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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.

"It might be appropriate if Mr. Getty was named chairman of the company," Lasky said not long after they got under way. "It would be more of an honorary title--Gordon is not interested in running the company day to day. But the title would be helpful in relations with management." Lasky emphasized to Petersen that the chairman now had to be very careful about his manner and attitude toward Getty. "Look, if you fellows just drop these ideas that you have about Gordon, recognize that he does represent ownership of a large part of the company, and if you don't treat him with disdain, you're going to have no trouble at all," he continued. "Gordon does not want your job, Sid. In my judgment, that shouldn't even cross anybody's mind."

Petersen said little, but as the dinner went along, he became more and more alarmed. A company man who had risen through Getty Oil's ranks during a 25-year career, he thought he saw the wheels turning in Moses Lasky's head: Lasky, he believed, was out to be the power behind the throne. He was going to try to replace Lansing Hays as the man who controlled Gordon Getty's wealth and power, and through Getty, the company. At the same time, Petersen was not in a panic about Getty's new role. He believed that with patience and diplomacy and a little toughness, he could work with him, that he could control Gordon Getty on his own.

THAT PETERSEN WAS WRONG first became evident in September, 1982, when the chairman met Getty at the Phoenix airport one afternoon. The pair shared a cab to the headquarters of Greyhound Corp., where they were to interview a prospective Getty Oil director, John Teets, Greyhound's chief executive. Getty had spent the previous two weeks in New York.

"I had a very interesting meeting with Bill Tavoulareas," Getty said early on during the cab ride, referring to the iconoclastic president of Mobil Oil. "He made a number of interesting suggestions about what we should be doing."

Suggestions? Visited by a 40% stockholder of a rich, rival oil company and asked for his opinions about what that company should do, the acquisitive Tavoulareas had made a few suggestions? Petersen could imagine the dollar signs dancing before the Mobil president's eyes as he sat with Gordon Getty in his office. What had Getty been doing there? What could he have been thinking?

Petersen said nothing, and as Getty talked, it became clear that Tavoulareas was not the only one he had asked for advice during his Manhattan sojourn. Getty said that he had also met with some Wall Street investment bankers and had asked them what strategies Getty Oil should pursue to raise the price of its stock.

This news was nearly too much for Petersen to bear. Investment bankers--some of those people would sell their grandmothers to get a merger or takeover deal under way. That fall, Wall Street's investment banking houses were at the center of an unprecedented merger mania encouraged by lax antitrust enforcement and the declining competitiveness of American industry. Merger fever was washing over industries like an irresistible tidal bore, shifting from sector to sector as Wall Street's fashions turned. Media companies, food companies, paper companies, entertainment companies--whole industries became "hot," in Wall Street parlance, as if the destiny of American business were like hemlines or tennis-shoe brands. Now oil companies were hot, scorching hot. For Gordon Getty, a 40% stockholder in one of America's biggest oil companies, to wander through investment houses soliciting advice on how to raise the price of Getty Oil stock--well, he might as well have hung a "For Sale" sign around his neck.

The contrast between Gordon Getty's blithe, open attitude and Sid Petersen's tense, tight-lipped concern was growing wider as the days passed. In part, this gulf was a result of Petersen's careful demeanor around Getty, his unwillingness to raise his voice, his attempt to show Getty the respect urged by Moses Lasky. It was also a reflection of Getty's apparent inability to sense that Petersen was harboring anger and anxiety behind his respectful veneer. Later, Getty and his advisers would call Sid Petersen "two-faced," and it was in some ways a just accusation, since Petersen felt deep misgivings about Gordon Getty and yet showed him little of his brewing emotion. Petersen festered, as Getty himself would put it. But after all, Lasky had warned in May that if the company's management thought poorly of Gordon and his ideas, Lasky hoped they would not show their displeasure. Petersen was merely following Lasky's advice.

In December, Petersen learned that Getty had contacted Corbin Robertson, head of Quintana Petroleum, a large, aggressive, privately held oil concern. Robertson had proposed that Getty combine with Quintana to take control of Getty Oil. This was worrisome enough, but Petersen also suspected that Getty was providing Robertson with confidential internal studies about Getty Oil's operations, finances and oil reserves.

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