FBI records: Revisiting Watergate, and Kenneth Dahlberg

By Mike Kaszuba

Nearly a half century ago, Kenneth Dahlberg was briefly in the spotlight as a Minnesota connection to Watergate, the political scandal that led to President Richard Nixon’s resignation following the break-in at the Democrat National Committee headquarters.

FBI documents newly-obtained by Public Record Media (PRM), a non-profit based in Saint Paul, provide details on Dahlberg’s connection to Watergate – but also go beyond that to another traumatic life experience that Dahlberg weathered. Those records show that, after Nixon was elected in 1968, the White House considered appointing the prominent Minnesota businessman and Republican fundraiser to a high-ranking position but were furnished with a FBI background report that detailed Dahlberg’s involvement in a car accident in the 1950s in which four teenagers were killed and Dahlberg was at fault.

The FBI documents included eye-opening statements from local police regarding Dahlberg’s accident. The FBI redacted the names of the police officers.

In one statement an unnamed member of the detective division in Crystal, a Minneapolis suburb where the accident occurred, told the FBI that shortly after the accident he had been contacted by “representatives for Mr. Dahlberg” who “attempted to influence him to drop” the charges against Dahlberg. He told the FBI however that he could not identify them.

Another Crystal police official, who said he was at the accident scene but was never called to testify as a witness, told the FBI the accident’s aftermath was “one of [the] most frustrating events of [his] career” because almost two decades after the accident “he still felt Dahlberg was at fault in causing [the] deaths of four men for which he was never held accountable.”

Crash left “considerable ill feeling”

The police official told the FBI “there was considerable ill feeling in [the] area” because Dahlberg had rear ended a car containing the teenagers. He told the FBI that he and other police officers had “insisted” to a Hennepin County prosecutor that Dahlberg be charged with criminal negligence, but were unsuccessful.

According to the FBI report, a Hennepin County grand jury chose not to indict Dahlberg in the August 1953 accident. Dahlberg instead paid a maximum of $110 in fines for his role in the accident.

Newspaper coverage at the time documented how gruesome the accident was – but gave few details concerning Dahlberg, who was already having early success as a businessman. The three-car crash, which left nine people injured, caused one car to catch fire. One eyewitness told the Minneapolis Morning Tribune that one of the victims was on fire as he was pulled from the wreckage.

In August 1954, nearly a year after the crash, the families of the four dead teenagers were awarded $48,000 in an insurance settlement, according to the Minneapolis Morning Tribune.

Dahlberg, who was 36 at the time of the accident, asked in March 1954 to have his driver’s license reinstated because “business responsibilities require he drive a car in calling on business firms and organizations in the Twin Cities,” the newspaper reported. He founded Miracle Ear, a successful hearing aid company, in 1955.

The FBI records did not disclose which job the Nixon White House was considering Dahlberg for, and only said it was a “presidential appointment” position. But the records said the FBI was told to “expedite” its investigation, should consider it an “urgent” matter and that “no delay will be tolerated.”

White House briefed on accident

The FBI records, which included nearly 50 interviews, many of them with Minnesotans, also did not indicate whether Dahlberg’s role in the car accident led the White House to abandon its consideration of him. But in a report given in January 1970 to Egil Krogh Jr., a deputy assistant to Nixon, the summary again highlighted the accident and noted that “two police officers who were first on scene of accident and who were not called as witnesses stated they feel Dahlberg was under the influence of alcohol at time of accident.”

While many of Dahlberg’s ties to the Watergate scandal had been previously reported, the FBI records shed new light on both the fatal traffic accident and the White House’s consideration of Dahlberg for a presidential appointment to an unnamed post.

For Dahlberg, who died in 2011, it was Watergate that put him in the national spotlight.

Two years after the FBI background report – and two decades after the car accident – Dahlberg found himself unwittingly mired in the unfolding scandal. A $25,000 check endorsed by Dahlberg and given to Nixon’s re-election committee was found in the back account of one of five men arrested for breaking into the Democratic National Committee headquarters at the Watergate complex in Washington, D.C. in June 1972.

The check quickly emerged as a key piece of evidence linking the break-in to the Nixon administration.

Dahlberg, who at the time served as Midwest regional finance chairman for Nixon’s re-election, maintained that he did not know how the check ended up in the account of one of the Watergate burglars. Dahlberg said he had hand-delivered the check in Washington, D.C. to Maurice Stans, another Minnesotan and the chair of Nixon’s re-election committee.

“I wish to emphatically state that I had nothing whatsoever to do with this matter,” Dahlberg stated, according to the FBI report.

According to the Washington Post, Nixon was told soon afterward by an aide that the FBI had traced the money to Dahlberg, who like Nixon was a Republican.

Replied Nixon: “Who the hell is Ken Dahlberg?”

Hounded by critics over his role in a cover-up scheme following the Watergate break-in, Nixon resigned as president in August 1974.

For most of his life, Dahlberg’s public profile was that of a successful, self-made businessman in Minnesota who created the Miracle Ear hearing aid, served as a board member for several large corporations – including National City Bank in Minneapolis – and was a storied World War II fighter pilot ace and a prisoner of war.

In delving deep into Dahlberg’s background for the possible presidential appointment, the FBI report showed that federal investigators examined many facets of his life – including an early divorce, his days as a high school student and even the time he served as a dishwasher at a St. Paul hotel in the 1930s.

McCarthy, MacGregor backed Dahlberg

The FBI also checked with the office of then-U.S. Senator Eugene McCarthy, a Democrat, which issued a statement describing Dahlberg as having “a good professional and personal reputation” in Minnesota. Clark MacGregor, then a Republican Congressman from Minnesota, also told the FBI he had known Dahlberg for more than a decade, had been a house guest at Dahlberg’s home and at the time said Dahlberg was assisting McGregor’s campaign for a U.S. Senate seat. MacGregor would later chair Nixon’s re-election campaign.

The FBI in addition contacted, among other notable institutions, Augustana College in Sioux Falls, S.D., where Dahlberg at the time served on the school’s board of regents. The FBI, according to documents obtained by PRM, was told Dahlberg “exercised good judgment, [had a] keen mind, [and] has extensive successful business experience.”

The report further stated that Dahlberg “travels over world in connection [to] his business”, and was considered a “gracious person, outstanding organizer, and leader of men.”

The FBI report also went into detail on one other point related to Watergate: Dahlberg’s interaction with Dwayne Andreas, another Minnesotan and a high-profile political campaign donor who rose to prominence as the head of Archer Daniels Midland, a giant farm products company.

At the time of Andreas’ death in 2016, according to the New York Times, Archer Daniels Midland controlled much of the world’s wheat, corn, cocoa, soybean and oil seed production. Andreas, who was born in Worthington, MN, bought a soybean plant in Mankato, MN and turned it into the largest soybean processor in the country.

According to the FBI files, the $25,000 check endorsed by Dahlberg that ended up in the bank account of one of the Watergate burglars was actually money given to Dahlberg by Andreas for Nixon’s re-election campaign. In April 1972, Dahlberg met Andreas at the Sea View Hotel in Bal Harbour, FL, where Andreas was the president of a group that owned the hotel.

(The Sea View was no ordinary hotel. According to his obit in the New York Times, Andreas had recruited several notable persons to buy residences at the hotel, including Republican presidential candidate Bob Dole, Thomas “Tip” O’Neill, the onetime Democratic Speaker of the U.S. House of Representatives, Thomas Dewey, the former presidential candidate and governor of New York, Howard Baker, a former Senate Republican leader and NBC and ABC newscaster David Brinkley.

Former Vice President Hubert Humphrey, who at one time was the Democratic mayor of Minneapolis, was the godfather to Andreas’ son).

Dahlberg meanwhile told the FBI, according to a summary of an interview, that Andreas told him he withdrew $25,000 in cash from a safety deposit box at the hotel and gave it to Dahlberg at a nearby country club. Dahlberg added that he took the cash to a bank and converted it into a cashier’s check payable to himself. He then flew to Washington, D.C. and gave the cashier’s check to Stans, the summary added.

In a 2008 biography, “One Step Forward, The Life of Ken Dahlberg”, Dahlberg talked of first meeting Andreas at the Calhoun Beach Club in Minneapolis where Dahlberg had offices and the two men at first squabbled over a parking spot. After the initial friction, “we became instant friends”, Dahlberg said.

As the two men discussed how the $25,000 could be given to Dahlberg, according to the book, Dahlberg said Andreas offered to have him take a short flight to the country club using Andreas’ helicopter. “I’ll send my whirlybird up to get you in the morning,” said Andreas, according to the book.

“When the chopper landed at [the country club], Dwayne was there in his golf cart, and he had a little brown bag [with the money]. I put it in my golf bag and zipped it up,” Dahlberg said in the book.

But when initially questioned by authorities, according to the FBI files, Dahlberg was reluctant to say who gave him the $25,000.

“Dahlberg at first was reluctant to identify the source of the $25,000 cash furnished to him as a contribution to the Republican Party’s Committee to Re-Elect President Richard M. Nixon,” the FBI report stated. “Finally, however, Dahlberg identified the source of the money as Dwayne Andreas of the Minneapolis, Minnesota area.”

The FBI report said that the auditor at the Sea View Hotel meanwhile remembered Andreas asking him for $25,000, but added that “there was nothing unusual in this request because Andreas frequently asked for large sums of money for various reasons.”