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“You have a nice, light-fingered touch, Mr. Connally” going to put into political activities, very frankly. And, uh, uli , I think the purpose I think they’ve got, uh, a legitimate cause. I wouldn’t, I wouldn’t recommend that you do, you to, do that if it didn’t have any merit to it .. . Connally: They just raised to pay $20,000 for a meeting in Brownsville, not too long ago. And this means they’ve got security. And, uh, they’re doing some things that I think are a little strong-armed tactics, perhaps, in uh, the organizing, uh. But, uh, I don’t criticize that unless we are prepared to take on business and labor and all at the same time. There’s no point in denying the farmer what’s the practice for the laborer. And, uh, so I’m not, I wouldn’t judge it on a moral basis. I judge it on the basis, of, uh Hardin: You heard all the rest of it Connally: I’m addressing myself to the narrow aspects, to the political aspects of it. I don’t think there’s a better organization in the United States. If you can get it, uh, if you can get more help for `em, that, uh, will be, uh, be more loyal to you. And, uh, and I think they’ve got a worthy case to begin with. And, uh, that being true, I just think you ought to stretch the point. I wouldn’t wait till next year, so that I know that there’s been some advice given to you, to wait till next year. Uh, that’s I will differ with that simply because they’re going to make their association and their alliances this year in various congressional and senatorial races all over the United States. And you don’t want to be in a position as you well know better than I you got no questions when people think [unintelligible] you’re doing something for them. And they’re not lined up in position. If, if you do something for them this year, they think you’ve done it because they got a good case and because you’re their friend. If you wait till next year, I don’t care what you do for them, they’re going to say, “Well, we put enough pressure on them this election year and they had to do it.” And you, you get no credit for it. So it’s still going to cost you an enormous amount of money next year, and you get no political advantage out of it. And, I just think that, uh, that unless you just, uh the economics of it are just beyond question that, uh, if you ought to really seriously think about doing it this year. They discussed the possibility of Congress’ going ahead and increasing the parity without Nixon’s support. Hardin: Well, if it does pass, I don’t think the President has any choice but to sign it. President: Well, all right. Connally: Well, then, what do you do? If you do, you’ve cost yourself the money you’ve lost our political advantage. You, you’re, you’re infinitely worse off. President: Probably. Connally: That’s where you are. Hardin: I think so. 10 The Texas Observer President: What’s the cost? Hardin: Oh, it’s just a wild guess. They said $35 million and I would suggest that it’s, uh, nearer a hundred. Nixon finally agreed to boost the milk parity to 85 percent. President: Fair enough. Unidentified: All right. Ehrlichman: Better go get a glass of milk. [Laughter] Ehrlichman: Drink it while it’s cheap. Unidentified: That’s really Unidentified: [Unintelligible] might work. President: [Unintelligible] Yeah, I told the, I said, milk is a sedative. Milk is a sedative .. . THE WATERGATE grand jury charged that Connally received $10,000 for recommending an increase in milk price supports, conspired to concoct a false story to thwart investigators probing the alleged bribe and then lied to a grand jury which was investigating the alleged gift. According to the indictment, Jacobsen gave Connally $5,000 in cash “on or about May, 14, 1971 … for and because of official acts performed by him, to wit, his recommendations in his official capacity concerning an increase in the federal milk price support level to be fixed by the secretary of agriculture, announced on March 25, 1971.” A second $5,000 payment allegedly was made “on or about Sept. 24, 1971.” The false cover story, according to the grand jury, included a plan for Jacobsen and Connally to tell investigators that Jacobsen had offered $10,000 on two occasions in 1971 but that Connally had declined both offers. The story was that the money first was offered Connally to give to political candidates of his choice and later as a contribution to Connally’s Democrats for Nixon organization. The grand jury investigators asked Connally under oath: Q: Did you express any surprise or did you think it odd when he offered to make available to you this $10,000 cash political contributions in the spring or summer of 1971? Connally: No, not odd, because the posture in which he put it Jake and I have been good friends for a number of years, and he obviously would not do anything he didn’t offer it to me; he said, “the money is available for a committee or candidate of your designation, if you will make one.” And I said, “Well, I don’t want to do that.” And I have already explained that to you, but it wasn’t odd at all, simply because he was so familiar with the fact, as I was, that I was here and he was trying in some way to befriend the people that I felt should be befriended. And I just simply said, “I don’t want to participate.” Q: When did you last discuss this matter with Mr. Jacobsen? Connally: Oh, gosh, a long time ago. I don’t recall. \(The italicized portion is one of the instances of perjury alleged by the grand jury. It charged that Connally lied a number of times during questioning, mainly concerning whether or not he discussed the cash offers with Jacobsen at particular times and when he stated he first was told by Jacobsen of Jacobsen’s subpoena to appear before the Watergate ACCORDING to the grand jury, the two agreed that Jacobsen was to testify that he kept the money in a safe deposit box from the time he received it from AMPI until he turned it over to investigators to examine. But the story, leaked to Jack Anderson and other Washington reporters this spring, is that Connally originally accepted the money. His salary as secretary of the treasury was not adequate to keep his lifestyle afloat and he had made comments about his financial difficulties all over Washington. Then, the story goes, shortly before Jacobsen was to testify for the first time before the grand jury, Connally decided it would be wise to return the money. \(The grand jury says Connally gave Jacobsen $10,000 in cash in Houston “on or about was in $100 bills. “Later,” according to Jack Anderson, “he allegedly became worried that the bills could be traced and bought a second batch of smaller bills, which he exchanged for the first $10,000. \(The grand jury charges that Connally gave Jacobsen a second $10,000 Press reports have alleged that the second transaction took place at the Austin home of George Christian, who served as gubernatorial press secretary to Connally and later as presidential press secretary to Lyndon Johnson. “Ironically,” Anderson wrote, “the former treasury head forgot that federal reserve banks don’t necessarily issue currency during the year it is dated. FBI agents have established that some of the bills in the bank box were not issued until after Jacobsen claimed the money had