by Curt Gentry
Tait was subsequently tried for income tax evasion, false claims against the government, mail fraud, and conspiracy to defraud, and acquitted of all charges.
The special team also looked into other areas of misconduct.
The Imprest Fund was a petty-cash fund: appropriately, as far as could be determined, only $1,700 was missing. The investigators found evidence that at least one FBI official, unnamed, used the fund for personal purchases. G. Speights McMichael, the Bureau’s chief procurement officer, and one of the “witnesses” to Tolson’s will, was cashier of the fund. He refused to assist the investigators.
Nicholas P. Callahan, assistant director of the administrative division, and another of the “witnesses” to Tolson’s will, controlled the Confidential Fund from 1946 to 1973. He could authorize disbursements, as could his boss, John P. Mohr, assistant to the director for administrative affairs, and his bosses, Associate Director Clyde Tolson and Director J. Edgar Hoover. The JD investigators found that at least $98,000 from this fund had been misused or misappropriated. In addition to the more than $75,000 used to purchase electronics equipment, some $23,000 was spent on public relations, including room rentals, food, drinks, and gifts for visiting foreign and domestic law enforcement officials.
To disguise their use, these monies were withdrawn from the Treasury in the form of travel vouchers, which were then converted into cash. Contrary to federal regulations, none of this money was returned at year’s end. When audited by the special team in 1976, the fund amounted to only about $34,000. Although no evidence was found indicating that any senior FBI official applied these funds to his own use, it was impossible to say exactly where the money went, as there was no record of many of the actual expenditures.
The investigators found more questionable expenses when they looked into the activities of the Special Agents Mutual Benefit Association (SAMBA), a private organization designed to provide life and health insurance to FBI employees. SAMBA monies were used to pay for football season tickets, wedding and anniversary gifts, and Christmas and retirement parties (John Mohr’s exit cost $635.21, which included the cost of a Sears, Roebuck fishing boat).
And then they came to the FBI Recreational Association: J. Edgar Hoover’s personal money-laundering operation. Organized in 1931, and supported by annual dues from FBI employees, the FBIRA had as its stated purpose the promotion of athletic, social, and welfare activities. The latter term was interpreted rather loosely: as Callahan explained it, any money spent promoting the FBI’s general welfare was in the best interests of its employees.
Aside from the publication of a monthly magazine called the Investigator, there had always been some mystery as to what the money was used for. When agents in the field complained that, although their contributions were mandatory, they had no say in how the money was spent, a field agent was appointed to the fund’s five-man board of directors, apparently in an attempt to still the criticism. At his first meeting the agent naively asked how much money was in the fund. His answer was “a very heavy silence.”34 Shortly after this, it was decided that his presence on the board wasn’t needed after all, and it was again staffed solely by headquarters personnel.
Although many of its records had been destroyed, the special team found that between 1958 and 1972 over $55,000 had been expended on receptions for FBI National Academy students and guests. Another $2,000 had gone for other public relations expenses. Between 1951 and 1972 Callahan withdrew $39,590.98 for something called the Library Fund. There is no record of where this money went. Shortly after Hoover’s death, Mohr and Callahan discontinued the Library Fund and destroyed all of its records.
It is known that in excess of $200,000 from Hoover’s book and movie royalties were donated to the FBIRA. After that it vanishes from sight. Exactly how much of this money went into the pockets of Hoover, Tolson, and others will never be known. Lacking a paper trail, the Justice Department team was forced to conclude, “There is no evidence that these Bureau officials converted the money to their own use and, therefore, no evidence of criminal intent as required under Title 18, United States Code, Section 654.”35 Besides, the chief suspects, J. Edgar Hoover and Clyde Tolson, were beyond prosecuting.
A partial list of improvements to J. Edgar Hoover’s home and other special “perks” he received as America’s top cop has already been given. Tolson, who had always lived in an apartment and seemed less concerned with possessions, did less well, although he, too, had the use of a government limousine and an FBI driver and used the same grade-fifteen accountant to prepare his tax returns and handle his investments.
Hoover had his books and Tolson his inventions, which included a reusable bottle cap, a device to raise and lower windows automatically (LBJ had one installed in his bedroom in the White House), and equipment to operate emergency windows in aircraft and space vehicles. Although Tolson had the ideas, employees of the FBI Laboratory made them workable. However, unlike Hoover, who took out copyrights in his own name for books written by FBI employees, Tolson patented the devices in the name of the FBI and didn’t personally profit from any of them. He did, however, have the bottle caps gold-plated by the lab for use as gifts.
Apparently presuming that what was good enough for the director was good enough for them, other top FBI officials—all on the administrative side of the Bureau—decided to claim their fair share. There is no firm date as to when the perks started filtering down the chain of command. (Hoover had extensive work done on his home, at government expense, even before he moved in, in 1938.) But it seems to have begun, in a limited way, in the mid-1950s, just after Tolson suffered his first stroke and was no longer able to function as watchdog of the Bureau, and it increased significantly in the two decades that followed.
John Mohr had his Cadillac washed, gassed up, repaired, and serviced by FBI employees, who also repaired and repainted the body of his son’s MG and constructed an elaborate dental exhibit for the son, who was a dentist. Radio Engineering Section employees repaired Mohr’s car radio, his television, and his stereo and installed a new FM tuner, telephones, hi-fi speakers, and a burglar alarm system in his home (Mohr paid for the telephones and speakers). Exhibits Section employees painted his desk and a drawing board, built him a birdhouse, shaved the doors in his home to accommodate new carpeting, and duplicated many of the same gifts they had given the director, including a coat of arms, a dresser-top valet, and a portable liquor cabinet in the shape of a wine cask.
Mohr apparently had a thing for walnut. At his direction the Exhibits Section made him a walnut cigar box, a walnut tape cartridge rack, a walnut wine cabinet (estimated value $2,000), and two walnut gun cases.
Mohr was also the recipient of pirated record albums, which had been copied by the Radio Engineering Section on the instructions of the former assistant to the director Cartha D. DeLoach.
Mohr continued to receive many of these services after he retired from the FBI in June 1972.
Since Hoover and Mohr had them, Nicholas Callahan also had to have a coat of arms, a dresser-top valet, and a portable wine-cask liquor cabinet.
Exhibits Section employees silk-screened a felt tabletop for Callahan, for board games, cut his doors to accommodate new carpeting, made him walnut fishing-rod racks and shelving, assembled a lathe fence for his beach house to prevent sand erosion, printed maps giving directions to the beach house, waterproofed his shed roof, had a house sign made for his daughter and son-in-law, framed his personal photographs, and gave him a plaque with an Irish prayer.
Callahan apparently had a thing for plastic and Styrofoam. The Exhibits Section fashioned Styrofoam nautical objects to decorate his beach house and made him a set of plastic stack tables, as well as a plastic desk memento as a gift for a friend. Callahan also received considerable services to his automobile and “borrowed” a Polaroid camera to take personal photographs, the Bureau supplying the film.*
Ivan W. Conrad, former assistant director of the FBI Laboratory, and a ham radio operator, was
found to have taken a large quantity of FBI equipment to his home, including voltmeters, wattmeters, battery testers, stereo amplifiers, consoles, speakers, microphones, cables, sidewinders, mixers, tape recorders, transformers, and other electronic gadgety. Conrad retired from the FBI in July 1973. When the Inspection Division team questioned him about the “unaccounted-for equipment” in early December 1975, he denied any knowledge of it. But the questions must have jogged his memory, since later that same month he arranged for U.S. Recording to pick up over $20,000 worth of equipment—much of it never used—for return to the firm’s warehouse. A year later, when questioned by the Justice Department team, which had learned of the secret shipment, Conrad asserted that he had never intended to convert the equipment to his own use: he had kept it on hand for “special projects” for Director Hoover, he said, and had planned to return it after his death. When confronted with the fact that Hoover had died in May 1972 and USRC had made the pickup in December 1975, two and a half years later, Conrad confessed to being “tardy.” His memory refreshed once again, Conrad now returned, this time to the FBI, still another shipment, which included auto radios, control cables, heads, speakers, antennas, assorted accessory equipment, a stereo receiver, more tape recorders, microphones, and a sound-recording set.
Of all the subjects of the Justice Department investigation, only John Dunphy, former chief of the Exhibits Section and another of the “witnesses” to Clyde Tolson’s will, was convicted of a crime. In return for his resignation and his cooperation in other phases of the investigation, Dunphy was allowed to plead guilty to a single misdemeanor—using about $100 worth of lumber to build a birdhouse and other personal items—and fined $500.†
Ivan Conrad gave the Justice Department a check for $1,500, as compensation for his use of the electronics equipment.
Ordinarily such an investigation would have been kept in-house. But in the post-Watergate climate, Griffin B. Bell, who had replaced Levi as attorney general, decided to make this one public.*
The chief casualty was the reputation of J. Edgar Hoover, already badly battered by the 1975-76 revelations of the Church committee.† That the director of the Federal Bureau of Investigation, Mr. Law Enforcement himself, the man most often voted America’s most respected public official, had been a petty thief during most of his years in office seemed to shock the public more than the fifteen-month-long probe into FBI wiretapping, bugging, burglaries, COINTELPROs, and other illegal acts.
“It was, as corruption goes,” the Los Angeles Times editorialized, “pretty piddling stuff, almost embarrassingly so. But that’s not the point. The point is that the most powerful law-enforcement official in the world, who would severely discipline or fire underlings for the least infraction of the FBI’s rigid rules of personal conduct, could not himself resist the temptation to embezzle from the public purse with routine and unblushing regularity. And because Hoover was corrupt, some of those around him in the upper echelons of the Bureau felt that they too had the right to be corrupt.”37
It could have been worse. The Justice Department team came across evidence of other crimes which, because of limited time and staffing and the statute of limitations, it decided not to pursue. There were, for example, the purchases of firearms and automobiles and the FBI’s especially cozy relationship with the Ford Motor Company. Nor did it go into the relationship between the Bureau and the two leading auto rental companies, Hertz and Avis, which received priority treatment in cases of auto theft. Nor were most of the allegations of personal misconduct investigated, such as bulk meat and liquor purchases by headquarters personnel; the supplying of prostitutes to visiting FBI officials by the field offices (on one Chicago visit, a senior executive drunkenly demanded not one but two ladies of the night, and got them); or the cover-up and nonprosecution of criminal acts (for example, the SAC of one large field office beat his wife so badly that she had to be hospitalized, but her complaint was suppressed by the local sheriff, himself a former FBI agent). Nor did the special team look into the allegations regarding the construction costs of the new J. Edgar Hoover Building, including the charge that at least one of the companies involved was Mafia controlled. Perhaps it thought the public had had enough.
One other person was named in the 1978 Justice Department report: FBI Director Clarence M. Kelley.
Kelley was the third director since J. Edgar Hoover’s death. Although Acting Director L. Patrick Gray III’s tenure was brief—from May 3, 1972, to April 27, 1973—he did manage to accomplish a number of things. He opened the FBI to female agents, a move that did not win him much popularity in the male-oriented Bureau. Under Hoover, men had been allowed to smoke at their desks, but women couldn’t. Gray changed that. He reformed the dress code. Agents could wear colored shirts as well as white, and might even have sideburns, if they were kept short. Weight restrictions were relaxed. He ordered family situations be taken into account when transfers were considered. He tried to bring the FBI closer to the Justice Department. He visited fifty-eight of the fifty-nine field offices—”He was running for director,” a close associate said38—missing only Honolulu. But while he was away, the men he left in charge at FBIHQ plotted his demise.
Gray forced the resignation of such old Hooverites as John Mohr and Tom Bishop, the last head of Crime Records; he greatly reduced Crime Records in size, scattering its personnel, whom he didn’t trust, with good reason, all over the United States; and, to the delight of the agents, he replaced several of the most unpopular SACs—Robert Kunkel at WFO, Wesley Grapp at LAFO, and Richard Rogge at Honolulu—but it was too little too late. They were gunning for him, and they got him, making sure his misstatements and mistakes were widely publicized, deeply involving him in burglaries, taps, and bugs. He was almost totally dependent on Mark Felt, whom he’d named acting associate director, but Felt was more interested in promoting his own candidacy than in protecting Gray’s back.
Gray also made speeches that were just short of Nixon endorsements; destroyed the contents of Howard Hunt’s safe; gave the presidential counsel John Dean some eighty 302s, the raw unevaluated investigative reports which were never circulated outside the Bureau; allowed Dean, and attorneys for CREEP, to sit in on interviews, thus intimidating the witnesses to be less than forthright; and met surreptitiously with Dean and Ehrlichman to subvert the Watergate probe.
In February 1973 Nixon nominated Gray permanent director. His confirmation hearings—the first ever for an FBI director—began on the twenty-eighth and were in trouble from the start. Gray kept volunteering information that the judiciary committee members might otherwise have never found out about, and it was Gray who turned the Watergate investigators’ attention on Dean. By March 7 the White House had decided to abandon Gray, Ehrlichman telling Dean, “Well, I think we ought to let him hang there. Let him twist slowly, slowly in the wind.”39 On March 13 the president could be heard saying, on the White House tapes, “Gray, in my opinion, should not be the head of the FBI.” On March 22 he said, “The problem with him is he is a little bit stupid.” On April 27 Gray asked that his name be withdrawn. He’d lasted fifty-one weeks.*
When it was obvious that Gray was on his way out, Dean asked Mark Felt how the Bureau would react to the appointment of William Sullivan as director. Obviously upset—he’d thought that he was the most logical choice—the acting associate director predicted it would throw the Bureau into “chaos.” Another name much discussed, not always kindly, was that of John Mohr. Although he’d resigned nine months earlier, in June 1972, Mohr had kept in close touch with the remaining FBI executives, and many believed he’d secretly orchestrated Gray’s downfall. Instead Nixon appointed William Ruckelshaus, former head of the Environmental Protection Agency, acting director.
Ruckelshaus reported to work on April 30, 1973—the same day the president announced the resignations of Attorney General Richard Kleindienst, John Ehrlichman, H. R. Haldeman, and John Dean—to find a copy of a telegram on his desk. The acting associate director, all the as
sistant directors, and all the special agents in charge except one† had wired the president, urging him to appoint a highly qualified professional from “within the organization.”40 There was nothing personal about it, the FBI officials told Ruckelshaus; they were sure he was a nice guy; but he had no law enforcement experience and knew nothing of the traditions of the Bureau.
Ruckelshaus was a caretaker, and was treated as such. He lasted only seventy days, not long enough to make any significant changes. He did discover that Daniel Ellsberg had been overheard on the Kissinger wiretaps, which resulted in the dismissal of all charges against Ellsberg and Anthony Russo in the Pentagon Papers case. And he made one personnel change. After a clash with Mark Felt, whom he’d caught leaking stories to the press, Felt submitted his resignation. To his surprise, Ruckelshaus accepted it.
In choosing a permanent director, Nixon and Ruckelshaus went outside the FBI, but not far. They picked Clarence M. Kelley, a twenty-one-year-veteran of the Bureau (1940-61), who had spent his last twelve years as police chief of Kansas City, Missouri. Kelley had a reputation as a tough cop and a “strict but compassionate disciplinarian.” As the Los Angeles Times’s staffer Jack Nelson observed, “As director of the FBI, Clarence Kelley will face a situation similar to the one he encountered when he became police chief of Kansas City. A demoralized agency with a deteriorating public image.”41