Tough old tycoon faces jail

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Wyatt's surprise guilty plea ended trial over oil bribes to Saddam Hussein regime

October 03, 2007|By Kristen Hays | Kristen Hays,Houston Chronicle

Throughout a career that took him from hardscrabble wildcatter to wealthy oil tycoon, Oscar S. Wyatt Jr. hasn't been the type to back down from a fight.

So Monday's guilty plea to a federal conspiracy charge by the 83-year-old founder and former chairman of Coastal Corp. surprised those familiar with his tenacity.

"I am shocked by his decision to plead guilty," said David H. Berg, who represented Wyatt's brother-in-law, Houston clothier Robert T. Sakowitz, when the oilman sued him in the 1980s over some business deals.

"He's not a man who has ever given up, not in my experience," Berg said. "He's one of the most formidable foes I've ever faced."

John E. Olson, an analyst with Sanders Morris Harris, the Houston securities firm, who has known Wyatt for more than three decades, described him as a "shrewd calculator of probabilities" who likely weighed his options carefully before deciding to admit participating in a scheme to pay kickbacks to Saddam Hussein's regime in exchange for contracts for Iraqi oil.

Wyatt grew up poor in Navasota, Texas, and was a crop-duster and then a pilot during World War II. He worked as a farmer to put himself through Texas A&M, University and founded Coastal in 1955.

He and his wife of 44 years, the former Lynn Sakowitz, are internationally known social and philanthropic icons.

Wyatt didn't always win. In 1984 Coastal made a $1.3 billion hostile bid for Houston Natural Gas Corp., then led by Kenneth L. Lay. After a court battle, Houston Natural Gas bought Wyatt's HNG shares at a premium. HNG later merged with InterNorth Inc. and became Enron Corp.

In the early 1970s Wyatt forged his relationship with Iraq when Coastal was a top buyer of Iraqi oil.

Prosecutors contended he maintained those ties after the United Nations imposed sanctions against Iraq over Saddam Hussein's invasion of Kuwait in 1990 and during the run-up to the current conflict.

Wyatt and former Texas Gov. John B. Connally, who was then a Coastal director, went to Baghdad in 1990 and negotiated the release of Western hostages taken in the Kuwait invasion.

At Wyatt's trial in New York, prosecutors played a tape of the conversation in which Hussein promised that Americans would be released as Wyatt and Connally spoke sympathetically about Iraq's plight.

The government argued that Wyatt took advantage of his relationship with Hussein to secure the first contract under the United Nations' oil-for-food program and to continue to receive oil deals after other American companies were shut off.

Wyatt resigned as Coastal's chairman in 1997, but stayed on as a director until El Paso Energy Corp. bought Coastal for $24 billion in 2001.

Until Monday, Wyatt and his lawyers maintained his dealings with Iraq were lawful. He pleaded guilty to a single conspiracy to commit wire fraud charge and agreed to forfeit $11 million. Federal sentencing guidelines prescribe a prison term of 18 to 24 months.

The Associated Press contributed to this article.

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