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The great public scandals of the last decade are remarkable, above all, for their inconclusiveness... View other pieces in "The New Yorker"
By Mark Danner September 24, 1990
Tags: Iran-Contra Print


The last great public scandals of the decade are remarkable, above all, for their inconclusiveness, their strange resistance to closure. After the tangled plots and subplots of the HUD mess, the Iran-Contra affair, and the savings-and-loan debacle have been painstakingly worked out, after the major figures and the bit players have been catalogued and identified, the committee reports filed and the sentences handed down, it appears that hardly anything has changed. One is left feeling that, given the right circumstances and the right people in office, it could all happen again, almost exactly as it did before.

In the case of Iran-Contra, it is becoming increasingly difficult to remember what all the fuss was about. That Rear Admiral John Poindexter, President Reagan's national-security adviser, and Lieutenant Colonel Oliver North, a member of his staff, were at the center of a coordinated effort to deceive Congress and contravene its laws; that they sold arms to Iran and conducted other secret operat ' ions without congressional oversight; that they funded the Nicaraguan resistance partly by soliciting funds from foreign governments-that events so threatening to the Constitution and to representative democracy ever really took place seems less and less believable. Former President Reagan, for one, has publicly professed not to believe it. Last February, in his deposition for the Poindexter trial he stated, "To this day, I don't have any information or knowledge that ... there was a diversion." A few months after Mr. Reagan made this remarkaable statement, Admiral Poindexter, convicted of lying to Congress, was sentenced to six months in prison. The year before, Colonel North, convicted of falsifying and destroying records and accepting an illegal gratuity (a security fence), had received a sentence of two years' probation, twelve hundred hours of community service, and a fine of a hundred and fifty thousand dollars. (Both cases are now being appealed.)

The immediate party affronted, of course, was Congress: not only did the Reagan Administration officials deceive Congress and break its laws but, more ominously, they successfully circumvented its most important power -- that of the purse. And yet if the aftermath of Iran-Contra seems inconclusive, it is Congress that must shoulder most of the blame. Only Congress had the resources and the authority to carry on a comprehensive investigation of the affair, and to consider the constitutional issues it raised. But the televised hearings in the summer of 1987 showed a Congress that was still divided over the Contras, was reluctant to press the Administration to make available crucial documents (many of which remain classified to this day), and, in general, seemed afraid to challenge a popular President on a matter that, if pursued to its conclusion, might lead to the voting of articles of impeachment. By the time the investigation was turned over to the independent prosecutor, the grave constitutional issues raised by Iran-Contra had been reduced to questions like whether or not Oliver North paid for his security fence -- that is, to questions about the scattered, petty doings of a handful of overzealous Presidential aides.

The savings-and-loan affair is likewise being ascribed to a few dishonest, greedy people. Before the Iraqi invasion of Kuwait provided a useful diversion, politicians were scrambling to pin the blame for the S. & L. problem on the other side: Democrats complained of political favoritism and "insider access" (a code word for "Republicans") and pointed to the alleged improprieties of Neil Bush, the President's son; Republicans criticized influence-buying and "special interests" (a code word for "Democrats"), and pointed to the fallen Speaker of the House, Jim Wright. In the meantime, some members of Congress were returning contributions they had received from savings-and-loans-institutions that, collectively, have made political contributions of more than ten million dollars over the last decade. But giving back campaign contributions doesn't address the causes of the savings-and-loan crisis, and all the finger pointing of the Democrats and the Republicans obscures the fact that the laws that made it possible for the savings-and-loans to lose hundreds of billions of dollars of their depositors' money were written and passed by a Democratic Congress, with strong support from members of both parties, and signed by a Republican President. All the talk of crime and fraud and "S. & L. kingpins" obscures the fact that most of the money lost in the scandal was lost by savings-andloan directors who acted well within those laws. And all the talk of "special interests" obscures the fact that when some of the institutions had already lost hundreds of millions of dollars, and federal regulators wanted to close them down, their directors knew that precious time could be bought by making the right-sized contribution to elected officials of one party or the other-or, sometimes, both.

The essence of the savings-and-loan scandal is not fraud or corruption, or even influence-buying; it is that elected officials were willing to stand by and allow large-scale swindling of their constituents. Though many people saw the debacle approaching, no one in a position of power seems to have had any interest in preventing it. Indeed, if the savings-and-loan crisis and the fantastic looting of the nation's treasure which occasioned it prove one thing, it is that the public officials we elect have become -in large part because of the way we elect them-utterly incapable of defending the public interest, or even of recognizing what the public interest is.

Both Iran-Contra and the savingsand-loan scandal can be traced to longstanding problems-the former to the struggle between Congress and the executive branch over the conduct of foreign policy, the latter to the increasingly corrupting methods that public officials use to fund their campaigns. But the idea that the system itself has problems -that the perpetual fund-raising associated with campaigns has made our politics venal and uncompetitive and our politicians increasingly timid, and that real and sweeping change is needed-has few champions among the people who are in a position to do something about it. Change would require self-scrutiny, which would be painful, even politically dangerous. It's much more convenient to reduce our political crises to the evil deeds of a few isolated figures (Oliver Northi with his shredder; Charles Keating, with his realestate schemes), and to confine reform to the task of putting away the latest crop of villains -- a never-ending task that merely punctuates our scandals rather than resolves them.




© 2017 Mark Danner