Speaking of Money and Propriety

Though the week's most startling disclosure before the Ervin committee I came from former White House Aide I Alexander P. Butterfield, there were other bits and pieces of fresh insight into the workings of Watergate as the Senators quickened their pace, working toward an Aug. 3 recess. The. witnesses and their key testimony HERBERT W. KALMBACH, 51, the President's personal attorney and longtime political fund raiser, described how he raised $220,000 for the seven Watergate defendants last year (see chart following page). He undertook the job at the request of John Dean, Kalmbach testified, who "made a very strong point that absolute secrecy was required."

Most of the $220,000, Kalmbach told the committee, was provided by Nixon re-election officials from various campaign contributions: $75,000 came from Maurice H. Stans, the former Secretary of Commerce and chairman of the Finance Committee to Re-Elect the President; and $70,000 came from Frederick C. LaRue, an aide to former Attorney General John Mitchell and formerly an official at the Committee for the Re-Election of the President. Another $75,000 Kalmbach got directly from Thomas V. Jones, president and board chairman of the Northrop Corp., a Los Angeles-based aerospace company. (Jones claimed that the amount was $50,000.) Most of the money was passed in turn to Mrs. E. Howard Hunt Jr., wife of one of the men who pleaded guilty in the Watergate conspiracy. When she was killed in an airplane crash in Chicago last December she was carrying $10,000 in $100 bills.

Insisting that he had first believed the money was to be legitimately used for the defendants' legal fees and family support, Kalmbach admitted that he became increasingly uneasy about the "propriety of this assignment." Finally, in July 1972, he sought an appointment with Ehrlichman at the White House, and told him: "I am looking right into your eyes ... and it is absolutely necessary, John, that you tell me that John Dean has the authority [to order the collection of funds for the defendants], that it is a proper assignment, and that I'm to go forward on it." According to Kalmbach, Ehrlichman replied: "Herb, John Dean does have the authority, it is a proper assignment, and you are to go forward."

Kalmbach was temporarily mollified, but in August or September he told Dean that he would raise no more money. Nonetheless, he was called to Washington last Jan. 19 to attend a meeting in John Mitchell's office. When he realized that the purpose was to induce him to raise more money for the defendants, Kalmbach testified, he left the meeting. In hindsight, he said, he regarded the work as "an improper, illegal act," and implied that he felt Haldeman, Ehrlichman, Dean and Mitchell had betrayed him.

In his second day of testimony, Kalmbach described an earlier escapade on the Administration's behalf. He said that in 1970, under orders from Haldeman's aide Lawrence M. Higby, he collected $400,000 in funds left over from the 1968 campaign and delivered it to men he had never met before Kalmbach said he eventually came to believe that the funds were used in an unsuccessful effort to defeat George C. Wallace in the 1970 Democratic primary campaign for Governor of Alabama; such a defeat might have kept Wallace from taking votes away from

Nixon in the 1972 presidential election.

Kalmbach asserted that he had never engaged in the illegal practice of soliciting campaign contributions from corporations. That contradicted the statement of George Spater, board chairman of American Airlines, Inc., who said three weeks ago that his company illegally gave $55,000 to Nixon's 1972 campaign at Kalmbach's request. Last week a second corporation, Ashland Oil, Inc., admitted that it had made a $100,000 illegal gift to Nixon's reelection drive.

The committee also released the transcript of a telephone conversation between Kalmbach and Ehrlichman that took place last fall a day before Kalmbach was to testify before the Watergate grand jury. The conversation was recorded by Ehrlichman unknown to Kalmbach, and was apparently subpoenaed by the Ervin committee; it was somewhat similar to a tape recording of a conversation between Ehrlichman and former Attorney General Richard Kleindienst in that in both conversations Ehrlichman pointedly emphasized his own innocence in the Watergate coverup. When he learned later that Ehrlichman had recorded the conversation,

Kalmbach testified last week, "it was just as if I had been kicked in the stomach."

ANTHONY T. ULASEWICZ, 54, a former New York City policeman who later served as a private investigator for the White House, was the perfect witness for warm-weather TV viewing. A Runyonesque character, he described with deadpan humor his difficulties in "getting rid of all those cookies"--distributing the $220,000 that Kalmbach channeled to him. The surreptitious payments included $154,500 to E. Howard Hunt Jr. and his wife; $8,000 to G. Gordon Liddy; $29,900 to LaRue; and $25,000 to William O. Bittman, Hunt's lawyer.

Getting rid of all those cookies proved to be no easy chore. For one thing, Ulasewicz was under orders from Kalmbach that he should not be seen by any of the people to whom he was delivering money. So, by prearrangement, he left packets of $100 bills in office-building lobbies or airport luggage lockers. He was obliged to make so many phone calls from public booths that he finally took to wearing a bus driver's coin changer. Once, at the height of a skyjacking scare, he found himself in a line of passengers who were being carefully searched before boarding a plane.

So he staged a coughing fit, quickly disappeared with his envelope full of $100 bills and took a train instead.

In the beginning, Ulasewicz insisted, he thought the payments were for "humanitarian" purposes, but he grew suspicious when Mrs. Hunt began to demand more money for herself and her husband as well as for the other defendants. "Something here is not kosher," he warned Kalmbach in August, and he said he would refuse to distribute any more money. (As it turned out, he made a final delivery in September at Kalmbach's request.) Asked whether he still felt that the payments were legitimate, he replied: "Not likely."

At first, committee members treated Ulasewicz as a welcome bit of comic relief. "Who thought you up?" asked Tennessee's Senator Howard Baker. "I don't know," replied a startled Ulasewicz. "Maybe my parents." But under a severe cross-examination by Connecticut's Lowell Weicker, Ulasewicz acknowledged that his duties on the White House staff had included the more sordid chores of the private eye: snooping into the domestic lives, sex habits, drinking problems and other "personal social activities" of the President's political opponents. "Would it be fair," asked Weicker, "to say you dealt in dirt at the direction of the White House?" Replied Ulasewicz: "Allegations of it, yes, sir." Then Weicker demanded that Ulasewicz tell him one by one the present whereabouts of the defendants, who are all in prison, and of Mrs. Hunt, who is dead. "I think what we see here," concluded Weicker grimly, "is not a joke but a very great tragedy."

FREDERICK C. LaRUE, 44, the former official of the Committee for the Re-Election of the President who has already pleaded guilty to a charge of conspiring to obstruct justice, described his distribution of $230,000 to Watergate defendants and their lawyers, including $210,000 to Bittman and $20,000 to Peter Maroulis, Liddy's attorney. He never learned who ordered the payments, he maintained.

LaRue's testimony was somewhat damaging to his old friend John Mitchell. For example, LaRue failed to substantiate Mitchell's assertion that at the Key Biscayne meeting on March 30, 1972, at which Liddy's proposed bugging scheme for the election campaign was discussed, Mitchell rejected it on the spot. Instead, said LaRue, Mitchell replied in essence: "Well, this is not something that will have to be decided at this meeting."

Later, referring to a final payment of $75,000 to the Watergate defendants, LaRue admitted that Mitchell was aware that this was "part of the grand cover-up scheme." LaRue also said that shortly after the Watergate breakin, he heard Mitchell imply that Jeb Magruder should destroy some incriminating files: "It might be a good idea," LaRue quoted Mitchell as saying, "if Mr. Magruder had a fire."

ROBERT C. MARDIAN, 49, a former assistant to John Mitchell both in the Justice Department and the C.R.P., took exception to the previous testimony of at least five other witnesses. Examples:

1) Mardian recalled telling Mitchell that Liddy said Mitchell had approved of Liddy's $250,000 eavesdropping scheme. Mitchell, insisted Mardian, "didn't deny it." 2) John Dean was "dead wrong," testified Mardian, in say ing that Mardian had been given access to confidential FBI reports regard ing the Watergate investigation. 3) He staunchly denied that he had taken part in a discussion concerning Jeb Magruder's plan to perjure himself before the Watergate grand jury.

Mardian insists that although he had little use for Liddy, he felt obliged as a counsel to the C.R.P. to protect the confidentiality of information en trusted to him by Liddy and other C.R.P. staff members. Describing a meeting with Liddy on June 20, 1972, Mardian recalled that Liddy had tried to convince him that the Watergate break-in could not be traced to officials of the C.R.P. because the five men ar rested inside the Watergate were all "real pros" who had been involved in other "jobs."

Liddy, said Mardian, cited the 197 1 illegal entry into the office of Daniel Ellsberg's psychiatrist. Mardian added that when he asked who had authorized the burglary of the doctor's office, Lid dy may not have mentioned the President but gave Mardian the clear "impression" that Nixon was responsible.

Liddy was so anxious to destroy evidence of his own involvement in the Watergate breakin, said Mardian, that he even shredded the wrappers from soap bars he had collected in various hotels, as well as several $100 bills that might be identifiable as part of the cam paign contributions.

GORDON STRACHAN, 30, former aide to H.R. Haldeman, was the week's final witness and had time only to make an opening statement. In it he testified that Haldeman was advised more than two months before the Watergate break-in that the C.R.P. had set up a "sophisticated political-intelligence-gathering system." Following the breakin, "after speaking to" Haldeman, Strachan said he destroyed several documents that might have proved embarrassing to the White House staff -- including the memorandum that had informed Haldeman of the intelligence system.

Strachan declared to the committee that he would disclose further information when cross-examined that would be "politically embarrassing to me and the Administration." But he stopped short of implicating Haldeman in either the Watergate break-in or coverup, and is likely to be a target of sharp inter rogation on this and other subjects this week. But the questioning will probably be brief, since committee members are anxious to get to the big guns next in line: John Ehrlichman and H.R. Haldeman.

This file is automatically generated by a robot program, so reader's discretion is required.