American Scandal - Teapot Dome | Corruption in the Harding Era | 5

Episode Date: August 6, 2024

The Teapot Dome scandal was only one instance of corruption during the presidency of Warren G. Harding. Against the backdrop of gangsters and Prohibition, shady dealings permeated the top levels of government – all the way up to the Attorney General of the United States. Nathan Masters, host of the PBS series, Lost LA, couldn’t believe what he found in the archives. Today, Nathan joins Lindsay to talk about his book Crooked: the Roaring ‘20s Tale of a Corrupt Attorney General, A Crusading Senator, and the Birth of the American Political Scandal. Need more American Scandal? With Wondery+, enjoy exclusive seasons, binge new seasons first, and listen completely ad-free. Start your free trial in the Wondery App, Apple Podcasts, Spotify or visit wondery.app.link/IM5aogASNNb now.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Hi, this is Lindsey Graham, host of American Scandal. Our back catalog has moved behind a paywall. Recent episodes remain free, but older ones will require a Wondery Plus subscription. With Wondery Plus, you get access to the full American Scandal archive, ad-free, plus early access to new seasons and more. Join Wondery Plus in the Wondery, I'm Lindsey Graham, and this is American Scandal. The presidency of Warren G. Harding took place against the backdrop of the Roaring Twenties. It was a time of flappers, gangsters, and prohibition. The federal government was supposed to be a beacon of stability and law,

but instead, Harding's presidency was anything but. His Interior Secretary, Albert Fall, made secret deals with oil magnates Edward Doheny and Harry Sinclair. He gave them lucrative leases to drill oil in Wyoming's Teapot Dome and two other locations in California. The scandal would tarnish public trust in government for decades to come. But Teapot Dome was just one instance of corruption happening during the Harding administration. The president's friends came to be known in the press

as the Ohio Gang, a group of men with loose ethics who rode Harding's coattails into office. And once in Washington, this good old boy network, which included Attorney General Harry Doherty, flouted the rules as they lined their pockets. Suspecting that Doherty was involved in shady dealings, the senators from Montana worked to hold him accountable. They used hearings and investigations to shine a light on the alleged corruption, and the Attorney General leveraged the FBI to retaliate. My guest today is Nathan Masters, host of the PBS series Lost L.A. and author of the book Crooked, the roaring 20s tale of a corrupt Attorney General, a crusading senator, and the birth of the American political scandal. Our conversation is next.

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Thanks so much for having me, Lindsay. So you have a book, Crooked, and it's primarily about Harry Doherty, the Attorney General of the United States in this time period from 1921 to 1924. He himself was eventually accused of all sorts of illegal dealings. There was a lot of corruption going on in this period in the 20s. I suppose that prompts the question, what do you think it was about this era and the presidency of Warren G. Harding that led to so many scandals? I suppose that prompts a question. What do you think it was about this era and the presidency of Warren G. Harding that led to so many scandals? Maybe you could list a few of the other ones we

didn't cover in the series about Teapot Dome. Yeah, so there were other scandals aside from Teapot Dome, which is, of course, the one that we all remember. It had great branding. It's such a memorable name. But there was also a huge scandal in the Veterans Bureau, which was responsible for taking care of all the American service members who had returned from World War I. It was a particularly painful scandal because the American government really owed a duty to these veterans, and yet it was defrauding them. There was also a huge festering scandal through much of the Harding administration in the Justice Department, which again is the focus of my book. But to answer your question about why scandal was so pervasive during the Harding administration, you have to look at what happened before. In 1920, when Harding

was elected, the U.S. had gone through a world war where total mobilization was required. The entire country was organized around the war effort. After the war, there was terrible labor strife between striking workers and capital. Violence broke out. After Harding was elected in 1920, the American public more or less wanted to turn away from national politics, turn away from national affairs. And there was an opportunity there for people of corrupt intent to get away with quite a few shenanigans. What was it about Doherty in particular that piqued your interest enough to write a book? Well, graft has always been an unfortunate aspect of American politics. But we usually take it for granted that the most sober parts of the federal government, and I'm thinking here the FBI, the Justice Department, will eventually expose and punish the culprits.

But what if the man who's charged with upholding the rule of law and punishing those culprits, the Attorney General of the United States, he's the one who ultimately decides whether to investigate, whether to prosecute. What if he himself is corrupt? whether to investigate, whether to prosecute. What if he himself is corrupt? And when I came across the story of Harry Doherty, who was corrupt, who was using the Justice Department to enrich himself and to punish his political enemies, there's very little in our system to restrain a rogue attorney general. So the idea just fascinated me. And then, of course, President Harding himself, we learned in our series that he was a boozer, a gambler, a womanizer who brought all of these talents to the presidency when he became a politician. But he was kind of a reluctant leader.

How did he get into office? Well, it all goes back to Harry Doherty. Doherty wanted to run for political office himself. I mean, he got elected to the state legislature and then was accused of corruption pretty quickly. Although it turns out that he was innocent of corruption pretty quickly, although it turns out that he was innocent of those charges. But he never really made it as a politician. He had a lot of natural talents that would lend themselves to politics. He was conniving, calculating, but you know what? He wasn't charming. He wasn't an orator. He wasn't a back-slapper, a baby-kisser.

And he soon realized that his friend, Warren G. Harding, a natural politician, would be a much more effective avatar for his political ambitions. As Doherty said, he looked like a president. So he groomed Harding for higher office. I have a quote here that Doherty was recalling when he found Warren Harding early on in his career. He said, I found him sunning himself like a turtle on a log and pushed him off into the water. So he took credit for Harding really getting into elective politics. And as Harding climbed the political ladder, first he was elected Lieutenant Governor of Ohio, then U.S. Senator, and finally he was chosen as the Republican Party's 1920 presidential nominee, Dougherty acted as his fixer. He quashed emergent scandals, he cleaned up his escapades, hid his mistresses and love child, and he really engineered Warren

Harding's, what was at the time, an unlikely rise to the presidency. Now, Harding was a newspaper man by trade. Do you think any of the talents he applied to journalism helped him in politics? from the small town where he grew up in Ohio. He liked to describe his style of speaking as bloviating, which was making good sounding noises without saying much of substance, but it really resonated with the people he was speaking to. I mean, he would just, he would basically issue a long string of platitudes and the people would eat it up. He'd get rounds of applause and that really helped his success as a politician. In describing these two men, it occurs to me that Doherty and Harding were likely very different people. So what was their relationship like? How did they get along together?

Yeah, certainly very different people. But they clicked on a personal level. They were both into late-night poker games, boozy parties. But beyond that, they trusted each other implicitly. Harding had been Doherty's political protege for several decades by the time he got elected president. And most importantly, after working for two decades to get Harding in the White House, Doherty was intensely loyal to the president. He would do anything to protect him. Now, Doherty fit pretty well into the so-called Ohio Gang, and we probably ought to mention who these people are and what the gang was. Yeah. So, Ohio Gang was actually a term invented by another character in my book, Senator Burton Wheeler, and it implies an

organized conspiracy. But in reality, the Ohio gang was more a loose confederation of influence peddlers, political fixers, hangers-on, anyone who wanted to exploit President Harding's sense of personal loyalty, as well as his detached leadership style. And I should mention that the term Ohio gang was originally Ohio crowd. Senator Wheeler, when he started investigating Harry Doherty and campaigning against Doherty, he sharpened that into Ohio Gang, which does have a much more sinister sound to it. And that's the name that stuck. One person who's not a member of the Ohio Gang, but certainly a premier character in our season on Teapot Dome is New Mexico Senator Albert Fall. He was not Harding's original pick

for the Secretary of the Interior position, but received it. Do you think he knew at all what he was getting himself into when he agreed to join the cabinet? Yeah, I suspect he did. And I should mention that Harding's cabinet, it was a mixed bag.

There were some highly respected figures in Harding's cabinet. There was Herbert Hoover, the Secretary of Commerce, who would later go on to become president. And we don't remember Hoover very well, but at the time he was a famous political figure for helping to relieve famine in Europe. There was Charles Evans Hughes, a former Supreme Court justice who was named Secretary of State. Andrew Mellon, one of America's top financiers, who was put in charge of the Treasury Department. But there were other characters who were not as esteemed, and Albert Fall definitely falls into that group. In terms of whether he knew what he was getting into when he joined the cabinet, one fact to me really speaks volumes.

Teapot Dome and Elk Hills, they were transferred to Fall's department in May 1921. That's less than three months after the Harding administration took office. So that tells me that Fall wasn't really seduced by this culture of corruption in Washington, but he was eager to participate in it. Yeah, I'm glad you mentioned the speed at which he worked, because it does indicate that he knew what he was there for and got it accomplished quickly. He also wanted to keep these deals secret, but it didn't work out that way. I guess describe how things started to unravel for Albert Fall. Well, I think the first people who noticed anything amiss were other oilmen, other people involved in the oil industry.

They, of course, knew the value of these two naval oil reserves, and they began to ask questions. And then, I don't know exactly what happened, but I suspect that they tipped off some members in the press. And some newspapers started to investigate. We're talking about like the Denver Post and the Wall Street Journal. And it was the Denver Post reporter, D.F. Stackelbeck, who found plenty of solid leads, had a story, but his editors at the Denver Post, I guess they made a shady deal of their own. What happened? Yeah, this is a scandal in its own right.

Allegedly, the paper's publisher accepted something like a million dollars in total for killing Stackelbeck's story. And the source of those funds were Harry Sinclair, who disguised what was effectively a blackmail payment as oil deals, a series of oil deals. And so under the publisher's orders, the editor shut down Stocklebeck's story. It's certainly not a high point in American journalism. And also another one of the inevitable echoes of today's headlines, a catch and kill scheme. Absolutely. So then how did newly elected Montana Senator Burton K. Wheeler become familiar with this teapot dome thing, as he called it, if it wasn't widely reported?

So he was on his way to Washington, D.C. to assume office as senator when an oil lobbyist, a man named Tom Arthur, pulled him aside and told Wheeler that he suspected that there was something crooked in this Teapot Dome oil lease. And Teapot Dome had been reported. It was a public matter that Harding had transferred the oil reserves from the Naval Department to Falls Interior Department by executive order. And it later was reported that these deals were made in secret with the oil men. But there wasn't much indication yet that there was anything corrupt. Well, Arthur thought that there was something corrupt about it. And that really perked up Wheeler's ears. Because Tom Arthur was a man who had committed his entire life to pumping as much oil out of the ground as he could. And if Arthur thought there was something bad about an oil deal, then it was worth looking into. And if Arthur thought there was something bad about an oil deal, then it was worth looking into. So Wheeler, he was a newly elected senator.

So he went to his friend and the senior senator from Montana, Tom Walsh. On January 5th, 2024, an Alaska Airlines door plug tore away mid-flight, leaving a gaping hole in the side of a plane that carried 171 passengers. This heart-stopping incident was just the latest in a string of crises surrounding the aviation manufacturing giant Boeing. In the past decade, Boeing has been involved in a series of damning scandals and deadly crashes that have chipped away at its once sterling reputation. At the center of it all, the 737 MAX.

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Oh, totally the perfect man. Well, if one word sums him up, I'd say it would be austere. He didn't drink or smoke. His eyes held a cold gaze. He had a handlebar mustache straight out of the 19th century. So he looked like a pretty serious fellow. He was once described as an Irishman without a sense of humor, a lawyer who will not appeal to the emotions of a jury, a senator who cannot sob or scintillate. Wheeler didn't think much of him as a politician, but he respected him completely as a lawyer.

Walsh was absolutely incorruptible. He had a strong sense of justice. He was meticulous with the facts. And he had, most importantly, a dogged work ethic. And he served on more committees in the Senate than any other senator. And he was willing to do the work of an entire committee if it came down to it, if it was important to do the work of an entire committee if it came down to it, if it was important enough. And Wheeler was also a longtime ally, somebody who had

championed his initial bid for the U.S. Senate. So when Wheeler came to him with this tip from Tom Arthur, Walsh listened. But even though he was an austere man, Senator Tom Walsh still had a good relationship with some of the key players, Interior Secretary Albert Fall. He was friends with oil man Edward Doheny. Yet he moved forward with the investigation held by the Senate Committee on Public Lands and Surveys. How did this investigation go? So initially, Walsh didn't get very far. I mean, he heard from two geologists who were hired by the committee to study the transactions, and they confirmed the official cover story, which was that the oil reserves were being sucked dry by wells on neighboring lands.

That was the official rationale for transferring these oil reserves to private companies. The thought was, let's drain them now and collect the revenue before these other oil operators do. And then Albert Fall was called as a witness. And he testified that it was a good business deal for the government, that we needed to make these deals with the private oil companies before their value diminished. And in terms of why the deals were done in secret and without public bidding, he invoked national security. He said that it was not his business to advertise America's possible military readiness, especially when war with Japan, say, was being considered. Harry Sinclair and Edward L. Duhini, they also testified to the same effect. They backed up Fall's story. So at first,

Walsh wasn't getting anywhere. So as you described, the initial hearing into Teapot Dome doesn't really expose anything damning, but slowly a head of steam begins to build and things begin to change. One person in particular that helped Tom Walsh with his investigation was the very same Denver Post reporter, D.F. Stackelbeck, who was stymied by his editors. He didn't get to publish his story, but he reached out to Senator Walsh, and what did he have to say? under subpoena. He was issued a subpoena and he did travel to Washington and held a private conference with Senator Walsh. And there he basically unfolded the entire story that he had discovered as an investigative reporter for the Post. Crucial to the story was the fact that Albert Fall, upon taking office as Interior Secretary, was in dire financial straits,

right? He was in arrears with the local tax authorities. The road leading to his farm was rutted. The fences were falling down. And within several months of these deals with Sinclair and Doheny being consummated, he suddenly was able to pay off his back taxes. He was able to build a new road, new fences, even a private power plant on his ranch. And so that was all quite suspicious. That was work that Dieter Stackelbeck had uncovered as an investigative reporter. And for Walsh, that was important. He was able to piggyback off an investigative reporter's work because at the time, you know, today we take it for granted that Senate committees have small army of lawyers and investigators who can go out and uncover the facts. But at the time, each Senate committee

had maybe one clerk. Maybe they were able to hire a staff lawyer, but it usually fell to the senators themselves to do the investigative work. So Walsh really needed to rely on the help of people like Stackelbeck. And to be clear about it, you mentioned that Stackelbeck was terrified of working with the government and initially hoping for a subpoena because I guess that would relieve him of the requirement that his employer may have put on him to kill the story. Exactly. If you were compelled by the United States Senate to testify under oath, then what does the publisher of the Denver Post have to say about it? So when you were researching your book, I understand that you found a bunch of communications between Stackelbeck and Senator Tom Walsh, and obviously tips and leads that led to a

further and consequential investigation. But what in return might have Senator Walsh done to show his gratitude to Stackelbeck? Yeah, this was one of my favorite archival discoveries. It was at the Library of Congress. I was at the Library of Congress. I was looking through the Walsh papers. And it was interesting to see through all of these telegrams that have been preserved for now 100 years to see Walsh's investigation unfold and to see him learn these facts almost in real time. But particularly touching letter came after Stackelbeck had traveled to Washington and spilled the beans. So Stackelbeck was a naturalized U.S. citizen from Germany, and there was a lot of xenophobic hysteria during

World War I. And foreign nationals and naturalized citizens were subject to a lot of disgusting attacks. Stackelbeck, as a reporter, wrote articles favoring the candidacy of a Democratic candidate for governor in Colorado. And he attacked the incumbent. And the opposition got really upset. They tried to silence him by calling his loyalty into question. Because, again, he was a U.S. citizen, but he had a German name. His name was Dieter Stackelbeck, and he spoke with a German accent. And they tried to have him detained as an enemy alien.

and he spoke with a German accent. And they tried to have him detained as an enemy alien. Now, the U.S. District Attorney at the time knew Stackelbeck and he refused to arrest him. So, Stackelbeck was sensitive about when his loyalty was called into question. And he was still wrestling with these emotions when Walsh took to the Senate floor and publicly thanked Stackelbeck's efforts at exposing the Teapot Dome scandal. He said he had done a great service to his country. And I thought that was just a touching piece of correspondence. I have a quote here. Stackelbeck is writing to Walsh. All these years, I've never been able to forget these nasty attacks. I now feel that the kind words which you spoke about me, I refer to your remark that I had

rendered the country a service, in a way set me right with the people here in Colorado. No naturalized citizen takes his citizenship more seriously than I do. I deem it a privilege to have done what little I did to throw light on the leasing of the Teapot Dome. And when I came across this at the Library of Congress, it reminded me that public integrity, it often depends on the private courage of just a few individuals, you know, people who are willing to blow the whistle

when they notice something wrong. And I suppose at this point in our tale here, as the scandal unfolds, we can return to the main character or one of the main characters of your book, Attorney General Dory. He was the top law enforcement officer in the United States at the time. What did he do about Teapot Dome? Absolutely nothing. It would have been his responsibility, especially after Senator Walsh, through his committee's investigation, exposed credible evidence of wrongdoing, credible evidence of criminal acts. And yet under Doherty, the Justice Department didn't do anything. The Bureau of Investigation, which we know today as the FBI, didn't even open a case

file on the matter, even as all these shocking allegations and evidence to support them were being made public. Now, was this in any way because Doherty was involved in the Teapot Dome deals? Actually, no. No, his refusal to get involved had more to do with his loyalty to President Harding. Again, Doherty considered Harding almost his political pet. I mean, he'd invested his entire political career into getting Harding elected president. The scandal was already breaking, but he knew if that it was substantiated by a criminal investigation, it would hurt Harding dearly. So he just refused to investigate. But this in itself, the refusal to investigate,

led to an investigation because the Senate found it a little strange that the Attorney General of the United States would do nothing, right? And they initiated their own investigation into the Department of Justice's inaction. And around this same time, Attorney General Dougherty vanished. Where did he go? Yeah, he was on a train to Chicago, Illinois, where there was a grand jury looking into the irregularities in the Veterans Bureau. It turns out there was, this is completely separate from what was going on in the Justice Department, completely separate from Teapot Dome. There was a staggering amount of graft happening, something like $225 million in fraudulent contracts, where people were enriching themselves by overcharging for

basic items that the Veterans Bureau had declared to be surplus. As the grand jury was looking into this, they came across irregularities in the Justice Department and then called Attorney General Harry Doherty as a witness, essentially assuming that Doherty might have something, might be able to shed some light on the actions of his subordinates. Now, little did the grand jury know at the time that Doherty was complicit himself in a lot of these irregularities. But just the fact that a sitting attorney general was subpoenaed by a federal grand jury, it's astounding, right? And it says a lot about what Doherty was up to at the time. I'm Jake Warren, and in our first season of Finding,

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As the Senate investigation continued, what kind of things were Doherty and a friend of his accused of doing? Yeah, basically, Doherty and he had a close friend named Jess Smith. They were accused of raiding the Justice Department's cupboards for favors to dispense in return for bribes. And the Attorney general's powers, of course, are staggering, right? He's the ultimate decision maker as to whether or not to investigate, whether or not to prosecute. Now, early on, they were dealing with liquor

withdrawal permits. It was, of course, prohibition was happening. The sale distribution manufacturer of liquor was outlawed, but the ownership of it wasn't, right? Prohibition didn't abolish liquor was outlawed, but the ownership of it wasn't, right? Prohibition didn't abolish property rights. So whiskey could be stored, or liquor for that matter, could be stored in government-bonded warehouses, and it could be withdrawn for specific legally permissible uses. One of them, kind of a ridiculous concept, medicinal whiskey. There were lots of doctors at the time who specialized in prescribing whiskey for whatever ill their patients. And of course, it was a complete joke, but a lot of liquor actually flowed based on those fraudulent prescriptions.

But of course, bootleggers like George Remus, who was called the king of bootleggers, he moved more liquor at one point than anybody else in the country, needed to get that liquor out. And they needed help in getting these prescriptions. So Harry Doherty and Jess Smith got involved. They helped facilitate this, but then they quickly got scared. They realized that they

were interfering in another cabinet officer's affairs. Prohibition was the purview of the Treasury Department under Treasury Secretary Andrew Mellon. They didn't want to play around at another cabinet secretary's sandbox. Instead, they moved on to matters directly under the Attorney General's control. And there, they accepted bribes, sometimes disguised as campaign contributions, in return for pardons or pardon consideration, at least, and also quashed investigations into companies that were under antitrust investigation and in return received blank stock certificates. Much of this was never proven in the court of law. It was based on testimony to Wheeler's committee. They also,

I should mention that they used the Bureau of Investigation. It was the forerunner of the FBI as a weapon against political opponents. Agents would break into congressmen's offices, rifle through senators' desks just because they had dared to criticize President Harding or Attorney General Doherty on the floor of the Senate. And they were all searching for compromising information that would give Doherty the upper hand. Well, it's interesting that you mentioned these political operative spies even, really, because during Senator Wheeler's committee investigation into the attorney general, he subpoenaed a woman named Roxy Stinson. She was the ex-wife of the attorney general's close friend, Jess Smith. And Senator Wheeler served

the subpoena to Roxy personally because he wanted to keep it secret. Exactly. Now, she turned out to be his star witness, really broke the case, if not on factual grounds, then on a matter of public opinion. But right, Washington was teaming with spies and operatives, some of them working for the Bureau of Investigation, others working for the Republican National Committee or other people who would have an interest in keeping the lid on this emerging scandal. So Wheeler took an overnight train to Columbus, Ohio, where Roxy Stinson was living at the time and personally knocked on the door, personally served the subpoena to Columbus, Ohio, where Roxy Stinson was living at the time and personally knocked on the door, personally served the subpoena to her, and then escorted her back and had her testify

the very next day. And I understand that that was an eventful trip home. It sure was. They had a layover in Pittsburgh, Pennsylvania. And at first, Roxy Stinson was reluctant to talk, right? She actually adored her late ex-husband and didn't really want to say anything that would reflect poorly on him. She kind of clammed up on the train. And then when they got to Pittsburgh, Harry Doherty had one of his travel companions go get a jug of bootleg liquor. They bought some ginger ale at dinner, and he sneakily topped off the glasses of ginger ale with his bootleg liquor. And that got her talking. Eventually, she spilled all the beans. We've been mentioning Jess Smith as a character a fair bit here, and without

revealing the central mystery in your book, who was he and what happened to him? So, Jess Smith was described as Harry Doherty's most intimate friend. Came from the same small town in Ohio, Washington Courthouse, as Doherty. They were close as young men, even though they were separated by maybe 10 years or so in age. When Harry Doherty was named Attorney General, Jess Smith decided to give up his entire life and move to Washington with him and become his, what was described at the time as Man Friday. entire life and moved to Washington with him and become his, what was described at the time as Man Friday. He would open doors, he'd carry bags, but he'd also act as his go-between when Harry Doherty couldn't be in a particular room or couldn't talk to a particular person. They actually lived together and there were rumors that they might have had a love affair. They were extremely

close and loyal to each other and Harry Doherty trusted Jess Smith implicitly. extremely close and loyal to each other. And Harry Doherty trusted Jess Smith implicitly. You mentioned he was Roxy's late husband. Had Jess Smith died? Yes. Yes. So that's actually how my book starts. Jess Smith is found dead in a hotel room early on Memorial Day, 1923, of suspicious circumstances. He has a gunshot, wound to the head, but his head had fallen onto a metal waste basket atop the ashes of burned papers. It was already known that he had moved in these circles. He knew a lot. There were people out there who might've wanted him dead. And so there were instantly suspicions of foul play. Yeah. Suspicious indeed. And then his ex-wife

Roxy arrives in DC and testifies in front of the Senate committee. You say that she became the star witness. What did she say? all of the newspaper reporters who were there who would, of course, immediately after the hearing was adjourned, they would run out and write up glowing pieces about her testimony. And there were front page screaming headlines. But yeah, she gave a lot of substance in her testimony. I mean, she testified for a total of five days over the course of a couple weeks. She basically told Wheeler that Jess Smith and Harry Doherty had been involved in a criminal conspiracy to raid the Justice Department and use the powers of the Justice Department for their own end and against their political enemies. She described Jess Smith taking rolls of $1,000 bills out of his money belt after getting off a

train from Washington. She recalled Jess Smith giving her blank stock certificates from companies like White Motor or Pure Oil. And these were companies who had been under antitrust investigation, but those investigations quickly dried up. wasn't acting on his own, that there was a real criminal conspiracy there that involved the Attorney General of the United States. Doherty was a smart political operator. He knew he could never be seen in the same room as a man like George Remus, the bootleg king. But Jess Smith could, right? It gave Doherty plausible deniability. So Jess Smith had been involved in all these deals. He knew all the details and he was proud of it. He would brag about what he and Harry were up to in DC. And Roxy Stinson had just an amazing memory and was willing to share all that with the committee. So I'm beginning to see why you found this topic good enough for a book. How did all this play out in the press at the time? Yeah, it was a national sensation for several

weeks. This was on the front page of every American newspaper. It was what Americans were talking about every day. You might say today there were water cooler conversations about it. I have one headline here. For the first time, really, in the history of the Justice Department, which was established in 1870, it shocked the American people into wondering whether the Department of Justice was living up to its name. Eventually, the scandal just became so huge that President Coolidge, who had taken over for Harding after he died in 1923, he was forced to ask for Doherty's resignation. So the investigation is ongoing. Accusations are made by both sides. Is there anything that was proven in this investigation or in a court of law? Yeah, much of what Roxy Stinson alleged wasn't, right? This was all hearsay evidence, which was permissible in a Senate investigation, but wouldn't have been admissible in a court of

law. But there was one case that was proven beyond a reasonable doubt in a court of law. And it's a little convoluted, so stay with me. But there was an office in the federal government called the Office of the Alien Property Custodian. And this office was responsible for managing assets that were seized from enemy nationals during World War I. What happened was during Harry Doherty's tenure as attorney general, a German industrialist tried to make a claim saying that the U.S. had seized 33,360 shares of the American metal company, which represented a 49% stake in the firm. And he claimed fraudulently that that stake had been transferred on the eve of America's entry into World War I to a Swiss company. And he wanted to

be reimbursed by the US government to the tune of nearly $7 million, which, of course, is quite a sum to pay, but was a lot more back then. With no real evidence to support his claims, the alien property custodian and then a functionary of Doherty's in the Justice Department authorized that repayment. And it later emerged that as part of this repayment, part of the $7 million, which was issued in U.S. Treasury bonds, $500,000 of that went to someone or some group of people as a fee for greasing the wheels. or some group of people as a fee for greasing the wheels. After taking over for Doherty, Attorney General Harlan Fisk Stone, who was an upstanding law professor from Columbia University, he personally launched an investigation into his predecessor's role in this American metal case. He went through the evidence himself.

He followed the money trail. And they eventually found that $224,000, basically half of that fee, went to accounts belonging to Harry Doherty and Jess Smith. So then I suppose we can assume that former Attorney General Doherty was convicted of his crimes and went to jail. If only. His co-conspirator was. So this was proven in a court of law. Thomas Miller, the alien property custodian, was convicted. But in the same trial, the jury couldn't reach a verdict on Doherty.

It was a hung jury, ended in a mistrial. So Doherty never spent a single night in jail. So in the end, what is your assessment of Harding's presidency, knowing what you learned from writing your book? What's the takeaway from all this? Well, to your first question, Harding's presidency was a catastrophic failure, right? It's rightly ranked by presidential historians as being among the worst. Now, there have been some recent revisionist histories. These recent revisionist histories note that Harding wasn't personally complicit. That's true. In fact, the Justice Department later, to its credit, did investigate President Harding's finances and couldn't find any evidence that he benefited from all the corruption that was happening under his watch. And these revisionist historians can also justly point to a few policy achievements, right? Like Harding helped formalize the federal budget process and he hosted a major international disarmament conference that resulted in the first arms reduction treaty. That's a big deal. But those achievements, even if they're real, will always be overshadowed by all the scandals that Harding allowed to fester within his

administration. And if you ask about my takeaway, I mean, there's so many. One is that by exposing Doherty, Senator Wheeler shocked the American people into caring whether the Department of Justice was living up to its name. They'd never really questioned that before. And we're more vigilant today about what the Justice Department or the Attorney General or the FBI is up to because of Wheeler's investigation and subsequent scandals, of course. And subsequent scandals, of course. But this is a show about American scandal. So maybe I'll add that Wheeler essentially wrote the playbook for the use of scandal in modern congressional investigations. Of course, he had the help of a free press that was hungry for sensational news. And thanks to the advent of things like tabloids, news syndicates, radio, for the first time in the nation's history, tabloids, news syndicates, radio. For the first time in the nation's history, all of America could follow along as a scandal in real time, as a scandal unfolded in a congressional hearing room.

Now, not everybody would use Wheeler's playbook for such noble purposes. I mean, Senator Joseph McCarthy comes to mind, right? He would use the same tactics as Wheeler, but for nefarious ends. But Wheeler realized that no matter what we teach in our civics class or our law schools, powerful people actually can sometimes be above the rule of law, above the reach of the law. So his particular genius in this investigation was seeking justice not in a court of law, but by appealing to the court of public opinion. And he got Doherty removed as attorney general. And he changed the way Americans thought about the Justice Department and whether the federal government was upholding the rule of law.

And so in that way, he succeeded. Well, Nathan Masters, thank you so much for talking with us today on American Scandal. Oh, thanks so much for having me, Lindsay. It's been a pleasure. That was my conversation with Nathan Masters, host of the PBS series Lost L.A. To learn more about the Teapot Dome scandal and the Harry Doherty story,

we recommend Masters' book, Crooked, the roaring 20s tale of a corrupt attorney general, a crusading senator, and the birth of the American political scandal. From Wondery, this is episode five of Teapot Dome for American Scandal. In our next series, by the 1990s, Boeing was one of the most respected companies in the country. It made planes that people were proud to work on and passengers felt safe to fly in. But as executives started to prioritize the bottom line over safety, they'd set their company up for a tragic downfall.

If you're enjoying American Scandal, you can unlock exclusive seasons on Wondery+. Binge new seasons first and listen completely ad-free when you join Wondery Plus in the Wondery app, Apple Podcasts, or Spotify. And before you go, tell us about yourself by filling out a survey at wondery.com slash survey. American Scandal is hosted, edited, and executive produced by me, Lindsey Graham for Airship. This episode was produced by Pauly Stryker. Our senior interview producer is Peter Arcuni. Sound design by Gabriel Gould. Music by Lindsey Graham. Produced by John Reed. Managing producer, Olivia Fonte.

Senior Producer, Andy Herman. Development by Stephanie Jens. Executive Producers are Jenny Lauer Beckman, Marsha Louis, and Erin O'Flaherty for Wondery.