Whiskey Ring Scandal: Treasury Officials Steal Millions in Tax Revenue

On May 10, 1875, Treasury Secretary Benjamin H. Bristow conducted coordinated raids across the nation that exposed the Whiskey Ring—a massive conspiracy involving whiskey distillers, Treasury Department officials, and politicians who had been systematically defrauding the federal government of tax revenues. Operating primarily in St. Louis, Milwaukee, and Chicago, the ring bribed Internal Revenue officials to neglect collecting the required 70-cent per gallon excise tax, then split the illegal proceeds. By 1873, what had begun as a political slush fund had evolved into a purely criminal enterprise defrauding the Treasury of an estimated $1.5 million annually—equivalent to tens of millions in today’s dollars.

Bristow’s secret investigation, conducted with President Grant’s initial support, seized control of 32 distilleries and bottling plants across the Midwest. After examining all files, ledgers, receipts, and books, investigators revealed that the Whiskey Ring had evaded over $4 million in taxes over the previous two years alone. The scandal ultimately resulted in 238 indictments and 110 convictions, with more than $3 million in taxes recovered. However, the investigation took a dramatic turn when Orville Babcock, President Grant’s private secretary, was indicted as a member of the ring.

Despite having reportedly written “Let no guilty man escape” when the scandal first broke, Grant performed an unprecedented act: he voluntarily testified as a defense witness in Babcock’s criminal trial—something no sitting president had done before or has done since. Babcock was acquitted through Grant’s personal intervention. The scandal, combined with later revelations about Secretary of War William W. Belknap’s corruption, came to define Grant’s presidency as emblematic of Republican corruption during Reconstruction. The Whiskey Ring revealed how systematically corporate interests could capture federal regulatory agencies, establishing patterns of institutional corruption that would characterize the Gilded Age and create template for corporate tax evasion schemes that persist into the modern era.