Burning Down the House

by Julian E. Zelizer

  The Speaker was furious: the White House was leaking comments about tensions between him and the president, and the story was featured in the Sunday newspapers and television talk shows. Wright had no doubt that Shultz knew about his negotiations and bristled that he was facing a made-up scandal orchestrated by his opponents.

  With attacks raining down, Wright requested an immediate meeting with the president. By Wright’s account, the forty-minute session on November 16 was tense. When the Speaker arrived at the Oval Office, Reagan “was angrier than I had ever seen him, stiff, and unbending.” The president criticized Ortega as untrustworthy and complained that they now had a “Wright-Ortega plan.”92 He then walked out of the room without saying any more.

  Reagan’s team admonished Wright for talking to Ortega without knowing all the facts. “We let him have it pretty good,” Reagan recounted in his diary.93 A joke made its way around the White House: “Where are President Ortega and the Nicaraguan rebels going to meet? Speaker Wright’s embassy.”94

  The situation deteriorated so badly that the Democratic power broker Robert Strauss, a Texan like Wright and a close friend of Shultz’s, stepped in to negotiate a peace agreement between the two men. The resulting document, signed by both men on November 17, outlined a six-point agreement on how the peace process in Nicaragua should be handled by U.S. policy makers. The pact stipulated that the peace deal would be crafted by the Central American presidents rather than imposed on them by the United States and that negotiations would be handled by Central American officials without U.S. involvement unless requested. The United States would meet with the Sandinistas once it was clear that serious negotiations were under way. Wright convened a press conference alongside Shultz, with Strauss standing between them.95 “The war is over,” the White House spokesperson Marlin Fitzwater proclaimed.96

  Brooding from his office in the Rayburn Building, Gingrich worried that Wright had gotten the upper hand. “Mr. Speaker,” began a press statement by Gingrich, “your secret meeting with the Communist dictator on Veterans’ Day was the most destructive undermining of U.S. foreign policy by a Speaker in our country’s history.”97 During a speech to a group of Florida Republicans who were visiting Washington, Gingrich grew even more belligerent. He charged that the Speaker was “systematically undermining the foreign policy of the United States” and said that he was “so consumed by his own power that he is like Mussolini, believing he can redefine the game to suit his own needs.”98 When asked on CNN’s Larry King Live about Gingrich’s ire, Wright dismissed the irritating Georgian: “I don’t pay too much attention to what Congressman Gingrich says. He says that kind of thing about Tip. He says it about me. He says it about all kinds of Democrats. That’s his profession, and that’s all right. I don’t pay much attention to it.”99

  The White House might have agreed to a truce, but Wright’s opponents had not. The Texas Republican Congressional Committee warned that Wright was “implementing his own personal foreign policy” and saw “no difference between fighting Communism and spreading Communism.”100 On one conservative talk radio show in Chicago, a listener called in to say that “somebody should blow [Wright] away.”101

  Something had clearly shifted in the 315 days since Wright first took up the Speaker’s gavel. Every time he tried to do something bold, Republicans had used his actions as proof that Democrats were constantly abusing their power. “Wright’s a useful keystone to a much bigger structure,” Gingrich privately acknowledged to one reporter. “I’ll just keep pounding and pounding on his ethics. There comes a point where it comes together and the media takes off on it, or it dies.”102 Toward the end of the year, Gingrich wrote to Ralph Nader, “We are now in the most frightening period in the history of the House of Representatives. If the current mood of ‘acceptance corruption’ is tolerated, it will grow into an ugly and destructive system of corrupt behavior. This pattern is ultimately a threat to the process of democracy.”103 Several major newspapers were working on stories about the Speaker’s relationship to the savings and loan industry and other tales of alleged greed and poor judgment.104 Little stories—such as the fact that Wright and a top Democratic campaign official had gone to meet with the New York City real estate developer Donald Trump in Trump Tower to try, unsuccessfully, to persuade the registered Republican to chair a major fund-raising event for the Democrats—were being picked up by journalists like Brooks Jackson as part of a bigger pattern.105 “The allegations against Wright have been mounting for months,” wrote Cort Kirkwood, author of the column Sleazewatch for the Washington-based wire service American Press International, “and they are now echoed not only by partisan opponents but in establishment organs like the New York Times and Newsweek.”106

  Wright and many other Democrats remained confident that they could swat away any threat posed by Gingrich. During a meeting with the editorial board of USA Today, Wright responded to a question from reporter Tracey Lyons about Gingrich’s charges by explaining that he had learned that these kinds of investigations were now part and parcel of being Speaker. Party leaders had to expect to be the “target for poisoned arrows” from the partisan opposition. Gingrich had harassed Speaker O’Neill as well. Wright, who had “accepted that as part of the price you have to pay,” indicated he was not very concerned. Using a sports metaphor, he reminisced about a friend who compared partisan politics to the game of “sack the quarterback.” When a quarterback won nine games in a row, as Democrats had in Wright’s first year as Speaker, the opposing team would send in its most “ugly, active, vicious, mean” tackle in the tenth game to try knocking the quarterback out of the game. The purpose was either to sideline the quarterback by injuring him or to incite him into an altercation so that the referee threw him off the field.107 None of the stories floated by Gingrich involved serious matters, and in Wright’s mind they weren’t even true. Wright’s friend Steve Jost of the Democratic Congressional Campaign Committee advised him to simply ignore the attacks from the arrogant little Georgian: “If you were not hitting the right chords, the hogs would not be howling so!”108

  But other Democrats were starting to worry. Gingrich seemed to be gaining support from his party. The line that separated mainstream congressional Republicans from the Gingrich faction was getting harder to discern. House Republicans established a task force, headed by Dick Cheney, to map out a strategy for counteracting Wright’s crushing tactics.109 Gingrich didn’t feel any pressure from his party to stop. “They were quite willing for me to do this. No one asked me to stop.”110 Almost everyone in the GOP, from President Reagan to the lowest-ranking House backbencher, was complaining about Democratic corruption and abuse of power. The whispers were becoming a roar. And none of them favored Speaker Wright.

  Nor did many Democrats love the Speaker. Plenty of younger Democrats who’d cut their teeth in the post-Watergate era preferred a more reform-oriented leader. Other Democrats feared that Wright was far too hawkish on foreign policy. And most Democrats agreed, at least privately, that Wright had surrounded himself with too many shady people for his own good.

  “There is a good feeling about success for the party,” Representative Tim Penny, a moderate Democrat from Minnesota, told The New York Times, “but it’s tempered by a nervousness about potential embarrassments.”111 A shared feeling began to take root among Democrats: if this wildfire continued to spread, the Speaker—and the entire party—could get badly burned.

  Four

  LEGITIMATING GINGRICH

  In mid-December 1987, as Speaker Wright’s first session came to an end, Gingrich asked his personal secretary, Laurie James, to step into his office. James had been feeling the tension around the watercooler as the holidays approached and the atmosphere in the House heated up. Always alert to Gingrich’s moods, she sensed that her boss was getting ready to escalate. Now Gingrich surprised her with a dangerous gambit: he planned to file an ethics complaint against the Speaker.

  Taking a sec
ond before responding, James shot Gingrich the kind of nervous look that a Hill staffer occasionally gives to a boss toying with a seemingly bad idea. Delicately, James asked Gingrich if he was concerned about the possible fallout from such a dramatic step. Gingrich compared himself to Martin Luther confronting the Diet of Worms in 1521. With righteous zeal, he said he needed to move against the Speaker, with or without his colleagues: “Here I stand. I can do no other. God help me.”1

  Gingrich knew that the Washington intelligentsia still dismissed him as a radical operating far outside the accepted norms of polite politics. He didn’t care much about what they thought; he cared far more about getting them on board. He was a man on a mission, and he was certain that he knew better. When he looked around the House chamber at the senior Democrats and Republicans, he did so with disdain, pleased to have gotten under their skin.

  Gingrich felt good about the progress he’d made in diminishing the space that separated him from the rest of the Republican pack. Speaker Wright took solace in knowing that most of their colleagues remained skeptical about anything the baby-faced Georgian had to say. Gingrich knew that many in his caucus deplored his antics. But he also knew, absolutely knew, that being a provocateur, playing for the television cameras, deploying exaggerated rhetoric, goading his opponents into appearing to abuse their authority, and keeping the media focused squarely on him benefited all Republicans, even if they couldn’t quite see it yet. If he became the prime driver behind ethics accusations against the Speaker, Democrats would expect the scandal to fizzle. They were wrong.

  The major question facing Gingrich at the start of 1988 was how to persuade some of Washington’s most prominent Republican officials—the Bushes, the Michels, the Cheneys—to go all in for his fiery campaign against Speaker Wright, even if they would have to hold their noses to do it. In February, Michel asked two Republican House members, Robert Livingston and Jim Sensenbrenner, to look into the stories contained in Gingrich’s thick binder of newspaper clippings. They reported to the minority leader—and a livid Gingrich—that there was no basis for a formal complaint with the Ethics Committee.2

  The media spotlight on Wright’s missteps and relationships had drawn blood, but it had not been enough to sway the Republican Party’s power brokers. Gingrich had them on board for his campaign against Democratic corruption and Wright’s autocratic methods, but not for a historic effort to force the Speaker of the House from office. This, Gingrich understood, was an entirely different ball game.

  And then he hit on his Big Idea.

  The key to Gingrich’s strategy would be winning support for his anti-Wright campaign from the reform-oriented institutions that had emerged after Watergate. He would go further than he had with Charlie Diggs in co-opting the government reforms of the 1970s for crass partisan objectives. If he could get respectable groups fighting for accountability in politics to enlist in his cause—making that the high road—then mainstream elected officials would have little choice but to follow. Without these reformers, Gingrich looked as if he were orchestrating a shabby partisan coup. They would offer reluctant Republicans the cover they needed to get behind him. This would be his masterstroke, and it would capitalize on the Democrats’ shortsightedness.

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  The good-government organizations, ironically, were mostly liberal and thus usually disliked by Gingrich, their new suitor. They believed that the central lesson from Watergate was that politicians must be held accountable by rules and oversight. If the political process was not made to be more democratic and accountable, the good-government types argued, then politicians would never produce good policy. The reformist groups were usually worlds apart from Gingrich on policy questions. But Gingrich clearly saw the common ground on the issue of whether the political process was broken, especially with the growing clamor from post-Watergate journalists looking for official malfeasance. The reform organizations had the Washington clout to give credibility to Gingrich’s allegations and the power to do real harm.

  As Gingrich embarked on his quest for broader support, Wright kept bungling his responses. The Speaker’s first major effort to quash the emerging ethics scandal took place through George Mair, an award-winning reporter whom Wright’s chief of staff, Marshall Lyman, had brought on in December 1987 as the Speaker’s chief press officer. Mair had been a respected syndicated columnist for the Los Angeles Times and the editor in chief and publisher of the Alexandria Gazette, as well as the author of ten books. Seasoned political hands such as Kirk O’Donnell, the former chief aide to Speaker O’Neill, told Wright that he should ignore the swirl of accusations. Wright decided to follow that advice, but in the meantime he hoped that Mair would swat away some of the charges and work behind the scenes to slow down the disparaging media coverage.

  Unfortunately for Wright, Mair went too far in his first weeks on the job. The press officer sat at his typewriter and sent off blistering letters to the publishers of major newspapers and magazines in which he accused their reporters of falling back on slander and innuendo, even plagiarizing material, to make their case. Mair wrote to Mortimer Zuckerman, the editor of U.S. News & World Report, that his writers should get “their facts straight and deep-sixed [sic] the stereotypes.” In response to a scathing article that appeared on December 21, 1987, Mair charged that a number of claims made about Wright’s relationship with the “high-rolling Texans in the S&L business” were “flat-out wrong.” Another U.S. News article about Wright’s role in the negotiations with Nicaragua were “so totally without foundation that it boggles the mind to grasp.” Mair was not diplomatic. To Robert Bartley, editor of The Wall Street Journal, he complained that he was surprised to see an article about the Speaker that was “marbled through with innuendo that is so far beneath the professional standards one used to expect from the Wall Street Journal.” He wrote to the editor in chief of Newsweek, Richard Smith, “I know NEWSWEEK is in a circulation and advertising fight for its survival and that you’re having to hype your sagging publication with stories on bra museums, angels of death and semi-nude female movie stars.” Mair also accused two top Los Angeles Times reporters of writing an article that was “badly researched, poorly written and possibly plagiarized.” On and on the letters went, volcanic eruptions that did little to aid the Speaker’s case.3

  Directly attacking the press was a dangerous strategy. They had a big platform from which to respond. And they did. The editors of these powerful publications were not going to sit by quietly as Mair delivered these reprimands and smeared the reputations of their top journalists. So, the editors exposed Mair’s campaign by speaking to reporters. The story looked to many Americans like an effort to intimidate and harass honest journalists investigating potential corruption. Lyman reassigned Mair, and Wright convened a private luncheon with several of those directly maligned to apologize for Mair’s actions. When the waiter came to serve the meal, Wright tried to lighten the mood by asking, “Is this crow? I’ll ask for a generous serving.”4

  Gingrich used all of this as political fuel to keep the scandal going as nonpartisan voices took up the cause. Speaker Wright drew the critical eye of the most prestigious good-government reform group, Common Cause, in early March after Bankers Monthly published a bombshell about his relationships with shady savings and loan officials.5 (The story had originally appeared in Regardie’s, a local business magazine.) The scathing article from the muckraking journalists William Adler and Michael Binstein probed the nature of the Speaker’s close relationship with an official named Donald Dixon. The allegations about the connections between two “good old boys” from Texas were shocking. Dixon had grown the Vernon Savings and Loan Association in Dallas from a thrift with holdings of $82 million in 1982 to an institution that was worth $1.4 billion a scant four years later. At the heart of this expansion were a series of high-risk construction loans that Dixon resold to smaller financial institutions. Then, like so many of these banks in the mid
-1980s, Dixon’s business crashed and burned in 1987 with the collapse of oil prices and the Texas economy. Wright, according to the authors, provided federal support to the Vernon Savings and Loan Association that allowed the unlikable Dixon to continue living an opulent lifestyle despite his business having gone bust.

  The article opened with the tale of a February 1987 meeting where Wright allegedly appalled three high-level officials of the Federal Home Loan Bank Board. The board planned to shut down Dixon’s failing thrift until the Speaker demanded, through a “string of colorful expletives,” that they keep the institution up and running. They “sat tight-lipped, their expressions frozen,” as the Speaker threatened to withhold his support for pending legislation to bail out struggling savings and loans unless the regulators took it easy on Dixon. “They were astonished that the Speaker,” the authors said, “one of the most important people in American politics, was going to bat for a sleaze ball like Dixon, who exemplified an industry run amok.” This, the journalists concluded, was nothing less than a morality tale “of greed and selfishness, of the abuse of power and wealth, of the perversion of democracy. It’s another example of how Texas politicians carry the water for the state’s business tycoons.”

  This story about the Speaker of the House caught the attention of Washington’s pundits. When the piece appeared, Wright’s allies realized that they had a serious political problem on their hands. It was the most highly charged accusation about Wright yet.

  The reason the story instantly caught the attention of Common Cause was that it directly linked Congress’s highest-ranking member to one of the biggest policy scandals of the era: the deregulation, collapse, and federal bailout of the savings and loan industry. Investigative reporters were discovering just how disastrous the deregulation of the early 1980s had been and how Congress was spending billions of dollars to save failed institutions in their states and districts. Democrats and Republicans had kept their mouths shut about what happened, because both parties were implicated in the fiasco. The federal bailouts had further supported many high-paid executives who had made extraordinarily risky investments and taken gratuitous, even obscenely high compensation. In March, a federal court indicted Thomas Gaubert, the savings and loan official who was Coelho’s ally in Democratic fund-raising, for fraudulently using $8 million in federal loans as part of an elaborate deal to “flip” land. According to the indictment, Gaubert had purchased commercial land for less than fifty cents a square foot, financed through the Capitol Savings & Loan of Mount Pleasant, Iowa, and then sold the land to a company for $5.25 a square foot on the same day. The deal totaled $5.6 million. HOUSE SPEAKER’S ALLY IS INDICTED IN TEXAS LAND DEAL, blared The Wall Street Journal. If convicted, Gaubert would face up to twenty-seven years in prison.