The Book of Bastards (12 page)

After inept and corrupt Treasury Secretary William A. Richardson resigned his seat under fire in 1874, the public demanded change. The public outcry over Richardson's many misdeeds moved President Ulysses S. Grant to appoint a man with a spotless reputation in his place. Grant got just that man, and in the end far more than he bargained for, in Benjamin H. Bristow.

Bristow was a Kentucky-born lawyer and Union Army war hero with a solid reputation. As a federal attorney in Louisville, Kentucky, after the Civil War, he enforced the unpopular Federal Civil Rights Acts without letup. This strong commitment to reform helped shape his career.

From 1870 to 1872 Bristow served as the first solicitor general of the United States. In 1873 Congress considered him as a possible successor for Attorney General George H. Williams, who was up for chief justice of the U.S. Supreme Court. But Williams did not become chief justice, and Bristow was out of a job. He went back to the practice of law until Grant tapped him to take over the treasury.

Bristow wasn't in office for long before he got wind the so-called “Whiskey Ring.” Several of Grant's appointees had created a complex and sweeping scheme to skim liquor tax profits and share them amongst a group of alcohol distributors and revenue agents. Bristow quickly realized that Grant's loyalty to his office holders threatened his integrity as president, so Bristow decided to act without telling either Grant or Attorney General Edwards Pierpont about his plan.

Bristow hired outside investigators to break up the Whiskey Ring, sent over one hundred of the Ring's members to jail, and recovered over $3 million in stolen tax money.

Ironically, President Grant himself proved to be the biggest obstacle to Bristow's crackdown on the Ring. When Bristow indicted Grant's personal secretary Orville E. Babcock as a Ring conspirator, Grant began to interfere. He made sure that Babcock's lawyers had access to prosecution documents to which they had no legal right, giving them a competitive edge.

So Babcock got off. As soon as the Whiskey Ring had been wholly crushed, Bristow resigned in disgust at Grant's actions. He was an early favorite for the 1876 Republican presidential nomination, but lost out to the eventual election winner Rutherford B. Hayes. In 1878 Bristow moved to New York, founded a law firm, and never again served in public office. He died in 1896.

Had enough of the Sewer-Which-Was-the-Grant-administration yet? Well, here's its last entry in our list of bastards: Secretary of War William Belknap.

Belknap, a lawyer by trade, had known Grant since the early days of the Civil War. As a Union Army General, he served with distinction under the future president in such battles as Shiloh. Later in the war, he marched through Georgia to the sea with William Tecumseh Sherman in 1864.

But as distinguished as he'd been on the battlefield, Belknap turned out to be another of Grant's many “friends” who did his administration more harm than good.

Belknap's profiteering came to light by the end of Grant's second term. The secretary of war had taken well over $20,000 in bribes in exchange for awarding no-bid contracts for trading posts in all of the United States's Indian reservations and western frontier forts. Belknap resigned early in 1876, and any talk of a possible third term in the White House for the still-popular Grant went out the door with him. (As ludicrous as that possibility might seem today, there was no constitutional limit on how many times someone could be elected to the presidency until the late 1940s.)

However, if Belknap thought that quitting would end the scandal over his tenure as war secretary, he was mistaken. His conduct had so enraged the members of the House of Representatives that they took an unprecedented step: they voted unanimously to impeach an office-holder who had already resigned. Belknap was also tried in the Senate, where the required two-thirds majority to convict was not reached.

But the net result was the same, and Belknap was out.

Of course, he did no jail time and didn't even lose his license to practice law. He moved to Philadelphia for a couple of years while his legal situation “cooled off.” Belknap eventually returned to Washington, D.C., and continued to practice law until his death in 1890.

Bastard.

No collection of American bastards would be complete without the inclusion of Congress. There are plenty of worthy individual congressmen and senators discussed in this book, but the actual institution deserves credit for its singular bastardry.

During its two-hundred-plus years in existence, Congress has been both witness and party to myriad acts of villainy. Roger Griswold started a fistfight on the House floor with Matthew Lyon and became the first (but hardly the last) member of Congress to face charges of ethics violations in 1798. Preston Brooks savagely beat Charles Sumner in his Senate chamber seat in 1856. The examples seem as endless as they are by turns fascinating and horrifying.

But rarely has Congress been as jointly and starkly self-serving as it turned out to be in 1873 when it passed the so-called “Salary Grab Act.” They drafted, voted on, and passed this piece of legislation, alternately known as the “Back-Pay Steal” in the middle of the scandal-plagued administration of President Ulysses S. Grant. In retrospect, it seems as if Congress might have thought that the public would be too distracted to notice a little bit of voting to give the senators and representatives some “well-earned back-pay.” After all, Grant's troubles were piling up one on top of the other: the stock market crash, the drying up of ready credit, the Sanborn Contracts, the Whiskey Ring, and a host of other ills. Turns out that Congress could not have been more wrong. Here's how it happened.

In March 1873, Congress entertained a bill calling for a pay raise for the president and all of the members of the U.S. Supreme Court. This in and of itself was unremarkable even in light of the generous raises included. The chief justice was given $10,500 per year, and each of the associate justices was offered $10,000 per year. The president's salary doubled from $25,000 per year to $50,000 per year. Today those salaries would be worth ten times those dollar values when adjusted for inflation. And the public supported both of these portions of the measure in question.

Things hit a snag when the members of Congress tacked a little bonus onto this bill for themselves. They decided that each member of both the Senate and the House ought to also receive a raise from $5,000 to $7,500 per year. Imagine being able to establish your salary with a simple majority vote!

While this was somewhat unsavory, it wasn't illegal. Then Congress decided that its individual members deserved payment for their hard work during the previous two years. They voted themselves the difference ($5,000) between their previous salaries and what they would make after the new raise as a reward for all their “hard work” during the last Congressional session.

The public outcry was deafening. For nearly a year congressmen tried to justify their self-awarded big cash bonuses to their constituents.

By January 1874, though, many members of Congress had begun to fear for their seats in the coming elections. Members of both houses voted overwhelmingly to rescind the portion of the Salary Grab Act that paid them the bonus for the previous years' work. This time the bastards actually listened to the will of the people and lost!

If ever there was someone who demonstrated the notion of “conscience money,” it was Andrew Carnegie. At one point the country's richest man, Carnegie eventually donated most of his massive fortune to the charitable foundation that still bears his name today.

And why did he do this?

Guilty conscience.

Andrew Carnegie was born poor in Dunfermline, Scotland. His family immigrated to the United States, settled in Ohio when he was thirteen, and he spent his youth even poorer than he had been back in Scotland. Determined to better his prospects, the young Carnegie worked hard, invested shrewdly, and made the most of his opportunities. His investments in a railroad sleeping car company were especially lucrative. By the time he was thirty at the close of the Civil War, he was a millionaire.

During the Civil War, Carnegie had contracted for the War Department and was able to see the writing on the wall for his future investments. He positioned himself to profit immensely from the post-war commodities boom, especially in oil, coal, and eventually (to the exclusion of nearly all other investments) in steel production. Put most succinctly, Carnegie did not make most of his money from shrewd investment, or by making his companies competitive. He and his fellow bastard robber barons Henry Clay Frick, Jay Gould, J. P. Morgan, and John D. Rockefeller stifled competition to the point of forming monopolies in growing industries. Thus they gained enough power to set the price at will of the commodities they controlled Carnegie's good of choice: steel.

He succeeded in part by keeping operating costs low. That meant that he needed to keep labor costs low. So Carnegie certainly had no love for labor unions — the groups of workers intent on reversing or at least slowing the growing distance between the incomes of the rich and poor. Carnegie proved a clever bastard on this point. He did not take on the unions or associated social reformers directly and even expressed shock and dismay when associates like Frick did so viciously during the 1892 Homestead Plant strike.

Instead, Carnegie publicly pledged to work with the masses and then secretly used his wealth and influence to sabotage those negotiations. He managed to keep the government out of the business of taxing and regulating businesses; he was a particularly strong opponent of wage and price controls.

Carnegie also worked to keep his operating costs low by using a revolutionary public relations campaign that foreshadowed those of such later corporate philanthropists as Microsoft founder Bill Gates. The rich, Carnegie said, were intended to be stewards of wealth, and as such had a moral (but not a legal) obligation to help serve and elevate the poor. “A man who dies thus rich,” Carnegie wrote in his 1889 book
The Gospel of Wealth
, “dies disgraced.”

By 1901 Carnegie's conscience had begun to get the better of him. He allowed financier Morgan to put together a buy-out deal wherein Carnegie received $435 million (worth around $4 billion today) for selling his company. He instantly became the wealthiest man in the country. By the time he died eighteen years later, Carnegie had given away close to $300 million of his conscience money. He even paid for the creation of hundreds of libraries from bricks to books.

Still a bastard.