Bought Off by Big Oil

The granddaddy of modern corruption cases and its toll on the '20s White House.

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The scandal badly soiled the administration of Harding.

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Big business. Influence peddling. Exploitation of natural resources. These hallmarks of political corruption have tarnished American government for decades. But in the modern era, political scandal has virtually no peer in the affair that grew out of a Wyoming oil field in the early 1920s. The Teapot Dome scandal takes its name from a U.S. Navy oil reserve distinguished by a rock formation that looked like a teapot. Beneath it were petroleum deposits potentially worth several hundred million dollars. Oil interests had helped elect the ill-equipped Warren G. Harding to the presidency, and in return, Harding installed friends of the industry in his cabinet.

One of them was Secretary of the Interior Albert Fall, a former senator from New Mexico who made no secret of his disdain for conservation. Fall leased the Teapot fields to Harry Sinclair of what was to become the Sinclair Oil Co. and reserves in Elk Hills, Calif., to Edward Doheny of Pan American Petroleum. In exchange, Doheny and Sinclair paid Fall upwards of $400,000 in cash and gifts. Fall was ultimately convicted of bribery and sentenced to prison; Sinclair was fined for contempt and jailed for jury tampering; and Doheny was acquitted of attempted bribery. It remains uncertain what Harding knew about the scandal. But the affair served to further expose him as among the weakest men ever to occupy the Oval Office.

In the following excerpt from The Teapot Dome Scandal: How Big Oil Bought the Harding White House and Tried to Steal the Country by Laton McCartney, J. Leo Stack, an oilman who feels he has been shortchanged in the Teapot lease deal, pays a visit to the owners of the Denver Post in hopes of exposing the scandal and, in turn, getting his cut.

Young Stack was abrim with righteous indignation. He needed allies who had what it took to stand up to some powerful, unscrupulous people. And of course, he would give his prospective partners a piece of what was owed him. He had come to the right place. The tall, mustachioed man at the table was Frederick Bonfils, 62, handsome, and rigorously fit. An outdoorsman and a gambler, he was also a world-class con man. In Kansas City, during and after the Oklahoma land rush, Bonfils had operated a crooked lottery and a newspaper blackmail scheme.

His partner, H. H. Tammen, had earned a reputation in Denver as the best bartender in the West. Short, blond, and built like a beer keg on sticks, Tammen had accumulated capital the old-fashioned way—by filching from the till. His first enterprise was a mail-order curio business selling "authenticated" headdresses from great Indian chiefs and scalps taken by Geronimo. Of course, his entire inventory was bogus. He was also among the first to sell "Navajo" blankets manufactured in eastern textile mills.

Together in 1895, Tammen and Bonfils acquired the Denver Post, then an afternoon rag with a dwindling circulation and a dubious future. They resuscitated it as a mix of populist politics, sensational features, and yellow journalism. Pledging to be "champions of the people," Bonfils and Tammen took on big money and political interests in the West, especially if the aforementioned didn't advertise in their paper. Often when a business failed to advertise, Bonfils and Tammen sent reporters to dig for dirt—the use of child labor, say. And Bonfils retained operatives especially to seek information that might be used for blackmail. These strong-arm tactics earned Bonfils and Tammen the enmity of the Denver establishment and a soaring readership.

Leo Stack needed Bonfils and Tammen to take on none other than Harry Sinclair. Before Teapot was leased to Sinclair interests, Stack had been one of numerous independent oil operators who had staked out preliminary claims on parts of the Teapot field. Harry Sinclair had bought up most of these claims, including those owned by Pioneer Oil Co. At the time, Stack had a contract with Pioneer calling for him to share in any profits realized from the field. Sinclair paid Pioneer $1 million to acquire its holdings. When Stack sought his cut, Pioneer offered him a mere $50,000. Even though he had only $187 to his name, Stack refused it, then headed over to the Post.