Harding

Overview

The Teapot Dome scandal involved the leasing of Navy petroleum reserves to private oil companies without competitive bidding, a practice that was legally permissible under the Mineral Leasing Act of 1920 but was highly controversial and corrupt in its execution.

Albert B. Fall: The Interior Secretary under President Harding, who leased the oil reserves to private companies. Fall was later convicted of accepting bribes from these companies.
Harry F. Sinclair: An oil executive who received the lease for the Teapot Dome oil field in Wyoming through his company, Mammoth Oil, a subsidiary of Sinclair Oil Corporation.
Edward L. Doheny: An oil executive who received the lease for the Elk Hills and Buena Vista oil fields in California through his company, Pan American Petroleum and Transport Company.

In 1921, President Harding issued an executive order transferring control of these oil fields from the Navy Department to the Department of the Interior. This transfer was implemented in 1922 by Interior Secretary Fall.
Fall leased these oil fields to Sinclair and Doheny without competitive bidding. The lease terms were highly favorable to the oil companies, and Fall received significant financial benefits, including a $100,000 no-interest loan from Doheny.
The scandal was uncovered through an investigation led by Senator Thomas J. Walsh of Montana. The investigation revealed that Fall had accepted bribes, leading to his conviction in 1929. However, Doheny was acquitted of paying bribes to Fall in 1930.

The Supreme Court ruled in 1927 that the oil leases had been corruptly obtained and invalidated both the Teapot Dome and Elk Hills leases. The oil fields were returned to the Navy.
Fall became the first presidential cabinet member to go to prison. Sinclair served six months in jail for jury tampering related to the scandal.

The Teapot Dome scandal significantly tarnished the reputation of President Harding, even though evidence of Fall's guilt only emerged after Harding's death in 1923.
The oil fields remained idle for 49 years following the scandal but were reopened in 1976. By 2015, the Teapot Dome oil field had generated over $569 million in revenue before being sold to Stranded Oil Resources Corp. for $45 million.