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Harry M. Daugherty was born January 26, 1860 in Washington Court House, Ohio. His father died of diphtheria when young Harry was just four years old, leaving his mother as the sole provider for the household. In 1878 Daugherty entered the University of Michigan Law School, despite not having first obtained an undergraduate education. He supplemented his income by gambling, winning a large sum betting on the election of James Garfield in 1880. Daugherty graduated from law school in 1881. In Ohio he developed a close political relationship with Governor Joseph Foraker. In September 1884, Daugherty married Lucille Walker, a cousin of Foraker's wife.
In 1889 Daugherty won election to the Ohio state House of Representatives and was reelected in the fall of 1891. Daugherty abandoned his friendship with Foraker seeing it as more advantageous to ally with Foraker's political adversary Mark Hanna. Daugherty and 14 other Ohio legislators changed their support from Foraker and Daugherty aligned himself with to the John Sherman-Mark Hanna faction of the Ohio Republican Party. Governor (and future President) William McKinley named Daugherty as his floor leader in the House of Representatives and McKinley and Daugherty forged a close political friendship.
In 1892 Daugherty tried to win a seat in Congress, but failed. He returned to the practice of law and gained notoriety in a famous manslaughter case in 1895. He sought nomination by the Ohio Republican Party for Governor in 1895, and when that didn't pan out, he tried and failed, a second time, to win a seat in Congress.
During the party split of 1912 Daugherty was a staunch supporter of William Howard Taft and old guard Republican conservatism as against the progressive Republicanism espoused by Theodore Roosevelt. In 1914 Daugherty attached himself to a powerful State Senator named Warren G. Harding. Daugherty had known Harding since the Fall of 1899, when he had been prominent in Ohio politics and Harding was a 35-year old upstart. Harding elected to the state senate in 1901 and appointed Republican floor leader in that same session. Both men were politically ambitious. Harding managed to win election to the U.S. Senate in 1914 while Daugherty remained a backstage figure in state politics.
In January 1918 Daugherty observed that prohibition was a growing movement and opportunistically attempted to become a leader of the dry movement in the state. Daugherty was himself a drinker but saw the political opportunity presented before him. As an Ohio Republican party boss in 1920, Daugherty worked to secure Harding's place as the Republican Party presidential nominee at that year's Republican National Convention in Chicago. The decision to propel Harding forward was made in what became known as the smoke-filled room in the Blackstone Hotel.
Daugherty served as campaign manager for Harding in the presidential election of 1920. He ran the campaign based on Harding's affable personality and fairly neutral political stance, advocating a return to "normalcy" after World War I. Harding won the Republican Party nomination after the vote deadlocked between Leonard Wood and Frank Lowden. When the Republicans scored a victory in the Presidential Election of 1920, Daugherty was named Attorney General of the United States by President-elect Harding. Daugherty was confirmed by the Senate and assumed office on March 5, 1921.
Having achieved power Warren Harding gathered around him a group of political cronies, including factional friends from the Ohio Republican establishment like Daugherty and others of like mind, a group which became known as the "Ohio Gang." Critics such as Harding's Secretary of Commerce Herbert Hoover, were disgusted by the croneyism. Hoover said:
"Harding had another side which was not good. His political associates had been men of the type of Albert B. Fall, whom he appointed Secretary of the Interior; Daugherty, whom he appointed Attorney General; Forbes, whom he appointed Director of the Veterans' Bureau; Thomas W. Miller, whom he appointed Alien Property Custodian, and Jesse Smith who had office room in the Department of Justice. He enjoyed the company of these men and his old Ohio associates in and out of the government. Weekly White House poker parties were his greatest relaxation. The stakes were not large, but the play lasted most of the night.... I had lived too long on the frontiers of the world to have strong emotions against people playing poker for money if they liked it, but it irked me to see it in the White House."
Several of Harding's Ohio Gang associates were quick to enrich themselves at the public expense. Rumors of corruption arose in various government departments, including Daugherty's Department of Justice.
On April 14, 1922, the Wall Street Journal broke a sensational story about a secret bribery scheme involving oil company kickbacks to government officials in exchange for the granting of extraordinarily favorable oil extraction leases via single-bid contracts. The next day Wyoming Democratic Senator John B. Kendrick introduced a resolution which set in motion the Senate investigation that ultimately exposed the Teapot Dome scandal, involving an illegal financial relationship between Fall, Harding's Secretary of the Interior, and a subsidiary of the Sinclair Consolidated Oil Corporation.
Daugherty was accused by opponents of the administration of having been complicit in the Teapot Dome affair by failing to intervene after he had learned of the wrong-doing. Two special prosecutors — Republican Assistant Attorney General Owen J. Roberts and former Democratic Senator Atlee Pomerene — were appointed to conduct a more thorough investigation of the matter. The special prosecutors cleared Daugherty of wrongdoing. Their final report said that the Attorney General had neither been aware of the fraudulent oil contracts and had not taken any bribes related to the affair. In July 1923, just as Harding was preparing to leave on a working cruise to Alaska, Assistant Attorney General Jess Smith suddenly committed suicide. While on his west coast trip, Harding suffered a heart attack and died in San Francisco on August 2, 1923. First Lady Florence Harding immediately gathered and had burned the late President's papers in an effort to preserve her husband's legacy. (She also insisted that there would be no autopsy, prompting conspiracy theorists to speculate that she had poisoned him.)
New President Calvin Coolidge initially resisted calls to sack Daugherty, but Hoover and Secretary of State Charles Evans Hughes prevailed upon him to do so. On March 28, 1924 Coolidge decided to follow their advice. He demanded and received a letter of resignation from Daugherty. Daugherty was quickly replaced as Attorney General by Harlan Fiske Stone, dean of the Columbia Law School.
In 1926, Daugherty was indicted on charges that he improperly received funds in the sale of American Metal Company assets seized during World War I. Daugherty's case went to trial twice, with the first jury deadlocking with 7-5 in favor of conviction. He was acquitted after a single juror remained unconvinced of his guilt in the second trial. Daugherty returned to practicing law until his retirement in 1932. That year he published a book entitled The Inside Story of the Harding Tragedy. In the book, he claimed that Albert B. Fall had become Secretary of the Interior by forging Daugherty's signature, and that his close friend, Jess Smith, had killed himself because of diabetes, not a guilty conscience.
In October 1940, Daugherty suffered two heart attacks and was stricken with pneumonia. Bedridden and blind in one eye, he died peacefully in his sleep on October 12, 1941.