The Day Oscar Wyatt Caved
In the right light, the ornery octogenarian oilman’s guilty plea can be seen as a victory: After all, he won’t spend the rest of his natural life in jail. But the fact is, he couldn’t beat the rap—and he knew it.
Illustration by Tim Gabor
For Houston it was a real “say it ain’t so” moment. Oscar S. Wyatt Jr., that archetype of Texas archetypes, for decades the city’s orneriest, wiliest, most litigious, most feared, most hated, and most beloved son of a bitch, stood before a judge and pronounced upon himself the word few had ever successfully attached to his name: “guilty.” Within minutes—once the Houston Chronicle e-mail alerts started reaching influential BlackBerrys late in the morning of October 1—the news seemed to be all over town, along with the concurrent reactions. Oscar (and it’s always been “Oscar,” whether you really knew him or not) shouldn’t have copped. Oscar could have beat it. Or simply: Oscar, wow. Whatever was said, the undercurrent of disbelief ran fast and furious. Oscar Wyatt—a man who, in 83 years, had never backed away from a fight—had caved.
The trial, in a sunny New York courtroom with paneled walls and a view of the Hudson River, had been going on for nearly four weeks by then, but it hadn’t been looking particularly good for the infamous Texas oilman from the beginning. For those in need of background: Two years ago he was indicted on five criminal counts, including wire fraud, in connection with what came to be known as the Oil-for-Food scandal. As retaliation for Saddam Hussein’s 1990 invasion of Kuwait, the United Nations imposed economic sanctions on Iraq, which caused undue suffering among the Iraqi people and great consternation for the West, which could no longer buy Iraq’s oil. In 1996 the U.N. came up with a compromise, in which Iraqi oil profits were put into a U.N. escrow account to be used for humanitarian purposes (medicine, food, etc.). The U.N. allowed Saddam to pick his customers, and he selected a handful of his most loyal, including Oscar. Yet four years later, Saddam decided he wasn’t making enough of a profit on the price set by the U.N., so he started demanding “surcharges,” or bribes, from his customers. Many turned to middlemen, keeping themselves out of trouble, but, according to prosecutors, Oscar instead set up front companies overseas that paid the bribes and continued to do business with the Iraqis—illegally.
On October 21, 2005, when the feds pulled up to Oscar’s new mini-mansion on quiet, leafy Meadow Lake Lane, they manhandled him in such a way that he threw out his shoulder and required examination by that world-famous orthopedist Michael DeBakey. (Subsequent photos showed Oscar, scowling, in a sling.) Leading up to the trial, his defense appeared informally two-pronged: He didn’t violate the sanctions, and, besides, everyone else was doing it. (In fact, a commission that investigated the scandal—headed by former Federal Reserve Board chairman Paul Volcker—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.) The 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, Oscar Wyatt, for punishment but 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 Oscar. By the time jury selection rolled around, it looked as if the prosecution essentially intended to try him for treason, which infuriated Oscar’s cousin and defense team member, former state senator Carl Parker. “Those bastards are so intent on making Wyatt a traitor,” he told me, as voir dire was about to begin. “He’s done more for this country than all the asshole lawyers put together.”
Clearly this was going to be nothing like the trial of Enron bosses Ken Lay and Jeff Skilling, another defining moment in the life of Houston. By the time those two faced a judge and jury, they had no reservoir of goodwill in court or in the community; they were just two fairly typical corporate chiefs who had been looking out for themselves as their company went down the tubes. But Oscar was different: Born into poverty in Beaumont, abandoned by an alcoholic father, raised by a devoted single mom in Navasota, he grew up to become a World War II combat pilot and, later, the billionaire owner of Coastal Corporation, a company he started all by his lonesome. And yes, he’d sued and countersued, and he’d shrugged off (minor) guilty pleas in the past. In the seventies, he’d curtailed gas supplies to Austin, Corpus Christi, and San Antonio during one of the coldest winters on record. After Congressman Henry B. Gonzalez suggested in 1984 that “a more corrupt nor least trustworthy person could hardly be imagined,” Oscar retorted that Gonzalez was “a mental incompetent and has been for years.” In a brilliant reputation overhaul in 1990, Oscar flew to Iraq with former Texas governor John Connally and liberated U.S. hostages held by Saddam. When a Middle Eastern official claimed that “white slaves from America would liberate Kuwait,” Oscar took on George H. W. Bush’s war in a public forum, arguing, “I have five sons, and I damned sure don’t want any of them, or any of your sons, to be the white slaves of an Arab monarch.” Then, in 1991, in a continuation of an old feud, Oscar put Lynn’s son Douglas up to suing her brother, Robert Sakowitz, for $8.5 million, accusing him of self-dealing and plundering the family’s Sakowitz department store chain. Robert won, but as Oscar told me recently, chuckling, “You see how well he’s done since then.”
Oscar seemed to be easing offstage in January 2001, when he sold Coastal to El Paso Energy Corporation and announced his retirement. But then, surprising almost no one, he subsequently decided he didn’t like how El Paso was running things, launched an unsuccessful proxy fight, and started a new company for himself. No wonder he and his fourth wife, Lynn—a fixture of the fashion press, a best-dressed hall of famer, and, until recently, the hostess of lavish birthday parties at their rented Mediterranean villa—were known as Beauty and the Beast.
In other words, Oscar Wyatt was the personification of a rogue, and loving and hating him was one of the rare consistencies of life in Houston. So when his trial began in September, no one back home could imagine that he could be found guilty and sentenced to as many as 74 years in a federal pen, even though that possibility was mentioned in myriad Chronicle stories. The joy would be in watching him wriggle out of this jam, just as he’d wriggled out of so many others. Any other outcome was, simply, inconceivable.
Sitting in a jury room in Lower Manhattan, it was a lot easier to think that Oscar’s luck might finally have run out. (Uptown, it was coming up on Fashion Week, but that seemed irrelevant. Even Lynn Wyatt was dressed down, previewing a subdued if well-fitting black suit that would hence make several appearances with contrasting silk blouses.) Houston seemed far, far away as Judge Denny Chin, a Clinton appointee with a reputation for fairness and a pained, exacting demeanor, began interviewing jurors. (The trial was set here because of jurisdictional matters, including criminal acts supposedly committed in the Southern District of New York.)
Here, then, was the jury of Oscar’s peers: people who read the New York Times, the Daily News, and the New York Post; people who perused O magazine and watched Wheel of Fortune, Grey’s Anatomy, and the History Channel; people willing to swear that, although Saddam would be a major player in the trial, they could keep their feelings about our current folly in Iraq out of their verdict-rendering duties. “This is not a trial about the war,” Chin stressed, frequently admonishing jurors to “keep an open mind.” Even though his voice was soft and his frown gentle, you got the sense that he knew how hard that was going to be.
The Wyatt family was there en masse those first few days. The sons Lynn had had with Oscar seemed as different from each other as from the rest of the family: Trey was brooding and beefy, with a Caesar-ish trim to his black, black hair, while Brad, currently working for the society mortuary in Houston, was sweet and solicitous. The two handsome, perfectly tailored sons Lynn had had with her first husband, Robert Lipman, wore an air of privilege like a good cologne. The shoes and handbags chosen by Lynn and her equally well-accessorized daughter-in-law gave them away; no jury consultant was ever going to disguise them as members of the middle or even upper middle class. Lynn may have passed seventy, but her hair was still a glistening gold, and her figure was as trim as, if not trimmer than, a teenager’s. She straightened her husband’s jacket when it bunched and tried otherwise to be a good hostess to all, which was what the job called for.
The rest of Oscar’s team was rougher around the edges and, therefore, more reflective of the defendant. His Manhattan attorney, Gerald Shargel, a tall, full-bearded, fastidiously elegant man, describes on his Web site his experience as “house counsel to the Mob.” (Shargel, who had been John Gotti’s lawyer, was celebrated in a New Yorker profile for his brilliance, quick wit, and enthusiastic defense of the indisputably guilty.) Along with another lawyer—a Richard Lewis look-alike named Henry Mazurek—and a jury expert, Josh Dubin, there was the Texas contingent: Parker, a rotund, hilarious quipster in an out-of-season sports jacket, who looked as though he should have been playing the role of Willie Stark instead of Oscar Wyatt’s attorney, and Tony Canales—yes, the Tony Canales who, before becoming a criminal defense attorney, had prosecuted Oscar in the seventies, when several cities in South Texas claimed that Coastal had mercilessly overcharged them. Silver-haired and bespectacled now, Canales has a voice that still crackles like a rifle shot. (Parker and Canales traded good-humored barbs about each other’s weight and ethnicity in the elevator, which probably confirmed the worst suspicions of their fellow passengers.)
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