PREDICTING PRESIDENTIAL SCANDALS:
Looking At Bush's New Vulnerability

President Bush recently lectured businessmen on corporate responsibility. One wag said it was like President Clinton lecturing on chastity, except Clinton would not be foolish enough to do so. Bush, or his advisers, should have known better. Capital market investors found neither credibility nor solace in Bush's Wall Street jawboning.

The stock market continues its bumpy but steady bleeding of the retirement funds of countless millions of Americans. The accounting scandals at Enron, Tyco, Global Crossing, WorldCom and Adelphia have led to a lack of faith in the accounting practices for all businesses, which in turn has caused the downswing in the stock market.

The investing public is too sophisticated for President Bush's "do as I say - not as I once did myself" sermon, which was about as effective as his boastful pledge of getting Osama bin Laden "dead or alive." If the stock market is a leading indicator of public confidence in the president, Bush is in much worse shape than his post-September 11th pumped approval ratings indicate (although they, too, are falling fast).

The President seems to have forgotten that it is not merely Americans who control our stock market. Foreign investors are a huge factor as well, and foreign money is going elsewhere. Bush's lack of credibility is even greater abroad.

It strikes me that that this collapsing market has made the both President Bush and Vice President Cheney vulnerable to serious scandal.

What Makes A Scandal? Twentieth-Century Political Scandals Provide Guidance

Scandals don't happen in vacuums. Rather, they need a proper atmosphere. Think of a tree falling in the forest. If no one is around to hear it, it goes unnoticed. If the tree was felled by the rules, then those who learn of it do not object. So it is with scandals: actions and activities must be noticed for a scandal to occur, and there must be an atmosphere intolerant of the action or activity for a scandal to occur.

By definition (according to The American Heritage Dictionary) a scandal is "an act or circumstance that brings about disgrace or offends the morality of the social community." Thus, there must be a community of disapproval for an action to be scandalous.

Presidential scandals often happen when the public is suddenly not as tolerant as it once was of a president's behavior - his conduct, or even a mindset that existed before he assumed office and was fully known to voters at that time. To appreciate this historical paradigm, one need look only at the most significant presidential scandals during the 20th century: Teapot Dome, Watergate, Iran-Contra, and L'affaire Lewinsky. These scandals all occurred when pre-existing behavior patterns of the presidents encountered changed circumstances that also changed public tolerance for the patterns.

Teapot Dome is the name of a naval oil reserve in Wyoming (so named because of a rock shaped like a teapot sitting atop a geological oil dome below the surface). This property was leased by Secretary of Interior Albert Fall in 1922 to a friend, oil tycoon Harry Sinclair. Fall made similar leasing arrangements for the oil reserves in California with another friend and oil baron, Edward Doheny. Fall's receipt of some $400,000 from these friends (half of which went to the Republican party) was found to be a bribe, although Fall claimed it was a gift and neither Doheny nor Sinclair was convicted of bribery.

Like Watergate fifty years later, however, Teapot Dome came to embrace other graft discovered in the Harding administration. Namely, it came to encompass kickbacks on hospital construction and sale of government surplus by the head of the Department of Veterans Affairs, Charles Forbes, and kickbacks on the disposition of alien property acquired by the government during World War I. That property had been handled by former Congressman Thomas Miller under the supervision of Attorney General Harry Daugherty (who was indicted but not convicted).

While President Harding was not personally involved in any corrupt activities, Teapot Dome ruined his reputation and that of his administration. It appears the scandal happened because Harding was too trusting of long-time political cronies, placing little men in big jobs. This was the way he had operated throughout his public career - a behavior pattern that had not previously brought him down, but within his Administration, became disastrous.

Teapot Dome became a scandal in 1923. While the Democrats did not control the U.S. Congress, their success in the 1922 mid-term elections had emboldened them. Then, unexpectedly, Harding died. Within months of his death, the corruption surfaced. No one knows what might have happened had Harding lived, and many believe the highly popular president would have dismissed the culprits, and promptly prosecuted them, thus saving his own reputation and legacy.

We do know what, in fact, occurred after his death. He was tarnished and tagged with the scandals, for the circumstances had changed. His trusting management style, and his genial manner, were no longer admired. Rather, Harding was implicated in Teapot Dome by the very fact that he was President, and largely as a result of the scandal, he was soon labeled the worst American president.

Watergate (1972-74): A Break-In Leads to A Historic Resignation

Watergate started as a bungled break-in undertaken by Richard Nixon's re-election committee. But within a short time, it came to symbolize abuses of power that included wiretapping newsmen and White House staff looking for leaks, ordering the break-in of a Washington think-tank to obtain government papers, breaking into a psychiatrist's office to get his records about a man who leaked classified government information to the media, using the facilities of government to screw the President's political enemies, and using presidential powers to run a massive cover-up to hide it all.

Richard Nixon's Watergate scandal was, in essence, about abuses of government power. Those who knew Nixon before he became president were not surprised that this activity was his downfall. He had a history of misusing government power to fight his political opponents and enemies.

Nixon gained prominence as a young California congressman by misusing the investigative powers of Congress as a member of the infamously abusive House Un-American Activities Committee. And he was equally well known for his use of dirty tactics in political campaigning - from his first campaign to his last.

Watergate was the result of Nixon's belief, based on his own prior conduct and experience as Vice President, that he was above the law as President. In fact, he was not fighting World War III, nor was he dealing with a situation akin to the current terrorist threat. Watergate was not a cover-up of the bungled burglary of a political opponent; rather, it was a cover-up of government-sponsored illegal activities, which Nixon considered "national security" matters.

But times had changed, and others did not allow Nixon's conduct to be justified by the mere invocation of national security. Thus, rather than a third-rate burglary sliding into oblivion, it became the key to discovering Nixon's intolerable conduct.

Again, as with Teapot Dome, the changed atmosphere combined with a president's pre-existing disposition created the scandal. This pattern repeated itself again during the Reagan presidency.

Iran-Contra (1986-92): A Cold Warrior Run Amok

Not unlike Nixon, Ronald Reagan saw himself as a cold warrior. Reagan spent a lifetime chasing communists. As the head of the Screen Actors Guild, he secretly informed on suspected communists in the film industry. As host of a television series he frequently addressed the communist menace. As Governor of California, he was sure communists were behind the anti-war movement.

In 1981, when he became President, Reagan had no communists to fight in the United States, so he became the champion of the anti-communist Nicaraguan contra rebels in Central America. The contras were conducting a guerrilla war against the Sandinista government of Nicaragua, a Marxist-infiltrated regime. Notwithstanding the vigorous efforts of the Reagan administration, Congress decided in 1982 to temporarily ban financial aid to the contra rebels.

President Reagan simply ignored this law. Using his National Security Council (NSC), which was not expressly covered by the law, NSC staffer Oliver North covertly passed military aid to the contras. The funds for the contras came from another North covert operation: secretly selling arms to Iran, despite a U.S. trade and arms embargo. (Thus the moniker "Iran-contra"). Reagan hoped the arms deal would free American hostages held by a pro-Iran group in Lebanon.

The scandal broke in 1986 when Lebanese newspapers disclose the arms deals. Reagan went on television and vehemently denied the story. A week later, he was forced to retract his false statement, but he still insisted that the sale of weapons had not been an arms-for-hostages deal. Years later, Reagan acknowledged that the evidence did show it was an arms-for-hostages deal, but Reagan said that in his heart, he did not want to believe that was the deal.

Reagan was forced to appoint a commission, headed by former Texas Senator John Tower, to investigate the matter; it whitewashed it. Next, Congress investigated, and found out at least part of the story. (Oliver North, and others, had destroyed documents, making it impossible to fully reconstruct events.)

Many historians believe that Reagan's actions in Iran-Contra were the result of the growth of the presidency during the cold war, and of Reagan's own cold warrior mentality. Reagan, like his Vice President G.H.W. Bush, claimed that he was unaware of the illegal action of his subordinates - although the subordinates said this was not true, he, like his Vice President, got away with it.

Reagan was only slightly tarnished by the scandal. Yet Iran-Contra, like Teapot Dome and Watergate, became a scandal because Reagan's earlier acceptable conduct (aggressive anti-communism) encountered changed circumstances (a temporary Congressional prohibition of aid to the Contras).

L'affaire Lewinsky (1999-2000): Not Every Dog Has His Day

William Jefferson Clinton was known as a philanderer long before he became President. When Gennifer Flowers surfaced during his campaign, he as much as admitted his extra-marital affairs, conceding on television that he had caused pain to his family. Voters knew what he must be referring to, but did not believe his extra-curricular sex life disqualified him to be president.

Before Monica Lewinsky became a household name, Washington gossip claimed that President Clinton was having affairs - as President - with some half dozen different women. No one was surprised. Nor did this cause any problem in his reelection bid in 1996.

When Monica's one-time friend and confidant, Linda Tripp, reported the affair of the White House intern to Independent Counsel Kenneth Starr, the rules changed. Starr had been searching for wrongdoing by Clinton since January 1994 and had found none. But he did find that Clinton had been less than truthful in testifying about his relationship with Lewinsky in the civil litigation filed by Paula Jones, who had alleged that Clinton had improperly propositioned her when he was the governor of Arkansas.

Using all the prosecutorial tools of the United States Government against the President, Starr proceeded to build a perjury and obstruction of justice case against Clinton, based on his false testimony in the Jones civil case. Rather than test whether a sitting President can constitutionally be criminally prosecuted while in office, Starr instead referred the entire matter to the House of Representatives.

The House promptly proceeded, acting in a purely partisan manner, to impeach the president, and send the matter to trial in the Senate. And the Senate voted to acquit the President, for he had not engaged in an impeachable offense.

L'affaire Lewinsky was more than a presidential scandal. The House scandalized itself in acting in a purely partisan fashion. Independent Counsel Ken Starr scandalized himself by probing the private sexual life of a president. President Clinton scandalized himself, in the words of Newsweek columnist Jon Alter, by his "squalid behavior" that "strip[ped] his office of much of its grandeur."

President Bush's Changed Circumstances: Haunted By His Questionable Business Past?

If past is prologue, and I believe it is, President Bush is now highly vulnerable to scandal. It has long been known that Bush played in the minor leagues of the Texas oil business, that he parlayed his name into a seat on a small public company from which he earned almost a million dollars for doing nothing, and that he was given a piece of the Texas Rangers baseball club for a nominal investment that would ultimately reap him a $20 million nest egg.

Bush boasted of his business background during his presidential campaign, claiming that his business background was one of his assets. He would run the government like a good Chairman of the Board, with Cheney his trusted Chief Operating Officer. The fact they had both become wealthy quickly, he suggested, was only proof of their ability.

After Enron, Tyco, Global Crossing, World Com and Adelphia, the world looks different. Just as our domestic and foreign policy changed with September 11th, the accounting frauds of America's largest corporation, with others doing what George Bush and Dick Cheney did on a smaller scale, has changed the economic and business perspective of the nation. Integrity, and not merely results, has begun to matter - because without integrity, corporations will never attract the investment to get results.

Both Bush's and Cheney's weak efforts to deal with the problems facing American business suggest they don't get it. Again, they are following the pattern: Warren Harding didn't get it about relying on his cronies. Richard Nixon didn't understand that his abuses would not be tolerated. Ronald Reagan failed to appreciate that his anti-communism zeal had to follow the law. Bill Clinton was unable to keep his zipper up even when he was the subject of civil and criminal investigation. So, too neither Bush nor Cheney appear to appreciate their present jeopardy.

Those who make it to the White House - both by election and selection - often have more hubris than common sense, and are easily blinded by the spotlight in whose glare they live. The White House, notwithstanding efforts to keep the blinds drawn, is a fish bowl. It magnifies everything for those looking in, and distorts the world for those looking out.

History suggests either Bush or Cheney are a presidential scandal ready to happen. Hopefully, it won't happen. However, I'd give two-to-one odds it will.