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Gordon Getty's Gamble : Today, Two Giant Oil Companies Fight Over the Remains of Getty Oil, and the Multibillion-Dollar Getty Family Trust Is Tied Up in Lawsuits. That Isn't Quite What Gordon Getty Planned.

To be concluded next week .

May 10, 1987|STEVE COLL | Steve Coll's book, "The Taking of Getty Oil," will be published by Atheneum this summer.

FOR ALL PRACTICAL PURPOSES, THE GETTY OIL CO., A BASTION OF THE DOWNTOWN Los Angeles business community for decades, no longer exists--and perhaps no one regrets that more than Texaco, the New York-based oil giant that swallowed the company whole back in January, 1984. These days, Texaco is suffering from a kind of acute corporate food poisoning. Racked by a record-setting $10.53-billion jury verdict awarded to Pennzoil for damages suffered in the Getty Oil deal, Texaco last month filed for bankruptcy, the largest company ever to seek such protection.

That Texaco should face extinction because of its appetite for Getty Oil is a bitter irony for the deposed executives who once ran J. Paul Getty's oil empire from its headquarters at Wilshire Boulevard and Western Avenue. For it was precisely their own overthrow at the hands of Gordon P. Getty, J. Paul's youngest surviving son, that led to Texaco's present troubles. What follows is the singular story of Gordon Getty's foray into the treacherous waters of high finance, an adventure that would irrevocably change the landscape of corporate America.

ON MAY 10, 1982, A BOMBASTIC, curmudgeonly, little-known attorney named C. Lansing Hays died at the age of 66 in a Monterey hospital. With him passed the lingering ghost of J. Paul Getty, the tycoon once regarded as the world's richest man, who through hardness of spirit and unfathomable devotion to profit built Getty Oil into a multibillion-dollar financial empire.

Ever since J. Paul Getty died in 1976, Lansing Hays had functioned as a kind of surrogate for the old man, as J. Paul was called, controlling both the direction of Getty Oil and the power of the Getty family trust's 40% stock position. Hays' aggressive personality had, in effect, postponed the impact of the old man's death on the company and on the trust. Hays was, J. Paul once remarked, "my great friend and attorney par excellence," and that endorsement endowed him with extraordinary power for someone who had never been an officer or employee of Getty Oil. For many years, Hays' only official connection to the company was his role as chief outside counsel, based in New York. Later, he joined the board of directors and became co-trustee of the $4-billion Sarah C. Getty Trust, which held most of the Getty family fortune. But Hays' power at Getty Oil had never been exercised through official channels. It depended not on title but on intimidation.

Hays often treated Sidney Petersen, Getty Oil's chairman and chief executive, with open contempt. He publicly humiliated Dave Copley, the company's vice president and the man ostensibly in charge of Getty Oil's legal strategy. But Hays also effectively dominated his co-trustee, Gordon Getty, minimizing his influence on the company. Hays' death left Getty in sole control of the immense trust, and if Getty Oil's top executives thought they could manipulate the Getty scion the way Hays had, they were in for a surprise.

Ever since he had joined the Getty Oil board of directors at Lansing Hays' insistence, Gordon, the old man's second son by his fourth marriage, had been an inscrutable and sometimes distracting presence at the company. He was a tall, gangly man, 6 feet, 5 inches, with a curly mop of dark hair that draped over his brow, contributing to the general impression of an oversized Muppet. Graying sideburns added years to his otherwise boyish face. His nose and fingers were gracefully long and thin. His appearance, clothes and manner combined to create an image that the younger Getty himself enjoyed, and perhaps even cultivated: the absent-minded professor. High-ranking Getty Oil executives remarked that sometimes when you met Getty, he acted as if you were his dearest, oldest friend, but the next time he would seem not to remember your name. He was often late to meetings and, to veteran Getty Oil executives and directors, appeared to have little familiarity with business protocols. Once at a board meeting, he had gone into a side room to make a call on a then-new credit-card telephone. After what seemed a prolonged absence, a Getty Oil executive looked in, and there was Getty with half a dozen consumer and department store credit cards strewn on his lap, complaining that he couldn't figure out how the damn phone worked.

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