The Pardon of Richard Nixon and the End of American Accountability

Gerald Ford’s 1974 pardon of Richard Nixon may have cost him the reelection. It has, however, worn so well that Ford was a 2008 recipient of the John F. Kennedy Library’s Profile in Courage award. At the ceremony, Senator Ted Kennedy said that he had condemned Ford’s decision at the time, but that he had been wrong. A year ago, when I was writing about Ford for my second book, Picking Presidents, I agreed.

No one has ever deserved a pardon less than Nixon. The scale of his crimes has been largely forgotten, but they stretched far beyond the Watergate burglary, including tax fraud and the use of the IRS to harass his enemies. But I thought that Ford’s desire “to shift our attentions from the pursuit of a fallen President to the pursuit of the urgent needs of a rising nation” was powerful and persuasive.

I was wrong.

Since I wrote that chapter, I’ve realized something profoundly important. The country did need to move on from Nixon, but letting him go free meant not treating a sickness that has since been getting worse in American society.

Quite simply: America’s wealthy and powerful are increasingly rarely held accountable for their mistakes, or even their crimes.

As a result, they have become steadily more reckless and self-interested. As any parent knows, rules and norms that cease to be enforced cease to matter – and pardoning a former president was the clearest possible signal that the rules should not apply to the well-connected.

We can see lack of elite accountability and its effects in the news every day. There’s no better example, of course, than Jeffrey Epstein. He showed that someone with enough money and political connections can openly prey on children for decades. And while Epstein died in prison, only one of those who helped him has been arrested. Meanwhile, those in government who looked the other way were still able to rise through the ranks. Alexander Acosta, the U.S. Attorney who inexplicably gave Epstein and his co-conspirators immunity from federal charges in 2008 even though his investigators had identified more than 30 children whom Epstein had molested, became President Trump’s Secretary of Labor.

But Epstein is just one of the most horrific examples of a lack of accountability. In politics, for example, Ronald Reagan’s administration illegally sold arms to Iran, but the key people involved were pardoned by George H.W. Bush (at the urging of then-Attorney General William Barr in his first time in that position). Bill Clinton had to give up his law license and pay a fine because of his deceptive testimony during Ken Starr’s investigations, but that didn’t stop him from making tens of millions of dollars for speeches and books in the years afterwards (indeed, you could say that the only people who suffered for his actions were Hillary Clinton and Monica Lewinsky). Either George W. Bush himself or senior members of his Administration authorized torture and never answered for it in any way.

We can also see the same problem in the military, where the United States has fought in Afghanistan and Iraq for two decades and, despite the expenditure of thousands of lives and hundreds of billions of dollars, managed stalemates at best. During the Second World War – a war we won! - more than a tenth of all American division commanders were relieved because they performed badly in combat. By contrast, no division commander – or more senior officer - has been relieved for failures in combat during my lifetime, despite far worse results. It’s no wonder that Lieutenant Colonel Paul Yingling commented that "a private who loses his rifle is now punished more than a general who loses his part of a war."

The absence of accountability is, if anything, worse in business, where senior executives seem to face no consequences for mistakes, including mistakes that shake the world. The 2008 financial crisis was a catastrophe of a scale unmatched since the Great Depression. Moody’s analytics estimated that it cost the United States government near $2.4 trillion.

But no one in a C-suite faced any meaningful consequences.

Robert Rubin, for example, pushed for financial deregulation as Clinton’s Treasury Secretary and served as Chairman of Citigroup from 1999 to 2009. The bank’s share price plunged 88% over the last two years of that span. Citigroup – despite Rubin’s claim that he had no executive role – paid him around $120 million.

Joseph Cassano steered AIG Financial Products into insuring mortgages, which was crucial to the creation of the mortgage bubble and, when the market collapsed, forced the government to bail out AIG for fear that its failure would destroy global trade. Cassano was paid $315 million for nearly destroying both his company and the global economy. When he was finally forced out, he even negotiated a $1 million per month “consulting fee.”

Steve Mnuchin’s bank, OneWest, took $1.2 billion from the government on the condition that it would help homeowners avoid foreclosures. Instead, it used “robo signing” to foreclose more quickly. Instead of being punished, Mnuchin made hundreds of millions ... and became President Trump’s Treasury Secretary.

If there are no consequences for driving your company into the ground – if, instead, you are actually rewarded for it – then the people who are supposed to steward companies will loot them instead. If government officials can break the law with impunity, then some of them will. Over time the unpunished behaviors of a few will normalize lawlessness and self-dealing, making such behavior the rule instead of the exception. The cycle will continue and worsen until eventually the wealthy and powerful unaccountable elites will no longer be bound by either law or custom in any meaningful sense at all.

What’s more, if you’re not in the elite, why would you trust a society where the wealthy and well-connected are above the law? Why should you concern yourself with the good of the country when its most fortunate citizens only seem to think about how much they can extract from it? From 2009-2011, as the American economy was emerging from the financial crisis, the top 1% captured 121% of all income gains.

Even if you believe that the policies which produced this outcome were justified, its fundamental unfairness – particularly when so many of the architects of the crisis profited from their own mistakes – strikes at the heart of our social compact. A country where the powerful profit from disaster will, inevitably, see far more disaster than it can handle.

Every society has people with inordinate wealth and power. And it’s inevitable that people with power will try to use it to rewrite the rules in their own favor. But it doesn’t have to be this bad. And everyone else doesn’t have to go along when they try to avoid consequences or profit from their own mistakes.

At the very least, we should expect those who break the law to be punished, and those who destroy companies or economies not to profit from it, no matter how well-connected they are. For a long time, that’s how America worked. But that’s not what happens today. The collapse of elite accountability isn’t Gerald Ford’s fault. But when the President of the United States breaks the law and gets a pass for it, the message reverberates through society. If we’re going to make any progress on the problems facing America, we need to be in this together, all of us. And that means we need to hold the rich and powerful to account once again.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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