May 22, 2011

Teapot Dome: Literature and Litigation

by Mark B. Thompson
I must admit my surprise in February 2008 when I first saw a Los Angeles Times book review of Laton McCartney’s book, The Teapot Dome Scandal: How Big Oil Bought the Harding White House and Tried to Steal the Country. Really! After over 80 years and numerous political scandals would Americans still be interested in a 1920’s political scandal? Notwithstanding the involvement of an ancestor in the litigation, (who died when I was only three years old), I had limited my reading to the chapter on Albert Bacon Fall in W.A. Keleher’s Fabulous Frontier, but with this new publication I thought I should see if I could get through a whole book.

McCartney’s book may not have been a “best seller” but you have to appreciate a writer who could start a bribery scandal story with a chapter on an Oklahoma oil man who wanted to be appointed Secretary of the Interior by President Harding, only to be killed by his mistress before Harding’s inauguration on March 4, 1921. As you might guess from the subtitle, McCartney takes a “tabloid” approach to the story and attempts to place Albert Fall of New Mexico, the Secretary of the Interior appointed by Harding, in the context of a corrupt Harding administration. Although it is an entertaining read, and one does learn the basics of the questionable leasing of public lands for oil development, it is not clear that McCartney succeeded in making “Teapot Dome” part of a larger “culture of corruption.” 
Albert Fall (l) and Ed Doheny, with lawyers Frank Hogan and Mark B. Thompson I. Fall and Doheny met in Kingston, NM in 1886. Attorney Thompson is connected to Hillsboro history too, having married Nicholas Galles' daughter, Georgia. This photo was taken during the Teapot Dome scandal trials on Oct. 2, 1929. Courtesy Associated Press
Having survived the first read, I next tried David Stratton’s Tempest over Teapot Dome: The Story of Albert B. Fall, published by the University of Oklahoma Press in 1998. As the subtitle implies, this is a biography of the “main character” of Teapot Dome and the book should please those interested in the New Mexico history. Stratton spends the first two thirds of his book laying the foundation for a story of one man’s malfeasance, not a conspiracy by “big oil” or the “Ohio gang” of President Harding. At the same time, Stratton’s extensive biography of Albert Fall in some ways shows that a “fall from grace” was not inevitable.  Without exonerating Fall of misdeeds, Stratton shows a different context, both political and personal.

W.A. Keleher, a prominent and successful lawyer in addition to his role as a New Mexico historian, does exonerate Fall, at least to the extent of saying he did not believe the evidence showed “beyond a reasonable doubt” that Fall had committed a crime. [Keleher, in his 1962, revised edition of Fabulous Frontier recommends yet another full story, Burl Noggle, Teapot Dome: Oil and Politics in the 1920’s (LSU Press, 1962), which I have not yet read.] It should be noted that Keleher was referring to all of the evidence, not just the evidence submitted to the jury which convicted Fall in the Elk Hills bribery prosecution. On the other hand, we should not overlook the fact that Fall received “loan proceeds” and payment for an interest in his ranch clandestinely and asked a good friend, the publisher of the Washington Post, to lie to a Senate investigating committee. One could conclude that Fall knew he had abused his position as Secretary of the Interior.

What is called “the Teapot Dome scandal,” involved two separate “untapped” oil reserves held by the United States for the U.S. Navy, one at Elk Hills near Bakersfield, California and one north of Casper, Wyoming, commonly known as “Teapot Dome.” The two transactions which led to the scandal(s) are complex but they in essence involved Secretary Fall persuading President Harding to transfer some authority from the Secretary of the Navy to Interior and Fall’s use of the Mineral Leasing Act of 1920 to lease the reserves for exploration and development. As Fall negotiated the deals with their respective companies, he borrowed money from Edward Doheny, giving him a promissory note as consideration, and accepted government bonds from Harry Sinclair, ostensibly as the purchase price for an interest in Fall’s Three Rivers, New Mexico ranch in Otero County. A good synopsis of the two transactions, as well as the “side deals,” can be found in two U.S. Supreme decisions concluding the civil cases brought by the United States to set aside the leases. The holding of both cases is that the executive branch of the government lacked legislative authority to lease the naval oil reserves for development.

Because he is writing a biography, Stratton deals with two issues that are probably of keen interest to New Mexicans. The “defense” of Fall and Doheny in the three criminal cases involving Elk Hills was that Doheny had simply made a loan to a friend. In the final trial, the prosecution of Doheny for giving a bribe, the oilman took the stand and described his early days in Kingston, New Mexico and how Fall came along in 1886, the two men becoming good friends. Stratton does not directly dispute the stories of friendship, but implies that this “mining buddies” story was embellished. It may be that there is no independent evidence, like a partnership in business, for example, that would support the self-serving testimony at trial.

Stratton also covers Fall’s early mining ventures in Mexico and his career in the U.S. Senate. Fall served during the final effort by Congress to find the “common ground” necessary for passage of the Mineral Leasing Act of 1920, with Fall obviously taking the side of the states and natural resource developers. [See e.g., speeches on Aug. 22 & 25, 1919. (58 Cong. Rec. pp. 4168-71, 4269-70 & 4280-90).]  Fall, as Secretary of the Interior just a year after passage of the landmark law, might have taken the “high road,” using his bully pulpit to encourage exploitation of federal lands. We might know him today as the “anti-Gifford Pinchot,” a hero of natural resource development! Instead of becoming an embarrassment for New Mexicans, he might have been hailed as the man who moved our economy forward. One can imagine the legislature renaming a certain resource rich county, originally named for St. John in 1887, as “Albert Bacon Fall County.” It was not to be.

Mark B. Thompson, III is a former member of the New Mexico Bar. His grandfather, Mark B. Thompson, was Albert Bacon Fall's attorney. The eldest Thompson married Hillsboro native, Edith Georgia Galles, daughter of Sierra County pioneer, Nicholas Galles and wife Harriett Stocker Galles.

APPENDIX: The “Teapot Dome” litigation, mostly final results, in chronological order.

(1) December 16, 1926.  Fall and Doheny acquitted by jury of conspiracy to lease Elk Hills.  “Fall And Doheny Freed.” The New York Times (Friday, Dec. 17, 1926), p. 1.
(2) February 28, 1927. In a civil case brought by the government, the U.S. Supreme Court upholds the court of appeals decision terminating the Elk Hills lease on the grounds that the lease violated federal law. Pan-American Petroleum & Transp. Co. v. United States, 273 U.S. 456 (1927).

(3) October 10, 1927.  In a civil case brought by the government, the U.S. Supreme Court upholds the court of appeals decision terminating the Teapot Dome lease on the grounds that the lease violated federal law. Mammoth Oil Co. v. United States, 275 U.S. 13 (1927).  (In this case, the U.S. District Court in Wyoming had denied relief to the government.)

(4) April 21, 1928. Harry F. Sinclair acquitted of conspiring with Albert Fall to obtain Teapot Dome lease.  (Prosecution had originally charged both Fall and Sinclair but proceeded against Sinclair alone due to Fall’s obtaining a continuance due to his ill health; Fall never tried for this crime.)  “Sinclair Acquitted Of Oil Lease Fraud; Jury Out 2 Hours,” The New York Times (Sunday, April 22, 1928), p.1.

(5) October 25, 1929.  Fall found guilty by D.C. jury of taking a bribe from Doheny for the Elk Hills lease.  “Fall Found Guilty in Oil Bribe Case; Jury Asks Mercy,” The New York Times (Saturday, October 16, 1929), p. 1.

(6) March 22, 1930. Doheny is acquitted by a D.C. jury of giving the bribe to Fall to obtain the Elk Hills lease.  “Doheny Is Acquitted Of Fall Oil Bribe; Sees ‘Hounding’ Over,” The New York Times (Sunday, March 23, 1930), p. 1.

(7) April 6, 1931.  U. S. Court of Appeals upholds conviction of Fall for taking a bribe from Doheny.  Fall v. United States, 49 F.2nd 506 (D.C. Circuit 1931). (U.S. Sup. Ct. later denied certiorari, i.e. refused to hear the case.)  Fall is allowed to serve his time in the New Mexico State Penitentiary.  Santa Fe legend has it that he was allowed frequent visits by Mrs. Fall and possibly even unofficial “release time.”

In addition, two cases “arose out of” the Teapot Dome scandal, but technically are not part of the effort by the United States, in either civil or criminal proceedings, to set aside the leases and punish the wrongdoers.  On April 8, 1929, the U.S. Supreme Court upheld the conviction of Harry Sinclair for contempt of Congress, i.e., refusing to give testimony to a Senate committee. (The opinion contains an outline of the Senate investigation history.)  Sinclair v. United States, 279 U.S. 263 (1929).  On June 3, 1929, the U.S. Supreme Court upheld the conviction of Harry Sinclair and others for contempt of court, i.e. for “tampering” with the jury in the conspiracy case against Fall & Sinclair, which had resulted in a mistrial on November 2, 1927.  Sinclair v. United States, 279 U.S. 749 (1929). Sinclair’s sentences for these two criminal convictions would be served concurrently in the District of Columbia jail.   

4 comments:

  1. My Dad, a New Mexican from Old Mesilla, was always amazed that Fall was convicted of taking a bribe, but the man who allegedly paid it was aquitted of his crime. How can there be a bribe if one man took what the other one did not pay? Such a head-scratcher!! I'm sure politics were not involved!

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  2. Good question. The reason for the inconsistent results is that they were tried separately and each jury was entitled to reach its own conclusion based upon the evidence presented at trial and the instruction of the judge on the law. It may also true that Americans hold the public officer to a higher standard and the jurors may have reflected that "prejudice." 'Tis the system! MBT3

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