After Warren G. Harding's election as U.S. president, friends and colleagues from the Ohio area moved to Washington, D.C., and made their headquarters in a house on K Street, an area famous for political connections and clout. Eventually known as the "Ohio Gang," the financial and political scandals caused by these men – in addition to Harding's own personal controversies – severely damaged Harding's personal reputation and eclipsed his presidential accomplishments. By far the most damaging was the so-called Teapot Dome Scandal, a bribery conspiracy that occurred in 1922-1923.
Teapot Dome Scandal
The origins of the scandal went back to conservation legislation of presidents Theodore Roosevelt, William Taft and Woodrow Wilson, including the creation of naval petroleum reserves in Wyoming and California. Three naval oil fields, Elk Hills and Buena Vista Hills in California and the Teapot Dome Oil Field in Wyoming, were tracts of public land reserved for underground supplies to be used by the U.S. Navy only when regular oil reserves diminished to emergency levels.
Senator John B. Kendrick of Wyoming received a letter in April 1922 alleging Sinclair Oil Corporation had been given a secret deal involving federal lands in his state. Kendrick called for an inquiry, which was led by Senator Robert La Follette of Wisconsin and included Senator Thomas J. Walsh of Montana, a junior member of the Senate minority, who from 1922-1923 doggedly investigated alleged wrongdoing by Secretary of the Interior Albert Bacon Fall.
Earlier in 1922 Fall had leased naval petroleum reserves at Teapot Dome, Elk Hills and Buena Vista Hills at favorable rates, and without competitive bidding, to Pan American Petroleum and Transport Company and Mammoth Oil, a subsidiary of Sinclair Oil. The leases themselves were not illegal, but Fall accepted bribes from the companies to secure the deals totaling approximately $404,000 (about $5.36 million today), including a no-interest loan of $100,000 ($1.3 million today) from Pan American oil baron Edward L. Doheny. Fall used money from the bribes to improve his cattle ranch and business investments, and his attempts to cover the deals were successful in spite of the ongoing investigation by Senator Walsh. That was until 1924, when questions arose about how Fall had quickly and noticeably improved his standard of living and wealth. Walsh then uncovered evidence of the $100,000 loan from Doheny, leading to revelations of the other secret gifts.
Teapot Dome Senate Committee, 1924
Oil businessman Edward L. Doheny, second from right at table, testifying before the Senate committee investigating the Teapot Dome oil leases in 1924.
In 1927 the Supreme Court ruled that the oil leases involved in the Teapot Dome Scandal had been fraudulently obtained. Fall was found guilty of bribery in 1929, fined $100,000 and sentenced to one year in prison, making him the first presidential cabinet member to receive a prison sentence for his actions in office.
The scandal revealed the problem of natural resource scarcity and the need to protect against future depletion of resources in times of emergency. The concentrated attention by the media and the public also made it the first large symbol of government corruption in America. Before the Watergate scandal in the 1970s, Teapot Dome was largely regarded as the greatest and most sensational scandal in American political history.
Albert Fall, Secretary of the Interior
Interior Secretary Albert Bacon Fall became infamous for his involvement in the Teapot Dome scandal, in which he took bribes in exchange for oil leases.
Smaller Scandals
Albert Fall was a member of the so-called Ohio Gang that also included Attorney General Harry M. Daugherty and U.S. Navy Secretary Edwin Denby, among others. In addition to involvement in Teapot Dome, the Ohio Gang was believed to have been behind recurring acts of cronyism and corruption, including storing bootleg whisky inside the White House.
Graft and corruption charges permeated Harding's Department of Justice, run by Daugherty, who was involved with an illegal liquor scheme in which bootleggers got their hands on tens of thousands of cases of whiskey through bribery and kickbacks to government officials. In another example of official misconduct, Charles Forbes, head of the Veterans Bureau, was convicted of fraud and bribery in connection with government contracts.
Harding himself was involved in scandals with women. Beginning when he was a newspaper publisher in Marion, Ohio, Harding conducted a long, extramarital affair with Carrie Fulton Phillips, a local merchant's wife, which continued into his time as a U.S. senator, ending only when Phillips blackmailed the senator over the relationship. Harding had another affair with a woman named Nan Britton, the daughter of a friend of Harding, while he was still a senator and continuing throughout his presidency. The relationship did not come to light until 1928, five years after Harding’s death, when Britton published a memoir that included torrid details of the affair including trysts inside the White House. She also claimed they had a child together the year before his election as president, but it was not until 2015 that DNA testing confirmed Britton’s daughter, Elizabeth Ann Britton Harding Blaesing, was indeed fathered by Harding.
Suffering exhaustion and illness believed to be brought on by the stress of the various controversies, Harding died before the end of his term, of an apparent heart attack in August 1923 during a cruise to Alaska.