In his book Gambling With History: Reagan in the White House, Laurence Barrett provided an in-depth account of the Reagan administration's first two years. He also mentioned that during the 1980 presidential campaign, briefing papers to be used by Jimmy Carter in preparation for the October 28 debate with his Republican challenger had somehow been acquired by Reagan's team. The papers gave Reagan advance warning about the issues his opponent would raise. It was a dirty trick, said Barrett, Time's senior White House correspondent, and he surmised that a Reagan "mole" had "filched" the papers. The story broke wide open in the summer of 1983, after Gambling With History hit the bookstands. Though some politicians and journalists dismissed it as a tempest in a teapot, Debategate, as it came to be known, caused Reagan big problems. While some Americans disagreed with his policies, most believed him to be a man of integrity; Debategate raised questions whether that was true.
During a June 28, 1983 news conference held in the East Room of the White House, nearly half of the questions fired at Reagan concerned the briefing papers. The president handled the Q&A session maladroitly, denying having known that such material had been acquired by his campaign staff and dodging the ethical issue entirely. He agreed with House Speaker Tip O'Neill (D-Mass.) that even if Carter's papers had been used it wouldn't have made any difference in the outcome of the election. (This was one of the few times Reagan and O'Neill, a staunch liberal, saw eye to eye.)
David Stockman, the controversial head of the Office of Management and Budget, admitted using the Carter material while helping Reagan prepare for the debate. Chief of Staff James Baker remembered getting the papers from CIA Director William Casey, who had been Reagan's campaign manager in 1980. But Casey could not recall ever having seen such documents. The Justice Department prompted an FBI inquiry into the matter, while a House subcommittee looked into it, too. The White House cooperated with both investigations. The big question wasn't whether the briefing papers had given Reagan an unfair advantage, or even whether they had been acquired illegally -- if they had been stolen by a Reagan "spy" as opposed to being leaked by someone in the Carter camp. The real issue was Ronald Reagan's ethics. Some Democrats welcomed the scandal and called for a special prosecutor. A Newsweek-Gallup poll revealed that two-thirds of Americans suspected the Reagan campaign of having done something wrong.
The investigation turned up hundreds of pages of documents from the Carter campaign in Stockman's files as well as in Reagan's campaign archives at Stanford University's Hoover Institute. One document, an itinerary for Carter during the week prior to Election Day, had "report from White House mole" written on it. This seemed to confirm Barrett's conclusion that the material had been stolen. But U.S. News & World Report indicated that the document in question had been volunteered by someone working for Carter. Other papers were turned in to theWashington Post by a collector of political memorabilia who, in October 1980, had exhumed them from a dumpster behind Reagan headquarters in Arlington, Virginia. The press speculated that the Reaganauts had been concerned that Carter would pull an "October surprise" during the campaign -- cutting a deal with the Ayatollah Khomeini for the release of the 52 hostages held for over a year by Iran, a bombshell that some believed might have sent Carter back to the White House for four more years. Newsweek wondered whether a clandestine operation involving ex-CIA agents had been undertaken by the Reagan team to keep close tabs on the Carter campaign. This was confirmed by Time in its July 25, 1983 issue. According to that report, William Casey brought in former agents of both the CIA and the FBI to gather information from colleagues who were still with that agency. Jimmy Carter complained that the pilfered documents revealed the "essence" of his campaign, implying that his reelection bid had been done great harm when they fell into Republican hands.
The growing scandal exacerbated the conflict between administration moderates like Baker and Stockman and conservatives such as Casey and National Security Adviser Richard Allen. The rival factions were constantly vying for Ronald Reagan's soul during the first term. Pundits ventured to guess that someone high up in the administration would have to fall on his sword before Reagan could put Debategate behind him. But even while he made clear his determination to shed light on all details of the scandal, the president refused to allow any of his staff members to be used as sacrificial lambs. No one, he said, would be left "twisting in the wind."
Interest in Debategate, however, quickly subsided. In a New York Times interview, Bill Casey emphatically denied any involvement, and no conclusive evidence could be found to implicate the CIA chief. Meanwhile, the press wondered whether it was "making much ado about nothing," as Reagan claimed. The Watergate scandal had caught much of the press corps napping, and by 1983 even a whiff of scandal could trigger a media feeding frenzy that was sometimes out of all proportion to the issue at hand. Presidential historian Theodore White commented that unethical political campaigns were the norm, and the public began to view Debategate as a real yawner. On the whole, Americans were much more interested in an economy that was finally starting to hum in the wake of the 1981-82 recession, especially since the investigations failed to uncover a clear violation of the law. In a matter of weeks the press got bored and moved on to other things. But Debategate was evidence of a political truth -- that for all post-Watergate presidents even the appearance of impropriety could result in a firestorm of hard questions and bad press.