The Arrogance of Power

by Anthony Summers

  Casper reported the discovery verbally to his employer, agent Jaffe, and the wider investigation continued. Jaffe now wanted a copy of the full customers’ list, and soon—by dint of a cloak-and-dagger trick that involved separating a bank official from his briefcase while he dined with an attractive woman—Casper managed that too. The document was photographed, page by page, by IRS agents.

  There were more than three hundred names on that copy and on another that surfaced later. They included Playboy publisher Hugh Hefner, Penthouse’s Bob Guccione, the actor Tony Curtis, members of the rock group Creedence Clearwater Revival, and Leonard Hall, former chairman of the Republican party and long a Nixon intimate. Of “Richard M. Nixon” himself, however, there was no longer any trace.

  An internal IRS report suggested that since the initial sighting, the entry had been “purged from the Castle records or otherwise concealed.” The probe established that at various stages records were indeed transferred or shredded. As Casper observed, it was surely madness for Nixon’s name to have been openly listed in the first place. With Watergate making news in the months after Casper’s penetration of the records, to remove it would have been an obvious precaution.

  The story did briefly surface publicly much later, well after Nixon’s resignation and then only in an oblique sort of way.24 When it did, the Castle Bank manager, faced with indictments and extradition proceedings, said it was “unlikely . . . in fact, impossible” that Nixon’s name had been on the list the IRS had obtained. (No one, of course, had ever claimed that it had been.) The former president of the bank, which lost its license and closed in 1977, tried another tack in an interview with the author. “I am absolutely positive,” Samuel Pierson said, “that the Nixon the idiot read about was a black Bahamian.”

  That intriguing notion does not stand up to scrutiny. The name Nixon is not uncommon in the Bahamas, but thorough research involving old voters’ lists, telephone directories, and personal interviews has turned up no Richard M. Nixon.25 Bahamian citizens, moreover, were prohibited by law from holding accounts in offshore institutions like Castle Bank.

  A 1972 article in a Nassau newspaper confirms that as the IRS operative recalled, Castle Bank was transferring its records to a new computer at the very time Casper spotted the Nixon name and account number. The man responsible for that process, a Canadian named Alan Bickerton, said in 1997 that he had been aware of the identity of all the bank’s customers. Asked if one of them had been the Nixon, however, he declined to answer. “I’m not prepared to discuss it at all,” he said. “It wouldn’t matter if it were Richard Nixon or the prime minister of Canada. I wouldn’t discuss it with you. . . .”

  Never satisfactorily resolved, the matter was lost in a troubling upheaval within the IRS.26 Higher-ups suspended the Jaffe probe, blowing its cover in the process. There was a protracted internal row, with dark hints about the fact that IRS Commissioner Donald Alexander was a Nixon appointee and that his old law firm’s name appeared on an index card at the Castle Bank office. Alexander denounced such attacks as the smear tactics of “faceless liars.”

  A final odd twist is the reaction of the man who stumbled upon Nixon’s name in the first place, and his experiences afterward. Far from trumpeting his discovery when testifying to a House committee probing IRS practices, former informant Norman Casper ventured the opinion that the name might have gotten onto the list because someone “had too many martinis . . . got to playing.” The explanation is implausible but should be interpreted in the context of the fact that the printout especially disturbed Casper because, he told members of the committee, “neighbors of mine were involved.”

  What he meant by “neighbors” emerged in a 1996 conversation with the author, as Casper, a decent man highly respected by his IRS colleagues, gradually relaxed his guard. His full story is filled with ironies. A resident of Key Biscayne long before he became an IRS operative, Casper knew Nixon and Rebozo personally. He had met Nixon when he came to stay at the Key Biscayne Hotel, and the Nixon girls had even looked after Casper’s daughters at the beach. He had met Pat Nixon and admired her greatly. Casper was in fact a conservative Republican, active enough at one point to have served on the local Republican committee.

  Casper likewise characterized Rebozo as “a pretty good friend.” The men had met in the early fifties, and Casper had even run background checks on prospective employees of the Key Biscayne Bank. He had worked for Rebozo as recently as 1969, not long before he was hired by the IRS. For Casper, finding Richard M. Nixon’s name on the Castle Bank customers’ list was the one blemish on an otherwise triumphant operation. It was the last thing he had expected, or wished, to find. As he told the author, “I didn’t want to believe it.”

  After Casper had testified in Washington, Rebozo’s secretary called to say her boss wanted to see him urgently. He consulted with IRS colleagues, then agreed to meet Rebozo at his office. The president’s friend wanted to know if Casper had actually seen a Nixon account at the Castle Bank. Casper replied that he had seen only the customers’ list. Rebozo then told him that a Nixon attorney had been to the Bahamas and found “incontrovertible proof” that there was no such account. He produced the lawyer, who had been waiting in a nearby room, and got Casper to tell his story again.

  Nixon was “very angry,” Rebozo told Casper, and then asked him about the state of his own finances. When Casper replied that they were not flourishing, Rebozo expressed “dismay” and said he “hoped the situation would improve.” A week later he called about nothing in particular and said again that he hoped Casper’s financial situation “would improve in the near future.” Casper promptly reported these conversations orally and in writing to his IRS contact, a record of which has survived.

  _____

  If Nixon did have offshore holdings, what were they worth? The original Castle customers’ list of course showed only a name and an account number. Although the briefcase later “borrowed” from a bank official contained the list on which Nixon’s name did not appear, it also held records of Castle’s bank and brokerage accounts, copies of ledgers, and extensive correspondence showing how investments were being managed.

  Casper, who was present as IRS photographers took pictures of the papers, was provided with copies of some of them for his work. They included this document, which Casper has provided to the author. It has never been published before:

  Taken at face value—and there is no reason to doubt what Casper says about its origins—the document appears to be a typed note summarizing four deposits in the Cosmos Bank in Switzerland. It does not indicate whether the sums listed represent U.S. dollars or Swiss francs. If in dollars, then the total of the Swiss bank holding was the immense amount of $42,845,345. If, as is likely, the reference was to Swiss francs, then the dollar equivalent was $11,157,642.27

  The annotation, stating that the funds deposited had flowed through the Bahamas, appears to be a note between bank officials. The “Good luck” is unexplained, and the identity of the writer, “m,” uncertain.28

  Interest in the document of course turns on only one question: Do the initials in parentheses, N & R, refer to Nixon and Rebozo?

  The use of initials is consistent with two of Rebozo’s other business arrangements. A real estate partnership with banker Sloan McCrae was titled R & M Properties. A company Rebozo formed with Nixon’s friend Bob Abplanalp became B & C Investments, B apparently for Bob and C for Charles (Rebozo’s rarely used given name).

  According to Casper, the N & R document was one of the many items from the Castle briefcase shared with Herschel Clesner, the chief counsel of the House Commerce and Monetary Affairs Subcommittee. Clesner, who had developed contacts in the Swiss banking community, believed it did signify a record of massive Nixon and Rebozo holdings in a foreign bank.

  Casper at first seemed to regret having shown the author the Cosmos document and became highly defensive of Nixon. “I’m not going to clarify a goddamn thing,” he said, sitting in the living room of
his modest Florida home. “Nobody got killed. Let it go. The man has enough problems. Some things are better forgotten.” Now in his seventies, Casper made it clear that he was going to take the story with him “to the crematorium.”

  Later, however, Casper admitted that a Castle Bank source had “indicated” to him that the “N & R” did refer to Nixon and his best friend. When Casper raised the matter with another staff member, he said, “she clammed up like you wouldn’t believe.”

  The Swiss bank document, or most of the information in it, matches that provided by another source. In the 1980s, during a meeting with a reporter in his Manhattan home, the A&P heir Huntington Hartford produced a piece of paper with the same Cosmos Bank account number and three of the four deposit amounts that appear on the document seized by the IRS from the briefcase.

  In 1996, elderly and ill, Hartford would not discuss the matter. “Do you want to blacken Nixon’s name?” he asked. “Don’t do it. I didn’t think he was so bad. Why would I care if Nixon had an account in a Swiss bank?”

  Hartford almost certainly came by his information on the deposits from investigators working on the lawsuit he brought against his Paradise Island partners.* Available information strongly suggests a Paradise Island connection with both Castle Bank and Cosmos.

  Some of the stock of James Crosby’s company, which bought the island from Hartford, was held at Castle Bank. Cosmos Bank subsidiaries, meanwhile, owned 20 percent of the shares in the Paradise Island bridge, the bridge said to have been partly owned by Nixon.29

  In the year of the briefcase seizure Cosmos Bank was a well-established Swiss Privatbank operating from an inconspicuous fourth-floor office just off the Bahnhofstrasse, in Zurich. While it revealed little about its dealings, its main activities were described as “business with the United States.” One of Cosmos’s early directors had been Robert Anderson, a secretary of the treasury under Eisenhower, later convicted on charges connected with yet another offshore bank.30 Cosmos had subsidiary offices in New York, on Park Avenue, and in the Bahamas.

  The author’s investigation into this matter led him to visit the legendary district attorney of New York County, Robert Morgenthau. As U.S. attorney in the sixties Morgenthau had been the scourge of organized crime, a particular foe of Meyer Lansky’s and the first senior U.S. law enforcement figure to probe the arcane secrets of Swiss bank accounts. It was a course that eventually cost him his job.

  At nearly eighty, pacing his vast cavern of an office in lower Manhattan, Morgenthau recalled how, during the investigations of several cases, “Nixon’s name kept coming up.”31 “We were looking at Paradise Island,” said Morgenthau, “and that led us to Nixon. We didn’t have an open investigation of him, but we were going to open one.” When the author shared with Morgenthau the document showing the “N & R” accounts at the Cosmos Bank, the district attorney reacted strongly. He had never seen it before, but his probe had led him in exactly that direction. He had information on a visit Nixon had made to a Paris attorney, an expert in helping people set up Swiss bank accounts. “I have no doubt,” Morgenthau said, “that he used Cosmos. He may have used something else too. But he certainly used that bank.”

  When Nixon became president, New York’s U.S. attorney was working with the House Banking and Currency Committee to formulate a new law that would have made it much harder for U.S. citizens and corporations to operate secret accounts abroad. Long before it materialized, however, Nixon removed Morgenthau from office—over the protests of senior Republicans as well as Democrats. The new law curbing the use of foreign bank accounts was eventually passed, in 1972, but in attenuated form.

  The author’s interview with Morgenthau brought him once again to the issue of Nixon’s alleged financial interest in the Paradise Island toll bridge. “We had Cosmos people, the American branch of Cosmos, before the grand jury,” said District Attorney Morgenthau, “and they were asked who owned the 20 percent investment in the Paradise Island bridge. They said, ‘We own it.’ We said: ‘Have you ever made another direct stock investment?’ And they could not tell us of any such investment they’d ever made. I don’t have any doubt they were holding that for Richard Nixon. Could I prove it? No. Am I sure of it? Yes.”

  Cosmos Bank failed in 1974, and chronologically the trail ends there—except for an item District Attorney Morgenthau received through the mail in 1997, a single sheet of paper sent anonymously.32 It reads:

  NIXON’S SWISS BANK ACCOUNT

  BANK CANTRADE, BLEICHERWEG 30, ZURICH 8039

  051-36 23 60 AS OF EARLY 70

  SUBSIDIARY OF UBS

  BAERWALD & DEBOER FLORIDA (REBOZO)

  “UBS” stands for Union Bank of Switzerland, the largest Swiss bank, specializing in investment management for private clients. Bank Cantrade, which is part of it, advertised—as late as 1998—“absolute loyalty towards our clients . . . trust discretion, performance, and continuity.”

  Even though this was an anonymous communication, the reference to Baerwald & DeBoer is interesting. That was the securities firm that had been run by Franklin DeBoer, the trust officer at Rebozo’s bank and the man who said he managed “private portfolios” for Nixon and Rebozo.

  This account of Nixon’s alleged secret funds has thus come full circle. If the late nineties communication received by Morgenthau was mere fiction and mischief, it was put together by a cognoscente. The DeBoer connection is an obscure one, not exposed at length anywhere until publication of this book.

  Finally, the man who raised funds for Nixon through three election campaigns, and a staunch loyalist, let slip an interesting detail shortly before his death. “Rebozo,” said Maurice Stans in a 1997 interview, “was a very nice guy, a sweet fellow. . . . He told me, ‘I’ve set up a trust fund for Richard Nixon’s family—to take care of the family.’ The only money set aside for Nixon was through Bebe’s generosity. Bebe told me that.”

  Stans said the fund, which he believed was started in 1968, never became public knowledge, and he himself never learned of its extent.33 It was therefore initiated years before the first of the large deposits made in Zurich’s Cosmos Bank in the names of “N & R,” according to the document seized by the IRS.

  A Swiss hotelier, Raoul de Gendre, met Nixon while he was working in the United States. He later returned to Switzerland, to become manager of the Dolder Grand Hotel in Zurich. A fan of Nixon, whose photographs cover the walls of his present place of business, de Gendre has fond memories of their further encounters. He has recalled that throughout the eighties, sometimes accompanied by Pat, often by Rebozo, Nixon traveled to Zurich every single year.

  21

  * * *

  He has been vaporized by political nukes half a dozen times and resurrected by his own hand. He has breathed into his own mouth.

  —Bryce Harlow, Nixon friend and adviser

  Whatever his future fortune was to be, Nixon claimed enduring financial hard times after the 1962 defeat. Pat was “nagging him about their plight,” according to a source close to the family, and wanted to get out of California. It was a plan that suited Nixon well, even as he once more promised her that he would never run for public office again. Within a month of his loss to Pat Brown, Nixon had met with intimates in a suite at New York’s Waldorf-Astoria to discuss how to keep himself politically in play. New York in fact seemed the one place where resurrection might be possible.

  To that end, Nixon wanted an attorney’s job in Manhattan, one that would pay $250,000 a year and leave him free to use his time as he liked. “He had to have his cake, money,” said one aide, “and eat it too—pursue his interest in foreign policy.”

  One account suggested it was Rebozo, working with DuPont heir Ed Ball and World War I flying ace Eddie Rickenbacker, who landed him such a position. Another—the version Nixon perpetuated—held that pharmaceuticals tycoon Elmer Bobst arranged it. In any event, Nixon became a senior partner of a New York law firm, thenceforth to be known as Nixon, Mudge, Rose, Guthrie and Alexander. />
  The Wall Street firm was a long-established champion of big business, described by Life’s Hugh Sidey as a place where “the faces inside are commanding but for the most part unrecognizable . . . the talk about corporations and dollars.” Its lawyers served their clients by guarding their money from taxation, negotiating bond issues, and administering estates. The company existed primarily for the manipulation of big money.

  Lucrative job offer in hand, the Nixons found a home to suit their stature, a $135,000 Upper East Side apartment with a view of Central Park and Governor Nelson Rockefeller as a neighbor.1 With their daughters and Manolo and Fina Sanchez, the Spanish valet and housekeeper who had become permanent members of the household2—and their now geriatric dog Checkers—they moved east in June 1963. No one in California gave them a going-away party.

  Pat was to describe their time in New York as a “six-year vacation.” She decorated the apartment in “French provincial,” all pastel yellows and golds, and remodeled the twin-bedded master bedroom. Her “Republican cloth coats” were now joined in the walk-in closet by a mink. She sent her daughters to Chapin, the fashionable private school for girls, and in due course would launch them as debutantes. In spite of such conformity with the social requirements, Nixon was not readily welcomed into the bastion of the eastern establishment. “They just didn’t want to go to dinner with Nixon,” recalled an acquaintance of one attempt to corral guests for a dinner party.