Bryan Burrough

by The Big Rich: The Rise;Fall of the Greatest Texas Oil Fortunes

  In the ensuing months the clerk’s office at the Dallas courthouse slowly filled with filings that revealed, in harsh black and white, how the once-proud Murchison empire had been overwhelmed by a wave of debt. To many, it was almost incomprehensible how Clint had staved off disaster so long. Total creditor claims, both against Murchison Brothers and Clint personally, eventually rose to more than $1.15 billion. Clint’s assets, including Spanish Cay and the mansion, were valued at barely $71 million. His cash on hand: $4,876.66.

  For the next year Clint remained in his wheelchair, mute, while the attorneys liquidated his estate. Sales of real estate brought in $300 million or so, the rest maybe $50 million, leaving creditors with barely twenty cents of every dollar the Murchisons had taken. Clint’s suite at Texas Stadium alone brought $920,000. The mansion sold for $14 million to a real estate developer, who planned to subdivide the surrounding land into home lots. For Clint, the final humiliation was the October 1986 garage sale he and Anne were forced to endure before moving out. They wheeled him into the auction, where he sat, glassy-eyed, as bidders came up to pat his hand. Several had tears in their eyes. The sentiment disappeared, however, once the bidding began.

  Those handling the sale had high hopes for Clint’s twelve-foot mahogany dining table with its ivory inlays. “The table,” an auctioneer named Perry Burns announced to the crowd, “was built just for the Murchisons and is valued at twenty-five thousand dollars.”

  The first bid came in at one hundred dollars.

  “I can’t believe this,” Burns said. “Every important person who visited the city of Dallas in the past twenty years has eaten at this table. Let’s get some serious bidding at six thousand dollars.”

  The bidding inched up, to five hundred dollars.

  “This is history,” Burns pleaded. “We are talking about history.” The table sold for twenty-nine hundred dollars.

  Clint’s art did no better. A collection of jungle-themed paintings and tapestries, valued between four and twelve thousand dollars, sold for an average of five hundred dollars each. Not even his collection of Cowboys memorabilia stirred the crowd. At one point, Burns held up a scrapbook containing Clint’s ticket to the 1971 Super Bowl; it had been autographed by many of the players. “Look,” Burns said, “there’s notes from Roger Staubach, Bob Lilly, Calvin Hill, Tony Fritsch—everybody. You can’t pass this up.”

  Someone bid twenty-five dollars.

  “You’ve got to be kidding,” Burns said.

  “Fifty dollars,” another bid called out.

  Burns made a face. “Oh, how I wish the oil was still flowing,” he said.4

  Dallas, a city that had always run on boosterism and hero worship, had little interest in a failure. It was a cold good-bye, much the same as Texas was handing scores of men forced into bankruptcy that year, including John Connally, who had gone into real estate, the Houston developer Harold Farb, and the renowned heart surgeon Denton Cooley. As the Murchison auctions continued that November—they stretched on through the winter, including several days where the public was allowed to roam through the mansion—Clint was finally wheeled out of his home. He and Anne moved across the street into a small tract house not much bigger than the mansion’s living room. Clint spent his days there in a tiny bedroom, looked after by a nurse, obliged to ring a little bell when he needed something. He faded quickly. In March 1987 he contracted pneumonia and was admitted to a hospital. By then he was a vegetable. Anne and his children visited regularly, but there was little to do but wait. On Sunday, March 29, John Jr. appeared, holding his uncle’s hand and forgiving him. Clint’s eyes were open, but he couldn’t speak. He died the next evening.

  The following day the Morning News ran an editorial thanking Clint for giving Dallas the Cowboys and produced two articles on his life. And that was it. The era of men like Clint Murchison Jr. had passed. Texas was moving on. Three days later there was a strange coda when many of Clint’s old pals left his memorial service scratching their heads. They held it at the Sacred Heart Church. Anne had been in charge. Tom Landry and others gave the eulogies, but the stage was dominated by Pastor Olen Griffing, who stood in a white suit before a Plexigas podium. He kept referring to “Brother Clint.” Someone played a guitar solo. As Clint’s pals traded glances, a troupe of girls dressed in togas came out and did some kind of interpretive dance.

  This was a side of Clint’s last years that few had glimpsed; of those in the crowd, few had ever heard him speak of God. Obviously Pastor Griffing had. “I wouldn’t be surprised,” Griffing said at one point, lifting his eyes toward heaven, “if Brother Clint’s up there right now, dancing before the throne and shouting, ‘Great is the Lord!’” For those who had watched the onetime King of all Texans turn somersaults between the tables at ‘21’, who had seen him cadge a million-dollar loan at a public urinal, who had known him to bed seven different women in as many days, who had flown to his private island in a zebra-lined jet, it would not be the way they remembered him at all.

  IV.

  While oil prices soared into the early 1980s, the stock market didn’t. As a result, almost every big oil company was sitting atop oil and gas reserves that, at thirty dollars a barrel, were worth far, far more than the total value of their stock. Analysts called this the “value gap.” It didn’t take long before the savviest American investors realized that the cheapest place to obtain oil reserves was no longer the floor of the North Sea. It was the floor of the New York Stock Exchange.

  Among the first to recognize this were Texas oilmen, one in particular. His name was T. Boone Pickens. Born in 1928, making him just two years younger than Bunker Hunt, Pickens was a restless, headstrong geologist who had left hidebound Phillips Petroleum to build an independent oil company in his native Amarillo. He called it Mesa Petroleum. Pickens made his first fortune in Kansas natural gas, but his true genius lay in his grasp of the capital markets. In 1969, long before hostile takeovers were de rigueur, he had completed the takeover of Hugoton, a gas producer far larger than Mesa.

  Pickens spent the 1970s drilling for oil and gas around the world, but by 1982 realized, with a start, how thoroughly undervalued American oil companies had become. Pickens launched his first attack on Cities Service, the nation’s eighteenth-largest oil company, which happened to be three times Mesa’s size. Cities replied with a tender offer of its own—for Mesa. At that point Gulf Oil swooped in with an offer for Cities of its own, forcing Cities executives to sell out to Occidental Petroleum. Pickens walked away with a thirty-million-dollar profit. In the following years Pickens made offers for Phillips, Gulf, and Unocal, never actually buying his quarry, but always making money on his stock. He cloaked his attacks in the populist verbiage of “shareholder rights,” and to some he became a kind of folk hero. It wasn’t long before he became the latest Texas oilman to adorn the cover of Time.

  At their glistening new Fort Worth headquarters, its executive offices adorned with the works of Jasper Johns, Sid Bass and Richard Rainwater took notice. They had stayed busy the last few years, buying a set of resort hotels from American Airlines, then accumulating stakes in several public companies that they happily sold back to management for higher and higher profits; they made sixty million dollars alone on a little-noticed deal with Blue Bell. Then, in 1981, Rainwater was leaving a Wall Street banker’s office when, just as the elevator doors closed, the banker piped up, “You should look at Marathon!”

  Marathon was the country’s seventeenth-largest oil company, with annual revenues of $8 billion. Sid knew it well; every Texas oilman did. It was Marathon, then named Mid-Kansas Oil, that codiscovered the massive Yates Field south of Midland in 1926, the strike that opened West Texas to leasing; Marathon had been pumping oil from the field ever since, more than 800 billion barrels, with some 1.2 billion barrels still in the ground. “It’s just this massive cavern of oil,” Bass told Rainwater. “I mean, you just turn on the spigot and the oil comes gushing out.” In a good year the Yates produced 25 million barrels p
lus natural gas; with oil prices at $30 a barrel, that meant the field was generating $750 million in revenues a year, and Marathon had fields all over the world. Yet when Sid did the math, the value of its stock was barely $3.8 billion. “That’s absurd,” Sid breathed.

  They began buying Marathon stock in early 1981. By the time executives at giant Mobil Co., seeing the same disparity in values, began making noises about taking over Marathon that autumn, Bass and Rainwater had accumulated just over 5 percent of Marathon’s shares, at a cost of $148 million. At that point federal regulations required Bass to formally notify the SEC of their holdings. Marathon executives, fearing a hostile takeover, panicked. A month later they sold out to U.S. Steel. Once the merger was finalized, Bass and Rainwater walked away with $160 million in profit, more than doubling their investment. It was by far the best deal they had ever attempted. “Wow,” Bass said as the enormity of their gain sunk in. “Let’s do that again!”

  They began looking at every oil company of any size, even as they continued buying and selling shares of dozens of non-oil companies. Takeover fever was pushing the stock market higher and higher, and even their smaller investments were paying handsome dividends; the Basses took home $50 million selling their stock in one company, Amfac, back to its executives, a deal so small the press barely noticed. As the number of takeovers began to mount, Bass and Rainwater found themselves for the first time in the “deal flow,” that is, a regular stop for just about any Wall Street deal maker with a hot idea or an open hand.

  Their next major investment was Texaco, which found itself the target of rampant takeover speculation in 1984. Bass and Rainwater bought millions of shares, eventually amassing almost 10 percent of Texaco’s stock. They ended up selling it back to the company at a profit of four hundred million dollars. By the time they sold, Rainwater had already selected their next play: the Walt Disney Company. Disney was being hounded by the New York investor Saul Steinberg, who had the backing of one of Rainwater’s Wall Street pals, the junk-bond guru Michael Milken. Rainwater had picked up a Florida real estate outfit the year before, and when Disney inquired about buying it, the talks led to a deal in which the Basses agreed to swap the company, Arvida, for two hundred million dollars in Disney stock, about 7 percent of its shares. It was a way for Disney executives to get a chunk of their stock in friendly hands.

  As Sid studied Disney’s financials, he was underwhelmed. It lost money year after year. Its movie studio hadn’t had a hit in decades. The theme parks were aging and worn. Still, Rainwater had done his homework. Disney, he swore, was a neglected gem. The stock was stuck in the fifty-five-dollar range. Simply doubling the thirteen-dollar admission price to the theme parks, money that would sink straight to the bottom line, could make the company worth a hundred dollars a share. With proper marketing and advertising, he told Sid, Disney might be worth as much as two hundred dollars a share.

  In the summer of 1984, six months after the Basses acquired their first shares, Disney’s management bought out Saul Steinberg. But no sooner had Steinberg withdrawn than more wolves attacked. The Wall Street arbitrageur Ivan Boesky—later to be imprisoned in a notorious insider-trading scandal—accumulated a massive stake in Disney stock, as did a predatory investor named Irwin Jacobs. Disney executives, who met and liked Sid, turned to the Basses for help. In a series of lightning maneuvers, Bass and Rainwater used their $400 million profit from Texaco to buy out Boesky and Jacobs, giving them a commanding 18 percent share of Disney shares. They bought still more, raising their stake to nearly 25 percent, at a total cost of $500 million. In barely six months, they had taken effective control of the company. In short order Bass pushed to hire a new chief executive, Michael Eisner, who in the years to come would transform Disney into one of the most powerful entertainment companies on Earth. By the early 1990s the Basses’ $500 million stake in Disney would be worth a staggering $2.8 billion.

  It was Sid’s crowning achievement. In a span of just sixteen years, in one of the greatest investment performances of the twentieth century, he and Rainwater had increased the Bass family’s fortune from $50 million to an estimated $5 billion or more. With Disney, Sid had put all his eggs in one sparkling basket; he would remain its largest shareholder for years. Though left unspoken, Disney also marked Sid’s retirement from major investing; almost all his capital, in fact, was now wrapped up in Disney stock. Rainwater resigned not long after, moving into offices below Sid’s to make deals on his own; he would go on to be one of the most successful investors in Wall Street history.

  Sid’s “retirement,” however, was bittersweet, for even as he took effective control of Disney he was obliged to break up his father’s legacy, Bass Brothers Enterprises. Each of the four Bass brothers would go his own way. The breakup was almost all his brother Bob’s doing. Bob and Little Anne seemed to go out of their way to separate themselves from the rest of the family. Raised Methodist, Bob became an elder at a Fort Worth Presbyterian church. He quit using the family’s security people, preferring his own. Bob and Anne became ardent historical preservationists—Bob later became chairman of the National Trust for Historic Preservation—and led a local fight against a highway extension that the rest of the Basses favored.

  For years Bob had been pressing for more responsibilities at Bass Brothers; Sid and Rainwater, however, worked so seamlessly, there was little left for Bob to do. After agitating to manage his own money for several years, Sid had finally agreed to split up Bass Brothers in 1983, at which point Bob established his own company and began making his first major investments. It took the better part of three years, from 1983 to 1985, to finalize the breakup. The problem was taxes. As the laws stood in 1983, the breakup of the far-flung Bass investments would subject each of the brothers to hundreds of millions of dollars in taxes. Sid prevailed upon Texas senator Lloyd Bentsen to draft a bill to change the tax law, but it went nowhere. In the end, however, a favorable IRS ruling achieved the same result. By the time the breakup went through, Sid and Bob were no longer speaking. Each of the four brothers received a quarter of everything, all told, more than one billion dollars apiece.

  The youngest, Lee, stayed in Fort Worth to run the oil company. The second brother, Ed, who had returned from New Mexico in 1979 to develop a downtown area of shops and office space he named Sundance Square, stepped up his commitment to environmental causes. By the time of the breakup Ed was already, as the New York Times dubbed him, the largest private sponsor of environmental research in the United States. Among his many and varied projects were a 1,042-acre rain forest preserve in Puerto Rico, a backpackers’ hotel in Katmandu, an eighty-two-foot ocean-research ship, a twenty-acre research farm in Southern France, nine hundred square miles of ranchlands in the Australian outback, and the twenty-million-dollar Institute of Biospheric Studies at his alma mater, Yale. He sat on the boards of the World Wildlife Fund, the New York Botanical Garden, the African Wildlife Foundation, and the Jane Goodall Institute for Wildlife Research, Education and Conservation.

  Over the years Ed was dogged by accusations that he remained under the influence of John Allen, the futurist he had met at New Mexico’s Synergia Ranch. Ed always brushed off the accusations, but much of his work furthered Allen’s stranger ideas, including a plan to construct self-contained biospheres where humans could restart civilization after a nuclear holocaust. Ed’s most visible project was just such an enclosure, called Biosphere II, a sprawling set of glass buildings in the Arizona desert where, in 1989, a set of “bionauts” would live for two years without any contact from the outside world.

  Bob Bass, meanwhile, took his share of the Bass fortune and launched a brief career as an aggressive Wall Street investor, launching a series of hostile takeover attempts and leveraged buyouts during the late 1980s. He and Little Anne remained active historical preservationists. They purchased Ulysses S. Grant’s onetime Georgetown mansion and made a second home in Washington, D. C. Their relations with the rest of the family, especially with Sid, never recovere
d.

  Sid, meanwhile, began spending even more time in New York, where in June 1983 he had laid out a then-record $5.25 million for a sprawling Fifth Avenue apartment. It was as grand a space as Manhattan would know, decorated with fine French antiques, a row of Monets in the dining room, two giant Rothkos and a series of Matisses in the living room. Sid was named to the Metropolitan Museum of Art’s board the following year. Anne became a leading benefactor of the New York City Ballet, until a nasty spat with its creative director. They might have gone on like that for years, traveling the world, collecting the finest art, but in 1986 Sid fell in love with another woman—a married woman, named Mercedes Kellogg. Both left their spouses in a romantic scandal that kept the gossip columnists busy for months.

  After the divorce—Sid’s settlement with Anne was said to be $450 million—Sid married Mercedes and retreated from the headlines into a cocoon of gilded luxury. White-coated butlers hovered at every home. A Gulfstream jet always stood ready for weekends in Paris, Rome, Rio, wherever the mood struck. Sid Bass had ascended to a plateau Sid Richardson could not have imagined, as far removed from the scrublands of distant Winkler County as a Texan could get. To many, in fact, his life was a kind of modern-day fantasy, something Walt Disney might have dreamed up, an endless tableau of private jets and presidential dinners and intellectual evenings with New York writers, artists, and politicians. It wasn’t perfect, of course—Sid would tell you that—but as endings went, it beat the hell out of Clint Murchison Jr.’s.

  Or, for that matter, Bunker Hunt’s.

  V.

  After slowly recovering from the financial and emotional shocks brought on by Bunker’s silver play, the remaining children of H. L. Hunt began to go their separate ways during the 1980s. Some flourished; some didn’t. Lamar, who lost a good deal of his money in silver, folded his soccer team, the Tornado, in 1981, then, after years of squabbling with a competing tennis curcuit, surrendered to a merger and dissolution of World Championship Tennis. He retained control of the Kansas City Chiefs, but his best days were now behind him. His sister Caroline, after years as a relatively anonymous Dallas housewife, rebounded from a divorce to open a luxury Dallas hotel, the Mansion at Turtle Creek, and soon began buying and building hotels around the world. Ray Hunt, finally free of the first family’s intrigues, continued to build Hunt Oil. After finding oil in his first international venture, in the North Sea, he signed a drilling accord with the government of the remote Middle Eastern nation of Yemen in 1981. Over the next twenty years Hunt Oil would draw billions of barrels of oil from Yemen’s sandy soil.