Kraft’s version of the story behind Watergate Salad goes something like this: General Foods released Jell-O Pistachio Flavor Instant Pudding and Pie Filling in 1976 and circulated a recipe for Pistachio Pineapple Delight. A food editor in Chicago renamed this recipe Watergate Salad and printed it in her column. In 1985 or 1986, General Foods put the recipe for Pistachio Pineapple Delight on packages of Jell-O Pistachio Flavor Pudding. In 1993, Kraft Foods, the new owner of the Jell-O brand, added marshmallows to the recipe and changed the name on the box to Watergate Salad.
But an investigation by the Richmond Times-Dispatch in 1996 failed to identify the Chicago-based food editor who allegedly renamed the recipe. Camille Stagg, a food editor at the Chicago Sun-Times around that period, said the Watergate Salad recipe was “rather unappealing” and therefore unlikely to have been picked up by any of the top food editors in the city at the time, who were generally focused on covering the growing interest in healthful eating—cutting sugar and salt, eliminating preservatives and cooking with natural, organic ingredients.
In early 1977, a reader sent the recipe for Watergate Salad to Hazel Geissler, a staff writer with the St. Petersburg Evening Independent, and asserted it came from “a restaurant in the now well-known complex.” A radio station in Nashville, Illinois, reported the sous chef at the Watergate Hotel created the Watergate Salad “while in a hurry to create something for the buffet.”
A spokesman for the California Pistachio Commission was unable to settle the controversy. The recipe for Watergate Salad, he said, didn’t even require real pistachios—just pistachio pudding mix, “which doesn’t always contain real pistachios.”
Anton Obernberger, the current owner of Watergate Pastry, says he and his staff still get asked if they played a role in the invention of Watergate Cake. “We tell them we had nothing to do with it,” he said. “As far as we know, Nixon liked pistachios, and that’s where it got the name.”
The recipe for Watergate Salad remains popular, according to Kraft Foods. During a typical holiday season, more than fifty thousand people search online for it. Cooks in North Carolina search for the recipe more than any other state.
“BURGLARS ARE AT IT AGAIN,” THE WASHINGTON POST REPORTED on July 15, 1976. A few days earlier, a burglar had entered the Watergate South apartment of Mr. and Mrs. James E. Meredith while they were out of town and stole diamond rings, necklaces, bracelets and cash, with a total value of about $7,300. Then someone took a string of pearls, some rings and gold cuff links, worth about $1,300, from the apartment of Stephen S. Gardner. The two incidents brought to about forty the total number of burglaries at the Watergate apartments, hotel and office buildings since May 1974. Total losses were approximately $200,000.
The “phantom burglar,” as District police named the thief—investigators assumed it was one burglar, working alone—was able to slip past desk clerks, porters and engineers working in the Watergate complex, avoid the elaborate closed-circuit television system monitoring all entrances to the apartment buildings, leave no fingerprints or other traces and enter apartments protected by dead bolt locks. The only clue District officers had to go on was the experience of a resident at Columbia Plaza, an apartment complex across the street from the Watergate, which had suffered a wave of burglaries the year before. She had been in her apartment when her front door opened and a “well-dressed black man” appeared. He excused himself and “quickly ran away.”
Watergate managers vigorously defended their security precautions. They said master keys to apartments had long since been destroyed and most residents had changed their locks over the years. All visitors were required to sign in at the downstairs lobbies. Without express permission, no one was allowed into an apartment unless the owner or tenant was present. “I think we’re giving people the maximum security possible,” said the building manager at Watergate West. “They want security when they come here and they pay for it.”
But Abu Forna, a desk clerk at Watergate West, suggested some of his colleagues in the complex might be reluctant to stop “official-looking people” from wandering through the halls. The Watergate, he said, had plenty of residents who were “official-looking”—including lawyers, lobbyists and members of Congress. “Sometimes you don’t like to stop people because they might think you are insulting them. Then a tenant will say to you, ‘Why did you bother my friend?’”
IN EARLY 1969, AT THE HOME OF A SOUTH KOREAN DIPLOMAT, who Anna Chennault later identified as “Dr. Chang Yang,” she met a young man with a chubby face, wearing oversize glasses and an expensive suit. “Meet an able young Korean,” the ambassador said, smiling. “He is anxious to do something for our country.”
The young man was Tongsun Park.
“We had much in common,” Chennault later recalled. She had worked at Georgetown University on a Chinese-English dictionary and he had studied there. “He was a personable young man,” she wrote, “and I was happy to introduce him to those among my friends who wielded power of one sort or another. They all found him impressive. He was obviously very smart, very ambitious, in possession of all the tools necessary to realize his ambitions: cultured, socially alert, and utterly charming.”
Tongsun’s older brother, Ken Park, had inherited their father’s shipping business, and Tongsun told Chennault he had grown tired of representing his brother’s “interests” in the United States. He wanted to “branch out,” he added, and promote Korean “culture” and “foster cultural and economic ties” between the two countries. “It all sounded very wholesome and harmless,” Chennault recalled.
Tongsun Park was “Anna Chennault’s protégé in the early days,” a former associate of Park told the New York Times. She invited him to her parties at the Watergate and “introduced him to many in the elite of Washington and generally provided him a model of how to exert influence.” Corcoran also introduced Park around town, as did Chennault’s daughter Cindy, who lived in Watergate South. “A Cindy-Tongsun marriage was mentioned, even,” according to Washington Star columnist Diana McLellan. Corcoran waved off any suggestion he and Park had any sort of business relationship. “I’m not Tongsun’s lawyer, I’m his piano player,” Corcoran quipped. “He had the best piano in Washington.”
Park earned the nickname the “Oriental Gatsby” in media reports by working his way into Washington circles, dispensing gifts of Korean art and artifacts, and entertaining at his townhouse in Dupont Circle or at the top restaurants in the city. “His generosity seemed authentic,” Chennault wrote later.
In 1961, Park acquired the lease to a building in Georgetown, believed to be at or near the former site of Suter’s Tavern, where George Washington negotiated with nineteen local landowners to create the District of Columbia as the seat of the new federal government—including Robert Peter, owner of the Mexico plantation, which included the land now occupied by the Watergate. Park asked the Korean Central Intelligence Agency for funds to launch a new members-only club for lobbyists, politicians and other Washington VIPs, as part of a major lobbying campaign aimed at Congress. With $3 million in funding from South Korea’s government, Park purchased the building in 1965. According to Chennault, when Park informed her about his plan to open a club, she assumed it was part of a “cultural exchange.” In 1966, Tongsun Park and fourteen “founding members,” including Anna Chennault and Tommy Corcoran, opened the George Town Club.
Tandy Dickinson, a “taffy-haired” debutante from Lynchburg, Virginia, “with expensive tastes and a studied air of wide-eyed naivete,” according to People magazine, was living in a one-bedroom apartment in Watergate South when she first met Tongsun Park. She had the flu and had to break their first date—a birthday party for House Speaker Tip O’Neill. On their second attempt, Park took her to a gala at the Kennedy Center. He frowned in disapproval when he saw her backless gown. Park was “a very conservative gentleman,” she explained, although he was only seven years older. They shared a villa in the Dominican Republic and traveled to Europe, Asia and the Middl
e East. Park always had “the best food, the best wine, the best champagne, the best music, the best people.” “People would change their plans to make sure they’d be there” whenever an invitation arrived from Park, said Tandy.
“The name Tongsun Park meant a good party,” Tandy added.
The party ended in 1976.
The justice department and congressional investigators began asking questions about Park’s lobbying and business activities and he fled the country. On November 29, 1976, Time gave the scandal a name: Koreagate.
Kim Hyung Wook, the former director of the South Korean intelligence agency, appeared before the House Subcommittee on International Organizations the following summer. His testimony contained one bombshell after another. He told the committee Park said he needed to “do favors” for up to twenty congressmen, at a cost of $200,000 each. Wook also testified the South Korean government, at the request of two members of Congress, engaged Park as “an exclusive rice broker,” in exchange for support of U.S. weapons sales to South Korea.
On September 6, 1977, the justice department unsealed an indictment charging Tongsun Park with thirty-six felonies, including conspiracy, bribery, mail fraud, racketeering, making illegal campaign contributions and failure to register as a foreign agent. The charges carried maximum penalties of up to 202 years in prison and $114,000 in fines. “I wasn’t terribly surprised,” Chennault wrote later, “for it did not seem inconsistent with his freewheeling generosity. But it did surprise me that he had covered so much ground within so short a time.”
Griffin Bell, Jimmy Carter’s attorney general—and a resident of Watergate South—urged the South Korean government, with which the United States had no extradition treaty, to facilitate Park’s return to stand trial. “South Korea is a friendly power and an ally of the United States, and I wouldn’t want to tell them how to return Tongsun Park,” Bell said. “I’m sure they know how.”
Under a grant of immunity, Park finally returned to the United States in April 1978 and testified before the House Ethics Committee. He admitted steering funds to more than thirty members of Congress. “Washington is a marvelous city for someone like me,” he said. “Where else could a foreigner, an outsider like myself, do the things I was able to do?”
Just three members of Congress were censured and reprimanded for accepting gifts and campaign contributions from Tongsun Park and only one congressman, Democrat Richard Hanna of California, went to prison for his role in Koreagate.
After the Watergate scandal cost the GOP forty-nine seats in the House of Representatives, congressional Republicans saw an opportunity in Koreagate. “It’s tailor-made,” said Congressman Guy Vander Jagt of Michigan. “It’s a high, hard one right over the center of the plate. We ought to be able to hit it for a homer.” Added Republican Jim Leach of Iowa: “There are still people who think of us as the party of Watergate and cover-up. Now we can show them that it is our party that’s anxious to investigate corruption in government.”
Republicans picked up a net fifteen seats in the House of Representatives at the next election, depriving the Democrats of their two-thirds majority, although the election results had more to do with the energy crisis and inflation than political scandal. Republican candidates elected to Congress for the first time in that cycle included Dick Cheney, who captured the lone congressional seat in Wyoming. In Texas, a thirty-two-year-old oilman named George W. Bush ran for Congress. He lost to his Democratic opponent.
IN NOVEMBER 1976, SHORTLY AFTER GERALD FORD LOST TO Jimmy Carter, Anna Chennault posed for a photo shoot in her Watergate penthouse, to accompany a profile in the Honolulu Star-Bulletin. Anna was trying out a new look: slacks. It was time to turn the page on the Nixon-era version of Anna Chennault, the consummate hostess in the tight-fitting, custom-made embroidered silk mini-dress. The new Anna Chennault was a working woman.
“The day before my first child was born, I was at the office,” she said. “Women who have nothing else to do but entertain are ‘hostesses.’ I would rather be identified as a woman in industry, rather than a woman in luxury.”
“And don’t call me Madame,” she insisted.
She described her seven-day workweek, handling international negotiations for Flying Tiger Airlines and identifying opportunities in the United States for foreign investors. She had chosen to work in an especially challenging field for a woman. “If you are honest with yourself,” she continued, “there is no question that aviation is a man’s world. Women are thought of as stewardesses, but we are trying to recondition their thinking.”
A new project was taking up a lot of her time, she added. “I am writing my memoirs. I’ve sent 10 chapters to Doubleday and they love it.”
ON BEHALF OF BANCA DI ROMA, NICOLAS SALGO SOLICITED offers on the Watergate. Buyers sensed a fire sale and submitted very low bids. “All of them were sharks,” Salgo said. “Your price is ridiculous,” Salgo told one. “I am doing a favor for Banca di Roma because I got bored. But now I represent their interests. And your price is so ridiculous, I won’t even transmit it. If you want, you can send it to Rome yourself.” According to Salgo, a large number of buyers circled around the Watergate, including two or three “big names”—such as the Reichmanns of Canada, at one time the fourth-richest family in the world.
Salgo called up Mario Barone at Banca di Roma. “I’m tired of this nonsense,” Salgo said. “Tell me what you want for the Watergate. If I think that it is worth it, then I want to have an exclusive option on it for six months and I will try to buy it myself.”
“Fine,” Barone replied. “Ten million.” Salgo would also need to assume the first mortgage on the complex, which stood at $39 million.
Salgo didn’t hesitate. He immediately took a six-month option on the property. He had a million dollars of his own and went looking for the rest. “I couldn’t get a loan anywhere,” Salgo soon discovered. “No bank would lend me money. Real estate wasn’t hot.”
Bob Page, with whom Salgo had worked on a previous deal with Bangor Punta, introduced him to Continental Illinois Bank.
The Continental & Commercial National Bank of Chicago was especially hard hit in the economic depression that followed the 1929 stock market crash and narrowly escaped insolvency, thanks to an investment from the Reconstruction Finance Corporation. Renamed the Continental Illinois National Bank & Trust Company in 1932, the bank pursued a conservative investment strategy over the next four decades, with a heavy emphasis on government securities. David M. Kennedy, a Mormon who had served as assistant secretary of the treasury during the Eisenhower administration and was now chairman of Continental’s board, saw that many of the bank’s domestic clients were doing business abroad. He launched the bank’s international operations to keep pace.
Kennedy’s strong preference was generally to open a foreign branch of the U.S. bank, but after the Italian government refused Continental’s application, he looked for an Italian bank in which he could invest. The head of Italy’s central bank introduced Kennedy to Banca Privata Finanziaria and its owner, Michele Sindona. Both came highly recommended, Kennedy later recalled, by the Bank of Italy and by unnamed Vatican officials. Continental bought 20 percent of Sindona’s bank in 1965. “In retrospect,” Kennedy’s biographer wrote later, in a stunning understatement, “there was far more to Sindona than appeared on the surface.”
In 1969, Nixon tapped Kennedy to become secretary of the treasury. As of June 1971, Continental was the largest bank in Illinois and the eighth-largest commercial bank, as measured by deposits, in the country. In a $100 million public offering managed by Lehman Brothers, Continental launched a real estate investment trust, or REIT, Continental Illinois Properties, in November 1971. James D. Harper, Jr., known as Jim, the president of Continental Illinois Properties, ran its operations out of Los Angeles. One of the REIT’s trustees, Frank DeMarco, Jr., was a real estate lawyer with the firm of Kalmbach, DeMarco, Knapp & Chillingsworth, whose founding partner, Herbert W. Kalmbach, was President Nixon’s p
ersonal lawyer.
Salgo presented the Watergate opportunity to Continental’s executives. The Watergate, he explained, was an absolutely sure thing. The income it generated was already “substantial” and the hotel was being improved. Two weeks later, an executive from Continental Illinois called Salgo. The bank was interested in the Watergate, but had no interest in loaning Salgo money to buy it. They wanted instead to form a partnership. Continental offered to cover 90 percent of the purchase price if Salgo would put in 10 percent. They would then become fifty-fifty equity partners.
“Please repeat that,” Salgo said.
The banker repeated the terms. Salgo accepted them on the spot.
The proposed partnership agreement between Salgo and Continental Illinois Properties, however, included a section that stated neither party could sell or otherwise transfer its interest in the Watergate without the prior consent of the other. Continental was not just making a real estate investment, it was backing Salgo’s personal vision for reviving the Watergate after the scandal of the break-in and the collapse of SGI. “What they really wanted was to tie down every hair of my head so I couldn’t walk out on them,” Salgo recalled later. “Continental Illinois didn’t look at the real estate, they looked at me.”
Salgo’s lawyer read the proposed agreement and advised him not to sign. “They are asking for impossible conditions,” the lawyer said. Salgo rejected the advice. He was fine with Continental’s agreement, he said, as long as it was reciprocal.
There was one possible obstacle to closing the sale. The residents of Watergate West were still locked in a legal fight with the Watergate developers. Since March 2, 1972, at least eight different law firms, representing the Watergate West owners, developers or other defendants, made at least fifty motions, and deposed more than twenty witnesses. The lawsuits—the suit filed by Watergate West against the developer, and the countersuit filed by the developer—needed to be cleared away before Continental Illinois Properties could invest.
The Watergate Page 20