Killian Donohue

The Watergate Scandal: Inside look into Davis and Cox & Charles Rebozo 

The Watergate Hotel

The Watergate Hotel

In June of 1972 James P. Donohue, Jr. was finishing his work on his Masters when the Watergate burglary was halted. He started law school in September of that same year. At that time, Watergate was just a small story, not gathering much interest from the public. However, by January of 1974, now a second year law student at Fordham University, it was a major news story.  It was at that point, that James was hired as a part-time law clerk by the New York firm of Davis and Cox and personally interacted with one of the many players who came before the Senate Watergate Committee. In that role, he saw firsthand now the concept of simply being forthright was foreign to many people, not just Nixon.  In his book, American Dreams, H.W. Brands, in examining the Watergate Scandal, speculates what could have been, “Had Nixon stepped forthrightly in front of the Washington Post story, accepted responsibility for the actions of the Plumbers, and looped off a few heads among the White House staff… But forthrightness wasn’t in Nixon.”[1]  As will be shown from James Donohue’s experience at the firm of Davis & Cox, Nixon was not the only one who attempted to stonewall instead of stepping up and accepting responsibility.  This was the same attitude shown by Chester Davis, of Davis & Cox, while James Donohue worked there, although almost certainly for other reasons. Chester Davis was one of the people called before the Senate Watergate Committee.  James Donohue’s interaction with Chester Davis was small, but interesting.  In fact, he referred to as an, “outside seat on one of the peripheral issues involving one of the peripheral issues,”[2] of the Watergate scandal.

The Watergate scandal had its roots in the presidential election of 1972 when President Richard Nixon was seeking reelection. He was opposed by the Democratic candidate, George McGovern.  Nixon’s re-election at the time was considered fairly secure. In fact, he won easily.  Despite this, during the campaign, an attempt to burglarize the Democratic National headquarters at the Watergate Hotel was foiled by a security guard, Will Franks.[3]  It seemed too incredible to believe that this burglary effort was somehow related to the election, in light of Nixon’s commanding lead.  Nevertheless, when the burglars were arrested, they initially asserted their 5th amendment privilege as to what they were doing and refused to talk.  The judge who took the case, Judge John Sirica, made it clear that he did not think the arrested defendants were being cooperative or telling the truth. To encourage them to change their position, he gave them significant jail time.[4] By that time, the well-known Washington Post reporters, Robert Woodward and Carl Bernstein, had already broken the story that one of the burglars was connected to Howard Hunt (a former CIA agent then working for the re-election of the President). To arouse even more interest, they alleged that Hunt was connected to Charles Colson the special legal assistant to President Nixon[5].  In short, the Washington Post reporters were drawing a line between the burglars to the President.

In May of 1973 the Senate Committee began to investigate the Watergate break-in and an independent special prosecutor, Archibald Cox, was named to investigate possible presidential improprieties.[6] Ironically, his brother, Maxwell Cox, was the other named partner, in the law firm Davis and Cox that James was working at. That summer, the Senate Committee found out that Nixon has been taping conversations in the oval office and both the Senate Committee and Archibald Cox demanded the tapes be turned over. Nixon refused.[7] This created a major political issue. It became even more serious when Nixon told his Attorney General to fire Cox. The Attorney General, Eliot Richardson, refused pointing out he had promised the Senate that Archibald Cox would be independent of the Attorney General’s office on this matter and he would not interfere with Cox’s work. Rather than comply with the order, he resigned his office. Nixon tried again with deputy attorney general, who also resigned. Finally, Robert Bork, the third in command, reluctantly carried out the order.  This event came to be referred to as the Saturday Night Massacre. Watergate and related issues were now all over the news and James Donohue recalls “the government was at war with itself and the only thing that seemed to be going on in Washington was Watergate investigations.”[8]

While this is going on, a somewhat collateral issue came out of the Watergate investigation.  This concerned an allegation that billionaire Howard Hughes, in 1968, had made a $100,000.00 loan or gift to Richard Nixon, using an individual known as Charles “Bebe” Rebozo as the individual who received the money. Rebozo was a banker in Florida.  He had become a friend of Nixon’s years earlier.[9]  In August of 1973, the Woodward-Bernstein reporters, following up on their Watergate story, broke another story that Rebozo may have been involved in laundering secret campaign contributions to Nixon personally.  The amount of $100,000.00 reported as being the amount they had learned about.  Eventually, it was asserted that the source of $100,000 of these the funds was Howard Hughes. [10]

As investigators followed up that lead, Rebozo acknowledged he had received $100,000 from a Hughes representative, but claimed he never delivered the funds to Nixon or his campaign, but rather held the Hughes money in a safe deposit box for several years. He further asserted that believing the source of the funds might embarrass the President, he decided to return it several years later untouched, to Howard Hughes through one of Hughes’ representatives.  That story seemed incredible and eventually the Senate Committee advised the cash had been delivered to Howard Hughes personal attorney, Chester Davis, wanted to see what he had done with it.   In December of 1973, Chester Davis appeared before the Senate Committee with a briefcase. He reportedly opened the briefcase and dumped the contents on the desk, saying “Here’s the god dam money”.[11] It was 100 packets of 100 dollar bills, allegedly the $100,000 that Rebozo claimed Howard Hughes had provided him in 1968 and he had returned several years later.

The following month James Donohue had become a part time law clerk at the New York law firm of Davis & Cox.  The “Davis” was the same Chester Davis, the personal attorney of Howard Hughes who only a month before had appeared before the Senate Committee.  The “Cox” was Maxwell Cox, who was the brother of Archibald Cox, the Special Prosecutor who had been fired by Nixon just several months earlier. James Donohue knew prior to starting that Davis and Cox was considered a tough litigation firm. Only after he arrived, did he realize that among other things the frim was dealing with a request that Howard Hughes appear before the Senate Committee with respect to the $100,000.00 “loan”.

While at the firm, Donohue’s involvement had little to do with Chester Davis or the Howard Hughes loan.  His assignment was essentially to digest depositions and do research and memorandum of laws on specific legal issues, primarily involving a securities action unrelated to the Watergate hearings. The transcripts involving testimony before the Watergate Committee fell within the purview of one of the associates who worked in the adjoining offices. To the extent there were discussions, by the associates on their progress, it was with the partners, whose offices were even further down the hall. James Donohue did recall, early in his employment, looking over at another table while digesting depositions in another case and seeing transcripts from the hearings before the Senate Committee investigating Watergate. James, “assumed that there was some connection, and then thinking about it, the Bebe Rebozo connection came to mind because that issue had to deal with money that allegedly came from Howard Hughes.”[12]  During his time there, he would have contact with both Chester Davis and Maxwell Cox and the associate working on the $100,000.00 Hughes loan.

Chester Davis was the type of person who was held in high regard by those who knew him and often, with more than a little fear. His work for Hughes apparently kept in out of the office most of the time. In fact, the first time James ran into Chester Hughes, he got a first-hand look at how Chester Davis was viewed by other lawyers.  It was a weekend and he was working in the office with the associate he reported to.  This particular associate had regularly impressed him as being an individual who was unintimidated by anything. He regularly took on other large law firms, large businesses (like the New York Stock Exchange) and even the Federal government.  On the day in question, James Donohue was going back to the office after a short lunch break, and another individual got on the elevator with him and followed him out of the elevator on the same floor.  When James Donohue walked into the office to sign in, the man still followed him. The receptionist said “hello” to this stranger, who then turned and headed down the hall to where the offices were located.  James turned to the receptionist and said, “Who’s that.” And the answer he was given was, “That’s Mr. Davis.”[13]

This being his first encounter with Chester Davis, as James returned to his work place, he stopped by the associate’s office, under whom he had been working. He told him, without much concern, that he had just come up the elevator with Mr. Davis.  As he recalled, the shocked response was, “Chester’s here?” The response clearly indicated that this was no joking matter. The Associate excused himself from what he was doing and headed down the hall to see Chester. It was clear, at that moment, that Chester Davis was not an individual to take lightly, and that the story about him essentially throwing the money at the Senate Watergate Committee, was probably true.

Based on the newspaper reports, it was clear that Chester Davis was also not going to “cooperate” or be forthcoming with the Senate Committee if he could avoid it.  Obviously, as a lawyer, he had a client to represent, yet it did not go unnoticed in the newspapers that his positions were not always consistent. For a while Davis was doing whatever he could to prevent the Watergate Committee from forcing Howard Hughes to testify.  The contradiction apparently did not cause Chester Davis any concern. The similarity, between Nixon’s efforts to stonewall the Senate investigation and the efforts of Chester Davis to stonewall any investigation into his client, were clear, even though the motives may have been different.

In the early part of 1974, the Watergate investigations began to produce results.  One of Nixon’s aids and even Nixon’s own personal counsel were pleading guilty to perjury charges or illegal campaign activities. Nixon was even named as an, “unindicated co-conspirator” in an indictment against sever of his former aids.[14] The focus, as the matter moved forward, continued to beam in on the Whitehouse tape recordings.   By now, a new special prosecutor had been appointed. He subpoenaed the tapes. Nixon and his lawyers refused to turn them over.[15]  The matter now fell into the hands of the courts.  By this time, the issues of the Hughes donation was dropping off the radar as the Senate Committee. While they had been considering trying to get Hughes to testify, essentially they dropped the pursuit of that part of the investigation, in no small part due to the opposition being put up by Chester Davis and his firm.

In July of 1974, the court ordered the tapes to be turned over.  Included in them was the “Smoking Gun” that showed that Nixon and some of his aids within a week of the burglary attempt, were talking about how to “cover-up” the connection to the White House. Within days, impeachment charges were being drafted and Republican leaders in the Senate told Nixon he would not survive the hearing and would be removed.  A few days later, Nixon resigned and the “Great National Nightmare” was over.[16]

About a month later, Nixon received a pardon from President Ford. The issue with Rebozo essentially ended when the $100,000 could not be shown to be recently manufactured. Nixon would, in grand jury testimony a year later, only recently released, confirm that as he far as he knew, Rebozo had held the funds for several years and then turned them over to Chester Davis.  No law was found to have been violated.  For Chester Davis, he continued to be a successful attorney and was involved in some other issues which made the press, but not because of anything that had to do with Nixon. As for James Donohue, this was his first experiences at a law firm and the lesson that one vigorously represented one’s client was clearly shown. He would go on to working at law firms on Wall Street eventually becoming a partner in the firm of Marchi Jaffe Cohen Crystal Rosner & Katz.

 

[1] H.W. Brands, American Dreams (p.182)

[2] Interview with James Donohue, April 11, 2016.

[3] Fred Emery, Watergate: The Corruption of American Politics and the Fall of Richard Nixon (New York, 1994) 132-3

[4] Bird, David, “Watergate Burglar Arrested on Charge of Coercion,” New York Times (New York, New York) Nov. 2, 1977

[5] Ken Hughes, Chasing Shadows: The Nixon Tapes, The Chennault Affair, And The Origins of Watergate (Virginia,2014) 152-9

[6] Genovese, Michael, The Watergate Crisis. (Connecticut, 1999), XXV.

[7] Lardner, George. “Nixon Refuses to Give Tapes to Jaworski: President Withhold.” The Washington Post (Washington, D.C.), May. 2, 1974.

[8] Interview with James Donohue, April 11, 2016.

[9] John M. Crewdson, “Report Questions Rebozo’s Account on Hughes Funds.” The New York Times (New York, N.Y), Jul. 11, 1974

[10] Crewdson, John. “Report Links Watergate to Hughes-Rebozo Funds.” The New York Times (New York, N.Y), Aug. 4, 1974.

[11] “Hughes cash ‘flung’ at panel,” Register Guard, Dec. 5, 1973, 3.

[12] Interview with James Donohue, April 11,, 2016.

[13] Interview with James Donohue, April 28, 2016.

[14] Genovese, Michael, The Watergate Crisis. (Connecticut, 1999), XXVII.

[15] Washington Post Staff, The Presidential Transcripts: With Commentary by the staff of the Washington Post (New York: Delacorte Press), XI.

[16] Klipatrick, Carroll. “Nixon Resigns: Richard Nixon Resign as 37th President of the United States.” The Washington Post (Washington, D.C), Aug. 09, 1974.