Occidental, Not Hammer’s Foundation, Purchased Art

Occidental Petroleum Corp.--and not the personal foundation of its chairman, Armand Hammer--paid $5 million to acquire an important collection of drawings by Leonardo da Vinci that was renamed in Hammer’s honor and represented as part of his foundation’s art collection, according to court documents unsealed Thursday.

Books and brochures published by the Armand Hammer Foundation maintained that it had purchased the sketches in 1980 without mentioning Occidental’s contribution.

The new court documents, however, show that the purchase of the sketch collection, which was renamed the “Codex Hammer,” was part of a pattern of extensive commitment of Occidental Petroleum funds to Hammer charities over the last 10 years.

The records are part of a court file assembled in Delaware Chancery Court in a shareholder lawsuit that seeks to block Occidental’s commitment of between $55 million and $160 million to construct and endow the Armand Hammer Museum of Art and Cultural Center under construction in Westwood.

Hammer announced that he would build the museum in early 1988 when he severed a commitment to donate his extensive art holdings to the Los Angeles County Museum of Art.

The shareholder suit claims that Occidental’s gifts are a waste of corporate assets and glorify the 90-year-old Hammer without significant benefit to the company.

Disclosure of the source of money used to acquire the Da Vinci sketches came in Hammer’s sworn deposition and in a sworn supporting statement by a longtime business associate, former U.S. Sen. Albert Gore.

The court records include a summary of Occidental Petroleum expenditures on Hammer-controled charitable institutions from 1982 to 1989. The summary shows the oil company, after votes of its board of directors, gave nearly $33 million to four organizations associated with Hammer--two of which bear his name.

Together, the details about Occidental’s financial commitments to Hammer-controlled charities and the oil company’s role in paying for a major component of his art collection provide a new perspective on questions raised last month by the judge hearing the shareholder lawsuit.

Vice Chancellor Maurice Hartnett, the judge in the case, turned down a request to issue an injunction against continued Occidental financing of the Hammer museum and, in doing so, noted that the litigation involved “the most unusual and troubling circumstances” and “the issue of who really owns the art.”

The deposition in which Hammer maintained that the donation was from his foundation was among hundreds of pages of court records released here in response to a petition filed by The Times and the Wall Street Journal to void a secrecy agreement by the parties in the suit. A judge here lifted the agreement Thursday after attorneys for Hammer, Occidental and dissident shareholders involved in the lawsuit decided not to oppose the motion by the newspapers.

The court records show that Hammer hired an architect to design his museum in 1987 and that some construction work was begun before the Occidental Petroleum board formally approved the project, although the board’s executive committee had approved at least some preliminary work at the time.

Records in the Delaware litigation also contain new insights into the enmity displayed by Hammer when he withdrew the promised donation of his collection to the county museum. The decision came after museum administrators balked at meeting his demands for stripping existing galleries of the names of previous donors and devoting an entire wing of the museum to Hammer’s art. He also insisted that no other work could ever be displayed with the Hammer collection.

In his sworn statement, Hammer characterized county museum director Earl Powell as a man of “not very good” integrity.

“It seemed to me they (the county museum) were treating me not as a donor but as somebody that frankly they could push around,” Hammer recalled, “and I wasn’t going to be pushed around.

“The only one that’s going to suffer is LACMA (Los Angeles County Museum of Art). If they hadn’t been so arrogant and had been more appreciative of what I was trying to do, they would have had the collection, because it was always my intention to give it to them, and it was only when they acted in such a cavalier manner . . . that I had to look for other alternatives.”

The court records also indicate that Occidental--and not Hammer or his foundation--was the source of a $2-million gift to the county Museum of Art in 1980 to construct a bridge connecting two wings of the museum and an escalator to serve a second-floor exhibition area.

In a 1980 press release issued by the Armand Hammer Foundation announcing the gift and in a deposition Hammer gave at his Los Angeles office in June, Hammer maintained that he had financed the gift himself or through the foundation. The court records and museum financial data indicate that the $2 million in question was Occidental’s money, paid out in checks drawn on an Occidental Petroleum bank account in Albany, N.Y.

In the newly released deposition, taken June 28, Hammer at first insisted that the $2 million in question was his own money. But when attorney Sidney Silverman, representing dissident shareholder Alan Kahn, showed Hammer financial records indicating that the money was Occidental’s, Hammer corrected his testimony and agreed that the oil company had financed the gift.

The county museum said Occidental is credited as a donor to the project on a plaque mounted on a wall near the escalator.

Occidental Petroleum financial records show that, of the $32.8 million it donated in a seven-year period ending earlier this year to four charities associated with Hammer, $5.9 million went directly to the Armand Hammer Foundation and another $20 million was given to the Armand Hammer United World College in Arizona.

In 1985, a year in which Occidental made a total of $16.3 million in charitable donations--$13.3 million of it to Hammer-associated organizations--the total represented 6.33% of the total money paid out as dividends to Occidental shareholders.

Asked to summarize his philosophy about charity, Hammer told Silverman in the deposition that “in general, it’s always been my intention to give away most of my wealth for good purposes, including establishing works of art, gifts of works of art to other museums, which I’ve done.”

“And I believe works of art do not belong to any individual. They are only loaned to us. They are works of the artists who have created them, and they belong to all the people of the world for--in perpetuity,” he said.

Hammer could not be reached by The Times for comment.

A Securities and Exchange Commission filing not included in the court papers but obtained by The Times indicates that in the event of Hammer’s death, Occidental Petroleum is obligated to continue paying Hammer’s salary to the foundation until February, 1998. The filing discloses that Hammer is paid $1.065 million yearly. The court documents indicate that he gets roughly an equivalent amount in stock options each year.

The newly released documents also contain new details about Hammer’s quest for a pardon in the wake of his 1976 guilty plea to misdemeanor charges involving $54,000 in illegal contributions to President Richard M. Nixon’s 1972 campaign.

Hammer received the pardon Monday from President Bush. The court documents indicate that he was assisted in the pardon effort by Philadelphia attorney Bruce Kauffman.

Kauffman was also retained by Occidental’s board to conduct a disinterested legal evaluation of potential pitfalls in the plan for Occidental to finance the Hammer museum in Westwood.

The discussion of Hammer’s pardon arose in questioning over whether Kauffman could have served as a disinterested agent of Occidental while he was assisting Hammer in his pardon petition to President Bush.

In the deposition, Hammer contended that former Montana Gov. Timothy Babcock, who was also convicted in the case and served a four-month jail term in 1974, “stole” the cash Hammer gave Babcock to be turned over to the Nixon campaign.

“He never turned it in,” Hammer said of the ill-fated donation. “I had no idea that the former governor of the state of Montana would turn out to be a crook. And that’s what he was.”

Staff writer Michael Cieply contributed to this story.