The daily worker. [volume] (Chicago, Ill.) 1924-1958, 1927-03-01
SUPREME COURT
IN BLOW AT ELK
HILLS OIL LEASES
Says Fall, Robson and
DENLY COnspired
(Continned from Paqe Onel

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held by Doheny and Harry F. Sin
clair are approximately the same.
The Teapot case is now pending in
the court.
The evidence, Justice Butler said,
was conclusive that the contracts
were obtained by fraud.
The court found that after the
navy department requested Fall to
make the leases he dominated the
making of the contracts.
Fall and Admiral Robson, Justice
Butler said, conspired to give Do
henys companies the contracts. He
traced the correspondence between
the pair and Doheny.
100000 For Lease.
The 100000 which Doheny gave
Fall, the court held, was a part of
the conspiracy. The day after the
100000 was paid Fall said that Do
heny would be given additional privi-
leges.
The final lease, the court found,
was made without any competitive
bidding.
The court failed to sustain one
contention of the government-tha
former Secretary of the Navy Den
by acted in the leasing under mis-
apprehension. The court found that
Denby acted collusively with FALL
but did not say that he acted fraudu-
lently.
It was not necessary to find
whether or not the 100000 paid Fall
was a bride, the court said. Falls
whole action was fraudulent, the
court found.
Tank Contract Illegal.
Justice Butler held that the navy
departments agreement to have Do
heny build tanks at Pearl Harbor in
exchange for Royalty Oil was illegal.
Congress had made a practice of APP
rropriating funds for every such con-
struction and this authority was
lacking, the court pointed out
Was Civil Suit.
The case which the Supreme Court
decided today was one of equity, and
was separate and distinct from the
criminal charges brought against
Doheny and Fall It was ordered
by the senate, and was instituted on
March II, 1924, the government
seeking TO cancel the leases to and
contracts with the Doheny companies.
The suit was first tried in the fed
eral court at Los Angeles late in
1924. and on May 20, 1925, Judge
+. J. Mccormick handed down a de-
cision in which he nullified Doheny's
contracts on the ground that the
secretary of the navy had exceeded
his authority He also stated the
leases and contracts were grounded
in fraud. He awarded the Doheny
companies approximately $780,
900, however, that had been expended
for storage facilities, construction,
etc.
DOheny Appeals.
The Doheny companies then APP
pealed from so much of the decision
as deprived them of the leases, and
the government appealed from that
part which gave reparation to Do
heny.
The U. s. Circuit Court of Appeals
at San Francisco reviewed the de-
cision and on Jan. a, last year, handed
down a decision which gave the gov
eminent the complete victory It had
appealed for 1t confirmed Judge
McCormick's decision insofar as the
cancellation of the leases was con-
cerned, and denied the right of the
Doheny companies to the $12.0O0,000
PREPARATION. Doheny then appealed
to the Supreme Court.
Doheny Whitewashed.
While the civil cases were being
tried and appealed, the government
brought both Doheny and Fall to
trial on criminal charges of conspir-
acy to defraud the government, and
Fall was charged with bribery.
After trial lasting several weeks,
jury in District Supreme Court in
Washington returned verdict of not
guilty against both men. The jury
decided there was nothing fraudulent
in the 100000 loan, or the entire
transaction--a contention controvert-
ed by today's decision of the nations
highest court. SO far as Doheny is
concerned, however, he is free and
cannot be tried again.
Fall is due TO face criminal trial
here in April with Harry F. Sinclair
over the Teapot Dome lease.
In view Of today's decision, there
was lively speculation as to what eff
feet the courts finding of fraud
would have on the Jury that is to