New York Press
March 22-28, 2000
George Szamuely
The Bunker
Gore's Oil
In September of 1995, as part of the pompously named National
Performance Review-Al Gore's fatuous project to cut down government
waste, fraud and mismanagement-the Vice President boldly declared that
he was recommending the privatization of Elk Hills, a 47,000-acre
oil-rich land in Southern California. Since 1912 it had been in the
possession of the U.S. Navy as an emergency oil reserve. The oil
companies salivated and made their bids. In October 1997 the Energy
Dept. announced that the U.S. government would sell its stake in Elk
Hills to Occidental Petroleum for $3.65 billion. Overnight,
Occidental's U.S. oil reserves tripled. Occidental's stock surged and
its stockholders glowed. One of them was the Vice President's father,
Al Gore Sr. He owned more than $500,000 worth of Occidental stock. A
clear conflict of interest? Not to the airheads in the media. Neither
then nor any time since have they evinced the slightest curiosity
about this deal. Or indeed about the Gore family's long and intimate
connection with Occidental and, in particular, with its longtime
chairman, the shady and sinister Armand Hammer.
Hammer devoted his life to negotiating business deals with the former
Soviet Union. Following the 1917 revolution Hammer set up a bank in
New York to channel hard currency from Russian emigres into the hands
of the Bolshevik government. He also received money from the
Bolsheviks that he distributed to spies and underground agents here.
In later years he ran a pencil factory in the Soviet Union, the only
Western capitalist permitted to operate in Stalin's Russia. In the
1930s, as the Soviet regime's need for hard currency grew ever more
desperate, he was assigned the task of selling off Russian art in the
West and remitting the proceeds. A lot of this art had been stolen by
the Bolsheviks from its "capitalist" owners. A lot of it was junk. And
a lot of it was forged. In return for the money, the Soviets sent him
oak staves from which he would build beer barrels.
None of Hammer's enterprises made much money He was continuously on
the verge of bankruptcy until the 1960s, when by extraordinary
persistence-and a lot of bribery-his company, Occidental Petroleum,
won a lucrative oil concession in Libya. At last, he had serious money
to play with.
Hammer could not have prospered during the Red Scare, the Cold War and
the McCarthy era had he not had powerful friends. It was no easy feat
to persuade the world that he was no red-just a businessman trying to
make a buck. One man who was very helpful to him in this regard was
Sen. Albert Gore Sr. In 1950 Hammer had taken Congressman Gore on as a
partner in his cattle-breeding business. He also sent him annual
Christmas gifts of antique silver. And Gore repaid Hammer in kind. In
the late 1950s he introduced him to Sen. John F. Kennedy. After the
1960 election Gore proposed to Kennedy that he use Hammer as his
personal envoy in any future Berlin crises. While Hammer did not get
the Berlin assignment, Kennedy did have an important mission for him.
The President had been informed that Soviet crabmeat was produced by
slave labor. Gore suggested that he send Hammer to investigate. Hammer
returned to announce triumphantly that there was no truth to the rumor
about slave labor. With great fanfare the U.S. government lifted the
ban on Soviet crabmeat.
Using the money pouring in from Libya Hammer bought the Island Creek
Coal Co., the nation's third largest coal producer. Following Gore's
1970 electoral defeat, Hammer appointed him chairman of Island Creek
as well as executive VP of Occidental. Gore's took home a handsome
$500,000 annually. By 1992 Gore owned Occidental stock worth $680,000.
By now Hammer was, not surprisingly, cultivating the ambitious young
Gore. In the 1960s, Gore Sr. informed Hammer that zinc ore had been
discovered near his farm in Tennessee. Hammer bought the land for
$160,000. He then promptly sold it back to him. Occidental then began
payments of $20,000 a year for the right to mine it. Gore Sr. then
sold the land to Gore Jr. for $140,000. According to the Center for
Public Integrity, Gore Jr. has been receiving $20,000 a year from
Occidental ever since. Interestingly, Occidental never did mine the
land. In 1985, Gore leased the land to Occidental-competitor Union
Zinc-clearly a sweetheart deal between Hammer and the Gore family.
Today, Gore Jr. is executor of his father's estate, which holds
$500,000 worth of Occidental stock. In other words, the Vice President
himself controls $500,000 worth of Occidental stock. Not surprisingly,
Occidental has been extremely helpful to Clinton and Gore. Occidental
gave $50,000 to the Clinton's 1996 reelection campaign. Since 1992
Occidental has given more than $470,000 in soft money to the
Democratic Party. According to the Center for Public Integrity, two
days after Ray Irani, Armand Hammer's successor as chairman, slept in
the Lincoln Bedroom, Occidental forked over $100,000 to the DNC.
Gore is famous for his tedious expostulations about the consequences
for the Earth's temperature of burning oil and coal. Yet when it comes
to his own stock holdings the environment can take a running jump. In
a few months Occidental is due to start drilling for oil in the Samore
field in Colombia. Standing in Occidental's way are the U'wa people, a
remote Colombian Indian tribe inhabiting the country's rainforests in
the northeast, who do not want to leave their ancestral land. They
promise to walk off a 1400-foot cliff in the Andes if Occidental
begins drilling for oil. Predictably, Gore has said nothing. He has
not protested Occidental's mining decision, or threatened to dispose
of his stock or rallied fellow stockholders on behalf of the U'wa.
There is one thing the Clinton administration has done. It proposed
recently to step up aid to the Colombian military to the tune of $1.3
billion. Ostensibly the money is to fight the "drug lords." In
reality, it is to make sure that Al Gore's oil wells and pipelines are
firmly protected.