Teapot Dome Affair
The Teapot Dome Affair concerned oil reserves and began during the administration of President Warren G. Harding.
In 1921, by executive order of the President, control of naval oil reserves at Teapot Dome, Wyo., and at Elk Hills, Calif., were transferred from the Navy Department to the Department of the Interior.
The oil reserves had been set aside for the navy by President Wilson. In 1922, Albert B. Fall, U.S. Secretary of the Interior leased the Teapot Dome fields to Harry F. Sinclair, an oil operator, and the field at Elk Hills, Calif., to Edward L. Doheny without any competitive bidding.
A Senate investigation was conducted by Senator Thomas J. Walsh. It was found that in 1921, Doheny had lent Fall $100,000, interest-free, and that upon Fall's retirement as Secretary of the Interior (Mar., 1923) Sinclair also “loaned” him a large amount of money. The investigation led to criminal prosecutions. Fall was indicted for conspiracy and for accepting bribes. Convicted of the latter charge, he was sentenced to a year in prison and fined $100,000.
In another trial for bribery Doheny and Sinclair were acquitted, although Sinclair was subsequently sentenced to prison for contempt of the Senate and for employing detectives to shadow members of the jury in his case. The oil fields were restored to the U.S. government through a Supreme Court decision in 1927.