When the banks came running to Congress for help, Coelho stood ready to oblige—with the understanding that savings and loan officials would help Democrats in return. One such executive was the Texas entrepreneur Thomas Gaubert, a boisterous, cigar-smoking Dallas native who had purchased a savings and loan thrift for $1 million and within one year increased its net worth from $40 million to $223 million. Now, like most of the other big players, his bank was struggling as a result of bad investments. Coelho brought Gaubert into the DCCC, and the former Republican donor became one of the House Democrats’ biggest check writers.
Such efforts looked sordid to campaign-finance watchdogs, but the leaders of both parties were impressed with what Wright accomplished, with Coelho’s help. Wright and Coelho had refilled Democratic campaign coffers, even with Reagan in the White House. Wright and Speaker O’Neill had kept House Democrats disciplined on almost every key issue. Few Democrats defected from the party line after 1982, which created an enormous obstacle to the Reagan Revolution, and House Republicans were pushed aside in policy debates. Democrats also cheered Wright on when he helped Speaker O’Neill respond to the Republican C-SPAN tirades and defend the Democrat Frank McCloskey’s right to the contested Indiana seat. Wright made no bones about his opposition to Reagan and his record. On the eve of the president’s 1984 State of the Union address, Wright called for legislation to reverse the president’s “cruelly deranged” policies so as to “revive the American dream, to renew the American spirit, to rekindle America’s faith in our future.”44
Wright’s emotions became so intense at times that they almost devolved into violence. In July 1985, the Republican COS members Daniel Lungren and Robert Walker approached Wright on the floor of the House to complain about the way he had used parliamentary procedures to block Republican participation. When the two COS members threatened to tie up the business of the House through procedural tricks of their own, Wright unexpectedly broke into a smile. According to Lungren, seeing the confusion on his colleague’s face, Wright coldly explained, “I am smiling because I am trying to hold inside how I feel. I want to come down here and punch you and Mr. Walker in the mouth.”45 Lungren told reporters that Wright then walked up and forcefully grabbed him by the arm, repeating the threat until the congressman insisted that he let go right away. Wright’s spokeswoman admitted that the two legislators had exchanged “intemperate words.”46 Wright apologized, though the sixty-two-year-old majority leader insisted that he had been joking about hitting his thirty-eight-year-old weight-lifting conservative colleague.47 On another occasion, colleagues had to physically hold Wright back after the California Democrat Pete Stark called him a “cocksucker” during a heated exchange on the floor. “I remember thinking I’m about to be hit in the face and I think it’s going to hurt a lot,” Stark said.48
When it was Wright’s turn to become Speaker in 1987, not everyone thought he was the best face for the Democratic Party. In The New Republic, Paul West recounted the Texan’s penchant for pork and decried the shady figures who had surrounded him during much of his career. At heart, West noted, “Wright remains a deal-making, big-spending Texas pol—hair trigger and all. . . . Not a few of his colleagues wonder whether the last of the old-time Democrats is the right leader for the House and the Democratic Party.” Elevating “an old-line politician with more than a hint of the snake-oil salesman about him as your national spokesman is no way to win the hearts and minds of tomorrow’s voters.”49 There was no evidence or rumor of any kind of serious wrongdoing, just countless stories about the shadier people whom he associated with in his home district and the fact that he was not a strong champion of reform.
As Wright prepared to take over from O’Neill, Republicans were surprisingly gloomy. The 1986 midterm elections had been tough for Reagan’s party: Democrats had recaptured the Senate with a 55 to 45 majority. “We took a bath in the Senate,” said the Senate minority leader, Robert Dole of Kansas.50 “We had a fine victory yesterday,” a gleeful Wright reported in his diary. “I won by 69% and we gained the Senate, along with some modest gains in House numbers. Everywhere Reagan went asking for a referendum on his policies, the voters elected a Democrat. Even in Indiana, where the president tried to purge Frank McClosky, we won.”51 The retiring Speaker, O’Neill, announced, “If there was a Reagan Revolution, it’s over.”52
A scandal in the weeks following the midterms rocked the White House further. The press and Congress discovered that members of the National Security Council and the CIA had secretly sold arms to Iran. The notion that Reagan had authorized the sale of weapons to Ayatollah Khomeini’s Iran, in exchange for assistance in freeing American hostages being held in Lebanon by the terrorist group Hezbollah, contradicted everything that he stood for in foreign policy. It also appeared to violate a U.S. ban on selling military hardware to Iran.
Much worse was to come. On November 24, Attorney General Edwin Meese, who had conducted a top secret internal fact-finding mission for the president, revealed to Reagan’s high-ranking advisers that funds from the weapons sales to Iran had been diverted to the Nicaraguan contras—violating the 1982 and 1984 Boland Amendments, which expressly prohibited military and economic assistance to the right-leaning rebels.53
In private, the president was shaken by Meese’s report. Reagan recorded in his diary, “This was a violation of the law against giving the Contras money without an authorization by Congress.” Lieutenant Colonel Oliver North, the National Security Council staffer who had been the point man for the operation, “didn’t tell me about this. Worst of all,” Reagan continued, National Security Adviser John Poindexter “found out about it & didn’t tell me. This may call for resignations.”54
The Iran-contra scandal, as it was soon called, kept growing. By the time that Democrats voted for Wright as Speaker, the Reagan administration was in a full-blown political crisis. Congress was preparing to set up a Watergate-style select committee to investigate the scandal, while Reagan appointed the conservative senator John Tower to head a bipartisan commission to do the same. By mid-December, Reagan’s public-approval ratings had plummeted from 67 percent to 46—the worst one-month drop ever since Gallup had started recording approval ratings in 1936. It wasn’t Watergate, at least not yet, but the White House was bleeding heavily.
Wright publicly questioned whether Reagan had been telling the truth when he insisted that he didn’t know of the funds transfer before Meese’s discovery. It “defies logic,” Wright argued to the press, that lower-level officials had made these crucial decisions. “The president should have been aware. If nobody knew of it, that in itself is a confession of a great void in the execution of our foreign policy.”55
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When the One Hundredth Congress convened on January 6, 1987, Wright delivered a stirring opening speech calling Congress the “highest theater that anyone plays upon this earth today.” The chamber was particularly crowded with guests, with people sitting in the aisles. Joseph Kennedy, Robert’s son, was being sworn in for his first term in the House—an emotional moment for those who remembered the tragedies that had befallen the Kennedys. Joseph’s mother, Ethel, couldn’t find a seat in the members’ gallery until Wright’s sister, Betty Lee, offered her one.
Plenty of Texans were on hand to celebrate the new Speaker as well. At a party in the Cannon Caucus Room after his swearing in, Wright’s successor as mayor of Weatherford, Sherry Watson, handed him a handsome wood carving of a witty caricature created by a local artist. Back in Fort Worth, thousands of residents watched on satellite television in the Will Rogers Coliseum.56
While Wright reveled in his moment of victory, Gingrich prepared to go on the attack. Gingrich had started his congressional career by bringing down Charles Diggs, and he believed that he could do the same to the new Speaker. As one Gingrich staffer wrote, the evidence of ethical problems among Democrats was “clear and well-documented.”
Six mo
nths into Wright’s tenure as Speaker, Gingrich pounced. At the same time he was peddling an unpopular plan to privatize Social Security, Gingrich proposed an amendment to a $1.4 billion appropriations bill to tackle corruption in the House. His amendment would establish a special independent commission to investigate a “pattern of corruption” in the House; a commission was needed because the House Ethics Committee “seems to protect the institution rather than police it.”
Most journalists knew that this ploy would not get far, but they covered Gingrich’s proposed amendment nonetheless. The amendment went down to defeat by 297 to 77, but Gingrich and his cosponsors were undeterred. According to the minutes of a COS meeting that took place on July 1, Bob Walker said they lost the vote, but “we won in the press.”57
Wright began to draw more critical attention. The New York Times published a tough editorial on June 24, asking, “Does Jim Wright want to be known as the Speaker of the House or as the defender of some Texas banking hustlers?”58 Writing in Newsweek, the correspondents Rich Thomas and David Pauly half joked that Wright was a great believer in Tip O’Neill’s maxim that all politics is local, given that “three times recently he intervened with federal regulators on behalf of Texas real-estate men, all of whom have run into legal problems.”59
Gingrich sent newspaper clippings to reporters and policy makers that questioned Wright’s ethics.60 The Georgian assigned Karen Van Brocklin, his legislative assistant, to search newspaper archives for articles he could circulate.61 Van Brocklin, a tough-minded Minnesotan with a knack for full-contact partisan politics, scoured microfiches and pulled stories from the Fort Worth press that spattered mud across Wright’s image. The adversarial style of journalism that Wright hated in the Washington press corps had seeped down into local newspapers such as the Fort Worth Star-Telegram. A New York–based company, Capital Cities Communications, had purchased the Fort Worth Star-Telegram and two radio stations in November 1974, and it wanted to turn the newspaper into a hard-hitting publication with national appeal and the style of high-quality investigative reporting that could sell subscriptions. “The Speaker still has difficulty understanding the new and modern press,” one of his staffers admitted.62
Reporters now looked at the underside of Wright’s fierce loyalty to constituents. The Fort Worth Star-Telegram reporter David Montgomery wrote articles populated by colorful and disreputable characters living in Wright’s district, all of whom seemed to have unusually close relationships with their congressman. In need of money, Wright had entered into a series of investments back in Texas, all of which were legal but most of which involved him with figures and financial deals that didn’t look good on the front page.63
One of Montgomery’s most provocative stories revolved around a Fort Worth real estate developer named George Mallick. A self-made success, the grandson of a Lebanese peddler and son of the owner of a chain of meat markets, Mallick turned some of his savings into investments, gradually growing his capital into a profitable real estate development operation.64 Despite his Texas twang, Mallick always felt like an outsider in Fort Worth. His father had made his own way in this country, and George had worked his way up, starting as a gofer for his dad at eight years old and then making money on the streets by selling snow cones near the bus stop with a fifty-pound ice shaver he purchased with his savings. By his late twenties, he had worked his way up in the world and raised enough capital to build and sell apartment and office buildings. His own development company handled all aspects of each project: purchasing the land, constructing the property, and managing rental units. He also rubbed some people the wrong way, coming off as crass even as he yearned to be seen as a man of stature.
Wright had been friendly with Mallick since 1963, when they met at a ribbon-cutting ceremony for the opening of one of the developer’s Fort Worth shopping centers. In 1979, along with their wives, Wright and Mallick formed a company called Mallightco, a combination of their two names. Betty worked as the vice president. Mallick’s investments soon expanded into the oil industry and other kinds of businesses.
Wright, according to Montgomery’s reporting, secured $30 million in federal development grants to revitalize the stockyards in Fort Worth in 1985 and 1986. The stockyards were located by a major railway line, but by the 1970s the streets in the area were dead. To improve the neighborhood, some local residents planned to lure in restaurants, nightclubs, museums, apartments, and offices.
In 1981, the revitalization moved into high gear when Billy Bob Barnett—a former football player turned bar owner and beer distributor—purchased a massive building to launch Billy Bob’s Texas, a honky-tonk spanning over two acres, with everything from a rodeo to live music. From his Fort Worth office, according to the stories, Mallick mapped out his plans to save the city, much of which depended on an infusion of federal funds. By 1986, Barnett’s honky-tonk bar was struggling, and he approached Mallick for help. Mallick, according to Montgomery, offered to find Barnett $27 million in financing in return for a stake in the business. The Fort Worth papers published stories about the negotiations, suggesting that the proposed deal reflected untoward political relationships in the district. Additional stories reported that Betty, who regularly used the company Cadillac, earned a salary of $18,000 a year with Mallightco until two years before Wright was elected Speaker.
None of these small-bore stories worried the Speaker. Not only did it seem as if they would be uninteresting to most readers, but Wright insisted that they were not true or misconstrued the facts. While Mallick had dabbled with investing in the Fort Worth redevelopment neighborhood, Wright reminded his friends and staff that nothing had come of the efforts. Although it was true that Billy Bob Barnett offered Mallick 17 percent ownership in his bar in exchange for $27 million to get him out of bankruptcy, Mallick was unable to raise the funds.65 His friend and partner didn’t have any “direct interest” in federal legislation. Nor had George and his wife, Marlene, given the Wrights any gifts of over $100 (the maximum limit according to the ethics rules). Betty was in fact a legitimate co-owner of Mallightco, which owned the company car, and she earned her salary (half of what she earned in the job that she quit when her husband became majority leader) by making most of the investment decisions for the couples. Upon reading the press clippings, Wright brushed aside any concern that anything would come of the pieces.
Believing that the sensational stories would damage Wright, Gingrich distributed these and other stories, including another series from the Dallas Times Herald that centered on a colorful Fort Worth oilman named Monty Moncrief who had business dealings with celebrities like Bob Hope. Wright had known Moncrief and his family for most of his adult life. Moncrief allegedly turned to Wright in 1979 for help when an overseas investment was threatened, involving a commercial oil well in Egyptian water right off the Sinai coast—territory that Israel controlled after the Six-Day War in 1967 but returned to the Egyptians after the 1979 Israel-Egypt peace deal. According to the Times Herald, then majority leader Wright wrote to President Carter, Secretary of State Cyrus Vance, and even the Egyptian president, Anwar Sadat, in March 1979 to prevent Moncrief from losing the lease, worth over $100 million. And Wright allegedly obtained an exceptionally good, risk-free deal for an investment in an east Texas oil well that earned him between $70,000 and $220,500. As with the stories about Mallick, Wright didn’t panic. While he had tried to help Moncrief, unsuccessfully, he didn’t do anything he wouldn’t do for other Texas constituents with problems that impacted his state. Moncrief and Wright had invested money in the same manner, and they had taken the same financial risks. There were no favors granted by anyone. Nor could Wright help but chortle at the fact that with other stories reporters didn’t even have their facts straight. Gingrich had circulated a provocative news account documenting how Wright had contacted the secretary of the interior to protect the Texas Oil and Gas Corporation’s right to drill on federal lands in Arkansas. The reporter alleged that Wright owned s
tock in the company and was protecting his economic interests. Wright noted to his staff that the story was entirely wrong. He never owned stock in the company, plain and simple. And though the newspaper had published a second story correcting itself, Gingrich handed out only the first.66
Several articles reported that Wright had struggled to make ends meet despite his political power. Between 1984 and 1987, Wright’s personal investments had plummeted by almost 75 percent.67 In addition to the ongoing costs from his divorce and mismanaged investments, some reporters suggested that his wife, Betty—who usually looked as if she had just walked out of a salon and had developed a penchant for lynx coats and fancy cars—had an expensive lifestyle. In 1983, they had purchased a handsome brick home in McLean, Virginia, adding on a sunroom large enough to seat three tables of ten so Wright could do more entertaining. The house was decorated with crystal chandeliers, an inlaid Chinese table, and a large portrait of Betty.68
Thanks to Gingrich’s footwork, these and other pieces from the Texas press began to circulate around Washington, leading more national reporters to pay closer attention to Wright.
Hot on Wright’s trail was Brooks Jackson, a dogged and methodical investigator whose work examining how lobbyists influenced politicians had made him a trailblazer on what was becoming the “money and politics” beat. He tended to see politics through a moralistic lens, a tale of good and evil rather than a complex, nuanced process. Although his claim to fame was a humorous story about President Carter batting away a swamp rabbit during a fishing expedition in Georgia, Jackson’s work usually revolved around dollars and decision making. By 1980, he was covering the savings and loan industry for The Wall Street Journal, which led him to Wright, Coelho, and the congressional Democrats. In 1986, Jackson took a leave of absence from the paper to write a book about the upcoming midterm elections. As part of his research, he followed the chairmen of both parties’ campaign committees in the House. Because Coelho gave him unlimited access, Jackson saw firsthand how the Californian was orchestrating a revolution in party finances by raising extraordinary amounts of money from the savings and loan industry in a sprint to catch up to Republican corporate fund-raising.69
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