The Teapot Dome Scandal

THE TEAPOT DOME SCANDAL

Administration. Late in his presidency Warren G. Harding commented to journalist William Allen White that his enemies were not a problem, "but my damned friends … they're the ones that keep me walking the floor nights!" During the early 1920s Harding's cronies were involved in one scandal after another. Attorney General Harry Daugherty was caught accepting bribes from former clients to protect them from federal prosecution, and the Veterans' Bureau director, Charles Forbes, was jailed for fraud. The most sensational case of public corruption during the Harding administration was the Teapot Dome scandal, Contemporaries believed that this scandal, which involved public officials making secret deals for personal profit at public expense, epitomized politics of the 1920s. Many historians have blamed the flurry of public corruption in the 1920s on the excessive privileges granted to business by its friends in government.

Conservation Struggle

What eventually mushroomed into a scandal of national proportion began as a conservation policy struggle within the Republican Party. During the prewar Progressive Era, reformers and conservationists, fearing the reduction of domestic oil supplies, tightened federal oil-leasing policies. Republican president William Howard Taft created two naval petroleum reserves in California exclusively for government use, and in 1915 President Woodrow Wilson created a third reserve—Teapot Dome in Wyoming. As soon as these reserves were created, debate began over the possibility of leasing these reserves to private oil companies. Business interests advocated public access to the reserves, while conservationists opposed any private leases.

Albert Fall's Machinations

While businessmen and conservationists both had political allies, Harding tipped the balance with the appointment of Sen. Albert B. Fall of New Mexico, an outspoken anticonservationist, as secretary of the interior. In 1921, with the tacit approval of Secretary of the Navy Edwin Denby, Fall maneuvered to have Harding issue an executive order transferring control of the naval oil reserves from the Navy Department to the Interior Department. Fall granted drilling rights in the California reserves to Edward L. Doheny, owner of Pan-American Petroleum and Transport Company, and that same year Fall leased the Teapot Dome reserve to Harry Sinclair of Mammoth Oil Company. Within weeks Sinclair also had access to Elk Hills, one of the California reserves.

Conservation Retaliation

Although he had no hard evidence, Harry A. Slattery, a staunch conservationist, heard rumors of Fall's covert manipulations and began working to expose him, soliciting the assistance of Sen. Robert La Follette of Wisconsin, a longtime conservationist who launched a Senate investigation. Chaired by Democrat Thomas J. Walsh of Montana, the Senate Committee on Public Lands and Surveys reluctantly "studied" the situation privately for sixteen months before public hearings opened in October 1923. By then Fall had resigned as interior secretary and Harding had died, diminishing the urgency of the investigation.

The Scandal Breaks

For two months the fairly routine Senate investigation attracted little attention. But Fall's conspicuous personal spending led to inquiries that forced him to admit that he had borrowed $100,000 dollars from an unnamed source. This admission attracted national attention to the Teapot Dome investigation. Next Doheny admitted that he was the "source" of the "loan," which he defended as assistance to a longtime friend.

A Media Frenzy

From January to March 1924 the Teapot Dome hearings were a national sensation. At the Senate hearings politicians hurled charges and counter-charges. Since it was an election year, Democrats seldom missed an opportunity to exploit the Republican scandal. Journalists enjoyed the fallout, covering every possible angle and extrapolating broadly. Eventually Attorney General Daugherty and Secretary of the Navy Denby resigned under intense criticism. As the investigation continued into the spring, Democrats cast wider and wider nets to snag more Republicans, attempting with little success to link President Coolidge with the scandal simply on the grounds of guilt by association.

Ironic Consequences

Remarkably, the Teapot Dome scandal had little effect on the Republicans, who managed to taint their fiercest Democratic rival, William McAdoo, one of Doheny's legal advisers, with fallout from the scandal. Revelations of Doheny's role in the scandal tarnished McAdoo by association. Coolidge's image as an honest, frugal New Englander committed to small government helped the Republicans to avoid the worst of the backlash from the scandal, as did the president's willingness to press the investigation. In the 1924 election voters refused to punish Coolidge for corruption in Harding's administration.

Final Fallout

State trials in California and Wyoming between 1924 and 1929 divulged the passing of more money from oil barons to Fall and the Republican National Committee. Fall, who reportedly received at least $409,000 from Sinclair and Doheny, was convicted of accepting bribes in 1929 and became the first cabinet officer in the nation's history to serve a prison sentence. Sinclair and Doheny were acquitted of paying bribes. The Supreme Court eventually overturned Fall's oil-leasing policy and nullified the Sinclair and Doheny leases. In December 1924 Coolidge established a Federal Oil Conservation Board to promote the preservation of the government oil supply, and the next Republican president, Herbert Hoover, announced "complete conservation of government oil in this administration."

Source:

Burl Noggle, Teapot Dome: Oil and Politics in the 1920s (Baton Rouge: Louisiana State University Press, 1962).