6. Among the most fraudulent abuse of government contracts in American history, the Oregon Land Fraud Scandal saw the first U.S. Senator convicted at trial and more than one thousand individuals indicted
To facilitate the development of the Oregon and California Railroad, in 1870 the United States government granted the construction company three million acres of land on which to build. Parceling up adjacent plots of land along the proposed line, the railway company sold off this land in packages of 160 acres at extremely low prices, just $2.50 per acre, to incentivize local people to settle and develop the area. Unfit for development, the land initially garnered limited interest. However, rich in timber, the land did attract the attention of Edward Harriman, President of the Southern Pacific Railroad, who arranged for locals to purchase the land and fraudulently transfer the rights into an associate’s name.
Selling off these accumulated parcels in huge blocks to the highest bidder for the lucrative timber rights, the scheme was exposed in 1903 when his associate, Stephen Puter, was fired by Harriman after a dispute. Issuing more than 1,000 indictments, District Attorney Francis Heney narrowed down the charges to thirty-five individuals he considered the most egregious offenders. Including Senator John Mitchell, who became the first sitting Senator to be convicted of a crime, and Representatives John Williamson and Binger Hermann, who both successfully evaded the charges in court, few involved saw the inside of a prison cell or paid restitution for their crimes.