OIL SCANDALS

Sun (Auckland), Volume I, Issue 172, 11 October 1927, Page 1

OIL SCANDALS

GRAFT IN AMERICA LONG LITIGATION “FAITHLESS PUBLIC OFFICER” By Cable. —Press Association. — Copyright. B.ecd. 9.22 a.m. WASHINGTON, Mon. The Supreme Court has annulled the lease of the Teapot Dome Oilfields, which Albert Fall, formerly Secretary of the Interior, granted to Harry Sinclair's mammoth oil company, and which started the scandal of 1923.

The decision brings victory to the Government’s long efforts to regain control of rich naval oil reserves, as the court has already annulled the Elk Hills lease and President Harding’s executive order giving the Department of the Interior jurisdiction over navy oil has been revoked by President Coolidge. Associate Justice Butler announced the unanimous decision of the court in a 47-minute reading. He said there was persuasive evidence that Fall and Sinclair conspired to defraud the United States, and the failure of Sinclair to testify was strong evidence against his company. “We do not determine whether Fall was bribed, but in the court’s opinion Fall was a faithless public officer.” It is alleged that this is confirmed by his “clandestine and unexplained acquisition of bonds” from a Continental company, which was apparently formed “for some illegitimate purpose.”

The decision said: “Fall so favoured Sinclair and the making of the lease and agreement that it was not possible for him loyally and faithfully to serve the interests of the United States, or impartially to consider the applications of others for leases in reserve, and the lease and agreement were made fraudulently by means of collusion and conspiracy between them.” —A. and N.Z.

Litigation in the United States oil scandal has been going on for three years.

There were four indictments, one charging Fall, formerly Secretary of the Interior, with accepting a bribe from Doheny and defrauding the Government in leasing the reserves to Edward L. Doheny, the multi-millionaire oil magnate; Doheny with bribing Fall; Fall and Doheny with conspiring in connection with California oil reserves; and Fall and Sinclair with conspiracy to defraud the Government in leasing the Teapot Dome reserves. Subsequently the courts decided that the Elk Hills naval oil reserves in California, with a potential value of between 200,000,000 dollars and 300,000,000 dollars, were obtained by the Pan-American Petroleum and Transport Companies, belonging to Edward Doheny, through fraud and conspiracy. The Judge ordered that the reserves be returned to the Government, as the companies were not lawfully entitled to develop them. The investigations involved many wellknown men, including Mr. Denby. Secretary of the Navy, Mr. H. M. Daugherty, Attorney-General, Mr. W. son-in-law of President Wilson, and Jess W. Smith, who committed suicide after the disclosures.