The Sunday Telegraph (London)
January 6, 2019
How Gulbenkian made himself the world's richest man
by LEWIS JONES
BOOK: MR FIVE PER CENT by Jonathan Conlin 416PP, PROFILE, £25, EBOOK £15.83 …..
When Calouste Gulbenkian died, in 1955 aged 86, he was the world's richest man. In a magisterial new biography, published to mark the 150th anniversary of his birth, Jonathan Conlin gives a rough estimate of Gulbenkian's fortune, at 2015 prices, as £19.4billion, which he had acquired over more than half a century as "a back-room fixer, an intermediary between the worlds of business, diplomacy and high finance", and, above all, in oil.
The ultimate citizen of nowhere, "always a visitor, never at home", Gulbenkian was born in Istanbul in 1869, to a family of rich Armenian merchants, trading from Marseille and Manchester to Beirut and Baghdad, and came of age in the Ottoman Empire, which he saw torn apart by war and genocide. A British subject from 1902, he held three other passports, and was an accredited diplomat of the Ottoman and Persian empires.
Westerners turned to him as a source of intelligence on the Middle East, while Easterners – from Sultan Abdülhamid II in 1900 to Ibn Saud and the Shah of Iran four decades later – sought to learn from him the plans of the Great Powers and their oil companies. He had a remarkable "talent for evading attribution to this or that side". At one point the French thought he was in cahoots with the Americans, while the British thought he was in cahoots with the French.
His deals were innumerable, manifold, and "fiendishly" complicated. In 1910, for example, he was "negotiating for the Ottoman government, the Quai d'Orsay, NBT [the National Bank of Turkey], Crédit Mobilier and himself, all at the same time". He always insisted that his negotiations were based on "fixed moral principles", but was careful never to explain what they were, which was just as well. He made his first fortune in London in the 1890s, in a "racy corner" of the Stock Exchange trading in volatile South African mining companies, in league with the notorious crooks Horatio Bottomley and Whitaker Wright. By 1898 he had assets equivalent to £12million, most of which he cashed in "before it all came tumbling down".
His role in securing agreement to oil concessions from the Persian and Iraqi parliaments certainly entailed bribery on a massive scale, and although he was terrified of socialism and abhorred all taxes he was happy to deal with Bolshevik Russia from 1921 to 1932, helping it to export petroleum from Grozny, gold from Lake Baikal, lead and zinc from Siberia, and art from the Hermitage, some of it to his own magnificent collection. From 1924 he acquired a monopoly on the export of Russian caviar, but the relevant Soviet agency decided to hold back enough caviar to undercut the Armenian merchant he was bankrolling, landing Gulbenkian with two tons he could not sell. His family ate as much as they could, then gave a pound or two to everyone they met.
His greatest coup was the Red Line Agreement, drawn up at Ostend on July 31 1928, by which the companies now known as BP, ExxonMobil, Total and Royal Dutch-Shell agreed to collaborate in the "Ottoman Empire in Asia" as it had been in 1914 – by then the British and French mandates and protectorates now known as Iraq, Jordan and Saudi Arabia – in a joint venture, the Turkish Petroleum Company (TPC), which Gulbenkian had established in 1912.
The assembled oilmen disagreed vehemently on where the Ottoman Empire in Asia had been in 1914.
("Oilmen are like cats," Gulbenkian once observed, "one never knows when listening to them whether they are fighting or making love.") Eventually, according to Ralph Hewins's 1957 biography, Gulbenkian "took a thick red pencil and slowly drew a red line", thereby establishing his claim to 5 per cent of TPC's oil.
Conlin dismisses this story as a myth invented by Gulbenkian's son Nubar, noting that the agreement took four years to reach, and that Gulbenkian was not present at Ostend on July 31. But the 5 per cent was real enough and, subsequently vested in his company, Partex, continues to apply today. And thanks to his "orderly development of a fragmented oil industry through vertical integration and international cartels", Conlin assures us, "the web woven by Gulbenkian is with us still".
Gulbenkian was a "complex and evasive individual" and, unlike the publicity-hungry Nubar, he was obsessively private, and modest. He declined a knighthood and the Légion d'honneur, and after renting a couple of yachts concluded that "the appeal of yachting is snobbery … it is an enormous waste, without any rewards, moral or physical". He liked to relax by going over his children's household expenses, and towards the end of his life he fretted about whether he could afford a "Big Ben" alarm clock from WH Smith. But he did spend huge sums on jewellery by René Lalique, although apparently Nevarte, his poor socialite wife, was never permitted to wear any of it. And he built "a fabulous palace" in Paris, where he gave Nevarte "no authority to deal with the smallest item", so she had to hold her cocktail parties on a bench in the street outside.
Gulbenkian filled his palace with his art collection, and worked and dined there, alone, and showered there – or was showered, by his valet with a pressurised hose, as he stood in a niche lined with silver leaf – but always slept in his suite at the Ritz. He worried about his health, and followed a strict diet of fruit and raw vegetables, curds, malt extract and unrefined sugar, while his valet was burdened with pills, oils, powders, salts, creams, lotions and gargles. There were 44 doctors in his address book, and by way of a rejuvenating tonic one of them insisted he have regular sex with young women, which he did in his hotel suite.
In 1936 he began to consider donating his art collection to the National Gallery in London. He liked its director, Kenneth Clark, who recalled him as "short and dense like a mole, but one did not think of him as either small or fat, because one's eyes were concentrated on his magnificent head". During the war he found refuge in neutral Lisbon, where he took five suites at the Hotel Aviz, and where the chief curator of the National Gallery in Washington spent years wooing him for his collection, offering to send a US warship to carry his paintings across the Atlantic. Anxious, as always, about the tax implications, and mistaking Salazar's Portugal for a tax haven on the lines of Panama or Liechtenstein, he decided to give it to Lisbon, where it was comprehensively clobbered.
"Surely Gulbenkian," argues Conlin, "has something important to tell us at this moment in history", when free enterprise and movement are under attack from both Left and Right. It is hard to see what that might be, but his story is a fascinating one.
His valet showered him with a pressure hose as he stood in a niche lined with silver
GRAPHIC: Calouste Gulbenkian by Charles Joseph Walker, 1912, left; Ghirlandaio's Young Woman, c1490, bought by Gulbenkian in 1929, above; Degas's Henri Michel-Lévy c1878, bought in 1919, far left
