The Teapot Dome Scandal

Podcast Transcript

In the early 1920s, what was considered to be the largest political scandal in American history became public.

Despite the enormous amount of attention given to it in the press at the time, both the scandal and the president that was attached to it, have both been largely forgotten.

Yet, the legacy of this scandal can still be found in the laws today, as well as in how the media and the public respond to political scandals.

Learn more about the Teapot Dome Scandal and how it affected the administration of President Warren G. Harding on this episode of Everything Everywhere Daily.

If you are not from the United States, there is a good chance you may never have even heard of President Warren Harding.

If you are from the United States…..there is still a good chance you may never have even heard of President Warren Harding.

Warren Harding and the Teapot Dome Scandal is one of those things which is mentioned in American history courses, and most people recognize the names but really aren’t sure what the scandal was about.

Entering the election of 1920, Americans were looking for a change from the internationalism of Woodrow Wilson, who had gotten the country involved in the First World War.

Harding wasn’t a standout politician. He was initially a newspaper publisher from Ohio. In 1899 he began his political career by winning various state-level offices in Ohio before being elected a United States senator in 1914.

Harding was an outgoing guy. He liked to give speeches, play cards, drink whiskey, and listen to brass bands. Going into the Republican convention in 1920, he was not a leading candidate for president.

The overwhelming favorite for the Republicans going into 1920 was former president Teddy Roosevelt, but he died in 1919. Other top candidates included General Leonard Wood, Illinois Governor Frank Lowden, and California Senator Hiram Johnson. Second-tier candidates included Herbert Hoover (whose career prior to becoming president is really worth an episode of its own), Massachusetts Governor Calvin Coolidge, and General John J. Pershing.

Despite his poor performance in the primaries, Harding emerged as a compromise candidate, if for no other reason than no one hated him. If you have ever heard the metaphor of a “smoke-filled room” in determining presidential candidates, that was popularized from the Republican’s 1920 convention where the party elders settled on Harding after eight ballots.

What most people did not know at the time was that the oil industry heavily influenced the convention. The Chairman of the convention was Will Hays, who was an attorney who worked for the oil industry. Most importantly, the convention was funded by Harry Ford Sinclair of the Sinclair Consolidated Oil Company to the tune of 3 million dollars.

The oil industry got behind Harding because they felt he could be easily manipulated to do their bidding.

Harding defeated the Democratic nominee James Cox in a landslide. Ironically enough, Cox was also a newspaper publisher from Ohio. The vice presidential candidates for each party ended up being more significant to history than the presidential candidates were: Calvin Coolidge and Franklin Roosevelt.

When Harding took office in 1921, his cabinet appointments were a mixed bag of talent and cronyism. The relevant appointment for this story was the Secretary of the Interior, Albert Fall, who was the senator from the State of New Mexico.

Fall was staunchly against the conservation movement, which had been championed by another Republican, Teddy Roosevelt. He was also a big supporter of the oil industry as well as being a rancher and an attorney who represented timber and mining interests.

Here I need to shift the story to explain US government policy regarding oil and the US navy.

When naval ships became mechanized, they initially ran on coal. However, in the early 20th century, modern naval ships began to run on oil.

The Navy became concerned that in the event of a prolonged war, they might not have access to oil, which would cripple the fleet. So, during the William Taft administration, the United States set aside federal land with oil deposits as naval oil reserves.

In particular, three oil fields were part of the naval oil reserves: Elk Hills and Buena Vista Hills in California, and Teapot Dome, Wyoming.

Teapot Dome got its name from a natural sandstone formation known as Teapot Rock which was nearby. The rock looked like a teapot. However, the handle broke off in 1930, and the spout broke off in 1962. The rock is still there today, but it no longer looks like a teapot.

The events which initiated the scandal began when Albert Fall convinced Harding to transfer control of the naval oil fields from the Department of the Navy to the Department of the Interior.

The act of transferring control from one department to another wasn’t in and of itself a scandal. The land was considered a reserve, so there wouldn’t be any active oil drilling unless there was a war. Management of the surface would be a natural job for the Department of the Interior.

However, once oversight of the land was transferred, Fall began secret negotiations with his friends in the oil industry. In 1922, without any competitive bidding and without any public announcement, Fall granted drilling rights to the oil reserve land to two of his friends in the oil industry.

The California properties were leased to the Pan-American Petroleum Company, owned by Edward Doheny, a donor to the Harding Campaign.

The Teapot Dome site was leased to the Mammoth Oil Company, which was owned by none other than Harry Ford Sinclair, the same man who spent $3 million dollars on the Republican convention and had donated $1 million to the Harding campaign.

The value of the oil in the ground at the three sites had a combined value at the time of hundreds of millions of dollars, and all the companies had to do in exchange was a few minor construction projects for the federal government.

The deal didn’t remain secret for long.

Oilmen in Wyoming began to notice Sinclaire Oil Trucks moving equipment to the Teapot Dome site. They brought this to the attention of the media, and the Wall Street Journal broke the story on April 14, 1922.

The next day, Wyoming Democratic Senator John Kendrick introduced a resolution to open a congressional investigation into the dealings.

This began a series of congressional investigations. The primary and longest investigation was conducted by the Democrat Senator from Montana, Thomas J. Walsh.

Fall and Sinclair kept evading congressional investigators, and documents keep going missing.

Fall ended up resigning as Secretary of the Interior in January 1923 to retire to his ranch in New Mexico. However, that didn’t stop the investigations.

As evidence started piling up, the stress and low approval numbers from the scandal began to get to President Harding. In June 1923, he set out on a trip across the United States which he called the “Voyage of Understanding.” He was going to travel across the country by train, sail to Alaska, and then back down the west coast by ship, visiting Mexico, the Panama Canal, and Puerto Rico.

Harding became the first sitting president to visit both Alaska and, believe it or not, Canada.

By the end of July, he began to develop health problems. In San Francisco, on July 29, he became bedridden in his hotel, and on August 2, he found the ultimate get-out-of-jail-free card from any political scandal…..he died.

Under the new President Calvin Coolidge, two special prosecutors from each party took over the Senate investigation.

What they discovered was the real scandal.

Secretary Fall had received a $100,000 interest-free load from Edward Doheny, the oil baron who was awarded the rights to the California oil fields. That would be worth about $1.4 million dollars today.

Dohney’s son delivered the loan money in a black bag filled with cash.

Likewise, Henry Ford Sinclair gave a large herd of cattle to Fall and also gave Fall’s son-in-law $300,000 worth of cash and bonds.

In 1929, Albert Fall was convicted of accepting bribes from Edward Doheny, becoming the first US cabinet secretary convicted for acts taken while he was in office. He was sentenced to one year in prison.

Oddly enough, in a subsequent trial, Doheny was acquitted of bribing Falls.

This wasn’t the end of the affair.

In 1929, Edward Doheny’s son, who delivered the money to Falls in a bag, was killed by his friend who helped him deliver it in a murder-suicide. Supposedly the friend feared going to jail over his involvement.

There were also several cases that made it to the supreme court.

In 1927, the Supreme Court invalidated the original contracts made by Falls, reverting the land back to the Federal Government.

The next case had to do with a parallel investigation by Congress into the Attorney General and friend of Harding from Ohio, Harry Daugherty. Congress was investigating why the justice department didn’t investigate the Teapot Dome affair. As part of the investigation, they called Daugherty’s brother, Mally Daugherty, to testify, and he refused.

He was arrested and convicted of contempt of Congress. The case was taken to the Supreme Court in the case of McGrain v. Daugherty, and in 1927, the Court ruled that Congress did have the power to compel testimony.

Harry Sinclair went to trial for bribery in 1927, and the case was ordered a mistrial when it was discovered that Sinclair had hired detectives to follow members of the jury.

He was convicted of contempt of congress and jury tampering and sentenced to six months in jail. His appeal also went to the Supreme Court, which upheld his conviction and the ability of Congress to conduct investigations.

The Teapot Dome Scandal is really all that most people know about the Warren Harding administration. He was president for a little over two years, and the scandal overshadowed everything.

Despite that, he was still reasonably popular when he died, given that the economy was doing well. What really tarnished his legacy was his mistress, Nan Britton, coming forward in 1927 and announcing that her daughter Elizabeth, born in 1919, was the illegitimate child of Harding.

This revelation sparked rumors for years that Mrs. Harding actually had President Harding poisoned.

Harding almost certainly was unaware of the under-the-table dealings of Albert Fall. However, he created an environment where such things could have happened. In fact, his widow Florence later said that after his term in office was done, their plan was to do an extended cruise on a yacht owned by……Henry Ford Sinclare.

As for the Teapot Dome property itself, it remained idle when it returned to government hands for 49 years and went back into production in 1976. Over the next 39 years, 22 million barrels were extracted, worth over half a billion dollars.

In 2015, the Department of Energy sold the property for $45 million dollars to the Stranded Oil Resources Corp.

This time, the sale was a fully transparent auction with competitive bidding.

The Executive Producer of Everything Everywhere Daily is Charles Daniel.

The associate producers are Thor Thomsen and Peter Bennett.

I have some boostagrams to share with you today. First, I want to give a shoutout to Petar and Joelw, who have been sending boosts for almost every episode. It is quite appreciated. Petar remains the MVP of the boostgram scene by a wide margin, sending 2,222 sats each and every episode.

I also received 1000 sats from HeatherFaye on the Fountain App who said:

Hi Gary! I’m halfway to the Completionist Club! I’ll wait until I’m done to recommend topics since you’ve probably covered some of them already. To show my appreciation, here are most of the sats I’ve earned so far. :)

Thanks, Heather! When you achieve completion, we will be there to welcome you with open arms.

I also got a 5000 sat boost from Mtbracer on the episode about the city of Troy. They wrote:

I love the archeological episodes. another great episode, as always. have you heard of the Tell Qaramel site? it’s supposed to be older than Göbekli Tepe and is a settlement from before they had domesticated animals and agriculture. I’d love to hear your take on it. Your reply to that review is the best! the 5000 Sats are to thank you, it made me smile!

Thanks, mtbracer! There are plenty of archeology-related episodes out there which can be the subject for future shows.

As for Tell Qaramel, I have heard of it but it hasn’t gotten nearly as much attention as Göbekli Tepe. It is something that I’ll look into a bit more.

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