Red Web - Blair Coan

Foes or Defenders of Lawlessness?

The Wheeler resolution in the Senate, creating the committee upon which I think I have quite appropriately bestowed the title, "Extraordinary Investigation Committee," provided for an investigation "concerning the alleged failure of Harry M. Daugherty, Attorney General of the United States, to prosecute properly violators of the Sherman anti-trust act and the Clayton act against monopolies and unlawful restraint of trade; the alleged neglect and failure of Harry M. Daugherty, Attorney General of the United States, to arrest and prosecute Albert B. Fall, Harry F. Sinclair, H.L. Doheny, C.R. Forbes and their conspirators in defrauding the government, etc." No evidence ever went into the investigation, however, that the Attorney General neglected or failed to proscute any of the personages above named, for the very good reason that events moved too rapidly even for the astute and facile Wheeler.

Before the investigation could get under way, Attorney General Daugherty had advised the President of the United States that he ought to engage special counsel to represent the government's interests in the oil cases which appeared to be of very considerable importance. This advice was adhered to by the President, and the charges of failure and neglect on the part of the Attorney General in connection with the oil cases fell at once as flat as a rubber doormat. Also, before the investigation got under way, and a long time before it did, too, the case of Forbes was being investigated, and in the most expeditious fashion possible, Daugherty went to Chicago in connection with the grand jury proceedings, Forbes was indicted by direction of Daugherty, tried and convicted.

The inclusion in the Wheeler resolution, however, of the charge of failure to arrest and prosecute Fall, Sinclair and Doheny was enough to set off the oratorical fowling pieces of Walsh, Wheeler, Brookhart, Heflin, Carraway, Robinson et al. in the chamber of the Senate. There the allegation was enlarged upon, and the Attorney General accused of complicity with Fall through the medium of his official capacity. Two emphatic refutations of the charge, however, are of record in the federal court at Cheyenne, Wyoming, where Messrs. Roberts and Pomerene, special counsel employed by the government, prosecuted the oil cases.

The first of these in Paragraph 24 of the bill of complaint which the government's attorneys filed before the court, reads:

"The said Albert B. Fall, acting as aforesaid, although a question was raised as to the legality of such a lease, steadfastly refused to take the opinion of the Solicitor of the Department of the Interior of the United States or of the Attorney General of the United States concerning the legality of the same."

And the other is a paragraph from the opinion of Federal Judge Kennedy of Cheyenne, delivered in support of his decision holding the Teapot Dome lease to be legal and valid, reading as follows:

"As to the charge that Secretary Fall refused to seek the advice of the Solicitor of his own department or the Attorney General of the United States, only one suggestion need be made. While the Secretary of the Interior is criticized in the bill for engineering the entire plan, the evidence shows—that when legal advice was thought necessary in regard to the legality of the proposed lease then under advisement, such advice was sought and received from the legal staff in the Navy Department. Under these circustances, the criticism could scarcely reach further than an alleged error in judgment in the choice of lawyers."

The evidence of the falsity and absurdity of the charge of neglect and failure properly to prosecute violators of the Sherman and Clayton acts, and in fact the general charge of failure and neglect to prosecute violators of the law or to represent the interests of the government in cases at law generally, was of almost overwhelming volume when the so-called Wheeler-Brookhart-Ashurst committee set about the performance of its illegal and usurping functions. This evidence was of record in the Department of Justice and in the courts of the land everywhere there was a federal district and a federal district attorney. A summary of it may be perused by the reader of this book by turning to the appendices.

It may be true that the Department of Justice, under Attorney General Daugherty, did not function 100 percent, and that it only functioned 99 percent or thereabouts. But if this is true, it is not entirely outside the range of possibility that the one percent failure to function reacted to the benefit of certain of the Attorney General's most ardent detractors, as two or three instances pointed out in this chapter would seem to indicate.

One of these detractors, the leading one in fact, has been prosecuted, and will be further prosecuted. The credit for it has been rather persistently given to Daugherty. But this credit is entirely undeserved, since Daugherty had no more to do with it than Luke McLuke or the Sultan of Sulu. I have no doubt he would have taken and would now take some invigorating interest in officially participating in this particular prosecution, but the matter was and is entirely out of his hands, and rests now in the hands of Attorney General Sargent after having left the hands of Attorney General Stone upon Mr. Stone's elevation to the Supreme Court. The defendant to whom I now refer is the "prosecutor" of the Extraordinary Investigation Committee, United States Senator Burton K. Wheeler of Montana.

The criminal case against Senator Wheeler originated in the Postoffice Department, and not in the Department of Justice. I went to Montana in March, 1924, to look into some matters pertaining to Senator Wheeler, at the instance of a newspaper. At that time I did not know Attorney General Daugherty and did not meet him until months after he had resigned. What I went there to find out principally was the radical connections of Wheeler and to reach some conclusions concerning the real motives behind his enthusiasm for the destruction of Mr. Daugherty and the defamation of the Department of Justice. My sole purpose was to get material from which was written a series of articles exposing Wheeler's affiliation with the reds and the motives behind the movement to "get" Daugherty and discredit the Department of Justice.

I had no sooner arrived there than I discovered the fact that Gordon Campbell, a Seattle oil operator, and Wheeler were then being investigated in connection with fraudulent operations for which Campbell was, in due time, prosecuted and convicted. The investigation was being conducted by inspectors from the Postoffice Department. It is a well-known fact, of course, that the Postoffice Department has its own secret service, and that this service—under the direction of the chief postoffice inspector—operates as a unit entirely independent of the Department of Justice. It investigates and prepares its cases before they even reach the Department of Justice or a federal district attorney.

It was natural that, upon learning of the investigation being made by the postoffice inspectors, I should have some curiosity about it, and I tried hard enough to obtain enlightenment from the inspectors at work on the case. They wouldn't tell me what I wanted to know, so I determined to find out for myself—which is something of a custom among men who have had experience as reporters for newspapers. Well, I did find out—not only what the postoffice inspectors knew, but a lot more; that is to say, information, supported by a number of witnesses from whom I obtained affidavits to the effect that Senator Wheeler had contracted to receive $10,000 from Gordon Campbell to use his influence as a United States senator to obtain from the General Land Office validation of a number of dummy permits for oil lands in Montana, the validity of these permits being necessary to the successful operation of the oil syndicate Campbell had organized.

I went to the federal district attorney, John L. Slattery, at Great Falls, Montana, with the evidence I had obtained. By this time the evidence of the postoffice inspectors had been laid before the district attorney, and when the information I had obtained was placed before him he was convinced there was a strong case against Wheeler on a charge of misuse of his senatorial office. The evidence was placed before a grand jury, the witnesses I had discovered were heard, and the result of it was that Wheeler was indicted. The indictment was obtained after Attorney General Daugherty's enforced resignation from the Attorney Generalship, and the entire preparation of the case for trial took place, not under the Daugherty regime, but under that of Attorney General Harlan F. Stone, now a justice of the United States Supreme Court.

At once the oratorical guns of the United States Senate were directed at the federal Department of Justice, not because it neglected or failed to prosecute alleged violators of the federal statutes, but because it did proceed to the business of prosecuting one who chanced to be a member of that self-righteous and super-sensitive body, The Senate. Wheeler and his allies arose on the floor of the Senate and denounced the due process of the Montana court as a "frame-up," and accused the already deposed Attorney General of being the instigator of it. Wheeler at first "demanded" an immediate trial, but later thought better of it, and instead called for an "investigation" by a committee of the Senate. As for his trial, which was not held until a year had passed following the return of the indictment, he sought delay after delay upon one pretext and another, and then had the audacity to blame these delays upon the Department of Justice and the administration of that department by Attorney General Stone.

There was a time in the history of the United States Senate when senate dignity forbade an indicted senator from participating in the deliberation of that body until he had been cleared of any criminal charges against him. But not so under the rules as now laid down by the reds, the pinks and the yellows. Wheeler instead of being an outcast was treated as the hero of the Senate.

The "investigation" which he demanded in the Senate was held with expeditious haste. Senator Borah was made chairman of the committee, and in addition to this excellent choice of chairman, from Wheeler's point of view the committee was efficiently packed to administer a thorough coat of whitewash to the accused Montana senator. In the conduct of this so-called "investigation," the tactics were a complete reversal of those operating in the proceedings of the Wheeler-Brookhart-Ashurst Extraordinary Investigation Committee. In the latter proceedings, defense of the accused was absolutely and unqualifiedly taboo. On the other hand, in the proceedings of the Borah committee, to "investigate" the charges against Wheeler, borrowing one of the expressive phrases of Octavius Roy Cohen, defense was the one thing "there wasn't nothin' else but." There was no "prosecutor" on the Borah committee, and any and all efforts to get before the committee evidence unfavorable to Wheeler met with insults and indignant rebuffs. As the Wheeler-Brookhart-Ashurst committee was out to "get" Daugherty, and would brook no interference with that purpose, so the Borah committee was out to whitewash Wheeler, and there was nothing in the world that could stop it.

The report of the committee, prepared by Senator Borah, "exonerating" Wheeler, was something of a joke on the chairman, however, since it found the accused senator innocent of violating a statute which had long since been repealed and under which he had not been indicted at all. The senator from Idaho, with a reputation as a great lawyer, was not a little chagrined later upon discovering that Wheeler had been indicted under a statute, the existence of which he (Borah) appeared to have been in entire ignorance.

It was astonishing with what enthusiasm Senators Borah, Walsh of Montana; Brookhart, Dill, Norris, La Follette, Shipstead, Ladd, Heflin, Carraway, Robinson and others went to the defense of an indicted man, simply because he was a member of their own crowd of presumably sacrosanct champions of their denunciations of the Department of Justice for alleged laxity in the investigation, indictment and prosecution of alleged violators of the federal statutes.

[Illustration] from The Red Web by Blair Coan


If the Department of Justice is to be assailed for any laxity in the investigation of individuals suspected of violating the federal statutes, there might be some justice in a charge of failure to investigate Senator Walsh of Montana for one, and Senator Dill of Washington, for another. Had Senator Walsh and Senator Dill been regular members of the Republican party, in good standing, supporters of the Coolidge administration and defenders of the Department of Justice and Attorney General Daugherty, I have no doubt the Extraordinary Investigation Committee of the Senate would have found a way to "expose" the failure of the Department of Justice to prosecute both of them.

Walsh was elected to the Senate in Montana in 1918 by a scant majority of 4,200 votes over Dr. O.M. Landstrom. Following the election it was discovered that probably he was elected by votes supposed to have been sent in by mail from absent voters. Three counties in Montana—Silver Bow, Cascade and Deer Lodge counties—returned something like 7,000 of these mailed votes. All three counties are Democratic strongholds, with a particular leaning toward extreme radicalism. The 7,000 votes are alleged to have been more mailed votes than ever were polled in these counties either before or since the election of 1918. This election at which Walsh was elected has always been under a cloud.

"An Associated Press dispatch from Helena, Montana," said the Spokane, Wash., Spokesman-Review, October 17th, 1924, "last night reported that A.W. Dolphin, Spokane attorney, had submitted to the federal land office a petition for the cancellation of a special use water permit granted to the Beaverhead Ranch Company in 1912. The petition was received for filing by Frank L. Reece, receiver and recorder, and forwarded to Washington, D.C."

"Details of the Dolphin petition, which charges Senator T.J. Walsh of Montana with violation of a federal statute, were first given in the Spokesman-Review on Tuesday. Dolphin declared the permit was worth $140,000, and obtained with the intervention of Senator Walsh while a stockholder of the concern."

"The Associated Press dispatch from Helena adds:

"Large tracts were ptrchased by the company in Beaverhead County, according to county records here, and irrigated with water obtained from the Beaverhead National Forest preserve under the terms of the special permit. Within the last eight years most of the land was sold to individuals in small tracts, with contracts for sufficient water for irrigation.' "

The Dolphin petition alleged correspondence between Walsh and Franklin K. Lane, while the latter was Secretary of the Interior in the Wilson administration, in the interests of the Beaverhead Ranch. Senator Walsh has announced that he has no recollection of having had such correspondence, but that his conscience is clear even if he did. He claims to have disposed of his holdings in the Beaverhead Ranch in 1915—to his daughter—and that the stock subsequently was disposed of to the president of the company.

[Illustration] from The Red Web by Blair Coan


[Illustration] from The Red Web by Blair Coan


Senator Walsh first came to the Senate in 1913, following ratification by the state legislature of his election in 1912. He was then holding, and until some time in 1915 held, $20,000 worth of the stock in the Beaverhead Ranch Company. He was one of the incorporators of the company. Associated with him in the organization of the company was J.E. Morse, who claimed the water rights to Boots Lake Reservoir. The Department of the Interior decided the claim was invalid. Walsh, serving in the Senate, demanded of the department that Morse be given a decision on the water rights. There is adequately authenticated evidence that Walsh had correspondence with Secretary Lane and the then Assistant Secretary, now Senator Jones, of New Mexico, and that as a consequence the Morse application for the water rights was reinstated. The land—7,000 acres—controlled by the Beaverhead Ranch Company was worth, prior to that, probably $1.00 an acre. The value thereafter is said to have gone up to $100 or more an acre.

Of course, the federal Department of Justice is not to be held accountable for any failures or neglect in connection with Senator Walsh's election in 1918, since that matter is not within the province of federal officers charged with the enforcement of law. And as for the Beaverhead Ranch case, I make no charges whatever that the Montana senator violated any law or intended to violate any law. All I do, in this connection, is to venture the plausible suggestion that Senator Walsh, had he been a Republican and a supporter of the Coolidge administration, and more particularly a defender of the Attorney Generals who have served in that administration, instead of an assailant of them, the foes of the administration and of the Department of Justice would, in all likelihood, have shirked no scruples in charging the Department of Justice with laxity and neglect in its failure at least to investigate the senator.

[Illustration] from The Red Web by Blair Coan


Senator Norris, the Nebraska radical wearing the mantle of a Republican with pink decorations, was the author of Senate Resolution 175, in the Sixty-eighth Congress, directing the Secretary of the Interior to furnish a list of the names and records of ex-members of Congress and ex-members of presidential cabinets who had appeared before that department in opposition to the government and in the interests of clients. Inadvertently, it appears, the Secretary of the Interior included in his list the name of Senator Dill of Washington. Dill was a member of the Senate, not an ex-member. Norris did not send the Dill record back to the Department of the Interior, and there is no record that he presented it to his committee, and thereafter was rather notably silent on the questions covered by his resolution. Perhaps Mr. Norris will now explain.

Dill was elected to the Senate in November, 1922, as a Democrat, was known as a radical, and had the endorsement and support of the Conference for Progressive Political Action. The records of the Public Land Office show his appearance there in no less than six cases following his election to the Senate. He was not investigated, indicted or prosecuted. Had he been a Republican, supporting the Coolidge administration and defending the management of affairs in the Department of Justice, it is not at all improbable that the Wheeler-Brookhart-Ashurst committee would have leaped at the chance to charge the Department with "neglect or failure to prosecute" the senator from Washington. It does not seem likely, at this writing, that there will be any investigation or prosecution of Senator Dill, in whose case the statute of limitations if a crime has been committed, will have run in December, 1925. So I offer, purely as speculation upon my own part, the suggestion that the reason for this "failure and neglect" is due in all likelihood to a realization that Senator Dill's behavior was the result of his ignorance both as a lawyer and a statesman, rather than any felonious intent on his part to violate a federal statute. This further suggestion, however, may be added with some justice: If it was ignorance, then Senator Dill is out of place in the United States Senate, and is particularly out of place there as a critic and maligner of executive departments of the federal government.