NAVAL OIL SCANDAL.

New Zealand Herald, Volume LXIV, Issue 19765, 12 October 1927, Page 13

NAVAL OIL SCANDAL.

AMERICAN COURT JUDGMENT. INDICTMENT OF EX-MINISTER. A. and N.Z. WASHINGTON. Oct. 10.

The Supreme Court of the United States has annulled the lease of the Teapot Dome oilfields which Mr. A. B. Fall, then Secretary of the Interior, granted to Sinclair's mammoth oil company, and so started the scandal of 1923. The decision of the Court brings victory to the Government's long efforts to regain control of the rich naval oil reserves, as the Court had already annulled the Elk Hills lease, and the late President, Mr. Warren Harding's executivo order which gave to the Department of the Interior jurisdiction over navy oil had been revoked by the President, Mr. Coolidge. Associate Justice Butler announced the unanimous decision of the Court in a judgment which took 47 minutes to read. Judge Butler said there was persuasive evidence that Fall and Sinclair had conspired to defraud the United State#, and the failure of Sinclair to give evidence was strong evidence against his company. " We do not determine whether Fall was bribed," said the Judge, "but in the opinion of the Court he was a faithless public officer." This was confirmed by his " clandestine and unexplained acquisition of bonds" from the Continental Company which apparently was formed " for some dlegitimate purpose." The judgment continued: "Fall so favoured Sinclair and the making of the lease and the agreement that it was not possible for him loyally and faithfully to serve the interests of tho United States or impartially to consider the applications of other people for leases in the oil reserve. The lease and the agreement were made fraudulently by means of collusion and conspiracy between them.''

An investigation was held four years ago by a committee of the United States Senate into the conditions under which oil lands in Wyoming and California, which had been set aside by Congress as a fuel oil reserve for the 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, the 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 the Minister and others connected with him. The leases were eventually cancelled by a vote of the Senate. Fall and Doheny were later charged with conspiracy to defraud the Government, and after a long trial were acquitted by a jury in December last. The Elk fiills leases were annulled by the Supreme Court in March. .