Teapot Dome Scandal (1922-1923)
"I am not worried about my enemies. It is my friends that are keeping me awake
at night." President Warren G. Harding
Return to Normalcy?
Many presidential historians compare Harding's presidency to that of Ulysses S. Grant. Harding's
cabinet, like Grant's, had some of the best minds and some of the worst. Harding quickly established
a pro-business tone and called for a 'new era of prosperity for America.' Tax cuts were made to bring
the nation out of the brief, but impacting, post-war slump and a more lenient attitude towards
government oversight of corporations was adopted. Regulatory agencies created during the
Progressive Era remained but were rendered ineffective.
Like Grant, Harding is remembered for scandal more than any of his policies. Three years after
being elected, Harding learned that an official in the Veterans Bureau was stealing medical and
hospital supplies and selling them for profit. The official fled to Europe and resigned. Harding's
General Counsel committed suicide, and a close friend of the Attorney General shot himself. The
Attorney General himself was accused of mishandling German assets that were seized during World
War I.
Teapot Dome Scandal
So what was the Teapot Dome scandal? The affair took its name from Teapot Dome, a rock
formation in Wyoming that looked like a teapot and, more importantly, stood atop a large
government naval oil reserve. The scandal was the most famous of several scandals that ruined the
reputation of President Warren G. Harding, who served from March 1921 to August 1923 and is
often described as the worst president our country has ever had. At its bare bones, Teapot Dome is
a simple case of bribery. Secretary of the Interior Albert Fall, a former senator from New Mexico and
a friend of Harding's, was convicted of taking bribes from oil executives. Oilman Harry Sinclair
obtained leases to drill for oil at Teapot Dome, Wyoming, and Edward Doheny acquired leases for
reserves at Elk Hills, California. Fall received in the neighborhood of $400,000 in cash and gifts from
Doheny and Sinclair. Like the details of the various Enron accounting maneuvers, the details of the
Teapot Dome Scandal (1922-1923)
oil leasing were complicated. For the public it was reduced to Fall granting favors to friends who had
given him a great deal of money.
At first, Fall's oversight of the leasing seemed unimportant. When asked about the secrecy of the
arrangements Fall replied that national security required it. Doheny similarly evoked patriotism and
security to justify his actions. However, progressives and environmentalists unhappy with Fall's
policies continued to pursue the matter, leading to congressional investigations. Fall refused to
testify before congressional committees, witnesses pled the Fifth Amendment, and insiders testified
to widespread corruption. Eventually Fall earned the dubious distinction of being the first cabinet
member to go to prison for a crime committed while in office, thus forever linking Warren Harding's
administration with corruption. All told, Teapot Dome was a significant part of the political landscape
for close to a decade.
RELATIONSHIP BETWEEN GOVERNMENT AND MONEY
Obviously, Teapot Dome did not lack in drama. Teapot Dome, however, involved more than a simple
case of bribery. Teapot Dome became a shorthand description, used in much the same way as the
term "Watergate" (or the seemingly ever present suffix 'gate'), to stand for scandal. During the 1920s
Teapot Dome stood for the scandalous relationship between money and political influence. As David
H. Stratton, author of Tempest Over Teapot Dome, noted, the Teapot Dome scandal" reached far
beyond one person's ambitions or a squabble over how to handle the national patrimony. It also
involved the Harding administration's government reorganization plans, national defense, and a
world oil famine that never materialized." (p. 229) Here, certainly, are themes that sound familiar
today.
In retrospect, Teapot Dome seemed the logical culmination to the election of 1920. During the 1920
primaries there were charges that wealthy individual were trying to buy the election and
congressional investigations followed. Journalists and progressives charged that the convention that
nominated Warren Harding was unduly influenced by oilmen looking to roll back progressive era
conservation measures. Doheny became involved in the election because he had enormous
investments in Mexican oil and hoped to have a hand in shaping United States Mexican policy. The
sticky oil money also touched the Democrats. Democrats and Republicans alike squirmed when
Doheny testified that he had given money to members of both parties "for their influence." William
McAdoo, Woodrow Wilson's son-in-law and the leading contender for the Democratic presidential
nomination in 1924, had served as an attorney for Doheny's oil businesses. This connection would
help to derail McAdoo's presidential ambitions. Both parties had ties to the oil industry and a great
deal of money at stake.
Significance
Teapot Dome, writ large, was about money and elections. By the time Fall and Sinclair were
found guilty and Doheny was found innocent in a court of law the scandal had run its course.
Teapot Dome never reached President Harding personally. It did, however, contribute greatly
Teapot Dome Scandal (1922-1923)
to the ruin of his administration's reputation. The true lesson of Teapot Dome lay not in the actions of
one man but rather in the uneasy relationship between government and money. - See more at:
http://historynewsnetwork.org/article/550#sthash.EALtUvZE.dpuf
- See more at: http://historynewsnetwork.org/article/550#sthash.EALtUvZE.dpuf