 The Crédit Mobilier of America scandal involved corruption in the financing of the Union Pacific Railroad , part of the transcontinental railroad that was completed in 1869 . Union Pacific officers and directors secretly purchased control of the Crédit Mobilier of America company , then contracted with the firm to have it undertake the construction of the railroad . The grossly inflated invoices submitted by the company were paid by the railroad , using federal funds appropriated to subsidize the project , and the company was allowed to purchase Union Pacific securities at par value , well below the market rate . Crédit Mobilier showed large profits and stock gains , and distributed substantial dividends . The high expenses meant that Congress was called upon to appropriate more funds . One of the railroad officials who controlled Crédit Mobilier was also a congressman , Oakes Ames of Massachusetts . He offered some of his colleagues the opportunity to buy Crédit Mobilier stock at par value , well below what it sold for on the market , and the railroad got its additional appropriations . 
