Reinecke's indictment was an offshoot of the investigation into the
Watergate scandal. In 1972, he testified before the Senate during a confirmation hearing of
Richard Kleindienst, the nominee for Attorney General. He was asked about an offer by
Sheraton Hotels, a division of
ITT Inc., which was the subject of a Federal antitrust investigation, to underwrite the
1972 Republican National Convention. Specifically, the committee wanted to know if he discussed the offer with then Attorney General
John N. Mitchell (R) during the
Watergate scandal, before or after ITT settled its case with the government. Reinecke told Senator
Hiram Fong that the conversation took place after the settlement despite his earlier comment to a reporter that the conversation had taken place several months earlier. Reinecke stayed in the race for governor, but was defeated by Flournoy, who went on to lose to
Jerry Brown (D) in the general election. He was convicted of perjury in July 1974, but refused to resign until the state law required him to do so. California law barred anyone convicted of perjury from holding office in the state; but the state attorney general ruled that this provision would not take effect until sentencing. On October 2, 1974, he was sentenced to an 18-month suspended term and resigned from office the same day. On December 8, 1975, an appeals court overturned the ruling because "the
Senate Judiciary Committee before which he was accused of perjuring himself had failed to publish its rule permitting a one-man quorum." ==Later life==