A Blast from the Past

It was the summer of 1972, and I had been working at Communication Electronics Incorporated (CEI) since the mid-60s. CEI was little known by anyone except the USA Intelligence Agencies, The Department of Defense (DOD), and foreign governments friendly to the USA.  They knew the company as the premier source of spy radios needed in the cold war. The company was located in an upscale business park in Rockville Maryland, a suburb of Washington DC.  The main building that the company was housed in looked like all the other office buildings in the complex. It was a three-story structure with a main entrance on the second floor, at street level, and a guarded employee’s entrance on the lower level, behind the building where the parking lot was located.  Most of the employees going in and out of the building were dressed in office attire of the period. Men were dressed in suits and ties and the ladies wore nice dresses and heels. No one would suspect that a fully integrated spy radio factory was inside. The sale of CEI’s products was closely monitored by the Department of State, and other intelligence agencies, to protect the advanced technology that CEI had that was critical to our national defense.  The concern was that should these specialized radios get into enemy hands they might be able to reverse engineer them and/or learn about our secret surveillance capability.

Many of the USA intelligence agencies were CEI customers, including the CIA.  Long time CIA director Alan Dulles had seen the value of these highly sensitive radios to conduct clandestine electronic surveillance and counterintelligence activities and had appointed James Angleton to head up those operations. James Angleton was a frequent visitor to CEI, and I knew him well.  One of the people who worked for him, as a wireman, was James McCord. McCord was very ambitious and constantly promoted himself beyond his capability. This tactic worked well for him during his almost 19-year career at the agency and he gained an unearned reputation as someone who could accomplish many tasks.  According to most sources, McCord retired early from government service in August of 1970, when he started a technical security consulting service named McCord Associates.  On the 1st of October 1971 McCord was retained by Richard Nixon’s Committee to re-elect the president (CRP).  McCord got the job based upon a recommendation of one of his longtime friends, Albert Wong, who was a secret service agent, and essentially knew nothing about McCord’s technical ability.  On the 1st of January 1972 McCord was promoted to the full-time position of security director of the CRP.  His practice of promoting himself beyond his capability paid off again.

Now we get to May of 1972. The presidential race was in high gear, and both parties were gathering what is called “opposition research.”  In everyday terms opposition research is the task of finding any dirt you can on your opponent so you can use it against him or her.  This is nothing new, only the methods of getting it are consistently new, sometimes bordering on the illegal.  McCord knew from working for James Angleton that CEI was the prime source for highly sensitive radios needed for electronic surveillance in the cold war and that their model RS-111 was the best they had at this time.  So, he simply went into the CEI lobby and told the receptionist he wanted to purchase an RS-111.  The receptionist was shocked.

She had worked at CEI for years and no one had ever come in off the street and asked to buy one of CEI’s products. She also knew the sale of the company’s products was highly regulated. She figured that I could advise her on what to do so she called me and told me what had happened and asked for my advice.  I told her to direct McCord to the sales office, which was housed in another building across the street.  As soon as McCord left the lobby, she called sales and told them what had happened, and that McCord was on the way there. What happened next set-in motion events that would change the trajectory of history.

Upon arriving at the sales office McCord was met by Jack Bussler, who was head of sales, and Tracy Estabrook, a top salesman with CEI. Both Bussler and Estabrook knew that McCord was one of James Angleton’s people, and assumed he was still with the CIA.  When McCord offered to pay in cash, which was highly unusual even in the spy world, they hesitated briefly, but decided that it had something to do with avoiding timing with the government approval process, so they agreed to sell McCord a demonstrator unit for $3,500.00 in cash. The regular price for a new unit was $6,250.00. To get a prospective on the amount of money changing hands, a new Chevrolet Corvette cost about $5,300.00 in 1972.  McCord opened his briefcase, that was full of $100.00 dollar bills, and counted out 35 $100 dollar bills.  Bussler called Quality Control Manager Barry Wright, who pulled a demonstrator RS-111 off the shelf, had it tested, and then signed off on the accompanying packing list and QA report. Then he had it boxed and wheeled it out to McCord’s car.

The money came from the $65.000.00 McCord had received from G. Gordon Liddy, who was head of President Nixon’s Special Investigation Unit. There was a blurred line between the CRP and Nixon’s Special Investigation Unit but in Washington DC there are a lot of blurred lines, and lots of cash changing hands. McCord then billed the CRP $15,000.00 for the RS-111. 

McCord then rented a room in the Howard Johnson Motel that was located right across from the Watergate Complex in Washington DC where the Democratic National Committee (DNC) had their headquarters.  McCord had hired Alfred Baldwin 111 to monitor the bug that he had purchased from Bell&Howell using the RS-111. As soon as Baldwin would sense any voice activity, he would transcribe what he heard in a typed report. It was strange that McCord did not have Baldwin record anything given that he was a so called seasoned electronic expert in wiretapping. 

Another strange thing was that the FBI did not find any bugs in the DNC headquarters even after they swept the rooms after the so called “burglars” were arrested. The only bugs ever associated with the whole incident were those that were entered into evidence in the trial that were recovered among the belongings of the burglars after they were arrested.

Immediately after the burglars were arrested McCord returned to the rented room in the Howard Johnson and had Baldwin pack everything, including the RS-111, into his van and take it to McCord’s home in Rockville, MD. The FBI never searched McCord’s home or his van. The FBI initially said that the RS-111 was purchased from Bell&Howell.

It was only after they found the packing slip and inspection report that was signed by Barry Wright that they discovered their mistake. 

The major news outlets jumped on the story and incorrectly reported that McCord had bought the RS-111 from Bell&Howell and even displayed a picture of the receiver in the article. A little research would have revealed that Bell& Howell doesn’t make anything like the RS-111. They also reported that the “burglars” were apprehended for planting bugs in the DNC office even when no bugs were found there by the FBI.  No one ever reported what the role of the RS-111 was in the whole affair. So much for honest journalism.

When they finally knew that the RS-111 was used in some way in the spying scheme on the DNC and that it was made by a company that they previously knew nothing about they pounced on the story.  Washington Post top reporter Jack Anderson pestered the CEI receptionist hoping to get information to confirm that CEI was in bed with Washington insiders and the primary use of their products was to spy on the political opposition.  Everyone in the intelligence community knew that this was a lie. Anderson even tried to crash an event held at CEI exclusively for their customers. He was rejected entrance but that didn’t stop him from writing an unverified story that CEI was holding lavish parties for their Washington insider friends. Those that were invited were from the intelligence community and there were no political operatives on the guest list. I was there for all of this, and I know what really happened. Many of the key people have passed away except for Barry Wright who remains a good friend of mine as of this writing. 

The sale of this demonstrator RS-111 cost CEI much more than the $3,500.00 they received. The unwanted and totally incorrect publicity was damaging to their otherwise untarnished reputation.  CEI produced over 1000 RS-111 receivers over a period of 13 years that played a major role in the USA keeping ahead during the cold war and that never received any publicity because of the classification of the missions they were used in.

Everyone that lived during this time, and even some that did not, connect Watergate with the downfall of President Richard Nixon, who ended up resigning over the incident.  Few know any of the details and I have heard many versions of the story over the years that did not jive with the truth. Most news outlets reported that the “burglars” were found planting bugs in the DNC headquarters, but the FBI found none. The charge was trespassing and breaking and entering. The CEI RS-111 was reported to be a Bell&Howell product and it was not. The role of the RS-111 in the incident was never reported.  How did McCord’s man, Alfred Baldwin, listen in on conversations without bugs being planted in the DNC office?  Why didn’t anyone question that? What was the use of the Bell & Howell bug that McCord had purchased and where was it located? The press fabricated a story about CEI being a supplier of spy equipment to Washington insiders to spy on their political opponents after they discovered the RS-111 was a CEI product.  All of CEIs products were used by intelligence agencies for international surveillance of their enemies, not for political spying uses. The RS-111 purchased by McCord was assumed to be being bought by the CIA for that kind of activity.

Nixon’s downfall was lying about his involvement in the event.  Watergate is misrepresented to this day. As the late Paul Havey used to say, “and that is the rest of the story.”

Timothy Eyerman is a resident of the lakeside area during the summer months each year and the balance of the year he lives in El Paso TX USA. Has worked in and around the Military Industrial Complex most of his life. He spent 39 years in the Washington DC area in various capacities. He has published 8 books and is working on another.

For more information about Lake Chapala visit: www.chapala.com

Tim Eyermann
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