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