CORRUPTION: Dome Comes Home

When thieves filch a necklace, society’s prime interest is in seeing the thieves caught & convicted. The owner of the necklace, however, is primarily interested in recovering the necklace.

For this reason last week’s U. S. Supreme Court decision in the last of the civil cases arising out of the oil scandals of 1924 was of greater interest to society than the outcome of the criminal suits still pending. The necklace in the case was an oil reserve worth 100 millions and the owner was society. The decision restored to the U. S. Navy the tract of 9,321 oil-bearing acres called “Teapot Dome” in Natrona County, Wyo., which onetime (1921-23) U. S. Secretary of the Interior Albert B. Fall leased in 1922 to Oilman Harry F. Sinclair & associates to develop and operate on a royalty basis for gas and oil “as long as produced in paying quantities.”

Figures. The total recoveries of the U. S. from the Fall-Sinclair and earlier FallE. L. Doheny cases were estimated by Government estimators as follows:

ELK HILLS (Doheny)

720 million bbl. oil $300,000,000

Oil extracted; equipment; improvements 24,000,000

TEAPOT DOME (Sinclair)

230 million bbl. oil 100,000,000

Oil extracted; equipment; improvements 9,560,000

Total $433,560,000

The $9,560,000 item above represents the extent of the loss suffered by Oilman Sinclair & associates. Only Congress can reimburse them for their outlay on Teapot Dome, the court holding that the illegality of their lease voids their equity in tanks, pipelines, oil stores, etc., acquired under same.

The cost to the U. S. of recovering its property was some $240,000 of which some $100,000 remains to be appropriated by Congress.

“People Should Be Happy.” After the Teapot Dome verdict was announced last week, Lawyer Owen J. Roberts, colleague of onetime U. S. Senator Atlee Pomerene on the Government’s legal staff, proclaimed: “The people of the United States . . . should be very happy this night!”

The Decision. As in the Fall-Doheny ease (TIME, July 18), the Supreme Court’s decision was written by Associate Justice Pierce Butler. It approached the question of the legality of the Teapot Dome lease by describing the property and the lease’s terms, and then seeking to discover whether there was a conspiracy to defraud the U. S. Like five of the six U. S. courts through which the case has passed, the Supreme Court was led to believe that there had been a conspiracy, by four main links of evidence dating from Christmas time, 1921: 1) Edwin Denby, then Secretary of the Navy, took a passive role, letting John K. Robison, U. S. N., then a Rear Admiral but now a Captain, represent him at conferences on the oil reserves which Secretary Fall was “keen to control.” 2) At Mr. Fall’s behest, Rear Admiral Robison told Oilman Sinclair how Teapot Dome should be developed. Mr. Fall then told another prospective bidder for the lease that he was not yet considering bids. Not until three days after signing the Sinclair lease, did Mr. Fall tell another bidder that the bidding was now open. 3) Secretary Fall did not submit the Sinclair lease to the Attorney General or any lawyer of the Department of the Interior. 4) The Continental Trading Co. was formed by Mr. Sinclair—a dummy organization to accumulate and distribute oil profits. Of the eight millions realized by this company before its mysterious dissolution, $200,000 in Liberty Bonds, were traced to Secretary Fall and his son-in-law, one M. T. Everhart of Pueblo, Col. “There is nothing in the record that tends to mitigate the sinister significance of this enrichment.”

Brands. Though the case was a civil one, and the principals were still awaiting trial for criminal conspiracy, the Supreme Court branded Albert Bacon Fall as “faithless public officer.” The phrase “to conspire to defraud the U. S.” was also attached to Mr. Fall’s name; also “collusion” and “conspiracy” itself.

Other Trials. The Fall-Sinclair lawyers worked feverishly after last week’s decision, on plans to prevent the U. S. Supreme Court’s harsh words and phrases from being introduced at this week’s jury trial in the District of Columbia Supreme Court, when society, having recovered its necklace to the last black pearl, will decide how to deal with the men who took it away.

Two other oil scandal trials will remain after the Fall-Sinclair conspiracy trial: 1) trial of Albert B. Fall, Edward L. Doheny and Edward L. Doheny Jr. for bribery; 2) appeal of Mr. Sinclair from his conviction of contempt of the U. S. Senate. “Not Worried.” Passing through Chicago last week on his way to trial, Mr. Fall said: “I am not worried. It has not occurred to me that I might be found guilty. A man who is absolutely sure of his integrity never thinks of that, you know.”