Ku Klux Klan
After leaving the military, Jackson opened a new law office in Lafayette, Indiana. Before returning to politics, he joined the Ku Klux Klan, which had been undergoing a revival. In 1920 Governor of Indiana James P. Goodrich appointed Jackson as Secretary of State after the incumbent William Roach died in January 1920.
In 1922, he campaigned for the office and was elected. Jackson was interested in running for higher office, and began to seek out supporters for his coming bid for the governorship. He was approached by D. C. Stephenson, Grand Dragon of the Indiana Klan, who discussed issues of interest to the Klan. Stephenson wanted to eliminate Roman Catholic influence in the state.
Although the full extent of the Klan's power was unknown at that time, its members occupied more than half the seats in the Indiana General Assembly, and a large percentage of the local offices in Indiana. Historians estimate that nearly one third of the men in the state belonged to the Klan. At the time, the public generally perceived the Klan members as defenders of justice, morality, and Americanism. Due to the organization's reputation and influence, Jackson decided to accept their support.
He soon found the deal troublesome, as the Klan began demanding certain actions from him. He granted the Klan a state charter, to the disgust of Governor Warren T. McCray. McCray was one of the only high officials to try to battle the Klan; Jackson worked to persuade him to support the Klan's agenda. In 1923, Jackson offered McCray a US$10,000 bribe on behalf of Stephenson if he would fill several public offices with Klan members. McCray, a millionaire, declined the bribe and was offended. The dealing was behind the scenes and not made public.
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