Teapot Dome Scandal

If you ask people to name famous political scandals in the United States, they might say Watergate or the Iran-Contra Affair, but one of the biggest scandals in the nation’s history came about in the 1920’s over a piece of federal land in northern Wyoming. The Teapot Dome scandal took its name from a small rock formation that, with a generous eye and an active imagination, vaguely resembled a teapot. It was what was under the rock formation that really interested people, however, and led to shady deals, a protracted senate investigation, and did major damage to the reputation of the Harding administration.

In the early 20th century, the United States Navy began laying the groundwork to switch its vessels from coal power to oil power. This had a number of advantages, but there were a few concerns. People were not sure just how great the U.S. supply of oil was and what would happen if it ran out. In order to alleviate those fears, several plots of land owned by the federal government, that were believed to contain lots of oil, were set aside in 1915 for use as an emergency reserve. Two areas in California were set aside for the navy, along with the Teapot Dome in Wyoming.

An article describing President Wilson's creation of a naval oil reserve in Wyoming, where Teapot Dome was.
“New Oil Reserve”, Detroit Times, 5/6/1915
An article about how the Secretary of the Navy was stressing the importance of keeping the new oil reserves away from private interest
“Maintain Legal Rights on Oil Lands”, Rogue River Courier, 2/9/1916

When Warren G. Harding became president in 1921, he appointed Senator Albert Fall as secretary of the interior. Acting on Fall’s advice, Harding also transferred control of the emergency reserves from the Navy to the department of the interior. Fall swiftly leased all three of these sites to several different oil companies in a secret and non-competitive process. These companies, owned by Fall’s personal friends – Harry Sinclair and Edward Doheny – reaped enormous profits from Teapot Dome and had to fulfill only minimal obligations for storage and pipeline construction.

Fall was very well compensated for these deals, and it was the gifts and “loans” made to him that attracted attention from some senators. One newspaper, the Denver Post, caught wind of the deal and began writing about it, but promptly fell silent after a large bribe from Sinclair. When another oilman started drilling near Teapot Dome, Fall pressed on the Navy to intervene, and eventually pressured them into sending several marines to stop the drilling. The news about the non-competitive leases got out despite Fall’s best efforts, however, and several senators demanded that Harding cancel the leases, which he refused to do.

A headline from the Cordova Daily Times about the dispatch of marines to clear the rival oilmen from Teapot Dome
“Tempest Boiling Teapot Dome Naval Oil Reserve”, Cordova Daily Times, 7/31/1922
An article detailing testimony from owners of the Denver Post before the Senate Committee investigating Teapot Dome, where they revealed they were let in on the leases after they had discovered the scandal
“Got $250,000 in Sinclair Oil Deal”, Alaska Daily Empire, 2/19/1924

After Harding’s death, incoming president Calvin Coolidge supported the investigation of Fall’s deal and a senate committee was formed to look into the matter. Testimony from Fall and Doheny made headlines in papers around the country.

An article about Fall being recalled to testify to Congress about the money he received
“Fall is Recalled to Tell Where he Obtained $100,000”, Evening Star, 1/22/1924
Political cartoon showing a serpent labeled "Oil Lease Scandal" wrapping itself around a donkey, elephant, and Uncle Sam as they struggle to free themselves.
This political cartoon from Clifford Berryman in the Evening Star parodies the famous Greek statue “Laocoon and his Sons”, and shows the extent to which the oil scandal was strangling and engulfing the government and political parties. Evening Star, 2/5/1924

Harry Sinclair refused to answer congressional subpoenas and argued his personal business was not something Congress could investigate. Sinclair’s case was taken all the way to the Supreme Court, where the Court established a major precedent in deciding that Congress was within its rights to investigate and compel testimony from people when it was exercising a legislative function. Neither Sinclair nor Doheny were convicted of bribery, although Sinclair was found guilty of contempt of Congress as well as jury-tampering. Sinclair’s first trial was declared a mistrial after he hired private investigators to follow all of the jurors.

Article explaining that Harry Sinclair is to be arraigned the following week on charges of refusing to answer congressional probe.
“Sinclair to Face Contempt Charge”, Evening Star, 1/9/1927

The committee found evidence of Fall receiving gifts totaling around $400,000. Fall defended his actions by saying that he knew he could not get better deals than the ones he had been offered by Sinclair and Doheny, and that their loans and gifts to him had been made out of their long friendship and were unrelated to the leases. Fall’s defense didn’t convince anyone; he was convicted and sentenced to a year in prison and ordered to pay a $100,000 fine for accepting bribes. The oil leases were pulled by the Supreme Court in 1927 and the sites were not touched again until the 1970s, when the energy crisis compelled the government to open them up again – this time in a competitive bidding process.  

An article saying that the Supreme Court has declared the oil Leases to E.L. Doheny were obtained fraudulently and confirmed a lower-court decision to cancel the contracts and leases.
“Oil Leases to Doheny, Fraud, Declares Court”, Daily Alaska Empire, 2/28/1927
A photo showing Sinclair exiting a car as he makes his way to district jail. An accompanying article details his protracted legal fight over 2 years to fight the contempt charge.
“Millionaire Sinclair Enters District Jail”, Evening Star, 5/7/1929

Harding, whose administration had already seen multiple scandals before Teapot Dome, had his involvement called into question. Fall had leased the oil sites to private businessmen, but Harding had approved Fall’s plan. Harding hesitated to send marines to Teapot Dome, but did not stop Fall from doing so, and Harding refused to cancel the leases when pressed by senators. It’s unclear what Harding explicitly knew about; a “hypothetical” question he posed to one cabinet member in 1923 about whether it was better to reveal a great scandal in the administration or hide it suggests he was aware of the corrupt nature of Fall’s activities. Harding himself had also been planning a lengthy round-the-world trip with several friends and his family for his post-presidency days, on a luxury yacht to be borrowed from Harry Sinclair. Ultimately Harding’s death prevented him from ever answering too many questions about Fall’s deals, and some speculate might have saved him from impeachment.

Written by Christopher Russell

Edited by Anastasia Tarmann

Sources:

Harris, Carolynne, “Teapot Dome, the U.S. Marines and a President’s Reputation”, 3/25/2016. Wyoming State Historical Society, https://www.wyohistory.org/encyclopedia/teapot-dome-us-marines-and-presidents-reputation.

“The Teapot Dome Scandal”, U.S. Capitol visitor center, https://www.visitthecapitol.gov/exhibitions/congress-investigates-part-2/teapot-dome-scandal.

History.com editors, “Teapot Dome Scandal”, 9/12/2017. History.com, https://www.history.com/topics/roaring-twenties/teapot-dome-scandal

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