G. Bradford Cook

In 1972, SEC Chairman William Casey met with Cook and assigned him an enforcement case then pending against Robert Vesco. In doing so, Casey took the case away from the SEC's Enforcement Division, a move Cook claims he did not question.[14] A mutual fund company, Investors Overseas Service (IOS), which was registered in Panama, was attempting to come into the United States, a complicated process that involved changing the company's articles of incorporation, bylaws, operating procedures, finances, and governance to conform with American securities law.[15] Vesco was battling Bernard Cornfeld, chief executive officer of IOS, for control of the company, and the SEC was investigating Vesco for having covered up the transfer of $224 million in corporate funds to a personal account.[16]

Vesco made a $200,000 cash donation to the 1972 Nixon presidential campaign with the expectation that he would receive favorable treatment from the SEC.[17] Another $50,000 in cash was given in violation of federal elections laws.[16] Harry L. Sears, a prominent Republican fund-raiser in New Jersey and Vesco associate, delivered the cash donations to Maurice Stans, Nixon's former Secretary of Commerce and head of finance for Nixon's presidential re-election campaign. Stans arranged for Sears to meet with United States Attorney General John N. Mitchell, and Mitchell set up a meeting with Sears, Casey, and Cook in May 1972.[18]

Cook became aware of the Vesco cash donations and the intent with which they were made.[17] Cook alleges that he told Casey about the donations, although he cannot confirm that Casey did anything with the information.[15] Casey later denied knowing how the embezzled $250,000 had been used.[19]

Shortly after his conversation with Casey, Cook went on a hunting trip in Texas with Stans. On November 13, 1972, while he and Stans crouched in a rice field, Cook mentioned that he wished to be SEC chairman and that he was prosecuting a number of cases, including the Vesco lawsuit. Cook mentioned that the SEC had testimony that Vesco had given Stans $250,000 in cash donations. Two days later, back in Washington, Stans called Cook and asked that the information about the $250,000 be deleted from the legal filings in the case. Cook agreed to do so, and told SEC Associate Director of Enforcement Stanley Sporkin to remove the information. On November 17, Cook called Stans to confirm that the change had occurred.[16] Cook said in 1973 in congressional testimony that the deleted information was made with Chairman Casey's concurrence.[20] Casey agreed that he told Cook to "work it out" with Sporkin, but denied knowing that Cook had spoken with Stans.[19]

On March 7, 1973,[21] Stans invited Cook to the White House for lunch. Stans informed Cook that the Nixon campaign was going to return the money to Vesco, and asked that discussion of the donation be edited out of testimony the SEC would file with the court. After speaking with Sporkin, Cook advised Stans that the testimony had to be submitted in full and he could not do as Stans had asked.[16]

Federal prosecutors began investigating possible illegal fund-raising by the Nixon re-election campaign in 1973 as part of the Watergate scandal. Cook was called before a grand jury to testify about the Vesco donations on April 19, 1973, and again on May 3 and May 7, 1973. He also testified before a Senate committee on May 1 and May 14, and before a House committee on May 22. During this testimony, Cook swore under oath that he had never discussed the Vesco case with Stans until after the case was filed on November 27, 1972.[22]

On Thursday, May 10, a grand jury indicted Vesco, Sears, Mitchell, and Stans with conspiracy to defraud the United States and conspiracy to obstruct justice, and Mitchell and Stans with perjury. The following day, Cook said he had done nothing wrong and would not resign.[20]

But on Wednesday, May 16, Cook resigned effective immediately as chairman of the Securities and Exchange Commission. He had served as chairman for just 74 days.[20] The Washington Star reported that Cook believed he was going to be impeached, and offered to resign. The White House allowed him to do so.[23]

The trial of Mitchell and Stans on the grand jury charges began on February 19, 1974.[24]

In his initial testimony, Cook testified that Stans said he (Stans) had lied to the grand jury investigating the Vesco donation. Cook admitted that he lied to the grand jury on April 19 and to the Senate committee on May 1. Cook also said that Stans called him on the morning of May 7, 1973, to discuss Cook's upcoming grand jury testimony. Cook informed Stans that he was changing his testimony to the grand jury and would tell the truth. When called before the Senate again on May 14, Cook said he changed his testimony again and told the truth.[21]

On cross-examination, Cook admitted to lying a total of five times under oath to the grand jury and Congress, concealing his discussions with Stans. He also revealed that he, not Stans, brought up the Vesco case and called its inclusion in the civil case "overkill", "sensationalism", and "not professional". Cook also admitted on the stand that by discussing the Vesco case, he had violated the law.[22] Stans and Mitchell were acquitted on April 28, 1974.[25]

The fallout from Cook's witness stand admissions was significant. The Senate Appropriations Committee asked the United States Department of Justice on May 1 to file charges of contempt of Congress against Cook for lying.[26] On September 27, 1974, the Nebraska State Bar Association filed a six-count disciplinary complaint with the State Supreme Court against Cook.[27] Although Cook's attorney argued that he should be censured, the State Supreme Court disbarred Cook for three years from the practice of law in Nebraska.[28]

The United States Supreme Court permanently barred Cook from practicing law before it on May 31, 1977,[29] and the Illinois Bar Association followed suit with a three-year disbarment on June 1.[30]