In a speech to the Grand Council on 10 July 1899, Stark claimed that he had received documents from a clerk at the Mexican embassy named John Montalban proving that Gallivan had been receiving N.A. £1.5 million a year since 1893 from K.A. President Diego Cortez y Catalán "to protect our common interests." Stark's charges resulted in a wave of political violence in the C.N.A. known as the Starkist terror.
Gallivan met with Stark and several members of the Council's Rules Committee on 19 July, and claimed that Stark's documents were forgeries. He requested that the Rules Committee conduct "a full investigation of these slanders at the earliest possible moment." The members of the Rules Committee agreed, and the following day established the Special Subcommittee.
Ordinarily, the Special Subcommittee would have been chaired by a member of the majority People's Coalition, but Gallivan requested that a Liberal chair the committee "to remove any doubts as to its impartiality." Sobel states that Gallivan also requested a Liberal committee chairman because the Rules Committee's Coalitionists were all supporters of his rival Thomas Kronmiller. Councilman Henderson Nelson of the Northern Confederation was chosen to chair the Special Subcommittee.
After a two-week investigation, the Nelson Committee found that the charges were untrue, that the documents were forgeries, and that Stark had been deceived by Montalban, who was mentally unbalanced. Stark recanted his accusations in a speech on 6 August, then committed suicide the following day. However, the political violence continued, and Gallivan finally resigned on 24 July 1901.
Sobel's sources for the Special Subcommittee and its findings are the Subcommittee's Report of the Inquiry into Charges of Treason (Burgoyne, 1900) and Allen Watterson's The Great Fear: Starkism in the C.N.A. (London, 1956).