Homage to Cecil Olmstead, Esq. - R.I.P.

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johnkarls
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Joined: Fri Jun 29, 2007 8:43 pm

Homage to Cecil Olmstead, Esq. - R.I.P.

Post by johnkarls »

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Yours Truly is often queried regarding the source of the questions in the monthly Short Quizzes.

Since almost invariably the quizzes have to be included in one of our weekly newsletters before a copy of the book on which we are focusing is received, the questions either relate to information I already know or information that I hope the book will include. [In the latter case, the focus book often does not include the information and extensive research is required to provide answers.]

In this month’s quiz, Questions 11-14 were prompted by my association with Cecil Olmstead, Esq., when Yours Truly was Senior Tax Counsel and Director of Worldwide Tax Planning for Texaco Inc. 1974-1987 when Texaco Inc. was still a Fortune-10 Company.

During the 1950’s through the early 1970’s, Texaco Inc. was the darling of Wall Street because it invariably produced quarter-to-quarter earnings growth under the tutelage of CEO Maurice Granville who, inter alia, brought on board in 1961 an N.Y.U. Law Professor to organize such projects as (1) the United Nations Conference of the Law of the Sea (1973-1982) which produced the U.N. Convention of the Law of the Sea referenced in Question-14, and (2) the United Nations Commission (1973-1994) charged with devising a Code of Conduct on Transnational Corporations.

The U.N. Convention on the Law of the Sea received ratification by a sufficient number of countries to come into force in 1994.

The U.N. Code of Conduct on Transnational Corporations, the 1983 version of which is available on UNCTAD’s website, was eventually incorporated in modified form into the U.N. Guiding Principles on Business and Human Rights which was endorsed on 6/16/2011 by the U.N. Human Rights Council. Unfortunately, it should be noted that since the Code of Conduct is not a convention that has been ratified by any U.N. member states, it has little more moral force than what is possessed by the members of the U.N. Human Rights Council which, on the 6/16/2011 endorsement date, included in its ranks such notorious abusers of human rights as Russia, Cuba, Saudi Arabia, Libya, Qatar, Uganda and Krygyzstan.

Nonetheless, Cecil Olmstead, Esq. for more than a half-century was a Moving Force in International Law, as can be seen in the following obituary from the many honors bestowed on him by foreign governments.

When Maurice Granville retired as CEO of Texaco in 1980, his protégé Cecil Olmstead left as well to join the influential Washington DC law firm of Steptoe & Johnson.

From that platform, Cecil continued to influence world affairs for many decades until his demise earlier this summer.

Zillions of obituaries are available by Googling Cecil with the Washington Post’s receiving the most hits. However, there follows below the most extensive/accurate obituary from a news website located in Westport CT from which Cecil commuted on a weekly basis to Washington DC (and the rest of the world) following his departure from Texaco Inc.

The obituary is inaccurate in one respect, claiming he was an Executive Vice President of Texaco Inc. when he, in fact, was never more than a V.P. with an office (and only a secretary for staff) located next to his mentor, CEO Granville. [While serving as a Texaco VP, Cecil continued as an NYU Law School Professor where he spent most of his time and where he probably had an army of student research assistants at his beck and call.]

However, he was a giant on the international-law stage and his association with Texaco (much like current Massachusetts Governor Deval Patrick’s serving briefly as a task-force Chair and then as General Counsel for Texaco) was merely incidental to his stature and his legacy!!!

Cecil will be sorely missed by all who knew him!!!


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Cecil Olmstead - Obituary
http://www.westportnow.com - 7/11/2013
Cecil J. Olmstead, 92

Cecil Jay Olmstead of Westport, an attorney regarded as one of the nation’s leading authorities on international law, trade and arbitration, died June 25. He was 92.

He was of counsel with the international law firm, Steptoe & Johnson LLP, in Washington, D.C., and former executive vice president of Texaco, Inc..

Born in Jacksonville, Fla. Oct. 15, 1920, he was husband to the late Frances Louise Hughes Olmstead, of Brooklet, Ga.

He served in World War II as a first lieutenant in the U.S. Army Air Corps from 1943-1946, serving with the 8th Air Force in the European Theater of Operations and with the 20th Air Force in the Pacific Theater of Operations.

He was a magna cum laude graduate of the University of Georgia. After the war he attended the University of Georgia Law School, where he received his LLB. He then studied at Yale University Law School as a Sterling Graduate Fellow and graduated in 1952 with honors.

In 1978, he received a Doctor of Laws (honoris causa) from the University of Hull, England, conferred by its Chancellor, the Right Honorable Lord Richard Wilberforce.

While at the University of Georgia, he was a member of Phi Beta Kappa, the Order of the Coif, the Gridiron Society, and Phi Delta Theta. Later he became a member of the State Bar of Georgia, the District of Columbia Bar, and was admitted to practice before the U.S. Supreme Court.

His career began as assistant to Legal Advisor Adrian Fisher, at the U.S. Department of State in Washington. An early assignment was to act as legal counsel to the commission on Organization of the U.S. Executive Branch (the Hoover Commission).

He also taught law at American University in Washington, became a professor of law at New York University Law School and taught at Columbia University School of Law.

In 1961, he became the assistant to the chairman of the Board of Texaco, Inc., and then an executive vice president of Texaco until 1980, when he joined the law firm of Steptoe & Johnson LLP in Washington, where he advised clients on international law, trade, arbitration and international investments.

He had a distinguished career in international law, addressing significant issues of national sovereignty, relations among nation states, and the protection of persons and businesses under international law.

He was a member of the Advisory Panel to the Secretary of State on International Law, a member of the Advisory Committee on The Law of the Sea, an Eisenhower lecturer at the National War College, a U.S. delegate to the United Nations Conference on the Law of the Sea, a U.S. delegate to the United Nations Conference on the Code of Conduct for Transnational Corporations and a member of the World Bank’s panel of conciliators of the International Center for Settlement of Investment Disputes.

He wrote and spoke extensively on issues of international law, including as an associate reporter to Fisher, American Law Institute Restatement, Foreign Relations Law of the United States, and later as the Wang Distinguished Visiting Professor at St John’s University, a visiting fellow at All Souls College, Oxford University, and as a visiting scholar at Yale University Law School.

During his career, he received numerous honors and recognition for his legal work and contributions in the field of law, including the Gold Medal of the City of Brussels, Belgium, presented by the mayor and the Gold Medal of the City of Paris, France, presented by Mayor Jacques Chirac at the Hotel de Ville.

At a ceremony held at the British Embassy in Washington in 1990, he was presented the insignia of Commander of the Most Excellent Order of the British Empire (CBE, Hon.), an Order of Chivalry, as conferred by Queen Elizabeth II in recognition of his distinguished service to the United Kingdom.

For more than 50 years, he was a preeminent member of the International Law Association, headquartered in London, England. He was president of the American Branch of the ILA from 1962-1973 and served as president of the ILA from 1972-1974.

He was honored to receive the ILA’s first Distinguished Service award in 2004 and at the time of his death was Patron of the ILA.

In August 1972 while serving as both president of the ILA and its U.S. branch, he organized and hosted its 55th biennial conference in New York City.

This event brought together leading international lawyers, academics and members of governments and international organizations from around the world who were personally welcomed by Mayor John Lindsay.

In addition to a comprehensive legal program, there were special events held at the United Nations, Gracie Mansion (hosted by Mrs. John Lindsay), Lincoln Center, the Waldorf Astoria, and, on what turned out to be a particularly hot day, members were grateful to receive the hospitality of Gov. Nelson A. Rockefeller and David Rockefeller at the family estate at Pocantico Hills, Tarrytown, N.Y.

He was a member of the American Law Institute, the Council on Foreign Relations, the Washington Institute of Foreign Affairs, the National Foreign Trade Council (of which he was director in 2004), the American Council on Germany (director and honorary director) and the Council on Ocean Law (director).

New York City club memberships included the Knickerbocker Club and the Yale Club. He was also a member of the Cosmos Club in Washington, and the Fairfield County Hunt Club in Westport.

A close friend and colleague remembered him as “being one of the most well-read people on the planet, interested in everything, and able to offer an insightful or clever comment on nearly any topic of contemporary or historical foreign affairs, international law, or domestic politics. And when it came to humor and being playful, his incredible intellect was matched by his delight in telling a joke…even if it was not so good.”

He thoroughly enjoyed family gatherings, especially on the Fourth of July and Christmas, and his enthusiasm for the New York Yankees was a perpetual source of excitement for him.

He loved the theater, Jazz, playing tennis and traveling. His career took him and Frances all over the world.

One of his most cherished memories was a summer trip they took to the Middle East. While in Beirut, they enjoyed the view of the Mediterranean Sea from their hotel balcony as they shared a bowl of fresh cherries.

And, a very special occasion in his life was the 1993 celebration of his 50th wedding anniversary. A party was held at the Fairfield County Hunt Club, and was attended by many family members and friends. “To the delight to all, he sang ‘It Had to Be You’ to his darling Frances,” his family said.

Preceded in death by his wife of 63 years, Frances, he is survived by his four children, Cecil Jay Olmstead, III and wife, Beverly, of Houston, Texas, Frank Hughes Olmstead and wife, Elaine, of Norwich, Vt., Jane Olmstead Murphy of Greenville, S.C. (preceded in death by his son-in-law, Paul Thomas Murphy), and Amy Olmstead Vanecek and husband, David, of Fort Worth, Texas; eight grandchildren and three great-grandchildren; brother, Richard Olmstead, Sr. of Cocoa Beach, Fla.; nephew, Richard Olmstead, Jr. of Cocoa Beach; and niece, Janice Lyn Olmstead Austin of Rockledge, Fla.

A memorial service will be held at a future date in Brooklet, Ga. Tax deductible donations in his honor may be made to the American Branch of the International Law Association (ABILA): Seana Cuevas, c/o Munger, Tolles, Olson LLP, 335 South Grand Ave., 35th Floor, Los Angeles, CA 90071-1560.

solutions
Site Admin
Posts: 168
Joined: Fri Jul 13, 2007 8:38 pm

Texaco – Darling of Wall Street

Post by solutions »

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---------------------------- Original Message ----------------------------
Subject: Texaco – Darling of Wall Street
From: Solutions
Date: Tue, August 27, 2013 8:01 am
To: John Karls
-------------------------------------------------------------------------------

Dear John,

The fourth paragraph of your Homage to Cecil Olmstead said that “[d]uring the 1950’s through the early 1970’s, Texaco Inc. was the darling of Wall Street because it invariably produced quarter-to-quarter earnings growth under the tutelage of CEO Maurice Granville who, inter alia, brought on board in 1961 an N.Y.U. Law Professor to…..”

Could you please explain how an oil company could produce such steady growth?

Sincerely,

Solutions


---------------------------- Original Message ----------------------------
Subject: Re: Texaco – Darling of Wall Street
From: John Karls
Date: Tue, August 27, 2013 9:37 am
To: Solutions
-------------------------------------------------------------------------------

Dear Solutions,

Just like today, Wall Street during that era prized what it perceived to be Growth Companies and accorded their stock a much higher price-earnings ratio than average.

Yes, Texaco was probably the only oil company ever to be perceived as a Growth Company.

Following the 1933 merger of all of Texaco’s Eastern Hemisphere operations (which were solely refining and marketing subsidiaries marketing Spindletop/Texas crude oil to the Far East, Europe and Africa) with Chevron’s Eastern Hemisphere operations (which comprised 100% of all exploration & production in Saudi Arabia, Bahrain and Indonesia), Texaco had more crude oil than its worldwide refining & marketing operations could handle!!!

[This is explained in more detail in an essay entitled “The First Marshall Plan for the Middle East by President Truman” which was posted on http://www.ReadingLiberally-SaltLake.org on 3/11/2008 in a section of that bulletin board entitled “Critiques of Benezir Bhutto’s ‘Reconciliation: Islam, Democracy and the West’” for our 3/13/2008 meeting.]

Accordingly, Texaco’s CEO Maurice Granville believed it was INSANE to spend a nickel more than necessary on exploration!!!

And that the only SANE strategy was to concentrate on expanding refining and marketing operations to market the crude oil that was too much for the Texaco system to handle!!!

If you are opening new refining and marketing facilities like clockwork, it is very easy to look like a Growth Company because, by every measure, you are in fact growing from quarter to quarter!!!

Which was also true of the proverbial Bottom Line, because although CEO Granville was forced to push into many uneconomic marketing areas to continue expansion (uneconomic because of their distance from Saudi and Indonesia), he was always careful NOT to push into a marketing area that was so uneconomic that it lost more per barrel than Texaco was making back in Saudi and Indonesia on the crude that was being funneled into the uneconomic markets.

You might be amused, incidentally, to know that this strategy was the reason why Texaco, for example, was one of the few (if not the only) significant oil company NOT to participate in oil & gas exploration on the Alaska North Slope.

[Which, incidentally, was a Saving Grace!!! All of the oil companies that did participate in ANS exploration were bled to death by delays caused by environmentalists in constructing the pipeline that would bring all ANS crude down to Valdez. And, indeed, Standard Oil of Ohio [one of the pieces of the Supreme Court’s 1911 breakup of the old Standard Oil Trust and one of at least 6 such pieces (in addition to Exxon, Chevron, Mobil, Amoco and Standard of Kentucky) to be trading on the NYSE] which was the most heavily committed on a proportionate basis to the ANS was actually bankrupted by the environmentalists and had to be sold off to British Petroleum whose ANS production, courtesy of its purchase of Standard of Ohio for a song, still produces the lion’s share of BP profits.]

Nonetheless, following OPEC’s nationalization of international oil companies in the 1970’s, Texaco was never able to build an exploration capability with anything like the Midas Touch of Chevron (and many smaller oil companies).

If you have any further questions, please advise.

Your friend,

John K.

solutions
Site Admin
Posts: 168
Joined: Fri Jul 13, 2007 8:38 pm

NYC’s Chrysler Building – Texaco’s Worldwide Headquarters

Post by solutions »

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---------------------------- Original Message ----------------------------
Subject: NYC’s Chrysler Building – Texaco’s Worldwide Headquarters
From: Solutions
Date: Tue, August 27, 2013 10:51 am
To: John Karls
-------------------------------------------------------------------------------

Dear John,

I have often heard that NYC’s famous Chrysler Building was never owned or occupied by Chrysler but was instead the worldwide headquarters of Texaco Inc.

Could you confirm whether this was true and whether it related to CEO Granville and his protégé, Cecil Olmstead?

Sincerely,

Solutions


---------------------------- Original Message ----------------------------
Subject: Re: NYC’s Chrysler Building – Texaco’s Worldwide Headquarters
From: John Karls
Date: Tue, August 27, 2013 11:28 am
To: Solutions
-------------------------------------------------------------------------------

Dear Solutions,

Whether the Chrysler Building was ever owned or occupied by Chrysler depends on your definition of “Chrysler”!!!

The world’s most famous Art Deco building was also the world’s tallest building when it was built in 1930 (the Empire State Building was not completed until 11 months later).

It was built and, until his death in 1940, owned by Walter Chrysler who intended to make it the worldwide headquarters of his Chrysler car company.

However, before the Chrysler Building was completed, Walter Chrysler was persuaded to leave the headquarters of his Chrysler car company in Michigan.

Nevertheless, the top floor of the Chrysler Building was a penthouse which Walter Chrysler occupied as his residence from the completion of the building until his demise.

The first tenant of the Chrysler Building was Texaco Inc. which, for half a century until 1979, occupied the overwhelming majority of the space in the Chrysler Building as its worldwide headquarters.

[When Yours Truly was Senior Tax Counsel and Director of Worldwide Tax Planning for Texaco Inc. 1974-1987, the first 5.5 years of his tenure were spent in the Chrysler Building.]

Following the demise of Walter Chrysler in 1940, his family continued to own the building until 1953 when it was sold to investors. Since then, it has been owned by a succession of investors.

Many of the owners of the Chrysler Building offered Texaco a substantial rent reduction if Texaco would permit its name to be substituted for Chrysler in the name of the building. But Texaco always refused in a desire to maintain a low profile.

Texaco employees were very grateful because, for example, during my 5.5 years in the Chrysler Building we saw on two occasions body bags being removed from Mobil’s worldwide headquarters across the street following bombings aimed at Mobil.

[No bombers ever seemed to be able to figure out that Texaco was across the street = northeast corner of Lexington & 42nd vs. southeast corner of Lexington & 42nd for Mobil’s worldwide headquarters. I do not recall whether Exxon’s worldwide headquarters on Sixth Avenue (aka Avenue of the Americas) were ever bombed -- it was a building identical to the worldwide headquarters of McGraw-Hill one block north of McGraw-Hill (both buildings are/were part of Rockefeller Center which is why the Rockefeller’s Standard Oil Co. of N.J. (aka Exxon) was still located there -- it has since moved to Texas as did Mobil to Virginia prior to its acquisition by Exxon).]

*****
The second part of your question was whether the Chrysler Building as Texaco’s worldwide headquarters had anything to do with CEO Maurice Granville and has protégé Cecil Olmstead.

CEO Granville was a lover of NYC and vowed he would never leave it, either in terms of residence or office.

When Texaco’s Board of Directors decided to move the headquarters, after 50 years in the Chrysler Building, to Westchester County, CEO Granville vowed he would not move to the new headquarters.

Just like Aramco (100% of oil & gas in Saudi Arabia owned by Texaco, Chevron, Exxon and Mobil) maintained an office in Burlington House on Sixth Avenue, Texaco retained a few floors in the Chrysler Building to accommodate important meetings with outsiders.

One floor was reserved for CEO Granville’s office and the office of his protégé Cecil Olmstead.

A small tidbit = The top-floor penthouse of the Chrysler Building, as mentioned above, was the residence of Walter Chrysler from building completion in 1930 until his demise in 1940. From 1940 until 1979, it was Texaco’s Executive Dining Room and, in that reincarnation, was called The Cloud Club. Unfortunately, I do not know whether that floor was one of the ones retained when Texaco moved in 1979.

A year later, CEO Granville and his protégé Cecil Olmstead left Texaco together, the former retiring and the latter moving to the prestigious international Washington DC law firm of Steptoe & Johnson.

Although Texaco continued to occupy the few floors it retained when it moved the bulk of its worldwide headquarters to Westchester County, the Chrysler Building went through bankruptcy because it was so difficult to fill up in any reasonable length of time the overwhelming majority of its space which was vacated by Texaco.

That is all I think I remember about the Chrysler Building (except that you could throw open all its windows like a house!!!).

If you have any further questions, please fire away because they might spark more memories.

Your friend,

John K.

PS -- You might remember Phil Schaefer who, together with his twin brother Elmer who became a Professor at William & Mary Law School, was in the class behind me at Harvard Law School (1968 vs. 1967) and on whom (and his brother) your mother had crushes when they were growing up in Elmhurst IL. You might be amused to know that after working for Texaco for several years in the Chrysler Building, I bumped into Phil at a meeting. He had joined the Texaco Legal Department before I joined Texaco. But he had been a litigator which meant that he had little contact with other Texaco executives AND THE LEGAL DEPARTMENT WAS IN A DIFFERENT ELEVATOR BANK THAN THE TAX DEPARTMENT.

PPS -- The reason for mentioning several times the 1979 destination of Texaco’s worldwide headquarters as Westchester County is that, as was typical of Westchester County, everything was a mish-mash. The building was located in the Purchase section of the Town of Harrison NY, it had Port Chester NY telephone numbers and its mailing address was White Plains NY even though it was more than 5 miles from the nearest border of the City of White Plains. It was only 0.5 miles from the worldwide headquarters of Pepsi which did use the Purchase NY post office -- Texaco apparently didn’t trust the Purchase NY post office to handle its volume of mail and made special arrangements with the White Plains NY post office.

solutions
Site Admin
Posts: 168
Joined: Fri Jul 13, 2007 8:38 pm

Elaboration Regarding Cecil Olmstead’s U.N. Role

Post by solutions »

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---------------------------- Original Message ----------------------------
Subject: Elaboration Regarding Cecil Olmstead’s U.N. Role
From: Solutions
Date: Sun, September 1, 2013 2:08 pm
To: John Karls
-------------------------------------------------------------------------------

Dear John,

The fourth paragraph of your Homage to Cecil Olmstead said that Texaco Inc. CEO Maurice Granville “brought on board in 1961 an N.Y.U. Law Professor to organize such projects as (1) the United Nations Conference of the Law of the Sea (1973-1982) which produced the U.N. Convention of the Law of the Sea referenced in Question-14, and (2) the United Nations Commission (1973-1994) charged with devising a Code of Conduct on Transnational Corporations.”

Yet the obituary you appended to your homage only says that Cecil Olmstead was a U.S. delegate to the U.N. Conference on the Law of the Sea and a U.S. delegate to the U.N. Conference on the Code of Conduct for Transnational Corporations

In addition, why would Texaco CEO Maurice Granville spend his shareholders’ money on hiring someone to organize such projects as those two U.N. conferences?

Sincerely,

Solutions


---------------------------- Original Message ----------------------------
Subject: Re: Elaboration Regarding Cecil Olmstead’s U.N. Role
From: John Karls
Date: Sun, September 1, 2013 4:19 pm
To: Solutions
-------------------------------------------------------------------------------

Dear Solutions,

The short answer to your first question is that many of us who were active in the field of international law at that time knew more than the obituary writer.

[Indeed, you may recall among other things that after heading several of its subcommittees, I chaired 1994-1996 the American Bar Association’s Committee on Foreign Activities of U.S. Taxpayers which comprised the nation’s top 300 international tax attorneys with 22 working subcommittees.]

However, even for someone who does not have direct knowledge of what Cecil accomplished, “reading between the lines” of the obituary is quite easy. Cecil was President of the U.S. Branch of the International Law Association 1962-1973 and President of the worldwide International Law Association itself 1972-1974.

The International Law Association is the international equivalent of the American Bar Association. And, as such, was ideally poised to engineer both U.N. conferences.

And when did both of those conferences begin???

Why right in the middle of Cecil’s 3-year term as President of the worldwide International Law Association while he was also serving simultaneously as President of the ILA American Branch, a position he had already held for more than a decade!!!

*****
Your second question concerns the motivation of Texaco CEO Maurice Granville.

It may be hard for you to believe, but major corporations are often headed by true humanitarians.

In this regard, you might recall that immediately after Eugene Lang was featured in 1986 on 60 Minutes and the front page of the New York Times vis-à-vis his promise 5 years earlier to the graduating sixth graders of Harlem P.S. 121 to provide tutoring/mentoring through H.S. graduation and to guarantee their college tuition, I was one of 178 people in 51 American cities to step forward to replicate what he had done and also served as Gene’s volunteer national treasurer in the 1990’s.

However, you appear to have forgotten that virtually all of the other 177 people who stepped forward were CEO’s of major corporations.

Texaco CEO Maurice Granville, though a generation earlier, was also a true humanitarian. And he was intensely interested in dedicating the wealth of the oceans to benefit humankind generally through the U.N. in addition to providing an orderly framework for governing the wealth of the oceans. And he was intensely interested in providing a code of conduct to govern the behavior of multi-national corporations.

It may also be hard for you to believe that such goals might also be in the interest of multi-national corporations and their shareholders.

But most corporate CEO’s believe in “fair competition” based on “fair play.”

So taking steps to bring about a code governing the behavior of MNC’s -- rather than permitting a “race to the bottom” in terms of corporate conduct by not taking such steps -- would not have been difficult for CEO Granville to justify, if asked.

Moreover, many CEO’s such as Maurice Granville often cause their companies to act in the best interests of humankind -- after all, if they didn’t, there would be no such thing as corporate charitable contributions and corporate charitable foundations.

Your friend,

John K.

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