The Teapot Dome Scandal refers to one of the most important corruption scandals in the United States, one which remained in public consciousness as a turning point in American political history and became one of the huge crises of the 1920s (Roth, 2011 ). It involves a bribery scandal developed around the Teapot Dome oil reserves in Wyoming. These oil reserves had been granted to the Navy for emergency use in 1915 and in consequence, were controlled by the Naval Department. In 1920, Congress passed legislation that would allow leasing of public mineral lands, including the Teapot Dome oil reserve. The control of these lands passed to the Secretary of the Interior, Albert Fall, who subsequently gave the contract to the head of Mammoth Oil, Harry Sinclair, in exchange for a large amount of money. The affair soon became public, and major trials followed.
President Harding selected Albert Fall for the function of Secretary of Interior, because he believed in him. According to McDonald and Hughes, Harding believed him to be “forceful, effective and tough” (p.90). As soon as he took office, he began the process of leasing mineral public lands, because he believed, as Macdonald and Hughes (2010) explained, in making use of the country’s natural resources. Moreover, as McCartney (2008) explained, Fall had been notified that the Navy was having problems with draining its oil reserves. The agreement to lease Teapot Dome to Mammoth Oil was signed in the spring of 1922. While the agreement itself was not illegal, Fall collected an estimated $400,000 from Sinclair and from another oil company owner, Edward Doheny, in gifts and loans. His act was determined by his precarious financial situation, in a time when the economic boom made everyone yearn for the best quality money could buy.
The affair transformed into a public scandal when the competitors of Sinclair and Doheny began to question the leasing, asking why the Secretary of the Interior was allowed to dispose of the Naval reserve lands (Macdonald &Hughes, 2010). While Sinclair covered is traces very carefully, he could not hide his sudden prosperity and so, he became a suspect, despite de president’s support. Senator Thomas Walsh was appointed to investigate the leasing and he had to conduct a very thorough investigation in order to come up with evidence of the fraud. Fall had to resign in 1923 under pressure from the Senate, but the investigation continued.
Walsh soon after found evidence of an interest-free loan that Doheny had granted to Fall, and this was the beginning of the end for him. The trials that followed dragged on for years. Fall, Doheny and Sinclair were accused of bribery and fraud. Based mainly on evidence obtained from the Public Lands and Surveys Committee hearings (McCartney, 2008), Doheny was accused of offering Fall an $ 100,000 bribe in exchange for the contract. Doheny and Sinclair were forced to return the properties to the United States government in 1927. In 1929, Fall was convicted to a year in prison and a $100,000 fine, thus becoming as the first cabinet member to go to prison for corruption issues (Macdonald & Hughes, 2010). Sinclair was also convicted to 6 months of prison for his lack of cooperation. However, Doheny was acquitted although it had been acknowledged that he had offered money to Fall in exchange for the leasing contract.
The Teapot Dome scandal was one of the most important financial scandals in Washington, particularly because President Harding’s own blame cannot be denied. He appointed Fall, and subsequently assisted passively to the entire leasing process, although he had the ultimate responsibility to take action as the scandal was unveiling. Fall’s actions cannot be separated from the environment in which they took place, an environment which silently allowed such dealings to occur. Sadly however, his blame, and the general context in which the affair took placed are often forgotten, and President Harding emerges and the most culpable figure of the scandal.
- McCartney, L. (2008). The Teapot Dome scandal: how big oil bought the Harding White House and tried to steal the country. New York: Random House.
- MacDonald, S. and Hughes, J. (2010). Separating fools from their money: a history of American financial scandals. New Brunswick, N.J. :Transaction Publishers.
- Roth, M. (2011). Crime and punishment: a history of the criminal justice system. Belmont, CA: Wadsworth Cengage Learning.