Armand Hammer

Armand Hammer was an American businessman and philanthropist.
The son of a Russian-born communist activist, Hammer trained as a physician before beginning his career in trade with the newly established Soviet Union. Having made his fortune in pharmaceuticals and whiskey, he nearly retired before coming into control of the then-failing Occidental Petroleum in 1956. He spent the next 33 years as chief executive officer and chairman of the company, overseeing its growth to become one of the largest companies in the US. Called "Lenin's chosen capitalist" by the press, he was also known for his art collection and his close ties to the Soviet Union.
Hammer's business interests around the world and his "citizen diplomacy" helped him cultivate a wide network of friends and associates.

Early life

Armand Hammer was born in New York City to Rose and Julius Hammer. Rose and Julius Hammer were Jewish emigrants from the Russian Empire, from Vitebsk and Odessa, respectively. Julius Hammer came to the United States in 1875 and settled in the Bronx, where he ran a general medical practice and five drugstores.
Following the Russian Revolution, a part of the Socialist Labor Party of America under Julius' leadership split off to become a founding element of the Communist Party USA, which supported Vladimir Lenin and Bolshevism. As the administrative head, commercial attaché, and financial advisor of the Ludwig Martens-led Russian Soviet Government Bureau, Julius Hammer was assigned to generate support for the Russian Soviet Government Bureau and funded the Soviet Russian Bureau by money laundering the proceeds from illegal sales of smuggled diamonds through his company Allied Drug, while his Allied Drug partner, Abraham A. Heller, headed the Soviet Bureau's commercial department. Julius Hammer and Heller traveled extensively across the United States to stop the embargo of Soviet Russia and to increase United States trade with Soviet Russia and improve the image of Bolsheviks, whom American socialists despised overwhelmingly. During the United States embargo against Soviet Russia, Julius Hammer used his Allied Drug and Chemical as a front to smuggle items and materials between the United States and Soviet Russia through Riga. After the Lusk Committee supported the police raid of the Soviet Russian Government Bureau on June 12, 1919, Ludwig Martens escaped and went underground, often hiding at Hammer's home. On December 18, 1920, Martens was deported; he was returned to Soviet Russia in January 1921.
Hammer said originally that his father had named him after a character, Armand Duval, in La Dame aux Camélias, a novel by Alexandre Dumas. According to other sources, Hammer later was said to be named after the "arm and hammer" graphic symbol of the SLP, in which his father had a leadership role. Late in his life, Hammer confirmed that the latter story contained the true origin of his given name.

Father's imprisonment

Due to his socialist and communist activities, Hammer's father Julius had been put under federal surveillance. On July 5, 1919, federal agents witnessed Marie Oganesoff entering Julius's medical office located in a wing of his Bronx home. Oganesoff, "who had accumulated a life-threatening history of miscarriages, abortions, and poor health, was pregnant and wanted to terminate her pregnancy." The surgical procedure took place in the midst of a great flu epidemic. Six days after the abortion, Oganesoff died of pneumonia. Four weeks after her death, a Bronx County grand jury indicted Julius Hammer for first-degree manslaughter. The following summer, a criminal prosecutor convinced a jury that Julius Hammer had let his patient "die like a dog" and that the claims that she had actually died from complications due to influenza were mere attempts to cover up his crime. In 1920, a judge sentenced Julius Hammer to three and a half years in Sing Sing prison.
While most historians state that Julius had performed the abortion, an opposing position has been put forward by author Edward Jay Epstein, who in his book Dossier: The Secret History of Armand Hammer puts forward the claim that it was Armand Hammer, then a medical student, rather than his father, who performed the abortion and his father Julius assumed the blame. Epstein's claims come from interview comments made by Bettye Murphy, who had been Armand's mistress. According to Murphy and Epstein's account, the legal strategy was that Julius did not deny that an abortion had been performed, but insisted that it had been medically necessary and that a licensed doctor, rather than a medical student, would be more convincing in presenting that argument.

Allied Drug

After the Soviet Russian Government Bureau closed, Allied Drug's smuggling activities between the United States and Soviet Russia ceased, which caused Allied Drug to gain enormous debts from storing large amounts of unpaid items in warehouses in New York and Riga. In March 1921, Ludwig Martens sent a letter from Moscow through the Soviet mission in Tallinn to Julius Hammer, who was imprisoned at Sing Sing until 1924, granting his Allied Drug and Chemical concessions for trade with Soviet Russia and requested an Allied Drug representative to be present in Soviet Russia.
When his father was imprisoned, Hammer and his brother took Allied Drug, the family business, to new heights, reselling equipment they had bought at depressed prices at the end of World War I. According to Hammer, his first business success was in 1919, manufacturing and selling a ginger extract, which legally contained high levels of alcohol. This was extremely popular during Prohibition, and the company had $1 million in sales that year.

Family envoy in Soviet Union

While Julius was imprisoned, he sent Armand Hammer, who could not speak any Russian, to the Soviet Union to look after the affairs of Allied Drug and Chemical. Hammer traveled back and forth from the Soviet Union for the next 10 years. In the meantime, Hammer graduated from Columbia College in 1919 and received his medical degree from the Columbia College of Physicians and Surgeons in 1921.
In 1921, while waiting for his internship to begin at Bellevue Hospital, Hammer went to the Soviet Union for a trip that lasted until late 1930. Although his career in medicine was cut short, he relished being referred to as "Dr. Hammer". Hammer's intentions in the 1921 trip have been debated ever since. He has claimed that he originally intended to recoup $150,000 in debts for drugs shipped during the Allied intervention, but was soon moved by a capitalistic and philanthropic interest in selling wheat to the then-starving Russians. In his passport application, Hammer stated that he intended to visit only Western Europe. J. Edgar Hoover in the Justice Department knew this was false, but Hammer was allowed to travel, anyway. The 26-year-old Hoover, who was the Justice Department's expert on subversives, was tipped off that Armand Hammer was a courier for the COMINTERN and ensured that foreign intelligence agencies were notified of Armand Hammer's travels. A skeptical U.S. government watched him through this trip and for the rest of his life.

Career

Early Soviet ventures

First trip to Russia

After leaving Columbia Medical School, Hammer extended earlier entrepreneurial ventures with a successful business importing many goods from and exporting pharmaceuticals to the newly formed Soviet Union, together with his younger brother Victor. The blockade of Soviet Russia had ended for most items in February 1921, and on July 5, 1921, he departed New York on his first trip to Soviet Russia as Allied Drug's representative in Soviet Russia. Prior to his departure, he visited Charles Recht, Lenin's United States attorney that supported Soviet Russia's best interests in the United States and whose law office was in the same building that the former Soviet Russian Government Bureau had occupied, and Recht gave Hammer a package to deliver to Ludwig Martens in Moscow. During this first visit, Armand Hammer allowed the Cheka, the Soviet secret police who later became known as the KGB, to take control of Allied Drug and Chemical.

Asbestos concession

During his time in Soviet Russia and later the Soviet Union, he perfected bribery and money-laundering techniques, which were exposed later in the 1960s and 1970s during which he tape-recorded his payoffs. After returning to the United States, Hammer stated that Lenin had granted him an asbestos concession for 25 years to mine asbestos from the Urals in Soviet Russia. According to Hammer, on his initial trip, he took $60,000 in medical supplies to aid in a typhus epidemic and made a deal with Lenin for furs, caviar, and jewelry expropriated by the Soviet state in exchange for a million bushels shipment of surplus American wheat.

Lenin New Economic Policy

During Lenin's New Economic Policy, Armand Hammer became the mediator for 38 international companies in their dealings with the USSR. Before Lenin's death, Hammer negotiated the import of Fordson tractors into the USSR, which served a major role in agricultural mechanization in the country. Later, after Stalin came to power, additional deals were negotiated with Hammer as an American–Soviet negotiator.

Hammer's move to Soviet Union

He moved to the USSR in the 1920s to oversee these operations, especially his large business manufacturing and exporting pens and pencils. According to Alexander Barmine, who was assigned by the Central Committee to run the Mezhdunarodnaya Kniga company to compete with Hammer, the stationery concession to produce such items in the Soviet Union was actually granted to Julius Hammer. Barmine states the party spent five million gold rubles on stationery supplies made in factories controlled by Julius Hammer and other concessionaires, making them rich. Barmine further contends that the Soviets were eventually able to duplicate certain items such as typewriter parts and pens, and end those concessions, but were never able to match the quality of Hammer's pencils, so that concession became permanent. Armand Hammer remained in the Soviet Union until 1930.