SCANDALS: Gulf Oil's Misplaced Gifts

It is hardly any secret that corporations currying favor in Washington throw lavish parties at the Burning Tree Golf Club and produce timely gifts for key politicians. But Gulf Oil Corp. seems to have gone further than most. The giant company (1974 sales: $16.5 billion), now the target of four federal investigations, is accused of operating a covert $10 million slush fund for the benefit of some top politicians at home and abroad. The practice directly defies a federal law that forbids corporate donations to politicians running for national office. As a result of testimony that has recently become public, Gulf's top executives are in deep trouble, and many political reputations are being tarnished.

The problem first surfaced in 1973, when the Watergate special prosecutor's office discovered that Gulf had illegally contributed about $150,000 to the 1972 campaigns of various politicians. Several other corporations—among them, Northrop, 3-M, Goodyear and American Airlines—have admitted making the same type of illicit contribution. But there was something strange about Gulfs case. Though other companies admitted that top executives knew about the gifts, Gulfs man on the spot was only its lobbying chief in Washington: Vice President Claude C. Wild Jr.

Could one medium high executive ladle out his company's money without the knowledge of his superiors? Wild blandly assured the special prosecutor that he had wide latitude over his generous budget. He was fined $1,000, Gulf paid another $5,000 fine, and the matter was temporarily dropped. But earlier this year, the Securities & Exchange Commission decided to sue many corporations for failing to disclose to their stockholders illegal slush funds. In Gulfs case, the suit led to a series of damaging disclosures.

A few portions of the testimony are relatively innocuous. Gulf, for example, has disclosed that it reluctantly sponsored a rebroadcast of the Tricia Nixon-Edward Cox wedding at the request of former White House Aide Charles Colson. Also, a Gulf official revealed that the government of Kuwait asked it to contribute $10,000 to Republican Senator Mark Hatfield of Oregon, who is a friend of the Kuwaiti ambassador—but it is not known whether Hatfield actually got any money.

The key depositions taken so far are much more serious. They reveal that Gulf carefully designed a dummy company in Nassau first to "launder" and then to relay money to strategically placed politicians. This Bahamas Exploration Co., Ltd. may well have passed out $5 million in the U.S. alone. The main job of one of its former officers, William C. Viglia, seems to have been to deposit Gulf money in a Bahamian bank, withdraw it and then run the cash back to Claude Wild in Washington.