On January 28, 1986, as millions watched on television, the space shuttle Challenger exploded soon after liftoff, killing all seven crew members. President Reagan canceled his State of the Union address and, instead, gave a speech soon afterward from the Oval Office eulogizing the dead astronauts in lyrical fashion, quoting the poet John Magee Jr. in saying that the crew had “‘slipped the surly bonds of Earth’ to ‘touch the face of God.’”1 Reagan’s words comforted a shocked nation. This was Reagan near the acme of his reign as America’s ceremonial head of state, a height he reached even as his grip on government policy faltered. Later that year, in July, Reagan presided over a gala rededication of the Statue of Liberty, his favorite symbol of national pride, after extensive renovations that the nation’s schoolchildren had funded with their contributions. On Independence Day, the president appeared, against the backdrop of the famous statue, as a matching sculpture of patriotism, showcased on television screens beneath a huge fireworks display over New York harbor. The actress Liza Minnelli effused, “It’s what America’s about, for God’s sake. Our royalty is show business. We don’t get kings and queens.”2
Yet, soon after the summer of 1986, the symbolic king tumbled far and fast, amid scandal and growing public discontent with conservative rule. In November, the Democrats took control of the U.S. Senate, while maintaining a firm grip on the House. “The Reagan revolution is over,” Tip O’Neill crowed.3 When the young conservative David Brock arrived in the capital in the fall of 1986 to work at the Washington Times, he saw that “the conservative era ushered in by Ronald Reagan’s election was fading fast.”4 A few days before Christmas, Lou Cannon, Washington’s foremost expert on Ronald Reagan, wrote, “All the glitter is gone now, all the magic lost.”5 Away from Washington, on Wall Street, the sense of an impending end to the go-go years of the 1980s was palpable. “Quick, just give me my money while there is still some left,” wrote Michael Lewis, who worked for Salomon Brothers at the time. “That was the general sentiment in the air at the end of 1986.”6 A television special, Reagan’ s Way, set to celebrate the president’s seventy-sixth birthday in February 1987, was canceled due to a lack of advertisers, all “because of the Iranian thing,” remarked the show’s intended distributor.7 But it was not just “the Iranian thing.”
A manifold crisis enveloped the “Reagan revolution” from late 1986 through 1988—not just a crisis of conservative governance but a crisis of legitimacy for conservatism as a philosophy and movement. Conservative cadres, from lawyers to clergymen to publicists, had presented themselves as a new ruling elite, equipped not only with ideas for reinvigorating the United States but also with a moral compass that would command authority and forge social unity. The pillars of Reaganism included conservative Christianity and reverence of wealth, the latter often taking the form of cheerleading for financiers. Each of these pillars suffered major blows and showed signs of cracking during the crisis that commenced in late 1986. Less than two weeks after early November’s one-two punch of the Iranian arms-sales revelations and the election returns, Ivan Boesky, the high-flying Wall Street arbitrageur, pled guilty to extensive insider trading, and it was revealed that he had cooperated extensively with prosecutors, implicating other figures in American finance.8 A meltdown of the nation’s savings-and-loans would, like the Wall Street scandals, show that the conservative program of loosening the bonds of regulation and social convention over the economy’s financial sector had led to corruption and havoc. Conservative evangelists, for their part, were brought low by tawdry sex and corruption scandals. Just as damaging to the politicized version of conservative Christianity was the outcry over the government’s failure to respond to the exploding AIDS crisis. The Reagan administration’s slowness to address HIV/AIDS in any serious way seemed rooted in a religious condemnation of homosexuality. Surgeon General C. Everett Koop’s forceful response to this challenge gave conservatives a chance to regain moral standing, yet Koop’s abandonment by fellow conservatives wasted that chance. By the late 1980s, the authority of conservatism, in both the realms of economics and simple morality, was hobbled.
Running throughout this period, like a polluted stream that could not be stopped, was the Iran-Contra scandal, which further impaired the Reagan administration’s capacity to govern. The televised hearings of an Iran-Contra congressional investigating committee in the spring and summer of 1987 made for captivating political theater, as Oliver North and others got their chance to tell their story in public and made the most of it. But despite North’s transformation into a folk hero of military patriotism, the scandal would not go away, and Reagan could not fully recover. Reagan escaped impeachment, but at great cost to his pride—and his power. To save his job, he had to accept a new myth in place of an old one: the legend of Reagan’s incompetence replaced the dented belief in his special political prowess.
The November 1986 elections put Republicans back on their heels. Twelve Republican U.S. senators brought to Washington on Reagan’s coattails in 1980 had gone up for reelection, and six of them were turned out after a single term. Conservatives Jeremiah Denton of Alabama and Paula Hawkins of Florida lost to seasoned opponents, Denton to U.S. Representative Richard Shelby, the sort of shrewd moderate white Democrat who remained competitive in Southern elections throughout the 1980s, Hawkins to a popular liberal governor, Bob Graham. Democrats made a net gain of eight senators, enough to secure a firm majority of 55–45. As 1987 approached, a new Democratic leadership team in the House also prepared to challenge the president forcefully. Jim Wright of Fort Worth would replace O’Neill as House Speaker. A preacher during his teenage years, Wright was immediately identifiable by his arching, bushy eyebrows and a tight smile betraying a taut, aggressive manner. He was feared by David Stockman as a “snake oil vendor,” and both Wright’s populist streak and his communication skills came to the fore as he reached his ambition’s summit.9 Soon after becoming Speaker, Wright engineered passage of a new clean water bill by a vote of 306–8. Reagan vetoed it, and Congress overrode his veto. Wright moved on to steer a highway spending bill, aid to the homeless, and a bill punishing unfair trade practices through the House, all against Reagan’s wishes. After Reagan held a press conference in October 1987, in which he made a series of false statements, Wright went over the transcript carefully. The president said he was frustrated that he had sent a budget to Congress, which had “simply put it on the shelf and refused even to consider it.” In fact, his budget had received votes in both chambers, garnering a total of forty-five supporters. Wright told his Democratic colleagues, “I’m trying to get the public to understand this son of a bitch is a liar.”10
Wright was a formidable parliamentary foe, but his ability to marshal forces against Reagan was enhanced in 1987 because the bedrock governing philosophy of Reaganism—that the pursuit of economic self-interest was the key to national restoration and that government should unshackle the private sector—was in trouble. The savings-and-loan (or thrift) industry had been on the rocks in the early 1980s, obligated to keep to conservative, low-earning investments and increasingly unable to compete for retail customers with banks that were offering high–interest rate checking accounts. The political system’s response was to remove various restrictions from the thrifts. Soon they were playing recklessly in the bond and real estate markets. Individuals, previously faced with legal limits on how big an ownership stake they could hold in thrifts, now could take control, and some fancied themselves grandees of development and finance. The most notorious would be Charles Keating, who ran Lincoln Savings and Loan, based in Irvine, California, and eventually took his thrift’s depositors down the bankruptcy hole with him, in the process sullying the reputations of five U.S. senators who, at Keating’s request, met as a group with Edwin Gray, chief regulator of the thrifts, in 1987 and told him to back off from Lincoln.11 The “rental” of the Congress through contributions from thrift operators was blatant. The major thrift deregulation bill, the Garn-St Germain Act of 1982, was mainly the work of U.S. Representative Fernand St Germain, Democrat of Rhode Island, chair of the House Banking Committee. St Germain, a man of humble origins, lived far better than his congressional salary warranted. People who could be affected by legislation before the Banking Committee cut him into lucrative business deals. This kind of thing was nothing new on Capitol Hill; it was what the writer George Washington Plunkitt had called “honest graft,” as it broke no law. But rarely did it have such costly results.12 Wright would eventually cause himself trouble with his own advocacy on behalf of Texas thrifts, but until his own downfall (see chapter 13), the thrift crisis strengthened his hand as Speaker by renewing a conviction, in Congress and among the public, of the need for government regulation.
Nothing seemed to help the savings-and-loans. In March 1985, Ohio’s governor, Richard Celeste, declared a bank holiday in his state, reminiscent of actions taken in the 1930s to stem bank failures, after a big Cincinnati thrift went bust.13 Official Washington watched events nervously. By the start of 1987, the Federal Savings and Loan Insurance Corporation, which guaranteed depositors payment up to $100,000 from the U.S. government when thrifts went bankrupt, was insolvent.14 The magic of a free market in finance was no magic at all for these institutions, which had, for decades, played a big role in financing home construction and mortgages for a growing middle class. The nation’s taxpayers eventually would pay almost $124 billion—more than the tax revenues that Reagan had raised with TEFRA in 1982—to clean up messes created by savings-and-loan officers who treated the thrifts’ assets like casino chips, and who in many cases simply looted the thrifts to support lavish personal expenditures.15 Much to their credit, under Presidents Reagan and George H. W. Bush, Justice Department personnel would prosecute 1,100 individual thrift officers, securing over 800 convictions, many of which led to prison terms.16 But the deeper responsibility lay with the politicians of both parties who, prodded either by avarice or by ideology, urged deregulation as a cure-all.
The theme of corruption played ever louder. During Reagan’s first term as president, the idea of cashing in on connections had encountered little resistance. Now, even as economic expansion continued, such behavior received public censure. Michael Deaver—like St Germain, a man of modest background—grew to crave wealth as he served the Reagans and observed the luxury of their social set. Wine-tasting outings in the mid-Atlantic region were favored recreations of his during his White House service. Like Baker, he left the White House at the start of Reagan’s second term, but unlike the wealthy Baker he departed government service entirely, to begin a lobbying business in Washington (which he called a “consulting” business in an ill-fated effort to skirt restrictions on lobbying by past White House officials). In 1987, Deaver was indicted for perjuring himself in his testimony before a grand jury.17 He was later convicted and administered a suspended prison sentence. Lyn Nofziger, formerly the head of the Office of Political Affairs for Reagan (meaning that he ran the White House’s patronage shop), ran into similar trouble. He lobbied improperly for Wedtech, a military contractor in the Bronx that Meese also championed, leading to a new probe into the attorney general’s dealings. Ultimately, two U.S. Representatives from New York, Mario Biaggi and Robert Garcia, as well as Stanley Friedman, the Bronx borough president, were convicted and imprisoned for bribery and extortion in the Wedtech scandal.18
Attorney General Meese finally escaped his troubles only by announcing he would resign in July 1988, before James McKay, the second independent counsel to investigate him, was to release a large report on Wedtech and Meese’s failures to pay his taxes, as well as other matters. Meese declared himself “completely vindicated,” which was untrue. McKay determined that Meese was guilty of breaking the law, but did not recommend indictment, perhaps thinking that the best solution to the problem had already been found.19 In March 1988, a scene played out in the White House that seemed to symbolize the exhaustion of Reaganite energies at the twilight of the Reagan presidency. Arthur Burns, the number-two appointee at the Justice Department, and William Weld, head of the department’s criminal division, met privately with President Reagan. Burns and Weld intended to resign in protest over Meese’s leadership but wished first to explain directly to the president how profoundly Meese was damaging the government. As Weld explained that, if it were up to him, Meese would be prosecuted, Reagan fell asleep.20 The president let Meese decide his own fate, and Meese, at last, had had enough.
The corruption scandals that overtook official life in the second half of the 1980s were bipartisan, but they called into question the basic creed only of one party, the Republicans. Biaggi, Garcia, and Friedman were Democrats. Four of the “Keating Five” were Democrats, as was St Germain. With the Democrats still ruling the U.S. House, and assuming control of the Senate in 1987, they collected large sums from business interests. When Representative Tony Coelho of California ran the fundraising effort for the Democrats in the lower chamber, he made the strongest pitch yet to corporations: the smart money would go to the people in charge on the Hill; there was no reason to steer contributions to Republicans just because they seemed more avidly pro-business. Timothy Wirth, an ambitious House Democrat from Colorado, introduced a bill in 1985 that would ban the practice known as “greenmail,” in which a speculator bought up a company’s stock, threatened a hostile takeover, and agreed to relent in exchange for a fat buyout. The practice was destructive; it was simply ransom paid by companies with valuable assets. The investment banking firm of Drexel Burnham Lambert, with prominent green-mailers on its client list, started giving money to Democrats, including almost $24,000 to Wirth’s successful effort to move up to the Senate (which marked the end of his antigreenmail effort). Drexel’s political action committee contributions jumped from $20,000 in 1984 to $177,000 in the next election cycle. The biggest recipient of Drexel money, however, was Senator Alfonse D’Amato of New York, a Republican. Known as “Senator Pothole” to his constituents for his attention to local matters, he was called “Senator Shakedown” in Washington.21
New York City, like Washington, proved a nest of corruption, and it was here that the fervent Reaganite belief in the merit of corporate and financial America’s biggest winners—the idea that Boesky and others deserved their massive wealth—was set to explode. The instrument of Nemesis, the mythic embodiment of punishment for hubris, would be the U.S. attorney for the southern district of New York, Rudolph Giuliani. Giuliani compiled a dazzling record of indictments and convictions during his tenure, which began when he left the third-ranking position in Reagan’s Justice Department to take what was, technically, a demotion. But Giuliani wanted to be at the world’s media center, which he also knew to be a major nexus of graft and crime—the writer James Traub called New York in the 1980s “the sort of gorgeously foul swamp that prosecutors live for”—awaiting its Savonarola.22 Admirers saw in Giuliani a zealous moralist who displaced his youthful priestly ambition onto powerful lawbreakers. Detractors saw a nakedly ambitious showman who maximized publicity with high-handed tactics and questionable legal methods. Giuliani won wide praise for taking on and beating organized-crime “family” heads and criminal officeholders. Then he turned his sights on Wall Street insiders, who were violating basic SEC rules by using privileged information to make millions in the stock market.
The first crack came with the indictment of Dennis Levine, an M&A specialist at Drexel and the organizer of a network of insider traders with secret bank accounts where they stored their illicit returns. He pled guilty to felony crimes in June 1986. Levine could be dismissed as a rogue trader, not a big fish. But Boesky, fresh from his triumph at Berkeley (see chapter 7), could not be. Investigators had uncovered his wrongdoing first, but had kept their discovery secret; he had led them to Levine and agreed to record their conversations. In December 1986, only six months after his “Greed is all right” speech, Boesky made his guilty plea. Now one of the great new names of unfettered capitalism had been ruined, his success suddenly seen as the result of rigging the game, not outplaying competitors. Boesky had extensive dealings with Michael Milken, the dominant force in the junk bond market, which soon would unravel under new scrutiny. In 1986, Giuliani’s staff raided Drexel’s New York offices and found recordings of telephone conversations dating back two years. “You’re a sleaze bag,” said one trader to another, after they had arranged a ruse to hide insider trading. “Welcome to the world of being a sleaze.”23 This term, “sleaze”—from the earlier adjective sleazy, which originally described cheap and slippery fabrics, but which had become a metaphor for moral shabbiness—had come into use to refer to corrupt or dirty tactics and to those who used them.
A panic rose among financial professionals as 1987 unfolded. Subpoenas and investigations spread from one financial firm to another, including Drexel, Salomon Brothers, Shearson Lehman Brothers, and Kidder Peabody. In February, Giuliani garnered worldwide attention when Martin Wigton, a Kidder vice president, was arrested dramatically in his workplace; as far away as Australia, a newspaper exulted over “Wall Street Yuppies in Handcuffs and Tears.”24 On top of the insider-trading inquiries came a burst of arrests of Wall Street employees on charges of selling cocaine, often in exchange for private financial information or client lists.25
Talk of congressional action against leveraged buyouts suddenly erupted. Quickly, in October, investors fled from stocks whose price had jumped on takeover rumors. The Dow Jones Industrial Average, which had reached an all-time high of over 2,700 during the summer, dropped 250 points in three trading days. The following Monday, October 19, was the worst day of all, when anxiety that had built up over the weekend found release. The market fell 508 points, a record in percentage terms for a single day, worse than any in 1929. Milken heroically stanched the bleeding, getting his stable of buyers to mop up failing stocks and bond issues. But many smaller investors lost out in crowd selling and had no reserves with which to regain their positions and ride out the wave. As always happened, when a bull run came to its inevitable end, many were rudely disillusioned of the idea that finance was a nonstop money machine.26
The cultural transformation of Wall Street raiders and traders from heroes to villains was complete by the end of 1987, capped by the premier in December of Oliver Stone’s film Wall Street. Filled with stereotypes and clichés, the movie nevertheless etched a vivid portrait of greed and abuse of position. In its most famous scene, obviously playing off Boesky’s speech at Berkeley, the lead character, the reptilian Gordon Gekko, gives a speech to a shareholder meeting as he orchestrates a hostile takeover. Gekko explains that the company’s management has gotten fat and lazy, feathering its own nest and failing to maximize profits. He continues, “The point is, ladies and gentleman, that greed—for lack of a better word—is good.”
Greed is right.
Greed works.
Greed clarifies, cuts through, and captures the essence of the evolutionary spirit.
Pretentiously, Gekko evokes a social Darwinist ethics, with avarice the key to rejuvenation for both individual corporations and “that other malfunctioning corporation called the USA,” as he concludes on a political note. But Gekko is shown to be ethically hollow even on his own terms. His advantage in the markets comes not from superior talent or even the ruthless pursuit of efficiency but from cheating. As he says to his young protégé in a more honest moment, “The public’s out there throwing darts at a board, sport. I don’t throw darts at a board—I bet on sure things.” Pilfering privileged information and violating the law are among the true keys to his supremacy. And while he tells the shareholders, “I am not the destroyer of companies. I am the liberator of them!” this turns out to be a lie, as his takeover targets, far from becoming newly competitive, are consumed in asset sell-offs.27 On December 20, Ivan Boesky was sentenced to three years in federal prison. Milken’s turn would not come until 1990, but a long watch on his fate had already commenced.
If Wall Street insiders, savings-and-loan swindlers, and crooked politicians came to personify sleaze in the 1980s, their counterparts in the conservative movement that started collapsing in 1986 embodied another slang expression of the era: glitz. Stemming from the German word for glitter, glitz was a tastelessly flashy display, meant to convey wealth and excitement but barely diverting attention from a basic shallowness. Show business and expensive discos were glitzy. But so, perhaps oddly, were some of the Christian evangelists who presumably supplied the moral ballast for a conservative movement that bowed to the shrine of wealth. Many of the leading activists among evangelical Christians, like Jerry Falwell, comported themselves soberly. But other preachers, such as Paul and Jan Crouch and Jim and Tammy Faye Bakker, were more ostentatious. To homes across America, through Christian television networks, they beamed a vision of Christian luxury, complete with chandeliered mansions and landed estates, accented with extensive wardrobes of suits and dresses meant to denote the lives of country squires and ladies. The Bakkers’ show was called The PTL Club; PTL stood for both Praise the Lord and People That Love. Trained in the Pentecostal Assemblies of God church, the Bakkers preached an ecumenical gospel of wealth and ease. God would provide for those who came to Him. They were more universal in their message of love than some; Tammy Faye Bakker stood out in the late 1980s for her embrace of gay AIDS sufferers and her tearful criticism of Christians who shunned those stricken with the plague. The Bakkers ended their broadcasts by saying, “God loves you, He really, really, does.”
But Jim Bakker defrauded his contributors and siphoned millions from his businesses for himself and his wife, and their tacky style made them easy fodder for their critics. The journalist Frances Fitz-Gerald wrote, “They personified the most characteristic excesses of the nineteen-eighties—the greed, the love of glitz, and the shamelessness. . . . the Bakkers’ version of the prosperity gospel could be seen as the cargo cult of junk-bond capitalism.”28 By 1987, the press, particularly the Charlotte Observer, and federal investigators were catching up with to Jim Bakker’s games. A palatial apartment the Bakkers kept featured gold-plated bathroom fixtures. A private jet was chartered solely to fly their wardrobe from one lavish home to another. Tammy Faye joyously announced on air that she had bought Jim two giraffes for his birthday. Jim Bakker’s financial chicanery got him convicted and sentenced to forty-five years in prison in 1989.
But this scandal alone did not make him an object lesson in moral hypocrisy. Rather, what brought Bakker true infamy was the bombshell news, which broke in March 1987 following his sudden resignation as head of PTL, that he had paid $265,000 in PTL funds to a former church secretary, Jessica Hahn, to prevent her from telling the world that Bakker and another pastor had coerced her into having sex with them in a Florida hotel in 1980. Bakker admitted having had a sexual “encounter” with Hahn.29 Christian conservatives rushed to stay abreast of the vehement public anger now directed at the Bakkers. In disgrace, Bakker agreed to allow Falwell to step in temporarily as PTL chairman.
Falwell had broader concerns than the stability of PTL. He was worried that the Bakkers were damaging the image of television preachers and of Protestant evangelicals in general. Evangelical Protestants, since 1980, had felt themselves newly empowered, and this perception—even if it exaggerated the sway of preachers like Falwell—was widespread. Falwell had had a starring role in the 1984 Republican National Convention in Dallas, offering the main benediction from the podium, appearing to give his blessing to one political party. Falwell quickly took control of PTL and pushed the Bakkers and their allies out for good. He charged Jim Bakker with a long history of “homosexual problems”—in addition to his alleged heterosexual predation against Hahn—as well as financial dishonesty. Amid a public duel between the preachers, conducted largely on television, Falwell said, “What Jim Bakker needs to do, he needs to come clean about Jessica Hahn and repent. That little girl was injured for life by that terrible travesty in Florida. He has to come forward and say, ‘Yes I did it,’ and ask God’s forgiveness.”30 For television preachers, viewership and contributions were down across the board.31
In early 1988, Jimmy Swaggart, an Assemblies of God television evangelist like the Bakkers, worsened the crisis. Swaggart had attacked the Bakkers over doctrine and spread the rumors about Jim Bakker’s sexual past. Swaggart’s active support for right-wing militias and death squads around the world made him a more overtly political figure than the Bakkers. But he, too, was undone, it seemed, by sexual misbehavior. He admitted the truth of accusations that he had had sex with prostitutes, appearing on his television show and, his face contorted, crying to the cameras, “I have sinned against You, my Lord, and I would ask that Your precious blood would wash and cleanse every stain until it is in the seas of God’s forgiveness.” This display quickly became a touchstone of popular culture, endlessly parodied and mentioned. A reputation for sleaziness was spreading, indiscriminately, among television preachers. “When the Godly Make Us Vomit,” read one headline about Swaggart.32 In the decentralized world of American Protestantism, Swaggart was an independent operator, a true entrepreneur—and neither Falwell nor anyone else could control him.
Almost exactly in step with the implosion of evangelical celebrity preachers, a different ethical drama played out that also showed movement conservatism coming unglued in public. This was the havoc that the long-incubating HIV/AIDS crisis finally wreaked in the body politic. This disorder, triggered in part by activism from an unlikely source, Surgeon General Koop, and in part by new forms of agitation by advocates for gay rights and the interests of people with AIDS, made the ostrich-like stance of the Reagan administration an object of wide criticism. Koop was a fundamentalist Presbyterian immediately identifiable by the gold-trimmed uniform he wore—reviving a long-abandoned custom of surgeons general, who headed the U.S. Public Health Service—and by his long gray beard, recalling the biblical prophets as depicted in 1950s Hollywood epics. He boasted long involvement in antiabortion and biblical prophecy enterprises when Reagan nominated him in 1981, and his confirmation was delayed by liberals who mocked him as “Dr. Kook.” But in 1985, after Rock Hudson died, the president made a private speech saying he planned to ask the surgeon general for a report on AIDS, and Koop took this signal and ran with it. In the fall of 1986, Koop presented a finished report as a kind of fait accompli to the White House’s Domestic Policy Council, and gained approval to publish a brochure about HIV, which he did in October.33
Koop’s materials dispelled prevalent myths about HIV, emphasizing that the virus could not be contracted through casual physical contact. Koop recommended sexual monogamy and avoiding risky behaviors, which he clearly identified as needle-sharing, anal sex, and promiscuity. But the incendiary points were these: Koop prescribed condom use and wrote, “Education about AIDS should start in early elementary school and at home,” adding, “The threat of AIDS can provide an opportunity for parents to instill in their children their own moral and ethical standards.”34
The White House, somehow, did not see the reaction coming. Almost all of this information was beyond what most American newspapers considered polite discussion in 1986. To many conservative Christians, the report was revolting and suggested Koop had lost his moral bearings. Koop insisted that he must separate his personal moral beliefs from his public-health recommendations. He added, “My position on AIDS is a very strong pro-life position. I am trying to save lives.”35 Yet he impressed many as one who had changed in the face of a human disaster. Liberals hailed this turnabout, while conservatives saw a turncoat. One employee in the federal government who had worked with Koop said that in the past, “He would make remarks about gays, ugly stuff—‘homo this’ and ‘homo that.’” Within a year of his report’s release, he seemed transformed, speaking often of the humanity of AIDS sufferers and turning his preachments against those who spurned or blamed the victims of the disease.36
Conservatives rallied to quarantine Koop within the Reagan administration and the Republican Party. Phyllis Schlafly deplored his “fronting for the homosexuals,” and the antiabortion March for Life took back an award. Three Republican presidential candidates pulled out of a long-scheduled dinner meant to honor Koop. Secretary of Education William Bennett, a burly political brawler who had become a spokesman for conservative morals in the administration, and White House aide Gary Bauer—the types Koop later described as “political appointees who placed conservative ideology above saving lives”—railed against Koop’s lax morals and led the charge in the executive branch for a presidential endorsement of a new conservative solution for the health crisis: mandatory universal testing for HIV (now that a test existed).37 Koop, with other public-health professionals, saw this response as a recipe for discrimination and paranoia, and feared it would drive high-risk Americans away from medical care for fear of being labeled plague carriers. They called for legal protections against bias toward those with HIV. In 1986, the California legislature twice passed such antidiscrimination measures; twice the governor, Republican George Deukmejian, vetoed them.38
Finally, it seemed, Reagan could keep his silence no longer; he would have to choose sides in the conservative civil war over HIV, in order to end the political carnage. At the end of May 1987, he addressed the Third International Conference on AIDS, which took place in Washington. But the speech did not calm the waters. Reagan made headlines by uttering the word AIDS—only the second time he had done so publicly. But he repudiated Koop’s departures from conservative wisdom. The president simply emphasized the need for moral education and the attractiveness of abstinence advocacy; the mantra of “Just Say No” could be extended from drugs to sex. Reagan would support neither sex education nor condom use. He also endorsed a limited program of testing. Some of the assembled researchers and activists booed him.39 The president announced he would appoint an AIDS commission to compose policy prescriptions.
With Reagan hoping that a smile and conservative bromides would let him ride out the storm over AIDS, the wave of heightened public consciousness washed over him, leaving him behind. Gay-rights advocates and AIDS activists pressed ahead with interventions both temperate and unruly. At least two hundred thousand Americans traveled to the capital on October 12, 1987, to join a March on Washington for Lesbian and Gay Rights. The existential crisis of gay men had spurred a new mass-based initiative aimed at securing civil and human rights for all gay Americans—women and men—who had resolved not to keep their identities secret. Just before the march, two thousand same-sex couples, whose relationships enjoyed no legal recognition, gathered to exchange symbolic vows of commitment, underscoring the gay rights movement’s gravitation toward a demand for recognition as Americans whose sexuality, in civic terms, was incidental.40 On the National Mall, a new form of commemoration for AIDS victims came to national attention: the AIDS Quilt, organized by the NAMES Project, the inspiration of San Franciscan Cleve Jones. Those who had lost a loved one to AIDS could fashion a cloth rectangle to memorialize the dead, in whatever manner they wished. In the years to come, the Quilt would become massive, comprising forty-four thousand panels by 2002, and would be displayed all over the country.41 Like the Vietnam Veterans Memorial, dedicated in Washington in 1982—which simply listed the names of the dead on somber black granite slabs, and invited visitors to place their own interpretation of the war’s meaning on the site—the AIDS Quilt gripped the imagination of a grieving country. Even in 1987, when only 1,920 panels existed, it took three hours to lay them on the ground. Quilting epitomized American homespun culture, and its evocation was meant to appeal to Americans who had never been moved by calls for gay rights or AIDS awareness. Jones remarked (exaggerating for effect), “Every family has a quilt; it makes them think of their grandmothers. That’s what we need: We need all these American grandmothers to want us to live, to be willing to say that our lives are worth defending.”42
It was not all quilts and grandmothers, however. A lot of AIDS activists and gay-rights advocates were very angry—at all levels of government and at religious conservatives. ACT UP, which stood for AIDS Coalition to Unleash Power, led the way in venting that anger. Larry Kramer, the original angry AIDS activist and the main source of the concept for ACT UP, had penned a stream of vituperative, often profane articles about the inadequacy of America’s responses to the HIV/AIDS crisis since the early 1980s. Kramer, estranged from AIDS advocacy groups that lobbied government officials, had had a huge success on the New York stage in 1985 with his play The Normal Heart, a barely fictionalized account of his journey through the political warfare over AIDS.43 But his outrage was undimmed. He wanted people to become so obstreperous that their demands—for greater research funding and for readier access to experimental drugs—could not be ignored. ACT UP was a group for people who wanted to disrupt business as usual, which they did: at the New York Stock Exchange, at FDA headquarters, and, most controversially, in 1989, at a mass in New York’s St. Patrick’s Cathedral, led by Roman Catholic Archbishop John Cardinal O’Connor, an unrelenting foe of homosexuality, abortion, and condoms.44 Some blamed ACT UP for alienating the straight public. But ACT UP confronted the general public with the desperation of the AIDS crisis, and the message that AIDS sufferers and their comrades were furious with those in power, like no one else had. Borrowing symbolism first deployed by gay West German radicals in the 1970s, they made their emblem the pink triangle that gay men had been forced to wear under Nazi rule—inverted from the downward-pointing direction of the original, and accompanied by the unforgettable script “Silence = Death.”45 ACT UP succeeded in its quest to make AIDS impossible to ignore. Its members were perfectly willing to sacrifice their popularity if, in the process, they could extract more forceful action on the crisis from the government and could reach the hearts of Americans with their message of urgency.
Even as Reagan was booed by scientists in May 1987—a potent signal of his lost standing—Congress had begun to stage a very public inquiry into the original scandal of the 1986–1988 period, the Iran-Contra affair. The hearings of a special Senate–House investigating committee, shown on television for hours daily from May through July, were the real broadcast spectacle of 1987. Over 70 percent of Americans watched Oliver North’s testimony in July, which was broadcast live, in the daytime, by all major networks, recalling the drama of the Watergate hearings.46
North ended up an unexpected winner in the media drama of Iran-Contra, partly because of flawed tactics and strategy by Democratic leaders. The twenty-six committee members, seated behind two banks of raised tables, looked down on witnesses like a Roman tribunal, creating sympathy for those undergoing questioning. In fact, while the star witnesses were, in theory, vulnerable to indictment by the independent counsel, Lawrence Walsh, the committee, in return for testimony by North and others, gave them partial legal immunity, over Walsh’s protests. North’s truculent lawyer, Brendan Sullivan, drove a hard bargain, specifying the exact times, terms, and duration of North’s testimony. He was able to do so because the committee set itself a ten-month limit to produce a final report in order to avoid the appearance of politicizing the 1988 election. The clock was ticking, and Sullivan’s dilatory tactics were rewarded. While the GOP leaders in the Senate and House selected members for the committee who uniformly supported Reagan’s Central America policy, the Democrats, concerned to appear evenhanded, picked both opponents and supporters of the Contras, and excluded leading critics of Reagan’s policy. Of the eleven senators on the committee, only three opposed Contra aid. Of the fifteen House members, all six Republicans supported Contra aid, as did three of the nine Democrats, creating a pro-Contra majority of nine to six.47 Public opinion, by contrast, continued to oppose Contra aid by a wide margin.48
Committee Democrats seemed of two minds about how to approach the president’s involvement in his own policies toward Nicaragua and Iran. They wanted to saddle Reagan with ultimate responsibility. But they also spotlighted the shocking and absurd escapades that North and his confederates had organized in carrying out Reagan’s policies. This took the spotlight off Reagan and bolstered the narrative of zealous subordinates run amok. Democrats also decided from the start not to take up the question of impeachment. In part they calculated that Reagan, despite his sagging poll numbers, retained a reservoir of goodwill among the public, and that the expenditure of political capital needed to pursue impeachment would prove more costly than the gain. On the path toward impeachment lay uncertainty and risk. They also knew they had a Republican president on the ropes. Reagan had fired Donald Regan as his chief of staff in January 1987, hoping this would satisfy critics and bring order to his administration. This sacrifice did not call off the hounds, but Regan’s replacement with former Republican senate majority leader Howard Baker did. Baker quickly smoothed relations with Congress.49 To many Washington insiders his ascension marked the real passing of the crisis; the hearings would be a show for the public. As things stood, Democrats were empowered legislatively. Jim Wright recalled later in explanation, “We were getting everything we wanted here in the House.”50
North, the star witness, took his turn before the cameras in the second week of July, and threatened with his unbending defense of his actions to upend the hearings. At the NSC, North had worn business suits. For his testimony he donned his marine uniform, resplendent with ribbons won for bravery during his service in Vietnam, topped with a fresh military-style haircut. North sat erect and stared straight at his inquisitors, yielding them no moral authority even as he admitted conducting illegal operations, lying to Congress to cover them up, and then destroying uncounted incriminating public documents. He maintained that, at every step, he felt certain he was executing President Reagan’s wishes, an acknowledgement that seemed to jeopardize Reagan legally. Yet North also stated that Reagan never specifically ordered him personally to commit a criminal act, thus giving Reagan a degree of legal cover. North’s main defense of his unlawful behavior was simple and sweeping: “By their very nature, covert operations or special activities are a lie. There is great deceit, deception practiced in the conduct of covert operations. They are at essence a lie.”51 But, of course, those to whom executive-branch officials conducting covert operations are supposed to lie do not include the Congress. And North had run operations expressly forbidden by U.S. law. When Senator Daniel Inouye (Democrat of Hawai’i), the committee’s chair, a one-armed World War II veteran whose military exploits matched North’s, began to lecture North about the famous “Nuremberg principle” that men in uniform had a legal duty to disobey illegal orders, Sullivan interrupted Inouye and shouted him down.52
“Those of us who sat on the two-tiered dais could not fully appreciate the magnetism that North generated,” Senators George Mitchell and William Cohen (Democrat and Republican of Maine), both committee members, recalled afterward. “From a distance, North looked attractive in his Marine uniform and rows of medals, but thin and not particularly imposing. It was not until we slipped into the anteroom to drink coffee and watch the proceedings on the television sets there that we saw the dramatic transformation. His telegenic face filled the entire screen. His clear gray eyes (perpetually moist) reflected sadness, anger, sympathy. His voice was alternately soft and forceful, and it cracked at just the right emotional moment.”53 North made charged, often irrelevant declarations of his fealty to the president, his personal commitment to the Contras (whom he called the “Nicaraguan democratic resistance”), his willingness to go “mano a mano” with Palestinian terrorist Abu Nidal, and his fear for his daughter’s safety from the hands of vengeful evildoers angry over North’s effectiveness at thwarting their plans. He intended, he said, to tell the committee “the good, the bad, and the ugly.” North’s penchant for Hollywood clichés prompted comparisons with Reagan’s own stagecraft, and led many commentators to see in North a charismatic figure. They declared “Olliemania” a true enthusiasm. Senator Orrin Hatch of Utah, a conservative Republican, had said before North’s appearance that he found evidence that North had skimmed Enterprise funds for his personal use “sad” and “sleazy.”54 But after North’s debut, committee Republicans turned about-face and became the colonel’s fulsome admirers. Sullivan, meanwhile, whispered advice in North’s ear before North replied to questions and stacked piles of pro-North telegrams on the witness table during North’s testimony.
To some, North became a hero. Arthur Liman, the lead lawyer for Senate Democrats on the committee, on returning to the hearing room after a lunch break on North’s last day of testimony saw, to his dismay, that Senate policemen were lined up to have their photographs taken with a smiling North.55 For a time it appeared that North’s prestige might even extend to the Contras themselves. Those committee Democrats who opposed Contra aid seemed tentative; the pro-Contra pleadings by North and other witnesses went largely unrebutted. Representative David Bonior, a passionate opponent of Contra aid (and not a member of the committee), said in frustration, “I’ve been getting calls about the hearings from activists all over the country saying, ‘What the hell is going on?’ The idea was, if we stuck to process questions and constitutional questions, they were so important it would be easy to carry the day for us. We didn’t want to debate the policy itself. I’m not sure that was right. The House Republicans are all arguing the policy.”56 However, North’s popularity was easily exaggerated. One entrepreneur who produced thousands of “Ollie North” action figures had to eat most of his outlay, selling only a paltry few. By August, Olliemania, an expression of the traditional American attraction to military heroes—an attraction that had temporarily weakened during the 1970s—had subsided, and an opinion poll showed that almost two-thirds of the public considered North’s actions “more wrong than right.”57
When Poindexter, former national security adviser and navy rear admiral, a nuclear physicist with a low profile and a cold, uninviting manner, testified before the committee in mid-July, he sealed off any remaining avenue of approach to the president regarding the infamous “diversion” of funds from the Iranian arms sales to the Contras. Reagan’s safety on this one issue, by no means the most important one, gave his defenders an opening to assert that there was no “smoking gun” that could incriminate the president in any important way. Poindexter maintained that he had “made a very deliberate decision” not to discuss the diversion with Reagan and not to pass on a memorandum from North describing it, “so that I could insulate him from the decision and provide some future deniability for the President if it ever leaked out.”58 Poindexter’s audacity seemed to taunt and frustrate the committee. He may well have been lying about whether he had told Reagan of the diversion; he was, after all, openly admitting that his purpose always had been to falsify history and conceal presidential misconduct. There was no way to prove whether he was being truthful. Yet he harmed his credibility when he answered 184 different questions during his testimony with “I don’t recall” or some variation of that reply.59 This made him the champion of forgetfulness in the whole affair, but this was a measure only of degree. Other witnesses, both during the hearings and in later legal proceedings, also were afflicted with memory loss.
After the dust of the committee hearings settled, it was clear that North and Poindexter, as well as Richard Secord, North’s main contractor for delivering arms to the Contras and the Iranians, were scapegoats whose culpability drew fire away from the president. During the hearings they were careful, as noted earlier, in saying they could not confirm Reagan’s specific knowledge of their wrongdoing, aware that if they alienated Reagan’s supporters on the committee they risked retribution from Republicans determined to protect the president. But later they sang a different tune, complaining—in their own interest, to be sure, but still significantly—that they had taken the fall for the president. After Secord pled guilty to a single felony count in exchange for a suspended sentence in 1990, he stated angrily, “I think former President Reagan has been hiding out. I think it’s cowardly. I believed earlier and I still believe that he was well aware of the general outlines of the so-called Iran-Contra affair.” North published a memoir, Under Fire, in which he portrayed Reagan and George Bush as fully aware of the illegal Contra supply operation and the Iranian arms sales and argued that Reagan also knew of the diversion. “I am . . . convinced,” North wrote. “President Reagan knew everything.” The White House had claimed that when Reagan telephoned North to fire him, the president asked North to give “the entire truth” to investigators. North’s recollection was different. The president had said, “Ollie, you have to understand, I just didn’t know,” North wrote. North took this to be a cover story that Reagan was asking him to support.60
By summer’s end, congressional leaders, looking a bit like television producers who had lost control of their own show and knowing that the drama had passed its climax, girded for other battles. The looming fight was to be over Reagan’s nomination, announced in July, of Robert Bork, a well-known conservative judge, to replace the retiring Supreme Court justice Lewis Powell Jr. Senator Edward Kennedy made a harsh speech against Bork, signaling the administration that it faced a struggle. Kennedy declared:
Robert Bork’s America is a land in which women would be forced into back-alley abortions, blacks would sit at segregated lunch counters, rogue police could break down citizens’ doors in midnight raids, schoolchildren could not be taught about evolution, writers and artists could be censored at the whim of government, and the doors of the Federal courts would be shut on the fingers of millions of citizens for whom the judiciary is—and is often the only—protector of the individual rights that are the heart of our democracy.61
Bork, like many conservatives, derided the liberal Warren Court of the 1954–1969 years for supposedly inventing rights not found in the Constitution. He also had denigrated the Roe v. Wade decision of 1973, although he was coy concerning whether he would vote to overturn it. Kennedy’s implication that Bork would not have supported the unanimous 1954 Brown v. Board of Education decision, which outlawed racial segregation in public schooling, was the most savage blow against Bork’s reputation. If Kennedy’s statement was taken to mean that Bork would consider undoing the Brown decision, this was absurd. But beyond individual cases, Kennedy was arguing that judges tended to be relatively sympathetic or unsympathetic to the weak, and that Bork was one who would afflict the afflicted and comfort the comfortable in general. Bork insisted that he followed the “original intent” of the Constitution’s drafters, not present-day emotional tides and not the sympathy for the powerful of which Kennedy accused him. This “originalist” position echoed a series of speeches Meese had made as attorney general.62
Reagan fought and lost the Bork fight, and this result was another signal of how far both the president and the conservative movement had weakened compared to their earlier powers. Reagan may have thought that nominating Bork would revive conservative spirits, but instead it galvanized liberals, who mounted an impressive organizing effort that emboldened Senate Democrats. Bork’s efforts to save himself only helped sink his nomination. He appeared arrogant when testifying before the Senate Judiciary Committee, lecturing questioners whose expertise in the law he disdained. More viscerally, Bork made a poor impression. Republicans and Democrats alike had seen in the Iran-Contra hearings that, in the theater of politics, appearances mattered. To many, Oliver North had appeared a brave patriot, a leading man straight from central casting. In contrast, Bork, who, with his jutting red beard, now turning gray, affected a Mephistophelean look, proved to have little allure on camera. His glowering face and his dyspeptic, haughty manner won no one over. After the committee’s negative recommendation, the Senate rejected Bork, 42–58, by a bigger margin than any other judicial nominee in U.S. history.63
When Reagan sought television airtime for a speech defending Bork, the networks refused him. “Even had his speech been broadcast,” opined the liberal journalist Haynes Johnson, “there is no reason to believe it would have made the slightest difference. The public seems to have tuned Reagan out, just as the Congress increasingly treats him as irrelevant.”64 Reagan’s second choice to replace Powell, Douglas Ginsburg, withdrew his name in embarrassment following revelations that he had smoked marijuana while a professor at Harvard Law School. For an administration that deemed marijuana a “gateway drug” leading to harder stuff, this was a problem. On his third try, Reagan turned to the mild-mannered Anthony Kennedy, whom the Senate approved by a vote of 97–0. Yet the Bork struggle would be what everyone remembered from the fall of 1987. Conservatives invented a new verb, “borking,” to refer to character assassination.65 Liberals had no regrets, thinking Bork a genuine extremist and a partisan. In a final demonstration of Reagan’s loss of political control, in March 1988, Congress voted to override Reagan’s veto of the Civil Rights Restoration Act. Congress had passed the law with strong bipartisan support in order to reverse a Supreme Court ruling that had narrowed the application of federal civil rights laws to institutions that accepted U.S. government funding. No president had vetoed a civil rights law since Andrew Johnson during the Reconstruction era. Reagan had run his last election campaign, and he seemingly threw appearances to the wind. He said the law would “unjustifiably extend the power of the federal government over the decisions and affairs of private organizations”—the same reasoning that underlay Reagan’s opposition, in principle, to federal civil rights laws going back to the 1960s. Others in his party saw danger in this hostility to hard-fought compromise legislation on civil rights; they did not wish to antagonize women and senior citizens, in addition to African Americans and other nonwhite Americans, all of whom would be protected by the law. Seventy-three senators and 292 representatives voted to negate Reagan’s action.66
Aggressively conservative jurists, flamboyant conservative preachers, self-righteous Wall Street “masters of the universe” and lesser acolytes of unregulated finance, and champions of military confrontation in the Third World—all of them were in retreat by late 1987, along with the crusading conservative president to whom each group had looked as their liege. News reports of corrupt and improper dealings among political and social elites had come to seem normal, and continued throughout 1988. Now, many observers easily referred to the sleaze, the glitz, and the sanctimony of would-be conservative leaders of all kinds. The widely expressed passions for unrestrained capitalism and “traditional values” so characteristic of the early 1980s seemed outworn; now, each cause was on the defensive. By 1988, a widespread public yearning to turn the page on Reaganite conservatism was palpable. Whether the public was willing to embrace any alternative on offer was, however, another matter, a question that only further political competition would answer.