The Hughes Connection

As Phase II of the Watergate hearings--the sessions devoted to campaign dirty tricks--ended last week, the Senate committee's focus of attention had already shifted to the next phase, scheduled to begin Oct. 30. The committee is then planning to look into campaign-financing practices; and its investigators have begun probing an especially intriguing bit of financing --a contribution of $100,000 to Nixon by Billionaire Howard Hughes. The gift, allegedly meant to be used for campaigning, was received and held for more than three years by Charles G. ("Bebe";) Rebozo, Nixon's favorite weekend companion, who may be called to testify before the committee about the transaction.

Committee investigators have already interviewed the publicity-shy Rebozo for five hours about the $100,000 payment. In somewhat flustered testimony, committee sources said, the Miami businessman claimed that the gift was first suggested by Hughes Executive Richard Danner and delivered to Rebozo in two equal installments, one in 1969 and one in 1970. Hughes intended the money to be used in Nixon's 1972 re-election campaign, Rebozo said. (Banner claims that the funds were earmarked for congressional candidates in the 1970 mid-term elections.) Yet for reasons that are unclear, the money was not turned over to any campaign. Instead, Rebozo kept it stashed in a Key Biscayne safe-deposit box until last spring, when Robert Maheu, the deposed head of Hughes' Nevada gambling empire, mentioned the contribution's existence in a deposition connected with his $17 million suit against Hughes. At that point, Rebozo said, he returned the $100,000 to Hughes.

Among other things, the committee wants to investigate Maheu's reported allegation that the gifts were actually intended to buy influence for Hughes on the outcome of two major federal cases involving his business interests. Two such cases were decided in his favor during that period. One was a Civil Aeronautics Board decision in July 1969 allowing him to buy Air West, a small California-based passenger line; the other was a Justice Department cancellation in the late summer of 1970 of an antitrust action that sought to prevent Hughes from purchasing additional gambling casinos in Las Vegas.

Odd Coincidence. There is yet an odder coincidence about the gifts. The second installment was paid to him, Rebozo testified, on July 3, 1970, at Nixon's San Clemente home. On the same date, committee sources said, Rebozo and Robert Abplanalp, another close presidential pal, were concluding a deal for the purchase of 2.9 acres of Nixon's San Clemente property, apparently to help the President finance his lavish estate. According to the same sources, the purchase price of that parcel of land was exactly $100,000. Rebozo denied that any of the Hughes money was used in the transaction, claiming that those funds lay idle without even collecting interest during his trusteeship.

The week's testimony centered largely on the question of whether dirty tricks have become a normal part of the U.S. political process. The affirmative side was argued by John R. Buckley, 53, a G.O.P. spy who penetrated the Democratic campaign of Edmund Muskie under the code name "Fat Jack"; he blandly testified that such spying occurs in "every major election."

The Watergate grand jury was also continuing its work. Last week it indicted Egil Krogh Jr., the former top aide to John Ehrlichman. Krogh, who directed the White House plumbers, was cited on two counts of false declaration. The indictment charged that Krogh lied in his original testimony in August 1972, when he claimed that he had no knowledge of the plumbers' break-in at the office of Daniel Ellsberg's psychiatrist. He later admitted that he had authorized the burglary. Krogh's indictment was the first obtained by Special Watergate Prosecutor Archibald Cox.

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