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Mr. McCLORY. He won the case ?
Mr. LATTA. One further question. When was he appointed to the Southern District of New York?
The CHAIRMAN. I am sorry; I think that this line of questioning is certainly not in order. Mr. Nussbaum's biographical sketch, along with the biographical sketches of all other members of the staff are included in a document that has been before this committee and I would advise the gentleman if he is interested to inquire into that (locument.
Mr. LATTA. I might advise the chairman that I am interested and I will advise it thoroughly.
Mr. SARBANES. Mr. Chairman, I think the point ought to be made on this point that Mr. Nussbaum was presented, as I recall, to the committee at an earlier time, at the very outset. With due respect to the gentleman from Ohio, this has happened before. Now, maybe the gentleman is not aware of it, but I do think that the thrust of his question misses an important simple factual matter. Mr. Nussbaum was presented to the committee, as I recall, at the very outset, when we met a number of the principal attorneys in this matter and his biography was included, it is my recollection, in the initial biographical material furnished to the members of the committee.
Is that not correct?
Ms. HOLTZMAX. Thank you, Mr. Chairman. I would just like to correct the record in one respect. That is that the firm that Mr. Nussbaum is a member of represented me and not—that was the capacity in which Mr. Nussbaum was associated with my case.
The CHAIRMAX. Mr. Doar.
Mr. Doar. Mr. Nussbaum will make the initial presentation with respect to this matter and go through this, review this notebook with you. Also, Mr. McKeithen will participate in that presentation.
The CHAIRMAX. Mr. Nussbaum.
The report that the committee has in front of it is basically divided into two sections. The first section is a sequence of events respecting the deduction for the years 1969 through 1972 for a gift of prePresidential papers. The gift claim having been made on March 27, 1969. That is the first section.
The second section of the report is a sequence of events respecting the reopening of the President's tax returns in 1973. Now, as Mr. Doar indicated, we are not going to do this in a normal fashion. This has not been structured in a paragraph form but in a report form. What I intend to do basically is just simply go down some of the highlights of the report and bring them to the attention of the committee. The committee will be able to take the report itself after this meeting and read it in more detail. I do not purport to cover every particular fact in this report. I am just sort of going to tell the story the way the report tells the story-or try to tell the storv. I will be referring from time to time to certain documents, both of which are attached as exhibits to the report itself--the report we are giving to
the committee—as well as exhibits which are attached to the joint committee report.
Now, I should say at the outset that this report was based on the following things:
It was based on the joint committee report, which is very extensive as the members know, which is based on materials obtained by the joint committee, which they consented to let us view, members of our staff. It is based on the IRS audit report and materials which the IRS has supplied to us from recent days.
It is also based on interviews that the staff has conducted of the major or the principal figures in this story, namely, Frank DeMarco, who was the President's tax attorney and a partner of Herbert Kalmbach; Edward Morgan, who was a deputy counsel to the President; Ralph Newman who is an appraiser and appraised the pre-Presidential' papers; Mr. Blech, who is an accountant for the President; Richard Ritzel, who is an attorney, a partner in the President's former law firm in New York, and Mr. Alexander, who is present Commissioner of Internal Revenue. Each of these people was interviewed in some detail and some depth by members of the committee staff. The results of those interviews, to the extent that they are pertinent, is contained in the report.
Now, the story of the 1969 gift really, in a sense, can be said to begin in 1968. The President stated that he met-President Nixon stated that after his election but prior to his inauguration, he had a meeting with President Johnson, at which President Johnson suggrested to President Nixon-President-elect Nixon at the time-that the President consider whether or not to take a deduction for certain of his papers, pre-Presidential papers, because President Nixon had not yet been inaugurated. Following this discussion with President Johnson, President Nixon contacted one of his partners, or one of his soon-to-be former partners in his law firm, Richard Ritzel, and they had discussions whether or not the President-elect should take a deduction for a gift of papers.
Yow, after these discussions, Mr. Ritzel prepared deeds or possible deeds, alternate deeds, for the President's consideration, for President Nixon's consideration, and sent these deeds to the President. This was all in December 1969. In addition, he sent to the President a memorandum respecting these deeds. This is a memorandum from Mr. Ritzel to President-elect Nixon.
Now, we have obtained a copy of that memorandum from the materials supplied by the Joint Committee and what I would like, with the members' permission, is for Mr. McKeithen to read that memorandum. It is about four pages but I think it is worth reading to the committee.
Mr. McCory. Do we have copies of that?
Mr. NUSSBAUM. No; you do not have copies of that memorandum. The only exhibits attached to this report which you have before you are exhibits we have obtained from the IRS in recent days. The memorandum was not attached as a copy to the Joint Committee report. That is the reason we are reading the memorandum to you now. Most of the other exhibits to which we will be referring are copies of the Joint Committee report and you will have them in front of you.
Mr. MCCLORY. Whose memorandum is it?
Mr. McKEITHEN. This is a memorandum, Congressman, dated December 27, 1968.
Mr. SEIBERLING. Mr. Chairman, could we have copies of that memorandum eventually?
Mr. DOAR. Yes.
Mr. McKEITHEN. The memorandum is addressed to President-elect Nixon from R. S. Ritzel, R-i-t-z-e-l. The memorandum reads as follows:
Included herewith are two forms of chattel deed running from you to the United States of America. The one marked "A" is a simple form of conveyance of paper, manuscripts, and other materials without restriction of any kind except that they are ultimately to be placed in the Presidential archival depository. The second, marked "B," is a form of chattel deed which conveys such papers, manuscripts, and other materials to the United States, but places restrictions as to their use. The limitations briefly are as follows:
1. You shall have right of access at all times.
2. During such time as you hold the Office of President of the United States, no other persons shall have right of access except those designated by you in writing to the General Services Administration.
3. The items are to be placed in a Presidential archival depository at such time as the same is established.
4. Item Nos. 3 and 4 in the chattel deed are technical provisions which we feel are necessary for the purposes for which the gift is being made.
I should stop right now and note that those paragraphs 3 and 4as a matter of fact, let me right now direct the committee's attention to the deed, the second alternate deed to which Mr. Ritzel is referring in his memorandum. That is included in the joint committee report in the appendix on page A-3.
The CHAIRMAN. Do we have an extra copy of that report? Mr. SEIBERLING. Mr. Chairman, is this the deed, one of the two forms of deed that was submitted by Mr. Ritzel?
Mr. McKEITHEN. Yes, sir, that is correct.
Mr. McKEITHEN. This is the second deed to which Mr. Ritzel is referring in his memorandum and the deed which is included in the joint committee report because it was the deed which the President executed.
As you see, on pages A-6 and A-7 are the paragraphs 3 and 4 to which Mr. Ritzel is referring in his memorandum.
Let me—perhaps I should go back and read Mr. Ritzel's descriptions of the limitations in the deed.
He says as follows:
2. During such time as you hold the Office of President of the United States, no other persons have right of access except those designated by you in writing to the General Services Administrator.
3. The items are to be placed in the Presidential archival depository at such time as the same is established.
4. Items Nos. 3 and 4 in the chattel deed are technical provisions which we feel are necessary for the purposes for which the gift is being made.
Then Mr. Ritzel goes on to say:
By way of explanation, we have been culling your files in our warehouse and likewise have been in touch with Ralph Newman, who has been the appraiser for the L. B. J., Truman, Kennedy, and other gifts of Presidential papers to the United States. Newman will be in New York on Monday to go over items which have been culled to date from the files. It is not our intent to give all of your papers at this time, but rather, only such as will be appraised at a value which will be somewhat in excess of the maximum charitable deduction which you can take on your 1968 income tax return. I have been in touch with Marty Feinstein
Who, by way of explanation, is the President's accountant in New York! That is not in the Ritzel memorandum. That is my explanation.
And he advises me that this figure is about $60,000. The reason for the two chattel deeds is that at the present time, we are not completely clear that there are sufficient papers which could be made available to the public at the moment and which would not be considered in the sensitive area. If we di. find by Monday that there are such papers, then we will use only the deed marked "A". If, however, we feel that there may be some which should be restricted from public perusal while you are the President of the United States, we will use the deed marked "B". It is more advantageous to use "A" only, but we have not had the time since I discussed this matter with you Sunday last at your apartment to complete a sufficient examination of the files to be sure that there are papers and manuscripts which would not be considered to be in the sensitive area. The reason for the unrestricted gift is that the value for tax deduction purposes will undoubtedly be higher than those upon which restrictions are placed. I would therefore suggest that both deeds be executed by you in duplicate.
Mr. Krogh, who is the bearer of this memorandum and the enclosures, will bring them back to New York so that they will be available on Monday. At that point, we will be able to go over the papers with Newman and attach the next schedules for which I presume we will have your authority to either or both deeds and make delivery to the General Services Administration.
I might also add for your information that the forms of deeds have been cleared both with the Commissioner of Internal Revenue and the General Services Administrator and arrangements have been made for a representative of the General Services Administration to receipt for the papers to be delivered at this office on either Monday or Tuesday of next week so that the matter will be completed before the end of the year.
The memorandum ends with the initials "R.S.R."
Mr. NUSSBAUM. Following the receipt of this memorandum by the President from Mr. Ritzel, the President and Mr. Ritzel had a discussion over the telephone on December 28, 1968, and the President stated that he had decided to sign the deed containing the restrictions. He did sign before the end of the year the deed containing the restrictions. As Mr. McKeithen indicated, if you look on page A-3 of the joint committee report, more particularly on page A-7 of that report, you will see—that is the last page of the deed-you will see the signature of Richard M. Nixon. The date is December 28, 1968. Underneath that, you will see a signature which was put on behalf of the General Services Administration on December 30, 1968. This is on page A-7 of the joint committee report.
Mr. Lort. You say the date was December 28 ?
Mr. NUSSBAUM. Yes; the President's signature is dated December 28, 1968.
Mr. WIGGINS. Mr. Chairman?
Mr. WIGGINs. I have to ask this question since I do not have a copy of the letter to confirm my own impression of what the gentleman just said, so I will ask you about the accuracy of my own impression.
The letter to the President explaining the two options with regard to the gift, one being a restricted gift and the other apparently being an unconditional one, advised the President that that fact bore only upon the value to be assigned for the papers given and not upon the validity of the gift itself. Am I correct in understanding it that way?
Mr. McKEITHEN. Mr. Congressman, the memorandum dealt with two principal points, both the value of the papers and the sensitivity issue in connection with the restrictions. The memorandum did not deal with the validity of the deed itself as it would be affected by the restrictions.
Mr. WIGGINS. All right, fine, thank you.
Mr. FLOWERS. Did not it say that he had cleared it with the Commissioner of Internal Revenue?
Mr. McKEITHEN. That is correct.
Mr. FLOWERS. What do you think he cleared it for, then? There would be no purpose in clearing it with him if it were not for tax purposes; would it?
The CHAIRMAN. Well, he cannot say.
Mr. FLOWERS. Well, I cannot surmise any other reason for him to submit it to the Commissioner of Internal Revenue if it were not for the purpose of seeing if it were adequate.
Mr. NUSSBAUM. That is probably correct, Congressman. The only thing is there is no discussion in the memorandum with respect to the possibility, for example, that one deed might not be sufficient. If it is too restrictive. He does not discuss that point in the memorandum although, as you point out, he does say in the memorandum that the deed was cleared with the Commissioner of Internal Revenue and obviously the only reason to clear that with the Commissioner of Internal Revenue is for tax purposes.
Mr. Dexxis. But, Mr. Chairman, if I may make an observation, unless I completely misunderstood what the gentleman read, he says that the unrestricted gift would be more advantageous and then he proceeds to give the reason, which is that the value would be greater if it were unrestricted and he says nothing when he is discussing that very point as to why it is advantageous to indicate in the slightest that there would be any question as to its validity. Now, is that not true ?
Mr. NUSSBAUM. That is correct.
Mr. McClory. If the gentleman will yield, he used the word "validity” and that is the thing that concerned me, that the memorandum does not indicate the validity of the deeds and the purpose of submitting to the Commissioner was to establish their validity for tax purposes.
Mfr. Nussbaum. No; it does not indicate that fact. It just says it was cleared with the Commissioner. That is all it says. It does not say the reason why it was cleared with the Commissioner of Internal Revenue.
Mr. McClory. Mr. Chairman, what would the other reason be for clearing it?
The CHAIRMAN. I do not think
Mr. Doar. Congressman, I think there are two things. One would be the validity of the deed with respect to a transfer of the papers