Environmental Protection Agency Administrator Scott Pruitt is engulfed by scandal. Each day seems to bring a new revelation. Last week, as several of his top aides departed the EPA, we learned that he treated government employees like a concierge-and-chauffeur service and used them to try to get his wife a Chick-fil-A franchise.
And yet Pruitt has so far survived the drip-drip of revelations because, in the mind of President Trump, environmental regulations are choking the economy, and Pruitt — with great effect — has become the principal person to roll them back. The president praised Pruitt as recently as last week.
While some of Pruitt’s methods for abusing his power are new and unique, his tenure is reminiscent of one of the biggest political scandals in American history. In 1920, another Republican president, Warren G. Harding, was elected with a primary goal of reorganizing government to let businesses run unimpeded, part of a purported “return to normalcy.” The result was the Teapot Dome scandal, the biggest presidential scandal until Watergate. It resulted in the first-ever indictment of a Cabinet-level official, Interior Secretary Albert B. Fall.
The Teapot Dome scandal reminds us what can happen when a president is indifferent to the dishonesty of an appointee who is effectively implementing the administration’s agenda. While the administration may score short-term policy victories, not only is it tarnished by the ensuing scandals, but its agenda — in Harding’s case, a vision of bolstering free enterprise by leasing land to major oil companies — also gets destroyed in the process.
Fall, a thin-skinned, ruthlessly partisan Republican senator from New Mexico, got his post because he earned Harding’s trust as a campaign adviser and friend in the U.S. Senate. It proved to be an inauspicious choice.
At the time, the Republican Party was divided into factions. Progressives such as former president Theodore Roosevelt and his trusted ally, U.S. Forest Service Chief Gifford Pinchot, prioritized conservation when it came to public lands and natural resources. They were aligned against Fall’s wing of the party, traditional conservatives who lacked this conservationist impulse and favored business interests.
Fall was a product of the Western frontier, and he made his money as a lawyer representing timber, mining and oil companies. The secretary also hated bureaucrats, because they slapped regulations onto industries that impeded jobs and development. His plan was to open every resource to exploitation, and it was an idea many New Mexicans supported.
With Harding’s support, within months Fall successfully achieved what his predecessor couldn’t: moving control of the U.S. Navy’s oil reserves to the Interior Department.
Almost a year later, Fall took advantage of this new power. He leased the oil reserves at Teapot Dome in Wyoming to Harry Sinclair’s Mammoth Oil Co. and the reserves at Elk Hills in California to Edward Doheny, an acquaintance of more than 30 years, of Pan American Petroleum and Transport Co.
The Harding administration saw this move through a lens of prosperity and national security. By 1920, the United States exported 80 percent of the world’s oil. Domestic demand was growing as well, as the Navy converted its ships’ engines from coal to oil and automobile ownership rose. But experts felt the existing U.S. oil reserves would be depleted in roughly 10 to 20 years, making it vital, both for the economy and national security, to identify new ones, even on public lands.
Conservationists, however, were upset about the leases. Their ranks included senators such as the progressive Robert M. La Follette (R-Wis.), who quickly began to investigate on his own. As controversy kicked up, Harding wrote a letter to the Senate saying he approved the leasing policy. In doing so, the president personally — and unwittingly — linked himself to what would become a burgeoning scandal.
The leases fell under the jurisdiction of the Senate Public Lands and Surveys Committee, which launched an investigation. However, La Follette and the committee’s top Democrat, Sen. John Kendrick (Wyo.), did not trust the Republican committee leaders to thoroughly investigate, so they proposed Sen. Thomas Walsh (D-Mont.) to run it. At this early stage, the Republicans weren’t worried, and they agreed. Seen as a relentless prosecutor, Walsh also had three Republicans on the committee who were willing to defy the president because of previous fights with Harding over farm and labor policies.
The investigation revealed that Sinclair had invested in Fall’s own New Mexico ranch and that Fall had received $100,000 from Doheny. Fall said the money came from Ned McLean, owner of The Washington Post at the time. It was a lie. Then, switching stories, in January 1924, Doheny testified unpersuasively that it was a personal loan, not a bribe.
Echoing today’s concerns about Pruitt, and in a larger sense, the swirling allegations of conflicts of interest surrounding Trump, senators began to wonder whether the loan and the ranch investment gave the oilmen an unfair advantage in securing the leases for the oil reserves. It created an untenable political mess.
Fall lasted less than a year after making the leases before he resigned in March 1923. He would later be convicted of bribery (totaling over $400,000, about $5.8 million in 2018 dollars) in 1931 and sentenced to one year in prison and a $100,000 fine. The fine and lawyer fees bankrupted the former secretary, who felt the trial was a political vendetta.
The oil industry lobbyists also suffered. Sinclair got a six-month sentence for contempt of court. And while Doheny was never convicted, the Supreme Court ruled the leases were fraudulent, resulting in their cancellation, which cost the two men millions.
Although Harding was not personally involved in any facet of the scandal, so zealous was he to achieve his policy goals that he allowed his friends and ideological allies to tarnish his presidency and torpedo his agenda.
Harding died in 1923, and his successor, Calvin Coolidge, played it smart. He distanced himself from the Teapot Dome scandal by reversing the executive order that had handed control of the oil leases to the Interior Department. He also got ahead of the Senate by announcing an independent prosecutor, sending the whole thing to the courts, all before the Senate could act. While the leasing policy was efficient — and fit with the ideology of the Republicans running the government in the 1920s — because of Teapot Dome, it was scrapped for more than 15 years.
Trump should learn from this scandal. Like Harding before him, Trump is apparently willing to accept what critics say is a permissive culture of corruption, allowing his associates to enrich themselves and abuse their power in the name of policy wins. But Teapot Dome reveals that these policy wins may turn into losses if Pruitt crashes and burns, drawing negative attention to his initiatives and the broader effort to deregulate business. Beyond just policy, we must not forget about the need to appoint people with integrity, because it not only damages Trump’s presidency but also our faith in democracy.