Watergate, the Bahamas & Howard Hughes

Nixon’s vow to “fight like hell” in his battle against impeachment has led some to believe the president has concluded: If you can’t get yourself clean, the next best thing is to dirty everyone else.


Everybody’s in Bed With Everyone Else
January 31, 1974

WASHINGTON, D. C. – Gradually, murkily, there is emerging a classical Nixon strategy to reach the light at the end of the Watertunnel. The recent Nixon vow to “fight like hell” in his battle against impeachment has led some investigators to believe that Nixon has concluded: If you can’t get yourself clean, the next best thing is to dirty everyone else.

The operative element in this strategy is to trash Democrats, and it looks as if Lyndon Baines John­son, the late President and leader of his party, will be the first Democrat to be caught in the Watergate web. Johnson was recently described to The Voice as “an investor” in a massive Howard Hughes land development scheme in the Bahamas. Others involved in the deal include Nixon’s old law firm, Daniel K. Ludwig, the reclusive shipping billionaire, and a nest of shady figures in the Bahamas and Florida. Other Democrats who have put their eggs in the messy Caribbean basket are sure to follow.

This is the way a few in­vestigators are beginning to view the overall Nixon strategy: the Watergate investigation has grown like a cancer. What was once the meandering digging of two repor­ters is now an entire phalanx of in­vestigations. Inevitably, in­vestigators now say, such a huge investigative and prosecutorial ef­fort, helped by the work of the major newspapers and television networks, was destined to go beyond the original bounds of Watergate and related crimes.

Classically, as an investigation spreads outward from the vacuum (the person investigated) in its center, it tends to head for the intersections of power in this coun­try, for that is where the most in­formation lies. At such intersections, the worlds of politics, business, and crime come together.

In recent weeks, the in­vestigation of Richard Nixon has increasingly begun to encounter the power intersections which sur­round American life.

Chiefly, there have been in­creasing intimations of in­volvement by Nixon and/or his close friends and advisers with organized crime. Some in­vestigators now believe Nixon welcomes the twist the Watergate investigation has taken, because he knows that other politicians and big business interests have long been camped out at the power in­tersections on the periphery of American life. “He’s not the only one out there playing footsie, and he knows it,” one investigator told The Voice last week. “The closer these investigations get to him in the Bahamas, for example, the more Democrats and other Republicans they’re going to stumble over. It’s a rats nest out there. Everybody in bed with everybody else. Nixon’s is just one chess piece in a very big game on a very big board. Inevitably, the closer they get to impeaching Nixon, the more skeletons will be crawling out of the closet on both sides of the aisle.”

“This is the way Nixon looks at it,” a well-informed source said last week. “If the President of the United States is going to be made to stand naked before the Senate, a lot of those voting yea or nay will do so in their underwear.”


All bets were off in the Bahamas in 1969. The recently elected govern­ment of Lynden O. Pindling, the first all-black government in the history of the island, was riding a crest of public approval. Ever since Pindling had defeated the in­famous “Bay Street Boys,” a group of wealthy British business­men and hustlers who had long controlled government and com­merce in the Bahamas, there had been much agitation for the Bahamas to break away from the British and achieve independence.

This put the many foreign in­vestors in the Bahamas in something of a tizzy. They feared an independent black government would be impossible to deal with in the way business had long been conducted in that part of the world: in cash.

This growing concern, in at least two instances, led to a search for a measure of political clout which would offset any political tur­bulence the government in the Bahamas might run into. One in­terest very much in need of such political clout was Howard Hughes, who in 1969 was in the midst of developing a massive parcel of prime waterfront property on Grand Bahama Island. This large Hughes real estate scheme in the Bahamas is now being looked upon as a possible new motivation for the now famous Hughes $100,000 “donation” to Nixon, according to authoritative sources on Capitol Hill. They say the so-called donation, made in two $50,000 installments (one in 1969 and one in 1970), may have been intended to buy political influence in the Bahamas which Nixon, as President of the U.S., could have wielded through diplomatic overtures to Bahamas officials, or by more direct methods.

The story behind this new twist in Watergate-related financial affairs goes like this:

Hughes bought a massive parcel of prime waterfront property in the Bahamas in the early ’50s. This is the first time Hughes has been described as owning property in the Bahamas. There were rumors in 1970 and 1971, when Hughes was living in the Bahamas atop the luxurious Resorts International-­owned Britannia Beach Hotel on Paradise Island, that he was thinking about buying property and taking up residence in the Bahamas permanently. Then, as suddenly as he had appeared in the islands, Hughes disappeared and turned up later in London. Talk about Hughes and the Bahamas subsided, at least for the time being.

Also operating heavily in Bahamas real estate at the same time were Wallace Groves and Louis Chesler, individuals who have been described repeatedly by law enforcement officials and organized crime experts as top lieutenants of Meyer Lansky, the notorious “chairman of the board” of international organized crime. Groves and Chesler were well known to a man who did business with them in the Bahamas. This man has described to The Voice the real estate development business in the Bahamas this way:

“If you dealt in land, you dealt with Uncle Wally and Uncle Lou. You did things their way, you acted when they told you to act, or you didn’t act at all. There was no other way to go. There’s plenty who just got out of there with their skin for thinking they could beat them at their own game. Uh-Uh. Don’t work that way.”

Hughes apparently bought the waterfront property and then did nothing with it until the late 1960s. The development scheme, which according to knowledgeable per­sons on Capitol Hill was being per­sonally supervised by Hughes him­self, also included other investors. One of them was Lyndon Johnson, who reportedly did not use a lawyer, but rather dealt personally with his investment. Also involved was billionaire shipping magnate Daniel K. Ludwig, who dealt with the Hughes interests through his at­torneys, Nixon, Rose, Guthrie, and Alexander, in 1968. He remained with the same firm in 1969, after Nixon and his friend John Mitchell had left for greener pastures. The law firm represents National Bulk Carriers, Inc. one of the largest oil shipping fleets in the world and Ludwig’s main property.

“A group of four investors from Miami” was also involved accord­ing to those knowledgeable about this deal. But they could not recall who the four were.

Perhaps it was just a coincidence, but precisely the same time there began to be talk among the Hughes investors of the need for political clout in the Bahamas, one Robert Vesco hired the President’s nephew, Donald Nixon as a per­sonal “adviser.” Donald Nixon was at that time 22 years old. He was used by Vesco in negotiations to buy the Paradise Island Casino from Resorts International. It was widely rumored in the Bahamas at that time (1969), according to accounts by Hank Messick and Jim Savage of the Miami Herald, that the presence of the President’s nephew at the Vesco elbow was meant to “telegraph” United States concern about the security of American investments in the Bahamas. A matter of great con­cern to Vesco and Paradise Island owner James Crosby (a good friend of Nixon and Rebozo) was the gambling exemption for the casino, which could be revoked at any time by the Bahamas government with virtually no reason or warning. The casino to this day en­joys its gambling exemption.

It is not known whether Robert Vesco or the Resorts International crowd had an interest in the Hughes development scheme in the Bahamas, although some in­vestigators do not take lightly the fact that Hughes was staying at a Resort International hotel in the Bahamas (he also stayed at a Resorts International hotel in Lon­don). And now he is back in the Bahamas staying at the Xandu Princess, owned by D. K. Ludwig, a partner in the Hughes develop­ment scheme.

As one authoritative source put it, “Anything is possible down there. They’re like one big, happy family: Resorts, Crosby, Vesco, Ludwig, Hughes, Rebozo, Donald Nixon. I would be very surprised if all of them weren’t involved with each other in one way or another.”


Adding to the speculation about Nixon’s strategy for dealing with impeachment last week was the following:

After the Senate Watergate com­mittee voted four to three along party lines to resume hearings, only three days were allotted for the hearing on Hughes/Rebozo/Nixon $100,000. The committee staff had asked for at least two weeks.

A person close to the committee staff told The Voice that, despite that setback, the staff was gearing up to fit as much in the three days as possible when more bad news came their way. The staff was in­structed, apparently by Ervin and Baker, to “stay away from the fol­lowing areas”: any possible quid-­pro-quo for the so-called donation; the Paradise Island Casino; Rebozo’s bank; F. Donald Nixon’s involvement; and “the whole area of the President’s finances.”

The person close to the staff, who is known by The Voice to have good contacts and be well up on what’s going on, said the staff was flabbergasted. “‘It came down from both sides, Republican and Democrats. It was like tying their hands after they had done four months work on this thing. They were ready to go with everything. They could have drawn a picture you wouldn’t believe. Then the word comes down to back-off prac­tically everything.

“Smathers (former Senator George A. from Florida) and Dan­ner (Richard G. — the man who car­ried the cash to Rebozo from Hughes; a former City Manager of Miami Beach from 1946 to 1948) are both in town. They (the com­mittee staff) think they’re leaning on Talmadge. It looks like Hughes is calling in all his chips. He’s col­lecting all his debts. That accounts for some of the paranoia. But Jesus, how far is this going to go?”