Northeastern University
School of Law
Library
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STATEMENT OF INFORMATION SUBMITTED
ON BEHALF OF PRESIDENT NIXON
HEARINGS
BEFORE THE
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
NINETY-THIRD CONGRESS
SECOND SESSION
PURSUANT TO
H. Res. 803
A RESOLUTION AUTHORIZING AND DIRECTING THE COMMITTEE
ON THE JUDICIARY TO INVESTIGATE WHETHER SUFFICIENT
GROUNDS EXIST FOR THE HOUSE OF REPRESENTATIVES TO
EXERCISE ITS CONSTITUTIONAL POWER TO IMPEACH
RICHARD M. NIXON
PRESIDENT OF THE UNITED STATES OF AMERICA
Book I
EVENTS FOLLOWING
THE WATERGATE BREAK-IN
June 19, 1&72-March 1, 1974
f^E'CElVED
MAY-JUNE 1974 ^^OV 1 Z 19/4
7 4 , T ? V^ ' ^ ^ V^/ Bk 1_ l^- ^- LAW LIBRARY
U.S. GOVERNMENT PRINTING OFFICE.
35-946 O WASHINGTON : 1974
For sale li.v the Superintendent of Documents, U.S. Government Printhig Office
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NORTHE/^EEN UNIVERSITY SCliCCL ot LAW V>BPMl
COUNSEL TO THE PRESIDENT
James D. St. Clair. Special Counsel to the Prexiilent
John A. McCahill, Assistant Special Counsel
Malcolm J. Howard, Assistant Special Counsel
h
FOREWARD
By Hon. Peter W. Rodino, Jr., Chairman
Committee on the Judiciary
On February 6, 1974, the House of Representatives adopted by
a vote of 410-4 the following House Resolution 803:
RESOLVED, That the Committee on the Judiciary acting as
a whole or by any subcommittee thereof appointed by the
Chairman for the purposes hereof and in accordance with
the Rules of the Committee, is authorized and directed
to investigate fully and completely whether sufficient
grounds exist for the House of Representatives to exercise
its constitutional power to impeach Richard M. Nixon,
President of the United States of America. The committee
shall report to the House of Representatives such resolu-
tions, articles of impeachment, or other recommendations
as it deems proper.
On May 9, 1974, as Chairman of the Committee on the Judiciary,
I convened the Committee for hearings to review the results of the
Impeachment Inquiry staff's investigation. The hearings were convened
pursuant to the Committee's Impeachment Inquiry Procedures adopted on
May 2, 1974.
(m)
These Procedures provided that President Nixon should be
accorded the opportunity to have his counsel present throughout the
hearings and to receive a copy of the statement of information and
related documents and other evidentiary material at the time that
those materials are furnished to the members.
Mr. James D. St. Clair, Special Counsel to the President,
was present throughout the initial presentation by the Impeachment
Inquiry staff. Following the completion of the initial presentation
the Committee resolved, in accordance with its Procedures, to invite the
President's counsel to respond in writing to the Committee's initial
evidentiary presentation. The Committee decided that the President's
response should be in the manner of the Inquiry staff's
initial presentation before the Committee, in accordance with Rule A
of the Committee's Impeachment Inquiry Procedures, and should consist
of information and evidentiary material, other than the testimony of
witnesses, believed by the President's counsel to be pertinent to
the inquiry. Counsel for the President was likewise afforded the
opportunity to supplement its written response with an oral presenta-
tion to the Committee.
(IV)
President Nixon's response was presented to the Committee
on June 27 and June 28.
One notebook was furnished to the members of the Committee
relating to Watergate and its aftermath. In this notebook a statement
of information relating to a particular phase of the investigation
was immediately followed by supporting evidentiary material which
included copies of documents and testimony (much already on the
public record) and transcripts of Presidential conversations.
The Committee on the Judiciary is working to follow faithfully
its mandate to investigate fully and completely "whether or not
sufficient grounds exist" to recommend that the House exercise its
constitutional power of impeachment.
Consistent with this mandate the Committee voted to make
public the President's response in the same form and manner as the
Inquiry staff's initial presentation.
July, 1974
(V)
CONTENTS
Page
Foreward ill
Introductory Note vll
Statement of Infomation 1
Statement of Information and
Supporting Evidentiary Material 37
(VII)
INTRODUCTORY NOTE
The material contained In this volume Is presented In two sec-
tions. Section 1 contains a statement of Information footnoted with
citations to evidentiary material. Section 2 contains the same state-
ment of information followed by the supporting material.
Each page of supporting evidence is labeled with the footnote
number and a description of the document or the name of the witness
testifying. Copies of entire pages of documents and testimony are
included, with brackets around the portions pertaining to the state-
ment of Information.
In the citation of sources, "SSC" has been used as an abbrevi-
ation for the Senate Select Committee on Presidential Campaign Activities.
(IX)
STATEMEOT OF INFORMATIWJ
SUBMITTED ON BEHALF
OF THE PRESIDENT
EVENTS FOLLOWING
THE WATERGATE BREAK- IN
June 19, 1972 -- March 1, 1974
(1)
1. On Monday, June 19, 1972, two days aiter the break-in
of the Democratic National Committee Headquarters, Dean contacted
Liddy and Liddy told Dean the men caught in the Democratic National
Committee Headquarters were Liddy' s men and that Magruder had
pushed him to do it. Dean asked Liddy if anyone from the White House
was involved and Liddy told Dean no.
Page
la Dean 3 SSC 933 40
(3)
2, John Dean testified that on June 18, 1972, one day
after the break-in of the Democratic National Committee Headquarters,
"the cover-up was already in effect, in being. " Dean testified he
was in on the cover-up from the very beginning. Dean concurred
w^ith Senator Gurney that the cover-up "grew like Topsy, and Dean
w^as a part of it. " When questioned if he advised the President
of what was going on. Dean responded that the first time he ever
talked to the President was September 15, 1972, some three months
later.
Page
2a Dean 4 SSC, 1357.... 42
2b Dean 3 SSC, 1026 43
(4)
3. Dean did not meet with the President until approximately
three months after the Democratic National Committee Headquarters
break-in. The allegation that Dean informed the President of an
illegal cover-up on September 15, 1972, is based exclusively on
the testimony of Dean. In testimony before the Senate Select
Committee, Dean stated he was "certain after the September
fifteenth meeting that the President was fully aware of the cover-up. "
However, in answering questions of Senator Baker, he modified this
by agreeing that it was an "inference" of his. Later Dean admitted
he had no personal knowledge that the President knew on September
fifteenth about a cover-up of Watergate.
Page
3a Dean 4 SSC 1435 46
3b Dean 4 SSC 1475 47
3c Dean 4 SSC 1482 48
(5)
4. On May 22, 1973, the President stated that the bugging,
and burglary of the Democratic National Committee was a complete
surprise and that he had no prior knowledge that persons
associated with his campaign had planned such activities. On
March 21, 1973, John Dean told the President that no one at the
White House knew^ of the plans to break in the Democratic
National Committee.
Page
4a President's statement. May 22, 1973
(9 Weekly Compilations of Presidential Documents
696) 50
J5-._ Transcript, March 21, 1973, 10: 12- 1 1 :55 a . m.
p. 183 51
1 / Reference to transcripts are to submission of Recorded
Presidential Conversations of April 30, 1974.
(6)
5. H. R, Haldeman and John Ehrlichman testified before
the Senate Select Committee that they did not believe the
President had prior knowledge of the break in plans. On
March 21, 1973, John Ehrlichman told the President that, on
the basis of information he had, no one in the White House had
been involved, had notice, had knowledge, participated nor
aided or abetted in any way in the Democratic National Committee
burglary .
Page
5a Haldeman 7 SSC, 2883 '. . • 54
5b Ehrlichman 6 SSC, 2769 55
5c Transcript, March 21, 1973, 5:20-6:01 p.m.
p. 269 56
(7)
35-945 O - 74 - 2
6. John Mitchell testified before the Senate Select
Committee that the President did not know of either the burglary
plans or the cover-up. Richard Moore testified before the
Senate Select Committee that as a result of his meetings with
the President and Dean on March 20, 1973, he concluded that the
President had no knowledge that anyone in the White House was
involved in the Watergate affair and John Dean told him as they
departed that he had never told the President.
Page
-^a7 Mitchell 4 SSC 1628 58
~&b Moore 5 SSC 1944, 1945,2067 59
(8)
7. After the second meeting in Mitchell's office on February 4, 1972,
the modified Liddy plan was turned down and Dean concluded the plan was
at end. Dean later met with Haldeman and advised Haldeman that the White
House should have nothing to do with any such activity. Haldeman agreed.
Page
7a] Dean 3 SSC 931 64
7b^ Dean 3 SSC 930 65
(9)
8. Magruder reported to Strachan that a "sophisticated
political intelligence gathering system" had been approved.
Strachan included this item in a memo containing approximately
30 other items directed to Haldeman. attached at tab "H" of this
report were examples of the type informatioa being developed
and identified by the code name "Sedan Chair. " Magruder and
Reisner testified "Sedan Chair" involved a disgruntled campaign
worker from the Humphrey Pennsylvania Organization who
passed information to Committee to Re-Elect the President.
Porter deemed this activity surreptitious but not illegal.
Page
'Ja\ Strachan 6 SSC, 2441, 2452 68
Jb] Magruder 2 SSC, 810, 848 70
"8^ Reisner 2 SSC, 499, 500 72
SA\ Porter 2 SSC, 670-671 ". 74
(10)
9: Dean told the President on March 21, 1973 that Haldemaa
was assuming that the Committee to Re-Elect the President
had an intelligence gathering operation conducted by Liddy that
was proper. Dean told the President there was nothing illegal
about "Sedan Chair".
Page
9a.j Transcript, March 21, 1973, 10:12-1 1:55 a.m.
pp. 178-179 78
'W] Transcript, March 21, 1973, 10:12-11:55 a.m.
p. 180 ... ► 80
(11)
10. Political Matters Memo #18 was prepared by Strachan and
submitted to Haldeman on March 31, 1972. On April 4, 1972 Strachan
prepared a talking paper including the mention of the "sophisticated
intelligence gathering operation" for use by Haldeinan in a meeting he
was having with Mitchell on that day. The paper was returned to Strachan
and filed with Memo #18 after Haldeman met with Mitchell, Strachan
testified the subject of intelligence gathering was never raised again
by Haldeman. Strachan is certain none of the Political Matters
Memo had the "P" with a check mark through the "P" which was the
procedure used for memos discussed in that torm with the President.
Page
IQa, Strachan 6 SSC, 2452, 2454, 2488 82
(12)
11. I Haldeman has testified that he and Mitchell did not
discuss intelligence gathering activities with the President
on April 4, 1972, and that he and Mitchell only reviewed
with the President matters relating to the ITT-Kleindienst
hearings and arguments of regional campaign responsibilities.
Haldeman' s notes of the meeting show no political intelligence
gathering operations were discussed. The transcript of
April 4, 1972, meeting between the President, Haldeman,
and John Mitchell confirms that there was no discussion of
campaign intelligence gathering activities.
Page
Tia^ Haldeman 7 SSC, 2881 86
Tr§ Transcript, April 4, 1972, 4:13-4:50 p. m. , p. 1-31
(submitted to the Connmittee on the Judiciary on
June 5, 1974) 87
(13)
12. • The President had no knowledge of an attempt by the White
House to cover-up involvement in the Watergate affair. Dean told
the President that there were things Dean knew the President had no
knowledge of.
Page
IZ^ Transcript, March 21, 1973, 10: 12-1 1: 1 5 a. m. ,
p. 202 120
NOTE: Objection has been raised by Congressman Seiberling that the
first sentence is a conclusion rather than a statement of information
within the Rules of Procedure of the Committee.
(14)
13. jThe testimony of Gray before the Senate Select Committee
establishes that the origin of the theory of Central Intelligence
Agency involvement in the break-in of the DNC was in the FBI and that
Gray communicated the theory to Dean on June 22, 1972. Dean confirmed
that Gray informed him on June 22, 1972 that one of the EBI theories
of the case was that it was a CIA operation and Deaa testified that
he reported this to Haldeman and Ehrlichman on June 23.
Page
3l3^ Gray 9 SSC, 3451 ' 122
J5b| Dean 3 SSC, 943 ;. 123
NOTE: Objection has been raised by Congressimn SeibevZing that the
first sentence is a conclusion rather than a statement of information
within the Rules of Procedure of the Committee,
(15)
14. I Haldeman's testimony before the Senate Select Comnnittee
confirms that Dean reported to him the FBI's concern about
CIA involvement, and that Haldeman in turn reported this to the
President, who ordered Haldeman and Ehrlichman to meet with
the CIA officials to insure that the FBI investigation not expose
any unrelated covert operation of the CIA. The uncertainty
regarding the possibility of uncovering CIA activities was
recognized in a memo dated June 28, 1972 from Helms to
Walters.
Page
i4a7 Haldeman 7 SSC, 2884 . 126
14bj Memo from Director Helms to Deputy
Walters, June 28, 1972 127
(16)
15. The President stated on May 22, 1973, that it
did seem possible to him that because of the involvement of
former CIA personnel, the investigation could lead to the
uncovering of covert CIA operations totally unrelated to the
Watergate break-in. The President stated he was also concerned
that the Watergate investigation might lead to an inquiry into
the activities of the Special Investigations Unit. Gray testified
that on July 6, 1972, the President told him to continue to
conduct his agressive and thorough investigation of the Watergate
eiffair.
Page
15a President's statement. May 22, 1973,
(9 Weekly Compilations of Presidential
Documents 693-697) 130
15b Gray 9 SSC, 3462 135
(17)
16. The President indicated that he was unaware that Gray-
had destroyed documents found in Hunt's safe when told by
Henry Peterson on April 17, 1973.
Page
16a Transcript, April 17, 1973, 2:45-3:49 p.m.,
p. 1098 138
16b Transcript, April 16, 1973, 1:39-3:25 p.m.,
p. 910 139
(18)
17. I Dean did not disclose until November 2, 1973, while being
questioned by attorneys of the Special Prosecutor's office, that
he had personally destroyed documents from Hunt's safe.
Page
""ITaTn Hearing, before the Honorable John J. Sirica
' in U.S. District Court Criminal No. 1827-72,
November 5, 1973 142
(19)
18. The President was unaware prior to March 21, 1973,
that Magruder and Porter perjured themselves to a grand jury.
On April 17, 1973, the President advised Ehrlichman and
Haideman against perjury.
Page
18a Transcript, March 21, 1973, 1 0: 12- 1 1 :55 a. m.
pp. 182-183 146
18b Transcript, April 17, 1973, 12:35-2:20 p. m.
p. 1022
148
NOTE: Objection has been raised by Congresswoman Holtzman and Congress-
man Seiberling that the first sentence is a conclusion rather than a
statement of information within the Rules of Procedure of the Committee.
(20)
19. John Deaa advised the President on March 21, 1973,
of Hunt's demand for approximately $120, 000 for legal fees and
family support. The President explored the option of meeting
Hunt's demands so as to secure the time needed to consider
alternative courses. The President was not concerned with
the possible Watergate related disclosures, but rather which
disclosure of the National Security matters Hunt had been in-
volved in as a member of the Plumbers.
The President advised Dean that the money could not
be paid because it Avould look like a cover-up. At another point
in the conversations the President requested advice as to w^hether
or not the money should be paid. Later the President concludes
that Hunt will blow the whistle no matter what is done for him.
Page
19a Transcript, March 21, 1973,
10:12-11:55 a.m. , p. 224 150
19b Transcript, March 21, 1973,
10:12-11:55 a.m., p. 197 151
19c Transcript, March 21, 1973,
10:12-11:55 a.m., pp. 236-237 152
19d Transcript, March 21, 1973,
10:12-11:55 a.m. , p. 242 154
19e Transcript, March 21, 1973,
10:12-11:55 a.m. , p. 243 155
(21)
20. At the March 21, 1973, meeting the President alter
considering several options seized on the possibility of calling a
new grand jury, thereby delaying Hunt's sentencing and making
the immediate payment unnecessary as a means of buying time.
Not once after this option was explored was there any suggestion
that Hunt's demand be met.
The concluding page of the transcript of the March 21,
1973, morning meeting clearly demonstrates that the President
recognizes that any blackmail and cover-up activities then in
progress could not continue.
^age
20a Transcript, March 21, 1973, 10:12-11:55 a. m, ,
pp. 245-246 158
20b Transcript, March 21, 1973, 10:12-11-55 a.m. ,
p. 249 160
NOTE: OhQection has been raised by Congresswoman Holtzman and Congress-
man Seiberling as to whole statement being a conclusion rather than a
statement of information within the Rules of Procedure of the Committee.
(22)
Zl. Neither of the participants of the March 21, 1973,
morning meeting came away with any opinion that the President
authorized payments to Hunt. Haldeman concluded that the
President rejected payments to Hunt. Dean testified: "The
money matter was left very much hanging at the meeting.
Nothing was resolved. "
Page
21a Transcript, April 17, 1973, 12:35-2:20 p.m.
p. 1034 162
21b Dean 4 SSC, 1423 163
(23)
35-945 O - 74 - 3
22. At the March 21, 1973, morning meeting while discussing
the practicality of getting another grand jury the President told
Dean and Haldeman to get Mitchell to come to Washington, so
that Mitchell could meet with Haldenaan, Ehrlichman and Dean.
Page
22a Transcript, March 21, 1973, 10:12- 1 1:55 a. m. ,
pp. 247-248 -. 166
(24)
23. Haldeman and Dean left the meeting with the President
at approximately 11:55 a.m. on March 21, 1973. Pursuant to
the President's request Haldeman called Mitchell at approximately
12:30 p.m. and requested Mitchell come to Washington. Dean's
testimony confirms this.
Page
23a Haldeman's Telephone Log 170
23b Haldeman, Watergate Grand Jury Testimony.
January 30, 1974, p. 4-7 172
23c Dean 3 SSC, 1000 .. 175
(25)
24. On March 21, 1973 Dean had a telephone conversation with
LaRue concerning Hunt's request for money and Dean suggested LelRuc
call Mitchell. LaRue called Mitchell in the early afternoon of March 21,
1973 and advised Mitchell that he had a request for $75, 000 for Hunt's
legal fees. Mitchell acknowledges that he advised LaRue to pay the money
for attorney fees. During the March 21, 1973 late afternoon meeting with
the President, Dean denied that he had spoken to either LaRue or Mitchell,
when in fact he had spoken to both.
P^ge
24a ] Dean, Watergate Grand Jury Testimony,
' February 14, 1974, 16 178
24bl LaRue, Watergate Grand Jury Testimony,
February 13, 1974, 7-10 179
l24cj Mitchell, 4 SSC, 1630, 1631 183
24^ Transcript, March 21, 1973, 5:20-6:01 p. m.
p. 253 185
(26)
25. [ Having received information on March 21, 1973 of possible
obstruction of justice having taken place following the break-in of the
DNC, the President promptly undertook an investigation into the facts.
The record discloses that the President started his investigation the
night of his meeting with Dean on March 21st, as confirmed by Dean
in his conversation with the President on April 16, 1973. At the
meeting with Mitchell and the others on the afternoon of March 22nd,
the President instructed Dean to prepare a written report of his earlier
oral disclosures.
Page
25a Transcript, April 16, 1973 10:00-10:40 p. 801... 188
25b Transcript, March 22, 1973, 1:57-3:43 p.m. ,
p. 282-283 189
25c Transcript, ,
p. 309 1^1
(27)
26. I Although Dean was instructed to go to Camp David and write
a report on March 22, 1973 by the President, Dean denied this and later
testified before the Senate Select Committee that he was never requested
to write a report until Haldeman called him after he arrived at Camp
David.
Page
26a Dean 4 SSC 1385 194
(28)
27. i Just six days after Dean's disclosures, on March 27, 1973,
the President met with Ehrlichman and Haldeman to discuss the evidence
thus far developed and how best to proceed. Again the President stated
his resolve that White House officials should appear before the grand
jury. They confirmed to the President, as Dean had, that no one at
the White House had prior knowledge of the Watergate break-in.
Ehrlichman told the President that there wasn't "a scintilla of a hint '
that Dean knew about this. " The President asked about the possibility
of Colson having prior knowledge and Ehrlichman stated that Colson's
response was "of total surprise. . . He was totally non-plussed, as the
rest of us. "
Page
27ar]Transcript, March 27, 1973, 1 1:10- 1 :30 p. m. p. 315... 196
-^^Tb} Transcript, " " " " " " p. 329... 197
I'lfc^ " " " " " " " p. 331... 198
(29)
28. On April 8, 1973, the President met with Ehrlichman
and Haldeman on board Air Force One and directed them to meet
with Dean and urge him to go to the grand jury. Haldeman and
Ehrlichman met with Dean that afternoon and at 7:33 p.m.
Ehrlichman reported to the President that Dean indicated he would
agree to go before the grand jury.
Page
ZSa 7 SSC 2757 200
TS'B-' Transcript, April 8, 1973, 7:33-7:37 p. m. , p. 401.. 201
(30)
29. Dean did in fact communicate his intention to testify
before the grand jury to Mitchell and Magruder and told them he
would not agree to support Magruder' s previous testimony to the
grand jury. Thereafter on. April 14, 1973, Magruder appeared
before the U. S. Attorneys and cooperated with them fully.
Page
29a Dean 3 SSC, 1006 204
29b Magruder 2 SSC, 808 205
(31)
30. On April 14, 1973, the President again met with
Ehrlichman and Haldeman to review the results of three weeks
investigation and to determine the future course of action. Based
on Ehrlichnian's report, the President concluded Mitchell should
go before a grand jury. The President instructed Ehrlichman to
see Magruder and tell him that he did not serve the President
by remaining silent. The President told Ehrlichman that when
he met with Mitchell to advise him that "the President has said
^et the chips fall where they may. He will not furnish cover for
anybody. " The President told Ehrlichman to tell Magruder to
purge himself and tell this whole story.
30a Transcript, April 14, 1973,
8:55-11:31 a.m., p. 445-. .
Page
208
30b Transcript, April 14, 1973,
8:55-11:31 a.m., p. 478 209
30c Transcript, April 14, 1973,
8:55-11:31 a.m., p. 507 210
(32)
31. On April 15, 1973, the President met with Attorney
General Kleindienst. They considered who should be in charge
of the continuing investigation. The President met with Assistant
Attorney General Petersen on the afternoon of April 15, 1973,
in his EOB office. At this meeting Petersen indicated there
was no criminal case on Haldeman and Ehrlichman at this time.
Having been told Liddy would not talk unless authorized by
"higher authority" the President instructed Petersen to tell
Liddy's counsel the President would confirm his urging of Liddy
to cooperate.
Page
31a Transcript, April 15, 1973, 1:12-2:22 p.m.,
P. 742 212
31b Petersen 9 SSC 3632 , 3875 , 3876 2
13
31c Transcript, April 15, 1973, 8:25-8:26 p.m.
P- 769 216
(33)
32. The President met with Dean on the morning of
April 16, 1973, discussed with Dean his resignation, and advised
him to be totally truthful in his explanations. The President asked
Dean not to lie about the President either.
At this same meeting Dean explained to the President
that O'Brien had been the one who relayed Hunt's demand, that Dean
had infornned Ehrlichman and Ehrlichman advised Dean to inform
Mitchell which Dean did. Dean told the President that all along
he had tried to make sure that anything he passed to the President
didn't cause the President any personal problems.
Page
32a Transcript, April 16, 1973, 10:00- 10:40 a. m. ,
p. 805 218
32b Transcript, April 16, 1973, 10:00- 10:40 a. m. ,
p. 810 219
32c Transcript, April I6, 1073, 10:00- 10:40 a. m. ,
pp. 797-799 220
(34)
33. On April 27, Petersen reported to the President that
Dean's lawyer was threatening that unless Dean got immunity,
they would bring "the President in- -not this case but in other
things." The President told Petersen to use immunity if he needed
to get the facts, but there would be no blackmail. It w^as not until
June 25, 1973, while testifying before the Senate Select Committee
that Dean stated the President had prior knowledge of the cover-up.
Page
33a Transcript, April 27, 1973,
5:37-5:43 p.m. , p. 1261, 1276
224
(35)
34. On March 1, 19*74, a federal grand jury returned an
indictment against seven individuals charging all defendants with
one count of conspiracy in violation of Title 18 U.S.C. Sec. 371
and charging some of the defendants with additional charges of
perjury, making false declarations to a grand jury or court,
making false statements to agents of the FBI and obstruction of
justice.
Page
34a Indictment, U. S. District Court for D. C. ,
U. S. V. John N. Mitchell et al. , Cr. 74-110,
March 1, 1974, p. 1-15 228
(36)
STATEMENT OF INFORMATION
AND
SUPPORTING EVIDENCE
SUBMITTED ON BEHALF
OF THE PRESIDENT
EVENTS POLLCWING
THE WATERGATE BREAK- IN
June 19, 1972 -- March 1, 1974
(37)
1. On Monday, June 19, 1972, two days af':cr the break-in
of the Democratic National Connmittee Headquarters, Dean contacted
Liddy and Liddy told Dean the men caught in the Democratic National
Committee Headquarters were Liddy' s men and that Magruder had
pushed him to do it. Dean asked Liddy if anyone from the White House
was involved and Liddy told Dean no.
Page
la Dean 3 SSC 933 40
(39)
35-945 O - 74 - 4
la. JOHN DEAN TESTIMONY^ JUNE 25, 1972, 3 SSC 933
933
fensive and stated that he was merely on his payroll as a consultant
because Ehrlichman had so requested. He asked me to determine if
Hunt was still on his payroll and I said I would check. Colson also
expressed concern over the contents of Hunt's safe. Several weeks
later — probably 4 or 5 — I learned from Paul O'Brien, who was
representing the reelection committee, that he had learned from Mr.
Hunt's attorney, Mr. William Bittman, that Hunt and Colson spoke
on the telephone over the weekend of June 17-18, and that Hunt had
told Colson to get the materials out of his — Hunt's— olHce safe.
Mr. Hugh Sloan called me to tell me he was worried. At that time
I knew of no reason why Mr. Sloan should be worried so I told him
not to worry. He told me that he would like to meet with me and I
told him that I was trying to find out what had happened and re-
quested we meet in a few days. I do not recall the precise date we did
meet.
I next contacted Liddy and asked him to meet with me. He said he
would come to- my oiBce. As he came into the office I was on my way
out. I suggested we take a walk. It was shortly before noon and we
walked down 17th Street toward the Corcoran Gallery.
I will try to reconstruct the convei-sation to the best of my memory.
While I cannot recall every detail, I do indeed recall the major items
we discussed. ^ -
Mr. Liddy told me that the men who had been arrested in the DXC
were his men and he expressed concern about them. I asked him why
he had men in the DNC and he told me that ]SIagruder had pushed
him' into doing it. He told me that he had not wanted to do it, but
ilagruder had complained about the fact that they were not getting
good information from a bug they had placed in the DXC sometime
earlier. He then explained something about the steel structure of the
Watergate Office Building that was inhibiting transmission of the bug
and that they had gone into the building to correct this problem. He
said that he had reported to Magruder that during the earlier entry
of the DXC offices they had seen documents — ^which I believe he told
me were either Government documents or classified documents — and
Magruder had told him to make copies of those documents.
Liddy was very apologetic for the fact that they had been caught and
that Mr. McCord was involved. He told me that he had used Mr.
McCord only because Magruder hacTcut his budget so bajJly. I asked
him why one of the men had a check from ^Ir. Howard Hunt and he
told me that these men were friends of Hunt and Hunt had put him
in touch with them. I do not recall Liddy discussing any further in-
volvement of Hunt, other than Hunt's putting him in touch with the
Cubans. I asked him if anyone from the TVTiite House was involved
and he told me no.
As the conversation ended he again expressed his apoloory and his
concern about the men in jail. I told him I couldn't help and he said he
understood. He also told me that he was a soldier and would never talk.
He said if anvone wished to shoot him on the street, he was ready.
As we parted I said I would be unable to discuss this with him further.
He said he imderstood and I returned to m v office.
After returning to mv office I arranged a meeting with Ehrlichman
in his office for mid-aftemoon. Gordon Strachan came to mv office
shortly after I had met with Liddy. Strachan told me that he had been
(40)
2. Joha Dean testified that on June 18, 1972, one clay
after the break-in of the Democratic National Committee Headquarters,
"the cover-up was already in effect, in being." Dean testified he
was in on the cover-up from the very beginning. Dean concurred
with Senator Gurney that the cover-up "grev/ like Topsy, and Dean
was a part of it. " When questioned if he advised the President
of what was going on. Dean responded that the first time he ever
talked to the President was September 15, 1972, some three months
later.
Page
2a Dean 4 SSC, 1357 42
Z'b Dean 3 SSC, 1026 43
(41)
2a. JOHN DEAN TESTIMONY^ JUNE 27^ I97Z, 4 SSC IS 57
1357
"Would you tell how you inherited the coverup ?
Mr. De.\x. I didn't hear the Senator. Inherited ?
Senator Gtjrxey. You said yesterday in response to questioning
from Mr. Dash, you said that you inherited the coverup of Watergate.
Mr. Deax. I had heard or inherited (
Senator Gurnxy. I understand inherited.
Mr. Deax. That is correct. —
When I came, back to the office on the 18th and talked to
Mr. Strachan, I realized that the coverup was already in effect, in
being, and I realized that when Mr. Strachan told me of the documents
that he had destroyed and Mr. Haldeman's instruction, that there cer-
tainly wasn't goin^ to be a revelation of the White House involvement
in the fliatter. I didn't at that point in time know the potentials of the
White HouSB involvement.
-Senator Gurnet. Was not one of the first meetings of the coverup
held in John Mitchell's apartment on the 19th of June ?
Mr. Deax. Senator, I would say that the day of, to my knowledge,
the day of the 19th at the White House was a very busy day. That
the calls I received from Mr. Ehrlichman, from Mr. Colson, the meet-
ings I had with Mr. Ehrlichman and then again later with Mr; Colson
about the, safe were long before I went to the meeting at Mr. Mitchell's
apartment, which I do not recall was on the 19th or 20th. I do recall a
meeting in Mr. \Mitcheirs office, but I do not recall specifically which
day it was, I recaU arriving late at the meeting, and I cannot recall
with any specificity any of the discussions at the meeting.
Senator Gurnttt. Well, what you are saying is then that these several
phone calls you had with all of these people really had to do with at
least the beginnings of the coverup, is that right?
Mr. Deax. That is correct.
Senator Gtjrxey. Well, yoTi were in on it from the beginning, were
you not?
Mr. Deax. Yes, sir.
Senator Guexet: Yow really did not inherit anything. You were in
on the sortof hatching of it, were you not ? _
Mr. Deax. Senator, I might explain that what often happened in my
relationship with my superiors at the Wliite House, and I think I
alluded to this yesterday, is that others would set the policy, for ex-
ample, with the Cail-ey case or the Lithuanian defector, how to deal
with it,^wha.twas to be done.
Senator GtnRXET. WTio set the policy on the coverup ?
Mr. Deax^. I would say the policy was just — I do not think it was a
policy set. There was just no alternative at that point in time.
Senator Gubney. It sort of grew like Topsy, and you were a part
of it, is that not right ?
Mr. Deax. That is correct.
Senator Gtthney. Now. since this thing started out with such a flurry
and a spate of phone calls and meetings between everybody, did you
advise the President of what was going on ?
Mr. Deax. Senator, the first time I ever talked to the President was
on September 15. There was one occasion that I recall before Septem-
ber 15, which was in late August, to the best of my recollection, arm
that certainly was not an occasion to talk to the President about any-
thing because his former law partners were in the office, Mrs. Nixon
was in the office, there were several notaries or one notary there, some
(42)
2b. JOHN DEAN TESTIMONY^ JUNE 26, 2973, 3 SSC 1026
1026
Mr. Deax. Well, you would have to <;o back into the time sequence
again. There was a request for any and all available cash, far l>efore
they started speakintr of the $3">0,600 cash fund, when Mr. Kalmbach
was collecting the cash. ^Nlr. Stans had some money that was used. They
were looking anywhere they could look to find any available cash.
It was at this point, I knew that I had the $15.-200 in my^afe and
I decided at that time that I was not going to let that money be used
for that purpose, because I did not want to become further involved
in that particular aspect of the ooverup.
Mr. D.vsH. And you made that decision despite the fact that you had
been a key figure in getting 'Sir. Kalmbach involved in the original
payoff?
Mr. Dean. That is correct.
"Mr. Dash. Now, in your statement, you have described a number of
meetings and activities occurring immediately after the arrest of the
CRP burglars in the Democratic National Committee headquarters
in the "Watergate on June 17, 1972, and continuing for several months
thereafter, involving such persons as Mr. Haldeman, ^Ir. Ehrlichman,
Mr. Colson, Mr. Mardian, Mr. Mitchell, ^Ir. LaRue, Mr. !Magruder,
yourself, and others.
Isn't it your testimony that this fluVry of activity represented a
massive coverup operation to prevent the prosecutors, the FBI, and
the public from learning of the involvement of high Wliite House or
CRP officials, either in the Watergate break-in or embarrassing earlier
illegal activities of a similar nature such as the Ellsberg break-in?
Mr. Deax. That is correct, Mr. Dash.
Mr. Dash. And did not this coverup require a number of strategies
such as perjury and subordination of periury of Magnider, Porter,
and others, and the undermining of the judicial process and payoffs to
indicted defendants to maintain their silence, thereby limiting the
FBI inquiry so they would not stumble on other illegal intelligence
activities of the White House ?
Mr. DEAX.-That is correct.
Mr. "Dash. And is it not true that you played a role in all of thesft
coverup activities ?
Mr. Deax. That is correct.
Mr. Dash. Did you do these things on your own initiative, ^fr. Dean,
or at the direction of anybody else ?
"Mr. De-vx. I would have to say that to describe it, I inherited a
situation. The coverup was in operation when I returned to my office
on Monday, the ninth, and it just became the instant way of life at
that point in time and I participated in that and engaged in these
activities along with the others.
I was taking instructions-
Mr. Dash. From whom were you taking instructions ?
Mr. Deax. I was taking instructions from ^Tr. Haldeman and ^^r.
Ehrlichman, I was taking instructions and suggestions from Mr. ^fit-
chell and ^Ir. ^Tardian.
I was a conveyor of messages back and forth between each group
and at times. I was makinir surriiestions myself.
Mr. Dash. ^[r. Dean, I don't think the record is clear from the state-
ment. You held an impressive title. Counsel to the President, and I
understand had quite a big office. But could you tell us just what in
(43)
3. Dean did not meet with the President until approxinnateiy
three months after the Dcn-iocratic National Committee Headquarters
break-in. The allegation that Dean informed the President of an
illegal cover-up on September 15, 1972, is based exclusively on
the testiinony of Dean. In testimony before the Senate Select
Committee, Dean stated he was "certain after the September
fifteenth ineeting that the President was fully aware of the cover-up."
However, in answering questions of Senator Baker^ he modified this
by agreeing that it was an "inference" of his. Later Dean admitted
he had no personal know^ledge that the President knew on September
fifteenth about a cover-up of Watergate.
Page
3a Dean 4 SSC 1435 45
3b Dean 4 SSC 1475 47
3c Dean 4 SSC 1482 48
(45)
3a. JOHN DEAN TESTIMONY^ JUNE 28, 1973^ 4 SSC 1435
1435
Senator Ixouye. Why, sir ?
IMr. Deax. I thought they were ver}- incriminating to the President
of the United States.
Senator Inouyi:. Mr. Chairman, this is not part of the questioning,
but could you advise this committee what sort of information yoir
received?
Mr. Dean. Well, I have recalled most of it in my testimony regard-
ing the conversation on clemency for Mr. Hunt, the million dollar
conversation, when the President told me that it would be no problem
to raise $1 million on the 13th. I did not think documents like this
shQuld be around the "White House, because the White House had a
similar joroblem as far as information getting out.
Senator IxotnrE. Did you discuss this September 15 meeting with
anyone at that time or at any time since ?
Mr. Dean. I believe when I came out of the meeting, I told Mr.
Fielding of my office that I had spent about 30 or 40 minutes with the
President and Mr. Fielding did not have full knowledge of my activi-
ties at this time. But I told him that fact that the meeting had oc-
curred and that the President seemed very pleased with the job that
I had been doing thus far. I think Mr. Fielding probably had a general
awareness about the specifics of the fact that I was involved in assisting
with the coverup.
Senator Ixouye. You have indicated in your testimony that you
were certain after the September 15 meeting that the President was
fiilly aware of the covenip, did you not?
Mr., Dean. Yes, sir. . • __
Senator Inoute. And you further testified that you believed that
you had on your spurs in handling the coverup by February 27, when
you were told by the President that you would report to him directly.
Is that not>correct?
Mr. De.vn. I do not believe I used the word "my spurs." I think that
was another characterization. I said I thought I had earned my stripes.
Senator Inoute. If that was the case, why did you feel it necessary
on February 27 to tell the President that you had been participating
-in a coverup and, therefore, might be chargeable with obstruction of
justice?
Mr. De-IiN. Because on the preceding day, he had indicated to me
that Mr.' Haldeman and Mr. Ehrlicliman were principals and I was
wrestling with what he meant by that. I wanted him to know that I
felt also that I was a principal. So I wanted him to be able to assess
whether I could be objective in reporting directly to him on the matter.
Senator Inoitte. If the President was aware on September 15 of the
coverup, was he not aware that you were implicated also?
Mr. Dean. I would think so, but I did not understand his remark
at the time.
' Senator Inouye. Then, why was it necessary on February 27 to ad-
vise him that you were guilty of obstruction of justice ?
Mr. Dean. "Because as I said, Senator, when he mentioned the fact
that ]Mr. Elirlichman and Mr. Haldeman were principals, I did not
understand what he meant. I wanted tc^»make it clear to him that I felt
I also had legal problems and I had been in\oh'ed in obstruction of,
justice. Any time I was in the oval office, I did not want to withhold
anything from the President at any time and felt* that a-nj' informa-
(46)
Sb. JOHN DEAN TESTIMONY^ JUNE 28, 197Z, -4 SSC 1475
1475
Mr. Deax. The call came to my secretary, as I recall, and she said,
"You have been asked to come to the oval office" so I do not recall who
made the call but it was one of the secretaries who conveyed those types
of messages.
Senator Baker. All right, go ahead, sir.
Mr. Deax. Wlien I entered the office I can recall that — you have ]?een
in the office, you know the way there are two chairs at the side of the
President's desk.
Senator Baker. You are speaking of the oval office?
Mr. Deax. Of the oval office. As you face the President on the left-
hand chair Mr. Haldeman was sitting and they had obviously been
immersed in a convei-sation and the President asked me to come in and
I stood there for a moment.
He said, ''Sit down" and I sat on a chair on the other side.
Senator Baker. You sat in the riglit-hand chair ?
Mr. Deax. I sat on the right-liand chair.
Senator Baker. That is the one he usually says no to, but go ahead.
Mr. Deax. I was unaware of that. [Laughter.]"
, Senator Baker. Go ahead, Mr. Dean.
Mr. Deax. As I tried to describe in my statement, the reception was
ver}' warm and very cordial. There was some preliminary pleasantries,
arjd then the next thing that I recall the President very clearly saying
to me is that he had been told by Mr. Haldeman that he had been kept
posted or made aware of my handling of the various aspects of the
VVatergate case and the fact that the case, you know, the indictments
had now been handed down, no one in the White House had been
indicted, they had stopped at Liddy.
Senator Baker. Stop, stop, stop just for one second. Let's examine
those particular words just for a second.
That no one in the AVTiite House had been indicted. Is that as near
to the exact language — I don't know so I am not laying a trap for you,
I just want to know.
Mr. Deax. Yes, there was a reference to the fact the indictments had
been handed down and it was quite obvious that no one in the White
House had been indicted on the indictments that had been handed
down.
Senator Baker. Did he say that, though ?
Mr. Deax. Did he sa}' that no one in the White House had been
handed down ? I can't recall it. I can recall a reference to the fact that
the indictments were now handed down and he was aware of that and
the status of the indictments and expressed what to me was a pleasure
to the fact that it had stopped at ^Mr. Liddy.
Senator Baker. Tell me what he said.
Mr. Deax. Well, as I say, he told me I had done a good job
Senator Baker. Xo, let's talk about the pleasure. He expressed
pleasure the indictments had stopped at ^Ir. Liddy.
Can you just for the purposes of our information tell me the language
that he used ? ~~~
^Ir. Dean. Senator, let me make it verj' clear the pleasure that it had
stopped there is an info re Mr"^ of mine based on. as I told Senator
Gurney yesterday, the impression I had as a result of the, of his, com-
plimenting me. ___
(4Y)
gg. JOHN DEAN TESTIMONY, JUNE 28, 197Z, 4 SSC 1482
1482
Senator Baker. But in an effort to summarize it and, believe me, I
am not trj'ing to distort the meaning of your testimony by summary,
but, in effect, you drew inferences from the totality of this conversation
and the circumstances and relationships as you knew it, you drew
inferences from that that led you to believe that on Septem^ber 15
the President knew something about at least the efforts to counter
the Watergate and possibly, in fact, about Watergate itself.
iSIr. Dean. That is correct.
Senator Baker. But there is no direct statement about Watergate,
CRP involvement, the President's knowledge of it, or the coverup —
there is no category 1 information about that?
Mr. Dean. Other than as I have recited and I have chosen not to
place interpretations on these, Senator.
^Senator Baker. Thank you, Mr. Dean.
I think that that information is very useful, then. You understand,
Mr. Dean, that in the course of things, we are going to explain fur-
ther the content of that meeting and the perceptions that the other
parties had of that meeting.
. Mr. Dean. I understand.
Senator Baker. As you know, Mr. Haldeman will be a witness
before this committee. The only other person present was the Presi-
'dent. I am not prepared to say at this point how we may be able to
gain access to the President's knowledge and perception of that meet-
ing. But in a three-way meeting, I think it is important to this com-
mittee that we hfive all the information we can get. So the information
you hsive juft given me in rather good detail will now be structured
alcir^isiu'-; with the rest of the record to test against the testimony of
JUT, Haldeman and hopefully against statements by the President,
in -whatever^ manner that can be arranged.
Now, -what is the time of your next meeting with the President?
Mr. .Dean. On this subject?
Senator Baker. Yes, sir.
'ifr. Dean. THere were certain events that led up to my nert meet-
ing and they -were the events which occurred at La Costa, in which I,
or following La Costa, in which I was requested by Mr. Haldeman
when I returned from Florida — I had gone from California to Florida
and had spent a week or so. just about a week, in Florida and when
I returned on the 19th or 20th, ]Mr. Haldeman asked me to prepare
^n a'gerida. I think that that agenda is a rather important document
along the line of questioning you are asking.
Senator Baker. I would like to go into that.
Before you do, let me reiterate, the focus of my inquiry is on what
did the President know
Mr. Dean. As I say, this asrenda went directlv to the President.
Senator Bakf.r fcontinuing]. And when did he know it.
Mr. Dean. That is correct.
Senator Baker. So as you go into your testimonv and as you refer
to the several documents that I believe vou have before vou. trv to
keen in mind that T am not at this moment talkinar about other matters
and details. I am not talking about Ellsberg at this point, or the enemy
list. I am talking about what the President knew. So tell me what
(48)
4. On May 22, 1973, the President stated that the bugging,
and burglary of the Democratic National Committee was a complete
surprise and that he had no prior knowledge that persons
associated with his campaign had planned such activities. On
March 21, 1973, John Dean told the President that no one at the
White House knew of the plans to break in the Democratic
National Coinmittee.
Page
_4a_ President's statement, May 22, 1973
(9 Weekly Compilations of Presidential Documents
696) 50
-:1° , Transcript, March 21, 1973, 1 0: 1 2- 1 1 :55 a . m.
p. 183 51
1 / Refereiicc to transcripts arc to submission of Recorded
Presrdential Conversations of April 30, 1974.
(49)
4a.
^^^ENT NIXON STA^m^T. MAY 22, 1973, 9 mESimmlM^WCmmi-^
PRESIDENTIAL DOCUMENTS: RICHARD NIXON, 1973
records having been removed with the change of adminis-
trations) and which bore directly on the negotiations then
'n progress. Additional assignments included tracing down
other national securitv leaks, including one that seriously
compromised the U.S. negotiating position in the SALT
talks.
The work of the unit tapered off around the end of
1971. The nature of its work was such that it involved
matters that, from a national security standpoint, were
highly sensitive then and remain so today.
TTiese intelligence activities had no connection with the
break-in of the Democratic headquarters, or the aftermath.
I considered it my responsibility to see that the Water-
gate investigation did not impinge adversely up<jn the na-
tional security area. For example, on April 18, 1973,
vvhcn I learned that Mr. Kunt, a former member of the
Special Investigations Unit at the White House, was to
be questioned by the U.S. Attorney, I directed As,sistant
Attorney General Petersen to pursue every issue Involving
Watergate but to confine his investigation to Watergate
and related matters and to stay out of national security
matters. Subsequently, on April 25, 1973, Attorney Gen-
eral Kleindienst informed me that because the Govern-
ment had clear evidence that Mr. Hunt was involved in
the break-in of the office of the psychiatrist who had
treated Mr. Ellsberg, he, the Attorney General, believed
that despite the fact that no evidence had been obtained
i.m Hunt's acts, a report should nevertheless be made to
the court trying the Ellsberg case. I concurred, and di-
rected thai the information be transmitted to Judge Byrne
inr.inediately.
Watergate ______«.^
The burglary and bugging of the Democratic National
Committee headquarters came as a complete surprise to
me. I had no inkling that any such illegal activities had
been planned by persons associated with my cam.paJgn;
if I had known, I would not have permitted it. My im-
mediate reaction was that those .guilty shoiHd be brought
to justice, and, with the five burglars themselves already
in custody, I assumed that they would be.
Within a few days, however, I was advised that there
was a possibility of CIA involvement in some way.
It did seem to me possible that, because of the involve-
ment of former CLA personnel, and because of .some of
their apparent associations, the investigation could lead
to the uncovering of covert CIA operations totally unre-
lated to the Watergate break-in.
In addition, by this time, the name of Mr. Hunt had
su!-faccd in connection with ^Vatergate, and I was alerted
to the fact that he had previously been a member of the
S'-"-!al Investigations Unit in the ^Vhite House. There-
f , I was also concerned that the \Va'crgate in\'e^tigation
might well lead to an Inquiry into the activities of the
Special Investigation-s Unit it.self.
In this area, I felt it was important to avoid disclosure
of the details of the national security matters with which
the group was concerned. I knew that once the existence
of the group became known, it would lead inexorably to
a discussion of these matters, some of which remain, even
today, highly sensitive.
I wanted justice done with regard to ^Vatergatc; but in
the scale of national priorities with which I had to deal —
and not at that time having any idea of the extent of
political abuse which Watergate reflected — I also had to
be deeply concerned with ensuring that neither the covert
operations of the CIA nor the operations of the Special
Investigations Unit should be compromised. Tlicrefore,
I instructed Mr. Haldeman and Mr. Ehrhchman to ensure
that the investigation of the break-in not expose either an
unrelated covert operation of the CIA or the activities of
the White House investigations unit — and to see that this
was personally coordinated between General Walters, the
Deputy Director of the CIA, and Mr. Gray of the FBI.
It was certainly not my intent, nor my wish, that the in-
vestigation of the \Vatergate break-in or of related acts
be impeded in any way.
On July 6, 1972, I telephoned the .Acting Director of
the FBI, L. Patrick Gray, to congratulate him on his
successful handling of the hijacking of a Pacific Southwest
Airlines plane the previous day. During the conversation
Mr. Gray discussed with me the progress of the \vater-
gate investigation, and I asked him whether he had talked
with General Walters. Mr. Gray said that he had, and that
General \Valters had assured him that the CIA was not
involved. In the di5..ussion, Mr. Gray suggested that the
matter of Watergate might lead higher. I told him to press
ahead with his investigation.
It now seems that later, through whatever complex of
indi\idual motives and possible misunderstandings, there
were apparently wide-ranging efTorts to limit the in\"cs-
tigation or to conceal the possible involvement of members
of the Administration and the campaign committee.
I was not aware of any such efforts at the time. Neither,
until after I began my own investigation, was I aware of
any fundraising for defendants convicted of the break-in
at Democratic headquarters, much less authorize any such
fundraising. Nor did I authorize any offer of cxerutix'e
clemency for any of the defendants.
In the weeks and months that followed \V'atergatc, I
asked for, and received, repeated assurances that Mr.
Dean's own investigation (which included reviewing files
and sitting in on FBI interviews with White House per-
sonnel) had cleared everyone then employed by the White
House of involvement.
In summ.ar)', then:
(1) I had no prior knowledge of the Watergate bug-
ging operation, or of any illcg.U sunciil.mce ai.tiv:tics !or
puliti'-al pr.rposes.
(2) Long prior to the 1972 campaign, I did ret in
motion certain internal security measures, including legal
(50)
4b. WHITE HOUSE TRANSCRIPT, MARCH 21, 1972, 10:12 - 11:55 A.M.
MEETING, 183.
1G3
were going to be confronted with and Liddy was charged with
doing this. We had no knowledge that he was going to bug
the DNC.
The point is, that is not true?
That's right. _-.«^
Magruder did know it was going to take place?
Magruder gave the instructions to be back in the DNC.
He did?
Yes.
You know that?
Yes.
I see. O.K.
I honestly believe that no one over here knew that. I know
that as God is my maker, I had no knowledge that they were
going to do this.
P Bob didn't either, or wouldn't have known that either. You
are. not the issue involved. Had Bob known, he would be.
D Bob — I don't believe specifically knew that they were
going in there.
P I don't think so.
D I don't think he did. I think he knew that there was a
capacity to do this but he was not given the specific
direction.
P Did Strachan know?
(51)
5. H. R, Haldeman and John Ehrlichman testified before
the Senate Select Committee that they did not believe the
President had prior knowledge of the break in plans. On
March 21, 1973, John Ehrlichman told the President that, on
the basis of information he had, no one in the White House had
been involved, had notice, had knowledge, participated nor
aided or abetted in any way in the Democratic National Committee
burglary .
Page
5a Haldeman 7 SSC, 2883 54
5b Ehrlichman 6 SSC, 2769 55
5c Transcript, March 21, 1973, 5:20-6:01 p.m.
p. 269 56
(53)
5a. H. R. HALDEMAN TESTIMONl, JULY SO, 1973, 7 SSC 2883
2883
been involved in Watergate. I was nob at all surprised to hear the
President say thi^ at the press conference since it was thoroughly
consistent with everything that Dean had told nie, and I, therefore,
find it hard to understand why ilr. Dean now professes to liave had
sucli great surprise when he heard this statement.
COVERUP
In these hearings and in the general discussion of "Watergate, the
word "coverup" lias come to have a broad and very ill-defined mean-
ing. As John Dean said, the coverup had a broad range. Anything
that might cause a problem came within the coverup.
Definition by usage has now come to connote illegal or improper
activities — although some steps were taken to contain the Watergate
case in several perfectly legal and proper aspects.
One, as the President has stated, was to avoid the Watergate investi-
gation possibly going beyond the facts of the Watergate affair itself
and into national security activities totally unrelated to Watergate.
Another was to avoid or at least reduce adverse political and public-
ity fallout from false charges, hear&iy, and so on, arising from various
activities in connection with Watergate, such as the Justice Depart-
ment investigation, the Democratic National Committee suit, the
Conimon Cause suit, the Patman hearings, and the Ervin committee
hearings.
A third was concern for distortion or fabrication of facts in the heat
of a political campaign that would unjustly condemn the innocent or
prevent discovery of the guilty.
The containment effort, as I would use the term, did not contemplate
or involve any acts in obstruction of justice. To the contrary-, while
hoping to contain the Watergate inquiry to the facts of Wa"tergate,
there was a concurrent effort to try- to get the true facts of Watergate
and get them out to the public. The President frequently cautioned
against any coverup of Watergate or even the appearance of a cover-
up.
On the basis of testimony now before this committee, it appears
that there also was an effort to cover up, as well as to contain. This
^ coverup appears to have involved illegal and improper activities,
such as perjury, payments to defendants for their silence, promises
of Executive clemency, destruction of e^ddence, and other acts in an
effort to conceal the truth regarding the planning and commission
of crimes at the Watergate.
The critical question then becomes the determination of who com-
mitted these acts, who directed them, who was aware of them. —
I committed no such acts and directed no such acts and T was aware
of no such acts imtil ^March of this year, when the President intensified
his personal investigation into the' facts of the Watergate. I am con-
vinced that the President had no awareness of any such acts imtil
March of this year.
^ The question is asked :-"How could the President not have known?"'
Very easily. Reverse the question. How could the President have
known?
Only if he were directly involved himself or if he were told by
someone who was either directly involved or had knowledge. The fact
(54)
5b. JOHN EHHLICHMAN TESTIMONY, JULY 27, 197Z, 6 SSC 2769
Mr. Ehrucitmak. Li that I think you will see that it's niy conclusion
that he acted in the best of faith tliinking that lie was simply engaged
in raising money for tlie defense fund purposes that he has testified to.
'Senator Montoya. All right. Then liow many interviews did you
conduct as a result of 3our being commissioned by the President to go
into this?
Mr. Ehrlichmax. "Well, let me refer to my list again. Ten.
Senator ^Io.vtoya. Ten?
INlr. Ehrlichiian. Yes, sir.
Senator Montoya. How long did it take you to conduct these
interviews?
Mr. Ehrlichmax. Well, I did this in the period between April 5
and April 14.
. Senator iMontoya. Tlie President indicated that he had also
Mr. Ehrmchhax. Excuse me, I am sorry, Senator, April 15, I beg
your pardon because I saw Mr. Strachan at 9 o'clock on Sunday
morning the 15th.
Senator Montoya. All right.
Now^, what was this statement of the President all about when he
stated that on March 21 as a result of serious charges ''which came to
my attention, some of which were publicly reported, I began intensive
new inquiries into this whole matter."
Wliat did he mean by that ?
Mr. EHRLicHiiAN. Well, I think what he meant by that was the series
of events starting March "21 and culminating April 17 which would
hiiVe been his conversation with ]Mr. Dean on the 21st; the McCord
letter to Judge Sirica on what, the 23d or whatever it was; his sending
Mr. Dean to Camp David to write out his statement ; IMr. Dean's return
without the statement; his turning the investigation over, taking it
from Mr. Dean, his turning the inquiry over to me; my efforts to talk
to witnesses through this time; the parallel efforts, and I don't mean
to in any way diminish the efforts of the investigators in the Depart-
ment of Justice and in the prosecutor's office who were doing an ex-
traordinarily effective job light at this time.
You see, when I talked to ifr. Magruder. for instance, he had already
been to see the U.S. attorney and told him everything as a result of
their efforts. So these were all parallel efforts going on and there was a
lot of reporting. Tlie President had his meeting with the Attorney
General and Mr. Petersen on that Sunday, and they compared notes
as to all of these investigations, and then this all came to a head on
that following Tuesday. — —
Senator jNIontoya. Would you then say that up until IMarch you were
convinced, and the President was convinced in the White House that
there was no White House involvement?
Mr. Ehrlichman. Yes, sir.
Senator iNIontoya. You were convinced up to that time?
Mr. Ehrlichman. Yes, sir, and I was saying that all across the
country because I believed it.
Senator Montoya. And you kept saying this to the President on the
basis of information which you were receiving from Mr. Dean and
others?
Mr. Ehrlichman. In the best of faith, yes, sir.
(55)
35-945 O - 74 - 5
5o. WHITE HOUSE TRANSCRIPT, MARCH 21, 197Z, 5:20 - 6:01 P.M. MEETING, 269
2S9
20
Right, right. However in terms of this, what about a
solution? We are dairmed by the courts before Ervin even
gets started.
E The only thing we can say is that v/e have investigated it
backwards and forwards in the White House , and have been
satisfied on the basis of the report we had that nobody in
the White House has been involved in a burglary, nobody
had notice of it, knowledge of it, participated in the
planning, or aided or abetted it in any way. And it. happens
to be true as for that transaction.
P John , you don ' t think that is enough?
D No, Mr. President.
E Let's try another concomitant to that. Supposing Mitchell
were to step out on that same day to say, "I have been
doing some investigation at 17 01 and I find — so and so
and so and so."
P Such as what?
E I don't know what he would say, but that he wanted to be
some kind of a spokesman for 1701.
P VThat the hell does one disclose that isn't doing to blow
something? I don't have any time. I am sorry. I have to
leave. Well, good-bye. You meet what time tomorrow?
H I am not sure. In the morning probably.
(56)
6. John Mitchell testified bcfoi-e the Senate Select
Committee that the President did not know of either the burglary
plans or the cover-up. Richard Moore testified before the
Senate Select Committee that as a result of his meetings with
the President and Dean on March 20, 1973, he concluded that the
President had no knowledge that anyone in the White House was
involved in the Watergate affair and John Dean told him as they
departed that he had never told the President.
Page
6a7 Mitchell 4 SSC 1628 58
~6h Moore 5 SSC 1944, 1945,2067 59
(57)
6a. JOHN MITCHELL TESTIMONY, JULY 10. 1973, 4 SSC 1628^
1628
I know the indivnclual, I know his reactions to thin^, and I have a
verj' strong feeling that during the per-iod of time in wliich I was in
association with him and did talk to him on the tcleplione, that I just
do not believe that he had that information or had that knowledge;
otlierwise, I think the type of conversations we had would have
brought it out.
Mr. Dash. Generally, is it fair to say that much of your opinion that
you express is based on your faith in the President and your knowl-
edge of the man, rather than any specific statement the President made
to you or that you made to the President?
Air. ^IiTCHELL. Well, I subscribe to the first two. I do have faith in
the President and I do think I have knowledge of the man and I do
think there were enough discussions in the area, in the general area, to
the point where I think the general subject matter would have come
out if the President had htid knowledge. ___^
Sir. Dash. Well, now, Mr. Mitchell, you did become aware, as you
have indicated, somewhere around June 21 or 22, when you were
briefed or debriefed by Mr. LaRue and ISIr. Mardian about the so-
called — as you described it, the WTiit© House horrors of the Liddy
operation and the break-in. Did you, yourself, as the President's ad-
viser and counselor, tell the President what j-ou knew or what you
learned ?
Mr. Mitchell. No, sir, I did not.
Mr. Dash. "Why didn't you ?
Mr. INIrrcHELL. Because I did not believe that it was appropriate for
him to have that type of knowledge, because I knew the actions that
he would take ancl it would be most detrimental to his political
campaign.
Mr. Dash. Could it have been actually helpful or healthy, do you
think?
Mr. MrrcHELL. That was not my opinion at the particular time. He
was not involved; it wasn't a question of deceiving the public as far
as Richard Nixon was concerned, and it was the other people that wefe
involved in connection with these activities, both in the ^Vhite House
horrors and the Watergate. I believed at that particular time, and
maybe in retrospect, I was wrong, but it occurred to me that the best
thing to do was just to keep the lid on through the election.
ilr. Dash. Then it is your testimony that you in fact did not say
anything to the President at that time
Mr. Mitchell. No, sir, I did not.
Mr. Dash. So whether the President had any knowledge of it, it
certainly couldn't have come from, his lack of knowledge or knowledge,
from anv statement that you made to him?
Mr. IMitciiell. That is correct, ]Mr. Dash.
Mr. D.\SH. Now, were you aware of the fact that actually prior to
Magruder's testimony. Mr. Dean rehearsed ^Ir. IMagruder for his testi-
mony before the grand jury?
Mr. Mitchell. I do nol recall that. Mr. Dash, if you are talking
about the testimony that took place on the
]Mr. Dash. In August.
Mr. Mitchell. In August, the second appearance.
Mr. Dash. The second appearance.
(58)
6b. RICHARD MOORE TESTIMONY, JULY 12, 16, 197Z, 5 SSC 1944, 1945, 2067
1944
On ]\rarch 19, 1 \va3 called to meet with the President and Mr. Dean
in the President's I-]xecutive Office Ruildintr office. The President
reiterated his desire to get out a general statement in advance of the
hearings. He asked us to be thinking about ways that this could be
done. This would include or could include issuing a full statement
or "Tniite Paper"; he was also interested in our thoughts about ways
to i>i-e3ent our stoiy to tlie Senate in terms of possible depositions,
affidavits, or possible conferences or meeting-s which would give the
Senate all the information it wished but which would not ci;t across
the separation of powers. He asked Dean and me to consider ways to
do this.
Now, late on ^larch 19, 1973, or possibly on March 20 — ^before we
met later that day with the President — ^Ir. Dean told me that Howard
Hunt was demanding that a large sum of money be given to him before
his sentencing on March 23, and that he wanted the money by Wednes-
day, the 21st. If the payment were not made, Dean said, Hunt had
threatened to say things that would be very serious for the ^Yhite
House. I replied that this was pure blackmail, and that Dean should
turn it off and have nothing to do with it. I could not imagine, I said,
that anything that Hunt could say would be as bad as entering into
a blackmail arrangement. I don't recall ^Ir. Dean's exact -words, but
he expressed agreement.
This revelation was the culmination of several other guarded com-
ments Mr. Dean had made to me in the immediately preceding days.
He had said that he had been present at two meetings attended by
^lessrs. j\ritchell, Magruder, and Liddy before the bugging arrests,
during which Liddy had proposed wild schemes that had been turned
down — specifically espionacre, electronics surveillance, and even kid-
napping. He said that the "Watergate location had not been mentioned,
and that he had ''turned off the wild schemes." I believed then and be-
lieve tod^y that Mr. Dean had no advance knowledge of the Watergate
bugging and break-in. In addition, he said that if he ever had to testify
before the grand jury, his testimony would conflict with ^Ir. Ma-
gruder's, and that he had heard that if Magruder faced a perjury
charge he would take others with him.
jMr. Dean had also mentioned to me in these davs in March that
earlier activities of Messrs. Hunt and Liddy — not directly related to
Watergate — could be seriously embarmssins to the administration if
they ever came to lijiht. He had also implied to me that he knew of
payments being made to the defendants for litigation expenses, and
Hunt's explicit blackmail demand raised serious questions in my mind
as to the i"'urpose of these payments.
This brings me to the afternoon of ^farch 20, when Mr. Dean and T
met with the President in the Oval Office. The meeting lasted about
half an hour. The President again stated his hope that we could put
out a full statement in advance of the hearings, and again he expressed
his desire that we be forthcoming, as he put it. He made some compari-
sons as to our attitude and the attitude of previous administrations,
and he wanted us to make sure that we were the most forthcomina: of
all.
As I sat throuq-h the meeting of INTarch 20 with the President and
Mr. Dean in the Oval Office, I came to the conclusion in mv own mind
that the President could not be aware of the thing's that Dean was
worried about or had been hinting at to me, let alone Howard Hunt's
(59)
6b. RICHARD MOORE TESTIMONY, JULY 12, 16, 197 Z^ 5 SSC 1944, 1945, 2067
1945
blackmail doinand. Indeed, as the President talked about getting the
wliole btory out — as he had done rei)eatedly in the recent meetings —
it seemed ciTstal clear to me tliat he knew of nothing that was incon-
sistent with tlie previously stated conclusion that tlie AVliite House was
uninvolved in the A\'atei-gate ati'air, before or after the event.
As we closed the door of the Oval Otfice and turned into the hall.
I decided to raise- the issue directly with Mr. Dean. I said that I had
the feeling that tlie President had no knowledge of the tirings that
were worrying Dean. 1 asked Dean wliether he had ever told the Presi-
dent about them. Dean replied that he had not, and I asked whether
anyone else had. Dean said he didn't think so. I said, and I use quota-
tion marks to indicate the substance, and I think these are almost my
precise words — I said, "Then the President isn't being served, he is
reaching a point wliere he is going to have to make critical decisions
and he simply has to know ail the facts. I think you should go in and
tell him what you know, you will feel better, it will be right for him,
and it will be gootl for the country."'
I do not recall whether Dean told me he woidd take action or not-,
but I certainly had the impression that he was receptive. In any
event, the question was resolved that very evening when I received
a call at home sometime after dinner and it was Mr. Dean, who said
that the President h.ad just phoned him and that he had decided that
this was the moment to speak up. He said that he told the President
that things had been going on that the President should know about
and it was important that Dean see him alone and tell him. Dean said
tliat the President readily agreed and toTdJJean to come in the follow-
ing morning. I congratulated Mr. Dean and wished him w-ell.
The next day, ^farcli 21. Mr. Dean told me that he liad indeed
met witli the President at 10 o'clock and had talked with him for 2
hours and had in his words, '"Let it all out." I said, '"Did you tell
him about the Howard Hunt business T" Dean replied that he had told
the President eveiTthing. I asked him if the President had been sur-
prised and he said yes. I say he said yes in terms of his response;
Avhether yes is the exact words, but it was an affirmative statement.
Following this critical meeting on ^larch 21, I had several subse-
quent meetings and telephone conversations with Mr. Dean alone, as
Avell as several meetings witli the President which Mr. Dean did not
attend. I do not dispute Mr. Dean's account of the meetings between
us as to any substantive point, and I lia ve no direct Icnowledge of what
transpired in ^Ir. Dean's subsequent meetings with the President, but
nothing said in my meetings or conversations ^v^th ilr. Dean or my
meetings with the President suggests in any way that before March
21 the President had known — or that Mr. Dean believed he had
known — of any involvement of "^Aniite House persopjiel in the bugging
or the coverup. Indeed, -^Ir. Dean's own account that he and I agreed
on the importance of pei-suading the President to make a prompt dis-
closure of all that the President had just learned is hardly com-
patible with a belief on Mr. Dean's part that the President- himself
had known the critical facts all along. In one of m;; talks with the
President, the" President said he had kept asking himself whether there'
had l>een an}- sign or clue which siiould have led hini to discover the
true facts earlier. I told him that I wished that I had been more
skeptical and inquisitive so that I could have served the Presidency
better.
(60)
■6b. RICHARD MOORE TESTIMONY, JULY 12, 16, 197S, 5 SSC 1944, 1945, 2067
2067
Now, are you saying tliat this entry is not an accurate reflection of
that meetini;?
ilr. Moore. A\'ell, some of it is reasonably accurate and some of it I
can't recall.
For instance, it does refer to that sr.frfrestion about challenging the
committee to its own investigation, which 1 stated. I think I stated in
various languages, various words at various times, that the President
indicated his desire to get the whole statement out about the whole
thing and that we agreed. I think probably — I don't Iniow whether
Mr. Dean raised the question about waiting until after the sentencing,
but there was. I recall no firm decision on that.
^Mitchell's problems with the grand jury — grand jury and Vcsco — I
don't think there was any discussion of that. I don't know about
whether Mr. Dean reported something going up there or something. I
don't know. I don't recall at that meeting and I wonder whether the
long and short of it was whether ilr. Dean's logs show whether Mr.
Dean had another meeting with the President that day. Maybe you
have something there. And I am not sure whether we got there at the
same time.
Mr. Lexzxer. Let me ask you this, Mr. ^Sloore.
You did testif}' that when you left the Oval Office on ifarch 20, I
concluded the President could not be aware of the things that ^[r. Dean
was worried about. Xow. did that include, for example, the threat by
Mr. Hunt to blackmail the "WHute House?
Mr. ilooRE. Yes. .
ilr. Lf.xzxer. Did it also include the earlier activities of Isiv. Hmit
and ^Ir. I^iddy that Mr. Dean had also indicated could be embarrassing
to the "\Miite House ?
Mr. MooRE. I had no laundry list in my mind. I had — except the
Howard Hunt matter, but the jreneral feelin" that the man in that
Oval Office, who was telling us so strongly that anything anybody
knew should be disclosed as soon as possible and we should get the
stor\- out, and he had said it before, that this was utterly incompatible
with his having knowledge, prior knowledge of any of these things, and
that is what I said, when I left I said, ••John," I pointed into that
room, I said, '"the President doesn't know the kind of things that you
are talking about and worrying about. Have you told him," and so
forth.
You have heard the story.
Mr. Lexzxer. Yes, sir.
Mr. iNfooRE. And it was a .sense that this man with this frame of mind
and with a desire to tell the wliole story, whatever it was, didn't know
the whole story, didn't have anything of the whole story. That was
my conviction.
^Ir. Lexzxer. And I take it including the things done. He was telling
you about Hunt and I/iddy's activities I think
]\rr. Moore. Tiio wliole field of suspicion and knowledge and prob-
lem that seem to i)e lying there.
!Mr. Lexz.ver. ^Ir. Moore, do you agree now that your understanding
of the President's information and knowledge was basically incorrect?
That lie did, in fact, have information by that meeting on March '20
concerning ilr. Strachau and also possible involvement in Watergate
(61)
7. Aftor the second mooting in Mitchell's offic;c on l-'cbruary 4, 197Z,
the modified Liddy plan was turned down and Dean concluded thr> pla^n was
at end. Dean later met with Haldeman ajid advised Haldeman that tho V/iiite
Mouse shouldhave nothing to do with any such activity. Halden-.an agreed.
7a_ Dean 3 SSC 931
Page
. 64
7b
Dean 3 SSC 930 , 65
(63)
7a. JOHN DEAN TESTIMONY, JUNE 25^ 1972^ 2 SSC 921
931
I assumed the Liddy plan V7a3 dead in that it would never be ap-
proved. I recall Liddy coming into my office in late February or early
March on a matter relating to the election laws. He started to tell me
that he could not get his plan approved and I reminded him that I
would not discuss it with him. He stopped talking about it, and we
went on with our business.
I have thought back over the sequence of events and tried to deter-
mine if I in any way encouraged Mr. Liddy and his intelligence plans.
I am certain of this — I did not encourage him to develop illegal tech-
niques, because I was unaware he was developing such plans.
Between the meeting in Mitchells office on February 4, 1972, and
June la,, 1972, I had no knowledge of what had become of Liddy's
proix>3al. I.^d-recedvQ a memorandum from Magruder on ^farch hs,
1972. that-indicated that Liddy Tvas doinrrsome investigative work for
Majpruder, butr hothing that appeared illegal. Let me explain.
.During the- fii-st; week of j^laicii- 19T2, Lurry Iligby, ilaldeman's
assistant, called me to request for Haldeman any information that
CauLfield could corne up with regarding the funding of the Democratic
Convention in Miami. On March 15, 1972, I for^vai-ded a newspaper
article that CauLfield had discovered on the subjects Later that day
Magruder -brought to me a copy of a memorandum from Liddy to
Mitchell regarding an investigation Liddy had conducted — using
Howard. Hunt — in Florida. 'I called Higby and he said that Magrnder
had alr^^iy giyeniiim a copy. I told Higby that I did not see anything
illegal by the Democrats based on the information in the memorandum.
I made^a notation on the bottom of the memorandum from Mr. Liddy,
but I did nothing- further and heard nothing f^urther from Higby on
the subject. I have sabmitted to the committee the documents I have
just fe^erred to.
[The documents referred to were marked exhibit !N"o. 34-14.*]
Mr. DE-ix. I shall nov^ turn to the events following the Watergate
incident of June-17, 1972,^nd begin by telling^ the committee how I
first learned of thelncident.
, I will gldp the "first part here explaining how I ended up being out
of thecounti'ywhen'-the'decision was made in late May and returned
on June 18, from the Far East.
First KNOwunxsE of W.vtergate Incident
In late May of 1972 the Bureau of Xarcotics and Dangerous
Drugs asked me to deliver a graduation address at its Training
School in Manila, Philippines, on Saturdav, June 17, 1972. I noti-
fied Mr. Alex Butterfield, pursuant to White House procedures
for staff contemplating foreign travel, on June 7, and informed
Mr. Butterfield that I planned to depart on June 14 and return
on June 18 and that the trip had been cleaned by the State
Depar-tment, the National Security Council, and Bud Krogh (who
had responsibility for the drug program on the "White House
Domestic Council). Mr. Butterfield also approved the trip and
I departed for ^Manila on June 14.
•See p. 1151.
Note. — Tndf-nted matter reprpsents portions of ^[r. Dean's prepared st.Ttement which
were oinlttett or summnrlzed in his preaentatlOQ.
(64)
?b. JOHN DEM TESTIMONY, JUNE 25, 1973, 3 SSC 930
930
cratic Convention. Mr. Liddy concluded his presentation by saying
that the plan -.vould cost approximately $1 million.
I do not recall iNIagruder's reaction during the presentation plan
because he was seated beside me but I do recall MitcheU's reaction to
the "Mission Impossible" plan. He was amazed. At one point T gave
him a look of bewilderment and he winked. Knowing Mitchell, I did
not think he would throw Liddy out of the office or tell him he was
out of his mind, rather he did what I expected. Wlion the presentation
was completed, he took a few long puffs on his pipe and told Liddy
that the plan he had developed was not quite what he had in mind and
the cost was out of the question. He suggested to Liddy he go back and
revise his plan, keeping in mind that he was most interested in the
demonstration problem.
I remained in Mitchell's ofBce for a brief moment after the meeting
ended, as the charts were being taken off the easel and disassembled
and Mitchell indicated to me that Mr. Liddv's proposal was out of the
question. I joined Magruder and Liddv and as we left_the office I told
Liddy to destrov the charts. Mr. Liddy said that he would revise the
plans and submit a new proposal. At that point I thought the plan
•was dead, because I doubted if ^Mitchell would reconsider the matter.
I rode back to mv office with Liddy and Magruder, but there was no
further ceftversatTtm of the plan.
The next time I became aware, of anv discussions of such plans oc-
curred, I believe, on Februarv 4, 1972. Magruder had scheduled
another meeting in Mr. Mitchell's office on a revised intelligence plan.
I arrived at the meeting very late and when T came in, Mr. Liddy was
presenting a scaled down version of his earlier plan. I listened for a
few minutes and decided I had to interject myself into the discussions.
Mr. Mitchell, I felt, was being put on the spot. The only polite way I
thousrht I could end the discussions was to inject that these discussions
could not go on in the Office of the Attorney General of the United
States and that the meeting should terminate immediately.
At this point the meeting ended. I do not know to this day who kept
pushing for these plans. Whether Liddy was pushing or whether
Magruder was pushing or whether someone was pushing ^Lagruder, I
do not know. I do know, in hindsicrht. that I should have not been as
polite as I was in merelv suggesting that Liddy destroy the charts
after the first meetine. Rather, I should have said forget the plan
completely. After I ended the second meeting. I told Liddy that I
would never again discuss this matter with him. I told him that if any
such plan were approved. I did not want to know. One thinor -v^as cer-
tain in my mind, wliile someone wanted this operation, I did not want
any part of it, nor would T have anv part of it. ■
After this second meeting in rvIitchelFs office. I sought a meeting
with Mr. Haldeman to tell him what was occurring, but it took me
several days to get to see him. I recall that Hisrby got me into Halde-
man's office when another appointment had l^een canceled or post-
poned. I told Haldeman what had been presented by Liddv and told
him that I felt it was incredible, unnecessary, and unwise. I told him
that no one at the "White House should have anythinq: to do with this.
I said that the reelection committee will need an ability to deal with~
demonstrations, it did not need bugging, mugging, prostitutes, and
kidnapers. Haldeman agreed and told me I should have no further
dealings on the matter.
(65)
8. Magruder reported to Strachan that a "sophisticated
political intelligence gathering system" had been approved.
Strachan included this item in a memo containing approximately
30 other items directed to Haldeman. Attached at tab "H" of this
report were examples of the type information being developed
and identified by the code name "Sedan Chair." Magruder and
Reisner testified "Sedan Chair" involved a disgruntled campaign
worker from the Humphrey Pennsylvania Osganization who
passed information to Committee to Re-Elect the President.
Porter deemed this activity surreptitious but not illegal.
Page
8a\ Strachan 6 SSC, 2441, 2452 68
■«V] Magruder 2 SSC, 810, 848 70
8c'\ Reisner 2 SSC, 499, 500 7 2
Sdj Porter 2 SSC, 670-671 74
(67)
8a. GORDON STRACHAN TESTIMONY^ JULY 20, 2Z, 1973, 6 SSC 2441, 2452
2441
that ]\Ir. Mitchell and Mr. Dean were shocked by Liddy's plan; Mr.
jNTapruder's staff man, Gordon Liddy, -was apparently quite humil-
iated, and notliing was approved. In otiier words, if those meetings
were routinely reported to Mr. Haldeman. as evidence of Mr. ^la-
gruder's administrative ability and judgment, the January and Feb-
ruary meetings would not very likely inspire the confidence of Mr.
Haldeman or the President.
Yet, Mr. ^lagnider testified that ''as he recalled" he returned to
his ofKce after both these embarrassing meetings and routinely called
Mr. Ilaldeman's stafi' assistant, me, and told me about his blunder,
presumably so that I could inform Mr. Plaldeman. That testimony is
difficult to reconcile with good sense. Presumably, ilr. Magruder knew
that Mr. Dean would report on the meetings to Mr. Plaldeman — as
Mr. Dean has testified he did — why would Mr. ?>Iagruder want two
people reporting the same disaster to ilr. Haldeman ?
It is true, however, that Mr. ilagruder called me after he returned
from the March 30, 1972, meeting at Key Bisca;yne with Mr. Mitchell
and Mr. LaRue and reported on about 30 major campaign decisions.
Each of these decisions was briefly described in that rather short
phone conversation. During this call, he told me, and I am repeating his
words rather precisely: "A sophisticated political intelligence-gather-
ing system has been approved with a budget of 300." Unfortunately
he neither gave me, nor did I ask for any further details about the
subject. ______^__________
Soon thereafter I- wrote one of my regular "political matters"
memos for ]\[r. Haldeman. This particular memo for early April was
8 to 10 pages long with more than a dozen tabs or attachments, but it
contained only one three-line paragraph on political intelligence. That
paragraph read almost verbatim as Mr. Magruder had indicated to
me over the phone. I wrote in the memo to Mr. Haldeman — Again this
is almost a quote:
Magmder reports that 1701 now has a sophisticated political intelligence-
gathering system with a budget of 300. A sample of the type of information they
are developing is attached at tab "H."
At tab "H", I enclosed a political intelligence report which had been
sent to me from the committee. It was entitled Sedan Chair II. This
report and two others somewhat like it that I had received began with
a statement such as, '"A confidential source reveals" or "a reliable
source confidentially reports." This was followed by a summary of
some political information.
In April 1972, I was mainly interested in reporting to Mr. Halde-
man on those 30 campaicrv decisions and other relevant political items.
I did not give much thought to what INIr. ^lagruder meant by "sophisti-
cated political intellifrence-gathering svstem." Xor did I give much
thought to the real identity of Sedan Chair II, but I remember that
the information dealt with Senator Humphrey's Permsylvania
organization. >
However, on June 17, 1972, and afterward, as the news began unfold-
ing about the break-in at the Democratic National Committee, I cer-
tainly began to wonder who else but people from 1701 could have been
involved. I suspected that maybe the Watergate break-in was part of
the sophisticated political intelligence operation Mr. Magruder had
(68)
8a. GORDON STRACHAN TESTIMONY, JULY 20, 23, 1973, 6 SSC 2441, 2452
that would strike me as far more eensitive a matter to send through the
normal messenger channels than some file which other witnesses have
indicated was not patently illegal on its face.
Mr. Dash. In other words, what-you are saying is that you never
did see the Gemstone file, ^Ir. Mngiiider never invited you over to see
it, and thnt prior to ^Earch 30, you had no knowledge of any so-culled
Liddy intelligence plan?
Mr. Stf^vchax. That is correct.
Mr. Dash. Now,did that change, at least afterMarch 30?
If it did, could you tell us how it changed?
Mr. STR.A.C7r.\>r. Yes: I was aware that ilr. Magruder would be going
down to Key Biscayne to re\-iew several campaign decisions that had
accumulated during John INIitchelFs working on the ITT problem.
He called me up in an apparently fairly brief telephone conversation
and reviewed the 30 or so pending campaign decisions. I took notes on
that telephone conversation and prepared shortlv thereafter a political
matters memorandum for Mr. Haldeman, summarizing that telephone
convei-sation as well as other information.
Mr. Dash, .^jid what did that include? I mean did it include a Liddy
intelligence plan?
Mr. Sttlvchax. Yes; Mr. Magruder told me that a sophisticated
political intelligence gathering system had been approved and I re-
ported that to Mr. Haldeman. ' ___!_
_ Mr. Dash. Were you aware that that was one of the items for deci-
sion that went down to Key Biscayne with Mr. ]\[agruder?
Mr. STR-^cn-vx. Xo: I was not.
Mr. Dash. So that it was after he came back that he reported that to
you?
'Mr. Str.\ch.\?j-. That is correct.
Mr. Dash. Can you recall approximately when he made that report
to you?
Mr. Str-vchax. "Well, it was shortlv thereafter, I would guess either
Friday, March 31, mavbe Saturday. My secretary recalls having typed
the memorandum on Friday.
]Mr. Dash. And it is clear in your mind that Mr. Magruder reported
that Mr. Mitchell had in fact approved a sophisticated intelligence
plan?
Mr. Str.\chax. Well. I concluded that ^Ir. ^litchell had approved it.
I believe that when Mr. Magruder was .o-ointr through the decisions
and the way I would usually report it to Mr. Haldeman would be that
Mr. IMagnider reports that ^Mr. Mitchell has approved the following
matters, and I would put a colon, and then I would list the items.
Mr. Dash. But did you do it with regard to this plan ?
Mr. Str.vcha><'. Yes; that was one of the 30 items that was li.2ipi_
Mr. Dash. I think in your statement you referred to a sophisticated
intelligence system with a budtret of 300. Tliree himdred what?
Mr. Strachan-. Well, it is $300,000. On almost all of the memoran-
dums that I wrote to Mr. Haldeman, I would leave off the last three
zeroes, because usually the figures that we were dealing with were ver}-,
vci-y large.
Mr. Dash. Xow, vou sav that you then prepared a political matters
memorandum for Mr. Haldeman, and you included this appi-oved
(69)
?&. JEB MAGRUDER TESTIMONY, JUNE 14, 1973, 2 SSC 810^ 848
810
Mr. Magrttder. Primarily ]\Ir. Dean und Mr. Mitchell.
ilr. Dash. Now, did yoii testify before the grand jury under any
immunity provision?
]Mr. Magrudf.r. No, sir.
Mr. Dash. When did you most recently testify before the grand
jury?
Mr. ^Magrtjdei!. That would have been probably 2 weeks after the
April 14 discussion with the prosecutoi-s.
^Ir. Dash. "What understandinir do you have with the prosecutots
with regard to yourself at this point ?
Mr. Magruder. As I understand it, I will plead guilty to a 1 -count
felony charge of conspiracy.
^Ir. Dash. And will you be a witness at the criminal trial?
IMr. jNIagruder. Yes, sir.
^Ir. Dash. I have no further questions, ]Mr. Chairman.
Senator Erv7x. Senator Baker.
Senator Baker. ^Ir. Chairman, thank you very much.
As we did on yesterday, we made an effort to rotate the questioning
among members of the committee so that the sequence is not exactly
the same. We intended to try that again today with the chairman's
concurrence and to rearrange the sequence of things in a different way.
I will now follow Mr. Dash, I will yield then in our turn to Senator
Weicker and Senator Gurney, and instead of minority counsel follow-
ing after m.ajority counsel, minority counsel will conclude the ques-
tioning of this witness.
]Mr. Magruder, I am not clear in my mind about who originated the
idea of the chii.destine intelligence operation and when that was done.
Mr. Magruder. Well. Mr. Liddy was brought over to me at the
committee in December and I was told that he would handle our intel-
ligence-gathering operations, by Mr. Dean. He indicated that ^Mr.
Mitchell had approved this. Wedid not discuss in detail at that meet-
ing what these operations Avould be.
Senator Baker. Did you discuss electronic eavesdropping?
Mr. Magruder. Xo, we did not.
Senator Baker. Did you discuss the Democratic National
Committee?
!Mr. Magruder. No. we did not.
Senator Baker. But the chain of events is that ilr. Dean recom-
mended to you Mr. Liddy.
Mr. Magruder. Yes, sir.
Senator Baker. It is your understanding that ^Mr. Mitchell had rec-
ommended Mr. Liddy ?
Mr. Magruder. Mv understanding is they had met in November,
November 24, Mr. Liddy. Mr. Dean and Mr. Mitchell and at that time
it was agreed he would become our counsel and handle our intelligence
operations.
Senator Baker. "Wliat was the nature of your concept of intelligence
operations at that point ?
Mr. Magruder. My concept?
Senator Baker. Yes; or ^Mr. Dean's or Mr. Mitchell's; if you knoAci
Mr. Magruder. I do not know what their concept was. My concept
was simply one of gathering as much information through source;? in
Ihe opposition's committee would have been my concept at that time.
(70)
8b. JEB MAGRUDER TESTIMONY, JUNE 14, 1973, 2 SSC 810, 848
MS
Senator Montoya. Now, ^[l■. Mapiuder, would you say that you were
acquainted witli most of these projects that, especially those on which
you kc]>t a little iile known asrienistone?
ISIr. ^Iagrtl'df.r. Senator, when you say acquainted
Senator Montoya. Acc[uainted or aware of the projects.
ilr. Mackudkr. Well, specifically the Watergate break-in, yes» I was
specifically aware of that project.
Senator Montoya. Did you have anything; in vour files with respect
toKubyl?
i\Ir. Magruder. My recollection of, I think. Paiby 1 and Ruby 2 and
Crystal were code names, I think that Mr. Liddy used for the various
huprs. I am not sure if that is correct. I think that is what it was.
Senator Montoya. Can you elaborate or amplify on their signifi-
cance ?
Mr. ^Magroter. I did not pay any attention to the names at all. It did
not interest me.
Senator ^SIontoya. Did you have anyi:hing
Mr. ^rAGRTJDER. But I remember the names.
Senator ^Montoya. Did you liave anything in your files with respect
to tliese names?
Mr. ifAGRUDER. Well, when the documents came in those names were
in the documents, and I just cannot recall in what conte.xt they were
in the docimients. My recollection was that I thought that they were
the positioning that would identify where that bug was, that is what
I thought. I would not. I could not verify that. I think that is my
recollection of what Ruby 1, Ruby 2, and Cr^^stal meant.
Senator /Iontoya. Do you mean to tell me you did not read the
documents that went into the Gemstone file?
Mr. IMaCvRtjder. I did not say that, sir. I said I read the documents
Jbut the jargon, the jargon that Mr. Liddy used was not of any interest.
Actually, Senator, I only read the documents once, found them to be
useless and did not read them again. -«__—
Senator Moxtoya. What about Sedan Chair No. 2 ?
IMr. ]Magruder. Sedan Chair 2, to my recollection, was an individual
-who was in the Himiphrey campaign, who had been set up before Mr.
Liddy came on board, although that could be incorrect, it may have
been after, and was simply a, as I imderstood it. I think a disgruntled
employee who was passing information to lis. T just do not know who
Sedan Chair 2 was. He wrote one extensive report that I think Mr.
Porter alluded to Humphery's campaign in Philadelphia.
Senator ^Montoya. Now, you indicated also in testimony heretofore
tfiven that you always assumed that when Mr. Dean acted that he had
authority either from ^[r. Haldeman or Mr. Ehrlichman. did yon ;iot ?
]Mr. Magruder. I think. Senator. I said that his normal reporting
relationship was either between Mr. Haldeman and ^Ir. Ehrlichman.
I do not know specifically in every case whether he was acting in their
behalf.
Senator Montoya. But you were imder the belief that because he
was employed at the Wiite House under these two gentlemen that he
was actinor for and in their behalf. Is that what you indicated Ix^fore?
Mr. iMagrijDfj?. Senator, m a general context; yes, sir.
Senator ^Montoya. What particular part did ]Mr. Dean have in
forging the plan for the coverup ?
(71)
35-945 O - 74 - 6
8o. ROBERT HEISNER TESTIMONY, JUNE S, 1972^ 2 SSC 499-500
499
Mr. Keisnkr. The total nniount, when you ndded up the amount
Mr. Porter had rcreived, seemed to be in the ramje of 840,000 to
S50,n0(). Rut that was
Mr. Thomp.so.v. Is that Avhat the committee referred to as petty
cash at tliat time?
^fr. IvKiSNER. 1 referred to it as jietty cash until I had assisted
Mr. Porter in the activity.
Mr. Thompson'. And realized it was greater than you thought.
Mr. Reisner. I am sorrj'?
Mr. Thompson. And you realized that the money he had was more
than you thought?
Mr. Reisner. With this exception: It was not petty cash in the sense
that there were S7,000 or $8,000 on hand, which is certainly not petty
cash. The 840,000 to 850,000 that I am referring to was sums that had
accrued from the beginning of the time that there were receipts — July
or June of 1971 until March.
Mr. Thompson'. How much cash was in the safe?
Mr. Reisner. How much cash at that time? It seems to me it was
in the neighborhood of several thousand dollars — perhaps as much
as five or six.
Mr. Thompson. Did the receipts — do you recall any names of, or
any amounts to individuals who were receiving money from Mr.
Porter's safe?
Mr. Reisner. Well, I can remember that there were, in addition to
Mr. Uddy— now, Mr. Ijddy was — it was Mr. Porter that indicated
to me that Mr. liddy was receiving money. There was an individual
who was referred to by a code name and that code name was "Sedan
Chair" and that that individual was
Mr. Thompson. Sedan Chair? Two words?
Mr. Reisner. Yes. I believe it was actually "Sedan Chair 2."
Mr. Tho.mpson. Was there a Sedan Chair 1?
Mr. Reisner. I do not know. I do not know. Perhaps there was.
There was also an individual who worked for Mr. Porter named
Roger Stone, who I beUeve received money. And there may have
■ been other individuals.
But to my recollection, which is a little bit vague on this, there was
not a regular disbursement, with those exceptions. ^^^^
Mr. Tho.mpson. ^Vho was Sedan Chair?
Mr. Reis.ner. I do not know. I know that — well, I mean, I have
sort of a general circumstantial understanding of who I think Sedan
Chair wiis.
Mr. Tho.mpson. Tell us about it.
Mr. Reisner. I will come as close as I can.
Mr. Thompson. Tell us about it.
Mr. Reisner. Subsequent to that, after I learned that there was
such an individual, I think I was more alert to the name and I did see a
memo in April, I believe, or perhaps May, that purported to be a
report from another campaign committee. I believe it was the Hum-
phrey committee. I do not know for a fact who Sedan Chair was. It
could have been someone who just simply had his disagreement with
the Humphrey committee and wished to report on some of their
activities.
Mr. Thompson. It was someone in the Humphrey committee, from
what you can tell?
(72)
8g. ROBERT REISNER TESTIMONY, JUNE 5, 1972, 2 SSC 499-500
500
Mr. Reisxeu. From what I can tell, I mean it purported to be.
jMr. THO.NtP.so.v. How much money was this indivirlual receiving:''
Mr. Reisner. My recollection is that it was Hppro>dmately a
thousand dollars a month, but I could have read that in the newspaper,
frankly, it is vague.
Mr. Thompson. What about Mr. liddy?
Mr. Reisnek. Mr. Liddy received several disbursements that were
considerably larger than that. I think they were in the nature of S5,000
to SS,000, 1 am not certain. The reason I remember them is that there
were — he would return sums of money and it made the accounting some"-
what bizarre. He would return S300 after taking out 88,000, that sort of
thing. I really am not completely clear on that.
Mr. Thompson. Was there any indication as to the total amount
Liddy had received to that time?
Mr. Reisner. No, there wasn't. I have the feeling that the total
magnitude, $40,000 to SoO.OOO, means that, and that is the total
magnitude of what was recorded. I have no idea. Mr. Porter, I do not
think, would have hidden any of what he was recording but I only
saw what the receipts were there and Mr. Liddy's total figure I would
think would be in the nature of half of that.
Mr. Thompson. Did you state when this inventor^' took place?
Mr. Reisner. In Alarch, later March. I could not pin it down
exactly but it was late March.
Mr. Thompson. Concerning the money in Mr. Porter's safe, could
3'ou tell either from anytliing that you saw there in the nature of
receipts, from conversations with 5lr. Porter, from conversations
with anybody else about any other operations or incUNaduals who
were being funded, who had been paid money out of the safe of Mr.
Porter?
Mr. Reisner. Anything else would be by the nature of a supposi-
tion. There is nothing else that
Mr. Thompson. Do you know?
Mr. Reisner. It is hard.
Mr. Thompson. Or do you know or have any basis for believing
that any demonstrations or counter demonstrations were funded?
Mr. Reisner. Yes, there was one occasion in April in which I
overheard a conversation. The nature of my job was such that there
are pieces of these things that were overheard that after subsequent
events they perhaps take some meaning. I was sitting in Mr.
Magruder's office at the time he received a phone call. The phone call
concerned the fact that there was a desire to get some counter dem-
onstrators or demonstrators to attend the Hoover funeral, that there
was some sort of planned demonstration. It seems to me that that
was an activity that Mr. Liddy was then asked to undertake and it
seems to me there was some cash in that activity.
Mr. Thompson. Magruder asked Liddy to take care of this?
Mr. Reisner. When I say this I say this in an effort to be coopera-
tive because I am talking about only my specific recollectiori. It may
be that that wasn't carried out or that it was carried out differently
from the way in which I heard the conversation and I think only Mr.
Porter could be of assistance there. That was the nature of the initial
conversation.
(73)
8d. HERBERT PORTER TESTIMONY^ JUNE 12, 197Z, 2 SSC 670-71
670
Senator Weicker. Which Senator is this?
Mr. Porter. Senator Muskie — could be used ns a great front to
go to California and liold tax hearings that would be a great vnsual
event for Senator Muskie and all at the taxpayers' expense and he
could get a lot of value for his campaign.
We thought that was rather interesting, to say the least, and I told
Mr. Mflgruder about it. He asked me to just coi)v the memo on a, I
believe it was written on plain bond — and send it to Evans and Novak.
Miss Duncan did that. Miss Duncan typed it and we sent it to
Evans and Novak, and they i)rinted it and the hearings were ilever
held.
Senator Weicker. All right. Were there other documents or other
instances where Miss Duncan performed ser^dces relative to
_ Mr. Porter. Yes, sir, I believe it was Miss Duncan. On one occa-
sion, Senator Musl-ne's speech that he was going to deliver in the
Senate against the nomination of William Keimquist to the Supreme
Court was on the film, and I specifically was — it was about 20 pages
and I asked Mr. Magruder what he wanted me to do with it. He said,
let me check, and he did check, and he got back to me and said, Mr.
Mitchell would like to see it.
So that had to be completely typed and I had to read — I read off the
film into an IBM dictaphone, and I believe it was Miss Duncan who
typed that. I believe it was she.
Senator Weicker. Miss Duncan now being your secretary, is that
correct?
Mr. Porter. Yes, sir.
Senator Weicker. At any time, did you send Miss Duncan to the
White House to give Gordon Strachan copies of the photographed
documents or the transcripts emanating from those documents?
Mr. Porter. 1 ^'^ not remember, sir, whether I did or not; I do not
remember. It is pos. *hat I did. If I did, it would have been be-
cause Mr. Magruder wo. -"• said, take a copy of this over to
Gordon Strachan. /
Senator Weicker. I do want you to think about this answer.
Mr. Porter. I understand.
Senator Weicker. I am not trying to mislead you, and if you care to
take a minute or so, just to carefully think about it, please do so. I do
not want to rush you.
Mr. Porter. I will tell it as I remember it, and I do — let me say
this. Certainly, if Miss Duncan says that that happened, then it did
happen. I would not dispute anything that she might say.
On the other hand, the only reason that I would send a document
over to Mr. Strachan would be at Mr. Magruder's suggestion or
direction. I believe that I do remember sending — I believe there was
only one copy of the Rehnquist speech put together — I think — it was
so long. However, on the item that appeared that was sent to Evans
and Novak, I think perhaps that may have been sent over to Mr.
Strachan. I just do not remember. Senator. *""""
Senator Weicker. And you realized at that time that these various
documents — well, let me rephrase my question.
The obtaining of these documents, did you consider them to have
been obtained legally or illegally?
(74)
8d. HERBERT PORTER TESTIMONY, JUNE 12, 197 Z, 2 SSC 670.-71
671
Mr. Porter. I remember asking: ^^r- Rietz. The fir:5t question 1
asked him, I said, "Is this any part of the U.S. mail?" And he said,
"i\o."
I knew that intercepting the U.S. mail would be a violation of the
law.
I put the photographLna: of a document in the same category as
xeroxing a document. If you are taking a picture of it one way, you
are taking a picture of it another way. So 1 did not think it was illegal.
I thought it was very surreptitious, but I did not think it was illegal.
Senator Weicker. You thought it was surreptitious?
Mr. Porter. Yes, sir.
Senator Weicker. But you did not think it was illegal?
Mr. Porter. No, sir.
Senator Weicker. Why, then, did you indicate to your secreta. v*^~"
that these were not matters to be discussed?
Mr. Porter. I think that is, in my opinion, that would be self-
"'vident, Senator Weicker, that you would not go around discussing
things like that, the same as you would not go around discussing any
kind of information gathering that you might be doing.
Senator Weicker. Did you indicate to her that if she discussed it,
she would be fired?
Mr. Porter. I do not believe I ever made that statement .to her,
DO, sir.
Senator Weicker. Again, let me just ask the question, am I correct
in paraphrasing your answer to me that there might have been an
instance where you sent material to the White House to Gordon
Strachan or am I correct in saying that there were those instances and
if so, how many? That is my question.
Mr. Porter. I cannot remember the e.xact number of instances
that I sent things to Mr. Strachan. Mr. Strachan would get copies
addressed to Mr. Haldeman of many things that I did. Senator, in
relationship to my primary function at the campaign or the surrogate
operation, schedules, and plans-
Senator Weicker. I understand, but-
Mr. Porter. I do not remember — excuse me.
Senator Weicker. Excuse me.
Mr. Porter. I just do not remember specific instances where Mr.
Strachan was sent an item here or an item there. As I say, if Aliss
Duncan says that she did, then I would believe that. But I personally
do not remember that specific instance.
Senator Weicker. Y'ou do not remember, then, sending Miss Dun-
can to the ^Vhite House to give Gordon Strachan copies of these photo-
graphed documents?
Mr. Porter. I would say that, if it is an answer, I kind of remember
it, but not enough to sit and testify that I did it. All right? I mean, I
sent Mr. Strachan documents and, on occasion. Miss Duncan would
hand carrj' them for one reason or another — either because the mes-
senger was not going to come back until 4 o'clock and it was noon, or
Mr. Magruder wanted to get something over there right away, or
something like that, and the secretaries would hand carry them.
Senator Weicker. I have no further questions, Mr. Chairman.
Senator Ebvin. Senator Montoya.
(75)
9. Dean told the President on March 21, 1973 that Elaldemaa
was assuming that the Committee to Re-Elect the President
had an intelligence gathering operation conducted by Liddy that
was proper. Dean told the President there was nothing illegal
about "Sedan Chair".
Page
J^; Transcript, March 21, 1973, 10:12-1 1:55 a. m.
pp. 178-179 78
9b] Transcript, March 21, 1973, 10:12-11:55 a.m.
p. 180
80
(77)
• 9a. WHITE HOUSE TRANSCRIPT, MARCH 21, 1972, 10:22 - 11:55 A.M. MEETING,
178-79
9 ■^- ' ^
either fish or cut bait. This is absurd to have these guys
' over there and not using them. If you are not going to use
them, I may use them." Things of this nature.
P When. was this?
D This was apparently in February of '72.
P Did Colson know what they were talking about?
D I can only assume, because of his close relationship with Hunt,
that he had a damn good idea what they were talking about, a
damn good idea. He would probably deny it today and probably
get away with denying it. But I still — unless Hunt blows
on him. —
P But then Hunt isn't enough. It takes two doesn't it?
D Probably. Probably. But Liddy was there also and if
Liddy were to blow --
Then you have a problem — I was saying as to the criminal
liability in the White House.
D I will go back over that, and take out any of the soft spots.
P Colson, you think was the person who pushed?
D I think he helped to get the thing off the dime. Now
something else occurred though --
P Did Colson -- had he talked to anybody here?
D No . I think this was --
P Did he talk with Haldeman?
D No, I don't think so. But here is the next thing that comes
in the chain. I think Bob was assuming, that they had some-
(78)
9a. WHITE HOUSE TEANSCEIPT, MARCH 21, 1973, 10:22 - 11:55 A.M. MEETING,
178-79
10 -^ '
thing that v/as proper over there, some intelligence gathering
operation that Liddy was operating. And through Strachan,
who was his tickler, he started pushing them to get some
information and they -- Magruder — took that as a signal to
probably go to Mitchell and to say, "They are pushing us like
crazy for this from the White House. And so Mitchell probably
puffed on his pipe and said, "Go ahead," and never really re-
flected on what it was all about. So they had some plan that
obviously had, I gather, different targets they were going to
go after. They were going to infiltrate, and bug, and do all
this sort of thing to a lot of these targets. This is knowl-
edge I have after the fact. Apparently after they had
initially broken in and bugged the DNC they were getting
information. The information was coming over here to Strachan
and some of it was given to Halderaan, there is no doubt about
it.
Did he know where it was coming from?
I don't really know if he would.
Not necessarily?
Not necessarily. Strachan knew it. There is no doubt
about it, and v;hether Strachan -- I have never come to
press these people on these points because it hurts them
to give up that next inch, so I had to piece things together.
Strachan was awar6 of receiving information, reporting to
(79)
9b WHITE HOUSE TRANSCRIPT OF MARCH 21, 197 Z, 10:12-
11:55 A.M. MEETING, 180
Bob. At one point Bob even gave instructions to change "
.their capabilities from Muskie to McGovern, and passed this
• ■ • back through Strachan to Magruder and apparently to Liddy.
And Liddy was starting to make arrangements to go in and
bug the McGovern operation. — .^-
P They had never bugged Muskie, though, did they?
D No, they hadn't, but they had infiltrated it by a secretary.
P By a secretary?
D By a secretary and a chauffeur. There is nothing illegal
about that. So the information was coming over here and
then I-, finally, after — . The next point in time that I
became aware of anything was on June 17th when I got the
v;ord that there had been this break in at the DNC and some-
body from our Committee had been caught in the DNC. And I
said, "Oh, (expletive deleted)." You know, eventually putting
the pieces together --
P You knew what it was.
D I knew v;ho it was. So I called Liddy on Monday morning and
said, "First, Gordon, I want to know whether anybody in the
White House was involved in this." And he said, "No, they
weren't." I said, "Well I v;ant to know how in (adjective
deleted) name this happened." He said, "Well, I was pushed
without mercy by Magruder to get in there and to get more
information. That the information was not satisfactory.
(80)
10. Political Matters Memo /flS was prepared Ly Straclian and
submitted to Haldcrnan on March 31, 1972. On April 4, 1972 Strachan
prepared a talking paper including the mention of the "sophisticated
intelligence gathering operation" for use by IIa,ldernan in a meeting he
was having with Mitchell on tliat day. The paper was returned to Strachan
and filed with Memo /rl8 after Haldeman met with Mitchell, Strachan
testified the subject of intelligence gathering was never raised again
by Haldem-an. Strachan is certain none of the Political Matters
Memo had the "P" v/ith a check mark th.rough the "P" which was the
procedure used for memos discussed in that form with the President.
Page
fOa ■ Strachan 6 SSC, 2452, 2454, 2488 82
(81)
10a GORDON STRACHAN TESTIMONY^ JULY 22^ 1973, 6 SSC
2452, 24S4, 2488
that would strike me ns far more sensitive a matter to send throuo;h the
normal mes^senirer channels tluin some file ulucli other witnesses have
indii'ated was not patently illopil on its face.
jNfr. Dash. In otlier words, w liat j-ou are sayinp: is that you never
did see the Gemstone file. ^Mr. Mairmder never invited you over to see
it, and that prior to JTarch 30, you had no knowledge of any so-called
Liddy intelligence plan?
Mr. Straciiax. That is correct.
IMr. Dash. Kow, did that chanfre. at least after Tilarch 30?
If it did, could you tell us how it changed ?
Mr. Sttlvchax. Yes; I was aware that Mr. }* La sr-uder would be going
down to Key Biscayne to review several campaign decisions thatrhad
accumidated during John ilitchell's workintr on the ITT problem.
He called me up in an apparently fairly brief telephone conversation
and reviewed the 30 or so pending campaign decisions. I took notes on
that telephone conversation and prepared shortly thereafter a political
matters rnemorandum for Mr. Hakleman, summarizing that telephone
conversation as well as other information.
I\[r. Dash. And what did that include? I mean did it include a Liddy
intelligence plan ?
Mr. Str.\ch.\x. Yes; Mr. Magnider told me that a sophisticated
political intelligence gathering system had been approved and I re-
ported that to Mr. Haldeman.
_ Mr. Dash. Were you aware that that was one of the items for deci-
sion that went down to Key Biscayne with Mr. Magruder?
jMr. Strachax. No; I was not.
JNIr. Dash. So that it was after he came back that he reported that to
you?
]Mr. STR.\onAN. That is correct.
Mr. Dash. Can you recall approximately when he made that report
to you ?
Mr. Strachax. Well, it was shortly thereafter, I would guess either
Friday, March 31, mavbe Saturday. My secretary- recalls having typed
the memorandum on Friday.
Mr. Dash. And it is clear in your mind that Mr. ^lagruder reported
that Mr. Mitchell had in fact approved a sophisticated intelligence
plan ?
Mr. Strachax. Well, I concluded that Mr. ilitchell had approved it.
I believe that when Mr. ^fagruder was froinq- tlirough the decisions
and the way I would usually report it to Mr. Haldeman would he that
Mr. Magnider reports that Mr. ilitchell has approved the following
matters, and I would put a colon, and then I would list the items.
]Mr. Dash. But did you do it with regard to this plan?
Mr. STR.VCHAX. Yes; that was one of the 30 items that was listed.
Mr. Dash. I think in your statement you referred to a sophisticated
intelligence system with a budirot of 300. Three hundred what?
Mr. Str_\chax. Well, it is $300,000. On almost all of the memoran-
dums that I wrote to Mr. Haldeman, I woidd leave oft" the last three
zeroes, because usually the figures that we were dealing with were ver}',
very large.
Mr. Dash. Now, you sav that you then prepared a political matters
memorandum for Mr. Haldeman, and you included this approved
(82)
10a GORDON STRACHAN TESTIMONY^ JULY 25, 1973, 6 SSC
2452, 2454, 2488
2-154
]\rr. Str-VCH.vn. Well, there -nas a button on the call director phone
that I had which would bu^.z when I was to pick that line up, and T
pushed down the button and began listening to the conversation
usually at that time which was already in progress.
ilr/DASH. All right. In this particular case now with a call, I take
it, you are testifying to Mr. Mitchell, could you tell us, having picked
up the line, what you heard ?
Mr. Strachas. "Well, Mr. Mitchell indicated that he was either
going to return or had returned from Florida, and Mr. Haldeman
jokingly said, ''Well, that is clearly a mistake. You ought to stpy down
there and vacation some more." and Mr. Mitchell indicated that "Well,
we had better get together and talk about some matters." Haldeman
asked him if 3 o'clock that day would be convenient.
Mr. Dash. And that day was when ?
Mr. SrR.\cHAX. April 4. ■
Mr. Dash. 1972?
^Ir. Str.\chax. 1972.
Mr. Dash. And was there, in fact, a meeting on April 4, 1972, be-
tween Mr. Haldeman and ^Ir. Mitchell ?
j\Ir. Str-^chax. Well, I did not attend the meeting so I could not
testify that there was in fact but I prepared a talking paper for the
meeting and we would prepare a folder which would include the talk-
ing paper, and the talking paper went into his oiSce and came back
out afterwards.
Mr. Dash. All right.
Now, in this talking paper, did you include the item of the sophisti-
cated intelligence plan with a budget of §300,000 ?
Mr. Str.\chax. Yes. In most talking papers I would frequently pose
the question is the intelligence system adequate? Is the proposal on
track, just to get the conversation going on the subject, and in this
particular one I did include that paragraph.
Mr. Dash. Now, prior to that meeting and when you were pre-
paring that talking paper, was there any other political intelligence
plan operative or being considered to your knowledge?
Mr. STR.\.cnAN. No ; not to my knowledge.
. Mr. Dash. Did you receive back that talking paper after you had
given it to Mr. Haldeman ?
Mr. Strachax. Yes. I did.
Mr. Dash. And to your knowledge, was there any indication as t«
whether all the items' on the talking paper had been discussed?
Mr. Str.\chax. Well, usually if a matter had not been discussed he
would indicate that it should be raised again. In this case it was not
raised again, indicating that he would have covered the subject.
Mr. Dash. "What did you do with that talking paper then when you
received it back?
Mr. Strachax. I put it back in the file with the political mattei-s
memo 18 files.
Mr. Dash. And there was no indication from Mr. Haldeman that he
had either not discussed it or it needed any further action on your
part?
Mr. Str.\chax. That is correct.
Mr. Dash. Now, did there come a time after that meeting between
INIr. Mitchell and Mr. Haldeman, and also in the same month of April,
(83)
10a GORDON STRACHAN TESTIMONY, JULY 23, 1973, 6 SSC
2452, 2454, 2488
2488
Senator Ixoute. Was any distinction made between personal and
private papers and public papers, or were they all in one package, sir?
Mr. Str-\chax. '\\'eil, that question of law lias never been settled.
Most Presidents have taken the view that any documents prepared in
their public capacity belong to them. Former President Johnson left
with something like 20 moving vans full of documents and memo-
rabilia, with no apparent distinction between personal papers that he
had drafted and papers that had been prepared by other merajjers of
the Government for him.
Senator Ixouye. Were the tapes that we have been discussing today
a part of the estate of Richard ^I. Nixon? Part of the estate plan?
Mr. Str-vciiax. Well, usually, the description of the assets which
would be transferred would be extraordinarily broad. Terms such as
"materials"' would bo used to include everything — papere, memorabilia,
State gifts, tapes, photographs, almost anything related to the
Presidency.
Senator Ixoute. Were you aware that the tapes that have been
under discussion the last few days were considered as part of the estate
plan of the President?
j\Ir. Str-^chax. No, I did not know of the existence of those tapes
until Mr. Butterfield's testimony.
Senator Ixotjte. Now, you have said that you 'prepared several
political memos which were passed on to Mr. Haldeman. Are you
aware if these memos were ever seen by the President ?
Mr. Strachax. No, and I would doubt that they were, because memo-
randums which I drafted for ^Nlr. Haldeman, that he reviewed with
the President, would usually concern polling mattei-s. and he would
put a '"P" up in the upper right-hand corner, indicating that he would
want to take it in and cover it with the President, then it would com?
back to me with a checkmark through the ''P," indicating that he had
covered it with the President. And I do not remember, and I am cer
tain that I would, that any of my political matters memos were cov-
ered with the President in that form. ,
SeiTator Ixouve. My final question before we recess for a few mo-
ments, ilr. iTohn Dean has stated that he recalled visiting you in your
office in the presence of Mr. Richard IMoore and recalling your saying
that you would, if necessary, perjure yourself to prevent involving
Mr. Haldeman."
Just for the record, is that still the frame of your mind?
Mr. Str.\chax". Well, it is certainly not the frame of my mind now,
and it wasn't at the time. The particular meeting or conversation that
Mr. Dean, I believe, is referring to followed a series of meetings to
decide how to cope with the Segretti matter. Mr. Dean testified that
there was a Sunday meeting in the Roosevelt room, and he listed the
attendees, tr\-ing to deal with the imminent story on Mr. Segretti. Mr.
Dean did not mention my name, yet I was at that meeting.
There were a series of meetings after that, and I believe one of them
was the meeting in question with ]Mr. Moore. We were working on
statements that could be put out to the press by the Wiite House, such
as the one that Mr. Chapin eventually released, and I indicated at that
time that if the statement was to be released in my name, it could indi-
cate that I had approved Don Segretti instead of jNIr. Haldeman.
(84)
11. Halderriaa has testified that he aad Mitchell did not
discuss intelligence gathering activities with the President
on April 4, 1972, and that he and Mitchell only reviewed
w^ith the President matters relating to the ITT-Kleindienst
hearings and arguments of regional campaign responsibilities.
Haldeman's notes of the meeting show no political intelligence
gathering operations were discussed. The transcript of
April 4, 1972, meeting between the President, Halderaan,
and John Mitchell confirms that there was no discussion of
campaign intelligence gathering activities.
Page
lla. Haldeman 7 SSC, 2881 86
Tlbi Transcript, April 4, 1972, 4: 13-4:50 p. m. , p. 1-31
(submitted to the Committee on the Judiciary on
June 5, 1974) 87
(85)
11a H.R. HALDEMAN TESTIMONY^ JULY 30^ 1973, 7 SSC 2881
2881
tion to eitlier of iis that he had been instructed to destroy any ma-
terials or make sure files were clean. —
I think the eti'ort to bring in my April -i meeting with John ^litchell
as in some waj' significant with regard to intelligence is a little far-
fetched. Ey his testimony, Strachan doesn't Icnow what was discussed
at that meeting. All he says is that, in routine fashion, he put an item
on the talking paper regarding the adeciuacy of intelligence. As a mat-
ter of fact, the meeting with xilr. Mitchell that day was in connection
with a meeting of ^Mitcliell and me with the President. My notes taken
at the meeting with the President indicate tlie discussion covered the
ITT-Kleindienst hearings and a review of Mitchell's plans for as-
signing regional campaign responsibilities to specific individuals.
They indicate no discussion of intelligence.
DEAN INTXSTIGATIOX
John Dean, in his Camp David report — which is now exhibit 34-4.3*
before this conurittee — says that when he arrived in Washington on
Simday afternoon, Jime 18, he realized that the President would have
to know everything that he could find out. He realized at that point
that he would be asked to assemble all of the facts so that the "Whitj
House could be fully informed as to what had transpired and how it
would affect the President, but having been on an airplanfe for ap-
proximately 25 hours he did nothing further that evening.
The next morning, after reading all of the news accoimts of the
Watergate incident, he spoke with Jolm Ehrlichman, who instructed
him to get the facts together and report to him. He then called the At-
torney General to get vv-hat facts he knew. He called Gordon Liddy
and met with him. Dean asked Liddy if anyone at the "iVhite House
was involved and he told him no.
During the days and weeks that followed. Dean discussed the in-
cident with everyone who he thought might have any knowledge or
involvement.
The source of these facts is John Dean's report, or the start of it,
which he wrote at Camp Da\ad in March of this year.
There is absolutely no question in my mind, or, I'm sure, in the minds
of anyone at the Wliite House, or at the Justice Departm^ent, that John
Dean was in fact conducting an investigation for the "White House
regarding the Watergate as it might involve the White House. It is
inconceivable to me that there could be any doubt in Dean's mind.
Dean moved in immediately after the incident as sort of Lhe Water-
gate project officer in the ^Vhite House. This was in keeping with our
usual procedure ; the responsibility was his and he had the authority to
proceed. Dean kept Ehrlichman and me posted from time to time on
developments and, through us, the President. He apparently did not
keep us fully posted and it now appears he did not keep us accurately
posted.
The President, Ehrlichman and I were very much involved in
many other vital matters through this entire period and we made no
'attempt to get into the details of, or in any way take over, the Water-
gate case.
•See Book 3, p. 1263.
(86)
lib JAMES ST. CLAIR LETTER, JUNE 6, 1974
Juiw 5, 1974
Special Covin-?; f:l to xhfi
Ho-ciso Jodici-iry Cory-umlirtaa
Dsas Mr, Do3l?3 **
This ia ia rospoase t-? yxnii* rserafisi: fo? th« 1;:x'p^ recording of tha
coiTf^raaiion boi^^eigsii tia^s pT»^ldac^^ M^o JoHa Jvlitcbali arui H. IL,
H2Jx;'x<rcL.-:;-n on April 4, 1972, frora4:13 - 4:50 P, ?vi., -with rsapaci
to •wM^is tiifei~B ^^aus gv/ora tastirnonj by Mr, H. R. Kaldaman tsoai
th'i 3>i?b}cs<Ert cf IXaT was dis<ras8€^d.- Atbaciied ia- a transcript of
tiviai rtj.es> tiiig.
If it ia dosLr&d to chsci; tho ac<rar;ic7 of the transcript, I am
auibx>;x*t»«d to advise ynu that ths Prssidaai ■would pormifc tha
Cbaii»irL-;.a, 2vl^, R&djao, zaid th« R-aaking Miaoriry Membar,
Mr, Hu^^hJnsoa, to liatsn to tiia tapa at tite "VVhita Hotwia.
Sincsroly,
Jamaa D, St, Clair
Special Counsel to the Pr-aidant
(87)
35-945 O - 74 -
lib. WHITE HOUSE TRANSCRIPT OF APRIL 4, 1972, 4:1:^-4:50 P.M.
MEETING, 1-31
The President/Attorney General Mitchell
and H. R. Haldcinan
Oval Office
April 4, 1972 - 4:13 - 4:50 PM
(Explcti\'es Deleted)
P Well Joha, I -hope you had some time off -- that they didn't
bother you to death witli ITT and all that
M No. It was simply wonderful.
P Good (unintelligible).
M We always enjoy it, Mr. President. Oh, Bebe turned that
thing up according to your formula and
H (I^aughter).
M I tell you, it was just great.
P I told these people around here, I said (unintelligible) call
Mitchell, I said don't you Bob, and.
Of course, I suppose they had to (unintelligible) one or two.
M 'Well some of them did.
H We didn't bother you too much?
M No, not you fellows.
P I said in the campaign -- I said to hell with the damn
campaign. Did you do any golfing? No?
M Hell, I didn't even care to.
P Did you fish?
M We fished, and we went out in the boat with Bebe a couple of
times and had dinner v.ith him tsvo or triree limes.
(88)
lib. WHITE HOUSE TRANSCRIPT OF APRIL 4, 1972, 4:13-4:50 P.M.
MEETING, 1-31
-2-
P I'd like a little consomme. Want some consoinme?
M I'd love soine. So it was just absolvitely great. We had
some of the people down from the Committee where we
covild spend a couple of days, you know, with quiet and so
P Yeah (unintelligible) sort of busy these days. Try and get
the weather, damn it, if any of you knov/ any prayers, say
them (unintelligible) weather. Let's get that weather cleared
up. The bastards have never been bombed like they're going
to be bombed this time, but you've got to have weather.
M Is the weather still bad?
P Huh! It isn't bad. The Air Force isn't worth a I mean,
they v/on't fly. Oh, they fly, but they won't -- you see our
Air Force is not . . .
H It's the strangest thing -- in W6rld War II they flew those
bombing runs all the time and they couldn't see a thing.
P I know.
M But they were doing a different type of bombing then.
P Strategic bombing and all that -- nevertheless it's a
miserable business.
M Are the Navy pilots as bad?
(89)
lib. WHITE HOUSE TRANSCRIPT OF APRIL 4, 1^72, 4:13-4:50 P.M.
MEETING, 1-31
-3-
P Oh they're better, but they're all under this one command.
It's all screwed up. We just aren't going to talk about it.
The weather will clear up. It's bound to. When they do,
they'll hit something -- and, they're a lot of brave guys --
you've got to say. After all that POW (unintelligible) that
poor who got shot down. They're over there starving on that
damned rice. It's all right, we'll give 'em hell. Well the ah,
what are your reflections on the present thing. Why don't we
start with what I told the staff to get the hell off of the ITT
and then get on to politics which is more interesting, not
that that isn't --
M But that's politics -- pure and simple politics, but hopefully
we'll get this thing.
P Well, I don't know if we'll ever get out of it -- I mean -- I
think what we have to face is that it will be investigated by
(unintelligible) election as you get closer to the election of
course it's extremely, I think that -- I think you might adopt
the practice -- I think you might consider adopting the practice
that after the Democratic Convention the Republicans will
boycott all investigating committees on the grounds that they
are politically motivated. How would that be?
(90)
lib. ^ITE HOUSE _ TRANSCRIPT OF APRIL 4, 1972, 4:13-4:50 P.M.
-4-
M I would think I would go beyond investigative committees.
I'd go to some of the others where you have a facade
P Harassing.
M Of substance, but
H (Unintelligible). It's a good idea.
P Yeah -- we're going to boycott anything that we think is
politically motivated.
H These people are disgracing (unintelligible).
P And ah. Republicans just walk off and say it's just politically
motivated. Well, at least ITT got 'em confused.
M I would say it's quite confusing. Some of the more enlightened
newspaper people are beginning to write to the effect that the
Democrats got to come up with something more than they've
come up with or the monkey's going to be on their back.
H Manolo, who do you think (unintelligible).
MS I don't think so, sir.
M Not much Manolo.
MS What they do is (unintelligible).
M You happen to be right, Manolo. I was just telling --
(Material unrelated to Presidential actions deleted)
(91)
12b. WHITE HOUSE TRANSCRIPT OF APRIL 4, 1972, 4:1-6-4:50 P.M.
MEETING, 1-61
-5-
M You know this little girl -- this Lichtman -- the secretary?
You know where she had her press conference don't you -- did
you notice that? Down in the law office of the Democrat
Chairman for the District --
P She's a Democrat?
M Yeah, but the press conference was held in the law office of
this (unintelligible) District, Democrat Chairman, and yet
there wasn't anything in the newspapers about it or why it
just so happened.
HorP (Unintelligible).
M Most of the '^hakers'^re, that's for sure.
P' What is your view about the convention -- about all the scares
and cries I hear about the 250, 000 naked kids that are going
to be coming?
M Well, Bob and I have just gone over this and I've had a meeting
this morning with
P Kleindienst told us about it.
(92)
lib. miTt: HOUSE TRAflSCRIPT OF APPIL 4, 1972, 4:13-4:bU P.M.
MfbTING, 1-31
-6-
M And so forth, ah, it seems to me there arc three factors --
number one was screaming kids -- if you call them kids;
number two ■- - tlic ITT Slieraton business \\'ith the television
on the hotel all through the Convention; and thirdly, and
equally, if not more important, is the fact that the site
selection committee and tlie people that went out there to'
look at that thing did a God damned poor job. Its coine to
the point v/here it's going to cost between 2. 4 and 2. 5 million
to put that thing together. In addition to that, there's
H That's if we j\ist get the convention hall apparently? ~
ivl No, no, this is the whole thing, this is the whole thing.
H I see, all the hotels and stuff involved.
M Yeah everything; in addition to that there has to be nine
hundred odd thousand dollars of 'insulation in that arena out
there, and in addition to that there's a
P Who, (unintelligible) this, Wilson (unintelligible).
M No, I think a lot of our people closer to us than that were at
fault in not recognizing the limitations of these facilities.
P All right.
M In addition to that you have your building trades labor contract
coming up on June 1, out tliere for negotiations, and they can
put the prcssuie on your pay bocird or the rest of it. So, in
view of that we have thouglit of the potential of changing the site.
Wo can gi-'t out of tlierc --
(93)
lib. mUTf HOUSt: TRANSCHIPT of APHIL 4, 1972, 4:1Z-4:S0 P.M.
MftrlNC, 1-31
P What gro\.md wovild you use for changing it?
M The cost and the uncertainty of the availability of the facilities.
H There's a real question as to whether they can do the construction
on --
M That's correct, and the arena out there is owned by two
Canadians, and they're just acting tougher than hell.
P All Canadians are tough.
M And, there's no contract with them that covers some of these
things; -- ah, so that yovi're not walking av/ay from the City
of San Diego, you're walking away
H You can make a very good case.
P Hovv about San Diegians -- hov/ do tliey feel?
M I don't know, frankly, I believe it \vould be mixed emotions.
H It's mixed, but %vith all the talk of the deinon strator s
P Lot of people don't want them there
H I think a lot of San Diegians would be very happy to have theni
go away.
M I would think that that would be the case.
(Overlapping conversation)
H Hotels anyway --
(94) ,
lib. miTE HOUSE TRANSCRIPT OF APRIL 4, 1972, 4:13-4:50 P.M.
MEETING, 1-31
P (Unintelligible) you build the fact that the arena is in trouble,
in other words, you've got to find the cause. This subject
came up before, you know, you raised it. Bob, and said,
well, our people are so stupid on public
relations that I'm sure the way it would come out
is ws went because we didn't v/ant to stay at the Sheraton
where somebody I understand agreed I was to stay.
H No.
P I'm not even going to stay any place in San Diego -- I'm
staying in San Clemente, but be that as it may that was
apparently some story that they had. V/ell an^n.vay, v/hatever
it ■was, the question is whether or not at tliis point we could
start the talk. It's av/ful hot incidentally, terribly hot.
H I can see that
M Well, -we've started this
P Put it on the basis tlat the arena can't be finished. Can v/e
do that?
M Yes, as a matter of fact, I was going to say we're starting
this, programming this, by sending people out to continue,
and I say continue the negotiations with these Canadians
because they don't want to give us a place for lead time in
order to get in there to do the in"iprovcinents, etc. , etc.
(95)
lib. WHITE HOUSE TRANSCRIPT OF APRIL 4, li)y2, 4:13-4:b0 P.M.
MEETING, 1-31
-9-
H Then we could start the cost thing and then
(Overlapping conversation).
P I'd just say that the arena would not be finished.
M Well, the cost factor goes in v/ith the negotiations because if
you don't get into the arena to do the reconstruction by a certain
date your cost factors multiply and multiply and multiply --
so you just (unintelligible) the same factor. In the meantime,
I talked to Bebe this morning and a Miami Beach of course is
the logical place.
P Sure.
H (Unintelligible).
P Well, if it's all set up -- safe -- television -- that's the major
consideration. At least it's all there. Go to the stupid damned
place again, and I got a place to stay this time I wouldn't have
to stay in a hotel.
M So Bebe has got this fellow Myers.
P Hank Myers.
M Hank Myers, who has the contacts and so forth, quietly can-
vassing to see if the arena and the hotel rooms will be available.
H This time of year?
M Oh hell, they run a lot of conventions.
(96)
21b. WHITE HOUSE TRANSCRIPT OF APRIL 4, iy72, 4:lZ-4:50 P.M.
MEETING, 2-31
-10-
P They run a lot of conventions but they'll clear them out by that
time. It isn't really, I've been there in June and August -- we
all have -- and they do run conventions, but generally speaking,
it's still more open in the summer and the rates are lower.
M Of course
H It's still ridiculous though.
M So, if the only negative factors that I see in the change
P Is the admission of guilt in ITT, right?
M Well, I think that that will go by the boards.
P Maybe that's better than just having the damned story rehashed
again.
M I would rather have the -- if they can sell it as an admission
of guilt now than I would have the television cameras on the
Sheraton Hotel all through the Convention.
P That's right. That's right.
M I don't know
P My theory Ts - It's the old story you know that a good poker player
cut your losses -- get out of the bad box and get out of it fast.
M I don't know how our friend the Governor would take this. He
might be damned glad to get the problems out of the way. I
don't know, but we would do --
(97)
12b. WTTE HOUSt: TRANSCRIPT OF APRIL 4, 1972, 4:2iS-^:bO P.M.
Mfb:TING, 1-61
-11-
P Can't we -- could we have a situation where we have a break
with the Canadians. You see v/hat I mean? Create a conTlict
with them.
M That's v/hat v/e're
P And then go out and announce it, but it's got --if for once we
could do the PR right --if for once -- just one single solitary
time -- and keep it out of Bob "Wilson's hands -- and do it
right -- but the problem is that the convention
(unintelligible) that is the arena won't be ready, the cost is
too great, or . . .
M That's the way we woiild program it.
P Think it would v^'ork?
H Sure. I think it would. You're bound to get some bumps on the
other side? So v/hat? You got a. base a story -- just stick with
it -- couldn't get the arena done -- made a mistake in surveying
it. It's all fallen apart.
P You've got to establish tint immediately though. This is April,
and the Convention is only five months away, and so everybody
is going, as you know, now that's going to be ready --
M You see these negotiations are going on and what v^^e were
proposing to do is to send a big architect and a builder or
somebody else up to have a conlrontation v/ith t'i:e C'anadlT'.r. s
in Vancouver.
(98)
lib. miTf HOUSE TRANSCRIPr OF APRIL 4, 1972 4-23-4-bU P M
Mb'TINn, 1-31
-12-
P Well let's do it.
M Well, we want to make sure we can go to Florida before we
break this pick.
H I'd just soon not have a convention, but we can't get away v/ith it.
M Have an absentee ballot -- that's what I'd prefer.
H The Pdpon Society is suing us for improper selection of delegates
or something.
P (Unintelligible).
H We have something v/here you state that (unintelligible) to the
President gets eight additional delegates or soniething and the
Ripon people have goi:ie to court and some judge has upheld
them on the first round.
P Is that right? Well that's been done -- been done from the
beginning -- I don't know whether it ineans anything.
H I don't thinlc it docs. They don't seem to worry about that anymore.
M The fact of the matter is that there are a few rules that a political
party has control of it's Convention and in the past they have
ignored even the state laws tha.t reqtiire people to be pledged for
so many ballots and so forth. They've just ignored them.
(99)
Jib. WHITE nOUSf TRANSCRIPT OF APRIL 4, 1972, 4:13-4:50 P.M.
MEfTING, 1-61
-13-
P Let me ask you this. Do you think the possibilities of major
demonstrations are less in Florida? It doesn't make a hell of
a lot of difference anyway. I'd rather have a demonstration in
Florida tha.n I would in California anyway. California is a state
we have to go for for other reasons.
H Well, I think they are infinitely less.
M Infinitely less.
H You've got much better physical (unintelligible).
M And in addition to that you have all the Democrats in control in
Florida from the Governor on down -- where in California you
have all the Republicans in control.
H (Unintelligible) have demonstrations (unintelligible).
P One story John, -whenever you're asked about a (unintelligible).
You know, I'm the only one in the whole outfit that
didn't want to go to California. I was against it all the time.
M You wanted to go to Chicago. I didn't want you to.
P I did. That's right, but I (unintelligible).
M No question about it.
P How about Chicago now?
M Daley wouldn't let you in there, I bet.
P Oh
(100)
Ub. WniTK HOUSE TRANSCRIPT OF APRIL 4, 1972, 4:2S-4:bO P.M.
MEETING, 1-61
-14-
H Can't start from scratcli froin anyway now, I don't think.
You've got
M Be very very difficult.
H It would.
M And we have a inonth between the Conventions -- more than
a month in which
H Clean things up
M To change things enough to make it look like -- assuming that
(unintelligible)
P (Unintelligible) platform in.
M The facilities for crowd control are so much better in Miami
Beach there.
H' And of course the cost is
M And we save money LEAA money, we don't have to
H Save police money.
P The other point is the Democrats really fouled up, and the
police and the rest will feel that they have a responsibility to be
a little bit nriore restrained when we're there. Well, I hope you
can do it. My idea is -- I'd wait. Obviously we have to get ready
when it's ready -- I'd say in about 30 days from now.
M I think we could niove in on it before then
H Faster
M Because we're at tlie point wliere
(101)
, lib. miTt; HOUSf TRANSCRIPf UF APRIL 4, IBVZ, 4:16-4:bU P.M.
, O MEETING, 1-61
-15-
P (Unintelligible) no way you could do it though without being char"ed
because of ITT
M Well Herman came out with a statement today which shows
that ITT's contribution is down to $25, 000. I just think that the
cost of it, the labor problem, the possibility that you'll never
get that place in shape
P Yeah
M Ah, added on top --
P Also, we don't -- there's very little that we could do to screw
up Florida as a state that we might win, California is a toss
up anyway you figure it. It's a to carry and there 't; a nasty
incident that could hurt us.
M Yep.
P That's the point. On the other hand, I don't think Reagan's
attitude is supportive. He wants to carry the state. On the
other hand, you got to figure whether or not -- these clowns that
want to go there say -- oh it would help so much -- and all that
business.
H (Unintelligible).
M Well -- you've a double edged sword there --if everything
went off nice and peaceful and you had all those 10, 000 college
kids we were going to have out tliere mar cliing with their
banners and everything was beautifvil -- that'd be great.
P Yeah.
(102)
lib. miTt: HOUSf TRANSCRIPT OF APRIL 4, IBY^i, 4:U-4:bU P.M.
MEETING, 1-61
-16-
M But if yoii have one of these confrontations with a Republican
Governor and a Republican Mayor and Pete Pitchess
is sending in his storm-troopers -- wliy
P Yep.
M Well that's where the police are going to come from, you
know they don't have enough in San Diego to handle it.
P (Unintelligible) send Pete Pitchess dov/n - Sheriff's posse.
Those old farts riding their horses. "Well, I like it, but I
would say that if you just start getting the word out awful fast
about the (unintelligible) problem you are having with the
Canadians. Is that being done, I haven't seen anything?
M Well, it's all local out there. It's known locally.
P The main point is to get it out nationally. Well.
H Local too.
P Who would say that? -- the Mayor Vv-ould say it or the Convention
Committee -- that we regret that we cannot handle it - - that we
cannot have the hall ready.
M Well this is tlie Republican Convention and they wouldn't be
saying it because they would, of course, have to bring that site
selection cominittee back and they'd have to put out another call
and things like that; so it would be the Republican National
Conimittee that's tlie party of interest.
(103)
35-945 O - 74 - 8
lib. WHITE HOUSE TRANSCRIPT OF APRIL 4, 1972, 4:12-4 :bO P.M.
MEETING, 1-31
-17-
P Ok. -- Well leaving that subject -- what else is -- I guess
today is Wisconsin isn't it?
M It certainly is -- ought to be an interesting go -- ah -- I told
those fellows over there tonight v.'ith Dale and -- Dole and so
forth --to get out two thoughts in connection with this primary
in Wisconsin. Nuinber one, tliat there was a clear indication
because of the proliferation that the Deinocrats did not have a
viable national candidate when you look at who won in New
Hampshire and who won in Florida and who won here and the
next place and secondly, if there v/as any winner at all it was
Teddy Kennedy. Now Teddy's been getting a free ride, but not
being drawn into this, and if you have Dole, Dale and whoever
else bring this up that --
P Why wouldn't you say that Teddy is going to be the nominee.
M Yeah, Teddy's getting
P Rather than he's a winner -- I'd simply say that McGovern's
a stomping horse for Kennedy and Lucey is the Kennedy man and
it looks like Kennedy is going to be the \vinner of the nomination.
Looks like Kennedy. None of the others have got the horses to
win it. Smoke him out a little.
M That's right and then, what I would hope would come out of it --
is v/hat the Republican National Chairman and so forth are sayini;
(104)
22b. WHITf HOUSE TRANSCRIFl' OF APRIL 4, 29yz, 4:26-4:b0 P.M.
MtJfTING^ 1-32
-18-
M is that the reporters will be going to these other candidates
and say "what do you think about what they are saying about
Kennedy" and let's get them posturing themselves against Kennedy
so that he doesn't get this free ride.
P It's clear, it's clear that this is a -- Mel Laird is saying that
the reason Muskie has been really poleaxed there among other
is that L/Ucey and the Kennedy Democrats have ganged up on him.
They got behind McGovern, not for the purposes of supporting
McGovern, but to kick the hell out of
M Muskie
P Muskie, and also, he said they did it for another reason: they
didn't figure Hubert had a chance before Florida and didn't have
time to change their course until then or they'd all been for
Hubert, but then anybody but Kennedy. Their piirpose was to stop
Muskie. But they've done that -- now Hubert, of course, has
come in.
H They can't stop Hubert! (Laughter)
P They can't stop him if he wins this time.
P I think he will. I think he'd be first -- McGovern second -- and if
Wallace is third, I think Muskie then would be fourth, but that's
just a guess.
(105)
lib. WHITE HOUSE TRANSCRIPT OF APRIL 4, 19/2, 4:l6-4:b0 P.M.
MEETINGj_ 1-31
-19-
M I don't know how the
P Maybe Muskie will be - - Muskie will be second.
M Well, I doubt that very much.
P He's up there thovigh. He had a big telethon push which I
(unintelligible ).
M I don't think Muskie is going to have that drawing power up
there.
P You know the thing that occurred to me is that -- it seems to
me that as you look around the states -- the big states --
New York is one that I don't think you could (unintelligible) --
you really have to be personally in charge out there, and
anybody else I let in there, you know what I mean, because
you've to play the game and Rockefeller's got to carry it for
us hasn't he? Have to get off his ass, but you've got to play
the game with those conservatives, right? And so there the
problem
H Incidentally, did you see Bill Buckley's -- you see that letter
he sent out?
P No. What's he done now?
H He sent out a letter to the -- I don't know whether it's a
circulation building letter or something to the publication people
or whatever it is - but anyway, thewliole pitch is -- "I've been
aslvcd about this cominr; election or sometliing, and Twill say
providly I will vote for Richard Nixon for President. I consider
(106)
lib. WHITE HOUSE TRANSCEIFr OF APRIL 4, 1972, 4:13-4:50 P.M.
MEETING, 1-31
-20-
H any one of the Democratic possibilities would be a disaster
for this country. " He said that "Nixon will be a problem too
M or P (Unintelligible)
H but that he has the job" -- no, he insists that "he has the job
now of doing just what the conservatives want of pulling together a
sufficiently broad coalition in order to be elected to govern. " He
said "I would not vote for Nixon as editor of a convservative
journal. "
P That's very good.
H And he said "I don't feel that we should abandon our principles
but when we get to the election we must vote (unintelligible).
P Then he sort of sticks it to Ashbrook?
M Well, Bill's written
H He said he was going to do that
M A couple of column's you knov/ that go in this
P How does he, well how does he deal with Ashbrook. I mean
does he want him to get a good vole anyway?
H Yeah, because that's forcing you
M That's the signal
H To take a conservative position.
P I mean I watclied Ashbrook closely
H You watch Ashbrook closely and get your guidance from
(\uiintelligible )
(107)
b
Ub. WHITE nOUSf TRANSCRIPT OF APRIL 4, 1972, 4:13-4:b0 P.M.
MEETING, 2-32
-21-
P What I was going to say is -- in Pennsylvania, who do we have
there that you would say -- you also will liandle New Jersey
won't you? I don't thin]-, (unintelligible) or were you using Sears
or others
M Yeah, Sears.
P What about the list of the big states? We got New York and
New Jersey. What would you say about Pennsylvania?
(Unintelligible). Or do you just divide the state up?
M Oh, do you mean who do we have in Pennsylvania?
P The boss, I ir.ean it's a '(unintelligible). Who would you consider
to be the top man?
M That's really divided into regions but Arlen Specter is -- well
P Specter is our general
M Well he's our campaign director. Scott and Schweiker are the
co-chairmen, and Arlen --
P Specter is the statewide chairman?
M Yes.
P Good.
M Well he's really going to work.
P Well he's good.
M And a
F* And he wants to be governor doesn't he?
M That's -correct.
(108)
12b. WHITE HOUSt; TRANSCRIPT OF APRIL 4, W/Z, 4:lZ-4:bO P.M.
MEETING y 1-31
-22-
P Whether he wants to be (unintelligible), he's good don't you
think with the Jews and with the Blacks and (unintelligible)?
Also he's with us.
M Yes, and also he's -- we're deciding whether Rizxo's campaign
manager should go to work for Arlen Specter now or wait and a
P How's his relationship with the Pittsburgh crowd, all right?
M They're good, because we've got other lines
P But Specter -- that's the guy -- in other words you wouldn't
be in direct -- you wouldn't need anybody here to watch
(unintelligible) ?
M We're going to have to have people to do that, but what I've
done
P (Unintelligible) you ought to handle that
M Well let me.
P On a real tough job, I would not let them out of your hands.
I don't know whether you can do theiTi all but
M No, I've already decided that in California, Illinois, Ohio,
Pennsylvania, New York and New Jersey, that I am going to
have a direct line through to the people. The other states we
will have these surrogates
P Surrogates.
(109)
lib. WHITt: HUUSf TRANSCHIPT OF APRIL 4, 1972, 4:1Z-4:S0 P.M.
\\ i, MKfTiNG, 1-31 ^
-23-
M Regional people, ^ow, what I want is what we've talked about
before, it's -- well, vise the example of California: If we can
get Cap Weinberger, if he's not so far "Hatched" that he can't
do it, Cap could be a state desk man or auditor, or whatever
you want to call it, somebody with the expertise of politics in
California -- can go in and see what's going on up in the Valley
under Monag.an or what Packard is doing and his people and
San Francisco, or what they're doing here there and the next
place. I expect to have somebody like that for each of these
big states. But I think
P I'm afraid he is "Hatched," but a
M Is he?
P (Unintelligible)
M Cap is a pretty bright able guy and he's been immersed in
politics out there as state chairman
P Wonder if we should pull him out of the Budget?
M He gets along with everybody.
H Well, he doesn't want to stay in the Budget.
P I know he doesn't want to stay there. Can we pull him out and
put him in an agency. He might be just as good a man as you
could find around California.
(110)
lib. WHIrt: HUUSe THANSCHIPT Of AFHIL 4, iy/2, 4:l6-4:bU P.M.
mtriNG^ 1-61 .
-24-
M Can he take a leave?
H Just resign.
P Let Carlucci.or somebody else be Budget Director if he
resigns, and
H After you get a Budget Director.
P I'd have hina as full time. George could find sonaebody
H You've George on top of it.
P George Shultz can run the Budget, (unintelligible). I really
think the thing for Cap --so important that you want him
(unintelligible). Illinois?
M Well, we've got, of course, Tom Houser is a good operator and
I haven't got anybody yet.
P Pretty good, yeah
M Tom Houser.
P He's Percy's man, you know.
M No.
P No, I meant he was.
M He was.
P I mean his
M He broke with Percy you know when Percy went back on his
commitment to vote for you -- or to me to vote for you at the
Conver.tion.
(Ill)
lib. WHITE- EOUSt: TRANSCRIPT OF APRIL 4, 197'Z, 4:13-4:50 P.M.
mtriNG, 1-31
-25-
P Well he helps us in the area we needed him (unintelligible)
and so forth, and Texas?
M And we have
P How does Texas stand?
M We have Al - - we have John Connally.
P (Unintelligible).
M We have Al Topper (phonetically) downstate.
P Oh, good.
M Who is, you know
P (Unintelligible).
M And so -- plus a lot of good regional people -- even a top flight
guy in the city of Chicago which is a real good politician. In
Texas, I've been talking to John Connally about it.
P Have you? Good.
M John's feeling is that by the time they get to the Democratic
Convention he is not even sure that Bentsen or the JLt. Governor
P Barnes
M Ben Barnes or these people should even go to that Convention.
I guess it's his line. What he is angling for in effect, is keep
your options open. Don't get tied in with an organization now,
because you may want to bring
P Texans for Nixon, I l^nnw, I know (unintelligible).
(112)
22b. WHITE must: THANSCRIPT OF APRIL 4, la/iJ, 4:26-4:b0 P.M.
MEETING, 2-32
-26-
M Well, on the otlier side of the coin, of course, our Republican
friends are getting itchy and I keep telling thcn-i to go out and
write you son-ie inore Republicans -- but they say v/eU, we're
going to lose good people to the gubernatorial cainpaign, etc. , etc.
P Let 'em go.
H So what?
P Let them go. They don't -- that doesn't make any difference.
Hold it firm. We need Texas Democrats. We don't win Texas --
we haven't won it yet -- but you don't win it with Republicans.
We never have. And let's just face it, that's the way the score is.
Tower has won it once or twice but -- accidents, pure accidents.
(Unintelligible) any Democrat, believe me, by any Democrat
(unintelligible) committee of tliat sort is better. Rather than
that fellow who is finance chairman down there. What's his
name ?
H Al Fay
P Al Fay
M You mean Peter O'Donnell? Peter's left.
H He's left?
M Peter quit. He's (\inintelligible) national coinmittee
(unintelligible).
H I'll be darned.
M Agnitch is the new national coniinittecman.
(113)
22b. WHITf HOUSf THANiSCHlPT OF APRIL 4, 297Z, 4:26-4:60 P.M.
MEETING^ 1-62
- 27 -
P Yeah.
H O'Donnell was such a horrible v/hincr.
P Ohio!
M Ohio we still have the Bliss.
P Bliss is still.
M Situation.
P I think going for the old timer there is a bad idea. What do
you thiiik Bob?
H I think it is a good idea.
M Well, we have to, Mr. President -- almost have to -- to keep
the Taft forces and the Rhodes forces and the rest of them.
P Well, we've got to go for the young too and the rest, but
I guess Bliss is
M Well, Bliss is going to come back to work for me, you see,
he wants the recognition.
P Great,
M He's not going to be the guy to come and do the nuts and bolts,
but he wants the identification with you and back here to
re-establish his
P Let me ask you this. We have these curious reports, which,
you've seen these of course, (unintelligible) out of Michigan
showing we have a chance in Michigan. Do you tiiink wo ought
to take a whirl at it or not?
(114)
lib. WHITE- HOUSE TRANSCRIFT OF APRIL 4, 2972, 4:16-4:b0 P.M.
MEETING, 2-61
-28-
M We're going to take a whirl at it. We're going to take a whirl
at all of them.
P Well (unintelligible) even Minnesota?
M Well, I mean a whirl at them to the point where we're going to
organize to the teeth and then when it comes to where you're
going to spend the money on your media, your mail, your
telephone, and things like that, we'll make the judgment a
little further down the line.
P Michigan judgment could be very interesting because if it gets
really heated up on busing, if it could, and we're on the one
side and they're on the other side, you might win the state on
that issue. You agree Bob?
H Sure.
M In addition to that, look what yovi've done for the automobile
industry.
H That was a year ago.
P Well, still
M It still can be sold
P Sold lots of cars
M And, Milliken is all aboard and he's working hard, and we've
got a good chairinan out there.
(115)
lib. WHITE HOUSE TRANSCRIPT UF APRIL 4, 197'^, 4:13-4:50 P.M.
MEETING, 1-31
- 29 -
P I'd even run -- I'd even liave some sort of a campaign on that.
I'd even do something in Massachusetts. Do you know v/hy ?
Solely because I think it isn't good to let any one area just go
completely.
M No, you can't, because of its rub off on Vermont.
P (unintelligible)
M We've got an added starter there who wants to be the chairman
to get out and work and that's the Governor.
P He does?
H Sargeant?
M Why not? He gets
P Won't hurt us !
M He gets on the tube.
H (Uiintelligible),
P Well, he's a good liberal fellow.
H He really wants to get in?
M Yep -- and I thinlc we can get it cleared with Brooke and Volpe
and all the rest of them.
P I think there's a great deal to be said to go for every state.
You know the line I took with these people -- the governors
which they all like to hear -- but you take, I was telling Bob
the other day that in ttirms of oisr own plin, of course, v/e'vc
got to look at everything you can without killing ourselves or
without being over exposed. But, I feel very strongly that
(116)
12b. WHITt; HOUSE TRANSCRIPT OF APRIL 4, W/Z, 4:2:5-4:bO P.M.
MtJETiNG, J-61
-30-
P Wallace in or out, we ought to hit of the southern states that
I ought to get to Georgia, Alabama, Louisiana, and Mississippi,
because I think if we can sweep that South and of course Texas
is the big question mark (unintelligible).
M Did I tell you about Connally's poll that Barnes ran down there?
Shows the President did very well -- quite different from our
polls.
P In Texas?
M Yep.
P Our poll shov. s five points behind.
M With Muskie, yeah.
P Of course that would be
H That was awhile back.
M Quite awhile back. Yeah. But Jolm Connally's impression is
that you're in good shape in Texas with or %vithout Wallace,
P Well, that's hard to say (unintelligible).
M Well we don't have that liquor thing down there this year that
we had in '68. That was wlmt really did us in.
H (Unintelligible).
P You know (unintelligible) really kicked Muskie in
(unintelligible) that Harris Poll showed him slipping in the
trial heats. Appetrently (uniiitelligible) something similar
(unintelligible).
(117)
lib. WHITE HOUSE TRANSCRlFr OF APRIL 4, li)y^, 4:16-4:50 P.M.
MEETING, 1-31
-31-
M Well, this has a hell of an impact because the press picks it
up and drums on it day in day out.
H Especially because he had been (unintelligible).
P (Unintelligible) Gallup (Unintelligible) even, even in February
and now (unintelligible).
M When is this comiug out?
P I've got to see the Ambassador -- he's leaving -- he's leaving,
M Oh, is he?
H Going iiome.
P Yep. V/ell, anyway John. (Voices fade).
H French Ambassador's name is Kosciusko. Figure that one out.
P For your -- I can't tell you too strongly nov/ with regard to the
San Diego thing -- got something to do, do it! Cut our losses
and get out. But I do think that from a PR standpoint. Bob,
at this time we really ought to.
H (Unintelligible) ahead of tinne.
P To build (unintelligible). Start a fight right now. Play hard
(unintelligible) no question.
M As soon as we see any light through it at all.
P I'd start right now.
M Give them the guidelines and put them right on it and let them
stay right on it. (Unintelligible).
P John, I would start the fight right now. (voices fade away).
P Well, Mr. Annbassador, (The French Ambassador and
(118)
12. The President had no knowledge of an attempt by the V/hite
House to cover-up involvement in the V/atergate affair. Dean told
the President that there were things Dean knew the President had no
knowledge of.
Page
"IZa Transcript, MarchZl, 1973, 10: 12- 1 1 : 1 5 a. m. ,
p. 202 120
NOTE: Objection has been raised by Congressman Seiberling that the
first sentence is a conclusion rather than a statement of information
within the Rules of Procedure of the Committee.
(119)
35-945 O - 74 - 9
12a WHITE HOUSE TRANSCRIPT OF MARCH 21, 1973, 10:12-
11:15 A.M MEETING, 202
202
D I know, sir. I can just tell from our conversation that
these are things that you have no knowledge of.
p You certainly can! Buggings, etc! Let me say I am keenly
aware of the fact Colson, et al., were doing their best to
get information as \ie went along. But they all knew very
well they were supposed to comply with the law. There was
no question about that! You feel that really the trigger
man was really Colson on this then?
D No. He was one of us. He was just in the chain. He helped
push the thing .
P All I know about is the time of ITT, he was trying to get
somethimg going there because ITT was giving us a bad time.
D I know he used Hunt.
P I knew about that. I didn't know about it, but I knew
there was something going on. But I didn't know it was
a Hunt .
D What really troubles me is one, will this thing not break
some day and the whole thing -- domino situation — everything
starts crumbling, fingers will be pointing. Bob will be
accused of things he has never heard of and deny and try to
disprove it. It will get real nasty and just be a real bad
situation. And the person who will be hurt by it most
will be you and the Presidency, and I just don't think —
(120)
13. The testimony of Gray before the Senate Select Committee
establishes that the origin of the theory of Central Intelligence
Agency involvement in the break-in of the DNC was in the FBI and that
Gray communicated the theory to Dean on June Z2, 1972. Dean confirmed
that Gray informed him on June 22, 19'''2 that one of the EBI theories
of the case was that it was a CIA operation and Deaa testified that
he reported this to Haldeman and Ehrlichraan on June 23.
Page
~lTa Gray 9 SSC, 3451 . " 122
'l3b,' Dean 3 SSC, 943 123
WtE~: Objsation has been raised by Congressman Seibevling that the^
first sentence is a conclusion rather than a statement of information
within the Rules of Procedure of the Committee.
(121)
13a L. PATRICK GRAY TESTIMONY, AUGUST 3, 1973^ 9 SSC 2451
3451
assist liim in his inquiry. I asked ^Iv. Dean if lie would he reporting
directly to the President or tliroui^di Mr. II;ildem;uior Mr. Ehrlichniau.
He informed me that he would be reporting directly to the President.
At this meeting witli Mr. j^ean there was no discussion of whom
we were going to interview or where our leads might take the investi-
gation. We did discuss the scheduling of White House interviews
til rough Mr. Dean and his sitting in on the inten-iews as counsel to
the President.
On Thursday. June •2-2, 1972, after being briefed by ]\Ir. Charles W.
Bates, Assistant Director, General Investigative Division, regarding
the latest developments in the Watergate case and undoubtedly as a
result of information developed at that briefing, I telephoned Director
Helms of the CIA. I told him of our thinking that we may be poking
into a CIA operation and asked if he could confirm or deny this. He
said he had been meeting on this every day with his men, that they
knew the people, that they could not figure it out but that there was no
CIA involvement.
I met again vrith ^Ir. Dean at 6 :30 p.m. the same da}- to again discuss
the scheduling of internews of White House stati' personnel and to
arrange the scheduling of these interviews directly through the Wash-
ington field office rather than through FBI headquartei-s. At this meet-
ing I also discussed vvrith him our very early theories of the case;
namely, that the episode was either a CIA covert operation of some
sort simply because some of the people involved had been CIA people
in the past, or a CIA money chain, or a political money chain, or a
pure political operation, or a Cuban right wing operation, or a com-
bination of any of these. I also told !Mr. Dean that we were not zeroing
in on any one theory at this time, or excluding any, but that we just
could not see any clear reason for this burglary and attempted inter-
cept of communications operation.
I lielieve that it was at this meeting on June 22 that I told him of
our discovery of a bank account in the name of Bernard Barker, who
was arrested in the Watergate biirglary, and the fact that a $2r),000
check associated with Kenneth Daldberg and four check-s drawn on a
Mexican bank payable to Manuel Ogarrio, in the total amount of
$89,000, were deposited in the Barker account. I do not have a clear
memory of telling him about my telephone call earlier in the day to
Director Helms regarding the question of CIA involvement. It is
likely that I would have discussed the Helms call with him in connec-
tion with our discussion of the theories of the case, since ilr. Helms
had informed me that there was no CIA involvement.
On Fiiday, June 23. 1972. Mr. Bates met with me again to brief me
on recent developments. I telephoned Mr. Dean following my meeting
with Mr. Bates. I am quite certaitt that this call again involved tlie
Barker bank account and the Ogarrio and Dahlberg checks. Either in
this call or in the meeting of the preceding evening Mr. Dean first
raised with me the idea that if we persisted in our efforts to investi-
gate this Mexican money cliain we could uncover or become involved
in CIA operations. I remember telling Mr. Dean in one of these early
telephone calls or meetings that the FBI was going to pursue all leads
aggressively unless we were told by the CIA that there was a CIA
interest or involvement in this case.
(122)
13b JOHN DEAN TESTIMONY^ JUNE 25, 1973^ 3 SSC 943
943
tolfl — and I do not recall specifically v.-ho told me this — that this money
had absolutely nothin": to do with the Waterprate ; it was unrelated and
it was merely a coincidence of fact that Liddy had used Barker to
cash the checks and Liddy had returned the money to Sloan. I was told
that the investigation of tliis matter which appeared to be connected
with "Waterprate but wasn't, was unfounded and would merely result
in an unnecessary embarrassment to the contributors. AccordLntrly,
^ritchell and Stans both asked me to see if there was anything the
T\liite House could do to prevent this unnecessary embarrassment. I,
in turn, related thesa facts to both Kaldeman and Ehrlichman. On
June 22, at the request of Ehrlichman and Haldeman I went to see
Mr. Graj' at this ouico in the early eveninir to discuss the Dahlberg and
Mexican checks and determine how the FBI was proceeding with these
matters. Mr. Gray told ma that they were pursuing it by seeking to
interview the persons who had drawn the checks.
It was during my meeting with Mr. Gray on June 22 that we also
talked about his theories of the case as it was b-eginning to unfold. I
remember well that he drew a diagram for me showing his theories. At
that time Mr. Gray had the following theories: It was a setup job by
a donble agent; it was a CIA operation because of the number of
former CIA people involved : or it was someone in the reelection com-
mittee who was responsible. Gray also had some other theories which
he discussed; but I do not recall chem now, but I do rememoer that
those I have mentioned wer« his primary theories.
Before the meeting ended, I recall that Gray and I agnin had a brief
discussion of ih.a ixroblems of an investigation in the White House.
Graj' expressed his arwarene^ of the notential Droblems of such an
invesagation^ and also told me that if I needed any information I
should call either Mark Felt or himself. Gray also informed me that
he was going to meet with the CIA to discuss their possible involve-
ment and he would let me know the outco.Tie of that meeting.
On June 23 I reported my conversation with Gray of the preceding
evening to Ehrlichman and Haldeman. We discussed the Dahlberg
and the Mexican checks, and the fact that the FBI was looking for
answers regarding these checks. I had the impression that either Ehr-
lichman or Haldeman might have had a conversation with someone
else about this matter'but th43 was mere speculation on my part at that
time.
Within the first days of my involvement in the coverup, a pattern
had developed where I was carrying messages from ilitchell, Stans,
and MardJan to Ehrlichman and Haldeman — and vice versa — about
how each quarter was handling the covemp and relevant information
as to what was occurring. I was also reporting to them all the informa-
tion I was receiving about the case from the Justice Department and
the FBI. I checked with Haldeman and Ehrlichman before I did any-
thing. One of the few sets of early documents evidencing this working
relationship with Haldeman and Elirlichman relates to responding to
Larry O'Brien's letter of June 24 to the President requesting the
appointment of a -special pros<?cutor. I have submitted these documents
to the committee.
[The documents referred to were marked exhibit Xo. ^4-17.*]
•See p. 1161.
(123)
14. ■ Haldeman's testimony before the Senate Select Committee
coniirms that Dean reported to him the FBI's concern about
CIA inv-olvement, and that Haldeman in turn reported this to the
President, who ordered Haldeman and Ehrlichman to meet with
the CIA officials to insure that the FBI investigation not expose
any unrelated covert operation of the CIA. The uncertainty-
regarding the possibility of uncovering CIA activities was
recognized in a memo dated June 28, 1972 from Helms to
Walters. . »
Page
.1X4^/ Haldeman 7 SSC, 2884 126
_14b^^ Memo from Director Helms to Deputy
Walters, June 28, 1972 127
(125)
14a H.E. UALDEMAN TESTIMONY, JULY SO^ 1973, 7 SSC 2884
28S4
is tliat the ProsideiAt was not directly involved himself and lie ■was
not told by anyone until rklarch', when "lie intensified his own inve.-5ti;;-a-
tion. Even then, he was jriven conllicting: and nn\erihed renotts that
made it impossible to determine tlie precise truth repardin^' "Water-
gate or the coverup and, at tlie outset at least, he was relyin^^ {irimar-
il}' on one man, John Dean, who has admitted that iie was a major par-
ticipant in the illejral and improiier coverup, a fact unloiown to the
President until March 1073.
Any attempt on my part at this time to tn,- to identify those, wlio
participated in, directed, or knew of the illegal coverup would of ne-
cessity be based totally on hearsay.
CONTAIXitEXT
There was a concern at the ^Yllite House that activities which had
been in no way related to Watergate or to the 1972 political campaign,
and which were in the area of national security, would be compromised
in the process of the Watergate investigation and the attendant pub-
licity and political furor. The recent public disclosure of the FBI
wiretaps on press and XSC pereonnel, the details of the Plumbei-s
operations, and so on, fully justifies that concern..
As a result of this concern and the FBI's request through Pat Gray
to John Dean for guidance regarding some aspects of the Watergate
investigation, because of the possibility of CIA involvement, the Presi-
dent directed John Ehrlichman and me to meet with the Director and
Deputy Director of the CIA on June 23. We did so and ascertained
from them that there had not been any CIA involvement in the "Water-
gate affair and that there was no concern on the part of Director Helms
as to the fact that some of the W\atergate participants had been in-
volved in the Bay of Pigs operations of the CIA. We discussed the
Wliite House concern regarding possible disclosure of non-Watergate-
related covert CIA operations or other nonrelated national security
activities that had been undertaken pre\'iously by some of the Water-
gate participants, and we requested Deputy Director Walters to meet
with Director Gray of the FBI to express these concerns and to
coordinate with the FBI, so that the FIBI's area of investigation of
the Watergate participants not be expanded into unrelated matters
which could lead to disclosures of earlier national security or CIA
activities. ' '
Walters agreed to meet with Gray as requested. I do not recall
having any other communication, or meeting, with Waltei-s, Helms, or
Gray on this subject. I did not. at this meeting, or at any other time.
ask the CIA to participate in any Watergate coverup. nor did I ever
suggest that the CIA take any responsibility for the Watergate break-
in. I believe that the action I "took with the CIA was proper, according
to the President's instructions, and clearly in the national interest.
There were a number .of newspaper stories and allegations raised
daring the period following the Watergate break-in that posed new
questions regarding the facts of Watergate or related matters. 'Wlien-
ever any such questions arose, the President would again ask that the ■
facts be ascertained and made known publicly as completely and
quickly as possible, but there alwavs seemed to be sonie reason whv
(126)
14b. RICHARD HELMS MEMORANDUM, JUNE 28. 1972.
r\r-T. 2o Jur.a 1912.
ISy.OHAliDU:'! FOR: Deputy Eiractor
SUBJECT: Uatergata I'SxoSr
1. Acting Director Cr^y of the FBI 'phonad r.a this ^rr-^S^
to cai^cel o-^ r.eeting r^ched^oled for 2:30 fnis afterr.oon. he xnaz-
ccted that he vovad not be able to get togetner xm.il r.e:c. '--;- -^
t;^a ^ that I vould be a.-ay but that youvould be avaalaole_^
u^; the opportunity of frds call to' r^a'.e te.o poLyls to Acti.-;.g Direc-«r
C_,-,. 1) That I iv-ould anoreolEto his cs-lir.g oli ir.-orv^--.... y.J.v.1 (-^^
V;:^.- Lnd Jtfna Ca.T;eU rthis ha agrood to do); and 2) .r^y r,=r.na:.h_
y.ox^r Dalilborg vas no agent oj. uha wxA anv^ o.-i. v-^i —u '^^ ^
i'^tlted that'cur last veriliable -ontact^.rith.l^ wa.^-y^l?ol^
Act'ii- Director Gray conTirrr.sd th^t xh>s n.3 xhe Ga;r.2 Ke.^.o.h D^.-b.-g
tS;^° S;; he vas inquiring .3 .oon as I identified tne gen^lo^ as
the President of Do^hlbcrg Cor.pa:-.y in. l-Lr.ncapolLS. rs<^^^
2 ■ I inforr.-.ed a--.d •<^Vd^ -.ncminV, in prenara-
t^on for the schcd-uled ir.eeting this aft-:=moon, that the Agency xs ,a.-
tc-otins to "distance itself" iron: this inves-xga-oion ^^J^^J'f ; -_^.„_
vanted tho:a along as -'reference files-;^ ^'"fl^Zi^-.^:-^^^^
tion iraen reauosoea. i ■cola v,a3... ....a., - .^.jtu-c -^ = ^ _ o
---^ion Qi hypothasGs or any eixcrt r%acu^ to cc-jecturG acoa^.
esT^^ri'-
oib^lity o- likelv objectives of the VJatcrgaT^s ir.--^icn. In .n..^^^
oio— i-y o- x^v^ . .^ .-^ „^ ^^ -V:. TTOT v^ 1st sera csrc3 cn»tnc -cabi.e.
at such a r.cezzT.g, xt j.s up oO ..3 - -^^ .<i^^j i>^^ ^^ ^_^ _^,._ ^
Obhcndse, ;.e are unable to be cf help, m -'^"r"- ;^_!;tit t^T^^^
to the request that they confir.e ther^cives -o^;.n. -^^-71:1 t^^^
arrested or direct?- under suspicion c^d tna. 3:nsy_c2Sa^._^-.c .^_^_^
pandin- this investigation into oth.er areas vr^ or. ^z, ..e^, ev ..^...--
yun arCoul of o'.-..r operatxor^.
3. Tlu-G brinso you ux>-to>dato as of 3:00, 2S June,
Kichird Kelr^
Director
(127)
15, The President stated on iMay Z2, 1973, that it
did seem possible to him that because of the involv^ement of
former CIA personnel, the investigation could lead to the
uncovering of covert CIA operations totally unrelated to the
Watergate break-in. The President stated he was also concerned
that the Watergate investigation might lead to an inquiry into
the activities of the Special Investigations Unit, Gray testified
that on July 6, 1972, the President told him to continue to
conduct his agressive and thorough investigation of the Watergate
aifair.
Page
15a President's statement. May 22, 1973,
(9 Weekly Compilations of Presidential
Documents 693-697) 130
.15b Gray 9 SSC, 3462 135
(129)
ISa. PRESIDENT NIXON STATEMENT,
DOCUMENTS, 693-97.
MAY 22, 1973, 9 PRESIDENTIAL
inzi^, who is now an associate judge of the U.S. Court
Mr. S.-unpson has been Acting Administrator of Gen-
eral Scr\-ices since Jvine 2, 1972. He joined the GentnU
Ser^■ices Administration in 1969 as Commissioner of the
Federal Supply Sen-ice. From 1970 to 1972 he was Com-
missioner of the Public Buildings Service in GSA and the
first Deputy Administrator of GSA for Special Projects.
He came to the Genei-al Services Admiiustration alter
6 years in Pennsylvania State govcmment, where he was
sccretap/ of admini'itration and budget secretary under
Gov. Raymond P. Shafer, aaid deputy secretary for pro-
curement, department of property and supplies, under
Gov. William W. Scranton. Prior to entering government
service, he was employed by the General Electric Co. for
1 2 year^.
Mr. Sampson was bom on October 8, 1926, in Warren,
R.I. He received his B.S. degree in business adminis-
tration from the University of Rhode Island in 1951 and
has done graduate v/ork at the George Washington
University.
Active in several professional organizations, Mr. Samp-
son was presented the Synergy III Award for outstanding
contributions toward the advancement of architecture by
the Societ)' of American Registered ."'chitects in 1972.
1973 he was selected as one of the Top Ten Public
'■'irivs "slen of the Year, and he was named an honorary
mber of the American Institute of Architects.
He and his wife, Blanche, have four children and reside
in Wa.saington,. D.G.
NOTz: for the PrMident's statement upon announcing his intention
to namlnare Mr. Sampion, s£t: the prei:e<ling item.
The Watergate Investigation
Statement! by the Prendfrnt. May 22, 1973
Recent news accounts growing out of testimony in the
AVatergate investigations have given grossly misleading
impressions of many of the facts, as they relate both to my
own role and to certain unrelated acdvities involving na-
tional security.
^Mready, on the basis of second- and third-hand hearsay
testimony by persons either convicted or themselves under
investigation in the case I have found myself accused of
involvement in acdvities I never heard of until I read
about them in news accounts.
These impressions could also lead to a serious misunder-
inding of those national security activities which, though
.My unrelated to \Vat.?rj;ai:e, have bfcnme entangled in
L..e cf e. Ti'.cy could lead to further compromise of sensi-
t'.ve natitinal security information.
PSES1D6NTIAI. DOCUMENTS: RICHASD NIXON, 1971
I will not abandon my responsibilitir;. I will continue.
to do the job I w.TS elected to do. -
In the accompanying statement, I liave set forth the
facts as 1 know them as they relate to mv own role.
With regai-d to the specific allegations that have been
made, I can and do state categorically;
1. I had no prior knowledge of the Watergate
operation.
2. I took no part in, nor was I aware of, any subsequent
efforts that may have been made to cover t:p
Watergate.
3. At no time did I authorize any offer of executive
clem.ency for the Watergate defendants, nor did I
know of any such offer.
4. I did not know, imtil the time of my own investiga-
tion, of any effort to provide the Watergate defend-
ants with funds.
5. At no time did I attempt, or did I authorize others
to attempt, to implicate the CLA. in the Watergate
matter.
6. It was not until the time of my own investig-ation
that I learned of the break-in at the office of !Mr.
EUsberg's psychiatrist, and I speci.*ically authorized
the furnishing of this information to Judge Bvme.
7. I neither authorized nor encouraged subordinates to
engage in illegal or improper campaign tactics.
In the accompanying statement, I have sought to pro-
vide the background that may place recent allegations in
persf>ective. I have specifically stated that executive
privilege will not be invoked as to any testimony cor\cern-
ing possible criminal conduct or discus-sions of pos-sible
criminal conduct, in the matters under investigation. I
want the public to learn the truth about Watergate and
those guilty of any illegal actions brought to justice.
Allegations surrounding the Watergate affair have so
escalated that I feel a further statement from the President
is required at this time.
A climate of sensationalism has developed in ■^vhjch
even second- or third-hand hearsay charges are headlined
as fact and repeated as fact.
Important national security operations which them-
selves had no connection with Watergate have become
entangled in the case.
As a rc-sult, some national security information has
already been made public through court orders, through
the subpoenaing of documents, and through testimony
wtnesses have given in judicial and Congressional pro-
ceedings. Other sensitive domments are now threatened
with diiclcsvirc. Continued silence about tho« operations
would compromise rather than protect them, and \vou'd
aoo .'^cive to pe^-peiuatc a grosslv distorted v-cw- — wh:fa
recent partial dL'^closnres have given — of the nafcre arc!
purpose of these operatioriS.
(130)
«94
15a. PRESIDENT NIXON STATEMENT, MAY 22, 1973, 9 PRESIDENTIAL
DOCUMENTS. 693-97.
PXESICEMTIAL DOCUMENTS: RICHASD NIXON, 1973
The purpose of thb statement is threefold;
— First, to set forth the facts about my own relatiortship
to the Watergate matter;
— Second, to pbcc in some perspective some of the more
sensational — and inaccurate — of the charges that have
filled the headlines in recent das-s, and also some of the
matters that are currently being discussed in Senate testi-
mony and elsewhere;
— Third, to draw the distinction between national secu-
rit)- operations and the Watergate case. To put the other
matters in perspective, it will be necessary to desciibe the
national secarity operations first.
In citing these national security matters, it is not my
intention to place a national security "cover" on Water-
gate, but rather to separate them out from Watergate —
and at the same time to explain the context in which cer-
tain actions look place that were later misconstrued or
misused.
Long before the Watergate break-in, three important
national security operations took place v/hich have subse-
quently become entangled in the Watergate case.
— The first operation, begun in 1969, was a program of
Nviretaps. AH were legal, under the authorities then exist-
ing. They were undertaken to find and stop serious
national security leaks.
• — The second operation was a reassessment, which I
ordered in 1970, of the adequacy of internal security
measures. This resulted in a plan and a directive to
strengthen our intelligence operadons. They wer« pro-
tested by Mr. Hoover, and as a result of liis protest they
were not put into effect.
— ^The third operation was the- establishment, in 1971,
of a Special Investigations Unit in the \Vhite House. Its
primary mission was to plug ]ezks of \'ital security Lnfor-
mation. I also directed this group to prepare an accurate
history of certain crucial national security matters which
occurred under prior administrations, on which the Gov-
ernment's records were incomplete.
Here is the background of these three security opera-
tions initiated in my Administrauon.
1959 WrRETAPS
By mid-1959, my Administration had begun a number
of highly sensitive foreign policy iniuanvcs. They were
aimed at ending the war in Vit-tnam, achieving a settle-
ment in the Middle East, limiting nuclear arms, and estab-
lishing new relationships among the great powers. These
involved highly secret diplomacy. They were closelv inter-
le'.'.tcd. Leaks or i.ecret Lnlonnntion about any one could
c;:d:uigt-.rali.
Exacdy that happened. Neivs accounf. appeared in
1 959, v/hich were obviously based on leaks — some of them
initiatives unless further leaks could be prevented. T,'
required finding the source of the leaks.
In order to do this, a special program of wiretaps %■
instituted in mid-1959 and terminated in February 197
Fewer than 20 taps, of varying duration, were involve
They produced important leads that made it possible
tighten the security of highly sensitive materials. I authr
ized tills entire program. Each individual tap was undc
taken in accordance with procedures legal at the time a;
in accord with longstanding precedent.
The pereoris who were subject to these wiretaps we:
determined through coordination among the Director c
the FBI, my Assistant for National Security Aitaire, ar.
the Attorney General. Those wiretapped were selected c
the basis of access to the information leaked, material i
security files, and evidence that developed as the inquu
proceeded.
Information thus obtained was made available to senic
officials responsible for national security matteis in ordt
to curtail further leaks.
The 1970 Intelugence Plan
In the spring and siimmer of 1970, another sect-ri:
problem reached critical proportions. In March a wav
of bombings and explosions struck college campuses an
cities. There were 400 bomb threats in one 24-ho'.ir perir
in New York City. Rioting and violence on college can
puses reached a new peak after the Cambodian ocierr.ric
and the tragedies at Kent State and Jackson State. Th
1969-70 school year brought nearly 1,800 campus dcr.-
onstrations and nearly 250 cases of arson on campus. Man
colleges closed. Gun battles between gnerrilla-sr/le gTOi;C
and police were taking place. Some of the disn.;ptivc at:
tivities were receiving foreign support.
Comphcating the task of maintaining security was th
fact that, in 1955, certaLn types of undercover FBI op-r
ations that had been conducted for many years had bee'
susf>ended. This also had substantially impaired our abU
ity to collect foreign intelligence information. At thcsam.
time, the relationships bctivecn the FBI and other b\:t':V:
gence agencies had been deteriorating. By May 1970, FB
Director Hoover shut off hb agency's liaison wkh the CI.'
altogether.
On June 5, 1970, I met with the Director of the FB"
(Mr. Hoover), the Director of the Central Intelligrr.c
Agency (Mr. Richard Helms), the Director of the D^
fense Intelligence .Agency (Gen. Donald V. Bi-nnett). ?-n
the Director of the Nation.-'.! Sc-curiry .A^enr-- ■' \"--
Gayl'-r). 'tV'e d;.^ri-.i"<:d th? '.'.r^-nt r.-:d for '■ ■
gence operr.tions. I np-jointed Tj'irf-c'or !;-. .v:;-
chairman of an interagency commjttes to prepn.re reccr.
mendations.
(131)
ISa. PRESIDENT NIXON STATEMENT, MAY 22, 1973, 9 PRESIDENTIAL
DOCUMENTS. 693-97.
r?.65IDENIIAL DOCtiMENIS: RICHASD NIXON, 1973
m.-inoranclurn of the optloru approved. /Vfter recoa.sider-
aVi'un. ho-.vever, prompted by the oppo.siiion of Director
Hoover, the agencies were notified 5 days later, on July 23,
that the'appro^val had been rescinded. The options Laidally
approved'had included resumption of certain intelligence
operations %vhich had been suspended in 1966. Tlise in
turn had included authorization for surreptiLious entry —
brealvin? and entering, in effect— on specified categories
of tar-rets in specified situations related to national
security.
Because the approval was withdrawn before it had
been implemented, the net result was that the plan for
expanded intelligence activities never went into eflect.
The documents spelling out tliis 1970 plan are ex-
tremely sensitive. They include — and are ba.s«d upon —
assessments of certain foreign intelligence capabUirJa and
procedures, which of course must remain secret. It was
this imused plan and related documents that John Dean
removed from die White House and placed in a safe
deposit box, giving the keys to Judge Sirica. The same
plan, still unused, is being headlined today.
Coordination among our intelligence agencies con-
'nued to fall short of our nadonal security needs. In
july 1970, having earlier discontinued the FBI's liaison
with the CIA, Director Hoover ended the FBI's normal
liaison \v-ith ajll other agencies except the White House.
To help remedy this, an Intelligence Evaluation Com-
mittee was created It December 1970. Its members in-
cluded representadves of the White House, CL\, FBI,
NSA, the Departments of Justice, Treasury, and Defense,
and the Secret Service.
The Intelligence Evaluation Committee and its staff
^v■ere Instructed to improve coordination among the in-
telligence community and to prepare evaluations and esti-
mates of domestic intelligence. I understand that its
activities are now under investigadon. I did not authorize
nor do I have any knowledge of any iUegil activity by
this Committee. If it went beyond its charter and did en-
gage in any illegal acdviues, it was totally without my
knowledge or authority.
The Specul Investigations Untt
On Sunday, June 13, 1 97 1 , The New York Times pub-
h'shed the first installment of what came to be known as
''The Pentagon Papers." Not until a few houis before
publication did any responsible Government official know
hat they had been stolen. Most officials did not know they
-xr.tcil. i\o senior oTricial of the Coveramcnt had read
tncni. (.'f kac-.y with ccrt.i.inty what the/ contained.
.\t! the Government knew, at first, was that the papers
compri.sed 47 vokimefi and some 7,000 pages, which had
been taken from the most sensitive files of the Departments
of S;?.'i- nnrl Dpffrx;- nnrl the Cf \, rnverin'' militarv and
Moreover, a majority of the documents published with
the first three installments in The Times had not heea
included in the 47-volume study — raising serious ques-
tions about what and how much else might have been
taken.
Tliere was every reason to believe this was a security
leak of unprecedented proportions.
It created a situation in which the ability of the Gov-
ernment to cany on foreign relations even in the best of
circumstances could have been severely compromised.
Other governments no longer knew whether they could
deal v/ith the United States in confidence. Against the
background of the delicate negodadons the United States
was then involved in on a number of fronts — with regard
to Vietnam, China, the Middle East, nuclear arms limi-
tations, U.S.-Sovict relations, and others — in which the
utmost degree of confidentiality was vital, it posed a t.hreat
so grave as to require extraordinary actions.
Therefore during the week following the Pentagon
Papers publication, I approved the creation of a Special
Investigations Unit within the White House — which later
came to be known as th; "plumbers." This ^vas a small
group at the Wliite House whose principal piirpos<: was
to stop security leaks and to investigate other sensitive
security matters. 1 looked to John Ehrhchman for the
super/ision of this group.
Egil Krogh, Mr. Ehrlichman's assistant, was put in
charge. David Young was added to this unit, as were
E. Howard Hunt and G. Gordon Liddy.
The unit operated under extremely tight security rules.
Its existence and functions were known only to a very few
persons at the AVhite House. These included Messrs.
Haldeman, Ehrlichman, and Dean.
At about the time the unit was created, Daniel EUs-
berg \vas identified as the person who had given the Penta-
gon Papers to The New York Times. I told Mr. Krcgh
that as a matter of first priority, the unit should find out
all it could about Mr. ElLsberg's associates and his m.otives.
Because of the extreme gravity of the situation, and not
then knowing \vhat additional national secrets Mr. Ells-
berg might disclose, I did impress upon Mr. Krogh the
vital Importance to the national security of bis assign-
ment. I did not authorize and had no knowledge of any
illegal means to be used to achieve this goal.
However, because of the emphasb I put on the crucial
importance of protecting the national security, I ca.n
understand how highly motivated individuals could have
felt justified in engaging in specific acriviries that I would
have dlsaoproved had ihev been bmught to my .itteTirinn.
Cfinsequendy, as i're;idei'.t, I uuisc aiid do .'. . ; :-
.sponsibiliry for j'lch actions dixspitt the fact t!-^-; • . ,
time approved or had knowledge of them.
I also assigned the unit a number of other investigatory
matters, dealing in part widi compiling an accuracc rec-
ord of events rcla'.cd to the Vletna.-n war, on whir?; ;h;
(132)
X'
'15a. PRESIDENT NIXON STATEMENT, MAY 22, 1973, 9 PRESIDENTIAL
DOCUMENTS, 693-97.
PRJSIDEHTIAI. DOCUMfNIS: fICHAJO . ^C < 1973
records ha\in!; been removed wth the change of adminis-
trations) and which bore directly on the negotiations then
in progress. Additional assignments included tracing down
other national security leaks, including one that seriously
compromised the U.S. negotiating position in the SALT
tai:«.
The work of the unit tapered of! around the end of
1971. The nature of its work was such that it involved
n: -rs that, from a national security standpoint, were
highly sensitive then and remain so today.
These intelliijcncc aclivitja had no connection with the
break-in of the Dernocradc headquarters, or the af tcmath.
I considered it my responsibility to see that the \Vater-
gate investigation did not impinge adversely upon the na-
tional security area. For example, on April 18, 1973,
when I learned that Mr. Kunt, a former member of the
Special Investigations Unit at the White House, was to
be questioned by the U.S. Atiorney, I directed Assistant
Attorney General Petersen to pursue every issue involving
\Vatergate but to conRne his investigation to AVatergate
and related matters and to stay out of nadona! security
matters. Subsequently, on April 25, 1973, Attorney Gen-
eral Kleindjenst informed me that because the Govern-
ment had clear evidence that Mr. Hunt was involved in
the breai:-in of the ofncc of the psychiatrist who had
treated Mr. EUsbei-g, he, the Artomey Gerreral, believed
hat despite the fact that no evidence had been obtained
from Hunt's acts, a report should nevertheless be made to
the court trying the Ellsberg ca-^e. I concurred, and di-
rected that the Liformation be transmitted to Judge Byrne
immediately.
Watergate
The burglary and bugging of the Democratic National
Com<mittee headquarters came as a complete surprise to
me. I had no inkling that any such illegal activities had
been planned by persons associated with my campaign;
if I had known, I would not have permitted it. My im-
mediate reaction was that those guilty should be brought
to justice, and, with the five burglars themselves already
in custody, I assumed thaT they would be.
■Within a few days, however, I was adwed that there
was a possibilif/ of CI.A involvement in some way.
' \ ' ■"— - I
It did seem to rne possible that, because of the involve-
ment of former CL'\ personnel, and because of some of
their apparent associations, the investigation could lead
to the uncovering of covert CIA operations totally unre-
lated to the Watergate break-in.
In addi;ion, by thi-- time, the name of Mr. Hunt had
sui-faccd in connection with Watergate, and I was alerted |
the fact that he had pr>-"'.iou?lv b/rr-n a member of the .
pjcial [!n>-;r;gation-- Unit in the ''.Vnice House-. Inere- [
tore, I was also concerned that the Watergate investigation (
might well lead to an inquiry into the activities of the I
Special Investigations Unit it-elf. I
In this area, I felt it was important to avoid disclosure
of the details of the national security matters with which
the group was concerned. 1 knew that once the existence
of the group became Ijiown, it would lead Lnc.xorably to
a discussion of these matters, some of which remain, cvoii
today, highly sensitive.
I wanted justice done wth regard to Watergate; but in
the scale of national priorities with which I had to deal —
and not at that time having .any idea of the extent of
political abuse v/hich \Vatergate reiiected — I also had to
be deeply concerned with ensuri.ig that neither the covert
operations of the CIA nor the operations of the Special
Investigauons Unit should be compromised. Therefore,
I instructed Mr. Haldeman and Mr. Ehrlicliman to ens^ure
that the investigation of the break-in not c^^po^i: either an
unrelated covert operation of the CIA or the activities of
the White House investigarions tinit — and to sec that this
was personally coordinated between General Walters, the
Deputy Director of the CIA, and Mr. Gray of the FIJI.
It was certainly not my intent, nor my wish, that the in-
vestigation of the \Vatergate breai-in or of related acts
be impeded in any way.
On July 6, 1972, I telephoned the Acting Director of
the FBI, L. Patrick Gray, to congratulate him on his
successful handling of the hijacking of a Pacific Southwest
Airlines plane the previous day. During the conversation
Mr. Gray discussed with me the progress of the Water-
gate invesngation, and I asked him whether he had talked
with General Walters. Mr. Gray said that he had, and that
General \Valters had assured him that the CI.A was not
involved. In the discussion, Mr. Gray suggested that the
matter of Watergate might lead higher. I told him to press
ahead with his investigation.
It now seems that later, through v/hate\'er complex of
individual motives and possible misunderstandings, there
were apparently wide-ranging efrorts to limit the inves-
tigation or to conceal the possible involvem.ent of m.em.bers
of the Admi.nistmtion and the campaign committee.
1 was not aware of any such efTorts at the time. IVeither,
until after I began rny own investigation, was I a\vare of
any fundraising for defendants convicted of the break-in
at Democratic headquarters, much less authorize any such
fundraising. Nor did I authorize any offer of executive
clemency for any of the defendants.
In the weeks and months that followed Watergate, I
asked for, and received, repeated assurances tltat Mr.
Dean's own investigation (which included reviewing .^iles
and sitting in on FBI interviews with White House per-
sonnel) had cleared everyone then em.ployed by the White
House of involvem_ent.
In summ.ary, then:
( 1 ) I had r.o y.rior knoivlcdgr- c^; the Wa-:=rgf,;c Lug-
ging operation, (j\- of any iiir.-gal surveiilaricc acr:v:::..-". \cr
ptilitical purposes.
(2) Long prior to the 1972 campaign, I did set in
motion certain internal security- mc:isiirrs, including I,-gai
(133)
ISa.
PRESIDENT NIXON STATEMENT, MAY 22, 1973, 9 PRESIDENTIAL
DOCUMENTS, 693-97.
PRsSIDcNTlAL DOCUMWI5: RICHASO NIXON, 1973
wirer.-'.pi, \vhich I felt were necessary from a national secu-
ri:v standpoint and, in the cUmatc then prevailing, also
neces.^ar\' from a domestic security standpoint.
(3) People who had been involved in the national
sccurit\- operations later, without my knowledge or ap-
proval,' undertook illegal activities in the political cam-
paign of 1972.
(■r) Elements of the early post-Watergate reports led
me to saspect, Lncorrecdy, that the CIA had been in som.e
wav involved. Tliey also led me to surmise, correcdy, th.nt
since penons originally recruited for covert national secu-
rity activities had panicipated in Watergate, an unre-
stricted investigation cf Watergate might lead to and
expose those covert nadonal security operations.
(5) I sought to prevent the e.xpa-.ure of these covert
national security acdvities, while encouraging those con-
ducting the investigadon to pursue theii' inquiry into the
Watergate itself. I so instructed my start, the Attorney
General, and the Acting Director of the FBI.
(6) I abo speciiicaUy instructed Tvlr. Haldem^an and
Mr. Ehrlichman to ensure that the FBI would not carry
its investigation mto areas that might compromise these
covert national security activities, or these of the CIA.
(7) At no time did 1 autliorize or know about any
offer of executive clemency for the Watergate defendants.
Neither did I Imow until the time of my own investiga-
tion of any eftorts to provide them with funds.
Conclusion
\\'hh hindsight, it is apparent that I should have given
more heed to the warning signals I received along the
way about a \Vatergate cover-up and less to the
reassurances.
With hindsight, several other things also become clear:
— 'With respect to campaign practices, and also with
respect to campaign finances, it should now be obvious
that no campaign in history has ever been subjected to
the kind of intensive and searching inquiry that has been
focused on the campaign waged in my behrjf in 1972.
It is clear that unethical, as well as Qiegal, activities
took place in the course of that campaign.
None of these took place with my spcclfi-c approval or
knowledge. To the extent that I may in any way have
contributed to the climate in which they took place, I did
not intend to; to the extent that I failed to prevent them,
I should have been more vigilant.
It was to help ensure against any repetition of this in
the future that last week I proposed the establishment of
a top-le\el, bipartisan, independent commission to rec-
ommend a comprehensive reform of campaign laws and
practices. Given the priority I believe it deserves, such
cform should be possible before th-: next Congrcisional
c-l-ctioni in 197r.
— It now appears that there \vcre persons who may
have gone beyond my directives, and sought to expand on
my elTorts to protect the national security operations in
order to cover up any involvement they or certain others
might have had in ^Vatergate. The extent to which tl^ls is
true, and who may have participated and to what degree,
are questions that it wotdd not be proper to address here.
Ilie proper forum for settling these matters Is In the
courts.
— To the extent that I have been able to determine what
probably happened in the tangled course of this affair, on
the basis of my own recollections and of the conflicdng
accounts and evidence that I have seen, it would appear
that one factor at work was that at critical points various
people, each with his own perspective and his own re^pon-
sibilities, saw the same situation \viih different eyes and
heard the same words with ditlerent ears. \Vhat niigilt
have seemed insignificant to one seemed significant to
another; what one sav/ in terms of public respoasibiiiry,
another saw in terms of political opporturJty; and nti.xed
through it all, I am. sure, was a concern on the parr of
many that the Watergate scandal should not be allov.'ed to
get in the way o£ what the Admiiilitration sought to
acliieve.
The truth about Watergate should be brought out — in
an orderly way, recognizing that the safeguards of judicial
procedure are designed to find die truth, not to hide the
truth.
With his selection of Archibald Cox — who served both
President Kennedy and President Johnson as Solicitor
General — as the special supervisory prosecutor for matters
related to the case, Attorney General-designate Richard-
son has demonstrated his own determination to see the
tiTJth brought out. In this effort he has my full suppoi-t.
Considering the number of persons involved in this ca:e
whose testimony might be subject to a claim of executive
privilege, I recognize th.at a clear deSnition of that claim
has become central to the effort to aixive at the trutii.
Accordingly, executive privilege %vii] not be invoked as
to any testimony concerning possible criminal conduct or
discussions of possible criminal conduct, in the matters
presendy under investigation, including the Watergate af-
fair and the alleged cover-up.
I want to emphasise that this statement is liraited to
my own recollections of what I said and did rclatiiig to
security and to the Watergate. I have spediically avoidrd
any attempt to explain what other parties may have said
and done. My own information on those other matten Is
fragmentary', and to some extent contradictor)'. Additional
information may be forthcoming of which I am unawire.
It is also my understanding that the Lnformation which
has been conveyed to me has also become available to
those prosecuting these matter;. Under such cL-c;;:;i-
stancc.-i, it ^vouid he piejuTutial a.;..; u:.iajr oi me
rnv opinions on the activities o; o;r.e.-s; t.ncse j':
must be left to the judicial procc;^, our hcsi hn-y .--r
achieving the just result that wc all seek.
(134)
16b. L. PATRICK GRAY TESTIMONY, AUGUST 2, 1973. 9 SSC 3462.
3-162
for any one man or f,n-oiip of men to control an FBI invest i/^ation even
if one wished to do so.
After General AValtei-s left the olliee. I sat at mv desk qnletly and
niiilh'd over our conversation. I was confused, uncertain and uneasy.
1 was concerned enough to believe, that the I'resident would be
informed.
I decided to call Clark ]\racGre;zor to request that he inform the
I'l'csident of wliat 1 would tell him. I decidett on Mr. MacGregor
because I knew he was close to the Pivsidcnt and liad his confidence.
At 10:ol a.m.. Thursday, July G. 1072, I spoke to Mr. ^facGregor
at vSau Clcmentc. Calif., via "^Miite House- switchboard and 1 told him
that Dick "Walters and T were imeasy and concerned alx)ut the confu-
sion that existed o\-cr the past 2 week's in determining witli certainty
whetlier there was or was not CTA interest in people that the FBI
wishes to interview in connection ■with the Watei-gate investigation.
These, of course, are not my exact words but thiey do e.xpress the
thoughts that I conveyed to him.
Again, although these are not the e.xact words. I also conveved to
him the thor.ght that I felt that people on the White House staff were
careless and indilYeient in their use of the CIA and the FBI. I also
expressed the thought that this activity was injurious to the CIA and
the FBI, and that these AVhite House staff people were wounding the
Piesident.
I a.sked if he would idease inform the President, and it is by best
recollection that lie said lie would handle it.
Tliirty-seven minutes later, at 11 :2S a.m. on Thursday, July 6, 1972.
the President called me. He expressed his congratulations to the FBI
and a.sked that I express his con.ftratulations to the agents in San
Franci.sco who successfullv terminated a hiiackinfr there the previous
day. I thanked the President and then said to him, and to the very
best of my recollection these arc the words :
ilr. I'residenf, there i«! somothinpr I wnnt to speak to yon about.
Pick Walter;; anri I feel th:it people on yoiir .'^taff are tryinj: to mort.nll.v wound
yon by using the Cr.\ find I'BI and by confusing the question of CI.V interest in,
or not in. peoplf the FBI wi'^lies to interview.
I have just talked to Clark MacGregor and asked him to .speak to you about
this.
There was a slight pause and the President said. "Pat, you iust con-
tinue to conduct your a^'^rressive and thorouirh iiivesii.'mtion."
Followimr this conversation I experienced no further concern's"?)!
this kind. I believed that if there was anything to the concerns I
expressed to the President or to INEr. ^VlacGregor that I would hear
further in the matter. I did not. Frankly, T came to the conclu.sion that
General Walters and I liad been alarmists, a belief I held for many
months.
General Walters came to my office airain on July 12, 1972. At this
meeting he apparently gave me a memorandum which, I am now
informed, contained infomiation to the effect that the CI.V fui-nished
certain aliases to Liddy and Hunt and certain paraphernalia to Hunt.
ITntil I brieffv saw a copy of this memorandum this snrino- in the
offices of the H.S. Attorney for the District of Colnnil)ia containing
a, notation of its receipt in my handwritinor. I had no recollection of
this memorandum. I still do not recall noting its contents at the time.
(135)
16. The President indicated that he was unaware that Gray
had destroyed documents found in Hunt's safe when toid by
Henry Peterson on April 17, 1973.
Page
16a Transcript, April 17 , 1973, 2:45-3:49 p.m.,
p. 1098 13 8
16b Transcript, April 16, 1973, 1:39-3-25 p.m.,
p. 910 139
(137)
16a. WHITE HOUSE TRANSCRIPT OF APRIL 17, 1973, 2:45 - 2:49 P.M.
MEETING. 1098.
-39- 1C38
HP Yes sir - I'll tell you what happened. He said
he met with Ehrlichman - in Ehrlichman's office -
Dean was there and they told him they had some
stuff in Hunt's office that v;as utterly unrelated
to the Watergate Case. They gave him two manilla
envelopes that were sealed. He took them. He says,
they said get rid of them. Dean doesn't say that.
Dean says I didn't want to get rid of them so I
gave them to Gray. But in any event. Gray took
them back, and I said Pat where are thev, and he
said I burned them. And I said -
P He burned them?
HP I said that's terrible.
P Unrelated - only thing he can say v/as - he did it
because it was political stuff I suppose?
HP Well, you know, the cynics are not going to believe
it was unrelated.
P Oh yes of course.
HP I said, did you read it?
P Who handed it to him. Dean? Who knows the contents?
HP Dean and Ehrlichman. Dean — Gray says he never
looked at it - never read it.
P Did Dean? - did we ask Dean what the contents
were?
HP I didn't ask Dean because he said it was -
(138)
16b. WHITE HOUSE TRANSCRIPT OF APRIL 16, 1973, 1:39 - 3-25 P M
MEETING. 910.
SiO
-69-
HP We're going to go back to him again.
P (Inaudible). I'll get you out of here. (Inaudible) yet.
HP By the way Mr. President, I think that.
P (Inaudible) evidence -- not evidence? (Inaudible) explain that
the evidence was not evidence --is that right? The stuff out
of his safe?
HP Well -- that's.
P What would you get after him on this -- destruction of evidence?
HP Well you see the point of it is -- there are two other items that -■
according to the defense -- Hunt's defense -- that were nnissing.
Both of v^hich were notebooks.
P -Hunt's notebooks?
HP And we can't find those notebooks. Dean says. Fielding says,
and Kehrli says, they have no recollection of those notebooks.
P Yeah-
HP Hunt says they were there, and --
P So --
HP So only to the extent that the notebooks are missing which Hunt
says they're germane.
P (Inaudible) doe he tell us very much, huh?
HP No sir
(139)
>ifi>
17. Dean did not disclose until November 2, 1973, while being
questioned by attorneys of the Special Prosecutor's office, that
he had personally destroyed documents from Hunt's safe.
Page
7a"! Hearing, before the Honorable John J. Sirica
in U.S. District Court Criminal No. 18Z7-72,
November 5, 1973 [42
(141)
17a. TRANSCRIPT OF PROCEEDINGS , UNITED STATES v. LIDDY, NOVEMBER 5, 1975,
3-4
3
[ P J^-C C J: i; D I N G G ]
TIli: DHPUVV CIW-.-:: CriiniuuJ Action No. 1827-72,
United StCvteG of Ar.i'; ric-.-. vc;i;u'; l-.. Ilcv.ard Hunt, James V,'. McCord,
Bernard L. Barker, ;3'.:.gc.nio R, >;?.rtinez, Frank A. Sturgis and
Virj^ilio R. Gonzaler. . •
Mr. Philip L;-.C'JV"c'.!a and Mr. Richard Ben-Venistc,
CO im s e 1 for the g o v c; rn r. c i • " ,
Mr. Sidnc-)" Spchs , counsel for Mr. Hunt.
Mr. Bernard L. P.-instsr'.cald, counsel for Mr. McCord.
Mr. Daniel li. S-'.ultz, counsel for Messrs. Barker,
Martinez, Sturgis a:id Goji^alaz.
Till: COURT: Mr. Shultz --
MR. SlIULTZ: Ye^, Your Honor.
THH COURT: As to the' defendants whon you . represent ,
do yoa waive their right to be present here today?
MR. SHULTZ: Yes, I do. Your Honor.
THE COURT: Mr. Shultz, I vill hear you with reference
to the motion filed by your clients to withdrav? their pleas of
guilty. I will allov; yoi; one half-hour and then I v/ill allow
the Goveminent one lial.-r-iiuur to ansv/er.
MR. BEN-VnX'lSin : May I make a brief statement of
facts?
THE COURT: Yes.
Mix- BEM-Vj'iAlSTr. : Your Honor, this is m conn-./ct i on
i with the motion made by ti'c defendant I'unt and it relates to
(142)
17a. TRANSCRIPT OF PROCEEDINGS, UNITED STATES v. LIDDY, NOVEMBER S, 1973,
3-4
cvi.l;- ice vhich lias j-cccr.tiy coi.'.e into our possession fro;:; Juha
]■! . Dcr.;-; III. As you knov.', Your Monor, Mr. Dean pleaded r;ui:ty
jl on 0ct.S:;3i- 19t]'. before tiiis Court and following that time we
i; he'd ccc'si-jn. 'CO interview Iiini from time to tiiuc but tiie
■I
Ij
I dove lop:.;-:;;-. •:!; ever tue last few \/eeks iniiibited us to soTie
1: c;:£c.'-': fro--, doing t!-."it as tlioroughly as v.'e would like. Uo\;cvcx-':
I ' ^
I last ^-ridaVj while v/c v.cve in Court, members of our staff |
I iniiorviev.-r-i Mr. Duan vsiO. questioned hiiu with respect to tlia |
i !
I concerts of Mr. Hunt's safe. Tliis was the first occasion on }
t
i v.";iicn r''er:bers or tnc Special Prosecution Force had the |
opportimit].' to question hir,\ about this natter. Mr. Dean rejatc^
that at sor.'.e time in late January, 1973, he discovered a file
folder in !iis office containing the President's estate plc.'.i., J
tv;o clotii-boimd notebooks with cardboard covers and lined pa^es
containing: some handwriting. Dean at that tir.ie recalled that
tliese had co^T.e from Howard Hunt's safe. Dean did not look at I
the contents and cannot recall v;hat inight have been m thsr.i.
He assur-.ed it related to tlie Ellsberg break-in. He shredded
both noteboolcs in liis slircdder. |
At the sa-ie time lie also discovered a pop-up address |
book containing sons names with eacli page x-d out in inlc. Dean ■
j threv/ this pop- up notebook into the w^ste basket at the tiue.
i T;iesc ai'e facts, of course, \v!iich defease counsel sliould. k::
I
about. V.'c are apprising tli.?: Court of tliep. at this tir'.e for
lliat purr.oi'.c. It i-r- viur h'-'ii-F ti-.-i+ «'-;>- ri-^.-w ,..,'• -■
(143)
18. The Prc:sideni; was •anav/ciro prior lo Mnrch Zl, 1973,
that jVIagrnder and Porter perjured theiii.selves lo a gratid j-a-y.
On April 17, 1973, the President advised Ehrlichr?ian and
Haldeman against perjury.
Page
18a Transcript, March 21, 1973, 1 0: 12 - 11 :55 a. m,
pp. 182-183 146
18b Transcript, April 17, 1973, 12:35-2:20 p. m.
p. 1022 148
NOTE: Objection has been raised by Congresswoman Hottzman and Congress-
man Seiberlino that the first sentence is a conclusion rather than a
statement of information within the Rules of Procedure of the Committee.
(145)
18a. WHITE HOUSE TRANSCRIPT OF MARCH 21, 1973, 10:12 - 11:55 A.M.
MEETING. 182-83.
13 182
D From Magruder, long after the fact.
P Magruder is (unintelligible)
D Yeah. Magruder is totally knov/ledgeable on the v/hole thing.
? Yeah.
D Alright now, we have gone through the trial. I don't know
if Mitchell has perjured himself in the Grand Oury or not.
P V7ho?
■ ■I ■■!■»■ I ■!! I 1 ill I f> II I H II 11—11 ■ II
D Mitchell. I don't knov; how much knowledge he actually had.
I know that Magruder has perjured himself in the Grand Jury.
I knov; that Porter has perjured himself in the Grand Jury.^
P VJho is Porter? (unintelligible)
D Ho is one of Magruder ' s deputies. They set up this scenario
v;hich they ran by me. They said, "Kov; about this?" I said,
"I don't know. If this is what you are going to hang on,
fine."
P What did they say in the Grand Jury?
D They said, as they said before the trial in the Grand Jury,
that Liddy had come over as Counsel and we knew he had
these capacities to do legitimate intelligence. We had.no
idea what he was doing. He was given an authorization of
$250,000 to collect infom\ation, because our surrogates were
out on the road. They had no protection, and we had information
that there were going to be demonstrations against them,
and that we had to have a plan as to what liabilities they
(146)
18a. WHITE HOUSE TRANSCRIPT OF MARCH 21, 197Z, 10:12 - 11:55 A.M.
MEETING. 182-83. — —
183 '
vrere going to be confronted v/ith and Liddy was charged with
doing this. We had no knowledge that he was going to bug
the DNC.
P Tlie point is, that is not true?
D That's right. '
"P Magruder did know it was going to teke place?
D Kagruder gave the instructions to be back in the DNC.
P Ee did?
D Yes.
P You know that?
D Yes.
P I see. O.K.
D I honestly believe that no one over here knew -that. I. know
that as God is my maker, I had no knowledge that they were
going to do this.
P Bob didn't either, or vTouldn't have kno\'.Ti that either. You
are not the issue involved. Had Bob known, he would be.
D Bob — I don't believe, specifically )aiew that they were
going in there.
P I don't think so. .
D I don't think he did. I think he kne-i'/ that there was a
capacity to do this but he was not given the specific
direction.
P Did Strachaji know?
(147)
18b. WHITE HOUSE TRANSCRIPT OF APRIL 17, 1973, 12:35 - 2:20 P.M.
MEETING, 1022. .
- J6 - 1' ?.^
rl month. He's been --
P I called him this morning and told him I wanted to
talk to him later to ask him about that appointment
June 19, but I don't think I better get into that
any more.
E I don't either.
P And, and he's going to give me some song and dance.
E -Well (unintelligible) for your private information, I have
gone back to the participants in that meeting where I
was supposed to have said, "send Hunt out of the country. "
To a inan, they say it didn't happen. And two of them
said, "Gee if either one of them --"
P What about the meeting?
E And they said, " If that had happened, it would have been
burned into my recollection. " The sort of thing like
you ordering --
You better damned well remember being -- The main
thing is this, John, and when you meet with the lawyers -•
and you Bob, and I hope Strachan has been told --
believe me -- don't try to hedge anything before the
damned Grand Jury. I'm not talking about morality,
but I'm talking about the vulnerabilities.
Sure, good advice.
Huh?
(148)
19. John Dean advised the President on March 21, 1973,
of Hunt's demand for approximately $1Z0, 000 for legal fees and
family support. The President explored the option of meeting
Hunt's demands so as to secure the time needed to consider
alternative courses. The President was not concerned with
the possible Watergate related disclosures, but rather which
disclosure of the National Security matters Hunt had been in-
volved in as a member of the Plumbers.
The President advised Dean that the money could not
be paid because it would look like a cover-up. At another point
in the conversations the President requested advice as to w^hether
or not the money should be paid. Later the President concludes
that Hunt will blow the whistle no matter what is done for him.
Page
19a Transcript, March 21, 1973,
10:12-11:55 a.m., p. 224 150
19b Transcript, March 21, 1973,
10:12-11:55 a.m. , p. 197 151
19c Transcript, March 21, 1973,
10:12-11:55 a.m. , pp. 236-237 152
19d Transcript, March 21, 1973,
10:12-11:55 a.m. , p. 242 154
19e Transcript, March 21, 1973,
10:12-11:55 a.m. , p. 243 155
(149)
19a. WHITE HOUSE TRANSCRIPT OF MARCH 21, 197Z, 10:12 - 11:55 A.M.
MEETING, 224.
55 _ 22^
H Right.
P He is playing hard hall v.'ith regard to Ehrlichman for
example, and that sort of thing. He knov/s what he's
got. .
H Vvliat's he planning on, money?
D Money and — - :
H Really? .' •..
P It's about $120,000. That's vrhat. Bob. That would be • ,
easy. It is not. easy to deliver, but it is easy to get.
Nov; , ._ •
H If the case is just that way, then the thing to do if the
thing cranks out. „__
P If, for example, you say look we are- not -go'iYig to continue
to — let's say, frankly, on the assumpizion that if ■ we con-
tinue to cut our losses, we are not. going, to v;xn . But in
the end', v;e are going to be bled to death. . And in . the end,
it is all going to come out anyv.'ay ; Then you get the worst
of both worlds. We are going to lose, and people are going
to — .
H And look like dopes'.
P And in effect, look like a cover-up. So that we can't do.
Now the other line, however, if you take that line, that
we are net going to continue to cut our losses, that means
then v?e hrive to look squar-e in the eye as to what the hell
those losses are , and see V7hich people can — so wc can
(150)
19b. WHITE HOUSE TRANSCRIPT OF MARCH 21, 1973, 10' 12 - 11- 55 A M
MEETING. 197. '^ ^^.ooa.m.
\ "^^ "> 2 8 • -^ ^^ '
niyht and -- ■- — — — ~-
E It seems to me we have to keep the cap on the bottle that
much, or we don't have any options.
D That's right.
P Either that or it all blows right now?
D That's the question.
P We have Hunt, Krogh. Well go ahead with the other ones.
D Now we've got Kalmbach. Kalnibach received, at the close of
the '68 campaign in January of 1969, he got a million $700,000
to be custodian for. That came do\%'n fi-om New York,
and v;as placed in safe deposit boxes here. Some other people
were on the boxes. And ultim.ately, the money was taken out
to California. Alright, there is knowledge of the fact that
he did start with a million seven. Several people know
this. Now since 1969, he has spent a good deal of this
money, and accounting for it is going to be very difficult
for Herb. For example, he has spent close to $500,000 on
private polling. That opens up a whole new thing. It is
not illegal, but more of the same thing.
P Everybody does polling.
D That's right. There is nothing criminal about it. It's
private polling.
P People have done private polling all through the years.
There is nothing improper.
(151)
19a. WHITE HOUSE TRANSCRIPT OF MARCH 21, 1973, 10:12 - 11:55 A.M.
MEETING. 236-37.
23S
67
thing. Call everybody in tiie White House, and I want them to
come and I vjant theni to go to the Grand Jury.
D This may happen v.-ithout even our calling for it when these —
P Vesco?
D No. Well, that is one possibility. But also when these people
go back before the Grand Jury here, they are going to pull all
these criminal defendents back before the Grand Jury and
immunize them.
P Who will do this?
D The U.S. Attorney's Office will.
P To do what?
To let them talk about anything further- 'they want ' to talk about ,
P But V;hat do they gain out of it? ' --
D Nothing.
P To hell with it!
D They're going to" stonewall it, as it' now stands. Excepting
Hunt. That's why his threat.
H It's Hunt opportunity.
P That's why for your immediate things you "have no choice but to
come up with the $120,000, or whatever it is. Right?
D That's right. ■ i
P Would you agree that that's the prime thing that you damn well
better get that done?
(lo2)
19a. WHITE HOUSE TEMSCRIFT OF MARCH 21, 197 S, 10:12 - 11: 55" A.M.
MEETING. 236-37.
237
68
D Obviously he ought to be given some signal anyway.
? (Expletive deleted), get it. In a way that — who is going to
talk to him? Colson? He is the one who is supposed to know
him? -—- —^
D Well, Colson. doesn' t,- have, any money though. That is the
thing. Thatis-bsen one..of the real problems. They haven't
been able., to .raise -a, millioa-dpllars , in cash... (unintelligible)
has been just, a very difficult problem as v/e discussed before-.
Mitchell has talked to Pappas, and John asked me to call hiia
last night after our discussion and after- you had -'met with
John to see where that was. And I said, "Have you talked,
to Pappas?" He was at home,_and Martha picked up the phone
so it was all in code. I said, "Have you talked to the Greek?".
And he said, "Yes, I have." I said, "Is the Greek bearing
gifts?" He said, "Well, I'll call you tomorrow on that." :
P Well look, V7hat it is you need on that?. When - — I am not _ . .
familiar with the money situation.
D It sounds easy to do and everyone is out there doing it and
that is where our breakdown has come every time.
P Well, if you had it, how would you get it to somebody?
D Well, I got it to LaRue by just leaving it in mail boxes
and things like that. And someone phones Hunt to come
and pick it up. As I say, we are a bunch of amateurs in that
(153)
19d. WHITE HOUSE TRANSCRIPT OF MARCH 21, 1973, 10:12 - 11-55 A M
MEETING, 242.
72
P Yeah. It would get Magruder, and it could possibly get
Colson.
D That's right. Could get —
P Get Mitchell. Haybe , No.
H Hunt can't get Mitchell.
D I don't think Hunt can get Mitchell. Hunt's got a lot of
hearsay.
P Ehrlichman?
D Krogh could go down in smoke.
P On the other hand — Krogh says it is a national security
matter. Is that what he says?
D Yeah, but that won't sell ultimately in a criminal
situation. It may be mitigating on sentences but it v;on ' t ,
in the main matter.
P Seems we're going around the track. You have no choice on
Hunt but to try to keep —
D Right now, we have no choice.
P But my point is, do you ever have any choice on Hunt? That
is the point. No matter what we do here now, John, whatever
ha wants if he doesn't get it — immunity, etc., he is going
to blow the whistle.
D What I have been trying to conceive of is how we could lay
out everything we know in a way that we have told the Grand
(154)
19e. WHITE HOUSE TRANSCRIPT OF MARCH 21, 1973, 10:12 - 11:55 A.M.
MEETING, 243.
o I. '3
73
Jury or somebody else, so that if a Hunt blovjs , so what's
new? It's already been told to a Grand Jury and they found
no criminal liability and they investigated it in full.
We're sorry fellow — And wa don't, it doesn't —
P (Unintelligible) for another year.
D That's right.
P And Hunt would get off by telling them the Ellsberg thing.
D No Hunt would go to jail for that too — he should under-
stand that .
P That's a point too. I don't think I would throw that out.
I don't think we need to go into everything. (adjective
deleted) thing Hunt has dona.
D No.
P Some of the things in the national security area. Yes.
H Whoever said that an^^'/ay. VJe laid the groundwork for that*
P But here is the point, John. Let's go the other angle, is to
decide if you open up the Grand Jury: first, it won't be
any good, it won't be believed. And then you will have two
things going: the Grand Jury and the other things, comjnittee,
etc. The Grand Jury appeals to me from the standpoint, the
President makes the move. All these charges being bandied
about, etc., the best thing to do is that I have asked the
Grand Jury to look into any further charges. All charges have
been raised. That is the place to do it, and not be.f o:re a
(155)
20. At the March 21, 1973, meeting the President after
considering several options seized on the possibility of calling a
new grand jury, thereby delaying Hunt's sentencing and making
the immediate payment unnecessary as a means of buying time.
Not once after this option was explored w^as there any suggestion
that Hunt's demand be met.
The concluding page of the transcript of the March 21,
1973, morning meeting clearly demonstrates tha£ the President
recognizes that any blackmail and cover-up activities then in
progress could not continue.
- Page
20a Transcript, March 21, 1973, 10:12-11:55 a.m. ,
pp. 245-246 158
20b Transcript, March 21, 1973, 10:12-11-55 a .m. ,
p. 249 160
NOTE: Objection has been raised by Congresswoman Holtzman and Congress-
man Seiberling as to whole statement being a conclusion rather than a
statement of information within the Rules of Procedure of the Committee.
(157)
>^ 20a. WHITE HOUSE TRANSCRIPT OF MARCH 21, 1973, 10:12 - 11:55 A.M.
MEETING, 245-46.
75
without a transcript.
D What we need also. Sir
H But John's view is if we make the public statement that wa
talkea about this morning, the thing we talked about last
night — each of us in our hotel, he says that will immadiately
lead to a Grand Jury.
P Fine — alright, fine.
H As soon as we make that statement, they will have to call a
Grand Jury.
P They may even make a public statement before the Grand Jury,
in order to — -
So it looks like we are tirying to do it over,
D Here are public statements, and we want full Grand Jury
investigations by the U.S. Attorneys office.
P If we said that the reason we had delayed this is until after
the sentencing — You see that the point is that the reason
time is of the essence, we can't play around on this. If
they are going to sentence on Friday, we are going to have
to move on the (expletive deleted) thing pretty fast. See
what I mean?
D That's right-
P So we really have a time problem.
The other thing is that The Attorney General could call
Sirica, and say that, "The government has some major
(158)
D
20a. WHITE HOUSE TRANSCRIPT OF MARCH 21, 1973, 10:12 - 11:55 A.M.
MEETING. 245-46.
76
developments that it is considering. Would you hold
sentencing for two weeks?" If we set ourselves on a course
of action.
P Yep, yep.
D See, the sentencing may be in the v;rong perspective right
now. I don't know for certain, but I just think there are
some things that I am not at liberty to discuss with you, but
I V7ant to ask that the Court withhold tv/o v/eeks sentencing.
H So then the story is out: "Sirica delays sentencing
VJatergate" --
D I think that could be handled in a way betv/een Sirica and
Kleindienst that it V70uld not get out. Kleindienst
apparently does have good rapport v;ith Sirica. He has
never talked since this case developed, but
P That's helpful. So Kleindienst should say that he is working
on something and would like to have a week. I wouldn't take
two weeks. I would take a week.
D I v/ill tell you the person that I feel v/e could use his
counsel on this, because he understands the criminal
process better than anybody over here does.
P Petersen?
D Yes, Petersen. It is av/kward for Petersen. He is the head
of the criminal division. But to discuss some of things
with hirr. ., v/e may well want to remove him from the head of
(159)
20b. WHITE HOUSE TRANSCRIPT OF MARCH 21, 1975, 10:12 - 11:55 A.M.
MEETING, 249. .
79
/ ■-'H
H We should change that a little bit.. John's point is exactly
right. The erosion here now is going tCKyou. and that is the
thing that we have to turn off at v/hatever cost. We have to
turn it off at the lowest cost we can, but at v;hatever cost
it takes.
D That ' s what we have to do .
P V/ell , the erosion is inevitably going to come here,, apart from
anything and all the people saying well the V/ateraate isn't a
major issue. It isn't. But it will be. It's bound to,
(Unintelligible) has to go out. Delaying, is the great danger
to the White House area. We don't, I say that the White
House can't do it. Right?
Yes, Sir.
(160)
21. Neither of the participants of the March 21, 1973,
morniag meeting came away with any opinion that the President
authorized payments to Hunt. Haldeman concluded that the
President rejected payments to Hunt. Dean testified: "The
money matter was left very much hanging at the meeting.
Nothing was resolved. "
Page
21a Transcript, April 17, 1973, 12:35-2:20 p.m.
p. 1034 162
21b Dean 4 SSC, 1423 153
(161)
21a. WHITE HOUSE TRANSCRIPT OF APRIL 17, 1973, 12:35 - 2-20 P M
MEETING, 1034. ' ' '
H Could very well be. John, I can't believe, is a basically
dishonorable guy. I think there's no que.stion that John ia a
strong self-promoter, self-motivated guy for his own good; but --
P But in that conversation I was --we were -- I was -- I said, "Well
for (expletive removed), let's --"
H You explored in that conversation the possibility of whether such
kinds of money could be raised. You said, "V/'ell, we ought to be
able to raise --"
P That's right.
H "How much money is involved? " and he said, "Well it could be a
million dollars. " You said, "That's ridiculous. You can't say a
million. Maybe you say a million, it may be 2 or 10, and 11"
P But then we got into the blackmail.
H You said, "Once you start down the path with blackmail it's conatant
escalation. "
F..MC.«^
P Yep. That's my only conversation with regard to that.
H They could jump and then say, "Yes, well that was morally wrong.
What you should have said is that blackmail is wrong not that it's
too costly. "
P Oh, well that point (inaudible) investigation --
H (inaudible)
P You see my point? We were then in the business of -- this was one
of Dean's -- when he was -- was it after that we sent him to Camp
David?
(162)
21b. JOHN DEAN TESTIMONY, JUNE 27. 1973. 4 SSC 1423.
■ .M23
Senator Inoitve. "On JMarcl). "20!:h the President indicated that he
stil! did not havo all the facts."
Mr. D£A>:. l\liat date -was that, Senator ?
Senator Ixoryrs. Mr.rch .^0.
Mr. Deax. The President did not state to me, on the 20th when I
received a call irL^m the President I told liim at that time that I vrould
like to meet witli him the r.exfc rnoiTiing, and I would like to tell him
what I thought the implication of the situation t.us, what had reallj'
prompted me at that time was the new dsmand from ilr. Hunt that
indeed, this thin'?; was getting,' far out of hand, tliat the T\Tiite House
was nov,- being directly subject to blackmail and I did not Imow how
to handle it.
Senator IxorrTii. Is it your testimony that on March 20 the Presi-
dent did in fact Irive all the facts ?
Mr. Dean. I did not hear you, a jjain, Senator, i am sorry.
Senator iNotmE;. Is it your te^ti-iiony that on March 20 the Presi-
dent did not have all tlie facts ?
Mr. Dean-. I do not know -what the President Iznew on March 20.
We liad had conversations hcfo-.-e that. We had conversations that I
was p^:rsonall_y engaged in on September lit of the preceding year. We
had had conv^ersations in early t'ebruar^ or late Febi-uary in which
I tried to start telling him some of my own involvement. We had also
had a discussion on March i;'> about the money demands that. were
being made. At that time he, discussed thefiwt that a million dollai-s
is no problem. He repeated JL:.'".ei:eral 'times. lean veiy'vividly recall
(h.it tiie waj' he sort-of-rollecLhis.chair.badc.from hisdesk and leaned^
over to ]Mr. Haldwnan and said, "A million dollars is no problem,"
and then he cam? barir and "asked ''Well, who is making these demands,"
and I said they are [jrincipallvcorarng-from-Mr.-Huntrand he got into
the fact that Hunt had been given clemency and his conversation about
his" annoyance tha,t he had a!.-,o talked to Colson about this in addition'
to Ehrlichman, and the money matter was left very much hanging at
tnat meeting. Nothing was itsolved. .
.Senator iNourE. As the President's counsel, did you, in -a very legal
fn?hion, advise him of your meetings in February in the Attorney
General's of5ce?
Mr. Dean. IMy channel of reporting was through Mr. Haldeman or
^fr. Ehrlichman. At the completion of the second meeting I sought
oct an appointment with Mr. Plalderaan. I recall ■ .
Senator Inohte. In the subsequent meetings with the President did
you clearly advise him of the break-in, your involvement and, the cover-
"P- '"^nd your involvement?
M"/. Dean. I ceitainly did on the 21st and I had attempted to do it
''■irher in Fcbniai-y but he was not interested in it when I raised it,
and the conversation got cut short. I told him I thought I had an
r*. J"'ction-of-justice problem and gave him, started to give.him-the
nienl'.ghts.-He did not want- to prtrsue-it further.
•Vnntor Inoute. "In the preceding week Dean had begim to express
" Kichard ^Nloorc concern about Dean's own involvement. P.cferring
i^o f .ip^tneetings in Mitchell's ofnce, the plumbers operation and the Ells-
""'" nrcak-in and the demands by Hunt possibly on March 16 for more
monov." •'.':. -^ . .
(163)
Z2. At the March 21, 1973, morning meeting while discussing
the practicality of getting another grand jury the President told
Dean and Haldeman to get Mitchell to come to Washington, so
that Mitchell could raeet with Haldeman, Ehrlichman and Dean.
22a Transcript, March 21, 1973, 10: 12- 11:55 a. m. ,
pp. 247-248. ,
(165)
22a. WHITE HOUSE TRANSCRIPT OF MARCH
247-248
21, 1973, 10:12 - 11:55 A.M. MEETING,^
2'n
11
the Crimir.al Division and say, "That x-elated to this case,
you wiJ.l have no relation." Give him some spGcial assigrira-.-nt
over here v;here he could sit dO\'m and say, "Yes, this is an
obstruction, but it couldn't be proved," so on and so forth.
Vie almost need him out of there to ta]:e his counsel. I
don't think he would want that, but he is the most knov/ledgeable .
P Hov; could we get him out?
D I think an appeal directly to Henry —
P V7hy couJdn't the President call him in as Special ' Counsel to
the White House for the purp05;e of conducting an investigation.
Rather than a Dean in office, having him the Special Coujisel
to represent us before the Grand Jury.
D I have thought of that. That is one possibility.
H On the basis that Dean has now become a principal, rather than
a Counsel,
D I could recommend that to you.
H Petersen is planning to leave, anyway.
D Is he?
P You could recommend it and he could come over and I vrould say,
"Now Petersen, v/e want you to get to the bottom of the damn
thing. Call another Grand Jury or anything else. Correct?
V?ell, now you gotta know whether Kleindienst can get Sirica
to hold off. Right? Second, you have to get Mitchell down
(166)
22a. WHITE HOUSE TRANSCRIPT OF MARCH 21, 1973, 10:12 - 11:55 A M MEETING
247-248
70
here. And you and Ehrlichman and Mitchell by tomorrow.
H Why don't we do that tonight?
P I don't think you can get Mitch-sll that soon, can you?
H John?
P It v/ould be helpful if you could.
D It v'ould ba better if he could co;n.e (lo\-m this afternoori
P It would be very helpfv.l to get going. Actually, I aiT\
perfectly willing to meet with -i-he group. I don't knov/
whether I should.
H Do you think you want to?
P Or maybe have Dean report to me at the end. See v.'hat
conclusions you have reached. I think I need to stay away
from the Mitchell subject at this point, do you agree?
D Uh, huh.
D Unless v;e see, you know, some sort of a reluctant dragon there.
H You might meet v/ith the rest of us, but I aia not sure you would
v/ant to m.eet with John in this group at this time.
P Alright. Fine. And my point is that I think it is good,
frankly, to consider these various options. And then, once
you decide on the right plan, you say, "John," you say, "No
doubts about the right plan before the election. You handled
it just right. You contained it. And now after the election
we have^r'to have another plan. Because we can't for four years
I
I
have this thing eating av/ay." We can't do it.
(167)
35-945 O - 74 - 11
23. Haldeman and Dean left the meeting with the President
at approximately 11:55 a.m. on March 21, 1973. Pursuant to
the President's request Haldeman called Mitchell at approximafcely
12:30 p.m. and requested Mitchell come to Washington. Dean's
testimony confirras this.
Page
23a Haldeman' s Telephone Log 170
23b Haldeman, Watergate Grand Jury Testimony.
January 30, 1974, p. 4-7 172
23c Dean 3 SSC, 1000 , . . 176
(169)
23a. H. R. EALDEMM TELEPHONE LOG, MARCH 21, 1973
't^::C/-fi6^ /:^i
f.
^VVASItINCTON
TELEP: iONE MEMORANDUM
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(170)
/77T
23a. H. R. HALDEMAN TELEPHONE . LOG^ MARCH 21, 1973
THE VVHITh. HOUSE
WASHINGTON
2^^ V
TELEPHONE MEMORANDUM
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(171)
23b. H. R. HALDEMAN TESTIMONY, JANUARY 30, 1974, WATERGATE GRAND JURY, 4-7
i< . . - C-
li
!
7. ! Q Do yoii unclforr. L'liid cl-u-t v:hi3.K "clie Grand. uiiL-y rulers dc
nofc porTT^it you to have- an rj.tl:or-'.ey prosei:r. .in tliiy roon, you
'i ):i<:.y be GMCuned to consult v.'.lch an attcrnc-y outside of th.la
I
j roon' at any t;).:-?,''^ upon requtat to the Fororaan of t!ie Grand Oui-y.
. A I undercjtar.d.
Q For the i-ecorc:. you arc represented today by counsel
in th? preaer.na of llr, V75-lson ur<d Mr. Stric>:ier who are
out::,ld2, iu that correct?
A That is correct.
0 So -tlirit anything you do say should ba said frnoly
i
j and voluntari.ly. Do you understand that?
} A Yes,
! Q And you understand further , as in the past, the
j
fact tliat you have baen advised that you are a potential
target of this Grand Jury's investigation v.'hich means that
you may v/ell be considered as a defendant for purposes of
indictnant by this Grand Jury.
A I understand.
Q Now understanding all of those facts and rights -.v-hic":
you possess, are you prepared to testify tliis norning?
A I £im.
Hi
11
12
13
14
15
16
17
IS
19
20
21
22
23
24
25
[ jpfiniii 'w
, ,1
|,i 0 Itr. H.aldenan, may I direct your attention to the
'i.
5 21st day of March, 1973 and ask vhethsr you recall r.',eeting on
that day v;ith the President ajid John Dean v;ho v;a5 at that tir.e
I
(172)
23b. H. R. HALDEMAN TESTIMONY, JANUARY 30, 1974, WATERGATE GRAND JURY, 4-7
2
^ 6
\>
7
S
9
30
11
12
13
14
15
16
17
18
39
20
.21
22
23
A Yo-, 1 do.
Q And you recall t-ntaring a naeMng vhich v/as then in
progress?
h T3iat'c correct;, yes.
Q Ncr^ followiny ■ij:icit ncoting did there cor.-e a tiraa
i vihsr. yo-a. hrid a conversation v.'ith Jorm i'itchell who vfas then, in
Mew York City on the tclc^ph.one?
/i.
Yes, I am surs; tiisre did. Lst'a see — 2-iarch 21i;t
Yes,
Q Can you give v.s the best of yoiir racollection of tiie
t.iroe of the tc]ep;ions con vers at ion and the .substance of. it?
A I don't have — 1" should qualify n;y previous ans-.v'ex-.
I am cure th.at thei"e was a telephone conversation because one
of the results or one of the outconies of the March 21st niest-
ing with ?-lr. Dean and the President was a request by the
President that Rr. Dean, Mr. Ehrlichraan, Mr. Mitchell and I
meet that day or the follov;ing day to discuas soma of these
questions emd then to report back to the President.
I feel sure that 1 called Mr. Mitchell to request hi;
coming dcr.-.Ti for such a rr.eeting.
j Q V7hat do you reca].l of the conversation betv/een your-
i
I self and Mr. Mitchell?
i
I A That's about all I recall. I am really assurpi-ng
i that there was ouch a call. . I think I called hin. .It is
■::i:-<3i?.s
.'•':.7l3-d 20700
(173)
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2Zh. H. R. HALDEMAN TESTIMONY, JANUARY 30, 1974, WATERGATE GRAND JURY, 4-7
! --- 'J 6
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j }-,•■'.;■: .ible Vh.^ih liOinao:;.^ cO.:j<ri dij iod hiiv... liy tje.'ii-.-r.^J. recoll-icti.c
i
I no;.' v/ould b« that I had calT^^d hin cuid said tl^a;- t.he ?rr'.siau.-.v.
^r-i?j).c-j!; ua to jQcst aiiu arj;ced riLm to co;;";'» dov.Ti.
Q I.y ifc noc -Llie case Ujt.t: ycvi disctirsstd >;ith r.oro
pt:i::.:icnilaritY t ha probleias cLbout wh5-cli tha President ."nuggeste
you. niaet in yov.z' cuavarsation .'^ith Mr. J'IJ-tchel.1?
A Kct that X recall, jro«
0 ICs it ycur testi-ir.oriy that you do not x-acall saying
to ijX. Mitch: -11 in ruh-stance tliat the President requested tha:.-
you in-'iet as to hov; to deal wli-h Mr. Hutit's demand for substan-
tial cash pay;r.ant3?
A YoK. I have no recollection of that being discussed
Q It ifi youx tGotiicony that — is it your testi::^ony
that in the. telephone, conversacion with Mr, Mitchell you di.d
not allude in any vay to the s\ibject inatter abo^it v.hich you
vould be rneating t>i2 follo-/."ing day?
A liy rocollectioa is that the oubjact Taatter about
v?hich we would be Keeting van the general subject of hov? to
deal -with the overall — what has no*.'? becone called the
Watergate £3ituation, as it stood at tliat tine.
I don't recall the point that you raised' as being
the specific subject for the meeting.
Q I'm sorry but your ans'./er is not responsive to irn.'
i queshion, rost respectfully. I asked wh.ether you did not
recall alluding to t'ae subject natter in your telephone
(174)
23b. H. R. HALDEMAN TESTIMONY, JANUARY 30, 1974, WATERGATE GRAND JURl, 4-?
i ;; <^
^-r;\tiC';7 \ J.cli Mr
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J, C'i
n a.lluaj.rc; -Lo thr. :v..i}jJ3c-c Kattor, ; ■
xoc:o?.!l r^chl^),; ^■rOf\i.ci ba t.>!ab ii; I t:i.ccu:;i.c;^ tea sub_;;'-ct. e;2.-Lc:
it vou'.'-d bfj j.u r.ha co/;to.'h thc-t 1 have j\i;^t desc:.;'.'.b£d. Tim
P'lizn.s.'.vC. of cii.': K.:;etiiiij 'w/..^, as 1 recall it, to reviow t-h-
V7ai'.GX"gah6i si-r.izrV-.J.on.
Q
X '..■ J. i1 Ho'C
ict, MTo I."cilcleni3j;i, tliat: In your.- tcj
Tjp-^.'na noii-vT.r;;^
■wivh Mr,. Mitnhf!?! vou iJtrjtec to h5.M lii
ijubstancs, or you a.3}:cd hiir; In f;v!.baLancc;, v/hscher li?. vas yo:
rr- Pnv-'
Hu;^t ' fj prohleTTi?
I clon't recall ^iny rsuch dij^ci
Lo::\, no.
Q Vl^ieii yoii SE^y you do i:;ot. recall any siich cliscru3sic;-i
i iihat voiilcl be t;o:uefcair;y you would x'ccall, v.'O.-.ld it not, if y:
hud such a di;jcu3^-ion?
A I w oulci thiru: ho but I don't .'Jee that^ as having b;
the major point of discusoioa eitiier at the tine of the phorii
call to set up the ineetir.g or at the meeting vhich took plact-
on th<3 22nd.
Q You're talking now again about lir. Hunt'iJ specific
request, is that correct?
A Yes .
Q V?h3n were you first advisad that Hunt was making
such a request or deraand?
A To the bash of rry recollection, the first I knew of
that v/as vmen it was raised in the March 2].st rceeting v.-hon it
(175)
■22g. JOHN DEAN TESTIMONY, JUNE 25, 1972_, Z SSC 1000
iOGO
til? Prc;?ifii,nt ;:\';-:r: -red ^h--A. \" h^ve a mr"o;ii:.r \r\i]\ riliichdl, 'rTdds-
nifiu, aiicl Ehrlio:;:!.;;n lo ciiscius how to deal \\n\i Vixi.i sitiuiiioii. ^VJlat
omsnieul iroin ilr-r di-cu-sion ;"ifi;?.r "(:Taidain:Lii ca/ne into liu- C'll'co v^ns
thai, Jol-!i ?vJ'iicb'?l! should :u-:;oimt loi- lumwoil for the pr--.iur.c» 17
&cuh-ifics and the-, i-resident did rioL soem Cv"i;icc>;ned aboat in?, aotivities
v.-}.ich hadocciirrcd.J'.fl't'rJuncl?. '
After I dep'.rfed the PresidonL's oiHce.I subicciuentlj- vrevi!. ro a liieot-
ing with Haldt.-mr.n and EhrlJclunaii to discitsi the inutter i'iiiihor. The
sum i.nd substfinca of that disc'-ijion was ih;'.f the \v;iy to liajidhi this
now wi,3 ior MitwioU to stt-p loi-.vra-d and if .Mitchf!! wor;' to stc^p
foiTTard TTC mi,C;ht iiofc be cor, fronti-d withth?. af.-.civitif;s ox those in-
volved in the "Wiiit^Kouse in thacorei-up. ,^,,. ..,-.-:..=. .^
Accordingly, Ki-ldc^Ttan, as I recall, callc-d rilitcJiplI and a^hfd hijii \
to coiTiG down the nert day for a moeari-i' witi". liic Prcsid'-nt on th& t
Jn the h\te aitcrnoon of ]\Iaich 21. ITaldemivn and Ehrlicmnan
and I had a second mteting ^vir^^ die President. Eefore cntevirn\ this
rneetinor I ]iad a brief di3cns5;.ion in the Prc-;id'ant's ontProfTicc of the
Executive Ofiicf JJuilding suite v^ith Haldeinan i,n v.-hich 1 tcid him
that we had tTvo options:
One is that tiiis t'ranr:!: ,r:oes all the -^fa.v and der.i.s v-itl; both the. pre-
acti\'itier. and tlie postactivitie.5, or the second alternative; if the
covcnip was to proreed we would have to draw tlie wagons in, a circle
around the '"vn-jtc House and tliat tlie. White Honso" protect itself.
I told Haldeman that it had been (he ^"^llite Ilouse's assist-mcc to the
reelection committee ihat had gotten U3 into much of this proldern and
now the only hoj^e woald be to protect oui;elves fvoni further
iavolvernent.
The meeting with the President that afternoon with ITaldeiuan,
Ehrlichrnan, and myself was a tremendous disappointment lo me
becaiise it was quite clear that the cove nip as far as the AVhite House
was concerned was going to conrinue. I recall that while Hald'.Toan,
Ehrlichman. and I were sitting at a smnll table in front of the Presi-
dent in his Executive Office ])nilding office that I for the first tim.e.
said in fi-ont of the President that I thought that Haldeman, Ehrlich-
man, and Dean were nil indictable for obstruction of iustice and that
was the reason I disagreed with all that was being discussed at that
point in time.
I could tell that both Haldeman, and particularly Ehrlichman, were
very imhappy with my comments. 1 had let them very clearlv kiiow
that I was not going to participate in the matter anv further and that
I thou.'rht it was time that evervbody start thinkinir about telling
the truth.
I again repeated to them I did not think it was possible to per-
petuate the coverup and the important thing now was to get the
President out in front.
^Meetixg Or- March 22
The arrangement? had been made to have a meeting after lunch
with tlie President with Ehrlichminu Haldeman. Mitchell, and myself.
Mr. ^[itchell came to '\Vashingt:cn tliat morning for a meeting in
Haldemaas office in which Ehrlichman. '^Mitchell, Haldeman, and
(176)
24. On March 21, 1973 Dean had a telephone conversation with
LaRue concerning Hunt's request for money and Dean suggested LaRue
call Mitchell. LaRue called Mitchell in the early afternoon of March 21,
1973 and advised Mitchell that he had a request for $75, 000 for Hunt's
legal fees. Mitchell acknowledges that he advised LaRue to pay the money
for attorney fees. During the March 21, 1973 late afternoon meeting with
the President, Dean denied that he. had spoken to either LaRue or Mitchell,
when in fact he had spoken to both.
P^ge
24a 1 Dean, Watergate Grand Jury Testimony,
February 14, 1974, 16 178
24b ' LaRue, Watergate Grand Jury Testimony,
'February 13, 1974, 7-10 179
T^Zic"; Mitchell, 4 SSC, 1630, 1631 183
■24d,' Transcript, March 21, 1973, 5:20-6:01 p. m.
-p. 253 185
(177)
24a. JOHN DEAN TESTIMONY, FEBRUARY 14, 1974, WATERGATE GRAND JURY, 16
ouc
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:.:y or ;:;.:i;.l:er, \;
IRi, hci cl LCI ,'iot. .
Thyreaft: — , cH.d
Yes, 1 did.
hc:c ;n:. Hjn;: \:o\!ld be pai.d?
And \;hau v.'hs trie, ruibstrcncc of that conversation? i
t
fir. T^P.uc; v-'.anted to kno--; •c'h.T.t X v;as j;oin.2 to do i
t
I
prcblea that liad raisedj and X told bJj:;i, nothing;'
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s out of tr.ct buo;'.!;'.= :.:n . \
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H': then .-. ;;l-ved ;:;« linai: X thoi'.;;ht hs should do and •
!
X told hitn I t"houc/l.t he ou2,ht to ta^.k v.o llitcV'-ill about ic_ i
i
Q How, alter the inieting on the list with thi Presi-|
f
i
clout and^ for a porLion. Kr. Kaldeiiiian. did you leara f.vczz \
I
anyons v;hather Mr. 1-iitchell had been contacted ■i-rit.h rsGpeci: !
to ccinlns dc'./n to Wnshingtc.i and aaeting with you^ and I-ir^
Kalder^an and the Prcsldsnt and 25r. Ehrlic^n^an?
A Yen, I did.
Q And V7hsn did you leam that?
A Sornstlme on the 21i;t, I learned it frcra Mr. Plalde-
raan. Originally, it had been hoped tb^t Hr. Hitchsli could
coiTie do'-rn iinnsdiatcl}' but, for come rciison, b.e couldn't ccn;;
do-.-,'n until tb.G next ncrning. So a ir^cetinr; '.Jas scheduled ic
\ the next nornin-. ~"
Q Now, later on in the day, on the 21st, you had a
•r: i;?r:
; Cm:.".
(178)
24b. FRED LARUE TESTIMONY, FEBRUARY 13, 1974, WATERGATE GRAND JURY, 7-10
ii )\ /
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■. -r.onn, (■"o you. .i.^.c^ull wJiotliGr th.'^t v.'as n
t>.:lephonc; crdl in Mr. 15 j. Ltnr:Ji ' :j (if j ice?
h I'iiat -ivc.iild cer:.;l:a-;ly be. i:.y roao.l] •:;cti.Qn lio ccrLair,ly
!.iy £i.'3r.;i'r.ujhio;i t.i'.it the call v.'cmlu /i^'va bi:tn i.^.ac'e thrtiugh h.\s
of i:"icc2, yc:5»
Q If it v;i:LT'?. not to }ii.'i off.lca, if >i:i had left .alre^cli'
it V7oald hava hicri to biu hone, I tnke it?
A That ■'.■^oulf'i be t.j.n'.f--^
0 So you ^■.'oulcl pla(.:i:', that a?: Eoraetinis .ip. thr? Inttor
part of thc^ aftcruoorj cr the Siarly cveniiiy?
A The £i:c;;:t call?
Q Ve.s.
A I voul'.d j-iluce .i-t jji the af to;aioo;i .
Q Mow prior to irunkintj tliat call, X tako it you h.iicl ).iad
dir.-cussions with othnr people concerning v/nethGr to i.iahe this;
deliver^'.
That is corrGct.
r A i V.5r*'.'^«v«
L
Q
A
'i'hat flay had you spoken to fir. Dsan and Mr. Mitchali:
■"■•iji*-^ -t.,*- ^
I!
That is correct.
Q KovJ starting v;ith Mr. Dcau, can you tell us vmat Mr.
1-H;an to3.d you in substance?
A My ber.t rccollect-ion of that phone call is that Mr.
Dean called i-ne. Jic .otated that lie had had a request for a
delivery of money to Mr. Eittman for Mr. Hunt's attorsioys fees
;;n:l for Mr. Hunt's expenac'r., living expenses.
(179)
35-945 O - 74 - 12
24b. FRED LARUE TESTIMONY, FEBRUARY 13,19?4, WATERGATE GRAND JURY, 7-10
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1 I 0 OJ.aV , , ;
2 I 7i Ht; .li;dicat''-u to D'.e t'lat he was pausiiio' thia i/.,'
■L-..:.(.jn on to v.i;> for.- v;]-iatever pVL~-pot:>'^ I '.732"; tsd to uc.V.a of it,
that )
iii t^ic d^llvaxy of monies to thK GO-ca3.1ad Watergate dafeni?..
ancl th-:'.L^X_vould. have to exarcisia luy onn 'judgTT.cnt to dcciuo
v;h£',b to do al'ov.t. this request.
\,-cj.r.. nc .; gc.Lncj to havo ariy f urcb,eri-u v'olv'.;:-.;-.-nt , con.te.;"
I told 21r, Dcian tho.t i.inlc;r,3 I v;cr5 authori~ed by
so~cona that I vrould not risJ^e thia deliv::?^/, at v/hich point
ha suggested that I cell Hr, Mitchell.
"'Q '""Did !;:l, Dc^j,; in that coiivarsation. indicate thit f'..'
'.7CS ci nsnaa oJT urgency' <jj-)OUv; this?
Yes. I recall thst l:ie indJ-cated there vras a sense
-jCV. Vo the bar.;-, of jay recollection he nonticned r-o::.
I thing to the f^Liect th:--c Mi'. Hunt V7as duo to be scnt^jnced, 'S
th:lrJc v.'lthin the: next t'.^o or threa day:3 , and he did Innly a
Bet'.se of urgency about it, yes.
Q i take It Mr. Etean identified an iirr.oiint of r.ioney i:
or Ui
tlie course of that vror.versation thcit Mr. Hunt "waa as'iing for';
. A That is correct. My recollection is that there waf
$75,000 required for attorneys fees, and $60,000 required fo;
his living expenses.
Q Nov; I tajte it you had a conversation V7ith llr.
Mitchell follov.'ing that ^^it): Mr. Dean.
A That is correct-
(180)
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24b. FRED LARUE TESTIMONY, FEBRUARY IS, 1974, WATERGATE GRAND Jmi, 7-10
r,
Q Can yon recaij. za tAic. :j. ■:;':. of ycrcv rccolJ -;.tio;:
ni-ibritcinco of that co-.r^'errjationj'
i
: A A3 It rcl.--l:c:; to the: delivery oc this rr;-.jn.'-'/, I csn , ■
I
! -yes. I told Kr. I'.itcncll of u-.y coiivera;it.' or;, -..'ita Joh;i Dociri,
i
1 indicating tiiat Dean \;rr; not goinj to he .cnvolvod, oC;y fux"cher
I in tlie authori::atiGii and distribution of n'.oney.
I I told Jir. Mitchell that \:-q had had a racfuo^t for
I
I $75,0 00 for Ilr. Hunt. Jle asJced n3 v/hat it v-ras for. I told
hixa to thG bast of v.y }:r:o:>'l&dgG j.t '.;a3 for a.ttoiTiey ' e fees,
! and ho said tliat unaax- tlie circur::ita:iceSf h.c said, ''j; t-hinl;c
you ought to pay it", \.'hich I procasded to do.
Q Is it a fact th.en that you 'didn't I'iention to Mr.
! MitcIio.ll the r-oquGst fo:.; ?G 0,000V —
A This ic my bsst recollection —
Q Mr. LaRue, let me finish the question. $GO,000
for maiiitenance.
A To the bast of rriy recollection this is true, 1
thinX this was a decision 1 made myself. It was certainly
i\ rather large suj-a of noney .Involved, quite frankly approach-
ing the arr.ount of noney v/hich I had on hand at t!:at tir-ie.
The only ajnount of ir.oney I recall discussing with
Mr. Mitchell v;as the $75,000 v;hich was delivered.
Q vriis there anything in the ccnve.r3c-ition you had \';ith
Mr. Mitchell by which Mr. Mitchell indicated that h£> had or
}iad not I\eard of this request earlier than the time of your /^- • i
(181)
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24b. FRED LARUE TESTIMONY, FEBRUABY 13, 1974, WATERGATE GRAND JURY, 7-10
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■^ji -^ Koth-uic; that voulci l)idir:;.co to i--.:: ar.r: wav or tli-^
j| ., '
■i I Culier.
Q Vow in fi.::ing th': or-tc oZ ths;^:i c\-.v-:ts, do ycu
recall that tiie date fo i lev.' .Lng t>i;I.c. cialivc-r^' of xf.oi\-r; vou
6 1| loa-rnad thr'it 21r. MJ.tcJr;ell x,-;:li in T:;.:..Ii;-r. Jtnr.7'
1
"^ ' A r dori't sp^cii:icJ^Ily retrO.i Mr. riitchell boinc- in
Waahinc Lo::* on tiiat particular day. X do rc:.,:ll hini being in
T7ashington a couple of tiii.i:: in this tii^e friu^, but e.o far
; as tils £'p'-:clfic dfJce; I can't, rcicailv
Q Kcr.<' iriiTepentlantly do you have any rocollectioa of
he. preclsa uatc- of -trie requ^cit to r-,r. j:illicr;n to d::liv:-r
A WiEi pi-ocis':; date: of tlie rer-aeat?
Q YcG,
A Tha date v.-ould ba on the day he deliv:;;rsd it. It
v.ould have been that sp&ci.'!;ic dciy.
Q I mean c-xn you recr;ll of your o-.v-n recollection, or
through^einy of your c-rn notary, what day this Vio? Ke kno-^- it
x;a3 in late Idarch from your- recollectinc; the e\5^nt3, but
specifically can you recall the precise day?
A 1 can't cpscifically recall t]is precise day. No,
i sir,
Q All you can ha sure of in that it v/aa tha ovenina
of tha dinner party vith Mr. Unger?
(182)
24o. JOHN MITCHELL TESTIMONY, JULY 10, 1973, 4 SSC 1630-31
1G30
Mv. .'I'.ri-rciTit-L. yps, sir-.
ilr. JJash. Now, ^v■ll^:n rlid yon Ic.ive your p(.iyit!Oii -js Van directtji;
of 'lu- cn.'r;pyi:.'n?
Ih: ]Muc;riiu.t.. On tlie 1 3t o C July ] !/Ti!.
Mr. ])a;ui. .VuJ ^vheii you hii't, you ^v(^n', awa-rc, '.verc. you jiot, tlial.
Mr. iMa;^rr!uc:i- \v;ib stayiu,^ on us deputy ilirc".;t.oi' of the ctinij:.'ug-n.
^^r. ISlrrriirLi,. Yc-s, Ik; stayed on as Mr. AracGregor'u dc-piiLy.
il r. Dasj-i. And were you «ot awa.re 'whou you Avere I&avirig tha-t ]Mr.
]\I;iirrudf;r at bjiisb fac^d i-ome serious ]:)rolileni of beiu;:': indicted on the
break-in of tlio Demociatic National Couiuiittce lieadquartci-s ;is of
Julyl?
Mr. MiTCKii-.TJ,. As of July J l I think t!jf:r. \vas a potential, yes.
ilr. Da.-:h. Now, j-ou did meet with the President on Jiuie MO, 197?-,
just before you left. As I undci-stand, you had luncli with tlie Presi-
dent.
!Mr. jMrroriKi.i .. That is correct-, sir.
]Sfr. D.vsH. Did you thirOc; it your duty to tell the President at that
lunch before you left that thi man who vvsis playing such a key role in
his cainp'; io^n, Ma;>;nider, hnd such n. problem tliat ho nn.rj,iit be iTidicted
lor tho brei\k-ij.i of the Dervocratlc National Committee he-ukiuarters?
?i[r. iIrrcj;i;Li.. Mr. Dash, I think you and I ha.ve gone, o\'er to the
]3oint where we, have established tl\at tlie 'White House horror stories
ha.d come out in connection ^vith tb.e prolilem at that particular time
and there wasn't the question of lifting of the tent slif.';htly in order
to j:et with respect to one inrlividual or another ; it was a ktepinj; tlic lid
on and no ijifor-ma.tion voUnit"ered.
Mr. Dasit. Even if the 1id had been kept on the so-called "White House
horrors, ^^•ouldn't it be very em)jarrawinj.c to the Pre.^ideiit of the
United ^States in his effort to Ive reelected if his deputy campaign di-
rector was indicted in the bi'cak-in of the Democratic National Com-
mittee headquarterr. ?
]\tr. irTTCn f-.i.n. I don't thinlc as far as the "Watergate was concenred,
there was a hell of a lot of dilTerencc between the deputy campaign
director and the counsel for the finance comjnittee and the security
oflicor. Quite frankly, as far as the Watergate was concerned, that wws
already a public issue. It was the parties that were involved.
]\Ir. Dash. There came a lime, did there not, Jlr. Mitchell, that the
pi-essures for money by th? defendants or by Mr. Hunt increased?
"Would you tell Uis what you. know about that?
]Mr. MiTCHKLL. '\Vell. I am not sure, ^Er. Dash, that I can tell you very
much about thern other than the fact that somewhere along in the fall,
INfr. Hunt had a telephone conversation with ]Mr. Colson, which. I
(hink. covered the subject matter and then later on. as I recall, Mr.
Dean has got in the record a letter from Z^^Ir. Hunt to^fr. Colson. which
1 think is quite sugEcestive of the fact that he was beinsr abandoned.
Tlien I heard biter on. in r^larch of this year, there were oral conr-
munications from cither Hunt or his attorney relatin.<r to requesf-s for
leiral fees and so forth, which werecommunieated to the White House^
Mr. DASEr. How did von hear about the ^farch request?
'Mr. Mn-mi-r.T.. Tlie ^farch request? T think I probablv heard about
it fhrou'T'h ^fr. DaTiup, if mv memorv serves me right.
Mr. Dash. Do you know how much money was actually being re-
quested at that time ?
(183)
24g. JOHN MITCHELL TESTIMONY^ JULY 10^ 1973, 4 55C leSO-Zl
1G31
Mv. .MiTCiiEu.. I Ci'ii't really tcU you nbonc- Uie moneys acros.-) tViis
po-r'io;] of time. It FceiU- to ine l!i;i'. tiie M'ai'cli. recjncst liad .some amount
in IIk' area of $75,000 ^■,]licl! ^Er. LaKucclsscribe'.i to me, that v,-;is bo.in^
reciuesiei;[ hy comi-.-l Tor their \i'i^A\ fees in covmectio;i v;ith. il:.e rcp-
re.ier/iatiou of Mr. Tliint.
lsh\ ])a-:;)(. Did M;-. l.'aKue ask you ^■■. liat yoiir oi'jiuiou was or -wlicthcr
he s'u)!ih( jiuy that amoiiiit of money t(^ !\rr. Hunt or I'.is cormsel ?
iVFr. .MiTvVDKr.f . !M;-. lya'/Ine, to the liest of my recfillection, ])iit it \n
tliis coiilex't: I have pt;-. tliis re.'jH''~t, T l^a^•e talked to John D'-.m over
ut the ^Vliilc Kon5ie, tliey are v.oi \n the money Inisiness any more,
uliaLt Mould 3'ou do if ycui ".vere \n my slioes a.iid j-.iio%vlnp- thi't he made
prior payrnentr.? I &nid, if I vrerc yon, I would continae and I \voukl
m;d:e the paymeut.
T\Ir. D.vsu. An-d in that advire to YiT. I.'aRuo, I take if, \-.a:s the con-
sideration that nnlc-;y t^Imt payment was made, 1\\x. l\\\\-X ndght in fact
uncorer the so-called Vrtiite iioufe horror fatoriis.
Ish'. iilrrcHKLT... JEr. Pash, I don't know how you ean move from the
fact that Mr. Lalhie told me that it was for h^al fees to the point
where v.e are uncovering- the Y/i\i:e House horror stories. It )nay be
tile re. 1 don't know.
]\lr. Dasit. "Didn't (hat enter your min.d, the. preF::-iii-e from ]Mr. Hunt,
the fact that you ir,ditated tlieie v.-erc requests and former pre.ssure.^
for money, to the
Mr. .Ali-TCHKLU 1 don'i, lliinl:, ?,Ir. j)a-,h, tlia! in >[:<rch of 1973, 1 hose
things were entcrin^r; n^y niirid, heeansa I think 7\s you are well av.are
froni other testimoiiy, 1 liad refu-vd to even consider raising- money for
these jinrposes a Ion-;; time before tiiat.
Ivlr. Dash. But you are aware that there vras a sum of jnoney avail-
able foi' that at the W'iiite House, were you not?
Mr. ^.frrcHELL. i was aware that there liad been one at one lin^e, but.
I didn't, knov- how far Liddy had gotten into that particular fund.
Mr. Dash. Since the $'i")0,000 had come over from the Conuaittee.
for the Ke-Eleetian of the President to the T^Tliite Hon;
Mr. jNfiTcn>:LL. lliat is the only fuTid 1 v.-as a\\-aie of, jes.
Mr. Dasti. TVliy, Ylv. ^ifitchell^ did you refuse around'that time to
raise any money for the payment of these fees?
Mr. I\iiTC5iELr,. Well, not only around that time, but all other times.
.r have, never raised any money for anything and I was not about to
start for th:it particular purpose.
Mr. Dash. Did 3-ou ever make any suggestions tliat the money that
should be used for that purpose was the $;550,000?
_ Mr. Mitch v.i.L. No, to the best of my recollection, T had a conversa-
tion with Mr. LaRue, 1 am sure at his instance,, not mine, in which he
pointed out that the funds, whatever source they were, that he had for
the support of and the payment of lawyers' fees of these individuals,
had run out, did I know wliether there'was any other money? And 1
Rugirested that maybe you ought to call over to tlie WJiite Hou.se and see
if the S-'laD.noO that had been sitting over there since April vras avail-
aljle for the inirpose. 1 understand'that lie did so.
^Mr. Dasif. Do vou recall attending a meeting in Januaiy with Mr.
Kalmbarh and Mr. Dean in which you asked Mr. Kalmbach to help
raise mioney for these legal fees and siiijport of families? That occurred
in January 1073.
(184)
24d. WHITE HOUSE TRANSCRIPT OF MARCH 21, 1973, 5:20 - 6:01 P.M. MEETING,
n '' 'i
I -:. o
P IIov.';;verf c£c\ he, by te.'king;. gal: a pardon? CAei: : w.jj^^ frora
th-; Cor.rt"''
D Obviously \-^:i has uho^;■^"it of thi:j. If h'i; \;i-:---& in tLr^^je and
tails this .;iudgs baf Cfr^=; .sei^ho.;ciii j , if hs; says, '"Your 'honor
I ISA v?ilJing to tell all. I dx-J^c i-:'£Uit to go to juil. I
plead gnilty to on offonKe. I:S I don't havo to go to jail,
I vill coiipsrate vith you and. the gover3Mr;;^.'.t. I \vill tell
you everything 1 kj^o-;." 1 chink that probcbly he v;ould
riiceive very iavcrtiil:; corisidaration„
p "io.cAX. hxA taen tio thi point \';c ka.ve tO; th^^ bridg^; ■ive have
to cross bhcr:;-ii. that ^cu b.ava to cross I 'C-'-ilej-Stcnd quite
soon, is \yh-:".t you do about Huiit c-id hif:= preiient fins^uos?
VJhcit do vx-. 6.0 about that?
D Ue]l appiirei^riy Mitchell eaid Laliue ■Dire nov? aware .oi it
so they kno\; how ha i;j feeling.
P Trv..o. Are they going to do soiT.ot.hing?
D Well, I have not talked with either of thorn. Their
positions a.re sy^.ipathotic.
P V7ell, it is ai long road isn't it? Whan you look bocl:
on it, as Jolin has pointed out h'jro, it ree.lly has
been a long road for all of you, of us.
H It sure is.
P For all of us, for all of us. That's why you are wrestling
with the idea of moving in another direction.
D That's right. It is not only that group, but v/ithin this
circle of people, that have tidbits of knowledge, there
(185)
25. Having received information on March 21, 1973 of possible
obstruction of justice having taken place following the break-in of the
DNC, the President promptly undertook an investigation into the facts.
The record discloses that the President started his investigation the
night of his meeting with Dean on March 21st, as confirmed by Dean
in his conversation with the President on April 16, 1973. At the
meeting with Mitchell and the others on the afternoon of March 22nd,
the President instructed Dean to prepare a written report of his earlier
oral disclosures.
Page
25a Transcript, April 16, 1973 10:00-10-40 p. 801... 188
25b Transcript, March 22, 1973, 1:57-3-43 p.m.,
p. 282-283 189
2 5c Transcript,
p. 309 191
(187)
25a. WHITE HOUSE TRANSCRIPT OF APRIL 16, 1973, 10:00 -10:40 A.M. MEETING
801 '
14
P But I did ask you and I think you should say the President 801
authorized me to say this — I won't reveal the conversation
with the President — he asked me this question. I told
him this, that nobody in the White House was i.nvolved . And
in additioTT to that to the best of my ability i kept, I guess,
or how do you think you should handle this Presidential
advice? Maybe you Detter —
D Well, i think the less 'said about ~you', T think you say any-
thing you want to say anything about it.'
P V'fell , let me tell you I am going to handle that properly
and I just wanted to be sure that it jives with the facts.
I can say that you did tell me that nobody in the 'ifliite
House was involved and I con say that you' then came in, at
your request, and said, "I think the President needs to hear
more about this case."'
D That's right.
P Then it v/as that night that I started my investigation.
D That's right — that was the Wednesday before they were
sentenced. Now I can get that date
P Would you do this. Get your chronology of this. Wednesday
you cama in and told me that, et cetera. That would be
helpful for me to have. That is when I frankly became
interested in the case and I said, "Mow (expletive omitted)
I v/ant to find out the score." And set in motion
Ehrlichman, Mitchell and — not Mitchell but a few otliers.
OK?
O Sure.
(188)
25b. WHITE HOUSE TRANSCRIPT OF MARCH 22, 1973, 1:57 - 3-43 P M MEETING
282-83 ' '
282
13
(inaudible) (two i,ieniora.ndu!ti that the courts have public records)
P We tried that move, John —
J4 VJellf I did too — before Mr. President. But now that the
indictment has come out (inaudible) has the feeling that
they 'have the documentation back of it. Now that the bag
has come out.
D' I think the proof is in the pudding, so to speak — it is
how this document is vnritten and until I sit dov.'n and vjrite
that document. I have done part of it so to speak. I
have done the Segretti thing and I am relatively satisfied that
we don't have any major problems there. As I go to part A —
to the VJatergate — I haven't v?ritten — I liaven't gone tJirough
the exercise yet in a real effort to write such a report, and I
really can't say luitil I do it v.'here v;e are and I certainly
think it is something that should be done though.
P What do you say on the V^atergate (inaudible)
D We can't be complete if v.'e don't know, all we .know is what,
is what —
P It is a negative in setting forth general information involving
questions. Your consideration — your analysis, et cetera.
You have found this, that. Rather than -going into every news
story and every charge, ct cetera, et cetera. This, this this,
put it down — I don't know but
D I don't think I can do it until I sit down this evening and
start drafting.
H I think you ought to hold up for the weekend and do that and
(189)
25b. WHITE HOUSE TRANSCRIPT OF MARCH 22, 1973, 1:57 - 3:43 P.M. MEETING,
282-83
233
14
get it done.
P Sure
H Give it your full attention and get it done.
P I think you need -- why don't. you do. this? V/hy 'don't you go
up to Camp David?
D I might do it, I might do it.
P Completely away from the phone. Just go up there and
(inaudible) I want a written report.
E That would be my scenario. He presents it to you at your
request. You then publish — (inaudible)
"" I knov/- that but I don't care.
You are not dealing v;it)i the defendants on trial. You are
only dealing v/ith Ifnite House involvement. You are not
dealing V7ith the campaign.
U That's where I personally...
P You could write it in a v-^ay that you say this report was not
coniment on et cetera, et cetera, but, "I have reviev7ed the record,
Mr. President and without at all compromising the right of
defendents and so forth, some of whom are on appeal, here are the
facts with regard to m.embers of the White House staff et cetera,
et cetera, that you have asked me about. I have checked the
FBI records; I have read the Grand Jury transcripts —
et cetera, et cetera.
'■' As a matter of fact you could say, "I v/ill not summarize
some of the FBI reports on this stuff because it is my
understanding that you may wish to publish this." Or you
(190)
25c. WHITE HOUSE TRANSCRIPT OF MARCH 22, 1973, 1:57 - 3:43 P.M. MEETING,
309
303
40
P Do you thi:a}c \:q want t:o go this route now? Let it hang out
so to spea];?
D v;ell, it isn't really that —
H It's a limited hang out.
D It is a limited hang out. It's not an absolute hang out.
P But some of the questions look big hanging out publicly
or privately.
D \ihat it is doing, Mr. President, is getting you up above
and av;ay from it. That is the most important thing.
P Oh, I know. I suggested that the other day and they all
Cciir.e do\\Ti negative on it. Now v;hat has changed their minds?
D Lack of candidate or a body.
H Laughter.
M (Inaudible) V?e v;ent down every alley.
P I feel that at a very minimum v/e've got to have this
statement. Let's look at it. I don't know what it —
where in the hell is it — If it opens up doors, it opens
up doors -- you know.
H John says he is sorry he sent those burglars in there — and
thiit helps a lot,
P That's right.
E You are very welcome, sir.
(Laughter)
H Just glad the others didn't get caught.
P Yeah, the ones he sent to Muskie and all the rest; Jackson;
(191)
26. Although Dean was instructed to go to Camp David and write
a report on March ZZ, 1973 by the President, Dean denied this and later
testified before the Senate Select Committee that he was never requested
to write a report until Haldeman called him after he arrived at Camp
David.
Page
26a Dean 4 SSC 1385 194
(193)
26a. JOHN DEAN TESTIMONY, JUNE 27, 197Z, 4 5SC 1385
13S5
}\h\ Dean. "Well, the President called me on tlv; 23d. In the meeting
on the 22d — I miixht mention this : As early as February, when I had a
meeting with the. President, he asked me liad 1 ever spent any time up
at Camp David ? I said no, I hadn't, I had been up there to a meeting
once riglit after the election, a very brief meeting with Ehrlicliman
and Kaldeman. He said, you and your wife ought to go up there on
some weekend, it is an excellent place to go. He mentioned that on a
number of occasions and 1 told my wife, I said, the President Jias been
very gracious in saying that you should go to Camp David and men-
tioned it to her. -.^
Senator GrmxEx. At any rate, you did go to Camp Da-rid, sort of
understanding that you were going to write a report about Watergate,
is that riiiht?
ilr. Dean. iN'o, sir. "WTien the President talked to me on the 23d, I
had talked to O'Brien that morning about the fact that in court,
Mr. ISIcCord's letter had been read by Judge Sirica. O'Brien reported
from somebody who had told him at the courthouse.
I called Ehrlichman, and Ehrlichman said he had a copy of the let-
ter and read me a copy of the letter and asked me what my assessment
of it was. Based on my conversation with O'Brien, I told him that it
seemed at best that all McCord has is hearsay.
It was then much later. It was, oh, in the afternoon, I guess, 1 or 2
o'clock or so. I was still surrounded by the press at home because of the
Graj' statement tlie preceding daj^; they wanted me to make a com-
ment on it, and I didn't want to do that. I received a call from the
President.
There-are some details of that conversation of a personal nature to
the President that, the first family, that I don't v?ant to put in because
they are not relevant. But I recall the conversation very clearlv, be-
cause there were some complications because Mrs. Nixon and Tricia
were up there at the same time.
The President said, ""Well, go on ahead. You need the break, you
have been under a lot of pressure," and the like. Pie never at any time
asked me to write a report, and it wasn't until after I had arrived at
Camp David that I received a call from Haldeman asking me to write
the report up.
If I T7as going to go up and write a report, I would have gone to
my — there was .'■general discussion also of preparing a Segretti report,
as I recall. If I had gone to Cfimp David specifically to write a report,
Iwould have .lone to my office first and collected an awful lot of niate-
rialthot I didn't take with me, which I subsequently bad to call back
for ii^ order to write a report. ___„^
Senator Gutjxf.y. It was shortly after this, though, that then you
engaged counsel, is that correct ?
Mr. De.nx. On the evening — I believe it was Sunday evening, I re-
ceived word that the Los Angeles Times was going to publish a stoiy
that I had had prior knowledi^^e of the fact that there was going to bo
a break-in of the Democratic National Committee headquarters on
June ]T.
Now, I knew I l)adn't had prior knowledge of that. In fact, I don't
think anvbodv otlipi- than those involved had prior knowlodi-o of the
fact that there was going to be ;i bi-cnk-in. T thonirht it was libelous.
T called Mr. Ilogan, told him, explained in generalities th(> fads.
(194)
27. Just six days after Dean's disclosures, on March 27, 1973,
the President met with Ehrlichman and HaLdeman to discuss the evidence
thus far developed and how best to proceed. Again the President stated
his resolve that White House officials should appear before the grand
jury. They confirmed to the President, as Dean had, that no one at
the White House had prior knowledge of the Watergate break-in.
Ehrlichnaan told fhe President that there wasn't "a scintilla of a hint
that Dean knew about this. " The President asked about the possibility
of Colson having prior knowledge and Ehrlichman stated that Colson's
response was "of total surprise. . . He was totally non-plussed, as the
rest of us. "
Page
_^7V /Transcript, March 27, 1973, 1 1: 1 0- 1 :30 p. m. p. 315... 195
-27b^ Transcript, " " " " " " p. 329.-. 197
~^-, '" II II II II II II " n "^"^l
27c J p. JJi
198
(195)
27a. miTE HOUSE TRANSCRIPT OF MARCH 27, 1973, 11:10 - 1:30 P.M. MEETING,
315
31
0
P before any judicial group, therefore, is on a dLTfercnt basis
from anybody else, "v.-hich is basically whaL I - you know
v/h.en I flatly said Dean would not appen.r but othr^rs would.
You know, I did say thrt, and of course --
E It v/as on a different basis. And at the same time, a man
in any position ought to be given a chance to defend himself
from these groundless cliarges.
P "Mr. Dean certainly wants the opportunity to defend himself
against these charges. Ha would welcome the opportunity
and what we have to do it to work oL't a. procediire vyhich will
allow liim to do so consistent v/ith las unique position of bc-ji;g
a top member of the President's staff but also tlie Counsel,
There is a lav/yer, Counsel -- not lawyer, Counsel -- but
the responsibility of the Counsel for coi:fidentialily. "
Z Could you apply that to the Grand Jury?
E Absolutely. The Grand Jury is one of those occasions
where a man in his situation can defend himiseli.
P Yes. The Grand Jury. Actually if called, we are not going
to refuse for anybody called before the Grand Jury to go, are
we, John?
E I can't imagine (unintelligible)
P \'/ell, if called, he will be cooperative, consistent with his
responsibilities as Counsel. Hov/ do we say thaf
(196)
27b. WHITE HOUSE TRANSCRIPT OF MARCH 27 , 197Z, 11:10 - 1:Z0 P.M. MEETING,
329
- 19 - ■ O.-tJ
P 1 would -- the reason I would totally agree -- that I would
believe Dean there (unintelligible) he would be lying to us
about that. But I woi.dd believe for another reason -- that
he thought it was a stupid dainn idea.
E There just isn't a scintila of hint that Dean knew about this.
Dean \yas pretty good all through that period of tiine in
sharing things, and he was tracking with a number of us on --
P 'Well you know the thing the reason that (unintelligible) thought --
and this incidentally covers Colson -- and I dozi't know v^•hether --.
1 know that most everybody except Bob, and perhaps you, think
Colson knev/ iill about it. But 1 v/as talking to Colson, remember
exclusively about -- and maybe that was the point -- exclusively
about issues. You l-oiov/, how are we going to do this and that
and the other thing, (unintelligible) mainly, the labor bill, how
do we get this, how do we get aid to the Catholic schools.
PI Getting that aid to Catholic schools, you loiow, was a --
Colson's fight was v/ith (unintelligible).
P Right, That was what it is. But in all those talks lie had plenty
of opportunity. He wa.s always coming to me with ideas, but
Colson in that entire period, John, didn't mention it. I think he
would have said, "Look v.-e've gotten some information, " but he
(197)
27c. WHITE HOUSE TRANSCRIPT OF MARCH 27, 197Z, 11:10 - 1:S0 P.M. MEETING,
331 .
- 21 -
331
there hdd been tliia burglary- Llic first guy I calle-d v.'as CoLson.
P Yeah.
E And his res|.jon£c;, as I recall it, was one of total svirpri.'ie and
he could have said then, "Oh, tliose jerkG, they shouldn't have;
Or, "1 kr.ew about it earlier"; Or, refei-red to it by saying,
"It would have been a meaningful leak, " but he didn't. He was
totally nonplussed, the same as the rest of us.
P Well, the thing is too, that I know they talk about this business of
Magruder's, saying that Kaldeman had ordeicd, tlie President had
ordered, etc, . of a'l people v/ho was surprised on the IVth of June --
I v/as in Florida ~- was me. Were you there?
E No, I was here.
P Who v.'as there?
E I called Colson, Flaldeinan and Ziegler and alerted them to this.
P And I read the paper. "What in the name of (expletive removed)
is this? I just couldn't believe it. So you know what I mean --
I believe in playing politics hard, but I am- also srriart. What
I can't understand is hov\' Mitchell v/ould ever approve.
H That's the thing I can't understand here.
(198)
18.
On April 8, 197'., (ho Preside]!!. ir\ci with EhrLichman
aiici Halcltnian on board Air Force One and directed thein to meet
with Dean and urge hini to go to (he grand jury. Haldcnian and
Elirlichman met with Dean that afternoon and at 7:33 p.m.
Ehrlichman reported to th.e President that Dean indicated he would
agree to go before the grand jury.
ZSa 7 SSC 2757.
Page
, 200
_28B~' Transcript, April 8, 1973, 7: 33-7: 37 p. ni. , p. 401.. 201
(199)
28a. JOHN EERLICHMAN TESTIMONY, JULY 27^ 197 Z, 7 SSC 2757
2757
Senator Gttp.xet. Xo\v, tlirough tliis period of time, begiujiijig vritli
that assigiuiient oil — is it 2uarcli 'M ?
Jlr. EiU'^ucBJiAX. Thirtieth.
Senator Gm;XEY. March 30, were you reporting to the President
whiit j-Qu \\'ere nndijig out ?
Mr. EHRjLi€KiiAN. I reported to him after I talked \vith ilr. O'Brien
biit very hriiifiy on that subject, and I yazt said: "I am begriming to'
get a feel for tbis thing but I have got so much hearsay liere I doji't
think it's worth taking a lot of your time." He said : '"You kno-.v. what
■ are you findijug out?"' So I said: '"Well he tells me there vrez-e' these
meetings back m the early times when Liddy had this plan, and so on."
I took him kind of sket-chily through the O'Brien busms;<3 and I said :
''This is liearsay tv,-o, three and in some cases four removed,"' and
I said. "We cA.rinot move on something of this kind until X7<i. fLnd outi!.^.^— .,..i~,L^,^-^
Now, iG>Sau Clement-e again 'ismeu we c-ima to this f-uivny conflict be- {
tvreaa-Deaii and iiitchell, 1 mentioned thai to liim, and I SLiid ""We are
trying to get. to the bottom of it," and tv^'o or three times ho said ''Have
you got that hg-ared out yet'?", and when v?e tiilked on the airplane
going back and we talked about Dean goijig to the gj-and jury and he
said iinaUy "I a-m not going to wait, he is going to gC.'-' He said : "Have
you ever figured, out what that is." and I &aid "l{o, we a:B going to
se-i Dean, We don't knov? what th-vt is."
Seuxitor GrrRKsr. Well, now, did you make s. complete repoi-t toth©
President?
Ivtr.EHJixicHiiAjr. Yes, sir.
•Sens.tor Gir;efET. Wlien w.'ii; tb r.t ?
Ixj.: 'E'RTa.iCxaiA'K. That was cik Saturday morning, April l-i.
Senator Gx3t::-j-i:y. What did you v ill liim ?
llr. _j£.rcKLXC'£^i>j:.>j. \7ell, I told him basically a narri-.tivc of my
Inter^aeT^s with thc5s various j[x.ople stArtic;^ with O'Eri^n Dud nm-
ning tI?rough everybody that is on this hst except Jlitchell and
MagTuder whom I liad not jet — with whom I had not yat talked and
Strachan the socond time when I got into the whole question of Bob
Haldeman's involvement.
Senator GrrpJs-XT. Now, so we can wrap this up f-nd I can i-ele-ase the
floor here, did you,a,t th-at time give him a complete account of Yv''ater-
gate as we know it now, and if you did not, what portions did you not
tell him that you didn't know"? Perhaps we can get e± it that way
quickly.
Jfr. EriraLicBTiiAX. Well, I didn't know, for instance, any of the
behind-the-scenej; business of the money beyond what Paul O'Brien
had given me here and a little feel of it that Dean had given me which
I thirdi I have just described to you about as well as I can. Tlie sub-
sequent interviews that I had with particularly ?aagruder that cfier-
noon — you see the outcome of tliis report to the President vras, he said
"I want you to talk to MagruderjT want you to talk to Mitchell,"
and then healso told me he wanted to find out more about Bob
Haldeman's involvement. So those three followed that preliminary
report and none of the things that I developed from any of tlieni were
included in it. 'When i completed them, then I came back and reported
what those three individuals told me and laid that out for him.
Senator Gitrn-et. And was that a fairly complete account of
Watergate?
(200)
is
■ 28b. WHITE HOUSE TRANSCRIPT OF APRIL 8, 1973, 7:33 - 7:37 P.M. MEETING, 401 i
_ ppendl>: 1 ^-^ Tt4''P^''"j'' ^0'iver;.i:-tLioi'-: The l're.-jide.'it ai:id
DhrUchiTU'ii, April 8, 1973. (7: 3 5_-^ lO'L'z- ll}")
P Oh, Joi'ii. Hi,
E I jvU't v.'aiitcd to post you on I.Ijv 3Jean inoeting. It v.cut fine.
He is coing to wait until after lie'd had a chance to talk with
Mitchell and to paLs tlio word to Magrudci. through hir? lr.v/yerr>
thcit Iio is going to appear at tlie Grand .lury. Hir fceliug is
thcL J.-iddy has pvdicd the plu^j o;i Magrudei, and that (urdn-
tclligiblc) he thini'.f; he knov^.o it now. AnCi \ic sfvy.'; ti^at there's
no love lost there, and that that was Liddy's motive in
coniniupdcating informally.
Uh, huh.
E At the .^an-iC time, h.? said there isn't anytKirj^; that he, JDean,
knows or could ."say that woult' in any way liarin John l'.litci:ell.
P But, it \/oi-ld harm Magruder.
E Right. And his feeling is that Sirica would not listen to a plea
of in-ununity at a (unintelligible) 1 sliould say. And that (unin-
telligible) from hirn. He would be much better off to go in
there and have an iid'orinal talk and that's v/hat he wants to do.
P Right.
P-^ So obviously we didn't tell liirn not to, but we did say that it
is important that the other people Icnew what he v/as doing.
(201)
Z9. Dc.-.n (lifi in Ir^ct: coniinviin cate his it.acnLion lo Lcr-tiiy
before the grand jviry to Mitt;liell and Tvlagrvider and told tJiein lie
would not agree to support Magrudcr's previous testimony to the
grand jury. Thereafter on April 14, 1973, Magrudcr appeared
before the U. S. Attorneys and cooperated with them fully.
Page
29a Dean 3 SSC, 1006 .- 204
29b Magruder 2 SSC, 808 205
(203)
29a. JOHN DEAN TESTIMONY^ JUNE 25^ 1973, 3 S5C 1006
IGOo
that >, ; ;hcll rnu ''.lagriul'T vvc-ve waiting va aiiofiier ofrice for me. H.
aske-i iii a Vi!y tliey vvtinLed to talk to me and he said tlmt ihey wanted
to t:''.k ij vufi iibout my jkticwredge of the jnofctirgs in MiLi'lieU-s office.
I told J:fulden');;;i tliat tluiy wire both tiware of tlie situation and I vras
not going- to lie ii' asked about tliosf? nseetinc,'-:. lialdeman ri.aid tluit he
did not vraut to g«t into it, but 1 should p.o in and \\qv]i it out with
Mitchell and Magruder.
Ijefore di:K;ussing the meetin^^s with Mitohill and Mai';-r;ide7:, I feel
I should cominout on my rciaction to the di?,cu.bsion I had just liLd vvith
j\Ir. I[aldeiniui. Knowing ]:lo\v freely a)id ot"ienl_y he had discas.=;ed
matters in thi^ parit, I could tell that he was back-peddling fast. That
he was now in the process of unin volving himself, but keeping otliers
involved. This was a cle^r sign to me that ilr. Halueman was not
goiijg to come forvrard and help end this problem, rather, he was begin-
ning to protect his .hanks. Tt was .my reaction to this meeting witli ilr.
Haldcmaii and his evident chiuigcd attitude, and my earlier dealings
^\'\t\\ Ehrliclix'i.i n vrhera he had told me how I should handle various
areas of m.j te-sth-nony should I he called b'-fore the grand jury, that
made .ms d.ecide not to t^irn owr to them the report 1 had written at
Camp David. I have subniifcttd to the committee a copy of the Cam.p
David report, part of which vvas typed by my secretary at Camp David
and the rejnainder in longhand, wiiich 1 had not pat in final narrative
form before I was called bacl: to "'.Ynsliington.
. [The document was marked exliibit Kb. 34—1-3.*]
MkETIXG VflTH Mn. ^IiTCIIELL .IND ^bt. ]MAGRtDnR
]Mr. Deax. Alter departing ilr. Haldeman's cnlice, I went to meet
M'itli ^Mitchell and ilagrudor. After an e.^;change of pleasantfios, they
told me they wished to talk to nie at>out how I would handle any tesd-
H'lonial appearances regarding tiie January 27 and c ebruary -t meetings
which liad occurred in iNIitchell's oftice. I told them that v,-e had been
through this Ijefoie and they knev,- well my undei-standing of the facts
as tliej- luad o-ceurred at that time. ^litchell indicated thai if I so testi-
fied, it could cause problems, ^fagruder then raised the fact that I had
praviously agreed, in an earlier meeting, that I would follow the testi-
monial approach they had taken before the grand jury.
1 told them I recalled the mieeting. JMagradcr then said that it had
been I v.-ho had suggested that the meetijigs he treated as dealing
exclusively with the election law and that explained my presence. At
this point in time, I decided I did not wish to g^'Si into a debare regard-
ing that meeting. They both repeated to me that if I testified other
than tliey had it would only cause problems. I said I understood that.
I told them that ther& was )io ceitaijity that I would be called before
tlie grand jury or the Senate co.mmittce and that if I were called, I
mighit invoke c:;i:ec^ive_jTi;L\iUege, so the question of my testimony
was still moot. I did not want to discuss the subject further so I tried
to move them off of it. They v ere obviously both disappointed that I
was being reluctant in agreeing to continue to perpetuate their earlier
testimony. ,„„^.-,
Tlie only other matter of any substance that came up during that
meeting was when I .made the point thai I had never asked Mitchell
•See p. 1263.
(204)
29b. JEB MAGRUDER TESTIMONY, JUNE 14, 1973, 2 SSC 808
808
Mr. Dash. And Mr. Haldeman knew that then, did he not?
Mr. M.vGRUDER. I cannot recall in my meeting with him in January
whether — yes, I am sure I did discuss those meetings, yes.
Mr. D.ASH. So the attempt to get together and agree on that meet-
ing was an attempt to get together and agree on at least from your
point of view, would be the full story?
Mr. Magruder. That is correct, Mr. Haldeman recommended that
Mr. Dean and Mr. ilitchell and I meet, which we did that afternoon.
Mr. Dash. "What was the result of that meeting?
Mr. i^lAGRUDER. I realize that ^Ir. Dean had different opinions then
as to what he would do probably, and so then my — I thought that
probably it was more appropriate that even on that Monday that I
get separate counsel so that I could get advice independent of the
individuals who had participated with me in these activities.
Mr. Dash. In other words, you really could not agree at the meet-
ing with Mr. Mitchell and Mr. Dean.
Mr. jNIagruder. Well, it was cooperative.
Mr. Dash. "What was !Mr. Dean's position?'
Mr. Magrttder. He would not indicate a position.
Mr. Dash. All right. Did there come a time when you did get
independent counsel?
;Mr. Magrttder. Yes, ]Mr. Parkinson, who was coimsel of the com-
mittee, recommended Mr. Bierbower and on that Saturday I went
to meet him, he was out of the country, and I met him and we agreed,
he agreed to be my counsel that Saturday evening.
Mr. Dash. Did there come a time when you decided that you should
go to ihe, U.S. attorney's office ?
Mr. ^L\GRtTDER. Yes, that is correct.
Mr. Dash. "When did you go to the U.S. attorney's office?
Mr. Magruder. "We agreed, they discussed the things with the U.S.
attorney,-! think on April 12 and I saw them informally on April 13
and saw them formally on April 14 on Saturday, April 14.
Mr. Dash. At that time did you tell everything to the assistantiU.S.
attorneys?
Mr. ^Iagruder. Yes, I cooperated. ^^____
Mr. Dash. "Who did you meet with ?
Mr. Magruder. ^Mr.'Silbert, Mr. Glanzer, and Mr. Campbell.
!Mr. Dash. Did you tell them ever>-thing you are now telling this
committee?
Mr. ^Magruder. Yes.
Mr. Dash. Did you have a meeting afterward with ]\Ir. Ehrlichman?
Mr. Magruder. Yes, Mr. Ehrlichman called while I was with the
U.S. attorneys and asked me would I come over and talk to him about
the case. "We "talked to the U.S. attorneys and they agreed as a courtesy
that we should and Mr. Bierbower and the other attorney with Mr.
Bierbower and I went to see ]Mr. Ehrlichman that afternoon.
Mr. Dash. Tlien, according to that meeting that you had ^vith Mr.
Ehrlichman, what happened?
Mr. Magruder. "\"\'e told him in rather capsule form basically what I
told vou this morning.
Mr. Dash. All right.
Now, I have just two final questions. T want to go back to the time
when you came back from California to "Washington, putting you back
(205)
30. On April 1-1, 1973, the Presidcn'. ;i[.:ain mot -/ith
Khrlichman and llaldcniaii to rcvifw t!ic resulL.s of three v/ecky
investigation and to deterinine the fut\ire course of action. Based
on Ehrlichman's report, the President conckided Mitchell should
go before a grand jury. The President instructed Ehrlichman to
see Magruder and tell hiin that he did not serve the President
by remaining silent. The President told Ehrlichn:ian that when
he met with Mitchell to advise him that "the President has said
^et the chips fall where they may. He will not furnish cover for
anybody. " The President told Ehrlichman to tell Magruder to
purge hiniself and tell this whole story.
Page
30a Transcript, >^il 14, 1973,
8:55-11:31 a.m., p. 445 208
30b Transcript, April 14, 1973,
8:55-11:31 a.m., p. 478 209
30c Transcript, April 14, 1973,
8:55-11:31 a.m. , p. 507 210
(207)
30a. WHITE HOUSE TRANSCRIPT OF APRIL 14, 1972, 8:55 - 11:31 A.M.
MEETING. 445.
-38-
scenario that was spun out, that Dean spun out on Mitchell
is basically the right one. I don't think Mitchell did order
the Watergate bugging and I don't think he was specifically
aware of the Watergate bugging at the time it was instituted.
I honestly don't,
E . That may be.
(Material unrelated to Presidential actions deleted)
P What did he say? What did he tell Moore?
E Well, remember I asked Moore to find out what Mitchell had
testified to.
P Yeah. Moore heard the testimony and said well you're not --
■" He was never asked the right questions. Now, as far as he
H He probably didn't to the Grand Jury, either.
E That's right. As far as the quality of the evidence is concerned
(Material tmrelated to Presidential actions deleted)
E Well, to go back to the
P All right. I only mentioned (unintelligible) because, let me, --
go ahead with your --
E Well, all I was going to say is that --
P All right. I now have evidence that --
E You don't have evidence if I
P I'm not convinced he's guilty but I am convinced that he
ought to go before a Grand Jury.
(208)
ZOh. WHITE HOUSE TRANSCRIPT OF APRIL 14, 1972, 8:55 - 11:31 A.M.
MEETING, 478
■71-
P got to make this move today. If it fails, just to get back
our position I think you ought to talk to Magruder.
H I agree.
P And you tell Magruder, now Jeb, this evidence is coming in
you ought to go to the Grand Jury. Purge yourself if you're
perjured and tell this whole story.
H I think we have to.
P Then, well. Bob, you don't agree with that?
H No. I do.
Because I think we do have to. Third, we've got the problem
H You should talk to (unintelligible) first though.
E What really matters. Bob, is that either way --
P Yeah.
E Who is ever (unintelligible)
P You see the point is --
H But don't use Jeb as a basis for the conversation.
P Yeah. Say that the evidence is not Jeb, I'd just simply say that
these other people are involved in this. With Jeb, although he
may blow --
E I can say that I have come to the conclusion that it is both John
and Jeb who are liable.
(209)
30c. WHITE HOUSE TRANSCRIPT OF APRIL 14, 1973, 8:55 - 11:31 A.M.
MEETING, 507. . ^ .
-100-
E pass unpunished. I can't make that judgment for you ajid
I don't have any right to make it for you. All I'm saying
is that if we're looking at this thing from the standpoint
of the President, today is probably the last day that you
can take that action, if you're ever going to take it to do
the President a bit of good. "
P VDo you realize, John, that from the White House, I mean,
Colson, maybe Haldeman are going to get involved in
this thing too?"
E Well, here again, we're looking at this thing not from the
standpoint of any other individual. "We are looking at it
from the standpoint of the Presidency and that's the only
way I think you and I can approach this."
.07
P And I'd go further and say, "The President has said let the
chips fall where they may. He will not furnish cover for
anybody. " I think you ought to say that.
E That's right. """
P Don't you agree. Bob? That isn't it?
H He may go. He may get Chuck.
(210)
31. On April. 15, 1973, Llic Prfiudei:L mcL v/illi Attorney
Genera] Kh-.indicnst. Tlicy considered who should be in charge
of the: continuing investi<,'a tion. The President iriet with Assistant
Attorney General Petersen on the afternoon of April 15, 1973,
in his EOB office. At this meeting Petersen indicated there
was no criminal case on Haldeman and Ehrlichman at this time.
Having been told Liddy would not talk unless authorized by
"higher authority" the President instructed Petersen to tell
Liddy' s counsel the President would confirm his urging of Liddy
to cooperate. *^ '
-w-
Page
31a Transcript, April 15, 1973, 1:12-2:22 p.m.,
p. 742... 212
31b Petersen 9 SSC 3632, 3875, 3875 213
31c- ■ Transcript, April 15, 1973, 8:25-8:26 p. m . ,
p. 769 216
(211)
35-945 O - 74 - 14
31a. WHITE HOUSE TRANSCRIPT OF APRIL 15, 1972, 1:12 - 2:22 P.M.
MEETING, 742.
47 - ' '^
and that's why we had no control. Well, anyway,
I'm not making excuses. The thing to do now is to.
"K Deal with the facts as you have them.
P Go forward.
K It would have to be by you, Mr. President.
P There's (unintelligible). How about another man that
we could bring down? How about a former Circuit
Court Judge like Lombard? . . •
K Well the Chief Justice doesn't like that unless he has
completely retired from the judiciary.
'' Says' he can serve if we gave him an interim appointment?
K Yes— yeah.
P Seventy-one years of age?
K No-no. What you are doing is having a Federal judiciary.
P Well it seems to me that's the same.
K The Chief Justice thinks this fellow Sears --he's the
one who recommended Sears.
P Thinks we should have a special prosecutor?
K Yes. He does. Yes.
P Now what does he say--now--I want to get some other
judgments because 1--I'm open on this. I lean against
it and I think it's too much of a reflection on our system
of justice and everything else.
(212)
21b. HENRY PETERSEN TESTIMONY^ AUGUST 7, 1972, 9 SSC 2632, 3875-76.
3632
to come back to him if we. distigioed, and so I tliinlc tlip, criticism is
^vholly iu\\v:Li-rantcd.
Mr. Dash. Did 3-011 receive a call from the President en April 30,
1973 ?
]\Ir. Petersex. Yes, sir.
Mv. Dash. Could yon tell ns v.ha.t that, call was about?
Mr. Pkteussx. April 30, 1973 ?
Mr. Dasi^. Yes.
Mr. PrTEnsEX. He called up and said, you can tell your wife that
the President lias done what needed to be done, and I want to thank
you for what you have done.
To the extent that requires some explanation in the course of our
conversations, I was impres.--ing upon the President the situation so
far as I was concerned vras degenerating, and it was vitally affecting
the people's confidence in the "WTiite Honse, and I related to him a
conversation that I had with my wife at the breakfast table in which
she had said, "Do you think the President is involved?" And I related
that to the President and I said. "If I reach the point where I think
you are involved, I have got to resign. If I come up with evidence of
you, I am just going to waltz it over to the Hou.se of Representatives."
but I said, '•\^liat is important is that rny wife, who is no left wing
kook, is raising these questions of me, and that indicates to me that
yoa have got a most serious problem."
And that affected the President quite strongly, and when he called
me on April 30, he made that point.
■Mr. Dash. This was the dav that he announced the resignation of
Mr. Haldeman. and Mr. Ehrlichman, and the leaving of the oflice at
his request of Mr. Dean.
Mr. Peteksf.x. That is right.
Mr. Dash. I have no further questions, Mr. Chairman.
Senator Ermx. Mr. Thompson.
Mr. TnoMrsox. Thank you, Mr. Chairman.
iSIr. Petei-sen, let me ask vou a few more detailed questions about
your meeting with the President on April 15. You stated that you told
him on that occasion that although you possibly didn't have a criminal
case, against Haldeman and Ehrlichman, that it could be very em-
barrassing to the Presidency.
TVliat information did you have on Haldeman and Ehrlichman at
that time? What had Dean told the prosecutors about Haldenian's and
Ehrlichman's in\ ol vement in the "Wr.tergate matter?
Mr. Petkhsex. "Well, we had not too much on ilr. Ehrlichman at
that point. We had Dean's statement that Ehrlichman had told Dean
to "deep six'' certain information recovered by Dean from Mr. Hunt's
office. If you don't mind, I will refer to my notes on this.
]\Ir. TiioiNtPsox. Yes, sir.
Mr. Petf.ksex. Too, that Mr. Dean had said that Ehrlichman
throueh Dean had informed Liddy that Hunt should leave the coun-
try. Hunt corroborated this in part in that he testified that Liddy
had told him that Liddv's principals wanted Hunt cut of tlie country.
Hunt did not testify with respect to or identify Ehrlichman.
That is the basic informatioii. the only information wo had on Ehr-
lichman at that point.
(213)
sib. HENRY PETERSEN TESTIMONY, AUGUST 7, 197 Z, 9 SSC' 3622, 3875-76.
3875
Exhibit No. 147
April 16, 1973
John Ehrllchman
We have no other information as of this tiine except
the following i terns j
1. That Ehrlichman in the period irrmediately following
the breakin told John Pean to "deep six" certain infoiination
recovered by Tean from Hunt's office.
2. That KhrllchjTian through Dean informed Liddy that
Hunt should leave the country. Hunt corroborates this in that
he testified before the grand jury that Liddy toliS hijTi that
his, Liddy' 3, principals, wanted Hunt out of the country.
Hunt states that as he waf3 preparing to leave, he v/as called
again by Liddy and informed by Liddy that Liddy's principals
had countctinanded the order. Hunt further states that not-
withstanding he then departed for California.
With respect to Item One you will recall that 1' told you
that Dean had on one occasion indicated to me that ho had given
certain non-Watergate information recovered from Hunt's office
to fat Gray personally. Sometime during the middle of March,
I had occasion to consider this matter and I aaked Pat Cray.
Gray told me on that occasion that he liad received no information
from John Pean other than that v;hich was given to the agents.
Today I again raised the matter with Pat Gray and told him
eoecifically what Dean had stated to the prosecutoi'S who are
debriefing him. Gray emphatically denied that he had ever received
a;iy information from Hunt's office from John Dean. Gray states
that all the information and records recovered from Hunt's office
v;ere received by agents of the FBI in the normal course of
business.
Bob Haldeman
With refsrect to Bob Haldeman's alleged involvement in
the Watergate Dean states that in December of 71 or early parts
of January 1972 there v/ere a series of meetings, three in
number, with John Mitchell which took place in Mitchell' e office.
(214)
31b. HENRY PETERSEN TESTIMONY, AUGUST 7, 1973, 9 SSC 3632, 3875-76
3S7G
Present were Liddy, Magruder, Dean and Hi.tchoH. At each of
these meetinqs the Liddy operation wa3 diaciiaaed. The pirrposa
beln T to obtain information about Pemocratlc presidential 1.
contenders. On the Eirnt tv;o occasions tlitchoXl refused to
autliorize the budqet proposals. 'ihe first bclnj $1,000,010
and the second $500,000. On the third occasion Mitch.3ll
approved the reduced budget of $300,000. The operation v;a3
described as "qematone." Maaruder says the budget information
was given to Strachen. Maqruder also says that information
qiven to Strachan v;as for delivery to Haldeman. Maqruder is not
in a position to say that Strachan actually delivered the
information.
Dean states that after the second ir.eetlnq with Mitchell.
Liddy and Maqruder, he returned to the Ifliite House and relayed
to Bob Haldeman the nature of the proposals belnq discussed
and stated that v^e ouqht not to have any part of them. Dean
states Haldeman aqreed but apparently no one Issued any
Instructions that this surveillance proqrara was to be dis-
continued.
Maqruder further states that he 'caused to be delivered
to Strachan for transmittal to Haldeman a summary of the
intercepted conversation. Aqaln Maqruder is not in a position
to say that Strachan actually delivered the information to
Haldeman. Maqruder does say that the nature of the information
was such that it was clear that It emanated from intercepted
telephone conversations.
Strachan
Strachan appeared at the U. S. attorney's office was
informed of his riqhta and aduiaEt} was questioned by the
prosecutors conclorning Ithe Haldeman alleqation. Despite
considt'rabla fancinq Strachan refused to discuss the matter
and he was excused by the prosecutors with instructions to
obtain legal counsel and return this afternoon.
(215)
31a. WHITE HOUSE TRANSCRIPT OF APRIL 15, 1972, 8:25 - 8-26 P M
CONVERSATION, 769.
-2-
HP No, no - I don't want to leave that impression.
P Because of Mitchell, huh?
HP He is taking orders from higher authority. The decision is
mine but since you are the highest autliority he will stand in
line if we handle it discreetly.
P I just want him to be sure to understand that as far as the
President is concerned everybody in this case is to ta.lk and
to tell the truth. You are to tell everybody, and you don't
even have to call me on that with anybody. You just say those
are your orders.
IP Yes, Sir.
P Ok.
HP Alright, thank you, sir.
763
(216)
32. The President met with Dean on tlie rnorninj; of
April 16, 1973, discussed v/ith Dean his resignation, an^I advised
him to be totally truthful in his explanations. The President asked
Dean not to lie about the President either.
At this same meeting Dean explained to the President
that O'Brien had been the one who relayed Hunt's demand, that Dean
had informed Ehrlichinan and Ehrlichman advised Dean to inform
Mitchell which Dean did. Dean told the President that all alono^
he had tried to make sure that anything he passed to the President
didn't cause the President any personal problems.
Page
32a Transcript, April 16, 1973, 10:00- 10:40 a. m. ,
p. 805 218
32b Transcript, April 16, 1973, 10:00- 10:40 a. m. .
p. 810 219
32c Transcript, April 16, 1073, 1 0:00- 10:4C a. m. ,
pp. 797-799 220
(217)
22a. WHITE HOUSE TRANSCRIPT, APRIL 16, 1972, 10:00 - 10:40 A.M.
MEETING, 805.
18
— _„^a
D Yes, I said that. I am incapable of it.
p Thank God, Don't ever do it Jolm . Tell the truth. That
is the thing I have told everybody around here. (expletive
omitted) tell the truth I All they do John is compound it.
p That (characterization omitted) Hiss would be free today
if he hadn't lied. If he had said, "Yes I knew Chambers
and as a young man I was involved with soma Communist
activities but I broke it off a number of years ago." And
Chambers would have dropped it. If you are going, to lie,.
;;^'ou go to jail for the lie rather than the crime. So
believe me, don't ever lie.
D The truth alweiys emerges. It always does.
Also there is a question of right and wrong too.
D That's right.
P Whether it is right and whether it is wrong. Perhaps there
are some gray ai'eas , but you are right to get it out now,
D I am sure .
P On Liddy I wanted to be sure. You recall our conversation.
You asked me to do something. I have left it with Petersen
now and he said he v/ould handle it. That's the proper place.
VJhen Liddy says he cannot talk with peers it must be higher
authority, I am not his higher authority. It is Mitchell.
D V7ell, he obviously is looking for the ultimate, but I
think he is looking for the ultimate. He has the impression
that you and Mitchell probably talk on the telephone daily
about this .
P You know we have never talked about this .
(218)
32b. WHITE HOUSE TRANSCRIPT, APRIL 16, 1972, 10:00 - 10:40 A.M.
MEETING, 810.
23
No, I think you are in front right now and you can rest ^ -■ J
assured everything I do will keep you as far as —
P No, I don't want, understand when I say don't lie. Don't lie
about me either.
D No, I won't sir — you —
P I think I have done the right thing , but I want you to —
if you feel I have done the right thing, the country is entitled
to know it. Because we are talking about .the Presidency
here .
D This thing has changed so dramatically. The whole situation
since I gave you the picture
P Since you sat in that chair —
D In that chaix^over there and gave you what I thought were
the circumstances, the potential problems. You have done
nothing but try to get to the bottom of this thing, and —
P I think sa. Well, I said, "Write a report." But my purpose
was you write a-report as I said, "I want the Segretti
stuff. Put everything else. Was the tVhite House involved?
You know, et cetera." How about — one last thing*. Colson.
You don't think they are going to get him into something?
D I think he has some technical problems close also. I don't
know if he has any. To the best of my knowledge, he had
no adva:nce knowledge of this thing .
P Right. I suppose the key there is Hunt. He was so close to
Hunt. I just want to know for my own benefit. As I told you.
last night, I don't w^t to get out there in front and have
someone say "V/hat about Chuck Colson?"
(219)
Z2o. WHITE HOUSE TRANSCRIPT, APRIL 16, 1973, 10:00 - 10-40 A M
T - MEETING, 797-99. ' ' '
10
Z2J~^
No, no. O'Brien, who was one of the lav/yers who was
representing the Ra-Election Committee, was asked by Hunt
to meet with him. He came to me after the meeting and
said that Hunt asked that the following message be passed
to you. I said, "why me?" He said, "I asked Hunt the same
question i'-
P You, Dean or me, the President?
D Passed to me. Dean.
p He had never asked you before?
D No.
P Let me tell you. What did you report to me on- though »
It was rather f ragirientary , as I recall it. You said
Hunt had a problem —
Very fragmentary . I was —
P I said, "Why, John, how much is it going to cost to do this?"
That is when I sent you to Camp David and said (expletive
removed) "Let's see where this thing comes out."
D That's right.
P And you said it could cost a million dollars.
u I said it conceivably could. I said, "If we don't cut this
thing — " •
P How was that handled? Vlho handled that money?
L) Well, let me tell you the rest of what Hunt said. He said,
"You tell Dean that I need $72,000 for my personal expenses,
$50,000 for my legal fees and if I don't get it I am going
to have some things to say about the seamy things I did
\
at the V'Jhite House for John Ehrlichman." Alx'ignt I took I
(220)
Z2c. WHITE HOUSE TRANSCRIPT, APRIL 16, 197S, 10:00 - 10:40 A M
2 "l,'^ MEETING, 797-99.
y - - ■ — . — _
738
that to John Ehrlichman. Ehrlichman said, "Have you talked
to Mitchell about it?" I said, "No, I have not." He said,
"Well, will you talk to Mitchell?" I said, "Yes I v;ill."
I talked- to Mitchell. I just passed it along to him. And
then we were meeting down here a few days later in Bob's
office with Bob and Ehrlichman, and Mitchell and myself,
and Ehrlichm.an said at that time, "Well is that problem
with Hunt straightened out?" He said it to me and I said
"Well, ask the man who may know: Mitchell." Mitchell
said, "I think, that problem is solved^"
P That's all?
D That's all he said.
P In other words, that was done at the Mitchell level?
That's right.
P But you had knowledge; Haldeman had knowledge; Ehrlichman
had knowledge and I suppose I did that night. That assumes
culpability on that, doesn't it?
D I don't think so.
P Why not? I plan to be tough on myself so I can handle the
other thing. I must say I did not even give it a thought
at the time .
D No one gave it a thought at the time.
P You didn't tell me this about Ehrlichman, for example,
when you came in that day .
O I know .
P You simply said, "Hunt needs this money." You were using it
as an example of the problem.s ahead.
(221)
D
32q. white house TRANSCRIPT, APRIL 16, 1973, 10:00 - 10:40 A.M.
MEETING, 797-99. . . .
12
I have tried all along to make sure that anything I passed TJ£)
to you myself didn't cause you any personal problems.
P John, let me ask you this. Let us suppose if this thing
breaks and they ask you John Dean, "Now, John, you were the
President's Counsel. Did you report things to the President?"
D I would refuse to answer any questions unless you waive
the privilege.
P On this point, I vrauld not waive. I think you should say,
"I reported to the President. He called me in and asked me
before, when the event first occurred, and passed to the
President the message that no V'Thite House personnel in the
course of your investigation were involved." You did do
that didn ' t you?
D 1 did that through Ehrlichman and Haldeman.
P I know you did because I didn't see you until after the
Election.
D That's right.
P Then you say, after the election when the McCord thing
broke, the President called you in. I think that is when
it was, wasn't it?
D No. It was before the McCord thing, because you remember
you told me after Friday morning that McCord 's letter —
you said, "you predicted this was going to happen." Because
1 had oh, in the week or two weeks —
P Why did I get you in there? Vfnat triggered me getting you
in?
Well, we just started talking about this thing.
P But I called you and Moore together for a Dean Report,
(222)
33. On April 27, Petersen reported to the President that
Dean's lawyer was threatening that unless Dean got immunity,
they would bring "the President in- -not this case but in other
things." The President told Petersen to use immunity if he needed
to get the facts, but there w^ould be no blackmail. It ■was not until
June 25, 1973, while testifying before the Senate Select Committee
that Dean stated the President had prior knowledge of the cover-up.
Page
33a Transcript, April 27, 1973,
5:37-5:43 p.m., p. 1261, 1276 224
(223)
33a. WHITE HOUSE TRANSCRIPT OF APRIL 27, 1973, 6:04 - 6:48 P. M.
MEETING, 1261, 1276 i2tl
Appendix 48. Meeting; The President, Petersen and Ziegler,
Oval Office, April 27, 1973. (6:04 - 6:48 p.m.)
P Come in. As, like all things, some substance, some falsity.
HP Ah. last Monday Charlie Shaffer was in the office, and a
continuation of the negotiations* Charlie Shaffer is the lawyer.
Charlie is a very bright, able bombastic fellow. And he was
carrying on as if we're making a summation in a case. And
he said -- that -- ah he was threatening, "We will bring the
President in -- not this case but in other things" What "other
things" are we don't know what in the hell they are talking about.
P Don't worry.
HP "In other areas, " more specifically is the word he used. That
they regarded -- and didn't consider of importance they regarded
as the elaboration of his earlier threat. You know, "We'll
try this Adnninistration -- Nixon -- what have you, what have you. "
There's a new conversation by them with Dean since the Sunday
we first met (unintelligible) Whatever is said is through
Shaffer the lawyer.
P What else do you have besides that?
HP Well, let's see. They did say that at a later date in the proceedings
that Dean went to the President, and I assume that's the
February or March or whatever that date was. But that's in
the course of your trying to find out. Ah, today they were
(224)
32a. WHITE HOUSE TRANSCRIPT OF APRIL 27, 2972, 6:04 - 6:48 P. M.-
MEETING, 1261. 1276
127b
-16-
HP
as adversaries. They are decent. They are honorable lawyers,
they are a pleasure to deal with.
AH right. We have got the immunity problem resolved. ^TIT"
Dean if you need to, but boy I am telling you - there ain't going
to be any blackmail.
ise
HP Mr. President. I --
P Don-t let Dick Kleindienst say it. Dean ain't - "Hunt is going
to blackmail you. ■■ Hunt's not going to blackmail any of us.
■•It is his word, basically, against yours. " It's his word
against mine. Now for - who is going to believe John Dean?
We relied on the damned so - Dean. Dean was the one who
told us throughout the summer that nobody in the White Hou.
was involved when he. himself apparently, was involved,
particularly on the critical angle of subornation of perjury.
Tha-- - . one that -- I will never, never understand John.
HP I. I can almost quote him. He said. "Henry. God damn it,
I need this information. That man has designated me to get
all these facts. " And he calls me in there and chews my ass
off.
P Do you know something?
HP And this was before the trial - -
(225)
34. On Marcli 1, 1974, a federal grand jury returned an
indictment against scv^cn individuals charging all defendants with
one count of conspiracy in violation of Title 18 U.S.C. Sec. 371
and charging some of the defendants with additional charges of
perjury, making false declarations to a grand jury or court,
making false statements to agents of the FBI and obstruction of
justice.
Page
34a Indictment, U. S. District Court for D. C. ,
U. S. V. John N. Mitchell et al. , Cr. 74-110,
March 1, 1974, p. 1-15 228
(227)
35-945 O - 74 - 15
34a. UNITED STATES v MITCHELL^ CRIM. HO. 74-110, INDICTMENT, MARCH 1, 1974,
1-lS
UNiTJ:;u S'i-r-.-nz'.i uit':}"<tc:t cou;vT
FOR TJIE DlSTi'ilCT O;: COLU;;.',].A
UKITi-D
STy\TES OF
V.
/il-lERICA
JOHN N.
MITCHELL
HARRY R
ILALDEl-'.A
N, JOHM D
EHRLICn;
'J\\i , )
CJiARLES
W. COLSO:
;, ROBERT
C. )
MA.RDl;u\'
, KENNETH
W. PARKi:
:scK-, )
and GORDON STR/iCIlAN,
Defendants. )
)
)
Criminal No.
Violation of IB U.S.C.
D§ 371, 100.1 , 150:;, 162:
and 1G23 {ccntioiracy ,
false statements to a
government agency, oh-
struction of justice,
perjury and fal^e
declarations. )
INDICTICENT
The Grand Jury charges:
Introduction
1. On or about June 17, 1972, Beriiard L. Barker,
Virgilio R. Gonzalez, Eugenio R. Martinez, James V7. McCord,
Jr. and Frank L. Sturgis were arrested in the offices of
the Democratic National Com.Tiittee, located in the V7atcr-
gate office building, Washington, D. C. , while attempting
to photograph documents and repair a surreptitious elec-
tronic listening device v.'hich had previously been placed
in those offices unlav;fully.
2. At all times material herein, the United
States Attorney's Office for the District of Columbia and
the Federal Bureau of Investigation v;ere parts of the De-
partment of Justice, a department and agency of the United
ates, and the Central Intelligciice Agency v.'es an agency
he United StDtes.
3. Beginning on or a..iOUL" uune 17, L\i'i2, i.ina cor.-
(228)
d4a. UNITED STATES V. MITCHELL INDICTMENT, CH. ■/4-110, ;
MANCH 2, iy/4, 1-lb
inclIcLiucnt , the rcd'.j.-al EurcCiU oi" luvcT.t i'jation c.nd
tlio United Stater; Attorney's Office for tlic District
of Columbia \;cre conduct iiiO an ii.vcstiyation , .in con-
ju.nction v;ith a Grand Jury of the United States District
Court for the District of Columbia v.'hich had been duly
empanelled and sv.'orn on or about June 5, 1972, to deterninc
v;hether violations of 18 U.S.C. 371, 2511 and 22 D.C.
Code 1001(b), and of other statutes of the United States
and of the District of Columbia, had been comnitted in
the District of Coluribia and elsewliere, and to identify
the individual or individuals v;lio had committed, caused
the conunission of, and conspired to corrjnit such viola-
tions.
4. On or about Septeinber 15, 1972, in connection
v;ith the said investigation, the Grand Jury returned an
indictiP.ent in Criminal Case Wo. 1827-72 in the United
States District Court for the District of Columbia charging
Bernard L. Darker, Virgilio R. Gonzalez, E. Hov;ard Hunt,
Jr. , G. Gordon Liddy, Eugenic R. Martinez, James W.
McCord, Jr., and Frank L. Sturgis v.'ith conspiracy,
burglary and unlawful endeavor to intercept wire coirjr.uni-
cations.
5. From in or about January 1969, to on or about
Inarch 1, 19 72, JOHN N. MITC}JELL, the DEFEICDAI.'T, was At-
torney Genei'al of the United States, From on or about
April 9, 1972, to on or about June 30, 1972, he v.'as Cair.paign
Director of the Committee to Re-]:iect the President.
G. At all tir.:;s material ]-ierein up to on or about
April 30, 19 73, HAURY R. HALDEKuiN , the DEFEND/uJT, v.'as
(229)
64a. UNITED STATES V. MlTCHblLL INUICTMENT, CR. 74-llU,
MAHCH J, 1974, 2- lb
- 3 -
7. At all ti):iOS iiiatcii.al Ijcrcin up to on or
about April 30, 1D73, JO!;:: U. l'.j!rci,XCliM.->Is' , the DFA'-'Cl^or^WT ,
v.-ac Assistant for Donicctic Affairs to the President of
the United States.
8. At all tin-.c-G n-;atcrial herein up to oii or
about March 10, 1973, CIIARLEG W. COLSOH, the DEFJ:;!D7v:;T ,
was Special Counsel to th.e President of tlie United States.
9. At all times material herein, R0j3ERT C. M^^RDi;.;; ,
the DEFENDA'WT, v.-as an official of the Co.Ti.Tiittee to Re-Elect
the President.
10. FroiTi on or about June 21, 1S72, and at all times
material herein, KEKiNETH V7. PArj;iNSO;^, the DEFENDWJT, v;£s c-.n
attorney representing the Committee to PvC-Elect the Presideni
11. At all tin.es material herein up to in or about
is'ove-ier 1972, GORDON' STPJi.CHAI^', the DEFEND;>:^3T, v;as a Staff
Assistant to HARRY R. liALDEM;V!; at the White House. There-
after ho bec£r.-.e General Counsel to the United States Infor-
mation Agency^ ■
coui^T o:je
12. From on or about June 17, 1972, up to and in-
cluding the date of the filing of this indictnient, in
the District of Colurriiia and clse\.'here, JOHK U. lilTCHELE,
HARRY 'R. H?JL,DEi:.2J\\ JOIiN D. EKRLICHr:AI^] , CHARLES W. COLSO.\' ,
ROBER'r C. I-ITVRDIAM, );E:C:'iETH V?. P/lRKINSON and GORDO:; S TPv'^ CM '-.:■! ,
the DErE;;K.'u'TS , and other porsor.s to tlie Grand Jviry );nc'..-n ana
unknov.'n, .unlav.-f ulJ.y , willfully and ):no\.-ingly did cohJsi r.e ,
conspire, confederate and agree tog'cthor and with each oth.or, to
(230)
S4a. UNITED STATES V. MITCHELL INDICTMENT, CR. 74-110,
MARCH 1, 1974. 1-lS .
cor.i"..Lt Oi-'icynciV. ag^iinrl. t;:c Uiiitcfl r.l.:'lc::, to v.'.it,
to ob;;tr\ict j v.:^tic:<.! .i;i violau.ion of Title Hi, United
States Cods, Section 11303, to iv.ahn false Gtntci.;entt;
to n cjovcrnmc-nt aycncy in violation ol Title 13, U:iJ ted
Slates Coclo, Scctioi; lO'Jl, to noke fcilse ("Jeclarctionr-
in violation of Title IC, United States Code, Hecticn
1623, and to defrcud tb,c United States and Agencies and
Dc-partraents thereof, to \;it, the Centi'al Intelligence
Agency (CI/O , the Federal Bureau of Investigation (TBI) ,
and the Department of Justice, of the Governncnt's right
to have the officials of these Dcpartr.ients and Agencies;
transact their official business honestly and iinpartially,
free fron corruption, fraud, improper and undue influ-
ence, disl-.onesty , unlavful iinpairir.ent and obstruction,
all in violation of Title 10, United States Code, Sec-
tion 371.
13. It V7as a part of the conspiracy that the
conspirators v.'ould corruptly influence, obstruct and
iiiipede, and corruptly endeavor to influence, obstruct
and impede, tb.e due adninistration of justice in con-
nection v.'ith the investigation referred to in paragraph
tliree (3) above and in connection v;ith the trial of
Criiriinal Case Ko. 1827-72 in the United States District
Court for tlie District of Colujn]Dia, for tlie purpose of
concealing and causing to be concealed the identities
of the persons v.'J-io v:ere responsible for, participated in,
and had Irnov-'ledge of (a) tlic activities v.'liicji v;cre tl:e
subject of the invcstigatioi and trial, and (b) other
illegal c'.nd i: ~p :•:.■?• -"■.■;i- act ■.',':■'.••' :.'n .
(231)
34a. UNITED STATES V. MITCHKLL INDICTMEKT, CR. 74-110
MAnCH 1, 1974, 1-lb '
] -I , It \.-;-.o furtlico: a p;^j:t of tiu> conr.nirr.cy
the- L the ccnr.pi L:'.tc:-i; vrould )i;~u'..':uicj3y r.:.'.\c ari'?. c.r.u.'.f
to bo ii!=..c;c- jralse ntateiucntG to the FBI ^nd fa.lso natdrial
statov.c^ntr. and dcc}.ar^tio;->n under each .in prcceodinos
befoLC and ancill:.ry to the Grand Jury and a Court of
tlie United States, for the purposes stated i;i para-
graph th.ixLeeii (13) above.
15. It v;as further a part of the conspiracy
that the conspirators \;ould, by deceit, craft, trickery
and dishonest means, defraud tlie United States by inter-
fering v.'ith and obstructiny the lawful gcvernnental
functions of the CIA, in that the conspirators would
induce the CIA to provide financial assistance to per-
sons v.'ho v;ere subjects of the investigation referred
to in paragraph three (3) above, for the purposes stated
in paragraph thirteen (13) above.
16. It v.'as further a part of the conspiracy that
the conspirators would, by deceit, craft, trickery and
dishonest rceans, defraud the United States by inter-
fering v.'ith and obstructing the lawful gcvernnental
functions of the FBI and the Department of Justice, in
that the conspirators vrould obtain and attempt to cbtain
from the F3I and the Departinent of Justice inforrr.aticn
conccriiing the investigation referred to in paragraph
three (3) above, for the purposes stated in paragraph
tliirteen (13) alsove.
17. Among tlie incuuis l>y whicli tlie conspirators
v.'ou.ld carary out t}ie aforesaid coiispiracy v.-ere the follc.;-
(232)
Z4a. VNITEV STATES V. MITCHELL INDICTMENT, CR. 74-110,
MABCE 1. 1974, 1-lb
(a) Tho con.';j"i.\ rator:: v.-ould dirc-ct
G. Coi'dori Li.dily to cd'S.i the ii'jzi L-ti2;\cc
of )vi chard G. IJlciiidicnrr , then /'.ttorney
General of th= United Stater., in obtain-
iny tlie release from t}-.e District of Colui'^da
jail of one or raore of t}ie pcrso;;G \;ho had
been arrested on June 17, 1972, in the
offices of the Derocratic National CoKLTiitteo
in the VJateroate office building in V7ashincton,
D, C, and G. Gordon Liddy ^■?ould seek such
assistance frora Richard G. Kleindiejist.
(b) The conspirators v.'ould at various
tinies remove, conceal, alter and destroy,
atter.pt to remove, conceal, alter and de-
stroy, and cause to be rerr.oved, concealed,
altered and destroyed, docurr.ents, papers,
records and objects.
(c) ' The conspirators v;ould pla)i, solicit,
assist and faciJ.itate the giving of false,
deceptive, evasive and ir.isleading statcrr.ents
and testimony.
(d) The conspirators v.'ould give false,
misleading, evasive and deceptive statements
and testimony.
(e) The conspirators would covertly
raise, acquire, transiP.it, distribute and pay
cash funds to and for the benefit of the cc--
fcndants in Grir.iinal Case Ko . 1827-72 in tl:c
T--. '">■■! .S'.r.-'r-; n-. rt^-?. ci: Conrt for the Dist:'"Lct
(233)
34a. UNITED STATES V. MITCHELL INDICTMENT, CR. 74-110,
MARCH 2, 1974, 1-15
of Colur.b.ia, botli prj.or to ;;nd cubi'c-
quent to the return of tlio indictinc;i b
on Ceptci"ber 15, 19 72.
(f) The corispirators v;ould naJic end
cause to be rriado offers of leniency, exe-
cutive clerPi;ncy and other benefits to
E. Hov;ard Hunt, Jr., G. Gordon Liddy,
James V7. KcCord, Jr., and Jeb S. Magruder.
(g) The conspirators v.-ould attempt
to obtain CIA financial assistance for
persons \;bjO were subjects of the investi-
gation referred to in paragraph three (3)
above .
(h) The conspirators \,'ould obtain
information from the FBI and the Department
of Justice concerning the progress of the
investigation referred "to in paragraph
three (3) above.
18. In furtherance gf the conspiracy, and to
effect the objects thereof, the follov.'ing overt acts,.
among others, v.'ere committed in the District' of Colu.T.bia
and elsev:here:
OVKRT ACTS
1. On or about June 17, 1972* JOKM N. HITCj;ELL
met with ROBERT C. MARDIAH in or about Beverly Hills,
California, and rccjuested MAHDI^iN to tell G. Gordon
Liddy to sock tlie assii; ta:ice of Ricliard G. .};icindienst.
the:; A;t-:;;:n:y C-;.-::-l i" the Un\tod State-, in obt-:l: .rz
-thct j^.lGase of one or i,,.:-^e of tlie i)ersoriS aj ro£;tou, .-.:
(234)
34a. UNITED STATES V. MITCHELL INDICTMENT, CF. 74-220,
MARCH 2, 2974, 7-75
A. On or -iJ>oui; .J\i::a lb', j.\i / .'. , m t;ie Oi'^'crxct
of Colunbia, COr.;;o;; STlV.CrJi:; clcstroycl uoc-Oir.anLrj on ti.c
instructions oL 1!AkRY R. nhhDr.ljCi .
3. On or about June; 19, 1572, JO:;:-? D. EHRLICi;::.-.;:
mot v:.i.th JoJin V?. Donn, III, at thG V.'hite h'ouce in the
District of Colu:nbia, at v;hich tiir.e EKKLICIIM^.tv' directed
Dean to tell G. Gordon Liddy that E. Kov:ard l-unt, Jr.,
should leave the United States.
4. On or about June 19, 1972, CHARLES V7. COLEOi;
and JOHi; D. EHRLlClul'iK j~et with John V/. Dean, III, at
the vrhite HouL:e in the District of Col'onJDia, at which ti::-.2
EP-RLICHM/ia' directed Dean to take poGsescion of the con-
tents of E. Ho->;ard Hunt, Jr.'s cafe in the Executive
Office Building.
5. On or about June 19, 1972, ROBERT C. MARDi;.:,^
and JO'.iH K^ . IIITCHELE r;.ct v.-ith Jeb S. iiagruder at 1;ITCH::ll's
apartiuent in the District of Colv-r.ibia , at v.'hich time
MITCHELL Buggestcd that Kagruder destroy dociOTents fron
Hagruder ' r- files.
6. On or about June 20, 1972, G. Gordon Liddy
met with Fred C. LaRue and ROBERT C. K'J^'JIDIAII at LaRue ' s
apartrricnt in the District of Coluir.bia, at v:hich tine
Liddy told LaRuc and JlARDIAiJ tliat certain "cor.ir-Aitir.ents"
had been ir.ade to and for the benefit of Liddy and other
persons involved in the v:atergate break-in.
7. On or about June 24, 1972, JOHN K. MITCHELL
and ROBERT C. I;.\RDIA:-,' r.ic;t v;ith Jo!in VJ. Dean, III, at 170]
)' u nn ■-,->' Ivi.r. in Avenue in the District of C'jlui:iJDia, Kt \v};>;.;:
tiii^e JilTC;; /.L ^-nd I-'WD:/-:-. su;-c;G^7:cd vo Dean tlint the C^"
be rnquer-.tod to provide covert fund;-, for t>)e assj ntanro of
(235)
iS4a. UNITtV STATES V. MTTCHELL INDICTMENT, CR. 74-110,
MARCH 1, lyy4, 1-15
8. Cii or i.bc.ut ouiic :^6, 1^)72, JO!i:; D. i::HnL[c;!;-:ri:;
inet v.'.ith Ooh:-) V". C.^.i\n, III, ."".t 1:1. c White House in tiic;
Dif-;i.Tict of Cv\w:^:>\n , aL'v.-hich ti;-.-^ I'A'.PjyjiOll'J'.l^ irpprovcd
a sv;y;cr:tiGn . t'lat Dc;an ask Gc)-»crj.l Ver)"iOn A. Vvaltcrs,
Dciputy Director of the CIA, v.-hcfncr t!ic CIA could use
covert fuiicls to pc-.y the bail ar.d calorics or the persons
ir.volvcd in the V^atergatc break-in.
9. 0:i or about June 28, 1972, JOII" D. EKKLICHMAI,^
had a conversation v:ith John V.'. Dean, III, at the Vihite
House in the District of Columbia, during ^,•hich EHRLIC]i:i-\N .
approved the use of Herbert W. l^aJrrbach to raise cash funds
v.'ith v.-jiich to r.iake covert payments to and for the benefit
of t})e persons involved in the V'atejfcate break- m.
10. On or about July G, 1972, KEKuETH VJ. PAKKINSOn
had a conversation v.'itii vrilliain O. Bittraan in or about
the District of Columbia, during v.'hich PARIvIKSOa' told
Bittn^sn that "P.ivers is OK to talk to."
11. On or about July 7, 1D72, Anthony Ulasev;icz
delivered approxiruately $25,000 in cash to v:illiam 0.,
Bitta:\-).n at B15 Connecticut Avenue, N. \1 . , in the District
of Coluinbia.
12. In or about ir,id-Ju]y, 1972, JOHK^ N. MITCHELL
and KE^JvETi; \K PAR1CI;-:£0:J net v.'ith John W. Dean, III, at
1701 Pennsylvania Avenue, N. V7. in the District of Colur.Jjia,
at v.'hich tir.:e rjITCliEIL advised Dean to obtain FBI reports
of thie investigation into the V'atcrgate brea);-in for
P;; V.':' 1 ] ' S 0>; a n. d o th e r s .
13. On or about July 17, 1972, Anthony Ulasev.-ic-,
CoXiv-vrc-c a;.;.--'',;:i::v;tei ;.' ^i-O.OOO in (-;.=;ii io l)orijt(iy I^unt
(236)
34a. UNITED STATfS V. MITCHELL INDICTMENT, CR. 74-110,
MARCH 1, iyy4, l-lb
J. 'J. u;i or aDcuu J\iiy y i , xv / y. , yuimioiiy L.ixascv.'ic;:
delivered appro;:i»ately $8,000 in ciish to G. Cordon Lidcy
at V'r.uhiiigtcn Kirticnal Airport.
15. . On or abovit July 21, 1972, ROBERT C. MAHDIAts-
rp.ct with John \1 . Dean, III, at the ^:hitc Houi;c in the
District of Coluribia, at v.'hic;-, time iL-i.P.DIA":; cxainined FDI
reports of th.e investigation conccr.ning tlie V.'iitergate
brca)c-in.
16. On or about July 26, 1972, JOni: D. EHTvLICiiMi.:;
met v.'ith Herbert V7. Kalnbacli at the White House in the
District of ColiuT.ibia, at v;hich time EHRLICHMsiC told
Kairo-bacli that ICalwbacli had to raise funds vjith which to
make payir.ents to and for the banefit oi the persons in-
volved in t!ie '.vr.tcrgate brea];-in, a)id thcit it was neccssRzi
to ):eep such fund raising and paymonts secret.
17. In or abo\it late July or eairly August, 1972,
Anthony Ulasevricz r;ade a delivery of approximately $43,002
in cash at Vlashington National Airport.
18. In or about late July or early August, 1972,
Anthony Ulasev.'icz rr.ade a delivery of aporoxinately $13,003
in casli at \'7ashington ^'ational Airport.
19. On or about August 29, 1972, CHARLES V; . COLSO::
had a conversation with John W Dean, III, during v;hicli
Dean advised COLSON not to send a mer?.oranduiin to the
nutl::orities investigating the V'atergate break-in.
20. On or about Scptcrr-JDer 19, 1972, Anthony
Ulaso'.vic". delivered approrinately $53,500 in cdish to
Dorothy ]U:;~.t at \-.".:! shirigton ^"c.ticna]. .''..i )-port^
- 1. - .- T
of Co?A)~bia, Frod C. LaRuo arranged for tlie dcliverv o'r
(237)
34a. UNITKD STATES V. MITCHELL ItfDICTMENT, CR. 74-110,
MARCB 1, 1974, 1-lb '
22. On or abovt IJovcinLcr 3 3, .1972, ii) the Dis-
trict of Colo'r.b.i.a , E. jlov.'ard Hunt, Jr., lu;d a tclcph.oric
conversation v.'ith CHARLITS VJ. COLSOrv', during \.')iich Hunt
diKCucsed vith COLSOIs' the need to rnnkc additional pi;y-
ment.s to and for the benefit of the def c-!id£;ntc in Crininal
Case Ko. 1827-72 in the United Strites District Court fo"
the District of Colui.ibia.
23. In or about raid-K^ove-ber , 1972, CHARLES W.
COLSOK last V7ith John W. Dean, III, at the V^iite House in
the District of Columbia, at v.-hich time COLSON gave Dean
a tape recorniiig of a telephone conversation betv?cen
COLSOI' and E. Hov:ard Hunt, Jr.
24. On or about Koverr.ber 15, 1972, John VJ. Dean,
III, inst v;ith JO)'.:; D. EliRLICHIL^iJ and HARRY R. KALDE;-J\N
at Ci:;np David, Maryland, at which time Dean played for
EHRLICIIMAN and H/lLDEMAN a tape recording of a telephone
conversation betv.'een CHARLES VJ. COLSON and E. Hov;ard Hunt,
Jr.
25. On or about November 15, 1972, John K. Dean.,
Ill, met with JOH".; N. MITCKELL in New York City, at v;hich
time Dean played for I-JITCIIELL a tape recording of a tele-
phone conversation between CHARLES V?. COLSON and E. Hov.-ard
Hunt, Jr.
26. On or about Deccnvber 1, 1972, KENNETH V7.
PARKINSON met with John \1 . Dean, III, at the VJhite House
in tlie District of Colu:;''.bia , at v.-iiich tir.ie P7-.RKINS0N cja\'e
Dean a list of anticipated expenses of the ccf cndro^ts cur-
ing the trial of Crimin.al Case N'o . 1S27-72 in the United
States District Coi:rt for the Dlr-Lrict of Coivj.-ibia .
(238)
Z4a. UNITED STATES V. MITCHELL INDICTMENT, CR. 74-110,
MARCH 1, 1974, 1-15
27. lu or ;;!iou;- c-arly \:c(:<j:vhor, 1972, V.:'.]:)\Y H.
}li\h)y:Z:'.'VA 'r.c-.Cx I- tolcr.'.'iO.'io cc.n\'crsa tion v.-.rhh Jo!:n v:. Donn,
III, dvri'.Kj v.'lijcli J;.'-.L1:)L';;ai; approvod the use of a portior.
of a cc:,;i i^u.r:ci of eppro::5j:.:i i-.cly v350,0C;0, tb.en boiny lic;ld
under 117'.L):)rj;iAN" ' fi ttontro.l, to r.ahe fuld itior.al payment? to
and for tiic benefit of the def cndr.:its in Crir.iiiial Case
Ko. 1027-72 in the Ui^itcd States District Court for the
District of Columbia.
28. In or about early DscerrJjer, 1972, GORDON
STRJiCilAN met witli Fred C. Lal'ue at LaRue ' s apartn-.cnt in
the District of Colu-"bia, at which tire STr^.C'd-'iiJ delivered
approximately ?50,0G0 in cash to LaRue.
2S. In or about earl.y Decer.ber, 1572, in the Dis-
trict of Colurnbia, }:'red C. LaP.ue arranged for the delivery
of appro:;inatelY $'^0,000 in cash to vrilliara 0. Bittr.ian.
30. On or about January 3, 1973, CHARLES V7. COLSO>"
met v.'ith JOHN D. EHPXlCh'I-.'AN and John VJ. Dean, III, at the
V?hite House in tlie District of CoJuml^ia, at v.'hich tine
CObSO'J, EHRLIC!:;-^.K and Dean discussed the need to make
assurances to D. Howard I^unt, Jr. ccncerjiiny the lengt)-!
of tiir.e E. Hov.'ard Hunt, Jr. v;ould hsrve to spend in jail
if he were convicted in Criminal Case Ko. 1027-72 in tlie
United States District Court for the District of Colur.ibi.a.
31. In or about early January, 1973, H/.RRY R.
H/i.LDE!-;AN had a conversation v.-ith Join) Vr. Dean, III, dur-
ing v;iiich H-^LDEn.^^; approved the use of the balance of the
cash fund referred to in Overt Act "c. 27 to ;:.:!}:(> i^ddi-
tional payrr.eiits to and for the benefit of t):a defendants
in Cri;ii;:al C....:- i;.... j.Z2';-J~. 5:: t'i;> l'::itc-d r;t-.tcs Di;:z-:.c ^
(239)
24a. UNmV STATfS V. MTfCHELL INDICTMENT, CR. 74-110, .
MARCH 1, 2^/4, 1-lb
3?. :tn or .-•.bo'ot c-^rly Orn\\.\xy , .1?73, C0}'.;)0:;
ST)'JiCii;.:! )':7:t \n v-h Frecl C. T.al-.\ie i'A: LnJV.io ' r- nparti.iont
in thj-. DiL.t:ricl. of Colv.iribi:-. , at v:hicli tii.ic £:'^R^•.C'l;7i^;
deliver.- cl £ip:jrc;:i!.ir-tcly $300,000 .\;i car.h to LoRue.
33. In or about early Jan-K-ry, 1973, JOi:;<I K.
l-ilTCl-'.':"!,!. Jiad a telcp]io.-ic> convor5;ei t.icn v.'ifn John 'o. )5o.;n,
III, during v;hich KITCiir.LL asked Doan to hr.ve John C.
Cauliicld givo; s.n assuru!;cs of executive clemency to
Jamec: V?. McCord, Jr.
34. In or £;bout :To.d-Jnnunry , 1973, in the District
of Colu^r.bia, Frod C. LzP-ve arran'-jed for tlie delivery of
approximately f 20, 000 in canh to a representative of
G. Gordon Liddy.
35. On o;c about February ].l, 1973, in Ranclio I, a
Costa, California, JOHK^ D. EKnLICJ'i'JAN and I'ARRY R.
J-rALDFIlAK niet \.'itli John 1?. Dean, III, and discussed tlva
need to raise raoney v/itli v/iiich to riake additional pay-
ments to and for the benefit of the defendantc in Crininal
Case V<o. 1827-72 in the United States District Court for
the District of ColuiTibia.
36. In or about late February, 1973, in the Dis-
trict of CoJur.ibis, Fred C. LaRue arranged for tl:e delivery
of appro>:i);iacely $25,000 in cash to 1-?illi£;:i 0. Bittrrian.
37. In or about late February, 1973, in the Dis-
trict of Colur.'.bia, Fred C. LaRue arranged for the delivery
of approximaucly $35,000 in cash to VJilliar.i C. Bittr.ir.n.
30. On or about :;arch IG, 1973, F. Howard Hv--.t,
Jr., Mct-v.'ith Paul O' Brj.cn at 815 Connecticut Avenue,
iv . V;. j.n tr.e :.';.;;\;ricu. i.; C^IviWl-x..^ , ciu •.•:n5cj> tii;;e llunr
(240)
a^a. UNITED STATES V. MITCHELL INDICTMENT, CB. 74-110
MARCH 1, 1974. 1-lb
30. Oil o;..- i:!iouL i:u:.ch 19, yM 'A , JOiT'; O.
EillUj] c;;, lAl.' had >: convcrr.ation \.'itp. Jo)))i 1,'. Dean, III,
at the \,')iite l]ov!.~e in the District oi; Coluirbia, during
v.'liic!; Liirj.ICil.'-:-.".; told Dc-.an to inTor;,) JO,';;; ;>. ;:i;TC.'Jl'.LL
r.bout tliG fccc that i:. Hov7ard Ilur.t, Jr. liad i.vJccd
for Cjppro;:ir.atcly $120,000.
^^lO.J On or about .'larch 21, 1973, iron <-ppro;:ir.ij;tC;ly
11:15 a.m. to apprc::iiTiatcly noon, HARRY R. )!ALDEI-;7iI! and
Johii M. Dean, III, attended a maeting at tlie U'liitc Plouce
in the District of Coluribia, at v;hicli time there V7as a
dir.cuL-s.ion about the fact that E. );ov;£rd Hunt, Jr. had
asked for approxinately $120,000.
41. On or about M.^.rch 21, 1973, at approxinately
12:30 p.m., HARRY R. HJ-.hDiy.'SiU had a telephone conver-
Ea.t'ion \;ith 3CUU N. MITOISLL.
/i2. On or about the early afternoon of 15arch 21,
1973, aouu U. JilTCilELL had a telepl;onc conversation
vjitli I'red C. LaHue duriny v.'iiicli J-IITCHSLL authorized LaRiie
to mcJ:o a payment of approximately $75,000 to and for
the benefit of )i;. llov.'ard Hunt, Jr.
f 43 J On or about the evening of I'5arcli 21, 1973,
in the District of ColvciJ^ia, Fred C. LaRue arranged
for the delivery of approxi:r,ately $75,000 in cash to
V.''illiam O. Bitt;iian.
44. On or about liarch 22, 1973, JOISK^ D. EiiUl.ICiiJ'L^'.:; ,
HARP.y R. HALDK:-'.?.::', and Jo!-n \7. Dean, III, net v;ith JC^iW
K. JJl'j'CiiELL at the ijiite House in the District oi Coli,irl)ia,
at \;hicl) tine /-iITCilRLL assured KJ.'RI.ICii.M.'.:^ that E. Ho'..'i\rd
(241)
64a. UNITED bYATES V. MITCHELL INDICTMENT, CR. 74-210.
MARCH 1, 1974, 2-25
45. On or r.bcuv. Marc:]} 2?, .19 73, JC:VA D.
EIinLICHMfi/J had a convcrsat:.on v/ith JJ^jil Kroyli at
tho \;'hitG )]ouse in tVje District of ColuiP.bia, at
v.'hich tiir.a rrRLlCliM".:; assured }'.rcg]i tJis.t HIJra^lCJIM^w,^
did not believe that E. Hov:arc }:unt, Jr. vrould reveal
certain natters.
(Title 18, United States Code, Section 371.)
O
(242)
STATEMENT OP INFORMATION SUBMITTED
ON BEHALF OF PRESIDENT NIXON
HEARINGS
BEFORE THE
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
NINETY-THIRD CONGRESS
SECOND SESSION
PURSUANT TO
H. Res. 803
A RESOLUTION AUTHORIZING AND DIRECTING THE COMMITTEE
ON THE JUDICIARY TO INVESTIGATE WHETHER SUFFICIENT
GROUNDS EXIST FOR THE HOUSE OF REPRESENTATIVES TO
EXERCISE ITS CONSTITUTIONAL POWER TO IMPEACH
RICHARD M. NIXON
PRESIDENT OF THE UNITED STATES OF AMERICA
Book II
DEPARTMENT OF JUSTICE-ITT LITIGATION
MAY-JUNE 1974
Y4. Zn/^ ' ^^ ~b/<^Ak.X
U.S. government printing office
36-103 O WASHINGTON : 1974
For sale l)y (he tfupeiiiitendeiit of Docuinents. I'.S. Goverimieiit Frinling Office
Washington, D.C. 20402 - Trice $2.35
COUNSEL TO THE PRESIDENT
James D. St. Clair, Special Counsel to the Preniilent
John A. McCahill, Assistant Special Counsel
Malcolm J. Howabo, Assistant Special Counsel
1 ~
(II)
FOREWORD
By Hon. Peter W. Rodino, Jr. , Chairman
Committee on the Judiciary
On February 6, 1974, the House of Representatives adopted by
a vote of 410-4 the following House Resolution 803:
RESOLVED, That the Committee on the Judiciary acting as
a whole or by any subcommittee thereof appointed by the
Chairman for- the purposes hereof and in accordance with
the Rules of the Committee, is authorized and directed
to investigate fully and completely whether sufficient
grounds exist for the House of Representatives to exercise
its constitutional power to impeach Richard M. Nixon,
President of the United States of America. The committee
shall report to the House of Representatives such resolu-
tions, articles of impeachment, or other recommendations
as it deems proper.
On May 9, 1974, as Chairman of the Committee on the Judiciary,
I convened the Committee for hearings to review the results of the
Impeachment Inquiry staff's investigation. The hearings were convened
pursuant to the Committee's Impeachment Inquiry Procedures adopted on
May 2, 1974.
(m)
These Procedures provided that President Nixon should be
afforded the opportunity to have his counsel present throughout the
hearings and to receive a copy of the statement of information and
related documents and other evidentiary material at the time that
those materials are furnished to the members.
Mr. James D. St. Clair, Special Counsel to the President,
was present throughout the initial presentation by the Impeachment
Inquiry staff. Following the completion of the initial presentation,
the Committee resolved, in accordance with its Procedures, to invite
the President's counsel to respond in writing to the Committee's ini-
tial evidentiary presentation. The Committee decided that the
President's response should be in the manner of the Inquiry staff's
initial presentation before the Committee, in accordance with Rule A
of the Committee's Impeachment Inquiry Procedures, and should consist
of information and evidentiary material, other than the testimony of
witnesses, believed by the President's counsel to be pertinent to the
inquiry. Counsel for the President was likewise afforded the oppor-
tunity to supplement its written response with an oral presentation
to the Committee.
(IV)
President Nixon's response was presented to the Committee
on June 27 and June 28.
One notebook was furnished to the members of the Committee
relating to the Department of Justice - ITT litigation. In this
notebook a statement of information relating to a particular phase
of the investigation was immediately followed by supporting evi-
dentiary material which included copies of documents and testimony
(much already on the public record) and transcripts of Presidential
conversations .
The Committee on the Judiciary is working to follow faithfully
its mandate to investigate fully and completely "whether or not suf-
ficient grounds exist" to recommend that the House exercise its con-
stitutional power of impeachment.
Consistent with this mandate, the Committee voted to make
public the President's response in the same form and manner as the
Inquiry staff's initial presentation.
6J
July, 1974
(V)
CONTENTS
Page
Foreword iii
Introductory Note vii
Statement of Information 1
Statement of Information and
Supporting Evidentiary Material 19
(VII)
INTI^ODUCTORY NOTE
The material contained in this volume is presented in two sec-
tions. Section 1 contains a statement of information footnoted with
citations to evidentiary material. Section 2 contains the same state-
ment of information followed by the supporting material-
Each page of supporting evidence is labeled with the footnote
number and a description of the document or the name of the witness
testifying. Copies of entire pages of documents and testimony are
included, with brackets around the portions pertaining to the state-
ment of information.
In the citation of sources, "SSC" has been used as an abbrevi-
ation for the Senate Select Committee on Presidential Campaign Activities.
(IX)
STATEMENT OF INFORMATION
SUBMITTED ON BHiALF
OF TIE PRESIDENT
DEPARTMENT OF JUSTICE -- ITT LITIGATION
(1)
1. In December, 1968, Richard W. McLaren was interviewed
for the position of Assistant Attorney General, Antitrust Division,
Department of Justice, by John N. Mitchell and Eichard G Kleindienst.
As a condition to his acceptance of th^t position, Mr. McLaren '.
insisted that antitrust enforcement decisions would be based solely
on the merits of any given situation.
Page
la Richard W. McLaren testimony, 2 KCH 1 16- 1 17. . . 22
lb Richard G. Kleindienst testimony, 3 KCH 1725 24
(3)
2. In 1968, Mr. Nixon appointed a Task Force on Productivity
and Competition to review antitrust policy and make recommendations.
The task force, headed by Professor George Stigler of the University
of Chicago, presented its report to President Nixon on February 18,
1969 and recommended against immediate legal action re: conglomerate
mergers.
' Page
2a The Stigler Report, 115 Cong. Rec. 15653, 15656(1969). 26
2b White House "White Paper, " The ITT Anti-Trust Decision.
January 8, 1974, 2 31
2c Remarks of Harold S. Geneen, ITT Chairman and President.
June 26, 1969, Annual Adeeting of ITT Shareholders, 8 33
(4)
3, Apparently, in June of 1969, Mr. Gencen f.'.u;];ht to meet with
President Nixon about certain financial aiul economic concerns of
ITT, including, but not limited to, the antlirust rur'^;. John N.
Mitchell, for one, thought the meeting would be i:^.r.ppropriate
because of ITT's legal involvement with tlic Depai-ta-ient of Justice.
The meeting was not schedule.
Page
3a Letter of June 9, 1969, fro:n Lore.;'. M. Berry
to the. President enclosing one co])y of a June 3,
1969, letter froni Geneen to Maurice Stans 36
3b Memorandum of July 14, 1969, froni John
Mitchell to John Ehrlichj-nan 43
3c Memorandum of July I6, I969, froin Dwight L.
Chapin to Peter Flanigan 44
(5)
4. In March, 1971, the Solicitor General authorized an appeal
to the Supreme Court from an adverse decision in the United States v,
ITT (Grinnell) case because of practical difficulties in the future if
the decision were left standing. The Solicitor General and his asso-
ciates thought the case to be very hard; his chief deputy thought the
government's chances of winning were minimal.
Page
4a Memorandum from A. Raymond Randolph, Jr. to the
Solicitor General dated March 2, 197 1 46
4b Memorandum from Daniel M. Friedman to the Solicitor
General, dated March 15, 1971 ; 1, 4-5 55
4c Supplemental memorandum froin A Raymond Randolph
Jr. to Daniel M. Friedman, dated March 25. 1971; 1, 2.. 60
4d Memorandum to the Solicitor General from Daniel M.
Friedman dated March 26, 1971 62
4o March 26, 1971, appeal authorization of the Solicitor
General 63
(6)
5. After the President's telephone call of April 19, 1971, to
Kleindienst ordering him to drop the Grinnell appeal, Kleindicnst
met, in his office, \vith McLaren and the Solicitor General and
requested the Solicitor General to apply for an extension, McLaren
had no objection to the application for an additional extension of tinne.
Page
5a Ervin N. Griswold testimony, 2 KCH 380, 388 66
5b Richard W. McLaren testimony, 2 KCH 327, 328/ 68
5c Richard G. Kleindienst testimony, 2 KCH 289, 292, 3 KCH 1680. 70
41-566 O - 74 - 2
(7)
6. On June 17, 1971, McLaren recommended to Kleindienst
that the ITT suits be settled. Kleindienst approved the proposed
settlement by writing: "Approved, 6/17/71. RGK. " In affixing his
approval, Kleindienst relied on the expertise of McLaren.
Page
6a Testimony of Richard W. McLaren 2 KCH 110-1 13 74
6b Testimony of Richard G, Kleindienst 3 KCH 1732-1733. . 78
(8)
7. \Settlement initiations had taken place in late 1970. ITT's
settlement posture advanced included its keeping the Hartford Fire
Insurance Company. McLaren rejected any settlement talk along
that line.
In early 1971, ITT began to formulate a plan, based on economic
theory, of why it was important for ITT to retain Hartford. Eventually,
on April 29, 1971, ITT made an economic presentation to the Department
of Justice on national economic consequences if ITT were forced to
divest itself of Hartford. As a result of that presentation, in com-
bination with the Ransdem Report from his own independent financial
expert, McLaren proposed a settlement offer enabling ITT to retain
Hartford.
Page
7a Memorandum of John W, Poole, Department of Justice
to Files dated August 7, 1970 82
7b Memorandum of August 18, 1971, authored by
Richard "W. McLaren* 84
7c Affidavit of Harold S. Geneen, dated June 12, 1972, given
in connection with a Securities and Exchange matter 88
7d Testimony of Richard G. Kleindienst 2 KCH 129
95
7e Letter of May 3, 1971, from Felix G. Rohatyn to
Richard W. McLaren 96
7f Testimony of Richard W. McLaren, 2 KCH 165 100
7g Testimony of Richard G. Kleindienst, 3 KCH 1736. 101
(9)
8. On July 31, 1971. the ITT cases v/ere finally settled. Whether
ITT would have to divest itself completely of Grinnell was a principal
matter of consideration between June 17, the date of McLaren's pro-
posal, and July 31, and in ITT's eyes, a m^atter upon which any
settlement hinged.
According to McLaren and Kleindienst, McLaren and his staff
were responsible for the settlement. Kleindienst did not talk with
McLaren about this matter at any time from June 17 until July 30.
Mitchell and McLaren never talked with each other about the cases.
There exists no testimonial or documentary evidence to indicate
that the President had any part, directly or indirectly, in the settle-
ment of the ITT antitrust cases.
McLaren was unaware of any financial commitnaent by ITT in
regard to San Diego's hosting of the Republican National Convention
until long after the negotiations had terminated. McLaren has stated
ITT's contribution had nothing to do with the settlement.
Page
8a Affidavit of Harold Geneen, dated June 12, 1972; 4-7. . . 105
8b Testimony of Richard W. McLaren, 2KCH113, 361, 125,
116-117, 144, 174, 110
8c Testimony of Richard G. Kleindienst, 2 KCH 142, 99,
3 KCH 1732-33, 1736/ 117
8d Testimony of Felix Rohatyn 2 KCH 119. ^22
8e Testimony of John N. Mitchell 2 KCH 541-, 123
(10)
_ 2 - P^^e
8f Testimony of Richard W. McLaren 2 KCH 139 • 124
8g Remarks of Richard W. McLaren on Face the Nation
(3-19-72) 126
(11)
9. N On July 23, 1971, the Republican National Conamittee selected
San Diego as its selection site for the 1972 Republican National
Convention. San Diego was the preferred site by William Timmons,
who had investigated that city as a potential site and the Attorney .
General's convention task force, and was the highest regarded city
for security purposes. ^ -^'^ .
9a Mennorandum of May 6, 1971, from William E. Tim.mons
to H. R. Haldeman .:.,,... 128
9b Memorandum of June 23, 1971, from Gordon Strachan to
H. R. Haldeman 130
9c Memorandum of June 26, 1971, frona Jeb Magruder and
William Timnnons to The Attorney General and H. R.
Haldemanj 13 6
9d Memorandum of June 30, 1971, from Department of
Justice, Law Enforcement Assistance Administration
to William Timmons. 145
(12)
10. \ In respon.s.e to a question at the Senate Select Committee,,
concerning JDita Beard's disappearance on the eve of the Kleindienst
hearings, E. Howard Hunt stated that he was not aware of any role
Gordon Liddy played in Mrs. Dita Beard's departure fronn Washington.
,- . Page
10a E. Howard Hunt Testimony, 6 SSC 3791 154
(13)
11. On June 22, 1974, The New York Times, page 15, carried
a story in which Rep. Bob Wilson (R- Calif. ) said the Special
Prosecutor informed him that no legal action was being considered
against him in relation to the ITT matter.
-^ ^ . Page
11a New York Times article, dated June 20, and carried
in its June 22, newspaper. 156
(14)
12. On April 4, 1972, the President met with H. R. Haldeman and
Attorney General Mitchell in the Oval Office from 4:13 p.m. to 4:50
p.m. during which time the ITT matter was mentioned.
Page
I2a Transcription of recorded conversation of above-
described meeting; 1, 4-6, 8, 10, 15. (A transcription
was previously furnished to the House Judiciary Committee). . 158
(15)
13. During the days following the publication of the "Dita Beard"
niemorandun-i on February 29, 1973, several of the top White House
aides were involved in investigating the allegations contained in that
memoranduiTi.
The act-ual settlement of the ITT cases as a quid pro quo for an
ITT commiti-iient to the Republican National Convention was the focal
point of the Kleindienst Confirmation Hearings which began on
March 2, 1972. Peter Flanigan, a White House aide, was the object
of considerable attention from the Senate Judiciary Committee and
press during the coverage of these hearings.
Page
13a Testimony of Charles Colson on June 14, 1973,
before the Special Subcommittee on Investigations
of the House Coirxmittee on Interstcite and Foreign
Commerce, page 202 190
13b Statement of Richard G.. Kleindienst, dated 10-31-73 191.
13c Testimony of Richard G. Kleindienst, 2 KCH 95-96 192
13d Memorandum of March 13, 1972, to John Dean froin
Charles Colson 194
13e The Washington Post, April 27, 28. 1972 198
13f The Boston Globe, April 13, 1972; and The
Washington Post, March 16, 1972^ 200
(16)
Id. The President left for an official visit to the People's Republic
of China on February 17, 1972; he returned on February 28, 1972. He
spent the weekend following his return at Key Biscayne, Florida. On
Mriy 20, 1972, the President went to Moscow, returning on June 1,
1972.
Page
1 4a ^ycekly Compilation of Presidential Docunnents ,
Volume 8, Nuinber 8, 443-44; Volunae 8,
Number 9, 482 ■ 204
1 4b Weekly Compilation of Presidential Documents ,
Volumes, Number 23, 912, 975...' 207
(17)
STATEMENTT OF INFORMATION
AND
SUPPORTING EVIDENCE
SUBMITTED ON BEHALF
OF THE PRESIDENT
DEPARIMENT OF JUSTICE -- ITT LITIGATION
(19)
1. In December, 1968, Richard W. McLaren was interviewed
for the position of Assislant Attorney General, Antitrust Division,
Department of Justice, by John N. Jvlitchcl" r.rai Kichard G Kleindienst,
As a condition to his acceptance of that po? ition, Mr. McLaren i
insisted that antitrust enforcement decisioni- v/ould be based solely
on the merits of any given situation.
Page
la Richard W. McLaren testimony. 2 KCH 1 16-117.. . 22
lb Richard G. Kleindienst testLmony. 3 KCH 1725 24
(21)
lA. RICHARD MC LABEN TESTIMONY, MARCH 2, 1972, 2 KCE 116-1?
Richard W. McLaren, Testimony
116
memoramUun allegcdlv written by Mrs. Dita Bejud. Mr. Hume
asked whether the subject of that nioniomndum had entoicJ iiUo \y\y '
conversations with the Justice Dcpiivtmcnt. I flath- denied that
anything having to do with tht' Shorulon commitment liad ever l)cen
discussed by me with Mr. Kieindicust or anj- otiier representative of
Justice.
Let mo say now that I do not know Mrs. Beard and, in fact, had
never heard her name before talking with Mr. Hume. Moix-over, I
never knew of an ITT commitment of the San Diego Convc-nlion
Bureau until December 1971, when I read about it in the public press.
Tin's was G months after the antitrust settlement had been reached.
Therefore, it was literully iniuossible for me to have participated in
anv conversation regarding the commitment.
the settlement requires, so far as I know, the largest divestment in
the history of world enterprise comprising companies \nth sales ap-
pro.vimating SI billion in assets. Even apart from forced sale, I can
think of no case in Mhich a single owner voluntarily parted with values
of this magnitude. As a du-ector of tlic company, I considered this an
extremely harsh settlement, ani\-ed at after jnotracted and diflicult
negotiations between repre.^entatives of Justice and ITT.
If I may, sir, for the record, I would like to place the dates of my
meetings ^nth Mr. Kleindien.st.
The first one took place on April 20, 1971, where I gave orally son^e
of the policy considerations we thought relevant. !\[r. Klcindieiist
stated that since the Attoniey General had disqualified himself, the
ultimate decision with respect to any litigation v\ould necessarily
be his. He said too ho would make that decision based on Mr. Mc-
Laren's Antitrust Division recommendations, and told me any
presentation should be made to Mr. McLaren and the Antitrust
Division.
The ne.\.t meeting took place on April 29.
This was followed by the meeting of May 10.
The next meeting was June 29.
The last meeting was July 15.
Thank 3^ou, Mr. Chairman.
The C'H.iinMAN. Jud|;e McLaren, you say you M-ere solelj' responsiblt-
for tliis settlement, witi your stafi?
Mr. McLakex. I'm sorry. I couldn't hear the last sentence.
The Chaikman. Did I understand you to say that, j-ou were, you
and 3'our staff were solely responsible for this settlcmejit?
Mr. McLahen. That is m}' testimony, yes, sir.
The CKAinMAN. Now, did j'ou Icnow anything about a 8400,000
contribution from ITT to the citj' of San Diego?
Mr. McLaren. Absolutely not. I knew jiothing about any of this
wliole business, or even thai the convention was going thoe until I
read about it in the newspapers whele Eomoone tried to make a
connection between an alleged payment and the sctilcment of the
case.
The Chairman. Now, did Mr. E^eindienst, Mr. MiichcU, or anyone
else attempt to in-Huence j'our decision in this settlement?
tMr. McLahex. The direct answer to your question is "No, they did
not." I would like to add this: when I v^as first interviewed by Mr.
Mitchell and Mr. Kleindienst in the Pierre Hotel in December of lOOS
with regard to coming down here, I had an understanding wAxh them
(22)
lA. mCHAED m LAEEN TESTIMONY, MARCH 2,' 1972, 2 KCH 116-17
117
wlicii llioy oAViCil me tlio Job. I made, tlneo coiu'.itioiis: that wc wouliT^
Ji:i\o I) vifrorous aiilitrusL program; tluit ue would follow my beliefs
wiih ivgnrd to what the Suprome Court cases said or. fougionierato
nier-rors, nud llic icstnicturinfr of the iitdiisiry that I though;, was
coimi'.p: about ia an ahnost iillotic way; and third, tliat we would
tlocidr I'll matters oa fho merits, there would bo no political decision.
Tiio CuvuiMAN. Now, is that correct in this case? _
Mr. Mf;L.\uEX. That is correct in tiiis case, ub.sohitely. I might
add timt the Attorney Generftl and Mr. Kleindienst lived up to their
commit tiu'iit.
Tiio Cjiaikm.^x. Senator Ervin.
Seuaior ICuvrN. i^Vs I construe your tcsti-monj', Judjrc McLaren,
Mr. Klciudienst did not activel}' participate in the ncgotiatiou of th&
settlcuiouL at all?
Mr. McL.vuF.N. All Mr. Klciudienst did was arrange that ono
meeting, as -far as I am concerned. And during the course of that
mce:iu;.r, when ITT mados its ijrcscntation, I was the chaii-raau of the
meeting. Mr. ICleindienst sat off on my left, and listened, so far as I
recall, and, well, none of us had much to say, but ho did not do rcally
any thing in M\y stage of the negotiations except arrange for that one
mretir.g and approve in}- proposal for settling the thing after I became,
convinced that the 2.50-odd-thou3aad shareholders of ITT would
suffer more than a SI billion loss if we proceeded and were successful
1 forcing divestiture of Murtford.
- Senator Epvin. Did he make any suggestion to you as to what the
details of the negotiations should be, or what the details of the
settlement should be?
Mr. McLaiiex. He did not, and I did not even keep him informed
as to what- we were doii!g in the negotiations until — I think he is.
probably right — I telephoned him the night before we actuall}- put the
thing out and said I think that they are going to cave in on the last,
couple of j)oints and we will probably announce it tomoiTow.
The Chaip.man. And that was the course you usually followed to
keep him advised of matters in 3'our department?
Mr. McTiAKEN. Matters of major importance, yes, sir.
Senator Ervin. I luiderstand from the testimony that has been given,
that Attorne3' General Mitchell absolutely disqualified himself from
an^' connection with these suits and proposed suits, and wiih the nego-
tiations on the settlement, on the grounds that his firm at one time had
represented ono of the affiliates of ITT?
Mr. McLaren. Yes, sir, that is correct.
Senator Ekvin. In other words, 3-our testimony is that you aud
ihe members of the Antitrust DiNision staff conducted the investiga--
tions, aud that the decision of the Government was based solely on the-
opinions wfiich j'ou and th.e members of your staff in the ..-Antitrust
Division had after considering all of the matters involved, and all of the-
impiications of those matters?
Air. McLaren. That is right, sir.
Senator Ervin. Now, Judge, I practiced law a long time, and I have-
participated in compromises in man^' cases, never one of any great
magnitude, but my experience is that when people settle litigation they
do so for approximately the same reason that Hamlet stated in his
soliloquy: they aie uncertain as to what the courts are going to
(23)
IB. EICHABD KLEINDIENST TESTIMONY^ APRIL 27^ 1972^ 2 KCH 1725
Richard G. Kleindienst testimony
1725
untl i'lr: anyi)Ovly clsi» in my Uopiutniciit wlio lias boon lunc. even
tiioU;;'! wo ini'^ht ii;ive nijidt" nii-^liilcfs ol' jiulirinonf, lip.ve not been
jjuiiiy !)i' any iiiiMioiK-r or illctrii! coiulnct, mul ns 1 luuo had to aslc
iny.-C'ir rii-.ny a time, Sriislor -Mutliias, siiicp ihal fateful ilny tliat
1 first ai)i>e:ued, siioiiUl [ have ilonc Avlinl I did, 1 \vill say to 3011 aad
to tho i!i-.'!ul>crs of tlio Ui^. Sci:aie lliat luul I to do it oxer a^iaia.
knoui'.if; tliKi the.^e la.^t 2]- monflis would have tians])irefi, 1 \\OMld
liave come before you ua-Jt«i- the same cinuuisiances and said, "'Take
ft look at our conduct ami let's have thii; hearinj^," :uul I hove no
rejrreis :ibout it one w ay or another.
i>enator M.vtjiIas. Mr. Kleindien>t, as 30U know, we are sifting
throiij:!i this record with a ver^- fine comb; and so that v.e don't
leave the record inco:ni>leiii, I would like to call your attention to one
other siuteiiient that I think you inijrht v, ant to conmient on. T suspect
that the answer you have just given, which T think is a very full
answer, maj' apply to this, but just .so that the record is complete,
whi;-.!< is, I think, for your bci\cfit as well as for the benefit of the
connnittce, let mo read tliLs paracra])h to 3'ou which ap])ears ou paee
100:
Thar is, in siibstaace and in effect, tin: relationship that I had with I.T. A T.
aad the L)fi>aiti>ieiil of Jiiiti<re in coimectinn with the antitrust, matter of that
corporutioti h.r.'oro our Dci>ar£;iK-nt. I h.id no di-ciis<ijns with any otlicr ofiicor or
uuorri'-y or agent on bfh.ilf of I.T. & T. I had no discussions with rnybody on
Mr. MfLarca's staff anil tlie ottier pcrsun.^. Tlie only |)or.<on with wlio:n 1 ever
di~cu-.Hil th« matter within the Dirparf.i'.oat wu< Judgo McLaren, the person
nu-^'*^ th'.' reconunr-ndatioti and h;mdliiig the situation.
- Av, again. I draw j'oitr atteution to that v.itli the thought in miud
that what is iini>ortant, really, to the committee is what got through
you, ihc messages that got throngli to you, and the casual, the
-i'cidoMtal, things which occur in everyone's life sometimes make an
impact and sometimes don't.
\Vould you still stick with the gist of that statement, with the
opijortunity that you have had for reflection in the meantime?
Mr. IvLEi-NniEXST. Well, without being subject to the accusation
that 1 am — 1 don't want to thi-ow in the w hole kitchen sink — the onl^^
thing that got to me, really, was Judge McLaren. I think the jud^e"
indicated in his testimony, and I remember so vividly, when ■NJu*.
Mitchell and I interWevred liim it\ the Pierre Hotel in New York
before his appointment and before the inauguration of the President,
when we had narrowed the selection of an Assistant Attorney General
for Antitrust down to three people, knowing his background, he said:
"I want to tell you one thing. I believe in vigorous enforcement and I
want a commitment from the both of 3'ou that I will not be interfered
with v.itli respect to that enforcement."
He did believe in vigorous enforcement, with courage and with
honesty and with great ability; he was not interfered with and I took
my guidance in antitrust cases from Judge McLaren. I am a lawyer
from I'iioeniv, Ariz. I never had an antitrust case in my life. He
s%;niuoli7,es the highest kind of Ia\v-yer from the pzivate sector who is
willing to leave a verv lucrative practice and come into the Govern-
ment and give the people the benefit of his art and his e.xperience. The
oulv tldiig that got throu«jh to me was Judge McLaren.
Kelix Rohatyn, whom I have come to regard with a very high
degree of regard, made a very persuasive presentation to me but all
(24)
2. In 196S, Mr. Nixon appointed a Task Force on Productivity
and Competition to review antitrust policy and make recommendations.
The task force, headed by Professor George Stigler of the University
of Chicago, presented its report to President Nixon on February 18,
1969 and recommended against immediate legal action re: conglomerate
mergers. .
2a The Stigler Report, 115 Cong. Rec. 15653, 15656(1969)- 26
2b White House "White Paper," The ITT'Antl-Trust Decision.
Januarys, 1974, 2 31
2c Remarks of Harold S, Geneen, ITT Chairman and President.
June 26, 1969, Annual Meeting of ITT Shareholders. 8 33
(25)
2A. THE STIGLER REPORT, JUNE 12^ 1969, 125 CONGRESSIONAL RECORD 15663'57
Jtoie 12, 1069
CONGRESSIONAL RECORD — SENATE
15653
^om Antitnist and Trade Regulation
Rf-port, June 10. 19'39|
Text or report or Nixon Task Force on
PBODaCTIVrTT AND COMPETITION
SCMMAST or aECOMMEN0ATlON3 OF THE TASK
FORCE OS pnoDUCTivrrT A^^) comphtition
We present bere a summary of the recom-
mc-adatlons of the Task Force on Productiv-
ity and Competition. These recommendatloaa
are elaborated and defended In the accom-
p^ziylng Report.
1. We recommend that the President Issue
a Seneral poUcy statement (a) establishing
the Antitrust Division as the eflectlve agent
of tbe Administration In behair of a policy of
competition within the councils of the Ad-
niinUtraUon and before the Independent
r*swlfttory commissions; (b) urging those
commissions to enlarge the role of competi-
tion In their industries; (c) marshaling pub-
lic support for the policy of competition.
J. We urge the commissions to permit free
eatry in tlie industries under regulation and
to ^>andon minimum rate controls, when-
ever these steps are possible — and we thinJc
tlMT usually are; and we urge the President.
wbm occasion permits, to appoint at least
one econom^lst to membership in each of the
major commlsslona. and Institute effective
p^Kedures for the review of the performance
of the commissions.
3L To enhance the effectiveness of the Anti-
trcst Division, we urge the Attorney General
and the A^lstant Attorney General in Charge
ot Antitrust to insist that every antitrust
salt malce good economic sense, and to instl-
ttrte seml-publlc conferences to assist In the
formulation and frequent reevaluatlon of en-
for-<»ment guldelinea.
\Ve recommend that the Department of
Jb^^ce establish close liaison ulth the Fed-
eral Trade Commission at the highest levels,
witfti a view toward fostering a harmonioua
jOey of business regulation.
5l, We recommend that the Department
bring a series of' strategic cases against re-
gtoBAl prlce-flxlng conspiracies, which we be-
lle»e to be numeroua and economically Im-
portant.
6L We cannot endorse, on the basis of pres-
ent knowledge of the effects of oligopoly on
cooapetitlon. proposals whether by new legis-
lation or new Interpretations of existing law
to deconcentrate highly concentrated Indus-
tries by dissolving their leading firms. But
we urge the Department to maintain unre-
mJtttng scrutiny of highly oligopolistic in-
dostrles and to proceed under section 1 of
the Sherman Act — which In our Judgment
reaches ail Important forms of collusion — In
Instances where pricing Is found after careful
Investigation to be substantially noncompet-
lUve.
t. The Department of Justice Merger
Guidelines are extraordinary stringent, and
In some respects Indefensible. We suggest a
nomber of revisions In the accompanying
Report.
A^ 8- We strongly recommend that the De-
I partment decline to undertalce a program of
I actlou against conglomerate mergers and
■ conglomerate enterprises, pending a con-
ference to gather Information and opinion
on the economic effects of the conglomerate
phenomenon. More broadly, we urge the De-
partment to resist the natural temptation
Lto utilize the antitrust laws to combat social
proSjlems not related to the competitive func-
tioning of markets.
"" We recommend new legislation to In-
' \e the monetary penalties, at present
l>*»-^ly nominal, for price fixing.
lO. We ur^e a new policy for antltr.i3t de-
■reea. The Department should not seek the
.tttry of regulatory decrees: oecrees that eu-
vlzkage a continuing relationship with the
defendant. Save in exceptional circum-
stances, all decrees should contain a near
termination date, ordinarily no more than
10 years irom the date of entry. And the
Department should undertake a review of
existing decrees to determine which should
be vacated as obsolete or Inappropriate.
11. The Expediting and Webb-Pomerene
Acts should be repealed, and the Robinson-
Patman Act substantially revised.
12. Mr. Alexander L. Stott dissents from
certain parts of the Report and from certam
of the above recommendations. Mr. Raymond
H. Mulford dissents from two recommenda-
tions.
BEPOar OF THE TASK FORCE ON PRODCCTIVITT
AND COMPETmON
The Task Force on Productivity and Com-
petition submits its report on the problems
which win be confronted by the new admin-
istraiion in this area, and the steps which
we recommend to be taken. The report is
presented under three general headings:
I. The Administration's policy of Competi-
tion and the Role of the Antitrust Division
and the Regulatory Commissions In This
PoUcy.
II. Organization and Procedure In the An-
titrust Division.
m. Recommendations for Change in An-
titrust Policy.
Individual task force members would often
change the emphasis of the Report, and
larger differences are presented as dissents.
/. General policy
A. Antitrust Policy
The American Way, as we are constantly
told. Is to rely upon competitive private en-
terprise to do most of the work of allocating
resources to Industries and firms, organizing
production, and providing economic progress.
We are constantly travelling a shorter dis-
tance down this Way, however: for good rea-
sons and for bad we have almost continuously
expanded the governmen tal controls over
economic life, and in recent years Important
restrictions have been placed upon private
enterprise to protect the balance of pay-
menta. Some of the vast arsenal of public
controls ere unnecessary, and a largo pro-
portion of the necessary controls are exces-
sively restrictive of competition. As one ex-
ample, the safety of financial institutions is
of course a major public concern, but this
safety can oftep be achieved by insurance or
similar devices, and hardly ever requires that
competition be suppressed to the extent that
the most incompetently managed institution
will be prosperoiu. and hence safe.
The traditional American policy of seeking
to minimize regulation of economic life is
a profoundly wise policy, and deserves to be
reasserted and implemeated. Both logic and
political expediency— not alTrays close al-
lies— dictate that economic freedom be sub-
jected to the discipline of competitive mar-
kets. We believe, therefore, that the Presi-
dent should Issue a general policy statement
on competition and public regulation, to
achieve at least three Important purposes:
1. To establish the Antitrust Division as
the effective agent of the Administration in
behalf of a policy of competition, in intra-
governmental groups, and before Independ-
ent regulatory bodies.
2. To encourage and urge the regulatory
bodies — which cannot ignore the clear policy
positions of the President even when his ap-
pointive power Is dormant — to enlarge the
role of competition in their respective
industries.
3. To revive and strengthen public support
for the policy of competition, and to establish
the bona fides of the AcLm'.aiotratlon as the
protector of botn. consumer and businessrr.an.
An executive order or a major presidential
address would be an appropriate vehicle for
this declaration. Whether or not a formal
statement commends Itself, we believe that
the correct policy is one of persistent and re-
sourceful exploitation of competition wher-
ever possible.
B. The Policy of Competition In the Regu-
lated Industries
Our mandate to examine productivity and
competition in the American economy com-
pels us to brief examination of the work of
the regxilatory commissions themselves. The
regulated industries comprise one-eighth or
more of the economy In terms of Income, and
are too important to be omitted from our
Report.
The tasks assigned to the regulatory agen-
cies are various: to prevent monopoly pric-
ing <a3 with telephone and pipelines); to
prevent congestion (as with radio and tele-
vision frequencies) ; to provide safety to
savers (as with financial Institutions) ; and so
on. It Is not possible for us here to examine
these purposes critically, although It Is no-
torious that in certain Industries (such as
motor trucking) there Is no respectable case
for economic regulation. There is widespread
disenchantment with regulatory purposes as
well as regtilatory processes, and a general
belief that excessive rigidity, expensive re-
view of economically trivial details, and fre-
quent failure to achieve any Important re-
sults have characterized our regulatory
efforts.
In two directions, we are convinced, there
should be a major reorientation of the regu-
latory policy:
1. Entry of new firms should be encouraged
wherever an absolute contradiction with reg-
ulatory goals is not Involved. At present the
practice Is universally the opposite: to pro-
hibit or ration with utmost severity the
entrance of new firms.
2. Allow much freedom in price competi-
tion. The regulatory bodies should abandon
TniniTnuTJi rate regulation whenever pos-
sible (and it Is usually possible), and reiy
chiefly on maximum rate regulation.
Where rates are regulated, it is essential to
make botK changes: there is little merit in
allowing additional firms to enter if they
are not held to the test of unfettered com-
petition with the existing firms.
We urge the Administration to pursue
three complementary paths of reform In the
regulated Industries:
First, the commissions should have the
merits of competition pressed upon them.
■ Competition is not a matter of all or none,
and the fact of regulation sho\ild not exclude
competition as a force at each of a hundred
points where It Is relevant and feasible. If
there must be only one railroad there can
stlU be several truckers, several freight for-
warders, and the possibility of Inter-modal
competition.
Second, the primary method of giving a
larger role to competition Is by appointing
commissioners who understand and believe
In a policy of competition. We believe ttust
every Tegulatory body should have at least
one economist as a commissioner. Quite aside
from the implementation of the desire for
more competition, this proposal has a de-
cisive defense: economic regulation poses
more economic than legal problems, and an
economist knows more about economics than
a non- economist. The economic triviality and_
Irrelevance of much activity of the regula-
tory commissions is patent and Ine.xcusablc.
Third, the regulatory commissions are
largely out of public control. Once in a
decade or two. at most, a commission will
be Investigated by Congress. The Administra-
tion should explore methods of getting more
meanin°ful and effectir? reviews than wn
now (^eD, V.'e do not. Anu.^' Wiicc^.-r u.t ■:.f-ji
r:ethod u .in enUr^jd IW-r-wi ol thj 3';;Sr?'.
section, a national conitTii.=;j:o.i, tlie creation
of academic review committees, or a special
adviser to the President. The best method,
however. Is surely not Infrequent, partisan
Congressional review. The present rule of the
(26)
2A.
15654
THE STIGLER REPORT, JUNE 12, 1969, US CONGRESSIONAL RECORD 15653^7
CONGRESSIONAL RECORD — SENATE June 12, 1969
ia'.ory bodies Is undirected, unmeasured.
--'unevalunced.
/. Organization and procedure in the on(»-
trust division
A. The Uttliffltlon of Economic Knowledge
We anticipate little opposition to tbe prop-
csiiion ih.1t the Antitrust Division make
full and crTectlve use of economists and their
speciol skills. These skills are often necessary
to understand the effects of economic prac-
tices (nn example Is market-sharing In fixed
proportions! . to assess the economic Im-
portance of Individual cases, and to assist In
devising remedies that x^lll not shatter on
economic realities. We endorse the policy of
having a highly professional economist serv-
li-.g ns r.dvlser to the head of the Division,
and a stron'.^ permanent staff of economists.
The problem Is not the goal of an
economically sophisticated antitrust policy,
but Its Implementation. A division charged
with the enforcement of a statute must of
course be directed and largely staffed, by
lawj'ers. Unless there are substantial Incen-
tives to the staff to utilize economics—
whether by central direction, or vastly more
powerfully, by demonstrated assistance In
■winning cases — the non-lawyer will often be
viewed by the law>-ers as a mysteriously neces-
sary obstacle to smooth operations. The As-
sistant Attorney General will have succeeded
in making a truly major contribution to anti-
trust policy If he establishes the relevance of
economic knowledge.
B. The Development of Criteria for Classes
of Cases (Guidelines)
"When the Antitrust Division Is con-
fronted by a large number of similar cases —
ar ^ 't must now be scannlne: many hundreds
c . Irgers each year — It will inevitably have
'■v — •to guide the numerous men who pasa
1 Individual cases. The question is not
..hether to have criteria or guidelines, but
how to arrive at them.
We believe, for reasons we discuss below,
that the present merger guidelines are ques-
tionable in Important respects. Here we con-
sider the procedures for formulating guld»>
lines.
A set of rules for a class of cases will be
desirable only If two conditions are fulfilled:
1. There are a largo number of uncon-
troverslal, easily Identified cases. If there ar»
not. the rules give little help to either bxisl-
ness or the Division.
2. Controversial or objectionable cases can-
not be repackaged to avoid scrutiny.
The way to determine whether mergers, for
example, meet these conditions Is to
examine a large number of them in the light
of legal and economic knowledge. The Anti-
trust Division will perform this task vastly
better if It uses the large amount of pro-
fessional expertise available outside the Divi-
sion. We therefore recommend that the Di-
vision have seml-publlc conferences to ex-
plore difficult areas of policy. Inviting legal
and economic e.Tperts to propose or discuss
guidelines. Some members of the task force
would prefer to have formal notice and pub-
lic hearings In establishing rules. If rules are
adopted, a periodic review of them by the
same procedure will be a useful method of
conferring flexibility upon them. A specific
application of this method Is proposed below
for niergers.
C. The Role of the Federal Trade Commission
No review of antitrust policy would bo com-
pl"*" that Ignored the Federal Trade Com-
er m. which Is charged with enforcement
'V_^ong other statutes, the Clayton Act,
"Ahich Section 2. the Robtnson-Patman
.nen<;nr'.ent. and Section 7. prohibltln* merg-
ers and acquisitions that may substantially
lessen competition, are particularly impor-
tant; and the Federal Trade Commission Act,
whose operative provision. Section 5. forbids
''unfair or deceptive acts or practices", a terra
that has been interpreted to embrace even
more than the vast area of anticompetitive
behavior proscribed by the Sherman Clayton
Acts, OS well as consumer fraud and some
"immoral" sales methods such as lotteries.
As Is evident, the Commission's jurisdiction
largely overlaps that of the Antitrust Divi-
sion.
In Its antitrust work, the PTC has concen-
trated on price discrimination, on practices
believed, to oppress or coerce small dealers,
and on mergers, especially vertical and con-
glomerate, und usually m industries which by
long-established understanding with the An-
titrust Division have been assigned as the
Commission's sphere of primary competence.
Unhappily, httie thac the Commission un-
dertakes In the antitrust area can be de-
fended in terms of the objective of maintain-
ing and strengthening a competitive econ-
omy. Consider price discrimination. There Is
now an Impressive body of literature argu-
ing the improbability that a profit-maxj-
mizing seller, even one with monopoly power.
would or could use below cost selling to
monopolize additional markets. Yet. not only
has the Commission continued to bring pred-
atory price discrimination cases, but the al-
leged danger of predatory prlcifig remains
a principal prop of its vertical and conglomer-
ate antimerger cases. As for "secondary line"
discrimination (that Is. giving discounts to
some dealers or dlstribvtors but not to others
who compete with them), the Commission
has never atte^mpted to differentiate those
cases ( If there are any ) In which a monopolis-
tic buyer Is able to extract unjusufied price
concessions from his suppliers to the preju-
dice of his competitors from those in which
discrimination is employed by oligopolistic
sellers who wish to cut prices secretly, — and
should be encouraged to do so— and those In
which price di^eTcncea (which the Commis-
sion tends to equate, erroneously, with dis-
criminations) are not, in fact, discrimina-
tory. Over the last eight years the Commis-
sion, often under the prodding of reviewing
courts, has pulled some of the sting from
enforcement of the Robinson-Patman against
secondary-Une discrimination. It has de-
manded, somewhat stronger proof of com-
petitive Injury; the meeting-competition and
cost- justification defenses have been ren-
dered meaningful; and the provisions of the
Act relating to advertising allowances and
brokerage payments are. In general, no longer
\ised, to compel sellers to compensate for
services that are not economically beneficial
to the seller (such as advertising by tiny
retail outlets or brokerage when a broker's
services can be dispensed with) . Although the
retreat from per se rules against secondary-
Une discrimination has led to a general dim-
inution of enforcement activity by the FTC
(private suits continue, of course, and are
discussed later) the Commission still brings
many cases that Impair, rather than promote,
competition and efficiency. For example, the
Commission has In recent years waged vigor-
ous war against "functional discounts", which
are discounts offered to middlemen who per-
form certain distributive functions (such as
warehousing) that other middlemen, who are
not given the discounts, do not perform.
Moreover, as explained later In this Report,
we can conceive of no case of discrimination
In which the Sherman Act would not pro-
vide an adequate remedy — adequate, that Is.
to protect the interest In maintaining an
effectively competitive economy — and so we
view Roblnson-Patman enforcement as in-
herently likely to be pxished beyond proper
limits.
The efforts of the Commission to protect
small dealers from allegedly unf.iir and co-
ercive business practices constitute a darJt
chapter in the Commission's history. Much of
this enforcement activity does not eventuate
in formal proceedings. What happens is that
a dealer who Is terminated for whatever
reason. Is likely to complain to the Commis-
sion, knowing that the relevant Commission
staff Is well disposed toward "small busi-
ness *. The staff uses the threat of an FTC
proceeding to get the supplier to relr.state
the dealer, and If threats fall — usually th*v
succeed the FTC may file a complaint cnarg'-
ing the supplier with having cut off the
dealer because be was a price cutter, or Tor
some other nefarious reason. Our impression.
In sum. Is that the Coaimlssion, especially at
the informal level, has evolved an ciTec-.ir^
law or dealer protection that Is unrelated
and citen contrary to the objectives of the
antitrust laws. The Commission Is supported
In this endeavor by the Supreme Court's
rulings that Section 5 of the FTC Act em-
powers the Coram.ission to suppress practices
that resemble antitrust violations.
With respect to the Commission's enforce-
ment policy In the merger field, it is tllur^i-
natlng to compare the recent statements ol
Commission merger policy with the Depart-
ment of Justice ^!e^ger Guidelines, discussed
elsewhere in this Report. The Commission is
even more severe. Unlike the Department, it
attaches a good deal of significance to the
absolute size (Independent of market fhare)
of merging firms: to the alleged power th^t
large firms have over small; and to the-
dangers of "price squeezes".
It will, for example, challenge vlrtiially an^
acquisition by a cement producer of a ready-
mix concrete company, virtually any sub-
stantial acquisition by a large food chain,
etc. The Merger Guidelines are models of
restraint compared to those promulgated by?
the Commission, which are as hard on eco-
nomic theory as on mergers.
We conclude that substantial retrenchment
by the Commission In the antitrust field Is-
highly desirable. In addition to retrench-
ment (at least by stopping the Increase of
the Commission's appropriations). Its re-
sources devoted to regxilaclng competlttoa
might be redeployed. The two principal pos-
sibilities are (1) consumer protection, and
(2) economic studies utilizing the very bread
fact-gathering powers vested in the Com-
mission by its enabling legislation. UnhacK
pily. either route could tje followed in a
way that endangered competition. An In--
competent economic study can be Influential
on policy makers — witness the Infiuenual
1948 FTC study which erroneously suggested
that concentration was on the rise in AmerU
can industry. Overzealous enforcement of
consumer- protection legislation can also have
errajnt results. We note that the appUcaUon
of consumer-protection law Is almost always,
invoked not by consumers but by competi--
tors, whose Interest lies In protecting their
maxket. not In giving consumers full Infor-
mation; and that elaborate requirements le-
lacing to packaging, safety, etc can curtail
cotLsumer choice, limit competition, reduce
the consumer's incentive to exercise care,
and — what Is most serious — Impose substan-
tial costs on society.
The Federal Trade Commission urgently
needs a basic reform, but this need will be
difficult to fulfill. Quite apart from the fact^
that there are no vacancies on the Com-
mission, any dramatic or far-reaching Presl-
denttally-lnsplred reforms would run up
against the long tradition of regarding the
Independent agencies In general — and the-
FTC In particular — as "'arms of the Con-
gress." That has at times meant an office cf
economic opportunity for Congressmen; more
Important, it means that a s^ong showing
of Presidential inferest In the oper.-itlons of
the Commission will not be welcome on the
HUl.
Perhaps the best short-run path of Im-
provcrr-?nt runs through the offices of thr
Alicvr.oy Generr.l r.iid :i;t .-^.-jistant .■\t. -,.'.:;:■
Genjrf.l in chnrg* of Antitrust. Since tr:;
jur:5Cffc:lons of the Commission and cf t^:?
Antitrust Division are so l.orgsly over!appin».
no one could object to the establishment be-
tween the Commission and the Dlvlston of
close liaison at the highest levels. Indeed, it
Is something of a wonder (though e^tplicable
In terms of bureaucratic rivalry) that such ^7
(27)
Ji'iie 12,
2A. THE STIGLER REPORT, JUNE 12, 1969, 115 CONGRESSIONAL RECORD 1S653-&7
19 69 CONGRESSIONAL RECORD — SENATE 15655
^-S .:>s been wholly lacking heretofore;
■iSfi coordination bet'.veen the agencies is
.erv low levels, and consists largely of
hi'-'lln" over who shall sue l:i cases where
bom agencies ore interested. Especially at the
b'*"'lnnin*' of a new Administration. *t should
be°q'ilte feasible, .is well as wholly approprl-
-c 'or the Attorney General and .\sslstant
At'o.ney C-eneral to establish a close cooper-
-.live r'-lJf ons(ilp with the Chairman of the
Commission. We think it liiely that the Com-
n^tisi'jn will pay some heed to the Depart-
rncnt's views. If forcefully expressed, on antl-
:r;:Jt and trade-regulation policy.
;//. RECommendcd changes in antitrvst
policies
The general policies of the Antitrust Divi-
sion arc profoundly good, and we propose no
tr.ajor change in its emphasis or dlrecxlcns of
coUcy. In fact, the main thrust of the fol-
lowing recommendations Is that certain re-
cent developments of policy or doctrine
should cot be allowed to divert the agency
from its basic task of striking down conspira-
cies and mergers in restraint of trade.
A. Price Fixing
The price-fixing cases of the Antitrust Divi-
sion are its bread and butter, and under-
srandably Its sta3 woyld prefer more cake.
V.'e emphasi::e the great economic and social
Importance of continued, vigilant, aggressive
seeklr.g-out and conviction of conventional
priie-fi.\ers. Every victory weakens the eiH-
ciency or undetected collusion in that area of
economic life. \Ve strongly recommend the
briilLTln:; of a series of strategic cases against
regional conspiracies, which we believe to be
numerous and economically important.
-B. Concentr.atlon and Oligopoly
O' ply — the industry composed of a
I. — ^amber of Independent enterprises —
oubtedly presents the most difficttlt nrob-
Itins m a policy for competition. The dlfflctil-
tles arise because of a combination of three
circumstances. The first Is factimt: there are
many Important industries tn our economy
whose structure Is oligopolistic — how larse a
number depends upon what a "small number
of flrms" means- The second Is interpretrtx:
the economists have not succeede<l In fully
IdentUying the characteristics of an Industry
whl.rh determine whether It will behave com-
petitively or monopollstically. The third is
the matter of action : if firms In an oUgoplls-
tlc Industry are convicted of coUusive behav-
ior, must one press for a remedy so radical
as dissolution in order to stop future repeti-
tions of the o.Tense? (And should the stand-
ards of permissible concentration be wboUy
dl:Terpnt for pending mergers than for estab-
ll-'shed enterprises?)
The circumstances which determine -wheth-
er or not the arms In an oligopolistic indiM-
try w.U usually behave more or less com-
petitively (seeking by Independent actions
to Improve their Individual profits at the
cn-c of rivals- profits, with the eventual gen-
knnwn"''''" °' "^"^""1 profits) are partly
I. The easier (quicker and cheaper) new
firms can enter the Industry, the smaller and
more short lived wiU be the monopolistic
rcstncuona.
^ 2- T^e more elastic the demand for the
,-^ lie- cf 'ho oligopolistic Industry the less
-.y ."-:i:c! 'rom rc^trlcUons oJ output below
...J. r.-r.p^t!:;ve level, and hence the less the
.7-r •:75',"*'*-^ ^ •''^^ coUusively. This In turn
. ^ .1 depends upon what alternative prod-
f ■^- buyers may turn to.
- c 5.»rjer the effective number of flrms
--_ ..■?!^-,""^^'''^'^" ^^ coIliisiTe be-
*.«- ■■'••■^^•■■n Increases in e.toense (in-
- ..I.n7 rrcb.nh:isrv cf detection/ 3s num-
:'■.„' ■■.•"'^•'~'*- ^^"^'ever. a given number of
■ ^': ' ^^"^•'^ "-*^"'' "^ "suit In collusion.
-■i-;;";?r°"'l"''^*^ ^ production \n the
;-H .\ l'^' ^-"^ ^^ "^^ "'"■ect for this
.^..d .xy.c the ecec'.ive number of rivals to be
the number of rlvnls of equal size which
would produce the same competitive situa-
tion as the firms (not of equal size) actually
In the Industry, the effective number may
be very roughly estimated at twice the num-
ber there would be If all Srms were as large
as the largest In the Industry.
That is. if the largest firm has 1,3 of the
Industry's output and the remaining firms
fail off In size regularly, the effective num-
ber of firms Is of the order of magnitude of
10. By this Is meant that the concentration
in the industry is equivalent to what would
exist if there were 10 firms of equal size.
There are other Induences which probably
but less certainly nflect the probability of
competitive behavior. One of these Is the
size of buyers: larger buyers, for a variety
of reasons including possibility of backward
integration, make for more competitive
prices.
Numerous statistical studies have been
made of the relationship between concentra-
tion and rates of return on investment, and
these studies generally yield positive but
loose relationships: concentration is not a
major determinant of dlfierences among In-
dustries In profitability, although "It may
sometimes be a significant factor. It appears
also to be true that somewhere between
five and ten effective rivals (I e., largest firm
with a 8hare of V3 to Vi) pre usually enough
to insure substantial elimination of the In-
fluence of concentration upon profitability.
Concern with oligopoly has led to proposals
to use the antitrust laws (perhaps amended)
to deconcentrate highly oligopolistic indus-
tries by dissolving their leading firms. We
cannot endorse these proposals on the basis
oi existing knowledge. As indicated, the cor-
relation between concentration and profita-
bility is weak, and many factors besides the
number of firms in a market appear to be
relevant to the competitiveness of their be-
havior. While a flat condemnation of oligop-
oly thus seems to U3 unwise, we commend
to the Antitrust Division a policy of strict
and unremitting scrutiny of the highly oli-
gopolistic industries. If, in any of these indus-
tries, pricing is found after careful Investi-
gation to be substantially noncompetitive,
the Division will have a clear basis for
proceeding against the leading firms under
Section 1. Collusion that c^n be Incontro-
vertibly Inferred from, behavior (such as per-
sistent, stable price discrimination in the
economist's sense) should not bring Im-
munity from the Sherman Act. and we are
confident that structural remedies will be
sanctioned by the courts In cases where, due
to number of firms and the other conditions
of the market, lesser remedies are likely to
be unavailing. In assessing the gain from
such structural remedies, account should bo
taken of any reduction In efQcIency which,
the remedy entails.
The concern with oligopoly is also quite
visible In the Department of Justice's most
recent Innovation, the Merger Guidelines, to
which we now tum.
C. Mergers and the Guidelines
The present merger Guidelines Impose
stringent restrictions upon the relative sizes
permitted to companies which desire to
merge. The impact of these percentages Is
reinforced by a definition of the market
(within which shares of companies are reck-
oned) so loose and unprofessional as to be
positively embarrassing. We propose to re-
verse this emphasis: not to tell companies
which mergers are forbidden, but which
mergers are permitted. We are persuaded that
this orientation better serves the interests
of boih business and the An-itrjst Division.
Before we turn to the methods by which
more appropriate Guidelines for mergers are
achievable, we shall briefly discuss the pres-
ent Guidelines, and Indicate our reasons for
dissatisfaction with them in. their present
orientation.
Marr.ct Definition, The delineation of a
relevant market within which to appraise
the lawfulness 01" a merger is crucial, for if
the market 13 drawn naxrowly enough, vir-
tually any merger can be made to seem
monopolistic In its eflecta. Unfortunately, as
they are presently drafted the Guidelinea
seem to Invite a substantial degree of mar-
ket gerrymandering, especially In delineating
regional or local markets. The Guideiiaei"
test of whether a product Is sold in less than
a national market is loose. Any group of com-
peting sellers In the industry Is a relevant
market, unless the defendant can show that
there is no 'economic barrier" preventing
other sellers from selling In the particular
area. Such a barrier may consist of freight
codts, customer inconvenience, customer
preference for the brands presently sold la.
the area, or the absence of good distribution
facilities.
This Is a misleading test. An Industry may
be riddled with the kind of "barriers" cited
in the Guidelines and yet still not contain
any meaningful local markets. An example
will illustrate. Assume that the price of steel
bars Is 52 in Minnesota and $1.60 In Chicago,
and the cost of shipping the bars from Chi-
cago to Minnesota is -il cents. On these facts,
it Is plain that the Minnesota sellers could
not raise their price significantly without im-
mediately losing their business to the Chi-
cago sellers. Minnesota is thus not a mean-
ingful local market even though, at the e.^ist-
Ing price, freight costs do impose an eilective
economic barrier against the Minnesota
sellers. Moreover, additional firms will es-
tablish production or distribution facilities
in Minnesota if It becomes profitable to do
so. The same analysis can be extended to the
other barriers discussed la the Guidelines.
In criticizing the test of "economic bar-
rier", we do not mean to deny the difficulty of
devising rules of market definition that w-ui
be at the same lime simple and sensible. This
is most probably not an area In which Guide-
lines provide a useful enforcement tool, if
there are to be Guidelines, though, they
should at least not misstate the applicable
economic theory. It would, accordingly, be a
decided improvement if the GuldeUnes were
revised (at a minimum) to explain that a
distant seller of a product must be included
In the local naarket if a modest price Increase
in the local area — a price Increase unrelawd
to his costs — would brlns; him in forthwlih.
Horizontal iWergera. The provisions of the
Guidelines governing horizontal mergers —
that Is, mergers between direct competlMirs—
are extraordinarily strict. If a market Is
"highly concentrated" (defined as where the
4 largest firms account for at least 75 per-
cent of the sales in the market) , then a
merger between two firms, each of which
has a 4 percent market share, will be chal-
lenged: and If the acquiring flxm has a share
as large as 15 percent, then the acquired
firm need have only a 1 percent share fcr
the merger to be challenged. Different levels
of permissible size are stated for less con-
centrated Industries, and some account is
taken of the trend of concentration.
We agree with the basic premise of the
horizontal-merger provisions of the Guide-
lines that market-share percentages are the
appropriate touchstone of illegality for such
mergers. We wotild favor levels of concen-
tration modestly lower than those now used
(but dUerently structured), with the pur-
poses of (1) allowing all mergers below the
Guldelires levels, and (2) not prohibiting,
but reviewing, those above the critical level,
with an Implied probability that the mere a
prr-pc^ed merger lies ahove the level of n'.i-
tomatlc approval, the less the probability of
Ifo acceptance. We uisciiss below the {jrcce-
dure that should be followed better 10 uti-
lize existing knowledge in fashioning the
Guidelines.
Vertical Mergers. A merger that Involves
the acquisition not of a competitor but of' a
(28)
2A.
15656
TEE STIGLER REPORT, JUNE 12, 1969, 115 CONGRESSIONAL RECORD 156S3-b?
CONGRESSIONAL RECORD — SEN ATE June 12, 1969
aier or a supplier is a vertical merger,
Ui. the present Guidelines coniain strict
,»ro visions iimiting such mergers. For ex-
f.rnple. K the supplying firm in the merger
has a 10 percent share of Its market and the
purchasing f.rm has 6 percent of the pur-
chases In that market, the merger will be
challenged.
Our :as:< force Is of one mind on the
undeslrablhty o- au extensive and vigorous
policy against vertical mergers: vertical In-
tegration has not been shown to be pre-
Ei-.mprlTely noncompetitive and the Guide-
lines err in so treating It. Within this area
o^ agreement there are two positions around
v.-hlch the taik :orce members cluster.
The one position asserts that many, and
perhaps most, vertical mergers which do not
have direct horizontal effects are innocuous,
but that In certain situations a vertical
merger will have antl-competitive effects.
These slLnallons Include: Increases In the
capltnl or other requirements for an Inte-
grated firm may reduce the possibility of
new entry; or price discrimination may be
Implemented when a monopolist Integrates
fonvard or backv,-ard. A showing that an an-
ticompetitive eSect of these sorts e.xlsts Is
essential before a vertical merger Is chal-
lenged.
The other position denies that a vertical
merger has the potentiality for economic
harm In the absence of horizontal effects.
To some of our members. It Is wholly im-
plausible that vertical integration places
entering firms nt a disadvantage. A seller
■who falls to minimize his input and distri-
bution costs win be undersold by his com-
petitors: he cannot afford to sell to or buy
from an a^.Uate If there are more efficient
"native means of supply and distribution
^^able to his competitors (and to him).
Even if the seller Is a monopolist, the desire
to maximize profits will lead him to seek
the most eeclent methods of supply and dis-
tribution, and there will be ample oppor-
tunities for nou-d;Tiliated suppliers and out-
lets to competed for his patronage. E.xcept In
the case of the monopolist who cannot dis-
criminate In price effectively without control
of his outlets, vertical Integration will be
Initiated and maintained only if and so long
as it is justified by the cost savings It per-
mits. It Is not a method of extending monop-
oly power.
The two positions coalesce on one policy
conclusion: vertical mergers should not be
forbidden bs a class.
The Cov glomerate Merger. The large con-
glomerate enterprise with an aggressive ac-
quisition policy has only recently become
jgrominent and nawsworth. • • •
f^ Antitrust law has seemed to some a con-
I venlent weapon with which to attack large
I conglomeraie mergers. If one Interprets
I •'elimination of potential competition." "rec-
IprocltT" and '-foreclosure" as threats to
competition, one can always bring and usu-
ally win a case against the merger of two
large companies, however diverse their activ-
ities may be. These are often makeweights.
The economic threat to competition from
reciprocity (reciprocal buying arrangements)
Is either small or nonexistsnt: monopoly
power in one commodity is not effectively
exploited by manipulating the price of an
(unrelated commodity. The argument ad-
vanced against the simplistic treatment of
vertical mergers— essentially that one can-
cot use the same monopoly power twice—
-:^so challenges the fears of reciprocity.
iPotentlal competition, on the contrary.
V.-<sn be a decisive limitation on the exercise
of marKo: pu'^cr. and a merger which eiiHii-
nates an l.-nmlnent new competitor Is anti-
competitive. U entry into a field is relatively
ea:;y. howerfr, there are a vast number of
potential entrants and the elimination of
one or a few has no effect. If entry Is dif-
ficult, and only a select few firms are capa-
ble of entry and on the record IScely to
enter, their Independence should be pre-
served. The Identity of potential entrants
should not be established by Introspection.
If the producer of X Is truly a likely en-
trant Into the manufacture of Y. the like-
lihood will have been revealed and con-
firmed by entrance Into Y of other pro-
ducers of X (here or abroad), or by the
entrance of the firm Into markets very simi-
lar to Y in enumerable respects,
/^ We seriously doubt that the Antitrust
I Division should embark upon an active pro-
1 gram cf challenging conglomerate enter-
I prises on the basis of nebulous fears about
size and economic power. These fears should
be either confirmed cr dissipated, and an
important contribution would be made to
this resolution by an early conference on the
subject. If there is a genuine securities mar-
ket problem, probably new legislation is nec-
essary. If there is a real political threat In
giant mergers, then the critical dimension
should be estixnated. If there Is no threat,
I the fears entertained by critics of the cou-
I glomerate enterprises should be allayed. Vig-
I orous action on the basis of our present
\k now ledge is not defensible.
The central task of the Antitrust Division
Is to preserve competition in the American
economy. ^Tbls is a splendid and challenging
task and deserves and requires the full re-
sources of the Division. We shall be much
the losers If we compromise the discharge
of this central task by burdening the Divi-
sion also with tasks such as the combatting
of organized crime or the achievement of
general political goals.
The Use of Conferences. We have proposed
that conferences be used to revise the Guide-
lines and to identify the problems. If any.
created by the large conglomerate enter-
prise. The conference will allow the Anti-
trust Division to utilize the expertise and
wide factual knowledge of economists, law-
yers, securities analysts, and other groups
without the laborious machinery of formal
hearings. We strongly recommend that be-
fore such conferences are held, leading stu-
dents and exponents of particular positions
be asked to prepare position statements
which present explicit and specific theories
and evidence. Then the conference members
will have specific questions to address and
specific views to combat or support.
D. Antitrust Sanctions
The cutting edge of law Is not the abstract
statement of a legal duty but the sanction
provided for its nonperformance, and that is
true of the antitrust laws as of other systems
of legal obligation. It is essential that those
laws clearly and accurately define and forbid
the practices that Impair competition and
efficiency but It is equally essential that the
sanction for violation be effective in coc3-
pelUng compliance and with a minimum of
undesirable side effects.
In testing the antitrust sanctions by this
standard, it will be helpful to distlngxilsQ
two purposes of sanctions: that of preventing
(or, if it has already occurred, undoing)
a specific violation; and that of deterring
violations that might not always be detected.
Sanctions of the first type — remedial sanc-
tions— suffice where there is no problem of
detection (e.g.. In the case of an Illegal
merger). But take the case of price-fi.xlng.
Price-fixing conspiracies can be, and one
suspects are, successfully concealed. A sanc-
tion that merely prevented the continuation
of the conspiracy, such as an injunction, or
one that merely restored the losses of the
Injured consumers, such as ordinary damages,
would in these circumst.inces probably bo
insuf^cient. For In deciding v/hether to com-
ply with the law, a seller would diicount the
very modest for negligible) injury to him it
his participation in a price-flj<lng conspiracy
was detected, and he was required to stop
and to pay actual damages, by the consider-
able probability that he would escape de-
tection altogether; and he couid conclude
that he had little to lose by participating.
That is why punishment by fljie or imprisou-
ment is an appropriate sanction for illegal
price-fl:;lng: it provides deterrence, as the
purely remedial sanction does not.
But the deterrent sanction in antitrust
is weak. A price fixer can be imprisoned and
fined but prison t^rms are almost never Im-
posed in pr;ce-C-\ing cases and when they
are, they are nominal In length: and the
maximum fine of S.50,000 will deter only a
very small corporation. The possibility of
a private treble-damage suit doubtless pro-
vides additional deterrent effect, but there
are serious limitations: judges are reluctant
to authorize damage awards that seriously
hurt a company, dam,ages are diiScult to
prove In price-fixing cases: and most Im-
portant, the Injury caused by a price-fiiilng
conspiracy is often so widely disused (for
example, among millions of consumers) that
no one has an incentive to bring a suit. The
government ItseU can sue for damages only
when it was the victim of the unlawful con-
spiracy.
If concealable offenses under the antitrust
la'^vs are to be effectively deterred, either the
resources devoted to the detection of such
offenses must be vastly augmented — and.
there are obvious limitations to this route — ■
or the fines miist be Increased to a point
where they will give even the large corpora-
tion considerable pause before participating
in (or condoning Its oScers* IndlTidual par-
ticipation in) an Illegal conspiracy. Precedent
for much more severe sanctions can be found
abroad. The European Economic Community,
for example, may Impose penalUes of up to
31.000.000, or. In the case of willful violatlona,
up to 10 percent of annual sales. We have not
attempted to determine the appropriate level
of antitrust fines, but we urge the Depart-
ment of Justice to accord high priority in
its legislative prograjn to the upward revision
of these penalties.
The creation of a more realistic scheme of
antitrust fines would enable a long-overdue-
ree.xamination of the punitive a.=;pects of the
private antitrust suit. It is anomalous that
private plaintifis who have done nothing to
uncover or prove an antitrust violation (the
usual case) should be psrmitted to claiai
treble damages on the basis of a judgment
obtained, by the Antitrust Division. In such
circumstances, the excess over actual dam-
ages and costs represents a pure windfall to
the private plaintiff. Today, one can defend
this arrangement on the ground that It ftir-
nishes an element of added deterrence which
Is necessary In light of the Inadequacy of the
existing criminal fines. But that ground
would be removed If the fines were revised
to a more appropriate level; and a more
rational scheme of deterrence would become
feasible. We are also deeply concerned that
private treble damage suits provide undesir-
able opportunities for harassment and the
furtherance of a variety of anticompetitive
practices.
With regard to remedial sajictlons. the
principal question Involves the undesirable
side effects that frequently accompany a
poorly formulated decree. Ideally — and It Is
an attainable ideal — an antitrust decree
should be a "one shot" affair: dissolving the
monopoly, or divesting the acquired .^55eta.
or terminating the basing-point system, etc.
The antitrust laws were never intended to be
a system of continuing regulation. Antitrust
policy has as Its basic principle the preserva-
tion of a competitive environment within
which Individual enterprises are free from
cor.tl-T_?:r:g '>:'porvli!on. V":en ?. !'.-''•:'' - -s
in eiTect. "Lot us return to the court, or ^rr-c
the power to the Antitrust Division, ^o '.^'i-
judge the propriety ci various beiiiivio: ci
the defendant for years to come." one crin 1 *
sure that the suit has failed In its purpose
of restoring competitive conditions. Nor la
(29)
2A THE STIGLER REPORT, JUNE 12, 1969, 115 CONGRESSIONAL RECORD 1S653-S7
June 12, 1969 CONGRESSIONAL RECORD — SENATE
> t);'p^rtn--ent equipped to ftinctlon ai a
.^ulatory asency. ayd It Is not !lkfl7 to
esc:ipe that common pitfall of economic reg-
ulation, the suppression of competition.
Nonetbcless. such decrees nre freqiiently en-
tered. e*:p?claliy bv consent of the parties In
cases whore the Department (^or the Federal
Trade CcmmUslon. to which these remarks
apply with equal. If not greater, force) Is
u-ns;ire of Its litigation prospects and wishes
to salvage something from the Investment
of enforcement resources.
For the future, we urge that the Depart-
ment adopt a firm policy of not proposing
or accepting decrees that ejiTlsage a continu-
ing. roEul.icory relationship with the defend-
ant, .^. correlative policy that ft-e 5ugc:est is
that every decree contain a definite — .-\nd
near — termination date, ordinarily no more
than 10 years from the tiate the decree is
entered. Such a principle -would compel the
Department to devise decrees that restore
competition rather than establish regulation.
as well as assure that decrees do not remxiin
In eiTect long after tlie relevant Industrial
conditions have changed (snch as with the
1920 decree against the meat packers).
Little l5 known of the client to which a
large n.imber of past decrees axe still opera-
tive, and If operative, of cny real value in
protecting coftipetltlon. We recommend,
therefore, some such procedure as this In
dealing -with outstanding decrees:
1, The past decrees stlU running should be
compiled, and the types and duration of
prescribed conduct summarized.
2, The current relevance of the decrees, or
at least those ninnlng aqainst lar^e indus-
tries, should be examined — presumably by
the economics section of the Antir.-ust
division,
3, The older (say 25 years and over) and
obsolete younger decrees should be vacated,
E, Recommended Changes In Antitrust
Statutes
Several legislative refortss could Improve
substantially the functioning of the antitrust
laws. We have recommended above a sub-
stantial Increase In the naaxlmum level of
fines. In addition, we recommend immediate
repeal of the Expediting Act. The low quality
of many Supreme Court antitrust opinions
can be traced In no small measure to the
fact that direct appeal fr«}uently requires
the Supreme Court to pass on an extenslvo
record without the beneSt of the winnowing
and focusing process Involved In an inter-
mediate appeal. The Supreme Court itself
has noted that direct appeal Is unsatisfactory.
If repeal Is politically Injposslble. then an
amendment that would drasUcally limit the
number of direct appeals would be deElrable,
The Webb-Pomerene Act should also be
repealed. The creation of cartels in torel'm-
commerce Is antithetical to the underlying
theory of the Sherman Act. The danger that
exempted cooperation between competitors
In the export field will lead to Illegal coopera-
tion at home Is too great to be viewed as
merely a potential abuse. Nothing in U-S.
domestic compeUtlon poUcv or foreign eco-
nomic policy warrants the retention 'of this
outmoded approach to Intemationai
competition.
On the agenda for long-term legislative
reform must be the Robinson-Patman Act
The Act leads to rigidity in distribution pat-
terns nnd to uniform, inflexible prlc:!!" In
muxutrles with few selle.-;. price reductions
are more likely to be made If they can be
made covertly. Such limited reducHons often
lead over time to generallv lower prices Thus
a prohibition against price discrimination
m.iy preclude the kind or competition that
.3 most hkely to lead to lower cr'ces m
o.igopoHstlc Industries. We view the Federal
Trade Commisslon-s tendency In recent times
to relax the enforcement of the Act as a
des table but. so long as private treble damage
act.ons are available, aa Inadequate reforii.
In reforming the Roblnson-Patman Act,
two kinds of nmecdmeat are desirable.
First, the general prohibition against price
discrimination la Section 2(a) should be
made more supple by broadening the meet-
ing ccmpetitloo and cost Justification de-
fenses so .Ts to make them more readily avail-
able for sellers whose price differentials do
not stem from a pred.itor^- purpose and do
not Ir.Jure comcvetition In the market nlace
(as opposed to dlsadv.intaging Individual
firms. Second, the more absolutist brokerage,
payments and services prohibitions of sub-
sections (c), Id) and (e) should be repealed
while making clear that the standards of
amend3d subsection (a) reniain applicable
to practices that would previously have been
treated under those repealed subsections. The
T,-.=;: Firce recognizes the p'^litical support
that the P-obinson-Patmiu Act retains In
some qu.arters and the danger that an at-
tempt to amend the Act might give partlculai
Interests an opportunity to add even morf
restrictive provisions. As a consequence
some of our members view amendment of th(
Act .as a long-term, albeit Imoortant. reform
others wish to leave It alone.
15S57
(30)
2B. WHITE HOUSE "WHITE PAPER", THE ITT ANTITRUST DECISION, JANUARY 8,
1974, 1-2
THE V/HITE HOiJSE
The ITT Anti-TruGt Decision
In the thousands of pages of testimony and analysis
regarding the ITT case since 1971, the only major charge
that has been publicly made against President Nixon is that
in return for a promise of a political contribution from a
subsidiary of ITT, the President directed the Justice
Department to settle antitrust suits against the corporation.
That charge is totally without foundation:
— The President originally acted in the case
because he v;anted to avoid a Supreme Court ruling
that would permit antitrust suits to be brought
.against large American companies simply on the
basis of their size. He, did not direct the settle-
ment or participate in the settlement negotiations
directly or indirectly. The only action taken by
the President was a telephoned instruction on
April 19, 1971 to drop a pending appeal in one
of the ITT cases. He rescinded that instruction
two days later.
— The actual settlement of the ITT case, while _
avoiding a Supreme Court ruling, caused the corporation
to undertake the largest single divestiture in corporate
history. The company was forced to divest itself of
subsidiaries, with' some $1 billion in annual sales,
and its acquisitions ivere restricted for a period of
10 years .
— The President was unaware of any commitment by
ITT to. make a contribution toward expenses of the
Republican National Convention at the time he took
action on the antitrust case. In fact, the
President's antitrust actions took place entirely
in April of 1971 — several weeks before the ITT
pledge was even made. '
I. President's Interest in Anti-Trust Policy
Mr. Nixon made it clear during his I968 campaign for the
Presidency that he stood for an antitrust policy which would
balance the goals of free competition in the marketplace
ancciinst the avoidance of unnecessary government interference
'.rith free enterprise. One of Mr. Nixon's major antitrust
concerns in that campaign was the Government's treatment^of^
ccr-glomeratg mergers. Conglo.-.erates had become, an im.por^ant
factor in the American economy during the lS60's, and despite
(31)
2B. WHITE HOUSE "WHITE PAPER, " THE ITT ANTITRUST DECISION, JANUARY 8,
1974, 1-2
public fears that they v;ere threateniiip; free competition
in the marketplace, the adrrdnistratlons of thoce years • —
in Mr. Ilixon's opinion — had not been clear in their
attitude toward them. In one of his 1968 campaign books,
Nixon on the Issues, in which he put forv;ard in sunmary
form his conclusions about national and international issues,
Mr. Nixon expressed his dissatisfaction with existing con-
glomerate policies:
"The Department of Justice has recently proposed
guidelines for 'conglomerates' but the guidelines
have not provided any substantial criteria on which
businessmen can safely depend. Moreover, there is
the problem of unsettled case law on the question.
Hy administration will make a real effort, and a
successful one, I believe, to clarify this entire
'conglomerate' situation...
I To help resolve the issues involved, Mr. Nixon during his
I cam.paign appointed a Task Force on Productivity and Competition,
I headed by Professor George Stlgler of the University of Chicago
and including several eminent academicians. The task force
presented its report to the newly inaugurated President on
February l8, I969. The group recognized public fears that
conglomerates posed a ''threat of sheer bigness'' but said these
fears v;ere "nebulous" and should not be converted into an
aggressive antitrust policy on the basis of knowledge then
I available. "V/e strongly recommend,'' stated the report, "that.
I the Department (of Justice) decline to undertake a program of
I action against conglomerate enterprises..."
A similar view v/as set forth by many outside the Government.
In an article in Fortune in September of 1959, Robert Bork, then
a professor of antitrust lav; at the Yale Lav; School, attacked
the policy of antitrust enforcement against conglomerates that
he thought was emerging at the Justice Departm.ent . He noted
that unless conglomerates mergers were Involved in horizontal
price-fixing within an industry, there was no economic founda-
tion for believing that they v;ere anti-competitive. He also
noted that ''The campaign against conglomerate mergers is
launched in the teeth of the conclusion reached by the task
force that President Nixon himself appointed to study and
report on antitrust policy.''
A second major concern of the President and his advisors
was their fear that the ability of U. S. com.panies to compete
in the v.'orld market might be threatened by antitrust actions
against conglor.i-cjrates . The United States faced a shrinking
balance of trade surplus and the President and many of his
advisors felt that U. S. multi-national companies could play
an important role in im.proving the balance.
The President feared that antitrust action against those
companies which vras based upon something other than a clear
restraint of trade v.'ould render them less able to compete yy
with the government-sheltered.aud Knnn^tnrpjii.J-rLdiisLirr.-! ->! , _~ r,^-i.=— ^ —
(32)
2C. REMARKS OF HAROLD GENEEN, JUNE 26, 1969, ANNUAL MEETING OF ITT
SHAREHOLDERS, 8-9
REMARKS BY MR. HAROLDS. GENEEN, C'-L'MRMAN AND PRESIDENT
INTERNATIONAL TELEPHONE AND TELEGRAPH CORPORATION, AT
1969 ANNUAL MEETING OF ITS STOCKHOLDERS -- SHERATON-CADILL-^ C
HOTEL, DETROIT. MICHIGAN ON JUNE 26, AT 2 P. M.
Ladies and Gentlemen:
On behalf of the Board of Directors and Officers I want to welcome
you to your 49th Annual Meeting.
This is our fixst meeting to be held in Detroit which reflects our
policy to bring ITT to the stockholders throughout Ihe country's economic
and financial centers.
During the past 10 years we have brought our Annual Meeting to
Baltimore, San Francisco, New York, Bostcm, Philadelphia, Cleveland,
Los Angeles, Atlanta, Denver, and today -- Detroit,
Today's meeting also has a special historic significance for the
Company -- today's meeting is the first official meeting at the beginning
of its 50th Anniversary Year.
■ Turning back nov/ to Detroit and the State of Michigan, tliis is an area
that has increasing significance to ITT. We are represented in the area
by 19 of our major divisions v/hich provide a variety of services and more
than 20 product lines. .
. We are clients of Detroit's great banks and financial institutions and
major purchasers of its products. The annual dollar volume of our ov/n
activities in this area alone would total well over $100 nnillion.
Among the better known of our activities in the Detroit area are:
Thompson Industries, suppliers to the automobile trade. . . .
(33)
2C. REMARKS OF HAROLD GENSEN^ JUNE 26, 1969, ANNUAL MEETING OF ITT
SHAREHOLDERS, 8-9
These two reports, the Neal Report requested by President Johnson,
and the Stigler Report requested by President Nixon deal with exactly the
problem we are speaking of today. Each report represents the formal opinion
of a distinguished group of economists and businessmen.
Each report concludes that there is no legal support for an attack on
size as such and that Congress, armed with all of the information, facts, and
opinions from hearing all sides, would be required to pass new legislation to
do this.
The Stigler Report (which is the Nixon report) went even further to state
that there was no dangerous concentration of }.ndustry in their opinion taking
place and specifically warned against antitrust actions against large diversified
companies on the basis of "nebulous fears of size and economic power. "
J ■
Furthermore, the Stigler report warned against anti merger attacks on
large companies which would have to be made through "a contrived interpretatio:
of the Clayton Act.
Yet, what I have described to you is precisely what this report warned
against and yet what we are literally experiencing not once, but possibly twice
and three times.
Needless to say since our counsels are eminent, independent experts.
who say that we are legally correct and since the mergers we have sought
have strong significance to our future and were arrived at openly and
willingly by both parties on each case and based on the exchange of sound
(34)
3. Apparently, in June of 19C9, Mr. Gfjicer. r.'.u-^ht to meet v/ith
President Nixon about certain fiiirmcial i'v.d ccon-.ro.'c concerns of
ITT, including, but not lirnitc;d to, the ;»nu".i lus t r-'ri'.-. . Jolm N.
Mitchell, for one, thought the meeting v.ould be ii-.-ppropricite
because of ITT's legal involvement with ll^.e Dep? vl-:».en.t of Justice.
The meeting was not schedule.
Page
3a Letter of June 9. 1969, from Lorc-i M. Berry-
to the President cnclosin::; one cov"-' cf a June 3,
1969, letter from Genee^i to Maurice Stans. .. 36
3b Memorandum of July 14, 1969, from John .
Mitchell to John Ehrlichman« • • • • 43
3c Memorandum of July 16, 1969, from Dwight L.
Chapin to Peter Flanigan 44
(35)
LOREN M. BERRY
Chairman of the Board
3A. LOREN BERRY LETTER, JUNE 9, 1969
L.M. BERRY AND COMPANY
P. O. Box GOOO • Dayton. Ohio 45<Q1
Araa Cod* 513 ^58-1311
June 9, 1969
President Richard M. Nixon
The "White House
Washington, D. C.
Dear President Nixon:
I am sending you herewith copy of a letter containing late
information regarding matters of vital importance to our
country both at home and abroad.
The letter, dated June 3rd, was written by Mr. Karold S.
Geneen, President of International Telephone &: Telegraph
Corporation, to Secretary Maurice H. Stans, and sets
forth vital information which I believe you would like to
have. I note that Mr. Geneen has asked to see_you_in_the.
hope that he can give you any further facts needed. I
sincerely hope you" c^an arrange such a meeting at aji__
e'aFly date because~I"^^fiTiitely:ieentEarfTt \yould be_a_two-^
"way street; namely, that you can be of real help to each
other, both from a national and an international standpoint.
I want to thank you for a wonderful evening at your dinner
party May 27th. It was a real pleasure for me to be there,
also to see you looking fine.
Best regards and all good wishes.
LMB/lm
End.
(36)
, 3A. HAROLD CfENEEN LETTER, JUNE Z^ 1969 \
1 ... ',
International Telephone and Telegraph Corporation
320ParkAvenue
New York.N. Y. 10022
MAQOLO 5.<Jc.**CEi'
June 3, 1969
The Honorable
Maurice H. Stans
Secretary of Cominerce
14th and Constitution Avenues, N. W,
Washington, D. C. 20230
Dear Maury:
From the newspaper reports I can see the immense amount of globe-
circling coverage you have been putting into some of the long-standing prob-
lenas of the Department in an effort to get them cleared up promptly. I think
your example bears out what all of us knew you would accomplish in a diffi-
cult public assignment.
Because of your own load I hesitate to raise any further problems
with you, yet timing is of such importance that I would appreciate very much
your reading the contents of this letter, and then perhaps I can talk to you
briefly on the phone without disturbing your work schedule too much.
First, to put this in context, I write concerning a problem that involves
national policy and also deeply involves our company and which, very impor-
tantly, comes under the jurisdiction of your Department.
The United States balance of payments situation is, in my opinion,
probably the most difficult, long-standing problem that the nation faces and
it will continue to be potentially tlie most dangerous and troublesome one
that will be with us into the futu'-e as far as we can see.
Essentially, the payments problem is a balance of trade problem that
primarily confronts the Department of Commerce for solution. Against this
background, let me use our company as an example of the difficulties that any
of us in this activity faces.
First, ITT has consistently brought back cash to the United States --
"net of everything" -- for the past 20 years.
The rate at which we are bringing this back has been doubling every
five years. , . .
(37)
3A, HAROLD GENEEN LETTER^ JUNE 3, 1969
This year, 1969, ITT will bring back approximately S200 niillion
(net oi' everything).
At the pace v/e are moving, in the next four years we should
bring home approxiinately $1 billion (again net of everything). Yet
ihicre is a problem for any U. S. company in "bringing back the bacon"
iri tJ-.fs niar.i.i-r.
Let me recall my early days v/ith the company ten years ago
to explain. 1 had been in the company little more than 12 months when
Cuba seized our telephone company in Havana which, at that time,
represented about one-quarter of our total earnings. Despite the
fact that Bob Murphy, then Undersecretary of State for Political
Affairs, assured me that the U.S. Government would have the company
back for oar shareholders in 90 days, ten years have passed and Castro
still runs Cuba and we still do not, of course, have our teleplione
company back. Nor has the telephone coinpany been returned that was
expropriated in Brazil (though on that one we received some compensation),
and every morning I look for a headline about what will happen to our Peru
Telephone Company, a pawn in the current problem in that country.
When we lost the Cuban Telephone Company, we lost a great
deal of investor confidence at that time. The loss coupled with the fact
that 80% of our earnings then came from overseas, although soine 93%
of our stockholders were (and are) U.S. citizens, gave us a tremendous
problem. We decided then and there that it was necessary for us to
establish a broad, firm U.S. base in order to continue to carry on
foreign trade. This we have done, complying with all of the laws of the
U.S., including those of Antitrust.
In short, Maury, in order for a U.S. company such as ours to
be a "bacon winner" for you abroad and'to be able to continue to contribute
to the balance of payments account, we have : ound it is absolutely essential
to our stockholders' confidence and support, to establish credit and raise
money abroad-- to do all of the necessary things with which you are so
familiar -- to have a large, strong domestic base. We put the require-
ment as approximately two-thirds domestic to one-third overseas earnings.
I think our record on balance of payjT.ents testifies to how well
this systenn works, including the fact that any acquisitions we have rra.de,
we have taken overseas promiptly to enhance both our positions abroad
and to maintain our "bread winning" role.
(38)
3A. HAROLD GENEEN LETTER, JUNE 3^ 1969
Nov.-, ds ."i^ciiiist this problem, we are running into a problcin J
\vn}i the AntiUnist Division of the Justice Dc])arirr.ent which is suing us on j
mergers we announced last year, and we are ad\-iscd by covjnscl tliat tiiis
is biiing done- on highly speculative and innproper grourids. As a matter
of fact, Mr. McLaren now candidly adinits to us tliat he is really bringing
suit because we are a "con"lomerate" and because we <ire now a "bi^;
comi)aiiy" and that he will continue to do so using any pretext he can
dream up. This policy of Ms. McLaren's is all the more difficult to
understand because we have and are proceeding in compliance with the
antitrust laws of the land as they have been interpreted by the legal
profession and llie courts for a great number of years, and in compliance
with the guidelines laid down by the Justice Department. We are still
assured, as I v/rite, by our antitrust attorneys that the grounds on which
these cases are being taken probably will not stand up in court.
This is reassuring to a degree, but the suit filed and the prospect
of other suits are a severe deterrent to carrying out our plans, running
the business daily and, inost importantly, a major iinpediment to contin-
uing our role as one of the leading foreign commerce companies of the
United States.
Only last week we had a serious example of this negative impact
abroad. We had a bond issue in the United Kingdom that was simply a
flop'. This was our first flop in 25 years of raising funds abroad and while
there are many factors that have to be considered, certainly one that cannot
be overlooked -- reflective of the antitrust policy -- was a press report,
prominently placed in The Times of London, on the issue saying that
"the U.S. Government was against ITT because it is a congloinerate".
The European pickup of The Times story and the failure of the issue will
not, to put it mildly, be helpful to us or to you.
The significance of the unwarranted and unjustified antitrust
policy now appears in light of the responsibilities of your own Department
in connection with tlie balance of payments effects in our activities abroad,
as well as domestically.
Now, let's look at son-.e additional facts.
1. There are in existence tvvo outstanding reports on the economic
effects of antitrust policy, and the role of the conglomerates is dealt with
specifically. These reports v/ere compiled by outstanding panels of
economists, one at the request of former President Johnson, the other
at the request of President Nixon. The first report is known as the Neal
Report and was released last week by Mr. McLaren after repeated request
for its disclosure.
(39)
"J
ZA. HAROLD GENEEN LETTER, JUNE 3^ 1969
Tlie ropiJiL states very simply, in effect, that tlif suits
coritc-;!';'>]-)lated against us are now supported by law and it recoiYimends
furli'ior a pxjiicy oi antitrust eiiforcement tliai would r.ar iia\e i:)rovidod
a basis at ;'.l! for the suit that was iiled agair.st our merger with Cautecii.
The sec<;nd report, known as the Stagier Rc])ort and compiled
by an cniiner.t panel of businessnien and economists, not only reiterates
the main points of the Neal Report, but even niore emphatically opposes
the use of the Antitrust Division to curb mergers on the basis of "way-out"
theoritis of "reciprocity", "potential competition", etc. , except where
clear evidence of illegality exists. The Stigler Report has not been
released though it has been reported as a "secret Nixon Report" in the
Wasliington Star, and reliable sources are quoting its contents in
Washington.
2. In a discussion with Arthur Burns, I found that his general
thoughts support the position that there is no sound basis for the unwarranted
attack on conglomerates tiiat is being waged. '
3. In an informal discussion with David Kennedy, I found that
bis concerns are against "improper concentration within an industry"
and :iot with conglomerates per se or because of size, a position also
taken by the Neal and Stigler Reports.
In talking with several of the key Republican policy people in
the Congress, including Senator Dirksen and Congressman Ford, I find
they hold equally strong views against unjust attacks on conglomerates
because of size per se or "fancy" theories of reciprocity which are
untried in law and generally regarded as unsound.
Among the Government Departments which would be directly
involved, it appears your Department would have a sharp and immediate
interest. Of course, I don't know your detailed views on this subject,
but 1 do have the impression that you were concerned about the aspect
of "raiders" in the business world. As you know, this has also been the
concern of Congressirian Mills. As I am sure you are aware, we have
never indulged in these "raiding tactics". On the contrary, all of our
mergers have been jointly agreed to, they have been harmonious and
the considerations have been represented by normal stock securities.
(40)
2A. •MAROLD GENEEN LETTER^ JUNE Z, 1969
5--
It does appear, Maury, that the need for your support of large
Ainerican foreif^n trade companies is very real. The need is to be
allowed a domestic base from which to move with assurance in world-
wide trade.
This, I thir^k, is demonstrated by the fact that such aca_uisitions
as we make are done freely, that they are paid for fairly, with proper
securities. Most importantly, these kinds of acquisitions result not
only in more efficiency dome'stically, but -- by carrying these activities
abroad-- they increase the ability to expand balance of paynrients remittances.
It does seem that almost every one in Government w)io should be
concerned v/ith these matters is in agreement on one thing -- that a proper
policy would recognize the care with which we have planned our activities
in close compliance with the law, as well as the very real contributions
we are making domestically in addition to remittances from abroad. I
have said "almost every one". There are those, however, who seem to
feel that the only proper course is one of harrassment and of punitive
legal actions.
Since it appears we are to be the first at bat, there remains only
this question -- "While there is still time, how can we do anything about
this?"
I have asked to see the President in the hope that I can draw the I
facts to his attention. -/
I can see no virtue in any discussion with Mr. McLaren or in
turn with the Attorney General who either from conviction or comnriitment
continues to express support of Mr. McLaren's actions.
The purpose of this letter is to see if I can elicit your support •
based on the facts that I have outlined here to do two things:
1. See that the Stigler or Nixon Report is released officially.
I believe it might have a healthy influence on this problem since it
represents the Administration's best advice on policy solicited at the
President's request.
]
(41)
3A. HAROLD GENEEN LETTER^ JUNE 3^ 19 6 i
2. Possibly, since I feel this directly and indirectly affects
yotir own responsibilities, that you request t)iat there be an Administra-
tion review and re.ippraisal of these policies witli all of these facts now
brou.ulU to light. Sufficient differing policy, versus the currei-.t activities
of thi^ Justice Departinent in attacking conglomerate mergers on specula-
live grounds, has been expressed at high enough levels, as detailed above,
to indicate tl^at such a review would be in order.
I do want to point out that while this is essentially a broad poli
issue, our company is directly and justifiably interested in the outcom
icy "^
e. J
1 would like to talk with you briefly on the phone, after you have
read this, if I may have the opportunity.
Thank you for your courtesy and consideration.
Sincerely,
Yi/-.
(42)
3B. JOHN MITCHELL mMOEANDVM^ JULY 14, 1969
THE ATTORNEY GENERAL
WASHINGTON
July 14, 1969
TO: John Ehrlichman
y1
FROM:
JohWMiicKel^
(-UV
RE: Attached
As you may know, Mr. Geneen's company is involved
in a number of antitrust suits with the Justice Depart-
ment. Further, Sonne of the companies in his conglom-
erate are represented by the Mudge firm. I would see
no reason for the President to see Mr. Geneen unless
he wants further review of the antitrust problems from
him. Needless to say, the Geneen letter attached
does not reflect accurately the legal position of the
Justice Department in the antitrust suits.
It might be well to leave this matter with Maury Stans
for a follow-up on the balance of payments matter.
(43)
SC. DWIGHT CHAPIN MEWPANDTm^ jjjLY 16^ 1969
July 16, 1969
V.'edcieada/ - 3:15 p. nri.
.N-iSMORA^TDUM FOR 2.-IR. PSTSR FLAKIG/\N
SUBJECT: Proposed Appolnhm^nt -r4th the Prc3idcr:b for
Piarolc Gcnecn oi j. x >u l
la n.ccordarice rv^tb th3 recommsE-datiorta tliat y-oU set; fortb. in your
r/ir;raorandum (rJ:tached), vvs have net scbadulad aa appolntmeut for
Ilarold Gencca of, ITS;T.
5>lrce yea arc faniUiar 'J7i.':h all the matters relating io th.'i subject
matter, I would lilce fco suggest that you talk, to Eryce Harlov/' and
riee i£ it 5.3 af^reeablc v.ith him for ycu to c-all V-'ilson snd explain
v/hy it would ba inappropriate for the Presidant to see Geneen.
■1
DY/IGirr L. CHAP2I-i
DLCrny
(44)
4. In March, 1971, the Solicitor General authorized an appeal
to the Supreme Court from an adverse decision in the United States v.
ITT (Grinnell) case because of practical difficulties in the future if
the decision were left standing. The Solicitor General and his asso-
ciates thought the case to be very hard; his chief deputy thought the
government's chances of winning were minimal.
Page
4a Memorandum from A. Raymond Randolph, Jr. to the
Solicitor General dated March 2, 1971 46
4b Memorandum from Daniel M. Friedman to the Solicitor
General, dated March 15. 1971; I, 4-5 55
4c Supplemental memorandum from A. Raymond Randolph.
Jr. to Daniel M. Friedman, dated March 25. 1971; I, 2;. 60
4d .Memorandum to the Solicitor General from Daniel M,
Friedman dated March 26. 1971 62
4c March 26, 1971, appeal authorization of the Solicitor
General 63
(45)
Kt.rm 1)1-1^11
(IJ. l-il -..Vi
4A. A. RAYMOND RANDOLPH, JR. ^ MEMORANDUM, MARCH 2. 1971
■'■■I'ARTMLXT or jL.siic;i:
L;.\'rn:i) s r.vi i„s (-.o\r.' ■mi:.\'t
Memorojidum
lO
The Solicitor General
jjATi;: March 2, 1971
j\, I ROM : A. Rayroond Randolph, Jr.
suhject: United States v. International Telephone & Telegraph
(D . Conn . )
I recommend appeal to the Supreme Court, although
not on the primary basis set forth in the accompanying
memorandum from the Antitrust Division.
Appeal is sought mainly on the ground that the
district court erred in refusing to consider evi-
dence j^ of a trend toward concentration in the
economy as a v;hole. Basically the theory is this:
Section 7 of the Clayton Act forbids one corporation
from acquiring another "where in any line of com-
merce in any section of the country, the effect of
such acquisition may be substantially to lessen com-
petition ..." The Court has held that "any section
of the country" can mean the entire country. United
States V. Pabst Brewing Co. , 384 U.S. 546, and it
should similarly hold that any line of commerce can
mean the entire economy. The Court has also recog-
nized that a trend toward concentration in a speci-
fic product market is relevant in determining v.'hether
a merger may have a substantial anticompetitive effect
in that market. United States v. Von ' s Grocerv Co.,
^ Dr. Mueller's proposed testimony.
6:J~hli
(46)
4k. A. RAYMOND RANDOLPH^ JR. ^ MEMORANDUM^ MARCH 2, 1971
- '?. ~
384 U.S. 270, 277-270; xO^. 281 (VJhite, J., concurring).
Thus, a trend tov/ard aggrcyate concentration in the
entire economy should be considered as relevant in
determining v/hether a merger violates Section 7.
The obviour. question is relevant to vhat? To
the effect of this merger on competition in the par-
ticular product markets or to the effect on competi-
tion in the entire economy? VThile it is far from
clear in the memorandum, apparently Antitrust v/ould
ansv;er "both." Thus, one theory is that v;ith respect
to the particular product markets involved in this
merger, something less than the usual quantum of
proof is needed to show that there may be substantial
anticompetitive effects if, in addition to such
proof, the government can shov; a trend in the economy
toward increasing aggregate concentration (see p. 25,
2d 51) . The other theory is that this merger \7ill
increase aggregate concentration; that a considerable
increase in aggregate concentration should be equated
v/ith a substantial lessening of competition under
Section 7; that the general trend tov;ard concentration
supports this equation and must be considered in
assessing the effects of an increase in concentration
by a particular merger; and that the anticompetitive
effects in Grinnell's product markets are a micro-
illustration of the general results of greater con-
centration through conglomerate mergers. (See p. 5,
1st 5[.)
At the outset I should note that there is no
serious problem about v.'hether we properly raised
these issues below. The Memorandum in support of
Dr. Mueller's proposed testimony does seem to focus
only on the first theory:
Consequently, such evidence [the trend]
is relevant to. the issues in this case in
two respects. First, the specific anti-
competitive consequences of this merger must
be considered v;ithin the perspective of this
merger trend. The result of placing this
merger against that baclcground is to require
(47)
4A. A. RAYMOND RANDOLPH, JR. ^ MEWRANDVM, MARCH 2, 1971
- 3 -
that greater judicial concern be given
to demonstrated anticompetitive effects
within specified lines of commerce,
because of the additional impact vipon
competihion in general. [p. 9]
But other statements do hint at the second theory
also:
In addition; apart from its in-
stant anticompetitive consequences, this
merger must be viewed as one which would
further and encourage the previously
discussed trend toward increasing con-
centration. [Id.]
As to the first theory, I fail to see why
it is at all necessary to argue that Section 7 should
be construed so that "any line of commerce" means
all lines of commerce. If the general trend toward
concentration bears on hov; the merger v;ill affect
competition in, for example, the fire sprinkler sys-
tem market, then the court should consider it — and
vice versa. But the interpretation of Section 7 has
nothing to do v/ith this.
However, rather than offering reasons v;hy this
trend is relevant the attached memorandum seems to
proceed on the basis that it is sufficient to argue
that Section 7 can mean "all lines of commerce":
Congress itself deemed the evidence of a trend tov;ard
concentration relevant and that is enough. One
obvious difficulty with this approach is that the
legislative history in support of construing Sec-
tion 7 to mean "all lines of commerce" is weak.
Obviously in order to persuade the Court to accept
this construction something more will have to be
shown. Zind that something must consist of a demon-
stration of the pertinence of this trend with
(48)
4A. A. RAYMOND RANDOLPH], JR. _, MEMORANDUM. MARCH 2, 1971
respect to competition in the particular lines of
commerce involved in the merger. Unfortvinately
such a demonstration has not been made and, frankly,
I doubt whether one could be.
Moreover, even if Section 7 is interpreted as
Antitrust urges, there is still the problem whether
proof about aggregate concentration in the entire
economy -- that is the trend toward such concen-
tration — assists proof v;ith respect to particular
product markets. If more than the trend itself is
needed to show a lessening of competition in all
lines of commerce, and if the other evidence is less
than adequate to show this in a particular line of
commerce, there is no apparent reason why some
combination of the two shov;s a substantial diminu-
ition of competition within a particular product
market, other than the bald and conclusory assertion
that increases in aggregate concentration through
conglomerate mergers must be stopped somehow. This
seems to be little different from a case v.'here we
have introduced insufficient evidence of anticom-
petitive effects within the entire country and ^Iso
within a specific geographical market. No one v/ould
contend that this nevertheless makes out a violation
of Section 7 with respect to the specific market
area. Yet the arguments in support of the proposed
theory do essentially just that, although for lines
of commerce rather than for sections of the country.
Unless it can be shovm hov; the trend increases
the probable anticompetitive effects of the merger
within the product markets, unless this nexus can
be supplied, the proposed theory is baseless.
It must be remembered that the trend we seek to
prove is a trend tovjard aggregate concentration, not
market concentration. (Apparently most economists
agree that there is no trend tov.'ard the latter.)
As indicated above, there are, in my view, no grounds
for arguing that this has an anticom.petitive effect
on a particular product market. To be sure, ITT is
one of the largest conglomerates; it has been gobbling
(49)
4A. A. RAYMOND RANDOLPH, JR., MEMORANDUM, MARCH 2, 1971 |
- 5 -
up companies in diverse industries in the past; and
this past practice, together with the general trend
in the economy toward increasing concentration, in-
dicates that ITT v;ill continue to follow the same
course in the future. As ITT acquires more and more
companies, the opportunities for reciprocal dealing
brought about by the acquisition of Grinnell, v/hile
perhaps somewhat less than substantial at present,
may intensify. If this were the theory, it would
at least be understandable. But (a) the trend a;dds
little, if anything, to the force of this argument,
and (b) this is not the theory. The difficulty in
considering the trend toward aggregate concentration
with respect to effects v/ithin specific product
markets is not so much in requiring courts to try
to add apples with oranges. The fundamental pro-
bleift is that we have given them no reason to even
try to perform that task.
Perhaps this is v;hy no satisfactory basis has
been offered for explaining just how the trend toward
concentration should be combined with other factors
to allow a court to form an overall judgment about
the case- (Of course, it is asserted, as indeed it
must be, that the district court's failure to con-
sider Dr. Mueller's testimony made a difference
in the outcome [p. 25].) Obviously if one cannot
shov; v.'hy certain evidence is relevant at all, it is
impossible to say how much weight a court shovM give
to such evidence in deciding the case before it.
II
The other theory of the case is that this merger
has lessened competition in the entire economy —
all lines of commerce — and that the trend tov;ard
aggregate concentration relates to this. One might
ask how this could possibly help when there appears
to be trovible enough in making out a case v/ith
respect to only a few lines of commerce. Actually
it would be easier to show a violation of Section 7
under this theory for little more than tlie trend
(50)
I 4:A. A. RAYMOm RANDOLPH, JR., MEMORANDUM, MARCH 2, 1971
- 6 -
plus the size of the merging firms would have to
be proved.
As noted earlier, the Court has held that a
tendency toward increasing concentration in a pro-
duct market is highly relevant. The reason is that,
in the Court's view, an industry that tends toward
oligopoly becomes less competitive. VThile ^^ par-
ticular m.erger, as seen in isolation, may seem to
push the industry toward oligopoly, it may be that
other new firms have been entering so that the
overall movement is in the opposite direction. Also,
the concept of oligopoly itself necessitates looking
at more than one firm; the actions of other firms
in regard to their share of the market must therefore
be considered. Thus, the trend toward concentration
in the market is highly relevant.
The basic probelm with using this approach v;ith
the. entire economy is twofold. First, as noted above,
the increase has been in aggregate concentration, not
market concenti'ation. (This is perhaps understand-
able in light of the f act . that conglomerate mergers
do not increase market concentration.) vrhile there
is substantial economic opinion that increases in
market concentration do not decrease competition,
there is an even more weighty line of authorities
who contend that increases in aggregate concentration
do not have any appreciable effect on competition.
(Dr. Mueller, of course, does not agree.) Second,
and more important, the trend in a product market
has been treated by the Court as just one factor to
be considered. But here, aside from the size of the
merging firms, we have little else to offer.
Thus, if v;e ask the Court to assess the com-
petitive effects of this merger on all lines of
commerce, tlie question arises v.-hether v.'e can supply
any meaningful guideposts. The Court has stated
that "tlic purpose of delineating a line of commerce
is to provide an adequate basis for measuring the
effects of a given acquisition." United States v.
(51)
; 4A. A. RAYmND RANDOLPH, JR. s MEMOMNDUM, MARCH 2, 1971
_ 7 _
Continental Can Co., 378 U.S. 441, ^57. Surely the
trend plus the v.i '/.e of the accjuircd firm cannot be
cnouqh. Suppose Grinnell, although relatively cjuite
large, was not a leader or even close to a leader
in its product mar>;cts and suppose also that the
top four finns in that raarkct held a significant
combined share. It would seem that ITT ' s acquisition
could in fact increase competition; at the least,
competition v;ould certainly not be decreased. Yet
the merger certainly added to the trend tov/ard
aggregate concentration and under the proposed
bo '^ of
theory xt v:ould presumably/ violation/Section 7.
However, one viev;s the desirability of such acquisi-
tions as a policy matter, the fact is that there v;as
certainly no intention to forbid them under Section 7;
indeed encouraging this kind of activity may have
been part of the purpose of the statute. In short,
if trend and size are the only relevant factors,
this v.'ould mean simply that conglomerates cannot
cicquire relatively large firras. I don't think
there's a ghost of a chance that the Supreme Court
v;ould buy such a nonselective and indiscriminate
approach.
This brings me to the question how the evidence
with respect to competition in Grinnell* s product
markets comes into play. One thing seems certain.
The fact that we have failed to shov/ a substantial
lessening of competition within those markets —
assuming that the district court was correct -- can-
not be fatal under the proposed theory. For if such
a showing were reqiiired, then the theory itself
v;ould be mere surplusage. On the other hand, if,
the proven effects of the merger in particular
markets are intended to illustrate the general
result of increased aggregate concentration, it seems
quite damaging that these effects are soracv:hat less
than substaiitial in the very product markets directly
involved in t'ne merger (again assuming the district
court v.'as correct in this regard.) There appears to
be no satisfactory way out of this dilemma. Indeed,
given this problem it is difficult to see why we
(52)
! 4A. A. RAYMOND RANDOLPH, JR., MEMORANDUM, MARCH 2, 1971
- 8 -
should even address ourGolves to the anticompetitive
consequences within Grinnoll's product lines.
Unfortunately I must conclude that neither
theory comes even close to }iolding v.-ater. Quite
frankly, v^e should not atteiapt to take a case to
the Supreme Court on such a flimsy basis.
However, it would be um/arr anted to conclude
from this that v^e have no weapons under Section 7
against conglomerate mergers. We of course still
have the more traditional arguments v/i th respect
to entrenchment of a dominant firm, although these
proved less than persuasive to the district court
on the facts of this case. Another line of attack
which at least seems more persuasive than the approach
proposed here would be to argue that the acqusition
of one of the top four leading firms in concen-
trated marlcets should be illegal because (a) the
possibility that that firm will become further en-
trenched, thus making the market more rigid, and (b)
even if this in itself might not be enough to shov/
a substantial lessening of competition it should be
considered as such because the acquisition of a more
minor firm would have helped it to increase its
share of the market, thus decreasing market concen-
tration. Obviously the major argument against this
is that v;e are not showing a lessening of competition,
but rather the failure of the merger to be pro-com-
petitive. Nevertheless I still believe that this
line of argument is much more tenable than the
theories expressed in the attached memorandum. ^
Although I wpvild thus not appeal on the basis of
the theories discussed above, there are, however, two
grounds on which I v;ould recommend seeking Supreme
^ Since xvo did not argue this below, I should
think that we cannot nov; offer it to the Court.
(53)
4A. A. RAYMOND RANDOLPH^ JR. ^ MEMORANDUM^ MARCE 2^ 1971
- 9 -
Court review. The first is v/ith respect to the
district covirt's finding th^lt Grinnell is not a
"dominant" firm in its product markets. This term
has never been defined by the Court and here the
district court supplied no definition. The moc-ming
of the term is important because it has been thought
that if a dominant firm becomes more entrenched by
the merger this will substantially lesson competition.
(See pp. 29-30. of the Antitrust memorandum.) The
memorandum spells out in detail the arguments
against the court's finding (pp. 29-33) and these
seem quite persuasive.
I recognize of course that the district court
v;ent on to hold that even if Grinnell is a dominant
firm the government's proof is nevertheless inadequate,
On this score I think v;e can mount a strong attack
against the court's findings v;ith respect to the
possibility of reciprocity. Again this seems to
give rise to significant qviestions on which the
Supreme Court has not yet spoken: ^'SL' ' v/hether it
is enough to shov; that the structure resulting from
the mei'ger makes reciprocal dealing likely regardless
of the acquiring firm's disavowals of Silowing this
practice; and v;hether the possibility of reciprocal
dealing must entrench a dominant firm in order to
be deemed substantially anticompetitive or whether
that possibility standing alone is enough. See pp.
41-42 of Antitrust' s memorandum.
In my view a v;in on either or both of these
grounds will go a long v;ay toward halting the trend
toward conglomerate mergers and will certainly be
a significant step in the direction that Mr. McLaren
has indicated the Department of Justice should move.
(54)
^::'^j''v;>v^., ^g- DANIEL FRIEDMAN MEMORANDUM, MARCH 15^ 1971
P'!:^r^ ':-^ ^^A CDfficc of t()c Solicitor (Seiierni
,^?.:v'-"\,-r^/y Klnsfjincton. Q.C 20530
DIIFinch
60-lii9-037-l
March 15, 1971
MEMORAirDUI.I FOR Tiffi SOLICITOI? GEiffiR/iL
Re: United States v. International Telephone
and Tele£^raph Corpora.tion (P. Conn.)
I recoimnend APPEAL.
This is the first of the government's conglomerate merger cases that
has been decided. Since the beginning of his administration as head of
the 'Antiti-ust Division, Assistant Attorney General McLaren consistently
and repeatedly has talien the position that Section 7 of the Clayton Act
reaches such mergers; in a I969 speech the Attorney General suggested a
similar belief. Tlirec other conglomerate cases are pending before the
district courts. Considering all the circumstances, vre really have no "^
choice but to seek Supreme Court reviev; of this decision v/hich, if left
standing, v:ould be a serious adverse precedent that probably would doom
our rem-aining cases and i-rould also make it extremely difficult to proceed
against future conglomerate mergers . -^
The basic problem is developing effective theories upon which to
challenge Judge Timbers' decision. The latter, unfortunately, is an
able job, and at every turn vre \n.ll be up against carefully dravm findings
in which the judge's credibility determinations played an important part.
It is vital that oxtr appeal not involve a wholesale frontal attack on those
findings; we must avoid presenting the case so that the appellee effectively
could argue that "V/hat the Government asks, in effect, is that we try the
case de novo on the record, reject nearly all of the findings of the trial
court, and substitute contrary findings of our own" (United States v. Yellow
Cab Co . , 338 U.S. 33S, 3^0). V/e may have to challenge some of the findings —
the fewer the better, of course--but basically our case for reversal must be
that the district court applied the vrrong legal standards in holding that
this merger did not violate Section 7- Several theories are possible.
1. The most persuasive argument to me is that the nature of the large
modern conglomerate enterprise necessarily carries vri.th it a sufficiently
serious likelihood of reciprocity that the effect of its acquisition of a
major firm may be substantially to lessen competition in that firm's industry
vri. thin the jneaning of Section 7. Federal Trade Commission v. Consolidated
Foods Corp., 38O U.S. 592, seemingly announced the rule that the acquisition
"of a company that commands a substantial share of tlie market" (as Grinnell
docs he)-e) violates Section 7 if it creates tlie "probability of reciprocal
buying" (p. 600). Tlie Court recognized that the "'mere possibility' of the
41-566 O - 74 -
(55)
4B. DANIEL FRIEDMAN MEMORANDUM, MARCH IS, 1971
- 2 -
proli.lbiLccl rcr.traint is not cnour'.h" (p. t39S) and it relied heavily on tlio
Commi.':sion'G findinj^j colidly supported by clear proof, that the mercer
there created a real likelihood of reciprocal buyitic.
In the proocnt case, on the other linnd, the district court found ex-
pressly to tlie contrary. It ruled (mimeof;raphod opinion kT-Ud) that "the
substantial, credible evidence demonstrates that reciprocity and- recipn.icity
effeci. is not likely to occur, even if the nercer v/ere to create the oi)])or-
tunity for reciprocal dealing, particularly in vie;.* of ITT's anti-reciprocity
policy, implemented by the ■'.■rithholdlns of purchasing and saJLes data and the
profit center organization of IT'J.'" and that "the government has not sustained
its burden of establishing either that the merger \vill create an opportunity
for reciprocal dealing through a market structure conducive to such dealing,
or that reciprocal dealing in fact is likely to occur even if the merger
were to create an opportunity for it." It reached these conclusions on the
basis of a comprehensive and careful analysis of the evidence, and its
findings vrill be extremely difficult to overturn. Oar best chance v/ill be
to argue that the findings rest upon an erroneous concept of vhat kind of
shovdng the govern.^ent must maJie to prove the "probability of reciprocal
buying," and that the court has imposed too strict a standard upon us. The
prob].em, of coujrse, is that the proof vre urge as sufficient may strike the
Supre;ne Co^ai't as shovring only a mere possibility, and not a probability,
that the merger v.-ill substantially lessen competition. Although there is
some support for our position in the recent VJIiite Consolidated decision
(N.D. Ohio, February 2k, 197l)--va.th its acceptance of the theory that a
merger leading to "reciprocity effect" may involve a significant change in
market structure --that decision \ia.s on an application for a preliminary in-
jui^ction, and the court did not have before it the detailed record of the
present case.
2, Antitrust also proposes that we stress the advantages that would
accrue to Grinnell as a result of ITScT's o^/nership of Hartford Fire Insur-
ance. The use of automatic sprinkler systems reduces fire insurance
prem.iiims; insurance brol-vers vdll point this fact out to their customers;
and Hartford's brokers, who presumably are avrare that Hartford is a m.ember
of the same corpora.te family as Grinnell, are hardly likely to be insensi-
tive to the desirability of encouraging purchases from the latter. Moreover,
insurance brokers a.pparently are an excellent source of business leads for
sprinkler installation firms, and ITScT's ownership of both Hartford and
Grinnell vdll give the latter an entree not availa,ble to others in the
business.
T\\e district court rejected this theoi^y because of findings which, in
its view, eliminated the factual basic tfierefor. Here, too, we vdll have
a hard time overturning the findings. More importsjitly, this theory is
less attractive than the reciprocity approach for tv.'O reasons: (l) If vre
won on thi:-, ground, it v/ould have no impact beyond this case and vrauld not
furnish an effective tool for challenging other conglomerate mergers. (2)
It seems comev,'hat anomalous to be attacking the Grinnell acquisition because
(56)
4B. DAUIEL FRIEDMAN MEMORANDUM^ MARCH 15, 19-71
- 3 - ^
of the allcr.edly liarmful cfxcctG that flovr from IT.vT's owierGhip of Hart-
ford, v;hcn in ano1,hcr case v/c are siinulbancoucly cliallencing ITiv.T' s
acquinitloii of that company.
3, Antitrust strcGneo the cimuLlativc effects of recipz-ocity, the
fire incuranco company interlock and varioiis other iL3..i.cr',ed competitive
advantar^cs of the mer;^er for Grinncllj from v;!iich it concludcr; tliat the
mercor i^ likely to entrench Grinnell'a dominant position in the auto-
matic sprinkler buninesG. It contends that such enti-enchmcnt condemns
the mcrj^er under the rationale of Federal Trade CorrorlGsion v. Pi'octer ft
Gamble Co . , 386 U.S. 568. The findings of the district court, hov/ever,
seriously undercut this theory. In Procter & Gair.ble vrc had the advantage
of Co:n;nission findings that established the factuaJ. foundation for the
entreiichment theory, and it v.'as not difficult for the Supreme Court to
accept those findings and then to conclude that they supported the agency's
conclusion of probable anticompetitive effect. In the present case, on
the other hand, the district court's findings lead to the opposite con-
clusion. Particularly in dealing v/ith the entrenchment theoi-y, I think
that our argument seems particularly vulnerable to the charge that we have
shovm only the possibility, but not the probability that the merger i-ri.ll
cause competitive injury.
The district court's reliance upon its conclusion that Grinnell is
not the dominant company in its industry nay be vulnerable. In the first
place, Grinnell is the largest firm, v;ith 20-2^ percent of the market, and
if it is not the dominant firm (although I think it is), it certainly is a
dominant one, and that should be enough. In any event, as long as the
accfuired firm is important and significant in the market, the entrenchment
of its position due to a merger should suffice to condemn the merger under
Section 7, vrhether or not it is considered dominant. But even if the
district court is ivrong in its dominance ruling, we still have to overcome
the court's further finding that in any event the merger would not entrench
Grinnell in the sprinkler market, and that is where our real problem on this
branch of the case -l^d.ll be.
h. Finally, there is the theory that this merger is invalid because
it furthers a trend tov;ard econorrdc concentration in the economy as a v^hole.
(a). The first facet of this theory is that amended Section 7 was in-
tended to prohibit any merger that produces a significant increase in such
concentration. ITnis argument — which I understand /vntitrust does npt now
propose, to ma}-cc--relies on the legislative history of tlie 19^0 amencL-;;e;its
to Section 7, in which Congress frequently indicated its concern over the
increase of concentration in /imerican industry. Tne difficulty is that
the method Congress chose to deal vri.th the problem was to strengthen the
prohibitions of Section 7, but not to change its basic focus. Congress
apj)arcntly did not abandon the traditional approach to mergers v;liich empha-
sized tlie impact of tlie acquisition u^wn competition in the particilar geo-
graphic and product markets involved; it merely provided a more flexible
definition of tliosc markets, in order to strike at the general -trend toward
(57)
4g. DANTEL FRIEDMAN MEMORANDUM. MABCH 15, 1972
- It -
conccntraLion by nrohibitliir": all merr.cT'^ that have the })rorjf;r.i.i)ed ajiti-
coiiiiJcLitJ.ve erfccl, "in ivv/ line of coircnorcc in any Ecction of tho country."
AnLitruat r.up:ror>tG (Memo. )i, lO) that cincc in United States v. Pti^ir.t
Browinr, Co., 3^^ U.S. 'jhb , Llie Courb 'icld that the t'overruT.ent i;iay establii-.h
a violav.ion of ooctlon 7 by "introduc[i!!f.J evidence vaiich ::hows, that a:: a
rcnalt of a rncrr.or Cf^-nyctltion may be r.nhrJ.antially leG;;enod th'rouf^houl. l.lic
counl.ry" (p. 'jhi}) , 1.1- can .oiraj.lai'ly establish a vic^lation .by riliovdnji a
Cencralized Icc^cnini^ of conpcbition in the econoiiiy as a whole vdthout
focuslnfj on any particiilar px'oduct. In Pabst, however, the district coioi'L
had I'eco^'-.nizcd that the continental United Sttites \ias a relevant hiarket;
and we introduced evidence chov.'ing a Eignificant trend tov/ard increases in
the level of concentration in th.e beer business on a nationaJ. basis, v/hich
the Pabst-Blatz meri^er significantly furthered. It is quite another matter,
however, to conclude that because there has been a general increase in
concentration iri the economy as a v:hole, a merger of two large firms which
increases that concentration--although necessarily only slightly- -produces
the anticoni^-otitive effects that Section 7 condemns. Tnis theory leads to
the conclusion that any mergor--whethcr conglomerate or not--violates Section
7 if the companies are large enougli that their combination fairly can be said
to be a significant step tov/ard furthering concentration in the v;hole economy.
Perhaps Congress may enact legislation taking that approach to mergers, but
it is difficiilt to conclude that it d3.d so in Section 7 of the Clayton Act.
This theory rJ-so wovild require the Court to ignore its frequent statements
that, in order to deterrrinc the anticompetitive effect of a merger, the
relevs.nt geographic and product markets must first be ascertained.
(b). A second aspect of the aggregate concentration theory is the one
Antitrust seeraingly now urges: that because there has been an increase in
concentration v^hich in recent years has been mainly the result of conglomerate
mergers, a lesser degree of proof of traditional antitrust criteria shoiLLd
suffice to establish illegality in conglomerate merger cases. Under this
analysis, Antiti'ust argues that the evidence it cites to shovr the entrench-
ment of Grinnell, although perhaps not sufficient to establish illegaliity if
a nonconglomerate had been the acquirer, is enough where the acquirer is a
large conglomerate. I do not understand the basis of this analysis. Tlie
anticompetitive consequences that stem from IT&T's status as a conglom.erate
exist because of the vrldespread nature of IT&T's operations and the relation-
ship betv/cen those operations and Grinnell' s business. This relationship
would be the sajae if IT&T v/ere the only conglomerate. The fact that there
arc many other conglomerates that also liave m.ade acquisitions that allegedly
have v/eokened the play of free competition in many industries is not relevant
to determinin;3 what the competitive effect of this merger is likely to be.
It is difficult to understand v/]iy lessor proof should suffice in a particular
case merely because elsewhere in tlie economy similar mergers have taken place.
To rccapltxLLatc: TTiis is an oxtrcmoly difficull. case, ;md our clianeo:; ~\
:;)-tlielo::s, 1 think we have |
of vn.unin;'; in the Supiemc Coin-t seem minimal. Mcv
(58)
4B. DANIEL FRIEDMAN MEMORAWUM, MARCH 15, 1971
- 5 -
no jjracllco-l' clioJ.cc but to appeal. Qiir beet appi'oach is the reciprocity
theory, and even tliat nay foimder on the particxolar factn. It hoD.ds the
best prominCj liovrcver, and if accepted voiild pro\ri.dc a powerful tool for
dcalin,^: vd th oth.cr conr;l<5!;ic):-ate acquisitions. It is impossible to evaluate
the strcnfitl! of our various theories vrithout a detailed study of the lcn{^t>iy
record; pcrliaps v/licn v;c va*lte the brief on the merits, some of our other
approaches may turn out to be stron,';er than they seem at present. At this
stage, however, all v/e can really do is outline our theories, and avoid
arguments that vrill not v/ithstand probing analysis. We shouJ.d talie a
bold and broad aj)proach that niniiiiizes challenges to the findings of and
disagreements vrith the di.strict court on minor aspects of its decision,
and moulds tlie issues in terms that \d.ll avoid the appearance of seeking
a trial de novo.
M. ■
Daniel M. Friedman
(59)
4C. A. RAYMOND RANDOLPH, JR., MEMORANDUM, MARCH 25, 1971
.iTl-D SIAll.S CON') ■ 'Ml.Nr iJ-.l'AR'l-MI.XJ- OF ji;si!C:i;
Memorandum
TO : DMi-^ i^A'e: 3/25/71
ARR
subject: supplemental memorandum from antitrust
Now that Antitrust has rdterated its
strong recommendation that we appeal^ we doubtless
have to appeal. On that much everyone agrees .
Everyone also agrees that on appeal we should
attacTc the court's holdings v/ith respect to dominance
and reciprocity^ although I do not think that either
one of us shares Antitrust 's confidence that the
court's findings of fact v/ill not be a substantial
problem because v;e need only challenge the infer-
ences drawn from those findings. And finally every-
one agrees that our chanccvtf of prevailing on these
arguments is mighty slim.
But unanimity ends when we get to the
business about the trend toward concentration, which
is discussed on page 3. Antitrust answers none of
our questions and meets none of our criticism about
the relevance of that trend. V7e are first told
th&t the ITT-Grinnell merger will scare smaller
sprinkler firms into merging with other large com-
panies. But even assuming this shows that an
anticompetitive effect will result (whatever hap-
pened to the desire to encourage foothold acquisi-
tions?) _, (a) if the district court was right tliat
the ITT-Grinnell merger will not have any signifi-
KS3?iKE cant anti-competitive effects it is Irrd
to see how we can show that the other firms will
be scared into merging, and (b) what has this got
to do with the trend toward concentration in the
economy as a whole?
(60)
4C. A. RAYMOND RANDOLPH, JR., MEMORAEDUM, MARCH 25, 1971
The rest of the second paragraph of page
3 is, to put it bluntly J, mumbo-jumbo. Now it seems
•the idea is that the trend is relevant only to ac-
quisitions by large congomcrates of leading firms.
Ergo, tliere should be no concern that foothold mergers
will be prevented. I am at a complete loss to under-
stand why, if the trend is relevant at all, it is rele-
vant only to the former situation. In any event, the
whole point of my memorandum and yours was that Anti-
trust had failed to show how the trend toward concen-
tration is relevant at all. We still do not know.
Where do we go from here? I would strongly
urge that the Dean, when he authorizes appeal, limit
this to the dominance and reciprocity holdings of the
district court. If our case is v/eak on those issues,
we will not even be able to put up a respectable front
before the Court if we taint and obfuscate the rest of
the case by attempting to work in some full-blown 'theory"
about the trend toward concentration.
Incidentally it seems quite strange for
T^ntitrust to suggest (on page 4) that the ITTHSX2KKM2S
Canteen case could be considered by the Court v/ith this
one- It is my understanding that Dr. Mueller's testi-
mony was excluded in that case on:? the ground of incom-
pet£S:ance because of the FTC's refusal to release under-
lying data. The instant case has enough problems of its
own without introducing that can of worms into it.
A. R. RANDOLPH Jr.
(61)
I
f 4D. DANIEL FRIEDMAN MEMORANDUM. MARCH 26, 1971
-yuc
C>rFICE OF
Tiie SoiiciTOH Gfnckal
I V-^v J'-
.;4 /
V
Like Pa}' Randolplij I don't find Ant iirtts-t ' s
memo nart icnJ a r ly i 1 1 nmina t ing . I ai^ree
that you shoiild authorize anneal. But the
nrecise scone an^' form of our ?rrvurients
must a\vait the j ur isdi ct iojia 1 statesient;
v/c Siiould not at term t to foreclose rial: in"-
auy argiinents tliat either hold out sor.ie
nrospect of success or^ even if th.ey real ly
do not J present a theory upon v/hich the
Funremc Court should rule--if only io open
the ^vfiY for 1 c?" i s lat ion .
DMF
(62)
4E. ERWIN GRISWOLD APPEAL AUTHORIZATION, MARCH 26, 1971
Retyped from indistinct original
File HES
60-149-037-1
Office of
The Solicitor General
March 26, 1971
Re: United States v. International
Telephone and Telegraph Corporation
filing date: April 20, 1971 (3/20/71 order
Justice Harlan)
DIRECT APPEAL AUTHORIZED.
ERWIN N. GRISWOLD
Solicitor General
I think this is a very hard case, but it is an
in-iportaiit one and Antitrust wants to go ahead,
and it is in the public interest, I think, that we
should learn more about what the law is in this
area. ENG.
]
Retyped from indistinct original
(63)
4E. ERWIN GEISWOLD APPEAL AUTHORIZATION, MARCH 26, 1971
OTFICE OV
The Soi.iciTO!< Gkheoal
>■■ •■»...
".V .
■'^^■,;■.-■■■
IV.'.'"-"'
/^J
March (T^, 1971
Re: United States v. International
Telephone and Telegraph Corporation
ij.^.A^-'^G^^^-^Y' ^px:5:t)
DIRECT APPEAL AUTHORIZED.
0
^^-^-er^- /
-ti^
/
ERWIN N. GRISWOLD
Solicitor General
(64)
5. After the Pi-esident's telephone call of April 19, 1971, to
Kleindienst ordering him to drop the Grinnell appeal, Kleindicnst
met, in his office, with McLaren and the Solicitor General and
requested the Solicitor General to apply for an extension. McLaren
had no objection to the application for an additional extension of time.
Page
5a Ervin N. Griswold testimony, 2 KCH 380, 388 66
5b Richard W. McLaren testimony, 2 KCH 327, 328* 68
5c Richard G. Kleindienst testimony, 2 KCH 289, 292, 3 KCH 1680. 70
(65)
5A. ERWIN GRISWOLD TESTIMONY^ MARCH 8, 1972, 2 KCH 380, 388
380
Seuator Kennedy. Now, at some time 3'ou had a call from eillicr
Mr. McLaren or Mr. Walsh about the ISth, that is right, April IS?
^ Mr. Griswold. No, I never had a call from either. I understand
now that the 18th was a Sunday, so this must have been on the 19th.
Senator Kenkedt. And your secretary told you that the Deputy
Attorney General want-ed you down in his office?
jMr. Griswold. That is right.
. Senator KEN^EDT. Could you tell us about that meeting?
Mr. Griswold. I think I have summarized it quite completely in
the statement I have ah-eady filed.
Senator Kexnedt. There was no one else there?
Mr. Griswold. No one else was there. It didn't last more than 5
minutes, perhaps less.
Senator Kexxedt. And as I understand from your memorandum —
could you repeat for us what you believe to be the reasons for seeking
the delay in the filing of the jurisdictional statement?
Mr. Griswold. The basic reason was that the Deputy Attorney
General wanted it. And I xmderstood the underlying reason was, the
letter which he had received from Mr. Walsh which requested it,
which was summarized, but which letter I didn't see — I didn't ask to
see, it wasn't withheld from me — it was simply, as I recall it, it was on
the deiik or the side, in front or beside the Deputy Attorney General
as he was talkiug to me, and he pointed to it — but the substance was
that there were some matters here which ought to receive further
consideration.
Senator Keknedt. There is nothing further that you can add about
that conversation?
Mr. Griswold. No.
Senator Kennedy. He just said that there are other matters that
have been included in this letter that deserve further consideraiiou?
Mr. Griswold. No; as I understand it, it was matters relating to
whether we should proceed by Utigation on conglomerate mergers.
Senator Kennedy. The materials we received from the Department
show the SohcitoF General's memorandum up to March 26, 1971. Can
vou srive us anv idea what, if anj'thing, happened between March
26 and April 19?
Mr. Griswold. The jurisdictional — let me start over again, Senator.
We had 'probably 30 or 40 other cases in my office movin" through
during that time. Once the appeal was authorized, word would be scut
to the Antitrust Di^nsion, and they v.ould be requested to make a draft
of the juri-^dictional statement. The jurisdictional statement would be
prp]iared, it would come to my office, and it would be worked over in
detail by one of my younger staff members, and then re\'iewed thor-
oughly and carefully by my senior staff member, and then would come
to me, and then would go to the printer.
And as I recall it, it went to the printer on Thursdo}' or Friday be-
fore April 19, and was due back on the afternoon of April 19 in printed
form.
Senator Kennedy. You have suppHed materials, or the Department
has. a series of memoranda, the following documents — you arc
familiar with those items here? Are you familiar with the letter from
Mr. AVilson that was sent to the committee?
Mr. Griswold. 1 don't know what you are referring to, Senator.
(66)
&4. ERWIN GRISWOLD TESTIMONY, MARCH 8, 1972, KCH 380, 388
388
Senator Kennedy. Mr. Solicitor, lias there been an}'' other occnbion.
in the times that 3-ou have served under this or previous administra-
tions when you have been dii-ected by the Deputy Attorney General
to seek a delay 9 days after the time expired?
Mr. Griswold. No — if you say 9 days, the time hadn't e.xpired,
Senator, and the rule Baj's that you are supposed to ajiply not less
than 10 days before the time e.xpires, but makes it perfectly ])l!ua
that you can apply within that period, but you have got to show some
reason. And I don't recall any case where we did it on the next to the
last day.
On the other hand, it is not at all unprecedented that we do make
applications within the 10-day period for one reason or another.
Senator Kennedy. But have you made them at the direction of
the Deputy Attorney General any time?
rMr. Griswold. I don't like to accept your word "direction." This
was at the request of the Deputy Attorney General. I camiot now
name you some. I have had many conversations M-ith the Deputy
Attorney General about cases and have frequently heard people,
usuaUj' other agencies of the Government, who have expressed an
interest or concern, and I have delayed my action until I heard them.
Ordinarily, however, that would not require any appHcation for an
extension of time, because we had enough time. I think this one is
Lthe only one that I know of within 1 day, and as far as I can recall,
within a 10-day period.
" Senator Kennedy. Do you know Mr. Walsh at all, Dean?
Mr. Griswold. Yes, I have know Judge Walsh at least since the
time he was a judge, and then as Deputy Attorney General, and since.
Senator Kennedy. But you never had occasion to talk with him
about this case?
Mr. Griswold. Never whatever about this case, except on Monday
afternoon of this week he called me on the telephone and asked me
what I said in that statement. But he didn't in any sense complain
about it, he simply wanted to know what it was bo that he could
respond to questions that were coming to him.
I read him, over the telephone, the paragraph relating to him. And
he thanked me. And I did talk with him to that extent on Monday
of this week. Otherwise I have never talked with him about tliis case.
Senator Kennedy. I want to thank you for coming up l-.cre this
afternoon and being so helpful.
^ir. Griswold. Thank you, Senator.
Senator Kennedy. You have certainly been very forthright and
candid with us, and I want to express my ovm personal appreciation to
you. It is nice to see you again.
Mr. Griswold. Thank j-ou, Senator.
Senator Hruska. Dean Griswold, the 10-day rule has been men-
tioned often. That rule is simjily this, is it not, that if ther.^ is any
request for a postponement of a filing or to meet a deadline, the requ(?-t
for such postponement should bo made at least 10 daj-s prior to the date
that is sought for extension?
Mr. Griswold. That is right, Senator.
Senator Kruska. So that is the general rule. However, the Supreme
Court does say, if it is within those 10 days, for good reason, \\ e will
still allow the postponement.
(67)
5B. RICHARD m LAREN TESTIMONY, MARCH 8, 1972, 2 KCH 327, 328
327
Solicitor General and lus staff liad some reluctance about the appeal,
any way.
This %va3 a request merely for an extension of time. Tliat did not
affect the ultimate disposition of the case because it Mould not have
been arg;ued before that term, and as I think you know, the appeal
was ]n>rfected subsequently, and McLaren said I see no harm in it,
and 1 then calleil the Solicitor and he came in.
Senator Kennedy. Now, can you tell us when you read the letter?
Did you read Mr. Walsh's letter?
Mr. Kleindienst. Well, I think I read the letter comprchensivelv
and tlmrouzhly for the first time during these hearings.
Senator Ke.nnedy. So, at the time that you made your decision,
it was really based on the representations that were made by Mr. Mc-
Laren as to what the substance of the letter was?
Mr. Kleindienst. Kight, and also his characterization and repre-
sentation as with respect to what the issue was in the memorandum of
law, and the letter.
Senator Ke.nnedy. Well, now, having read the letter in coniiection
with these hearings here, what do you think was meant by Mr. Walsh
when he said, "It is our understanding that the Secretary of the
Trciisury, the Secretary of Commerce, and the Cliairman of the
President's Council of Economic Ad\"isers all have some views with
respect to the question under consideration."?
^Ir. Kleindienst. Well, I do not like to speculate as to what Judge
Walsh thought.
Senator Kennedy. Well, j-ou do not — did 3-ou have any reason to
believe that they had views?"
Mr. Kleindienst. No. I did not know.
Senator Kennedy. Were j'ou at any time in contact with the Secre-
tary of the Treasury, or the Secretary of Commerce, or the Chairman
of the President's Council of Economic Advisers about this case?
Mr. Klei^jdienst. No. No.
Senator Kennedy. About antitrust policy generally?
Mr. Kleindienst. No. Well, other than — I never had a conference
with Secretary Stans, or the Secretary of the Treasury, about the anti-
trust policy. I know that just based upon the general statements, public
and otherwise, that Secretary Stans had some very sharp differences
with the antitrust policy of the Department of Justice, as enunciated
by the Attorney General, and effectuated by the Assistant Attorney
General McLaren, and there were a lot of other people who sharply
disagreed \vith Judge McLaren's policy, as enunciated by the Attorney
General, and supported by the Attome}" General, myself, and the
President of the United States.
I might have the order •wTong.
Mr. AIcLaren. May I add a word, Senator Kennedy?
Senator Kennedy. Yes.
Mr. McLaren. I think it is fair to say that at the time we did have
underway an overall antitrust kind ofreview going on; and I know
that there were meetings going on at that time.
There was an interagency thing. I was one of the principals on it.
I do not know w-hether or not there was any connection between this
letter of Walsh's, as to which Mr. Kleindienst is perfectly right, I did
disagree.
(68)
SB. RICHARD MQ LAREN TESTIMONY^ MARCH 8, 1971, 2 KCH 227,328
328
For example, he saul in there, as I recall, that our policy was sloppinir
])erfcctly normal, legitimate inerfjers that had nothing to do wiili
effects on competition, und I strenuously argue with that.
Other parts of his legal pitch I very much disagree A\'ilh. But, I —
it subsequent!}' developed that there was no connection ])etween what
lie was saying and the — and no connection ever developed between
■what he was saying and the antitrust review we then had underway.
Senator Kennedy. Well, Mr. McLaren, after reading the letter,
particularly the part which reads —
It is our understanding that the Secretary of the Treasury, the Secretary of
Commerce, and the Chairman of the President's Council of Economic Advisers
all have some views with resiject to the question under consideration.
— do you remember mentioning that to Mr. Kleindienst when you
gave him your summation of the letter?
Mr. McLaren. I do not specifically remember it. Senator, but tho.^e
agencies all had representatives on this group that was reviewing
antitrust policj'' overall.
^ Senator Kennedy. And actually, some of those — wasn't that
primarily the reason for the extension, as stated in the Solicitor
General's presentation?
Mr. McL.\.REN. That is the reason I did not opj^ose it, If we were
talking about a straight legal i)roposition, as to whether or not lliey
should have an extension, I would — I would not have agreed wiiii
that. But, for a kind of a i)olicy review thing, I was interested to he;ir
what developed. Mj" information at that time was that he was — or niy
feeling at that time was that he was wrong.
I thought that Dr. McCracken, for examjile, was very much in
favor of our antitrust policy, and I haAe never heard, although we
had differences on the S])ecific5, I never heard that Secretary Staus
or the TreasurA- jieople were against it, and I subsequently tujued
out to be right. \\'e had the extension, but we went ahead and filed
the brief.
Senator Kennedy. Was this the first time that you thought tliat the
Secretaiy of Treu^urj-, and of Commerce, and the Council of Economic
Advisers, wouUl have views on this particular case?
Mr. McLaren. Well, we hail been working on this project for some
length of tiute.
Senator Kennedy. Well, so that did not come as anythhig very
new to you, did it? ~
Mr. NfcLAKEN. The new thhig was simply. Senator, Mr. Walsh's
suggestion m the thing, and \ve were ui) against a filmg date, and we
simply allowed time to ex])lore that. As it turned out, there was
nothing to it.
Senator Kennedy*. Can j^ou tell us what you found particularly
persuasive about the Walsh letter that would have been the ba^-is
for
Mr. McL.\REN. I say again, I strongly- objected and was not ])er-
suaded as to the legal aspects of it.
t However, as to the, particularly finding out that Mr. Klehidi;-n-i
was not i)articu!arly persuaded or had no \-iews on the thing, 1 liad
no particular objection to an additional extension of time. As I said
before, exte;\sions of thne in cases like this are not novel or »uuisu:d.
Senator Kennedy. So, we have a^ituation here where Mr. Mi.l.:ireii
disagreed with the letter, and Mr. Kleindienst, you had not read it.
(69)
It of
cnce""!
I file I
•tell J
5C. RICHARD KLEINDIENST TESTIMONY, MARCH 7 AND APRIL 27, 1971, 2 KCH
289, 292, 3 KCH, 1680
289
Senator Kennedy. Coukl you tell us the conversation on tlie 19th?
Willi t dill that involve?
Mr. IvLEiNuiENsT. Well, it took about, I would imagine it would
liave taken a few seconds unless I would have talked to him about
some judicial caiulidale. Let's assume I did not talk to him about a
jutlic'ial (uudiilate. It would iiave just been a matter of a few seconds
Senator Kennedy.
Senator Kennedy. And this conversation with Mr. Walsh was about
the — why did you feel you had to call him back?
Mr. Kleindienst. 1 think as a courtesy. 1 didn't have to.
Senator Kennedy, lie had telephoned you about this ca^^e and
Mr. Kleindienst. Mr. Walsli and 1 are very close friends and
have developed a very close friendship over the 3 years as a result of
our work together in the judicial proarram. We had the confercn
with ^Fr. McLaren and the Solicitor. The Solicitor w^s asked to
an extension. He said that he would and J merely called him to
liim what the decision was. 1 guess it was a courtesy more than any-
thing else. I didn't have to.
Senator Kennedy. At anv time did vou talk to Mr. Rahatvn about
this?
Mr. Kleindienst. No. sir..
Senator Kennedy. You didn't mention his name during the
course
Mr. Kleindienst. Xo, sir. I hadn't met personally Mr. Rohatjii
at that time. At about that time, I would have probably — at or
about t'nat time, Mr. Rohatyn would have called me to come in and
e me on the 20th, the next day.
Senator Kennedy. Could you tell us, when Mr. Walsh called,
tlid you tell Mr. ^IcLaren about that telephone call?
Mr. Kleindienst. Did I?
Senator Kennedy. Yes, or did you
Mr. Klei.vdienst; I don't know if I did nor not. Senator Kennedy,
because the call would have indicated that he was going to deliver
the letter and the memorandum of law to me by a young man in his
office. The time was rather short, as I think you can tell. The 16th — the
20th was the last day. I don't know if I did or not. I know when the
young man came to my office and handed me the materials, I didn't
even read them. I called Mr. Comegys or I called for Mr. McLaren
and he wasn't there and Mr. Comegys came up and I handed the
materials to the young man in his presence.
Senator Kennedy. When was the final time for the
Mr. Kleindienst. I believe the 20th was the last day.
Senator Kennedy. So this was on the 16th- and
Mr. Kleindien.st. A Friday.
Senator Kennedy. You have no recollection of talking to Mr.
McLaren about either the telephone conv^ersation or about the letter?
Mr. Kleindienst. No, I don't. Senator. But I could have.
Senator, I would like to say something here, if I may. These events
occurred a year ago. This wasn't the only matter that 1 had. It
didn't seem to me to be of any particular consequence.
Senator Kennedy. Wiich didn't?
Mr. Kleindienst. Well, these; I mean that there wasn't any
particular significance to these matters other than just routine
(70)
SC. RICHARD KLEINDIENST TESTIMONY^ MARCH 7 AW APRIL 27, 1971, 2 KCH
289, 292, 3 KCH 1680.
292
Mr. Kleindiexst. Geo, I think you just have to draw your o\m
conchisions, Senator.
Senator Kexn-edy. What conclusions do j'^ou draw from them, just
from that language?
Mr. Kleixdienst. You mean if I accept this language for what
apparenth" it says?
Senator Kennedy. You were accepting language in the letter.
Mr. Kleindienst. I didn't read it when I got it.
Senator Kennedy. Oh, you didn't read this letter, cither?
Mr. Kleindienst. No, sir, when it was delivered to me. I asked
Mr. Coineg\"s to come up and I handed the letter and the mcmoraiulum
of law to him and told him that this came from Judge Walsh.
Senator Kennedy. Well, now, let me get it straight. Wiih Mr.
Griswold and your meeting with Mr. Griswold, what did you— the
-action that Mr. Griswold look in behalf of the Government, was that
on his initiative?
Mr. Kleindienst. No, as I have testified. Senator Kennetly,
Friday the 16th, I delivered the letter, I handed him the letter and tlie
memorandum of law with the young man who delivered it to me in
my oflice. It was 3 or 4 in the afternoon — I don't know. 2, 3, 4. .5.
Then on Monday afternoon, Mr. McLaren contacted me a!ul .•^aid.
I have gone over this request of Judge Walsh and I would like to talk
to you about it. He came up. We discussed it.
Senator Kennedy. You discussed the letter?
Mr. Kleindienst. Well, we discussed — I don't even think I read
the letter there. We discussed the request contained in ilie letter.
Senator. We didn't pick it apart like we are doing now, analyze wliat
Judge Walsh thought or what we thought we meant. What we were
dealing with was the request contained in the letter and liiat is to
say iin extension of time in the Griuncll case. Mr. McLaren said, I
don't agree with the contention made here.
Senator Kennedy. I am sorry, he said what?
Mr. Kleiv^dienst. He said, I don't agi"ec with tlie position take:! in
Judge Walsh's letter.
But it seems to me inasmuch as no harm can be done by giving the
cxle.nsion, since the case could not he heard in that term of the court,
lie had no objection if we requested the extension.
At that point, I called the Solicitor General and he came down to
my ofTue while Judge McLaren was there and we asked liim if he would
woidd ask for the exiension. And he said that he wovdd, and he did.
^ Senator Kennedy. You called him, as I understand ii?
Mr. Kleindien'.st. Yes, I did. Wliilc the Judge was in ni}- oflice.
Senator Kennedy. Did vou ask him for the extension, or did Mr.
McLaren?
Mr. Kleindien.st. I think it was a joint request.
Senator Kennedy. Well, someone lias to make the request.
Mr. Kleindienst. Well, let's saj- 1 did,
- Senator Ivennedy. Well, did you? That is what I want to iind out.
Mr. Kleindienst. Weil, I don't recall, Senator. The Deaii lecollecis
that I did and it is so said in his statement. 1 don't think it makes any
difference. The request came jointh- from me and Judge McLaren — we
weren't both talking at the same time — to have him do ihi-. and he
did.
41-566 O - 74 -
(71)
5C. RICHARD KLEINDIENST TESTIMONY, MARCH 7 AW APRIL 27, 1971, 2 KCH
289:, 292, 3 KCH 1680
16S0
Senator Ivekxedv^ W1i\ ? Can you help me
The Chatrm.'^x. Yourtime is up.
Senator Ivexnxdt. Just on this final point, just a continuation, can
you help us on ■why, or ■whom you talked to in the morning, that you
believed it ■was going to be negative and ■what transpired during
that period of time that turned it around to be positive as Judge
Walsh said ?
Mr. Klein-diexst. I think I -^ould have talked to Judge McLaren.
Senator Kexxedv. He would have been negative or positive ?
Mr. Kleixdiexst. Yes ; he would have gone negative.
Senator Kexxedt. He would have been negative?
Mr. Kleixdiexst. Yes, sir.
Senator Kexxedt. "Wliom did you talk to that made it positive?
Mr. Ku.TxniEST. Later on I believe my testimony is — my recollec-
tion is I had a meeting with the Solicitor General and Judge McL;^.ren.
I know I at least had a meeting with the Solicitor General in my
office alx)ut it because without such a meeting and without his assent
the extension of time would not have been filed.
Senator PZexxedt. Well, if McLaren was negative and the Solicitor
was neutral on it, how did the decision come out for the 30-day
extension ?
Mr. Kleixdtest. How did it com.e out positive ? . '
Senator Kexxedy. Yes.
Mr. Kleixdiexst. Well, McLaren had a pretty rigid attitude about
all the ITT cases and all of the attempts one way or another to. let's
say, interfere with his prosecution of these cases. I believe that the
reason why the extension was granted, number one, we all three knew.
Judge Walsh very well, that the case was not going to be argued that
term in tlic .Supreme Court, that all they were asking for was a :^n-day
delay in the filing of our jurisdictional statement and that could have
no prejudice one way or another upon the prosecution of the case. .So
it wouldn't have been a difficult or an unreasonable or an illogical
thing to say. All right, let's give them the extension of time."'
Senator Kexxedy. Of course, those facts were in Judge Walsh's
letter v,\ the inorning : were they not ?
^Ir. Ki.KrxnirxsT. Those facts about what ?
Senator Ki^vXedy. The fact that the 30-day extension was going
on
- Mr. Ki.rTXP^iEXPT. But T can assure you. Senator Kennedy. T had not
talked to Di'an Griswnid when I had my telephone coiiver.^aiion with
Judge Walsh that morning.
Senator Kexxedt. And lie was negative?
Mr. Kleixdiexst. AMio I
^ Senato'- Kexxedt. .Judge Walsli — I moan. ]SIcLaren was negative?
Mr. Kleixdiexst. I think, yes: I think he was. You know, if it was
a substantive device with i-espect to these cases, he was absolutely ne^'n-
tive. VHien it got down to be a pj'ocedurrd .SO-day extension of time
that 'ould not have any substantive efl'ect on the issues \\\ the case,
then I guess he is neutral.
Senator Kexxedt. T was just trying to figure out who wr.s pos-f ive.
yiv. Kleixdiexst. Well. I was positive about giving them tl^e pro-
cedural 3i">-day period of tim.e inasmuch as it could not atlect the out-
come of the cases and I think thnt was the attitude taken by Dean
Griswold.
(72)
6. On Ji.ip.e 17, 1971, McLax-en recomnicndecl to Klcindienst
tliat the ITT suits be nettled, Kleindienst approved the proposed
so LLlcment by writing: "Approved, 6/17/71. RGK. " In affixing his
approval, Kleindienst relied on the expertise of McLaren.
Page
6a Testimony of Richard W. McLaren 2 KCH 110-113 74
6b Testimony of Richard G. Kleindienst 3 KCH 1732-1733. . 78
(73)
6A. RICMhD MC LAREN TESTIMONY, MARCH 2, 1972, 2 KCH 110-13
110
to the extent that ITT and its subsidiaries are able to finance foreign oijer.itious
through foreign borrowings in lieu of expatriatLng funds or reducing the flow of
funds from foieign subsidiaries to the United States.
" Hartford is obviously not a major direct factor in ITT's overall favorable
balance of payments posture. Hartford's impact is indirect in terms of the balance
eheet strength it adds to ITT. To the extent that the divestiture of Hartford
affects ITT and its subsidiaries' ability to get credit on favorable terms there
would be a longer-term impact upon ITT as an earner of foreign exchange.
A final factor should be mentioned. Several hundred million dollars of ITT stock
is held by foreigners. The inciease or decrease in such holdings, while representing
short^t€rm investment swings, nevertheless affects the balance .of payments. If
ITT is a less attractive investment, without Hartford, there could be soine balance
of payments impact from liquidation of foreign holdings.
In addition to Hartford, the Justice Depaitraent is also seeking, thiough court
action, the divestiture bv ITT of Canteen Corporation and Grinuell Corporation,
both acquired in 1969. On December 31, 1970, the U.S. District Court rendered
a decision m favor of ITT in the GrinneU litigation; this decision is being appealed
by the Justice Department. The Canteen litigation has not yet come to trial.
In 1970 Grinnell earned SIS million after taxes and Canteen earned SIO million
after taxes. With Hartford, the three companies accounted for 12% of consolidated
revenues of ITT and 337c of consolidated net income. While it is not possible
here to comment with definition as to the effect on ITT of divestiture of these
two companies, including their value as separate companies, the effect on ITT's
capitalisation, etc., it is reasonable to assume that divestiture would have some
impact upon the investment community's view of ITT and the predictability of
its earnings. Most likely it would result in further concern as to ITT's ability to
manage consist<>nt earnings increases and such concern would probably be reflected
in a diminished m\iltiple on the common stock.
CONCLUSION
In conclusion, I think the following statements can be made:
1. Hartford and ITT as separate companies would be valued in the market
place at approximately S54 per present ITT .share versus S64 ^/i for the combined
company on 5/14/71. This represents a lC9o diminution in market value, or
almost SI. 2 billion.
2. A ."spinoff to ITT stockholders would appear to be the only feasible way of
divesting Hartford. However, because of the dividend requirements of the Scries X
Preferred, the climinaiiun of the dividend from Hartford to ITT would jirobably
have a meaningful impact upon the ITT parent company and its liquidity. A
logical resttlt would be a cut in the dividend on the ITT common stock.
3. The divestiture of Hartford would have a negative impact upon the ITT
parent company a^fd consolidated balance sheets. The result would be a reduction
in ITT's incremental parent company debt capacity and possibly credit rating.
4. FinaMy, to the extent ti;at the" changes in (2') and (3) affected ITT's con-
solidated credit picture, tliere could be some indirect negative effect i',i)(.u ITT's
balance of payments contributions.
Richard J. Ra>.:sd!;n,
May 17, 1971.
Mr. McL.\REX. I might say that the man that made that report
is the same man I u.sed in anai3-ziug the Ling-Temco-Voucrhi ?.iiuaiion
•when Me began to be concerned th.it that comp.any might go ilov\-u
too durhig the course of our proceedings.
After receiving this report — the report from the Trcn-nry, as I
recall, was an oral rcjiort — wc in the .inlitrust Division gave very
■careful consideration to possible alteniative means of setiang the
three cases, consistent with antitrust objectives, but without the
massive adverse impact upon ITT and its sliareholders that would
attend a divestiture of Hartford.
Ultimately Mr. Hummel— who as I mentioned was the deput}'
■director of operations — and I, \vith some particii)ation by Messrs.
Comegys, Carlson, and Mr. Joseph Widmar, the principal triul
attorney on the Grinnell case, develojied a proposal which was reduced
(74)
/.
6A. RICHARD MC LAEEN TESTIMONY, MARCH 2, 1972, 2 KCH 110-23
111
to uTiiiug ill the form of a mcmoiundum to Deputy Attoraey General
Kleimlienst dated June 17, 1971. ^
I pie-;(niti!cl this meniorundum to the Deputy Attorney at a regu-^
larly scheduled brielliig on June 17, 1971, and he approved. I have a
copy of this memorauduiu with ine and it is attached to my prepared
statement, which has been furnished to the members of the coimnittee.
(The memorandum referred to follows:)
Department of Justice,
Washington, D.C., June 17, 1071.
Memora.ndum roK the Deputy Attoh.ney Gb.neral
Re Pri.i-o>t-d Procedure in ITT Merger Cases
Hnikdrc'ind. — Wo have three anti-merger c.ises pending, against ITT: the
GrinneV. ease (sprinkler svstcms), which wad tried and lost in the District. Court
and is iiuw on appeal tn tliu Supreme Cuurl; the Cantcai case (vending and food
service), which wa-s tried and is now sub judice; and the Hartford fire Inaurance Co.
case, which is sot for trial in September.
.Mjout ^ix weeks ago, representatives of ITT made a confidential presentation to
the Department, the gist of which was that if we are successful in obtaining a di-
vestiture order in the ITT-Iiaitford Fire Insurance Company case, this will cripple
ITT financially and seriously injure its 260,000 stockholders. EsientiaUy, this is
because ITT paid a SoOO million premium (or the Hartford stock but took its
assets hi at book value Ln a so-called pooling of Interests transu|;tion. It cannot, now
sell its Hartford stock without (a) suffering a .serious loss as opposed to what it
paid but, at the s;>me tixne (,b) incurring a large capital gain tax. .-V ' spin-^ff" to
its own sliiireholders would be a — and probably the only — feasible alternative;
however, a spin-off would leave ITT with the large preferred dividend commitment
it made in acquiring Hartford (.?.50 million a year), but without the earning power
which was counted on to cover that commitment. The result, we are told, would be
a loss of v>o!! over $1 billion in ITT common stock value, a weakened balance sheet,
and reduced borrowing; capacity.
We have had a study made by financial experts and they substantially confirm
ITT's claims as to the effects of a divestiture order. Such being the cose, I gather
that we musi also anticipate that the impact upon ITT would have a ripple effect-^
iu the stock market and in the economy.
Under the circumstances, I think we are compelled to weigh the need for dives-
titure in this case — including its deterrent effect as well ad the elimination of anti-
competitive effects to be expected from divestiture — against the damage which
divestiture would occasion. Or, to refine the issue a little more: Is a decree against
ITT containing injunctive relief and a divestiture order worth enough more than a
decree cuntaming only injunctive relief to justify the projected adverse effects on
ITT and its stockholders, and the risk of adverse effects on the stock market and
the economy?
I come to the reluctant conclusion that the answer is "no." I say reluctant be-
cause ITT's management consummated the Hartford acquisition knowing it
violated our antitrust policy; knowing we mtended to sue; and in effect representing
to the court that he need not Lssue a preliminary injunction because ITT would
hold Hartford separate and thus minimize any divestiture problem if violation
were found.
Perhaps equally guilty is the trial judge, who listened sympathetically to
defendants' plea that granting our motion for preliminary injunction would cost
Hartford stockholders the SoOO milhon premium ITT was paying for their stock.
Obviously, if such a premium is bei.ng paid on an unlawful acqusition, the acquiring
company may lose that and more if forced to divest, and will so plead if found
guilty. This highlights our continuing need for amendment of the Expediting Act
to permit ua to appeal from District Court orders denying our motions for pre-
liminary injunctions in such ca.ses.
Fiopofied Procedure. — In order that we do not lose the deterrent we have
developed in this field, I propose the following torm.s of settlement of the ITT rases:
1. GrinneU, — divestiture. This would require a joint motion in the Supreme Court
to refer the case back to the District Coiart for entry of consent order — which
was the procedure the Department follow^ed in National Steel Corporation (No.
31, Oct. Term, 1966).
2. Canteen — divestiture by consent order.
(75)
[
BA. RICHARD MC LAREN TESTIMONY, MARCH 2, 1972, 2 KCH 110-13
112
3. Hartford — injunction along lines of LTV, including particularly
(a) Prohibiiion for 10 years of (i) acqiiisiiioii of any corporation vith
assets of SlOO million or more; (ii) iicqui.--iiion of any cor|)oralion with ;i>sets
of SIO miUion-lOU million wilhont approval of the Department, or per-
mission of the court; and (iii) for a jjcriod of an addition;:! (five ycar^, pro-
hibition of any acquisition of any corporation with assets over SIO million
except on a showing that it will not tend to lessen competition or create a
monojioly.
(b) Prohibition against engaging in systematic reciprocity.
(k) Divestiture of A\is and Levitt.
Finally, in all three cases, I think we should have the right to approve ITT's
press releases. We want no great protestations of innocence, government abuse,
€tc., etc.
I recommend that you approve a program along the lines of the foregoing —
Allowing, of course, for some ieewaj- in negotiating.
Richard W. McLakf.n,
Assistant Attorney General,
Antitrust Division.
Approved, Qllini.
R. G. K.
Mr. McLarek. This plan contem])lated divestiture of Grinnell
and Canteen; divestiture of Avis and Levitt; prohibition for 10
years of acquisitions of any corporation with assets of SlOO niilliou or
more, or acquisitions of any corporation with assets of more than SIO
million except on a showmg that it would not tend to lessen competi-
tion, and so forth — that would be a showing by ITT and it woukl be
their burden of proof; prohibition against engaging in systematic
reciprocity; and certain other provisions along the lines of our LTV
<]ecree.
At the conclusion of mv meeting with Mr. Klcindienst, I tcU>i)!ioned
Mr. Felix Rohatyn from Mr. Kleindienst's office — while he was jires-
ent — and outlined my proposal to him. This was at ap])roxiiinitoly
10 o'clock in the morning on June 17. Mr. Rohatyn asked certain
questions about points in the proposal and repeated his unclerslani!-
ing of the proposal as — it appeared to me — he took notes on it. 1 told
Mr. RohatATi that if the ])roposal was acceptable to ITT as a ba-is for
a settlement, hf shotdd have ITT's trial counsel get in touch with me.
I made clear that if ITT was imwilling to acceiJt the basic outline of
the pioposal, v,-ith negotiation onl}' as to details, 1 did not care to
disctiss tlio matter further.
On the evening of June 17, I informed .Messrs. Hummel, Mahuflie
and Carlson of the Antitrust Di^^sion that our proposal had been
communicated to ITT's representative. I did this because ^Ir. Carl<on
and Mr. Widmar were going to take the depositions of some of ITT";,
top executive- in Xew York on June 18, and I felt that the}' should He
fully iniormed as to the status of the case.
Thereafter Mr. Henry Sailer, of (he Covington & Burling law fuiu,
who was trial counsel for ITT in the Grinnell and Hartjord cases, as I
said before, telephoned me for an apjiointment. Judging from the
telephone record maintained by my secretary, this ajiparently was on
June IS; we made an appouitmeiil for a preliminary discussion on
June 24. At the meeting on June 24, Mr. Sailer showed by his eom-
ments that he had recciveil a rather full ami accurate accouiH of the
])roi)0^al \v!u( h we liad made to Mr. Rohatyn, and he incpiiied as to
various sp(>citics of our proposal. For example, he suggested it would
be aj)i)ropriate to advise Judge Austin, who then had the Cautirn
<-ase undiT consideration, that we were enterhig into serioiis settlement
(76)
6 A. RICHARD MC LAREN TESTIMONY, MARCH 2, 1972, 2 KCH 110-13
113
negoliatiou.s. Also, wilh respect to Cunteen, he inquired if we would
be willing to let ITT keep ufter-uequii-eil properties, thut is, tlio^e
' hoii;j:ht or coustructed alter tlie niaia acquisitiou. 'With respect to
Giiniiell, he argued thsit ITT should be permitted to divest only jiart
of Griniiell, that is, the fire protection business, whidi iiad been dis-
cussed during the trial of the case. With respect to Levitt, he raised
the after-acquired property i)oint and also inquired about retaininpc
overseas i)roperties. He protested that there was no good antitrust
reason why ITT should be forced to divest Avis. Then lie asked about •
the negotiatibiiity of our provision on no acquisitions over SIO million,
and so forth. 1 told him we would negotiate on details, but that the
basic i)ro visions of the proposal were firm.
Within the next few days we agreed internally that Carlson and
Wiilniar should Ihuulle the negotiations, and by June 30 Carlson and
Widn\ar Inul so advised Sailer, and had had a discussion with liini con-
cerning procedure.
On July 1, I met with Sailer, Carlson and Widmar and after a very
.short session, principally covering the points I had discussed with
Sailer on June 24, I left Carlson and Widmar with Sailer to continue
the negotiations.
Negotiations between Carlson and Widmar on the one hand and
Sailer on the other hand continued through the raontli of July — a
l)art of which time I think from about July 10 to July 20, I was in
I-on<ion at the ABA meeting — and in the last few days of the month,
Carlson and Widmar advised me that the matter was about woimd up
and that it would be helpful if I would sit in on one or two sessions to
cover some final points. On July 30, I agreed that we would accept
divestiture of the Fire Protection Dixnsiou of Grlnnell, rather than
insisting on full divestiture. I did so because Messrs. Carlson and Wid-
mar, with Mr. Hununel concurring, felt that separating the Fire Pro-
tection Division from the rest of Grlnnell would be a procompetitlve
step, putting the rest of the industry on a more even competitive
basis with Grlnnell, which incidentally was the leailer in that particular
industrs", which had hail a competitive advantage by reason of its
vertical integration and its broad contacts in the construction busi-
ness.
There were certain other minor points still in dispute, and our meet-
ing adjourned on the evening of July 30, which was a Friday, for Mr.
Sailer to consult with Ills client. We reconvened our meeting on Satur-
day morning, July 31, and ironed out the final points. Mr. Sailer then
contacted ITT — and I believe they polled the directors for final ap-
proval of the proposed settlement by telei^hone during the day. I
then prepared a press release, for immediate distribution, announcing '
tlnit we hatl reachetl an agreement in [)rinciple on the terms of consent
decrees which, if approved by the courts, would terminate the tlnree
cases. This was done in order to head off any further newspaper
spoculatioa, and any possible insider tradhig when the markets re-
opened on the following Monday.
In conclusion, I want to emphasize that the decision to enter into
settlement negotiations with ITT was my own personal decision;
I was not pre.ssured to reach: this decision. Furthermore, the plan of
.'■ettlement was densed, and the final terms were negotiated, by me
with the ad\nce of other members of the Antitrust DiWsion, and by
no one else.
(77)
6B. RICHARD KLEINDIENST TESTIMONY, APRIL 27, 1972, 3 KCE 1732-33
1732
Mr. Eleixdiexst. No; I might have talked to 'Governor Nunn two
or tliree times since I hare been in the Gorernment. 1 know 1 iiad one
conversation in xrhich he was interested in being a judge. And I think
that is the most lengthy conversation I even had with him.
The Chairman-. Your time is up.
Senator Cook. Mr. EUeindienst, just a couple of very short ques-
tions. There was, as a matter of fact, a gi'eat divergence of opinion
within the administration relative to, not yourself but Mr. McLaren's
policy in the Antitrust Division; was there not?
Mr. Kledcdiexst. Not only in the administration but in the
country, in the legal profession.
Senator Cook. As a matter of fact, the Stigler report, that had
been filed, stated that, and I quote: 'Sngorous action on the basis of
our present knowledge of conglomerates is indefensible." And the
report went on to sa}", and I quote again from the report which was
made to the President of the United States:
We strongly recommend that the Department decliue to undertake a program
of action against conglomerat« mergers and conglomerate enterprises pendinu a
conference to gather information and opinion on the economic effects of the
conglomerate phenomenon.
So there was a divergence of opinio'.^, was there not, and, ns a
matter of fact, as the result of Mr. McLaren's position as head of the
Antitrust Division, the largest corporate divestiture that ever took
place in the history of the United States occured as a result of his
actions; did it not?
Mr. IvLEixDiEx-ST. Yes; not only that, but an agreement against
further acquisitions.
Senator Cook. For a period of 10 years.
Mr. Kleix-dtexst. Right.
Senator Cook. And as a matter of fact, at the time that this
debate was going on and his actions were going on, the former h.f^ad,
under the former President, of the Antitrust Division took the po-^iiion
that the position of this administration in its antitrust policies \\as
wrong? •
Mr. Kleixdiexst. That is correct.
Senator Cook. Did he not?
Mr. Kleixdiexst. Dr. Turner.
Senator Cook. Thank you, Mr. Chairman.
The CK.A.IRMAX. Birch.'
Senator BA-iTi. Mr. Kleindienst, the last question I asked before
deciding there was nothing lo be gained in pursuing other questions
was something to the effect that were you aware of the KuuiMien
report and you — I mean, were you aware of its specifics — and you
said, as I recall, you were not aware of any of the specifics at all? "
Mr. Kleixdiexst. Never read it.
f^ Senator Bayh. And, as I recall the hearmg, at least pan of the
I answer to the last question Avas that your reliance on Judge McLuien
• was really the whole reason this case was resolved as it was.
Mr. Kleixdiexst. You mean that Judge McLaren reconmieiuled
this solution?
I Senator Bayh. Yes, sir.
I Mr. Kleixdiexst. That is the only reason why I went along with it.
I He recom.mended it.
*- Senator Bayh. Was that recommendation and the reasons for it i'nat
compelled you to accept his judgment coraainccl priuiaiily iu ,i,^
(78)
6B. RICHARD KLEINDIENST TESTIMONY, APRIL 27, 1972, 3 KCH 1732-33
1733
memoranJum that \vc have all read? It is on page 111 of the record,
"Memoriuulum for the Deputy Aitorney General Re Proposed Pro-
cciiure ill ITT Merger Cases." If you are not familiar with the Rams-
deu im-nio, are you fauiiliiir with tliat memo?
Mr. Kleixdienst. I do not have aiiy present recollection of ha^"ing
read it. Mr. McLarea would send me a memorandum and then what
we would iisualh- ilo is discuss it, which would save me a lot of time
aiiil ii also gave him an opportunity to present it, I tliink, a little bit
mo!v clearly. I miirht have read it, Senator Bayh. I do not know.
Senator Bayh. Tiiis is a memorandum, if I mi^ht tr^- to ask you to )
refresh your memory, which was dated June 17, 1971, and which Hsts
in some detail the reason win- you are recommending tlie settlement, ,
if it is approved, and it is "Approved. June 17, 1971. RGK." _y
Mr. Kleixdienst. Right.
Senator Bayh. Then I understand that after this ITT was called.
Mr. Kleindiexst. Right.
Senator B.\.Yii. Does that refresh your memory?"
Mr. IvLEi-XDiEXaT. Yes, it tloes. Now I know the memorandum you
are talking about. Whether I read it or not in its entirety is doubtful to
nie. Mr. McLaren would have discussed it with me and I would liave
approved it in writing just so it would show it wss approved in his
file. After that we called Mr. Rohalyn and Mr. McLaren outlined the
broad outlines of the proposed settlement to him.
Senator Bay^h. Wlien a man like Judge McLaren, your assistant,
makes recommendations hke .tliat, of this consequence, is it your
judgment to take the memorandum and its discussion at face value or
do you try to substantiate it with, from other sources? ._
yiv. Kleixdiexst. No, I have never tried to substantiate a recom- j
mendation or opinion of Judge McLaren from any other source. I I
have read, complaints or memoranda and have raised questions about
ii, and then have had a conference, and had it explained to me, and I
guess, Senator Bayh, the antitrust law is probably the most speciaUzed
form of the art that we have. Consequently, j'ou have to make a
judgment whether you have go a competent lawyer in the field, and
I do not think anybody challenges McLaren on that; and then,
second, whether he is a man of integrity, so that when he tells you
something you know what his reason for telling you something Ls. I
think it would have been presumptuous for me to go out and hire a
consultant to check on McLaren in a field of law about which I ,
then knew very little and about which I still know very Uttle, although I
I have learned a little bit more about it. — ^
Senator Bayh. I must say I have the greatest sympathy with j-'oii
in your description of the antitrust law being compUcated. I would
find it much more so than you. iixid I would be incUned, I suppose,
to rely on a man with Judge ]VIcLaren's expertise. I keep coming back
to this inconsistency and perhaps you can help us out on this. If we
are to accept your reasoning, rationale, which I am prepared to do,
relative to the ITT case, why is it again you did not go along with
Mr. McLaren's advice on the Warner-Lambert case?
Mr. Kleindienst. That is the one exception, and I guess that
hopefully proves the rule. When the Warner-Lambert situation came
up, as I try to recollect it again, I was out of town, I got a caU from
Mr. Mitchell, wherever I was, on a Friday afternoon or a Satunlay
morning, indicating that they had come up with a recommendatioii
(79)
7. vSettlement initiations had taken place in late 1970. ITT's
settlement posture advanced included its keeping the Hartford Fire
Insurance Company. McLaren rejected any settlement talk along
that line.
In early 1971, ITT began to formulate a plan, based on economic
theory, of why.it was important for ITT to retain Hartford. Eventually,
on April 29, 1971, ITT made an economic presentation to the Department
of Justice on national economic consequences if ITT v/ere forced to
divest itself of Hartford. As a result of that presentation, in com-
bination with the Ransdem Report from his own independent financial
expert, McLaren proposed a settlement offer enabling ITT to retain
Hartford.
Page.
7a Memorandum of John W. Poole, Department of Justice
fo Files dated August 7, 1970 82
7b Memorandum of August 18, 1971, authored by
Richard W. McLaren. 84
7c Affidavit of Harold S. Geneen, dated June 12, 1972, given
in connection xvith a Securities and Exchange matter. 88
7d Testimony of Richard G. Kleindienst 2 KCH 129
95
7e Letter of May 3, 1971, from Felix G. Rohatjm to
Richard W. McLaren 96
7f Testimony of Richard W, McLaren, 2 KCH 165 100
7g Testimony of Richard G. Kleindienst, 3 KCH 1736. - 101
(81)
7A. JOHN POOLE MEMORANDUM, AUGUST 7, 1970
(I.I. 1 -.■.-•
r
UMiT.i) vrAr's (;o\ ,oMi;.\i" xyt;PAi<rMi;.v]- ok justice
Memorandum
J\i/Poole;dinh
TO : Files date: August 7, 1970
FILE: 60-270-037-1
f
l\\ John V.'„ Poole, Jr., Assistant Chief
Vj I'ROM '
General Litigation Section
United States v. International Telephone
subject: and Telegraph Corporation (Canteen):
Conference with Defendant's Counsel
On August 6, 1970, Hammond Chaff etz and William Jentes of
the Kirkland Ellis firm called on Mr. McLaren in Washington
to discuss possible settlement or disposition of the captioned
case. Gerald Connell and I were also present.
Mr, Chaffetz contended that the Government's evidence elici
so far is so weak that the case ought to be dropped. He and
Mr. Jentes adverted among other things to what they described as
the extremely small number of "reciprocity" incidents revealed
in the recent depositions of the Government's proposed v/itnesses
Fishman, V7alsh and Manthy. They mentioned also that of all the
possible incidents which have cropped up in Canteen documents in
only 10% of these instances has Canteen gotten business. OveraL!
Mr. Jentes said that the incidents of reciprocity which the
Government intends to prove are insignificant given the size of
this industry.
Mr. Chaffetz also admitted that at one time Canteen had
practiced reciprocity as "everyone" had practiced reciprocity
because it was understood that it was legal if coercion was
not used. He said that this was no longer the case and
particularly in view of ITT's management it was unrealistic to
expect Canteen to engage in reciprocity.
Mr. Chaffetz also asserted that ITT would only improve "
Canteen's operations and this would redound to the benefit of
the industry as a whole. (Mr. Jentes hastened to add that the
management improvements ITT v;ould make were not of a sort which
would be available only to large firms.)
fiV
(82)
. 7 A. JOHN POOLE MEMORANDUM, AUGUST 7, 1970 -
Mr, McLaren stated his intention to pursue the case,
pointing out that the reciprocity issue was only half the case-
there was also a major issue of the trend toward concentration,
through mergers, a trend in which ITT has been a lealder and a
prime contributor and one which runs afoul of the. concerns
voiced in the legislative history of the Celler-Kefauver Act,
Mr. Chaff etz said that although he had not spoken to
Mr. Geneen of ITT on the subject he thought that ITT, might be
willing to consider an injunction of some years duration against
further acquisitions as a means of settling the pending antitrus
cases. He also stated that if the facts v/arranted it, ITT would
be willing to settle the Canteen case on the entry of an order I
along the lines of that entered against U.S. Steel. Mr, McLaren
indicated~Tfhat he felt that divestiture was the proper remedy
here,
■ . '■ !
Mr, Chaffetz asked whether this was regarded as a "test ♦
case" and Mr, McLaren challenged that characterization-, pointing^
out that this was one of a group of cases v/here the grounds for
Government suit had been clearly described to the proposed defen^
before suit was brought.
(83)
r
7B. RICHARD MC LAREN MEMORANDUM, AUGUST 18, 1971
August 18, 1971
MEMORANDUM CONCEHMING NEGOTIATIONS
FOR SETTLEtlLNT OF ITT CASES
Three cases were filed v;ith respect to ITT
acquisitions: Canteen Corporation, Grinnell Company
and Hartford Insurance Company, all in 19G9. At
various times in 1970, overtures were made by counsel
to settle these cases and in every case counsel was
advised that the cases could be settled but a sine
qua non v/as divestiture of at least Hartford an3
Grinnell.
In November of 1970, Ephraim Jacobs of the
law firio-of Hollabaugh & Jacobs of Washington, repre-
senting ITT, visited me and proposed that ITT would
be willing to divest Canteen, the principal parts of
Grinnell and ITT-Levitt as well as certain other
subsidiaries of ITT v;hich might be agreed upon, provided
that they could retain Hartford r I said that this v.'as
out of the question. Jacobs later v;rote me a letter
substantially confirming the discussion we had.
At some time in Karch, we were advised by
ITT representatives that ultimate divestiture of
Hartford v.'ould be almost a fatal blov; to ITT and that
they v.'ould like to make a presentation to establish
this fact and to establish a basis for negotiations
for settlement without a Hartford divestiture. Arrange-
ments were made and a meeting was held in this office*
attended by the following representatives of ITT:
Howard J. Aibel, Senior Vice President
and General Counsel
Felix Rohatyn, director of ITT, member of
Lazard et Freres
Henry P. Sailer, Covington & Burling
and as special consultants:
Dr. Raymond Saulnier, Columbia University
V/illis J. VJinn, VJharton School, University
of Pennsylvania
* On April 29, 1971
(84)
7B. RICHARD MC LAREN MEMORANDUM, AUGUST 18, 1971
Representing the government were Deputy
Attorney Gencrai Richard Kleindienst, Messrs. Comegys,
Huraniel, Hahaffie, Carlson and myself of the Antitrust
Division, and Bruce MacLaury and Tiiaothy Green of
the Treasury Department.
The substance of the ITT presentation v/as
that a Hartford divestiture v/ould cost the ITT
stockholders approximately $1 billion. The reasons
for this are varied but include the fact that ITT
paid a $500 million premium for Hartford; it would
have to pay a very large capital gain tax on a
sale of its Hartford' stock; and if it spun off the
Hartford stock to its stockholders, it would be left
with c.ii unmanageable issue of preferred stock.
Following the meeting, we requested the
Treasury representatives and an outside consultant
to evaluate the ITT claims.
Shortly after the middle of Hay, these
experts reported that there was substantial support
for the arguments made by ITT and that a Hartford
divestiture would indeed be very difficult for ITT
and, because of changes in the lav/ and in accounting
practice, such a divestiture v/ould probably entail
a , very large loss to ITT stockholders.
Following this report, there v/as considera-
tion in this office of alternative means of settling
the case consistent v/ith antitrust objectives, and
Mr. Huiranel and I, v/ith some participation by Messrs.
Comegys, Carlson and V-/idmar, developed a proposal.
This culminated in a memorandum which I
prepared for the Deputy Attorney General dated
June 17, 1971. I presented this meiuoranduin to the
Deputy personally at approximately 8:30 in the
morning on June 17, and after considerable discussion,
he approved our plan of settlement.
-2-
(85)
7B. RICHARD MC LABEN MEMORANDUM, AUGUST 18, 1971
This plan contcmplatGd divestiture of
Grinncll and Canteen; divestiture of Avis and Levitt;
prohibition for 10 years of acquisitions of any
corporation v;ith assets of $100 million or more,
or acquisition of any corporation with assets of
more than $10 million except on a shov/ing that it
would not tend to lessen competition, etc.; prohi-
bition against engaging in systematic reciprocity;
and other provisions along the lines of our LTV decree.
At the conclusion of our discussion,
Mr. Kleindienst and I telephoned Mr. Rohatyn at
approximately 10:00 A.M. June 17 and outlined this
proposal to him. Mr. Rohatyn apparently took notes
on "the proposal; he asked certain questions about
details of the proposal. We suggested that if this
appeared to present a reasonable basis for settlement,
v/ith negotiation as to details, to have ITT's counsel
get in touch with us.
On the evening of June 17th, I informed
Messrs. Hummel, Mahaffie and Carlson that this offer
had been communicated to JTT's representatives.
Thereafter, Henry Sailer telephoned for ah
appointment (apparently on June 18) and came in for
a preliminary discussion on June 24. He had received
a rather full and accurate account of the proposal
I had made to Rohatyn and he inquired as to certain
specifics of our proposal. For example, he suggested
it would be appropriate to advise Judge Austin, who
then had the Canteen case under consideration, that
we were entering into serious settlement negotiations.
With respect to Canteen, he inquired if we v;ould be
willing to let ITT keep after-acquired properties.
With respect to Grinnell, he strongly urged that ITT
be forced to divest only part of Grinnell, i.e., the
Fire Protection business. V.'ith respect to Levitt,
he raised the after-acquired property point and also
inquii-eu about retaining overseas properties. He
protested that there was no good antitrust reason v/hy
ITT should be forced to divest Avis. Then he asked
-3-
(86)
7B. RICHARD MC LAEEN MEMORANDUM, AUGUST 18, 1971
about the negotiability of our provision on no
acquisitions over $10 million, etc.
V7ithin the next fov; days we agreed
internally that Carlson and Widmar should handle
the negotiations, and by June 30 Carlson and. Uidmar
had so advised Sailer and had had a discussion v/ith
him concerning procedure.
On July 1st, I met with Sailer, Carlson
and Widmar and after a very short session, prin-
cipally covering the points I had discussed v/ith
Sailer on June 24, I_^ lef t Carlson and VJidmar with
Sailer to continue the negotiations.
The negotiations continued through the
month of July and we reached our ultimate agreement
on Saturday, July 31. (On July 30, v/e indicated for
the first time v/e v/ould accept divestiture of the Fire
Protection Division of Grinnell rather than insisting
on full divestiture.) Carlson and IJidmar have notes
of their discussions, and their notes and memories
would be the best source of information concerning
the time when substantial agreement v.'as reached.
The foregoing was dictated in the presence
of Messrs. Comegys and Kummel of the Antitrust Division,
and Messrs. Rossen and Boro'.>7ski of the SEC.
RICHARD w. McLaren
Assistant Attorney General
Antitrust Division
Department of Justice
(87)
41-566 O - 74 - 7 ^ '
7C. HABOLD GENEEN AFFIDAVIT, JUNE 12, 1972
______------------x
In the Matter of
TRANSACTIONS IN THE SECURITIES
OF IMTERNATIONAL TELEPHONE AND
TELEGRAPH CORPORATIOM
File No. KO-536
STATE OF NEV/ YORK )
COUNTY OP NEW YORK )
ss.
!
HAROLD S, GENEEN, being duly sworn, says:
1. I am the President and Chief Executive Officer of
International Telephone & Telegraph Corporation ("ITT").
2. I submit this affidavit to provide the Commission
!j with information concerning a rough draft memorandum dated r4ay 5
|i 1971 (Exhibit A hereto) which I prepared for the use of internal
i|
jj counsel at ITT.
li
3. The background of this May 5 draft memorandum is a
follows :
In about January 1971, I was informed that Assistant
Attorney General Richard McLaren had rejected a proposal by ITT
to settle the three antitrust cases pending against it and had 1
quired why ITT was so Insistent against having a divestiture of
Hartford Fire Insurance Company ("Hartford") included in any
possible settlement- We understood Mr. McLaren's question to me
that it would take a detailed financial and economic presentatio
on the importance of Hartford to ITT to persuade the Justice
(88)
f'
I
7C. HAROLD GENEEN AFFIDAVIT^ JUNE 12, 1972
Departnent that divestiture of Hartford could not realistically t
expected to be part of any voluntary settlement of these three
antitrust cases.
Accordingly, preparations thereafter began for a presen
tation to the Department of Justice on the adverse economic and
financial impact on ITT and national policy concerns which a
divestiture of Hartford would have and it was eventually decided
that Mr. Felix Rohatyn, an ITT director and a acknowledged expert
in the financial community, should take the lead in making this
presentation to the Justice Department. For this purpose, arrangi
ments were made for Mr. Rohatyn to see Deputy Attorney General
Richard Kleindienst on April 20, 1971 (Attorney General John
Mitchell having previously disqualified himself from acting on
these cases).
Mr. Rohatyn met with Mr. Kleindienst on April 20,
and made a preliminary economic presentation on the importance
of Hartford to ITT and the national ecoraony. I understand
that following the meeting arrangements were made for a full-
scale presentation by ITT to Mr. McLaren and others on this
subject for April 29. It Is my recollection that Mr. Rohatyn
also reported to me that, during the April 20 meeting, he
had suggested to Mr, Kleindienst that the maximum divestiture
which he felt he would personally recommend to the ITT Board
of Directors in an overall voluntary settlement of the three
antitrust suits against Hartford, Canteen and Grinnell would be
a divestiture of Canteen and Grinnell. Mr. Rohatyn told me that
Mr. Kleindienst did not respond to this statement and there was
no further discussion on the subject. While I recognized that as
a practical matter the Department of Justice might insist upon ^
(89)
7C. HAROLD GENEEN AFFIDAVIT, JUNE 12, 1972
il
i' of an overall settlement , I vras concerned that Mr. Rohatyn's
li
,: statement might preclude us in the future from neprotiatinn: a
|!
' lesser divestiture v^ith respect to Grinnell. I took the positlo
i!
•l that ITT had not violated any antitrust lav/s , as demonstrated by
i
! Judge Timber's final decision in our favor in the Grinnell case
:; December 30, 1970, and that consequently ITT should not be re-
■ quired to make a complete divestiture of both Grinnell and
'I
.i Canteen.
On April 29, Mr. Rohatyn led the full-scale ITT presen
ij tation to Mr. McLaren, Mr. HacLaury of the Treasury Depai-tment,
; members of their staffs, and Mr. Kleindienst, with respect to th
■' economic importance of Hantford to ITT and to the national
.1 economy. I vras informed that there was no discussion of possibl
.i settlement terras In connection v;ith that meeting.
' Upon reviewing the materials which v/ere left \-t±th. Mr.
' McLaren in the course of the Aoril 29 presentation (Exhibit B
:;
\\ hereto) , I felt that several points should be further amplified.
i [
;: Consequently, I suggested to Hovrard Aibel, ITT's General Counsel
ij and to Mr. Rohatyn that a follox7-up letter should be sent to 14r.
;i McLaren. This was done by a letter of May 3, 1971 (Exhibit C
ij hereto). In the course of my discussions with Messrs. Albel,
: Rohatyn and Scott Bohon, ITT's Assistant General Counsel, with
il respect to preparing this letter, we also discussed what other
li
il steps might be taken to follow-up the economic presentation. of
]j April 29. It was decided that Mr. Rohatyn would attempt to set
II ;
■: up another meeting with Mr. Kleindienst for about May 10, 1971.
j! In preparation for such a meeting I^. Bohon wrote a memorandum f.
i| Mr. Aibel dated May k, 1971 (Exhibit D hereto), a copy of which
li
• he also gave to me, pointing out some of the practical financial
(90)
7C. HAROLD GENEEN AFFIDAVIT, JUNE 12, 1972
Ij
' manager:;ent and other problens which would be involved In a possil
: j
ii total divestiture of Grlnnell and the importance of Grinnell to
j ITT's diversification.
:; It Is ray recollection that after receiving a copy of '
: Mr. Bozhon's May U memorandum, I. then dictated a rough draft memo-
■■ randum of my thoughts on this subject, which is the memorandum
: dated May 5, 1971 (referred to in paragraph 2 of this affidavit).
r.
It is my recollection that I sent this rough draft memorandum to
■Mr. Bohon. I do not recall whether I also gave a copy of this
: draft memorandum to Mr. Rohatyn, but I may have done so.
' In the course of my conversations with Mr. Rohatyn, t
i .
i recognized that his statement to Mr. Kleindlenst on April 20 con-
|; cerning a divestiture of Canteen and Grinnell might be interprete
'■ as a commitment as to the outside limit to which ITT would
jl be prepared to go. Accordingly, I agreed that if the subject of
|i . .
I possible settlement terms came up in any subseqent meeting with
ij
|| the Justice Department and he was not successful in gaining accep
!• . " ' "
i; ance^ of the idea of only a partial Grinnell divestiture, he could
!i ■ •
! fall back to the statement he had made to Mr. Kleindlenst on
i! . ■ • ■
'April 20. It was this statement by Mr. Rohatyn that I refer to
.|i In paragraph 1 of my rough, draft memorandum of May 5 as "the ofre
I of Grinnell . " • .'
I However, because I earnestly did not believe that a
total Grinnell divestiture was really necessary from the Justice
j Department • s standpoint, paragraph 2 of my May 5 memorandum goes
I on to set forth possible courses of argument for counsel to
develop on this subject in preparing for any future meetings. It
was my thought that we should try to persuade the Department, of
;i ■ ■ ■
ij Justice that a partial divestiture of Grinnell 's Fire Protection
!l
li Division should really be sufficient to satisfy the Government's
(91)
7C. HAROLD GENEEN AFFIDAVIT, JUNE 12, 1972
antitrust theories. We had won the Grinnell case dei^islvely on
;l the merits, and the Fire Protection Division was the only portic
I of the company involved in the proposed appeal by the Governnent
1 I
ij I felt strongly that it would be manifestly unfair and unnecessa
\\ for ITT to be required to divest all of Grinnell when there were
li not even any anti-competitive charges Involving most of Grinnell
ii
;j business operations. I understand that Mr. Bbhon then prepared
!j final memorandum dated May 7, 1971 (Exhibit E hereto), using cer
'} tain of the material in my rough draft memo of May 5, which com-
1} municated our final suggestions as to the points Mr. Rohatyn
': might make if the subject of a possible Grinnell divestiture
)i should come up. Our positJLon in this respect is set forth ir;
) ■
'.\ greater detail in another May 7, 1971 memorandum prepared by Mr.
il
n Bohon, captioned "The Grinnell Antitrust Case" (Exhibit F hereto
,j which was also given to Mr. Rohatyn.
ij .
! 4. After Mr. Rohatyn met with Mr. Kleindlenst on May
li ■
'\ 10, he reported to me that the conversation was essentially con-
'I fined to a repetition of the economic and financial points made
i! ■ • ■
:■ during the April 29 meeting and In the follow-up letter of May 3
;i
!! Mr. Rohatyn said that he briefly mentioned that the Justice
!i
Department should not require ITT to divest any portion of
:i Grinnell other than Its Fire Protection Division since that was
I . ■ _
I I the only part of Grinnell ivhich v;as involved in. any potential
t!
li antitrust problems. But, Mr. Rohatyn reported that Mr.
j' Kleindlenst made no response to this point and that there was no
discussion at all of any possible settlement terms.
5. Thereafter I received no further information about
the Justice Department's reaction to our economic presentation
(92)
7C. HAROLD GETIEEN AFFIDAVIT, JUNE 12, 1972
until June 17, 1971 when, as I have previously testified before
i| the Corxaisslon, I v.'as told by Mr. Rohatyn of a telephone conversa-
i| tion he had had that morning v;ith Messrs. McLaren and Kleindienst
I'i
j In which they informed him that the Justice Department's "nego-
\\
,; tlating position" for a settlement of the three antitrust cases
I
' would permit ITT to retain Hartford but V70uld require divestiture
i; of four large companies - Canteen, Grlnnell, Avis, Levitt - and
!■ would Impose severe restriction against future domestic acquisi-
ji
:' tions and against possible reciprocity practices. As I have also
11
i testified, both Mr. Rohatyn and I were surprised and dismayed by
■' that "negotiating position" since we considered that the. price
■ I the Justice Department v;as ^suggesting for settlement was "very
jj steep", and was one which In no event would we recommend that ITT
'■ accept (Tr. 9-12, 19). Prior to that time - as is shown in my
ii
ll May 5 rough draft memorandum - the maximum voluntary divestiture
!!
which I had even contemplated vjas divestiture of the two other
companies whose acquisitions were directly challenged in the
Government's lawsuits. Canteen and Grlnnell. And even In that
respect, as is_ illustrated by ray May 5j 1971 rough draft memo-
ii randum, I was extremely reluctant for what I sincerely considered
ll to be very valid reasons to agree to any complete divestiture of
Grlnnell. Furthermore, I should emphasize that any willingness
on our part to even consider a divestiture of all of Grlnnell was
only In the context of an overall settlement which would require
divestiture of two companies - Grlnnell and Canteen. Certainly,
when the Department of Justice, on June 17 and thereafter, in-
sisted upon a divestiture of the four large companies, a total
divestiture of Grlnnell from my point of view was simply out of
the question.
(93)
7C. HAROLD GENEEN AFFIDAVIT^ JUNE 12, 1972
6. As the Conunission is aware, Mr. McLaren dlsaerced
for some time with our position that a complete divestiture of
Grinnell should not be required as part or aji overall settlement
ii . . • *
i of the three antitrust cases. It was not until July 30-31 1971
; v/hen a settlement agreement was reached, that he withdrev/ froia
!■ ' '
j, this position.
' Sworn to before me this -
■/o^T^day of June, 1972
cA^UtZA^
jcvc' A.rrv.v.r.DS
Noter,' r-.-';:-:. Zyn c' r.'r.v York
No. 30-1''".''"- ■ ' •■ ■ •:• iJs^su County,
C;,: . ■•. ;:■ ■■ Vor!; Coun^
Conr.ii=i.J:. L^>..--= (.larch 30, 1973 '
(94)
7D. BICEARD KLEINDIENST TESTIMONY, MARCH 2, 1972, 2 KCH 129
I2D
( IM'''[, wluTo the Suj)rcrni> Court s.-iys that if t!ie purtic- i)ut tlioni-
'l\-fs ill cl\is kiiul of :i position that it is not u legul reason to forgive
.;K' vio'.ution of section 7.
XoNv. I do not think a ])rosee'utoi- can quite take that attitu(h\ I felt
that we ill the Antitrust Division had to have in niiuil the effect tliat
it woul.i have on all of tiiese hundretis of thousands of sharehoUiers,
and the ri;)))!e effect it might liave on the economy.
Senator Ivexxedy. Mr. Kleindienst, "ci'e you accjuainteJ with
anyone from I TT before Mr. Koliatyn called in April?
Mr. Kleindienst. Was I acquainted with anybody?
Senator Kennedy. Yes.
Mr. Ki.eindien.st. There is only one pei-son in ITT who I have
ever been acquainted with, and that is a Mr. Ryan who is emi)loyed
by that company in Washington, D.C., and he lives in my neighbor-
hood in McLean.
Senator Kennedy. Coidd you describe that rehitionship? Is it
))nrely social, or is it a relation.ship
1
Mr. Kleindienst. It is a \ery casual social relationships Once or
twice a year the neighborhood has a Christinas i)arty or neighborhood
party, and then I see Mr. Kyan.
Senator Ke.nnedy. But there has never been a professional
relatioiishi]) between yon?
Mr. Kleindienst. None at all, sir.
Senator Kennedy. Hail j'^ou ever heard of Mr. Rohatvn before his
call?
Mr. Kleindienst. No, sir.
Senator Kennedy. He was not introduced to you by anyone?
Mr. Kleindienst. No, sir.
Senator Kennedy. Did he refer to anyone in calling you?
Mr. Kleindienst. No, sir.
Senator Ke.nnedy. He just called yon out of the blue, and you took
•lis call?
Mr. Klei.vdienst. Well, he identified himself as a rejjre.sentative of
tlie conij)!in3'. I think he knew who I was, m\- responsibilities in the
Dei)artment.
Senator Kennedy. And you took his call, without knowing what he
^vas calUng about, just because he was a director of ITT?
Mr. Kleindienst. Yes, sir, I did.
Senator Kennedy. Even though you did not know him or had been
luiaware of him?
]\Ir. Kleindienst. Y'es, sir, based upon the identification given, I
did.
Senator Kennedy. Now, in your conversation with Mr. Rohatyn,
did you ask him whether he had already presented his arguments to
Mr. McLaren?
Mr. Kleindienst. No. He prefaced his remarks by saying be was
not a lawyer end he did not want to come in and discuss this thin^
from ft legal standpoint, but based upon I call it economics, but 1
guess financial and economic considerations.
Senator Ke.n.nedy. Well, you are certainly a lawyer.
Mr. Kleindienst. I used to be. Senator Kennedy.
Senator Ke.vnedy. Ami he, in this conversation, did it not seem
ap[)ro])riate
u
(95)
7E. FELIX ROHATYN LETTER, MAY 3, 1971
_j FCLIX G. ROIIATYfJ
HCV/ TOOK O.N.v.
May 3, 1971
The Honorable Richard \1 . McLaren
/Assistant Attorney General in
Charge of the Antitrust Division
Justice Department
Washington, D,C. ^ "^~
Dear Mr. McLaren:
• . "I am 'writing this letter to amplify and augnent. a
point which was made in the course of the discussion
which we had in your office last Thursday, in the hope
-that its importance v;ill not be overlooked even though
it was not fully developed in the brief summary m.emc-
ran'dum which v/as left with you, Mr. Kicindienst and
Mr. MacLaury.
rThe point is that in the event a divestiture of
the Hartford was carried out by. ITT through, seme kind_,
spin-off, 'ITT would be placed in a very difficult cash
position which v/ould severely impact its ab.Llity to cc:
pete in markets abroad-. There could be as "much as a 4.
reduction in cash available to ITT. This shortfall in.
available cash would arise" from the reduction of earn-
ings by '$88.7 million on such spin-off while the fixed'
obligation to pay dividends of . $50,000,000 on the Seri;
N preferred stock v/ould continue, since as I explained
extensively at the meeting, the exchange could not pra.
ticably be made for the Series N stock. These reducti;
would in turn adversely affect borrowing power 'oy an
I equal amount since evory dollar of retained earnings m:
I 'support a dollar of borrowing. This shortfall is il-
I lustrated by the follov/ing^ table:
(96)
! ?g. FELIX ROHATYN LETTER, MAY 3, 1971
Tlio Honor. iblc Kichord M . McLaren
May 3, 1971
Page Tv.'O
1970 Earnings and Dividends v/ith Proforna .Adjustment
to Put N Preferred from Partial Year to Annual Baois
— ■■---■■ — ■ ■ — ■-- -■ ■ ■■- - -... ■ . . — ■ ■ ■ ■ _. - . —
1970
Excludi
Consolidated Hnrtfc:
(Millions)
"Net Income $353,3 $265
Dividends Paid and Proforma
for N Preferred
All Preferreds Except N
$40.7
N Preferred fo'r Ilartford -
Paid in 1970 Partial Year
$26.0
N Preferred for Hartford -
Proforma to Bring to Annual
Amount
24.0
50.0
Preferred Dividends
90.7
Common Dividends
-7i;4
Total
$162.1 152.1
162.-
'1970 Retained Earnings after
Adjustment for "1970 to Put. Hartford
N- Preferred on Annual Dividend Basis $191.2 • $103.
'Borrov/ing Capacity on 50/50
Overall debt/equity ratio ; 191.2 _103
Total Cash Available From
Retained Earnings . $382.4 . $207
Shortfall in Cash^ Source to - ^^.',.- .^r^;_"^
Reduction in Earnings duo to ^"xt^rrsuofp- $175.
Of Hartford and Retention of Series N • "j
Dividend Obligation. or drop of A^"/, i
(97)
L
7E. FELIX ROHATYN LETTER, MAY 3, 1971
Tlic IKinornblo J^i.clu!l.•d V.". McLnrcn
Hay 3, 1971
Pnge Three
V?hilG the cash problem v/ould be ameliorated to s
extent by spinning off the Hartford shares in exchanc
for ITT shares, thereby reducing partially the total
dividend requirement for ITT co~jaon shares, the short-
fall in available cash v/ould still be a .major concern
several reasons. Among these are (1) the Series M pr-.
f erred dividend requirement of. ?50,000,000 v;ould rcna.
and (2) the exchange ratio offered to ITT shareholder;
would undoubtedly have to be more than one share of K;
ford for each share of ITT con-j?.on tendered in order tc
induce the exchange. As a result of being required tc
offer a substantial discount the number of ITT. sh£rcc-s'
retired could be as little as one half the 22 mil-lj.c::
Hartford shares, distributed, and certainly no more
than three-fourths.
You will remember, I am sure, that at the neetinc
Dri Saulnier pointed out that the credit v/orthiness o:
borrower in foreign capital markets such as ITT is,
heavily dependent on the value v.-hich is placed on its
.common stock on the stock exchanges here, and on the
credit rating v/hich it's outstanding debt securities
receive. Dean Willis V7inn, in his remarks "particular!
referred to the importance of' the credit worthiness o:
a U.S. based company in the United States to successfi
financing abroad, a major requirement* for- companies w:
foreign operations like ITT's in light of .the current
balance of payments situation,
A major reduction in available cash such as that
demonstrated above, will, in addition to having the
obvious adverse operational impacts which inevitably :
a contraction of cash, have an adverse impact on equi:
values as dividends on the common stock come under pre
sure. Such a cash shortfall v/ould also undoubtedly h;
an adverse impact on the holders of outstanding ITT dc
instruments and on ITT's ability to raise additional
funds through debt financing here, but more significa:
abroad.
(98)
7E. FELIX ROHATIN LETTER^ MAI g, 1971
T)ic llonoraVilc Ricliard V7. McLaren
May 3, 1971
Page Four
Among the adverse conscquonccG to the nation thr.
would inevitably follbv/ fron the requisite contractic
by ITT of its foreign operations is loss of market
shares to major foreign competitors such as Ericsson,
Siemens, Philips, Nippon Electric and Hitachi. Loss
of market shares abroad can only result in a diminuti
of the cash v;hich ITT v/ould have" otherv/ise repatriate
to the United States, It v/ould appear, contrary to th
national interests of this country to take consciousl
actions which v/ould have such an adverse impact on th
balance of payments.
Thank you once again for the courtesies which v/e
extended to me. Dr. Saulnier, Dean V7inn, and counsel.
\Je very much appreciated the opportunity to discuss
the overall policy implications of this situation, wit
you, Mr. Kleindienst and Mr. MacLaury.
Very truly yours,
■■ // q
! f
VCv Cc.
cc: The Honorable Ricliard G. Kleindienst
Deputy Attorney General — —
Justice Department
Washington, D.C.
The Honorable Bruce MacLaury
Deputy Under Secretary for Monetary Affairs
Treasury Department
Washington, D.C,
(99)
7F. RICHARD MC LAREN TESTIMONY^ MARCH 2, 1972, 2 KCH 165
165
>l()0,or)() .virb. an agreeineut for a further $100,000 matching coutribu-
ii')n. aiul r'ii;ir in his view, it was a normal substitute for advertising ex-
penditiiivs ot rhe San Diego Sheraton Hotel.
.Senator l!.\Yii. How is that Icind of decision made? Is nobody on the
board tiikea into consideration, the executive committee?
Mr. Koii.vTVN. Oh, no, Senator; we would no more go into a thing
like that rhun we would the advertising budget of Avis. This is or
should i.'e a routine matter; mayl>e we will liavc some did'erent rules in
the future. But in any case, e.xpenditures of that kind for normal busi-
ness purposes would not come up to the board.
Senator B.\yh. Were you ever on the board of ITT-Sheniton ?
yiv. liOii.vTYX. No, sir. ,
Senator Bayii. Thank you, sir.
Judge McLaren, let me throw a few more questions at you very
quickly hei'e if I may.
Could you enunciate a Int more specifically the whole reasoning that
necessitated or that resulted in your changing your feeling about
accepting the negotiation? "What really concerns me is that the im
pact on stockholders is important, the impact on the economy is im-
portant. But if we have a corporate merger that violates the law. have
we gotten ourselves in the position that if the merger is big enough,
it doesn't make any difference what the law says?
Judge McL.xREN. Senator, I think that doesn't really fairly express
the situation. Let me put it to you this way. I think that a responsible
enforcement officer has to take into account the overall impact of what
'■e is bringing about. Up until they came in and proved to my satis-
,Ktion that it was going to tremendously weaken ITT and was going
-to cost their stockholders something over a billion dollars, I saw no
reason for settling this case shoit of a divesture. I thought that they
made their bed, they could lie in it.
Xow. when it became clear to me that we were talking about this
kind of devastating effect on them, then I began to think in terms of
what kind of a settlement we could work out that would achieve our
antitrust objectives and would not get into this kind of a tremendous
adverse effect upon the company and its shareholders. I use the paring-
off kind of analysis that I explained a little while ago to Senator Hart.
If you look at ITT as it was before the Hartford acquisition and
you say to yourself, what can I pare off of ITT such that if they had
not owned those companies that are pared off. I would not have filed
suit against their acquisition of Hartford? Now. one of the things
that we objected to was the fact that the Grinnell Fire-Safety Division
was tied into this complex and Hartford
Senator Ba yh. May I interrupt ?
You have been very kind and I think you have already gone throueh
this.
Judge McLaken. Yes, sir.
Senator Bath. And I remember it. It is in the record at least once
or twice. I don't want you to have to labor through that again. I under-
stand that weighing and slicing and trying to come up with something
that you feel — and I have the greatest respect for your judgment and
your expertise — would conform to the law.
"WTiat I was trying to get at is what philosophical responsibility
do wo have in Government? I am concerned about stockholders losinir
id
if
(100)
?G. RICHAED KLEINDIENST TESTIMONY, APRIL 27, 1972, 3 KCH 1736
1736
f
Mr. Kleindienst (continmii:;). "The nondivestiture of Htirlford
but they have to do othei' things.'' 1 said, "If that is -good enough for
you that is fine \\-i(h me" and ^-e called up Rohatjni.
The Chairman. We vAll recess now until after the rollcall.
(A recess was taken.)
The Chairmax. Let us have order.
Senator Bayh, proceed.
Senator Bayh. Mr. Khendieust, the whole thing is rapidly moving
toward the witchmg hour.
The whole sum and substance of the reason for subjecting you and
various indi\"iduals associated wth ITT to these hearings goes to the
thrust of the Government case against ITT and why its position was
changed. V\'hen we just left to go to vote I think you said you really
did not discuss the memorandum, the McLaren memorandum, v,-ith
Mr. McLaren. That you just took his judgment and he said lliis is
what ought to be and you just initiated it; is that accurate?
Mr. IvLErvDiE.NST. 'Well, he outlined in precise detail his projjosed
framework for a settlement, and gave me his reasons for it. Those
were very persuasi\e reasons.
Senator Bayit. And those reasons were, again?
Mr. Kleixdienst. Beg you pardon?
Senator Bayh. Those reasons were, again?
Mr. IvLEixnTEXST. Well, he had become con\iuccd vnth respect to
the financial implications involved in the situation, having beconje so
convinced because of ihc sensitive relationships of Hartford to the
ITT conglomerate, that if they were going (o keep that iheii they w ere
going to be rcq\.iireu to divest thcmseh'es of other assets substaulially
ecjual to Hartford, and also assets that would tend to reduce or elimi-
nate the noncompetitive aspects of the ITT conglomerate.
Senator Bayh. Could I read from the memo to refresh your
memory
Mr. KLETXDiE.NyST. Surc.
Senator Bayh (continuing). To see if the substance contained in ;he
memorandum was discusseil vith you because it is complicated.?
Mr. Kleixdiexst. Surc, you certain!}- may.
Senator Bayh. Did Mr. NIoLaren suggest in discussion or did you
read what it says in the memo, and it saj^s:
T]v> will cripple IT'i^ financially and seriously injure ils ^.iO.OOO .~tAckho!ucr>:.
K<soiui^illy, ilii^ 1^ l>','cau~i' ITT |):iid a S.')00 million picniiuai for Hariford **"*■. Tl.t.-
rpsul'i, ^^e arc toid, would be a loss of well over iSl l)illiou in ITT C'.'inm.'i". .smck
value, a weakened bul.ince sheet, and reduced borrowing capacit.}'.
Did that
Mr. Kleixdiexst. That is what I meant to implv when he suiu
that he had become persuaded with respect to the financial iinpaot
of a divestiture of Hartford.
Senator Bayh. Then he says:
V.'o have had a "^tudy made by financial experts and they substantially confirm
ITT's claim as to llie effect of a divestiture order.
Mr. Ki.EiNniEXST. Well, I am sure he must have alluded to that
bui 1
bcuiitor Bayii. In otlier words, the thrut^t was the danir.ge the .
divestiture would have on iTT stock?
Mr. Ki^Eixnitx^r. Yes, sir; that is the leason Judgv^ M.'I.aren
chi!ULi'}d his mind, the variety of financial reasons, the bah'.i.co of
(101)
8. On July 31, 1971, the ITT cases were finally settled. V/hcther
ITT would have to divest itself coinpletcly of Grinnell was a principal
matter of consideration betwi^cn June 17, the date of IvIcLaren's pro-
posal, and July 31, and in ITT's eyes, a matter upon which any
settlement hinged.
According to McLaren and Kleindienst, McLaren and his staff
were responsible for the settlement. Kleindienst did not talk with
McLaren about this matter at any time from June 17 until July 30.
Mitchell and McLaren never talked with each other.about the cases.
There exists no testimonial or documentary evidence to indicate
that the President had any part, directly or indirectly, in the settle-
ment of the ITT antitrust cases.
McLaren was unaware of any financial commitment by ITT in
regard to San Diego's hosting of the Republican National Convention
until long after the negotiations had terminated. McLaren has stated
ITT's contnounon had nothing to do with the settlement.
Page
8a Affidavit of Harold Geneen, dated June 12, 1972; 4-7. . . 105
8b Testimony of Richard W. McLaren, 2 KCH 113, 361, 125,
116-117, 144, 174t 110
8c Testimony of Richard G. Kleindienst, 2 KCH 142, 99,
3 KCH 1732-33, 1736/ ^^
8d Testimony of Felix Rohatyn 2 KCH 119- ^^^
8e Testimony of John N. Mitchell 2 KCH 541-.- • - • 123
41-566 O - 74 - 8
(103)
_ 2 - Page
8f Testimony of Richard W. McLaren 2 KCH 139 124
8" Remarks of Richard W. McLaren on Face the Nation
(3-19-72).
126
Ji
8A. HAROLD GENEEN AFFIDAVIT, JUNE 12, 1972, 1. 4-7
-_.. _____„___„_____x
In the Matter of
TRANSACTIONS IIJ THE SECURITIES
OF INTERNATIONAL TELEPHONE AND
TELEGRAPH CORPORATION
File No. HO-536
STATE OF NEW YORK
)
■j COUin'Y OF MEV; YORK )
ss,
)-i
HAROLD S. GENEEN, being duly sworn, says:
1. I am the President and Chief Executive Officer of
International Telephone & Telegraph Corporation ("ITT").
2. I submit this affidavit to provide the Commission
with information concerning a rough draft memorandum dated May 5,
1971 (Exhibit A hereto) which I prepared for the use of Internal
counsel at ITT.
3. The background of this May 5 draft memorandum is as
follows :
In about January 1971, I was informed that Assistant
Attorney General Richard McLaren had rejected a proposal by ITT
to settle the three antitrust cases pending against it and had in-
quired why ITT was so insistent against having a divestiture of
Hartford Fire Insurance Company ("Hartford") included in any
possible settlement. V/e understood Mr. McLaren's question to mean
i that it would take a detailed financial and economic presentation
II •
! on the importance of Hartford to ITT to persuade the Justice
(105)
■ 8A. HAROLD GENEEN AFFIDAVIT, JUNE 12, 1972, 1, 4-7
'' management and other problems which v;ould be involved in a possible-
l|
'i total divestiture of Grlnnell and the importance of Grinnell to
I'lTT's diversification.
li
i| It is my recollection that after receiving a copy of "
i
! Mr. Bohon's May ^ memorandum, I then dictated a rough draft memo-
!i
;. randum of my thoughts on this subject, which is the memorandum
|i
; dated May 5, 1971 (referred to in paragraph 2 of this affidavit).
[•.
It is my recollection that I sent this rough draft memorandum to
• Mr. Bohon. I do not recall whether I also gave a copy of this
I* ' '
|i draft memorandum to Mr. Rohatyn, but I may have done so.
In the course of my conversations with Mr. Rohatyn, I
. rec^ognized that his statement to Mr. Kleindienst on April 20 con-
cerning a divestiture of Canteen and Grinnell might be interpreted
i: as a commitment as to the outside limit to which ITT would
jj be prepared to go. Accordingly, I agreed that if the subject of
!• . . . -
i possible settlement terms came up in any subseqent meeting with
I the Justice Department and he was not successful in gaining accept-
ji a.ice' of the idea of only a partial Grinnell divestiture, he could
' fall back to the statement he had made to f'Ir. Kleindienst on
11 - ■ .
;' April 20. It was this statement by Mr. Rohatyn that I refer to
]i in paragraph 1 of ray rough, draft memorandum of May 5 as "the offer
; of Grinnell."
However, because I earnestly did not believe that a
total Grinnell divestiture was really necessary from the Justice
Department's standpoint, paragraph 2 of my May 5 memorandum goes
! on to set forth possible courses of argument for counsel to
develop on this subject in preparing for any future meetings. It
las my thought that vje should try to persuade the Department of
(I
jl Justice that a partial divestiture of Grinnell 's Fire Protection
[[Division should really be sufficient to satisfy the Government's
(106)
8A. HAROLD GENEEN AFFIDAVIT, JUNE 12, 1972, 1, 4-7
ii
li Antitrust theories. We had won the Grlnnell case decisively on I
h I
^ the r.erits, and the Fire Protection Division v;as the' only portion i'
ji of the conpany involved in the proposed appeal by the Governmsnt .
i| I felt strongly that it would he manifestly unfair and unnecessary
i| for ITT to be required to divest all of Grinnell when there v:ere
. l! not even any anti-coinpetltive charges involving most of Grinnell 's
1. business operations. I understand that Mr. Bohon then prepared a
;■ final memorandum dated May 7, 1971 (Exhibit E hereto), using cer-
[\ tain of the material in my rough draft memo of May 5, v;hich com-
!j munlcated our final suggestions as to the points Mr. Rohatyn
' might make if the subject of a possible Grinnell divestiture
i[ should come up. Our position in this respect is set forth in
I-
jl greater detail in another Hay 7, 1971 memorandum prepared by Mr.
ii
n Bohon, captioned "The Grinnell Antitrust Case" (Exhibit F hereto),
.; which was also given to Mr. Rohatyn.
il k. After Mr. Rohatyn met with Mr. Kleindienst on May
I
'■' 10, he reported to me that the conversation was essentially con-
\\ fined to a repetition of the economic and financial points made
i!
': during the April 29 meeting and in the follow-up letter of May 3.
i!
!i
I; Mr. Rohatyn said that he briefly mentioned that the Justice
Department should not require ITT to divest any portion of
, Grinnell other than its Fire Protection Division since that v;as
I
l| the only part of Grinnell which v;as involved in. any potential
antitrust problems. But, Mr. Rohatyn reported that Mr.
Kleindienst made no response to this point and that there was no
li
" discussion at all of any possible settlement terms.
I| 5, Thereafter I received no further Information about
;■ the Justice Departrient ' s reaction to our economic presentation
(107)
J
8A. HAROLD GENEEN AFFIDAVIT, JUNE 12, 1972, 1, 4-7
J until June 17, 1971 when, as I have previously testified before |
!! the Corrjnission, I v.'as told by Mr. Rohatyn of a telephone conversa-
( fcion he had had that morning v;ith Messrs. McLaren and Kleindienst,
i in which they informed him that the Justice Department's "nego-
,■ tiating position" for a settlement of the three antitrust cases
■I
• would permit ITT to retain Hartford but v;ould require divestiture
:; of four large companies - Canteen, Grinnell, Avis, Levitt - and
.1
i' V7ould impose severe restriction against future domestic acquisi-
tions and against possible reciprocity practices. As I have also
'; testified, both Mr. Rohatyn and I v/ere surprised and dismayed by
■■ that "negotiating position" since we considered that the price
!' the Justice Department v/as suggesting for settlement was "very
i| steep", and was one which in no event would we recomjTiend that ITT
■ !
',: accept (Tr. 9-12, 19). Prior to that time - as is shown in my
li
May 5 rough draft memorandum - the maximum voluntary divestiture
which I had even contemplated vras divestiture of the two other
companies whose acquisitions were directly challenged in the
Government's lawsuits. Canteen and Grinnell. And even in that
respect, as is illustrated by my May 5, 1971 rough draft memo-
'i randum, I was extremely reluctant for what I sincerely considered
to be very valid reasons to agree to any complete divestiture of
Grinnell. Furthermore, I should emphasize that any v/illingness
on our part to even consider a divestiture of all of Grinnell was
; only in the context of an overall settlement which would require
ti
i| divestiture of two companies - Grinnell and Canteen. Certainly,
;t
.1
ij when the Department of Justice, or June 17 and thereafter, In-
'i sisted upon a divestiture of the four large companies, a total
divestiture of Grinnell from my point of vievf was simply out of
the question.
(108)
J
aA. HAROLD GENEEN /IJTIDAVIT, JUNE 12, 1972, 1, 4-7
I! 6. As the Coipjnission Is aware, Kr. McLaren diGacrced
!, for come tlmo ivith our position that a co.Tiplete divestiture of
i,
l:'''-inneil should not be required as part of an overall settleiTient
;— of the three antitrust cases. It v.'as not until July 30-31, 1971,
\ v;hen a settlement agreement vfa_s reached, that he v;ithdrev; from
i
j, this position.
Hai'&l^/3. Geneen
I; Sv7orn to before me this
|'/c^7^day of June, 1972
c£uJ^^iJU
!(7^
jcvc- A. • ^r •.v.r.os
Net.-.:-/ T.-:<:. ~ :•■: c' T.'r.v York
No. J.n.i''".'" ' ■ ■■ ■:• 'I:-- ju County,
C.-i : . ■••. ;":. ." Vor"; County
Com-'-.HCi.;:. -;:..;-i l.^arch 30, 1973 '
(109)
8B. RICHARD MC LAREN TESTIMONY^ MARCH 2 AND 8, 1972, 2 KCH lid, 361,
125, 116-17, 144, 174
I
113
negofiatious. Also, with respect to Canteen, he inquiieil if we would
be willing to let ITT keep after-acquireil properties, that is, those
houijht or constnieteil after the main aequisition. With respect to
Grinnell, he iirgued that ITT should l)e permitted todiveslonly [>x\vt
of Grinnell. that is, the fire proteciioa business, which had been dis-
cussed (luring the trial of the case. With respect to Levitt, he raised
the after-acquired proi)erty point and also inquired about retaining
ox'ei'seas jiroperties. He protested that there was no good antitrust
I'eason why ITT shoukl be forced to divest Avis. Then he asked aiiout
the uegotiatibility of our provision on no acciuisitions over SIO million,
and so forth. I told him we wouKl negotiate on details, but that the
basic provisions of the pro[)osal were firm.
Witlun the ue.vt few days we agreed internally that Carlson and
Widmar should handle the negotiations, and by Juiu' 30 Carlson and
Widmar had so advised Sailer, and had had a discussion with him con-
cernhig i)rocedure.
On July 1, I met with Sailer, Carlson and Widmar and after a verj'
short session, principally covering the points I had discussed with
Sailer on June 24, I left Carlson and Wiilmar with Sailer to continue
the negotiations.
Negotiations between Carlson and Widmar ton the one hand and
Sailer on the other hand continued through the month of July — a
])art of which time I think from about July 10 to Juh' 20, I was in
London at the ABA meeting — and in the last few days of the month,
Carlson and Widmar advised me that the matter was about wound up
and that it would be helpful if I would sit in on one or two sessions to
cover some final points. On July 30, I agreed that we would accept
divestiture of the Fire Protection Di\nsiou of Grinnell, rather than
insisting on full divestitiu'e. I did so because Messrs. Carlson and Wid-
mar. with Mr. Hummel concurring, felt that sejjarating the Fire Pro-
tection Division from the rest of Grinnell wouki be a i)roconiiietitive
step, ])utting the rest of the industry on a more even competitive
ba.sis with Grinnell, wliich incidentally was the leader in that particular
industry, which had had a conrnetilive advantage by reason of its
vertical integration and its broad contacts in the construction busi-
ness.
There were certain other minor points still in dispute, and our meet-
ing adjourned on tlie evening of July 30, which was a Friday, for Mr.
Sailer to consult with his client. We reconvened our meeting on Satur-
day morning, July 31, and ironed out the final points. Mr. Sailer then
contacted ITT — and I believe they polled the directors for final ap-
proval of the proposed settlement by telephone during the day. I
then jirepared a i^ress release, for immediate distribution, announcing
that we )iad reached an agreement in principle on the terms of consent
decrees which, if approved by the courts, would terminate the three
cases. This was done in order to head ofl" any further newspaper
speculation, and any possible insider trachng when the markets re-
opened on the following Monday. «%
In conclusion, ^^vaut to emphasize that the decision to enter into j
settlement negotiations with ITT was my own personal decision; ■
I was not pressured to reach this decision. Furthermore, the plan of
settlement was devised, and the final terms were negotiated, by me .
with the advnce of other members of the Antitrust Division, and by I
no one else. ^^
(110)
8B. RICHARD MC LAREN TESTIMONY, MARCH 2 AND 8, 1972, 2 KCH 112, 361,
125, 116-17, 144, 174 ______________
361
'Jliai, !is you inisy rprnember, is a j)art, of your jncpaicd stateiiieut
iiiul api)i';>vs al patre IG [of tlie lypewiitteii copy] of llio record.
Mr. McL.vuEX. Yes. I tliiuk I used the lenn ''discu-ss" Ihere in tlie
bcn^e of 'Vonsult with."
Perhaps, the Senator has in mind one of the nienioranduins we tui-n
in whicli indicates that I sent the Canteen case- up to the Attorney
General when I initially recommended suit.
J have reviewed the situation there. Mr. Mitchell had listed Conti-
nental Bakery -as a former client of his former firm and on!}- indicated
that it Jiad later been acquired by ITT. I think what happened
A\iis th:it I .sent the proposed case up, and then he telephoned ma
about it and said he was disqualified, and then h.e sent it down to
Mr. Kleiudienst. I thn\k that was the extent of any talks 1 had with
liiin.
Senator Kexxedy. And Senator Hart, in discussion, questions, with
Mr. Klcinciienst, said:
"What discussions did you have with John Mitchell with respect to
any aspects of the ITT cases?"
Nir. Kicindienst said "None," and Senator Hart said: "Mr. Mc-
Laren, Jydge Mcl^aren?"
And Judge McLaren said:
"1 had none, sir."
Mr. IVlcL.\i{EN. I think that would be correct. There is a "buck"
slip showing that the Attorney General's executive assistant simply'
bucketl the matter down to }vlr. Kleuulienst.
Senator Kexxedy. Mr. C'hainnan, in the Department documents
made a part of the record of this lieuiing there is, as Mr. McLaren
just mentioned, the memorandum from Mr. McLaren, dated April 7,
1909, addressed to Mr. Mitchell which states as follows:
The attorneys for ITT are coming in to talk about the Canteen acquL-^ition
tomorrow moriiiug. I expect lo tell them we are recommending suit, including a
prompt motion for temporary restraining order, unless the merger is abandoned.
And the second document is a memorandimi dated April 7, 19G9,
from the e.xecutive assistant to the Attorney General, addressed to
Mr. Kleindienst, which reads as follows:
This is a proposed civil antitrust complaint to prevent ITT from acquiring
Canteen Corporation, a nationwide food service and vending company.
This looks like a good case under section 7 of the Clayton Act. There is a
vertical aspect in that Canteen will be in a position to muscle its competitors
and poten'ial competitors out of food service and vending at the installations
of ITT and its affiliated companies.
Canteen and ITT will also have the power to expand the former's business by
anticomjjetitive reciprocity action directed at suppliers of ITT and iis subsidiaries.
Moreover a:^ alleged in the complaint, the merger will tend to cause similar
mergers by Canteen's competitors simply seeking protection agaiast the effects
of this one nr aggressively seeking similar comi)etitive benefits.
Dick McLaren has talked to the Attorney General —
and it says "A.G."
about this case so that he is aware of it. I don't believe he is aware that it is now
"ripe." Vou may want to talk to him about it on the phone.
And then it continues:
As far as your signing the complaint is concerned, I dare say you can scratch out
the A.G.'s typed name and then sign yours as Acting Attorney General.
And, then, at the bottom of the memoriindum there is a hand-
written notation: "To McLaren. O.K."
(Ill)
8B. RICHARD MC LAREN TESTIMONY^ MARCH 2 AND 8, 1972, 2 KCH 213, 361,
225, 116-17, 144, 174
125
>[r. 1\i,kixoit;\>t. N[y answer is categovic-aliy "No", SL'ii:it<->i'.
ScnnUn- Uakt. JikIlcc McLatvu?
.\fi'. McL.vKKN. Absolutely not. Tlio Atfonioy General did not talk
to nie al.iom the ease. I did not talk to liini about the ease. I never
ju-ard of y\v-^. Beard, if thai is her name, until this thinp; broke, and
IcnowiuL; whai J know about this whole settlement thing, her nienio-
randuin is absolutely iiieredible.
Mr. fvt.EiNDiENST. I will join in that statement in total.
Senator H art. And, Mr. MeLaren, your testimony is that in the '
filing, the iniiiatini: of the oritrinal aetion airainst ITT in this series
of ea-e-. you simply presented your recommendation, with the
lawyer's summary argument as to why, and then Mr. Kleindienst
a'Toed th.at same'day to file action; is that right, and did in fact sign?
Mr. Klki.vdien'st. Yes, sir.
Mr. McLaki:n. I would not know whether it was the same day or
not. Senator. I would kind of doubt it, frankly. It was my custom to
send eases up maybe 10 ilays ahead, or a week ahead, or sometimes 3
or 4 (lavs aheail, when we want them filed, and it wouUl take a little
while to get approval. Tliese gentlemen had other things to do, and
so on, but basically I sent the memorandum up, and in due course it
was api^roved and I filed the case.
Senator Haut. I think some of us are aware that a suggestion has
been made that even to initiate these lawsuits you had to threaten to
resign .
Mr. McLaken. That is not so. I never threatened to re.sign, Senator.
I told you earlier I had a three-part understanding with the Attorney
General and with Mr. Kleindienst. If they had not kept their part of
that bargain I would have resigned. I would not have threatened to.
Senator Haht. Well, I will pass. I know that there are other
questions and perhajis othei^s will cover them. Knowing the comple.Kity
that attaches to a significant antitrust action, 1 have wondered what
goes on, how it is decided whether to sue or not, and when the decision
lias been ma<le to sue, what it is that persuades a consent decree to be
obtained. I tliink that uo matter how complex and how dillicult, and
how argumentative and how many economists you can get on 15
sides, anrl how many lawyers you can get on 15 sides of it, the time
nuiy be now to attempt on the part of an oversight subconmiittee to
get into detail and to study all of the factors that are at work, which is
for another clay.
Bat, may I pass at this time, Mr. Chairmaa.
The Chair.max. Senator Kennedy.
Senator Kennedy. Mr. Chairman, thank you. I think both Mr.
Kleindienst and Mr. McLaren, and Mr. Kohat\m realize full well
that none of these questions are terribly easy for those who are posing
them, and certainly for those who are responding to them.
And I think in light of what Mr. Kleiiitlienst requested, that we try
and develoj) the fullest |)ossible information and facts on these cases,
1 think and I hope all of us feel we are asking him in that light, and
that you woukl understand certainly our responsibility in asking in
that resiJcct.
Some of the areas that I would like to inquire into have been touched
on, both by Senator Hart and by j'our own comments, but in any
event 1 think it is useful and helpful to the general understanding to
l)erhai)s liave these responses, along the lines of questions that
(112)
8B. RICHARD MC LAREN TESTIMONY, MARCH 2 AND 8, 1972, 2 KCH 113 361
125, 116-17, 144. 174
8b
116
memorandum allegedlj- wTirten b}" Mrs. Dita Beard. Mr. Hume
asked whether the subject of that memorandum had entered into ii:y
conversations with the Justice Department. I flatly denied that
anything having to do with the Sheraton commitment had ever been
discussed by me with Mr. KJeindienst or any other representative of
Justice.
Let me say now that I do not know Mrs. Beard and, in fact, had
never heard her name before talking ■with Mr. Hume. Moreover, I
never knew of an ITT commitment of the San Diego Convention
Bureau until December 1971, when I read about it in the public press.
This was 6 months after the antitrust settlement had been reached.
Therefore, it was literally impossible for me to have participated in
any conversation regarding the commitment.
the settlement requires, so far as I know, the largest divestment ia
the history of world enterprise comprising companies-^R-ith sales ap-
projomating $1' billion in assets. Even apart from forced sale, I caa
think of no case in which a single owner voluntarilypart-ed with values
of this magnitude. As a director of the company, I considered this an
extremely harsh -settlement, -arrived at after protracted and difficult
negotiations between-representatives of Justice and ITT.
If I may, sir,*ior the record, I would like to place the dates of my
meetings with Mr; KJeindienst.
The first one took place on April 20, 1971, where I gave orally some
of the policy considerations we thought relevant. -Sir. Kleindienst
stated that since the Attorney General had disqualified himself, the
ultimate decision with respect to any litigation would necessarily
be his. He said too he would make that decision based on Mr. Mc-
Laren's Antitrust Division recommendations, and told me any
presentation should be made to Mr. McLaren and the Antitrust
Division.
The next meeting took place on April 29.
This was followed by the meeting of May 10.
The ne.^ meeting was June 29.
The last meeting was July 15.
Thank you, Mr. Chairman.
/^ The Chairman. Judge McLaren, you say you were solely responsible
I for this settlement, vnio. your staff?
I Mr. McLaren. I'm sorry. I couldn't hear the last sentence.
* The Chairman. Did I understand you to say that you were, you
and your staff were solely responsible for this settlement?
Mr. McLaren. That is my testimony, yes. sir.
The Chairman. Now, did you know anything about a 8400,000
contribution from ITT to the city of San Diego?
Mr. McLaren. Absolutely not. I knew nothing about any of this
whole business, or even that the convention was going there until I
read about it in the newspaj>ers where someone tried to make a
connection between an alleged payment and the settlement of the
case.
" The Chairman. Now, did Mr. Kleindienst. Mr. Mitchell, or an3-o'.ie
else attempt to influence your decision in this settlement?
Mr. McLaren. The direct answer to your que.stion is "No, they did
not." I would like to add this: when I wes first interviewed by Mr.
Mitchell and Mr. Kleindienst in the Pierre Hotel in December of 19GS
with regard to coming down here, I had an understanding with tliem
(113)
8B. RICHARD MC LAREN TESTIMONY, MARCH 2 AND 8, 1972, 2 KCH 113, 361,
125, 116-17. 144, 174 .
117
wlu'u they odoivil Tiic tlio jol). T made three coiuliiions: tliat \vc would
have a vi'zoroiis aiitiLrust pro.^fain; that we would follow inv beliefs
\^ii!' r(\;;Mrd to what tlio Sujtrenie Court cases said on eonirionierate
Ml ••'•j;c!N. and the restruelurii)<r of tlic imlustr}- that I thought was
coiiiip.L;- aboiit iu an ahnost itiiotic way; and third, that we woidJ
do. idi' all matters on tlie merits, there would be no political decision.
TIh" C'haikmax. Xow, is thai correct in this case?
Mi'. MrljAHi:N'. That is correit in this case, absolutely. I mieht
add that the Attorney- General and Mr. Ivieindienst lived up to their
eon^.rnitineiit.
'i"he CiiAiuMAX. .Senator Ervin. ^
S<'naror Euvi.v. As 1 construe your testimony, Judge McLaren, J
Mr. Kleiuiiienst did not actively participate iu tlie negoualion of the. 8
setilenieiit at all?
Mr. McLarex. All Mr. Klein.dienst did was arrange that one
liiceting. as far as I am concerned. And during the course of that
meeting, when JTT mades its ])resentation. I was the chairman of the
meeiing. Mr. Kleindienst sat off on m3' left, and listened, so far as 1
recall, and, well, none of us had much to say, but he did not do really
anything in an\' stage of the negotiations except arrange for that one
meeiiiig and ajjprove my proposal for settling the thijig after I became
confinced that the 2.50-odd-thousantl shareholders of ITT would
su.fl'er more than a SI billion loss if we proceeded and'were successful
in forcing divestitme of Hartford.
Senator Euvix. Did he make any suggestion to you as to what the
details of the negotiations should be, or what the details of the
settlement shoidd be?
Mr. McIjahex. He did not, aiul I did not even keep him informed
as to what we were doing in the itego'iatio'.is until — -I think he is
])rob;ibIy right — I telephoned him the night before we actualh' put the
fliiug out and said I think that they are going to cave in on the last
couple of points and we will probably announce it tomon-ow.
The Chair.max. And that was the course 3'ou usually followed to
keej) bini advised of matters in yoirr department?
Mr. McLaren. Matters of major importance, yes, sir.
Senator Ervin. I understand from the testimony that has been given
that Attornej' General Mitchell absolutely discjualified liimself from
an}' coiniection with these suits and proposed suits, and with the nego-
tiations on the settlement, on the grounds that his firm at one time had
rei)resented one of the affiliates of ITT?
Mr. McLaren. Yes, sir, that is correct. "^
Senator Ervin. In other words, your testimony is that you and I
ilic members of the Antitrust Di\-ision staff conducted the investiga- ■
tions, and that the deci.sion of the Government was based solely on the
opinions which you and the members of your stafl' in the Antitrust
Division had after considering all of the matters involved, and all of the -
im])lications of those matters? f
^[r. McLaren. That is right, sir. "^
Senator Ervin. Now, Judge, I practiced law a long time, and I have
participated in conipromises in many cases, never one of anj' great
magniuide, b\it m}' experience is that when peoi^le settle litigation they
do so for api)ro.ximately the same reason that .Hamlet stated in his.
soliloquy: they are uncertain as to what the courts are going to.
;ii4)
8B. RICHABD MC LAREN TESTIMONY, MARCH 2 AND 8, 1972, 2 KCH 113, 361,
125, 116-17, 144, 174
144
Mr. Kleixdikxst. "Well, I imderslood tliat Mr. Rolmtyn linJ orCr,
ono function in tliis sitnatioii. That was to first make a financial-eco-
nomic presenlaLion to the Department. That v;as doiie o)i April £:('.
Then, when a\Ir. McLaren broupit up the proposed settlement oritline.
I presume because of the fact that Mr. Kohatyn was the head of the
company at the April 29 mectiiig is why he wanted to call Mr. IJoha-
tyn on June ]7 to tell him what we would be willing to do.
I understand that thereaftci-. based upon .ludge McLaren's trst!-
mony, he then negotiated the settlement with the company lawyers.
r Senator Ivf.nnedt. He was the one who worked out the settlcmcr.t
. with the I.T. & T. directors?
M^r. KixiXDiENST. "With the lawyers.
Senator IiIennf.dy. With the lawyers ?
Mh Kleikdjenst. Yes, sir. I never did anything in that regard.
_ Senator Kexxedy. !Mr. McLaren, did you gather the imi)ressioT'.
that the attorneys of I.T. & T. underetood this relationshij), too? I
mean, at any time, did any of the attorneys for I.T. & T. say, Mr.
Eohatyn is the fellow sort of to work through ?
Judge McLakex. I had never heard of Mr. Rohatyn before tliis
April meeting. Then, when we came up with our proposition in June.
I told Mr. Iiohatyn that if that %vas acceptable, we would, from there
on. deal with the" lawyers. AVhen Mr. Sailer came back the next- d-Ay
and said, OK let's sit down and negotiate, I took that— particularly
because of the information he had; it was obvious he had gotten it
from Kohatj-n.
From tliere on, I dealt with their lawyers.
Senator Kexxedt. AVell, you can see part of the prolilcm. ITT. ':v.
its press release, said agreement was reached with the Justice De]virr-
ment only after hard negotiations between "our outside legal counsel"
and thenAssistarit Attorney General, Richard McLaren, and his .st.in.
'"Neither Mrs. T^eard nor any other legal counsel were aiithorized lo
carry out such negotiations."
Judge McLakex. That is true.
Senator ICexxf.dy. I thought you just said you felt that yiv. Koharyri
was the negotiator.
Judge McLauex. I said I only had two contacts with him. and v,-o
put it up. an outline of settlement to the company, take it or leave it :
if vou are going to take it. come back and we'll negotiate it out wirl;
your lawyers.
They sent their lawyers in. and from tliere on, v.-c negotiated w;i;:
Jheir lawyers.
Xow. there are a lot of things we negotiated about. There arc n!;.::y
details. Senator. If 1 were to go back and reconstruct. I could proba'/y
spot things in the decrees that were points at issue that they wc re very
concerned about, and so on and so on. Some of them are cf so:;>i.-
im])ortance.
As Mr. Kleindienst said, we changed our deal, in effect, on Grinne^i.
"Wc also changed the wording of the "Xo further acquisitions" prcvi
sion. I originally had iiad in there that on accpiisitions of >^Ki mil'io:;.
thev had to aflirmativcly prove that it would not h.ave an advi
etlect o!i com]jctition.
' ^^c finally came to the conclusion that that was prob.nbly unroalist::-
and we developed a new formula. Those weie imponant ncgt'tiaiiti:;?
re-
(115)
8B. RICHMD MC LAREN TESTIMONY, MARCH 2 AND 8, 1972, 2 KCH 113 361
125, 116-17, 144, 174 '
174
INir. ^IcLaron, I have in my liaml a copy of the flc'ci(i\ Vwd consent
decree. It is 15 typewritten pages o)i leual -sized pa[)C)'. It took q'iite
a wliile to pound that out. did it not?
Judge LMcLare.v. Yes. sir. I thiiik tJiat is onlv one of tlie tliree, is it
not?
Senator Hru-ska. This is (he one in the ITT-Enrfford case, that i?
right.
Judge McLarhx. But there were three cases.
Senator Hruska. If tliere were tliree decrees, tlien we would have lo
have three bundles of pajier like that which I have here.
Judge iloLAnEK. That is right.
Senator Hrupka. How many conferences would theie ha\-e been by
way of negotiation with the resj>ective legal stafi's of Xhx' DejiartnieMr
of Justice, Treasury, the lawyers representing the ITT and (liese other
corporations'?
How many conferences do you think that would hare been?
Judge McLaren. A\'ell, just as a guess, Senator, there proliably were
20 or so. Jkit 1 think the lawyers think of negotiations ns the kind of
thing that started after I made our ])roposa1 to Mr. Kohatyu and b.e
came back and said — and his ]aw3'er asked for an appointment and
discussed the broad basics of oui- proposal, and I told him that that
was the ])attern that we were going to stick with, but we would nego-
tiate as to all the details of the thing. And from there on, starting
about the — I would guess around the 24th of Jinie — he called me. I
tliink, on the ISth and we made an appointment for the •Jntli. It is in
my prepared st^itement. And from there on, that was really the first
negotiatin.;;; session on the 24th, when he came in and wanted tn kr.ou-
how broad the negotiating limits were heiv. I kirid of laid out the ball
park.
At the end of the month, I brought him together with the two trial
men and they met almost daily, then, until the latter jiart of July, ha.m-
mering out all these details. And there were three decrees.
Senator Hrfska. Xow. then, my question is at how many of those
negotiatin<r sessions was l^Ir. Kleindienst present ?
Judge Mc^r>AREX. He was at none of th.ose .sessions. I sav a2:ain. ."-^ena-
tor, I think that I was resjwnsible for the basic pio]>osal of tJiis thing.
I was responsible personally and with my assistants in the Antitrust
Division for all of the negotiations. I do not think any lawyer wh.o
knows anything about negotiating would say that Kl lend ieiisMiad any-
thing to do v.-ith it.
Senatoi- IIrt'ska. Then Mr. Eohatyn was notified and he presmiaibly
took it ui> with his principals and that was on July Ho and the an-
nouncement was made on the .^Ist. which Mas a Saturday ?
Judge McLarex. Xo, we did not have any contact with Kohatyii
then. My dealings at that time were entiT'ely with Mr. Sailer, the trial
counsel. Fridav was the ."0th. We broke uj* and he wa- lo contact rhe
clients and clear certain things that wc had ]"i7'oposed. Tlicn he came
back on .'Saturday morning and we ironed out some more tliinirs. Then
on Saturday afteinoon. Sailer went back by te!e])hone to the ITT
people and he irot their approval. "^Hien he came back, he .-aid, v,e have
got a deal, and I put out a press release. It was my deal.
Senator IIruska. In flie negotiating sessions, Mr. Kleindienst was
not )iiesent ?
(116)
8C. RICHARD KLEINDIENST TESTIMONY, MARCH 2 AND APRIL 27 1972 2 KCH
142, 99 AND 3 KCH 1732-33, 1736
142
S-ii:''^>!- Kz:;syn::. Mr. Ki,
VOU '.'-•I'V;
vril'.i Mv. lUiWutyP., did -Mr. j*>I<jL.v> ^-n Ictv.ivr :»■>.■.;::■, t;i^.~e vai-ujus f;!C-itC-
iiiirs wlfioh yen ]':;>\' lit. mizj^J t.,-Ktay :
^fi-. j'CLi-iXDiEN-.ST. H(i knew ;ibr,iit llic April -20 meeting, ]l!^ ^vould
)ia\ 0 l;iKi\\-ji aboi;!: tlie Ajiril ii;* H't'tthig.
Seafi'or Ivexx£!)t. "Well, he whl; ih.cvi' attliaf ouo.
y.r. JCixiXDiK.ssr. Kii^ht. 1 do iiot bi^lleve i lold hini about the othcT
Scnntor Kexxlot. Yi'ell, Air. jNlcLnre.n, did j-ou kno-^ or did you
htixc ;uiy '>">"i-iy of kTioTring: i
Judge McL-'iT-EX. No^sir, I '.Tas unaware of n.ny furthc^r ineetir.-3
th;tt thoj may hnvf. litKl.
Senator IvExxrnv. Ar.d tlitre vn-ra no meinoi'iiiida or records of any
of tlv;v--;? rnc-etirjjrs ; ^r. tiirit right. Sir. Kleindioiist ?
Mr. IvLTixDr::::::.-'. I did nor, unless I\[r. Kcbatjn did. I made no
mcip.orandiun oi" tiiera.
Senator Ivextv-xdy. Ooi)ld you t^ll uslmr? the ixiv.d settle rnt-nt dii.^erpcl
frora the recomirGnoed siiftkineivt, Mr. Kleindi.^vijtj in tliis ciS3? Do
you rt'—.on-ibarthat?
Mr. Ki.r;ixT)rEX'Si'. No. sir.
Ssirator IvEXX^rur. J-.Ir. 7ucL;ircn?
?.Ir. Klxtx-diexst. Yes — Kell, luiotv .and I have had my nemorj'
j-cfroshcd. The fin.il settlement diir'srcd 1'ro?-a the recomxa.-^'^''ded Set-
tlement in th.it, instead of a completfi divesture of Griruiell, only a
divpshjre of Grinncll's fire prottcticn buslr.e-;..-; Avas r>~quir;-d. 1 r. jlieve
thiit ^va3 tiie only, r.s far as I l:nov.', the only oncFptica to v.-hat -srcis
presented to Mr. Bohatyn on June 17 on tlis teltphone. Thsro might
be sonisthing- else, butthat is the only thing I Icnovr.
Senator Ivexkedt. Is there any -rray of nnoiricj out s-r-cicificall r what
3
n
Senator KE^<^^i;Dr. ?>]>. ^.TcLarcn, could jou tell us at .what point
or.dafe. tlie trial attorneys ox the rUir.itrust Diwision ceased rasLdng
preparations for the trial ?
Judge InIcL-^kex. I would gxiess they probably started concectmtirrg
on the settlement negotiations when 1 put tham in charge of them
about July 1. I remember there were depositions on June 18 and
Senator KnxxTDr. They went ahead with those, did they not?
Judge ZdcLiJtEX. They did ; yes. sir.
Senator Kr^rxirDT. That was aft^r you notiGed thzca. As I. remem-
ber, you said you notified them on the iTth, did you not?
Judge i>rcLAPXx. Yes, that is right.
Senator Kexx-tdt. Thou at some lime, I think you indicated in Into
July, 3-ou notified ^ir. Kleindienst that you we^c prepared to make
some kind of an indication of the terms for the settlement; is that
right ?
Is that i-ight, Mr. Kleijidienst ?
Judge McLAiiEX. Xo ; Avait. Let us go back a minute. T^Hien I put the
two men hi charge of negotiations on July 1, the matter was still being'
very closely I'eld within the Department on a, what we called "nped
(117)
8C. RICHARD KLEINDIENST TESTIMONY, MARCH 2 AND APRIL 27, 1972 2 KCH
142, 99 AND 3 KCH 1722-33, 1736
99
I be-iev-o th-'X nb tb.it iii.iefckig IMr. ivIcLaren. was ju tb/^ce at bij
regularly scbc-ib.iled 8:15 taieiling in the mom.lng, so it ^Tould haro
been in. tbr-. c;ulj p^J:t oc tba moraJD^ on Jiiue 17 tbal vo cnHid Mr.
EchiiLyE. ivlr. McLarea tbyareacl to lAr. T-ioh.iljn, o-^'vr 'be tdepboaa,
his propcitd p;-;tt.leiiieufc Gtract!:re. And JMr. Robat.—i — i:p.d -^o us-id
lh& telophoac in a coafc-ien.C3 phona .^o that. both. Mr. McLvi-ren o.zxi
I could lla'.c'ji to Mr. Robiivja, and bo v/a^ rdso abl>3 to hc-iv botb of
U3 spaak — ^ud Mr. Robitpa ^-iia malin;:: ccfes vitb resp-i-ct to tbs
matters Jjivoc over tba tel-jpaoce, and br; ir-skcd somo quc-stioas about
it, -wHcb ;Mx. McLiaran ans\T9ved. I believo ?vlr. McLaren said tbat
if yo-xr cc-T-pe.aj Lj \5iUJag to appro icb thh msttar on, tbis b>?-ii3,
tb£t you car', instraot yoiu" ?.ttcmey to contact me in my oiSco und
vr.3 will co:'A;i-esce s,3tt-bo''t:f:at negotiatioa^.
Mr. EcL:-.r,;7Ti aiiid th:\r, ba had to couunvd^iciito tbat ir.forra&tlor.
-to his supftri'jv-j, and that if I.T. c: T. vfanled to go for^rard oa tbat
basis tbr--^ tbc-ir ^ttornsys v.'O'jJd ccat.ic.t 7^h■. !vIcLcircn.
I le^i^D.-:d tba'o thsy b.?.d ii-jresu to contt-.ct Mr. Ivlciaxea to discai;^
ssttlement oix tbat b?.-;!.-., bscau3e on June 29 Mr. Sobr^.tyf. s.gain
Gcms to my office, sjid bb p\u-po?3 .in coojivig to my cLacs at tb?.t
timo V7.^5 to complain abo'.it tbe r^tbsr 7.i;:id atiituda tb ..t Mr. Mcbsa-en
vr.as tckLar: ">7Ub, reapocfc to taase sottleir.ir.t .negotiations, to complaui,
about tba rritaor pnnitiTc r.?.t\ir9 of tbo settlsinsnt nc-gotiationa, and
tho po3tnr,j of tba Govemmant, and tbat'be fc-lt, in bis opbiion,^ tbey -«i^
wers -jnTcei-^oar-bla. I told b.ini that I -irould not inisct mjsili bito |
tbose sett-lr.nicnt nsjotiaticris, that tbr.t ■v;i\3- a prcbleoi between tbe j
attorneys for I.T. & T. snd ^t. McLar.'^n riud bis str.ii, and tbat ]. !
\roi:.ld do notbins^ about it. I did not rtb-.ts tbat convei-sa'doa to Mr.
IvlsLajren. 1 thi-O-k I indie?. ted to x^Ir. .Kcb^.t^-n tbr.t I was not going
to do it. '^Cb cy bad tbeir f.ttorn-sys worlrizTs; for tha jin.titTO.?t Division,
and tbat tb^y conld work on tba b!:.5i:-i outlined by Mr. 2»IcLaren
on tbat Jim.':* 17 convenja.fci.on.
. ivlr. Eobhtyn caiaa into my cfSce a.^-2.in on July 15, again for tba
same reason, and we bad Sijb3!;s.nti&ily tbe sn-me Ido.d of a coaversation.
He %Ta3 re?by upset and complaining about tbe rather bard, stringent,
ratber Latie:r:hl.3 attitude of IvIcLaren and bi3 staS vritb respect to
tbe settlement nsgotiationo. And I a;<^ain said tbe same tbing to ^Ir.
Robatyn, tbat Mr. McLaren bad outlined tbe basis of tbe settlement
negotiations on June 17, and tbat was a matter between j^^Ir. McLaren
and bia staff and tbe attorneys for bis cono.pany. I did not communicate
tbi3 visit to Mr. McLaren or anybody on bis staS.
The settlement came about on Saturday, July 31, and jMr. McLaren
-wiil go into tbe steps leading up to tbat. ISlj recollection is tbat Iv.[r.
McLaren called me on Fridaj' evening to tell me tbat tbe Government
and I.T.oc T. bad worked out a settlement in tbis matter, and tbat it
would bo announced on Saturday. I bad not talked to ^-Ir. McLaren
about any aspect of tbis matter between June 17, 1971, and tba.t Friday <
evening on Jidy 30, 1971. I woidd ordinarily bave seen Mr. McLaren I
some time during tbat period, but ba had been out of tbe country j
at tbe American Bar Association convention in London, and I do not I
beUeve be ret'omed until tba latter part of July. *«-/
But, in any event, I bad no further conversations with bim. The
next time that I saw Mr. Robatyn was on September 14, 1971, when
he came to my office, and tbat was just a very brief social visit. He
(118)
8C. RICHABD KLEINDIENST TESTIMONY^ MARCH 2 AND APRIL 27, 1972, 2 KCH
142, 99 AND 3 KCH 1732-33, 1736
17S2
Mr. IvLEixDiExsT. No ; I might have talked lo'Governor Nuiui two
or three times sinee I have been in the Gorcniracnl. I know I had owe.
conversfttiou in wliich he was interested in being a judge. And I tliink
that is tlie most lengthy conversation I even had with liira.
The Ch.\ir.max. Your time is up.
Senator Cook. Mr. Ivleindienst, just a couple of verj- short qrros-
tions. There was, as a matter of fact, a great di^'ergenco of ojiinion
M"ithin the administration relative to, not yourself but Mr. McLaren's
policy in the Antitnist Division; was there not?
" Mr. IvLEiXL-iEXPT. Not onlj- in the administration but in the
country, in the legal profession.
Senator Cook. As a matter of fact, the Stiglcr report, that lunJ
been filed, stated that, and I cjuote: '^-igorous action on the b:>;5 of
our present knowledge of conglomerates is indefensible." And the
re])ort went on to say, and I quote again from the report v.-jnch was
made to the President of the United States:
Wc strongly recommend th,".t the Department decline to undertake a pru^r.-im
of action agiiinst conjiloincrate mergers and conglomcrnte enterprises pcnilin" n.
coufercncc to Rather iiiforniation and opinion on the economic effects cf the
conglomerate phenomenon.
So there Mas a divergence of opinion, was there not, and, »=; a
matter of fact, as the result of Mr. McLaren's jxisition as head of the
Antitrust Di\-ision, the largest corporate divestiture that ever took
place h) the history of the Unit-ed States occured a? a result of In;
actio.ri;:; did it not?
Mr. Kleixdiex.-:t. Yes; not onl^y that, but an agrecmenl ag.-nnst
further aeq'.tisitions.
Senator C^ook. For a period of 10 3'ea;s.
Mr. Ki.EixDiExsT. Flight.
Senator Cook. And as a matter of fact, at. the time tiiat tliis
debate >vas going on and his actions were going on, tlie fornter l;ead,
under the former President, of the Antitrust Division took the ]io>iiiou
that the position, of tiiis administration in its antitrust policies was
wrong?
Mr. IvEEtXDiExsT. That is correct.
Senator Cook. Did ho not?
Mr. Kleixdie.vst. Dr. Turner.
Senator Cook. Thamk you, Mr. Chairman.
The CHAiRNfAX. Birch.
Senator Bavh. Mr. Ivleindienst, the last question I asked iieforc
deciding there was nothing to be gained in pursuing; other quesiions
was something to the effect that were you nv\are of the iiai'isden
rejiort and you — I mean, were you aware of its specifics — i\n<.i you
said, as I recall, you were not aware of atiy of the specifics at all?
.Nfr. ]vLEiNDiE\ST. Ncver read it.
Senator Bath. And, as I recall the hearing, at least part of th.e
answer to the last question was that your reliance on Judge .McLaren
was really the whole reason this case was resolved as it was.
Mr. Ki.EiXDiEXST. You mean that Judge McLaren recommended
this solution?
Senator Bavh. Yes, sir.
Mr. Kleixdiexst. That is the only reason why I went along \\ i?ii ii.
He recommended it.
Senator Bayh. Was that recommendation and the reasons for it that
compelled you to accept his judgment contained primarily iii the
41-566 O - 74 -
(119)
8C. RICHARD KLEINDIENST TESTIMONY^ MARCH 2 AND APRIL 27, 1972, 2 KCH
142^ 99 AW 3 KCH 1732-33, 1736
1733
inciiioriindiiip. tluit we h;ivc nil read? It is or. ]):ige 111 of (he letorJ,
'■.Mt'inor.iui'.iun iov ihe Dopiily Atlormn' General Ko Pioposeil Pro-
ccdni..' in ITT Morger C;isos." II' you are not familiar witli the Kaais-
(lea nu'ino, are yon fnuiiliar \\iti) tliat meuio? ««
-Mr. '\t.i:k\"dikx.st. 1 do not liave any present recollection of having
riMil it. Mr. McLaren \\oukl send me a memorandum an<l then v.hat
we I'.ii'ii.l usually do is discuss it, which would save me a lot of time
ami i> also gave him an oi)portuuity to present it, I thhilc, a little bit
more < leurly. I mitcht lia.ve read it, Senator Bayh. I do not know.
.Se;\:;ti>r B.WH. 'j'h.is is a memorandum, if 1 uiiirhi try lo a-k you to
re/re>h your mentor}-, which wa.s dateil June 17, 1971, ami wl^ich 1;'
in siin.ii' Tietail the reason whj- j'ou are recommending (lie settlement,
if it i- ipproved, and it is "Api)roved. June 17, 1971. RGK."
Mr. Ivi.EiXDiKNST. Riirlit.
."^■•;!-,itcr iJ.WH. TI;cn 1 imderstand that after this ITT was called.
Mr. Jvi.iJixniEN'ST. I'igiit.
Snriator liAVH. Does tiiat refresh your memory?
Mr. IvLEixniE.N'ST. Yes, it does. Now I know the memorandum you
are t:i!kiiig abo'.il. Whether I road it or not in its entirety is dountful to
Jiie. Mr. SlcLaren woiihl have discussed it witli me and 1 would ha\'e
approvccl it in writing just so it vvotdd show it was ajrproved in his
file. After that we called Mr. Roiiatyn and Mr. McL:n^n outlined the
broad outlines of the proposed selilem.ent to him.
S-juator B.WH. Wlien a man like Judge McLaren, your assistant,
makes recommendations like that, of this con-^er[uence, is it your
judgment to take the memorandum and its discussion at face value or
do you try to substantiate it with, froxn other sources? «
I\fr. Kleinuie.\st. No, 1 have never tried to substantiate a recom-
mendation or opinion of Judge Mcljaren from any other source. I
h;ive re;ul complaints or memoranda and have raised questions about
it, and then have luid a conference, and liad it cxijilained to me, and I
guess, Senator Bayh, the antitrust law is probabi}' the mostspeiializod
form of the art that we have. Consequently', you have to make a
judgment whether you have go a competent lawyer in the field, and
I do not think anybody challenges McLaren ou that; and then,
second, whether he is a man of integrity, so that when he tells yoii
s-ometiting yon know what his reason for telling you something is. I
(h.ink it would have been presinnptuous for me to go out and hire a
consultant to check on McLaren in a field of law about, which I
then knew very little and about wliich I still know very Httle, although
1 have learned a little bit more about it. "k^
Senator B.A.YH. I must say I have the greatest sympathy with yon
in your description of the antitrust law being complicated. I would
find it much more so than yon. And I woidd be inchned, I suppose,
to rely on a man with Judge McLaren's expertise. I keep coming back
to this inconsi.-jtenc}' and perhaps you can help us out on this. If we
are to accept }-onr reasoning, rationale, which I am prepared to do,
relative to the ITT case, why is it agaui you did not go along with
Mr. McLaren's advice on the Warner-Lambert case?
Mr. IvLEiNDiExsT. That is the one e.\ception, and I guess that,
hopefully proves the rule. \Tlien the Warner-Lambert situation came,
up, as I try to recollect it again, I was out of town, I got a call from
Mr. Mitchell, vvherever I was, on a Friday afternoon or a Sattuxlay
morrdng, indicating that thej' had come up with a recommendation
(120)
''• 'iit^' Z7zVsSr"kr''' ' "" ''"'' '"' "'^' ' ^^«
1736
ls\x. Kleindiexst (continuing). "The nondivestiture of Han ford
but tbey have to do other things." I said, "If that is good enough for
you thnt is fine u-ith me" and we called up KohtitATi.
The Chaiuman. AYc will recess now until after the roUcall.
(A recess was taken.)
The Chairman. Let us have order.
Senator Bnyh, proceed.
Senator Bayh. Mr. Kliendienst, the whole thing is rapidlj- moving
toward the ^\^tching hour.
Tlic whole sum and substance of the reason for subjecting j'ou and
various individuals associated with ITT to these hearings goes lo the
thrust of the Government case against ITT and whj'' its position was
changed. AVhen wo just left to go to vote I think j'ou said you really
did not discus? the memorandum, the McLaren memorandum, with
Mr. McLaren. That j'ou just took his judgment and he said this is
v,ha( ought To be and you just initiated it; is that, accurate?
Mr. Kleindien'st. Well, lie oulhned in precise detail his proposed
framework for a settlement, and gave me his reasons for it. Those
were ver\' persuasive reasons.
Senator 13AyH. And those reasons were, again?
Mr. Keeint)Te:cst. Beg you pardon?
Senator B.^yh. Those reasons \\'ere, again?
Mr. Ki.eixdiexst. "Well, he hatl become con^■ince.d witli respect to
the financial implications in\ol\-ed in the sii nation, ha\"ing Ijecoinc so
convinced liecause of the sensitive relationsliips of Hartford to the
ITT conglomerate, that if they were going to keep that then they v^■ere
going lo be re(;ilired to divest themselves of other assets substantially
equal to Hartford, and also assets that would tend to reduce oi" elimi-
nate the noneomj)etitivo aspects of the ITT conglomerate.
Senator Bayh. C'ould I read from the niem.o to refresh your
memory
Mr. Kleixdiexst. Sure.
Senator Bayh (continuing). To see if the substance contained in the
memorandum was disc\issed with you because it is complicated?
Mr. Kleixdtexst. .Sure, you certainly may.
.Senator B.ayh. Did Mr. ^IcL1ren suggest in discussion or did you
read what it says in tlie memo, and it says:
This will cripple ITT fiiinijci.ally and seriously injure its 2."'0.000 stockl^.'lders.
l/sscnti.'illy, this is becsusi.' ITi" ;j;ud a SJOO million pri-iiiiu:n for K.irifortl * * *. The
rp-u!t, we riVC Imi(!. wnuld be ii ioss of well over S-i liiliinn in ITT coniiiio:i smcl:
value, a weakenci! balance sb.?ct, and reduced borrowing capacity.
Did that-
Mr. Kleixdiexst. That i-^ what I meant to imply when lie said
that he had i:ecome persuaded with respect to the financial impact
of a divestitiire of Hartford.
Senator Bayh. Then he says:
Wc have 1 ad a study madp by financial expert.s and they substantially coi'.'irjn
ITT's c!;.iiii as to the cfieci of a dive.^titure ordrr.
Mr. IvLEixniEXST. Well, I am sure lie must have alluded lo tliat
but I
Senator Bayh. In other words, the thrust was the danu.gc the
divestiture would Inive on JTT stock?
Mr. Kleixdiexst. Ye.s, sir; (hat is the jcason Judge McLaren
changed hi;^ mind, the va'-iety of financial reasons, the balance of
(121)
8D. FELIX ROHATYN TESTIMONY, MARCH 2, 1972, 2 KCE 119
119
Mr. IvLKiXDiENST. No, sir. I thiiik one of the first nets that I
i-omtnilted j\s tiie Deputy Attorney General hi 1969 aiul thou iu
liiese r;i.--e-- ;is the Attorney General ^\■as tilin'j; tlie complaints in the
(.'iirdi-rn. Giimiflt. iuul Hartford ca-es. Mr. Mcr..;iren did, -as he does
in tho-e cmscs, prepare a prosecutinvr memorandum, and he pre-
.-ent-s it to you and he diseusscs it with you. After the di-scussiuii, I
signed the eoiaplaiut.s that day in my oflices, and till three cases, and
they were 'presented.
'J'he ("n 'vUiM-VX. You had to authorize the appeals also, ilid you
not?
Mr. Kleixdienst. Yes, sir. I believe the statute requires the
atl'rmatire participation of the Attorney General in many aspects
of antitrust law.
Senator H.vut. What iliscussions did you lia\e with John Mitchell
with respect to any aspect of the ITT case?
Mr. IvLiEVDtEx.sT. iS'one.
Senator Hart. Mr. McLaren, Judge ^fcLaren?
Mr. McL.^REX. I had none, sir.
Senator H.\rt. I quess I should a.sk Mr. Rohatyn that same c|ues-
tion.
Mr. KoHATYX. None, sir.
Senator Hart. Because you thought you were negotiating a settle-
ment; did you not?
Mr. RoHATvx. I did not think that I was negotiating a settlement,
.sir.
Senator Hart. What did you think you were doing, givmg an
economics course?
Mr. RoHATvx. I was trying to, sir.
Senator Hart. You -were trying to negotiate a settlement?
Mr. RoHATVx. No, sir.
■" Senator Hart. Trying to give an economics com-se?
Mr. Rohatvx. I was tr3"ing to make an economic case, sir, of hard-
sliip.
Senator Hart. To persuade a particular settlement to be arrived
at, did you not?
Mr. RorrATYX. Persuade Mr. McLaren and the Antitrust DiA-ision
that this position on the Hartford or the divestiture of Hartford by
ITT would be a very harmful thing to the company.
Senator H.\rt. Now, what discussions did vou have Avith Mr.
Mitchell?
Mr. RoHATYX. None, sir.
Senator Hart. And these meetings that you participated in, Mr.
Rohatyn. would you say that Mr. Kleindienst was not participating
in the negotiations of the settlement? ^
Mr. RoHATYX. Yes, sir; I would say that vciy definitely. I would
say tliat Mr. Kleindienst was very polite and listened to me, and kept
repeating to me essentially that "the discussions and the negotiations
and the settlement would have to be handled b}"- Mr. McLaren in the
Antitrust Dinsion. *
Senator Hart. And to put it bluntly, the presence of the boss in
those meetings was without significance?
Mr. Rohatyx. Sir, as I said, I considered that the final settlement
was a very punitive one and a very harsh one.
(122)
8E. JOHN MITCHELL TESTIMONY, MARCH 10, 1972, 2 KCH 541
541
Iffi iLf r.iectin^: bcfojc iis cond'isior.. The secor...l inc'i.'iiiia; coiivcued
fit i :-3'' jMii. Presfii'., in auilition io rrivself, ^^ert• Mr. Lo^^kcr, chidrimiu
t'f ill',; .\f\\- York Slock Exclian^e, Mr. DeXuiuio, vice clii'-iim:iu of
t ho ^i"x York Stock l-:\>'h:iiin:e, Mr. Haack. ])re>kleat of the Xc-w York
."■''.o-.-k iiA'jii:i:;p:i\ I'-.ml :i .Mr. lir.^nilow -.vlui, I bcliovi.'. wa.s their couiiSi'l.
Mr. iiou.:ivn joined the meetijig at. 1:40; Mr. Perot, Mr. Mysrson,
:^.n'l ^ir. >i;irtin, wiio I believe, v.r^.s Mr. Peroi's coun?.eI, joLaed at
2:10, :in'.l Mr. Plaiiigau at 2:30. My records show that my next
-fippointnent that day was ^vith an ofScial of the Department at 3:04.
■ ]i i- r.iy rpcfirieciiou thiit nil participants in t!ie ^i-cond rap'jting left
my oliicp to.:recher.
,\'r.s. Dita Beard. My one encounter with Mre. Beard was on
May 1, 1971, at the executive mansion of Governor Nunn during a
rectpiiou and bnfiet supper.
As I ri-c.-.ll this incident, Mrs. Beard approached me to complain
about tlip treatment tliat ITT was rc-ceiving at the liauds of the Justice
DepiM.'tmciit. 1 advif.cd ^[rs. Beard that I had disqnaUSed myself
with resp-L-co to this liiigation and could not and would not discuss
it wilh iier. I sugixested that the proper course would be for the
appropriate people representing ITT to take the matter up with the
iippropriate people in the Justice. Department. A few minutes later,
Mrs. B.-'i^i'd agains appropached me on the subject matter, I beheve
twice, and I repeated my desire not to di.scu5s tlie svdjjoci matter and
adri-ed her that 1 did not appreciate her pressing the subject.
T];e ilnrd point, Mr. Chairman, related to the selection of San
Diego as the site of the Kepubhcau 1972 Convention. I was not involved
in ::ny way in any P-fgotialicns which led to the selection of Sua
Diogo as {he site of the convcir.ioii by the Republican National
, Coinniitiee.
\ I ha-e never talked to any representative of ITT about the San
,/' Djj'go ?-:-c or anji' matter roLiting tlicreio.
.1 hav,.- ivr-ver talked to the Deputy Attorney General or the Assistant
Atio-rT-f^y General in charge of the Antitrust Division about the San
Diego convention site or tinjnhing relating to any discussions or
nego'iaiions with JTT or any of its subsidiaries.
I do not recall Y.-]',on or how I first leai-ned oi the "Sheraton Hotel
Corp.'s participation and support for the holding of the convention
in San Diego, but I bc-licve that I first read about it in the newsptipers.
1 do not as of this date know v/hat arrangement's, if any, e.xist
between ITT or the Slieraton Hotel Corp. and the Republican
XHiioiial Committee, or between ITT or any of its sidjsidiaries and
the city of San Diego or any agency thereof.
Mr. Chairman, 1 trnst that these facts will clarify this record
here. I trust that they m.ake it unnecessary for me lo deny the state-
ments contained in tJjc memorandum dated June 25, 1971. sttribmcd
to Mrs. Beard. At the risk of redund.iucy, hovvcver, I welcome this
cpporrurnty to staie under oath that iha statements in tliat mcmonm-
dum A\hidi relate to me are totally false and totally wiihout
forindatioD.
In c!';si:ig, Mr. Cl;airman, I would emphasize tJie fact that there is
pendiiig b'^i'ore the Senate, the President's nomination of^^Richard
G. Klicndienst to be the Attorney General of the United States.
As one who has worlred closely with Mr. Kleindienst on a daily
basis for tl-e past 3 years, I am happy lo have this opportunity to
(123)
]
8F. RICHARD MC LABEN TESTIMONY, MARCH 2, 1972, 2 KCH 139. ijff
8f
139
Senator IvEN>rEDY. Was Mr. Flanigan in on LTV ?
Judge McLArvEX. No; not other than if he was the oue I talked to to
recommend an expert. And I think I may liave discussed what I
intended to do there with Mr. Ivleindienst from the financial stand-
point.
Senator Kennedy. "Why would you discuss that with him? Is tliere
an}' — I am just inquiring. 1 am just interested.
Judge ]McL.uiEx. Do you understand the LTV decree? It is a very
broad decree. It was a very important case at the time. LTV was in \'ery
bad trouble when we began analyzing it in those terms. I think I
might have consulted with others — Paul McCracken, perhaps. I
wanted to be sure I was right on tliis thing, that is all.
Senator Kennedy. Sure.
Well now, to get back — are you unsure as to who recommended Jlr.
lianisden ? It was either Mr. Flanigan or the Treasury
Judge McLaren. Either Flanigan or MacLaury, I would say. I have
no specific recollection, but that is the best I can remember.
Senator Kennedy. In any event, he was the one who took this mate-
ijial, as I understand it, provided by ITT and did the survey and the
study and made a recommendation to you. Is that right?
Judge ilcLAREN. Both Ramsden and MacLaury.
Senator Kennedy. Took the ITT material ?
Judge ^IcLaren. Yes.
Senator Kennedy. Both of them. And then they made the recom-
mendation?
Judgt;. ilcL-AREN. Kight.
Senator Kennedy. Aird the evaluation of the ITT material ?
Judge McLaren. "Well, they made tlieir own evaluation, I think, as
well as reriewmg what ITT had furnishe<l. — >,
Senator Kennedy. At any time did you talk about the ITT case |
with Mr. Flanigan or anyone in the "WHiite House? j
Judge McIjaren. I do not believe so.
Senator Kennedy. So you did not have any conununication with
anyone in the White House in any way about the ITT case?
Judge McL.VREN. Not that I recall at this time, and I think I would
recall if I had.
Senator IO.nnedy. Sure. But they did the study, these two men.
Have the materials that have been provided by ITT, are they avail-
able?
J\idge ^McLaren. Oh, yes ; certainly.
Senator Kennedy, ^lley are available to the members of the com-
mittee if they want them ?
Judge McLaren. Surely ; yes.
Senator Kennedy. Was there any memorandum kept, Mr. Kleui-
dienst, that you loiow of, of the meeting that was held? Is there any
I'ccord or recording kept of the meeting about who said what to whom?
ilr. Kleindienst. Not that I know of. If there is, Mr. ]McLaren luis
it.
Senator Kennedy. Do you know of any?
Judge McLaren. I would liave to check. We had a lot. of people at
that meeting and somebody may have taken notes or made a memo-
randum. I am not sure.
Senator Ivennedy. Jlr. Rohatj-n, did you keep any notes on that?
(124)
J
8F. RICHARD MC LAEEN TESTIMONY, MARCH 2, 1972, 2 KCH 139\ 116
116
iue;novaiu1iim nllegodiy written L-}- Mrs. Dlta Beard. Mr. Iluinc
asked wht^thcr the .s'.il)ject ot th:it i;iciiior;iniUin\ hn.d entered into my
conversations with the Justice Dopp.vtmcnt. I flatly denied that
auvthin;.; having to do with thr' Sliorulon commitment lud cvt-r been
discussed by mo •with Mr. Kleindiinst or tiny oilier reinvscntAtivc of
Justice.
Let me say now th:\t I do not know Mrs. Beard and, in fjiot, had
never Ixoard licr nnrnc before talking with Mr. Hume. >ro!eover, I
never knew of an ITT commifineni of the Sau Diego Coixvcn'ioa
Bureau u:\til Decoiubcr 1971, when I read ubout it in the public press.
Tiiis was G months iifter tlic antitrust settlement had been reached.
Therefore, it was literiiUy iuipossible for me to have i)ftrticipa.lod iu
anv conversation regarding the oominitment.
The. settlement requires, so far as I k.now, the largest divestment ia
the histor\- of world euler]nise comprising companie.s with sak-.s aj)-
pro.ximating $1 billion in assets. Even apart from forced sr.lc, I can
think of no case in wliich a single owner voluntarih- parted with values
of this magnitude. As a diicctor of the company, I considered this on.
extremely harsh scttlemcut, anived at after jnotracled and dillicult
negotiations between rei^resentatives of Justice and ITT.
If I may, sir, for the record, I would like to place (he date.s of my
meetings with Mr. KIcindienst.
The "first one took place on April 20, 1971, where I giivc orally some
of the policy' considerations we thought relevant. ^(^. Klciiidifiist
stated that since the Attorney General i\ad disqualified himstrlf, the
ultimate decision with respect to any liligaliou would aocessarily
be his. He said too he would make that decision based on Mr. Mc-
Laren's Antitrust Division recommendations, and told nip. nny
presentation should be made to Mr. McLaren and the Antitrust
Di\"ision.
The next meeting took place on April 29.
This was followed by the meeting of May 10.
The ne.xt meeting was June 29.
The Inst meeting was July 15.
Thank j^ou, Mr. Chairman.
The Cn.\iR."\i.A.x. Judge McLaren, j-ou say you were solclj' respor.siblc-
for tliis settlement, with your stafi?
M[r. McLakex. I'm sorry. I couldn't hear the lastscntencc.
The Cii.viitM.-VN. Dili I ur.derstand you to say that \o\x were, you
and 3'our staff were solely responsiblt: for this settlement?
Mr. ^IcL.'v«E^■. Th;it is my testimony, yes, sir.
The C!£AinMAN. Now, did you know anything abotit a S-100,000
cori'tribution from ITT to the lity of San Diego?
Mr. McLarex. Absolutely not. I knew nothing about a.uy of tins
whole business, or even that the convention was going there until I
read about it iu the newspapers where sonicon.'^ tried to make a
connection between an alleged payment cr.d the settlement- of ihc
^ case.
The CHAinMAX. Now, did Mr. Klcindienst, Mr. Mitchell, or onyone
else attcm])t to influence your decision in this seitlcmeni?
■ Mr. McLahex. The direct ar.swer to your question is ''No, they^did
not." I would like to add tins: when I vas first interviewed by Mr.
Zvlitchcll and Mr. Klcindienst, in the Pierre Hotel iu December of lOGS
Arith regard to coming down here, I had an understanding with them
(125)
8g
8G. RICHARD MC LABEB INTERVIEW, FACE THE NATION, 14 ^*
HERMAN: Let me ask you one other in- their- shoes question. Do
you think it was right and proper and' also wise for IT§T to make this
large pledge to an organization connected with the Republican Party
while it was engaged in this litigation or these negotiations?
JUDGE McLaren : I just have no way of commenting on 'that. I
knew nothing about it. It never came to my attention, even where the
convention was going to be, until long after our negotiations. I
never met Mrs. Beard, I never had anything to do with that. According
to their story, as I understand it, for the big hotels to make con-
tributions, particularly on a big opening, as I understand that
Sheraton's going to have out there, that's a pretty customary thing.
HERMAN: But by five times customary. They are the second
^""^argest chain, they gave five times as much, I understand, as the
first largest chain.
JUDGE McLaren : Well, they've got three hotels - I don't
/ -- I can't argue that -- I knew nothing ■ about it at the time, and
I guarantee you that that Republican convention site and ITT's con-
tribution had alsolutely 100 per cent nothing to do with this settle-
ment that I made.
STRAWSER: If, as Mrs. Beard claims, that memorandum that did
link the two was a forgery all along, do you feel that it was un-
necessary for you to sit through all those days of hearings in the
Senate?
JUDGE McLAREN: I don't -- I -- Mr. Strawser, it's completely
inexplicable to me. Based on my knowledge of the events, what I said
before was that the memorandum is absolutely incredible. Now whether
it's spurious, a forgery, or just name-dropping, I just don't have any
(126)
9. ^ On July 23, 1971, the Republican National Committee selected
San Diego as its selection site for the 1972 Republican National
Convention. San Diego was the preferred site by William Timmons,
who had investigated that city as a potential site and the Attorney
General' s convention task force, and was the highest regarded city
for security purposes. __ -^^
\ • — ^ '• — "
^
Page
9a Memorandum of May 6, 1971, from William E, Timmons
to H. R. Haldeman *..... .i, .128
9b Memorandum of June 23, 1971, from Gordon Strachan to
H. R. Haldeman 130
9c Memorandum of June 26, 1971, from Jeb Magruder and
William Tinnmons to The Attorney General and H. R.
Haldeman. 13 6
9d Memorandum of June 30, 1971, from Department of
Justice, Law Enforcement Assistance Administration
to William Timmons, 145
(127)
9A. WILLIAM TimONS MEMORANDUM, MAY 6, 1971
THE WHITE HOUSE
WASH I NGTON
CONFIDENTIAL/ EYES ONLY May 6, 1971
MEMORANDUM FOR: H. R. HALDEMAN
FROM: WILLIAM E. TIMMONS
SUBJECT: - '72 Convention Site
^-
I spent two days in San Diego this week surveying the city as a possible
site for the 1972 Republican National Convention. A report on my findings
is attached in Tab A.
There harf been no effort in this paper to compare San Diego with other
possible locations. Also, there is no evaluation given to California in
relation to the possibility of Reagan or McCloskey contesting the noniina-
tion or weight given to Vice Presidential politics. Both of these factors
must be considered at some point however in the decision process.
I believe San Diego would make an excellent location for the next
Convention. However, there are two major obstacles and three minor
^ problems:
TIMING; It is absolutely impossible for San Diego to host the Convention
before Labor Day, Septennber 4th. The city's hotel rooms are
always committed during August by tourists and there is an unwill-
ingness to lose regular customers. Also, the Hall is booked by
the International Machinists Union September 3-17 and by the
Fleet Reserves from September 17-21st. If these two organizations
were willing to reschedule their conventions, even the early
September date presents a legal difficulty for us. A number of
- states require Presidential candidates to file by late August in
order to get on the November ballot. In 1968 I'm told the Democrats
ran into this problem in several states but were able to get waivers.
I am having two groups independently research the various state laws
and possible waivers. Unless this is satisfactorily resolved, San
Diego will not offer a bid. I'll keep you posted on the results of
my investigation. ~
FINANCES: The RNC estimates it will spend $800, 000 to run the convention.
Bidding cities are requested to pay the Committee this amount, part
of which can be in services, rents, etc. It will be impossible for
San Diego to raise this kind of money. They talk of only $200, 000,
but if they are really in the running I feel the city can come up with
CONFIDENTIAL/ EYES ONLY
(128)
9 A. WILLIAM TIMMONS MEMORANDUM, MAY 6, 1971
CONFIDENTIAL/ EYES ONLY -2-
FINANCES: (continued)
.,$400, 000 with the remainder coming fronn RNC and California
GOP sources. If the timing problem can be resolved, I will
make the necessary contacts to work on the financial bid.
HOUSING: The lack of excess first class rooms and available parlors
present a minor problem. By stretching, San Diego can commit
sufficient rooms for the- event, I feel,
CONVENTION HALL: The RNC requires 150, 000 square feet of work
space in - or adjacent to - the Convention Hall. This is mostly
for media. The San Diego Sports Arena has only about 30, 000
square feet of off-floor work space. Therefore, a temporary
building with approximately 120, 000 square feet will have to
be erected. This can be done. j
GOP FACTIONS; If San Diego is chosen as the convention site, we
can expect a blood-letting confrontation between the Finch and
Reagan forces for control or at least public exposure. The
battle lines are already forming, and I suspect the situation could
become bitter. NOTE: Al Harutunian apparently has tentatively
reserved the Sports Arena for mid-September under the name of
Billy Graham. It is widely believed he is acting as an agent for
Finch. I have information that Bob will be in San Diego this
week-end and may discuss the convention. While I did not see
Harutunian, he has learned of my trip and will undoubtedly spread
it around. I suspect Dick Capen told him, although this is just
a guess.
San Di^go will definitely make a formal bid for the 72 convention. I
am obligated to report to them if we can consider a September event.
The Site Committee of the RNC will have to visit San Diego, but Bob
Dole tells me he can arrange for a favorable report on any city the
President wants.
CONFIDENTIAL/EYES ONLY
(129)
9B. GOFDON STRACHAN MEMORANDUM, JUNE 23, 1971^ WITH ATTACHMENT
THE WHITE HOUSE
WAS H I N GTO N
June 23, 1971
MEMORANDUM FOR: H.R. HALDEMAN
FROM: GORDON STRACHAN (^
SUBJECT: 1972 Convention Site
Magruder will meet the Attorney General today and discuss
memorand-um attached at Tab A concerning the RNC Site
Conunittee's visit to San Diego.
To summarize:
1. The Site Committee found the same faults Bill Timmons'
noted in his May 6 memorandum (limited office space at the
convention hall and barely adequate hotel accomodations) ;
2. The local politicians are indifferent, but the State
officials, especially Ed Reinecke, are enthusiastic.
3- The San Diego bid is $500,000 in cash and $1,000,000
in inflated price services. This excellent bid is con-
sidered primarily the work of Reinecke and Magruder will
suggest that the Attorney General call Reinecke and thank
him.
4. San Diego is the favored site of the Attorney General's
task force, though Chicago, Miami, and JJouisville are still
under serious consideration by the Site Committee.
5. Dole, Timmons, and Magruder believe the Convention Site
Committee's request to see the President should be denied.
,- Rather, Timmons should see the President, get his decision,
0 A^.rt»-2t^;relay it to Dole, and have Dole program the Site Committee
^ ^^. to recommend formally to the President and annoiince to the
^^^^""^ media the location of the 1972 RNC Convention.
6. A formal decision paper will be presented to you and the
Attorney General when San Diego submits its formal bid,
hopefully this week.
On a related matter, Timmons submitted the memorandum attached
at Tab B concerning the niomber of VThite House Staff who
would be attending the convention. Timmons believes all
commissioned personnel (approximately 50) are "entitled to
be present whether or not they are actively engaged in the
■■ .. Convention.'*
(130)
y^
9B. GORDON STRACHAN MEMORANDUM, JUNE 23, 1971-, WITH ATTACHMENT
-2-
The following are the options of which I recoromend
number two.
1. All commissioned personnel attend
2. Only those Staff who are contributing, whether
commissioned or not
3. All male Staff down through Staff assistant
level (150)
(131)
L
9B. ROBERT ODLE MEMORANDUM^ JUNE 22, 1971
CITIZENS FOR THE RE-E LECTIO N OF THE PRESIDENT
W ASH t NGTON
SUITE 272
ITOI P£NS5VLVA-:tA AVE.'iUe. N.>
WASMl.NGTO-T D C. 20006
CZOZt 333-0320
Jijne 22, 1971
CONFIDENTIAL
MEMORANDUM FOR: MR. JEB S. MAGRUDER
FROM: ROBERT C. ODLE, JR.
SUBJECT: 1972 CONVENTION SITE
The RNC's Convention Site Committee has now returned from San Diego,
thus completing its series of visits to all the cities v/hich have bid
for the 1972 Republican National Convention. The Coinmittee was. not as
impressed with Sain Diego as we hoped it would be, citing the lack of
office space for the media and the RNC at the convention hall as the
main drawback. Also, some political officials in the city, chief among
them the mayor, either suggested that the city did not want the conven-
tion, or were at best indifferent to the prospect of getting it. On the
other hand, business leaders and state officials, led by Lieutenant
Governor Ed Reineke of California, were very enthusiastic and members of
the Site Committee reacted favorably to these people-
Bill Timmons reports that his contacts in California tell him the city
is now offering $400,000 in cash and approximately $500,000 in services
bringing the total offer to approximately $1,000,000. However, the city
is putting very high pricetags on the services, so in reality the figure
might be more like $800,000. The final bid is being prepared this week
in San Diego and should be received by the Nationail Committee at the end.
of the week — we will obtain a copy of it. It is our understanding that
in this bid, the city will offer to construct a building adjacent to the
convention hall v/hich ccin house offices for the media and also for the
RNC. San Diego will donate the use of the convention hall for as long a
time as is needed to ready it for the convention, and also for the con-
vention sessions.
CONFIDENTIAL
(132)
, 9B. ROBERT ODLE MEMORANDUM, JUNE 22, 1971
CONFIDENTIAL
Incidentally, San Diego Democrats are reported to be upset that the
city did not bid for the Democratic convention and therefore San Diego
has decided to put in a pro forma bid for the Democratic convention.
It also should be noted that the Site Committee believes the list of
cities xrnder serious contention is now do^^n to San Diego, Miami,
Louisville:, and Chicago. The committee has ruled out Houston because
it has not expressed a real interest in the convention ajid has refused
to make a firm offer of cash and services. San FreUicisco was ruled out
because the committee fears possible problems with the nearby campuses
and does not feel the convention hall and hotel situation is as good
as it is in other cities.
In the meeting of our convention strategy task force on Friday, San Diego
emerged as the very clear favorite, followed by. Houston. There was no sxxp-
port for any of the other cities. Those attending that meeting were Pat
Buchanan, Bill Safire, Dick Moore, Harry Dent, Len Garment, Don Rumsfeld,
and Bill Timmons. Dwight Chapin, Fred La Rue, eind Frank Shcikespeare were
out of town. In addition to favoring San Diego, the task force agreed
that the convention should begin the week of August 21, 1972, and should
be a three day convention.
Jo Good told me today that members of the Convention Site Committee are
in Washington this week and that she would like Chairman Dole, Fred
Scribner, and the vice-chairman of the committee to meet with the Pres-
ident later this week or next week to review with him the thoughts of
the Site Committee, so that the President might be informed of everyone's
views before making up his mind. I have advised Bill Timmons cind Gordon
Strachan of this, and the three of us have agreed that the following
strategy should be employed rather than having the committee see the Pres-
ident. Also, Timmons tells me that Dole agrees with him that ^ve should
pursue the following scenario:
As soon as the bid from San Diego comes in, we (Timmons, Magruder, Odle)
will examine it. If our inclination is still to go with San Diego, I v/ill
prepare a decision paper for the Attorney General and Mr. Haldeman. As-
suming their concurrence, we will then request that Timmons discuss with
the President his views on all the cities in contention for the convention
site and our recommendation that we go to San Diego. Assuming the Presi-
dent conciirs with this choice, Timmons v/ould then talk with Dole and com-
municate the President's decision to him. Dole would talk with the members
of the Site Committee regarding this and at some future point in time (next
CONFIDENTIAL
(133)
■ 9B. ROBERT ODLE MEMOmWUM, JVM 22, 1971
CONFIDENTIAL
v/eek or the week after) , either Dole by himself or Dole with the other
members of the Site Committee v/ould meet with the President and announce
to him their decision that the convention go to San Diego. The President
would tell the Site Committee that, he concurs v/ith their recommendation
that the convention be held there. Members of the Site Committee could
then go into the Briefing Room and announce to the media that they had
recommended to the President that the convention be held in Seui Diego,
that the President had approved their recommendation, cind that they
hoped the Republican National Committee would approve the recommendation
in Denver on July 23. This would put us publicly on record as having
chosen a convention site before the Democrats.
If the general strategy as outlined above is approved, we will proceed
as suggested with the initial decision paper.
Approve Disapprove
Comments
y^
bcc: Mr. Gordon C. Strachan (for Mr. Haldeman's approval and concurrence
if necessary)
CONFIDENTIAL.
(134)
9B. WILLIAM TIMMONS MEMORANDUM^ JUNE 21, 1971
THE WHITE HOUSE
WAS H I N GTON
June 21, 1971
MEMORANDUM FOR: H. R. HALDEMAN
FROM: WILLIAM E. TIMMONS fM^
SUBJECT: '72 Convention
In preparing my preliminary plan for next year's convention,
I need to know how many White House staff we may be required
to accommodate with rooms, transportation, tickets, etc.
No doubt a number of key staffers will be involved in the
convention campaign and, of course, those will be included
in our early plans.
I personally feel that all commissioned personnel are
entitled to be present whether or not they are actively
engaged in the convention. og noA. This would be a morale booster,
give staff a greater insight into politics, and serve as "6rowd
fillers" for selected events.
RECOMMENDATION:
That I include plans for having all commissioned White House
staff attend the '72 Convention.
APPROVE DISAPPROVE
OPTIONS:
If the recommendation is disapproved, then
1. Only those staff who can make a contribution to the
Convention
If the recommendation is approved, then
1. Include male staff down through staff assistant level
41-566 O - 74 - 10
(135)
9C. JEB MAGRUDER AND WILLIAM TIMMONS MEMORAWUM, JUNE 26, 1971
CONFIDENTIAL/EYES ONLY
June 26, 1971
MEMORANDUM FOE: THE__ArmRiiKt-GENERAL
H. R. HALDEMANfc*--'
FROM: JEB MAG RUDE R'^^f^^\
WILLIAM TIiUM<^sgjf^
SUBJECT: 1972 Convention
This paper with its attachments is a summary of information
relating to decisions that should be made immediately-
regarding the 1972 Republican National Convention. We
make three recommendations:
1. That San Diego be selected a? the site city
2. That the Convention start August 21, 1972
3. That it be a three-day Convention
We suggest you discuss these topics, at the earliest oppor-
tunity, with the President to get his guidance. When resolved.
Chairman Bob Dole should be notified so he can engineer his
Site Committee to make identical recommendations to the
President. Later, Dole should meet with the President to
advise him of the Committee's views, giving the President an
opportunity to concur. Should San Diego be selected, this
meeting might be considered for San Clemente the first week
in July.
I. DEMOCRATS
Every available signal is that the opposition will hold its
national convention in Miami Beach, starting on July 10, 1972.
While Miami has good facilities, hotels and vacation atmosphere,
the Democrats are probably more interested in the security
aspects of Miami as a result of the '68 riots in Chicago.
II. REPUBLICANS ■' •'
Bob Dole is Chairman of the Republican National Committee Site
Selection '"ommittee. The Committee membership is listed in
Tab A. Bids have been received from:,
CONFIDENTIAL/EYES ONLY
(136)
9C. JEB MAGRUDER AW WILLIAM TIMMONS MEMORANDUM, JUNE 26. 1971
CONFIDENTIAL/ EYES ONLY
-2-
-- San Diego
-- Miami Beach
-- Chicago
-- Houston V'
-- Louisville
-- San Francisco
Committee visitations have been made to all cities except San
Francisco. An analysis of each city's bid and some pro and
con arguments of the various sites are in Tab B.
Since the President will control the Convention machinery and
can schedule events to fit television prime time, media cover-
age is not a. significant factor in site location. Presumably
we will try to target time for maximum exposure, and this can
be done, by a little earlier program on the West Coast or a
little later on the East Coast.
Also, while we question the argument 'that site location helps
deliver a state's electoral votes to the Party, it certainly
is a false issue for regular convention cities such as Chicago,
Miami and San Francisco.
Facilities, security, a healthy "upbeat" atmosphere, confidence
and control are important considerations to site location.
The Site Committee will make its formal recommendation to the
full Republican National Committee at the Denver meeting on
July 23. It is expected that the RNC will ratify the recom-
mendation without difficulty. Additionally, Dole has indicated
he recognizes that the President will call the shots on the
Convention.
III. DAtE OF CONVENTION
The Republican National Committee, Justice Department and
White House counsel agree that a September convention would
be too late to guarantee that the nominees can legally be
placed on the ballots in a number of states. While some
waivers may be possible, a September Convention cannot be
considered. The Summer Olympics start in Munich, Germany
the last week in August, and ABC has exclusive coverage and
a commitment to carry events in prime time. ABC officials
say that is locked in and it would be difficult for their
crews and equipment to cover a convention the last week in
August. Also, it is felt we would lose a substantial audience
if the Convention were to compete with the Olympics. Therefore,
August 21 appears to be the latest date the Convention could
start considering the circumstances. The RNC favors the
Convention for this period.
CONFIDENTIAL/EYES ONLY
(137)
9C. JEB MAGRWER AND WILLIAM TIMMONS MEMORANDUM, JUNE 26, 1971
IV. THREE-DAY CONVENTION
Historically, both parties have held conventions varying in
length from two days to five days. A four day convention has
been the most popular. Because of the expected renomination of
the President, a shorter Convention is felt appropriate for 1972,
This would help eliminate delegate and public boredom and leave
fewer opportunities for the media to emphasize Republican dif-
ferences, demonstrators, etc. On the other hand, official
business can hardly be condensed to fewer than three days. It
is anticipated the sessions might be divided as follows:
Monday, August 21
Morning
First Session
Monday, August 21
Evening
Second Session
Convening
Committees appointed
Temporary Chairman
Keynote Address
Permanent Chairman
Tuesday, August 22
Morning
Third Session
Reports of_Platform
Rules, Credentials, etc,
Tuesday, August 22
Evening
Fourth Session
Wednesday, August 23
Evening
Fifth Session
Nomination Speeches
and election of candidates
Acceptance Speeches
The principal change in this agenda schedule is that normally
the committee reports, including Platform, are held during even-
ing prime time on the second day. With an incumbent Administra-
tion, it is felt this event could be held in the morning even
though we are exploring ways (films?) to make the platform more
interesting and attractive. The RNC favors a four day convention
because of anticipated hotel commitments to the host city and
fear emergencies may require longer individual sessions.
We urge adoption of our recommendations.
1.
San Diego as site
APPROVE
2. Start August 21, 1972
APPROVE
3. Three-Day Convention
APPROVE
DISAPPROVE
DISAPPROVE
DISAPPROVE
CONFIDENTIAL/EYES ONLY
(138)
^ ^g^ MAGRUDER AND WILLIAM TIMMONS MEMORANDUM, JUNE 26, 1971
SAN DIEGO
AVAILABILITY:
HALL:
BID:
HOTELS:
SECURITY:
ARGUMENTS:
PRO:
CON:
CONCLUSION
August date is okay.
Seats 15,000. Will require
temporary facility for network
and service organizations.
$1,500,000 in cash, goods 5 services
Can meet 18,000 requirement, some
rooms better than others. Short
on parlors.
Good local police force and state
patrol. Military installations
close by. Access to hall is good.
Republican Governor (Reagan)
Republican Congressman (Wilson)
Close to Western White House
Outstanding climate
New, non-convention city
Emphasizes GOP interest in Western votes
Best money bid
California has most delegates and most electoral
votes
Many things for delegates to do
Outside, wholesome atmosphere
Copley papers
Democratic Mayor (up for re-election this year)
City never handled big riots
Shortage of parlors
Construction of temporary facility next to ^all
Possibility of Reagan candidacy
Internal competition between Reagan and Finch
forces
Proximity to Watts 5 Berkeley could assure
demonstrations
Arnhold Smith IRS problems
Must have earlier sessions to accommodate national
prime time
Aerospace unemployment
Considered a non-union town
By far the best of bidding cities. '
Security is main concern.
(139)
9C. JEB MAGRUDER AND WILLIAM TIMMONS MEMORANDUM^ JUNE 26, 1971
MIAMI BEACH
AVAILABILITY;
HALL:
BID:
HOTELS:
SECURITY;
ARGUMENTS:
PRO:
CON:
August date is okay
Seats 16,000. Excellent hall.
In neighborhood of $600,000 in
cash, goods and services.
Good rooms and parlors in sufficient
numbers. However, they are stretched
out with only one artery.
Excellent because of geography.
Close to Key Biscayne
Sentimental return to '68 site
Lot for delegates to do; beaches
Best security of all cities
Easier for media to cover both conventions
Hurricane season
Old hat; nothing new
Public boredom of having two conventions
in same city
Democratic Governor and Mayor
Afraid of riots; seek shelter
Not truly a "southern" city
Local Cuban competition
Have had racial problems
Must have later sessions to accommodate national
prime time ":
CONCLUSION:
Second best choice
(140)
9C. JEB MAGRUDER AND WILLIAM TIMMONS MEMOEANDUM, JUNE 26, 1971
CHICAGO
AVAILABILITY;
HALL:
BID:
HOTELS;
SECURITY;
ARGUMENTS;
PRO;
CON:
August date would require
moving American Legion convention. .
This may be possible.
12,000 seats -- a little small.
In black ghetto section.
The required $800,000 anyway
we want it.
Excellent number of rooms and
parlors .
Police good and have riot experience
Republican Governor (Ogilvie)
Midwest location
Transportation center
GOP can do what Democrats couldn't.
Good prime time coverage for nation
Big City atmosphere
Red flag to demonstrators
In Daley's hands
Have been there before
Governor Ogilvie is opposed
Chicago is not truly representative of
Heartland America
Not much new for delegates
Racial and unemployment problems
Hot, humid climate
CONCLUSION;
The risk is too great for any
marginal benefit.
(141)
■ 9C. JEB MAGRUDEE AND WILLIAM- TIMMONS MEMORANDUM, JUNE 26, 1971
HOUSTON
AVAILABILITY:
HALL:
BID:
HOTELS:
SECURITY:
ARGUMENTS :
PRO: --
CON:
CONCLUSION:
Possible in August subject
to rescheduling of baseball
games .
Astrodome is too large but
Astrohall has 15,000 seats.
Modern facilities.
No firm offer made.
Limited. Must utilize rooms
far away from hall.
Probably adequate.
A new convention site
Will influence Texas and southern votes
Republican Senator (Tower) and one local
Congressman (Archer) .
Midwest television time
Central geographical location
Few demonstration problems
Democratic Governor
LBJ image covers Texas
Hot and humid climate
Not much for delegates to do
It was apparent to the Site Committee that
Houston was not genuinely interested in
attracting the convention and refused to
cooperate. If Houston is chosen, it will
require a great deal of RNC staff work to
get a decent bid.
"Dark Horse" third choice
but harder negotiations required,
(142)
9C. JEB MAGRUDER AND WILLIAM TIMMONS MEMORANDUM, JUNE 26, 1971.
LOUISVILLE
AVAILABILITY;
HALL:
BID:
HOTELS:
SECURITY;
ARGUMENTS:
PRO:
CON;
CONCLUSION:
Anytime we want it.
New, excellent downtown facility,
Open to negotiation; no firm
offer.
Extremely limited; probably
have to house in other states.
Probably adequate but untested.
New convention city
Helps with southern and border states votes
Republican Governor (election this year) and
two Senators (Cook k .Cooper)
Small town heartland America
Kentucky bourbon
Housing and transportation limited
'•Why Louisville?"
Nothing for delegates
The Site Committee feels Louisville is not
sincere in its bid, which was instigated
by Col. Sanders of chicken fame and a group
of aggressive Jaycees.who are part of the
Democratic Mayors best supporters.
Not enough pluses to offset
liabilities.
(143)
9C. JEB MAGBUDEE AND WILLIAM TIMMONS MEMORANDUM,- JUNE 26, 1971
SAN FRANCISCO
AVAILABILITY:
HALL:
SECURITY:
ARGUMENTS:
Undetermined
Cow Palace seats 14,000 but
is far from city
Ko offer niade-r^ Felt could
raise $300,000.
Tourist season. Hard to comm.it.
Nojt-Good. Center of dissent
and unrest.
No body considers San Francisco
a possibility in light of above
and other factors.
CONCLUSION:
Absolutely out of question.'
(144)
9p. JERRIS LEONARD AND CLARENCE COSTER MEMORANDUM, JUNE 30, 1971
- UNITED STATES DEPARTME^^^ OF JUSTICE
LAV/ ENFORCE.V.ENT ASSISTANCE ADMINISTRATION
WASHINGTON, D.C 20530
OFFICE O? TH5 ADMINISTRATION JUnS 30 19 7L
MEMORANDUM FOR: Mr. William Timmons
Office of Congressional Liaison
SUBJECT: Security and Civil Disorder Capability of the
Six Cities Bidding for the Republican National
Convention
After a review of the security and civil disorder
capability of the six cities which have submitted
bids for the holding of the Republic National Conven-
tion, we herewith submit our conclusions. A detailed
breakdo^Tn of the capability of each city in those
areas which we consider most important is attached.
The cities were evaluated on the basis of these criteria.
The six cities, together with our summary observations,
are listed in order of preference as follows:
^
1, San Diego, California
Command and control elements of the city for
civil disorders is considered excellent.
Recent incidents in the nature of civil dis-
orders indicate that the police department is
V7ell organized and v/ell deployed. Arrange-
ments exist for curfews and the imposition
. of restrictions such as the closing of bars
and gasoline stations. The city has developed
excellent mass arrest procedures. San Diego
has approximately 950 uniformed sworn personnel
and approximately 260 reserves. The city has
achieved an excellent level of training in riot
control and has engaged in some joint command
post exercises for civil disturbances. Tne
police department has two SEADOC attendees.
Their intelligence system is excellent.
(145)
9D. JERRIS LEONARD AND CLARENCE COSTER MEMORANDUM^ JUNE ZO , 1971
The city has a very small EOC, but is capable
of expansion, v/ith considerable reorganization.
It has no mobile command posts. The existing
master civil disorder plan is considered
excellent and is tested each year. They have
excellent special organizational arrangements
for large scale security and large scale
civil disorders situations. They have sniper
suppression teams,- but only limited capability
in explosive clearance and arson suppression.
The city relies on the active military service
for ordinance disposal.
Mobile booking teams are available and mass
arrests procedures have been developed. They
have special protective equipment such as flack
vests and face shields but would need supplemental
equipment in the case of a large civil disturb-
ance. A limited communications ability exists.
Mutual aid arrangem.ents are in existence with
local cities (approximately 500) ; regional areas
(approximately 2,000); and state police (approxi-
mately 2,500). On street national guard strength
can be anticipated at 15,000. The state of
training of these forces can be considered good
at the county and regional level, and excellent
at the state level.
There is excellent ingress and egress to the
municipal convention center which is located
in the center, of to^^n and across the street froa
the county jail. The San Diego Sports Arena is
located approximately five miles v/est of the
city in a semi- industrial area. There are no
parks or other open areas in the immediate
vicinity. Heliport facility could be arranged.
Adequate parking facilities do exist.
Relationship betv;een the judiciary and the police
is excellent.
(146)
9^- JERRIS_LEONMD_AND CLARENCE COSTER MEMORANDUM, JUiJE 30, 1971
3
2. Chicago, Illinois
This city has a good police cornmand and
control element which has operated success-
fully in the past. The number of uniformed
police is adequate for most anticipated
situations. They are well trained in CD
operations. Their intelligence system is
excellent.
The city has an expandable V7ell-equipped EOC.
They have a present capability in the area of
Special Operations to include ordinance disposal,
sniper and arson suppression, mobile booking,
mass arrest and detention. Police force is well
equipped V7ith protective gear and chemicals.
Good comiriunications equipment is available with
trained operators.
The major facilities afford adequate ingress
and egress. Heliport facilities can be arranged
in the immediate location, and adequate security
can be provided.
Excellent relations exist between police and
judiciary.
Police superintendent is not a political
activist.
3. Houston, Texas
There are established policies and procedures
for the control of civil disorders in Houston.
The city has approximately 1,800 uniformed
sworn police officers. They are considered
to have an operational capability in control-
ling riots.
(147)
9D.
JERRIS LEONARD MP CLARENCE COSTER MEMORANDUM ,■ JUNE 30 .■ 1971
They have an excellent master civil disorder
plan. Existing mutual aid arrangements v/ith
surrounding counties can provide 50 sheriffs
and 500 reserves as v/ell as a state highway
patrol of 700 equipped officers and approxi-
mately 11,000 on street national guard forces.
The top leadership of the police department
is considered to be excellent.
4. Miami Beach, Florida
Command and control element of the Miami Beach
Police Department is considered to be good.
The police department has performed in minor
civil disturbances in an adequate manner.
They have made local curfew arrangements and
have a capability for mass arrests. The nximber
of uniformed sworn policemen is 231. All
members of the police department have had some
special riot control training, but none have
attended SEADOC.
The city has an excellent master riot control
plan and an excellent working relationship with
the fire services and public utilities. They
have a capability for special operations in
the area or ordinance disposal, sniper suppres-
sion teams, and mobile booking teams. They
have a regional mutual aid arrangement providing
60 sheriffs, 285 policemen. The highway patrol
augmentation capability is 872 uniformed personnel,
The National Guard could provide an on street
. strength of 4,800. The police have a good working
relationship V7ith the judicial establishment.
The competence of the top leadership of the
department is considered good.
(148)
9D. JEKRIS LEONARD AND_CLARENCE COSTER MEMORANDUM ^ JUNE 30, 1971
5
5. Louisville, Kentucky
This city has good command and control for
civil disorders. There are 563 uniformed
sworn policeinen. The general status of riot
control training among uniformed personnel is
considered good. However, none of the police
department has had' any SEADOC training.
Louisville has an excellent master riot control
and civil disorder plan. The police have an
explosive ordinance disposal team and sniper
suppression teams as well as a mobile booking
team. The force is equipped with protective
helmets and gas masks and has some chemical
ordinance.
There are 638 state police available to the
city in an emergency and an on street national
guard capability of 3,000 men. The police have
a good relationship v;ith the judicial establish-
ment, and the top leadership of the police
department is considered good.
6. San Francisco, California
The command and control element for civil dis-
orders in this city is considered to be
excellent. Recent experiences in civil dis-
orders in San Francisco over the past few months
show that the police department is v/ell organized
and well prepared. There are curfew arrange-
ments and authority to impose restrictions such
as the closing of liquor stores and gasoline
stations. City has provided for mass arrests.
The number of uniformed police personnel is
1,761 V7ith a reserve force of 240. The status
of riot control training for the uniform police
officers is considered to be excellent. They
have had tvjo SEADOC attendees. The city is
(149)
9D. JERRIS LEONARD AW CLARENCE COSTER MEMORANDUM, JUNE 30, 1971
considered to have a good intelligence
gathering network.
San Francisco has an adequate emergency
operation center and several mobile field
conunand posts. EOC is capable of expansion.
Police departiv.ent has sniper suppression
teams with limited capability in the area of
arson suppression and explosive clearance.
Mobile booking teams are available. The police
have special protective equipment and some
chemical ordinance. Police department has a
very limited communications capability. Mutual
aid arrangements are in effect with local cities,
counties, and regional areas and the state
police. They are capable of supplementing the
police force by 1,500 (local cities); 500
counties; 1,000 (regional area); and 1,500
(state) . The national guard has the capability .
of putting 15,000 men on the street. The
police department has responded well in recent
civil disorders.
The relationship between the police and the
judicial establishment is excellent.
The command structure of this police department
has been subject of criticism in recent years, because
it is not considered to be responsive to the
Chief of Police. The Chief v/as appointed
approximately one year ago by Mayor Allioto,
replacing the past Chief, T. Cahill, due to
Cahill allegedly being too law and order
oriented and conflicts arising between the
Chief and the Mayor.
Jerr/is Leonard
CoK^ur-- .Admitiis trator
_ Clarence M. Cos
Associate Admini
(150)
dB. ARNOLD WEBER MEMORANDUM, MARCH 4, 1971
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON. D.C. 20503
:iarca 4, 19 71
: :i:MQIiU\NDUM FOR JOHN D. EiIRLICii;iA:i
Subject: Security Preparations for the 1972 Convention
As you know, the 1968 De^nocratic convention A/as the scene
o£ considerable controversy and violence, giving rise to
security problens of major proportions. The Republican
convention in Miami Beach v/as relatively free of such dis-
turbances, but the fact that the Republicans nov; consti-
tute the party in pov;er in addition to the involveaent of
the President increases the importance* of security at the
1972 convention site.
Early planning in regard to the Federal role is already
underv/ay in the Secret Service. Kov/ever, a comprehensive
effort involving coordinated Federal and local enforceiricnt
efforts cannot be mounted until the site is known. If the
convention site is idcr.tixied at an early date, tlie local
lav; enforcoDient agencies can start the necessary prepaa'a-
tions, and their efforts can be supplemented by possible
funding through an LE/VA grant. Lav; enforceir.ent officials
froia potential convention sites Iiave already visited LUAA
requesting consideration of supplej.icntal grants. However,
both LEAA and O'iB agree that such a step cannot be consid-
ered until the particular site is selected.
Taking into account security alone, it is desirable to have
the site selected as early as possible. I recognize that
other considerations arc relevant and may be de to rain ant,
but I thoiigiit that it would be desirable to bring tliis niat-
ter to your attention early in the ga^ae.
Arnold P.. V.'ebor
Associate Director
(151)
10. \ In respon.s.e to a question at the Seaate Select Committee,,
concerning Dita Beard's disappearance on the eve of the Kleindienst
hearings, E. Howard Hunt stated that he was not aware of any role
Gordon Liddy played in Mrs. Dita Beard's departure fronn Washington.
' ,- - Page
10a '. E. Howard Hunt Testimony, 6 SSC 3791 154
(153)
lOA. E. HOWARD HUNT TESTIMONY, SEPTEMBER 25^ 1972, 6 SSC 2791
3791
Third, wlien tlie attache case of Mr. McCord was opened for my
view at the time of discovery, I noti'-cd that tlic group of surgical
gloves, wliicli I liad hist seen in the attache case when it was in my safe
at the Wliite House, that those gloves were missing froni tiic attache
case and were not otherwise emunerated in the inventory subsequently
provided by the FBI.
And. of course, there may liave been many other things. I did not
maintain an index of the contents of my safe.
Senator Inouye. And my final question. ^Ir. Hunt: In response to
one of my questions, you said that you went to Denver, Colo., some-
where to meet with Mrs. Dita Beard to determine, first, her reasons
for leaving Washington. Weren't you aware at that time that Mr. G.
Gordon Liddy had escoi-ted Mrs. Dita Beaixl out of Washington?
Mr. Hunt. I was not aware then, and I am not to this day aware
that such took place. Senator. ..^
Senator Inoute. Did Mrs. Beard tell you how she got out of
Washington?
Mr. HuxT. She did not.
Senator IxorvE. Did she tell you, why she left Washington?
Mr. HtrvT. She alluded to it in response to my question.
Senator Ixoxm:. Wiat was her response, sir ?
Mr. HuxT. She said in eflFect, and again let me stress that she seemed
to be under sedation and was from time to time in need of oxygen,
she put it that there was nobody she could trust, that she felt the only
thing she could do was to run away from what she interpreted to be
a hostile environment. I don't know if any memorandum stated it in
those terms.
Mr. Lcnzner, do you have a copy of that memo?
Mr. Lexzxf.r. Of the memo on Dita Beard ?
]Mr. HuxT. My eight-page memo. Did I see you referring to it?
Mr. Lexzxer. No; this isn't it. If you are referring to the memo on
Dita Beard, w-e liave made a request to Mr. Cox's office for that. We
have not received it.
Mr. HxTXT. Again I hate to go into details of an incident that took
place a long time ago when there is hard evidence, a document that
I myself wrote just hours after I returned from Denver.
Senator Ixoote. In questioning Mrs. Beard, you indicated that you
met with her from 11 o'clock to about Z:ZO in the morning.
Mr. Hux'T. A rough estimate, sir.
Sentor Ixottte. How did you convince the doctor tliat it was im-
portant for you to meet Mrs. Beard ?
Mr. HtTX'T. I believe those representations had been made before I
embarked on my trip by her daughter.
Senator Ix'OtnrE. Thank you very much, sir.
Thank you, Mr. Chairman.
Senator I'^nnx". Senator Baker.
Senator Baker. Mr, Chairman, thank you very much.'
Mr. Hunt and Mr, Chairman. I apologize for being absent during
much of the afternoon but as I indicated to the chairman earlier, the
(154)
11. On June 22, 1974, The New York Times, page 15, carried
a story in which Rep. Bob Wilson (R-Calif. ) said the Special
Prosecutor informed him that no legal action was being considered
against hinn in relation to the ITT matter.
- " . Page
11a New York Times article, dated June 20, and carried
in its June 22, newspaper. 156
(155)
11 A. NEW YORK TIMES, JUNE 22, 1974
NEW YORK TIMES, June 22, 1974
'<*W>
'^'0
.^'
Bob Wlltorj ^y» JawBrski -.^
j SAl>f DIEGO,. Ca3i?.;"Jun9 20
I (AP) T^ThB-l.WatergateTi "special
prosecutor, ;]L«»i)i Ja-^or^' has
assure^ Represeh^tive Bob Wii-
SOD, Hepu^licaaof^ California,
that |?jjo |rand; Jur/;'©!' court
. action'/:.,; Irvbelny-jConaldired
againsC'hijn in .th»fetT,T:; in-
vestigatio'ni!? Mrl,^ WH*""''''''*^
. — ._^ — ,., — ., ..___,'sald
-'He said'thiu^ ha. had 'asked
: for the advisory' btduua "stor-
iies were spread that I was, go>
ling to be indicted.;'>.<^^..
noa^cia^,'
RepubUcanr ; NationiKr." Coj^y'^s
tion,.: which,, was first > set '.for
San' Diesorand then raoyed.t6
MiaqM'Beadi.: Ha obtained' 'd
piedg?^ tpf . ; aid . froia;'; Hatold
Cepe«n,"',-the presidenfj of 'the
Lnter^flonal v-Teiephdhi^'j ani
TeJegraph Cbrporotion;; ',-1 1 vi^ : J
'., The- caae. involves aa .investJT
gation -to-*-' determine' . v^hethey
John.' N,: MitchpU, knew; when
he. was Attorney General abou*
the- LT.T.- pledge before' enterj
ing into ait antitrust settleineM(
V^Uh the conglomerate.' . . ,u
(156)
12. On April 4, 1972, the President met with H. R. Haldeman and
I
Attorney General Mitchell in the Oval Office from 4:13 p.m. to 4:50
p.m. during which time the ITT matter was mentioned.
V
' • Page
'^'
I2a Transcription of. recorded conversation of above-
described meeting; I, 4-6, 8, 10, J.5. (A transcription
was previously furnished to the House Judiciary Committee). . 158
(157)
12A. miTE HOUSE TRANSCRIPT, APRIL 4, 1972, 4:13 - 4:50 P.M. MEETING
Tlie PrcsidcnL/Attorncy General N'litchcll
and H.R. Halcleinan
Oval Office
April 4, 1972 - 4:13 - 4:50 PM
(Expletives Deleted)
P Well John, I hope you had some time off -- that they didn't
bother you to death with ITT and all that
M No. It was simply wonderful,
P Good (unintelligible).
M We always enjoy it, Mr. President. Oh, Bebe turned that
thing up according to your formula and
H (Laughter).
M I tell you, it was just great.
P I told these people around here, I said (unintelligible) call
Mitchell, I said don't you Bob, and.
Of course, I suppose they had to (unintelligible) one or two.
M Well some of them did.
H We didn't bother you too much?
M No, not you fellows.
P I said in the campaign -- I said to hell with the daiTin
campaign. Did you do any golfing? No?
M Hell, I didn't even care to.
P Did you fish?
M We fished, and we went out in the boat with Bebe a couple of
times and had dinner with him two or three times.
(158)
12A. WHITE HOUSE TRANSCRIPT, APRIL 4, 1972, 4:13 - 4:50 P.M. MEETING
-2-
P I'd like a little consoinnie. Want some consomme?
M I'd love some. So it was just absolutely great. We had
some of the people down from the Committee where we
could spend a couple of dcys, you know, with quiet and so
P Yeah (unintelligible) sort of busy these days. Try and get
the weather, damn it, if any of you know any prayers, say
them (unintelligible) weather. Let's get that weather cleared
up. The bastards have never been bombed like they're going
to be bombed this time, but you've got to have weather.
M Is the weather still bad?
P Huh! It isn't bad. The Air Force isn't worth a I mean,
they won't fly. Oh, they fly, but they won't -- you see our
Air Force is not ...
H It's the strangest thing -- in World War 11 they flew those
bombing runs all the time and they couldn't see a thing.
P I know.
M But they were doing a different type of bombing then.
P Strategic bombing and all that -- nevertheless it's a
miserable business.
M Are the Navy pilots as bad?
(159)
I
12A. WHITE HOUSE TRANSCRIPT, APRIL 4, 1972, 4:13 - 4:50 P.M. MEETING
-3-
P Oh they're better, but they're all under this one coinmand.
It's all screwed up. We just aren't going to talk about it.
The weather will clear up. It's bound to. When they do,
they'll hit something -- and, they're a lot of brave guys --
you've got to say. After all that POW (unintelligible) that
poor who got shot down. They're over there starving on that
damaed rice. It's all right, we'll give 'emhell^ Well the ah,
what are your reflections on the present thing. Why don't we
I start with what I told the staff to get the hell off of the ITT
and then get on to politics which is more interesting, not
'that that isn't -- _ ;
M But that's politics -- pure and simple politics, but hopefully
we'll get this thing»
P Well, I don't know if we'll ever get out of it -- I mean -- I
think what we have to face is that it will be investigated by
(unintelligible) election as you get closer to the election of
course it's extremely, I think that -- I think you might adopt
the practice -- I think you might consider adopting the practice
that after the Democratic Convention the Republicans will
boycott all investigating committees on the grounds that they
are politically motivated.^ How would that be?
(160)
12A. WHITE HOUSE TRANSCRIPT, APRIL 4. 1972. 4:13 - 4:50 P.M. MEETING
-4-
M I would think I would go beyond investigative committees.
I'd go to some of the others where you have a facade
P Harassing.
M Of substance, but
H (Unintelligible). It's a good idea.
P Yeah -- we're going to boycott anything that we think is
politically motivated.
H These people are disgracing (unintelligible).
P And ah. Republicans just walk off and say it's just politically
motivated. Well, at least ITT got 'em confused.
M • I would say it's quite confusing. Some of the more enlightened
newspaper people are beginning to write to the effect that the
Democrats got to come up with something more than they've
come up with or the monkey's going to be on their back.
H Manolo, who do you think (unintelligible). •
MS I don't think so, sir.
M Not much Manolo.
MS What they do is (unintelligible).
M You happen to be right, Manolo. I was just telling --
(Material unrelated to Presidential actions deleted)
(161)
12A. WHITE HOUSE TRANSCRIPT, APRIL 4, 1972, 4:13 - 4:50 P.M. MEETING
-5-
r
1
M You know this little girl -- this Lichtman -- the secretary?
You know where she had her press conference don't you -- did
you notice that? Down in the law office of the Democrat
Chairman for the District --
P She's a Democrat?
M Yeah, but the press confeifence was held in the law office of
this (unintelligible) District. Democrat Chairman, and yet
there wasn't anything in the newspapers about it or why it
just so happened,
HorP (Unintelligible).
M Most of the*yhakers*%.re, that's for sure.
P What is your view about the convention -- about all the scares
and cries I hear about the 250, 000 naked kids that are going
to be coming?
M Well, Bob and I have just gone over this and I've had a meeting
this morning with
P Kleindienst told us about it.
(162)
12A. WHITE HOUSE TRANSCRIPT^ APRIL 4, 1972, 4:13 - 4:50 P.M. MEETING
-6-
r
L
M And so forth, ah, it seems to me there arc three factors --
number one was screaming kids --if you call them kids;
niimber two -- the ITT Sheraton business with the television
on the hotel all through the Convention; and thirdly, and
equally, if not more important, is the fact that the site
selection cormnittee and the people that went out there to
look at that thing did a God damned poor job. Its come to
the point where it's going to cost betsveen 2.4 and 2. 5million
to put that thing together. In addition to that, there's
H That's if we just get the convention hall apparently?
M No, no, this is the whole thing, this is the whole thing^.
H I see, all the hotels and stuff involved.
M Yeah everything; in addition to that there has to be nine
hundred odd thousand dollars of insulation in that arena out
there, and in addition to that there's a
P Who, (unintelligible) this, Wilson (unintelligible).
M No, I think a lot of our people closer to us than that were at
fault in not recognizing the limitations of these facilities.
P All right.
M In addition to that you have your building trades labor contract
coming up on June 1, out there for negotiations, and they can
put the pressure on your pay board or the rest of it. So, in
view of that wc have thought of the potential of changing the site.
We can get out of there --
(163)
1,A. WHITE EOVSF. TRANSCRIPT. ATPTT. 4. 1972. 4:1Z - 4:50 P.M. MEETING,
-7-
P What grovind would you use for changing it?
M The cost and the uncertainty of the availability of the facilities.
H There's a real question as to whether they can do the construction
on --
M That's correct, and the arena out there is owned by two
Canadians, and they're just acting tougher than hell.
P All Canadians are tough.
M And, there's no contract with thein that covers some of these
things; -- ah, so that you're not walking away from the City
of San Diego, you're walking away
H You can make a very good case.
P How about San Diegians -- how do they feel?
M I don't know, frankly, I believe it would be mixed emotions.
H It's mixed, but with all the talk of the demonstrators
P Lot of people don't want them there
H I think a lot of San Diegians would be very happy to have them
go away.
M I would think that that would be the case.
(Overlapping conversation)
H Hotels anyway --
(164)
L
12A. WHITE HOUSE TRANSCRIPT, APRIL 4, 1972, 4:13 - 4:50 P.M. MEETING
-8-
P (Unintelligible) you build the fact that the arena is in trouble,
in other words, you've got to find the cause. This subject
came up before, you know, you raised it. Bob, and said,
well, our people are so stupid on public
relations that I'm sure the way it would come out
is we went because we didn't want to stay at the Sheraton
«where somebody I understand agreed I was to stay.
H No.
P I'm not even going to stay any place in San Diego -- I'm
staying in San Clemente, but be that as it may that was
apparently some story that they had. Well anyway, whatever
it %vas, the question is w^hether or not at this point w^e could
start the talk. It' s awful hot incidentally, terribly hot.
H I can see that
M Well, we've started this
P Put it on the basis tlat the arena can't be finished. Can we
do that?
M Yes, as a matter of fact, I was going to say we're starting
this, programming this, by sending people out to continue,
and I say continue the negotiations with these Canadians
because they don't want to give us a place for lead time in
order to get in there to do the improvements, etc. , etc.
(165)
12A. WHITE HOUSE TRANSCRIPT^ APRIL 4, 1972, 4:13 - 4:50 P.M. MEETING
-9-
H Then we could start the cost thing and then
(Overlapping conversation).
P I'd just say that the arena would not be finished.
M Well, the cost factor goes in v/ith the negotiations because if
you don't get into the arena to do the reconstruction by a certain
date your cost factors multiply and multiply and multiply --
so you just (unintelligible) the same factor. In the meantime,
I talked to Bebe this morning and a Miami Beach of course is
the logical place.
P Sure.
H (Unintelligible)..
P Well, if it's all set up -- safe -- television -- that's the major
consideration. At least it's all there. Go to the stupid damned
» place again, and I got a place to stay this time I woxildn't have
to stay in a hotel.
M So Bebe has got this fellow Myers.
P Hank Myers.
M Hank Myers, who has the contacts and so forth, quietly can-
vassing to see if the arena and the hotel rooms will be available.
H This time of year?
M Oh hell, they run a lot of conventions.
(166)
12A. WHITE HOUSE TRANSCRIPT, APRIL 4, 1972, 4:13 - 4:50 P.M. MEETING
-10-
P They run a lot of conventions but they'll clear them out by that
time. It isn't really, I've been there in June and August -- we
all have -- and they do run conventions, but generally speaking,
it's still more open in the summer and the rates are lower.
M Of course
H It's still ridiculous though.
M So, if the only negative factors that I see in the change
P Is the admission of guilt in ITT, right?
M Well, I think that that will go by the boards.
P Maybe that's better than just having the daraned story rehashed
again.
M I would rather have the -- if they can sell it as an admission
of guilt now than I would have the television cameras on the
Sheraton Hotel all through the Convention.
P That's right. That's right.
M I don't know
P My theory 'is - It's the old story you know that a good poker player
cut your losses -- get out of the bad box and get out of it fast.
M I don't know how our friend the Governor would take this. He
might be damned glad to get the problems out of the way. I
don't know, but we would do --
(167)
19.A. WHITE HOUSF ^r^^N.nPTPT. APRIL 4. 1972, 4:1Z - 4:50 P.M^_MEE™L
-11-
P Can't we -- could we have a situation where we have a break
with the Canadians. You see what I mean? Create a conflict
with thern. '
M That's what v/e're
P And then go out and announce it, but it's got -- if for once we
could do the PR right --if for once -- just one single solitary
time -- and keep it out of Bob Wilson's hands -- and do it
right -- but the problem is that the conventiot
(unintelligible) that is the arena won't be ready, the cost is
too great, or . . .
M That's the way we would program it.
P Think it would work?
H Sure. I think it w^ould. You're bound to get some bumps on the
other side? So what? You got a base a story -- just stick with
it -- couldn't get the arena done -- made a mistake in surveying
it. It's all fallen apart.
P You've got to establish that immediately though. This is April,
and the Convention is only five months away, and so everybody
is going, as you know, now that's going to be ready --
M You see these negotiations are going on and \^at we ^vere
proposing to do is to send a big architect and a builder or
somebody else up to have a confrontation with the Canadians
in Vancouver.
(168)
Tj^^^__r.n:Trr^ mil^F TRANSCRIPT, APPTL 4. 1972. 4:^ - 4: SO P.M. MEETING
-12-
P Well let's do it.
M Well, wc want to make sure we can go to Florida before we
break this pick.
H I'd just soon not have a convention, but we can't get away with it.
M Have an absentee ballot -- that's what I'd prefer.
H The Ripon Society is suing us for improper selection of delegates
or something.
P (Unintelligible).
H We have something where you state that (unintelligible) to the
President gets eight additional delegates or something and the
Ripon people have gone to court and some judge has upheld
them on the first round.
P Is that right? Well that's been done -- been done from the
beginning -- I don't know whether it means anything.
H I don't think it does. They don't seem to v/orry about that anymore.
M The fact of the matter is that there are a few rules that a political
party has control of it's Convention and in the past they have
ignored even the state laws that require people to be pledged for
so many ballots and so forth. They've just ignored them.
(169)
22A. WHITE HOUSE TRANSCRIPT, APRIL 4, 1972, 4:12 - 4:50 P.M. MEETING
-13- •
P Let jne ask you this. Do you think the possibilities of major
demonstrations are less in Florida? It doesn't make a hell of
a lot of difference anyway. I'd rather have a demonstration in
Florida than I would in California anyway. California is a state
we have to go for for other reasons.
H Well, I think they are infinitely less.
M Infinitely less.
H You've got much better physical (unintelligible).
M And in addition to that you have all the Democrats in control in
Florida from the Governor on down -- where in California you
have all the Republicans in control.
H (Unintelligible) have demonstrations (unintelligible).
P One story John, whenever you're asked about a (unintelligible).
You know, I'm the only one in the whole outfit that
didn't want to go to California. I was against it all the time.
M You wanted to go to Chicago. I didn't want you to.
P I did. That's right, but 1 (unintelligible).
M No question about it.
P How about Chicago now?
M Daley wouldn't let you in there, 1 bet.
P Oh
(170)
12A. WHITE HOUSE TMNSCRIPT^ APRIL 4, 1972, 4:13 - 4:50 P.M. MEETING
-14-
H Can't start from scratch from anyway now, I don't think.
You've got
M Be very very difficulty
H It would.
M And we have a month between the Conventions -- more than
a month in which
H Clean things up
M To change things enough to make it look like -- assuming that
(unintelligible)
P (Unintelligible) platform in.
M The facilities for crovvd control are so much better in Miami
Beach there.
H And of course the cost is
M And we save money LEAA money, we don't have to
H Save police money.
P The other point is the Democrats really fouled up, and the
police and the rest will feel that they have a responsibility to be
a little bit more restrained when we're there. Well, I hope you
can do it. My idea is -- I'd wait. Obviously we have to get ready
when it's ready -- I'd say in about 30 days from now.
M I think we could move in on it before then
H Faster
M Because we're at the point where
(171)
r
I
12A. WHITE HOUSE TRANSCRIPT^ APRIL 4, 1972, 4:13 - 4: SO P.M. MEETING
-157 . . ■ ..
P (Unintelligible) no way you could do it though without being charged
because of ITT
M Well Herman came out with a statement today which shows
that ITT's contribution is down to $25, 000. I just think that the
cost of it, the labor problem, the possibility that you'll never
get that place in shape
P Yeah
M Ah, added on top --
P Also, we don't -- there's very little that we could do to screw
up Florida as a state that we might win. California is a toss
u--" anyway you figure it. It's a to carry and there's a nasty
. incident that could hurt us.
M Yep.
P That's the point. On the other hand, I don't think Reagan's
attitude is supportive. He wants to carry the state. On the
other hand, you got to figure whether or not -- these clowns that
want to go there say -- oh it would help so much -- and all that
business.
H (Unintelligible).
M Well -- you've a double edged sword there --if everything
went off nice and peaceful and you had all those 10,000 college
kids we were going to have out there marching with their
banners and everything was beautiful -- that'd be great.
P Yeah.
(172)
I 12A. WHITE HOUSE TRANSCRIPT, APRIL 4, 1972, 4:13 - 4: SO P.M. MEETING
-16-
M But if you have one of these confrontations with a Republican
Governor and a Republican Mayor and Pete Pitchess
is sending in his storna-troopers -- why
P Yep.
M Well that's where the police are going to come from, you
know they don't have enough in San Diego to handle it.
P (Unintelligible) send Pete Pitchess down - Sheriff's posse.
Those old farts riding their horses. Well, I like it, but I
would say that if you just start getting the word out awful fast
about the (unintelligible) problem you are having with the
Canadians. Is that being done, I haven't seen anything?
M "Well, it's all local out there. It's known locally.
P The main point is to get it out nationally. Well,
H Local too.
P Who would say that? -- the Mayor would say it or the Convention
Committee -- that we regret that we cannot handle it -- that we
cannot have the hall ready.
M Well this is the Republican Convention and they wouldn't be
saying it because they would, of course, have to bring that site
selection comimittee back and they'd have to put out another call
and things like that; so it would be the Republican National
Cominittee that's the party of interest.
(173)
; :?24. WHITE HOUSE TRANSCRIPT, APRIL 4, 1972, 4:13 - 4:50 P.M. MEETING
-17-
P Ok. -- Well leaving that subject -- what else is -- 1 guess
today is Wisconsin isn't it?
M It certainly is -- ought to be an interesting go -- ah -- I told
those fellows over there tonight with Dale and -- Dole and so
forth -- to get out two thoughts in connection with this primary
in Wisconsin. Number one, that there was a clear indication
because of the proliferation that the Democrats did not have a
viable national candidate when you look at who won in New
Hampshire and who won in Florida and who w^on here and the
next place and secondly, if there was any winner at all it was
Teddy Kennedy. Now Teddy's been getting a free ride, but not
being drawn into this, and if you have Dole, Dale and whoever
- else bring this up that --
P Why wouldn't you say that Teddy is going to be the nonninee.
M Yeah, Teddy's getting
P Rather than he's a -winner --I'd simply say that McGovern's
a stomping horse for Kennedy and Lucey is the Kennedy man and
it looks like Kennedy is going to be the winner of the nomination.
Looks like Kennedy. None of the others have got the horses to
win it. Smoke him out a little.
M That's right and then, what I would hope would come out of it --
is what the Republican National Chairnian and so forth are saying
(174)
12A. WHITE HOUSE TRANSCRIPT, APRIL 4, 1972, 4:13 - 4:50 P.N. MEETING
-18-
M is that the reporters will be going to these otlicr candidates
and say '"what do you think about what they are saying about
Kennedy" and let's get them posturing themselves against Kennedy
so that he doesn't get this free ride,
P It's clear,, it's clear that this is a -- Mel Laird is saying that
the reason Muskie has been really poleaxed there ainong other
is that Lucey and the Kennedy Democrats have ganged up on him.
They got behind McGovern, not for the purposes of supporting
McGovern, but to kick the hell out of
M Muskie
P Muskie, and also, he said they did it for another reason: they
didn't figure Hubert had a chance before Florida and didn't have
time to change their course until then or they'd all been for
- Hubert, but then anybody but Kennedy. Their purpose was to stop
Muskie. But they've done that -- now Hubert, of course, has
come in.
H They can't stop Hubert! (Laughter)
P They can't stop him if he wins this time.
P I think he will. I think he'd be first -- McGovern second -- and if
Wallace is third, I think Muskie then would be fourth, but that's
just a guess.
(175)
12A. WHITE HOUSE TRANSCRIPT, APRIL 4. 1972,. 4:13 - 4:S0 P.M. MEETING
-19-
M I don't know how the
P Maybe Muskie will be - - Muskie will be second.
M Well, I doubt that very much.
P He's up there though. He had a big telethon push which I
(unintelligible).
M I don't think Muskie is going to have that drawing power up
there.
P You know the thing that occurred to me is that --it seems to
me that as you look around the states -- the big states --
New York is one that I don't think you could (unintelligible) --
you really have to be personally in charge out there, and
anybody else I let in there, you know what I mean, because
you've to play the game and Rockefeller's got to carry it for
us hasn't he? Have to get off his ass, but you've got to play
the game with those conservatives, right? And so there the
problem
H Incidentally, did you see Bill Buckley's -- you see that letter
he sent out?
P No. What's he done now?
H He sent out a letter to the -- I don't know whether it's a
circulation building letter or something to the publication people
or whatever it is - but anyway, the whole pitch is -- "I've been
asked about this coming election or something, and I will say
proudly I will vote for Richard Nixon for President. I consider
(176)
12A. WHITE HOUSE TRANSCRIPT. APRIL 4, 1972. 4:13 - 4:50 P.M. MEETING
-20-
H any one of the Democratic possibilities would be a disaster
for this country. " Me said that "Nixon will be a problem too
M or P (Unintelligible)
H but that he has the job" -- no, he insists that "he has the job
now of doing just what the conservatives want of pulling together a
sufficiently broad coalition in order to be elected to govern. " He
said "I would not vote for Nixon as editor of a convservative
journal. "
P That's very good.
H And he said "I don't feel that we should abandon our principles
but when we get to the election we must vote (unintelligible).
P Then he sort of sticks it to Ashbrook?
M Well, Bill's written
H He said he was going to do that
M A couple of column's you know that go in this
P How does he, well how does he deal with Ashbrook. I mean
does he want him to get a good vote anyway?
H Yeah, because that's forcing you
M That's the signal
H To take a conservative position.
P I mean I watched Ashbrook closely
H You watch Ashbrook closely and get your guidance from
(unintelligible)
(177)
12A. WHITE HOUSE TRANSCRIPT, APRIL 4, 1972, 4:13 - 4:50 P.M. MEETING
-21-
P Wliat I was going to say is -- in Pennsylvania, v/ho do we have
there that you would say -- you also will handle New Jersey
won't you? I don't think (unintelligible) or v/ere you using Scars
or others
M Yeah, Sears.
P What about the list of the big states? We got New York and
New Jersey. What would you say about Pennsylvania?
(Unintelligible). Or do you just divide the state up?
M Oh, do you mean who do we have in Pennsylvania?
P The boss, I mean it's a (unintelligible). Who would you consider
to be the top man?
M That's really divided into regions but Arlen Specter is -- well
P Specter is our general
M Well he's our campaign director. Scott and Schweiker are the
co-chairmen, and Arlen --
P Specter is the statewide chairnnan?
M Yes.
P Good.
M Well he's really going to work.
P Well he's good.
M And a
P And he wants to be governor doesn't he?
M That's correct.
(178)
12A. WHITE HOUSE TRANSCRIPT, APRIL 4, 1972, 4:13-4:50 P.M. MEETING
-22-
P Whether he wants to be (unintelligible), he's good don't you
think with the Jews and with the Blacks and (unintelligible)?
Also he's with us.
M Yes, and also he's -- we're deciding whether Rizzo's campaign
manager shovild go to work for Arlen Specter now or wait and a
P How's his relationship with the Pittsburgh crowd, all right?
M They're good, because we've got other lines
P But Specter -- that's the guy --in other words you wouldn't
be in direct -- you wouldn't need anybody here to watch
(unintelligible) ?
M We're going to have to have people to do that, but what I've
done
P (Unintelligible) you ought to handle that
M Well let me.
P On a real tough job, I would not let them out of your hands.
I don't know whether you can do them all but
M No, I've already decided that in California, Illinois, Ohio,
Pennsylvania, New York and New Jersey, that I am going to
have a direct line through to the people. The other states we
will have these surrogates
P Surrogates.
(179)
12A. WHITE HOUSE TRANSCRIPT, APRIL 4, 1972, 4:13 - 4:50 P.M. MEETING
-23-
M Regional people. Now, what I want is what we've talked about
before, it's -- well, use the example of California: If we can
get Cap Weinberger, if he's not so far "Hatched" that he can't
do it. Cap could be a state desk man or auditor, or whatever
you want to call it, somebody with the expertise of politics in
California -- can go in and see what's going on up in the Valley
under Monag.an or what Packard is doing and his people and
San Francisco, or what they're doing here there and the next
place. I expect to have somebody like that for each of these
big states. But I think
P I'm afraid he is "Hatched," but a
M Is he?
P (Unintelligible)
M Cap is a pretty bright able guy and he's been immersed in
politics out there as state chairman
P Wonder if we should pull him out of the Budget?
M He gets along with everybody.
H Well, he doesn't want to stay in the Budget.
P I know he doesn't want to stay there. Can we pull him out and
put him in an agency. He might be just as good a man as you
could find around California.
(180) .
IM^ ^HITE BOUSE TRANSCRIPT, APRIL 4. 1972, 4:13 - 4:50 P.M. MEETING
-24-
M Can he take a leave?
H Just resign.
P Let Carlucci.or somebody else be Budget Director if he
resigns, and
H After you get a Budget Director.
P I'd have him as full time. George could find somebody
H You've George on top of it.
P George Shultz can run the Budget, (unintelligible). I really
think the thing for Cap --so important that you want him
(unintelligible). Illinois?
M Well, we've got, of course, Tom Houser is a good operator and
I haven't got anybody yet.
P Pretty good, yeah
M Tom Houser.
P He's Percy's man, you know.
M No.
P No, I meant he was.
M He was.
P I mean his
M He broke with Percy you know when Percy went back on his
commitment to vote for you -- or to me to vote for you at the
Convention.
(181)
12A. WHITE HOUSE TRANSCRIPT^ APRIL 4^ 1972^ 4:13 >■ 4:50 P.M. MEETING
-25-
P VVell he helps us in the area we needed him (unintelligible)
and so forth, and Texas?
M And we have
P How does Texas stand?
M We have Al - - we have John Connally.
P (Unintelligible).
M We have Al Topper (phonetically) downstate.
P Oh, good.
M Who is, you know
P (Unintelligible).
M And so -- plus a lot of good regional people -- even a top flight
guy in the city of Chicago which is a real good politician. In
Texas, I've been talking to John Connally about it.
P Have you? Good.
M John's feeling is that by the time they get to the Democratic
Convention he is not even sure that Bentsen or the Lt. Governor
P Barnes
M Ben Barnes or these people should even go to that Convention.
I guess it's his line. What he is angling for in effect, is keep
your options open. Don't get tied in with an organization now,
because you may want to bring
P Texans for Nixon, I know, I know (unintelligible).
(182)
12A. WHITE HOUSE TRANSCRIPT, APRIL 4, 1972, 4:13 - 4:50 P.M. MEETim
-26-
M Well, on the other side of the coin, of course, our Republican
• friends are getting itchy and I keep telling them to go out and
write you some more Republicans -- but they say we E, we're
going to lose good people to the gubernatorial campaign, etc, , etc.
P Let 'em go.
H So what?
P Let them go. They don't -- that doesn't make any difference.
Hold it firm. We need Texas Democrats. We don't win Texas --
we haven't won it yet -- but you don't win it with Republicans.
We never have. And let's just face it, that's the way the score is.
Tower has won it once or twice but -- accidents, pure accidents.
(Unintelligible) any Democrat, believe me, by any Democrat
(unintelligible) committee of that sort is better. Rather than
■ that fellow who is finance chairman down there. What's his
name ?
H Al Fay
P Al Fay
M You mean Peter O'Donnell? Peter's left.
H He's left?
M Peter quit. He's (unintelligible) national committee
(unintelligible).
H I'll be darned.
M Agnitch is the new national cornmitteeman.
(183)
41-566 O - 74 - 13
12A. WHITE HOUSE TRANSCRIPT, APRIL 4, 1972, 4:13 - 4:50 P.M. MEETING
- 27 -
-P Yeah.
H O'Donnell was such a horrible whiner,
P Ohio !
M Ohio we still have the Bliss.
P Bliss is still.
M Situation.
P I thinly going for the old timer there is a bad idea. What do
you think Bob?
H I think it is a good idea.
M Well, we have to, Mr. President -- almost have to -- to keep
the Taft forces and the Rhodes forces and the rest of them.
P Well, we've got to go for the young too and the rest, but
I guess Bliss is
M Well, Bliss is going to come back to work for me, you see,
he wants the recognition.
P Great.
M He's not going to be the guy to come and do the nuts and bolts,
but he wants the identification with you and back here to
re-establish his
P Let me ask you this. We have these curious reports, which,
you've seen these of course, (unintelligible) out of Michigan
showing we have a chance in Michigan. Do you think we ought
to take a whirl al it or not?
(184)
12A. WHITE HOUSE TRANSCRIPT, APRIL 4, 1972, 4:23 - 4:50 P.M. MEETING
-28-
M We're going to take a whirl at it. We're going to take a whirl
at all of them.
P Well (unintelligible) even Minnesota?
M Well, 1 mean a whirl at them to the point where we're going to
organize to the teeth and then when it comes to where you're
going to spend the money on your media, your mail, your
telephone, and things like that, we'll make the judgment a
little further down the line,
P Michigan judgment could be very interesting because if it gets
really heated up on busing, if it could, and we're on the one
side and they're on the other side, you might win the state on
that issue. You agree Bob?
H Sure.
M In addition to that, look what you've done for the automobile
industry.
H That was a year ago.
P Well, still
M It still can be sold
P Sold lots of cars
M And, Milliken is all aboard and he's working hard, and we've
got a good chairman out there.
(185)
12A. WHITE HOUSE TRANSCRIPT, APRIL 4, 1972, 4:13 - 4: SO P.M. MEETING
- 29 -
P I'd even run -- I'd even have some sort of a campaign on that.
I'd even do soinething in Massachusetts. Do you know v/hy?
Solely because I think it isn't good to let any one area just go
completely.
M No, you can't, because of its rub off on Vermont.
P (unintelligible)
M We've got an added starter there v/ho wants to be the chairman
to get out and work and that's the Governor.
P He does?
H Sargeant?
M Why not? He gets
P Won't hurt us !
M He gets on the tube.
H (Uiintelligible).
P Well, he's a good liberal fellow.
H He really wants to get in?
M Yep -- and I think we can get it cleared with Brooke and Volpe
and all the rest of thern.
P I think there's a great deal to be said to go for every state.
You know the line I took with these people -- the governors
which they all like to hear -- but you take, I was telling Bob
the other day that in terms of our own plan, of course, we've
got to look at everything you can without killing ourselves or
without being over exposed. But, I feel very strongly that
(186)
12A. WHITE HOUSE TRANSCRIPT. APRIL 4, 1972. 4:13 - 4:50 P.M. MEETING
-30-
P Wallace in or out, we ought to hit of the southern states that
1 ought to get to Georgia, Alabama, Louisiana, and Mississippi,
because I think if we can sweep that South and of course Texas
is the big question mark (unintelligible).
M Did I tell you about Connally's poll that Barnes ran down there?
Shows the President did very well -- quite different from our
polls.
P In Texas?
M Yep.
P Our poll shows five points behind.
M With Muskie, yeah.
P Of course that v/ould be
H That was awhile back.
M Quite awhile back. Yeah. But John Connally's impression is
that you're in good shape in Texas v/ith or without Wallace.
P Well, that's hard to say (unintelligible).
M Well we don't have that liquor thing down there this year that
we had in '68. That was v/liat really did us in.
H (Unintelligible).
P You know (unintelligible) really kicked Muskie in
(unintelligible) that Harris Poll showed him slipping in the
trial heats. Apparently (unintelligible) something similar
(unintelligible).
(187)
12A. WHITE HOUSE TRANSCRIPT, APRIL 4, 1972, 4:13 - 4:50 P.M. MEETING
-31-
M Well, this has a hell of an impact because the press picks it
up and drums on it day in day out.
H Especially because he had been (unintelligible).
P (Unintelligible) Gallup (Unintelligible) even, even in February
and now (unintelligible).
M When is this coming out?
P I've got to see the Ambassador -- he's leaving -- he's leaving.
M Oh, is he?
H Going honie.
P Yep. Well, anyway John. (Voices fade).
H French Ambassador's name is Kosciusko. Figure that one out.
P For your -- I can't tell you too strongly now v/ith regard to the
San Diego thing -- got something to do, do it! Cut our losses
and get out. But I do think that from a PR standpoint. Bob,
at this time we really ought to.
H (Unintelligible) ahead of time,
P To build (unintelligible). Start a fight right now. Play hard
(unintelligible) no question,
M As soon as we see any light through it at all.
P I'd start right now.
M Give them the guidelines and put them right on it and let them
stay right on it. (Unintelligible).
P John, I would start the fight right now. (voices fade away).
P Well, Mr, Ambassador, (The French Annbassador and
Dr. Henry Kissinger enter)
(188)
13. Durinr, the days following tlie publication of the "Dita Beard"
mLCTnoi-andiini on February Z9, 1973, severs-l of the top Vv''hite House
aides were involved in investigating the allegations contained in that
memorandum.
The actTial settlement of the ITT cases as a quid pro quo for an
ITT commitment to the Republican National Convention v/as the focal
point of the Klcindienst Confirmation Hearings which began on
^larch 2, 1972. Peter Flanigan, a White House' aide, was the object
of considerable at-tention from the Senate Judiciary Committee and
press during the coverage of these hearings.
Page
13a Testimony of Charles Colson on June 14, 1973,
before the Special Subcomniittee on Investigations
of the Hoo.se Coinmittee on Interstate and Foreign
Commerce, page 202 ". . . . 190
13b Statement of Richard G.Kleindienst, dated 10-31-73 191.
13c Testimony of Richard G. Kleindienst, 2 KCH 95-96 192
13d Memorandum of March 13, 1972, to John Dean froin
Charles Colson 194
13e The Washing;ton Post, April 27, 28, 1972 198
13f The Boston Globe, April 13, 1972; and The
Washington Post, March l6, 1972^ 200
(189)
13A. CHABLES COLSON TESTIMONY, JUNE 14, 197 Z, SUBCOMMITTEE OF HOUSE
INTERSTATE AND FOREIGN COMMERCE COMMITTEE, 202
(
u
202
^^l•. PrrKT.r.. Tf you sent liiiM lo Deii\'cr, Colo., wliat 'u^-.s (lie piirpo.se
of r lie interview?
^fr. C'dlsux. We T^x'i'e tryiuir nt tliat iioint in time to determine
■\vlictlier or not that \vas in face an autiientic iiienioranduni. If yon will
veeall the cir'ainistanops at that time the entire tlii-u.^t of the case that
was beins; bailt ati^iinst ^h\ Kleijulienst. th.e. entire t]irn-:t of the ca^'e
in pontrovei-sy in the Senate Jraliciary Comniittos tunieil on tlie lan-
pnace of tliat memoranclnm. 'i"he questioii of •whether or not that vras
in fact an authentic mcmoran.dum. Tiie question of whe.th.er tlie facts
presented in that memoranclnm were facts or were not facts were
very central to tlie <'|uestion of whetlier T\rr. Tvleindienst woiiid be con-
firmed. ThooO were very seiious acctisations ostensibly made in Mrs.
Beard's memorandnm. ■
It became very critical for ns — I say "ns", the. administration, to
kno'w wliether in fact that was Mrs. BearcVs memorandum, or wliet.her
it was a forcerj- or wliether it was i:)repared at some otlier time for
some other purpose, and we liad reason to believe the memo was not
accurate. The only way one could find out for snre was to go to the
person, -who allcpcdly wrote it and fin.d ont..
]\Ir. Pickle. Is it trne, Mr. Hunt went to Denver in di.souise with
a wia on and slijiped ir.to tiie liospital ?
>ir. rnr..soN. Xo, I never sent Mr. Hunt in disguise or with a wJc: on.
Mr. PiCKi.E. I didn't ask fiiat, 1 asked did he go there and go in
di.-n:nise?
Mr. CoT.sox. I have had that reported that he did but I do not know
for a fact he did.
Mr. Pickle. You don't doubt it since it has not been denied ?
Mr. C0L.S0N. I have no reason to doubt it.
yiv. PiCKTj;:. T\^hy did he put a dissnise on if you were properly
concerned about Mr. Kleindienst, 'why didn't you put on your Sunday-
go-to-meeting suit and fly out there and tell the press you were going
to do it?
Mr. CoLsox. I didn't suggest to Mr. Hunt how he should conduct
the interview. I simply told him to go out and iind out wliether it was
her memorandnm, whether she had written it, and if itivas true.
Mr. PicKLK. You didn't discuss an\-thing about putting on a disguise
and going into the hospital ?
^Ir. CoLSOx. Xo, sir.
Mr. Pickle. That was never mentioned, that was Mr. Hunt's idea
entirely? _ .
Mr. CoLSOx. Yes, it was.
]\Ir. Pickle. Did you concur with it?
jSIr. CoLSOx. I don't know that the subject carne up quite that way.
I would have to trace a little more of the background to give you an
accurate understanding of what happened. There had been growing
evidence in the earJy days of March that the memorandum was not
authentic. !Mr. Himt wrote me a memorandum I believe on the lOth of
March in which he said that information had come to his attention
that the memorandum was not authentic. He proposed in the memo-
(190)
i3B. RICHARD KLEINDIENST STATEMENT^ OCTOBER dl, 197S
T_..
J. \^^\L
^'\
,i.
01 i\lemdienst Statemeni on LT.T
a question by Senator Fong |
conCiTT.ing r<Ir. Fhnigdn '.hax |
I niade tlie otliir statemeni;
Sjfc'.il lo !>; N>-r Vo.-* T.=l»,
V/ASH/;VGrOA', Oct, 31 —
iol'.owing is r.':e text of a
^taiirr.er.e issui'd by fanner
Altorney dreral Richard D.
Kleindizr.st in dejensa cf hur
ro'.s in c,r>. antitriist ecu?
c^dinst the Intsmctioncl
Telephone cr.d Telegraph Cor-:-
poration: '^
Three wsel-cj ago I had a ■
convarsit'oa at the Spsciai .
Prosecutor's office with Mr.
Cox and V?.ri of his as^Litialj
canceiT.ins tha hindling n:
tha i'.T.T. antitr-o^t casa d'dr--
ing my tenure is Deputy^At- ■
torney Gensral. A^- story ui.v.
7h2 New Yori< TLtrias yejti^r-
day, which. 'Aai^repeaLs-di crtr;
the cct'.vork3 anA.-ia ne'.vs-;'
papers 3-rour.d. ths country, .
contained a vetyl'specific: ri—
port of one- part- cf. that ccn-
verjation.. _.-. _ .."■::. •
As a. restilt of; tha laaJc-b
The Times, . I cava be^a ac-
cused en- catioaal tehvisioa
of having givda false infcr-
rr.ation to ths. Senate Judi-
ciary Comrnitt£-3- at the tL-nt: .
of. my nomicatiaa as Attcr.-- '
ney C-easrsl—That. accusation .
h ial53. . :■//■•■_ •
My conversation vAih Pro-
fessor Cox vjzs Ja°\d under
strict assurances of confidea-
tiaJity, and 25 Profsssor Cox
has 'stated, -was . a s3rioi:s
breach of faithion the part
o^ the Specia]_Bro5ecjtcr..l
contkice to regaid my con-.
versation v/ith- Priofsssor
Cox as coofidsntial, but be-
cause of the, distorted and
misleading accounts of my
conduct that, cave appeared
iif' the- press,- .-.1; if ed conr-
pellsd at this tiine to relate
an important aspect" of the
eveat v/hich wasnot'leaked.
On Monday ' 'aitemoon,-
April 19th, 1971, Mr. Ehrlich-
man • abruptly called and
stated that the President di-
rected me not to file tha ap-
peal in the Grinnel case. That
v/as the last day in vhich
thitappeal could be taken.
I informed hL-n that we had
rietensined to take that ap-
peai, fmd that he should so
info.Tn 'the President. Min-
utes later the President
called me and. without any
discussion ordered me . to
drop the appeal Immediately
th-ereafter. ! z-er.t word to the
President Lhat it' he persist-e-i .
in this direction I v/O'^id. be .
-^
quoted by C.E.S., as follcivs:
"... I v/ould liivs had a
vivid recollection if someone
at theWhita Hous? had called
compelled to submitmy res- ..me up and siid, 'Lool-c, KleLa-
ir;r.3tion. B?<:auie thai was
the last day in which the ap-
peal couid be perfected, I ob-
tained an e:c:erL5ioa of time
from the Si'.preme Court- to
enable the President to' con-
.'sider m>y position. - - . .
. The Pres'!';ent changed bis
m.Lnd and ths appeal w^3 filed
50 days later "in .thi- e.iact.
i0!T:n it would have been filed
one month earlier. Thu3, but,,
but for my threat to resign^
the Gnr-ceil ca.'ss would nev-
er have been- appealed and
dienst, ttiis is the v/ay v/e
are 50\ng to handlathat case.' .
People who know me, I don't
.think would talk to me- that
-Way, but if a^iybody did it
would be a vej-y sharp Lm-
pa-ct on my mL^d because I
belie-ve I knc^y how I would
hav2 re3pQnded2-;o such. con-.
vernation occurred."
.Both of these statements,
. taken in the conte.xt in which
■theywere made, were com-
pletely accurate. •
. . In-short, L did not pequra:
we would never have' been ..'myself or give false inf orma-
able to ooMui what even Pro tioa.to the. Senate Judiciary.
Committee. A f?.ir'aad objec-
fessor Core hi$ diarsctsriited"
as a settlement highly advan-^
tageioiLS to ther United State^f
■ At the time of m.y
mony befors tiie Sen;
diciary Corn.mittee, I
asked whether I had hjid any
contacts with • the. White
House at -the tLme^(
decision,; and- 1 did not.
any such contacts.
Focus of the Haarin^a
ny testf^
mate Ju-|
was not'
hjid any
White .
of this j
lot. deny )
" The focus' of the- hearings
dealmg with the- LT.T.' affair..
I was the negotiations In May,.
June and July of 1971 leading
to settlement of the pending
cases on July 31. I was ques-
tioned at length concerning
. these -negotiations and par-
ticularly with reference-
- to any conversations or meet-'
■ ings-I. misht have- had. with
Mr. Peter Flaniganof the"
. 'V'/hite -House staff. It was-in'
■ the conteift of those- ques-
tions that. I made the state-
ment quoted on C.E.S: news
last evening, as follows:
"In the discharge of my
responsibilities as the Acting-
Attorney General in' these-;
cases, I v/as not interferrerf
with by anybody at the
■White House. I. was not un-
portuned: Iwas-not pressured
f I was not directed."
{ It was also in- response to
-tive readin.? of the transcript
of my-ctestimcny will, so in-' j
dicat3.'.i . ■ .- "^
I deeply 'i-regret- the cir- '
cumstai^ces which have com-
pelled me to-n'.ake this state-
ment. However, in -view of
■'the ssribus breach of faith,
by Ihei Special prosecutor
'•and therdistorted treatment ct
my testimony . in. the prevs,
-I have.^ no - other choice. I
have done no wrong-
CUSTQA* TAllO:? ?^n■!^oll«<^l Sn«»»(
Ci u« ' Vvral Strt Cj A_,
X» uJMf' t****« Cf-*^ ..
Sn-i^U or^ 20 ceo ia»iw-
i^'V- !iOTaiEIl.«T^X" .
(191)
Z3C. RICHARD KLEINDIENST TESTIMONY, MARCH 2, 1972, 2 KCH 95-96-
PJCHAED G. KLEINDIENST
a?HTTESX»AY, MAJBCE 2, 1973
U.S. Senate,
COMIIITTEB ON THE JuDlCUVKY,
WasJdnglon, D.C.
The coiTLnjittee met, pursuant to notice, at 10:40 a.m., iaroom 2228,
New Senate Office Building, Senator James 0. Eastland, chairman,
presiding.
Present: Senators Eastland, Ervin, Hart, Kenncsdy, Bayh, Burdick,
Tunney, Ilruska, Fong, Scott, Thurmond, Cook, Alathias, and
Gurney.
/^Jso present: Francis C. Rosenberger, Peter M. Stockett, Tom
Hai-t, Hite' McLean, Thomas B. Collins, snd Robert B. Young, of the
committee stati', and various assistants to Senators.
The Chairman. The committee will be in order.
^■Ir. Klelndlenst, hold up yoiur hand.
Do you solemnly sweai- to tell the truth, the whole truth, and nothing
but the truth, so help you God?
Mr. KLEINDIENST. I do.
Mr. McLaren. I do.
Mr. RoiLVXTN. I do.
TESTIMONY 0? PJCH^ED G. KLErOTirJTST, ACTING ATTORITSY
GEirSRAL, ACCOTiEPAJIIED BY RICHARD W. KcIARE.!^!, rORHES
ASSISTiUTT ATTORNEY GENERAL, AITTITE.TJST DTYISIOiT; PEIIS
G. ROHATYN, DIRECTOR, D7TERNATI0NAL TELEPHONE & TELE-
GRAPH CORP. ; AND WALKER B. COMEGYS, ANTITRUST DIVISION,
DEPARTMENT OF JUSTICE
The Chairman. Tliis hearing was called at the request of Mr.
Kleindienst.
Now, the way the Chair thinks the proper procedure would be is to
hear }vlr. Kleindienst, Mr. McLaren, and the other gentlemen, and
then throw the matter open for questions by whoever on the comrnifctea
wants to ask them.
Now, Mr. Kleindienst, you may proceed.
^Ir. Kleindienst. Thank you, Mr. Chairman, and members of the
committee. .^
Fu"st I want to express my personal appreciation to the committee^
for providing me this opportunity at the earUest possible moment to
pro^-ide the committee the information that I have VvTth respect to
some of the charges that have been made in the pubUc press in the last
several days. -^
(192)
23C. RICHARD KLEINDIENST TESTIMONY^ MARCH 2, 1972^ 2 KCH 95-96
96
Tlie refi^oii why I asked for this hearing, Mr. Cliaii'man, find mem- I
bers of (lio coinuiittee, is because charges liave been made that T I
iniltienced the settlement of Government antitrust htigation for
partisan political reasons. These are serious cliarges, and l.iy ^^^tlJe of
the fact ihat the confij-mation of my nomination as the Attornc3'-
General of the Unit^ed States is before the U.S. Senate, I would not
"want that confirmation to take place with o cloud over mj'head, so (o
S])eak, nor would I want the U.S. Senate to act u]ion my nomination
if there was any substantial dotibt in the minds of any of the :\Iembcrs
of tlie U.S. Senate to the effect that while I performed my official
duties on behalf of the U.S. Government in the past 3 j^ears as the
Deputy Att.orney General, that I engaged in any improper conduct or
ill any cojiduct that would go (o or be relevant to the consideration of
my confirmation by the U.S. Senate. ""^
I am here this morning with respect to the matters involving the
ITT Co. and its antitrust matters before the Department of Justice to
tell j-ou what I did. And I have here with me this morning Judge Mc-
Laren, the Federal District Judge of the Northern District of Illinois,
and Mr. Fehx Koliatyn, a member of the ijoard of directors of ITT,
being the two persons \rith whom I had any dealings in connection
with these mat.ters to also have them tell yon what the}' did. And to
the extent that it involves me, to have them tell you what 1 did.
1 was involved in any way with respect to these antitrust mat ters by
virtue of the fact that the Attorney General, in 1969, disqualitied him-
self from (he consideration of any matters involving the I.T. ct T.
Corp. The reason why he disqualified liimself is that liis former law
firm has performed legal ser\'ices, I believe, for subsidiaj'ies of I.T. & T.
and, therefore, felt from the standpoint of proper conduct that he
should not become involved in any matter or consideration or decision
that would involve these companies.
In 1969, at the recommendation of then Assistant Attorney General
McLaren iji the Antitrust Di\nsion I signed as the Attorney General
in these cases, and as required by law, the complaints or authorized the
filing of complaints against the acquisition or proposed acquisition by
I.T. & T. in connection with tliree corporations, the Canteen Corp.,
the Grinnell Corp., and the Hartford Corp. Those complaints and the
nature of those actions ^vill be discussed in more detail, I believe, by
Judge McLaren tliis morning.
But, in any event, all three of those com])1aints, seeking on behalf
of the Government to prevent their acquisition by I.T. & T. were
filed in the year 1969 by the Department of Justice.
I reaUy had ver\- little to do or relationship -with or knowledge about
the ordinary j^rocess of those cases in the year 1969. Indeed, I have no
recollection of ha\-ing any meetings other than routine, or of a very
nominal nature in that year with re.-pcct to any one of those cases.
Approximately Aprif 20, 1969, I received a call from Mr. Felix
Rohatyn, who is sittmg here to my left, in which he identified himself
to me as a member of the board of directors of I.T. & T., and he stated
that he W8.5 not a lawyer and tliat he would like to come to my office
to discuss some of the economic consequences of the policy of the
Dejiartment of Justice to require by I.T. & T. a divestiture of the
Hartford Insurance Co. As a result of our discussion on the telephone
Mr. Rohatyn came to mj- ofiice on April 20, 1969. He again opened
up the conversation, and incidentall,y, only Mr. RohatjTi and 1 were
(193)
22D. CHARLES COLSON MEMORANDUM, MARCH 13, 1972.
THE WHITE HOUSE
WASHINGTON
March 13, 1972
MEMORANDUM FOR:
JOHN DEAN
FROM:
CHARLES COLSONt '
One of our great problems in the ITT fiasco has been
our inability to present directly and succinctly some
obvious strong facts on our side. The attached is an
attempt to summarize the three key points that need
to be inade over and over and over. I thought this
might be useful to you.
(194)
j 13D. CHARLES COLSON MEMORANDUM, MABCH 13, 1972
There has been so iTiuch innuendo, so much politi^l rheto: 'c and
so many smear charges in connection with the ITT case that I don't
wonder that people may be confused about it. A few facts need to be
put in perspective:
1, In two v/eeks of hearings before the Senate Judiciary Committee
there has not been one scintilla of evidence of any wrong doing,
Miot one scintilla of evidence that there was any connection between
the anti-trust decree in the ITT case and ITT's offer to a civic
committee in San Diego to help San Diego make a bid to obtain the
Republican National Convention.
2. The press continually reports "ITT's contributions to the GOP".
The simple. fact is that Sheraton Hotels, a subsidiary of ITT, inade
a pledge to the civic interests in San Diego to help guarantee the
financing necessary for the city to obtain the convention in S Diego.
"Whether San Diego got the convention or Chicago or Miami, -ould be
of little financial concern to the Republican National Committee and
the financing of this year's political campaign. In short, it was not
the Republican Party to whom; any pledge of financial assistance was
offered.
(195)
13D. CHARLES COLSON MEMORANDUM, MARCH 13, 1972
3. Perliaps most iini:)ortar.'Iy, the gov'.vrnmcnt did not, as has been
cha.rged, "drop" the ITT case. It forced upon ITT a tough, hard
Beltleuient requiring ITT to divest itself of 6 major corporations and
to agree not to engage in any furtlier acquisitions for JO years without
Department of Justice approvaL It is perhaps fair to note that this
decree, one of the toughest anti-trust decisions in history and the
largest, was achieved by this Administration even though the prior
Administration had decided not to pursue anti --trust litigation against
this saine corporation.. It is important also to note that this Adrruni-
straticn has c record second to none in vigorous anti-trust enforce-
ment. Most lav/yers and, indeed, naost businessmen, to their own
displeasure, agree that v/e have been the :nost vigorous enforcers
of the anti-trust lav/s in this country. Finally, the Solicitor General
o£ the United States and former Dean of the Harvard Lav/ School,
Erv^'in Griswold, appointed incidentally to this position by our predecc;
eor Deinocratic Administration, testified under oa.th last week not
only that this v/as a very tough settlement imposed on ITT, but that
had the government not obtained this settlement it probably couldn't
have sustained the burden of its case in the Supreme Court. Dean
Griswold was one of the primary officials v/hose judgment was con-
sidered in reaching the ITT settlement.
What the American public has been subjected to in the past two weeks has
been a campaign of smear and innuendo by one of the most disreputable
(196)
■ . . ISD. CHARLES COLSON MEMORANDUM, MARCH 13, 1972.
coiun:inists in America; Jack Anderson has tried to slander decent
government officials all the v/ay from Dean Griswold to P^ ■'^ident Nixc^
with half truths and fourth-removed hearsay evidence. The simple
facts don't support his charges; indeed, the facts arc quite to the- contrary,
although they have been largely overlooked in all of the political harangue
that has been so widely reported.
(197)
^
13E.
WASHINGTON POST, APBIL 27, 28, 2972
lay ■' •■> ;5 "
lr^
iiesiii
^.^>1^1
J 9 =' ;' "^
n.v s.i.-ifoifi
Fid-.nrd C".. Klcinciionsl.
Pio.'^irle'iil Xixna"? eir.bnlilod
r.nminf'f fiv .\iiorr.e>' C,cr.-
erni. ii to rc'i;i:"r; to- CaiKf.ol
Jfill for thi' tpvcnth Un'.c
■ {(>'\?.y !(i l.icn (iiinslidnir.'^ by
the S.-.'P.ntn Jiidiciary Co!Ti;r.!t-
tef.
■ri'.f roir.iniii'-f. sh.Tip'.y d:-
\ided on 'Ahoiher \o send
Klnii'.c!:pii>L'5 nominalinn ta
Dtc" Sen?.;? floor, voicd 9-10-5
yestcrdn\ lo cxiend liie cor.fir-
niaiion he;iri;i:;s I'or one r.ioie
riay lo icylcw r.!Mv- iriconsisien-
cics i.i the rocoid.
Boalii;:? down UomntTalic'
rfi'ort^ to cnM I'll !irr \v;i nrr'-i'"^.i
houc>fi". I)'.',' I'onimil'.ce ini-.
jiosort upon iiscir a 5 p.m.
deadlin." fnr .•> lin.il SDti' mi!
whC'liicr to rtTortini'.^nd ll-.at.
Klrinclicnsl he confiim'?d ;nr
the Crihin'^t post vacalPd
iMnich 1 hy John X. .Mitchell,
j Sens. Ed'.rnrd M. Kennr-dy
I (D-Mas.=;.) .^nd .Inlin V. Tuniicy
■ <n-C"alif.i i,niiit'di;urly I'nren;-
cned a pioirmtocl floor fi.;U<
to cJcfonl Kli-inflicnsl or pre-
vent, a vmc p.Uouether unles-
rurlhei- hearings are convened.
Senate Democratic Whip
Roborl C. B>rd of West \ir-
Kinia. who i^ aetinu as nia.ioi-
ily leader \chiie Sen. .M:!-:e
Mansfield in-Moiii) is in
China, ackr.ouled.;ed thai Sen-
ate consi<!eialion of Klein-
diensi could lake '•ieverol
weeks."
.\l the .<;,ime time. Tunney
dem.uidi-d that the Ju.'^lice Do-
parlinont l.-iUr.th an invest ;;;.'i-
lion of wheiher an.s of ti'.e wii-
Sce Kl,j;i.NniKNST, A-., Col. I
J. L'n'jar
^ : 1 [ ; "iV r 1 f f r
KLi:!.\'Dl[:N.Sr. From .\ i.
nc.^'^ej ?.[ [^c ■■'.ieiiidicnst he^ir-
in;;s h..T\c cor.imiied perjury. ■
If the .liidicip.ry C'omrnittee
e.^.doi "^c.^ Tu.'ir.ey'j deriiand —
ss he prcd;cl;d it would —
that could !h.-o'.v another
j^tumhl-ns hlnc!< in the p.'iih of
Ki.-'iiidienst's approval by "he
Senate. ^,a„,
Tiie qwestionin.cr of Klein- ^
dienst today, limited to a mnx- t
i.Tiiim 01 6'; hours hy the com- ^
niitlee"s 5 p m. deadline for a '■■
report to the floor, is expected ;
to foei.'s on th.e disclosure by'
Whr.c Hmusp .Tide Peler M.',
M.in;:M. in a I'l^-r Mo;"i:-y in '
which he ^3id iie had several
conversations v,i;h Klein-,
flienst last \e,Tr about a snti!c-|
menl of antiirust cases asainst
the ■■ Internaiional Tclepiione
anri Tele,'-:rriph Corp-
Kl.ini.can. v. jirj gave limited '
Irstimony Ijefore liie commit-
tee la.st week, said in the let-
ter that he pas.sed alone ITT's
complaints about a proposed
."settlement to the '.hen deputy
attorney ucnerni and also in-
lorm.cfl him when an outsitie
rons'.ihnnl h-id compieted his^
financial analysis of IT'i's ar-.
cuments. •
•"""""Kleindiensl. Ustifyin-^ last
I month, said he did rii)t r?c3!i
I riiscussin'.; liie fi'T in.nttcr at
' tlie White >!oU':e, but sus-
i nested there mi:_hi liavc been
I "c.'i.sual reference" lo it in
^iMnr eonvcrsations there.
C;n .March 8. linv^-ever. the
nominee specifically said be-
fore the committee that "I had
no conversation with Mr. l-~l2n-
i;;an" at the time the outside
financial analysis of ITT was
Mibmitled by Wall Street in
veslnienl banker flicbard J.
Ham.sdeil. |
The Judiciary Coni.mitlce
has been minutely prohin.;; thc;
co'jrse of adminibtratioii pol-|
icy m liie i'i'T antitrust cT'Ses,
l)i-c'iuse of an aliened coinpany
iricinorandum published by
columnist .lack .\nderson link-
ing the seitlen;eiil to a,n IIT
piediic of at least S-00.000 to
help brin? the Hepublican Na-
tional Convention to Saa
Dieco this year.
Democrats on the committee
are also e.vpeelcd- lo take the
opportuiiit.v today lo quii
.Kieir.diensi .?',..>■.:' v. !;•,- lie re-
tained liai.-y n. S'eward a.sihe
U. S. attorney in San Dieyo
despite 3 finding by the Crimi-
nal f)ivision ti^at .Steward had
encaijcd in "hi^thly improper"
conduct.
Tunno.v failed yesterday in
his effort lo perstiade the com-
mittee lo call further wit-
nesses familiar with Steuard's
flecisiori lo tjuasii a crand jury
.<uhpocna of a prominent San
Dici-'o Republican durini: an
investigation of il!et;al contri-
butions lo President .\i.\on's
19^3 campai::;n.
Sen. .fames O. Eastland (D-
Miss.). chairman of t:ic Judici-
ary Cominiitec, predicted Ihac
Kleindici'.st '.vould h.ave rine
or 10 voles in liis favor during
today'.s final review of lits
nom.ination.
■'l don't th.ii'k there .'tc any
loose enfJs.'" l:;astland to'd re-
porters- "'I doiiT think one ilay
will brin;; ou; .'inyihin^ new."
Tunney a.ureed with Kost-
land's prediction of the final
vote in con^mittce. but adde<l
that "1 think we have a very
(198)
IZE. WASHINGTON POST, APRIL 27, 28, 1972.
TT^T!
Iileiiidieiist AE3DroYeci> ^.
"IP) -IT? '■ 'r)rr--r^- yI) ^
d ^n m -P 'i '.' -i "1 T 4" ■! Q ri ;i .-! \\-^ "5 ' rs i! ^ p-
3 1 /I
.; (i ^v — .'_!
A
By Snnioiil J. Cir-'ar
V.a>ii.:i:-.i>:i ?o>: S;a;r \\r;;fr
'iho Single Judiciaiy Coiii-
ti-iiti'i:- voted II to 4 last iiii;h!,
to rcaiiiiT.i its rec-oiiinu'iiua-
Iion 0." iv.o monllis njo llut
lliclii.'d G. KJeir.dic-nsL Ijc con-
lirr.-.cd as Attorney Genci-al.
i5i;l Iho er.(ioisomc-iit icll
sliotl of the ii;ia"iniou5 .-ip-
piuvai giv'en K'.cii'.tiic;ibl by
jic Cuaiiiiittcc oil Feb. 24.
.\ V. I'oU after, tliat oii?i;ial
vole, [he confiini.'.lion liear-
iiij;s on the KleiiiUiensi iior.ii-
ri.Ttion •.'.rrc !To;>er.c-fi. .-.: )i':.^
ow 11 rcciucit. wiiL-n alk-::auoiis
wore raiiecl that lie v.as in-
volved in the setUenicnt of
three anlitru-st caic.-i a'Jainil.
the liiiernaiioiial 'loleahone
and Tcie^rapli Coi-p. in cx-
ehr.nsc for ITT's plocl:.;e of at
least s::;iJU.OJO to help b:-in-4 the
Kepuhliean National Conven-.
tion to S.Tii Dic;4o tiiis year
The ITT controvci'sy arcl
olhci- isiiies raibcd ajainsl
Kleindicnst (!u;in-i the htf.nr-
iii.us eoiikl slill threaten his
confi'.in;;tion by ihe ft:!! Sen-
ate. Democrats pled'.;ed ye;ter-
flay to v.-ac'e a prn;r;'.cU'd liooi"
fiSht against Kleindiensi.
Jn a liiia! day of le>lin'.,)ny
befcro l!ie Judiciary Conimil-
tce ye.-terd.iy. Kieindii-n.^t said.
lie ua.s u.".ab!e to recall the de-'
laiis of ."ievcral ionl.icts ui:h
While Ko.ise Hide '.'eter M.,
f'ljnic:n! last year roucerniii^;
the ITT antilnibt cases.
" lie ir.isiej. i-.ouever, that he
liad ir,.:(;e a:i "honc.'-l. sincere
ftnd ci/nseicnliou.-. etioit" to
clear up inconsistencies in the
hearinj ;ieord.
President Ni.xon'.-; nominee
to stiececil .John .\. .Mitchell as
head of tlie Justice Deparl-
iHienl rccei\ed liie votes of all: a.'iy of t!iy 24 da\s of iiearinu^
i Kepnblicans on the Senate ! oii Uie iior.-.inalion. was the
. comrv.ittee, a^ well 2s four 'oaiy member of tiic coraniittee
Democrats. jnol votin:;.
i Onlv Sens. Ed'-vard M. Ken-i But Sens. Robert C. Byrci of
inedy of .Ma.-<iach-jselti. i3irch ^' f-^"- Vir^tria. the Senate
jCavh 01 Indiana. Qtieniin .X. lOen-oeralic Vwiip. a.ntl I'liiiin
■Eurdickof North Dakota ap.d:-\- I'^""'- iD-M;ch.) announced
l-iohn V. Ti:nney of California.: ^'i^' '■'^'^''^ ^'O!"-"-^ " co.-nmiltce
.all Democrats, voted azainst:'''^ '■'3''- P'ec.jce a change u.i
favorablv reporlin'.; Klein- ; I'-c-ift when Kieindic.isfs
idionst's name to the Senate! i'^:'-^ comes trp before ir.a full
floor. [Senate.
Sen. John L. McClellan (D- !
'Ark.), who has not attended' See KLI^INDIENST, A5. Col. "
KLEINDIEXST, From Al |
dicnst nomination is still '
vvccks sway and. if Kennedy.
Tunney and other oppon-jnts
have their way, may never
come up at all.
Judiciary Committee Chair- •
man James O. Eas;l.-i7.d ID-
■Miss.) said all comm-.uctf mem- -
be.'S would have until May ."i to
submit their ■'individual
views" on the nomination.
Exactly when the Ktein-
dicnst nomination comc<: up
on the floor will be decided by
Senate Majority Leader Mike
Jlansfield (>.;ont.) on his r2-
furn from a visit to China
■with his Republican counte.'-
part, Hush Scott of Pe.^^.sylva.
nia.
Eyrd has already an-
nounced, however, that if any
senator places a "hold" on
consideration of Kleindienst it
will be respected for a week to
10 days.
Eastland, a firm supporter
of Klcinriienst. told rcportrr.x
l.Tst ni;:ht that debate on the
Cabinet nominee can be ex-
pected to last "several weeks."
but that he was confident
enough votes would be found
to cut off any filibuster by
Klcindicnst opsonents.
Defending a\;ain3l rhar-_Ts
(hat he h.-d deserted his Ucm-
oeratic coUea;;ues on the
Klcindicnst nonunation. Easl-
l.^nd .^aid, "rni for .-» sood
man. Tni not .i party hack.
lJi'.;l".t comes .;b>>vi- parly."
(199)
4l-5fifi n - 74 .
I
13F. WASHINGTON POST, MARCH 16, 1972
Ale iJidnr i-^iow
About Mc7:;iO
By Saiiford J. Uag;ir
AVj^..?ir;r- P-"t Star; V.*tl*?r
Harold S. Gender., presi-
dent cf the- ciiiUibiJLioa-
rtcUsr Intcmntiovial To)e-
phone and Tclograjj'i Corp.,
testified yesterd-jy that
tiiera r/as "absoliilcJy no
conneetioa" beivvtsu the
settler^ent of thiee govorn-
inent antitrust cns^s aj;ainst
ITT and its contiii'juiioii to
iielp bring tiie Republican
National Convention to San
Diego this year. .
In a Ir.te afternoon appear-
ance hf'forc ths f^Jiati; Judi-
ciary Cyir.tnjttesyr-vii;- exc-ct!-
tive said. "I know~~Kn'hing"
abojt n pub'.lEheci n-,cnite:';xi;
dum by., m" cfaiei lobbyist
Ditr. • T.>. Bsard wbith rinltsd
the 1-n'a EG^lt^rs. ■ . ■ ■.■■'_
Genoen coacECicrt,. hov.'ever,
that after Mrs. Ecnni's dikiso-
randur.i'-vVES jiu^iUs.hT^fi by sya-
dicatecl coluuinLU Jacr .'inder--
: son, ."some kiad.fvf documpcts-
'were £>./ oc'ded". si tlic- Wash-,
ington jpffic?- pi i'lT by.corpo-
rate-oiQuliN from Ifew York. •
Kessid he had ordPTCd ao^
inleraai.ln'.-esUsation- c£ the.
shreddAug incident and would
rep'i'-t h.\?V. ta the coi^.niittee-.
abositi:, »;e>.-Enr3i>-d:-y. : -.'■■j
"Thi! v.;.i r.TObib;y. hiCT^rf
react;o.i la . the ' feeling that,
our fii&s were open to the pub-!
lie tlian Ecy attempt to pre-\
vent a review" of tbetn, Ge-'
neen said.- : . ; ■ j
.In a .20-pKSe srcj.'jsd: state?^
ment 5 tl.'..it--ti8irr-'5d," Geneea-
also insisied that ITT's com-
mitment to support 'lie GOP
convention was $200.000 —
rather th^n the $400,000 that
has been reported and wa.?
confirmed by -the Rt-piiblican
N.ational Ciuirman, Sen. Bob
Dole (r^Krin.) last week:
J'n"s Sheraton subsidiary
made the financial commit-
ment, Gcr,cen said, to promote
a new lu.'jury hotel being built
in San Diego, on the condition
that it be President Nixon's
headquarters during the con-
vention.-'- " > ."■ ■■ "
(200)
13F. BOSTON GLOBE, APRIL 13, 1972.
e ,
/^•■By Charles E..Cla.fiev
/ Globe V/:;s,hm§tO!i
WASmNGXON — The Senaic- '
Judicirry Conimittecyeit^^rTiay voted
agp.ir.st orderixif^ WMic- licuss aids
Petei" LI. Flanigaa avid other Ad-
ministr3'.io;^- . ofr"ciJ:L?. ■ Ic- ■ tc s' -fy in
the nojiiination hcarini^s of jiltornej'
Gencral-dr3;;S)-:-te Elcbrsrd CKl.-^in-
dienst. ■ - , - •
Ei,;i, after the commi* ice. vote Sen.
Sam J.-7vrvii\ Jr. (D-N.C.) reatiinn.--
ed liis ir.',eatioTi to tr;-, to block the-
Kleindirni'; r,on-.lnat,joii ujilsjs Flarj-
gEa "pi^eari" to desciibe his role i)i
the J;u;ticR Be pcnjseiit's. out-of-court
settler.Aerjt of an 3iititi-u:rt .^uitagninst
Intel II ^rion-i Tcic;.!io:c ajid Trie-
graph Co'-p, (iri')..
• 'ErviT!, c; fornx.r i\o! th Carolina
Supreme Couji judgs and ?tri expert
on constitutional law, snid vhe White '
Hous3 claiiTi — that executive i.^ri^'i- - ;
lege .c.ribraees coirannrication he-
tween' diclei, aiid-.of-cplcoTitgide tho
Admbih'a-euvTi- i:-sb':-^d.y • '
Execiiiive privilege, the Nixon . ,. •
Admi;;i£t;v?-!:iC'a ■ ■ cc-i;,i,ecida, forbid-; --"-■ :- • •■
Congress- fiom compelling oxecutivs
branch, ciikiai:. to teati^y. . . •. ■ . ■ SSN. SAM ERVIN
ITT, Frge 4
,.? '"White House clainv absurd"
(201)
13F. BOSTON GLOBE:, APRIL 13, 1972
"?, i Vy •'_/' W -ii-i K^ i -i
q ■■■}
4 A
;nuea iiMm
1
' i Ln sdoi'.'.j:''.-;.' opposed
■- «::'.her the con-.i'r.iltee or
;-..:■ Senate uWir.g. any ac-
. ,- ■.'.-hauoevi;:' ur;;il these
:,; appcd.- -.diore the
-.lee,'' E'-'vi:; ;?.<.d.
K. vin acUiT;'-- leased the
■. .■.-^;;y ;'c; c::-'ci:tive
■-;".i:,?ge ir.vT.lvmg com-
■.■r;:c3l;on ber-vof-n Wliite
:..-e aides and l!:e Fresi-
.".. 01- bci'vcon Adi-.iinis-
.iir. oii'iciai^ making
:.i-icy.
But he said there is "no
a5tif:cation" foi- the ciaim
■ ;t executi-/?' rrivilese
;:--i^ned to pi'Olec: the
' -.-ildent has any bearing
.1 other cn-,p'L;'ce5 and
■.■;rd persons "dealing
.'.; ;r.atters of public rec-
11 d such as ontilrust
•U;C,
^>" e Kovise prcs!. sec-
c- Ron^M L. Ziceier
■■^s repeated his statement
;".' he "doesn't coiitem--
'i'.e >lr. Fiani.'.an le.itiiy-
:".i," and extended it to in-
■!jde another aide com-
■.i;ttee members want to
iuestion, William. Tim-
v'ons.
Sen. Eobert C. Byrd of
.Vest Vlrgrnia, assistant
D-!r;c jratic leridtr, ^r^id h.e
also might vote against the
nomination if i"!:-irs;gan in-
vokes executive prrvijege.
Asked if he would be
sal;s;ied iT Fjarigar. sub-
mitted a s'.stenient ralhej-
fhan appear in person,
Byrd answered that it
"would depend on ti'.a
statement."
Byrd, although a ir.ctn-
ber of the co.Tuniffee, has
not been present a'. nr:i' ";
the 15 days oi hci-.nn;s. He
has aiteiided the eoinmit-
tee"s executive sessicns.
In its executive se^•sio^.
yesterday, tlie conuiiiitee
rejected three motions, by
a t;e vote of 6-6, to sub-
poena Flanigati and other
White House- aides.. The
line-up was strictly ac-
cording to party lines, with
the chairman, James O.
Eastland of Miisissippi, ab-
stai.ning.
The committee rejected
a final motion to invite
Flanigan to appear at a
closed session by a vote of
9-4, with Sens. Byrd, East-
land, Marlcw Cook (R-
Ky. )and John V. Tuimey
(D-Calif.), favcring the
idea.
^aCHAKIJ ivLEINDIilNST FSTF.R JLAKIGAN
. . i-.ear;.;.; cor.-.inues
• i .■4
-'■; subpoena
. Sen.- Tunney said the
roniir.rttee's votes will
jeT.'ard;2s KJeind;en?t's
chances tor Secste coni;r-
r.-.ai:on. '•Thsi'e is r.o •■•■.-.y
we can get the trutii uritrl
Flanigon testifies," Tunney
said. •
Sen. Ed,vard M. Ken-
nedy said re expects the
niisiter of Tlanigan"3 te.-^i-
niony to come up in the
committee again before the
agreed-upon April 2Q cut-
of the hearir,gs. • '
In other- developments
yesterday, tire committee
voted to have two Denver
physicians, Joseph Snyder
?jid Ray Frier, examine
ITT lobbyist Dita Beard, to
determine if she is p-hy?;-
cally able to travel here
and testify; She earlier was
qt:est:oned by a subcom-
mittee at a D<?nver hospi-
tal.
The committee also re-
leased a letter to ChauTnan
Eastland from John W.
Dean, cotmsel to President
Ni.Non, advtsing members
Hf.
CC-iD
June29-Aug. ^3
■-4
I
I
V;.,> 7 0 c,Vrc
don, Amsferijon
mat a lanigan s mvoive-
ment in the ITT case was
"25 stated by Judae (Rich-
a-'d V.'.) il.icLaren. in his
jv.orn. tSotimo.'iy."
McLai-en, former cliief
oi the- Justice Depart-
ment's antitrust division,
testified that he used Fla-
ni;jan as a conduit m ac~
ciiiring the services' of a
?\ev/ Y.:)rk investment ajia-
}y:t, Richard J. Rarasdec.
Fiamsden evaluated a
presentation by ITT whicii
said that if the conglon'-er-
ate were forced to divest
itself- of three companies it
had absorbed in a merger,
the economic consequences
w o u I d be devastatmg.
Ramsden'.'; evaluation sup- •
ported the ITT claim, and
weighed in McLaren's de-
cision to seiiie out of court.
Former New Yor's Fed-
eral Judge Lawrence E.
Waish, whose law firm
represents ITT, testified
yesterday aitemoon con-
cerning his dealings with
KJeindienst in the case.
Walin said he sent
Kleindier.si a memoran-
dum in support of a review
of the Administration's
policy toward diversifica-
tion by merger, in the hope
it might rela.t its tough at-
titude toward m.erger.
He described his rela-
tionship-with the Attorney
General - designate as
"friendly, and one of mu-
tual respect."
(202)
14. The President left for an official visit to the People's Republic
of China on February 17, 1972; he returned on February 28, 1972. He
spent the weelcend following his return at Key Biscayne, Florida. On
Moy 20, 1972, the President went to Moscow, returning on June 1,
.1972.
Page
14a Weekly Compilation of Presidential Documents,
Volume 8, Number 8, 443-44; Volume 8,
Number 9. 482 ■ 204
1 4b Weekly Compilation of Presidential Docunnents ,
Volumes. Number 23, 912, 975 207
(203)
14A. PRESIDENT NIXON TRAVELS, 8 PRESIDENTIAL DOCUMENTS 443-44,
9 PRESIDENTIAL DOCUMENTS 482
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, FEBRUAItr 21, 1972
Inspection of Tax Returns
Executive Order 11650. February 16, 1972
Inspection by Certain Classes of Persons and
State and Federal Government Establishments
OF Returns Made in Respect of Certain Taxes
Imposed by the Internal Revenue Code of 1954
By \ irtue of the authority vested in me by section 6103
(a) of the Internal Revenue Code of 1954, as amended
(26 U.S.C. 6103(a)), it is hereby ordered that returns
made in respect of the taxes imposed by chapters 1, 2, 3,
5, 6, 11, 12, and 32, subchapters B and C of chapter 33,
subchapter B of chapter 37, and chapter 41 of such Code
shall be open to inspection by certain classes of persons and
State and Federal Government establishments in accord-
ance and upon compliance with the rules and regulations
prescribed by the Secretary of the Treasury in Treasury
decision 6543, relating to inspection and use of returns by
such classes of persons and State and Federal Government
cstayishments, approved by the President on January 17,
1961 , the amendments thereto approved by the President
on April 4, 1963, and March 18, 1965, and the amend-
ment thereto approved by me this date.
RiCHAHO NlXON
The White House
February 16, 1972
[Filed wilh the Office of the Federal Register, 2:58 p.m.,
February 16, 1972]
Red Cross Month, March 1972
Proclamation 4110. February 16, 1972
By the President of the United States of America
a Proclamation
Bom in war and raised in adversity, the American Red
Cross has evolved many traditions in its universal quest
to case human siiflering, but none have served it so duiab ■ -
as its tradition of flexibility.
Since well before the turn of the 20th cenrury, th.roueh
times that tested the very soul of our humanitarian ir.-
stincts, the Red Cioss has proven equal to the challer.sif
of each era with unfailing resourccfulnt>s, zeal and co.~-
passion. Red Cross programs and services we have lor.r
taken for granted — from disaster relief and blood barii
to nurse training and aid to militar)' personnel — grew c\i'.
of its pioneering approach in meeting generations of r^-
precedcnted crises.
This tradition has carried fonvard into the 1970s \v;-_h
undiminished vigor, and the Red Cross emblem may he
found on banners flying over inner-city child care centen
and drug abuse clinics. It is stamped on publications ar.i
co.ntinuing education materials dealing with ccologic:^!
concerns, race relations, the advancement of the arts, ar.d
rural development.
And as a member of the global^ society, the Red Crcs
continues to fulfill its international enterprise of merer.-,
but again with a flexibility that makes its mission as viiaj
and viable as at anytime in its history.
Now, Therefore, I, Richard Nixon, President of the
United States of America and Honorary Chairman of the
American National Red Cross, do hereby designate
March, 1972, as P.ed Cross Month, a month when evcry
citizen is asked to join, serve, and contribute in the same
example of unselfish spirit that has characterized the Red
Cross since its founding.
In Witness Whereof, I have hereunto set my hand
this sixteenth day of February, in the year of our Lore
nineteen hundred seventy-two, and of the Independence
of the United States of America the one huridrec
ninety-sixth.
Richard Ndcon
(Filed v.-ith the Office of the Federal Register, 11:54 a.=i_
February 17, 1972)
THE PRESIDENT'S TRIP TO THE PEOPLE'S
REPUBLIC OF CHINA
1
The President's Remarks at the Departure Ceremony on the South Lawn at
the White House. February 17, 1972
Mr. Vice President, Mr. Speaker, Members of the Congress, and Mem-
bers of the Cabinet:
I want to express my very deep appreciation to all of you who have
come here to send us off on this historic mission, and I particularly want
to express appreciation to the bipartisan leadership of the House and
Senate who are here.
J
(204)
14A. PRESIDENT NIXON TRAVELS, 8 PRESIDENTIAL DOCUMENTS 443-44,
9 PRESIDENTIAL DOCUMENTS, 482
Their presence and ihc messages that ha\'0 poured in from all over
the country to the Wliite House over the past few days, wislnng us well
on this nip, I think, underline the statement th.at I made on July 15,
last year, when I amiounced the visit.
That statemcjit was, as you will recall, that this would be a journey
for peace. We, of course, are under no illusions ihat 20 years of hostility
between the People's Republic of China and the United States of America
are going to be s\\ ept away b)' one week of talks that wc will have there.
But as Premier Chou En-lai said in a toast that he proposed to
Dr. Kissinger and the members of tJie advance group in October, the
American people arc a great people. The Chinese people are a great
people. The fact that they are separated by a vast ocean and great
differences in philosophy should not prevent them from finding common
ground.
As we look to the future, we must recognize tliat the Government
of the People's Republic of China and the Government of the United
States have had great differences. ^Ve will have differences in the future.
But what we must do is lo find a way to see that we can have differences
without being enemies in \sar. If wc can make progress toward that goal
on this trip, the world will be a much safer world and the chance
particularly for all of those young children over ihere to grow up in a
world of peace will be infinitely greater.
I would simply say in conclasion that if there is a postscript that I
hope might be written with regard to this trip, it would be the words
on the plaque which v^as left on the moon by our first astronauts when
they landed there. "We came in peace for all mankind."
Thank you and good by.
note: Tlie President spoke at 10:10 a.m. on the Soutli Lav.'ii at tlie White House.
Following his remarks, the President, the First Lady, and members of the ofiicial party
Ix)arded the heliropter for the flight to Andrews Air Force Base. The ceremony was
broadcast live on radio and tele\'ision.
The White House had announced earlier, at Key Biscayne, Fla., on February 12,
that the official party would include the follounng:
The President
Mrs. Ndcon
Secretary of State WrLLiAM P. Rogers
Henry A. Kissinger, Assistant to the President for National Security Affairs
H. R. Haldeman, Assistant to the President
Ronald L. Ziixler, Press Secretary to the President
Brig. Gen. Brent Scowcroft, ^iilita^y Assistant to the President
Marshall Green, Assistant Secretary of State for East Asian and Pacific Affairs
Dwight L. Chapin, Deputy Assistsmt to tlie President
John A. Scali, Special Consultant to the President
Patrick J. Buchanan, Special Assistant to the President
Rose Mary Woods, Personal Secretary to the President
Alfred le S. Jenkins, Director for Asian Communist Affairs, Bureau of East Asian
and Pacific Afl'airs, Department of State
John Holdridge, Senior Staff Member, National Security Council
Winston Lord, Special Assistant to Dr. Kissinger
(205)
14A. PRESIDENT NIXON TRAVELS^ 8 PRESIDENTIAL DOCUMENTS 443-44,
9 PRESIDENTIAL DOCUMENTS, 482
WtEKlY COMPILATION OF P«tSIO£KTIAl DOCUMENTS, FEBRUARY 20, 1972
Our communique indicates, as it should, some areas of clifTtrencc. It
also indicates some areas of agreeaient. To mention only one t'/iat is par-
ticularly appropriate here in Shaiigiiai, is tlie fact that this gi cat city, over
the past, has on many occasions been the victim of foreign :;f7gression and
foreign occupation. And we join the Chinese people, we the American
people, in our dedication to this principle: Tliat never again shall for-
eign domination, foreign occupation, be visited upon this city or any part
of China or any independent country in this world.
Mr. Prime Minister, our two peoples toniglit hold tlie future of the
world in our hands. As we think of that future, we arc dedicated to the
principle that we can build a new world, a world of peace, a world of jus-
tice, a world of independence for all nations.
If we succeed in working together where we can find common
ground, if we can find common ground on \vhich we can both stand,
where we can build the bridge between us and build a new world, genera-
tions in the years ahead wiU look back and thank us for this meeting that
we have held in this past week. Let the Chinese people and the great
American people be worthy of the hopes and ideals of the world, for
peace and justice and progress for all.
In that spirit, I ask all of you to join in a toast to the health of Chair-
man Mao, of Prime Minister Chou En-lai, and to all of our Chinese
friends here tonight, and our American friends, and to Uiat friendship
between our two people to which Chairman Chang has referred so
eloquently.
note: The Chairman spoke at 8:25 pjn., local time, in the Shanghai Exhibition Hall.
He spoke in Chinese and the President in English; their tocists were translated by an
interpreter.
As printed above, this item follows the text of the White House press release.
RETURN TO WASHINGTON
Remarks of the President and the Vice President FoUowing the President's
Arrival at Andrews Air Force Base. February 28, 1972
The Vice President. Mr. President, Mrs. Nixon, distinguished guests,
ladies and gentlemen:
For more than a week we have witnessed through the miracle of
satellite television, the sights and sounds of a society that has been closed
to Americans for over two decades. We have been made aware of many
new things in that society through this visit, Mr. President. We have
witnessed much of what you have done with feelings of pride and
pleasure and an immense curiosity that has certainly not been diminished
by the amount of attention paid by the media to this visit
I must confess that we have been surprised to some extent by your
facility with chopsticks, Mr. President, and by the equal facility of the
Chinese orchestra which rendered "America The Beautiful."
But I will say that the week's undertakings were intensively covered —
I think that is the understatement of this week, Mr. President — and \ve
enjoyed every minute of it as wc watched with pride and approval the
way you and the members of your party and our gracious First Lady
conducted yourselves.
(206)
14B. PRESIDENT NUON TRAVELS^ 23 FRESWENTIAL DOCUMENTS^ 912, 975
H^eekiy Compilation of
PRESIDENTIAL DOCUMENTS
Week Ending Saturday, June 3, 1972
THE PRESIDENT'S TRIP TO AUSTRIA, THE SOVIET UNION, lEAN,
AND POLAND
Chronology of Events
Saiuiday, May 20
•J
The President and Mrs. Nixon boarded the Spirit of
'76 at Andrews Air Korre Base for ti^c flight to Salzburg,
Austria. (For the President's reniarlcs at the departure
ceremony, see page 881 of the May 22 issue of the \Veckly
Compilation of Presidential Documents. )
Arriving at Salzburg Airport at 10:30 p.m., they were
-greeted by Chancellor Bruno Kreisky of the Federal Re
public of .'\ustria.
Sunday, May 21
The President and Chancellor Kreisky met for discus-
sion at Schloss Klesheini.
^ , 't-s. Nixon entertained Mrs. Kreisky at tea at Schloss
.icini.
The President and Mrs. Nixon were then guests of the
Chancellor and Mrs. Kreisky at luncheon at the Kobenzl
Hotel (see page914).
Monday, May 22
After departure ceremonies at Salzburg Airport, the
President and Mrs. Nixon flew to Moscow, where they
were greeted at Vnukovo II Airport by President
Podgomy, Premier Kos^gin, Foreign Minister Grom\ko,
and .Ambassador Dobr\nin.
In the afternoon, the President met for more than 2
hours with General Secretary Brezhnev.
In the evening, the President and Mrs. Nixon were
guests of honor at a dinner hosted by the Presidium of the
Supreme Soviet of the U.S.S-R. and the Government of
the U.S.S.R. in Granovit Hall in the Grand Kremlin
Palace (see pages 915, 91 6).
Tuesday. May 23
The President and members of the United States party
met with Sonet officials in plenar\' session in Catherine
Hal! in the Grand Kremlin Palace.
In ceremonies in St. \'ladimir Ha!!, the President and
President Podgomy signed an agreement on environ-
n>^tnl proitciion (sec page 917). Sccretan- Rogers and
- . -t Health .Minister Petro\-sky then signed an agree-
ment on medical science and public health ( see page 919).
The President and General Secretary' Brezhnev met for
2 hours of discussion before the ceremony and for 3 addi-
tional hours later in the evening.
During the day, Mrs. Nixon visited a secondary school,
toured the Moscow Metro, and had lea with Mrs.
Brezhnev, Mrs. Podgorny, and wives of other Soviet ofii-
cials in the Imperial Living Quarters in the Grand
Kremlin Palace.
Wednesday, May 24
In the morning, the President went to the Aleksandrov
Gardens to lay a wreath at the Tomb of the Unknown
Soldier. He returned to the Grand Kremlin Palace for
further discussions with Soviet leaders.
In afternoon ceremonies, the President and Premier
Ko5)'gin signed the space cooperation agreement (see
page 920) and Secretary Rogers and Committee Chair-
man Kirillin signed the science and tecliuology agreement
(see page 921).
The' President then went to Chairman Brezhnev's
country residence for additional discussions.
The First Lady \isited the Moscow State University
and the GUM department store. In the evening, she
attended a performance at the New Circus.
Thursday, May 25
The President met for 2 hours with So\iet leaders and
a maritime agreement on the prexcntion of incidents at
sea was signed by Navy Secretary Warner and Admiral
Gorshkov (see page 922 ) .
Mrs. Nixon visited the Bolshoi School of Choreography
and the All-Union Fashion House for a showing of men's
and women's clothing by Soviet designers.
In the evening, the President and the First Lady
attended a performance of the "Swan Lake" ballet at the
Bolshoi Theater.
Friday, May 26
After discussions on trade matters, a communique was
issued on an agreement between Soviet leaders and Presi-
dent Nixon to establish a U.S.-U.S.S.R. Commercial
Commission (see page 924).
(207)
67,
14B. PRESIDENT NIXON TRAVELS, 23 PRESIDENTIAL DOCUMENTS 912, 975
KBINDING CO.
that end the two sides decided to create a joint Polish-American Trade
Commission.
3. The two sides will encourage and support contacts and coopera-
tion between economic organizations and enterprises of both countries.
4. The two sides expressed their satisfaction with the expanding
program of scientific and technical cooperation and appraised positively
its mutually advantageous results. Last year's exchange of visits at the
cabinet level, which gave attention to the development of scientific and
technical cooperation, confirmed the desirability of continuing coopera-
tion in this field.
The two sides expressed their interest in the conclusion of an inter-
governmental agreement on comprehensive cooperation in science,
technology and culture. Appropriate institutional arrangements will be
established to promote work in these fields.
5. The two sides agreed that the increase of mutual economic and
personal contacts, including tourism, justifies further development of
transportation liiilcs between Poland and the United States by sea as well
as by air. The two sides expect to sign in the near future an air transport
agreement and to establish mutual and regular air connections.
6. The two sides expressed their interest in commemorating the five
hundredth armiversary of the birth of Nicholas Copernicus and discussed
ways of celebrating it.
7. Both sides welcomed the signing of the Consular Convention by
Secretary of State William P. Rogers and Minister of Foreign Affairs
Stefan Olszowski and the conclusion of an agreement on the simultaneous
establishment on December 1, 1972 of new Consulates — in New York
and' .Krakow, respectively. Both parties welcome these steps as concrete
evidence of expanding relations between the two states.
8. The two sides emphasized the positive i.afiuence exerted on their
mutual relations by the traditions of history, sentiment and friendship
between the Polish and American peoples. A prominent part is played
in this respect by many United States citizens of Polish extraction who
maintain an interest in the country of their ancestors. The two sides
recognize that this interest and contacts resulting from it constitute a
valuable contribution to the development of bilateral relations.
Signed in Warsaw, June 1, 1972.
REPORT TO THE CONGRESS
Tlie President's Address to a Joint Session of the Congress at the Conclusion o}
His Trip to Aitstria, the Somet Union, Iran, and Poland. June 1, 1972
Mr. Speaker, Mr. President, Members of the Congress, our distin-
guished guests, my fellow Americans:
Your welcome in this great chamber tonight has a very special mean-
ing to Mrs. NLxon and to me. We feel very fortunate to have traveled
abroad so often representing the United States of America. But we both
agree after each journey that the best part of any trip abroad is coming
home to America again.
During the past 13 days we have flown more than 16,000 miles and
we visited four countries. Everywhere we went — to Austria, the Soviet
)
071 P
6293
(208)
n
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