The Strong Man: John Mitchell and the Secrets of Watergate (7 page)

Only after 1960 did
Mitchell’s earnings place him among the nation’s most elite lawyers. That year, he reunited with his old friend, Nelson Rockefeller, who two years earlier had been elected governor of New York. As Rockefeller prepared to assume office in Albany, he received a briefing from aides who estimated that in order to provide adequate housing for New York State by 1975, it would be necessary to construct 125,000 units each year—even though the previous decade had seen only 90,000 units built each year. Tasked by Rockefeller to develop ideas, an advisory committee recommended in June 1959 that he employ essentially the same concept that Mitchell had devised for HEW’s doomed school-construction program five years earlier. The report suggested Rockefeller propose legislation creating a semi-autonomous state entity—aptly named the New York State Housing Finance Agency (HFA)—that could underwrite New York’s unprecedented building boom.
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Rockefeller sent his housing chief, James Gaynor, to reenlist Mitchell, whose expertise was to prove essential both in drafting the legislation creating HFA, and in launching the nascent agency’s borrowing program. Gaynor did not come away disappointed. “What I found in Mitchell,” he told a reporter in 1970, “unlike too many lawyers, he was able to come up with a solution within the law…[A]lmost immediately he could give you an answer that turned out to be correct.”
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Once again, Mitchell’s concept—sewn into the legislation creating HFA—was to establish a capital reserve fund whose sole purpose was to secure the bonds HFA issued. The money in this fund, accumulated through rents, mortgage repayments, and other revenue generated by HFA housing projects, would always equal one year’s debt service, or the total sum of the principal and interest on the agency’s outstanding bond offerings. If for some reason HFA executives foresaw a shortfall in revenues endangering the fund, the agency’s chairman was required by law to alert the governor, who would, in turn, during the next legislative session, notify state lawmakers. Once again, the legislature was not
legally
obligated to replenish the missing funds, but it was, as Mitchell later said, “incumbent” on the lawmakers to do so. For the state, then, it was a moral obligation, and regarded as such on Wall Street. If the legislature failed to restore the fund, the state’s ability to borrow on “full faith and credit” would suffer accordingly. As it happened, HFA’s projects never suffered a revenue shortfall, and New York State was never called upon to honor its moral obligation to back up HFA’s bonds.
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In April 1960, Rockefeller signed into law the measure creating HFA, with an initial mandate for the agency to float $500 million in middle-income-housing bonds. The following year, the agency’s first offering secured a high rating by Standard and Poor’s, the premier investment ratings agency, and garnered an interest rate from Wall Street so favorable it was only .33 percent higher than offerings backed by the state’s full faith and credit. The governor hailed Mitchell’s concept in typically grandiose terms: “The greatest system ever invented!”
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So it seemed at the dawn of the 1960s, when municipalities across the country aimed to upgrade their prewar housing stock, medical centers, campuses, courts, and prisons to meet the standards of the space age. What made the moral obligation concept so attractive to politicians like Rockefeller was that it enabled them to issue bonds for costly state projects without having to submit those projects to skeptical voters in statewide referenda. Under Mitchell’s plan, so long as the state agencies issuing bonds were not borrowing on the “full faith and credit” of the state, only pledging a “moral obligation” to make good on defaults, the states could undertake massive spending projects—
without
exceeding the debt ceilings set in state constitutions, an act that usually required a ballot initiative for approval. Asked if his invention was a creature of “political elitism,” because it bypassed voters, Mitchell shot back: “That’s exactly the purpose of them.”
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Governors and mayors everywhere jumped on the bandwagon. Semi-autonomous agencies began sprouting up across the country, virtually all of them using Mitchell’s technique and Mitchell himself, or his law firm, as bond counsel. New Jersey was the first state to ape New York, with large and medium-sized cities like Camden and Atlantic City pursuing major urban renewal projects; lesser venues like Neptune, Pennsauken, and Burlington County put the bonds toward items as small as voting machines. Then came Florida, where the state retained Mitchell’s firm to help build a turnpike; jails and courthouses in Broward and Marion Counties; roads and bridges in Pinellas and Manatee Counties; an electricity grid in Jacksonville; an office complex in Tallahassee; water and sewer systems for Boca Raton. Forty states followed suit; the fees poured in. Mitchell traversed the country, meeting politicians and judges and making himself rich.
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Exposed to elected officials across America, Mitchell metamorphosed into a certain kind of political animal: a bipartisan power broker unfazed by backroom norms. Among lawyers he belonged to “that special breed of practitioner who operates best behind closed doors in city halls and statehouses across the land, clinching deals with a handshake and a wink.” “He wasn’t the kind of politician who goes out there and gets himself elected to office,” said an intimate. “He was the kind of politician who’s the kingmaker.”
BusinessWeek
reported Mitchell was on a first-name basis with as many elected officials as any full-time politician in America.
²⁶

Sway in financial circles eased his way in political circles, and vice versa. Asked once if he could get investment rating agencies to change their view of a bond issue with a single telephone call, Mitchell deadpanned: “It wasn’t quite that easy. It was all done with pure, cold, hard logic. But frequently their consideration of matters were not sufficiently in depth to make a proper judgment and so, through a little further education…the ratings were improved.”
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Thus on Mitchell’s word hung the fortunes of scores of mayors and governors accountable to the American people.

No politician clung more tenaciously to Mitchell’s star than Rockefeller. Yet the depth of their relationship was later commonly exaggerated, both by conservatives—who distrusted Mitchell’s inclination toward pragmatic compromise and feared its influence on President Nixon—and on the left, where moral-obligation bonds were seen as stealthy instruments of fascism. Even Rockefeller was not above taking a little license. The
Wall Street Journal
once reported that Nixon, shortly after being elected president, encountered Rockefeller at a social function and tried to introduce him to John Mitchell. “Don’t you know?” Rockefeller asked Nixon, incredulous and condescending. “John is
my
lawyer.”
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By the mid-1960s, Mitchell
was living the good life, joined by his new wife, Martha, their baby daughter—Martha Elizabeth, or “Marty,” born in 1961—and Martha’s son, Jay, from her previous marriage. In 1963, Caldwell, Trimble, and Mitchell (Marshall’s name had been removed from the shingle) traded up from lower Broadway to swank new digs at Chase Manhattan Plaza. The next year, the Mitchells left their ten-acre spread in Norwalk, Connecticut, for an enormous Georgian-style brick home perched along the seventeenth fairway of the Apawamis Country Club golf course in Rye, New York. With his brother, Robert, as his attorney, Mitchell purchased the Rye home for $150,000 (nearly $900,000 in current figures); when he left five years later to serve in government, Mitchell sold it for twice as much. In 1966, Mitchell achieved the honor of becoming one of only two lawyers ever to head the Municipal Bond Club, a privilege normally reserved for members of New York’s banking elite. “Mitchell was a man with whom men liked to work, who inspired loyalty among his associates,” an aide remembered. “Men with whom he had worked on legal matters invariably, it seemed, became his devoted friends.”
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If personal magnetism was one key ingredient in Mitchell’s success, another was his proximity to political power—or, more accurately, his indispensability to those holding power. Equally helpful was his essentially apolitical outlook. “He’d seen the system work too often not to believe in it,” observed Lewis Lapham, “too many hospitals built, too many roads and schools, and if it was imperfect, at least it accomplished those things and provided the most good for the greatest number.” Mitchell knew the system was bipartisan, that injecting his own politics was bad for business—an approach he also tried years later to bring to Justice. Only once was Mitchell asked point-blank—by Barbara Coleman, host of
Here’s Barbara,
a local Washington TV show—to define his principles.

COLEMAN:
It sounds like you believe in the philosophy of Emerson or Thoreau. What, what—what is your philosophy? What’s important to you?

MITCHELL:
Pragmatism.
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Yet Mitchell’s proximity and indispensability to the powerful would prove a double-edged sword. On December 31, 1966, his law firm merged with that of a man who, like Nelson Rockefeller, also saw John Mitchell as indispensable, a man who—unlike Rockefeller—succeeded in attaining ultimate political power in America, and in whose fall from power lay the seeds of Mitchell’s own consummate ruin.

THE HEAVYWEIGHT

I used to have a very good reputation until I ran into that fellow, Nixon.

—John Mitchell, 1969
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“MY HUSBAND’S GREATEST
desire,” Martha Mitchell once lamented, after Watergate wrecked her life, “was to build the biggest law firm in the country.” That fantasy edged toward reality on New Year’s Eve 1966, when Mitchell signed—three lines below Richard Nixon—the contract that legally merged their law firms. Nixon Mudge Rose Guthrie Alexander and Mitchell immediately boasted 120 staff lawyers and five floors of posh offices at 20 Broad Street, in the shadow of the New York Stock Exchange. A Mudge Rose partner remembered the merger following an intense “wooing” of Mitchell, with Nixon as the closer. Mitchell was thought by some to be power hungry. “John Mitchell, personally, wanted to be close to Richard Nixon,” recalled partner Tom Evans. “That was a major motivator in his bringing his firm into this firm.”
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In later years, a myth arose that Mitchell, Nixon, and their wives became close friends. At parties in the Mitchells’ Rye home, went one account, Nixon “would play organ-piano duets with Martha Mitchell, and sing a bit…” In fact, only once did the Nixons visit the Mitchells in Rye—at a Southern-themed party Martha threw to celebrate the merger, and at which Nixon did, indeed, play piano—and only once did the Mitchells ever socialize at the Nixons’ Fifth Avenue apartment, at a law firm Christmas party. At neither event were the two couples alone with each other.
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“When Dick Nixon first came back here to practice law in my firm,” Mitchell told a friend in 1968, “he was a beaten man.” The native Californian’s path to Wall Street had been rocky and jagged. Fueled by a peculiar mixture of intellectual brilliance and seething class envy, principled anti-communism and naked careerism, Nixon had vaulted to the highest stratum of American political life with a speed and polarizing effect unseen before or since. As a young lawyer, navy veteran, and congressman representing Whittier, California, in the forties, he campaigned ferociously against the putative communist sympathies of his Democratic opponents and pressed for the prosecution of Alger Hiss, a favorite son of Franklin Roosevelt’s New Dealers, as a Soviet spy. The congressman skillfully used his perch on the House Committee on Un-American Activities (HUAC) and the country’s emerging mass media to attain national recognition and ascend to the Senate. There Nixon cast himself as a palatable alternative to the far less disciplined, more reckless and toxic anti-communist crusader, Senator Joseph McCarthy; more quietly, the Californian intervened to ensure early civil rights bills made it onto the Senate floor.

Tapped by Dwight Eisenhower to serve as his vice presidential running mate in 1952, Nixon soon confronted unfounded ethics charges, which he rebutted with a dramatic prime-time address on nationwide television: the “Checkers” speech, so named because of its author’s corny, yet canny, evocation of his daughters’ beloved cocker spaniel. Simultaneously an appeal to average Americans and an oblique challenge to General Eisenhower’s manliness in the political arena, the Checkers speech marked an innovative use of the new medium of television and saved Nixon’s spot on the GOP ticket. As vice president over the next eight years, he traveled widely, strengthening his grasp of foreign policy and elevating the office itself. In tense encounters with Soviet premier Nikita Khrushchev and anti-American rioters in Venezuela, and then again when Eisenhower was temporarily incapacitated by a heart attack, Nixon kept his poise and drew applause, even from opponents, for his erect bearing and coolness under fire.

Yet the estrangement from Eisenhower continued (he “saw DDE alone about 6 times in the whole deal,” Nixon would later tell H. R. Haldeman); and when Nixon ran for president himself, against John F. Kennedy in 1960, Eisenhower, pressed at the height of the campaign to name one major idea of Nixon’s that he had adopted, snapped before concluding a news conference: “If you give me a week, I might think of one. I don’t remember.” As a world-class debater, experienced television performer, and better-traveled candidate, the vice president should, by all rights, have enjoyed a decided advantage in televised debates against Kennedy; but the “cool” medium favored the handsomer, more relaxed senator from Massachusetts, and served to even the playing field between them. Nixon’s loss on election night was both heartbreakingly close and very likely the result of voter fraud in swing states.

Even more humiliating, Nixon lost by a decisive margin when he sought, two years later, to reestablish his political base with a run for the governorship of California. Flush with embarrassment and the one or two drinks it took for him to exhibit the effects of intoxication, Nixon capped his electoral defeat in the wee hours of the morning by angrily confronting the news media, which he had always regarded as antagonistic, with a shrill cry of self-immolation: “For sixteen years, ever since the Hiss case, you’ve had a lot of fun, a lot of fun. You’ve had an opportunity to attack me, and I think I’ve given as good as I’ve taken…. As I leave you, I want you to know: Just think how much you’re going to be missing. You won’t have Nixon to kick around anymore. Because gentlemen, this is my last press conference.”

Now Nixon had come East, to New York, to lick his wounds, make money, and run what he called “the fast track.” “‘Fast track’ was a word [
sic
] he repeatedly used,” recalled Nixon’s aide and biographer, Stephen Hess. “For him, New York was the place where people worked harder, were smarter and became more successful than anyplace else. He figured he would get on that fast track himself.” Nobody more epitomized this success in his eyes than John Mitchell. William Safire, a public relations consultant who had known Nixon since 1959, keenly observed Nixon’s early interaction with Mitchell:

Mitchell was a successful New York lawyer, a front-runner on what Nixon liked to call the “fastest track of all.”…Easy to rely on, hard to get, untrammeled by past defeat and with no commitments to other candidates on the national scene, Mitchell became Nixon’s most sought-after trophy. And unlike most of the men Nixon had been attracting…Mitchell was tough…. It was Mitchell whom Nixon went to for answers; he had a way of getting to the nib of a problem and then laying out alternative routes to the solution, proposing his recommendation, and then—this is where he left many politicians behind—picking up the telephone and making something happen…. John Mitchell was the rock upon which Nixon built his church.
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What Nixon prized in his new friend, perhaps above all else, was that Mitchell, while not born to the upper class, moved easily among its inhabitants, like the Rockefellers, inspiring their respect and confidence and making tons of money, yet still retained at day’s end, Scotch in hand, a bemused blue-collar contempt for their pretensions. Where Nixon simmered with resentment toward the East Coast establishment, scorning and craving its approval, Mitchell exuded indifference. “I have no use for the New York line,” he once told a reporter, his casual dismissal of the privileged class he had swiftly joined reflecting the confidence of a true self-made man—something Richard Nixon, with his tangled psychology and shaky finances, could never be.
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Nixon was in awe of Mitchell. “I’ve found the heavyweight!” he exclaimed to William Safire at the beginning of 1967. “Mitchell was the teacher and Nixon was the student,” said one aide, who observed them together both before and after Nixon won the presidency. Despite being eight months younger than Nixon, Mitchell seemed older, more mature, more self-possessed. Even after he became president, Nixon would steal glances at the silent, pipe-puffing Mitchell during cabinet meetings, seeking some sign of approval—a nod or grunt—suggesting Nixon should continue. “Mitchell was really very much the station master of those Cabinet meetings,” recalled Donald Santarelli, an aide to the attorney general. “Nixon would keep an eye on him, and if Mitchell [was] agitated, he would jiggle or puff on his pipe with some vigor. Nixon would get the signal and switch subjects, or terminate that line of conversation. If Mitchell looked serene—and that was really the only word for it—Nixon would go on.”
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In a 1971 interview, Mitchell sized up the president’s personality for columnist Frank van der Linden: “Nixon is a tough cookie. The thing that has impressed me most about him is how he handles the crises. He does not get into an uproar, but calmly goes on to the next problem, not chewing the rug or climbing the wall.” Certainly, Mitchell shared Nixon’s contempt for the news media. He told van der Linden: “I’m impressed, too, because [Nixon] is not side-tracked by minutiae but keeps his eye on the big target, not the TV bulletin. One thing that makes the editorial writers so damned mad is that he ignores them. They needle him, but he won’t jump.”
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Of course, White House documents and tapes later revealed almost the complete opposite of everything Mitchell said: that Nixon never put the resentments of the early sixties behind him; that he frequently flew into uproars, during and between crises; that he seldom moved breezily on to the next problem but chewed the same ones over and over again, often to no discernible resolution; that he got sidetracked by minutiae, such as the placement of end tables in the East Wing and wine selection for state dinners, every day of his presidency; and that, most acutely, far from ignoring the needles of the press, Nixon literally obsessed over them, spent hours dictating punitive memoranda in response to them, was driven quite near insane by them.
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Beyond putting the best public face on his boss, Mitchell was likely having a bit of sport with van der Linden, as he’d had with the
Newsday
reporter who inquired about his childhood, baldly propounding things he knew to be untrue purely for the perverse pleasure of making fools of reporters. A series of private remarks later reported publicly, some heretofore unpublished, reveal Mitchell harbored a far different view of Richard Nixon than his comments to van der Linden implied. Out of earshot, Mitchell derisively referred to Nixon as “Milhous”—the middle name Nixon loathed so much he banished even the letter
M
from his press releases and gravestone. Senator Howard Baker never forgot what Mitchell said when Baker introduced him to his wife at the 1968 Republican National Convention. “Oh, I’ve heard of you,” Mrs. Baker said cheerfully. “You are in Mr. Nixon’s law firm.” “No, madam,” Mitchell replied pointedly. “Mr. Nixon has joined
my
law firm.”
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Mitchell’s remarks were even more pointed shortly after he assumed control over Nixon’s ’68 campaign, when a group of Republican congressmen summoned Mitchell for a luncheon on Capitol Hill.
What business
, the lawmakers wanted to know,
did a bond lawyer have running Richard Nixon’s campaign?
“I’m the only man,” replied Mitchell, “who can say ‘no’ to Richard Nixon. I’ve made more money in the practice of law than Nixon, brought more clients into the firm, can hold my own in argument with him and, as far as I’m concerned, I can deal with him as an equal.”
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