I learned this today. The Teapot Dome scandal had nothing to do with tea or teapots. It was the biggest scandal in America before Watergate.
It all started when the US Navy started to convert its ships from coal power to oil power in 1909. They needed a reliable supply of oil and President Taft set aside various pieces of federal land for later drilling. So far, so good.
In 1920, Warren G Harding became president. He was a newspaper publisher and a senator, but he wasn’t expected to win until he was supported by the oil industry, which basically ensured his victory. They expected him to help them in return.
President Harding appointed Senator Albert Bacon Fall as Secretary of the Interior. He was a wealthy rancher and miner. He persuaded Harding to transfer control of the oil fields from the Navy to his department. And this is where things started to go bad.
One of these oil fields was in Wyoming and was called Teapot Dome because it was close to a rock that looked like a teapot. Fall assigned drilling rights for this area to a company called the Mammoth Oil Company, owned by Harry Sinclair. He also gave the rights to two fields in California to a company called the Pan-American Petroleum Company, owned by Edward Doheny. It turned out that both Sinclair and Doheny were friends of Fall. It also turned out that there was no bidding for the contracts and Fall simply assigned them. These oil fields potentially contained hundreds of millions of dollars of oil.
Fall managed to keep everything secret and nobody noticed anything until Fall’s standard of living suddenly drastically improved and trucks bearing the Sinclair logo started turning up at Teapot Dome. The Wall Street Journal wrote an article about it on April 14th 1922, and the next day the senator for Wyoming, John Kendrick, persuaded the senate to open an investigation.
If it had stopped there, it might not have become the scandal that it was, but it seems that President Harding was also involved in the dealings. Harding’s newspaper, Marion Star was purchased from him for a price that people considered to be far too high. There seems to be no proof, but a lot of people think Sinclair orchestrated this deal. Harding and his wife were also due to spend a year on Sinclair’s yacht, after he finished as president. An all expenses paid year long trip on a luxury yacht. This never happened because he died of a heart attack in 1923.
Whether or not Harding was directly involved is difficult to prove, but he certainly did know about it. He asked his Secretary of Commerce, Herbert Hoover, whether Hoover would hide or expose a great scandal in the administration if he knew about it. Hoover said he would expose it, but Harding obviously decided not to. Harding is also the president that signed off on the original oil contracts.
When Harding died, his successor, Calvin Coolidge, insisted that the investigation continue. After two years of investigation, nobody could uncover any wrongdoing. Fall had covered his steps exceptionally well and all of the oil contracts looked aboveboard. As the investigation was coming to a close, the head of the investigation, senator Thomas J Walsh, discovered a $100,000 loan that had been given from Doheny to Fall. This was an interest free loan. It was also discovered that Sinclair had sent a large herd of livestock to Fall’s home and transferred $300,000 of Liberty Bonds and cash to Fall’s son-in-law. The money had been paid in cash carried in large black bags. Obviously, bribe money.
This was all too much and the scandal broke. Fall was arrested in 1929, tried, fined, and sent to prison for 1 year. While he was in prison, Doheny foreclosed on his ranch for “unpaid” loans and when Doheny was released he was much poorer than when he was imprisoned. He became famous as the first presidential cabinet member to be imprisoned.
In 1927, the contracts for the oil fields were cancelled and returned to the Navy. They were tendered properly and various companies applied. All legal and aboveboard.
The Teapot Dome Scandal was the biggest scandal involving the US government until the Watergate Scandal in the 1970s. It exposed the greed of ministers in the government and even tainted the president himself. If Harding hadn’t died it might have seriously damaged his administration. It took a long time for the government to regain its trust and a lot of reforms had to take place first. Some people might wonder if these reforms were just on the surface and the government ministers simply got better at hiding the corruption. And this is what I learned today.
Photo by cottonbro: https://www.pexels.com/photo/woman-cup-girl-faceless-6974307/
Sources:
https://en.wikipedia.org/wiki/Teapot_Dome_scandal
https://en.wikipedia.org/wiki/Warren_G._Harding
https://en.wikipedia.org/wiki/The_Marion_Star
https://en.wikipedia.org/wiki/Albert_B._Fall
https://www.history.com/topics/roaring-twenties/teapot-dome-scandal