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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
The illicit profit was divided among the four oil men: Sinclair took about $750,000, Stewart $760,000, Blackmer $763,000, and O’Neil $800,000. (Humphreys got no cut, but of course he had made a neat—and legitimate—profit on the oil he sold to Continental.) At the time, none of them told the directors of their respective companies what was going on. Blackmer put his bonds into a safe-deposit vault; O’Neil kept his for four years and then turned them over to his company. In strict secrecy Stewart handed over his share to an employee of his firm, who hid the bonds in a far corner of a company safe. Sinclair took his money home. It was finally proved that he had given Fall a total of $304,000.
When the heat was really on, all these men left the country. Blackmer and O’Neil went to Europe and stayed there. Stewart went to Cuba, but finally came back to bully and berate the Senate committee investigators, refusing to answer their questions. In 1928 he was tried for contempt of the Senate and for perjury and was acquitted both times.
The Rockefeller family, of which John D. Rockefeller, Jr., was now the active head, owned nearly fifteen per cent of the stock of the Standard Oil Company of Indiana. John D., Jr., had tried unsuccessfully to get Stewart to make a clean breast of everything, and after his refusal, managed to get the stockholders to oust him at the next annual meeting. Stewart lost his job, with its $125,000 annual salary, and was forced thenceforth to scrape along on a pension of $75,000.
In January, 1924, after inconclusive testimony before the Senate committee, Sinclair had hurried off to Europe under an assumed name. But he came back some months later, for several reasons. His far-flung business enterprises demanded his presence; he believed his tracks had been well covered; and finally, he thought with some reason that he was too important an individual to be made to suffer seriously at the hands of the law.
In the meantime, the Senate committee had dug up some interesting evidence. Sinclair’s secretary had remarked casually to Archie Roosevelt, who was then a Sinclair employee, that Sinclair had turned over $68,ooo to the manager of Fall’s ranch. Archie, after resigning his position, told the Senate committee about the money, and the secretary was summoned. All a mistake, this gentleman explained. He had not said “sixty-eight thou’.” He had said “six or eight cows”—which anyone knows sounds much the same. Sinclair had in fact given Fall six heifers and a bull, and thrown in a horse and six hogs for good measure.
Since the committee still seemed skeptical, the secretary tried a new tack. He had indeed mentioned $68,000, but it was not money intended for the manager of Fall’s ranch. He had been talking about the transmission of money to the manager of Sinclair’s own farm—his celebrated racing stable.
Fall was by now out of the Cabinet, having finally been dismissed by Harding’s successor, President Coolidge. When at last they got him on the stand (over his doctor’s protest), he took the Fifth Amendment.
But by now too much was known to keep the story bottled up. With the utmost difficulty, Coolidge was finally persuaded to authorize court proceedings. He announced that he would appoint a prominent Republican and a prominent Democrat to act jointly in carrying through the investigation, and in prosecuting whatever cases seemed to justify it. His Republican was Owen J. Roberts, a little-known but reputable attorney from Philadelphia who had tried cases for the government during the war under the Espionage Act. Roberts’ Democratic colleague was former Senator Atlee Pomerene, who was now practicing law in Cincinnati. They had two able assistants, George Chandler and Ulrich J. Mengert, and four skilled members of the Secret Service, led by William H. Moran.
Roberts and Pomerene asked the courts to appoint temporary receivers to take charge of operations at Teapot Dome and the fields in California leased to Doheny, and to impound all the oil produced, until the cases had been decided in which the government was asking cancellation of the leases. This was done.
The two presidential appointees and their staff now began a monumental task of detective work, interviewing hundreds of people and checking bank records, brokerage accounts, and other files in half a dozen states and Canada. Finally, when they thought they had airtight evidence, they brought a group of civil and criminal actions, which were prosecuted with great skill. It was not the fault of Roberts and Pomerene that the results were rather disappointing as far as sending people to iail was concerned.∗
∗The national attention Roberts received was to be a factor in his appointment as Associate Justice of the United States Supreme Court in 1930 by President Hoover. Pomerene was considered for the Democratic presidential nomination in 1928, and later was chairman of the Reconstruction Finance Corporation.