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The Teapot Dome Scandal

The Teapot Dome Scandal was one of the earliest scandals in the American business.

Three naval oil fields, Elk Hills and Buena Vista Hills in California and Teapot Dome in Wyoming, was public land that were reserved by previous presidents to be emergency underground oil supplies to be used by the navy only when the regular oil supplies diminished.

 

The Teapot Dome oil field received its name because of a rock resembling a teapot that was located above the oil-bearing land.

In June, 1920, Congress passed a bill that stated that the Secretary of the Navy would have the power "to conserve, develop, use and operate the same in his discretion, directly or by contract, lease, or otherwise, and to use, store, exchange, or sell the oil and gas products thereof, and those from all royalty oil from lands in the naval reserves, for the benefit of the United States.”

In 1921 Albert Fall was appointed as Secretary of the Interior by President Warren Harding.

Fall then convinced Secretary of the Navy Edwin Denby to turn the control of the oil fields over to him.

 

Soon after two of his friends, Harry F. Sinclair (Mammoth Oil Corporation) and Edward L. Doheny (Pan-American Petroleum and Transport Company), were allowed to lease part of these Naval Reserves, including Teapot Dome.

It soon became known that Albert fall was spending large sums of money. In fact fall had received "gifts" from ,Harry F. Sinclair (Mammoth Oil Corporation) and Edward L. Doheny (Pan-American Petroleum and Transport Company) totaling $400,000.

Hearings on the Teapot Dome oil lease began on October, 1923.

Following were a number of civil and criminal suits related to the Teapot Dome scandal.

In 1927 the Supreme Court ruled that the oil leases had been corruptly obtained and invalidated the Elk Hills lease in February of that year and the Teapot lease in October of the same year.

Albert Fall was found guilty of bribery in 1929, fined $100,000 and sentenced to one year in prison.

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