Chicago to Springfield:: Crime and Politics in the 1920s (Images of America (Arcadia Publishing)) (6 page)

State senator James Barbour sued Governor Small for slander in 1924. Barbour was a special prosecutor who helped convict mobster John Looney. Small accused Barbour of illegally being paid twice by the state, as a senator and as a prosecutor. Barbour said his fee came from a citizen’s fund. Small said private money turned over to the state became state money—an interesting assertion from a man who did not think interest earned on state money in state bank accounts belonged to the state. Judge William Gemmill asked Small and Barbour to work something out, and Barbour dropped his lawsuit. (KPL.)

During Len Small’s term as state treasurer from 1917 to 1919, he and state senator Edward Curtis operated a money-laundering scheme that netted them about $2 million. Small deposited half the state’s money across 350 banks, and the other half he deposited in just one bank—a bank that did not exist. Curtis (left) owned Grant Park Trust and Savings Bank (pictured below). He set up a sham operation called the Grant Park Bank. This bank had no furniture, no vault, and no building. It existed only on paper for the purpose of defrauding the state. Curtis loaned money to the Swift and Armour packing houses at six to eight percent interest, paid the state two percent interest, and kept the difference for himself and Small. (Both JR.)

After Small’s term ended, he continued the money laundering with his successor, Fred Sterling (pictured). Sterling named Small examiner of securities so Small could continue depositing money in a bank that did not exist. Sterling was elected lieutenant governor in 1920, and he was indicted with Small in 1921. Edward Curtis died on March 8, 1920. His timely death prevented him from being indicted; however, his brother Vernon was indicted. Illinois provided quite a spectacle—its governor and its lieutenant governor, both former state treasurers, were indicted for embezzlement, money laundering, and conspiracy. (KPL.)

Governor Small went on trial for embezzlement. Pictured at the trial are, from left to right, Vernon Curtis, Governor Small, and lawyers Werner Schroeder and Charles LeForgee. LeForgee argued in court that Small did not steal the interest money from the state treasury because the money never went into the state treasury. (CHM-DN-0073738.)

The money laundering in the state treasurer’s office under Small and Sterling ended when Edward Miller (seen here) became state treasurer in January 1921. As soon as he took office, Miller discovered what had been going on, and he went to Attorney General Edward Brundage for advice. A thorough investigation shocked Brundage, who asked, “Mr. Miller, do you realize that this is a criminal conspiracy to loot the public treasury?” (KPL.)

Grant Park is a tiny village in Kankakee County and not to be confused with the more famous Grant Park in downtown Chicago. Seen here is the village in 1917, with the legitimate Grant Park Trust and Savings on the left corner. (JR.)

Many newspaper writers and historians since 1921 have written that Attorney General Edward Brundage brought indictments against Len Small as revenge because Small cut Brundage’s budget. However, the matter didn’t start with Brundage. It started with Edward Miller, who brought the corruption to Brundage’s attention upon becoming state treasurer. Brundage began his investigation in January 1921, and Len Small knew it. When Small couldn’t persuade Brundage to drop the investigation, Small cut the budget so the attorney general’s office would not have the funds for a special investigation. The budget cut came on July 8, while the indictments came on July 21. Because the budget cut came first, Small was able to argue that the indictment was revenge. And that has been the story written ever since. (KPL.)

Joseph Fifer, governor of Illinois from 1889 to 1893, was one of several lawyers representing the governor in 1921. Small’s team of lawyers refused to allow Small to be arrested and advised him to evade the sheriff. They argued that for the judiciary to arrest an executive was a violation of the separation of powers. (KPL.)

Former congressman James Graham also was on Small’s legal team. He and Fifer argued in court that as governor, Len Small was above the law. Graham cited an old English doctrine that “the king can do no wrong,” meaning the government could not commit a legal crime and thus should be given immunity to prosecution. Newspapers across the country were outraged at this legal defense; so was Judge Ernest Smith, who said there was no king in Illinois and ordered Small’s arrest. (ALPLM.)