Albert B. Fall and the Teapot Dome Scandal

Teapot Dome Scandal was one of many scandals that rocked the White House during the 1920s. At the center of the scandal was Senator Albert B. Fall of New Mexico, who had been appointed to the position of Secretary of the Interior by President Warren G. Harding in March 1921 ("Cabinet member guilty in Teapot Dome scandal"). Fall used his position to illegally lease government-controlled oil fields to private oil companies.

The Teapot Dome Scandal occurred when naval petroleum reserves in Wyoming and California -- specifically at Elk Hills and Buena Vista, California and Teapot Dome, Wyoming -- were illegally leased to private oil companies at low, non-competitive rates (Zecks). These oil reserves in California and Wyoming were public lands that had been set aside by previous presidents and were intended to provide emergency oil to the U.S. Navy if and when regular oil reserves had been depleted (Zecks). Many politicians and private oil companies were opposed to these federal restrictions because they believed that naval oil reserves were unnecessary, and if and when the Navy needed oil, they could be supplied by private American oil companies (Zecks). One of the politicians opposed to the regulation of these oil fields was Fall.

Almost immediately after being appointed to his position as Secretary of the Interior, Fall persuaded Secretary of the Navy Edwin Derby to turn over control of the oil fields to him (Zecks). After control of the oil fields was handed over to Fall, he accepted a $100,000 bribe, which he alleged was an interest-free loan, from Edward Doheny at Pan-American Petroleum and Transport Company for access and control of the oil at Elk Hills, CA. Fall then accepted a more substantial "loan" of $300,000 from Harry Sinclair at Mammoth Oil company for control of the oil at Teapot Dome in Wyoming (Zecks).

In April 1922, the Wall Street Journal reported that the oil fields had been leased without competitive bidding (Rawlings). In October 1923, the U.S. government launched an investigation into Fall and the allegations surrounding the illegal leasing of the oil fields. While a two-year investigation found no concrete evidence of wrongdoing, Fall kept getting richer and documents kept disappearing (Rawlings). In the midst of this scandal, in 1927, control of the oil fields was restored to the U.S. government through a Supreme Court decision; the Elk Hills lease was invalidated in February 1927 and invalidated the Teapot Dome lease in October 1927 ("Cabinet member guilty in Teapot Dome scandal"; Zecks).