The History Channel Original Podcast.
History this week, April 7th, 1922.
I'm John Earl.
“With the stroke of a pen, Albert Fall really thinks he's pulled it off.”
Fall has worked the land all his life, mining it, farming it, harvesting it. He has a frontiersman's belief that America's riches are there to be exploited. Why lock them away when you can create wealth today? By Fall's own account, the contract is a win-win.
The government gets royalties and new oil storage facilities.
Industry gets to drill one of the richest oil fields left untapped. Only Easterners suffering from what some called conservation hysteria could possibly object. They'd howled when Albert Fall became secretary of the interior. Just think how they'll howl when they hear about this secret contract to drill unprotected land.
“That's why it has to stay hush hush, a little while longer.”
Fall's office in Washington, D.C., is as majestic as the frontier itself. Redwood, panelling, Native American faces etched in glass and a pair of stuffed alaskan eagles. So lifelike that they've seen about to take off. Today, there are few witnesses as Fall signs the contract. Once all the signatures are gathered, he locks the document away in his desk and orders his assistant to tell nobody.
He really thinks he's pulled it off, but big money, really big money is hard to hide. And with his signature, Fall has set in motion a scandal that for half a century will be the textbook example of corruption. Before Watergate, there was T-Pot Dome.
“Today, how did a shady oil contract become a scandal that forever tarnished an administration and defined an era of American politics?”
And how did the T-Pot Dome scandal shape how the government has policed itself ever since? Central Wyoming is a land of sagebrush prairies and big skies. About 50 miles north of Casper, there's this rocky outcropping that once looked, well, a lot like a T-Pot, so much so that passing cowboys named it T-Pot Rock. Driving through here in 1920, you would have seen T-Pot Rock and not much else, but you would have guessed at the richest. Hidden underground. This is oil country, after all.
Those oil pumps that bob up and down, but known as knotting donkeys, and there are thick herds of them just around the bent. America's addiction to oil is just beginning. Demand is skyrocketing. There are model teas and airplanes to fuel. Oil companies are racing to produce more and more of it, and with oil prices at all time highs, they can make huge profits doing it.
T-Pot Dome is the kind of place they would love to drill, but they're not allowed to, because President Woodrow Wilson had set aside the oil underneath and estimated 135 million barrels for the US Navy in case of a national emergency. So T-Pot Dome is strictly off limits. Or is it? It's late, almost midnight in Washington, D-C. Some senators are sitting around a table, working, just kidding, the playing poker, just like they do several times a week. The man with the black stets in hat, that's tonight's host, New Mexico Senator Albert Fall.
Fall is half Washington, half Wild West. Besides the hat, he's got a rugged cigar in his mouth and Rumor goes a six-shooter at his hip. Middle name, Bacon, and he's not cosplay. He really has hung out with sheriff's and gun slingers, and he's a riveting storyteller. Like many frontiersmen, Fall has spent his life making money off the land.
Fall always wanted to exploit the riches of the land, where there was cattle ranching and grazing on the land, or mining, allowing oil drilling.
He felt like the riches of the earth were there for people to take, and he was going to find ways to earn riches from them. Jack McElroy was a newspaper editor in Albert Fall's home state of New Mexico. And he sets Fall's determination to extract value from the land. That makes him a natural ally to the oilman, eyeing T-Pot Dome.
That Fall is a former attorney who knows how to bend the law.
He understands in the West, particularly in the Territories, how things work.
“Joshua Castenberg is a professor at the University of New Mexico School of Law.”
And they don't always work according to the law of contracts or the law of property. They work in many instances according to the law of power.
Fall also loves poker. The higher the stakes, the better. When he goes to Washington as part of New Mexico's first Senate delegation, fall and his Senate buddies get together. They play poker, they sip whiskey, they talk, and it's at these poker parties that Fall becomes tight with another guy at the table tonight. Ohio Senator Warren Harding. Now Harding isn't dumb, but he's probably not the smartest or the most hard working. Instead, he is a natural resource that's much more valuable in politics. He's really likable.
Harding is kind of a nice guy. And absolutely nice guy, a party or two, he was a guy you wanted to have a beer with.
Fall sees something. In this handsome, fun-loving Senator, then in his early '50s.
“At one poker hang, he predicts against all odds that Harding will be the Republican candidate for president in 1920.”
Now maybe Fall just wants people later on to think he's a political genius. Or maybe he really does see which way the wins are blowing, because Harding does in fact win the nomination, despite sort of half-trying. In the general election, he campaigns on a platform of return to normalcy, and he wins by a huge margin. Take his popular vote margin in history, up to that time. What he represents is a return to the good days before the war, and he represents life and kind of the face of a presidency that knows how to have a good time.
Boy does he ever, but we'll get back to that. When it comes time to pick his cabinet, Harding does what many presidents do. People who share his belief that government should encourage big business rather than check its excesses. Which is how Albert Baconfall, Mr. Drill Baby Drill himself, becomes Harding's Secretary of the Interior, the official in charge of managing America's natural resources. Conservationists are outraged by the appointment. Oilmen are pumped. Fallways no time. First, he quietly maneuvers to get tea-pot dome that huge Wyoming oil field reassigned from the Navy Department to his department.
Harding signs off on the transfer, though he's not really a details guy, so it's unclear whether he actually realizes what he's doing.
“Then, in secret, Fall offers oil magnate Harry Sinclair, what looks like the prize of a lifetime. Exclusive rights to develop tea-pot dome.”
The numbers are eye popping. Tea-pot dome contains that 135 million barrels of oil, which if you do the math, works out to over $100 million in profit for Sinclair.
Today, that would be almost $2 billion. No one else has the opportunity to even bid. Fall keeps the negotiation secret, even from the rest of the cabinet. And in April 1922, he signs the deal, locks it in his drawer, and leaves town. Imagine his reaction when just one week later, the Wall Street Journal runs a front-page story, headline. Sinclair consolidated in big oil deal with US, fall shady business, transferring tea-pot dome to his department, and giving Sinclair that no bid contract.
It all becomes public. When the American people find out, they are outraged. It was a nothing burger. America doesn't really care. Harding is writing the crest of a wave of popularity initially.
I mean, it was booming at home, and if there was some irregularity and government contracting, it wasn't likely to upset the American public all that much. What the American people don't know is that behind the scenes, the Harding Administration is just wild. This kind of shady business, it's just another day at the White House, and it starts with the man at the top. For one, Warren Gamelial Harding loved to party.
In her, he'd slip out of the White House and head to a nearby house, he called the Love Ness. By the time the sitting president of the United States arrived,
The booze would be flowing, and the party would be bumping.
These parties just aren't about getting drunk or listening to jazz music.
These parties are about sex. They have naked women, high-class prostitutes coming out of cakes and dancing on tables. Roman origins, and the like at some of these parties. Remember, this is during prohibition. Harding is out there making speeches to the public about the importance of abstaining from alcohol.
And yet, here at the Love Ness, those rules do not apply. And the characters who are at these parties, it's the worst combination you can have. Professional athletes, Hollywood types, the criminal element, and the White House.
“If that weren't enough, the secret party house is run by the Attorney General.”
Warren Harding is often ranked among our worst presidents, not because he liked the party, or fathered a love child with his mistress, which he did. It's because of the crooked company he kept, starting with his inner circle. A group known as the Ohio gang. Here's a taste.
He's already corrupt with the bootlegger, sort of the prohibition era. Smith is taking kickbacks from bankers and bootleggers too. Charles Forbes is corrupt, and then you have the scandal with the alien property custodian. Eventually, the stench of corruption starts to overwhelm even harding. He becomes nervous and distracted.
“When a listening tour in mid-1923, he turns to Secretary of Commerce Herbert Hoover and asks,”
"If you knew of a great scandal in our administration, would you for the good of the country and the party expose it publicly, or would you bury it?"
It's a choice he'll never have to make, because on August 2nd, at a hotel in San Francisco, he dies.
The official cause is a stroke, but a friend offers a different diagnosis. Part shame, and part utter confusion. Harding sort of dies for too easily, in the sense that he doesn't have to fight these things anymore. That includes the biggest gusher of a scandal. Tea part dome is about to blow.
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Understanding power requires more than headlines. I'm Peter Hambi, host of The Powers That Be. It's a great examining politics, economics, and media to provide context, analysis, and clarity without sensationalism. We ask how power operates, who benefits, and what's it stake.
“If you want to move beyond breaking news to deeper understanding, join us on the powers that be.”
New episodes every weekday follow the powers that be wherever you get your podcasts. It's 10 a.m. on the day after Thanksgiving, 1923. All room in the Senate office building, a group of lawmakers and witnesses gather on opposite sides of a polished wooden table, a glittering chandelier hangs overhead. It's been over a year since the Wall Street Journal broke the Tea Pot dome story.
The Senate has finally begun hearings.
Harry Sinclair, the oil magnate, has testified, so has Albert Fall. But Fall has played his hand like a pro. He's dumb, he spews irrelevant details, he's dismissive, he's sarcastic, and he leaves the investigation absolutely nowhere. But the lead investigator has an ace up his sleeve. He calls a witness named Carl McGee. Carl McGee was tall, he was pugnacious, his eyes were described in newspaper articles as gray. He had this steel gray, tomato that came to sort of define his appearance.
What's he like to get a beer with? McGee doesn't drink. He's a newspaper man in Fall's home state of New Mexico, and the two of them have a bit of a history. McGee bought the biggest paper in the state from a group of investors that included Fall. A decision fall would quickly regret. Fall was comfortable that McGee was going to be just another good ol' Republican and go along to get along. And McGee began running the journal the way he wanted to. He exposed corruption, especially in the state land office.
Before long Fall was in his office and Albuquerque threatening to drive him o...
I'm going to break you. He's what Fall actually says to McGee, and it's not an idle threat. Fall is scary. He's stormy, he's vindictive. There are rumors that he even had an early political rival kill. But McGee, the newspaper man, isn't one to be pushed around.
“McGee was a guy who could pretty easily get his backup, and in fact, I think he really relished the fight.”
I think Carm McGee had a little bit of a Messiah complex, and the more that someone pushed on him, the more it reinforced his self image as this champion who was fighting against evil. At the Senate hearing, McGee tells the story of buying that newspaper. And he was then asked about his meeting that he had had with Fall at his ranch in three rivers.
Is so big, it's almost the size of road island. When McGee first visits to negotiate the newspaper sale in 1920,
the place is looking more than a little rundown. McGee described the dilapidated condition of Fall's ranch. He said that Fall picked him up at the station and a car that was so battered that it broke down more than once,
“and a few miles from the station to Fall's ranch. Fall is clearly not a rich man back in 1920,”
which makes sense. His Senate salary is only $7500 a year, about $120,000 a day. But a couple years later, McGee visits the ranch again, and things look quite a bit different. He went by it after the Naval oil lease contracts had been let, and he couldn't even recognize where he was, because the road was so improved, the fencing was beautiful, and this was a story that he relayed in his testimony to the committee,
raising the question that blew the lid off of the scandal, where did Albert Fall get his money? Where did Albert Fall get his money? What did the central question of Teapot Don? It's a lot like what did the president know and when did he know it,
which will later drive the Watergate Investigation. McGee's testimony helps turn Teapot Don from an obscure investigation in the government leasing into a major corruption scandal, the kind of scandal that ruins lives and changes how a country does business. Fall is on the ropes. Soon he'll be on the run. The Senate committee learns that Fall didn't just renovate his ranch.
He also paid off almost a decade of back taxes, and he somehow came up with another $100,000 to buy the neighboring ranch.
“The investigation zeros in on that money. Where did Fall get it?”
What a rude question, which hunt, Fall says. He moves to defend his honor. I'm going to respond to this lion Carl McGee.
He even boards a train to Washington to testify, but he never arrives.
Changes his mind and sends a letter instead. He said that he had gotten the money to buy this adjoining ranch from Edward McClain, who was the owner of the Washington Post, and was actually a friend of Albert Fall. McClain is a notorious DC playboy. He's the landlord of Harding's Love Nest, and for Fall, he provides the perfect cover story. So much so that when Fall names McClain as the money man, many political think the case is closed,
a tempest in a teapot, one writes. Even Senator Thomas Walsh, the lead investigator, seems about to give up. But DC is a small town, and word on the street is that McClain, the CD friend, isn't quite as rich as he seems. He might not have $100,000 to loan Albert Fall. Walsh decides to find out. He invites McClain to testify under oath. Did you loan Fall the money? McClain says, essentially, yeah, you know, I'd love to talk, but I have the sign as infection, and also I'm kind of in Florida for the winter.
Sorry. Walsh really did not appreciate that response, so Walsh does something unusual. Senatorial superhero, he transforms himself into a subcommittee of one, and he goes to Palm Beach to confront McClain face to face. Did you loan Fall the money?
And McClain said, well, I wrote him checks for $100,000, but he never actually cashed the checks. He brought them back to me, and so he didn't get the money from me.
He really is a total lie, even Albert Fall has to admit it.
But at the last minute, he backs out again, and skips town. By now, the story is front page news.
“Journalists are tracking Fall's every move. Federal agents are making sure he doesn't flee the country.”
Public is demanding an answer to the $100,000 question, and soon, they'll get it. There's something else I have to tell you at this point in the story. Albert Fall didn't just secretly lease out one naval oil reserve. He leased out three. Besides Teapot Dome, there are two oil fields in California, and they're even bigger than Teapot Dome. Two oil fields in California are immense. If you ever drive on Interstate 5 or 99 going north of Bakersfield, you see the oil directs out on those two areas. They are still productive oil fields.
And Fall leased these new other oil fields to another oil magnate named Edward Dohini.
“Dohini is a slight older man with gentle blue eyes, but his looks are deceiving.”
Cutthroat business man. Daniel Dale Lewis is character in the movie. There will be blood was modeled after Dohini. He is a very powerful man.
If you are not careful, this guy will drink your milkshake. On January 24th, 1924, Dohini appears in front of the Senate committee. These hearings are now the hottest ticket in Washington. They move into a bigger room to fit all the journalists and spectators. They are reportedly now smells of costly perfumes. At 3 p.m., Dohini reads a statement that all summarized in three words, "It was me." I didn't. I gave him the $100,000. But Denis says, "Look, it has not eaten as the wink and not as nothing to do whatsoever with these oil lease contracts."
Just a lone between old friends. But the optics are obviously really bad. The question, Dohini says that he had his son stuff $100,000 in cash into a little black bag and personally deliver it to fall.
Dohini also admits that he expected to make $100 million from the two California oil fields. This at a time when the average American salary is just over $1,000.
Shady no bit contracts. Black bags of cash. The scandal is now as one reporter puts it, a throbbing drama of politics, high finance and intrigue. And the public is finally paying attention. If there are corrupt businessmen, that's one thing. If there are corrupt people in the oval office, that's another. And that is the, to me, the tipping point. The scandals with the attorney general, the secretary of the interior, the United States Navy, the lining of pockets, the enriching of someone's lives, who was supposed to be a public servant, that's devastating to the trust in government.
The things could not get any worse for Albert Fall. Investigators also learned that he's received additional payments from the teapot dome oilman Harry Sinclair. These include hundreds of thousands of dollars in bonds at cash, plus a menagerie that reads like the 12 days of Christmas.
Versus, four-sounds, two-bores, and an old racehorse named Sunflash II. When Fall finally returns to the witness stand, he's clearly a broken man.
Gone is the blustery frontiersman. He is actually very sick. His clothes are wrinkled and baggy. He leans on a cane avoiding eye contact. And in a prepared statement, he pleads his fifth amendment right against self-incrimination. By mid-1924, Fall, St. Claire and Dohini, are charged with bribery and conspiracy to defraud the United States. There's a lot of legal wrangling from here. The cases go on for years and years, but here's the upshot. There are three U.S. Supreme Court cases that come out of this.
“The most important is a case called McRain vs. Doherty, a unanimous decision that the Senate does have the authority as does that.”
The House to issue enforceable subpoenas if they are investigating something to further a government interest or protective government authority. This decision has had huge implications. Right down to the present. That's the decision that enabled Senator Sam Irvin to lead the joint investigation into watergate that enabled the investigation into the white water conspiracy and fraud during the Clinton administration.
Enables the Senate and the House to investigate the sitting president.
Without Teapot Dome, Congress wouldn't have the subpoena power it still uses today. As for Albert Fall, he never admits wrongdoing.
“Always maintains that the case was politically motivated, but it doesn't save him from total ruin.”
Convicted of accepting that $100,000 bribe, he becomes the first former cabinet member to go to prison. The lie 20th, 1931, a black ambulance carries him through the gates of New Mexico State Penitentiary.
Olds and ill, he's taken right to the prison hospital, where he spends the next 10 months.
But here's the crazy part.
“Oilman Edward Dohini, one of the richest men in America, is acquitted of giving the very same bribe.”
There's a lot of outrage about this at the time, including from our old friend, Newsman Carl McGee. He wrote a column that he thought it was unjust that the wealthy briber had not been held to justice, but the poor bribe was, and it did not strike him as fair. Police destroy his false career. After prison, he dies in poverty and disgrace in 1944.
“High winds knocked the spout off Teapot Rock decades ago, but the oilfield still exists.”
After the Teapot Dome contract was avoided by the Supreme Court, the oilfield was returned to the Navy.
It lay virtually untapped until the oil crisis of the 1970s, and in 2015, the government finally sold it, scandal free, to an oil company.
Thanks for listening to history this week, a backpocket studio's production, in partnership with the history channel. To stay updated on all things history this week, sign up at historythisweekpodcast.com And if you have any thoughts or questions, send us an email at [email protected] Special thanks to our guests, Joshua Castenberg, Professor at the University of New Mexico School of Law, and Berg is writing a book about the Supreme Court cases related to Teapot Dome, and Jack McElroy, author of Citizen Carl, the editor who cracked Teapot Dome, shot a judge, and invented the parking meter.
Thanks also to Brandon Roddinghaus, Professor of Political Science at the University of Houston, in author of scandal, by politicians survive controversy in a partisan era. The book's The Teapot Dome's scandal by Layton McCartney, Tempest Over Teapot Dome by David Stratton, and Senator Thomas J. Walsh of Montana by J. Lenin Bates, among other sources. This episode was produced by May John R. and Sound Designed by Dan Rosado. For backpocket studios, our executive producer is Ben Dixtine, from the history channel, our executive producers are Eli Lair and live fiddler.
We'll all rate and review history this week wherever you get your podcasts, and we'll see you next week.
