But that noble notion has become tangled in lawsuits and tainted with bad blood. Shareholders in Occidental have protested the use of company funds to build the museum–it has cost $80 million so far–and even to buy some of the art. Meanwhile, the Oxy chief is trying to buy back 49 art works that he gave to the University of Southern California in 1965. He already borrowed back a Rubens painting which USC has repeatedly asked him to return. And just two weeks ago, Hammer was hit by another lawsuit, filed by the niece of his wife, who died last December. The niece, sole heir to Frances Hammer’s $15 million estate, claims that Armand’s wife was entitled to a share of the art and other assets under California’s community-property law. Hard bargain: The saga began in January 1988, when Hammer backed out of his longstanding promise to give his collection to the Los Angeles County Museum of Art. He says the museum reneged on its agreement over how the art would be treated. Hammer had driven a hard bargain. He’d demanded that the museum keep the collection together forever, hire a special curator, make costly renovations to a wing to house it and remove the name plaques of all other donors from that wing. When the deal fell through, Hammer announced he’d build his own museum, designed by Edward Larrabee Barnes.
The four-story museum could wind up costing $95 million–more than three times the original estimate–and much of the money comes out of Occidental’s coffers. The company has bought some of his art, too. One of the tycoon’s collecting coups was a Leonardo da Vinci manuscript snatched up at auction in 1980 for a mere $5.28 million. He renamed it the “Codex Hammer,” but documents filed in the stockholders’ suits show that Occidental actually paid for it. At the company’s annual meeting in May, Hammer defended his pet project. The museum, he said, “will help to increase earnings.” It “will bring good will and prestige.”
Now Hammer must also defend himself against the suit brought by his wife’s niece, Joan Weiss: According to her complaint, Hammer borrowed $400,000 at 2 percent interest from Frances in the two years after their marriage in 1956. The loans financed the oil leases of the nearly defunct Occidental Petroleum Co. Today Occidental is the seventh-largest oil company in the United States. Hammer paid back those and subsequent loans from Frances with his profits–which, the suit contends, were community property and therefore half his wife’s. Hammer’s lawyer, Jay Goldberg, counters that “Mrs. Hammer indicated in countless conversations with people that she wanted no share of the community property attributable to Armand Hammer’s efforts.” Weiss says she’s discovered 20 boxes of Frances’s private documents that reveal a different story. “Armand is very shrewd and he’s also very treacherous,” she says. “There’s a very fine line I think he crossed. "
Oil deals: Hammer dismisses the suit as a question of greed. “It was through my efforts at putting Mrs. Hammer into oil deals that her $3 million became $15 million,” he says. The suit is likely to crawl through the courts for years.
The Occidental shareholders’ suits may be settled shortly. The proposed settlement calls for a $60 million cap on Occidental’s funding of the museum and cuts out such amenities as a restaurant and auditorium. (Ironically, the museum won’t have a full-time curator despite Hammer’s demand in his County Museum negotiations.) The business plan filed with the court projects a $1.5 million profit for the museum in its first year. with tickets at $2 to $4
This is astonishingly optimistic, especially given the uneven quality of the collection. Some Occidental shareholders aren’t satisfied with the proposed settlement. “What we have here is a so-called charity whose purpose it is to memorialize Armand Hammer,” says Deputy State Attorney General Susan Henrichsen, who represents the California public-employees pension fund, a plaintiff in one of the suits. But exactly how Armand Hammer’s name will be memorialized is still up in the air. The proposed settlement says Occidental’s name must be on the building; the museum’s lease says “Armand Hammer” must appear alone. For a man who’s spent a lifetime promoting himself as an entrepreneur, philanthropist and megacollector, a compromise would be tough to take.
