The Arrogance of Power (96 page)

6.
See chapter 6. The Nixon-Cohen story was leaked to the columnist Drew Pearson in 1962, but he did not use it until 1968.

7.
The author has been in touch with this source for nearly twenty years. Cross-checks have confirmed his background and expertise, and the author has come to believe he is a man of integrity. Professional concerns aside, he shuns publicity.

8.
Referring to taps conducted by the FBI (as distinct from freelance eavesdroppers), Nixon told Kissinger in 1973: “Bobby Kennedy was the greatest tapper of all. . . . Hoover told me . . . ‘Bobby Kennedy had me tapping everybody.' I think, incidentally, I'm on that list.” This is one of many such references to Democratic bugging, including Nixon's insistence—again citing J. Edgar Hoover—that his campaign plane had been bugged in 1968. (“greatest tapper”: June 1, 1973, entry,
AOP,
p. 561, and see ibid., p. 92; 1968 campaign plane: e.g., ibid., p. 198.)

9.
The late Jack Tobin, whom the author knew, was a skilled investigative reporter, working throughout that period, with colleague Gene Blake, on a
Times-Mirror
probe of Teamsters Union leader Hoffa's West Coast activities, in particular Hoffa's abuse of the union pension fund. Nixon's home purchase had been the lead to the
Times
story of May 17, 1962. The very sight of Tobin, when they met again years later at an airport, triggered another outburst of shouting and swearing by Pat.

10.
The information was omitted from
The Final Days,
probably because the reporters had insufficient sources on the matter at that time. Scott Armstrong, who worked both as a staffer on the Ervin Committee and on research for
The Final Days,
said in a 1980 interview that he too had been told that “Nixon beat Pat up.” (Ints. Bob Woodward, Carl Bernstein, and David Obst, and notes of int. Scott Armstrong by FB, FBP.)

11.
Sears did not get along with Attorney General John Mitchell, who apparently believed he leaked information to the press. He decided to leave the White House after only nine months, in October 1969. It later emerged that Sears was wiretapped and surveilled during that period, probably because of Mitchell's suspicions. (Ehrlichman, op. cit., p. 27, n; Wise,
American Police State,
op. cit., p. 56–.)

12.
The contributor was Francis Kellogg, a mining magnate. Washington lobbyist Robert Winter-Berger recalled accompanying Taylor to Kellogg's office and collecting sixty-five thousand dollars in cash; Taylor said forty-five thousand dollars of it was going directly to Nixon. Kellogg wanted an ambassadorship in Africa but made do with a post as special assistant to the secretary of state for refugee and migration affairs, which reportedly carried an ambassadorial title. (Winter-Berger, op. cit., p. 249–.)

13.
In
The Final Days,
Woodward and Bernstein reported that Pat had wanted to divorce Nixon after the 1962 defeat and wrote of her “rejection of his advances since then.” (Woodward and Bernstein,
The Final Days,
op. cit., p. 173.)

1.
Prior to the sixties only two “clubs” were allowed to operate casinos, and those only during the high tourist season. One, the Bahamian Club, was on the outskirts of Nassau; the other was on Cat Cay. Nixon showed interest in visiting Cat Cay in 1959, and Bebe Rebozo was to buy the island in 1983. Nixon subsequently vacationed there. (Only two: Mahon, op. cit., p. 60; RN 1959: RN to Elmer Bobst, Dec. 18, 1959, corr. files, Series 320, Box 90, VP;
Report of the Commission of Inquiry into the Operation of the Business of Casinos in Freeport and Nassau
, Nassau, Bahamas: 1967, p. 65; Rebozo:
Miami Herald
, May 14, 1984; int. Jake Jernigan; RN vacationed:
Nassau Tribune
, Jan. 28, 1986.)

2.
The Development Board chairman, Sir Stafford Sands, a leading white Bahamian, testified to the 1967 commission of inquiry into Bahamas gambling operations that Lansky visited him in 1960 or 1961, offering a certified check for two million dollars if Sir Stafford could get for him a casino permit. Sir Stafford said he turned Lansky down. He later had meetings with Lansky associates involved in the management of the mob-run casino that did open in 1962 with his approval—and to his great profit in legal fees (see text). Sir Stafford liquidated his Bahamian holdings and moved to Spain after the casino business and his role came under investigation. (
Nassau Tribune
, Aug. 25, 1967; Hank Messick,
Syndicate Abroad,
London: Macmillan, 1969, p. 224.)

3.
The company Crosby headed when he bought into Paradise Island was Mary Carter Paint Inc. He sold it in 1968 and founded Resorts International. Resorts later sued
Rolling Stone
magazine for libel over an article by Howard Kohn titled “Strange Bedfellows—The Hughes-Nixon-Lansky Connection: The Secret Alliance of the CIA from World War II to Watergate.”
Rolling Stone
eventually later published a retraction, stating that “Based on the evidence now available,” the magazine was “satisfied that Resorts was not a front for either Meyer Lansky, organized crime or the CIA, and did not permit gaming revenues to be skimmed by underworld operatives, and did not funnel money to Cuban counterrevolutionaries or otherwise launder funds for covert operations.” None of the substantive information used in this chapter is drawn from the
Rolling Stone
article.

A CIA document released in 1998, on the subject of Resorts International Inc. and dated August 18, 1976, states: “Resorts International Inc. was of interest to Cover and Commercial Staff, DO, in 1972 and 1973.” It also notes that Wallace Groves, initially a partner with Mary Carter Paint in the purchase of Paradise Island, was “the Subject of OS file 473 865” and “of interest to the Office of the General Counsel for the utilization of Groves as an advisor or possible officer of one of the Project WUMUTUAL entities. Additional information in this file would suggest that Groves was connected with Meyer Lansky.” Other CIA documents show that a “Covert Security Approval” was applied for in respect to Groves in December 1965, shortly before the Mary Carter and Groves purchase of Paradise Island. It was approved and not canceled until April 1972. (Mary Carter became Resorts: Resorts International Stockholders Report, undated [1969?], Block Collection, and see Mahon op. cit., p. 77; suit and retraction:
Rolling Stone,
Apr. 28, 1983, referring to article, ibid., May 20, 1976; Mahon, op. cit., p. 42; CIA document 1998: Jerry G. Brown, deputy chief, Security Analysis Group, to chief, Security Analysis Group, Aug. 18, 1976, CIA Record No. 104-10408-10212, JFK series, released under FOIA; other CIA documents on Groves: CI/Operational Approval & Support Division, Office of Security documents, “Subject: Wallace Groves,” Dec. 30, 1965, Jan. 26, Apr. 8, 1966, Apr. 12, 1972, Block Collection; Groves and Mary Carter Paint:
NYT
Jan. 17, 1979.)

4.
The real estate scheme, which eventually collapsed, involved a plan to build condominiums on Paradise Island. The “Lansky man” involved in the project was Lou Chesler, a Canadian associate of Groves. Chesler's involvement with gangsters dated back to the early forties, and he met with Lansky to plan Bahamas casino operations. See also chapter 11, Note 12. (Real estate: Mahon, op. cit., p. 208; “Lansky man”: Block, op. cit., p. 43–; Messick,
Syndicate Abroad
, op. cit., p. 130; met Lansky:
Nassau Tribune
, Apr. 18, 1967.)

5.
Professor Block has been an adviser to the New York Senate Select Committee on Crime and editor in chief of a criminology journal. He has written nine books on organized crime, including
Masters of Paradise: Organized Crime and the Internal Revenue Service in the Bahamas
, New Brunswick, N.J.: Transaction, 1991. He was interviewed for this book and made his files available to the author.

6.
James Crosby's brother Peter was an officer of the company listed in courthouse records as the holding company for James Crosby's Mary Carter Paint. Peter Crosby, who had mob associates, was convicted and jailed in 1960 on charges of mail fraud, securities fraud, and the sale of unregistered securities. Similar cases followed in 1969 and 1971, when he was again convicted, this time of conspiracy to violate the Small Business Corporation Act. He vanished while free on appeal bond and was listed as a fugitive. He was living in New Jersey at the time of his brother James' death in 1986. Mob stock swindler Louis Mastriana testified in 1973 that he and John Lombardozzi, brother of a New York Mafia boss of that name, had met with Peter Crosby in the Bahamas to discuss one of the frauds for which Crosby was indicted. As reported in chapter 11, Mastriana was one of those who said he had dealings with Nixon's friend Rebozo. Doubts about Rebozo's integrity were raised because of his handling of stolen stocks. In that case Rebozo named James Crosby as one of the people he consulted about the stocks. The other was Donald Nixon. (Holding company:
Miami Beach Sun
, Jan. 29, 1970; offenses: Jonathan Kwitny,
The Fountain Pen Conspiracy
, New York: Knopf, 1973, pp. 98, 294; and
Manhattan Inc.
, Feb. 1987; Mastriana testified:
Hearings, Permanent Subcommittee on Investigations, Committee on Government Operations, (Organized Crime: Securities,
Thefts, and Frauds)
, U.S. Senate, 93d Congress, 1st Session, Pt. 2, Sept. 18, 1973, p. 146–; and see also Patsy Lepara testimony in Pt. 3, pp. 454, 472; Rebozo consulted James Crosby:
WP
, Oct. 25, 1973)

7.
While a Resorts official tried to brand Teresa a liar, government counsel Edward Harrington, later U.S. attorney in Boston, declared him a credible witness. Twenty defendants were convicted on the basis of Teresa's testimony. (Mahon, op. cit., p. 233.)

8.
One such friend, New York promoter Richard Pistell, donated seventeen thousand dollars. Pistell, who helped form Crosby's casino operation, was later sued for fraud by the Securities and Exchange Commission. In the early seventies he was first to interest the financier Robert Vesco in buying Paradise Island. (Donation:
NACLA Latin America & Empire Report
, Oct. 1972; helped form:
Wall Street Journal
, Oct. (?) 5, 1972; sued: Robert Hutchison, op. cit., p. 260; Block, op. cit., p. 55; Vesco: Hutchison, op. cit., p. 264.)

9.
Henry Kissinger visited Paradise Island, as did press aide Ron Ziegler. Crosby traveled with Kissinger to meet with Nixon on Grand Cay, owned by the president's friend Robert Abplanalp. Abplanalp frequented the Paradise casino and reportedly lost large sums on the gaming tables there. (Kissinger:
NYT
, Jan. 21, 1974; undated memo, Warren Adams to John Sablich,
Fidelifacts report
, supra, p. 545, citing Paradise Enterprises PR director Ed Woodruff; Ziegler: ibid.; Crosby, Grand Cay, Abplanalp:
NYT
, Jan. 21, 1974.)

10.
A 1977 article in
Barron's
magazine cited the bridge's annual income as “around a million.” Sy Alter, who ran the bridge in 1967, gave the author the same figure, while Paradise security director Paul Shealy said the bridge grossed up to eighteen thousand dollars over a three-day weekend. (
Barron's
, Sept. 26, 1977; int. Seymour Alter; memo to file, IRS Informant TW-24 [known to be Norman Casper], Nov. 7, 1973, Casper Papers, and research for author by Nassau researcher Catherine Kelly.)

11.
The third partner, according to Butler, was Senator George Smathers, mutual friend of Nixon and Rebozo's. Nixon's last chief of staff, Alexander Haig, has recalled being told by the president to issue denials to
Time
or
Newsweek
. A written inquiry about Nixon and the ownership of the bridge, addressed to the White House by Robert Hutchison (an authority on the Vesco affair) elicited not even a pro forma response. (Smathers: Hutchison, op. cit., p. 282; Haig: int. Alexander Haig in Strober, eds.,
Nixon
, op. cit., p. 427; Hutchison: Hutchison, op. cit., p. 282.)

12.
The former agent, Gerald Behn, had accompanied Kennedy on a visit to Chicago in April 1961. He was asked about the visit in 1992 because the president's former mistress, Judith Exner, had said Kennedy met secretly on that occasion with the local Mafia boss, Sam Giancana. Behn claimed not only to know nothing of the Giancana allegation but even to have forgotten the visit itself. He went on to become head of the Kennedy White House detail and later president of the former Secret Service Agents' association. The association censured four former agents for having discussed Kennedy's private life with the journalist Seymour Hersh. (Research supplied to author by Mark Allen.)

13.
There were many phone interviews with Silberman, two prison visits, and extended correspondence, from 1996 to 2000.

14.
This seems an outlandish sum to the layman. Obviously, even though the price of gold tripled in the year following the closure of the gold window, a simple tripling of the initial $180,000 investment would have meant a profit of $360,000, not the astonishing figure of $10 million claimed by Silberman. The explanation is in Silberman's reference to buying gold “futures.” According to an investment adviser consulted by the author, a return on this scale is indeed plausible when commodities futures are traded. A “future” is an agreement to buy or sell a fixed quantity of a fixed asset at or by some fixed future date at a price agreed to on the day of making the agreement. A buyer, however pays not the full price but an agreed “margin,” a form of deposit. Silberman could have made a margin payment of as little as a dollar an ounce, thus securing for himself, from the massive increase in the gold price that followed—as he knew it would when the gold window closed—a massive profit on the margin paid when he made the agreement. (Int. and corr. Peter Metcalf.)