PULLMAN, Wash. — While history may not repeat itself, there are some striking parallels between today’s White House controversies and those of the Harding Administration of the 1920s, according to Washington State University historian David Stratton.
Like President Clinton, Warren G. Harding has been hounded by critics for alleged sexual indiscretions. He was rumored to have fathered of a child produced by one of his extramarital liaisons. The Harding era was one of deep partisan division, marked by conflict over the powers of the Presidency and Congress. Senate investigations of corruption resulted in the first Cabinet officer in U.S. history being sent to prison for crimes committed while in office.
The “granddaddy” of 20th century political scandals is how Stratton describes the Teapot Dome affair and conviction of Interior Secretary Albert Fall for bribery in awarding contracts for tapping government oil reserves.
In his book, “Tempest Over Teapot Dome,” published in 1998 by the prestigious University of Oklahoma Press, Stratton sets the context for the events played out in Congressional investigations, civil and criminal trials.
Fall was the quintessential Westerner, a maverick of New Mexico politics who switched to the Republican Party in 1907 after nearly two decades as a kingpin in the Democratic Party. He made a reputation as a corporation lawyer, and also successfully defended in court the accused killers of Pat Garrett, the sheriff who shot Billy the Kid, and of Texas outlaw John Wesley Hardin.
Stratton describes Fall as a colorful, charismatic man of action, who was always surrounded by controversy. A long-time associate said that in New Mexico Fall had no mere acquaintances, but that everyone there was “his steadfast friend” or a “bitter enemy,” and they all admired him.
Fall was chosen by the first state legislature of New Mexico as one of two U.S. Senators and soon gained prominence as one of the most strident voices for military intervention in Mexico to protect American lives and commercial interests.
Oil was becoming the primary issue of geopolitical competition in the early part of the century. The United States was the number one oil producer in the world. Mexico was second, with American investors largely underwriting the development south of the border.
In World War I, the Allies floated to victory on a wave of oil, more than 80 percent of which was furnished by the United States, Stratton writes. Soon after the armistice, despite a glutted oil market, Americans experienced “frightened doubt” when experts gloomily predicted the depletion of domestic reserves in 10 or perhaps 20 years, he explains.
One major concern in the postwar oil crisis was the national imperative to guarantee adequate petroleum for the U.S. Navy. Public lands had earlier been set aside as the Navy’s emergency petroleum reserves at Elks Hills and Buena Vista Hills in California and Teapot Dome in Wyoming.
As Harding’s Interior Department Secretary, Fall gained administrative authority over the Navy’s oil reserve lands. He later granted leases to the properties to oil millionaires Harry Sinclair and Edward Doheny.
Legal proceedings after Fall left office revealed that he had received $404,000 from Sinclair and Doheny.
While not an apologist for Fall, Stratton, a native New Mexican, weaves a more complex story than a simple case of a public official on the take.
Stratton writes that the money Fall received from the oilmen played only an incidental role in determining his actions, “although there would have been no public outcry if he had not taken it.”
Fall held the conviction that private enterprise possessed vested rights in the use of the West’s natural resources. “More than anything else, Fall’s economic philosophy explained his decisions in not only the naval oil-leasing episode but in his entire political career as well,” says Stratton.
In fact, he states, Fall undoubtedly would have leased the naval reserves to Sinclair and Doheny anyway, or to other representatives of private enterprise.
Other factors intertwined in Albert Fall’s political demise were his vehement opposition to President Wilson’s Versailles Treaty with its proposed League of Nations and conflicts with conservationists, including Gifford Pinchot, over the exploitation of public lands and resources. Congressional challenges of President Harding’s executive authority to transfer management of the Navy’s oil reserves to the Interior Department after Congress had voted control to the Navy Department was another part of the equation.
Not unlike today, says Stratton, the period of the 1920s was punctuated with debate about the role of government. The real scandal lay in Fall’s attempt to undo previous Progressive Era reforms, particularly those involving conservation of natural resources and restraint on corporate power.
In terms of modern leasing practices for federal oil lands, the author writes, Fall’s handling of the naval reserves was, in some ways, eerily visionary and enlightened.
As for the Navy properties, at President Clinton’s request, Congress in 1996 mandated the outright sale of Elk Hills to the highest private bidders and the study of options, including direct sale, of the disposition of Buena Vista Hills and Teapot Dome reserves.
Since a downsized, streamlined government was not in the business of making money, an Energy Department spokeswoman declared, the production of petroleum in competition with the private sector constituted an undesirable federal function.
The eventual sale of Elk Hills to the Occidental Petroleum Corporation of Los Angeles for $3.65 billion made the transaction the largest privatization of federal property in American history, Stratton points out.
“Albert Fall must have started spinning in his grave with indignation. Even as an unflinching corporation man, he had never seriously proposed the outright sale of the naval reserves,” writes Stratton. “Textbooks might still roundly condemn him as a notorious villain, but his oil policy had been adopted as gospel, indeed, in spades by the federal government.”