From the earliest days of the Bureau, it was clear that agents were permanently needed in two cities—New York and Chicago. By July 21, 1908, several days before the FBI’s official birthday, the Department of Justice had assigned four special agents to Chicago. They included Special Agent in Charge M. Eberstein and Special Agents Dolan, Hobbs, and Edward J. Brennan (later the special agent in charge).
The new office faced many difficulties. Special Agent in Charge Eberstein fell seriously ill, as did Agent Dolan. Another agent—hired soon after the original four—had to be dismissed for failing to serve a subpoena and for poor performance in other matters. These setbacks did not last long, and the Chicago Division quickly began to carry out its investigative mission.
The Early Years
The office grew slowly in its early days. In 1911, Charles De Woody was special agent in charge, managing six agents and two stenographers. Several special examiners and two or three accountants also served in the division, pursuing fraud, white-collar crime, and other federal violations. Five antitrust agents also operated out of Chicago, but they answered to Bureau Headquarters for their assignments.
The range of investigations conducted by the new office was wide—from interstate prostitution and the activities of early organized crime groups like the “Black Hand” to the violent crimes of a labor union known as the International Workers of the World.
Issues of food safety and corruption in the large Chicago meat processing industry were of concern, too. Upton Sinclair’s exposé, The Jungle, led to new federal laws and regulations. In U.S. v. Nelson, Morris, and Co., for instance, Chicago agents served subpoenas on witnesses, shadowed packing company employees to gather evidence, and otherwise supported the efforts of a federal grand jury to unearth the illegal rebating schemes of meat packing companies.
As World War I raged in Europe, national security matters became increasingly important to the Chicago Division. In early 1917, a Chicago businessman approached Special Agent in Charge Hinton Clabaugh and proposed the creation of a citizen’s auxiliary to the Bureau to assist with national security-related investigations. The attorney general approved of the idea, and the American Protective League was born. The group expanded quickly to other cities, providing additional manpower for anti-subversion cases, draft dodger raids, and other investigative matters. Too often, though, the group acted as a law enforcement organization, overstepping its bounds and intruding on the rights and liberties of the American people. With the war ended, the Justice Department dissolved the league during the winter of 1918/1919.
1920s and 1930s
In 1920, the Bureau reorganized its field structure, creating eight regional offices to oversee much of the work of agency. The Chicago Division was one of the eight offices, led by James P. Rooney. This reorganization was short lived, and Headquarters soon resumed its oversight role.
Special Agent Edwin C. Shanahan
The division operated continuously during this time, tackling some of the Bureau’s most important cases. It also experienced the first death of a Bureau agent in the line of duty. On October 11, 1925, Chicago Special Agent Edwin C. Shanahan and members of the Chicago Police Department staked out a garage where an automobile thief named Martin James Durkin was expected to steal a car. Durkin had a lengthy record and had previously shot and wounded three policemen in Chicago and one officer in California. Shanahan was unarmed and tried to approach Durkin under a ruse, but the thief fired, fatally wounding the agent. Durkin fled before the Chicago officers could catch him. A nationwide manhunt ensued, with Bureau agents tracking Durkin across the western United States. He was finally captured on January 20, 1926 near St. Louis, Missouri. At that time, killing a federal agent was not a federal crime. Nonetheless, Durkin was tried and convicted on various state and federal charges and sent to jail until 1954.
The Chicago Division pursued other notorious criminals of the day, including legendary gangster Al Capone, but it was the office’s role in hunting down John Dillinger and his band of criminals that helped raise the stature of both the Chicago FBI and the Bureau as a whole.
The Bureau joined the chase in early March 1934, when Dillinger broke out of a jail in Crown Point, Indiana. He committed a federal crime by stealing a sheriff’s car and driving it over the state line between Indiana and Ohio. At the time, Crown Point was part of the jurisdiction of the Chicago Division. Led by Special Agent in Charge Melvin Purvis, Chicago agents became involved in key parts of the case and supplied important manpower to Inspector Samuel Cowley’s flying squad, which was overseeing the national investigation. On July 22, 1934, an informant—the notorious “lady in red” (her dress was actually orange)—tipped off Purvis that Dillinger would be at the movies in downtown Chicago that night. Staking out both possible theaters, agents from Chicago and the flying squad killed Dillinger outside the Biograph when he tried to flee and reached for his weapon.
Following up on this success, Chicago agents also helped track down “Pretty Boy” Floyd, “Baby Face” Nelson, and many other dangerous criminals, effectively ending the gangster era. The costs were high, however. In April 1934, Chicago Special Agent W. Carter Baum was gunned down by Nelson near a Wisconsin resort. Later that year, Baby Face killed two more agents—Sam Cowley and Herman F. Hollis—during a gun battle near Barrington, Illinois. The agents mortally wounded Nelson in the process.
Special Agent W. Carter Baum
Special Agent Sam Cowley
Special Agent Herman F. Hollis
The major cases continued. On September 25, 1937, 72-year-old Chicago businessman Charles S. Ross—president of the Carrington Greeting Card Company—was kidnapped at gunpoint while driving near Franklin Park, Illinois. Despite being paid a ransom of $50,000, the kidnappers murdered Ross. His body was found four months later in a shallow grave near Spooner, Wisconsin, along with the body of one of his abductors. John Henry Seadlund—the mastermind of the plot—was arrested by FBI agents at Santa Anita race track in Los Angeles on January 14, 1938 following an extensive nationwide manhunt. He was returned to Chicago, where he was tried and convicted of the kidnapping and murder of Ross.
1940s and 1950s
The focus of FBI Chicago—along with the rest of the Bureau—soon turned to national security concerns as Europe moved closer to war and World War II eventually unfolded. The Chicago Division increased its national security work and began providing plant security advice to local manufacturers involved in war-related production.
The division was also involved in one of the FBI’s most famous World War II spy cases—the capture of eight Nazi saboteurs on U.S. soil. Building on information from George Dasch—one of the German operatives who had turned himself in—Chicago agents tracked down and arrested Herman Neubauer and Herbert Haupt on June 27. The other saboteurs were rounded up as well.
Members of the Touhy gang
Even during the war, violent criminals continued to plague the Chicago area. On October 9, 1942, a group of dangerous felons—including Roger “The Terrible” Touhy and Basil “The Owl” Banghart—escaped from an Illinois prison. The Bureau lacked jurisdiction at first, but later began to track the fugitives on a federal violation of failing to register under the Selective Service Act. The Chicago Division—with the oversight of FBI Director J. Edgar Hoover in Washington, D.C.—began to close in after running down thousands of leads. Hoover was personally involved in the capture of Touhy, Banghart, and other gang members in Chicago in December 1942.
Issues of national security continued to be the Bureau’s top priority following the end of World War II, and the Chicago Division played a significant role, working to identify spies and protect national secrets and sensitive technologies developed in the area. In the late 1940s, Chicago agents recruited one of the most important FBI double agents of the time—Morris Childs. Childs was a high-ranking communist who spent decades working with his brother and his wife in cooperation with the Bureau to detail the clandestine relationship between the Communist Party of the United States and the Soviet Union. He has also been credited with providing significant foreign intelligence information, according to author John Barron in the bookOperation Solo.