Armand Hammer
On the 5th of July 1919, federal agents watched a thirty-three-year-old woman named Marie Oganesoff enter the medical office of Julius Hammer in the Bronx. She had suffered multiple miscarriages and was pregnant during the height of a flu epidemic. The surgical procedure took place inside that office while pneumonia spread through the city. Six days after the operation, Oganesoff died from complications. Four weeks later, a grand jury indicted Julius Hammer for first-degree manslaughter. A prosecutor convinced a jury that the patient had been allowed to die like a dog rather than succumbing to influenza. In 1920, a judge sentenced Julius Hammer to three and a half years in Sing Sing prison.
This criminal case formed the foundation of Armand Hammer's life story. Some historians believe his father performed the abortion, while others claim young Armand did it himself. Author Edward Jay Epstein suggested that the family strategy involved the father taking the blame because a licensed doctor would be more convincing in court. Regardless of who actually cut into Oganesoff, the event forced the younger Hammer to take over Allied Drug at age twenty-one. He inherited a business with enormous debts and a father behind bars.
In July 1921, the twenty-six-year-old Armand Hammer departed New York on his first trip to Soviet Russia as a representative for Allied Drug. He carried $60,000 worth of medical supplies intended to help fight a typhus epidemic. During this initial visit, he met Vladimir Lenin and struck a deal involving furs, caviar, and jewelry expropriated by the Soviet state. The agreement exchanged these goods for one million bushels of surplus American wheat. This transaction became known as the first major trade between the United States and the newly formed Soviet Union.
Hammer traveled back and forth from the Soviet Union for the next ten years despite not speaking Russian. J. Edgar Hoover knew Hammer was traveling under false pretenses regarding his passport application which claimed he only visited Western Europe. The Justice Department notified foreign intelligence agencies about Hammer's travels throughout his life. He perfected bribery techniques during these early ventures that were later exposed in the 1960s and 1970s when he tape-recorded his own payoffs. These activities established him as a go-between for international companies dealing with the USSR.
Lenin granted Hammer an asbestos concession lasting twenty-five years to mine rock from the Urals region of Soviet Russia. This arrangement allowed Hammer to establish a foothold in the Soviet economy while other American businesses faced embargoes. He moved to the USSR in the 1920s to oversee operations including large-scale manufacturing of pens and pencils. Alexander Barmine stated that the party spent five million gold rubles on stationery supplies made in factories controlled by Julius Hammer and other concessionaires. The Soviets eventually duplicated certain items like typewriter parts but could never match the quality of Hammer's pencils.
This concession became permanent even after Stalin came to power. Hammer remained in the Soviet Union until 1930, building relationships that would last decades. He received Fabergé eggs between 1930 and 1933 which some sources claim were fakes created with tools provided by Stalin's trade commissar Anastas Mikoyan. A 1938 New York sale grossed several million dollars involving both authentic and inauthentic items called Fauxbergé. These transactions demonstrated how Hammer navigated the complex world of Soviet-American trade during the interwar period.
In 1956, Armand Hammer obtained control of Occidental Petroleum when it was still a failing company. He served as chief executive officer and chairman for thirty-three years transforming it into one of the largest companies in the United States. Arthur Andersen acted as Oxy's auditor while National Geographic described Hammer as a pioneer in the synfuels boom. His oil investments broke the tight grip major domestic producers had on prices and gave OPEC more control over global markets.
Libya nationalized fifty-one percent of Oxy holdings in 1973 following Muammar Gaddafi's rise to power in September 1969. Hammer announced a thirty-five-year oil exploration agreement with Libya in 1974. By that deal eighty-one percent of extracted oil went to the Libyan government while only nineteen percent remained with Occidental Petroleum. The Libyan government continually threatened assets forcing the company to give in to demands. This relationship defined Hammer's approach to international business where he prioritized long-term access over immediate profit margins.
Six weeks before Richard Nixon departed Moscow in June 1972, Hammer personally gave Maurice Stans forty-six thousand dollars in cash from a numbered Swiss bank account. In September 1972, Hammer made an additional three illegal contributions totaling fifty-four thousand dollars through friends of Tim Babcock. Both men pleaded guilty to charges involving these illegal contributions to Nixon's Watergate fund. Hammer received probation and a three-thousand-dollar fine for his actions. President George H.W. Bush pardoned him in August 1989 for the illegal donations made to aid Nixon's re-election.
Hammer negotiated a twenty-year fertilizer agreement with Leonid Brezhnev signed in April 1973. The deal involved exporting phosphate mined in northern Florida to the Soviet Union in exchange for natural gas converted into ammonia potash and urea. The Export-Import Bank financed part of the deal valued at twenty billion dollars over two decades. Construction began on four ammonia plants in the greater Volga region connecting them via pipeline to Odessa. The port of Pivdenny opened operations on the 27th of July 1978 near Grigorievka serving vessels with drafts up to specific limits.
Hammer donated his personal collection forming the core of the permanent display at the UCLA Hammer Museum in Los Angeles. He purchased Knoedler Gallery in 1971 hiring art historian John Richardson as director who later called Hammer a veteran con man. His collection included Impressionist and Post-Impressionist paintings spanning four centuries of masterpieces published by the Armand Hammer Foundation. Together with his brother Victor he owned the Hammer Galleries in New York City before selling it.
In 1981 Hammer helped found the Armand Hammer United World College of the American West supported by Prince Charles. He gave strong financial support to Prince Charles's projects worth nearly forty million pounds plus free use of his Boeing 727 aircraft. Hammer served on the President's Cancer Panel appointed by Ronald Reagan in 1981 announcing a campaign to raise one billion dollars annually to fight cancer. Forbes magazine estimated his net worth at two hundred million dollars in 1986. These philanthropic efforts balanced his controversial business practices throughout his life.
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Common questions
What happened to Julius Hammer in 1920?
A judge sentenced Julius Hammer to three and a half years in Sing Sing prison. He was convicted of first-degree manslaughter after Marie Oganesoff died from complications following an abortion procedure he performed.
When did Armand Hammer make his first trip to Soviet Russia?
Armand Hammer departed New York on his first trip to Soviet Russia in July 1921. During this visit he met Vladimir Lenin and struck a deal involving furs, caviar, and jewelry expropriated by the Soviet state.
How long did Lenin grant Armand Hammer an asbestos concession?
Lenin granted Hammer an asbestos concession lasting twenty-five years to mine rock from the Urals region of Soviet Russia. This arrangement allowed Hammer to establish a foothold in the Soviet economy while other American businesses faced embargoes.
Why did Armand Hammer receive a pardon from President George H.W. Bush?
President George H.W. Bush pardoned him in August 1989 for illegal donations made to aid Nixon's re-election. Hammer received probation and a three-thousand-dollar fine for these actions which involved contributions totaling fifty-four thousand dollars.
What agreement did Armand Hammer sign with Leonid Brezhnev in April 1973?
Hammer negotiated a twenty-year fertilizer agreement with Leonid Brezhnev signed in April 1973. The deal involved exporting phosphate mined in northern Florida to the Soviet Union in exchange for natural gas converted into ammonia potash and urea.