In this press photo of December 30, 1943, Louis H. Egan is not “having the finest time in the world,” as the 1925 profile was titled. With wife Fannie grasping his left arm and deputy U. S. Marshal Davidson holding his right, the tall, disgraced executive clutches a cigarette with a gloved hand. We tell the story of Egan’s glaring error in management that led to his downfall in Damming the Osage: The Conflicted Story of Lake of the Ozark and Truman Reservoir:
Cutline on the press photo dated 3-5-42 showing Egan with a federal eagle behind him, posed as if to sink his claws into him:
“Louis H. Egan, former president of the Union Electric Company of Missouri entering federal court in St. Louis, Mo., where he was found guilty of violating the Corrupt Practices section of the Utility Act. “
Egan’s downfall began when he foolishly fired a Union Electric vice president named Oscar Funk, who, as the July 29, 1940 Time article put it “knew where the bodies were.” A muckraking St. Louis Post-Dispatch reporter named Sam Shelton had suspected the utility had been paying politicians for years. Funk spilled the beans to Shelton who in turn confided the information to the Securities and Exchange Commission. The reporter got an explosive series of articles and the SEC got Egan. In the Post Dispatch and in court, it was revealed that Union Electric had been demanding sizable kickbacks from lawyers and contractors. From this slush fund, they bribed newspapermen, paid elected officials, and illegally contributed to political campaigns. Egan and his cronies also enriched themselves. Union Electric sued Egan, VP Frank Boehm, and even whistle-blower Oscar Funk to recover $400,000. Funk sued Union Electric for being unjustifiably fired. Several vice presidents did short sentences for perjury, but Louis Egan was convicted of violation of the Corrupt Practices Section of the Holding Company Act of 1935. Union Electric paid an $80,000 fine. Egan paid $10,000 and was sentenced to two years. His appeals failed and on December 31, 1943, the $68,000-a-year former executive entered the federal penitentiary at St. Petersburg, Florida.
The cut line pasted on the back of the photo of Egan leaving for jail said he was headed for federal prison at Terre Haute. Another source had him released a few months shy of two years later from a penitentiary in Florida. He died in 1950 at his home in Clayton, Missouri at the age of sixty-nine of bronchopneumonia.
The names of Egan and the other felons who managed Union Electric during the building of Bagnell Dam are cast in bronze on this plaque attached to the powerhouse. It was Egan’s pond, but his role in this enormous undertaking has been forgotten.
Some of the laws Louis Egan broke regarding campaign financing by corporations were not in place when he began his career. Recently businesses have again been allowed to contribute to political races. Even the Public Utility Holding Company Act of 1935 was repealed in 2005, replaced by a new set of regulations that consumer advocates objected to.
In the text of Egan’s appeal, the court upheld his conviction but noted, “the evidence also tends to show that the whole subject of political expenditure was distasteful to him and that his preference would have been to have nothing to do with such matters.” Nevertheless Egan approved for years the “raising a secret fund for political purposes.”
Sordid as the history of building Bagnell Dam is, we suspect public records reveal only a small percentage of the crimes and skullduggery committed by its creators. When the federal government subsequently took over dam building, they too began to lie and subvert regulation, just like the capitalists. Who regulates the regulators?
