Evening Star Newspaper, March 23, 1930, Page 5

O CASESTARTED BY LA FOLETTE ‘Senator Caught Significance in U. S. Policy Announce- ment in 1922, ©On April 15, 1922, newspapers of the United States carried inconspicuously an apparently innocuous announcement by the Interior Department of “a new policy in handling fuel oil for the Navy, contemplating abandonment of attempts to keep the oil in storage under ground.” Most newspapers “buried” the item inside the paper, thereby cataloguing it with other routine news. Some papers, perhaps, threw the press release away in the rush of the day's news. Every editor of the country thereby “muffed” a tip on the biggest Govern- ment news story of a generation. But even editors are not seers, and they may be excused in view of the circum- stances. The Star printed the announcement on page 2 under a small head. The announcement caught the eye of the late Senator Robert M. La Follette, whose curiosity was aroused. The late Senator possessed an extraordinary fac- ulty for ferretting out the unusual from among the commonplace. To use plain language, he “smelled a rat.” That little news item carried in the papers one Spring day eight years ago ‘was the first instaliment of the “serial story” which in the intervening years has come to be slugged “the Naval Ol Scandals.” All subsequent episodes of that story, with few exceptions, have “hit” the front page without any diffi- culty whatever. Import of Simple Words. The original story is herewith repro- | duced, just for old times' sake: “The Interior Department has an- nounced a new policy in handling re- serves of fuel oil for the Navy, con- templating abandonment of attempts to keep the ofl in storage under ground. ‘The new scheme was worked out in co-operation with the Navy Department, & statement from the Interior Depart- ment said, and involves permanent storage above ground of royalty oils derived from naval oil reserve lands in California and Wyoming, storage to be made by operators at points on both coasts suitable for quick supply to the fleets in emergency. “‘Contracts have been made and are now being made which will insure the Navy ample storage for all the fuel oil which it has obtained now and which it will hereafter obtain from such re- serves. This storage will be located at such points that in time of erisis or need the ships can obtain the same at points from Guantanamo, Cuba, to the extreme northeast of Maine, and from California to Hawaii.” This statement referred to certain “contracts,” but did not specify to whom they were issued or with whom further negotiations were being made. Exactly one week before this press Telease was issued Secretary of the In- t;:hr Alhe;n. Fall and of the Navy Edwin Denby had signed lease giving to Harry F. Sinclair cer- tain drilling rights on naval ofl reserve, No. 3, known as the Teapot Dome, in Wmln‘. Just one week prior to the Sinciair lease President had issued the now famous executive order dividing control of the naval oil of rage facilities for naval oil from the Elk Hills reserves, in California. Attached to the contract was a clause giving Doheny preference in leasing of the Hills reserves. Speech Before Senate. ‘Three days after the Doheny contract was Senater La Follette arose in :l‘:nlle and wl:d n’u‘ call which precipitate. most_productive senatorial investigation in history—an investigation which was o lead eventu. ally to & chain of criminal and civil La Follette, before making his speech, had done a bit of investigation on his own hook. In that preliminary inquiry he had learned enough to impel him' to launch on the floor of the Senate & bit- the administration’s “new He declared the naval oil mm‘l‘:" of dollars which belong to the Ppeople.” ‘The Wisconsin firebrand climaxzed his outburst by introducing a resolution calling on the sdministration “for all| l(-cu and documents regarding the ofl leases.” In his address the late Senator said: “The throwing open of the naval re- serves by leasing the lands to oil cor- porations by the administration comes as a distinct surprise to the country. ‘The policy of 13 years of conserving under ground ofl in naval reserves has been abandoned. The three great naval | oil reserves have recently become vate ofl reserves. “Today the naval reserves are on the right road to destruction or exhaustion by allowing specially favored interests 1o secure leases upon them. They are being scrapped, that's all. “The circumstances surrounding this Government Files Suit to Annul ‘Teapot Dome Lease to Sinclair Cheyenne court holds lease valid. U. S. wins in U. 8. clrcu.lrpc':\llrt Sinclair als to U. 8. sup'r&'& Court U. S. Supreme Court Declares Tea Lease Voi Teapot Dame Returned to U. S. Government U. S. Sues Sinclair Crude Oil Purchasing Co, for Oil Bought -from Insolvent Mammoth Co, Cnse Pending euouplncy. Fall 'and Doheny Acquitted THE SUNDAY Owen J. Roberts as special .oil counsel. Special grand jury Inmcfil Fall, Sinclair . and Doheny on oil fraud charges. O fined $60,000 Sinclair acquitted in conspiracy case. Fall automatic- ally freed on conspiracy chargs. S. Supreme Court Y irma conviction of Sinclair, Day and Sherman Burns, but exonerates W. J. Burns. Fall & Sincleir | | Pall & Dohsny charged _with chlh!'l‘ld with H. M. Blackmer Fall, tried separately; convicted of taking bribe. STAR. WASHINGTON. Elk U. s. P. C, MARCH 23, E DIAGRAM OF RAMIFICATIONS OF THE NAVAL OIL SCANDALS Attorney Gen'l sues Pan-American Co. to set de 3 covering in Elk pending. Government Files Suit to Annul Hills Leise to Doheny Supreme Court Declares Elk Hills Lease V. Elk Hills Returned to oid U. S. Government inclair serves six months in D. C. Jail;. Day serves 4 months; Sherman Burns pays $1,000 fine. The above cha The Star with the co- tion of Owen J. Roberts, Government prosscuior, and his associates, shows clearly the amasing - mh-mm 'l"’-’l‘ D.-e' and ER ll;mlfl-. Legal actions instituted, both civil and criminal, are easily traced fo their conclusion or to this graphic outline. fuel oil for our Navy clearly indicates the need for the full light of publicity upon the interests which have moti- vated the Interior Department in the matter.” Attack Net Unusual. possessed , and if they did few could have told where they were located how they were administered. La Follette pursued his fight vigor- ously, however, and on April 30, 1922, five days after the Doheny contract was the Senate adopted the resolu- mmm Hard- Senate a iministration’s oil pol- declaring he believed credit ta the administra- to be construed as s de- vised the Sen- afford an ex- Senate is en- fair to say in policy which the Secretary of the Secertary of the In- hrior 1o agoption 0 a policy decided upon acts have at all i. fg FEEEY iigfsg ifesis i i i | to be preserved, the Government should & more active drilling cam- paign,” and he then suggested sirability of “effecting an exchange of fuel ofl, to be stored, without any cash jtates.” The 1t Near Corner 11th and F Ste. N.W. For Lease Available April 1st Feor Further Information See Walter A. Brown Nat'l 1652 1400 H St. N.W. departure from the policy of $40 in Cash Prizes | UNDREDS of answers IN RHYME (not over Someone Will Win the are pouring in. TELL US eight lines) what this man is saying about his “bum turnip. Do your very best NOW! and | Pan American Oil Co. for the Elk reserves, 0. | by the public iands 1 message | the de- crude oil received as royalty for naval | port also stated that “the Navy should secure containers for the storing of such fuel oil, as well as the oil itself, the general suggestion being along the line that the with whom such exchange should be effected should con- | struct such storage tanks at points des- | ignated by the Navy at a cost in oil to be agreed upon by the naval officials, such tanks to be turned over full of naval oil at such points for the use of | the Navy." Steps Traced by Report. ‘The report traced the steps taken in negotiating a contract with Sinclair for development of the Teapot Dome re- | serve and with the Doheny-controlled | Hills | ‘While Doheny aiready had been given | & contract for storage of the Elk Hills | oil, it was not until December of 1932 | that he was given the lease on the Cal- | ifornia reserves. As & result of the preliminary inquiry committee, the Sen- | te January 16, 1923, formally ordered | & complete inv tion of the leases | to Sinclair and Doheny with special at- tention to all circumstances surround- the negotiations. | committee did not begin its in- quiry until the following October. There | was little fireworks at the outset, but | | things began to sputter toward the turn | of the year. | ‘Then, on January 24, 1924, came the | big_expiosion. | It was in the form of a frank ad- | | Secretary {Tistle biack satchel. | | constituted a substitute for the story of | | Fall that he had received $100,000 from | | Edward B. McLean, [ | Exactly one week later the Senate | passed a resolution authorizing the ap- 2 | pointment of special counsel to proceed to annul the leases to Doheny and Sin- | clair and to take such criminal action | as the situation seemed to warrant. | ‘The House approved the resolution the SPECIALISTS IN HOME on our as long Every Branch‘ of IMPROVEMENT EASY PAYMENT next day, and on February 2, 1924, former Senator Atlee Pomerene and Owen J. Roberts were named as special tors under the authority granted | the resolution. I ‘The next two weeks saw the Senate and the press in & turmofl of excite- ment, wit sides for the resignation of all Govern- | ment officials connected with the leases, particular mention being made of Sec- retary of the Navy Denby. The latter | resigned on February 18, 1924. First Civil Action. ‘The first civil action taken by the special ofl counsel was a suit to annul the Teapot Dome lease, entered March 13, 1924, in the United States Court at Cheyenne, Wyo. Four days later & similar annuiment action was instituted in the Elk Hills case at Los Angeles, Calif. ‘The Senate committee continued its attempts to unravel the mysteries of the lease negotiations, and the lid was blown off the Teapot toward the end of March when Sinclair fiatly refused demands being made on all | piy to answer further questions by the com- mittee. The questions the ofl man on were: 1. The nature of & contract between bimself and & Mr. Bonflls concerning Dome. 3. The facts con Real Estate Salesmen Wanted We can make an attractive offer to the right men. Com- plete co-operation. Give full mnformation as to experience and past record. All replies confidential. Address Box 73-E, Star Office HOME IMPROVEMENT Painting Pn;:n; C.rp:lorin. Con:e—ting 3 .W—irTng Roofing G:;n . Cellar Excavating “Best-Bilt” Metal GARAGES Also Frame, Cor te Block and Stucco Garages. ‘erms in proportion to the cost, PAINTING AND PAPERING NO CASH NEEDED 3 Years to Pay an agreement between himself and Sec- retary Fall and & Mr, Shaffer, under which Shaffer was to receive a lease upon a certain portion of Teapot Dome. | 3. Where snd 'l;:n hal:ld mdet Secre- tary Fall during November and Decem- sol 1923. 4. Whether he or any of companies had made any loans or gifts to Secretary Fall. Sinclair was indicted for contempt of the Senate in refusing to answer these 1930—PAR'T ONE. questiosn, was convicted in the District Supreme Court, appealed to States Supreme Court, lost the appeal and served a sentence of three months in the District Jall. (This term later | was made to run concurrently with a six-month sentence meted out for con- tempt of court in the notable jury shadowing case, to be referred to here- after.) | The ofl scandals approached the eriminal phase on April 25, 1924, when a special oil grand jury was convened to investigate possible criminal aspects of the rapidly unfolding revelations. After less than & month of hearings. during which rumors flew thick and fast about the court house, the grand jury on April 25, 1924, reported crim- inal indictments charging Fall and Sinelair with conspiracy to defraud the Government, Fall and Doheny with con- spiracy, and Fall, Doheny and the lat- ter's son, Edward L., jr, with bribery, growing out of Doheny's disclosure about the “little black bag.” Qu of Indietments, | ‘The indictments hung fire in the | courts for & year and on April 3, 1925, were quashed as illegal. The grand jury promptly reopened | the hearings and all four were re- | indicted on May 27, 1925, | Tn the meantime things were begin- | ning to happen In the civil courts at | Cheyenne and Los Angeles. Two days after the reindictment of Fall. Sinclair and the Dohenys the Los Angeles court volded the Doheny lease on Elk Hills and about two weeks later Federal Judge Kennedy of Cheyenne Court dealt the Government its first setback by de- ciding that the Sinclair lease on Teapot Dome was valid. Doheny appealed from the decision of the Los Angeles court and the United States appealed from the Cheyenne verdict. Doheny lost his appeal in the United States Circuit Court of Appeals in San Francisco and the case was car- ried to the United States Supreme Court on a writ of certiorari. The highest court on February 28, 1927, ordered the FElk Hills reserves returned to the Gov- ernment on the ground that the lease to Doheny was invalid because it had ?leen obtained “by fraud and corrup- on.” The Government's appeal from the unfavorable decision at Cheyenne was to the United States Circuit Court of Appeals in St. Louis, which reversed Judge Kennedy's decision and declared the Teapot Dome lease illegal September 29, 1926. Sinclair appealed | to the United States Supreme Court | and lost, the high court holding that | the Teapot lease was invalid because of | “collusion and eonl:lruy." ‘With their re tment by the spe- cial grand jury, Fall, Sinclair and the | Dohenys began a sensational battle in | the courts. The valdity of the new | indictments was attacked bitterly on various grounds, and the fight finally | was carried to the United States Si preme Court, which held the indict- | | ments legal, | Three Sets of Trials. ‘The stage thus was set for three sels | | of trials in the criminal courts of the | District of Columbia. Fall and Sinclair | | were to be tried on the charge of con- | spiring to defraud the government in | the Elk Hill case, and Fall and the two | was carrled o the .United States Su-| spiring to defraud the Government in | the Teapot Dome case, Fall and ‘were to be tried for conspiracy to de- fraud the Government in the Elk Hills case, and Fall and the two Dohenys ‘were to be tried on charges of bribery the United | to Fall. in connection with the $100,000 “loan” The first of the criminal trials was that of Fall and Doheny on the of 1t the conspiracy. in Supreme Court November 22, 1926, afid closed December 16, 1926, A with a decision vindicating the de- fendants. It was the shortest and the | | ln#u mcm':lulnr of the oil trials. second trial was that of Fall and Sinclair on the Teapot Dome conspir- acy charges. Its career was hectic from the outset. First of all Henry M. Blackmer, re- garded by the Governmetn as an im- portant witness, refused to appear. He ‘was cited for contempt of court. Efforts to locate him failed. He continued to absent himself and last September he was convicted of contempt in the Dis- trict Supreme Court and fined $60,000. Blackmer’s appeal is pending before the | ¢ District Court of Appeals. Just two weeks after the Fall-Sinclair conspiracy trial started it came to an abrupt halt when charges were made that the jury was being “shadowed” by agents of Sinclair. The grand jury made an immediate investigation and indicted Sinclair, Willam Mason Day, Sinclair business associate; Sheldon Clark, an- other Sinclair official; . Willilam J. Burns, detective agency head; W. Sher- man Burns, his son and agency execu- tive, and Charles L. Vietsch, Burns’ agency employe. All were ch: with contempt of court by reason of the |, jury-shadowing activities. Clark and Vietsch were freed of the charges in court, but Sinclair, Day and Burns and his son were convicted in the District Supreme Court. Sinclair was sentenced to six months, Day to four months, the elder Burns to 15 days and Sherman Burns to a fine of $1,000. The defendants appealed to the United States Supreme Court, and all the sentences were affirmed, with the exception of that of William J. Burns, | o' whom the court held blameless. Two Serve Sentences. Sinclair and Day served their sen- tences in the ' District jail last year, with the spotlight of publicity always upon them. The conspiracy trial of Sinclair and Fall was resumed, Sinclair being tried first. He was acquitted, and the charge of mn.rlncy against Fall automatic- ally coliapsed, necessitating no further trial in this phase of the prosecutions. That left one more criminal proceed. i —hthe bribery trial of Fall and the enys. LASR ) trial on the indictment, however, The Government nolle prossed the bribery charge to use him as a witness in the preme convicted by a jury October sentenced to spend a year in pay & fine of $100,000. Fall appeal and on March 4 of this District Court of Appeals 30-day extension for of in the appesl. This period will expire soon. ‘The Doheny bribery trial was the last of the criminal actions resulting from . The Government ht suit against the Sinclair Oil Purchasing Co. W from the insolvent Oil Co. The Attorney General has sued the Pan- American Co. in an effort to mfi three leases cove: one-and-g-} sections in the Elk Hill reserves. Both of these suits are awaiting action in the Federal courts. ‘When these two civil suits are eom- cluded and the aj ery case is complel he ofl cases will have run their course. Steamer Grounds on Island. snl‘bl:nI;ONA.. March 22 () .—Lloyds ipp! ency _reported that the German steamer Oceana, 4,982 tons, had ashore on the Island of ‘Tenedos, coast of Asis Minor near the mouth of the Dardanelles. A tug, Delos, has gone to her assistance. ‘Young Doheny never went to Scotland is warring on bookmakers. New Building Materials Quality at Lowest Prices—Always! 1 3 BRANCHEs: 6th & C S.W.—5th & Fla. N.E.—5921 Ga. Av. To Those Who Would Make Their Homes More Interesting T Is the business of W. & J. Sloane to_provide Furniture, Oriental and Domestic Rugs, Carpets and Draperies and to make proper selection of these a simple and pleasant process. In addition, it is very definitely the business of this organization to study with the owner, various problems in the furnishing of his home, to advise him correctly and to exccute in the best manner the work necessary. The Decorating Staff of W. & J. Sloane is adequately equipped to do work of this kind. The Furnishings and Decorative Arrangements in many of the fine homes in Washington attest this fact. Will you not let them consult with you on any matter of Decoration that you may be considering? >N First Prize, $25 in Gold You must use these two lines: Second Price, $10 in Gold “7*°* ““};:V’.’d’l‘;luh;l:‘r’- Third Prize, $5 in Gold o ALSO, you must bring out the con: ence of Chas. Schwartz and Sons easy-payment plan of buying world-famous time- pieces at cash prices for $1 a2 week. In case of a tie, each tying contestant will receive the full award. Everypne sending in a ;en‘_v will receive SOMETHING. Address your answer as shown elow. Finest Materials _and _Workmanship. Job Fully Guaranteed gisce American Radiator Co. Hot - Water Heating Plant (for 6 Rooms) NO CASH NEEDED$ Ay m::.‘:'fu:fi:fl“ ¢ Month Fully Guaranteed "L:cuusnluwcrnuutx: 1205 Eye St. N.W. . & J. SLOANE 709-711-713 TWELFTH ST., N.W. Address—Care “Contest Manager” WASHINGTON, D.C. CHAS SCHWARTZ & SON Perfect Diamonds 708 7th Street N.W. 709 14th Street N.W. Nat. 8873