The Teapot Dome Scandal involved accusations that President Warren G. Harding's Secretary of the Interior, Albert Fall, had accepted money from private oil companies to lease government-owned oil lands to them. To do this, Fall ignored the open bid process, a requirement under the General Leasing Act.
There were three tracts of land that Fall illegally leased, one in Buena Vista, Calif., one in Elk Hills, Calif., and one in Salt Creek, Wyo. The latter was nicknamed the Teapot Dome because of the shape of the land. These lands had been used exclusively as naval oil reserves and were under the control of the Secretary of the Navy.
Private business interests vied for control of these oil-rich lands, and after Fall was appointed Secretary of the Interior, he convinced the president to transfer jurisdiction of these lands to his department. By signing Executive Order 3474, Harding granted his request. Not long after, Fall turned over these lands to his friends in the oil business, and he was accused of accepting $100,000 to do so.
The Senate investigated these allegations, and then they tried Fall on bribery charges. He was convicted, fined $100,000, and spent a year in jail. Prior to his appointment as Secretary of the Interior and his involvement in the Teapot Dome Scandal, Fall had been a senator from New Mexico.