Bought Off by Big Oil

The scandal badly soiled the administration of Harding.

The president was preoccupied the summer of 1922 with the mining and railroad strikes. He was drinking heavily. At a meeting with the rail workers' union president, Harding had been so drunk, the union man said, he couldn't talk. But Harding had grown concerned about the publicity surrounding the Teapot leases. He'd received numerous letters questioning the administration's handling of the matter, including from the governor of Wyoming.

For a time, the White House could dismiss the Post's attacks as scurrilous exercises in partisan politics. But then the Hearst papers began reprinting the Post's editorials in all of their 28 newspapers around the country. A highly agitated Harding demanded that his interior secretary explain what was causing all the controversy. Stack had a legitimate claim, Fall is likely to have replied, but Bonfils and Tammen were "scoundrels" exploiting the situation for money.

Ultimately Bonfils, Tammen, and Stack got their money, the entire $1 million. According to the story at the time, the payoff resulted from a meeting between Sinclair and his lawyer and Bonfils and a Republican lawyer, Karl C. Schuyler, who represented Blackmer. At first, Sinclair offered $100,000. "One hundred thousand dollars is a lot of money, and Stack ought to be happy with it," he said. Schuyler responded: "Mr. Sinclair, if any man came to you and created a situation for you...to secure an oil property as valuable as Teapot...would you think of valuing his services for less than $1 million?" After some thought, Sinclair responded, "Well, it's big, and perhaps you are not asking too much." By the end of the talks, Sinclair added $900,000 to his offer.

That, at least, was Schuyler's account. But there is another, more sinister version of what happened—one that has never become public. According to several men privy to the negotiations, including Bonfil's son-in-law, C. V. Berryman, it was Harding who pressured Sinclair to pay up. Berryman claimed that when Bonfils was threatening to expose the Teapot gang, Harding summoned Bonfils and Tammen to the White House and demanded that they "let up on that oil business in Wyoming." Bonfils struck the desk, saying, "Not unless I get two quarter sections of land on Cat Creek [in the Teapot field] and $1 million in cash." Harding assured him he would get it and even invited Bonfils on an upcoming trip to Alaska.

Berryman was not the most reliable of sources; one investigator suspected he was a "hophead." Moreover, his tale didn't reach Teapot's chief investigator until after Harding's death. Still, several factors lend credibility to his account: Bonfils, who had savaged the Harding administration, did go to Alaska as the Hardings' guest, even presenting Mrs. Harding with a sealskin coat. And after Sinclair made the payoff, Bonfils suddenly became persona grata in Washington.

Albert Fall resigned in January 1923. Before he left Washington, though, he quietly gave Sinclair a contract to buy all the so-called royalty oil from the Teapot fields—close to 2 million barrels a year that he then sold at a profit. The deal had the full approval of Harding, who wrote Fall, "I have no concern about Wyoming oil matters. I am confident you have adopted the correct policy and will carry it through in a way altogether to be approved."

Schuyler and Bonfils got back to Denver on Sept. 22, 1922. After that, the Post's attacks on Sinclair, Fall, and the Teapot deal ceased entirely. And from then on, any mention of Harry Sinclair was effusively laudatory.

From The Teapot Dome Scandal by Laton McCartney. Copyright 2008 by Laton McCartney. Published by arrangement with Random House, an imprint of Random House Publishing Group, a division of Random House, Inc.