Editing Warren G. Harding (section)

==Scandals==
[[File:Scobey Mint medal obv.jpg|thumb|right|Harding made his friend, [[Frank E. Scobey]], [[Director of the Mint]]. Medal by Chief Engraver [[George T. Morgan]].]]
Harding appointed friends and acquaintances to federal positions. Some served competently, such as [[Charles E. Sawyer]], the Hardings' personal physician from Marion who attended to them in the White House, and alerted Harding to the Veterans' Bureau scandal. Others proved ineffective in office, such as [[Daniel R. Crissinger]], a Marion lawyer whom Harding made [[Comptroller of the Currency]] and later a governor of the [[Federal Reserve Board]]; another was Harding's old friend Frank Scobey, Director of the Mint, who Trani and Wilson noted "did little damage during his tenure." Still others of these associates proved corrupt and were later dubbed the "[[Ohio Gang]]".{{sfn|Nevins|p=256}}

Most of the scandals that have marred the reputation of Harding's administration did not emerge until after his death. The Veterans' Bureau scandal was known to Harding in January 1923 but, according to Trani and Wilson, "the president's handling of it did him little credit."{{sfn|Trani & Wilson|pp=181–182}} Harding allowed the corrupt director of the bureau, [[Charles R. Forbes]], to flee to Europe, though he later returned and served prison time.{{sfn|Trani & Wilson|p=182}} Harding had learned that Daugherty's factotum at the Justice Department, [[Jess Smith]], was involved in corruption. The president ordered Daugherty to get Smith out of Washington and removed his name from the upcoming presidential trip to Alaska. Smith committed suicide on May 30, 1923.{{sfn|Trani & Wilson|pp=179–180}} It is uncertain how much Harding knew about Smith's illicit activities.{{sfn|Dean|pp=139–141}} Murray noted that Harding was not involved in the corruption and did not condone it.{{sfn|Murray 1973|pp=125–126}}

Hoover accompanied Harding on the Western trip and later wrote that Harding asked what Hoover would do if he knew of some great scandal, whether to publicize it or bury it. Hoover replied that Harding should publish and get credit for integrity, and asked for details. Harding said that it had to do with Smith but, when Hoover enquired as to Daugherty's possible involvement, Harding refused to answer.{{sfn|Sinclair|pp=284–285}}{{clear}}

=== Teapot Dome ===
{{Main article|Teapot Dome scandal}}
[[File:Albert B. Fall c. 1923.jpg|thumb|right|[[Albert B. Fall]], Harding's first Secretary of the Interior, became the first former cabinet member to be sent to prison for crimes committed in office.]]
The scandal which has likely done the greatest damage to Harding's reputation is [[Teapot Dome scandal|Teapot Dome]]. Like most of the administration's scandals, it came to light after Harding's death, and he was not aware of the illegal aspects. Teapot Dome involved an oil reserve in Wyoming which was one of three set aside for use by the Navy in a national emergency. There was a longstanding argument that the reserves should be developed; Wilson's first Interior Secretary [[Franklin Knight Lane]] was an advocate of this position. When the Harding administration took office, Interior Secretary Fall took up Lane's argument and Harding signed an executive order in May 1921 transferring the reserves from the Navy Department to Interior. This was done with the consent of [[United States Secretary of the Navy|Navy Secretary]] [[Edwin C. Denby]].{{sfn|Murray 1973|p=107}}{{sfn|Trani & Wilson|pp=183, 185}}

The Interior Department announced in July 1921 that [[Edward Doheny]] had been awarded a lease to drill along the edges of the [[Elk Hills Oil Field|Elk Hills]] naval reserve in California. The announcement attracted little controversy, as the oil would have been lost to wells on adjacent private land.{{sfn|Noggle|pp=254–256}} Wyoming Senator [[John B. Kendrick|John Kendrick]] had heard from constituents that Teapot Dome had also been leased, but no announcement had been made. The Interior Department refused to provide documentation, so he secured the passage of a Senate resolution compelling disclosure. The department sent a copy of the Teapot Dome lease granting drilling rights to [[Harry Ford Sinclair|Harry Sinclair]]'s [[Mammoth Oil Company]], along with a statement that there had been no competitive bidding because military preparedness was involved—Mammoth was to build oil tanks for the Navy as part of the deal. This satisfied some people, but some conservationists, such as [[Gifford Pinchot]], [[Harry A. Slattery]], and others, pushed for a full investigation into Fall and his activities. They got Wisconsin Senator [[Robert M. La Follette]] to begin a Senate investigation into the oil leases. La Follette persuaded Democratic Montana Senator [[Thomas J. Walsh]] to lead the investigation, and Walsh read through the truckload of material provided by the Interior Department through 1922 into 1923. The documents included a letter from Harding stating that the transfer and leases had been with his knowledge and approval.{{sfn|Murray 1969|pp=463–465}}

Hearings into Teapot Dome began in October 1923, two months after Harding's death. Fall had left office earlier that year, and he denied receiving any money from Sinclair or Doheny; Sinclair agreed. The following month, Walsh learned that Fall had spent lavishly on expanding and improving his New Mexico ranch. Fall reappeared and said that the money had come as a loan from Harding's friend and ''[[Washington Post]]'' publisher [[Edward B. McLean]], but McLean denied it when he testified. Doheny told the committee that he had given Fall the money in cash as a personal loan out of regard for their past association, but Fall [[Taking the Fifth|invoked his Fifth Amendment]] right against self-incrimination when he was compelled to appear again, rather than answer questions.{{sfn|Murray 1969|pp=465–471}}

Investigators found that Fall and a relative had received a total of about $400,000 from Doheny and Sinclair, and that the transfers were contemporaneous with the controversial leases.{{sfn|Murray 1969|pp=471–472}} Fall was convicted in 1929 of accepting bribes, and in 1931 became the first U.S. cabinet member to be imprisoned for crimes committed in office.{{sfn|Russell|pp=497–498}} Sinclair was convicted only of [[contempt of court]] for [[jury tampering]]. Doheny was brought to trial before a jury in April 1930 for giving the bribe that Fall had been convicted of accepting, but he was acquitted.{{sfn|Murray 1969|p=472}}

=== Justice Department ===
[[File:Harry Daugherty, bw photo portrait 1920.jpg|thumb |right|[[Harry M. Daugherty]] was implicated in the scandals but was never convicted of any offense.]]

Harding's appointment of Harry M. Daugherty as Attorney General received more criticism than any other. Daugherty's Ohio lobbying and back-room maneuvers were considered to disqualify him for his office.{{sfn|Russell|p=444}} When details of the various scandals emerged in 1923 and 1924, Daugherty's many enemies were delighted at the prospect of connecting him with the dishonesty, and assumed he had taken part in Teapot Dome, though Fall and Daugherty were not friends. In February 1924, the Senate voted to investigate the Justice Department, where Daugherty remained Attorney General.{{sfn|Murray 1969|pp=473–475}}

Democratic Montana Senator [[Burton K. Wheeler]] was on the investigating committee and assumed the role of prosecutor when hearings began on March 12, 1924.{{sfn|Murray 1969|p=478}} Jess Smith had engaged in [[influence peddling]], conspiring with two other Ohioans, Howard Mannington and Fred A. Caskey, to accept payoffs from [[Prohibition in the United States|alcohol bootleggers]] to secure either immunity from prosecution or the release of liquor from government warehouses. Mannington and Caskey's residence became infamous as the [[Little Green House on K Street]].{{sfn|Trani & Wilson|p=180}} Some witnesses, such as Smith's divorced wife Roxy Stinson, and corrupt former [[FBI]] agent [[Gaston Means]], alleged that Daugherty was personally involved. Coolidge requested Daugherty's resignation when the Attorney General indicated that he would not allow Wheeler's committee access to Justice Department records, and Daugherty complied on March 28, 1924.{{sfn|Murray 1969|pp=478–479}}

The illicit activity that caused Daugherty the most problems was a Smith deal with Colonel [[Thomas W. Miller]], a former Delaware congressman, whom Harding had appointed [[Alien Property Custodian]]. Smith and Miller received a payoff of almost half a million dollars for getting a German-owned firm, the American Metal Company, released to new U.S. owners. Smith deposited $50,000 in a [[joint account]] with Daugherty, used for political purposes. Records relating to that account were destroyed by Daugherty and his brother. Miller and Daugherty were indicted for defrauding the government. The first trial, in September 1926, resulted in a [[hung jury]]; at the second, early in 1927, Miller was convicted and served prison time, but the jury again hung as to Daugherty. Though charges against Daugherty were then dropped, and he was never convicted of any offense, his refusal to take the stand in his own defense devastated what was left of his reputation. The former Attorney General remained defiant, blaming his troubles on his enemies in the labor movement and on the Communists, and wrote that he had "done nothing that prevents my looking the whole world in the face."{{sfn|Trani & Wilson|pp=180–181}}{{sfn|Murray 1969|pp=480–481}}

=== Veterans' Bureau ===
[[File:Cforbes.jpg|thumb|left|[[Charles R. Forbes]], director of the Veterans' Bureau, who was sent to prison for defrauding the government]]
[[Charles R. Forbes]], the energetic director of the [[Veterans' Bureau]], sought to consolidate control of veterans' hospitals and their construction in his bureau. At the start of Harding's presidency, this power was vested in the Treasury Department. The politically powerful [[American Legion]] backed Forbes and denigrated those who opposed him, like Secretary Mellon, and in April 1922, Harding agreed to transfer control to the Veterans' Bureau.{{sfn|Murray 1969|pp=459–460}} Forbes' main task was to ensure that new hospitals were built around the country to help the 300,000 wounded World War I veterans.{{sfn|Adams|p=287}}

Near the beginning of 1922, Forbes had met Elias Mortimer, agent for the Thompson-Black Construction Company of St. Louis, which wanted to construct the hospitals. The two men became close, and Mortimer paid for Forbes' travels through the West, looking at potential hospital sites for the wounded World War I veterans. Forbes was also friendly with Charles F. Hurley, owner of the Hurley-Mason Construction Company of Washington state.{{sfn|Murray 1969|p=460}} Harding had ordered that all contracts be pursuant to public notice,{{sfn|Russell|p=526}} but Forbes and the contractors worked out a deal whereby the two companies would get the contracts with the profits divided three ways. Some of the money went to the bureau's chief counsel, Charles F. Cramer.{{sfn|Murray 1969|p=460}} Forbes defrauded the government, increasing construction costs from $3,000 to $4,000 per bed.{{sfn|Russell|p=525}} A tenth of the inflated construction billings were set aside for the conspirators, with Forbes receiving a third of the take.{{sfn|Ferrell|loc=2369}} The graft then spread to land acquisition, with Forbes authorizing the purchase of a San Francisco tract worth less than $20,000 for $105,000. At least $25,000 of the resulting financial excess was divided between Forbes and Cramer.{{sfn|Murray 1969|p=460}}

[[File:Charles E. Sawyer (1920).jpg|thumb|right|[[Charles E. Sawyer]]]]

Intent on making more money, Forbes in November 1922 began selling valuable hospital supplies warehoused under his control at the Perryville Depot in Maryland.{{sfn|Adams|pp=289, 292}} The government had stockpiled huge quantities of hospital supplies during the first World War, which Forbes unloaded for a fraction of their cost to the Boston firm of Thompson and Kelly, at a time when the Veterans' Bureau was buying supplies for the hospitals at a much higher price.{{sfn|Russell|pp=524–525}}

The check on Forbes' authority at Perryville was Dr. Sawyer, Harding's physician and chairman of the Federal Hospitalization Board.{{sfn|Adams|pp=232, 292, 294}} Sawyer told Harding that Forbes was selling valuable hospital supplies to an insider contractor.{{sfn|Adams|p=294}} At first Harding did not believe it, but Sawyer secured proof in January 1923.{{sfn|Trani & Wilson|p=182}} A shocked Harding, who alternated between rage and despondency over the corruption in his administration, summoned Forbes to the White House and demanded his resignation. Harding did not want an open scandal and allowed Forbes to flee to Europe, from where he resigned on February 15, 1923. In spite of Harding's efforts, gossip about Forbes' activities resulted in the Senate ordering an investigation two weeks later,{{sfn|Murray 1973|p=103}} and in mid-March, Cramer committed suicide.{{sfn|Russell|p=563}}

Mortimer was willing to tell all, as Forbes had been in an affair with his wife, which also broke up the Forbes's marriage. The construction executive was the star witness at the hearings in late 1923, after Harding's death. Forbes returned from Europe to testify, but convinced few, and in 1924, he and John W. Thompson, of Thompson–Black, were tried in Chicago for conspiracy to defraud the government. Both were convicted and sentenced to two years in prison. Forbes began to serve his sentence in 1926; Thompson, who had a bad heart, died that year before commencing his.{{sfn|Murray 1973|pp=106–107}} According to Trani and Wilson, "One of the most troublesome aspects of the Harding presidency was that he appeared to be far more concerned with political liabilities of a scandal than in securing justice."{{sfn|Trani & Wilson|p=182}}