MID creates MI-13 to investigate graft and fraud

Courtesy Photo | Brig. Gen. Marlborough Churchill, the chief of MID, established MI-13 to investigate graft and fraud.  

FORT HUACHUCA, ARIZONA, UNITED STATES

09.19.2022

Courtesy Story

U.S. Army Intelligence Center of Excellence

by Fiona G. Holter, USAICoE Staff Historian

On September 23, 1918, the Military Intelligence Division (MID, known as the Military Intelligence Branch until 26 August 1918) created a separate Graft and Fraud section (MI-13) after forming the investigative unit a few months prior. Within the first year of operations, the Graft and Fraud section handled 1,128 cases and recovered more than $495,000 in government property and/or restitution.

In early 1918, Maj. Gen. John L. Chamberlain, the Army’s inspector general, requested a team of intelligence personnel to develop within the Quartermaster Corps a unit to investigate graft and fraud in the purchase and handling of quartermaster stores. By July 1918, the unit had exceeded expectations and was transferred to MID’s Counterespionage in the Military Service (MI-3) branch. On September 23, Brig. Gen. Marlborough Churchill, chief of the MID, made the Graft and Fraud department a separate section of the MID, with the designation of MI-13.

Under the MID, the scope of MI-13’s duties expanded to include any case of graft or fraud within or connected to the Army, not only the Quartermaster Corps. In one case, James E. Henry, Sr., a Corps of Intelligence Police (CIP) agent assigned to MI-13, investigated a German salesman employed by a large steel company who began to live extravagantly. After surveilling the suspect, Henry and his team discovered the man had “two Mercer sport cars, a chauffeur, and an attractive girl with whom he spent considerable time.” They noted he rented two apartments in Washington D.C., one of which housed forty-six cases of liquor, ladies’ silk stockings, white kid gloves, and many other items that were either illegal under prohibition or were rationed because of the war. Believing the man was bribing ordnance officials, the CIP planted microphones to confirm their suspicions. Just as the case was unfurling, however, Henry was transferred to another case and never learned the outcome.

Aside from investigative cases, the MI-13 also performed non-traditional work, such as observing the disposal of salvage in Europe, estimated to be worth between $1-1.5 billion, following the end of World War I and guarding truckloads of documents during transfer from Washington D.C. to France. Such tasks often drew criticism as they were not technically related to intelligence work, as was the case with much of the work of the MI-13. However, since the Army had not established a criminal investigation division or military police organization during the First World War, the investigative skills of personnel under the MID proved to be valuable.

When Brig. Gen. Dennis E. Nolan became director of the MID in 1920, he reorganized his division. He closed the Graft and Fraud section along with other sections the MID had acquired for wartime operation. Despite only being in operation for two years, the Graft and Fraud section continued to exceed expectations. Within its first year, MI-13 investigated 1,128 cases, made 517 arrests, attained 206 convictions, and recovered $495,582.82 worth of government property or restitution.

• Date Taken: 09.19.2022
• Date Posted: 09.19.2022 17:55
• Story ID: 429658
• Location: FORT HUACHUCA, ARIZONA, US