The Bulldog Detective by Jeffrey D. Simon

William J. Flynn deserved a biography and author Jeffrey Simon has delivered on that need. A New Yorker, who worked his way up from detective to police commissioner to Chief of the US Secret Service and Chief of the Bureau of Investigation, Flynn arguably was one of the most influential investigators and intelligence operators in modern US history.

The Bulldog Detective also craved public attention, upset his superiors with public grandstanding and taking credit for others' successes. He wrote self-aggrandizing articles and semi-autobiographical, embellished accounts of his exploits, some of which turned into movies. The asserted interagency competition between the USSS and the Bureau of Investigation between 1914 and 1917 likely stemmed from Flynn's behavior alone. He was a complicated man, overly ambitious, and irreverent of established rules. His insubordination and overstepping of the legal bounds of the Secret Service’s mission caused damage to Justice Department investigations during the years leading up to the US entry into the First World War, and eventually got him fired in 1917. His subsequent stint as Chief of the Bureau of Investigation 1919 to 1921 ended in disgrace. Flynn's career never recovered after that.

Simon does a great job synthesizing Flynn’s career using a wide variety of mostly secondary sources, as well as Flynn's writings. He also worked with Flynn’s grandson, who related anecdotes, supplied letters, as well as photographs.

This is a worthy read, spellbindingly written, and an important biography that adds to our understanding of intelligence history in the 20th century. Five Stars!

A Most Unsavory Character

The most intriguing, and ultimately significant, munitions shipment from New York City was made by Leon Rasst, a notorious Russian émigré of most dubious character. Historian Michael C. Meyer identified Leon Rasst (often misspelled as Raast), as one of the financiers behind the arms of the German freighter Ypiranga, which triggered a US military intervention in Veracruz in 1914.

Rasst exemplifies the exotic characters that people our story, and thus merits discussion in some detail. Leon Moses Reichin (or Reichen, or Rychen) aka Leon Rasst, was born on July 17, 1866, in Homyel, Russia (today in Belarus). The Jewish family moved to St. Petersburg, Russia, around 1870, where his brother Josef (later José) was born in 1873. Leon would later use the more fashionable birthplace of St. Petersburg on various immigration forms. He left Russia sometime in the 1880s and appears on immigration records in Antwerp, Belgium, then Zurich, Switzerland. There he met and married his wife, Eliza (or Luise, Luisa, Elise). The couple had a daughter, Helen, in January 1896. In an apparently rushed departure, the Reichins shipped out to New York in February of that year. Upon arrival in Hoboken, customs inspectors could not help but notice the father’s “bulging pockets,” and searched him, while his wife and infant daughter went to a hotel. “Eighteen valuable gold watches were found in different parts of his clothing.” With Leon Reichin arrested, customs inspectors went to the hotel and searched Mrs. Reichin and her luggage but found nothing. On a hunch, or maybe hearing a strange rattle in the crib, the inspectors searched the baby. “Lifting up the long white dress of the wee maiden [they] found concealed in a necessary part of [the] baby’s clothing eighteen gold watches of great value.” The Reichin family thus entered the United States for the first time, making their mark with ample publicity, as newspapers excitedly covered the gold timepieces concealed in their baby’s diaper. Customs determined the value of the watches to be somewhere between $10,000 and $12,000 (around $250,000 to $300,000 in today’s value) and fined Reichin $100 for the attempted smuggling, while also confiscating the watches. The episode would foreshadow Reichin’s lifelong pursuit of petty crime, fraud, and miscellaneous crookedness.

The family moved to Puebla, Mexico, in short order. Reichin now changed his last name to Rasst, hoping to conceal his previous existence. The Swiss embassy in Mexico was not fooled. Apparently, the smuggled gold watches had not been Reichin’s. The family had barely settled in their new community of Puebla under the alias, when the Swiss government in September 1898 applied to the Díaz administration for “Leon Rasst, ó [aka] Leon Moses Reichin” to be extradited on a charge of fraud committed in Zurich, Switzerland. The crime amounted to 20,000 Swiss francs, matching the customs agents’ estimate of the value of the watches. The Mexican government refused to extradite the Russian immigrant on the ground that fraud was not covered as a cause for extradition, although the offense was punishable by penal servitude in Mexico.

That did not mean that Reichin aka Rasst would stay out of trouble in his newfound home. Far from it. In 1897 he was accused of robbery but beat the charges in court. In 1898, two trading companies Rasst had founded, Rasst, Headen y Compañía in Puebla and A.M. Davis and Company in New York, sold anything from semi-precious stones to coffee and liquor through German merchants and New York middlemen. The first documented victims were clients who paid down money for “six [railroad] cars” of onyx, which were supposedly stored in Veracruz. According to court documents, the onyx was already sold to someone else. Rasst used the value of the onyx orders to borrow money from a Mexican bank and private investors. He used those funds to buy a liquor factory.

These wild international trading schemes quickly turned into several court cases involving Mexican, German, and American plaintiffs. The fraud not only revolved around onyx, but also 50,000 German Marks worth of coffee, for which Rasst received down payments from a company in Hamburg but never delivered, and at least five loans he did not repay worth 60,000 German Marks. Through a fraudulent bond scheme, Rasst had signed most of the loaned money over to his wife, then declared bankruptcy for his two front companies. Judge Francisco Perez in Mexico City decided on July 9, 1898, that Rasst through his now defunct companies had cheated customers in Mexico, New York, and Hamburg, falsified documents, and “abused customers’ trust.” He was ordered to pay 10,000 pesos in gold and was sentenced to prison.

Rasst seemed to have only spent a few months in Belén, the notorious federal prison in Mexico City. The El Paso Daily Herald reported on January 6, 1899, that all but one charge against Rasst were dropped. “It is very likely,” mused the paper, “that Rasst is a free man by this time.” One would imagine that the Mexican government insisted on the 10,000-peso fine in gold. The paper claimed that Rasst was “the former Puebla banker.” Of course, the international fraudster was not a respectable “former banker” or anything of the sort. At that point he was a convicted felon who had done time. And this was not the only brush with the law for Rasst. Fresh out of prison, in 1900, he was sued for fraud once more. This case was dismissed.

By the turn of the century, Rasst was involved in various businesses: textiles, liquor, money lending, international trade, and real estate. While in prison, another child was born, albeit not by his wife. The baby died only one year later. After returning to Puebla from his stint in Belén, the convicted felon recovered some of his reputation. In a history of the city of Puebla, Rasst appears in the first decade of the twentieth century as a respectable Jewish businessman who owned a textile mill with the Teutonic name, “La Prusia.” The businessman also had another child in 1907, son Benjamin “Benno” Reichin Rasst Moses, this time with his wife. Rasst also acted as a broker for an investor in the Ferrocarríl de Capulac a Chachapa in 1909.

Without fail, fraud, illegal business schemes, and theft follow Rasst’s ventures like a putrid smell. In a pattern that stretched through twenty-six lawsuits against career criminal activity between 1901 and 1913, Rasst would be a defendant eighteen times; business partners had been cheated, loans not repaid, and investors had lost property and shares. And, a second pattern seems to be that he now hired good legal representation, such as the elite member of the Spanish community of Puebla, Manuel Sanchez Gavito. Instead of serving more hard time, he beat most of his accusers. According to historian Andrew Paxman, the crooked dealings and high-powered legal representation paid off. In the first decade of the twentieth century Rasst owned “at least four rural estates, various Puebla City houses, and a hotel.”

The illegal schemes Rasst devised in his criminal career also involved artificially, and, as it turned out, fraudulently, inflating his social stature. To that effect, he used the Russian government. By 1910, Rasst’s letterhead represented him a “consular agent” for the Russian Empire in the city of Puebla. Of course, once more, he was nothing of the sort. Puebla’s governor, Mucio Martinez, finally objected to Rasst’s misrepresentations that went so far that he even affixed the “Imperial Russian coat of arms … above his front door.” The governor threw him in jail in October 1910, and apparently had the fraudster roughed up a bit. But here shines Rasst’s brilliant career criminal mind: While in prison for impersonating a Russian diplomat, he convinced the Russian ambassador to Mexico, Alexandre Stalewsky, to come to his aid. The Russian government interceded and had Rasst released from prison.

Not content with just regaining his liberty, Rasst also wanted to continue the use of his fake diplomatic title. He apparently convinced the ambassador of his importance to Russian-Mexican commerce. Initially, the Russian government officially and categorically denied that the businessman ever received a diplomatic commission, but the Russian ambassador finally acquiesced to letting Rasst use the meaningless term “consular agent,” since “a predecessor might have promised it and failed to complete the paperwork.” Relentless in the pursuit of his accusers, Rasst even succeeded in having Governor Martinez publicly reprimanded, which reverberated all the way from Mexico to American newspapers. “In a message from Minister of Foreign Relations [Enrique] Creel, in which the minister says to the governor of the state that Rasst did not take the title of consul in bad faith, but that the accused man believed his appointment was legal. On this account, the minister urges that no steps be taken against Mr. Rasst.”

Rasst would use his fake title for the rest of his career. He even added to the title as needed. MID agent William Doyas reported in 1918 that Rasst “stated that he is a former Russian Consular Agent of Mexico” [not just Puebla]. Bureau operative Harry Berliner, always perceptive when it came to judging people, wrote in 1918: “Rasst is a Russian Jew of the lowest type and is a very slippery customer. Agent is personally acquainted with him.” It should be noted that Berliner, himself Jewish, did not likely cast Rasst in a negative light based on antisemitism.

A Priest for San Antonio

Magonistas under the command of Encarnación Diaz Guerra crossed the Rio Grande from Del Rio, Texas, and, on June 26, 1908, attacked the town of Las Vacas (today Ciudad Acuna), Coahuila. Eleven attackers, ten soldiers, and two customs inspectors were killed, and the surviving raiders soon retreated into Texas. Far from touching off popular uprisings, such a raid served to illustrate the PLM’s military impotence.

The raid, however, had important consequences. First, at the October 1908 term of the federal district court in El Paso, indictments for violation of the neutrality laws were handed down against leading PLM figures: Ricardo and Enrique Flores Magón, Antonio I. Villarreal, Antonio de Pio Araujo, Encarnacion Diaz Guerra, and Praxedis G. Guerrero. In addition, several magonistas who had allegedly participated in the raid at Las Vacas were indicted.[i]

Second, American authorities launched an investigation of the raid. The investigators were: Luther Ellsworth, the American Consul at Ciudad Porfirio Diaz (today Piedras Negras), across the Rio Grande from Eagle Pass, Texas; Collector of Customs Robert W. Dowe; US Attorney Charles A. Boynton; US Marshal for the Western District of Texas Eugene Nolte; and Captain C. H. Conrad, commanding the troops at Del Rio. This interagency group conferred in Del Rio on July 1 and the next day went to Las Vacas to meet with Mexican officials. Their conclusion was that between forty and seventy-five men from Del Rio had attacked Las Vacas using firearms concealed on the American bank of the Rio Grande. The neutrality laws had indeed been violated. The investigators recommended the establishment of a special “secret service” to monitor Mexican revolutionary movements and border conditions.[ii]

Their recommendation posed a problem for Attorney General Bonaparte. Since he did not yet have agents of his own, Bonaparte had hoped to borrow a Secret Service agent from the Treasury Department to surveille the border, but Congress had prohibited such an arrangement. The person Bonaparte had in mind was veteran Secret Service operative Joe Priest. He not only spoke fluent Spanish, but had experience in the Canal Zone in Panama, in Puerto Rico, and in Cuba, but he was also well acquainted with the Mexican border. Bonaparte came up with a clever solution: Congress’s prohibition did not apply to the State Department, and Bonaparte persuaded the Secretary of State to pay Priest’s salary and expenses from State’s neutrality fund and place him under Department of Justice (DOJ) supervision. Congress was thus neatly circumvented, and Joe Priest became a DOJ agent. So did Dan Riley, a Furlong Detective Agency operative employed by the Mexican government for three years. Like Priest, Riley was paid by the State Department but worked for the DOJ. Unlike Priest, Riley may also have remained in Mexican employ as an informer.[iii]

Several federal agencies participated in the neutrality enforcement effort. The State Department played the leading role because of the desire to maintain good relations with Mexico, but Justice, War, Treasury (Customs Service), and Commerce and Labor (Immigration Service) were also actively involved. “Since Ellsworth had taken the initiative to investigate the Las Vacas affair, the [State] Department encouraged him to continue his efforts by making him its special representative in matters of neutrality. He conscientiously and enthusiastically pursued his new duties.”[iv] Ellsworth worked in close cooperation with Joe Priest, whom he considered remarkably well-qualified for the task.

Priest came on board in July 1908, reporting to the US attorney for the Western District of Texas, John A. Boynton. Priest’s headquarters were in San Antonio, where on the night of September 27, 1908, he arrested magonista Calixto Guerra. But Priest ranged widely. On November 25, 1908, at Wilburton, Oklahoma, he and a deputy US marshal arrested Encarnación Diaz Guerra, the magonista colonel who had led the Las Vacas raid. Priest worked well with Ellsworth and Boynton, but he had difficulties involving jurisdictions with the chief deputy US marshal with whom he had to deal. Priest’s activities were severely curtailed on July 31, 1909, when he was struck down by a serious abdominal hemorrhage. Even though confined to bed for months, he translated many of the magonista documents the authorities had seized. These included correspondence between the PLM and American socialist sympathizers such as John Murray.

The Treasury Department balked at releasing Priest permanently to direct border security. This, combined with Priest’s worsening medical condition, ultimately fatal, prevented him from accepting Attorney General Bonaparte’s offer in June 1909, to become “Chief Special Agent of the Department of Justice, Bureau of Investigation, with headquarters in San Antonio, Texas.” Leading the San Antonio field office, he was to be devoted entirely to the investigation of neutrality matters on the Mexican border.[v]

[i] U. S. Commissioner, El Paso, nos. 88, 100, 101, 117, 156, and U. S. District Court, El Paso, nos. 1359, 1362-69, 1371-74, 1376, and San Antonio 2006, 2007, FRC-FW.

[ii] US Attorney to Attorney General, July 20, 1908, CE; Kerig, Luther Ellsworth, 15-16.

[iii] Kerig, Luther Ellsworth, 16-17.

[iv] Kerig, Luther Ellsworth, 18.

[v] Priest to Secretary of State, September 20, 1909; Ellsworth to Assistant Secretary of State, September 30, 1909, 90755-158, Department of Justice, RG 60, NARA.

The “Morse” Code of Behavior

The first year of the bureau’s existence produced a massive scandal that threatened to confirm the worst fears Congress had expressed over establishing the agency: overreach of the Executive, in this case involving stacking and tampering with a jury to achieve conviction at all costs. In the history of federal agencies, key events sometimes change the organizational culture forever. The US Navy and Marine Corps will never be the same after the Tailhook scandal that came to light in 1991. The Cartagena scandal of 2012 changed the culture of the US Secret Service forever. The Bureau of Investigation went through a scandal as profound in 1909, and it involved the trial of Charles W. Morse. One could argue that the fallout from this scandal precipitated a cultural change within the bureau that is still palpable even today.

The story of Charles W. Morse’s downfall begins when on October 18, 1907, panicking depositors initiated a run on the Knickerbocker Trust Company in New York as a result of careless speculation and brinkmanship by one F. Augustus Heinze. He had tried to demolish John D. Rockefeller’s virtual monopoly of the copper market. The effort not only failed, but brought the US banking system, indeed the financial health of the United States, crashing down. John Pierpont Morgan, wealthier than the US government itself, came to the rescue with unprecedented loans. The situation became so tense that Morgan asked New York’s clergy to pray for “calm and forbearance.” Whether with God or J. P. Morgan’s help—or as a combination of both—the great bank panic of 1907 ended as quickly as it had come about. Investor confidence recovered within a month and the recession ended in June 1908, almost exactly a year after it had started.

However, among the many Wall Street schemes that came crashing down were the fortunes of the “King of Ice,” Charles W. Morse. The owner of virtually the entire US merchant marine had successfully cornered the ice market a few years earlier, a critical component for shipping perishable goods. He created a monopolistic trust, the American Ice Company. “The price of ice doubled in a week,” a newspaper reported in admiration.[i] Badly over-leveraged, Morse’s empire of steamship lines and warehouses succumbed to bankruptcy in the panic of 1907. A year later, Morse, who had fled to England but eventually decided to stand trial in the US, came under indictment for creating a monopoly. The disgraced tycoon fought tooth and nail to stay out of prison. Morse lost in the first round. He was sentenced to fifteen years hard time and $5,000 for violating the Donnelly Anti-Monopoly Act.[ii] However, that did not end his struggle. Morse demanded a retrial and alleged that agents of the Justice Department had engaged in jury-tampering. The charge seemed far-fetched.

The problem for the BI was the coverage of its role in this case. In an affidavit reported in the New York Sun in November 1909, revealed the extent to which agents went to achieve a conviction, leaving everyone in the new Taft administration, from the president-elect on down, aghast. BI agents detailed to guard the jury during trial allegedly provided the jurors with “unlimited quantities of liquor,” to the point that outgoing President Roosevelt’s personal physician had to attend to a juror who ended up at the “Bellevue alcoholic ward” with the “jumps” as a result of the BI agents’ liberal distribution of spirits.[iii] The affidavit further alleged that one of the jurors had a history of mental illness. One of his agents reported this kernel of interest to Chief Finch who allegedly never informed the court. Morse’s attorneys further alleged that agents of the BI influenced individual jurors. One of the special agents took a juror “across the street [from the courthouse] to a saloon and both took a drink of brandy.”[iv] Topping these allegations, the BI agents also provided the jurors with “all the newspapers every day, some of which contained hostile, incomplete, biased, partial and damaging reports…”[v]

The Circuit Court of Appeals rejected Morse’s allegations, as did the Supreme Court. However, the report of the BI’s alleged jury tampering was disastrous. Not only did the Sun print the charges in Morse’s affidavit, but it also outed fourteen of the bureau’s first thirty-four agents by listing their names. Attorney General George W. Wickersham, who just had taken over from Bonaparte, did not waver in fighting Morse’s appeal. Interestingly, just a year into serving his sentence, President Taft pardoned Morse who lay on his deathbed, according to his wife. Only days after regaining his liberty, Morse miraculously cheated death, recovered his health, and resumed his Wall Street career. He lived until 1933.

The scandal had a profound impact on the bureau. The first wave of hires, with a strong Secret Service component, had created a “can-do,” sort of “Rough Rider” atmosphere in the new department. This may have been the attitude President Roosevelt and Attorney General Bonaparte instilled in their pioneer investigative force. The new Taft administration did not share this view. Wickersham desperately needed Congressional approval and funding for the bureau. The special agents already had their hands full establishing their credibility with the courts, law enforcement, and citizens in the many localities where investigations took place. We will see the extent to which local resistance to federal influence ranked supreme in the many prosecutions the bureau brought. Without holding a moral and legal high ground, the bureau would not survive Congressional scrutiny for long.

Chief Finch insisted on documenting every move meticulously from 1909 on, accounting for every penny of expenditures. He standardized reporting and accounting, so that it became difficult for agents to engage in extra-legal adventures without the knowledge of bureau leadership. Although not a perfect system, the BI from 1909 on would not be an agency ostensibly engaged in political hack jobs. While politics surely steered their mission, Finch and Bielaski, as well as their successors, tried to investigate and prosecute by the book, even if, as we will see on many occasions, it meant that convictions could not be secured. Despite hostile judges, blatant jury tampering by locals, and seemingly ironclad cases falling apart, by and large the agents of the BI remained within the bounds of the law.

[i] Waterbury Evening Democrat, February 28, 1908.

[ii] Tacoma Times, December 11, 1909.

[iii] New York Sun, November 11, 1909.

[iv] New York Sun, November 11, 1909.

[v] New York Sun, November 11, 1909.