Teapot Dome scandal
The Teapot Dome scandal was a bribery scandal involving the administration of United States President Warren G. Harding from 1921 to 1923. Secretary of the Interior Albert Bacon Fall had leased Navy petroleum reserves at Teapot Dome in Wyoming, as well as two locations in California, to private oil companies at low rates without competitive bidding. The leases were the subject of a seminal investigation by Senator Thomas J. Walsh. Convicted of accepting bribes from the oil companies, Fall became the first presidential cabinet member to go to prison; no one was convicted of paying the bribes.
Before the Watergate scandal, Teapot Dome was regarded as the "greatest and most sensational scandal in the history of American politics". It damaged the reputation of the Harding administration, which was already severely diminished by its controversial handling of the Great Railroad Strike of 1922 and Harding's veto of the Bonus Bill in 1922. Congress subsequently passed legislation, enduring to this day, giving subpoena power to the House and Senate for review of tax records of any U.S. citizen regardless of elected or appointed position. These resulting laws are also considered to have empowered the role of Congress more generally.
History
In the early 20th century, the U.S. Navy largely obtained fuel oil by converting it from coal. To ensure that the Navy would always have enough fuel available, President Taft designated several oil-producing areas as naval oil reserves. In 1921, President Harding issued an executive order that transferred control of Teapot Dome Oil Field in Natrona County, Wyoming, and the Elk Hills and Buena Vista Oil Fields in Kern County, California, from the Navy Department to the Department of the Interior. This was not implemented until the next year in 1922 when Interior Secretary Fall persuaded Navy Secretary Edwin C. Denby to transfer control.
Later in 1922, Interior Secretary Albert Fall leased the oil production rights at Teapot Dome to Harry F. Sinclair of Mammoth Oil, a subsidiary of Sinclair Oil Corporation. He also leased the Elk Hills reserve to Edward L. Doheny of Pan American Petroleum and Transport Company. Both leases were issued without competitive bidding, which was legal under the Mineral Leasing Act of 1920.
The lease terms were very favorable to the oil companies, who secretly made Fall a rich man. Fall received a no-interest loan from Doheny of $100,000, (about $1.45 million today) in November 1921. He received other gifts from Doheny and Sinclair totaling about $404,000 (about $5.86 million today). This money changing hands was illegal, not the leases. Fall attempted to keep his actions secret, but the sudden improvement in his standard of living was suspect. He even paid up his ranch taxes, for example, which had been as much as 10 years past due. Carl Magee, who later founded The Albuquerque Tribune, wrote about this sudden affluence and also brought it to the attention of a Senate investigation.
See also [ Taft, California ]
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