Single-bid Contracts Followed By Kickbacks
Later in 1922, Fall leased the oil production rights at Teapot Dome to Harry F. Sinclair of Mammoth Oil, a subsidiary of Sinclair Oil. He also leased the Elk Hills reserve to Edward L. Doheny of Pan American Petroleum. Both leases were issued without competitive bidding. This manner of leasing was legal under the Mineral Leasing Act of 1920.
The lease terms were very favorable to the oil companies, which secretly made Fall a rich man. Fall had received a no-interest loan from Doheny of $100,000 (about $1.3 million today) in November 1921. He received other gifts from Doheny and Sinclair totaling about $404,000 (about $5.26 million today). It was this money changing hands that was illegal — not the leases. Fall attempted to keep his actions secret, but the sudden improvement in his standard of living prompted speculation.
Read more about this topic: Teapot Dome Scandal
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