page_title: Warren G. Harding
section_title: Veterans' Bureau
hierarchical_section_title: Warren G. Harding / Scandals / Veterans' Bureau
caption_attribution_description: English: Charles R. Forbes, Director, U.S. Veterans' Bureau
context_page_description: Warren Gamaliel Harding was the 29th president of the United States from 1921 until his death in 1923. A member of the Republican Party, he was one of the most popular U.S. presidents to that point. After his death, a number of scandals—including Teapot Dome—came to light, as did his extramarital affair with Nan Britton; each eroded his popular regard.
  Harding lived in rural Ohio all his life, except when political service took him elsewhere. As a young man, he bought The Marion Star and built it into a successful newspaper. In 1899, he was elected to the Ohio State Senate; he spent four years there, then was elected lieutenant governor. He was defeated for governor in 1910, but was elected to the U.S. Senate in 1914. He ran for the Republican nomination for president in 1920, and he was considered a long shot until after the convention began. The leading candidates could not gain the needed majority, and the convention deadlocked. Harding's support gradually grew until he was nominated on the tenth ballot.
context_section_description: Charles R. Forbes, the energetic director of the Veterans' Bureau, sought to consolidate control of veterans' hospitals and their construction in his bureau. At the start of Harding's presidency, this power was vested in the Treasury Department. The politically-powerful American Legion backed Forbes and denigrated those who opposed him, like Secretary Mellon, and in April 1922, Harding agreed to transfer control to the Veterans' Bureau. Forbes' main task was to ensure that new hospitals were built around the country to help the 300,000 wounded World War I veterans.
  Near the beginning of 1922, Forbes had met Elias Mortimer, agent for the Thompson-Black Construction Company of St. Louis, which wanted to construct the hospitals. The two men became close, and Mortimer paid for Forbes' travels through the West, looking at potential hospital sites for the wounded World War I veterans. Forbes was also friendly with Charles F. Hurley, owner of the Hurley-Mason Construction Company of Washington state. Harding had ordered that all contracts be pursuant to public notice, but the three worked out a deal whereby the two companies would get the contracts with the profits divided three ways. Some of the money went to the bureau's chief counsel, Charles F. Cramer. Forbes defrauded the government in this hospital construction, increasing construction costs from $3,000 to $4,000 per bed. A tenth of the inflated construction billings was set aside for the conspirators, with Forbes receiving a third of the take. The graft then spread to land acquisition, with Forbes authorizing the purchase of a San Francisco tract—that was worth less than $20,000—for $105,000. At least $25,000 of the resulting financial excess was divided between Forbes and Cramer.
  Intent on making more money, Forbes in November 1922 began selling valuable hospital supplies under his control in large warehouses at the Perryville Depot in Maryland. The government had stockpiled huge quantities of hospital supplies during the first World War, which Forbes unloaded for a fraction of their cost to the Boston firm of Thompson and Kelly at a time when the Veterans' Bureau was buying supplies for the hospitals at a much higher price.
  The check on Forbes' authority at Perryville was Dr. Sawyer, Harding's physician and chairman of the Federal Hospitalization Board. Sawyer told Harding that Forbes was selling valuable hospital supplies to an insider contractor. At first Harding did not believe it, but Sawyer secured proof in January 1923. A shocked Harding, who alternated between rage and despondency over the corruption in his administration, summoned Forbes to the White House and demanded his resignation. Harding did not want an open scandal and allowed Forbes to flee to Europe, from where he resigned on February 15, 1923. In spite of Harding's efforts, gossip about Forbes' activities resulted in the Senate ordering an investigation two weeks later, and in mid-March, Cramer committed suicide.
  Mortimer was willing to tell all, as Forbes had had an affair with his wife (which also broke up the Forbes' marriage). The construction executive was the star witness at the hearings in late 1923, after Harding's death. Forbes returned from Europe to testify, but convinced few, and in 1924, he and John W. Thompson, of Thompson–Black, were tried in Chicago for conspiracy to defraud the government. Both were convicted and sentenced to two years in prison. Forbes began to serve his sentence in 1926; Thompson, who had a bad heart, died that year before commencing his. According to Trani and Wilson, "One of the most troublesome aspects of the Harding presidency was that he appeared to be far more concerned with political liabilities of a scandal than in securing justice."
caption: Charles R. Forbes, director of the Veterans' Bureau, who was sent to prison for defrauding the government
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