions at the meeting with the President.
I am sure also that we had discussions with him about what kind of
response their people were getting from Congressmen and Senatore
in their areas that they were contacting in their efforts for the legisla-
lation. I am sure that the whole area of the price-support issue was
discussed in that context.
Mr. Weitz. What about Campbell's call ? Was that discussed ?
Mr. Hanman. Not in my pi-esence ; not that I recall.
Mr. Weitz. Would that not have been relevant if the Under Secretary
of Agriculture calls one of the co-op leaders and tells him not to boy-
cott the dinner? Would that not be one of the first things that you
would talk about when you are talking about going to the dinner?
Mr. Hanman. Yes; it would have been. I do not recall that coming
up.
30-337 O - 74 - pt. 17
7738
Mr. Weitz. What was discussed to try to convince Alagia that they
should not boycott the dinner, but should contribute ?
Mr. Hanman. What was discussed ?
Mr. Weitz. Right. What points were made to try to convince him
that he should participate ?
Mr. Hanman You have to realize that I was not doing the selling.
I was along. As I recall, Harold and Dave were doing most of the talk-
ing with Alagia. In some cases they were in a different location than
I was. The benches were in a row.
Mr. Weitz. They were sitting side by side, but on a different side
from you ?
Mr. Hanman. Yes.
Mr. Weitz. Do you remember the arrangement — the seating
arrangement ?
Mr. Hanman. No, I do not. I do remember that they were off on one
side and I was over in another corner.
. Mr. Weitz. You could not hear the discussion ?
Mr. Hanman. I could hear some of it, but I was not in on all of it,
I don't think.
Mr. Weitz. Do you know whether Nelson told them something that
he had not told you ?
Mr. Hanman. I have no reason to believe that ; no.
Mr. Weitz. Conversely, had Nelson or Parr told you something that
they did not tell Alagia ?
Mr. Hanman. Not that I know about.
Mr. Weitz. You don't recall any reference to the call from Campbell
to Parr?
Mr. Hanman. No, I do not recall talking to Alagia.
Mr. Weitz. How about other contacts with people in the adminis-
tration? Was anybody else referred to in the Louisville meeting,
anybody in the Cabinet or any of AlNIPI's lawyers or any other White
House people ?
Mr. Hanman. Not that I recall.
Mr. Weitz. No one mentioned John Connally ?
Mr. Hanman. No.
Mr. Weitz. How about Murray Chotiner ?
Mr. Hanman. Not that I recall.
Mr. Weitz. How about Charles Colson ?
Mr. Hanman. Not that I recall.
Mr. Weitz. Did anyone mention John Ehrlichman's name ?
Mr. Hanman. Not that I recall.
Mr. Weitz. Aside from names of individual officials, did anyone
at the meeting, or apart from the meeting — did anyone refer to
AMPI's or the dairy co-ops' contacts in the White House in any
administration in reference to the contributions and the price-support
matter ?
Mr. Hanman. No; I do not recall any individual names being
mentioned.
Mr. Weitz. What was Alagia's response to the request ?
Mr. Hanman. As I recall, he indicated that he Avould not recom-
mend SPACE making a loan to ADEPT. And I do not even recall
making a specific indication that he would make a contribution from
SPACE.
7739
My impression of the discussion is that he was favorably inclined
to the proposition.
Mr. Weitz. Of making some contribution ?
Mr. Hanman. Yes.
Mr. Weitz. Did he indicate that he, or that Morgan and he or John
Moser, had already decided to make some contribution for the dinner ?
Mr. Hanman. I do not believe he did ; no.
Mr. Weitz. Did he indicate how much he Avould be willing to
recommend that SPACE contribute to the dinner ?
Mr. Hanmax. Not that I recall.
Mr. Weitz. Did anyone indicate to him at the meeting the timing
or the urgency of the request — that is, of the contributions themselves ?
Any deadlines that had to be met or any timetable to be followed?
Mr. Hanman. My recollection is, we were talking to him about
going to the dinner and the dinner was the next day or the next
night. The idea Avas that we would go and we would have dairy
farmers attend from the three groups.
Mr. Weitz. ADEPT Committee members did attend the dinner,
did they not ?
Mr. Hanman. Yes.
Mr. Weitz. You did attend, also ?
Mr. Hanman. Yes.
Mr. Weitz. You did not make a contribution the next day, did you ?
Mr. Hanman. I do not believe that we did.
Mr. Weitz. Therefore, it was not absolutely necessary that SPACE
contribute the next day in order to attend the dinner. They would just
have to make a pledge or commitment of some sort.
Mr. Hanman. I think that is right.
Mr. Weitz. What was the deadline that was told to Alagia or dis-
cussed among yourselves about either the actual contribution or the
pledge for the contribution ?
Mr. Hanman. As I recall — I am just trying to recall what I think
we did in ADEPT. I think that I got our committees' names from
Marion Harrison. As I recall, he was the one who had reserved the
tables and he needed to know as soon as possible if we were going to use
them or not.
Mr. Weitz. You mean before the dinner ?
Mr. Hanman. Yes.
Mr. Weitz. You told that to Alagia, or someone that evening prob-
ably told that to Alagia ?
Mr. Hanman. I surmise that is what we talked to him about.
• Mr. Weitz. You also had to check before the dinner in order to clear
a certain number of seats or tickets with your people, did you not ?
Mr. Hanman. Yes.
Mr. Weitz. Did vou intend to send 40 or 50 people from ADEPT?
Mr. Hanman. From ADEPT?
Mr. Weitz. Yes.
Mr. Hanman. No.
Mr. Weitz. So that the $40,000 or $50,000 would not cover tickets—
Avould be more than enough to cover tickets for Mid- Am and ADEPT ?
Mr. Hanman. For our dairy farmers that were going to attend ; yes.
Mr. Weitz. Would it cover other tickets, or just by way of
contribution ?
7740
Mr. Hanman. There were other people that wanted to attend. AA's
of Congressmen, AA's of Senators. As I recall, there were other people
from the administration we were furnishing tickets for.
Mr. DoRSEN. Do you what time the telephone call from Phil Camp-
bell was?
Mr. Hanman. No.
Mr. DoRSEN. Had you heard that it was in the comparatively early
evening ?
Mr. Hanman. It was before our flight.
Mr, DoRSEN. Was it essentially during working hours ?
Mr. Hanman. I really do not know.
Mr. DoRSEN. Was there any reason given why you were not called
until close to midnight?
Mr. Hanman. No ; I do not believe there was.
Mr. DoRSEN. Was there any reference to any other telephone con-
versations or contacts, other than the telephone call from Campbell ?
Mr. Hanman. No.
Mr. DoRSEN. Was there any discussion among youreelves as to dis-
cussing with Alagia the question that was discussed by using a tele-
phone conversation rather than a flight to Louisville ?
Mr. Hanman. Do you mean, why did we not talk to him on the
phone ?
Mr. DoRSEN. Essentially, yes.
Mr. Hanman. Well now, I do not know that was discussed. How-
ever, if you understood the way many times Dave and Harold operated,
they would jump in their plane and go see somebody if they wanted
to talk to him rather than do it on the telephone. That was not unusual
for them — just on the spur of the moment to jump in a plane and go
see somebody.
Mr. DoRSEN. Even at that hour ?
Mr. Hanman. I guess that was the only time I had been on a plane
with them at that hour of the day. But there have been other instances
where we get a call and say : "We will be by for you in an hour, we
are going to so-and-so,"
Mr, DoRSEN, The record does reflect that the plane was used exten-
sively. Again, this was a meeting set for or approximately at 4 a.m.
at the Louisville airport. The question again is: Is there anything
that you know why this could not be done over the telephone ? Was
there anything discussed to that effect ?
Mr. Hanman. No; I guess it never occurred to me.
Mr. Weitz. In connection with the flight to Ijouisville, at the meet-
ing, was Jake Jacobsen's name mentioned ?
Mr. Hanman. Not that I recall.
Mr. Weitz. How did that meeting end? What was the agreement
or result?
Mr. Hanman. I don't know if we had any agreement. As I say, I
came away with the impression that going ahead and attending was
favorably received by Alagia. I did come away with the understand-
ing that SPACE would not loan ADEPT the money.
Mr. Weitz. Therefore, if ADEPT were to make a contribution it
would have to receive the money — borrow the money from TAPE?
Mr. Hanman. Or some other source, yes.
7741
Mr. Weitz. Was it also your understanding that someone from
SPACE was to notify you people as to the amount they would con-
tribute that next day, the 24th ?
Mr. Hanman. No; I did not have any understanding of that, no.
Mr. Weitz. "What did you do as a result of the meeting?
Mr. Hanman. What did I do?
Mr. Weitz. Yes. I take it after the meeting you flew back to Wash-
ington ?
Mr. Hanman. Yes.
Mr. Weitz. Did you go back to sleep ?
Mr. Hanman. I am sure I did. I probably slept on the plane coming
home. iVs I recall, my next action was to call the committee mem-
bers— no. I called my secretary and had her call the committee mem-
bers, the ADEPT committee members, and see if they could not attend
the dinner that night. I believe that is all I recall doing right after
that.
Mr. Weitz. Where were the ADEPT members at that point ?
Mr. Hanman. They were all at home.
Mr. "^Veitz. Did they fly in for the day ?
Mr. Hanman. Yes.
Mr. Weitz. What did they do — come in with the corporate jet?
Mr. Hanman. Yes.
Mr. Weitz. Did you go get them ?
Mr. Hanman. No.
Mr. Weitz. Ultimately, those six members plus yourself attended
the dinner for ADEPT?
Mr. Hanman. Yes.
Mr. Weitz. Did anybody else for ADEPT and Mid-Am attend the
dinner ?
Mr. Hanman. I do not recall. I believe that's all.
Mr. Weitz. How many from the other two co-ops ?
Mr. Hanman. I do not know. There were quite a few of them.
Mr. Weitz. As many as 60 or 80 — or fewer than that?
Mr. Hanman. Fewer than that.
Mr. Weitz. Do you know whether SPACE made a contribution on
the 24th?
Mr. Hanman. From what I read in the paper recently, they did.
Mr. Weitz. You had no knowledge of that that day ?
Mr. Hanman. No.
Mr. Weitz. By seeing them at the dinner, you assumed that they had
pledged or made some type of contribution ?
Mr. Hanman. Yes ; but I did not count their heads to see how many
they bought.
Mr. Weitz. Who did you pledge your commitment to that day?
Mr. Hanman. Probably Dave Parr or Marion Harrison, one of the
two, probably.
Mr. Weitz. Did you do it on the way home in the airplane after the
Louisville meeting ?
Mr. Hanman. I do not know when I did it, whether it was coming
home or the next day or when. But we did it.
Mr. Weitz. How much did you commit ?
Mr. Hanman. I believe we said that we would go up to $50,000 if
we could get the loan, and if the committee members did not veto it.
7742
Mr. Weitz. Did yoii ask the committee members that day ?
Mr. Hanman. Well, I do not specifically remember asking them.
They did come to the dinner and we did, after the dinner, have some
time to discuss the dinner and all that.
Mr. Weitz. There were only six or seven people from ADEPT
attending that dinner. That is $6,000 or $7,000. That's different from
$50,000.
Did yon raise the question of $50,000 before the dinner?
Mr. Hanman. I am not sure that I did.
Mr. Weitz. Did you talk about it with them after the dinner?
Mr. Hanman. I assume I did. I am not sure that I did.
Mr. Weitz. Did you talk with Nelson and/or Parr after the dinner
about contributions ?
Mr-. ITanman. As I recall, after we had got back from the dinner,
when we were in the hotel room, myself and most of my committee
members spent a long time in the wee hours of the morning again
talking to Harold and Dave. But we did not talk about any specific con-
tributions per se. We talked more in terms of philosophy of involve-
ment in Government, and we had quite a bit of discussion about proce-
dure, how we were going to go about getting the legislation passed.
People had a lot of questions relative to involvement in governmental
decisions.
Mr. Weitz. Did you not hear Page Belcher, at the dinner, tell peo-
ple that the administration was going to raise the price supports the
next day ?
Mr. Hanman. No.
Mr. Weitz. Dave Parr did not tell you that either ?
Mr. Hanman. No.
Mr. Weitz. Nobody at the dinner told you that ?
Mr. Hanman. No.
Mr. Weitz. At the conversations at the hotel afterwards, nobody
raised the possibility of an administrative increase?
ISIr. Hanman. I am sure that was talked about, yes.
Mr. Weitz. In what context?
Mr. Hanman. In the context that our two avenues of getting an
increase in milk supports Avas either doing it through the legislative
itvenue or having it done through an administrative decision. And
the effective date, I believe, of the increase, oi- the effective date of
the new marketing year, was April 1, so the previous announcement
was not effective yet at that time.
Mr. Weitz. In these discussions in the hotel aft^r the dinner on
the night of the 24th and into the 25th, you had no inkling or knowl-
edge that there was going to be a price-support increase the next day
announced by the administration ?
Mr. Hanman, No, sir. I heard about it when I was in Chicago the
next day.
Mr. Weitz. That is the formal increase. You had no previous notice
that there possibly was going to be an increase announced?
Mr. Hanman. No, sir. I did not.
Mr. Weitz. Were you with Nelson and Parr the entire evening after
the dinner ?
Mr. Hanman. Until we went to bed I was. probably.
Mr. Weitz. Did you go back to the hotel with Nelson ?
7743
Mr. Hanman. Yes, I think we were staying at the same hotel.
Mr. Weitz. The Madison Hotel ?
Mr. Hanman. Yes.
Mr. Weitz. You were with him the entire time — from the time you
went back to the hotel until the time that you went to bed ?
Mr. Hanman. I think so. I say I think so because I believe we spent
a lot of time after the dinner with Harold and Dave in the room with
the ADEPT Committee members.
Mr. Weitz. Do you recall Nelson being gone for a period of time
and then returning, or coming in late to that conversation?
Mr. Haxmax. My recollection is that they were both there, but
they may have been gone. My recollection is, we all returned to the
hotel and we had this long discussion with both of them.
Mr. Weitz. Now, when you appeared and testified here in Novem-
ber, you were asked whether you discussed contributions with the
representatives of the other dairy co-ops in March of 1971, and your
answer was that the only occasion for that discussion was at the dinner
on the night of the 24th.
I take it that you now testify that there were discussions about con-
tributions on the night of the 23d and after the dinner on the 24th ?
Mv. Haxmax. The discussions after the dinner were not in specifics —
in terms of amounts, races or candidates. They wei'e more in lines of
philosophical discussion.
]Mr. Weitz. That was not true the night before on the way to Louis-
ville or at Louisville ?
Mr. Hanman. What we were talking about there was that Repub-
lican dinner, yes.
Mr. Weitz. Could you tell us why you did not testify to the dis-
cussions that took place at the Louisville Airport at your first appear-
ance here in November?
Mr. Hanman. No. I guess I forgot it.
!Mr. Weitz. Do you know what has refreshed your recollection since
that time?
]Mr. Hanman. Well, I believe the first time that I recall this meet-
ing— or the first time that this meeting came up — was in my discussion
before the grand jury, when they raised it. Then I saw in the news-
paper an aiticle that Alagia had testified about the meeting.
Mr. Weitz, Since that time or before that time, have you discussed
this meeting, the meeting at the Louisville airport, with any of the
participants ?
Mr. Hanman. Since my grand jury appearance?
Mr. Weitz. Since the night of the meeting, I should say.
Mr. Hanman. Wim have I talked about the Louisville airport with ?
Mr. Weitz. Yes. First of all, any of the participants ?
Mr. Hanman. I may have talked to Dave Parr about it. I do not be-
lieve I have with Alagia. I do not believe I have with Nelson. But I
may have with Dave.
Mr. Weitz. Do you know in what context that you discussed this
with Parr ?
Mr. Hanman. In what context?
]Mr. Weitz. Shortly after the meeting in the series of events that
followed, recently with respect to the testimony ?
7744
Mr. Hanman. My recollection would be, recently since I testified
at the grand jury.
Mr. Weitz. Did he recall any additional facts that you had not re-
called in your grand jury testimony ?
Mr. Hanman. No. I think I asked him if Bob Lilly was along. He
did not recall whether he was or not.
Mr. Weitz. You also testified in November — rather, you were asked
whether you had committed on the day of the 24th the $50,000 con-
tribution for the dinner and other Republican committees. And you
answered that you were not sure whether it was that night or not.
I take it from vour testimony today that you did commit the $50,000
on the 24th?
Mr. Hanman. The 24th ?
Mr. Weitz. The day of the dinner.
Mr. Hanman. I am sure that is when we would have told either
Dave or Marion Harrison that we would go to the dinner, yes.
Ml". Weitz. In order for you to make that commitment, would you
not have to be sure of the source of the loan ?
Did not Parr or Nelson more or less assure you that TAPE would
lend you the money ?
Mr. Hanman. I am sure they did.
INIr. Weitz. On the 24tli before you made the commitment ?
Mr. Hanman. I am sure that is right, or it would have been a con-
tingent commitment, contingent on getting a loan. I doubt that that
kind of a commitment would mean much.
Mr. Weitz. As part of the discussion on the night of the 23d or the
night of the 24th after the dinner, did you discuss contributions to the
Presidential campaign ?
]Mr. Hanman. I am sure that we did talk about the job that the
President ^as doing, because we talked about all such matters that
night.
Mr. Weitz. Was it agreed that perhaDs contributions should be made
to the President's campaign if there was a price-support increase by
the administration ?
Mr. Hanman. No, I do not think that type of an agreement was
reached. It Mould have been a philosophical or a political action ap-
proach as to whether you would support the President in his reelection
effort down the road or whether you would support, somebody else.
Mr. Weitz. As part of the philosophy that was discussed that night
or as part of your philosophy in general, Avould it have been your feel-
ing that you would have been more inclined to support the President
and contribute to his campaign if, in fact, a price-support increase was
granted by the administration ?
Mr. Hanman. I would say that our committee would have been
more inclined to support his reelection effort if this action had been
taken. I think you have to recognize also that there were several favor-
able administrative decisions during his firet term in office, prior to this
price support, that our committee would have been looking at in try-
ing to evaluate a candidate for President.
Mr. Weitz. What would those include ?
Mr. Hanman. The price supports were increased the year before,
there was money appropriated for school lunch, and the administra-
tion— school milk, I mean — there were some decisions on imports.
Those are the ones that come to my mind readily.
7745
Mr. Weitz. You said that you did not recall this meeting in the
Louisville airport at the time that you testified in November.
Are you foreclosing recollection of any other facts with regard to the
meeting other than what you tevStified, or do you believe that you have
recalled all the facts in connection with that meeting and have testi-
fied to them here today ?
Mr. Hanman. Do you mean, am I saying that my memory is
absolute ?
Mr. Weitz. Absolutely correct, now, and complete.
Mr. PIanman. I do not know whether anybody could say that their
memory is absolutely correct in 1974 as to what happened one night in
1971. 1 think generally I have testified to the content of what we talked
about.
Mr. Weitz. Mr. Sanders ?
Mr. Sanders. Do you have any recollection, before you left for
Louisville on the night of the 23d or during the flight, that Nelson
made any mention of an obligation he had in Florida the next day ?
Mr. Hanman. I believe he did indicate that he had to get up early
and go to Florida. That is all I recall about it.
Mr. Sanders. You returned directly to Washington from Louisville ?
Mr. Hanman. I believe that is right.
Mr. Sanders. Did he come back into town from the airport with
you, or did he fly on from National ?
Mr. Hanman. I do not recall.
Mr. Sanders. Without respect to time, without respect necessarily
to the night of March 23 or 24, 1971, did you at any time — did you
personally at any time — have any agreement or understanding with
anyone that ADEPT or Mid- Am would make certain contributions
to the reelection of the President in consideration with the adminis-
trative decision more favorable than the one rendered on March 12?
Mr. Hanman. No.
Mr. Sanders. To your knowledge, did any other officials of ADEPT
or Mid-Am have any such agreement or understanding ?
Mr. Hanman. No.
Mr. Sanders. To your knowledge, did any officials of AMPI or of
Dairymen Inc., have any such understanding?
Mr. Hanman. Not to my knowledge.
Mr. Sanders. To turn it around, to put it the other way, do you have
any information that would indicate that any officials of the Whit^e
House or the Department of Agriculture indicated that they would be
of assistance in obtaining a decision more favorable than the one on
March 12, provided that certain contributions were made by any of
the dairy co-ops ?
Mr. Hanman. Not to my knowledge.
Mr. Sanders. Or any person within the Committee To Re-Elect the
President ?
Mr, Hanman. Not to my knowledge.
Mr. Sanders. Aside from contributions which might have been made
by ADEPT to the Presidential campaign of Senator Humphrey in
1972 or 1971, did Mid-Am to your knowledge provide any other con-
tributions to his campaign ?
M7'. Hanman. Run that by me again ? You are talking about Hum-
phrey and Mid-Am ?
Mr. Sanders. Yes.
7746
Mr. Hanman. Did we provide any money ?
Mr. Sanders. Any moneys to the Presidential campaign of Senatoi
Humphrey besides those that were furnished from tlie ADEPT
account ?
Mr. Hanman. Did Mid- Am contribute moneys?
Mr. Sanders. Yes.
Mr. Hanman. No.
Mr. Sanders. Did Mid-Am provide any goods or services to the
Presidential campaign of Senator Humphrey?
Mr. Hanman. As I recall, there was one airplane trip that he was on.
Mr. Sanders. What were the circumstances of that ?
Mr. Hanman. Well, trying to recollect, I believe we had a call from
his office and he had some speeches to make and wondered whether we
would provide some transportation. And a fellow from my staff, Glen
Davis, did go with him in a company plane. I do not know the date. I
believe it was before the nomination of 1972.
Mr. Sanders. Do you know where they traveled to ?
Mr. Hanman, Somewhere in the Midwest.
Mr. Sanders. Do you know who called from Senator Humphrey's
office?
Mr. Hanman. No, I do not.
Mr. Sanders. That was the Mid-Am airplane ?
Mr. Hanman. Yes.
Mr. Sanders. Do you know of any other such flights ?
Mr. Hanman. For Humphrey ?
Mr. Sanders. Yes.
Mr. Hanman. No. That is the only one I recall right now.
Mr. Sanders. On the flight that you just mentioned, were those
Presidential campaign appearances?
Mr. Hanman. I really do not know whether they were Presidential
candidate's appearances or not. He was making some speeches, I know
that.
Mr. Sanders. Do you know of any other goods or services provided
to Senator Humphrey's Presidential campaign by Mid-Am?
Mr. Hanman. Not that I recall, just that one.
Mr. Sanders. Were any moneys or goods or services provided by
Mid-Am, as opposed to ADEPT — provided to the Presidential cam-
paign of Congressman Mills?
Mr. Hanman. Yes. T recall one plane trip that he was on.
Mr. Sanders. Would you explain that ?
Mr. Hanman. As I recall, it was a similar circumstance. We received
a call wondering if we could provide some transportation, and our
plane did fly somewhere in the Midwest again, and I believe Glen
Davis of our staff did go on that trip with Mr. Mills.
Mr. Sanders. Was the request from Congressman Mills, the congres-
sional office, do you know ?
Mr. Hanman. T really do not Icnow where the call came from.
Mr. Sanders. Was it during the time that he was a Presidential
candidate ?
Mr. Hanman, Could you define that period ?
Mr. Sanders. The draft Mills campaign began in about the summer
of 1971.
7747
Mr. Hanman. Between then and when was it? When was the con-
vention— August ? Yes, it would have been during that period.
Mr. Sanders. Is that the only flight that you know of for Mills ?
Mr. Hanman. Yes.
Mr. Sanders. Was that the Mid- Am corporate jet aircraft ?
Mr. Hanman. Yes, the one that we had leased. Yes.
Mr. Sanders. Do you know of any other moneys or goods or services
provided for Congressman Mills ?
Mr. Hanman. From Mid-Am ?
Mr. Sanders. Yes.
Mr. Hanman. None.
Mr. Sanders. That is all T have.
Mr. Weitz. Mr. Hanman, were you aware of meetings in March
1971, or contacts during that period, between representatives of AMPI
and people in the White House, other than the meeting with the Presi-
dent ?
Mr. Hanman. Only a vague recollection. I do not know of any
specific meeting or who attended.
Mr. Weitz. That would include Mr. Colson, for example.
Mr. Hanman. I do not know whether I ever heard his name men-
tioned.
Mr. Weitz. Mr. Kalmbach, who would not have been in the admin-
istration, or who would have been a Republican fundraiser at that
time ?
Mr. Hanman. No, I do not believe his name came up.
Mr. Weitz. Therefore, if the record indicates, or if there is evi-
dence, that there were meetings between AMPI i-epresentatives and,
say, Mr. Colson and Mr. Kalmbach during that period, you were not
told, either of the meetings or the substance of the meetings?
Mr. Hanman. That is right.
Mr. Weitz. I have no further questions — excuse me, I do have one
further question.
The same question would apply to Secretary Connally. Are you
aware of any contacts or meetings in March of 1971. between AMPI
representatives or their lawyers and Secretary Connally ?
Mr. Hanman. My recollection is, Jacobsen did indicate at one meet-
ing I was at, that he had talked to Connally.
Mi-. Weitz. Do you recall where you were when this meeting took
place, the meeting with Jacobsen ?
Mr. Hanman. As I recall, it was in the Madison Hotel.
Mr. Weitz. Do you recall who else was present ?
Mr. Hanman. As I recall, it was in the AMPI suite of rooms, and
Jake did come in when I was there and said that he had talked, that
he had come back from talking to Connally.
Mr. Weitz. Do you recall when this occurred ?
Mr. Hanman. t do not know whether it was before or after the first
decision.
Mr. Weitz. And were Nelson and Parr there ?
Mr. Hanman. My recollection is, one of them was there, maybe both
of them.
Mr. Weitz. How about Bob Lilly ? Was he there ?
Mr. Hanman. I cannot testify about whether he was there or not.
As I recall, the instance was when Jake had come back from this
meeting and he was reporting to Harold and/or Dave.
7748
Mr. Weitz. What did he report?
Mr. Hanman. He reported that he had talked to Connally, Connally
understood our problem and was sympathetic to the problem, and
would talk to the President about it.
Mr. Weitz. You do not recall whether it was before or after the
Secretary's decision on March 12?
Mr. Hanman. No, I do not.
Mr. Weitz. Was there an attempt to reach, get information to, or
talk to the President about this before the 12th, or was the emphasis
with regard to the administration mostly on the Secretary of
Agriculture ?
Mr. Hanman. We had prepared a position paper, as you know,
on the economic justification for the price support, and that was
presented, as I recall, to the Secretary. And I think an effort was made
to get that to the President. I think we mailed some copies of it to
the President.
Mr. Weitz. Did Harrison do that?
Mr. Hanman. I do not know. I believe he mailed it to him.
Mr. Weitz. Was there any discussion at that meeting about con-
tributions— the meeting where Jacobsen reported back?
Mr. Hanman. No.
Mr. Weitz. Do you recall any meeting at which contributions were
discussed in connection with the assistance of Secretary Connally?
Mr. Hanman. No. The only time that I have ever talked to Mr.
Connally or had any meeting with respect to contributions was after
he was organizing the Democrats for Nixon.
Mr. Weitz. How about without Mr. Connally present, but with
Jacobsen present, or with others of the dairy co-ops about contribu-
tions and the assistance of Secretary Connally in the price-support
matter ?
Mr. Hanman. Not that I recall.
Mr. Dorsen. Since you testified in November 1973 before this com-
mittee, has your recollection been refreshed as to any other events than
the events to which you have testified here today ?
Mr. Hoecker. Regarding political contributions ?
Mr. DoRSEN. Regarding his earlier testimony.
Mr. Hanman. No ; not that I recall. I was trying to think what I
read in the papers. I do not recall anything.
Mr. Dorsen. I have no further questions.
Mr. Weitz. We have no further questions.
Thank you, Mr. Hanman. We will recess for today.
[Whereupon, at 3 :50 p.m., the hearing in the above-entitled matter
was adjourned.]
FRIDAY, MAY 31, 1974
U.S. Senate,
Select Committee on
Presidential Campaign Activities,
Washington^ D.C.
The Select Committee met, pursuant to notice, at 9:15 a.m., in
room G-334, Dirksen Senate Office Building.
Present: Senator Talmadge.
Also present : David Dorsen, assistant chief counsel ; Alan S. Weitz,
assistant majority counsel; Donald Sanders, deputy minority counsel.
Senator Talmadge. Phil, raise your right hand please. Do you
solemnly swear that the evidence you shall give the Select Committee
to Investigate Presidential Irregularities in the Campaign Year of
1972 shall be the truth, the whole truth, and nothing but the truth,
so help you God 'I
Mr. Campbell. I do.
[Recess.]
Mr. Weitz. Mr. Campbell, I think the record ought to first reflect
that you have been interviewed informally by the staff on October 3,
1973, and also January 8, 1974. We thank you for your returning at
our request for this session.
In that regard, I don't believe we are going to cover all of the points
we have gone over with you before, but ratner focus on certain par-
ticular events.
TESTIMONY OF J. PHIL CAMPBELL, UNDER SECRETARY OF THE
U.S. DEPARTMENT OF AGRICULTURE
Mr. Campbell. All right.
Mr. Weitz. I would like also to indicate — off the record.
[Discussion, off the record.]
Mr. Weitz. Back on the record.
In connection with the private cvvW action of Nader v. Butz in the
Federal District Court in the District of Columbia, you executed an
affidavit on March 10, 1972. Is this a copy of your affidavit ?
Mr. Campbell. Yes.
Mr. Weitz. I Avould like to enter that as exhibit 1 to your testimony
today and that, of course, covers many of the points relating to this
matter.
[Whereupon, the affidavit referred to was marked Campbell exhibit
No. 1.*]
Mr. Weitz. Mr. Campbell, I take it you were familiar and are famil-
iar \\\i\\ the Associated Milk Producere, Inc. ?
Mr. Campbell. Yes.
* Seep. 7791.
(7749)
7750
Mr. Weitz. There are also several others, namely, the Mid- America
Dairymen, Inc., and Dairymen, Inc. ? Those are three dairy coopera-
tives ?
Mr. Campbell. Yes.
Mr. Weitz. And I take it also you are familiar with and have met
one or more times with several of them, at least some of them, with
the now past leadere of those cooperatives, including Harold Nelson
and David Parr ?
Mr. Campbell. Yes.
Mr. Weitz. Would that also include Gary Hanman ?
Mr. Campbell. I don't identify the name immediately. I met with
several diiferent people at different times, and I don't remember that
name specifically, but there were some people that I met in Assistant
Secretary Dick Lyng's office one time that included all three of these
co-ops. I don't remember the specific names, though. I remember that
name but I don't exactly identify who he was with.
Mr. Weitz. He is an executive with Mid-America Dairymen and I
believe records in our possession as well as his testimony indicate he
met with you at least on one occasion.
Mr. Campbell. Well, I am sure he was probably in the group if he
is one of their high-level people because, as I remember, all three of
them came down once and I don't even remember what year or day
it was that we met in Assistant Secretai-y Lyng's office. I could have
seen him on other occasions, too. But I don't remember specifically.
Mr. Weitz. Now in connection with the milk price-support matter
in March 1971, did you have occasion to meet with one or more of
the dairy representatives before the Secretary's first decision on March
12?
Mr. Campbell. Oh, I saw the dairymen regularly — well, not regu-
larly, but I saw them on occasion here and there, and they were in
town and out on occasion and they would call me or come by, but I
can't give you any specific dates. Also. I was out meeting with dairy-
men on speaking engagements that did not involve these thre& groups
but other dairymen in Ohio, Pennsylvania, and New York. So I was
seeing dairymen on occasion and talking to them on occasion just in
the pursuit of my business and on occasions when they came to town.
But, as I say, I don't remember the dates.
Mr. Weitz. In the course of your contacts with them and their con-
tacts with others at the Department of Agriculture prior to March 12.
1971, was it your understanding that they had urged an increase of
milk price supports and had pressed their various arguments in favor
of an increase?
Mr. Campbell. Yes.
Mr. Weitz. And did they do so with you as well as others ?
Mr. Campbell. Yes.
Mr. Weitz. And their arguments to support an increase included
reference to an increased cost to dairy farmers ?
Mr. Campbell. Yes.
Mr. Weitz. I take it your position, before the first decision and at
the time of the first decision, was of concern over the fact that an in-
crease would cause overproduction of milk for the coming year?
Mr. Campbell. Yes, and also — well, yes; that is essentially correct.
Mr. Weitz. And I take it also that that was the concern of those in
the Department who recommended no increase ?
7751
Mr. Campbell. Yes.
Mr. Weitz. And Secretary Hardin, as well as the other Directors
of the Commodity Credit Corporation, concurred in that recommenda-
tion?
Mr. Campbell. Yes; it was a close call, though, because the dairy-
men had had increased costs. There were arguments on both sides, but
our judgment came down on the side against.
Mr. Weitz. Before March 12, 1971, oefore the first decision was an-
nounced, did you have any contact with anyone in the TVhite House
on this matter ?
Mr. Campbell. Well, when you say White House, I am not sure.
I know that we dealt with the 0"MB.
Mr. Weitz. Who did you deal with there ?
Mr. Campbell. I believe — I was trying to think of the name.
Mr. Weitz. With Don Rice ?
Mr. Campbell. Don Rice ? That is correct. And I don't know, but I
))ossibly could have had one conversation with Secretary Shultz, but
I don't know Avhether it was before or after the increase — when he
wanted to know what the issues were. As I say, I don't know, but I
possibly could have.
Mr. Weitz. Before or after the increase or before or after the first
decision ?
Mr. Campbell. Well, both.
Mr. Weitz. I see.
Mr. Campbell. Yes, both; but he wanted to know what the issues
were, I believe.
Mr. Weitz. Was it the position of Mr. Rice — or Dr. Rice — that they
concurred, that the OMB concurred in the position of no increase?
Mr. Campbell. Yes.
j\Ir. Weitz. Now you referred to the OMB. I take it there may also
have been contacts with the Council of Economic Advisers?
Mr. Campbell. I don't recall personally having had any contact, but
I am cei'tain that possibly some of the people in the Department did, or
I guess they did. You see, we have lower echelon working people that
work with these people daily and I assume they did, but I don't recall
personally liaving had any contact ; no.
INIr. Weitz. Do you know whether the recommendation foi- no in-
crease before the March 12 decision — do you know if that is reviewed
by OMB as a regular matter ?
Mr. Campbell. Yes ; they review everything we do.
Mr. Weitz. So therefore the recommendation of OMB from USDA
in March 1971 was for no increase?
Mr. Campbell. Yes.
Mr. Weitz. That was concurred in ?
Mr. Campbell. Yes ; we always come to a mutual position. We don't
move without their concurrence on anything and we have to meet with
them.
Mr. Weitz. How, apart from OMB and the CEA, what about the
President's own staff, the Wliit« House staff — for example, people on
the domestic council or Mr. Ehrlichman's staff or ]\Ir. Colson's staff ;
did you have any contact with them prior to March 12?
Mr. Campbell. I don't remember any, very frankly. I could have,
but I don't recall that I did. It is possible that I could have talked to
7752 !
Mr. Ehrlichraan, but I do not recall whether I did or not; I really
don't know. I do remember a conversation with Secretary Shultz.
Well, he was not Secretary at that time
Mr. Weitz. He was Director of 0MB ?
Mr. Campbell. He was Director of OMB.
Mr. Weitz. You had a conversation with him sometime in March
and you are not sure whether it was before or after the first decision ?
Mr. Campbell. That is correct.
Mr. Weitz. Was anyone else present at that conversation ?
Mr. Campbell. This was a telephone conversation.
Mr. Weitz. And what was the purpose of this call ?
Mr. Campbell. Oh, he wanted to know the issues — what the issues
were and what our position was, and, you know, it was the fear of
overproduction, which would then impact on the Treasury.
Mr. Weitz. Was there any discussion during that conversation of
the political impact of the decision ?
Mr. Campbell. No; not that I recall. I don't recall discussing polit-
ical impact with Secretary Shultz. No ; not than I can remember.
Mr. Weitz. Do you remember discussing the political impact of the
lirst decision — discussing it prior to the first decision — with anyone,
either in USDA or in the White House ?
Mr. Campbell. Oh, well, in the USDA we — well, it depends on how
you define "politics." IVe were well aware that they had the push on
to increase the prices. They were pressuring us, as I have answered
previously, to raise the prices.
Mr. Weitz. Before the first decision ?
Mr. Campbell. Oh, yes. And then people from the Hill were also
doing the same thing — the Members of Congress— and we were getting
calls from dairymen here and there, not limited to these three groups,
but from my own State and elsewhere, for example. They were press-
ing their case to have the price raised.
Mr. Weitz. And did you discuss that with anyone in the White
House?
Mr. Campbell. Oh, I don't recall that I did, but I ]ust don't know.
I don't recall discussing that particular pressure. I could have, but
I don't recall it. I didn't have that many discussions with the AVTiite
House, very frankly.
Mr. Weitz. Did anyone in the Wliite House indicate that they were
concerned about the pressure or the activity of the dairy people, or had
other contacts and concerns, about this issue?
Mr. Campbell. Prior to the decision ?
Mr. Weitz. Yes.
Mr. Campbell. No; not that I recall. They could have, but I don't
recall. No ; not that I remember. As I say, I didn't have that many con-
versations with them. I don't recall. I don't recall having that type
of conversation ; no.
Mr. Weitz. How about Mr. Chotiner ; did you have any contact with
him about the price-support matter before March 12 ?
Mr. Campbell. I don't recall having one. no. I don't know the gen-
tleman that well — don't know if I ever met li|im. I could have talked to
him on the phone a time or two, but dcjn't recall any conversa-
tion in regard to this. i
7753
Mr. "Weitz. Do you know whether Secretary Hardin had any such
contacts prior to March 12 with anyone in the "\^Tiite House ?
Mr. Campbell. I don't know. No, I can't speak for him. I really don't
know.
Mr. Weitz. Did he discuss any of his contacts with you*?
Mr. Campbell. Well, I am sure ^^•e discussed generally — well, when
you say the White House, you are separating it from the OMB ?
Mr. Weitz. Yes.
Mr. Campbell. Well, I just don't recall him discussing anything with
me in that respect, although he could have. I just don't recall.
Mr. Weitz. Did he indicate that he talked to the President about the
decision before March 12 ?
Mr. Campbell. No, I don't recall that, no.
Mr. Weitz. Was this a type of decision that normally, from your
experience would have been reviewed by the President ?
Mr. Campbell. No ; I don't think so. I don't know.
Mr. Weitz. Do you know whether Secretary Hardin — do you know
whether he discussed with you, or did you otherwise know, whether
he had requested that the President review this particular decision be-
fore it was issued ?
Mr. Campbell. If T did, I don't recall him ever telling me. I don't
recall any such — no. I just don't recall it.
Mr. Weitz. Now, you have distinguished — or rather I have distin-
guished between the White House and, for example, OMB. Do you
know whether Secretary Hardin discussed this with Director Shultz or
anyone from OMB or CE A ?
Mr. Campbell. I am sure we discussed it with OMB, because any-
thing that impacts on the budget we do discuss with them, and I would
assume he did because I think we had a conference, as I said, with
Don Rice.
Mr. Weitz. About that conference, who was present at that?
Mr. Campbell. I don't know.
Mr. Weitz. Was Stcietaiy Hardin present?
Mr. Campbell. I don't remember.
Mr. Weitz. Were you ?
Mr. Campbell. I would assume I was. I don't remember, very frank-
ly, who was there. I don't really remember the conference, but it is on
the schedule, and in my office the records show that I was there, but
I don't remember the conference. I do Ivuow that it is routine procedure
for us to go over all of these with OMB, and I am certain we did.
Mr. Weitz. Do you recall from your records what date that confer-
ence took place ?
Mr. Campbell. No ; I don't. It can be ascertained.
Mr. Weitz. Would you ? Would you do that when you return, and
provide us the date of that conference ?
Mr. Campbell. Yes. The date of the Don Rice conference ?
Mr. Weitz. Yes, and indicate in your notes those who attended and
where it took place.
Mr. Campbell. OK. It was doubtlessly over in his office in the Ex-
ecutive Office Building, but I will find out.
7754
Mr. Weitz. Now I have here a copy of the docket that was prepared
in connection with the March 12 decision not to increase the price-
sui^port level.* This is already an exhibit to an affidavit in our records
and I won't enter it as an exhibit, but I do want to ask you a question
about it. Did you review or have anything to do with the preparation
of the press release for March 12 announcing the decision?
Mr. Campbell. I don't recall participating in that press release.
Mv. Weitz. Would you have reviewed it or at least seen a copy of it ?
]Mr. Campbell. I don't know. We have a system of OKing press re-
leases and the assistant secretaries generally do that; if they are out
of town, they may push them into my office, but I don't remember see-
ing that one and I do not remember participating in the preparation
of it. I did participate in the decisionmaking to keep the support price
where it was.
Mr. Weitz. Now, in the March 12 press release issued by the De-
partment and reflecting the announcement by Secretary Hardin,
after a discussion of the milk price-support matter, it refers to the
fact that the Secretary had noted tliat the President had directed
the Tariff Commission to review imports of certain cheese products.
Mr. Campbell. Yes.
Mr. Weitz. Was that considered at the same time in March, and
earlier, as the price-support matter ?
Mr. Campbell. The dairymen had been disturbed ever since we had
been in office and prior to that in the preceding administration, they
had been disturbed with the level of imports and that was always a
const-ant topic of discussion, along with other matters, whenever the
dairymen came in. That Avas one of the things that they were wanting
to do — to close up the imports. And the imports Avere discussed
and
Mr. Weitz. With the dairy people? By the dairy people, I mean?
Mr. Campbell. Oh, yes.
Mr. Weitz. Was the fact that the announcement of a commencement
of an investigation of the proper level of imports of certain cheese
products — the fact that that would be announced together with the
milk price-support matter — was that discussed with anvone in the
^Vhite House or OMB ?
Mr. Campbell. I don't know. Not to my knowledge. I didn't have
any sucli discussions that I can recall with the '\^niite House. It could
have come up in the Don Rice discussion because the dairymen all had
the push on with regard to the imports and we have to worry about
this on all of our commodities. This isn't just peculiar to milk.
Mr. Weitz. When I say discussions, I am also referring to any mem-
orandums that were circulated to or from USDA. Do you recall any
memorandums that refer to both of the matters together?
Mr. Campbell. T don't recall. That doesn't say there was not one. but
I don't recall seeing one.
Mr. Weitz. Is it unusual to have a press release that refers to two
se]>arate matters together ?
Mr. Campbeix. No; I don't think so. I don't think that is unusual
because this is one of the concerns of the daii-ymen and they had taken
the previous administration over the rough path — to get the previous
administration to close up some of the imports.
♦ See p. 7847.
7755
This was a continuing issue that the dairymen pressed constantly,
and they are also concerned with it today. So it is not unusual that that
occurred, in my opinion.
Mr. Weitz. No, not the announcement. My question is, was there
anyone who linked
Mr. Campbell. Linked the two together ?
Mr. Weitz. Yes.
Mr. Campbell. I don't recall that there was. If there was, it didn't
arouse any significance in my mind. It doesn't arouse any particular
significance to me except it w^as an issue the dairymen were concerned
about.
Mr. Weitz. And you recall no discussion of issuing this part of the
announcement as an offset or somehow to appease the dairy people for
the adverse j)rice-support decision ?
Mr. Campbell. No ; I don't recall that being discussed but I can see
where that would be kind of a bone thrown to them, you know; it
would appear that way, but I don't recall it being discussed in that
context; no.
Mr. Weitz. Now after — Sorry, did you want to add something?
Mr. Campbell. I can say I personally would have been in favor of
trying to close the imports to an extent because the imports we were
receiving were highly subsidized and our dairy farmers have a very
difficult time competing against highly subsidized imports from Eu-
rope, where their govermnents, out of their treasuries, subsidize them.
I would personally be in favor of doing that for that reason because
the dairj'men in America operate at a disadvantage against imports
highly subsdized by their governments.
Mr. Weitz. Between March 12 and 23, that is, between the time
of the announcement of the first decision and the meetings with the
President and dairy people and his advisers on March 23, was there
any review of the economic merits of the first decision in the USDA ?
Mr. Campbell. Well, the only way I can answer that is that things
are constantly at our attention. We are aware of situations. We had
the corn blight the year before. We knew the dairymen were in a
bind on cost. And there was, as I said, a close decision there.
I don't recall any specific meeting where we did this, but we had
tlie cost figures already as to the situation with the increased cost
to the dairymen because of the corn blight the preceding year which
had shortened the corn supply and raised their concentrate price.
We had these figures; and, of course, we were well aware of the fact
that the cost had gone up. We keep these figures on a day-to-day,
ongoing basis.
Mr. Weitz. You mentioned that the first decision was a close
decision. Can you name anyone in USDA who favored an increase?
Mr. Campbell. No, I cannot. You see, the real issue was whether or
not the market price, which had already escalated into the $4.90
range — the question was whether or not that market price would be
sufficient to sustain the dairymen rather than us also raising the sup-
port price above the $4.66 level. And we were of the opinion that
the market price should be adequate without us moving the support
price. I don't recall anyone in the Department opposing that de-
cision. There could have been some that disagreed, but I don't recall
any that did, just now.
7756
Mr. Weitz. Between the 12th and 23d, can you tell us who en-
gaged or who you were aware of was reviewing the wisdom of the
first decision?
Mr. Campbell. I can't tell you anyone who got down and took
statistics and laid them out on a table and did it. It had to be a mental
review because we already knew what the facts were.
Mr. Weitz. Well, did you discuss this with anyone?
Mr. Campbell. I don't recall any particular discussion, no ; I do not.
Mr. Weitz. So to your knowledge if anyone was reviewing it, it
would have been indiA-idually and it is your surmise that they were
reviewing it?
Mr. Campbell. That is right. And I am sure I had conversations,
you know, with others in the Department, the Secretary, but I can't
recall specific coiiA^ersations. It was just a daily subject. We talked
about it off and on because these dairymen really had the push on
and after the decision on the 12th, the pressure on the Hill increased
considerably.
Mr. Weitz. In that period between the 12th and the 23d. did you
have any contacts with anyone in the White House on this matter ?
Mr. Campbell. I don't recall any, no.
Mr. Weitz. Do you know iwhether Secretary Hardin did ?
Mr. Campbell. He could have but I don'it remember.
Mr. Weitz. Well, this meeting with Mr. Ehrjichman or this dis-
cussion
Mr. Campbell. No, I don't know anything aibout his schedule. I
don't recall what meetings the Secretary had.
Mr. Weitz. No, I am saying, I think you indicated you may have dis-
cussed this matter at some point in March with Mr. Ehrlichman. Was
that discussion during this period ?
Mr, Campbell. I could have. I don't remember whether I did or
not. I was saying it was a possibility. I was trying to think of the
names I possibly could have talked to — George Shultz, I am positive
I did have a telephone conversation ,with ; Don Rice, acicordihg to the
logbooks — we did have a meeting with him ; and there is a possibility
that I talked with John Ehrlichman, but I don't know that I did. I
wont say whether I did or did not, but if I did talk with somebody
else, it might have been him.
Mr. Weitz. Wliat about John AVhitaker, his assistant ?
Mr. Campbell. Well, John was our contact over in the Domestic
Council. I am sure John knew what was going on. I don't know who
he had conversations witli. I don't know whether I talked to John. He
was our contact, so he had daily conversations with people in the
Department I am svire.
Mr. Weitz. The same question for Charles Colson — any contact with
him?
Mr. Campbell. I don't recall any contact with him.
Mr. Weitz. Did you see any memorandum from Mr. Colson, or
reviewed by Mr. Colson. and circulated ?
Mr. Campbell. I don't recall. I was just going to add that as far as
my decision Avas concerned, I was still out making speeches — telling
the dairymen "Don't do this," during that period of time.
Mr. Weitz. Do you know Avhether Secretary Hardin had such con-
tacts as I questioned you about ?
7757
Mr. Campbell. No, I do not.
Mr. Weitz. That would be for the period of the 12th to the 24th.
Mr. Campbell. That is right. I do not know.
Mr. Weitz. I believe you said that you were making some speeches in
March with regard to the dairy farmers' position ?
Mr. Campbell. Yes.
Mr. Weitz. What was your position and what was the essence of
5'^our speeches that you were making?
Mr. Campbell. Well my position was that history, for the past 20
years, had shown that when the support price was escalated to too high
a level, it automatically stimulated over-production which got the
dairy farmers in trouble with surpluses which it usually took 4 or 5
years to get rid of. And as a result of the buildup of surpluses twice
previously before this administration, the Department had had to
actually lower the prices because of the surpluses after they had raised
the prices, and I was urging them to look at history and "Let's not
do this again by raising this support and possibly having you over-
produce, which will then cause the Department to have to lower it,
as happened twice in the two preceding administrations — one each."
And I was trying to urge them, "Let's learn something from the history
of the past," and that the market price already was substantially up.
Mr. Weitz. In that regard, let me show you a press release from the
Deartment of Agriculture, which I would like to mark as exhibit 2.
It is a copy, or excerpts from a speech you gave at State College, Penn-
sylvania, March 22, 1971. Is that a copy of that release reflecting
excerpts from your speech ?
[WTiereupon, the document referred to was marked Campbell ex-
hibit No. 2.*]
Mr. Campbell. Yes ; I am sure it is. The first paragraph sure looks
like it. Yes ; this is a copy.
Mr. Weitz. And that substantially reflects the position you just
discussed?
Mr. Campbell. Yes ; that is correct. •
Mr. Weitz. Wasn't there, in fact, a concern on the part of the Admin-
istration that if there was to be an increase in either 1971 or 1972, it
should come in 1972, during an election year, rather than a decrease
in 1972?
Mr. Campbell. I didn't hold that viewpoint. If anybody else did, I
don't know about that.
Mr. Weitz. No one discussed that with you ?
Mr. Campbell. I wouldn't say they didn't, but I mean if they did, I
didn't accept it. I didn't think that was — I mean, it could have been
discussed with me but I didn't hold that.
Mr. Weitz. Do you know who may have discussed that?
Mr. Campbell. No ; I don't. But I didn't, as I say, accept that. The
speech is the proof of that.
Mr. Weitz. Well, the position you just said is — your fear was that
an increase one year, in fact, would lead to overproduction, which
would lead to a decrease in some subsequent year.
Mr. Campbell. Yes ; but not necessarily the immediately following
year, because dairy production doesn't change that quickly. It is not
a cash crop where you can plant it in the spring and greatly expand
*See p. 7801.
7758
production. You don't get the buildup that fast. You have to increase
the number of cows and expand
Mr. Weitz. But if — sorry, go ahead.
Mr. Campbell. I was thinking of the dairymen and their welfare.
I wasn't thinking of the political impact.
Mr. Weitz. Did anyone else ever seem to take the other aspect into
consideration — the political impact on the election ?
Mr. Campbell. At what period ? When ?
Mr. Weitz. In March of 1971. Let's take up to March 23, at this
point, and then later.
Mr. Campbell. I don't know that anyone in the Department took
that viewpoint. If they did, I am not aware of it. I don't recall any-
body putting any pressure on me because of that, or anybody else ; no.
Mr. Weitz. Were you aware of any such position or arguments
from the "Wliite House ?
Mr. Campbell. I was not aware of anyone in the White House
putting any pressure on at that time ; no, I Avas not.
Mr. Weitz. Besides putting on pressure, though, did anyone state
that position or discuss that possibility ?
Mr. Campbell. I don't recall it. I don't recall they did. They could
have, but if they did, I don't recall it.
Mr. Weitz. Do you know Marion Harrison ?
Mr. Campbell. Yes.
Mr. Weitz. Did he take that position ?
Mr. Campbell. I am sure he did because he was representing —
legally, I mean — some of the dairy groups. He was pressing their
cause the same as the dairymen.
Mr. Weitz. And one of the arguments he made was the adverse
impact of a decrease the following year ?
Mr. Campbell. No ; he didn't take that position on that point. His
position was just for an increase — let's increase. No, to me, as I
recall, he never made that statement.
Mr. Weitz. And did you ever see any letters from him that re-
flected that argument ?
Mr. Campbell. I don't recall any. He could have done it, but I
don't recall it. If he did, I don't recall. You see, if anybody gave that
to me, I w^as so much on the other side of the fence, I didn't accept
it. I did not accept it.
Mr. Weitz. Do you recall attending a meeting at Mr. Ehrlichman's
office on March 19,'l971 ?
Mr. Campbell. No, I don't. Could have, but I don't recall.
Mr. Weitz. A meeting to discuss the price-support matter?
Mr. Campbell. No ; I could have, but I don't remember.
Mr. Weitz., Do you remember a meeting sometime during the
period of March or prior to March 23 at which
Mr. Campbell. When I say "I could have"
Mr. Weitz. Just a second. A meeting that Mr. Ehrlichman attended,
together with Secretary Hardin and Director Shultz?
Mr. Campbell. I don't recall it, but I could have. I just don't recall
it.
Mr. Weitz. Do you recall Secretary Hardin, if you did not attend,
reporting back to you about such a meeting ?
Mr. Campbell. No; I don't recall, but I still can't say it didn't
occur. I just don't remember.
7759
Mr. Weitz. Do you recall Secretary Hardin discussing with you
any of his contacts or meetings or conversations with anyone in the
AVhite House or 0MB prior to March 23?
Mr. Campbell. No; I don't recall any conversation. There could
have been, but I don't recall any.
Mr. Weitz. Did he do so, even if you don't recall the specifics of the
conversation ?
Mr. Campbell. I just don't know.
Mr. Weitz. Do you remember attending a meeting on the morning
of March 23 with the President and the dairy leaders?
Mr. Campbell. Yes.
Mr. Weitz. Prior to that meeting, you had sent over to Mr. Whit-
aker proposed opening remarks for the President. Is that correct?
Mr. Campbell. I am not sure I did that. I don't know. I may have
transmitted it, but I didn't prepare it.
Mr. Weitz. Did Assistant Secretary Lyng prepare that ?
Mr. Campbell. I think that is correct.
Mr. Weitz. At whose request ?
Mr. Campbell. I don't know who requested it.
Mr. Weitz. If it was sent to Mr. Whitaker, would Mr. Whitaker
have requested it ?
Mr. Campbell. I think — I am trying to recall to the best of my
memory, and I am not sure, but it seems to me I do recall Assistant
Secretary Lyng bringing it to me and showing it to me. And I didn't
prepare it and I don't know whether I transmitted it or whether he
transmitted it. It was his memo. And I don't remember who trans-
mitted it. I may have or he may have. I don't recall.
Mr. Weitz. Do you recall whether there was any reference in the
memorandum, in the proposed remarks, to the political impact of the
decision ?
Mr. Campbell. No ; I don't recall exactly what was in the memo. I
do not. I know he prepared one, but I don't recall exactly what was
in it.
Mr. Weitz. Now, this meeting on the 23d, of course, had been sched-
uled several weeks and had been discussed months beforehand?
Mr. Campbell. That is right.
Mr. Weitz. But it did come 11 days after the adverse decision, from
the dairy people's point of view ?
Mr. Weitz. Now was there any discussion or were you aware of any
consideration of canceling the meeting because of the adverse decision ?
Mr. Campbell. No, I had nothing to do with setting the meeting up,
or at least I don't remember having any conversations with regard to
setting up the meeting or canceling it, either one. Somebody else made
those arrangements.
Mr. Weitz. But did anyone discuss with you, or mention to you, the
possibility that that was considered ?
Mr. Campbell. I don't recall that they did, but it is possible. I don't
remember it.
Mr. Weitz. What was your understanding of the position of the
administration that would be taken vis-a-vis the dairy people, at the
meeting on the 23d ?
Mr. Campbell. Well I don't think we established — do you mean
prior to the meeting or during the meeting?
7760
Mr. Weitz. No ; in other words, in entering the meeting — going into
the meeting.
Mr. Campbell. What was the purpose of the meeting?
Mr. Weitz. No; the meeting had been arranged sometime before-
hand
Mr. Campbell. Yes.
Mr. Weitz. The meeting, however, occurred during a period when
the dairy people were actively seeking an increase that the adminis-
tration, 11 days before, had not granted them. My question is : What
was your understanding — what did you and Secretary Hardin under-
stand or discuss as to the position that the President and the adminis-
tration people would take with regard to the price-support matter in
meeting with the dairy people on the 23d ?
Mr. Campbell. Well, our position was still that we were sticking by
our original decision and that this was a courtesy meeting as far as
we were concerned.
Mr. Weitz. In other words, your understanding was that the meet-
ing would be used, to the extent it referred to price supports, to more
or less defend and try to win over the dairy people to your point of
view ?
Mr. Campbell. No, I didn't take it in that context. The context in
which I took it was that the President had invited them many months
before, while we were in Chicago at a meeting, by a long-distance
telephone call from San Clemente, to Secretary Hardin and to Harold
Nelson on the stage, before we went out to the meeting of the dairy-
men who were assembled there. So I didn't consider the meeting in
any other light other than that the President had said : "Get some of
your leaders together and bring them down to see me."
And to me the meeting was held for that purpose — as a courtesy
call of the dairymen being able to come in and meet with the President.
And I did not view the meeting as one to — of course I expected the
dairymen to try to make an argument at the meeting, but I did not
consider the meeting as one to change our decision, but merely as a
courtesy call of the dairymen to present their arguments.
Mr. Weitz. Well, as you say yourself and as the White House has
discussed in its own white paper, the meeting was first discussed or
mentioned many months before JNIarch 23 and it had been delayed and
it had taken a numbei- of months to arrange it.
Now, it being originally scheduled as it was right at the peak period
Avhen the dairy people were seeking an increase, partly on the Hill and
perhaps still in the administration, was there any discussion that you
imdei^tood to have taken place to either delay the meeting or, on the
other hand, to vigorously defend the administration's position at the
meeting ?
Mr. Campbell. No, I don't recall any of that appearing. All I recall
was that the, meeting had been set up maybe 60 daj's or 4, 5, or 0 weeks
prior to the date it was actually held and that it was a courtesy call.
I don't remember any effort to cancel the meeting or any effort to
use it as a meeting to defend our position, although I did expect the
dairymen to press foi- their position. At the same time, very frankly,
in the meeting I argued against them.
]\Ir. Weitz. In other words, you did defend the first decision?
Mr. Campbell. I did, yes.
7761
Mr. Weitz. Did you discuss that with Secretary Hardin before you
went into the meeting, knoAving that the dairymen would, in fact, press
their position ?
Mr. Campbell. I don't recall I did, but he and I were very close and
like minded, and I didn't feel compelled to discuss it Avith him because
I know his views.
Mr. Weitz. And no one in the White House, knowing the dairy-
men would press their position and that you Avould be there and had
contrary views — no one in the White House checked with you and no
one in ITSDA checked about Avhat sliould be said or what position
should be taken ?
Mr. Campbell. I think that is probably when Secretary Shultz
called me to find out what the issues were, to refresh his memory.
Mr. Weitz. Prior to the March 23 meeting ?
Mr. Campbell. Yes ; I think that was the call Avhen he asked what
the issues were.
Mr. Weitz. Did Director Shultz defend the position or state any
position at the meeting?
Mr. Campbell. Well, I don't recall Secretary Shultz saying any-
thing other than — because I could talk their language so well, he
turned around and complimented me on my ability to talk the dairy-
men's language. This is the only remarks I remember him making.
Mr. Weitz. Did the President discuss the price-support matter?
Did he defend the position? Did he address himself to it?
Mr. Campbell. No, I don't recall the President getting into that at
all, and we certainly hoped he would not; I mean, that was my per-
sonal hope. I say "we" meaning I, personally, hoped he wouldn't,
and he didn't.
He just had pleasantries and casual conversation and told them —
as I recall, he told the dairymen before he ever goes to bed at night
he drinks a glass of milk. That Avas all I remember the President say-
ing, really.
Mr. Weitz. Did he then ask you to comment on their position ?
Mr. Campbell. No, I don't think the President called on me for any-
thing. I think I voluntarily spoke for Avhate\'er I had to say.
Mr. Weitz. Did he have any comment on either their position or
your comments?
Mr. Campbell. I don't recall that he did.
Mr. Weitz. Did he stay for the entire meeting?
Mr. Campbell. Oh, yes ; that was the purpose of the meeting. I think
Ave all got out just as soon as he got out.
Mr. Weitz. Did the President indicate that he would reconsider the
position, or he Avas reconsidering the position, or that he Avould dis-
cuss it Avith his aides or anything of that nature?
Mr. Campbell. I don't recall him saying anything like that. I don't
recall that he did.
Mr. Weitz. So as far as you understood, nothing had changed as a
result of the meeting ?
Mr. Campbell. No.
Mr. Weitz. As a result of the meeting Avith the President ?
Mr. Campbell. No, not then ; no.
Mr. Weitz. And at the time of the morning meeting with the Presi-
dent, you did not know of an afternoon meeting — of a scheduled after-
noon meeting; with the President ?
7762
Mr. Campbell. No.
Mr. Weitz. Did you, in fact, have any knowledge that a reconsider-
ation was underway, or that the price supports would be increased ?
Mr. Campbell. Well, T had the knowledge of the terrific pressure
on the Hill. But no, I had no knowledge that I was fully aware of,
being in public life as long as I have and being an elected official pre-
viously, but the pressure on the Hill was building and building
Mr. Weitz. But no one — sorry.
Mr. Campbell. They were actually pushing for 90 percent — a good
many of the Members of the Hill were pushing for that, rather than
the 85 percent, to which we did eventually raise the price.
Mr. Weitz. How many bills asked for a minimum of 90 percent?
Mr. Campbell. There were some, I know. The Congressman that I
remember specifically was Congressman Ed Jones on the Agriculture
Committee from Tennessee who said that 85 percent is not enough.
Mr. Weitz. Did he sponsor a bill for 90 percent ?
Mr. Campbell. I don't recall, but he was on the committee and was
pressing for 90 percent. He could have held a hearing, but I don't
remember.
Mr. Weitz. Before the 23d ?
Mr. Campbell. Well, I don't know when.
Mr. Weitz. So in light of this terrific pressure, you didn't discuss the
matter — you don't recall specifically discussing the matter with either
Secretary Hardin or anyone in the White House ?
Mr. Campbell. Oh, well, T am sure that in our conversations casu-
ally around in the Department where we see each other every day we
discussed the buildup on the Hill, and I was aware that the Hill niight
actually, you know, force a change; but I considered it from that
direction rather than from other directions.
Mr. Weitz. But you didn't discuss it with anyone or you are not
aware of any discussions between Secretary Hardin and anyone in the
White House with respect to an administrative change, as opposed to
a legislative increase?
Mr. Campbell. No, I don't know that he did. He could have, I don't
know. Wlien you get into a battle of this type with the Congress, it is a
question of whether you fight it out to the bitter end or whether you
seek some in-beween position or whether you give in totally to Con-
gress. We have this type of thing happen on a regular basis. It isn't
peculiar just to this case.
Mr. Weitz. You attended the afternoon meeting with the President ?
Mr. Campbell. Yes.
Mr. Weitz. When did you first learn of that meeting?
Mr. Campbell. Wlien Secretary Hardin called and asked me to go
over with him.
Mr. Weitz. And that was just preceding the meeting ?
Mr. Campbell. Yes, and I don't know the exact time, but it was an
afternoon meeting.
Mr. Weitz. I believe the records show that the meeting was sched-
uled for 4:45. How much before that time did you learn of the
meeting ?
Mr. Campbell. Oh, just a few minutes before we got into the cor-
ridor to go over.
Mr. Weitz. Did it come as a surprise to you ?
7763
Mr. Campbell. Yes ; I was busy working at my desk and I got a call
from the Secretary and he said : '"'Come over and go with me,'' and any
call from the Secretary to me to accompany him, when I am very busy
and it is not on my calendar, is a little bit of a surprise, because I am
busy working. I mean, I have had that happen to me.
Mr. Weitz. What did he tell you was the purpose of the meeting?
Mr. Campbell. To discuss the dairy situation — the dairy price situa-
tion.
Mr. Weitz. Did he indicate that the President was considering re-
versing his position ?
Mr. Campbell, No; well, I will have to say I don't recall it. I don't
know whether he did say it or not. I do not recall it.
Mr. Weitz. Who else attended the meeting?
Mr. Campbell. As I remember, the President was there and Secre-
tary Hardin and I was there and George Shultz and John Connally
and one or two others, and I just never have ever been able to remem-
ber who these other two were.
Mr. Weitz. Was Dr. Eice there ?
Mr. Campbell. I don't remember, but he probably was, but I am
not sure.
Mr. Weitz. How about John Whitaker ?
Mr. Campbell. He could have been there, but I don't know that
either. I can't identify the others. There are the ones I definitely re-
member being present that I stated to you, but there were, I think, two
more people.
Mr. Weitz. On the way to the meeting, what did you discuss with
Secretary Hardin ?
Mr. Campbell. Well, I don't recall Avhat we discussed, very frankly.
Mr. Weitz. I would assume you would discuss price supports, the
price support ?
Mr. Campbell. Probably, but as I say, I don't recall the conversation.
Mr. Weitz. In fact that would have been, to your best recollection,
the only meeting you had with the President about price supports?
Mr. Campbell. The only one. I have only been in the President's
presence not more than three or four times, except at social occasions.
Mr. Weitz. But is it likely that you and Secretary Hardin reviewed
your positions before you went into the meeting?
Mr. Campbell. I am sure we probabl}^ did, but I just don't remember
the conversations.
Mr. Weitz. Do you recall if he indicated that he had discussed the
l^ositions of others or that he had discussed his position with anyone
else?
Mr. Campbell. I don't remember.
Mr. Weitz. Did he indicate who had contacted him to set up the
meeting ?
Mr. Campbell. No, I don't recall that either.
Mr. Weitz. Would you tell us what transpired at the meeting?
Mr. Campbell. Well it was a general meeting about the pressure
from the Hill. It was a relatively short meeting, as I remember it, in
which we discussed the extreme pressures from the Hill and the fact
that the dairymen had reversed the previous Presidents, such as Presi-
dent Johnson, on imports. That it was probably a better situation for
us to raise it^ — to raise the support to 85 percent rather than 90 percent,
7764
rather than not take any action at all, because if we did not take action
there was a dangler of Congress raising the support level to 90 percent,
which would have been above the then market level, which was in the
$4.90 range. If we could raise it to 85 percent, it would have little im-
pact— the raising of the support level would have little impact on the
Treasury, whereas if we did nothing and Congress were to take action
and go to 90 percent, well then, that would have impact on the
Treasury.
This is what I remember, generally, about the meeting and the fact
that very strong Members of Congress were involved.
Mr. Weitz. How do you square that with the fact that only two of
some 100 or so legislators have supported bills for a minimum of 90
percent, and all of the rest were for 85 percent that had already been
introduced ?
Mr. Campbell. Just by my knowledge of how the Congress operates
and what they do and what they have done in previous times when the
dairymen usually got what they wanted from Congress.
Mr. Weitz. So you are saying the bills that provided for 85 percent
were not likely to pass, but only the two with the 90 percent ?
Mr. Campbell. Knowing how Congress operates, I personally
thought, when thy got into the committee and with Congressman Ed
Jones wanting 90 percent, the others wouldn't resist it. I mean, they
just don't resist the dairymen that greatly in Congress, according to
past performance.
Mr. Weitz. Isn't it easier not to resist when you introduce a bill than
when you vote a bill in the committee ? In other words, if Congress was,
in fact, supportive of a 90-percent level as a minimum, would they not
have indicated their support, at least by way of supporting a bill's
introduction, for 90 percent, rather than supporting a bill at 85 per-
cent and working for a higher level in the committee or on the floor ?
Mr. Campbell. I can't argue with that, because this is a matter of
judgment as to how things work on the Hill. I have been on the legis-
lative body and I have dealt with the legislative bodies for- the past
20 years, and in my judgment when the committee got down to its
deliberations within the committee, with the corn blight we had the
year before, with the escalated seed cost, I just think — to my knowl-
edge of how it operates. I would predict that they would probably
have gone to 90 percent. That doesn't mean they would. This is just a
judgment. I can't argue the point with you.
Mr. Weitz. ^Yho made that point, by the way? Did you make the
point in the meeting with the President?
Mr. Campbell. I don't recall who made what points. It Avas a gen-
eral discussion of all of the people present.
[Discussion off the record.]
Mr. Weitz. OK ; 5-minut6 recess.
[Recess.]
Mr. Weitz. Aside from the specific points made by each individual,
could you tell us who, of the people you mentioned at the meeting,
favored an increase, or what positions were taken generally by the
people present?
Mr. Campbell. We didn't really have any argument about it. We
just all came to the conclusion verbally, as I remember, that we were
in a bad position and that we could go to 85 percent and probably
7765
have no impact on the Treasury. It was better to do that than to fight
it out in Congress and probably lose.
Mr. Weitz. In that regard, by the way, you referred a number of
times to the market price. Aside from the price-support increase that
was then obtained in March of 1971, were you aware of allegations
that AMPI had purchased cheese in February to drive up the price
prior to their effort to
Mr. Campbell. Oh, I heard someone in the Department say that and
I don't know who said it, but I did hear that.
Mr. Weitz. If that were true, that would have some impact on the
viability of the market price aside from an increase ?
Mr. Campbell. If they were able to purchase enough. I do not know
whether they did purchase enougli to have that impact,
Mr. Weitz. Now, at the meeting in the afternoon with the Presi-
dent, do you recall any reference to the political power or lobbying
power of the dairy people?
Mr. Campbell. That is what we were talking about ; yes.
Mr. Weitz. And did Mr. Connally talk about that?
Mr. Campbell. I think everybody in the room did. And I am sure
he did too. I don't remember specifically what he said, but I think I
recall that being his position. That was everybody's position. None of
us denied they had that power. No one argued and said they don't
have it.
Mr. Weitz. The power included their lobbying effort on the Hill.
Did it also have some impact on the 1972 compaign ? In other words,
was that discussed ?
Mr. Campbell. I don't recall that that was discussed. I don't recall.
It may have been, but I don't recall that was discussed.
Mr. Weitz. That would be a natural corroUary, though ?
Mr. Campbell. It would be natural that it would be discussed, but I
don't recall it being discussed.
Mr. Weitz. Wliat about campaign contributions; were they dis-
cussed ?
Mr. Campbell. I don't recall any campaign contributions being dis-
cussed.
Mr. Weitz. In any context ?
Mr. Campbell. No, sir.
Mr. Weitz. And the fact that the white paper says that they were
discussed with regard to congressional candidates — you don't remember
that?
Mr. Campbell. No, I don't, but I am not saying they were not dis-
cussed, but I don't recall it.
Mr. Weitz. You don't recall Secretary Connally referring to their
contribution activity or their contribution potential?
Mr. Campbell. No, I don't recall that.
Mr. Weitz. Did anyone else refer to that ?
Mr. Campbell. No, I don't recall that.
Mr. Weitz. Were you aware of that ?
Mr. Campbell. Of what?
Mr. Weitz. Of their contribution activity ?
Mr. Campbell. To whom ?
Mr. Weitz. Their contribution activity in general, whether to the
President or elsewhere ?
7766
Mr. Campbell. Yes, sir, I was aware of that ; sure. I was aware of
it through the press primarily. I wasn't aware of it personally in that
I was not involved in any at that time, with regard to the Members on
the Hill anyway, but I was aware they were out and around. Every-
body knew they were out and
Mr. Weitz. You had discussed this more directly with David Parr,
hadn't you? You were aware, though, aside from the press?
Mr. Campbell. Well, they made a lot of wild statements which I
paid no attention to.
Mr. Weitz. What were they? Wliat were some of those?
Mr. Campbell. Oh, "These are the things Ave want," and "We want
to go all out for President Nixon. We were on Humphrey's side before
but we want to go all out for Nixon now." And they said : "We want
to contribute to his campaign," and I remember them saying some-
thing about $2 million. Well, that was so up in the blue that I couldn't
conceive of that.
Mr. Weitz. Do you recall when that was first mentioned? Do you
recall when this series of conversations took place ?
Mr. Campbell. Every time they came to town they would give us the
same arguments: "We want to be for President Nixon. We want
imports restricted. We want price supports." Ind so on. They would
tick off the things they wanted, but I didn't pay any attention to that
as evidenced by my position. I mean, they were beyond me. I mean, I
wouldn't even discuss it with them when they would talk about that.
I would just talk about something else. I never discussed this with
them. It was a matter of one-way talk on their part.
Mr. Weitz. Do you know, when they discussed their intention to
support the President and contribute large amounts of money — do you
know whether they discussed that with anyone in the White House ?
Mr. Campbell. No; I do not, and frankly I don't remember when
they said it. I mean, it was mentioned but I didn't take it seriously,
frankly.
Mr. Weitz. lYhy?
Mr. Campbell. Well, it wasn't my business.
Mr. Weitz. Well it may not have influenced your decision, but you
said you didn't take it seriously. I am asking you why you didn't take
it seriously.
Mr. Campbell. Well, that Avasn't in my arena. I Avasn't in that busi-
ness and I wasn't going to have anything to do Avith anything of that
nature.
Mr. Weitz. But there Avas nothing that led you to question their
seriousness though ?
Mr. Campbell. Well, they Avere doing a lot of loose talk and I dis-
counted it.
Mr. Weitz. Did you know if they made the same talk Avith Charles
Colson?
Mr. Campbell. No, sir, I don't know.
Mr. Weitz. And did Secretary Hardin ever discuss this Avith you or
was he ever present during any of these conversations ?
Mr. Campbell. I don't recall that he did, but I am sure, doubt-
lessly— well, I am sure that I mentioned to Secretary Hardin, and I
can't remember specifically when and on what occasions, but I am sure
I did, because I kept him as totally informed as I possibly could, so I
might have mentioned it to him.
7767
Mr. Weitz. These conversations were in 1970 and 1971, preceding
March of 1971?
Mr. Campbell. Yes ; and I am sure I did mention it, although I can't
remember doing it.
Mr. Weitz. Didn't you also discuss with David Parr some particular
contributions that you suggested his group make ?
Mr. Campbell. Not at that time.
Mr. Weitz. Not at what period ?
Mr. Campbell. During this period.
Mr. Sanders. Does this relate to the Presidential campaign
activities ?
Mr. Weitz. I think it is relevant to indicate whether or not he in fact
did, from time to time, discuss more than wild speculation or allega-
tions with respect to their contribution activities without getting into
specifics.
Mr. Sanders. Of course I can't prevent you from asking the ques-
tion, but I think you know very well that contribution does not relate
to the 1972 Presidential campaign, and I think that is clearly beyond
the mandate of this committee. Now you can go ahead and do what you
want to.
Mr. Weitz. Is it not true that you have discussed particular con-
tributions with representatives of the dairy co-ops ?
Mr. Campbell. I relayed one request in 1970 to them — one only. It
wasn't instigated by me. I received a call from someone in Georgia and
I relayed the request and I left it at that. That is the only time.
Mr. Weitz. Did that take place before or after Mr. Parr or others
had indicated their intention to support the President ?
Mr. Campbell. Oh, I can't give you the time sequence. I don't know.
But it didn't originate with me. I received a call from George request-
ing financial help in the campaign and I relayed the request and that
was all.
Mr. Weitz. Was your motivation to relay it? Did that have any-
thing to do with your understanding of their intention to contribute
to the President's campaign ?
Mr. Campbell. It had nothing to do with it because the President
wasn't even in the campaign and I wasn't aware of any contributions
to the President.
Mr. Weitz. But were you aware at that time of Mr. Parr's
Mr. Campbell. Let me just say here I do not remember the time
sequence at all.
Mr. Weitz. Did the President, at the afternoon meeting on the 23d,
refer to the contribution activity of the dairy people ?
Mr. Campbell. I do not recall if he did ; no.
Mr. Weitz. Did he in any way refer to the 1972 campaign ?
Mr. Campbell. I don't recall that he did.
Mr. Weitz. Did anyone else ?
Mr. Campbell. I just don't recall that. It would be natural, possibly,
that they did, but I do not recall it.
Mr. Weitz. Did he indicate
Mr. Campbell. I might say the conversations that I recall primarily
had to do with: "Can we hold our position? Is the Congress going
to overcome us?" and "What can we do to have the least impact on
the Federal Treasury ?"
7768
Mr. Weitz. What about the veto ? Was that discussed ?
Mr. Campbell. I don't recall that ; no.
Mr. Weitz. Well, that would be relevant, wouldn't it?
Mr. Campbell. As to whether he would or would not veto ?
Mr. Weitz. Right. In other words, to hold the administration's posi-
tion, it would make it more difficult to change it if he were to veto.
Mr. Campbell. I don't recall that being discussed. It could have been,
but I don't recall that.
Mr. Weitz. What about losing farm support in the 1972 campaign,
was that discussed ?
In other words, if he kept the position or exercised his veto — losing
farm support.
Mr. Campbell. I don't remember, but it could have been, I am
sure ; I just don't remember it.
Mr. Weitz. Well, the President could have vetoed the legislation.
Mr. Campbell. Oh, sure, he could have vetoed it.
Mr. Weitz. T\^iat would have been the impact of that on the 1972
campaign?
Mr. Campbell. I couldn't estimate.
Mr. Weitz. And that wasn't discussed ?
Mr. Campbell. Politics operates on a day-to-day basis, and I
coukbi't analyze the impact on a campaign that far ahead; no.
Mr. Weitz. Did anyone else in the meeting try to estimate the
impact of that on the 1972 campaign ?
Mr. Campbell. I just don't recall. I don't recall that type of con-
versation. It could have occurred, but I just don't recall it.
Mr. Weitz. How did the meeting — well, were there any other points
that were made, that you can recall, that you haven't mentioned ?
Mr. Campbell. No — well, I do recall something about someone
making a statement — I thought, perhaps. Secretary Hardin — that
we may have to sue AMPI.
Mr. Weitz. May have to sue ?
Mr. Campbell. Yes.
Mr. Weitz. For what ?
Mr. Campbell. For antitrust action in the way they were operat-
ing— running over some little dairy outfits down in the Southwest.
Mr. Weitz. Had anyone brought that up before in the meeting?
Mr. Campbell. No; I just remember that statement being made.
And subsequently they were sued and that case is, I guess, currently
being tried.
Mr. Weitz. Do you recall w^hat the relevancy of his comment was,
or what topic he raised it in ?
Mr, Campbell. No. I think it was imparting information and, as
I recall, I think he made the remark to someone before we sat down —
when we first came in the meeting, as I recall it.
Mr. Weitz. Whom did he say that to ?
Mr. Campbell. I don't remember.
Mr. Weitz. Was it Secretary Connally ?
Mr. Campbell. I don't remember.
Mr. Weitz. John Ehrlichman ?
Mr. Campbell. I don't know, but I do remember him making that
statement. There was an imparting of that information.
7769
Mr. Weitz. Wasn't that in relation to what the administration's
posture would be, vis-a-vis AMPI, over the next 2 years?
Mr, Campbell. I don't know why it Avas. It Avas just imparting in-
formation.
Mr. Weitz. Had he ever talked about it with you ?
Mr. Campbell. I was aware this was being discussed because As-
sistant Secretary Dick Lyng, under whose jurisdiction this operates,
mentioned it and
Mr. Weffz. Were you aware of an investigation being planned or
that had begun — an antitrust investigation of the co-op ?
Mr, Campbell. Oh, there were complaints from the local people that
they were being harassed and adversely affected by AMPI in the
Southwest area. I was not personally involved and complaints did
not come to me, but they were to Assistant Secretary Dick Lyng.
You see, that was his area of administration and I was aware of that
through him. I don't recall them coming to me personally, although
they could have.
Mr. Weitz. Did the President announce the decision or indicate
his position?
Mr. Campbell. No ; as I recall at the meeting we just all agreed this
Avas what Ave should do and after the meeting broke up it Avas incum-
bent up on us in Agriculture to go back and institute it.
Mr. Weitz. Well, Avould that include the President ?
Mr. Campbell. Yes; I don't remember a dissent in the room as to
the consensus AA'hich aa'c finally arriA^ed at.
Mr. Weitz. And the President was included in that consensus?
Mr, Campbell. Yes.
Mr. Weitz. Did he, in fact, announce or state what he thought the
consensus Avas ?
Mr. Campbell. I can't remember hoAv it Avent; I just remember that
this Avas Avhat everybody concluded and this is Avhat the decision Avas.
I can't remember any direct order being given. No, I can't remember
that.
Mr. Weitz. And your understanding at the end of the meeting
Avas that the President had agreed to have a price-support increase?
Mr. Campbell. Yes.
Mr. Weitz. To 85 percent ?
Mr. Campbell. Yes.
Mr. Weitz. By the way, was it in terms of percentages — of 85, 80,
90 percent ?
Mr. Campbell. Yes, sir ; 85 or 90, and we did not Avant to go to 90
percent because of the impact on the Treasury and also the danger
of further increasing surpluses.
Mr. Weitz. If Ed Jones Avanted 90 percent, why did you think 85
percent would do ?
Mr. Ca^^ipbell. Well, Ave didn't Avant 85. We thought 75 percent
Avould do
Mr. Weitz. No — politically Avould do. I knoAv you thought eco-
nomically 75 Avould do, but why did you go to 85 ?
Mr. Campbell. I thought 90 percent Avould stimulate overproduc-
tion. The Avorst thing that could happen to the dairymen was to get
into a surplus position, as they had previously which, by the re-cords,
indicates it takes 4 or 5 years to get out of. They are then harmed in
7770
the price of their product and the support level. And my feeling was
for the dairymen and I did not want overproduction.
Mr. Weitz. Well, when you say it was then incimibent upon USDA
people at the end of the meeting to implement the decision, exactly
what was decided about getting out the decision ? Was there any dis-
cussion of who would draft it or who would review it or what the
process would be ?
Mr. Campbell. No, it was just for us to go back to the Department
and put it in the proper channels to do it. We have the personnel over
there who regularly attend to this type of thing.
Mr. Weitz. Who would that be ?
Mr. Campbell. Whoever does that in the Commodity Credit Cor-
poration— ASCS — ^that area of the Department. I don't know specif-
ically who would have done it.
^Mr. Weitz. That would have been under ]\Ir. Frick's jurisdiction?
Mr. Campbell. Yes. sir, that is correct.
Mr. Weitz. And under him was Sidney Cohen for one ?
Mr. Campbell. The dairy division is under him. I don't know who
actually does it.
Mr. Weitz. But they would have been the ones to have been in-
volved ?
Mr. Campbell. Yes.
Mr. Weitz. Was there any reference at the close of the meeting about
Charles Colson ?
Mr. Campbell. I don't recall. There could have been, but I don't
recall.
Mr. Weitz. How about contacting the dairy people ?
Mr. Campbell. I requested the privilege of making a telephone call,
because I said I want to try to get these boys off of our back and get
them to leave us alone. And I requested the privilege personally of
making a call to Harold Nelson to ask him "Now, will you get off
our backs and leave us alone ?" I didn't tell him we were going to raise
the price, if we do consider the price, and I don't recall telling him, and
I do not think I did tell him that
Mr. Weitz. Wait, I don't understand; in other words, you had just
arrived at a consensus that increases to 85 percent would be granted in
the hopes that that would prevent any further increase ?
Mr. Campbell. Yes.
Mr. Weitz. And that was decided, and it was decided USDA would
work that up in the normal processes in ASCS and get it out. Now,
what was the purpose of your call again ?
Mr. Campbell. To ask him to leave us alone and quit pressuring us
for all of these things because it was to the harm of the dairymen, that
was my judgment. Of course, he was on the other side of the fence. I
said, "Now, please leave us alone. If we do decide to go, will you leave
us alone ? Will you stop all of this pressure ?"
Mr. Weitz. Was the announcement contingent upon his agreeing?
Mr. Campbell. No, it was not ; no. I just wanted the privilege of
trying to stop him and trying to use my influence to stop him. No, it
was not contingent in any respect. Tlie decision had already been
made. Wliat I wanted to do was to stop this because I thought it was
harmful to the dairymen.
Mr. Weitz. Wiy didn't you wait until the decision was announced
to do this ? "^ «
7771
Mr. Campbell. Well, I just wanted to get hold of him and pressure
him as much as I could to get him to stop this type of thing, this
pressure on us to do what I thought was harmful to the dairymen.
Mr. Weitz. No one asked or no one raised the possibility of your
doing this before you requested it ?
]Mr. Campbell. jSTo, sir. I personally requested that privilege to be
able to call liim to try to get them off of our backs and also to stop
them from doing things that I thought were harmful to the dairymen.
Ml-. Weitz. That is to seek an increase ?
Mr. Campbell. Yes.
Mr. Weitz. Anything else ?
Mv. Campbell. No, that was primarily it.
Mr. Weitz. Was there anything else? You say primarily.
Mr. Campbell. Because I agreed w^ith trying to slow down the im-
ports, which I have already testified to, because the imports were sub-
stantially subsidized by the European governments, and our dairy
farmers have a hard time competing. They can't compete with sub-
sidized imports on a grand scale. But I was thinking primarily of
"Leave us alone on this price situation," because it was harmful to the
dairymen.
Mv. Weitz. You say primarily, but was there anything else you
thought was harmful to dairy farmers or to dairy farmers' interests ?
Mr. Campbell. Well, at that time, that is all I had in mind.
INIr. Weitz. And before you volunteered or after you volunteered or
requested the permission to call Nelson, did anyone raise the possi-
bility or discuss how or whether the dairy people would be contacted
prior to the announcement of the decision ?
Mr. Campbell. I don't recall that specifically. It seems to me that
tliat probably was, but I just don't recall it specifically.
Mr. Saxders. I am sorry. Could you restate that question or else
have her read it back ?
Mr. Weitz. Let me restate the question. You said that you requested
permission to contact Nelson to give him the message or ask him the
question you stated.
Mr. Campbell. I Avasn't going to give him the message because I
did not tell him we were going to raise the price.
Mr. Weitz. But ask him the question ?
Mr. Campbell. In other words : "If we do raise the price, if we do
change our minds, and if we do raise the price, would you and the
dairymen stop pressing for this type of thing because in my opinion
you are hurting the dairymen."
Mr. Weitz. OK. Now, at the meeting, either before or after you
asked that permission, my question was : Did anyone discuss whether
or how the dairy people would be contacted before the announcement
was publicly announced ? That was my question.
Mr. Campbell. Yes, it seems to me vaguely as though somebody
said : "Well, they ought to be alerted" or something. I can't remember
specifically. It just seems to me though, vaguely, that was discussed,
and it was at that time that I asked permission to do what I wanted to
do, which I thought was good for the dairymen.
Mr. Weitz. So that did precede your request?
Mr. Campbell. I don't know.
Mr. Weitz. I thought you just said it was at that time.
7772
Mr. Campbell. Yes, I think that is what happened. I am just a lit-
tle bit vague. But I do think that is Avhat happened. I don't recall spe-
cifically how it went, thouo;h.
Mr. Weitz. Did either the President or Ehrlichman refer to Charles
Colson ?
Mr. Campbell. Well, I don't remember Ehrlichman being there, as
I said. And you know I told you who I did remember being there, and
I don't know Avho made that or I don't know how the conversation
went.
Mr. Weitz. Do you recall anyone at the meeting referring to Colson
though ?
Mr. Campbell. No, I don't specifically remember. No, I don't.
Mr. Weitz. Do you remember anyone referring to Chotiner?
Mr. Campbell. No, I don't remember that.
Mr. Weitz. Did Connally make any reference to getting in touch
with the dairymen ?
Mr. Campbell. I don't remember he did, no. I don't remember.
Mr. Weitz. So you don't know who did, in other words?
Mr. Campbell. No, I don't. Somebody did say they ought to be
alerted but I don't remember.
Mr. Weitz. Did the President say it ?
Mr. Campbell. I don't think so. I don't remember. I said I just don't
remember really.
Mr. Weitz. Now was the suggestion that the dairy people — or the
comment rather — that the dairy people be alerted, was that intended to
be the same thing as your contact with them or was that something
different?
Mr. Campbell. I don't know. I think— I just have no idea. I think
they were just going to, as I remember it, and as I said — and this is
very vague to me, but it seems as though somebody said, "Well, we
need to tell the dairymen we ai-e going to raise the support." I_ mean
somebody had to let them know.
Mr. Weitz. Before the public announcement?
Mr. Campbell. Well, I don't know when.
Mr. Weitz. Well, after the public announcement they would ob-
viously know.
Mr. Campbell. That is correct, so I would assume it would have been
before.
Mr. Weitz. Is there anything else that you can recall about that
afternoon meeting?
Mr. Campbell. No, I don't recall anything else. As I said, as I re-
member it, it was relatively brief. Maybe 20 minutes. I am not sure how
long. We weren't there too long though.
Mr. Weitz. Was there any miderstanding when the decision would
be announced ?
Mr. Campbell. No, they left it up to us, as I remember, to go on back
and implement it.
Mr. Weitz. How long did you think it would take?
Mr. Campbell. Oh, I didn't even think. I mean we turned this over
to the people and they handled it. It is just put into the machinery
and it is handled in that manner. I didn't make any detemiinations,
that I can recall, as to how long it would take. I didn't even think in
those terms.
7773
Mr. Weitz. On the way back to your office did you discuss either
the meeting or the implementation with Secretary Hardin?
Mr. Campbell. I don't remember discussmg it, but I think that he
was to be at Camp David and he left it in my hands to go ahead and
put the machinery in gear to implement the decision.
Mr. Weitz. Secretary Hardin Avas to be at Camp David ?
Mr. Campbell. I think that is right. He left town I know.
Mr. Weitz. With the President ?
Mr. Campbell. Oh no, no. Well, I don't know who was at Camp
David. I think he was up there by himself. I am not sure though but
Avith his family, taking a rest. I have no idea w^ho was there.
Mr. Weitz. Ho left right after the meeting or shortly after the meet-
ing
Mr. Campbell. Yes. I didn't see him again, as I remember. After
we got back to the building, as I recall it and I got with Assistant
Secretary Lyng and we weiit ahead and went through the procedures
and got the press release out.
Mr. Weitz. "When did you call up Nelson ?
Mr. Campbell. I called him as soon as I got back to the office that
day.
Mr. Weitz. And did you reach him directly ?
Mr. Campbell. Oh, yes.
Mr. Weitz, Directly ?
Mr. Campbell. Yes.
Mr. Weitz. Where was he ?
Mr. Campbell. He was in San Antonio. I called him long distance.
Mr. Weitz. He had met with the President that morning, there-
fore, he had flown back to San Antonio?
Mr. Campbell. I assume that is right, yes. I put in a call and got
him and I assume he was in San Antonio. I don't know where he was.
I would think he was there. It is my opinion.
Mr. Weitz. Well, what we have as Nelson exhibit No. 6* is a
record of phone records, messages for INIr. Nelson in the home office in
San Antonio. And at 4 :50 central standard time which would be 5 :50
eastern standard time which would be the time in Washington on
March 23, 1971, there is a record of a phone call from Mr. Phil Camp-
bell to Mr. Nelson with the message to return the call to your home.
Is your number area code 703-360-5789 ?
Mr. Campbell. Yes.
Mr. Weitz. That would indicate then, that at 5:30 in the after-
noon, which would have been shortly after the 4:45 meeting, you
placed a call that did not reach IVIr. Nelson.
Mr. Campbell. Maybe I didn't. All I know is I placed the call and
talked to him. I can't give you the details. I mean you have the rec-
ords and I will have to accept when it was on there.
Mr. Weitz. Do you recall him returning the call at your home that
evening ?
Mr. Campbell. I recall I talked to him. I don't recall under what
circumstances.
Mr. Weitz. Did you talk to him after dinner?
Mr. Campbell. I thought I talked to him at the office. My memory
may be wrong on that.
•See Be -k 15, p. 6710.
7774
Mr. Weitz, You see the records show he was still in Washington
that day.
Mr. Campbell. I see. I don't know where I talked to him but I
placed the call and talked to him but I can't tell you exactly when.
Mr. Weitz. Did you have your secretary place the call?
Mr. Campbell. I don't remember how it was done.
Mr. Weitz. But it is likely that the only number you would have had
in your records would have been his office in San Antonio ?
Mr. Campbell. That is correct. Yes. Possibly his home. I don't know.
Mr. Weitz. But not his hotel room in Washington?
Mr. Campbell. No. I recall I had the call placed, I did talk to him,
but I don't know how or when the call was completed.
Mr. Weitz. Could you tell us what you told him on the telephone ?
Mr. Campbell. Yes. I asked him to — well I said, "Now Harold, if
we do change our mind and do raise the price, will you and the other
dairymen stop asking us for price increases"— well, not price increases
but price-support increases — "because I don't think it is good for the
dairymen. Will you get off our backs?" And he agreed and said he
would.
Mr. Weitz. You recall using that language, "Get off our backs?"
Mr. Campbell. Yes, I asked him to get off our backs and he agreed
that if we did raise the price support that he would.
Mr. Weitz. Did you indicate that you had met with the President?
Mr. Campbell. No.
Mr. Weitz. The "we" was just a collective we referring to the ad-
ministration ?
Mr. Campbell. That is correct. To the Department. To the Secre-
tary. The Secretary makes the decision. We don't.
Mr. Weitz. But the President made this decision ?
Mr. Campbell. Well, we made it collectively in his office. We agreed
to the position we were in politically up on the Hill, because of — you
used the term "politics" and I guess that is a bad term. I look upon
Congress as the highest policy setter we have and they were setting
their policy — setting different from ours — if that is politics, yes,
that is it.
Mr. Weitz. When you said, "Get off our backs," were you referring
to 1971 or for future years?
Mr. Campbell. I was referring to then and anytime in the future.
Short term future. I couldn't say what period of time, you know. T just
said I wanted them to quit pressing when the market price was rising
and taking care of the dairymen, I couldn't say any specific time
limit. I just wanted them to leave us alone. And the dairymen were
doing real well in the market with the price having escalated. I didn't
have in mind 1972 if that is what you are referring to.
Mr. Weitz. And what was his response?
Mr. Campbell. He said that — Avell, he agreed and said: "We will
leave you alone."
Mr. Weitz. If it is increased ?
Mr. Campbell. Yes. That is correct.
Mr. Weitz. To what level ? Did you discuss a level ?
Mr. Campbell. I don't remmeber whether I did or not frankly. I
don't remember what — I probably said: "If we increase it to 85."
That is probabl}^ what I said, I don't remember but I would assume
7775
that is what I said. That would have been the natural thing for me
to have said but I don't recall specifically.
The main thing I remember is asking him, "Will you get off our
backs if we do make an increase in the support level?''
Mr. Weitz. Kow, as of that morning there had been no indication,
at least that you were aware of, that there was going to be a recon-
sideration at least, by the administration, for an increase and actually
granting it ?
Mr. Campbell. ^NTo; but I was aware of the pressure from the Hill
and I did Avonder whether or not we were going to be able to hold out.
That was the question in my mind as to whether we would be able to.
Mr. Weitz. The natural understanding of your conversation with
Nelson would have been that at least an active reconsideration of the
problem was underway
Mr. Campbell. Yes.
Mr. Weitz [continuing]. If not a decision to actually increase
having been made ?
Mr. Campbell. Well, I didn't imply that. I did not tell him that it
had been made.
Mr. Weitz. Did you discuss anything else in the conversation ?
Mr. Campbell. Xo; that was a very short conversation.
Mr. Weitz. Did you ask him not to boycott the Republican fund-
raising dinner the next night ?
Mr. Campbell. No, sir, I don't recall even talking to him about that.
I don't recall any conversations Avith him in regard to that f undraising.
Mr. Weitz. Did you attend that dinner ?
Mr. Campbell. No, sir.
Mr. Weitz. Were you aware on the 23d the dinnei' was going to be
held the next evening ?
Mr. Campbell. I was aware because I got a letter soliciting me to
buy a $1,000 ticket, which I was not financially able to do. I get these
letters each year and I have never bought a ticket because I am not
financially able to.
Mr. Weitz. Were you aAvare that the dairy co-ops were planning to
attend the dinner — representatives of the co-op were planning to attend
the dinner?
Mr. Campbell. I don't know when I knew. I heard afterwards that
they were there and I don't know how many tickets they bought or
anything about it, but I had nothing to do with them purchasing the
tickets.
Mr. Weitz. Were you aware that after the March 12 decision they
had started to change their minds about attending the dinner and in
fact some of them wanted to boycott the dinner?
Mr. Campbell. I don't recall that ; no. I do not recall that because
I was not involved in initiating or instigating the purchase of any
tickets to that dinner.
Mr. Weitz. Well, whether or not you Avere involved in initiating or
instigating the purchase of the tickets, Avere you aAvare or Avere there
people telling you or inferring the fact that there Avas a change of
sentiment on the part of the daii-y people ?
Mr. Campbell. I don't recall it. I don't recall when I kneAv they
were even thinking of buying tickets. I do remember hearing, as I
remember, that they had tAvo or three tables. I don't knoAV how many
7776
people that would be but I assume that is 10 people to a table. I don't
recall the time sequence of when I heard this because, frankly, I was
not involved in the dinner, I was not involved in trying to sell
tickets and did not attend the dinner and as a result it wasn't of
prime importance to me in my mind and I don't remember when I
heard anything of that type but I do remember hearing afterward
that they did have tAvo or three tables.
Mr. Weitz. Before the dinner you didn't discuss with any one the
likelihood of the dairy people either attending or not attending the
dinner ?
Mr. Campbell. I don't remember any such discussions, although
I may have heard that just like I heard this other thing of donating
$2 million to the President's campaign. I could have heard that but
I don't recall it.
Mr. Weitz. Did you know of any plans by the dairy people to
contribute as much as $60,000, $80,000, or $100,000 to the dinner or
to the dinner committees ?
Mr. Campbell. I had no personal knowledge of this. I don't recall
anyone telling me and saying, "We are going to do these things,"
although I did hear afterward that they had. I could have very
easily been told by somebody, "Well, they are going to buy tickets
to the dinner," but that wasn't important to me. I wasn't involved.
And I don't recall it. It could have been told to me but I just don't
recall it.
Mr. Weitz. Is there any way that you can pinpoint the time when
you talked to Nelson on the 23d other than the fact it apparently
was after 5 :50 p.m. ?
Mr. Campbell. No; there is not. I remember placing the call and
then, until you corrected me, I thought I got the call through but I
evidently did not and I just don't know when I talked to him but I
thought it was that same day. It might not have been, it could have
been the next day but I did talk to him. And I thought it was the
same day but it may not have been.
Mr. Weitz. Assuming it was the same day though, you don't recall
talking to him at home versus at your office ?
Mr. Campbell. No.
Mr. Weitz. When you talked to Nelson, did you get the impression
from anything he said or from his reaction, that he had talked to
anyone who had given him some type of similar message from the
administration or who had discussed the price-support matter with
him?
Mr. Campbell. I don't recall him mentioning that, no. No, I do not.
Mr. Weitz. Did you report the outcome of the conversation to
anyone ?
Mr. Campbell. I am sure that I probably told Secretary Hardin,
the first chance I got, that I did call Harold Nelson and he did promise
to get off our backs. I would think I told Secretary Hardin that be-
cause I try to keep him completely inform^ed of every'thing that I did
and I would assume that I told him this. I don't remember sj^ecifically
doing it but I would think that I did because that is the way I operate.
Mr. Weitz. Did you tell Assistant Secretary Lyng?
Mr. Campbell. I probably did, but I don't recall it.
Mr. Weitz. Anyone else that you can recall ?
7777
Mr. Campbell. No, I don't know that I did tell Assistant Secretary
Lyng very frankly. I don't know that I would have any particular
compulsion to but he and I were very close and I probably did tell
him but I don't remember.
Mr. Weitz. Did anyone discuss with you in March of 1971, the fact
that the dairy co-ops hadn't given to the Republican Party or the
Presidential campaign ?
Mr. Campbell. I don't recall any such conversations.
Mr. Weitz. Do you recall any conversations that referred to the
fact that these particular dairy co-ops were the most politically ag-
gressive organizations in agriculture ?
Mr. Campbell. Well, I think I could have said that because at that
time they were politically aggressive. I didn't say they were politically
successful but they were politically aggressive. I mean, that was my
general opinion.
Mr. Weitz. Did you tell that to Nelson ?
Mr. Campbell. I don't know whether I did or not.
Mr. Weitz. There probably would have been no need because he,
himself, was aware of it ?
Mr. Campbell. I don't recall. That was just general talk in the
Department you know. It was evident by all of the activity — the
contributing to both parties on the Hill and everyone else.
Mr. Weitz. Were either of those two phrases, "politically aggres-
sive organization" or "didn't give," were either of those or the sub-
stance of those discussed at the afternoon meeting with the President ?
Mr. Campbell. I don't recall it being discussed.
Mr. Weitz. What about after or before the meeting?
Mr. Campbell. No, I am sure we probably imparted information
that these boys were very politically active, that they were up on
the Hill working, and all. I am sure we discussed that with OIVIB in
trying to analyze our position and deciding what to do. I can't remem-
ber specifically talking about it, but I am sure it would have been
natural for me to do so. But I still thought they were harming the
dairymen.
My position was still that we shouldn't raise the price support.
Mr. Weitz. What action did you take to have the decision announced,
the price-support increase announced?
Mr. Campbell. I don't remember who I contacted when I got back
to the Department, to put it in gear, but then we did have to have a
draft of a press release and I think that I either participated or helped
draft the press release but I don't remember who handled the mech-
anism to put it into gear.
Mr. Weitz. Was there any instructions that you were aware of to
keep the press release and the subsequent docket as short as possible
or as brief as possible ?
Mr. Campbell. I don't recall that. It could have occurred but I just
don't recall it.
Mr. Weitz. Was the docket prepared and did the CCC review the
docket before the announcement ?
Mr. Campbell. I don't recall that. That can be ascertained from the
records though.
Mr. Weitz. Is that the noi-mal procedure?
7778
Mr. Campbell. Oh, we do do that at times when we don't have time
for the CCC meeting. This isn't the first or only time. If we did make
the announcement before the CCC meeting, and I don't know whether
we did or not, I would assume we made the announcement before we
did have another meeting and then confirmed it with a CCC meeting
but this does occur from time to time with different items before the
Commodity Credit Corporation and decisions are made and then they
are coAfirmed by docket with the Commodity Credit Corporation
because the Secretary has the authority to do this.
Mr. Weitz. If we could try to follow the process until the decision
was announced, the record shows it was announced on the 25th and
the meeting ended late on the afternoon of the 23d. Could you tell us,
to the best of your recollection, exactly what steps you took when the
press releases were drafted ?
Mr. Campbell. I don't recall any of the steps except being involved
in the drafting of the press release.
Mr, Weitz. Wliy wasn't the press release the next day?
Mr. Campbell. I can't tell you that. It isn't always done that way.
In fact when the machinery goes in gear with Commodity Credit, after
we have had a meeting there, they have to go back down and get all
of the dockets in order and prepare the press releases and sometimes
have them prepared ahead of time and sometimes they don't. And you
have these timelags. I don't remember any specific reason for it not
being released the next day.
Mr. Weitz. There was no discussion that you were aware of, of a
certain day or timing for the release of the announcement ?
jVIr. Campbell. I don't recall that but there could have been. I just
don't recall it though.
Mr. Weitz. 'V^Hio would have been involved in that if you weren't?
Mr. Campbell. Oh, the Secretary.
Mr. Weitz. He was in Camp David ?
Mr. Campbell. Yes, but we were in contact with him by telephone.
Assistant Secretary Lyng or I or people in the Department, but I
don't recall any discussions as to how they went or to the fact that there
was any reason to make it the next day or the following day.
Mr. Weitz. You are certain you talked to Lyng about this shortly
after the meeting and well in advance of the announcement on the
25th?
Mr. Campbell. Oh, I would assume that I did. Yes. he and I talked
and I know that I did because, very frankly, we decided because we
didn't like the parity concept so well, that we would add 1 penny on
the price above the 85 percent and make it $4.93 instead of $4.92.
Mr. Weitz. Why not 1 penny less ?
Mr. Campbell. Well, we could have done that but there wasn't any
reason one way or the other. It was just to put a pennv difference in.
Mr. Weitz. Wasn't Assistant Secretary Palmby the one responsible
for the commodity aspect of USDA ?
Mr. Campbell. Yes, he is.
Mr. Weitz. Why wasn't he consulted instead, or in addition to
Lyng?
Mr. Campbell. Consulted about what ?
Mr. Weitz. With respect to issuing the press release.
Mr. Campbell. Well, I don't know where Secretary Palmby was at
that time. I don't know whether he was in town or out of town, but
7779
Secretary Lyng has responsibilities with the dairy industry also
and
Mr. Weitz. But not in the commodity area.
Mr. Campbell. Not in the price support, but he has other responsi-
bilities. And as I indicated, he was concerned about the treatment of
some o:roups of dairymen in the southwestern pait over there but I
don't think there was anything peculiar about Secretary Lyng being
involved. He had gone to the meeting in Chicago when Secretary Har-
din spoke. I don't think that was unusual I mean. I don't know where
Secretary Palmby was. He could have been in town or he could have
been out of town.
Mr. Weitz. When did 0MB sign off on the press release ?
Mr. Campbell. I don't Imow, probably just before it was issued.
Mr. Weitz. On the 25th ?
Mr. Campbell. Probably but I don't know really.
Mr. Weitz. Were you involved in meeting with them or having
them sign off ?
Mr. Campbell. Probably by telephone. I am just guessing now. I
don't really recall. It would have had to be by telephone. I do not think
I had a meeting with them.
Mr. Weitz. Did anyone at the "^Vhite House sign off on the press
release ?
Mr. Campbell. Not that I know of. They could have but I certainly
don't think they did. And I don't know positively whether 0MB did,
but I assume they did.
Mr. Weitz. Do you know of any contacts either between yourself
or Secretary Hardin after the afternoon meeting and the press release ?
Mr. Campbell. I tliink we cleared the press release by telephone
with him.
Mr. Weitz. With Hardin ?
Mr. Campbell. Yes.
Mr. Weitz. But my question, did either you or Hardin have any con-
tact during that period with anyone in the White House?
Mr. Campbell. I don't recall one but I could have talked about the
press I'elease with someone. I don't know whether he did or not.
Mr. Weitz. Who might you have ?
Mr. Campbell. I don't know. I would assume John Whitaker, be-
cause he was our contact man, but I do not say I did, but I would as-
sume it would have been, if I did, with John Whitaker or Don Rice,
because they are the ones that normally would have handled it.
Mr. Weitz. Did you ever talk about dairy contributions with John
Whitaker?
Mr. Caimpbell. I could have but I don't remember. I could have told
him that these boys are tlirowing money all over the place. It would
have been a casual conversation. I wouldn't have made a point of it
because that was totally irrelevant to me as to the things I was hearing
because I was not involved directly or indirectly in these and
Mr. Weitz. Do you know Pat Hillings ?
Mr. Campbell. I don't recall him.
Mr. Weitz. So you wouldn't have been
Mr. Campbell. Who is he ?
Mr. Weitz. Patrick J. Hillings. He is a lawyer for the dairy people
and also a former Conorressman.
7780
Mr. Campbell. No, I don't recall him. I don't recall knowing him
at any time.
Mr. Weitz. Do you recall his attending the morning meeting on the
23d with the President?
Mr. Campbell. No, I don't remember that.
Mr. Weitz. You don't recall the President referring to Hillings'
propensity not to drink milk ?
Mr. Campbell. No, I don't remember that.
Mr. Weitz. Therefore, you would not have been the source for any
knowledge on the part of John Whitaker that Hillings and Chotiner
were involved in the dairy people's contribution activity ?
Mr. Campbell. No, I don't recall anything of that nature.
Mr. Weitz. Do you know what source Wliitaker had for that in-
formation ?
Mr. Campbell. No, sir.
Mr. Weitz. Now, based on your involvement in the deliberations
during March in the first and second decisions, was it your under-
standing that the second decision announced on March 25 was based
solely on the statutory criteria ?
Mr. Campbell. Well, the statutory criteria gave us the authority but
it was based also on what the Congress might do.
Mr. Weitz. Was it based on the political considerations that were
discussed at the meeting with the President on the afternoon of the
23d?
]\Ir. Campbell. In my mind it was based on the fact that Congress
might substitute their policy judgment for ours and that to me was
the basis of the change in the decision.
Mr. Weitz. Would that also include possible impact on the Presi-
dent's reelection campaign ?
Mr. Campbell. Well, it could have, but I am just giving you what
was in my mind.
Mr. Weitz. I am asking you what was discussed at the meeting
though.
Mr. Campbell. Well I already answered that, I think, previously.
You have asked me that previously, and I do not recall that being spe-
cifically, but it would have been natural for it to have been discussed,
but I don't recall the exact statements.
Mr. Weitz. Now we referred previously to your affidavit in the
Nader v. Butz litigation, a copy of which has been entered as exhibit
1. Secretary Hardin also executed an affidavit at about the same time
in March 1972 in connection with that same case. Could you tell us
how your affidavit, and if you know. Secretary Hardin's affidavit, was
prepared ?
Mr. Campbell. Well my affidavit was prepared by the lawyers in
the Department of Agriculture, the general Counsel's office.
Mr. Weitz. Did you consult with them ?
Mr. Campbell. Yes, I did.
Mr. Weitz. And do you know Avhether Secretary Hardin consulted
with them in regard to his affidavit ?
Mr. Campbell. I do not know.
Mr. Weitz. Did he discuss his affidavit with you ?
Mr. Campbell. I do not recall him specifically discussing his
affidavit. T do not remember.
7781
Mr. Weitz. Did you discuss your affidavit with him ?
Mr, Campbell. Oh, I don't recall it but I am sure that I was aware
that he was going- to have one prepared and also he was aware that
I was having to have one prepared. I am sure because we were very
close. And I just don't recall any discussion about it but I am posi-
tive he knew it and I know that I knew he was having one prepared.
But the lawyers prepared mine and I assume the lawyers also in the
Department prepared his.
Mr. Weitz. Aside from the particular affidavit in the Nader v. Butz
case that was filed which the record indicates was in January 1972, did
you have occasion to discuss the price-support increase with either
Secretary Hardin or anyone else at Agriculture ?
Mr. Campbell. Would you repeat that ? I am trying to get your time
sequence.
Mr. Weitz. After the suit was filed in January 1972, did you have
occasion to discuss the litigation and the underlying matter, the price-
support increase in 1971, with Secretary Hardin or anyone else at the
Department ?
Mr. Campbell, Well, I am sure we discussed it, but the decision Kad
already been made and it was already set.
Mr. Weitz. Yes, but the suit challenged the legality of the increase.
What I am asking you in that connection, did you discuss the delibera-
tions and the March 25 decision after the suit was filed?
jNIr. Campbell. You mean discuss the deliberations that we had
previously ?
Mr. Weitz. That is right, the reasons for it, the legality of it, and
so forth ?
Mr. Campbell. Oh, I can't remember. I don't remember doing it. I
could have, but I don't remember.
Mr. Weitz. I would ask the same question with regard to anyone in
the White House. Did you discuss the past year's deliberations, the
reasons for the price-support increase, with anyone in the White
House?
Mr. Campbell. Well, I can't remember doing so, but it is certainly
possible that I did.
Mr. Weitz. Did you discuss it with David Wilson ?
Mr. Campbell, Who is David Wilson ?
Mr, Weitz. Do you know David Wilson ?
Mr. Campbell. I don't recall him.
]Mr. AVeitz. Did you discuss it with anyone on John Dean's staff?
Mr. Campbell. Not to my knowledge because I don't know John
Dean, either. No, I haven't discussed anything with anybody over there
that I can recollect and I do not know these gentlemen. May I make
one additional point for the record ?
Mr. Weitz. Certainly.
Mr. Campbell. You talk to people by telephone, you know. You
get a call and you don't know who the fellow is. He identifies himself.
And I don't recall having any conversations, but that isn't to say I
didn't have, but I can't recall them.
]Mr. Weitz. I understand. Now paragraph 11, which is the next to
last paragraph in Hardin's affidavit, reads as follows :
Neither the decision to reevaluate the $4.66 per hundredweight support-price
level nor the ultimate decision to establish the price-support level at $4.93 per
hundredweight was based on any consideration other than those outlined in
7782
this affidavit. Specifically at no time did any person or organization promise or
lead me to believe that funds of any kind or anything of value would be paid
to me or any other person, or organization in return for a reevaluation of or
increase in the price support level.
Now I would like you to look at the paragraph because I know it is
sometimes difficult to take it all in.
Mr. Campbell. No, I heard every word you said.
Mr. Weitz. My question is this. In your affidavit, there is no dis-
claimer or nothing that approaches that particular paragraph. There
is no reference, in fact, to contributions either by w^ay of disclaimer or
otherwise. My question is this : Do you have any knowledge that would
either contravene that paragraph or any other knowledge that bears
on the relationship between contributions and the price-support
increase in March 19T1?
Mr. Campbell. No, sir, I do not have. I could say that I insisted to
the lawyers that they put in my affidavit the activities on the Hill
because they were compelling and you have noticed in my affidavit
that these are alluded to.
Mr. Weitz. Oh, yes, there are other matters but no reference to
contributions. That is Avhy I wanted to ask you about it. That is all.
[Discussion off the record.]
Mr. Sanders. I would like to have a break before I proceed.
[Recess.]
Mr. Sanders. Mr. Campbell, there are allegations being made, al-
legations have been made of a very serious nature, that the decision
by the Nixon administration, in fact by the President to increase the
price support for milk on March 25, 1971, over and above what had
been decided on March 12 was influenced by or based on contributions
which had been made to his reelection or commitments which were
being made for contributions to his reelection.
Now, it appears from the Wliite House white paper and from your
testimony today, that w^hatever decision was reached by the adminis-
tration on March 23 was arrived at in a meeting that afternoon, in a
meeting Avitli the President, at which you were in attendance. So what
happened during that period of time, I think, would be very, very
important to the allegations which are being made. You have told us
that you are not aware of any direction by the President to Secretary
Hardin or to you to order a.i increase in the price level but rather
that some consensus was reached by those who were in attendance.
The white paper does say on page 6 at the top : "After the Presi-
dent announced his decision, there was discussion of the great power
of the House Democratic leadership." This is in the context of what
occurred at the March 28 afternoon meeting. And you have been asked
here today whether you have any recollection of the President actually
stating at the meeting, in your presence, a decision by him that the
price support should be increased.
Mr. Campbell. Well, I guess in my testimony I would have to say
that we didn't walk in the room and receive an order to increase the
support level and then walk out of the room.
When I say there was a consensus we went in and analyzed the situ-
ation in Congress and made a judgment collectively and all seemed
to agre^ in the room. I do not remember any dissent. And the President
could have easily said, "Well, that is what we will do, let's do it." Of
7783
course he is the final authority. But what I was trying to relay was,
that we didn't walk in and sit clown and then have him give us an order
to do it. We discussed it and then when it came that evei-ybody was in
general agreement that this was our position, well, then, the President
probably said, "Well, let's do it." I don't remember what he said. But
what I am trying to say is we just didn't go down and get an order
and then leave the meeting. We made an analysis of the situation in
Congress and got, to me, what was a consensus. I can't remember
the convei'sation. I can't remember what the President specifically
said.
Mr. Sanders. Well it appeared to you that at the beginning of the
meeting there was not yet any decision on the part of the Department
of Agriculture or on the parit of the President that the price support
would be increased ?
Mr. Campbell. That certainly was the case with Secretary Hardin
and me. So far as I know, I mean, that was Secretary Hardin's posi-
tion and what the position of the other people in the room was before
we got there, I don't know, because I had no conversations with them.
Mr. Sanders. From the tenor of the President's remarks as the
meeting progressed, did it appear to you that he decided what he
would do before the meeting with you ?
Mr. Campbell. I could not make that analysis or judgment. I just
couldn't. That thought never struck me and I didn't ever analyze it.
I didn't get any such impression.
Mr. Sanders. Now if the President's decision evolved from the dis-
cussion w^hich occurred at that meeting and if there was no mention
during the meeting of contributions which had been made or commit-
ments which had been made to his reelection, then the allegations that
he based his decision on such contributions and commitments would
have to fail. And what I would like you to tell us now is your best
recollection of what was said at the meeting, if anything, concerning
contributions or commitments.
Mr. Campbell. I do not recall any discussion of that type of specific
contributions to anyone.
Mr. Sanders. Furthermore at the close of the meeting it was incum-
bent upon you and Secretary Hardin to return to the Department of
Agriculture and to implement the decision.
Mr. Campbell. Yes.
Mr. Sanders. And you did so ?
Mr. Campbell. Yes.
Mr. Sanders. Did anyone at the meeting or after the meeting, before
you returned to the Department, tell you that the decision had been
based on any commitments or contributions to the President's re-
election ?
Mr. Campbell. No sir.
Mr. Sanders. Were you told to have any discussion with any of-
ficials of AMPI or any other co-ops concerning contributions or com-
mitments to the reelection ?
Mr. Campbell. No sir.
Mr. Sanders. Do you have any knowledge that any Wliite House
officials were to have any discussion with AMPI or other dairy co-ops
concerning contributions or commitments ?
Mr. Campbell. No sir.
7784
Mr. Sanders. During your conversation with Harold Nelson, soon
after the meeting, did he mention contributions or commitments to
you?
Mr. Campbell. I do not recall Harold Nelson making any such
statement, sir. If he did they were not important to me and I do not
recall him making any such statement.
Mr. Sanders. In any event the final decision which was rendered by
the Department of Agriculture to increase the price support to $4.93
cents, which was given final approval by you and Secretary Hardin,
had no basis whatever in any contributions already made by the dairy
producers or contributions to be made by the dairy producers.
Mr. Campbell. No.
Mr. Sanders. The white paper mentions a discussion in the meeting
of the great power of the House Democratic leadership. Do you have
any present recollection of what was said in that regard?
Mr. Campbell. No; I don't have any recollection, but this was the
topic of discussion, that Congress was responding to the efforts of the
dairymen in their contact with the individual members on the Hill.
And I do not remember specific names being brought out, but, of
course, some of the most powerful Members of Congress on the Hill
were supporting the dairymen's position.
Mr. Sanders. The white paper adds to that :
The discussion included an appraisal of the support which the legislation had
on Capitol Hill and the fact that the legislation had the support of two of the
most powerful legislators in the country, Speaker Albert and Chairman Mills.
Do you recall any further details in that connection ?
Mr. Campbell. No ; I do not recall any details but I did personally
know that the dairymen had the support of these two Members.
Mr. Sanders. The white pa]3er continues by saying:
The discussion covered how the power of the Democratic leadership might be
enlisted in support of certain of the President's key domestic legislation if the
administration acknowledged the key role these leaders played in securing a
reversal of the March 12 decision.
Do you have any present recollection of anv details in connection
Aviththat?
Mr. Campbell. No; I do not remember that. I do not remember
that discussion.
Mr. Sanders. And finally the white paper says that : "The meeting
concluded with a discussion of the manner in which the decision would
be announced and implemented." Can you elaborate on that?
Mr. Campbell. Oh, that area is a little vague. And I cannot remem-
ber it specifically. But as I have already testified, it seems as though
someone said they had to alert the dairymen and at that time I asked
as we were breaking up, or sometime, maybe not at the specific
time, I asked permission to call the dairymen in order to request that
they stop the pressure for price-support increases.
Mr. Sanders. You have told us that the decision which was rendered
on March 12 was a close call. I don't recall whether those were the
exact words but that was the import ?
Mr. Campbell. Yes; that is the meaning of what I said.
Mr. Sanders. Would it be fair to say that it is one on which reason-
able men could differ ?
Mr. Campbell. Oh, yes.
7785
Mr. Sanders. Would you explain — well, let me back up just a mo-
ment.
In March 1971, I can't pinpoint the time more precisely than that,
but market price for fluid milk, I believe, was $5.05 sometime in that
period. At any rate it was up around $5. If, on March 12, the support
price had then been fixed at $4.93, would this have affected the cost
to the Government at that level ?
Mr. Campbell. To the best of my recollection, at the time, the price
Avas approximately $4.90 rather than $5.05, but this w^ould be subject
to check on the records. The answer the question, as I believe it was,
whether it would have an impact on the Treasury of costing the Fed-
eral Government money ?
Mr. Sanders. Yes.
Mr. Campbell. Raising the price from $4.66 to $4.93 was a 27-cent
per hundredweight increase and with the market price where it was
in that same range, the impact on the Federal Government would be
infinitesimal. And in the news media there had been statements all of
the way from $300 million to $700 million worth of benefits to the dairy
farmer. Mathematically there is no Avay, taking the $4.66 support level
which was raised to $4.93, there is no way mathematically that this
could have assisted the dairymen. By multiplying the production by
this 27 percent increase
Mr. Sanders. 27 percent increase ?
Mr. Campbell [continuing]. 27-cent increase, by more than —
slightly in excess of $300 million, if the 27-cent increase were all taken
from tile Federal Treasury because there was a production level down
of approximately 116 billion pounds of milk— if you multiply the 27
cents by this figure you get slightly in excess of $300 million. However
the market price was already in this range of $4.90 cents. So to assume
any impact or drain from the Treasury from this action, would have to
assume that the market price woidd drop below that figure during the
marketing yeai-. And with the assumption that the price would drop
during the spring flush, which is in April and May, or that the price
would drop at seasonal times of lessening demand, such as in the sum-
mer or at Christmas when schools are out, it is my opinion that there
is no way, with this assumption, that the price would have dropped
some, that there is no way that the impact on the Treasury would have
been more than $50 million to $100 million.
Mr. Sanders. Are you aware of whether any calculation has been
made of the difference which would have resulted in the cost to the
Federal Government between the support level, which was fixed on
March 25, and the cost to the Government if the March 12 decision had
been maintained for that marketing year?
Mr. Campbell. If I understand the question, you are asking: Had
we not raised the price?
Mr. Sanders. No. I am asking if the hindsight there has been a
calculation of the difference which would have resulted in the cost to
the Government between the $4.66 and the $4.93 ?
Mr. Campbell. Well, you have to assume to what level the market
price would drop. If the market price had been at $4.66, it would have
lieen $300 million, but the market price was. not at $4.66. It was at the
$4.90 range. So that had the market price for the ensuing 12 months
stayed at the $4.90 range the impact on the Federal Treasury would
30-337 O - 74 -pt. 17 - 17
7786
have been practically zero. But you could assume though, that the price,
had we not raised the support to $4.93, could have dropped during the
spring flush. My estimation of the impact on the Treasury under that
circumstance would be $50 million to $100 million.
Mr. Sanders. Do you have knowledge of whether the Department
of Agriculture made an economic analysis of the difference in impact ?
Mr. Campbell. I think that the economic research service perhaps
has but I have not seen it in writing. I have not seen such a study but
I think possibly a study was made. I am not sure.
Mr. Sanders. Was there not also a concern that the legislative in-
crease could have rippled to other commodities and caused an even
greater drain on the Treasury in that manner ? In other words, if Con-
gress saw fit to statutorily raise the support price for milk to such a
very high level, that this attitude might have extended to some other
commodities ?
Mr. Campbell. I am not certain that would be true, no. I wouldn't
personally have that particular feeling, because this effort was brought
about as a result of the corn blight, which we had in the preceding year
which had given us a short corn crop and the farm act is a 4-year act
or a 5-year act and I am not certain that that was taken or that that
came into consideration at all. I don't — it didn't come into my con-
sideration.
Mr. Sanders. No further questions.
Mr. Weitz. Mr. Campbell, you were asked by Mr. Sanders with re-
gard to your knowledge of any relationship between the price-support
decision in March 1971 and the promise of, or the actual giving of, con-
tributions to the President's reelection campaign. In that connection
or in general wei'e you aware during March 1971, of any contacts be-
tween people in the A^^iite House and the dairy industry aside from
the meeting you attended on the morning of the 23d ?
Mr. Campbell. I don't recall any knowledge of any meetings. I did
not attend any that I can remember and I don't recall hearing of any.
I would have had to be told second or third hand. I don't recall any.
That isn't to say it didn't occur but I don't recall any though.
Mr. Weitz. Similarly, were you aware of any communications be-
tween the President and any of his aides, other than the two meetings
you attended on the 23d with regard to the price-support matter.
Mr. Campbell. No, I don't recall any.
Mr. Weitz. Were you aware of any contacts between people in the
White House and Republican fundraisers with regard to milk price
supports ?
Mr. Campbell. No.
Mr. Weitz. Were you aware of any contacts between Eepublican
fundraisers such as Mr. Kalmbach on the dairy price supports?
Mr. Campbell. No, I am not familiar with Mr. Kalmbach and I am
not aware of anything in that connection.
Mr. Weitz. So whatever transpired, if anything transpired, between
those indi\'iduals with regard to the price-support matter, you have no
knowledge with regard to that ?
Mr. Campbell. No, sir.
Mr. Dorsen. I gather. Secretary Campbell, you have not heard the
tape recording of the afternoon meeting?
Mr. Campbell. No, I haven't heard it.
7787
Mr. DoRSEN. For that matter the morning meeting ?
Mr. Campbell. No.
Mr. DoRSEN. Did you play any role in the preparation of the white
paper ?
Mr. Campbell. Oh, yes, I looked at the white paper. I didn't play a
role in it. I looked at it for accuracy from my viewpoint of what I
knew, yes.
Mr, DoRSEX. Do you know who prepared the white paper?
Mr. Campbell. I can't — I don't know who specifically did. There is
somebody over there in the Executive Office Building and I don't know
the fellow's name. I don't know who did it. I looked at it for accuracy
from our viewpoint in the USDA.
Mr. DoRSEN. And is it fair to say that the economic analysis that was
contained in the white paper reflected your views ?
Mr. Campbell. Economic analysis ?
Mr. DoRSEN. Of the impact of the March 1971 price-support deci-
sion, if that reflected your views ?
Mr. Campbell. I don't recall what is in the white paper on that point.
I would have to see what the figure is. This is speculation as to impact
because nobody knows, but I have at times previously, used the figure
of $100 million to $300 million, personally but it was just coming out
of my head and I finally got a pencil and paper and personally made
mathematical calculations and when I did — I have used what I said
to you people here today — of $50 million to $100 million but that is
only after I took the pencil and paper and did it. Now, I have used
the personal figure before without doing any mathematical calcula-
tions of $100 million to $300 million. I don't know what the figures
are in the white paper.
Mr. DoRSEN. So, I guess your position is, that based on varying types
of analyses, different people could come to different conclusions as to
the impact ?
Mr. Campbell. Yes, because we don't know totally what would have
happened in the marketplace with regard to the price of milk.
Mr. DoRSEX. And I gather you know Dr. Don Paarlberg?
Mr. Campbell. Yes.
Mr, DoRSEX. And would he be qualified in addition to yourself ?
Mr. Campbell. Yes, he would be qualified. He and I don't always
agree and I don't always agree with my wife and my wife and I have
differences but they are pleasant differences with my wife and pleasant
with Dr. Paarlberg. But I do disagree sometimes with studies that
come out of the Economic Research Service.
Mr. DoRSEX. But he would be qualified ?
Mr. Campbell. He is qualified certainly. More qualified than T, I
would dare say.
Mr. DoRSEx. Anything else, Mr. Sanders ?
Mr. Saxders. I think it might be fair to say, Mr. Campbell, that
the thrust of the economic arguments in the white paper issued hj
the White House would be, that by hindsight the validity of the
decision to increase the price support was borne out by all of the
economic factors during that marketing year. For example, the rate
of increase in the cost of milk to the consumer was at a lesser rate
in that year than it had been for many years previous. I won't go
over all of these arguments now, but is it your conclusion that by
7788
hindsight the increase was a wiser decision than if the support price
had been left at the March 12 level ?
Mr. Campbell, I must frankly reluctantly admit that with hind-
sight, the decision to increase was the better decision, in view of the
fact that we have continued to have a dropout of dairymen and a
reduction in cow numbers. And I have heard Secretary Hardin say
on many occasions, that on hindsight the decision to increase after
having first announced no increase was the better decision, based on
the record of milk production and the price of milk to the consumer.
Mr. Sanders. Better for whom ?
Mr. Campbell. Better for the Government and better for the con-
sumer as well. The law specifically charged that the Secretary of
Agriculture set the price levels, the support level for milk in order
to insure an adequate supply to the consumer. And in hindsight, en-
forcement of that law tells us that the second decision, reversing the
first decision, was the better decision. And Secretary Hardin has
expressed that opinion to me on several occasions since and he is
speaking strictly as an economist having done his Ph. D. degree
work in dairy marketing.
Mr. Sanders. Your affidavit, referred to earlier in this interview,
mentioned that the decision of March 25 was based on a reevaluation
of the same information, I think, meaning the same economic infor-
mation which had been
Mr. Campbell. The facts hadn't changed.
Mr. Sanders [continuing]. Which had been known as of March 12.
Mr. Campbell. Yes, the facts had not changed.
Mr. Sanders. So what you and the other officials of the adminis-
tration were doing was reanalyzing the information already avail-
able, reevaluating it with respect to the pressures which were de-
veloping in Congress ?
Mr. Campbp^ll. Yes.
Mr. Sanders. And at the afternoon meeting with the President,
where he made his final decision, there was consideration of economic
factors ?
Mr. Campbell. Yes, because we did not wish to go above 85 percent
because of the impact on the Federal Treasury.
Mr. Sanders. No further questions.
Mr. Dorsen. Mr. Campbell, I think you indicated in summing up
with respect to hindsight evaluation, that you must reluctantly agree,
that in hindsight it was the correct decision. Is that the substance of
your testimony ?
Mr. Campbell. Yes.
Mr. Dorsen. AAHiy do you say reluctantly ?
Mr. Campbell. I hate to admit I was wrong. The reluctance was on
my personal admission.
Mr. Dorsen. I see. So that as of the moment when you and Secre-
tary Hardin walked into the afternoon meeting you were taking the
opposite position, but now you are convinced it was the correct posi-
tion in hindsight ?
Mr. Campbell. Yes, and if I may add for the record, this confirms a
prediction that I made in 1966 or 1967, while still in Georgia before
joining the U.S. Department of Agriculture, when the dairymen had
the biggest surplus on hand that we ever had and the highest produc-
7789
tion that we had ever had — when I predicted that we were headed
downhill on milk production and that we were going to have a short-
age in the United States. I made that personal prediction and was
laughed at by the professionals in the U.S. Department of Agricul-
ture. So it was a real bit of consternation for me, you know, to then
appear on the scene at a higher level. The only reason I relate that
story to you is that it was my long-range prediction and it is still my
long-range prediction, that we are going to continue to have a non-
flow of milk. But in making the decision which we made at this time,
we already had the market price up there and we did not want to sub-
stitute the Government for the market price.
Mr. DoRSEN". Now in talking about the valuation a year or 2 or even
8 years afterwards, of the economic consequences of the second March
price decision, we are making evaluations as to the effect of certain
economic data, the impact of certain things, and of coui-se, as we have
indicated this is hindsight. But at the afternoon meeting, at which
time the decision was made to increase the price, was there anyone
other than yourself and Secretary Hardin who were equipped to con-
sider the sophisticated economic arguments that had to be taken into
account under the statute ?
Mr. Campbell. I am sure there was no one else in the room that had
lived with the dairy industry as have I and had Secretary Hardin.
On the other hand if Donald Rice was in that meeting, he would have
had some basis on which to have made that type decision because of
all the tools at his command over in the Office of Management and
Budget, although I am assuming he was at the meeting. I don't re-
member whether he was or he was not because I don't recall. But if
he were there he would have been equipped with the tools at his hand
in the 0MB.
Mr. DoRSEN. And he was in regular touch with the USDA?
Mr. Campbell. Oh, yes.
Mr. DoRSEN. So that you were aware of all of his arguments and
positions well before the March 23 afternoon meeting ?
Mr. Campbell. Yes.
Mr. Dorsen. So I gather nothing new was said in that afternoon
meeting in the way of economic analysis ?
Mr. Campbell. No, I don't think so at all. We were just wondering
whether we could hold our position with Congress substituting their
policy decisionmaking for ours.
Mr. DoRSEN. I believe the white paper also points out that the long-
range philosophy of the Republican administration in Agriculture
was a minimum of governmental interference in the marketplace, is
that correct?
Mr. Campbell. We still hold to that philosophy.
Mr. Dorsen. And this is contrary to the Democratic position on the
Hill, is that right?
Mr. Campbell. Yes, from the standpoint of parties, you know, party
attitudes, but you do have variances within the parties, I mean, you've
got the same type of people within each party : Conservatives, mid-
dle-of-the-roaders, liberals, on any economic or social issue. So I would
say you've got people on both sides of that fence because you have Mem-
bers of Congress, Republicans, that were also introducing bills and
pressing us. I don't think you can put the party label on it.
7790
Mr. DoRSEN. Well, comparing, let us say on the one hand
Mr. Campbell. Let me go further, because Democratic Presidents
have also resisted dairymen's effoits, not only the Republican Presi-
dent, Richard Nixon.
Mr. DoRSEN. I gather you do subscribe to the fact that the Nixon
administration policy had been one of reducing the Government's
involvement ?
Mr. Campbell. Yes, sir ; and I subscribe to that.
Mr. DoRSEN. Well, at least the congressional leadership on the Demo-
cratic side was somewhat contrary, is that correct?
Mr. Campbell. Oh, yes; I think it is a fair statement. That is not
all inclusive though because you have personalities.
Mr. Dorsen. I realize I am making a general statement, and as a
general statement I gather you would subscribe to it?
Mr. Campbell. Yes.
Mr. Dorsen. I have no further questions.
Mr. Sanders. No further questions.
Mr. Weitz. That concludes today's hearing.
[Whereupon, at 11 :55 a.m., the hearing in the above-entitled matter
was adjourned.]
7791
Campbell Exhibit No. 1
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUllBIA
RALPH NADER, et al..
Plaintiffs,
V.
EARL L. BUTZ, et al..
Defendants .
DISTRICT OF COLUMBIA )
WASHINGTON, D. C. )
AFFIDAVIT
Civil Action No. 148-72
FILED
MAR 1 3 1972
JAMES F.DAVEY, Clark
J. Phil Caiq)bell, being firs : duly sworn on oath deposes and says
that:
1. I am the Under Secretary of Agriculture of the United States.
I have held this office sic.ce January 22, 1969. Before becoming Under
Secretary of Agriculture, I served 14 years as the Commissioner of
Agriculture of the State of Georgia. I was a dairy farmer for
years. As Under Secretary of Agriculture, I participated fully tn the
dairy price support determinations involved in this litigation.
2. Section 201 of the Agricultural Act of 1949, as amended (7
U.S.C. 1446), authorizes and directs the Secretary of Agriculture to
make available price support to producers for milk "at such leve '. not
in excess of 90 per centum nor less than 75 per centum of the paiity
price therefor as the Secretary determines necessary in order to assure
an adequate supply."
Section 204 of the Agricultural Act of 1954, in re-enacting
section 201(c), set forth the follo^d.ng Congressional policy:
The production and use of abundant supplies of high
quality milk and dairy products are essential to the
health and general welfare of the Nation; a dependable
domestic source of supply of these foods in the form of
high grade dairy herds and modem, sanitary dairy equip-
ment is important to the national defense; and an economi-
cally sound dairy industry affects beneficially the economy
of the country as a whole. It is the policy of Congress
to assure a stabilized annual production of adequate
eupplies of milk and dairy products ; to promote the
7792
Increased use of these essential foods; to Improve the
domestic source of supply of milk and butterfat by
encouraging dairy fanners to develop efficient production
units consisting of high-grade, disease-free cattle and
modem sanitary equipment; and to stabilize the economy
of dairy farmers at a level which will provide a fair
return for their labor and investment when compared with
the cost of things that fanners buy.
The "parity price" for milk and other agricultural commodities Is
the dollars-and-cents price computed under a statutory formula (7 U.S.C.
1301(a)) which will give farm commodities the same purchasing power, in
terms of goods and services bought by fanners, that the commodities had
in a specified base period.
Section A06 of the Agricultural Act of 1949, as amended, requires the
Secretary Insofar as practicable to announce the level of support for milk
"in advance of the beginning of the marketing year or season" (7 U.S.C.
1426). The level of support so announced may not be reduced.
3. The question of tha level at which milk should be supported was
subject to coQslderable debate even before the initial decision, aid it
was known that there was strong sentiment in favor of a higher leval of
support. For example, on March 9, 1971 - before the announcement of
March 12, 1971 - Senator Hubert H. Humphrey of Minnesota in an adi.ress to
the Senate, said:
THE PLIGHT OF OUR DAIRY FARMERS
"Mr. HUMPHREY. Mr. President, the Associated Press
reported on March 7 that the Secretary of Agriculture
is preparing to set milk price supports at $4.92 per
hundredweight. . . .
Mr. President, because farm expenses have risen since
the Secretary announced the support level last year, the
actual price support level has deteriorated to a little
more than 80 percent. And the overall parity for Ameri-
can agriculture at tTiis time is about 69 percent, which is
only a few percentage points above the alltlme low depression
period of the thirties. . . .
The number of dairy fanners has been dropping year
after year. The per capita consumption of milk has not
kept up with the amount the producers would like, and the
price that the farmers are receiving fcr their milk has
not kept pace with the overall rise ir. production costs
and costs of ll^'r'.g.
7793
I want to make It clear that 1 do not think the price
indicated in this Associated Press report of $4.92 per
hundredweight is adequate. Surely it is not adequate
for the investment of capital and labor that our dairy
families put into the production of milk. It may not
even compensate them for the erosion of income resulting
from lost inflation for the last 12 months. However,
it is at least a move in the right direction if the
Secretary should take it.
I wish to encouraga Secretary Hardin to set the price
at least at the level indicated in the Associated Press
dispatch, which is considerably less than a fair and
reasonable price. And it is my hope that he will go
substantially higher than the 85-percent price support
level. (117 Cong. Rec S 2692 (daily ed.)).
A. Others in the Senate took similar positions before the level of
$A.66 per hundredweight for manufacturing milk was announced on March 12,
1971. See, for example, remarks by Senator Hartke on March 9 (117 Cong.
Rec. S 2711 (daily ed.)); Senator Mondale on March 10, 1971 (117 Cong. Rec.
S 2849 (daily ed.)); and Senator Humphrey's further remarks on March 10,
1971 (117 Cong. Rec. 2854-2858 (dally ed.)).
5. About the same time, similar speeches were being giver In the
House of Representatives. The Honorable Ed Jones of Tennessee, for
example, on March 10, 1?'71, said in his extended remarks:
Mr. JONES of Tennessee. Mr. Speaker, I read an
Associated Press article yesterday which indicated that
Secretary of Agriculture Hardin is considering a dairy
price support announcement of $4.92 per hundredweight,
I think this price is too low for our Tennessee dairy
farmers. It is, I feel sure, too low for any dairy
farmer.
By 1980, the Department of Agriculture predicts there
will be only 200,000 dairy farms and only 110 billion
pounds of milk production.
This contraction of numbers is expected to continue.
This trend is summarized in the following table:
Number of U. S. farms selling milk and cream
Year: ■ Thousands
i9J0 1,959
1955 1,475
1960 1,032
1964 641
1969 400
1980 200
7794
. Thus, there are now only A00,000 dairy farms in this country.
Four-fifths of the dairy farms operating in 1950 have gone
out of business. The Department of Agriculture considers
that in 1980 there will be only one-tenth as many dairy
farms as there were in 1950.
This contraction has not simply been a consolidation of
dairy herds into larger farms. The number of milk cows on
U. S. farms has also been declining sharply. In 1950, there
were almost 22 million milk cows on American dairy farms. By
1970, this number had decreased by nearly 10 million cows
to a total of 12.5 million. By 1980, milk cows on farms
are expected to decrease by another one-third or some 4
million cows, to a total of 8 or 9 million.
Decreases in cow numbers have been offset in part by
Increases in milk production per cow. Thus the decreases
In number of farms and cows does not always mean an
absolute reduction in milk production. In the early
years of the downtrends in numbers, offsetting increases
In efficiency have tempered its impact upon output. Yet
efficiency gains are increasingly hard to come by. As
the number of cows decreases, capacity to maintain
aggregate output becomes more difficult. Dairy cows
cannot be replaced quickly and inexpensively and it is
Increasingly difficult to increase output per cow.
*******
Mr. Speaker, I sincerely hope that the Department of
Agriculture does not intend to sit idly by and watch
our dairy industry decline into oblivion. Unless dairy
price supports are set at a level high enough to
guarantee 90 percent of parity, that is exactly what
we are inviting. (117 Cong. Rec. E 1689 (daily ed.)).
Also see the remarks on the floor of the House by Representative
Thomson of Wisconsin, March 11, 1971. 117 Cong. Rec. H 1473 (dai\y
ed.).
6. The decision oi March 12, 1971, to continue the dairy sup.x>rt
level at $4.66 per hundredweight was based upon information available
at that time and upon the Secretary of Agriculture's interpretation
of that information. The later decision of March 25, 1971, to revise
the support upward to $4.93 vas based on the Secretary's re-evaluation
of that same information as it related to the legislative goal of
achieving an adequate supply. The economic data on which price support
determinations such as this are made rarely support only one conclusion.
For example, the Commodity Credit Corporation docket of March 3, 1971,
on which the March 12 announcement was based, showed that the $4.66
per hundredweight level of support would represent only 80 percent of
7795
parity as of the beginning of the marketing year whereas, at the beginning
of the previous marketing year, $4.66 per hundredweight represented 85
percent of parity. This demonstrates that dairy farmers had been
experiencing increasing costs of production during the marketing year.
The higher such costs, the smaller the return to the farmer for his milk
and the greater likelihood cf further reductions in the number of dairy
producers.
The index of prices paid by farmers for the various goods and
services they buy are shown for the years 1967 through 1971 in the
following table:
Index of Prices Paid by Farmers as of February 15 since 1967 (1967=100)*
1967 1968 1969 1970 1971
Prices paid by farmers
commodities and services.
Interest, taxes and wage
rates 99 102 108 113 119
Prices paid
99
101
105
110
115
Family living items
99
102
107
112
117
Production Items
100
101
104
109
113
Feed
103.
96
96
101
108
Feeder livestock
98
102
109
125
124
Interest
100
110
119
128
138
i
Taxes
100
111
124
134
144
Wage rates
94
103
114
124
130
* These figures as of February 15 of each year are expressed a\. a
percentage of the average of the prices during all of the base year 1967.
Source: Based on SRS Agricultural Prices (Pr 1) for February, 1967 through
1971.
Similarly, the docket disclosed that while the downtrend ia the number
of milk cows on farms had slowed, cow numbers did continue to decline.
During the previous 5 years, U. S. milk production had been trending down-
ward. U. S. milk production had dropped from a high of 126.9 billion
pounds in 1964-65 to a low of 116.5 billion pounds in 1969-70. Although
there had been some small and somewhat erratic monthly production increases
In 1970, they were by no means conclusive. These facts suggest t^le
possibility that further reductions in the nvmiber of dairy animals might
so , > reduce milk production as to leave an insufficient quantity of milk
7796
callable not only for connnerclal consumption but also to meet the ne^jg
of the domestic food assistance and other programs. Continued reduct^^^ns
In the number of dairy cows would have a serious impact on the supply ^f
milk. Although increased production was reflected in the docket, it vas
not sufficient to provide any substantial margin of confidence. The
support increase of 38 cents per hundredweight during the previou;s
marketing year had apparently just begun to bring about a halt in th^
sharp production declines. The further increase to $A.93 - continuing
the level at about 85 percent of parity - would provide assurance ag^itvBt
the resumption of a downward trend in milk production.
The docket also shows that uncommitted CCC inventories of cheeae \rere
about 7 million pounds on January 31, 1971, and that CCC purchases of cheesy
for the 1971-72 marketing year were projected at 75 million pounds, this
quantity of cheese was inadequate in view of the demand for cheese 1|\
DSDA family feeding and child nutrition programs. An additional 11 wiiHon
pounds were needed to fulfill these program requirements. At the time the
docket was considered, it was contemplated that the additional chaeae
required would be purchased for program outlets under the authority of
section 709 of the Agricultural Act of 1965 (7 U.S.C. 14A6a-l) . Jectlon
709 authorizes the Secretary to use funds of CCC to purchase suf'.lclent
supplies of dairy products at market prices to meet the requlren. mta for
schools (other than fluid milk) , and for domestic relief dlstrlbvtloR,
community action, and such other programs as are authorized by la*, when
insufficient stocks are acquired through price support operations for thes«
purposes. However, the exercise of this authority at times when (heeae
factories are paying more than the support price for iranufacturlng milk
tends to disrupt the usual flow of milk going to manufacturers of butter
and nonfat dry milk. The quantity of cheese which would be purchaaed
under the price support program as a result of the higher level of support
for manufacturing milk would permit domestic food assistance needs for chetgg
to be filled without having to use section 709 authority.
The Agricultural Act of 1970, enacted shortly before consideration of
'the 1971-72 support program, had suspended the mandatory requirement to
7797
support the price of butterfat as a separate commodity. By virtue of this
change in the law, the Secretary could establish that combination of prices
for butter and nonfat dry milk which would result in a value equivalent
to the price support for milk, yet not add unduly to the CCC Inventory of
butter, for which there are fewer outlets. Since, as the docket pointed
out, there was a desire to reduce butter prices to more competitive levels,
at the time the Secretary increased the support level for manufacturing
milk he did not announce a concomitant increase in the price of butter.
Although it was necessary to raise the price of nonfat dry milk produced
by the same plants which produced butter in order that the combined value
of the two products made from 100 pounds of milk would be equal to the
support price for milk plus manufacturing costs, it was felt that the
resulting increased inventories of nonfat dry milk could easily be
utilized to meet anticipated program needs.
Moreover, the estimates on which price support for dairy products
is determined are at best uncertain. For example, milk produ :tion is
measured in terms of over 100 billion pounds. An error of on?.y 1 percent
in the estimate of production for the marketing year could rejult in
over a billion pounds less of milk available during the marketing year.
The estimates are, of course, based on normal weather conditions; adverse
weather conditions would result In lower production than estimated. Even
if the price farmers will receive for milk is known in advance , predicting
their response in terms of production is, at best, uncertain aid difficult.
This is because price, Important as it may be, is only one consideration
which of ten-times may be overshadowed and outweighed by other factors such
as production costs, availability of labor, availability and cost of
capital, age and health of the producer, the attractiveness of alternative
opportunities - both on and off the farm - and other factors.
Estimating consumers' response to price changes in dairy products
likewise is difficult. The problem is compounded by the fact that estimates
must be made of not only fluid milk consumption, but also the consumption
of all products manufactured from milk and the milk equivalent of those
products.
7798
Another Important consideration is the fact that milk
production is not turned on at will. While cows can be slaughtered
and production turned off nearly as soon as producers decide to
disi-ontinue dairy farming, a minimum of three years is required
after decisions are made before production can be increased. The
ges.ation period of a cow is about 9 months and another two years
or more may be required before the heifer (female) calves can be
bred, reproduce, and themselves begin to give milk. This time
lag in restoring milk production is well illustrated by the fact,
referred to above, that only after five years with price support
levels ranging from 83 percent to 89 percent of parity, followin;
a period when price support was at or about the legal minimum,
did production begin- to increase.
It must also be borne in mind when determining the level o:
support necessary to assure an adequate supply of milk, that the
CCC inventory stocks of dairy products are a significant part <•£
our nation's food reserves. It is from this supply that foods -
Including dairy products - are drawn by State and local goverrjients
In the event of national disasters such as hurricanes, floods and
tornadoes.
Against such a background, the Secretary of Agriculture mist make his
determination each year as to what support will be needed to a!:sure the
adequate supply required by the statute. Needless to say, he las no magic
formula to provide him with an unfailingly accurate and unchanging answer
to his problem, and he must rely upon his own knowledge and judgment. The
Secretary of Agriculture in March 1971 was extraordinarily qualified to
deal with the dairy price support question. An eminent agricultural
economist himself by virtue of his education, training, and distinguished
7799
experience, he understood the economic intricacies and imponderables which
surrounded the problem.
7. Notwithstanding the existence of some factors from which it could
have been concluded that a higher level price support was necessary to
assure an adequate supply, on March 12, 1971, the initial announcement
was issued establishing thr support price of $4.66 per cwt., which was the
same dollars-and-cents level as was in effect for the previous year but a
lower percentage of parity since the costs of goods and services bought by
farmers had increased since the previous year. A level of price support /
could always bel. Increased, but as pointed out in paragraph 2, once announced
the level of support may not be reduced.
8. Subsequent to the announcement of the $4.66 per cwt. ]»rice support
on March 12, it was strongly urged by various representatives of the dairy
industry that the support level be increased, because of increased
production costs to farmers. A number of bills were introdu:ed to increase
the level of price support for milk. On March 19, 1971, Setator Humphrey
introduced S. 1294 to increase the rate of price support to at least 85
percent but not more than 90 percent of parity. 117 Cong. Rec. S. 3379
(daily ed.). Senators Nelson and Hughes sponsored S. 1277, a similar
bill. 117 Cong. Rec. S. 3455 (daily ed."^. Some 21 like bills were
introduced in the House of Representatives.
9. Following Secretary Hardin's March 12 announcement of $4.66 there
was a continuing appraisal of the cost-price squeeze on diirymen and
its effect on dairy farmers and milk production. On March 25, 1971, the
Secretary announced that the support level would be established at $4.93
per cwt., which maintained the level at 85 percent of parity - the same
percentage-of -parity level which had been in effect the previous year.
Such action was not novel or unusual. Price support determinations for /
particular marketing years had been increased in the past even after the
marketing years had begun. Such prior actions are summarized below:
Marketing Year April 1 Date and Change
1956-57 $3.15 April 18 - $3.25
1960-61 $3.06 September 17 - $3.22 (Congress)
March 10 - $3.40
1966-67 $3.50 June 30 - $4.00
7800
10. The actual results of the program have confirmed that the
Secretary's judgment that a higher price support was necessary In order
to assure an adequate supply was correct. As of January 31, 1972, CCC's
inventories of dairy products were not only considerably lower than they
were a year ago, they also are about as low as they have been for a number
of years. This is illustrated by the following table:
CCC Uncommitted Inventory as of
January 31, 1962-72*
Marketing year
Butter
Cheese
Million pounds
Nonfat dry milk
1962
188.2
52.3
222.6
1963
327.5
43.7
521.6
1964
132.8
28.5
272.5
1965
20.1
4.8
113.5
1966
' 3.7
—
26.7
1967
21.0
2.2
28.9
1968
124.7
67.9
208,4
1969
73.0
23.1
221.1
1970
35.2
—
116.5
1971
61.8
6.6
18.7
. 1972
37.1
1.9
1.^
*Sources: USDA Press Releases of CCC Dairy Price Support Ac'iivitles
for January, 1962 through 1972.
CCC Docket MCP 98a, Milk Price Support Program, 1971-72, and CCC Docket
MCP 98a, Amendment 1, Milk Price Support Program, 1971-72, are attached
hereto, marked Exhibits A and B, respectively.
^
J. Phil Cafaphell
St&scribed and sworn to before me, a Notary Public in and for the
District of Columbia, this /a''^^ day of March, 1972.
Notary Public
My Conuclssioo Ezpires S« Jt M. 197*
7801
Campbkll Exhibit No. 2
UNDER SECRETARY CAMPBELL CAUTIONS DAIRY FARMERS
[U.S. Department of Agriculture press release]
State College, Pa.,
March 22. 1071.
Under Secretary of Agriculture J. Phil Campbell today told U.S. dairy farmers
that, the decisions they make this year can l)e critical in shaping the future of
the dairy industry over the next 10 years.
Speaking at the Sixth Annual Meeting of the National Dairy Herd Improve-
ment xVssociation, Inc., on "The Future of Dairying," Mr. Campbell said :
•'The decisions made now and during the next 12 months as to the amount of
milk produced in the United States will have far-reaching effects. If dairymen
adju.st realistically to market conditions they can enjoy relative prosperity. If
they fail to adjust, depressed prices will result and it might be impossible for
most dairymen to meet production costs and have enough net dollars left over
to maintain a decent standai-d of living.
"For the past five or six years I have been predicting l)etter times for dairying,
aud during this period conditions have improved. Supply and demand have
come into mudi better balance and prices have responded.
"Tonight, however, I must strongly urge caution and serious thinking on
the part of dairymen and their leaders."
Pointing out that, among U.S. livestock producers, only dairy farmers and
wool protlucers have government programs to help determine their welfare,
and Under Secretary said, "All other livestock producers have consistently main-
tained opposition to any suggestion of Congressional action which would regu-
late the supply or jjrice of beef cattle, swine, poultry or poultry products.
"Through the years dairymen have had Federal or State milk marketing
ordei's to set minimum prices for Class I milk, and in .some States to establish
quotas or milk bases. In addition, a svipport price on milk for processing or manu-
facturing purposes has guaranteed a minimum price for milk.
"I have strongly defended these state and Fedei-al programs for dairy farm-
ers. I have done .so because the production of milk is unique among all farm en-
terprises. First, milk must be produced under rigid sanitary conditions estab-
lished by law — and this is as it shoidd be.
"Second, dairying is an entei-prise recpiiring a large capital investment, ap-
proaching .$2,000 per cow, with low financial returns — so low. in fact, that they
do not permit the recovery of the capital investment during the occupational
lifetimes of most dairymen.
"Third, dairy production is the most confining of all types of farming. The
cows will not stay milked — it's twice a day. every day, including Saturday,
Sunday, the Fourth of July, Thanksgiving, and Christmas.
"Fourth, starting from scratch, no dairy farm operation, ludess it's the feed
lot type in which all the feed and the cows are purchased annually — can be
sati.sfaetorily established in less than five years.
"Fifth, dairy farmers can't sluip around from market to market seeking a
better price as producers of other commodities can. Milk is a perishable prod-
uct. It must go to market regularly. It can't be stored by the farmer or hauled
from one town or one street corner to another and taken out of the tank and
put back in as you can do with cotton, corn, wheat, fruits, vegetables, and most
other commodities.
"Finally, dairying is a lifetime business that a person does not jump into and
out of every few years. Not only does it take years to establish but the life cycle
of the cow is a strong factoi'. The cow has only one calf a year, and every other
year it's a bull which doesn't add to the milking l>erd.
"For these reasons among others, I have always defencfc'd State and Federal
programs to assist dairy farmers. Wfthout such programs eventually there would
not be enough milk produced for the consumers of this Nation.'"
With the help of these programs, but mainly because dairymen made the
production changes the market called for, dairy income has improved steadily
for the past six years, Mr. Campliell continued. "P>eginning in U)t)."i, every year
has seen a decline in the production of milk until 1070 which brought an upswing
in production. Whether the increased output last year resulted from decisions
by dairy farmers based on expectations of profits or from some such factors
as mild weather and better than average forage, we do not know,"
30-337 O - 74 - pt. 17 - 18
7802
Reviewing tlie history of tlie 1960's, Mr. Campbell pointed out that in 1961
U.S. milk production climbed to a near all-time high of 126 l)illi()n pounds,
causing the Federal Government to purchase more than $600 million worth of
milk products from July 1961 to June 1962. In 1902, the support price of milk was
reduced from .$8.40 per hundredweight to $3.11 in order to discourage continued
overproduction. As a result of reduced prices and other factors, milk production
dropped from the all-time high of 127 billion pounds in 1964 to 116.3 billion
pounds in 1969. But last year production swung upward to 117.4 billion pounds,
and a further moderate increase is expected in 1971.
"Dairymen will again be in serious trouble if milk production during the next
few years increases beyond the capacity of the market to absorb it," the Under
Secretary said.
"In fact, overproduction in the 1970's would be even more burdensome than
it was during the early 1960's, because higher support prices will increase gov-
ernment costs i^er 100 pounds of milk removed from the market. For example,
CCC costs for the removal of dairy products during the current fiscal year are
estimated at about $380 million^ — and this is for what is regarded as a very
manageable surplus.
"I w^nt to cite a little more history — and point out that it seems to be re-
peating itself. Do you recall that when Secretary Benson took oflSce in 1953
d^airymen had been pressing for high support prices V Milk production and gov-
ernment stocks shot up and dairy prices and cash receipts went down. And
the support price had to be lowei'ed.
"AVhen Secretary Freeman took office, the same thing happened. Dairymen
pressed for higher supports and got them. And again production and stocks
soared and farm prices for milk fell below the support level and the support
had to be lowered.
"When Secretary Hardin took office, dairymen again sought higher supports
and last year production turned up again. Atlmittedly, the situation is not as
bAd as it was in the early 1950"s and early 1960's. But in the light of this his-
tory. I must urge dairymen not to be their own worst enemies and push for
higher supiwrts at this time. Let's watch the situation carefully for the next
few UKvntlis until we get a clearer picture as to whether a new trend of in-
creased production is becoming establi>+hed.''
Farmers today have recently acquired other tools which they have fought
for through many frustrating years, the Under Secretary said. "I urge you
to look at these tools closely to see how you can best use them.
"First, under the Agricultural Act of 1970, Class I base plans can be estab-
lished in Federal market areas. These base plans can influence production up-
ward or downward ^s conditions dictate and allow each dairyman to tailor
his output to market reciuii't'meut.
"Second, the new daii\v promotion legislation signed into law by President
Nixon in January gives dairymen the opportunity to determine whether they
want a check-off system to be established for the promotion of milk sales.
This provides hope of reversing the decreasing trend of per capita milk con-
sumption in America.
"Third, dairymen have l^een pushing for an economic formula for pricing
milk. However, the formula proposed in hearings last year was formulated
without Department consultation and it api)ears to be so constructed as to
have unnecessary price inflation tendencies built into it. Surely the dairy in-
dustry has suffered enough from infl,ation, not to promote more of it. The
Department is more than willing to work with dairymen to i)erfect a better
pricing formula."
With reasonable foresight on the part of the prtKlueers, the dairy industry
can work out its present problems and take advantage of the Nation's economic
growth during the 1970's, Mr. Campbell said.
"Tlie future of dairying over the next 10 years will be determined in part by the
addition of 25 million persons to our national pojiulation and by a 50 percent
increase in consumer purchasing power. This, plu.s the expansion of food aid and
enactment of President Nixon's Family Assistance Program, will me,an a sub-
stantial increase in demand for dairy foods.
"On the other hand, the number of dairy farms selling milk in the ITnited
States may be about 200,000 in 1980, compared with around 400,000 t(Klay.
Cash receipts per commercial dairy farm in 1!)S0 may be roughly triple the cur-
rent level. Even with rising production costs, this should mean a substantially
improved income picture for commercial producers."
7803
Another reason for optimism about ^igricnlture's long-term future is the
New Federalism proposetl by President Nixon, Mr. Campbell said. Tliis in-
volves .sharing, decentrali/ation, and a reorganization of the Federal Government.
"For the past third of a century we have seen an increasing centralization
of power in Washington. As a result, too many decisions are being made by
people far removed from the local situatioiL'i. This is one of the reasons for
the gap between promise and performance in government. You will note that
the 1970 Farm x\ct gives much more decisionmaking to farmers. Thi^s is one of
its great advantages.
"This Administration wants to move toward a new partnership between the
Federal Government and the States and local units. Local decisionmaking
builds stronger, more stable, and more progressive State and local govennnents.
"These changes are vital to America ,and they deserve the support of every
citizen,'' he said.
THUBSDAY, JUNE 13, 1974
U.S. Senate,
Select Committee ox
Presidential Campaign Activities,
Washington^ B.C.
The Select Committee met, pursuant to notice, at 9 :15 a.m. in roon)
G-334, Dirksen Senate Office Building.
Present : David M. Dorsen, assistant chief counsel ; Alan S. Weitz,
assistant majority counsel; Donald G. Sanders, deputy minority
counsel.
Mr. Weitz. Mr. Kalmbach, I first want the record to reflect that
this is a continuation of your previous testimony, and you under-
stand that you are still under oath.
TESTIMONY OF HERBERT W. KALMBACH— Resumed
Mr. Kalmbach. I do so understand.
Mr. AVeitz. Now, you last testified before the committee in executive
session on March 22, 1974, and there are several points, I understand,
that you would like to correct, or complete with respect to the record on
that date.
First, I believe, you testified on page 7617 with respect to a con-
versation you had on or about April 4, 1972, in connection with a
representative of Associated ]Milk Producers, and at that point you
referred to a conversation with Mr. Jacobsen and a request that you
contact somebody in the White House in connection with the anti-
trust suit then pending.
I take it now that you recall there was just an error in the testimony
and that it was Dr. Mehren, not Mr. Jacobsen with whom you spoke.
Mr. Kalmbach. Can we go off the record ?
Mr. Weitz. Sure.
[Discussion off the record.]
Mr. Weitz. I'm sorry, it actually was an error in my question, I said
Mr. Jacobsen, but you understood and were referring to Dr. Mehren;
is that correct ?
Mr. Kalmbach. That is correct.
Mr. Weitz. And it was Dr. INIehren that you spoke of on April 4,
and it was he that referred to your contacting someone in the White
House in connection with the antitrust suit.
Mr. Kalmbach. That is correct, and I simply wanted the record to be
clear that it was Dr. Mehren I was talking to during that conversation
on April 4, 1972.
Mr. Weitz. I understand, that was my error in the question.
Mr. Kalmbach. Well, just simply to make sure that the record was
not confusing.
Mr. Weitz. Second, you also testified on that occasion with respect to
your contact with Milton Semer in 1969, and the delivery to you of
(7805)
7806
$100,000, and the discussion of an additional possible $150,000 that
year, and stating three objectives to you.
Could you now tell us, specify specifically t}\Q relationship between
those contributions and on the one hand, his desire to seek an audience
and meeting with White House officials and on the other, specification
of certain objectives of his clients.
Mr. Kalmbach. Yes. Simply to make the record clear, when I met
with Mr. Semer in 1069, up to and including the time on August 2,
1969, when he actually delivered to me $100,000 in cash as a contribu-
tion from his milk producer clients, it was the clear understanding in
exchange for this contribution, that I would arrange for Mr. Semer to
be able to see certain individuals within the adminivStration before
whom he would be able to plead his case on behalf of his clients.
Now, the objectives of his clients were stated and are reflected in
my diaries, and T think are clearly reflected in my diaries on August
2, 1969, although I remember that my diaries, I think, reflect, that I
had earlier understood the three objectives.
But I want to make it clear that there was no underetanding be-
tween Mr. Semer and myself that the considv^ration for the $100,000
contribution Avasthe attainment of these objectives; it was sim])ly that
he would be able to meet with certain people within the administra-
tion, and before those people he would be able to plead the case of his
clients relative to the attainment of these objectives.
Mr. Weitz. Mr. Haldeman and othere at the "\'\niite House were
aware of the contribution, were they not?
Mr. Kalmbach. They were.
Mr. Weitz. They were aware at the time before and shortly after
it was made that Mr. Semer and his clients wanted, in connection with
that contribution, to meet with them.
Mr. Kalmbach. To meet with various people within the admin-
istration, and particularly within the Wliite House group.
Mr. Weitz. And Mr. Haldeman and INIr. Stans and others were
aware of the objectives of Mr. Semer and his clients, as stated to you.
Mr. Kalmbach. That is my recollection, yes, sir.
Mr. Weitz. And paiticularly in Mr. Haldeman's case, he approved
the receipt of the contribution.
Mr. Kalmbach. He did.
Mr. Weitz. Mr. Kalmbach, since your last appearance here, have
you undertaken to continuue searching your records and files for any
documents that relate to your testimony before the committee ?
Mr. Kalmbach. I have.
Mr. Weitz. And since that time, have you found certain documents
that do relate to matters to which you testified ?
Mr. Kalmbach. I have.
Mr. Weitz. Let me show you a copy of a letter dated April 17, 1969,
from you to the Honorable Maurice H. Stans. Is this a copy of a
letter that you have uncovered in your continuing search?
Mr. Kalmbach. It is.
Mr. Weitz. Could you tell us the circiunstances of your finding that
letter?
Mr. Kalmbach. Yes. I had, in connex'tion with a recent appearance
relative to a motion in the district, court where I appeared on behalf
of the special prosecutor relative to those arguments, I had informed
7807
the special prosecutor before my appearance, and in fact was ques-
tioned durinof my appearance on tlie stand relative to a copy of a
letter that I liad been o^lven by the attorney of Mr. Stans several
months ago, at the time that I Avas being deposed in the Nader v. Butz
suit.
I advised the special prosecutor following my appearance on that
day that I would do my best to find the copy of that letter that I felt
was somewhere in my records at home.
After I returned to California, and for several weeks preliminary to
m:^ return from California this week, I did search my records, and
although I did not find the copy of that particular letter, I did find
three matters, three copies that were copies that should be transmitted
and were in fact transmitted to the special prosecutor's oflice and to
your staff.
Mr. Weitz. Let me mark this letter which you have identified. I will
mark it as exhibit 3 ^ for your testimony.
[The letter referred to Avas marked Kalmbach exhibit No. 3.^]
JNIr. Weitz. Now, in your previous testimony here on ^Slarch 22 you
were asked whether you recalled a conmiitment by Mr. Mulcahy of
$150,000 to the Republican National Committee; and at that point you
said that at that time you did not.
Now, this letter, exhibit 1, refers to a commitment of $25,000 in
respect to a 1969 victory dinner and $100,000 in the 1970 campaign
from Mr. jVIulcahy. Does this refresh your recollection as to your
involvement in such a commitment from Mr. ^lulcahy ?
Mr. Kalmbach. Yes; it refreshes my recollection that I was
advised — as is set forth in that letter — that I was advised by Mr. Mul-
cahy that he was conti'ibuting $25,000 to the dinner in the spring of
196*9, which was, as I remember, a Republican National Finance Com-
mittee fundraising dinner; and further, that Mr. Mulcahy was pledg-
ing— and was simply advising me, as I remember it — that he Avas
pledging $1(M).000 to the Roi)ublican National Finance Committee for
the various congressional campaigns in 1970.
And then, in my letter to then Secretary Stans, I simply reflected
that understanding in that letter.
Mr. Weitz. Noav, in your continuing search for documents relative
to the testimony, since your last appearance here, have you also uncov-
ered another document Avhich appears to be an itinerary for several
days in March 1971 ?
Mr. Kalmbach. I did.
Mr. Weitz. Let me show you this and ask if this is a copy of the
itinerary Avhich j^ou found.
Mr. Kalmbach. It is.
Mr. Weitz. Let me mark it exhibit 4 to your testimony.
[The document referred to Avas marked Kalmbach exhibit No. 4. -]
Mr. Weitz. Let me ask you, can you tell us the circumstances of your
finding this document?
Mr. Kalmbach. The circumstances are the same as T related relatiA'e
to my finding the letter to Mr. Stans Avhich pertained and had refer-
ence to Mr. Mulcahy's pledge to the Republican National Fina^ice Com-
mittee programs in 1969-70.
^ Kalmbiich exhibits 1 ami 2 appear iu testimony of Maroli 22 ; see pp. 7625 and 7624.
•^ See p. 7816.
7808
Mr. Weitz. All right. Now, I would like to direct your attention to
page 2 of the document, at the bottom.
First let me ask you, do you recall when this document, the original
of the document was prepared ?
Mr. Kalmbach. I do not recall with particularity when it was pre-
pared ; but it would be my impression and clear understandin<x that
it was prepared, probably, on March 23, 1971, immediately prior to
the time that I left for the flight to Washington, which was early on
the morning of March 24, 1971.
Mr. Weitz. The itinerary, exhibit 4, indicates that on Wednesday,
March 24, 1971, you were to depart from Los Angeles at 8 :30 in the
morning. Did you take that flight and leave at 8 :30 in the morning,
or approximately 8 :30, from Los Angeles ?
Mr. Kalmbach. I'm certain that I did.
Mr. Weitz. Did you go to your office first that day, or did you go
to the airport directly from your home ?
Mr. Kalmbach. I have no clear recollection of that, although my
impression would be that, inasmuch as it is an hour or II/2 hour drive
from my home to the airport in Los Angeles, that most likely I did not
go to the office but directly from my home, leaving perhaps at 6 :30 in
the morning, to get to Los Angeles air^wrt bv 8 o'clock preparatory to
my flight at 8 :30.
Mr. Weitz. And did you take a copy of the Avritten agenda, itinerary
with you on that trip ?
Mr. Kalmbach. Yes ; I would think that I certainly did.
Mr. Weitz. That was the purpose of having it prepared, for your
ttip.
Mr. Kalmbach. That is correct.
Mr. Weitz. Who was your secretary at that time ?
Mr. Kalmbach. Mrs. Annette Harvey.
Mr. Weitz. And did she, as a custom, arrive at the office as_ early as
6, or 6 :30 in the morning ?
Mr. Kalmbach. No; and that is the reason that I feel that this was
prepared on the 23d, and I received it on the 23d, preparatory to my
leaving early on the 24th.
Mr. Weitz. Now, on page 2, at the bottom of the document, it refers
to, or indicates "ITWK/ah" ; and beneath that, "3/24/71". Now, the
"ITWK" refers to you ; is that correct ?
Mr. Kalmbach. That is correct.
Mr. Weitz. And the "ah" to your secretary, Mrs. Harvey.
Mr. Kalmbach. That is correct.
Mr. Weitz. Now, the "3/24/71" normally would indicate the date
of the document is March 24, 1971.
Mr. Kalmbach. That is correct.
Mr. Weitz. I take it from what you say that you are almost certain
that the document — you are certain the document was not prepared
on the 24th, but was prepared prior to that day.
Mr. Kalmbach. I am as certain as I can be that it was not, just
on the logic involved.
Mr. Weitz. And, is it your best recollection that it was prepared,
based on the facts in connection with that trip on the 23d, the day
before vour flight ?
Mr. Kalmbach. Excuse me ?
7809
Mr. Weitz. Is it your best recollection tliat tlie doctiment was pre-
pared the day before you left, that is, March 23d?
Mr. Kalmbacii. Tliat is my best recollection, Mr. Weitz. Excuse
nie, can we go ott' the record ?
[Discussion off the record.]
Mr. WErrz. Now, the itinerary reflects your scheduled meetings and
appointments for Marcli 24 and 25, and the 2 days following that,
also ; is that correct ?
Mr. Kalmbacii. That is cori-ect.
Mr. Weitz. What is your best recollection, now, of the source for
that information; did you talk with someone who gave you the in-
formation to prepare the agenda for the trip to Washington?
Mr. Kalmbacji. I think I talked to several people in order to pre-
pare this agenda for this trip.
Mr. Weitz. Was one of those persons John Elirlichman ?
]\Ir. Kalmbacii. It would be my best recollection that it was.
Mr. Weitz. And is it your recollection that you spoke with him on
March 23 ?
Mr. Kalmbacii. That would be my best recollection.
Mr. Weitz. Now, on March 24, written on the agenda there are two
meetings that I would like to direct your attention to. One is at 5 :30
p.m. and indicates, "Meeting with John Ehrlichman in his office."
That is the first meeting listed after your scheduled arrival in Wash-
ington. Did you go and meet ]\Ir. Ehrlichman that afternoon after
you arrived in Washington ?
Mr. Kal]mbacii. That is my recollection.
Mr. Weiiz. And was the purpose of that meeting to discuss subse-
quent meetings scheduled for you while you wei-e in Washington?
Mr. Kalmbacii. I'm not certain, Mr. Weitz, as to the purpose of that
meeting; although it's logical to me that we did discuss other meetings
that I would be having in Washington, including a luncheon meeting
that I had with Air. Ehrlichman the following day at the White House.
Mr. Weiiz. Now. of tlie meelings and other appointments listed in
3^our itinerary, the only meeting foi' which the persons you wej'e to
meet are not 'listed is the 11 p.m. meeting on the 24th. Was this also,
I take it, something you learned of on the 2.')d, that the meeting was
scheduled, but not necessarily the participants?
Mr. Kalmbacii. Yes.
Mr. Weitz. Did you learn that from Mr. Ehrlichman?
Mr. Kalmbacii. I don't have an independent recollection of that,
but, again, it would be my impression that I learned it from Mr.
Ehrlicliman.
Mr. Weitz. Now, the 11 p.m. meeting listed in youi- itinerary, is it
your best recollection that that meeting is the meeting to which you
testified, that took place after the Republican fundraising dinner on
the 24th between you, Mr. Chotiner and Mr. Nelson ?
Mr. Kalmbacii. It is.
Mr. Weitz. Could you tell us your best recollection as to when you
fir-st learned that yoi^ would be meeting with Mr. Chotiner and Mr.
Ne ju, that is, the '-a'-ticular pai-ticipants of the meeting?
■s^y. Kalmbacii. V:i not certain on this point, :Mr. Weitz; but, it is
my impression that 1 learned of my meeting, forthcoming meeting,
7810
with Mr. Chotincr and Mv. Xelson from Afr. Ehvlicliin:m ;i( oiif :. ::',o
iiieetiiiii- tliat afleriiooii.
Afr. Wr.TTZ. And al ilmi lini<\ tl<> \i>\i have a rccollccllon <ji" what lie
told voii ilic |'iir|«)sc of tliat II o"clin-K- im^rm<j- would l>e ^
Afi-. K \i.Mi",\( ir. No: I dou'l have uii indepondcnt lerollectioii of
tliat , >rr. Wchz. But, a^ain. it's my impression that I was advised that
I would receive a reaffirmation of the pledge from the milk producers
at that late mcotinc: on the 24th.
l\[r. AVr.TTz. That is the $2-million pledge to the Presidential cam-
pa ign?
iSIr. K.vL^rRACTT. Yes, sir.
Mr. Wfitz. Were yon al-o ad\iH(Ml. or is it your undersianding,
based on the <'ircnrnst;nuTs of (he niecMino- later. ;iiid of your itinerary
S''t forth 1)0 fore you loft, that Ml". Ehrlichnuin advised you to the like-
lilHvxi of a price-sui)port increase, or the actuality of a price-support
increased
Mr. Kalmbacit. I'm not certain on that, Mr. "Weitz.
Mr. AVErrz. Now, when you testified here on March 22. 1974, you
indicated that with respect to the mcctino- with Mr. Chotinei' and
]\rr. Nelson, that you thought at that time Mr. Chotiner had asked
you at tlie dinnoi- to meet Avith him following the dinner.
I take it now that your recollection, based on this document, is re^
fi'eshed. so that your present recollection is that it Avas Mt*. Ehrlich-
man. prioi- to the diimer. who had informed you of the meeting and
the purpose of the meeting?
INfr. Kalmracti. That is correct.
]\Ir. Wfjtz. And, is it also true, nonetheless, that at the meeting
itself, at 11 o'clock or sometime after the dinner. INIr. Chotiner did,
as you testifiod. state that tlie i)ledge was being reaffirmed in view of
the price-support increase, as you testified^
Ml'. KALAri'.Acu. Yes: at that moetiuo- T was advised that the ]>rice-
supi>ort decision was to be announced the next day. that is my recollec-
tion; and. that in view of that fact, the pledge of the milk producers
of $2 million to the President's 1072 campaign Avas in fact being re-
affirmed.
Also. T should add that. Avhereas prior to this time that T found this
itinerary, agenda, in my home, T had been inuler the impression that
IMr. Cliotiuer and /or ^Nfr. Xolsoii had adA'ised mo tliat thov had been
asked by Mr. Ehi-li'-hman to meet Avith me.
It is noAV possible that I liad been advised, or Avas advised by Mr.
Ehrlichman to meet Avith them, and I Avas not so advised by ^Nlr. Choti-
ner and Mr. Nelson. But, it could Iuiat been either oi- both. But^ I
Avanted to make it clear that that could have been made knoAvn to me
at the 5:80 mooting by Mr. Ehrlichman : and perhaps that was not so
stated at the later meeting that evening.
Mr. Wi.iTZ. 1 )Ut. in any event. Avliother from Afr. Cliotiner. or Avhethor
directly from Mr. Ehrlicliman. it is youi" i>resent recollection that
the meeting after the Tvei)ublican dinner Avitli A[r. Chotiner and Mr.
Nelson Avas arranged and took place at the request of Mr. Ehrlichman.
Mr. Kalmbac'ii. Yes.
Mr. Wr.nz. And the matters that took place at that meeting, the
matters discussed were as you testified here l>eforc, other than the facts
as you corrected them today.
7811
Mr. Kalmbach. Yes.
Mr. Weitz. And I believe you also testified that the next day you
met with Mr. Ehrlichman for lunch and that aside, and apait from
the others with whom you met, you told Mr. Ehrlichman that you had
met with Mr. Chotiner and Mr. Nelson, and the pledge had been
reaffirmed.
Mr. Kalmbach. That is correct, and my recollection is that I ad-
vised Mr. Ehrlichman of this reaffirmation in an aside, either immedi-
ately before, or immediately after my luncheon meeting with Mr.
Ehrlichman, which was at 1 o'clock in the afternoon of March 25,
1971.
Mr. Weitz. Mr. Sanders?
Mr. Sanders. You have testified you had discussed with Mr. Halde-
man the $100,000 contribution by Mr. Semer in advance of
Mr. Kalmbach. That is correct.
Mr, Saxdeks. I don't Ix^lieve you told us, or gave us some concept
of how long before the delivery that occurred, or the circumstances
of your conversation with him.
Mr. Kalmbach. I think, Mr. Sanders, that my diaries indicate that
I talked to a number of people, including Mr: Haldeman, following
my initial contact with Mr. Semer in the spring of 1969 ; and those
contacts were continuous up to the date that I actually received the
contribution, which was on August 2, 1969.
Mr. Sanders. The three points of interest, three objectives of Mr.
Semer, as expressed to you, then, had been made known to you by
Semer in advance of the time of the delivery of the mone}^?
Mr. Kalmbach. Yes, sir; I think that my notes so reflect that fact.
Mr. Sanders. And I believe you indicated that Mr. Haldeman was
made aware of these objectives of Mr. Semer, and that he assented to
appointments being scheduled for the presentation of those objectives.
Mr. Kalmbach. I want to make it clear, Mr. Sanders, that when I
spoke to Mr. Haldeman about my contact and contacts with Mr. Semer
relative to this contribution by the milk producers, that I made it
clear to Mr. Haldeman that Mr. Semer had been referred to me by At-
torney General Mitchell; aiid fhat my purpose in speaking to Mr.
Haldeman was to get his authoi^ization for me to : First, receive this
contribution from this contributor, the milk producers, through Mr.
Semer, their attorney ; and second, that in return for that contribution
it would be possible for me to arrange for several appointments with
various people within the White House in order for Mr. Semer and the
attorneys for the milk producers to meet with the White House of-
ficials to present a case on their behalf.
I never at any time indicated to Mr. Haldeman, as I remember it,
that the quid pro quo for the receipt of this contribution would be the
attainment of the three stated objectives.
Mr. Sanders. Did Mr. Haldeman ever give you any understanding
that their objectives would be met ?
Mr. Kalmbach. No, he did not.
Mr. Sanders. Did Mr. Ehrlichman ever give you any understanding
in advance of the Semer delivery that the objectives would be met?
Mr. Kalmbach. No; other than Mr. Haldeman indicated to me it
would be — that the objective of Mr. Semer meeting with various people
within the White House would be met.
Mr. Sanders. But not that their ultimate objectives would be.
7812
Mr. Kalmbach. That is correct.
Mr. Sanders. Did any White House official give you an understand-
ing that their ultimate objectives would be met 'i
Mr. Kalmbach. No, sir.
Mr. Weitz. I take it all of these questions apply to 1969, or prior
to the receipt of the contribution ?
Mr. Sanders. Yes. Did you have any written communications with.
anyone in the White House concerning the anticipated receipt of this
contribution ?
Mr. Kalmbach. I don't believe I did, Mr. Sanders; I have no rec-
ollection of any such written memorandums or letters.
However, mj^ diaries, I tliink, clearly reflect the number of people,
the number of times I raised the matter of Mr. Semer, and the prospec-
tive contribution by his clients, which was, in fact, received in earlv
August of 1969.
Mr. Sanders. Did you in any way represent to Semer at any time
that his ultimate objectives would be met ?
Mr. Kalmbach. I did not. I have no recollection of ever doing so.
I think that I probably indicated to him that I miderstood tlie objec-
tive ; but the only thing that I represented firmly to Mr. Semer, as I
remember, was that, yes, he would be able to meet with one or more of
the people in the administration.
Mr. Sanders. Did you gain any understanding from anyone in the
White House that if this contribution did not materialize, that the
dairy producers would not hn ve an opportunity to have any audience
in the White House ?
Mr. Kalmbach. I did not.
Mr. Sanders. Now, with respect to the events of March 23, 1971, in
your conversation with Mr. Ehrlichman of the 23d, or at 5 :30 p.m.
on the 24th, you have a recollection that he told you the price increase
was to be announced on March 25 ?
Mr. Kalmbach. I do not, Mr. Sanders.
Mr. Sanders. You think it was not until 11 o'clock, the 11 o'clock
meeting with Nelson and Chotiner that you learned of that price
increase ?
Mr. Kalmbach. Yes, sir.
Mr. Sanders. But, you did tell us then, something may have been
said to you by Mr. Ehrlichman about reaffirmation to be made to you
at the 11 o'clock meeting.
Mr. Kalmbach. That is correct, and it would be my understanding
and my very best recollection, that at the 5 :30 meeting with Mr.
Ehrlichman, he advised me that I would be meeting with INIr. Chotiner
and Mr, Nelson later that evening, at which time a reaffirmation of the
pledge would be received.
Mr. Sanders. So that to the best of your recollection. Mr. Ehrlich-
man did not place the reaffirmation in the context of the anticipated
price increase.
Mr. Kalmbach, I do not haA-e that recollection; no, sir.
Mr. Sanders. Did you gain any understanding from Mr. Ehrlich-
man, either on the 23d or the 24th, as to why a reaffirmation was being
called for at this point in time ?
Mr. Kalmbach. Excuse me, INIr. Sanders, would you repeat that
question?
7813
Mr. Sanders, Did you gain any understanding from Mr. Ehrlicli-
man on the 23d or 24th as to wliy, then, a reaffirmation was to be made,
or was being sought at tliis point in time ?
Mr. Kalmbach. Not from Mr. Ehrlichman, at least I do not so
recall.
Mr. Sanders. Is it your recollection that in mentioning to you the
anticipated reaffinnation, that Mr. Ehrlichman put it in terms of a
pledge to be made b}^ representatives of the dairj^ producers ? And the
emphasis is on the word "pledge."
]Mr. Kalmbach. I think my memory is that it was in the sense of a
reaffirmation of a pledge, of a prior pledge.
]Mr. Sanders. Was it the intention that moneys perhaps already
paid would be included within that, or there was that much money still
due?
Mr. Kalmbach. It would be my recollection that it was a reaffirma-
tion of an earlier pledge of $2 million, of a $2 million contribution to
the President's 1972 campaign ; and it would be my undei'standing that
it was simply a reaffirmation of the pledge and any funds that had
been theretofore received by the campaign would be credited against
that pledge.
Mr. Sanders. Now, what I don't understand is whether Mr. Ehrlich-
man on the 23d and 24th is telling you, that what is to occur at your
evening meeting with Mr. Chotiner and Mr. Nelson is that you are
to seek this reaffirmation ; or Avhether he already knows that it has been
intended, and is merely to be announced to you.
Mr. Kalmbach. INIr. Sanders, my recollection is that it was my clear
impression that I Avas not to seek a reaffirmation, but that I would be
supplied such a reaffirmation.
INIr. Sanders. Then, it appeared to you that he already knew that
was to be accomplished.
Mr. Kalmbach. Yes, sir; that would be my recollection.
ISIr. Sanders. We have been told. I believe, by witnesses other than
you, that when Nelson and Chotinei- met on the night of the 24th they
weren't able to get in contact with you right away; and when they
finally did they found that you had perhaps already retired for the
night. Is that correct ?
Mr. Kalmbach. I don't haye a clear memory on that. My memory is
that I did meet them in my room at the Madison Hotel.
Mr. Sanders. Do you remember whether you had already gone to
bed before they came ?
Mr. Kalmbach. I'm not certain of that, Mr. Sanders, but I do have
a clear recollection of meeting them. Whether or not I had retired or
not, I just don't have a clear recollection.
Mr. Sanders. Well, before 11 o'clock, did you have an understanding
where the meeting was to be ?
Mr. IvALivniACH. Yes, I did.
Mr. SANDi.:jis. Where ?
Mr. Kalmbach. In my room at the IMadison.
Mr. Sanders. In your conversation with Nelson and Chotiner, and
in connection with some mention by them, as you told us, of the price
increase to be announced the next day, did it appear to you that that
announcement was already a foregone conclusion, that.it was to occur?
Mr. Kalmbach. Yes.
7814
Mr. Sanders. Did it appear to you that it was in any way reversible ?
Mr. Kalmbach. It did not.
Mr. Sanders. Did it appear to you that if the reaffirmation was not
made, that the price annoiuicement would not be made ?
Mr. Kalmbach. It did not. It appeai*ed to me. Mr. Sanders, that the
decision had been made as to tlie announcement the following- clay of
the price increase; and that the purpose of my meetino- with Mr.
Chotiner and jVIr. Nelson was to receive a reaffirmation of the earlier
pledge. And that I would be the one for them to see, inasmuch as I was
the principal fundraiser for the 1972 campaiorn at that point in time.
Mr. Sanders. Do you have any concept of what might have occurred
if the reaffirmation had not materialized that night ?
ISIr. Kalmbach. No. sir; I do not, although it is my impression that
I felt that I was simply to be advised of the reaffirmation.
Mr. Sanders. Now, you have told us during previous testimony that
the announcement — I believe the terminology was "linked'' to the
reaffirmation.
Mr. Kalmbach. That is correct, I so understood that it would be.
Mr. Sanders. What do you mean by "linked-', if the aimouncement
was already a foregone conclusion and was not reversible, did you mean
to say that the reaffirmation was conditioned upon the amiouncement of
the increase?
Mr. Kalmbach. No, Mr. Sanders, my understanding was, as I think
I testified, was that when I met with Mr. Nelson and ]Mr. Chotiner,
that they indicated that the milk-support decision would be — ^they
understood that the milk-support decision would be announced the
following day, and in view of that fact they were in fact reaffirming
the pledge by the milk producere to the President's 1972 campaign.
That is what I meant by the fact that the two matters were in fact
linked.
Mr. Sanders. So that you had no understanding with Haldeman,
Ehrlichman, Nelson, Chotiner, or anyone that the reaffirmation of this
so-called pledge was being made in any way as a condition of the an-
nouncement of the price increase ?
Mr. Kalmbach. I did not so understand.
Mr. Sanders. I have no further questions.
Mr. Weitz. iMr. Kalmbacli, you testified that you received reaffirma-
tion but did not seek it out that night.
IMr. Kalmbach. That is correct.
Mr. Weitz. It was your understanding that the pledge had, in fact,
been reaffirmed prior to that evening, your evening meeting; is that
correct ?
ISIr. Kalmbach. It was my impression that it had been.
Mr. Weitz. So, whether or not there was a link between the price
support and the reaffirmation of the pledge, it Avould not liaA^e been
necessarily evident by the fact that the price-support decision was no
longer conditional at 11 o'clock that evening.
Mr. Kalmbach. Excuse me, Mr. Weitz, could you restate that ques-
tion?
Mr. Weitz. Your understanding was that the price-support decision
was to be announced the next day, regardless of what occurred late
that evening in your room ?
Mr. Kalmbach. That is right.
7815
Mr. DoRSEN. Mr. Kalmbach, it was your understanding that the
price decision was going to be announced on the 25th, and I gather it
must be understood, in the light of your understanding, that the pledge
had already been reaffirmed prior to the 11 p.m. meeting, is that
correct ?
Mr. Kalsibach. I think, Mr. Dorsen, that my understanding was
simply, as I stated, that the price support would be announced the
next day ; and that in view of that fact, that the pledge to the Presi-
dent's 1972 campaign was being reaffirmed to me as a principal fund-
raiser.
Mr. Dorset. But it was also your understanding that the pledge
had already been reaffirmed at an earlier time, prior to the 11 p.m.
meeting.
Mr. Kalmbach. Well, it was my impression that they were simply
advising me of something that they probably had indicated to someone
else earlier.
Mr. DoRSEN. So, that essentially you were going to be a witness
to the reaffirmation in your capacity as the major fundraiser.
Mr. Ivalmbacii. I so understood, Mr. Dorsen, that they wanted —
it was my impression that the reason I was being advised of this is
that they wanted the milk producers to tell me that such a pledge was
in fact being reaffirmed, yes.
Mr. DoRSEN. I have no further questions.
Mr. ICalmbach. Thank you very much.
[Whereupon, at 9 :55 a.m., the hearing in the above-entitled matter
was adjourned.]
7816
Kalmbach Exhibit No. 3
Personal and confidential April 11, 1969.
Hon. Maurice H. Stans,
Watergate East Apartments,
Washington, B.C.
Dear Maurie : In talking with Jack Mulcahy this morning, he told me that
he would be making a contribution of $25,000 to the Victory Dinner and has
committed himself to contributing $100,000 to the 1970 campaign.
After my talk with Jack, I 'talked to Jerry Milbank and advised him of the
$25,000 and $100,000 amounts and of Jacli's comments. Jerry is going to talk to
him and try to get some idea as to the timing of these contributions.
I received your wire and will hand deliver a letter to you relative to our
finances when I'm back in Washington on May 7th for the Dinner. Jerry asked
that I see if you could possibly see the two of us sometime early Wednesday
morning. May 7th. He Avould like to tallc to you about several things and I feel
that all points could be covered easily within fifteen to thirty minutes.
Best regards,
Herbert W. Kalmbach.
HWK: mrc
Kalmbach Exhibit No. 4
itinerary/ AGENDA
Wednesday, March 2Jt, 1911
Depart LAX via UAL 52, 8 :30 a.m., arrive Dulles, 4 :15 p.m.
iStay at the Madison Hotel, 15th and M Sts., N.W., 202/483-6400.
P/U by WH auto
i5 :30 p.m. — Meeting w/John Ehrlichman in his oflSce.
6 :30 p.m. — Meeting w/Dan Hofgren at Washington Hilton.
8:00 p.m. — Dinner (RFC; meeting first at Suite No. P/1 — Gus Levy's name).
ill :00 p.m. — After-dinner meeting (to be scheduled) .
Thursday, March 25, 1911
8 :30 a.m. — Meeting in coffee shop of Madison w/Tom Evans.
9 :00 a.m.^ — -B'fast. meeting at the Madison with John Rollins.
11 :(X) a.m. — Meeting with Gordon Strachan and Bob Haldeman in Haldeman's
oflBce at the WH.
1 :00 p.m. — Luncheon meeting in Ehrlichman's oflSce with Ehrlichman, Milbank
and George Murphy.
3:30 p.m. — Meeting with P/M General Blunt in the Post Master General's
Oflice. -
4:00 p.m.— Meeting in Rm. 6802 of the Department of Commerce with M. Stans
and other business people.
6 :00 p.m. — At the Madison (changing for dinner) .
7 :30 p.m.— Dinner at the WH.
11 :00 p.m. — Back to the Madison.
Friday, March 26, 1911
8 :30 a.m. — Breakfast meeting at the Watergate with M. Stans.
10 :00 a.m. — At the WH — probably meeting with Mr. Finch.
12 :00 to 3 :00 p.m. — A/F No. 1 leaves Andrews AFB with one stoiJ — arrives at
El Toro. Mrs. Kalmbach to p/u.
Saturday, March 21, 1911
10 :00 a.m.— Golf at LACC w/Mark A. Soden and Don Martin.
HWK/ah
3/24/71
7817
AFFIDAVITS
AFFIDAVIT OF JOSEPH BAROODY
I, JOSEPH BAROODY, being duly sworn, hereby depose
and say:
Since 1970 I have been employed in the public affairs
consulting firm of Wagner and Baroody, 1100 Seventeenth Street,
N.W. , Suite 712, Washington, D.C. The consulting services which
my firm renders consist of representing clients affected by
Federal Government actions.
From October, 197E, to January 1972, my firm was retained
for consulting services by the Associated Milk Producers, Incorpo-
rated for a fee of $2,500 per month. This consulting relationship
was initiated with the assistance of the law firm of Reeves and
Harrison of Washington, D.C, of which Marion Harrison, Esq. is
a partner. I have met Mr. Marion Harrison on two or three occa-
sions. Mr. Charles Colson, former special assistant to the
President of the United States, was aware that my firm represented
AMPI. It was my understanding that my firm was expected to look
for ways in which we could advance the interests of AMPI. At no
time, however, was I - or was any other person in my firm - con-
nected in any way with, or aware of, any discussions between
representatives of AMPI and the Administration concerning either
milk price supports or possible contributions to the 1972 Presi-
dential Campaign Fund.
30-337 O - 74 - pt. 17 - 19
7818
-2-
I have bii-r. psrsor.ally aiJualnti-J v;ivi; Mr. Charlej
Colsori for- several yeai'3. Ir; zhe li:zz-ir part o:^ A-;-:u.;t; ■ji- z'::i
i'lrjc pai-": of September, 1971, M-". Oolson teli-phor.ed ne aril
told lae ciia:; zh'i '.■IVA:--; House hai ar. ur^t-n" r.^t■^i I'jr jii.j/j aaJ
hs B.':)V.-j'l n:e to lend hlrn this amount for a 3hjrc p-;-r.'.oi of zl'.:.=i.
He did not tel, l r;i^ v/hy the money was needed. I *;-,';n^red this
sum. together fron .rr.y personal funds ($1,500 t5 .?2,OJ0) ani fro.T.
funds ($3,000 to $j,500) which had previously oeer: ^Ivin co rr.;
by Mr. C'ol3o.'';'3 office to use in preparing televLslo.n responses
to a C'o.T.'.von Cause ttate.r.ent on ending the war in Southeast .43la.
The next day I put 15,000 in an unmarked envelope arid tooic it to
Mr. Colson's office in the Executive Office BuLidlng, Mr. Colsjn
told i:.e to take the money to an office and give ic co a person
v;ho:!i I v;ould find t.here. I v;ent co the office I had \ji:ci\ told to
go :;o and gave uiie Lioney to a laan wh...:.! I did h-jX, •-.n-jW but v;!.o.ii
I n^w l.vii^,-; to iia-/^ o;^en S^;!! ILi'„5h, Ji^.
Tv;o or three v;eeks afterv;ard3, I received another tele-
phone call frora Mr. Colson's office. I v;as told that I could be
repaid by jioi.ng to Mr. George Webster, Esq., an attorney whose
office v;as on Jefferson Place, N.W., in VJashlngton, D.C. At the
time I was v/holly unaware that Mr. V/ebster v/as en^a^ed in fund
raising activities in connection with the President's re-election
effort. Soon after receiving the call, I went to Mr. Webster's
7819
-3-
office. He was not In. I identified myself to a receptionist
who went to a nearby desk, opened a drawer and pulled out an
unmarked envelope which she handed to me. The envelope con-
tained $5,000 in cash.
In June of 1973, Mr. Colson called me on the telephone
and told me that it appeared that the $5,000 might have been used
to finance the September 1971 break-in ©f the offices of Dr. Lewis
Fielding, the psychiatrist of Dr. Daniel Ellsberg. The purpose
of Mr. Colson' s call was to establish the date of the loan so as
to determine whether, in fact, the funds could have been used for
that purpose.
In the Spring of 1972 I received $22,000 from Mr. Colson's
office to place advertisements in several major newspapers through-
out the United States supporting President Nixon's military
actions in Southeast Asia. Subsequently, the advertising pro-
ject was suspended and this m.oney was returned by me to Mr.
Colson's office. Thereafter, it was decided that the advertise-
ments would be placed on a smaller scale and I was given approxi-
mately $6,800 with which to defray the costs of the reduced
program.
The instances referred to previously herein are the only
ones in which I have received White House funds.
From August of 1971 to the Spring of 1972, I worked with
7820
-4-
a oommitt'^e called "Citizens for a New Prosperity". Its function
was to place advertislments and hold press oonCevences to. build
support for the occnoniic policies er.'ibodied in the Economic Jtabi-
lizati^n A^t and Phases I and II. The Cormnittee was blpai'tlsan;
its tv/o principal officers were Hobart Lev/is and former Treasury
Secretary ?ov;ler.
DATE: /A^^. ^r /fPy SIGNATURE il^^ /,-is^.^r.^^
^ ^ Tv'j^seph baroodifJ^
Subscribed and sworn to before me this JlS day of ^jf-U-^K^^ , 197^.
DATE : ApIA. /^. / -7 ^^^ AC_
Notary Public
I Notarv Public
7821
UNITED STATES SENATE
SELECT COMMITTEE ON
PRESIDENTIAL CAMPAIGN ACTIVITIES
AFFIDAVIT
I Joe Bell of 500 N. W. 30th Street, Fort Worth, Texas
depose and say as follows.
Since //flft^<:-H J 97c , I have been employed as a
pilot for the Tandy Corporation. From / /Ii/a/^$ /" ■/'^ 7/j
until ^/ T/^fi/ , /Ty^ I was employed by Associated Milk Producers
(AMPI) to pilot their aircraft which included a Sabre Liner
Model 60 (license number N961R).
In the normal course of business myself and other
AMPI pilots maintained daily aircraft flight reports.
I have examined and initialed the attached copies of the
daily aircraft flight report (Attachment A) for the Sabre Liner,
furnished to me by the U. S. Senate Select Committee on
Presidential Campaign Activities. Also, I have initialed
and attached true copies of ray perdonal flight log (Attachment
B) for the corresponding dates.
To the best of my knowledge, the attached AI^IPI daily
aircraft flight reports are tixie and accurate records of the
points of origination and destination for the flights undertaken
in the Sabre Liner for those dates. However, they may not
reflect all intermediate stops on such flights. To the
extend that my personal flight logs reflect intermediate
stops for such flights, my logs are true and accurate records
of such stops.
7822
For example, on March 12, 1971- the AMPI daily flight
report (included in Attachment A) shows that the company
Sabre Liner which I piloted on that day flew from San Antonio
to Washington to San Antonio. My personal flightlog for
that particular date (included in Attachment B) indicates
that I piloted the plane from San Antonio to Austin to
Washington to Little Rock to Austin to San Antonio. Thus,
on March 12 the company Sabre Liner flew from San Antonio
to Washington with an intermediate stop in Austin and
returned from Washington to San Antonio with intermediate
stops in Little Rock and Austin.
, There are a couple of minor exceptions noted and Initialled by
me In the attachments.
Joe Bell
Kv Cc:-
7823
ASSOCIATED MILK PRODUCERS, INC.
DAILY AIRCHAFT FUGHT REPORT
MAKE OF AIRPLANE ''^>/? O A ^ MODEL 6-(C> LICENSE NO. N / 1 ■ I "^ DATE ^ ~ S "* ]?"/
^f'lTgmTj
OEpIVtURE
v"~W
^
y=f
=^
=1
t'aCH time
,aJ"'c.
' OIL TOO OK
FLOwli
pass!'
NO.
ARRIVAL
OerARTURC a:)PIVAL
OUT
-.5. Tt«.
I. EN«. R. CNC.
MtLE!
1.
Pc/9
i^iT
--?.->•. i
>v;y
X
^
7i'i
3f '
2.
/-;r
yiTT
ri7-^
1
•It 7
V ''
3.
4.
S.
6.
>
LIST PASSENGERS AND "X" FLIGHTS MADE
DAILY TOTALS
,11]
'h'-
'-.^-JaT"' "
2
3
TIME - HOURS AND TENTHS OF HOURS
S
fi
2
5
3
6
AIRCRAFT
.EFTEHS.
R.CWTE.C
OIL^^'of
II.5..CT,:
2
S
3
TIME BnoUOHT
FORWARD
■?->'.—
•? ^'. )
-p-5-,Z
■ ■■ ■
2^
_3
TODAY'S TIME
^' c
2
3
TOTAL TIME
■ -r
■'. ■( '
' ■ '
5
6
.
IMSTRUMEMT: NIGHT:
DHNI CHECK: HO. I . MO. 2
!M ' :w, /|/t .^' /(/"
/'I .'-^
M
MAKE OF AIRPLANE
ASSOCIATED MILK PRODUCERS, INC.
DAILY AIRCRAFT FLIGHT IJEPORT
^..-•'' ' i~ ( MODEL i' C' LICENSE NO. N /(-'/-.
DATE \
"':"'
der'aVtSre
~ po7nt or
TIM
^""arrival"
■ TACM
rif—
"rJiic;.
,J*,%7
u°cViv.%°:..
r^otl'
mI"',
1.
-^/''l'
/;<>7-
yWf.O
5>7.i
■!
/5^
2.
V':n
.-: /y r
i>/..'7
:^><.<i
->
?
3.
4.
5.
LIST
PASSENGERS AND
"X" FLIGHTS MADE DAILY TOTALS
/
^-7
l"
2
Y
J-
2
_3
TIME - HOURS AND TENTHS OF HOURS
4
S
1
2
:!-
2
S
3
<>
AlPC-AFT
UEFTEHO.
-ICHTE^C.
.,i«"..
Sl«t
4
S
'■*"-
1
_2^
s"
f
2
3
TIKE BROUGHT
FORWARD
?w
s'^S'6
1--^^ r
4
S
f,
1
4
2^
i
2
•i
3
TODAY'S TIME
/. f
V '/
V..-f
1
2
1
2
3
->
-*
A
4.
^.
!_§
L._
T
OTAL TIU
E
^'
^4
1
_i
, '^,'j v
jjj
L^
-^
NSTRUMCNT:
OMNI CHECK: NO. I
it^fC
(. •' '■
•.' A /; ^
7824
*„.... ^He../^k^:..tV
r^i.sr
ASSOCIATED KIIK PRODUCERS, INC
DAILY AinCnAFT FUGHT RnPOnT
Moot
t^
y-_Zy-.'l-- LICKHSg NO. H //- / /'. OATE /- •' '■ .' .
jjjl 5_^4—
^yfj
fj£c.z-
•iT P»ltENCERS ANO "X" FLIGHTS MADE
M
I -J
•'
^1
I's-
' ^ 2
.*-
.^v*
Hoqo: _
DAILY TOTALS , /
TIME - HOURS ANO TENTHS OF HOUDS
TODAY'S TIME
TOTAL TIME
Qlb
■::"^- 1
n.(
vfcL
^j^LL
f./
•TV. -?-
^. ;
t/;.<i.
IMSTRUMENT:
OUNI CHECK: NO. I
(?i>c:r-'/UJ-^ 1)
hJ-/^
MAKE OF AIRPLANE
-/r
ASSOCIATED MILK PRODUCtkS, INC.
DAILY AIRCRAFT FUGHT REPORT
MODEL /- ( LICENSE NO. K
l^
""-LV.^
oeSlVTSnE
»'
^i^-lL
^^?
.-r„vo~^'"
T-ȣt'.Ii!:'i._
''^^
7ce
_l'l'J!-l"_
ivi'iii
-os;
^i^*"
,°_''
1.
/.,.
r>-'r- ■
/ •/ •
^ '
-.
2.
3.
-
4.
5.
6.
LIST PASSENGERS ANO "X" FLIGHTS MADE
DAILY TOTALS
< S 6
i-
J.
s
3_
TIME - HOURS ANO TENTHS OF HO'J
<S
V
2.
Is
6
.„cr,.rT
.C.T.MC.
R.CHTCN..
oit""'«
,»j.i:
2
i
TIMC BROUGHT
FORttA,RO
1. ' :
( '■ '■ .
/ ' '■ '
■-fM*
S
6
i^^f
"s
_3
6
TOOAT-S TIME
. ' '
ilMl
2
S
i
3rAL TIM
E
i
J
/
--I
:i'._
..
INSTRUMFNT:
OMNI CHCCK: NO. I
<i:ia
7825
A5S0tIAT!D MILIC KRODUr r.';S, INC.
DAILY AtnCRA^T rLIGllT rJCIORT
oor;i. ' . LICENSE no. H / /• ^ date •^- ■ / ^ ,-
LT.^
^/.iA^_
Ll-T PAtS^CHrruS AMD "X" FLIGHTS HADE
DAILY TOTALS
mr
.k:^»iI
TODAY'S TIME
TOTAL TIME
TIME - nouns AHD TENTHS OF HOURS
-.■■/.
/■•■///
IHSTRUMEHT:
OMNI CHECK: HO. 1
/- /C.
/',',■( 1 ) '
"' " ^ /olxhi
' yX. OF Air<PLANE
ASSOCIATED MILK PRODUCERS, INC.
DAILY AIRCItAFT FUGKT REPORT
MODEL t • f LICENSE NO. N V_;
,a/
,D "X" FLIGHTS MACE
DAILY TOTALS
TODAY'S TIME
TIME - HOURS AND TENTHS OF MOUKS
TOTAL TIME
OMIII CHECK: HO,
>\ S
■I ■■./
7826
•AKi: or /.iJir'i
: '■ I S//
4 I License MO. W V'«'" / ' . -r ''^/^/}' /
t\V,ov,t.\;.o M!iK PRO.Tjcirs, inc.
■' .1 .' /' moocl
_f I !
'■ ! /./r"
.//
. U! J,
•' / ■■ ■
or.--..,
•>
_, —
1
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4 \i\ !l
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M:
TlMS - Hoijo;
— — -l
Ii/^a:;uZ.(.._„_1
. irr^gMENf;
-^/A-
./'-"
7827
^,
Date
AIRCRAFT
Flight
No.
FroYi)
To
Dura-
tion
of Trip
Pilot In
Com-
mand
Co-Pllot
Pilot
Time
Day
ld«nt.
No.
Category
Type
CUss
^A
N-^i/F
5TD
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or-
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2.9
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II
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fr.
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me to Date
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Carry Totali Forward
V^
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.1.4
INSTRUMENT
Dual Instruction
Croii
Country
Solo
REMARKS
Actual
Hood
Link
Checl
6l>en
Rec'd
(Instructor Certification. Maneuvers, Damage to Aircraft, etc.)
Pi-f
y-T-
O.J
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The Record on this Page Is Certified Correct
Pilots Signature
to Top of Next Page |
7828
INSTRUMENT
Dual l.litru.tt.).!
Cr>il
Country
Solo
R£M ^«KS
ActudI
Hood
Link
Cnsck
Given
Rec'd
^.-C
r.jT
0. ?
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I.& 1
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J~e^^y <?tff^. ,a^T TV^^if .£^£ye/^
:
i The Record on thii Pj,. is Certified Correct
Tip of NmI Pige
Pilofs Si^njlu
7829
Oa<e
19//..
AIRCRAFT
Flight
• No.
From
To
Dura-
tion
of Trip
Pilot in
Com.
mand
Co-Pilol
Pilot
Time
Day
Ident.
No.
Category
Type
Cla»
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J-hT
r.rf-:rur-rc
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ACC
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7830
a
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Flight
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tion
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7831
Date
19.7/.
AIRCRAFT
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to Top of Ne«t Pnoe
7832
UNITED STATES SENATE SELECT COMMITTEE ON PRESIDENTIAL CAMPAIGN ACTIVITIES
AFFIDAVIT
I, Monroe Bethke, being duly sworn hereby dispose and say the following:
I ana President of the Citizens National Bank in Austin, Texas where I have
been employed since April 1, 1970.
The attached copies which are initialed by me are true and exact copies of the
Safe Deposit Box rental and entrance cards of boxes 998 and 835. The
originals are being retained in our permanent safe deposit box files.
The State of Texas
BEFORE ME, Marthella Flowers,
The County of Travis
Notary Public, in and for Travis
County, Texas, on this day personally appeared Monroe Bethke known to me
to be the person whose name is subscribed to the foregoing instrument and
acknowledged to me that he executed the same for the purposes and
consideration therein expressed.
Given under my hand and seal of office, this 7th day of February, A. D. , 1974.
Travis County, Texas
7833
Renter JACOBSEN, SJOflOC Jake _ V ^ . . Box No 93«
Deputy ..®imXMncKXXX_Ix3uise__Crow Hent^, -p- (§i-«7?S> \
nApn»y'if75^./-/t- ,v -^UJu^rJSF^t^ deleted i>er Due in \
SIGNATURE AND RECEIPT OF RENTER
In Oie v.uli. of CITIZENS NATIONAL BANK OF AUSTIN. Austin, Teias
1 h«.e ihis d«y lented Sile D«poii< Box No. .nibj.i:! to th. rules «nd c,
:ed in ihc Safe Deposit
ndilions listed belo» and/'oi tho
•ce« of ch.s iosiitution. 1 heteby consent and agiee to these rules and conditions. I have also received ?__keys to said boa. I lurthet agree lo
pay lor the use of this boi annually in advance, the rental specified hereon, until I have returned the keys to said institution. In event of losinc the
keys. 1 agree to pay the expanse of replacing the keys and any repairs necessitated by forceful opening of the Safe Deposit Door,
S.\FETY DEPOSIT ItOX RENTAL RUI.E,S AND CONDITIONS
1. It IS one of the condiii.ins of the renting of said box that said institution shall in no event be liable lor any loss Irom such box. through negli-
gence, lor an amount in excess of ihtee hundre/times the agreed aniual rental.
2. Thai said insiiluiion shall in no event be liable lor any loss of money, jevelry, or bearer securities placed in said box.
3. nat evidence tending to prove that secoritres, money, valuables or other articles were leli in said box upon rhe last entry by the lessee ot
customer or his authonted agent, and that the s^me wcte tound mfssing upon a subsequent entry, shall not be suffi(;i£nt to raise a presumption that the
same were lost by any negligence or wrong doing for which said institution is responsible or pur upon said institution the burden of proof that such
alleged loss was not the fault of said institution.
4. Tlie lessee stipulates that he has examined the location of the box and accepts same and the location theteof as safe.
">. It ia further sripulated that the rental reserve is for annual rent payable in advance annually.
6. In the event the lessee shall not pay the rent promptly when due, such lease shall be regarded is tcrminai-d and saul ms
contents of such box and shall be Iu6le lot no loss '' ' ' ' ' ' ■
ihisp
7. In the ev
rent reserve^ th
; foi
the le
shall fail
t thereof.
shall be i
en du
ly upon l6 days elapsing without the said rent being paid, enter
,-id box and take o .1 tke contents theteof, and sell ihe same at public
auction at said institution, bv giving JO days' notice thereof by post-
ing in the lobby of said institution and by mailing to the last adjr-ss
of rhe lessee known ro the president of said institution, selling said
contents of said box and alter the rental chaiges and any other claims
oi charges the said insiilulion may Save against the lessee have been
paid by letaining by said institution liom tke proceeds ol said sale if
CaJ il^sulficienr ro repay the same, and ihe balance, if any, shall be
paid to the lessee or any other person legally entitled therero.
I have read the forecoing and
hi^R^'ai 'RentVr'
Addraa'a
NO CHARGE - FORMER DIRECTOR
DATE PAID
AMOUNT
PAID
PAID TO
=A
^
30-337 O - 74 - pt. 17 - 20
7834
APPOINTMENT OF DEPUTY
Tune 19.
I hereby dn
Mrs^ Eula Q. Bulkley ^
hkh may her««flcr be rcnte<J by me, until Ihii authority is revolted by i
7^
/^.^/'^ .-^ c^'c^Uc
Signature o( Depu
Signature of Deputy
Sienature nf Kent*
_Keys retiunetl
_19
I hereby certify tliut uU the ji;ii»l-is uiid utbt-r property
placed within iny Deposit Itoi, in puisii;iiice of the contract
above citeil have bet-ii duly nnd proi)C-rly withdrnwo thei
from ami are in the owner's full possession, and snid Ba^i
discharged from nil liability In respect thereto.
7835
DEPUTY
3X NO.X_Z_
RENTAL $ .
r^/^7j/^-^%
^.AM^^JMc-^
/-p?7-7>^
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i^X-^.^<£^^.
'&-
ENTRANCE RECORD
■y^.:.
RENTER
7836
DEPUTY
.,- ??/-^
RENTAL S .
7837
Deputy RonViL.
D.'piity.
-Dlu-
SIGXATl'KE Ai\[> RECf;U'T OF RENTER
_36_5_
-0-
(o. .53)
(;. A.. Va.ihs of cnrIZEt-;.'j national bank of AOSTIN, Austiu, Texsu
1 0.1VS liiis .iu). imud Sals Diposi! Sol No. 865 sgbigel lo the tules anj condilions lisied -.Mon and,
ir«a aF tills iniufjtion. I hereby con-i«nt and agtee to these tules and conditions. 1 have also teceived —
piy lot the iise ol this bo« annually in .idv.tnce, the tcnlal specified heieon, until I hjve tcfitned the ki:ys t<j said institution
k{yj, 1 ajtse to pay the expense of upKcing the keys and any lepaits necessitated by foiceful opening o.' th..- S>(e Deposit Oo.
SAIGXy DEl'OSIT liOX RUNTAL RUt.nS AND COiVDITtONS
:se p^::tt:d in ■>
keys to Jiaid box. I t
1. It is one of the conditions of the tenting of said box that .said n
lence, foi an amount in cx.:css of thcee hiindied times ihe a«tecd annual
I. That said institution siial! in no event be liable foi any lo:3 of iiK
5. ITiat evidence tendinjj to ptove th.it seCJtities, money, yatuabi
t be li!
. thtouah nejii.
lUeted loss was not the fault of s.iid in;
4. The lessee stipulates that he has
). I: is fufthet stipulated that the ten
shall in nc
!t atlicles
jubsejuent entry, shall no; be so!lit;ier.,: to iiis! a piesu.tipiiyc that the
15 (csponsible ot put upon said institution the butdeit ol pt.>ol that such
nd the locati'in theteof a
i.:ed in s.-.ld box.
__ .__d box up in the 1
ng up.jn a jubseijuent itntty, shall no; be suffit;'
ally.
""oi't'
3t addtess
';^l
;4,rf bv f-',M,i"in<"b/ S.U.J in^Twun'.f! fn.n fh^ oficecds of said sale if
fiJ, if juihcijoi w rs-p-ay ih.- s.im«. and (h< balunc«, if ar/. shall be
pifi (9 tlie lessee or any othsc p«c:i4it l««jlly entitled thereto.
r;/ 0, ./
'^IXl-^
208_ We s tgat3 Bid 2.. j.. Aun_t_u\_
MO CHAK.GE -
Director
DATS PAID
A.MO'JMT .
PAID J
PAID TO 1
_.._,
1
1
1
i
1
1
1
1
1
i
1
1
1
1
__^1
1
t!
|l
il
[ £_
7838
RENTER DEPUTY
Jake Jacobsen e*-Be«t©e¥3tiir Ij . ^
^ ^ ^ „ /-^^t- Palay^^^^^
».DDRE
L_1m ^"4.!/f^
cy-^,1^^^ 865
- - (7^ BOX NO. ___2°2_
^'^ ^,0 0
jTAL J C. 33
TE l-16-(
7839
^J^f^TKu yyr.vcK.: 3i:rJATL<: sklsc
L'aul H, BlatK.i!!
I ;i:'.,-; j'.jI/ dv/Oi-ii, hert:h/ dsooa
Rockwell (ni;cfnai;Ioaal, (fechany, Okldhomy. Au.;ji.!5<; 1'), 1970 M:'.y 15. 1972
{C':^.2?jrLP:^.'^j~:l^j.'i±ti • ^i^'^'' iSi:^A. "■"*'■'■''■ L^^lrl...
.! •■ii'Aolr.yitd a-j a oilot for ANiPC.
I'l oV.ot.-j coolii ■>£ rV.s
Afvil'X <li ;h; '.;{•; t'l ■.■r:i ;!«'.'. Tij !['.•; b/thj t/.o. S-ji-.i^i 3-:li;;r Corr.tuitt.ji on
v^ec .i>":a;ii-.-J./
?.nd to t!'.; ■•>-3 u o: tr.y Vnowla-l_{4, thiy a r-J t ru-j and accurate r«"or.U o:
illj'; tl -/'X it-.S ir.i.,':>: co-oUo'i-ji by ir.i.
i. Attach!'! to thii afu<'.j.vit a r* photo co?i-ij oc ttiy p-ir jo.ial lo^jj,
v.tiit.a I c--i-;i:/ .'.i jiia^ truj ;•.;;! a'j.ar.icc, lor t!:i U^:-jj U..;o1 in ;.>.irc 2.
I. On ci.i f )U j-.vin^ ili^;.: J, pAi;jiiJ;r» a'y oar i th*: i\lr oraf: "i ivjli-:'. jJ:
A. I'lvj': i.'.cc, tli/t-t <-.- i;iir'.;;it o: :'.i_j;.t :\jv..-., ^i j >-i.i > ;r'i .-..\;a'.-)
ij. I.*.; I juij.^j 'j:! :.:/ pr,-/L'/i.i.^ aifijii'l:, I irn up.abl-'i to ri'.Mil
m i^'2x\'i-jr3 v/e had on che flights In question. Mr, Harold
C. Ni-l.ii)!! 13 ch-e only p.i j Jin/jr I J;ctc.ic_ly kmr.'/ of ;i'..! h.i nuy
or may noc have boen on ill of chose fliijht;. )
S. I J'.AV! (of lo not hav^) an/ «•-.• lolliction oi s-ijinj, tn-Jitin^, or
Affidavit
discus 3 injf John Connally while at Page Airways. Washington. D.C.
during March 1971.
6. (Any other Information which you consider pertinent)
■ ,.,f I again stace that to the best of my recollection, I have never
V "J^ J ff i%seen, met or spoken to Mr. >3hn Connally In person.
'^-^
<:>d;;(. ,^';>--^ ^-^'^w Expire, M^^
«76
7840
ASSOCIATCO MILK rRODUCCES, INC. ,
DAILY AIRCRAhT FUGHT HCI'OUr
. Kf OK AirtruANE ■. ■-' '• .. .. MODITL ('c L1CC-5.ENO.U '' *■_ . DATE
/.
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).
^ LLl-*^" TonC^ _
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3.
4.
5.
6.
OTALS
--
<'
— =—
™
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//K-
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ISI P
USSt'JC-llKS ANO "X" FLrCKTSM
»DE DAILY 1
-.-
1
z
5
2
S
3
_6.
3
6
i
TIME - HOUnS AND TENTHS OF HOURS
1'.
|6
3
V
MRCRA,^T
LC^TENC.
»IC„TeN=.
UKCt 1
i«-''r''
l».
V
2
S
3^
TIME EROUOKT
FORKABO r
--f.\'. /
?.'/.?
,'.V. V
1
i
3
6
-J
_2
5
3
6
TODAY'S TIKE "
1 7. ,
■ ', c
• -i' (T
i
{
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3
2
3
TOTAL TIME
L^-y-.J
7-?>- i
,'.?r/
U
S
6
!''f'-
INSTBUKENT: KIGHT: Ol'.MI CHECK: MO. 1 WO. I
\
/~"/-y .- '
/^•/,^i^>A-^ • Btslil
I
KO PILOT
ASSOCIATED MILK PRODUCERS, INC.
DAILY AIRCRAFT FUGHf REPORT
-<y^fJIjl!';-:^^'-ooBi._d>CL license i,o. n.^'CJj<___cf.Tz_iss__-y/
P<iL
i-rr
>:-']■ :
111
lO'A" rT_IG:iTS J.'.ADE
DULY lO I .'■■.<,
Wl
m
• CUI'S ".NO TEMTIS Cr MOU~S
I I
/ .' ■••
; /
7841
OF AIRPUANE
ASSOCIATED MILK PRODUCERS, INC.
DAILY AiriCriAI-T FUGHT REI Or<r
MODEL / '' LICENSE NO. t(
./dr-_6-77
l"ic«t
oepaVtSre
POINT OF
ARRIVAL
TIME
T *CM
r ivc
'.;-vj^;;.i
» . r
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OtyAHTUBC ARWIVAL
J
•
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/ '.
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___
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A.'jl.pr.cr-:ns Ano
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-.^„._-.
...-^.
s
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— -'
DAILY TOTA
/
-—
—
4 si 0
« si 6
TOOAY'S TIME
TIME - HOURS AND TItMTHS OF HOURS
^h
ASSOCIAICO MILK P|-;ODUCI "S, INC.
DAILY AIRCOAI T ri.lCHT Ijri'OWT
\KE OF AIRPLANE ^/./^^Vr^ MODEL ._^<7 _ LICENSE NO. ^ /^('/j^ DATE . . Z ^^ .y^. rSZ / ^
^/) K-
f^i X-
1.
2.
3.
LIST PASSENGERS AND "X" FLIGHTS MADE
7J^<.?
DAILY TOTALS
TODAY'S TIME
TOTAL TIME
TIME - HOURS AND TENTHS OF HOURS
z^.s_
NSTRUMENT:
^^^•kl^^^7-a-^'-
OMWI CHECK: HO. I -* / jj*, <2. NO. 2 " Q j- Q
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7842
<E OF AIRPLANE
ASSOCIATCD MIIK PRODUCCKS, INC..
DAILY AinCRAfT TLIGIIT HEl'Of(T
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REMARKS:
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OMNI CHECK: NO. 1
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ASSOCIATCO MILK PRODUCERS, INC.
DAILY AliiCRAKr FLIGHT RM>OnT
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MODEL (. £l LICENSE NO. N_^^ ti£ DATE '
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DAILY TOTALS
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7843
7844
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THE RECORD ON THIS
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7845
7846
7847
'mvn.0 STATE.] .;;c;[ATS SEr,.v;c
COiVfNfTTTEE OU 'Pl^^^IDEUTTAr,
'CAMPAIGN A':C:;7ITIS3
AFFIl;Avi;\^
i, ;>icL'ijy tJohen, hdvir.g boon LuLy svror:!, .Ij hereby d-ipos; and
T:i5 fol].ovrlr.^ ii an ajproxi:.'.'.'.: j ii-nzsnary oc" r:v/ repli03 co yiozzi-yaj
by staff :r:Or::borj of th2 Onitad ;]', i:iJ Senat ; JjL;ct Coc-Titc i-i on
Prejid=:iti£l 'Jiapaiiii A-;vivlT;iej,
i am Cniaf of tha Uiicy Brarua of -che Co- .;•. ):liT:y Op-3ri-ion3 Division
of the Agricultural ot i^xlLization i!V.l Conser'.-i';L jh 3er^/-ioe of th^ 'inited
States Dspart.T.ent of Agrioi-iltura, fa the t'?.ll itid winter of l/JJ and
'..Inter aiid spring of 1971, I was 'jhlif of th • .^rj-jrani Dev;.'. ;r;;n5nt Branch
of the Livestock and Dairy Division of the A/'.'i^ultixral St?.'oili :ation and
Conservation Service ol' che Unite;i. .joates D-3::ifGment of Airic'il!;ure.
Included in n\y responsibilities vrij the gatherln.^ and analy::it'.g of infor-
mation relative to the irilk support program and the preparation of a docket
showing the criteria and statistical data reLi-Jl on to establish the
recoLTnended suppsrt price.
The support pro^rara for miL?. ii require i by the Agricultural Act of
19^9 as amended, which required for the marketing year involved that milk
be supported at such level between 75 and 90 percent of parity as the
Secretary determines is necessary to assure an adequate supply.
I, with the assistance of S.E.T. Began, Agricultural Economist in my
7848
branch, did draw up the docket covering the marketing year I97I-72 which
recommended a support price for milk, as provided for under the afore-
mentioned act, of $l+.66 per hundredweight. (A copy of said docket is
attached hereto as Exhibit A.)
The statistics set forth in the docket were based on estimates made
by the Interagency Dairy Support Estimates Committee, which was comprised
of representatives of Agricultural Stabilization and Conservation Service,
Economic Research Service, Foreign Agriculture Service, and Export Market-
ing Service, all within the USDA. The committee prepared estimates or
projections of effects on production, consumption, government purchases
and costs of support at 75 percent, 80 percent and 90 percent of parity
and at varying price support levels between $i+.66 and $i+,92. (Several
tables containing these projections are attached hereto as Exhibit B.)
Based on these estinates and the statutory duty of assuring an adequate
supply of milk, and after discussion with Mr. Keister Adams, Deputy
Director of the Livestock and Dairy Division and Mr. Reuben Jones,
Director of the Division, I prepared the docket calling for a level of
$i+.66 of support per hundredweight which included an e}rtensive justifica-
tion for that level. After preparation of this docket, I sent it for
approval to Mr, Jones. This docket also went to the General Counsel's office'
and to the Budget Division Office both of which approved it. The docket
was subsequently approved by the Administrator of the Agricultural
Stabilization and Conservation Service, Kenneth Frick, and by the Board
of Directors of the Commodity Credit Corporation and was finally approved
by Secretary of Agriculture Clifford M. Hardin as reflected in an announce-
ment by him on March 12, I971.
7849
I have been responsible for the initial preparation and recommenda-
tion of dockets authorizing milk price work programs for more than fifteen
years. Sometime after March 12, I97I, but before March 25, I971 (probably
during the week of March 22-26), I began receiving phone calls from persons
in the Office of the Administrator of the Agricviltural Stabilization and
Conservation Service asking such questions as, "What would be the effect
upon supply, demand, government purchases and costs of raising price
supports to the level of 85 percent of parity and what would the CCC
purchase prices have to be." I was quite surprised at this questioning
because it was the first such questioning immediately after a price
support decision was made and announced that I had received in my experience
at the Department of Agriculture. Moreover, questions such as these were
taken into consideration as part of the inquiry which led to the docket
approved on March 12, 1971. To these questions, I based ny estimates on
the estimates that had previously been prepared.
On March 25, 1971, a press release came out with the announcement
that the price support level for milk for 1971-72 would be raised to
$U.93 per hundredweight. Normally I prepared a draft of the press release,
but I was not asked to do so on this occasion. Neither was I asked to
prepare an amended price support docket prior to the issuance of that
announcement. Although announcements sometimes precede preparation of the
docket, it would be the normal practice to prepare an amended docket for
that year for submission to the CCC Board of Directors before the announce-
ment.
30-337 O 74 - pt. 17 - 21
7850
Shortly after the March 25, 1971, annovincement of the price support
level raise, I was told to prepare an amended docket, because such was
the desire of Mr. Carl Farrington, Deputy Administrator for Commodity
Operations for the Agricultural Stabilization and Conservation Service
of the United States Department of Agriculture. I was told to keep it
as brief and sinrple as possible. In preparing the amended docket, I
emphasized some of the factors which could justify raising the price
support level. The justification was very short. (A copy of the amended
docket is attached hereto as Exhibit C.)
To the best my recollection, this situation was the first time in
my experience of preparing milk price support dockets that an increase in
the price support program had been announced before an original price
support level was given the opportunity to first become implemented. I
was never consulted in any manner, nor did I have any knowledge of any
action which led to a decision to raise the milk price support level
subsequent to March 12, 1971, before the March 25, 1971 announcement,
other than the above mentioned general questioning from individuals in
the office of the Administrator of the Agricultiiral Stabilization and
Conservation Service within a few days prior to the MEirch 25th annoimce-
ment, 1^ advice was neither asked for nor given as to the wisdom of such
a price support level increase prior to the announcement of said increase.
subscribed and sworn to before me
this Jl_S_ day of ^^^.^ , 197^.
My Commission Expires Seof 30. 1975
7851
EXHIBIT A
"For Official Use Only" and "Secure Storage Required" Provisions
Haired on March 12, I97I.
CCC Docket MCP 98a Milk Price Support Program, 1971-72
Approval by Board: March 3> 1971
Approval by Clifford M. Hardin
Secretary of Agriculture: March 22, I97I
Press Release No. 8^3-71 was issued on March 12, 1971.
Regulations: Not published in Federal Register because action was
superseded by Amendment 1.
7852
UNITED STATES DEPARTMENT OF AGRICULTURE
Washington, March 12, 1971
Secretary Hardin Announces Milk Support, Dairy Purchase Prices for 1971-72:
Secretary of Agriculture Clifford M. Hardin today announced the support
price for manufacturing milk will be $'+.66 per hundredweight in the 1971-72
marketing year beginning April 1, 1971- This is the same as for the present
marketing year.
A year ago the dairy price support was increased by 38 cents per hundred-
weight. Secretairy Hardin said "this was the biggest increase that has ever
been made at the beginning of a marketing year. This was done because milk
production was declining, and it was in keeping with our obligation linder the
statutes to provide sufficient milk supplies for the 1970' s". Following this
increase, milk production moved upward in 1970.
In making this announcement, the Secretary said he realized that some
dairymen believe that the support price should be increased. However, after
careful review of the situation and the provisions of the law. Secretary
Hardin declared that he felt today's action was in the long-term best interests
of the dairy producers. . . ....
"The long time well being of dairymen," the Secretary declared, "requires
that prices be kept at levels which will permit the overvrtielming proportion of
milk to clear through commercial markets. Dairymen, like all farm producers,
are faced with increased costs. But they know from past experience that they
do not benefit when dairy production substantially exceeds demand and excessive
surpluses pile up in Government warehouses. We must avoid this."
The Secretary also einnounced that it will be necessary to purchase cheese
iiLi-ing the coming months for use in USDA food programs. With these purchases,
-'eoretary Hardin said that he believed that producer prices for milk would be
strengthened. In this connection, the Secretary pointed out that on March 10
more than 2.5 million pounds of cheese was purchased and buying offers are
continuing.
At the same time, the Secretary noted that the President has directed the
Tariff Commission to conduct an immediate investigation under section 22 on the
imports of Swiss or Qmnenthaler cheese, Gruyere -process cheese, and certain
cheeses classified for tariff purposes as "Other" cheese having a purchase price
of -lY cents per pound or more. The Secretary has recommended to the President
that this action be taken in view of the sharp increase in 1970 of the imports
(more )
^'*'*'' USDA 843-71
7853
or these cheeses and the need to protect the price support for milk in the face
ol" these increasing imports. The Tariff Commission has been directed to examine
the feasibility of continuing the present price break system of controls at
different specified price levels, including price levels which may fluctuate
with the support price of milk as well as the feasibility of quotas for cheeses
■ at all price levels.
The Agricultural Act of 1970 suspended until April 1, ig?**, the mandatory
requirement to support butterfat in farm-separated cream. However, Ccnmodity
Credit Corporation will continue to buy butter as well as nonfat dry milk and
cheese to carry out the price support objective for manufacturing milk.
As a result of the change in the law, CCC's purchase prices for butter are
reduced by about 2 cents per pound. The Secretary expressed the hope ihat the
lo\%'er price for butter would result in higher commercial consuoiption and reduced
CCC purchases and stocks. CCC now has large inventories of butter which total
:about 100 million pounds. The lower butter price is being offset by an increase
of 1.2 cents a pound in the purchase price of nonf&t dry milk. This combination
t)f butter and powder prices will enable manufacturing plants to pay farmers, on
the average, the support price of $^.66 per hundredweight for milk.
Prices received by farmers for manufacturing milk (adjusted to average
railkfat content) averaged $U.72 per hundredweight during April 1970 - January 1971.
The support price is for miiv of average millcfat content (approximately
3.67 percent).
(more)
7854
The support buying prices for the 1971-72 marketing year will be:
Purchased and - Purchased on
produced before or after
April 1, 1971 April 1, I97I
• • • cents per lb. • • •
Butter, U.S. Grade A or higher:
New York, N.Y., and Jersey City
and Mevark, N.J. 70-75 68.75
California, Alaska, and Ha%)ali 70.00 67.75
Washington and Oregon 1/ 67.75
Arizona, New Mexico, Texas, Louisiana,
Mississippi, Alabeuna, Georgia, Florida,
and South Carolina 69.75 67.75
U.S. Grade B; 2 cents per pound less than for U. S. Grade A
The price of butter located at euiy other point will be the price at a
designated market, either New York, Seattle, or San Francisco, less 80
percent of the lowest published domestic railroad freight rate i>er pound
gross weight for a 60,000 pound carlot, in effect at the beginning of this
marketing year, from such other point to the designated market named by the
seller.
Produced before Produced on/or after
April 1, 1971 April 1, 1971
. . . cents per lb. . . .
Cheddar cheese, U.S. Grade A or
higher, standard moisture basis 52.0 52. 0
Nonfat dry milk (spray) U.S. Extra
grade (but not more than 3- 5 percent
moisture):
50-pound bags, with sealed
closures 27.2 28. U
1/ Calculated by use of freight rates.
USDA 8U3-7I
7855
FOR OFFICIAL USE ONLY
UNTIL PRESS RELEASE IS ISSUED
SECURE STORAGE REQUIRED
SUMMARY
Milk Price Support Program, 1971-72, MCP 98a
A. Ttie docket authorizes a milk price support program by establishing
1 price for manufacturing milk of $U.66 per hundredweight, the
same level as for the 1970-71 marketing year.
P. The docket differs from prior years in that it does not provide
for supporting butterfat in farm- separated cream. The requirement
to support butterfat was suspended by the Agricultural Act of
1Q70.
CALL SIDNEY COHEN, EXTENSION U037
IF MORE INFORMATION IS NEEDED
FOH vi-'FICIAL USE ONLY
7856
FOR OFFICIAL USE ONLY
UNTIL PRESS {lELEAGE IS ISSUED
SECURE STORAGE REQUIRED
UNITED STATES DEPARTMENT OF AGRICULTURE
Agricultural Stabilization and Conservation Service
Washington, D. C. 20250
JAN 13 197^
To: Board of Directors, Commodity Credit Corporation
From: Director, Livestock and Dairy Division
Subject: Milk Price Support Program, 1971-72, MCP 98a
Attached hereto is a docket setting forth the basis and providing for
a program to support the price of milk to producers by establishing
3 support price of $U.66 per hxuidredweight for msuiufacturing r'lk.
A proposed press release is attached.
Attachments Recommended:
Concurred: J/\|\J 2 0 1971
Deputy Adni ni sfr^tor ,
I'on-jnodi ty Operations
,."^..<.- ^.w^/.A/A
Director,
Dairy Division /
livestock and
Approved for submission to
the Board of Directors,
Commodity Credit Corporation
Executive Vice President
Commodity Credit Corporation
KOH ■1FFICIAI, USE ONLY
7857
FOR OFFICIAL USE ONLY
UNTIL PRESS KELEAT.E IS ISGUFD
SiXnjRE STORAGE REqUIRKD
Milk Price Support Program, 1971-72, MCP 98a
A. INTRODUCTION
I . Purpc
This docket authorizes a program providing for the support prxce of
tU.66 per hundredweight for manufacturing milk to producert: during
the marketing year beginning April 1, 1971. The support will be
carried out throvigh purchases of dairy products by Commodity Credit
Corporation.
Justification
Legislation. The Agricultural Act of 19^9> as amended, requires
the Secretary to support the price of milk at such level not in
excess of 90 percent nor less than 75 percent of the parity price •
therefor as of the beginning of the marketing year, as the
Secretary determines necessary in order to assure an adequate
supply. The Act specifies that the price support shall be
provided through purchases of milk and the products of milk.
The Agricultural Act of 1970 amended the Agricultural Act of
I9I49 by suspending until March 3I) 197^, the operation of the
mandatory price support program for butterfat. This gives the
Secretary greater flexibility in setting the CCC purchase price
of butter in supporting the price of milk.
Present and Previous Support Prices. The support prices for
the present 1970-71 marketing year axe $U.66 per hundredweight
for manufacturing milk and 71.5 cents per pound for butterfat
in faj-m- separated cream. These prices were 85 percent of the
parity equivalent and 75 percent of parity, respectively, as
of the beginning of the 1970-71 marketing year. The manufacturing
milk support price for the I968-69 and 1969-7O marketing years
was $U.2t3 per hundredweight which was 89 and 83 percent of the
parity equivalent, respectively.
Recommended Support Level. On the basis of recent and prospective
production conditions, it is estimated that a support price for
manufacturing milk at $U.66 per hundredweight, the same level as
KOH OhTICIAL USE ONLY
7858
the 1970-71 level of price support, will be necessary to continue
to assure an adequate sui>ply of milk and its products in the 1971-72
marketing year. It is estimated that this support price for manu-
facturing milk will be 80 percent of i>arity equivalent price as of
the beginning of the marketing year.
D. Production, Prices, Purchases and Inventories. Based on revised
data, milk production during April 1970 through January 1971 was
98.^ billion pounds, 1.0 billion pounds more than the sane period
a year earlier as declining cow numbers were more than offset by
increased production per cow. Production was above year earlier
levels for each month during the current marketing year. Milk pro-
duction has reversed its downward trend that began in the 1965-66
marketing year and is increasing slightly. The downtrend in the
number of milk cows un farms h&s slowed. During January 1971, cow
numbers were only 1.1 percent below a year earlier.
Production for the entire I97O-71 marketing yeax is estixnated at
117.6 billion pounds, \ip 1.0 percent from I969-7O. Commercial
consumption of milk and dairy products is expected to be about the
same as last year.
Market prices for butter were at or close to CCC purchase prices
from April 1970 through January 1971. Market prices for Cheddar
cheese (Uo pound blocks) held steady frcni ^^il through August
1970 and then trended \ipward to about 5 cents over CCC ' s purchase
price in November. Since then, the price dropped 2 cents in
January and through the first half of February has risen 1 cent.
The higher cheese prices have eiuibled cheese plants to»pay higher
than the svqjport price for manufacturing milk in recent months.
Plants making butter and nonfat dry milk also paid higher prices
in order to conpete for milk. United States average mantifacturing
milk prices to producers, adjusted to euinual average test, rose
from $14.65 per hundredweight in April I970 to a high of $4.86 in
December 1970 and then decreased to $lt.83 in January 1971. The
average price for the ten months beginnijig April I970 was $1*. 72.
The proposed I97I-72 support price for manufacturing milk will
assure that prices received by producers will continue near recent
levels.
The higher prices paid for milk used to make cheese have continued
to encourage a diversion of milk from plants making butter and
nonfat dry milk to cheese plants. Production in the first 10
months of the marketing year was up by 3 percent for butter and 10
percent for American cheese. Nonfat dry milk production, A^il-
December 1970, was iip about 10 percent.
7859
CCC price support purchases, delivery basis, April 1970 through
January 1971, totaled 212 million pounds of butter, 1+3 million
pounds of cheese and 393 million pounds of nonfat dry mllX. It
is estimated that for the entire I97O-7I marketing year CCC will
purchase 285 million pounds of butter, 56 million pounds of cheese
and '+50 million pounds of nonfat dry milk.
During the period April 1, 1970, through January 31, 1971, CCC
committed to program uses about 185 million pounds of butter, U8
million pounds of cheese and U71 million pounds of nonfat dry milk.
CCC's uncomnitted inventories on Jeinueiry 31, 1971> were 62 million
pounds of butter, 19 million pounds of nonfat dry milk, and 7
million poxinds of cheese.
Commitments to prograjns of nonfat dry milk and cheese during
Januaxy-March 1971 likely will be approximately equal to purchases
and consequently unconmitted inventories on March 31, 1971, will
be low. However, purchases of butter are expected to exceed
commitments and uncomnitted inventories of butter on that date
are projected at about 110 million pounds.
Milk production in the marketing year which begins April 1, 1971,
is projected at II8.I billion pounds, up one-half billion pounds,
or O.U percent, from I970-7I. Commercial use of milk and dairy
products is expected to increase slightly and CCC purchases £ire
projected at 6.5 billion pounds of milk equivalent, compcired to
6.7 billion pounds expected for 1970-71. CCC purchases in the
1971-72 marketing year are projected as follows: butter, 265
million pounds; cheese, 75 million pounds; nonfat dry milk, 50C
million pounds.
If the requirement to support the price of butterfat in farm-
separated cream had not been suspended, it would have been
necessary to increase the support price of butterfat by about
three cents a pound to keep the support at the legal minimum
level of 75 percent of parity. This would have required an
increase in CCC's purchase price of butter of about 2.5 cents
a pound and an off-setting reduction in CCC's purchase price
of nonfat dry milk.
Proposed Purchase Price. It is proposed that the CCC purchase
price of butter be reduced by approximately two cents a pound
and that the purchase price of nonfat dry milk be increased by
1.2 cents a pound. These price changes are approximately off-
setting in terms of the ability of processors as a group to at
least pay the support price. These changes are steps in the
direction of making butter more competitive in the market and
placing; a greater emphasis on the value of the nonfat portion
of milk.
7860
In addition, it is being proposed that purchase prices of butter
be lowered 2 l/U cents per pound in the West Coast States, including
California, Oregon and Washington in view of the heavy accianulation'
of butter by CCC, particularly in California. This proposed
reductionlwlll lower prices to farmers for milk by about 1 cent
per hundredwei^t .
F. Impracticability of Obtaining Assurance From Processors. Section
UOl (e) of the Agriculture^. Act of 19'*9> ^^ amended, provides
that whenever any price support or surplus removal operation
is carried out through purchases from processors, the Secretary
shall, to the extent practicable, obtain assurances frcca processors
that producers of the milk involved have received or will receive
maximum benefits from such operation. '
The resvilts of the present and past programs provide satisfactory
assurance that purchases of dairy products from processors and
handlers will effectuate the objectives of the price s^qprport
program. It will not be practical to undertake to obtain from
processors further assurance In this respect for tvo reasons.
First, there normally is a substantial range in prices paid for
milk associated with differences in use, quality, location,
competition and volximes, and efficiencies of plant operations.
Second, in order to maximize the effectiveness of the support
program, dairy products will be purchased both from processors
and from handlers who can perform the necessary functions of
asseinbling carlot from small processors.
B. AUTHORIZATION
I. Provisions of Programs
A. Level of S\rpport. The general level of prices to producers for
milk shall be supported during the marketing year April 1, 1971,
through March 31, 1972, on the basis of .-$4.66 per hundredweight
for manufacturing milk of yearly average butterfat content. It
is estimated that the aforementioned s\q>port price for manufacturing
milk will be 80 percent of the parity equivalent price as of the
beginning of the marketing year, and that on the basis of
developments dxiring the past year and current prospective economic
7861
conditions, it will assure an adequate supply of milk in the
1971-72 marketing year. Such support price for manufacturing milk
shall be adjusted upv/ard, if necessary, to reflect at least 75
percent of the April 1971 parity equivalent price to be published
in the March 30, 1971, issue of Agricultural Prices.
B. Method of Support. The support prices to producers for manufacturing
milk v.il-1 be carried out by purchases of dairy products from
manufacturers and handlers as set forth herein. Purchases \ri21 be
made of butter, Cheddar cheese, and nonfat dry milk and such other
products hereinafter authorized.
C. Purchase Prices.
1. Bulk Containers. Purchase prices for bulk butter in 60 to 80
pound containers, nonfat dry milk in 50 pound bags, and
natural Cheddar cheese shall be those indicated below:
Purchased
and Produced Purchased
before on or after
April 1, 1971 April 1. 1971
Cents per lb.
Butter, U.S. Grade A or higher;
New York, N.Y., and Jersey City
and Newark, N.J. 70.75 68.75
Seattle, V7ash. , San Francisco,
Cal., California, Alaska, and
Hawaii 70.00 67.75
Washington, Oregon 1/ 67.75
Arizona, New Mexico, Texas,
Louisiana, Mississippi, Alabama,
Georgia, Florida, South Carolina 69.75 67.75
U.S. Grade B: 2 cents per pound
less than for U.S. Grade A
Produced before Produced on and
April 1, 1971 after April 1, 197I
Cheddar cheese, U.S. Grade A
or hipher, standard moisture
basis 52.0 52.0
Nonfat dry milk (spray), U.S.
Extra grade (but not more than
. 3.% noisture): 27.2 28. U
17 Calculated on basis of freight rates.
7862
The butter purchase price at any other point shall be determine^
by subtracting from the price at a designated market named by
the seller 80 percent of the lowest published freight rate
in effect at the beginning of the marketing year from such
other point to such designated market. The designated markets
are New York, N.Y. , San Francisco, California, and Seattle,
Washington.
2. Prices for Other Products eind for Products in Containers
Other Ihan Those Above. On the basis of competitive offers,
purchases of the following products in containers aiii- <
meeting specifications suitable for program use may be
made at prices which, in the judgment of the President or
Executive Vice President , -CCC , will not exceed those which
reflect the support price for manufacturing milk and provide
a reasonable margin for additional packaging and processing
costs:
Print Butter
Spray Nonfat Dry Milk,
including vitaminized
Process Cheddar Cheese
Process American Cheese
Purchases of dairy products other than those listed above
may be made only upon specific determination by the President
or Executive Vice President, CCC, that such purchases are
desirable to effectuate the objectives of the program.
Method and Area of Purchases. Purchases shall be made from
manufacturers and handlers in carlot quantities on the basis
of offers and acceptance pursuant to announcements setting
forth the terms and conditicms of purchase, or such other method
as may be approved, by the- President or Ejcecutlve Vice President,
CCC, The product shall have been made in the United States
from milk produced in the United States and shall not previously
have been purchased by CCC.
Period c'f Manufacture. The prices paid for any product manu-
factured before April 1, 1971, shall not exceed prices authorized
by the MilK and Butterfat Price Support Program for 1970-71.
In connection with purchase contracts for dairy products in
special packaging or form, contracts may be entered into pursiiant
to competitive offers in February and Maxch 1972 for delivery
of dairy jirsducts manufactured on and after f^-nril 1, I972, with
provisioft 'for adjustment of the prices to reflect imr differences
between the support purchase prices in effect before and after
April 1, 1972: Provided however. That any contracts from offers
7863
received after aiuiouncement of support purchase prices for the
1972-73 marketing year will not be subject to such adjustment.
F. Utilization. Except as otherwise provided herein, products
acquired under this program for the support of milk prices
shall be disposed of in accordance with the docket "Disposal
of Conmodity Credit Corporation Conmodities and Materials,
CZ 200, Revision h" and all revisions and amendments of and
supplements to such docket.
Dairy products shall be made available to the Administrs ior
of Veterans Affairs and the Secretary of the Army as author-'
ized and directed by Section 202 of the Agricultural Act of
19^*9? as amended, and may be made available to penal &nd.
correctional institutions as authorized by Section 210 of
the Agricultural Act of 1956.
Ti. Authority to Determine Detailed Operating Provisions. De-
tailed operating provisions of the program consistent with
the provisions of this docket and desirable for effective
and efficient operation of the program may be determined
by the President or Executive Vice President, CCC.
II. Classification.
This is a mandatory operation under the CCC price support program.
ill. Administration Within the Department of Agriculture.
his program will be ccoried out by the Agricxiltural Stabilization
and Conservation Service under the general direction and super-
vision of the Executive Vice President, CCC, pursuant to the bylaws
of the Corporation.
JV. I or Official Use Only Designation.
nic "1-or Official Use Only" designation of this docket will terminate
upon issuance of the press release.
7864
Milk Price Sujipart Program, 1971-72 ICP 96a
Approved by CCC Boeu-d of Directore
at meeting held on March 3. 1971
I si Seelev G. Lodvfick
Secreteurjr
Commodity Credit Corporation
Approfved:
March 22. 19-^
/"/ ffl'^r^nee p, palmhY
President, Ccmnodity Credit Corporation
and
Assistant Secretary for International
Affairs cmd Ccumodity I^ograms
March 22, 1971
/s/ Clifford M. Hardin
Secretary of Agricult\ire
tOK OFKICIAL USE ONLY
K!di^
7865
FOR OFFICIAL USE ONLY
UNTIL PRESS RELEASE IS ISSUED
SECURE STORAGE REQUIPZD
UNITED STATES DEPARTMENT OF AGRICULTURE
AOtlCULTUIAl STABIUZATION AND CONSEtVATION SEtVICE • WASHINOfON.O.C aOlSO
DATEi January 18, 1971
- ?■ 1 0 ion
TO: Board of Directors, Comnodity Credit Corporation
SUBJECT: Availability of Funds Statement - Milk Price Support Program, 1971-72,
MCP 98a
Gross obligations under this authorization are estimated at $385.7
million for price support operations during fiscal year 1972, This
amount consists of purchases of $196.0 million of butter; v42,2
million of cheese and $147.5 million of nonfat dry milk.
Net expenditures for price support and related programs are expected
to be $296.0 million for fiscal year 1972.
It is estimated that Commodity Credit Corporation funds will be
available for this purpose.
Director, Budget Division
FOR OFFICIAL USE ONLY
30-337 O - 74 - pt. 17 - 22
7866
EXHIBIT B
CALCULATION OF CCC FURCa^SE COSTS
t-i y^
/. 6<:
.ii '■
Purchase Price
69.8/27.2
67.8/28.3
65.8/29.V
6Ji .8/30.0
59-6/32.7
ii^'
Cents per lb.
Butter
.70
.68
.66
■ .65
.60
.-7j
Cheese
.5625
.5625
.5625
.5625
•5625
. r
irPM
.295
.306
.317
.323
.350
' '}.'
Quantity-
Mil, lbs.
Butter
280
265
250
21*0
205
>!'
Cheese
75
75
75
75
75
ITFWi
500
525
550
. 560
6ltO
:'£ -
CCC Cost
Mil. dol.
1
Butter
196.0
180.2
165.0
156.0
123.0
f:./
Cheese
^2.2
U2.2
U2.2
t2.2
1*2.2
bx.
VFm
1»^7.5
160.6
17U .'^
180.9
22l*.0
1 ' 1
Total CCC Cost 385.7 383.0 381.6 379-1 \. , 389-2,
Pi-ice
r./
7867
CalciOetlxi of CCC Piij-c-:-:?.ss dosts for Pi-e^crA Support Level ,, i
^'^-'^ ^^''^' 'l-''r' ^"'^ ?^ ' ^^ Tcw^'.ti' y ,'>■■''"
k.66 . hM 'i-.-r 5.33 V-.'j
l:21._l^. 1111. rb. ■ )lil:_lD.
^80" ■^CS' 200 ?;-r 370 2 9'
75 10 'J 150 ? ■'
§09 iir too > ' ' - 650 S V -
Cents/lb. CehtsAb. Cents/lb. Cents/lb.
1970-71
Sapport Level
It. 66
Suri3lu3
1:11. lb.
Butter
Cheese
280 ^' ^
65 .^^
iu?rc.i
500 t ' -
Butter
Cheese
.70
.5625
.295 ^-^ '
•TO
.5625 .
.295
*' .651
■ .5!i05
.295
.70 - V
. .6295 .yj
.377 i r
CCC Ccsii
mi. dol.
mi. c.oi.
mi^eoi.
mi. cioi.
&.itttr
Cheese
195.0 '9f.r
35.6 3 .-
i'>7.5 /:.- -
190.0
J!2.2
l':7.5
130.2
5.J^
118.0
259-0 ^~-
9V.'). i.
2l5.0 /
mi, cToi.
mi. Col.
mi. e.p\.
mi. cV.l.
Total CCC Cost
3S0.1- -w-.
3C5.7
253.6
- ,.-
5S3.it <-
Pi'peec-Ir. iicra CCC sclcs ^•ill offr^ct cl-hsr cc-^-a r.uch as
EuOi-ac'2 ^-ifl l;'.nfilir.G ro th.-.t pvLrc^::"ce costs iri.ll.bs
equl'>alc;vt to net e-:-ri>:ncutui*e3".
7868
Estimated purchases and costs under the dairy price support
program in 1970-71 marketing year and projections for
1971-7 2 at alternative levels of support
1970-71
1971-7 2
Item
($4.66)
1./$A.66
: 2/$4.85
: 3/$5.05
Purchases
Milk equivalent (Billion pounds)
6.7
6.5
7.0
7.8
Butter (Million pounds)
: 285
265
280
305
Cheese (Million pounds)
56
75
90
120
Nonfat dry milk (Million pounds)
460
525
565
605
Net expenditures (Million dollars)
380
386
430
493
Purchase prices 4/ (Cents per pound)
Butter
69.8
67.8
67.8
67.8
Cheese
52.0
52.0
54.0
56.0
Nonfat dry milk
27.2
28.4
' 30.7
'■ 33.2
\J 80.5 percent of parity, based on data as of February 26.
2J 83.8 percent of parity, based on data as of February 26.
3/ 87.2 percent of parity, based on data as of February 26,
4/ Announced prices for bulk products.
7869
1970-71
19
21-
11
$4.66
A
.66
A
.85
5
.05
85 1/
80.5
2./
83,0
2/
87.2 2
69.8
67. C
67.8
67.8
52
32
54
56
27.2 -
28.4
30.7
53.2
i"OH OFFIGIAL i &„ C^CLV
Estiniattd I'Ufch;' scf. and costE under tho d;-;iry prici; supj-crl: program in
1970-71 J.nd projecticns for 1971-72 at specified levels of support.'
L^vci of fuppcrt (c-.'t)
PerciTt of parity
Forchasc prices - bull:
Butter (cencs per lb)
Chtose (cents p?r lb)
KFDM (cents per lb)
Frice support purch-ises
Cutter (ril lbs)
Cheese (r;ii lbs)
ICfDyi (rf.il lbs)
Ki]h Ev.iv. (bil lbs)
Kct Er.per.diture (nil)
1/ As of April 1, 1970
2/ As of March 1, 1971
285
265
230
305
56
75
90
120
460 -
525
565
605
•" "■"'"'
-^ .
-
6.7
6.3
7.0
7.8
$380
356
430
493
7870
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u
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u
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-o <o cn-r- m E
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<-> S
Oi
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13
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7871
Estimated purchases and costs under the dairy price support
program in I97O-7I marketing year and projections for
I97I-72 at alternative levels of support
1970-71
1971-72
Item
($U.66)
1/$U.66
2/$U.78
': 3/$U.92 ;
|t/$5.21
Production
(Bil.lb.)
117.7
118.2
118. »t
118.6
119.1+
Commercial Disappear-
ance
Surplus
(Bil.lb.)
(Bil.lb.)
109.2
6.7
110.0
6.5
109.6
6.8
109.3
7.2
108.2
9.2
CCC Purchases
Butter
Cheese
Nonfat dry milk
(Mil. lb.)
(Mil. lb.)
(Mil. lb.)
285
56
U60
265
75
525
275
85
5)+0
290
95
570
355
150
675 ■
CCC Purchase Price
(bulk products)
Butter CChicago)
Cheese
Nonfat dry milk
Cents per
Cents per
Cents per
lb
lb
lb
69.8
52.0
27.2
67.8
52.0
28.lt
67.8
53.3
29.8
67.8
53.3
31.6
«
67.8
57.5
35.2,
Net e5cpenditures
(Mil.dol.)
380
386
Uio
hk3
590 !
1/ 80.5 percent of parity, based on data as of February 26.
2/82.5 percent of parity, based on data as of February 26.
3/ 85.0 percent of parity, based on data as of February 26.
k/ 90 percent of parity, based on data as of February 26.
Dairy production estimates show that surpluses will remain in the coming yeai-
at about the present level. An increase in the support level magnifies the
possibility of adding to the surplus.
I
7872
1970-71 Dairy Estimates
^^-tc'r-Av^
Date of Estimate
Dairy Supply Estimates Committee
3-23-70 11-17-70 3-2l»-71*
Milk Prod.
Bil.lb.
117.2
117.2
117.7
Surplus (Milk equiv. )
Bil.lb,
7.3
6.7
6.7 :
Butter
Mil. lb.
280
.286
• 285-290
Cheese
Mil. lb.
110
65
56 :
Nonfat dry milk
Mil. lb.
550
500
U60' i
• i ■
Estimated expenditures. Mil. del.
Uoi
380
380
■"Latest indicated quantities: Not yet considered by inter-agency committee.
7873
EXHIBIT C
"For Official Use Only" and "Secure Storage Required" Provisions
Expired on May 2^. 1971.
CCC Docket MCF 98a, Milk Price Support Program, 1971-72
Amendment 1 (Increases the support price)
Approval by Board: May 12, 1971
Approval by Clifford M. Hardin,
Secretary of Agriculture; May 25, 1971
Press Release No. 969-7I was issued on March 2^, I97I.
Press Release No. 98I-7I was issued on March 26, 1971.
Regulations : Date of Publication in Federal Register May 1, 1971
Page No. 8237
Federal Register Citation 36 F. R. 8237
7874
UNITED STATES DEPARTMENT OF AGRICULTURE
Washington, March 26, 1971
USDA Annovinces Dairy Purchase Prices for 1971-72:
The U.S. Depeurtment of Apiculture today annoxinced the prices it will pay
for butter, nonfat dry milk, and cheese to carry out the 1971-72 support price
of tU.93 per hundredweight for milk ^*ich was announced March 25 (Press Release
USDA 969-71). The product purchase prices are those which are calculated to
enable processors to pay producers, on the average, the support price of $^.93
per hundredweight for milk.
As announced March 12 (USDA release 8^*3-71), the purchase price for butter
is being lowered 2 cents per pound. This reduction in the price of butter was
made possible by a provision in the Agricultural Act of I97O which suspended
the mandatory requirement for 8^ppo^ting butterfat in farm separated cream.
The new support price for milk, and the new product purchase prices shown
below become effective April 1, 1971> the beginning of the marketing year.
Purchased €uid Purchased on
produced before or after
April 1, 1971 April 1, 1971
- _ _ - _ cents per lb. - - - - -
Butter, U.S. Grade A or higher:
New York, N.Y. , and Jersey City
and Newark, N.J. 70.75 68.75
California, Alaska, and Hawaii 70.00 67.75
Washington and Oregon 1/ 67.75
Arizona, New Mexico, Texas, Louisiana,
Mississippi, Alabama, Georgia, Florida,
and South Carolina 69.75 67.75
U.S. Grade B; 2 cents per pound less than for U.S. Grade A
rne price of butter located at any other point will be the price at a designated
inarkei;, either New York, Seattle, or San Francisco, less 80 percent of the low-
est published domestic railroad freight rate per pound gross weight for a 60,000
pound carlot, in effect at the beginning of this marketing year, from such other
poir.t to the designated market named by the seller.
Produced before Produced on/or aftsr
April 1, 1971 April 1. 1971
---___ cents per lb. ------
rheddar cheese, U.S. Grade A or
■higher, standai-d moisture basis 52.0 5*+. 75
Nonfat dry milk (spray) U.S. Extra
grade (but not more than 3.5 percent
moisturell
50-pound bags, with sealed
Closures 27.2 31.7
1/ Calculated by use of freight rates.
553l» USDA 981-71
7875
UHTEED 3TA1SS CBPARaSfflNT OF ACSlICUIiinJRE
McDavld 388-Uoe6 W«Bhln«ton, Jtarch 25, 1971
Support Price far Manufacturing ttLlk Increased
Secretary of Agriculture Clifford M. Hardin today announced an upward
adJuBtment of support price for nanufacturlng milk to $U.93 frca the $U.66
support price announced by him on March 12 which was a continuance at that
time of support at the sane level as for 1970.
In announcing the new higher support level, Secretary Hardin stated such
announcements are mini mums which cannot be lowered during that marketing
season after once being announced, but which can be raised. Support levels
con be lowered only at the beginning of the milk marketing year each April 1st .
Secretary Hardin stated that there is a constant analysis of the milk
production situation, and that farmer costfi have escalated sharply pairtlcu-
larly in concentrate feed which has gone up $10 to $20 per ton. Farmers
h^ye no wW- *o cut other costs to compensate for those which have risen.
7876
FOR OFFICIAL USE ONLY
UNTIL APPROVED BY THE SECRETARY
SECURE STORAGE REQUIRED
SUMMARY
Milk Price Support Program, 1971-72, MCP 98a, Amendment 1
Authoif zes increase of (l) support price for manufacturing milk from
$'1.66 to $U.93 per hundredweight, (2) purchase price of Cheddar cheese
from ^2.0 to 5'+.75 cents per pound, and (3) purchase price of nonfat
dry milk from 28. U to 31 -7 cents per pound.
FOR OFI'ICIAL USE ONLY
7877
/ ;, \ ^- -
( c
FOR OFFICIAI, USE ONLY
UNTIL AITROVKD BY THE
SECRETAKY
SECURE STORAGE REQUIRED
UK'ITED STATES DEPARTMENT OF AGRICULTURE
AGRICULTURAL STABILIZATION AND CONSERVATION SERVICE • V/ASHINGTON,D.C. 202.'.0
To
From
Subject
April 9, 1971
Board of Directors, Commodity Credit Corporation
Director, Livestock and Dairy Division
Milk Price Support Program, I97I-72, MCP 98a, Amendment i
This amendment increases the support price for manufacturing milk from
$n.66 per hundredvfeight to $^+.93 pei" hundredweight. Also, the amendment
increases the purchase price for Cheddar cheese from 52.0 to 5^.75 cents
per poimd, and the purchase price for nonfat dry milk from 28. U to 31.7
cents per pound.
Press release No. 969-7I was issued on March 25, 1971 j and press release
No. 981-71 on March 26, I97I.
Recommended:
Concurred: APR 9 W-
C'-V
Deputy Administrator,
Commodity Operations •.'
Director^/
Livestock and Dy/ry Division
Approved for submission to
the Board of Directors,
Commodity Credit Corporation
"/
J'-^.
■;/ n
'ic'ci''-'.^ Executive Vice President,
Commodity Credit Corporation
C
FOR OFFICIAJ. USE ONLY
7878
Produced before
April 1, 1971
Produced on/or- after
April 1, 197-1
cents per lb.
5i+.75
31.7
Cheddar clieese, U.S. Grade A or
higher, standard moisture basis 52 . 0
Nonfat dry milk (spray) U.S. Extra
grade (but not more than 3.5 percent
moisture) 27.2
1/ Calculated by use of freight rates.
The butter purchase price at any other point shall be determined by subtract-
ing from the price at a designated market named by the seller 8o percent of
the lowest published freight rate in effect at the beginning of the market-
ing year from such other point to such designated market. The designated
markets are New York, N.Y., San Francisco, California, and Seattle, Washington.
III. For Official Use Only Designation
The "For Official Use Only" designation of this docket will terminate
on date of approval by the Secretary of Agriculture.
Approved by CCC Board of Directors
at meeting held on MAY" j^' 1971
( \ vli'vi Secretary
Vommodity Credit Corporation
Approved:
President, Commodity Credit Corporation
and
Assistant Secretary for International
Affairs and Commodity Pi-ograms
»ereta:ry cf Aj^ri culture
¥0]< OFFICIAI. Ur.E ONTjY
7879
FOR OFt'ICIAL USE ONLY
UNTIL APPRCfVED BY THE SECRCTARY
SECURE STORAGE REQUIRED
Milk lYicc Support Procrtun, IST/J-Y?, M::r 98a,
Amendment 1
A. IMTRODUCTiaf
I. Purpose
This docket amends Docket M3P ^a. (approved by the Board of Directors,
CCC, on March 3> 1971, and by the Secretary of Agriculture on
Meurch 22, 1971) by increasing the sujiport price for manufacturing milk
to producers during the marketing year beginning April 1, 1971 > from
$U.66 per hundredweight to $U.93. per hundredweight.
II. Justification
Based on a reevaluation of the dairy situation, giving full recognition
to increasing labor, waste disposal, and other costs on dairy farms and
to increasing demand for cheese, it is determined that a support price
of $U.93 per hundredweight for manufacturing milk is necessary in order
to assure an adequate supply.
B. AUTHORIZATICW
I. Provisions of Program
Subsection B I A, Level of Support, is amended by increasing the
support price from $4.66 per hundredweight to $^+.93 per hundredweight.
II. Subsection B I C, 1 Purchase Prices, is amended to read, as follows:
C. Purchase Prices.
1. Bulk Containers. Purchase prices for bulk butter in 60
to bO pound containers, nonfat dry milk in 50 pound bags,
and natural Cheddar cheese shall be those indicated below:
Purchased and Purchased on
produced before or after
April 1, 1971 April 1, I97I
----- Cents per lb. - - - - -
Butter, U. S. Grade A or higher:
Hew York, N. Y., and Jersey City
and Newark, N. J. 70.75 68.75
California, Alaska, and Hawaii 70.00 67-75
Washington and Oregon 1/ 67.75
Arizona, New Mexico, Texas, Loidsiana,
Mississippi, A3.abama, Georgia, Florida,
and South Carolina 69.75 * 67.75
U.S. Grade B: 2 cents per pouKd less
than for U.S. Grade A
7880
FOR OFFICIAL USE ONLY
UNTIL APPROVED BY THE SECRETARY
SECURE STORAGE REQUIRED
UNITED STATES DEPARTMENT OF AGRICULTURE
AORICULTURALSTABIIIZATION AND CONSERVATION SERVICE • WASHINOTON.D.'c. 20250
DATEi
APU 5 AH7'\
TO: Board of Directors, Commodity Credit Corporation
SUBJECT:
Availability of Funds Statement - Milk Price Support Program, 1971-72,
MCP 98a, Amendment 1
Gross obligations under this authorization are currently estimated at
$510.4 million during fiscal year 1972 (consisting of purchases of
$224.4 million of butter; $82.6 million of cheese, and $203.4 million
of nonfat dry milk). This amount represents an increase of $124.7
cillion over the $385.7 million reflected in the 1972 Budget Estimates.
Net expenditures for price support and related program during fiscal
year 1972 are expected to increase by $126.2 million over the 1972
Budget Estimates; from $296.0 million to $422.2 million.
It is estimated that Commodity Credit Corporation funds vill be available
for thi&tpurpose;
Director, Budget Division
FOR OFFICIAL USE ONLY
7881
AFFIDAVIT
Washington, )
District of Columbia)
John W. Dale being sworn depose and says:
I am a Senate staff member assigned to the Select Committee
on Presidential Campaign Activities as an investigator. I
have inspected the following summary reports filed with
the office of the Clerk in the United States House of
Representatives by the below indicated political committees
and each of the reports show that no funds were received
from loans and that no expenditures were made for loans
during the calendar year 1972:
Date received report
January 31, 1973
January 31, 1973
January 31, 1973
Name of Committee Attachment
Natl. Republican
Congressional Committee 1
Republican National
Finance Committee * 2
Republican Campaign
Committee * 3
* Also filed with Office of the Secretary of the Senate
I have also inspected the summary report (attachment #4)
received on January 27, 1973, by the Office of the Secretary
of the United States Senate filed by the National Republican
Senatorial Committee and it shows that no funds were received
from loans and that no expenditures were made for loans during
the calandar year 1972.
Subscribed and sworn to
before me on this ,
2<^t^ day ofy^JanuwiL^ J I '^74-.
otaty Public
My commission expires /^/3i/'7^
30-337 O - 74 - pt. 17 - 23
7882
K'r^irStD 6TjVT-o« HOi''5r'; Ci' ;
CNtf'T! .:tat/-^ r;:;';:^r^ oi-' :.•
, I ■ I -; ',-5
;>•.;:; ^'^• -J- >/^.
, o
S S7f;-7rA^^'.M {;■? OV'U C-?} > >V ;'■. "'U'n.VI
-V*i3
'.v';^ ^j?jf «vffvr», sK'-pr?* (>i«f!s> fctif .«*r
0 it ;>.!.« Pr
-i?.^::
^^|5^
7883
UNf|ED.STATKS HOUSE QF Re#^|^f4TAli V^^3 '
ru:.l'OUf OF ntXKJPM AND F.XPKNDi'fl'RKS
roix A
CO.MMiTrKF.
Siri^iUTiNt"; ANV CANmOATE(S) FOR NOVISAiiOX OR t Let i :• >:i 117 iilE
IMTKO STATES HOLSK OF RE:f-F5B:KE.VTATI\T-S
_ Rcpiilic&a N jtloTi^l, FXnnm-a Coralttee.
.310. ?lrat StrReC^, Southeast „.:!^. .„ .
Va^M citoa.^ D._C.ll_ ittiOJ.! _..... .■
iCty. ?:iV, ZIPf..xl<')
'iTPE 0? RETORT
O >:.'i;H 10 Arj^rt. :--'' ....
a Jiine 10 rcf...rt, ' '
Q So?Uml*r 10 report,
Sfjarniarjr 31 repcri .:•;.,■/
n rift/*<:'.h i*Ar ftport J-fesl-'ifC -.— :^. I- ;_.i--.V--:-^-,electic.n oa_. .-.._1,^^
■ .tP-'"> r'-ry, grrrrsl, jp-ciai, rai^i:T, ^aocu^or ro?rrrnti30>^ ': ■' . _ (Date)
Cj TtrmirJiUci: if,"' rt, ■ . • ' , . .
VERlMi'UK'N BY OVTIC OR AniRMATlON
'C'j 'JtjrJiLl.i/. L>^4.i^.. V_^,._, beiug dniv- s^ora. dof^v^ '-x^rr^.-) ..-.K -Ay
> ..; ;' :.-. f'.ejic.jt cf Rt<*!;.;i a\A !L.^i«.iKJi(ures :s cutRclrfeTtaw; and cx^^'Vj -Jy/j>^
r-nu.!
A D 1 9 7 T-^
, - . /<N"<yt»J7 PuKIit) ^ '
RKTIRN rOMPLKTED E ITOKT' ANX> Atf .tCH39frrrS Tfl; j
r.vt u :, ■, . i-.i I ■,-:
7884
7'^
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Cc >= ;;:>*/. is! :;-,*=; »v..:,^tV»r .4 4 :..:.-. ;..;...„...• — iii^V-.j..:?
7885
SUMMARY RKFOHT COVKRINC PKRIOO ^'U^:^^i _ 10/27/72. TUnU — ?^1^^^^^— "-
SIXTION A— RrCK.TTSt
(SI33I3M^' "''■^?^
«. It^mtteJ (use Echci^ute A*) ' 53 7O'4.0O
b. U„iteral:<.d....„ I"'"" "H" '! "143^2 92/2 5 v'
Itfmfn (u« BJicJuIe B*).... . , ^^ '
Part 3, Loni r»f rl>-«l;
«. Ilemiif d (tM r.-h«JuIe A')
K UnilcMr.;.-rJ, _ _
Tart 4, Other r»cn>U{iTfvind«,rel>»er»,lnt«r(wV»fat,T(t
». IUni!Enl(i:3«u>v«]a!« A*) .^J^
K U.,:teBike<l_........ : . ~~"" • ". .» — ^
"'"^■"■^VC v. * 8r-**iV:'oi£o'i,'i 10-03
„ ^ , _ . ' Ts'-J 'tier rjfr'tij t 'i.'..' ' .' '~ ;i—- — —
Part i. Trir,ef<ri tn: ... . ' i
, It«,7;ix» all (i:^-, v^ 'Ju!j A')......" .._! . 284 ^ J^O . 3^1 ^2-^13^ y 3 66 .. 2 5
^ SECTION B-vxrF..vt;iTiaE.si ' "^^TCTAi. Rscnw^ ^.,=^.==^-=-.. J--=-----^^
^ Parte CoTi.T>tinlfj!'-.M r.t^»jlji..-,rture»t \.V-"^'i" ; .^-
tt/Tn.'tc all (•-.:) f-h<«j»jC«) ^.' ^ ■ «
Tart T. Eiy<ivJitiir,-« f.i-ffreMuJ iwrvlMi, ijilario*, 3s..^{~,i,,.i_ ^ . . ,.^.
•« .. ftfmUrf {oB, «>.*<!«!« D').. ^ *^ .136.901.85
_ b. UmUia;«4 .„ " " J- -■■
P»rt C Vaf.»\.-^ii; -■> • - <■ . ,
o - ». nf^-irjforKi- ra,D') _: , ■ -_:_- , ^. __.:_■
*. iUl'-ttw! <-.;•.• khc^;!, O-. „_„. .„_ ,11,050.00 „i?
r^ k. v«rt.:^!:ra :.„ ' * v"'
Part 10. Trar.iftrj iH.S; '^ ; , • , , ,
w«^(^^-v=^.i,D.) _ _. ._ „„. ^Ul.Ji.fi..J55 »J-^ii^|^-°'
*,-i StXTION C-CVSII BALIVOS. ..... • . «-..»^VOm,BF4 t -_ r^'. =^--^--^^- ?
Cj/sJieaKisdatbfraK.-jrfrJVirt'-itrt.-rri. .. _.. __ ^_ ' 4109.005.02
A;i«>!rtrrff;t!r.HvtW3Ax'^v<) _2;^]^ '_ "' .fS^^'^'^'^
--'•'»■-'■' - —■-..- ^ "„ " .W3\f>1t>.i'i
Cs>^tn^En(la^fJw^rf^^port!^J^lcriod.._.__ _J^___ ""' j ? 2 *) ,7 8 3 V -i$
SF.CTION D— DEDTS AND C3LICAT10N8i
Pirt II. rivlUar«It.(.nir=ilfcaCTrta!J«Uv«coniiiiilI« (ic.«;-.,-..-V,.-:i , .„.;, v~»
Ps rt 12. D. b!s a.-id obi;siit!tr« 3»^-J ij, lie tsTTiralllt* (a.w a -•>i=-*^a.«yi. V^ X' )
7886
ntPORT OF RECKlin-S AND EXPENDITURKS
■; "FOR A- ,'■■■-■ :"■ ■■■ ■,•:' .
SL'PPt>KTi,N-G ANY CA.\DlDATK(S) ' tXiR KOMINATIOS OR ELKCflON TO TilK
, . ,^'>'11'KD STATPS 510USE OF REPHf-SENTATUES
|; in
W^ ■
o
-^ B^El4?3rJfir^]iCAWPAlGNj:;^ TEE
. . TvrB or RKrosT
O fM .... - ....
1 l^-Jl^osj^jiiL-iii^
B.
e!*ctivg Ml &x;,Vi?^v,:
CI Ter,
'. ■■."•,>" V '^"^' *^"*f* '*'*T^" '^* '**t5< ^ r*'''<'?^'«'^-. ■ .^'-'^.t^^^^^^^^^ £? ;v
\ V.M!HeAT!ON py OATH OB JlVViHMATlON
that th^5 R*pL>rt ef R«cipU»»4E:tpfn.1itur»»Ucx-rn^Vt^tru«;ift4(f^xTt^^ ^ ' V^^t' ->
^.'
W.AtAjrt«, Wf'iiMiiJ';";"'^;
7887
■ S C-MMAEy BKpbKT COVK.'li.SG fJilUOO yp.vM .Or L-tv.?.? j ,. i; ;2. . THr.U . .:
SKCl-lON A— RECiClFTSi .;' ' ' ..■,,, ' i
'"*;»- IUiT:ir<J(ui* scVT^^Te A*) '...^ .■-:- — .:-:, ' ...».., 13 ,SCX!.OQ .
h. U.lIljrrJifd .: I'.. 1,923.00.
I'irt 2. Sj:-3 ar,') <'.>l!.-r'.;irj: . ...
^ I;*.T:-.t:pJ (use !5c5i*ylule A^) — .J-.^, :.l ? ■ ^ ';-^
r«i-t 1. (y,\:<!l rritiy'j (HU!.ii,rv\x'.nt,',:-.\t:t.A,t'U\: ^^gg
». rtctn;iH(Dse*.>i'-*ii!t A.') u ;■_:.:.;. . ;.. .'. ... .._.;... .. ».;..:__. ..... .. /=V;*
'■ \ b, rn:t-n.b«l._ :...-..,._..:... ,i...... »_.!i56..03 ,. , ,:..-:#S
<>*
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Tor^L F.vxKtirs »2J?,i'-J5..as._ { n7>ai.55.
T<^al fip^t'Cts'^* for I^tt^Ja-a? w-v cr*, -* '•^
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7888
o*^ o-'^J UNITKD STATES SENATE
^^^ ^ ^ '•'* O'^.ct of iht Stcctlirj of the StT^tt
'^'vi^,'' RECEirrS AND KXPEX0ITURR5 REPORT ^
<<?V5 , OF COMMITTEES •
*^ '^' > SUPPORTING CANDIDATE (S) FOP. XOMINATIOX OR FOP. FLECTION
AS UNITED STATES SKNAVOR
KajT.'of Cojiunjttcc !li*_b'^AV?5i*l-?/^PV^ySf? .-?" •'^'f.^il J<?!?'.H^i£-
AddreM__./'45 Old Senate. Off ice'^lldini^ ^ .. ' .1_^J_:
■ , • tfashtrgtoti. P.C^ MilO ..._ , . ].' 1 .. !
Attn: Mr._T*jdor_Whltonj Tte-v^'-r^r ._ ^^^ _ u.-.-.«A.«n v> .w*
c/o The First Kjtio.ial 3 -■ k of VjsSi.-sgtoo ~ - ■ ■
1325 C Street. N.W. ' . 53-OH?.i38, S-0<>:000,:», }
KEiXiJIT IDEXTiTY
Ifj (?ee Paragraph A un'ler "Cer.cral Ir.fonrwitlcn" on ^^.e l-v:« of this pife.)
»A (f') PerodJc report due: Marth 10 S'Jr^embcr 10
(CT«-lt or.») June 10 \ jA-iuar>" 31 _S
, (b) 1st rreelcctkin report due 15 days bpfore the (c) 'Id Frt-Of?ction rerert doe 5 'Hyi before the
J General Elwli'.n c>n__ . _ . . . CeocnU ►Section orv
■ Spe'ial FTi<cti.- n OR _. . - .. . Sr<^r:,i' fr'Xr;"'in >n
V
M
Pr-i .'irv Klf^-tion 'in
n-:r'. • KI -A, ■ .^n
^•■J ' ' .' ■' :-• . '?o ■<: I'lH-t ri,v>rt T-r:',!n..
O
O
VERinCATION
nv
OVTil OR AFFIRMATION
Sictp of
Cojr.ty i.
D
str
let Of ColuaHa
I _ .
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'PS^KTV.i) •iFTrt f;T AND ATTACHMF-NTS XO;
7889
SOCIARY F.EFC>ST COVrSING PERIOD s^.OM J^ii^Z-^JS^xll2-'i}lRV -^^^.^rr'iKiX^ A97A
l-CTl .V V— ^ECTjrrS:
I. !lr - :«d II*- J--.V<i J« A*
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rf. 4.
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;ri-err<, r*-; ;
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.'■>i.37 f 2,?0U,2;6.92
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o-b - ■• ■-' ■.■ • : --' i^,- r-r--.i I,:.' Ji/;: ^ ^9?, '-.:■-, '■Q
7890
^ V>%%ia Mi'^r.:0a QPnat
¥X'mm%\^ii&>i vuii> Viwm '^h® iy^i^Au ^wrum m^m^nm ^m
'i^ui ',i'/!L%'iukm% '^-^T^^in^si £s'-5£f»>--.-is^ 'i-mfti''tMra
>>V; <U3 Ssr^^a i^^'riii^ ft^i-'MU ;
Your /*pcn of rsctli^tJ And £^p«xv21t"raa r«» b9jr» irv:»ly«d, 4)
r>rrl«* of th« rsj^rt lr*41c»t»» ctslajton* or ^erov* wiriich ««y.d-l bs c«v'i«jV«4
i»/ ftd'liti'Mvtl ■ubalfaicnj •« lndl-:al«d:
_ ., y«llur« to u«« formj pkvs.?rlb«d by this Offlog.
(a«i'Uwalt 8#ft»te El<»ci-. Ion r-ira # _ )
OiAi.t! 't of •'jpportln^ ochedulffCa).
"(Sufealt 8ch«daLe(f)__^ P»rt(B)_
_^>aloiilon of required fiil* on rfcelpto;
"Part (a) , :;rf>e^ U.e(o)
Itcm(d)
Cffllaslon of requln^c* data on expenfllture*:
>art(i) , Srhe.«ule(ii)
Ite«(B)
Other; ^^^ ^^ /^.^^,y^. t .^V f*^^ ^ /»rV.-. -^
Y'jyu- Initial subalaalon tmn town alcroflljwd »<<g»WH ^H»^h ■ uupyngT"
-_»... iM — ^ — -«■«. >^.4^- J..*!.. -<<>!> ..» »>M vkHmmI Kl^ation t'aBo4HB
7891
SENATE SELECT COMMITTEE ON
PRESIDENTIAL CAMPAIGN ACTIVITIES
AFFIDAVIT
DISTRICT OP COLUMBIA
I, John A. Elmore, a resident of Washington, D.C., being
duly sworn, hereby depose and say as follows:
1. I have been a member of the Select Committee
since April 19, 1973 to present.
2. In the course of miy duties for the committee,
I prepared a chart (Exhibit 1) which lists the
serial numbers of sixty-seven 1969 series, $50
Federal Reserve Notes, (hereafter collectively
referred to as "the $50 bills.") and for each bill
indicates; 1) date shipped by the Bureau of
Engraving and Printing to the Federal Reserve agent
of one of the Federal Reserve Banks; 2) the location
of the recipient Federal Reserve agent; 3) date
issued by the Federal Reserve agent to the Cash
Division or Branch of the Federal Reserve Bank and
4) date issued by the Branch or Cash Division of
the Federal Reserve Bank to a Commercial Bank.
3. Exhibit 1 was prepared from docimients procurred
by this Committee in the following manner.
A. Upon Committee request, Charles A. McNeils,
attorney for E. Jake Jacobsen, furnished
a copy of an inventory (Exhibit 2a and 2b)*
taken by the Federal Bureau of Investiga-
tion on November 27, 1973, which lists
the serial numbers of Federal Reserve
Notes contained in a safe deposit box
belonging to Mr. Jacobsen. The serial
numbers of "the $50 bills" (column one
♦Exhibit 2b appears as Jacobsen exhibit 18, Book 15, page 6488.
7892
of Exhibit 1), vrare obtained from the above
described llct.
B. Upon Cornniittee requeat^ the Bureau of
Engraving and Printing, furnished docum=^nb9,tion
which reflects the date each of "tlie t^O bills/'
v/ere shipped to a Federal Reserve a^ant and the
location of the Federal Reserve Bark to vrhlch
the agent v;?.3 assigned.
C ."^ Upon Committee request j each Federal Reserve
Bank involved furnished documents vrtiich reflect,
to the extent available, the dates tiie re-
spective $50 bills they received were issued
to their Cash Dii/ision or Branches and the
subsequent dates, to tlie extent avai].a.ble,
the bills were issued by the Cash Division or
Branches, to a Coraraercial Bank.
4. I certify' that to the best of my knov;ledge
the chart (Exhibit 1) accurately reflects the
information r.s supplied by Mr. McNeils, Liio
Bureau of Engraving and Printing and the
various Federal Reserve Banks.
ASl.ZL^
ill A. Elmore
Sv;orn to and subscribed
before riie, this day the
27th day of June, in the
year of our Lord ninteen
hundred and seventy-four.
Notary Public
^fiau^
My ooramlssion Expires
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7894
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7895
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7896
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7897
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7898
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7899
EXHIBIT 2a
viNCEhta.w^LCH WEtcH S: Morgan cha«lesa.mcne
eowARo p, MonoAN Attorneys at Law °'' ^^u^s-l
EOWARO J STEGEMANN 300 FaRRAOUT BUILOINO
OcflALD S ROUPKE 9OO SEVENTEENTH STREET, N. W.
WALTER M SWEENEY WASHINGTON, D. C. 20006
THOMAS M P CHRISTENSEN
JOSEPH M MORRIS3EY AREA CODE E02 CAOue »ODRe»»
RAYMOND J SHELESKY 296-5l5( "WAS H1.AW"
MICHAEL S. YAROSCHUK
WILLIAM V. MORGAN
SAMUEL M. BRADLEY
December 3, 1973
Mr. Alan S. Weitz
Senate Select Committee on
Presidential Campaign Activities
New Senate Office Building
Room G308
Washington, B. C. 20510
Re: Jake Jacobsen
Inventory of $10, 000. 00
Dear Mr. Weitz:
Enclosed, pursuant to our conversation of last week, is a
copy of the inventory, taken, so I am informed, by the Federal Bureau
of Investigation, of the currency contained in Mr. Jacobsen's safe-deposit
box.
I note that the inventory reflects a total, not of $10, 000. 00, but
of $9, 950. 00, i. e. . two hundred and fifty $20. 00 ($5, 000. 00); ninety-one
$50. 00 ($4, 550. 00) and four $100. 00 ($400. 00).
Mr. Jacobsen assured me today that the Bureau agents did count
a total of $10, 000. 00. Presumably, one $50. 00 bill was overlooked in
compiling the inventory.
Very truly yours.
k— — <;harles A, McNelia
Enclosure
cc: Jake Jacobsen, Esq.
7900
UNITED STATES SENATE
SELECT COM'IITTEE ON
PEESIDENTIAL CAMPAIGN ACTIVITIES
AFFIDAVIT
I John Goggans of 3hO& Wendell Drive, Fort Worth, Texas,
depose and say as follows.
Since ---- c^/- -pz^ , I have teen employed as
a pilot for the Tandy Corporation, FromXjy-c;:'/ - / Q
until J?/- -S"/- '} ^^ , I was employed by Associated Milk
Producers (AMPI) to pilot their aircraft which included
a Sabre Liner Model 60 (license number N96IR) .
In the normal course of business myself and other
AMPI pilots maintained daily aircraft flight reports.
I have exanined and initialed the attached copies of the
daily aircraft flight report (Attachment A) for the Sabre Liner,
furnished to me by the U, S. Senate Select Committee on
Presidential Campaign Activities. Also, I have initialed
and attached true copies of my personal flight log (Attachment
B) for the corresponding dates.
To "the best of my knowledge, the attached AMPI daily
aircraft flight reports are true and accurate records of the
points of origination and destination for the flights imdertaken
in the Sabre Liner for those dates. However, they may not
reflect all intermediate stops on such flights. To the
extend that my personal flight logs reflect intermediate
stops for such flights, my logs are true and accurate records
of such stops.
7901
For exarp.ple, on March 12, 1971 the AMPI Jaily flight
report (includai in Abtacbjuent A) shows that the corapany
Sabre Liner which I piloted on that day flew from ;.-:an Antonio
to Washington co 3-=n Antonio. My personal flight log for
o'lat particular date (included in Attachment B) indicates
thao I piloted the iplane from San Antonio to Austin to
V/ashington to Little F-ocli to Austin to San Antonio. ThuG_,
on March 12 the company Sabre Lin.er flev; from San Antonio
to Washitigfcon vrith an inteiTnediate step in Ausoiii and
returned from Washington to S-an Antonio v;ith intermediate
stops in Little P.cck and Austin.
There are a couple of inlaor exceptions noted and initialled
by ms in Che a t cachnents.
John Goggans
7902
,
AH
E
OF AIRPLANE ^
^
/?T-/
ASSOCIATED MllK PRODUCERS, INC.
DAILY AIRCRAFT FUGKT REPORT
MODEL J- C LICENSE NO. H
TIME 1 TACHTIMC IrLTIKC
y/
z/'
DATE
3/.-
-> / y
t
1.
S.-'T"
pen
=
= =
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4.
5.
6.
\
— i
L
ISl P_
ISSENGERS AND "X" FLIGHTS MADE DAILY TOTALS
/
'7
r
7^
.2
S
3
6
TIME - HOURS AND TENTHS OF HOURS
«
5
'
T
2
5
3
e
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.e„EHC.
P..HTt^
.«.
■ ^Tc"
7
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5
6~
3
6
3
T
2
S
3
6
Tll/E BROUGHT
FORWARD
?V>',
•.^•■i'^
?/V^< <■
2
3
TODAVS TIME
(■■'P\
/ y
v.-/
r
5
6
3
TOTAL TIME
'^JS-J L
? <^ i/ . IJ
1 ^~
4
S
L?
1
'
/
IHSTRUMEMT:
OMNI CHECK: NO. 1
ASSOCIATED MILK PilODUCERS. INC.
DAILY AiriCnAFT FLIGHT TJEfOUT
MAKE <
3F AIRPLANE
■/'
/
MODEL
c
LICL
NSe NO. M ''V //>' DATE
' /
/;- / ,
7/
FLtCMT
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«. ENO.
MICES
1.
2.
3.
4.
5.
/ r
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.-■/.-' ->
1
f'
6.
LIST P
ASEENGERS AND
"X" FLIGHTS MADE DAILY TOTALS
1
r'f-
1
2
3
1
2
3
TIME - HOURS AND TENTHS OF HOURS
4
S
2
6
3
S
6
1
2
3
AIRCRAFT
LEFTCNC.
OIL CBA«£
stMce
4
S
G
S
6
1IIS*CCT<;
1
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6
2
3
TIUE BROUGHT
? 7f. .T
?7(.<
77/, ^
4
S
6
1
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"s
3
2
3
TODAY'S TIME
/-r
i.c
A^'
4
S
fi
1
2
3
2
3
_4_
5
6
5
6
-_...-
L
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''i • * 1
7/-'-
' 1
1
HSTRUMENT:
OMNI CHECK! NO. I
^^ i/M
Me
/<; .- /-
/.'•/■6
7903
ASSOCIATED liM.K PSOOUCEflS, INC.
^ DMI.V AiaCHA?r rLIGlir BEPOar
-E OF AlflVI-AMg '^ /'' KS ^ '/J' <■ MODEL j- ^' LICEMS!; MO. M VL- .' '' OATE "? ~ / \' ' / '
ASSOCIAFCO /.'.(IK PKODUCtKS, IMC. ,/'
DAlur AinCKAfT FCIGKr rtport
AI.-l^LAHc.,V/iVv''.",'l7.Iy- j^'^-'•"'^°^■l- t'f/- LlCKNf.E MO. M ^/<^- / /\ DATE V ~ -^.^' ~ <^ /
i\:;7~^
•c
i'^.5
;.>/y.
SEMGKRS AMO "X" FLIGHTS MADE
if "'
DAILY TOTALS
vr,
■ -JlXJ
IHSTKUWeMT:
TOOIT'S TIME
•7,
^
<<■
^ni
6.^
^Ali
1 TIME - nouns AND rCNTHo Of HOURS
i/C Si-
TOTAL TiMe !;<> y I.7V/, 4.h?j:/.j:^
//r_s:
iiL^
OMNI CHECK! NO. I
HCHARKi:
L^yZJ,,^^
7904
<E OF AIRPLANE
ASSOCIATCD MILK Fr.ODUCERS, INC.
DA.ILY AIRCRAFT FLIGHT REPORT
hr\, "rMODEL / C LICENSE NO. H d f- I V DATE ? - 7-^ / '
FUICMI
DEJ^VrSne
POINT OF
TIME
T.CH TIME
fLTI'-C
TlW
t
T««"c»
'"oil 1*
rtn
0.
[rLo"~
f-**S
NO.
ARRIVAL
Ot>ARTURE
ARRIVAL
IM
MRS. ,
L. ERC. R. CI^G.
wfUES
1.
Vc f)
^CC
'iy>,(
'■"^\
7,
■/-^F
/ / '
2.
'
3.
4.
5.
6.
— =
-—
LIST PASSENGERS AND "X" FLIGHTS MADE DAILY TOTALS
(■
■3
2
5
.3^
6
2
3
s
6
T
2
S
3j
6
V
2
s'
3
6
A,»C«.FT
„<=.TE.C.
oil1"«h
i.'^t:- :
_3_
2
3
TIME BPOUCHT
FOR«*RO
^■o.^.
■ y'.f.
J-.- s /■
5
6
T
2
3
£
V
2_
_3
6
3
6
TOD^Y-S TIME
/• i
1 -T
^.
2
S
3
V
2
5
TOTAL TIME ? <; .
( •
MSXnUMt^lT
f-. K.i-jc* — —^—r—-'— — — *-
_^c_j:^
ASSOCIATrO MILK P.RODUCERS. INC.
DAILY AIRCRAFT FUGHT REPORT
. MAKE OF AIRPLANE $ ^'"y/- '/ /\i'r P MODEL /. f" LICENSE NO. H // / / DATE "' ^-- '/■ ' ~7 ''
5.
LIST PASSENGERS AND "X" FLIGHTS MADE
Trirl"
.ruR. L_.i.Riv*iJ„o.u._J
■ms
^■■fr, <,-y'rli
iVv f
DAILY TOTALS
< , s ;s
xjira —
« 1 s i bI
ri2 3j—
TODAY'S TIME
TOTAL TIME
^Gi
7^
// ;. 7
ZiZ
/;•'
::
TIME - HOURS AND TENTHS OF HOURS
-.■* / '
■/./
^^
i^i'X
:|r!:
_A.-^ J - ;'/. ^^^
7905
ASSOCIATED MIIK PRODUCERS, INC.
DAILY AiHcnAFT FUCKT ncponr
«C OF »1HPL*NE_.
*^» r' ,- f V- MOOEL /^ <"' LICENSE NO. N //' r. DATE /• '^' J_'
1.
7.'
- ■ '
i.
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L ....»»t~
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y-.'V.i
z
T
nth
J.11T P
tSSENCERS ANO "X" FLIGHTS MADE DAILY TOTALS
>
1
jT'T^
7
2^
5
»
TIME - HOURS ANO TENTHS OF HOURS
2
3
AIRCRAFT
ueFTc-«.
., = HT«..
.ll'"".C
9'«C
4 > •
S
S
l.:>t;
-' . '-1-1.
V
s
3
•
TIME BROUGHT
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.c.'^.^.-: /
r<^i:/
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V-iTf
2
1
TODAY'S TIME
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6
1 III
2
3
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OMNICHCCK: MO. I
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S
^<>g^'/?A/'S
A5SOCIATE0 f.'.ILK PRCDUCEitS, INC.
DAILY Air:cnAt-T FUGHT REPORT
/ -•
LICENSE NO
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' '('
DATE
A
^ -
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.™,.^ j-_^„-^„. -( J,
„,.-.-„„-
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A5tE..GERS AND"X" FLIGHTS MADE
DAILY TOTALS
1
rf ' J ■ ■
rin
i i
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^:".X^;^
5 S
.,»C,AFT
.,«,E...
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1
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1
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OMMI ClieCK: NO. I
-^^
7906
ASSOCIATED MILK PRODUCERS, INC.
DAILY AIRCRAFT FUGHT REPORT
:■=
3F AIRPLANE '^/l 7^ P- (Z
_
MODEL^f'/.- ^
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LICENSE NO
N ^7/^/^
DATE
/V^/p^'/z7
1.
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p
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^72
A/7-;
5:v/.v
■
2.
3.
4.
1
5.
:
6.
-iST P
ASSENGERS AND "X" FLIGHTS MAOE DAILY TOTALS
2
/,
<?7?'-
/vr
y-;/^
r r'AY
T
T]
[T]
\
2
S
3
6
AIRCRAFT
LE.TE.C.
R,CH,£«.
oil""!,.
i.wi'c'c.
-\
_2
1
^
TIME DBOUCHT.
rORWARO
///■■/
///./
//A/
1
i
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3
TODAVS TIME
27
7/^
7 Y-
1
-*."}I«r
^
2^
S
_3
6
TOTAL TIME
///• ?
//,<'. 7
//7,7
1
1 "* -
i • ' . I
( ' ' '
1
INSTRUMEMT: NICMT: OMHt CHECK: NO. I MO. 2 |
U:
-
1
L.^,-i^/^
(^^ /1N7F^ aI ftifi;.!
2.0 PILOT
1
p
7907
^
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r/^^;
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'■
AIRCRAFT
Flicjhl
No.
1
1 From
To
D„ra.
Pilot In
Da,
-
-, / Ident. Cjlegory
No.
Type 1 CU»
of Trip
mand
Night
1
j?^(<,',Ti'ir-w r
7,-,-/. l''{i/ ] ")'//!» '.'
/ or
'•7<r.//-' jj-i^r....
AJ ^.-^t Ttr
\S^T^Jjr_
-j^A r
■^ ?
2- ■? ! 7 7
c- 1
5-/
;^r.i.!-r-
Dr_«9
3 r
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il-_;3 f i3
^.*^
7-7-
£^^. J^ l*>-^.<.v ■.
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Total Time to 0)le .
•73.^ ^^^^ r
53:;-.;, '-''^' >-'i//'-T 7..'
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Carry
Totals f
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c^/^
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>
INSTRUMENT
Dual Instruction
Croji
Country
Solo
REMARKS
(Instructor CertHic itlon. Maneuvers, Damage to Aircraft, eld
Actual
Hood
Link
Check
L.Recjl,
Given
R.c'd
a: !=■ 1
r?.-7
IS-
in U.I
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/J75.C
The Record on this Pajt is Certified Cotred
Pilot's Slgnatur.^-/V^ .-(^■^-.^^--^^ J
to Top of Next Page
ll\
7908
^
^/^ i*^
Date
197^
AIRCRAFT
Flight
No.
From
To
Dura-
tion
of Trip
Com " Co.PiloJ fi'o'
Day
Night
Iden*.
No.
Category
Type
Class
mar<d
Time
I?,-?-:; .?
//fi^r W ?
/J?v i?
«5-7.?
rv "
r-/z-
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Carry Totali Forward
! .^^ .^^
INSTRUI^ENT
Dual Ins
truction
Cross
Counlry
Solo
REMARKS
1 Instructor Certification, Maneuvers. Di
ma^e to Aircraft.
Actual
Hood
Lir>k
Check
Rec'd
Given
Rec-d
ff/'.S
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The Record on this P^e is Cer
Pilot's Signature;^ _,7y ,.<^^i,f.
tified Correct
7909
M __.^_.iL^
111""''
AIRCRAFT
Pilot In!
Com- 'Co-?.
j-y.-rl " r.
II |:;.ic^ ! •; 1.
I PJo, I „
i^±^ a/«^>. ^1 : .
7910
^^ ^^^
Date
9 7/
AIRCRAFT
Flight
No.
Frcm
To
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tlon ! Com-
of Trip mand
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Day
Nl,
Ident.
Category
Type
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Carry Totals Forw
7911
j Cdrry ToliU forward
'^^V
<:^^- j^;%^
INSTaUMENT 1 OujI loitrg'.lljn
Croit
Country
I REMARKS
Aclua' j Hood
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7912
^/^ ^i^
Dale
19-'
AIRCRAFT
Flight
No.
From
To
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tlon
of Trip
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Co-PiloJ ''''°*
Day
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No.
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Carry Totals
For-ard
7913
Austin, Texas
January 28, 1974
United States Senate
Select Committee on
Presidential Campaign Activities
Washington, D. C. 20510
The attached records reveal that telephone number 512-476-2544
is the working residence service for Jake Jacobsen, 2305 Sunny
Slope, Austin, Texas, 78703.
In addition, these records indicate that this service has been
continuously working from November 13, 1970, to the present time,
This covers the period of time requested by your committee.
The above statement is true and correct to the best of my
knowledge .
(signed) W. A. Hamilton
Subscribed and sworn to before me this 28th day of January , 1974.
Notary Public ^
Travis County, Texa^
30-337 O - 74 - pi. 17 - 25
7914
EXCHANGE
OROER NO
CR
TELEPHONE NO DATE
C 8452S I 476 2544
FORM
S-91071
REV. l9-62)
AU3-C
(D)
PG 2
TTR
9CMQX
3SMYX
EXTSP
SE&R IN:
l]\J
1 75
5 50
NC
NC
65
1 25
I 25
EXT-fcP dv/T^
EXTBG ^^
SE&R OUT:
1 FRLW
EXTS?
EXTYP
EXTEP
TT5"
1 25
— WT
Vk^
EXTQ^
BEC
5 FLU
9CMaX
3SMYX
^
-5~ '^ ('>-■. h>
f>)
THE END
'
TEL NO.
ISSUED BY CHECKED BY Xy^ \ pATE COMPL
DATE
OTHER ORDER INFORMATION
-J
7915
CR
CxrHANQE ORDER NO.
TCLCRMONC NO DATE
FORM
S-9107.t
, DUE REV (9-621
AUS-C
(D)
C 8 452S t-
476 2544
111 \1 70
III 13AMX
JACOBStN JAKEy .-
2305 SUNiW SLOPE (03)
SEE ATT
DK3
SEE ATT
n\^:
'^viiy
2 CC
7311 BW
^^ , ^ ^,
ISSUED BY
CHECKED BY
.^-^
DATE COMPL
OTHER ORDER INFORMATION
ih/^'^
/^b^- 7;r"7A c^-s -7;
7916
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
RALPH NADER, et al. ,
Plaintiffs,
▼.
EARL L. BUTZ, et. al.,
Def endents .
Civil Action No. 1U8-72
A FFIDAVIT
STATE OF MISSOURI )
CITY OF ST. LOUIS )
FILED
MAR 13 1972
JAMES LDAVEy^cierK
I, Clifford M. Hardin, being duly sworn, hereby depose and say
as follows:
1. I am a Vice-Chairroan of the Board of Ralston Purina Compai.y,
St. Louis, Missouri. From January 21, 1969 until November 17, 197.L,
I was the Secretary of Agriculture of the United States. As such, I
had ultimate responsibility for the determination of dairy price support
levels fop the marketing ye.u? 1971-1972 under the applicable statutes.
2. Section 201 of the Agricultural Act of 19U9, as amended
(7 U.S.C. 1446), authorizes and directs the Secretary of Agricullure to
make available price support to producers of milk "at such level not in
excess of 90 per centum nor less than 75 per centum of the parity price
therefor as the Secretary determines necessary in order to assure an
adequate supply." Section W6 of the Agricultural Act of 19^9, as
amended, requii>e5 the Secretazy "insofar as practicable" to announce
the level of support for mLUc "in advance of the marketing year or season"
(7 U.S.C. 1426). rhe level of support so announced may not be reduced.
In addition, the purposes of Section 204(a) of the Agricultural Act of
1954 include, among other things, to assure adeqxiate supplies of milk
and dairy products; encourage development of efficient production units
7917
as well as "stabilize the economy of dairy farmers at a level which will
provide a fair return for their labor and investment when compared with
the cost of things that farmers buy." (7U.S.C. lU46b).
3. On March 12, 1971, an annoxincement was issued at my direction
advising the public of ray determination to support the price of milk at
$4.66 per cwt. for the year April 1, 1971 to March 31, 1972. This was
the same level as was in effect for the previous year. The complex
economic factors which enter into a decision such as this are, of course,
not subject to any one interpretation. Indeed, based on the information
cind advice that I was receiving, a number of determinations, including
one to raise the support level to $U.93 per cwt., would have been
justified at this time. The initial determination of the level of price
support for milk as announced on March 12, 1971 was the subject of
major controversy even before it was made. Nevertheless, on balance I
determined for the reasons stated in C.C.C. Docket MCP 98a to set •'.he
support level at $t.66 per cwt.
•». At the time of the March 12, 1971 announcement of the price
support level, I was aware of substantial Congressional sentiment in
favor of a higher figure. Subsequent to the announcement of the i.it.66
per cwt. price support on March 12, 1971, such sentiment increas'sd notably.
A number of bills were introduced in both the Senate and the House which
would have increased the support level on a mandatory basis to as much
eis $5.00 per cwt. In addition, certain representatives of the dcL.ry
industry strongly urged that the price support determination be r« vised,
pointing to increase in daiiy production costs during the preceding 12
months. For example, at a meeting with the President on March 23, 1971,
various representatives of the industry urged an increase in the price
supj>ort level citing again the factor of increased costs to farmers.
5. The existence of such sentiment on the part of many members of
Congress and wide segments of the dairy industry led me to inquire as to
7918
whether sufficient weight had been given to those factors which we had
been aware of at the time of the March 12, 1971 announcement and which
would have supported a decision to establish the price support at a
higher level.
6. The meeting between representatives of the dairy industry. and
the President, inferred to in paragraph U above, resulted from an
invitation extended by the President in September, 1970, at a time when
I addressed a meeting of some 25,000 members of a milk producers
organization in Chicago, The arrangements which I made for key leaders
of the dairy industry to meet with the President were made in January,
1971, and the March 23, 1971 date was fixed by the White House on
February 25, 1971. At the meeting, to the best of my recollection,
the President made certain brief remarks to the group and a spokesmaa
for the group made a presentation urging an increase in the price si pport
level.
7. In light of the considerations noted in paragraphs U and 5 above,
I reevaluated the price support level announced on March 12, 1971 co the
basis of the reqtiirements of 7 U.S.C. 1446, with an increased focus on
the factors described in C.C.C. Docket MCP 98a, Amendment 1. Among, other
things, feed costs had shown a noticeable rise throughout the yeaj*.
In addition, there was some indication that the producers were considering
action, based on recent legislation, which would have had the effe:;t of
reducing the overauLl supply of milk. One other factor to which our
attention was directed was the fact that an increased supply of chesse
was needed to meet obligations under other programs and a higher
si^port price would tend to insure an adequate supply for these purposes
Such a reevaluation was not novel. Price support determinations for
particular marketing years had been increased in the past.
8. During the course of reevaluating the evidence, I had discussions
7919
and advice from members of my staff, including Under Secretary Campbell,
Assistant Secretary Lyng, and Assistant Secretary Palniby.
9. On March 25, 1971, this reevaluation of evidence pertinent to
the dairy situation, on the basis of the criteria in 7 U.S.C. 1UH6,
culminated in an announcement, issued at my direction, that the price
support level for the marketing year 1971-1972 would be established at
$t.93 per cwt.
10. The decision to set the price support level at $U.93 per cwt.
was based entirely on a reconsideration of the evidence on the basis of
the statutory criteria.
11. Neither the decision to reevaluate the $4.66 per cwt. support
price level nor the ultimate decision to establish the price support
level at $U.93 per cwt. was based on any consideration other than those
outlined in this affidavit. Specifically, at no time did any person or
organization promise or lead me to believe that funds of any kind cr
anything of value would be paid to me or any other person or organ:. za Lion
in return for a reevaJ-uation of, or increase in, the price sxipport level.
12. Being cognizant of the views of Congress, as well as the
views of the dairy industry and other industries affected by our p-'ograms ,
ifith respect to the administration of statutes relating to Agricultxire,
is, of course, a fundamental part of the Secretary's role.
'^kT^-^
Clifford fw. Hardin
Subscribed and sworn to before me this 7th day of March, 1972
Notary P
I
State of Missouri
City of St. Louis ^^ performed In the City of St lonti,
which idjolns the County of St IJMiis.
My commission expires : My Commission Expires i»nu»iy 2. 1973.
7920
UNITED STATES SENATE SELECT COMMITTEE ON
PRESIDENTIAL CAMPAIGN ACTIVITIES
STATE OF OKLAHOMA )
) SS: AFFIDAVIT
OKLAHOMA COUNTY )
I, JANE S. HART, being duly sworn, hereby depose and
say that I make this statement in accordance with my own mem-
ory and best recollection as of the date of this Affidavit.
1. That I started to work for Stuart H.Russell in
1958 as a secretary. I have been continually employed, and
I am now a general paralegal assistant. During the time
1969 through 1972, on my own, I sent out the checks to pay
bills, prepared billing statements, and made the bank depo-
sits. I handled most of the office work of a routine nature,
since Mr. Russell was away a great deal of the time travelling.
When Mr. Russell was away from the office for a protracted per-
iod of time, he would leave several blank signed checks. I
am authorized to sign on Mr. Russell's special checking account,
and in 1972 (when the professional corporation was organized)
I was authorized to sign checks on the corporate account.
2. During the period 1969 through 1972, Associated
Milk Producers, Inc. (AMPI) (or its predecessor organizations)
accounted for a very substantial percent of Mr. Russell's bus-
iness income.
3. In December of 1969, Mr. Russell informed me that he
had received a telephone call from Bob Lilly, an employee of
AMPI. Mr. Russell told me that Mr. Lilly wanted $5,000.00,
and that the funds were for the use of AMPI. Mr. Russell ask-
ed me to contact Mr. Harold Nelson, General Manager of AMPI,
so that we could check with him.
7921
•4. Someone contacted Mr. Nelson, I do not recall if it
was Mr. Russell or myself or both, and to the best of my recol-
lection, the following explanation was offered as to the re-
quest for funds. Mr. Nelson advised that the money was to
pay legal fees and expenses incurred by Bob Lilly for the use
of AMPI . Mr. Nelson stated that he had been receiving complaints
from AMPI Board Members concerning excessive direct home office
expenses, and that by using Mr. Russell, Mr. Nelson could les-
sen the complaints.
5. The first check for Mr. Lilly in the amount of
$5,000 (Exhibit A) was mailed to him on December 19, 1969. I
prepared a billing for AMPI on December 22, 1969 in the amount
of $8,000 (Exhibit B) . I attached a note to the invoice which
read something to the effect "Bob, this is the matter we talk-
ed about". I knew that Mr. Russell would have to pay the tax
on any money billed to AMPI. There was no fixed amount or
percentage, just whatever I happened to bill. Mr. Russell
did not receive repayment until January ,1970 . These trans-
actions did not affect reportable income for 1969, as Mr.
Russell computes his taxable income on the calendar year.
6. Mr. Lilly made a second request in January, 1970
for an additional $5,000.00. Pursuant to his request, on
January 16, 1970, I prepared a check made payable to Bob
A. Lilly for $5,000 (Exhibit C) and on the same date, a cor-
responding billing to AMPI for $8,000 (Exhibit D) .
7. These and other transactions were generally han-
dled in the same manner. If Mr. Russell was in the office
when Bob Lilly called with a request, Mr. Russell would han-
dle it; otherwise, I would take care of it . In either case, I
would prepare the check and with a few exceptions, on the
same date, a corresponding billing to AMPI. The word"cor-
responding" in the preceding sentence may not be entirely
appropriate, although to the best of my recollection, these
billings appear to represent recoupment, in whole or in
part, for the money turned over to Bob Lilly.
8. I also recall that on several occasions, Mr. Lilly
7922
requested cash and on one of those occasions personally came
to our office for the currency.
9. At no time was I ever informed as to the purpose
of the funds given Mr. Lilly other than as stated in Paragraphs
3 and 4 above, and I was never informed as to any disposition
made by Mr. Lilly of this money. Except for speculation, Mr.
Russell never discussed it with me, nor did anyone from AMPI .
It seemed like that after the first few transactions, it was
just another thing to do.
10. The following schedule reflects these and other
payments to Mr. Lilly and our corresponding billings to AMPI
for the funds:
PAYMENTS TO LILLY
BILLINGS TO AMPI
Check #
Amount
Date
Date
Amount
0556
$ 5,000
12/19/69
12/22/69
$ 8,000
0600
5,000
1/16/70
1/16/70
8,000
153
5,000
4/8/70
4/8/70
7,500
3238
a/
5,000
5/12/70
5/12/70
7 ,500
lOUl
5,000
7/16/70
7/16/70
7 ,500
1195
10,000
8/27/70
8/27/70
15,000
im9
5,000
10/23/70
10/23/70
7,500
238
5,000
11/10/70
11/10/70
7,500
270
5,000
12/14/70
12/14/70
7,500
1486
7,500
1/14/71
1/14/71
11,250
362
5,000
3/9/71
3/10/71
7,500
1434
1,000
5/28/71
5/28/71
2,000
527
1,000
6/28/71
6/28/71
2 ,000
578
1,000
7/28/71
7/28/71
2,000
622
4,000
8/24/71
8/24/71
8,000
678
3,000
9/14/71
9/14/71
6,000
1577
3,000
9/24/71
9/24/71
6,000
712 a/
4,000
10/5/71
10/4/71
8,000
765 a/
5,000
11/3/71
b/
847 a/
5,000
12/14/71
12/24/71
10,200 c/
Totals
$84,000.00
$138,950.00
a/
Checks made p.
ayable to Cash
b/
Could not locate invoice
c/
$200 due and >
owing by AMPI at
the time was
included .
7923
11. I recall that on at least one other occasion, another
employee of AMPI came to our office to pick up currency. On
July 6, 1970, Mr. V/im Hollowell was given the proceeds of check
i¥0978 (Exhibit E) dated July 6, 1970 and made payable to Cash
in the amount of $15,000. Two invoices of Mr. Russell (Exhibits
F g G) for $9,000 and $11,000 totalling $20,000 were sent to
AMPI on July 6, 1970. I do not recall who arranged for these
funds or why Mr. Hollowell was selected to receive the payment.
12. Mr. Russell's accountant is R.Boze Cooper of Okla-
homa City, Oklahoma. In connection with the preparation of
Mr. Russells income tax returns, I made a list, each year,
of all amounts deposited, amounts received in fees and reim-
bursed expenses, and all amounts paid out. I supplied this
information to Mr. Cooper who prepared Mr. Russell's tax re-
turn based upon this information and upon personal conferences
with Mr. Russell.
13. In 1971, when we had Mr. Russell's income tax com-
puted for the calendar year 1970, we realized that he was go-
ing to need additional funds from AMPI for the taxes on the
above described payments. Mr. Russell went to see Mr. Nelson
at AMPI to see if something could be worked out. When Mr.
Russell returned, he informed me that he had been given
$50,000 (Exhibit H) from AMPI.
14. On the same day that Mr. Russell advised me that
he had been given the $50,000 (Exhibit H) , he requested me
to prepare a Loan Agreement (Exhibit I). After a later re-
view of the same, I called Mr. Russell's attention to the
fact that if something should happen to him, his estate
would be liable for the unpaid balance. Mr. Russell had me
add an addendum to the loan agreement , whereby the debt
would be cancelled in the event of his death. A copy of the
amended agreement (Exhibit J) was forwarded to Mr. Nelson
for his signature.
15. Mr. Russell's monthly retainer from AMPI was in-
creased from $1,000 to $6,000. The retainer was increased
^
7924
for twelve months beginning on April 1, 1971, and terminat-
ing on April 1, 1972 (See letter - Exhibit K) for a total
retainer for that period of $72,000. After April 1, 1972,
he was compensated on a straight-time billing basis.
16. Mr. Russell made six payments to AMPI on the Loan
Agreement from June 1971 through November 1971 for a total
of $16,666.68. No other payments were made. In addition,
on April 18, 1972, Mr. Russell received a check from AMPI
in the amount of $66,321.48 (Exhibit L) which represented
a settlement of legal fees et al.
17. I cannot identify all the billings from Mr. Russell
to AMPI covered by this settlement. However, I can identify
one such bill, dated March 16, 1972, in the sum of $38,639.66
(Exhibit M). The problem of additional taxes also existed
for 1972; however, since AMPI did not reimburse Mr. Russell
for that year or tell him to whom the money was paid for le-
gal services, Mr. Russell paid taxes on all money received
by him from AMPI, except for reimbursed expenses.
18. Mr. Russell provided legal services to AMPI
until October, 1973.
19. The attached Exhibits A - M described below and
referred to in this affidavit are true and accurate copies
of the documents.
EXHIBITS
A. Check number 0556 (front and back), drawn on
Account 173 238 2, dated December 19, 1969, and made payable
to Bob A. Lilly in the amount of $5,000.
B. Billing to AMPI dated December 22, 1969 in the
amount of $8,000 for professional services rendered.
C. Check number 0600 (front and back), drawn on
Account 173 238 2, dated January 16, 1970, and made payable
to Bob A. Lilly in the amount of $5,000.
D. Billing to AMPI dated January 16, 1970 in the
7925
amount of $8,000 for legal services rendered.
E. Check Number 0978 (front and back) , drawn on
Account 173 238 2 dated July 6, 1970 in the amount of
$15,000 made payable to Cash.
F. Billing to AMPI dated July 6, 1970 in the amount
of $11,000.00 for professional services rendered.
G. Billing to AMPI dated July 6, 1970 in the amount
of $9,000 for professional services rendered.
H. AMPI check number 601U dated April 1, 1971 and
made payable to Stuart Russell in the amount of $50,000.
I. Promissory Note dated April 1, 1971 signed by
Stuart H.Russell stating terms of a $50,000 loan to Russell
by AMPI.
J. Copy of the said Promissory Note as described
above (Exhibit I), but with addendum cancelling the debt
in the event of Mr.Russell's death.
K. A letter from Stuart Russell to Harold Nelson
dated April 21, 1972, confirming oral agreement ending re-
tainership agreement and initiating a straight-time reimburse-
ment basis.
L. AMPI check number 4540 dated April 18, 1972, and
made payable to Stuart H.Russell in the amount of $65,321.48.
M. Billing to AMPI dated March 16, 1972 in the amount
of $38,539.66 for professional services rendered.
20. I have given this statement voluntarily, from
my best memory and recollection, after reviewing the documents
mentioned above and attached to this Affidavit.
HART
Sworn to and subscribed before me, this the lUth day of
March, 197H.
NOTARY PUBLIC
My commission expires;
7926
<S2
(; fe O
2 -J
H ^ :^
to S o
^vWa^Jeft
(2^
2rHE j^LDenut national bank
-AND TRUST-COMPANY OF OKLAHOMA CITY
0 556 V -•«•
executive rr^
- clubka
December 19, 1969
PAYTOTHfc--"
~ Bob A.fTLilly ■
< 5.000.00
***FIVE THODSAND and'No/lOO*** . - — "-^ \ -' :".■:.. ^^^
■ . -
r
- - : - - ;
5"r
--- - - - ■
jj^^(^..^
■ _ - .
--
i:i0 30;»ooiqi:
H'l7 3 2 3a gu*
.•'0000 500000.''
pi- ?AY ASy BAHK, KtS." £:» S
^ '. - - -~> '" " I- " p; PAY ANY E^K, P gc o.5'^t=-
^ JAN :>^- ^ FRD S3NSNTi?iLS5^
ASSOCIATED MILK PRODUCERS, INC.
AT7E;I7I0::: •-fr. 3o'q LilVi
Box 32287
San Antonio, Texas 78216
Oecenhsr 22
^vu-^fi'
Q^
TO Profession-al Services rendered in connection vi^h
Alamo Milk Producers Association and Federal Trade
Commission litigation $3 OOJ 00
J
II - ho
7927
IvVJUj^C'
g^
THE J^iOenUj NATIONAL BANK
AND TRUST COMPANY OF OKLAHOMA CITY
Boh -A. Lilly
- ■ 39-l»
■"^ 060 0 '"»
executive
club
.TnnnnyiJ If!, 1970
:^l
*FIVE THOUSAND and ffo/lOoPtRO'
ED i
$ 5,000.00
STUART H. RUSSEU. - ATTORNE"i
i: lOJQ'i'OQlHi: ii"-l73' 2 38 Eu'
.'•OOOOBOODOQ.''
■ si-w -s - x-5;
Jr AV '," ~
^u>an
January 2C, 2 3?C
ASSOCIAT-'D .-/ILK PliODUCSRS I'lC
San Antonio, Texas 78216
^'1 I
1 ^
70 Legal Services Rendered -•'„ ,-'
States (IPS) „=, ^ • '-^ ^'^^s °f United
(no:. A^!Pl] [ "' ' ^^^^^^^^er Dairy Cooperative
S 5 ,000. 00
S < -A H
7928
uj^e9^
NATIONAL BANK
^^•:a AND TRUST COMPANY OF OKLAHOMA CITY o....^ulu__6^,^[9?0_
nof.^ Cash
0978
execuiivei
M
ID and irdytOO~-- ^"^ " Q Q F" n I
I — -•• - + "Cn-t I A n
""STUART H. RUSSELL
1 5.0 0 C.OO-?:?
•:i0 30...ooiq.: „.i?3 j3a sn-
.''000 1500000/
<tvV*JU>
r
Jw-f;/ 6. ;970
AssocrArep.,Mii.< producers imc
ATTENTION: !U. Rnb l.UnJ '"
SokTzITT " ■
San kntonio, Tzxai, 7i316
r-
J.
■/"/.
TO P^LO^ziiZonal Se>[i
0 P&th, ot n'f --'"t''" ^,i-'^dzKzd In thz ccie o< Dane.
■ iJJ.000 .00
7929
■^c9^
t/VjLJk-
July 3, 1970
ASSOCIATED MILK PRODUCERS, INC.
ATTEUTIOtl: ffr . Bob Isham
Box 32287
Sun Antonio, Texas 7 8216
TO Professional Savvices Rendered in the case of Geo.
Benz & Sons, a Minnesota corporation, vs. Twin City
Milk Producers Association, Inc., et al . , Unified
States District Court for the District of Minnesota,
Third Division, Case No. Civil 3-o3-231 $9, OOP . 00
7930
/^,<^'ji]!/\i cu i.ilLii i-'ilGilUClii-lG, ii'C,
PriON: A/C 512 2-1!-:;5l TSIEX 76.7.U6
P O. BOX 3i2B7
SAN ANTON-IO, TEXAS 78216
r>: ';">'i"" '-r ;■■ ': % ^ H 1"? >n /> jJ^s x> rv*"-* cA^t^
7ipril 1
5v3?i?Jr r.CSSFLL • :;i
c:'j,r.>;o::A city, OKLAiioyjv 73102
ASSCCIATtD MILK PRODUCERS, i.NC.
ASSOCIATED MILK PRODUCERS, INC.
STUART H. RUSSELL
Attorney at Law
2309 First National Building
Oklahoma City, Oklahoma 73102
4 0 5/236-5991
" .f
\
.J
'^
L~ I- 7/
7931
^LLtuil
ERO[liSSORY iQIE
Oklahoma City, Oklahoma
April 1, 1971
ssoVooo.oo
On the 1st day of October, 1972, for value received,
I promise to pay. to associated MILK PRODUCERS, INC., GPM Build-
ing, San Antonio, Texas, or order,
FIFTY THOUSAND AND NO/100 DOLLARS (SSOVOOO.OO)
WITH INTEREST FROM DATE AT THE RATE OF SiX (6) PERCENT -PER ANNUM
to MATURITY AND WITH INTEREST AT THE RATE OF TEfi '(10) PEFitENT
PER ANNUM FROM MATURITY, AND TeN (10) PERCENT OF'- PPINCtPAL AND •
INTEREST IN ADDITION THERETO AS ATTORNEY'S FE£S^i'N--CASE-. THI-S
NOTE IS NOT PAID WHEN DUE AND THE HOLDER THERSOF: SHALL PJ.ACE
THE SAME IN THE HANDS OF AN ATTORNEY FOR COLLc^JTT'ON , I KEREBY
WAIVE PRESENTMENT, DEMAND, PROTEST AND NOTICE OF PROTEST FOR '
NONPAYMENT OF THIS NOTE, AND AGREE THAT ANY EXTENSION OF TIME
OR RENEWALS OF THIS NOTE SHALL NOT AFFECT MY LIABILITY, WHETHER
I HAVE NOTICE OF SUCH EXTENSION OR RENEWALS OR NOT.
I PRESERVE THE RIGHT TO, BUT AM NOT Q3L1GATED TO,
REPAY SAID LOAN IN MONTHLY INSTALLMENTS OF $2,777.73 PER MONTH,
TO BE APPLIED TOWARD THE PRINCIPAL OBLIGATION.
-'■ ThIS^ DEBT IS INCURRED PRIMARILY FOR A BUSINESS PUR-
POSE AND NOT FOR A PERSONAL, FAMILY, HOUSEHOLD, OR AGRICULTURAL
PURPOSE. '
7932
CLykJoJr 3
Oklahoma City, Oklaho:"a
April 1, i97i
$50,000.00
On the 1st day of October, 1972, for value received,
I promise to PAY..TO ASSOCIATED .^ilLK PRODUCERS, INC., GP;-. Build-
ing/ San Antonio, Texas, or order,
. FtFTY THOUSAND AND N0/4L00 DOLLARS ($50,CGO.OO)
WITH IMTEREST' I^I^M DATE AT' THE. RATE OF SiX (62 PERCENT PER A;;:;l."
TO MATURITY -^^rSD'-WITH INTETx'EST AT THE RATE OF 1 EN (lu) PERCE.NT
PER ANNIIM-FTRQMV'.ATIJRITY, T^ND TeN (10) PERCENT OF ?Rir;CIPAL AND
INTEREST ]T> AdDITIOM THERETO AS ATTORNEY S FEES IN CASE THIS
NOTE IS i!0'r--PAID WHEN DUE AND THE HOLDER THEREOF SHALL PLACE
THE SAME IN THE HANDS OF AN ATTORNEY FOR COLLECTIC::. I HEREBY
WAIVE PRESENTMENT, DEMAND, PROTEST AND NOTICE OF PROTEST FOR
NONPAYMENT OF THIS NOTE, AND AGREE THAT ANY EXTEr.'SICN OF TI.XE
OR RENEWALS OF THIS NOTE SHALL NOT AFFECT MY LIABILITY, WHETHER
I HAVE NOTICE OF SUCH EXTENSION OR RENEWALS OR NOT.
I PRESERVE THE RIGHT TO, BUT AM NQT^CBLT GATED TO,
REPAY SAID LOAN IN MONTHLY INSTALLMENTS OF $2,777.73 PER fWNTH,
TO BE APPLIED TOWARD THE PRINCIPAL OBLIGATION,
This debt is ir^CuRRZD primarily for a business pur-
pose AND NOT FOR A PERSONAL, FAMILY, HOUSEHOLD, OR AGRICULTURAw
purpose.
In THE EVENT OF THE DEATH OF StUART H, RuSSELL
prior to MATURITY DATE OF THIS NOTE, ANY UN-
LIQUIDATED BALANCE DUE A.f'l.P.I. WILL BE WAIVED,
H.S. Nelson,
General manager
7933
STUART H. Russell
2309 FIRST NATIONAL BUILDING
OKLAHOMA CITY. OKLAHOMA 73102
y —
-/
V
405/236-599I
AIR MAIL
April 21, 1972
\'
J
Harold S,/><elson, Attorney
AssocJ^ated Hilk Producers, inc.
Box/32237
S^n Antonio, Texas 78284
Dear Harold:
This letter will confirm our oral agreement
under the terms of which the retalnership agreement
between myself and AMPI was discontinued effective
April 1, 1972.
Billings for services rendered from that
tirae forward will be based upon a straight time basis.
We have- Instituted a time record-keeping system-^ which
will account for the multitude of other regular legal
matters previously covered by the regular retainer.
Yours very truly.
STUART H. RUSSELL
SHRrjh
cc: R.O. Isham '-^
7934
y
Co - ■
^ -: :
Co «» - ■
C- 3 ...
vO r» <o
^::> 1^5 3
D •.- rj uj
^ ° 2 2
. !--^ 2
>^ ==
Co -■■
^ -. .
_^
<>v
go
I ,.
< o-
UJ Ou
H (-"
< zo
CO ^
<
«• I
^
^ \ i ^^
7935
^yJ^ .Jh,/ Al
'J
•V,*«5 *"r^ -»
f
Icin An ton i o , ^Taxas iZlMi.
• ;33>639.66 ..^
7936
U.S. SENATE SELECT COMMITTEE ON PRESIDENTIAL
CAMPAIGN ACTIVITIES
AFFIDAVIT
I. ^y^k<^/f ^^. Wh/Y^€OA/. being duly sworn,
make this' affidavil: for 'the Senate Select Committee on
Presidential Campaign Activities.
1. I am the Special Assistant to the Chief of
Protocol J U.S. Department of State. From September 1,
1970 to March, 1972, I was Special Assistant to the
President of the United States.
2. I hereby affirm that the attached White House
memorandum dated December 17, 1970 is a true copy, and
that the initials affixed thereto are mine.
3. I recall receiving in December, 1970 from
Patrick J. Hillings a sealed letter, as referred to
in the attached memorandum, and affirm that such memor-
andum and letter were forwarded to H.R. Haldeman.
4. I have no knowledge of the contents of said
letter.
Sworn and subscribed to before
me on the JpS^^gtj,. day of
January, 1974
Ky Coniiiiissicn EspLres April 30. 1973
7937
MEMORANDUM
THE WHITE HOUSE
WASHINGTON
December 17, 1970
TO: H. R. HAJ.33EMAN
FROM: ROGER JOHNSON
SUBJECT: Letter to the President from Pat Hillings.
Pat Hillings Fianded rne the attached letter and a.-rkod
that it be directed to the President. It concerns a n>atter
with which both Peter Flanigan and Chuck Colson a.re favniliar
and on which they are working.
7938
SENATE SELECT COMMITTEE
ON PRESIDENTIAL CAMPAIGN ACTIBITIES
AFFIDAVIT
District of Coltimbia
City of Washington
I, Kirby Jones, a resident of 7108 Exeter Street, Bethesda,
Maryland, being dvily sworn, hereby depose and say as follows:
From August, I969 to November, 1971, I was employed in the
consulting firm of Ted Van Dyk Associates, Inc., then located at
1224 - 17th St., N. W. and now located at 11 56 - 15th St., N. W.,
Washington, D. C. 20005. From November, 1971 until November, 1972,
I was employed by the McGovern for President Committee, I9IO K
Street, N. W., Washington, D. C. I am currently employed as
Executive Director of the National Executive Conference of
Washington, Inc., II56 - 15th St., N. W., Washington, D. C. 20005.
In my capacity as a consultant with Ted Van Dyk Associates,
Inc., I did not work on behalf of Associated Milk Producers, Inc.,
"AMPI," but with other clients, including an independent film
company and a large advertising firm.
In September of 1970, Ted Vsm Dyk asked me whether I would be
willing to forward $10,000 to a mem who worked for AMPI (who I
later was told to be Bob Lilly) , on the basis that AMPI could not
pay the man through normal channels. For this, Ted Van Dyk Associates,
Inc. would reimburse me in the sum of $12,000 — $10,000 to cover
my check to Mr. Lilly and $2,000 to cover the additional income tajc
which would be necessitated by the $12,000 payment from Ted Van Dyk
Associates, Inc. to me, which I would report as income.
I asked Mr. Van Dyk the reason for this procedure. He informed
me that AMPI wanted to give Mr. Lilly $10,000 as a salary increase
or bonus aaid that AMPI could not do this through its regular
business operations. Mr. Van Dyk told me that AMPI had asked his
company to do this, but that Mr. Van Dyk told them that he would
have to send Mr. Lilly a proper IRS form, as he had done when
given a similar request in I969. AMPI then asked him to write a
personal check to Mr. Lilly, for which presumably AMPI would make
reimbursement. Mr. Van r)yk explained that such aji increment of
$10,000 to his personal income would cost AMPI a considerable
amount to cover Mr. Van Dyk's additional personal income taxes.
AMPI finally asked if there were any individuals in Van I^k's
firm who could send such a check to Mr. Lilly. He told AMPI he
would ask me. I agreed.
7939
On or about September 9> 1970, I drew a check In the amount
of $10,000 payable to Bob Lilly on my personal checking account,
and sent it to Bob Lilly. On or about September 11, 1970, I
received a check, in the amount of $12,000 payable to me, from
Ted Van Dyk Associates, Inc. and signed by Ted Van Dyk, with the
notation For AMPI Convention Project." It is my understanding
that Ted Van Dyk Associates, Inc. billed and received from AMPI
$12,000 for the payment to me. In early 1971, I received copy B
d^a United States Internal Revenue Sei-vice Form 1099 from Ted Van
Dyk Associates, Inc. in the amount of $12,000 reflecting the pay-
ment to me. For the calender year 1970, I duly reported on my
income tax return the $12,000 as personal income and paid the tax
due.
Attached to this affidavit are true copies of the following
documents described above:
(A) cancelled check #544, dated September 9, 1970, in the
amo\mt of $10,000 payable to Bob Lilly ajid signed
Kirby Jones.
(B) eancelled check #489, dated September 11, 1970, in the
amoimt of $12,000, payable to Kirby Jones and signed
Ted Van Dyk,
(C) Copy B of Form 1099 - U. S. Information Return for calender
year 1970, for Kirby Jones, from Ted Vein Dyk Associates,
Inc., for $12,000.
At that time, I felt the whole procedure stramge, but thought
that it might have been a practice frequently followed with businesses,
In addition, I was then pleinning to take my wife to Europe in
November and felt I could make good temporary use of the extra $2,000.
While working with Ted Van Dyk Associates, I had absolutely no
professional contact with AMPI, never attended any of its official
meetings, and was in no way involved with this client. Since I
shared offices with Mr. Van Dyk, over the course of time, I did have
infrequent occasion to meet one or two of the AMPI officials but
only then in the most cursory manner.
I did not personally know the man — Bob Lilly — to whom I
wrote the $10,000 check. In fact, I have never talked with him
or met him, then or since.
To this day, other than through recent accounts in the media, I
have absolutely no knowledge that the money I sent to Mr. Lilly in
7940
1970 was used for purposes other than those already related.
To Witness: Washington
District of Columbia
Kitby Jc^e
Subscribed and sworn before me this f .r^ day of February, 197^
■7/ "■-' v/■v^<^
(utt^dl^ ^^y .^A>/r.
Notary
fXy
commrsslon expires February 14, 197^
7941
KiRBY Jones
P. Brandon Jones '
3807 ,V|>)DERWOOD STREET
OIBVY CHASE, MARYlA6iDu-20015-~»- — - ^3.
loRDER OV_I^OP_J-^fJS4yz_ fii '., i ! ; > ,
— 7^u i^^
f^*^t
Exhibit A
544
Dnr.i.ARS
« 7X* RIGGS NA-ndNAL'.feANK'EP ^ 8 "^ ■
0/"TASHINCnt)N"aC-« I
CHEVY CHASE OlfFICl A
CONNICTICUT AVE. » MORRISON ST., N. WV* T '
11 '(« .» I
;.i:o5iiO>«ooo3i: ob'»o 551.1 la sn-
.. »;i. . ..» •■ t , ti
^
/.-•
^
y / f —■•'••- =10
•:-J }
?5
7942
ir- . ■ ■■ J. 1 ■...-p.j^- 1^^^ ^ I Mm Mi
i^,ip6^^X':.'!^^^y 19?.««
D Van I)\-k ABHiit-i.\i-i:a. iHti.
lav-t ITTU aTHKKT. s. *.
W^hUIVOTOab |>. t. 9UOO«
Exhibit B
489
»ejv« Thouaand Dollars ond 00/100-
KoB/A'5i,?0G>'entlon Project^ __ _
fti> tia Hia Aawmtn*
/ooo*?ooooo/
t^utjuuu/
r^
■ III— II1-T1-- iir-jTcr»g>«u,<it«ifc;^>a»B.<.-
...'.A.A T '.. ;~.i .r**^
'000 p;.^ I -i-iir
•'m- — ♦♦« i J5
Jt'g'^».'iga<j.v,<v;;»«iia«rv«..
7943
Form 1099— U.S. INFORMATION RETURN FOR CALENDAR YEAR 1970
; (PIcOM keep Ihll copy— Oo not attach to your Fncome tai return)
Copy B
For Payee
t. Gron dhridcnds ind
etbtr dbtrlbutiona
2. Camlnn fram uv-
Inn Bod loan is-
3. Othar Intcrast. D«
4. Patranifa dlvldmdt
5. RMti Hd rayaRiM
8. AnnnltlM, panslon,
■od othtf fliad at
diUnnlnabU Incomi
7. CommluloBt, ftn,
piiia and awinlt, ctt^
12,000.00
— y
005yM-6467
Tip* ox pilal loxpajAX IdvnlUTlag boib^i ^ \.
Klrby Jones ',■ ; • '
3807 Underwood Road
Chevy Chase, Maryland .
TO WHOM PAID B &• U«dfrb« seal>n b aol Oova •!»•• or la ijuomdr
A«»». Jliiin fjuirt t^i rnniffl ■Tn'-ir hr IV* • ■- ^- TT— (OVER)
52-0893941
Ted Van Dyk Assoc., Inc.
1224 17th Stteet, N. W.
Washington, D. C. 20036
BY WHOM PAID g^™"- '^i^So?"''"* "* "*'*
Dniiful <« Ike Tii—j liUMi leiuiie SMke
7944
SENATE SELECT COMMITTEE ON PRESIDENTIAL CAMPAIGN ACTIVITIES
AFFIDAVIT
1. My name is Herbert Warren Kalmbach and I reside at
1056 Santiago Drive, Newport Beach, California.
2. I have caused to be produced to the Senate Select
Committee on Presidential Campaign Activities certain records
in my possession, custody or control and called for by a
subpena duces tecum served upon me by the Committee. Among
the records produced are my daily logs for the calendar
years I969 and 1970. These logs are dated and were written
on or about the dates appearing on the log pages. Attached
to this affidavit are true copies of the following pages
from those logs as they pertain to my contacts with the milk
producers :
A. A document titled "Thursday 3-25".
B. A document titled "Wednesday 4-2".
C. A document titled "Kalmbach, DeMarco,
Knapp & Chillingworth, Appointments and
Notes for the Week 6-9- '69 to 6-15- '69".
D. A document titled "Friday, 6-13".
E. A document titled " Kalmbach, DeMarco,
Knapp & Chillingworth" Appointments and
Notes for the week Monday (6-30) Thursday (7-3)",
P. A document titled " Kalmbach, DeMarco,
Knapp & Chillingworth, Appointments and
Notes for the week of 7-7-69 to 7-13-69".
G. A document titled "Sat, 8-2".
H. A document titled "Kalmbach, DeMarco,
Knapp & Chillingworth, Appointments and
Notes for the week 8-4-69 to 8-IO-69".
I. An undated document titled "Miscellaneous".
J. An undated document titled "Ehrlichman" .
K. A document titled "8-11- '69 @ 10:00 Meeting
with John Ehrlichman in John's Office at the
Western White House".
7945
L. A document titled "11-23 to 11-29".
M. A document titled "Friday 11-27".
District of Coliimbia
City of Washington
' Herbert Warren \Kalmbach
Subscribed/ and sworn vto before me
this irtr day of C/rinF, 1974.
'ibed/and sworn vto bef(
y/t^ day of [JrinF,
mission Expires lo/^l 78 ryiO/rT^^ ^Cn^aZ/^
7 7 ' Notary Public
30-337 O - 74 - pt. 17 - 27
7946
ATTACHMENT A
oAiE n^.^jL^.. 7.5 e-i
n,o
V
U 45
r
'TuJ^h^
Y
U 30
'
45
00
/"
'I* ' ^''e <r 1 MJ>~ 1
4-
■
45
00
- ■
\-
45
00
n 15
U 30
45
00
7"
/30
45
00
n '^
U 30
45
n °°
U '5
7947
ATTACHMENT B
DATE
^i^^l-Z-XA-r-Z-fL,-* V-2-
UUa
f:- -" - ;
lOL- Tjc^^A-vi, Ji
r
'■'-
f'vvUi^ ' /^2£Ct-f A^
00
ri 15
Xrt*-i./u AS-e- s^
'y/^^nrn '
'TyuU.^ yC^^^L^-cU
IC^g^ %^~^ z9(nT CSuJ}.3o£}
■^yoC 7,S~-^ /y\-rj Z ^ ri^TZ^^jJ^
d 30
43
,
00
r-
^ 30
-
45
:^/<^-
00
r 15
J 30
j^A^„^... ^-^
—
00
1
n 15
■
U 30
—
45
00
/ 30
45
-
—
00
n '^
U 30
45
n °°
U '5
7948
ATTACHMENT C
KALMBACH, DeMARCO, KNAPP ft CHULINGWORTH
Appointments and Notes for the Week
THURSDAY l\4 -.
.^-r
/Z. )
7949
ATTACHMENT D
DATE
^A^
— 1. ^•'^
2
30
45
^H^ ^
---- - - -
T
15
45
^
'
4
00
15
- -
30
'
45
(
00
F3
1u
-
u
■■
I--,
n
00
15 —
30
- -
45
1
7
/
45
n
1
.
30
1
U
1
45
1
u
7950
ATTACHMENT E
<^^^^ ' RALMBACH. DelMRCO. RHAPP & CHIIUHGWORTH
— —^ Appointments and Notes for the Week
O^^W^-^ j to ^
Jma^lf^ ftJ3)
%
'-La
MONDAY
( k~30 > THURSDAY (7-3 )
%HA
7951
ATTACHMENT F
= «^
oa-S
oN
l'^
S Q■^v -
on a.\N
^ < I <
N
a fN
1^
7952
ATTACHMENT G
0^.
n ■■
7953
ATTACHMENT H
KALMBACH, DeMARCO, KNAPP & CHILLINGWORTH
Appointments and Notej for the Week
MONDAY ( ) THURSDAY ( )
<--^6«<-^^c>gX..w>».^^L^u»j
TUESDAY ( ) FRIDAY ( )
^. sCt-yyv^X^^/ . . C^t)-x^ Ul^—iMHjeA
WEDNESDAY ( ) SATURDAY ( )
SUNDAY ( )
7954
ATTACHMENT I
7955
ATTACHMENT J
t/ v-fe-r-r-^-^ ^^p=v
7956
ATTACHMENT K
Md' M-*- J>ryvs.xA,' ,
7957
ATTACHMENT L
//-■L^ ^ //
^
^^~^f'
rhujue
7958
ATTACHMENT M
^AauU^^ //-2^
i^S£. Ju^'yy^ ^
7>ujU.i- ^.ti-vi^^ ,
7959
Senate Select Committee
On Presidential Campaign Activities
AFFIDAVIT
Washington
District of Columbia
Alexander W. Keema being sworn deposes and says:
I am a U.S. General Accounting Office auditor, assigned to
the Senate Select Committee on Presidential Campaign Activities
as an auditor/investigator. As part of my work for the Committee,
I have compiled the attached schedules which reflect selected
contributions for the period beginning January 1, 1971 and ending
December 31, 1972, reported by the following political committees:
"Trust for Agricultural Political Education," (TAPE); "Committee
for Thorough Agricultural Political Education,'^ (CTAPE): "Trust
for Special Political Agricxiltural Community Education," (SPACE):
and "Agricultural and Dairy Educational Political Trust," (ADEPT).
I extracted the entries for these schedules from copies of reports
submitted by the above-named committees to the Clerk of the House
of Representatives under the provisions of the Corrupt Practices
Act of 1925 for the period January 1, 1971 through April 6, 1972
*nd -under the Federal Election Campaign Act of 1971 for the period
April 7, 1972 through December 31, 1972. During the latter period,
copies of these reports were also submitted to the General Account-
ing Office and the Office of the Secretary of the Senate.
The attached schedules attribute some $332,500 in contributions
during calendar year 1971 to President Nixon's re-election effort.
Neither the reports of TAPE, ADEPT or SPACE, nor the names of the
recipient committees indicate that President Nixon was the bene-
ficiary of $322, 500 of these contributions. This amount is
attributed to the President's re-election effort on the basis of
the White House White Paper dated January 8, 197^*, entitled "The
Milk Price Support Decision," as well as docximentation obtained
by the Senate Select Committee on Presidential Campaign Activities
from the Finance Committee . to Re-Elect the President and from other
sources.
Similarly, Senator Fred Harris was not specifically Identified
as the beneficiary of four contributions reported by ADEPT on
November 2, 1971. The recipient committees were identified as
being in support of Senator Harris in a memorandum submitted to the
Senate Select Committee by ADEPT. All other recipient committees
identify, in the committee name, the candidate supported.
I hereby attest that the entries on the attached schedules
accurately reflect entries included in the above described reports.
j;e^^^i»:wi:^ -^
Alexander W. Keema
Subscribed and Sworn to before me /
on this I'^f: day of TheJt/ih ^ tf^T
1]1^<LW
'£D£a2J^
iry Pub!
My Commission expires / 0/3 1 J7S
7960
CONTRIBUTIONS BY THREE M/UOl DAIRY TRUSTS
DURING 1971 AND 1972,
TO 1972 PRESIDENTIAL CANDIDATES*
Dairymen, Inc. Mid-America
(SPACE) Dairymen
(ADEPT)
1971
1972
$ 65,000
50,000
$115,000
$115,000
Presidential Candidate
Republican
Richard M. Nixon
Totals 1971-1972
Total Dairy Contributions —
All Republican Presidential
Candidates
Democratic
Wilbur Mills
Totals 1971-1972
Hubert Humphrey
Totals 1971-1972
Totals 1971-1972
Fred Harris
Totals 1971-1972
Henry Jackson
Totals 1971-1972
Edmund Muskle
Totals 1971-1972
George Wallace
Totals 1971-1972
Vance Hartke
Totals 1971-1972
George S. McGovern
Totals 1971-1972
Total Dairy Contributions —
All Democratic Presidential
Candidates
* As reported to the Clerk of the House of Representatives
$ 65,000
45,000
$110,000
$110,000
AMPI
(TAPE/
CTAPE)
$202,500 $332,500
0 95,000
$202,500 $427,500 **
$202,500 $427,500
1971
0
0
$
1,
,500
$
1,500
1972
$
12,
500
$
16,600
$
25,
,000
54,100
$
12,
,500
$
16,600
$
26,
,500
$
55,600
1971
0
$
125
$
5,
,000
$
5,125
1972
$
3,
,500
1,100
$
7,
,500
$
12,100
$
3,
500
$
1,225
$
12,
,500
$
17,225
1971
$
0
$
10,000
$
0
$
10,000
1972
0
0
0
0
$
0
$
10,000
$
0
$
10,000
1971
$
0
$
0
$
0
$
0
1972
0
$
$
4,500
4,500
1.
$
0
0
^'''
$
$
4,500
$
0
4,500
1971
$
0
$
0
$
0
$
0
1972
0
$"
2,750
2,750
■$"
0
0
T"
2,750
$
0
2,750
1971
$
0
$
0
$
0
$
0
1972
$
$
2,
2,
000
000
0
$~
0
0
$"
2,000
$
0
2,000
1971
$
0
$
0
$
1,
,600
$
1,600
1972
0
0
$"
"t;
250
,850
F
250
$
0
$
0
1,850
1971
$
0
$
0
$
0
$
0
1972
0
0
0
0
$
0
$
0
$
0
$
0
$
18,
000
$
35,075
$
40,
850
$
93,925
** Listed in the White House White Paper
to the "funding of the President's re-
as "some $427,000" from the dairy trusts
election effort".
7961
CONTRIBOTIONS FROM DAIRY TRUSTS IN SUPPORT OF PRESIDENTIAL CANDIDATES 1971-1972
I.Reported by SPACE (Dairymen, Inc.)
Political Party Amoxint of Date of Reporting
Candidate - Receiving Committee Contribution Contribution Period
Republican;
Richard M. Nixon
Republican National Finance Comnlttee $ 5,000
Republican National Candidates
. Conference
Republican National Committee
5,000
5,000
Republican National Finance dperations 5,000
Committee
Republican National Association (sic) 5,000
5,000
Klck-Off "71" Republican Dinner
Conmlttee
Americans Involved Comnlttee 2,500
Association of Involved Volunteers 2,500
Conmlttee
Americans for a Preservation of a 2,500
D ecent American Society Conmlttee
Americans United for Sound Money 2,500
C onraittee
Coimlttee for a Better American 2,500
Association for Preservation of Sound 2,500
Political Ideals Committee
Association for Preservation of Basic 2,500
American Ideals Committee
Association for More Effective Federal 2,500
A ctlon Committee
Americans United for Better Federal 2,500
Planning Conmlttee
Americans Working to Build a Better 2,500
Community Committee
Americand Dedicated to Sound 2,500
Economic Growtih Committee
Supporters of the American Dream 2,500
Committee
Salute to the President Committee 5,000
Democrats for Nixon Conmlttee 25,000
Finance Conmlttee to Re-Elect the 25,000
President
Total Contributions - $115,000
Richard M. Nixon
Total SPACE Contributions - All
Republican Presidential Candidates $115,00(1
3/24/71
3/24/71
3/24/71
3/24/71
3/24/71
-5/7/71
8/19/71
8/19/71
8/19/71
8/19/71
8/19/71
8/19/71
8/19/71
8/19/71
8/19/71
8/19/71
8/19/71
8/19/71
11/9/71
8/2/72
10/28/72
3/1/71/-5/31/71
3/1/71-5/31/71
3/1/71-5/31/71
3/1/71-^5/31/71
3/1/71-5/31/71
3/1/71-5/31/71
6/1/71-8/31/71
6/1/71-8/31/71
6/1/71-8/31/71
6/1/71-8/31/71
6/1/71-8/31/71
6/1/71-8/31/71
6/1/71-8/31/71
6/1/71-8/31/71
6/1/71-8/31/71
6/1/71-8/31/71
6/1/71-8/31/71
6/1/71-8/31/71
9/1/71-12/31/71
7/28/72-8/31/72
10/27/72-12/31/72
30-337 O - 74 - pt. 17 - 28
SPACE Contributions - Cont.
7962
Political Party
Candidate - Receiving Committee
Amount of
Contribution
Date of
Contribution
Reporting
Period
Hubert H. Humphrey
Humphrey for President Committee $ 1,000
Friends of Humphrey Committee 2,500
Total Contributions - Hubert H. Humphrey $.3,500
Wilbur Hills
Mills for President National
Committee
Mills for President Committee
Mills for President Committee
Total Contributions - Wilbur Mills
George Wallace
George Wallace National Campaign
Fund
Total Contributions - George Wallace
Total SPaCE Contributions - All
Democratic Presidential Candidates
4/24/72
9/25/72
4/7/72-5/31/72
9/1/72-10/16/72
$ 5,000
5/15/72
4/7/72-5/31/72
5,000
6/19/72
6/1/72-7/27/72
2,500
8/15/72
7/28/72-8/31/72
$12,500
$ 2,000
5/4/72
4/7/72-5/31/72
$ 2,000
$18,000
7963
CONTRIBOTIOWS FROM DAIRY TRUSTS IN SUPPORT OP PRESIDENTIAL CANDIDATES 1971-1972
II. Reported by ADEPT (Mld-Ajnerlca Dairymen)
Political Party
Candidate - Receiving Committee
Republican:
Richard M. Nixon
Klck-Off "72" Republican Dinner
Republican National Conralttee
Republican National Finance
Coomittee
Republican National Finance
Operations Committee
Republican Victory Coonlttee
Republican Campaign Committee
Conmlttee for a Republican
Congress
Republican Congressional Candidates
Conference
Republican National Associates
The Organization of Involved
Americans
Aaerlcans United for Political
Awareness
Americans United for Political
Involvement
Americans Participating
Americans United for Decent
Government
Americans United for an Inf oraed
Electorate
Salute to the President Dinner
California Democrats for Nixon
Massachusetts Democrats & Independents 2,000
for Nixon
New York Democrats for Nixon
Texas Democrats for Nixon
Democrats for Nixon (Nat'l)
Missouri Finance Coomittee to
Re-Elect the President
Illinois Finance Conmlttee to
Re-Elect the President
Iowa Finance Coomittee to Re-Elect
the President
Amount of
Contribution
Date of Reporting
Contribution Period
? 5,000
4/5/71
3/11/71-6/1/71
5,000
4/5/71
3/11/71-6/1/71
5,000
4/5/71
3/11/71-6/1/71
5,000
4/5/71
3/11/71-6/1/71
5,000
4/5/71
3/11/71-6/1/71
5,000
4/5/71
3/11/71-6/1/71
5,000
4/5/71
3/11/71-6/1/71
5,000
4/5/71
3/11/71-6/1/71
5,000
i«/5/71
3/11/71-6/1/71
2,500
8/20/71
6/2/71-8/31/71
2,500
8/20/71
6/2/71-8/31/71
2,500
8/20/71
6/2/71-8/31/71
2,500
8/20/71
6/2/71-8/31/71
2,500
8/20/71
6/2/71t8/31/71
2,500
8/20/71
6/2/71-8/31/71
5,000
11/9/71
9/1/71-12/31/71
5,000
9/19/72
9/1/72-10/16/72
s 2,000
9/19/72
9/1/72-10/16/72
5,000
9/19/72
9/1/72-10/16/72
7,000
9/19/72
9/1/72-10/16/72
6,000
9/19/72
9/1/72-10/16/72
4,000
11/6/72
10/27/72-12/31/72
4,000
11/6/72
10/27/72-12/31/72
4,000
11/6/72
10/27/72-12/31/72
7964
ADEPT Contributions Cont.
Political Party
Candidate - Receiving Committee
Kansas Finance Committee to
Re-Elect the President
Nebraska Finance Committee to
Re-Elect the President
Total Contributions -
Richard M. Nixon
Total ADEPT Contributions - All
Republican Presidential Candidates $110,00
Amount of
Contribution
Date of
Contribution
Reporting
Period
$ A, 000
11/6/72
10/27/72-12/31/72
4,000
11/6/72
10/27/72-12/31/72
$110,000
Fred Harris
Action Committee for the Aged
Committee for Adequate Health Care
Committee for Citizen Participation
Committee for a Sound Economy
Total Contributions - Fred Harris
Hubert Humphrey
Humphrey Reception Committee
Humphrey for President Committee
Friends of Humphrey Committee
Total Contributions - Hubert Humphrey
Henry Jackson
Citizens for Jackson Committee
Total Contributions -
Henry Jackson
Wilbur Mills
Mills for President Committee $
Mills for President Committee
Mills for President Committee
Hills for President Committee
Total Contributions - Wilbur Mills $
Edmund Muskle
Citizens for Muskle Committee $
Muskie Dinner Committee
Total Contributions - $
Edmund Muskie
Total ADEPT Contributions - All
Democratic Presidential Candidates $ 35,075
$
2,500
U/2/71
9/1/71-12/31/71
2,500
11/2/71
9/1/71-12/31/71
2,500
11/2/71
9/1/71-12/31/71
2,500
11/2/71
9/1/71-12/31/71
$
10,000
$
125
2/4/71
1/1/71-3/10/71
1,000
4/21/72
4/7/72-5/31/72
100
9/5/72
9/1/72-10/16/72
:y
$1,225
$
4,500
3/6/72
1/1/72-3/10/72
$
4,500
5,000
6/2/72
6/1/72-8/31/72
5,000
'6/16/72
6/1/72-8/31/72
4,100
77/21/72
6/1/72-8/31/72
2,500
8/11/72
6/1/72-8/31/72
16,600
2,000
1/7/72
1/1/72-3/10/72
750
4/14/72
4/7/72-5/31/72
2,750
7965
CraJTRIBUnONS FROM DAIRY TOPSTS IN SUPPORT OF PRESIDENTIAL CANDIDATES 1971-1972
III. Reported by TAPE/CTAPE (Associated Milk Producers Inc.)
Political Party
Candidate - Receiving Committee
Republican:
Richard M. Nixon
R epubllcan Campaign Committee
Klck-Off 72 Republican Dinner
Republican Victory Committee
Committee for Republican Congress
Americans Dedicated to Better
Public Administration
Association of Americans for Good
G ovemment
League for Concerted Action
League of Dedicated Voters
Association of Political Volunteers
Organization of Cwmminlty Volunteers
Americans Dedicated to Greater Public
Awareness
Americans United for Better Federal
Administration
Association for Sensible Disarmament
Organization of Moderate Americans
Americans Organized for Political
S tabillty
Association of Neighborhood Volunteers
Citizens for Mdte- Effective Community
Involvement
Americans Dedicated to Support of
Democracy
0 rganlzatlon of Dedicated
A merlcans
League of Involved Citizens
Committee for a Better Nation
Citizens for Sound P611cles at
Home & Abroad
Americans United for Sensible
Agricultural Policy
Citizens for a Better Environment
Amount of
Contribution -
Date of
Contributions
Reporting
Period
,$ 3,000
3/22/71
3/1/71-6/2/71
3,000
3/22/71
3/1/71-6/2/71
2,000
3/22/71
3/1/71-6/2/71
2,000
3/22/71
3/1/71-6/2/71
2,500
7/9/71
6/3/71-8/31/7
2,500
7/9/71
6/3/71-8/31/7
2,500
7/9/71
6/3/71-8/31/7
2,500
7/9/71
6/3/71-8/31/7
2,500
7/9/71
6/3/71-8/31/7
s 2,500
7/9/71
6/3/71-8/31/7
Ic 2,500
7/9/71
6/3/71-8/31/7
2,500
7/9/71
6/3/71-8/31/7
2,500
7/9/71
6/3/71-8/31/7
2,500
7/9/71
6/3/71-8/31/7
2,500
7/9/71
6/3/71-8/31/7
2,500
7/9/71
6/3/71-8/31/7
2,500
7/9/71
6/3/71-8/31/7
2.500
7/9/71
6/3/71-8/31/7
2,500
7/9/71
6/3/71-8/31/7
2,500
7/9/71
6/3/71-8/31/7
2,500
7/9/71
6/3/71-8/31/7
2,500
7/9/71
6/3/71-8/31/7
2,500
7/9/71
6/3/71-8/31/7
2,500
7/9/71
6/3/71-8/31/7
7966
TAPE/CTAPE Contributions - Cont.
Political Party
Candidate - Receiving Comnittee
Aoarlcans for Sound Ecological $
Policy
Committee for Better Government
Association of Political
Activists
Americans Dedicated to Peace
Americans United for Better
Leadership
Association for Fair Press
Association for Political
V olunteers
Americans United for Sound Consumer
Policies
Americans United for Objective
Reporting
League of Citizen Activists
Citizens for Better Government
Americans United for Honesty in
G overnment
Committee for Political Integrity
Americans Dedicated to Stable Growth.'
Americans Dedicated to Clean
Environment
Americans United for Political
Moderation
Americans United for Sensible
Politics
Association for Representative
Government
Americans United for Responsive
Administration
Organization of Responsible
Americans
Organization of Sensible Citizens
Americans for Sound Educational
Policy
Americans Concerned
Supporters of Rational Federal
R eorganlzation
Sound Politics Association
Committee for Adequate Political
Information
0 rganizatlon of Citizen Politicians
Amount of
Contribution
Date of
Contribution
Reporting
Period
2,500
7/9/71
6/3/71-8/31/71
2,500
7/9/71
6/3/71-8/31/71
2,500
7/9/71
6/3/71-8/31/71
2,500
7/9/71
6/3/71-8/31/71
2,500
7/9/71
6/3/71-8/31/71
2,500
7/9/71
6/3/71-8/31/71
2,500
7/9/71
6/3/71-8/31/71
2,500
.7/9/71
6/3/71-8/31/71
2,500
7/9/71
6/3/71-8/31/71
2,500
7/9/71
6/3/71-8/31/71
2,500.
7/9/71
6/3/71-8/31/71
2,500
7/9/71
6/3/71-8/31/71
2,500
7/9/71
6/3/71-8/31/71
2,500
7/9/71
6/3/71-8/31/71
2,500
7/9/71
6/3/71-8/31/71
2,500
7/9/71
6/3/71-8/31/71
2,500
7/9/71
6/3/71-8/31/71
2,500
7/9/71
6/3/71-8/31/71
2,500
7/9/71
6/3/71-8/31/71
2,500
7/9/71
6/3/71-8/31/71
2,500
7/9/71
6/3/71-8/31/71
2,500
7/9/71
6/3/71-8/31/71
2,500
7/9/71
6/3/71-8/31/71
2,500
7/9/71
6/3/71-8/31/71
2,500
7/9/71
6/3/71-8/31/71
2,500
7/9/71
6/3/71-8/31/71
2,500
7/9/71
6/3/71-8/31/71
TAPE/CTAPE Contributions - Cont.
7967
Political Party
Candidate - Receiving Coirailttee
Americans United for Sound
Government
Americans United for Economy In
Government
Americans United for Economic
Stability
People United for Good Government
Committee
League of Mature Americans
Volunteers for Good Government
Volunteers Against Citizen Apathy
League for American Volunteers
Americans United for Effective
G ovemment
Association for Better Communities
Association of Concerned Neighbors
Americans United for Safer Streets
Americans Dedicated to Volunteer
Action
Americans for a More Informed
Electorate
Association of Participating
Volunteers
Citizens United in Pursuit of the
American Dream
Americans for Progress
A ssociation of Progressive
Americans
Americans Dedicated to Progressive
Policies
Association of Americans for Retention 2,500
o f Sound Ideals
C onmittee for Better Conaiunitles
League for Political Expression
Coomlttee for Involvement In Public
Affairs
Americans for Greater Awareness in
Public Issues
Americans Dedicated to Greater
Citizen Activity
Amount of
Contribution
Date of
Contribution
Repo
Per
rting
lod
2,500
7/9/71
6/3/
71-8/31/71
2,500
7/9/71
6/3/
71-8/31/71
2,500
7/9/71
6/3/
71-8/31/71
5,000
9/2/71
9/1/
71-12/31/71
2,500
9/10/71
9/1/
71-12/31/71
2,500
9/10/71
9/1/
71-12/31/71
2,500
9/10/71
9/1/
71-12/31/71
2,500
9/10/71
9/1/
71-12/31/71
2,500
9/10/71
9/1/
71-12/31/71
2,500
9/10/71
9/1/
71-12/31/71
2,500
9/10/71
9/1/
71-12/31/71
2,500
9/10/71
9/1/
71-12/31/71
2,500
9/10/71
9/1/
71-12/31/71
2,500
9/10/71
9/1/
71-12/31/71
2,500
9/10/71
9/1/
71-12/31/71
2,500
9/10/71
9/1/
71-12/31/71
2,5001
9/10/71
9/1/
71-12/31/71
2,500
9/10/71
9/1/
71-12/31/71
2,500
9/10/71
9/1/
71-12/31/71
> 2,500
9/10/71
9/1/
71-12/31/71
2,500
9/10/71
9/1/
71-12/31/71
2,500
9/10/71
9/1/
71-12/31/71
2,500
9/10/71
9/1/
71-12/31/71
2,500
9/10/71
9/1/
71-12/31/71
2,500
9/10/71
9/1/
71-12/31/71
7968
TAPE/CTAPE Contributions - Cont.
Political Party
Candidate - Receiving Committee
Citizens for Volunteer Action
Americans Dedicated to Sound
Political Philosophies
League of Thoughtful Americans
Association for Concerned Citizens
Total Contributions -
Richard M. Nixon
Total TAPE/CTAPE Contributions - All
Republican Presidential Candidates $202,500
Amount of
Contribution
Date of
Contribution
Reporting
Period
$ 2,500
9/10/71
9/1/71-12/31/71
2.500
9/10/71
9/1/71-12/31/71
2,500
9/10/71
9/1/71-12/31/71
2,500-
9/10/71
9/1/71-12/31/71
$202,500
Vance Hartke
Volunteers for Hartke
Volunteers for Hartke
Hartke Presidential Campaign
Deficit Fund
Total Contributions - Vance Hartke $ 1,850
Hubert Humphrey
Humphrey for Senate Committee*
Humphrey Dinner Committee
Humphrey for President Campaign
F riends of Humphrey
Total Contributions - Hubert Humphrey $12, 500
Wilbur Mills
$ 500
1,000
25,000
$ 100
4/21/71
3/1/71-6/2/71
1,500
8/17/71
6/3/71-8/31/71
250
12/7/72
10/28/72-12/31/72
$ 5,000
12/3/71
9/1/71-12/31/71
1,000
4/6/72
3/9/72-5/31/72
4,000
5/5/72
8/9/71-5/31/72
2,500
8/16/72
6/1/72-8/31/72
Wilbur Mills Appreciation Rally
Friends of Mills Coranittee
Mills for President
Total Contributions - Wilbur Mills $ 26,500
8/2/71
9/23/71
6/13/72
6/3/71-8/31/71
9/1/71-12/31/71
6/1/72-8/31/72
Total TAPE/CTAPE Contributions - All
Democratic Presidential Candidates $ 40,850
* Documentation on file with the Senate Select Committee on Presidential
Campaign Activities indicates that the Humphrey for Senator Committee
uas used in part to support Senator Humphrey's presidential campaign
in 1971 and 1972.
7969
AFFIDAVIT
THE STATE OF TEXAS )
COUNTY OF TRAVIS |
Before me, Louise Crow, a Notary Public in and for Travis
County, Texas, on this day personally appeared Joe R. Long, who
being by me here and now duly sworn, upon his oath deposes and says:
My name is Joe R. Long, I maintain my office at 208 in the
Westgate Building, Austin, Texas. I am over 21 years of age. This
Affidavit is furnished to the Senate Select Committee on Presidential
Campaign Activities, pursuant to a request of Alan S. Weitz, Assistant
Counsel, such request having been received by letter, dated March 19,
1974.
In response to Question Number 1 in the above described
letter, the following is submitted:
During the week of December 17, 1969, Mr. Jake
Jacobsen, of Austin, Texas, who at that time was my
law partner, requested that I make a donation of
$2, 000 to Mr. Bob Lilly, who was an employee of
Associated Milk Producers, Inc. (AMPI),for the pur-
pose of assisting Mr. Lilly in the repayment of a loan
which at that time I understood had been made by
him in August of 1969 from Citizens National Bank,
Austin, Texas. Mr, Jacobsen represented that Mr.
Lilly had made the loan in August, 1969, believing
that it could be paid from funds later to be collected
by Texas Agricultural Political Education (TAPE),
and that subsequent to the making of the loan, the
Trustees of TAPE had discovered that they could not
Note.- Letter dated March 19, 1974, mentioned above, appears as attachment following this affidavit.
7970
repay the loan with the use of TAPE funds. Mr.
Jacobsen represented that Mr. Lilly had no way
to repay the loan and was requesting help from
Mr. Jacobsen and myself to enable him to meet
his obligation at the bank. AMPI was at that
time a client of our law firm. Sometime prior
to June 12, 1970, either Mr, Jacobsen or Mr.
Lilly (I have no recollection of which person)
again requested that I make a donation to Mr.
Lilly for the same purpose. In Decennber, 1969,
after the request, I made a donation to Mr. Lilly
for this purpose in the amount of $2, 000. On
June 12, 1970, I made a donation to Mr. Lilly
for this purpose in the amount of $2, 125. I did
not make any donation to Mr. Lilly on June 12,
1969, as referred to in the above described
letter.
Subsequent to my original interview on
November 3, 1973 with staff members of the
Senate Select Committee on Presidential Cam-
paign Activities, I discovered, through
examination of documents at Citizens National
Bank, that the loan in question was in fact made
to Mr. Lilly on December 17, 1969, and that
the proceeds of the loan were used by him to
reimburse the TAPE bank account for funds
withdrawn under the authority of the signatory
of the account in August of 1969.
7971
mitted:
mitted:
I have no knowledge of the purpose for which
Mr. Jacobsen made payments to Mr. Lilly on
December 17, 1969 or Jtine 12, 1970.
In response to Question Number 2, the following is sub-
The checks listed under Question Number 2 were
withdrawn from the partnership account of the law
firm of Jacobsen and Long during the years 1970
and 1971. The checks were withdrawn by the
partners from retained earnings in the law firm.
I have no knowledge of the purpose of Mr. Jacobsen 's
withdrawals, as those funds were exclusively his.
I have no independent recollection of the purpose of
the withdrawals which I made on the dates indicated
in the letter, as they were withdrawals of my funds
in the usual course of my business.
In response to Question Number 3, the following is sub-
I did not bill AMPI or recoup from AMPI monies in
connection with donations described relating to
Question Number 1 above. I have no knowledge that
the firm of Jacobsen and Long either billed or recouped
from AMPI monies in connection with the donations
described in Question Number 1. I did not prepare
nor review the bills which Mr. Jacobsen submitted to
AMPI, and have no knowledge as to the purpose of etny
such bills which he rendered.
7972
mitted:
mitted:
mitted:
mitted:
In response to Question Number 4, the following is sub-
The billings listed in Item 4 were submitted
to AMPI for legal services which I performed
as an attorney representing AMPI, and were
submitted on the basis of legal services
rendered in connection with the matters out-
lined in the bills.
In response to Question Number 5, the following is sub-
I did not participate in the preparation or
submission of these bills and have no know-
ledge as to the reason or purpose for their
rendition.
In response to Question Number 6, the following is sub-
I have no knowledge of the purpose, source,
or disposition of $5, 000 in cash allegedly
delivered by Bob Lilly to Jake Jacobsen on
November 10, 1971, and do not recall, nor do
I believe that it was delivered in my presence.
In response to Question Number 7, the following is sub-
I have no knowledge of the purpose, source,
or disposition of $5, 000 in cash allegedly
delivered by Jake Jacobsen to David Parr
on November 10, 1971, and do not recall
nor do I believe that it was delivered in my
presence in the Austin, Texas airport.
mitted:
7973
In response to Question Number 8, the following is sub-
I have no knowledge as to whether AMPI or
other corporate funds were used directly or
indirectly to provide the funds described in
Questions 6 and 7.
Subscribed eind Sworn to by the said Joe R. Long on this
the f) day of /L<(yt^^ , 1974, to certify which witness my
hand and seal of office.
Louise Crow, Notary Public in
and for Travis County, Texas
7974
. CmriN. J«.. NX., CHAmMAN
^CrrHcb stales ^enaU
SELECT COMMITTEE ON
PRESIDENTIAL CAMPAIGN ACTIVITIES
(PURSUAKT TO 5. KLS. «0. »10 CONGRESS)
WASHINGTON. DC. 20510
March 19, 1974
Mr. Joseph R. Long
P.O. Box 222
Austin, Texas 78767
Dear Mr. Long:
■The Senate Select Committee on Presidential
Campaign Activities has been investigating certain
Tno''^r?Mo?f''^^^r^' i?^l^^i"g Associated Milk Producers,
inc (AMPI), and participation by them and their
wS^^i^! •^^''^°" ^""""^ ^" ""^^ ^^^2 Presidential Campaign,
we appreciate your past cooperation in providing us witt
documents and m having submitted to an interview by the
Committee staff However, most of the information we
have obtained with reference to you has been received
by the Committee in the form of either an affidavit
or sworn testimony in executive session. Therefore
^; f^?T^-^^^- ^°" execute and submit to the Committee
an affidavit with respect to the following matters:
(1) For what purpose did you and Mr. Jacobsen
make the following payments to Mr. Lilly:
a. December 17, 1969
b. June 12, 1969
$5,000
$5,000
(2)
For what purpose were the funds generated
by the following checks (drawn on the
Jacobsen & Long bank account, #36-263-8,
Citizens National Bank, Austin, Texas) used.
Specifically, were any of these monies given
to Bob Lilly or any other AMPI representative,
or otherwise used, directly or indirectly, for
political purposes:
7975
Date of
Date
Check #
Amount
Check
Negotiated
Endorsed By-
1537
$3,000.00
2/2/70
2/2/70
Jake Jacobsen
1538
2,000.00
2/2/70
2/2/70
Joe R. Long
1835
4,250.00
7/24/70
8/6/70
Joe R. Long
1836
5,750.00
7/24/70
8/6/70
Jake Jacobsen
1919
4,250.00
9/9/70
9/9/70
Joe R. Long
1920
5,750.00
9/9/70
9/9/70
Jake Jacobsen
2229
2,250.00
2/15/71
2/16/71
Joe R. Long
2230
2,750.00
2/15/71
2/16/71
Jake Jacobsen
(3)
(^)
(5)
(6)
(7)
(8)
Did you, Mr. Jacobsen or the firm of Jacobsen
& Long bill AMPI and/or recoup from AMPI monies
in connection with the payments described in
items (1) and (2) above?
Were the following billings by your firm to
AMPI in whole or in part connected with the
payments described in items (1) and (2) above:
a. December 17, I969
b. January 6, I970
c. April 21, 1970
d. July 16, 1970
e. August 31, 1970
$10.
J10,000
10,000
10,000
22,000
22,000
Please explain the portion of the billings from
your firm to AI4PI in 197O and I97I listed as
For professional services rendered in excess
of amoxint covered by retainer" or a similar
caption.
What was the purpose, source, and disposition
of the $5000 in cash delivered by Bob Lilly
to Jake Jacobsen, allegedly in your presence,
on or about November 10, 1971?
What was the purpose, source and disposition
of the $5000 in cash delivered by Jake Jacobsen to
Dave Parr, allegedly in your presence on or
about November 10, 1971 in the Austin, Texas
Airport?
Were AMPI, or any other corporate, funds used
directly or indirectly to provide the funds
described in items (6) or (7)?
7976
Since we must complete our investigation soon, we
request that you file your affidavit with the Committee
by April 1, 197^.
Sincerely,
Alan S.
Assistant Counsel^
ASW:Jh
cc: Charles McNeils, Esq.
7977
UNITED STATES SENATE
SELECT COMMITTEE ON
PRESIDENTIAL CAMPAIGN ACTIVITIES
AFFIDAVIT
District of Columbia
City of Washington
I, Eleanor Manuel, a resident of 8614 Garland Avenue,
Takoma Park, Maryland, being duly sworn, hereby depose and say as
follows :
1. I was employed by the Republican National Committee,
hereafter referred to as the RNC, on August 14, 1952. Since 1954, I
have been charged with the supervision of the telephone operation within
the national headquarters. . In the course of my duties, I am responsible
for reviewing all records and bills relating to the telephone operation.
2. Pursuant to a request by the Presidential Campaign
Activities Committee, I have supplied the attached true copies of bills of
long distance telephone calls made by Herbert Kalmbach during the period
January 1 to April 30, 1972. I was responsible for checking telephone bills
during that period and the markings which appear on the attached bills were
made by me at the time of the receipt of those bills.
3. Long distance telephone calls made by Mr. Kalmbach between
January 1 and February 1, 1972 were charged to a telephone extensien
number in RNC Chairman Robert Dole's office. I identified the long
distance telephone calls made by Mr. Kalmbach by checking each bill
30-337 O - 74 - pt. 17 - 29
7978
Affidavit
Page 2
with the telephone company and then writing the number "1000" beside
each call the telephone company indicated was made by Mr. Kalmbach.
4. Beginning on February 2, 1972, Mr, Kalmbach started
charging his long distance telephone calls to a credit card, number
175-8845-032-M, which was supplied by the accounting office at the
direction of Chairman Dole. I was notified by the accounting office of
the credit card number when it was issued to Mr. Kalmbach.
SJJl^^^^v^^ }yia^.^.»^t^
Eleanor Manuel
^uJL^^^^^ ^ y^ '^'^^
Editor's note: To avoid duplication,
only four pages of the long-distance
telephone bills are shown.
7979
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7980
IN Till': ui;it]:d states district court
roR the wes'jern district or te>'j\s
SAN ANTONIO DIVISION
CIVIL ACTION
NO. SA 72 CA A9
UNITED STATES OF A>tERICA,
Plaintiff,
V.
ASSOCIATED MILK PRODUCERS, INC.,
Defendant.
f AFFIDAVIT OF RICHARD W. HcLAREN
STATE- OF ILLINOIS )
) ss
COUNTY OF COOK )
Richard VJ. McLaren, being first duly sworn, states that
he makes the follov/ing affidavit for filing with the United
States District Court for the VJestern District of Texas (San
Antonio Division) in the above-entitled matter.
1. I am a United States District Judge sitting in the
United States District Court for the Northern District of
Illinois. From February 1, 1969 to February 2, 1972, I v;as
the Assistant Attorney General of the United States in charge
of the Antitrust Division of the Department of Justice and I
had the responsibility, subject to the final authority of the
Attorney General, for authorizing antitrust investigations
and the enforcement of the Sherman Act and other federal
antitrust lav;s . Such responsibility encompasses inquiry by
the Antitrust Division into contracts, combinations and
conspiracies which may restrain and monopolize interstate
trade and comjr.erce, and monopolization of or attempts to
monopolize such trade and corn'.crce.
7981
2. On Aup.ust 10, 1^71 tho atnff of the Miclwc:;U Office
(Chicap.o) of the Antitrust Division rocoiiancndcd that a [^rnnd
jury be authorized to further invcstip.ate the activities of
Associated Milk Producers, Inc. This recommendation was
concurred in by John E. Sarbaup.h, Chief, Midwest Office;
Gerald A. Connell, Chief of the General Litigation Section;
and Robert B. Hummel, Deputy Director of Operations. On
September 9, 1971 I requested the Attorney General, John Mitchell
to authorize a grand jury investigation into a possible con-
spiracy by Al-n and others to eliminate competition in the
marketing of milk in certain Midv/estern States, in violation
of Section 1 of the Sherman Act, and into possible attempts
to monopolize the marketing of milk in that area in violation
of Section 2 of the Sherman Act. Prior to sending such recom-
mendation to Attorney General John Mitchell, I contacted
Richard Lyng, Assistant Secretary of the United States Depart-
ment of Agriculture, and discussed the staff's recommendation
with him. Mr. Lyng indicated to me that a gr;ind jury investi-
gation of AMPI's activities would not be opposed by his Depart-
I
ment. At that time I was aware from nev;s accounts that, approxi- ■
mately one v;eek before I sent said request to Attorney General !
Mitchell, President Nixon had addressed AMPI's second annual
meeting in Chicago, to which A>TI reportedly had brought
AG, 000 members and their wives. i
3. I was thereafter informed that the Chicago and V.'ashingtor.
Offices of the Antitrust Division continued to receive complaints
about A^TI's activities from milk processors and m.ilk producers
who were not members of A>'PI and the cooperatives to which they
belonged. On October 29, 1971, after learning that counsel for
A)U'I were publicly stating (and had, presumably, advised their
7982
clients) tlint AMPI vais cxeiupl: from the .TntitrusU lnv;s , I sent
a second memo to Attorney General Mitchell urp.ing that he ap-
prove a grand jury investigation of the activities of /VMPI.
On November 10, 1971 Robert Hummel (with the concurrence of
John Sarbaugh) suggested to me that, since AlTI's continuation
of its predatory activities appeared to be causing irreparable
injury to non-members, the Antitrust Division should think in
terms of an immediate civil injunctive case against A>1PI and
not av7ait a determination of our grand jury request.
4. To the best of my recollection and belief, on or about
November 30, 1971 Attorney General Mitchell discussed with me
the requests I had made for a grand jury investigation and,
after reviewing the legal and tactical questions involved,
including the difficulties of obtaining a criminal conviction
in the face of a defense that the defendants' activities were
exempt from the antitrust laws. Attorney General Mitchell sug-
gested that the Antitrust Division proceed along civil rather
than criminal lines. Investigation by Civil Investigative
Demands, as authorized by 15 U.S.C. §§1311-14, can be a long
and cumbersome process if the organization under investigation
decides to resist the Demand through a court proceeding or
otherwise cause delay in compliance; such investigations have
sometimes taken more than a year, to complete. In my judgment,
the situation was sufficiently urgent from the standpoint of
antitrust enforcement that on November 30, 1971 I requested
the staff to review the information it had and try to obtain
by interviews whatever additional evidence was needed to bring
a civil injunctive case against AJtPI.
5. On December 20. 1971 the staff of the Hidj.v-est Office
recommended that a civil corr-plniat be filed against A."PI. The
recommendation was reviewed by all persons in the Antitrust
Division in the normal chain of review: John Sarbaugh, Robert
lluminel, and Bruce Wilson and Walker R. Comcgys , my Deputy
Assistant Attorneys General. All concurred in the rccoirjr.f '.i:"(
7983
6. On January 18, 1972 I met wiulj Assistant Secretary
of Ap,riculture Richard Lynp^ and shov;cd him a copy of the
complaint against AI-ITI which I proposed to recommend. Mr. Lyn^
stated that he had no objection to the suit being filed and
that he v;ould advise the Secretary of my proposed action. On
that same day, following my meeting with Mr. Lyng, I sent the
proposed complaint to Attorney General Mitchell and strongly
urged he approve filing the proposed suit against AMPI.
7. On Saturday, January 22, 1972, the Attorney General
signed the complaint and requested that, prior to filing suit,
I givb AMPI the opportunity to enter into negotiations for a
consent decree to be filed simultaneously with the complaint
("prefiling negotiations"). On Monday morning, January 24,
1972, I directed that John Sarbaugh notify AMPI that the
Attorney General had signed a complaint against AMPI and offer
AMPI the opportunity to engage in prefiling negotiations. I
! was informed that John Sarbaugh telephoned Stuart Russell,
counsel for AMPI, and told him that AMPI had until the close
of business on Thursday, January 27, 1972, to decide whether
AMPI wished to engage in prefiling negotiations. I was further
Informed that Department policy with respect to prefiling
negotiations v;as explained to Mr. Russell; i.e., that prefiling
negotiations afford the defendant the opportunity to enter
into a consent decree to be filed simultaneously with a
complaint; that prefiling negotiations are offered by the
Department in situations where the defendant has agreed in
principle to the relief requested by the Department; that
under Division practice, after agreeing to the prefiling
procedure, parties have sixty days to negotiate a definitive
consent decree; and that prefiling is not engaged in when tliorr;
are genuine issues of law or fact in dispute betv;een the
Department and the defendant.
7984
8. I was informed tliat, on Tuesday, Januai'y 25, 1972,
counsel for AJtPI in Chicago caiae to the Midwest Office and
read the complaint, and that on January 26, 1972, he advised
the staff that AIDPI wanted to engage in profiling negotiations.
9. On January 27, 1972 I was informed by John Sarbaugh
that counsel for AMPI had met with the Chicago staff and Hr.
Sarbaugh. Mr. Sarbaugh told me that at that meeting AlIPI
counsel questioned the propriety of filing a complaint at all;
stated that a substantial number of the practices questioned
were exempt from the antitrust laws under the Capper-Volstead
Act; stated that AMPI had new management and new counsel, and
they wanted to review V7ith us the facts we had to support our
complaint; noted that I would very shortly be leaving the
Antitrust Division; suggested that Attorney General Mitchell
might also be leaving soon, thus necessitating nev; signatures
if a complaint against AMPI were to be filed at a later date;
and stated that dairymen were big political contributors.
Mr. Sarbaugh further informed me that at the January 27, 1972
meeting, AMPI counsel were again told by him that prefillng
negotiations were not entered into if there were genuine issues
of dispute and that profiling negotiations were designed to
settle matters where defendant V7ished to consent fully to the
relief requested; that Mr. Sarbaugh told AMPI counsel that
there V7as no commitment to negotiate for sixty days and that
whenever, in his view, there V7as a slowdo^vm in negotiations, he
would recommend terminating them even if sixty days had not
expired; and that AJIPI counsel then stated that they thought
that there was sufficient agreement to warrant prefiling
negotiations. Mr. Sarbaugh informed me that, based on the
above conference, he did not believe that M'Pl intended to
7985
consent to all the relief rcciuested in the complaint and that
ho felt that A11PI might intend to use the prefilinp. ncnotiation
period to attempt to block politically the filing of this suit.
10. Upon receiving the above report from Mr. Sarbaugh,
I was concerned that there were genuine issues of fact and
law in dispute betr^i/een the Government and Af^I, that AMPI
counsel v;ere not in fact willing to consent to all the relief
the Government felt necessary, and that AMPI counsel might not
intend to use the sixty days to negotiate in good faith.
Accordingly, I directed the staff to prepare a proposed form
of depree to be delivered to Al^I counsel by the close of
business on Friday, January 28, 1972, and to. instruct A1>1PI
counsel to advise the Antitrust Division by the close of
business on Monday, January 31, 19 72, whether it would consent
in principle to the basic prohibitions in the proposed decree;
otherwise, the complaint V70uld be filed on February 1, 1972,
which was my penultimate day in office as Assistant Attorney
General. On Monday afternoon, January 31, 1972, I was informed
by Mr. Sarbaugh that AMPI counsel stated that A1-1PI could not
agree in principle to the prohibitions in our consent decree;
that AMPI's president had not received a copy of the proposed
judgment until Monday morning; and that AMPI could not resolve
in one day all the problems raised by the proposed judgment.
In consequence, I directed that the suit be filed on Tuesday
morning, February 1, 1972.
11. Except for the communications with Attorney General
Mitchell described above, to the best of ray recollection and
and belief, I did not at any time have any direct or indirect
communication with anyone in the Uliite House, the Republican
National Concnittce, any fund raiser for President Nixon, or
any fund raiser for any political committee or' other organi-
zation, rc]ating to the investigation of or suit against i..'.''l,
7986
or rc'lnLinf. to any direct or indirect political contributions
by nny ap,ricultural coopcrativo. In particular, I had no
communications relating to such matters with Messrs. Herbert
Kalmbach, John Dean, Gordon Strachan, Charles Colson, H. R.
Haldeman, John Erlichman, or any persons acting under their
directions .
12. To the best of my recollection and belief, I did not
at any time have any direct or indirect communications from
Attorney General Mitchell, or from anyone acting under his
direction, relating to any direct or indirect political contri-
butions by any agricultural cooperative. '
13. In making the decision to file suit against AMPI, as
described above, I exercised my authority as Assistant Attorney
General to authorize the filing of a complaint, signed by the
Attorney General, whenever I determined that prefiling negoti-
ations were not appropriate because there were significant
issues in dispute betv/een the parties. To the best of my
recollection and belief, I did not communicate with Attorney
General Mitchell about the proposed A>tPI suit after January 22,
1972. Specifically, to the best of my recollection and belief,
I did not inform him of my decision to terminate prefiling
negotiations and order the filing of the AMPI complaint, as
hereinabove described.
lA. I deny that I directed the investigation of AMPI or
the filing of the suit against AMPI for any improper purpose.
The investigation of AMPI was initiated solely as a result
of the independent decision of the Antitrust Division pursuant
to its obligations to enforce the antitrust laws of the United
States. My sole reason for directing that the AMPI suit be
7987
filed was to prevent and restrain what appeared from our
Investigations to be serious violations by AJ^PI of the anti-
trust laws.
Subscribed and sworn to before
me a Notary Public in and for
Cook County, Illinois, this
/ f r/^ day of December, 1973.
My commission expires
RICHARD v/. McLaren .
\ \
7988
U.S. Senate Select Committee
on Presidential Campaign Activities
AFFIDAVIT
I, Ben E. Morgan, reside at 7608 Parkview Circle, Austin
Texas. I am employed by Community National Bank, Austin, Texks
as President. I have been employed by Community National Bank
n^n^ H ^^""^ ^^""^^ °^ ^970, and I am familiar with the bank's
procedures for processing checks negotiated at this bank.
on td ?r^ examined copies of the checks described below, drawn
Au J?n ^r i""* °£ Jacobsen and Long, Citizens National Ba^k of
Austin, Austin, Texas, account number 36-263-8, that were
presented to Community National Bank for negotiation on the
fnH^|-i«« tV ^^*? ^^® possible exceptions of checks #1537
^pntfon ?>. ^""^ determined, based upon markings and endorse-
this bank ^^^P^^^' *h^^ all of the checks werl cashed by
fpn.ii*^°''§'^ ''^!^^! ^^^537 and #1538 are devoid of this bank's
tellers marking that would normally appear on their face if
casLr;: ?^'^"^^ I conclude that they too must have beln
thK ln> i a"^,,^a^le to locate any depository account (s) in
this bank for Mr. Jacobsen, Mr. Long or their spouses during
the period February I970. i^^u^et, uuixng
Check #
1537
1538
1835
1836
1919'
1920
2229'
2230
Amount
$ 3,000.00
2,000.00
4,250.00
5,750.00
4,250.00
5,750.00
2,250.00
2,750.00
Date of
Check
2/2/70
2/2/70
7/24/70
7/24/70
9/9/70
9/9/70
2/15/71
2/15/71
Date
Negotiated
a/2/70
2/2/70
8/6/70
8/6/70
9/9/70
9/9/70
2/16/71
2/16/71
Endorsed
by
Jake Jacobsen
Joe E. Long
Joe R. Long
Jake Jacobsen
Joe R. Long
Jake Jacobsen
Joe R. Long
Jake Jacobsen
Sworn to and subscribed before me
im — ^<^^ day °f '^^y^^J^ .
^^2_^
lota^Pura
My Commission expires:
Editor's nnhg; Only check No. 1919
Is published. The other checks were
previously entered as Jacobsen
exhibits 9, 10, 14, 15, 16, 19, and
20 in Book 15.
7989
1919
PAY TO THe
ORDER OF_
(g^lTIZENS NATIONAL BANK ;
'~" " ,.; -September 9 ic>70
JOE R. LOff<t|/r,Q"-.. , ':- ^, ^4,250.00
Four Thousand Two Hundred Fifty and no/lOO-r
SEP 1 0 (970
_ OOLCARS
T-felf
-M ^n.rAl%h^.
) i:iiitl"'a3E.7': 3E.-2&3 fl"'
p^-
/0000UJ5000/
'-:r;v:
7990
CITIZENS NATIONAL BANK =
January 8, 1974
I, John Parker, reside at 7102 Grand Canyon, Austin, Texas. I am
employed by The Citizens National Bank of Austin, Austin, Texas, as
Cashier. I have been employed by The Citizens National Bank of
Austin since August, 1970, and I am familiar with the bank's pro-
cedures for processing checks negotiated at this bank.
On January 7, 1974, I met Mr. Annunzio Chinni, a properly identified
member of the Staff of the United States Senate Select Committee on
Presidential Campaign Activities.
I have examined copies of the checks described below, that were
drawn on Account Number 36-263-8, scribed Jacobsen and Long, and have
made the following determination based upon bank markings and
endorsements:
Check #
Dated
Amount
1442
12-17-69
$2000.00
1443
12-17-69
3000.00
1485
1-8-70
1000.00
1486
1-8-70
1000.00
1608
3-18-70
1725.00
1609
3-18-70
1275.00
2710
11-10-71
2750.00
2711
11-10-71
2250.00
Date Cashed
12-17-69
12-17-69
1-8-70
1-8-70
3-18-70
3-18-70
11-10-71
11-10-71
Endorsed By
Bob A. Lilly
Bob A. Lilly
Joe R. Long
Joe R. Long
Jake Jacobsen
Joe R. Long
Jake Jacobsen
Joe R^ Long
The proceeds from the above transactions were not deposited to
accounts maintained by Mr. Long or Mr. Jacobsen at this bank.
POST OFFIC
7991
John Parker January 8, 1974 Page 2
The following is rny recollection concerning the blank checks sent
to San Antonio:
Some time during the ydar 1972, I received a request to send some
blank counter checks to one of the bank's accounts in San Antonio,
Texas, related to the Associated Milk Producers Incorporated.
I do not recall who requested the checks or the number of blanks
requested. Mr. Wallace, a bank employee, confirms that I instructed
him to deliver the counter checks. I do not recall the date or
much of the details surrounding this event, because it was not
significant at the time. I had been working closely with the indi-
viduals in San Antonio setting up their reconciliation procedures
and the request could have come directly from someone there. I
made the decision to dispatch Mr. Wallace.
Signed
Before me this day personally appeared the individual whose signature
appears above who by me being duly sworn upon oath says that the
statements set forth above are ture and correct.
Subscribed and sworn to before me this /Tv-/. day of yMny^^./^ .
19 7/.
/fM//-.> "^^
yl //l^^y /V. //C^JU'^ ) fiAil^H^ . Texas
Notary Public County
7992
SENATE SELECT COMMITTEE CM PRESIDENTIAL CAMPAIGN ACTIVITIES
AFFIDAVIT
District of CoLumbia
Cj.ty of Washington
I, William D. Pleasant, a resident of 2727 29th
Street, N. W., Washington, D. C., being duly sworn, hereby
depose and say as follows:
1. I am a hacker for the ABC Cab Company of Washington,
D. C., where I have been employed since January, 1973.
From July, 1971 until January, 1973 I was employed by
the Yellow Cab Company of Washington, D. C. as a hacker.
Prior to that, from January, 1968 until July, 1971, I was
a hacker for the Eastern Cab Company of Washington, D. C.
2. During the period 1970 through 1972, I would
chauffer for Mr. Nelson, Mr. Parr, and other AMPI officials
when they came to Washington, D. C. The way this was
usually arranged was that I would get a call from Mr. Nelson
or his secretary in San Antonio giving me the arrival time.
I would pick up the person or persons at the airport and
drive them wherever they wanted using a daily rate.
3. On one occasion I remember some discussion of John
Connally. On that occasion, I picked up Mr. Nelson, Mr. Parr,
7993
and possible others at the Madison Hotel'. One of the party,
Mr. Nelson, I believe, upon entering my cab, asked how long
it would take to get to the airport. After answering him
and being instructed to take thera to Page Airways, there was
some discussion that they had to catch Connally at Page
because Connally was leaving ^rom Page.
On the way to the airport and in the vicinity of the
Bureau of Engraving building, I saw a limousine, that I
recognized as belonging to Secretary Connally, pull in front
of my cab. I told the occupants of my cab that Secretary
Connally' s limousine was in front of us. I was instructed to
honk the horn and pull alongside. As I did this, I noticed
Mr. Nelson and Mr. Parr waving to the other car. I was not
able to see whether the Secretary was in his limousine but I
gathered from the reaction in ray cab that he was.
After a short time, I pulled in front of the limousine
and proceeded to Page Airways where I discharged my passengers.
I did not see Secretary Connally or his limousine while
at Page Airways.
TO WIT: WASH. D.C. ^ y^
DISTRICT OF COLLMBIA U,^^ /) ■ /^J>^^^/
William D. Pleasant
SUBSCRIBED & SWORN BEFORE ME THIS DAY JAKI'ARY 25, 1974
WILLIAM 0 FEASANT ^ — ~,^ ^ (^ ^A^
NOTARY
il^j Cooimission Expires |iuie 1^ 1921L
> NOTARY y
30-337 O - 74 - pt, 17 - 30
7994
UNITED STATES SENATE SELECT
COMMITTEE ON PRESIDENTIAL
CAMPAIGN ACTIVITIES
AFFIDAVIT
State of Texas
City of Arlington
I, Marvin M. Stetler, being duly sworn, hereby depose and say as
follows:
I worked for the Midland National Bank, Midland, Texas, from 1960
through June, 1968. In 1968, I was hired by Mr, Jake Jacobsen to be
President of the Citizens National Bank, Austin, Texas. In March, 1970
I resigned as President of Citizens National Bank to accept my current
position as President of the First National Bank in Arlington, Arlington,
Texas .
The following is my statement concerning the withdrawal of $100,000.00
from the T.A.P.E. account in the Citizens National Bank on Alq ust 1 , 1969,
and a $100,000,00 loan made at a later date by Bob Lilly, secured by a
Certificate of Deposit,
I have reviewed Exhibits A through G that appear to be copies of bank
records that relate to the above mentioned transactions:
(A) Signature Card for the T.A,P.E. account, dated
7-23-69, account #61-101-8,
(B) Debit slip dated 8-1-69, withdrawal of $100,000,00
from the T,A.P.E. account, signed by Bob Lilly.
(C) Loan Application dated 12-17-69 by Bob Lilly.
(D) Security Agreement pledging $ 1 00 , 000 . 00 Certificate
of Deposit #188 in the name of Milk Producers, Inc.
(E) Deposit slip for $100,000.00 dated 12-17-69 to the
account of T . A . P , E .
(F) Cancelled check #113 drawn on the account of T.A.P.E,
in the amount of $100,000.00, dated 12-19-69.
(G) Copy of Security Agreement dated 12-17-69, signed by
Bob Isham, which pledges a Certificate of Deposit #219
in the amount of $100,000,00 as security for a loan
byT.A,P,E, for the benefit of Bob A , Lilly.
T .?J°*®r.??'^''^'*^„*^ ^""^ 'O above, have been previously entered as Jacobsen exhibit 2 in Book 15 and
Lilly exhibit 4 in Book 14, respectively.
7995
Mr. Jake Jacobsen, Chairman of the Board of Directors, Citizens
National Bank, secured the account of the Milk Producers. Since the
account was brought to the bank by Mr. Jacobsen, I assumed that he had
arranged for it through a personal relationship with the milk people. I
personally did nothing to solicit the account. It was my understanding
at the tinne that it was to be a sizeable account.
In late July of 1969, I received a telephone call from Mr. Jacobsen
in which he informed me that the Milk Producers would like to withdraw
$100,000.00 in cash, and he wanted to know if we could have the currency
available on a specified date, that date later proved to be August 1 , 1969.
He said the money was to be withdrawn through a debit memo as per the
instructions of Bob Isham, and that Bob Lilly, a representative of the Milk
Producers, would pick up the money. I told Mr. Jacobsen that we could
have the money available and that it would probably take two or three days,
no nnore than a week, to accumulate that much currency. I do not specifically
recall, but I probably would have asked Bill May, who was then our Vault
Teller, to arrange to have the cash in the vault.
I do not remember ever having met Mr. Isham. I did not receive an
authorization fromi Mr. Isham regarding the withdrawal of the $100,000.00
cash. I do not recall making an effort to contact Mr. Isham in advance of
delivering the funds to Mr, Lilly. These arrangennents were made by Mr.
Jacobsen, and I have never been informed that they were contrary to the
wishes of Mr. Isham, Milk Producers, or anyone else.
On August 1 , 1969, Mr. Bob Lilly came to nny office at the Citizens
National Bank. Mr. Lilly was alone. I arranged to have the currency brought
to my office. Mr. Ken Odil, Executive Vice President, Citizens National Bank
was present at the tinne. The nnoney was stacked on my desk and Mr. Lilly
was given the debit memo to sign. Mr. Lilly signed the debit memo and
started to count $100,000.00 in cash. I recall that he did not complete counting
the money. He simply opened an empty attache case and raked the nnoney
into it. Mr. Lilly did not discuss the transaction or the use of the funds.
Mr. Lilly was in my office for no more than twenty minutes and departed
hurriedly.
I instructed Bill May, our Vault Teller, and Bobby Whittaker, our Head
Teller, to report the large withdrawal to the Treasury Department. A with-
drawal of cash through a debit memo is not an unusual banking transaction;
however, this is the largest single cash withdrawal in which I have been
personally involved.
Exhibit C reflects that a loan application was prepared for Bob Lilly on
December 17, 1969 in the amount of $100,000.00. The loan application was
not signed by an officer of the bank. Although it has nny nanne typed in the
space provided for the lending officer, I did not sign the application. It did,
however, have the initials of three members of the Loan-Discount Comnnittee
signifying its approval.
7996
Exhibit D reflects that there was a pledge of a Certificate of Deposit #188
in the amount of $100,000.00 in the name of Milk Producers, Inc. to guarantee
the loan of Bob A. Lilly. The signature line is for "Milk Producers, Inc. ,
by Assistant General Manager" . The signature itself is illegible .
I have no personal recollection as to any of the circumstances surrounding
this loan. I do not rennember who arranged for the loan, or under what
circumstances it was presented to the bank. I do not rennemiber whether
there was or was not a Corporate Resolution authorizing the pledge of Milk
Producer funds for the benefit of a loan to Bob A. Lilly.
Exhibit F, the copy of cancelled check #103 on the account of T.A.P.E. ,
account #61-101-8, in the amount of $100,000.00, dated 12-19-69, has a
notation in the lower left corner, "Certificate of Deposit", which may indicate
that it was used for that purpose.
TVtvuu^^'^
state of Texas
County of Tarrant
Sworn before me this
day of
:* ■ r -
, 1974.
a
/v /
^^C
Notary Public in and for
Tarrant County, Texas.
My commission expires 6-1-75
7997
Austin, Texas,
Wo arc chorQing your account oi
M-l-GO
Pfr-,
„ ....■r-,.;pi. Of gnnn, 000. 0.0 '•cujh u-z./iywlcd-ioa
Ui.i:j 1;:L .luy oJ. Aur|u::L, J'JGO fKjf iii::LrucLionrj
of Bob Isham.
EASE SEE THAT THE AMOUNT rs DtDUCtTLo OM YOUR ~^
APPROVED DY
T. A. P. E.
l\9v;^
Acct. :oi-T6i-.8'i.---
zoo lOOOOCGC;/.
7998
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7999
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l-.'IX:;"'/ ^O r:jVc
5DJC3X 'OlUOtUy "D^
■*MH <joi!|iv./ I"M HI'ON I 101
3 d V 1
8000
'^^ SECURlTY_AGllElvMENT
(I'LEUCE)
T. A. P. E. for benefit of Bob A. Lilly
Debtor's N.imc
1011 N. iW. Military Highway Bexar SaiiAntonio, Texas_
Mnil Address Cily Coiinly Sl.ilc Zip
(liciciniiftcr c.ilh-il in ^iccord.iiKO willi llic Uiiifcuii Cnijiincrdal Codc-DlllJ TOR) fcir vnliu icivod licreby j;r:ii)l5; Id
Citizens National Bank
Secured P..r;ys N';inie
(liCTcin.iflcr cnllod in accnrd,''i)cc with the Uniform Comnierci.il Code— BANK) wliose mail ;h' ' 'ss is
P. _O^J3ox 459b _ AustijT Travis Texas
Cily CoiMily Stnle Zip
a Mcurily inlcri.-st in and cUivcrs (o SKCUlil-:0 PARI Y llie following dcsc libid property (\vhi( ' c-rrinafti-r is itfcir.-a
I.I as COLLAq'EHAL) lo-wit:
One (1) Citizens National Bank of Austin Certificate of Deposit No i 0219
for $100, 000. 00 issued to T. A. P. E.
It. -. .,ire DhHTOR'S note to SECURED PARTY dated 12-17-69 19_ . f,,r .$ lOOjJI'"'^. 00 .
DKBTOR WAIiRANTS, COVENANTS AND ACREES:
1. That all (in.nneial or ercdil sl:.Icmpnts drposit.-d with or relied upon by SECUIiED PARTY nri.-r In. coi.li j,!-, i.iji.oiivly witli, or
subsequent to execution of this Security Aj^reeuicnt .^^c or will be true, correct, complete, v.ilid aritl r. ..uine.
2. Tlinl all iiivestminl sceurilies. in<lriini.-nts. cb..|tcl p.ipcr .ind any hie propcrlv flpl.Mrcd In MXrUI-l') I'AlilV .l^ ( Ol .1 \1 KRAI.:
(a) are ircnuii.e, free from .ndvcrse cLiims or other securilv inteiesi, default, pr.|.,vHM ul or d. '.,.<,■>; (L) ,11 ,- ^ i,. ..| ,v „„,,; i,, l,e i.Mi-
g.il.d ihcKon li..xr aullmrity and capririty lo contract and arc b<.und tl.rreon ..- \\,. v .,|,p, .ir to br f.-..!n li.e f..cl ih. .-...I, :.:.d pj tic same
ciiniply svith applicable laws concerninc form, content and manner or prep.L.-.iln.n -ii.d cseculion.
3. That DEBTOR owns the COLLATERAL and has the riKht to l..n,4, r ,nn interest therein; the COIXATERAL is m.l su1.,i,l
to the interest of any third person; and DEBTOR will defend the ClII.LAlJlRAL and its proceeds aRainst the claims and dcn.aiKls. of
all third persons.
4. Th.it DERTOR shill p.,v p.-im lo d.li;,.|.i. i.cy all I.incs. ch.iites, hens and assrssinents acainst the COLLATERAL, and upon
nixrons r.nlm-e m d,. -o. si t.l Hr.D rAlllY ,il its cplioi, n...v p.iv ;a,v ,.f thr :n aud sh.,11 be the sole judee of the lec.lilv or v.llid-
ilv iL, r,..l „l li.e ..u,.,>„ I ... ;, ...MS lo .hs.!..,rte tl,./ s.„ne. S.„ h' lasrn. 1,'t slull become p;.n uf the indcbl.-dnoss secured by this Seeiir-
a> Atrcmo,; ,,M,1 si,,, II 1„ p,,i,! to bECllll-:D I'ARTV by DEBTOR iuimediatoly without d.'iuand, with inlciest th.rcon at the rate of
1, n p, r cnl (1U-.) p.r ;i.i.,uTn
i SI'.t UR!:D par I VS dniv «-ith reference lo the COLLATERAL shall be solely lo use re.isonahle lare in the euslody and pre-
set iK.u of troLLAIERAL in SECURED PAIiTVS possessiun. and to rec-eive enlleetions. rcnulLin<.es .and pavm.i.ls on su( h COL-
I M! i:\I. .,s ,,,,,1 v)„,, nude and reieised by SIX'URED PARTY aud the SECURED PARTY shall h.ivc the '..pli..n ..f .ippMni; li'.e
is :o K.ri\r.l. nfu-r dtilui lii.us of any collceliun costs incurred, as payment upon any ind.l.lr.ln s ..I Di liVOH In
V p„r-u..!il lo provisions of this Security Acreemeul or hol.lini; the s.,in, for the .i. <ouiil .1 1)1 liOll, Si;(l IIIO
) I. i.'i'n.mMc iu ;uis- s>:.s for any d.preciation in the sahie of ihe COM AIIHAI. i...r si... II .,.,v i!ii:y ..( i. i . ...i' .l.ly
-: i "IHMI bl-.l 1 HKD I'AHTY lo take necessary steps to pr.s,.,,e iii;hls ai;ai.,sl |ihi i,,,l,.s or lo . ,ti.i c ,i.|l.,lion of Ihe
l^wl I \ILHAL by legal poieecdinRs or olherwisc.
ll.e w.,rr,nlies, eosenauls, knns ;M,d acree uts on the reverse ,i„^f^ rS^f .y** iuc.i,j„.r.,U d l,.,,iu I .„.„I,. a put li. reof f„
.11 ; .!. lis ,,u.l poses. DEUTOR and SECURED PAHIT
" IS. ■ -oiS or .n.si,;ns of llio.-e p.ili.-s.
All !-.-.:.;icnc..'S to DEBTOR shall also be S
n„-,,l 12-17--69
#
I ....; .1 i.-;s i.!!/:;w;\' .; '">.■
8001
CITIZENS NATIONAL BANK <
I, Don Wallace, Reside at 2115 Brunswick, Austin, Texas. I am
employed by Citizens National Bank of Austin, Austin, Texas, in
their Loan Department. I have been employed by the bank since
June 7. 1971.
On January 8, 1974 I met with Annunzio Chinni, a properly identified
staff member of the United States Senate Select Committee on
Presidential Campaign Activities, and related the following events:
In April 1972, I was employed in the Collections Department of the
Citizens National Bank. Mr. Parker, Cashier and Personnel Manager,
instructed me to deliver an envelope addressed to The Associated
Milk Producers, Inc., San Antonio, Texas. I have examined my expense
records and they reflect that on April 4, 1972, I was reimbursed by
the Bank for a dinner meal in San Antonio. I attached the Dinner Check
from Jim's Coffee Shop. The reimbursement was authorized because
I made the trip to San Antonio late in the day. To the best of my
recollection, the envelope was addressed to Mr. Bob Lilly. I do not
know Mr. Lilly, and I do not recall the name of the individual to
whom I delivered the envelope. I was not informed as to the
contents of the envelope.
Signed
Date
■wz-
Notorized By (^U/v-iloV^ (S* S>'-r<3^'<^
Date \-?0^ \) -A. i>
8002
SENATE SELECT COMMITTEE ON PRESIDENTIAL CAMPAIGN ACTIVITIES
AFFIDAVIT
District of Columbia
City of Washington
I, Alan S. Weitz, a resident of Washington, D.C., being
duly sworn, hereby depose and say as follows:
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, Mr.
Donald Sanders, Deputy Minority Counsel, and I interviewed
Mr. Murray Chotiner on December 7, 1973, and Mr. David Dorsen
(Assistant Chief Counsel), Mr. Dennis Summers (Assistant
Counsel), Mr. Robert Silverstein (Assistant Minority Counsel)
and I interviewed Mr. Chotiner, again, on December 10, 1973.
On the day of the first interview, Mr. Sanders wrote a
memorandum summarizing the substance of the interview. On the
day of the second interview, I wrote a meraorandxim summarizing
the substance of the interview.
3. On January 24, 1974, Mr. Dorsen advised me that he
had telephoned Mr. Chotiner 's office to arrange to obtain
sworn testimony in executive session before the Committee on
the subjects of the interviews, and was advised by Mr. Chotiner 's
secretary that he had been in a serious automobile accident the
preceding day. Mr. Chotiner died on January 30, 1974.
4. I am executing this affidavit in order to preserve,
in the most reliable form, the substance of Mr.' Chotiner 's
account related to us of relevant events. To this end,
(1) Mr. Sanders and I reviewed the December 7, 1973 memorandum;
(2) I caused my December 10, 1973 memorandum to be retyped
on Committee letterhead stationery to correct any typographical
errors, to spell out certain names and to rewrite certain
cryptically-phrased sentences in the original December 10
memorandum. I did not alter the substance of the earlier
memorandum; and (3) I showed the retyped December 10 memorandum
to Messrs. Dorsen, Summers and Silverstein.
5. Mr. Sanders and I agree that the December 7 Sanders
memorandum is a true and accurate account of the substance of
the December 7 interview with Mr. Chotiner. Messrs. Dorsen,
Summers, and Silverstein and I agree that the retyped December 10
memorandum is a true and accurate account of the substance of the
interview with Mr. Chotiner of that date.
8003
Affidavit
Page 2
6. Attached to this Affidavit are the following:
Exhibit A: copy of the December 7, 1973 memorandum from
Donald G. Sanders to the File re: Murray Chotiner Interview;
Exhibit B: the retyped December 10, 1973 memorandum
from Alan Weitz to the File re: Second Chotiner Interview.
Subscribed ^and sworn to before me
this 271*' day of =J-8ft>f uqJlI / ., 197^.
.s 271^ day of
Jotary Public
My Commission Expires 10/31 1 ^^
8004
Exhibit A
. -(ALMADCE. CiL rr>VAItD J. CUKHCT. i
QlCnifcb ^fafcs Senate
SCUECT COMMITTCC OM V
pncsior.NriAL campaign activitic* 1
>- WA^mr-iGTON. o.cl 20510
MEMORANDUM
To:; File :^ \
From; Donpld G. Sanders
Dat^ December 7, 1973
Subj; Marray Chotj.Der Interview
Milk Fund
Murray Chotiner was interviewed today in his office at I7OI
Pennsylvania Avenue, Washington, D.C, telephone 298-9030. Attending
were Donald G. Sanders, Alan Weitz, and Chotiner.
From January 1970 to March 1971, Chotiner was Special Counsel to the
President. Previously, he was General Counsel to the Special Representa-
tive for Trade Negotiations in the White Ho\ise, In March I97I, he
became of counsel for Reeves & Harrison. T
Chotiner said his first contact with the milk industry was in I97O at
which time he met Parr and Nelson. He was introduced by Harrison. He
learned the dairy people were going to assist the I97O candidates.
Harrison knew that Chotiner was serving as the White House liaison
with the 1970 candidates. Chotiner thinks Parr and Nelson may have
been on their way to see Harry Dent in an adjoining office. Chotiner
didn't discuss with them any details of the contributions. Chotiner
knew that Colson had responsibility for groups and organizations.
Chotiner was not a party to any meetings in late I97O between the dairy
people and Colson and associates. Harrison told Chotiner recently that
Parr and Nelson met with Colson (Harrison didn't attend), at which time
Parr was supposed to have said that dairy farmers were not being treated
properly; that they were for the President and wanted to help him.
There was also talk of $1,000,000 or $2,000,000 to be contributed to
the campaign. Parr told Harrison of this talk. Parr said Colson said
there couldn't be any qtiid pro quo.
In 1971-1972, Colson showed Chotiner the Hillings letter which he had
in his safe. Chotiner was probably talking to Colson about the milk
Industry troubles with the Department of Agriculture. One troiible was
the milk products Imports, and one must have been the milk price
8005
support. This was at a time when Chotiner was back in private practice.
He doesn't keep a calendar or log which would show meetings with
Colson.i Chotiner has only met with him a few times since leaving the
White House. Most of Chotiner's clients are retainers — doesn't bill on
a time basis,
Chotiner was shocked at Hillings' letter — thoiight it was crass. Hillings WM
hs4 said that he never intended for the President to see it; that he
felt it was necessary as the dairy people were getting kicked in the pants.
Aside frcsn the Parr and Hillings statements, Chotiner doesn't know of any
specific amount of money to be given by the daiiry industry.
Colson once told Chotiner that he wanted to disassociate himself from
any further contact with the dairy industry — ^based on Hillings' letter.
Chotiner recalled that Harrison said he had toned down the Hillings'
letter. Chotiner didn't know what was meant by "special project," and
when he asked Harrison what was meant by this, Harrison said he didn't
recall. Chotiner didn't talk with Hillings about the letter. — 7^
Shortly after joining Reeves and Harrison in March 1971> Chotiner did
tell people in the Government that the milk support level should be
increased. He left the White House on March 6, 1971. After the
Secretary of Agriculture decision on March 12, Chotiner talked with
Ehrlichraan (Gridiron Dinner), Whitaker, Colson, Cashen. Separately,
but in substance, he told them the Republicans usually carry the
Midwest, but they need the farm vote to do it, that they need the Mid-
west to carry the election. He commented that nearly every prominent
Democrat had sponsored legislation to raise support. If the price is
going up, he said it was stupid to let the Democrats get the credit for it.
Chotiner was not sure that he knew of trust funds at this time.
He knew the dairy folks bought one or two tables at the Republican fund-
raiser on March 2k, 1971.
Chotiner recalled talking with Harrison about the appearance that the
milk people didn't want to buy any tickets for the dinner — he told
Harrison he thought they shoxild buy some. He didn't talk with anyone
else about this.
After the dinner, J^otlner^di^taUs withj^elsonu^ ^^^V^
wanted to ma£e" a 'l:6ntHbutipn ^_Haicrl spn_ would_l toow "tojwbom
^^^ve it. J^.lmbAchjHas._also^presjntj^it^
There was some annoyagge or conflict between Colson and Harrison.
Therefore, Chotiner /asked to serve as liaison between the dairy people
and the Government. He was asked by Ehrllchman (or someone In his
behalf), Chotiner was going to California, and was asked to stay for
8006
a meeting. After dinner, Chotlner met Nelson in the lobby, called
Kalmbach's room, and met in his room (he had been in bed). Chotiner
told them he vould act as dairy liaison with the Government for their
problems, and Harrison vould continue to serve as dairy counsel.
Chotiner said nothing else of significance vas discussed at this
meeting.
Chotiner told Nelson that Harrison vould provide names of committees
for any contribution the dairy Industry mipht make. Chotiner said
Harrison vould be in touch vlth them. Kalmbach didn't say much. There
was no discussion of price support or definite amounts to be contributed.
Chotiner speciilated that the only reason Harrison couldn't have met with
Nelson and Kalmbach as well as Chotiner was because of the friction
between Colson and Harrison. Chotiner did not know why it was so
important to have the meeting that night so as to cause him to postpone
a trip. *
When asked how he knew that Harrison would serve to tell Nelson how
the contributions were to be made, Chotiner said it was just based on
the fact that Harrison was counsel for AMPI.
Chotiner saw Colson on March 23. He didn't recall if that is when he
learned of Hillings' letter or the bad rapport with Harrison,
8007
Exhibit B
'^CnHcb ^lctie& Genetic
select committee on
presidential campaign activities
(pursuant to s. hes. 60. ijd congress)
Washington, d.c. 20510
MEMORANDUM
TO: FILE
FROM: ALAN V7EITZ
DATE: DECEMBER 10, 1973 (RETYPED FEBRUARY 13, 1974)
SUBJECT: SECOND CHOTINER INTERVIEW
Today, Dave Dorsen, Dennis Summers, Bob Silverstein
and I continued our interview with Murray Chotiner.
1. March 24. 1971
Colson was "uptight" and annoyed with Marion Harrison
and Pat Hillings. He had told this to Chotiner even before
he left the White House, (Colson and Chotiner were 2 of 4
special counsel) and again when Chotiner saw Colson twice
on the 23rd (9 or 9:30 A.M. and 6 P.M.) Colson may even
have shown the Hillings letter to Chotiner on the 23rd.
(Between the 6th and the 24th, Chotiner also had one meeting
in San Antonio with Harrison, Hillings and the client.)
On the evening of the 24th at the Republican fund-
raising dinner, Ehrlichman (or one of his staff) told Chotiner
that Colson was uptight and annoyed and that he didn't want
to have anything to do with dairy people if they represented
them. Ehrlichman then asked Chotiner if he would take over
as liaison for the dairy people on quotas, price supports
and other government matters. Chotiner replied that, since
he was Of Counsel and the dairy people were Harrison's clients,
he couldn't take over, but he would help. Ehrlichman also
asked if he could meet with the milk people, in Kalmbach's
presence, to tell them so. Chotiner said he couldn't the
8008
next day since he had plans to fly out to California.
Ehrlichman then suggested that they meet that night. So,
at the dinner, Chotiner told Nelson "let's get together
with Kalmbach to talk about the milk decision" and then he
talked briefly to Kalmbach to get his room number in the
Madison Hotel. Chotiner also informed Harrison. Chotiner
hasn't talked to Ehrlichman about this since then.
Chotiner explained that it would have been unseemly
for a government official to have been present when Chotiner
told Nelson of the change in representation, but that Kalmbach
lent greater credence to it.
Chotiner said Ehrlichman did not mention the price
decision or contributions. Chotiner says that he didn't
learn of the Administration decision until it was publicly
announced on the 25th. The dairy people were very happy
after the meeting with the President.
Chotiner went to the Madison Hotel after the dinner
and called Kalmbach 's room but couldn't reach Kalmbach.
Nelson arrived and after waiting for some time, he and
Chotiner realized they had been calling the wrong number.
They then reached Kalmbach and went up to his room. Since
the dinner ended around 11 P.M., and they waited a half hour
or so, it was 11:30 or midnight when they finally met with
Kalmbach.
It appeared to Chotiner that Nelson and Kalmbach
already knew each other. At the meeting, Chotiner said:
"Harold, it's no criticism of Marion or Pat; maybe
they don't like the way they comb their hair,
but there's bad feeling between Colson and Marion,
and Pat. So they want me to represent you in
dairy matters unless you object."
Nelson: "O.K." (He seemed to have heard about
it before; in fact he never asked about Harrison's
absence from the meeting.)
Chotiner: "Herb, is that your understanding?"
Kalmbach: "Yes."
8009
Nelson: "We had a satisfactory meeting with the
President and we appreciate it. We contribute
to both Democrats and Republicans. If we want
to contribute to Republicans, how should we do so?"
Chotiner: "Harrison is still your attorney for
such matters, and he'll give you the names of
committees."
Chotiner does not recall any further discussion;
he and Nelson then left Kalmbach's room. Chotiner went home
and the next day (the 25th) he left for California.
Chotiner says that he assumed the contributions
would be substantial, although he didn't know the specific
amount. Chotiner does not believe there was any specific
reference at the meeting to substantive issues.
After the meeting, he informed Harrison, but he never
talked to Colson about it. After Chotiner met with Colson once
or twice, Mitchell called Chotiner (in April or shortly after
returning from California) to tell him that signals had been
changed and Harrison was again acceptable as representative
of the dairy people vis-a-vis Colson. Chotiner told Harrison,
and Harrison didn't seem surprised. Nonetheless, Harrison
continued to deal primarily with Cashen, and Chotiner with Colson,
Chotiner knows of no dairy contacts with Connally.
2. 1971 Contributions
Chotiner doesn't remember telling Harrison, after
the March 24 meeting, about the contributions discussed
by Nelson at the meeting. At some point, (Chotiner thinks
more than a week after the 24th), Harrison showed Chotiner
some of the "silly" names of committees. Chotiner remembers
names of only some committees, of the 100, being provided
at first to Harrison and the dairy people.
Chotiner wasn't directly involved in the contributions.
However, in the summer of 1971, Harrison went to Europe,
Before he left, he told Chotiner that the contributions
were not coming in as anticipated. Chotiner confirmed this
by calling FCRP, and called Dave Parr who said he wasn't
sure he had all the names of the committees. So Chotiner
30-337 O - 74 - pt. 17 - 31
8010
had Harrison's secretary send a list of the 100 committees
to Parr, marked to indicate committee names already sent to
the dairy people by Harrison. Chotiner had some idea that the
contributions were being coordinated among the three dairy
co-ops. When the checks came in to Chotiner, he merely had
a secretary take them to FCRP. After August, 1971, he had
no further participation in the contributions.
2. A. 1972 Solicitations
Only recently did he hear from Harrison of AMPI
meetings with Kalmbach in 1972. Chotiner says he had no
contemporaneous knowledge of such meetings or of any further
solicitations.
3. Ellsberg Break-In
Sometime in 1971, Colson asked Chotiner if the dairy
people wanted to give $5000 to another committee, for some
work or proiect. Chotiner passed the information on to
Harrison, without ever knowing any details.
Chotiner cannot explain why Harrison thinks Colson
called Harrison directly. Chotiner told us that Colson may
have called Chotiner who told Harrison who, in turn, called
either Colson or Cashen.
Chotiner says that Harrison once told him that
someone (presumably Colson) "over there" (in the \<lhite House)
had suggested that AMPI hire Wagner and Baroody for public
relations work. Chotiner knows nothing further except
that he thinks they were retained. He thinks they needed
public relations work to help their image.
4. Antitrust Suit
Harrison told Chotiner about the Justice Department
antitrust suit against AMPI, after it was filed. Chotiner
may have talked to Colson about it. The key objection by AMPI
was that there had been no 30 or 60 day pre-filing negotiation
period. Harrison and Chotiner decided to wait until the
new antitrust chief was named before pursuing it. (Chotiner
got the impression from Harrison that McLaren was responsible
for filing the suit just prior to his leaving the Department.)
But the next night, after the Harrison-Chotiner conversation.
8011
Chotiner saw Mitchell at a party. Chotiner took the opportunity
to tell Mitchell that AMPI should be treated like any other
defendant in the up-coming post-filing negotiations. He
says Mitchell didn't respond.
Chotiner was first shown the Harrison letters
(attached)*last week, and he was upset. He says that, contrary
to the implication of the March 25 letter to Mehren, they
they did not discuss talking to Kleindienst, but only to
McLaren's successor. Although Chotiner never again talked
to Mitchell about the suit, he understands Harrison did
later talk to Kleindienst. (Chotiner once talked to Bruce
Wilson about an unrelated matter.)
In 1972, AMPI fired Reeves & Harrison because
the firm was not getting a good iresponse from the Administration.
5. FCRP
Chotiner was in charge of ballot security in the
President's 1972 campaign. He was reimbursed for his expenses
and for the money he paid to reporters. When he left the
White House, he received money from Kalmbach for part of
his secretarial and phone expense (but never his rent at
Reeves & Harrison.) AMPI paid for part of his secretary's
furnishings; he always paid for his rent ($625 per month)
out of his monthly payment from the firm.
*The Harrison letters referred to above have been previously
printed in Book 16 as Mehren exhibits Nos. IB and IC.
8012
UTJITED STATES SENATE SELECT
COMMITTEE ON PRESIDENTIAL
CAMPAIGN ACTIVITIES
AFFIDAVIT
State of District of Columbia
City of Washington
Ij Bruce B. Wilson , being duly sworn ^ make this
affidavit for the Senate Select Committee on Presidential
Campaign Activities.
1. I am the Deputy Assistant Attorney General,
Antitrust Division, Department of Justice, and as such, I am
familiar with the civil antitrust suit captioned United States
V. Associated Milk Producers, Inc., Civil Action No. SA 72 CA 49,
2. I hereby affirm that the following listed doc\aments
(see attachment) are now contained In the files of the
Department of Justice and that the attached are ti-ue and
accurate copies thereof.
Sworn and subscribed to
before me on the e? 5/ day
of January, 197^.
H/ Commlmot. Expira Anpat Jl, 1976
8013
ATTACHMENT
1. A memorandum, dated February 23, 1971j from Robert B, Hummel
to John E. Sarbaugh concerning a preliminary inquiry into price-
fixing activities of major milk producers.
2. A memorandum, dated August 11, 1971 j from John E. Sarbaugh to
Baddia J. Rashid concerning the request for a grand Jury
investigation of AMPI.
3. A memorand\im, dated August 17, 1971, from Robert B. Hummel to
Gerald Connell.
4. A memorand\im dated August 23, 1971, from Gerald A. Connell to
Robert B. Hummel concerning the conduct of AMPI.
5. A memorandum, dated August 25, 1971, from Robert B. Hummel to
Messrs. Comegys and McLaren.
6. A memorandum, dated September 9, 1971, from Walker B. Comegys
to Richard McLaren.
7. A memorandum, dated September 9, 1971, from Richard McLaren to
the Attorney General concerning the proposed grand jury
investigation of AMPI.
8. A memorand\am, dated October 29, 1971, from Richard McLaren to
the Attorney General concerning the proposed grand jury
investigation of AMPI.
9. A memorand\:mi, dated November 10, 1971, from Robert B. Hummel
to Richard W. McLaren concerning AMPI.
10. A memorandum, dated November 30, 1971, from Attpmey General
John Mitchell to Dick McLaren.
11. A memorandiim, dated November 30, 1971, from Richard McLaren
to Baddia J. Rashid.
12. A memorandum, dated January l8, 1972, from Richard McLaren to
the Attorney General concerning the proposed civil antitrust
suit against AMPI.
8014
13. A memorandum, dated January 22, 1972, from John Mitchell to
Dick McLaren.
14. A memorandum, dated January 24, 1972, from John E. Sarbaugh
to File No. 6C-I39-I66 concerning a telephone conversation with
Stuart H. Russell.
15. A memorandum, dated January 25, 1972, from Eonald L. Futterman
to File No. 6O-I39-I66 concerning a meeting with Martin Burns.
16. A memorandum, dated January 27, 1972, from James J. Kubik to
File No. 6O-I39-I66 concerning a telephone conversation between
Kubik and Martin Burns.
17. A memorandum, dated January 27, 1972, from James J. Kubik to
File No. 6O-I39-I66 concerning a meeting attended by Martin
Bums, Erwin Heininger and various members of the staff of the
Chicago Antitrust Division.
18. A copy of the civil complaint in the suit captioned United
States V. Associated Milk Producers, Inc., Civil Action No.
SA 72 CA 49, filed February 2, 1972.
19. A Department of Justice Press Release, dated February 1, 1972,
concerning the civil antitrust suit filed against AMPI.
20. A memorandum, dated July 26, 1973, from Thomas E. Kauper to
the Attorney General concerning political contributions and
the filing of the case against Associated Milk Producers, Inc.
8015
EXHIBIT 1 \
Corres
Mr. Rashld
Mr. McLaren
Mr. Comegys
Chicago
Miss McGrann
Miss Peck
Chrono
Hold
John E. Sarbaugh, Chief
Chicago Office
Robert B. Hunrael ^- «•
Deputy Director of Operations
RJFavretito :mvia
February 23, 1971
File: 60-t3f-0-
Milk - Dallas, Texas - Price Fixing '
Malor Milk Producers in the Pallas. Texas Area
Attached Is a copy of a mecaorandum froa Mr, Markus .A'''
to Mr. Hummel, dated August 25, 1970^^_^jiich is self-.^A^
explanatory. You are hereby authorized to conduct a
preliminary inquiry into the price-fixing activities j
of major milk producers in the Dallas, Texas area.
Attachment
F.T.C. CLu^rAKCE GRANTED
\ ^EXED 0«
SB
ITS
i
^i?-.?
^
15
-■-, « T. ■
n 5J-
i :.
^''''-iCi^AVu').
r» -
130
APR 29 1971
ShTl-IfiOSJ-
ilJ
8016
P?u.^^,^jUA.
UNITED STATES GO' ERNMENT
Memorandum
' DEPARTMENT OF JUSTICE
2-
JES,ai;l)augh:abh
DAxfe: August U, 1971
File: bO-\ir^
Mrs. Schneldermaa
Mr. Hunter
Baddla J. Rashld
Director of Operations
FROM : John E. Sarbaugh, Chief-
Midwest Office
subject:' Associated Kllk Producers, Inc.
Request for Grand Jury Investigation
Attached are (I) Rebecca Schneiderman's meraorandura of
August 10, 1971 recommending a grand jury investigation in
Tulsa, Oklahoma, of alleged antitrust violations by AMPI in the
marketing of milk in the Hidv.-est and sunnarizing facts showing
possible violations in several geographic areas in the Midwest,
including Chicago, Tulsa, Ardmore (Oklahoma), and several cities
In Texas; and (2) proposed Memorandum For The Attorney General. /
AMPI is a hugh agricultural cooperative with 30,000 dairy
farm members located in the Midwest from Canada to Mexico, plus
Pennsylvania. AMPI is engaging in practices which are:
1. Forcing nonraeraber milk producers to join AMPI unwillingly,
and I
2.. Forcing milk processors and manufacturers to enter Into
full requirement contracts with AMPI unwillingly.
More specifically, AMPI uses the Department of Agriculture
regulations and Its economic power in such a way as to result in
the foregoing situation by:
1. Agreeing with manufacturers of dairy products such as
cheese, powdered milk, and butter, that their suppliers of milk
will receive the federal milk order blend price if the manufacturer
will resell fluid milk only as directed by AMPI.
2. Agreeing with about 20 smaller cooperatives to set up a
fund to pay a premium price to producers and manufacturers not
covered by any federal market order if the producers and manu-
facturers agree not to sell fluid milk In federal milk marketing
areas.
3. Threatening to cut off the supply of AMPI fluid milk to
processors and manufacturers unless the processor or manufacturer
signs a full requlrenje'nt contract with AMPI.
8017
A. Informing nonmeraber milk producers, supplying noncompllant
processors and manufacturers, that they must join AMPl invnediately
or they will not be allowed to join later, when the noncompllant
processors and manufacturers are no longer available as customers,
and the only customer for milk might be AMPI,
5. Flooding an area with Class II milk (used in processing
cheese, butter and powdered milk) which has a lower price than
Class I milk (fluid milk), thus lowering the federal milk order
blend price to the detriment of nonmember producers, but not to
the detriment of member producers who are subsidized by AMPI,
6. Shipping AMPI produced dairy products (including ice
cream and fluid milk) into areas where AMPI is having difficulty
inducing a processor or manufacturer to enter into a full
requirement contract for fluid milk, and selling in that area
at cut prices in competition with such processors or manufacturers.
7. Penalizing processors and manufacturers who will not
enter into full requirement contracts by charging them more for
milk they buy from AMPI than is charged processors and manu-
facturers who buy milk from AMPI under full requirement contracts.
8. Boycotting milk haulers who pick up milk from nonmember
producers.
9. Buying out, at Inflated prices, milk haulers, processors
and manufacturers which continue to deal with nonmember producers.
These tactics by AMPI run counter to our antitrust concept
of lawful conduct in the market place and are not exempt from the
antitrust laws. These tactics are not confined to joint marketing
efforts by agricultural producers. They involve coercive acts
against agricultural producers who do not want to join AMPI and
against nonco-op processors and manufacturers v>ho do not want to
buy all their milk requirements from AMPI,
AMPI, however, would undoubtedly attempt to justify its
actions by claiming it has increased and maintained the prices
that producers receive for milk. This is supportive of a long-
time effort by the Department of Agriculture. And it Is generally
conceded that the Midwest producer is not receiving an unreasonably
high price for his milk. Also the consumer is not paying un-
reasonably high prices for milk in the areas where AMPI operates.
The Department of Agriculture regulates milk to the extent
of determining the minimum price to be paid by processors and
manufacturers, and of establishing rules for determining which
producers, processors, and manufacturers are covered by^which
local pricing orders. Although it is safe to assume that the.
8018
Department of Agriculture has received many complaints against
AMPl's tactics. It has beea very slow to respond. However,
United States v. Borden Company. 308 U.S. 188, decided in 1939 that
such regulations by the Department of Agriculture did not Immunize
agricultural cooperatives' nonprice-f Ixing activities from the
prohibitions of the Sherman Act. Except for the exemption allowing
producers to market jointly, the activities of an agricultural
cooperative are subject to the same antitrust strictures as other
business entities.
Even though AMPI has been able to obtain a premium price over
the federal milk order price from fluid milk processors, there is
evidence that some farmers in AMPI receive less than independent
farmers or farmers In other cooperatives because: (I) A>iPI skims
money that would otherwise go to the farmer to finance its
administrative staff and its organizing activities; and (2) AMPI
has developed a schedule of payments to its producers (called the
"base plan") that makes milk production uneconomical to some
producers. Finally, It should be noted that most of our complainants
are producers or their representatives who do not think AMPI member-
ship Is advantageous.
I believe we know enough about the nature of AMPl's practices
to decide at this time whether AMPI should be criminally prosecuted
if we can obtain evidentiary proof in support of these tactics. I
think some governmental investigation is needed. In the absence of
any such action by the Department of Agriculture, I think It is
appropriate for us to make such an investigation.
I concur in Rebecca Schneldermaa's recommendation for a grand
jury Investigation.
Attachment
8019
EXHIBIT 3
Focm OJ-96a
(Rev. 5-22-66)
Department of justice
ROUTING SLIP
;>-
□ signature □ comment (Ojr-j ^|yill>EA.co}<veRSATioM
□ approval I 1 NECESSARY AtrTION | ] AS REQUESTED
□ SEE ME □note AND RETURN QnoTE AND FILE
□ recommendation □CALLMt □yoUR W/ORMATIOW
□
ANSWER OR acknowl-
edge on or before _
PREPARE REPLY FOR
THE SIGNATU
Lc'/i'f'/CoJ^'
ARKS V
from:
BUILDING ft ROOM
im^
VUL
8020
UNITED STATES GO\ ..<NMENT
^Memorandum jt;" n n ri:
TO : Robert B, Hummel [0) fl FdI
Deputy Director of Operariong L'
• ' - t£/a t^a Uba File:
EXHIBIT 4
/ "^^EPARTME-NT OF JUSTICE
GAConnellcg
date: August 23, 1971
Gerald A. Connell, Chief
"erieral Litigation Section
^-^^^
,/^^
suBjEoj]: Associated Milk Producers Incorporated
Your August 17 buckslip asks for my comments on the .
conduct of AMPI -- how clearly illegal it is and what I think
about proceeding criminally.
AMPI is said to require some of its customers to purchase
from it exclusively; that is, it tells customers that it will
not sell any milk to them unless they buy all their milk from'
it. (It is also said to have arrangements v;hereby a person
who does not buy exclusively from it can still buy but at a
higher price; the legality of this practice is not clear since
I don't Vmow what justification they claim for this practice.)
AMPl's coercing people into dealing with it exclusively is
clearly a violation of Section 2 of the Sherman Act. The best
precedent is Lorain Journal, (342 U.S. 143), The defendant
there had a "substantial monopoly" of the advertising business
in and around Lorain and refused to sell advertising space to
people who bought advertising time on the local radio station.
This conduct vjas characterized by the District Court as "bold,
relentless and predatory commercial behavior." This language
V7as quoted with approval by the Supreme Court. ,
Another case dealing with coerced exclusive dealing is
Columbia River Packers Association v. Hinton, 34 F. Supp. 970
~(D. Oregon 1939). "The exclusive buying clause in the union's
contract, which forbids plaintiff from buying fish from others
than members of the defendant union, and the clauses in the
Union's constitution and by-laws which forbid union membei'S
from selling to plaintiff and to others not contracting with
the union on the exclusive terms demanded, are, in my view,
in restraint of trade and void."
^<?-, /j?f.. /(^L
8021
... - . .> ■».■■,"■■ • - ■- .
An early Maryland and Virginia milk case (193 F.2d 907)
also considered the question or what was called sL "full
supply" contract -- which amounted to exclusive dealing. The
cooperative and seven of its customers had been indicted and
charged \-n.th. conspiring to restrain trade. The District Court
convicted the cooperative and two of the customers, but the
Circuit Court reversed the convictions. The two customers
accounted for 13,8% of the milk sales in the area. The Circuit
Court simply found that these contracts were not "made for the
purpose of eliminating and suppressing competition," 193 F.2d
at 915. The facts in that case differ from the facts here
(and those in Lorain Journal) in that the cooperative was not
charged mth coercing or pressuring customers into' dealing with
it exclusively,
AMPI is also said to have threatened to refuse to sell to
customers doing business in an area where AI»IPI has a monopoly,
if the same customers didn't deal with it exclusively in an area
where AMPI had competition. This is a variation on the first
practice and is also a clear violation of Section 2 of the
Sherman Act, The best precedent I know of is Griffith,
(334 U.S, 100), "A man with a monopoly of theatres in any one
tovm commands the entrance for all films into that area. If
he uses that strategic position to acquire exclusive privileges
in a city where he has competitors, he is employing his '
monopoly poxver as a trade weapon against his competitors . . : ,
Though he makes no threat to withhold the business of his
closed or monopoly towns unless the distributors give him the
exclusive film rights in the towns where he has competitors, the
effect is likely to be the same where the two are: joined ....
It Is in either case a misuse of monopoly power under the
Sherman Act." 334 U.S. at 107-08.
i
The practice of AMPI of manipulating the blend mix in a
market so that its members could sell at a profit while
non-members operated at a loss is harder to assess. The fact
that it is not a sale below AMPI's cost could make proof that
it has been done with the necessary "intent" somewhat difficult,
I
I suppose that AMPI would have some explanation why it is
competitive for it to dp this. But assuming we could prove that
AMPI did this just to eliminate some competitors, then I think it
would be a Section 2 violation (and maybe 15 U,S,C, §13a as
well). * /
* / The Mary land-Virginia case cited above also dealt v;ith a
"classified use" method of pricing milk. Under a provision in
the "full supply" contraqts the buyer paid the cooperative for
the milk at a prjtee which varied depending on how the milk v;as
used. While I don't think the court's holding that this method
of pricing in that case was not objectionable^s-n?^ l,s relevant to
our consideration of AMPI's manipulation of the blend mix in
Oklahoma- I think that the Chicago office should be aware of
this opinion,-- '"•,
8022
Since the facts available to us show that AMPI is engaged
in conspicuously predatory behavior, I would not hesitate to
investigate further by use of a grand jury. Granted, the cases
I cited (except for Maryland- Virginia) V7ere not criminal
prosecutions -- but they could have been. If the grand jury
investigation were to convince us that AltPI is not acting as
badly as we think it is, or that it was undertaking these
practices with the bona fide belief that they were not illegal,
we could then decide that a criminal prosecution would not be
appropriate. But on the facts available to us nox* I think that
a grand jury would be justified, t
3
I am attaching to this memorandum some correspondence we
have had with Mr, Oberweis. Obviously, this should be handled
by the Chicago office. 'I am also attaching a copy of a
memorandum recording a conversation I had with Mr. Colvert of
Colvert Dairy last year. Mr. Colvert never complied with my
request to put in writing the details of his complaint.
Attachments
8023
EXHIBIT
DEPARTMENT OF JUSTICE
ROirNG SUP
I 1 SIGNATURE
I 1 APPROVAL
I I SEE ME
I 1 RECOMMENDATION
□
I I COMMENT
Q NECESSARY ACTION
I i NOTE AND RETURN
I I CALL NB
—.e^-'D III ..
i 1 per conversation
i ) as requested
□ note and file
□ youk rarosuATioM
ANStTER OR ACKNOWl.*
EDGE ON OR BEFORE
□ PREPARE REPLY FOR
THE SIGNATURE OF
^a -/i^' /C C
REMARKS /^l /TUJ^^
'Si
4. C^.^-y.^j>CC V"* t-^i^v^<^<-<^'~^ '^
from:
:;/7^y
BUILDING a ROOM
8024
EXHIBIT 6
(Rov. ( S6)
DEPARTMENT OF JUSTICE ' •
ROUTING SUP
to:
V /'^/? /-rr^J-^.
I 1 SIGNATURE
I 1 AI'PROVAL
I 1 SEE ME
I 1 neCOWMEMDATION
□
I 1 COMtJENT
I 1 MECESSAHY ACTION
I 1 NOTE AND RSTUnH
□ CALL ME
i 1 per conversation
i i as requested
□ mote and file
□ yOUJJ DirOHMATION
AMSWER OR ACKNOWL-
EDGE ON OR DEFOf^E _
I 1 PREPARE REPLY FOR
I ' THE SIGNATURE OF
from:
A,., --i:
BUILDING A ROOM
'/V/-
8025
EXHIBIT 7
Torra Ho. AT-lo
{Rev. 11.20-6'
DEPARTMENT OF JUSTICE ■"•
ROUTING SUP
TO I NAME
division
BUILDING
ROOM
Attorney General
2-
'• '\\^^
t. '
□ signature □comment □ per conversation
□ aPPHOVAL □NECEiSARY action □ AS REQUESTED
□ SEE ME □ NOTE AHD RETURN □hOTE AMD TILE
□ rECOMHEHDATIC* □cALLMI □yOUI DirOSMATIOH
1 .ANSWER OR ACKNO»L-
L-l ECXSE ON OR BEFORE (^ 0 - 1 "l Q - 1 fi Pi
, , PREPARE REPLY FOR , „ ^ /r m •; 1 U Tiy-r^-i^tr-
□ the SIGNATURE or Assn of Milk ProGur
2S ,Inc.
REklARKS
Proposed Grand Jury - Associated Milk et<
Recognizing that we probably will get
plenty of flack on this, I still think that
the predatory and coercive activities v\'hich
AMPI allegedly has engaged in requires us
to move. I have talked to Dick Lyng at
Agric, and he has no objection. In fact,
not for quotation, he pretty well confirms
that AMPI has some very rough characters
and there is fire under the smoke.
RMcL
9/9/71
FRO^A : »**««
BUIUON*. ROOM. KXT.
OATK
ASSISTANT ATTORNEY GENERAL
Anfltrutt DIvItlon
i
1
30-337 O - 74 - pt. 17 - 32
8026
•j Wa cUa lilJe'-e:
^epartntcnt of ^Justtcc
Pasljmgton, ^.(iL 20530
Octobar 29, 157
SUPPLSl'iBiiTAL i'SIIORAITDUIi 'iX) TK3 ATTOPiiSY GL"im
Proposed Grand Jury - Associated liilk ?roc1ucers, et al.
IJith further reference to the above subject (copy of
prior raemorancluiA attached) , v/a continue to receive pleas
ior action from s;:iaH co-ops, processors and state authorir
ties. I aia told th.at counsel for J.ssociated ;!ilk Producers
publicly states that ;yiP is exeupt from the antitrust laws,
and ?dlp continues to drive smaller competitors to the v/all
by use of tactics rer.iniscent of the "robber barons" of a
century ago.
In particular, it is said that AIIP is selli'ng belov/
cost to customers in areas served by corapeting co-ops,
V/hile at the sai.ie tirne offering hic;her prices td the other
co-ops' producers; it is encaging in full line forcing (if
you v;ant any milk at all, buy fro;?, us exclusively) , and so
on, thus forcing competing co-ops and sr-aller processors
and distributors to sell out to r-LI?.
Tliree large co-ops (o£ which i^!? is one), \ie are told,
now handle C0% or 90% of the nilk produced betv/een the
Alleghenies and the Rockies. These co-ops are tlie result
of sorae 25 co-op rr.ergers in the last fev; years, and -w-e under-
stand that tlie three big co-ops thenselves are nov/ taUcing
laerqer . ' I do hot "thin!i~v73 "can "stop this, if true, under
Section 7 of tlie Clayton Act — anticompetitive as it \/ould
be. ITliat \ie can do is to bring proceedings under Sections
1 or 2 of tlie Sherman r^ct if the above-outlined allegations
of predatory practices are true. i
For these additional reasons, I urge that you authorize
the requested gr^nd jury investigation in^the I'orthern
District of Oklahoma.
in^the I'orthern
^■''^''JmV tyPtjllh%f*-.\\A\jlM^>S^Qf RIC;i;.nD -.7. llcl^^-
^Wb,!.. ' 'f>K J^ A- k^A- Ticdistant Attorney General
U 'jXtUlli ^t^lUh tlJ a-tir«. ^ 7aititrust Division
Approved!
^.-/ 3 7-/1
■sy ^ ■■■
8027
Cbrres. Unit
Mr. Rashid
Chicago
Office.
Mr. McLaren
Bhrono
0^
RJFavrett6:dml
Kovember 10, 1971
File: 60-139-166
Richard W. McLaren.
Assistant Attorney General
Antiti'ust Division
Robert B. Ilvmsnel
Deputy Director of Operations
Associated Milk Producers, Inc.
Mr. Favretto and I met on Friday, Kovenber 5, with
Everett Hutchinson, Thomas McDade, Morris Atlas, and
Gary Gun-7itz, attorneys v/ho are representing four email
Texas dairy cooperatives in treble darriar^o suits against
AMPI. 'Ihay repeated allegations of predatory practices
on the part of A-'?I .si-^iilar to those \;hich \ja have hoard
from other farmer groups and dairies in the course of a
preliminary investigation conducted by our Chicago Office.
Particular emphasis t/as placed upon Al-iPl's manipulation
of a rarketing area's blend price by flooding that narket
v;ith nilk fron other marketing areas. This tactic is
u.ned to lo'.v'er the price to indsTendcnt famcrs in an
effort to force then to join Alii'I. Counsel claims that
AMi^I re.gardo itself as perfectly free to do this under
t\ie marketing orders of the Department of Agriculture;
and has admitted so in papers filed in these private
cases. I stated tliat any specific facts v/hich they
v/ishcd to' bring to our attention should be directed to
our Chicago Office.
After the neeting, I called John Sarbaugh and filled
him in. V7e agreed that in view of the fact that AMPI is
apparently inaking no bones about its policies, wo ought
to think in terms of an immediate civil injunctive case
against AlIPI and not a-zait a determination of our grand
jury request. Sarbaugh' s staff V7ill explore this avenue.
8028
off:ce oi; .
The Attorney GENenXt
EXHIBIT 10
November 30, 1971
MEMORANDUM FOR: DICK MCLAREN
PER OUR CONVERSATION! REQUEST THAT YOU
GO THE CIVIL ROUTE. •
>.
4
i^f'
&(-
HELL
8029
f-em No. AT-'»
(R.v. 11.2IV-
EXHIBIT 11
DEPAR fMEHT OF JUSTICE
ROUTING SLIP
/^^//-/
COPY
to: HAift
DIVJSION
aUILOINS
ROOM
1.
Nr. Rash id
3.
3.
4.
*
□ SIOSATURE □cO««EMT □ PER COHVERS ATIOH
□ approval □hecessary action r~l as requested
□ SEE ME □ NOTE AHD RETURN □HOTEAHDFlLfe
□ R£COU«eH0ATIO« □cALtVt DyOUS OrOXMAIIOH
p-jAMSBER on Ac^MOTi.. proDOsed Milk Case
1 — 1 FCMr OH OR nsFCvsr . "^
p-, PREPARE REPLY FOK ^"-^^"J^ ^j.^j.v_ =
1 1 THE Slr.HATURf OF
REHAnnS
The Atty Genl is willing that we issue
CID's on this matter. I think what more
we need probably can now be obtained by
interviews .
RJlcL ■ 11/30/71
1
from: ►'^-«
Bun-CMS. jeocM. exT.
OAT«
ASSISTANT ATTORNEY GENERAL
Antitrust DUIjIoo
■rsj^kigy "■;mi:ii^::;vr. t^,'^::^
-»^^^..: - ;3g^,<h.--. ^>^^._.j. -_•
»..jn»-j» yiTr^y —
O
o
COPY
MEMORAI^JDUM FOR: DICK McLAREN
PER OUR COMVERSATION I REQUEST THAT YOU
GO THE CIVIL ROUTE.
JOHN N. MITCHELL
8030
Fofra No. AT'la
(Rev. 11-20-63)
EXHIBIT 12
DEPARTMENT OF JUSTICE C"~>Y
ROUTING SLIP
TO J NAME
DIVISION
BUILDING
ROOM
1.
Attorney General
2.
3.
4.
□ signature □comment □per conversation
□ approval □ necessary action I 1 AS REQUESTED
□ see ME □note AND RETURN □nOTE AND FILE
□ recomuemdatiom □callmb □youb nirOKHATIOW
1 — • ANSWER or ACICNOVL-
I—I EDGE ON OR BEFORE Proposed Civjl Casa-Vs. Assoc.
1 — , PREPARE REPLY FOR
I— 'the SIGNATURE OF MilV Producprs , Inn.
REMARKS
In this case we allege that AMPI has (anci
is) engaged in a number of grossly predator;
practices to restrain and monopolize the
milk business. The only reason we don't
ask criminal action is that there is some
indication that they have mistaken legal
advice that they are exempt from the anti-
trust laws.
Independent co-ops are begging for
protection ^against the professional manage-
ment of this juggernaut -- from us and from
Agriculture.
I met with Dick Lyng of Agric. this a.m.
He lias no opposition to our suit and will .
discuss promptly. with Secty. I strongly
urge approval.
i
1
FRO^: •**"*
BUn.CXN«. ROOM. KXT.
OATK
ASSISTANT ATTORNEY GENERAL
Antitrust Division
RMcL
1/18/72
1
1
i
8031
-' EXHIBIT 13
Jp ^u^ /U^ ^>^c4m^
I
\--Li.A^
O
P
_^
6
o
8032
EXHIBIT 14
JESarbau^h: gw
Files ,_ ^ \\. \^\ '. January 24, 1972
File: 60-139-166
Jolm E. Sarbaugh, Chief , . ., , ^^^
Hidwest Office «^c: Mr. Rashni-
Mrs. Scnneioennan
Ilr. Kubik
Hilk - Central U.S. lir. Futterriaii
I called Stuart H. Russell, attorney for Associated Hilk
Prodvicers, telephone (A05) 23G-5991. I told hin tliat va liad
been r.uthorir.od to :':Lla an antitrust ccrv^laint a:^ainst A!n?I,
I also told hjjn that ue bad been autiioritied to ask t\lirl if
it v.'3ntod to erj^ai\^ la p.:c-*iIo no.;otl;.l:iOi-.3 IcoV.in^ tc.'rjrd
a consent decree. I stated that wa could givo A i?I until tha
close of business on I'lurirday to d^cida if it granted to negotiate
If it did '.vc vould have 60 dcys under th2 Division practice to
try to ne;.jotiato a co;->cont decree. If /VI?I did not -w-ant to
nc3c>;i.-:te. I cL'ted 'cl\ct V70 pl'imied to file the. Complaint on
i'Vidc;y» Jiinunry 23, 1572. l' also stated that tha Co-^piaint
^.-as availa'jlc in this office for AIIPI to read and that notes
could bo nado fixn it. I ctatod I couiu not give hiia 3 copy
of the coTdplaint until it fas actually filed.
He stated that he xras confident AliPl would want to
nesotlate; that he \.'ould fjet in touch with flartln Bums, co'jnscl
for A:iPI in ChicaiiO and that Ilartin "urns would be most likely
contactinj this office to see the complaint.
I told hira that the complaint was bein*; typed final and
that it t.-O'xild be finished late ton:orrCT7 noraijis.
I!3rtin Dirrns called and said he vrauld arrange v/ith ihrs,
Schneidcrr^an or llr. Futter^an to read tha ctsiplaint on
January 25, 1972.
8033
EXHIBIT 15
8. 1 Bi
RLFuttenaan :do
Tiie Files r;rv n rd^ 1 ; J^-nun-cy 25, 1972
FileJ 60-139-166
Ronald I., Futtcn,un ^^j jjj.^ Rr.shld>/
Kr3. Schneldenr,sr\
■ ■■ Mr, lOjbik
Milk - Central U.S.
On January 25, 1972, Martin Bums, Chicago .counsel for
AMPI, Cciaa to tha Chicago office and read tho civil coripliaint
\7a intend to file against AliPI.
8034
The Files
James J. Kubik
EXHIBIT 16 .
♦
JJKubik:lsd /
January 27, 1972
File: 60-139-166
cc: Itc, Rashid ^
I'lrs. Schneidennan
Mr. Futtertnaa
Milk - Central U. S.
On January 26, 1972 the v/riter received a telephone call
froa Martin Bums, local counsel for AI-IPI, vtIio indicated that
A:G?I desi-rcs to enter into prc-filin^ negotiations rcrnrdin?
the captioned matter. In answer to his question about the
proposed ccraplainC , I explained to hiia that at no time during
the pre-£iling ne.^otiations would a copy of the ccruplaint be
available for distribution to anyone outside the Antitrust
Division because it is subject to revision at any time prior
to the actual filing, Hcrcver, I stated that a cony of the
corrplaint wjuld be made available for his inspection durins
the negotiations in the Chicago office.
Bums, on behalf of AMPI, requested that a negotiation
conference V7ith the staff be held at the Chicago office at
10:00 AM on January 27, 1972 and this request vag agreed to.
80;]5
EXHIBIT 17
TliG Files
?nl
JJKdbikttsd
January 27, 1972
I
\0\ \ Fir^: 60-139-166
Janss J. Kui^lk u^ ^,^g^ Schneldemiaan
Mr. Futtcrnan
m Ik -Ccnj: r a 1JL._S..
On January 27, 1972, Martin Burns and r.-:-,iin Helnlnsor caiaa
to tliG Chi^a^o OiTfice in order to atflm AUP C 'r. intention to
e.n^o<~e -fn nre-f^ln- n-eot^ntions .-..n1 to di-. -uas the copplaint.
Also'pve.se'nt durin3 this conference were John K. Sarbau^.h, Rebecca
J. Schneidcrrian, Ronald I,. Futtercui, and Jm ■:•;-: J. Kub:.k.
This meeting v7as Helnin^er's iirr.t oppovi-unity to read the
cornolaJ.nt and it vns explained to hv.i that Ivo 'lay niake detailed
notes rp^ordin^ Its contents, but no copy vouLd be available to
hira (or to an^cna else ou!:r,lde tha Division) until the corr.plaxnt
is filed as it is not until then a public ' document and is subject
to revis ion. (
H-in^nser stated that at the present tin- AMPI was oxperiencins
some iTit^a-orsanir^ational difficulttos due to a change in c^-nase-
ment personnel. A person by the p.c-.2 of llorrfn has now boccme .
the chief executive officer of AllP.r. He al30 stated that due to
the "state of flu:-:" that AMPI is uo'.i in, ha vould need sop.3 tine
to discover informtion \;hlch x.'ouM be helpuil to hln regarding
the allegations a::d prayer for reUof in our corr.plaint. It v^as
then mde clear to Helniu-er that t\i3 60 d3y period for pre-filing
negotiation vas th.e m^xijiiura tinia aUov.-ed by the Division and that
no^extension Tvould be grar^ted,*^-*-;^^ -"•-'' ^"^^ .
i
lleininser. Burns, and the staff proceeded to discuss some
of the allegations in the cor.plainc and the difficulties of
d-aftin- a consent decree V7hich both sides could agree to and A.IPI
could live v?ith. nov;ever, Keinin-otr stated tb.at some of tna
relief aslced for r;as not objectionable. It was decided that the
Govenmont and counsel for AMPI wruld each' try to work out proposals
for a consent decree x;hich v7ould become the br^sic for further
pre-filiii3 negotiations.
8036
EXHIBIT 18
IN THE ms'ITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION • •
UNITED STATES OF AMERICA,
Plaintiff,
V. _
ASSOCIATED MILK PRODUCERS, INC.,;
Defendant.
CIVIL ACTION NO.
•Filed:-
Equitable Relief, Sought
The United States of America, plaintiff, by its attorneys,
acting under the direction of the Attorney General of the
United States, brings this, civil action against the above
named defendant and complains and alleges as follov/s:
I . . '
• JURISDICTION AND VENUE
1. This complaint is filed and this action is instituted
against the above named defendant under Section 4 of the A.ct
of Congress of July 2, 1890, c. 647, 26 Stat. 209, as amended
entitled "An Act to protect trade and commerce against unlawful
restraints and monopolies", commonly known as the Sherman Act
(15 U.S.C. §4), in order to prevent and restrain continued
vi'olations by the defendant, as hereinafter alleged, of
Sections 1 and 2 of the Sherman Act.
2. The defendant transacts business and is found within
the V/estern District of Texas, San Antonio Division.
8037
ri
TtlE Dl'FF.NDANT ~* • ' '
3. Associated Milk Producers, Inc. (hereinafter "AIIPI")
is an agricultural cooperative marketing association, as
defined in 7 U.S.C. § 291, incorporated and existing under
the laws of the State of Kansas with its principal office
and place of business at San Antonio, Texas. A>iPI has a
membership of more than 40,000 milk producers located in the
follo\d.ng states, among others; Wisconsin, Minnesota, South
Dakota, Iov;a, Nebraska, Illinois, Indiana, Missouri, Kansas,
Tennessee, Arkansas, Oklahoma, New Mexico and Texas. AMPI
also owns and controls numerous large voLvirae plants that
process and distribvite fluid mi ].k and milk products. AMPI
v.'as formed in the latter part of 1969 as a combination of
and the successor in interest to some 36 or more cooperatives,
including Milk Producers, Inc. and Pure Milk Association.
Any reference to defendant AMPI, unless the context requires
other^d-se, is also a reference to previously existing cor-
porations and entities that have been merged or consolidated
into AMPI.
I
i
im • . ■
CO-CONSPIPxATORS
4. Various corporations and individuals not made de-
fendants herein, including but not limited to milk haulers
and processors, have participated in t\v2 violations alleged
and have performed acts and made statements in furtherance
thereof. •• .
8038
.IV ■
I .
DEFINITIONS ,
5. As used herein:
(a) "Milk" means the raw milk of cows prior to
pasteurization;
(b) "Fluid milk" means pasteurized milk sold
for human consumption in fluid form;
(c) "Milk products" mean products manufactured
from milk such as butter, ice cream, cheese
and pov/dered milk;
(d) "Processor" means a person, partnership or
corporation engaged in the business of
purchasing milk and processing, bottling
and/or packaging fluid milk and milk products;
(e) "Producer" means any person engaged in the
production of milk approved for consumption
. as Grade A milk by any duly constituted
state or municipal health authority;
(f) "Cooperative" means' any marketing association
of producers meeting the requirements of 7
• ^ U.S.C. § 291;
(g) "Plant" means the land, buildings, facilities
and equipment constituting a single operating
unit or establishment in which milk is processe
(h) "Federal milk marketing order" means an order
and applicable rules of practice and procedure
relating thereto, establishing minimum prices
which processors within a defined market area
are i-equired to pay producers, and adopted
8039
pursuant to the provisions of the Agricultural
Marketing Agreement Act of 1937, as amGnded
(7 U.S.C, § 601, et sen.).
V •• •
TRADE AND COMI-IERCE • .
6, Producers may join together in cooperatives to
collectively market and process their milk, and may make
necessary contracts and agreements to effect such purposes.
Producers in at least 14 midwestern states have joined together
to market their milk through At-lPI, Although milk is usually
transported to nearby plants, it can be transported very long
distances. In marketing milk AMPI treats the entire area in
which it has members as one market, and has. on many occasions
sold milk to plants located far from where such railk was
produced. '/VMSI accounts for a substantial majority of the
milk marketed throughout Al-IPl's entire marketing area; AMPI
controls over SO percent of the milk market in many local
markets, as defined by federal milk marketing orders, and
100 percent of the milk marketed in some such local markets.
i '
7. Under the Agricultural Marketing Agreement Act, 7
U.S.C. S 601, et iseq. ("the Act"), the Secretary of the United
States Department of Agriculture is granted inter alia the
pov7er to issue federal milk marketing orders. The purpose
of such orders is to provide for orderly marketing conditions
euch as v;ili v^stablish parity prices fcr farmers, protect ''.he
Interest of the consumer, establish and maintain quality of
products and establish and maintain an orderly f lov; of supply.
These statutory objectives arc sought to be achieved by a
8040
complex economic regulatory schema v/hlch, among other things,
sets miniraura prices that all processors must pay farmers for
prescribed classifications of various milk products meeting
specified quality standards. An order becomes effective if
producers who produce at least two-thirds of the volume of
milk produced for the market favor the order. Cooperatives
are permitted to vote for their members. There are presently
in effect more than 60 different federal railk marketing orders,
each applicable to a different geographical area. VJhile most
major metropolitan areas in the United States are covered by
federal milk marketing orders, there are many milk producing
areas that are not federally regulated.
8. Federal railk marketing orders establish inarket-wida
producers' pools, as authorized by 7 U.S.C. § 608c (5)(B).
Under this.. re£;;ulatory scheme, administered by a Federal Milk
Market* Administrator (an agent of the Secretary of Agriculture),
processors make pajonent or account for their purchases of milk
to the Adtuinistrator, according to the end use of the milk they
have purchased. Federal milk marketing orders establish a
Class I price for milk used as fluid milk and a lov/er Class II
price for milk manufactured into milk products in each market-
ing area,' Each month the total volume of milk in each of the
two categories used by processors in a market is multiplied by
I
the appropriate coefficient price. These tv70 dollar figures
are totalled and then di.vidcd by the total voliiroa of railk.
t
The resultant "uniform price" for the month represents the
average value of all lailk sold in the market area. The
Administrator pays the "blend price", v;hich is the uniform
price after the addition and subtraction of certain functional
differentials, to each milk prodvicer or association of producers
8041
for sales in that raarket, or verifies^ that such price has
been paid. Thus, except to the extent that the functional
adjustments differ, each milk producer jr the cooperative of
V7hich he is a member receives the same price per unit of milk
sold regardless of the actual- end use of its milk; the producer
or his cooperat5.ve selling to a processor for Class I use
receives no more than a producer selling to a processor for
Class II manufacturing use. The cost of milk to each processor,
hov;ever, is based on actual utilization. A processor who, for
example, has 100 percent Class I utilization will pay or account
to the Adaiinistrator at the Class I price for all its milk even
though only the blend price is paid to the producers pf its milk
or the producers' cooperatives,, -
9, A cooperative collects the r.oney all of its members
are entitled to under federal milk marketing crdors, and caa
detenriine hpx* such money shall be allocated among its members i
AMPI also collects a premium above the federal order pride from
most processors to whom it sells milk. AMPI has established a
"base-excess" plan as a basis for payments to its members in'
certain parts of its marketing area. Under this plan, each
member Is assigned a specified number of pounds as base, and
all milk produced over that amount is excess or surplus milk.
AliPI pays its members approxijp.ately tv/ice as much for base milk
as for surplus milk. To obtain enough base to make milk producin;
profitable, m.any members of AliPI must buy another member's base,
or produce excess for a period of years. In either case a
substantial iavestmei\t is required of AMPI members for thera to
operate profitably. Under the membership obligations of AMPI
such investment: is forfeited if a member sells milk in conTpetl-
tion with AMPI for a period of five years after he terminates
his meiobership in AlfPI.
30-337 O - 74 - pt. 17 - 33
8042
10, Federal milk raarko.ting orders differ as to \7hat
inilk is considered to be part of the inilk used in a given
market area. However, the provisions of some marketing
orders permit cooperatives to report Class II milk as having
been used in a given market area v/hen, in fact, it has not
been. This practice is called "loading the pool". The effect
of loading the pool may be to drive the uniform and blend
prices significantly dovmward. Members of AllPl may be insulated
from such econora5.c loss by receiving payments from AMPI out of
funds collected in other market areas,
11, Milk must be transported from dairy farms V7here it
is produced to plants. Most individual producers do ^not produce
stifficient quantities of milk to make it economically feasible
for them to transport their milk themselves. In many areas
independent milk haulers traditionally perform this service.^
Such haulers must transport the milk of enough producers- to
provide them with a minimum volume of milk for a profitable
business. • _
12, Al-lPI is engaged in interstate commerce, and there is
a continuous flov; of milk in interstate commerce. During the
period covered by this complaint, AMPI has sold and shipped
substantial quantities of railk in states other than the states
in which it was produced. Al-IPI also ovms a number of plants
in many states at v/hich it processes milk and from which it
sells and ships fluid milk and milk products across state lines,
VI ■
VIOIATIONS ALLEGED
13, Beginning in or about 1967, the exact date being
unknov;n to. the plaintiff, and continuing up to and including
the date of the filing of this complaint, defendant and the
co-conspirators have engaged in a combination and conspiracy
8043
to unreasonably restrain and monopolize the above described
interstate trade and commerce in violation of Sections 1 and
2 of the Act of Congress of July 2, 1890, as amended (15
U.S.C. §§ 1 and 2), commonly kno^-m as the Sherman Act,
14. Beginning in or about 1967, the exact date being
tinknovm to the plaintiff, and continuing up to and including
the date of the filing of this complaint, defendant has
attempted to monopolize the above described interstate trade
and commerce in violation of Section 2 of the Act of Congress
of July 2, 1890, as amended (15 U.S.C. § 2), commonly known
as the Sherman Act. ' i
15, In furtherance of the aforesaid combinations and
conspiracies, and pursuant to the aforesaid attempt to monopolize,
the defendant and co-conspiratcrs have done the following things,
among others:
(a) Depressed the price competing producer^ of
AMPI could receive for their milk under the
/ \ applicable federal milk marketing order in
various geographic areas, by loading the pool,
v;hile insulating AMPI members from economic
(b) Agreed that processors who purchase milk
i - ■
from Al-IPI will not purchase milk from
I ■ ; ■
competitors of AMPI, or v/ill pay a
substantially higher price for their milk
than their competitors v;ho do not deal
with A>JPl's competitors;
8044
- (c) Agreed that some processors would not sell
^ I
■ f or deliver milk acquired from AWI to other
processors except as directed by AMPI;
. / )• (d) Agreed that haulers who haul milk produced
I by members of AMPI will not haul milk
produced by competitors of AWPI;
(e) Acquired the business and assets of
', processors who processed milk produced by
. competitors of Al-lPI and terminated said
processing;
(f) Acquired the business and assets of haulers
v;ho transported milk produced by competitors
of AMPI and terminated said transporting; and
'•;(s) Compelled producer-members of AMPI to sign
membership agreements which unreasonably .
restrained the right of said members to
withdraw from AMPI and market milk in
competition with AMPI.
16. The violations alleged in this complaint are continuing
and v;ill continue unless the relief hereinafter prayed for is
granted, _ ,
VII
.1 ■ -
EFFECTS
17. The violations alleged in this complaint have had
the following effects, among others: »
i/l
(a) Competition among the defendant and other
producers and cooperatives in the sale of
milk has been restrained and eliminated;
"' \/ I ^^^ Produ
1/
' {/
■ \/
8045
• (b) Sale of milk in the Aipi marketing area
has been monopolized;
ucers have been denied unrestricted •
access to milk haulers;
\/ I (<^) Producers have been denied the unrestricted
' opportunity to sell milk to processors;
(e) Processors and haulers have been deprived
• of the benefit of free and open competition
among producers; and
(f) Consumers and other purchasers have been
deprived of the opportunity to buy fluid
milk and milk products in an unrestric'ted
; •. market and at coinpetitive prices,
■ PRAYER
\7REREF0R5, the plaintiff prays: . '
1, That the Court adjudge and decree that the defendant
, t
Al-IPI has engaged in combinations and conspiracies to un-
reasonably restrain and monopolize, and has unlawfully attempted
to monopolize, the aforesaid trade and commerce in violation
of both Sections 1 and 2 of the Sherman A.ct,
2, That the defendant AMPI, its successors, assignees,
transferees, officers, directors, members, agents and employees
and all persons acting or claiming to act on behalf thereof be
permanently enjoined and restrained from:
(a) Directly or indirectly, continuing,
maintaining or renewing the unlawful
combinations, conspiracies and attempt
to monopolize alleged in this cora-
' . plaint, or from engaging in any. other
10
yj
{/
8046
combination or conspiracy having a similar
purpose or effect, or fx^Dm adopting or
follov/ing any practice, plan, program or
device having a similar purpose or effect;
(b) Refusing to employ independent milk haulers
V7ho transport or are potential transporters
of milk for non-members of AMPI or using
: tlu-eats or coercion or persuasion to induce
independent milk haulers to refuse to haul
milk for non-members of AMPI;
(c) Purchasing or acquiring control of haulers
who transport milk of non-m.embers of AMPI
for the purpose of eliminating such transport-
%
', mg;
(d) Refusing or threatening to refuse to sell*
• milk to or purchase surplus milk from
processors unless said processors agree to
the condition, agreement or understanding
that they will not purchase milk from
Al-lPl's competitors;
•(e) Agreeing with processors that they will not .
sell or deliver milk acquired from AMPI
!
except as directed by AMPI;
(f) Discrim.inating, or threatening to discrimina-e
against .processors who purchase milk produced
by coCTpetitors of AMPI in any way, including
but not limited to, charging said processors
higher prices than AMPI charges, competitors
of said processors;
11
8047
7
V \ (h)
\/
(g) Purchasing, acquiring, 'o^^ming or controlling
plants vjhich have bought milk produced by non-
members of AMPI for the purpose of eliminating
said plants as markets for said producers;
Using threats or coercion to induce producers
to join AMPI;
(i) Compelling producer-members of AMPI to sign
, membership agreements which unreasonably
'restrain the right of said members to with-
" draw from A1>IPI and market their milk in
competition with Al-lPI; and
(j) Loading the pool of marketing areas where
AMPI has competition from independent producers
or producer cooperatives.
3. That the plaintiff shall have such other and further
relief as the Court may deem just and proper, ■ '
4, That the plaintiff recover the costs of this suit.
V
JOHN N. MITCHELL
Attorney General
MbI'CCA J. SCm^l}'IC)£RMAN
RICIiARD W. McL/vREN
Assistant Attorney General
BADDIA J. Ri\SHID
JOHN E. SARBAUGH
Attorneys, Department of Justice
RONALD L. FUTTEiaiAN
JAM-ES J. KUBlK
Attorneys, Department of Justic
Room 2634 United States Courthc
Chicago, Illinois 60604
312 - 353-7565
Fir/i:u7n7~VT'ATHK:ATi:E'2
United States Attorney
8048
EXHIBIT 19
''' >■ ^
l^pHrtmrrtt 0I |u«tire
FOR IMMEDIATE RELEASE ;
MONDAY, FEBRUARY 1, 197 2
The Department of Justice filed a civil antitrust
suit today charging Associated Milk Producers, Inc., one of
the nation's largest dairy marketing cooperatives-, with
monopolizing the sale of milk produced by dairy farmers in
14 states. j '
Attorney General John N. Mitchell said the complaint
v;as filed in the United States District Court in San Antonio,
Texas, where AMPI maintains its headquarters.
The suit charged that AMPI, a cooperative marketing
association with more than 40,000 dairy farmer members, has
combined and conspired with milk haulers and processors to
unreasonably restrain and monopolize the sale of. milk to
processors, in violation of Sections 1 and 2 of the Sherman
Act. !
The suit! also charged that AMPI has attempted to
monopolize the sale of milk to processors in violation of
Section 2 of the Sherman Act.
! :
AMPI has members in the states of Wisconsin,
Minnesota, South Dakota, Iowa, Nebraska, Illinois, Indiana,
Missouri, Kansas, Tennessee, Arkansas, Oklahoma, New Mexico,
and Texas.
8049
-2-
Assistant Attorney General Richard W. McLaren, head
of the Antitrust Division, said that AMPI has acted to restrain
and monopolize milk sales in the 14-state area since 1967 by
a variety of practices designed to eliminate the competition
of independent milk producers. ;
According to the complaint, these practices include:
--Manipulating federal milk marketing orders, after
issuance by the Secretary of Agriculture, for the purpose of
depressing the price of milk received by independent milk
producers in competition with AMPI; r
--Agreeing with milk processors who purchase milk
from AMPI that they will not purchase milk from AMPI's
competitors, or that such processors who do will pay a higher
price for their milk than other processors who do not deal
with AMPI's competitors; ;
--Agreeing with milk processors that they will not
i
sell or deliver milk acquired from AMPI except as directed by
AMPI; I , .
--Agreeing with milk haulers who haul AMPI milk that
they will not haul milk produced by AMPI's competitors;
--Acquiring milk haulers and processors who deal with
AMPI's competitors, and terminating such dealings; and
--Unreasonably restricting the right of dairy farmer
members to freely withdraw from AMPI and market milk in
competition with AMPI.
8050
The complaint charged that, as a result o£ these
practices, competition among AMPI and other milk producers or'
dairy marketing cooperatives has been eliminated; that milk
producers have been denied unrestricted access to milk haulers
and processors; and that consumers have been deprived of the
opportunity to buy processed milk and milk products at compe-
titive prices.
The suit asked that AMPI be prohibited from continuing
the practices cited in the complaint, and also asked that AMPI
be enjoined from using threats or coercion to induce dairy
farmers to join AMPI or to induce independent milk haulers and
processors to refuse to haul or process milk for non-members
of AMPI.
AMPI is an agricultural marketing association organ-
ized pursuant to the Capper-Volstead Act for the purpose of
marketing the milk of its dairy farmer members. AMPI was
formed as the successor to about 36 dairy marketing cooperatives
which were merged in 1969.
8051
EXHIBIT 20
■\ .
i (COVER MEMORANDUM)
v..
^/^/y^
Copy was not sent to Files.
/v9
!
\
V
f
1
8052
Files ^ ^ .
Mr^Kauper, TEK : pm
MfT~WrTson6 0 - 1 3 9 - 1 6 6
Mr. Saylrr
Mr. Burke , . -
JUL 2 5 1973
r
ME.MORANDUM FOR TI?F. ATTORNEY GENt:RAL
Re: Political Contributions and Filing of Case
against Associated Milk Producors, Inc.
Attached is a nemorandum, setting forth the material
in the front office files concerning the filing, in February,
1572, of our case against Associated Milk Froduccrs, Inc.
Our files in this matter are dispersed, since the case is
being tried by our Chicago field office. I a"i ir.forrr.ed,
however, based on searches covering the period up to filing,
- that the front office file is conplete.
There is nothing in our files that suggests that the
case was filed because AMPI declined to make political con-
tributions, although obviously ve cannot attest to v-hat
Mr. Kalmbach nay have said. fCor vould our files reveal any
' contacts that might have been made with Attorney General
Mitchell.
AI'IPI has long protested that the case was filed in an
unusual way. There was no grand jury, and no use of civil
investigative demands. The case was brought solely on the
basis of interviews, which is hardly unusual. The complaint
v/as originally scheclulcd for pre-filing negotiations —
i.e., AflPI was to be given 60 days to negotiate a decree
prior to filing. That process was started on January 24,
1972, and AIIPI counsel examined the proposed complaint on
January 25, 1972.
Thereafter, I am told by Chicago Office staff that
they advised Dick V-cLarcn thatiAJnPI's counsel was seeking to
delay, having made open references to the fact that Pick
McLaren was leaving and that Attorney General r'itcliell
might also be leaving. The suggestion apparently \;as that
if /u'IPI delayed long enough, they would get n mora s^T-ipa-
thetic ear. Dick McLaren then advised the staff to pre-
pare a final decree, and to file within twenty- four hours,
if the decree was not accepted. It was not, and the com-
plaint was filed on February 1, 1972. This, I believe, was
McLaren's last day in office. The facts in this paragraph
do not appear in any documents I have been able to locate,
but come orally from staff personnel. It must be conceded
that this v/as soraev/hat unusual. McLaren, I suspect, feared
there might be pressure not to file.
THOMAS E, K^UPER
Assistant Attorney General,
Antitrust Division
8053
AFFIDAVIT
Zittle, John of San Antonio, Texas, personally known
to me, personally appeared before me and upon being duly sworn
did state as follows:
He is employed by Southwestern Bell Telephone Company
and is manager of telephone account number 512+824-2478; and
that during the period January 1, 1972 through April 30, 1972,
telephone number 512+824-2478 was listed in the name of
Dr. Geo. L. Mehren at 406 Country Lane, San Antonio, Texas, and
the service furnished at such address was residence telephone
service.
>J^n Z:^le
Manager Unit I
Central District
Southwestern Bell Telephone Company
San Antonio, Texas
STATE OF TEXAS X
COUNTY OF BEXAR X
Subscribed and sworn to before me the ^ ^ day of
• r^jjJA^^.'i^ / 1974.
,<
^g^g!^^
Notary Public
BETTY JO GIMBEL
Notaiy Public, Bexar County, Texas
8055
ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD
December 19, 1969
Milk Producers, Inc.
1019 N. W. Military Drive
San Antonio, Texas
Attn: Harold Nelson
TO SHARON, PIERSON AND SEMMES
For legal retainer for the month of December 1969. ... $ 2,000.00
For additional legal services In connection with the
legislative and administrative program of the dairy In-
dustry Including legal research on parity decisions,
marketing orders, and marketing agreements; preparation
of memorandum on need for establishment of milk support
prices at 90% of parity; meetings with Federal officials;
attendance at MPI meetings; telephone calls and
correspondence $8 .500.00
Disbursements (local transportation, miscellaneous
expenses 16.21
TOTAL $10.516.21
8056
■i\^
., fV» /.<,■ :- r". ;' Of T-t <> C», M.O.
.1 A". ; 'i C:' u' CV:
- V.-. '.:(-.;. i^.'wf J. o.c.
JAf:i:7 73 GIZ 96 0 1
8057
.X:.
;>,.
/L>«f6osoocioo»-
30-337 O - 74 - pt, 17 - 34
ASSISTANT MAJORITY WHtP
COMMITTEE ON ARMED
SERVICES
COMMITTEE ON INTERIOR ANO
INSULAR AFFAIRS
8058
Congresfs! of tije Winitth ^tatesf
^ou6t of ^Elepresientattbed
iQafdiington, S.C. 20515
June 22, 19 74
Honorable Sam Ervin
Senate Office Building
Washington, D. C.
Dear Senator Ervin:
Some months ago, members of your committee staff talked to me
informally concerning the time I was retained by Associated Milk
Producers, Inc. Since I did not meet with the Committee itself,
I wanted to take this opportunity to outline some of the pertinent
points.
I was hired by MPI's General Manager Harold Nelson on January 24,
1969, on an annual retainer of $40,000. This retainer arrangement
was in the standard professional form, that is, it was understood
I would bill for expenses and work performed over the basic
retainer. The expenses billed for included mostly travel and long
distance telephoning for AMPI. I paid my staff and office expenses
out of my fees earned. My Tulsa attorney, who is handling my legal
claims against AMPI for compensation due and owing to me for 1971
and 1972, spoke with Nelson who confirmed this retainer agreement.
My first responsibility was to disband all previous publications
of the cooperative and to create one monthly magazine for the entire
cooperative. In addition to having sole responsibility for the
monthly magazine, which included editing, writing, soliciting and
billing for outside advertising, lay-out, printing and mailing, I
coordinated regional public relations activities which included
releases, speeches, setting up meetings, and initiating certain
promotional activities. I also was responsible for legal opinions
on communications matters.
I kept accurate accounts of time and expenses devoted to AMPI work,
except for certain months in late 19 70 when I was engaged in a
political race. According to these records, I spent an average of
more than 70 hours per month during my three years on retainer.
On three occasions in 1969, 1970 and 1971, I was asked by Bob Lilly
to contribute to the cooperative's political fund, TAPE. This was
not unexpected since I had been making speeches and writing articles
urging farmers to participate in the political process and contri-
bute. I made contributions in 1969 and 1970 and declined to contri-
bute in 19 71.
8059
Page Two ;
In December, 1969, and May, 1970, I made contributions of $5,000.
The checks were made to Bob Lilly because that is what he requested.
I do not know why Lilly requested that it be payable to him, but I
had no reason to question his motive or intent at that time or at
anytime I was retained by AMPI, because I knew him as the person
in charge of the TAPE program.
It was my understanding that my contributions would be used to
purchase tickets to Democratic dinners. As a former official in
a Democratic Administration, I expected to be asked to support my
Party . My wife and I attended several Democratic f undraising
dinners including dinners in Washington in 1969, 19 70 and 1971
with tickets purchased by TAPE. In each instance after being
asked by my Party to buy tickets, I forwarded the request to Bob
Lilly who sent a TAPE check along with a receipt for me to have
signed and returned. I showed your staff some of these receipts.
These actions reinforced my belief that my contributions were
being used for proper purposes.
The first time I suspected that my contributions might have been
used for improper purposes was early this year after I talked to
staff members of your Committee.
My contributions to TAPE were made from my own funds which I had
earned or which were reasonably expected to be owing to me. For
example, in December, 1969, when Lilly first made a request for a
contribution, I did not have the funds in the bank. Figuring my
hours worked for AMPI at my regular rate, I found that I had
exceeded my basic retainer of $40,0 00 by $6,69 0 as of December 19
and I estimated that I would work four hours in Tulsa for AMPI for
the remainder of 19 69. Therefore, I submitted an excess billing
of $6,890 for 1969. In fact, my estimate was low as I worked nine,
instead of four, additional hours during the rest of that year.
In April, 19 70, when Lilly asked for a second contribution, I again
did not have sufficient funds on hand. I submitted a special
billing projecting what my time in excess of basic retainer would
be for that year. This was figured as follows: since my time spent
on AMPI work for the first three months of 1970 was the same or
greater than 1969, I rounded off my 1969 excess billing to $6,900
and added the $250 which I had not billed for in 1969. This was
a reasonable basis for calculation because the nature of my work
was predictable requiring approximately the same amount of hours
each month. Thus explains the special billing of $7,150 in 1970.
8060
Page Three:
My time sheets corroborate the computation for billings in both
1969 and 19 70. My time sheets for 19 71 substantiate that my
work for AMPI exceeded my basic retainer by several thousand
dollars. These time records have been given to your staff.
If there is any further information which I may provide to be
helpful to you and the Committee, please let me know.
Sincerely Yours,
*^James k. Jones
8061
LAW OFFICES
Kennelly. Blum and Wall
Federal Bab Building West
1810 H Street, northwest
Washington, d. C. 20006
(202) 293-2130
BOSTON OFFICE
THOMAS A KENNELLY 739 BOYLSTON AVENUE
DAVID E BLUM BOSTON. MASS 021I6
JOHN WALL March 27, 1974 I6I7I 267-4091
Mr. David M. Dorsen
Assistant Chief Counsel
United States Senate
Select Committee on Presidential
Campaign Activities
Washington, D. C. 20510
Dear Mr. Dorsen:
This is in reply to your letter of March 19, 1974, in which you
seek clarification concerning Congressman Jones' billings to AMPI
on December 19, 1969, and April 9, 1970.
The December 19, 1969 billing of $6890 represents the exact
amount of Mr. Jones' fees in excess of $40, 000 for the year 1969 through
December 20.
The April 9, 1970 billing represents Mr. Jones' projection at
that time of anticipated 1970 fees in excess of $40, 000, based upon his
1969 experience.
The retainer agreement between Mr. Jones and Mr. Harold Nelson,
General Manager of AMPI, (an oral agreement entered into in late January
1969), was that Jones would become the editor of Dairymen Digest, a
monthly magazine published by AMPI. In addition, Jones would perform
legal services as requested by AMPI. At that time, AMPI was still known
as MPI, and was emerging from a consolidation of 14 dairy cooperatives
in eight states. Dairymen Digest was a new periodical combining various
publications into one. The first issue appeared in April 1969.
8062
Inasmuch as Mr. Jones was a practicing lawyer in Tulsa, it was
agreed that he would receive a retainer from AMPI in the amount of
$40, 000 per annum. He would bill his time spent on AMPI matters at
his usual rate of $50 for hours in Tulsa and $70 for hours away from
Tulsa.
As is common with retainer arrangements, it was agreed that if
Mr. Jones performed services in excess of the value of $40, 000, he would
be paid for such services at his regular hourly rate.
In 1969, Mr. Jones recorded all hours spent on AMPI matters on
the time sheets which have been provided to you.
As Congressman Jones has previously related to you, sometime in
December 1969 he was approached by Mr. Bob A. Lilly for a $5000
contribution to TAPE. Mr. Jones readily agreed because he believed
strongly in the aims aind objectives of TAPE.
Not having $5000 on hand at the time, he determined from his time
sheets that as of December 19 the amount of services rendered by him
for the year totalled $46, 690. He then figured an additional four hours
would be spent on December 20, the day on which Dairymen Digest went
to press. Adding $200 (4 hours at $50 per hour) to the prior figure of
$46, 690, he arrived at a total of $46, 890. Accordingly, he billed AMPI
for $6890, and from this amount he made his contribution by check in
the amount of $5000 on December 19. (As it turned out, he actually worked
six hours on December 20).
In April 1970 Mr. Lilly again requested a contribution from Mr. Jones
in the anaount of $5000. It was Mr. Jones' understanding that Mr. Lilly
wanted the contribution for the 1970 elections. Mr. Jones again agreed
to contribute $5000. Although only four months had passed since his prior
contribution, he could readily understand that the money was needed prior
to the Spring primaries and he rightfully concluded that this would be the
only request made of him in 1970.
At no time either on this occasion or during the previous December
did Mr. Lilly or anyone else suggest to Mr. Jones that the contributions
solicited were to be used for anything but legitimate TAPE purposes. At
no time was he advised that these moneys were to be used to cover up
for illegal contributions by AMPI or TAPE or for any other illegal purpose.
Nor was it suggested to him that the contributions should be from any
source other than fees due and owing or reasonably anticipated to be due
and owing him for services rendered.
8063
In April 1970 Mr. Jones again did not have $5000 readily available
to him and so he projected his anticipated fees in excess of $40, 000 for
1970 based on his actual overage for 1969. He did this as follows:
Having previously computed his overage through December 20, 1969
at $6890, rounded off to $6900, he noted from his time sheets that he had
rendered five additional hours of service from December 21 through the
end of 1969. 5 hours x $50 = $250. He added the $250 to $6900, arriving
at a total of $7150, which is the amount of the billing he submitted on
April 9, 1970.
An analysis of his time sheets for the first three months of 1970
indicates that his projection was on target at that time. These time sheets
show that through March 31, 1970 he performed services, again computed
at the rates of $50 and $70 per hour, which totalled $12, 060. Using the
first three months as a basis upon which to project work expected to be
performed through the balamce of the year, the projection would be $48, 240
with a resulting overage of $8240. Therefore, since he was devoting at
least as many hours to AMPl matters in 1970 as he had been in 1969, he
had every reason to expect that his overage would be at least equal to if
not greater than that of the prior year.
It is unfortunate, in retrospect, that he did not keep time records
from August to December 1970, when he was busily engaged in his
Congressional campaign. But I suggest that his failure to keep records
in August really is not very material in determining what his intent was
when he submitted his bill four months earlier.
In fact he did do the work even though he did not keep records. He
got the magazine out and has copies to prove it. He attended the monthly
board meetings and has expense receipts to prove it.
He did the work sporadically and at odd hours amd on airplanes and
with the help of others. He conservatively estimates his time spent on
the magazine and in attending board meetings (and not including other
activities for AMPI) between August and December 1970 as follows:
Magazine: 30 hours per mo. x 5 mos. = 150 hrs. x $50 $ 7500.00
Board meetings: 5 meetings x 15 hrs. ea. (includes
travel) = 75 hrs. x $70 5250.00
$ 12750.00
The actual records for the first seven months of 1970, including
travel time per his receipts, show that he earned, at the previously
mentioned rates, more tham $32, 000. Add to this the above unrecorded
$12, 750, and we see that he earned, by conservative estimate, at least
$44, 750, which is quite close to his projected figure in April 1970.
8064
I am also enclosing, to make the account more complete, Mr. Jones'
time sheets for the year 1971. These show that in 1971 his total hours
spent on AMPI business, based on his previously mentioned hourly rates,
are valued in excess of $79, 000. This overage of more than $39. 000.
for which he has still not been compensated by AMPI, far exceeds any
unsubstantiated hours for which he may have been paid in 1970.
I hope this letter will be of some assistance to you in reading
Mr. Jones' AMPI expense records for the years in question. If you have
any additional questions, please do not hesitate to call me.
We will be in further contact with you with respect to our views
concerning Congressman Jones' memo of January 18, 1972.
Sincerely,
Thomas A. Kennelly /
TAK/jbk
£!nclosures
8065
December 19, 19 69
Mr. Bob Lilly
Milk Producers, Inc.
1011 North West Military
San Antonio, Texas 78213
STATEMENT OF ACCOUNT
Professional services
and expenses $6,890.00
Approved
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8066
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8069
April 9, 1970
Dear Bob:
Enclosed is the statement we discussed on
the telephone. I believe this is a correct
statement. However if there are any adjust-
ments necessary, we can handle these later.
With best wishes,
ft
Jam/s R. Jones
Mr. Robert Lilly
c/o Associated Milk Producers, Inc.
G.P.M. "Building
Fourth Floor
San Antonio, Texas 78216
8070
April 9, 1970
Mr. Robert Lilly
c/o Associated Milk Producers, Inc.
G.P.M. Building
Fourth Floor
San Antonio, Texas 78216
STATEMENT OF ACCOUNT
For Professional Services rendered
on special projects
$7,150.00
Approved
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8073
FOR IMMEDIATE RELEASE January 8, 197'' V.
Office of the White House Press Secretary
THE WHITE HOUSE
For many months, there have been repeated allegations
that two Presidential actions in 1971 — one relating to
Federal support prices for milk and the other to antitrust
action against the International Telephone and Telegraph
Corporation — were taken either in return for political
contributions or the promise of such contributions. Both •
allegations, given broad circulation, have been repeatedly
denied and are utterly false.
Today the White House is issuing separate papers on
the milk case and the ITT case. They support the President's
previous statements that his actions were totally proper.
With regard to milk supports, as the paper indicates,
the President's action was based upon several factors —
first and foremost, intensive Congressional pressure,
generated in part by the dairy interests;' secondly, the
economic merits of the case itself; and finally, traditional
political considerations relating to the needs of the farm
States. The economic consequences of that milk decision
show it to have been in the national Interest.
With regard to the ITT antitrust cases, the President's
only actions in the matter came In April of 1971. The
President was not aware at that time of any pledge by ITT
to make a contribution toward expenses of the Republican
National Convention, nor, in fact, had such a pledge even
been made. The ultimate resolution of the ITT matter —
requiring ITT to undergo the largest divestiture In antitrust
history — was itself Judged to be reasonable and fair by
two former Solicitors General, Erwln Griswold and Archibald
Cox.
Tapes, papers and other documents relating to the
milk and ITT matters have previously been delivered vol-
untarily by the White House to the Special Prosecutor and
are available to the Grand Jury. The decision to turn over
these materials reflects the President's desire to cooperate
with the Special Prosecutor and his confidence that the Special
Prosecutor and the Grand Jury will respect the confidentiality
of these materials. Consistent with his stated determination
to maintain that confidentiality, these materials are not
being publicly released today. In view of the fact that the
documents and tapes are on file with the Special Prosecutor,
It should be clear that the accounts published today are
consistent with the basic facts contained In those documents
and tapes.
» # » »
30-337 O - 74 - pt. 17 - 35
8074
FOR IMMEDIATE RELEASE JANUARY 8, 1974
Office of the White House Press Secretary
THE WHITE HOUSE
Summary - the Milk Price Decisiog
The Charge
It has been publicly alleged that President Nixon in 1971, in exchange
for a promise of political contributions from the dairy industry, ordered an
increased in the level of Federal support prices for milk. That charge has
been frequently denied and is totally false.
The Facts
On March 12, 1971, the Secretary of Agriculture announced that the
price of milk for the 1971-72 marketing year would be supported by the
Federal Government at approximately 80 percent of parity. His announcement
was made in the face of strong pressure from the dairy industry for a support
level between 85 and 90 percent of parity; the industry, along with its supporters
in the Congress, argued that the 80 percent level would lead to underproduction
and would not represent a fair return on farm investments.
Subsequent to Secretary Hardin's announcement, there was a concerted
effort in the Congress to pass legislation forcing the President to raise price
supports to a minimum of 85 percent of parity. In the House of Representatives,
125 Members introduced or co-sponsored legislation for higher support prices.
In the Senate, 29 Members introduced such legislation. Support for mandatory
legislation came from both sides of the aisle, but was predominantly Democratic.
On March 23, 1971, following a meeting with representatives of the
dairy industry who argued the merits of their case, and then a meeting with key
advisors who agreed that the Congress would likely force his hand the President
decided that the milk support level should be raised to 85 percent of parity for
the coming year. His decision was announced by Secretary Hardin on March 25.
It is fallacious to suggest that the President's decision was influenced by
a promise of political contributions from the dairy industry. The President had
been informed of the dairy industry's intentions to raise funds for the 1972
campaign, but he at jio^time discussed the contributions with the dairy industry
and the subject was not nientioned in his meetings of March 23, 1971. It is also
worth noting that the ultimate contributions by the dairy industry to the Presi-
dent's re-election effort (1) were far less than the industry leaders had hoped
to raise; (2) were far less than the dairy industry gave to other candidates for
the House and Senate, including many prominent Democrats; and (3) represented
less than one percent of the total contributions to President Nixon's re-election
campaign.
HOW THE DECISION WAS MADE: The President's action took several factors
into account:
intensive Congressional pressure;
the economic merits of the case itself, as presented by the
industry leaders in the meeting with the President, and as
weighed by the President's advisors;
traditional political considerations relating to the needs of
the farm states.
8075
THE RESULTS; The economic -consequences of the decision have been
beneficial to the entire country. ^ ..
The price of milk to the consumer did not skyrocket, as some
feared. Rather, the price of milk to the consumer in the , -
/ear in question rose at the lowest rate of recent /ears.' It '
also Tos.^ at a rate significantly below the general rate of
inflation* . . ■ -. . -r -.7 .. •-;
The cost to the Government of the milk price support program
did not go up as a result of the President's decision. It
went down.
Government inventories of surplus dairy products did not
expand. In fact, they went down. No massive surplvts was
created. ,
The* level of dairy production was ample to meet the needs of
consumers but was not excessive, and thus did not burden the
Government with special expenditures.
8076
FOR IMMEDIATE RELEASE JANUARY 8, igT*!
Office of the White House Press Secretary
THE WHITE HOUSE
Tlie Hllk Support Price Decision
During the spring of 1971, Secretary of Agriculture
Clifford Hardin announced that certain dairy products would
be supported by the Federal Government at 80. percent of parity
during the 1971-72 marketing season. Subsequently, under
heavy pressure from the Congress to increase supports and
after consultation with his senior advisers, the President
reconsidered and requested the Secretary to raise the price
support level for the coming year to 85 percent of parity.
Because the President also met with dairy leaders during
this same period and because campaign contributions were
given to his re-election effort during 1971, there have been
charges in the media and elsewhere that the President's actions
on price supports were the result of promises from the dairy
industry to contribute to the 1972 Republican Presidential
campaign. These allegations are unsupported by evidence and
are totally false.
I. The Decisions of March. 1971
The decision announced each year by the Secretary of
Agriculture of the price at which the Government will support
milk prices has a significant Impact on the Nation's dairy
farmers. In 1970, Secretary Hardin had announced that for
the marketing year running from April 1, 1970 through March 31>
1971, the Government would support manufacturing milk at
$'<.66 per 100 pounds, or at 85 percent of parity. This
figure represented an increase of 38 cents and an Increase
of 2 percent of the parity rate over the year before (1969-
1970).
As the 1971-72 marketing season approached, the question
within the Government was whether to continue supporting the
milk price at ^M.eS per 100 pounds or to raise the price.
Because a grain shortage and other factors had Increased the
costs of production for dairy farmers, a continuation of the
$'*.66 price meant that the parity rate would actually fall to
approximately 30 percent. To the farmers, a drop in parity
rate would result in a possible loss of Income which in turn
could deter production. The farmers therefore advocated an
Increase in the price support to $5.21 per 100 pounds, or 90
percent of parity; at the very least, they argued, the
Government should raise the price to $4.92 per 100 pounds
and thereby maintain the current parity rate of 85 percent.
At the Department of Agriculture, it was feared that such
price increases might encourage excess production on the
farms, raise the prices of dairy products for consumers, and
ultimately force the Government to purchase the surplus
products.
The dairy Industry, which had become highly organized in
the 196O3, moved to exert maximum, direct pressure on the
Secretary of Agricu],ture in early 1971. In a few weeks, over
13,000 letters from milk producers were received by the
Department of Agriculture.
8077
At the same time, the dairy Industry worked to achieve Its
objectives Indirectly through Members of the Congress who agreed
with industry views. The upper Midwestern affiliate of the
Associated Milk Producers, Inc. (AMPI) estimated that its
members alone sent some 50,000 letters to Congressmen on the
subject of milk supports. Between February 23 and March 12,
1971, some 25 Senators and 65 Congressmen wrote the Secretary
of Agriculture to urge that the $A.66 support price be Increased.
Some twenty Senators and 53 Representatives indicated that they
wanted to see the price raised to a full 90 percent of parity
($5.21 per cwt.). Four Senators and eight Representatives
adopted a more restrained position, asking that the price be
raised to at least 85 percent of parity ($4.92).
Some of the letters openly referred to the fact that spokes-
men for the dairy cooperatives -- AMPI, Dairymen, Inc., or their
affiliates -- had v/rltten or called upon the Congressmen to ask
for support. A number of letters were apparently drafted by
lobbying groups. ;
Many of the Members also took to the floor of the House
and Senate to express their concern:
On March 1, Congressman Robert W. Kastenmeier
(D., Wis.) rose to tell his colleagues: "We need your
assistance in persuading the Administration to raise
dairy price supports to 90 percent of parity . . . ''
(Congressional Record, p. ilSlO). His sentiments were
echoed by Congressman Les Aspln (D,, Wis.).
After March 7, when the Associated Press reported
that Secretary Hardin might raise the support level to
85 percent of parity. Senators Hubert Humphrey (D.,
Minn.), Vance Hartke (D., Ind.), Walter Hondale (D.,
Minn.), and Fred Harris (D., Okla.), as well as
Congressmen Ed Jones (D., Tenn.), Robert McClory
(R., 111.), and Vernon Thomson (R., Wis,), all made
floor speeches in favor of a 90 percent level.
On March 8, Congressman William Steiger (R., Wis.)
entered into the Congressional Record a letter he had
sent to Secretary Hardin calling for 90 percent parity.
On March 9, both Senators Hartke and Humphrey
called again for the 90 percent level.
On March 10, Congressman Jones argued that even
90 percent would not be a "decent return," but "it would
certainly help." Mr. Jones urged the Department of
Agriculture not to "sit idly by and watch our dairy
industry decline into oblivion. Unless dairy price
supports are set at a level high enough to guarantee
90 percent of parity, that is exactly what we are
inviting." (Congressional Record, pp. 5956-57).
Senator Mondale again called for the 90 percent level.
On March 11, Congressman Thomson repeated his call
for a 90 percent decision.
While their colleagues were marshalling support in open
floor speeches, senior. Democratic leaders in the Congress were
expressing their concerns privately to representatives of the
Administration. On February 10, the Chairman of the House Ways
and Means Committee, Wilbur Mills, (D., Ark.), arranged a meeting
8078
in the office of Speaker Carl Albert (D., Okla.) to discuss
the dairy issue. Representatives of the dairy industry had
apparently asked for the meeting to plead their case. In
attendance were Harold Nelson and David Parr from AMPI;
Congressmen Mills, Albert and John Byrnes (R., Wis.); William
Galbraith, head of Congressional liaison for the Department
of Agriculture; and Clark MacGregor, then Counsel to the
President for Congressional Relations.
The Congressional leaders continued to make their viev/s"
known in several private conversations thereafter. According
to He. MacGregor 's records. Congressman Mills urged him on
at least six occasions in late February and early March to
urge the President to raise the support price. Congressman
Hills and Speaker Albert also telephoned the Director of the
Office of Management and Budget, George Shultz, with the same
request. Mr. Shultz sent a memorandum to John Ehrlichnan at •
the White House indicating the substance of the Mills request
for a rise in the support level.
Nevertheless, on March 12, Secretary Hardin announced that
the price support for the coming year would be approximately
80 percent of parity — not 90 percent as the dairy industry
wanted. The Secretary's announcement acknowledged that some
dairymen believed that the support price should be increased.
But, he said, higher support prices might lead to excessive
supplies and large surpluses. Mr. Hardin believed his action
was "in the long-term best Interests of the dairy producers."
Immediately following the Agriculture Department announce-
ment of March 12, 1971, a campaign was initialed on Capitol Hill
by both Democrats and Republicans for mandatory legislation to
increase the parity level to 35 or 90 percent. Thirty separate
bills were introduced in the House of Representatives between
March l6th and March 25th with this specific goal in mind.
One hundred and twenty-five Members of the House of Representa-
tives Introduced or co-sponsored legislation to support the
price of manusfacturing milk at a level of not more than 90
percent nor less than 85 percent. In other words, 85 percent
would be an absolute floor for price supports. Of these
Representatives, 29 were Republicans and 96 were Democrats.
Two Congressmen, one from each side of the aisle, also intro-
duced legislation for a mandatory level of 90 percent of parity.
In the Senate, 28 Senators, led by Democratic Senator
Gaylord Nelson of Wisconsin, Introduced legislation on March 16,
1971, that would have required support levels at a minimum of
85 percent of parity. Of the Nelson bill sponsors, one was a
Republican (Senator Cook of Kentucky) and 27 were Democrats
(Senators Allen, Bayh, Burdick, Bentsen, Cranston, Eastland,
Eagleton, Fulbrlght, Gravel, Hart, Harris, Hollings, Hartke,
Hughes, Inouye, Long, Mondale, McGee, McGovern, Muskie, Moss,
Nelson, Proxralre, Sparkman, Stevenson, Symington, Tunney).
Three days later. Senator Hubert Humphrey sponsored his own
bill seeking higher parity.
Philosophically, the Nixon Adralnlstration had hoped to
gradually move away from Federal policies which provide massive
subsidies to agriculture. These subsidies had initially been
instituted during the Depression years when the Government
undertook a variety of measures to ease the plight of the
farmers and to give them some degree of economic stability
8079
and continuing purchasing power. During the ensuing decades,
when these support policies might have been phased out, they
Instead became political footballs, tossed about In the Congress,
aided and abetted by well-organized farm lobbying groups'.
The dairy support question proved to be no exception. On
March 28, 1971, for Instance, the Minneapolis Tribune quoted an
aide of Senator Gaylord Nelson to the effect that representatives
of AMPI, who were operating out of a three-room hotel suite In
Washington, played a major role In the preparation of the
Senator's bill. According to this account, AMPI also provided
some of. the research material which the Senator used for a
public statment.
With 29 Senators and more than 100 Congressmen actively
spearheading the effort to achieve an Increased parity rate for
the dairy Industry, it thus became increasingly clear that
mandatory legislation would be enacted and, further, that a
Presidential veto of such legislation could well be overridden.
Moreover, if the President were to try to force his will in this
matter (i.e., to push parity down to 80 percent) it could be
politically disastrous in some of the Midwestern States, and,
in the light of known Congressional intentions, would be both
foolish and futile.
A story reported by United Press International on March 2^,
1971 (UPI-55) described the problem in these terms:
"Washington — President Nixon probably will face the
politically risky prospect of vetoing a bill to raise
prices for dairy farmers unless he beats Congress to
the draw by boosting milk supports voluntarily, a top
Democratic farm bloc leader said today.
"Nixon's latest farm bloc headache grows out of the
Administration's decision earlier this month to refuse
any increase in milk price supports for the 1971-72
marketing year which begins April- 1.
"On the heels of the refusal, a igrowlng parade of
legislators in both the House and Senate have intro-
duced bills to require an increase. The list of some
80 House sponsors, including Members of both parties,
is topped by Speaker Carl Albert and Chairman W. R.
Poage, D-Tex., of the House Agriculture Committee.
"•If the Administration doesn't act, I think we can
and will pass the bill,' Poage told UPI in an interview.
"Nixon could veto the measure if he remains adamant
against higher milk supports, Poage said. But this
would bring on a spotlighted confrontation with many
farm Interests, the Texan said."
Some months earlier, Godfrey Sperling, writing in the Christian
Science Monitor on December 1, 1970, had observed that "farmers
and rural communities of America are deeply distressed with the
Nixon Administration . . .", especially "with the paring of
subsidies . . ." Sperling also noted the election results of
November 3, 1970: "Democrats in 11 basically agricultural
districts picked up new Congressmen. At the same time no
Democrats who were incumbents in such farm districts were
defeated. =' Finally Sperling mentioned those Democrats who
8080
did well in farm areas: Senators Joseph Montoya of New Mexico,
Quentin Burdick of North Dakota, Hubert Humphrey of Minnesota,
Stuart Symington of Missouri, Adlai Stevenson of Illinois,
Vance Hartke of Indiana, Gale McGee of Wyoming, Frank Moss of
Utah and William Proxmire of Wisconsin. All but one of these
Senators in 1971 were supporting dairy industry efforts to
obtain higher price supports.
The situation was not dissimilar to one facing President
Lyndon Johnson in 1967 when he was forced to curb dairy im-
ports by a Congress which had introduced legislation as a
prodding action. Mr. Johnson sharply reduced dairy imports
in that year after 58 Senators, led by Senator William
Proxmire (D., Wis,), and 180 Congressmen had introduced a
dairy import control bill. In 196?, as in 1971, the activity
in the Congress had taken place after the dairy lobby had, by
one account, "launched an all-out drive to get Congress" to
pass import controls.
With the pressures from Capitol Hill mounting rapidly.
President Nixon during the afternoon of March 23rd met with
seven of his senior advisers to explore the situation with
regard to milk price supports. This was the President's second
meeting of the day concerning dairy matters. As will be dis-
cussed below, the President and other Administration officials
met that morning with dairy representatives in response to a
long-standing appointment. Meeting with the President that
afternoon were John Connally, then Secretary of the Treasury;
Clifford Hardin, then Secretary of Agriculture: Under Secretary
of Agriculture, J. Phil Campbell: George Shultz, then Director
of the Office of Management and Budget; John D. Ehrllchman,
then Assistant to the President for Domestic Affairs.; John
Whitaker, then Deputy Assistant to the President for Domestic
Affairs; and Donald Rice, then Associate Director of the Office
of Management and Budget. The discussion was frank and wide-
ranging. It Included an appraisal of the support which the
milk price legislation had on Capitol Hill and the fact that
the legislation had the support of two of the most powerful
legislators in the country — Speaker of the House of Repre-
sentatives Carl Albert and the Chairman of the House V/ays and
Means Committee, Wilbur Mills.
The political power of the dairy industry lobby was also
brought to the President's attention in the March 23rd meeting.
Secretary Connally said that their votes would be important in
several Midwestern States and he noted that the industry had
political funds which would be distributed among House and
Senate candidates in the coming election year — although
neither the Secretary nor anyone else discussed possible con-
tributions to the President's campaign. Mr. Connally argued
that the milk industry's case also had merit on strictly
economic grounds, and rising costs for dairy producers were
mentioned.
The President himself concluded that the final decision
came down to the fact that the Congress was going to pass the
higher support legislation, and he could not veto it without
alienating the farmers — an essential part of his political
constituency. It was also believed that by raising the support
level in 1971, similar action in 1972 could be precluded —
thus holding the price line for two years.
The fundamental themes running through this March 23rd
meeting were two: (1) the unique and very heavy pressures
being placed upon the President by the Democratic majority
leadership in the Congress and (2) the political advantages
and disadvantages of making a decision regarding a vital
political constituency.
8081
After the President announced his decision there was
discussion of the great power of the House Democratic leader-
ship (which was then pressing for the milk price support
increase) and how that power might be enlisted in support of
certain of the President's key domestic legislation if the
Administration acknowledged the key role these leaders played
in securing the reversal of Secretary Hardin's March 12 deci-
sion. The meeting concluded with a discussion of the manner
in which the decision v;ould be announced and implemented.
Tv/o days later, on March 25, Secretary Hardin officially
announced the decision to raise the support level to approxi-
mately 85 percent of parity for the 1971-72 marketing season.
Three days after the second price decision, the Minneapolis
Tribune reported that the reversal "was the result of an intensive
lobbying campaign mounted by the Nation's biggest milk-producer.,
cooperatives with the eager — and perhaps crucial — assistance
of dozens of Members of Congress, including many whose recent
election campaigns were financed partially by the dairy industry's
political war chest." Among the lawmakers cited with Senators
Edmund Muskie (D., Me.) and Hubert Humphrey, were Congressman
Carl Albert, and the Chairman of the House Agriculture Committee,
W. R. Poage (D. , Tex. ) .
The response on Capitol Hill demonstrates the political
realities that the President faced.
On March 30, Republican Senator James Pearson of Kansas
told his Senate colleagues that he had Intended to introduce
legislation for the very purpose of raising supports, but
"apparently the Administration has had the benefit of deep
concern expressed by both farm State Congressmen and dairy
farmers ..." Democratic Senator James Allen of Alabama
joined him in a similar expression of views.
On April 1, Democratic Senator George McGovern of South
Dakota, who had actively sought a rise in price supports,
noted that he had joined other Senators in hoping supports
would be set at 85 p^ircent. "This reversal," said Senator
McGovern, "can be considered a victory for those in Congress
who spoke out vigorously on behalf of the dairy farmers."
On April 5, Senator Nelson, who had worked closely with
dairy interests on this matter and had introduced the manda-
tory 85 percent support legislation, S. 1277, said that the
support increase "accomplished by administrative order what
the legislation would have accomplished." He went on to say
that "the decision obviour,ly was the result of S. 1277, which
was co-sponsored by 27 Senators, and a companion measure in
the House which likewise had substantial support . . . The
Secretary of Agriculture responded to the outpouring of
Congressional and farmer concern over the initial decision _
on price supports by adjusting the support level upward ..■.'•
This Congressional pressure was the "gun to our head"
that President Nixon referred to in his November 17, 1973
press conference.
It is also worth noting that in 1972, a year after the
struggle over a legislatively mandated, support level for milk,
the Congress enacted legislation which requires that milk
be supported at a level no lower thari 85 percent in future .
years . ' , ■ .
8082
II . The Dairy Industry Contributions and Lobbylnp; Activities
The discussion In the foregoing section shows that
overwhelming Congressional pressure — and the political
consequences of Ignoring it — was the reason for_ the milk
price support decision reached on March 23rd.' _-_. : • . - •-
The lobbying and contribution activities of. the dairy
industry followed a separate track. Not unexpectedly the
Industry undertook to coyer^ every available base. But there
was no arrangement 9r understanding between the industry and
the President as has been so widely and falsely alleged.
The very nature of the Governmental process — : with decisions
frequently being made within the executive branch on the admlnls- '
tratlon of critical' dairy programs and with dairy legislation
constantly under review in the Congress — encouraged the dairy
farmers to organize and become a. potent political force in
recent years. " There are. now three major dairy cooperatives
in the United States: AMPI," Mid-America Dairies (Mid Am) and
Dairymen, Inc. (DI).-^\ Together these cooperatives have over.
66,000 members and account for about 25 percent of all the
milk produced in the United States.
Th^se dairy organizations not only represent in Washington
the Interests of their members, they also exert Influence through .
the ballot box and through political contributions. Their
activity is not unlike the fundralsing and contributing
activities of a number of special Interest groups such as
the Committee on Political Education (COPE) of the AFL-CIO.
The record shows the following lobbying and contribution
activities by the dairy Industry representatives between 1969
and 1971: - >.
1969-1970 - \ : .:-. ■- ■
President Nixon had' no direct contact with any of the •
members of these dairy organizations until 1970 when AMPI
officials invited him to address their annual convention in
Chicago in September. The President was unable to accept
the invitation, and Secretary Hardin spoke in his place.
Although he could not attend the convention, the
President' — as he. frequently does — placed a courtesy
phone call on September M, 1970 to the General Manager of
AMPI, Mr. Harold Nelson. He also spoke with Secretary Hardin,
who was with Mr. Nelson. During that conversation, the President
Invited the dairy leaders to meet with him in Washington and to
arrange a meeting with a larger delegation of dairy leaders
at a later date.
Accepting the President's invitation, Mr. Nelson and his
special assistant, David Parr, paid a brief courtesy call on
the President on September 9, 1970.
The meeting, which was publicly announced to the press,,
occurred in the Oval Office, and, according to the President's
diary, lasted approximately nine minutes. Most of that time'
was consumed with introductions-, photographs and the distribu-
tion of Presidential souvenirs.
8083
The context .of- the meeting was a greeting during a
Presidential "Open Hour" — a session frequently arranged
for short courtesy calls from diverse groups and Individuals.
During the "Open Hour" of. September 9, the visit from the
AMPI representatives. was fitted. In between the. visits of
25 other people, including "a group. to encourage military
servicemen to exercise tlieir votes, a group of concerned
citizens from the State of South Dakota and a contingent,
of Gold Star Mothers. _ > ^ . ^'^ -ac:
Mr. Parr has stated-'iri a sworn deposition'that it was
essentially a social visit. He and Mr. . Nelson invited the
President to address the next AMPI convention in 1971 and
also expressed a hope that he would meet with other dairy/
industry leaders;- Mr. Parr also remembers that the men
spoke about the economic plight of the dairy farmer.; ; -
Although money wks not discussed in the meeting between
AMPI representatives "and the President in September of 1970,
it is evident that raiding and making political contributions
to both Democrats and RV'publlcans were important , continuous ^
and conspicuous activities of the dairymen during 1970, 1971
and 1972. • ■;
During the late 1960's each of the three major dairy co-"
operatives established a trust fund in order to raise and
distribute moriey to political candidates. AMPI established .
the Trust for Agricultural Political, Education (TAPE), Mid-
America Dairies- established the Agriculture and Dairy
Educational and' Political Trust (ADEPT), and Dairymen, Inc.
created the Trust for Special Agricultural Community
Education (SPACE). .. ^.. .
In August of 1969, an attorney for AMPI delivered to
Mr. Herbert Kalmbach the sum of $100,000. Mr. Kalmbach
deposited the funds in a trustee account he maintained at
the Security Pacific National Bank in Newport Beach,
California. The account contained political contributions
remaining from the I968 election campaign. The President
had no knowledge of this contribution. ..".,. , . -•<
Reports on file with "the Clerk of the' House of Representatives
showed that contributions to Congressional candidates in 1969
and 1970 by TAPE, SPACE, and ADEPT totaled over $500,000. ^ -
The bulk of the money was earmarked for Democ:fatic candidates.
Representatives of the dairy co-ops have indicated in an
Associated Press account of December 17, 1973 that Republican
candidates received approximately $135,000, or less than 30
percent of the funds. /'
Some members of the White House staff knew that the dairymen
were giving financial support to Republican and Democratic
candidates in Senate elections in 1970. . One member of the
staff, Charles W. Colson, asserted in a memorandum to the
President that AMPI had pledged $2 million to the 1972 campaign.
(Whether any such pledge was actually made is unknown, but
the total amount given to the President's 1972 campaign was
$U37,000. As noted below, AMPI's campaign contributions to
other candidates during this period were even more generous.)
That memorandum was attached to a Presidential briefing paper
for the- courtesy meeting between the Presideht and the AMPI
representatives in September of 1970. ■ It was suggested in the
8084
memorandum that the President acknowledge AMPI's support.
No suggestion was made that any commitment whatsoever be
made to do any substantive act. There was also no mention
of the asserted pledge during the meeting.
Another reference to fundralsing was in a letter addressed '•'•
to the. President on December l6, 1970 from Patrick J. Hillings', - -
a former Congressman who had succeeded Mr. Nixon in his '
Congressional seat "after the latter, had been elected to •
the Senate. At that time, Mr. Hillings was a member of a ' ' '
V/ashington, D.C. law firm that i»epresented the dairymen in • - ••"•
the Nation's Capital. In his letter, Mr. Hillings asked for
the Immediate imposition of revised dairy Import quotas in ■' ^
accordance with recommendations recently presented to the ■•
President by the Tariff Commission. President Nixon did not
see the letter. . " ' ' . .].,.: ^
Since the President had already been informed of the
fundralsing efforts by the dairy industry, the only possible. .
relevance of the Hillings letter would lie in what action was'
taken on the Tariff Commission recommendations that Mr^. Hillings
asked the President to accept. • .. .
Th£ fact is; that the action taken by the President on . .
1 m^ort quotas- was less . favorable to the dairy industry than
the steps recommended by the Tariff. Commission. , The • . ..
Commission, a body of impartial experts, had recommended.''. '<:
on economic" grounds and pursuant to statutory requirements
that Imports be .closed off entirely for three dairy products
(ice cream, certain chocolate products, and animal feeds ■
containing milk derivatives) and that much lower import
quotas be set for a, fourth Item, low-fat cheese. Rather
than closing off Imports — an action that would have been
more favorable to the dairy Industry— the President Instead,
reduced the import quotas on each item, permitting all four
goods to continue their competition with American. dairy-
products .
1971 ■ .,• ,. ;;?:... • . ' -
The President next met wi'th dairy representatives at
10:30 a.m. ;on March 23, 1971, in the Cabinet Room of the White
House, included In the meeting were a delegation from the
dairy cooperatives as well as several Administration officials.
Including 0MB Director, George.Shultz; Assistant to the President,
John Ehrlichm^n;. Deputy Assistants to the President, Henry Cashen
and John Whitaker; and Donald. Rice, Associate Director of 0MB.
From the Department of Agriculture were Secretary Hardin; Under •
Secretary Phil Campbell; Assistant Secretaries Clarence Palmby
and Richard Lyng; and Deputy Assistant Secretary William
Galbraith.
Contrary to allegations which have since been made, the
meeting had been scheduled more than three weeks before the
March 12 announcement on price supports by Secretary Hardin.
As noted above, the meeting stemmed from an invitation first
extended on September 4, 1970 when the President spoke by
telephone to Harold Nelson, of AMPI . In January of 1971,
Secretary Hardin recommended to the White House that the
meeting be placed on the President's schedule. Thereafter,
in February, the White House arranged the March meeting.
8085
The President opened the meeting by thanking the dairy
leaders for. the support they had given to Administration . ' ,.
policies and praised them for their activism In pursuing goals ,
which were important to them. The remainder of the meeting .
was taken up with the dairy leaders pleading their case for
higher supports and with other Administration officials,
expressing concerns about overproduction and higher retail
prices. There was no mention whatsoever of campaign contri-
butions. Nor were any conclusions regarding dairy supports
reached at the meeting, as the President pressed the attendees
as to whether or not they could control overproduction. Much
was said by the dairy representatives of the higher costs of
their doing business.
Prior to this meeting, a staff memorandum was prepared
as a briefing paper for the President. That paper briefly
noted that the dairy lobby — like organized labor — had
decided to spend political money and that Pat Hillings and
Murray Chotlner were involved. There was no suggestion that
the President should give special treatment to the dairymen.
In fact, that same paper discussed in much more detail the
pressure which was coming from the Congress for higher supports;
that the Congress was acting at Speaker Albert's instigation;
that the Democratic leadership wanted to embarrass the President;
and that a bill for higher supports would probably be passed,
thus presenting the President with a very tough veto situation.
There were no other discussions between the President
and the dairy industry representatives prior to the President's
decision on the afternoon of March 23, 1971.
There are a number of mistaken notions with regard to' these
lobbying efforts of the dairy Industry. One Is that they had
a substantial Influence upon the President's decisions. That
Is untrue. Another is that the dairy contributions represented
a substantial portion of the total funding of the President's
re-election effort. The truth is that the contributions from
the dairymen amounting to some $427,000, constituted less than
one percent of the total; • " '
It should be further noted that from the perspective
of the dairymen, their contributions to President Nixon's
campaign organizations were not the major focus of their
efforts. According to the Congressional QuaJ?terly of
March 17, 1973, reports publicly filed by the political
arms of the cooperatives show the following total contri-
butions by the political arms of the dairy cooperatives to
all political candidates from April 7, 1972 through
December 31, 1972:
ADEPT
$324,292.58
CTAPE*
906,245.00
PACE
17,650.00
SPACE
254,700.00
TOTAL $1,502,887.58
(*Note: CTAPE became the major distribution,
arm of the Associated Milk Producers during
the 1972 campaign. Its parent, TAPE, trans-
ferred funds to CTAPE, which in turn gave
them to the candidates' organizations.)
8086
The Congressional Quarterly account reports that of the
$1.5 million contributed by the da'irV cooperatives, to political
campaigns after Api-il 7.,^ 1972, 09*5,000 went to support the
candidacy of President^i^ixon.. Thus, after April .7.-, 1972,
President Nixon's campaj'lgi'W received less than one-fifteenth of
the available funds distributed by the dairy trusts. The rest
— more than ^l.'J. million — flowed' into the campaigns of
Senate and Congressional candidates and to primary contestants
in the Democratic Pr,esldential: race.
A great number of the Congressional and Senatorial
candidates to whom. dairy funds were given were also leaders
in the effort to .legislate a mandatory increase in milk
supports in March. of 1971.- [Note: No records are available
to compare the contributions , to President Nixon prior to
April 7, which amounted to. approximately $332,000, with the
contributions given to other candidates prior to April 7.]
Ill . Consequences of President's Decision.
Although the President's decision of March 23rd was based
largely on political realities, unrelated to campaign contri-
butions, it also proved to be . sound economics. Here, in brief,
were the economic results : ....
Milk Production ; One of the continuing concerns of the
Department of Agriculture is to assure that milk supplies are
adequate. but not exqessive. In the mid-1960's, there was a .
downward trend in the production of milk from 126.9 billion
pounds in 1964-65 to 116.5 billion pounds in 1969-70. Supplies
had become sufficiently low by the late 1960's that Secretary
Hardin's decision to raise the milk support level in 1970 was
based in large part upon his desire to increase production.
The support increase of 38 cents per hundredweight for that
year helped to end the decline in production as some 117.4
billion pounds of. milk were produced in the 1970-71 marketing
year. The additional increase in the support price to $4.93 as
a result of the March 25th announcement provided still further
assurances against the resumption of a downward trend in pro-
duction. For the marketing year 1971-1972, the total milk
production was 119.4 billion pounds.
Cost of Milk to the Consumer: The average retail price
per half gallon of milk has been rising steadily since 1965,
as shown by this chart :
1965
47.3*
1966
49.8
1967
51.7
1968
53.7
1969
55.1
1970
...57.4
1971
58.9
1972
59.8
(Yearly average retail price per half gallon
of milk in leading cities of the United States;
U.S. Department of Agriculture)
8087
From the view of the consumer, it can be seen that prices
continued to rise, but that the 1971-72 increase was the.
smallest of all the years shown on the chart — and was con-
siderably less than the rate of general inflation. These
reductions in the rate of milk inflation in 1971 and 1972
are directly related to the President's decision of March 23
because the announcement of March 25 encouraged the production
of milk to a level higher than it otherwise would have been. -
Thus, because supplies increased, market price increases
have been less than they otherwise would have been.
Cost of the Milk Support Program to the Government ;
Net expenditures for the dairy price support program and
related costs (butter, cheese, dried milk and similar
products) were as follows for the recent fiscal years
(Commodity Credit Corporation Net Expenditures):
Fiscal Year 1970 — $ 87-2 million
Fiscal Year 1971 — 214.3 million
Fiscal Year 1972 — 17'».2 million
Fiscal Year 1973 — 116.6 million
As can be seen, the cost during the fiscal year in question —
1972 — was considerably lov/er than the year before. It dropped
again the following year.
Government Inventories of Dairy Products; One of the
concerns of the Secretary of Agriculture is to ensure that
his Department has reasonable supplies of dairy products to
meet the goals of its family feeding and child nutrition
programs. At the same time, the Secretary wants to avoid
excessive production which would tend to overload the
Department's stocks. The aim is thus to achieve a balance
in the Commodity Credit Corporation (CCC) stockpiles. As
of Jsmuary, 1971, there was some concern that the stocks
might fall too low if production of milk were reduced. As
it turned out, the butter, processed cheese and nonfat dry ^
milk stocks in the CCC dipped between a high of 257.9 ;
million pounds to a low of 62.7 million pounds during 1971,
even with increas-^d production of milk, but it is a virtual
certainty they would have been even lower if the decision
had not been made to raise the parity level to 85 percent.
Here are the figures for the CCC's uncommitted inventory as
of January 31 of each year: (in millions of pounds)
Marketing
Year
Butter
124.7
Cheese
• 67.9
Nonfat Dry
Milk
1968
208.4
1969
73.0
23.1
221.1
1970
35.2
■ —
116.5
1971
61.8
6.6
18.7
1972
37.1
1.9
1.4
On the basis of all four of the indices above — m?.lk
production, cost of milk to the consumer, the cost of running
the USDA's milk support program, and the quantity of inven-
tories held by the Commodity Credit Corporation — it would
appear that the March 25th reversal of the milk support
decision in fact proved to have substantial benefits for
all segments of the Nation's economy.
8088
IV. Conclusions
The Information contained In this discussion can be
summarized as follows:
— Immediately after the Agriculture Department first
announced on March 12 that milk would be supported at approxi-
mately 80 percent of parity, pressures developed on Capitol
Hill for mandatory legislation to Increase the parity level
to 85-90 percent. Several of the President's advisers
believed that the legislation would be enacted and that a
Presidential veto of such legislation would be politically
disastrous for Mr. Nixon in several States.
— Except for the fear that a rise in supports would
create problems of overproduction, several advisers believed
the dairymen's case to be meritorious due to the rising costs
of fuel, feed, and labor for those producing dairy products.
In fact, the corn blight of 1970 considerably reduced many
supplies of feed grain for the 1971 marketing year.
— With the Congress putting "a gun to our head" and
with his senior advisers supporting him, the President
decided that the parity level should be Increased to 85
percent.
— Economically, the President's decision to raise the
support level proved to be sound and beneficial for the
Nation.
— \7hile the President had been advised that the dairy-
men had decided to make contributions towards the re-election
effort of 1972, this did not influence the President's
decision to raise the level of supports.
8089
1971 CONGRESSIONAL BILLS ON DAIRY PRICE SUPPORTS
HOUSE OP REPRESENTATIVES
The following bills are substantially Identical to each other;
Date
Introduced
3/16/71
Bill
Number
H.R.6188
3/17/71
3/17/71
3/17/71
Sponsor(3)
Smith (D-Iowa)
Edmondson (D-Okla)
Hungate (D-Mo)
Roush (D-Ind)
Jones (D-Tenn)
Teague (D-Tex).
Steiger (R-Wis)
Burton (D-Calif)
Hamilton (D-Ind)
Griffin (D-Mlss)
Burleson (D-Tex)
Burllson (D-Mo) ?,-
Fraser (D-Mlnn)
Ullman (D-Ore)
Shipley (D-Ill)
Randall (D-Mo)
Price (D-Ill)
Kuykendall (R-Tenn)
H.R. 62*48 Roncallo (D-Wyo)
H.R.62'»9 Smith (D-Iowa)
Poage (D-Tex)
Patman (D-Tex)
Sisk (D-Tex)
Obey (D-Wis)
Sikes (D-Pla)
Steed (D-Okla)
rulver (D-Iowa)
Kyi (R-Iowa)
Ber gland (D-Minn)
Abbitt (D-Va)
Abourezk (D-S.Dak)
Kastenmeier (D-Wis)
Pascell (D-Fla)
Broyhill (R-N.C.)
H.R.6250 Smith (D-Iowa)
Casey (D-Tex)
Hansen (D-Wash)
Shriver (R-Kan)
Pickle (D-Tex)
Pryor (D-Ark)
Blanton (D-Tenn)
Plowers (D-Ala)
Pulton (D-Tenn)
Hammerschmidt (R-Ark)
Wright (D-Tex)
Aspin (D-Wis)
Thone (R-Nebr)
Daniel (D-Va)
Dorn (D-S.C.)
Plsher (D-Tex)
Edwards (D-La)
Purpose
To support the price
of manufacturing
milk at a level not
more than 90^ nor
less than 85!? of the
parity price for the
marketing year 1971-
72, as the Secretary
determines is nec-
essary in order to
assure adequate
supply.
30-337 O - 74 - pt. 17 - 36
8090
Date Bill
Introduced Number
Sponsor (s)
3/17/71
3/18/71
3/18/71
3/18/71
3/23/71
3/23/71
3/23/71
3/23/71
3/23/71
3/23/71
3/23/71
3/23/71
3/23/71
H.R.6289 O'Konskl (R-Wis)
H.R.6'^12 Zwach (R-Minn)
H.R.6'<25 Harvey (R-Mlch)
H.R.6'<i<3 Smith (D-Iowa)
Abernethy (D-Miss)
Stubblefleld (D-Ky)
Purcell (D-Tex)
Matsunaga (D-Hawaii)
Vlgorlto (D-Pa)
Denholm (D-S.Dak)
Martin (R-Nebr)
Roberts (D-Tex)
Halpern (R-N.Y.)
Zablockl (D-Wls)
McPall (D-Calif)
Montgomery (D-Miss)
Johnson (D-Calif)
Schwengel (R-Iowa)
Anderson (D-Tenn)
Watts (D-Ky)
Perkins (D-Ky)
Riegle (R-Mich)
Whitehurst (R-Va)
H.R.653I Hull (D-Mo)
H.R.6553 Natcher (D-Ky)
H,R.6559 Quillen (R-Tenn)
H.R.6619 Gross (R-Iowa)
Scherle (R-Iowa)
King (R-N.Y.)
Hall (R-Mo)
H.R.662I Jones (D-N.C.)
Preyer (D-N,C.)
Henderson (D-N.C.)
Taylor (D-N.C.)
Lennon (D-N.C.)
H.R.6632 Long (D-La)
H.R.6635 McMillan (D-S.C)
H.R.66'«7 Sebelius (R-Kan)
H.R.665O Stratton (D-N.Y.)
Purpose
To support the price
of manufacturing
milk at a level not
more than 90;{ nor
less than 85!C of the
parity price for the
marketing year 1971-
72, as the Secretary
determines is nec-
essary in order to
assure adequate
supply .
8091
Date Bill
Introduced Number
Sponsor(3)
3/23/71
3/2V71
3/2V71
3/2V71
3/2'»/71
3/2V71
3/25/71
3/25/71
3/25/71
H.R.6657 Young (D-Tex)
H.R.6683 Evans (D-Colo)
Asplnall (D-Colo)
H.R.6691 Hastings (R-N.Y.)
H.R.67OI Landrum (D-Ga)
Stephens (D-Ga)
Brlnkley (D-Ga)
Stuckey (D-Ga)
Thompson (R-Ga)
Mathis (D-Ga)
H.R.6712 Thompson (D-N.J.)
H.R.6727 Nichols (D-Ala)
H.R.67I6 Andrews (D-Ala)
H.R.6753 Duncan (R-Tenn)
H.R.6785 Pryor (D-Ark)
Bingham (D-N.Y.)
Leggett (D-Callf)
Mahon (D-Tex)
Melcher (D-Mont)
Baker (R-Tenn)
Duncan (R-Tenn)
Myers (R-Ind)
Hlllls (R-Ind)
Hanley (D-N.Y.)
Galifianakls (D-N.
Brasco (D-N.Y.)
Collins (D-Ill)
Alexander (D-Ark)
Kee (D-W.Va)
Gallagher (D-N.J.)
Gonzalez (D-Tex)
Begich (D-Alaska)
Kyros (D-Maine)
C.)
Purpose
To support the price
of manufacturing
milk at a level not
more than 90$ nor
less than 85% of the
parity price for the
marketing year 1971-
72, as the Secretary
determines is nec-
essary in order to
assure adequate
supply.
The following bills are identical:
3/18/71 H.R.6357 Abbltt (D-Va)
To support the price
of milk at 90!« of
the parity price
through purchases
of milk and milk
products.
3/22/71
H.R.6502 Thomson (R-Wis)
8092
SENATE
Date Bill
Introduced Number
3/16/71
S.1277
Sponsor (s)
Nelson (D-Wls)
Mondale (D-Minn)
McGee (D-Wyo)
Hughes (D-Iowa)
Bayh (D-Ind)
Burdlck (D-N.Dak)
Cook (R-Ky)
McGovern (D-S.Dak)
Stevenson (D-Ill)
Eagleton (D-Mo)
Tunney (D-Calif)
Hartke (D-Ind)
Symington (D-Mo)
Cranston (D-Calif)
Gravel (D-Alaska)
Hart (D-Mlch)
Harris (D-Okla)
Muskle (D-Maine)
Moss (D-Utah)
Proxmire (D-Wis)
Allen (D-Ala)
Long (D-La)
Inouye (D-Hawail)
Hollings (D-S.C.)
Fulbrlght (D-Ark)
Sparkman (D-Ala)
Eastland (D-Miss)
Bentsen (D-Tex)
Purpose
To support the price
of manufacturing
milk at a level not
more than 90^ nor
less than 85? of the
parity price for the
marketing year 1971-
72, as the Secretary
determines is nec-
essary in order to
assure adequate
supply.
3/19/71
S.129'» Humphrey (D-Minn)
8093
56
o
15
>
o
.5 o
C ft
ffi
bl
Cl.
8094
LIST OF DOCUMENTS IDENTIFIED IN
SEARCH OF WHITE HOUSE RECORDS ^^CS. .*,
PURSUANT TO SUBPOENAS DUCES TECUM .. " W^
I. Documents as to Which No Claim of Privilege Is Being
Asserted and ^Vhich Have Been or Will Be Provided to
Plaintiffs' Counsel.
1. A memorandum dated February 1, 1972 from a presiden-
tial assistant to another presidential assistant, part of
which relates to political contributions and the subject
lawsuit, '
2. A list of pre-April 7, 1972 campaign contributions to
the Committee to Reelect the President.
3. Card file records which would indicate any meeting or
telephone conversation between the President and any
individuals on Schedule A, attached to the notice of depo-
sition served upon the White House Custodian of Records,
if such individuals had a meeting or conversation with
the President during the period designated in the notice.
4. A copy of a letter dated March 8, 1971 from Clark
MacGregor to Congressman Aspin to which is attached a
copy of a letter dated March 5, 1971 from Congressman
Aspin to Mr. MacGregor.
5. A letter dated March 10, 1971 from Marion Edwyn
Harrison to Charles W. Colson.
6. A letter dated March 11, 1971 from Marion Edwyn
Harrison to Charles W. Colson to which is attached a
routing slip from one presidential assistant to another.
7. A copy of a letter dated March 11, 1971 from Clark
MacGregor to Congressman Griffin to which is attached a
copy of a telegram from Congressman Griffin to
Mr , MacGregor .
8. The relevant portion of a memorandum dated January 18,
1972 from Gordon Strachan to H. R. Halderaan.
\
A TRUE copy \
JAMES f.DAVEY, Clerk,'
8095
9. The relevant portion of a memorandum from Gordon
Strachan to H. R. Haldeman dated February 16, 1972.
10. Portions of Appointment Log of John Ehrlichman which
indicate meetings with any individuals on Schedule A,
attached to the notice of deposition served upon the
White House Custodian of Records, during the period
designated in the notice.
11. Portions of logs of H. R. Haldeman which indicate
meetings or phone conversations with any individuals on
Schedule A, attached to the notice of deposition served
upon the White House Custodian of Records, during the
period designated in the notice. .
12. A memorandum from an official of the Council on
International Economic Policy to an Assistant Director,
0MB, dated February 1, 1973, and a reply memorandum from
an Assistant Director, 0MB, to an official of the Council
on International Economic Policy dated February 9, 1973.
13. A memorandum between personnel within the Office of
Management and Budget dated January 2, 1973.
14. Portions of a memorandum dated June 3, 1971 with two
attachments dated .May 27, 1971 concerning dairy import
Investigations under the Agricultural Adjustment Act of
1933. , ^ ,.,..,
15. A memorandum from the Administrative Assistant to
the Secretary of Agriculture to a presidential assistant
dated March 19, 1971, to which is attached a letter to
the Secretary of Agruculture from Marion Edwyn Harrison,
Esquire, dated March 11, 1971.
16. An undated page from a memorandum between White
House officials which, among other things, has reference
to the dairy price support program.
8096
17. A memorandum from the Under Secretary of Agriculture
to a presidential assistant dated March 31, 1971, to
which is attached a copy of a speech delivered by the
Under Secretary of Agriculture on April 1, 1971.
18. An undated and unsigned memorandum concerning the
1971 dairy price support program to which is attached a
transcript of the television program "Issues and Answers"
dated October 29, 1972.
19. Memorandum for H. R. Haldeman from Gordon Strachan
dated September 28, 1971, to which are attached copies
of newspaper articles described therein,
20. Memorandum for H. R. Haldeman from Charles Colson
dated September 24, 1971, to which are attached a White
House routing slip and a copy of a report of a judicial
opinion.
21. Routing memorandum to H. R. Haldeman from Gordon
Strachan dated November 3, 1971, to which are attached
the titles and relevant pages of a talking paper for the
Attorney General.
22. Memorandum for H. R. Haldeman from Gordon Strachan
dated May 21, 1971, to which are attached seven pages of
handwritten notes.
23. Routing memorandum to Gordon Strachan from Chuck
Colson dated March 17, 1971, to which are attached (a)
memorandum for Larry Higby dated February 2, 1971, (b)
a sheet of paper stating "OHC wants the return of this
file", (c) memorandum for H. R. Haldeman from Charles W.
Colson dated February 8, 1971, (d) memorandum for Chuck
Colson from H. R. Haldeman dated February 2, 1971, and
(e) memorandum for H. R. Haldeman from Charles Colson
dated February 1, 1971.
8097
24. Memorandum for H. R. Haldeman from Gordon Strachan
dated September 24, 1971.
25. Memorandum for H, R. Haldeman from Gordon Strachan
dated September 16, 1971, . ^
26, Copy of picture with mailing label addressed to
Mr, David Parr,
27, Page of news briefing with several titles identified
in left margin) including FARM.
28, Letter to Mr, Charles W, Colson from David L, Parr
dated Septeml^er 10, 1970 with attached speech, ,
29. Page from Hoard's Dairyman dated December 10. 1970.-"
8098
II. Documents as to Which a Claim of Executive Privilege
Is Being Asserted and Which Are Being Turned Over to
the Court for In Camera Inspection for the Purpose of
Determining the Validity of that Claim.
i. A memorandum dated March 3, 1971 between personnel
in the Office of the Council of Economic Advisers.
2. A memorandum dated March 7, 1972 from an official
within the Council of Economic Advisers to the Chairman,
CEA.
3. A memorandum dated February 15, 1973 for the Presi-
dent from the Chairman of the Council of Economic Advis-
ers to which is attached a letter to the President from
the Secretary of Agriculture dated February 14, 1973,
and a memorandum to the Chairman, CEA, from an official
within the CEA dated February 13, 1973.
4. An internal memorandum dated January 18, 1971 con-
cerning the 1971-1972 dairy price support program.
Attached to this memorandum are various charts and
economic information, and an internal Department of
Agriculture memorandum regarding dairy price supports
dated January 7, 1971. Also attached is an internal
memorandum within the Office of Management and Budget
dated March 3, 1971 setting forth various recommenda-
tions and considerations with respect to the 1971-1972
dairy price support program.
5. An undated memorandum from the Assistant Director,
0MB, to the Director, 0MB, to which are attached three
internal 0MB memoranda, dated respectively, March 8,
1972, March 7, 1972, and March 7, 1972.
6. A memorandum between personnel in the Office of
Management and Budget dated November 6, 1972.
8099
7. A memorandum from an official in the Department of
Agriculture to the Assistant Director, OMB, dated Janu-
ary 26, 1973, to which is attached an internal Depart- '
ment of Agriculture analysis which involves the dairy
price support program with particular regard to cheese
import quotas^ ...
8. An undated internal memorandum within the Office of."
Management and Budget concerning the 1973-1974 dairy
price support program to which are attached various
documents, some of which are in draft form, concerning
the dairy price support program,
9. A memorandum dated January 13, 1972 to an Assistant
Director, OMB, from an official within the Office of
Management and Budget, to which various charts and
explanatory material are attached.
10. A memorandum between personnel within the Office of
Management and Budget dated December 20, 1972, to which
is attached a memorandum within the Office of Management
and Budget dated December 20, 1972.
11. Portions of a memorandum dated June 3, 1971 with
two attachments dated May 27, 1971, concerning dairy
import investigations under the Agricultural Adjustment
Act of 1933.
12. A memorandum dated February 2, 1971 between offi- •
cials within the White House Office concerning a pro-
posed meeting by the President with leaders of the dairy
industry.
13. A memorandum dated February 2, 1971 between offi-
cials within the White House Office concerning a pro-
posed meeting by the President with leaders of the dairy
industry. - • >
8100
14. A memorandum dated February 4, 1971 between offi-
cials within the White House Office concerning a pro-
posed meeting by the President with leaders of the dairy
industry.
i
15. A memorandum dated February 16, 1971 between offi-
cials within the White House Office concerning a pro-
posed meeting by the President with leaders of the dairy
industry.
16. An undated document containing notes prepared by a
White House Official concerning a proposed meeting by
the President with leaders of the dairy industry.
17. A memorandum dated February 24, 1971 between offi-
cials within the White House Office concerning a pro-
posed meeting by the President with leaders of the dairy
industry.
18. A memorandum dated March 3, 1971 between officials
within the White House Office to which is attached
another memorandum dated February 24, 1971 between offi-
cials in the White House Office concerning a proposed
meeting by the President with leaders of the dairy
industry. • .
19. A memorandum dated March 4, 1971 from the Assistant
Director, OMB, to the Director, 0MB, and a presidential
assistant and regarding the dairy price support program.
20. A memorandum dated March 5, 1971 from the Assistant
Director, OMB, to the Director, OMB, copies of which
were transmitted to presidential assistants, concerning
the dairy price support program.
21. A memorandum dated March 5, 1971 from officials
within the White House Office. »
22. A memorandum dated March 4, 1971 from the Director,
OMB, to a presidential assistant regarding the dairy
price support program.
8101
23. An undated memorandum between personnel within the
White House Office to which is attached a copy of the
March 4, 1971 memorandum from the Assistant Director,
0MB, to the Director, 0MB, and a presidential assistant.
24. A memorandum from a presidential assistant dated
March 5, 1971 to another presidential assistant and
Director, 0MB, regarding the dairy price support pro-
gram.
25. A memorandum from a presidential assistant to
another presidential assistant and the Director, 0MB,
dated March 5, 1971 regarding dairy price supports. '
26. A memorandum from a presidential assistant to
another presidential assistant dated March 5, 1971
regarding the dairy price support program, to which is
attached a typed restatement of the same memorandum.
27. A memorandum from a presidential assistant to
another presidential assistant and the Director, 0MB,
dated March 5, 1971 to which is attached the March 4,
1971 memorandum.
28. A memorandum from a presidential assistant to the
Director, 0MB, dated March 9, 1971, regarding the dairy
price support program.
29. A memorandum for the President dated March 9, 1971
from the Director, 0MB.
30. A memorandum from a presidential assistant to
another presidential assistant dated March 12, 1971
regarding the dairy price support program.
31. A memorandum from a presidential assistant to
another presidential assistant dated March 18, 1971, to
which is attached a memorandum dated March 16, 1971
from a presidential assistant to another presidential
assistant regarding the dairy price support program.
8102
32, A memorandum dated March 19, 1971 from a presiden-
tial assistant to another presidential assistant regard-
ing the dairy price support program.
33, An undated memorandum notation by a presidential
assistant to which there is attached a memorandum from
the Under Secretary of Agriculture to a presidential
assistant dated March 22, 1971. Also attached is a
memorandum setting forth considerations regarding the
dairy industry.
34, A memonandum for the President from a presidential
assistant dated March 22, 1971. Attached to this memo-
randum are a list of prospective attendees at a presi-
dential meeting with dairy industry leaders, a proposed
statement to be made by the President at such meeting,
and a fact memorandum prepared by the Department of
Agriculture concerning the dairy industry,
35, A memorandum dated March 23, 1971 from a presiden-
tial assistant to another presidential assistant regard-
ing the meeting with dairy industry leaders.
36, A memorandum dated March 23, 1971 from a presiden-
tial assistant to the President's file concerning the
President's meeting with dairy industry leaders.
37, A memorandum from a presidential assistant to
another presidential assistant dated March 24, 1971
concerning the possibility of the President attending
an annual meeting of a dairy farmer cooperative associa-
tion,
38, A memorandum for the record from a presidential
assistant dated March 25, 1971 regarding the President's
meeting with dairy industry leaders on March 23, 1971.
39., A memorandum dated July 16, 1971 from a presiden-
tial assistant to another presidential assistant
8103
regarding a presidential address to a dairy farmer coop-
erative association.
4Q. A memorandum dated July 22, 1971 from a presidential
assistant to another presidential assistant which refers,
among other things, to the dairy price support program.
41. A memorandum from a presidential assistant to another
presidential assistant dated July 27, 1971 regarding a
proposed speech by the F>resident to a dairy farmer coop-
erative association to which is attached a memorandum
containing various considerations for use in the proposed
speech.
42. A memorandum dated November 22, 1971 from a presi-
dential assistant to the President's file concerning the
dairy price support program.
43. A memorandum from a presidential assistant to the
file dated March 8, 1972 regarding the dairy price support
program.
44. A memorandum from a presidential assistant to another
presidential assistant dated March 7, 1972 regarding the
dairy price support program.
45. A memorandum dated March 6, 1972 from a presidential
assistant to another presidential assistant regarding the
dairy price support program.
46. A memorandum from a presidential assistant to another
presidential assistant dated March 9, 1972 regarding the
dairy price support program.
47. A memorandum from the Under Secretary of Agriculture
to the Assistant Director, 0MB, dated March 24, 1971 to
which is attached a proposed press release.
48. An undated sheet of handwritten notes making refer-
ence to the price support program.
8104
49. A memorandum from the Secretary of Agriculture to a
presidential assistant dated July 19, 1972.
50. . Memorandums dated February 1, 1972, February 1, 1972,
August 31, 1972, September 28, 1972, and December 15,
1972 from the Counsel to the President to presidential
assistants concerning this litigation and setting forth
various considerations, recommendations and opinions with
respect to the litigation. Attached to the February 1,
1972 memorandums is a routing slip from a presidential
assistant to t^e Counsel to the President returning the
memorandums for the sender's files. /
51. A memorandum dated August 12,. 1970 from a presiden-
tial assistant to another presidential assistant recom-
mending a presidential "photo opportunity" with dairy
industry leaders.
52. A decision memorandum dated September 2, 1970 from a
presidential assistant to another presidential assistant
through a third presidential assistant, proposing fifteen
brief meetings with the President, one of which is a
"photo opportunity" with dairy industry leaders.
53. .An undated memorandum prepared for the President by
a presidential assistant, setting forth the President's
schedule of meetings for a one hour period on September 9,
1970, which includes a scheduled ten minute "photo oppor-
tunity" with two dairy industry leaders. Attached to this
is an undated briefing memorandum for the President from
a presidential assistant relating to the referenced meet-
ing.
54. A tape recording made of a meeting between the Presi-
dent and other governmental officials held on March 23,
1971, which relates to the subject matter of this litiga-
tion.
8105
55. A nemorandum from one presidential assistant to " '
another presidential assistant dated December 18, 1970
discussing the dairy industry and its representatives.
56. A memorandum dated March 23, 1971 from a presiden-
tial assistant to the President's file concerning a
presidential meeting with other governmental officials
involving decision making with respect to the dairy
price support program.
57. Memorandum for the Staff Secretary dated March 20,
f
1971 from the Director of the Office of Management and
Budget reporting on a meeting with the President of
March 5, 1971 with various government' officials and
covering a wide variety of subjects, one of which related
to dairy prices.
58. Memorandum for the Director of the Office of Man-
agement and Budget from an Assistant to the Director
dated March 24, 1971 on the subject of dairy price sup-
ports.
59. Memorandum from one presidential assistant to
another dated March 10, 1971 on the subject of cheese
imports with a brief reference to parity levels, and
with a covering note transmitting the memorandum to a
third presidential assistant.
60. An undated and unsigned cover note (attached to the
copy of a memorandum for the President dated March 9,
1971 from a presidential assistant, which has been pre-
viously identified in Mr, Garment's affidavit dated
July 5, 1973 at paragraph 3(r)), wlich discusses the
position of the Secretary of Agriculture on the price
support level at that time.
30-337 O - 74 - pt. 17 - 37
8106
61. Memorandum dated March 6, 1972 from one presidential
assistant to another on the subject of milk price support
levels to which is attached a routing slip dated March 6,
1972;.
62. Memorandum dated February 27, 1970 from one presi-
dential assistant to another to which are attached seven
pages of handwritten notes.
63. Memorandum from one presidential assistant to another
on the subject of milk producers dated June 24, 1970 with
attachment. f
64. Memorandum from one presidential assistant to another
dated August 13, 1970.
65. Memorandum from one presidential assistant to another
dated September 16, 1970 to which are attached two reports
of messages.
66. Memorandum dated September 16, 1970 from one White
House assistant to another with attached handwritten page.
67. Memorandum from one presidential assistant to another
dated November 3, 1970 with attached newspaper article and
attached memorandum dated November 2, 1970 from one presi-
dential assistant to another.
68. Memorandum dated September 29, 1971 from one White
House assistant to another with attached routing slip.
69. Memorandum from one presidential assistant to another
dated August 8, 1970.
8107
CiiiiTIFICATE OF SERVICE
I hereby certify that I have served the foregoing Report
to the Court with attached affidavit of J. Fred Buzhardt upon
plaintiffs by mailing a copy thereof, postage prepaid, this
30th day of November 1973, to their counsel,
William A. Dobrovir, Esquire
2005 L Street, N.W.
Washington, D. C. 20036
DAVID/J, ANDERSON
8108
Response of the U.S. Tariff Commission to a letter dated February 13, 197^,
from John W. Dale, Investigator, United States Senate, Select Committee on
Presidential Campaign Committee Activities with respect to certain dairy
products (low-fat cheese, low-fat chocolate crumh, einimal feed containing
milk, and ice cream).
1. Request
The actual imports of the ahove items in pounds or gallons in the
calendar years 1969 and 1970.
Response
The actual imports of the articles enumerated in your letter in the
calendar years I969 and 1970 were as follows:
1969 1970
Low-fat cheese lbs. 3,000,000 11,027,000
Low- fat chocolate crumb do i*77,000 15,9^^,000
Animal feed containing milk— do 9,693,000 27,^35,000
Ice cream gals. 2,587,92U 8,006,289
Source: Data on imports of ice cream compiled from official
statistics of the Department of Commerce; data for the remaining
three articles estimated by the Tariff Commission staff as shown
in Certain Cheeses and Substitutes for Cheese, ^7 cents per pound
or more. Tariff Commission Publication ^06, July 1971, P- A-75 (a
certified copy of which report is enclosed).
2. Request
Import quotas of the above items in pounds or gallons recommended to
your Commission by U.S. Department of Agricult\ire in July, 1970.
Response
The comments and recommendations of the U.S. Department of Agriculture
of record in the Tariff Commission concerning import quotas for the
above articles are set forth in (l) the President's letter of May 13,
1970, requesting the Tariff Commission to conduct an investigation, and
the Department's letter to the President of March 5, 1970, recommending
such investigation; (2) a prepared statement (undated) used by the U.S.
Department of Agriculture representative at the U.S. Tariff Commission's
hearing on July 28, 1970; and (3) the transcript of the public hearing
before the Tariff Commission on July 28, 1970. Certified copies of the
aforementioned docvmients are enclosed.
8109
2. Response — Continued
The principal recommendations of the Department with respect to quotas
for each of the imported products are set forth in excerpts from the
official records as follows:
Low-fat cheese. — "[W]e recommend simply that the exception from
quota control for cheese containing 0.5 percent or less butterfat
be elLmdnated and that imports of such cheese be subject to the
quota of 25,001,000 pounds, for the cheese category of the TSUS
under which they fall, namely, TSUS 117.75 and 117. 85." (page I6
of the written statement; page 28 of the transcript of the hearing).
Low- fat chocolate crumb. — "We recommend that the exception for
chocolate crumb containing 5.5 percent or less by weight of butter-
fat be eliminated, and that imports of such chocolate crumb be made
subject to the present quota of 17 million pounds." (page 10 of
the written statement; page 22 of the transcript of the hearing).
Animal feed containing milk. — "We believe that quotas, based on
the history of trade in I968 and I969, should be established on
animal feeds containing milk or milk derivatives." (page 13 of the
written statement; pages 25 and 517 of the transcript of the hearing).
Ice cream. — "A quota on ice cream should be established. We believe
that the amoiint of this quota should properly be zero." (page 8 of
the written statement; page 19 of transcript of the hearing).
3. Request
Import quotas of above items in pounds or gallons recommended by the
Tariff Commission in your report to the President on Investigation No.
22-28.
Response
The import quotas for the above articles recommended to the President by
the Tariff Commission in its report on Investigation No. 22-28 of
September 1970, (a certified copy of which is enclosed) were as follows:
Remainder Calendar years
Low-fat cheese
Low-fat chocolate crumb
Animal feeds containing mili
Ice cream
of i?To
(Pounds )
after 1970
(Pounds )
30,000
100,000
none
none
none
none
none
none
8110
Request
Import quotas of above items in total pounds or gallons established by
the President in his proclamation 1+026.
Response
The import quotas for the above articles established by the President in
Proclamation it026 of December 31, 1970, (a copy of which is enclosed)
were as follows :
Low-fat cheese —
Quota quantity
Countiy of origin (in pounds)
Denmark 6 , 680 , 000
United Kingdom 791,000
Ireland 756,500
West Germany 100,000
Poland 385,600
Australia 123 ,600
Iceland 61+ ,300
Other none
Low-fat chocolate crumb —
Quota quantity
Country of origin (in pounds )
United Kingdom 930,000
Ireland 3,750,000
Other none
Animal feeds containing milk —
Quota quantity
Country of origin (in pounds )
Ireland 12,060,000
United Kingdom 185,000
New Zealand 3,930,000
Australia 125 ,000
Other none
8111
Quota quantity
(in gallons)
2lt3,650
155,680
3,U50
27, 600
950
none
Ice cream —
Country of origin
Belgiiun
New Zealand
Denmark
Netherlands
Jamaica
Other
5. Request
The import quotas on each of the above items, as such, established prior
to proclamation 4026.
Response
Prior to the p:'omulgation of Presidential Proclamation No. U026 on
December 31, 1970, imports of the subject articles, i.e., low-fat cheese,
low-fat chocolate crumb, animal feed containing milk, and ice cream were
not subject to quotas under section 22 of the Agricultural Adjustment Act.
as amended. See the enclosed copy of Certain Dairy Products, Report to
the President on Investigation No. 22-28 Under Section 22 of the Agricul-
tural Adjustment Act, as amended, TC Pub. 338, September 1970, pages A-50,
A-35, A-145, and A-30, respectively.
6. Request
If no quotas had been established on each of the five items, what would
have been the anticipated imports for each item during the calendar years
1971 and 1972.
Response
In response to your question concerning the imports of each of the above
articles anticipated during 1971 and 1972 if quotas had not been estab-
lished, the following excerpt from the Commission's considerations re-
garding its findings and recommendations of September 1970, (page 17, TC
Pub. 338) is relevant:
Because of the price pull of the U.S. market for dairy
products, the large stocks of dairy products abroad, and the
export subsidies bestowed by many countries, if controls are
not imposed on the products covered by the affirmative findings,
the import trade in such products will continue to increase at a
rapid pace. Moreover, the character of the import trade will
continue to be of such natixre as to continue to "avoid" the
existing quota provisions.
Sinoereli
Kenneth R. Mason
Encs. Secretary
8112
The White House {
WASHINGTON
«S^'
TO:
FROM: JOH?I BRCXVN
FYl
COMMENT ^OvC4 ^6«
^v:
^ ^rOe»^ ^|»» ««*a>Pa^f»t^^«*^
.^
tadX_!:^^i_|.
5^ ^d *«^ C4s# ^
8113
- ORGANIZATrOU CHART -
1971 MILK PRICE SUPPORT DECISION
I
UMITED STATES DEPARTlfflNT OF AGRICULTURE
Secretary — -
Dr. Clifford Hardin I .
Department of-
Marketing &
Consiimer Services
Richard Lyng,
Assistant Secretary
^Undersecretary^
'J. Phil Campbell"
(jerry slebert, Aide)
■Department of
Agricultural Economics
Dr. Paarlberg, Director
I
Anthony Mathis
Department of International Affairs and Commodity Programs
Clarence Palmby, Assistant Secretary
AGRICULTURAL STABILIZATION AMD
CONSERVATION SERVICE
CCMIODITY CREDIT CORPORATION
BOARD OF DIRECTORS
Kenneth E. Frick Administrator
Carroll Brunthaver, Associate Administrator
Deouty Administrator Commodity Operations
Carl Farrington (deceased)
Livestock and Dairy Division
Reuben Jones, Director
Keister Adams, Deputy Director
1. SECRETARY HARDIN
2. UNDERSECRETARY CAMPBELL
3. Assistant Secretary Palmby
h. Assistant Secretary Lyng
5. Brunthaver
6. Frick
7. Assistant Secretary
Thomas Cowden
8. General Counsel Edward Shu 1 man
9. Dr. Donald Paarlberg,
Director of Agricultural
Economics
Program Development Branch
Sidney Cohen
Ted Bogan
r>-
\\
8114
unit:;.') statl? department c? agp.icultuue
V '- — ^ '- V--' ':-—''< ACniCULTUn/.L STADIUZATlOil AND C0!;SE?.VAT;0M Sira'iCE • V.'ASiaXGIOn.D.C. 202
September 2p, 1970
TO: tieputy Adndnistrcitor, Corjnodity Operations
TilRU: Director, Livestock and Dcdry Division
SUB-JECT: Dairy and vrool procran considerations
• Since I will be spending practically all of rty tiKS between ncv and .
next March on the Inventory Task Force, I vrant to call attention to
the folloviing rsridoni thoughts I have regarddng sane of the decisions
vzhich mvxst be made in the months a}icad: ^
Dcitern:! nation snd annnivnccwent of 1971-7^ Dairy Support Pries . Unless
thcire ai'C si^aiificant cho.nges in ndlk production and consvviption
during the ne"t tvjo or three months, it probabDy v.ull be rdYisable to
keep the support price for iralk at $4.66. In this event, I believe
an ear].y dc-.terrdnation tnd. sjinouncciient, before t}:e hue snd cry froMi
the industi-y begins, v.'ould be ospecia].].y advisable. Even if the
support is to be increa'jed, eh early ejinouncement vould ritill, I b«lJcve,
be a c^ood' move . It's a quest J on of actins rather than re-acting. _ f.t
the p.or'int, earD.y Februea-y appears to be a cood target date. (The
• onlj'' ie^a]. requireiicnt is that t)ie suproj:t be announced bcfcie April 1,
the besiiij-'ine of the navl;etin2 ycc'.r. In the past, it ha', been annc>u3'iC':td
as early c^s "October. )
Purchase prices for dairy products. Deternunation of next year's
. purchsse jrricep \7ill depend primarily upon l.rsi.'jlation 3n€i the level
of support. Assujrdns ucm legislation vhich vou-ld no lon^fiv require
a ininiKUjn support for butterfat, the buying price for butler could Ic
lowered. I have already given you eotirr.ates of the effects on pureha."es,
etc., assu!ii3.ng diff'^ven'o purchase prices for butter j;jid po-C'der. I
believe ve also shcuJ.d seek the coxxrssal of industry on this question and,
in this connection, VJendoll Jaeics aj.ready has contcctcd Jack V7alsh,
A'aerican Dry Jlilk institute, and .Bob Anderson, Kational Butter a^^id Cheese
Institutes. I believe v:e r.ny also vcint their reco:."jr.cnd:;.t:' en:; in the
event there is no legj sla'cive ch'.aige, in which Cc;se we vrauld aLcost
certainly have to increase our buying x^rice for butter.. Just in case
of this hopefu].]j ur!li]'_ely eventuality, you nsy ve-x/^, to have Sid Cohen
prepare cstiiiates of hcv; jr.uc}i the inerea.-e ra.ght have to be, baccd on
projected parity as of April 1.
8115
In the event the butter price is reduced, purchase prices prob£.bly
should not be ennounc.ed until alrr.ost April 1, regardless of v;hen the
support anno\mceniC'nt is made. Othervn.se, large quantities of butter
would be dmiped on the support prosram in the last vrceks of this ,
marketing year, before the price reduction.
Regarding purchaser-prices, it should be noted that those in effect
this year, so far, "have not quite reflected the support level of
$U.6S per huiidredv.-eight for milk.
Location prices for butter. V?e have been' looking into out buying
practices for butter v.'ith a vievr to detennining if improvements can-
be made. I believe we ha.ve about concluded that our present system
is about as good as any of the other possibilities v;e have thought
of, with one exception.
V7e novr buj' butter on the basis of announced prices in three major markel
areas, less 80 percent of the freight to other locations at vrhjch
butter is purchased. A3.1ov.'lng only 80 percent instead of full freight
discourages the rnovcjn.tint of butter fror/i usual production areas to
relatively higli-cost storage in metropolitan areas. By so tying
buying prices a.t different locations to freight rates, they are
affected irhencver freight rates chaiige. Every time freigVit rates
are increased, our buying prices are reduced. To avoid this, I
recommend that next year's buying prices for butter be tied to
freight rates in effect at the beginning of the maa-keting year, so
that they vn.ll not change during the year regardless of any changes
in freight rates.
Indemnity po^,^Tlcnts . In tlie event this Title of the Senate bill is
enacted, ijidcrrnity payments would be autliorlzed for processors. This
wou.ld be entirely a ncv? program requiring the development of piT)gram
regulations and evcryth:ing else such a new program entails. Much
of this work probably would be the responsibility of the Direct
Payments Division, DASCO, but certainly Livestock and Ds.iry Division
wouJld also be inteiested end involved.
\
Dairy Estimates Co!r-.L'j.ttee. Sid Cohen as Vice-Chairm.an will be
responsible for Co!.':o.ttee meetings and should be locked to for future
estimates when needed. If time permits, I vri.ll ple.n to at least m.eet
with tlic Ccmndttee in order to keep abreast of developments during
thfe rest of the year. .
8116
V7ool end inoh?.ir price support exmoimcemcnt for 1971. Assumng enactment
of legislation, a docket has been prepared continuing this year's
incentive prices for vrool and mohair during 1971. The docket has been
given pre-Boai'd consideration and v.'lll be ready for Board action as
soon as the 'legislation is passed.
V7ool and mohair referenda. V/hen the nev; legisla.tion is enacted, wool
and mohair producers vrj.ll request the Secretary to hold referenda next
year to continue the promotion f\md deductions for the American Sheep
Producers Council and the Mohair Council. I have discussed this with
the mohair people already and they prebe.bly vriD.l request that their
referend\im be held in April or May 1971. 1 do not e>:pect then to
•request an increase in the deduction rate. I believe grovrers will
overwhelmingly approve continuing the progre.m.
In the case of wool, hov;evrer, it see:ns to me that there is some ^
dissa.tisf action v/ith the ASPC, and there could be significant opposition
vjhen the referendu.m is he].d. This is especially true if an increase is
requested in the present deduction rate of 1 l/2 cents per pound. I am
not sui'e, but do not believe the situation is too serious at the raoraent
and am hopeful that it can be, improved in the months ahead after the
meetings of tlie ASPC in October and March aaid the Annua]. Convention of
the National V'ool Gro^'crs Association in Januaiy.
VThile I do not anticipate dny other need to be excused from my Task Force
assignments in the months a.hcad, I believe .1 should be excused long
enough to v/ork irith the ASPC on referendum and other questions at its
October mcetin.g and with the Ifv'GA at its Januai-y meeting. I think it
is veiy important to thegrovrers end the Department as well.
From time to time and as they occur to mie, I vri.ll keep you posted of any
other potentia.l problem aa^eas or program decisions v/hich must be made
between novr .and March.
Keister K. Adams, Deputy Director
Livestock and Dairy Division
cc: Mr. James
Mr. Cohen
ASCS : LDD : ia>IAda-ms : scb : 9-25-70
8117
COPY
January 7, 1971
To : Administrator
Subject: Reccrmerided Dairy Price Support, 1971-72 Marketing Year
We believe that next year's dairy support price should be determined
and announced at the earliest possible date, and we recommend that:
1. The present support price of $U.66 per hundredweight
for rdlk be continued.
2. The present suppor-c b\aying prices of 70.75 cents per
pound for butter (price at ?Iew York) and 27.2 cents per
pound for nonfat dry milk be continued.
3. The present buying price of 52 cents per pound for cheese
be Increased to 53 cents. This increase is needed to
offset rising costs experienced by cheese planes as a
result of large outlays many plants have had to make for
necessary mechanization, expansion, whey-handling, and
other such costs.
It is estimated that $^4.66 will be 79 percent of parity as of ne:ct
April 1, the beginning of the 1971-72 marketing year. This is do^s-n
from 85 percent at the beginning of this year as a result of rising
parity. Because farm costs have risen, some producer groups id-ll
urge a higher support. Some './ill recom-nend the maximum, 9^ percent
of parity, which we estimate will be about $5.33 per h\indi-edweight.
We do not believe a higher support is advisable in view of recent
Increases in milk production and the prospect that, at a support of
$4,66, next year's surplus wcold be 6.8 billion pounds, milk equiva-
lent, and CCC costs would be .$3o5 million. This is about the sajae
as our estiiiiates of surplus and costs daring the current year.
Enclosed are the Interagency Comfnittee's latest estimates of next
yeax's dairy production, consumption, and CCC purchases at the $U.65
level (tables 1-1+5 . Also enclosed is a table (table 5) showing
estimates at iU.i+^ (75 percent of parity, the legal minimxun) and at
•f5.33 (90 percent of parity, the maximum). At a support of $5.33,
the estimate is that the surplus would increase to 9.5 /billion pounds,
milk equivalent, and costs woiJ.d go up to nearly $600 million.
8118
Changes in monthly milk production in 1970, compaxed to the same month
last year are summarized below:
Percentage Change
Month 1970 over 1969
January . - 0
Februaxy +0,5
March +0,9
April +0.6
May -0,1
June -0,1
July ■ +0.2
August +0,6
September +0,9
October +1,2
November +I.7
Year to date +0.6
In past years, it has been necessary to increase the support buying
price for butter in order to meet the legal requirement that butter-
fat be supported at not less than 75 percent of parity. This reqxiire-
ment was deleted by a provision in the 1970 Act, and the Secretary
can now use his discretion in setting the butter price. It is impor-
tant to note, hovrever, that any decrease in the butter price would
have to be offset by an increase in the powder price in order to
maintain the present support for milk. The powder price would have
to go up about ^ cent for every 1 cent decrease in the butter price.
After carefully considering different alternative butter and powder
prices, for which data are sho^vn in tables 6-8, and cons\ilting with.
producer and industry representative, we believe the present bioying
prices for butter and powder should be continued. (Were it not for
the new law, it would have been necessary to raise the butter price
2-3 cents per pound to achieve a butterfat support of 75 percent of
parity) .
We bfelieve an early decision and announcement is most important.
This would not only head off an inipending effort by strong producer
lobbies for a higher support but also would eliminate a 2-3 month
period of uncertainty, stabilize prices, and contribute to more orderly
marketing.
Copies of this memorand\am and supporting tables have been sent to
Ray Voelkel for consideration by the Office of Management and Budget
and for the Council of Economic Advisors.
/s/ Carl C. Farrington
Deputy Administrator,
Cranmodity Operations
Enclosures
8119
FOR. t ICIAL USE ONl-Y
TABLE 1 - Estimated milk production, utilization' and surplus
(milk equivalent) 1969-70, 1970-71 end 1971-72
"
Unit
: 1969-70 :
1970-71
1971-7 2
Item
October :
November :
November
; :
estiiT-.at^ :
estimate :
estimate
Milk production
: Bil.
lb.
116.3
117.2
117.2
117.7
Less farm use
• Bil.
lb.
4.3
A.l
4.0
3.8
Marketings
Bil.
lb.
112.0
113.1
113.2
113.9
Beginning comraercial stocks
Bil.
lb.
3. A
3.5
3.5
3.3
Imports
Bil.
lb.
1.7
2.0
2.0
2.0
Total' coramercial supply
Bil.
lb.
117.1
118.6
118.7
119.2
Commercial use.
Domestic
Bil.
lb.
108.8
108.0
108.3
108.5
Foreign
Bil.
lb.
.A
.4
.4
.A
Total
-Bil.
lb.
109.2
108.4 .
108.7
108.9
Endlns coiarasrcial stocks
Bil.
lb.
3.5
3.5
*•
3:3
3.5
Total utilization
Bil.
lb.
112.7
111.9
112.0
112. A
Surplus
Bil.
lb.
i/A.A
6.7
6.7
6.8
Butter
Mil.
lb.
182
2S0
280
280
Cheese
Mil.
lb.
2/31
65
65
75
Nonfat dry milk
Mil.
lb.
357
500 .
500
500
Evaporated milk
Mil.
lb.
107
75
'75
75
•
Number of cov.'s
Thou
12,620
12,430
12
,430
12,200
Milk per cow
Lb.
9,210
9,440
9
,440
9,650
Price:
• \
Manufacturing grade milk
Dol.
Ic\lt.
A. 54
4.70
4.70
4.70
Milk, wholesale all
Dol,
Iq:\i^,
5.55
5.70
5.70
5.70
Cash receipts
Mil.
dol.
6,272
6,503
6
,503
6.549
1^/ Includes Section 709 purchases of 0.1 billion pounds.
2J Includes Section 709 purchases of 13.5 million pounds.
Dairy Supply Estimates Conimittec
11/17/70
8120
FOR
FICIAL USE ONLY
TABLE 2 - Butter: Supply avaiLible for progra-Tis and its utilization,
marketing years 1969-70, 1970-71 and. 1971-72
1969-70
: 197C
-71
: 1971-7 2
Item
: October :
November
: November
: estimate .
estimate
: estimate
- - Million
J
pounus — —
Supplv
'
Change in commercial stoctc's
+S
0
0
0
Production
1,115
1,130
1,150
1.150
• . Total
1,107
1,130 .
1,150
1,.150
Conmsrcial market
925
850
870
870
CCC purchases
182
280
280
280
Beginning CCC unconirnitted
" Inventory _1/
69
35
35
93
Total CCC supply
251
*315.
315
373
Utilization of CCC Supplv
*
Sales
U.S. Army (overseas use)
1
2
2
2
Commercial exports
0
0
0
0
Government -to-Government
0
d
0
0
Donations
Domestic school lunch
'
and welfare
173
175
175
185
Military and V. A. -
A2
A5
45
«
Foreign
0
0
0
0
Total utilization
216
222
,222 232
Ending CCC uncommitted
'
•-•
Inventory
35
93
93
lAl
!_/ Excludes quantities contracted for delivery'to CCC from next marketing
year's production. . .
Dairy Supply Estimates Committee
11/17/70
8121
FOH OjFICL'^L use OIXY
lAELE 3 - ITonfat Di-y Milk: Supply ave.ila'ble for pro£;raF:S and its
utilization, ruirhtting' years I969-7O, 1970-71 e.nd 1971-72
— •
1969-70
iS-'fO:
JL
I
1971-72
ITEM :
: October
Koveriber
I'overfoer
: est It -at
e :
estir/ite ;
estiiiate
.Supt)!-/ • !
"
lillion Po'onds - -
Chaise in rijiufacturing stocks :
+17
0
+15
6
Production :
1,'^30
1,500
1,550
1,580
Total.
1,^13
1,500
1,535
l,5ciO
Comneroial rarV.et l/ :
1,056
1,000
1,035
1,0S0
To CCC "■ :
• 357
500
500
500
Beginning CCC uiicormitted • :
'*
Invciitoi-y :
l81^
5h
_5^ .
12
• Total CCC supply :
. • 551
, 55T
555
512'
Utili;:?.ticn of CCC sur^oly
Sales . . i
Dorr.estic (feed) ' ' :
'. . 9
2
2
1
Corj.-Arcial export :
Title I :
9
15
15
15
Other :
18
25
25
25
Gov ernriient -t 0 -G 0 verrr.snt :
26
25
25,
25
DDnaticiis :
Dor.-.ostic school l\inch :
"*
end velfare :
129
ito
150
155
Foreicn :
296
325
325
-'2S0
Total utilization ■ :
m
532
5li2
. 561
Ending CCC unco-:-Titted :
inventor^' 2/ ;
3h
22
12
11
1/ Includes 18 nu'llion po-.mds of nonfat 62-/ nil!: 'bcusl'it in tlendc-d food product (CS::)
in 1969-70 end an estrafced 20 nillion pounds in I97O-7I for foreign dcn'-tion.
2/ Excludes quantities contracted for delivery to CCC frori next r^rketins year's ,
production.
/
Dairj- Supply T-ti;.
11/17/70
Co-riLittea
812^
TOH ufFICIAL US3 OliY
5MiLE h - f-acai-lc&n Clieese: SuuDly availa'ble for prosrains and its
•. utilization, n-arketir.s* years 1959-70, 1970-71 e-ncl 1971-72
— ■ -■
: 1569-70 :
1970-71
1971-72
• IT£i'.
Oc"
es^
,o'of.T :
J.?:?.te :
lloverber :
est irate :
IToYc-nbcr
ectir^te
Supply
- - - liillion Pouiids - -
Chejigc ill co:HTiercial stocks
Pi-ofiuction
Ireports '
Total
1,
-2
3!^0
17
359
1
r
0
,1^35
16
0
1,'^55
16
l,'^71
0
1,500
16
l,5i5
CoBTSiorcial EB.rkct
CCC purchases (net)
CCC uncor.aidttccl beginning
Invent oi-y l/
Total CCC supplies
1,
: ^
328
31
17
TS5
1
,386
65
■ 0
1,^06
65
0
l,Uln
75
Utilization of CCC supply
>
•
Domestic clcnations
School D.uncli and velfare .
Aniied Services
Total ufcilizatioii
, H
ii8
0
60
0
60
0
?o
75
0
75
Ending CCC uncor.T-itted
Inventoiy l/
0
5. '
5
5
1/ Excludes qus-ntitiea contracted for delivtiy to CCC from next rarketing
year's production.
2/ Includes 13.5 nillion pounds of cheese bought uridr.r Section 709 -.
iiry Suo-sly Kstii.rtes Corr.ittec
il/D.T/TO
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8127
Mr. V/UIIarnVi. Cccnloy
Routo Z
Clrard, K-j^ncaa 66743
Dear Bill:
Eaclosod \z a check from Mid-America Dalr/men to
rolmburoc you for cxpeascs and par diem whllo working on cur
Washington, D. C. project.
I hope this li. satisfactory.
As you probably know by nov/, Secretary Hardin Ic
cooperation with Bureau of the Budget Director Schultz, teddered
oar offorla to increase price euppcf t.i. Last Friday the armouncc-
meut %s^8 made of iho coctinuatioQ of the ?•!. 66 price support for milk.
Wc are, hov/ever, continuing our efforts o nd had a
tnootlng Monday, March 15, with Secr'itary of Agriculture Hardin and
Ilia ctaff, to review hi:: ctatintlcs. Apparently the veasca for the denial
o£ the pocitloQ \-rx3 the ctatcrr.cnt by USDA. thra ihe price jupport in-
crcaco would cost $100 mlUioa. V/e n-.ust, therefore, ccnvltice USDA
that bomo of their projccliono relative to decreased con^3•^'"i■•ptioQ or
tacreaoed production, at the higher price level, aro la error.
V/e v/lll keep you posted of devclopn-.ents.
Sincerely youi'e,
MID-AV.ERICA DAIRYMEN, INC.
GH:bd Gary Hanmaa
Executive Vlco President - Marke'.l = j:
Eacl.
8128
March 4, 1971
Ra:' Tslaphons Czill from VJilbur Mills this
arterr^con ra orica su^oorts on zniHc
Ha called to inquire about the situation and to push
for a pronpt d-Dcision. Ha clearly vanta to sea tha.
suppor~ pric3 raised and eccprossod his doubts about.
tha Qstijracea of e>:ces3 Supply that %vould be cr=3at3d.
by that rsova. Ea states his viaw that tlia Dapartaaat
alvays over-estiisatas tha production increase zuid
under-e3tii=ats3 derxaiid.
GPS/ch
8129
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8130
CONFIDENTIAL - EYES ONLY
MEMORANDUM FOR: FRANK DEMARCO
TOM EVANS
HERB KALMBACH
FROM: JOHN DEAN Wj
As per our discussions, I am forwarding a draft charter
for the 1701 Pennsylvania Avenue operation and a document
that might serve as a model to be used in connection with
the Milk Producers Association Committee, et al. *'
I would suggest you mark up the document if you have
suggested changes and return it to me. I will then
coordinate with you before a final draft is prepared.
cc: John N. Mitchell
CONFIDENTIAL - EYES ONLY
8131
Discussion Draft - Z/n/l\
CHARTER
ARTICLE I - Purpose
We the undersigned constitute ourselves a voluntary-
association under the name
(hereinafter referred to as "the Association"). It is the purpose
of the Association to work for the renomination of President
Richard M. Nixon as the Republican Party 1972 candidate for
the office of President of the United States. To that end we
propose to support a renomination cainpaign throughout the
United States and to solicit, collect and disburse funds for
that campaign. =:=
ARTICLE II - Principal Office
The principal office of the Association is to be located
in the District of Columbia, provided, however, that other
subsidiary offices may be established in any state for the purpose
of carrying out the national activities of the Association.
ARTICLE III - Membership
Members shall consist of those subscribers listed
below and may later include others
*NOTE: If this charter is used as a model for other groups
and it is desired to give these different groups different
purposes, an appropriate clause should be added at this point.
8132
sympathetic to the purpose of the Association who are approved
by the membership of the Association, and who thereafter
accept membership.
ARTICLE IV - Officers
The officers of the Association shall initially be a
Chairman and a Secretary-Treasurer, who shall be elected
by the membership at the first meeting, of the Association and
shall hold office until their successors have been elected by
the membership of the Association. Additional officers may
also be elected if desired by the members.
ARTICLE V - Executive Committee
There shall be an Executive Committee which shall
consist of the officers, and such additional persons as may be
determined by the members. The Executive Committee shall
manage the affairs and activities of the Association, subject
to the wishes of the members.
ARTICLE VI - Duration
The Association shall be dissolved and cease to exist
as an Association at the time President Richard M. Nixon
receives the renomination or in the event he should not become
a candidate for the office of President of the United States.
8133
ARTICLE VII - Surplus Funds
Section 1. In the event of President Richard M. Nixon's •
renomination, surplus funds, if any, nnay be disbursed by the
Association to such political organizations or other groups
thereafter working for the same objectives as the officers
of the Association may determine.
Section 2. In the event Richard M. Nixon shall not
become a candidate for the office of President of the United
States, any surplus funds may be disposed of by the Association
to such political organizations or other groups as the officers
of the Association may determine.
Section 3. The officers of the Association may also
return any surplus funds to all the contributors to the Association
(including Association members) in the same proportion as
each contribution bears to the total of all contributions received.
Section 4. No member of the Association shall have
the right to share in any surplus funds or assets of the
Association upon its dissolution except as set forth in
Section 3 above.
8134
ARTICLE VIII - Amendments
This Charter may be amended at any meeting of the
members duly called for that purpose by the affirmative
vote of a majority of the members present and voting
provided that Sections 3 and 4 of Article VII hereof shall
not be subject to amendment.
IN WITNESS WHEREOF, the undersigned have
signified their desire to become members of this Associa-
tion in accordance with the foregoing by subscribing their
names and addresses hereto this day of 1971.
Address:
Address;
8135
THE WHITE HOUSE
WASHINGTON
February 25, 1971
Dear Mr. Secretary:
The President has approved your suggestion that he meet with
leaders of the dairy industry and we have set aside thirty
minutes at 10:30 a.m. on Tuesday, March 23, for a meeting
in the Cabinet Room.
By a copy of this letter, I am asking, Mr. John Whitaker to
handle the details of the appointmenfwith your office. Also,
I would appreciate knowing when you have confirmed this
date;and time with the dairy leaders.
With best wishes, ;
Lght L. Chapin
Deputy Assistant
to the President
/
Honorable Clifford M. Hardin
Secretary of Agriculture
Department of Agriculture
Washington, D. C. 20250
cc: Mr. Whitaker
8136
?5:ircli ^2, ]971
To:
Dcput/ An^lstant to the; ^rezii\?r^t
.<* '-I k (•'-i (J- 1
»h3 .:}» C
y L< S c'
l:.')clc5c.d 1s 0 sheot of d.nVv f>:ct5 coijcornlnn t;.;> -^onrn
of d^-irvTHtip vniji tho PresvA^nt torcrrcw rorninT.' "^^ '
Also Gnclc3€.J ore su^acj^to^l ro-nrks for c^v^rifir: u-^- ^y
the President c:v^ fov u<^o cLrin:: the ino-tin;. '
A/
J. Pi-ill. CAHPDELL
Under Secretarv
ilnclcsures
OPCanobellrchb 3/22/71
8137
OPETIIMG STAT!?fr.:iT FO?^ T/'.i: P'tTSTDiriT
Secretary ilardln has told nci about great chanfjcc vlilch hove
talccn'plncc recently* In the rr,nr!-.ctluc of cllk. Ro hao told
RO about your orGCjntzatlon. (ATi'I) I an sorry I wan unable
to attend your Convciitioa In Ciilca^'^o last year.
We arc very auch lirpressod vtt-h v:bet the Annoclated Vdlk.
Producers, Inc. ha«j boon able to do In c^'iril"n bargaining;
strength for produccra. Secretary "ardln lias told no that
A cooperative organijiatlou sucli a.'i yours, through responsible
barcainlnfj, can be of tro.T.ondoua value to producerj? and tiay
even besin to nlnlnlzc the need for so tuixv/ governi'seut prograria
for the dairy Indur.try.
Durlnf; the years I have been in Governnent, rcprenentatlves of
dalryn-.en have kept v.a veil avvarc of the heavy soveniit'cnt
Involvonent in your bu-sine-'ja. Inport quota:;, price supports,
spccinl scliool railk pro3rari3, uarkctlnf; orders all of
thccQ are of real concern to dalryrjen.
I knoT'/ too that Secretary Jlardln is particularly veil equipped
to onotot dniryr.-e-a with these pro^raras. Ills early background
ar; an c^rlcitlt'^rel ccoi*o"r>l!Jt veo a** a dolrv 'spoct-'illTtt As a
natter of fact 1 underotanu he wrote his doctoral thesis oo
tallk nnrUeting!
■f
(At tills point the President could turn to Secretary Hardin
and ccsceut that ha ni<;ht elaborate on ciattorc of current
interest to the croui>.)
30-337 O - 74 - pt, 17 - 39
8138
WHO ARE VISITORS? ^
The top cxecutlvft3 of Ansoclnted Milk Producers, Inc., which.
is a huge cooperative froa Minnesota through Texao.
Headquarters: Sen Antonio Texas
Tliey have bean effective In bargaining for higher priced for
producers and have been active In politics,
U. S. nATRY IMDUSTTtY
Ho, of Dalryricn: 1959 - 1,000,000.
1969 - A00,000
Vtoduction and Grosa Incor.o:
1964 - 127 billion pounda - $5. billion
1970 - 117 •• •• - 6.5 *•
Consumption: Per capita conau^-hptlon oteadlly dccllulng
I ■ t
AD'TIHISITAYIOM ACTIO.';^ rAV01?A2I.E TO DAlRYMr:?< , .
1, Kalscd Gupporc price 4-1-70, - $4.28 to $4.66. "^
- 2» TrcslMcnt Icposcd Import quotas on dairy pvoducJ:3, early
•1971. -^
3. Pregldont slf.acd 1970 Tarn Bill wl^lch contained Inprovcd
Class I Base provision. (Thin vaa widely soufiht by all
dalrywen.)
4. President signed 1970 Mnr'tetlns Bill vhlch pomlts producer
"checkoff" of funda for promotion of dairy products,
VHAT rO DAIRY?!I^:t V7A'dT7
1. Incrcaae In 1971 support price. Secretary Hardin, oa
3-12-71, announced no change for this year,
2. Econc-'.lc fomula for prtclns nnrkct nllk - Producer px-opooal
waa rcicctcd by USBA, but Secretary Uardlu has said ue'll
try to x?orl; out acceptable cotapromlac.
3. Continuation of ?>pccial School Kllk (f.y. 1972) does not
Include this expenditure of $ipA udllloD,
8139
Mr. Cnrl Baainana
• Route Z
Highland, Ullaoia 62249
^ Dear Carl: -\-;'' 'y-ZD^^J iZ^^XD/KlKYW.]ZU,''i:<Z^S^l
c. .^- v.vj^./, Thankfl for your letter — and thanko for oendlng It to
xny home. Shirley opened it, as she does rr.oct of rr.y irail, and
V recognised the linportance of our efforts oa price oupporto. Aa
ryott n-.isht imagine, she has been a "widow" for Ihe lact 2-^ to three
l^'weeks, while I have been in Waahlngton worklcj on this price -
^support program. She, of coureo, questioned the iir.portance of
Lilly absence, and your letter^ apprcc^iation helped irie in convincing
vher of the need and necessity of my being in Washington. ;
> ; The reversal la the price support decision, was quite
an accomplishaient. No oae individual can claim credit for this action.
ilt la the combined efforts of all, board members, n-.anagen::eat, otaff
aad the members themselves, who made this happen. However, In any
group action, a small dedicated group m.ust organise the campaign, and
persist in effectuating programs aimed at the objective. Mid-/m. and
A.MPI, with some help from DI. got this roveraal from the Ni>:oa
. Admiclstraton on the price support level.^_^And^I_caajLS8ure you, that
the TAPE and j^DEPT programs, a3_ well as ST-ZCE" (Di's'pFogram)
played a major part in this adniinistratjvo. decision. This juet proves
th£iFa~mInority, regardJess of its number, if it is well organized,
dedicated and adequately financed, can prevail. The stature of V.id-/im,
JiMPl and DI has been imiproved, and for a while anyway, people will
Icnow who wo are. I only hope that the board and the members of Wid^.-'-.m,
don't get the impression that we can accomplish the impossible every time
wo tackle a difficult problem.
We plan to initiate a "thank you" letter writing campaign
among the members, and to step up our flcldmcn's activities on the- />DEPT
program. " ' '" .
8140
•o #2
K',arch29, 1971
RejjardlcRC of tho time, i«oncy, and lonn: hoi that I havo
pill In on thio project, your thanko and appreciation n.akca it all v/orth>
v/hilc. I appreciate your support, and if I can bo of aosictancc in your
/unctioaing as a leader la K.id-^jr., plcaoo let ir.c know. I am at your
forvlce.
Thaaks.
Sincerely yours,
MIO.AMERICA DAIRYMEN. INC.
GHtbd
Gary Hanman
Executive Vice President
l/.zr kctlag
8141
June 7, 1971
Mr. and Mrs. Floyd S. Spldle /^
Route 1 *7*
Cameron, Missouri 64429
Dear Mr. and Mrs. Spidle:
Please accept iriy thanks for your very nice letter of May 18 and your
complimentary remarks about your organization. Mid- America Dairymen,
Inc. It is refreshing to read a letter from friends dedicated to such high
ideals.
I admire you for taking the time to write and I agree with practically every
governnnental reform you have suggested our great country needs. However,
being one of your elected officials in Mid-America, as I support you and
the refornns you suggest, I am forced to be a realist and must do the things
I feel will benefit you and your organization today as well as in the future.
The facts of life are that the economic welfare of dairynrien does depend a
great deal on political action. If dairymen are to receive their fair share
of the governmental financial pie that we all pay for, we must have friends
in government. I have become increasingly aware that the sincere and
eoft voice of the dairy farm.er is no match for the jingle of hard currencies
put in the campaign funds of the politicians by the vegetable fat interests,
labor, oil, steel, airlines, and others.
We dairymen as-a body can be a dominant group. On March 23, 1971,
along with nine other dairy farir.ers, I sat in the Cabinet Room of the V.'hite
House, across the table from the President of the United States, and heard
him compliment the dairymen on their marvelous work in the consolidating
and unifying of our induntry and our involvement in politics. He said,
"You peoplo are my friends and I appreciate it. " Two days later an order
came from the United States Department of Agriculture increasing the
support price for milk to 857o of parity, which added from 500 to 700. million
dollars to dairy farmers milk checks. We dairymen cannot afford to overlook
8142
. Mr. r.nd Mro. Floyd S. Spldlo
Cameron, Mlooourl ,, .,_
Jfago 02
thio kind of economic benoflt? Whether wo like it or not. this is the way
tho eyotcir. worko. '
I reopcct your judgment and will assure you there will be no dlccrimination
agalnct you because you do not participate in the ADEPT program V.'e
louir^''*° ^°" ^°^*-'^ *** Mid. America and I thank you again for your nice
Sincerely yours,
MID-AMERICA DAIRYMEN, INC.
Wm. A. Powell
President
WAPrah
8143
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8146
8147
92d congress
1st Session
S. 1277
IN THE SENATE OF THE UNITED STATKS
March 16,1971
Mr. Nelson introduced the following bill; which was read twice and referred
to the Committee on Agriculture and Forestry
A BILL
To support the price of manufacturing milk at not less than 85
per centum of parity for the marketing year 1971-1972.
1 Be it enacted by the Senate and House of Representa-
2 tives of the United States of America in Congress assembled,
3 That section 201 (c) of the Agricultural Act of 1949, as
4 amended hy the Agricultural Act of 1970, is amended by
5 striking out the period at the end of the first sentence and
6 inserting in lieu thereof the following: ": Provided, That,
n
8148
2
1 notwithstanding the foregoing sentence, the price of niilk
2 for the marketing year beginning April 1, 1971, and ending
3 March 31, 1972, shall be supported at such level not in
4 excess of 90 per centum nor less than 85 per centum of the
5 parity price therefor as the Secretary determines necessary
6 in order to assure an adequate supply.".
8149
8150
/pril 19, 197.1
Ivtr, V.arica Edwyn Harrison
Recvcc li Karrisoa
Suite 500
1701 Pcr^sylvania 'J:V&n\ie, N. V/.
Wachington, D. C. 20006
Dear Jv'.arion:
Enclosed are checks, cover letters, and receipts cover-
lag ADEPT coaiributioQS to the nine campaign corrimittees which
you earlier had scat to me. Sorry to have taken so long to get these
to you.
.. /»s I mentioned on the phone, we need the name of one
xnbre committee to finich our commitment. Can you furnish this
additional committee by return inail?
Sincerely yours, •
-ADEPT '
CK:bd Gary Hacuanaa'
£nclc.
8151
UNITED STATES DISTRICT COURT
CHICAGO, ILLINOIS 60604
^^ ..„c^^ 855 Lamson Drive
RICHARD W. MCLAREN ^,,.
Winnetka, Illinois
60093
May 10, 1974
David M. Dorsen, Esq.
Assisteint Chief Coxinsel
Senate Select Committee on
Presidential Campaign Activities
Room G 308
Dirksen Senate Office Building
Washington, D. C. 20510
Dear Mr. Dorsen:
I write in response to the questions which you
directed to Mr. Oberdorfer in your letter of May 7, 1974.
I am sure you appreciate that ray reconstiniction of the
matters about which you inquire are my best recollection
of events that occurred more than two years ago. While
I have reviewed the files relating to the filing of the
AMPI con^laint in connection with the affidavit sub-
mitted in United States v. Associated Milk Producers, Inc.,
my responses to your questions concerning comparisons
between our actions in that case and our procedxires
generally are based entirely on my all-too-fallible memory.
1. My memorcuidum dated September 9, 1971 to
the Attorney General was not unusual in
content or tone.
2. My second memorandum to the Attorney General
requesting authorization for a grzmd jxiry
request was unusual only in the sense that,
generally, the Attorney General responded on
matters which I sent up to him within a week
or two. However, I did not attach any
8152
particular significance to the Attorney
General's failure in this case to respond
within the usual time, and my second
meinorandiim was written primarily because
we continued to receive complaints from
milk producers with respect to the conduct
of AMPI.
3. I assume you mean by this question whether /
in connection with the recommendation to
file a civil complaint, any consideration
was given to seeking preliminary injunctive
relief, since, of course, there is no pre-
liminary injunctive relief available with
respect to the institution of a grand jury
investigation. To the best of my recollec-
tion, I do not believe that the possibility
of seeking preliminary injunctive relief was
ever considered in this case. If the possi-
bility was considered by Mr. Sarbaugh or Mr.
H\ammel, I have no recollection of having dis-
cussed it with them. In emy event, in a case
of this kind, where the ultimate relief sought
is the cessation of ongoing practices rather
than the enjoining of a proposed action, a
request for preliminary relief is in effect a
request for the ultimate relief, and is for
that reason rarely sought and more rarely granted
With respect to the second part of your
question, the filing of a criminal indict-
ment and, ultimately, the obtaining of
criminal convictions provide in themselves
no relief to farmers injured by AMPI's pre-
datory practices.
There was no Division policy against
both filing a civil complaint and seeking a
criminal indictment against the same defend-
eints , and it was not unusual for the Division
to do so.
4. As I indicated in n^ affidavit, I assumed
that the Attorney General's preference for
proceeding civilly rather than criminally
8153
was based on his assessment of the risks
involved in seeking a 'criminal conviction
against defendants who contended that their
actions were based on advice of counsel.
In this connection, the routing slip, dated
January 18, 1972, by which I sent the civil
complaint to the Attorney General confirms
my recollection. I stated there, "The only
reason we don't ask criminal action is that
there is some indication that they have mis-
taken legal advice that they are exempt
from the antitrust laws." Aside from this
consideration, which I discussed briefly
with the Attorney General on November 30 ,
1971, I have no knowledge of any particular
expertise or additional information available
to the Attorney General which influenced his
request that we proceed civilly.
5. It was unusual for Attorney General Mitchell
not to approve recommendations from the
Antitrust Division, either with respect to
filing civil complaints or to instituting
grand jury investigations. Although there
may well have been other instances in which
he did not approve requests for grand jury
investigation, I do not now recall any speci-
fic cases in which this occurred. This would
be best answered from the files and, of course,
each case would have to be viewed according
to its own particular circvunstances.
6. Pre-filing negotiations were very common
prior to filing civil complaints. I found
them to be an efficient and expeditious
method of administering cuiti trust policy, and
utilized them to a much greater extent them
my predecessors. Although I do not know
whether more negotiations were initiated by
civil defendants than by the Division, it
was not unusual for the Division to inquire
of the defendants whether they wished to pro-
file, whether or not they might have previously
indicated that they would agree in principle
to the relief sought by the government.
30-337 o - 74 - pi. 17 - 40
8154
7. It was not unusual for the Attorney General
to communicate with me on a variety of sub-
jects through brief, written notes, juid I
do not recall ti^ether his practice in that
respect was more or less frequent than his
communications to me orally. I did not con-
sider his written communication concerning
pre-filing unusual or significamt.
8. As I indicated in iny affidavit, the prin-
cipal reason for filing the complaint on
Febixiary 1, 1972, was the indication which
Z had received from Mr. Sarbaugh that AMPI
did not in fact agree in principle to the
relief sought and did not intend to use the :
pre-filing period to negotiate in good faith.
Further, since I wets scheduled to leave the
Division at the close of business February 1,
1972, I wamted to have the complaint filed
before I left; partly to wrap up unfinished
business and partly to preclude any possible
atten^t by AMPI to resist the filing of the
complaint by some political means , since
representatives of AMPI had indicated to
Mr. Sarbaugh their consideration of political
factors.
I hope that I have been of some assistance to
your inquiry on these matters.
Sincerely,
acereiy.
Richard H. McLaren
8155
/lugust 26, 1971
Mr.' Ja>;e Jacobsen
Attorney at Lav/ '
JAC0DS21? & LONG ' -
P. O. Box 222
Austin, Texas 78767
Dsar .Take:
Several days ago I mGntlonad briefly a problem v;e could possibly have
with" the II^S. This is a- result of a routine audit of Milk Producers,
JXicl 1S63 retii-rn . ycv. '..'ill r.ctc thv= enclosed biiimgs from McGregor
& Werner, Inc., a VJashington, D. C. printing firm, billed ia?I, Dallas,
Texas for $28,500.00 for printing and MPI, San Antonio, Texas for
$30,250.00. The $28,500.00 bill was paid out of Dallas l-'^l office
and the $30,250.00 was paid out of our North Texas Producers Associa-
tion office in Arlington,' Te::a 3. The Morth Texas group no longer
exists and in fact did not in 1968 except all accounting had not been
consolidated at that time. The IRS did single out the $28,500.00
checl; in the San Antonio office for further explanation.
About" -the same time Bob Strauss, Treasurer of the l-TDC in VJashington,
called me that another IRS employee had Just left his office after
having inquired about both the above mentioned checks. Payment did
not go through the IJDC books . You v;ill note that the checks were
endorsed over to "Salute the President Co-jnittee" by McGregor & V7erner,
Inc. This should (and did) raise eyebrc/s.
This means that tv;o separate investigations are irj progress on these
items .
The cr;closed letter to Ron Voos, Assistant to Bob Tsham, from a Doyle
Bond, an IRS Agent, is questioning several other items on our 1960
return. Those checked by Ijob Isham in red are the ones he is worried
cbout.
Wl-.y
8156
Hov;ever, the r:cal issue of concern to Ishara is the fact that Bond
orally told Voss tliat he is questioning tJie tc:: ,c::c.tipt status of
.*."irz Czz. ISjC, as t\\'o of our subsidiaries, Arlington Food Stores in
the Dallas area and Co.-amanchc Supply in the Kansas and Texas area
sold more supplies unrelated to railk than v/as usual for a coopera-
tive. Bond also indicated he had been pro:r.otcd rather rapidly
recently and if he could change our tax exempt sta tus to a tax
status as well as raise an issue over our questionable expenditures,
he could merit further proraotion. The above are ray words, but Bond
^Jid^inoly this.
Wc need yoa to make contact to point out any drastic action v;ould
be "prcrva-ture and since only questions are pending at this time and
BO far there has been no action by the IRS, it is timely.
Ishara' v/ould lilic" to meet," if necessary', at a higher level V in the
next <-«'»o Ar throe- •.-.•ecks tp discu.;:s '•vi-iuLc:Vui: action, ir any; is
necessary..
Sincerely,
ASSOCIATSD MILK PRODUCERS, INC.-
Sob /.. LlUy
Assistant to the General llanager
^'i\^
8157
A book eafcilied "No Rotreal from Tomorrov", which conxisto^
of President Johason's 19^7 messages to the Niaetiath Coogr«0s»
was prilled and distrlbated in I>ecember, 1967, Somaoae, I
believe it was Ji^sn Criawell, tb» treasurer of the DeoKtcratic
National Committee, asked the Milk Producers to pajr for the
costs incurred in preparing* printing, and mailing this book.
The beat recoiiectioa I can obtain is that at the time the Milk
people ware toid tiiat this was not a poiiticai e^cpenditure and
therefore a deductible ai^eoae. The <bosts iflnroivad were dose
to $100. 000 *ad the CO-<q^ i&d deduct thia on their income tax
retuTBe.
SttfaeeqtMmllf * during as audit bf Internai Revenue, which is
beiim carried ott at the present time hjr an agi^nt, Dojrie P«. Bond,
friMii tiie San Antonio office, questioae were raised concerning
^e dedttcftifaiiitr of this eaqienditure. It turns out that Internal
Revenue haa made a rather extenaive investigation of thia matter
in Washington a« well aa San Antonio. The facta revealed by- tbe
iovestigatioB are &at the checks u^ch were sent to the printing
companf. If cGregor li Werner, Inc. , Washiogtor, D. C ^ were
subeetpieatly^ endorsed by that ceompany, witSkout the knowledge
of the JMiik Producers, to aa ori^oiaation called "Salute to the
President Gommittae'*, and deposited in t)» District of Columbia
Natioaai Bank. This obviously bas a political connotation.
The IRS has raised a question about the propriety of otur taking
the original deduction for die printing, and at this time we are
unable to f^nd any correspondence which indicated a ruling that
Oiese were tax deductible itenos. The tax payment part of thia
is really not a oaajor profalena becauae we have loss .carry-forwarda
that would eliminate thm necessity of paying any tax even if &eae
were aoft deductihle items.
8158
MEMORANDUM
April 4, 1972
TO: George Mehren
FROM: Robert O. Isham
In order to avoid any possible confusion which may later arise /
1 have placed on file in AMPI's confidential personnel records
a copy of my letter to you dated April 4, 1972. Based on our
conversation, the effective date is April 4, 1972.
8159
_ ASSOCIATED MILK PRODUCERS. INC,
aB^\7k(]Da) home office
•^ PHONE: A/C 512 341-8651 TELEX 76-7446
P.O. BOX 32287 SAN ANTONIO, TEXAS 78284
April 4, 1972.
Dr. George Mehren, General Manager
Associated Milk Producers, Inc.
4th Floor, GPM Building
San Antonio, Texas 78216
Dear Dr. Mehren:
After many hours of deliberation, I have concluded that I must terminate
my employment with AMPI . Many months ago I decided to do everything in
my power to eliminate from Al-lPI the improprieties and mismanagement that
I felt existed. My continued employment during the last four and one-half
years under circ\imstances over which I had no control was at substantial
risk to my personal career. 1 am of the opinion that AMPI has now changed
direction and that my responsibility to assist in this change is substantially
complete. I have great confidence in the ultimate judgement of AMPI's Board
of Directors and present management and I am certain that this organization
will continue to be the leader among dairy farmer cooperatives in the years
ahead.
1 could elaborate on many of the recent changes and past accomplishments-
over which I take some degree of pride. For personal reasons I have listed
a few in an addendum to this letter.
My personal fut'ire is somewhat uncertain. For several years I have had
the desire to relocate to a small Texas city and practice public accountancy.
My present plans lean in this direction. This is the wrong time of year
to start a public accounting practice, but I felt it important to remain
with AMPI during the "tax season" just now ending.
During the tra^.pition period of the next ni lety days, I think it would h'l
helpful to AMPI to engage me as a consultant at a fee equal to my present
salary. This vould in fact be less costly o AMPI than a salary arranger.ient.
I would apprec .ate the fee being paid in advance.. This fee plus the proceeds
from the sale cf my home will provide me sufficient cash to move my fcimily
and establish c new office. Although I have not checked to determine the
exact amount. ] would appreciate receiving my termination benefit under
AMPI's retirement plan in cash. If the benefit is slightly in excess of
$3,000, I would be willing to forfeit the excess and accept settlement in
the cur.ount of .'•3,000. Any consideration which might be given to allow me
to perform the annual audit of Dairy Counci.'. on June 30, 1972, would also
be appreciated.
8160
All or any part of the above requests are of course discretionary on U«e
part of AMPI. I do think, however, that X can provide services during this
transition period which will be beneficial to AMPI. Regardless of what
Arrangements are made, I will long appreciate the opportunity to have
worked for the dairy fanners of AMPI. I trust that ay friendship with
AMPI Board members emd staff personnel will continue in the years ahead.
Yours truly.
<^U/-£dA^'^
Kobert O. Ishan
Controller
SOItvp
8161
ADDENDUM TO LETTER TO GEORGE HEHREN
Dated April 4, 1972
Accomplishments of the period from September, 1967 to date:
(1) Successful assimilation emd consolidation of the records and
accounting activities of sixty-nine cooperatives.
(2) Completion of annual audits for presentation at annual meetings
under extremely critical time limitations.
(3) Design and implementation of a uniform employee retirement plan
and restructuring of Retirement Committee.
(«, Consolidation of AMPI fire and casualty insurance under the direc-
tion of a competent insurance specialist.
(5) Implementation of an AMPI wide stamdard chart of accounts and
financial reporting system.
(6) Consolidation of Northern and Central Region accounting under
competent Regional Controller.
(7) Consolidation of Southern Region accounting under competent
Regional Controller.
(8) Design and implementation of a data processing network and recent
review by Touche Ross. , • ■
(9) Restructuring of TAPE into a committee more responsive to the
direction of AKPI membership.
(10) Establishment of a relationship with the Houston Bank for Cooperatives
whereby AMPI has been able to borrow sufficient funds to finance its
operatio'is including proposed refinancing ($28 million) now in process.
(11) Implementation of improved cash management techniques reducing
seasonal borrowing S3 to $5 million.
(12) Selection of new audit firm and consistent reduction of each year's
audit fees.
(13) Implementation of Home Office budget, Al-IPI capital expenditure budget,
anu tho development of procedures which may be used in an AMPI wide
operations budget.
(14) Developnent of a capable and disciplined staff including internal
audit, 'lata processing, general accounting, insurance, and budgeting
departments.
8162
TELEGRAM TO BE SENT TO:
H. Pat Jennings, Clerk
O. S. House of Representatives
Washington, D. C.
On April 4, 1972, I resigned from the positions of Treasurer and Trustee
of Jthe Trust for Agricultural Political Education. The statement required
by Section 305 of the Federal Corrupt Practices Acts of 1925 as an'.ended
has been prepared and mailed to your office today. This statement will
include t}te period beginning March 11,. 1972, and ending April 4, 1972.
30 337 4851
ROBERT O. ISHAM
Uestcrn Union phone: 227-4321
>0 ^99.
S8aS76
C^^J>
8163
April 20, 1972
Kr. Monroe Betke, President
Citizens National Bank
Austin, Texas
Dc'\r v.onroe.
On April 4, 1972, I resigned fron ny enployment with A-'^IPI. Z^
accordance with the provisions of the trust agreenent which estahli.''::.*5
the Trust For Agricultural Political Education, the A>rPI Board of
Directors hns the authority to appoint n successor trustee. At t.'.^
AJtPI Board neeting held in Chicago on April 13, 1972, George Mehr6:ri. '■***
appointed trustee.
Effective April 4, 1972, the signature cord bearing my nane sJ/viW
be renKived from your files. I have signed no checks nor made any d-rp/^^ita
subsequent to tliat date.
Your cooperation in this matter will be apprecifeted.
Yours truly.
Robert O. Isham
BOI:cr
:^-^^ '
580^^4
8164
August 7, 1972
AGRI-BUSINESS
Group
Action
Ag Chemicals
Animal Health
Ag Hagazlne Publishers
Beef Producers
Catfish Farmers
Chicago Board ot Trade
Com Refiners
Co-ops
Citrus Industry
Cotton Growers
Dairy Processors
Farm Broadcasters
Farm Equipment
Farm Implement Dealers
No response, question on pending legislation and
regulations affecting sales of their products.
Should come through later.
Most majors have already been contacted - list of
small Independents being assembled for contact.
Hugh Cronlster, Harvest Publications, Is contacting
fellow publishers. Committee should be formed
by the week of August 7th.
Dana Bennett will contact Albert Mitchell end U.C. '
Farr August 10th to set up producer and feed lot
committees, respectively.
Nell Block, Tunlco, Mississippi has agreed to contact
fellow producers next week.
Three prospects for organizers for action among
Board of Trade and Mercantile Exchange members are
being contacted. Hope to spread to all future
traders In all exchanges.
Liebenow talked to chairman of Board - no response
at date of writing.
Contact has been made with respective "funds" and
national leader expected to be named August 11 or
12.
Contact names available but not yet followed up.
List of key contacts on way to Washington. Preliminary
contact Indicates strong support forthcoming.
Trade association executive currently contacting
members to get committee started.
Many broadcasters are already working as contacts.
with local agriculture contacts.
Ceo Delp, New Holland should respond favorably
August 4th to heading up National Committee
Association of Board of Directors meets August 8-9
and will organize effort at that time.
8165
Group
F4nii Magazine Editors
Farm Hewspaper Editors
Fertilizer
Feed Industry
Feed Industry
(Retired Executives)
Flour and Milling
Florist
Forest Products
Frozen Food Processors
Canners
Grain Exporters
Grain and Feed Dealers
Meat Packers and Processors
Milk Producers
National Agricultural
Advertising
Potato Growers
Pork Producers
Peanut Growers
Poultry
August 7, 1972
Page Two
Agri-Bus iness
Action
Many are working on favorable editorial copy. All
agree to plug "Agriculture" on checks. Several are
good contributors.
Favorable editorial copy - will be sent contribution
folder .
List of names provided - contact to be made shortly.
Committee underway-active contact throughout industry
week of August 14th.
There are 13 very wealthy retired feed industry
executives among which one of their number is actively
soliciting the others.
List of contacts received, August 3, 1972. Will
contact next week, favorable reaction anticipated.
Key names to be sent next week. Very favorable
response indicated by trade association executive.
Action continuing, several state committees expected
to be organized by the week of August 7th.
Action underway in contacting chief executives
by industry- leader.
Contact lists to be available August 8th.
Contact being made with key executives.
Committee should be in action by August 11th.
Fund raising will be discussed and program developed
at AMI Board meeting in Mid-August.
Lee Nunn and John Connally handling
Four farmer national presidents will be sending
letter to 1500 fellow members in about two weeks.
Waiting for Jack Simplot to return from vacation
August 12th.
Six key pork producer names have been submitted.
Letters are being written and an organized effort
will be forthcoming.
Preliminary action will be underway the week of
August 7th.
Key leader met August 2. State chairmen will be at
work by August 8th in every state having significant
poultry industry - egg, hroilers, and turkey.
8166
August 7, 1972
Page Three
Agri-Business
Group
Action
Rice Growers
Rice Millers
Soybean Growers
Tobacco Growers
Tobacco Warehousemen
President of rice growers association agreed and is
at work. Program should be underway next week.
Contact starting Friday August 4 - Should be good
as millers have good will towards the President
because of foreign policy in the past two years.
Kimnett Barker will attend soybean growers meeting in
Columbus August 13th and 14th. Leaders will meet
with E. Barker and set up fund-raising.
Key tobacco state people are contacting growers and
establishing committees.
Contact is being made with key warehousemen. Should
prove beneficial.
8167
MEMORANDUM
Committee for the Re-election of the President '^'"^^"^^'^.tCu—
Septetuber' 6, 1972
MEMORANDUM FOR:
FROM:
SUBJECT:
MR. FRED MALES
CLAYTON YEUTTER
Afirtcultural Campaxgn Matortats
See attached memo and your note thereon. In response to your consnent,
I talked with Dairymen's Inc., which Is one of the dairy cooperatives
that has been niost friendly to the Adolnlstratlon. Dairymen's Inc.
has agreed to provide the $15,200, or whatever is necessary to produce
500,000 copies of each of the two leaflets. They are also willing to
make the contrliwtlon in whatever manner ve desire.
I then conferred with Bob Odell, who talked with Mr. Stans about how
tills might best be handled. Stans suggests that the Noveaiber Group
simply contract with the printer for production of 500,000 copies of
each of the leaflets, and that Dairymen's Inc. then pay the printer
directly. The Co-op would then deliver the leaflets to us and report
their value as a gift in kind to the Committee to Re-elect the
President. ^
Bill Hovelli has asked that I secure your concurrence before proceeding
Please call if you have any questions. The one leaflet Is ready to
go to press; the other is In draft form. We could easily distribute
a million copies of each If we could afford J:h em.
Proposed Financial Arrangement: Approved_
■Attachment
^^>i^ae!
4M
Dlsapproved_
HOUSE ACCOUNT
8168
"•''• 232,500
Milk Producers Association
T.A.P.E.
P. 0. Box 32287
San Antonio, Texas 78216
A.D.E.P.T.
Springfield, Missouri
S.P.A.C.E.
Kentucky Trust
508 Portland Bldg.
Louisville, Kentucky 40202
8169
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