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The US Interior Secretary’s corruption scandal

When the privileged oil fields are transferred to the Ministry of the Interior, from there companies under the Minister are exploited without bidding.

In the 1920s, the U.S. Navy modernized its force and converted its coal-fired ships to oil to be more efficient. To ensure the ability to supply oil to ships, the government grants the Navy exclusive lands with oil fields for use in an emergency..

Some of these lands include Tea Pot Dome, Wyoming, Elk Hills, California and will be under Navy control.

However, when Warren Harding became the 29th President, in 1921, this privilege slipped from the Navy. President Harding was known to be a flower digger, fond of playing cards and drinking with his subordinates, who had followed him since his days as a Senator for Ohio, known as the “Ohio Gang”. After he became President, all were appointed to senior government positions.

The 29th President of the United States, Warren Harding. Photo: National Portrait Gallery

One of them was Interior Secretary Albert Fall. A few days after taking office, Albert Fall whispered to the president to take back control of three oil fields that were being used by the Navy.

The nod of President Harding opened the chain of largest scandals in American history, second only to Watergate, which took place five decades later.

In addition to managing the oil fields, the Ministry of the Interior is also allowed to sign production contracts with private oil and gas companies on the condition that they undergo public bidding.

After transferring control of the oil-rich lands to units within the Ministry of the Interior, Albert Fall began secret negotiations with some wealthy friends in the oil industry.

In 1922 in the absence of any competitive bidding process or public announcement, Albert Fall awarded the exclusive drilling rights to the Tea Pot Dome oil field to Mammoth Oil Company, which was owned by friend Harry Sinclair Perennial.

The remaining two oil fields also have exclusive rights to exploit without bidding. Mining companies are all owned by close friends of the Minister. Meanwhile, Albert Fall was “loaned” by these companies to more than $ 500,000 to buy real estate everywhere, an amount equivalent to tens of millions of dollars today.

The three oil fields are estimated to produce hundreds of millions of dollars in high-grade oil, but the companies are subject to almost no public or tax obligations to the locality, except for the construction of a few bridges and insignificant structures.

By April 1922, rumors of this shady deal began to circulate when local oilers noticed trucks bearing the Sinclair Company logo carrying mining equipment to the Teapot Dome oil field.

The very next day, ohn Kendrick, a Democrat from Wyoming, presented a resolution to open a Senate investigation into transactions involving these oil fields.

One of the most important criminal investigations in the history of the US Senate has officially been launched.

Albert Fall (right) during his tenure as Home Secretary.  Photo: Walmart

Albert Fall (right) during his tenure as Home Secretary. Photo: Walmart

In January 1923, less than two years after taking office, Albert Fall resigned as Secretary of the Interior to retire to a giant ranch in New Mexico, which he bought with funds given to him by the oil business. loan” earlier. But for now, the Senate investigations into the Teapot Dome oil field continue.

President Harding questioned Albert Fall of corruption. Other members of Harding’s cabinet, all members of the “Ohio Gang”, also face multiple charges of corruption and alcohol smuggling.

The President once had to say to the press: “I have no problem with my enemies. But damn friends keep driving me crazy in the dark.”

In June 1923, just before the investigations began, President Harding went on a cross-country tour. Upon his return, he began to experience shortness of breath and cramps, then died suddenly in San Francisco on August 2, 1923 from complications of a heart attack.

With the loss of political cover, former Minister Albert Fall was quickly discovered the above violations. The directors of backyard companies admitted to handing cash directly to Albert Fall. According to the description, the money was stacked in lumps of $20,000 in a black parcel bag.

Meanwhile, Albert Fall kept the oilfield lease agreement secret to protect the sites from the prying eyes of surreptitious miners. This “excuse” was not accepted by the members of the Senate.

Reporters gathered outside the Senate during the hearings on the oil scandal.  Photo: thoughtco

Reporters gathered outside the Senate during the oil scandal hearings. Photo: thoughtco

In the fall of 1929, former minister Albert Fall was sentenced to one year in prison and fined $100,000 for the crime WOMENregret bribery. But in the end, he was exempt from the fine because his entire property was confiscated. Albert Fall spent 9 months in prison, then released due to poor health. He died in 1944 after a long illness.

His oil contracts with three backyard companies were also cancelled.

In January 2015, the Department of Energy sold the notorious Teapot Dome reserve under a competitive bidding process. After producing 22 million barrels of oil and earning $569 million for the US government, Teapot Dome was sold to Stranded Oil Resources Corporation for $45.2 million.

Hai Thu (Follow History, Apprend, ThoughtCo, HistoryCentral)