How Reagan saved the Watergate

The following is an excerpt from The Watergate: Inside the Nation’s Most Infamous Address, a book about the Washington, D.C. landmark written by veteran political strategist Joseph Rodota. 

“We’ve never had so many established Congressmen lose their jobs,” said a Washington real estate agent in early December 1980. A total of 44 Democrats in Congress – 32 in the House and 12 in the Senate – lost their reelection campaigns in the 1980 Reagan landslide.

Watergate sellers started raising prices on their apartments within days of the election. A two-bedroom duplex that had been on the market for nearly a year at $325,000 was relisted at $350,000. The owner of a one-bedroom apartment put his unit up for sale five days after the election at $300,000. “That’s about $100,000 more than one-bedrooms sell for,” scoffed a real estate agent. “He’s just trying to make a killing.”

Local real estate observers believed the Reagan appointees, coming to town from expensive Southern California, would not be deterred. “Prices don’t scare them,” said one agent.

Before the election, the Watergate Hotel prepared two budgets: the Carter Budget and the Reagan budget. The Reagan budget was considerably higher. In the first five months of 1981, the hotel spent nearly $1 million to accommodate its new Republican guests. There were fresh raspberries from Chile, chocolate truffles, orchids, copies of the Los Angeles Times on doorsteps in the morning and marzipan elephants placed on pillows every night. “Their whole lifestyle is so unlike anything in Washington,” gushed a hotel employee. “They’re our royalty.”

Nancy Reagan and her California girlfriends referred to themselves simply as “the Group.” They traveled in a pack. They threw parties for each other. They dined regularly at Jean-Louis, as often as three times a week. “They’re the Gucci coochi cost too muchi group,” said Watergate South resident Victor Lasky, a former speechwriter for Richard Nixon and Martha Mitchell, the outspoken wife of Nixon’s attorney general John Mitchell.

At the Watergate Salon, Antonio Buttaro reported business was up 25 percent since the Reagan crowd arrived. Regulars called it the “Gossip Salon,” a place where the women shouted above the din of blow dryers and traded notes about who was leaving the Reagan administration, who was coming in and who they saw at an embassy the night before. “Most of ‘emdon’t even have a bottle of shampoo at home,” said Tom Gerhart, a Watergate Salon stylist. After four years of the Carter administration – when women boasted in the newspapers they did their own hair – Buttaro was elated. “The business has changed completely,” he said. “Before it was peanuts. Now it’s different.”
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The Reagan renaissance at the Watergate lasted about a year. Lee Annenberg was the first member of “the Group” to leave. After only seven months on the job as chief of protocol, living in the Watergate Hotel during the week while Walter managed his media empire from Philadelphia, she submitted her resignation. “I adore my job,” she said, “but my husband comes first.”

In the fall of 1981, the hottest-selling postcard around Washington depicted First Lady Nancy Reagan wearing a gold crown studded with jewels and an ermine cape. The caption: Queen Nancy. Johnny Carson joked her favorite food was caviar. Michael Deaver, the White House aide overseeing the First Couple’s public image, was relieved when the Watergate crowd started to disperse. Lunches at Jean-Louis, and the constant round of cocktail parties, were undermining the Reagans’ purpose in Washington, said the first lady’s press secretary, Sheila Tate.

From the perspective of the battered Watergate, it didn’t matter. According to hotel vice president Peter Buse, a page had been turned. “We are no longer the Nixon Watergate.”
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Ed’s Note: On Thursday, March 8, Rodota will sign books and read from The Watergate: Inside America’s Most Infamous Address, at Time Tested Books, 1114 21st Street in Sacramento. The 7 p.m. event is free and open to the public.