Born to German-American parents, Oberholtzer grew up in Indianapolis, where her father worked as a postal clerk and her family belonged to the Irvington Methodist Church. She studied English, mathematics, zoology and logic at Butler College in Irvington, but dropped out at the end of her junior year without saying why. Through her life, Oberholtzer lived with her parents in the Irvington area of Indianapolis. By the time she met Stephenson, she was the manager of the Indiana Young People’s Reading Circle, a special section of the Indiana Department of Public Instruction. However, she heard rumors that her job and the Reading Circle program were about to be eliminated due to budget cuts.
David Curtiss “Steve” Stephenson (21 August 1891 – 28 June 1966)
Oberholtzer met her murderer while attending Indiana Governor Edward L. Jackson's inauguration party at the Athletic Club on January 12, 1925. In her dying statement, Oberholtzer said Stephenson asked her for a date several times after the banquet, but she refused. However, she eventually agreed and they had dinner together. Following that date, Stephenson called Oberholtzer on the phone several times. She finally agreed to meet him for dinner at the Washington Hotel in Indianapolis.
They began seeing each other more frequently, and she acted as his aide during the 1925 session of the Indiana General Assembly, carrying messages from his office to his friends. She also helped him write a nutrition book, "One Hundred Years of Health". Using her Reading Circle connections, she intended to help him sell the book to school libraries throughout the state. However, she ended her relationship with him after attending a party at his mansion. They would not meet again until Sunday, March 15.
About 10:00 p.m. that day, Oberholtzer returned home after an evening with a friend. Her mother told her that Stephenson’s secretary had called and said he was leaving for Chicago. He wanted her to call him before he left. She called Stephenson, and he told her he would try to protect the Reading Circle program and her job if she agreed to see him. She changed into a black velvet dress, and a bodyguard she named as "Mr Gentry" arrived and escorted her to Stephenson's mansion a few blocks away. When she arrived, Stephenson, his chauffeur, Gentry, and another bodyguard Oberholtzer named as "Clenck" took her into the kitchen and forced her to drink whiskey until she became sick. The four men then took her upstairs, and Stephenson took a revolver from a dresser drawer and forced her to approach him at gunpoint.
Oberholtzer said the men took her to the garage and forced her into Stephenson's car. Before they left, Stephenson told Clenck to stay behind and tell his associate Claude Worley that he was going to Chicago for a business meeting. When they reached the railroad station, Stephenson and Gentry forced Oberholtzer onto Stephenson's private train to Chicago. No sooner had they entered the train's compartment coach, than Stephenson grabbed the bottom of her dress and pulled it over her head. He then grabbed her hands, tore off the rest of her clothes, pushed her into the lower bed, and raped her repeatedly. He also bit her all over her body. Oberholtzer was still intoxicated and unable to resist.
She finally passed out, after her attacker. Upon waking she said, “The law will get their hands on you!” Because his Klan connections gave him tremendous political power, Stephenson laughed and replied, “I am the law in Indiana.” An examination of her body later revealed deep bite wounds were on her face, neck, breasts, back, legs, ankles, and tongue.
Following the assault, Gentry and Stephenson dressed Oberholtzer and told her they would be stopping in Hammond, Indiana. Stephenson and Oberholtzer, assisted by Gentry, checked into the Indiana Hotel. Stephenson forced her to say she was his wife so they could share the same room. Stephenson forced her to write a telegram to her mother, saying she had decided to go to Chicago with him. While Stephenson was sleeping, Oberholtzer grabbed his revolver to kill herself, but changed her mind, fearing it would dishonor her mother. Instead, she decided to commit suicide by taking poison. The next morning, she convinced Stephenson to call Shorty and tell him to come to the hotel so she could purchase a black silk hat.
She bought the hat, then asked Shorty to drive her to a drug store to buy some rouge. She bought an entire box of mercuric chloride tablets. Oberholtzer returned to her room, but was still weakened from her wounds Stephenson had inflicted on her and only managed to swallow six tablets. She vomited blood throughout the remainder of the day. Stephenson insisted that he would not take her to a hospital unless she agreed to go to a nearby chapel and marry him, However, he panicked and ordered Shorty to drive them back to Indianapolis as soon as possible. When he was asked what had happened, a bodyguard said she had been in a car accident.
Oberholtzer's parents immediately called a doctor, but there was nothing that could be done to save her. On March 28, she told what had happened to her in a signed statement. She died on April 14, 1925 from a staph infection from the bites, plus kidney failure from the mercury poisoning. She was buried at Memorial Park Cemetery in Indianapolis.
Stephenson was indicted on charges of rape and second-degree murder. The doctor who had examined Oberholtzer testified that the injuries she received were sufficient to have killed her, as her wounds developed an infection that reached her lungs and kidneys."
Stephenson's attorney claimed Oberholtzer had committed suicide, saying the rapist could not have anticipated her behavior. The prosecution countered that based on medical testimony, prompt medical attention might have saved her life. During the closing statements, the prosecutor decried Stephenson as a “destroyer of virtue and womanhood”. The jury found him guilty of second degree murder, rape, and kidnapping, and the court sentenced him to life in prison. The State Supreme Court rejected his appeal. This case is still taught in law schools as showing an enlargement of the causal relationships that define homicide.
The brutal attack on Madge Oberholtzer so outraged most members of the Klan that entire lodges quit en masse, and membership dropped by the tens of thousands. The scandal destroyed the KKK in Indiana, and in the following two years, the Indiana KKK lost more than 178,000 members, nearly disappearing.
Denied a pardon in 1926, Stephenson started talking to the Indianapolis Times, giving the names of officials who had accepted bribes and payments from the Klan. The Times investigated the Klan in the state. The state finally indicted several high-ranking officials, including Governor Ed Jackson and the head of the Republican Party in Marion County. Other local officials resigned when facing charges. The Times investigation revealed widespread political corruption, which helped destroy the Klan in Indiana and nationwide. By February 1928, Indiana Klan rosters had dropped to just 4,000, from a peak of more than 250,000 members in 1925.
Stephenson was paroled on March 23, 1950, but he violated the conditions of his parole by disappearing around September 25, 1950. He was captured in Minneapolis on 15 December, and was ordered by the court in 1951 to serve another 10 years. He was paroled on December 22, 1956, on the condition that he leave Indiana and never return.
In 1961, Stephenson was arrested in Tennessee at age 70 on charges of sexually assaulting a sixteen-year-old girl. However, the charges were dropped on grounds of insufficient evidence. He died 5 years later in 1966.Actress Mel Harris portrayed Oberholtzer in the TV mini-series Cross of Fire (1989).