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Oil businessman Edward L.

Doheny
(second from right, at table) testifying
before the Senate Committee
investigating the Teapot Dome oil
leases in 1924.
Teapot Dome around the time of the
scandal, featuring Teapot Rock (from
postcard, ca 1922).
Teapot Rock viewed from the south.
The Teapot Dome oil fields are
located north of the rock to the right.
(image ca 2009).
From Wikipedia, the free encyclopedia
(Redirected from Teapot Dome Scandal)
The Teapot Dome scandal was a bribery incident that took place in the
United States from 1920 to 1923, during the administration of President
Warren G. Harding. Secretary of the Interior Albert B. Fall leased Navy
petroleum reserves at Teapot Dome in Wyoming and two other locations
in California to private oil companies at low rates without competitive
bidding. In 1922 and 1923, the leases became the subject of a
sensational investigation by Senator Thomas J . Walsh. Fall was later
convicted of accepting bribes from the oil companies.
Before the Watergate scandal, Teapot Dome was regarded as the
"greatest and most sensational scandal in the history of American
politics".
[1]
The scandal damaged the public reputation of the Harding
administration, which was already severely diminished by its poor
handling of the Great Railroad Strike of 1922 and the President's veto of
the Bonus Bill in 1922.
[2]
1 History
2 Investigation and outcome
3 See also
4 Notes
5 Further reading
6 External links
In the early 20th century, the U.S. Navy largely converted from coal to
oil fuel. To ensure the Navy would always have enough fuel available,
several oil-producing areas were designated as Naval Oil Reserves by
President Taft. In 1921, President Harding issued an executive order
which 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 1922, when Interior Secretary Fall persuaded
Navy Secretary Edwin C. Denby to transfer control.
Later in 1922, Albert Fall leased the oil production rights at Teapot Dome to Harry F. Sinclair of Mammoth Oil,
a subsidiary of Sinclair Oil. He also leased the Elk Hills reserve to Edward L. Doheny of Pan American
Petroleum. Both leases were issued without competitive bidding. This manner of leasing was legal under the
Coordinates: 43.2885808N 106.1733516W
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Senator Albert B. Fall, the first
former U.S. cabinet official
sentenced to prison.
Mineral Leasing Act of 1920.
[3]
The lease terms were very favorable to the oil companies, which secretly made Fall a rich man. Fall had
received a no-interest loan from Doheny of $100,000 (about $1.32 million today
[4]
) in November 1921. He
received other gifts from Doheny and Sinclair totaling about $404,000 (about $5.34 million today
[4]
). It was this
money changing hands that was illegalnot the leases. Fall attempted to keep his actions secret, but the sudden
improvement in his standard of living prompted speculation.
In April 1922, a Wyoming oil operator wrote to Senator J ohn B. Kendrick,
angered that Sinclair had been given a contract to the lands in a secret deal.
Kendrick did not respond, but two days later on April 15, he introduced a
resolution calling for an investigation of the deal.
[5]
Republican Senator Robert
M. La Follette, Sr. of Wisconsin led an investigation by the Senate Committee
on Public Lands. At first, La Follette believed Fall was innocent. However, his
suspicions deepened after his own office in the Senate Office Building was
ransacked.
[6]
Democrat Thomas J . Walsh of Montana, the most junior minority member, led
a lengthy inquiry. For two years, Walsh pushed forward while Fall stepped
backward, covering his tracks as he went. No evidence of wrongdoing was
initially uncovered as the leases were legal enough, but records kept
disappearing mysteriously. Fall had made the leases appear legitimate, but his
acceptance of the money was his undoing. By 1924, the remaining unanswered
question was how Fall had become so rich so quickly and easily.
Money from the bribes had gone to Fall's cattle ranch and investments in his business. Finally, as the
investigation was winding down with Fall apparently innocent, Walsh uncovered a piece of evidence Fall had
forgotten to cover up: Doheny's $100,000 loan to Fall.
This discovery broke the scandal open. Civil and criminal suits related to the scandal continued throughout the
1920s. In 1927 the Supreme Court ruled that the oil leases had been corruptly (fraudulently) obtained. The
Court invalidated the Elk Hills lease in February 1927 and the Teapot Dome lease in October. Both reserves
were returned to the Navy.
Albert Fall was found guilty of bribery in 1929.
Another significant outcome was the Supreme Court's ruling in McGrain v. Daugherty (1927) which, for the
first time, explicitly established that Congress had the power to compel testimony.
[7]
Little Green House on K Street
Teapot Dome scandal - Wikipedia, the free encyclopedia http://en.wikipedia.org/wiki/Teapot_Dome_Scandal
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^ Cherny, Robert W. "Graft and Oil: How Teapot Dome Became the Greatest Political Scandal of its Time"
(http://www.gilderlehrman.org/historynow/historian5.php). History Now. Gilder Lehrman Institute of American
History. Retrieved May 27, 2010.
1.
^ "Warren G Harding: Domestic & foreign affairs" (http://www.presidentprofiles.com/Grant-Eisenhower/Warren-
G-Harding-Domestic-and-foreign-affairs.html), Grant-Eisenhower, President profiles.
2.
^ "Mineral Leasing Act of 1920 as Amended (re-transcribed 2007-08-07)" (http://www.mrm.mms.gov/laws_r_d
/FRNotices/PDFDocs/ICR0122LeasingAct.pdf) (PDF). Bureau of Land Management, U.S. Department of the
Interior.
3.
^
a

b
Consumer Price Index (estimate) 18002014 (http://www.minneapolisfed.org/community_education/teacher
/calc/hist1800.cfm). Federal Reserve Bank of Minneapolis. Retrieved February 27, 2014.
4.
^ Davis, Margaret L (2001). Dark Side of Fortune: Triumph and Scandal in the Life of Oil Tycoon Edward L. Doheny
(http://books.google.com/books?id=q65CsgOv7dMC&pg=PA149). University of California Press. p. 149.
5.
^ "Senate Investigates the "Teapot Dome" Scandal" (http://www.senate.gov/artandhistory/history/minute
/Senate_Investigates_the_Teapot_Dome_Scandal.htm). Historical Minutes: 19211940. Art & History, United States
Senate.
6.
^ "McGrain v. Daugherty" (http://www.oyez.org/cases/1901-1939/1924/1924_28). Oyez.org. Retrieved 2 November
2010.
7.
Bates, J . Leonard. The Origins of Teapot Dome. Urbana, IL: University of Illinois Press, 1963.
Bennett, Leslie E. "One Lesson From History: Appointment of Special Counsel and the Investigation of
the Teapot Dome Scandal" (http://academic.brooklyn.cuny.edu/history/johnson/teapotdome.htm).
Washington, D.C.: Brookings Institution, 1999.
Ise, J ohn. The United States Oil Policy. New Haven, CT: Yale University Press, 1926.
McCartney, Laton. The Teapot Dome Scandal: How Big Oil Bought the Harding White House and Tried
to Steal the Country. New York: Random House, 2008.
Murphy, Blakely M. (ed.) Conservation of Oil and Gas: A Legal History. Chicago: Section of Mineral
Law, American Bar Association, 1949.
Noggle, Burl. Teapot Dome: Oil and Politics in the 1920s. Baton Rouge, LA: Louisiana State University
Press, 1962.
Werner, M. R. and Starr, J ohn. Teapot Dome. New York: Viking Press, 1959.
Retrieved from "http://en.wikipedia.org/w/index.php?title=Teapot_Dome_scandal&oldid=607088671"
Categories: Teapot Dome scandal 1920s in the United States 1922 in Wyoming 1923 in Wyoming
Bribery Harding administration controversies History of Kern County, California
History of the San J oaquin Valley History of Wyoming Natrona County, Wyoming
Political corruption scandals in the United States Sinclair Oil Corporation
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