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July 11, 2012
News Analysis: What Would Nixon Do? Tricky Dick's Lessons on Tax Disclosure
Joseph J. Thorndike

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In 1973 President Nixon released his personal tax returns. Under fire for an outsize charitable deduction, the president decided (to borrow one of his favorite phrases) to let it all hang out.

The results were disappointing, at least for Nixon's critics. As conservative columnist William F. Buckley Jr. wrote, "There is palpable disappointment that President Nixon's tax returns have not disclosed a secret million-dollar fund, or a numbered account in Switzerland."1

By contrast, presumptive GOP presidential candidate Mitt Romney's tax returns have revealed both a Swiss account and several secret million-dollar funds (secret in the sense that we know almost nothing about them). Since the January release of Romney's 2010 returns, Democrats have been pounding him for his opaque tax maneuvers.

Democrats also have been complaining about Romney's failure to disclose older returns, saying Romney's own father released more than a decade's worth of returns when he ran for president in 1968.

President Obama has released all of his returns since 2000. "What's important, if you are running for president, is that the American people know who you are and what you've done, and that you're an open book," he said in an interview with WMUR, a New Hampshire television station.2

Obama's statement brings to mind a similar sentiment voiced by none other than Nixon. Long before his 1973 tax disclosure, Nixon faced another financial scandal of sorts. And he escaped it with a healthy dose of disclosure.

The Fund Crisis

In 1952, for the first but not the last time, Nixon discovered the political limits of personal privacy. While running for vice president on Dwight Eisenhower's GOP ticket, the 39-year-old California senator faced accusations of financial wrongdoing related to a fund established by political backers to pay for campaign expenses.

Media critics pounced. "Secret Rich Men's Trust Fund Keeps Nixon in Style Far Beyond His Salary," blared a headline in the New York Post. The fund was not illegal, as Nixon and his supporters were quick to point out, but the story wouldn't die. In a bid to clear his name, Nixon tried to clear the air -- by going on the air.

The result was the famous Checkers speech, in which Nixon laid out his personal finances. "That's what we have, and that's what we owe. It isn't very much. But Pat and I have the satisfaction that every dime that we've got is honestly ours," he said in conclusion.

In a maudlin attempt to humanize himself, Nixon did admit to accepting at least one gift from a political supporter: a cocker spaniel that his children named Checkers. And "the kids, like all kids, love the dog, and I just want to say this, right now, that regardless of what they say about it, we're gonna keep it," Nixon said.

Nixon challenged the Democratic ticket, Illinois Gov. Adlai Stevenson and Alabama Sen. John Sparkman, to follow his lead in financial disclosure. "I would suggest that under the circumstances, both Mr. Sparkman and Mr. Stevenson should come before the American people, as I have, and make a complete financial statement as to their financial history," he said. "And if they don't, it will be an admission that they have something to hide."

Stevenson and Sparkman accepted the challenge and upped the ante by releasing a decade's worth of personal tax returns. Nixon notably declined to follow suit, reviving suspicions (at least among Democrats) that he was up to something. After all, Nixon himself had equated nondisclosure with an admission of guilt.

But the tax return flap never gained much traction. In the face of Stevenson's tax release, Eisenhower felt compelled to release a summary of his own taxes (which included a special dispensation from the IRS allowing him to treat book royalties as capital gains). But Nixon never released any of his returns.

Ultimately, the Checkers speech proved to be a political masterstroke. But it didn't start a trend -- candidates did not begin routine disclosures of their tax returns, or even their nontax financial information, until much later. Indeed, routine disclosure would await Nixon's 1973 tax flap, when he inaugurated a new tradition in presidential tax disclosure.

Nixon's Lessons

Still, the Checkers speech underscored the political utility of voluntary disclosure. Nixon understood that Americans wanted their presidents (and their candidates) to lay things bare -- at least to a point. During the speech, Nixon said, "I think you will agree with me, because, folks, remember, a man that's to be president of the United States, a man that's to be vice president of the United States, must have the confidence of all the people. And that's why I'm doing what I'm doing."

Romney seems unclear on that point. To be sure, Democrats are engaged in some amount of demagoguing on the tax issue, not to mention some misdirection. Recent calls for additional Romney tax disclosures came hard on the heels of a particularly dismal jobs report. And so far, no one has produced any evidence that Romney has played fast and loose with the tax laws.

But silence is a short walk from stonewalling, and Romney seems oblivious to Nixon's warning: A refusal to disclose can become a tacit admission of guilt.

Of course, that standard isn't fair to candidates. "It is one thing to say we are gloriously bent on a purer politics," Buckley wrote in another statement on Nixon's tax return disclosure in 1973. "If we go about it by stripping all potential politicians of elementary protections of their privacy, we are going to have an extremely antiseptic Congress, uncontaminated by any human beings."3

Buckley was correct. But we have long since passed the point where real human beings serve in Congress, let alone the White House. Candidates and officeholders have already cashiered their privacy, and not just around financial matters. We can bemoan that fact and prattle on endlessly about all the great politicians of yore who would never pass the purity test of modern politics. But the fact remains: 21st-century politics makes no room for candidate privacy.

Romney would be well advised (assuming his tax returns don't involve anything legally problematic) to simply cough up a decade's worth of returns. In all likelihood, the only thing he's hiding is the sort of sophisticated tax avoidance that rich people engage in every day. His tax maneuvers might look "weird," as one expert described them to Vanity Fair recently,4 but they haven't been shown to be anything less than legal.

Ultimately, of course, politicians are held to a higher standard than mere legality. Once again, Buckley captured the essence of the issue. "What is a President of the United States supposed to say to the man who fills out his tax returns? 'Don't take any of the exemptions or deductions to which I would be entitled if I were other than President of the United States'?"5 he asked.

Well, yes. That might not be fair, strictly speaking, any more than the sacrifice of privacy is fair. But in any number of spheres, we already expect our politicians to stay well clear of the legal limit. We have held them accountable when they have legally avoided the draft. Presumably, we would also hold them responsible if they routinely ducked jury duty. And we expect them to avoid technically legal but morally dubious activities like excessive gambling. Just because something is legal doesn't mean we want our politicians doing it.

Depending what's in Romney's unreleased returns, further tax disclosure could be problematic -- even deadly. But if he were to survive the firestorm of outrage that's sure to follow a major disclosure, then perhaps President Romney would be uniquely well positioned to lead the charge for tax reform. After all, if only Nixon could go to China, maybe only Romney can get American taxpayers out of the Caymans.


1 William F. Buckley Jr., "Nixon's Disappointing Tax Return -- No Swiss Account," Los Angeles Times, Dec. 14, 1973, at D7.

2 WMUR, "Obama Calls for Extending Middle-Class Tax Cuts," July 10, 2012.

3 Buckley, "Unreliable Profile," News and Courier, Dec. 20, 1973.

4 Nicholas Shaxson, "Where the Money Lives," Vanity Fair, Aug. 2012.

5 Buckley, supra note 1.