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DOSSIER: THE SECRET HISTORY OF ARMAND HAMMER
by Edward Jay Epstein

Armand Hammer was one of the odder, more odious characters of American business and politics, "famous" chiefly because he was rich enough to promote his mammoth ego. He has met his match in investigative writer Edward Jay Epstein, who performs the ultimate unmasking of a man who deceived, even betrayed, his country, his family and the hired toadies who posed as his friends.

The public persona that Hammer polished, at great expense, was that of a renegade oilman who made billions from Libyan oil, chummed around with politicians up to White House level and adorned acres of galleries with paintings, some priceless, others fake. Hammer's lawyers bedeviled honest journalists who tried to write otherwise while he was alive, and they mostly succeeded. Steve Weinberg, author of an earlier critical biography, estimated to me that his British publisher spent $2 million defending a libel suit; it died when Hammer did, at age 92, in 1990.

But now that the wretch is dead, let's get on with the deferred fun. For Mr. Epstein, the story actually began in 1981, when he interviewed Hammer for the New York Times Magazine. Hammer put on the charm, taking Mr. Epstein to dine with the paper's publisher, Arthur O. "Punch" Sulzberger, and treating him to six months of travel aboard the Oxy One, owned by his Occidental Petroleum.

Unfortunately for Hammer, another of Mr. Epstein's sources, James Jesus Angleton, head of counterintelligence for the Central Intelligence Agency, whispered a tip about a Soviet agent of influence whom a defector identified as "The Capitalist Prince." Mr. Angleton would not accuse Hammer directly but suggested that "another side" of his activities could be found in documents in a 1927 raid on Arcos, the Soviet trade mission in London.

Mr. Epstein's Times article suggested that Hammer's trade with the Soviet Union helped Soviet interests, including espionage, but he had no direct proof. Now the evidence is at hand, and in damning detail, straight from old Soviet archives. The account is of a man who bribed and cheated his way to great wealth --- and started with Soviet gold.

Hammer came to communism legitimately. His father, Julius, a Russian immigrant, linked up with Vladimir Lenin at a socialist conference in Berlin in 1907 and "agreed to become part of the elite underground cadre that Lenin would depend on to change the world." A physician by training, Julius built a small drug chain into Allied Drug and Chemical, purveyor of skin creams and herbal medicines.

When the Bolsheviks seized Russia in 1919, Julius worked with Ludwig Martens, Lenin's de facto "ambassador" in the United States. Julius used Allied, of which Martens was the covert half-owner, to launder sales proceeds of smuggled diamonds --- money that financed a revolutionary Communist Labor Party (CLP) dedicated to "overthrowing the government, expropriating banks, and establishing a proletarian dictatorship." Julius held card No. 1. The CLP eventually became the Communist Party USA and part of the Communist International (Comintern).



On another level, Julius used Allied Drug to ship equipment to the Soviet Union for which the U.S. government refused export licenses. Julius certified that the shipments were bound for Latvia; in fact, they continued on to Russia. The Soviets were so pleased with Julius' services that they offered Allied a trading concession that stood to earn him millions.

Then, disaster. Julius ran a small clinic in which young Armand worked while attending medical school. In 1919, the wife of a czarist-era Russian diplomat went to the clinic for an abortion; she died the next day. Julius would not deny that an abortion had been performed, but he insisted that it had been medically justified. A judge disagreed and sent him off to three and one half to twelve years of hard labor. Years later, Armand Hammer confided to a mistress that the wrong Hammer went to jail, that in fact he had performed the fatal operation. Julius had reasoned that a licensed doctor might beat the charge but that a medical student stood no chance.

With his father in jail, in 1921 Armand took over the import deals and left for Moscow on the first leg of an odyssey that would make him "one of the great con men of the twentieth century," in Mr. Epstein's words.

Hammer's cover story was that he helped feed starving Bolsheviks. This was a lie. The Soviets, from Lenin on down, saw him as the ultimate "useful tool" in breaking the Soviet Union out of economic isolation and in providing a conduit through which Moscow could finance espionage and subversion abroad. Mr. Epstein tells in gripping detail how the Soviets used the willing Hammer as a financial errand boy.

Lenin's grand scheme was to "advance the image of a non-threatening and potentially profitable Soviet Russia." Lenin relied on capitalist greed to make U.S. German and British businesses vie for Russian concessions and to force their governments to lift trade restrictions. When one of Lenin's aides asked where he would obtain the rope with which to hang the capitalists, he replied famously, "They'll supply us with it."

Lenin used Hammer as his opening pawn in this economic chess game, offering him an abandoned asbestos mine in return for a promise to bring in wheat. Everyone concerned realized the mine was worthless, but it gave the Soviets a means to transfer money to Comintern agents. Lenin issued orders to" make note of Armand Hammer and in every way help him on my behalf if he applies." There were admonitions to keep the relationship secret lest there be a "fatal effect" on Hammer.

Expansion was swift. Hammer persuaded automaker Henry Ford to move into the Soviet Union to develop the "Fordson" tractor. There were fur deals, and a Hammer pencil factory was given a Soviet monopoly. The Soviets permitted Hammer sweetheart deals on sales abroad of precious czarist art. (When Hammer depleted his stock of Faberge eggs, no problem: He counterfeited them in New York.)

The most important element was Allied Drug, which acted as the Soviets' de facto banker in the United States, laundering millions of Soviet dollars through sham transactions. Hammer eventually made millions in such enterprises as liquor, oil refining and art. The constant element, according to Mr. Epstein, was bribery and sharp dealing, including his capstone deal, the acquisition of Libyan oil rights for his Occidental Petroleum Co.

Hammer never deceived the FBI's J. Edgar Hoover, who in 1919 began creating a massive file, "61-280 --- Armand Hammer, Internal Security --- Russia," scrawling across the front, "a rotten bunch." Hoover knew that Hammer financed Comintern agents but did not move, knowing that "it is often more profitable not to arrest a detected courier" when there is no assurance that the replacement will be detected.

Hammer recognized the utility of buying politicians, and here Mr. Epstein understates one of his juicier stories: how the impecunious Senator Albert Gore Sr. got the wealth to enable him to live in splendor in Washington's Fairfax Hotel and to send son, Al Jr., now the vice president, to the pricey St. Albans school.

In 1950, Hammer made Mr. Gore "a partner in a cattle-breeding business, from which the Senator made a substantial profit." Thereafter, Gore was Hammer's designated door-opener in official Washington. When Mr. Gore retired, Hammer made him president of Occidental's coal division, where he "earned more than $500,000 a year."

Son Al next put the family's Senate seat at Hammer's service. At the 1981 inauguration of Ronald Reagan, Junior managed for Hammer to be seated in a section reserved for senators. Hammer lurked in the doorway, hoping to glad-hand the president, but Mr. Reagan brushed by him without a glance, and with reason. Years earlier, Alexandre de Marenches, the head of French intelligence, had warned him that Hammer was a Soviet "agent of influence."

If Hades has a reading room, I hope, for the sake of various souls who are damned to share eternity with this sleazy character, that it stocks Mr. Epstein's book. A rousing read!

source:
http://www.freerepublic.com/forum/a661957.htm

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