|The son of a doctor, Hammer had made his first $1,000,000
through his enterprising ventures in his father’s pharmaceutical
company before receiving a medical degree from Columbia University
in 1921. Journeying to Soviet Russia in 1921 to give medical aid to
that country’s famine victims, he was personally persuaded by
Vladimir Lenin to turn his business talents to account there
instead. In 1925 he obtained a concession from the Bolsheviks to
manufacture pencils for the Soviet Union, and his firm soon became
the largest supplier of cheap, reliable pencils in the country. His
business ventures were bought out by the Soviets in the late 1920s,
and Hammer returned to the United States in 1930 laden with
innumerable paintings, jewelry pieces, and other art objects
formerly owned by the Romanov imperial family and sold to him by the
cash-hungry Soviets. In the 1930s Hammer sold the majority of these
valuables and embarked on such profitable post-Prohibition business
ventures as whiskey making and the manufacture of whiskey barrels,
as well as cattle raising.
Tiring of his hectic business life-style, Hammer retired in 1956 but was approached that year by a friend who suggested that he finance two wildcat oil wells being drilled in Bakersfield, Calif., by the near-bankrupt Occidental Petroleum Corporation. Hammer financed the wells, which unexpectedly struck oil, and he quickly increased his holdings in Occidental, becoming the firm’s chief executive officer and chairman of the board in 1957. By the mid-1960s, under Hammer’s management, Occidental’s gross annual income was more than $650,000,000, and profitable oil ventures in Libya (which were later nationalized) and diversifications into chemical manufacturing had boosted Occidental’s gross income to more than $2,000,000,000 by 1970. Because of his longtime trade and personal contacts with the Soviets, Hammer and his firm were among the principal participants in the broadening of U.S.-Soviet trade ties that accompanied the era of detente in the 1970s. He was also a prominent art collector, and he founded the Armand Hammer Museum of Art and Cultural Center in Los Angeles in 1990 to house the bulk of his collection.
May 21, 1898
New York City, New York
December 10, 1990 (aged 92)
Los Angeles, California
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https://www.britannica.com/biography/Armand-Hammer THE RIDDLE OF ARMAND HAMMER
Nov. 29, 1981
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Edward Jay Epstein is a freelance writer. His most recent book, ''The Diamond Invention,'' an examination of the international diamond cartel, will be published by Simon and Shuster this spring. By Edward Jay Epstein In Moscow, on May 27, l922, Vladimir Lenin, the ailing leader of the Russian Revolution, sent an urgent and secret message to Joseph Stalin, the newly appointed General Secretary of the Communist Party, instructing him and the Politburo to give their ''particular support'' to a young American and his trading venture. Lenin explained: ''This is a small path to the American 'business' world and this path should be made use of in every way.'' The American was a 24-year-old graduate of the College of Physicians and Surgeons of Columbia University.
In Los Angeles, on Aug. 31, l981, more than a thousand leading businessmen and politicians gathered at the Century Plaza Hotel for the presentation of the annual Armand Hammer Businessman of the Year Award. Bob Hope introduced Armand Hammer, now 83, as the ''epitome of success'' of American capitalism. He lauded him as ''an industrialist, an art collector, a diplomat and a philanthropist,'' all titles to which Hammer can lay indisputable claim. He is the head of Occidental Petroleum, the largest independent oil company in the world and itself the owner of giant subsidiary companies in such vital areas as food production and chemicals. Dr. Hammer, as he prefers to be called (in deference to the medical degree he has never used), also happens to be the owner of the Hammer and Knoedler Galleries, among the leading art dealers in America, and he is the chairman of the Armand Hammer Foundation, which donates millions of dollars every year to charitable causes.
But the most remarkable thing about Armand Hammer is that he created this personal empire largely by negotiating extraordinary deals with nations that have usually been hostile to the United States - and even more hostile to American capitalists. The son of one of the founders of the American Communist Labor Party, Hammer became a multimillionaire capitalist, thanks in large measure to his relations with the leaders of the Soviet Union. He has maintained cordial relations with Soviet leaders for more than half a century, providing Moscow with a vital link to Western industry and technology. (Six years ago Soviet leader Leonid I. Brezhnev gave Hammer a luxurious Moscow apartment, and Kremlin officials have proposed that he be named United States ambassador to the Soviet Union. Such recommendations have made some members of the Reagan Administration uneasy. Says one member of the President's inner circle, who asked not to be identified by name, ''We simply don't know which side of the fence Hammer is on.'')
Hammer also happens to be Jewish (by background if not belief), yet Libyan strongman Col. Muammar el-Qaddafi has made him a major beneficiary of Libya's oil wealth. In the early l970's, Hammer negotiated an accommodation with Qaddafi that had the eventual effect of contributing to the growth and power of OPEC and which radically changed the oil business around the world. (Even though both Mobil and Exxon announced decisions to suspend production in Libya earlier this month, Occidental, the main channel of Libyan oil, declared its intention to continue production as usual.)
And although Hammer is a Democrat, he pleaded guilty and received a suspended sentence for providing secret and illegal campaign funds to then-President Richard M. Nixon in l972. It is not a simple matter to understand the convictions and motivations that underlie these apparent contradictions. Hammer's skills as an international wheeler-dealer, on the other hand, are much less difficult to document. For example, on April 26, 1981 - the day after President Ronald Reagan reopened the door to trade with the Soviet Union by ending the embargo imposed in l979 as a retaliation for the Soviet invasion of Afghanistan - Armand Hammer entered the Soviet Union aboard OXY 1, his private Boeing 727, one of the very few private aircraft permitted to fly in Soviet airspace. He had already dictated a letter to Ronald Reagan commending the President on his ''courageous decision'' and suggesting that renewed East-West trade was in the interest of the United States. Not incidently, perhaps, it was also in Hammer's interest. His company was committed to ship a million tons of concentrated phosphoric acid to the Soviet Union annually for the next 20 years. This would provide Soviet agriculture with the liquid fertilizers that it desperately needs to improve crop yields. The deal, which Hammer reckoned to be worth no less than $20 billion, had been nearly wrecked by the American embargo. Dr. Hammer was now flying to Moscow to get it moving again.
The OXY 1 has been specially designed for such intercontinental flights. Additional fuel tanks give the jet a nonstop range of up to 5,000 miles, and sophisticated telecommunications equipment allow Hammer to telephone almost anywhere in the world while en route. The 100-foot-long cabin has been reconfigured into a personal salon equipped with such small luxuries as a Betamax video recorder and a videotape library of Chaplin films. There is even a guest room, further foward.
On this flight, Hammer invited along as his guest David Murdoch, a Los Angeles financier who owned the largest interest in Iowa Beef Processors, the biggest and most advanced beef-packer in the world. Murdoch was also an avid collector of Arabian horses. At a dinner in Los Angeles earlier this year, he had casually mentioned to Hammer that the Russians had bred one of the finest lines of Arabian horses in the world, including the stallion Pesniar. To Murdoch's amazement, Hammer then offered to arrange for him to buy this prized stallion in the Soviet Union. Through Hammer's connections, Murdoch would fly from Moscow to the Tersk Breeding Farm at Piatigorsk, near the Black Sea, to make an offer for the horse.
When the OXY 1 landed that evening at Sheremetyevo Airport outside Moscow, it taxied directly to the new terminal building where two Soviet protocol officers were waiting. Unlike other American visitors, Armand Hammer was not required to go through the usual customs and passport controls. Instead, he and his guests were whisked into a V.I.P. lounge where they could relax while their luggage was loaded into waiting Chaika limousines. Hammer was then driven directly to his apartment, which is within walking distance of the Kremlin, and where his Russian maid greeted him. The apartment is decorated with masterpieces of Russian art which Hammer has specified in his will are to be given to the Soviet Union upon his death.
During the next few days, Hammer had a series of meetings and dinners with Soviet ministers and trade officials. Aside from the multibillion-dollar phosphoric acid deal, his company is in-volved in a multitude of other enter-prises in the Soviet Union ranging from selling petrochemicals to building an international trade center.
In between meetings, Hammer asked his personal assistant, James Pugash, to begin gathering information on the stock price of Murdoch's beef-packing company. It was only then that his assistant realized that Hammer's interest in Murdoch went beyond helping him buy a Russian horse.
By the time Hammer returned home to Los Angeles the following week he had already broached the possibility to Murdoch of Occidental Petroleum buying Iowa Beef. Several weeks later, Hammer purchased Iowa Beef for more than $800 million in Occidental stock. When he returned to Moscow a month later, he not only arranged to buy the stallion Pesniar for Murdoch, Occidental and a third buyer (for $1 million), but he also offered Deputy Prime Minister Leonid Kostandov a plan to help solve the Soviet Union's chronic meat shortage. With Iowa Beef, he could replicate its highly advanced meat packing factories in the Soviet Union, and sell directly to the Soviet Government large quantities of American boxed beef.
Hammer, it seemed, had provided everyone concerned with what he wanted. David Murdoch got his Russian-bred horse (Occidental, however, retained partial ownership in the animal which Murdoch says is worth ''at least $15 million'' in this country for breeding purposes) and hundreds of millions of dollars in stock; Iowa Beef's other shareholders received a lucrative premium for their stock; Occidental Petroleum acquired America's largest meatpacker, and the Soviet Union had a new source of beef.
In both style and substance, it was the kind of maneuvering for which Hammer has become famous. When he took over Occidental Petroleum 25 years ago, it was little more than a corporate shell with three employees and a net worth of only $34,000. He was then nearly 60 and he had had no experience in the oil business. Less than 10 years later, Occidental had a market value in excess of $100,000,000. By the beginning of 1981, with sales of over $12 billion, the corporation ranked in the Fortune 500 as the 20th largest industrial company in the United States. And with added revenues from Iowa Beef, Occidental should be in the top 15 before the current year is out. How did Hammer do it? Earlier this year, I traveled more than 10,000 miles with Dr. Hammer in North America and Europe. During this period, he flew over 100,000 miles in the OXY 1 and met with an international Who's Who of presidents, princes and dictators.
In Ottawa, he went to the gala that Premier Trudeau gave in honor of President Reagan. In Peking, Hammer had a private audience with China's strongman, Deputy Prime Minister Deng Xaioping, in the Great Hall. Afterwards, at a lavish banquet he gave for over 100 Chinese officials, he discussed his plan for developing Chinese oil and coal resources. In Brasilia, he met with President Joao Baptista Figueiredo, and talked about the possibility of building a natural gas pipeline from Occidental's fields in Bolivia to Brazil. In London, he presented a book illustrated by Leonardo da Vinci (and renamed the Codex Hammer) to the Royal Academy of Arts for an exhibition. In Washington, he went to numerous receptions for visiting world leaders, and lunched with at least 15 Senators.
Throughout this global odyssey, it quickly became clear how in all his dealings, commerce, diplomacy, politics, philanthropy, friendship and his own self-interest interweave in complex patterns. A vivid illustration is his recent personal peace initiative in Afghanistan. The idea, which he claims had been suggested to him by Edward Gierek, then the head of the Communist Party of Poland, was for the Soviet Union to begin a phased withdrawal of its troops from Afghanistan in return for which Pakistan and the United States would agree to stop aiding the anti-Soviet rebels in Afghanistan.
In Moscow, Hammer arranged a private meeting with Brezhnev. Brezhnev explained, according to Hammer's recollection, that it was ''utter nonsense'' that the Soviet Union had any strategic designs on the Persian Gulf region, and that he would order the withdrawal of some Soviet units in Afghanistan as soon as the arms traffic across the Pakistan border to Afghan rebels was ended.
Hammer, taking Brezhnev at his word, next flew to Karachi to meet with General Mohammad Zia ul-Haq, the President of Pakistan who had been up to this moment the main supporter of the rebels in Afghanistan. During these meetings, he suggested that Occidental Petroleum could redrill shallow offshore oil fields in the hope of striking a bonanza, and also build a new oil refinery in Pakistan. Gen. Zia showed considerable interest in the idea but he was reluctant to commit himself on Afghanistan.
Hammer was not prepared to give up. He went to Senator Charles Percy, the chairman of the Senate Foreign Relations Committee and a personal friend; to Secretary of State Alexander Haig; to Lord Carrington, the British Foreign Secretary, and finally to Kurt Waldheim, the Secretary General of the United Nations. While he was proceeding with this approach he received word that President Reagan was about to end the Soviet embargo for entirely unrelated reasons. Only then did Hammer stop pressing his peace initiative. And in that light it perhaps becomes clear where his highest priorities lie.
In person, Armand Hammer is a modest and affable man, who far more closely resembles a country doctor than a corporate magnate. He peers at the world through thick Magoo-like glasses and is slightly hard of hearing. He lives in a comfortable but not ostentatious home in Westwood in Los Angeles. His third wife, Frances, is his constant companion, traveling with him in the OXY 1.
Hammer is not without a sense of humor about himself. For instance, when he heard that Marlon Brando had modeled the role of an unscrupulous oil millionaire in the film ''The Formula'' on him, and that he was paid a quarter of a million dollars a day, Hammer quipped, ''For that kind of money I would have played the part myself.''
In my presence at least, Dr. Hammer was almost always patient, polite and generous in dealing with his associates and other businessmen. But Occidental executives often see the iron hand of ''The Doctor,'' as he is called in the office. For example, for a number of years Hammer insisted that each of the directors of his corporation give him their signed but undated letters of resignation. With these in his pocket, Hammer could dismiss anyone at a moment's notice. He explains that his motivation was simply to assure that none of his directors had any ''conflict of interest.''
Occidental has had three different presidents in the last three years. Hammer's one-man control of Occidental has, he explained, allowed him to make instant and advantageous decisions in the competitive world of oil concessions. It has also permitted him to resort to some unconventional tactics. For example, to get an oil concession in the Persian Gulf from an Emirate Sheik, he personally delivered to him $1,671,000 in cash in a suitcase in a London hotel room. (Another $200,000 was deposited in a Swiss bank.) Hammer says that the payment was a legitimate part of the contractual arrangement with the Sheikdom of Umm-al-Qaywayn: The Sheik, named Sultan al Mu'Alla, was the son of the ruler and authorized to receive the payment on the part of the nation.
In Venezuela, Hammer gave the President of that nation a valuable bronze statue of Simon Bolivar from the Hammer Galleries. He later characterized the gift as just a ''token.''
In Libya, Hammer arranged for Occidental to pay for the college tuition and expenses of Libyans whose parents held influential positions in the Government. Hammer explains that these students were chosen by the Libyan Government and that these unusual arrangements engender ''local good will.'' A Source Memorandum prepared by a special committee of the Occidental board discloses many unorthodox arrangements that Hammer has made to gain advantage for Occidental in the rivalry for oil properties. They range from paying a Nigerian Consul General $295,000 through an intermediary in Liechtenstein to transferring some $3 million to a Bahamian shell corporation, called Noark International, which allegedly used the funds to bribe Venezuelan officials. Hammer characterized these charges by his own committee as ''unproven allegations.'' He points out that an oil company is often obliged to pay intermediaries in underdeveloped countries, and it cannot then prevent them from using these fees to bribe government officials.
To maintain his international network of influence, Dr. Hammer also depends heavily on his Washington connection. He claims to have known every President since Herbert Hoover. To assure himself access to the White House and Congress, he retains a powerful corps of men in Washington and other cities, almost all of whom formerly served as Government officials. This contingent includes William F. McSweeny, a former high-level aide in the Johnson Administration; Jerrold L. Schecter, the former spokesman for the National Security Council in the Carter Administration; Rear Adm. Tazewell T. Shepard Jr., a former aide in the Kennedy Administration; Gorden Reece, formerly public relations adviser to Margaret Thatcher, and Jack King, a former spokesman for the National Aeronautics and Space Administration.
Still, Hammer, and his public affairs staff, have found his access to the Reagan Administration progressively stifled. Hammer continues to write letters to the President. So far, however, the responses have been cool. He particularly blames Richard V. Allen, the President's National Security Adviser, for ''blocking him.''
Allen acknowledges that he has made efforts to limit Hammer's access to the President, explaining that he is concerned about ''the funny company'' that Hammer keeps. It is understandable that Hammer's longtime association with Soviet leaders raises some questions about the nature of his international activities: Does Hammer merely take advantage of his contacts with the the Russians to advance his business interests? Or does Hammer take advantage of his business contacts to serve Moscow's interests? That may not be possible to know. But to find clues one must go back to a series of events that occured just after the Russian Revolution.
Hammer claims that his Soviet connection grew out of his philanthrophic intentions and a series of innocent accidents. He recounts that after he graduated from medical school in 1921, he heard about a typhus epidemic sweeping the Soviet Union. Since he was interested in bacteriology, and he had a six-month hiatus before his internship was scheduled to begin, he decided to go to Russia to study and assist in the control of the epidemic. When he saw the extent of the famine, he offered to buy wheat for the Soviet Government. He says that Lenin, hearing of his offer, invited him to the Kremlin, and told him: ''We do not need doctors, we need businessmen ...Communism is not working and we must change to a New Economic Policy.'' Then, according to Hammer, Lenin offered him a concession for mining asbestos in the Urals and another for organizing Soviet foreign trade - the first foreign concessions ever in the Soviet Union.
The story behind Hammer's concessions, however, involves considerably more intrigue than that, according to recently declassified State Department and Army intelligence files at the National Archives. Those files suggest that the Soviet arrangement actually began with Hammer's father, Julius Hammer, an immigrant from Russia, who was a dedicated supporter of Lenin and the Communist Party. Indeed, according to one account, Julius named Armand after the arm-and-hammer symbol of the Socialist Labor Party. Julius Hammer, also a doctor by training, had built a prosperous business in New York, selling shampoos, medicinal alcohols and pharmaceutical drugs. Julius Hammer also became a financial supporter of radical causes, and it was in this capacity that he established his connections with the Soviet Union.
After Lenin seized power in 1917, Washington not only refused to recognize his Government (it did not relent until 1933) but it also effectively cut off Moscow's access to all its gold and currency reserves in the United States. The net effect was that the Soviet Government could not buy the supplies it desperately needed to retain power. To remedy the situation, Lenin appointed a German-Russian engineer named Ludwig C.A.K. Martens as his ''ambassador'' to the United States with the mission of organizing shipments of supplies to the Soviet Union. Since Martens could not get control of the Russian funds immediately, he turned to Julius Hammer for interim financing.
Hammer paid the rent and other expenses of Martens's unofficial ''Soviet Bureau'' in New York. Hammer was officially appointed ''commercial attache'' of the Soviet Bureau, and also was given an exclusive license for Russian trade with the United States. By 1918, the Soviet Union was financing the ''Soviet Bureau'' by smuggling diamonds into New York. Julius Hammer was responsible for converting these diamonds into cash to finance the purchase of Soviet supplies, according to the autobiography of one of Julius Hammer's fellow party members. Armand Hammer denies this. In any case, the Hammer family soon moved from their modest home in the Bronx to luxurious quarters in the Hotel Ansonia in Manhattan, and Julius Hammer noticeably improved his style of living.
Julius Hammer organized and held equity in a corporation originally called the Allied Drug and Chemical Company, and which later evolved into the Allied American Corporation. This company provided the Soviet Bureau with a convenient channel for shipping medical and other supplies to Baltic ports, from where they were reshipped into Russia. According to someone employed by the Hammer family who acted as an informant for the Justice Department, the corporation was 50 percent owned by Martens, presumably on behalf of the Soviet Government. On the basis of such information, the Department of Justice and other Federal intelligence agencies kept the entire operation under close surveillance, even attempting to infiltrate it.
Finally, in 1921, the Government deported Martens and closed his bureau. At about the same time, Julius Hammer was arrested, tried, convicted and sentenced to three years in prison for performing an illegal abortion that resulted in the death of the wife of a Russian diplomat. Armand Hammer believed, and still believes, that his father was ''railroaded'' on ''trumped-up charges'' because of his political activities. He denies the allegations that his father's corporation was owned by the Soviet Government or Martens. And he also insists that he bought all the shares in the corporation himself before he left for the Soviet Union in the summer of 1921.
With Julius Hammer in prison and Martens back in the Soviet Union, Armand Hammer had little choice but to take over the business. He acknowledges that he intended to collect some of the debts that the Russian Government owed his family business, and on his passport application he listed his reason for travel as ''commercial business and pleasure.''
In Moscow, Hammer met with Martens, who had been appointed to the Supreme Economic Council, to discuss the resumption of shipments through his corporation. Martens brought Hammer to see Boris Reinstein, who was then in charge of organizing the Department of International Propaganda. Reinstein, who was working on a new political initiative to attract foreign capital to the Soviet Union, accompanied Hammer to Lenin's office in the Kremlin.
When asked about Reinstein's interest in him, Hammer said that he merely brought Reinstein along to see Lenin as a ''translator.'' But it is known that Lenin spoke fluent English. And Lenin's papers indicate that Reinstein played a crucial role in getting Hammer his concessions.
Lenin realized that the Soviet Union desperately needed Western technology, and he saw concessions as a temporary expedient towards this end. He wrote in a secret message to the Communist Party: ''Concessions, these do not mean peace with capitalism, but war on a new plane.'' To carry out his new economic policy, Lenin now needed a capitalist who would accept a Soviet concession and advertise it in the United States. Hammer seemed a likely candidate.
In October 1921, Lenin wrote Martens, instructing him to give Hammer a contract for some kind of concession ''even if a fictitious one, of asbestos or any other Ural valuables or whatever you will. What we want to show and have in print ... is that the Americans have gone in for concessions. This is important politically.'' He further instructed Martens to get maximum publicity for the concession.
Several months later, after the concession was officially granted - and publicized in the United States -Lenin wrote his secret missive to Stalin and the Politburo, explaining that the Hammer enterprise was a ''path'' to American business that was to be used ''in every way.'' Lenin, who was paralyzed by a nearly fatal stroke the day after sending the communique, never clarified the idea further.
Hammer's ''concessions'' included not only the asbestos mine but also the extraordinary right to act as agent for Soviet trade with the United States. To develop this latter ''concession,'' Hammer traveled throughout the United States attempting to persuade American companies to invest capital and transfer technology to the Soviet Union. He was joined in this enterprise by his father, who was paroled from Sing Sing prison in 1923, and also by his brother Harry Hammer. By 1925, he succeeded in recruiting no fewer than 38 corporations that supplied Russia with everything from machinery to agricultural equipment. Hammer also became the agent for the Ford Motor Company's Fordson tractors in the Soviet Union, and even arranged for Russian engineers to come to the United States to study Ford's techniques of mass production.
Aside from business trips to the United States, Hammer resided in the Soviet Union for the better part of a decade. He moved into a palatial home called Brown House in the center of Moscow, and married a Russian singer named Olga Vadina, who was one of the leading entertainers in the capital. In 1928, she bore him a son, Julian. At about this same time he was joined in Moscow by his father. And both his older brother, Harry, and his younger brother, Victor, also stayed with him from time to time. (Many members of his family have continued to work for him ever since.)
Hammer's Allied American Corporation was no ordinary company in Moscow. When Lenin's New Economic Policy ended about 1925, and virtually every other foreign concession was nationalized without compensation, Allied American received a lucrative Soviet pencilmanufacturing concession. This raised questions about the Soviet role in Hammer's business. Hammer insists he was the sole owner of Allied American and he asserts: ''I made all the decisions and the Soviet Government had nothing to do with the running of the business.'' According to documents submitted in a tax suit by Allied American Corporation, however, it was acknowledged that the Soviet Government, through its Commissariat of Foreign Trade, did, in fact, select and appoint two directors of Allied American ''with powers equal to other directors in carrying out the contract,'' and that it had the absolute right to establish the price of its exports. Moreover, the agreement provided for a division of profits between the Soviet Government and the Allied American Corporation. These documents suggest that the Soviet Government had considerably more influence in the operations of Allied American than Hammer recollects.
British Intelligence also became intrigued with the operation of Allied American after a raid on Soviet House in London in 1927. A State Department intelligence report later noted, ''Dr. Julius Hammer was prohibited entry into the United Kingdom as a political agent and (as) the controlling personage of the Allied American Corporation which was used as a cover for the transmission of Soviet funds to American revolutionary organizations.''
Whatever the case, Hammer received extraordinary treatment from Moscow in many ways. He was permitted by the Soviet Government to take millions of dollars worth of czarist art out of the country when he returned to the United States in 1932. Apparently, many of these objects came out of Soviet museums and warehouses. Robert C. Williams, a historian at Washington University and the author of the book ''Russian Art and American Money,'' tracked down a number of the pieces, and found that they still had museum labels and numbers on them. When asked about this, Hammer explained to me that although the core of the treasure was art he had personally acquired and hung in his Moscow house, the Soviet Government had also allowed him to buy surplus museum art for which he had to pay a 15 percent export tax.
However he obtained and exported this art, Hammer sold it in the United States both through department stores and his Hammer Galleries. And for more than a decade, Hammer continued importing art from the Soviet Union. He estimated that the art treasures brought him a profit of over $11 million in the midst of the Depression.
The final disposition of the proceeds from this multimilliondollar sale remains elusive. But it is known that he invested part of it in a beer barrel factory that imported all its wood from the Soviet Union through a contract with Amtorg, the Soviet trading company that had succeeded Hammer's company.
Hammer's return to New York from Moscow affected his personal as well as his business life. He separated from his wife, Olga, who moved to Hollywood to reconstruct her singing career and took with her their young son. He eventually married Angela Zevely, a socially prominent woman from Red Bank, N.J. Hammer also changed from the beer-barrel business to the whisky business, buying a major share of a company that was eventually called United Distillers of America, Inc. Then, in the mid-1940's, he settled down to the gentlemanly pursuit of breeding prize-winning Black Angus bulls on Shadow Isle, his wife's farm in New Jersey.
His second marriage proved far from idyllic, however, and in 1953, he filed suit for divorce, charging his wife with mental cruelty. Mrs. Hammer offered a few critical comments of her own. She said that her husband had a ''cold and calculating brain'' and that it ''causes him no pain to see the sufferings of others. In many conversations...my husband would boast about the way he handled people and organizations who sought in any way to block him in his desires.''
In 1955, Hammer decided to start life anew. Selling his herd of Black Angus cattle and his whisky business, he moved to Los Angeles, where he married for a third time, to Frances Tolman. The following year, Hammer, along with his new wife and a few friends, arranged to take over a nearly defunct oil company selling for 18 cents a share. That company was Occidental Petroleum.
In l961, Armand Hammer returned to Russia as an unofficial trade emissary. Hammer found the United States Embassy in Moscow less than helpful. Junior aides treated his mission as nothing more than a political lark. They were more than a little startled when Soviet leader Nikita Khrushchev himself requested a meeting with Hammer in the Kremlin; Khrushchev had avoided almost any high-level contacts with American officials since he had canceled the summit meeting with President Dwight D. Eisenhower in 1960. When Hammer arrived at his office, Khrushchev dismissed the translators, and both men talked in Russian. The Russian leader made a strong case for United States credits, arguing that Soviet orders for American goods could relieve unempoyment in the United States. ''If you give us credit ... you will keep your plants busy.'' Hammers recalls Khrushchev telling him.
Khrushchev also told Hammer that the Soviet Union needed billions of dollars worth of phosphorus-based fertilizers for its agriculture. Hammer saw the possibility of using his fledgling oil company as a vehicle for organizing a multibillion-dollar trade in fertilizers with the Soviet Union.
When Hammer returned to the United States, he began buying up the components necessary for a fertilizer business. He bought Interore (International Ore and Fertilizer Corporation), then the largest fertilizer trading company in the United States; Best Fertilizer, a producer of ammonia, and the Jefferson Lake Sulphur Company. Next, he acquired vast tracts of phosphate deposits in north Florida. By 1963, Occidental Petroleum had become primarily a fertilizer company, with oil and gas accounting for less than 10 percent of its income. But the success of the phosphate deal would ultimately depend on the Soviet Union receiving American bank credits to enable it to buy the fertilizers, and these were not forthcoming from the Kennedy Administration. When the Cuban missile crisis further complicated United States-Soviet relations, Hammer turned to Britain for the necessary financial credits. But when Khrushchev fell from power in 1964, the fertilizer deal had to be put, temporarily at least, into abeyance.
Not long afterward, Dr. Hammer found another opportunity that would prove even more lucrative. The notoriously corrupt Libyan government of King Idris was seeking independent oil companies to bid for oil concessions that were adjacent to the concessions held by the oil giants. Hammer bid on the concessions - and won them.
The flow of Libyan oil that Occidental began extracting soon reached almost 500,000 barrels a day, and turned Occidental into a multibillion-dollar company. When Col. Qaddafi overthrew the Idris monarchy in 1969, he immediately confronted the 21 oil companies in Libya and told them he wanted to increase his nation's share of the oil to 51 percent. Up to this point, all the oil companies had acted in unison in refusing to permit any nation to raise its share above 49 percent. This time, however, Qaddafi applied pressure against Occidental, which depended almost entirely on Libya for its supply of oil. Dr. Hammer says he approached Kenneth Jamieson, the chief executive of Exxon, and offered to stand fast against Qaddafi if, and only if, Exxon would provide it with 500,000 barrels of oil a day at close to cost. According to Hammer, it was only when Jamieson refused this demand that he flew to Tripoli, and came to terms with Qaddafi.
The common front was now irreparably breached, and other oil companies in Libya had little choice but to accede to Qaddafi's demands. By breaking ranks with the oil giants in Libya, Hammer had effectively changed the rules of the game for oil companies in the Middle East. Oil companies could now be played off against one another. Under these new conditions, the rise of OPEC was greatly accelerated.
The Central Intelligence Agency counterintelligence staff became concerned with these negotiations when routine interceptions of the secret communications between Moscow and the Soviet Embassy in Tripoli suddenly showed a quantum leap in volume that coincided with turns in the oil negotiations. While American cryptoanalysts at the National Security Agency could ''count'' the messages being transmitted, they could not crack the code itself, and therefore the content of this spurt in volume remained conjectural. Hammer himself denies that the Soviet Union had intervened on his behalf in the negotiations, recalling that to the best of his knowledge ''this was purely a Libyan affair.''
Whatever the case, as a result of these negotiations, Occidental became the major beneficiary of Libyan oil. Hammer's company built its own pipeline to the Mediterranean, and bought a refinery, tankers and a distribution system in Europe. With the enormous cash flow from Libya, Hammer began to buy other properties around the world.
In Peru, following the l968 takeover by a revolutionary junta, Hammer again fished in troubled waters, accepting a concession in the Amazon Basin. He further assisted the new Government by depositing $25 million of Occidental funds in Peruvian banks. Then, in the British North Sea, Hammer bought major shares in the Piper and Claymore fields which eventually proved to be rich in oil. And, in the United States, he bought Island Creek Coal, the country's fourth largest coal producer, and made arrangements to barter coal for chemicals with Rumania, Italy and other countries.
In 1968, Hammer also bought Hooker Chemical Company (the corporation that 11 years later was to become embroiled in multimillion-dollar lawsuits as a result of its dumping of toxic wastes into the Love Canal in upstate New York.)
In April 1973, after 12 years of efforts, Hammer finally reached a definitive $20 billion agreement with the Russians for his fertilizers. In return, the Soviet Union would supply Occidental with a million metric tons of ammonia, potash and urea per year which it would sell through its Hooker Chemical subsidiary. And with its Libyan oil money, Occidental no longer needed American bank credits to finance the deal.
Even though the United States Department of Mines objected that the massive transfer of Florida phosphates to the Soviet Union would deplete American reserves, President Nixon wrote a letter to William Casey, then the head of the Export-Import Bank, in which he strongly recommended granting the Soviet Union a low-interest loan of $180 million to build the plants and pipelines it needed for the Hammer enterprise. Nixon declared that the loan would be in the ''national interest,'' and it was therefore approved by Casey. (Hammer had indeed personally briefed Nixon on the status of his deal, adding, according to the White House tapes, ''I am glad to tell you that I am a member of the $100,000 Club,'' - referring to his illegal cash contribution to the Nixon campaign.)
Soon afterward, Hammer announced a bewildering array of other East-West deals. These included a $4 billion pipeline through Siberia that would supply Japan with Russian gas, the sale to Moscow of enough metal-finishing machines to build an industry, the construction of hotels and inns in Eastern Europe, the minting of coins for the Olympics, and arrangements to barter coal to Rumania. What Lenin had described a half century earlier as a ''small path'' to American business had now expanded into a superhighway.
Leonid Brezhnev has publicly recognized Hammer's role in facilitating East-West trade. Standing next to Hammer on an NBC television program filmed in Moscow in l974, the Soviet leader said: ''Armand Hammer has expended considerable effort. I help him, he helps me. It is mutual. We do not discuss secrets -just business.''
Hammer's business has indeed been of great value to the Soviet Union, as it has been to Libya and its dictator Muammar el-Qaddafi. In return, Hammer has reaped handsome rewards. Has the United States benefitted as well? That question is more difficult to answer conclusively.
Today, there is a heated debate within the Reagan Administration on the merits of East-West trade. ''Trade is part of the dialogue between the United States and Russia and it is crucial that we keep this dialogue going,'' Hammer says. ''The Soviet leadership is gradually coming to see trade, rather than confrontation with the West, as the way to improve economic conditions. If we are going to have peace, we should encourage the Soviet leadership in this direction.'' And Hammer adds: ''In any event, if the United States refuses to sell the Soviet Union the products it needs, other countries will.''
Hammer's critics might recall Lenin's dictum that when it comes time to hang the capitalists, the capitalists themselves will compete to sell the rope. Former American Ambassador to Moscow Malcolm Toon says: ''I'm uneasy about Hammer's close relations with the Soviet leadership. I'm not suggesting any sinister KGB connection - Hammer is probably far too valuable as an organizer of Soviet trade for him to be used by the Soviets for any other purpose.''
Or his critics might simply point out how convenient it is that Hammer's convictions on world peace and international relations always neatly coincide with his self-interest. Fair or not, such criticism is to be expected.
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Armand Hammer was an American business manager and owner, most
closely associated with Occidental Petroleum, a company he ran from
1957 until his death. He was known as well for his art collection
and his close ties to the Soviet Union. Wikipedia