Harry Ford Sinclair was born in Wheeling, West Virginia, on 6th July, 1876. Sinclair was initially a pharmacist but in 1901 he became involved in the oil industry. He started the White Oil Company with a partner, Edward White. In 1916 he established the Sinclair Oil and Refining Corporation and the Sinclair Gulf Corporation. He later combined these enterprises into the Sinclair Consolidated Oil Corporation.
In 1921 Albert Fall, the Secretary of the Interior, had leased Sinclair the Teapot Dome oil fields in Wyoming. Attempts were made to keep this deal secret but rumours began to circulate when it became known that Fall was spending large sums of money.
On 14th April, 1922, the Wall Street Journal reported that Fall had leased Teapot Dome to Sinclair. President Warren Harding defended Fall by claiming that "the policy which has been adopted by the Secretary of the Navy and the Secretary of the Interior in dealing with these matters was submitted to me prior to the adoption thereof, and the policy decided upon and the subsequent acts have at all times had my entire approval."
Robert La Follette and John B. Kendrick called for a Senate investigation into Albert Fall and the Naval Reserves. Hearings on the Teapot Dome oil lease began on October 15, 1923 before the Senate Committee on Public Lands and Surveys. Senator Thomas J. Walsh, a Democrat from Montana, led the committee's investigation. Over the next few months, dozens of witnesses testified before the committee. On January 24, 1924, Edward Doheny admitted that he had lent Fall $100,000.
Seven days later the Senate passed a resolution stating that the leases to the Mammoth Oil Company and the Pan American Petroleum Company "were executed under circumstances indicating fraud and corruption". Albert Fall and Edwin Denby were now both forced to resign from office.
On 17th October, 1927, Sinclair appeared on trial charged with conspiracy to defraud the United States. The trial ended prematurely two weeks later when the government presented evidence that Sinclair had hired a detective agency to shadow the jury. The judge declared a mistrial. Sinclair was tried for criminal contempt of court. Found guilty and he was sentenced to six months in prison.
Harry Ford Sinclair died in Pasadena, California, on 10th November 1956.
(1) Thomas J. Walsh, The True History of Teapot Dome, Forum Magazine (July, 1924)
In the spring of 1922 rumors reached parties interested that a lease had been or was about to be made of Naval Reserve No. 3 in the state of Wyoming, - popularly known, from its local designation, as the Teapot Dome. This was one of three great areas known to contain petroleum in great quantity which had been set aside for the use of the Navy - Naval Reserves No. 1 and No. 2 in California by President Taft in 1912, and No. 3 by President Wilson in 1915. The initial steps toward the creation of these reserves - the land being public, that is, owned by the government - were
taken by President Roosevelt, who caused to be instituted a study to ascertain the existence and location of eligible areas, as a result of which President Taft in 1909 withdrew the tracts in question from disposition under the public land laws. These areas were thus set apart with a view to keeping in the ground a great reserve of oil available at some time in the future, more or less remote, when an adequate supply for the Navy could not, by reason of the failure or depletion of the world store, or the exigencies possibly of war, be procured or could be procured only at excessive cost; in other words to ensure the Navy in any exigency the fuel necessary to its efficient operation.
From the time of the original withdrawal order, private interests had persistently endeavored to assert or secure some right to exploit these rich reserves, the effort giving rise to a struggle lasting throughout the Wilson administration. Some feeble attempt was made by parties having no claim to any of the territory to secure a lease of all or a portion of the reserves, but in the main the controversy was waged by claimants asserting rights either legal or equitable in portions of the reserves antedating the withdrawal orders, on the one hand, and the Navy Department on the other. In that struggle Secretary Lane was accused of being unduly friendly to the private claimants, Secretary Daniels being too rigidly insistent on keeping the areas intact. President Wilson apparently supported Daniels in the main in the controversy which became acute and Lane retired from the cabinet, it is said, in consequence of the differences which had thus arisen.
The reserves were created, in the first place, in pursuance of the policy of conservation, the advocates of which, a militant body, active in the Ballinger affair, generally supported the attitude of Secretary Daniels and President Wilson.
They too became keen on the report of the impending lease of Teapot Dome. Failing to get any definite or reliable information at the departments, upon diligent inquiry, Senator Kendrick of Wyoming introduced and had passed by the Senate on April 16, 1922, a resolution calling on the secretary of the interior for information as to the existence of the lease which was the subject of the rumors, in response to which a letter was transmitted by the acting secretary of the interior on April 21, disclosing that a lease of the entire Reserve No. 3 was made two weeks before to the Mammoth Oil Company organized by Harry Sinclair, a spectacular oil operator. This was followed by the adoption by the Senate on April 29, 1922, of a resolution introduced by Senator LaFollette directing the Committee on Public Lands and Surveys to investigate the entire subject of leases of the naval oil reserves and calling on the secretary of the interior for all documents and full information in relation to the same.
In the month of June following, a cartload of documents said to have been furnished in compliance with the resolution was dumped in the committee rooms, and a letter from Secretary Fall to the President in justification of the lease of the Teapot Dome and of leases of limited areas on the other reserves was by him sent to the Senate. I was importuned by Senators LaFollette and Kendrick to assume charge of the investigation, the chairman of the committee and other majority members being believed to be unsympathetic, and assented the more readily because the Federal Trade
Commission had just reported that, owing to conditions prevailing in the oil fields of Wyoming and Montana, the people of my state were paying prices for gasoline in excess of those prevailing anywhere else in the Union.
(2) Attlee Pomerene, Special Counsel in the Teapot Dome Scandal, letter to M. T. Everhart (24th September, 1924)
Our contention is that in the bribery case evidence of similar transactions is competent for the purpose of showing the intent; in other words to characterize the end. It will be contended on the part of the defendant that the $100,000 was a loan. You and I feel confident that it was never intended that it should be repaid. Similarly, the Sinclair-Fall transaction in the form it took was a mere ruse.