Teapot Dome scandal had New Mexico roots
It has been 100 years since littlenoticed, no-bid oil leases in Wyoming and California were engineered by then-Secretary of Interior and former New Mexico Senator Albert Bacon Fall, sending Fall to jail and rocking a presidency.
The story reads like a film noir script: a cabal of wealthy oilmen hand-picking a presidential candidate, bribes, bags of cash, a murder-suicide, and a muckraking Albuquerque journalist, all amid the flow of Prohibition liquor and the whiff of Cuban cigars.
The Teapot Dome scandal and the events of today are different, said historian Paul Hutton, a professor at the University of New Mexico. But he sees similarities.
“I don’t think there has been a greater, more sensational fall, sort of from grace, than we are seeing right now. Certainly, you can compare it to Watergate and Nixon, and to Harding (President Warren G.),” Hutton said in a phone interview last week. “The three great scandals in American history are going to be Teapot Dome, Watergate and, now, Mr. Trump’s … we still don’t know how that’s going to play out.”
Riches of oil
In 1921, with automobiles becoming more prominent and the Navy already switching from coal to oil-driven ships, the demand for and price of oil was increasing. Harry Sinclair from the East and Edward Doheny from California, the oil tycoons of day, helped put Harding in office and they eyed new sources.
The Teapot Dome oil field in Wyoming, named for a rock formation, and two in California were earmarked as U.S. Naval Petroleum Reserves, set aside in the event of war.
They had to be transferred to the Department of Interior before leasing, which needed presidential approval.
Enter Fall, the Republican senator from New Mexico, who was elected in 1912.
“He is certainly one of the most notorious characters in all of New Mexico history, and goes back to the wild west days of New Mexico and his involvement in killings down in southwestern New Mexico, including the killing of Pat Garrett,” said Hutton.
Author Laton McCartney describes the corrupt Harding presidency and Teapot Dome investigative Senate hearings, which spawned today’s congressional subpoena powers, in his book, “The Teapot Dome Scandal — How Big Oil Bought the Harding White House and Tried to Steal the Country.”
Fall wore a black Stetson and, with “the six-shooter he often carried as a sinister accessory, Fall was a living icon of a frontier that had all but vanished,” wrote McCartney.
Secret oil leases
According to McCartney, as Interior secretary, Fall put the naval oil reserves first. “His first act was to fire the conservationists in the department and replace them with his own people,” he wrote.
Harding joined the Senate after Fall and — along with Assistant Secretary of the Navy Theodore Roosevelt, Jr. — were card-playing and drinking buddies.
Roosevelt Jr. was an intermediary between the Navy and the Department of Interior and, in 1921, President Harding signed an executive order transferring the oil reserves to Interior. Roosevelt’s brother worked for oilman Sinclair.
“Did the president actually read it? Likely not. Harding was not much for details,” McCartney wrote.
The leases between Interior and Doheny and Sinclair were first reported by the Wall Street Journal in April 1922.
Journalist sniffs out corruption
“Doheny made a $100,000 no-interest loan to Fall, which was a huge amount of money in those days and, in this way, Fall was able to save his big ranch down on the Tularosa,” said Hutton. “And that was kind of his undoing because that’s how the local reporters sort of got on to him … . It was like, wow, where did he come into all this money,” said Hutton.
One who noticed was lawyer Carlton “Carl” Magee, who acquired, and was publisher/editor of the Albuquerque Morning Journal, a precursor to the Albuquerque Journal.
“Magee was just critical to this because the folks in Washington were kind of dragging their feet … he was the one who kind of blew the story wide open,” said Hutton.
Fall, a co-owner, sold the paper to Magee, who became “the most virulent of his (Fall’s) critics,” McCartney wrote.
Fall invited McGee to his vast Three Rivers Ranch near Tularosa where he conceded he was broke and land poor. “He hadn’t paid taxes on the Three Rivers spread in six years,” McCartney wrote.
In “a rambling, bourbon-fueled discourse on New Mexico politics” Fall told Magee “whose boots the newcomer should be careful not to tread on, number one on the list being Albert Bacon Fall,” McCartney wrote.
“New Mexico politics then were amazingly corrupt, sort of establishing a grand tradition, and Fall is sort of the poster child,” said Hutton.
Magee wrote about many incidents of state corruption. The newspaper Fall had owned “was pillorying him. Albert Fall was becoming a laughing stock in his home state.” Fall threatened Magee to back off “or I’ll put you in the rack and break you,” McCartney quoted him as saying.
Magee was no pushover. In 1923, at the Meadows Hotel in Las Vegas, New Mexico, now the El Fidel, Magee pulled a pistol and fired after a judge he had written about knocked Magee down. A bystander was killed and Magee was found innocent of manslaughter. He returned to Oklahoma, where he invented the parking meter.
Bribery, fraud convictions
After numerous Senate investigations, in 1929, Fall was convicted at trial of bribing Doheny and sentenced to one year in prison and a $100,000 fine, the amount Doheny “loaned” him.
Robert Geronimo, chief Geronimo’s son, was a character witness at trial for Fall, McCartney wrote.
Magee testified before a Senate committee that “I have withstood personal assaults, advertising boycotts, civil libel suits, criminal libel convictions, social ostracism, and personal vilification in carrying the banner of decency against Fall and his New Mexico gang,” McCartney quotes him saying.
Fall spent almost a year at the New Mexico State Prison in Santa Fe. An attempt at a presidential pardon was denied by President Herbert Hoover.
Tycoons Doheny, his son Edward Jr., and Sinclair were all indicted for fraud. Five years after the same judge convicted Fall, the senior Doheny was acquitted.
In New Mexico, Fall “understandably expressed puzzlement that he could be convicted of taking a bribe while the man who had given it to him had gotten off scot free,” McCartney wrote.
Doheny Jr., was murdered or committed suicide (see sidebar) before trial and oilman Harry Sinclair went to prison for a $269,000 “loan” he had made to Fall.
The scandal takeaway: “I think it really brought attention to corruption in American politics … and it destroyed the Harding administration,” Hutton said. “I think New Mexico was the hero in this story.”