Prohibition: Thirteen Years That Changed America (18 page)

Although Jess Smith operated a campaign headquarters in Washington out of the shabby New Ebbett Hotel (Harding’s penny-pinching was legendary), he believed that Harding’s homespun, folksy image could best be projected by having him campaign mostly from his front porch in his home town. It was Howard Mannington, another Daugherty crony — later a notorious deal-maker, bootlegger, and shady go-between — who handled the endless stream of visitors to Marion, with Harding putting on a convincing act as a loving family man and the incarnation of small-town America’s virtues and down-to-earth qualities. After visiting Harding in Marion, and watching Mrs. Harding sweep the front porch herself, Chicago Mayor “Big Bill” Thompson came away elated. “Where but in America could that happen?” he asked, prophesying that Harding would be “one of our
greatest Presidents.” Nan Britton was told in no uncertain terms to stay away until well after the election.

Harding may have fooled the public, but he didn’t fool himself. He discovered, very soon after his election, that the United States presidency, even in the less complicated world of the 1920s, required qualities he simply did not possess. He admitted the fact, semipublicly, time and time again. “I don’t think I’m big enough for the Presidency,” he told a judge after a round of golf. “Oftentimes, as I sit here, I don’t seem to grasp that I am President,” he admitted to a newspaper columnist. “I can’t make a damn thing out of this tax problem,” he said to an aide. “I listen to one side and they seem right, and then, God! I talk to the other side and they seem just as right and here I am where I started. I know somewhere there is a book that will give me the truth, but Hell! I couldn’t read the book!” When Arthur Draper, of the New York
Tribune
, returned from a trip abroad and sought to brief the President, Harding told him: “I don’t know anything about this European stuff. You and Jud [his political secretary, Jud Welliver] get together and he can tell me later. He handles these matters for me.” Harding was also famous for his malapropisms, as when, questioned about the (then alarming) 1.5-million unemployment figure, he replied that “the figures are astounding only because we are a 100 million, and this parasite percentage is always with us.”

There were some able men in his administration, though on the financially archconservative side (Herbert Hoover; Andrew Mellon, a millionaire with extensive distilling interests; and an able secretary of State, Charles Evans Hughes, later to be Supreme Court chief justice, who made up for Harding’s ignorance of the world at large), but they were outnumbered by mediocre Republican party hacks, dubious Ohio gang cronies, and downright crooks. Several (Secretary of War John Weeks and Labor Secretary John Davis among them) were there simply because they were poker-playing sycophants, but his most unsuitable appointment, by far, was that of Harry Daugherty as attorney general. Daugherty wanted the Justice Department and Harding owed too much to his kingmaker to refuse him anything — though he did balk at giving Jess Smith a cabinet appointment.

It didn’t make any difference: Jess Smith moved into the Justice Department anyway, with an office (and a stock-market ticker-tape machine) across the anteroom from Daugherty. He had no clearly defined
job, but he did have a secretary, unlimited access to Justice Department files, and a Bureau of Investigation badge, and was soon regarded as Daugherty’s second in command, an unofficial deputy attorney general. There was a constant stream of shady visitors in and out of Smith’s office. Thomas Felder — lobbyist, veteran member of the Ohio gang, bootlegger, and con man with underworld connections — practically used it as his own. So did Howard Mannington, now a prominent Washington bootlegger. Mannington was the Harding crony who had masterminded Harding’s “front porch” election campaign in Marion with his sidekick Bill Orr, a former journalist. In a later book,
The Inside Story of the Harding Tragedy
, remarkable for its lack of substance and self-serving, mealy-mouthed ingenuity, Daugherty made almost no mention of Smith and claimed that he had known nothing of his activities until too late. But he never did explain in the book why Smith had an office in the Justice Department across from his own anteroom and what he was doing there.

Myron Herrick, the Republican party’s Ohioan elder statesman, did his best to prevent Daugherty’s appointment. “Harry Daugherty will wreck your administration,” he told Harding — and was packed off to Paris as ambassador. Later, but only after he had been forced out of his job, the
New York Times
would belatedly write that “from the first day, Daugherty had been a gross misfit as Attorney General.”

Alice Roosevelt Longworth, ex-President Teddy Roosevelt’s daughter, observed the new White House social scene with patrician distaste. Under Harding, visitors came in two categories. The run-of-the-mill guests were kept downstairs, where they were served fruit juice. But Harding’s cronies, and other privileged guests, were invited upstairs, where liquor flowed like water. On her first visit to Harding’s study, she wrote that Harding, she added, “was not a bad man. He was just a slob.” Had she been allowed to visit those parts of the Senate reserved for the select few, she would have found a similar ambiance. Part of the
Senate Library had been curtained off, and had become “the best bar in town,” well stocked thanks to regular visits from ingratiatingly subservient customs officials bringing with them confiscated liquor.

... no rumor could have exceeded the reality: the study was filled with cronies (Daugherty, Jess Smith), the air heavy with tobacco smoke, trays with bottles containing every imaginable brand of whiskey stood about, cards and poker chips ready at hand, an atmosphere of waistcoat unbuttoned, feet on desk, and spittoon alongside.
⁶

Harding was similarly showered with gifts of liquor. Because excessive overt flaunting of Prohibition rules was bound to attract attention, Ned McLean, the wealthy playboy son of John R. McLean, owner of the
Cincinnati Enquirer
and the
Washington Post
, provided Harding with a safe house. This was the “little green house on K Street,” a short walk from the White House, where Harding’s cronies met, drank, played billiards and poker, and, behind Harding’s back, plotted their nefarious schemes. There was another, even safer house for Harding and his cronies outside town: a hunting lodge at Deer Park Creek, unknown even to The Duchess. All the while, the ritual of Prohibition was being ostentatiously observed. When the dreadnought
Washington
was launched in 1924, a congressman’s daughter broke a bottle of river water over its bow, and Dr. Charles Foster Kent of Yale was hired to rewrite the Bible, removing all references to wine.
⁷

The scandals of the Harding years came in quick succession. Under Woodrow Wilson, 13,000 post office jobs had been removed from patronage and placed under nonpolitical Civil Service regulations. Harding, under Republican pressure, annulled the ruling. The officials were fired, and the jobs parceled out to political appointees. But this was negligible compared to the scams Harding’s cronies indulged in with total impunity.

Colonel “Charlie” Forbes was a close friend of Harding’s — perhaps the most constant member of his poker-playing circle of intimates. Harding appointed him Health secretary and head of the Veterans Bureau, a sizeable department with a $550 million annual budget. Forbes proceeded to asset-strip his own department with all the skill of a Mafia boss. Harding’s sister, Carolyn Votaw, who had married a Seventh-Day Adventist clergyman (Harding had appointed
him
federal superintendent of prisons), knew Forbes well, and introduced him to a friend of hers, a wealthy construction company executive called Elias Mortimer and his very pretty, ambitious wife Kate. There was a pressing need for veterans’ hospitals, and Mortimer promised Forbes huge kickbacks for every building contract awarded to his firm. Forbes let him see the supposedly secret rival bids. For every new hospital, Forbes got a cash payment of $50,000 and up. On the pretext of looking at pos
sible sites, the threesome took expensive trips all over America, where Forbes was lavishly entertained (and also slept with Mortimer’s wife), with Mortimer footing the bill.

Forbes milked the Veterans Administration in other ways. He paid hugely inflated prices for hospital land (up to $95,000 for sites whose market value was $17,000), splitting the difference with the sellers. He disposed of brand-new hospital equipment at token prices, in return for kickbacks, then replaced what he had sold for practically nothing with brand-new items for which the Veterans Administration paid hugely inflated prices, again getting a cut. In subsequent investigations he was shown to have paid ten times the market price for 35,000 gallons of floor cleaner and 32,000 gallons of floor wax — a hundred-year supply. In all he was shown to have squandered $33 million — or several hundred million dollars in current values.

The trashing of the Veterans Administration became common knowledge. Harding duly learned of his poker buddy’s practices, and flew into a rage, but protected him from the law by sending him abroad on a spurious mission. Although Forbes was eventually sentenced (in 1925) to two years in jail and fined $10,000, his real problems only began after Harding’s death.

Albert Fall, secretary of the Interior, another close Harding crony, was resourceful in other, more imaginative ways. He was an intimate friend of two oil tycoons, Edward Doheny and Harry Sinclair, both, hardly coincidentally, heavy contributors to Harding’s campaign fund. Before World War I, President William Howard Taft had ordered large tracts of oil-bearing land to be handed over to the U.S. Navy to ensure adequate supplies at the lowest possible cost. Thanks to a three-way scam involving Navy Secretary Edwin Dealey, Interior Secretary Albert Fall, and — in the wings — Justice Department Secretary Daugherty, the two oil tycoons ended up with most of the Navy’s priceless oil-rich land.

As a first step, Navy Secretary Dealey (who later had to resign) had the site ownerships secretly transferred from the Navy to the Department of the Interior. Then Fall worked out a deal to hand them over to Doheny and Sinclair. There was a semblance of legality: in exchange for the land, Doheny and Sinclair were to build storage tanks for the Navy and provide the Department of the Interior with oil certificates (at favorable rates) to be used by U.S. Navy ships.

These arrangements were not publicized, and there were no bids from competing oilmen — Fall invoking the overriding need for secrecy in “matters affecting national defense.” He himself received kickbacks amounting to several hundred thousand dollars, resigning shortly afterward to take up a well-paid sinecure in Sinclair Oil. The payoff was a tiny fraction of the hundreds of millions of dollars that Doheny and Sinclair made out of the scam, known since as the Teapot Dome scandal.

Daugherty, a later investigation showed, must have been aware of Fall’s scheme (the Justice Department was required to give its stamp of approval to deals of this importance), but nothing was ever proved. Only later did it become known that he had invested in Sinclair stock before it started booming as a result of the Navy deal. Daugherty was a difficult man to catch in flagrante, operating as he did behind his front man Jess Smith. He was also utterly ruthless with the small handful of liberal Republican politicians who tried to bring him down.

Later, as investigation after investigation revealed the scandalous depths of the Harding administration, Daugherty would claim — a tactic later emulated by Senator McCarthy — that there was “abundant proof” that it was all part of “the hellish designs of the Communist International.” When Senators Burton K. Wheeler and Smith W. Brookhart did succeed in launching an investigation into his Justice Department activities, he told the
New York Times
(the interview was published on April 24, 1924) that

. . . the two senators, who spent last summer in Russia with their friends, were part of an effort to capture, by deceit and design, as many members of the Senate as possible and to spread through Washington and the cloakrooms of Congress a poison gas as deadly as that which sapped and destroyed brave soldiers in the late war. The enemy is at the gate, he [Wheeler] aims at nothing short of the overthrow of the institutions which are your protection and mine against tyranny.

Even by the lax standards of the 1920s, Daugherty’s conduct while attorney general was remarkable, not just for the extent of his corruption but for its eclecticism. No transaction was too trivial for him. In the Washington brownstone on H Street Daugherty shared with Smith, the Armour meat processing company regularly delivered sides of bacon and ham, while uniformed police officers paid for past and
future favors with confiscated liquor. No one, at the time, seems to have been preoccupied by the discrepancy between Daugherty’s salary ($12,000 a year) and his household expenses ($50,000 at least, for he entertained heavily) — and Smith did not draw an official salary at all.

Roxy Stinson, Jess Smith’s ex-wife, testifying before the Senate investigation on Daugherty, was later to be an unwilling but inexhaustible source of information. She told how Smith had boasted to her of the windfall Daugherty expected to collect from the proceeds of a pirated film of the Dempsey-Carpentier match. Smith had acquired the film on Daugherty’s behalf and expected to sell it all over America. She remembered Smith telling her that Daugherty’s friends had made $33 million in five days over the Sinclair Oil land deal. “Were you [i.e., Daugherty and Smith] in on it?” she asked him. “No,” said Smith, “that’s what we’re sore about.” But she also remembered how, shortly after the Sinclair Oil deal, Smith had shown up in Ohio where she lived, and proudly boasted that he had seventy-five $1,000 bills on him. She told of Daugherty and Smith’s innumerable expensive junkets to New York, paid for by Joe Weber, of Weber and Fields, a big theatrical entrepreneur, who provided them with lavish accommodation, theater tickets, “and all sorts of other favors.” It turned out that Weber wanted parole for his wife’s brother, currently in jail. But Daugherty wanted hard cash as well as a good time in New York, and she remembered Smith telling her: “I don’t know whether we’ll bother with him or not. He is awful cheap and wants something for nothing.”