The Bribery Trial Acquittal of Edward L. Doheny, December 1926

by Paul R. Spitzzeri

Edward L. Doheny (1856-1935) came from a working-class Irish family in Wisconsin and worked in construction and gardening before heading west to work in mining in Arizona and New Mexico.  While in the latter territory in the early 1880s, he met two key figures, miner Charles Canfield and lawyer Albert Fall.

Canfield hit success with a silver mine and took his equity to Los Angeles during the Boom of the 1880s, where he acquired real estate and formed an oil company, though the end of the boom brought significant financial losses.  A few years later Doheny migrated to the City of Angels and developed a partnership with Canfield exploring for oil in an area west of downtown.

Using a primitive drilling system devised on the cheap, the pair hit a big pocket in 1892 which ushered in the Los Angeles City Oil Field.  Doheny tried to grow his subsequent oil enterprises too quickly and got into financial trouble, but a partnership with the Atchison, Topeka and Santa Fe Railway, especially in opening up, in 1897, Orange County’s first oil field in Olinda in what is now Brea revitalized his fortunes.  Soon, Doheny expanded throughout California and then into Mexico, particularly in the Tampico on the eastern shore along the Gulf of Mexico.

His Pan-American Petroleum and Transport Company, formed as a holding company in 1916, encompassed his vast properties in California, Mexico and Colombia and the firm was the largest oil company in the United States within a few years.  After the election of Republican President Warren G. Harding in the 1920 election, Doheny’s old mining friend from New Mexico, Albert Fall, was appointed Secretary of the Interior.

Shortly after, in 1922, Fall secretly arranged leases of United States Naval oil reserves in Wyoming (Teapot Dome) and California (Elk Hills and Buena Vista) to Harry Sinclair, another oil titan, and Doheny.  Not only were these made under wraps and with no public bidding, but Doheny provided Fall an “interest-free loan” of $100,000, widely understood to be nothing more than a bribe.

This erupted in 1924 into the Teapot Dome Scandal. Congress requested the president to terminate the leases, which the Supreme Court ruled were illegally issued, while adding that the power to deal with reserve lands given by Harding to Fall was also illegal.  Harding’s early death in 1923 has been partially attributed to the stress of the scandal.

Doheny was indicted for bribery because of his “loan” to Fall, while the former Interior secretary, who resigned in 1923 and went back to New Mexico, and Sinclair were also tried.  The case went to trial late in 1926, but the 70-year old Doheny and Fall were acquitted of charges of bribery and of defrauding the government in the oil lease case.  Sinclair was also acquitted later, the explanation being that there was no proof that the Doheny loan and Sinclair’s transfer of Libery Loans to Fall constituted direct attempts for securing the leases.

Sinclair, however, was convicted for contempt of the United States Senate, when he refused to answer questions from an investigating committee, and for contempt of court because he hired a private investigator to find jurors who would vote to acquit via a bribe.  For these crimes, he served over six years in federal prison.  Fall was retried on the bribery charge and convicted in 1929, serving nine months of a one-year sentence and becoming the first presidential cabinet member in American history to be convicted of a felony.  Doheny was also retried with Fall in 1929 and, again, was acquitted.

After escaping conviction in the 1926 trial, Doheny took the train back to Los Angeles, where, on 21 December, he was received by a welcoming committee composed of many of the most powerful and well-connected business and political figures in the region.  Names like Flint, Dockweiler, Garland, Mott, O’Melveny, Hellman, and Kerckhoff were among the committee members, though one stands out.

Harry M. Haldeman was a prominent figure in Los Angeles whose grandson, born less than two months before the Doheny verdict, was H.R. Haldeman, President Nixon’s chief-of-staff convicted of conspiracy and obstruction of justice for his role in Watergate, another major presidential scandal a half-century later.

After stepping off the train, his arm in a sling because of an infection said to be exacerbated by the stress of his trial, Doheny attested his acquittal to the fact that his defense was “property presented before a typical American jury.”  He added, “I am delighted to be home again and am looking forward to one of the happiest Christmas days with my family, my grandchildren and my friends.”

By late 1926, Doheny had sold much of his interest in Pan-American, though he kept his California portions and created a new firm called Pan-American Westers Petroleum Company.  During the scandal and trial, he commissioned a 46,000-square foot mansion (his own mansion west of Los Angeles was later gifted to a Catholic women’s college, Mount St. Mary’s) on 400 acres in Beverly Hills.

Built at a fantastic cost of over $1.2 million, with over $3 million expended on the estate overall, and sold to his only son, Edward, Jr., known as Ned, for $10, Greystone did not long prove to be the respite intended.  In February 1929, just a few months after moving into the mansion, which was still under construction, Ned Doheny and his personal assistant Hugh Plunkett (both had been indicted for being the “bag men” for the Fall “loan”) were found shot to death.

It was evident the latter killed the former and then committed suicide.  Rumors abounded that the two were sexually involved and that a quarrel over that relationship led to the tragedy, though these were unsubstantiated.  There was no further investigation and the matter ended.

Ned’s widow remarried and stayed on the estate for another quarter-century.  She sold most of it in the mid-1950s to a developer who created the Trousdale Estates area and the house was purchased a decade later by the City of Beverly Hills, which operates it as a public park, a locale for private parties, and a popular film shooting location.  For more on Greystone, here is a very interesting piece by a friend of the Homesead, Hadley Meares.

The highlighted artifact from the Homestead collection is a press photograph of Doheny, arm in sling, and his second wife, Estelle (first wife Carrie, who bore him two children, a daughter who died young and Ned, killed herself not long after the couple’s 1899 divorce) upon arrival in Los Angeles.

A simple caption, dated 22 December 1929, merely states that the oil tycoon and his wife had just gotten home from Washington, D.C., where the trial was held, and “with Doheny much elated over his acquittal in the oil graft case.”  There is a date stamp of the 29th from the N.E.A. (Newspaper Enterprise Association) news syndicate’s Reference Department, probably indicating when it was deposited for archival purposes.