Albert B. Fall and Teapot Dome: The Cabinet Bribe That Sent Him to Prison

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Albert B. Fall, Secretary of the Interior under President Warren G. Harding, became the first U.S. cabinet member sentenced to prison, over the Teapot Dome scandal. The story starts with the Navy's switch from coal to oil and President William Howard Taft's creation of Naval Petroleum Reserves at Elk Hills and Buena Vista in California and Teapot Dome in Wyoming. In 1921 Fall persuaded Harding to sign an executive order moving the reserves from the Navy to Interior, then pressed Navy Secretary Edwin Denby until he completed the transfer in 1922. Fall leased Teapot Dome to Harry F. Sinclair of Mammoth Oil and Elk Hills to Edward L. Doheny of Pan American Petroleum without competitive bidding, which the Mineral Leasing Act of 1920 allowed, while keeping the deals secret and citing drainage and national defense.

Doheny's son carried $100,000 in cash in a black satchel to Washington in November 1921, and Sinclair routed about $90,000 in Liberty bonds to Fall through the Canadian Continental Trading Company. Fall suddenly paid a decade of back taxes on his Tularosa Basin ranch in New Mexico, drawing the attention of Albuquerque journalist Carl Magee. After Wyoming Senator John B. Kendrick demanded an inquiry, Montana Senator Thomas J. Walsh pushed the investigation for two years against resistance from Attorney General Harry M. Daugherty's Justice Department. Fall was convicted of accepting a bribe in 1929, yet Doheny was acquitted in 1930 of paying that same bribe, and his company later foreclosed on Fall's ranch to collect what it called a loan.

• The Supreme Court invalidated the Elk Hills and Teapot Dome leases in 1927 and returned the reserves to the Navy.
• Sinclair served jail time for jury tampering and contempt of Congress, not bribery.
• Senator Robert M. La Follette's Senate office was broken into and ransacked during the inquiry.
• The Revenue Act of 1924 gave certain congressional committees authority to obtain any citizen's tax records.
• McGrain v. Daugherty in 1927 upheld Congress's power to compel testimony after the Senate had bank president Mally Daugherty arrested.