May 12, 2025 • 29 mins
The glittering facade of America's Roaring Twenties masked a political earthquake brewing beneath. After years of war and progressive reforms, President Warren G. Harding swept into office promising a "return to normalcy" that resonated deeply with an exhausted nation. But what began as a comforting retreat into simpler times would culminate in what became the benchmark for political corruption until Watergate.
At its heart, the Teapot Dome Scandal revolves around a betrayal of public trust so brazen it still shocks today. When Harding transferred control of naval oil reserves from military oversight to his Interior Department, he unknowingly handed the keys to the kingdom to his poker buddy, Secretary Albert Fall. These weren't ordinary assets - they were strategic oil fields set aside specifically for national defense as the Navy transitioned from coal to oil power. Fall secretly negotiated sweetheart deals with oil tycoons Harry Sinclair and Edward Doheny, granting them exclusive drilling rights without competitive bidding. The price for this generosity? Approximately $404,000 in "loans" and gifts flowing directly into Fall's pockets - nearly $7 million in today's currency.
The scandal's exposure through dogged investigation by Senator Thomas Walsh revealed the dangers of the administration's "less government in business, more business in government" philosophy when applied without proper oversight. Despite attempts to obstruct justice - including jury tampering - the truth eventually emerged. The Supreme Court invalidated the fraudulent leases in 1927, and Fall became the first Cabinet member in American history to be imprisoned for crimes committed while in office. Yet justice remained uneven: the oil barons who paid the bribes largely escaped punishment, highlighting how wealth and influence could shield the powerful.
The Teapot Dome Scandal's legacy extends beyond its colorful name (derived from a Wyoming rock formation resembling a teapot). It demonstrates both the vulnerability of democratic institutions to corruption and their resilience in eventually holding power accountable. What happened when America tried to "return to normalcy" a century ago offers timeless lessons about vigilance, oversight, and the corrupting potential of unchecked power. How might today's political scandals look to future generations?
Takeaways:
- The Teapot Dome scandal exemplifies the profound risks associated with the concentration of power and resources within a governance framework devoid of sufficient oversight.
- President Harding's administration, marked by a disturbing propensity for cronyism, ultimately succumbed to the allure of corruption, as evidenced by the scandal's unfolding.
- The intricate dynamics of the Teapot Dome scandal reveal deep-seated issues of trust and accountability, which resonate through American political history to this day.
- The enduring legacy of the Teapot Dome scandal serves as a cautionary tale about the intersection of corporate influence and governmental integrity, emphasizing the necessity for vigilance.
- While the scandal exposed alarming levels of corruption, it also underscored the resilience of democratic institutions in pursuing accountability and justice.
- The multifaceted implications of the Teapot Dome scandal continue to shape public perception of government ethics and the role of corporate interests in political decision-making.
Companies mentioned in this episode:
- Herbert Hoover
- Andrew Mellon
- Harry F. Sinclair
- Mammoth Oil Company
- Edward Doheny...
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(01:27):
Picture America, 1921. TheGreat War is over. The doughboys
are at home. And a wave ofrelief washes over the nation. Automobiles
are crowding city streets.Jazz music spills from the speakeasies,
defying Prohibition. And thestock market seems poised for an
endless climb up. It's thedawn of the Roaring Twenties, an
(01:47):
era of unprecedentedprosperity and cultural dynamism.
Yet beneath the glitteringsurface, tensions simmered. The lingering
trauma of war, the anxietiesof rapid social change, the red scares
fading embers and. And in thehalls of power, a different kind
of storm was brewing.
Welcome to history's greatestcrimes. I'm Alana.
(02:09):
And I'm Michael. Today wedelve into a scandal that rocked
the very foundations ofAmerican government. A tale of greed,
betrayal and abuse of publictrust. Set against the backdrop of
this Jazz Age paradox, ascandal so immense it will become
the benchmark for politicalcorruption for decades. This was
the Teapot Dome scandal.
(02:31):
It all began with a promise, ayearning for simpler times. After
years of upheaval in the 1920election, Senator Warren G. Harding
of Ohio captured the nation'smood with a simple, powerful slogan.
Return to normalcy. Hardingarticulated this yearning in a speech
that resonated deeply with thepublic. Exhausted by the strains
(02:54):
of war, the fight over theLeague of Nations, and the perceived
excesses of Progressive era reforms.
He declared, quote, america'spresent need is not heroics, but
healing, not nostrums, butnormalcy, not revolution, but restoration.
Not agitation, but adjustment,not surgery, but serenity. Not the
(03:18):
dramatic, but thedispassionate. Not experiment, but
equipoise. Not submergence ininternationality, but sustainment
in. In triumphant nationality.
Now, in general, Hardingwasn't known for his deep, meaningful
speeches. In fact, one of hiscontemporaries described his speeches
(03:39):
as a quote, army of pompousphrases moving across the landscape
in search of an idea. End quote.
Burn.
Yeah. But during thepresidential campaign, Harding's
promise of normaly directlyled to his election as President
of the United States. Thatidea really struck a chord with the
(04:01):
American public.
Harding's administrationsignaled a sharp turn in American
governance. It marked adeliberate retreat from the activist
driven regulatory spirit ofthe Progressive era and a conscious
embrace of a pro businessagenda. Echoing the laissez faire
attitudes of the late 19thcentury, the guiding principle became,
(04:23):
as Harding himself, promise,quote, less government in business
and more business ingovernment, end quote. This philosophy
was embodied by his keycabinet appointments. Herbert Hoover
took over the helm at theDepartment of Commerce. You might
recognize Hoover as a future31st President of the United States.
But he was also a highlyefficient millionaire engineer known
(04:47):
for his post war reliefefforts at the Treasury. Andrew Mellon.
Yes. That Mellon, an immenselywealthy banker and industrialist,
brought his corporate mindsetdirectly into government, famously
stating, quote, the governmentis just a business and can and should
be run on business principles.End quote.
This pro business orientationquickly translated into policy. The
(05:11):
Harding administration pushedthrough the revenue act of 1921,
which significantly cut taxes,particularly for corporations and
wealthier individuals. Itestablished the first formal federal
budgeting process through theBudgeting and Accounting act of 1921,
creating the Bureau of theBudget. High protective tariffs aimed
(05:33):
at shielding Americanindustries were enacted first through
the Emergency Tariff act of1921, and then solidified with the
Forney McCumber Tariff of1922. Simultaneously, reflecting
a growing nativism, theadministration signed the Emergency
quota Act of 1921, imposingstrict limits on immigration. And
(05:56):
for many, especially in thebusiness community, it seemed prosperity
was indeed returning.
But this return to normalcywas not merely a passive drift towards
quieter times. It was anactive political and economic and
economic program designed tobenefit specific interests and reduce
government oversight. Thisvery environment, prioritizing business
(06:19):
deals and minimizingregulations in inadvertently created
fertile ground for corruption.President Harding himself, while
perhaps personally honest, wasknown for his loyalty to friends
and political allies, oftenappointing them to positions of power.
His administration becamenotorious for the, quote, ohio gang,
a group of cronies and pokerbuddies who saw government service
(06:42):
as an opportunity for personalenrichment. While the Harding administration
did achieve some notableforeign policy successes, its legacy
would ultimately be defined byscandal. And the most egregious of
these scandals centered on aresource deemed essential for the
nation's defense. Oil. Beforewe jump into the story, I do want
(07:18):
to take a moment to thank oursubscribers to History's Greatest
Crime, Smokey Brown andVivian. Thank you so much for your
support. Make sure that yousubscribe as well. Get access to
early episodes as well as thediscord that is going to come out
soon. So that way you can talkand ask questions of Elena and myself.
Now back to the show.
(07:39):
To understand the Teapot Domescandal, we need to understand the
critical role oil played forthe United States military in the
early 20th century. The Navyin particular was undergoing a massive
transformation.
Indeed, the era of coalpowered warships was rapidly drawing
to a close. Oil offeredundeniable strategic advantages.
(08:03):
It generated more power perpound. It burned cleaner, it vastly
simplified the process ofrefueling at sea, and it significantly
extended the operational rangeof naval vessels. Oil promised greater
naval freedom and flexibility.Britain's Royal Navy Recognizing
these benefits earlier, hadalready begun converting its fleet.
(08:25):
And the US Navy understoodthat keeping pace was crucial for
maintaining global sea power.The USS Texas, commissioned in 1914,
stands as a monument to thistransition. It was the last American
battleship built with coalfired boilers.
But this technological leapintroduced a new strategic concern.
(08:48):
While the United Statespossessed abundant domestic oil resources,
ensuring a guaranteed supplybecame a paramount national security
issue. The Navy couldn't riskbeing left powerless due to fuel
shortages, especially duringwartime or national emergencies when
commercial markets might bedisrupted or overwhelmed.
(09:10):
Precisely. And this foresightthen previously led President William
Howard Taft in 1912 towithdraw specific oil rich federal
lands in California frompublic settlement or private development.
These lands were designated asNaval Petroleum Reserves, set aside
exclusively for Navy's futurefuel needs.
(09:32):
Then a few Years later, in1915, President Woodrow Wilson added
an additional Naval PetroleumReserve, which was located in the
Teapot Dome field in Wyoming.The Teapot Dome Field was named for
its distinctive nearby rockformation. And the idea was that
it would remain largelyuntapped unless a national crisis
(09:55):
demanded its use. The originalintent was for the new oil reserves
in California and Wyoming toserve as a strategic asset, an emergency
stockpile held in the ground.It wasn't supposed to be for immediate
commercial exploitation.
For several years thesereserves were made under the jurisdiction
of the Navy Department,consistent with their purpose. But
(10:18):
in 1921, President Harding,swayed by his Secretary of the Interior,
made a pivotal and ultimatelydisastrous decision. On May 31, 1921,
Harding signed Executive Order 3474.
This Executive Ordertransferred administrative control
over these vital naval oilresources from the Department of
(10:40):
the Navy to the Department ofthe Interior. The individual who
prompted this transfer was theInterior Secretary himself, Albert
B. Fall. Albert Fall was aformer senator from New Mexico and
a member of Harding's innercircle of poker buddies. Fall also
persuaded the seeminglycompliant Secretary of the Navy,
(11:02):
Edwin Denby, to go along withthe proposal to shift the oil reserves
under Fall's control.
Looking at the bigger picture,the establishment of the reserves
in California and Wyoming byprevious Presidents Taft and Wilson
had represented a Progressiveera approach, prioritizing long term
national security and resourceconservation over immediate private
(11:26):
gain. However, the politicalwinds had shifted dramatically with
Harding's election in 1921.Harding and his efforts to return
to normalcy favored businessinterests and minimal government
interference. So Albert hall,the former Senator and poker buddy
of the President, saw anopportunity to exploit the untapped
(11:46):
resources of the Naval oil reserves.
The transfer of those oilreserves via Executive Order 3474
therefore wasn't a mereadministrative adjustment. It was
a fundamental policy shiftreflecting the ascendancy of private
interests over nationalsecurity concerns within the Harding
(12:06):
administration.
(12:27):
With the naval oil reservesunder his authority, Secretary Albert
Fauld didn't waste any time.He viewed the vast pools of oil beneath
Teapot Dome and the Californiareserves not as a strategic safeguard
for the Navy, but as a goldenopportunity. An opportunity for his
friends in the oil industry.And as it turns out, for himself.
(12:48):
His primary beneficiaries weretwo titans of the burgeoning American
oil industry. Harry F.Sinclair, the ambitious head of Mammoth
Oil Company, and EdwardDoheny, the founder of Pan American
Petroleum and TransportCompany. Both were powerful wealthy
men and both were personalfriends of Albert fall.
(13:11):
Throughout late 1921 and 1922,Albert Fall engaged in secret negotiations
with Donee and Sinclair. Theoutcome was swift and decisive. Fall
secretly granted Doney's PanAmerican Petroleum exclusive rights
to drill in the Californiareserves. Then on April 7, 1922,
he awarded Harry Sinclair'sMammoth Oil exclusive rights to the
(13:34):
entire Teapot Dome reserve inWyoming. Fall was so determined to
maintain secrecy, particularlyaround the Teapot Dome deal, that
he reportedly locked the leasecontract away in his desk drawer.
Yeah, that's not suspicious atall. Anyways, a critical element
of these deals was thecomplete absence of competitive bidding.
(13:57):
Granting such vast andvaluable public resources to private
companies without allowingothers to bid smelled of favoritism
and potential corruption. Thesecrecy surrounding the negotiations
only intensified thesesuspicions when the deals eventually
surfaced. Why operate in theshadows if everything was above board?
(14:18):
Right?
Of course. And the lease termsthemselves were exceptionally favorable
to the oil company execs,Sinclair and Doney. They gained control
over oil fields estimated tobe worth hundreds of millions of
dollars. Paying relatively lowroyalty rates to the government.
Albert Fall attempted tojustify the leases, especially the
(14:38):
Teapot Dome contract, byclaiming it was necessary to drill
immediately to prevent oilfrom being drained by adjacent private
wells. The so called drainageargument. However, the justification
was weak, particularly asthere was no pressing national emergency
that required tapping into theNavy strategic resour.
(14:58):
But the true depth of thescandal lay not just in the secretive
process or the generous terms.It lay in the quid pro quo. As Albert
Fall was finalizing thesesecret arrangements, his personal
financial situation underwenta remarkable transformation.
In November 1921, asnegotiations for the California Reserves
(15:20):
were underway, Edward Doney,the Pan American Petroleum founder,
provided Albert fall with$100,000. So called LO. This loan
was unsecured and crucially,interest free. That sounds suspicious.
Shortly thereafter, AlbertFall received additional gifts and
purported loans from Sinclair,the head of Mammoth Oil. Altogether,
(15:42):
fall received roughly$404,000, equivalent to nearly $7
million today. This moneyflowed into Albert Falls, New Mexico
cattle ranch and otherpersonal business ventures. So what
we can see here is that theseweren't friendly loans. They were
leaning way into the territoryof bribes.
That's a lot of moneyswitching hands. The process itself,
(16:04):
the secret negotiations, thelack of competitive bidding reflected
a profound disregard forpublic accountability. It exemplified
how the Hardingadministration's philosophy of running
government on businessprinciples could be twisted to prioritize
private deal making overtransparent governance. And this
(16:24):
was especially the case whenvaluable public assets were at stake.
The method was inherentlyscandalous, creating the perfect
conditions for outrightbribery. Albert Fall had effectively
sold off the nation'semergency oil supply, a critical
component of national defense,to his wealthy friends in exchange
(16:45):
for personal enrichment. Thefuse had been lit.
(17:06):
Secrets of this scaleinvolving national resources and
high level officials aredifficult to contain. The first signs
of trouble emerged not inWashington D.C. but in the oil fields
of Wyoming. Independent oiloperators near Teapot Dome noticed
trucks bearing the Sinclairoil logo hauling equipment into to
the Federal Reserve lands,land supposedly off limits to private
(17:29):
drilling. And their suspicionswere aroused.
These local whispers soonechoed in the halls of power and
the pages of newspapers. OnApril 14, 1922, the Wall Street Journal
published an expose revealingthe secret lease of Teapot Dome to
to Harry Sinclair's mammothOil company. The story caused an
(17:50):
immediate stir. The very nextday, Senator John Kendrick, a Democrat
from Wyoming, responded to theconcerns of his constituents by introducing
a resolution demanding aSenate investigation into the lease.
Feeling the heat, SecretaryAlbert Fall was forced to publicly
acknowledge the Teapot Domelease. And adding fuel to the fire,
(18:12):
he also revealed a similarlease for the reserves in California.
The admission intensified thecalls for scrutiny. And now people
were also calling for therelease of all documents pertaining
to the Naval Reserve leases.
The Senate Committee on PublicLands and Surveys was assigned the
task of investigating theleases. Initially, there was some
(18:32):
reluctance, and finding asenator willing to lead the potentially
explosive inquiry provedchallenging. Ultimately, the chairmanship
fell to Senator Thomas J.Walsh, A determined Democrat from
Montana, known for his legalbackground and methodical persistence.
The Teapot Dome investigationofficially began hearings in October
(18:54):
1923 and would stretch on formonths. It was a painstaking process.
Senator Walsh, chair of theInvestigative committee, faced significant
obstacles. Political pressure,deliberate obstruction from those
involved, and complexfinancial trails designed to obscure
the truth. Albert Fall and theoil execs initially presented a united
(19:15):
front denying any improprietyand Repeatedly justifying the the
supposed threat of oildrainage. The Harding administration,
already grappling with othersuch emerging scandals, attempted
damage control. But here's thething, Elena Harding himself would
not see the full extent of thescandal unfold because he died suddenly
(19:36):
in office in August 1923 froma likely heart attack.
Just to jump in with a tidbitof information about that. Apparently,
President Harding's wife,Florence Harding, raised eyebrows
when she ordered Hardingcremated without an autopsy within
an hour of his death. Somepeople even suggested that Florence
Harding may have had somethingto do with the president's death.
(19:58):
But the symptoms Hardingexperienced suggests that it was
indeed a heart attack.
And this left Harding's vicepresident, Calvin Coolidge, to inherit
the presidency and theburgeoning crisis. President Coolidge,
seeking to restore publictrust, appointed special prosecutors
to pursue the matter legally.
But Senator Walsh, the chairof the original Senate Investigative
(20:21):
Committee, continued his ownefforts to pursue the truth. He meticulously
examined financial records,questioned witnesses, and followed
the money, focusing on AlbertFalls sudden and inexplicable increase
in wealth. The criticalbreakthrough came when Senator Walsh
unearthed the $100,000 paymentto Albert Fall from Edward Doheny,
(20:43):
the Pan American petroleum andtransport company founder.
This $100,000 loan, madewithout interest or security, just
as the California leases werebeing granted, was the smoking gun.
It shattered the carefullyconstructed denials and established
a clear link between thesecret oil leases and Albert Falls
personal enrichment. Furtherinvestigation uncovered the trail
(21:07):
of payments from Sinclairconnected to the Teapot Dome lease
in Wyoming, as well as thepower of congressional oversight
wielded persistently bySenator Walsh. Combined with the
crucial early reporting by theWall Street Journal demonstrated
that even in an administrationthat prioritized and prized backroom
deals, mechanisms foraccountability could prevail.
(21:29):
The elaborate facadeconstructed by Fall, Doaney and Sinclair
crumbled under the weight ofthe evidence. The Senate investigation
revealed a sordid tale, notjust of cronyism and poor judgment,
but but of outright briberycontaminating the highest echelons
of the United States government.
(22:06):
With Senator Walsh'scommitment committee having laid
bare the corruption, the focusshifted to the courts. The special
prosecutors directed byPresident Coolidge moved forward
with both civil suits aimed atcanceling the fraudulent leases and
criminal prosecutionstargeting the key players, Albert
Fall, Harry Sinclair andEdward Doney, the civil.
(22:26):
Litigation proved relativelystraightforward. The government argued
forcefully that the leases forTeapot Dome and the California Reserves
were invalid because they hadbeen obtained through bribery and
fraud. And in 1927, in thecase of the United States versus
Albert B. Fall, the UnitedStates Supreme Court delivered a
decisive verdict Agreeing withthat position. The nation's highest
(22:50):
court declared that the leaseshad indeed been procured corruptly
and invalidated them, orderingthe reserves return to the control
of the Navy Department. Thecourt's language was scathing, labeling
Albert Fall a quote, faithlesspublic officer, end quote.
Geez, yeah, Supreme Court,don't you hold back.
Right.
(23:11):
The criminal trials, however,unfolded with far more complexity
and produced outcomes thatbaffled and frustrated many observers.
Albert Fall faced chargesincluding conspiracy to defraud the
government and mostsignificantly, accepting a bribe
from Edward Doheny.
In 1929, a jury found AlbertFall guilty of accepting the $100,000
(23:32):
bribe from Doheny connectionwith the California lease. He was
subsequently fined a hundredthousand dollars the amount of the
bribe and sentenced to oneyear in prison. This conviction was
historic. Albert Fall becamethe first U. S. Cabinet secretary
ever to be incarcerated for afelony committed while holding office.
(23:52):
So is this where the term Fallguy comes from? From Albert Fall?
I have no idea.
But the story takes a bizarreturn. Edward Doney, the man who provided
the hundred thousand dollars,was tried separately for offering
the bribe. Despite Falk'sconviction for accepting the very
same money, Dohey's juryacquitted him.
What a stunning contradiction.The act of bribery seemingly occurred,
(24:17):
yet only the recipient wasfound criminally liable by the juries
involved. Wow.
And Harry Sinclair's legalbattles were equally tangled. His
initial trial alongside AlbertFall on conspiracy charges related
to the Teapot Dome lease endedin a mistrial. In a subsequent retrial,
Sinclair was acquitted ofconspiracy. However, Sinclair did
(24:39):
not escape punishmententirely. He ultimately served six
and a half months in jail, butnot for bribery or conspiracy. His
sentence was for contempt ofCongress stemming from his refusal
to answer certain questionsposed by senator Walsh's investigating
committee. And he was alsoconvicted of jury tampering after
it was discovered that hisagents had attempted to improperly
influence jurors in one of the trials.
(25:02):
That's crazy. The convictions,acquittals and punishments were all
over the place.
That's right, Elena. And thepublic official who took the money
went to prison. The wealthyoil magnets accused of providing
the money largely escapedconviction on the major charges related
to their corrupted leases.This disparity fueled public cynicism
(25:22):
and raised questions aboutwhether justice was truly blind or
if wealth and influence couldstill shield the powerful from full
accountability. The legalsystem, while ultimately convicting
Albert Fall and canceling theleases, seemed unable or unwilling
to hold all parties equallyresponsible for the core Corruption.
The Teapot Dome scandaldelivered a devastating blow to the
(25:44):
reputation of the Hardingadministration, forever associating
it with corruption. DespiteHarding's death before the full scope
was revealed, Harding himselfwas never directly implicated in
the bribery, but his poorjudgment and appointments and his
failure to check the excessesof his friends in the Ohio gang led
to his historical standingplummeting. His successor, Calvin
(26:08):
Coolidge, inherited the messand dedicated much of his early presidency
to restoring a sense ofintegrity to the White House.
What became known as theTeapot Dome scandal transcended the
specific details of oil leasesand financial transactions. Instead,
it etched itself into theAmerican political lexicon as the
ultimate symbol of governmentcorruption, a benchmark against which
(26:30):
future scandals would bemeasured for decades, right up until
Watergate with President Nixonin the early 70s, the scandal laid
bare the inherent dangers ofconcentrating power without adequate
checks, the insidiousinfluence of corporate money seeking
to sway public policy forprivate gain, and the critical vulnerability
of national resources whenoversight mechanisms are weakened
(26:52):
or bypassed.
It's impossible to ignore thecontext. This explosion of greed
occurred precisely at a timewhen the federal government actively
promoted a hands off probusiness environment. The Teapot
Dome scandal serves as apotent illustration of how an ideology
prioritizing privateenterprise and minimal regulation,
(27:13):
when applied to vital publicassets like the Naval petroleum reserves
could be exploited.
However, the scandal alsooffered a counter narrative. It highlighted
the resilience of Americandemocratic institutions. The dogged
investigation led by SenatorThomas Walsh and his committee faced
down powerful political andcorporate opposition, and the eventual
(27:34):
intervention of the judicialsystem culminated in the Supreme
Court's condemnation of thecorrupt leases. This outcome demonstrated
that accountability, whileoften slow and difficult to achieve,
remained possible.
The legacy of the Teapot Domescandal is therefore multifaceted.
It undoubtedly eroded publicconfidence in government and confirmed
(27:55):
the suspicions of many aboutthe corrupting potential of wealth
and politics. Yet it alsosignificantly strengthened the legitimacy
and power of congressionalinvestigations as a tool for oversight.
And importantly, itestablished a crucial precedent that
even a member of thePresident's cabinet could be held
criminally accountable andimprisoned for abuses of power. It
(28:18):
remains a vital and soberingchapter in the ongoing story of the
American.
Experiment, a stark reminderof how swiftly the promise of a return
to simpler times could sourinto complex corruption and a powerful
testament to the perpetualneed for vigilance against the temptations
of greedy and the abuse ofpublic office.
Until next time on history'sgreatest crimes, stay curious.
Picture America, 1921. TheGreat War is over. The doughboys
are at home. And a wave ofrelief washes over the nation. Automobiles
are crowding city streets.Jazz music spills from the speakeasies,
defying Prohibition. And thestock market seems poised for an
endless climb up. It's thedawn of the Roaring Twenties, an
(01:47):
era of unprecedentedprosperity and cultural dynamism.
Yet beneath the glitteringsurface, tensions simmered. The lingering
trauma of war, the anxietiesof rapid social change, the red scares
fading embers and. And in thehalls of power, a different kind
of storm was brewing.
Welcome to history's greatestcrimes. I'm Alana.
(02:09):
And I'm Michael. Today wedelve into a scandal that rocked
the very foundations ofAmerican government. A tale of greed,
betrayal and abuse of publictrust. Set against the backdrop of
this Jazz Age paradox, ascandal so immense it will become
the benchmark for politicalcorruption for decades. This was
the Teapot Dome scandal.
(02:31):
It all began with a promise, ayearning for simpler times. After
years of upheaval in the 1920election, Senator Warren G. Harding
of Ohio captured the nation'smood with a simple, powerful slogan.
Return to normalcy. Hardingarticulated this yearning in a speech
that resonated deeply with thepublic. Exhausted by the strains
(02:54):
of war, the fight over theLeague of Nations, and the perceived
excesses of Progressive era reforms.
He declared, quote, america'spresent need is not heroics, but
healing, not nostrums, butnormalcy, not revolution, but restoration.
Not agitation, but adjustment,not surgery, but serenity. Not the
(03:18):
dramatic, but thedispassionate. Not experiment, but
equipoise. Not submergence ininternationality, but sustainment
in. In triumphant nationality.
Now, in general, Hardingwasn't known for his deep, meaningful
speeches. In fact, one of hiscontemporaries described his speeches
(03:39):
as a quote, army of pompousphrases moving across the landscape
in search of an idea. End quote.
Burn.
Yeah. But during thepresidential campaign, Harding's
promise of normaly directlyled to his election as President
of the United States. Thatidea really struck a chord with the
(04:01):
American public.
Harding's administrationsignaled a sharp turn in American
governance. It marked adeliberate retreat from the activist
driven regulatory spirit ofthe Progressive era and a conscious
embrace of a pro businessagenda. Echoing the laissez faire
attitudes of the late 19thcentury, the guiding principle became,
(04:23):
as Harding himself, promise,quote, less government in business
and more business ingovernment, end quote. This philosophy
was embodied by his keycabinet appointments. Herbert Hoover
took over the helm at theDepartment of Commerce. You might
recognize Hoover as a future31st President of the United States.
But he was also a highlyefficient millionaire engineer known
(04:47):
for his post war reliefefforts at the Treasury. Andrew Mellon.
Yes. That Mellon, an immenselywealthy banker and industrialist,
brought his corporate mindsetdirectly into government, famously
stating, quote, the governmentis just a business and can and should
be run on business principles.End quote.
This pro business orientationquickly translated into policy. The
(05:11):
Harding administration pushedthrough the revenue act of 1921,
which significantly cut taxes,particularly for corporations and
wealthier individuals. Itestablished the first formal federal
budgeting process through theBudgeting and Accounting act of 1921,
creating the Bureau of theBudget. High protective tariffs aimed
(05:33):
at shielding Americanindustries were enacted first through
the Emergency Tariff act of1921, and then solidified with the
Forney McCumber Tariff of1922. Simultaneously, reflecting
a growing nativism, theadministration signed the Emergency
quota Act of 1921, imposingstrict limits on immigration. And
(05:56):
for many, especially in thebusiness community, it seemed prosperity
was indeed returning.
But this return to normalcywas not merely a passive drift towards
quieter times. It was anactive political and economic and
economic program designed tobenefit specific interests and reduce
government oversight. Thisvery environment, prioritizing business
(06:19):
deals and minimizingregulations in inadvertently created
fertile ground for corruption.President Harding himself, while
perhaps personally honest, wasknown for his loyalty to friends
and political allies, oftenappointing them to positions of power.
His administration becamenotorious for the, quote, ohio gang,
a group of cronies and pokerbuddies who saw government service
(06:42):
as an opportunity for personalenrichment. While the Harding administration
did achieve some notableforeign policy successes, its legacy
would ultimately be defined byscandal. And the most egregious of
these scandals centered on aresource deemed essential for the
nation's defense. Oil. Beforewe jump into the story, I do want
(07:18):
to take a moment to thank oursubscribers to History's Greatest
Crime, Smokey Brown andVivian. Thank you so much for your
support. Make sure that yousubscribe as well. Get access to
early episodes as well as thediscord that is going to come out
soon. So that way you can talkand ask questions of Elena and myself.
Now back to the show.
(07:39):
To understand the Teapot Domescandal, we need to understand the
critical role oil played forthe United States military in the
early 20th century. The Navyin particular was undergoing a massive
transformation.
Indeed, the era of coalpowered warships was rapidly drawing
to a close. Oil offeredundeniable strategic advantages.
(08:03):
It generated more power perpound. It burned cleaner, it vastly
simplified the process ofrefueling at sea, and it significantly
extended the operational rangeof naval vessels. Oil promised greater
naval freedom and flexibility.Britain's Royal Navy Recognizing
these benefits earlier, hadalready begun converting its fleet.
(08:25):
And the US Navy understoodthat keeping pace was crucial for
maintaining global sea power.The USS Texas, commissioned in 1914,
stands as a monument to thistransition. It was the last American
battleship built with coalfired boilers.
But this technological leapintroduced a new strategic concern.
(08:48):
While the United Statespossessed abundant domestic oil resources,
ensuring a guaranteed supplybecame a paramount national security
issue. The Navy couldn't riskbeing left powerless due to fuel
shortages, especially duringwartime or national emergencies when
commercial markets might bedisrupted or overwhelmed.
(09:10):
Precisely. And this foresightthen previously led President William
Howard Taft in 1912 towithdraw specific oil rich federal
lands in California frompublic settlement or private development.
These lands were designated asNaval Petroleum Reserves, set aside
exclusively for Navy's futurefuel needs.
(09:32):
Then a few Years later, in1915, President Woodrow Wilson added
an additional Naval PetroleumReserve, which was located in the
Teapot Dome field in Wyoming.The Teapot Dome Field was named for
its distinctive nearby rockformation. And the idea was that
it would remain largelyuntapped unless a national crisis
(09:55):
demanded its use. The originalintent was for the new oil reserves
in California and Wyoming toserve as a strategic asset, an emergency
stockpile held in the ground.It wasn't supposed to be for immediate
commercial exploitation.
For several years thesereserves were made under the jurisdiction
of the Navy Department,consistent with their purpose. But
(10:18):
in 1921, President Harding,swayed by his Secretary of the Interior,
made a pivotal and ultimatelydisastrous decision. On May 31, 1921,
Harding signed Executive Order 3474.
This Executive Ordertransferred administrative control
over these vital naval oilresources from the Department of
(10:40):
the Navy to the Department ofthe Interior. The individual who
prompted this transfer was theInterior Secretary himself, Albert
B. Fall. Albert Fall was aformer senator from New Mexico and
a member of Harding's innercircle of poker buddies. Fall also
persuaded the seeminglycompliant Secretary of the Navy,
(11:02):
Edwin Denby, to go along withthe proposal to shift the oil reserves
under Fall's control.
Looking at the bigger picture,the establishment of the reserves
in California and Wyoming byprevious Presidents Taft and Wilson
had represented a Progressiveera approach, prioritizing long term
national security and resourceconservation over immediate private
(11:26):
gain. However, the politicalwinds had shifted dramatically with
Harding's election in 1921.Harding and his efforts to return
to normalcy favored businessinterests and minimal government
interference. So Albert hall,the former Senator and poker buddy
of the President, saw anopportunity to exploit the untapped
(11:46):
resources of the Naval oil reserves.
The transfer of those oilreserves via Executive Order 3474
therefore wasn't a mereadministrative adjustment. It was
a fundamental policy shiftreflecting the ascendancy of private
interests over nationalsecurity concerns within the Harding
(12:06):
administration.
(12:27):
With the naval oil reservesunder his authority, Secretary Albert
Fauld didn't waste any time.He viewed the vast pools of oil beneath
Teapot Dome and the Californiareserves not as a strategic safeguard
for the Navy, but as a goldenopportunity. An opportunity for his
friends in the oil industry.And as it turns out, for himself.
(12:48):
His primary beneficiaries weretwo titans of the burgeoning American
oil industry. Harry F.Sinclair, the ambitious head of Mammoth
Oil Company, and EdwardDoheny, the founder of Pan American
Petroleum and TransportCompany. Both were powerful wealthy
men and both were personalfriends of Albert fall.
(13:11):
Throughout late 1921 and 1922,Albert Fall engaged in secret negotiations
with Donee and Sinclair. Theoutcome was swift and decisive. Fall
secretly granted Doney's PanAmerican Petroleum exclusive rights
to drill in the Californiareserves. Then on April 7, 1922,
he awarded Harry Sinclair'sMammoth Oil exclusive rights to the
(13:34):
entire Teapot Dome reserve inWyoming. Fall was so determined to
maintain secrecy, particularlyaround the Teapot Dome deal, that
he reportedly locked the leasecontract away in his desk drawer.
Yeah, that's not suspicious atall. Anyways, a critical element
of these deals was thecomplete absence of competitive bidding.
(13:57):
Granting such vast andvaluable public resources to private
companies without allowingothers to bid smelled of favoritism
and potential corruption. Thesecrecy surrounding the negotiations
only intensified thesesuspicions when the deals eventually
surfaced. Why operate in theshadows if everything was above board?
(14:18):
Right?
Of course. And the lease termsthemselves were exceptionally favorable
to the oil company execs,Sinclair and Doney. They gained control
over oil fields estimated tobe worth hundreds of millions of
dollars. Paying relatively lowroyalty rates to the government.
Albert Fall attempted tojustify the leases, especially the
(14:38):
Teapot Dome contract, byclaiming it was necessary to drill
immediately to prevent oilfrom being drained by adjacent private
wells. The so called drainageargument. However, the justification
was weak, particularly asthere was no pressing national emergency
that required tapping into theNavy strategic resour.
(14:58):
But the true depth of thescandal lay not just in the secretive
process or the generous terms.It lay in the quid pro quo. As Albert
Fall was finalizing thesesecret arrangements, his personal
financial situation underwenta remarkable transformation.
In November 1921, asnegotiations for the California Reserves
(15:20):
were underway, Edward Doney,the Pan American Petroleum founder,
provided Albert fall with$100,000. So called LO. This loan
was unsecured and crucially,interest free. That sounds suspicious.
Shortly thereafter, AlbertFall received additional gifts and
purported loans from Sinclair,the head of Mammoth Oil. Altogether,
(15:42):
fall received roughly$404,000, equivalent to nearly $7
million today. This moneyflowed into Albert Falls, New Mexico
cattle ranch and otherpersonal business ventures. So what
we can see here is that theseweren't friendly loans. They were
leaning way into the territoryof bribes.
That's a lot of moneyswitching hands. The process itself,
(16:04):
the secret negotiations, thelack of competitive bidding reflected
a profound disregard forpublic accountability. It exemplified
how the Hardingadministration's philosophy of running
government on businessprinciples could be twisted to prioritize
private deal making overtransparent governance. And this
(16:24):
was especially the case whenvaluable public assets were at stake.
The method was inherentlyscandalous, creating the perfect
conditions for outrightbribery. Albert Fall had effectively
sold off the nation'semergency oil supply, a critical
component of national defense,to his wealthy friends in exchange
(16:45):
for personal enrichment. Thefuse had been lit.
(17:06):
Secrets of this scaleinvolving national resources and
high level officials aredifficult to contain. The first signs
of trouble emerged not inWashington D.C. but in the oil fields
of Wyoming. Independent oiloperators near Teapot Dome noticed
trucks bearing the Sinclairoil logo hauling equipment into to
the Federal Reserve lands,land supposedly off limits to private
(17:29):
drilling. And their suspicionswere aroused.
These local whispers soonechoed in the halls of power and
the pages of newspapers. OnApril 14, 1922, the Wall Street Journal
published an expose revealingthe secret lease of Teapot Dome to
to Harry Sinclair's mammothOil company. The story caused an
(17:50):
immediate stir. The very nextday, Senator John Kendrick, a Democrat
from Wyoming, responded to theconcerns of his constituents by introducing
a resolution demanding aSenate investigation into the lease.
Feeling the heat, SecretaryAlbert Fall was forced to publicly
acknowledge the Teapot Domelease. And adding fuel to the fire,
(18:12):
he also revealed a similarlease for the reserves in California.
The admission intensified thecalls for scrutiny. And now people
were also calling for therelease of all documents pertaining
to the Naval Reserve leases.
The Senate Committee on PublicLands and Surveys was assigned the
task of investigating theleases. Initially, there was some
(18:32):
reluctance, and finding asenator willing to lead the potentially
explosive inquiry provedchallenging. Ultimately, the chairmanship
fell to Senator Thomas J.Walsh, A determined Democrat from
Montana, known for his legalbackground and methodical persistence.
The Teapot Dome investigationofficially began hearings in October
(18:54):
1923 and would stretch on formonths. It was a painstaking process.
Senator Walsh, chair of theInvestigative committee, faced significant
obstacles. Political pressure,deliberate obstruction from those
involved, and complexfinancial trails designed to obscure
the truth. Albert Fall and theoil execs initially presented a united
(19:15):
front denying any improprietyand Repeatedly justifying the the
supposed threat of oildrainage. The Harding administration,
already grappling with othersuch emerging scandals, attempted
damage control. But here's thething, Elena Harding himself would
not see the full extent of thescandal unfold because he died suddenly
(19:36):
in office in August 1923 froma likely heart attack.
Just to jump in with a tidbitof information about that. Apparently,
President Harding's wife,Florence Harding, raised eyebrows
when she ordered Hardingcremated without an autopsy within
an hour of his death. Somepeople even suggested that Florence
Harding may have had somethingto do with the president's death.
(19:58):
But the symptoms Hardingexperienced suggests that it was
indeed a heart attack.
And this left Harding's vicepresident, Calvin Coolidge, to inherit
the presidency and theburgeoning crisis. President Coolidge,
seeking to restore publictrust, appointed special prosecutors
to pursue the matter legally.
But Senator Walsh, the chairof the original Senate Investigative
(20:21):
Committee, continued his ownefforts to pursue the truth. He meticulously
examined financial records,questioned witnesses, and followed
the money, focusing on AlbertFalls sudden and inexplicable increase
in wealth. The criticalbreakthrough came when Senator Walsh
unearthed the $100,000 paymentto Albert Fall from Edward Doheny,
(20:43):
the Pan American petroleum andtransport company founder.
This $100,000 loan, madewithout interest or security, just
as the California leases werebeing granted, was the smoking gun.
It shattered the carefullyconstructed denials and established
a clear link between thesecret oil leases and Albert Falls
personal enrichment. Furtherinvestigation uncovered the trail
(21:07):
of payments from Sinclairconnected to the Teapot Dome lease
in Wyoming, as well as thepower of congressional oversight
wielded persistently bySenator Walsh. Combined with the
crucial early reporting by theWall Street Journal demonstrated
that even in an administrationthat prioritized and prized backroom
deals, mechanisms foraccountability could prevail.
(21:29):
The elaborate facadeconstructed by Fall, Doaney and Sinclair
crumbled under the weight ofthe evidence. The Senate investigation
revealed a sordid tale, notjust of cronyism and poor judgment,
but but of outright briberycontaminating the highest echelons
of the United States government.
(22:06):
With Senator Walsh'scommitment committee having laid
bare the corruption, the focusshifted to the courts. The special
prosecutors directed byPresident Coolidge moved forward
with both civil suits aimed atcanceling the fraudulent leases and
criminal prosecutionstargeting the key players, Albert
Fall, Harry Sinclair andEdward Doney, the civil.
(22:26):
Litigation proved relativelystraightforward. The government argued
forcefully that the leases forTeapot Dome and the California Reserves
were invalid because they hadbeen obtained through bribery and
fraud. And in 1927, in thecase of the United States versus
Albert B. Fall, the UnitedStates Supreme Court delivered a
decisive verdict Agreeing withthat position. The nation's highest
(22:50):
court declared that the leaseshad indeed been procured corruptly
and invalidated them, orderingthe reserves return to the control
of the Navy Department. Thecourt's language was scathing, labeling
Albert Fall a quote, faithlesspublic officer, end quote.
Geez, yeah, Supreme Court,don't you hold back.
Right.
(23:11):
The criminal trials, however,unfolded with far more complexity
and produced outcomes thatbaffled and frustrated many observers.
Albert Fall faced chargesincluding conspiracy to defraud the
government and mostsignificantly, accepting a bribe
from Edward Doheny.
In 1929, a jury found AlbertFall guilty of accepting the $100,000
(23:32):
bribe from Doheny connectionwith the California lease. He was
subsequently fined a hundredthousand dollars the amount of the
bribe and sentenced to oneyear in prison. This conviction was
historic. Albert Fall becamethe first U. S. Cabinet secretary
ever to be incarcerated for afelony committed while holding office.
(23:52):
So is this where the term Fallguy comes from? From Albert Fall?
I have no idea.
But the story takes a bizarreturn. Edward Doney, the man who provided
the hundred thousand dollars,was tried separately for offering
the bribe. Despite Falk'sconviction for accepting the very
same money, Dohey's juryacquitted him.
What a stunning contradiction.The act of bribery seemingly occurred,
(24:17):
yet only the recipient wasfound criminally liable by the juries
involved. Wow.
And Harry Sinclair's legalbattles were equally tangled. His
initial trial alongside AlbertFall on conspiracy charges related
to the Teapot Dome lease endedin a mistrial. In a subsequent retrial,
Sinclair was acquitted ofconspiracy. However, Sinclair did
(24:39):
not escape punishmententirely. He ultimately served six
and a half months in jail, butnot for bribery or conspiracy. His
sentence was for contempt ofCongress stemming from his refusal
to answer certain questionsposed by senator Walsh's investigating
committee. And he was alsoconvicted of jury tampering after
it was discovered that hisagents had attempted to improperly
influence jurors in one of the trials.
(25:02):
That's crazy. The convictions,acquittals and punishments were all
over the place.
That's right, Elena. And thepublic official who took the money
went to prison. The wealthyoil magnets accused of providing
the money largely escapedconviction on the major charges related
to their corrupted leases.This disparity fueled public cynicism
(25:22):
and raised questions aboutwhether justice was truly blind or
if wealth and influence couldstill shield the powerful from full
accountability. The legalsystem, while ultimately convicting
Albert Fall and canceling theleases, seemed unable or unwilling
to hold all parties equallyresponsible for the core Corruption.
The Teapot Dome scandaldelivered a devastating blow to the
(25:44):
reputation of the Hardingadministration, forever associating
it with corruption. DespiteHarding's death before the full scope
was revealed, Harding himselfwas never directly implicated in
the bribery, but his poorjudgment and appointments and his
failure to check the excessesof his friends in the Ohio gang led
to his historical standingplummeting. His successor, Calvin
(26:08):
Coolidge, inherited the messand dedicated much of his early presidency
to restoring a sense ofintegrity to the White House.
What became known as theTeapot Dome scandal transcended the
specific details of oil leasesand financial transactions. Instead,
it etched itself into theAmerican political lexicon as the
ultimate symbol of governmentcorruption, a benchmark against which
(26:30):
future scandals would bemeasured for decades, right up until
Watergate with President Nixonin the early 70s, the scandal laid
bare the inherent dangers ofconcentrating power without adequate
checks, the insidiousinfluence of corporate money seeking
to sway public policy forprivate gain, and the critical vulnerability
of national resources whenoversight mechanisms are weakened
(26:52):
or bypassed.
It's impossible to ignore thecontext. This explosion of greed
occurred precisely at a timewhen the federal government actively
promoted a hands off probusiness environment. The Teapot
Dome scandal serves as apotent illustration of how an ideology
prioritizing privateenterprise and minimal regulation,
(27:13):
when applied to vital publicassets like the Naval petroleum reserves
could be exploited.
However, the scandal alsooffered a counter narrative. It highlighted
the resilience of Americandemocratic institutions. The dogged
investigation led by SenatorThomas Walsh and his committee faced
down powerful political andcorporate opposition, and the eventual
(27:34):
intervention of the judicialsystem culminated in the Supreme
Court's condemnation of thecorrupt leases. This outcome demonstrated
that accountability, whileoften slow and difficult to achieve,
remained possible.
The legacy of the Teapot Domescandal is therefore multifaceted.
It undoubtedly eroded publicconfidence in government and confirmed
(27:55):
the suspicions of many aboutthe corrupting potential of wealth
and politics. Yet it alsosignificantly strengthened the legitimacy
and power of congressionalinvestigations as a tool for oversight.
And importantly, itestablished a crucial precedent that
even a member of thePresident's cabinet could be held
criminally accountable andimprisoned for abuses of power. It
(28:18):
remains a vital and soberingchapter in the ongoing story of the
American.
Experiment, a stark reminderof how swiftly the promise of a return
to simpler times could sourinto complex corruption and a powerful
testament to the perpetualneed for vigilance against the temptations
of greedy and the abuse ofpublic office.
Until next time on history'sgreatest crimes, stay curious.
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