Reagan administration scandals

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Lt-Col. Oliver North, testifying before Congress
Lt-Col. Oliver North, testifying before Congress

The Reagan administration saw several controversies unfold in their ranks which resulted in a number of administration staffers being convicted. The most well known, the Iran-Contra affair, involved a plan whereby weapons were sold to Iran and the profits diverted to fund the Nicaraguan Contras, in violation of US law.

Several other controversies also occurred in the Reagan administration; one involved Department of Housing secretary Samuel Pierce and his associates. Wealthy contributors to the administration's campaign were rewarded with funding for low income housing development without the customary background checks, and lobbyists, such as former EPA head James G. Watt, were rewarded with huge lobbying fees for assisting campaign contributors with receiving government loans and guarantees. Six administration staffers were convicted.

Also involving the EPA: funds from the Superfund to clean up toxic waste sites were being released to enhance the election prospects of local politicians aligned with the administration.

Contents

[edit] Iran-Contra Affair

Main article: Iran Contra Affair

In the Iran-Contra Affair, several administration staffers were convicted of crimes ranging from lying to Congress to conspiracy to defraud the U.S. The scandal involved the administration selling arms to the radical Islamic regime in Iran and using proceeds from the sales to illegally fund the Contras, a guerrilla/terrorist group in Nicaragua.

  1. Elliott Abrams agreed to cooperate with investigators and in return was allowed to plead guilty to two misdemeanor charges instead of facing possible felony indictments. He was sentenced to two years probation and one hundred hours of community service. He was pardoned by George H.W. Bush on December 24, 1992 along with five other former Reagan Administration officials who had been implicated in connection with Iran-Contra. [1]
  2. National Security Advisor Robert C. McFarlane, pled guilty to four misdemeanors and was sentenced to two years probation and 200 hours of community service and was ordered to pay a $20,000 fine.[2] He was pardoned by Bush.
  3. Alan D. Fiers was the Chief of the Central Intelligence Agency's Central American Task Force. He pled guilty in 1991 to two counts of withholding information from Congress and was sentenced to one year of probation and one hundred hours of community service. He was pardoned by Bush.[3][4]
  4. Richard R. Miller - Partner with Oliver North in IBC, an Office of Public Diplomacy front group, convicted of conspiracy to defraud the United States.[5][6]
  5. Clair George was Chief of the CIA's Division of Covert Operations under President Reagan. George was convicted of lying to two congressional committees in 1986. He was pardoned by Bush. [7][8][9]
  6. Richard Secord was indicted on nine felony counts of lying to Congress and pleaded guilty to a felony charge of lying to Congress.[10][11]
  7. Thomas G. Clineswas convicted of four counts of tax-related offenses for failing to report income from the Iran/Contra operations.[12][13]
  8. Carl R. Channel - Office of Public Diplomacy , partner in International Business- first person convicted in the Iran/Contra scandal, pleaded guilty of one count of defrauding the United States[14][15]
  9. John Poindexter, Reagan's national security advisor, was found guilty of five criminal accounts including lying to Congress, conspiracy and obstruction of justice. His conviction was later overturned on grounds that he did not receive a fair trial (the prosecution may have been influenced by his immunized testimony in front of Congress.)[16][17]
  10. Oliver North was indicted on sixteen charges in the Iran/Contra affair and found guilty of three - aiding and abetting obstruction of Congress, shredding or altering official documents and accepting a gratuity. His convictions were later overturned on the grounds that his immunized testimony had tainted his trial.[18][19]

[edit] Department of Housing and Urban Development grant rigging

The HUD controversy involved administration staffers granting federal funding to constituents, and defrauding the US government out of money intended for low income housing. Judge Arlin Adamns obtained the following convictions:

James Watt
James Watt
  1. James Watt, Reagan's Secretary of the Interior was indicted on 24 felony counts and pleaded guilty to a single misdemeanor. He was sentenced to five years probation, and ordered to pay a $5000 fine.[20]
  2. Philip Winn - Assistant HUD Secretary. Pleaded guilty to one count of scheming to give illegal gratuities.[21]
  3. Thomas Demery - Assistant HUD Secretary - pleaded guilty to steering HUD subsidies to politically connected donors.[22]
  4. Deborah Gore Dean - executive assistant to Samuel Pierce - indicted on thirteen counts, three counts of conspiracy, one count of accepting an illegal gratuity, four counts of perjury, and five counts of concealing articles. She was convicted on twelve accounts. She appealed and prevailed on several accounts but the convictions for conspiracy remained.
  5. Catalina Villaponda - Former US Treasurer, HUD[23]
  6. Joseph A. Strauss - Accepting kickbacks[24]

[edit] Lobbying Scandal

When an administration staff member leaves office, federal law governs how quickly one can begin a lobbying career.

  • Michael Deaver, Reagan’s Chief of Staff, was convicted of lying to both a congressional committee and to a federal grand jury about his lobbying activities after he left the government. He received three years probation and was fined one hundred thousand dollars after being convicted for lying to a congressional subcommittee.[25]
  • Lyn Nofziger—White House Press Secretary - Convicted on charges of illegal lobbying after leaving government service in Wedtech scandal. His conviction was later overturned.[26]

[edit] EPA controversy

The Environmental Protection Agency Scandal arose when it was discovered that the administration was releasing Superfund grants for cleaning up local toxic waste sites to enhance the election prospects of local officials aligned with the Republican Party.

  1. Rita Lavelle was convicted of lying to Congress and served three months of a six-month prison sentence.[27]

[edit] Savings & Loan Bailout

Reagan's "elimination of loopholes" in the tax code included the elimination of the "passive loss" provisions that subsidized rental housing. Because this was removed retroactively, it bankrupted many real estate developments made with this tax break as a premise. This with some other "deregulation" policies (ratified by a Democratic congress) ultimately led to the largest political and financial scandal in U.S. history: The Savings and Loan crisis. The ultimate cost of the crisis is estimated to have totaled around USD$150 billion, about $125 billion of which was consequently and directly subsidized by the U.S. government, which contributed to the large budget deficits of the early 1990s.

An indication of this scandal's size, Martin Mayer wrote, "The theft from the taxpayer by the community that fattened on the growth of the savings and loan (S&L) industry in the 1980's is the worst public scandal in American history. Teapot Dome in the Harding administration and the Credit Mobilier in the times of Ulysses S. Grant have been taken as the ultimate horror stories of capitalist democracy gone to seed. Measuring by money, [or] by the misallocation of national resources...the S&L outrage makes Teapot Dome and Credit Mobilier seem minor episodes." [28]

John Kenneth Galbraith called it "the largest and costliest venture in public misfeasance, malfeasance and larceny of all time."[29]

[edit] See also

[edit] Notes

  1. ^ http://www.fas.org/irp/offdocs/walsh/summpros.htm
  2. ^ http://www.fas.org/irp/offdocs/walsh/summpros.htm
  3. ^ http://www.fas.org/irp/offdocs/walsh/chap_15.htm
  4. ^ http://www.fas.org/irp/offdocs/walsh/summpros.htm
  5. ^ http://www.fas.org/irp/offdocs/walsh/chap_13.htm
  6. ^ http://www.fas.org/irp/offdocs/walsh/summpros.htm
  7. ^ http://www.fas.org/irp/offdocs/walsh/chap_15.htm
  8. ^ http://www.fas.org/irp/offdocs/walsh/chap_17.htm
  9. ^ http://www.fas.org/irp/offdocs/walsh/summpros.htm
  10. ^ http://www.fas.org/irp/offdocs/walsh/chap_09.htm
  11. ^ http://www.fas.org/irp/offdocs/walsh/summpros.htm
  12. ^ http://www.fas.org/irp/offdocs/walsh/chap_11.htm
  13. ^ http://www.fas.org/irp/offdocs/walsh/summpros.htm
  14. ^ http://www.fas.org/irp/offdocs/walsh/chap_13.htm
  15. ^ http://www.fas.org/irp/offdocs/walsh/summpros.htm
  16. ^ http://www.fas.org/irp/offdocs/walsh/chap_03.htm
  17. ^ http://www.fas.org/irp/offdocs/walsh/summpros.htm
  18. ^ http://www.fas.org/irp/offdocs/walsh/chap_01.htm
  19. ^ http://www.fas.org/irp/offdocs/walsh/summpros.htm
  20. ^ http://www.pbs.org/newshour/bb/law/july-dec99/hud_7-1.html
  21. ^ http://www.pbs.org/newshour/bb/law/july-dec99/hud_7-1.html
  22. ^ http://www.pbs.org/newshour/bb/law/july-dec99/hud_7-1.html
  23. ^ http://www.pbs.org/newshour/bb/law/july-dec99/hud_7-1.html
  24. ^ http://www.nlihc.org/mtm/mtm3-40.htm
  25. ^ http://www.pbs.org/wgbh/amex/reagan/timeline/index_5.html
  26. ^ http://www.chron.com/disp/story.mpl/nation/3752008.html
  27. ^ http://query.nytimes.com/gst/fullpage.html?res=9C03E3D8143BF93AA25752C0A963948260
  28. ^ The Greatest-Ever Bank Robbery: The Collapse of the Savings and Loan Industry by Martin Mayer (Scribner's)
  29. ^ John Kenneth Galbraith, The Culture of Contentment. (Houghton Mifflin, 1992).
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