United States Department of Justice

The United States Department of Justice enters the narrative as a federal institution caught up in the effort to investigate tax-related corruption. Its tax division and senior leadership became central to a widening controversy: officials were dismissed, an attempted investigation of federal employees collapsed, and President Harry S. Truman ultimately removed Attorney General Howard McGrath. The episode made the department’s capacity to oversee the cleanup inseparable from questions about whether its own leadership was advancing it.

Tax Division and T. Lamar Caudle

In November, Truman fired T. Lamar Caudle, the Justice Department’s Assistant Attorney General in charge of its tax division. A House investigating committee later judged that Caudle, though an honorable man, had been naive in his dealings with tax fixers. The assessment distinguished personal integrity from sound judgment, while the dismissal showed that the Justice Department’s tax work had become part of the administration’s response to corruption.

The pressure extended beyond Caudle. The Commissioner of Internal Revenue resigned, followed soon afterward by the assistant commissioner and the bureau’s chief counsel. These were Internal Revenue Bureau officials, not Justice Department officers, but their departures formed part of the broader tax scandal to which the department’s investigations and personnel decisions were responding.

McGrath’s Cleanup Assignment

In January 1952, Truman entrusted the cleanup effort to McGrath, who had appeared to be obstructing investigations into corruption in the Internal Revenue Bureau. Because McGrath had formerly chaired the Democratic National Committee, assigning him the task prompted accusations that the administration might be attempting a whitewash. McGrath then appointed Newbold Morris, a respected New York lawyer and Republican, to lead the investigation.

Morris’s approach soon collided with McGrath and Congress. He issued a detailed questionnaire requiring federal employees, including Cabinet members, to list their assets and sources of income. McGrath objected that the questionnaire invaded privacy and violated individual rights, and refused to fill it out. After reviewing it, Truman also concluded that the questionnaire should not be used. The dispute left the investigation’s method—and the authority directing it—under strain.

Dismissal and Institutional Consequences

On April 3, McGrath announced that he had fired Morris, apparently believing this was what Truman wanted. Truman fired McGrath in turn. Though Truman liked McGrath and later said he saw nothing personally wrong with him, he had lost confidence in McGrath’s ability to manage the assignment. The reversal of authority ended the investigation’s leadership in a public and damaging fashion.

The cleanup effort appeared to have fallen apart, reinforcing the impression of disorder in Washington. The episode illustrates the Justice Department’s predicament in this account: it was responsible for pursuing corruption, yet the handling of that work depended on contested judgments about its senior officials, investigative methods, and political independence. Truman’s dismissal of McGrath was an attempt to address a failure of leadership, but it did not erase the damage done by the investigation’s collapse.