The Crime Book

(Wang) #1

108


YOU CAN’T


CONVICT A


MILLION DOLLARS


THE TEAPOT DOME SCANDAL, 1921–22


U


ntil Watergate, the illegal
espionage operation that
led to the resignation of
President Richard M. Nixon in 1974,
US political scandals were defined
by the Teapot Dome incident of
the early 1920s. It had nothing to do
with tea, or a dome – it was about
corruption, which was enough to
taint a president’s administration.
Early in the 20th century, the
US Navy converted from coal to fuel
oil. To ensure that it would always
have sufficient supplies of fuel,
President William Howard Taft
designated several of the federal

oil-producing areas as naval oil
reserves – among them was a
piece of land in Wyoming called
“Teapot Dome”.

Politics and oil
In 1921, Taft was succeeded by
President Warren G. Harding,
who appointed a mixture of able
politicians and old cronies to his
cabinet. Among them was Albert
Bacon Fall, secretary of the interior.
In 1921, under pressure from Fall,
President Harding issued an
executive order that transferred
supervision of the Teapot Dome oil

IN CONTEXT


LOCATION
Washington, D.C., US

THEME
Political corruption

BEFORE
1789 –1966 The corrupt
leaders of Tammany Hall in
New York, a powerful
Democratic political machine,
allow mayoral candidates
to buy their support and
influence.

1912 In Britain, senior
members of the Liberal
government profit from inside
information about plans to
issue a lucrative contract to
the Marconi company.

AFTER
1975 The US Senate concludes
that American aerospace
company Lockheed paid
bribes to members of foreign
governments to guarantee
contracts for military aircraft.

Bribery


A bribe is deemed to have taken
place when an individual
exchanges favours with another
party to gain an illegitimate
advantage over what should be
a neutral process. It can take
place at both corporate and
governmental levels.
Even today, in countries
with comprehensive anti-bribery
laws, proving that an illegal
quid pro quo has taken place


  • in which something is
    specifically given in order
    for something to be done in


return – is a formidable task.
This difficulty fuels much of the
controversy around the large
cash contributions lobbyists
“donate” to politicians.
Lobbyists hope these will have
an effect on government policy,
but proving that any eventual
changes in policy were a direct
result of their donations is nearly
impossible.
Bribery investigations tend
to reply on wiretaps or elaborate
sting operations, in which both
parties are tricked into explicitly
stating what they intend to give
and receive.

108-109_Teapot_Dome_Scandal.indd 108 13/01/2017 15:10


109


“Teapot Dome” became part of the
political lexicon, a synonym for
high-level corruption. It was pressed
into play on campaign cards (left)
during the 1924 presidential election.

See also: The Mississippi Scheme 100

WHITE COLLAR CRIMES


field and two oil fields in California
from the navy department to the
department of the interior. Fall then
covertly, and without competitive
bidding, granted exclusive rights to
Teapot Dome to Harry F. Sinclair of
the Mammoth Oil Company. A
similar deal was made with
Edward Doheny of Pan American
Petroleum and Transport Company
for the Elk Hills reserve in
California’s San Joaquin Valley. In
return, Fall received hundreds of
thousands of dollars in interest-free
loans from the companies.
Although these leases and
contracts were technically legal,
Fall’s acceptance of the money was
not. He attempted to keep the deals

I can take care of my enemies
in a fight, but my friends, my
goddamned friends, they’re
the ones who keep me walking
the floor at nights!
President Warren
G. Harding

hidden and to cover his tracks
administratively, but he was seen
spending money lavishly on his
New Mexico cattle ranch and other
business ventures. Suspicions
arose about his sudden prosperity.

The scandal blows open
In 1922, the US Senate launched
an investigation into the leases and
contracts negotiated by Fall, and
his dishonesty was finally exposed.
President Harding was ordered to
cancel the leases, and the oil fields
were shut down. Harding was not
personally implicated in Fall’s illicit
deals, but as the scandal unfolded,
his health began to suffer. In 1923,
he died of a heart attack, before all
the details of Fall’s wrongdoings
were made public.
Fall was found guilty of
accepting bribes in the Elk Hills and
Teapot Dome negotiations. He was
fined $100,000 (£865,000 today) and
sentenced to a year in prison,
becoming the first cabinet member
to be convicted of a felony. His fine
was waived, though, because he
was destitute, and he was released
after nine months on the grounds of
ill health. The heads of Mammoth
Oil and Pan American Petroleum
were acquitted of all charges of
bribery and criminal conspiracy.
Investigations initiated by
Harding’s successor, Calvin
Coolidge, revealed that the Teapot
Dome scandal had been one of
many examples of corruption
during Harding’s tenure. His
reputation was forever tarnished. ■

His friends betray his
trust by accepting bribes
and embezzling
government funds

President Harding
appoints several friends
to senior positions in his
government

Secretary of the interior
Albert Fall leases public
oil reserves, including
Teapot Dome, to private
companies in return for
money and gifts

A senate investigation
into Albert Fall’s activities
begins but President
Harding dies before it
releases its findings

A Congressional
investigation held
after Harding’s death
finds that his
administration
was riddled with
corruption

108-109_Teapot_Dome_Scandal.indd 109 02/12/2016 16:17
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