Did you specifically ask Nixon to remove the restriction?
I didn’t ask Nixon anything. I just saw that a memo with a short list of my problems appeared on his desk. The other important item was that Toolco was involved in an anti-trust suit from the Justice Department. That was settled by a consent decree. And then we had another domestic route granted to TWA, and also we were allowed to stop in Manila on our Far Eastern flights.
In other words, I got my money’s worth. About that time Hughes Aircraft received a number of defence contracts, but that didn’t really have anything to do with it because the stuff we were turning out was of such superior quality that we would have got those contracts anyhow. Of course, if I’d changed my mind about the loan the way Noah wanted me to – who knows what would have happened? There might have been trouble.
Be that as it may, we covered up pretty well. But when you’re dealing with Nixons, with second-rate minds who haven’t got the brains to hire better than second-rate minds to work for them – there’s no covering up. When someone craps on the table you can’t wipe his ass for him. I mean it’s too late – you can wipe his ass for him but it doesn’t solve the problem. The pile of crap is still there.
We even tried to haul that jerk Don out of the hole he’d dug for himself and show him how to run a restaurant. We set up a committee with Pat DiCicco in charge. Pat had the feeding contract for Hughes Aircraft – brought in box lunches for the guys on the assembly line. He was supposed to know something about the restaurant business.
But Don Nixon didn’t like to deal with committees. I can’t blame him for that, although in this case it might have saved his bacon, or his Nixonburger, because the restaurant went out of business a couple of months after the committee pulled out.
Meanwhile, of course, we had given him the four hundred and five thousand. I hadn’t dared to make it a direct loan. Most of it I passed it to him through a Los Angeles law firm, Waters and Arditto, which I used at the time. It was convenient, because Waters was a friend of Dick Nixon’s – there was some tie-in through their wives. The money was sent to Jim Arditto, who did some work for my companies, and had actually taken care of the arrangements for me to get married to Jean in Nevada. And Arditto turned the four hundred grand over to Don Nixon’s mother, who passed it along to Don. In return for this, Hannah Nixon, the mother, gave us a mortgage on the gas station, as collateral for the loan, and agreed to pay a monthly mortgage payment of a few hundred dollars. But the lot and gas station were worth, at best, about forty thousand dollars.
Someone had to receive that mortgage payment. We didn’t want it to be Toolco, so the mortgage was transferred to an accountant in Waters’ office, a guy named Philip Reiner. He was a dummy. I don’t mean he was stupid. I mean he was a dummy for Toolco – he held the trust deed on the property in Whittier.
Reiner was a registered Democrat. Nobody seemed to think that mattered at the time, and of course I knew nothing about these details. But bear that fact in mind – he was a Democrat, and I don’t think he made any secret of it.
Reiner received the rent checks, and kept them.
One summer day in 1960, three years later, while Nixon was just starting to campaign against Jack Kennedy for the presidency of the United States, an auditor going over the books down at Toolco in Houston found that $205,000 figure standing there all by itself, very lonely, on one page. The other $200,000, fortunately, came from an offshore source, a Mexican corporation that had a bank account in the Cayman Islands. No one in Toolco knew about that.
But the two hundred five thousand had been there on our books for three years and the auditor wanted to know what it was all about. It passed along up the line and it got to Arditto’s office in Los Angeles. Arditto figured that the men in Houston were asking him to account for the rent money. He called in Philip Reiner, who been pocketing the few hundred bucks a month rent – by then the total was about ten thousand dollars. Peanuts. But not peanuts to the auditor at Toolco. And certainly the two hundred and five thousand on the books, which nobody could really account for, wasn’t peanuts.
Arditto said to Reiner, ‘I guess you’d better pay them back the ten thousand.’
Reiner walked out of Arditto’s office in a huff. He walked straight to his lawyer’s office and told the lawyer what had happened, and he mentioned the Hughes Tool Company. The lawyer looked up the mortgage property and found that it belonged to Hannah Nixon, the Vice-President’s mother.
Reiner was a Democrat and his lawyer was a Democrat. Zing, they saw the implications of the whole thing, and the lawyer in Los Angeles sent Reiner to Washington to talk to another lawyer, a guy named McInerney, a close friend of Bobby Kennedy.
McInerney and the Kennedys got together. But they still had a problem. They didn’t have any real evidence, and they knew nothing at all about the additional two hundred grand that had gone through the Cayman Islands. They only had Reiner’s version of the mortgage story, but they didn’t have any actual proof that Reiner was a dummy for Toolco, and Reiner didn’t want his head on any chopping block. There was a notarized paper that spelled it all out, but Reiner didn’t have it. He’d given it to Arditto as part of the so-called security arrangements, and Arditto had locked it in a safe, and for all the Kennedys knew had even destroyed it after the first phone call came from Houston saying, ‘What’s going on?’
Now comes a little ironic twist in this. Jack and Bobby Kennedy wanted Reiner to be as clean as possible in the event they could get the evidence and break the story, so they gave him $10,000 – or whatever the total of the rent money was that Reiner had received for holding the trust deed on the Whittier property – and told him to return it to Arditto. Reiner returned it, and eventually it made its way back to Toolco. The irony, if you boil the money trail down to its simplest elements, is that the Kennedys paid the mortgage on Dick Nixon’s mother’s gas station in Whittier.
And then – well, I’ve said this before but I’ll say it again. The stupidity of intelligent, educated people never ceases to amaze me. Quite a while ago Arditto had Xeroxed the Nixon mortgage file, and put a copy in Reiner’s filing cabinet. Why he did that we never found out. Reiner never knew it was there – it was buried in with a lot of junk.
A few days after he got back from Washington to Los Angeles, Reiner called Arditto to make sure the check for $10,000 had been received, and Reiner said, ‘Oh, by the way, I left some papers in your office. Would you mind sending them over to me?’ He was setting up new office space for himself in Santa Monica. So Arditto emptied out the desk and the filing cabinet – didn’t even look what was in it – and sent it to Santa Monica.
Reiner casually looked through it before he put it in a new file cabinet. There was the copy of the Nixon file. Most important, there was the notarized paper setting him up to hold the trust deed.
I know that seems an incredible story, but it’s really not so incredible, not if you accept the fact that intelligence is an ability, not a permanent state of mind. People don’t seem to be able to use their intelligence more than a few minutes a day.
Arditto forgot to plug in his intelligence that day, and he just said, ‘Get these files the hell out of my office and over to this guy’s new office in Santa Monica.’
This was shortly before the elections. Reiner gave all the material to McInerney, who put together a reasonably accurate account of the whole deal and fed it to the newspapers.
But they wouldn’t publish it. They didn’t believe it.
But McInerney and Reiner had proof.