“Harding is all right – any man who chews tobacco is all right.”
–Thomas Edison
While President Warren G. Harding may have been a beloved
figure across America, by February 1923, two years into his
term, the scandals began to mount.
Actually, rumors of Interior Secretary Albert Fall”s secret leasing
of naval oil reserves to his two friends, Edward Doheny and
Harry Sinclair, first came to light the prior April. At that time,
Senator John Kendrick of Wyoming, alerted by one of his
constituents, launched a probe into the Teapot Dome oil lands in
Wyoming, specifically calling on Albert Fall to explain why the
reserves were being secretly leased to Sinclair”s Mammoth Oil
Co. But it took awhile for this action to get going.
Meanwhile, on February 12, 1923, Charles Forbes, in charge of
the Veterans Bureau, was asked to resign by Harding when it
was discovered that hundreds of millions of dollars of supplies
was lost or stolen. Forbes allegedly sold the goods and pocketed
the proceeds. “You double-crossing bastard!” Harding screamed
at Forbes. But rather than prosecute, Harding allowed Forbes to
leave the country.
On March 4, Albert Fall resigned, under growing pressure from
Harding, in order to take a job with buddy Sinclair. The Teapot
Dome investigation was heating up.
On March 14, Charles Cramer, counsel for the Veterans Bureau,
shot himself in the head.
Then on May 29, Jess Smith, assistant to attorney general Harry
Daugherty, was confronted directly by Harding on evidence of
influence peddling in an episode known as the case of “the little
green house on K Street.” [Of the many activities taking place at
1625 K, prostitution was at the top.] Smith shot himself the
following day and this second suicide in just two months had a
debilitating effect on Harding”s morale. As historian Paul
Johnson noted, “Harding could take care of his enemies. It was
his friends who kept him up at night.”
In July, President Harding took a trip to Alaska and the West
Coast. One day he asked Commerce Secretary Herbert Hoover,
“If you knew of a great scandal in our administration, would you
for the good of the country and the party expose it publicly or
would you bury it?” Hoover quickly replied, “Publish it, and at
least get credit for integrity on your side.” [Brown / Shi].
But on his way down the coast from Alaska, Harding was
stricken in Seattle with a heart problem. He made it to San
Francisco where he died on August 2nd.
On his death there was a huge outpouring of grief as the
train bearing his body made its way across the country to
Washington. The nation was in the midst of a boom and the
people were quick to overlook a scandal, or two, or seven.
But later there was little but contempt and scorn for the
president. While he, himself, was innocent, Harding was the
captain of the ship and for years after his death, revelation upon
revelation was provided before the various committees and the
courts. And it didn”t help that a relationship Harding had with
one Nan Britton was brought to light. Harding allegedly fathered
a child (today, deemed to be true), and later, love letters to
another man”s wife surfaced.
Nonetheless, a further reassessment shows Harding deserves
some credit for leading the nation out of the turmoil of the
postwar years and creating the foundation for the decade”s
remarkable economic boom. Alas, however, the problems of his
administration were passed on to the new president, Calvin
Coolidge.
On October 25, 1923, the first meeting of the Senate
subcommittee to investigate the Teapot Dome oil leases was
held, chaired by Senator Thomas Walsh, Democrat from
Montana. Walsh had used the 18 months since his appointment
in the spring of 1922 to study the case and during that time,
public interest in it had died down. But it was quickly
reawakened with the impaneling of a federal grand jury which
indicted Albert Fall, along with Doheny and Sinclair.
As the real proceedings began, Secretary of the Navy Denby was
forced to resign. Denby, while innocent, was an embarrassment
to the Harding administration for allowing Secretary Fall to
establish the oil leases with the oil companies.
Denby volunteered his resignation so that he would not be a
burden to the new President Coolidge, Silent Cal having refused
to ask for it saying, “(He would not) sacrifice any innocent [or]
retain in office any unfit man for my own welfare.”
Early in 1924, the Senate investigations indicated that oil titans
Doheny and Sinclair had bribed Albert Fall, while he was
Secretary of the Interior, in order to gain the leasing rights to the
government”s reserves at Teapot Dome (Wyoming) and Elk Hills
(California).
Historian Robert Sobel relates that “Fall testified that he had
leased Teapot Dome in return for a royalty and the construction
of a pipeline to Kansas City. He said he also leased Elk Hill in
return for a royalty and construction of storage tanks.
Fall argued that the oil was being drained, quite legally, by wells
on adjoining lands. As a result, the reserves would be depleted
in a few years. By leasing the land, Fall argued, the government
received revenues that would otherwise be lost.”
[By the way, in a similar fashion Saddam Hussein likes to charge
that Kuwait is draining reserves from Iraq”s fields. In this
instance, that would be illegal. Kuwait counters that Iraq is
stealing theirs.]
Soon, many in the country were claiming that the entire cabinet
and even Coolidge, himself, had been involved in the oil
transactions. Coolidge remained calm, however, and he reaped
an abundant amount of good will from the way in which he
handled the charges. And he acted quickly.
On January 26, 1924, Coolidge appointed two special counsels, a
Republican and a Democrat, to investigate and take appropriate
action. The appointees, Owen Roberts and Atlee Pomerene,
were beyond reproach as they had the professional expertise
necessary to conduct a fair investigation.
At the same time, Senator Walsh was continuing with his Senate
inquiry. Walsh also had a sterling reputation yet he faced
intimidation from parties loyal to Fall and company. His office
was ransacked, his phones tapped and his daughter warned that
he should lay off. Instead, he followed the money and proved
that Fall lied to the Senate. Experts were called who
contradicted Fall”s testimony that extensive drainage from the
reserves would have transpired without his leases. And Doheny
testified that there was at least 250 million barrels in the Elk
Hills reserve, acknowledging that he expected to make about
$100 million over 30 years on the deal. For his part, Sinclair
testified that he had made $25 million off Teapot Dome just by
fraudulent stock manipulation.
Senator Walsh further learned in picking up the money trail that
Fall, not a wealthy man, had purchased land and made
improvements to same in the amount of $175,000. When
questioned as to this, Fall said he received loan money from a
wealthy friend, Edward McLean. McLean was then asked to
produce checks. But McLean said he gave Fall cash. Finally,
McLean admitted he hadn”t made the loan at all in the first place.
It was shortly thereafter that Doheny and Sinclair said they had
lent Fall $400,000.
As a result of this twisted tail, special counsels Roberts and
Pomerene were able to gain indictments on June 30, 1924 against
Fall, Doheny and Sinclair. But it wasn”t until October 10, 1927
that the Supreme Court ruled that Sinclair”s Mammoth Oil Co.
had fraudulently negotiated the Teapot Dome oil lease.
And then on October 7, 1929, the trial of all three defendants
began. On October 25, Sinclair and Fall were convicted, with
Fall receiving a one-year prison sentence to go with a $100,000
fine. Sinclair received six months, ostensibly because he tried to
bribe the jury. But Doheny actually won acquittal in March
1930.
Albert Fall became the first cabinet member in U.S. history to be
sent to prison for misconduct while in office. Further
investigations revealed that Democrats as well as Republicans
were involved in the scandals that engulfed the Harding
administration.
And maybe it wasn”t just a simple coincidence that Fall was
convicted on October 25.with the Dow Jones at 310. Because
just 4 days later it crashed, closing at 230. And the Crash
signaled the end of an era, in more ways than one.
Sources: See Part I.
Brian Trumbore
