The Credit Mobilier Scandal

The Credit Mobilier Scandal – a construction company formed in 1864 by owners of the Union Pacific Railroad, who used it to fraudulently skim off railroad profits for themselves. This scandal was the first scandal faced by President Grant, during his administration. The Union Pacific Railroad, along with the Credit Mobilier Construction Company built a railroad. The companies hired themselves to build the railroad, at low prices, giving them profits at 348 percent. To keep the Scandal a secret, the company gave shares of stock at large discounts to two congressmen, including Oakes Ames. Vice President Schuyler Colfax also accepted payments from the company to keep it under cover. In return, the congressmen voted for the government funds to cover the low charge of Credit Mobilier.  The scandal was uncovered by the New York Sun newspaper, who was against President Grant. 72 million dollars had been given to Credit Mobilier, for a railroad that cost 53 million. After the stories were released, the company was left bankrupt. Reputations were ruined, and politicians resigned, but convictions were never made.

http://en.wikipedia.org/wiki/Cr%C3%A9dit_Mobilier_of_America_scandal
http://cprr.org/Museum/Credit_Mobilier_1873.html