September/October 1987 | Volume 38, Issue 6
An old, familiar show is back in Washington. There’s a new cast, of course, but the script is pretty much the same as ever. Here’s the program.
Shades of Thucydides! Was Mondale really aware of the range of judgments he had brought reverberating back down through the ages? As witness to another democracy being shaken by adventurers two thousand years ago, Thucydides wrote his History of the Peloponnesian War with the idea that “in the course of human things,” events would repeat themselves, that “the future … must resemble if not exactly reflect [the past].” Implicit was the hope that if people could recognize and understand the mistakes of the past, they would not repeat them.
But he also wrote that “an exact knowledge of the past [could be] an aid to the interpretation of the future.” So a crucial question arises: Can a knowledge of history actually give you the power to predict? The question struck me in a rather startling way. I had been working, by coincidence, on a book dealing with political scandals in American history. When Iran-contra broke, I was comparing some similarities between Teapot Dome and Watergate. I recalled Secretary of the Interior Albert B. Fall’s physical breakdown in the face of the rising pressures of the Teapot Dome investigations, not to mention President Warren G. Harding’s fatal illness in anticipation of the scandal’s breaking. I also remembered Richard Nixon’s attack of phlebitis under the pressure of facing an impeachment trial. With these thoughts in mind I casually said to my wife, “If the pattern holds, before this thing is over I’d say at least one of the principals is going to become seriously ill.” A few weeks later, to my honest astonishment, William Casey collapsed with a brain tumor. Just days after, Ronald Reagan went into the hospital with a swollen prostate and polyps on his colon. And soon after that Robert C. McFarlane attempted suicide.
Rather disconcerted, I turned to the history of the Crédit Mobilier scandal in the Grant administration. I could then look at the records side-by-side of four major scandals in American history (the fourth still unwinding on the front pages of the newspapers). With the facts spread out on my worktable, I could see not only a provocative pattern but at least a dozen striking similarities, the first being a combination of secret doings saturated with what Mondale recognized as hubris —that wonderful Greek word combining pride and arrogance.
Crédit Mobilier, the first scandal on my charts, got its name from a defunct Pennsylvania firm that was resuscitated expressly to handle the government contracts for the building of the Union Pacific Railroad. In 1872, during the administration of Ulysses S. Grant, not only was Crédit Mobilier revealed to be skimming considerable cream off those contracts (its stock was paying dividends of 60 to 80 percent), but one of its owners—Congressman Oakes Ames of Massachusetts was “selling” shares in the company to a number of prominent government officials who could influence the vote on further funds for the railroad.
Teapot Dome, the second scandal, occurred in the early years of this century, after the U.S. Navy had switched its fuel from coal to oil. First President Taft and then President Wilson set aside two great undeveloped but proven oil fields —Elk Hills in California and Teapot Dome in Wyoming—as emergency reserves. Both were explicitly put under control of the Secretary of the Navy. But in 1922 it was learned that both reserves had been secretly leased to private oil companies for their own exploitation and profit. And it had been done under the authority of the Secretary of the Interior, a man who suddenly and mysteriously had risen from near bankruptcy to considerable wealth.
Watergate, the third major scandal, brought something unique to the game. Although it, too, involved millions of dollars that were secretly gathered and disbursed by high government officials, the purpose was not for private gain but for political power. Watergate got its name from a hoteloffice complex where the Democratic National Committee’s headquarters was broken into in an attempt to rob the files, copy private documents, and plant phone bugs and wiretaps as part of an overall strategy to undermine the opposition and reelect President Nixon.
Now comes the Iran-contra affair, another set of secret acts. These involved an ex-officio group responsible only to the President secretly selling arms to a terrorist country that, in the President’s own words, was guilty of “acts of war against the United States.” It was an attempt to buy the freedom of American hostages and then to divert profits from the sales to supply arms to the Nicaraguan contra army in defiance of a law passed by Congress.
Apart from the secrecy common to all these acts, another one of the immediate similarities (and how those ancient Greeks would have savored this) was the inconspicuous, almost eerily inevitable way all four scandals emerged into the light:
In 1868 a Crédit Mobilier stockholder who wanted to buy more shares and was afraid he was being cheated out of them complained about a block of stock that had been placed in the trust of Oakes Ames. Ames, attempting to show that he was really working for the stockholder’s own interests, explained in a series of indiscreet letters that those shares were being used where they would “produce most good to us” —among prominent members of Congress. Furthermore, on the back of one letter he noted the names of thirteen senators and representatives along with the value of the stock they’d “bought.” The disgruntled stockholder kept the letters, and when he brought suit against the company and the case went to court in 1872, they were presented as evidence.
Teapot Dome came to light even less dramatically. One day in April 1922 Sen. John B. Kendrick of Wyoming received a letter from one of his constituents asking if the local rumors about Teapot Dome’s being leased to a private company were true. Kendrick called the Navy Department, was referred to Interior, and was told there was nothing to it. Four days later Kendrick found the same rumor reported as a fact in a featured story in The Wallstreet Journal . Thereupon Senator Kendrick rose on the floor of the Senate to propose a resolution that the Secretaries of the Navy and the Interior “inform the Senate” about “all proposed operating agreements” having to do with Navy oil reserves. His fellow senators, almost as a matter of routine, voted agreement without comment or a roll call.
About 2:00 A.M. on June 17, 1972, a security guard making his rounds in the Watergate hotel-office building found the latches on two doors taped open. He removed the tape, making sure the door would close and lock. Returning a half-hour later on his rounds, he again found the latches taped open. He called the police, and on the sixth floor of the building they caught five men hiding inside the office of the Democratic National Committee. Two of the men had in their pockets the address and phone number of E. Howard Hunt, a CIA official and a recent consultant to Charles Colson, special counsel to President Nixon.
Iran-gate emerged on November 3,1986, on the eve of a surprisingly tight and hardfought congressional elec tion, as the Reagan administration was enthusiastically hailing the release after nearly eighteen months of David Jacobsen, one of several American hostages held by Iranian-backed Shiite Muslim militants. In view of Ronald Reagan’s public denunciations of Iran as a monster of terrorism, his pressure on allies to join a U.S. embargo on selling arms to Iran, and his repeated insistence on making no concessions to terrorists, the release was regarded jubilantly as the sign of a shift in Iranian policies. On the same day, however, an article in a Lebanese weekly magazine stated that after a secret visit to Teheran a little more than a month before by Robert McFarlane, the former national security adviser to the President, the United States had sent Iran a shipment of spare parts and ammunition for fighter planes and tanks.
In all four cases the public was shocked by the involvement of some of the highest government officials:
In Crédit Mobilier, Oakes Ames’s note named Grant’s outgoing Vice-President, Schuyler Colfax, and Sen. Henry Wilson, Grant’s current running mate, along with eleven other prominent senators and representatives and such rising stars as the Speaker of the House, James Blaine, and Rep. James Garfield. The overriding question was how much President Grant knew or did not know.
Teapot Dome involved two flamboyant oil tycoons of the day—Edward L. Doheny and Harry Sinclair—along with Albert B. Fall, Secretary of the Interior, and Edwin Denby, Secretary of the Navy. Other names soon besmirched with oil were those of Postmaster General Will Hays, Secretary of the Treasury Andrew Mellon, Assistant Secretary of the Navy Theodore Roosevelt, Jr. (son of the former President), and William McAdoo, the son-in-law and Secretary of the Treasury of Woodrow Wilson. The overriding question was how much President Harding knew or did not know.
In Watergate it took a while for all the key figures to surface. But by the time they did, some twenty-four were directly linked to the White House. They included Attorney General John Mitchell; his successor, Richard Kleindienst; Secretary of Commerce Maurice Stans; John W. Dean III, counsel to the President; H. R. Haldeman, White House chief of staff; John D. Ehrlichman, adviser to the President on domestic affairs; Herbert W. Kalmbach, personal attorney to President Nixon; and Robert Mardian, assistant attorney general. The overriding question was how much President Nixon knew or did not know.
Among the first names attached to the Iran-contra affair were those of Robert McFarlane, former national security adviser; his successor, Vice Adm. John Poindexter; Lt. Col. Oliver North, a member of Poindexter’s staff; William Casey, head of the CIA; White House Chief of Staff Donald Regan; and Assistant Secretary of State Elliott Abrams. The overriding question was how much President Reagan knew or did not know.
One thing also common to all four scandals—and most predictable—was the initial strenuous denial of everything by all of the principals involved:
“Libel!” cried one of the congressmen named in Crédit Mobilier. Vice-presidential candidate Henry Wilson issued a full denial. And Oakes Ames, who started it all, said simply that in his opinion “they had a perfect right to buy that stock and share in the profits without having their integrity questioned in the slightest degree.”
In Teapot Dome, when confronted with his secret leasing of the Navy oil reserves, Secretary Fall explained, “I regarded myself as a business agent of the Secretary of the Navy, acting in what I regarded as a military matter under the President of the United States.” As for profiting by the arrangement, “I have never even suggested any compensation and have received none.” This was corroborated by both the oilmen, Sinclair and Doheny, with Doheny sanctimoniously adding, “My lease was made in the interest of the United States Government.” As for Secretary of the Navy Denby, he “didn’t know” and “didn’t remember” anything, which in fact, turned out to be true.
In Watergate one of the first statements came from John Mitchell, by then Nixon’s campaign manager. None of those in the raid, he said, were “operating either on our behalf or with our consent.” The White House press secretary Ronald L. Ziegler issued a statement saying, “Charles Colson has assured me that he has in no way been involved in this matter.” Maurice Stans, the former Secretary of Commerce who had been put in charge of finances for Nixon’s reelection, denied that any money intended for the GOP campaign had helped finance the break-in. And in his first public statement after the event, President Nixon assured reporters that “the White House has no involvement whatever” in Watergate; such a thing “has no place whatever in our electoral process or in our governmental process.”
In Iran-contra no sooner was the Lebanese magazine’s article mentioned in the American press than the State Department denied it. Robert McFarlane called the report “fanciful … largely fictitious.” The White House press spokesman Larry Speakes assured reporters that the United States had made no concessions to gain Mr. Jacobsen’s release. And eleven days later in a televi sion address to the nation, President Reagan decried the “wildly speculative and false stories about arms for hostages and alleged ransom payments. We did not—repeat—did not trade weapons or anything else for hostages—nor will we.”
Now comes the intriguing part. Given the nature of the people involved and what they had done before, can one say that each of these scandals was predictable?
Ulysses S. Grant had been President of the United States for only six months when Jim Fisk and Jay Gould attempted to corner the gold market and throw the country into financial panic. It was later discovered that the key man in making the operation work was a lobbyist named Abel Rathbone Corbin, who was also the brother-in-law of Ulysses S. Grant. But nobody was punished. And so, under the most honored, admired, and popular man in America, the Grant administration began to make its mark as one of the most corrupt regimes in American history.
A stubborn man of fierce loyalties, Grant found it impossible to believe friends and family would betray his trust. So he shrugged off rumors that another brother-in-law was selling political favors on the side. When still another relative, whom he had appointed customs collector in New Orleans, was found guilty of misconduct and malfeasance, Grant ignored the charges and reappointed him. Grant had appointed an Army friend, Gen. W. W. Belknap, to be Secretary of War. Belknap quickly discovered there was money to be made in selling the franchises for military trading posts in Indian Territory. Very soon he’d sold several, including one for forty thousand dollars to the man who already owned it. When Congress cried extortion, Grant could protect Belknap from impeachment only by accepting his immediate resignation.
Also shaping up was an elaborate fraud involving the printing, selling, and approving of forged federal revenue stamps on bottled whiskey. This was a sideline of Gen. Orville Babcock, the private secretary of President Grant. His enterprise coined three million dollars a year.
In sum, when on September 4, 1872, the New York Sun broke the story of Crédit Mobilier, it may have been shocking, but it came as no surprise.
The pattern of corruption repeated itself—and perhaps was predictable—after Warren G. Harding and the “Ohio gang” took office in the election of 1920. Again the country was swept with the easy money and easy morality of a postwar era. Again the country had elected a naive President who wanted to help his friends and couldn’t believe anyone would take unfair advantage of him.
In the President’s hideaway, a “Little House on H Street,” Harding’s attorney general, Harry Daugherty, and Daugherty’s sidekick Jess Smith, an Ohio dry goods merchant, kept a poker table and a supply of bootleg liquor ready at any moment to ease executive cares. They also ran a clearinghouse for patronage, through which many hundreds of lobbyists, fixers, and other favor seekers (including drug manufacturers who needed licenses to distill alcohol) came trooping.
On a trip to Hawaii, President Harding met Col. Charles R. Forbes, who turned out to be such great company that Harding eventually made him head of the Veterans Bureau. (It was later discovered that Forbes had been an Army deserter.) Busily building hospitals and supplying medical care for World War I veterans, Forbes in less than two years allowed more than two hundred million dollars to go astray. Twelve days after a congressional investigation was authorized, Forbes’s counsel in the Veterans Bureau, Charles Cramer, walked into his bathroom and fired a bullet into his brain. Forbes himself resigned, and later went to jail. Two months later Jess Smith, who had recently shown his girl friend his money belt stuffed with seventy-five thousand dollars in cash, did the same thing.
So Harding was badly shaken when a friend confided that Secretary of the Interior Albert Fall, his old cohort from Senate days, had accepted some hefty “gifts” in return for secret leases to the Navy’s oil reserves. “If Albert Fall isn’t an honest man,” said Harding, “I’m not fit to be President.”
The corruptions of the Nixon administration had to do with covert “tricks” and spying. Two months after his inauguration in 1969, Nixon (who promised an undisclosed plan to end the Vietnam War) started fourteen months of secretly bombing Cambodia. When The New York Times announced the fact, Nixon, in a fury to find the leak, started wiretapping the homes and offices of State Department officials, members of the National Security Council, newspaper and television commentators and correspondents, even his own assistants in the White House.
In 1971 The New York Times began publishing the secret “Pentagon Papers,” which described how our embroilment in Vietnam had come about. The papers had been stolen by a Pentagon bureaucrat, Daniel Ellsberg. Two months after the Supreme Court forbade Nixon’s attempt to stop publication, the office of Ellsberg’s psychiatrist was broken into and ransacked in an attempt to find Ellsberg’s file.
As the 1972 election approached, a bizarre series of incidents began to break before the public: Dita Beard, a lobbyist who had recommended that ITT give four hundred thousand dollars to the GOP campaign committee to defray the costs of the ’72 GOP convention—in return for the government’s dropping an antitrust suit, which it did—suddenly “became ill” on a plane. She was later found in a hospital, where she accused E. Howard Hunt of trying to silence her.
Television commentator Daniel Schorr, after delivering an unfavorable news analysis of the administration, learned that twenty-five of his acquaintances were questioned the next day by the FBI.
Edmund Muskie, the front-runner for the Democratic nomination and the leader in polls against Nixon, suddenly dropped out of the race, beset by a welter of harassing incidents, disrupted meetings, sabotaged schedules, fraudulent letters, suspected bugs and wiretaps. When, on June 17, burglars were discovered in the Democratic National Committee headquarters, the pattern was familiar.
In the wake of all this Ronald Reagan appeared as a breath of fresh air. “Let us begin an era of national renewal” was the theme of his first inaugural address. To cap the celebration (and to deliver the final humiliation to outgoing Jimmy Carter), Islamic militants released fifty-two American hostages. After 444 days of captivity and excruciating national frustration, this was the happiest sign there could be that a new day was dawning.
The Reagan administration was determined that the hostage situation wouldn’t happen again. Henceforth America would “stand tall.” And appearances became an important priority. After cutting taxes, raising military expenditures, and, in the process, creating the biggest deficit in American history, Reagan blamed the deficit on Congress and social programs, then called for a constitutional amendment requiring a balanced budget. As those in public relations say, it seemed to play.
When Congress balked at Reagan’s repeated insistence on military aid to support a Nicaraguan contra army staffed in part by followers of the overthrown dictator Anastasio Somoza, Reagan called them “freedom fighters” and the “moral equivalent of our founding fathers.” And that, too, seemed to play. The people gave Reagan the highest approval rating of any President since polling had begun.
But then, in five devastating weeks in 1986, something changed. In a startling revelation of the administration’s struggle with “image,” the White House chief of staff, Donald Regan, confided to an interviewer, “Some of us are like a shovel brigade that follows a parade down Main Street cleaning up.”
In all these scandals there is a chronological similarity. In each an initial cloud faded, then gathered with renewed fury and mushroomed as it revealed its more disturbing dimensions. In each, too, a lightning flash of evidence suddenly broke open each case. In Crédit Mobilier, Oakes Ames revealed that he kept a little memorandum book of all stock transactions. In Teapot Dome the discovery of a friend’s uncashed check for a hundred thousand dollars to Secretary Fall demanded an answer to where his newfound wealth came from. In Watergate the bombshell was that Nixon secretly taped conversations in his own office. In the Iran-contra affair, at this writing, the evidence is still being uncovered.
As for that incidence of sudden illnesses among principals in the face of pressure, to those mentioned earlier you can add Rep. Oakes Ames. Two months after the conclusion of the investigation into his activities, in May 1873, he died of apoplexy.
Also similar were the inequalities and inconsistencies of the justice meted out in the end:
In Crédit Mobilier, after months of investigation, the Poland Committee found that some of the senators and representatives implicated—among them Speaker of the House James Blaine—never took the stock at all. Others—like VicePrésident Schuyler Colfax—paid for the stock but claimed they had never received a dividend. Some—like James Garfield—agreed to buy the stock and collected dividends but never paid for it, and still others bought the stock, collected the dividends, but never received the stock certificate. In any case the committee did “not find … they were aware of the object of Mr. Ames, or that they had any other purpose in taking the stock than to make a profitable investment.” The condemnation of the committee fell instead on Representative Ames for selling the stock and upon Rep. James Brooks of New York, who, while he understood the purpose of the sale, wanted to buy the stock anyway. The committee recommended expulsion of these two from Congress. However, after much debate (during which Ames pleaded that no man could be accused of bribery without someone being found guilty of being bribed), the House refused to expel either mem ber and voted instead to “absolutely condemn” them both.
In Teapot Dome, Edwin Denby, who transferred the leases from the Navy Department to Secretary Fall and apparently did not understand what it was all about, was never charged with anything. Neither was Theodore Roosevelt, Jr., who helped Denby transfer the leases and whose brother, Archibald, was a vice-president of Sinclair Oil. Nor was Postmaster General Will Hays, who as the head of GOP fund raising in 1920 had accepted tainted contributions from Harry Sinclair. Also untouched was Andrew Mellon, who recognized the tainted contributions when Hays tried to pass some off on him but did nothing about it.
One who did suffer was William McAdoo, who was tarred because he furnished legal advice to Doheny. McAdoo was found completely innocent of the scandal, but just being touched by it ruined his chance of being the Democratic candidate for President in 1924.
For the rest, Doheny and Sinclair were charged with conspiracy and bribery and were acquitted (although Sinclair, found guilty of contempt of Congress and later of trying to bribe a juror, was sent to jail for six months and fined one thousand dollars). Both oilmen had to return their canceled leases to the Navy reserves and pay the government whatever they had made. And Albert Fall was found guilty of accepting a bribe (which, according to court decisions on Doheny and Sinclair, nobody ever gave him). Fall was fined one hundred thousand dollars and sentenced to a year in prison (the judge was lenient because of Fall’s poor health). He was the first cabinet member in U.S. history to be sent to jail. He would not be the last.
In Crédit Mobilier and Teapot Dome both Presidents—Grant and Harding—eventually recognized the corruption around them. But while they took no active part in it, they didn’t do much to stop it either. In Watergate, however, Richard Nixon not only inspired it but, particularly in the “cover-up” phase, took an active part in encouraging and guiding it.
By the time the Watergate investigations and trials were over, the tally was devastating. The burglars, assorted spies, and their paymasters were found guilty and sentenced to jail (although some were pardoned and some were soon paroled). E. Howard Hunt was fined ten thousand dollars and sentenced to thirty months to eight years. Almost a dozen minions to the President in the White House and on the Committee to Re-elect the President threw themselves on the mercy of the court, but many like John Dean, Charles Colson, Jeb Magruder, and Herbert Kalmbach were given prison terms ranging from four months to four years. Haldeman and Ehrlichman each were sentenced to two-and-a-half to eight years. So was Nixon’s former law partner and attorney general, John Mitchell. Secretary of Commerce Maurice Stans, who collected the money that made it all go, was fined five thousand dollars. Meanwhile, Richard Nixon, warned of certain impeachment, became the first President of the United States to resign from office. A month later Gerald Ford, his personally chosen successor, granted Nixon a “full, free, and absolute pardon … for all offenses.”
The accounting on the Iran-contra scandal is yet to come, but like its predecessors, it drags on. Crédit Mobilier, which first came to light on September 4,1872, concluded its investigations on February 19,1873. It then went into a debate on expulsion. Altogether the scandal was in the news for about six months. Teapot Dome investigations and trials went on for seven years. Watergate took nearly two years and was followed by individual trials. By these standards the Irancontra affair is still relatively young.
One final thread that seems to run through the background of these scandals is that each came after an electoral victory of overwhelming proportions: Grant over Greeley; Harding over Cox; Nixon over McGovern; Reagan over Mondale. Every victory seemed to encourage a propensity to overreach. The curse of a victorious President comes down, after all, to the illusion that he is irresistible. And this leads to the greatest folly of all: hubris.