The next official removed by Governor Sulzer was C. Gordon Reel, State Superintendent of Highways, following Commissioner Hennessy’s investigation and the disclosures of extensive graft in highway contracts in a large number of counties. The amount of this graft has been variously estimated at from $5,000,000 to $9,000,000. That the system of plundering the State in the building of roads was no fiction was shown later in the large number of indictments (followed by many convictions) handed down against politico-contractors and State employes in New York State.
In the most important of the indictments found by the Suffolk County Grand Jury on January 22, 1914, the Grand Jury charged “grand larceny” and “conspiracy” in the construction of a so-called “cementitious Hudson River gravel road” the specifications of which designated a material absolutely controlled by Henry Steers, of the contracting firm of Bradley, Gaffney & Steers, commonly known as “the Tammany Trust.”
During an investigation conducted by James W. Osborne, in behalf of New York State, the testimony, on February 17, 1914, indicated that State Superintendent of Highways Reel ordered the use of a patented road for roadways and caused the specifications to be changed so as to favor the Gaffney-Bradley-Steers Company which controlled this particular patented pavement. And when Mr. Sulzer testified, on February 29, 1914, before the Assembly “Graft Hunt” Investigating Committee, he said that an average of 30 per cent. of the money paid for those State roads (which had been investigated by Mr. Hennessy) went into the contract, and that 70 per cent. went into the pockets of politicians and contractors. Mr. Sulzer asserted that about $9,000,000 had been stolen in 1912.
According to Mr. Sulzer, Mr. Reel’s appointment as State Commissioner of Highways had been Mr. Murphy’s “personal selection.” When Governor Sulzer’s attitude indicated Reel’s removal, Mr. Murphy (so Sulzer stated) pressed forward the appointment of “Jim” Gaffney to succeed Reel. “Mr. Murphy demanded the appointment of Gaffney, and still later a prominent New Yorker came to me in the Executive Mansion bringing the message from Mr. Murphy that it was ‘Gaffney or war.’ I declined to appoint Gaffney.
“This is the Gaffney who, only a few months afterwards, on September 4, 1913, in undisputed testimony before the Supreme Court of New York, was shown to have demanded and received $30,000 in money (refusing to take a check) from one of the aqueduct contractors, nominally for ‘advice.’ This is the man who Mr. Murphy demanded should be put in a position where he would superintend and control the spending of sixty-five millions of the money of the State in road contracts.”
Mr. Sulzer here referred to the testimony of Harry B. Hanger, aqueduct contractor, who swore that he paid Mr. Gaffney $30,000 for “expert advice on the labor situation” on one contract, and $10,000 for the same services on another contract. Mr. Gaffney later—on March 20, 1914—himself testified before the Special Grand Jury in New York City as to this transaction.
It was the same Mr. Gaffney, too, whose name was involved in the award of Contract No. 22 for the Catskill Aqueduct. This contract was awarded on March 19, 1909, over two lower bidders to Patterson & Company, a firm of no great capital or experience. James W. Patterson, Jr., head of that firm, subsequently testified before the Grand Jury, in 1914, to his making arrangements to pay 5 per cent. of the contract price ($824,942.50) as a “contribution to Tammany Hall.” John M. Murphy, a Bronx contractor, testified that, as agent for James E. Gaffney, he had arranged to sell the contract, and had received from Mr. Gaffney 10 per cent., or $4,125, as his share of a certain $41,250, after threatening “to kick over the whole deal” if Gaffney did not give the proper “honorarium.”
It appeared from the testimony that $41,250 in bills had been deposited in escrow to be handed over by James G. Shaw, the “stakeholder,” to a some one designated as Gaffney, on the day after the award of Aqueduct Contract No. 22. Questioned as to whom this $41,250 was given, Mr. Shaw could not remember, which forgetfulness made the fastening of legal proof impossible. The special Grand Jury investigating this matter reported, however, in a presentment to Justice Vernon M. Davis, in the Supreme Court, New York City, on April 21, 1914, that the Grand Jurors were morally satisfied that a crime had been committed in the sale of Contract No. 22 to Patterson & Company, and that this contract could not have been sold and delivered, as it was, in the name of James E. Gaffney, “without the collusion of a member of the Board (of Water Supply) itself.” Inasmuch as five years had passed since the transaction, the Statute of Limitations intervened to bar criminal prosecution.
In an inquiry later conducted by District Attorney Whitman, James C. Stewart swore that one “Gaffney” asked him for a contribution of five per cent. upon $3,000,000 worth of canal work that he (Stewart) was seeking. Stewart refused to make the arrangement; his bid was much the lowest, but he did not then get the contract. Precisely what “Gaffney” it was who proposed the handing over of this $150,000, Stewart averred that he could not tell; he had never seen him previously. When, on January 30, 1914, District Attorney Whitman brought Stewart and James E. Gaffney face to face, Stewart said that he could not identify Mr. Gaffney as the man who demanded the $150,000.