In 1923, Leach was promoted to brigadier general as commander of Minnesota's 59th Field Artillery Brigade.[10] In 1931, he was appointed Chief of the National Guard Bureau and was promoted to Major General.[11] He served in this position until 1935, after which he returned to command of the 59th Field Artillery Brigade, reverting to his permanent rank of Brigadier General.[12] In 1937, he was elected President of the National Guard Association of the United States.[13]
From 1940 until his retirement in 1941, Leach was commander of the 34th Infantry Division, again receiving promotion to Major General. Under his command the division was activated and began its initial preparations and training for entry into World War II.[14]
In June 1921, Leach was elected Mayor of Minneapolis.[16] He stood for election as a conservative, and was re-elected in 1923.[17] During his second term, Leach's opponents accused him of being a communist because he opposed private ownership of a hydroelectric dam on the Mississippi River.[18]
At the same time, the Ku Klux Klan (KKK) was growing in Minnesota within the ranks of several fraternal orders, primarily the Masons and Shriners. Leach was a member of several such organizations, and the Klan initially regarded him as a de facto ally but later considered him an adversary because he had appointed a Catholic as his secretary and had dined with the Knights of Columbus. The Klan also disliked Leach because he prevented police officers from joining the Klan and because he launched an investigation into Klan activity at the University of Minnesota.[19] The KKK fielded its Exalted Cyclops, Roy Miner, as a mayoral candidate against Leach in 1923. Miner campaigned on elimination of illegal gambling and vice, which he said Leach abetted. The KKK found a woman in a local jail who said she had had an affair with Leach, and publicized this in an effort to enmesh Leach in a scandal.[20] A grand jury decided the story of the affair was criminally libelous. The case went to trial; Floyd B. Olson handled the prosecution against five KKK leaders.[21] The witness said she had lied about Leach, who denied both the affair and the charges of protecting vice and gambling. The all-Protestant jury found the defendants guilty and sentenced them to prison.[22] Leach won a landslide re-election against the KKK's stand-in for Miner, Senator William A. Campbell.[23]
In 1926, Leach was an unsuccessful candidate for the Republican nomination for Governor. He was re-elected mayor in 1927,[24] but was defeated for re-election in 1929.[25] In 1937, he was again elected mayor.[26] He was an unsuccessful candidate for the Republican nomination for Governor of Minnesotain 1938.[27] He was re-elected mayor in 1939,[28] and served until 1941.