Reagan administration scandals

During the presidency of Ronald Reagan in the United States, multiple scandals developed 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 U.S. and international law.

Several other controversies also occurred in the Reagan administration; one involved Department of Housing and Urban Development 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 Secretary of the Interior James G. Watt, were rewarded with huge lobbying fees for assisting campaign contributors with receiving government loans and guarantees.Fact|date=April 2008 Sixteen convictions were eventually handed down, including several members of the Reagan administration. [Greenberg, Gerald S. 2000. Larry D. Thompson. In "Historical Encyclopedia of U.S. Independent Counsel Investigations", ed. Gerald S. Greenberg, 337-38. Westport, Ct: Greenwood Press.]

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

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 Iran and using proceeds from the sales to fund the Contras, a guerrilla insurgent group in Nicaragua.

#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. [http://www.fas.org/irp/offdocs/walsh/summpros.htm Walsh Iran / Contra Report - Summary of Prosecutions ] ]
#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. He was pardoned by Bush.
#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. [http://www.fas.org/irp/offdocs/walsh/chap_15.htm Walsh Iran / Contra Report - Chapter 15 William J. Casey ] ]
#Richard R. Miller - Partner with Oliver North in IBC, an Office of Public Diplomacy front group, convicted of conspiracy to defraud the United States. [http://www.fas.org/irp/offdocs/walsh/chap_13.htm Walsh Iran / Contra Report - Chapter 13 Private Fundraising: The Guilty Pleas of Channell and Miller ] ]
#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. [ [http://www.fas.org/irp/offdocs/walsh/chap_17.htm Walsh Iran / Contra Report - Chapter 17 United States v. Clair E. George ] ]
#Richard Secord was indicted on nine felony counts of lying to Congress and pled guilty to a felony charge of lying to Congress. [ [http://www.fas.org/irp/offdocs/walsh/chap_09.htm Walsh Iran / Contra Report - Chapter 9 United States v. Richard V. Secord ] ]
#Thomas G. Clineswas convicted of four counts of tax-related offenses for failing to report income from the Iran/Contra operations. [ [http://www.fas.org/irp/offdocs/walsh/chap_11.htm Walsh Iran / Contra Report - Chapter 11 United States v. Thomas G. Clines, a.k.a. ``C. Tea' ] ]
#Carl R. Channel - Office of Public Diplomacy , partner in International Business- first person convicted in the Iran/Contra scandal, pled guilty of one count of defrauding the United States
#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.) [ [http://www.fas.org/irp/offdocs/walsh/chap_03.htm Walsh Iran / Contra Report - Chapter 3 United States v. John M. Poindexter ] ]
#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. [ [http://www.fas.org/irp/offdocs/walsh/chap_01.htm Walsh Iran / Contra Report - Chapter 1 United States v. Robert C. McFarlane ] ]

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, Reagan's Secretary of the Interior was indicted on 24 felony counts and pled guilty to a single misdemeanor. He was sentenced to five years probation, and ordered to pay a $5000 fine. [http://www.pbs.org/newshour/bb/law/july-dec99/hud_7-1.html Online NewsHour: Case Closed - July 1, 1999 ] ]
#Philip Winn - Assistant HUD Secretary. Pleaded guilty to one count of scheming to give illegal gratuities.
#Thomas Demery - Assistant HUD Secretary - pleaded guilty to steering HUD subsidies to politically connected donors.
#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.
#Catalina Villaponda - Former US Treasurer, HUD
#Joseph A. Strauss - Accepting kickbacks [ [http://www.nlihc.org/mtm/mtm3-40.htm NLIHC: National Low Income Housing Coalition - 404- Page Not Found ] ]

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. [ [http://www.pbs.org/wgbh/amex/reagan/timeline/index_5.html The American Experience | Reagan | Timeline (1986 - 1988) ] ]
*Lyn Nofziger—White House Press Secretary - Convicted on charges of illegal lobbying after leaving government service in Wedtech scandal. His conviction was later overturned. [http://www.chron.com/disp/story.mpl/nation/3752008.html]

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.
#Rita Lavelle was convicted of lying to Congress and served three months of a six-month prison sentence. [ [http://query.nytimes.com/gst/fullpage.html?res=9C03E3D8143BF93AA25752C0A963948260 AROUND THE NATION; Conviction of Ex-Official Of E.P.A. Is Upheld - New York Times ] ]

avings & 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 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 at the time, "The theft from the taxpayer by the community that fattened on the growth of the savings and loan (S&L) industry in the 1980s 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." ["The Greatest-Ever Bank Robbery: The Collapse of the Savings and Loan Industry" by Martin Mayer (Scribner's)]

John Kenneth Galbraith called it "the largest and costliest venture in public misfeasance, malfeasance and larceny of all time." [John Kenneth Galbraith, "The Culture of Contentment." (Houghton Mifflin, 1992).]

ee also

*Political scandals of the United States
*Savings and Loan crisis

Notes