Herbert Kalmbach, who for the last five years has been
Nixon’s personal attorney, has emerged as one of the central
figures in the Watergate affair. He has been entrusted with the
secretive and sensitive duties that a president’s financial
dealings require. For example, he personally supervised the
purchase and renovation of the San Clemente estate. This
urbane, mysterious “Mr. Moneybags” of the cover-up was also
deputy chairman of the Nixon 1968 and 1972 campaign
finance committees under Maurice Stans. He has been credited
with raising $6 million for the 1968 campaign (out of a total
$35 million), much of it from Nixon’s powerful group of
Southern California friends in the Lincoln Club (see Lincoln
Club box). The Kalmbach-Stans fundraising was so successful
that $1.7 million was left over after the 1968 campaign. And
this money was the basis of Kalmbach’s deep Watergate
involvement.
Kalmbach distributed the extra campaign funds into num-
erous bank accounts he controlled with two other men:
Francis M. Raine, Jr., (H.R. Haldeman’s brother-in-law) and
Thomas W. Evans (Nixon’s law partner – see “Law Partners in
Washington” box). By 1972 only $500,000 of the $1.7 million
was left. A full account of what happened to the remaining
$1.2 million still remains to be given. Significant chunks were
utilized in a program of political sabotage against Nixon
enemies. For instance, $200- $400,000 was funneled to Albert
Brewer, who opposed George Wallace in the 1970 Alabama
gubernatorial race – an obvious attempt to sabotage Wallace’s
1972 presidential aspirations and remove him as a threat to
Nixon’s re-election. Kalmbach gave some $40,000 to Los
Angeles lawyer Donald Segretti, to finance a campaign of
political sabotage against Democratic front-runners, primarily
Edmund Muskie. Kalmbach had hired Segretti on the advice of
presidential assistant Dwight Chapin.
Prior to April 7, 1972, the date set by the new campaign
financing law for beginning to report donations, Kalmbach
solicited millions of dollars from such groups as the dairy
industry and numerous large corporations. Since he destroyed
all his campaign finance records once the heat was on, we have
no complete record of the secret donors.
After the Watergate “plumbers” were caught in June 1972,
the real criminals – Nixon and his most trusted aides – moved
quickly to hush their hired operatives. Kalmbach, with his
considerable acumen for behind-the-scenes financial deals,
took on the sensitive job of collecting and distributing the
hush-money. He gathered up to $500,000 for the Watergate
defendants from various sources. Some of it was again money
left over from 1968 campaign funds; some $350,000 was
CREEP (Committee to Re-Elect the President) money that
had been transferred to Haldeman’s White House safe and then
funneled to Kalmbach; $75,000 was from Thomas V. Jones,
Chairman of the Northrop Corp., a large defense contractor
and a client of Kalmbach’s law firm.
Kalmbach’s association with Nixon grew out of his friend-
ship with Robert Finch, Secretary of Health, Education and
Welfare in Nixon’s first administration, and a classmate of
Kalmbach’s at the University of Southern California Law
School. In 1958 Finch had enlisted Kalmbach’s aid as Orange
County Chairman of his successful campaign for Lieutenant
Governor of California. Up to that time, Kalmbach had been a
vice-president of the Security Title Insurance Company in Los
Angeles. In the late fifties and early sixties, Kalmbach prac-
ticed law in Newport Beach, California, except for a brief stint
in Arizona where he was the president of the Arizona Title &
Insurance Company. In 1962 he worked in Nixon’s unsuc-
cessful California gubernatorial bid against Pat Brown. From
1964-67 he served as a vice-president and director of the
Macco Realty Corp., a firm which eventually merged into
Great Southwest Corp., a Penn Central subsidiary (see Maurice
Stans article).
In 1967 Kalmbach joined a group of lawyers in establishing
the Newport Beach, California firm of Kalmbach, DeMarco,
Knapp & Chillingworth. It is clear from the following list of
clients that Kalmbach’s new firm received numerous lucrative
accounts as a result of his relationship with Nixon. Much of
the firm’s clients’ business is dependent on the rulings of
federal regulatory agencies. This raises obvious conflict of
interest situations for a lawyer whose clients include the
President of the United States as well as some of the nation’s
largest corporations which are regulated by the federal bureau-
cracy which he oversees. Among the firm’s numerous clients
listed in the Martindale-Hubbell Law Directory for the years
1969-72 (when Nixon was president) appear the following
names:
1969:
Atlantic Richfield (ARCO): Donald Kendall, a close
Nixon friend and chairman of Pepsico, is an ARCO
director and gave the Nixon campaign $60,000 in 1972.
Coldwell Banker: this real estate firm had a suit charging
them with barring Blacks from their housing dropped by
the Justice Department.
Great Southwest Corp.: this giant real estate firm was a
subsidiary of Penn Central (see article on Stans).
Glore Forgan-Staats: the New York investment. bank
headed by Stans.
1970:
Flying Tiger Line: according to Business Week (May 22,
1971) “The reason that Tiger has done so well is that in
August 1969 it began flying a new route across the
Pacific which it won through skillful maneuvering in
Washington. … Mrs. Chennault (Tiger VP for Inter-
national Affairs) is not only a formidable member of the
top Republican social set in Washington, but she retains
a lot of clout in the Orient…. Mrs. Channault is
extremely close to the present regime in Saigon…. .This
was a key to Tiger’s surge to profitability.”
Nixon Foundation: Kalmbach is secretary of its board oftrustees. The foundation plans to build a Presidential
library adjacent to the Nixon’s San Clemente estate.
Stans Foundation: (See box on Stans Foundation in
Thailand).
1971:
Dart Industries: (Rexall Drugs) headed by Nixon
Foundation trustee Justin Dart.
Marriott Corp.: this firm’s president, J. Willard Marriott
has been close to every GOP president since Hoover; he
headed both of Nixon’s inaugural committees; he em-
ploys the President’s brother, Donald Nixon, as inter-
national representative of the hotel and food firm; and
has contributed $150,000 to Nixon’s last two cam-
paigns.
MCA (Music Corp. of America): its president, Taft
Schreiber, served on CREEP’s Finance Committee, gave
$50,000 to Nixon’s 1972 campaign, and is a trustee of
the Nixon Foundation.
United Airlines: Kalmbach received a hefty $112,000
retainer from this firm when it was fighting the merger
of Western and American Airlines. One of United’s
newest officers is Nixon’s former aide, Dwight Chapin.
Justin Dart (see above) sits on the United board.
1972:
Morrison-Knudsen: this firm, a member of the four
company consortium which contracted for the bulk of
all U.S. war effort construction in South Vietnam, now
controls 40% of the construction market there.
Other clients of Kalmbach’s firm include such corporate
giants as Travelers Insurance, Pacific Lighting, Western
Bancorporation, and Northrop Corp., a prime defense
contractor.
-Bert Knorr
The principal sources for this article include:
Los Angeles Times, March 8, May 20 and July 7, 1973.
New York Times, May 24 and 29, July 16 and September 23, 1973. Washington Post, April 29 and June 7, 1973.
0S
“. . . Four more years! … Four more years! .. .”
27
Nixon’s West Coast Booster Club
In 1963, when we all thought we “wouldn’t have
Richard Nixon to kick around anymore,” a small ex-
clusive club of Southern California millionaires long
close to Nixon established itself in the Orange County
seaside community of Newport Beach. Its members
enjoy boasting that without their continued generosity,
Richard Nixon would not be in the White House today.
Several of the Lincoln Club’s older figures are original
Nixonites who helped launch the President on his poli-
tical career 26 years ago. Though the Lincoln Club’s 126
carefully selected members pay modest dues of $500 a
year, their contributions to the GOP political campaigns
amount to millions of dollars.
Perhaps the most prominent member of the club is
Nixon’s close friend and “San Diego Connection,”
C. Arnholt Smith – a man who is currently in deep
trouble. His Westgate California Corp. is under heavy
attack from the Securities and Exchange Commission,
his bank recently became the largest bank to go under in
U.S. history, and his links to the National Crime Syn-
dicate are becoming clearer all the time.
Other leading members of the club include: Arnold
O. Beckman of Beckman Instruments; . Herbert
Kalmbach; J. Simon Fluor, of Fluor Corp. (see Stans
article), the club’s current president; and C. A. Smith
lieutenant Clement Hirsch, a Nixon fundraiser who has
been rewarded with several visits to the White House.
Sources:
“Exclusive Coast Club Spurs Gifts of Millions for Nixon
and GOP,” The New York Times, February 16, 1972.
“Millionaires in Coast Club Ardent as Ever for Nixon,” The
New York Times, June 9, 1973. “For a useful article on C. Arnholt Smith, see Lowell
Bergman, “Nixon’s San Diego Connection,” Ramparts,
September 1973.
Menu
