On the Teapot Dome Scandal Summary

  • Last updated on November 10, 2022

The Teapot Dome scandal was a case of political corruption within the administration of President Warren G. Harding. It erupted in 1922, when Harding’s secretary of the interior, Albert B. Fall, was accused of setting up drilling leases on public lands for two top oil industry executives and receiving a payback in return. As a result, congressional hearings were initiated, an independent prosecutor assigned, and witnesses called beginning in late 1923, after Harding’s death from heart failure. Although the scandal never directly implicated Harding, it occurred at a time when other, lesser administrative scandals were unfolding and ended up blackening Harding’s reputation and his standing as a president. There is no one key document associated with the scandal, but only a series of statements and legal testimonies given over a period of several years. The selection of materials included here is made up of: 1) a short argument delivered in the Senate by the Progressive Wisconsin senator Robert La Follette in favor of prosecuting the case; 2) a congressional resolution canceling the oil leases at the center of the scandal, after it had been determined that they were questionable; and 3) two brief statements by President Calvin Coolidge regarding the removal of an administrative official implicated in the case.

Summary Overview

The Teapot Dome scandal was a case of political corruption within the administration of President Warren G. Harding. It erupted in 1922, when Harding’s secretary of the interior, Albert B. Fall, was accused of setting up drilling leases on public lands for two top oil industry executives and receiving a payback in return. As a result, congressional hearings were initiated, an independent prosecutor assigned, and witnesses called beginning in late 1923, after Harding’s death from heart failure. Although the scandal never directly implicated Harding, it occurred at a time when other, lesser administrative scandals were unfolding and ended up blackening Harding’s reputation and his standing as a president. There is no one key document associated with the scandal, but only a series of statements and legal testimonies given over a period of several years. The selection of materials included here is made up of: 1) a short argument delivered in the Senate by the Progressive Wisconsin senator Robert La Follette in favor of prosecuting the case; 2) a congressional resolution canceling the oil leases at the center of the scandal, after it had been determined that they were questionable; and 3) two brief statements by President Calvin Coolidge regarding the removal of an administrative official implicated in the case.

Defining Moment

The Teapot Dome scandal took its name from an oil reserve in Wyoming that featured a rock outcropping resembling a teapot. The reserve was leased by Secretary of the Interior Albert B. Fall to the industrialist Harry F. Sinclair–head of Mammoth Oil Co. (later Sinclair Oil Co.)–in early 1922. It and another reserve in Elk Hills, California, which was leased to Edward L. Doheny, head of Pan-American Petroleum Co., were part of an effort by Fall to demonstrate the utility of allowing private oil companies to make use of oil reserves on public lands–to the benefit of both the government and private industry. Fall had recently won President Warren G. Harding to his cause, although some in the administration felt that these oil fields, which were dedicated to maintaining a supply of fuel for the US Navy, were best left untapped and overseen by the government. Fall and his business associates noted that private companies were already drilling in areas adjacent to the reserves, and it would be prudent to act before the oil at the site was depleted. They sweetened the deal by agreeing to erect fuel storage facilities at Navy shipyards in California and Hawaii. However, as an April 1922 article in the Wall Street Journal noted, the entire arrangement had been made without any open, competitive bidding. It thus appeared to be an instance of crony capitalism.

The practice of conservation of natural resources–of holding public goods in reserve–was relatively new at the time. Under the presidencies of Theodore Roosevelt, William H. Taft, and Woodrow Wilson inroads were made into this arena. (Taft, in fact, had designated Elk Hills a naval reserve in 1912, and Wilson Teapot Dome in 1915.) In the case of oil, it was thought wise to leave some of that resource in natural reservoirs, or domes, for future use. Both Democrats and Republicans generally supported the policy and in 1920 passed a law mandating the maintenance of adequate reserves for such purposes. On the other hand, private oil interests, along with many politicians, opposed the policy, holding that the oil supply was plentiful enough to make reserves unnecessary, and that, in any case, private oil companies were capable of supplying the needs of the US government. Albert Fall, a former senator from New Mexico, represented the latter school of thought.

Adding to suspicions regarding the Teapot Dome deal was an air of secrecy surrounding Fall and his associates. A perception of favoritism and bribery seemed to be confirmed when Fall started making improvements to his private ranch in New Mexico. Fall claimed that the secrecy was necessary to protect the storage facilities from attack during war. Despite the fact that the Harding administration enjoyed the benefit of having Congress politically aligned with it (under Republican control), the Senate voted to launch an investigation. The senator most responsible for pushing for the review was the Progressive Wisconsin politician Robert M. La Follette. The senator put in charge of the investigation, under the Committee on Public Lands, was Montana Democrat Thomas J. Walsh, respected for his legal skills and personal integrity. Thus, following months of information gathering and analysis, the hearings got underway–in late 1923, after President Harding’s death and Secretary Fall’s departure from the Cabinet.

Author Biography

Robert M. La Follette was born in Primrose, Wisconsin, in 1855. He served as a county district attorney and in the US House of Representatives before returning to Wisconsin to run for governor, which led to his serving in that office as a Progressive from 1901 to 1906. From there he moved to the US Senate (1906–24), sponsoring bills, among other legislation, to limit the power of the railroads. His La Follete’s Weekly expanded his reach and helped build a wider reform movement, partly aligned with the Populist movement. As the Progressive Party’s presidential candidate in 1924, he won 5 million votes, about one-sixth of the total. La Follette died in Washington, DC, the following year.

Calvin Coolidge was born in 1872 in Plymouth, Vermont. His mother and sister died early in his life; his father was a prominent public official. Coolidge graduated from Amherst College and pursued a career in law and government. While living in Northampton, Massachusetts, he won a seat on the city council in 1900, chairmanship of the Northampton Republican Committee in 1904, a position on the Massachusetts General Court in 1907, and, eventually, the office of governor in 1919. He left office to serve as vice president to Warren G. Harding. In August 1923, Harding died, leaving Coolidge as president. In 1924, Coolidge won reelection, holding office until 1929. He retired to Northampton and died in 1933.

Document Analysis

The Teapot Dome scandal was one of the most captivating and damaging cases of political corruption in American history. Although not the sole force responsible for launching congressional hearings, Senator Robert La Follette was one of the main driving forces. In the course of investigating the matter, Congress discovered that Fall had worked to convince the secretary of the Navy, Edwin Denby, to shift authority for the oil reserves from the military to the Interior Department, under Fall’s leadership. Then came the leasing of Teapot Dome to Sinclair and of Elk Hills to Doheny. The investigation revealed, moreover, that Fall had received over $400,000 (or $5 million in today’s currency) in interest-free loans and government bonds from the two businessmen in return for arranging the leases. Although in the early part of the proceedings Fall had his protectors in the administration and elsewhere in government, they began to withdraw their support as more disclosures came forth. One such supporter, Attorney General Harry M. Daugherty, faced his own problems in connection with his running of the Department of Justice; he was forced to resign his office in 1924. The Navy Department’s Denby, under pressure to resign as well, eventually did so. It is pressure to fire Denby that Coolidge is responding to in the statements given above. Congress also asked President Calvin Coolidge to appoint a special prosecutor in order to uncover any criminal wrongdoing in the case. Ultimately, Coolidge appointed two: one Republican and one Democrat. Ongoing press coverage of the scandal drew an ever wider public audience.

Various criminal and civil suits unfolded as time went by. In a ruling by the Supreme Court in 1927, well after the cancellation of the oil leases by Congress (in 1924), the leases were found to improper and return of the reserves to the government was deemed right and just. Fall, his reputation in tatters, was found guilty of bribery in 1929 and sentenced to one year in prison and a $100,000 fine. Sinclair and Doheny were acquitted of all charges–a somewhat surprising outcome. (Most observers expected to see convictions on conspiracy charges.) Sinclair, however, was subsequently charged in a second investigation with contempt because he refused to cooperate and was found to have tampered with the jury. He received a short sentence as a result.

The Teapot Dome scandal was used by political opponents of the Harding administration to paint a picture of graft and corruption, a picture that has colored popular opinion about the Harding presidency ever since. The Republican Party, too, was blasted at the time for its close ties to the business community and its alleged interest in fostering deals between politicians and business owners. While Harding’s reputation has long suffered as a result of the scandal, his party benefitted from the efforts of his vice president and successor, Calvin Coolidge, toward restoring public trust in Republican leadership and confidence in government. Coolidge made a point of having zero tolerance for corruption in his administration and of appointing only men of the “highest character” to his Cabinet. And character, as Coolidge notes in the second of his two statements above, “is the only secure foundation of the State.” Republicans may also have been helped by the fact that Edward Doheny was found to have had links to leading Democrats as well as Republicans; some of them were even on his payroll. Thus, when Democrats tried in 1924 and 1928 to win the presidency through claims of honest government, they failed to win over voters and were defeated–by Coolidge and Herbert Hoover, in turn.

Essential Themes

Besides the political dimension, Teapot Dome is remembered for having been one of the first successes of the budding conservation movement. The public came to realize that, although natural resource issues are complex and planning for the needs of future generations is difficult, such planning must take place, and having a government conservation policy makes good sense. After Teapot Dome, petroleum development came to be overseen by the Federal Oil Conservation Board (FOCB), which focused on the “wise use” of the resource and maintaining stability in the oil market. The program was short-lived, however. Business groups such as the American Petroleum Institute pressured the government to limit the FOCB’s authority and allow big oil companies, together with the many smaller, independent refiners, to develop drilling sites and bring their product to market under less restrictive conditions.

Teapot Dome is also noted for having inspired the writer Upton Sinclair’s 1927 novel Oil!, which features a self-made oil millionaire (modeled on Edward Doheny) and his more skeptically-minded son. That novel, in turn, inspired the filmmaker Paul Thomas Anderson’s award-winning 2007 movie There Will Be Blood, which highlights some of the ruthless business practices in the early oil industry and features a cast of odd and colorful characters. (The actor Daniel Day-Lewis, who plays the main character, won an Academy Award for best actor.)

Bibliography and Additional Reading
  • Bennett, Leslie E. One Lesson from History: Appointment of Special Counsel and the Investigation of the Teapot Dome Scandal. Washington, DC: Brookings Institution, 1999. Web. 23 Jul. 2014.
  • Davis, Margaret Leslie. Dark Side of Fortune: Triumph and Scandal in the Life of Oil Tycoon Edward L. Doheny. Berkeley: U of California P, 1998. Print.
  • McCartney, Laton. The Teapot Dome Scandal: How Big Oil Bought the Harding White House and Tried to Steal the Country. New York: Random House, 2008. Print.
  • Stratton, David H. Tempest over Teapot Dome: The Story of Albert B. Fall. Norman, OK: U of Oklahoma P, 1998. Print.
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