http://en.wikipedia.org/wiki/Maria_ReynoldsScandalHamilton eventually paid Reynolds more than $1,000 in blackmail over several years to continue sleeping with Maria without his interference. But when Reynolds, being a professional con man, became entangled in a separate scheme involving speculation on unpaid back wages intended for Revolutionary War veterans, he quickly implicated Hamilton, knowing that Hamilton would have to choose between revealing his affair with Maria, or admitting complicity to the much more damning speculation charges. Hamilton chose the former, admitting his sexual indiscretion to Congressional inquirers James Monroe and Frederick Muhlenberg, and even turning over his love letters from Maria to them.
The letters proved Hamilton's innocence in the speculation scandal. In addition, because his confession was made in confidence, Hamilton's involvement with Maria Reynolds was not made public in the wake of the speculation investigation. However, Monroe did tell his close personal friend,
Thomas Jefferson, of Hamilton's admission. Jefferson and Hamilton were self-described nemeses, and Jefferson used the knowledge to start rampant rumors about Hamilton's private life. The final straw came in 1797, when pamphlet publisher James Thomson Callender obtained the secret letters and printed them in his newspaper. Callender, who might be referred to today as a "muckraker," also resurfaced corruption charges against Hamilton in his articles. He would later disclose information (through his newspaper) about Sally Hemmings and Thomas Jefferson. Now Hamilton had no choice but to respond, so he printed his own pamphlet called Observations on Certain Documents in which he denied all charges of corruption. He did not, however, deny his relationship with Maria Reynolds; instead, he openly admitted it and apologized for it.
While his candor was admired, the affair severely damaged Hamilton's reputation. Prior to this, Maria Reynolds had divorced James Reynolds; her attorney in the proceedings was none other than Aaron Burr, who would eventually kill Hamilton in their infamous 1804 duel.
