Hughes/Nixon

The Questionable Loan that Instigated the Watergate Scandal

Dan Lauer
7 min readOct 2, 2024

History often hinges on moments of chance, on seemingly insignificant events that, when viewed in isolation, appear disconnected from the grand narratives that define the past. Consider the assassination of Archduke Franz Ferdinand in Sarajevo in 1914-a clumsy, almost farcical affair that, by pure luck, succeeded in plunging the world into chaos. The assassin, Gavrilo Princip, had failed in his initial attempt to kill the Archduke and was left despondent, sitting in a café, eating a sandwich. But fate had other plans. Having taken a wrong turn, the Archduke’s car stalled right in front of Princip’s café. In that moment of happenstance, a bullet was fired, and the world was irrevocably changed.

Had that car not stopped, had Princip not been in that exact location, history might have taken a different course. No World War I, no Treaty of Versailles, and perhaps, no rise of the Nazis. Without Hitler’s ascent, World War II might never have occurred, and the race to develop the atomic bomb, along with the ensuing Cold War, might have been avoided entirely. These seemingly unrelated threads are woven together by fate’s delicate and often unpredictable nature.

This concept that the trajectory of history can be altered by the smallest of events parallels the story of Howard Hughes, Richard Nixon, and the Watergate scandal. Here, too, we see how a series of seemingly unrelated incidents led to one of the most notorious political scandals in American history and the eventual downfall of a president.

Howard Hughes, the enigmatic billionaire, was a man whose influence extended far beyond his wealth. His connections to Nixon were rooted in the infamous loan to Nixon’s brother, Donald, and in a series of interactions that profoundly shaped Nixon’s presidency. Hughes had long supported Nixon, not out of any deep political conviction but because he saw Nixon as a useful ally-a pawn in his own game of power and influence.

Hughes’ influence on Nixon began early, with financial support that would later haunt the president. The most notable instance was the $205,000 loan Hughes provided to Nixon’s brother, Donald, to prop up his struggling restaurant business. While this might have seemed like an innocuous act of generosity, it was anything but. Nixon knew that this loan could become a political liability. As his presidency progressed, he became increasingly paranoid about the potential fallout should the connection between Hughes and himself be exposed.

But the loan was just the beginning. Hughes was involved in the covert operation known as Project Azorian, where his company provided cover for the CIA’s attempt to recover a sunken Russian submarine. This operation underscored Hughes’ deep ties to the U.S. government and positioned him as a key player in Cold War-era espionage. Additionally, Hughes attempted to bribe Nixon to halt nuclear testing near Las Vegas, an area where Hughes had significant real estate interests. Like the loan, this bribe was part of Hughes’ broader strategy to protect his business ventures and wield influence over American politics.

This was not a singular event for Hughes. His business practices often skirted the boundaries of legality and ethics. His approach to business was marked by a willingness to push limits, manipulate systems, and employ questionable tactics to achieve his goals.

One of the most well-documented examples of Hughes’ unethical practices was his use of offshore accounts and tax evasion strategies. Hughes took advantage of various tax loopholes and established offshore accounts to shield his wealth from taxation. Hughes Tool Company was known for engaging in aggressive tax avoidance techniques, allowing him to amass and maintain his fortune with minimal contributions to public coffers.

Hughes was also notorious for using his wealth to exert influence over politicians and government officials. He made significant political contributions and provided financial support to various campaigns, often with the expectation of receiving favorable treatment in return. This included attempts to bribe officials to secure contracts, avoid regulations, or gain other business advantages.

Hughes was known to engage in stock manipulation to protect his business interests. He would buy or sell large quantities of stock to influence the market, often in ways that would benefit his companies at the expense of others. This type of market manipulation was illegal, but Hughes could use his resources and connections to avoid significant legal repercussions.

Hughes was often accused of disregarding worker safety and fair labor practices in his various ventures, particularly in aviation and film production. His drive for innovation and cost-cutting measures sometimes led to unsafe working conditions, particularly in his aircraft manufacturing operations. Hughes Aircraft was involved in multiple lawsuits related to labor violations and worker safety issues, reflecting a pattern of prioritizing profits over ethical considerations.

Hughes’ vast business empire and his tendency to dominate markets led to numerous antitrust concerns. His acquisition strategies, particularly in the airline industry, often involved practices that stifled competition and skirted antitrust laws. For example, his attempt to take over Trans World Airlines (TWA) involved aggressive and questionable tactics, including price-fixing and leveraging his political connections to block competitors.

Hughes was deeply involved in the defense industry, supplying the U.S. military with aircraft and weapons technology. However, his dealings were only sometimes above board. There were multiple instances where Hughes Aircraft Company faced accusations of overcharging the government for defense contracts and delivering substandard products. These practices raised ethical and legal questions, but Hughes often managed to evade significant consequences due to his influence and the importance of his company to national defense.

By 1970, Nixon’s connection to Hughes was a source of growing paranoia as the campaign for his second term rapidly approached. He knew his association with Hughes could be politically damaging, especially if the loan details or the attempted bribe became public. This fear was not merely about the financial transactions themselves but about the potential for scandal-a scandal that could unravel his presidency.

This fear drove Nixon to order the break-in at the DNC headquarters in the Watergate complex. Nixon was not simply seeking political intelligence; he was trying to protect himself from the potential exposure of his ties to Hughes. The burglars were after anything that could be used against Nixon-or, more precisely, anything that could prevent the Democrats from using Hughes against him.

However, the popular narrative of Watergate often misses this nuance. One of the most common misconceptions about Watergate is that the break-in was primarily an effort to obtain information that would ensure Nixon’s re-election. While political intelligence was certainly a goal, the true motivations behind the operation were far more complex and personal. Nixon’s paranoia about his connections to Howard Hughes and other sensitive issues significantly drove the decision to break into the DNC.

Another misunderstanding revolves around the level of competence attributed to the burglars and the operation itself. The popular narrative often assumes that the break-in resulted from a well-coordinated and highly skilled group of operatives. In reality, the Watergate operation was anything but efficient. The burglars, who were a mix of former CIA operatives and other hired hands, were far from the elite agents that one might expect. Their efforts were marked by a series of blunders and miscalculations that, in retrospect, make their eventual capture seem almost inevitable.

For instance, many are unaware that the Watergate break-in was not a singular event but the culmination of a series of bungled attempts. The burglars had successfully broken into the DNC headquarters on a prior occasion, managing to plant wiretaps without detection. However, the wiretaps soon malfunctioned, necessitating a return to the scene-a decision that set the stage for their eventual downfall.

It was during their fourth attempt to break into the DNC offices that the operation finally unraveled. The team, already on edge from the previous mishaps, made critical errors. The most notorious of these was the decision to tape the building’s door latches to prevent them from locking, which was supposed to facilitate a quick escape. However, they failed to realize that the tape was visible from the outside, leading a security guard to notice the tampering and call the police. This seemingly minor mistake was the catalyst for their capture.

Had the burglars been more competent or had they chosen not to attempt the additional break-ins, it’sthe Watergate scandal might never have come to light. The first successful break-in, though flawed, did not raise immediate suspicion, and the Nixon administration could have continued its operations unchecked. However, the combination of Nixon’s paranoia, the ongoing technical issues with the wiretaps, and the amateurish execution of the subsequent break-ins created a perfect storm that ultimately led to the exposure of the operation.

In retrospect, Watergate was not the product of a master plan but rather a series of desperate and poorly executed decisions. Nixon’s need to protect himself from potential scandals, coupled with the ineptitude of those carrying out his orders, transformed what might have been a minor political dirty trick into a scandal that forever changed the American political landscape. The bungled nature of the operation, far from being an anomaly, was a reflection of the disarray and fear that had come to dominate Nixon’s administration.

Understanding these nuances sheds new light on the true nature of Watergate. It was not just about political espionage or ensuring re-election; it was about a president’s desperate attempts to keep his secrets buried, even if it meant crossing the line into criminal activity. And it was this desperation, more than anything else, that led to the unraveling of Nixon’s presidency.

Much like the chance encounter between an assassin and an Archduke that sparked a world war, the connection between Howard Hughes and Richard Nixon was a seemingly small detail that, when unraveled, set off a chain of events that reshaped American history. The Watergate scandal, which began with a break-in at the DNC, ultimately exposed a web of corruption, leading to Nixon’s resignation and forever altering the course of the nation.

Watergate serves as a reminder of how the seemingly unrelated and often mundane events can, in retrospect, shape the course of history. The threads of chance, when pulled together, reveal the intricate and often unpredictable tapestry of the past-a tapestry woven not by grand designs, but by the smallest of moments and the most human of fears.

Originally published at https://danwlauer.substack.com.

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Dan Lauer
Dan Lauer

Written by Dan Lauer

I am a professional writer, which is a formal way of saying I write things others cannot for money.

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