Armand Hammer - WikiHQ

Armand Hammer (May 21, 1898 He spent the next 33 years as chief executive officer and chairman of the company, overseeing its growth to become one of the largest companies in the US. Called "Lenin's chosen capitalist" by the press, he was also known for his art collection and his close ties to the Soviet Union.

Hammer's business interests around the world and his "citizen diplomacy" helped him cultivate a wide network of friends and associates.

Early life

Armand Hammer was born in New York City to Rose () and Julius Hammer. Rose and Julius Hammer were Jewish emigrants from the Russian Empire, from Vitebsk (present-day Belarus) and Odessa (present-day Ukraine), respectively. Julius Hammer came to the United States in 1875 and settled in the Bronx, where he ran a general medical practice and five drugstores.

Following the Russian Revolution, a part of the Socialist Labor Party of America (SLP) under Julius' leadership split off to become a founding element of the Communist Party USA, which supported Vladimir Lenin and Bolshevism. As the administrative head, commercial attaché, and financial advisor of the Ludwig Martens-led Russian Soviet Government Bureau, Julius Hammer was assigned to generate support for the Russian Soviet Government Bureau and funded the Soviet Russian Bureau by money laundering the proceeds from illegal sales of smuggled diamonds through his company Allied Drug, while his Allied Drug partner, Abraham A. Heller, headed the Soviet Bureau's commercial department. Julius Hammer and Heller traveled extensively across the United States to stop the embargo of Soviet Russia and to increase United States trade with Soviet Russia and improve the image of Bolsheviks, whom American socialists despised overwhelmingly. During the United States embargo against Soviet Russia, Julius Hammer used his Allied Drug and Chemical as a front to smuggle items and materials between the United States and Soviet Russia through Riga. After the Lusk Committee supported the police raid of the Soviet Russian Government Bureau on June 12, 1919, Ludwig Martens escaped and went underground, often hiding at Hammer's home. On December 18, 1920, Martens was deported; he was returned to Soviet Russia in January 1921. The surgical procedure took place in the midst of a great flu epidemic. Six days after the abortion, Oganesoff died of pneumonia.

While most historians (such as Beverly Gage and Nigel West) state that Julius had performed the abortion, an opposing position has been put forward by author Edward Jay Epstein, who in his book Dossier: The Secret History of Armand Hammer puts forward the claim that it was Armand Hammer, then a medical student, rather than his father, who performed the abortion and his father Julius assumed the blame. According to Murphy and Epstein's account, the legal strategy was that Julius did not deny that an abortion had been performed, but insisted that it had been medically necessary and that a licensed doctor, rather than a medical student, would be more convincing in presenting that argument.

Allied Drug

After the Soviet Russian Government Bureau closed, Allied Drug's smuggling activities between the United States and Soviet Russia ceased, which caused Allied Drug to gain enormous debts from storing large amounts of unpaid items in warehouses in New York and Riga. In March 1921, Ludwig Martens sent a letter from Moscow through the Soviet mission in Tallinn to Julius Hammer, who was imprisoned at Sing Sing until 1924, granting his Allied Drug and Chemical concessions for trade with Soviet Russia and requested an Allied Drug representative to be present in Soviet Russia.

When his father was imprisoned, Hammer and his brother took Allied Drug, the family business, to new heights, reselling equipment they had bought at depressed prices at the end of World War I. According to Hammer, his first business success was in 1919, manufacturing and selling a ginger extract, which legally contained high levels of alcohol. This was extremely popular during Prohibition, and the company had $1 million in sales that year.

Family envoy in Soviet Union

While Julius was imprisoned, he sent Armand Hammer, who could not speak any Russian, to the Soviet Union to look after the affairs of Allied Drug and Chemical. In the meantime, Hammer graduated from Columbia College in 1919 and received his medical degree from the Columbia College of Physicians and Surgeons in 1921.

In 1921, while waiting for his internship to begin at Bellevue Hospital, Hammer went to the Soviet Union for a trip that lasted until late 1930. Although his career in medicine was cut short, he relished being referred to as "Dr. Hammer". Hammer's intentions in the 1921 trip have been debated ever since. He has claimed that he originally intended to recoup $150,000 in debts for drugs shipped during the Allied intervention, but was soon moved by a capitalistic and philanthropic interest in selling wheat to the then-starving Russians.

Career

Early Soviet ventures

First trip to Russia

After leaving Columbia Medical School, Hammer extended earlier entrepreneurial ventures with a successful business importing many goods from and exporting pharmaceuticals to the newly formed Soviet Union, together with his younger brother Victor. The blockade of Soviet Russia had ended for most items in February 1921, and on July 5, 1921, he departed New York on his first trip to Soviet Russia as Allied Drug's representative in Soviet Russia. Prior to his departure, he visited Charles Recht, Lenin's United States attorney that supported Soviet Russia's best interests in the United States and whose law office was in the same building that the former Soviet Russian Government Bureau had occupied, and Recht gave Hammer a package to deliver to Ludwig Martens in Moscow. During this first visit, Armand Hammer allowed the Cheka, the Soviet secret police who later became known as the KGB, to take control of Allied Drug and Chemical.

Asbestos concession

During his time in Soviet Russia and later the Soviet Union, he perfected bribery and money-laundering techniques, which were exposed later in the 1960s and 1970s during which he tape-recorded his payoffs. After returning to the United States, Hammer stated that Lenin had granted him an asbestos concession for 25 years to mine asbestos from the Urals in Soviet Russia. According to Hammer, on his initial trip, he took $60,000 in medical supplies to aid in a typhus epidemic and made a deal with Lenin for furs, caviar, and jewelry expropriated by the Soviet state in exchange for a million bushels (27,216 tons) shipment of surplus American wheat. Before Lenin's death, Hammer negotiated the import of Fordson tractors into the USSR, which served a major role in agricultural mechanization in the country. According to Alexander Barmine, who was assigned by the Central Committee to run the Mezhdunarodnaya Kniga company to compete with Hammer, the stationery concession to produce such items in the Soviet Union was actually granted to Julius Hammer. Barmine states the party spent five million gold rubles on stationery supplies made in factories controlled by Julius Hammer and other concessionaires, making them rich. Barmine further contends that the Soviets were eventually able to duplicate certain items such as typewriter parts and pens, and end those concessions, but were never able to match the quality of Hammer's pencils, so that concession became permanent. Armand Hammer remained in the Soviet Union until 1930. The authenticity of the artifacts was questioned. According to Géza von Habsburg, Armand's brother Victor Hammer stated Stalin's trade commissar Anastas Mikoyan provided Fabergé hallmarking tools to Armand to sell fakes, In Dossier: The Secret History of Armand Hammer, Edward Jay Epstein called Hammer "a virtual spy" for the Soviet Union.

Oil company, Libya deals, and return to Soviet negotiation

After returning to the US, Hammer entered into a diverse array of business, art, cultural, and humanitarian endeavors, including investing in various U.S. oil-production efforts.

He gained enormous wealth through his United Distillers of America, which was a 1933 established firm known as the A. Hammer Cooperage Corporation until 1946, when it changed its name to United Distillers of America Ltd. In early 1944, Hammer purchased American Distilling Co. and a former New Market, New Hampshire, rum distillery at which his American Distilling employee, Dr. Hanns G. Maister, began producing the first United States-made potato-based spirit, which was a vodka, and also produced a blended whiskey that was retailed through the cooperage's account with West Shore.

His oil investments were later parlayed into control of Occidental Petroleum (Oxy) which he obtained in 1956.

In 1973, Libya nationalized 51% of Oxy's holdings in Libya. In 1974, Armand Hammer announced a 35-year oil exploration agreement with Libya, the first such agreement signed by Libya after Muammar Gaddafi came to power in September 1969. By the 1974 deal, 81% of the oil extracted by Occidental Petroleum was going to the Libyan government, with only 19% retained by Occidental Petroleum. At the time, Oxy was the second largest producer of oil in Libya, and Libya was the company's only major source of crude. The Libyan government continually threatened the assets of the company, who would usually give in to Gaddafi's demands.

Throughout his life Hammer continued personal and business dealings with the Soviet Union, despite the Cold War. In later years, he lobbied and traveled extensively at a great personal expense, working for peace between the United States and the Communist countries of the world, including ferrying physicians and supplies into the Soviet Union to help Chernobyl survivors. In his book The Prize, Daniel Yergin writes that Hammer "ended up as a go-between for five Soviet General Secretaries and seven U.S. Presidents."

Détente

Through Hammer's closeness to Yuri Andropov, Andropov assigned Mikhail Ilyich Bruk (; 1923 Moscow – 2009 Jurmala) also called Mike or Michael Brook or Brooke, who was an English-Russian translator, as Hammer's personal ambassador and expediter and was present as Hammer's translator at all meetings between Armand Hammer and Soviet leaders in the Soviet Union beginning in 1964. Bruk had been a technical translator at the first Pugwash conference called the Thinkers' Lodge held in July 1957. According to Armand Hammer, "Mike's KGB."

In early 1969, Armand Hammer obtained control of Eaton's Tower International through which Hammer would have a controlling majority stake in Tower International in exchange for Hammer's Occidental Petroleum assuming the debts of Tower International and Eaton receiving 45% of any profits from Tower International's future projects.

During Soviet times Armand Hammer also financed the , which opened in 1979 and became known as the Hammer Center.

Trade deals between Nixon and Brezhnev

After Richard Nixon, as the first United States President to visit the Soviet Union, traveled to Moscow for a summit that ended on June 1, 1972, Hammer traveled to Moscow arriving July 14, 1972, and, with Sargent Shriver as his legal advisor, negotiated the first trade agreement between the United States and the Soviet Union following Nixon's summit. Six weeks prior to Nixon's departure, Hammer personally gave Maurice Stans, the finance chairman of Nixon's campaign fund, $46,000 in cash from a numbered bank account in Switzerland which Hammer used as his slush fund money. Later, in September 1972 Hammer gave Nixon's campaign fund an additional $54,000 from the same Swiss bank account amounting to a total of $100,000 that Hammer donated to Nixon's campaign fund. On July 18, 1972, Hammer returned to the United States through London and called Tim Babcock, Hammer's lobbyist for the Nixon administration, to have him arrange a meeting with Nixon through H. R. Haldeman, who was Nixon's chief of staff, in order to debrief the President about Hammer's trade deal which occurred on July 20, 1972.

During détente in July 1972, Armand Hammer negotiated a twenty-year agreement through Leonid Kostandov, who was a close friend of Hammer and was the Minister of the Chemical Industry in the USSR from October 1965 to 1980, with Leonid Brezhnev of the Soviet Union that was signed by Hammer in April 1973 in which the Hammer-controlled firms Occidental Petroleum and Tower International would export to the Soviet Union, and later Russia, phosphate, which Occidental mined in northern Florida, in return for the Soviet Union, and later Russia, exporting from Odessa through Hammer's firms natural gas that would be converted into ammonia, potash, and urea. This fertilizer deal was to continue until Hammer's 100th birthday in 1998. JaxPort at the Port of Jacksonville in Jacksonville, Florida, was the United States port through which this trade occurred. Nixon encouraged the Export–Import Bank to finance in part the deal, valued at $20 billion over 20 years, and fund the Soviet construction of four ammonia plants in the greater Volga region, and a pipeline connecting them to the port at Odessa. Pivdenny is located at the Small Adzhalyk Estuary west of the 1974 established Yuzhne. The Port of Pivdenny was known as "Grigorievsky" () until 1978 and as the Port of Yuzhne from 1978 until April 17, 2019, when the port was renamed from the Russian word to the Ukrainian word for southern.

Illegal financial support of Nixon's Watergate fund

Politically, Hammer was a Democrat; but according to the memoir of his lawyer Louis Nizer, he was also one of "many executives who contribute to both political parties [and] preferred no publicity about his dual gifts." In 1972, "under pressure" from various sources, Hammer donated an unusual amount to Nixon's second campaign: "He wished his substantial contribution to Nixon to be anonymous because he himself was a Democrat." Hammer anonymously gave $46,000 to support Nixon before a 1971 law took effect on April 7, 1972, which banned political contributions both anonymous and through another person. Later, in September 1972, Armand Hammer made an additional three illegal contributions totaling $54,000 to Richard Nixon's Watergate fund through friends of former Montana Governor Tim Babcock, who was Hammer's vice president of Occidental Petroleum, after which both Hammer and Babcock pleaded guilty to charges involving illegal contributions. Hammer received probation and a $3,000 fine.

Association with the Gore family

A 2003 interview with Aleksey Mitrofanov erroneously places the Hammer and Gore families close to each other in Europe. Occidental's coal interests were represented for many years by attorney and former U.S. Senator Al Gore Sr., among others. Gore, who had a longtime close friendship with Hammer, became the head of the subsidiary Island Creek Coal Company, upon his election loss in the Senate in November 1970. Much of Occidental's coal and phosphate production was in Tennessee, the state Gore represented in the Senate, and Gore owned shares in the company.