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  Colson had recommended that the White House hire Hunt, also a former CIA agent and prolific novelist, as a consultant.

  While he was Nixon campaign chief, Mitchell repeatedly and categorically denied any involvement or knowledge of the break-in incident.

  When first contacted last night about the $25,000 check, Dahlberg said that he didn’t “have the vaguest idea about it . . . I turn all my money over to the (Nixon) committee.”

  Asked if he had been contacted by the FBI and questioned about the check, Dahlberg said: “I’m a proper citizen. What I do is proper.”

  Dahlberg later called a reporter back and said he first denied any knowledge of the $25,000 check because he was not sure the caller was really a reporter for The Washington Post.

  He said that he had just gone through an ordeal because his “dear friend and neighbor,” Virginia Piper, had been kidnapped and held for two days.

  Mrs. Piper’s husband reportedly paid $l million ransom last week to recover his wife in the highest payment to kidnapers in U.S. history.

  Dahlberg, 54, was President Nixon’s Minnesota finance chairman in l968. The decision to appoint him to that post was announced by then-Rep. MacGregor and Stans.

  In l970, Mr. Nixon appointed Dahlberg, who has a distinguished war record, to the board of visitors at the U.S. Air Force Academy.

  A native of St. Paul, Minn., Dahlberg has apparently made his money through Dahlberg Electronics, Inc., a suburban Minneapolis firm that sells miniature hearing aids.

  In l959, the company was sold to Motorola, and Dahlberg continued to operate it. In l964, he repurchased it.

  In l966, the company established a subsidiary to distribute hearing aids in Latin America. The subsidiary had offices in Mexico City. Three years later, Dahlberg Electronics was named the exclusive United States and Mexican distributor for an acoustical medical device manufactured in Denmark.

  Active in Minneapolis affairs, Dahlberg is a director of the National City Bank & Trust Co. of Fort Lauderdale. In l969, he was named Minneapolis’ “Swede of the Year.”

  Mitchell Controlled Secret GOP Fund

  By Carl Bernstein and Bob Woodward

  Washington Post Staff Writers

  Friday, September 29, 1972

  John N. Mitchell, while serving as U.S. Attorney General, personally controlled a secret Republican fund that was used to gather information about the Democrats, according to sources involved in the Watergate investigation.

  Beginning in the spring of 1971, almost a year before he left the Justice Department to become President Nixon’s campaign manager on March 1, Mitchell personally approved withdrawals from the fund, several reliable sources have told The Washington Post.

  Those sources have provided almost identical, detailed accounts of Mitchell’s role as comptroller of the secret intelligence fund and its fluctuating $350,000-$700,000 balance.

  Four persons other than Mitchell were later authorized to approve payments from the secret fund, the sources said.

  Two of them were identified as former Secretary of Commerce Maurice H. Stans, now finance chairman of the President’s campaign, and Jeb Stuart Magruder, manager of the Nixon campaign before Mitchell took over and now a deputy director of the campaign. The other two, according to the sources, are a high White House official now involved in the campaign and a campaign aide outside of Washington.

  The sources of The Post’s information on the secret fund and its relationship to Mitchell and other campaign officials include law enforcement officers and persons on the staff of the Committee for the Re-election of the President.

  Last night, Mitchell was reached by telephone in New York and read the beginning of The Post’s story. He said: “All that crap, you’re putting it in the paper? It’s all been denied. Jesus. Katie Graham [Katharine Graham, publisher of The Washington Post] is gonna get caught in a big fat wringer if that’s published. Good Christ. That’s the most sickening thing I’ve ever heard.”

  Told that the Committee for the Re-election of the President had issued a statement about the story, Mitchell interjected: “Did the committee tell you to go ahead and publish that story? You fellows got a great ball game going. As soon as you’re through paying Williams (Edward Bennett Williams, whose law firm represents the Democratic Party, as well as The Washington Post), we’re going to do a story on all of you.” Mitchell then hung up the phone.

  Asked to comment on the Post report, a spokesman for President Nixon’s re-election committee, Powell Moore, said, “I think your sources are bad; they’re providing misinformation. We’re not going to comment beyond that.”

  Asked if the committee was therefore denying the contents of the story, Moore responded: “We’re just not going to comment.”

  Later, Moore issued a formal statement that read: “There is absolutely no truth to the charges in the Post story. Neither Mr. Mitchell nor Mr. Stans has any knowledge of any disbursement from an alleged fund as described by the Post and neither of them controlled any committee expenditures while serving as government officials.”

  Asked to discuss specific allegations in the story, Moore declined, saying: “The statement speaks for itself.”

  According to The Post’s sources, the federal grand jury that investigated the alleged bugging of the Democrats’ Watergate headquarters did not establish that the intelligence-gathering fund directly financed the illegal eavesdropping.

  Investigators have been told that the only record of the secret fund — a single sheet of lined ledger paper, listing the names of about 15 persons who received payments and how much each received — was destroyed by Nixon campaign officials after the June 17 break-in at the Watergate.

  It has been established, however, that G. Gordon Liddy, the former Nixon finance committee counsel who was one of the seven men indicted in the Watergate case, withdrew well in excess of $50,000 in cash from the fund, the sources said.

  Some of the still-unrevealed intelligence activities for which the secret fund was used were described by one federal source as potentially “very embarrassing” to the Nixon campaign if publicly disclosed. Other sources said they expect these activities to be revealed during the trial of the seven men indicted in the Watergate case.

  Mitchell served as the President’s campaign manager for three months and resigned on July 1, citing an ultimatum from his wife that he leave politics.

  The former attorney general has repeatedly denied that his resignation was related in any way to the Watergate bugging or that he had any knowledge of it.

  When asked whether it would be illegal for an incumbent attorney general to control disbursements from a political campaign fund, one federal attorney involved in the Watergate case said yesterday: “I don’t know. There’s a question.”

  A spokesman for the Justice Department said there is no law prohibiting the political activity of a member of the President’s cabinet.

  Last month, the existence of the secret fund was cited as a “possible and apparent” violation of a new, stricter campaign finance disclosure law in a report by the General Accounting Office, the investigative arm of Congress.

  The GAO said the fund contained $350,000 as of May 25 and was possibly illegal, because receipts and expenditures were not publicly reported for a six-week period after the new disclosure law took effect on April 7.

  The fund, which was kept in a safe in Stans’ office, primarily consisted of cash contributions made to the Nixon campaign over an 18-month period, according to sources.

  Although the only record of the fund was destroyed, it is known that investigators were able to reconstruct at least a partial list of recipients.

  In addition to Liddy, those who received payments included Magruder, who withdrew about $25,000 from the fund; Herbert L. Porter, scheduling director of the Nixon committee, who received at least $50,000; several White House officials and thus-far unidentified persons who were not on the regular Nixon campaign or White
House payroll.

  Magruder has denied he received any money from the fund, and Porter has not commented.

  At its inception, the secret intelligence fund was wholly controlled by Mitchell, the sources said, with the other four officials gaining authority to approve disbursements later on.

  According to The Post’s sources, the primary purpose of the secret fund was to finance widespread intelligence-gathering operations against the Democrats. It could not be determined yesterday exactly what individual projects were funded by the secret account.

  FBI Finds Nixon Aides Sabotaged Democrats

  By Carl Bernstein and Bob Woodward

  Washington Post Staff Writers

  Tuesday, October 10, 1972

  FBI agents have established that the Watergate bugging incident stemmed from a massive campaign of political spying and sabotage conducted on behalf of President Nixon’s re-election and directed by officials of the White House and the Committee for the Re-election of the President.

  The activities, according to information in FBI and Department of Justice files, were aimed at all the major Democratic presidential contenders and — since 1971 — represented a basic strategy of the Nixon re-election effort.

  During their Watergate investigation, federal agents established that hundreds of thousands of dollars in Nixon campaign contributions had been set aside to pay for an extensive undercover campaign aimed at discrediting individual Democratic presidential candidates and disrupting their campaigns.

  “Intelligence work” is normal during a campaign and is said to be carried out by both political parties. But federal investigators said what they uncovered being done by the Nixon forces is unprecedented in scope and intensity.

  They said it included:

  Following members of Democratic candidates’ families and assembling dossiers on their personal lives; forging letters and distributing them under the candidates’ letterheads; leaking false and manufactured items to the press; throwing campaign schedules into disarray; seizing confidential campaign files; and investigating the lives of dozens of Democratic campaign workers.

  In addition, investigators said the activities included planting provocateurs in the ranks of organizations expected to demonstrate at the Republican and Democratic conventions; and investigating potential donors to the Nixon campaign before their contributions were solicited.

  Informed of the general contents of this article, The White House referred all comment to The Committee for the Re-election of the President. A spokesman there said, “The Post story is not only fiction but a collection of absurdities.” Asked to discuss the specific points raised in the story, the spokesman, DeVan L. Shumway, refused on grounds that “the entire matter is in the hands of the authorities.”

  Law enforcement sources said that probably the best example of the sabotage was the fabrication by a White House aide — of a celebrated letter to the editor alleging that Sen. Edmund S. Muskie (D-Maine) condoned a racial slur on Americans of French-Canadian descent as “Canucks.”

  The letter was published in the Manchester Union Leader Feb 24, less than two weeks before the New Hampshire primary. It in part triggered Muskie’s politically damaging “crying speech” in front of the newspaper’s office.

  Washington Post staff writer Marilyn Berger reported that Ken W. Clawson, deputy director of White House communications, told her in a conversation on September 25th that, “I wrote the letter.”

  Interviewed again yesterday, Clawson denied that he had claimed authorship of the “Canuck” letter, saying the reporter must have misunderstood him. “I know nothing about it,” Clawson said.

  William Loeb, publisher of the Manchester paper, said yesterday that although the person who signed the letter — a Paul Morrison of Deerfield Beach, Fla. — has never been located, “I am convinced that it is authentic.”

  However, Loeb said he is investigating the possibility that the letter is a fabrication because of another letter he received about two weeks ago. The recent letter, Loeb said, maintains that another person was paid $1,000 to assist with the “Canuck” hoax.

  B. J. McQuaid, Editor-in-Chief of the Union-Leader, said earlier this year that Clawson had been “useful” to the paper in connection with the “Canuck” letter. Though McQuaid did not elaborate, he too said that he believed the original letter was authentic.

  Clawson, a former Washington Post reporter, said yesterday that he met McQuaid only briefly during the New Hampshire primary while lunching in the state with editors of the newspaper.

  He denied that he provided any assistance with the letter. Clawson said the first time he heard of the “Canuck” letter was when “I saw it on television” following the Muskie speech.

  Immediately following his “crying speech,” Muskie’s standing in the New Hampshire primary polls began to slip and he finished with only 48 percent of the Democratic primary vote — far short of his expectations.

  Three attorneys have told The Washington Post that, as early as mid-1971, they were asked to work as agents provocateurs on behalf of the Nixon campaign. They said they were asked to undermine the primary campaigns of Democratic candidates by a man who has been identified in FBI reports as an operative of the Nixon re-election organization.

  All three lawyers, including one who is an assistant attorney general of Tennessee, said they turned down the offers, which purportedly included the promise of “big jobs” in Washington after President Nixon’s re-election. They said the overtures were made by Donald H. Segretti, 31, a former Treasury Department lawyer who lives in Marina Del Ray, Calif.

  Segretti denied making the offers and refused to answer a reporter’s questions.

  One federal investigative official said that Segretti played the role of “just a small fish in a big pond.” According to FBI reports, at least 50 undercover Nixon operatives traveled throughout the country trying to disrupt and spy on Democratic campaigns.

  Both at the White House and within the President’s re-election committee, the intelligence-sabotage operation was commonly called the “offensive security” program of the Nixon forces, according to investigators.

  Perhaps the most significant finding of the whole Watergate investigation, the investigators say, was that numerous specific acts of political sabotage and spying were all traced to this “offensive security,” which was conceived and directed in the White House and by President Nixon’s re-election committee.

  The investigators said that a major purpose of the sub rosa activities was to create so much confusion, suspicion and dissension that the Democrats would be incapable of uniting after choosing a presidential nominee.

  The FBI’s investigation of the Watergate established that virtually all the acts against the Democrats were financed by a secret, fluctuating $350,000 -$700,000 campaign fund that was controlled by former Attorney General John N. Mitchell while he headed the Justice Department. Later, when he served as President Nixon’s campaign manager, Mitchell shared control of the fund with others. The money was kept in a safe in the office of the President’s chief fundraiser, former Secretary of Commerce Maurice Stans.

  According to sources close to the Watergate investigation, much of the FBI’s information is expected to be revealed at the trial of the seven men indicted on charges of conspiring to eavesdrop on Democratic headquarters at the Watergate.

  “There is some very powerful information,” said one federal official, “especially if it becomes known before Nov. 7.”

  A glimpse of the Nixon campaign’s spying and disruptions are to be found in the activities of Segretti. According to investigators, Segretti’s work was financed through middlemen by the $350,000-$700,000 fund.

  Asked by The Washington Post to discuss Segretti, three FBI and Justice Department officials involved in the Watergate probe refused. At the mention of Segretti’s name, each said — in the words of one — “That’s part of the Watergate investigation.” One of the officials, howe
ver, became angry at the mention of Segretti’s name and characterized his activities as “indescribable.”

  Segretti, visited in his West Coast apartment last week by Washington Post special correspondent Robert Meyers, repeatedly answered questions by saying, “I don’t know.” “I don’t have to answer that.” And “No comment.” After 15 minutes, he said: “This is material for a good novel, it’s ridiculous,” and chased the reporter outside when he attempted to take a picture.

  According to the three attorneys interviewed by The Post, Segretti attempted to hire them in 1971 as undercover agents working on behalf of President Nixon’s re-election. All three said they first met Segretti in 1968, when they served together in Vietnam as captains in the Army Judge Advocate General Corps.

  One of the lawyers, Alex B. Shipley, a Democrat who is now assistant attorney general of Tennessee, said Segretti told him, “Money would be no problem, but the people we would be working for wanted results for the cash that would be spent.”

  Shipley, 30 added: “He [Segretti] also told me that we would be taken care of after Nixon’s re-election, that I would get a good job in the government.”

  According to Shipley, Segretti said that the undercover work would require false identification papers under an assumed name; that Shipley recruit five more persons, preferably lawyers, for the job; that they would attempt to disrupt the schedules of Democratic candidates and obtain information from their campaign organizations; that Shipley would not reveal to Segretti the names of the men he would hire; and that Segretti could never reveal to Shipley specifically who was supplying the money for the operation.

  Shipley recalled in a telephone interview: “I said, ‘How in hell are we going to be taken care of if no one knows what we’re doing?’ and Segretti said: ‘Nixon knows that something is being done. It’s a typical deal.’ Segretti said, ‘Don’t-tell-me-anything-and-I-won’t-know.’”