Source: Garrett M. Graff. Watergate - A New History (2022)
On 29 March 1972, Jeb Magruder showed up with two full briefcases of campaign strategies, plans, and memos for AG John Mitchell to review and approve, among them was Liddy’s latest revised version of Gemstone. During the ITT scandal, Gemstone had been on the backburner, which increased tensions between Magruder and Liddy. I reached the point where Liddy was transferred to CREEP to be general counsel of the financial wing of the campaign, where he impressed among others its chairman, Maurice Stans. All the while, Liddy was playing coy and nice, waiting for Mitchell to approve Gemstone. To some in the White House, including Magruder and Strachan, Liddy was seen as “Hitler”, but he was also seen as “Our Hitler”.
In Key Biscayne briefing Mitchell and Magruder on Gemstone was Fred LaRue (from CREEP), and all three gave different versions of what was decided about Gemstone. Mitchell claimed that he rejected Liddy’s plan outright, where Fred LaRue
asserted that Mitchell was far less forceful, saying that a decision didn’t need to be made at that point. Magruder held that Mitchell authorized Gemstone, saying it was yet another example of a “throwaway plan” okayed by the AG in order to please the White House. No matter the real story, Liddy’s plan had momentum during the Spring of 1972, with Nixon wanting something like Liddy’s plan in action for quite some time. Colson wanted Gemstone to get started as soon as possible, where Haldeman was fine with Liddy’s plan if Mitchell felt comfortable. Liddy had wanted a whole Loaf, and in the end he received a quarter-loaf, but as it turned out, it was a quarter-loaf too much.
In Key Biscayne briefing Mitchell and Magruder on Gemstone was Fred LaRue (from CREEP), and all three gave different versions of what was decided about Gemstone. Mitchell claimed that he rejected Liddy’s plan outright, where Fred LaRue
asserted that Mitchell was far less forceful, saying that a decision didn’t need to be made at that point. Magruder held that Mitchell authorized Gemstone, saying it was yet another example of a “throwaway plan” okayed by the AG in order to please the White House. No matter the real story, Liddy’s plan had momentum during the Spring of 1972, with Nixon wanting something like Liddy’s plan in action for quite some time. Colson wanted Gemstone to get started as soon as possible, where Haldeman was fine with Liddy’s plan if Mitchell felt comfortable. Liddy had wanted a whole Loaf, and in the end he received a quarter-loaf, but as it turned out, it was a quarter-loaf too much.
What most likely occurred was that Magruder, tired of dealing with the high-maintenance Liddy, authorized a scaled-down plan after Mitchell again demurred. Mitchell constantly denied authorizing Gemstone, though he admitted he knew it involved illegal activities; but someone in a position of authority okayed Gemstone at the meeting in Key Biscayne. What was certain was Mitchell set a budget limit of $250k from CREEP to fund Liddy, and it was agreed that Liddy would wiretap Lawrence O’Brien’s office at the Watergate, where he was chairman of the Democratic National Committee.
The finance arm of Nixon’s campaign rushed to lock in large cash donations before the Federal Election Campaign Act
took effect on 7 April 1972. The act, signed into law by Nixon during January 1972, required quarterly disclosures of donors/donations as well as campaign expenditures, with the Office of Federal Elections in the Government Accounting Office (GAO) as the watchdog. During the eleven weeks before the law took effect, the finance wing of Nixon’s campaign hid as much money as it could. Kalmbach was key in doing so, raising $69m for the campaign, which was an astounding sum for a Presidential campaign in those days.
Kalmbach and Stans hit the road, leaning on big-time donors to pony up as much as they felt they could part with for the campaign; a fifth of the campaign’s total haul came from the top 100 donors. Kalmbach had the most success with the dairy and milk producers, since Nixon had acted on their wishes for price supports. So much money over a short period of time came from the American Milk Producers Incorporated was donated to the campaign led to the problem of how to launder the money without raising eyebrows. The creative solution was to channel the money in very small donations (less than $3k through a network of hundreds of new campaign committees, created by among others John Dean; almost $250k came from the milk producers. Some journalists noticed something was odd in terms of campaign donations for Nixon’s re-election, since CREEP’s documentary paperwork chronicling the incoming and outgoing monies was sloppily done or suspicious.
The finance arm of Nixon’s campaign rushed to lock in large cash donations before the Federal Election Campaign Act
took effect on 7 April 1972. The act, signed into law by Nixon during January 1972, required quarterly disclosures of donors/donations as well as campaign expenditures, with the Office of Federal Elections in the Government Accounting Office (GAO) as the watchdog. During the eleven weeks before the law took effect, the finance wing of Nixon’s campaign hid as much money as it could. Kalmbach was key in doing so, raising $69m for the campaign, which was an astounding sum for a Presidential campaign in those days.
Kalmbach and Stans hit the road, leaning on big-time donors to pony up as much as they felt they could part with for the campaign; a fifth of the campaign’s total haul came from the top 100 donors. Kalmbach had the most success with the dairy and milk producers, since Nixon had acted on their wishes for price supports. So much money over a short period of time came from the American Milk Producers Incorporated was donated to the campaign led to the problem of how to launder the money without raising eyebrows. The creative solution was to channel the money in very small donations (less than $3k through a network of hundreds of new campaign committees, created by among others John Dean; almost $250k came from the milk producers. Some journalists noticed something was odd in terms of campaign donations for Nixon’s re-election, since CREEP’s documentary paperwork chronicling the incoming and outgoing monies was sloppily done or suspicious.
Once the new campaign disclosure law took effect on 7 April 1972, Hugh Sloan was the CREEP treasurer, but he didn’t do a thing without orders from Kalmbach, Stans, Mitchell, and a few others before handing out large sums of cash. Some incoming checks went straight to Liddy, which would in time provide proof that led to the downfall of the Nixon Presidency. On 10 April 1972, the first weekday in which the new campaign finance law actually took effect, the president of the International Controls Corporation gave Stans a briefcase that contained $200k, which was intended to be anonymous. Even though the money didn’t arrive before the new campaign finance law took effect, Stans started the “processing” of the $200k at CREEP anyway, handing off doing so to Sloan, instructing him to list the donation under Mitchell’s initials.
There was so much money coming in that Sloan asked Liddy if he could convert to cash a series of traveler’s checks that had been donated to CREEP. Liddy flew to FL, and via Barker, met with a Cuban banker. Liddy cashed a $25k check from Ken Dahlberg, a MN businessman, dated after the deadline of the new campaign finance law, and then with four checks drawn on a Mexican bank. Liddy kept turning the donated checks into cash, most of it from Barker’s banker in crisp new $100 bills, all sequentially numbered.
There was so much money coming in that Sloan asked Liddy if he could convert to cash a series of traveler’s checks that had been donated to CREEP. Liddy flew to FL, and via Barker, met with a Cuban banker. Liddy cashed a $25k check from Ken Dahlberg, a MN businessman, dated after the deadline of the new campaign finance law, and then with four checks drawn on a Mexican bank. Liddy kept turning the donated checks into cash, most of it from Barker’s banker in crisp new $100 bills, all sequentially numbered.
Liddy’s scaled-back Opal operations (part of Gemstone) had funding for four covert break-ins, two of which were McGovern’s campaign headquarters and the Democratic National Convention headquarters in Miami. Break-ins were expensive and the necessary manpower was intensive, with each Opal operation coming in at around $10k. Magruder, probably after another visit to Key Biscayne, told Liddy that he was to burgle and bug the Democratic Party Chairman’s offices of Lawrence O’Brien. Liddy was not happy, since the Watergate Hotel/Office Complex wasn’t part of his break-in plans, and adding it would take budgeted money away from other Gemstone missions.
On 2 May 1972, FBI Director J. Edgar Hoover walked out of the FBI building for the last time, dying in his sleep that night. Mark Felt was at his desk at 9:45 am when he was told that Hoover had passed away. Felt was confident that he’d be the next FBI Director, but Nixon saw the chance to make the FBI do his bidding with the next director; Felt had no idea that he was not on Nixon’s radar for the position. Nixon chose L. Patrick Gray to be the Acting Director of the FBI, serving in that capacity through the Election of 1972. Nixon wanted to avoid a confirmation battle in the Senate during an election year, and Gray’s nomination for Deputy AG was still languishing in the Senate for confirmation.
On 2 May 1972, FBI Director J. Edgar Hoover walked out of the FBI building for the last time, dying in his sleep that night. Mark Felt was at his desk at 9:45 am when he was told that Hoover had passed away. Felt was confident that he’d be the next FBI Director, but Nixon saw the chance to make the FBI do his bidding with the next director; Felt had no idea that he was not on Nixon’s radar for the position. Nixon chose L. Patrick Gray to be the Acting Director of the FBI, serving in that capacity through the Election of 1972. Nixon wanted to avoid a confirmation battle in the Senate during an election year, and Gray’s nomination for Deputy AG was still languishing in the Senate for confirmation.
Felt was stunned: how could Nixon do this to the FBI, and to him, installing an outsider as FBI Director. Soon enough, shock, disbelief, bitterness, and then betrayal set in on Felt, especially when he realized that Gray would not be a mere seat-warmer. Adding to Felt’s frustration was that there wasn’t time to “sabotage” Gray in order to win his “Dream Job”. Hoover had been FBI Director for 48 years; ironically, Gray would be Acting FBI Director for 48 weeks.
While Hoover was lying in state in DC, Liddy and Hunt were asked to provide security of Hoover’s casket, and Barker and his Cuban associates came to DC to do so. Liddy and Hunt used their presence in DC to plan break-ins. One night they all scouted McGovern’s headquarters on Capitol Hill, and then to Magruder’s added job, casing out the Watergate.
Nixon viewed Gray’s appointment as Acting FBI Director as being on par with Supreme Court nominations. Nixon was still smarting from his last two Supreme Court nominations being rejected back-to-back. But Nixon gambled badly with Gray, and without knowing it angered Felt to the point where he’d look for revenge against Nixon. Gray had a varied and solid resume, but he knew nothing about the FBI, and he was destined to fail, in large part because from the start Gray made the mistake of trusting Mark Felt.
While Hoover was lying in state in DC, Liddy and Hunt were asked to provide security of Hoover’s casket, and Barker and his Cuban associates came to DC to do so. Liddy and Hunt used their presence in DC to plan break-ins. One night they all scouted McGovern’s headquarters on Capitol Hill, and then to Magruder’s added job, casing out the Watergate.
Nixon viewed Gray’s appointment as Acting FBI Director as being on par with Supreme Court nominations. Nixon was still smarting from his last two Supreme Court nominations being rejected back-to-back. But Nixon gambled badly with Gray, and without knowing it angered Felt to the point where he’d look for revenge against Nixon. Gray had a varied and solid resume, but he knew nothing about the FBI, and he was destined to fail, in large part because from the start Gray made the mistake of trusting Mark Felt.