Shriver’s principal responsibilities were to bring in new clients and to use his worldwide connections to help companies expand their businesses internationally. He rapidly built a substantial client list and traveled frequently to Europe and Latin America to work on business deals.
Shriver’s most prominent client in his first years at Fried, Frank was Armand Hammer, the billionaire industrialist and financier. Hammer was a notorious character. Born in 1898 in New York to Russian immigrants, he had trained to become a doctor—but an unlikely meeting in Moscow with Vladimir Lenin in 1921 had led to Hammer’s operating an import-export empire out of Moscow. In May 1922, Lenin wrote a secret letter to Joseph Stalin that designated Hammer as the Soviet Union’s official “path” to the American business world. “This path,” Lenin wrote, “should be made use of in every way.” This was the last note Lenin would send to Stalin before the former was incapacitated by a stroke for several months.
With that letter, Hammer’s fortune was made: He was to be America’s official business representative to the Soviet Union. Over the next fifty years, he would exploit this position to its maximum potential, representing hundreds of companies to the Russians and making millions of dollars in profits for himself.
In making his fortune in this way, however, Hammer was forced to make certain ethical compromises. Throughout much of the 1920s, for example, Hammer laundered money for the Soviet government through American banks. By the time Shriver first encountered him in 1971, Hammer had made and lost his fortune several times, married four women (and divorced three of them), and acquired thick files at the FBI, the Securities and Exchange Commission, the CIA, Scotland Yard, and the KGB. At one point in the 1930s the State Department deemed him a national security risk; for some twenty years, he was not allowed to travel outside of the United States. Hammer had also dabbled in art dealing (he brought Fabergé eggs to America), whiskey distilling and distribution, and Democratic politics.
In 1959, at the age of sixty, Hammer bought a small, Los Angeles–based oil company, the Occidental Petroleum Corporation, and over the next decade turned it into a multibillion-dollar international conglomerate. In 1961 Hammer used his political connections in the Kennedy administration to win permission to return to the Soviet Union, to pursue fertilizer deals there. Although the FBI’s J. Edgar Hoover advised Robert Kennedy to bar Hammer from the Soviet Union, adverting to his shady past, Hammer successfully argued that his deals would be “an antidote to communism”—and nearly forty years after his meeting with Lenin he went to Moscow for a summit with Khrushchev.
Not long after Shriver joined Fried, Frank, Hammer retained him as a legal counsel. According to former Occidental employee Carl Blumay, Hammer hired Shriver because he was friendly with a Russian named Dzherman Gvishiani, with whom Shriver had become acquainted while ambassador to France. Gvishiani, in addition to being the deputy chairman of the Soviet State Committee for Science and Technology, happened to be the son-in-law of Soviet premier Aleksei Kosygin and was reputed to have great influence over him. Hammer wanted Shriver to use his relationship with Gvishiani to help expedite some Occidental deals with the Russians.
Why would the idealistic, public-service-minded Shriver enter a professional relationship with a charlatan like Hammer? Partly, he was just doing his job. As long as the work Hammer was asking him to do was not illegal or grossly immoral, Shriver would have had no reason to deny him his services as an attorney. But Shriver also found Hammer to be wonderfully appealing. Hammer, although a small man, was larger than life. He had a colorful personality. He had made millions of dollars. And on top of all that, he could tell stories about Lenin.
In the same way that Shriver had been powerfully drawn to Joseph P. Kennedy, another self-made millionaire, he was drawn to Armand Hammer. And as with Joe Kennedy, although Shriver perceived some of the moral failings behind the charismatic facade, he mostly chose to forgive or overlook them. Men like Joe Kennedy and Armand Hammer had energy; they were exciting to be around; they made things happen. The scope of Shriver’s own idealism was such that he was able to focus on their public-spiritedness—Hammer was a philanthropist, and he cast his business dealings with the Soviets (with some justification) as a means to improve relations between the cold war enemies—while ignoring their craven qualities. David Birenbaum, a partner at Fried, Frank says, “Was Armand Hammer a spy for the Russians? Probably so. Did Sarge know that? Absolutely not. Hammer made all kinds of not just shady deals but fraudulent deals, a lot of bad stuff. Did Sarge know any of that? No. I think Sarge thought of him, perhaps naively, as a buccaneer, as a self-made man. That impressed him.”
In 1971 Shriver introduced Hammer to another larger-than-life businessman, David Karr. Karr was a brilliant, mysterious, complex figure—like someone out of a novel by Graham Greene or John Le Carré. Born David Katz to Russian-Jewish parents in Brooklyn, Karr had begun his professional life as a writer for the Communist Daily Worker in New York in 1936—not, as he would later insist, because of any Communist sympathies but because of his antifascist zeal. Over the next dozen years, Karr worked as a Fuller Brush salesman, an investigator for the Council against Nazi Propaganda, an employee of the Office of War Information, and an aggressive and unscrupulous investigative reporter for the influential columnist and radio personality Drew Pearson. In 1948 he moved into public relations, eventually starting his own company, Market Relations Network. Next, Karr turned himself into an expert on managing proxy fights during corporate takeovers, publishing a book on the subject in 1956. Turning his attention to show business, he produced several movies and Broadway plays before marrying a French woman—his third wife—and moving to Paris, where he set himself up as a financial consultant and entrepreneur.
Shriver and Karr first crossed paths in 1968, when Shriver was ambassador and Karr was involved in a deal to buy three of France’s ritziest hotels, which Charles de Gaulle had decreed should never fall into foreign hands. Karr, Shriver recalled, “was a wheeler dealer. You never knew exactly what the hell he was doing, or who he was with, or what nefarious or glorious thing he was doing. He was an extraordinary, exceptional, brilliant man who didn’t play by any rule book. Some people would say he was a crook. Some people would say he would do anything to make money.”
Shriver’s attraction to Karr was not unlike his attraction to Joe Kennedy and Armand Hammer. When Shriver met Karr he was entranced. “Karr was chiaroscuric,” he told Fortune magazine in 1979, not long after Karr had been found dead in his Paris apartment under suspicious circumstances. (Karr’s widow was convinced he had been murdered by the Russians; others suspected he had been killed by agents of Hammer.) “He sketched out the most imaginative proposals.” Here was a man with energy and creative intellect to match Shriver’s own. With an IQ allegedly measured at genius level, Karr had taught himself dozens of foreign languages, and he was a fixture of the diplomatic social circuit. Everyone in the American expatriate community knew him, as did most of the important French business executives. Whether Karr was a philanthropist and a patriot or a rogue and a spy depended on whom you asked. Karr’s friend Alan Cranston, the liberal California senator, would later say that Karr was devoted to helping Russian Jews and that he “had a strong social conscience that made him an intense promoter of détente” between Russia and the United States. Learning of Cranston’s comments, one of Karr’s business associates scoffed. “When I hear that David Karr was concerned about Russia’s Jews, I smile,” he said. “He was interested in only one thing—money.”
Karr seems to have been as fascinated by Shriver as Shriver was by Karr. Part of Karr’s interest was undoubtedly calculated. Karr attached himself to as many politically powerful people as he could over the years, cultivating relationships with Henry Wallace, Jimmy Carter, Gerald Ford, and Cranston among others. Shriver, as US ambassador and a Kennedy in-law, was in a position to help clear the way with both the French and American governments for some of Karr’s myriad business deals. But Karr genui
nely seemed to enjoy spending time with the ambassador, who shared his endless energy and passion for ideas. Whatever better angels Karr had in him, Shriver drew them out. The two men had spent hours smoking cigars and talking in the ambassador’s office during the years they were in Paris together.
Karr, like Hammer, was pursuing various deals involving Soviet businessmen and in this way had become friends with Vladimir Alkhimov, the Soviet deputy foreign trade minister, who could be helpful in facilitating business matters with the Russian government. Knowing this, Shriver arranged to introduce Karr and Hammer. Instantly perceiving the value of Karr’s connections—and also recognizing that Karr’s expertise on proxy wars could be helpful to him in averting hostile takeover attempts of Occidental—Hammer hired him as a consultant. For a brief period, Hammer, Karr, and Shriver became a three-man team.
They were an unlikely trio—two Jews and a Catholic; two double-dealing businessmen-spies and a morally upright idealist—but the partnership worked. In 1971 Occidental had fallen on difficult times, largely as a result of a worldwide oil glut. So Hammer turned his attention to a series of blockbuster deals in Russia that he hoped would turn his company’s fortunes around. “You’re always talking about your old friend Lenin,” Karr said to Hammer one day when the three men were together. “Let’s go to the Soviet Union and make a deal.” Karr and Shriver worked their contacts in the Soviet and American governments to prepare for the trip. “Hammer knew who to see to make the trip worthwhile,” Shriver recalled, “but we organized it.”
By early July 1972 everything was in order. Hammer had decided that, for symbolic purposes, he wanted to fly to Moscow in his private Gulfstream jet. Shriver and Karr had lunch with Gvishiani in Paris and wrangled permission; it was the first time a foreigner’s private plane would be allowed to fly through Soviet airspace. The only stipulation was that a Soviet crew would have to pilot the aircraft. So in mid-July, just as the Democrats were gearing up for their national convention in Miami, Hammer, Shriver, and Karr flew in Hammer’s aircraft (which included its own Goya painting) to Copenhagen, where it picked up a Russian crew, and then continued on to Moscow.
Once in Moscow, Hammer and his retinue began a series of meetings that introduced them to the heads of eighteen ministries over the course of five days. For Shriver the trip was revelatory, the beginning of a new chapter in his life. “Karr and I,” Shriver recalled, “kind of got pulled along by Hammer like people being dragged along by a high-speed motorboat.” Shriver found he rather liked the Communist bureaucrats he met (and they liked him) and was soon convinced that the United States and Russia could overcome their differences in ideology to achieve a full rapprochement.
Over the next three years Shriver would make multiple trips to the Soviet Union, culminating in an influential lecture tour of the country in 1975. He developed deep and lasting friendships with numerous Communist Party members—such as Eduard Shevardnadze (a Communist Party leader who would later serve as Mikhail Gorbachev’s foreign minister and, after the dissolution of the Soviet Union, as president of the former Soviet state of Georgia) and Andrei Pavlov (the director of the influential State Committee for Science and Technology)—who found that the irrepressible American lawyer was changing their view of the United States.
Shriver so charmed his Soviet hosts that for a brief period in the mid-1970s he may have had more access to high-level Communist Party officials than any other American. He was always watched by a KGB handler, of course, but he was given astonishing latitude to wander around Moscow and do as he pleased. He would stay in a hotel in Red Square and visit his government contacts in the Kremlin, and on several occasions he was even allowed to sit in on meetings of the Politburo.
Shriver’s trip with Hammer in July 1972 seemed at first to be a grand success. At meetings with Communist officials, Hammer would generally begin the proceedings by drawing from his pocket a yellowing piece of paper. “This is one of the letters that Lenin sent to me,” he would say, and from that moment forward the party officials would effectively prostrate themselves before him. Shriver recalled that Hammer used his Lenin connection to the hilt. “We went into Lenin’s little study in the Kremlin and there on his desk sits the little object”—a sculpture of a monkey—“that Hammer had given him. Well, there aren’t many people alive—Russians or non-Russians, Communists or non-Communists—who have a gift sitting on Lenin’s desk.” At a ceremony sponsored by the Committee for Science and Technology, Karr and Shriver watched as Hammer was feted for signing a preliminary agreement on what would eventually be a $20 billion fertilizer deal.
During that same trip, Shriver was inspired to propose the building of a hotel complex in Moscow that would accommodate Western businessmen and at the same time provide them with office space for their companies. “I had been running the Merchandise Mart in Chicago,” Shriver recalled, “and when we were talking about trade, it was almost a knee-jerk reaction for me to make the suggestion.” Shriver knew from the Mart that such a building could be good for business; in this case, by establishing ties between East and West, it could also help international relations. Occidental Petroleum soon announced that it would be the contractor for a $180 million, four-building complex that could provide office space for up to 400 companies, plus apartments, a conference center, a movie theater, and 600 hotel rooms. The World Trade Center, as it came to be called, still stands along the Moscow River.
On the way back from Moscow on July 17, Hammer, Shriver, and Karr stopped in London, where Hammer gave a press conference announcing the biggest deal in history between Russia and the United States; Occidental’s stock shot up 19 percent that day. (Several days later, when it was revealed that the deal was considerably more tentative than Hammer had implied, the stock plummeted.) While Hammer flew to Washington to begin lobbying President Nixon to give him the concessions he would need to make the deal go through, Shriver traveled to Hyannis Port to join his family.
CHAPTER FORTY-FIVE
Shriver for Vice President
In 1972 global communications were in their infancy. There was a “hotline” between the Kremlin and the White House, but beyond that there wasn’t much direct communication between the Soviet Union and the United States. So although Shriver had had a glimmer of major US news events while in Russia—he knew, for instance, that the Democrats had nominated George McGovern for president on July 12—he had not been in contact with his family or with his office. So he was surprised to learn when he returned that on July 13, while he had been meeting with Soviet ministers, both Frank Mankiewicz and Pierre Salinger had placed calls to his office.
Mankiewicz, his former colleague at both the Peace Corps and the OEO, had gone on to work for Bobby Kennedy’s campaign in 1968. Now he was chairman of the McGovern campaign. Salinger, who had worked as JFK’s press secretary, was also working for McGovern. Calls from them on July 13 likely meant one thing: McGovern had wanted to talk to him about being his running mate. And he had missed the call.
But to have missed being on the 1972 ticket did not seem in late July of that year to be such a terrible thing. The prospects for the Democratic ticket didn’t look good. McGovern was trailing Nixon by more than twenty points in the latest polls. And Shriver’s law practice, after all, was thriving.
Shriver had supported Edmund Muskie from the early primaries, believing that he offered the best chance (among a somewhat uninspiring group of Democrats) to defeat Nixon. Shriver liked George McGovern personally—they had first gotten to know each other during the early years of the Kennedy administration, when Shriver was running the Peace Corps and McGovern was in charge of Food for Peace—but he believed, along with most of the political experts in early 1972, that McGovern had little chance of winning the Democratic nomination, let alone the presidency. “George is a good guy,” Shriver was overheard to say at a dinner party, “but I don’t believe he can win.”
Along with just about everyone else, Shriver was caught by surprise when McGovern, propelled b
y his “army” of young campaigners, finished a close second place behind Muskie in the New Hampshire primary and then beat the field in Wisconsin and Massachusetts. After winning a rough showdown with Humphrey in the all-important California primary, McGovern had, against all odds, secured victory. At the convention in Miami, McGovern won the nomination on the opening ballot.
But at what cost? McGovern’s campaign, led by Mankiewicz and Gary Hart, had something of the quality of a guerrilla insurgency. Partly this was because McGovern had been such an underdog going in. Before the New Hampshire primary, he was limping quietly along at less than 5 percent in the polls, behind at least four other candidates. Even after he had jumped to the front of the pack, the McGovern campaign had retained its underdog spirit. (This wasn’t hard, because Nixon seemed poised to defeat any candidate the Democrats sent his way.)
Many of McGovern’s supporters explicitly rejected what they called the “old politics”—the Democratic Party that had supported LBJ on Vietnam and then stood, with Humphrey, on the side of Daley’s police force in 1968. They called for a “New Politics” that drew more on youth, on women, and on minorities. McGovern himself had recently chaired a reform commission for the Democratic Party that sought to address the problems that had been so evident in Chicago in 1968. By 1972 McGovern’s commission had changed the way Democratic convention delegates were selected, creating a system whereby every state had to have a representation of women, young people, African Americans, and other minorities proportionate to their numbers in the general population.
Sarge: The Life and Times of Sargent Shriver Page 72