As the Ohio primary approached, Obama was steadily closing what a month earlier had been a 20-point lead in the polls. He pointed out that the NAFTA trade agreement was a centerpiece of Bill Clinton's term and that it cost massive numbers of industrial jobs. Instead of creating a trade-fueled boom, NAFTA helped hollow out America's industrial base, with over 200,000 manufacturing jobs disappearing in Ohio alone since the 2000 election. Even Republicans I talked with while calling the state just before the primary made clear that they thought it was a disaster.
Given these sentiments, Hillary chose not to defend her husband's actions, but instead claimed Obama was distorting her position because she'd privately opposed the agreement at the time, had "long been a critic" and now similarly supported stronger labor and environmental standards. Echoing her reinvention on the Iraq War, these claims were flat-out nonsense. As David Sirota points out, she'd praised NAFTA repeatedly in public settings from the time of its inception, even praising corporations for mounting "a very effective business effort" on behalf of its passage. And as Obama highlighted their contrasting positions and approaches on this and other issues, he was gaining in the polls.
Then, on Feb 27, the Canadian network CTV reported that even as Obama was publicly attacking Bill's role in NAFTA, and arguing for a drastic overhaul, he'd had key economic advisor Austin Goolsby arrange a meeting with the Canadian ambassador where Goolsby reassured them that this was all just "political positioning," pandering for campaign trail. The likely source of the anonymous Valerie Plame-style leak was right-wing Prime Minister Stephen Harper's Chief of Staff, Ian Brodie, and US media jumped all over it as proof of Obama's hypocrisy. The Canadian embassy denied the story and Obama also said it was false. A follow-up March 3d leak then sent a supposed memo summarizing the meeting to the major US media outlets, quoting Goolsby as saying Obama's statements were more "political positioning than the clear articulation of policy plans." Clinton made the controversy a centerpiece of her home stretch speeches and ads, saying "You come to Ohio and you both give speeches that are very critical of NAFTA and you send out misleading and false information about my position regarding NAFTA and then we find out that your chief economic advisor has gone to a foreign government and basically done the old wink wink, don't pay any attention this is just political rhetoric." She even ran a radio ad that misleadingly presenting itself as a news story, which concluded, "As Senator Obama was telling one story to Ohio, his campaign was telling a very different story to Canada."
These attacks unquestionably made a difference. They flipped voter perceptions on an issue where Obama should have had a key advantage. In 1994, union, environmental, and social justice activists were so angry at Clinton's staking all his political chips to pass NAFTA that many sat out that critical election, helping lead to Gingrich's win. Now Clinton ended up getting a majority the 55 percent of Ohio voters who expressed a sense "that trade takes jobs away," a majority of those worried about their family's economic situation, and a majority of union members, whom Obama won in his recent victories. She won a 10 percent plurality in a state where Ohioans overwhelmingly picked the economy as the top issue. And she won overwhelmingly with late-breaking voters, the opposite of practically all of Obama's other campaigns. Most important, by casting doubt on Obama's integrity, the cornerstone of his campaign, they made him seem like just another hack politician who'd say anything to win. This gave the supposed scandal a probable impact in Texas and Rhode Island as well, even though NAFTA was less of a central issue there.
But as the CBC report and others makes clear, the core of the story turned out to be false. The Canadian government contacted Goolsby to clarify Obama's position on trade, not the reverse. Although Goolsby did meet with Canada's Chicago consul general George Rioux (not, as was reported in the original leak, Ambassador Michael Wilson), there's no evidence that he ever described Obama's position as mere political posturing. Instead, Goolsby responded to Canadian questions by clarifying that Obama wasn't pushing to scrap the agreement entirely, but that labor and environmental safeguards were important to him. The memo was simply inaccurate, as even the Harper government now acknowledges after a firestorm of criticism by opposition parliament members, who've accused the Harper government of trying to help their Republican allies across the border by trying to take down the likely and stronger of the Democratic candidates. In response, Harper called the leak "blatantly unfair," pledged to get to the bottom of it, and said "there was no intention to convey, in any way, that Senator Obama and his campaign team were taking a different position in public from views expressed in private, including about NAFTA."
As Matt Wallace writes in the Daily Kos, "this scandal was manufactured out of whole cloth. Goolsbee said something consistent with Obama's official position--that he wanted protections added, but it wasn't going to be a fundamental change or revocation of NAFTA, and that Obama was not a protectionist. This was morphed somewhat going into the memo, and now the embassy admits they "may have misrepresented the Obama advisor." Even after the memo misrepresented Obama, the Harper government took it a step further and then leaked a completely fantastic version of the story to the press, in order to maximize the bloodletting."
The Harper government has now apologized for any interference in an American political campaign, but the damage is done. Clinton had other factors that benefited her this round, including pretty questionable ones. Her 3:00 AM ad echoed the worst of Dick Cheney and Rudy Giuliani. When asked if she'd "take Senator Obama on his word that he's not a Muslim," she left the door open to the right wing lies by saying "there's nothing to base that on. As far as I know." She just handed McCain his campaign script by saying, "I think that I have a lifetime of experience that I will bring to the White House. I know Senator McCain has a lifetime of experience to the White House. And Senator Obama has a speech he gave in 2002." These, taken together with a week of media framing that the respected Project for Excellence in Journalism described as overwhelmingly critical of Obama, and initial twenty five-point margins based on name familiarity and insider connections, also contributed strongly to her Ohio victory. Back-to-back sympathetic Saturday Night Lives shows (the first after the strike) probably helped as well, as did support from popular governor Ted Strickland. Clinton may even have benefited from Rush Limbaugh's exhortation to his listeners to cross over and vote for her to keep the Democrats bloodying each other up. But "NAFTAgate" was key. Without it her victory would have been non-existent or minimal. The nine delegates Clinton netted from Ohio can't be changed, but the salience of this lie casts into doubt everything she says about the lessons of this victory.