Preheat oven to 350 degrees F (175 degrees C). Grease a 9x13 inch baking pan.
In a medium bowl, cream together the 1/2 cup butter and sugar. Beat in the eggs one at a time, then stir in the vanilla. Combine the flour, baking powder, and salt; stir into the creamed mixture until well blended. Stir in the 1/2 cup walnuts. Spread batter into the prepared pan.
In a medium saucepan over medium heat, melt the 1/2 cup butter. Stir in the evaporated milk. Bring to a boil and cook for 5 minutes, stirring constantly. Remove from heat, and stir in the confectioners' sugar and 1/4 cup chopped walnuts. Pour over the cake batter.
Bake in preheated oven for 25 to 30 minutes, or until a toothpick inserted into the center of the cake comes out clean. Cool before serving.
Interesting Facts
The name “Watergate Cake” comes from the scandal involving President Richard Nixon, which took place in the 1970s.
The Watergate Cake has been a popular dessert in the United States since the 1970s.
The topping for this cake is a combination of evaporated milk, butter, confectioners’ sugar, and chopped walnuts.