Oil businessman Edward L. Doheny (at table, second from right) testifying before the U.S. Senate committee investigating the Teapot Dome oil leases in 1924
Congress subsequently passed permanent legislation granting itself subpoena power over tax records of any U.S. citizen, regardless of position.[4] These laws are also considered to have empowered Congress generally.[5]
The lease terms were very favorable to the oil companies, and secret transactions associated with the two deals made Fall a rich man. He received a no-interest loan from Doheny of $100,000[7]
in November 1921 (equivalent to $1.71 million in 2023[8]). He received other gifts from Doheny and Sinclair totaling about $404,000 (equivalent to $6.9 million in 2023[8]). While the leases were legal, these transactions were not. Fall attempted to keep them secret, but a sudden improvement in his standard of living raised suspicions. He paid up his ranch taxes, for example, which had been as much as 10 years past due. Carl Magee, who later founded The Albuquerque Tribune, wrote about this sudden affluence and also brought it to the attention of the Senate investigation.[9]
Albert B. Fall was the first U.S. cabinet official sentenced to prison in the scandal.
In April 1922, a Wyoming oil operator wrote to his senator, John B. Kendrick, angered that Sinclair had been given a contract to the lands in a secret deal. Kendrick did not write back to the man, but two days later on April 15, he introduced a resolution calling for an investigation of the deal.[10]Republican Senator Robert M. La FolletteofWisconsin led an investigation by the Senate Committee on Public Lands. At first, La Follette believed Fall was innocent. However, his suspicions were aroused after his own office in the Senate Office Building was ransacked.[11][12]
Democrat Thomas J. WalshofMontana, the most junior minority member, led a lengthy inquiry.[13] For two years, Walsh pushed forward while Fall stepped backward, covering his tracks as he went. No evidence of wrongdoing was initially uncovered, as the leases were legal enough, but records kept disappearing mysteriously. By 1924, the remaining unanswered question was how Fall had become so rich so quickly and easily.
Money from the bribes had gone to Fall's cattle ranch and investments in his business. Finally, as the investigation was winding down with Fall apparently innocent, Walsh uncovered a piece of evidence Fall had failed to cover up: Doheny's $100,000 loan to Fall. This discovery broke open the scandal. Civil and criminal suits related to the scandal continued throughout the 1920s. In 1927, the Supreme Court ruled that the oil leases had been corruptly obtained. The Court invalidated the Elk Hills lease in February 1927, and the Teapot Dome lease in October.[14] Both reserves were returned to the Navy.[15]
In 1929, Fall was found guilty of accepting bribes from Doheny.[16][17][11] Conversely, in 1930, Doheny was acquitted of paying bribes to Fall.[18] Further, Doheny's corporation foreclosed on Fall's home[19] in the Tularosa Basin of New Mexico, because of "unpaid loans" that turned out to be that same $100,000 bribe. Sinclair served six months in jail on a charge of jury tampering.[20]
Although Fall was to blame for this scandal, Harding's reputation was permanently sullied[21] because of his involvement with people associated to it. Evidence proving Fall's guilt only arose after Harding's death in 1923.[22]
The Teapot Dome oil field was idle for 49 years following the scandal, but went back into production in 1976. After Teapot Dome had earned over $569 million in revenue from the 22 million barrels (3,500,000 m3) of oil extracted over the previous 39 years, the Department of Energy in February 2015 sold the oil field for $45 million to New York–based Stranded Oil Resources Corp.[15][23]
The Supreme Court's ruling in McGrain v. Daugherty (1927) for the first time explicitly established that Congress had the power to compel testimony.[24]
The Teapot Dome scandal has historically been regarded as the worst such scandal in the United States – the "high water mark" of cabinet corruption. It is often used as a benchmark for comparison with subsequent scandals. In particular it has been compared to the Watergate scandal, in which a cabinet member, Attorney General John N. Mitchell, went to prison, the second time in American history that a member of the cabinet has been incarcerated.[26][9] During the Trump administration, news outlets compared alleged misconduct by members of the Trump cabinet,[27][28][29][30] and specifically by Secretary of the InteriorRyan Zinke,[31][32][33] to the Teapot Dome scandal.
^Watergate & the Teapot Dome Scandal: The History and Legacy of America's Most Notorious Government Scandals (Kindle ed.). Charles River Editors. November 2, 2016. ASINB01N9IMB2P.
