What Was the Teapot Dome Scandal?

(Last Updated On: June 11, 2019)
What Was the Teapot Dome Scandal?

What is with American presidents and oil-related scandals? Many people think this type of thing is merely a modern trend, but, in fact, the contentious handling of oil reserves dates back much further. The Teapot Dome Scandal of the 1920s featured a full complement of ingredients: corporate greed, political corruption, environmental indifference, and one of America’s most forgotten presidents, Warren G. Harding. Throw bribes, bootlegging, and even a murder-suicide into the mix, and you have the complete recipe for the Teapot Dome Scandal.

The Pride Before Albert Fall

Named after a teapot-shaped hill in Wyoming known as the Teapot Dome, this particular scandal involved oil reserves at two different locations in California – Elk Hills and Buena Vista Hills. As the navy had been steadily converting ships from coal to oil throughout the early part of the 20th century, President Taft’s administration had set aside these considerable reserves for naval use.

However, Warren G. Harding came out of nowhere to win the 1920 election, thanks in large part to the help and funding of his many oil tycoon friends. Despite these potential conflicts, he campaigned on a platform of balance between economic development and environmental conservation, a very contentious issue at the time. In 1921, soon after taking over, he appointed his good friend, Senator Albert Fall, to be Secretary of the Interior. Fall was a well-known rancher, lawyer, and miner who clearly leaned toward the side of development, and it didn’t take long for him to convince Harding to transfer control of the oil reserves from the Navy to the Department of the Interior.

So What Did Fall Do?

In 1922, Fall gave exclusive drilling leases for the Teapot Dome site to Mammoth Oil Company (later Sinclair Consolidated) and the California reserves to Pan-American Petroleum Company. By somewhat incredible coincidence, two close friends of Fall owned both these companies. Fall did not announce the leases publicly and awarded them without considering any competing bids, despite the fact that these oil reserves contained an estimated hundreds of millions of dollars worth of “black gold.” When the story finally broke in April of that year (due to Mammoth trucks being spotted at the Teapot Dome site), it caused quite a stir. In fact, the very day after an exposé by the Wall Street Journal, Wyoming Senator John Kendrick put forward a resolution to investigate the matter.

Rather suspiciously, in January of 1923, less than two years after his appointment as Secretary of the Interior, Fall resigned and moved to a beautiful new ranch in New Mexico. He would use this as a base for his new job, handling extremely profitable oil deals in Mexico and Russia on behalf of his friends at Mammoth and Pan-American, Harry Sinclair and Edward Doheny, respectively.

Harding, meanwhile, was under considerable pressure due to allegations of corruption related to both the Teapot Dome incident and multiple incidents involving the “The Ohio Gang,” as his cabinet was known. In August of 1923, he died abruptly of either a stroke or a heart attack, depending on whom you ask.

Have you ever tried to name former presidents by their canine descriptions?

What Was the Teapot Dome Scandal?

The new president, Calvin Coolidge, immediately ramped up the investigation, which soon determined that Fall had received a $100,000 “interest-free loan” in a black bag delivered by Doheny’s son and an accomplice. Similarly, they learned that Sinclair had gifted Fall’s son-in-law $300,000 in cash and Liberty bonds and that the oilman had also supplied Fall with a large number of livestock—for what good is a ranch without a herd of ill-gotten cattle?

The investigation dragged on for years, but finally, in 1929, Fall was convicted of accepting bribes, fined $100,000 and sentenced to one year in prison. While Doheny was never convicted of bribery, his son, Ned, was murdered by his accomplice, Hugh Plunkett, in a mysterious murder-suicide at the Dohenys’ Greystone Mansion. Sinclair, meanwhile, fought his way all the way to the Supreme Court before eventually being sentenced to 6 months in prison for contempt of Congress and jury tampering.

Although Fall ended up serving nine months of his one-year sentence, he never did pay his fine. Despite his former affluence, he was, by that time, completely broke. Doheny had recently even foreclosed on Fall’s ranch in New Mexico.

The Teapot Dome Scandal’s Legacy

The greatest political scandal of its time, the Teapot Dome affair resulted in the first time a US cabinet official served jail time for a felony offence committed while they were in office. It remained the country’s biggest political scandal until Richard Nixon came along and blew Teapot Dome out of the water with his outrageous Watergate scandal of the early ‘70s.

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