All the President's Men (6 page)

But there was a fifth check, for $25,000. It was slightly wider than the others, and was dated April 10. Bernstein copied it, as he had the other four, just as if he were drawing a facsimile. It was a cashier’s check, drawn on the First Bank and Trust Co. of Boca Raton, Florida, No. 131138, payable to the order of Kenneth H. Dahlberg. Dardis returned to the room as Bernstein finished copying. The $25,000 had been deposited on April 20, along with the four Mexican checks, making a total deposit of $114,000. Four days later, Barker had withdrawn $25,000. The remaining $89,000 had been withdrawn separately.

“We’re still trying to find out who this Dahlberg guy is,” said Dardis. “You ever hear of him?”

Bernstein said he hadn’t.

Dardis handed Bernstein the Xeroxed phone records and said, “Come back at nine tomorrow and we can talk. I’ve gotta run.”

Thanks, said Bernstein, I really appreciate the help.

Bernstein walked down the hallway, turned the corner and then charged for the elevator. It was seven o’clock. He called Woodward from a pay phone in the lobby, told him about the fifth check and dictated all the numbers and other details. Then he went back to his hotel to look for Kenneth H. Dahlberg.

There was no answer at the bank in Boca Raton. The Boca Raton police department gave him the name and phone number of a bank officer who could be reached in emergencies. The banker had never heard of Dahlberg. The check was signed by an officer of the bank whose first name was Thomas; the last name was illegible. There were two officers at the bank named Thomas, but neither remembered the transaction. Bernstein asked the second for the name and phone number of the bank’s president.

The president knew Dahlberg only slightly as the owner of a winter home in Boca Raton, and as a director of a bank in Fort Lauderdale. That bank’s president was James Collins.

Yes, Collins said, Dahlberg was a director of the bank. As he was describing Dahlberg’s business interests, Collins paused and said, “I don’t know his exact title, but he headed the Midwestern campaign for President Nixon in 1968, that was my understanding.”

Bernstein asked him to please repeat the last statement.

It was nine o’clock when Bernstein called Woodward. Sussman answered the phone. Woodward was talking to Dahlberg, he said. For Chrissakes, Bernstein shouted, tell him Dahlberg was head of Nixon’s Midwest campaign in ‘68.

“I think he knows something about it,” said Sussman. “I’ll call you right back.”

In Washington, Woodward had checked Boca Raton information and found a listing for Dahlberg. The number was disconnected. He, too, had called the police and had been told that Dahlberg’s home was in a neighborhood which had its own gates and private security guardposts. Woodward called the guard on duty there, who would say nothing except that Dahlberg stayed there only in the winter.

Woodward asked a
Post
librarian if there was anything on Dahlberg in the clipping files. There was not. Sussman asked for a check of the picture files. A few moments later, he dropped a faded newspaper picture on Woodward’s desk. It was a photograph of Senator Hubert
H. Humphrey standing next to a small man with a jubilant smile. The man was identified in the caption as Kenneth H. Dahlberg.

Was Dahlberg a Democrat? The picture had no dateline. On a chance, Woodward called information for Minneapolis, the largest city in Humphrey’s home state, and got a number for a Kenneth H. Dahlberg. Not sure it was the right Dahlberg, Woodward dialed. When Dahlberg came on the phone, Woodward said he had tried him at his Florida home first. Was that a winter home?

“Yes,” Dahlberg said.

About the $25,000 check deposited in the bank account of one of the Watergate burglars  . . .

Silence.

The check which, as you know, has your name on it. . . .

Silence.

We’re writing a story about it and if you want to comment  . . .

Dahlberg finally interrupted. “I don’t know what happened to it. I don’t have the vaguest idea about it. . . . I turn all my money over to the committee.”

The Nixon re-election committee?

“Yes.”

Didn’t the FBI ask you how your check ended up in Barker’s bank account?

“I’m a proper citizen, what I do is proper,” Dahlberg responded. His voice was tense. Then he seemed to relax for a moment and asked Woodward’s indulgence. “I’ve just been through a terrible ordeal,” he explained. “My dear friend and neighbor Virginia Piper was kidnaped and held for two days.”
*

Woodward asked again about the check.

Dahlberg acknowledged that it was his, refused to discuss it and hung up. Minutes later, he called back. He said he had been hesitant to answer questions because he was not sure Woodward was really a
Post
reporter. He paused, seeming to invite questions.

Whose money was the $25,000? Woodward asked.

“Contributions I collected in my role as Midwest finance chairman.”

Woodward was quiet. He was afraid he might be sounding too anxious.

“I know I shouldn’t tell you this,” Dahlberg resumed.

Tell me, Woodward thought. Tell me.

“Okay. I’ll tell you. At a meeting in Washington of the [campaign] committee, I turned the check over either to the treasurer of the committee [Hugh W. Sloan, Jr.] or to Maurice Stans himself.”

Woodward couldn’t wait to get off the line. Stans was Nixon’s chief fund-raiser and CRP’s finance chairman.

It was 9:30
P.M
., just an hour from deadline for the second edition. Woodward began typing:

A $25,000 cashier’s check, apparently earmarked for the campaign chest of President Nixon, was deposited in April in the bank account of Bernard L. Barker, one of the five men arrested in the break-in and alleged bugging attempt at Democratic National Committee headquarters here June 17.

The last page of copy was passed to Sussman just at the deadline. Sussman set his pen and pipe down on his desk and turned to Woodward. “We’ve never had a story like this,” he said. “Just never.”

3

Now,
SIX WEEKS
after Mitchell’s initial statement affirming CRP’s dedication to the traditional American electoral process, the committee’s protestations of non-involvement in Watergate were disintegrating. Woodward telephoned Clark MacGregor, Mitchell’s successor as manager of the Nixon campaign, and told him what the
Post
had learned.

“I know nothing about it,” MacGregor said.

“These events took place before I came aboard,” he continued. “Mitchell and Stans would presumably know about this.” He sounded disgusted, less with Woodward, it seemed, than with Mitchell and Stans.

Earlier that evening, George McGovern had announced that his running mate, Senator Thomas F. Eagleton of Missouri, was withdrawing from the Democratic ticket, after his medical history had been made an issue in the campaign.
*
More than ever, Richard Nixon’s re-election seemed assured.

•   •   •

The next morning, Woodward talked again to Dahlberg.

“Obviously, I’m caught in the middle of something. What it is I
don’t know,” Dahlberg said. He was now certain that he had given the $25,000 check to Maurice Stans personally, on April 11.

Stans’ secretary told Woodward that there would be no immediate comment. She said Stans was “agonized over the confusing circumstances” which made it impossible for him to explain what had actually happened and thus reaffirm his own integrity.

At the White House, Ron Ziegler said the President continued to have full confidence in Stans, and referred inquiries about the $25,000 to CRP. The committee’s statement, issued over Clark MacGregor’s name, said that further comment would not be “proper” because the matter was under investigation.

Woodward telephoned Philip S. Hughes, director of the new Federal Elections Division of the General Accounting Office—the federal auditing agency.

Unlike the Justice Department and the FBI, which are part of the Executive Branch and report to the President, the GAO is the investigative arm of Congress and therefore operates independently of the Executive. Hughes said that the story in that day’s
Post
had revealed “for the first time [that] the bugging incident was related to the campaign finance law. . . . There’s nothing in Maury’s [Stans] reports showing anything like that Dahlberg check.”

Hughes, who had worked at the Bureau of the Budget during the Eisenhower administration when Stans was its director, added: “We’re going to conduct a full audit and find out what’s up.” The audit would be the first undertaken under the Federal Campaign Expenditures Act, which had gone into effect on April 7, establishing tighter control of campaign donations and requiring that all expenditures be reported.

A GAO investigator called Woodward that afternoon for additional information on the $25,000 check. Woodward told him that he and Bernstein had written everything they knew about it.

Before writing a follow-up on the GAO audit, Woodward tried to reach Hugh Sloan, the CRP treasurer. But he no longer worked for the re-election committee. A reporter on the city staff drove to Sloan’s home in suburban Virginia: Sloan was young, about 30, polite, and refused to discuss Watergate, except to say that he had cooperated with the FBI and the grand jury.

Van Shumway told Woodward that Sloan had resigned “for personal
reasons” unrelated to Watergate. “He was getting an ulcer and his wife is pregnant.”

•   •   •

Woodward called the GAO investigator every day to learn how the audit was progressing.

“Hundreds of thousands of dollars in unaccounted cash,” the GAO man said one day. “A slush fund of cash,” he said the next. “A rat’s nest behind the surface efficiency of computerized financial reporting,” the third. With each day that Woodward did not write a story, the investigator felt freer to talk to him. Fitting these remarks together with another investigator’s, Woodward was becoming convinced that the cash “slush fund” was the same “convention security money” Bernstein had heard about early in July. The fund, which totaled at least $100,000, included the money from Barker’s bank account obtained from cashing Dahlberg’s check, according to the investigator.

Bernstein made one of his regular calls to the former administration official and was told: “There was a large fund over which Gordon Liddy had supervision. . . . Yeah, it’s the same one. The present plan is for Liddy to take the fall for everyone. The story that the re-election committee will put out has nothing to do with the truth. They’ll say they were deeply concerned for the security of their convention and that they had a big fund to be sure they were secure from interference. That’s the word that will trickle out. Mitchell said to get the story out. Too many guys knew about the fund.”

The reporters waited. Several days later, on August 16, Clark MacGregor met with a select group of White House reporters and made the first public attempt to shift the responsibility to Liddy. While serving as CRP’s finance counsel, MacGregor said, Liddy had spent campaign funds on his own initiative “for the purpose of determining what to do if the crazies made an attack on the President” at the Republican convention.

Later that afternoon on the telephone, MacGregor was angered by Woodward’s attempt to get a fuller explanation. “I have no idea why the departed Gordon Liddy wanted cash,” MacGregor shouted. “It’s impossible for me to tell. . . . I never met Liddy. . . . I don’t know what’s going on.”

Woodward suggested that MacGregor was implying that he was out of touch with the campaign he was supposed to be running.

“If you print that, our relationship is terminated,” MacGregor said, and added: “I’m not threatening you. I’m just telling you what will happen.” MacGregor was one of the few Nixon administration officials who had a reputation for being friendly with the press.

•   •   •

On August 22, the second day of the Republican convention in Miami, the
Post’s
front page reported the preliminary findings of the GAO’s audit. Based primarily on Woodward’s conversations with the investigators, the story said the GAO had determined that CRP had mishandled more than $500,000 in campaign funds—including at least $100,000 maintained in an apparently illegal “security fund.”

Paul E. Barrick, Hugh Sloan’s successor as treasurer, responded on behalf of CRP:
“Washington Post
stories of allegations to the effect that the  . . . committee has incorrectly reported or failed to report contributions and expenditures in accordance with law are entirely wrong.”

The rawest nerve touched by the GAO’s preliminary findings, however, was not that at least half a million dollars had been mishandled but the revelation of a “security fund” at the committee. For more than five weeks, Van Shumway, a former wire-service reporter who had come to the committee from the White House staff, had been insisting that no such fund existed. He had told Bernstein in July, “One thing I will never do is knowingly tell you something that is untrue.” Now Shumway said he had since learned that there was such a fund. “I’m afraid some people here aren’t telling me the truth,” he added.

The GAO’s report was to be released publicly the same day. An hour before it was due to go out, the GAO sent a message to the news media that there would be a delay.

Woodward called the GAO investigator. What had happened?

“You won’t believe it,” the investigator said. “Stans called Hughes and asked him to come down to Miami at the convention to get more material . . . [He] of course had to go. They just didn’t want that report coming out today. I don’t blame them.”

That evening in Miami, Richard Nixon was to be nominated by the
Republican Party for a second term as President of the United States.

Also the same day, August 22, United States District Court Judge Charles R. Richey, who was hearing the Democrats’ $1 million civil suit, reversed his earlier ruling and declared that all pre-trial testimony in the case would be kept sealed and withheld from the public until after completion of the proceedings in the case. This meant that sworn statements by Mitchell, Stans and others would not be made public before the election. What was extraordinary was that Richey had reversed his own decision in the absence of any motion by the CRP lawyers. He had, he said from the bench, acted out of concern for the constitutional rights of those under investigation.