Murdock Took Pride in Winning War with Armand Hammer

By TJ Sullivan
Published: 06/16/2002
Ventura County Star

When the late Armand Hammer, the powerful and now legendary director of oil giant Occidental Petroleum, befriended David Murdock in the early 1980s, he probably hoped it would be the beginning of a mutually beneficial relationship.

What it became was a lesson in one of the ways Murdock made money.

Hammer was hurting. His company, which was headquartered just across the intersection from Murdock's office building on the west side of Los Angeles, was heavily invested in the Soviet Union and was losing millions. He needed newly elected President Reagan's ear to persuade him to lift U.S. restrictions on Russian exports. But Reagan, whose Cold War criticisms of communists were well documented, wasn't exactly open to the idea.

Just outside Hammer's window, however, was a potential solution — Murdock Plaza, built by a man who contributed and helped raise millions for Republican U.S. presidents, senators and congressmen.

If Hammer could get close to Murdock, perhaps Murdock could help improve his image with Reagan.

Knowing a bit about Murdock's love for Arabian horses, Hammer tried to get close. He called Murdock one day in 1981 and proposed a flight to Tersk in the Soviet Union. There they could purchase a rare Russian Arabian horse, a champion named Pesniar.

It was a rare opportunity, one that only someone with serious connections could secure. Edward Jay Epstein, who wrote one of several biographies of Hammer's life, said the sale was set up for Hammer, in part, by Leonid Brezhnev's national security adviser, Gen. Aleksandrov-Argentov.

The breeding rights alone would mean millions.

Murdock accepted.

"We never had any problems," Murdock said of the trip. "We stayed in a hotel there that Occidental had built. It was quite a thing. … In those days, Americans ate in separate rooms from everybody else. All the rooms were bugged. You walked around and people just stared at you because you were an American."

The next step for Hammer was the purchase of Iowa Beef Processors, in which Murdock was a major stockholder. In return for his stock, Hammer arranged for Murdock to receive a huge chunk of Occidental Petroleum stock, as well as a seat on its board of directors.

Then the tables turned.

"As soon as he got on the inside, David Murdock began to throw his weight around, opposing most of our corporate strategies and, in particular, criticizing me at board meetings," Hammer wrote in his autobiography.

Murdock says he was simply appalled at what he perceived as a waste of company resources.

"He was buying paintings with the company's money and calling them his," Murdock said. "I wanted to put a stop to it."

Within a year Murdock told Hammer to resign.

"I think you're too old to be running Occidental," Murdock said, according to Hammer's written account.

Hammer, who was in his 80s at the time, "was doing things that weren't right for the company," Murdock said in a recent interview.

A war had begun and Hammer wanted to end it. He dispatched spies and investigators on Murdock's trail, hoping to get some dirt with which to blackmail a sale. "I assumed that Hammer operated all the time by blackmail," Epstein said in an interview last month.

Murdock said he was simply annoyed.

"He had people following me, camping outside my home, calling my phone.

"Then he kept offering to buy my stock and kept offering me a higher price and a higher price … then one day he said … 'Well, set your price.' I told him what I'd sell for. He tried to negotiate with me, and I said, 'I told you my price. I don't negotiate' … I had my condition that it be all in cash. He had a reputation for welshing on deals and everything else."

The sale has been reported as resulting in a profit for Murdock of $60 million to $100 million, but he has declined to confirm the amount.

It's "lots more than that," Murdock said with a modicum of pride in his voice.



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TJ Sullivan is a literary author, investigative journalist, photographer and college instructor whose work has been published in a myriad of newspapers and magazines, including the Los Angeles Times, Chicago Tribune, and The Detroit News, the latter of which he delivered while working as a paperboy during his childhood in the City of Detroit. Sullivan's writing has received many top national honors, including the Sigma Delta Chi Award, the second oldest journalism award in the United States after the Pulitzer Prize. Other state and national accolades include first-place awards from Best of the West, the American Association of Sunday and Feature Editors, the Associated Press News Executive Council and the Los Angeles Press Club. In 2006, Sullivan was commissioned a Kentucky Colonel, the highest title of honor bestowed by the Commonwealth of Kentucky, the home of his alma mater, the University of Kentucky. Sullivan's years as a full-time newspaper reporter were spent at several esteemed publications, including the Santa Fe New Mexican, The Albuquerque Tribune, and the Ventura County (CA) Star. Sullivan has also written for NBC Universal, The Dallas Morning News and the preeminent public affairs website LA Observed. Sullivan is frequently sought as an informative and entertaining speaker on the craft of writing, the art of investigative reporting, and the intricacies of state, county and municipal government. His presentations have been featured at professional development conferences conducted by both The Poynter Institute and the national Society of Professional Journalists. Sullivan has taught journalism courses and coached writers at UCLA's award-winning student newspaper, The Daily Bruin. He has also taught as a part-time faculty member in the Journalism Department at California State University, Northridge. And, in 2006, he was an adviser to SPJ's The Working Press, an internship program for college-level student journalists. Sullivan is currently at work on his third novel, [working title "Howard is Home from The Loop"]. He lives in Chicago, Il.