The metaphor of Bebe Rebozo as a "bagman," as used in The Breaking of a President 1974—The Nixon Connection (see below and in our previous post), helps us to see this Nixon confidante as a cutout set up to courier money to the front man in power from the 1968 election until his disgraceful removal from office in 1974. The only question is, "Who supplied that money?"
The answer that emerges from my research indicates, to me at least, that Bebe was working for America's central banking empire—the Federal Reserve System—through the banking establishments which control the system. Exploring Bebe's personal relationships helps elucidate how he first came to be in that role. More detailed research on Rebozo's life will appear in a subsequent post.
Part 2 of excerpt from
The Breaking of a President 1974 - The Nixon Connection
Marvin Miller, Compiler (Therapy Productions, Inc.©1975); LCCCN
BEBE THE BAGMAN (Continued)
[Former FBI agent Richard] Danner has testified under oath that it was he rather than [George] Smathers who introduced Nixon to Rebozo; he estimated the date as "about 1950"; but in his interview with Gerth in September 1972, before the Watergate avalanche got really going, he was quite definite that it was in 1948. It seems as through there is a conspiracy, or at least some sort of tacit agreement between those concerned, to cover up and bury any activities of the future President in Florida in the 1940's. An educated guess is that it has to do with Nixon's links, as a young Congressman, with big‑time organized crime and gambling, which were notoriously entrenched in the Miami area at that time. Certainly Nixon's friends Danner and Wofford were deeply involved in this picture, and he must have known it. As for Rebozo, these men were his friends also. It may be noted that in 1968, when the Bebe was building his big shopping center in Miami's Cuban community, out of scores of construction firms available, he picked the one operated by "Big Al" Polizzi, a former Cleveland mobster. One way or another, it seems that the ambitious Senator‑and‑President‑to‑be was hobnobbing with some very dubious people indeed, and today Nixon prefers to cloud over that period in his life, for fear he will be tarred with the same brush.
At any rate, Nixon did meet Bebe Rebozo in those days, and their peculiar friendship blossomed. One explanation by one of Nixon's aides is that both men were "the same methodical, hard‑working type"—their personalities appealed to each other, and they had many tastes in common. They both liked boating, golf and football. By the time Senator Nixon was elected Vice‑President in 1952, the oddly assorted pair were fast friends, and Nixon was a frequent visitor to the free‑wheeling Gold Coast with its yachting, partying set; a strange milieu for a Quaker boy from Whittier, California. On those visits he stayed at Bebe's house, sometimes bringing his family along, and they went cruising on Bebe's boat.
While Nixon's political star was rising, Bebe Rebozo's fortunes were going up too. He was constantly expanding his real estate and financial dealings, and his Midas touch persisted. Was it a coincidence that he was a close crony of Nixon and other influential politicians? One Key Biscayne businessman recently told a Newsweek reporter with blunt candor: "Rebozo is a fumbling tire salesman. He's not really that good at business. He would never have made it without political clout." And political clout the ingratiating Cuban-American certainly had. He had hitched his wagon to the right star, put his money on the right horse.
The friendship was cemented during the years of Nixon's vice‑presidency from 1953 through 1960, when Nixon made numerous visits to Florida, and Bebe to Washington. It was during that period, of which not too many details are known, that the Bebe became Nixon's "shadow," his closest confidant. Their association was not spotlighted at that time; no one much cared who the Vice‑President's friends might be.
Bebe Rebozo was the only "outsider" sticking closely to the Nixon family on election night in 1960, when Nixon lost the presidential race to John F. Kennedy. When Nixon ran for Governor of California in 1962, the Bebe actually moved from Florida to California—"at some financial sacrifice," according to friends—to help Dick unofficially in his campaign, which was marked by a phony Red smear and other "dirty tricks" on Nixon's part. Rebozo was standing at Nixon's side when he glumly told newsmen, after his resounding defeat by Governor Edmund G. Brown, that he was retiring from politics: "You won't have Nixon to kick around any more!"
It seemed that Nixon had lost his own political clout—or had he? Bebe remained his close friend when the Nixons moved to New York City and Dick went into a lucrative law practice. There is reason to believe that he very soon reconsidered his decision to quit politics, and used his law practice to solidify his connections with big business and high finance, with his eye still on the Big Chance. In 1964 Nixon hit the campaign trail for Barry Goldwater, and was back once more in the public eye.
In 1965 Bebe Rebozo was with Dick and Pat when they celebrated their silver wedding anniversary in Mexico; in 1966 he went around the world with the future President; in 1967 Nixon and Rebozo traveled to South America together. When Nixon definitely decided to make a second try for the presidency in 1968, Rebozo originally was against the idea, according to mutual friends. Says one: "Bebe was afraid of the impact another major defeat would have on his friend." But as it turned out, Bebe's faithfulness paid off, and the rest is history. Incidentally, it was not until late 1968 that the cautious Bebe changed his registration from Democrat to Republican.
During those same 1960's, while he was following Nixon around, Rebozo was steadily building up his own fortune in Florida, to his present worth of approximately $3 million. He founded his own bank, the Key Biscayne Bank, of which he has been president and chairman since 1964. The one‑story modern bank building is complete with American flags, pictures of Richard Nixon and even a smiling bust of the President. The Rebozo bank enjoys a monopoly position on wealthy Key Biscayne; repeated attempts by rival financial groups to open another bank have been turned down by the Comptroller of the Currency, despite favorable recommendations by a federal field examiner.
Another instance of the Bebe's good luck in dealing with the federal government was the favored treatment he received from the Small Business Administration in the early 1960's. According to several Miami businessmen, it was the intercession of Senator Smathers and the Bebe's well‑known friendship with Nixon, that enabled him to use SBA money to help him acquire the prosperous Monroe Abstract and Title Co. of Key West, and to finance a shopping center and a string of laundromats in Miami.
Rebozo's Midas touch is largely responsible for the building of Nixon's personal fortune. In a financial statement before the 1968 election, Nixon placed his gross assets at $800,000 and his liabilities at $300,000. He said $400,000 of his assets stemmed from Florida real estate investments. Among other deals, in 1962 Nixon on Rebozo's advice had bought 185,891 shares of stock in the Fisher's Island resort community being developed by Rebozo off the tip of Miami Beach. He paid one dollar per share. Development plans were stalled, and after the 1968 election, to avoid conflict of interest with federal projects in the area, Nixon sold his stock back to Rebozo's holding company at two dollars a share, for a neat profit of $175,000.
In 1967, at Bebe's urging, Nixon was persuaded to pose for a publicity picture for a subdivision being developed by Don Berg on Key Biscayne. In return for this favor, which paid off handsomely by placing Key Biscayne in the national limelight, Berg sold Nixon two choice lots for a bargain price of $53,100. Five years later Nixon sold the lots to William E. Griffin, an attorney for the President's other millionaire chum, Robert H. Abplanalp the Aerosol magnate, for $150,000. This was the devious deal spotlighted in the Congressional investigation of Nixon's personal finances: Nixon's daughter Tricia. had loaned her father $20,000 of the purchase price; when the loan was repaid and she was given part of the profit, her share was transferred to Bebe Rebozo's account as a loan to him.
It was Bebe the Magnificent who shortly after Nixon was elected to the presidency, put together almost single‑handedly the Southern White House retreat on Key Biscayne's opulent Bay Lane, where Rebozo has lived for years [490 Bay Lane]. The deal involved a five‑house compound. Rebozo first arranged for Nixon to buy Senator Smathers' house, next‑door to his own, plus another house. Robert Abplanalp bought another house and leased it back to the Secret Service at a handsome figure for Nixon's two terms. Then a complex deal was worked out whereby a stockholder in Rebozo's bank bought the fifth and last house, and leased it back to the White House as a communications center.
Columnist Jack Anderson revealed only last May that back in 1969, while Bebe Rebozo was already collecting secret cash contributions for Nixon's 1972 re‑election campaign, he was also paying some of the President's bills. Anderson reported that he had traced to Rebozo's personal account an $11,978 check, which went to pay for electrical, air‑conditioning, and painting work on Nixon's home in Bay Lane. He said he was also informed that Rebozo paid for a swimming pool, a pool table, and architectural services for the President. The check for $11,978, signed by Rebozo, was dated August 6, 1969. On August 7th another check for $11,307, this time a cashier's check drawn on Rebozo's bank and bearing Nixon's name as remitter although he was not in Florida at the time, was delivered to the same construction company; and on October 9th the company received payment for a $6299 bill it ad submitted to Rebozo for air‑conditioning work on another of Nixon's Key Biscayne houses. Columnist Anderson noted that these payments were made just about the time the first $50,000 of the mysterious Howard Hughes $100,000 contribution was reported to have been delivered to Rebozo by Richard Danner, ostensibly to be used for campaign purposes. As one Senate investigator recently complained: "Rebozo's affairs are so commingled with Nixon's, that we cannot separate them."
Bebe Rebozo was also directly involved in the planning and purchase of Nixon's Western White House at San Clemente, California. In 1969, when it seemed Nixon might have difficulty in meeting the mortgage payments on the $1.5 million, 29‑acre estate, Rebozo and Abplanalp formed an investment company and bought all but 5.9 of the seaside acreage for $1,249,000. Rebozo also bought a home for Julie Nixon Eisenhower and her husband David in Bethesda, Maryland.
This brings us into the 1970's, when Bebe Rebozo's friendship with Nixon first began to be publicized and spotlighted by the media, to the acute discomfort of the publicity‑shy Cuban‑American banker. Speculation arose as to the self‑effacing Bebe's exact role in the President's life, both official and personal. U.S. News & World Report posed the question: "Is he a policy‑shaping adviser reminiscent of Colonel House of the Woodrow Wilson era? Or is he just a non‑political friend to a man who—outwardly at least—has few close friendships?"
Reporters dug into the association of the two men; mutual friends were interviewed; the question was not fully answered, but the best information seemed to be that Rebozo was simply a close friend who refrained from dabbling in politics—though no one denied that he was Nixon's personal financial adviser. The President enjoyed relaxing in Bebe's company. It was duly noted that Bebe had profited in a business way by being known as the President's pal, just as Nixon's personal fortunes had prospered on Bebe's shrewd advice. One hand washed the other. This was before Watergate, before the revelation of Bebe's role as a bagman for secret political funds, and of the pair's joint connection with organized crime figures.
A feature story in Life magazine in 1970 [Colin Leinster's byline] pointed up Rebozo's touchiness about anyone trying to capitalize on his relationship to Nixon. Shortly after the 1968 election, Life reported, Rebozo took a telephone call at the yacht club, and came back to the table fuming. "Son of a bitch!" he said. "That was a guy I haven't seen since high school. Now he wants me to help him out in a deal by putting in a good word with the President!" And one White House aide said not long ago: "Bebe would endure having his nails pulled out one by one, rather than reveal anything but commonplaces about the President."
Rebozo himself said solemnly, in a rare interview with U.S. News in 1971: "Naturally, the justification for my high regard for the President should be apparent to everyone by now. It is my feeling that, if he were given credit for just a fraction of his accomplishments, he would already be heralded as one of the all‑time great Presidents. I am sure history will recognize him accordingly." And a Nixon associate commented: "Mr. Rebozo's main role is to take some of the pressure off the President. Bebe is the kind of friend all of us want and need—a person who likes us for ourselves, and is not with us to use us."
Pat Nixon told interviewers that "the President is comfortable with Beeb." Close friends said she had a sister‑like affection for the ingratiating banker, and the two Nixon daughters looked upon him as a favorite uncle. The President himself described Rebozo as "a great guy."
All this publicity was good for Nixon's image as a family man, a good fellow devoted to his friends. But Bebe Rebozo didn't like it; he dodged interviewers on general principles; the media then were publicizing good things about him and the President; but the day might come when they would stumble onto something bad, so it was best to discourage their prying into the Nixon‑Rebozo relationship. In standing by this attitude of shunning the limelight and keeping himself in the background, which some reporters called "the Howard Hughes syndrome," the Bebe was displaying prophetic vision. It wouldn't be long before their beautiful relationship would be tarnished by the Watergate disclosures.
Bad Publicity
Bebe Rebozo received his first bad publicity in September of 1970, when the New York Times and the Washington Post belatedly got onto the story of a lawsuit based on shady dealings that linked Rebozo and his fat little bank directly with organized crime, even with—that ugly word—the Mafia.
It had long been whispered in financial circles that there was something peculiar about the operations of the Key Biscayne Bank, with its limited assets and its policy of discouraging loans to ordinary customers. The bank, in which the President has his personal accounts, ranks at the bottom of the list of Florida banks in percentage of deposits loaned out to customers; yet the bank had lent large sums of money and handled accounts for officials of the syndicate-linked company that owns the Paradise Island Casino in the Bahamas. And now it was revealed that the Rebozo bank had loaned $195,000 to an Atlanta businessman —on the security of 900 shares of IBM stock which it developed had been stolen by Mafia hoodlums. [Miami News in January 1974 disclosed that Seymour Alter borrowed money from Key Biscayne Bank, then set up a gift shop through which he apparently laundered money before selling the shop to a company controlled by Robert Vesco.]
According to sworn testimony by Rebozo, the Atlanta man, one Charles L. Lewis, who apparently had no ties in the Miami area, applied for the loan in July of 1968, offering the IBM stock as collateral. Bebe said he "checked" on the stock and on Mr. Lewis—including, interestingly enough, making a phone call to the President's brother F. Donald Nixon in Newport Beach, California. Apparently the light was green, and the mysterious Mr. Lewis got his $195,000.
Some time later it was discovered that the stock had been stolen from E.F. Hutton & Company of New York by Mafia agents, allegedly for the express purpose of using it as collateral for the Florida loan. But Bebe couldn't return the stolen stock; it seems he had become suspicious of the loan at some point, and called it in. He said Lewis had told him to sell the stock—which had increased in value—to cover the loan and Bebe did so.
Meantime, before the whole story was known, Fidelity & Casualty Company of New York had covered Hutton for its loss of the stock, and in May of 1970 the insurance company sued Rebozo and his bank for $248,000 to reimburse the loss. The suit, filed in U.S. district Court in Miami, was not reported in the Florida or national press—at that time; perhaps its significance was not realized under all the legal verbiage, or perhaps there was a deliberate cover‑up to spare embarrassment to the President's chum. Rebozo asked dismissal on the grounds that he had not known the stock was stolen at the time he sold it. Dismissal was denied, and a pre‑trial conference was set for October.
When the story finally broke that September, Washington Post reporter Ron Kessler stated in an exclusive story that Rebozo had sold the stock after an insurance investigator had informed him that it was stolen. The investigator had testified to this under oath in a pre‑trial deposition, and he had written a report to the company on his interview with Bebe in which he stated: "This would appear to me to be a shady deal, and I suspect that Mr. Rebozo was aware of this and did not want to become involved." Rebozo continued to deny that he had known the stock was stolen before he sold it; he specifically denied the insurance investigator's testimony.
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| Lansky's laundry? |
That was the end of the murky case of the stolen IBM stock—or not quite the end. Rebozo, in righteous indignation over the besmirching of his name and that of his opulent little bank, filed a $10 million libel suit against the Washington Post. The suit is still pending in Miami Federal Court; a Post motion to transfer it to Washington was denied, and the suit has dragged on. [Note: Sarasota Herald-Tribune reprinted a Newsday story
in October 1971 about the events and mentioning the lawsuit in which E.F. Hutton's insurance company sued the Key Biscayne Bank. According to one of two appeals cases, Bebe was called by the insurance company as an adverse witness, (para 13).] In retrospect, it certainly seems there was a deliberate cover‑up and playing down of the still unresolved case, and the fact remains that Rebozo's name, and that of the President's brother, were directly linked with syndicate crime.
The picture was different in late October of 1973, when the mysterious Howard Hughes "campaign' contribution was revealed, and Bebe Rebozo was plumped right into the middle of the Watergate mess, in the role of Nixon's secret bagman for questionable funds. This time no cover‑up was possible; the self‑effacing Key Biscayne banker suddenly found himself in the full glare of the national limelight.
The disclosure came as the Senate Watergate Committee was winding up its investigation of dirty political tricks and focusing its attention on Republican campaign financing. Senate investigators, following up persistent rumors that Howard Hughes was somehow involved in Watergate, finally made the connection: the eccentric billionaire had secretly sent $100,000 to Bebe Rebozo—at a time when Hughes was trying to iron out some anti‑trust problems with the Justice Department, involving his multi‑million‑dollar Las Vegas hotel and casino properties.
Committee investigators inverviewed the flustered Rebozo for five hours, and further pieced the still somewhat obscure and contradictory story together from other sources. Rebozo told them the "campaign gift" was suggested by Richard Danner, who at that time was managing director of the Hughes‑owned Frontier Hotel, and delivered to him in two equal installments of cash, one in late 1969 and another in mid‑1970. According to Rebozo, Hughes intended the money to be used in Nixon's 1972 re‑election campaign. Danner confirmed the $100,000 gift, telling investigators he had delivered $50,000 in $100 bills to Bebe at San Clemente late in 1969, and another $50,000 to him at Rebozo's home in Key Biscayne in July of 1970. Danner said the money was a run‑of‑the‑mill political contribution, earmarked for the 1970 off‑year Republican Congressional campaigns; in this he contradicted Rebozo's statement that it was meant for the still‑distant 1972 campaign. And the bizarre fact was that Rebozo claimed the $100,000 had never been used; he said he had kept it in its original packages of $100 bills, in a safe‑deposit box in his bank—and returned it in the spring of 1973. According to Rebozo, the money was returned to the Hughes organization by a roundabout route: he said he gave it to William Griffin, the attorney for Robert Abplanalp, Nixon's other millionaire friend. The reason for this was not made clear. Rebozo said he decided to return the money, after hearing that Robert Maheu, the deposed head of Hughes' Nevada gambling empire, had mentioned the $100,000 contribution in a deposition connected with Maheu's $17.5 million defamation of character lawsuit against Hughes in Los Angeles.
Maheu reportedly said in his deposition that the money actually was intended to influence two pending federal cases involving the Hughes interests. Two such cases were decided in favor of Hughes, during the time in question:
- the Civil Aeronautics Board okayed the Hughes purchase of Air West, and
- the Justice Department cancelled an anti‑trust action seeking to prevent Hughes from acquiring additional gambling casinos in Las Vegas.
- the fact that at the exact time the second installment was delivered in July 1970, Rebozo and Abplanalp were concluding a phase of their deal to buy Nixon's San Clemente estate to ease his mortgage problems—a phase involving the purchase of 2.9 acres for exactly $100,000.
Following these disclosures, President Nixon at his press conference on October 27, 1973, declared that he felt Bebe Rebozo had shown "very good judgment" in holding the $100,000 Hughes contribution for three years, and finally returning it when it seemed that it might become embarrassing. Calling Rebozo a "totally honest man," the President said he trusted him implicitly. Nixon told reporters that he himself had not heard about the Hughes gift until early in 1973. Although it "might sound incredible to many people," Nixon said, he had a firm policy during campaigns, of not wanting to know about financial gifts till after the election.
Bebe Rebozo's efforts at self‑effacement and dodging publicity no longer availed anything; he was now under the full spotlight of investigation by the press as well as by official probers. Senate investigators, subpoenaed the $100 bills and some of Bebe's financial records. In the wake of revelation of his handling of the Hughes gift, new details were unearthed about the operation of Rebozo's bank. In January 1974, Denny Walsh of the New York Times reported that Seymour Alter, who had hosted Nixon in 1962 on the first of the President's many visits to the Bahamas, was under investigation on suspicion of "skimming" funds from the Paradise Island Casino through the Key Biscayne Bank.
In February 1974, testifying in a deposition in a lawsuit by Common Cause against the Nixon re‑election committee, Rebozo swore that the only person he had told about the $100,000 during the time he was holding it was the President's secretary, Rose Mary Woods. In March Rebozo was interrogated for two long days by the Senate Committee. It had been reported that Rose Mary Woods, while confirming that Bebe had mentioned a secret contribution he was holding, did not tell her the money was from Hughes nor that it totaled $100,000. Bebe insisted that he had told her all about the $100,000, and advised her to instruct his lawyer that in the event of his death, the money should be turned over to the re‑election committee. "I don't think there is any discrepancy," Bebe told the Senate Committee, but when you are asked to relate details of matters that occurred years ago, there are bound to be discrepancies."
The possible extent of the "discrepancies" was revealed a month later, in April, when Herbert Kalmbach, the President's former personal attorney and principal campaign fund raiser, while awaiting a prison sentence for violation of federal election laws, dropped a bombshell in secret testimony to Senator Sam Ervin and a few staff members. Kalmbach said Rebozo had told him that he had handed out some of the Hughes money to Miss Woods, and some to Nixon's brothers, F. Donald and Edward, "and others." Kalmbach had been called for questioning after Terry Lenzner, a young Watergate Committee counsel, had been tipped that Rebozo had talked with Kalmbach about the Hughes money shortly before it was returned. Kalmbach told Senator Ervin that he had met secretly with the Bebe at the Madison Hotel on April 30, 1973—an appointment set up under Rebozo's code name "Mr. Gregory"—after Nixon had told Rebozo to seek the attorney's advice. According to Kalmbach's sworn testimony, Bebe told him the IRS was pressing him to prove that the $100,000 was not undeclared income, and he was in a sticky position, having disbursed some of it to the President's secretary and brothers, and then sworn that he had kept it intact. Kalmbach quoted the worried Bebe as telling him: "This touches the President and the President's family, and I just can't do anything to add to his problems. . . "
Kalmbach went on to say that after advising him to return what was left of the fund, and tell the IRS the full story, he had asked and received Bebe's permission to consult another lawyer, a tax expert, and had done so and received an opinion on the hypothetical question he presented without naming Rebozo. But the very next day—after that eventful night of April 30th on which Nixon announced the resignations of John Ehrlichman and Bob Haldeman and the firing of John Dean—Kalmbach said, he saw Rebozo at the White House; the Bebe seemed more relaxed and told him cryptically that there was no longer any problem. He next met the Bebe nine months later at San Clemente, Kalmbach said, and Rebozo told him his memory must have tricked him in their earlier conversation. "Since we last talked," Bebe told Kalmbach, "I opened the safe‑deposit box and found the wrappers around the bills, and I realized that I couldn't have given any of that money out." (The $100,000 by this time had been turned over to the Senate Committee by Chester Davis, a Hughes counsel. Investigators were checking the serial numbers of the $100 bills to determine if any had been issued after the dates in question. It was reported that the original wrappers had been replaced with rubber bands—and also that an extra $100 bill had mysteriously been added—making it $100,100).
Bebe Rebozo through his attorney admitted meeting Kalmbach at the White House to talk about the $100,000, but he categorically denied having said anything about giving part of it to anyone. Miss Woods and Nixon's brothers likewise denied they had received any such money from Rebozo.
Investigators, concentrating on "who put the money back," now focused on a series of meetings in the middle of May 1973, culminating in one at Camp David between Rebozo, Danner, and Nixon himself. Sources close to the investigation said Rebozo tried to persuade Danner to replace the "missing" part of the $100,000 with a further contribution. Another theory, according to Newsweek reporters, was that the "replacement" money might have come from Robert Abplanalp. Investigators learned of a meeting in June at an up‑state New York fishing retreat, between Rebozo, Abplanalp and his lawyer Griffin. The following week, Griffin returned the supposedly intact $100,000 cash to Chester Davis, the Hughes attorney in New York. One investigator said the Committee had no adequate explanation why Griffin, to whom Rebozo had returned the $100,000, should have been connected with the matter at all—unless Abplanalp himself were involved.
Bebe Rebozo, the Florida yachtsman, was now in deep waters, and he knew it. If Herbert Kalmbach's story should be proven true, or if the Senators decided to accept his word against Rebozo's the Bebe could face possible criminal charges and a prison sentence--in which he would of course not be alone among those involved in the Watergate Scandal. Rebozo, who appeared before the Senate Committee in his seventh closed‑door session of testimony on May 10th, adopted strike‑back tactics similar to those of Dick Nixon. He filed suit in federal court alleging that the committee had obtained "false information" from Kalmbach and released it "maliciously" to the press. He charged the committee with harassment, and asked that its subpoena for his financial records be declared void. The subpoena asked him to produce any records dealing with unsecured loans to or from Richard Nixon, Tricia, Nixon Cox, and the President's two brothers, specifically between January 1, 1969, and March 31, 1974. Also sought were records of bills paid by Rebozo on behalf of the President, his brothers, or Rose Mary Woods. In fighting the subpoenas, Rebozo's attorney, William Frates, said: "He was trying to protect the President from Donald Nixon. That's tough to say, but that's the truth. To say that he (Rebozo) would take money from Howard Hughes and give it to Donald Nixon is incredible!"
While the House Judiciary Committee was proceeding with its impeachment hearings, the Senate Watergate Committee pushed ahead with its investigation. The IRS agreed to let the committee staff inspect the income tax returns of Bebe Rebozo and Donald Nixon. Subpoenas were issued for the President's two brothers. And a new "bagman" operation involving the Bebe was revealed, when the Senate Committee disclosed that A.D. Davis, vice‑president of the Winn‑Dixie food chain, had given Rebozo a secret contribution of $50,000 before the 1972 presidential campaign. A committee source said Rebozo had in his possession a letter from former Commerce Secretary Maurice H. Stans, Nixon's re‑election fund raiser, acknowledging receipt of the $50,000. This contradicted a story in the Washington Post, quoting "informed sources" as saying that the money had never reached the re‑election committee. Rebozo told investigators he had handed the $50,000 cash in an envelope to Frederick C. LaRue, one of the campaign officials who has pleaded guilty to obstructing justice.
Press reports in mid‑May quoted Senate investigators as saying they believed the $100,000 contribution by Howard Hughes supplied the "missing motive" for the Watergate break‑in itself, and thus stood at the very heart of the whole mess. According to these sources, Nixon's re‑election committee feared it would be disclosed that the then Attorney General John Mitchell had "tampered" with an anti‑trust case involving the Dunes Hotel in Las Vegas. The GOP campaign officials, it was reported, were afraid that Lawrence M. O'Brien, the Democratic National Chairman, knew about this matter, because he had formerly been a public relations consultant to the Hughes organization—hence they broke into Watergate to tap O'Brien's phone and search his files.
It was disclosed that Richard Danner had met several times with Mitchell in early 1970, to discuss anti‑trust aspects of Hughes' proposed acquisition of the Dunes. These meetings were before the second installment of $50,000 was paid. (By this time there was some confusion as to the date of the first installment payment—some witnesses said it was in early 1970 rather than mid‑69). Assistant Attorney General Richard McLaren, head of the Anti‑trust Division, had already informed Mitchell that the proposed Hughes deal would violate the Justice Department's guidelines concerning mergers. However, soon after the Danner‑Mitchell meetings—which were recorded in Mitchell's office log but not in the Department's files—Hughes received "a high‑level go‑ahead." Ironically, Hughes never did buy the Dunes.
On June 7th, Bebe Rebozo was still further implicated in Watergate, in secret testimony "leaked" by the Senate investigators. Lawrence M. Higby, formerly one of Bob Haldeman's chief assistants in the White House, testified that President Nixon told Haldeman on or about April 30, 1973, the day Haldeman resigned, that a secret fund would be made available for Haldeman's defense in the Watergate case. According to Higby, the President told Haldeman the money was being kept by Bebe Rebozo, and that as much as $400,000 was available. Gerald L. Warren, the deputy White House press secretary, refused to confirm or deny this latest revelation, merely taking occasion to condemn the Senate Committee for its "leaks" to the press.
In an amended complaint to their suit in federal court seeking to stop the committee from probing Rebozo's affairs, the Bebe's attorneys charged that the committee's special investigators were using "calculated deceits" to induce committee members to keep on investigating the embattled Florida banker. They also charged that Herbert Kalmbach bad given "false testimony" and violated the attorney‑client privilege when he testified about his conversations with Rebozo.
On June 17th, Herbert Kalmbach was sentenced to six to 18 months in jail and fined $10,000 for his election law violations.
On June 18th, with the House impeachment committee hearings in full blast, the Senate Watergate Committee announced it had decided to complete its report without reaching any conclusions about President Nixon's role in the scandal. "Time has passed us by," Vice‑Chairman Howard H. Baker Jr. (R‑Tenn.) said, referring to the House Judiciary Committee's impeachment proceedings. "There will be no separate section on presidential involvement, in our report."
The committee also voted to wind up its work without further investigation of the activities of Bebe Rebozo or the President's two brothers. The committee rejected a motion that subpoenas for Rebozo and the Nixons should be quashed—but at the same time Chairman Sam Ervin said the panel had no intention of citing them for contempt of Congress for refusing to testify further.
It was revealed in June that Rebozo had sold his Key West‑based Monroe Land and Title Company for an undisclosed amount, to the First Federal Savings and Loan Association of the Florida Keys. A spokesman for the purchaser said the negotiations had begun in August 1973. At the same time it appeared that Rebozo's banking monopoly on Key Biscayne might be breaking up. It was reported that Rebozo had been talking merger with the Southeast Banking Corp. and other financial institutions.
On June 22nd, the Senate Watergate Committee staff investigators, in a 47‑page report to the Senators, stated that the second $50,000 contribution from Hughes was set in motion after John Mitchell secretly approved the $35 million Hughes bid to buy the Dunes Hotel. The investigators called the Attorney General's action "a classic case of governmental decision‑making for friends."
It was duly noted that the money was delivered to Rebozo by Danner, the same Hughes agent who had dealt with Mitchell about the Dunes purchase. "As the evidence indicates, the apparent decision by Mitchell to approve the Dunes purchase is clothed with the appearance of impropriety," the report said. Investigation continued as to whether the $100,000 Hughes donation was actually a political contribution, or was for Nixon's personal use, in the pattern of the classic "slush fund."
On June 25th, Bebe Rebozo turned up in Brussels, Belgium, where the President, on his way to the summit conference at Moscow, was attending a meeting of NATO allies. He bad arrived secretly but was spotted by reporters. The President's press secretary said the Bebe had been in Brussels for about a week, on a combined business and vacation trip, and had dropped by briefly to visit Nixon at the U.S. Embassy. Rebozo refused to talk to newsmen.
Testifying in his $17.5 defamation suit against the Hughes‑owned Summa Corporation in Los Angeles, Robert Maheu, deposed chief of the Hughes Nevada operations. supplied further details of the maneuvers leading to the $100,000 campaign gift in Rebozo's care. Maheu testified that the $100,000 was originally pledged for Nixon's 1968 campaign, but the "first attempt" to deliver the initial $50,000 was not made until a month after the election, and the money did not get to Rebozo until mid‑1969.
"Why did it take so long?" asked U.S. District Judge Harry Pregerson. "The injection of third persons," Maheu replied. He explained that the contribution originally was solicited by Richard Danner, who in 1968 was a Nixon campaign fund‑raiser assigned to the Miami area. He testified that Danner and Rebozo consulted with another ex‑FBI agent, Washington attorney Edward P. Morgan, on how the delivery should be made. Morgan, according to Maheu, insisted that a receipt must be obtained, to insure that Nixon knew the money came from Hughes. When he was told that a receipt could not be furnished, Morgan refused to act as intermediary, Maheu said. Later the names of Donald Nixon and John H. Meier, at that time a Hughes aide, were discussed as intermediaries, but dropped; finally Danner gave the money in cash to Rebozo himself.
Editor's Notes about Edward P. Morgan:
Edward Pierpont Morgan was born in Missouri in 1913. His father, who had apparently changed his own name from John Cleveland Morgan to John Pierpont Morgan, was a high school teacher and principal. Edward went to college in northwest Missouri, then to law school at Georgetown University in Washington, D.C. during 1936-39. Upon graduation he joined the FBI in 1940 and though he had excellent reviews and was advancing quickly, resigned abruptly in 1947. Only a year after entering the FBI, Morgan received a censure, along with a number of other agents who had been subpoenaed to Miami to work with SAC Sackett's office. These men all decided to stay at the same place, the Helen Mar Villas on Miami Beach. A memorandum addressed to Director Hoover concerning nine agents, including Gilbert H. Meyer, A. Dickstein, W. C. Fuller, R. A. Lapachet, Daniel L. O'Connor, and Edward P. Morgan was dated July 25, 1941. During July 1941 Miami Beach police were called on two separate occasions by nearby residents who complained about excessive noise at parties being given by the agents.
Strangely enough, two stories appeared in the news during this time. The first was on July 7, 1941 under the headline: "La Paloma Club Stock Traced to Fred Pine." (Pine had been a Miami attorney working with Al Capone during the gangster's attempt to live on Palm Island, Florida in 1929-30, but by 1942 was engaged in private practice at 117 NE 1st Avenue (two blocks from the FBI offices) and living in Coconut Grove at 2667 S. Bayshore.) The trial had resumed on July 6 after a four-day holiday. It was during that time the first loud party had occurred. It looks as if these agents had been subpoenaed to testify at this trial about statements made to FBI agents in March 26, 1940 by Al Youst at the time of his arrest.
The second article appeared on July 16, 1941 regarding the son of the Russian-born owner of the Helen Mar Villas, John Marsa, and an embarrassing dispute with his draft board in which both the FBI and the Miami police became involved. Could the Marsa family, who lived on the premises at 4101 Collins Avenue, have been responsible for calling police about the noise? Is there any chance Samuel Marsa's arrest for not appearing for induction was an act of retaliation?
Although Edward Pierpont Morgan did receive a censure from the Bureau, he was the newest agent present at the scene and did not receive a cut in pay. Instead, he was made the SAC of the Kansas City office in 1943 and later sent to the Washington, D.C. office where he was promoted to Inspector and worked somewhat closely with both Hoover and Tolson. In fact, he was told he would be groomed to be SAC for San Francisco, a plum he refused, much to the chagrin of Hoover. Within six months, however, he indicated to the Director that he had changed his mind and would consider such a move. Pleased with this news, Director Hoover okayed Morgan to serve as associate counsel of the Joint Congressional Committee which investigated the Pearl Harbor Attack. Almost as soon as its report was issued, Morgan was told to report to San Francisco as the Special Agent in Charge, at which point he again refused, saying he would enter private practice.
Morgan left the Bureau to enter private practice in Washington, D.C. for Welch, Mott and Morgan, a law firm handling radio and television licenses and related communications matters. He also was chief counsel to the Senate's subcommittee on foreign relations. In 1951 Morgan became acting chief of enforcement of the Office of Price Stabilization under President Truman.
Another Missouri native was Morris A. Shenker, reputed attorney for Pendergast criminal interests, who later acquired the Dunes hotel and casino in Las Vegas. Perhaps President Roosevelt believed it was safe to bring in Harry Truman, who had been elected by the Pendergast machine to the Senate in 1934, since FDR had watched his federal judiciary prosecute the machine for election fraud after 1936.
into Morris graduated from Washington University Law School in St. Louis in 1932 and married Lillian Koplar, a 1939 law school graduate. [See Candace O'Connor, Meet Me in the Lobby: The Story of Harold Koplar and the Chase Park Plaza.] During the time they were students, one of the lecturers was Thomas Carey Hennings, Jr., a future U.S. Senator and, for a time, the father-in-law of John Dean, Richard Nixon's future general counsel. As a congressman in 1940, Hennings' address was St. Louis' Park Plaza Hotel, 220 N, Kingshighway, where his attorney father had a rented suite. The hotel was the flagship of the Koplar real estate empire.
Mrs. Shenker's father, Samuel Koplar, son of Jewish immigrants from Minsk, had been born in St. Louis and got into building construction in the 1920s, building the Westmoreland high-rise and other projects, before beginning his most well-known project, the Chase Park Plaza Hotel in 1929, with help from her brother, Harold, whose interest in communications took them into owning KMOX (radio and television) under the umbrella of Koplar Communications, Inc. The Koplars once rented a home at 6009 McPherson, within two miles of most of the members of the G. H. Walker family—the in-laws of Prescott Bush. Morris and Lillian Shenker both worked in the municipal court as provisional judges.
Dictionary of Missouri Biography
edited by Lawrence O. Christensen
Robert Maheu further testified that he had ousted John Meier from the Hughes Nevada operations in 1969, when Bebe Rebozo relayed a White House request to Danner, for the breakup of Meier's close association with Donald Nixon. "We were requested by the White House to break up what they called a 'romance' between Mr. Meier and Mr. Donald Nixon," Maheu told the jury. He explained that Rebozo told Danner that Meier and the President's brother had traveled extensively together. Rebozo was quoted as saying that this didn't look good—"one representing Hughes and the other with the name of the President." Maheu said Rebozo asked Danner for the cooperation of the Hughes organization in putting a stop to this close association. Maheu said John Meier had originally been brought into the Hughes organization, on the payroll of Robert Maheu Associates, in 1966, when Howard Hughes, who had recently arrived on the Las Vegas scene, was trying to persuade the government to stop its underground nuclear testing in Nevada. Meier was hired because of his scientific background. At this writing he is under indictment on charges of conspiracy and tax evasion in connection with Nevada mining claims sold to Hughes. He also has been sued by the Hughes organization.
On July 1st the Los Angeles federal court jury decided that Robert Maheu had indeed been defamed when Howard Hughes said in a 1972 telephonic press conference that he had fired Maheu "because he's a no‑good, dishonest son of a bitch and he stole me blind." The amount of damages to which Maheu is entitled will be decided in a further phase of the trial before the same jury, set for October 8th. In interim proceedings, Maheu's attorneys sought to force Summa Corporation to disclose its true financial worth, estimated in the billions.
On July 2nd District Judge John Lewis Smith Jr. denied Bebe Rebozo's plea for an order restraining the Senate Watergate Committee from further probing into his affairs or citing him for contempt. The judge commented that the issue was now moot, since the Senate panel's authority had lapsed on June 28th and the committee had would up its investigations. Senator Sam Ervin said there was no intention to pursue the Rebozo matter any further.
The Senate Watergate Committee on July 10th issued a massive three‑volume report on its probe of the White House scandals. The report termed Watergate "an American tragedy," and blamed it on men who shared "an alarming indifference ... to concepts of morality and public responsibility and trust."
The committee's most potentially damaging shot against President Nixon was a special section in the 350‑page report containing the allegation that between 1968 and 1972 Bebe Rebozo had paid out some $50,000—some of it in "laundered" campaign funds—for the private benefit of the President and his family. The Senate panel charged that Rebozo had spent $45,621 from four secret trust accounts, for improvements on Nixon's Key Biscayne property, using at least $23,500 in election campaign funds to do so. Among the Bebe's benefactions, the report alleged, were an $18,435 swimming pool, an $1138 billiard table, a $3586 fireplace, a $243 Arnold Palmer putting green, and $11,979 for co[n]verting a garage into living quarters. In addition, the report claimed, Rebozo paid $4562 toward a $5650 pair of diamond earrings Nixon gave Pat for her 60th birthday two years ago. The Senate report uncovered new ground in the unraveling of Rebozo's intricate financial involvement with Nixon, and revealed part of the Bebe's closed‑door testimony. According to the committee, Rebozo had used a complex set of bank accounts in the name of his lawyer. Thomas H. Wakefield, to funnel more than $50,000 for the President's personal use; and the implication was that at least part of that sum may have come from the mysterious $100,000 cash gift of Howard Hughes.
Relatively minor in the amount of money involved, but important for other considerations, was the allegation that Bebe had spent $4562.28 in leftover campaign funds for earrings for the First Lady. This was perceived by the committee as a graphic symbol, calling to mind the young Nixon's boast on the famous "Checkers" telecast 22 years ago, that his wife wore "a respectable Republican cloth coat." The information about the earrings also helped investigators trace the pattern by which much of Nixon's campaign funds had apparently been "laundered" for his personal use.
The Senate report charged that the $4562.28 portion of the $5650 spent on the earrings originally came from campaign funds Rebozo had collected, and that the Bebe had attempted to disguise the source of the money by transferring it in and out of four separate Florida bank accounts. The $4562.28, the report alleged, was part of $6000 that Rebozo withdrew on April 15, 1969, from the Florida Nixon for President Committee account in his Key Biscayne Bank, and immediately deposited in a trust account in the name of attorney Wakefield. Then on June 28, 1972, the report went on, either Rebozo or Wakefield transferred $4562.28 to another Wakefield trust account in the same bank, then on the same day transferred $5000 from this account to still another Wakefield trust account in the First National Bank of Miami, and finally purchased a $5000 cashier's check payable to New York jeweler Harry Winston.
Balance of the cost of the $5650 earrings was covered by two personal checks, one from Nixon himself for $560, the othe[r] from his personal secretary, Rose Mary Woods, for $90. The earrings, containing 20 diamonds, were delivered by Winston's Washington representative, the late Don Carnavale, to Lieut. Commander Alex Larzelere, a White House aide, and the bill was marked "Please send to Rose Mary Woods." The earrings were subsequently appraised by Carnavale at $9000—the jeweler had given the President a handsome discount.
Bebe Rebozo admitted in testimony to the committee that the $4562 had originally come from campaign funds, but contended it was partial reimbursement to him of the $6000 incidental expenses he had incurred during the 1968 campaign—and that he had made the President a gift of it for the First Lady's diamond earrings. The committee commented in its report: "This complex four‑page process of payment for this gift concealed the fact that the funds originated from contributions to the 1968 campaign, and were ultimately used by Rebozo on behalf of President Nixon."
The report also charged that Rebozo used various trust accounts, again in the name of Thomas Wakefield, for the deposit and transfer of at least $20,000 in $100 bills, and that these funds were used to pay for part of the $45,621.15 improvements to Nixon's Key Biscayne properties.
It was also revealed that Herbert Kalmbach had told the committee that Nixon's two brothers, Edward and Donald, had both received money from the 1968 presidential campaign funds. Kalmbach testified that a $25,000 contribution from shipping magnate D.K. Ludwig was the source of a $3000 payment to Edward Nixon, at a time when he was "between jobs." The payment, Kalmbach testified, was approved by Maurice Stans, the campaign treasurer. Kalmbach further said that after he was made trustee for $1.8 million in leftover 1968 campaign funds, he discovered that $5000 was missing from an envelope containing cash in a safety deposit box. The envelope bore the notation that $5000 had been paid to Donald Nixon for "expenses."
The committee did not go into the question of whether any specific laws had been violated by this wholesale juggling of campaign funds for private use. Department of Justice sources told reporters that such use of campaign funds for personal expenditures is not a violation of election laws, but in some instances could be considered fraud or misappropriation. Also the committee noted it could find no records showing that the President bad paid income tax on any of these "gifts," or that Rebozo had filed the seemingly required gift tax returns. The only record of any reimbursement by Nixon to Rebozo was a check for $13,642.52, issued in August 1973, when Rebozo's affairs were being scrutinized by the IRS as well as by the Watergate Committee.
Among other revelations about Bebe Rebozo's role as a volunteer political fund‑raiser and bagman, was a White House memorandum of February 1969, in which Nixon asked Rebozo to solicit billionaire J. Paul Getty in London for a "major" campaign contribution—three months after the President had been elected. Getty subsequently contributed $125,000 to Nixon's 1972 re‑election campaign. It was also revealed that in early 1969 Rebozo set up a special account in his Key Biscayne Bank, with Wakefield as trustee, to pay what he described as "Administration‑connected costs." This was the account from which the money for Pat's diamond earrings was withdrawn in June 1972.
The Ervin Committee fell short in what had been the primary purpose of its investigation of Rebozo: to prove a definite link between Rebozo's expenditures in the President's behalf and the $100,000 contribution by Howard Hughes. The report alleged, but failed to provide proof, that Rebozo did not keep the $100,000 intact in a safe deposit box for three years before returning it. The report cited the testimony by Kalmbach, which Rebozo had vigorously denied, that the Bebe had told him that he gave part of the $100,000 to the President's brothers, to Rose Mary Woods, and "others." Thus Rebozo's possible manipulation of the Hughes campaign gift still remained—like Bebe Rebozo, himself—"a riddle wrapped in a mystery inside an enigma."
When Nixon resigned on August 8th and returned to San Clemente, among his first visitors were Bebe Rebozo and Robert Abplanalp. There was no announcement as to what they discussed, but the press noted that both of the ex‑President's millionaire friends have an interest in the San Clemente estate, on which a balloon mortgage payment of $226,440 plus $17,000 in interest is due in January 1975.
On August 19th, Special Prosecutor Jaworski filed an affidavit in federal court in Washington, stating that evidence indicated that Bebe Rebozo had diverted at least $41,000 in Nixon campaign funds to the personal benefit of Nixon and his family—including the diamond earrings and the Key Biscayne home improvements. The affidavit, signed by Assistant Special Prosecutor Paul Michel, alleged that the evidence indicated that the money in question was diverted from $150,000 in Nixon campaign funds collected by Rebozo, including the $100,000 contribution by Howard Hughes and $50,000 from food‑chain magnate A.D. Davis. During the period in question, the affidavit said, Rebozo "apparently did not have sufficient cash available to make these deposits from any known source other than the campaign contributions."
The affidavit was filed by the special prosecutor in support of the subpoenas he had issued for Rebozo's three attorneys to produce records bearing on the transactions in question, as detailed above. The trust accounts covered by the subpoenas, Michel alleged, "Were used to conceal the source of payments made at Mr. Rebozo's instructions, and to 'launder' political campaign contributions."
Jaworski's action, a little more than two weeks before President Ford's surprise move in pardoning Nixon before he was formally accused of anything, indicated that criminal prosecutions were being contemplated. The affidavit stated that the documents sought from Rebozo's Florida attorneys would "assist the grand jury and the special prosecutor in determining whether and what currency received as political campaign contributions was subsequently used for the personal benefit of Mr. Rebozo, former President Nixon or others, and what federal criminal laws, if any, may thereby have been violated."
On August 22nd, U. S. District Judge George L. Hart Jr., after hearing arguments, refused to quash the subpoenas, and also ordered the three attorneys, Thomas H. Wakefield, Robert Hewitt and Garth A. Webster, to testify before the grand jury. Hart's ruling was particularly important because the material that Rebozo's lawyers were ordered to produce was far more extensive than the documents the Senate Watergate Committee had been able to obtain. The attorneys had successfully invoked the attorney‑client privilege to limit the Senate inquiry. They had attempted to resist the grand jury subpoenas on the same grounds, but Judge Hart turned them down, ordering them to appear for questioning and to produce the documents Jaworski requested. Questioning was expected to center on the recollection of Wakefield, Rebozo's attorney for 20 years, of statements Rebozo made to him concerning the source of the funds, and why the transactions were handled in such a devious manner.
A Washington Post story on August 25th reported that confidential financial statements showed that Bebe Rebozo's wealth had increased nearly seven‑fold during the first five years that his friend Nixon was President. Just before Nixon took office in 1969, Rebozo reported his net worth as $673,000. By September 1973 his net worth, largely in real estate and holdings in his bank and other companies, had jumped to $4.5 million. His 1968 income, according to his 1969 statement, was $35,800; in 1973 it was "in excess of $200,000."
The New York Times reported in an exclusive story that a stillsecret report of the Senate Watergate Committee supported the theory, already expressed, that the Watergate break‑in and the intelligence‑gathering plot that inspired it were the end‑result of a White House effort to suppress public knowledge of the $100,000 payment to Rebozo by Howard Hughes. The 42‑page document, the only part of the committee's final report not yet released, was said to be based on an analysis by Senate staff lawyers of the millions of words of published and unpublished testimony during the panel's 18‑month investigation. The report was not released with the committee's other findings because of reported objections by the chief minority counsel, Fred D. Thompson, that it was inconclusive. It was expected to be made public later.
According to the Times story, the evidence assembled in the unreleased report points out that the first public mention of the $100,000 Hughes contribution was made by syndicated Washington columnist Jack Anderson in August of 1971, about a year after the second installment was paid to Rebozo. Later Herman M. Greenspun, publisher of the Las Vegas Sun, tried to obtain further details, and John Ehrlichman sent Herbert Kalmbach to assure Greenspun that the Hughes funds had not entered into the San Clemente purchase‑and also to find out how much Greenspun knew about the Hughes contribution and Donald Nixon's relations with the Hughes organization.
According to the report, the White House was greatly concerned lest some of the less easily explained details of the Hughes‑Rebozo transaction might surface to embarrass Nixon in his 1972 campaign; and it was this that inspired the Watergate break‑in, to find out what the Democratic Committee might know about it. Thus, by this theory, Bebe Rebozo and his murky activities were behind the whole Watergate mess. At this writing the grand jury investigation is still going on, and many questions remain to be answered.
pps. 505-518
Notes:
[1] Clare's father and his three brothers were Scottish-born tradesmen, skilled in construction crafts, who had emigrated from Glasgow during the decade between 1904 to 1914 and sometimes worked alongside or competed with another family of Scots named Orr, which included John B. Orr, a respected stucco artisan, known to the Gunn brothers. In fact, in 1918, before John relocated his wife and children to Miami from St. Louis, his brother William Gunn, was superintendent of John B. Orr, Inc. while Orr worked on the Deerings' estate at Coconut Grove. (We are reminded that Coconut Grove was where the CIA had a safe house where E. Howard Hunt was housed during planning for Bay of Pigs.) William Gunn set up his own firm with a war veteran from Toledo named Otto Goll, a company which morphed later into Gunn & Gunn, where Clare's youngest brother, William P. Gunn, dropped out of high school to work as a carpenter.
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