FDR and Abuse of Power

The Democrats are impeaching President Trump for abuse of power because in one conversation he suggested to the Ukrainian government that they reopen an investigation of Bursima, the Ukrainian natural gas company in which Hunter Biden had an influence peddling job that netted him $50,000.00 a month.  The thought occurred to me that taking this impeachment sham seriously, difficult I know, how would Democrat Presidents of the past fare?  Let’s start with the founder of the modern Democrat Party, Franklin Delano Roosevelt.  FDR was the first President to weaponize the IRS against political adversaries.  Other allegations of abuse of power could be made against President Roosevelt, but lets stick with the IRS:

“My father,” Elliott Roosevelt observed of his famous parent, “may have been the originator of the concept of employing the IRS as a weapon of political retribution.” Not before Franklin D. Roosevelt had the federal government taken so much individual income. In 1935, when Roosevelt hiked the top income tax rate to 79 percent and the top estate tax rate to 70 percent, millionaires searched for deductions and loopholes to protect their private property. During the 1930s, FDR began experimenting with the IRS, which had been placed under the treasury department, as a means of attacking political enemies and generating more revenue for his New Deal programs.

The first person to incur Roosevelt’s wrath and thereby receive a long sustained investigation by the IRS, was Huey Long. As a flamboyant and clever politician—some would say demagogue—Long became governor of Louisiana and built a successful political machine. He promised free textbooks, cheap health care, and other benefits to voters of Louisiana, and he fulfilled some of his promises through high corporate taxes. Also, Long and his political cohorts took kickbacks from oil companies, highway builders, and other service providers. Long built up a strong enough cash base to sustain his minions in office in Louisiana while he was elected to the U. S. Senate.

In Washington, Long became the sharpest thorn in Roosevelt’s flesh. Long supported the president at first, but gradually came to criticize almost all of his New Deal programs as inadequate or misdirected. He castigated the AAA and argued for inflation, not for paying farmers not to produce. Of the NRA Long said, “Every fault of socialism is found in this bill, without one of its virtues.” He also ridiculed Roosevelt’s New Deal administrators as charlatans and incompetents. He regularly baited Joe Robinson, the Senate majority leader, and made it hard for Roosevelt to get his bills passed.

Roosevelt, after denouncing Long as one of the two most dangerous men in the country, searched his arsenal for weapons to deploy against the Louisiana senator. At first, Roosevelt tried to check Long by denying him federal patronage. The president made Louisiana unique by appointing a director from outside the state to come in and administer federal relief programs. Roosevelt also sent federal patronage to Long’s political enemies, led by ex-governor John Parker. The order came down from Roosevelt: “Don’t put anybody in and don’t help anybody that is working for Huey long or his crowd. That is 100 percent.”

Long responded by refusing to take federal programs when possible. Harold Ickes, director of the PWA, then criticized Long publicly for refusing to take about half the federal money allocated to the state for highway construction. Such refusal to accept federal funds was unprecedented, Ickes said, and would cripple economic development in Louisiana. Long simply denounced the men appointed to use such money as crooks. “[P]ay them my further respects up there in Washington,” Long told reporters. “Tell them they can go to hell.”

T. Harry Williams, who has written an exhaustive biography of Long, thoroughly researched the patronage dispute between Roosevelt and Long. Williams concluded as follows:

He [Long] was not greatly concerned about the practical effect of his loss of patronage: the number of federal jobs involved was relatively small, and the number of state jobs at his disposal was more than sufficient to enable him to sustain his power. But it was humiliating to him that his enemies should control the [federal] patronage and then boast about it. It would encourage them to continue their opposition to him.

Long’s solution was to go national, and recruit a national base of supporters, perhaps for a future presidential run himself. In February 1934, Long, in a national radio speech, announced his “Share Our Wealth” clubs with the slogan, “Every Man a King.” He promoted a steeply progressive income tax to guarantee every family a “homestead” and a guaranteed annual income. Long’s crusade generated 60,000 letters weekly, mostly from fans eager to start Share Our Wealth (SOW) clubs in their communities. As Long encouraged the national membership in his clubs, Roosevelt tested Long’s potential presidential support. Postmaster General James Farley, Roosevelt’s accurate pollster, estimated Long’s national vote at four million and possibly six million votes by 1936—easily large enough to swing an election to the Republicans.

Farley’s estimates were confirmed when Long traveled around the nation to promote SOW clubs and explore a presidential run. The Carolinas, for example, became a testing ground for Long. “South Carolina is the strongest state for Roosevelt,” Long discovered. “If I can sell myself here, I can sell myself anywhere.” In March, Long toured South Carolina. Governor Olin Johnston tried to ignore Long, especially because Roosevelt had telephoned him earlier threatening to cut off all federal patronage if he helped the Louisiana senator. Even after Johnston’s snub, Long spoke on the University of South Carolina campus, at the capitol, and throughout the state. He attracted huge crowds and 140,000 voters in South Carolina signed cards of support for Long if he would run for president.

Long’s budding national support and his ability to overcome Roosevelt’s denial of federal funds were a major threat to the president. Roosevelt wanted a second term. If Long ran for president, he might siphon enough votes from the Democrats to elect a Republican. (9) Also, Long’s ability to hold Louisiana without federal patronage could spur other rebels to challenge Roosevelt’s allies, who were distributing patronage in other states. Much was at stake, and Roosevelt turned to the IRS to investigate Long and give the president an advantage.

We can’t tell for sure when Roosevelt decided to use the IRS against Long, but we do know this. Henry Morgenthau, Roosevelt’s long-time friend, became secretary of treasury in January 1934. Three days after his Senate confirmation, Morgenthau called in Elmer Irey, head of the special intelligence division of the IRS. “Why have you stopped investigating Huey Long, Mr. Irey?” Morgenthau asked. Irey explained that any investigation of Long was on hold. “Get all your agents back on the Louisiana job,” Morgenthau then ordered. “Start the investigation of Huey Long. . . .” Morgenthau further asked Irey to report to him once a week. Irey did so for almost a year. When he failed to schedule an appointment one week—for lack of new information—Morgenthau made a phone call to him and said, “You haven’t been to see me in eight days.” Irey sent dozens of agents into Louisiana, and one of them even infiltrated the Long organization. In the course of the investigation, Irey also spoke with Roosevelt face to face, and they worked together to get the right lawyer to prosecute Long and his cohorts.

Roosevelt’s (or Morgenthau’s) decision to use the IRS on Long was a logical move. Long was not independently wealthy. Yet he somehow had enough money to hold the loyalty of his state even though his opponents were endowed with federal funds. How could this be? The Roosevelt administration logically concluded that graft and kickbacks from state contracts were enough to keep Long in power. Here, however, Long had a dilemma. Most state officials and contractors had to pay the Long machine to keep their jobs and their state contracts. If Long refused to report these kickbacks on his tax return, the IRS could prosecute him for tax evasion. If, however, Long did itemize this cash, and did report it as income, then Roosevelt could publicize Long’s use of politics to extort wealth and preserve power. Those who gave the kickbacks to Long would also be publicly embarrassed.

Long naturally resented the swooping down of the IRS into Louisiana. On the floor of the Senate, he protested the “hordes” of agents, 250 at least, on his trail and that of his friends. “They did not try to put any covering over this thing,” Long said. They just boasted he and his friends “were all going away.” At one level, Irey had an agent infiltrate the Long organization; at another level, Irey learned what he could from Long’s enemies. Among these were the Jahnke brothers, highway contractors, whose information on Long was useful to Irey. But since the Jahnke brothers were unable to get state contracts from Long, they were near bankruptcy. Irey, therefore, recommended and secured for them a loan from the federal Reconstruction Finance Corporation to keep them in business, thus giving them further incentives to help the IRS catch Long.

By 1935, the IRS began indicting lower-level and more vulnerable members of Long’s team. State Representative Joseph Fisher was successfully prosecuted for tax evasion in April 1935. Then Long was assassinated in September and his machine fell into disarray. In October, Abraham Shushan, a Long stalwart, was acquitted of tax evasion. Others eventually settled with the IRS in civil court. “It was at the time,” tax expert David Burnham concluded, “that the cases had been dropped in return for a pledge from Long’s heirs to support Roosevelt in his bid for a second term.” Most of the remnants of the Long machine, led by Huey’s brother Earl, did, in fact cooperate with Roosevelt and the president won almost 90 percent of Louisiana’s vote in 1936—a larger percentage than he got in either neighboring Texas or Arkansas. After the election, Irey was able to secure a couple more prosecutions for tax evasion, mail fraud, and misuse of WPA labor for personal use—but no more would Louisiana politicians thunder against Roosevelt and the New Deal.

Roosevelt marveled at the potential of the IRS for removing political opponents. Newspaper publisher William Randolph Hearst also found himself under investigation when he began opposing Roosevelt’s political programs. Such a situation was awkward for Elliott Roosevelt, the president’s son, whom Hearst had astutely hired as aviation editor for his newspaper, the Los Angeles Express. According to Elliott, “At about the same time that he [FDR] sent federal investigators into Louisiana to prove the financial shenanigans of Huey Long and company, father had the Internal Revenue Service conduct a similar scrutiny of every corner and crevice of Hearst’s empire. . . .” Hearst, however, did not depend on patronage and kickbacks to make his money and extend his influence. The nature of his business differed from that of Long, and Hearst’s books were in order.

So were those of Father Charles Coughlin, the popular radio priest from Detroit, who began meeting with Huey Long in 1935 and joined him in denouncing Roosevelt. The IRS sent reports on Coughlin’s finances to the president, who also put James Farley, the postmaster general, to work on Coughlin’s mail—how much was he getting and how successful was his financing? Roosevelt learned a lot about Coughlin’s financing, but could not find evidence to put him in jail. Thus, Coughlin joined Long and Hearst with his newspaper chain in regularly denouncing Roosevelt. Sometimes those three critics were able to join forces to defeat Roosevelt on key political issues. The president, for example, wanted the U. S. to draw closer to the League of Nations and join the World Court. He was furious when Hearst in his papers, Coughlin on the radio, and Long on the Senate floor generated enough opposition to the World Court to defeat Roosevelt’s plan.

As Elliott Roosevelt admitted, “other men’s tax returns continued to fascinate Father in the [nineteen] thirties.” Boake Carter, for example, was a radio commentator who criticized Roosevelt for “meddling” in the Far East and risking a war with Japan. Roosevelt—according to his son—had an IRS investigation of Carter and also asked Frances Perkins, the secretary of labor, if she would check Carter’s status as an alien and see if he could be deported.

Go here to read the magisterial article by Burton W. Folsom, Jr. of Hillsdale College.  More posts to come on other Democrat presidents.  Tu quoque of course is not an excuse for bad behavior, but it is useful in determining whether an impeachment attempt of a president is principled or purely political.    If presidential conduct in the past was winked at or ignored, while  a contemporary president is sort to be driven from office for much lesser conduct, that it is hard to escape the conclusion that political motivation, rather than principle, is behind the effort.