Watergate and Mexico

The ongoing Donald Trump controversies about the Russian election interference and the firing of FBI directory, James Comey, has led many to compare the Watergate controversy to Trump’s latest activities. Trump’s Tweet about “tapes” has raised the specter of another Watergate nexus. México remains a target of Donald Trump. Contrary to Trump and his surrogates, the narrative that México is a menace to the United States and nothing but a backwards country is also false. México has continuously played a part in many of the United States’ important historical events. Not as a willing and malicious interloper, but rather as an unwilling participant that is dragged into the issues because the México and United States relationship is too dependent in each country’s success – thus the failures of one country drags the other into the mix as well.

Because the faulty narrative relies on innuendo and disinformation, it is important to point out that México nor Mexicans have ever been involved in terrorism or threatening the integrity of the United States. Rather, México and Mexicans have been friendly and supportive of the United States throughout its history. It is this friendship that has sometimes dragged México and Mexicans into internal U.S. controversies. México was dragged into the Watergate debacle because U.S. citizens used México as a conduit to fund Nixon’s campaign.

Money is a fundamental requirement for any conspiracy. Circumventing campaign contributions requires operating outside of the financial controls of the U.S. government. Bernard L. Barker was one of the five men who broke into the Democratic National Headquarters on June 17, 1972 that eventually led to the demise of Richard Nixon. The break-in started the Watergate saga. Barker was found in possession of a $25,000 cashier’s check earmarked for Nixon’s re-election campaign. The subsequent investigation found that an additional $89,000 dollars were deposited in Barker’s bank account. The additional money, from four checks, came from Manuel Ogarrio Daguerre [alternate spelling: D’Aguerre], a Mexican attorney. [1]

The Daguerre money was traced to a Texas-based company, Gulf Resources and Chemical Corporation. [2] Gulf Resources and Chemical Corporation was a Houston-based company run by Robert H. Allen. Gulf Resources, which was previously known as Gulf Sulphur Corp, depended almost entirely on its sulfur production in México. It renamed itself to Gulf Resources and Chemical Corporation after it diversified its operations after 1968 into other minerals in addition to sulfur. The diversification took the company from a $10.7 million to a company generating over $100 million, all within a year. [3]

Daguerre, the Mexican attorney, represented Compañia de Azuere de Veracruz, S.A. which was an inactive subsidiary of Gulf Resources and Chemical Corporation. [4] Azuere had become inactive because in 1969 the Mexican government embarked upon a national policy of better controlling its national raw materials. The Mexican government wanted minerals exploited on Mexican territory to be used in México before being exported to other countries. Robert Allen was brought to Gulf Sulphur in the late 1950’s to restructure the company. Gulf Sulphur’s revenues were mostly from Mexican sulfur and the company wanted to diversify its operations. The company’s Mexican sulfur’s operations were discontinued in 1969 because of México’s insistence on keeping its natural resources inside of México. [5]

In Texas, corporate contributions to political campaigns are illegal. Robert Allen needed to funnel corporate campaign funds to the Nixon campaign. Allen and the Nixon campaign were also facing the deadline of April 7, 1972, when a new law was going to force the Nixon campaign to disclose it campaign contributions. To do fund the Nixon campaign with corporate money, Allen used his company’s inactive Mexican subsidiary to take $100,000 from his Texas corporation and launder the money through a Mexican bank, back to Nixon’s campaign coffers. The idea of laundering campaign funds through corporate entities came from G. Gordon Liddy, a former FBI agent working for the Nixon administration. [4]

G. Gordon Liddy is known to most readers as the individual that organized the White House Plumbers. The Plumbers was a special investigation unit established by the Nixon white house to investigate leaks of classified information from the white house to news reporters. Nixon was furious that classified information, such as the Pentagon Papers, was making their way to the news media. This is much like Donald Trump complains today that information about Russian connections to the election interference and the internal workings of his administration are making their way to the press.

On January 30, 1973, Liddy was sentenced to 20 years in jail and ordered to pay $40,000 in fines for his participation in the Watergate scandals. Liddy was released from jail on September 7, 1977 after Jimmy Carter commuted his prison sentence. After prison, Liddy wrote books, lectured and acted in movies. In 1992, Liddy started hosting a right-wing radio talk show host. His show, which ended on July 27, 2012, often disparaged Mexican immigrants and consistently used his show to further push the false narratives about Mexicans and Mexican immigrants.

The Illegal Contributions

The illegal campaign contributions, some of which was used to fund the Watergate break-in, were laundered through Banco Internacional on April 5, 1972. The Mexican lawyer, Daguerre, withdrew $100,000 from Azuere’s bank account and converted $89,000 of it into four cashier’s checks. Daguerre then had the bank drafts couriered to Houston, Texas. The next day, the checks were delivered to the Nixon campaign in Washington D.C.

After the campaign funds were traced back to Robert Allen, he defended himself by arguing that the money was not laundered through México. Rather, Allen stated that his company owed Ogarrio for his legal services in closing out the Mexican subsidiary. Allen said that the Houston company owed the Mexican lawyer $100,000. Allen then said that Ogarrio lent the $100,000 payment back he just received back to him to make a campaign contribution to Nixon. [4] An obvious convoluted narrative of the events demonstrating that most people are gullible enough to believe that a Mexican attorney would take a payment they had just received and lend it back to his U.S. benefactor to use for campaign contributions.

In total, $700,000 in cash and checks were flown on April 5, 1972 from Houston to the Nixon campaign. [3] April 5, 1972 is an important date to note because on April 7, 1972, a new law went into effect requiring public reports of campaign contributions. The Nixon campaign wanted as much of its campaign contributions in its coffers before having to report the source of those funds to the U.S. electorate.

The Mexican Connection

After the arrest of the Watergate thieves, the FBI began tracking the money that they found in their possession. To coverup the funds, the Nixon white house attempted to thwart the FBI investigation by creating the illusion that there was a CIA operation going on in México that was connected to the money. The CIA, refused to be scapegoated and they publicly argued that the FBI investigation would not interfere with any ongoing CIA operations. [6] México was an easy scapegoat because of the various false narratives that are attributed to it that readers easily believe any narrative that casts México or Mexicans in a negative light.

In addition, Richard Nixon needed a way to distract the nation from the controversy of the Vietnam War. It needed to create a more local problem for the U.S. electorate. It came in the form of Mexican marihuana making its way into the country. There were more serious problems with heroin coming from France at this time, but France was not so easily scapegoated to the U.S. electorate so México was blamed for U.S. domestic problems. Heroin, which was coming in from Turkey, via France, was deadlier and a more serious problem to U.S. drug consumers but marihuana became the target. Thus, the War on Drugs was born.

The sources of the funds were from a Houston-based company that used its wholly-owned subsidiary in México to launder the money back to the Nixon campaign. Because the subsidiary used its bank account in México, a Mexican connection was established. This connection became a convenient instrument to use as subterfuge to FBI investigations into Watergate.

Nixon’s distraction, the War on Drugs has led to México becoming one of the deadliest nations in the world. Never mind that at the time the drug war scheme was conceived, it was nothing more than a distraction from domestic issue or that the far deadlier drug was coming from Europe because the truth is that it has resulted in much suffering in the United States as well as in México. All because U.S. politicos use México and Mexicans as convenient distractions for their political shenanigans.

1. Bernstein, Carl and Bob Woodward, “Bug Suspect Got Campaign Funds”; Washington Post, August 1, 1972
2. Waldron, Martin; “Texas Jury Suspends Inquiry On Watergate Break-In Funds”; The New York Times, June 29, 1973
3. “Natural Resources: The $100 Million Run”; Time Magazine, June 7, 1968
4. Madinger, John; “Money Laundering: A Guide for Criminal Investigators, Second Edition”; CRC Press, April 27, 2006
5. Cuff, Daniel F; “Business People; Author of Gulf’s Success Written Out of Part”; The New York Times, June 10, 1982
6. Stern, Laurence; “Mexico Connection Conflicts”; Washington Post, June 3, 1973

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