Palisades Drilling Decision : The Well-Oiled Blitz of Armand Hammer

On Jan. 12, Mayor Tom Bradley committed, in the words of an exasperated adviser, an act of “political idiocy.” On that date, Bradley gave his long-withheld blessing to Occidental Petroleum Corp.’s plan to sink wells deep under the oil-rich bluffs of exclusive Pacific Palisades.

The approval, a stunning flip-flop, produced a wave of charges from drilling foes that Bradley had become a dupe for major oil interests, that he had traded the environment for a promise of future campaign support from Occidental--charges the mayor emphatically denies.

The decision was a blow to Bradley’s strategists, who had begun packaging him as a tough-minded environmentalist for another gubernatorial bid in 1986.

Shrewdly Engineered

But it was a tribute to the determination of Occidental chief Armand Hammer and the effectiveness of a campaign he shrewdly engineered to win the backing of the City Council and the mayor.

Although Bradley and Hammer declined interviews, others provided this glimpse of some of the people, tactics and forces that shaped the debate, leading to the council’s 10-4 approval of the plan and, ultimately, the mayor’s signature:

Simply put, they say, Hammer outspent, outmaneuvered and outlasted his increasingly weary opponents--most of them Palisades residents--who said they were fighting to protect their seaside neighborhood from scenic blight and environmental dangers.

Hammer reached high into California’s political, business and labor establishment for help in his blitz on the bureaucracy. He hired one of the state’s most politically potent law firms for its legal expertise and, some think, its muscle in the Democratic Party, of which the ambitious Bradley is a member.

Along the way, Hammer put on Occidental’s board of directors C. Erwin Piper, the city’s former administrative officer, who attended City Council hearings on the drilling application. The company also used Bonnie Reidel, a former city planning commissioner, as one of several well-connected lobbyists.

Even former Gov. Edmund G. Brown Jr. and U.S. Sen. Alan Cranston would see brief action before the battle was over. So too would a few wealthy Jewish businessmen, apparently convinced by Hammer that the Palisades project would enhance Israel’s security by making the United States less dependent on Arab oil.

The lobbying effort was finely tailored to its targets. Certain City Council members, for example, were called by personal friends who had been drafted by Occidental to push the company’s case.

Hammer, it seems, never missed a chance to impress and influence.

The 86-year-old industrialist invited the entire City Council to his last two birthday parties--elegant affairs with entertainment by the Los Angeles Chamber Orchestra and Mstislav Rostropovich, the internationally acclaimed Russian cellist.

The guest list included about 100 members of “Los Angeles society’s creme de la creme, “ said Councilman Zev Yaroslavsky, an Occidental opponent, “and 15 members of the Los Angeles City Council.”

Shortly before the council’s vote in January, Hammer did a very special favor for Councilman Robert Farrell, a solid Occidental backer. At Farrell’s request, Hammer arranged for the city councilman to get personal audiences with both Israeli Prime Minister Shimon Peres and Foreign Minister Yitzhak Shamir during a trip to the Middle East.

“He said he would be pleased to help,” Farrell recalled.

Money at Stake

As with most high-stakes City Hall decisions, there also were campaign contributions--tens of thousands of dollars given mostly to lawmakers friendly to Occidental. While the recipients have denied being swayed by the money, Councilman Joel Wachs, an Occidental opponent, says some of his colleagues are not being candid.

“Of course they were influenced by the contributions,” he stated unequivocally, refusing to name names. “City Hall,” quipped another council member, “has given a new meaning to the expression ‘voting your pocketbook.’ ”

When it came to Bradley, Occidental’s operatives played to his sense of fairness and “bureaucratic” instincts, according to a Bradley friend, who opposed the mayor’s decision. They whittled the symbolism out of the issue and got Bradley to focus simply on whether Occidental had satisfied various objections he voiced six years ago in vetoing the project.

Bradley also was convinced, largely by City Council President Pat Russell, a former Occidental opponent who has become increasingly supportive of business interests, that it would be unfair to block drilling in the Palisades with wells pumping elsewhere in the city, including the Venice waterfront.

“That’s like saying if we allow a toxic waste dump in one part of Los Angeles then we should put one in every part of the city,” scoffed a drilling opponent, Rep. Mel Levine, whose congressional district includes Pacific Palisades.

Rich Against Poor

In some corners, the so-called “equity issue” was cast in terms of rich versus poor, of haves and have-nots. Councilman Howard Finn, for example, labeled Occidental opponents “elitists” concerned with one thing: “preserving their views of the ocean and to hell with everybody else.”

Councilman Marvin Braude, a leading Occidental adversary who represents the Palisades area, calls Hammer’s crusade “the greatest lobbying success in the history of Los Angeles. And whatever it cost, Armand Hammer got value.”

But beyond the lobbyists and the lawyers, the pros and the cons, players on both sides believe that one man, Hammer himself, may have given Occidental the edge in a decision that could have gone either way.

His troubles with City Hall notwithstanding, Hammer is considered one of the most powerful and cunning capitalists in the world. He has forged business ties and friendships with generations of government leaders on both sides of the Iron Curtain. Occasionally, he is used as a conduit between the Soviet Union and the United States on matters no less important than world peace.

Just recently, for example, Hammer received a personal letter from Anatoly F. Dobrynin, Soviet ambassador to the United States, pledging that his government would not be the first to use nuclear weapons and urging the Reagan Administration to do the same.

Money for Charity

Closer to home, Hammer lavishly has spent millions of dollars on charitable causes, cancer research chief among them. In Los Angeles, his name adorns everything from a building at the Los Angeles County Museum of Art to a city-run, par-three golf course in Holmby Hills that was going to be closed until Hammer promised to kick in nearly $10,000 a year for its maintenance.

“Armand Hammer has not done one bad thing for the city, except force that damn oil well on us,” a top mayoral strategist said.

In fact, it was Hammer whom Bradley turned to last year for help in a last-ditch effort to persuade the Soviets to come to the Los Angeles Olympics. And it was Hammer who succeeded, where the mayor failed, in wrangling two pandas from the Chinese government in time for the Olympic Opening Ceremonies.

“There is a certain magic to Armand Hammer, and this time the magic worked,” concluded Assemblyman Gray Davis (D-Los Angeles), who opposed the drilling, arguing that it would jeopardize a moratorium on oil exploration in Santa Monica Bay. “I believe in the end, it was a one-man show.”

Perhaps, but Hammer was not taking chances. He assembled an impressive supporting cast to get his point across.

Getting and Giving Favors

Some of Hammer’s operatives were employed by Occidental and publicly identified with the project. Others, however, discreetly volunteered their services for reasons as diverse as admiration, fear or a way to return--or get--a favor.

Wachs said he was contacted by “maybe a half dozen influential, prominent” people pushing Occidental’s side. They came from “very different walks of life,” Wachs said, and most of them were the councilman’s friends, who apparently were “prevailed upon (by Hammer) to call.”

Occidental, Wachs said, “had people who could have your ear.”

Though quietly undertaken, this part of Hammer’s effort spoke loudest of the breadth of his clout and connections.

One of Hammer’s helpers was ex-Gov. Edmund G. Brown Jr.

Brown recently acknowledged in an interview that with Hammer’s encouragement, he called Yaroslavsky to discuss “the general subject matter” of Occidental’s drilling proposal. “Hey, he wants every vote he can get,” Brown said of Hammer.

The former governor denied trying to influence Yaroslavsky and evaded questions about where he personally stood on Occidental’s proposal, saying: “I haven’t expressed a public opinion on it.”

Had Some Questions

Yaroslavsky, for his part, was reluctant to discuss the “confidential” conversation. He would say only that the former governor asked “rhetorical questions, such as, ‘Isn’t the opposition more related to symbolism than to the merits of the project?’ I certainly didn’t have the impression he was lobbying against the drilling, although he never actually asked me to vote for it.”

Brown describes Hammer as “a good friend” and “one of the real great citizens of our state and nation.” In 1982, after his defeat for the U.S. Senate, Brown placed Hammer on the board of advisers of a think-tank he created. Last September, Hammer helped arrange for Brown to meet with top government officials in the Soviet Union.

On another occasion, Hammer put the touch on Cranston. Cranston has conceded that he called Bradley at Hammer’s request, but insists it was only to inform the mayor that the oil mogul would soon be calling.

Also working in the shadows were a few prominent businessmen who on at least one occasion were summoned by Hammer to Occidental’s Los Angeles headquarters. There, Hammer passionately argued the merits of his case over a lunch of fine food, according to a businessman familiar with the meeting.

Willing to Help Him

When Hammer had finished, he asked for something that surprised no one. He asked for help. And the men obliged. They went to work making phone calls and meeting lawmakers for lunch, where the topic of Occidental crept in before the tab arrived.

“To be owed a favor by Dr. Hammer is not exactly the worst thing in the world,” explained the businessman. “Everybody considers him a head of state without portfolio. He’s a legend.”

And not everyone, apparently, is anxious to cross a legend.

Braude said he was given this response after asking a top Los Angeles Area Chamber of Commerce official why he supported Occidental: “Well, you know we can’t offend Armand Hammer.”

Although names and details are hard to come by, two knowledgeable sources said that developer Guilford Glazer was a principal player behind the scenes. Glazer, who owns, among other things, Del Amo Fashion Center, the world’s largest mall, “marshaled all the forces he could to get this thing approved,” one of the sources said.

Glazer is an ardent supporter of Israel and a man said to consider himself a Hammer intimate. He sits on the board of Hammer’s United World College in New Mexico.

Security for Israel

Along with Columbia Savings & Loan Chairman Abraham Spiegel, Glazer advanced the argument that a vote for Occidental was a vote for Israeli security, the sources said. Besides making the United States less reliant on Arab oil, the men claimed that Hammer was considering drilling for oil in Israel, one of the sources said. But first, Hammer wanted to know he had support from Jews in his own backyard.

Glazer refused to return numerous phone calls seeking confirmation of his activities for Hammer.

Spiegel, a Bradley contributor who financed a Coliseum memorial for Israeli athletes slain during the 1972 Munich Olympics, called Occidental’s project “a worthwhile deal for the city.” But Spiegel said he shared that opinion only “when someone asked.” He declined further comment.

One of Hammer’s best and most controversial moves in the Palisades battle came in 1982, when he hired the powerhouse law firm of Manatt, Phelps, Rothenberg & Tunney, which is packed with Democratic political heavyweights.

Essentially, the firm headed up Hammer’s final push, crafting legal documents, buttonholing policy makers and devising ways to satisfy safety and liability questions raised by project adversaries.

The firm’s letterhead includes, among many others, Charles Manatt, former chairman of the Democratic National Committee; John Tunney, former U.S. senator from California; John Emerson, who headed U.S. Sen. Gary F. Hart’s winning presidential primary campaign in California, and Mickey Kantor, who was Vice President Walter F. Mondale’s California campaign chief.

Which Buttons to Push

Kantor, for the most part, oversaw the Occidental lobbying campaign--a good choice for the job, according to one top City Hall official, because “he knew what buttons to push and who should see who.”

The entrance of Manatt, Phelps, Rothenberg & Tunney into the fray sparked charges from drilling opponents that Hammer was trying to extort Bradley’s approval by hiring men important to the mayor’s fund-raising base and future political career.

But Kantor and others dismiss that charge. They argue that the negative fallout from Bradley’s decision outweighed any political and financial support that Occidental or Manatt, Phelps could provide. Moreover, they say, Bradley would be flirting with scandal if he fattened his campaign bank account with money from Occidental or related interests.

“Everybody is looking for shadows and shades that just aren’t there,” Kantor insisted in a recent interview. “There are no dogs here who aren’t barking. Everything is out in the open.”

Citing the lawyer-client privilege, Kantor refused to discuss the full scope of Occidental’s lobbying effort. However, he said, “in general when you try to convince public officials of the worth of a project, you do it with people who have credibility, who are important members of the community, who agree with you and can articulate the problem.”

While it is difficult to assess the role of politics in all this, one thing seems clear: Kantor and his associates gave the mayor some factual basis upon which to hang his decision. And without that, Hammer may have come up dry again.

Occidental resolved--though certainly not to everyone’s satisfaction--objections that Bradley had voiced to the project. The oil company promised, for example, to stabilize the fragile cliff above the drilling site with a water drainage system and ensure the city against damage suits should that system cause a landslide.

By detailing objections to the proposal instead of taking a firm symbolic stand against all coastal drilling, Bradley “trapped himself,” according to a longtime adviser. He was forced to play by the rules he set, said the adviser, who asked not to be named.

So effective was Occidental’s approach with Bradley that the mayor ignored the advice of his own staff, undercutting their strategy to resurrect his dream of higher office, which temporarily died in his razor-thin 1982 gubernatorial defeat by Republican Gov. George Deukmejian.

Bradley’s advisers had concluded after the election that their man needed to bolster his support among environmentalists before a rematch in 1986, according to a trusted member of the Bradley inner circle.

By late 1984, the strategy apparently was in full swing. Bradley had accused the governor of failing to clean up toxic waste dumps; he had voiced concerns in Washington about Los Angeles Harbor pollution, and he had proposed a lawsuit aimed at strengthening federal air quality standards for offshore oil drilling.

Then came his unexpected decision not to veto the City Council’s vote for Occidental.

“I think it was one of the worst political decisions anybody could make,” said the Bradley confidant, who asked to remain unnamed. “It went contrary to everything that everybody agreed was necessary for him to do as a candidate for governor.”

In his current campaign against mayoral rival Councilman John Ferraro, Bradley has indicated that he does not plan to run for governor again, but has not ruled out the possibility.

Environmentally, Bradley’s Occidental decision was not much better, in the view of the mayor’s chief of staff, Tom Houston.

“There are a lot of people out there dying to develop the coastline. . . . You don’t want to do anything to encourage people to take advantage of what they see as an opening in the ranks,” Houston said, adding: “I have to stretch my imagination to see a positive” side of Bradley’s decision.

THE KEY PLAYERS