Tuesday, March 22, 2011

More on When Michigan Republicans Didn't Play Nice

Bruce A. Rubenstein and Lawrence Ziewacz. Payoffs in the Cloakroom: The Greening of the Michigan Legislature, 1936-1946. East Lansing, Mi.: Michigan State University Press, 1995.

In the 1920s, many Michigan state legislatures were known to pad their $3 a day salary with bribes. Governor Fred Green called them “one of the finest legislatures that money can buy”. The Depression only increased t he desire of legislators to find money through any means.

A scandal emerged in 1939 when Janet MacDonald killed her daughter and herself. She left behind notes detailing numerous bribes she had given. The local Prosecutor declined to investigate. Detroit City Council passed a resolution to create a grand jury. A grand jury indicted 25, including the local Prosecutor, the Police Commissioner, and the County Sheriff for bribery and protection criminal activities.

The push for reform moved towards investigating legislators and lobbyists. There was a focus on legislator s accepting money in return for disallowing more chain banks. A legislator, Sen. William Stenson, stated an unknown man put money and a note in his overcoat instructing him how to vote on the bill. State Treasurer D. Hale Brake then claimed a “barrel of money” had influenced the legislature. The Attorney General had resisted investigating yet then decided to form a grand jury.

The Michigan National Bank President, a branch bank, was an ally of Michigan Republican boss Frank McKay.

A lobbyist claimed that Rep. William Green demanded $600 for a vote. Other legislators were reportedly similarly named by a lobbyist and seeking funds for their votes. Rep. Warren Hooper claimed the Executive Secretary of the state Medical Society tried to bribe him to kill a bill.

Rep. Stanley Dombrowski stated a lobbyist, Charles Hemens, offered him $350 regarding the chain banking bill with $150 upfront and $200 after the vote. He claimed he was threatened after testifying before the grand jury. Dombrowski changed his story, claiming it was another legislator who offered him the money and not Hemens. Dombrowski was found guilty of perjury.

The Attorney General, a former State Senator, hired Jay Linsey as the Chief Grand Jury Prosecutor. Critics claimed that Linsey, who was associated with McKay, would be biased in steering the grand jury away from McKay and other McKay Republicans.

The Grand Juror, Judge Leland Carr, responded to Linsey’s addition by selecting an additional prosecutor, Kim Sigler. Carr let Sigler know that Carr distrusted Linseys connections to McKay. Sigler conclude that indicting McKay was the main goal of the grand jury process.

McKay helped elect Fred Green as Governor in 1926. McKay began using his influence to dominate state Republican conventions along with Republican leaders Edward Barnard, a Detroit lader, and William McKeighan, a Flint leader. McKay alleged convinced Governor Frank Fitzgerald to allow illegal gambling operations to occur by steering the State Police away from investigating them. McKay is also believed to have illegally extorted state contracts for his surety bond companies. McKay also owned the General Tire Company, which had the contract for all state vehicles. The State Treasurer even purchased and stored the company’s flawed tires.

Three grand juries in the early 1940s looked into McKay. One was for allegedly accepting bribes to influence which products were sold in state liquor stores. Another was to look into alleged fraud involved municipal bond bids. A third looked into whether McKay extorted money from Edsel Ford, President of Ford Motor. No indictments emerged. NcKay claimed the grand juries was biased by U.S. Attorney General Frank Murphy, who had lost a race for Governor to a McKay candidate.

The Attorney General stated that prosecutions made by any grand jury would be tried by his office. Carr objected, stating he believed Sigler should prosecute the cases from his grand jury. The Attorney General eventually yielded and let Sigler prosecute/

A leak from the grand jury, most likely from Sigler, indicated that half the legislators brought before the grand jury stated they took bribes.

In 1944, Judge Carr issued arrest warrants on 20 members of the 1939 legislative session along with six executives of finance company for the largest bribe scheme in Michigan politics. Over $25,000 was reportedly used to influence auto loan legislation. Ernest Prew, General Finance Corporation’s Vice President, admitted his guilt.

Some legislators debated cutting funds to the grand jury. One of the legislators indicted, 77 year old Miles Callaghan, defending the funding. His speech helped win approval for the funds. Callaghan later pled guilty and became a grand jury informant.

National radio newscaster Walter Winchell informed the public that the Grand Jury was using Charles Spare as a special investigator. Spare, a former Ku Klux Klan member, had a history of defaming others. Legislators threatened to cut the Grand Jury’s funds because of Spare. State Sen. Charles Diggs, Michigan’s only African American legislator at that time, was upset over being judged by an investigator with a history of bigotry. Spare was dismissed yet later was hired back by Sigler under the name “Mary Duke”. When Sigler left his position, all references to Spare were deleted.

In the trials, Sigler stated in his opening he would prove “the use of money, liquor, beautiful women, and lavish entertainment to sway the votes of pliant legislators to the will of selfish special interests”. Ralph Smith, President of Community Finance Company, admitted a legislative committee was created “for buying votes”. Senator Callaghan testified the bribery took place.

Charles Hemans, a lobbyist, was given immunity in return for his testimony. Hemans spent $15,500 of the Grand Jury’s funds. Sigler hid this as state law prevented payments to testifiers. Hemans testified he bribed legislators at sums ranging from $100 to $300, plus giving alcohol to those who drank.

Sigler made further indictments of more alleged bribed involving intangible tax legislation. Many had already been indicted and two additional lobbyists were placed under indictment. Former Lt. Gov. Frank Murphy was then indicted along with others for bribery involving liquor license legislation Murphy admitted his guilt.

The trials diminished McKay’s influence. He was defeated for reelection to the Republican National Committee. McKay allies lost their statewide positions.

Hemans testified that lobbyists were known as the “third house” of the legislature. Most of the indicted legislators denied receiving bribes. Defense attorneys attacked Hemans’ credibility. One attorney noted that all but one of the indicted legislators were Democrats, that Republican were the majority legislative party in the legislature and thus had the real power to influence legislation, and that none of those indicted were on important legislative committees. Thus, it would make little strategic sense to bribe those with the least influence. The jury found all the legislators and all but tow of the other defendants guilty.

The authors conclude that Siglar “was not the courageous white knight who appeared in public, but rather a self-serving, self-promoting schemer”. Sigler sought to indict and convict McKay in hopes of furthering his career.

State Sen. Warren Hooper had refused to testify against others. Hooper was a McKay ally. Sigler questioned Hooper until Hooper collapsed. Eventually, Hooper admitted that McKay offered him money to keep legislation on horse racing from coming out of his legislative committee. McKay would pay $1,000 to each committee member. Hooper testified to receiving $500 from McKay. He further admitted to receiving money from McKay on banking chain legislation. McKay and others were then arrested, including Floyd Fitzsimmons, a fight promoter. Sigler then charged Fitzsimmons with bribing Rep. Gail Handy on horse racing legislation. Sigler was calculating that it would be easier to try McKay if the jury knew that one of McKay’s co-defendants, Fitzsimmons, had already been convicted.

Fitzsimmon had previously convinced Rep. William Green to hire Sigler as his attorney to defend Green on graft allegations. Sigler violated lawyer – client confidentiality by using when Green told him when Sigler later became a Grand Jury Prosecutor.

Frank McKay and another, according to later testimony, paid $25,000 to have Hooper murdered by several members of the Purple Gang. Hooper was shot to death.

Fitzsimmons was convicted. Sigler then charged four former legislators and three others with conspiracy over dentistry legislation influence, For unknown reasons, a trial date was never set.

Five legislators were charged with accepting bribes on naturopathic medicine legislation. There additional current or past legislators were subsequently indicted.

Several witnesses died. Sen. Earl Munshaw died while his car engine was running in a closed garage. His death was ruled accidental. A witness died when his car was struck by a train, leaving people wondering why he didn’t exit his care beforehand. Former Lt. Gov. Murphy died of heart problems at age 46 before his trial began. Sen. Callaghan died of a stroke.

A lobbyists with immunity testified giving bribes ranging from $250 to $500. He gave smaller bribes to Rep. Francis Nowak who asked to be included. The jury found some guilty and some not guilty. In a second related trial, testimony claimed $1,200 was given to six legislators. All were convicted.

Rep. Jerry Logie and Rep. Charles Diggs were charged with taking bribes on pari-mutual betting legislation. Logie received $800 and Diggs received $150. Former State Sen. Chester Howell testified he made the bribes. Logie and Diggs were convicted.

Four Purple Gang members were charged with Hooper’s murder. Charles Leither, one of the Purple Gang members convicted of killing Hooper, agreed to testify against McKay. Before McKay’s trial, Justice Howard Wiest died. Judge Carr was named to the vacancy. Carr thus was no longer the Grand Juror. The new Grand Juror, Judge Louis Coash, was not the ally to Sigler and Carr had been.

Prior to the McKay trial, a County Prosecutor alleged that McKay’s private investigators tampered with the jury. Several jurors recalled to receiving threats. The trial was moved to another location.

Sigler accused McKay of controlled the Liquor Commission, including its hirings and its businesses, in an unlawful conspiracy that benefitted McKay’s clients. Hiram Walker hired McKay to get more of its product line into Michigan state liquor stores. Others similarly testified to giving money to get their products shelved. George Ackes, who led the Liquor Commission’s Statistical Department, testified there was 96% to 98% perfect distribution, which was evidence than no distiller was given favoritism or discriminated against.

McKay’s lawyer argued that it was legal for McKay to have clients and that receiving a commission was legal. There was no bribery, the lawyer argued. The Judge agreed and he gave a directed verdict of not guilty to all defendants. All 12 jurors agreed.

Pro-McKay State Senators successfully passed a resolution to investigate the $400,000 of funds given to the Special Prosecutor Sigler. Sigler told the press the legislature was still under investigation, thus giving the press the idea that the Senate investigation could be part of a cover-up.

The Senate investigation uncovered the $16,000 paid to Charles Hemans, including entertainment and liquor for him. Payments under law was capped at $3 a day. Sigler defended the payments claiming he needed the cooperation of Hemans.

Sigler feared Judge Coash would dismiss him. Sigler gambled by alleging Coash was allied with politicians opposing the Grand Jury Coash dismissed Sigler. 15 newspapers editorialized for Sigler to be brought back. A few newspapers agreed with the dismissal.

Sigler than announced he was running for Governor. Sigler campaign upon his success as a Prosecutor. A week before the primary, an allied Sigler Prosecutor made an indictment that helped publicize Sigler’s efforts. Sigler won the Republican Primary. He went on to be elected.

The Grand Jury next indicted 17 current and former legislators regarding a banking bill. Rep. Raymond Snow pled guilty. Snow stated he turned down bribes but took one because it was hard to live on his $3 a day legislative salary. He also claimed he although he took the money he didn’t vote on the bill. Charles Hemans then announced he would not testify on this case. Hemans sated he had “faith” in Carr and Sigler but not in Coash and the new Prosecutor, Dick Foster. Three imprisoned former legislators were given immunity, They testified about the bribes. Hemans refused to testify. Without the testimony of Hemans, the Judge quashed all the indictments.

Sigler was defeated for reelection by G, Mennen Williams. Coash dismissed charges against 15 people whose trials never began. The total cost to taxpayers for the investigations was $495,189.

In 1957, Coash had all the Grand Jury records destroyed Foster was upset to learn this, citing law requiring the County Clerk to keep the records.


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