Before Watergate, there was Teapot Dome — the greatest corruption scandal in American history, in which the Interior Secretary secretly sold off the Navy's oil reserves and went to prison for it.
In 1921, President Warren Harding quietly transferred control of the U.S. Navy's emergency oil reserves — held at Teapot Dome in Wyoming and Elk Hills in California — from the Navy Department to the Interior Department. His friend Albert Fall ran the Interior Department.
Fall immediately began leasing the reserves to private oil companies at below-market rates without competitive bidding. The deals enriched Harry Sinclair and Edward Doheny, two of the biggest oil men in America. Fall received approximately $404,000 in gifts and no-interest loans in return.
Fall's sudden wealth was the tell. Before the leases, he had been struggling financially. Shortly after, he renovated his New Mexico ranch, paid off debts, and bought adjacent land. A Senate investigation led by Montana Senator Thomas Walsh started piecing it together in 1923.
President Harding died suddenly in August 1923 before the full scandal emerged — of a heart attack, though rumors of suicide and even poisoning circulated for years. Vice President Calvin Coolidge inherited the presidency and the scandal that came with it.
The Supreme Court ruled the leases invalid in 1927 and ordered the reserves returned to the Navy. Fall was convicted of accepting bribes in 1929 — the first U.S. cabinet member ever imprisoned for crimes committed while in office. Bizarrely, Edward Doheny, the man convicted of paying the bribes, was acquitted.
Before Watergate, Teapot Dome was considered the gold standard of American political scandals. The investigation prompted Congress to strengthen its subpoena powers and sparked early campaign finance legislation. The rock formation in Wyoming that named it — which actually looks like a teapot — still stands.