Teapot Dome

In the early 1920s, as America embraced its growing industrial might and global ambitions, a scandal began to simmer beneath the rocky soil of Wyoming. It centered on an otherwise quiet expanse of land called Teapot Dome, named for a curious rock formation resembling a teapot. But this was no whimsical landmark—beneath it sat a strategic oil reserve, one of three naval petroleum stockpiles set aside by the federal government to fuel the U.S. Navy’s transition from coal to oil. As ships grew faster and naval warfare more complex, oil became a lifeline of American defense planning.

These oil fields, including Elk Hills and Buena Vista Hills in California and Teapot Dome in Wyoming, had been designated as emergency reserves under the administrations of Presidents William Howard Taft and Woodrow Wilson. By 1921, these reserves had become critical to both national security and heavy industry. But they had also become irresistible to powerful oilmen eager to tap into what they saw as a goldmine of black gold.

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Into this environment stepped President Warren G. Harding, elected in 1920 on a platform of “return to normalcy.” Harding was a popular man, affable and gregarious, but far more trusting than prudent. His administration was quickly marred by questionable appointments and cronyism, dominated by a group of close political allies and poker buddies known as the Ohio Gang. Even before the Teapot Dome scandal broke, Harding’s presidency was under pressure. Corruption allegations swirled around the Veterans Bureau, the Justice Department, and other federal agencies. Public confidence was already fraying. Then came the oil.

Albert B. Fall, a former U.S. Senator from New Mexico and longtime Harding ally, became Secretary of the Interior in 1921. Known for his rugged frontier charm and deep ties to industry, Fall wasted little time asserting himself. He persuaded Harding to transfer control of the naval oil reserves from the Navy Department to the Department of the Interior—a move made quietly through an executive order in May 1921. Once he had control, on April 7, 1922, Fall orchestrated secret, no-bid leases to two wealthy oilmen: Harry F. Sinclair, head of Mammoth Oil (a subsidiary of Sinclair Oil), and Edward L. Doheny of Pan-American Petroleum.

These leases gave Sinclair exclusive rights to drill in Teapot Dome and granted Doheny access to Elk Hills. Both deals were executed without competitive bidding, a legal loophole allowed by the Mineral Leasing Act of 1920, but the secrecy of the agreements and the sudden windfall of federal oil to private companies raised eyebrows. The justification offered was that these leases would support infrastructure projects beneficial to the Navy—such as pipelines and oil storage—but the benefits were minimal compared to the profits the oilmen would reap.

Soon, the deals started to stink. Fall, once deeply in debt, began buying up land, paying off back taxes, and expanding his New Mexico ranch. He resigned from office in early 1923, and shortly afterward took a lucrative job with Sinclair. The transformation of Fall’s finances raised suspicions—particularly from journalists, political watchdogs, and rival oil companies.

The scandal erupted publicly on April 14, 1922, when The Wall Street Journal reported on the secret lease to Sinclair. The very next day, Senator John Kendrick of Wyoming introduced a resolution calling for an investigation. Senator Robert M. La Follette of Wisconsin led the charge, but it was the quiet and dogged work of Senator Thomas J. Walsh of Montana that ultimately broke the case open.

Walsh’s investigation took over two years. At first, the paper trail was elusive—Fall had taken great care to conceal the origins of his wealth. But eventually, the truth emerged: Doheny had given Fall a $100,000 “loan” in cash, delivered in a black satchel by his son and a friend. Sinclair had provided additional payments, including $233,000 in Liberty Bonds and livestock, through intermediaries. Together, the oilmen had funneled over $400,000 to Fall—an enormous sum in the 1920s, equivalent to more than $7 million today.

While the leases themselves had been technically legal under the law, the bribes were not. The scandal broke wide open in 1924. Civil suits were filed to void the leases, and the U.S. Supreme Court ruled both the Teapot Dome and Elk Hills leases corrupt and invalid. The government reclaimed the reserves.

Albert Fall was convicted of accepting bribes in 1929 and sentenced to one year in prison and a $100,000 fine. He became the first former Cabinet official in U.S. history to be incarcerated for crimes committed while in office. Sinclair was convicted of contempt of court and jury tampering, serving six months in jail. Doheny, despite having supplied the infamous $100,000 bag of cash, was acquitted of bribery—largely due to his defense that it was merely a loan between old friends. The irony was bitter: the man who took the bribe went to jail; the men who paid it walked free.

President Harding did not live to see the full unraveling. In August 1923, while on a speaking tour of the West, Harding died suddenly in San Francisco, likely of a heart attack. His death spared him political accountability, but not the tarnish. Historians and the public alike came to view Harding as a man overwhelmed by the very friends he trusted.

The Teapot Dome scandal rocked public confidence in government and became a benchmark for corruption, unmatched until Watergate half a century later. The scandal led to several lasting reforms. The Revenue Act of 1924 gave Congress the power to access any American citizen’s tax records, and the Supreme Court decision in McGrain v. Daugherty (1927) affirmed the Senate’s authority to compel witness testimony in investigations. The episode also helped usher in a new era of government accountability and oversight, including greater regulation of natural resource management.

Though Calvin Coolidge, who succeeded Harding, weathered the scandal politically and won re-election in 1924, the damage to Harding’s reputation was irreversible. His name would forever be tied to a tale of oil, betrayal, and broken trust.

In the end, Teapot Dome became more than a scandal—it became a symbol. It served as a sobering reminder that even in a democracy, power can be abused behind closed doors. It illustrated the need for transparency, vigilance, and the courage of those willing to ask hard questions. And it left a legacy of caution for every administration that followed: the cover-up is often worse than the crime, and the American people will not tolerate corruption forever—not even when it comes dressed as patriotism, prosperity, or presidential privilege.