Evening star., 1926-11-14

partment Of Justice, but under spe-
cial act whereby Congress orders spe-
cial prosecution to charge us with
| bribery and conspiracy and takes us
before the United States side Of the
| Supreme Court Of the District of Co.
lumbia on those charges"
The indictment against Fall and Do
heny charges conspiracy to defraud
the Government under section 81 of
the Penal Code, Fall being charged
with having conspired with the oil
magnate to grant to him the Elk Hills
| lease, and to have accepted large
sums of money as loans and gifts,
thereby depriving the Government of
| his honest, unbiased, impartial and
| unprejudiced service" in the matter
Of leasing the naval oil reserves in
question.
Basis of Bribery Case.
The bribery Indictment, trial Of
which may follow. Is based on the. loan
Of 100000 to Fall by Doheny, ad-
mitted during the testimony before
the Senate committee. about the time
the contracts between the Govern
ment and the Doheny company were
being negotiated.
The maze of legal entanglements
involving the criminal proceedings is
equaled. if not exceeded, by the long
drawn-out civil suits pending to can
eel the leases and contracts with the
two OIL operators. Pending the out
come of these suits receivers appoint.
ed by the Federal courts now are in
charge of all three reserves, the two
Elk Hills reserves, in California, and
naval reserve No. 3, known as Tea
pot Dome. in Wyoming.
The initial suit to cancel the lease
to Doheny was tried October 20 to
November IS, 1924, at Los Angeles
before Judge Paul J. Mccormick. On
May 2S, 1925, Judge Mccormick de.
cided and found that the Secretary
of the Navy was authorized to make
leases and contracts with the Doheny
| company, but declared that Fall had
negotiated them and that Secretary
| DENLY was ignorant Of what actually
was going on. The court therefore
ordered the leases and contracts can.
celed, but at the same time ordered
that the payment made in crude oil
10 Doheny, to the value of S12.000,0 900
| for the construction of storage tanks
at Pearl Harbor, should stand.
/ Both the United States and Doheny
appealed. the Government against the
| S12 900, 900 award and the latter
against the cancellation Of the lease.
Authority Is Denied.
The United States Circuit Court at
| San Francisco reviewed the decision
and on January 4, 1926, handed down
| a decision denying authority of the
Secretary of the Navy to make the
| leases and contracts, holding that in
| the light of its construction of the
law there was no necessity of review
| ing the facts, and ordering the Do.
heny company to reimburse the Gov
ernment to the amount of $12 900 900
on that ground. The United States
Supreme Court granted a writ of GER
| tiorari September l3. and the decision
on the appeal is still pending.
| In the case of the Sinclair civil
suit. the initial proceedings to cancel
the lease of Teapot Dome were tried
| at Cheyenne June 10, 1925. before
Judge T: Blake Kennedy. The court
dismissed the suit on the ground that
| there was no evidence of fraud in the
F.! lease. An appeal was taken to the
| United States Circuit Court at ST.
Paul. and on September 2S, 1926,
| Judge William S. Kenyon handed
down a decision to the effect that the
Secretary of the Navy had the author
| ity to make the lease. but that while
no evidence of fraud had been sub
mitted to the court, the court, under
the circumstances, chiefly on account
of the refusal of Sinclair to take the
| witness stand, was warranted in as
Stunning the existence of fraud and
ordered the lease and contract can
celed. The decision of the Supreme
Court in the appeal in this case also
ic handing