Evening star., 1925-06-19
Fall, DENLY, Roosevelt and
Other Officials Are Cleared
by Judge of Any Aocusa-
tions of Conspiracy.
EVERY MAIN CHARGE
BY U. S. OVERRULED
Court Throws Out All Data Con-
cerning Falls Finances-Trans-
fer of Reserves From Navy to
Interior Department Declared to
Have Bees Proper Act.
By the Associated Press.

| By the Associated Press.
CHEYENNE, Wyo.. June 19-The
leasing OF Teapot Dome to Harry +.
! Sinclair and his Mammoth Oil co.
was upheld today by Federal Judge
T. Blake Kennedy. who rendered his
! decision in the annulment suit
brought by the Government.
The allegations OF fraud in the
bill have not been sustained" Judge
! Kennedy ruled
The Secretary OF the Navy was
fully within his rights in acting as
! he did, having been authorized by
the act of June i, 1920. 10 develop,
! conserve, use and operate" the naval
oil reserves, Judge Kennedy held.
He ruled that the phase in his
discretion embodied III the law,
placed no restriction on the manner
III which the reserves were to be
handled.
Had Full Authority.
He further had fun authority TO
use. store, exchange and sell the
crude oil royalties. Judge Kennedy
| held. denying the Governments con
! tention that the SecretarY's action in
! dealing in commodities for the Gov
| ernment was usurpation of con
sressional authority for appropriating
! money for such dealings.
/ The act of June /. 1920, was a spe
! cial act and authorized the building
! of storage tanks at Pearl Harbor,
/ Portsmouth and other place as desig-
mated under supplemental contracts
between the Government and Sinclair
| and Doheny, the ruling said.
Falls Finances Thrown Out.
! Judge Kennedy struck from the
record all exhibits and records OF
! Falls bank accounts and financial
dealings with the Continental Trading
/ Co in sustaining a defense motion.
The Government bill of complaint
! was dismissed. every major contention
! in it having been denied in the
! decision.
| We have no quarrel with the
| theory that the Congress should have
and has the constitutional power tn
/ regulate the manner in which the
! property of the United States shall
! be handled by the executive branch.
! said the conclusion of the decision.
| but we do maintain that in the eXer-
! else of that power il may by apDrO-
/ pirate legislative authority delegate Of
! tiCers of that department to handle
| Government property in an unrestrIct-
| ed way and in accordance with a vest
! ed discretion
! Recites History of Case
| The decision at the outset set forth
| the title of the suit and the Govern
ments pleading that the executive
order of President Harding of May 81,
/ 1921, transferring the naval oil reserves
/ from the Navy to the Interior De
/ partment. was granted in excess of
| executive authority. and that Harry F.
/ Sinclair. lessee, and Albert B. Fall,
! lessor. conspired in negotiating the
! lease.
! The Governments allegation Of
! fraud and the charge that the leasing
! of the big oil reserve was illegal were
set forth at length and Judge Kennedy
! then plunged into his findings of fact
! The finding of fact then We're set
| forth in their chronological order
Judge Kennedy set forth the Govern
ment's first policy of conservation of
| oil lands, and how in April. 1915, GER
| tain lands were designated as naval
! oil reserves.
! The decision then reviewed the facts
leading up to the leasing of the Wyo
| ming reserve. and the arrangement
| under which the Navy was TO receive
| fuel oil in exchange for crude oil
royalties ACQUIRING to the Navy under
the naval oil reserve leases.
Many Officials Cleared.
The decision reviewed testimony re-
lating how Sinclair paid about 81 900
| 600 to the Pioneer and Belgo Oil com
| panies for mineral claims they held in
! Teapot Dome, which former Secretary
Fall required that Sinclair acquire in
! order to get a lease on the reserve.
The Continental Trading Co. which
! the Government alleged was used i'll
a hugh oil resale scheme as well as
| for passing Liberty bonds from Sin
clair to Fall. was organized legally
| under the laws of Canada, said the
decision.
The decision absolved Rear Admiral
J. X Robson. chief of Navy engi-
neering; Z. c. Finney, Assistant Secre-
! tary of the Navy; II. Foster Balm. di
rector of the Bureau of Mines: former
Assistant Secretary Roosevelt of the
! Navy, and several subordinates in
volved in the leasing negotiation, of
all blame.
THE defendant Mammoth Oil Co.
was the creature of Sinclair and
! should be held responsible for all his
acts" the decision said. The executive
order of President Harding transfer
ring jurisdiction of the reserve was
held to be legal.
| Sees No Undue Secrecy
! The lease must be the legitimate
child of the then Secretary of the
Navy DENLY in view of the fact that
| Admiral Robson, his representative.
was in touch with both Fall and
! DENLY at all times, Judge Kennedy
| held
| There is no substantial evidence to
| show that unnecessary secrecy was
| shown by Fall in negotiating the lease,
/ the judge ruled.
The fact that Congress was not
/ consulted by Fall and DENLY is not
i significant, he declared.
Fall was upheld in keeping the
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