Nixon campaign's covert cash pool

The Nixon campaign's covert cash pool was the financial thread connecting political espionage to the later effort to contain the Watergate scandal. Kept inside the Committee for the Re-election of the President (CRP), it financed sensitive political projects through aides and intermediaries. Its history emerged in fragments: bank checks, a treasurer's recollections, a reported account, and money moved after the arrests. Those fragments revealed not just where funds went, but how authority could operate through a chain of subordinates while the senior figures remained insulated from direct transactions.

Structure and Control

The fund first became visible as more than an isolated source of cash when The Washington Post reported that principal assistants to John Mitchell controlled money held in a special CRP account. The account contained more than $300,000 earmarked for sensitive political projects, and G. Gordon Liddy was among its recipients. Records relating to the account had been destroyed. The same report connected Hugh Sloan's resignation as treasurer to his suspicions about what was happening. Each detail described a different part of the mechanism: a reserve of money, people empowered to distribute it, payments to an operative, and the loss of records that might have clarified its use.

Sloan's account of authorizations made the chain more specific. When he was first approached for money, he called Mitchell, then Attorney General, at the Justice Department. Mitchell told him to release it. The procedure took seconds, seemed routine within a campaign budget exceeding $50 million, and had recurred in phone calls beginning in 1971. At first Mitchell was the sole person authorizing expenditures; authority was later passed to others, including Jeb Magruder. Sloan's description therefore went beyond identifying Mitchell as one of several people with control: it placed him at the start of the authorization process, while also showing how approval could subsequently be delegated.

The account of H. R. Haldeman's position described a different kind of control. Sloan said that Haldeman stood behind the four people who received bulk payments: Herbert Kalmbach, Liddy, Magruder, and Porter. Yet Haldeman had never personally instructed Sloan to hand out a payment. Magruder, Kalmbach, Maurice Stans, and Mitchell had effectively acted on Haldeman's behalf, while Haldeman remained insulated from the fund's transactions. Sloan added that Stans frequently complained that too much money was being given out. The resulting picture was not a simple line of direct orders: operational authority passed through several hands, while the White House chief of staff was described as standing behind the recipients without personally issuing payment instructions.

Following the Money

A separate trail of checks helped establish the scale and complexity of campaign money moving through accounts associated with the Watergate suspects. Martin Dardis had four Mexican checks, each drawn on a different American bank and endorsed with an illegible signature above a typed notation identifying Manuel Ogarrio. Bernstein copied those checks and then found a fifth, slightly wider check: a $25,000 cashier's check drawn on the First Bank and Trust Co. of Boca Raton and payable to Kenneth H. Dahlberg. The fifth check had been deposited on April 20 alongside the four Mexican checks, producing a total deposit of $114,000. Four days later Bernard Barker withdrew $25,000; the remaining $89,000 was withdrawn separately. At that point, the reporters still did not know who Dahlberg was. The check supplied a concrete financial link to investigate, not by itself a complete account of who had ordered or benefited from every transaction.

That distinction mattered throughout the investigation. Sloan's description of Mitchell's repeated authorizations supported a claim about control; his account of the fund's later structure identified delegated authority; and the checks supplied a traceable sequence of deposits and withdrawals. These forms of evidence were related but not interchangeable. A money trail could show how funds moved without settling who had directed each expenditure, while a witness's account could identify a pattern of authorization without independently documenting every payment. The fund's significance accumulated as the reporting connected these partial records rather than treating any single clue as the whole explanation.

From the Break-In to the Cover-Up

The early reporting said Liddy had received money from the fund and that the account supported sensitive political projects. It also reported that Sloan had quit after becoming suspicious of Watergate. The story's larger implication was that the indictments had not ended the conspiracy and that CRP employees might know more about the operation. Yet the specific claim that withdrawals financed the Watergate break-in was initially handled cautiously: Deep Throat said the withdrawals financed the bugging, but the Bookkeeper could not confirm that allegation. The reporters and editors instead described the money as financing widespread intelligence-gathering activities against Democrats. They were developing an evidentiary rule against publishing a potentially criminal allegation unless two sources confirmed it.

The public response initially fell well short of the reporting's implications. The next morning, The New York Times did not mention the secret-fund stories, the television networks carried neither, and most newspapers did not report them. White House press secretary Ron Ziegler was not asked about the stories. When the reports did draw official responses, CRP's statement dismissed The Washington Post's sources as misinformed, while Robert Mardian denied the account and described it as a lie. The Los Angeles Times and the Washington Star-News focused on Mardian's denial. The gap between the reported evidence and its limited reception made the fund a contested public fact as well as a hidden financial system.

Months later, Hugh Sloan told the reporters that the fund had not ceased to exist after the Watergate arrests. He said money had been transferred from Stans' safe to Fred LaRue, but the reporters had not published the information because they could not confirm it or establish how the money had been spent. Sloan estimated the amount within $5,000 of $80,000; the reporters chose the more conservative figure of $70,000. He said the transfer had taken place in July, before anything about the money had come out, and that Stans had approved it. Sloan presumed someone had told Stans to make the transfer, but did not know who. The account established the movement and approval of the cash without resolving who had initiated it.

Hush Money and the Fund's Meaning

The question of what happened to the money sharpened when James McCord testified that cash payoffs to the Watergate conspirators had come directly from CRP. The possibility that the surviving fund had financed silence linked the original espionage operation to the later cover-up. Sloan had identified LaRue as the recipient of money transferred from Stans' safe; LaRue had been Mitchell's deputy and a co-director of the effort to manage the Watergate aftermath. McCord identified Kenneth Parkinson and Dorothy Hunt as conduits for payments to the conspirators. The emerging account thus connected a continuing pool of campaign cash, transfers through senior officials, and payments reaching the defendants, though the reporters still had to establish precisely how the money had been used.

Woodward asked a Justice Department official whether prosecutors were investigating whether the $70,000 LaRue received from Stans' safe had been used for payoffs. The official said prosecutors were examining every penny of committee money to determine whether it had gone to such payments, including the money from the safe. The inquiry returned the fund to its starting point: the same concealed pool associated with the Watergate break-in was now being examined as a possible source of the cover-up. Its story was therefore not only one of campaign finance, but of how financial secrecy could span the operation and its aftermath—and how tracing the money could bring the two into a single chain of investigation.