Old Times and Old Timers

by Don Bullis

New Mexico’s Old Times & Old Timers

The Teapot Dome Affair

During the presidential administration of William Howard Taft (1909-1913), three oil reserves for use by the United States Navy were set aside to insure an emergency fuel supply for the fleet since most ships were by then propelled by diesel engines rather than steam power. The reserves were located at Elk Hills and Buena Vista, both in California, and Salt Creek, Wyoming. The third was better known as Teapot Dome.

In June 1920, late in the administration of Woodrow Wilson, the United States Congress passed a law which gave the Secretary of the Navy control over the oil reserves, and directed that benefits from sale of any oil from the reserves be “. . . for the benefit of the United States.”

The administration of Warren G. Harding began in March 1921, and the president soon appointed New Mexican Albert Bacon Fall as Secretary of the Interior. Fall, a long-time New Mexico political figure, had served as United States Senator since statehood in 1912. Earlier, though, in 1907, Fall had purchased the Three Rivers Ranch in Otero County. The ranching operation was apparently not successful and over the years, the ranch had fallen on hard times. One observer called in “run-down” and another source reported that by 1921, the new Interior Secretary was at least eight years behind in his taxes and faced financial ruin. (One wonders if Fall would have been allowed an eight-year tax delinquency had he not been a United States Senator.)

Soon after Fall moved his office from the Senate Office building to the Interior Department, he convinced President Harding that control of the naval oil reserves should be moved to his department and with Executive Order Number 3474, signed on May 31, 1921, the president did so.

Fall seems to have soon entered into negotiations with his old friend Edward L. Doheny—they had prospected together around Kingston in the 1880s—who over the years had acquired ownership of the Pan-American Petroleum and Transport Company, for leases of the naval oil reserves. In November of the same year, Ed Doheny “loaned” Fall $100,000, which was used to satisfy Fall’s tax problem and also for extensive improvements to the Three Rivers Ranch. (It is noteworthy that Doheny’s son delivered the “loan” to Fall, in cash, in a “little black bag” at his Washington apartment in the dark of night.) The following year, Fall selected Doheny’s company, over two others, for leases of the Elk Hills and Buena Vista reserves.

Also in 1921, Fall negotiated with another of his old friends, Harry F. Sinclair, and his Mammoth Oil Company for leases at Teapot Dome reserve in Wyoming. The lease was signed in April 1922. A month later Fall received almost $200,000 in Liberty Bonds from Sinclair, and more money followed. Estimates are that Fall received a total of more than $400,000 in cash and bonds from his two benefactors.

None of this, of course, went unnoticed. The Albuquerque Morning Journal, via the editorial voice of Publisher Carl Magee, began an exposé in 1922, but Fall was able to hush him up by applying political pressure to the paper’s financial backers, finally forcing Magee out of business. The United States Congress, however, could not be silenced. Wisconsin Senator Robert M. LaFollette was quoted as saying, “. . . the sluice-way for ninety percent of the corruption in government” is Fall’s Department of the Interior.

All of this had a debilitating effect on President Harding, who said, “I have no trouble with my enemies . . . It is my . . . friends that are giving me trouble.” The president died in August 1922. Fall resigned eight months later in March 1923.

That did not conclude the matter. There were numerous congressional hearings and a total of eight trials of those involved in the scandal, beginning in 1926. Doheny was acquitted of bribery, as was Sinclair, although he was convicted of jury tampering. Fall took the hardest hit: he was convicted of accepting a bribe and sentenced to a year in jail and fined $100,000. He did his jail time in the New Mexico state prison, from July 1931 to May 1932 although he never paid his fine. He thus became the first Presidential Cabinet Secretary to be convicted and imprisoned for misdeeds in office.

Fall never admitted guilt. Former New Mexico Territorial Governor and Congressman George Curry said this: “I believed then, and continue to believe now, that Fall’s troubles were due to bad judgment rather that dishonesty.” It is interesting to note that throughout Curry’s account of the case, which he called “The Fall Tragedy,” he only makes mention of Doheny’s $100,000, completely ignoring Sinclair’s $300,000. (Note that both Fall and Curry had been active Democrats and switched to Republican because of their associations with Theodore Roosevelt during the Spanish-American War.)

New Mexico historians Gordon Owen and Will Keleher tend to agree with Curry. Others historians do not. Presidential biographer and historian William Degregorio stated flatly, “. . . Albert Fall sold for personal gain the nation’s oil reserves at Wyoming’s Teapot Dome.”

Still, one wonders, how could Fall have been convicted of receiving a bribe when no one was convicted of providing it in the first place?

 

SELECTED SOURCES: Charles Bennett, “Albert Bacon Fall,” New Mexico Magazine, October 2003

Leslie E. Bennett. “One Lesson From History: Appointment of Special Counsel and the Investigation of the Teapot Dome Scandal,” The Brookings Institution, 1999

Bullis, New Mexico Historical Biographies

Curry, Autobiography

Mark Gilderhus, “Senator Albert B. Fall,” New Mexico Historical Review, October 1973

Owen, Two Alberts

Portales Valley News, May 12, 1932

Twitchell, Old Santa Fe: The Story of New Mexico Ancient Capital

Joe S. Sando, Pueblo Nations

Marc Simmons, “The Enchanted Mesa: myth or true tale?” The New Mexican, May 20, 2006

Don Bullis’ newest book, Unsolved: New Mexico’s American Valley Ranch Murders & Other Mysteries, was published in early October. It may be ordered from Rio Grande Books at www.LPDPress.com