AREAS OF POSSIBLE EMBARRASSMENT TO THE AGENCY

• Document Type: FOIA
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 01430453
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 6
• Document Creation Date: December 28, 2022
• Document Release Date: August 7, 2017
• Case Number: F-2007-00094
• Publication Date: May 8, 1973

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Agency on this subject:
8 May 1973
MEMORANDUM FOR : Deputy Director for Operations
SUBJECT
Areas of Possible Embarrassment
to the Agency
1. Sometime in the spring or early ,1-Inmer of 1971, Mr. John
Dean levied the requirement on the Agency for infur �naticn relating to
the Investors Overseas Service (I0S). The original request was
non-specific but it gradually emerged that Dean was concerned with
the possible adverse publicity that might develop regarding the
President's nephew, who was employed by 10S.
2. There were multiple channels from the White House to the
a. Presumably Haldeman and/or Ehrlichman to Director
He
b. Someone (unnamed) in the White House to the DDCI,
General Cushman (see attached telephone conversation
Note that Ehrlichman is mentioned, and
c. John Dean to theI Stafa These various channels
were sorted out in time and six reports were passed by
thecql Staff to Mr. Fred FieldinUfor Mr. John Dean.
3. The telephone call of General Cushman's is of interest since
it gives the flavor of White House concern. It took several days to
uncover the fact that the White House interest centered on the involve-
ment of the President's nephew with IOS and possible adverse publicity.
The reports submitted to Dean's office were routine in nature and were
coordinated with the DCI. After a few months, interest in this sub-
ject died down and we did not pursue it further.
4. Please return the attachments when they have served your
purpose.
nr
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5. also include a short note on the Intelligence Evaluation
Committee and Staff prepared by Richard Ober. The original
meetings were held in the office of John Dean at the White House
and the principal sparkplug for this group activity----Wa-s_the then
Assistant Attorney General for Internal Security, Robert M'ar-dian
and then later his assistant, William Olsen. It is noted that
Mardian is now appearing before the Grand Jury -and-it is always
possible that he might draw in the Agency:3
6. Y3efore appointing Ober to the LES Staff as the Agency
representative, I had attended various inter-agency meetings pre-
sided over by Mardian. I expressed the view to Director Helms
that Mardian would require very careful handling due to his inex-
perience. Furthermore, Mardian was deeply involved in the split
between Bill Sullivan and Mr. Hoover. On a confidential basis
one or two senior FBI officials stated that Sullivan was secretly
passing files to Mardian without Mr. Hoover's permission. This
was one of tJ important reasons why Sbllivan was dismissed from
the Bureau.
Attachments (5)
ames AngItOfl
Chief, Counter Intelligence Staff
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(b)(3)
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Telephone conversation of General Cushman and someone in White House, 23/7/71
Bob, how are you.
DDCI: Just fine; I just talked to Jack Sherwood and he suggested I give you
a buzz.
I deeply appreciate it. I asked Jack to call you. I spoke to Rose yesterday,
.and told her "I had a little project here for John Ehrlichman and I need very
discreet assistance from the Company, and I should like to touch base with
Bob. I met him at Jack Sherwood's. ".
DDCI: That's right.
---- ---
That's right and beyond that I would like to just establish a relationship because
from time to time we have a few needs in your area. Let me tell you what we
need to know here. Your Agency would be the only one to help. I have checked
with the Bureau, Bob, and they have nothing on this fellow. Just a mere name
check but it apparently has some significance, of course. Ray Finkelstein;
born in Belgium about 1940; moved to Brazil about age 12 with his family.
This mighte helpful. He now is working with one Gilbert Straub, apparently
Straub is hooked up with that Kornfeld outfit: IOS. We have a need to know what
Finkelstein is all about.
DDCI: We will do our best, of course; we have some counterintelligence files
which sometimes turn up people but Ordinarily, of course, we don't surveil
any Americans but this fellow might have come to our notice.
He may not be an American, just a European Jew; that is the problem, the
Bureau has come up with zero.
DDCI: Do you know where he is physically located?
He may be in Geneva; Straub is apparently in Geneva.
DDCI: Well, let me get on this and I will get back to you.
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avoid deals that might. reflret
unfavorably on the President.
Pre;:illent .00 has given
Not long afterward. Donald
"au began dickering wIth John
� i'J'Iur'.1 to a Roston manufacturer of
keep the l'residert'�� �s� play...flound equipment, who
sible brother, Donald, out. of wanted the eovernment to
hot water.
consider installing his Prod-
Donald Nixon has a weak- nets in urban riot areas. 11111
'less for fattening foods and told us Donald merely wanted
easy money. He tried to satisfy to he the company's West
both appetites in the 1950s by Coast representative, and did
borrowing $203,000 from bil- not want to put In the fix for
lionaire Howard Hughes to op- federal money. But Ehrlich-
crate a restaurant chain, the man quietly vetoed the proj-
Home of the Nixonburger, in eel, and the President's
Southern California. brother wrote to Hill saying
Two months after the loan he was no londer interested
was made, some of Hughes' in the company.
top assistants sat down with
Donald to survey the chaos of No Lott��cr Adviser*
.0
hi5 accounts. Noah Dietrich. Donald also made contact
who then directed the day-to- with Elraer Stone a lawyer for
day operations of Hughes' cm- the eronatitical Corn-
pin.. complained that Donald patty. But in deference to his
bail goor through the money brother, Donald took Stone
without paying off important through the guarded White
creditors. House gates to see. Ehrlich-
Rut it was too late. Donald's man. Afterward, a spokesman
restaurants went bankrupt, for Ryan Aeronautical ex-
and the Nixonburger was lost plained that the pair had juist
to mankind. dropped by to let, it he known
The sto6r of the $205,000 that Stone was no longer net-
loan leaked out during Rich- in as Donald's legal adviser.
ard Nixon's 19GO campaign for When Donald finally joined
the presidency, causing him the Marriott Corporation in
political win. January, 1970, Ehrlichman
At one time, Donald incor- summoned J. Willard Marriott
prated himself and began scl- and his son, Bill, to the White
ling .shares to citizens who House for an audience with
rrieht have an Interest in his the President. Marriott had
blood line. Ehrlichman ex- been chairman of the Nixon
plainrd ttcntly to Donald that Inaugural and is trusted by
such ventures could embarrass the President
his brother and that, for his Delicately, the President
brother's sake, he should asked the Marrlotts to keep
aide
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)46
THE WASHINGTON POST Tranc,tiny.Frh. i6, 1972
. . . R
[in-4; :I, iJi IAD?, � Tifir 0771.. T.-Iris: Brother
131' .r ark f 1 � frf..1 I in
.101 in
personal
his brother out of trouble. "I have established, are strictly
want to be sure that Don has untrue.
no denlings with the federal Ehrlichman also gave Don-
government," said the Presi- ald's son, Donald, Jr., 'a irr.
dent. "I want to be sure that lure before the h03� went to
Switzerland last summer in
Don is never asked to do any-
work for International Cr,n-
thing that, would embarrass trots. The company has now
thk office?' � transferred young Nixon to
Then the President added as the Bahamas.
an afierthouijit: "Don is the His father, talking to a few
best sal .rnan in the Nixon visitors, including my a:.sociate
,�
Ccoree Clifford, considered that
Time Marrlotts agreed to Donald, Jr., was something of
watch over Donald, and they a disappointment to the
lam-
have scrupulously kept him ily. lie had been off in the
away from Washington. There mountains associating with hip-
has been only one awkward in- pies before the overseas job
cident. Donald flew to Greece was arranged.
as one of the three-man team The boy had said he was
that Otrdred..Marriott's airline- going to work for Investors
catering service to Aristotle Overseas Service, which has
Onassis' Olympic Airlines, been in financial difficulty.
"I told him not to say that,-
GrCrits i�r3caring, Gi fl5 said Donald, a note of exayer-
The Greeks, whose military ation in his voice. "If that .get
government is unpopular in around, he's going to be in a
the U.S., rolled out the red lot of trouble. I told him 11-1
carpet for the President's
brother. Tom Pappas, a big
Republican money raiser with
oil interests in Greece, threw
a lavish dinner for Donald in
Athens and invited members
of the Greek military junta.
Anti Onassis, the husband of
the widow of the man who de-
feated Itichard Nixon for Pres-
ident in 1960, sent long-
stemmed roses to Donald's
hotel room.
NVashington whispers thnt
Donald used his While House
influence to get catering con-
tracts for Marriott:with Amer-
ican Airlines and TWA, we
was to say he was gninc to
work for International Con-
trols. IOS and International
Controls are allied companies.
but he's not supposed to say
he's working for 10S. You
know what would happen if
that got around.
"That dumb so-and-so," Don-
ald said of his son. "John Ehr-
Hellman talked to him for a
couple of hours and told him
to behave himself over there.
You know, he told nun he was
the President's nephew and
couldn't do anything to embar-
rass the President."
� 0 1972, Dell-McClurq Byndlrats
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Jvpi esco
By JAMES R. POLK
Star�News Stall Writer
Edward C. Nixon, brother
of the President, is keeping
his silence in the face of
court testimony that ho
played a role in arranging a
*".).00,00-) campaign contribu-
tion in ..:ash from a financier
accr.,td of fraud.
''So comment that is news-
worthy. Thank you. Good-
bye," Nixon said -:hen final-
ly reached yesterday at his
unlisted telephone number
in Edmonds, Wash., after a
week of calls. Then he hung
up.
A New Jersey campaign
official, Harry L. Scars, has
testified he was told tho
Nixon brother made a call
to Washington to confirm that
the donation by . financier.
Eobert L. Vesco was wanted
in cash.
Sears said under oath ho
was present when the 4.1-
year-old Nixon arrived at
n /7,r7
f-CI, u
Vesco's business headquar-
ters in Fairfield, N.J., after
a helicopter flight ironi New
York City. I1owcr1 Sears
said he didn't F.tay.'1V.'llic.
meeting among Nixon, Vesco
and business :1:3ociatco.
The Securities and Ex-
change Cam has filed
a civil snit ageinst Vesco ac-
cusing him c: a million
fraud in Inotini; Co- assets of
his Sv.-Iss-cti 105, Ltd..
mutual fund n�Av:orlz.
" Edward Ni::on, !le ;:ears
raid is a former di:: :tr..- of a
Vesco company. i 'lie s7vond
member of th: �:-.1:1,-nt's
family to be to tho
financier: Donald A. Nixon,.
a son of the Prez,i(lciit's cam
brother, is Vesco's personal
administrative assistant, usu-
ally based in Nassau, the Ba-
hamas.
The SZC probe has indi-
cated the ,c;:1CO,CCO cash (Infla-
tion came from funds at Yes-
co's Eahamas Commonwealth
EI)11'.1i0) C. NIXON
Bank in Nas-al. me rinnu
was (lean to Washingbn
April 10, although Eli?. Nixf.,n
campaign failed to report the
donation under The new dis-
closure law.
A federal court hearing is
scheduled Monday in New
York City on the SEC's -bid
for an injunction aainst vio-
lation of securities laws.
Scars' testimony came in a
-pretrial deposition in tbe
SEC case.
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_Approved for Release: 2017/01/18 C014304530,
THE WALL STREET JOURNAL, Friday, May 4, 1973
_
Vc.sco Arre.st Warrant
..sue(1 by Federal Judge
For 'Grand Jury' Inquiry
Financier Hasn't Been in the U.S.
For, Months; His Lawyer Fears
Panel Will Produce Indictment
By a WALL STREET JOURNAL Staff Reporter
, NEW YORK � Federal Judge Edmund L.
� Palmieri issued a warrant for the arrest of e:n-
i �
. bz�tiled New Jersey financier Robert L Vesco, I
' in order to bring him as witness before a grand
..i.iry here investigating his activities. 31r. ;
, Ve.ico has been out of the U.S. for .,-everal
; months. .
I No criminal charges have been brought
I against Mr. Vesco. But the U.S. Attorney's of-
fice, which requested the bench warrant, pre-
viously had asked the judge to find Mr. Vesco
In contempt of court for failing to heed a sub-
poena ordering him to appear before the grand
jury. The government tried to serve the sub-
poena on April 15 in Nassau, Bahama Islands.
The grand jury is understood to be investi-
gating the circumstances of Mr. Vcsco's S250.-
000 in contributions to President Nixon's 1972
reelection campaign. At the time, the &Teri-
ties and Exchange Commission was conduciing
a well publicized inquiry into Mr. Vesco's busi-
ness affairs. The SEC file dahuge civil suit
against him and 41 other men and concerns on I
1 Nov. 27. The Nixon finance committee returned
j Mr. Vesco's contributions to him on Jan. 31.
1 Mr. Vcsco's atterney, Edward Bennett Wil-.
I Hants. told the judge yesterday he had rvasun
Ito believe that Mr. Vesco would be indicted by
the grand jury. Mr. Wiliams said that if forced
to appear, Mr. Vesco would invoke his constitu-
tional priyilege against self-incrimination, un-
less he Were granted immunity against prose-
cution. Mr. Williams added that the U.S. Attor-
ney's offiee had already replied to him that it
wouldn't offer immunity.
IL.lJEXT COPY - DO NOT RELEASE
Mr. Williams, who earlier had asked the
judge to dismiss the contempt application on
technical grounds, said the circumstances
didn't call for Mr. Vesco's arrest.
After the court was adjourned, Mr. Williams
declined to discuss reports that the 37-year-old
Mr. Vesco intended to renounce his U.S. citi-
zenship, even though the attorney at an earlier
hearing had said he would raise the question of
citizenship.
James W. Ray,'hill, an assistant U.S. attor-
ney, brought the matter up in court, saying the
government had information that Mr. Vesco
was "currently attempting to renounce his
citizenship in Costa Rica," where he last year
took up legal residence. It's understood that
Mr. Rayhill wasn't referring to a disclosure
-r....104--macle late Wednesday by Costa Rica's presi-
dent, Jose Fig,ueres.
President Figueres, on a two-day visit to
this country, said that Mr. Vesco in an audi-
ence two or three weeks ago formally an-
noura:ed his intention to renounce U.S. citizen-
ship.
In Washington, the State Department said
Mr. Vesco has told Costa nican authorities that
he already has renounced American citizenship
before two notaries, with his lawyer's help.
However, the U.S. Embassy in Costa Rica con-
tended that didn't count, because it wasn't
done before a consular officer. The State De-
partment's legal experts are checking to deter-
mine whether that view is correct.
The U.S. has a 1922 extradition treaty with
Costa Rica, covering 21 crimes, including rob-
bery, forgery, embezzlement, and fraud. The
U.S. considers its 1931 extradition treaty with
.Britain to apply to the Bahamas, but it isn't
dear whether the Bahamas agrees. The British
treaty covers such crimes as fraud and misre-
presentation. but the warrant issued yesterday
for a grand-jury appearance isn't a matter for
which extradition is possible.
Mr. Vesco has a home and family in Boon-
ton, N.J., but has bases of operations in Nassau
and in San Jose, Costa Rica. Government pros-
ecutors declined to comment when asked what
steps they would take to have Mr. Vesco ar-
rested if he were located in either of those
countries.
The SEC's civil suit accuses Mr. Vcsco Of
directing the 'looting" of S221 million in assets
of four foreign mutual funds managed by 1.0.S. ,
Ltd. Mr. Vesco formerly headed both .1.0.S.
and International Controls Corp., of Fairfield.
N.J.
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