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With the Pentagon Papers, the Post transcended its status as a decently run business that produced good local journalism and began its transformation into a great paper of national importance.

“Her skill,” wrote reporter Bob Woodward, “was to raise the bar, gently but relentlessly.”23

37

Newshound

Washington, D.C. • 1973

Nearly two years later, the Post was deep into reporting the Watergate story, while in Omaha, the Sun’s reporters were basking in the glow of the Boys Town exposé. Reporting on Watergate, which began in June 1972 when the break-in occurred, had gradually picked up steam as Woodward and Bernstein linked a check made out to one of the burglars to the Nixon re-election campaign. The scandal unfolded over many months as a secret FBI informant, Mark Felt—code-named “Deep Throat” and known to no one but Bob Woodward until thirty-three years later—funneled information to them about CREEP, the Campaign to Re-elect the President, and about various CIA and FBI officials involved in funding and aiding the burglars. But other papers largely ignored the scandal, as did the public. Nixon was re-elected by a huge majority that fall, having vehemently denied any knowledge of or involvement in the break-in. The Nixon White House, which was already actively hostile to the Post because of the Pentagon Papers episode, dismissed Watergate as “a third-rate burglary attempt” and kept up a barrage of threats and harassment against the paper. Attorney General John Mitchell, who had managed Nixon’s election campaign, told Woodward and Bernstein that “Katie Graham’s gonna get her tit caught in a big fat wringer” if the Post continued to report the story. A Wall Street friend with administration contacts advised her “not to be alone.”

In early 1973, a Republican fund-raiser who was a friend of Richard Nixon challenged the renewal of the Post’s two Florida television licenses. The challenge, which was probably politically motivated, threatened half of the company’s earnings, an attack on the heart of the business.1 In response, WPO stock plunged from a high of $38 to as low as $16 a share.

Yet even with a Pulitzer in hand, the Watergate burglars convicted and sent to prison, and a growing body of evidence linking top Nixon administration officials to the break-in, Graham kept second-guessing herself about whether the paper was being set up or misled.2 Most of her time and attention now went to fighting these fires. Her chairman, Fritz Beebe, was ill with cancer and declining rapidly,3 and still in need of an authority figure to rely upon, she increasingly turned toward another of her board members, André Meyer, senior partner of the investment bank Lazard Frères.

Vindictive, ruthless, secretive, snobbish, and sadistic, Meyer “crushed other people’s personalities.” He was known as “the Picasso of Banking” and a man with “an almost erotic attachment to money,” and called the greatest investment banker of the twentieth century, “a genius of the art of acquisitiveness,” according to his colleagues.4 He was also the well-connected man who had warned Graham during Watergate not to be alone. He “had an ability to relate to people at times of distress in a way that created loyalty and exposed him to grand opportunities in the future,” said a former Lazard executive.5 He soon took up Graham socially as well and was seen with her at restaurants, parties, and the theater.

Beebe died on May 1, 1973, and a week later his lawyer, George Gillespie, who was also Graham’s personal lawyer and one of her advisers, began settling his estate. Gillespie got wind that a big investor out in Omaha had been buying Post stock, so from his summer house in Maine, he called Buffett and offered a block of fifty thousand of Beebe’s shares that needed to be sold. Buffett snapped it up.

If he could, at the right price, Buffett would have bought almost any newspaper in sight for Berkshire Hathaway. When the bankers from Affiliated Publications, publisher of the Boston Globe, were struggling to place its deal, Buffett