Who dropped the dime on Yankees owner George M. Steinbrenner for making illegal campaign contributions to the Nixon campaign?
According to Steinbrenner it was Nixon. Steinbrenner told baseball writer Roger Kahn for his book October Men that he wasn’t really a Republican at all and had been shaken down by the president’s men.
Steinbrenner was buddies with House Speaker Tip O’Neill and Ted Kennedy. He had raised about $2 million for Democrats running for Congress in the Cleveland area. That didn’t sit well with Nixon aides Bob Haldeman and John Erlichmann. “The Nixon people were very annoyed at my Democratic fund-raising,” Steinbrenner told Kahn.
As the 1972 presidential election approached, Nixon’s henchmen demanded dirt on Kennedy and other Democrats from Steinbrenner. “Rough stuff,” Steinbrenner told Kahn, “not only stories about the politicians but about their wives. Drinking. Sex. Very damn distasteful, if you ask me.”
Nixon’s men threatened an antitrust investigation of American Shipbuilding, Steinbrenner’s company, and punitive IRS audits. Steinbrenner decided to buy his way out with campaign contributions to CREEP, Nixon’s reelection campaign. But when he refused to squeal on his Democratic buddies, the Nixon campaign responded with a 14-count indictment in April 1974.
That’s Steinbrenner’s self-serving version anyway. As a prosecutor’s memo makes clear, Steinbrenner had no trouble squealing on Nixon’s people, Teamsters, Merrill Lynch or anyone else who might get him out of trouble.
The obituaries for Yankees owner George Steinbrenner, who died this week at age 80, all refer to his 1974 conviction for illegal campaign contributions to the Nixon campaign and the pardon Steinbrenner received from Ronald Reagan.
Steinbrenner’s defense attorney was the legendary trial lawyer Edward Bennett Williams. Steinbrenner wasn’t impressed. “I paid him $100,000” Steinbrenner once reportedly said, “and all he did was a cop a plea.”
That’s true, but Williams did the best he could for a client who had dug a mighty deep hole for himself. The issue wasn’t the illegal contributions, per se. The problem was Steinbrenner, the chief executive of American Shipbuilding, had funneled the contributions through his employees (disguised as “bonuses”) and then instructed them to lie to a grand jury. That’s suborning perjury and people go to jail for it.
According to The Man to See, Evan Thomas’ splendid 1991 biography of Williams, the attorney told prosecutors that Steinbrenner could implicate others in exchange for leniency.
“Steinbrenner could provide us with more than a dozen companies which had been involved in 610 [illegal corporate contribution] violations. … Williams indicated that Merrill Lynch had substantial difficulties in the campaign finance area. … Williams indicted that Steinbrenner had heard that the Teamsters had given more than a million dollars, that the million dollars had been kept at the Hotel Pierre, and that someone from the Teamsters had stolen it back again,” prosecutor John Koetl wrote following a meeting with Williams on October 18, 1973.
Ultimately, on the obstruction of justice charge, the government allowed Steinbrenner to plead guilty to being an accessory after the fact, a misdemeanor and the sentencing judge let him off with a fine. The commissioner of baseball wasn’t so merciful; he suspended Steinbrenner for two years.
Update: The Smoking Gun beat me to the punch on this one. Here’s a copy of the memo