The Smell of Scandal?

In the tough, highly competitive oil industry, James Andrew Moffett, 60, is a man who can take care of himself in the clinches. And he likes a grudge fight. A onetime senior vice president of Standard Oil (N.J.), later board chairman of the Bahrein Petroleum Co., Ltd., Moffett stirred up such a fight last January.

Sharp-tempered Jimmy Moffett filed suit for $6,000,000 against Arabian American Oil Co. (owned by Standard Oil Co. of California and the Texas Co., which also own Bahrein Petroleum), holder of the vast oil concessions in Saudi Arabia (TIME, March 24). This sum, said he, was due him for political chores done while he was with Bahrein Petroleum. When a Senate committee perked up its ears at this charge, Jimmy Moffett gladly told his story.

In 1941, he said, King Ibn Saud demanded from Arabian American Oil (Aramco) $6,000,000 a year for five years because his oil royalties had fallen off. Aramco could not meet this demand, so Moffett took the problem to President Roosevelt, under whom he had served as the New Deal's first housing administrator. Moffett suggested that the U.S. give Ibn Saud the $6,000,000 for five years. Aramco would pay it off by delivery of oil to the U.S. Navy. The deal fell through. But soon after, said Moffett (and a letter from Jesse Jones, then Federal Loan chief, seemed to back him up), Ibn Saud got his money from the British, who had been asked to pass it along to the King out of funds they were receiving from the U.S.

When the Navy did buy Aramco oil during the latter part of the war, Moffett said, his onetime associates doubled the prices he had quoted President Roosevelt, "deliberately defrauded" the Government out of some $33,000,000. (The Navy promptly denied this, said it had paid less for Persian Gulf Oil than for oil from other sources.)

In revealing this tale of international oil intrigue and secret diplomacy, Moffett had left out a few chapters. They were thoughtfully supplied last week by William Starling Sullivan Rodgers, Aramco director and board chairman of the Texas Co. First, he called Moffett's accusations of overcharging the Navy "absolutely false." Then Rodgers threw a Sunday punch. Moffett, he implied, was firing off his charges because he was trying to get control of Arabian oil himself. A year ago, Moffett had tried to persuade Ibn Saud to cancel Aramco's concession, give it to Moffett & friends. If Ibn Saud did, Moffett promised to double his royalties.

To this Jimmy Moffett answered, in effect--so what? He had tried to make a deal with Ibn Saud. But this action, he said, was entirely within his rights.

Whether by accident or not, Moffett had picked a shrewd time to air his charges. For any investigation of Arabian oil in the immediate future would be against the background of U.S. diplomacy in the Middle East. To take a hard look at this smeary oil picture, the Senate committee has called in former Senator Burton K. Wheeler (see NATIONAL AFFAIRS), a skilled scandal snuffer who first won national attention while investigating Teapot Dome. Wheeler has not yet decided whether a fulldress investigation is warranted. But last week all signs pointed to one.

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