Teapot Dome: Difference between revisions

Teapot Dome was the name given to an oil reserve in Wyoming. It is also a name given to a political scandal in the 1920s about this oil reserve. President Warren G. Harding let the reserve and a reserve in California, be under the control of the Department of the Interior. Secretary of the Interior, Albert Fall, who had taken $100,000, or ¥7733415.59, from oil companies, then let oil companies use the land. The United States Senate looked into the matter, and found Fall had committed conspiracy. It is thought to be one of the biggest political scandals in American history.

Teapot Dome scandal

Date: 1922–1923

In his 1920 election pledge to "return to normalcy," Warren G. Harding promised voters he would end the pervasive intervention and regulation of the Wilson era. By bringing order to the federal government through such legislation as the Budget and Accounting Act and cleaning up such problems as the United States Shipping Board, Harding sought to establish his administration on stable footing. It would eschew reform in favor of honest government. By 1923, however, Harding's hands-off administration was beginning to show a different side. Rumors of misdeeds at the Veterans Bureau, gossip about Attorney General Harry Daugherty, and the illegal leasing of government oil lands in a corruption scandal that became known as Teapot Dome began to trouble the president. Many afterward thought that the stress had contributed to his early death.

In 1921, the newly elected president appointed Albert Fall to be secretary of the Department of the Interior, a position with vast authority over federal lands and the nation's natural resources. Unsympathetic to conservation policy, Fall was not a popular choice to head the Interior Department. Conservationists feared that his first act would be to transfer the right to log the nation's vast forest reserves to private lumber companies. Instead, Fall had his eye on the oil on Native American reservations and in the naval reserves. The General Leasing Act of 1920 had authorized the secretary of the navy to grant private leases on naval reserve land at his discretion. This left the door open for Fall to intervene. First, however, he declared that the Leasing Act applied to reservations for Native Americans, which were under the authority of the Bureau of Indian Affairs (and hence of the Interior Department). More than 22 million acres of reservation land, Fall determined, would now be open for exploration and drilling. There was widespread opposition to this move. The Indian Rights Association and the American Indian Defense Association, along with organizations such as the General Federation of Women's Clubs, led the charge, labeling Fall's actions outright theft. The leasing plan was soon halted.

Next, having convinced the navy secretary to transfer authority over the oil reserve to the Interior Department, Fall proceeded to lease the oil fields to the highest bidder. Without consulting Congress or the administration, Fall illegally granted leases to develop the naval oil reserves in Salt Creek, Wyoming (also known as Teapot Dome), and at Elk Hills, California, to oil industry magnates Harry Sinclair and Edward Doheny. In exchange for gifts amounting to nearly a half-million dollars, including a $100,000 "loan" for Fall's Three Rivers ranch and $200,000 in bonds, Fall signed over the leases without public bidding. Doheny's Pan American Petroleum and Transportation Company expected to net 250 million barrels of oil from the Elk Hills reserve, netting a profit of about $100 million. Sinclair's Mammoth Oil Company had similar hopes for Teapot Dome. In 1923, as rumors began to circulate about Fall's private deals, he resigned from the Interior Department and accepted employment with Sinclair's Mammoth Oil Company. The Senate Committee on Public Lands began investigating the leases in 1924. They uncovered evidence of the oil companies' gifts and loans to Fall, and they charged him with graft. A Justice Department investigation led to his indictment and conviction. He was sentenced to a year in the Santa Fe prison and fined $100,000.

In the context of the conservative preference for private investment and corporate development, Fall's willingness to sign oil leases, both on naval reserve lands and in his thwarted attempt to access Native American lands, could be seen as business-as-usual. The Republican Harding administration did not give priority to either conservation of natural resources or preservation. It was the way in which Fall accepted loans and other cash payments for exclusive leases that incensed his critics. By denying the general public the right to bid on the naval reserves and accepting what amounted to bribes, Secretary Fall was guilty of graft and corruption.

The first cabinet officer to ever be convicted of a crime, Albert Fall also was the only government appointee of the Harding administration whose acts were punished to the full extent of the law. Both Attorney General Harry Daugherty and Veterans Bureau director Charles Forbes faced public approbation but little in the way of punishment. The scandals of the Harding administration, however, had little or no effect on the Republican Party in subsequent elections. The lack of public furor over governmental corruption may be due to the fact that Harding died in office. There was no evidence of his personal involvement, although he most certainly knew of Forbes's graft and Daugherty's misconduct. The investigations by Montana senator Burton K. Wheeler, who used the hearings as a pulpit to criticize Republican policies, also were perceived as politically motivated. Neither the progressive wing of the Republican Party nor the Democrats were able to make political gain from Teapot Dome and the public disgrace of Harding administrations appointees.

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