Oscar Wyatt

Last updated
Oscar Wyatt
Born
Oscar Sherman Wyatt, Jr.

(1924-07-11) July 11, 1924 (age 95)
NationalityAmerican
Education Texas A&M University, 1949 degree in Mechanical Engineering
Occupationbusinessman
Known forFounder of Coastal Corporation
Net worthover $100 million
Spouse(s) Lynn Wyatt (née Sakowitz) (m.1963present)
Children4 sons
Website www.oscarswyatt.com/index.htm
Notes
[1]

Oscar Sherman Wyatt, Jr. (born July 11, 1924) is an American businessman and self made millionaire. He was the founder of Coastal Corporation and a decorated bomber pilot in World War II. In 2007 the U.S. federal court in Manhattan tried him for illegally sending payments to Iraq under the Oil-for-Food Program. [2] [3]

Contents

Early history

In 1924 Oscar Wyatt was born into poverty in Beaumont, Texas, [4] left by an alcoholic father and raised by a single mother in Navasota, Texas. [5]

At age 16 he began earning money by flying planes, working as a crop duster [5] for a nearby farm. A strong student, Wyatt was accepted to attend Texas A&M University but, in the midst of World War II, he left after a year of school in 1942 to enlist in the U.S. Army Air Corps as a pilot. Serving as a combat aviator in the South Pacific, Wyatt was wounded twice during battle and was decorated by age 21. After the war, he worked as a farmer to pay his way through Texas A&M and earn a degree in Mechanical Engineering. [5] [6] [7] Out of college, he sold drill bits to small oil companies from the trunk of his Ford Coupe, and worked for Kerr-McGee and Reed Roller Bits before becoming a partner in Wymore Oil Company. [8]

In 1955, he took an $800 loan on his car and used it to found Coastal. [5]

Texas oilman

A 2007 Texas Monthly magazine article called Wyatt the real "J. R. Ewing" of the Oil Business and described Oscar and his fourth [8] wife Lynn Sakowitz, a fixture of Houston social, fashion together as the beauty and the beast. [9] Known as a shrewd businessman, Wyatt was both beloved and hated, litigious and charitable. A personal friend of Iraq's Saddam Hussien and business partner to Libya's Muammar Qaddafi, Wyatt urged President George H. W. Bush not to go to war with Iraq over Kuwait and later negotiated with Saddam to secure the release of western hostages being held in Baghdad. Wyatt entered the refining industry in the early 1960s, And he began to attend Organization of Petroleum Exporting Countries (OPEC) meetings in Vienna, Austria. The U.S. refineries were optimized for high sulfur ("sour") crude oil, so Wyatt began to buy Iraqi oil in 1972. [10] Wyatt retired as the Coastal Corporations chairman in 1997 yet continued to serve as Executive Committee chairman until Coastal's sale to the El Paso Natural Gas Company in January 2001.

The Coastal Corporation

Wyatt founded Coastal States Gas Producing Company in 1955. Coastal began business in modest circumstances, with 68 miles of pipeline and 78 employees. He produced gas, and collected it from other smaller producers to sell at a better rate to larger pipeline companies.

Expanding through acquisitions and expanding across multiple sectors, Coastal became a diversified energy company. Coastal produced and marketed petroleum, natural gas, electricity, and coal. It also sold gasoline at Coastal-branded gas stations: by 1999, Coastal Refining and Marketing operated 962 gas stations across in 33 states and was supplied by four refineries, including a 150,000 bbl per day refinery in Corpus Christi, Texas, a 180,000 bbl per day refinery in Eagle Point, New Jersey, a 250,000 barrel per day refinery on Aruba, and a 25,000 bbl per day refinery geared for asphalt production in Chickasaw, Alabama. Coastal Corporation also owned and operated a fleet of oil tankers, tugs, and barges. Sales in 1991 totaled $9.549 billion. Coastal Corporation was a major supplier of marine diesel in the Caribbean, natural gas in Colorado, and heating oil in the Northeast. Coastal was a key natural gas producer and distributor along with competitors Enron, Williams, and El Paso Energy, which Coastal later merged with. Coastal produced, gathered, processed, transported, stored and marketed natural gas throughout the United States and by the 1990s Coastal's 20,000-mile pipeline network, including the Iroquois and Great Lakes pipeline, completed in 1991, and the Empire State Pipeline, completed in 1992, transported five billion cubic feet of natural gas daily. As of 1999, Coastal was a Fortune 500 company with 13,300 employees and annual Revenues of $8.2 billion.

Proxy fight

In 2003, Oscar Wyatt and other shareholders sued the El Paso Corporation for allegedly misrepresenting its intentions for Coastal assets prior to the merger in 2000. After the merger of Coastal and El Paso Corporation, the latter began divesting itself of Coastal assets beginning in 2001. El Paso needed the cash to repay the mounting debt it had acquired from following the same business model as Ken Lay's Enron. El Paso had heavily leveraged itself to fuel sales into new markets for electricity, and concealed mounting debt from its balance sheet by writing off the debt to offshore subsidiary companies. In June 2003 Oscar Wyatt, along with El Paso investor Selim Zilkha, initiated a proxy fight to gain control of the El Paso Corporation and to wrestle control of the remaining assets, which included natural gas pipelines, exploration, and production assets. Since the merging and disclosing of corporate malfeasance by El Paso management, Its stock had fallen 87% from its February 2001 high of $75 a share. El Paso had debts of $25 billion and was being sued by shareholders and investigated by state and federal regulators. [11]

Iraq

While El Paso Energy was selling Coastal's petroleum marketing and production assets off piece by piece to competitors Valero, Sunoco, and Conoco Phillips, Wyatt was being investigated for illegally doing business with Iraq's Saddam Hussein in violation of sanctions imposed by the United Nations that strictly regulated Iraqi sales of crude oil. In 2007 Wyatt pleaded guilty in a U.S. federal court for illegally sending payments to Iraq under the Oil for Food program. [12] At his sentencing hearing, Wyatt's attorney, Gerald Shargel, pointed to a commission report led by former Federal Reserve Board chairman Paul Volcker that concluded that about half of the 4,500 companies in the Oil-for-Food Program paid a total of $1.8 billion in kickbacks and illicit surcharges to Saddam's regime. Wyatt's defense also floated the issue of "vindictive prosecution"—that is, the Bush administration singling out its old nemesis in both the oil patch and politics for punishment while leaving other possible violators of the sanctions alone. Prosecutors, in turn, amassed a daunting paper trail and rewarded a few former Iraqi petrocrats with help in obtaining U.S. green cards—as long as they agreed to testify against sanction breakers like Wyatt. [9] In October 2007 Wyatt pleaded guilty to conspiring to, under the Oil for Food program, make illegal payments to Saddam Hussein's Iraq. Wyatt received a one-year prison sentence, and was sentenced to serve in the minimum security camp at the Federal Correctional Complex, Beaumont, in Beaumont, Texas.

Comeback

After stepping down from Coastal, Wyatt continued to consult with other petroleum related interests to help them improve their processes and procedures, and maximize their pipeline and refinery operations, resulting in better returns for common shareholders. [13] Wyatt invested in frozen foods distribution and, in July 2001, created a new company - the NuCoastal Corporation, renamed Coastal Energy - to explore energy opportunities available across the globe, including Malaysia, and sold Coastal Energy for $500 million in 2013.

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References

  1. Suro, Robert (October 8, 1991). "Family Quarrel Unfolds In a Houston Courtroom". New York Times. Retrieved 2013-09-09. Lynn Sakowitz Wyatt, who is Mr. Sakowitz's only sibling, has combined down-home charm and haute couture to become an international socialite whose guest lists have included Mick Jagger, the Duchess of York and the Aga Khan. Her husband, Oscar S. Wyatt Jr., is a gruff oil executive who is chairman of the Coastal Corporation and has a fortune estimated at well over $100 million. Having done an extensive business with Iraq, he flew to Baghdad shortly before the outbreak of the Persian Gulf war, met with Saddam Hussein and brought home a planeload of hostages.
  2. Fowler, Tom (January 2, 2008). "Wyatt begins 1-year prison term". Houston Chronicle . Retrieved 2010-08-22.
  3. Feuer, Alan (September 6, 2007). "Texas Tycoon, Prosecuted for Iraq Dealings, Says He's a Target". The New York Times . Retrieved 2013-09-09.
  4. Who's who in the South and Southwest. Marquis Who's Who. 2003. ISBN   9780837908335 . Retrieved 2013-09-09.
  5. 1 2 3 4 "Wyatt was never one to retreat in a fight". Houston Chronicle. Retrieved 2018-06-08.
  6. "Oscar S. Wyatt, Jr. (biography)" . Retrieved 2009-09-09.
  7. Trotta, Daniel; Christine Kearney (September 5, 2007). "Texas oil tycoon Wyatt in legal fight of his life". Reuters . Retrieved 2013-09-09.
  8. 1 2 http://money.cnn.com/magazines/fortune/fortune_archive/2003/06/23/344612/
  9. 1 2 http://www.texasmonthly.com/story/day-oscar-wyatt-caved-0
  10. Lynch, David J. "Prison term could cap oil trader's legendary career." USA Today . August 22, 2010. Retrieved on August 22, 2010.
  11. Creswell, Julie. "Old Raiders Never Die They Just Get Even Oscar Wyatt lost a ton of money on El Paso. Now he's trying to throw the bums out. And he just may succeed". cnn.com. CNN. Archived from the original on April 8, 2014. Retrieved 2018-06-08.
  12. https://www.nytimes.com/2007/11/28/us/28wyatt.html?_r=1&ref=oscarswyattjr
  13. "Oscar S. Wyatt, Jr" . Retrieved 2013-09-09.

Further reading