Sunday, October 3, 2010

Harry M. Daugherty

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The controversial existence of Harry Micajah Daugherty in the world of politics is probably best exemplified by the fact that his name is linked with a key phrase in underhanded wheeling and dealing: "the smoke-filled room." In 1920, Daugherty served as the campaign manager for longtime friend Warren G. Harding, a Republican senator from Ohio. Harding was not expected to be a favored choice, but sometime before the summer convention Daugherty made an odd declaration. "At the proper time after the Republican National Convention meets some 15 men, bleary-eyed with loss of sleep and perspiring profusely with the excessive heat, will sit down in seclusion around a big table," he said. "I will be with them and will present the name of Senator Harding to them, and before we get through they will put him over."

The prediction, which basically said Harding would be chosen out of frustration, may have cost Daugherty a seat at the convention as a delegate-at-large. After all, he was openly saying that he and other political bosses, likely men of the "Ohio Gang" of Harding backers, would wield more power at the convention than the delegates.

Daugherty proved rather clairvoyant in his statement, however. The convention at Chicago ground its way through several ballots, unable to reach a consensus on the Republican ticket for the year's presidential contest. Several political bosses met in a hotel room made hazy by the cigar smoke and decided that if the deadlock could not be broken, Harding would be an acceptable choice. Daugherty and other members of the Harding team helped by raining pro-Harding postcards down on the convention from the rafters. Finally, on the tenth ballot, Harding was selected with Governor Calvin Coolidge of Massachusetts as his running mate.

Daugherty's prediction had come true, but it would hardly do him any favors. For the rest of his political career, he would be waylaid by enemies accusing him of incompetence or complicity in the corruption that emerged under Harding's presidency.

Daugherty was born in Washington Court House, Ohio in January of 1860. He pursued a legal career, which included a period serving as the Fayette County prosecuting attorney. This morphed into a political path, as he was elected a township clerk for the county, served two terms on the city council of Washington Court House in the late 1880s, and held a seat in the state house of representatives from 1890 and 1894.

From there, Daugherty sought to go on to bigger and better things, but never with any success. He made failed bids for the nominations for Ohio attorney general in 1895 and governor in 1899, and wasn't able to get the Republican nod for the Senate races in 1910 and 1916. In 1912, he contented himself with managing the Ohio campaign of Republican presidential candidate William Howard Taft. It marked yet another flop on Daugherty's record, as Taft not only failed to best Democratic candidate Woodrow Wilson but also tallied fewer votes than former President Theodore Roosevelt's third party bid. During these dry years, Daugherty supported himself by representing corporate interests and acting as the vice president of the Columbus Savings and Trust Company.

After Harding was selected as the Republican presidential nominee in 1920, Daugherty continued to be a close compatriot. He accompanied the candidate on all of his speaking engagements and served on the campaign's legislative committee. Along with other bosses ushering Harding toward the election, Daugherty earned the scorn of Democratic presidential candidate James Cox, another Ohioan and governor of that state, when Harding declared himself "the freest man that was ever nominated by any party for the presidency." Cox fired back that Harding was essentially in the pocket of big business and asked, "What promise have you made to Harry M. Daugherty, corporation lobbyist, and what promises was he authorized to make in your behalf in order to secure your nomination at Chicago?"

Harding was nevertheless able to win the 1920 election, and in February of the next year Harding announced that he was appointing Daugherty to the post of Attorney General. The favor, along with Daugherty's character, continued to draw ire for some time after. When Harding reportedly cautioned newspapers against printing criticisms of Daugherty, Democratic Senator Augustus Stanley of Kentucky asked, "Will the President say in his desperation to shield his friend, Harry M. Daugherty, that senators and representatives who denounce the nefarious and crooked operations of a political broker are 'political blackguards?'"

The Attorney General did find some support amid the rash of accusations that befell him, however. In July of 1922, the Ohio bar passed a resolution proclaiming their support for Daugherty, charging that "certain propaganda has been made in Congress and in the press tending to discount and discredit the service and character of Mr. Daugherty."

Daugherty still took plenty of flak from opponents. One of the earliest things to come across his desk was the case of Eugene V. Debs, a Socialist leader charged under the Espionage Act for utterances made against World War I in Canton, Ohio. Debs had been convicted in June of 1917 and sentenced to 10 years in prison in September of 1918. Following an unsuccessful appeal, Debs began serving the sentence in April of 1919; he was eligible for parole in August of 1922, with the sentence scheduled to end in December of 1925 with good conduct.

Daugherty considered the original sentence too harsh, since it didn't take Debs' age (61 at the time of conviction) into account. He recommended in December of 1921 that the sentence be commuted at the end of the year. Daugherty suggested that Debs did not intentionally break the law, and that it would be a wise political move to commute the sentence due to Debs' considerable clout, but stressed that the decision shouldn't amount to a pardon. "No right-thinking man would set up a government, or a system of government advocated by Debs, as against the government founded by the wisdom of our forefathers and supported by every right-thinking American who has an understanding of the benefits and necessity of government and the security and opportunity it affords," he said. "I became satisfied while talking with Debs that his conviction and imprisonment in the penitentiary have had no effect upon his incorrect opinions."

Despite these explanations, Daugherty was still the chief recipient of opponents' anger when Harding commuted Debs' sentence. Another more serious pardon issue related to an earlier case. In May of 1922, Thaddeus H. Caraway, a Democratic senator from Arkansas, accused Daugherty of receiving $25,000 from New York shipbuilder Charles W. Morse to get him released from prison in 1912 following his conviction on charges of violating banking laws. Caraway said the money passed through Georgia attorney Thomas B. Felder into Daugherty's hands. The Justice Department responded that the Taft-era pardon only took Morse's health problems into consideration.

Caraway demanded Daugherty's resignation, but nothing came of it. Four months later, Republican Representative Oscar Keller of Minnesota proposed impeachment proceedings against the Attorney General on a different issue, namely injunction proceedings started by the Justice Department against striking railroad unions to keep the trains running. Keller charged violations of the First Amendment, specifically that Daugherty acted "in a manner arbitrary, oppressive, unjust, and illegal," threatened punishment against opponents, illegally used funds to prosecute individuals and corporations for lawful acts while failing to prosecute illegal acts, and recommended release of offenders of Sherman Anti-Trust Act.

Daugherty was unfazed. He grinned broadly when told of the resolution, which was referred to the House Judiciary Committee with little hope of progress. Later, he proposed an expansion of the injunction, including forbidding strikers from trying to stop people crossing the picket line, picketing near the entrances to rail sites, or using threats. The impeachment effort collapsed during committee hearings in December of 1922, when Keller tried to read a prepared statement and was told he could not "lecture" the representatives and needed to be under oath. Keller angrily tossed the statement before Andrew J. Volstead, committee chairman and another Minnesota Republican, saying he wouldn't cooperate if he could not read it. Keller then stormed out, accusing the committee of a "bare-faced attempt to whitewash Harry M. Daugherty." The committee later recommended exoneration for the Attorney General, and the House agreed in a 204-77 vote in January of 1923.

The blow that finally toppled Daugherty came in the form of the most famous of the scandals to rock the Harding Administration: the Teapot Dome Scandal. Secretary of the Interior Albert B. Fall leased naval oil fields in Wyoming and California to oil men Harry F. Sinclair and Edward L. Doheny in 1922, and the deal had been sweetened by $409,000 paid to Fall. The Secretary of the Interior ultimately had to serve a year in prison and pay a $100,000 fine after his conviction on bribery charges.

Daugherty was never implicated in the crimes, but his enemies were quick to question why he had not caught this misconduct earlier. Burton K. Wheeler, a Democratic Senator from Montana and one of Daugherty's most outspoken foes, asked President Coolidge (Harding died in August of 1923) to demand Daugherty's resignation. Wheeler later amended his request, asking for an inquiry into the Justice Department. He also accused Felder of being a former partner to Daugherty who collected money in exchange for selling appointments and dismissing cases related to Prohibition-era alcohol violations in New York. Felder responded that the two were associated with several of the same cases, but never partners; he also said such accusations had arisen before, with no result. Nevertheless, Felder was ultimately convicted of conspiracy in a scheme to bribe Daugherty to remove evidence from Justice Department files.

Daugherty came under even more fire when the committees investigating the corruption received a report in February of 1924 that he dealt in Sinclair oil stock. He refused to resign, asking, "Shall reputations be destroyed and public officials driven from office by clamor, insinuation, and falsehood?" The next month, Daugherty was blasted in testimony by Roxie Stinson, the divorced wife of Daugherty's friend and assistant, Jesse Smith. In 1923, Smith had been found dead of apparent suicide in the apartment he shared with Daugherty. Stinson said she remained friendly with Smith following their separation, and that he had told her Daugherty procured stock in companies such as White Motors and Pure Oil for nothing; she said Smith even gave her some small blocks of stock. She said the corruption put a great deal of stress on Smith, and that she tried without success to get him to break his loyalty to Daugherty. She agreed that Smith killed himself, but held that the Attorney General was "morally responsible" for the death.

One charge held that Sinclair turned over securities to Daugherty and Will H. Hays, former chairman of the Republican National Committee, to cover a deficit incurred by the party in the 1920 campaign. The committee also heard testimony that Daugherty and Hays each received $25,000 to secure Harding's nominations at the 1920 convention, while Senator Boies Penrose of Pennsylvania got a $50,000 payout. Amid the hubbub, Daugherty still refused to resign, proclaiming, "I wouldn't have given 30 cents for the office of Attorney General, but I won't surrender it for a million dollars."

When Daugherty refused to supply documents on various aspects of Harding corruption, Coolidge asked for the Attorney General's resignation. Daugherty agreed to do so, and left office at the end of March of 1924. "I have no personal feeling against the President," he insisted. "I am yet his dependable friend and supporter." Coolidge chose Harlan Fiske Stone, former dean of Columbia Law School and director of several corporations, as his successor.

The investigation into Daugherty continued, at least until his counsel abruptly announced in June of 1924 that he would not testify before the committee. The Senate voted 70-2 to pursue the matter anyway, and take it to the Supreme Court if need be. While out of office, Daugherty had to defend himself against numerous accusations. They included failure to actively pursue the collection of millions of dollars in war debts, failure to identify fraud within the Justice Department, collecting bribes via Smith to get the government to look the other way on Prohibition matters, and the appointment of anti-labor William J. Burns to the department's Bureau of Investigation (Burns also resigned under fire in 1924).

In May of 1926, Daugherty was indicted alongside former Alien Property Custodian Thomas Miller and former Republican national committeeman John T. King on charges of conspiracy to defraud the government. In this case, the men were charged with fraud in the $7 million sale of American Metal Company assets seized during World War I to German metal magnate Richard Merton. Smith was also implicated, but of course could not be charged due to his death; King died before he could go to trial. Daugherty was the first Attorney General indicted for crimes in office, and prosecutors charged that $49,335 in Liberty bonds could be traced to him, deposited via his brother's bank in a joint account with Smith. Altogether, the men were accused of receiving $441,000 in kickbacks in the sale.

The trial began in September of 1926. Merton testified that he had no dealings with Daugherty, and that the sale was conducted through a supposedly neutral Swiss corporation. The strongest evidence against Daugherty came from his brother, Mal S. Daugherty, though all he could do was say evidence was no longer available. Mal, the president of Midland National Bank in Washington Court House, said Harry told him he had burned three accounts of bank ledger sheets related to the American Metal Company transfer. Daugherty's attorney gave the rather awkward argument that he destroyed the documents "in a moment of madness," partially fueled by the constant attacks against him, and meant to burn records related to a Harding campaign fund instead. Prosecutors said the lost bank ledgers would have proved Daugherty's guilt.

After lengthy deliberations, the jury deadlocked 10-2 in favor of convicting Miller and 7-5 in favor of convicting Daugherty. Another trial was scheduled, and in the interim Daugherty testified as part of the proceedings against Fall, saying the Justice Department was never asked for a formal opinion on the corrupt oil leases. At the next trial in February of 1927, the amount of Daugherty's alleged kickback increased to $140,000, while witnesses suggested that Miller got $40,000. The next month, this jury debated the question for even longer, about 70 hours, before convicting Miller. Only one person was against conviction of Daugherty, but it was enough to hang the jury. The federal prosecutor, Emory R. Buckner, asked for the indictment against Daugherty to be quashed. Teary-eyed, Daugherty said he would be returning home to practice law.

Though Harry Daugherty never served any jail time, Mal was found guilty of defrauding his bank in March of 1931 and sentenced to 10 years in prison. Daugherty died in Columbus, Ohio in October of 1941 of congestive heart failure following his recovery from two heart attacks and pneumonia. He left an unfinished book defending his reputation, and an estate worth $175,000.

Sources: The Political Graveyard, "Ohio: Election Of Republican Candidate For Governor Probably By About 30,000" in the New York Times on Nov. 8 1899, "Wade Ellis To Lead Fight On Harmon" in the New York Times on Feb. 8 1910, "Prophesied How Harding Would Win" in the New York Times on Jun. 13 1920, "Harding Abandons Vacation To Hold Party Conferences" in the New York Times on Jun. 20 1920, "Cox Ridicules Assertions By Rival Nominee" in the Deseret News on Oct. 30 1920, "Democrats Concede The Election Of Sen. Harding" in the Lewiston Daily Sun on Nov. 3 1920, "Harding Picks Cabinet" in the Reading Eagle on Feb. 22 1921, "Daugherty A Storm Centre" in the New York Times on Feb. 22 1921, "Daugherty Report On Release Of Debs" in the New York Times on Dec. 31 1921, "Daugherty Charged Again With Getting Big Fee From Morse" in the Miami News on May 3 1922, "Caraway Asks That Daugherty Resign" in the Lewiston Daily Sun on May 22 1922, "Daugherty To Lead War Prosecutions" in the New York Times on May 26 1922, "Gives Out Data On Morse's Pardon To Aid Daugherty" in the New York Times on May 28 1922, "Harding Shields Daugherty, Is Senate Charge" in the Pittsburgh Press on Jun. 4 1922, "Ohio Bar Upholds Daugherty" in the New York Times on Jul. 8 1922, "Asks House To Impeach Daugherty" in the Southeast Missourian on Sep. 11 1922, "Asks Impeachment Against Daugherty" in the New York Times on Sep. 12 1922, "Daugherty Seeks Firmer Injunction" in the New York Times on Sep. 22 1922, "Keller Quits Probe Alleging Whitewash" in the Evening Independent on Dec. 15 1922, "Wheeler Again Plans Ousting Of Daugherty" in the Miami News on Feb. 15 1922, "Daugherty Remains Under Fire In Senate Oil Inquiry" in the Lewiston Evening Journal on Feb. 20 1924, "daugherty Threatens To Carry To People Battle To Retain Cabinet Seat" in the Lewiston Daily Sun on Feb. 22 1924, "Tells Of Deal With Daugherty" in the Gettysburg Times on Mar. 13 1924, "Oil Probers Get Setback" in the Evening Independent on Mar. 20 1924, "Thinks Smith Suicide And Harry Daugherty Morally Responsible" in the Lewiston Evening Journal on Mar. 27 1924, "Daugherty Is Not 'At Outs' With Coolidge" in the Southeastern Missourian on Mar. 31 1924, "News Review Of Current Events" in the Polk County News on Apr. 10 1924, "Daugherty Refuses Call Of Committee" in the New York Times on Jun. 5 1924, "Senate Votes 70-2 To Fight Daugherty" in the New York Times on Jun. 6 1924, "Asked To Grant Appeal" in the Herald-Journal on Jan. 24 1926, "Jury Indicts Daugherty In Alien Scandal" in the Milwaukee Sentinel on May 8 1926, "Mal Daugherty Admits Record Was Destroyed" in the Times Daily on Sept. 24 1926, "German Magnate Helps Daugherty" in the Ellensburg Daily Record on Sept. 14 1926, "Paper Burned By Daugherty When Hounded" in the Schenectady Gazette on Oct. 8 1926, "Daugherty Will Face New Trial" in the Sarasota Herald on Nov. 4 1926, "Fall Blamed For Leasing Of Oil Lands" in the Berkeley Daily Gazette on Nov. 30 1926, "Daugherty And Miller Again Facing Trial" in the Sarasota Herald on Feb. 9 1927, "Daugherty Man 'Friday' Figures In Court Trial" in the Lewiston Evening Journal on Feb. 9 1927, "Brother Deals Daugherty Rap" in the Prescott Evening Courier on Feb. 15 1927, "Ex-Alien Property Chief Convicted Of Conspiracy" in the Berkeley Daily Gazette on Mar. 3 1927, "Corruption: One Blind, One Coated" in Time on Mar. 14 1927, "Daugherty Is Found Guilty" in the Gettysburg Times on Mar. 5 1931, "Mal Daugherty Gets 10 Years In Prison" in the New York Times on Mar. 19 1931, "Harry Daugherty Succumbs At 81" in the Evening Independent on Oct. 13 1941, King of the Bootleggers: A Biography of George Remus by William A. Cook, The New Encyclopedia of American Scandal by George C. Kohn, New World Coming: The 1920s and the Making of Modern America by Nathan Miller

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