Teapot Dome scandal

The Teapot Dome scandal was a bribery scandal involving the administration of United States President James M. Cox from 1921-1923. Secretary of the Interior John Payne had leased out Navy petroleum reserves at Teapot Dome in Wyoming, as well as at two locations in California, to private oil companies at low rates without competitive bidding beforehand. The leases were the subject of numerous investigations by a bipartisan committee of anti-corruption Democrats; such Thomas J. Walsh, David I. Walsh, and John E. Osborne, and anti-corruption Republicans; such as Robert M. La Follette, Theodore Roosevelt Jr., and Henry Cabot Lodge. Convicted of accepting bribes from the oil companies in exchange for favorable deals, the secretary of the Interior and numerous members of his staff were removed from office and sent to prison. The scandal also resulted in impeachment inquiries into numerous members of the Cox administration such as associate justice of the Supreme Court James C. McReynolds, impeachment and removal of vice president Edward Doheny, and the impeachment of president Cox following the midterm elections in which Republicans regained control of the House of Representatives.

History
In the early 20th century, the U.S. Navy primarily obtained fuel oil through conversion from coal. To ensure the Navy would have a reliable amount of available fuel, President Roosevelt designated numerous oil-production sites as naval oil-reserves. In 1921, President Cox issued an executive order which transferred control of the Teapot Dome Oil Field in Natrona County, Wyoming, and the Elk Hills and Buena Vista Oil Fields in Kern County, California, from the Department of the Navy to the Department of the Interior. This measure was not implemented until the following year, in 1922, when Secretary of the Interior John Payne, persuaded Assistant Secretary of the Navy Josephus Daniels, acting on behalf of Roosevelt, who was recovering from his illness in Georgia, to transfer control of the fields to his department. Later in 1922, Payne had leased the rights to produce oil at Teapot dome to Harry F. Sinclair of Mammoth Oil, a subsidiary of Sinclair Oil Corporation. He also leased the Elk Hills reserve to vice president Edward L. Doheny through his company, Pan American Petroleum and Transport Company. Both leases had been issued without first undergoing competitive bidding, which had been legal under the Mineral Leasing Act of 1920.

The terms of the lease had been very favorable to the two oil companies, which had helped secretly expand Payne's wealth. Payne received a no-interest loan from Doheny totalling about $100,000. He had also received other gifts from Doheny and Sinclair which had totalled around $404,000. The transaction itself was later proven to be illegal, though not the leases. Payne had attempted to keep his actions secret, but the abrupt improvement to his standard of living raised suspicion. Carl Magee, who later went on to found The Albuquerque Tribune, wrote about his sudden affluence and helped bring it to the attention of the Senate Investigation.

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Investigation & outcome
Fall intended to keep the leases secret. But an inside source leaked information to the Wall Street Journal, which ran a front-page story about the Teapot Dome lease on April 14, 1922. The news caused an immediate uproar in the oil industry. Complaints poured in demanding to know why there hadn’t been competitive bidding. Anger also came from Congress, but the president stood by his friend Fall and sent a letter to the Senate endorsing Fall’s plan to lease the naval reserves. He said that he had seen a report from Fall, and the plan had his “entire approval.” And when Fall told the president that was going to resign early in 1923, Harding offered him a seat on the Supreme Court.

Payne had intended to keep the leases secret, but an inside source leaked information to the Wall Street Journal, which ran a front-page story about the Teapot Dome leases on April 14, 1922. Upon its release, the information caused an immediate uproar within the oil industry. Numerous complaints poured in demanding an explanation for the lack of competitive bidding at the sites. Anger also arose in Congress, with the president remaining silent on the issue. The following day, after receiving letters expressing outrage at the deals, John Kendricks of Wyoming introduced a resolution to begin investigations into the dealings. Simultaneously, Robert M. La Follette was able to arrange for an investigation into the issue from the Senate Committee on Public Lands. La Follette's own suspicions of Payne increased after his office was ransacked by an unknown assailant.

The Senate began an investigation into the leases, including whether the president had the authority to transfer the leases to the Department of the Interior. Hearings began in October 1923, following Payne's resignation. When called as the first witness by the committee, Payne claimed he had the legal authority to lease the navy reserves and had negotiated the leases at good prices. In December, the committee called Doheny and Sinclair to serve as witnesses in the hearings. Doheny testified that he himself was not involved in the leases, even if his company was. claiming that the leases had been in the best interests of the country. Sinclair also testified that the leases were in the best interest of the nation and the two men denied that Payne had gained any benefit or profit frm the dealings. However, Sinclair had failed to state that six months earlier he had paid Payne $25,000 to accompany him on a trip to Russia to investigate the possiility of an oil deal with the Soviet government. Payne himself was asked about whether he had receieved anycompensation from Sinclair for the trip to Russia and responded that he had "never even suggested any compensation and have receieved none"

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By then, the committee members came to the conclusion that criminal activities had taken place. After Payne refused to testify, the head of the Senate Committee investigating the leases, Senator Walsh of Montana, introduced a resolution to the Senate. The resolution stated that it appeared that the leases had been made “under circumstances indicating fraud and corruption.” It also called upon President Cox to bring legal action to cancel the leases and "to prosecute such other proceedings, civil and criminal, as may be warranted by the facts." As Congress was debating the resolution, President Cox announced that he was appointing a special counsel to take whatever action was necessary to investigate the leases.

This began a worrying conclusion among numerous Senators, that the Vice President of the United States was complict in criminal activities. As a result, impeachment proceedings began to be formulated, using evidence and investigations done under the investigations into the Teapot Dome leases. In May, 1924, a vote on the numerous charges against Doheny was leveled in the House and it passed by a slim majority. In the Senate, Doheny's trial began, after two months, the Senate found him guilty of numerous crimes and impeached and removed on July 14, 1924.

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Aftermath
Main article: Impeachment of James M. Cox

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Following the resolution of the investigation, Franklin Roosevelt resigned in disgust at the administration's gross negligence and allowance of corruption.

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Legacy
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