Appointed the first director of the Veterans' Bureau by President Warren G. Harding on August 9, 1921, Forbes served until February 28, 1923.

[1][2] After leaving the Army, Forbes engaged in construction work in the Pacific Northwest, moving to Seattle, where he became active in state politics.

In 1912, Forbes and his family moved to Hawaii, at that time a United States territory, and worked at the Pearl Harbor naval station as an engineer for the next five years.

While in Hawaii, Forbes became acquainted with vacationing senator Warren G. Harding, a meeting that would eventually change both of their lives.

He was awarded both the French Croix de Guerre (War Cross) and the Army Distinguished Service Medal, the citation for which reads: The President of the United States of America, authorized by Act of Congress, July 9, 1918, takes pleasure in presenting the Army Distinguished Service Medal to Lieutenant Colonel (Signal Corps) Charles R. Forbes, United States Army, for exceptionally meritorious and distinguished services to the Government of the United States, in a duty of great responsibility during World War I.

[4] When his close friend Warren G. Harding was running for president in 1920, Forbes helped to deliver the state of Washington's delegate vote at the Republican National Convention held in Chicago.

Although 300,000 soldiers had been wounded in combat, Forbes had only allowed 47,000 claims for disability insurance, while many were denied compensation for reasons that Congress called "split hairs."

While on the numerous trips (called "joy rides") that Forbes took to inspect hospital construction sites, he and his contractor friends allegedly indulged in parties and drinking.

[7] According to congressional testimony, on an inspection trip to Chicago, Forbes gambled and accepted a $5,000 bribe from contractor J. W. Thompson and middleman E. H. Mortimer at the Drake Hotel to secure $17,000,000 in veterans' hospital construction contracts.

A three-member committee led by Pennsylvania senator David A. Reed[13] revealed that Forbes had left 200,000 unopened pieces of mail from veterans at the bureau.

On March 14, 1923, former Veterans' Bureau general counsel Charles F. Cramer committed suicide one week after resigning in the face of increasing scrutiny from Congress and the American Legion for his involvement in the scandal.

He claimed to have once discovered Jess Smith, an aide to Harding's attorney general Harry Daugherty, collecting $70,000 in $1,000 bills scattered on a Justice Department office floor.

Forbes also claimed that narcotics were rampant at Atlanta and Leavenworth federal prisons while Daugherty was attorney general as a result of chronic understaffing.

Forbes claimed that at a White House poker game, Harding said that he would remove a $1,000 fine imposed on prize fighter Jack Johnson, who had been released from Leavenworth in 1921.

[17] On December 16, 1927, Forbes testified before a grand jury in Kansas City regarding his statement in the article claiming that narcotics were easily obtained within Leavenworth.