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| The scandal that made Thomas Nast's cartoons famous. |
Before Donald Trump, before “The One Percent,” before the the Koch Brothers, before Citizens’ United, back in Houdini’s era the U.S. Republican Party enjoyed its greatest money-raising scandal ever. It’s known today as the Whisky Fraud.
It was a conspiracy of high-ranking government officials, plus the private sector, whose goal was to steal tax money to fund the Republican Party.
We ran across the Whisky Fraud while researching Houdini’s rich uncle Simon Newman. As we’ve written, Simon was owner of a distillery and a yeast factory, and had a bloody rivalry with the Kings of Booze & Yeast, the Fleischmann brothers.
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| Houdini's uncle, Simon Newman. © Sharon Kurlansky |
After Simon proved tougher than the Fleischmanns had expected, an interesting reversal of fortune took place. Fleischmann failed to drive Newman out of business, so he bought him out instead. In return for his leaving the yeast and whisky businesses, Fleischmann paid Newman a healthy sum regularly for the rest of his life.
Newman, to make this work, needed to disengage from his other business partners. They were preparing to join the infamous Whisky Ring, a nationwide gang of distillers who conspired to defraud the Federal government out of hundreds of millions of dollars in unpaid whisky taxes.
The conspiracy was vast and sinister and went all the way up to the chief of the Internal Revenue Service and even into the White House of President Ulysses S. Grant. He was a good general but a poor judge of character. His chief advisor was the ringleader.
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| President Grant |
The story is complex and too much for this simple blog. You can read a good summary at the National Archives website, here.
Many in Houdini's circle were tainted by the Whisky Fraud, including his father's Wisconsin benefactor, David Hammel. For our purposes, suffice it to say that Newman’s booze-business partners were startled one day when Uncle Simon sold his entire stake to them for a mere $3000. They were, at first, happy to make the deal because they owed him at least $150,000. He insisted on doing the deal then and there, for cash on the barrelhead (we think this is where that phrase originated). They did, he quit, and a few days later his partners had fled and were being hunted by detectives.
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