McGrain v. Daugherty 1927

Appellant: John J. McGrain

Appellee: Mally S. Daugherty

Appellant's Claim: That the U.S. Senate had not exceeded its authority in requiring a private citizen to testify before its investigation committee concerning the Teapot Dome scandal.

Chief Lawyer for Appellant: George W. Wickersham

Chief Lawyer for Appellee: Arthur I. Vorys, John P. Phillips

Justices for the Court: Louis D. Brandeis, Pierce Butler, Oliver Wendell Holmes, James C. McReynolds, Edward T. Sanford, George Sutherland, Chief Justice William H. Taft, Willis Van Devanter

Justices Dissenting: None (Harlan Fiske Stone did not participate)

Date of Decision: January 17, 1927

Decision: Ruled in favor of McGrain by finding the Senate had an implied constitutional authority to carry out a congressional investigation of Daugherty.

Significance: The ruling clearly established Congress' power to conduct investigations even without stating a specific legislative purpose. The decision dramatically expanded Congress' ability to investigate the lives and activities of citizens. This power has been regularly exercised by Congress ever since. The decision was also considered the first to uphold the power of Congress or the courts to override on certain occasions claims of executive privilege if a president, his cabinet members, or presidential aides were called to testify.

In 1927 the U.S. Supreme Court issued a landmark ruling, McGrain v. Daugherty. The ruling firmly established Congress' power to conduct investigations, even without any specifically stated legislative (law making) purpose and to gather information by requiring private citizens to give testimony. The ruling arose out of a situation referred to as Teapot Dome. Teapot Dome was one of the most infamous (bad reputation) government scandals in U.S. history and became a symbol of corruption in the U.S. government.

The Teapot Dome Scandal

In 1909, President William Howard Taft (1909–1913) set aside three tracts of oil-bearing land, Elk Hills and Buena Vista in California and Teapot Dome in Wyoming, for use by the U.S. Navy in case of an emergency oil shortage. In 1921, President Warren G. Harding (1921–1923) took office and within a year transferred control of the three naval oil reserves to his good friend and newly-appointed Secretary of the Interior, Albert B. Fall. With neither congressional approval nor competitive bidding, in 1922 Fall leased the reserves at Elk Hills and Teapot Dome to private oil companies of Edward L. Doheny and Harry F. Sinclair. Fall received $100,000 from Doheny for helping to organize the Elk Hills transfer. For the Teapot Dome transfer Fall had received more than $300,000 in cash, bonds, and valuable livestock from Sinclair.

Fall resigned his post at the Interior Department in 1923 when an investigation uncovered his dealings and joined Sinclair's company. Not until 1929 was Fall convicted of bribery, fined $100,000 and sentenced to a one-year prison term. For the first time in U.S. history an officer in a president's cabinet had been convicted of a felony and served a prison sentence.

A Senate Investigation

For some time after his 1922 dealings with Doheny and Sinclair, Fall had enjoyed protection provided by other government officials including U.S. Attorney General Harry M. Daugherty. Press coverage of the scandal flamed public distrust of the Department of Justice and Daugherty. Many questioned Daugherty's failure to prosecute those involved in the scandal. Daugherty resigned his attorney general post in 1923.

In response to widespread charges that Daugherty had mismanaged the Department of Justice the Senate passed a resolution enabling a committee to investigate his activities. The Senate twice issued a subpoena (formal order to a person to give testimony) to Mally S. Daugherty, bank president and brother of the former attorney general and, to appear before the committee and bring his bank records. He refused to respond to the subpoenas. Congress declared Daugherty in contempt (deliberate disregard of public authority) and John M. McGrain, Sergeant-at-Arms of the Senate, placed him under arrest. Daugherty gained his release when a lower court declared that the Senate had exceeded its powers under the Constitution by requiring him to testify on a non-legislative issue. The court said the Senate was acting as if it was a court but it had no power to do that.

McGrain appealed directly to the U.S. Supreme Court which accepted the case. The Court addressed the issue of whether Congress had the power to make these demands on citizens when no specific provision existed in the Constitution for congressional investigations.

Essential to the Legislative Function

Upholding the Senate investigation and contempt conviction against Daugherty, the Court issued a unanimous 8-0 decision. Justice Willis Van Devanter, writing for the Court, broadly interpreted the implied power (not actually written in the Constitution but suggested) of Congress to conduct investigations and issue subpoenas even without stating a specific legislative law making purpose. The ruling extended, as never before, Congress' power to investigate the lives and actions of private citizens by requiring them to appear before investigating committees to answer questions involving the matters at hand.

The Court addressed two key questions in coming to this decision. First, could Congress demand a private person to appear before it to give testimony even though this power is not specifically written in the U.S. Constitution? Justice Van Devanter wrote that "the power of inquiry — with process to enforce it — is . . . essential and appropriate . . . to the legislative function." Van Devanter continued that a legislative body can not wisely legislate (make laws) without being informed about conditions which it seeks to change. Frequently, it must turn to others for this information and "some means of compulsion (demand) are essential to obtain what is needed." Yes, Congress could require a private person to testify.

Second, was the testimony requested for aid in a legislative function? Rejecting the lower court's ruling that the Senate had attempted to

CONTEMPT OF CONGRESS

I n 1857 Congress passed a law making it a criminal offense to refuse to give information requested by either the U.S. House of Representatives or Senate. The law is still in effect in an amended form at the end of the twentieth century. The offending person is considered "in contempt" of Congress. The first Supreme Court case asserting the Court's right to review contempt cases and set standards for congressional investigations was Kilbourn v. Thompson (1881). The Court ruled that investigations had to be in subject areas over which Congress had authority, their purpose had to be related to the passage of legislation, and they could not simply probe into the private affairs of citizens. Sixteen years later in In re Chapman (1897) the Court eased the standard. The Court ruled that Congress did not have to specifically state the legislative purposes of its investigations and that witnesses could be questioned in more areas of their lives than allowed in Kilbourn. In McGrain v. Daugherty (1927) the Court firmly established Congress' power to obtain information by conducting legislative investigations and forcing private citizens to testify, even without a legislative purpose being stated.

The modern-day language of the law, known as Section 192, states that a person may be "summoned [called forth] as a witness by the authority of either House of Congress to give testimony or to produce papers upon any matter under inquiry before either House, or any joint committee established by . . . the two Houses of Congress, or any committee of either House of Congress . . . " If the summoned person fails to appear or refuses to answer any question relating to the inquiry subject, that individual will be guilty of a misdemeanor and punished "by a fine of not more than $1,000 nor less than $100 and imprisonment in a common jail for not less than one month or more than twelve months."

carry out a court function, Van Devanter concluded that the information gained from Daugherty's testimony could be used in creating future laws. "The only legitimate object the Senate could have in ordering the investigation was to aid it in legislating," he wrote. Van Devanter added that while it would have been desirable to state beforehand what the legislative purpose was, it was not absolutely necessary. So, a legislative goal did not have to be stated before an investigation is conducted.

However, while the Court gave Congress broad investigative power, it did establish limits. Van Devanter wrote, "A witness may rightfully refuse to answer where the bounds of the power are exceeded or the questions are not pertinent [do not apply] to the matter under inquiry."

An Often-Used Power

Although the phrase executive privilege had not yet come into use, McGrain is considered the first Supreme Court ruling to uphold the power of Congress to override this privilege on certain occasions when the president, his cabinet members, or his aides are requested to testify. The phrase, first used by Justice Stanley F. Reed in 1958, refers to the doctrine that a president may withhold certain information, documents, or testimony of aides from congressional investigation.

The investigative powers of Congress set out in McGrain were repeatedly put into action throughout the rest of the twentieth century. In the 1950s those suspected of being communists were called to testify before House and Senate committees during the McCarthy hearings. The next decades saw investigations of the Watergate break-in scandal, Iran-Contra arms deals, and finally the impeachment hearings of President Bill Clinton (1993–). Countless numbers of less publicized investigations took place as new laws were crafted by Congress.

Suggestions for further reading

Davis, Margaret L. Dark Side of Fortune: Triumph and Scandal in the Life of Oil Tycoon Edward L. Doheny. Berkeley: University of California Press, 1998.

Owen, Gordon R. The Two Alberts: Fountain and Fall. Las Cruces, NM: Yucca Tree Press, 1996.

Stratton, David H. Tempest Over Teapot Dome: The Story of Albert B. Fall. Norman: University of Oklahoma Press, 1998.