WASHINGTON — When Armand Hammer traveled to Beijing in 1981, he was
warmly received by top communist brass, including the vice chairman of
the Chinese communist party’s central committee.

“Armand Hammer was the first American industrialist to cultivate
economic relations with the Soviet Union in Lenin’s day,” and now he’s
coming to help China, gushed an article at the time by Beijing’s
official news organ, Xinhua.

Xinhua celebrated an historic July 3, 1981, meeting between Hammer
and Deng Xiaoping in the Great Hall of the People.

Former Chinese leader Deng Xiaoping

“The two men discussed expanding cooperation between China and
(Hammer’s) Occidental (Petroleum Corp.) in petroleum and coal-mining,”
the article said.

China’s minister of coal and vice-minister of petroleum were there.
“Also present,” reported Xinhua, was “Sen. Albert Gore.”

That would be Vice President Al Gore’s late father, then chairman of
Island Creek Coal Company, a subsidiary of Occidental until 1994.

The senior Gore’s meeting with Deng and his ministers gave birth to
what was then the largest Chinese-U.S. joint venture ever undertaken:
the $750 million Pingshuo surface coal mine in Shanxi province, some 190
miles west of Beijing.

Despite the hype, the deal proved to be a money-losing disaster for
Island Creek.

By 1991, the nation’s third-largest coal company had in effect given
away its $250 million stake in the low- and medium-sulphur coal venture
after years of labor problems, bureaucratic snags and transportation
bottlenecks.

Its state-owned partners — Bank of China, China National Coal
Development Corp. and China International Trust & Investment Corp. (run
by arms-dealing princeling Wang Jun, a February 1996 breakfast guest of
Vice President Gore’s) — were furious at the company’s decision to
finally pull out, which came only after Gore’s retirement and Hammer’s
death in 1990.

“They didn’t stay in it very long,” said Stoney Barker, who retired
as Island Creek’s president in 1985. “They got out of it.”

Barker, a miner by trade, says striking up a deal with China wasn’t
his idea.

“I didn’t have anything to do with all that. I didn’t get involved in
the politics,” he said in an exclusive interview with WorldNetDaily. “I
just planned the mine and set it up.”

Despite mining experts’ reservations, Gore’s father pressed ahead
with the ill-fated deal. He saw it both as a business opportunity and a
way to cement political relations with China, since in those days you
started at the top of the party hierarchy to do any deals in China.
Indeed, the deal put him on a first-name basis with Beijing’s communist
leaders.

It also gave him a chance to play host to them. Chinese officials and
engineers, in exchange, visited Island Creek’s headquarters in
Lexington, Ky.

“There were several Chinese who came in and out of Island Creek while
we were working on (the joint venture) and doing the planning for it,”
said Barker, who worked with Gore Sr. for more than 10 years.

He says Gore’s dealings with China on the coal-mining project began
in the late 1970s.

Connections to China

Since the Gore family made contacts in China decades ago, observers
say it’s not surprising that some of Vice President Gore’s top
fund-raisers have close ties to Beijing and some of its princelings.

“His connection to China is far more profound and goes further back
than a lot of people know,” said a source familiar with the elder Gore’s
dealings in China.

In 1989, the Riady clan of Indonesia sponsored a trip to Asia for
Gore Jr. The clan’s man in the U.S., John Huang, and his fund-raiser
sidekick, Maria Hsia, a suspected Beijing agent, escorted then-Sen. Gore
on the tour. Both were recently convicted of raising illegal cash for
the Clinton-Gore reelection effort.

The Riadys run Jakarta-based Lippo Group, which has low-sulphur coal
interests in Indonesia and ventures with Beijing to build coal-burning
power plants in China.

Lippo founder Mochtar Riady was born in China, but took a Muslim name
to do business in Indonesia, which has a predominantly Muslim
population.

At the same time Gore Sr. was glad-handing Chinese officials in
Beijing and Kentucky in the late 1970s and early 1980s, Huang,
coincidentally, was entertaining Beijing officials to drum up overseas
loans to banks in Kentucky and Tennessee.

Huang’s old Commerce Department resume, a copy of which was obtained
by WorldNetDaily, shows he worked as “Far East area manager” for First
National Bank of Louisville, Ky., from October 1979 to October 1981. And
from October 1981 until March 1985, he was Memphis-based Union Planters
National Bank’s representative in Hong Kong. During his tenure, Huang
boasted, “Far East area represented almost all the
bank’s international activities.”

‘Didn’t make sense’

A former West Virginia coal operator and geologist recalls Barker
bringing up the China coal venture during discussions they had in
Lexington about an unrelated land deal in the early ’80s.

“We got to talking and Stoney told me he was upset because of this
business in China,” the former geologist said. “He said it was a big
hassle and that Hammer and Gore were taking his men and money for a
project that didn’t make any sense.”

Barker complained that the Shanxi mine was some 1,000 miles from the
nearest rail, making it hard to get the coal to market, says the
geologist, who wished to go unnamed.

It’s plain that the Shanxi venture benefited Beijing far more than it
did Island Creek and Los Angeles-based Occidental.

But Hammer, a one-time KGB agent and long-time communist sympathizer,
seemed to have grander goals than profits in mind.

In an article he penned for the Los Angeles Times in 1988, on the eve
of the Tiananmen Square massacre, Hammer waxed on about a “New Order” in
which capitalist and communist countries will live together in
“harmony.”

‘New Order’

“The signs in some of the dominant countries and cities of the Far
East, capitalist and socialist alike, are that most people increasingly
want to live together in prosperous harmony — not to impose their
political beliefs and differing ideologies upon each other,” he opined.
“It may not be long, I suspect, before Taiwan will be trading directly
with the
People’s Republic of China.”

Left to right: Sen. Al Gore Sr., Armand Hammer, Mrs. Pauline
Gore, daughter Nancy and little Albert Gore Jr.

Hammer, who also invested in hotels in China, put Gore Sr. officially
on his payroll two years after the Tennessean lost his Senate seat in
1970. He made him Island Creek chairman and an Occidental director,
paying him an estimated $500,000 a year — a compensation package
considered exceedingly generous for those days.

The late Gore’s estate includes Occidental shares valued at between
$500,000 and $1 million. Gore Jr., as estate executor, lists the
Occidental holdings as a personal asset.

Gore, the Democratic presidential candidate, had his own relationship
with Hammer, frequently meeting him for lunch or dinner during Hammer’s
visits to Washington and attending his parties. Also, both he and wife
Tipper sometimes traveled on Hammer’s private jet.

Barker, who worked with Hammer 15 years and met with him regularly,
says he has read some of the accounts of his old boss’s dealings with
the former Soviet Union, documented in revealing biographies published
after Hammer died.

One book, “Dossier: The Secret History of Armand Hammer,” by Edward
Jay Epstein, details how Hammer took marching orders from Moscow,
laundering Soviet money and recruiting Soviet spies and installing them
in the U.S. government.

“It’s interesting reading,” Barker said.

Asked if it shocked him, he paused and then replied, “Well, I never
was privy to what he was doing.”

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