Wyatt charges serious, but treason isn't in the mix

Jurors hearing the case against Oscar Wyatt, who goes on trial today, will face more than the challenge of determining the legendary oilman's guilt or innocence. They also must separate the charges on which Wyatt was indicted from the implied indictment of his patriotism.

Wyatt is accused of funneling money to Saddam Hussein's regime under the United Nations' Oil-for-Food program in Iraq, put in place after the Persian Gulf War.

Wyatt doesn't deny that he did business with the Iraqis, but his lawyers contend it was done legally.

Wyatt is a divisive figure, revered by some, reviled by others.

A U.N. investigation led by former Federal Reserve Chairman Paul Volcker said Wyatt began doing business with Iraq in 1972. The mere fact that he admits doing business with Saddam is enough to make him a traitor in some people's eyes.

That's why it's important to remember for what Wyatt is on trial.

The charges are wire fraud, conspiracy and violating U.S. sanctions. Prosecutors fought to allow a jury to see handwritten notes from an Iraqi oil official who said Wyatt discussed possible dates of an attack and troop strength just weeks before the U.S. invasion in 2003.

Wyatt's attorneys contend he didn't say anything that wasn't openly discussed on every cable news channel in the U.S., and he probably didn't. It's unlikely Wyatt had access to classified information.

It doesn't matter, anyway. The jury isn't deciding whether Wyatt committed treason.

But by presenting the information, prosecutors can foster the idea in jurors' minds that Wyatt was a traitor, and from there, work down to the lesser issue of a conspiracy to circumvent U.N. sanctions.

Bare-knuckles gambler

At the heart of the trial is Wyatt's style of doing business, which harkens to a time when the oil patch was a scrappy place. Wyatt's legacy is that of a bare-knuckles gambler always willing to do a deal. He never let the personal or political get in the way of business.

When a subsidiary of Coastal, the company he founded, plunged the cities of San Antonio and Austin into darkness after a natural gas shortage in 1972, it was just business. When he sued his brother-in-law in the 1980s over the collapse of the Sakowitz retail chain, it was, again, just business. When Coastal was sold to El Paso Corp. in 2001, that, too, was just business, as it was a few years later when he joined a proxy fight against El Paso's management.

Wyatt was a longtime fixture at OPEC meetings, and his refineries had a taste for the sour crude like that produced by Iraq long before other U.S. rivals began switching from the sweeter West Texas Intermediate variety.

So when he dealt with unpopular regimes, such as Libya's Moammar Gadhafi, back when he was our enemy, and Saddam, back when he was our friend, it, too, was just business — another deal from a guy who liked to do deals on the edge and couldn't be bothered with political controversy.

'Profitability contest'

In a 2000 interview with Wyatt, Bloomberg News reported he offered Saddam a stake in Coastal's international refining operations before the first Gulf War.

"My job is not to win a popularity contest; my job is to win a profitability contest," he said, according to the story.

So it's not surprising that Wyatt, according to Volcker's report, was among the first buyers Saddam picked when the U.N. allowed him to sell Iraqi oil to buy food for a nation cut off from the world by economic sanctions.

Public opinion matters now

In today's oil patch, things aren't done Wyatt's way anymore.

The business has become more, well, refined. Executives worry about public opinion and are more likely to shy from controversy.

Consider how BP abandoned plans to increase pollution from its Whiting, Ind., refinery — even though it had the permits to do so — after public outcry and a call for boycotts of its branded service stations in Chicago.

One wonders how Wyatt would have responded in such a situation.

But Wyatt's well-known abrasiveness isn't on trial, and guilt by association isn't a federal crime.

The question for the jury pertains to the legality of the deals. Did Wyatt pay illegal kickbacks to Saddam's regime?

No matter the answer, it isn't the same thing as treason.

Loren Steffy is the Chronicle's business columnist. His commentary appears Sundays, Wednesdays and Fridays. Contact him at loren.steffy@chron.com. His blog is at http://blogs.chron.com/lorensteffy/.