Liedtke seemed to go out of his way to mention his friendship with George Bush, according to Bill
Weitzel of Texaco. "Mr. Liedkte was quite outspoken with regard to the influence that he felt hehad--and would and could expect in Washington--in connection with antitrust matters and
legislative matters," McKinley would say in deposition. "This idea that Pennzoil was not without
political influence that could adversely affect the efforts of Texaco in completing its merger." [fn 3]
Liedkte denied all this: "The political-influence thing isn't true. I don't have any and McKinleyknows it.!" Did Liedkte keep a straight face? Even during the talks between lawyers on the two (^)
sides to set up this meeting, the Pennzoil attorney had referred to the capacity of his client to deflect
"antitrust lightning" in the case. Chairman Mao's relations with Nixon and Bush make his
protestations about a total lack of political influence sound absurd. Blaine Kerr, Bush's investment
advisor, also piously avers that the name of George Bush was never invoked.
In any case, the Reagan-Bush regime made no secret of its support for Pennzoil. In the spring of
1987, after prolonged litigation, the US Supreme Court required Texaco to post a bond of $11
billion. On April 13, 1987, the press announced that Texaco had filed for chapter eleven bankruptcy
protection. The Justice Department created two committees to represent the interests of Texaco'sunsecured creditors, and Pennzoil was made the chairman of one of these committees. Texaco
operations were subjected to severe disruptions.
During the closing weeks of 1987, Texaco was haggling with Chairman Mao about the sum of
money that the bankrupt firm would pay to Pennzoil. At this point Bushman Lawrence Gibbs wasthe Commissioner of the Internal Revenue Service, one of the principal targetting agencies of the
totalitarian police state. Gibbs was always looking for new and better ways to serve the Bush power
cartel, and now he found one: he slammed bankrupt and wounded Texaco with a demand for $6.5
billion in back taxes. This move was in the works behind the scenes during the Texaco-Pennzoil
talks, and it certainly made clear to Texaco which side the government was on. The implication wasthat Texaco had better settle with Chairman Mao in a hurry, or face the prospect of being broken up
by the various Wall Street sharks - Holmes a Court, T. Boone Pickens, Kohlberg Kravis Roberts
and Carl Icahn- who had begun to circle the wounded company. In case Texaco had not gotten the
message, the Department of Energy also launched an attack on Texaco, alleging that the bankrupt
firm had overcharged its customers by $1.25 bicontrols had been in effect. llion during the time before 1981 when oil price
Chairman Mao Liedkte finally got his pound of flesh: he would eventually receive $3 billion from
Texaco. Texaco in late 1987 announced an asset write-down of $4.9 billion as a result of staggering
losses, and began to sell assets to try to avoid liquidation. Texaco's Canadian operations, its Germanoperations were sold off, as were 600 oil properties in various locations. Later Texaco also sold off
a 50% interest in its refining and marketing system to Saudi Arabia. A number of Texaco refineries
were simply shut down. A total of $7 billion in assets were sold off during 1988-89 alone.
By early 1989, Tnumber three position had become the "runt of the litter" among the US majors. Texaco revenue fellexaco had been reduced to two-thirds of its former size, and from its former (^)
from 47.9 billion in 1984 to $35.1 billion in 1988. Assets declined from $37.7 billion to $26.1
billion. In order to ward off the raiding attacks of Carl Icahn, Texaco was obliged to worsen its
situation furthger by payment of $330 million in greenmail in the form a special $8 distribution to
shareholders designed mainly to placate Icahn. [fn 4]
The entire affair represented a monstrous miscarriage of justice, a declaration that the entire US
legal system was bankrupt. At the heart of the matter was the pervasive influence of the Bush
networks, which gave Liedkte the support he needed to fight all the way to the final settlement. The
real losers in this affair were the Texaco and Getty workers whose jobs were destroyed, and the