- Historic Sites
Tempest Over Teapot
When the wheeling and dealing of some of President Harding’s closest friends was revealed, the mud spattered Cabinet members, the heads of oil companies, the chairman of the Republican party, and eventually the President himself
August 1965 | Volume 16, Issue 5
Secretary Fall—promptly, secretly, and without the competitive bidding the law required—leased two rich oil reserves to two wealthy men. Elk Hills in California went to his friend of forty years, Edward L. Doheny, who had started with nothing and had accumulated about one hundred million dollars in oil holdings in the United States and Mexico. (Oddly enough, Doheny looked like a much warmer version of Fall, with the same ragged white mustache and weather-beaten face.) Teapot Dome went to Harry Sinclair, reputed to be more than three times as rich as Doheny. The Sinclair lease was for a minimum of twenty years and was to continue indefinitely as long as oil and gas could be produced at a profit. The government was to get a royalty of around sixteen per cent, and Sinclair was required to build some storage tanks and a pipeline. Doheny’s lease required him to build, without profit to himself, :i pipeline and ;i refinery in California and storage tanks at Pearl Harbor. Doheny and Sinclair expected to make at least one hundred million dollars each; since there was much more oil in the ground than anyone then kn:?w, their profits might have been larger still. If the oil lands had been leased under competitive bidding, the government’s share would have been much more than sixteen per cent; M. R. Werner and John Stair, in their book, Teapot Dome , estimate that it might have been worth as much as fifty million dollars.
News of the secret leases leaked out in a few days, and the Senate Committee on Public Lands and Surveys attempted to investigate. Fall brushed its members oil contemptuously, saying that he had taken his action in the interest of national security, which required him to suppress all the details. But the Senate was not satisfied, and in the fall of 1923 there began the long series of investigations and civil and criminal court actions that was to last almost a decade and to reveal the most shocking state of corruption since the Grant administration.
I spent a good deal of time in Washington during these investigations, writing a series of articles on the Ohio Gang for The New Republic , of which I was then managing editor. The reck of corruption hung over the city, apparent to anybody whose nostrils were reasonably sensitive. The spearheads of the Senate investigations were the two able senators from Montana, Thomas J. Walsh and Burton K. Wheeler. I sat in the committee rooms day after day and saw these men put together a jigsaw puzzle, many of whose pieces had been hidden by others with ingenuity and foresight.
Walsh was austere and carefully groomed, impeccable, soft-voiced, polite; he carried a formidable amount ol information in his head. Wheeler was more the rough frontier type, with tousled hair and a truculent attitude toward a squirming witness. Both of them had superlative abilities as detective-prosecutors. On the theory that the investigations were just a Democratic plot, Republican members of the committees did what they could to impede proceedings. The small importance that Washington attached to the investigations in the beginning is shown by the fact that the senators were unceremoniously thrown out of an excellent room into an inferior one because the ladies of the Senate wanted the good one for a tea party.
The members of the Ohio Gang dosed ranks against the attack and tried hard to thwart the investigation, in spite of the fact that Fall had repeatedly refused to let Attorney General Daughcrty give an official ruling that his actions were legal; Fall had a well-founded fear that Daugherty would want a big share of the loot.
William J. Burns had been brought from New York, where he was head of the Burns Detective Agency (today thoroughly respectable), to head the Bureau of Investigation, which was wholeheartedly on the side of the Ohio Gang. Any member of Congress who expressed public criticism was subject to harassment. Senator La Follette’s office was rifled; a detective went to Montana to investigate Senator Wheeler with the hope, as he openly admitted to one or two people, of finding something there that could be used to blackmail him. Senator Walsh was called a scandalmonger and a character assassin; his past life was investigated, his phones tapped, his mail opened; and anonymous letters threatened his life. His daughter, wheeling his three-year-old granddaughter along the street, was intercepted by a stranger who threatened her with harm if she did not force her father to drop the investigation. Female detectives hung around the ladies’ room used by Senator Walsh’s secretaries, hoping Io pick up some valuable gossip.
The members of the Senate who were engaged in lhe investigation refused to be intimidated and went ahead with their work. Their first big break came with news from New Mexico that Secretary Fall’s cattle ranch was showing remarkable prosperity, though his neighbors, because of depression and drought, were turning their cattle loose to survive as best they could.