It was the biggest political corruption scandal involving a U.S. President before Watergate. And it had a strong connection to Kern County. Today on KVPR’s Central Valley Roots, the Teapot Dome scandal and the Elk Hills oil reserve.
In the early years of the 20th Century, the federal government was concerned about the ability to supply the U.S. Navy with fuel in the event of a shortage or emergency. That led to the establishment of several Naval Oil Reserves in Wyoming and California, including Kern County’s Elk Hills oil field. The Secretary of the Navy was responsible for managing the reserves.
But all that changed with the election of Warren G. Harding as President in 1920. Harding nominated one old colleagues from the Senate, Republican Albert Fall, as his Secretary of the Interior. And Fall had an ambitious plan to privatize public lands. In 1921, Harding signed an executive order transferring oversight of the reserves from the Secretary of the Navy to the Secretary of the Interior.
The following year, Fall offered his friend Harry Sinclair of Sinclair Oil an exclusive no-bid lease on the Teapot Dome reserve in Wyoming. Fall did the same in California, offering oil tycoon Edward Doheny the lease on the Elk Hills oil field. Word of the deals leaked out and wound up on the front page of the Wall Street Journal. Both oilmen allegedly paid bribes to get the leases, and an investigation ensued.
Ultimately, Doheny and Sinclair both were acquitted of conspiracy to defraud the United States. Fall was convicted of bribery and conspiracy, and became the first Cabinet Secretary convicted of crimes during his time in office. In 1997, the U.S. government sold the Elk Hills reserve to Occidental Petroleum for $3.5 billion, this time in a competitive bidding process.
