Teapot Dome Scandal

Long before the Watergate Scandal in Washington D.C. the Teapot Scandal shocked the nation. During the administration of Theodore Roosevelt the nation’s first true interest in conservation began to emerge. While national parks and reserves were being developed, locations of vast mineral wealth were put under the control of the U.S. government. The National Oil Reserve Law passed in 1904. The purpose of this law was to provide necessary fuel for the Navy, which had converted from coal to oil around the turn of the century. President Taft designated an area of nearly 10,000 acres north of Casper as a Naval Reserve and closed it to private exploration. The area was called Teapot Dome, named for the huge rounded sandstone formation with a column and arch that appeared to have a handle, that has since eroded.

In 1920 Warren Harding was elected and the policies towards conservation were loosened and the oil field control was transferred to the Department of the Interior from the Department of the Navy. The Secretary of the Interior, Albert B. Fall, decided that the reserves were unnecessary. He leased the Teapot Dome Reserve to Harry F. Sinclair, an oil tycoon, of the Mammoth Oil Company. The lease had been arranged secretively and without competitive bids. Rumors began to fly with the largest gusher of oil that anyone had ever seen in Wyoming.

The “The Teapot began to steep” when Senator John Kendrick of Wyoming heard the rumors about the lack of competitive bidding. He forced the disclosure that Sinclair’s oil company had received the sole lease. Hearings on the Teapot Dome oil lease began on October 15, 1923 before the Senate Committee on Public Lands and Surveys. Senator Thomas J. Walsh, a Democrat from Montana, led the committee’s investigation.. Senate hearings in 1923 disclosed that Secretary Fall had received over $400,000 in no interest loans from Sinclair, along with other gifts. A civil suit filed against the Mammoth Oil Company in 1925 found the practices legal. However, the U.S. Supreme Court upheld a later government appeal and that decision was reversed. The lease was invalidated .

The government regained control of the reserves in 1928 and Sinclair was ordered to serve prison time and pay fines to the United States for the oil that had been pumped from Teapot Dome. Secretary Fall was convicted of fraud and bribery in 1929. He was fined and served prison time for his actions. The extent of President Harding’s guilt in the scandal has never been fully determined.