“Bargain Day in Washington,” Ellison Hoover, 1924.

The year was 1924, the middle of the “Roaring Twenties,” and the United States had quickly moved on from wartime scarcity to peacetime abundance. Prohibition was in full swing, complete with speakeasies and bootlegging and mobsters. The Russian Revolution and the Red Scare were all over the news, and “Big Oil” was getting a huge boost from an increase in automobile ownership.

Meanwhile, hundreds of members of the Industrial Workers of the World, or IWW, were languishing in prison or awaiting deportation. The repression of immigrants and radicals during the war years continued during the “Red Scare,” and in the 1919 and 1920 “Palmer Raids,” the government had deployed vigilantes to ransack union halls and had made mass arrests. Because of “criminal syndicalism” laws, it was a crime to simply belong to the IWW in many states. In response to violations of civil rights against immigrants, conscientious objectors, and the IWW, the American Civil Liberties Union was founded in 1920. 

This was the backdrop against which a massive government scandal occurred, named the Teapot Dome Scandal. It began with a tiny irregularity around an oil lease on government land and kept expanding to include more and more public officials, all the way up to the cabinet of former president Warren G. Harding. 

It took years for the full story to come out, but in short, oil barons bought the U.S. presidency and cabinet and then exploited it to gain access to land that had been specifically set aside by the government for emergency military use. Given that World War I had only ended six years before, with all the America-and-apple-pie citizens in full patriotic fervor, this must have come as a shock. 

How had so much corruption gone unnoticed? The head of the Justice Department, Attorney General Harry M. Daugherty, should have been investigating, but he covered it up instead. He had used his role to build a criminal enterprise that is now remembered as the “Ohio Gang.” In the book The Teapot Scandal, Laton McCartney explains how the gang made money selling liquor permits, pardons, and paroles to bootleggers. At the head of this enterprise was the Bureau of Intelligence director William J. Burns. He thoughtfully covered up the murder of a close friend of President Harding, and he sent federal agents to spy on senators and ransack their offices in an attempt to frame them.

What a surprise! Who could have predicted this? For one, the Wobblies. 

Billy Burns and Labor Spying

At the time of the Teapot Dome scandal, labor espionage was rampant and widespread.  For a picture of the scope of espionage, I recommend the article “From Pinkerton to G-Man: The Transition from Private to State Political Repression” by John Drabble. It was a big business. The combined annual income of the Pinkerton, Burns, and Thiel agencies was estimated at $65 million in 1920 dollars, which would be about a billion dollars today. There were ten thousand local branches with 135,000 spies on their rolls. 

Spies would not only infiltrate union campaigns and union leadership, but also act as “agent provocateurs,” either inciting union members to violence, or failing that, throw the bombs themselves. Corporations were happy to pay detective agencies to stop union campaigns, and the agencies paid morally bankrupt employees to provide juicy details. The spies had a financial incentive to draw out conflict and in some cases instigate violence. 

None of this was a secret. The detective companies operated legally and with full approval by law enforcement. William J. Burns was also well known in the labor movement. In 1912, as one example among many, the poet and IWW member Covington Hall painted a verbal picture of Burns detectives spying an interracial timber worker’s union with “I am Here for Labor”:

“Private detectives are everywhere, and in the Timber Belt today we have practically a government of the people by a detective agency for the lumber trust. These social vultures, these spawn of Burns and Pinkerton, follow us on the trains, are in the mills, the camps, the forests, and even in the jail among the imprisoned workers, posing as martyrs to the sacred cause of human liberty!” (International Socialist Review, September 1912.)

Burns was also well known to the American Civil Liberties Union president Roger Baldwin. In 1923, Burns accused Baldwin of working for Moscow, and Baldwin prepared to go on the radio to “answer Burns the way he deserved.” Burns used government connections, including the Department of Commerce, to encourage radio stations not to let Baldwin speak. This entertaining story is told in the article “FBI’s predecessor once tried to keep the ACLU off the airwaves.”

At the time, the ACLU was working hard on behalf of the IWW “class war prisoners.” It was fighting deportations, trying to stop criminal syndicalism laws, and trying to secure the release of Wobblies arrested during the Palmer Raids. 

The IWW, then, was not alone in wanting to stop Burns and get him out of office. However, knowing Burns was corrupt and proving it were two different matters. Even after the Burns Detective Agency sent agents to break into a senator’s office, Burns claimed it had nothing to do with his role as director of the Bureau of Intelligence, because he had “stepped down” as head of the company.  He testified under oath that he kept his business separate from his government office. He was lying, and the IWW was about to prove. 

The IWW Gets the Goods

In the summer of 1923, two federal operatives from the Bureau of Intelligence, with Burns at the head, infiltrated the union at the Old Dominion Copper Company of Globe, Arizona. The first was Haines, and his successor was J.J. Spear. 

Members of the IWW found evidence that Spear was a private detective and sent it to General Headquarters. For a taste of the documents the IWW acquired, here is a message from Spear to a superior in the Justice Department from The Labor Spy by Sidney Howard and Robert Dunn:

“Dunn gave me the name of a fellow worker in Superior, M. Demitroff, an Austrian, who I am to see when I go over there. He is an active Wobblie, not an American citizen. He was a deserter from the Austrian army during the war and is very much afraid of being shot if he were sent back to his own country. This ought to be a good chance to get rid of one red.”

The evidence turned out to be extremely relevant to the Teapot Dome Scandal. As the General Secretary-Treasurer Tom Doyle later told union members

“Here is a lot of evidence, which among other things shows that the Department of Justice is run by William J. Burns, and his detectives were used to stir up plots. We have the goods on him. Here is Burns’ own official letterhead, with his bona fide signature and seal of the department on it. It is a nice scandal…”

Some of the evidence was published by the IWW in the publication Industrial Solidarity on March 29th, 1924, a month after Burns had sworn under oath that his detective agency wasn’t connected to the Bureau of Intelligence. The exposure of Haines and Spears proved he was lying. 

On April 1st, the Communist Party’s Daily Worker reprinted some of this evidence with the sensational headline “Burns Man Planned Deportation and Shooting of Foreign-Born Miner, Secret Letter Shows.”

These disclosures didn’t make the New York Times, but they would have circulated among radicals and liberals who were trying to bring down Burns, so they would certainly have weakened Burns’ position.

On April 10th, on subpoena to a Senate Committee, Burns admitted to sending federal agents to spy on Senator Wheeler in an effort to frame him.

 In his remarks to the IWW convention, General Secretary-Treasurer Doyle explained, “People back East got interested in this information. They wanted this information taken down to Washington and used against Burns. He was under investigation…It was necessary to get him to resign.”

In May, GST Doyle was asked by Robert Dunn of the American Civil Liberties Union to take a trip to Washington to present his evidence before a senate committee in order to get Burns to resign. The evidence was also important in fighting future anti-union “criminal syndicalism” laws. Burns beat him to the punch, however, by resigning the day before Doyle was to testify.

Farewell to Burns

The resignation of Burns from the Bureau of Intelligence was a major blow against one of the IWW’s biggest enemies. Unfortunately for everybody, he was succeeded by an up-and-coming intelligence agent, J. Edgar Hoover, and Burns kept on running his detective agency.

The evidence gathered by the IWW, though, had a lasting impact on the public’s understanding of labor espionage. Later that year, The Labor Spy was published, revealing the full scope of industrial evidence and including excerpts of the documents provided by the IWW. This book   was followed in 1932 by the book Spying on Workers by Robert W. Dunn. In 1935, the U.S. government made it illegal for companies to spy on workers. And between 1936 and 1941, the U.S. government investigated violations of free speech and the rights of labor in the La Follette Civil Liberties Committee. 

Lessons Learned

The Teapot Dome scandal taught the American public, not for the first time nor the last, that government and big business work hand-in-hand, against the public good. The Burns Detective Agency was happy enough to violate the civil rights of union members and immigrants, and it was equally happy to help cover up graft and to terrorize senators. There was a downside to privatizing law enforcement and espionage. 

But maybe the biggest lesson is that strong unions are a benefit to democracy. Plenty of people had evidence against Burns, but they were afraid to use it. But the Industrial Workers of the World had the guts and got the goods.

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