Uphill All the Way: The Fortunes of Progressivism, 1919-1929
By Kevin C. Murphy, Copyright 2013. All Rights Reserved.

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Chapter Five:
The Politics of Normalcy

Progressives and the Fight for Good Government

VI. Tempest from a Teapot

I. The Harding White House.
II. Organizing in Opposition
III. Lobbies Pestiferous
IV. The Taint of Newberryism
V. The Harding Scandals
VI. Tempest From a Teapot

In the spring of 1922, soon after having the Veterans Bureau buy a potential hospital site in Excelsior Springs, Missouri for $90,000 (it was worth $35,000), Charlie Forbes confessed to his associate, Elias Mortimer, that he had his eye on bigger fish. Soon, he told the man whose wife he stole and who would eventually put him behind bars, Albert Fall would step down and Harding would names Forbes the Secretary of the Interior, where the real money was at. As it played out, Forbes never got the chance to move to Interior -- his criminal empire at the Veterans Bureau collapsed before then. In any case, Albert Fall was already two steps ahead of him.1

Like Woodrow Wilson, a president he despised, Albert Fall of New Mexico was another good hater. Fall never forgave the former president for making a political speech against his reelection to the Senate in 1918 the same week - unbeknownst to Wilson - that Fall had lost his daughter and only son to the influenza plague. Similarly, as a rancher barely removed from the Wild West - in his earlier days, Fall had run-ins with Pat Garrett, Billy the Kid, and John Wesley Hardin - he detested the dictates of federal bureaucrats from the East, like former head of the Forest Service Gifford Pinchot, who thought they could tell him what he could and couldn't do with his property. In 1911, Fall had written Pinchot warning him that he would "rue the day" that the Forest Service stepped in and prevented Fall from grazing twice as many sheep as was allotted on public lands. And so, once he was named Harding's Secretary of the Interior, Fall very quickly planned to use his position to thumb his nose at the conservationist busybodies he had loathed for so long. "I don't know how succeeding generations will do it - maybe they will use the energy of the sun or the sea wave - but they will live better than we do," Fall once said. "I stand for opening up every resource."2

For Gifford Pinchot, the feeling was mutual - In fact, he thought Harding's appointment of Fall was a particular slap in the face, given that he had very publicly played the part of the Loyal Roosevelt Progressive against Harold Ickes during the election. And so, even as Pinchot's former conservationist lieutenant in Washington, Harry Slattery, vowed to keep a close eye on the new Secretary of the Interior's doings, Pinchot wired a friend that Fall "has been with the exploitation gang...Trouble ahead."3

Trouble indeed. Albert Fall came into office at Interior Secretary with grand designs for his Department. As a personal screw-you to the conservationists, he wanted to take control of Pinchot's precious Forest Service, which was then a part of the Department of Agriculture, and effectively destroy it. Fall also planned to open every single part of the country over which the federal government had jurisdiction, be it national parks, lands promised to Native American tribes, or the Alaska Territory, to private concerns. Among these were the rich oil fields at Elk Hills and Buena Vista, California and Teapot Dome, Wyoming, which the Navy was holding as reserves for national security purposes. Jake Hamon, the Oklahoma oilman and Harding backer who had effectively bought the Interior Secretary position for himself before getting shot by his mistress, also planned to use these public oil fields for private gain, but had died before he could realize his investment. Now, Albert Fall had much the same plan.4

First things first, Fall had to acquire control of the naval reserves from the Navy Department. And so, on April 1st, 1921, less than a month into his new position, Fall asked Secretary of the Navy Edwin Denby to hand these reserves over to Interior. Denby, who had no love for conservationists either, did so almost immediately, telling his staff that Fall's power-play "was full of dynamite. I don't want anything to do with it." Some of Denby's underlings at the time, including Theodore Roosevelt, Jr., presumed Albert Fall was an honorable man and voiced no objections to the transfer - even after Harry Slattery warned him that something troubling seemed to be afoot. Those in the Navy Department who did kick up a fuss about the oil grab, on Fall's orders to Denby, were quickly shuttled out of Washington and buried in dead-end jobs elsewhere in the Navy. In any case, President Harding signed the transfer of the oil fields from Denby over to Fall on May 31st, 1921.5

As it happened, Albert Fall, who as a longtime public servant was generally strapped for cash, wanted to make improvements to his Three Falls Ranch in New Mexico, including buying up some of the nearby properties in order to secure water rights for his place. And so he secured a loan from fabulously wealthy oil man Edward Doheny - $100,000 in cash, to be exact, transferred to Fall via a black bag carried by Doheny's son Ned. A year later, in May of 1922, Fall would receive close to $230,000 in sequentially numbered US Liberty Bonds from another oil baron, Harry Sinclair, the first of several such payments. In between these two payouts, Fall was also visited in New Mexico by the Chairman of Standard Oil of Indiana, Robert Stewart, who wanted to purchase the rights to the oil-rich Salt Creek fields, adjacent to Teapot Dome, from another wealthy individual, Harry Blackmer. Theoretically, this deal could not happen due to the same anti-trust laws that had broken up John D. Rockefeller's Standard Oil into constituent parts, like Standard Oil of Indiana, in the first place. But soon after this meeting, at which presumably a fee was extracted, Fall met with Daugherty and eliminated any possible legal impediment to the transaction.6

A month before Sinclair's bonds were paid, in April of 1922, Albert Fall announced that, because private interests had already drained much of the naval reserves by way of diagonal drilling offsets (not true), he would lease the California reserves to companies who could get out whatever oil was left. Though he did not announce it, the Elk Hills and Buena Vista leases would in fact be going to Edward Doheny's Pan American Petroleum and Transport Company. A few days later, the Wall Street Journal broke the story that Fall was also leasing the Teapot Dome fields to the Mammoth Oil Company, a recently-created subsidiary of Harry Sinclair's Sinclair Oil. This, effused the Journal in a front-page story "marks one of the greatest petroleum undertakings of the age and signalizes a notable departure on the part of the government in seeking partnership with private capital for the working of government-owned natural resources." In neither transfer was there anything resembling competitive bidding.7

Up to this point, Gifford Pinchot and Harry Slattery had mainly been fighting Fall's attempt to hijack the Forest Service from the Department of Agriculture. This crusade, waged mainly in the newspapers and on the golf course, where Secretary of Agriculture Henry Wallace had the president's ear (and Fall, unfortunately for him not a golfer, did not), was for the most part a successful one. Pinchot later remembered Harding telling him that "[y]ou are absolutely wrong in opposing the transfer of the national forests, but I pay you the compliment of saying that [Fall] cannot put it over against your opposition." Nonetheless, the revelation of the oil leases changed the game. In April of 1922, just before news officially leaked, Harry Slattery went to Senator Robert La Follette asking him to begin a formal Senate inquiry into the oil matter. At first, La Follette suggested that Borah or Hiram Johnson might be a better point man for this sort of effort. But, after asking around, he too discovered that Navy officers who were against the transfers had a penchant for showing up in new jobs far away from Washington.8

And so, on April 21, 1922, La Follette called for a formal Senate inquiry into the leasing of the naval reserves to private interests. "I am going just as far as I can in the charges I make," La Follette told Slattery a week later, "I can't prove that there has been corruption but if we get this investigation I am confident that it will be shown." La Follette then repaired to the Senate floor and formally asked that a Senate committee "be authorized to investigate this entire subject of leases upon naval reserves." "We cannot permit a record to be made here which will parallel the record of Mr. Ballinger," La Follette argued, citing the controversy that had taken place between conservationists and the Interior Department during the Taft administration. Now, it looked like Interior was "the sluiceway for a large part of the corruption to which this government of ours is subjected." America should know "who were the real organizers of the Mammoth Oil Co. who were to be favored by the Government with a special privilege in value beyond the dreams of Croesus." The following day, the Senate adopted La Follette's resolution unanimously.9

At first, Harding seemed unperturbed by the call for an investigation. "This wasn't the first time that this rumor has come to me," the president told his Chair of the Shipping Board, former ad man Albert Lasker. "but if Albert Fall isn't an honest man I'm not fit to be president of the United States." Fall worked to further assuage everyone's fears through various document dumps. He sent Harding an intentionally boring and obfuscatory 75-page-report on the lease transfers - which he knew the president likely wouldn't be able to make head or tail of. This, the president sent on to the Senate, saying it "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." Fall also sent along to the Senate committee thousands of pages of extraneous maps, surveys, memos, and charts to help bury any wrongdoing in a mountain of bureaucratic paperwork.10

Still, while as of yet no corruption had been uncovered, and none would be for a year to come, the La Follette resolution knocked Albert Fall back on his heels. Until this point, his grand consolidation plans had been continuing to unfold as planned, with Harding agreeing to transfer control of Alaska over to the rapacity of Interior as well. In a July 1922 Cabinet meeting, however, Secretary of Agriculture Henry Wallace threatened to "expose the case against Fall, his colleagues, forests, oil and everything to the nation" if the Forest Service was sent to Interior. At that point, Harding decided not to approve the transfer. And, while he wrote to Fall in October 1922 that he had "no concern about Wyoming oil matters" and that he was "confident you have adopted the correct policy and will carry it through in a way altogether to be approved," the president also began to distance himself from Interior's policies in general. In January of 1923, believing his consolidation attempts had failed and he had made out as well as he likely would, Albert Fall resigned as Interior Secretary and returned to the Three Falls Ranch.11

The scandal took another turn for the baroque when the two editors of the Denver Post, Frederick Bonfils and H.H. Tammen, heard word from a disgruntled oil lobbyist that Harry Sinclair had begun buying up all of the private holdings around the Teapot Dome field. They dispatched their best reporter, one D.F. Stackelbeck, to New Mexico, who soon reported that apparently the Secretary of the Interior had come into a good deal of money of late. In the catbird seat now, the editors of the Post ran an editorial calling the Teapot deal "one of the baldest public-land grabs in history." They then contacted Harry Sinclair, and told him to expect more of the same sort of hard-hitting watchdog journalism…unless he saw fit to pay them one million dollars. Sinclair balked at first, then made the payment. The Denver Post never posted an unkind word about Harry Sinclair or the Teapot scandal ever again. And Bonfils, after the payout had been made, soon found himself one of the guests on Harding's ill-fated Voyage of Understanding.12

During all of this, the Senate was getting its ducks in a row for its formal inquiry. In offering his resolution, Senator La Follette had shrewdly asked for an investigation not from the Naval Affairs Committee, which was brimming over with Old Guard administration loyalists, but in the Public Lands Committee, which included among its number progressive Republicans George Norris, Edwin Ladd, and Peter Norbeck, as well as progressive Democrat Thomas Walsh of Montana. Along with committee member John B. Kendrick of Wyoming, who was hearing from angry and frozen-out-of-the-deal oil interests back home that something shady had occurred, and new Senator Burton Wheeler of Montana, who had been enlisted to the cause at the December 1922 meeting of progressives, La Follette prevailed upon Walsh to head up the investigation. Senator Walsh was considered one of the best lawyers in the Senate, but he was reluctant to take the reins -- He had seen the size of the document dump that had been carted over to Congress, he was already serving on more committees than any other Senator, and he, being another man of the West, had no real truck with conservationists anyway. Nonetheless, the Montana Senator agreed to do it, and for the next several years -- much to the consternation of the guilty parties -- he would remain steadfastly dogged to his duty, even when other Senators would likely have given up shop.13

The actual Senate investigation did not begin until October 1923, after the resignation of Albert Fall, the deaths of Jess Smith and Warren Harding, and well after news of the lease transfers had petered out in the press. By then, the chair of the Public Lands Committee, administration loyalist Reed Smoot of Utah, had commissioned his own study arguing (wrongly) that Teapot Dome had been all but tapped out before the lease transfer anyway. With no money seemingly involved, the public's interest in the scandal ebbed even further. Albert Fall was the first to testify, followed by Secretary of the Navy Edwin Denby and the two oilmen, Harry Sinclair and Edward Doheny. While Doheny admitted he'd given Fall some cattle, there were no other revelations of note. After a week, the Committee took a month's recess, and it seemed the investigation would be a non-starter.14

But there was one major loose end, which Senator Walsh heard about through a mutual friend of Denver Post reporter D.F. Stackelbeck, who was still irritated his reporting got spiked - How had Albert Fall come into all of this money? When the Senate investigation started asking questions to this effect, Fall began to panic and - following the advice of Edward Doheny -- asked a wealthy friend, newspaper publisher Edward B "Ned" McLean, to agree to say he lent him the money. Soon thereafter, Fall was visited in Washington by some high-ranking Republican officials, including former party chair Will Hays - now head of the Motion Picture Producers and Distributors of America (better known today as the MPAA) - and two of the leading Republicans on the committee, Reed Smoot and Irvine Lenroot of Wisconsin, as well as Harry Sinclair and a Sinclair lawyer. Perhaps with their help, perhaps without - the stories differ - Fall drafted a letter for the Committee saying that Ned McLean had been the source of the loans.15

When this was announced, here again was a moment where the investigation could have run its course. McLean was known as both a generous and an eccentric sort, and he was clearly fond of Fall and the rest of the Harding administration. But Senator Walsh wanted to hear it from McLean personally, especially since Walsh knew from his own girlfriend -- Washington society dame Daisy Harriman -- that McLean was in fact flat broke. "Much of Washington thought [Walsh] obsessed, a reformer become fanatic," journalist Mark Sullivan later wrote. "Throughout the country the oil investigation as a spectacle teetered toward the status of a comedy; in the newspapers there was a trace of jeering." When Walsh asked McLean to testify, the publisher's lawyer, A. Mitchell Palmer, informed the Committee that McLean was too sick to make an appearance, and could not leave his current location of Palm Springs, Florida. (Also with McLean in Palm Springs at the time: Albert Fall, who had checked in at a hotel under an assumed name, and Coolidge's new private secretary, C. Bascom Slemp.)16

If the witness would not come before the Committee, the Committee would come before the witness. In January 1924, Senator Walsh went down to Palm Beach to interview McLean personally. In the face of Walsh's probing questions, McLean said that, yes, he'd written $100,000 in checks to Fall, but they had all come back a few days later uncashed. The plot thickened when Archie Roosevelt, son of the former president and brother to Assistant Secretary of the Navy Theodore Roosevelt, Jr., came before the Committee to say, first, that his boss, Harry Sinclair of Sinclair Oil, had just run off to Europe, and, second, that he'd heard Sinclair had paid Albert Fall $68,000. (The following witness, Sinclair's private secretary G.D. Wahlberg, tried to argue that Roosevelt had misheard, and in fact Sinclair had given Fall "six to eight cows." The Committee did not buy it.) That same month, Edward Doheny testified that he had lent Fall $100,000, in a black bag delivered his by son, but, of course, it had nothing to do with the lease transfers a year later. And, besides, $100,000 was a pittance to a man of Mr. Doheny's wealth. The Committee did not buy that either.17

Now, the Teapot Dome scandal was front-page news all over the country, to the point of possibly damaging Calvin Coolidge's electoral chances in the coming November. And so, when Coolidge got word (from one of his men on the committee, Irvine Lenroot) that Senator Walsh was about to call for the firing of Secretary of the Navy Denby, as well as a presidential resolution canceling the leases, the president preempted him by announcing the appointment of "special counsel of high rank, drawn from both political parties" to look further into the scandal. The Senate passed Walsh's resolution regardless, which Coolidge ignored. But Coolidge wasn't the only presidential aspirant in danger of being drenched with oil. At the provoking of Senator James Reed of Missouri, who desired the coming Democratic nomination for himself, Edward Doheny roiled the national press with more damaging testimony in January 1924 -- he admitted to having had paid William Gibbs McAdoo $250,000 in legal fees since 1921.18

With the president now committed to an investigation, the dominoes began to drop. On February 2nd, Fall once again appeared before the Walsh committee and, this time, invoked his Fifth Amendment rights. Six days later, Borah made the case on the Senate floor for Edwin Denby's impeachment. "The Senate has been in the past the scene of many notable controversies," he argued. "but I venture to express the opinion that no situation more humiliating, more demoralizing, and to some extent more discouraging has ever been here for our consideration or the consideration of those who have gone before:
Vigilant observers have known for a long time how subtle and how powerful have been selfish and sinister interests in achieving their schemes and in gratifying their sordid ambitions here at the Capital. But few, if any, dreamed that they had actually placed a price upon the national defense and upon national honor itself.19
Ten days after Borah's speech, on February 18th, Denby resigned from the Coolidge administration. The following week, Walsh's Montana colleague, Senator Burton Wheeler -- in what he later deemed "the most important speech of my career" -- called for an official Senate investigation into why Attorney General Harry Daugherty, of the "Department of Easy Virtue," had done nothing to arrest or prosecute the Interior Secretary. "Here the Congress of the United States had appropriated one million dollars for the detection and prosecution of crime," Wheeler roared, and "instead of trying to detect the greatest crooks and those guilty of the greatest crimes against the nation that have ever been perpetrated, we find the Department of Justice protecting them." As such, evidence suggests "that the Attorney General of the United States, now occupying the highest legal position in the government, is guilty of many crimes." Wheeler's resolution passed 66-1.20

The following month, on March 12, Wheeler's investigations began with his star witness -- Roxy Stinson, the ex-wife of Jess Smith -- who testified in lurid detail about the grifts Smith and Daugherty had been up to in the Little Green House on K Street, and of the fear Smith held just prior to his suicide that the gig would soon be up. "Jess Smith gave his life for Harry Daugherty," Stinson testified, "he absolutely adored him." Stinson's five days of testimony became a media circus of sorts. The hearing, according to the Washington Times, "had all the atmosphere of a murder trial, combined with the bated breath excitement of the opening of King Tut's tomb - the King Tut in this instance being poor Jess Smith."21

Wheeler followed up Stinson with Gaston Means, one of Billy Burns' cronies at the Bureau of Investigation and an inveterate storyteller. (He would later "write" a sensation-causing 1930 book -- it was ghostwritten -- The Strange Death of President Harding, which claimed the president has been poisoned by his wife.) "Means had a brilliant mind," Wheeler later wrote of his witness, "and could have distinguished himself if he had used it in constructive channels. But you never knew when he was lying." Means, who was also working as a paid mole in the Wheeler investigation for Billy Burns, peddled more dark, mostly uncorroborated tales of criminality within the Ohio Gang. 'The rascally Means was more trouble to us than he was worth," Wheeler argued, but his tales helped to keep the pressure cooking on the Coolidge administration.22

When Daugherty refused to hand over records to the Wheeler Committee -- claiming they were being demanded by Senators "who spent last summer in Russia with their Soviet friends" -- Coolidge had had enough. The president forced his resignation from office on March 28th, 1924. Billy Burns left the Bureau of Investigation a month later, having been pushed out by new Attorney General Harlan Fiske Stone.23

Before leaving office, the Attorney General tried to fire back at Senator Wheeler by falsely accusing him, in his Montana lawyer days, of taking pay from an oilman to represent his interests before the Department of the Interior. The smear did not take. "It is safe to say," Felix Frankfurter wrote in The Nation, "that never in the history of our country have congressional investigators had to contend with such powerful odds…There is no substantial basis for criticism of the investigations of Senators Walsh and Wheeler." "They're trying to stop you," Justice Brandeis told Wheeler, "Don't let them stop you, because that's all they're trying to do!"24

Immediately a "Wheeler Defense Committee" of prominent progressives was formed by Norman Hapgood and Basil Manly to help the Senator pay his legal fees - It ended up raising $15,000. A Senate committee headed by William Borah looked into the charges and found not even "the slightest evidence of criminal intent," and Borah himself called the attempt "a sad, sorry story." In 1925, a Montana jury acquitted Wheeler of the trumped-up charge after only ten minutes of deliberation. "The story of this prosecution against Senator Wheeler," argued his Montana colleague Tom Walsh, who also represented Wheeler in trial, "makes a black chapter in the history of American jurisprudence." Telegrammed an ailing Robert La Follette to his former running mate after the verdict: "[E]very decent self-respecting American citizen must bow his head with shame in the face of the established fact that the leaders of a political party and its highest responsible public officials have prostituted a great department of government to subvert justice, shield the guilty, and convict an honest man of crime."25

In the summer of 1924, meanwhile, having "uncovered corruption without parallel in the history of the country," Thomas Walsh brought his own hearings came to a close. "Corruption in public life is a vice that eats into the very structure of our system," Walsh told a national radio audience. "Exposure of it is a service of the highest order and…swift, certain, and condign punishment is the only cure for it outside of moral regeneration." But, after the salacious testimony of Roxy Stinson, the nation had once again begun to lose interest. That July, in the midst of the Democratic convention, Albert Fall, Harry Sinclair, Edward Doheny, and Ned Doheny were indicted for bribery and fraud. The following November, Calvin Coolidge would easily coast to victory in the 1924 election.26

Even after the public lost interest, there was still some mopping up to do. In March 1925, the special counsels appointed by Coolidge -- Republican Owen Roberts and Democrat Atlee Pomerene -- argued before a Sinclair-friendly judge in Cheyenne, Wyoming that the Elk Hills and Teapot Dome leases should be voided. Sinclair won that round on his home turf, but the US Circuit Court of Appeals soon overturned the decision, and, in September 1926, the Supreme Court ruled that the leases were "tainted with corruption" and should be voided. At long last, the oil reserves were back in the hands of the government. In October 1927, Harry Sinclair and Albert Fall were tried for criminal conspiracy - which resulted in a mistrial when a juror blabbed that Sinclair was buying off jury members with "an automobile as long as a block." A few years later, in October of 1929, Albert Fall was convicted of bribery and sentenced to one year in prison and a $100,000 fine. He served nine months and nine days, and became the first Cabinet member in history to be convicted of a crime.27

But, even after the leases had been returned, there was still one more loose end.

While helping the two independent prosecutors to build their case in the summer of 1924, a Secret Service agent, Thomas Foster, noticed that, back in May 1922, Sinclair paid Fall $230,000 in sequentially numbered Liberty Bonds. As it happened, similar bonds kept popping up all over the course of the investigation - After leaving Interior, Albert Fall had been paid $25,000 in bonds by Harry Sinclair to visit Russia and help open doors there for his oil company. Similarly, Will Hays had testified that Sinclair had given him $75,000 in bonds to help pay down the $1 million in debt the Republican Party held after the election of 1920. All of these bonds were part of the same sequentially numbered set, and they had all been bought by something called the Continental Trading Company. Following this trail led the Secret Service to a Toronto lawyer named H.S. Osler, who said that he was the sole owner of Continental, that all the records had been destroyed, and that he didn't know, except by reputation, any of the people he was being asked about. But Harry Sinclair's former secretary, G.D. Wahlberg -- the same man who had told the Walsh committee of "six to eight cows" -- said that, yes, of course Osler knew Harry Sinclair. They talked all the time.28

When Foster went back to Toronto with the lie revealed, Osler admitted that Continental had been created for some "oil clients" to handle a transaction involving a Colonel A.E. Humphreys of Denver, Colorado. Foster then interviewed Humphreys, who told of another dark conspiracy afoot. At the Vanderbilt Hotel in New York in 1921, Humphreys had met with Osler and the four partners of Continental -- Harry Sinclair, Robert Stewart of Standard Oil of Indiana, Harry Blackmer, the Chairman of Midwest Refining, and James O'Neill, the president of Prairie Oil and Gas. He had sold these four prominent oilmen 33,333,333 barrels of oil at $1.50 a barrel, who had then sold it to their respective companies at $1.75 a barrel - creating an instant profit of $8 billion. Taking 2 percent off the top as his fee, Osler had then converted $3 million of this sum into Liberty Bonds, and handed them out to the respective oilmen.29

In other words, four of the most respected oil barons in the country had defrauded their stockholders of millions to create a slush fund for their own personal use. When Roberts and Pomerene tried to incorporate these revelations into their Cheyenne case, they found that Osler had gone off to safari in Africa, Sinclair had already taken the fifth, and Blackmer, Stewart, and O'Neill all just happened to be in Europe and out of the reach of a subpoena.30

In January 1928, prompted by a St. Louis Post-Dispatch reporter who had been connecting the dots himself, Senator George Norris called for a further investigation into the Continental Trading Company, to be once again headed by his fellow committeeman Senator Walsh. Walsh was sixty-eight and tired by this point, and he didn't think the investigation would gain much traction in the public eye in the midst of Coolidge prosperity. But he once again took up the standard. After establishing a link between Fall, Sinclair, and the bonds, Walsh called Standard Oil of Indiana's Robert Stewart to the stand and asked him about the bonds. Stewart refused to answer, claiming, "[t]hat is none of your business, Senator, nor is it the business of this committee." For his recalcitrance, Stewart - like Sinclair before him - was threatened with contempt of Congress, charges his high-priced lawyers would spend the next several weeks fighting.31

In the meantime, Walsh did a better job eviscerating his next witness, former Republican National Chairman Will Hays. Over the course of the investigation, Secret Service men had noticed that $300,000 of the offending, sequentially-numbered Liberty bonds had ended up in the RNC's account. When Walsh asked Hays how those had got there, Hays testified that Sinclair had given him $260,000 in bonds in November 1923 to help pay down the 1920 campaign debt. It soon came out that Hays had split up these bonds among several Republican fundraisers -- T. Coleman du Pont, former treasurer of the committee; Harding Secretary of War John Weeks; Fred Upham, another former treasurer of the committee; and John T. Pratt -- who sold them to prospective donors for their cash equivalent. In other words, Will Hays and the Republican Party had effectively presided over a money-laundering operation for the dirty bonds. Upon this revelation, Senator Borah immediately began an effort to have small-dollar Republican donors pay back Sinclair to rehabilitate the party. "For the party to keep the money after it is known how it was secured is to endorse the manner of securing it," he argued. "[W]hen the facts are revealed we ought to have the courage to deal with the situation ourselves and not permit it to be said that we are conniving at the wrongdoing." In the end, he only raised about $8000, which he eventually returned.32

Even more intriguing from the Senate's perspective, among the files of John T. Pratt was a handwritten note listing the amount of bonds that had gone to various party officials. It listed $50,000 going to a "Candy" or "Andy." This brought the "greatest Secretary of the Treasury since Alexander Hamilton," "Andy" Mellon, into the fray. Appearing before the Committee, Mellon admitted that Will Hays had tried to offer him $50,000 in Liberty Bonds by way of Harry Sinclair, but Mellon had refused, "because I would be making a subscription that was not what it was reported to be." When asked why he had never mentioned these bonds over the past five years of investigation, Mellon replied that he "can't follow all these investigations. I have troubles of my own and much work to do." Secretary Mellon being a very important man, the Committee took this dubious rationale at face value.33

Secretary Mellon wasn't the only man of means for whom the rules seemed different. Harry Sinclair already had nine months of jail time in front of him for contempt of the Senate and jury tampering in he and Fall's first trial. But in April 1928, with the best lawyers money could buy at his disposal, he was found not guilty of fraud and bribery by a jury. "Why, everybody in the United States and even the Supreme Court knows he is guilty," George Norris spat in disgust. "He has too much money to be convicted. We ought to pass a law now to the effect that no man worth a hundred million dollars should ever be tried for any crime." Hearing the news that Sinclair was out of legal trouble for good, another fellow with a good bit of money to his name, Robert Stewart, showed the other directors of Standard Oil of Indiana the $759,500 in Continental Liberty bonds he had always had in his safe. Stewart never did go to prison, but he did make one key mistake. When he returned to the Senate witness chair to remove the threat of the contempt charge, Senator Bronson Cutting asked him what his boss, John D. Rockefeller, Jr., might think of Stewart defrauding stockholders. Stewart replied "I don't know, and I don't care." Embezzlement aside, Rockefeller did not like this display of contempt from his chairman, and he worked to have him fired at the next shareholder meeting.34

Through the many years of investigations into Teapot Dome and Continental, there was always the potential for one more unindicted co-conspirator. And while he was never brought officially into the investigation, and to this day has not been definitively tied to any wrongdoing, there is still some circumstantial evidence to suggest that Warren Gamaliel Harding also had his hands in the till. Among others, C. V. Berryman, the son-in-law of Denver Post editor Frederick Bonfils, claimed that it was Harding who first met with the two editors to get them to "let up on that oil business in Wyoming," and who later convinced Harry Sinclair to pay their asked-for $1 million in blackmail.35

And then there was the matter of the Marion Star, Harding's old newspaper. Two days before the President left on his fatal trip, he was visited by newspaper publishers Roy Moore and Louis H. Brush, the latter of whom happened to be a friend of Harry Daugherty and the top Republican fundraiser in Ohio. They offered to buy the president's old newspaper for $500,000 -- roughly $375,000 more than they had recently paid for a comparably-sized paper in Albuquerque. Harding - whose salary was $73,000 a year -- took the deal immediately, and the two men promised to pay the president shortly…in Liberty Bonds. Harding then told his stockbroker to buy $500,000 of stocks for him on margins. The name on Harding's account was Walter Ferguson, one of his Secret Service men. Was this $500,000 a thank you from Harry Sinclair for playing ball? Why did Harding use a fake name on his stock account? Did Florence Harding burn her husband's papers on account of his many extramarital trysts, or was he involved in something else?36

"My dear Senator," William Allen White, wondering much the same, wrote to Thomas Walsh in March 1928, "[d]id you ever think that big lot of Liberty Bonds found in Harding's estate…might have come there by way of the Continental Jackpot?" Walsh did think it possible, and looked into it. His investigators ultimately found $380,000 in Liberty bonds in the Harding's estate -- but the serial numbers did not match up with the usual sets of Continental activity. Of course, over five million of the original $8 million slush fund was never found anywhere.37

Whether or not Harding was personally involved in the criminality of his administration, progressives -- Gifford Pinchot, Harry Slattery, Robert La Follette, George Norris, and especially Thomas Walsh -- had initiated and led an investigation that uncovered flagrant illegalities by oil companies and government officials both, a conspiracy that reached right into the heart of federal land policy. "To tell you the truth about it, Frank," Borah wrote a friend in February 1924, as the Teapot Dome scandal began to inflict casualties in the administration, "I have been so demoralized…that I have hardly permitted myself to think about it. I must say that it dampens my ardor for anything in politics in the future. I do not know where the fearful, sordid trail will lead to nor what the consequences are to be. I never supposed that the Capitol at Washington would become a cesspool for such miserable transactions." While he thought the situation "indescribable and almost intolerable," Borah could at least console himself "with the thought that it will lead to a heroic effort upon the part of the people and public men who see things right to clean up."38

Unfortunately, no such heroic effort of the people came about. However baroque the details, this was a black-and-white case of dirty dealings by what, ten years earlier, would have been deemed an "Oil Trust." Once their interest was piqued, the newspapers went along for the ride and reported the scandals as front-page news, thus doing their part to inform and enlighten public opinion. And yet, the public seemed to grow disinterested with the scandals. "For God's Sake, Americans, Wake Up!," screamed a 1922 editorial in The Searchlight on Congress when the first of the scandals broke. But at best, columnists such as Will Rogers would later write of the "great morality panic of 1924" like it was just another passing New Era fad, like crosswords and Mahjong. And even then, this "morality panic" didn't register much at the ballot box. When given a chance to make 1924 a referendum on the Harding scandals and 1928 one on the corruption within the Republican Party, the general population of America mostly just shrugged, and returned the offending administrations into power in overwhelming numbers.39

"What does all this mean?" H.L. Mencken wrote in 1924, surveying the election results and summing up the progressives' dilemma. "That the people of the United States are not against robbing the Government? I suspect as much. More, I have suspected it for years. Yet more, I have argued it for years…They are not in favor of stealing per se, but stealing from the Government somehow seems to them less reprehensible than other kinds." "The plain fact," wrote Mencken in another column, "is that the American people are not against corruption. They do not loathe the successful thief, but admire him. It is precisely the most corrupt political machines that are the most secure."40

What was the point in standing up for the public interest if, in the end, nobody seemed to care? That was another unanswered question of Teapot Dome that would continue to haunt progressives.

Continue to Chapter 6: Legacies of the Scare.

Return to the Table of Contents.

1. Russell, 526.
2. McCartney, 32-33. 65-68, 85. Noggle, Teapot Dome, 23-24.
3. McCartney, 66.
4. McCartney, 66-67.
5. Ibid, 84-87.
6. McCartney, 93-104.
7. Noggle, Teapot Dome, 35-36.
8. Noggle, Teapot Dome, 28-29, 34-35.
9. Noggle, Teapot Dome, 40-42.
10. McCartney, 114-115.
11. McCartney, 121-122, 140.
12. Ibid, 125-127, 139-131.
13. Wheeler, Yankee from the West, 217. Noggle, Teapot Dome, 43-44. McCartney, 110, 116-118.
14. McCartney, 169-174.
15. McCartney, 183-186.
16. Ibid, 187-191.
17. Ibid, 193, 196-199, 202-203.
18. Ibid, 209-210, 212-213.
19. William Borah, "The Denby Resolution - Impeachment," February 8, 1924. Congressional Record, 85493-176.
20. Wheeler, 213-214. McCartney, 214-215. 228-229.
21. Wheeler, 224-225. McCartney, 234-235.
22. Wheeler, 226-227. McCartney, 234-235. Gaston Means would die in prison in 1937, Wheeler recounts in his memoirs, "after being convicted of providing fake clues in the Lindbergh kidnapping."
23. Ibid. Wheeler, Daugherty would later write, was "the communist leader of the Senate….Wheeler is no more a Democrat than Stalin, his comrade in Moscow." To the last, Daugherty deemed himself "the first public official that was thrown to the wolves by orders of the red borers of America." Wheeler, 230.
24. Wheeler, 234, 236.
25. Among the progressive notables on the Wheeler Defense Committee were William Allen White, Josephus Daniels, Oswald Garrison Villard, Jane Addams, Harold Ickes, Father John A. Ryan, Donald Richberg, Norman Thomas, Roger Baldwin, Paul Kellog, J.A.H. Hopkins, John Haynes Holmes, Louis F. Post, Herbert Croly, Henry Mencken, and Felix Frankfurter . "Wheeler Defense Committee," May 6, 1925. WJB Box 193: Wheeler Trial. Wheeler, 242. William Borah, "For the Press," April 25, 1925. WJB Box 780: Speeches. "Prosecution of Wheeler Scored by 2 Senators," Chicago Tribune, March 15, 1926. Borah Box 219: Wheeler Trial. "The Wheeler Acquittal," Literary Digest, May 9, 1925, 13. "Senator Wheeler's Acquittal," The Outlook, May 6, 1925, 8. Robert M. La Follette to Burton Wheeler, April 24, 1925, Borah Box 193: Wheeler Trial.
26. McCartney, 235, 244.
27. McCartney, 250-255, 263-264, 313.
28. McCartney, 241-243.
29. McCartney, 243, 252. Colonel Humphreys would die of an apparent self-inflicted gunshot wound to the head in May, 1927.
30. McCartney, 284.
31. McCartney, 259-261
32. McCartney, 274-276. Borah to W.S. Johnson, March 19, 1928, Borah Box 256: Newspapers. Borah to Nicholas Ifft, April 21, 1928, Borah Box 256: Newspapers.
33. McCartney, 277-280.
34. McCartney, 287-288, 290, 298-299.
35. McCartney, 139-140.
36. McCartney, 145-146.
37. McCartney, 284-285.
38. Borah to Frank T. Wyman, February 29, 1924. WJB, Box 170: 1923-24: Frank T. Wyman. Borah to Oscar Foote, March 1, 1924. WJB Box 161: Newspapers. Borah to Abner P. Hayes, February 26, 1924, WJB Box 169: Teapot Dome.
39. Murray, The Politics of Normalcy, 133. Lynn Haines, "For God's Sake, Americans, Wake Up!" The Searchlight on Congress, May 31st, 1922, 3. Noggle, Teapot Dome vii.
40. Mencken, 120-121, 159-160.

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