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The scandal in question was the XYZ Affair, in which American diplomats were asked to give bribes to the French in return for peaceful negotiations over the Americans' passage of the Jay Treaty. The "XYZ" refers to the three French agents involved in the negotiations.

The Jay Treaty served to ease tensions between the United States and Great Britain, which was not appreciated by the French. They saw it as a threat, and after its passage proceeded to seize American ships. In response, three men were sent to try and negotiate with the French. It was during these negotiations that the bribe was demanded. The three Americans, John Marshall, Elbridge Gerry and Charles Cotesworth Pinckney were taken aback and refused to comply.

The talks deteriorated. Back in the United States, President John Adams was pressured into revealing the details of the XYZ Affair, igniting anti-French feelings in the country. What followed was a two year long undeclared war known as the Quasi-War, which ended in 1800.

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