Capital city capers are as American as apple pie

0 Comments | Insight on the News, Jan 6, 1997 | by Stephen Goode

In his 1992 book, Stealing From America: A History of Corruption From Jamestown to Reagan, political analyst Nathan Mill shows that political and financial corruption in this country are as American as apple pie. He probably is right. But sometimes that apple pie has been made of apples a lot more rotten than usual - as we are beginning to see in the Lippo scandals now breaking around President Clinton and the Democratic National Committee.

Three occasions stand out: Watergate under President Richard Nixon; President Warren Harding's Teapot Dome and related scandals of the early twenties, whose existence only was beginning to be known when Harding died Aug. 2, 1923; and the scandal-ridden two terms of President Ulysses S. Grant - 1868 to 1876 - which take the dubious prize for being years when the morals and behavior of elected officials in Washington, rarely held in high esteem, were at their lowest ebb.

Interestingly, each low point followed or was proximate to a war: Grant's, the Civil War; Harding's, World War I; and, for Nixon, the Vietnam War, which the president had wound down before he resigned from office. Well over a century ago the incorruptible Sen. George Hoar of Massachusetts noted the tendency of war to loosen men's morals. Writing about the corruption and abuse of the Grant years, Hoar said that these problems, which he found as serious a threat to the nation as the Civil War itself, "then, as always, followed a great war. Unprincipled and greedy men sought to get contracts from government by aid of influential senators," he wrote. "This corruption not only affected all branches of the Civil Service ... but poisoned legislation itself."

Corruption under President Grant was pervasive, indeed. Grants second-term Secretary of War, William Belknap, for example, sold off to the highest bidders the jobs of Indian trader on the nations reservations, receiving a kickback of $25,000 for any one of those appointments - a tremendous sum at the time.

Grant's private secretary, Gen. Orville E. Babcock, unblushingly accepted gifts such as diamond shirt studs (valued at $2,400) and a thousand-dollar bill hidden in a box of cigars. The indefatigable Babcock also connived with officials in Grant's Treasury Department to defraud the government of millions of dollars in taxes in the socalled "Whiskey-Ring Scandal" centered in St. Louis.

The list goes on. Before a congressional investigating committee, a Navy officer testified that a million board feet of lumber purchased by the Boston Navy Yard simply disappeared - and no one seemed concerned, he said.

But the big scandal under Grant involved Congress, several of whose most powerful members received stock in an illegal scheme called the Credit Mobilier, a fancy name for a company organized by promoters of the Union Pacific Railroad to hide and divert to themselves profits from the construction of the transcontinental railroad.

The profits likewise were diverted to select (and powerful) members of Congress and to Schuyler Colfax, Grant's vice president. Out of 18 senators and representatives offered stock as a bribe by Credit Mobilier, only four declined. A committee appointed by the Republican-dominated Congress - this was not a surprise - exonerated each of those accused of taking bribes, all of whom were Republicans. During the investigation, it was discovered that Colfax had taken a bribe to help a friend procure a government contract - a finding that helped to bring his political career to an end, although no one else of high standing suffered a similar fate.

Comparing the scandal to scandals of the previous century, the historian Henry Adams, two of whose ancestors had been U.S. presidents, wrote, "The worst scandals of the 18th century were relatively harmless by the side of this which smirched executive, judiciary, banks, corporate systems, professions and people, all the great active forces of society."

The corruption of the Harding years similarly was pervasive. Col. Charles R. Forbes, an acquaintance of the president's whom Harding had appointed head of the Veterans' Bureau (the budget of which then accounted for one-fifth of federal expenditures), got caught profiting from the sale of excess war materials and taking kickbacks for the building of veterans' hospitals. When an attorney employed by the Veterans, Bureau committed suicide during congressional investigations into Forbes, activities, the scandal reached fever pitch.

Harding's appointment as custodian of alien property illegally sold a patent under his care and was dismissed from office. But the big scandal under Harding involved the lease of government oil lands by Secretary of the Interior Albert Fan.

Fall, a New Mexico rancher in need of money (Cabinet salaries at the time were $12,000, and Fall had spent lavishly adding land to his ranch), leased a government reserve called Teapot Dome (with the connivance of Navy Secretary Edwin Denby, a close Harding friend) to oilman Harry Sinclair for $304,000. From oilman Edward Doheny ny he received $100,000 for the Elk Hills oil reserve in California.