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.
After
the Russian Revolution in 1917 Sinclair
went to Russia and met Lenin
and attempted to negotiate the oil rights in Siberia.
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.
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