The Teapot Dome Scandal: How Big Oil Bought the Harding White House and Tried to Steal the Country Paperback – January 13, 2009

The magnitude of Harding's complicit behavior is shocking! The infamous liberty bonds showed up in his safety deposit box subsequent to his selling the newspaper and dying! Harding knew he had compromised his presidency as he and his entourage left on the Voyage of Understanding leading him all the way to Alaska; he also knew his health was waning and so did the Duchess, his wife, who cast a long shadow over her hen-pecked husband; much speculation can be made about what he knew, how much he was aware of Daugherty's duplicitous behavior and whether Daugherty perhaps ordered Burns at the Bureau of Investigation to murder loose lips Jesse Smith; so much posterior covering occurred as to make it seem so plausible that big oil stopped at nothing and controlled Daugherty on such a short leash that the probability of Sinclair and Deheny being implicated in death, betrayal and fearful of nothing is likely; Harding surely knew and was so compromised that he could only get even more drunk and less tolerant of his infamous Duchess, who had a controlling hand in his demise! Very readable and extraordinarily interesting book.

The Democrats held their convention in New York in June 1924. On June 24, the keynote speaker was Mississippi Senator Pat Harrison. Broadcast nationally, he made `an impassioned attack on the insidious political influence of Big Oil . . . "Oil has become the open sesame of power," Harrison said. "It gained admittance to the robber's cave and participation in the plunder. It has been the inspiration of this administration's [Harding/Coolidge] foreign as well as domestic policy. The magic significance of its flow has awakened the State Department to an interest not only in Mexico and . . . Columbia, but away off in the Near East. . . . Show this administration an oil well and it will show you a foreign policy"' (245). Speaking as he did in 1924, Harrison might have been anticipating author Laton McCartney's thesis as stated in his book's title, "The Teapot Dome Scandal: How Big Oil Bought the Harding White House and Tried to Steal the Country." Author Laton McCartney begins his book with a bang - Oklahoma oilman Jake Hamon's jilted mistress, Clara Hamon, put a gun to his chest and pulled the trigger. McCartney then tells the reader that Jake was a man on the make. He was a successful Oklahoma oilman, a speculator, who did well in the oil field and then looked to improve his social position. Jake's plan involved buying a U.S. president, so he took out a $1 million loan from National City Bank of New York (today's Citibank) and went to the 1920 Republican presidential convention in Chicago. "Working in tandem with Harding's campaign manager, Harry Micajah Daughtery, Hamon got Warren Harding the Republican presidential nomination" (4). Harding promised Hamon a position, Secretary of Interior, on his cabinet, when - and if - he was elected. There was but one other stipulation that Harding had for Hamon: Jake had to end his relationship with Clara Hamon. Shortly after Harding and Hamon had met, they discovered that Hamon's wife was cousin to Florence "the Duchess" Harding. The Duchess would not allow her cousin to be further embarrassed by her philandering husband. If Hamon wanted the job, the Duchess required him to arrive in Washington with his wife, her cousin and not Clara. Clara, of course, did not like the arrangement. Hamon's untimely death caused Harding, Daugherty, and the RNC to look for another candidate for Secretary of Interior. They settled on Albert B. Fall. Fall had his sights set on Secretary of State, but he agreed to the Interior position with the stipulation he would only serve there for one year and then move on. Soon after inauguration, Harding, with Vice President Calvin Coolidge in tow, proceeded "to the U.S. Senate chamber for an unexpected and unprecedented inaugural day visit, the new president . . . said he had come to present his cabinet in person. . . . Caught by surprise not a single senator objected to any of the nominations. . . . In the space of ten minutes, Harding's entire cabinet had been confirmed" (60-61). The "Ohio Gang" was in. McCartney states that Fall was an ambitious man, and that he understood it was his job to take care of the murdered Hamon's friends in `big oil': Harry Sinclair and Colonel Robert Stewart - and there was also Ed Doheny. Fall believed that if he took care of these gentlemen properly, he could leave public office and secure a comfortable job with a lucrative salary with either Sinclair or Doheny. Furthermore, per his plan, Fall had only a short time to endear himself to these men. McCartney elucidates further by citing one of Fall's earlier biographers, David Stratton. Stratton wrote, `"Making up for lost time had become an obsession with him [Fall]. It warped his judgment and had a significant bearing on the most important decisions he ever made as a cabinet officer or otherwise"' (88). Fall asked for and received a $100,000 "loan" from Doheny to pay back-taxes and make improvements on his New Mexico ranch. Fall promised to repay the "loan" once he was employed by Doheny. The "loan" was in cash. Fall worked quickly. By Harding's authority, Fall transferred oversight of the Teapot Dome and California oil reserves from under the purview of the Department of the Navy to his own department. In July 1921, Fall granted leases to Doheny to offset drill the Elk Hill oil reserves in California, the following year, 1922, without competitive bidding Doheny was given complete access to the Elk Hill reserves, and Sinclair and Stewart were granted leases to drill the Teapot Dome reserve. In conjunction with the Teapot Dome scandal, McCartney relates details of a second crime. In November 1921, six important oil barons, including Stewart and Sinclair, concluded a deal to defraud their stockholders. A Canadian shell company, Continental Trading, was created to buy thirty-three million barrels of oil at $1.50 per barrel from a Texas oilman named A.E. Humphries. Sinclair, Stewart, et al., then had their companies purchase the same oil from Continental Trading for $1.75 per barrel. In one day, this group made a tidy sum of more than eight million dollars which they used to grease the wheels of government; plus, still have a little pocket change for unexpected expenses. McCartney relates that some $3 million dollars or more of this profit was "converted by [Harry] Osler into Liberty bonds and divided among the four Continental partners: Sinclair, [Harry M,] Blackmer, [James] O'Neil, and Stewart" (243). McCartney also makes a point to explain that Liberty bonds have serial numbers; therefore, the bonds were traceable. "Harry Sinclair made one bone headed mistake" (92). Sinclair made several payments and donations using illicitly gained Liberty bonds when dealing with Albert Fall and the chair of the RNC, Will Hays. Also noteworthy, Harding's Marion, Ohio, newspaper the "Marion Star" was purchased for the astounding sum of $500,000 - mostly paid for in Liberty bonds. McCartney repeatedly shows where conservationists Gifford Pinchot, Harry Slattery, and Robert La Follette objected to and were offended by the fact that Fall was appointed Secretary of Interior. Their fears proved justified when they heard rumors about leases being passed out to drill in national preserves. When they, Slattery in particular, tried to verify the rumors, Fall stonewalled them. `Wisconsin Senator Robert "Fighting Bob" M. La Follette on 28 April [1922] introduced a resolution in the Senate for a full-scale investigation of the leases' (110). Senator Thomas J. Walsh, Democrat from Wyoming, was selected to head up the committee to investigate the questionable oil leases. McCartney recounts how Walsh heroically struggled to gain justice against a corrupt administration. The U.S. Attorney General was Daugherty, and he was a crook. Daugherty's handpicked minion, William "Billy" J. Burns, was the head of the Bureau of Investigation, the forerunner of today's FBI. Daugherty and Burns used their offices to hinder and oppose rather than help Walsh's progress. Sinclair and Doheny used their considerable wealth and resources to obstruct the investigation. Several major players traveled to Europe and Africa to avoid the hearings. At least four players, not counting Hamon, committed suicide or - McCartney posits - were they murdered? President Harding died, August 2, 1923, before all of the details of the Teapot Dome scandal were revealed. McCartney states that historians still debate whether or not Harding knew about what was going on, but McCartney includes enough clues, wenching, liquor, and cards, to suggest he did. On October 26, 1929, Albert Fall was found guilty of taking a bribe from Doheny. Fall served three years and was fined $100,000 - the same amount that Doheny had "loaned" him. President Hebert Hoover, who had served with Fall on Harding's cabinet, refused to pardon Fall. Fall died broke and alone in 1944. Ed Doheny was more fortunate. He was acquitted. Harry Sinclair served seven months for jury tampering and contempt of court. Colonel Robert Stewart was also acquitted, but John D. Rockefeller, Jr., asked him to resign as chair of Standard Oil of Indiana. Stewart refused. Rockefeller, with evidence provided by Walsh, engaged Stewart in a proxy battle and won: Stewart was fired. Perhaps the "greatest calamity" of Teapot Dome was the one noted by Senator Walsh in 1924. `The greatest calamity in his view was the seeming indifference of the voters, or at least 15.7 million of them [who voted for Silent Cal], to the corruption he and the committee had uncovered. "I am amazed . . . at the people who seem for the first time in history to contemplate graft in high office with resignation"' (248). "The Teapot Dome Scandal" by Laton McCartney, the author of many journal and magazine articles and books on business and politics, is an excellent study of a topic that is too frequently glossed over in modern American History textbooks. McCartney's footnotes are adequate, and he cites both primary and secondary sources in his study.

Laton McCartney lays out a comprehensive and well-researched history of one of the most corrupt administrations in US history: That of Warren G. Harding. With striking parallels to more recent US administrations, the author describes how oil tycoons bought themselves a presidential candidate, elevated him to the presidency and then cashed in on their investment. The Teapot Dome scandal was only the most prominent of several scandals that defrauded the American public of proceeds from valuable public lands. Using archival research as well as a host of other sources, this book is hard to put down.

I have been looking for a book describing this often forgotten scandal and one that considered the Harding administration in general. The title says it all in that while there is no doubt Teapot Dome embodied the greed and corruption that often accompanied politics in that era, it is framed within an intense bias against corporations rather than as a careful consideration of the scandal from a neutral point of view. This book relies on newspapers and the diaries and notes of many individuals associated with the scandal yet does not include the Harding papers. This confuses me because when I visited the Harding historical site earlier this summer I was informed that the stories of the President's papers having been burned apart from one folder were false, that they were housed at OSU and would be soon re-located to a renovated Harding home and museum. If true, then why aren't there any biographies of Harding and why does his story remain so mysterious and incomplete? In turn, this book while providing a strong narrative for the corruption pervasive in that era and presenting a wild and fascinating story leaves too many questions unanswered.