At private dinners Louise joined Elias in hunting for the facts. She told him she’d heard that Nixon campaign officials John Mitchell and Maurice Stans had been in regular contact with Tom Pappas as he traveled back and forth among his corporate headquarters in Athens, his suburban Boston home, and his Washington office. As vice chairman of the Nixon finance committee, he had a private office at Nixon campaign headquarters. Elias knew that Pappas had been a driving force behind efforts to get Greek-Americans to open their wallets. Louise told Elias that Stans and Mitchell had also been urging Pappas to bring in more donors from Greece. And the Times of London article, prompted by Elias’s tips, had noted that Pappas’s non-profit charity had “been named as one of the ‘conduits’ used by the CIA for distributing secret funds in Greece.”9
Elias’s first break came in an early-October call to Athens. He reached at home a well-placed, lower-level operative who worked at KYP headquarters, a man who had been a reliable source in the past. The informant reported there had been heavy pressure on KYP to come up with a lot of cash fast for the Nixon campaign—more than half a million US dollars. The cash had to be in large-denomination US currency, preferably $1,000 bills that could be easily transported. The man behind this aggressive demand was said to be Tom Pappas.
The CIA had shaped KYP and trained many of its agents. The two organizations shared space in the same building. Their personnel worked together, socialized together, and shared common values and worldviews. Papadopoulos had been part of this group. American funding “came directly…bypassing the standard budgetary channels of the Greek government.”10
When George Papandreou took power in 1964, he began “restructuring” KYP, imposing some government controls on the clandestine CIA-to-KYP relationship and making the funding process more transparent.11 The arrangement reverted to its old pattern after the military takeover. It is highly likely that, in 1968, US taxpayer funds sent to Greece through annual authorized, unvouchered CIA black budget operations ended up amongst the money secured by Pappas for Nixon.12
The KYP point person identified by Elias’s informant was Michael Roufogalis, then deputy director and acting head of KYP, a close friend of Papadopoulos from their days in military school, an EENA conspirator, and one of the original 1967 coup plotters. Elias knew Roufogalis’s reputation for tawdry sexcapades and unbridled corruption. During an earlier stint when he was in charge of KYP personnel, tales of supplicants streaming to his house with cash-filled bags were commonplace. Elias learned that Roufogalis had presided over the meetings at Greek intelligence agency headquarters. KYP had loads of drachmas on hand, but it lacked the foreign exchange necessary to provide the requested US currency.
Elias was told that KYP turned to the treasurer and fiscal agent of the Greek government itself, the Central Bank of Greece. It was the only institution in the country that had enough foreign exchange on hand to produce more than half a million US dollars in high-denomination bills. It also had a reputation for secrecy and, if the right levers were pushed, could be made to act quickly.
Roufogalis had Pappas’s requested funds, but in drachmas. All he wanted to do was make a legal currency exchange. But it didn’t work out as smoothly as he and his confederates expected. Although the Central Bank had much more foreign exchange on hand than did KYP, it said it didn’t have enough to give Pappas all the large-denomination cash he wanted at once. Because the bank would need to replenish its resources, Pappas was told he would have to make several trips back and forth between the USA and Athens to collect and deliver the full contribution.
Roufogalis checked with his military-regime colleagues. Involving members of the junta turned a semi-clandestine caper into an open secret. In an effort to trace the money Pappas was bringing to the US, Elias called his friend John Pesmazoglou, scion of a distinguished banking family whose Greek roots extended back before the War of Independence. Pesmazoglou had been a high-ranking official at the Central Bank until he resigned to protest the junta takeover. It was Pesmazoglou who had challenged Elias to do more than just air his suspicions of a coming coup. In a scene recalled years later by Pesmazoglou’s widow, Elias asked Pesmazoglou if he could confirm the KYP story. Assuming his phone was tapped, Pesmazoglou was noncommittal, stating only that “nothing the junta did would surprise him.”13
Next Elias called Xenophon Zolotas, the former head of the Central Bank who had resigned at the same time as Pesmazoglou. Zolotas was a man with an international reputation for probity. Had he still been in office, he would surely have resisted the overture from KYP, compelling a frustrated and angry Roufogalis to turn to members of the ruling government to intervene. But Zolotas was gone from the bank. In response to Elias’s question, he confirmed that he had second-hand knowledge that a demand on the bank had been made by Roufogalis, acting on behalf of Pappas. If Demetracopoulos wanted direct confirmation, however, Zolotas said he should talk to the current Central Bank governor.
Dimitrios Galanis had been a deputy governor of the Central Bank since 1955, in charge of the administrative wheels and levers. When the junta took over and his superiors resigned, he was promoted to governor. A short, sixty-nine-year-old, balding man with bushy dark eyebrows and round plastic eyeglasses, he sat on chair-cushions so he could see visitors over his desk.14 Elias considered Galanis a loyal cog in the junta machinery and delayed making the call. Then a big break came serendipitously, when he called Daisy Schlitter—not to explore the money-transfer story, but to check up on how the family was faring under the dictatorship, and how Daisy’s daughter Marion was doing after her difficult divorce.
Daisy told Elias that Marion had found someone new—an older man who was besotted with her daughter and lavished gifts on her and her children. The man’s name: Dimitrios Galanis. And Galanis, according to Daisy, had talked in general terms to her daughter about the Roufogalis overture being made on behalf of Pappas.
At first Elias couldn’t reach Marion, so he called his well-informed friend and journalist Mario Modiano, who told him the Marion Schlitter–Galanis relationship was anything but a secret. Modiano said he had gone to a cocktail party hosted at Marion’s place at which the head of the Central Bank of Greece was wearing an apron and tending bar.15 When Elias talked to Marion, she updated Elias excitedly on her relationship and offered to speak to Galanis in advance of a telephone call from Demetracopoulos.
Elias’s conversation with Galanis was brief but frank. Off the record, the head of the Central Bank described the $549,000 drachmas-to-dollars request and its breakdown into three tranches, which had been completed. According to Elias’s later account, which he said included three different credible sources on the United States side, three tranches of money went directly from Pappas: once to Mitchell and twice to campaign treasurer Maurice Stans.16 Galanis confirmed Roufogalis’s role as a go-between, adding that Tom Pappas had been the meson (fixer), and the person who Galanis said personally transported the cash to the Nixon campaign. Galanis, however, would not provide Elias with copies of any documents involved. Years later, after the junta fell, Elias asked Kostas Tsimas, then director of EYP, KYP’s re-named agency, for documentation of the money transfer. Tsimas was unable to do so but told Elias that longtime agency staff had orally confirmed it.17 Pavlos Apostolides, former head of the EYP and author of a leading history of Greek intelligence services, wrote later:
Having gone through most of the outgoing documents, my conclusion is that anything important has been destroyed…, there was probably never any written account of the role of KYP in the affair.18
The Greek government viewed the Nixon campaign contribution as a good investment. According to Ambassador Henry Tasca’s 1975 statement to a House investigator, the colonels’ campaign “gift” was the apparent reason for Agnew’s endorsement of the junta in late September 1968.19 The Greek leaders had decided that Nixon-Agnew would be much more sympathetic to their cause than the Democrats. The junta had already spent $250,000 hiring Thomas Deegan’s New York public relations agency, which also represented Tom Pappas’s business interests, for the first year of an image-building campaign. Deegan had promised progress on getting the arms embargo lifted, but Elias and his anti-junta allies had succeeded in blocking that campaign. If Nixon-Agnew won, the colonels reasoned, much of their image-management work would be done for free.20 A European PR consultant who was preparing to take over the Deegan account said that his contract negotiations stopped cold in the fall of 1968, presumably after Pappas made the money transfers.
Had any of the money transferred to the KYP from the CIA for Greek security activities then been laundered back to influence a US presidential campaign been US taxpayer money—as Demetracopoulos and others believed—it would have been a clear violation of the CIA charter against getting involved in domestic politics. Federal campaign-finance laws about foreign contributions, designed to protect the integrity of the American political process, were largely nonexistent or toothless at the time. Nevertheless, the untested 1966 amendments to the 1938 Foreign Agents Registration Act, particularly 18 USC Section 613 concerning political activities on behalf of a foreign principal, provided fines of $5,000 and five years of jail time for each offense. This legislation clearly applied to the KYP-Pappas-Nixon money connection. Even if the $549,000—the rough equivalent of $4,000,000 today—were not ultimately adjudicated as a violation of federal law, public revelation of it, handled correctly, would have been an explosive October Surprise and a potential game-changer for the Humphrey campaign.
While the Nixon campaign was unfolding its well-lubricated campaign, the Democratic Party was desperately worried about money. Contributions, especially since the riots at the Chicago Democratic Convention, had all but dried up, and the campaign was on track to being outspent by Nixon 5 to 1. Political scientists like Kathleen Hall Jamieson and longtime political analysts like Mark Shields have asserted that the 1968 race was definitely “decided by money.”21 The idea that US taxpayer dollars had been laundered by the Greek junta with CIA complicity could have been a major blow to Nixon.
Demetracopoulos could have fed such a big story to several reporters and urged them to follow up. He was a reliable source for scoop-hungry columnists like Rowland Evans and Bob Novak, and muckrakers like Jack Anderson and Drew Pearson. He also could turn to his friends on Capitol Hill for statements of outrage and calls for investigations. But none of that happened.
With less than three weeks until the election, Elias decided the most efficient approach with the strongest payoff was to get the story directly to President Johnson and have the President ask his CIA director to confirm or deny it. Afterward, assuming it were true, Johnson could then leak the story, along with high-level confirmation of its veracity. Richard Helms, Elias reasoned, had been appointed to the top CIA job by Johnson himself and would not lie if asked directly because he was afraid of the President’s vindictive streak. At the time, Elias was unaware of the extent to which he was known to and disliked by Helms.22
Demetracopoulos pondered how best to reach Johnson. His first choice was Larry O’Brien, Democratic Party Chairman and Humphrey campaign manager. O’Brien would surely have the necessary incentive and access. But how likely was it that the campaign manager would ever make himself available to a foreign journalist from a small country during the last weeks of a heated campaign?
Demetracopoulos telephoned longtime friend and former California governor Pat Brown. Although defeated by Ronald Reagan in November 1966 in his bid for a third term, Brown was still a highly regarded Democratic Party elder who could open doors quickly. When he called early in the week of October 14, 1968, Elias was so cryptic in his message and opaque about the supporting evidence that at first Brown didn’t understand what Elias was talking about. Finally piecing together enough to convince himself of Elias’s seriousness, he agreed to call O’Brien. O’Brien, appearing not to understand the importance of the message, tried to beg off the idea of a meeting and advised Brown to have Elias prepare a thorough memorandum and send it to his office. “Please tell him it’s so late and I’m so busy it will be difficult to find time,” he said. Brown urged his friend not to give up hope, telling him he would be in Washington in a couple of days and they could discuss the matter in person.
On Thursday, October 17, over lunch at the Madison Hotel, Elias gave Brown the full story. He also showed him an article from Tuesday’s New York Times with an October 14 Athens dateline, referring to a press statement from the Greek junta dismissing as “ludicrous” rumors that it was financing the Nixon campaign. The regime said it had an “impartial attitude” toward the American election and blamed Andreas Papandreou, the “well-known roving former politician and country abnegator,” for spreading the allegations.23 Elias did not tell Brown that he was a source behind the article, having shared the information with Papandreou in Sweden, who had in turn talked to the Swedish press.24 Brown thought that Elias’s scoop was a blockbuster. As someone then representing Indonesian interests in Washington, he knew how an orchestrated exposé of foreign money in an American election could be exploited to the detriment of both donor and recipient.
Brown agreed that the best strategy was to go through O’Brien to Johnson. O’Brien, after all, had worked as White House congressional liaison during both the Kennedy and Johnson administrations and had been LBJ’s Postmaster General. Running the President’s campaign in Wisconsin in March, O’Brien was the one who had warned his candidate of his looming defeat there, which prompted Johnson to announce that he would not stand for reelection. Armed with additional information from the Demetracopoulos luncheon and believing that the story could be a game-changer for beleaguered Democrats, Brown called O’Brien again and insisted that he sit down with Elias. O’Brien agreed to a Saturday appointment.25
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LARRY O’BRIEN WAS also on the mind of reclusive business magnate Howard Hughes, who was seeking to buy himself presidential access by donating to Humphrey, Bobby Kennedy, and Nixon, his favorite.26 Hughes was in awe of the entire Kennedy campaign staff, especially campaign manager O’Brien, and viewed the RFK assassination as an “opportunity” to hire him.27 When Hughes’s consigliere Robert Maheu contacted O’Brien on June 28, he found “a man without a job…quite available to discuss the possibility of involvement with Hughes” and happy to have the tycoon as his first client in a new consulting business.28
Hubert Humphrey was also eager to have Larry O’Brien take charge of his presidential campaign. O’Brien agreed to design the first draft of a strategic plan and to help only through the convention. He brought with him political consultant Joe Napolitan, often dubbed the father of modern campaign professionals.
In Chicago with demonstrators chanting “Dump the Hump, Dump the Hump” and much worse in the streets below his hotel window, Humphrey, according to O’Brien, asked, “Larry do you hear those people down there?…Don’t leave me naked. How can I pull all the pieces together in so short a time?”29
O’Brien did not think Humphrey could win but agreed to continue with the campaign through election day, putting off going full-time with Hughes until after the election. To avoid any seeming conflict of interest, Maheu wrote, “we eventually worked out an arrangement in which we paid $15,000 a month to the public relations firm of Joseph Napolitan Associates in Washington, D.C. with O’Brien overseeing the company’s work…that arrangement continued until October 1969, when O’Brien opened his own consulting firm…and went officially on the Hughes payroll.”30
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WANTING TO BE prompt and fresh for his Saturday, October 19, meeting with Larry O’Brien, Elias asked his longtime friend from his days in Greece, economics advisor Dick Westebbe, to drive him the short distance from the Fairfax to the Democratic headquarters in the Watergate complex.31 While waiting, he was surprised to see across the street an Air Force colonel, who had been a US intelligence officer in Athens, walking toward him. The two men exchanged silent nods. Coincidence, Elias wondered?
Inside the capacious and crenelated Watergate complex, Demetracopoulos rode an empty elevator to the sixth-floor executive offices of the DNC and pushed open the glass doors to the brain trust of the Humphrey campaign. Larry O’Brien greeted Elias with his storied Irish charm. After sharing warm words about Pat Brown, O’Brien ushered him into his office and introduced him to staffers he had invited to hear Demetracopoulos’s hot news. They included O’Brien’s principal assistant Ira Kapenstein, a former Milwaukee Journal reporter who had been O’Brien’s right hand at the Postmaster General’s office; Claude Desautels, assistant to the chairman, who would later go into business with O’Brien and Howard Hughes; and Andrew Valuchek, Assistant for Ethnic Groups.
When Elias looked across the table from him, he saw a Democratic Party power broker, someone with direct access to the President of the United States, a trusted friend of the current candidate who would likely jump at his report, and veteran campaign staffers, highly skilled at vetting information and getting the word out. Elias told his story slowly and carefully. He explained the chain of events, from the junta leaders’ fears of a Humphrey presidency and Agnew’s changed position to the involvement of the KYP, probably while using CIA funds. He told them about Tom Pappas as personal instigator and bagman, from start to finish.
Several times they interrupted Elias to ask: “How can you prove it?” Elias first told the group that he had corroborating witnesses both in KYP and the Bank of Greece, as well as American sources who claimed to know about the Pappas transfer of funds to John Mitchell and Maurice Stans. He said that it was possible, with O’Brien’s help, to establish a full audit trail.
He recommended that O’Brien ask Johnson to call in Helms and ask him directly for corroboration, using his CIA sources. If that didn’t work, Elias told the DNC group, he had two backup solutions. O’Brien, he said, could send a couple of staffers or trusted friends of the campaign to Greece and meet Elias’s sources. If they went, he added, he could probably get others to confirm links in the chain. Demetracopoulos said he could make the arrangements for O’Brien’s representatives to meet his Greek sources in relatively secure locations. And if O’Brien didn’t want to do that, Elias offered to personally pay the airfare and interim accommodations for his sources and their immediate families to come to the United States and tell their stories. This third scenario, however, would require a provision for long-term funding for the sources, because after speaking out they could not return home.
The meeting lasted more than an hour. O’Brien wrote down the information about the names, connections, and payments, and told Elias he would explore the feasibility of the first proposal. He then instructed his staff to meet with Elias outside the office to discuss the other two approaches. The DNC chairman also asked that Elias not discuss this matter with anyone else, warning him that if he did and word leaked out, it could irreparably upset communications with the President and the CIA, which were delicate. Elias left the meeting feeling that a good-faith effort would be made.
Over the next week Kapenstein, both alone and with another aide, came to Demetracopoulos’s apartment at the Fairfax Hotel and to the Jockey Club to discuss the logistics of alternative scenarios. At first, Elias thought it strange that they agreed to meet so publicly. But if they chose to use him as such, he had no trouble promoting himself as a player in a national presidential campaign. The group was, indeed, watched.
He had a further talk with Daisy’s daughter, Marion, who earlier had said she was eager to relocate to the United States and wondered if Elias could help her get a job with an antiques store. She told him that Galanis was so in love with her that he would leave Greece, and his job, and follow her to Washington.32 She added that he had ample resources to provide for both their passage and indefinite living expenses for them and her children. Safely out of Athens, she said, Galanis would agree to speak to O’Brien’s investigators. As a result, resources would be needed only for one or two KYP contacts and their immediate families.
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OTHER EVENTS THAT week were sober reminders of the difficulties Elias faced in his fight against the junta. On Sunday, the day after the O’Brien meeting, news reports circulated widely about a picturesque wedding in a tiny chapel, nestled among cypress trees on the Greek island of Skorpios. Earlier Elias had tried, through Ted Kennedy’s confidential secretary Angelique Voutselas, to get the senator to urge the widowed Jacqueline Kennedy to choose a different venue for her nuptials with Aristotle Onassis. Elias knew that publicity from the event would be used by the dictatorship as a propaganda tool. Although Voutselas was sympathetic, she knew well it was not her place to ask her boss to get his sister-in-law to move her wedding “anywhere other than in Greece.”33 Even if she had, it would likely have had no effect. Jackie Kennedy appeared indifferent to being used, and other Kennedy intimates preferred a Kennedy-Onassis wedding as far as possible from paparazzi-prone venues.34
Then, on Monday, October 21, Elias was surprised to receive a letter instructing him to come in two days to a hearing concerning his deportation. The timing appeared more than coincidental, coming in the same week it seemed the US would resume sending heavy military equipment to Greece (which would be seen as a reward for the rigged September vote) and the Greek Supreme Court had dismissed appeals challenging the lawfulness of the plebiscite.
