Teapot Dome scandal

Teapot Dome is the commonly used name applied to the scandal that rocked the administration of United States President Warren G. Harding.

Background

The origins of the scandal date back to the popular conservation legislation of presidents Theodore Roosevelt, William Taft and Woodrow Wilson, specifically as to the creation of naval petroleum reserves in Wyoming and California.

Three naval oil fields, Elk Hills and Buena Vista Hills in California and Teapot Dome in Wyoming, were tracts of public land that were reserved to be emergency underground supplies to be used by the Navy only when the regular oil supplies diminished. The Teapot Dome oil field received its name from a rock resembling a teapot located above the oil-bearing land. Many politicians and private oil interests had opposed the restrictions placed on the oil fields claiming the reserves were unnecessary and the American oil companies could provide for the U.S. Navy.

One of the public officials most avidly opposed to the reserves was Senator Albert Fall, a Republican from New Mexico. Fall was no stranger to using underhanded tactics to get his way. A political alliance ensured his first election to the Senate in 1912, and his political allies - who later made up the infamous Ohio Gang - convinced President Harding to appoint Fall as Secretary of the Interior in March of 1921.

The Scandal

In 1922, the reserves were still under the jurisdiction of Edwin Denby, the Secretary of the Navy. Denby himself was part of the Ohio Gang, and was easily convinced by Fall to give jurisdiction over the reserves to his department. Fall then illegally leased the rights to the oil to Harry F. Sinclair of Sinclair Oil (then known as Mammoth Oil) without competitive bidding. Concurrently, Fall also leased the Naval oil reserves at Elk Hills, California to Edward L. Doheny of Pan American Petroleum in exchange for personal loans at no interest. In return for leasing these oil fields to the respective oil magnates Fall received "gifts" from the oilmen totaling about $400,000. Fall attempted to keep his actions secret but his sudden improvements in standard of living drew speculation.

On April 14, 1922, the Wall Street Journal reported an unprecedented secret arrangement in which Fall had leased the petroleum reserves to a private oil company without competitve bidding. Of course, Fall denied the claims, and the leases to the oil companies seemed legal enough on the surface. However, the following day, Wyoming Democratic Senator John B. Kendrick introduced a resolution that would set in motion one of the most significant investigations in the Senate's history. Wisconsin Republican Senator Robert La Follette arranged for the Senate Committee on Public Lands to investigate the matter. He at first thought Fall innocent. However, his suspicions deepened after someone ransacked his office over that next weekend.

Despite the Wall Street Journal's report, the public did not take notice of the gathering clouds of suspicion, the Senate Committee Investigation, or much of the scandal at all. Without any proof and with more ambiguous headlines, the story faded from the public's eye, but the Senate kept probing.

The Investigation and Outcome

La Follette's committee allowed the investigation panel's most junior minority member, Montana Democrat Thomas J. Walsh, to lead what most expected to be a tedious and probably futile inquiry seeking answers to many questions.

For two years, Walsh pushed forward while Fall stepped backward, covering his tracks as he went. The Committee continually found no evidence of wrongdoing, the leases seemed legal enough, and records simply kept disappearing mysteriously. Fall had made the leases of the oil fields legitimate looking enough, but the taking of money was his undoing because by 1924, the Committee only had one unanswered question that had yet to lead to a dead end: How did Fall get so rich so quickly?

Finally, as the investigation was winding down and preparing to declare Fall innocent, Walsh uncovered one tiny piece of evidence Fall had forgotten to cover up. The scandal dropped with a resounding gasp from the public. Walsh became a national hero and figurehead for the fight against government corruption.

The investigation lead to a series of civil and criminal suits related to the scandal throughout the 1920s. Finally in 1927 the Supreme Court ruled that the oil leases had been corruptly obtained and invalidated the Elk Hills lease in February of that year and the Teapot lease in October of the same year. The Navy regained control of the Teapot Dome and Elk Hills reserves as a result of the Court's decision. Another significant outcome was the Supreme Court case McGrain v. Daugherty which, for the first time, explicitly established Congress' right to compel testimony.

Albert Fall was found guilty of bribery in 1929, fined $100,000 and sentenced to one year in prison - making him the first Presidential cabinet member to go to prison for his actions in office. Harry Sinclair, who refused to cooperate with the government investigators, was charged with contempt, fined $100,000, and received a short sentence for tampering with the jury. Edward Doheny was acquitted in 1930 of attempting to bribe Fall.

Aftermath

The Teapot Dome scandal was a victory for neither political party in the 1920's. It did become a parlor issue in the presidential election of 1924 but, as the investigation had only just started earlier that year, neither party could claim full credit for exposing the wrongdoing. The only political casualty as a result was Fall's Senate replacement, Holm O. Bursum, whom Fall had handpicked to succeed him. Bursum, guilty only of being associated with Fall, lost his 1924 re-election. Eventually, when the Depression hit, the scandal was part of a snowball effect that damaged many of the big business Republicans of the 1920s.

The concentrated attention on the scandal made it the first true symbol of government corruption in America. The scandal did reveal the problem of natural resource scarcity and the need to provide reserves against the future depletion of resources in a time of emergency. Calvin Coolidge, in the spirit of his campaign slogan "Keep Cool with Coolidge", handled the problem very systematically and quietly, and his administration avoided any damage to its reputation. Overall the Teapot Dome scandal came to represent the corruption of American politics over the preceding decades. This sort of thing had happened before, Teddy Roosevelt crusaded against this type of behavior twenty years earlier. Teapot Dome was just the first time something like it had been exposed nationally.

Warren Harding personally was not, directly or otherwise, aware of the scandal. At the time of his death in 1923 he was just beginning to learn of problems resulting from his appointee’s actions when he undertook his Voyage of Understanding tour of the United States in the summer of 1923. As a result of Teapot Dome, Harding’s administration has been remembered in history as one of the most corrupt to occupy the White House. Harding delegated his power, and ultimately delegated it to the wrong people.

Following the exposure of Teapot Dome, Harding’s popularity plunged from the record highs it had been at throughout his term. While the late President and First Lady Florence Kling Harding’s bodies were interred in the newly completed Harding Memorial in Marion, Ohio in 1927, a formal dedication ceremony wouldn’t be held until 1930 when enough of the scandal had faded from the memories of the American people.