McGrain v. Daugherty - Teapot Dome Scandal

The Teapot Dome scandal of the 1920s became a permanent symbol of corruption in the U.S. government. It marked the first time in U.S. history that an officer in a president's cabinet was convicted of a felony and served a prison sentence.

The scandal involved an area in Wyoming, called Teapot Dome, that had been set aside in 1909 by President William Howard Taft for naval petroleum reserves in the event of war. In 1920, Congress gave the secretary of the Navy broad powers to lease naval reserves, sell oil, or exchange it for naval supplies or construction. When Albert Bacon Fall became secretary of the interior under President Warren G. Harding, he revised an executive order giving the Navy control over the reserves so that leasing would not require the approval of the secretary of the Navy. Fall recommended the Navy take royalties on oil sold from leased reserves not in cash, but in oil certificates that would pay for naval construction.

The illegal moneys Fall received from leasing to oil barons allowed him to pay eight years worth of back taxes on his ranch, buy a racehorse and cattle, purchase a neighboring ranch, and build a hydroelectric plant.

The Teapot Dome scandal led to nine separate trials. Each individual involved was investigated for charges of conspiracy to defraud the U.S. government, contempt of the U.S. Senate, contempt of court for jury shadowing, perjury, accepting a bribe, and giving a bribe.