George Bush: The Unauthorized Biography - Get a Free Blog

abrasive Pennzoil boss was known in the years after he became the first US oilman to
drill in China, thanks to Bush. The only way that Chairman Mao Liedkte could realize his
lifelong dream would be by acquiring a large oil company and using its reserves to build
Pennzoil up to world-class status.
Liedtke was the chairman of the Pennzoil board, and the Pennzoil president was now
Blaine Kerr, a former lawyer from Baker & Botts in Houston. Blaine Kerr was also an
old friend of George Bush. Back in 1970, when George was running against Lloyd
Bentsen, Kerr had advised Bush on a proposed business deal involving a loan request
from Victor A. Flaherty, who needed money to buy Fidelity Printing Company. Blaine
Kerr was a hard bargainer: he recommended that Bush make the loan, but that he also
demand some stock in Fidelity Printing as part of the deal. Three years later, when
Fidelity Printing was sold, Bush cashed in his stock for $499,600 in profit, a gain of
1,900% on his original investment. That was the kind of return that George Bush liked,
the kind that honest activities can so rarely produce. [fn 1]
Chairman Mao Liedkte and his sidekick Blaine Kerr constantly scanned their radar
screens for an oil company to acquire. They studied Superior Oil, which was in play, but
Superior Oil did too much of its business in Canada, where there had been no equivalent
of George Bush's Task Force on Regulatory Relief, and where the oil companies were
still subject to some restraints. Chairman Mao ruled that one out. Then there was Gulf
Oil, where T. Boone Pickens was attempting a takeover, but Liedkte reluctantly decided
that Gulf was beyond his means. Then, Chairman Mao began to hear reports of conflicts
on the board of Getty Oil. Getty Oil, with 20,000 employees, was a $12 billion
corporation, about six times larger than Pennzoil. But Chairman Mao had already
managed to fagocitate United Gas when that compnay was about six times larger than his
own Pennzoil. Getty Oil had about a billion barrels of oil in the ground. Now Chairman
Mao was very interested.
The trouble on the Getty Board was a conflict between Gordon Getty, the surviving son
of the freebooting founder J. Paul Getty, and Sidney Petersen, the chairman of the Getty
Board. Gordon Getty had musical-aesthetic ambitions; but he wanted to be consulted on
all major policy decisions by Getty Oil. Gordon and his wife moved in the social circles
of Graham Allison of Harvard's Kennedy School, Lawrence Tisch of Loewe's
Corporation, and Warren Buffett, the owner of the Berkshire Hathaway investment house
in Omaha. Gordon Getty now controlled the Sarah Getty Trust with 40% of the
outstanding stock. About 12% of the stock was controlled by the Getty Museum.
Chariman Mao Liedtke gathered his team to attempt to seize control of Getty Oil: James
Glanville of Lazard Freres was his investment banker, Arthur Liman of Paul, Weiss,
Rifkind, Wharton, & Garrison was his chief negotiator. Liedtke also had the services of
the megafirm Baker & Botts of Houston.
In early 1984, Gordon Getty and his Sarah Getty Trust and the Getty Museum
represented by the New York mergers and acquisitions lawyer Marty Lipton combined to
oblige the board of Getty Oil to give preliminary acceptance to a tender offer for Getty
Oil stock (a la Gammell once again) at a price of about $112.50 per share. Arthur Liman