OIL LEASE SCANDAL.

New Zealand Herald, Volume LXIII, Issue 19508, 11 December 1926, Page 11

OIL LEASE SCANDAL.

ALLEGATIONS OF FRAUD. } STORY OF WAR PREPARATIONS. A. and N.Z. WASHINGTON, Dec 9. The trial was continued to-day of E. L. JJoheny, the oil magnate, and Albert B. Fall, ex-Secretary for the Interior,, on charges of fraud in connection with the Elk Hills naval oil reserve.

Doheny said he entered the oil contract lease negotiations to save the country being invaded like Belgium. Ho said:

' I became aroused over the prospect, as 1 still am, and promised to bid on the Pearl Harbour contract to furnish the fleet with oil. " Admiral Robiso.i told me it would double the efficiency of the fleet. He Baid the Pacific Coast was vulnerable without oil for the fleet, but that the fleet could stave off attack if it had adequate oil. "I" was not very keen about the Hawaiian tank project until I discussed it with Admiral Robison. Admiral Robison finally urged the necessity of the scheme from the standpoint of national defence. He said orders had been issued for mobilisation and he told me of war plans which required oil to enable our navy to prevent any foreign navy reaching our Pacific Coast. " Admiral Robison said our navy could easily be overcome without, oil. The admiral said President Harding had called the Arms Conference because of the crisis on the Pacific Coast."

Doheny denied that he had talked to Fall about a bid for the lease before he lent fiim £20,000.

An investigation was held three years ago by a committee of the United States Senate into the conditions under which oil lauds iu Wyoming and California, which had beeu set aside by Congress as a fuel oil reserve for thu United States Navy, had been transferred from the Navy Department to the Department of the Interior, and then by Mr. Fall, the former head of that department, to the Sinclair and Doheny oil interests, Uie Sinclair concerned being the millionaire owner of Zev, the famous racehorse. Evidence was given during the inquiry of substantial financial assistance having been given by both Doheny and Sinclair to tho Minister and others connected with him. The leases were eventually cancelled by a vote of the Serrate.