Bought Off by Big Oil

The scandal badly soiled the administration of Harding.

Bonfils wanted to sit on the story and in the meantime sent one of his star reporters, D. F. Stackelback, to New Mexico [where Fall had a ranch]. It didn't take Stackelback long to discover that Fall's finances had taken a significant turn for the better. Stackelback learned about a racehorse, cattle, and other livestock Sinclair had sent Fall. He also heard that the formerly broke interior secretary was suddenly spending large sums to improve his ranch. It was enough to convince Bonfils and Tammen that a number of important people would pay significant money to ensure that the newspaper didn't publish what it had learned.

Satisfied Stack had a legitimate claim, the Post's owners offered to help him collect—not from Pioneer but from Sinclair. They wanted $1 million. Of that, Stack was to get slightly less than half. The agreement was signed on April 14, 1922. The next day, the Post ran a front-page editorial asserting, "If carried out [the Teapot deal] will consummate one of the baldest public-land grabs in history." Bonfils and Tammen now believed they had enough leverage to make Sinclair amenable to their demands. But at a July 5 meeting, Sinclair took a hard line, insisting he'd bought out Pioneer knowing nothing of Stack's deal with Pioneer. If anyone owed Stack money, it was Pioneer, not him. He had no intention of paying anybody anything.

At the White House, meanwhile, President Warren G. Harding was contending with a railroad and mining strike, which threatened to paralyze the nation. And now came the uproar over Teapot Dome. No sooner had Harding managed to still some of the criticism over the leases when his interior secretary marched into his office demanding to send the U.S. Marines to Teapot. Fall wanted the Marines to eject a political backer of Harding's, Col. James G. Darden, who held claims on part of the Teapot field that predated the Sinclair lease and had started drilling on it. The demand put Harding in one of those quandaries from which he was continually trying to extricate himself: Deploy the Marines and alienate a friend and backer, or reject Fall's demands and God only knows what.

Harding ultimately granted Fall's request. At Teapot, Marine Capt. George Schuler faced off with the rig foreman, who said he had orders to keep all trespassers out. The marines had carbines, pistols, and enough ammunition to take on a small army of oilmen. After much macho posturing and Schuler threatening force, the foreman finally gave in, asking the marines to lunch after Schuler's men slapped "no trespassing" signs all over the rig and barbed-wire fence.

The Post couldn't have asked for a better story if Bonfils and Tammen had dreamed it up themselves. On August 7, they ran an editorial attacking the motives for leasing Teapot Dome as well as the Harding administration for sending in the Marines to protect Sinclair.

Since their meeting with Sinclair, the Post owners had "been looking everywhere for ammunition" to use in the blackmail scheme, Tammen said. If Sinclair thought he could give them the bum's rush, he had made a costly mistake. On August 18, M. D. McEniry [Interior's man in Denver] alerted Fall that Bonfils had sent two men to New Mexico "endeavoring to find something in your long residence in that State to your disparagement." They had discovered that Sinclair, Robert Stewart [chairman of Standard Oil Co. of Indiana], and Harry Blackmer [chairman of Midwest Refining, a subsidiary of Standard] had visited Fall at his ranch; that Fall cleared the obstacles preventing Standard from buying out Midwest and had granted Sinclair and Stewart a pipeline franchise connecting the Teapot and Salt Creek fields to a Standard refinery. Worse, they said they had a witness who had seen Fall collecting a payoff from Sinclair.

Bonfils intended to reveal the whole story unless he got what he wanted. His target now encompassed all Sinclair's allies in the oil business as well as the Harding administration. He planned to have his lawyer reveal the whole "secret history" of Teapot and Salt Creek before the congressional investigative committee headed by Wisconsin Sen. Robert LaFollette. Blackmer, too, was to be a prime target. "We expect to lay out every intestine of Blackmer's on the table," Bonfils warned. Briefly, Bonfils became so caught up in the role of crusading newspaperman that he momentarily thought of dropping the blackmail scheme altogether. "If we were patriotic, we would blow this thing to hell instead of trying to make a settlement," he announced to Stack. Responded Stack: "If I had as much money as you, I could afford to be patriotic. But that is not my idea."