The Second Part of Watergate Was Bigger, Worse and Forgotten By the Public

[Frank Cannon]

https://longreads.com/2018/11/20/the-second-half-of-watergate-was-bigger-worse-and-forgotten-by-the-public/

In 1975, Peter Clark was a young attorney in the Enforcement Division of the U.S. Securities and Exchange Commission. Founded three years earlier, the Enforcement Division was tasked with investigating possible violations of federal securities laws. One morning, Clark was in his office when the division’s director, Stanley Sporkin, appeared, greatly vexed. Sporkin, tall and corpulent with deep-set eyes, was waving a newspaper, Clark recalled. “How the ‘bleep’ could a publicly held company have a slush fund?” Sporkin asked.

Two years had passed since the Watergate scandal broke, and less than a year since President Nixon had resigned, but the reverberations of the scandal were still rocking Washington. Its revelation that multinational corporations, including some of the most prestigious brands in the United States, had been making illegal contributions to political parties not only at home but in foreign countries around the world would later be described by Ray Garrett, the chairman of the SEC, as “the second half of Watergate, and by far the larger half.”

By 1975, Frank Church of Idaho had convened a Senate Subcommittee on Multinational Corporations to examine, as one of his colleagues said, “U.S. corporate business practices abroad” and to “ascertain the impact of these practices on U.S. foreign policy.” Each night Sporkin would return home from work and watch the hearings on television. One evening in mid-May he listened to Robert Dorsey, the chairman of the board of Gulf Oil, testify before the committee. Dorsey admitted that between 1966 and 1970 Gulf Oil had paid $4 million in bribes to the Democratic Republican Party of South Korea, funds principally intended to support the party’s re-election campaign in 1971. Dorsey went on to explain how Gulf funneled the money: “Although each of the contributions came from company funds in the United States, the transfers were recorded as an advance to Bahamas Exploration Co. Ltd., where they reflected on the books and records of Bahamas Exploration Co., as an expense.” (In January 1976, Dorsey and three other officers of Gulf Oil resigned.)