D.C. Stephenson moved during 1920 to Evansville, Indiana, where he worked for a retail coal company. He joined the Democratic Party and in 1922, ran unsuccessfully for a Democratic Congressional nomination.[3] He was said to have already "married and abandoned two wives" before settling in Evansville.[4]

Joseph M. Huffington, whom the Ku Klux Klan had sent from Texas as an agent for organizing in Evansville, recruited Stephenson to the group's inner circle. The historian Leonard Moore characterized them as both young men on the make. The Evansville Klavern became the most powerful in the state, and Stephenson soon contributed to attracting numerous new members. More than 5400 men, or 23 percent of the native-born white men in Vanderburgh County, ultimately joined the Klan.[4]