When he decided to fire Archibald Cox, almost nothing made Richard Nixon angrier than the special prosecutor's investigation of the $100,000 Nixon campaign gift from Howard Hughes to Charles ("Bebe") Rebozo, the President's close friend. That matter, Nixon firmly declared, was off limits. But the matter did not die with the departure of Cox. It was pursued by a dogged, four-man team of investigators from the Senate Watergate committee under the direction of Terry Lenzner, 34, a former Assistant U.S. Attorney in New York City and a onetime member of the Berrigan brothers' defense team.
Acting largely on their own, sometimes impressing the other staff and members of the committee and sometimes exasperating them, the investigators crisscrossed the country, conducted some 300 interviews, and pored over countless financial records, personal memorandums and hotel logs. Racing against the May 28 deadline that will bring the committee's investigation to a close, they had produced by last week an outline of a cover-up of the $100,000 transaction that mirrored on a smaller scale the whole Watergate coverup.
Useful Witness. Though the team had painstakingly unraveled part of the mystery, they were given their first dramatic break early in April when Herbert Kalmbach, the President's personal attorney, testified before the committee. Kalmbach was not exactly a willing witness; he refused to divulge details of conversations he had held with Rebozo because of their lawyer-client relationship. But Lenzner, with the approval of Chairman Sam Ervin, pressured him into changing his mind.
The investigator told him that Rebozo had denied that Kalmbach was his attorney. Thus Kalmbach was no longer bound by the lawyer-client privilege. There is some dispute whether Rebozo had said any such thing. "Lenzner twisted the record and twisted statements to leave the completely wrong impression," says Rebozo's Miami attorney, William S. Prates, who also is John Ehrlichman's lawyer. "He was terribly devious in the way he went about it." Whether tricked into his testimony or not, Kalmbach was the most useful witness for the committee since John Dean.
According to Kalmbach's nine-page written statement to the committee, Rebozo met with the President's private attorney on April 30, 1973. Huddled in a quiet corner of the White House, Rebozo asked if they could talk on an attorney-client basis, and Kalmbach agreed. Rebozo then revealed that the President had asked him to speak to Kalmbach about the $100,000 contribution, which, Rebozo said, had come in two installments of $50,000 in 1969 and 1970. That was not news nor was it especially damaging. But the use that Rebozo said that he had made of the money was. He had given part to the President's secretary, Rose Mary Woods; part to the President's two brothers, F. Donald and Edward Nixon; and part to "unnamed others." That, of course, was an illegal use of a campaign contribution, unless the funds had been spent by the recipients on Nixon's campaign. In two or three weeks, Rebozo said, he would be meeting with the Internal Revenue Service to discuss the matter. How should he handle the problem?