Three months[142]after his indictment in the “French Restaurant” extortion cases—three months of continuous fighting to evade the issue—Ruef found his last technical obstruction, as far as the State courts were concerned, swept away, and was forced to enter his plea to the charge contained in the indictment. He pleaded “not guilty.” His trial was set for March 5.
Up to the day before the date fixed for the trial to begin, nothing had come up to indicate further delay. On March 4, however, Ruef’s bondsmen surrendered him into the custody of the Sheriff. Ruef then applied to Superior Judge J. C. B. Hebbard for a writ of habeas corpus. The application was based on the allegation dealt with in a previous chapter, that Grand Juror Wise was ineligible, because he had been drawn as a trial juror within a year before the impanelment of the Grand Jury of which he was a member. On the ground that Wise was ineligible for Grand Jury service, Ruef’s attorneys contended, their client’s restraint was in violation of the Fifth and Fourteenth amendments to the Federal Constitution, thereby raising a Federal issue and paving the way for appeal to the Federal courts.
In opposing Ruef’s new move, Hiram W. Johnson,[143]who had been employed to assist the District Attorney in the “graft” prosecution, pointed out that the cases named in the petition were pending in a co-ordinate branch of the Superior Court; that they were set for trial the following day; that the points, including the Federal points, had been made subject of extensive arguments before Hebbard’s colleague, Judge Dunne, and in the course of those arguments every question presented in the proceedings had been passed upon.
Ach, representing Ruef, denied that the Federal question had been presented. Johnson insisted that it had. An unfortunate scene followed.[144]Hebbard showed symptoms of intoxication. Johnson, Langdon and Heney finally refused to participate further in the proceedings and walked out of the courtroom.[145]The withdrawal of the District Attorney and his assistants did not delay Judge Hebbard’s decision. He denied the writ Ruef prayed for, but he allowed an appeal from his order to the Supreme Court of the United States, and admitted Ruef to bail pending that appeal.
One of Ruef’s attorneys filed the writ of error issued by Judge Hebbard with the clerk of the Federal Circuit Court. May 2 was set as the date for the appearance on the writ of error before the United States Supreme Court at Washington.[146]
The Aetna Indemnity Company had furnished Ruef’s bond. This company surrendered Ruef to the Sheriff in the forenoon. In the afternoon it furnished the bail that had been imposed by Judge Hebbard.
Ruef, in Hebbard’s order granting him opportunity to take his case to the Federal Courts, had basis for further struggle in the courts to evade trial. But he undertook a new move. After leaving Hebbard’s courtroom on the afternoon of March 4, Ruef dropped out of sight as completely as though the earth had opened and swallowed him.
For three days the regular peace officers of San Francisco searched San Francisco for him but they did not find him.When Ruef’s case was called for trial in Judge Dunne’s department on the morning following the proceedings in Judge Hebbard’s court, Ruef’s attorney, Samuel M. Shortridge, was present, but not the defendant.
Shortridge was in the position of an attorney in court without a client.[147]After a wait of four hours, to give Ruef every opportunity to make his appearance, Heney moved that the bonds of the absent defendant be declared forfeited, specifying the bonds originally givenas well as those furnished in the proceedings before Hebbard.
Judge Dunne, in ruling upon Heney’s motion, stated that he was proceeding as though the proceedings before Judge Hebbard had not occurred. Those proceedings, he announced, he felt were under a species of fraud. He ordered Ruef’s original bonds forfeited and took the question of the forfeiture of the bonds in the proceedings before Judge Hebbard under advisement. He considered it his duty, he said, to proceed with the trial of the case until ordered to desist by the Supreme Court or by the Court of Appeals.
Attorney Shortridge announced to Judge Dunne that in proceeding with the hearing he might find himself in contempt of the Supreme Court of the United States. Judge Dunne stated that that would not embarrass him, and in any event, he would not proceed with the matter until the defendant was in court.
The day passed without the defendant’s whereabouts being discovered. Sheriff O’Neil reported that he had been unable to find the fugitive, but expressed his belief that he would be able to do so eventually. With that understanding court adjourned for the day.
The day following, Ruef’s attorneys appealed to the State Appellate Court[148]for a writ of prohibition to prevent Judge Dunne and others from further proceeding against Ruef in the extortion cases, and to show causewhy the writ should not be made permanent. Ruef being in hiding, the application was not signed by the petitioner. The Appellate Court, after twenty-four hours, denied the petition. Ruef’s representatives then went before the State Supreme Court with the same representations. And here, again, eventually, Ruef lost.
In the meantime, Ruef had not been found. The day following his disappearance, Judge Dunne disqualified the Sheriff and named the next officer in authoritative sequence in such matters, the Coroner, W. J. Walsh, as elisor, to arrest Ruef and bring him into court.
Coroner Walsh had no better success than had Sheriff O’Neil. Ruef had disappeared on the night of Monday, March 4. On Friday, March 8, after three days of unavailing search by O’Neil and Walsh,[149]Judge Dunne disqualified Walsh and appointed William J. Biggy[150]as elisor to arrest the fugitive.
Within two hours Biggy, accompanied by Detective William J. Burns, had located Ruef at a road-house in the San Francisco suburbs and had placed him under arrest.[151]
Having taken his man,[152]the elisor was at a loss to know what to do with him. To put him in the city prison was to turn him over to the police; to put him in the county jail was to turn him over to the Sheriff. The Chief of Police was even then under indictment with Ruef, a co-defendant; the Sheriff had been disqualified. The only alternative was for Biggy himself to hold Ruef until the court could act. Biggy accordingly secured suitable quarters at the Hotel St. Francis, and there held Ruef a prisoner until the following Monday, when he was taken before Judge Dunne.
Judge Dunne refused to admit Ruef to bail, remanded him to Elisor Biggy’s custody, and continued his trial until the following morning, Tuesday, March 12.
Ruef immediately made application to the Supreme Court for a writ of habeas corpus, asking to be released from the custody of Elisor Biggy and placed in charge of the Sheriff. But here again Ruef was defeated. Elisor Biggy continued his keeper for many months following.
Ruef, after his appeal to the Federal Supreme Court, had exhausted every legal device known to himself and his attorneys to escape trial in the extortion case pendingbefore Judge Dunne.[153]His last recourse gone, Ruef found himself brought face to face with trial before a jury. On March 13 the selecting of jurors to try Ruef began in Judge Dunne’s court.
But events of far greater moment than petty extortion had the attention of San Francisco. Even as Ruef was in hiding, Detective Burns and his assistants had trapped three members of the Board of Supervisors in bribery. This opened up the most fruitful field of the graftprosecution, and immediately the extortion cases became of comparative unimportance. The trapping of the three Supervisors led to confessions from fourteen others, which involved not only Ruef in enormous bribery transactions, but also prominent members of the bar, and leaders in the social, financial and industrial life of California.
Months before the Oliver Grand Jury was convened, it was common gossip in San Francisco that the members of the Board of Supervisors were taking money from the public service corporations.[154]Belief of this had got beyond the stage of mere newspaper accusation. It had become the firmly-settled conviction of the law-abiding element of the community. For this reason, as themonths wore away in technical wrangling in the “French Restaurant” extortion cases, the public became impatient that time and energy should be expended in comparatively unimportant matters, while big graft went unprobed.
Partisans of the administration took advantage of this sentiment to belittle the prosecution.
Under this sort of hammering, the prosecution, during the months of February and March, 1907, unquestionably lost ground in public opinion.
But with Ruef holding the Supervisors to rigid accounting, and agents of public-service corporations lynx-eyed[155]to detect any weakness in their position, and quick to report with warning and advice to Ruef at any suggestion of danger, Burns and his associates were able to make little headway in securing evidence of big graft that would justify indictment or warrant trial.
The Supervisors looked to Ruef absolutely. Some of them took bribe money from others than himself in spite of his warning, but when they scented a trap they hurried to Ruef for advice.
When he directed them to return the bribe moneythey promised to do so, and in some cases actually returned it.
Ruef was a competent captain over men who had all confidence in his ability to keep them out of trouble. So long as he was in touch with the Supervisors his position so far as the Supervisors was concerned was almost impregnable. When, however, Ruef was caught in a position where he could no longer consult freely with his men, advise them and reassure them, his organization went to pieces in a wild scramble of every member thereof to save himself.
This occurred when Ruef was placed in the custody of Elisor Biggy.
Ruef fully appreciated this weak point in his position. He realized from the beginning of the Graft Prosecution the danger of members of the Board of Supervisors being trapped in independent bribery, and himself becoming involved through their confessions. Even before his flight from trial in the extortion case, he knew that his fears bade fair to be realized.
Some fortnight before Ruef’s flight, Supervisor Lonergan had been to Ruef with confession of having taken $500 from Golden M. Roy. Roy was proprietor of a well-known cafe and was counted by men in Lonergan’s position as one of the supporters of the administration. But the more astute Ruef at once suspected betrayal. Ruef bluntly informed Lonergan that he had been trapped, directed him to return the money Roy had given him and warned him of the risk he ran in accepting bribes.
Ruef’s fears were well founded. Roy, in his dealingswith Lonergan, was acting for Detective William J. Burns.
The trap which Burns had prepared for the eager Lonergan was plausibly baited.
Roy was a restaurant keeper with several side enterprises, among them interests in a skating-rink. An ordinance regulating skating-rinks was pending before the Supervisors. Roy, acting under direction of the District Attorney, approached Lonergan with a statement that he wished the ordinance defeated. Lonergan accordingly met Roy at the skating-rink office. In an adjoining room, placed so they could see and hear, were Detective William J. Burns and two others. From their places of concealment the three men heard the bargain, and saw Roy pay Lonergan $500 to defeat the skating-rink ordinance.
Roy, acting for the District Attorney, then attempted to trap Gallagher. He offered Gallagher $1000 for his work on the skating-rink ordinance. Gallagher refused to take any money and said that Roy was a friend of the administration and it should not cost him anything. Roy urged Gallagher to accept the money, alleging that it came from a pool; that Gallagher was entitled to it; that he, Roy, had given money to several Supervisors already. Gallagher asked him to tell which ones. Roy refused, saying, “You would not expect me to tell on you.”
Gallagher immediately suspected Lonergan and told his suspicions to Wilson, and the two hunted up Lonergan and charged him with getting the money.
Gallagher hurried Lonergan to Ruef much the sameas they would have rushed a man showing the symptoms of a deadly malady to a physician. Ruef warned him and advised him. The thoroughly frightened Supervisor assured Ruef that he would be careful in the future, and that he would return the money he had received from Roy.[156]
But even as Ruef was dealing with Lonergan, Supervisor Edward I. Walsh was walking into a trap set in duplication of that into which Lonergan had fallen.
Walsh, at the skating-rink, with the eyes of Burns and others upon him, accepted $500 from Roy—who was working as before under direction of the District Attorney—as the price of his vote on the skating-rink ordinance.
The third Supervisor to fall into the District Attorney’s trap was Dr. Charles Boxton.
Dr. Boxton[157]was a different type from Lonergan and Walsh. He had had the advantage of superior education and training. A specially prepared trap was set for him at Roy’s house. Boxton was introduced into the front room separated from the dining-room by folding doors. The dining-room had been darkened, and the folding doors left slightly ajar. Burns, with his assistants, was concealed in the dining-room, where theycould see all that took place in the front room, as well as hear what was said. They saw Roy offer Boxton the money; heard him tell Boxton that the ordinance was to be defeated; saw Boxton take the money.
The trap was to be sprung once more, with Lonergan, for the second time,[158]the victim.
Lonergan, instead of returning the $500 he had accepted in the skating-rink transaction, as he had promised Ruef he would do, accepted an additional $500 from Roy. As before, Burns and his men witnessed the transaction.
Roy had told Lonergan of an ordinance authorizing the establishing of an oil refinery in which Roy claimed to be interested. He promised Lonergan $500 to support the measure. The ordinance had been cleverly prepared, with an acrostic in the title, spelling the word “Fake.”[159]Roy had interested Boxton in the measure as well as Lonergan. Boxton had introduced it at a regular meeting of the Board of Supervisors. On March 7, while Ruef was a fugitive, Lonergan went to Roy’s house to get the money to be paid him for the support of the “Fake” ordinance.
The same arrangements had been made for Lonergan as for Boxton. Burns and his men were concealed in the darkened dining-room; the folding doors were ajar. Lonergan took the money.
“What,” he demanded of Roy, “have you in the next room?” and advanced toward the partially-open folding doors. At that Burns threw the doors open.
“You see,” said Burns, “what he has in there.”
“I want you to arrest this man,” cried Lonergan, indicating Roy. “He bribed a Supervisor.”
“Yes, I saw him do it,” replied Burns. “But you did not tell me to arrest him when he bribed you down at the skating-rink.”
Lonergan at first denied the skating-rink incident, but finally admitted it. Langdon and Heney were sent for, and joined the party at Roy’s house. Lonergan was urged to tell what he knew of graft of the Schmitz-Ruef administration. He finally consented. It was not a long story. Supervisor James L. Gallagher had acted as go-between, Lonergan stated, from Ruef to the Supervisors. From Gallagher, Lonergan testified, he had received $475 to influence his vote in the ordinance granting permits to the organized prize fight promoters to hold fights once a month; $750 to influence his vote in fixing gas rates at 85 cents per thousand instead of 75 cents, as had been pledged in the Union Labor party platform on which he had been elected; $3500 in the matter of granting the Home Telephone Company’s franchise; $4000 for his vote in granting the United Railroads its permit to establish the overhead trolley system. Lonergan stated further that Gallagher hadpromised him $750, and later $1000, to influence his vote in the matter of passing an ordinance for the sale of a franchise applied for by the Parkside Realty Company, with the “biggest thing yet” to come, when the deal was consummated, by which the city would accept the plans of the Bay Cities Water Company.
In addition to the sums received from Gallagher, Lonergan confessed to receiving $5000 from T. V. Halsey, representing the Pacific States Telephone and Telegraph Company. Halsey had paid Lonergan the money, the Supervisor said, to oppose the granting of a franchise to the Home Telephone Company.
Walsh and Boxton were sent for. On their arrival at Roy’s house they were closely questioned, and urged to confess, but neither would make a statement that night. Boxton insisted that he would admit nothing unless the other Supervisors made statements. But on the following day, March 8, Walsh made a statement under oath to the District Attorney and Heney, in which he confessed to receiving bribes from Gallagher, except in the Home Telephone bribery, in the same amount and under like conditions that Lonergan had stated bribes had been paid him.
Startling as these confessions were, they as a matter of fact involved none but Lonergan, Walsh, Gallagher and Halsey. At no point did they touch Ruef, or Schmitz, or those who had furnished the bribe money. Boxton with Walsh and Lonergan had been trapped in bribery. Two had confessed to receiving money from Gallagher, but even though the third, Boxton, added his confession to theirs, it would not have provided sufficient to convict. The confessions of the three wereuncorroborated as to each bribe. The remaining fifteen Supervisors would to a certainty have sworn they voted for the several measures without inducement. With such testimony from the fifteen, no motive could have been shown for Gallagher to bribe Lonergan, Walsh and Boxton; the measures could, with the votes of the fifteen, have been passed without the votes of the three Supervisors trapped. To make out even a fairly good case against Ruef, it was absolutely essential to have Gallagher’s testimony, and in addition thereto, the testimony of a majority of the members of the Board of Supervisors.[160]
The prosecution had made progress in trapping the three Supervisors, and in getting confession out of two of them. But at best it was only an opening wedge. The least slip would have lost all the ground gained. The three trapped Supervisors might be sent to State Prison. Had they been, Schmitz with the fifteen Supervisors remaining would have filled their places by appointment. The situation would then be more difficult for the prosecution than ever.
While the agents of the District Attorney were dealing with the complicated problems which the first break in the line of the graft defense brought upon them, Ruefcontinued a fugitive. Gallagher, Ruef’s immediate representative, realized the seriousness of the situation. He had no real loyalty for Ruef. His one thought was for Gallagher. He could for the moment see no hope for himself, except in the defeat of the prosecution. He accordingly exerted himself to block Burns, and to prevent the conditions of graft in the Board of Supervisors from becoming public.[161]Supervisor Wilson was assisting him. As encouragement, the anxious Ruef had sent Gallagher word by his sister to remain firm. But the leader was gone; Ruef’s grip was loosened. From Gallagher down to the wretched Lonergan, the Supervisors were thinking of saving themselves alone.
Ruef’s word, sent by his sister to Gallagher, was for Gallagher “to sit on the lid.” Gallagher soon after observed to Wilson that “the lid was getting a little warm”; that he thought he would get in touch with the prosecution to see what could be done with the otherside. Wilson assured Gallagher that he considered such a move would be a wise one.
Gallagher’s first definite word that as many as three Supervisors had been trapped reached him through Dr. Boxton’s attorney, H. M. Owens. Owens told Gallagher that Boxton had made full statement of the situation to him and that he was convinced, and so was Boxton, that if Boxton went to trial he would be convicted.
The effect of this information upon Gallagher can be appreciated when it is realized that Gallagher, acting as Ruef’s go-between, had himself paid Boxton money. Owens stated further that the question of giving the Supervisors immunity, provided they made complete confession, had been broached, and the suggestion had been made that Gallagher meet some member of the prosecution to discuss this point. The names of Langdon and Burns were suggested, but Gallagher did not care to meet them. He finally agreed, however, to an appointment with Rudolph Spreckels.
Before the meeting between Gallagher and Spreckels took place, Langdon, Heney, Spreckels and Burns had a conference. It was suggested that Spreckels might indicate to Gallagher that the prosecution would like to have his confession and statement, and that the District Attorney would unquestionably be able to extend to him immunity[162]on the strength of his giving full and free,truthful testimony concerning crimes in which he was involved while acting as a Supervisor in connection with the public service corporations and others.
Three meetings were held between Spreckels and Gallagher before the matter was concluded. The meeting-place was in the grounds of the Presidio, the military reservation at San Francisco.
The first of the three meetings was preliminary only. Spreckels explained to Gallagher the aims and purposes of the prosecution.[163]Gallagher would make no admissions, and indicated that under no circumstances would he consider the District Attorney’s immunity proposition unless all the Supervisors were included within its provisions.
After this preliminary meeting, Spreckels conferred with Langdon and Heney. It was agreed that Gallagher’s testimony was essential. He was, indeed, thepivotal witness. The confessions of Lonergan, Boxton and Walsh showed that he had carried the bribe money from Ruef to the Supervisors. Furthermore, the testimony of a majority of the Supervisors would be necessary. Under the circumstances it was decided that immunity could very properly be extended to all the Supervisors.
This decision Spreckels took back to Gallagher. Gallagher called his leaderless associates together.
By this time it was generally known among the Supervisors that Lonergan, Walsh and Boxton had been trapped, that at least two of them had made statements to the prosecution. Furthermore, there were rumors that other members had been to the prosecution and made confessions.
Gallagher explained the seriousness of the situation.[164]He explained to them the immunity proposition which the prosecution had made, and stated that the matter rested in their hands. He said that he was willing to sacrifice himself, if necessary, but that the whole matter was with them to decide.
Wilson and Boxton urged that the terms offered by the prosecution be accepted.[165]
The Supervisors present were at first divided. Some of them announced that they would take the attitude of denying all graft.
“Very well,” replied Gallagher, “any one who wants to take that attitude will be excused from further discussion.”
But none of the troubled officials left the room.
Boxton stated that he would involve Gallagher in a statement, and that Gallagher would have to testify to all the money transactions he had had with the board. The Supervisors knew, even then, that Gallagher had already been involved by the confessions of Walsh and Lonergan. Under the urging of Gallagher, Wilson and Boxton, they finally decided to make confession.
Ruef was not present at that last secret caucus of the Schmitz-Ruef Board of Supervisors.
Gallagher took back word to Spreckels that he had communicated to the Supervisors the message which Spreckels had delivered to him from the District Attorney, to the effect that immunity would be granted to the Supervisors, provided they would make sworn declaration of the crimes in which they were involved, giving a truthful account of all matters. The Supervisors, Gallagher told Spreckels, had decided to accept the proposition, and would meet the District Attorney for the purpose of making their statements.
Gallagher rather tardily asked immunity for Ruef, but Spreckels stated that he had not discussed this feature with the District Attorney, and that Gallagher would himself have to take the matter up with the authorities directly.
In considering this immunity arrangement with the bribed Supervisors, the fact should not be overlooked that during the five months which had passed since the opening of the graft prosecution, Spreckels and Heney had been meeting officials of the public service corporations involved practically every day at luncheon. But the corporation officials would give no assistance in exposing the corruption which was undermining the community.[166]
The resignation of Supervisor Duffey to take charge of the municipal department of public works, and of Supervisor Wilson[167]to take the office of State Railroad Commissioner, left sixteen members of the elected Schmitz-Ruef Board of Supervisors at the time of the exposures of the graft prosecution. The sixteen, after the surrender at their last secret caucus, made full confession of their participation in the gains of the organized betrayal of the city.
Supervisor Wilson added his confession to the sixteen. Thus, of the eighteen Union Labor party Supervisors elected in 1905, four years after the organization of that party, seventeen[168]confessed to taking money from large combinations of capital, the very interests which the party had been brought into being to oppose. The public service corporations, confronting a party organized primarily to control municipal government tothe end that equitable conditions in San Francisco might be guaranteed those who labor, by the simple process of support before election and bribery after election, secured as strong a hold upon the community as their most complete success at the polls could have given.
These large interests, approaching the new order with bribe-money, found politicians operating in the name of organized labor, ostensibly to promote the best interests of labor, to be not at all formidable. And when the exposure came, and the bribe-giving corporation magnates were placed on their defense, their most potent allies in the campaign which they carried on to keep out of the penitentiary, were found in the entrenched leaders of the Union-Labor party.
The Supervisors’ confessions corroborated the statements previously made by Lonergan, Walsh and Boxton.
The bribery transactions to which the seventeen Supervisors confessed, came naturally under two heads:
The first class included the briberies carried on through Ruef, who dealt directly with those who furnished the bribe money. Ruef employed Gallagher as agent to deal with the Supervisors. Thus Gallagher did not come in contact with those who furnished the money, while the Supervisors were removed still further from connection with them. Ruef, on his part, in passing the money, did not come into immediate contact with the Supervisors except in Gallagher’s case. It was bribery reduced to a fine art. In this group of transactions were included the bribery of the Supervisors to grant to the United Railroads its trolley permit; to the Home Telephone Company, its franchise; to the Pacific Gas and Electric Company, an 85-cent gas rate; to the prize fight combine, monopoly of the pugilistic contests in San Francisco. In this class, too, is properly included the Parkside Transit Company, which had, at the time the exposure came, paid Ruef $15,000 to secure a street railroad franchise, with a promise of $15,000 more when the franchise had been actually granted. The Supervisors received nothing in this transaction, but they had been told by Ruef’s agent, Gallagher, there would be, first $750 each for them in the Parkside matter. Later on they were told the sum would be $1000 each.
The second class of bribes included those which were paid directly to the Supervisors. They included the bribes paid by T. V. Halsey, agent of the Pacific States Telephone and Telegraph Company to a majority of the Supervisors to prevent their awarding the Home Telephone Company its franchise. Gallagher did not participate in these bribery transactions, and could only indirectly throw light upon them. But in the other cases Gallagher was the pivotal witness. He received the bribe money from Ruef, and, after taking out his share, he paid the balance to the other Supervisors.
With a wealth of detail, Gallagher told how he had received the money, when and where, and went into the particulars of its distribution among his associates. He had received from Ruef in all, $169,350.[169]Of this, hehad retained $27,275 for himself; the balance, $142,075, he had divided among his associates on the board.
This enormous corruption fund which Gallagher divided with the Supervisors had come from four sources. The so-called prize-fight trust had furnished $9,000 of it; the Pacific Gas and Electric Company, $13,350; the Home Telephone Company, $62,000, and the United Railroads, $85,000.
The first money that passed from Ruef to Gallagher and from Gallagher on to the Supervisors, the confessions showed, was for the prize-fight monopoly. This particular bribery seems to have been intended as a trying-out of the several members to ascertain which of them would take money in connection with the discharge of their duties as Supervisors.
Every member of the board accepted the package of bills which Gallagher tendered him. Indeed, several of them displayed surprising alertness to secure all that was their due. Ruef, it became known among them, had given Gallagher $9000, which evenly divided, meant $500 for each of the eighteen Supervisors. But Gallagher gave them only $475 each. An explanation was demanded of him. He stated that he had taken out 5 per cent. as his commission.
So strong was the dissatisfaction created by the holding out of this 5 per cent. that Ruef arranged to pay Gallagher a larger amount than the others received to compensate him, no doubt, for his extra services as bribe-carrier.
The new arrangement for the compensation of Gallagher was followed when the Supervisors were paid after fixing gas rates at 85 cents per thousand cubic feet, instead of 75 cents,[170]the sum pledged in their party platform.
One of the Supervisors, McGushin, refused to break his platform pledge, and held out for the 75-cent rate. In distributing the gas money, Gallagher paid nothing to McGushin.[171]
But to each of the remaining sixteen Supervisors, Gallagher confessed to giving $750. Following the new rule that he was to have extra compensation, Gallagher kept for himself $1350.
At the time of the gas-rate bribery, Supervisor Rea was making it unpleasant for his associates. Mr. Reahad accepted $475 prize-fight money from Gallagher, without, he testified before the Grand Jury, knowing what it was for. A few days later he told Schmitz of the matter. Schmitz contended that no such work was going on. Rea, when he received his $750 in the gas-rate case, went to Schmitz with a statement that money was used to have the gas rate fixed at 85 cents. Rea asked Schmitz what he was to do with the money. He testified before the Grand Jury that Schmitz replied: “You keep quiet. I will let you know.”
That was the last Rea heard from Schmitz on the subject. Rea testified before the Grand Jury that he still had the money Gallagher had paid him in the prize-fight and gas-rate cases.
Rea’s trip to Schmitz seems to have kept him out of the division of the Telephone and the United Railroads money.
The Telephone bribery was somewhat complicated by the fact that rival companies were in the field bidding for Supervisorial favor. It developed that eleven of the Supervisors[172]had accepted from T. V. Halsey, representing the Pacific States Telephone and Telegraph Company, bribes to block the granting of a franchise to theHome Telephone Company. On the other hand, the Home Telephone Company had paid Ruef $125,000[173]to be used in getting favorable action on its application for a franchise. Ruef gave Gallagher $62,000 for the Supervisors. Ruef states that he divided the remainder with Schmitz. In this way, the administration was bribed to grant the Home Telephone franchise, while eleven[174]of the Supervisors, a majority of the board, were bribed not to grant it.
The complications which this created almost disrupted the Ruef-Schmitz combine. The difficulty was threshed out in a Sunday night caucus. Those who had received money from the Pacific States people, with Supervisor Boxton at their head, insisted that the Home franchiseshould not be granted. On the other hand, Ruef and Schmitz, with the thousands of the Home Company in view, insisted that it should be. Both Ruef and Schmitz warned the Supervisors that they were perhaps at the dividing of the ways.
“Well,” replied Boxton significantly, “if men cannot get a thing through one way they might try and get it through in another.”
Mayor Schmitz demanded of Boxton what he meant by that. “Well,” Boxton replied vaguely but defiantly, “you know there are other ways of reaching the matter.”[175]
But Boxton was unable to prevail against the support which Ruef and Schmitz were giving the Home Telephone Company. Although eleven of the Supervisors had taken money from the Pacific States Company to oppose the granting of a franchise to the rival Home Telephone Company, all but four of those present at the caucus decided to stand by Ruef and Schmitz, and voted in caucus to grant the Home Company its franchise.[176]
The next day, in open board meeting, with Boxton still leading the opposition, the franchise was awarded to the Home Telephone Company.
The division of the money received from the Home Telephone Company people was one of the hardest problems in bribe distribution which Ruef and Gallagher were called upon to face.
The first plan was to pay the Supervisors who had at the last supported the Home Telephone franchise, $3500. At once those Supervisors who had, from the beginning remained faithful to the administration’s support of the Home Company and had refused to accept money from Halsey, pointed out that they would receive $3500 only, while the Supervisors whom Halsey had bribed would get in all $8500; that is to say, $3500 from Gallagher for voting to grant the franchise and $5000 from Halsey not to grant it. It was, those who had remained true contended, inequitable that Supervisors who had been faithful to Ruef and Schmitz from the beginning should receive only $3500; while those who had been temporarily bought away from the administration received $8500.
The “justness” of this contention appealed to all. A compromise was finally arranged, under which those who had stood out to the end against granting the Home franchise, should receive no part of the Home Telephone bribe money; those who had received $5000 from Halsey but finally voted for the Home franchise, were to return $2500 of the $5000 to Halsey, and receive $3500 from Gallagher, making the total of the telephone bribe money for each $6000; those who had received nothing from Halsey were each to be allowed $6000 of the Home Telephone money. In this way each Supervisor who had voted for the Home franchise would get $6000 for hisvote. In the case of four of the Supervisors the entire $6000 came from the Home Company. Gallagher, too, was one of this class, all his compensation being Home Telephone money. But Gallagher received $10,000. Eight of the Supervisors had received money from Halsey, and yet voted to give the Home Company its franchise. These received $3500 Home Company money from Gallagher and were allowed to keep $2500 of the Pacific States Telephone and Telegraph Company money that Halsey had given them. Thus the Pacific States was forced to pay the Supervisors part of the bribe money they received for granting its rival a franchise. Incidentally, some of the Supervisors did not return half the $5000 to Halsey. But this is a phase of the ethics of bribery upon which it is unnecessary to touch.
Ruef regarded this unique discipline of the Pacific States as just punishment for its offense of trying to buy his Supervisors away from him.[177]
Following the telephone bribery, came that of the United Railroads to secure the much-opposed over-head trolley permit. On account of this permit, Gallagher testified, Ruef had given him $85,000 to be distributed among the Supervisors.
Of this $85,000, Gallagher kept $15,000 for himself,gave Wilson $10,000,[178]and to each of the other Supervisors with the exception of Rea,[179]$4000.
Gallagher’s testimony relative to the offer of a bribe in the matter of the Parkside Realty Company franchise was quite as explicit. He swore that Ruef had stated to him there ought to be $750 for each Supervisor in this. Later on, with a change in the proposed route,[180]Ruef had told Gallagher that the amount would be $1000 to each Supervisor. Gallagher had conveyed this information to the Supervisors. At the time of Ruef’s flight, arrest and the attending breaking up of his organization, the Supervisors were impatiently waiting for this money to be paid.[181]
One by one, sixteen of Gallagher’s associates went before the District Attorney and made full confession. In every detail they bore out Gallagher’s statements. When they had done, the District Attorney had statements from seventeen[182]of the eighteen Supervisors, that they had received large sums of bribe money to influence their votes in matters in which public service corporations were concerned; he knew the purposes for which the bribe money had been paid; he had a statement from Gallagher, corroborated at many points by the testimony of the other Supervisors, that the money had been furnished by Ruef. Ruef’s testimony would bring the bribery transactions directly to the doors ofthose who had bribed. This testimony could have been had, had the prosecution agreed to give Ruef complete immunity.
Ruef was a prisoner in charge of an elisor. He knew that the Supervisors had confessed. In an agony of indecision he sent for Gallagher and Wilson to learn from them all that had occurred.[183]They told him that full statements had been made to the District Attorney. Ruef complained that Gallagher should have tried to get into touch with him before making statements. To which Gallagher replied that such a course would have been impossible.[184]Both Gallagher and Wilson advised Ruef to make terms with the District Attorney. Ruef replied that he would think it over. Little came of the conference. The statements of the two Supervisors, however, must have shown Ruef how thorough the undoing of his organization had been, and how hopeless was his own case. But Ruef, sparring for time, and pleading for complete immunity, did not make immediate confession and, as a matter of fact has not, up to thepresent writing, told the full story of his connection with the public service corporations.[185]
After the confessions of the Supervisors, the District Attorney left Ruef to himself and hastened the Supervisors before the Grand Jury, where they repeated their miserable stories.[186]
And then the Grand Jury took up the task of tracing the bribe money from those who had received it, to those who had paid it.
After the confessions of the Supervisors, the Grand Jurors had definite, detailed knowledge of the corruption of the Union-Labor party administration. The Grand Jurors knew:
(1) That bribes aggregating over $200,000 had been paid the Supervisors.
(2) That of this large amount, $169,350 passed from Ruef to Gallagher and by Gallagher had been divided among members of the board. The balance, the evidence showed, had been paid to the Supervisors direct by T. V. Halsey of the Pacific States Telephone Company.
(3) The amount of each bribe; the circumstances under which it was paid; even the character of the currency used in the transaction.
(4) The names of the corporations benefited by the bribery transactions, as well as the character of the special privileges which their money had bought.
With the exception of the Home Telephone Company, the names of the directors of these benefiting corporations were readily obtainable.[187]
With this data before them, the Grand Jurors proceeded to trace the source of the bribe money.
Naturally, men who had long held places of respectability in the community were slow to admit having given Ruef vast sums, even under the transparent subterfuge of paying him attorney’s fees.[188]Some of them, when haled before the Grand Jury, testified reluctantly, and only under the closest questioning. Others frankly stood upon their constitutional rights, and with pitiful attempt to smooth out with studied phrases the harshness of the only acceptable reason for their refusal, declined to testify on the ground that their testimony would tend to incriminate them.
Nevertheless, the Grand Jury succeeded in wringing from the officials of the several corporations involved, damaging admissions; admissions, in fact, quite as startling as had been the confessions of the Supervisors. The refusal of some of those not unreasonably under suspicion, to testify was, too, quite as significant.
In the matter of the bribery of the Supervisors by T. V. Halsey, agent of the Pacific States Telephone and Telegraph Company, the Grand Jury had information that eleven Supervisors had been paid over $50,000 to oppose the granting of a franchise to the Home Telephone Company. A majority of the payments were made in an unfurnished suite of three rooms in the Mills Building. Frank Drum, a director of the company, admitted having engaged the rooms at Halsey’s request. E. J. Zimmer, auditor for the company, testified that Halsey held the position of General Agent of the company. Halsey’s duties, the testimony showed, were assigned him by Louis Glass, vice-president and general manager, and for a time acting president of the company. Halsey, under the company’s organization, reported to Glass. Zimmer testified that Halsey could not spend the company’s money except on the proper approval of the executive officer of the company. From October, 1905, when President Sabin of the company died, until February, 1906, when Henry T. Scott, Sabin’s successor, was elected, Glass acted as president and as executive officer. He had, according to Auditor Zimmer, authority to approve expenditures made by Halsey. After Scott’s elevation to the presidency, either Glass or Scott could have approved such expenditures. Zimmer testified further to giving Halsey, at Glass’s order,[189]as high as $10,000 at a time. Halsey[190]gave no vouchers for these large sums; they did not appear on the books;[191]they were carried on tags.
Zimmer stated that he did not know for what the funds were used; had merely followed out Glass’s instruction, and given Halsey the money.
The testimony of Thomas Sherwin threw some lightupon the bookkeeping methods followed. Sherwin had been traveling auditor for the American Bell Telephone Company, which concern owned 51 per cent. of the stock of the Pacific States Telephone and Telegraph Company. Later he took Zimmer’s place as auditor of the Pacific States Company.
Mr. Sherwin admitted that some of Mr. Halsey’s “special expenses,” at least, were finally charged to the company’s legal department.[192]
Passing from the investigation of the bribery transactions of the Pacific States Telephone and Telegraph Company to the activities of the Home Telephone Company, the Grand Jury examined prominent business men of Los Angeles as well as of San Francisco.
The plan of operation followed by the capitalists behind this enterprise was to organize a construction company, whose part was to establish the plants, put theminto operation and turn them over to the operating companies, taking their pay in the securities of the local operating company. Thus, at San Francisco, the Empire Construction Company played an important part in the Home Telephone Company enterprise.
As Heney put it, the Empire Construction Company received the most benefit from the granting of the Home Telephone franchise. The Empire Construction Company furnished at least part of the money that went into the fusion campaign fund in 1905. Investigation showed that 25 per cent. of the stock of the Empire Construction Company belonged to men who were in the construction solely, while 75 per cent. was in the hands of men who were financing the enterprise. This last block of stock at the time of the investigation was divided among James H. Adams and Thomas W. Phillips of the Adams-Phillips Company, A. B. Cass, Gerald S. Torrance and A. K. Detweiler. Detweiler could not be found. Adams, Cass and Torrance, after answering some of the questions put to them, availed themselves of their constitutional privilege, and refused to make further answers. The books of the Adams-Phillips Company disappeared and employees of that company undertook to evade answering questions regarding the disappearance, on the ground that they might incriminate themselves. But a sharp order from the Superior Court brought out their testimony. However, none of them gave testimony that led to the discovery of the missing volumes.
But the general trend of the testimony went to show that the responsible agent for the Empire Construction Company and the Home Telephone Company in SanFrancisco was A. K. Detweiler. The testimony showed Detweiler to have been at Ruef’s office in consultation with Ruef and Supervisor Gallagher; he was active in every move that was made on behalf of the Empire Construction Company and of the Home Telephone Company in San Francisco, and had the disbursing of the funds.
Incidentally, through the testimony of Dr. Fred Butterfield, a representative of Adolphus Busch, the brewer, the Grand Jury learned that a third telephone company, the United States Independent, seeking a franchise to do business in San Francisco, would have bid for the franchise which the Home Company received, had not the franchise been so worded that only the telephone system controlled by the Home people could be operated under it. Butterfield stated that his company, made up of responsible capitalists, considered the franchise worth something over a million dollars, and was prepared to bid up to a million dollars, if necessary, to get it. The Home Company paid San Francisco $25,000 for the franchise. Butterfield testified that his company had intended to invest $4,500,000 in the San Francisco enterprise, and that Ruef knew of the extent of the company’s plans. With such testimony, the assertions of Ruef’s partisans that opposition to the Ruef-Schmitz administration retarded development of the community compare curiously.[193]
The Grand Jury could not secure the attendance of Mr. Detweiler, for about the time of the investigation Mr. Detweiler mysteriously disappeared. The investigation into the affairs of the Home Company had, therefore, to be concluded without Mr. Detweiler’s testimony.
Following the policy of the stockholders of the Empire Construction Company, the officials of the United Railroads refused to testify. President Patrick Calhoun[194]and Thornwell Mullally, assistant to the president, when given opportunity to state their side of the case under oath, stood upon their constitutional rights, and declined to give evidence that might incriminate them.[195]They were accordingly excused from the Grand Jury room.
But the employees of the company did not escape so easily. When, for example, George Francis, William M. Abbott, George B. Willcutt and Celia McDermott refused to answer questions put to them in the Grand Jury room, they were haled before the Superior Court, where they were informed that they must testify.
In spite of the hostility of these witnesses, the prosecution succeeded in securing a wealth of data regarding $200,000 which passed into the hands of Tirey L. Ford and, according to the theory of the prosecution, from Ford to Ruef.
The prosecution established the fact that two days before Mayor Schmitz signed the trolley permit, that is to say, on May 22, 1906, Patrick Calhoun, as president of the United Railroads, received by telegraphic transfer from the East to the United States Mint at San Francisco, $200,000.[196]Two days later, the day the trolley permit was signed, President Calhoun took Fordto the Mint and instructed Superintendent of the Mint Leach to give Ford $50,000 of the $200,000. Ford told Leach that he wanted currency. The currency was finally secured by exchanging gold for bills at the Mint headquarters of the relief work then being carried on in San Francisco. These bills, it was shown, were all in small denominations, having been sent to San Francisco from all parts of the country by individual subscribers to the relief fund.
This money was taken away from the Mint, the testimony showed, by Ford and William M. Abbott.
Soon after, Ruef loaned Supervisor Rea[197]$3500. By a curious trick of fate Rea had leased a piece of property from Rudolph Spreckels. In payment on this lease he used the money that Ruef had loaned him. This money was all in bills of small denominations. Late in July Ruef gave Gallagher $45,000, all in bills of small denominations, as partial settlement with the Supervisors for granting the trolley permit. Gallagher gave Wilson of this money $5000, and the other Supervisors with the exception of Rea $2000 each. They all understood that it was because of the trolley franchise deal. The balance Gallagher retained for himself.
The confessing Supervisors, with the exception of Wilson and Rea, testified that their first payment on account of the trolley permit was $2000 each, in bills of small denominations. Wilson testified to having received $5000.
Later, Ford, making two trips to the Mint, drew outthe $150,000 balance of the $200,000 that had been telegraphed to Calhoun’s credit. As before, the Mint paid him in gold, and as before, Ford exchanged the gold for currency. But instead of getting bills of small denomination, on the two trips which Ford made for that $150,000, he secured fifty and one hundred-dollar bills.
On the day that Ford drew the last of that $200,000 from the Mint, an agent in the employ of the prosecution followed Ruef from his office to the car barns in which Ford’s office was then located. A few days later Ruef gave Gallagher $40,000 in fifty and one hundred-dollar bills, the greater part of which Gallagher distributed among the Supervisors as second and final payment on account of the granting of the trolley permit.
In the Parkside deal, the Grand Jury had little difficulty in tracing the money involved. William H. Crocker,[198]a capitalist of large affairs, who owned the largest interest in the company, showed astonishing ignorance of the management. The Grand Jury learned little from him.
But those interested in the enterprise with Crocker not only told how half the money was paid Ruef, but how the books had been manipulated to conceal the payment.
Ruef, according to the testimony of officials of the company, had first demanded $50,000 as price for his employment to put the franchise through, but had finally agreed to take $30,000. This amount, officials of the company testified, was provided by drawing two checks, one in favor of H. P. Umbsen and the second in the name of Douglass S. Watson, secretary of the Parkside Company. Umbsen and Watson thereupon deeded to the Parkside Company two parcels of land. The transaction was then charged to the purchase of property.[199]The property was deeded back to Umbsen and Watson at the same time, but these last deeds were not immediately recorded.
Watson cashed the checks at the Crocker-Woolworth Bank, of which William H. Crocker was president. He testified that he received currency for them.
The $30,000 he took to G. H. Umbsen. Half the $30,000 Umbsen paid Ruef.
At the time of the exposure, Umbsen[200]testified hewas withholding the second payment until the franchise should be put through.[201]
In the gas-rate case, the Grand Jury found that the corporation that would, in the final analysis, benefit by the increase in gas rates, was the Pacific Gas and Electric Company. The four responsible men in this company were found to be N. W. Halsey, John Martin, Eugene de Sabla and Frank G. Drum. Halsey was out of the State for the greater part of the time and Cyrus Bierce, acting as treasurer of the corporation, looked after his interests. This narrowed the responsibility down to de Sabla, Martin and Drum.
De Sabla testified before the Grand Jury that Ruef was not, to his knowledge, at any time on the pay roll of the company. Martin swore that he knew of no money that had been expended in connection with the fixing of the gas rates, and expressed himself as being as surprised as anyone at the confessions of the Supervisors to having received money after the gas rates had been fixed. Later, after Ruef had plead guilty to extortion, both de Sabla and Martin refused to testify further before the Grand Jury.[202]
Mr. Frank G. Drum, when called before the Grand Jury, stated that he had had no conversation with Ruef in reference to the fixing of the gas rates.[203]But later Ruef told the Grand Jury that the money which he had turned over to Gallagher in the gas-rate transaction had come from Drum.[204]
The first to be indicted because of these transactions was Ruef. Sixty-five indictments were on March 20 returned against him. Eighteen were based upon the bribing of Supervisors in the so-called fight trust matter; seventeen upon the bribing of Supervisors in fixing the gas rates; thirteen upon the bribing of Supervisors in the matter of the sale of the Home Telephone Company franchise; seventeen in the matter of granting the over-head trolley permit.
On the same day, ten indictments were returned against Theodore V. Halsey, of the Pacific States Telephone and Telegraph Company, for the bribery of Supervisors to prevent the sale of a franchise to a competing telephone company. A number of indictments were found against A. K. Detweiler, for bribing Supervisors in the matter of the sale of the Home Telephone franchise. The Detweiler indictments, thirteen in number, were based upon payments of money by Ruef to Gallagher, and by Gallagher to different members of the board. On March 23, the Grand Jury returned nine indictments against Louis Glass, vice-president of the Pacific States Telephone and Telegraph Company, based upon the bribing, through Halsey, of Supervisors to prevent the granting of a competing telephone franchise.
During the two months that followed, the Grand Jury continued at the steady grind of graft investigation. Finally, on May 24, one additional indictment[205]was brought against Halsey and two against Glass. On thatdate, fourteen indictments were returned against Patrick Calhoun, Thornwell Mullally, Tirey L. Ford, William M. Abbott,[206]Abraham Ruef and Mayor E. E. Schmitz, indicted jointly, for the bribery in connection with the granting of the over-head trolley permit.
The day following, May 25, G. H. Umbsen, J. E. Green, W. I. Brobeck and Abraham Ruef were jointly indicted fourteen times on charges of offering a bribe to fourteen Supervisors in the Parkside franchise matter. The same day, fourteen indictments were returned against Frank G. Drum, Abraham Ruef, Eugene E. Schmitz, Eugene de Sabla and John Martin on charges of giving and offering bribes to fourteen Supervisors in the matter of fixing the gas rates.
Still another series of graft indictments were to be found. Three prize-fight promoters, W. Britt, “Eddie” Graney and “Jimmie” Coffroth were, on nine counts, indicted jointly with Schmitz and Ruef for bribery in connection with the awarding to them of virtually a monopoly of the promotion of prize fighting in San Francisco.