Memorable World History/Authors

Watergate Scandal (Part II)

Cover-up and its unraveling

Within hours of the burglars' arrest, the FBI discovered E. Howard Hunt's name in Barker and Martínez's address books. Nixon administration officials were concerned because Hunt and Liddy were also involved in a separate secret activity known as the "White House Plumbers", which was established to stop security "leaks" and investigate other sensitive security matters. Dean later testified that top Nixon aide John Ehrlichman ordered him to "deep six" the contents of Howard Hunt's White House safe. Ehrlichman subsequently denied this. In the end, Dean and the FBI's Acting Director L. Patrick Gray (in separate operations) destroyed the evidence from Hunt's safe.

Nixon's own reaction to the break-in, at least initially, was one of skepticism. Watergate prosecutor James Neal was sure that Nixon had not known in advance of the break-in. As evidence, he cited a conversation taped on June 23 between the President and his Chief of Staff, H. R. Haldeman, in which Nixon asked, "Who was the asshole that did?" However, Nixon subsequently ordered Haldeman to have the CIA block the FBI's investigation into the source of the funding for the burglary.

A few days later, Nixon's Press Secretary, Ron Ziegler, described the event as "a third-rate burglary attempt". On August 29, at a news conference, Nixon stated that Dean had conducted a thorough investigation of the incident, when Dean had actually not conducted any investigations at all. Nixon furthermore said, "I can say categorically that ... no one in the White House staff, no one in this Administration, presently employed, was involved in this very bizarre incident." On September 15, Nixon congratulated Dean, saying, "The way you've handled it, it seems to me, has been very skillful, because you—putting your fingers in the dikes every time that leaks have sprung here and sprung there."

Money trail

On June 19, 1972, the press reported that one of the Watergate burglars was a Republican Party security aide.[30] Former Attorney General John Mitchell, who was then the head of the CRP, denied any involvement with the Watergate break-in. He also disavowed any knowledge whatsoever of the five burglars. On August 1, a $25,000 (approximately $150,000 in 2019 dollars) cashier's check was found to have been deposited in the US and Mexican bank accounts of one of the Watergate burglars, Bernard Barker. Made out to the Finance Committee of the Committee to Reelect the President, the check was a 1972 campaign donation by Kenneth H. Dahlberg. This money (and several other checks which had been lawfully donated to the CRP) had been directly used to finance the burglary/wiretapping team's expenses, hardware, and supplies.

Mr. Barker's multiple national and international businesses all had separate bank accounts, which he was found to have attempted to use to disguise the true origin of the money being paid to the burglars. The donor's checks demonstrated the burglars' direct link to the finance committee of the CRP.

Donations totaling $86,000 ($515,000 today) were made by individuals who were deluded that they were making private donations by certified and cashier's checks for the president's re-election. Investigators' examination of the bank records of a Miami company run by Watergate burglar Barker revealed an account controlled by him personally had deposited a check and then transferred it (through the Federal Reserve Check Clearing System).

The banks that had originated the checks were keen to ensure the depository institution used by Barker had acted properly in ensuring the checks had been received and endorsed by the check's payee, before its acceptance for deposit in Bernard Barker's account. Only in this way would the issuing banks not be held liable for the unauthorized and improper release of funds from their customers' accounts.

The investigation by the FBI, which cleared Barker's bank of fiduciary malfeasance, led to the direct implication of members of the CRP, to whom the checks had been delivered. Those individuals were the Committee bookkeeper and its treasurer, Hugh Sloan.

As a private organization, the committee followed the normal business practice in allowing only duly authorized individuals to accept and endorse checks on behalf of the Committee. No financial institution could accept or process a check on behalf of the committee unless a duly authorized individual endorsed it. The checks deposited into Barker's bank account were endorsed by Committee treasurer Hugh Sloan, who was authorized by the Finance Committee. However, once Sloan had endorsed a check made payable to the Committee, he had a legal and fiduciary responsibility to see that the check was deposited only into the accounts named on the check. Sloan failed to do that. When confronted with the potential charge of federal bank fraud, he revealed that committee deputy director Jeb Magruder and finance director Maurice Stans had directed him to give the money to G. Gordon Liddy.

Liddy, in turn, gave the money to Barker and attempted to hide its origin. Barker tried to disguise the funds by depositing them into accounts in banks outside of the United States. Unbeknownst to Barker, Liddy, and Sloan, the complete record of all such transactions was held for roughly six months. Barker's use of foreign banks in April and May 1972, to deposit checks and withdraw the funds via cashier's checks and money orders, resulted in the banks keeping the entire transaction records until October and November 1972.

All five Watergate burglars were directly or indirectly tied to the 1972 CRP, thus causing Judge Sirica to suspect a conspiracy involving higher-echelon government officials.

On September 29, 1972, the press reported that John Mitchell, while serving as Attorney General, controlled a secret Republican fund used to finance intelligence-gathering against the Democrats. On October 10, Bob Woodward and Carl Bernstein reported that the FBI had determined that the Watergate break-in was part of a massive campaign of political spying and sabotage on behalf of the Nixon re-election committee. Despite these revelations, Nixon's campaign was never seriously jeopardized; on November 7, the President was re-elected in one of the biggest landslides in American political history.