1939 the campus was given a shock from which it would take many years to recover. A New Orleans newspaper ran a photo on the front page showing an LSU truck unloading building materials in suburban New Orleans, revealing an illegal operation. The ensuing investigation led to the discovery that LSU's President Smith had embezzled nearly a million dollars from the university, using the money to cover his losses while speculating in the Chicago wheat futures market. Smith stood trial, and was sent to first Federal prison and later the Louisiana State Penitentiary in Angola. The LSU superintendent of grounds and buildings, George Caldwell, was also involved in the scandal and served time in Atlanta for tax evasion. Meanwhile, the state's governor, Richard Leche, resigned, but was soon found guilty of several federal charges and sent to Atlanta to serve time. The Board of Supervisors met in a special session at the end of June 1939 and Middleton was directed to take over the business management of the university. The school's finances were in a state of chaos, and it would take effort and time to dig out of the mess. The dean of the Law School, Paul M. Hebert, became the acting president, and Middleton became acting vice president and comptroller. Middleton chose two accounting professors, Dr. Daniel Borth and Dr. Mack Hornbeak, to work with him, and a New York firm was hired to come in and establish sound business procedures. Before the revelation of the illegal activities, expenditures had been routinely made on a cash basis, all of the university funding and program money was thrown into a single account, and university bond indentures had been violated. The new leadership had to advertise in Louisiana newspapers to find out to whom they owed money. The first year of dealing with the situation required 16- to 18-hour days, six days a week, and after that the process still required overtime through the year 1941. Faculty and staff members, accustomed to making purchases without bids, purchase orders or knowledge of the budget, had to be educated on the accepted business procedures on which the rest of the world operated. While Middleton was helping LSU recover from this traumatic ordeal, he was also keeping an eye on events in Europe. In July 1940 he wrote a letter to General George Marshall asking if his services were needed by the Army