"You talked to the Minister, didn't you?"

"Yes sir."

"He's getting paid isn't he?"

"You betcha."

"Well, then why in the hell wont he deliver? This isn't such a big thing."

"Yes it is to them. It's beyond their powers. It's strictly political."

[A moment later]

"... Well, you know what I would do? I hate discussing this but maybe you're not paying this Minister enough."

"I don't think its under the decision."

"How much are we paying?"

"The total amount of money?"

"Yeah."

"We've paid 3 million dollars."

The first voice is that of Armand Hammer, the industrialist, art collector and philanthropist, who died in 1990. At the time this conversation took place in November 1971, he was Chairman of Occidental Petroleum. He has invited the second man to his home in Los Angeles to discuss a highly sensitive subject-- the bribing of high officials in Venezuela. As he has done on other such occasions, he surreptitiously records what is said through a microphone concealed in his desk.

The second man, who has a deep southern accent, is John D. Askew. He is Hammer's "conduit and agent." In other words, he is a the bag man.

Askew, a native of Arkansas who has been doing business in Venezuela since 1946, he had sought out Hammer some three years earlier with a proposition. Venezuela then was planning to invite foreign oil companies to bid on developing five large tracts near Lake Maracaibo that contained an estimated 3 billion barrels of oil. These concessions were to take the form of "service contracts" that guaranteed the foreign companies a substantial proportion of the recovered oil for seven years. Even though two international oil companies, Esso and Shell, dominated oil production in Venezuela up until then--and planned to bid on these new tracts, Askew persuade Hammer that he had the connections in Venezuela to win three of the five tracts for Occidental. It would cost $1 million a tract in cash that, as Hammer described it in the taped discussion, was "outside the money that is paid under the contract." In the summer of 1971, it was announced that Occidental's bids had prevailed, and Hammer had to make good on his cash commitments. He transferred the $3 million to Askew along a very convoluted route. It went from the World Wide Trading Corporation, Occidental's Liberian subsidiary, through a shell corporation, called Noark International. Most of it was then channeled into the bank accounts of two Panamanian shell corporations and then withdrawn by unknown individuals in cash.

Hammer now wants to know more about the destination of these payoffs. For him, information has always been a form of power. "How is that 3 million divided?" he asks, "Who gets what?"

Even though Askew names over a dozen recipients of the cash, including three Ministers and one former Minster, Hammer is not entirely satisfied with he results. He carps that Venezuelan authorities are resisting his demands to use a Liberian subsidiary to operate the oil fields.

Askew defensively tries to explain. "It's beyond their powers. It is strictly political." Hammer answers, "Well, it's not beyond their powers." He sums up his philosophy in two words "Money talks." He tells Askew to "take a quarter of a million or even a half million of that money away from other people," and use an intermediary to "go to Caldera on that point." Hammer had always believed in going straight to the top-- as he had dome a half-century before when he met Lenin in the Kremlin-- and Rafael Caldera was the President of Venezuela.

I had no trouble recognizing Hammer's voice-- and modus operandi-- on the tapes. I met Hammer in 1981. I was writing an article about him for the New York Times and he invited me to travel with him on his private jetliner, Oxy One on his non-stop business and political trips. We went to Paris, London, Ottawa, Chicago, Washington D.C. and New York. He enjoyed prestigious hotels, in particular Claridges in London, the Plaza Athenee in Paris and the Madison in Washington D.C., and liked it when he was recognized by the hotel employees. (The only time I saw him lose his temper was in Paris when the cashier at the Plaza Athenee refused to accept his assistant's credit card -- and held up his baggage.) He had little tolerance for gourmet food, often preferring to order a hamburger. When he commuted through time zones in OXY 1, he had little respect for other people's time. He had no inhibitions about calling subordinates at home in the middle of the night. He kept his own schedule, napping or working, to suit his own convenience. His wife Francis almost always accompanied him on Oxy One and acted as his help mate. When the plane landed, he was usually met by a sizable entourage of personal assistants, public relations men, security men and his personal photographer, who strained to keep up with him as he spryly went about his business.

After Hammer died in 1990, an event occurred that he could not have foreseen: the Soviet Union collapsed and documents began flowing out of its secret archives. His dossiers showed that the autobiographical story Hammer had assiduously constructed about his capitalistic, artistic and humanitarian activities in post-revolutionary Russia were mainly fiction. He was a money launderer for Soviet overseas intelligence and this provided him, with his powerful mental focus, an invaluable education in the techniques of obscuring financial transactions, accumulating secret funds and discreetly disbursing money in difficult, if not impossible ways, to trace.

The extent to which Hammer applied these lessons in underground finance to more conventional capitalism and, in doing so, succeeded in winning in oil concessions worth billions of dollars, only became fully evident to me when I listened to the Hammer tapes in 1996.

They spanned some eighteen years in his career, beginning in 1963, and they came in a variety of formats-- reels, cassettes and microcasettes-- reflecting the changes in recording . They were made in a wide variety of locations, including even hotels and restaurants. The participants, aside from him, included everyone from lowly employees to a sitting President of the United States, John F. Kennedy. He taped his Directors, executives, lawyers, consultants and go-betweens. He also taped himself describing his meetings with foreign leaders. leaders. In all, they contained some sixty hours of conversation-- although not all was audible.

After getting these tapes, I played them for George Williamson, who had been President of Occidental in Libya and Europe when some of the tapes were made, and remained a close personal friend of his. Williamson had no problem recognizing Hammer's distinctive voice but, up until he heard them, he did not know that Hammer tape recorded his associates. Family members also confirmed Hammer's voice-- as did a forensic analysis that compared it with a now sample of his voice on a radio program-- but neither they, nor any of his former secretaries, aides or business associates admitted any prior knowledge about Hammer's practice of surreptiously recording conversations or the existence of the cache of tapes.

A typed note stapled to one micro cassette made in July 1979 and addressed to "AH," provided a lead as to who was helping Hammer with this secretive project. It read:

Enclosed are (1) the original microcasette of the recording made in your office on July 23 and (2) as "insurance copy" of the same recording on a standard cassette (which I used to make the verbatim transcript I gave you on August 6).

In keeping with he confidential nature of the recording the labels are written in Russian.

There are no other copies of either of the recordings or of the transcript.

It was signed "jh."

"jh" was Julian Hammer, as he readily admitted after I brought the note-- and tapes-- to his home in Bel Air. He was Hammer's only son, born in Moscow in 1929, but his relationship with his father had not been an easy one.

His mother, Olga Vadina, was a gypsy singer, who Hammer had married shortly before he was born. Her pregnancy had been so unexpected that Hammer suspected that he the biological father -- and he continued to harbor these dark suspicions until 1988, when through having a DNA sample secretly tested at UCA medica center he finally determined Julian was indeed his progeny.

Almost immediately after the Hammer family returned to New York in 1931, he began distancing himself from Olga and Julian. Julian believed that his father was embarrassed because they spoke Russian. When Julian was six, his father told him that it was better if hey lived apart. He sent him and his mother first to upstate New York and then Los Angeles. In growing up, he saw little of his father-- often not even on Christmas holidays. His father did not even attend his wedding in 1954 or even send congratulations. At this point, he had not seen his father in nearly three years. On the night of his twenty sixth birthday, an event happened that re-united them. He had invited a soldier over to his apartment that night, and after they both drank heavily, the soldier made advances towards his wife. They brawled and Julian, getting his pistol from a drawer, shot the soldier to death. After the police arrested Julian for the shooting, the Los Angeles Times' headline, above he story about the killing, reported "MILLIONAIRE'S SON KILLS GI."

Whether he liked it or not, Hammer was again linked to his son. The publicity could not have come at a worse time for Hammer. He had just divorced his second wife, Angela, in a messy battle, and was also having financials problems with his art business, the Hammer Galleries. He now moved to avoid a trial that could further embarrass him. He borrowed $50,000 in cash from Frances Barrett Tolman, would become the third Mrs. Armand Hammer the following year. He then had a women friend deliver the cash to a lawyer in Los Angeles.

Julian was released from jail. The state's attorney accepted his explanation that he had shot his guest in self-defense and dismissed all charges against him. He was free in the eyes of the law but not those of his father. Hammer would not let him forget his $50,000 intervention. He told him that payment to a party he never identified had saved Julian from prison. He now wanted him to repay his debt to him by disappearing from public sight so that he caused him no further embarrassment. He would provide him with a cash remittance each month. As Hammer began building up his oil company in the early 1960s, he found an additional way for Julian to pay his debt. He asked him to help him with a task that he did not trusted his regular employees to perform. He called it "James Bond stuff." and it also required low visibility. Taking advantage of Julian's technical skills with electronics-- skills he had developed initially as a hobby-- Hammer had him install a sophisticated recording system in his home and office. Then, he had him devise up a micro cassette-recorder that he could conceal on his person. Its miniature microphone was concealed in one of his gold cufflink. On a number of occasions, he would have Julian come to his private office and stand there shirtless while Julian taped the recorder to his body and ran the wires to the cufflink. As Julian rigged him up, he could also sense the power his father derived from being able to secretly tape the words of people close to him. He would watch him put on his shirt, tie and jacket and, with the confidence this concealed weapon gave him, he went to his appointed meeting. He would then bring the cassette back to Julian, who would then return to him a copy on a conventional cassette and a transcript.

Although Julian did not always know the identity of the voices on the tapes, he realized that the conversations often concerned cash payments. He assumed that this was his father's way of doing business: paying individuals off the books and then secretly tape their acknowledgment of the transactions. He also found that his father taped on a number of occasions conversations with executives he was about to fire. As the years went by, Hammer extended the scope of his "James Bond" operations by having Julian and others plant hidden surveillance devices in other people's homes and offices. Julian knew much of what he was doing for his father was probably illegal but he saw he had little choice. It was the only service he could perform to repay his debt.

Julian was able to tell me the circumstances under some of the tapes were made. He also believed that there were more tapes but he never found them. He died of heart failure on April 3 1996.

Although many of these secret conversations occurred decades ago, they still touch on issues that remain sensitive today. Consider, for example, the 1971 tape in which Hammer and Askew go over the list of pay-offs to ministers in the Caldera government and officials of his Christian Democrat Party. Caldera, the reformer whom Hammer so determinedly wanted to reach then, is again President of Venezuela today. After losing the presidency in 1973, he was re-elected in 1994.

In the intervening years, much happened to Occidental in Venezuela. Carlos Andres Perez, who succeeded Caldera as President, moved in 1974 to nationalize foreign oil concession, which included the service contracts in Maracaibo. At about the same time, John Ryan, who had been fired from Occidental in Venezuela, alleged, although he had no first hand knowledge, that Askew had paid bribes. In the ensuing investigation, a mysterious check was traced back to Askew, which was displayed by President Perez on national television. Askew was then arrested, imprisoned for six months and then released, since the authorities developed no evidence that he had actually bribed a government official.

But since both the Parliament and the Judiciary continued their own investigation into the allegations, the Venezuela government refused to pay compensation for its nationalized contracts to Occidental-- although all other foreign oil companies were paid. In the case of Occidental, Perez took the position that if it turned out it had obtained its service contracts through bribery, under Venezuala law, it would not be entitled to any compensation.

Throughout the furor, Hammer steadfastly denied that he had ever authorized or had any knowledge, of efforts to bribe individuals in Venezuela. He explained that the money that he had sent Askew was a legitimate payment for part of the share in the service contract that Askew had earned through the consulting work he had performed for Occidental. as a consultant (and to buy back an interest he had in the service contracts.) And, at the time, there was no way to prove the contrary. Askew kept silent about the payoffs (he died in Arkansas in 1994). Hammer's buffer held. He then boldly took the offensive. He was not without influence in Washington, where he claimed to known every President since FDR and where, through his Occidental International subsidiary, he retained an extensive staff of well-connected former officials to help him with government-relations. In 1977, he asked the State Department to intervene, claiming that Venezuela had deprived his company of its rightful compensation on the pretext that it engaged in bribery. During the next ten years, while Venezuelan courts reviewed the case, American diplomats put "enormous pressure," as one Venezuelan Ambassador to Washington termed it, on Venezuela to settle Occidental's claim, and finally, in 1989, Venezuela agreed to pay Occidental $42.2 million in compensation.

Since the State Department had not of course known of Hammer's contemporaneous discussion of the bribes, I brought the relevant tapes to a well-known diplomat, who had served at a high level in the State Department, and who had been involved in the American intervention on Hammer's behalf in the late 1970s. He agreed to listen to them on the condition that I not divulge his identity. At the outset, he told me that while he had not had a high opinion of Hammer's integrity, he believed that in this case he was getting a "bum rap." He took the position that unless Venezuela could produce credible evidence that Hammer or Occidental was involved in bribery, it should pay Occidental for the properties it nationalized. For him, it was an issue of protecting American interests abroad from arbitrary confiscation.

When I began laying the tape, his demeanor changed. He took notes, and he seemed particularly interested in a portion that concerned the then Minister of Finance, Pedro Tinoco. In it, Hammer asks who is being paid off:

"One Million is divided to Pedro and his bunch..." Askew responded.

"That's Tinoco, He gets a Million?"

"Yeah," Askew confirms.

The diplomat explained that Tinoco had been, before his death in 1992, one of the most powerful men in Caracas. His father had served as Minister of the Interior in a dictatorship. A heavy man, with a square face and bald head, he had his own law firm, which specialized in international business, and one of the leading banks, the Banco Latino. He spoke calculatedly and tended to impress people as, as Hammer described him on the tape, "a tough guy [who] could go in and see the President." After serving as finance minister, he went on to become head of Venezuela central bank. In this latter role, the U.S. supported his policies on controlling inflation and considered him "America's man in Caracas."

Now, the tapes now showed him in a very different light. Hammer, who was on a first name basis with him, apparently considered him his man in Venezuela. He had authorized paying him $1 million in cash and believed that he could influence Caldera.

"My guess is that when this becomes public, they will try to hang the whole thing on Tinoco since he is dead," the diplomat predicted.

Would the American Government have intervened on Hammer's behalf if this tape had been available, I asked.

"I certainly wouldn't have been part of it," he answered.

I next went to see the Venezuelan Ambassador to the United Nations, Enrique Tejera Paris. I understood that Ambassador Tejera, who had served as Foreign Minister, was a close friend of President Caldera. He was also a highly-regarded lawyer who had just helped write the U.N. resolution condemning corporate bribery of public officials. As I prepared to play the tape in his office, he joked, "I hope I'm not on the tape."

He then recounted that when he first had Hammer in Caracas in 1969, Hammer had insisted on showing him a video tape of a ceremony in which he stood with King Idris of Libya. He assumed it was Hammer's way of making the point that he had had obtained his oil concession in Libya through his connections to the King. He had also, as I pointed ut, delivered a multi-million dollar pay-off to one of Idris' inner circle.

The ambassador shot back, "Venezuela is not Libya. We take corruption very seriously. We have strictly enforced anti-bribery laws for since 1936 and we have put two Presidents in prison for it."

I then played the tape. It took about 20 minutes. When it concluded, he walked to his desk and placed a call to President Caldera. A few moments later, Caldera called him back and, in my presence, he described in Spanish the contents of the tape. Caldera then asked for a transcript, which I agreed to supply.

After the President hung up, Ambassador Tejera placed a call to Maurice Vallery who, in 1971, had headed the Venezuelan National Petroleum Company (CVP) in 1971 which had awarded Occidental the three service contracts. He reached him in Caracas on his cellular phone and, after summarizing the situation, handed me the phone.

On the tape, Askew, in accounting for the disbursement of the $3 million in cash, explains:

"Then I come back and had to give Vallery. I swung him a half a million dollars. I gave him 250,000 and he said, 'Now I'm going to work this out.' I said O.K. He said he got some other people in with him...."

" You gave Vallery a half million," Hammer summed up.

"He is a 100 percent with us...." Askew answered.

I repeated this portion of the tape to Vallery . "Voices from the grave," he said. He seemed shocked and dismayed that Hammer could have had talked about him in this way. "I had little to do with Hammer. I saw him at the ceremony in which the contracts were signed and I had dinner with Hammer him once and he told me about his meeting with Lenin. The only thing he ever gave me was a catalogue for his art collection." As for Askew, he recalled meeting hm only once at a large social function.

I asked about the putative half-million dollar payoff.

"That's pure invention," he answered.

"Probably Askew cheated Hammer out of the money."

But Hammer got his concessions.