Gore's Oil
by George Szamuely
New York Press

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.


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