Bryan Burrough (55 page)

He had dabbled in horseracing since 1955, but after Sarir went on line he took the plunge, purchasing stables in Kentucky, Ireland, France, and New Zealand, hiring top trainers and bidding on horses at auctions around the world. Racing brought out the very best in Bunker Hunt. He knew blood-lines and track statistics the way a Wall Streeter knew stocks, and while a rank outsider who could be socially awkward around racing’s blueblooded owners—his rich Texas accent was a source of some ribbing—Bunker was a natural around the stable, chatting easily with jockeys, trainers, and stable boys. What distinguished him as a horse owner was his decision early on to concentrate on European championships, avoiding the Kentucky Derby and other American events altogether. Europe remained the easiest place from which to supervise his Libyan operations, and as the years went by Bunker spent increasing amounts of time in London, Paris, and Zurich.

His first champion, Gazala II, won the French 1,000 Guineas and French Oaks races just as Sarir came on line in 1967. At the same time, Bunker laid the ground for future success by paying a then-record $342,000 for half-interest in a colt called Vaguely Noble, which went on to win four major European races, including the Arc de Triomphe, and was named 1968 European Horse of the Year. Among the colts Vaguely Noble sired was Bunker’s greatest horse, Dahlia, which won the 1973 English and French championships, becoming the first filly to top $1 million in winnings. Bunker’s stables would keep producing champions for years, including Empery, winner of the 1976 Epsom Derby; Exceller, a 1978 champion; and the filly Trillion, a 1979 European turf champion.

In 1969, however, when Bunker turned forty-three, he was still little-known to anyone inside or outside Dallas. That May, finally ready to take his place on the international stage, he and his wife, Caroline, threw a lavish party for five hundred guests at Claridge’s hotel in London. The affair featured three bands, including the Woody Herman orchestra, and was featured prominently in the British gossip pages. As it turned out, Bunker’s celebration was premature. Barely three months later, on September 1, 1969, a twenty-seven-year-old army colonel led a coup that overthrew King Idris of Libya. His name was Muammar Gadhafi, and his ascension to power spelled trouble for Western oil companies operating in the country. Gadhafi was a belicose nationalist, a Socialist, and a tad unstable, and within months he began demanding a greater share of oil profits. Over his every word hung the unspoken threat that was every oilman’s worst nightmare: nationalization.

Overnight, Bunker found himself enveloped in a maze of international intrigues. His worldview, shaped by John Birch doctrine, had always tilted toward conspiracies, whether involving Communists, Jews, the Trilateral Commission, the Rothschilds, or, a particular bugaboo he shared with his father, the Rockefellers. But it wasn’t all in Bunker’s head. To his list of imagined enemies Bunker now added the very real threat posed by Libyan security agents and, thanks to Gadhafi’s pronouncements of pan-Arab pride, Middle Eastern terrorists of every stripe. He began receiving death threats from Palestinian groups and he took them seriously, hiring security guards and private-detective agencies to watch his back. When he traveled commercial, he began booking multiple reservations on multiple flights, sometimes using false names. Given the turmoil in Libya, it was only a matter of time before the Central Intelligence Agency came calling, asking to plant a spy in his offices, but Bunker blocked the move, he later said, three different times. It was a rejection he would come to rue.

For all his ranting about the evils of Western oil companies, Gadhafi moved against them in slow motion. Expecting the worst, the oil companies began circling the wagons. In January 1971 Sid Richardson’s old banker, John McCloy, now working for the Rockefellers, drafted a defense pact called the Libyan Producers Agreement, known as “the safety net.” In it, all oil companies working in Libya, including all seven major oil companies, agreed to negotiate any demands from Gadhafi as a united front. If the worst happened and one of their number was nationalized, the signees agreed to help offset the stricken company’s losses by supplying oil from other sources. Bunker, though skeptical of anything involving the Rockefellers and New York lawyers, reluctantly signed on. He thought of it as insurance.

Finally, after two years of posturing and threats, Gadhafi struck, seizing the Libyan operations of Bunker’s partner, British Petroleum, in December 1971; BP’s sin, Gadhafi announced, was the British government’s support for Iran in a border dispute with Gadhafi’s ally, Iraq. Gadhafi ordered Bunker to take over BP’s operations and market its oil. Bunker, hewing to the safety net, refused. Gadhafi retaliated by expelling Bunker’s drilling technicians and installing native Libyans in their place. In November 1972 Gadhafi increased the pressure yet again, demanding that all foreign companies turn over 51 percent of their fields to the state. At the Libyans’ mercy, Bunker tried to cut a deal, sending an attorney to Tripoli to propose that Gadhafi buy him out in return for two years of oil production. Gadhafi thundered that he wouldn’t pay a cent for his own country’s oil; a month later, he shut down Bunker’s production.

Bunker might yet have saved himself. But unlike the other oil companies, he had never tried to appease Gadhafi. Where Mobil and Occidental spent portions of their profits building schools and hospitals in Libyan cities, Bunker had resolutely refused, keeping all his profits for himself—a position that earned him no friends in Tripoli. When Gadhafi moved against his next target, nationalizing 51 percent of the Italian national oil company, ENK, he repeated his demand to Bunker: Turn over 51 percent, a telegram from Gadhafi ordered, or be nationalized. Bunker ignored the threat.

Instead he hired John Connally, who by then had resigned his position as Richard Nixon’s Treasury secretary, and sent him in to negotiate. Connally’s status as a confidante to Presidents Kennedy, Johnson, and Nixon was enough to persuade Gadhafi to free up Bunker’s wells. The reprieve, however, was only temporary. On May 17, 1973, two months after Bunker and Herbert were indicted on wiretapping charges in Dallas, Connally resigned as Bunker’s attorney to become an adviser to the Nixon White House. A week later Bunker’s wells were again shut in. Finally, on June 11, with Anwar Sadat of Egypt and Idi Amin of Uganda at his side, Gadhafi held a press conference to announce he was nationalizing Bunker’s production. He characterized the move as “a slap on America’s cool, arrogant face.” Bunker took the call in his office. When he put down the receiver, all he said was “Fuck.”
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Gone, in a matter of hours, was a field throwing off $30 million a year in tax-free cash. Counting future production, Bunker put his losses at $4.2 billion. He had no one to blame but himself; if he had only tried to placate Gadhafi, he might have survived. The other Western oil companies did exactly that. After pledging to stand united against Gadhafi, the others handed over half their holdings and continued operating in Libya for years. Bunker was outraged, at Gadhafi, but also at seemingly everyone else; the American secretary of state, Henry Kissinger, for refusing to intervene on his behalf; the other oil companies, who he felt had weakened his bargaining position by cutting side deals; and, bizarrely, the Rockefellers, whose secret hand he suspected was behind it all. Bunker’s ejection from Libya led to an orgy of litigation that took years to unravel. The centerpiece was the largest antitrust lawsuit in history to that point. Filed in the spring of 1974, Bunker’s suit demanded $13 billion in damages from Texaco, Mobil, Shell, Gulf, and nine other international oil companies. BP, in turn, slapped Bunker with a $76 million lawsuit for payments it was due.
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Bunker had lost one of the world’s largest oil fields, a field far greater than the one his father had purchased in East Texas. Even so, he remained one of the world’s ten richest men, probably wealthier than his father at that point. With a net worth approaching two billion dollars, his only real decision was what to do with all his cash. It was then that Nelson Bunker Hunt made a fateful decision. He began buying silver.

In February 1974 H. L. Hunt turned eighty-five. His health was failing. Chronic back pain forced him into a wheelchair, and his eyes were so clouded, he consented to be driven to his office by a chauffeur. He began to think about dying, and his sins. He believed that upon his death, God would judge him. At a reception for the singer Pat Boone, who Hunt had long regarded as a paragon of American virtue, the entertainer leaned down to hear something Hunt was trying to whisper.

“Pray for me, Pat,” Hunt said.
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On September 13, 1974, the old man collapsed at his desk. He was rushed to Baylor Hospital. After a week of tests, the doctors gathered everyone from both Dallas branches of the family into a single room to give them the diagnosis: advanced cancer, of the liver. Hunt never left the hospital. As he weakened, many of his children came to his bedside, taking turns holding his hand. He lost the ability to talk, bobbing in and out of consciousness. Finally, on November 29, the day after Thanksgiving, his heart gave out, and he died.

News of Hunt’s death prompted an outpouring of something approaching affection. For days lines of cars inched by Mount Vernon. All the Hunts were bombarded with flowers and phone calls. The national obituaries tended to be dismissive; the
New York Times
termed Hunt “a militant anti-Communist . . . and ultraconservative.” In his column William F. Buckley lamented “the damage Hunt did to the conservative movement” with his “silly books” and “simplistic literature.” Hunt, Buckley wrote, gave “capitalism a bad name, not, goodness knows, by frenzies of extravagance, but by his eccentric understanding of public affairs, his yahoo bigotry and his appallingly bad manners.”

After years of gleefully pillorying Hunt, the Texas press turned winsome at his death. “He was many men in one, multitudinous and contradictory,” a
Texas Monthly
writer judged. “Good and bad, but on a larger scale, right out of Ayn Rand. In an age of midgets and conformists, he was a rogue who broke rules and cut a large swath and then, at last, lay down with a smile and allowed the ubiquitous and unctuous preachers to make him a monument to nobility.” This and similar eulogies were an early sign of a developing Texas nostalgia, a harking to the days when giants walked the oil fields, when men like Hunt and Clint Murchison and Sid Richardson and Roy Cullen helped build something unique in midcentury Texas—an image and culture loud, boisterous, money-hungry and a bit silly to condescending northerners, but proud and independent to many Texans. With H. L. Hunt’s passing the last of the greatest Lone Star wildcatters was finally gone, and with him, one sensed, a foundation of Texas culture was eroding.

On December 2, 1974, more than eighteen hundred people filed by Hunt’s open casket at First Baptist Church. Each of Hunt’s remaining thirteen children were there. Heads turned as fifty-six-year-old Hassie Hunt, the spitting image of his father, paused before the casket and cried. The hymns and eulogies seemed to go on forever, until they slid the coffin into a limousine, then drove it to Hillcrest Memorial Park, where it was lowered into a hole in the dirt beside Hunt’s first wife, Lyda. It was then the troubles began.

B
y 1973 Texas Oil remained mired in its second decade of doldrums, an afterthought in a world of petroleum now ruled by the Ay-rabs. Its unlikely savior, in fact the last man on earth anyone in Dallas or Houston expected to come to the rescue, turned out to be Bunker Hunt’s nemesis, the Libyan dictator Muammar Gadhafi. In October 1973, when Syria and Egypt attacked Israel in what came to be known as the Yom Kippur War, the United States and Netherlands supported Israel. The militant Gadhafi implored the organization of oil-producing Arab states, OPEC, to boycott both countries, and it did. Within six weeks, the price of Arab oil rose from seventeen cents a barrel to $5.40.

The Arab oil embargo was a nightmare for ordinary Americans. Prices on every conceivable oil-dependent product, from airplane flights to plastic bags, skyrocketed. In a matter of weeks gasoline, a product people thought as available as oxygen, was declared in short supply; millions of Americans simmered in around-the-block lines of Fords and Chevys and Mustangs waiting to fill their tanks. For Texas, however, the embargo represented a second coming. Suddenly all anyone was talking about was finding more American oil. Just as happened with the shortages after both world wars, the Arab oil embargo triggered a massive drilling boom across the country, and in Texas.

In West Texas wildcat activity leaped 22 percent in 1974 alone. Across the state, well completions rose by a third. All the majors poured money into exploration, spending three times more in 1976 than just two years before. Competition drove land-leasing prices into orbit; the University of Texas, which owned thousands of acres in West Texas, reported its bids rose 900 percent. Higher prices for oil suddenly made offshore exploration far more economical; all across the shallow waters of the Gulf of Mexico, drilling platforms rose from the waves. All through the mid-seventies, would-be oil finders poured into Texas. Some, like a young Harvard Business School graduate named George W. Bush, were sons of Texas oilmen who never expected to follow in their father’s footsteps; Bush formed a wildcatting outfit named Arbusto and began sinking holes around his native Midland.

In Washington, politicians browbeat the executives of Exxon, Mobil, and other major oil companies, demanding to know why their profits were soaring while Americans waited in gas lines; Congressman Henry “Scoop” Jackson coined the phrase of the day—“obscene profits.” But for once, no one got angry at Texas Oil. Everyone understood it was the majors who sold gasoline; Texas oilmen had been down so long they were now considered “the little guy.” Even when the Murchisons and a handful of other oilmen wandered into the margins of the Watergate scandal—Pennzoil’s Hugh Liedtke was caught flying a planeload of cash to Washington for Nixon’s reelection—no one blamed Texas Oil.