Gold in Them Thar Hills

It may have been the most neatly buried nugget in all that John Dean said. In one brief paragraph of his 245-page testimony before the Senate Select Committee on Presidential Campaign Activities last week, Dean dropped an obscure reference to a client of Super-lawyer F. Lee Bailey's who "had an enormous amount of gold" to dispose of. As Dean told the story, the gold had come up during a luncheon conversation he had on March 22 with John Mitchell. What was Bailey up to, and how was Mitchell involved? The story behind Dean's fleeting remark lies somewhere between the fantastic and the farfetched.

It seems that a group of men learned of a hoard of hidden gold. The cache was old Aztec gold, they insisted, 60% pure. Some of it was in the form of artifacts, the rest in gleaming gold bars. What is more, there were 100 tons of it in all. At the current rate of $120 per oz., their startling find would be worth nearly a quarter of a billion dollars. Trouble was, private individuals are not permitted to deal in gold without a license. The gold was buried on a military reservation in New Mexico, and the men (there are a total of 50 in the claim consortium now, says Bailey) did not want to risk going onto Government property to claim the gold without prior agreement that the Government would issue them a license to sell it.

Such a tantalus of riches required special handling, and the consortium sought the services of Bailey. Initially skeptical, Bailey requested that he be permitted to visit the site. Although he received tacit permission from the Government, the group refused to allow it, fearing that when they sought to lead him there, they might be arrested. In an effort to solve such problems, Bailey had called John Mitchell in mid-March. Mitchell first referred the matter to then White House Chief of Staff H.R. Haldeman, who was "nonresponsive." Mitchell next suggested that Bailey "try the White House" on his own, and Bailey telephoned Presidential Adviser John Ehrlichman.

A series of contacts with the U.S.

Treasury Department followed. When Bailey took his case to Thomas W. Wolfe, director of the Treasury Department's Office of Domestic Gold and Silver Operations, Wolfe bluntly told Bailey his clients were full of "malarkey." In a June 5 letter to Bailey, Wolfe brushed off the attorney with a tart reminder that any gold discovery must be reported to the Secret Service, and then offered a less than heartfelt suggestion that Bailey ask the Army for special permission to locate the gold on its land.

Last week Bailey continued to decline to name his clients and remained upset at the prospect of the gold's being stolen. Apparently, the gold has already been the object of pilferers in the area. Bailey argues that his clients are entitled to the full value of the gold, even though they will have to pay 50% of it to the Government. Bailey threatens a lawsuit if the Government fails to honor his clients' request. But there is reason to wonder if the affair will ever go that far. "It sounds like a new version of the old treasure of the Sierra Madre story," said one Treasury official. "Every couple of years somebody claims to find that treasure. But the treasure never materializes."

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