The Teapot Dome Scandal

Yuto Nakajima

Introduction

Jazz music, flappers, and enough money to fill everyone’s pockets with gold. At first glance it appears that everything was great during the 1920s. American culture took a major leap forward, the stock market soared, and Americans were able to reap the benefits of an urbanized and industrialized nation. However, this era of extravagance and wealth was underscored by a much darker side as corruption within America ran rampant. Insider trading was prevalent throughout the flourishing stock market. Corporate greed fostered poor working environments within industrial complexes. And corruption took place even within the highest levels of government. 

Bribery became a major component of corruption within America during the 1920s. Scandals such as prohibition and bootlegging led to widespread bribery. Immigration quotas were often ignored by officials as they were often secretly paid to turn a blind eye at illegal entries or forged paperwork. However the most significant form of bribery within America occurred during the Teapot Dome Scandal where the American Secretary of the Interior, Albert B. Fall leased oil reserves to the highest bidder. The Teapot Dome Scandal saw corruption occurring at the highest level of government. This infamous moment would serve as one of the first major political schemes which inevitably created a sense of distrust amongst the American people and their government. The Teapot Dome Scandal provides a comprehensive understanding of the emergence of political corruption within the broader tapestry of the 1920s.

The Roaring 20s

The Upswing in the Economy

The economic boom of the 1920s was fostered by rapid and sustained growth, marking one of the most prosperous periods within American history. Key elements such as industrial growth, a growing consumer culture, pro business policies, and the stock market boom all played a pivotal role in this upswing.

The explosion of the industrial revolution allowed for efficient manufacturing processes. Materials such as steel, rubber, and glass saw a major increase in production due to rapid industrialization. Assembly lines drastically increased production and technologies such as electricity, the radio, and the telephone further stimulated economic activity¹. Improved communication and an increase in economic activity eventually led to the growing consumer culture which triggered even more growth in the economy. The consumer culture of the 1920’s is considered to be the birth of the modern consumer culture seen in America today. This consumer culture was able to prompt a boom within the stock market. Americans all over the nation invested in the stock market as optimism and prosperity were at an all time high. On top of all of this, Presidents during the 1920s such as President Harding and President Coolidge promoted pro-business policies in order to sustain this economic growth. Businesses and wealthy industries were able to receive tax cuts and deregulations. These laissez-faire policies allowed for major industries to rise rapidly.²

Greed and Corruption

However amidst all of this economic prosperity came greed. With money flying everywhere, everyone was looking for the quickest way to become rich. This “get-rich-quick” mentality was adopted by everyone, and as a result it created a culture of greed and corruption in America. As mentioned earlier, this greed and corruption made its way to the highest levels of government including members of the presidential cabinet. Albert B. Fall’s scandal is indicative of the idea of corporate greed spreading within America as Fall utilized his bureaucratic power as the Secretary of the Interior in order to amass more wealth through undocumented bribes.

Teapot Dome Scandal: Overview

Who was Involved in The Teapot Dome Scandal?

As the Secretary of the Interior and member of President Warren G. Harding’s presidential cabinet, Albert B. Fall was the central figure behind the Teapot Dome Scandal. Prior to his career as a cabinet member, Fall was a U.S. senator from New Mexico who advocated for pro-business policies. As a senator, Fall built close ties with the oil industry as he built strong relationships with large oil corporations such as Mammoth Oil and Pan American Petroleum.³

In March 1921, Fall was appointed by President Warren G. Harding to become the Secretary of the Interior, a role which is responsible for managing and conserving federal land and natural resources. Fall’s political views and pro-business mindset coincided with President Harding’s agenda. It is important to note that President Harding filled his administration with political allies. Amidst President Harding’s term, many of his political adversaries were involved in their own scandals and became so infamous that historians refer to Harding’s corrupt administration as the “Ohio Gang”. The Ohio Gang utilized their political power to influence industry leaders for fraud and corruption. Several members of the Ohio Gang were eventually convicted for their crimes.⁴

Fall’s greed and corruption fits right into the scandalous environment within President Harding’s cabinet and the Ohio Gang. Oil companies such as Mammoth Oil and Pan American Petroleum benefited greatly from Fall’s schemes. Meanwhile, Fall’s acceptance of bribes allowed him to acquire vast amounts of money in exchange for unfair and lucrative oil leases.

Corruption Unfolds

Secretary Albert Fall’s corruption started when President Harding transferred supervision of the oil reserves located in Teapot Dome, Wyoming as well as two other reserves located within California. These oil reserves were initially under the management of the U.S. Navy through the Taft administration. President Taft gave the Navy control over oil fields in order to ensure that the Navy had enough fuel in reserve. However, in 1921 Fall was able to convince President Harding that the Department of the Interior was better suited to manage these reserves. Once Secretary Fall secured control over the oil reserves in 1922, Fall set up secretive deals with his contacts Harry F. Sinclair from Mammoth Oil and Edward L. Doheny of Pan American Petroleum.⁵ The bidding process for oil was not competitive as Fall granted exclusive rights to these two oil companies. Mammoth Oil and Pan American Petroleum were both already major corporations within the oil industry, and as a result they utilized their wealth to provide substantial gifts and bribes to Albert Fall. In addition, during these lucrative deals, Fall received bribes totalling up to over $400,000 (roughly $6.5 million today when adjusted for inflation). In order to avoid suspicions, these cash payments were disguised as loans. These unsecured loans were paid in cash and held zero interest for Albert Fall.⁶

Albert Fall further covered his tracks utilizing his political ties. In 1921 another oilman, Col. James G. Darden claimed ownership of the oil reserves in Teapot Dome. Fall was able to employ his ties with President Harding in order to cease Darden’s drilling operations at Teapot Dome. In another instance, the Denver Post managed to capture evidence of Fall’s corruption in Teapot Dome. The Denver Post threatened to publicize Albert Fall’s schemes with the Teapot Dome reserves. However it is speculated that once again, Albert Fall’s leverage with President Harding led to the suppression of the Denver Post publishers through additional bribing.⁷

Map Detailing the Teapot Dome Scandal

The Investigation

Despite the fact that Albert Fall did his best to disguise his bribes as leases, he quickly drew suspicion from other officials. Through these bribes Albert Fall became a rich man and his standard of living improved drastically. So much so that the Senate immediately began conducting an investigation in April 1922. Led by Senator Thomas J. Walsh of Montana and the Senate Committee on Public lands, this investigation encountered several suspicious elements including missing documents, the evasion of key witnesses, and several other roadblocks set up by the legal teams of Mammoth Oil and Pan American Petroleum.⁸ Despite these challenges, Walsh remained persistent for over two years. Eventually Walsh was able to find evidence of Fall accepting bribes from Edward L. Doheny which helped unravel more evidence for the case. During the investigation, Doheny admitted to loaning an interest free cash loan to Albert Fall so that Albert Fall could purchase a ranch in New Mexico. Doheny revealed he had sent his son to deliver several black parcel bags filled with about $100,000 in cash.⁹ This discovery set forth a civil and criminal trial in which the Supreme Court ruled against Albert Fall and his scandals. In 1927 the Supreme Court transferred the oil reserves back to the U.S. Navy. In 1929, Fall was officially found guilty of accepting bribes from Doheny and Pan American Petroleum. During his testimony, Fall claimed his secrecy was vital for protecting the location of the U.S. oil reserves. However his testimony fell short as the court refused to believe his statement. Fall was charged with jury tampering and was sentenced to prison for one year.¹⁰

The Impact of the Scandal

The Teapot Dome Scandal held lasting effects on American politics as Americans became weary and suspicious of American politicians. Along with Albert B. Fall, many other politicians throughout all levels of bureaucracy were found guilty of corruption. This public distrust garnered movements and reforms in government policies and practices.

Leading up to the 1924 election, the Democratic party attempted to pin the blame on the Republican party for their corruption and involvement with the Teapot Dome Scandal. However, it was later revealed that the Teapot Dome scandal was not so black and white as members of both parties held some involvement. The Teapot Dome Scandal was complex as it became evident that major Republican and Democrat leaders were beneficiaries of this scandal.¹¹ This political dynamic further highlights the idea that corruption ran throughout all forms of government. Both political parties were involved in corrupt schemes. Additionally both parties had politicians at every level accepting bribes or turning blind eyes. With this growing trend of corrupt politicians, American citizens everywhere called for change.

Damage to President Harding’s Legacy

Following World War 1, President Harding’s administration began with a call to “return to normalcy”. However despite the optimism that Harding’s campaign initially started with, his reputation began to deteriorate following various scandals with the Teapot Dome Scandal being the most notorious form of political misconduct during Harding’s term as president.

Although there is no evidence pointing to Harding’s involvement in bribery and corruption, Harding’s laissez-faire attitude had set the stage for government-business scandals. As the government began to form relationships with various businesses, it became easy for members of Harding’s administration to participate within this corrupt environment. With the rise of the “Ohio Gang” and the fallout following the Teapot Dome Scandal, it is clear that Harding had a poor choice in appointees and lacked oversight and judgment within his political administration. After Harding’s death in 1923, revelations of corruption and greed became increasingly more known in public, thus further tarnishing President Harding’s legacy. Public perception of Harding’s presidential term changed from one of optimism and progressivism to one of corruption, greed, and mismanagement.¹²

Public Trust in Government

The Teapot Dome Scandal held a profound impact on the public view of American politics and government. Americans became increasingly skeptical of the political ties between big corporations and the government. Furthermore, the idea that high-ranking officials held control over the nation’s resources created more distrust amongst American citizens and the government. The Teapot Dome Scandal eroded the trust between the people and government which manifested itself in public scrutiny. American citizens and the public press criticized the government and demanded for transparency from their elected officials. Within the newspaper article depicted below published by The Daily Worker, the author claims that Americans as a whole must utilize their “anger” and “indignation” for “the political education of the masses, and at the same time lead the masses to political action”. ¹³ As newspaper articles and the public press rallied Americans and publicized the Teapot Dome Scandal, more Americans united in order to call out the corruption in American politics. This call for accountability from government officials set the stage for more strict policies and reforms.

Reform Efforts

As previously mentioned, public outcry following the Teapot Dome Scandal triggered significant reform efforts with the intention of preventing more political corruption. These reforms focused on accountability and transparency from public officials. One of the outcomes from this reforms movement was the establishment of rigorous guidelines and rules for leasing government property. A stricter set of codes and regulations ensured that the bidding process behind government purchases/leasing would remain fair, competitive, and transparent. Additionally, Congress passed new legislation which further regulated campaign finances and lobbying. Acts such as the Federal Corrupt Practices Act placed stricter checks and balance processes on campaign funds and reportings. These trends would eventually foster the establishment of agencies and regulations such as the Securities and Exchange Commision leading into the 1930s.¹³ As America began to plummet following the stock market crash in 1929, regulatory processes became more stringent following the reform trends of the 1920s.

Conclusion

The 1920’s is a decade which often holds an optimistic stigma when people recall back to this time period. Nicknamed the “Roaring 20s”, this period is often remembered for the jazz culture and the flappers. This decade is also known for its economic prosperity and consumer culture following the rapid industrialization and urbanization trends of this time. However, hidden behind all of the prosperity is corruption and greed. As more Americans fell to the get-rich-quick mentality, greed and corruption grew rapidly. The Teapot Dome Scandal serves as a stark reminder of the corruption which cultivated during the Roaring 20s. As corruption revealed itself at the highest levels of government, citizens and the press called for transparency and accountability from public officials. While the Teapot Dome Scandal happened about a century ago, its legacy lingers in American politics and history as this scandal sparked the trend of government oversight and reform.

Bibliography

• Bates, J. Leonard. “The Teapot Dome Scandal and the Election of 1924.” The American Historical Review, vol. 60, no. 2, 1955, pp. 303–22. JSTOR, https://doi.org/10.2307/1843188. Accessed 7 May 2024.
• “Teapot Dome Scandal”. HISTORY. June 10, 2019. Retrieved April 14, 2020.
• “Teapot Dome Scandal.” Wikipedia, Wikimedia Foundation, 25 Apr. 2024, en.wikipedia.org/wiki/Teapot_Dome_scandal. 
• “Constitutional Law. Federal Corrupt Practices Act. Congressional Control over Elections of Presidential Electors.” Columbia Law Review, vol. 34, no. 4, 1934, pp. 765–67. JSTOR, https://doi.org/10.2307/1115680. Accessed 7 May 2024.
• Ruthenberg, C E. “Workers Party Throws Whole Strength into Focusing Eyes of Labor on Teapot Scandal.” The Daily Worker, p. Page 4. 
• Dumenil, Lynn. The Modern Temper: American Culture and Society in the 1920s. Hill and Wang, 2007.

Footnotes

1. Dumenil, Lynn. The Modern Temper: American Culture and Society in the 1920s. Hill and Wang, 2007. ↩︎
2. Dumenil, Lynn. The Modern Temper: American Culture and Society in the 1920s. Hill and Wang, 2007. ↩︎
3. “Teapot Dome Scandal”. HISTORY. June 10, 2019. Retrieved April 14, 2020. ↩︎
4. “Constitutional Law. Federal Corrupt Practices Act. Congressional Control over Elections of Presidential Electors.” Columbia Law Review, vol. 34, no. 4, 1934, pp. 765–67. ↩︎
5. Bates, J. Leonard. “The Teapot Dome Scandal and the Election of 1924.” The American Historical Review, vol. 60, no. 2, 1955, pp. 303–22. JSTOR, https://doi.org/10.2307/1843188. Accessed 7 May 2024. ↩︎
6. Bates, J. Leonard. “The Teapot Dome Scandal and the Election of 1924.” The American Historical Review, vol. 60, no. 2, 1955, pp. 303–22. JSTOR, https://doi.org/10.2307/1843188. Accessed 7 May 2024. ↩︎
7. “Teapot Dome Scandal”. HISTORY. June 10, 2019. Retrieved April 14, 2020. ↩︎
8. “Teapot Dome Scandal.” Wikipedia, Wikimedia Foundation, 25 Apr. 2024, en.wikipedia.org/wiki/Teapot_Dome_scandal. ↩︎
9. “Constitutional Law. Federal Corrupt Practices Act. Congressional Control over Elections of Presidential Electors.” Columbia Law Review, vol. 34, no. 4, 1934, pp. 765–67. JSTOR, https://doi.org/10.2307/1115680. Accessed 7 May 2024. ↩︎
10. “Constitutional Law. Federal Corrupt Practices Act. Congressional Control over Elections of Presidential Electors.” Columbia Law Review, vol. 34, no. 4, 1934, pp. 765–67. JSTOR, https://doi.org/10.2307/1115680. Accessed 7 May 2024. ↩︎
11. Bates, J. Leonard. “The Teapot Dome Scandal and the Election of 1924.” The American Historical Review, vol. 60, no. 2, 1955, pp. 303–22. JSTOR, https://doi.org/10.2307/1843188. Accessed 7 May 2024. ↩︎
12. “Constitutional Law. Federal Corrupt Practices Act. Congressional Control over Elections of Presidential Electors.” Columbia Law Review, vol. 34, no. 4, 1934, pp. 765–67. JSTOR, https://doi.org/10.2307/1115680. Accessed 7 May 2024. ↩︎
13. Ruthenberg, C E. “Workers Party Throws Whole Strength into Focusing Eyes of Labor on Teapot Scandal.” The Daily Worker, p. Page 4. ↩︎
14. “Constitutional Law. Federal Corrupt Practices Act. Congressional Control over Elections of Presidential Electors.” Columbia Law Review, vol. 34, no. 4, 1934, pp. 765–67. JSTOR, https://doi.org/10.2307/1115680. Accessed 7 May 2024. ↩︎