Liedkte denied all this: "The political-influence thing isn't true. I don't have any and
McKinley knows 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's unsecured 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 was the 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 was that
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
billion during the time before 1981 when oil price controls had been in effect.
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 German operations 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, Texaco had been reduced to two-thirds of its former size, and from its
former number three position had become the "runt of the litter" among the US majors.
Texaco revenue fell 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]