Harry M. Daugherty - Biography - The "Ohio Gang"

The "Ohio Gang"

Having achieved power Warren Harding gathered around him a group of political cronies, including factional friends from the Ohio Republican establishment like Daugherty and others of like mind from other states, a group known colloquially as the "Ohio Gang." Critics such as Harding's straight-laced Secretary of Commerce, Herbert Hoover viewed the clique with thinly-digused disgust:

" had another side which was not good. His political associates had been men of the type of Albert B. Fall, whom he appointed Secretary of the Interior; Daughery, whom he appointed Attorney General; Forbes, whom he appointed Director of the Veterans' Bureau; Thomas W. Miller, whom he appointed Alien Property Custodian, and Jesse Smith who had office room in the Department of Justice.

"He enjoyed the company of these men and his old Ohio associates in and out of the government. Weekly White House poker parties were his greatest relaxation. The stakes were not large, but the play lasted most of the night.... I had lived too long on the frontiers of the world to have strong emotions against people playing poker for money if they liked it, but it irked me to see it in the White House."

Several of Harding's Ohio Gang associates lost no time wetting their beaks at the public expense. Soon rumblings began to be heard over possible malfeasance in various government departments, including Daugherty's Department of Justice.

Then on April 14, 1922, the Wall Street Journal broke a sensational story about a secret bribery scheme involving oil company kickbacks to government officials in exchange for the granting of extraordinarily favorable oil extraction leases via single-bid contracts. The next day Wyoming Democratic Senator John B. Kendrick introduced a resolution which set in motion the Senate investigation that would ultimately expose this so-called Teapot Dome scandal, involving an illegal financial relationship between Harding administration Secretary of the Interior Fall and a subsidiary of the Sinclair Consolidated Oil Corporation.

Attorney General Daugherty was accused by opponents of the administration of having been complicit in the Teapot Dome affair by failing to intervene after he had learned of the malfeasance. A pair of special prosecutors — Republican Assistant Attorney General Owen J. Roberts and former Democratic Senator Atlee Pomerene — were appointed to conduct a more thorough investigation of the matter.

After taking testimony on the matter the pair cleared Daugherty of wrongdoing, their final report indicating that the Attorney General had neither been aware of the fraudulent oil contracts nor had he taken any bribes related to the affair. This very specific absolution did not mean that all was on the level at the Justice Department, however. In July 1923, just as the President was preparing to leave on a working cruise to Alaska, Assistant Attorney General Jess Smith suddenly committed suicide. Although as a pious Quaker Secretary of the Interior was never part of the President's inner circle, he was abruptly added to the traveling party on this cruise by a "nervous and distraught" Harding, who apparently sought his counsel.

Hoover later recalled:

"One day after lunch when we were a few days out, Harding asked me to come to his cabin. He plumped at me the question: 'If you knew of a great scandal in our administration, would you for the good of the country and the party expose it publicly or would you bury it?' My natural reply was 'Publish it, and at least get credit for integrity on your side.' He remarked that this method might be politically dangerous. I asked for more particulars. He said that he had received some rumors of irregularities, centering around Smith, in connection with cases in the Department of Justice. He had followed the matter up and finally sent for Smith. After a painful session he told Smith that he would be arrested in the morning. Smith went home, burned all his papers, and committed suicide. Harding gave me no information about what Smith had been up to. I asked what Daugherty's relations to the affair were. He abruptly dried up and never raised the question again."

Returning from his Alaskan trip Harding suffered the first heart attack in what would prove to be the beginning of his terminal last days, with Harding dying in San Francisco on August 2, 1923. Harding's widow immediately gathered and had burned the late President's papers in an effort to preserve her husband's legacy.

Harding's death did nothing to quell the tide of emerging scandals revolving around his Ohio clique, with the news dominated by the story of Teapot Dome bribery and allegations of wrongdoing in the Office of the Alien Property Custodian, the Veterans' Bureau, and the Office of the Attorney General. While new President Calvin Coolidge initially resisted calls to sack Daugherty, Hoover and Secretary of State Charles Evans Hughes prevailed upon him to eliminate a man whom they considered to be a corrupt official. In his memoirs Hoover remembered:

"Coolidge was loath to believe that such things were possible. He greatly delayed the removal of Daugherty from the Cabinet. From this man's long-time character, he should never have been in any government.... Coolidge had a high sense of justice and asserted that he had no definite knowledge of wrongdoings by Daugherty and could not remove him on rumors. We urged that Daugherty had lost the confidence of the whole country and himself should be willing to retire for the good of public service."

On March 28, 1924 Coolidge acquiesced, demanding and receiving a letter of resignation from Daugherty. Daugherty was quickly replaced as Attorney General by the incorruptible Harlan Fiske Stone, dean of the Columbia Law School.