and the Military
- The Forgotten
Bagman of Teapot Dome:
- Edward "Ned"
Laurence Doheny, Jr.
- By Colonel Norman S. Marshall
- By the end of World War I, the oil industry
had become a large and fantastically profitable business which
in part had replaced in influence other industrial interests
dominating American Politics.
A key player in this game was Edward L. Doheny, a man whose vast
holdings in both the United States and Mexico caused his only
son to play significant and tragic role in its history.
Edward Laurence Doheny, Jr. was born in Los Angeles on November
1893 and he graduated from Los Angeles High School in 1912. He
went to Stanford University for one semester and transferred
to the University of Southern California in January 1913. He
married his wife and the mother of his five children in June
1913. He graduated from the University of Southern California
with a degree in business in 1916. He then joined his father's
many companies. He was at an executive capacity with the ultimate
purpose being to succeed to the presidency upon his father's
Doheny, Sr. had first worked as a government surveyor in Kansas
and New Mexico. He prospected for gold, leaving a long time friend
and business partner, Albert Bacon Fall.
In 1890, he came to San Bernardino, California and met another
acquaintance and business associate who prospered with him in
the early oil industry, Charles A. Canfield.
They formed the Pacific and Silver Extracting Company.
The story is told how one day Doheny was sitting in front of
a Los Angeles hotel thinking about his future when he spotted
a wagon coming down the street loaded with a dark tar like material.
He asked the driver what it was and the driver said it was "brea";
it was used for fuel at a local ice plant. Doheny contacted Canfield
and the two set out to find the source of the "black gold"
which was at the La Brea Tar Pits. Thereupon he entered in numerous
leases and sank a shaft at the corner of Second and Glendale
Street in Los Angeles, bringing in his first gusher in November
Subsequently Doheny had 81 wells in Los Angeles and he began
to inquire other properties in Fullerton and in the San Joaquin
Valley including the Coalinga Fields near Bakersfield.
He soon became a major player in the petroleum business and within
a few years he went into petroleum production and refining in
a big way in Mexico where he brought in the greatest gusher in
history. At one time, he was so powerful that, to protect his
oil properties in Mexico he had a private army of 6000 men and
with the outbreak of World War I he persuaded President Wilson
to send a squadron of destroyers to protect his interests there
in the Yucatan Peninsula.
By 1922, his wells were providing 6 million barrels a month.
Between 1910 and 1925, Doheny took home ten million dollars a
year from his oil investments in the United States and Mexico.
With young Doheny's graduation from the University of Southern
California at age 23 in 1916 he entered his father's business
and knowing many social luminaries he was persuaded by Frank
Seaver, who was then a young up an coming lawyer and the
commanding officer of the Second Battalion of the California
Naval Militia to participate in its programs. Frank Seaver
persuaded him to join the Militia.
That organization was actively supported by his father E.L. Doheny.
Doheny was jingo and a month before the United States declared
war in 1917 he established the Practical Patriots League in Los
Angeles. The main purpose of the organization was to stimulate
recruitment for the Navy and to provide for National Assistance
to the families of the Militia men who had been called to active
Doheny was commissioned a full lieutenant on January 22, 1917
and four months later was called into active federal service,
although he was then the father of two children.
He was assigned to the USS HUNTINGTON (ACR-5), an armored cruiser.
Although he had requested recruiting duty in Los Angeles which
was denied by the Commandant of the Southern California Naval
Militia District, Commander Alfonso Henry Woodbine. Commander
Woodbine insisted that he join Captain Robinson on the staff
of the HUNTINGTON. Woodbine was the HUNTINGTON's Executive Officer
and First Lieutenant.
The armored cruiser HUNTINGTON was first launched on April 18,
1903 bearing the name USS WEST VIRGINIA. With the new battleships
coming on line, she was renamed HUNTINGTON, a city in West Virginia
on 11 November 1916. In late 1914, she became part of the Pacific
Reserve Fleet and was overhauled to accommodate catapult sea
planes on the boat deckways.
With the approach of war, the HUNTINGTON was placed in full commission
in early April 1917 and within days numerous Naval Militia men
reported aboard to augment the crew and make her ready for sea.
HUNTINGTON departed Mare Island on May 11, 1917, transited the
Panama Canal and arrived at Pensacola on May 28, spending two
months at the Naval Aeronautic Station at Pensacola engaging
in a series of early flight experiments with sea planes being
launched from her deck. During that Pensacola period, Frank
Simpson, Jr., the subject of another article, was a California
acquaintance of Doheny then undergoing Naval Flight instruction
at Pensacola. He knew Edward L. Doheny well and in writing home
to his parents on May 31, 1917, said the following:
- "Had lunch with Commander Woodine
on board USS HUNTINGTON today and he had dinner with me
He evidently didn't think much of young Doheny Doheny wanted
to stay in Los Angeles on recruiting duty and Woodbine said he
had enough trouble makers at home so he took him along
on board ship.... Morgan Adams is wild at having been stuck in
the Farragut on patrol duty (his regular job is the same thing
I thought it such a hardship to have to do for a few days).
When Commander Woodbine came home from San Francisco this spring
he found Adams and the Dohenys had cooked up a fine deal
so he Commander Woodbine phoned the Practical Patriots
League and said send your authorized representative
to my office at the Armory this afternoon.'
Mr. and Mrs. Doheny and somebody else came. Commander Woodbine
said People you are evidently sincere in desire to help
the Naval Militia but in order that we come to a proper
working basis let me tell you that I am the boss of the
Naval Militia in So. Cal and everything must go through
my hands and be approved by me. He said he had no more trouble."
- After an affectionate letter closing to
his parents, he went on to say by way of a footnote:
- "Commander Woodbine said that
he didn't think young Doheny would pass the mental exams a fine
bunch of pikers and four flushers, those Dohenys courtesy
to even acknowledge my letters patriotism? Not at all
just an attempt to gain notoriety. Have that fine son
of theirs detailed to a soft berth at home I may yet be
able to use them so will sit tight but someday Mr. Doheny Sr.
is going to hear the straight from me."
- Within a few days after arrival of the
ship at Pensacola, Doheny, Sr. arrived and visited the ship and
a conversation with Captain John Taylor Robinson, its Skipper.
By Robinson, what he thought of the Navy's handling of its oil
reserves Doheny said "well it is being handled very well
for the people you have for neighbors, but you were not going
to have any property there in a very few years. Robinson later
said that conversation from such a practical expert as Doheny
had opened his eyes to the danger to the Navy from drainage by
adjacent wells. In that conversation, something else must have
been said for Doheny was detached within days from the ship on
June 13, 1917 and assigned to duty in the Judge Advocates office
in Washington, D.C. although he was not a lawyer. He spent the
Upon entry of the United States into the war, Doheny his family
and his various companies did the patriotic thing, the Pan American
Petroleum and Transport Co. and his Mexican Petroleum Company,
bought two million dollars in Liberty Bonds, while Doheny Sr.
and his family bought another 1.5 million dollars individually.
More bonds were bought by Doheny and his businesses in subsequent
Liberty Loan Drives. Doheny's companies also contributed one
hundred thousand dollars to the war work of the Young Mens Christian
Association while Doheny and his family contributed an equal
amount. This patriotic generosity did not go unnoticed in Washington.
The war ended on November 11, 1918 and on November 17 Doheny
was detached from the Judge Advocate's Office and sent to the
submarine base in San Pedro, California to rejoin his family.
He was released from active duty on January 14, 1919, but continued
to participate in the Naval Reserve with the Lieutenant's commission
until his murder on February 16, 1929.
- Upon release from active duty, Doheny
joined his father's petroleum empire as a Senior Executive being
a Vice President on the staff of the Petroleum Securities Corporation.
He entered into the social life of Los Angeles becoming the President
of the University of Southern California Alumni Association and
was a great benefactor of the University and other causes, while
his wife watched after a growing family. He enjoyed significant
social contacts with the Los Angeles Athletic Club, the Los Angeles
Country Club and membership on the boards of leading civic organizations.
He became a trustee of the University of Southern California
and was a generous contributor giving a two hundred thousand
- In 1920, there was a change in the administration
in Washington. President Harding assumed the office and appointed
various department officials. Edward Edwin Denby of Michigan
and a former congressman was appointed by Harding to the Office
of Secretary of the Navy. Denby, in turn, appointed Captain Robinson
to head the Navy's Bureau of Engineering raising him to the temporary
rank of Rear Admiral and placing him in charge of the Navy's
In the meantime, Albert Bacon Fall had become Secretary of the
Department of the Interior and knowing Doheny's interests in
acquiring additional domestic reserves began a scheme to have
the petroleum transferred from the Navy Department to the Department
of Interior under his control. Fall was pressured with financial
Earlier, President William Howard Taft had withdrawn the Public
Lands for the use of the Navy in 1910 and by executive order
created the Naval Petroleum Reserve consisting of 69,310 acres
in the Elk Hills, Kern County, California and an additional 29,341
acres in the Tea Pot Dome area of Natoma County, Wyoming.
The Navy had converted from coal to oil burning ships by 1912
and the government wanted to be sure that petroleum reserves
will be available if the commercial sources became scarce. Additionally,
the availability of cheap government oil would act as a cap to
extortionate prices charged by the commercial producers.
The fear of drainage from adjacent wells to Naval properties
was a common fear and Secretary Josephus Daniels felt that under
certain circumstances it may be necessary to lease parts of the
Reserve. At his urging on June 4, 1920, Congress passed a law
giving the Secretary of the Navy power to develop operate or
lease parts of the Naval Reserve and giving him the power to
sell or exchange petroleum products for the Navy, a small budget
of half a million dollars was also appropriated for the project.
- By May 31, 1921, President Harding signed
an executive order giving the Secretary of Interior, Fall, complete
control of the Naval Reserves and a few weeks later Fall wrote
- "there shall be no further conflict
with Navy officials" as he had told Denby, he would take
complete charge, "he understands the situation and that
I shall handle matters exactly as I think best and will not consult
with any officials of any bureau of this department, but only
with himself and such a consultation shall be confined strictly
and entirely to matters of general policy".
Transfer of the petroleum reserves embittered powerful figures
in the Navy Department. Fall decided to pacify he Navy brass
by helping them deal with an old problem for many years the Navy
had wanted to build petroleum storage depots at Pearl Harbor,
Hawaii and along the Atlantic Coast, but with the downsizing
of the Military Congress had denied these funds.
The Navy thought that it could fund the construction work with
royalties from some small oil leases it had granted. Although
that Congress demanded these royalties be deposited in the Treasury's
General Fund, but in any event the storage depot project would
cost two hundred million dollars which was more than the Navy's
Fall found a way around this suggestion that Navy take its royalties
and certificates from the Oil Companies which could be used to
pay for the construction of the depots, that is if more of the
Naval Reserves were leased there would be enough money and certificates
to pay for the construction of oil storage depots by the oil
On November 28, 1921, Doheny signed a proposal to build the oil
storage depot at Pearl Harbor in exchange for the Navy's crude
oil. The very next day, Fall called Doheny and told him to go
ahead and said the "loan" they had talked about was
Doheny then dispatched his son, Edward L. Doheny, Jr. and Doheny,
Jr.'s employee and friend, Hugh Theodore Plunkett, to deliver
the loan. The two men went to the brokerage house of Blair and
Company withdrew one hundred thousand dollars in cash from Ned's
account wrapped the money in paper and put it in a little black
bag and took it to Fall in his apartment at the Wardman Park
Hotel in Washington. Later Ned Doheny claimed that Fall had given
him a receipt for the "loan".
On April 17, 1922, the government accepted Doheny's bid to build
the Pearl Harbor storage facilities in exchange for its choice
of any lease on the Elk Hills Reserve in exchange for building
a storage capacity of 1.5 million barrels of fuel oil, he would
receive 6 million barrels of crude oil. Later, another agreement
was made by which Doheny agreed to build oil storage tanks and
build a refinery in San Pedro, California (the Port of Los Angeles)
and build a separate pipeline from the Elk Hills in Kern County,
California southward to San Pedro in exchange for which Doheny
got the right to lease the entire Elk Hills Reserve for 15 years.
The oil in the ground at Elk Hills was estimated at between 75
and 250 million barrels being worth at least one hundred million
dollars. Fall signed the contract on December 11, 1922. This
undoubtedly a sweetheart deal and within a matter of months indictments
were issued. Congressional hearings were held and indictments
were issued against Albert Fall, Doheny and Harry Sinclair (Standard
Oil of Indiana and a beneficiary of the Tea Pot Dome lease hold).
The first civil case, to rescind the Doheny oil lease contracts
came to trial on October 21, 1924. This was Admiral John Keeler
Robinson, Ned's former Commanding Officer who portrayed the whole
thing as a patriotic project to ensure that there was fuel for
the Pacific Fleet. He said that Doheny had told him that his
company would bid on the construction of the storage facilities
and "what is more, I will tell you admiral", said Doheny,
"If you get a bid from me or my company it will be one that
won't involve one cent of profit to me".
One of Doheny's lawyers laid it on thick, "America can sleep
tonight secure from danger of being overrun by a Mongol country
because the patriotism of such men as E. L. Doheny, Edwin Denby
and Admiral John K. Robinson and their work in establishing a
great Naval base in Hawaii. These men have been humiliated and
vilified because they endeavored to save you and me and our country".
The civil trials were followed by criminal trials against Doheny
and Fall. Fall was convicted of accepting a bribe.
Doheny was represented by lawyer Frank Hogan, a successful criminal
attorney, who once remarked the ideal client is a rich man who
was scared. Doheny paid Hogan $1,000,000 for his work on the
case and he succeeded in having Doheny acquitted, although Fall
went to jail.
Summation: The close of the case was a masterpiece of forensic
showmanship. He made an emotional appeal to the jury portraying
his client as a pioneer or prospector or patriot and pointing
to Ned Doheny, he declared,
- "That old man offered that young
man's life upon the alter of patriotism. He went on the ships
of war over the turbulent and submarine infested oceans in his
country's service." He reminded the jury that Ned was an
only son, "and you are asked to believe that when Edward
L. Doheny near the end of his life corruptly intended to bribe
Albert B. Fall, a Secretary in the Cabinet of Warren G. Harding,
he deliberately and purposely used as an instrument, therefore
his son, the pride of his youth, the hope of his maturity, the
solace of his old age!! And yet, unless you believe that, you
cannot believe there was a bribe. You cannot believe that there
was a criminal mind and a corrupt heart motivating this thing;
you cannot believe in all the labored argument of our opponents.
Do you believe that man is a crook? If he's a crook, convict
him. But can you believe that his mind was so corrupt that he
conceived bribery and that he had fallen so low that he selected
his own son, whom a few years before he had given to the Navy,
as an instrument of his bribery. Now Doheny says to you from
the grave that which in life he said from this very witness stand.
This indictment charges that young Doheny was a briber. Can you
believe that? Can you believe that a man who a few years before
had offered his only son to his country and fallen so low that
he took him, the expected solace of his old age, and made him
an instrument of his bribery? It isn't human to believe it!"
Doheny was acquitted in less than one hour after the jury was
The United States Supreme Court handed its decision on October
11, 1927 declaring that the leases had involved fraud and were
therefore rescinded as void. However, Sinclair and Doheny had
to return to the government the Navy's Reserves at Tea Pot Dome
in Elk Hills along with over 24 million dollars from Doheny's
Pan American Petroleum Company and 500,000 dollars from Sinclairs
Mammoth Oil Company. That ended the civil suits.
- Theodore Plunkett was born in Kansas and
worked at a job changing tires in service stations. When World
War I broke out, he served as a machinist on a submarine chaser.
Returning from the War he went to work for the Doheny's and became
a "secretary" of Ned Doheny. He was involved in many
of the family's financial affairs and was a trusted gopher. He
was given to nervous breakdowns and had been hospitalized at
the Doheny expense.
At the time of the trial, Doheny, Sr. was still facing a trial
in the criminal court for bribing Fall. Doheny knew that if Fall,
who would be tried first were found guilty, he would have to
convince the jury that he had not given the bribe that Fall had
already been convicted of accepting. The case could be expected
to hinge on the testimony of Ned Doheny and Hugh Plunkett who
had actually delivered the money in the black bag. Obviously
if Plunkett was diagnosed as psychotic and residing in sanatorium,
Plunkett could not be called to testify about the bribe to Fall.
Even if he were out of the institution, the testimony of a man
with mental problems would lack credibility. Doheny, Sr. brought
his friend and physician, Dr. Fishbaugh, who attempted to convince
Plunkett to enter a sanatorium. That same day Mr. and Mrs. Doheny
visited Plunkett at his apartment at Greystone in an attempt
to convince him to enter the sanatorium and there was an argument.
Later that evening when Plunkett showed up at the Doheny mansion.
Ned decided the time had come to put him in a mental institution.
The Los Angeles Times account said it was because of Ned's inability
to quiet the mad man and his belief that a showdown on the plan
to have Plunkett placed in a sanatorium for rest should be had
then that caused Doheny to put in a hurried telephone call for
Dr. Fishbaugh who later received the message at a Hollywood Theater.
On the evening of February 18, 1929, something happened. Plunkett
apparently shot Ned to death and turned the gun on himself. There
was apparently cover ups by the family physician and a delaying
in reporting the events to the police department, with contrary
reports of what really transpired.
Both Ned and Plunkett were the apparent victims of Old Man Doheny's
ambition. It is with a bit of irony that the Teapot Dome Scandal
caused Fall to be convicted of accepting a bribe and that Doheny
Sr. was found innocent of offering to bribe.