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Mr. McClory. Mr. Chairman, may I just concur in what you have just said and admonish all members, Republicans and Democrats alike. that the very reputation of this committee is at stake and is threatened by the leaks which have emanated from the committee. I am hopeful that we can have that well in mind, because I think that even more important, perhaps, than the decision we make is the respect of this committee and the reputation of this committee before the American people.

Thank you, Mr. Chairman.
The CHAIRMAN. Mr. Doar.

Mr. Doar. Mr. Chairman, after I sent you that memorandum this morning with respect to the documents, I called Commissioner Alexander just to verify the status of documents which were received under the executive order. He called my attention to section 301.6109 (a) and (b) of the regulations. Those sections provide that any information and that is the information we are presenting this morning—obtained from the IRS by such committee or subcommittee shall be held confidential, provided, however, that any portion thereof relevant or pertinent to the purpose of the investigation may be submitted by the investigating committee to the appropriate House of the Congress.

Therefore, under the regulations, it would be my judgment that the committee would not-should hold these documents-that is, the documents themselves—confidential until they submit their report and that when the record is made public, that the documents be summarized in some fashion if the committee feels that they are pertinent to the presentation.

Now, we would like to distribute these documents for the members of the committee. This report contains in the front of the book a report respecting the deductions taken by the President in connection with his gift of pre-Presidential papers. The deduction was taken in the years 1969 through 1972.

In the back of the book are the 10 exhibits to which you and I have heretofore referred. The material is detachable and the report in the front of the book summarizes the data that we have.

With me this morning are two members of the staff, one of whom you have met before: Bernie Nussbaum of the bar of the State of

ew York, and Smith McKeithen, also of the bar of the State of New York, whom you have not met before.

Also, in connection with the tax matter, with your authority, acting under your authority, we hired two tax consultants to advise with the staff in connection with this matter that is a special field of law. We have one of those consultants with us this morning. He is sitting at my far left. That is Fred G. Folsom, who is a member of the bar of the State of Colorado since 1939. He served in the Tax Division of the Department of Justice from February 1948 through December 1972. He was a section chief of the Criminal Section of the Tax Division for a good many years. He is here to participate in the presentation and answer questions that the committee members may hare with respect to this matter.

Now, there are a couple of matters that I would like to call to the committee members' attention about this presentation before we

begin. The first is that this presentation is somewhat different than the other presentations that we have made to date. First: The presentation is not based on sworn testimony. It is based, however, on careful work by the Joint Committee on Taxation, which is this book that all of you have. I believe that they were sent to your office. If they were not, we have some more books here this morning.

Mr. SEIBERLING. Some are different.
Mr. Doar. It is a different color, but they are the same book.

Also, the staff has conducted interviews, not under oath, but has conducted interviews of a number of witnesses in connection with the gift of the pre-Presidential papers. We can advise the committee members just which witnesses we interviewed and the nature and substance of their statements.

The second thing is that with respect to the action by the President in connection with his income taxes, distinctions have been made between official and unofficial conduct of the President in connection with whether or not conduct, particular conduct, is or is not grounds for impeachment. In this case, of course, the filing of a tax return is unofficial conduct. The President does this as a taxpayer. There is no special responsibility with respect to signing the return or no special authority because he is President of the United States.

The third thing is that every taxpayer who signs a tax return or who earns a particular amount of income, a very modest amount of income, is subject to potential criminal liability if he willfully attempts to defeat or evade a tax; stating it in layman's language, if he cheats on his income tax return or if he signs a return knowing that there are false material statements contained on the return. There are Federal criminal statutes applicable to all taxpayers, all citizens, in that regard.

The other matter is that, and this is for each member to decide, in evaluating the question of grounds for impeachment, one matter that the committee members will have to consider is whether or not a failure by the President to meet his constitutional duty to take care that the laws be faithfully executed is grounds for impeachment. In looking at the conduct of the President with respect to a number of matters, it is for your consideration to make up your mind one way or the other, it seems to me, whether or not the conduct of the President with respect to his filing of his income tax returns might or might not constitute part of a total course of conduct that would or would not warrant a conclusion by individual members of this committee that the President of the United States failed to take care to see to it that the laws of the United States were faithfully executed, contrary to his constitutional duty and to his oath that the President takes when he assumes office.

Now, I mention that because I think in fairness, when you get into income tax matters, we have to discuss some matters that are of considerable public interest, and I urge on all of you the importance of reserving judgment about this particular matter until you have heard all of the presentation and considered whatever materials or matters that the President may wish to present in connection therewith, because we are going to have to, in making this presentation, call your attention to criminal statutes, call your attention to procedures and

tandards that are followed, generally followed by the Department of Tustice in reviewing conduct by the ordinary taxpayer in connection vith the filing of income tax returns.

Mr. McClory. Mr. Chairman, may I just ask this? I do not want to open up a can of worms here.

The CHAIRMAN. Mr. McClory.

Mr. McClory. What you are telling us is something that might have application with respect to other parts of this case? You are just suggesting for our consideration that this subject of the President's responsibility to see that the laws are faithfully executed is something for us to consider in this connection; what you are also telling us, are you not, is that that might be something for consideration with respect to other aspects of this total inquiry?

Mr. Doar. Yes, I am.
Mr. LATTA. Mr. Chairman?
The CHAIRMAX. Mr. Latta.

Mr. LATTA. To my knowledge, this is the first time Mr. Nussbaum has appeared before this committee?

Mr. DOAR. No. Mr. Nussbaum has been here with me in connection with the preparation of subpenas, in connection with other matters. This is not the first time he has been here.

Mr. LATTA. Do we have a biographical sketch or could we have a biographical sketch of Mr. Nussbaum?

Mr. Doar. Certainly, but I would be happy to just outline that for you now.

Mr. Nussbaum is a resident of the State of New York. He lives in one of the suburbs of New York. He graduated from Harvard Law School with honors in 1961. He was on the Harvard Law Review there.

He then joined the U.S. attorney's office for the Southern District of New York, and he worked in the Southern District of New York for 5 or 6 years, both as a trial lawyer and as an, either a deputy or section chief in the Criminal Appeals Section of the Department of Justice, U.S. attorney's office, in the Southern District of New York.

Since then, he has been a partner in a leading firm of 30 or 40 lawyers in the city of New York and has had a distinguished record in connection with the preparation and trial of all sorts of civil cases. His practice has been largely civil since he left the U.S. attorney's office.

He is also a teacher, an instructor at the Columbia Law School.
Mr. McClory. Will the gentleman yield?
Mr. LATTA. I will be happy to yield.

Mr. McCLORY. Was Mr. Nussbaum formerly attorney for one of the members of this committee in connection with some litigation?

Mr. Doar. Yes, at one time. He represented Ms. Holtzman in connection with an election contest in the Borough of Brooklyn.

Mr. McClory. He is not currently representing any member of this committee?

Mr. Doar. Vo; he is not currently representing Ms. Holtzman. Ms. Holtzman for a short time, as I understand it, was an associate of the firm that Mr. Nussbaum was a partner in. He represented her in connection with just the ordinary professional assignments he had. He is a friend of Ms. Holtzman's, but the relationship was professional in this case, and it was finished at the time that I interviewed Mr. Nussbaum for this.

Mr. McCLORY. He won the case ?
Ms. HOLTZMAN. Oh, he did.

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 document.

Mr. LATTA, I might advise the chairman that I am interested and I will advise it thoroughly.

Mr. SARBA NES. 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?
Mr. DOAR. That is correct.
The CHAIRMAN. Ms. Holtzman.

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. Mussbaum was associated with my case.

The CHAIRMAN. Mr. Doar.

Vr. 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 CHAIRMAN. Mr. Nussbaum.
Mr. NUSSBAUM. Thank you, Mr. Chairman.

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 story. 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 Hierbert 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 suggested 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.

Now, after these discussions, Mr. Ritzel prepared deeds or possible deeds, alternate deeds, for the President's consideration, for President Nixon's consideratior., 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. McClory. Do we have copies of that?

Mr. NossBAUM. 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 dars. 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?

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