On the Fourth of July in Kokomo, Indiana, Stephenson stepped off from his biplane to the largest Klan gathering in history. While the exact number is unclear, it is estimated that one hundred thousand to two hundred thousand men, women, and children of the Midwest attended the Klan rally. Kokomo itself lent half of its population to the Klan, including the mayor, prosecutor, police force, and school board. Since 1919, the town had practiced mandatory racial segregation.

Stevenson was greeted by throngs of excited Klansmen, who referred to him as the “Old Man.” The rally was also a coronation of sorts, with Evans awarding Stevenson the title of the Grand Dragon of the Realm of Indiana for converting the Midwest into one of the Klan’s mightiest strongholds. Stevenson then delivered a lengthy speech on pure Americanism and how the Constitution must be rewritten, after which an epic feast for the Klan members was held. Back at his hotel, the Grand Dragon was interviewed by reporter John Niblack of the Indianapolis Times, who asked him about his ultimate objective for the Klan and how much money he has made from the organization. Offended, Stephenson accused Niblack of being part of a conspiracy against the Klan and threw the young reporter out of the room.

At nightfall, a drunk Stephenson ordered his secretary to board his car and accompany him to an errand. After parking in a discreet spot, he attempted to rape her. While she was able to escape into the night, she knew it was futile to report a crime committed by one of the most powerful men in the Midwest. Ultimately, the Independence Day rally in Kokomo impressed upon Indiana citizens—especially those who were Black, Catholic, and Jewish—that the Klan was an Invisible Empire consisting of quiet supporters such as their neighbors, bankers, law enforcement, and other people they interacted with in their everyday lives.