Evening star., 1926-11-23
U. S. Counsel Stresses $780,
600 Loan by Doheny in
Opening Statement.
MILLIONS SEEN MADE
BY MAGNATE'S COMPANY
Defense Denies Secrecy or Damage
to Government in Negotiations.
Jury Under Guard.


cial counsel appointed by President
Coolidge to conduct the prosecution
of the oil cases, today made the open
ing statement for the prosecution at
the trial Of Albert b. Fall of New
Mexico, former Secretary of the In
terror, and Edward L. Doheny, oil
magnate of Los Angeles. Calf.
Mr.. Roberts was followed by At
tor'ney Frank ]. Hogan, who out
lined the defense Of Doheny. The
trial is in progress before Justice
Adolph A. Hoehling and a jury In
Criminal Division l on an indictment
charging a conspiracy to defraud the
United States in connection with the
lease Of naval oil reserves in Elk
Hills. Calf.
The action of the trial justice yes
terday in granting a motion Of coun-
sci for the Government to lock up
the jurors throughout the duration
of the trial came as distinct sur
prise to the jurors and to counsel for
the accused. Mr.. Hogan, representing
Doheny. and Attorneys Wilton j.
Lambert and Henry A. Wise of Falls
counsel made strenuous objection to
the granting Of the motion. The court
pointed out that the Court of Appeals
has decided that the matter Of keep
ing o. jury together is In the discre-
ton of the court, and in the face of
rumors and suspicious disclosed In the
examinations of the talesmen the
court felt justified in granting the re
quest.
No Reflection on Defense.
mo reflection was meant" said
Justice Hoehling, ''on the accused or
their counsel by the action of the
court"
Members of the jury displayed sur
prise and chagriIt in their faces when
Justice Hoehling announced late yes
terday afternoon that they would not
be permitted to return to their homes
or occupations throughout the dura-
tion of the trial. Attorneys Hogan
and Lambert, for the two defendants,
let the Jurors know that the request
for their incarceration had come from
the Government. Each, In turn, arose
and noted an exception as to his
client to the action of the court.
After adjournment yesterday the IL
men lin custody Of Deputy Marshals
w. J. Mullen and T.. A. Sackey, were
taken to dinner at the st. James
Hotel and after a short walk, were
returned to the Courthouse where
they were provided with sleeping ac-
commodations for the night. Break
fast was served at the hotel this
morning and the jurors were back in
court at $50, when Justice Hoehling
resumed the trial.
1.-THE Navy has lost more than 90
per cent of it's oil reserve by the con-
tracts forming the basis Of this prose-
cution,' said Mr.. Roberts. land the
Pan-American Co. not only stood to
make an enormous profit by the lease.
but on the construction contract the
Pan-American Co. has made sum in
excess of S79O,OO0 by the resale of
royalty oil which Is obtained from the
Government"
Stresses Loan to Fall.
Roberts laid great stress on the
money transaction by which 100000
was sent from Doheny to Fall while
the negotiations over the lease OF the
naval reserves were in progress. Do
heny claims he merely lent the money
to his friend, Fall. but Roberts insist
ed the money was n "bribe" by which
the United States had been deprived
Of Falls unbiased and unprejudiced
Judgment" in connection with the Oil
situation.
Roberts declared it was the policy
of the Government to keep the oil In
the naval reserves for the future
of the Navy, especially in time of
emergency. He scored the private"
negotiation of the contracts and leases
with Doheny's companies by Fall with.
out giving an open and free opportu-
nifty to other oil companies to compete
FOR the contracts
The Government lawyer explained
to the jury the statute covering con.
spiracy to defraud the United States
and said the prosecution expected to
prove that through Fall and Doheny
the United States had been defrauded
in a number of ways. He claimed the
Government had been deprived of it's
oil reserves and Of their contents and
also Of the right to have the con-
tracts made through competitive bid
ding. Roberts also claimed there was
fraud involved in the project to build
fuel depots for the Navy without the
knowledge and consent Of Congress.
Value Rated In Millions.
Roberts asserted that the lease in
question was of the value of many
millions Of dollars to the Pan-Ameri-
can Co., which Is holding the leased
land as a reserve for its future use,
'1ust as the United States could and
should have DONE" Roberts insisted
that the transaction as 1t was carried
out means that instead Of the Gov
ernment having all Of it's crude oil for
future emergency 1t only gets per
cent Of 1t in the shape of fuel oil and
all the rest under the lease goes to the
Pan-American Co.
Mr.. Hogan laid stress on the fact
that only two men, Fall and Doheny,
are on trial, not the Pan-Amertcan
Co., nor the Interior Department, nor
the Navy Department. He suggested
that he would ''fill in many vital i'm
portant gaps which Government
counsel thought unnecessary to men,
tion." He traced the life histories
of Fall and Doheny to show how they
frequently interlocked.
Mr.. Hogan went into the intimate
history Of the 100000 loan and EN-.
phasiZed that 1t was contained In a
brown leather satchel."
He said the loan was made to en-
able Fall to buy the ranch property
adjacent to his holdings at Three
Rivers n. Mex, which had q valua-
BILE relationship because OF the water
facilities. The note given by Fall
was a demand" instrument, but Ho-
gan explained that Doheny tore off
| the portion containing the signature
| and gave it to his wife so that ~
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