The Strong Man: John Mitchell and the Secrets of Watergate (38 page)

On November 2, 1972, five days before Election Day, Laurence Richardson and three other ICC employees pleaded the Fifth to all questions posed by SEC lawyers. Sears claimed he apprised Mitchell of this and the former attorney general replied: “Well, I’m sure relieved.” Remembering the same conversation, Mitchell said his only response was: “That’s fine.”
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Three weeks later, the SEC filed a formal complaint in U.S. District Court, Southern District of New York, charging Vesco and twenty-one associates with diverting more than $224 million from four offshore mutual funds into two Bahamas and Luxembourg banks controlled by Vesco. Calculated imprecision in the complaint’s wording fed a myth that Vesco had simply absconded with the massive sums, equivalent to $9.5 billion in current figures. However, as Vesco biographer Arthur Herzog later noted, the complaint never said the proceeds from the $224 million in securities that were indisputably sold were “stolen” instead the complaint used words like “diverted” or “spirited.” “The SEC counted the same figures again and again in reaching the total,” said one lawyer representing IOS shareholders. Since precise figures in Vesco’s case were always hard to come by, it was somewhat fitting that by 1984, a dedicated band of lawyers, accountants, and bankruptcy trustees had “recovered” $500 million in assets supposedly misappropriated by Vesco—more than double the amount the SEC originally charged him with “diverting,” but still $100 million shy of what he was believed to have stashed away at that point.
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Early 1973 saw all the protagonists—except Mitchell—scurrying for cover. Vesco struggled to persuade the ICC board to pay his legal fees. Sears sat for two days of sworn questioning by SEC lawyers. A federal grand jury in New York began probing Vesco’s cash contribution, which CRP returned after its disclosure in a lawsuit filed by Common Cause, the liberal public advocacy group. Laurence Richardson, locked in a “dogfight” with Vesco for control of the ICC board, made the first of seventy-nine appearances before the U.S. attorney’s office and grand jury. Of Vesco, Mitchell had finally had his fill, exclaiming to Sears: “The bastard is nothing but a petty thief!”
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In late February, Mitchell got a call from his successor, Attorney General Richard Kleindienst. A criminal investigation into Vesco’s dealings was under way, Kleindienst explained; would Mitchell take a telephone call from Whitney North Seymour Jr., U.S. attorney for the Southern District of New York? Of course, Mitchell answered. Shortly thereafter, Seymour asked if the former attorney general would consent to being questioned “informally” by two of Seymour’s assistants. Of course, Mitchell said.

The following day, on February 27, 1973, Assistant U.S. Attorney John Wing and an aide, David Brodsky, arrived in Mitchell’s New York office. Brodsky said later he thought Mitchell’s demeanor was “nervous.” However, Mitchell was not so nervous as to deny the prosecutors full access to his logs and diaries for the years 1971–72. After a quick check with Kleindienst, to confirm there was no impropriety in turning over internal documents generated by an attorney general, Mitchell handed the records over.

On March 6, Harry Sears made the first of his ten grand jury appearances in New York. With the handwriting plainly visible on the wall, Vesco fled the country. The world now had its first “fugitive financier.”
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Mitchell, too, was a
hunted man. Almost in parallel to the Vesco affair, the Watergate scandal, a wholly separate, though equally Byzantine, set of events, involving a few of the same players—Dean, Ehrlichman, Stans—had gestated and begun to explode. By March 1973, as Mitchell limped along Wall Street, he more likely worried about Watergate, and the collapse of the Nixon presidency, than about the travels and travails of Robert Vesco.

That was soon to change. On March 20, Assistant U.S. Attorney James Rayhill called Mitchell’s office, saying there were some matters the grand jury wanted Mitchell to help resolve. Rayhill arranged for the attorney general to be picked up by a government limousine outside his Broad Street office. When Mitchell got in the car, he found Rayhill seated beside him, offering pleasantries about the weather. Soon they arrived at the federal courthouse in Foley Square, where Mitchell was driven through the judges’ private entrance, taken up to the grand jury via the judges’ private elevator. Rayhill’s matter-of-fact tone and extraordinary deference had the desired effect of lulling his target into complacency. As Mitchell’s lawyer John Sprizzo later noted at trial, “It is very unusual to chauffeur a man who is under suspicion to a grand jury on two occasions without alerting him on two occasions that he is under suspicion.”
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Seated before the grand jurors, the former attorney general was read his rights and questioned on a wide range of subjects relating to Vesco, Sears, Casey, and the SEC. That night, according to John Dean, Mitchell told him the prosecutors had given him “a hell of a grilling.” “Those little bastards in the Southern District were all over me,” Dean quoted Mitchell as saying. According to Dean, Mitchell urged him to call Kleindienst and find out what the hell was going on. The next day, Dean raised the case in the Oval Office, during the counsel’s infamous “cancer on the presidency” meeting with Nixon.

DEAN:
We have a runaway grand jury up in the Southern District. They are after Mitchell and Stans on some sort of bribe or influence peddling with Vesco. They are also going to try to drag Ehrlichman into that. Apparently Ehrlichman had some meetings with Vesco. Also, Don Nixon, Jr. [the president’s nephew] came in to see John [Ehrlichman] a couple of times about the problem.

NIXON:
[…] Ehrlichman never did anything for Vesco?

DEAN:
No one at the White House has done anything for Vesco.
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In ensuing months, drowning in scandal, Nixon marveled that the Vesco case occasioned any controversy at all. “Vesco didn’t make any money,” he cried. “We’re prosecuting him!” “Vesco is a crook,” the president would say. “I never met the man.”
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On April 24, Rayhill again picked Mitchell up outside 20 Broad Street. This time, reporters and cameramen surrounded the judges’ entrance, so Rayhill dropped Mitchell off at a nearby subway stop connected to the courthouse, then met him inside the courthouse basement. But there was no avoiding the news media, which had been tipped off. Reporters and photographers battered Mitchell upon his arrival. Responding to shouted questions, the former attorney general depicted himself as largely ignorant of Vesco and his money. “There was a contribution made,” Mitchell acknowledged. “You’ll have to ask Mr. Stans about that. I’m not familiar with the transactions—”
Did you know about it at the time?
“I learned about it afterwards.” Three and a half hours later, through with the grand jury, Mitchell was in no mood to entertain more questions. He told reporters only that he “testified fully and frankly and fearlessly.”
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Curious about the increasing
frequency—and tension—of Mitchell’s after-hours meetings with lawyers, Martha Mitchell began asking her husband what was going on. “Stans is in trouble” was all he would say. Then one day, Mitchell reportedly asked his wife: “Do you have dresses to wear to my trial?” Martha stared in disbelief, bolted from the room, and, as she put it, “cried and cried and cried.” She later recalled her husband’s deteriorating state over that spring and summer:

He wouldn’t go out. He ate at his desk. He let his hair grow and wouldn’t shave. He wanted
me
to cut his hair. Finally, I got a non-English-speaking barber to come in. John didn’t want to see anyone. He wouldn’t give me my phone calls. He’d say I was out. And if I answered, he’d listen. He was drinking and taking tranquilizers. There were nights our daughter, Marty, and I, and the maid, had to drag him to bed.
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Up to the morning it happened, Mitchell dismissed as “ridiculous” the mounting newspaper accounts saying he would soon be indicted. On May 10, he proceeded with a planned appearance before investigators for the Senate Watergate committee, traveling to Washington for the interview. Not until he reached the office of his attorney William Hundley did Mitchell learn he had been indicted by the Vesco grand jury in New York. “He appeared to be sick,” said an associate present at the time. He “immediately went into the bathroom…then emerged pale and haggard.”
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The forty-six-page indictment charged Mitchell, Stans, Vesco, and Sears with attempting to quash the SEC probe into Vesco’s affairs, then lying to the grand jury about it. If convicted, Mitchell and Stans faced possible prison terms of fifty years and fines of $75,000 each. Leaving for Washington that day, Mitchell silently fought his way through hordes of reporters and camera crews clustered outside his apartment building and disappeared into his limousine. After his session with the Senate investigators, he told reporters the indictment was one of the most “irresponsible” things he’d ever seen. “There’s no wrongdoing on my part or on the part of any of those people that I know of, and I’m sure that in an appropriate judicial proceeding, I’ll be vindicated.”

Eleven days later, Mitchell showed up for arraignment. The former head of the Municipal Bond Club and sixty-seventh attorney general of the United States was fingerprinted, had his mug shot taken, and entered a formal plea. He stood before Judge John Cannella and said, without emotion: “I am prepared, Your Honor, to plead ‘not guilty.’” Do you so plead? Cannella asked. “I so plead.” After Stans repeated the process, prosecutor John Wing asked Cannella to set bail at $1,000 for each defendant. “That’s ludicrous!” Cannella cried. “These men had to be investigated by the FBI before they held their government jobs.” He released both without bail. As his limousine screeched away, Mitchell was asked the inevitable, lamentable question: “How do you feel?” “I’ve been better,” he replied.
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Heralded as a “trial
of the century,” the Mitchell-Stans case has since been forgotten. Although it marked the first and only trial of two former cabinet members; the first time the Nixon tapes were played in public; the first time that John Dean, the president’s chief accuser in Watergate, testified in open court and faced rigorous cross-examination; and the first prosecution of senior Nixon administration officials, not a single comprehensive account of the Mitchell-Stans trial has been written since the spring of 1974, when its every twist made headline news. To some extent,
U.S. v. Mitchell-Stans
was simply overshadowed by its Washington cousin,
U.S. v. Mitchell
, the Watergate cover-up trial, held six months later. Mostly, however, the Mitchell-Stans trial vanished from memory because its verdict did not fit the story line of the times: All the president’s men were supposed to be guilty of all things.

After months of delay, the trial began shortly after 9:00 a.m. on February 19, 1974, when Mitchell’s black Chrysler Imperial pulled up at Foley Square. He ambled up the courthouse steps, swarmed by reporters. Stans and his retinue followed several steps behind, unrecognized and unmolested. Breaking free of the media crush at the courthouse door, Mitchell and his attorneys took the elevator up to Room 905, a small, oak-paneled courtroom. At 11:57 a.m., a court marshal pounded the door and all rose as Judge Lee Gagliardi entered.
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