Enemies: A History of the FBI (10 page)

One of the Bureau’s spies attended the “Unity Convention of Communist Parties” held at the Overlook Mountain Hotel in Woodstock, New York, in May 1921—a
secret four-day meeting of Communist leaders from across America. FBI documents declassified in August 2011 suggest the infiltrator was
Clarence Hathaway, a founding member of the Communist Party of the United States and, according to the documents, an informant for the Bureau from the start.

The Bureau’s report on the Woodstock gathering noted that Moscow had sent $50,000 to the American Communists, along with orders to stop their quarrels and unite. The Soviets urged American Communists to come up from underground and into an open struggle for power. It was hard to see how that could happen. “
The Communist Party is definitely an outlaw organization in the United States,” founding father Charles Ruthenberg wrote from Sing Sing prison that summer, while serving time on state charges of criminal anarchy. If the party stayed underground, it would wither and die. If it tried to function openly, it would be attacked and killed. It had to have two wings, he argued—“one out in the open, functioning publicly, the other unseen, secret, underground.”

The Bureau’s spy in Woodstock also reported that the American labor organizer William Z. Foster, who had tried to lead the nationwide steel strike two years before, was traveling to Moscow. The report was accurate. Foster went to meetings of the Comintern and the World Congress of Revolutionary Trade Unions in Moscow in June and July 1921. He met Lenin, and found him entrancing. He returned to Chicago as a dedicated Soviet agent, and the Comintern’s chief labor union man in the United States. He started traveling the country organizing coal workers, mine workers, and autoworkers; Moscow financed his work. As he rose to the top of the Communist Party in America, the Bureau of Investigation tried to watch him every step of the way.

“T
HE WORD WENT OUT THROUGH THE UNDERWORLD
”

President Harding outwardly pursued peace and reconciliation. He sent an American team to help the Soviets confront an immense famine in the fall of 1921, delivering a billion pounds of food, though five million Russians still died of hunger. He signed a proclamation ending America’s state of war with Germany. He made a front-page decision to grant a Christmas Eve pardon to America’s leading Socialist, Eugene Debs, voiding his ten-year sentence and inviting him to the White House.

But William J. Burns of the Bureau of Investigation made the biggest newspaper headlines that Christmas. It seemed America’s top sleuth had cracked his biggest case: the Wall Street bombing had been the work of Lenin and the Comintern. The story was astonishing: four New York Communists had been paid $30,000 for the job, delivered through the Soviet diplomatic representative in New York. But the source turned out to be a swindler who worked as a professional stool pigeon for the Burns Detective Agency in New York. He had claimed to have chatted with Lenin at the Comintern convention in Moscow, where the Soviet ruler pronounced himself satisfied with the Wall Street bombing and ordered up a new terrorist attack on the United States. It was the purest invention.

BURNS HOODWINKED
, read the headlines.

Burns was too corrupt to be embarrassed. But his old vices were starting to catch up with him. He had a bad habit of putting his private eyes on the public payroll. The worst of them was running rampant at the Bureau of Investigation. In the course of his long career, Gaston Bullock Means would stand accused of murder, larceny, perjury, forgery, and espionage against the United States, and yet Burns had hired him as an agent at the Bureau, and kept him on as a paid informant after his sordid past began to become public knowledge in February 1922. Means set up shop at the Justice Department in partnership with a political fixer from Ohio named Jess Smith, Attorney General Daugherty’s oldest friend from Ohio and his roommate at the Wardman Park Hotel in Washington. Jess Smith was the man to see at Justice to fix a case.

Prohibition, the law of the land since 1920, created a corrupt political culture in America. Citizens across the country thirsted for bootleg liquor. Bootlegging financed the growth of organized crime. The bootleggers paid federal, state, and local police for protection. The crooked connections between
lawbreakers and law enforcers ran all the way to the top in Washington. Jess Smith and Gaston Means had a lucrative sideline at Justice, selling government-confiscated whiskey to liquor smugglers.

“
The word went out through the underworld that there was a man at the Department of Justice who could ‘fix things,’ ” Hoover recounted in a ghostwritten memoir published in 1938, which recorded the wheeling and dealing of the Harding years. The pitch of the political fixers, as Hoover imagined it, was enticing: “I’m a great friend of the President. As a high official of the Department of Justice, I know everybody in the Cabinet.… So if you’ll just pay me so much a barrel, I’ll see that you get all the whiskey you want. To be perfectly frank with you, I’ve got so much power in Washington that I can take care of anything … except murder.”

The White House itself was a speakeasy. Alice Roosevelt Longworth, the late president’s daughter, whose husband was a powerful Republican congressman from Ohio, went upstairs at the White House during one of Harding’s twice-weekly socials. The president’s study was filled with cronies like Harry Daugherty and Jess Smith, she wrote; “
trays with bottles carrying every imaginable kind of whiskey stood about, cards and poker chips ready at hand, an atmosphere of waistcoat unbuttoned, feet on the desk, and the spittoon alongside.” She had tried to warn Harding, but she had wasted her breath. “Harding was not a bad man,” she wrote. “He was just a slob—a slack, good-natured man with an unfortunate disposition to surround himself with intimates of questionable character.”

Chief among them were the attorney general and the director of the Bureau of Investigation.

“T
HE RADICAL CHIEFTAINS
”

Hoover kept his head down and fixed his gaze on the Red threat as it spread from New York and Chicago to the coal mines, steel mills, and rail yards of the Midwest. Organized labor unions battled America’s industrial barons throughout the 1920s. The great majority of the workers were neither Reds nor radicals. They had no grand political agenda; they wanted a living wage and a decent life, not an armed revolution to overthrow the ruling class.

The Bureau backed the barons. Hoover saw the fight between capital and labor as a lifelong struggle in the war on communism. “
Communists and most subversive activities are always attached to labor situations,” he wrote
years later. “It is a practical impossibility to divorce Communism from labor situations.”

As the confrontations began boiling over in the summer of 1922, hundreds of thousands of coal miners and railroad workers began mounting strikes across the country. The Bureau struck back.

For three years, Hoover and the Bureau had been receiving reports from a shipyard worker named Francis Morrow, an informant code-named K-97, who had risen to a trusted position inside Communist conclaves. Morrow alerted the Bureau that a secret national meeting of American Communist leaders was convening on the shores of Lake Michigan. He knew about the meeting well in advance—he was the official delegate from Philadelphia. Four agents from the Bureau’s Chicago office drove for two hours into the countryside, rounded up a posse of sheriff’s deputies, and staked out a summer resort outside Bridgman, Michigan. The Reds saw the Red-hunters lurking. Fearing a raid, they took a hurried referendum on the main issue before them: whether to continue illegal underground work. It passed by one vote.
The deciding ballot was cast by Agent K-97.

On the morning of August 22, 1922, the Bureau’s men and the sheriff’s deputies arrested fifteen Communists in Bridgman, among them the Party leader Charles Ruthenberg, who had been freed from prison only four months before. They seized a trove of Party records and tracked down another sixteen delegates in Chicago, including William Z. Foster, the leading Communist in the trade union movement, and Earl Browder, a rising Party ideologue—both dedicated lifelong Comintern agents.

The leaders of American communism trudged under a hot sun, handcuffed in pairs, from the county jail to their arraignment at the courthouse in St. Joseph, Michigan. They were charged under state law with conspiracy to overthrow the government of the United States by sabotage and violence. “
The radical chieftains—financed, it is charged, by the Russian soviet to set up a soviet in this country—were herded at the county jail like a chain gang, while armed deputy sheriffs and federal agents stood guard,” the local newspaper reported. “Federal authorities hoped to link the Communists with the Wall Street bomb blast that wrecked the offices of J.P. Morgan & Co. more than a year ago.”

Among the twenty-seven indicted on sedition charges, only Ruthenberg was convicted. He spent the next five years fighting the case in court until he died at forty-four. His ashes were buried in the Kremlin Wall.

Foster’s case led to a hung jury. He went free, to Hoover’s great chagrin.
The judge had instructed the jurors that to convict him they had to find that he had “
advocated crime, sabotage, violence, and terrorism.” They were divided six to six. “The prosecution didn’t prove that the Communist Party advocated violence,” one of the jurors who voted for acquittal said. “That was the only thing we split on.”

None of the other Bridgman defendants ever went to trial. But the raid drove the Party deeper and deeper underground. The dues-paying faithful were winnowed down to six thousand people or fewer—only one in ten an English-speaking native-born American citizen—and the influence of their leaders neared a vanishing point. Some kept dreaming of a rank-and-file uprising in America’s rail yards and coal mines; their pamphlets still read like Soviet propaganda manufactured in Moscow. But as Foster himself reported to the Comintern, in a request for $25,000 in funds, he was trying to organize the American Communist movement with
two workers on his payroll.

Hoover himself would write, later in his life, that the Communist Party’s influence on American life was “
virtually nonexistent” in the early 1920s. That was not what he said at the time.

Hoover and his General Intelligence Division warned constantly of a violent Communist revolution; Daugherty told the president that the nation was threatened by
civil war. Ten days after the Bridgman arrests, the attorney general demanded and won a federal court injunction barring striking railroad workers, who were protesting a government-imposed pay cut, from taking any action in support of their demands. The ban was more sweeping than any in the history of American labor; in essence it ordered 400,000 workers with legitimate legal grievances to sit down and shut up. Members of Harding’s own cabinet denounced the decision as unlawful and unwise.

But Daugherty and Hoover escalated the battle: they dispatched scores of special agents across the country to collect evidence that labor leaders were conspiring to violate the injunction. The agents relied on informants to infiltrate the ranks of the strikers. Daily reports poured into the General Intelligence Division from Bureau agents across the country, stoking the fear that the strike was organized warfare against the government. Federal marshals and local police, aided by legions of private detectives working for the railroads, charged laborers and organizers with seventeen thousand crimes under the injunction.

In a matter of weeks, the attorney general broke the railroad strike. But the burdens of power would soon begin to break him.

Daugherty collapsed, physically and mentally, in December 1922. He had suffered a nervous breakdown, replete with hallucinations; he thought he smelled poison gas coming from the flowerpot decorating the stage as he gave a speech. Bedridden in Washington, he began seeing Soviet spies everywhere—even in Congress.

“T
HE MOST COLOSSAL CONSPIRACY
”

The Bureau of Investigation had been created as an instrument of law. It was turning into an illegal weapon of political warfare.

By the time Congress reconvened in March 1923, Daugherty and Burns were conducting political espionage against senators whom the attorney general saw as threats to America. The Bureau was breaking into their offices and homes, intercepting their mail, and tapping their telephones, just as it had done to members of the Communist Party. The only rationale was the political movement in the Senate toward American diplomatic recognition of Soviet Russia.

If recognition came, there would be Soviet embassies and diplomats in the United States. If there were diplomats, there would be spies. The Bureau spied on Senator William E. Borah of Idaho, chairman of the Foreign Relations Committee; Daugherty thought the senator had “
played into the hands of the radicals” by supporting recognition. It spied on both of Montana’s senators: Thomas J. Walsh, the Judiciary Committee member who had tried to question Hoover about the Red raids, and the newly elected Burton K. Wheeler, who set out on a fact-finding trip to Moscow two weeks after his swearing-in. Wheeler, a former U.S. attorney in Montana, already had a file at the Bureau; he had defended a radical newspaper editor named Bill Dunn, who was elected to the Montana legislature after the state courts threw out his conviction on sedition charges. In Washington, at least two more senators and two other members of the House of Representatives, all critics of the president and the attorney general, also became targets for political investigation by the Bureau.

Senator Wheeler’s April 1923 expedition to Russia left him half convinced that capitalism and freedom of religion might emerge from the
chaos and terror of the revolution. On his return to the United States, the senator said he would support diplomatic recognition. The attorney general was outraged.

“
My image as a Bolshevik grew in his mind,” Wheeler recounted. Daugherty denounced Wheeler, first privately, then publicly, as “
the Communist leader in the Senate” and “no more a Democrat than Stalin, his comrade, in Moscow.” He called him “part of an effort to capture, by deceit and design, as many members of the Senate as possible and to spread through Washington and the cloakrooms of Congress a poison gas as deadly as that which sapped and destroyed brave soldiers in the last war.”