Vice President Al Gore's push to privatize a federal oil field added
tens of thousands of dollars to the value of oil stock owned by the Gore
family, which has been further enriched by skyrocketing gasoline prices.
Shares of Occidental Petroleum jumped 10 percent after the company
purchased the Elk Hills oil field in California from the federal government
in 1998. Mr. Gore, whose family owns at least $500,000 in Occidental stock,
recommended the sale as part of his "reinventing government" reform package.
The sale, which constituted the largest privatization of federal land in
U.S. history, transformed Occidental from a lackluster financial performer
into a dynamic, profit-spewing, oil giant. Having instantly tripled its U.S.
oil reserves, the company began pumping out vast sums of crude at low cost.
As the months went by, Occidental was able to sell the oil, which ends
up at gasoline retail outlets like Union 76, for more profit. Rising oil
prices have significantly improved Occidental's bottom line, said analyst
Christopher Stavros of Paine Webber.
This year, the company posted first quarter revenues of $2.5 billion, or
87 percent higher than a year earlier. That's a bigger increase than at nine
of 10 other oil companies listed in a survey that Mr. Gore cited last week as
evidence of price gouging.
The rise in Occidental oil prices, coupled with the acquisition of the
Elk Hills field, has paid handsome dividends for the Gore family.
The vice president recently updated his financial disclosure form to put
the value of his family's Occidental stock at between $500,000 and $1
million. Prior to the Elk Hills sale and gasoline price spike, Mr. Gore had
listed the value of the stock at between $250,000 and $500,000.
Gore aides insist the vice president's push to sell Elk Hills does not
constitute a conflict of interest. They point out the family's Occidental
shares were originally owned by Mr. Gore's father, who died in 1998, leaving
the stock in an estate for which the vice president serves as executor.
Although Mr. Gore continues to list the stock on his financial
disclosure forms, aides said the shares are in a trust for the vice
president's mother, Pauline.
"He doesn't own stock because he's trying to avoid conflicts of
interest," said Gore spokesman Doug Hattaway. "He's the executor of the
estate, but he's not the trustee of the trust. It's a separate thing."
Still, Mr. Gore's recommendation to privatize Elk Hills ended up
enriching his mother, who is expected to eventually bequeath the stock to the
vice president, her sole heir.
Last week, Mr. Gore began a concerted effort to blame skyrocketing
gasoline prices not only on "big oil," but also on Texas Gov. George W. Bush.
Gore aides have emphasized that Mr. Bush once ran several oil-exploration
firms and has accepted more campaign contributions from oil companies than
the vice president.
The Texas governor has dismissed the attacks as an attempt to divert
attention away from Mr. Gore's energy and environmental policies, which have
driven up gasoline prices. Political analysts say the spiraling gas prices
could imperil Mr. Gore's presidential bid because they are highest in the
Midwest, which he must carry in order to win the White House.
The political and financial fortunes of the Gore family were established
largely with oil money from Occidental's founder, Armand Hammer. Part
capitalist and part Communist, Mr. Hammer became the elder Gore's patron more
than half a century ago, showering him with riches and nurturing his
political career through the House and Senate.
The elder Gore enthusiastically returned the favors. In the early 1960s,
Sen. Gore took to the Senate floor to defend Mr. Hammer against FBI Director
J. Edgar Hoover, who wanted to investigate Mr. Hammer's Soviet ties.
In 1965, the elder Gore helped Mr. Hammer obtain a visa to Libya, where
he opened oil fields that turned Occidental into a multinational powerhouse.
When the elder Mr. Gore lost his re-election bid in 1970, Mr. Hammer
installed him as head of an Occidental subsidiary and gave him a $500,000
annual salary. The man who had begun his career as a struggling schoolteacher
in rural Tennessee ended it as a millionaire oil tycoon.
The younger Gore also benefited from Mr. Hammer's generosity. He was
paid hundreds of thousands of dollars in annual payments of $20,000 for
mineral rights to a parcel of land near the family's homestead in Tennessee
that Occidental never bothered mining.
When the younger Gore first ran for president in 1988, Mr. Hammer
promised former Sen. Paul Simon "any Cabinet spot I wanted" if he would
withdraw from the primary, according to a 1989 book by the Illinois Democrat.
Mr. Gore and his wife, Tipper, once flew in Mr. Hammer's private jet
across the Atlantic Ocean. They hosted Mr. Hammer at several presidential
inaugurations and remained close to the oilman until his death in 1990.
In 1992, when Arkansas Gov. Bill Clinton was considering Mr. Gore as his
running mate, the elder Gore wrote a memo describing his son's ties to Mr.
Hammer. The document was designed to provide Mr. Clinton with answers to
possible questions from reporters, most of whom did not focus on the
connections after all.
Mr. Hammer's successor at Occidental, Ray Irani, has continued to funnel
hundreds of thousands of dollars into the campaigns of Mr. Gore and the
Democratic Party. For example, two days after spending the night in the
Lincoln Bedroom in 1996, he cut a check for $100,000 to the Democratic Party.
Meanwhile, the vice president has reciprocated in much the same way his
father did decades ago. In 1995, Mr. Gore recommended the sale of the Elk
Hills field, which had been zealously guarded by the U.S. Navy as a strategic
oil supply since 1912.
When the $3.5 billion sale to Occidental went through in 1998, the
Energy Department dispensed with its customary assessment of environmental
impact. Instead, it allowed the assessment to be handled by a private firm
that was run in part by Tony Coelho, who served as Mr. Gore's campaign
chairman until this month.
The privatization of Elk Hills, which covers 74 square miles near
Bakersfield, Calif., was a dramatic departure for the Clinton-Gore
administration, which has used federal funds to purchase vast tracts of
private land in order to block development. |
