The comments were a stereotyping ethnic slur. Dean wasn't using a telephone as he listened in, so he felt no state law would be broken if he repeated Butz' words to the press. President Ford had to confront Butz as the press gave no options. A decade later, Secretary of the Interior James Watts referred to a physically-challenged person who had been appointed to a federal board with another word. After his press bashing, he resigned from the Reagan cabinet.
Loose lips sinks ships, loose lips cause cabinet members to lose their jobs.
Past associations also cause others to be denied positions. One of Richard Nixon's Supreme Court nominees was discarded because he had been a member of a club that was racially exclusive. Loose lips of people standing next to Republican candidates can also cause them to lose their elections. In 1884, as Republican presidential candidate James G. Blaine was being introduced for a speech in the latter days of his contest with Democrat Grover Cleveland, he may not have been paying attention. In any event, after the introduction, Blaine simply got up and made his speech.