Evening star., 1926-11-23
80 PER CENT LOSS OF NAVY OIL
ALLEGED IN FALL LEASING PLAN
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anything happened to either there
would be no foreclosure on Fall"
Mr.. Hogan added, 1.-The note has
oeer secured and there is no posi-
piity OF Doheny not being able to col
Aect every penny of it,"
MIR. Hogan insisted that not only did
the loan have no connection with the
contracts, but that Fall did not bring
ABOUT the planning, direction or max
ing of the contracts.
The Pearl Harbor project, Hogan
said, was born in the Navy Depart
ment and followed the receipt of in
formation from Admiral Gieavea of
the Asiatic squadron that the Japa-
nese were planning an attack on the
Philippine Islands and Hawaii. you
VIII see, said Hogan, that the prof
ect was born of a patriotic desire OF
Secretary of the Navy Edwin DENLY
to protect your country"
Court Opens Slightly Late.
Court was four minutes late in con
vening. Fall and Doheny were among
the early arrivals a minute after
Justice Hoehling took his seat on the
bench, the jury, which had been locked
up all night under guard, filed into
the room and took their places in
the jury box. At the outset Of the
proceedings Justice Hoehling called
the attention of counsel to the rules
governing practice in the court. ad-
monishing them to adhere to them.
Attorney Owen j. Roberts in open
ing the argument for the Government
outlined the nature Of the case and
defined the conspiracy Indictment for
the benefit and information of the
jury.
THE charge is a serious one" he
told the jury land it's consequences
TO the Government are equally as
grave"
After explaining to the jury the
statute covering conspiracy to defraud
the United States, Mr.. Roberts as
serted that the Government would
prove that the United Safes had been
defrauded "of a large sum of money"
due to the alleged conspiracy between
the defendants FAN and Doheny and
In a number of other ways as charged
IN the indictment, particularly by
being deprived of it's oil reserves and
the oil and gas contents of them, and
of it's rights to have contracts re-
iating to the reserves and their oil
and gas contents made by competitive
bidding.
Sketches History Of Case.
He told the jury that the case Of
the Government "is not a long or
complicated one" Briefly sketching
the history of the public domain he
outlined the policy beginning 1908,
when large areas of public land were
set aside as oil reserves for use Of
naval ships in time of national
emergencies. In this connection he
also dwelt upon the alleged fraud in
volved in the project between Fall
and Doheny to build dual depots for
the Navy without the knowledge and
consent of Congress and the fact that
the Government had been deprived
of Falls unbiased and unprejudiced
Judgment
Naval Reserve No. /, commonly
known as the Elk Hills Reserve in
California, comprising between 10000
and 10000 acres. was thought to
contain about 250,0O0 900 barrels of
crude oil, which Mr.. Roberts told the
jury were to be withdrawn and con-
served for the Navy. Another re-
serve, No. 2, in California, and a
reserve in Wyoming, known as the
Teapot Dome, which does not figure
in this case, also was set aside In the
same executive order by President
Taft in 1912.
Mr.. Roberts stressed the fact that
1t was the policy Of the Government
to maintain these reserves intact, de-
claring that the Government would
prove that this policy was carried out
strictly down to 1920.
Says Navy Yielded Control.
after the act of June 4, 1920. was pass
ed. giving the Secretary of the Navy
Jurisdiction over the naval reserves,
the Navy Department turned the mat
ter over to Secretary Fall, and that
Fall announced his pur.
pose to manage and administer the
reserves according to his own ideas
and judgment.
Mr.. Roberts said that the Govern
ment would prove by documents that
Fall understood perfectly and had ap-
proved. both orally and in written
communications, the policy Of conser-
walton which had been SO long in ef
feet. 1--WE will prove that Fall un-
derstoOd that the oil was not to be
turned over 10 commercial exploita.
uons." he said.
The attorney definitely charged that
Secretary Fall invented the plan to
use the royalty oil coming to the Gov
ernment from leases in the naval re-
serves as currency to pay for storage
tanks and facilities to be built Nv Do
heny's pan-American Company, for
the Navy at Pearl Harbor and slse-
where.
Mr.. Roberts laid great stress on the
month of November, 1921, as the time
shortly after the executive order Of
March 81. transferring the reserves
into Falls department. In that month,
he said, Fall and Doheny were in con-
ference on the plan which later re-
suited in the lease and contract being
awarded to the oil magnate.
He contended that Doheny's willing.
ness to construct storage tanks for
$1.500.000 at Pearl Harbor was solely
on condition that he should get other
leases in naval reserves.
That same month of November.
Roberts said the Government would
prove that Fall had approached
Doheny with reference to his own
financial affairs, whereupon Doheny
agreed to advance him 100000. This
was on November %. On November
80, he said the Government would
prove Doheny drew the money out
OF his sons bank account and that
same day the currency was transmit
ted to Fall through Dohenys son.
Roberts, at this point, made no men.
ton Of the little black satchel,"
which has figured so frequently in
the Senate hearings and court pro-
ceedings that followed
In return for the currency, he said
that Fall gave demand note.
THAT whole transaction was sur
rounded with secrecy" said Roberts,
''the reason being that Fall wanted
TO buy ranch at his home at Three
Rivers. New Mexico A few days
later he said that Fall made settle
COLONIAL HOTEL