Chapter Thirty-One: The Revolt of the Bureaucrats

The White House timetable for consolidating its power over the Investigative agencies of the government was rudely interrupted on June 17, 1972, when Washington, D.C., police arrested five men in the national headquarters of the Democratic party in the Watergate apartment and office complex. Although the arresting officers did not know it at the time, these burglars were actually part of an intelligence-gathering unit working surreptitiously for the Committee to Reelect the President (CREEP). This unit was coordinated by G. Gordon Liddy, who was then working as counsel to the finance committee of CREEP, and by E. Howard Hunt, who still maintained an office in the executive office of the president as a consultant. Under other circumstances the covert relationship between the five burglars, Liddy, Hunt, and the Nixon White House might never have been disclosed; but with Nixon's impending reelection threatening the very independence of the power base of the bureau chiefs of the investigative agencies, there were strong forces within the executive branch of the government which would not only refuse to help cover up the embarrassing connection but would actively work to disclose it.

The most convenient way for the president to assure that the FBI investigation into the Watergate burglary would not uncover any damaging links to the White House, without embarrassing its recently appointed director, L. Patrick Gray, was to ask the Central Intelligence Agency to intrude on the FBI's investigation of the case. Since 1950 the CIA and FBI had a standing arrangement whereby if either agency asked the other to limit its investigation of a case so as not to reveal an intelligence operation or a secret agent, the other agency would acquiesce. When, for example, the Kennedy administration in 1961 wanted to terminate an FBI investigation into a wiretap placed, on the behalf of a Chicago racketeer, in the room of Dan Rowan, the well-known television personality, Attorney General Robert F. Kennedy warned Hoover that the investigation would uncover a CIA operation directed at Fidel Castro. After the CIA Supplied the necessary paperwork, Hoover reluctantly called off the investigation.* In the case of the Watergate break-in, the CIA could also have plausibly claimed that a full-scale FBI investigation into the matter could have disclosed agency operations and secrets. Four of the five burglars arrested in the Democratic headquarters that night had previously worked for the CIA: James McCord had been employed in the highly sensitive position of assistant director for security for the entire Central Intelligence Agency up to a year before the break-in; Eugenio R. Martinez, a Cuban refugee. was still receiving a $100-amonth retainer from the agency and reporting to his case officer in Miami; Bernard Barker, another refugee, had worked for the CIA both Cuba and, later, the preparations for the Bay of Pigs invasion; and in anti-Castro activities. More important, E. Howard Hunt had been a CIA official for more than twenty years, and the CIA's technical services division had supplied much of the equipment used in previous intelligence operations that Hunt had undertaken for the White House. Indeed, at the time of the Watergate burglary, Hunt was employed by Robert R. Mullen and Company, which was ostensibly a public-relations firm but which handled many sensitive foreign assignments for the CIA and had a case officer assigned to it. President Nixon thus assumed, five days after the burglary, that the CIA would intervene with the FBI to prevent disclosures that would be damaging to his administration. On June 23 the president instructed Bob Haldeman to tell Richard Helms that "Hunt... knows too damn much.... If it gets out that this is all involved... it would make the CIA look bad, it's going to make Hunt took bad and it's likely to blow the whole Bay of Pigs thing which you would think would be very unfortunate-both for the CIA and for the country ... and for American foreign policy. Just tell [Helms] to lay off." Nixon made it clear to Haldeman that he believed that Helms and the CIA were vulnerable to very damaging information that had been kept secret about the Bay of Pigs invasion for more than ten years, and that the threat of these disclosures would be sufficient to gain CIA cooperation in covering up the Watergate burglary. (Earlier, Ehrlichman had been ordered to ask Richard Helms to submit a report on the secret in-house investigation of the CIA's role in the Bay of Pigs invasion, but Helms resisted the request. After discussing i t with Nixon in person, he submitted only an abridged report.)

*According to the story supplied to the FBI by the CIA (and Robert Kennedy), the private detectives arrested in Rowan's room for the attempted wiretap were employed by the CIA as a favor to Sam "Mo" Giancana, an organized-crime figure who had been recruited to help in the assassination plots against Fidel Castro by Robert Maheu, a CIA agent (and also a close friend of Larry O'Brien's, who was then Kennedy's chief of staff). Whatever the reasons were for this racketeer's being assisted by the administration, the revelation would have been highly embarrassing. 

Frank Sturgis had also been employed by the CIA


Richard Helms, however, was not about to provide the cover for Watergate that the president expected. He had been told that Nixon planned to replace him immediately after the election, and he feared, as he told me subsequently, that Nixon also planned "to destroy [his] agency." Nixon, it will be recalled, had already excluded Helms from some meetings of the National Security Council. The director of CIA was also well aware that in the reorganization of the Investigative agencies in the narcotics program the White House strategists had twice attempted to detach CIA agents and use them for their own domestic purposes. Krogh had, fact, demanded and received surreptitious funds from the CIA to pursue his war against heroin. 

Although Helms denied that he had specific knowledge of Hunt's activities on the special-investigation unit, he could not have been entirely unaware of the extraordinary nature of the relationship between Hunt and the other Plumbers and the White House. In any case, Helms saw that these White House maneuvers-and the demands being put upon his agency-could jeopardize the integrity of the CIA (and diminish its autonomy within the government). When Haldeman and Ehrlichman approached Helms with the president's suggestion that he inform the FBI that a deeper investigation of the Watergate burglary could uncover CIA activities, he pointedly refused, saying that the burglars arrested in Watergate were not involved with the CIA. The White House was thus deprived of its most expedient way of covering up the burglars.

Not only did the CIA refuse to intervene for the president to limit the FBI investigation, but Robert Foster Bennett, president of Robert R. Mullen and Company, which acted as a coordinator for Hunt in a number of his prior activities, began planting stories in the Washington Post which suggested that the Watergate burglary was directly connected to other White House activities. Indeed, Bennett sent a memorandum to his CIA case officer, Martin J. Lukasky-who controlled the covert activities of Mullen and Company-which described how he had established a relationship with Bob Woodward, of the Post, and was seeking to direct the attention of the Post to Charles Colson's activities and away from those of the CIA. In return for these stories, Bennett said that Woodward was protecting the covert activities of Mullen and Company and the CIA, according to a memorandum written to the CIA on July 10, 1972. As Colson saw material appearing in the Post which implied that he was behind Watergate, he began planting detective stories on his own behalf. The "battle of the leaks," as Colson called it, thus began to sink the Nixon administration.

At the Federal Bureau of Investigation there was also an open rebellion. The selection of Gray as acting director after the death of Hoover was resented by FBI executives who were bypassed for the position or who believed that the position should go to an insider at the FBI instead of to a friend of the president. A number of senior agents also believed that Gray was "too liberal" because he allowed agents to wear colored shirts and to grow their hair long, and even considered recruiting women as agents. To demonstrate to the president that Gray could not control the FBI. and therefore would prove a severe embarrassment to the administration, the disgruntled FBI officials leaked to the press the "302" files, which were reports of the interviews FBI agents had with individuals who could supply information about the Watergate affair. Mark W. Feldt, Jr., then deputy associate director of the FBI, also provided off-the-record briefings to journalists that implied that the White House was attempting to conceal its involvement with the Watergate burglars. With these `302" reports circulating around Washington and occasionally surfacing in the newspapers, President Nixon complained to his counsel John Dean, who was then supervising the Watergate cover-up, that "the Bureau is leaking like a sieve." It thus became painfully clear to the president that Gray would not succeed in suppressing the leaks from within.

There were also insurgents in the Treasury Department. Although the White House strategists had succeeded in easing Rossides out of his key position as assistant secretary for law enforcement and operations, and had managed to detach from the Bureau of Customs a large part of its investigative capacity, they had created dangerous enemies for themselves in the Internal Revenue Service and in other branches of the Treasury Department. Early in 1973, officials of the IRS surreptitiously leaked copies of President Nixon's tax returns, which showed that he paid no taxes while he was president, to a Rhode Island newspaper. It subsequently turned out that the tax deduction which allowed the president to forgo taxes during those years proceeded from a document that had been illegally backdated by the Nixon appointee who had replaced Rossides, Edward Morgan. Morgan was forced by the disclosure to resign immediately. The leaks from the Treasury Department thus further undercut the planned reorganization of the Treasury Department's investigative agencies.

Even though the Bureau of Narcotics and Dangerous Drugs was scheduled to lose its independent status as an investigative agency and to be merged into a new superagency in 1973 by Reorganization Plan' Number Two (and the position of its director, John Ingersoll, was to be abolished entirely), die-hard officials at BNDD and at other agencies kept fighting the consolidation by leaking damaging information about Myles Ambrose, who was, according to Krogh, being considered by the White House for the job of administrator. For example, It was recalled that Ambrose had been the house guest of a Texas rancher who was later arrested for gun-running, as well as suspected of narcotics-smuggling; and information poured out of BNDD (and the Bureau of Customs) on the Collinsville raids by the Office of Drug Abuse Law Enforcement. However, Ambrose had no interest in heading the new agency, and he retired to private law practice in 1973. 

As late as September 15, 1972, President Nixon believed that despite the leaks he would be able to win control of major investigative agencies through his planned reorganization and then use these agencies to complete his consolidation of power over the rest of the executive branch of the government. He told John Dean, "This is a war. We take a few shots and it will be over. . . ." When Dean replied that he had taken notes on the enemies of the administration, the president further explained: 

I want the most comprehensive notes on all those who tried to do us in.... They were doing this quite deliberately and they're asking for it and they are going to get it. We have not used the power in the first four years as you know. We have never used it. We have not used the Bureau and we have not used the Justice Department but things are going to change now and they [the investigative agencies] are either going to do it right or go. 

Dean realized, however, that with each disclosure, the carefully planned reorganization was coming undone, and the domain that Nixon was attempting to gain over the investigative agencies was, in fact, slipping from his grasp.

The new superagency, which was to be called the Drug Enforcement Agency, was still moving ahead; and in this reorganization many of the bureaucrats who had opposed Nixon's will were replaced. The Nixon strategists, however, who were to coordinate the activities of this new investigative agency on Nixon's behalf, were all vulnerable to leaks and disclosures in the Watergate affair. John Ehrlichman and Egil Krogh, who were the powers behind the scene in establishing the new agency, had both supervised the activities of Hunt and Liddy in the special-investigations unit. It was only a matter of time before Hunt and Liddy, who were then indicted as co-conspirators in the Watergate burglary, named Krogh as their immediate superior in other burglaries (and even if they both remained silent, minor officials in the CIA and secretaries in the executive office of the president knew of these activities). Krogh thus was quietly moved from the Domestic Council to the Department of Transportation. Morgan, Krogh's former staff assistant who replaced Rossides in the Treasurv Department, was compromised by the leaks from the IRS on Nixon s tax returns and had to resign. Caulfield, who was to take over the Alcohol, Tobacco and Firearms unit for the White House, had been involved by John Dean in the cover-up, and therefore also had to resign. Santarelli, who had been appointed the new administrator for the Law Enforcement Assistance Administration, had been seriously damaged by a leak from the Department of Justice about candid but embarrassing remarks he had made about President Nixon, which were surreptitiously recorded at a luncheon by FBI agents and disclosed to the press. He was thus forced to resign. In short, all the key loyalists whom the White House strategists had counted on for the takeover of this new investigative agency had been driven from the government either by leaks from the agencies they were planning on reorganizing or by their involvement in the Watergate affair. As Eugene Rossides said to me in 1974, after he returned to his private law practice, "If not for Watergate, can you imagine what they would have done with the Drug Enforcement Agency?" The revolt of the bureaucrats thus succeeded in blocking Nixon's plan to gain control over the investigative agencies of the government in his second term.