Government Distrust in the US Part II, Scandals, Schemes and Failed Conflicts

Full Episode Transcript

In episode 3, Government Distrust in the US Part 1, we began with the protests of January 6th 202. Our goal is to identify if Trump Supporters were justified in suspecting that election results were incorrect, and in fact, Donald Trump was the true elected President in 2020. We looked at the extreme distrust in the election results that moved a large group to protest in front of the Capitol and, eventually, break the law by trespassing, assaulting law enforcement officers and other crimes. Our question was, is this something new, or merely a continuation of the American Experience?

In our last episode, we found that the themes which led to extreme distrust with the Parliament in Great Britain in Colonial times, and ultimately the War of Independence, not only reverberate today, but are still being experienced. We also looked at Tariffs, the Nullification Crisis and Secession. Instead of these events being relics of the past, we identified and discussed the current examples of states passing legislation to bypass federal SALT (State And Local Tax) deduction limits to benefit small business owners (at the expense of W2 wage earners, who cannot participate in the same scheme), as well as  President Biden’s failed attempt to pass Federal voting laws to bypass State laws. States have the power document in the Constitution to develop their own election regulations, timing and practice.

We also saw how nullification and state laws passed to bypass federal one were key causes for the Secession of the Southern states from the union. Another main reason for secession was that the southern states wished to preserve the institution of slavery, a terrible practice that caused great misery and robbed the enslaved people of their liberty, to benefit slaveowners and other beneficiaries.

As we continue our journey through the history of our nation, let’s see what additional themes experienced in the past that apply to current times, starting with The Credit Mobilier scandal of 1872.

Post Civil War Corruption: 1872 – The Credit Mobilier Scandal – a financial scam enabled through bribery of top government officials.

The late 1800’s was the era of the railroad. Built by immigrants, but run by capitalists, the railroads were a great bubble, similar to the internet bubble of the late 1990’s, in that there was a speculative stock price runup and bonds fueling the expansion of railroad companies, in an accelerating land grab for money. Many of the railroads were unprofitable and when the bubble burst, in 1873, two decades of economic depression followed, defined by a steep and steady drop in economic activity, and high unemployment.

In other words, a very painful period.  But lets back up to 1872, the year before the bubble burst.

In 1872, The Union Pacific was building the railroad in the vast unpopulated territories between Omaha and the Great Salt Lake. Mere operation of the railroad alone, iwould unlikely to be profitable. The railroad companies knew that they could gain profits by sales of lucrative bonds, land contracts and government contract.

Exposed by The Sun, Credit Mobilier, a shell company formed by representatives of the Union Pacific Railroad, who used stock to bribe representatives in Congress, including​​ Schuyler Colfax, Speaker of the House and later Vice President, by selling them shares at a low price. The shares would then be used at a later date as a mechanism to dispense profits.

In return, congressmen would support the interests of the Union Pacific Railroad in government construction contracts for the railroad, awarding lucrative bonds and millions of acres of land.

Oakes Ames, a representative from Massachusetts, was a chief participant, as was James Brooks of New York. Both were censured by the House for their role in the scheme.

Censure is a mark of the house’s extreme displeasure, but does not meet the threshold for expulsion. Expulsion is the gravest punishment. A reprimand is a lighter rebuke than censure.

The scandal highlighted how public officials could be bought off by outside influences to benefit themselves and corporations, at the expense of the people,  through the illegal manipulation of construction contracts. The railroad companies believed that construction contracts would be more profitable than operation of the railroad once in service.

Conclusion: The average person would lose confidence in their elected government officials, increasing distrust and the sentiment that the powerful. The timing of this scandal, taking place after the Civil War, led to distrust in Reconstructionist policies at the time.

1921-1923: Teapot Dome scandal involved bribery of high level government officials to lease oil reserves to private companies at low prices, without competitive bids.

Teapot rock is a distinctive sedimentary outcropping that once bore a resemblance to a teapot. Over time, further erosion caused the rock to lose some of its distinctive features, including the “handle” and “spout” that formed the “teapot”. The “teapot dome” is an oilfield a few miles away that took its name from the famous teapot landmark.

In 1901 oil was first discovered in Texas. By 1910, the US Navy had converted its ships from coal powered to oil, an innovation over using relatively inefficient coal.  Which was notoriously difficult to handle.  An oil boom, then, spread rapidly throughout the American west.

Oilfields under Teapot Dome were used by the Navy for fuel oil to power ships, an innovation over using relatively inefficient coal. The oil rich lands were under the control of the Department of Navy until 1921 when President Harding transferred the control of oil rich lands from the Navy to the Dept. of the Interior. He did this through an executive Order. 

Interior Secretary Albert Fall, a cabinet level position, then leased the lands at a very low price to two private oil companies, without a competitive bidding process.

Although the leases themselves were not illegal, the oil companies paid Fall a total of around $500,000 or around $7 million in today’s money, which was illegal.

The matter was initially brought to the attention of Wyoming Senator John B. Kendrick by a Wyoming oilman who noticed Sinclair trucks hauling drilling gear into the teapot Naval Reserve.

The scandal was further exposed by Carl McGee, later the founder of the Albuquerque Tribune, who noticed a change in Fall’s fortunes. Fall paid up his ranch taxes, that had been overdue for 10 years, and McGee brought the matter to the attention of the Senate investigation.

Civil and criminal lawsuits followed. The Supreme Court found that the leases were illegally granted, and the control of the lands was returned to the Navy Department. Fall was fined and imprisoned.

Conclusion: Cabinet level corruption for personal enrichment and the benefit of oil companies created lasting mistrust. As a example of this, The First Gulf War, where Iraq had invaded Kuwait and threatened the Oil Fields of Saudi Arabia was viewed by critics as “A War for Oil”.

The Vietnam Conflict: Long term Involvement of US forces without Congressional Declaration of War. Loss of confidence in the leaders in Government to extricate US Armed forces from impossible situations / positions.

The Vietnam conflict was a tragic failure for the United States. President Truman and Eisenhower were motivated by the fear of the spread of Communism. Their fear was greater than the actual threat and the medicine ended up being worse than the disease. 

After 100 years of failed French Colonial policy, Truman and Eisenhower let their emotions about Communism affect their decision making, but so did three following Presidents.

Prior to US Involvement, the idea of using tactical nuclear bombs to support French forces at Dien Bien Phu was proposed. Thankfully, Eisenhower rejected the idea.

President John F. Kennedy (JFK)  initially assessing the situation in French Indochina correctly in 1954 stating, “I am frankly of the belief that no amount of American military assistance in Indochina can conquer an enemy which is everywhere and at the same time nowhere, “an enemy of the people” which has the sympathy and covert support of the people.”

JFK later changed his position to support South Vietnam against the North during his Presidential campaign, in order to address the perception amongst Americans that he was ‘soft’ on Communism.

Just so that we can all understand the situation the US was wading into, let’s back up and understand some of the history of the region:

Indochina was part of the Khmer Empire,  A Hindu/Buddhist Empire of South East Asia. France became involved through French Jesuit Priests that established Missions in the area during the 17th Century. The French East India Company, a company set up to establish trade and spread Catholicism, became active in the area beginning around 1668. In late 18th Century and early 19th, the French became involved in land disputes and to protect missionaries.

Local leaders became threatened by rising Catholicism, which sparked conflict. The French, with Spanish support, increased support through ships and men to consolidate control over the provinces.

By 1864, most of Vietnam fell under French control. The French were interested in increasing revenues and selling French good to the Vietnamese. Through until the late 1890’s, the Vietnam was costing the French more than the revenues that were being collected. In order to grow revenues, the French Colonial Governor encouraged opium use, and then raised taxes on Opium once enough people were addicted.

Heavy taxes were also raised on Rice and Rice Wine / Alcohol. Vietnamese who could not, or would not, pay their taxes, often lost their houses and lands and were forced to become day laborers. The French took over the lands of these poor farmers, and then paid them to plant and harvest rice. Through these economic policies, Vietnam became the third largest rice exporter, after Burma and Thailand.

From 1940 through 1946, Ho Chi Minh helped create the Viet Minh. After the French were forced out by the Japanese in 1945, the Viet Minh resisted the Japanese influence and control of the region.

During WWII, the US provided support to Ho Chi Minh through the Office of Strategic Services (OSS, the CIA’s predecessor) to help locate downed aircraft. The US was popular for having helped repell the Japanese occupiers.

Harry S. Truman supported French colonial involvement and helped them to restablish in Vietnam. No sooner had the French arrived back in Viet Nam, then fighting broke out with Ho’s Minh’s forces.

A major defeat of the French occurred at Dien Bien Phu, which was a battle that took place from 13th March, 1954 through 7th May. Dien Bien Phu was intended as a trap created by the French to lure Ho’s forces into a killing field. Instead, General Giap of the Viet Minh turned  tables on the French. The French believed that they could be re-supplied by Air, thinking the North Vietnamese did not have any anti-aircraft guns.

However, the Viet Minh brought up artillery, including anti-aircraft guns, up the side of a mountain, and then tunnelled through to train their guns on the French position. There were ground battles, and after a two month siege, the French surrendered their position in a major defeat, and the French government in Paris resigned.

While the siege was taking place, the Pentagon recommended  the use of three nuclear weapons to support the French position, the National Security Council recommended one, but Eisenhower refused

Following the French withdrawal, an independent North and South Vietnam were created in 1954. The states were divided by the 17th parallel, according to the 1954 Geneva Accords. A unifying election was to take place in 1956. However, the elections never took place, as CIA Director Allen Dulles believed the people would overwhelmingly vote for the Viet Minh.

President Eisenhower believed that Vietnam was in the US’s strategic interest, and that it must remain democratic. He asserted Viet Nam’s right to choose their form of government, but privately worried about letting Vietnam, fall to communism. 

Under President Eisenhower, the US’s involvement in Vietnam began to escalate in 1956 and grew into the Vietnam conflict (although technically not a war as although Congress authorized the use of armed force in 1964, following the Gulf of Tonkin incident.

Eisenhower was influential in the thinking of JFK, LBJ, Richard Nixon and Gerald Ford.

JFK, in 1954 commented, “I am frankly of the belief that no amount of American military assistance … can conquer an enemy which is everywhere and at the same time nowhere.”

His tune changed in 1960 when running for President, as he was viewed as being soft on communism. Once President, JFK supported South Vietnam with men, material including Napalm, Agent Orange and 16,000 ‘military advisors’ that began engaging directly in contact with the North Vietnamese.

Following JFK’s assination in 1963, President Lyndon Baines Johnson continued support of the South Vietnamese.  The Gulf of Tonkin incident, taking place in August 1964, resulted in Congress granting the President expanded war powers, which LBJ used to support the South Vietnamese. The South was on the verge of falling at that point. This marked a new stage of direct US involvement in the Vietnam conflict.

Troop levels in Vietnam increased to 400,000 by 1965, 500,000 by 1967.

By March 1968, President Johnson announces that he will not run for re-election, after facing a withering backlash against America’s involvement in the Vietnam conflict.

Republican Richard Millhouse Nixon wins the 1968 U.S. Presidential election, prevailing over Democrat Hubert Humpfrey and third party candidate, George Wallace (Governor of Alabama who wanted to bring back segregationist policies to America). Intrestingly, Wallace’s campaign addressed:

Federal government powers and control of people’s daily lives.

Criticized the civil rights bill as taking away the ownership of private property and making it available for public use. This was a reaction to federal anti-discrimination laws that applied to both public and private property. The idea that federal law would apply to private property is not a new concept, as laws apply to everywhere in the nation (violence, sexual assault, fraud etc). The Civil Rights bill adds another crime to the list of things that people cannot do on their private property.

Religion in schools – Wallace opposed the idea that no prayers or mention of God can be made in public schools. The belief in a God, from which all good things originated, is not a religion, according to Wallace.

When Richard Nixon assumed the office of the Presidency in January, 1969, the US had suffered more than 48,736 KIA’s (Nixon stated 31,000 KIA’s. Nixon believed that he could conclude America’s involvement in the Vietnam Conflict within a year, but it took four years in actuality. What happened during those four, long years?

In order to demonstrate his toughness, Nixon ordered an increase of military activity and secret bombing campaigns in Cambodia during the early months of his term. The North Vietnamese had been using areas in Cambodia to establish base camps and enable the transit of supplies and men.

In June 1968, Richard Nixon met with President Thieu at Midway to discuss the withdrawal of US forces from Vietnam. From that point forward, the US withdrew forces.

Public negotiations were mere political theater, and and serious discussions would take place in private. Nixon wanted to deliver a number of “short, sharp blows” to coerce the North Vietnamese back into negotiations, but the idea never progressed beyond the planning phase. Having failed by the end of 1969 to make progress in negotiations, Nixon delivered a speech to buy time for a protracted conflict, invoking the “silent majority”. 

In his speech, Richard Nixon claimed that the unilateral withdrawal of US forces would be a disaster for the United States.

For the US, Nixon claimed that US defeat and humiliation in South Vietnam would cause allies to lose confidence in the US, and its leadership and encourage our enemies in the Middle East, Europe and eventually the West.

Ultimately, Nixon claimed that a precipitous withdrawal from Vietnam would cost more lives and would not bring peace. The North Vietnamese were holding out for the US to surrender before negotiations would begin – terms that Nixon would not accept.

Conclusion: By 1969, the North Vietnamese were in a strong position to with the peace, and thus were negotiating on their terms. Nixon incorrectly assessed the situation and thought that the US could win the peace, after being defeated in the war. 

In 1970, Richard Nixon authorized US troops to move into a 30 km strip over the border into Cambodia to disrupt North Vietnamese supply lines and supply bases. This set back the North Vietnamese, giving time for the “Vietnamization” of the conflict.

In Spring 1971, the US launched a major Spring offensive. This was combined by a diplomatic effort to weaken China and Russian support for the North Vietnamese. This failed.

In 1972, negotiations failed to bring about terms that South Vietnam would accept.

Finally, in January 1973, Richard Nixon ended America’s involvement in the Vietnam conflict, following an extensive bombing campaign of North Vietnam in December 1972, known as Linebacker II.  It was the heaviest bombing campaign since WWII and its goal was to target major complexes in Hanoi and Haphong to bring the North Vietnamese back to the bargaining table.

The Nixon administration applied pressure on South Vietnamese President, Thieu to accept the peace deal negotiated in January 1973. President Thieu had misgivings that the North Vietnamese would honor the agreement, which Nixon addressed by providing personal assurances that the US would support the South Vietnamese should the North violate the agreement.

Upon US withdrawal of troops, neither side abided by the peace treaty and the war continued in Vietnam until 1975, concluding with the fall of Saigan.

Nixon never supported the South Vietnamese as promised, due to reluctance of Congress to re-enter the war and the Watergate scandal.

Conclusion: Rhetoric and the fear of the spread of communism propelled four US Presidents foolishly to engage in Southeast Asia. The war was conducted without the declaration of war, which is an overreach of power of the Executive Branch of government according to Article 1, Section 8 Clause 11 which states:

Congress shall have power to declare war, grant letters of marque and reprisal, and make rules concerning captures on land and water;

The Constitution of the United States

A significant amount of distrust is created when a series of 4 elected Presidents in the Executive Branch commit US forces into a conflict that spans three decades without a Congressional declaration of war. There is a check and balance that is missing that our framers intended to be in place to prevent catastrophes like the Vietnam conflict. 

LBJ left office with the US’ in a weak position, begging for a peace agreement to save face. Sensing complete victory, the North Vietnamese would have nothing of it. LBJ left the conflict in a shambles for his replacement and  his failure was complete.

President Nixon ignored the will of the American people, and carried on the war for an additional 4 years based upon his false beliefs costing an additional 9,414 unnecessary deaths. Richard Nixon’s assertion that he had a ‘secret plan’ was false.

The US ultimately proved to be a weak ally, when compared to Chinese and Russian support of the North Vietnamese. This makes sense when thinking about the existential threat presented to the Chinese mainland in the form of  a strongly U.S. allied Vietnam.

This lesson bears significance today as we think about Taiwan and the Korean peninsula, both considered of existential importance to China.

Following the Vietnam Conflict, Americans have become more suspicious of the Executive Branch war powers, and the commitment of US forces without a Congressional declaration of war. There would be little to separate executive war powers from that of a dictatorship without congressional oversight.

The Vietnam Conflict was unwinnable from the beginning, as Russia and China were committed to the cause of the North Vietnamese communists. The US did not want  to fight an open war with China or Russia, and was too cautious when attacking North Vietnam in order to not cause the Chinese to flow over the border to fight alongside the North Vietnamese, as they had done so in the Korean War.

The domino theory was ultimately the fear that engaged the US into the conflict, ignoring the lessons of a hundred years of French Colonialism in the region, and the will of the people to decide their own form of government.

Richard Nixon mistakenly believed that the North Vietnamese would negotiate a peace that favored US and South Vietnamese interests, while North Vietnam was winning the war and the propaganda campaign. They know that Americans wanted a withdrawal, and would stop at nothing less than a unified, communist, Vietnam.

Upon US withdrawal of troops, neither side abided by the peace treaty and the war continued in Vietnam until 1975, concluding with the fall of Saigan.

To sum up this episode, we walked through the Credit Mobilier Railroad scam, that involved a speaker of the house, and eventual Vice President. We reviewed the Teapot Dome scandal, in which a member of the President’s cabinet engaged in corruption by selling oil land leases through an illegal insider process for his private benefit. We then discussed the crisis of the  Vietnam Conflict, which involved four presidents and the deaths of almost 58,000 members of the US armed forces and an estimated two-hundred to two-hundred fifty thousand South Vietnamese – all conducted without a Declaration of War by the Congress. President Eisenhower did not trust the people of Vietnam to decide their own fate through an election in 1956, fearing that Communism would win. JFK began the involvement of the US in order to to look tougher on Communism domestically. LBJ further escalated the war, but ultimately admitted defeat and withdrew early from the Presidential election of 1968. Richard Nixon misled the American people by continuing the conflct for another four years and escalating it through offensives and bombing campaigns, instead of withdrawing the US swiftly. 

Going back to the story that precipitated this review of our history of Government Distrust in the U.S.:  the January 6th protest and storming of the Capital, it seems that there is plenty of justification for the public to suspect manipulation of elections, based upon the misdeeds of our leaders in the past. 

Before coming to any final conclusions,  we will continue our investigation by taking a detailed look at the assassination of an American President, the FBI, CIA, IRS and even the Post Office in my next episode. Those government agencies violated the Constitution, the liberties of American Citizens and at least one agency even went so far as to disobey the direct orders of a sitting US President.

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