The Wars of Watergate (39 page)

Questions regarding the CIA appear in various segments of the Watergate story. The Agency’s role, however, seems destined to remain shadowy. Such CIA principals as Helms, Deputy Director Vernon Walters, and future Director William Colby have adamantly denied any CIA role in initiating any Watergate events or in implicating the White House. But Assistant U.S. Attorney Earl Silbert charged, and Colby admitted, that the CIA had withheld cooperation with the investigation. What eventually emerged from the inquiries into Watergate—wholly apart from the events of the break-in and subsequent cover-up—was the CIA’s changed relationship to other power centers in the government. Richard Nixon’s entanglement with Watergate surely allowed the Agency to escape confrontation with a President apparently bent on tightening his own command and control of it. But at the same time, that escape ironically gave force to the concept and even the existence of congressional oversight of the CIA.
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Nixon had a longstanding interest in Lawrence O’Brien. O’Brien had been a Kennedy political operative, both in Massachusetts (where Charles Colson was an old adversary) and in national politics. Later, he faithfully served Lyndon Johnson. Nixon also knew that O’Brien had been retained by Howard Hughes as a secret lobbyist, although, unlike himself, the Democrat never had to answer politically for the link. Nixon bitterly resented continuing Democratic efforts to connect him to Howard Hughes, efforts which included a Kennedy Justice Department investigation in 1961 because of a Hughes loan to Nixon’s family. Haldeman noted that when matters involved connections to Hughes, “Nixon seemed to lose touch with reality.” Partly because of the Hughes connection, Colson maintained a large folder of materials on O’Brien, labeled “Political Statements by Lawrence F. O’Brien.”

When George McGovern sought a vice-presidential candidate to replace Thomas Eagleton in the summer of 1972, the President advised his aides to say nothing of Eagleton’s problem, but “then hit the successor all out—esp. if it’s O’Brien.” Ehrlichman and Nixon discussed O’Brien’s taxes and a reputed loan from Hughes at some length on August 7, 1972, after Rose Mary Woods had called Bobby Baker for information on the Democratic
Chairman. Several weeks later, the President instructed Ehrlichman to get busy to “worry O’Brien,” and to work through John Dean. In January 1971, Nixon told Haldeman that “the time is approaching when Larry O’Brien is held accountable for his retainer with Hughes.” Perhaps, the President added, “Colson should make a check on this.” Haldeman, however, ordered Dean to make a report. Word for word, he repeated the President’s words.

Dean thought that the Watergate break-in had its origins in Nixon’s obsessive desire to incriminate O’Brien. Magruder tentatively agreed some years later but then admitted he was uncertain. Haldeman firmly believed that Nixon’s orders to Colson, which he had conveyed, made their way to Hunt and Liddy. More than that, as Haldeman wrote, “Nixon
knew
what had happened,” as he repeatedly told Haldeman after the burglary that “Colson must have done it.”
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Dean turned the O’Brien matter over to John Caulfield, Ehrlichman’s in-house private detective. Caulfield found little on O’Brien, but he kept running into more details of the Hughes-Nixon connection and warned Dean that it might be dangerous. Nevertheless, the IRS began a tax audit of Robert Maheu, Hughes’s ousted chief aide. Maheu retaliated with a leak to columnist Jack Anderson about a reported $100,000 Hughes payment to Nixon through Bebe Rebozo. Las Vegas journalist Hank Greenspun told Herb Klein that he had information the money had been used to furnish the President’s San Clemente estate.

Stories regarding the Hughes-Nixon connection included a controversial loan to Donald Nixon, the President’s brother, in late 1956 which purportedly resulted in a favorable IRS ruling for the Howard Hughes Medical Institute, and allegations of Donald’s involvement with a convicted Hughes associate. The rumors began to mushroom early in 1972. Dean noted that Nixon particularly blamed O’Brien for sensationalizing the Administration’s decision not to bring an antitrust prosecution against the International Telephone and Telegraph Company.

As a result, the President and Colson added pressure for more intelligence on O’Brien. Shortly afterward, Mitchell and Magruder approved the original break-in of Democratic headquarters, and Magruder enthusiastically pushed for improved bugs when the initial fruits proved insignificant.

At one point, Liddy allegedly was instructed to find out about O’Brien’s “shit file” on Nixon as well as about the Hughes-O’Brien connection. According to this account, spelled out in a biography of Hughes, Nixon later told Haldeman his real reason for wanting to get O’Brien. That conversation occurred on June 20, but the biographer conveniently claimed that it was part of an erased 18½-minute segment of a taped conversation in the Oval Office. He also suggested that the CIA undermined the Nixon cover-up to
protect its own links to the Hughes organization.
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Such speculations had no evidentiary accompaniment.

Months after the break-in, Nixon still was preoccupied with “getting something” on O’Brien. On August 9, he informed Haldeman that the IRS had investigated the Hughes Tool Company and found payments to O’Brien, possibly during the time he served as Hubert Humphrey’s reportedly unpaid campaign manager in 1968. Nixon had learned all this from Treasury Secretary John Connally, who urged the President to make use of the information as soon as possible. The problem was in forcing the IRS to publicize the payments; apparently, the agency had resisted doing so. Nixon expected Haldeman or Ehrlichman “to ride IRS.” He wanted the agency to call O’Brien in for voluntary interrogation. If he refused, the IRS was to subpoena him—“before O’Brien stonewalls it.”
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The so-called “Greek Connection” provides yet another theory for the Watergate break-in. Once again, there is a link to Lawrence O’Brien, and the motive may, like the O’Brien-Hughes theory, lie in G. Gordon Liddy’s contention that the Watergate break-in
“was to find out what O’Brien had of a derogatory nature about us, not for
us
to get something on
him
or the Democrats.”
James McCord also testified that the purpose of the June 17 break-in was “to do photocopy work of documents” as well as to install new listening devices. The story has its origins in a September 1968 campaign speech delivered by vice-presidential candidate Spiro Agnew. Agnew earlier had promised Elias P. Demetracopoulos, a Greek newspaperman who had escaped Greece shortly after an army coup in 1967, that he would maintain public neutrality toward the Greek Colonels’ dictatorship; privately he relayed word that “my hopes are that we will see Greece in proper hands very shortly.” But in response to a question at the National Press Club on September 27, Agnew strongly endorsed the regime and vigorously denounced the opposition as Communist-inspired and -dominated.

What had happened? According to Demetracopoulos, the Greek KYP—the intelligence service which had been founded by the CIA and subsequently subsidized by the Agency—had transferred three cash payments totalling $549,000 to the Nixon campaign fund. The conduit was Thomas Pappas, a prominent Greek-American businessman with close links to the CIA, the Colonels, and the Nixon campaign. (Agnew insisted that he “had absolutely no knowledge” of such money.) The charges that KYP money had come into the presidential campaign, with CIA knowledge, were circulated in the United States and in Greece. CIA Director Richard Helms commented with studied ambiguity: “Even if somebody suggests they would like to do it, I would insist that they don’t tell me about it because that is
dynamite.” In 1987, an authoritative KYP official confirmed that the money had flowed from Greece to the Nixon campaign in 1968. Pappas had well-known ties to Nixon, and he was widely regarded as the man who had persuaded Nixon and Mitchell to put Agnew on the ticket, although Agnew later claimed that he disliked the businessman.
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Demetracopoulos arranged a meeting with O’Brien through former California Governor Pat Brown. He reluctantly provided Brown with sketchy information, fearing quite correctly that his telephone was bugged. (Later revelations proved that the FBI had tapped Demetracopoulos’s telephone in this period.) Demetracopoulos saw O’Brien on October 19 and gave him the particulars of the cash transactions. During the meeting, it was suggested that the CIA be brought in to confirm the charges. But Demetracopoulos long had been
persona non grata
with the Johnson Administration, which had tried to block his entry into the country in 1967. LBJ already had resumed aid to the Greek Colonels at the time, and he was known to be infuriated with Demetracopoulos’s lobbying activities against the military regime. He or the CIA may even have known that the Greek regime had planned to kidnap Demetracopoulos, according to the junta’s ambassador to the United States. Two days after the O’Brien meeting, Demetracopoulos’s lawyer received word that a deportation hearing was scheduled on October 23 for his client, but he managed to get a continuance.
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After the meeting on October 19, Demetracopoulos had further telephone contacts with O’Brien and his aides, and they met again on October 26. O’Brien said that nothing could be done to alter the Administration’s position, although he publicly denounced the Nixon-Agnew-Pappas-Greek connections.

Nixon’s election set in motion a variety of events that brought Elias Demetracopoulos into the limelight—and made him a repeated target of Administration reprisals. John Caulfield sent a memo to Ehrlichman in October 1969 regarding the “Greek Inquiry.” Demetracopoulos also remained under surveillance by the FBI, and probably by the CIA as well. In July 1971, Representative Benjamin Rosenthal (D–NY), Chairman of a House Foreign Affairs subcommittee, opened an investigation of the Administration’s support for the Greek regime. Demetracopoulos appeared as a witness on the twelfth and denounced Thomas Pappas’s connections, contending that he had been given extraordinary economic concessions for his support. In response to a question from Rosenthal, Demetracopoulos promised a detailed supporting memorandum, with documented material.

Following the open hearing, the U.S. Ambassador to Greece, Henry Tasca, sent a lengthy telegram to Secretary of State William Rogers and Attorney General John Mitchell, urging that Demetracopoulos be thoroughly investigated by the FBI. Tasca called him a “subsidized agent” and a “dangerous and mysterious enemy.” The Ambassador regularly entertained Pappas, he was particularly close to the Greek regime, and Nixon had known him well
since 1947. Within a few days after Tasca’s telegram arrived in Washington, agents from the Internal Security Section of the Department of Justice questioned the subcommittee staff and secured a stenographic transcript of the hearing but did not get the detailed memorandum until after Demetracopoulos filed it on September 17. The agents advised the staff that Demetracopoulos had possibly been in violation of the Foreign Agents Registration Act. They also visited officials at the Greek Desk in the State Department, who urged them to make “any kind of case” against Demetracopoulos, whom they regarded as a “shady character and a troublemaker.”

Representative Rosenthal announced that he would continue the investigation and perhaps call Thomas Pappas as a witness. Similar sentiments were expressed by Democratic members of the Senate Foreign Relations Committee. In fact, nothing happened. Pappas was not a man whom the Administration wanted to subject to public scrutiny. In December 1971, David Abshire, Assistant Secretary of State for Congressional Relations, assured various committee members that the department had no interest in persecuting Demetracopoulos, yet he vigorously defended Pappas’s conduct. Abshire also apologized to Demetracopoulos, clearing his letter of apology with John Dean.
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But the harassment continued. In September 1971, Murray Chotiner, the longtime Nixon operative, had visited Demetracopoulos (they were on a first-name basis) and warned him that he could be deported if he continued to attack Pappas and cooperated in any investigation of the President’s “friend,” as Chotiner characterized Pappas. Months later, a close friend of both Demetracopoulos and Mitchell reported that at a luncheon, Mitchell spoke loudly of his intention to deport the Greek. “He is
furious
at you—and your testimony against Pappas. He kept threatening to have you deported!” she wrote Demetracopoulos.
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Thomas Pappas’s links with the Nixon Administration became still stronger in the 1972 campaign as he solicited hundreds of thousands of dollars from businessmen. He also raised illegal funds from foreign sources. (Receiving foreign money apparently was not unusual for a Nixon campaign: Philippine President Ferdinand Marcos reportedly contributed in both 1968 and 1972.) Most important, Pappas figured heavily in discussions regarding the payment of hush money to the Watergate burglars. John Dean claimed that in March 1973 Ehrlichman suggested Pappas as a source of assistance. “Did you talk to the Greek?” Dean subsequently asked Mitchell. “Yes I have,” Mitchell replied. “Is the Greek bearing gifts?” Dean asked, but Mitchell could not answer on the telephone at the moment.

Dean himself said he had talked to Pappas about the need for hush money. In a later conversation with the President, Pappas acknowledged that he was, as Nixon remembered, “helping, uh, uh, John’s [Mitchell] special projects.” Nixon also acknowledged that he had been told that Pappas had been
“very helpful on the, uh, Watergate thing.” How helpful? The Watergate Special Prosecutor later learned that Pappas had given Mitchell $50,000, ostensibly for “closing costs” on a real-estate loan. Pappas also admitted that he had been asked to contribute to help the defendants in the break-in. One memo in the prosecutor’s files states that “some documentary evidence indicates that those involved in the cover-up may have expected funds for it from Pappas.” One of the CREEP lawyers admitted to Dean that a Greek law firm actually was a CIA front and could channel some of the money to the defendants.
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