Operation "Sandwedge," referred to on p. 200, here set forth in detail from the Senate hearings on "Watergate and Related Activities" (Executive Session Hearings before the Select Committee on Presidential Campaign Activities, Ninety-third Congress, Second Session, Washington, D. C., February 8, March 16, 20, and 21, 1974)

SUBJECT:    OPERATION "SANDWEDGE"    Tab 31

INTRODUCTION

The 1972 Presidential Campaign strongly suggests a definitive Republican need for the creation of a political intelligence security entity to be located within the private sector. This entity, surfacely disassociated from the Administration by virtue of an established business cover, would have the capability of performing in a highly sophisticated manner designed to ensure that the major offensive intelligence and defensive security requirements of the entire campaign and Republican convention would be professionally structured, programmed and implemented. In the author's judgment, this effort would make a significant and perhaps crucial contribution towards the reelection of Richard Nixon.

Indicated below, therefore, are a series of considerations and suggestions posed in this regard for the review of those requested to endorse the suggested undertaking.

I. OPPOSITION INTELLIGENCE EFFORT

The presence of Lawrence O'Brien as Chairman of the Democratic National Committee unquestionably suggests that the Democratic nominee will have a strong, covert intelligence effort mounted against us in 1972. The 1968 L. A. Times, New York Post, U. S. Marshall team which operated from former U. S. Attorney Morgenthau's office (assertedly without his knowledge) is evidence of O'Brien's modus operandi and indicative of what we can expect this time around.

In this regard, we should be particularly concerned about the new and rapidly growing Intertel organization (See Tab "A"). Should this Kennedy mafia dominated intelligence "gun for hire" be turned against us in '72, we would, indeed, have a dangerous and formidable foe.

Close scrutiny of this organization's activity has been ongoing here. Indicated below are a series of points designed to suggest the political hazards that this group represents:

A) The organization was co-founded by Bill Hundley, former Special Assistant to A. G. Bobby Kennedy and Bob Pelloquin, Kennedy loyalist who functioned as Senior Attorney in Justice's Organized Crime and Racketeering Section, also under Bobby Kennedy.

B) Other Kennedy mafia types, including the so called mysterious David I. Belisle, former Director Investigations for the National Security Agency, are principals in the organization.

C) It has been reliably determined that Stephen Smith, EMK's brother-in-law, has privately visited Intertel's New York office headed by former FBI supervisor Jack O'Connell known by his colleagues to have been a "black bag" specialist while at the Bureau. Smith, unquestionably, would think Intertel should EMK go for the big prize.

D) On Intertel's Board of Directors is Jerome S. Hardy, Executive Vice President of the Dreyfus Corporation which is chaired by Howard Stein. The media reports that Stein will be a heavy contributor to a Democratic-Liberal or Third Party Presidential candidate. Shortly before this media revelation, the aforementioned Jack O'Connell accompanied an electronics specialist to both Stein's and Hardy's offices for sweeping purposes.

E) It has been very reliably determined that some of Intertel's principals possess gambling weaknesses or have been quietly let go from their sensitive federal law enforcement positions because of financial improprieties. One Intertel principal, related to a known Baltimore Cosa Nostra figure and released from federal service because of an established gambling weakness, is now in charge of Hughes' security operation in Las Vegas.

F) The investigative reporter fraternity is taking a closer look at the potential for Intertel to be exposed as a mafia front or a mafia exploitable tool for its Caribbean and Vegas operations. The recent Look article on Howard Hughes alludes to this point. Bill Kolar (former Chief of Intelligence at IRS) and Resorts International's President I. G. (Jack) Davis, recently testified before the New Jersey legislature advocating legalized gambling in that mafia ridden state.

All of the above facts are mentioned to suggest how the weaknesses of Intertel, intertwined with established Democratic Kennedy loyalties make the organization most susceptible to a '72 intelligence gun for hire approach by O'Brien or the Democratic Presidential nominee. The deep concern here is that the assignment could be accepted on a compartmentalized basis and easily hidden from republican James Crosby, Chairman of the Board of Resorts International (assertedly owning 91% of Intertel stock). Jim Golden, formerly with Intertel, has now switched over to the Hughes' Tool Company and is far removed from the day to day intelligence activities of Intertel. Thus the operating headquarters is bereft of any Nixon support or loyalty.

The total offensive intelligence, defensive security requirements for the '72 Presidential Campaign and Republican National Convention will be a large and sensitive undertaking. Operation Sandwedge proposes that it be charged in this regard with the following responsibilities:

It is recommended that consideration be given to have Intertel neutralized by Justice to preclude such development from taking place or to discourage consideration by O'Brien or Stephen Smith. This can be accomplished by directing Justice (if it has not done so already) to open a case with a view towards determining if the organization has unauthorized access to sensitive government files. It most certainly has.

Among other factors supporting this contention is the consensus in the federal intelligence sector indicating that Intend, in all likelihood, delivered the details of a reported Justice-IRS skimming investigation of Bob Maheu to Hughes causing Maheu's fall and Hughes' departure from Vegas. The manipulated threat of indictment of Intertel principals would effectively minimize this threat, create a potentially debilitating intelligence weakness for O'Brien's forces and force them to try other, less sophisticated sources. Additionally, "Operation Sandwedge" would be free to operate both offensively and defensively without a dangerous adversary.

PROPOSED "SANDWEDGE" RESPONSIBILITIES

OFFENSIVE (New York City based - clandestine operation)
A) Supervise penetration of nominees entourage and headquarters with undercover personnel.
B) "Black Bag" capability (discuss privately) including all covert steps necessary to minimize Democratic voting violations in Illinois, Texas, etc.
C) Surveillance of Democratic primaries, convention, meetings, etc.
D) Derogatory information investigative capability, world-wide.
E) Any other offensive requirement deemed advisable.

DEFENSIVE OPERATIONS
A) Select and supervise the private security force hired in connection with the Republican National Convention. Conduct all political security investigations at Republican Convention.
B) Establish and supervise nation-wide electronic countermeasures capability in connection with all non-presidential security aspects of '72 campaign.
C) Supervise all security operations at 1701 Pennsylvania Avenue, RNC. Conduct all security investigations (leaks, personnel, etc.)
D) Ensure, the political security aspects of the travelling campaign staff.
E) Conduct any Republican Party-Campaign oriented investigation nation-wide.

OPERATION COVER

The consensus dictates that a privately created corporate business entity would be the most effective tool to implement the sensitive responsibilities indicated above. The corporation would posture itself as a newly formed security consulting organization ostensibly selling itself as a group of highly talented investigator-security experts with impeccable Republican credentials who actively seek only Republican Corporations and law firms as clients.
Since the key operating principals (3 or 4 persons) in the corporate entity would be well known Nixon Loyalists in the law enforcement area, the defensive involvement as outlined above, would be plausible and readily acceptable to all friend or foe inquiries.
The offensive involvement outlined above would be supported, supervised
and programmed by the principals, but completely disassociated (separate
foolproof financing) from the corporate structure and located in New York City in extreme clandestine fashion. My source would be charged with setting up and supervising this operation. In other words, he would not surface. Rather, his responsibilities would be increased and he would be charged with setting up the clandestine operation in exactly the same fashion as he did during his career. You are aware, of course, that his expertise in this area was considered the model for police departments throughout the nation and the results certainly prove it.

"SANDWEDGE" PRINCIPALS

It is suggested that the best method of ensuring the success of Sandwedge is by limiting the principals to an absolute minimum, but to allow for an expansionary backup of consultants on a case by case basis where the need arises. The involvement in defensive campaign activity as indicated above would, under inquiry, be postured as a natural "ad hoc" contribution on the part of the corporation to the '72 Republican effort. The covert or offensive side of the operation, in no way connected to the corporation, would be untraceable to any of the principals or the Administration.

Necessarily then, the principals should be strong Nixon loyalists, possessing the necessary credentials to perform in this highly sensitive area professionally, with the described effective cover. Below are listed the principals who are ready, willing and able to so participate in the manner designated.

JOHN J. CAULFIELD

I. Cover - Because of White House experience and contacts, has decided to create a Washington based security consulting-investigative organization which would seek Republican corporations and law firms as clients.

2. Assignment - Receive and program all activities and assignments, including the New York City operation, set as liaison with selected White House staff before and during campaign for sensitive investigative needs. Liaison with Cabinet when necessary. Liaison with 1701 Pennsylvania Avenue operation on all security-investigative needs. Liaison with Republican National Committee in connection with their investigative needs.... Liaison with RNC on the programming of all security at the Republican National Committee.

JOSEPH WOODS

1. Cover - Since only engaged part time as a County Commissioner in , Illinois and needing funds to support his large family (true enough!), has decided to become a principal in a potentially lucrative, Washington based Republican oriented security consulting firm utilizing expertise in law enforcement (FBI - Sheriff Cook County) and political contacts nation-wide. Will seek to build the organization in the mid-west, taking advantage of the large influx of Republican big business into the Chicago area.
2. Assignment - In charge of all private security forces at the Republican National Convention. In charge all covert efforts (discuss) designed to preclude voting frauds in Illinois, Texas, etc. Liaison active and retired FBI agents, nation-wide, for discreet investigative support (Hoover also to Evaluate). Liaison nation-wide with Republican State Chairmen for investigative support. Support New York City covert operation.

NOTE

It is interesting to report that Intertel made a lucrative offer to Joe Woods last week ($30,000 per annum, stock options, etc.) indicating he would be in charge of their new Chicago office. This tack is viewed as an attempt to purchase White House prestige. In the author's judgment, the compartmentalized political hazards, previously indicated, would still constitute a real and present danger.

VERNON (MIKE) ACREE - Deputy Commissioner IRS, Inspection Division

Mike is the highest ranking Republican career official in the Internal Revenue Service. A synopsis of his outstanding career is attached hereto. (TAB "B"). He is a strong Nixon loyalist and has so proved it to me, personally, on a number of occasions. His management and investigative expertise will be invaluable to the undertaking, especially in the financial investigative area - crucial in a campaign of this type.

1. Cover - Mike has decided to retire after 32 years of federal investigative service. He has witnessed the financial success of Intertel and has decided to join a small group of Republican oriented principals who wish to emulate and improve on the Intertel experience dealing only, however, with republican corporations and law firms.

2. Assignment - IRS information input, financial investigations, liaison federal law enforcement establishment nation-wide, preparation of reports, briefings to key Administration campaign figures on results. Support New York City operation.

CONSULTANT PERSONNEL

Under the cover of the corporate entity hiring Republican consultants to assist in meeting the needs of its clients, a medium for the likely required expansion of the covert aspects of the undertaking would be established in compartmentalized fashion, thereby minimizing any threats to exposure inherent in a large covert operation. The consultants would be brought on to perform ad hoc assignments on a case by case basis in any area or undertaking.

CORPORATE STAFF

As suggested, a bright young Nixon loyalist with attorney and business managerial credentials should be brought on board to take complete charge of the corporation's business requirements. He would function as a technician with little or no responsibility or knowledge regarding the covert aspects of the operation.
No candidate will be considered for this assignment until the concept receives a go. Anne Dawson, understandably, would be a key and valuable asset in this undertaking. Trudy Brown (presently in White House Security liaison with FBI) would, if willing and could be spared from her present duties, also be highly valuable. Any other administrative help brought on board would be of the same caliber as Anne and Trudy.

FUNDING

Reviewing the above proposed broad ranged responsibilities of Operation Sandwedge, it is clear that it would be impossible to judge, at this time, what total costs for such an undertaking would be involved. The major initial costs, of course, would relate to principal, management, technical and secretarial salaries, as well as office and equipment in Washington and Chicago. It is expected that substantive additional costs would become evident as the requirements for effective operation come more clearly into focus.

What is obviously needed, therefore, is a funding technique which would enable the corporate cover to raise whatever monies would be required on a legitimate and painless basis. It is suggested that the business cover, indicated above, provides the ideal and proper framework to resolve this problem, as follows:

The overt security consulting services to be offered Republican corporations by the business entity would clearly be a deductible business expense. There are no IRS requirements dictating the amount, type or quality of service which must be performed for a given consulting fee. This is strictly a matter for negotiation between the client and the entity performing the service.

Thus, it is clear that if the new Corporate Security Consultants International firm were in a position to "negotiate" as many lucrative consulting agreements as required on an expandable, need basis with trustworthy Republican corporate giants, the funding of this effort could go smoothly forward with no direct financial connection to the Administration or Republican National Committee. Further, the sensitive and often traceable area of political contributions would be eliminated as a hazard to this undertaking.

As indicated, funding for the proposed New York City operation would require special measures. There are some very discreet and viable approaches to this matter but, it is suggested that they be discussed on a private basis only.

CONCLUSION

This paper, then, is submitted with a view towards presenting, for review, a highly sophisticated approach to a critical aspect of the 1972 Presidential Campaign. It is suggested that the various subheadings indicated (SEE TAB "C") in the proposal provide a proper agenda after high level review for a meeting between the principals indicated and the officials charged with final decision.

It has been indicated that it is already very late for this proposed undertaking to be in review status - the authors concur. It is respectfully requested, therefore, that the highest priority attention be given this matter. We await your reply..