Crédit Mobilier scandal

The Crédit Mobilier scandal (French pronunciation: [kʁedi mɔbilje]) was a two-part fraud conducted from 1864 to 1867 by the Union Pacific Railroad and the Crédit Mobilier of America construction company in the building of the eastern portion of the first transcontinental railroad from the Missouri River to Utah Territory. The story was broken by The New York Sun during the 1872 campaign of Ulysses S. Grant.

A new company, Crédit Mobilier of America, was created by Union Pacific executives to actually build the line, but at inflated construction costs. Though the railroad cost only $50 million to build, Crédit Mobilier billed $94 million and Union Pacific executives pocketed the excess $44 million. Part of the excess cash and $9 million in discounted stock was then used to bribe several Washington politicians for laws, funding, and regulatory rulings favorable to the Union Pacific.

The scandal negatively affected the careers of many politicians and nearly bankrupted Union Pacific. For years afterward, partisan newspapers used the scandal to create Gilded Age public distrust of Republicans, Congress, and the federal government.^{: 303 : 16}