The Strong Man: John Mitchell and the Secrets of Watergate (37 page)

To federal prosecutors, Mitchell’s brief call to Casey formed the heart of the crime, epitomized the discreet, businesslike abuse of power they aimed to punish. By all accounts, however, Mitchell, in requesting the meeting for Sears, made no mention of Vesco’s contribution. This exculpatory fact the prosecutors stood on its head: They made it the first obstruction of justice count in Mitchell’s indictment, arguing he had to keep Casey ignorant of the contribution, so as to enlist his aid in quashing the SEC probe.

At 4:30 p.m., Sears entered Casey’s office to find the SEC chairman and his youthful general counsel, Brad Cook, the resident expert on ICC. Sears laid out Vesco’s position: The SEC’s endless subpoenas had far exceeded the original scope of the investigation; the “high emotional feelings and abrasions” between the SEC’s lawyers and Vesco’s own were certain to produce an adverse ruling that Sears did not want to see rubber-stamped by Casey and the other four commissioners. “Well, Mr. Sears, I can assure you of one thing,” Casey replied. “We don’t rubber stamp staff recommendations down here. We consider them very carefully.”

Cook conceded that “fights” and “confrontations” had broken out during Vesco’s depositions. “But there is something that you should know,” Cook continued, “and that is that there is a very good possibility that there is no way that this case can be settled without an injunctive order. A report recommending suit…is a very likely eventuality here…. There is also a possibility in this case that Vesco may be subject to a perjury charge…. Vesco lied when he was hereon deposition, and if Vesco lied, we have to consider the possibility of a criminal referral.”

Sears cannot have been taken entirely by surprise; by his own account, Mitchell had given him an internal memo Cook had written that said all the same things, a full sixty days earlier (another charge Mitchell denied). Still, the New Jersey politician seemed unnerved by Cook’s blunt talk of perjury and criminal referrals. Sears offered to be of help in getting the SEC whatever documents it needed, then looked imploringly to Casey: Did he have the chairman’s assurance Vesco would be permitted another opportunity to plead his case before the filing of any suits or referrals? “Mr. Sears,” Casey repeated icily, “we don’t rubber stamp anything.” The audience was over.
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At CRP headquarters, meanwhile, Maurice Stans called in Hugh Sloan, the CRP treasurer, a young, handsome former White House aide, and gave him a white bank bag containing $200,000 in cash. Stans ordered Sloan to count it, then store it in a safe. According to Sloan, he asked his boss who the donor was. Appearing before the grand jury, Sloan testified that Stans replied: “For the time being, list it under John Mitchell’s name.” Yet a year later, testifying as a government witness at the Mitchell-Stans trial, Sloan claimed that Stans, in his reply, attributed this order to Mitchell himself, and specified the entry should not use Mitchell’s full name. “John Mitchell wants it listed under the initials ‘JM’ for the time being,” Sloan quoted Stans as saying.
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In his ledger, Sloan listed Vesco’s contribution and the initials “JM.” To the prosecutors, Mitchell’s initials represented incontrovertible evidence of corruption. Another witness testified the use of the initials “was based on a telephone conversation [Stans] had with John Mitchell.” But Stans himself, testifying before the grand jury in March 1973, said he only told Sloan to “put [down] Mitchell because it came through his end: Sears.” Mitchell testified that he first discovered his initials appeared alongside the entry for the Vesco contribution in February or March 1973. When he found out, Mitchell testified, he growled at Stans: “What the hell did you ever do that for?” He continued: “Mr. Stans said he didn’t know…. He did not have a rationale for it.”
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Small wonder that Mitchell, asked on the stand if he considered Stans a close friend, replied, “I
believe
so” or that the
New York Times
, observing the interaction between the defendants at their historic trial, reported: “The two men seldom speak.”
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Vesco and Sears paid
another grim visit to Brad Cook in May 1972. If it would end the SEC’s probe, Vesco said, he was willing to commence, in the parlance of the era, the “deVescoization” of ICC. Cook sternly replied that any settlement would have to include an acknowledgment of wrongdoing by Vesco, and an injunction against further violations of federal securities laws. At this, the volatile financier blew his stack. “Your investigation has been going on for a year,” he fumed, “and you have nothing!” When Cook alluded to perjury, Vesco grew angrier: “There is nothing to that! There is no way I’m going to settle the case in a way that will leave open a perjury charge.” Finally, when Cook mentioned criminal referral, Vesco became defiant: “No way, baby!”
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Now knowing the feds considered him a criminal, Vesco soon found himself, for the first and last time, in John Mitchell’s office, where Sears “reintroduced” the two men. “John, this is Bob Vesco,” Sears said. “You met him at my dinner.” After some pleasantries, Vesco retreated to a couch along the perimeter of Mitchell’s office, while the former attorney general spent the next fifteen minutes talking politics with Sears. For all his wealth and grandiose aspirations, his infatuation with Mitchell and hunger for status and respect, Vesco, in this setting, was a zero—reduced to looking on from afar, sitting mute while his elders, masters of electoral realpolitik, conversed on a level beyond his ken.

From Vesco’s perspective, the meeting was a bust: Sears didn’t even broach the SEC issue with Mitchell! But the financier had other cards to play. He put Nixon’s knockabout nephew, Donald Nixon Jr., on the payroll. And he called in a favor from an overseas friend. Since 1969, Vesco had quietly been funneling money to Costa Rica, where his investments, mostly in government bonds, would eventually total an estimated $60 million. Of that money, $2.15 million landed in the accounts of San Cristobal, S.A., a holding company controlled by the country’s aging president, José Figueres Ferrer, aka “Don Pepe.” A vain little tyrant—he stood five-three, got a hair transplant and facelift in his mid-seventies, and once smacked a protester who called him
un hijo de puta
, or “son of a bitch,” saying, “I’ll teach you respect”—Figueres was only too happy to help his rich
gringo
patron when Vesco asked.
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Thus on July 22, 1972, President Figueres wrote to “Your Excellency Richard M. Nixon” saying he was reaching out “in the spirit of good relations which exist between our two countries.” Figueres said Vesco’s largesse “may provide the ingredient that has been lacking in our plans to create…a show piece of democratic development.” Then came the pitch, president to president.

Mr. Vesco has had difficulties with the Securities and Exchange Commission, because of his past association with the I.O.S. Ltd.
Mr. John Mitchell, your former attorney general, is familiar with the matters
. I am concerned that any adverse publicity emanating from the S.E.C. against Mr. Vesco might jeopardize the development of my country…. If we are apprised in time, we may take precautions to counter the adverse effects.

Figueres had not asked Nixon to do anything more than provide advance notice in the event the SEC moved against Vesco; but the implication was plain: If the SEC took down Vesco, Costa Rica’s fledgling democracy might crumble too, leaving only Latin American communists to benefit! Figueres had also dropped Mitchell’s name, insinuating that Nixon’s most trusted confidant supported the Vesco cause. Yet the letter never reached the Oval Office. Vesco later told Sears that proud “Don Pepe” received only a “cryptic, unsatisfactory” response from “some low-level White House staff.” Vesco’s stab at international diplomacy had failed.
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That month, SEC lawyers concluded Vesco and his corporate cronies were guilty of “looting” ICC’s companies on a massive scale: Assets had been shifted, shell companies created, controlling interests, supposedly relinquished, secretly maintained. Where SEC lawyers focused originally on the takeover of IOS and the veracity of Vesco’s sworn statements, they now saw larceny on an unprecedented scale, with investors across the globe losing their savings so Vesco could jet around in his Boeing 707,
The Silver Phyllis
, outfitted with the world’s only airborne sauna and discotheque.
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On September 29, 1972, the SEC summoned Vesco for an October 11 appearance. Vesco immediately suspected the feds were wise to his contribution to CRP, or at least to the unexplained movement of $250,000 in cash. Sensing the end was near, Vesco flew into a rage: “Those bastards would like nothing more than to nail me and the president to the wall together,” he ranted. “There’s no way that I’m going to testify…. It’s going to be blown up like the ITT affair. Nixon may survive some of the other things but this would be the crusher.”

Since suasion and $200,000 in cash hadn’t got him anywhere, the furious financier turned to blackmail. Perhaps the very thing that most imperiled him could prove his salvation. He told Sears: “Get hold of Mitchell and those guys and tell them that they will have that thing quashed or I’ll blow the lid off the whole thing.” Sears left the room “angry” but, still indebted to Vesco, agreed to see what he could do.
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That fall, Mitchell spoke
frequently with Sears, but as always, their recollections differed sharply. Sears claimed he told Mitchell that if Vesco were forced to testify in the closing days of the campaign, it would have a “devastating” effect on Nixon’s electoral fortunes. Mitchell supposedly agreed, asking: “Why would the SEC be interested in where the money went? Their investigation is about where Vesco is getting his money from.” Sears said he and Mitchell pondered how to delay Vesco’s testimony until after the election. Mitchell swore he had “no recollection of ever discussing a subpoena to Robert Vesco during that time frame at all.” Had Sears asked him to “quash” or “postpone” the subpoena? No, Mitchell said.
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As it happened, Vesco’s subpoena was adjourned, but not past Election Day. So informed by Sears, the former attorney general—who already knew from friends in government how dire Vesco’s situation was—mumbled vaguely that he hoped it would all work out. When Sears said Vesco would likely plead the Fifth, Mitchell supposedly wondered whether another adjournment could be secured. “Do you think that is possible?” Sears recalled asking. “Well, I would certainly hope so,” he quoted Mitchell as saying, “if they have any concern for the president of the United States.”
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On October 18, Vesco, on the advice of his high-priced counsel, Arthur Liman, pleaded the Fifth Amendment at his SEC deposition. “I hope the hell I make them happy,” Vesco said of Nixon and Mitchell, adding his refusal to testify should be considered “an additional contribution” to the campaign. Within forty-eight hours, Sears notified a “relieved” Mitchell. “Please tell Bob that I am grateful,” Sears recalled Mitchell saying. But other ICC employees were also scheduled to testify. Sears said he again called Mitchell, and pleaded: “What, if anything, do you think can be done?” Mitchell, according to Sears, replied, “Well, don’t tell Vesco, but this time I will go through the White House. I am going to talk to John Dean.”

The action Mitchell supposedly took next—calling the White House counsel and asking him to contact Bill Casey, with the goal of getting the ICC subpoenas postponed until after Election Day—later formed obstruction of justice Counts One and Four in Mitchell’s indictment. And Mitchell’s answers before the grand jury to questions about the ICC subpoenas formed three of the five perjury counts he later faced in the affair. Count Seven charged Mitchell with lying to the grand jury when he claimed he and Sears had never discussed Vesco’s subpoena or blackmail threat. Count Eight charged Mitchell with lying when he told the grand jury he never plotted with Sears about how to delay or prevent the other four ICC employees from testifying. While Mitchell acknowledged he had “a number of conversations” with Sears about the employees’ impending depositions, he claimed these talks were limited to Sears telling him the employees had retained private counsel. The same count alleged Mitchell lied when he was asked if he spoke to John Dean about the ICC subpoenas, and he flatly told the grand jury: “I didn’t talk to John Dean about any subpoenas.” Count Nine charged Mitchell also lied to the grand jury when he denied having asked Dean to contact Casey.
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