The Strong Man: John Mitchell and the Secrets of Watergate (30 page)

Geneen trained his indefatigable energies on one all-important goal: getting the Nixon administration to rescind its opposition to those three mergers. Retaining Hartford Fire, whose annual premiums exceeded $1 billion, was especially critical to ITT preserving its annual growth rate. DOJ had already sent one positive signal: Since Mitchell’s former law firm had represented an ITT subsidiary, the attorney general recused himself from the case when, in April 1969, McLaren sought approval for an injunction to halt the Canteen merger. In Kleindienst’s hands, this request was denied.
¹¹

Encouraged, Geneen launched a multiheaded lobbying offensive, with himself in the lead. He was determined to start at the top—but was rebuffed in his attempt, in June 1969, to meet directly with Nixon; such a session, the White House concluded, would be “inappropriate.” Geneen kept at it until the following summer, when he, along with forty-five other prominent executives, dined with Nixon aboard the presidential yacht,
Sequoia
. According to one account, Nixon and Geenen talked privately for ten minutes—though no relief for ITT emanated from whatever discussion they had.
¹²

Less than three weeks later, on August 4, 1970, Geneen propelled himself into Ehrlichman’s office. For the occasion, the ITT president brought along William R. Merriam, the company’s top man in Washington, and Edward (“Ned”) Gerrity, ITT’s New York–based public relations chief. Geneen sensed Ehrlichman’s growing power in the White House and took the lead role in presenting ITT’s case to Ehrlichman, who needed little persuading to believe the worst about Mitchell and McLaren. When McLaren got wind of Geneen’s visit, and demanded to know what was discussed, Ehrlichman instructed an aide to tell the antitrust chief “nothing of significance…needed to be passed along.” For good measure, the aide pointedly told McLaren their respective bosses had already discussed the meeting, and sneered: “Perhaps the attorney general could give you more specific guidance.”
¹³

Geneen was on a roll, but Mitchell—at least temporarily—stopped it. On the same day as his tête-à-tête with Ehrlichman, the ITT president sat down with the attorney general, this time with no aides present. Questioned later why he agreed to such a meeting when the government’s cases against ITT were pending and he had recused himself from them, Mitchell told the Senate that he had, in communications between the two men’s secretaries, imposed on Geneen the “express condition that the pending ITT litigation would not be discussed.” Geneen had agreed, Mitchell testified, adding: “The pending ITT litigation was not discussed at this meeting.”

During their half hour together, Geneen told Mitchell he thought the Antitrust Division was attacking ITT on the basis of its size, not its market effect, an approach he took as DOJ policy. Mitchell later insisted the exchange was “entirely theoretical” in nature, that he “completely rebuffed” Geneen’s arguments about DOJ policy, and made “no change in it” after their conversation. Jack Anderson, the ubiquitous muckraker, later heaped scorn on this claim: “Just a little philosophical discussion between two theoreticians who happened to get together for an academic exercise.” Yet Mitchell owed Geneen no favors; so far, the business tycoon had contributed to neither Nixon’s ’68 nor ’72 campaigns.
¹⁴

Here the ITT lobbying machine kicked into third gear. Ned Gerrity, who had served in the same unit as Vice President Agnew during World War II, asserted in a letter to his old comrade on August 7—three days after Geneen’s meetings with Ehrlichman and Mitchell—that Mitchell had promised the ITT president he would “talk with McLaren and get back to Hal.” Apprised of this, Mitchell laughed and called its contents “preposterous.” A more serious problem was brewing that very day in the Oval Office, where, according to previously unpublished notes, Ehrlichman raised the “ITT problem” with Nixon in a meeting that also included Haldeman and Assistant to the President Donald Rumsfeld.
¹⁵

In truth, ITT held a decisive advantage in the forum that, for all Geneen’s lobbying across the executive branch, really mattered most: the judiciary. Federal district and appellate courts almost invariably dismissed antitrust cases, and few prominent lawyers besides Mitchell believed that McLaren’s novel extension of Section 7 of the Clayton Act to cover conglomerate mergers would prevail at trial. Now, on September 15, 1970, the government’s case against ITT’s acquisition of Grinnell opened in federal district court in Connecticut. Two days later, Ehrlichman sent Mitchell an infamous memorandum, its condescension matched only by its futility.

I was disappointed to learn that the ITT case had gone to trial with apparently no further effort on the part of Mr. McLaren to settle this case with ITT on the basis of our understanding that “largeness” was not really an issue in the case…. I think we are in a rather awkward position with ITT in view of the assurances that both you and I must have given Gineen [
sic
] on this subject…. I would appreciate your reexamining our position in the case in view of these conversations. Gineen [
sic
] is, of course, entitled to assume the administration meant what it said to him.

Key was Ehrlichman’s reference to “assurances that both you and I
must have
given” Geneen: The domestic policy czar knew about his own promises to the ITT president, but was left to assume Mitchell “must have” done likewise—an assumption that proved wrong. As the court proceedings in Connecticut made clear, Mitchell had articulated Justice’s position, Ehrlichman Nixon’s. Therein lay the trouble.
¹⁶

On December 31,
the federal district court in Connecticut decided the
Grinnell
case in ITT’s favor. Chief Judge William H. Timbers expressed incredulity at the government’s “paucity of evidence” that the merger would lead to reciprocal dealings by ITT subsidiaries, and “emphatically declined” McLaren’s expansive reading of the Clayton Act as an “invitation to…judicial legislation.”
¹⁷

McLaren announced he would appeal the government’s loss in
Grinnell
to the Supreme Court. He had until March 31, 1971, to file the necessary paperwork. Ten days before that deadline, Erwin N. Griswold, the white-haired, universally respected Johnson-era holdover who served as solicitor general of the United States, and thus argued the federal government’s cases before the Supreme Court, sought and received a routine thirty-day extension. Now McLaren and his team had until April 20 to appeal the
Grinnell
decision.

As that date approached, the Geneen machine cranked up again. John Ryan, an ITT director and McLean neighbor of Kleindienst’s, complained to the deputy attorney general about the litigation, “in an almost belligerent manner,” during a party at Ryan’s home. He asked if a company man could visit Kleindienst at his office to discuss the litigation’s damaging economic impact on ITT. Kleindienst agreed, and soon found diminutive ITT director Felix G. Rohatyn, perhaps the era’s premier investment banker, sitting across from him at the Justice Department, pitching him and McLaren on the disastrous effects a government victory would have not only on ITT’s multinational fortunes but on America’s larger balance of payments.

On Monday, April 19, the day before the
Grinnell
appeal papers were due in court, John Ehrlichman called Kleindienst and informed him bluntly: “Dick, the president has instructed me to order you to drop the appeal before the Supreme Court in the
Grinnell
case.” Not one to take Ehrlichman’s intrusions lightly, Kleindienst struggled to maintain his composure. He had approved the appeal personally, he told Ehrlichman. If Nixon wanted to discuss the matter, fine; but for the president’s own sake, dropping the appeal was inadvisable. “Oh, we’ll see about that!” Ehrlichman snapped, and hung up.
¹⁸

An hour later, Ehrlichman marched into the Oval Office. He launched into a discussion of the “antitrust thing” by observing that although Nixon was to meet with his attorney general the following day, “by then it might be too late, in a sense, [for] the ITT case, where God knows we have made your position as clear as we could to Mr. What’s-His-Name over there.” “McLaren,” Nixon said; the president knew Mr. What’s-His-Name’s name all too well. Ehrlichman breezily explained the background: how Mitchell had cited a conflict of interest early on and assigned Kleindienst to monitor McLaren’s work on the ITT cases, which the White House aide—conveniently ignoring the relevant facts and case law—described as “an attack on conglomerates, on a theory which specifically had been contemplated by the Johnson administration and laid aside as too anti-business.”
¹⁹

Too anti-business?
That was all Nixon needed to hear. “Kleindienst is in this?” the president asked. Then he reached for his phone. “Dick Kleindienst,” he barked at a White House operator. While she tracked down the deputy, Ehrlichman explained the looming appeals deadline. “They’re not going to file [the papers],” the president vowed. “Well,” Ehrlichman purred with satisfaction, “I thought that was your position.” A few minutes later, the deputy attorney general was on the line. “Hi, Dick, how are you?” the president asked. Then Nixon—who normally avoided personal confrontations—got down to brass tacks with uncharacteristic speed and bluntness.

The ensuing tirade, among the most infamous on the Nixon tapes, marks the moment when two years of simmering friction between the Nixon White House and Mitchell’s Justice finally boiled over. “I’m going to talk to John [Mitchell] tomorrow about my general attitude on antitrust,” Nixon began, “and in the meantime, I know that he has left with you the IT-and-T thing because apparently he says he had something to do with them once.”

NIXON:
Well, I have, I have nothing to do with them. And I want something clearly understood, and if it is not understood, McLaren’s ass is to be out within one hour. The IT and T thing—stay the hell out of it. Is that clear? That’s an order.

KLEINDIENST:
Well, you mean the order is to—

NIXON:
The order is to leave the Goddamned thing alone. Now, I’ve said this, Dick, a number of times, and you fellows apparently don’t get the me—the message over there. I do not want McLaren to run around prosecuting people, raising hell about conglomerates, stirring things up at this point. Now you keep him the hell out of that. Is that clear?

KLEINDIENST:
Well, Mr. President—

NIXON:
Or either he resigns. I’d rather have him out anyway. I don’t like the son-of-a-bitch.

KLEINDIENST:
The, the question then is—

NIXON:
The question is, I know, Dick, that the jurisdiction—I know all the legal things, Dick, you don’t have to spell out the legal—

KLEINDIENST:
[Inaudible]—appeal filed.

NIXON:
That’s right.

KLEINDIENST:
That brief has to be filed tomorrow.

NIXON:
That’s right. Don’t file the brief.

KLEINDIENST:
Your order is not to file a brief?

NIXON:
Your—
my order is to drop the Goddamned thing, you son-of-a-bitch! Don’t you understand the English language?
Is that clear?

KLEINDIENST:
[Laughs] Yeah, I understand that.

NIXON:
Okay.
²⁰

Ten minutes later, Haldeman scribbled notes that, previously unpublished, captured Nixon’s determination to bring the Antitrust Division to heel.

must smoke disloyals out of the woodwork
[…]

ie anti-trust—P. won’t stand for it

P. now into ITT case—shldn’t have to be
²¹

Kleindiest’s first move was to call Mitchell. Susie Morrison told Kleindienst the attorney general was in the middle of a meeting and couldn’t be disturbed. Kleindienst threatened to interrupt the meeting unless Mitchell immediately took the private elevator connecting their offices. Minutes later, for the first and only time in their three years of government service together, Mitchell walked into his deputy’s office. “I told him, ‘John, if I’ve got to follow this directive, I’ve got to resign,’” Kleindienst recalled in 1992. McLaren and Griswold, he warned, would also resign. “That fucking Ehrlichman is putting Nixon up to this,” Kleindienst spat. “Just take it easy,” Mitchell replied. At his suggestion, Kleindienst agreed to call McLaren and Griswold into his office and ask them, without explaining why, to seek a second filing extension on the
Grinnell
appeal. That would give Mitchell time to work on the president.
²²

The next day, Justice John Harlan granted Griswold’s request.
²³
Mitchell kept a scheduled appointment with Nixon on April 21. The attorney general’s mission was a delicate one: to persuade the president to revoke his order to Kleindienst, allowing the
Grinnell
appeal to proceed to the Supreme Court, while enabling Nixon to feel as though his forceful assertion of executive authority hadn’t been in vain. “I would like to get some time to talk to you, Mr. President, about this antitrust business,” Mitchell began, “because this is political dynamite.” When Nixon brought up McLaren, the attorney general wisely steered them to the area he knew the president prized most: politics.