 Blaine entered the 1876 presidential campaign as the favorite , but his chances were almost immediately harmed by the emergence of a scandal . Rumors had begun to spread in February of that year that Blaine had been involved in a transaction with the Union Pacific Railroad in which the railroad had paid Blaine $ 64 @,@ 000 for some Little Rock and Fort Smith Railroad bonds he owned , even though the bonds were nearly worthless ; in essence , the alleged transaction was a sham designed to bribe Blaine . Blaine denied the charges , as did the Union Pacific 's directors . Blaine claimed he never had any dealings with the Little Rock and Fort Smith Railroad except to purchase bonds at market price , and that he had lost money on the transaction . Democrats in the House of Representatives nevertheless demanded a Congressional investigation . The testimony appeared to favor Blaine 's version of events until May 31 , when James Mulligan , a Boston clerk formerly employed by Blaine 's brother @-@ in @-@ law , testified that the allegations were true , that he had arranged the transaction , and that he had letters to prove it . The letters ended with the damning phrase , " Kindly burn this letter . " When the investigating committee recessed , Blaine met with Mulligan in his hotel room ; what transpired between the men is unknown , but Blaine left with the letters and refused to turn them over to the committee . 
