Teapot Dome Scandal

Teapot Dome is in reference to an oil field on public land in Wyoming. It is also a phrase commonly applied to the scandal that rocked the administration of United States President Warren G. Harding ( 1921-1923). The Harding Administration was known for its corruption. There was not a more glaring example of this than the Teapot Dome Scandal which forever placed a blanket of suspicion over Harding’s Presidency.

The years following World War I saw an increase in political corruption and one of the most notorious scandals in presidential history.  The Teapot Dome Scandal began in 1921, right at the beginning of the Harding Presidency. President Harding was preceded by President Wilson (1913-1921) who was known for his honesty and straightforward approach to problems. But he has been stricken with a crippling stroke and was rendered almost useless during the last two years of his presidency. President Harding was a well liked and charismatic individual in American history but such ability was overshadowed by his dealings in soft money. The Teapot Dome Scandal was chief among such dealings.

Teapot Dome in Natrona County, Wyoming was an oil field located on public land reserved for the emergency use by the US navy only when regular oil supplies had been diminished.  Origins of the scandal went back to the growth of the federal conservation policy in the presidencies of Theodore Roosevelt, William Taft and Woodrow Wilson, specifically to the creation of naval petroleum reserves in Wyoming and California. These reserves were parts of public land in which it was intended that oil should be kept in its natural reservoirs. Many politicians and private oil interests had opposed the restrictions placed on the oil fields, claiming that the reserves were unnecessary and that American oil companies could provide for the navy instead. One of the public officials in Congress that was most against the reserves was Senator Albert B. Fall, a Republican from New Mexico. A political alliance had helped him get into Congress and along with the political friends that he made during his rise to power, helped to convince President Harding to appoint Senator Fall as United States Secretary of the Interior shortly after Harding took the oath of office in March of 1921.

In 1922, the reserves were still under the jurisdiction of Edwin Denby, the Secretary of the Navy. Senator Fall convinces Denby to give jurisdiction over the reserves to the Dept. of the Interior.  Fall then legally leased the rights to the oil to Harry Sinclair; head of Sinclair Oil without competitive bidding. Senator Fall also did the same thing in Elk Hills, California to the head of the Pan American Petroleum in exchange for personal loans at no interest. In exchange, Fall received gifts that exceeded $400,000. However, the selling of these rights was legal under the general Leasing Act of 1920.  On June 4^th, 1920, Congress passed a bill that stated that the Secretary of the Navy would have the power “to conserve, develop, use and operate the same in his discretion, directly or by contract, lease, or otherwise, and to use, store, exchange, or sell the oil and gas products thereof, and those from all royalty oil from lands in the naval reserves, for the benefit of the United States.” (Commanger, 235)  It was the exchanging of money that was illegal. Senator Fall knew this and tried his best to keep the proceedings secret but his sudden and drastic improvement in his standard of living prompted speculation.

On April 12, 1922, the Wall Street Journal reported a secret arrangement in which Senator Fall had leaded the petroleum reserves to a private oil company without competitive bidding. Fall denied the claims but Democratic Senator John Kendrick introduced a resolution that would set in motion one of the most significant investigations in the history of Congress. Senator Robert Lafollette arranged for the investigation to start, believing that his fellow senator was innocent. However, once the evidence presented itself, he quickly recognized that not everything was as it first appeared to be. Lafollette stated in the hearings: “There exists no emergency or necessity which would warrant the opening of the naval reserves at this time for exploitation in order that the Navy might be supplied with the various grades of oil required by it, there being already above ground and in storage in the United States the greatest amount of oil that has been in storage in the history of all times.” (Johnson, 45)

The investigation continued for the next two years as the Committee continued to find little to no evidence of wrong doing.  The leases were legal under the Leasing Act of 1920 and the oil fields appeared to be legit. It seemed that Senator Fall was in the clear. However, the dramatic increase in the personal income of Senator Fall still seemed to irk some members of the committee.  Senator Fall had taken many pains to cover up the trail that his $400,000 in bribes left. And the committee was ready to declare their findings and proclaim fall innocent. However, towards the end of the investigation, Montana Democrat Thomas Walsh uncovered a piece of evidence that turned out to be very damaging. Fall had forgotten to cover up Doheny’s loan to Fall of $100,000. The findings led to a series of civil and criminal suits related to the scandal throughout the 1920’s. In 1927, The Supreme Court ruled that the oil leases has been corruptly obtained and invalidated the Elk Hills and teapot Dome leases that same year. The navy regained control of the teapot Dome and the Elk Hills reserves as a result of the court’s decision Walsh made a name for himself as a symbol for the fight against government corruption and Senator Fall was found guilty of bribery in 1929, fined $100,000 and sentenced to one year in prison, thus giving him the dubious honor of being the first member of a Presidential cabinet to go to prison. Doheny and Sinclair spent six months in prison for contempt of court and contempt of the U.S. Senate. Although the Secretary of the Navy, Edwin Denby has signed all the leases, he was cleared of all charges.

In the aftermath of the Teapot Dome scandal, it became an important issue in the 1924 election. And even though President Harding died before he could become fully aware of the scandal, his administration was given the blame for this and History still regards the Harding administration as one of the most corrupt in American history. The scandal was advantageous for Calvin Coolidge. President Coolidge, along with his campaign slogan: “Keep Cool with Coolidge”, handled the problem very quietly and the administration avoided damage to his reputation. “I feel the public is entitled to know that in the conduct of such action no one is shielded for any party, political or other reason. As I understand, men are involved who belong to both political parties, and having been advised by the Department of Justice that it is in accord with the former precedents, I propose to employ special counsel of high rank drawn from both political parties to bring such action for the enforcement of the law.  (Commanger, 237)  Seen as extremely virtuous and above any such repeat of dealing in any sorted dealings was elected President in 1925.

The attention on the scandal made it a symbol of government corruption in America not seen on that scale since the Grant Administration. The Teapot Dome Scandal revealed the problem of natural resource scarcity and the need to provide reserves against the future depletion of resources in a time of emergency.

WORKS CITED

Commanger, H.S. (1948) Documents of American History: The Teapot Dome New York: Appleton-Century-Crofts, Inc.

Johnson, S. ( 1999) The Harding Administration. Los Angeles: Century Press.

Sturgeon, T. (1954) Teapot Dome Scandal. (Volume. 8, pp.952-954).Chicago, IL: World Book