It could not have come at a more inopportune time, what with the election drawing closer and the President trying to cash in on the political benefits of his China trip. Last week, though, the Nixon Administration found itself laboring under the shadow of what could be a major image-damaging scandal. The charge was that for a price—a $400,000 gift to help defray this year's G.O.P. convention costs —the Justice Department had dropped antitrust suits against the International Telephone and Telegraph Corp. The President was only indirectly involved, but the accusations—so far unproved —were aimed at his closest adviser, former Attorney General John Mitchell, and Mitchell's successor-designate, Richard Kleindienst.
The source of the charges was that well-known dealer in secret memos, Washington Columnist Jack Anderson. Last week Anderson published a summary of a personal memo, purportedly written by ITT Lobbyist Dita Beard, that linked the favorable antitrust settlement with ITT's pledge to underwrite some of the convention costs. Addressed to William R. Merriam, head of ITT's Washington office, the memo refers to Mrs. Beard's accosting Attorney General Mitchell at a party thrown by former Kentucky Governor Louie Nunn in Louisville after the 1971 Kentucky Derby.
Talking Freely. Mitchell had indicated to her, the memo said, that the settlement would turn out favorably for ITT. "Certainly the President has told Mitchell to see that things are worked out fairly," Mrs. Beard wrote. But, she warned Merriam, ITT officials were talking too freely about the $400,000 commitment, and if there was any more publicity, Mitchell might back away. So why didn't ITT put up the money and get its executives to shut up? The memo ends with the suggestion that Merriam destroy it.
The following day Anderson took out after Kleindienst in his column. The Attorney General-designate, he charged, had lied outright last year when he denied—in reply to a letter from Democratic National Committee Chairman Lawrence O'Brien—any connection between the convention cash and the antitrust settlement and insisted that neither he nor Mitchell had played any role in the department's negotiations with ITT. On the contrary, Anderson wrote, Kleindienst had in fact held several meetings on the case with ITT Director Felix Rohatyn before the settlement was reached.
Anderson's charges and the memo set Washington buzzing with rumor and speculation. It was no secret in the capital that ITT had given $100,000 —through its subsidiary the Sheraton Corp.—to the G.O.P. and was considering giving more. It was also known that the money for the convention had been pledged only eight days before the Justice Department's favorable ruling. At the time, the department's Antitrust Division was under Richard McLaren, an exceptionally tough prosecutor who is now a federal judge in Chicago. The division had been furiously attacking ITT's earlier acquisition of several major companies, including the Hartford Fire Insurance Co. Several stories about the "coincidence" of the division's subsequent favorable ruling had run in the Washington press. But it took Mrs. Beard's memo and Anderson's columns to show a direct link between the settlement and the ITT gift.