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Watergate Anniversary Marked Today

Aired June 17, 2002 - 16:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JUDY WOODRUFF, CNN ANCHOR: I'm Judy Woodruff outside the Watergate complex in Washington. Our focus today: the granddaddy of modern political scandals that began with a break-in here 30 years ago, and ended with the only president ever to resign the office.

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT: I'm Candy Crowley in Washington. Watergate was all about exposing secrets. And yet, most everyone still is trying to figure out the identity of Deep Throat.

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: I'm Jonathan Karl on Capitol Hill, where I spoke with one of the key figures in the Senate Watergate hearings right here in the room where it all happened.

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: I'm Bill Schneider at the Watergate complex in Washington, where I'll take you on a guided tour.

WOODRUFF: Thank you for joining us. Just say the word Watergate today to millions of Americans and it speaks of an abuse of power, the destruction of a presidency and the man at the center of this cautionary tale, Richard Milhouse Nixon.

But back on June 17th, 1972, almost no one could have imagined the events that would unfold, with this complex as the symbol of the scandal.

(BEGIN VIDEOTAPE)

(voice-over): At first Republicans dismissed it as a third-rate burglary. But the break-in at Democratic Party headquarters in the Watergate complex was not only the beginning of the end of the Nixon presidency, it produced a new lexicon of political scandal; of hearings and hush money, of secret tapes and cover-ups, of a cancer on the presidency and a smoking gun.

For many, the significance of those words and of the events at the Watergate need no explanation.

BEN BRADLEE, VICE PRESIDENT AT LARGE, "WASHINGTON POST": For 30 years, this story still casts a tremendous shadow, and a good one.

WOODRUFF: But more than 1/3 of Americans say they are not familiar with the scandal. Mostly, younger people who may know the movie, "All the President's Men," but not the real-life players.

ROBERT REDFORD, ACTOR: The story is solid, for sure.

WOODRUFF: Is the legacy of Watergate alive or fading? Without Watergate, would the news media and Congress have investigated future presidents, from Reagan to Clinton, so aggressively? Without Watergate, would current members of Congress have pushed anew for campaign finance reform, if their predecessors had not launched reforms in the days after the scandal?

But, some note that the independent counsel law created after Watergate now is history, and that in recent months, post-Watergate reforms of the CIA and FBI have been loosened. If some of the lessons of Watergate prove fleeting, it still remains, by most accounts, the benchmark of political scandals by which all others are judged.

BRADLEE: People lie in this town. Of course, there is a danger. The truth in Washington and the truth in life emerges.

(END VIDEOTAPE)

WOODRUFF: With us now, Richard Reeves. He's the author of "Nixon: Alone in the White House." Richard Reeves, let's go back to the situation in the summer of 1972. Nixon, way ahead in the polls. Why did he and the other people around him think it was necessary to bug the Democratic Party headquarters?

RICHARD REEVES, AUTHOR/COLUMNIST: I'm not sure they did think it was necessary to bug the Democratic headquarters. In fact, what they had operating was a secret police operation that began long before Watergate. And it happened to be that Watergate was the thing that got them caught.

I think that Richard Nixon, what we've learned in 30 years, is that he ran a coup d'etat against his own government. He wanted to govern without the Congress, without the bureaucracy, the press, the courts. He governed by surprise.

And he did that in China and in taking the U.S. off the gold standard. In both cases there was never any a public debate. He simply planned in secret and did those things by coming on television. But to have that kind of secrecy, they had to have lies at many levels of government. And eventually the house of lies collapsed.

We're talking about a White House where the military was coming in at night and photographing the papers to try to find out what the president was doing. And that house of lies and of spying and of everyone tapping each other finally collapsed over this one little incident, which. odds are, the president didn't know was happening.

But a lot of other things were happening. They were covering them up.

WOODRUFF: You talk a lot about secrecy a round Richard Nixon. Just how much did secrecy dominate his presidency? REEVES: He liked to say to Henry Kissinger that envied Mao Tse- Tung, because he had to govern with only three or four people. And if Nixon -- who was this extraordinarily introverted man who didn't like to talk to other people -- had had his way, he would have governed like Mao, or like his hero, General de Gaulle, who issued edicts on television.

And that, in a way, Nixon was able to pull off with great effectiveness. But to protect all of the secrecy, he had to hire, or someone had to create this kind of secret police operation of sleaze bags like Gordon Liddy, like Howard Hunt, who were running wild across the countryside, and finally got caught at it.

WOODRUFF: Was there something in Nixon's character that made this more likely to happen?

REEVES: Yes, he thought other people were like him. He was introverted, to the point of highly-functioning autism. And he thought other people were like him. He couldn't read social signals. He became president in one of the great triumphs of human will, by watching other people, by memorizing everything that he said.

And all of this made him president. It was as if his goal was being center of the Los Angeles Lakers, with his skills. But then once he got to be president, and the real Nixon, the newest Nixon came out, he tried to govern as an introvert who dealt with no one, who locked himself up all day and night.

WOODRUFF: Just quickly, Richard Reeves, in a few minutes we're going to hear from G. Gordon Liddy, who said this whole thing was done by John Dean in order to protect the woman he was going to marry. What is your understanding of that theory?.

REEVES: My understanding is that John Dean and Gordon Liddy deserved each other. They both went to jail and they deserved to. And that's nonsense. This was much more important than a small scandal involving unbalanced former FBI men.

The Richard Nixon was trying to restructure the government of the United States, and he was well along the way. He wanted to create a new political party. He was financing George Wallace's campaign to try to destroy the Democratic Party.

And it had nothing to do with John Dean or his girlfriend, or Gordon Liddy. They just happened to be small tools at the end of a corrupt chain that began at the top.

WOODRUFF: Author Richard Reeves, thanks very much. We appreciate your joining us.

All the serious implications of Watergate aside, people are still riveted by the question of who is Deep Throat? In books available on- line today, John Dean, former Nixon aide, reduces the number of possible suspects, in his view, to five.

They all are former Nixon White House aides: speechwriter Pat Buchanan, appointment secretary assistant Steve Bull, special assistant Raymond Price, press secretary Ron Ziegler and Ziegler's assistant, Jerry Warren.

Our Candy Crowley has more on this guessing game that has been going on for three decades.

(BEGIN VIDEOTAPE)

CROWLEY (voice-over): Washington, D.C. Motto: We can't keep a secret here, except this one.

UNIDENTIFIED MALE: Do you have any clue as to who Deep Throat could be?

UNIDENTIFIED MALE: No, I don't. I have no idea.

CROWLEY: After 30 years, the world is divided into two parts: those who don't know who Deep Throat is...

UNIDENTIFIED MALE: Any idea who Deep Throat could have been?

UNIDENTIFIED MALE: No, I don't have the slightest idea who it could be.

UNIDENTIFIED MALE: Do you deliver to this building a lot?

UNIDENTIFIED MALE: Yes, every day.

CROWLEY: And those who really don't know who Deep Throat is.

UNIDENTIFIED MALE: You know about Deep Throat, right?

UNIDENTIFIED FEMALE: No.

UNIDENTIFIED MALE: A little before your time?

UNIDENTIFIED FEMALE: Yes.

CROWLEY: Deep Throat, after a porno movie of the same name, was a source who pretty much brought down a presidency.

UNIDENTIFIED MALE: Oh, it was probably Henry Kissinger.

CROWLEY: Definitely not Kissinger, laughs a friend. Kissinger would never go to a garage, which is where Deep Throat would meet reporter Bob Woodward.

UNIDENTIFIED MALE: I made a little list. Alexander Haig? How about Diane Sawyer?

(LAUGHTER)

UNIDENTIFIED MALE: I think you've got it.

CROWLEY: Woodward has said Deep Throat is a man, and that it's not Nixon chief of staff Alexander Haig. SEN. TOM DASCHLE (D-SD), MAJORITY LEADER: If I told you, I'd have to kill you.

CROWLEY: At least four people actually know: Deep Throat, then "Post" editor Ben Bradlee, reporter Carl Bernstein and Woodward.

UNIDENTIFIED MALE: Any clue as to who Deep Throat is?

UNIDENTIFIED "WASHINGTON POST" WORKER: Nope.

UNIDENTIFIED MALE: Offer a guess?

UNIDENTIFIED "WASHINGTON POST" WORKER: They haven't shared that with us in the newsroom.

UNIDENTIFIED MALE: How come?

UNIDENTIFIED "WASHINGTON POST" WORKER: Because it's a secret.

CROWLEY: And it will be a secret, says Woodward, until Deep Throat dies, which means you can rule out all the dead people. Everyone else...

DONALD RUMSFELD, SECRETARY OF DEFENSE: You really are scraping the bottom of the barrel.

(LAUGHTER)

CROWLEY: ... is fair game.

UNIDENTIFIED MALE: So, you don't deny it, sir?

(LAUGHTER)

RUMSFELD: Oh, that is wonderful. That is amusing. I'd heard every name in the world except -- no, I was kind of busy running the economic stabilization program, and was not really engaged in that process.

UNIDENTIFIED MALE: I'll take that as a no.

CROWLEY: More clues: Deep Throat was a scotch-drinking, chain- smoking combat veteran with access to information from the FBI, the White House, the Justice Department and a committee to re-elect the president. Boy, they should make a movie out of this. Oh, wait.

UNIDENTIFIED MALE: I have to do this my way. You tell me what you know, and I'll confirm.

CROWLEY: They did.

(END VIDEOTAPE)

The truth, when we learn it, may be more boring than what you imagine. Given the clues, particularly Deep Throat's wide reach into various agencies, it seems unlikely he is a high profiler like a Pat Buchanan -- still favored by some -- but more likely a lesser-known name. The leading contender among Deep Throat enthusiasts is Mark Felt, former No. 3 at the FBI, who, for the record, denies it -- Judy.

WOODRUFF: All right, Candy, I guess it's not you.

CROWLEY: No.

WOODRUFF: Candy Crowley, thanks very much. More Watergate reflections coming up.

Still ahead, he lost to Richard Nixon in a landslide months after the Watergate break-in. We'll talk to former Democratic presidential nominee, George McGovern.

Watergate figure G. Gordon Liddy remembers that day 30 years ago, and presses his controversial claim about why it happened.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: One of the most memorable witnesses was John Dean, the then White House counsel. His memory was uncanny. The quotes he recalled, almost exact matches for what the tapes would later reveal

JOHN DEAN, FMR WHITE HOUSE COUNSEL: I began by telling the president that there was a cancer growing on the presidency. And if the cancer was not removed, the president himself would be killed by it.

UNIDENTIFIED MALE: Dean went to prison and worked as a lecturer, an investment banker and a writer, who recently sold a screenplay, "The Pentagon Papers," to television, and also a just published book on Richard Nixon's appointment of now-Chief Justice William Rehnquist to the Supreme Court. He and his wife Maureen, a striking presence at the hearings, are still married.

(END VIDEO CLIP)

WOODRUFF: That was the John Dean story.

Former Senator George McGovern was, of course, the Democratic nominee for president in 1972. Excuse the plane noise. We are right across from the Watergate on the Potomac River, where the planes come in.

McGovern lost to Richard Nixon in a landslide, just about five months after the break-in here at this complex. George McGovern joins us now.

Senator, when you heard there had been a break-in at Democratic Party headquarters, you were on a campaign trail. What did you think?

GEORGE MCGOVERN (D), FMR. PRES. CANDIDATE: I was in town that day. I was still a United States senator, and the Senate was in session on something of importance that day. So I picked up a "Washington Post" that morning, and here was this little article. As I remember, it was just a single column, and not more than maybe 5 or 6 inches long, detailing the break-in at the Democratic national headquarters.

I drove on up to the Senate. Mike Mansfield, the majority leader, was talking to a group of reporters in the front part of the Senate. And the first question was, what about this break-in at the Democratic National Committee?

Mike said, well, those things happen in politics. People get out of hand. But I don't think the president had any knowledge of this. I was appalled at that answer. I'm a great admirer of Mike Mansfield, now as I was then, but I thought it dismissed it too quickly.

WOODRUFF: You were running pretty far behind him in the polls at that point. The question has been asked, why would they bother to break in at Democratic headquarters when President Nixon was running well ahead of you and other Democrats at that point? Was there something at Democratic Party headquarters that could have helped Nixon do better than he did in November?

MCGOVERN: I think this, that Richard Reeves, whom you had on two minutes ago, has written this brilliant book on Nixon and the kind of person that he was. You can't read that book without becoming aware that this was a very paranoid man.

He lived with fear. He lived with insecurity. And even though he had a lead in the polls against any Democrat running against him in 1972, I think he feared that in our files somewhere, we had information that we might bring out in the course of the campaign that would turn that race around.

We didn't have any such information. All we had was the public record, which I thought was significant enough.

WOODRUFF: Senator, there was a poll that CNN did last week that showed that 42 percent of Americans, if you ask them now, say Watergate was just about politics, that it's something that both political parties do. Only 51 percent of those polled agree that it was a serious matter. What do you say to the American people who don't really take this seriously?

MCGOVERN: Well, this was obviously a unique situation in our political history. It wasn't just another incident. The investigating committees of the U.S. Senate and the House of Representatives, and also listening to the tapes of what was going on in the Oval Office, revealed a whole series of federal laws that were deliberately violated -- a whole series of constitutional violations. All kinds of shady operations that I think makes this a very serious development in our politics.

I don't know of anyone else that either party ever did that compares to the Watergate scenario. What was difficult for me to understand was why we had so much trouble convincing people that this was a serious matter during the campaign. Eighteen months later the president was forced to resign. But why did it take so long?

WOODRUFF: Well, it took a while for the information to come out. George McGovern, former senator, we thank you very much for being with us.

MCGOVERN: Thank you.

WOODRUFF: Thank you.

An update on the woman police say is responsible for setting the largest wildfire in Colorado history, part of our "Newscycle" coming up next.

Also, G. Gordon Liddy will share his unique theory on the reasons behind the Watergate break-in.

(COMMERCIAL BREAK)

WOODRUFF: The story leading our "Newscycle" today, forest service technician Terry Barton appeared in federal court earlier today. She is accused of sparking the largest wildfire in Colorado history, when she burned a letter from her estranged husband.

Why did the Watergate burglars break into the headquarters of the Democratic National Committee? The answer given was, to fix a broken bug that had been installed there a month earlier, and to photograph some documents. But exactly what did they hope to find?

Well, even 30 years later that central question is very much a matter of dispute. There are dozens of theories, including the one you are about to hear from ex-FBI agent, G. Gordon Liddy, the man who helped plan the Watergate burglary. He says the whole thing was set up by White House Counsel John Dean in order to protect the reputation of a woman he would later marry.

(BEGIN VIDEOTAPE)

(voice-over): I met Liddy in the old Howard Johnson hotel across from the Watergate. This is where the burglars conducted surveillance on DNC Headquarters, spying on the office through a telephoto lens and listening to phone conversations from a bug placed on the desk of Secretary Ida Maxine Wells.

(on camera): What did you think you had come here to do that night?

G. GORDON LIDDY, WATERGATE CO-CONSPIRATOR: I was told that we were going to repair an inoperative room bug.

WOODRUFF: And, in fact, bugging equipment was found on the burglars, right?

LIDDY: Bugging equipment was found on the burglars. What was really found on the burglars was photographic equipment. But that's where they went. And when they were arrested by the police, Mr. Martinez struggled with them and they found what he was trying to protect, which was a yellow notebook, small one. Taped to the back of that was a key.

The FBI found that the key fit only one lock over there, and that was the desk of Ida Maxine Wells. And that was the phone she shared. Now, the reason they were doing that is that, since 1969, there had been a call girl ring being run out of the Columbia Plaza apartments up there across the street.

Some Democrats were tapping into it to use it as a resource for visiting dignitaries who were interested in that kind of thing. That was being investigated by the United States Attorneys Office and the FBI. And Mr. Dean, who recruited me for this whole thing, was aware of that because, at that time, his then-paramour, Maureen Elizabeth King, when she wasn't with him, was living with the madame, whose name was Heidi Rikan.

WOODRUFF: And you know a lot of other people say that what they were doing was going in to fix up the bug there. And that it wasn't John Dean who was behind all this, but that it was part of a much bigger conspiracy, to sabotage and to make sure that Richard Nixon was re-elected president.

LIDDY: Well, now, Judy, how would we sabotage them? I mean, that's what we call a hyperbole. What we were in there doing was trying to get the sexual dirt on the Democrats who were tapping into that thing. That was what it was.

Now, on the 6th of April, they were busted. That is, the lawyer who was accused by the government of running this thing, was raided. And they got his code books. That was publicized on the 9th of June, Friday. As soon as it was publicized, John Dean called the assistant United States attorney who was in charge of the investigation over to his office and demanded to look at the code books.

When he looked at the code books, there was the name of Maureen. It was the very next business day, Monday, that I was ordered to go back in.

WOODRUFF: But the whole premise behind the Watergate story, that brought down a president, you're saying was all a John Dean conspiracy?

LIDDY: It was a John Dean operation. He recruited me in the White House itself.

WOODRUFF: Why in the world would Richard Nixon protect him?

LIDDY: Richard Nixon didn't know what he was protecting. He didn't tell President Nixon that for nine months. Poor Richard Nixon didn't know what he was trying to battle with.

WOODRUFF: Do you feel good about your role in all this? How do you feel about what happened?

LIDDY: Well, I feel that I was sort of tested when the thing went south. I could have, I suppose, if I had been raised that way, do what John Dean did and betray my associates to attempt to extricate myself from difficulty. But I don't do that. So I feel good about that.

(END VIDEOTAPE)

WOODRUFF: We contacted John Dean for his reaction to G. Gordon Liddy's comments. He told us -- quote -- "it is too bad that G. Gordon Liddy isn't man enough to accept responsibility for his own actions, and his latest trick is to blame it on others, mostly innocent women," end quote.

Our Bob Novak is having something of a G. Gordon Liddy flashback. Up next, Bob will have the "Inside Buzz" on Watergate from his columns of that era, as well as some new buzz about the Bush administration.

(COMMERCIAL BREAK)

WOODRUFF: Here now with some "Inside Buzz" back in the Watergate days in 1972 and with a little current "Inside Buzz": our own Bob Novak.

And, Bob, as we ask you about you about your columns of that year, we have got a picture of Bob Novak, even more handsome than he is today. We are going to show that in just a second, if we haven't already.

But, first of all, you did go back at and look at some of your and Rowland Evans' columns, Bob. What did you find?

ROBERT NOVAK, CNN POLITICAL ANALYST: Well, I found that -- we had a column in the summer of '72 where we said that the political advisers -- unnamed, but I think can remember who they were -- had said, since the president, President Nixon, had nothing to hide, he should reveal everything.

And resisting that was none other than the White House counsel, we reported, John Dean, who said, "Don't tell them anything." Now, that is really ironic considering that Mr. Dean turned out to be the informer. But maybe Mr. Dean knew they did have something to hide.

WOODRUFF: Now, you are not going to tell us who was urging full disclosure?

NOVAK: No, a source is a source.

(LAUGHTER)

WOODRUFF: All right, now, what about the Liddy connection here? What was that column

(CROSSTALK)

NOVAK: We also did a column on the fact this G. Gordon Liddy, who had just been fired from the campaign committee in August for refusing to talk to the FBI, had also -- and this was an exclusive -- had been fired by the Treasury Department for insubordination.

And he had such sponsors in the White House that they saved him, put him on the White House staff a while, and then over at the committee. And we said they were still protecting him at the White House. You know, Gordon never did talk. And that column was so interesting that I got a phone call from a young reporter at "The Washington Post" that I was only dimly aware of who wanted to get some more details on this Liddy story. That was Bob Woodward. That was the first time I ever talked to Bob Woodward.

WOODRUFF: A familiar name.

All right, Bob, fast-forward to the Bush administration. You are hearing talk of the first departure from the Bush Cabinet.

NOVAK: Yes.

It seems like Norman Mineta, the only Democrat on the Cabinet, the secretary of transportation, is not in very good health. A lot of people don't think he's happy. A lot of people think he will not survive the summer. And the buzz is that he might be replaced by Tom Ridge, who is now the homeland security director.

There's also been some reports that the first secretary of homeland Security would be Andrew Card, the chief of staff at the White House. But I'm not quite sure that that is accurate. But that is the talk inside Washington right now.

WOODRUFF: Finally, real quickly, Bob, tonight in Manhattan, some fund-raising for a few Republicans?

NOVAK: Yes.

You go -- if you want the gold, you go to New York City. And the candidates that the White House calls the three amigos, candidates in South Dakota, Minnesota, and Missouri, who are very hot items, talents, Coleman and Thune, are having a $1,000 cocktail party at the east side home of John Levy (ph), the billionaire. And then there's a $10,000 a person -- not a couple -- a $10,000 dollars a couple dinner later on at the home of another billionaire -- what is his name? Mallory Factor (ph). I knew I'd get it -- Mallory Factor.

So, if you have -- Judy, you can still make it up there. If you can rustle up for you and Al $22,000 dollars for the cocktail party and the dinner, you can eat with these rich Republicans.

WOODRUFF: All right, we will see you there.

Bob Novak, who has always got the inside stuff -- thank you, Bob.

Well, looking ahead to the next presidential election, we got some information today about which cities are vying to host the next Republican Convention in 2004. They are Boston, New York, New Orleans, Tampa, and Miami. All have submitted bids to host the GOP.

Now, the Democrats are also considering New York, Boston, and Miami, as well as Detroit. And that raises the possibility that both parties could hold their conventions in the same city -- final selections for both parties expected shortly after the 2002 elections. And now checking the headlines in our "Campaign News Daily": Massachusetts Republican Mitt Romney attended a residency hearing today in Boston. Democrats claim that Romney gave up his Massachusetts residency when he moved to Utah to manage the Winter Olympics. They asked for today's hearing in an attempt to disqualify Romney from the race for governor.

Republican gubernatorial candidate Bill Simon has picked up the endorsement of a California police group. The state organization of police and sheriffs announced their endorsement earlier today. In 1998, they endorsed Simon's opponent, incumbent Democrat Gray Davis.

Al Gore and Senator John Kerry are making sure their views will be heard in cyberspace. Senator Kerry recently purchased the domain names Kerry2004.com and Kerry2008.com, just in case he decides on a White House run. The Web site for Al Gore's political action committee is up and running at -- quote -- Leadership02.com. The site includes plenty of information on Gore and his political views, as well as the candidates the PAC is supporting in 2002.

Jeff Greenfield's version of "That '70s Show" is coming up next. Jeff looks back at a momentous year, for better or worse, for the president, for politics, and for pop culture.

(COMMERCIAL BREAK)

WOODRUFF: From Watergate, we take you across the river to a federal courthouse in Alexandria, Virginia, where attorneys for American Taliban John Walker Lindh are seeking to have some of the charges against him dismissed.

For the very latest, our own Bob Franken -- Bob.

BOB FRANKEN, CNN NATIONAL CORRESPONDENT: And the judge is explaining now why he has thus far turned down every request from the defense attorneys. First of all, there will not be a change of venue. The case will not be dismissed because of pretrial publicity. The judge said he believed that the case could be done fairly and could done fairly here, even though it's only nine miles from the Pentagon.

The other important ruling was his rejection of a claim that John Walker Lindh enjoyed combat immunity, an international principle. The government had said that, in fact, this was not even an issue that should be discussed in the federal court, that further consideration was foreclosed because the power rested solely with the president.

Well, the judge said that made him slightly nervous, but that he should give considerable deference to the president. But he decided the issue on the merits and decided that John Walker Lindh was in fact, in the court's opinion -- not just the president's -- an unlawful combatant -- Judy.

WOODRUFF: All right, CNN's Bob Franken at the federal courthouse in Alexandria -- thanks, Bob.

And now our own Jeff Greenfield is with us to add his own "Bite" to our Watergate anniversary coverage -- Jeff.

JEFF GREENFIELD, CNN SR. ANALYST: Well, Judy, 30 years is more or less the length of a generation. And for the generations that were around in 1972, Watergate will always be an especially vivid event. But, as you look back, you can see so many other events -- in politics, in the world at large, and in the popular culture -- that give meaning both to Watergate and to the real-life dramas that touch us to this day.

(BEGIN VIDEOTAPE)

(BEGIN VIDEO CLIP, "ALL IN THE FAMILY")

CARROLL O'CONNOR, ACTOR (singing): Guys like us, we had it made.

(END VIDEO CLIP)

GREENFIELD (voice-over): It was a politically-charged era even on prime-time television. "All in the Family," the first sitcom to deal directly with political and social issues, was the most popular show on TV.

And another program, "MASH, while set in Korea, clearly reflected the passionate debate that swirled around Vietnam.

(BEGIN VIDEO CLIP, "THE CANDIDATE")

UNIDENTIFIED ACTOR: Someone who has something he believes in.

ROBERT REDFORD, ACTOR: Whatever that means.

(END VIDEO CLIP)

GREENFIELD: On the motion picture screen, "The Candidate" with Robert Redford was the first film to portray accurately the look and feel of a political campaign. That same year, Francis Ford Coppola's "Godfather" offered a classic portrayal of the corrupting power of power.

(BEGIN VIDEO CLIP, "THE GODFATHER")

MARLON BRANDO, ACTOR: I'm going to make him an offer he can't refuse.

(END VIDEO CLIP)

GREENFIELD: The passings were symbolic as well.

J. Edgar Hoover, the first and only head of the FBI, died. He was, to some, a symbol of a government that spied on its own citizens. Yet, it was Hoover's FBI that refused to follow the White House and led Nixon to authorize a vast internal apparatus to watch its political enemies, the plumbers unit, they called it.

For President Nixon, 1972 should have gone down in history as a year of supreme triumph. In February, he broke a near quarter-century freeze by visiting communist China and redrawing the geopolitical map of the world. A few months later, Nixon was in Moscow meeting with Soviet leader Brezhnev, thawing out the Cold War. The Vietnam War was winding down. By the fall, Henry Kissinger could declare that "Peace is at hand," although a massive Christmas bombing was to precede the final accords in 1973.

Meanwhile, the Democrats were self-destructing. Early presidential front-runner Edmund Muskie faltered and was overtaken by Senator George McGovern, whose peace campaign split the party down the middle. And when McGovern's vice presidential partner, Senator Tom Eagleton, revealed that he had been treated for psychological depression, he was forced to leave the ticket. That November, Nixon won more than 60 percent of the popular vote and carried 49 states.

What is all but forgotten is that it wasn't just the Watergate break-in that would come back to haunt President Nixon.

(BEGIN VIDEO CLIP)

RICHARD NIXON, PRESIDENT OF THE UNITED STATES: Spiraling prices and costs.

(END VIDEO CLIP)

GREENFIELD: It was also his decision to impose wage and price controls in late 1971. By 1972, inflation was ready to burst upon the American economy. And a year or so later, that weakened American economy would undermine Nixon's popularity when he most needed it.

Even the world of sports, it turned out, had a message for us today, not at home, where Dallas beat Miami for the Super Bowl and where Oakland took the World Series from Cincinnati. The lesson came from the Munich Summer Olympics, when a band of Palestinian terrorists kidnapped members of the Israeli team. In the shoot-out, all 11 Israelis died. And the specter of a terror that could strike at the most unlikely of places was born.

(END VIDEOTAPE)

GREENFIELD: Now, there is one more legacy of that year that may be the most striking irony. Watergate would first fall on Republicans: a presidential resignation in '74, huge midterm losses, and the election of a Democratic president in 1976.

But the distrust of government that Watergate spawned would prove to be a huge assist to the arguments of conservatives, an assist that would, in 1980, put the conservatives' No. 1 hero, Ronald Reagan, in the White House -- Judy.

WOODRUFF: All right, Jeff Greenfield, looking back for us, thank you.

A player in the Watergate era and now shares his memories coming up next. Senator Fred Thompson tells our Jonathan Karl about the hearings that changed the nation and thrust him into the public eye.

(COMMERCIAL BREAK)

WOODRUFF: One man with a featured role in the Watergate hearings was the counsel for Senate Republicans. Now a U.S. senator himself, Fred Thompson joined our Jonathan Karl in the hearing room where the Watergate drama played out.

(BEGIN VIDEOTAPE)

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: So, Senator, the break-in eventually landed you in this room. And you talked about, in your book wrote that you wrote, the significance of this room.

SEN. FRED THOMPSON (R), TENNESSEE: Yes.

Well, you know, this room cries out seriousness. And, historically, it has been the setting for, I guess, just about all the major hearings the Senate has had.

KARL: And it was here that you questioned Alexander Butterfield about the White House taping system. And for the first time, the world learned that there had been taping in the Oval Office.

(BEGIN VIDEO CLIP)

THOMPSON: Mr. Butterfield, are you aware of the installation of any listening devices in the Oval Office of the president?

ALEXANDER BUTTERFIELD, WHITE HOUSE STAFF MEMBER: I was aware of listening devices. Yes, sir.

(END VIDEO CLIP)

THOMPSON: Up until that point, it had been kind of a he said/she said between John Dean on the one hand and the president's closest advisers, Haldeman and Ehrlichman, on the other. And so when we left that day, we knew that there was a tape there somewhere probably that would resolve some of that.

KARL: Your job started with confidential interviewing of potential witnesses, confidential, closed, no press. And you soon found that, straight after an interview, it would be in "The Washington Post." It would be on the Associated Press wire. And then you conducted your own little mini sting operation on an aide who you thought -- a Republican aide who you thought was leaking to the press. Can you tell me about that?

THOMPSON: Yes, he worked for another member of the committee. And that was back in the time that we thought that leaks were something that could be stopped.

So, I put out a bit of false information that only this particular aide had access to. And, pretty soon, it was in the papers. So, I went to the senator and said: "Look what I have got. Here's what your guy is doing." What I didn't realize, he was doing exactly what his senator wanted him to do.

(LAUGHTER)

KARL: The senator was just fine with him leaking this information.

THOMPSON: So much for my investigation. So, I just went on and tried to freeze him out as best I could.

KARL: Because you and Senator Baker had a choice. You could either be, potentially, defense counsel for the White House, defense counsel for the president, or you could get out there and be part of this investigation, try to uncover what was going on. Were you ever learning towards going towards that defense route? I mean, this was obviously a Republican president.

THOMPSON: Oh, yes, yes.

I know I tried to walk a fine line, to be prosecutorial when I thought it was appropriate and to be in a defensive mode when I thought it was appropriate. There was a lot of overreaching. You forget. When you catch your prey, a lot of excesses are forgotten about. And there were a lot of excesses. A lot of innocent people were hurt in that process. And I felt that was part of my job.

On the other hand, I felt it was part of my job to get to the truth and to be supportive of the truth and to make sure that there were consequences for some of these things that were done.

I remember Pat Buchanan, when he came up here, they weren't doing Pat right. They were going to sandbag him with some old memos and things. So, I called him up the night before and I said, "Here's what you are going to be questioned on tomorrow." So, we went over it all of it on the telephone. And, of course, he ate them up the next day.

KARL: Now, I understand that, on some of the tapes that have come out recently, you're mentioned. Nixon is talking about you. Have you heard any of this yet or have you heard what is said?

THOMPSON: No, I haven't heard it yet. I saw a transcript back a year or so ago -- these materials have been out there for some time, and I guess they are still coming out -- where are they discussing, "Who is this guy and where does he come from?"

KARL: "Who is this guy Fred Thompson?"

THOMPSON: Yes. "What is Howard Baker doing with him?" and all that. "We've got all these high-powered lawyers around Washington and he goes out into the country and gets this kid to come up here and do this."

KARL: All right, well, Senator Thompson, maybe we'll talk to you again on the 40th anniversary. But thank you very much.

(LAUGHTER)

THOMPSON: OK. Thanks.

(END VIDEOTAPE)

(BEGIN VIDEO CLIP)

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Coming up next, I'll show you what on-air personality lives behind this door.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

SCHNEIDER: I am Bill Schneider at the Watergate complex.

This is a 10-acre development with over 600 residential units. Now, down here, we have really a city within a city. There are stores there. There's a drug store, a supermarket, a dry cleaner, a barber shop where I have been known to have coiffure arranged.

(voice-over): When this President Bush came to Washington, one of his favorite Austin restaurants, Jeffrey's, followed him here and opened at the Watergate Hotel.

(on camera): I'm here with Henry Winston, who managed the Watergate complex since it was built in the late 1960s, and Gigi Winston, who is a property agent here at the Watergate.

Mr. Winston, tell us, what happened to property values after the Watergate break-in in the early 1970s? Did they go up or did they go down?

HENRY WINSTON, FORMER PRESIDENT, WATERGATE MGMT. CORPORATION: Oh no, up. It seems to be a continuous upsurge in Watergate properties, the values.

SCHNEIDER: Monica Lewinsky, we understand, lived here at the Watergate in her mother's apartment. What happened to her mother's apartment after they moved?

H. WINSTON: It was sold. We sold it pretty quickly after all this settled down. Senator Dole added it to his, who was right next door. So, he just -- he needed more space, so he took Monica's apartment.

SCHNEIDER: Gigi, you sell units here at the Watergate.

GIGI WINSTON, REALTOR, WINSTON & WINSTON: Yes.

SCHNEIDER: Can you give us some idea of what the range of prices is for apartments here?

G. WINSTON: Sure.

We have a pretty good range of prices. The efficiencies start about $160,000 and up. And one-bedrooms start about $275,000 and up. And the two-bedrooms go anywhere from $400,000 to about $2 million, with one of the largest ones being a penthouse that's three put together. And it's on the market for $5.95 million.

SCHNEIDER: Now I want to show you one part of the Watergate very few investigators have ever seen: my apartment. You get a great Potomac River view here, marred only by the occasional presidential helicopter going to and from the White House. But you do get to wave to the president.

You know what they say about real estate: location, location, location. Well, my apartment is located directly between the hotel, where the Watergate burglary was planned, and the Watergate office building, where it took place, just outside my kitchen window.

In here is my home office, where a lot of important political analysis has taken place, but no criminal activity that I am aware of. I did once get a telephone call at 6:00 a.m. on a cold January morning in 1998. It was from a CNN producer who asked me breathlessly if I could get her and a crew into the Watergate.

It seemed that one of my neighbors was reported to be having an affair with the president of the United States. To make a long story short, charges were brought, but no one was convicted, which was a relief to those of us who live here, because, if another president had been forced out of office and it was connected to the Watergate, imagine what would have happened to property values -- Judy, back to you.

(END VIDEOTAPE)

WOODRUFF: All right, Bill Schneider inside the Watergate.

That's it for INSIDE POLITICS. Thanks for joining us. "WOLF BLITZER REPORTS" is next.

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