BRIAN LAMB: Edward Jay Epstein, what is "Dossier" all about?

EDWARD JAY EPSTEIN: "Dossier" is the story of Armand Hammer. But rather than telling the story like a conventional biography where you start with someone's birth, I basically wanted to tell the secret history of Armand Hammer, because I believed that he presented a unique opportunity to see a man -- one, how he presents himself in the public press; and, secondly, how a number of different files about Armand Hammer -- including the KGB file, the FBI file, a file he inadvertently made himself on tape -- all give a second side to him. So I wanted to look at a man in different ways and that's why I called it "Dossier."

LAMB: Let me ask you a couple of little questions, kind of starting at the end and working back. When did he die?

EPSTEIN: He died in 1990.

LAMB: How old was he?

EPSTEIN: He was 92.

LAMB: And when he died, what was he doing?

EPSTEIN: Well...

LAMB: I don't mean specifically. But what was he doing for a living then?

EPSTEIN: Well, he was the chairman of Occidental Petroleum. He was -- it was his company, even though he only owned 1 percent of the stock. He ran it like a personal fiefdom. He was involved in a number of philanthropic causes like the war against cancer. He was building a major monument to himself called the Armand Hammer Museum in Los Angeles. He had oil concessions around the world. He was, you know, a major industrialist.

LAMB: Here's a picture in your book -- and you've got a lot of them -- but here's one of Ronald Reagan and Mrs. Reagan and Frances Hammer. Which wife was this?

EPSTEIN: She was his last wife, his third and last wife.

LAMB: What was their relationship?

EPSTEIN: Well, you know, he married her fairly late in life and she was an heiress. She had inherited a -- over $10 million, which was a lot of money back in the 1950s. And he used her money to build Occidental Petroleum, which was a Shell corporation then, into the 12th largest industrial corporation in America. So she was his financier. She was his companion. And after a while, he betrayed her, but -- with other women, I'm saying. But, you know, she was his wife up to the end.

LAMB: How long was he married to her?

EPSTEIN: Well, he was married for about 33 years. She died about two years before he died.

LAMB: Let me go to one of your last chapters, The Nobel Peace Prize. Why did he want it?

EPSTEIN: Well, you know, I think this is a story of his life, not just a question. Well, at a very early age his family was disgraced. His father -- when he was 20 years old, his father, who was helping to found the Communist Party in America, was put in prison for doing an abortion where a woman died. And the whole family was disgraced. The family lost its money. They moved into a hotel. And for the rest of his life, he wanted to reconstruct a reputation for himself as a great man. Money didn't mean that much to Hammer. Power meant something, but it was a means to the end. But the end for Hammer was honor, and a Nobel Prize. The Nobel Peace Prize, if he had achieved it, would have given him this great honor. So his entire life was really about this prize that he aimed for, which happens to be the last chapter of my book.

LAMB: We'll come back to the Nobel Peace Prize, but his father really didn't commit that abortion, did he?

EPSTEIN: I don't think he did. Hammer took a mistress called Bettye Murphy and he thought he was dying. This is, again, in the early 1950s, 1952 when Hammer's 54 years old. And he was trying to put together a story of his life with his mistress and he told his mistress that he had actually performed the abortion that day. He was in medical school and his father was busy working with the Socialist Party and this woman died of complications. And because he wasn't even a doctor -- he was a medical student -- he would have gone to prison. Well, his father, being a legitimate doctor, thought that he could get away with it because doctors who performed abortions -- if it was to save a patient's life -- were allowed to do it. And his father probably would have gotten away with it if it wasn't for his political background. So what happened was unexpectedly his father took the blame for Hammer and then unexpectedly his father went to Sing Sing, a prison in New York, for three and a half years. And so Hammer now had to take the place of his father and go to Russia. So it changed his life. So as Hammer explains it, he was actually the man who killed the woman, not his father.

LAMB: And your source was Bettye Murphy.

EPSTEIN: That's right.

LAMB: Did you talk to her?

EPSTEIN: Yes.

LAMB: Is she still alive?

EPSTEIN: Yes. Yes, she's still alive, living in Texas. No one had spoken to her about Hammer before I had. And she was a very close confidante of his. And everything else she said, including how Hammer had used stamps to fake artwork and other things, all checked out. And even this story. Well, of course, her only source was Hammer so she wasn't telling it as a firsthand source, but it seemed to check out along with the trial record and other things I was able to look at. Of course, we'll never know whether Hammer simply was taking credit for something his father did or whether he was telling the truth.

LAMB: The Nobel Peace Prize, how did he try to get it?

EPSTEIN: Like he tried to get everything. He believed you could buy anything in this world. And he set his sights on it. He had terrific focus. He would decide to do something and then he would map out, like a military campaign, how he was going to win it. And he realized that he needed to be nominated, which could be done by a number of Parliamentarians around the world, and he wanted Prince Charles to nominate him -- Prince Charles of England -- so he began to cultivate Prince Charles, and he cultivated him by giving money to his favorite philanthropies and even building a college for him. He brought his artwork to Sweden and Norway where the Nobel Prize Foundation is. He began cultivating people in the Nobel Prize Foundation. He determined that the Peace Prize is given by basically a small number -- five or six ex legislators from the Norway Parliament. And he began approaching them. And to my amazement, you know -- he had, of course, had to plead guilty to a misdemeanor having to do with violating American election laws and he tried to get a pardon from George Bush so he'd be eligible for the prize when they told him to do that. To my amazement, after he died and I went to Sweden and spoke to the president of the Nobel Foundation and asked him how close Hammer had came, he said, "Hammer was on a short list." And I said, "Well, how short?" He said, "There were two people, Hammer and the Dalai Lama," and the Dalai Lama won. So he had almost achieved this remarkable accomplishment. It's remarkable given the fact that he was in no way deserving of a Peace Prize.

LAMB: Go back and explain some of the things you just talked about. When did he first try to get the Nobel Peace Prize?

EPSTEIN: Well, he started his campaign I would say in 1980 or '81.

LAMB: So it was during the years that Ronald Reagan was president.

EPSTEIN: That's right.

LAMB: And you mentioned that he had pled guilty...

EPSTEIN: Or even Jimmy Carter in '80, you know, trying to negotiate the Afghan peace, then Ronald Reagan, then George Bush. He worked through all these presidents.

LAMB: But you mentioned that he had been found -- or he had pled guilty to three misdemeanors, I think it was.

EPSTEIN: Well, you know, what had happened is -- it was much worse than it sounds. He had given money to the Nixon campaign after the election. This money, it turned out, was used to pay off the Watergate burglars that were in prison. So the special prosecutor was very interested in why cash was donated after the election. So Hammer orchestrated a cover up where other people lied and said that they had loaned the money and that it hadn't come from Hammer. And the FBI was able to penetrate this entire cover up. And when that collapsed, Hammer had the choice of either being prosecuted for obstruction of justice -- that is, arranging a cover up -- or they gave him -- because he was old and infirm, o said he was infirm, [let him] plead guilty to a misdemeanor of simply giving the money. And he pleaded guilty to the misdemeanor.

LAMB: Well ...

EPSTEIN: But he did do the cover up.

LAMB: But you said that he tried to get close to Ronald Reagan and that Dick Allen, who was the national security adviser, got in the way.

EPSTEIN: Yeah. Actually, Hammer took me to Canada. I was doing a story on him, which is how I first got interested in the subject.

LAMB: What year?

EPSTEIN: 1981, for The New York Times. And Hammer said, "Why don't you get the photographer and come with me on my plane to Canada? And I'm going to meet Ronald Reagan and you could get a picture of me shaking hands with Reagan." And he got me passes to go to this event, which was given by the Canadian Parliament in Ottawa. And, you know, I went in with him, and I was amazed to see how he was able to push his way through the Secret Service. I mean, I was almost afraid to follow him. He was just weaving in and out among the Secret Service.

Got up to Reagan, thrust his hand out, and said, "Hi, I'm Armand Hammer." And Reagan looked at him not uncourteously and said, "What are you doing here?" And he said, "Well, I have great business interests in Canada," which is untrue. He had come there to get this photo with Reagan. And then Reagan just turned around and started speaking to someone else and never shook his hand. So my photographer never got the photograph and Hammer was very upset. And later I spoke to Dick Allen about it, and Allen said that he had basically warned Reagan not to be in a photograph with Hammer because Hammer had very suspicious political connections. So Allen was the man who pushed Reagan away from Hammer or at least stood there as a roadblock.

LAMB: But you said that he wanted a certain kind of pardon, that he eventually did not get. And what kind of pardon was it that he first went after?

EPSTEIN: Well, a president can pardon people for two reasons; one is compassion. And just simply said, "You committed the crime, but you're an old and dying man. I pardon you." Or you can be pardoned for reason, which is to say the crime never took place. It was unjust that you were convicted. Well, Hammer wanted to be pardoned for reason that he had never committed the crime. And Reagan refused to give him that kind of pardon. And, eventually, Bush pardoned him for compassion.

LAMB: Go back, though, again, Ronald Reagan turned his back, didn't get his picture taken. And then you say that he went after Nancy Reagan's favor.

EPSTEIN: Right.

LAMB: How did that happen? How did it work?

EPSTEIN: Well, I actually saw the beginnings of it because Armand Hammer one night in New York had a party at the Lincoln Center for the Royal Ballet, and Prince Charles was there. Prince Charles came and he had a table. And he invited people like Punch Sulzberger, publisher of The New York Times, and he invited Nancy Reagan and she couldn't turn down an invitation -- or didn't want to -- to meet with Prince Charles. And he used Prince Charles to bring Nancy Reagan in. Eventually, Nancy Reagan seemed to like him. I mean, I can't speak for her. I stopped -- you know, after I wrote the story for The Times, I didn't have any further contact, but I saw him, you know, on television, sitting next to Nancy Reagan at various ceremonies, so I assume he worked his way into the White House. And I don't know how far he ever got. But he certainly got further than when he was with me. Got appointed to Reagan's national anti cancer committee and things like that.

LAMB: At what point did he commit the $1 million to the Ronald Reagan Library?

EPSTEIN: I would say he did that late in '81. I'd have to go back and check. But I think that ...

LAMB: So early in the whole...

EPSTEIN: Oh, sure. He did. You know, to commit something -- doesn't mean you actually have to deliver it.

LAMB: Did he deliver?

EPSTEIN: Not at the time of his death and the Reagan library was suing the Hammer estate. I don't know if it's been settled yet.

LAMB: Now what was the purpose of an early '81 gift to the Ronald Reagan proposed library?

EPSTEIN: To get his pardon. Again, going back to what we said before, he's on this Nobel Prize track. He thought he could get the pardon and with the pardon it would facilitate him being considered for the Nobel Prize. And, you know, when I was talking about the Nobel Prize, I didn't sort of talk about the various -- he needed a reason to get it and he was going to try to settle the war in Afghanistan acting on instructions of Brezhnev in Moscow, seeing Chirac in Paris, seeing Begin in Israel, seeing Jimmy Carter in Washington -- shuttling back and forth. And he kept these tapes, which I got a hold of, where he dictated each of his little accomplishments. And he would say, "Today I managed to get Chirac to agree to bring my proposal to Secretary of State Muskie" and so on.

LAMB: What's this tape on the cover of your book?

EPSTEIN: Well, that's one of the tapes that I got after he died. And these tapes were tapes that he made himself. He had his son rig him up with secret microphones. And these microphones were in his cuff links; they were in his attache case, on his plane, in his office, on his telephone. And he surreptitiously recorded people. They didn't know they were being recorded. He even recorded President Kennedy on a telephone conversation. And that was just one example of one of the many tapes -- I have, I think, 60 tapes in all -- which basically show a whole side of his activities that he would never write about and no one else would ever know about.

LAMB: How did you get the tapes?

EPSTEIN: Well, I can only say that a source gave them to me, and the reason is that I promised the source that I'd protect his identity.

LAMB: And you still have them?

EPSTEIN: Yes.

LAMB: If you go back to the source of the entire book that you wrote, give us the basic sources.

EPSTEIN: OK. Well, you know, here's a man's life and the man's written a great deal of biographical material himself and I've even traveled with him, but that's not the source I wanted to use. The source I wanted to use were files that he would never have thought would ever become available. So I went to the Soviet Union -- and I should say this is after the Soviet Union collapsed in 1990 -- and I was able to get 5,000 pages of documents from Soviet archives. Armand Hammer had lived in the Soviet Union for 10 years. As I said, after his father went to prison and he took his father's place, one of his father's jobs was to go to Moscow and work with Lenin's men to help recruit American business. And so Armand Hammer took over that role. So for 10 years, the Soviets kept daily records on Armand Hammer in Moscow -- his letters, his telephone communications, all the little businesses he set up, his accounting, money he borrowed from the banks. And I had all this. So I was able to see on a day to day basis what Hammer had done in Russia.

Then the FBI had also become interested in Hammer. Actually, even before there was an FBI, J. Edgar Hoover had started to track Hammer in 1921. And when Hammer died, under Freedom of Information, his FBI file became available, so I had that file. Also, the SEC when Hammer had set up at his corporation, Occidental C -- Petroleum, he did it at a relatively late age, in his late 50s -- he went into the oil business. He had got into a number of questionable activities, and the SEC had done a number of investigations, and I got those records under the Freedom of Information. So I would say that the three -- and then as I say, after he died, I got these tapes. But I'd say the main sources, just to answer your question, was the Soviet archives, lawsuits filed against him, including those by the SEC, and his FBI dossier.

LAMB: How many people did you interview?

EPSTEIN: Oh, you know, I can't give you a number. It's probably, you know, close to 100. But I would say that 10 or 12 people were the people who told me something original as opposed to an anecdote. And people's memories, when you're talking about someone who's lived, you know, to be 92, their memories tend to be fairly flawed unless they could be refreshed. Like, if I could play the tapes in some cases for some of the people who knew Hammer, suddenly they remembered things. But just going and asking someone what happened 30 or 40 years ago, you know, the memory isn't that good that I'd want to trust it for a book.

Now there were a few major sources like his mistresses. Especially this woman, Bettye Murphy, who he had, you know, confided so much in and actually wanted her to assist him in writing his biography back in 1952 and he lived with her. And, you know, her memory seemed to be pretty good and she had kept some very careful records. But, you know, so there were some sources. And his son, Julian Hammer -- even though Julian Hammer's memory wasn't that good, he had a lot of photographs and we could go through the photographs. But unless I had a way of refreshing someone's memory, I just hate to -- you know, I think one of the problems of modern journalism is it's based, rather than on letters or documents, it's based on talking to people. And while the journalists may be honest in recording what someone says, the people's memories just aren't that good. It's a human failing.

LAMB: Where do you live?

EPSTEIN: New York City.

LAMB: What do you do for a living?

EPSTEIN: I'm an author. I've written 12 books now.

LAMB: What are the kinds of things you've written about over the years?

EPSTEIN: Well, I've written books on -- I have to say -- conspiracy and intrigue. I've written on the Kennedy assassination, the CIA, the KGB. I've also written books about business -- "The Rise and Fall of Diamonds," a book about Mike Milken and the takeover -- takeovers and mergers and acquisitions. And I've written books about the media.

LAMB: Where was your home originally?

EPSTEIN: New York City.

LAMB: What do ...

EPSTEIN: Brooklyn.

LAMB: What do your parents -- what did they do for a living?

EPSTEIN: Well, my mother is a sculptor and an artist. And my father, who died 10 years ago, was in the shoe business.

LAMB: Where did you go to college?

EPSTEIN: I went to college as an undergraduate at Cornell. And then I went as a graduate to Harvard, and I got a Ph.D from Harvard in political science.

LAMB: And why did you think -- why do you think you became a writer?

EPSTEIN: Well, I started out wanting to be a teacher and I taught for two or three years. And I just didn't find teaching to be an educational experience. I found that writing -- and this is what I love about writing a book -- is you really learn about a subject, whether it's the CIA or the life of Armand Hammer. You focus your attention so sharply on something that you learn things you wouldn't learn otherwise. While teaching -- at least in my case, I can't speak for anyone else -- I found you became lazy and began just reiterating what you had said the year before. And I didn't want to do that for the rest of my life.

LAMB: Do you live solely on the revenues from books?

EPSTEIN: Yes.

LAMB: Have you ever had a movie made out of a book?

EPSTEIN: Actually, this book, "Dossier," has now sold -- optioned for a movie. Yes, I think they made a movie c -- out of my book on Lee Harvey Oswald called "Wilderness of Mirrors" or "Cracked Mirror." I'm not sure of the title ... (unintelligible).

LAMB: And do you expect a movie to be made out of this book on Armand Hammer?

EPSTEIN: Well, I hope they will. Yes.

LAMB: Where did he get the name Armand?

EPSTEIN: Well, Armand is a play on the words "arm and hammer," which was the symbol of the Socialist work -- party. His father was a true idealist. His father, in many ways, I hate to say this, was a more interesting man than Armand Hammer. And at some point, I had even thought of maybe I should do the biography of his father rather than Armand Hammer. But his father really believed in communism. And his father wasn't an opportunist. And he named his first born son after the symbol of his political party.

LAMB: Where was his father born?

EPSTEIN: His father was born in Russia.

LAMB: When did he come here?

EPSTEIN: He came here, I think, 1890, at the age of about 20.

LAMB: Where was Armand born?

EPSTEIN: He was born in Lower Manhattan.

LAMB: And when did he go to Russia first?

EPSTEIN: ... (Unintelligible)

LAMB: When did he first meet Lenin?

EPSTEIN: Well, what happened is, you know, at the age of 23, in 1921, to answer your question, when his father went to prison, his father called him up to Sing Sing and said, "Now you're going to have to do something for me. You have to -- the day you graduate medical school, you're going to be on a boat and you're going to go to Russia," which was very hard to get in. They were just finishing their revolution. He was one of the first Americans into Russia. And, you know, and then he basically -- of course, there were an enormous number of contacts because his father had been the unofficial ambassador of the Soviet Union and Lenin in New York. And so, you know, Hammer didn't have any problem with connections. His father's connections guaranteed him he would see Lenin. And he met with Lenin in November, 1921, and Lenin saw -- here was a young man who was smart and who was willing. And as Hammer later said on one of the tapes I have, he would have jumped out of the window if Lenin had said to do it. So Lenin recognized the quality that Hammer saw Lenin as his great opportunity and Lenin used Hammer as an opportunity. And Lenin wrote a letter to Stalin some months later saying, "Armand Hammer will be our path to American business." And Stalin was the head of the Communist Party then, so Stalin and Lenin agreed that Armand Hammer was going to be their man.

LAMB: You treat us to a little bit of history as we go through this. Lenin wasn't his name. And Stalin wasn't his name. And there was a third one, I think. There were three different names.

EPSTEIN: Trotsky, yes.

LAMB: Trotsky.

EPSTEIN: They were all war names they took on. They're easier to -- for us now, I think.

LAMB: Did you have to spend a lot of time researching that or did you know that already?

EPSTEIN: Well, I learned -- you know, one of the things about writing a book is I don't know -- at this point, I don't know what I learned and what I knew. But you do learn a great deal when you write a book because you have to, you know, Sunday you start -- all the time I'd go to the encyclopedia and start reading about the Russian Revolution or something like that to see, "Well, could Hammer have done what he said he did?" And things like that.

LAMB: You also paint a picture early when Lenin met Hammer. That Hammer's, like, 5'7" and Lenin's 5'3"?

EPSTEIN: Yeah. There's a few inches, but you know, Hammer was a reasonably impressive young man.

LAMB: When you were around him, what was it like just to fly? How many times did you fly on his airplane and what kind of airplane did he have?

EPSTEIN: He had a 727. I flew maybe a dozen times. It was arranged -- I had never been on a private plane at that time and it was arranged like a home. He and his wife had a suite with a shower, a television set, a little anteroom, a study. And then, you know, I basically had to sleep on, like, a couch outside with his administrative assistant, whoever that was traveling with him at the time. And then there were the pilots. And we just traveled around like we flew to Paris, London, Canada, Chicago. All over.

LAMB: This was all for The New York Times article.

EPSTEIN: And he was getting quite annoyed that I was taking so long on The New York Times article because he thought it would take a few weeks. And I kept saying, "Well, let me see this and let me see that." And it took much longer than...

LAMB: But what was your reason that it took so long?

EPSTEIN: Well, I actually had become interested in Hammer's past. And I had actually had a researcher in the National Archives and I was beginning to get documents under another FBI file which wasn't a Hammer file. It was a close spelling, H E I M E R, which was talking about his father's Soviet connections and Hammer's. And I wanted to be able to ask Hammer about this material. So I wanted to wait until I had digested it before I finished writing the article.

LAMB: So what was the article like for Armand Hammer?

EPSTEIN: Well, he went out of -- he got furious. He had expected it to be a very favorable piece, and instead I talked about his background and his Soviet connections. Of course, I only knew a fraction of what I later found out. But, even so, he sent someone out in Los Angeles to buy up all the -- it was the Sunday Times -- to buy up all the Sunday Times, and he never spoke to me again.

LAMB: You have this page -- you've got a lot of pictures of the different women in his life. But this page -- I wanted to show the picture up here. And that's a woman named Martha Kaufman.

EPSTEIN: It was Martha Kaufman, yes.

LAMB: But then down here, the same woman is Hilary Gibson.

EPSTEIN: Right.

LAMB: Who are these two people?

EPSTEIN: Well, they're the same person. And her name now is Hilary Gibson. She started out as as a journalist who met Hammer in 1974 in Los Angeles, interviewing him for aviations magazine, airline magazine. And her name was Martha Kaufman and she's very attractive and intelligent. And Hammer liked her and they began an affair. Years -- it went on for years. She actually worked for the Armand Hammer Foundation. Then his wife Frances Hammer, his third wife, who he was married to, found out about their liaison and demand demanded Hammer do something about it. So rather than give up his mistress, or rather than to leave his wife, he found a solution that was typical to the kinds of solutions he found. He had his mistress totally change her identity, change her hair, change her appearance, wear a wig, and change her name from Martha Kaufman to Hilary Gibson. And then he told his wife he fired Martha Kaufman. And his wife said, "Oh, that's good." And he said, "And there's a new woman who's much better, Hilary Gibson," who looked, by the way, 10 years older because of the white wig.

LAMB: And Frances, his wife, never figured it out.

EPSTEIN: No. See, because she -- you know, you just don't believe your husband is capable of such a grand deception. But the same kinds of deception that he applied in his marital affairs, he applied in his business affairs. It was just the same thing to him. He would find a solution. And the solution had nothing to do with truth or ethics. It was whatever served his purpose.

LAMB: And you talked to Hilary Gibson.

EPSTEIN: Yes.

LAMB: Where is she now?

EPSTEIN: California.

LAMB: What does she do?

EPSTEIN: Well, she's was the art curator of The Armand Hammer Museum. And after he died, they fired her. And I think she's remarried and simply living -- and she had a lawsuit against the -- Hammer. I think she prevailed in the lawsuit and she is living off the proceeds.

LAMB: You have the letter -- dateline, London, in the early part of the book dated September 6th, 1990. And it goes to somebody named Peter Sotz or something like that.

EPSTEIN: Yeah.

LAMB: Is that Sotz?

EPSTEIN: Lotz, L O T Z.

LAMB: L O T Z. And it says, "Will: Dear Peter. All my instructions with regard to Bettye Murphy" -- an earlier mistress you were talking about -- "and her daughter, Victoria." Whose daughter was that?

EPSTEIN: Well, Hammer only had two children. One was a legitimate son called Julian, who he had in Russia; and the other was Victoria, who's Bettye's daughter. So that was his second child, who he disinherited.

LAMB: "All instructions with regard to Bettye Murphy and her daughter, Victoria, are hereby revoked. Also, my instructions with regard to ..."

EPSTEIN: Martha Kaufman.

LAMB: Yeah. It's hard to read -- "Mrs. Martha Kaufman, Hilary Gibson, are also revoked."

EPSTEIN: Yeah.

LAMB: "My instructions with regard to you, Peter, remain the same, $50,000. In case of my death, the balance and" -- something -- I can't read that -- "should go to Armand Hammer's foundation. Armand." It's signed "Armand Hammer." That was 1990. He died ...

EPSTEIN: Right.

LAMB: 1990.

EPSTEIN: Well, on this trip, he was in London when he sent this. It's an extraordinary document, and I have to thank Hilary Gibson for obtaining the document. She had the nerve and the courage to walk into his Swiss lawyer's office, and when the Swiss lawyer went out of the room for a moment, she put her hand onto the desk and reached into the Armand Hammer file, grabbed this document, put it under her shawl and left the office. And what this document basically showed was that Armand Hammer had secret bank accounts in Switzerland in which he was paying his different families and mistresses out of and that he had a will that never showed up in his probate, which is one -- you know, I mentioned before that Hilary Gibson got a very nice settlement. Well, this document was one of the reasons. And she found the document herself.

LAMB: Correct me if I'm wrong, but I remember near the end of his life where he would be referred to in the media as the "billionaire industrialist Armand Hammer."

EPSTEIN: Right.

LAMB: Was he a billionaire?

EPSTEIN: No.

LAMB: Was he an industrialist?

EPSTEIN: Not really, although, you know, he basically had one oil concession which was the basis of his entire oil company and that was in Libya. And that oil concession probably was worth $4 billion or $5 billion in the amount of money that Occidental took out of it and made from it. And with that money they bought other oil concessions and they eventually merged with Iowa Beef, the largest beef processing company in America, and bought some other companies. And then Occidental was a huge company because, having this constant flow of money out of Libya, which they were able to either invest or use the share prices of Occidental to buy other companies, he built a very large corporation. But I wouldn't call him an industrialist. Only he wasn't a conventional businessman. Or, well, you know, we think of businessmen as people who build businesses. In that sense, he wasn't a businessman.

LAMB: How much was he worth then when he died?

EPSTEIN: Well, you know, I think he was worth about $40 million.

LAMB: What happened to that $40 million?

EPSTEIN: Well, he had an estate and -- arguments over where it went and, you know, it's...

LAMB: Did you say Julian only got $250,000?

EPSTEIN: Just like I mentioned, the Reagan library had a claim for $1 million. Different charities, like the Salk Institute, did. I don't know how they settled the estate at this point or how much of it remained to be settled. But his children didn't get very much money -- his only child. Well, one child got almost nothing; that was Victoria -- she was disowned -- and Julian got probably less than $500,000.

LAMB: Did you talk to his child, Victoria?

EPSTEIN: No, I spoke to her mother.

LAMB: Go back to the Nobel Peace Prize. We didn't complete all that. Now how much money do you think he spent in the political community in the United States trying to get this Nobel Peace Prize?

EPSTEIN: Well, you know, I spoke to one of his bag men, one of the men who helped him give out money in order to get what he needed in the world. This man told me that he spent from $30 million to $40 million on the Nobel Prize. Now this money -- it's interesting where it came from. When Armand Hammer got this concession in Libya, he didn't get it because he was a geologist or he was a great oil man. He got it, basically, because he found the right person in Libya, a man called Omar Shaoli to pay a bribe to. And then he embezzled that bribe from Omar Shaoli when he was replaced -- there was a revolution in Libya in 1969 and Muammar Qaddafi came to power and replaced him. Basically, he took the bribe away from Shaoli and had it deposited in Swiss bank accounts. And he had the use of that money. And he used that money, among other things, to try and buy himself the Nobel Prize. Now I don't know if this guy's estimate of $30 million or more is right, but I think it could be in that order of magnitude.

LAMB: He got a pardon.

EPSTEIN: Yes.

LAMB: What kind of a pardon?

EPSTEIN: Well, he got one from George Bush on compassion.

LAMB: But he didn't get the one he wanted for reason?

EPSTEIN: No. Because the Justice Department opposed that.

LAMB: So inside the Justice Department, the prosecutors got in the way?

EPSTEIN: Sure. Because the prosecutors knew that they had made a deal with Hammer, that they wouldn't prosecute him for a serious felony, obstruction of justice, which they had him red handed, in return for his agreeing that he was guilty for a misdemeanor, making an illegal campaign contribution. Now to have that reversed as if it didn't exist, would have have broken the deal and they insisted that the president keep the deal.

LAMB: Why did George Bush pardon him?

EPSTEIN: He might have felt compassion. I can't answer. I mean, Hammer was a major contributor to both political parties. He was in the oil business. I don't know -- I can't answer for George Bush.

LAMB: After he got his pardon, he had to find somebody to nominate him. Who did he get?

EPSTEIN: He got Begin from Israel to nominate him.

LAMB: Prince Charles wouldn't do it?

EPSTEIN: Yeah. I think there was a window of opportunity, you know, in the early '80s when Prince Charles really thought that Armand Hammer was a wonderful man. I think that passed by the mid '80s. Too much had come out on Hammer by this time. And he had helped Begin by supplying doctors to Israel and helping him with medical problems. And Begin had no compunctions about nominating him. After all, it's just a letter.

LAMB: There are four names I want to ask you about: Senator Albert Gore Sr., Senator Howard Baker, Marvin Watson and Tim Babcock. How did they all connect with Armand Hammer?

EPSTEIN: Well, you know, when Armand Hammer -- he had spent the early part of his life in disrepute. He couldn't even get a passport. He had no political power. Then in the 1930s, he began to see that you could get political power. And one of the men he eventually turned to was Jimmy Roosevelt, who was the son of FDR. Jimmy Roosevelt -- he was broke in those days. Unfortunately, Roosevelt was before the days of big advances to presidents and lecture fees and Roosevelt's children didn't have very much money. And Jimmy Roosevelt had come into the Hammer gallery to pawn some jewelry...

LAMB: Was he a congressman then?

EPSTEIN: He wasn't even a congressman. No. It was before he was a congressman. And Hammer recognized the Roosevelt name and, more or less, started to back him. And then Roosevelt became a congressman and introduced him to people like Albert Gore. Well, Albert Gore was in the cattle business and we're talking about, not the vice president but his father, and Hammer went into partnership with Gore in a number of different cattle deals. And so they have a longtime relationship. I don't know if there was anything wrong with the relationship. After all, before you had the Soviet files on Armand Hammer, it was very difficult. I mean, he was a great liar, Hammer. He would invent his past all the time and he was a charming man and for all I know, he, you know, convinced Gore that he was totally legitimate but they were in business together and Gore and another senator ...(unintelligible) Bridges, were his men in the Senate or his men in the sense they helped him with whatever he needed, introduced him to who he needed. And then...

LAMB: So he had an outside the Senate business relationship while Senator Gore was in the Senate?

EPSTEIN: Oh, at least when he was a congressman, yeah. And then after Senator Gore resigned from the Senate -- left the Senate in the late '60s, he joined Occidental and became chairman of Occidental's coal company, Island Creek Coal, and Hammer made him chairman of the board. So Gore stayed as and became a director of Occidental and so was a business associate of Hammer basically for almost his entire life, at least as an oil man.

LAMB: Howard Baker?

EPSTEIN: Well, Howard Baker had -- you know, was a very influential man and is a very influential man in Washington and Hammer hired him as a lobbyist and had him help with certain deals he was trying to negotiate. I mean, it's more or less what -- I think the relationship started after Baker left government. But he helped with a Russian airplane deal that Hammer was trying to get through and a few other things.

LAMB: Tim Babcock?

EPSTEIN: Well, Tim Babcock and Marvin Watson had gone to work for Hammer at Occidental after -- Watson was an administrative assistant to Lyndon Johnson and Babcock had been the governor of Montana. And ...

LAMB: Republican governor.

EPSTEIN: Yeah. And they had gone, you know, they were working for Occidental. And I mentioned this Watergate money that Hammer had given. When he needed the cover up, Marvin Watson's the person who flew to London and arranged, with a man who did the cover up, Hammer's London consultant. And later, to Watson's credit, he told the FBI about this. Babcock was...

LAMB: But he's -- now wait a minute. Marvin Watson was the administrative assistant to Lyndon Johnson, a Democrat.

EPSTEIN: Yeah.

LAMB: He was involved in the cover up money for the Watergate break in?

EPSTEIN: We have to get this -- sorry, I've mixed up -- I've messed up the chronology. Hammer would hire people after they left government. So after Marvin Watson left Lyndon Johnson, Hammer hired him as one of his aides ...

LAMB: In Washington.

EPSTEIN: ... and he probably gave him a title as president of Occidental International or vice president. He gave him a position. Then Hammer got in trouble on the Watergate thing. So he sent Marvin Watson to London because he basically had to pretend this money came not as a contribution from him but as loans to Tim Ba -- Babcock who now was signing his name as the person who gave this contribution. So Tim Babcock had to have a plausible way of where this money came from. And so Hammer arranged this entire fictitious system of loans which Marvin Watson played a role in arranging. But it all fell apart. Everyone admitted their true role to the FBI and Hammer was left out in the cold. And Babcock got a suspended sentence. Watson, who I think turned state's evidence and got no -- I don't think there was any proceedings against him. But these were basically -- they were typical of what Hammer would do and how he would intervene in politics. He would look for who was the president's close aides. Then he would propose that after they left the government, they would work for him with the idea that they would still have the access that they had while they were in government.

LAMB: You say that board members for Occidental signed letters of resignation -- resignation undated and gave them to Armand Hammer.

EPSTEIN: Right.

LAMB: At whose request and why?

EPSTEIN: At Hammer's request. And we just have to go back one step to understand that Hammer had a huge corporation, but he only owned 1 percent of the stock. So he had to control the board of directors. So when Hammer would appoint someone as a director of his corporation, he would ask him to sign an undated letter of resignation which he would then keep in his desk drawer. So if this person, this director, ever disagreed with Hammer or more to the point, ever opposed him, Hammer could just simply say, `You've just resigned,' and replace him with someone else. Because of this, he was basically cheating his shareholders because his shareholders thought there was an independent board of directors when, in fact, there wasn't an independent board of directors. He controlled them. And the SEC found out about this practice through an interesting chain of events, but they found out, and Hammer had to sign an order in which he ceased and desisted from doing this.

LAMB: By the way, when did you start working on the book?

EPSTEIN: Shortly after Hammer died. After he died and after Russia collapsed. I thought information that wouldn't be available in his lifetime would become available now.

LAMB: If you go back to -- another quote that I wrote down was that J. Edgar Hoover -- on more than one occasion, and you write this in your book, called this whole group, -- not everybody we've been talking about, but Armand Hammer and the earlier group, "a rotten bunch." Who were the rotten bunch?

EPSTEIN: Well, there was Hammer, his father, his brothers, someone called Ludwig Mardins, who was the Soviet ambassador to New York -- you see, Hoover was at the Department of Justice as a young lawyer before he headed the bureau of investigation. And he was investigating the whole Soviet Embassy in New York and what its true relations were with Lenin and how it was avoiding US government controls. And he saw the Hammer family at the center of it. That's why he called them a rotten bunch because -- of course, Armand Hammer, at that point was, you know, a 22 year old guy -- his father was the important person.

LAMB: When he went -- and Armand Hammer lived in Russia nine years, you said. What did he do? Where did he live there, and what -- anyway, if I remember, it was a 30 room house that they gave him?

EPSTEIN: Yeah. A palace called Brown House.

LAMB: Who gave him the palace?

EPSTEIN: The Soviet government. I mean, it was only -- you know, Hammer came there...

LAMB: What years?

EPSTEIN: Well, he first came there 1921 and he left in 1930. During that period, he traveled back to America for different trips. He went to Germany -- you know, he wasn't always in Russia. But he was more -- that was his principal residence. And when his father got out of prison, he joined him in Moscow while the elder brother, Harry, remained an American, in New York and ran the New York side of the business. The business, basically, was a money laundry. It was an export import business where the Russians would give them certain commodities at a fictitious price to guarantee them that they would have a profit when they sold the commodities in America or Europe; and then part of the profit, because it really belonged to the Soviet government, Hammer would then deliver to a designated Soviet agent or a Soviet propaganda group. So he was acting as a major money laundry for the Lenin government. He was exactly what Lenin said he was going to be. He was a path to America.

LAMB: How many people that lived in this country benefited from getting the money?

EPSTEIN: Well, in terms of records, you know, I'm able to trace it to only a handful of people. But these were espionage networks. You know, these weren't people living off the money; they were getting the money to pay for secrets they were taking and things like that.

LAMB: His first wife, Olga, where did he meet her?

EPSTEIN: Well, Olga was a Gypsy dancer, a cabaret singer. He met her on a Russian riviera in the Crimea when he was 25 years old. His brother had just got married and he decided to take a wife.

LAMB: How long was he married to her?

EPSTEIN: Well, you know, there's two sides to the question. He was married to her, in fact, for about five or six years. The marriage continued for about -- until he got a divorce, for maybe -- to 1942, so maybe another 10 or 15 years. But after he brought her back to America, he separated from her in all but name. But, you know, she remained his legal wife.

LAMB: Now there's a second wife, Angela, who's located in this -- I mean, she's in this picture.

EPSTEIN: Right.

LAMB: When did he marry -- how did he find her?

EPSTEIN: Well, Angela was an opera singer. He'd met her in New York City when he was in the art business. And she also had money. She was fairly well to do and Hammer basically lived off his wives. His wives were a means to an end for him like everyone else was.

LAMB: How long did he stay married to her?

EPSTEIN: Well, I would say for about eight years.

LAMB: There was a mistress in the middle of this somewhere, I believe?

EPSTEIN: There -- maybe 12 years, now that I'm thinking about the legal marriage -- how long it lasted.

LAMB: To Angela?

EPSTEIN: Oh, yeah. The mistress started in the midst of the marriage. In other words, the marriage to him was never -- it was a financial arrangement, not necessarily a romantic arrangement.

LAMB: How many total marriages did he have?

EPSTEIN: Three.

LAMB: How many total mistresses that you were able to find did he have?

EPSTEIN: Well, the ones that I spoke to were Hilary Gibson and Bettye Murphy and perhaps there's a third -- there were three, I would say.

LAMB: And how many -- there was one, I remember, you said, was from Indiana originally. Met her in a diner or something.

EPSTEIN: That was Bettye Murphy.

LAMB: Oh, she was the one from ...

EPSTEIN: She was very important to his life.

LAMB: And how many children again?

EPSTEIN: He had one legitimate child and one illegitimate child.

LAMB: How often when you researched this book did you go, "Wow"?

EPSTEIN: Not only when I researched the book, when I wrote the book and even after I wrote the book; when I got the tapes and began to listen to Hammer in his own voice discussing bribes and things like that, I went, "Wow," all the time. Because I didn't really realize -- I had always had a picture of business like I read it in Forbes magazine or BusinessWeek or how presumably it's taught in business school; something where you get up early in the morning, you work hard, you have imaginative ideas, you do things differently than other people and you make money. With Hammer, what he really brought back from Russia was his education. That's what made him a wealthy man. And what his education in Russia -- it wasn't an education in literature or mathematics, it was an education in bribery, in compromise, in blackmail and basically how to approach a government figure and get him to give you a concession. And that proved, in the world of oil, in the world of Middle East, that Soviet education, he was truly Lenin's first capitalist. He learned how to basically apply the principles of conspiracy to Western capitalism very successfully.

LAMB: Who do you find today alive that still thinks he's a great man and -- I mean, you know, still stands by him and speaks up for him?

EPSTEIN: Well, I haven't found many people but, you know, Hammer did help many, many people leave the Soviet Union. To Hammer, they were all tokens. They were all pieces in a chess game where he would take a pawn, a music composer or something, and help him go to Israel or help him go to the United States. But to those people, he saved their lives. So I'm sure those people would all speak very highly of Hammer.

LAMB: What about relatives? Who's left?

EPSTEIN: No one. His granddaughter, Casey, is left and she didn't know her grandfather that well...

LAMB: What about Michael. Doesn't he have a grandson?

EPSTEIN: Michael's left. Yes. His grandson, Michael. I didn't mention him because I haven't spoken to Michael.

LAMB: At all?

EPSTEIN: Well, I spoke to him back in '81 when he was a college student and Hammer introduced me, but I didn't speak to him for the purpose of this book.

LAMB: Did you talk to Casey?

EPSTEIN: Yes.

LAMB: The granddaughter. And where is she?

EPSTEIN: She's in California.

LAMB: Did she benefit in the will at all?

EPSTEIN: She got a small bequest but nowhere what she should have gotten, in my opinion.

LAMB: You mention a couple times a $100 million memorial to him in the museum in out in Beverly Hills or someplace. What happened to that? What is that?

EPSTEIN: Well, he was very interested in building a history for himself. And he built a mausoleum and at one point, thought of building an even greater mausoleum. But, you know, apparently it's in sort of disarray now and, you know, it's not something -- it's within sight of Occidental Petroleum. You can see it from his former office. But it's nothing great or grand. The only mausoleum he left to himself was his art museum which he connected right to the side of Occidental Petroleum on Wilshire Boulevard and that still stands as the Armand Hammer Museum.

LAMB: Still called the Armand Hammer Museum?

EPSTEIN: It is. I'm not sure for how long it will be but...

LAMB: Is there still an Armand Hammer room up there at the Metropolitan Museum of Art in New York?

EPSTEIN: No. No.

LAMB: No?

EPSTEIN: No.

LAMB: Why not?

EPSTEIN: Well, Armand Hammer made various arrangements with museums, including one with the Metropolitan Museum to have a hall named after him -- the Armand Hammer Hall of Medieval Armor, I think. And to do that, he pledged to do -- that after he died, they'd receive so much money. It was, I think, $2 million. And it was a pretty good deal from Hammer's point of view, but after he died, they found that there just wasn't enough money in the estate that they wanted to spend on these purposes, and so they made a deal with the Metropolitan Museum that they wouldn't pay the money and the room wouldn't be named after Hammer. It's...

LAMB: Go back...

EPSTEIN: ...hard to control your posterity.

LAMB: Go back, though, to Washington, DC, and all the money that he gave to politicians and all the money he gave to foundations. We've gone through a period lately where we keep hearing that politicians have foundations and there's money to redecorate the White House. You say that he gave $20,000 to Mrs. Reagan to redecorate the White House.

EPSTEIN: Yeah.

LAMB: Do you look at this town differently after finding out how this man spent all his money in town to curry favor with politicians?

EPSTEIN: Well, I think he got a lot for what he spent, and I watched him myself when I was traveling with him in 1981 how he would do it basically as a military campaign; go to one senator, Senator Percy, and meet someone at a party, find out what his favorite cause or philanthropy or foundation was, pay the money to that foundation. Hammer was a wizard at using money to bribe people in ways that couldn't necessarily be called bribes, legally at least.

LAMB: What would you say, though -- did it work? How often did someone get in the way and say, "No, don't get near this man"?

EPSTEIN: Well, the only case I know was under Ronald Reagan, Richard Allen. I think most times when someone comes to a politician with money, they find an excuse in their own mind for saying, "Well, why shouldn't we accept it?" And I think that's more or less how -- the principle Hammer operated on; that people don't turn down -- look, he gave major contributions to Lyndon Johnson, to Jimmy Carter, to Gerald Ford, to Ronald Reagan, to Richard Nixon, to Franklin Delano Roosevelt. I think he got what he wanted out of those contributions. They weren't quid pro quos, they weren't a pipeline here or something like that. But they were influence. And other people who knew that he gave to the Reagan library or other people who knew that he was giving to some charity that someone favored, would thus think that he had influence. The influence game is not necessarily having power but being perceived as having power.

LAMB: Did he try to pay off Brezhnev and Chernenko and Andropov and Khrushchev and all the other people he met?

EPSTEIN: Well, of course, you know, it's very interesting. The tapes he kept of his bribes cover the whole world except for Russia. It was as if he did not want in any way to get in serious trouble in the Soviet Union. But he was alleged to have paid off the Soviet minister of art and culture, Madame Fritseva.

LAMB: You've put this on the back of your book. What is this?

EPSTEIN: Well, you know, I mean, the book publisher put it on the back. That's a transcript from one of the tapes in which he's trying to -- and I would say successfully -- to bribe the government of Venezuela with $3 million. And he has a bag man named Askew who he then gets to come over to his house in LA and says, "I sent you $3 million. Who did you give this money to? How much did you give to this minister? How much did you give to that minister? What use is it being used for? Are you paying him enough? Have you paid the president?" Now interestingly enough, these present people are the present administration of Venezuela. And Hammer got -- this was right after Libya -- he got his concession in Venezuela. In my opinion, thanks to his keen control of the money, he micromanaged his bribes.

LAMB: How would you do -- just based on writing your book and being around him and flying all over the world with him, how would you describe him? You know, what kind of a human being was he?

EPSTEIN: He was a man who wasn't moved by any sort of passion or emotion. He was totally focused on himself. He was focused on his plan and his advancement. People that worked for him were just steps in the ladder which you moved up or down as was necessary.

LAMB: Did you like being around him?

EPSTEIN: I was a journalist. He was, you know, of course, always nice to me because he wanted me to write nice things to him. I enjoyed it. Yes.

LAMB: Did you find yourself enamored by him early and then changing?

EPSTEIN: No.

LAMB: Never?

EPSTEIN: Maybe before I met him, I was enamored by the idea of a man who broke the hold of Western oil companies on the international oil market. But this was a long time ago. As soon as I began to see how he treated people under him, I wasn't enamored with him.

LAMB: What's your next book?

EPSTEIN: It's going to be on Hollywood.

LAMB: What kind of book on Hollywood?

EPSTEIN: Well, you know, I had written my Ph.D. thesis on the television networks and how the organization of the the television networks affects the programs we see. And I want to write the same kind of book on Hollywood; look at its economic structure, its political, social, cultural base and try to see how that affects what we and the rest of the world see in movies.

LAMB: How far along are you?

EPSTEIN: I'm just starting. I started a few months ago.

LAMB: How long will it take you?

EPSTEIN: Well, as I told you, to me, research is an education and a book is like going to college. So I like to spend two or three years researching something and then writing it.

LAMB: Where would you put this Armand Hammer book on the list of the 12 you've done in satisfaction?

EPSTEIN: I would put it very close to the top. I enjoyed basically learning about someone, learning how business is done in an unconventional sense, learning and what happened in the Soviet Union and how it created a new kind of Soviet man; a man that basically was driven by opportunism as opposed to principle. It's a book that I really enjoyed writing. I think I would -- it's hard, you know, because every one of my books has a different meaning to me but this book was certainly one that I'm very satisfied with.

LAMB: Any message to Americans about politicians in this mix?

EPSTEIN: My message is really that, I think, we should look more closely at what the nature of business is, because I don't think Armand Hammer was alone in using the techniques of bribery and things that you wouldn't speak about in public to achieve an economic purpose. I think that he might be much more representative of a kind of business, especially a business that depends on government favor and government concession.

LAMB: "Dossier: The Secret History of Armand Hammer" by Edward Jay Epstein. We thank you very much for joining us.

EPSTEIN: Thank you very much, Brian.

source:
http://www.c-span.org/mmedia/booknote/lambbook/transcripts/50161.htm

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