Charles R. Forbes

Charles Robert Forbes (February 14, 1878 - April 10, 1952) was appointed the first Director of the Veterans' Bureau by President Warren G. Harding on August 9, 1921 and served until February 28, 1923. Caught for army desertion in 1900, he went on to serve in the military and was a decorated World War I veteran. He first became active in politics in the Pacific Northwest. In 1912, Forbes moved to Hawaii and served as chairman on various federal commissions. While Senator Warren G. Harding was on vacation in Hawaii the two met by chance and became friends. After the 1920 U.S. Presidential election, President Harding appointed Forbes director to the newly created Veterans Bureau, a powerful position in charge of millions of dollars in government expenditures and supplies.

His tenure as the first Veterans Bureau director was characterized by corruption and scandal. Forbes was considered the "dashing playboy" of Washington and a favorite of President Harding. Having returned to the United States after fleeing to Europe in 1923, he was convicted of conspiracy to defraud the U.S. Government and sent to federal prison in 1926, where he was cell mates with Frederick Cook, the person who often claimed to be the first to reach the North Pole. Forbes was released 8 months later in 1927. He died in 1952.

Early life
Forbes was born February 14, 1878 in Scotland. As a child, he and his parents emigrated to America and the family lived in New York and Boston. When Forbes was 16 years old he joined the marines as a musician and was eventually stationed in the Washington Navy Yard. Trained as an engineer, Forbes attended Philips Exeter Academy, Cooper Institute in New York, Columbia University, and the Massachusetts Institute of Technology. He enlisted in the army in 1900; however, two months later he was charged with desertion. He was found, sent back to the army, and restored to duty without a trial. Forbes went on to serve in the Philippines after completing his enlistment, and was honorably discharged from the army in the rank of sergeant first class in 1908.

Pacific Northwest and Hawaii
After leaving the Army, Forbes engaged in construction work in the Pacific Northwest, moving to Seattle. He became active for the first time in state politics. He got married in Seattle to his wife Katherine and started a family having one daughter, Marcia. In 1912, Forbes and family moved to Hawaii, at that time a United States territory, and worked at the Pearl Harbor naval station as an engineer for the next five years. While in Hawaii, he served in four federal government appointments as Commissioner of Public Works, Chairman of the Public Service Commission, Chairman of the Harbor Commission and chairman of the Reclamation Commission appointed by President Woodrow Wilson. During this time in Hawaii, Forbes became acquainted with then Senator Warren G. Harding, who was on vacation with his wife at the time, a meeting that would eventually change both of their lives. His charismatic personality and hospitality created a positive impression with Harding, and soon the two became good friends. Forbes' wife became a close friend of Mrs. Harding.

World War I
After the United States entered World War I in 1917, Forbes enlisted again into the U.S. Army. He served notably overseas in France in the United States 41st and 33rd Infantry Divisions. He was awarded both the international Croix de Guerre Medal and the United States Distinguished Service Medal. Forbes' final promotion was to the rank of lieutenant colonel. After World War I, Forbes returned to Washington from France and continued to work for the Hurley-Mason Construction company. Forbes worked his way up to vice president of Hurley-Mason Construction and was in charge of the Spokane division.

Harding Campaign 1920
When Forbes found out his good friend Warren G. Harding was running for president in 1920, he traveled to Marion, Ohio and swung the Washington delegate vote for Harding at the 1920 Republican presidential convention held in Chicago. Harding would go on to win the election of 1920 with the motto for America to "return to normalcy"; giving businesses tariff protection and tax relief, and keeping America out of foreign affairs.

War Risk and Veterans' Bureaus
Initially, Forbes desperately tried to be appointed chairman of the United States Shipping Board, a board that controlled vast amounts of government shipping resources to private shippers. President Harding, however, denied him the position and instead appointed Forbes to the Bureau of War Risk Insurance on April 28, 1921. Forbes's salary at the War Risk Bureau was $10,000 a year. On August 9, 1921 Congress passed what was known as the "Sweet Bill" creating the Office of the Veterans Bureau. After World War I, thousands of wounded and disabled veterans did not have adequate facilities for proper care and needed job skills. The Veterans Bureau was created to remedy this dilemma for the World War I veterans who desperately needed medical attention, hospitals, and employment. Across the country there were fourteen regional offices that were semi-independent from Washington D.C. Bureau. Congress awarded the Veterans Bureau millions of dollars in expenditures to take care of the needs of the veterans. In August 1921, President Harding appointed Forbes the first director of the Veterans Bureau. Forbes controlled $500,000,000 (5.99 billion 2009) a year in government expenditures for the World War I veterans. Forbes wife Katherine had direct access to the White House, having been given special privileges under Mrs. Harding's authority.

Veterans' Bureau tenure
With millions of dollars at his disposal, Forbes hired 30,000 new workers to the Veterans Bureau, many who were personal friends to Forbes. The Veterans Bureau under Forbes was overstaffed and many appointed agents looked for means to justify their paid positions. During his tenure as director, Forbes ignored the needs of the wounded veterans. During the less than two years Forbes held this position, he embezzled approximately $225 million, mainly in connection with the building of veterans' hospitals, from selling hospital supplies intended for the bureau, and from kickbacks from contractors. The budget for the Veteran's Bureau during his tenure was $1.3 billion in total. Forbes had rejected thousands of legitimate claims by veterans.

Although 300,000 soldiers had been wounded in combat, Forbes had only allowed 47,000 claims for disability insurance, while many were denied compensation for reasons that Congress called "split hairs". Even fewer veterans received any vocational training under Forbes' direction of the bureau. According to the Charleston Gazette, Forbes toured with his contractor friends to the Pacific Coast, known as "Joy-Rides", inspecting veteran hospital construction sites. Forbes and his contractor associates allegedly indulged in parties and drinking. Forbes and corrupt contractors developed a secret code in order to communicate insider information and ensure government contracts. According to congressional testimony, in Chicago, on one of his many inspection trips, Forbes gambled and took a $5,000 bribe from contractor J. W. Thompson and E. H. Mortimer at the Drake Hotel to secure $17,000,000 veteran hospital construction contracts. Mortimer was the middleman man who had handed Forbes the bribe in one of the rooms at the Drake. Forbes said the $5,000 payment was a loan. Mortimer stated that Forbes had an affair with Mortimer's wife while on the inspection tours. After Forbes returned from his inspection tours he began to sell hospital supplies at severely discounted prices. According to a Highbeam Business report, he sold nearly $7,000,000 of much needed hospital supplies for $600,000, a fraction of their worth. Forbes was suspected of receiving kickbacks from contractors. When President Harding ordered Forbes to stop, Forbes insubordinately disobeyed and kept selling supplies.

On January 24, 1923 Forbes awarded the Hurley-Mason Construction company a sizable contract of $1,300,000 to construct a new veteran's hospital by American Lake. Forbes had resigned his Vice-President position at Hurley-Mason Construction upon assuming federal position under the Harding Administration. By January 1923, rumor was spread by Forbe's close friends that Forbes would resign the Veteran's Bureau in on June 1, 1923. During the summer of 1922 on one of Forbe's "joy rides", Forbes came to Spokane and had visited the F. Lewis Clark House while he was looking for a possible site for a Veteran's Hospital by Hayden Lake. Forbes was accompanied by Dr. Stanley Rhinehart. The F. Lewis Clark House was one of the most prestigious summer homes in the Pacific Northwest. F. Lewis Clark House had been offered to Forbes and the Veteran's Bureau at a low cost. Colonel Forbes stayed there for several days. Forbes division office of the Hurley-Mason Construction company had been closed down.

Resignation
Forbes resignation, however, would come earlier than June 1, 1923 as his friends had predicted. When President Harding was informed that Forbes had disobeyed a direct order to stop selling hospital supplies Harding summoned him to the White House in January 1923. Forbes pleaded with Harding to allow him to go to Europe to settle family matters. Harding allowed him to flee to Europe only on the condition he would resign from the Veterans Bureau. While in Europe, he voluntarily resigned from office on February 15, 1923. When Forbes took Elias H. Mortimer's wife to Europe with him, Mortimer decided to testify against him in a Congressional investigation that started on March 2, 1923. Upon his return from Europe, Forbes visited President Harding at the White House. The six foot tall President grabbed Forbes by the throat and began violently shaking him "as a dog would a rat". Forbes was saved from this attack when a guest who had an appointment with the President interrupted the altercation. President Harding was angered over Forbes' duplicity in stopping the Perryville shipments. The Senate investigation revealed Forbes had left 200,000 unopened pieces of mail from veterans at the Bureau. Belligerent before the Senate committee, Forbes renounced involvement in illegal activities. Mortimer provided damaging information that Forbes took a $5,000 payment in Chicago and got kickbacks for land deals and building contracts for Veteran hospitals. Forbes was indicted and tried by jury in 1924.

Family neglect and divorce
On October 4, 1923 Forbes and his wife, Katherine Forbes, were formally divorced at a Seattle court house. Katherine's attorney, Eugene Mecham, stated that Forbes had overly neglected their home life while he was traveling on his Pacific Coast hospital inspection tours. Mrs. Forbes said that her husband's cruel treatment caused her to be in poor health. The judge ordered that Forbes pay alimony; $75 a month to Mrs. Forbes for two years and $75 a month to their 10 year old daughter, Marcia, until she turned 18. Forbes divorce proceedings, that took place during the Congressional investigation into corruption at the Veterans Bureau, were held in secret from the public until the divorce was final.

Trial, conviction, and prison sentence


Forbes was prosecuted and convicted of conspiracy to defraud the U.S. Government, fined $10,000, and sentenced to a prison term of two years. He was put in prison on March 21, 1926. He served one year, eight months and six days at the Leavenworth federal penitentiary. Forbes was prisoner number 25021. On entering prison Forbes said, "I don't suppose any prison is a pleasant place to go, but I shall try to make the best of it." Forbes had appealed his trial, however, the United States Circuit Court of Appeals in Chicago upheld his conviction.

Prison release
On November 26, 1927 Forbes was released from Leavenworth Penitentiary. He stated after his release that he would make sure that Harding's legacy would be exonerated. He said he would prove that Dr. Frederick Cook, his cell mate at Leavenworth, discovered the North Pole.

New York World article
After being released from prison, in an effort to exonerate President Harding, Forbes wrote an article for the New York World, published December 4, 1927 that alleged Harding was "duped" by his appointees and cabinet known as the Ohio Gang. He said to have found Jess Smith picking up $70,000 in $1,000 bills scattered on a Justice Department office floor. Smith was an aid to President Harding's U.S. Attorney General Harry Daugherty. While he helped Smith pick up the money from the floor, Smith told him the money was Daugherty's. Forbes said that the ability to buy narcotics was rampant at Atlanta and Leavenworth federal prisons while Daugherty was attorney general. Forbes stated that Harding's personal physician, Charles E. Sawyer, was a "pernicious meddler". Forbes made a blanket statement that President Harding had not profited in anyway from the scandals during the Harding Administration. Forbes claimed that President Harding was "excessively loyal" with his friends, to a fault. At a poker game in the White House, Forbes said that Harding would remove a $1,000 fine imposed on prize fighter Jack Johnson who had been released from Leavenworth Penitentiary in 1921.

On December 16, 1927, after the publication of his New York World article, Forbes testified before a grand jury in Kansas City that concerned his statement in the article that alleged narcotics was easily obtained at USP Leavenworth. Forbes had also stated in the article that Leavenworth warden, E.B. White, was understaffed and that in turn allowed the purchase of narcotics to be readily available in the prison. After Forbes' lengthy several hour testimony before the grand jury, he said he was sworn to secrecy and would not make a statement to the press.

Illness and Death
In October 1949, Forbes had undergone a major operation. He died at the Walter Reed Hospital in Washington D.C. at the age of 74 on April 10, 1952 after a long illness and was interred at Arlington National Cemetery. He was survived by his wife, Katherine T. Forbes, and one daughter, Marcia Forbes, who had married Fred Barry of Hatboro, Pennsylvania. The Forbes corruption at the Veterans Bureau was one of the many scandals involving the Harding administration and the Ohio Gang.