Why DOJ Is Reviewing the Watergate Investigation More Than 50 Years Later

More than 50 years after Watergate, the Justice Department is reviewing how prosecutors handled the case. Plus, already high mortgage rates just had their biggest weekly increase in four years. The economic conflict that's been running in parallel with the actual drones and missiles that have been flying has these ripple effects that are set to extend for the coming weeks if not months. And Mattel has drawn takeover interest from Authentic Brands Group. It's Thursday, October 1st. I'm Alex O'Solev for The Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today. It's been more than 50 years since the Watergate scandal that led President Richard Nixon to resign. Now, the Justice Department is looking back at the case. The journal has learned that the Department is reviewing whether the special prosecutor's office that investigated the break-in back in the '70s committed misconduct. For more, I'm joined now by WSJ White House reporter Philip Wegman. Phil, what is the DOJ looking at? The Office of Professional Responsibility, which is actually part of the Department of Justice that was created in the wake of Watergate, is taking a closer look at whether or not the Watergate Special Counsel violated the due process rights of some of the folks who were wrapped up in the Watergate scandal. What are some of the actual documents they're going to be looking at here? What kicked this off was an invitation from the Department of Justice to a fellow named Jeff Shepard. He is a former Nixon aide. He's become one of the foremost Nixon revisionists. So he goes to the Department of Justice with this information. They hear him out after listening to a 78-page slide deck. It's a meeting that lasts more than two hours. What he brings them is original source material, memos from the moment in time that are contemporaneous and are legitimate. What he argues is that the prosecution, they had meetings with the judge outside of the court. Vocatory evidence was denied from the defense. And so his argument is that they got a broad deal. And that is the evidence that has been brought to the Department of Justice. They're taking a closer look at it now. What has been the DOJ's response to your story? The Department of Justice noted that Shepard was brought for an interview and that they have not started an investigation, but that the Office of Professional Responsibility is looking into it. They are examining the allegations that Shepard has made and they are testing the soundness of the evidence that he's presented. Conservatives have been showing some renewed interest in Nixon as you've reported. Is that carrying over to inside the White House? President Trump is fascinated by Richard Nixon. The president has asked former Nixon aids, why was it that Nixon resigned? Why didn't he fight it out? And it's more than just a question of historical interest. Instead, there are real political ramifications here for how the conservative movement operates moving forward. Earlier this year, Vice President JD Vance was at the Nixon Foundation himself. If you look at the story of how the deep state took down Richard Nixon, it's not all that different from what the same groups of people, the same institutions tried to do to Donald Trump and the first Trump administration. And onstage, not only did he make this argument that the same people who took down Richard Nixon are trying to take down Donald Trump, i.e. the media and the Justice Department. But he said that perhaps Republicans should look to the coalition that Nixon built rather than the ones that Reagan was able to put together. What could be the outcome here if there's found to be any misconduct? Because Watergate was more than 50 years ago, a lot of the people who were involved either are no longer employed or have died. That's to be determined. And it's at the top of my reporter's notebook because this is really unprecedented. That was WSJ White House reporter Philip Weigman. Thanks, Phil. Thank you so much. The family of Renee Good, the Minnesota woman fatally shot in her car by an ICE agent in January, has filed two wrongful death lawsuits in U.S. District Court in Minnesota. And seeks to hold the U.S. government responsible for the actions of the agent. The agent, Jonathan Ross, hasn't been criminally charged. It wasn't immediately clear if he had a lawyer. The other lawsuit takes a wider look at the operation that brought thousands of federal agents to Minnesota last winter. The suit alleges that Good's killing was part of an unlawful conspiracy to target the state's Hispanic and Somali residents. The Good Family's attorney, Antonio Romanucci, spoke at a press conference about the lawsuits today. We are focused on the extraordinary overreach of the federal government and federal agents who use the aggressive tactics that ignored well-established protocols in training for law enforcement officers and used excessive and unnecessary force, causing countless U.S. citizens and legal residents to become collateral damage. The White House, DHS and ICE, didn't respond to requests for comment. In national security news, U.S. officials say the Pentagon is sending a third aircraft carrier and more marine coarships to the Middle East. That'll mean up to 10,000 more troops in the region. The Wall Street Journal has reported that President Trump is considering striking Iran again after next month's midterms. And those additional troops would arrive in the region by the end of November. Police in the United Kingdom have arrested a dual U.K.-Iranian national on suspicion of preparing a terror attack. U.S. investigators continue to probe the foiled attack on an air force base. Yesterday, U.K. Prime Minister Andy Burnham said there were, quote, "strong indications that Iran was linked to the aborted plot and investigations are exploring whether Iran used potentially unwitting criminal proxies to orchestrate it." Iran's embassy in the U.K. has said it rejects attempts to link Iran to the incident. And the United Arab Emirates has opened an investigation into the cockpit stabbing on board a fly Dubai flight bound for Israel. The UAE investigation will look at all possible motives, including terrorism, of particular concern to a region already on edge because of the war in Iran. After the plane's emergency landing in Saudi Arabia, the Saudi interior ministry says its preliminary finding was that the co-pilot assaulted the pilot. Both pilots left Saudi Arabia for Abu Dhabi today, accompanied by an Emirati security team, as the investigation gets underway. Coming up, more oil tankers are making their way through the Strait of Hormuz, that was supposed to provide some relief at the pump and help bring down bond yields. So why hasn't it? More after the break. You heard all about the pain of high mortgage rates on this morning's show, and they're only getting higher. Today, Freddie Mac said that rates for the 30-year mortgage jumped from just over 7 percent to 7.28 percent this week. That's the biggest increase in four years. Rising rates make buying a home more expensive, and they're one of the clearest signs of how the recent bond market sell-off has spilled into the broader economy. And now we're going to talk about oil. Traffic is rebounding in the Strait of Hormuz as Iran's control of the crucial waterway weekends, which should help bring down oil prices. But international oil is trading at about $100 a barrel, and prices at the pump remain high in the U.S. at over $4.40 a gallon on average. Journal Marcus reporter David Uberti is here to discuss. David, yes, we're seeing more traffic in the Strait, but at the pump, for example, we're not really seeing prices decline. Why not? There's still this series of interlocking threats that are squeezing the oil market like a vice. And at each stage of the supply chain that turns crude oil into products, costs are snowballing even outside the Strait of Hormuz. So even as there has been this uptick in tanker traffic, the ways in which tankers are making their way through that waterway is incredibly opaque, and at the same time, the actual cost of moving that oil, the freight rates, that is at or near unprecedented levels right now. The actual cost of refining that crude and bringing it to market hasn't gone down, and traders on Wall Street are betting that costs won't come down anytime soon. What is a more open Strait of Hormuz supposed to do? There's this hope in the oil market that once tanker traffic resumed through the Strait of Hormuz, energy prices might ease, and then bond yields would follow that. Why do those tend to move in tandem? Oil goes up, inflation goes up, and then bond yields follow from that vantage point. If inflation is higher than the Federal Reserve's 2% target, the Federal Reserve is more likely to raise rates in the future, and that's the major queue that bond traders take that ultimately helps dictate what bond yields do on any given day, and in turn shapes the way you pay for your mortgage or you might pay for your credit card bill as well. Right, and what other impacts is this having on consumers? For now, gasoline prices are extremely elevated. Diesel prices continue to be at or near records across the United States, and especially with a diesel, which is a key input to the industrial economy. That is filtering through to the cost that farmers pay during harvest season, is filtering through to the cost manufacturers pay their trucking and freight firms to move products across the country, and those prices will continue to be passed on to consumers in the weeks and months ahead was just goes to show how this conflict is going to have a very long tail in terms of its economic impact. That was WSJ Market's reporter David Uberty. Thanks David. Thank you. Today, however, yields of U.S. bonds reversed course. After hitting a new 24-year high this morning above 5.3%, the benchmark 10-year treasury yield retreated, finishing the day at 5.23%. Some traders noted that investors were moving out of government bonds seen as more risky. A reminder, yields moved in the opposite direction of prices, so investors sold off French, Italian, and Greek bonds driving their yields higher, and meanwhile investors piled into the bonds of the U.S. and Germany. In stock markets, U.S. stocks finished the day not that much different from yesterday. All three indexes were slightly higher with the S&P 500 leading the gains and adding 0.2%. We're exclusively reporting that Mattel, the company behind Barbie and Hot Wheels, recently attracted takeover interest from a company that licenses brands. That company called Authentic Brands Group has made an approach to Mattel. The journal understands that Authentic has been privately discussing an offer that could value Mattel at more than $20 a share, or around $6 billion or more. Mattel shares have dropped by more than 30% this year, and shares fell again yesterday after Mattel named a new CEO. Roger Lynch, from the media company Condé Nast. There's no guarantee that Mattel will be receptive to Authentic's approach, or that the two sides will reach a deal. Lynch's pending appointment as the new CEO could complicate a deal as he tries to figure out his strategy. And one person has told the journal that a formal sale process for Mattel isn't currently underway. Today, the stock closed up almost 19%. And that's what's news for this Thursday afternoon. Today's show is produced by Anthony Bansi and Danny Lewis, with supervising producer Tali Arbell. I'm Alex Osalov for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.