Evening star., 1924-06-05
OIL PROBE REPORT
CHARGES FLAGRANT
DISREGARD OF LAW
CONTINUED from First Page.)

No. I, to be followed, without com
petitive bidding. by a lease of the
entire reserve, comprising over 10000
barrels of oil, out of which, Doheny
told the committee, he would be in
bad luck if he did not make 500, ,000,-
600 profit"
In criticizing the use OF royalty oil
for construction of steel storage
storage tankage should be construct
ed only upon a contract calling for
the payment Of money, to be appro-
priated by Congress for that specific
purpose.
The sending OF marines to drive
claimants from Teapot Dome after
the Sinclair lease had been signed
was denounced ''as a perfectly out
rageous use of the armed forces of
the United States" resorted to ito
avoid Il judicial inquiry into the
validity of the Sinclair lease"
Discussing the leases as bargains, -
the report declared that lease under
which the government receives 6
the lessee gets o. cannot possibly be
in the interest of or just to the gov
ernment.
Had the leases been awarded upon
competitive bidding it said, there
would have been no occasion TO
fair or just to the government .
The omission TO invite competition casts
a suspicion on the transaction as one
in the interest of the government. -. . .
Say Rival Bought On.
Not only was the Teapot Dome
lease awarded to Sinclair without
competition. but he paid fabulous
price to procure the elimination Of a
potential rival. One seeking only a
fair contract from the government
does not buy of his competitors
neither does ne. when he secures II
ordinarily. subnit TO black mail in
connection with it.: nor does he.
while negotiations are pending, ac-
commodate the awarding officer with
loans"
Discussing in more detail the
evidence relating to Sinciairs elm
pot Dome, the report related how Leo
Stack of Denver associated himself
with f.. l. Doheny in 1920 in an
effort to secure lease of some offset
reserve, and how Stack later made an
arrangement with the Pioneer Oil
Company, which. in turn, made a set
uement with Sinclair.
Claims Called Shadow.
Stack then enlisted the interest
Of the owners of a newspaper in Den
yer. Colo.," the report continued.
which Immediately upon the execu =
tion of the lease began the publica-
ton OF articles denouucing it as cor
rupt and contrary to public policy
Suit was started in the name
or stack against that company the
Pioneer company and Sinclair, alleg-
ing a conspiracy against Stack.
Sinclair SafflaI
an agreement under which he paid
s25o,p 900 and agreed to pay s75O.oOO
more. The attacks OF the newspaper
thereupon ceased. The proprietor of
a rival newspaper. upon a claim even
more shadowy. il indeed it can be
called a claim at all. got ss2.5Oo out
of the Pioneer Oil Company as his
share of the moneys yielded up by
Sinclair"
On the question of the danger of
drainage, the report stated that
ference of opinion that drainage was
possible between the Teapot Dome
reserve and the Salt Creek oil fields.
although the extent and seriousn ess
OF the drainage was in dispute. Drain
age aan, 10 an appreclable and serious ex-
tent was occurring upon the two
naval reserves in California, it was
added.
Harding Criticised.
PRESIDENT Harding was criticized
for signing the executive order trans
ferring the leases without having
documentary support Of any kind
for his action. The Department of
Justice also was declared to have
failed to diligently assert and main
tain the governments title to sec
ton SO, within the confines of Naval
Reserve No. 1. in California, the re.
port stating that had this been done
and three other sections properly pro-
tected, the problem of drainage upon
that reserve would have been "rela-
lively simple"