Teapot Dome Scandal

The Teapot Dome scandal occurred during the administration of President Warren G. Harding. Albert B. Fall, secretary of the interior, secretly leased three federal oil reserves to several oil company officials in 1921 and 1922 and received personal compensation from them. This scandal and accusations of influence peddling and corruption by several of President Harding's political appointees resulted in congressional investigations and court cases that extended throughout that decade.

Underground petroleum reserves on federal government lands had been set aside for possible use in a national emergency by several previous administrations. Two of these oil reserves were located in California, and a third was near Casper, Wyoming. The property in Wyoming was called Teapot Dome due to the shape then of a rock formation on that land. Legislation in 1920 gave control of these federal oil reserves to the secretary of the navy. President Harding issued an executive order in 1921, though, transferring authority over these naval oil reserves to Fall, his secretary of the interior.

Without taking bids, Fall issued exclusive leases to Edward L. Doheny of the Pan American Petroleum Company for the two California reserves and to Harry F. Sinclair of the Mammoth Oil Company for the Wyoming property in 1921 and 1922. Rumors and accusations were raised concerning these transactions, and Senator Robert M. LaFollette of Wisconsin called [Page 2066]publicly for action on these allegations. The U.S. Senate authorized an investigation in April of 1922 by its Committee on Public Lands. During the political tension over this scandal in 1923, Fall resigned as secretary of the interior in March, President Harding died in August, and Senator Thomas J. Walsh presided over a Senate investigation that began in October. After accounts of Fall's personal financial gain resulting from the oil leases began to emerge in Senate testimony in January 1924, President Calvin Coolidge announced his plans to nominate two special counsels, one Republican and one Democrat, to investigate further and prosecute. The Senate shortly thereafter passed a resolution charging delays and obstructions by the attorney general, Harry M. Daugherty, another Harding appointee, for his handling of the Teapot Dome investigation and for corruption and influence peddling within the Justice Department. Daugherty resigned in March 1924.

The three oil reserves were returned to the federal government by Supreme Court decisions in 1927. Fall was eventually convicted of bribery, was fined $100,000, and served less than a year in prison. Although oil company officials Sinclair and Doheny were not convicted of conspiracy, Sinclair was found guilty of criminal contempt for jury tampering in a later and related investigation. He also served a short prison sentence of less than a year.

The implications and significance of this scandal have drawn mixed comments from historians. Supporters of conservationist policies and critics of excessive business influence on government officials could claim to have prevailed in this controversy, but questions related to the appropriate roles of business and government in natural resource development and planning remain unresolved.