September 5, 2007 / 3:12 PM / 13 years ago

Texas oil tycoon Wyatt in legal fight of his life

NEW YORK (Reuters) - Self-made Texas oil tycoon Oscar Wyatt has gone from crop-duster to World War II pilot to freelance hostage negotiator in a career that leaves people loving or disliking him, with few indifferent.

Texas oil tycoon Oscar Wyatt, former chairman and founder of Coastal Corp, departs from Federal Court in New York after a pre-trial hearing August 30, 2007. Wyatt has gone from crop-duster to World War II pilot to freelance hostage negotiator in a career that leaves people loving or disliking him, with few indifferent. REUTERS/Chip East

Now aged 83, he faces perhaps his most difficult challenge when he goes on trial on charges of paying kickbacks to the late President Saddam Hussein to win oil contracts from Iraq for his companies.

Wyatt faces five counts including conspiracy, wire fraud and engaging in prohibited financial transactions with Iraq. Jury selection began in U.S. federal court in Manhattan on Wednesday and was expected to continue on Thursday.

If convicted on all counts he faces up to 74 years in prison, and it would represent a magnificent fall for a man known for the shock value of his unfettered opinions and flamboyant style that epitomized the image of a Texas oilman.

“There are a lot of urban myths about Oscar. He is a character. He’s a little bit larger than life in a lot of things. He just personified the outspoken Texas oilman,” said Herman Frietsch, a longtime friend and business partner.

Frietsch recounted how Wyatt rose from selling oil drill bits out of the trunk of his car to challenging oil majors by entering the drilling, pipeline and refining businesses on his own. The company he founded in 1955, the Coastal Corporation, was sold to El Paso Corporation for $17 billion in stock in 2000 and 2001.

“He’s been a flamboyant guy, there’s no question about it. He’s the last of the wildcatter types,” Frietsch said, using the industry term for a speculative oil driller.

His reputation was built on incidents like a January 1991 speech reported in a Texas Monthly magazine profile that called Wyatt the “meanest oilman in Texas.” Six days after the United States began bombing Iraq, Wyatt argued against the war, quoting a senior official of an Arab state as saying “white slaves” from America would liberate Kuwait.

“I have five sons, and I damned sure don’t want any of them, or any of your sons, to be the white slaves of an Arab monarch,” Wyatt declared.


If Wyatt is cleared, it would be a stunning setback for the U.S. Attorney’s office in New York in its pursuit of those who profited from the U.N.’s oil-for-food program, set up to ease the impact on the Iraqi population of U.N. sanctions on Iraq.

The office has won guilty verdicts against two people and secured guilty pleas from two companies and six other defendants, some of whom may testify against Wyatt.

A U.N.-appointed inquiry led by former U.S. Federal Reserve Chairman Paul Volcker found the program was corrupted by some 2,200 companies in 66 countries who paid $1.8 billion in kickbacks to Iraqi officials to secure supply contracts.

Wyatt’s defense lawyer, Gerald Shargel, flatly denies Wyatt ever paid kickbacks.

U.S. District Judge Denny Chin on Wednesday questioned a pool of potential jurors, asking whether they had strong feelings about the Iraq war, the former Saddam government, U.S. administrations or the United Nations. A few said they knew too much about the oil-for-food scandal to remain impartial.

Friends say Wyatt considers himself a patriot and resents the insinuation that he was too friendly with Saddam during both Gulf wars. Wyatt visited Iraq a number of times and met with Saddam, though Shargel declined to say how many times.

Wyatt famously flew to Iraq with former Texas Gov. John Connally in December 1990 in a bid to free U.S. citizens held in Baghdad just before the U.S. operation to dislodge Iraqi forces that had invaded Kuwait earlier that year.

They brought back some two dozen oil workers to Texas, where Wyatt had flown the families of those who got out.

“I fully believe if it wasn’t for him, I’d have died out there in the desert,” said Alfred Allen, who was a U.S. Army liaison to Kuwait for military sales when he was trapped in the country by the Iraqi invasion and taken to Baghdad.

Frietsch, the friend and business partner who has known Wyatt since the 1970s, said the Texas oil man stereotype only tells part of Wyatt’s story, that he’s equally comfortable dealing with presidents and diplomats at black-tie dinners.

“He’s a very erudite person,” Frietsch said. “But he likes to play the Texas oilman when he’s in the oil business. That’s the part the newspapers like to pick up on because it’s colorful. He’s not as much fun in a tuxedo.”

Additional reporting by Christine Kearney

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