Wikipedia Deep Dive

Teapot Dome scandal

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The Cabinet Member Who Went to Prison

In 1929, Albert Fall became the first member of a presidential cabinet in American history to be sent to prison. His crime? Taking bribes worth over seven million dollars in today's money to hand over the nation's emergency oil reserves to private companies. For decades afterward, "Teapot Dome" became shorthand for political corruption at its worst—the scandal against which all others were measured, until Watergate came along and claimed that dubious crown.

But here's the twist that makes this story truly bizarre: Fall was convicted of accepting bribes, yet the men who paid him those bribes were acquitted of paying them. Somehow, in the legal reasoning of 1920s America, money changed hands corruptly in one direction but not the other.

Why the Navy Needed Oil in the Ground

To understand Teapot Dome, you first need to understand why the federal government was sitting on oil fields in Wyoming and California in the first place. In the early twentieth century, the United States Navy was transitioning from coal-powered ships to oil-powered ones. This was a strategic revolution—oil gave ships greater range and speed—but it also created a vulnerability. What if war broke out and the nation couldn't secure enough oil?

President William Howard Taft had a solution. He designated several oil-rich areas as naval petroleum reserves, essentially locking away the oil underground as an emergency supply for the military. The idea was simple: leave the oil in the ground until the nation desperately needed it. Private oil companies couldn't touch it.

The most famous of these reserves sat in Natrona County, Wyoming, on land that contained a rock formation shaped like a teapot. They called it Teapot Dome.

Enter Albert Fall

When Warren G. Harding won the presidency in 1920, he brought with him a group of friends and political allies who would become infamous as "the Ohio Gang." These were men more interested in enriching themselves than serving the public. Among them was Albert Bacon Fall, a New Mexico rancher and former senator whom Harding appointed as Secretary of the Interior.

Fall had a problem. His cattle ranch in the Tularosa Basin of New Mexico was failing. He owed back taxes—some of them nearly a decade overdue. He needed money, and he happened to control access to some of the most valuable oil reserves in the country.

First, Fall convinced President Harding to transfer control of the naval oil reserves from the Navy Department to his own Interior Department. The executive order was signed in 1921, though it wasn't actually implemented until the following year, when Fall persuaded Navy Secretary Edwin Denby to make it happen. With that bureaucratic shuffle complete, Fall controlled Teapot Dome.

The Deals

In 1922, Fall got to work. He leased the oil production rights at Teapot Dome to Harry Sinclair, owner of Mammoth Oil, a subsidiary of the Sinclair Oil Corporation. He leased the Elk Hills reserve in California to Edward Doheny of Pan American Petroleum and Transport Company. Neither lease was put out for competitive bidding.

Now, here's where it gets interesting from a legal perspective. Leasing without competitive bidding was actually legal under the Mineral Leasing Act of 1920. The leases themselves, on paper, were legitimate. What was not legitimate was what happened behind closed doors.

In November 1921, Edward Doheny handed Albert Fall a loan of one hundred thousand dollars. No interest. No real expectation of repayment. In today's dollars, that's about 1.76 million. Over the following months, Fall received additional gifts from both Doheny and Sinclair totaling around four hundred thousand dollars more—another seven million in today's money.

Fall tried to keep these transactions secret. He failed.

A Sudden Change in Circumstances

People noticed when Albert Fall's financial situation dramatically improved. A man who had owed property taxes for nearly ten years suddenly paid them all off. His ranch, previously struggling, showed signs of significant investment. A New Mexico journalist named Carl Magee—who would later found The Albuquerque Tribune—started writing about Fall's mysterious new wealth.

Meanwhile, in Wyoming, an independent oil operator was furious. He'd wanted a shot at the Teapot Dome leases, and instead they'd been handed to Sinclair in a secret deal. He wrote to his senator, John Kendrick, demanding to know what had happened.

Kendrick never wrote back. But two days later, on April 15, 1922, he introduced a resolution calling for an investigation.

The Investigation

The Senate's initial inquiry was led by Robert La Follette, a progressive Republican from Wisconsin known for his reformist zeal. La Follette initially believed Fall was innocent. Then someone broke into his office in the Senate Office Building and ransacked it. His suspicions intensified.

The real detective work, however, was done by Thomas Walsh, a Democratic senator from Montana. Walsh was the most junior member of the minority party on the investigating committee—hardly a position of power. But he had something more valuable: persistence.

For two years, Walsh pushed forward while Fall pushed backward. Records disappeared. Witnesses became forgetful. The leases themselves were technically legal, so there was no obvious crime to prosecute. Fall seemed to be covering his tracks successfully.

But Walsh kept asking one simple question: How did Albert Fall get so rich so fast?

The Break

The investigation was winding down in 1924, with Fall apparently in the clear, when Walsh finally found what he was looking for. Fall had covered up almost everything, but he'd missed one crucial piece of evidence: the record of Doheny's hundred-thousand-dollar "loan."

This discovery cracked the case wide open. Suddenly the narrative shifted. This wasn't just about questionable lease terms—this was about bribery at the highest levels of government.

Civil and criminal cases related to Teapot Dome would drag through the courts for the rest of the decade. In 1927, the Supreme Court ruled that both leases had been obtained through corruption. The Elk Hills lease was invalidated in February, the Teapot Dome lease in October. Both reserves were returned to the Navy.

The Paradox of the Verdicts

Here's where American justice took a strange turn. In 1929, Albert Fall was convicted of accepting bribes from Edward Doheny and sentenced to prison. Yet in 1930, Doheny was acquitted of paying those same bribes to Fall.

Think about that for a moment. The court decided that Fall had definitely accepted a bribe, but simultaneously concluded that Doheny hadn't paid one. The same transaction was corrupt on one end and innocent on the other. Legal scholars have puzzled over this ever since.

The story gets even more absurd. After Doheny was acquitted, his corporation foreclosed on Fall's New Mexico ranch. The reason? "Unpaid loans"—meaning the very same hundred-thousand-dollar payment that Fall had just been convicted of taking as a bribe.

Harry Sinclair, for his part, never faced a bribery conviction. He did, however, spend six months in jail for tampering with a jury.

The Aftermath

Warren Harding never faced consequences for Teapot Dome. He died in August 1923, before the full scope of the scandal became clear. The evidence proving Fall's guilt only emerged after the president was already in his grave. But Harding's reputation never recovered. To this day, he consistently ranks among the worst presidents in American history, largely because of the corruption that flourished under his watch.

Calvin Coolidge, who succeeded Harding, benefited enormously from the contrast. The scandal had occurred before he took office, and the ongoing investigations only reinforced his image as an honest reformer cleaning up his predecessor's mess. He won the 1924 presidential election easily.

The Constitutional Legacy

Teapot Dome left lasting marks on American law and governance. The Supreme Court's 1927 ruling in McGrain versus Daugherty—a case arising from the investigation—established for the first time that Congress has the power to compel testimony. Before this ruling, it wasn't entirely clear that congressional committees could force reluctant witnesses to talk. After it, Congress had a powerful new tool for conducting investigations.

The Revenue Act of 1924, passed in direct response to the scandal, gave the chairman of the House Ways and Means Committee the power to obtain any taxpayer's records. This was a direct reaction to the difficulty investigators had faced in following the money. If a future Albert Fall tried to hide bribes, Congress would have better tools to find them.

The Federal Corrupt Practices Act, which regulated campaign finance, was strengthened in 1925. Though campaign finance reform would remain an ongoing battle throughout the twentieth century and into the twenty-first, Teapot Dome marked an important moment of heightened concern about money in politics.

The Oil Field's Strange Second Life

After the scandal, the Teapot Dome oil field sat idle for nearly half a century. No one wanted to touch the property that had brought down a cabinet secretary. But in 1976, production quietly resumed. Over the next thirty-nine years, the field would produce twenty-two million barrels of oil and generate over 569 million dollars in revenue for the federal government.

In February 2015, the Department of Energy sold the Teapot Dome oil field to a New York company called Stranded Oil Resources Corporation for forty-five million dollars. The sale barely made the news. The scandal that had once consumed the nation had faded into a historical footnote.

The Benchmark for Corruption

For decades, Teapot Dome was the reference point whenever Americans discussed political corruption. It represented the "high water mark" of cabinet-level scandal, the worst example of a government official betraying the public trust for personal gain. Journalists and historians measured every subsequent scandal against it.

Then came Watergate. In that scandal, another cabinet member—Attorney General John Mitchell—went to prison, only the second time in American history that had happened. The first, of course, was Albert Fall. Watergate displaced Teapot Dome as the benchmark, but the earlier scandal retains its significance as a turning point in how Americans understood and responded to corruption in their government.

What Made It Different

The Teapot Dome scandal differs from many political scandals in an important way: it was fundamentally about greed, not power. Fall didn't lease the oil reserves to help his political party or to gain some strategic advantage. He did it because he needed money for his ranch. The corruption was personal, petty, and utterly venal.

This perhaps explains why the scandal resonated so deeply with the public. It wasn't complicated. A man entrusted with the nation's resources sold them off to enrich himself. The simplicity of the crime made it comprehensible—and made the betrayal feel all the more stark.

A cabinet secretary, sworn to serve the public, took bribes and went to prison. The men who paid the bribes walked free. The oil fields eventually went back into production. And for a generation of Americans, "Teapot Dome" meant that no one in government, no matter how high their position, could be trusted to resist the temptation of easy money.