Bryan Burrough
Page 42
“Apparently it’s more serious than you think,” Herbert said. “There might be a violation on our part.”
What the Hunt brothers did next would become the focus of a federal investigation that foreshadowed the Watergate scandal three years later: first a wiretapping, now a cover-up. The U.S. government later alleged that Herbert first destroyed a batch of tapes. Then, after Kelly’s release from jail, Herbert and a Hunt Oil attorney sat down with Kelly and his attorney and, as the two men quoted Herbert later, told them they had “nothing to worry about,” that things had been “taken care of.” The Hunts had a friend at the Justice Department. All Kelly had to do, Herbert said, was hire an attorney named Charles Tessmer. The Hunts would pay for everything. Tessmer and their friend at Justice would handle it from there. Kelly agreed. In March 1970, two months after his arrest, he appeared in a Richardson court, where Tessmer succeeded in having the suspicious-persons charge dismissed. The Hunts later admitted paying Tessmer’s bill, but have always denied that it was part of a cover-up.
The FBI began an investigation, but months passed with no word of its progress. None of the detectives cooperated, at least not initially. The Hunts, meanwhile, increased the pressure on the Rothermel group. After more than a year of work, a New York detective agency had finally assembled what it felt was a strong case against them, alleging a massive embezzlement scheme. In November 1970, ten months after Kelly’s arrest, the Hunts filed suit against Rothermel, Currington, and John Brown. Rothermel fired right back, directing his wife to file suit against Herbert for invasion of privacy. Then Rothermel played his trump card. He had been at H. L. Hunt’s side for almost fifteen years by then. He knew the secrets. And one by one, in interviews with reporters for the Houston Chronicle and other Texas newspapers, he began parceling out bits of what he knew:
Hassie’s mental problems. Frania Tye. The gambling. Stories of tainted HLH food sold in ghetto stores. Rothermel insisted all his “side deals” had been explicitly approved by H.L. himself. The entire wiretapping operation, Rothermel alleged, had nothing to do with any embezzlement scheme. Rather, he charged, it was about H. L. Hunt’s inheritance. Rothermel said he had prevailed upon H.L. to alter his will to give Ruth’s branch of the family a greater share. The crusade against him, he said, was Bunker and Herbert’s revenge. A blizzard of allegations true, false, and somewhere in between, Rothermel’s charges achieved exactly what he intended: they forced the Hunts to the peace table. In a May 1971 settlement, everyone involved agreed to drop their lawsuits. Everyone involved agreed never to discuss it publicly again. All the legal documents were sealed.
It was then, just as the Hunts thought the whole ugly episode might melt away, that the FBI struck. On May 12, 1971, a Dallas grand jury indicted Jon Kelly and Pat McCann on federal wiretapping charges. Both men remained represented by top-flight Dallas attorneys, according to Kelly, paid by the Hunts themselves. Neither man told the grand jury a thing. When they came up for trial that August, neither man testified. A jury found them guilty, and the following month sentenced both to three years in prison. Through it all, neither Kelly nor McCann said a word.
What bought their silence, Kelly later claimed, was a promise from Hunt attorneys that the two would receive $1,250 for every month they spent in prison—provided they kept quiet. There was just one problem: Kelly decided he didn’t want to go to prison. If he could cut a deal with prosecutors, he realized he might yet go free. Kelly, in effect, put himself up for auction. Whoever produced the best offer—the Hunts or the government—could have his full cooperation. The Hunts pursued him like a hound, arranging for one of H.L.’s friends, a Houston businessman named E. J. Hudson, to give Kelly a $700-a-month security-guard job while he remained free pending his appeal.
Federal prosecutors saw what was happening. In December 1971 they granted Kelly immunity from further prosecution and prevailed upon the sentencing judge, Robert M. Hill, to order him to testify. Kelly, secure in his Hunt-arranged job and represented by a Hunt-paid attorney, refused. Judge Hill cited him for contempt of court and strongly urged Kelly to get a new attorney. Kelly got the message, firing Charles Tessmer and replacing him with the canny dean of the Houston bar, Percy Foreman. Foreman, best known for representing Martin Luther King’s assassin, James Earl Ray, was equally well known in Texas for a keen eye for value, taking jewelry, artwork, cars, houses, and even speedboats if a client didn’t have cash. Jon Kelly had none of this. To his delight, Percy Foreman said he didn’t care; Kelly could pay what he could afford. After taking a thousand-dollar down payment Kelly borrowed from friends, Foreman phoned Kelly’s employer, E. J. Hudson, and said he might need a little more, say, fifty thousand dollars. The Hunts paid. For the moment, Jon Kelly had no idea what game his attorney was playing.
Prosecutors, meanwhile, kept upping the pressure. On January 14, 1972, W. J. Everett was indicted; five days later, Pat McCann cut an immunity deal and handed over a tape of Bunker discussing the wiretaps. Once again Percy Foreman offered to help. He telephoned E. J. Hudson and promised he could “control” both Kelly and Everett in return for another fifty thousand dollars. Hudson relayed the message to Bunker, who agreed to pay. He scrawled out a hundred-thousand-dollar IOU to Hudson on the back of a piece of stationery; Hudson had a cashier’s check cut and got it to Foreman. “Purpose in paying Foreman,” Hudson wrote in a diary he kept, “is to avoid indictments of Bunker and Herbert… . Kelly safe but McCann out of control.” Percy Foreman proved as good as his word. When Kelly asked whether it might be best to cut a deal with the government, he told him the Hunts had the means to hire a Mafia assassin. “The government,” Foreman told his gullible client, “can’t help if you’re dead.”
Controlling Jon Kelly, however, wouldn’t kill the FBI investigation, Bunker realized. Only the most powerful men in Washington could do that. In 1972 Texas Oil had two good friends in the capital, John Connally, now Richard Nixons’s Treasury secretary, and the president himself, who was up for reelection that fall. On a memorable evening that April, Bunker and his father sought help from both.
III.
One after the other, the airplanes appeared as distant glints in the late afternoon gloaming, slowly coming into focus as they descended over the Bermuda fields east of San Antonio, then dropping from the sky to skid into roaring stops on the great ranch’s airstrip. The Murchison brothers, Clint and John, arrived in their father’s aging Flying Ginny, a white, propeller-driven fossil next to the other oilmen’s sparkling new private jets. Bunker and H. L. Hunt came in a rented Lear, on loan from a hopeful aviation salesman. Finally, just at sunset, came the telltale whop-whop-whop of a helicopter bearing the presidential seal.
This was Picosa, John Connally’s sprawling ranch outside the town of Floresville. He had bought it years before with the money Sid Richardson paid him, and over the years had expanded it to three thousand acres, a good chunk of it bought from the Murchisons. That evening strings of light glowed in the live oaks around the big house. Heavy pots sagging with white chrysanthemums hung all around the patio. Connally, wearing a western shirt and bolo tie, met Nixon and his wife, Pat, with a chuckwagon, then rolled them up to the great fieldstone house where his Mexican servants waited with the barbecue, great slabs of tenderloin grilled in a hand-dug pit beside ears of roasted corn. The Nixons moved easily through the crowd, the president lingering over handshakes, slapping an oilman or two on the back. Everyone was there. White-haired George Brown of Brown & Root smiled as he shook the president’s hand. Perry Bass was there, down from Fort Worth. Even the Cullen family’s Corbin Robertson, freed from the headaches of his Italian cousins, had come from Houston. There were bankers and newspaper publishers and lawyers as well—Glenn McCarthy’s old counsel, Leon Jaworski, stood to one side—and all had come together in an effort to keep Nixon in the White House another term.
Though on its face little more than a fund-raiser, that warm April evening was freighted with symbolism. Texas Oil’s onetime champion, Lyndon J
ohnson, was nowhere to be seen. The former president was recuperating from a heart attack but wouldn’t have felt welcome anyway; his embrace of mainstream Democratic values, as evidenced in his Great Society welfare programs, had long since alienated his oilmen pals. In his place had risen Connally, the man who first made his name ferrying bags of cash from St. Joe’s, who had served as governor and now Treasury secretary, a lawyer Texas Oil hired when he was out of government and counted on when he wasn’t. As head of Democrats for Nixon, Connally represented the rear guard of Texas wealth that had fled the Democratic Party in the last twenty years to become conservative Republicans; he would soon join them. This was a kind of coming-out for the silver-haired old pol. There were already whispers he might replace the unpopular Spiro Agnew on the Republican ticket, and more than a few that evening hoped he would run himself in 1976.
That night at Picosa constituted a perfect snapshot of a state in transition, the remnants of Old Texas—Hunt, George Brown, the King Ranch’s Bob Kleberg, the onetime governor Allan Shivers in an awful green-checked jacket—mixing freely with the New: H. Ross Perot, Erik Jonssen of Texas Instruments, the Murchison brothers fresh off their Super Bowl victory three months before. With the airplanes lining the ranch’s runway, it had all the trappings of Edna Ferber’s Texas. All Texas was flying to Jett Rink’s party. All Texas, that is, possessed of more than ten million in cash or cattle or cotton or wheat or oil …
Yet there was no rush for tables, no malfunctioning PA systems, no one punched or kicked or stampeded. Everyone was perfectly behaved. As the barbecue simmered, the oilmen and executives in their tailored Brooks Brothers suits plucked up flutes of Moët & Chandon, took their seats around the lawn, and lobbed soft questions to the president, about Vietnam and price controls. Afterward Connally walked Nixon down to a pasture fence, where ranch hands on palominos gave the president a riding demonstration. Nixon was relaxed and ruminative. “This is a big country,” he mused, “and it produces big men.” He took a long look over the fields. “Now I feel I’ve seen what Texas is supposed to be.”
That night at Picosa was redolent of so many past gatherings of Texas Oil power. Some mentioned the Shamrock. But in truth it had more in common with an evening almost no one remembered, because almost no one knew of it, the Fort Worth barbecue in 1937 where Sid Richardson and Clint Murchison in all likelihood cut their first deal with Franklin Roosevelt. Richard Nixon, who had known the men of Texas Oil since those long-ago evenings sipping bourbon with Clint and Sid around the Del Charro pool, would raise millions from them in coming months, and was far more open to suggestions than Roosevelt. At some point that evening, in fact, and this would never be confirmed, one or two people would say they spied Bunker Hunt murmuring into Nixon’s ear. Maybe it didn’t happen. Maybe it happened in Washington back channels.
But however it happened, a meeting was arranged between Bunker and an assistant attorney general, Richard Kleindeinst. It took place at the Mississippi ranch of another Hunt ally, Senator James Eastland.ac Bunker wanted to cut a deal. He felt he had information the Justice Department could use. The Israeli prime minister, Golda Meir, was due to visit New York, which had the FBI anxious. Bunker’s success in Libya had produced death threats against him, including some, it was said, from the Arab terrorist group Al Fatah. In the course of his normal business, Bunker had built a large file on Fatah operatives. He informed the Justice Department—allegedly via Kleindeinst—that he could furnish a list of Fatah operatives in the United States if the Nixon administration would only drop the wiretap case. Bunker would later claim a deal had been struck, but that Nixon himself had reneged on it as his own wiretapping troubles—the Watergate scandal—grew.
Whatever happened, the federal case against Bunker and Herbert marched on. Soon after the Picosa barbecue, disaster struck. While working his sweetheart job as a night watchman at E. J. Hudson’s offices, Jon Kelly found the businessman’s diary. Its pages laid bare how Kelly’s own lawyer, Percy Foreman, was conspiring with Bunker to keep Kelly “under control.” Outraged, Kelly immediately fired Foreman, went to the government and cut a deal for immunity.
On June 24, 1972, he and Pat McCann began telling a Dallas grand jury everything they knew. It took another nine months for federal prosecutors—no doubt mindful of Bunker’s ties to the Nixon White House—to complete their work. Finally, on March 2, 1973, a full three years after Kelly’s arrest on a quiet suburban street, the grand jury indicted Bunker and Herbert on federal wiretapping charges. If convicted, H. L. Hunt’s sons now faced up to four years in prison.
IV.
By the early 1970s, while intrigues spawned by HLH Products drew him more deeply into escalating family dramas, Bunker Hunt was beginning to cut a profile of his own. The 1961 discovery of the Sarir Field in the Libyan desert had made him one of the world’s richest men, but it had taken six long years to see any profit. Bunker had endlessly pestered his partner, British Petroleum, to build a pipeline to the field, but BP executives, concerned that release of Sarir’s giant reserves would drive down world oil prices, had dragged their heels, not finishing the 320-mile pipeline until December 1965. A tax squabble with the Libyan government delayed its opening another year, but finally, in January 1967, oil began to flow from the desert.
Bunker’s headaches, however, were only beginning. Under BP’s supervision, the pipeline pumped barely 100,000 barrels of oil a day, a rate Bunker felt was scarcely a quarter of what was possible. To his exasperation, BP executives continually downplayed the field’s potential, at one point telling a trade publication Sarir “would never do more than 150,000 barrels a day.” Determined to pry more oil from the Sahara, Bunker leaked figures to the Oil & Gas Journal proving that the field’s capacity was more than three times BP’s public estimates. When BP, which was half-owned by the British government, found itself the target of scathing criticism in the House of Lords, the ploy worked exactly as Bunker hoped. Within months BP nearly tripled production, to more than 300,000 barrels a day. Bunker pressed for more and got it, eventually pushing production to 470,000 barrels a day, more than twice the output of all other Hunt-owned oil fields in the world. By 1970 Bunker was drawing thirty million dollars in annual profits from the desert, and with the foreign-tax credit, every last cent of it was tax-free.
Even so, he led a leisurely life, rolling out of bed in his Highland Park home most mornings around ten. The house, a subdued French colonial set on Turtle Creek, was decorated with English horse drawings. Around eleven Bunker would head downtown for lunch, usually with Herbert at the Petroleum Club. He remained quietly active in right-wing political circles, donating to George Wallace’s 1968 presidential campaign as well as John Birch causes. After Sarir, however, Bunker began living large. He started buying land, first ranches in Oklahoma, Texas, and Montana, then millions of acres of cattle stations in the Australian Outback, eventually more than five million acres in all; he populated the land with twenty thousand head of cattle, making him the world’s largest breeder of Charolais cattle. In a bet on Alaska’s North Slope, he began buying real estate in downtown Anchorage, becoming the city’s largest landlord. These, however, were mere investments. Bunker’s real passion was thoroughbred horses.
He had dabbled in horseracing since 1955, but after Sarir went on line he took the plunge, purchasing stables in Kentucky, Ireland, France, and New Zealand, hiring top trainers and bidding on horses at auctions around the world. Racing brought out the very best in Bunker Hunt. He knew blood-lines and track statistics the way a Wall Streeter knew stocks, and while a rank outsider who could be socially awkward around racing’s blueblooded owners—his rich Texas accent was a source of some ribbing—Bunker was a natural around the stable, chatting easily with jockeys, trainers, and stable boys. What distinguished him as a horse owner was his decision early on to concentrate on European championships, avoiding the Kentucky Derby and other American events altogether. Europe remained the easiest place from which to supervise his Libyan operations,
and as the years went by Bunker spent increasing amounts of time in London, Paris, and Zurich.
His first champion, Gazala II, won the French 1,000 Guineas and French Oaks races just as Sarir came on line in 1967. At the same time, Bunker laid the ground for future success by paying a then-record $342,000 for half-interest in a colt called Vaguely Noble, which went on to win four major European races, including the Arc de Triomphe, and was named 1968 European Horse of the Year. Among the colts Vaguely Noble sired was Bunker’s greatest horse, Dahlia, which won the 1973 English and French championships, becoming the first filly to top $1 million in winnings. Bunker’s stables would keep producing champions for years, including Empery, winner of the 1976 Epsom Derby; Exceller, a 1978 champion; and the filly Trillion, a 1979 European turf champion.
In 1969, however, when Bunker turned forty-three, he was still little-known to anyone inside or outside Dallas. That May, finally ready to take his place on the international stage, he and his wife, Caroline, threw a lavish party for five hundred guests at Claridge’s hotel in London. The affair featured three bands, including the Woody Herman orchestra, and was featured prominently in the British gossip pages. As it turned out, Bunker’s celebration was premature. Barely three months later, on September 1, 1969, a twenty-seven-year-old army colonel led a coup that overthrew King Idris of Libya. His name was Muammar Gadhafi, and his ascension to power spelled trouble for Western oil companies operating in the country. Gadhafi was a belicose nationalist, a Socialist, and a tad unstable, and within months he began demanding a greater share of oil profits. Over his every word hung the unspoken threat that was every oilman’s worst nightmare: nationalization.
Overnight, Bunker found himself enveloped in a maze of international intrigues. His worldview, shaped by John Birch doctrine, had always tilted toward conspiracies, whether involving Communists, Jews, the Trilateral Commission, the Rothschilds, or, a particular bugaboo he shared with his father, the Rockefellers. But it wasn’t all in Bunker’s head. To his list of imagined enemies Bunker now added the very real threat posed by Libyan security agents and, thanks to Gadhafi’s pronouncements of pan-Arab pride, Middle Eastern terrorists of every stripe. He began receiving death threats from Palestinian groups and he took them seriously, hiring security guards and private-detective agencies to watch his back. When he traveled commercial, he began booking multiple reservations on multiple flights, sometimes using false names. Given the turmoil in Libya, it was only a matter of time before the Central Intelligence Agency came calling, asking to plant a spy in his offices, but Bunker blocked the move, he later said, three different times. It was a rejection he would come to rue.