Deuss: The man behind the myths
BERMUDA-based oil magnate and Bermuda Commercial Bank chairman John Deuss, 60, has lived a life that is remarkable even among the rich and famous.
Since his first car dealership business went bust, he has outwitted the Soviets, broken an oil embargo in South Africa, had his home firebombed by anti-apartheid protesters and helped clinch the world's largest oil deal. In the process, the Dutchman has made billions of dollars.
In 1998 it appeared to many that he "bought" the new Progressive Labour Party Government in Bermuda.
Deuss paid off the mortgage on the party's headquarters a few years ago, appointed PLP leader and former Premier Jennifer Smith as a director of his Bermuda bank and is widely thought to have spent at least $2 million financing the PLP's entire election campaign that culminated in the party winning power for the first time in November, 1998. His relations with the governing party appear to have cooled in recent years and he is not believed to have contributed to last year's re-election campaign.
"He had this big villa where girls in bikinis were lounging around. A girl would bring him a telex about some deal and he would say 'yes' or 'no' and she would go away to carry out his orders. It was like something out of a Harold Robbins novel."
That image of his meeting with John Deuss at the billionaire's Bermuda paradise home in Harrington Sound, Smith's Parish, in 1979 remains vivid in the memory of Dutch journalist Friso Endt nearly two decades after it took place.
As head of the financial desk of the 250,000-circulation newspaper ? the "New York Times of Holland" ? Endt had flown to Bermuda unannounced to interview his secretive compatriot who had just been accused by the Soviets of stealing oil worth more than $100 million.
"I stayed in a local hotel and he sent his car and driver to pick me up," he told us. "I only managed to spend one day with him because he left the next morning by private plane to visit the Shah of Persia (now Iran)."
Such is the lifestyle of Johannes Christiaan Martinus Augustinus Maria Deuss, the son of a humble garage owner from Nijmegen, Holland, who has created a world-wide business empire from his base in Bermuda
His billions of petro dollars have bought him a string of homes around the world, two Gulfstream jets, worth $52 million in total, and a magnificent 180-foot, three-masted schooner ? ? estimated to be worth between $18 and $22 million.
But the spectacular rise of a man who is almost universally described as "utterly ruthless" and "cunningly clever" has been dogged by controversy and casualties along the way.
The success he has enjoyed for the last 20 years is a far cry from his inauspicious start in business as a young man in the 1960s.
By the time his second-hand car dealership in Holland went bust in 1967 owing 5.5 million guilders, Deuss had already developed a reputation for not paying his bills.
According to articles supplied by Dutch newspaper , Deuss began "imitating Bonnie and Clyde" by driving around in "a Thunderbird car with bullet-hole stickers all over it" and "parking it in rose-beds when he couldn't find a parking spot".
"He left behind a mountain of tickets for speeding, together with a pile of unpaid bills," according to one article. It quoted his former bookkeeper as saying: "I can't remember one nice day. We would always get angry letters."
Deuss apparently decided to get into the oil business during the 1973 oil crisis, putting together capital of $300,000 and forming Bermuda-based JOC Oil, an acronym for John's Own Company. A few years later he formed Transworld Oil and Transworld Energy on the island and later incorporated Hydrocarbon Industries.
In 1976, Deuss hit the big time when he signed a contract with the Soviet Union's national oil company, Soujuznefteexport (SNE), to buy 3.85 billion tons of oil for resale to third parties.
But Deuss fell behind with his payments and the Soviets suspended deliveries in June, 1977, after 39 shipments of 1.28 million tons of oil and oil products.
JOC had paid $21.4 million for the first six shipments but refused to pay $101.8 million for the remaining 33 deliveries, accusing SNE of "failing to meet its obligations and responsibilities".
A decade of bitter legal wrangling followed during which JOC never disputed that it had received the oil but attempted to avoid paying by arguing that the sales contract was invalid because only one SNE director had signed it, rather than the two signatures required under Soviet law.
In 1984, a Foreign Trade Arbitration Commission in Moscow awarded SNE $199 million, made up of $101 million for the shipments, $97 million in interest and $1 million in costs, even though it conceded the contract was invalid.
Deuss brought the case to Bermuda on the grounds that it was JOC's place of registration and Bermuda Supreme Court overturned the Commission's decision, stating that the FTAC had no jurisdiction. The court also awarded costs against the Soviets.
In 1987, however, the $199 million award was reinstated by Bermuda Court of Appeal and it appeared that the Soviets had finally won.
But Deuss refused to quit and announced he would appeal to the highest court of appeal in the land ? the Privy Council in England.
That was enough for the Soviets, who threw in the towel and agreed to a confidential settlement between the two parties. newspaper quoted an "insider" as saying the agreement was "in favour of John Deuss", further enhancing his reputation as a businessman who loses few battles.
Journalist Friso Endt said SNE's directors were all later fired for the fiasco and "sent to the business equivalent of Siberia".
The company through which Deuss owed the money to the Soviets was Netherlands Antilles-based First Curacao International Bank ? the same entity that Deuss used in 1993 to buy a controlling 32 per cent stake in Bermuda Commercial Bank from Barclays Bank By the mid-1980s, Deuss was already fabulously weathy with an estimated net income of $1 million per week, according to.
Meanwhile, the man who hates publicity went from one public controversy to another.
In 1984, the newspaper in Britain revealed he had secretly delivered 60 million barrels of oil to South Africa over three years in defiance of an oil boycott against the country because of its policies against blacks.
A week later, a terrorist group calling itself "Pyromaniacs Against South Africa" firebombed his $6 million castle in Berg en Dal, Holland, causing extensive damage.
The bombers sneaked past six English guards and bypassed Deuss' electronic security system by cutting wires at a gate.
Two more bombs, made out of jerry cans filled with gasoline, each with a timer and explosives, were disarmed by police. Deuss was not at home during the attack and no one was injured.
His South Africa connection ? widely condemned around the world ? caused barely a stir in Bermuda, despite its 70 per cent black population.
Long-serving Bermuda Premier Sir John Swan, who is black, and Donald Lines, while he was still president of the Bank of Bermuda, even went on to become directors of Caspian Pipeline Consortium, a company Deuss helped set up in Bermuda in 1993 to pump oil out of Kazakhstan.
Deuss made hundreds of millions of dollars in profits from his dealings with South Africa, some of which he used to buy a house from former top golfer Gary Player.
His importance to the South African economy was such that the Shipping Research Bureau, an Amsterdam-based anti-apartheid group, estimated that, in 1980, Deuss may have supplied as much as 20 per cent of the country's crude oil import requirement.
Following the bombing, Deuss, who was already worried about possible danger from the Soviet KGB, tightened security at all his homes around the world, including Deep Water, at Harrington Sound.
The setback did not stop him expanding his business empire, however, and, in 1985, he paid $420 million for an oil refinery in Philadelphia and 576 gas stations in Pennsylvania and New York.
In 1987, Deuss lived up to his image as a fearless business gambler by audaciously cornering the market in high quality Brent Crude Oil with a view to controlling the market ? and the price.
With an array of futures contracts, his Bermuda-based Transworld Oil bought all but one of the 42 cargoes produced in January, 1988, from the Brent field of the North Sea ? some 25 million barrels worth $425 million.
However, it was one of the few gambles he lost. The world was awash in surplus crude oil at the time and the world's major oil companies, fearing tighter regulation by the British government, quickly made available enough oil to keep the market working smoothly. Deuss was forced to sell at a substantial loss.
It proved only a minor setback, though. After Iraq invaded Kuwait in August, 1990, Deuss invited David Marchant, the author of this article, up to Transworld Oil's offices in Hamilton for a guided tour.
When I asked how his company was faring at a time when oil prices were fluctuating wildly, he replied: "Put it this way. In the past month, I've had a very good year."
Deuss was involved in another controversy in the late 1980s when his attempt to buy a $3.6 million stake in a skiing development in Jackson Hole, Wyoming, ran into problems after a dispute with the seller, Paul McCollister.
Deuss sued McCollister and, after a bitter four-year legal battle, the Dutchman emerged the victor in June of 1992 and walked away with about $10 million, representing an 18 per cent return on his investment, and 20 acres of mountain around his luxury home in the area.
McCollister, who ended up losing the skiing development, told us: "I would prefer not to comment about Mr Deuss. It would prove embarrassing to him. We were involved in a pretty bitter lawsuit."
Not so shy to talk, though, is Friso Endt, who has monitored Deuss' life for three decades.
"When I was in Bermuda in the late 1970s, he had told me that he had an office in Hamilton of 35 people, who were mostly Dutch," he told us.
"But, when I hired a moped to find his office, all I could find was a little room in Hamilton with a telephone in the corner but no staff."
"He doesn't like me," admitted Endt. "He has disliked tremendously what I've published. I once did a three-page feature on him which he unsuccessfully tried to stop being printed."
Endt can talk for hours about the oilman.
"He never drinks or smokes, he likes women and he has very little humour," he said. "He's a complete workaholic. If the day had 48 hours in it, he would use them."
He added: "I once spoke to a Dutch lawyer who went skiing with him in Jackson Hole.
"After skiing, they came home and there was a great fire-place and the Dutchman said, 'Why don't we cut down some wood to make it cosy' and Deuss replied: 'Why? We have central heating.' That's the way he is."
In Bermuda, tales abound of how Deuss' two Old English sheepdogs ? Rufus and Rocco ? were allowed to roam the offices of Transworld Oil, where they have bitten several staff, their American trainer and even Deuss himself, according to sources.
Deuss is known for his great contribution to the Bermuda economy and for acts of kindness to his staff ? he once flew all his female workers in Bermuda to New York for the day to celebrate Mother's Day and this year sent 50 pizzas around to Bermuda Commercial Bank so the staff could eat lunch. In 1993, Deuss played a pivotal role in clinching the world's largest oil deal ? a $230 billion agreement between US giant Chevron and Kazakhstan, elevating his reputation as a briliant businessman of great influence in the oil world.
He participated in the deal as president of Bermuda-based Oman Oil Company (OOC), which represents the oil rich Gulf State's international interests. However, his reputation was hurt when he lost a power struggle with Chevron and was kicked out of the deal. He also lost his influence with the Omanis and left as President of OOC, believed to have been fired.
Deuss has traditionally been a strong supporter of the United Bermuda Party and had a close relationship with Bermuda's long-time Premier Sir John Swan, who tried to take Bermuda Independent in 1995 but the public voted by a ratio of three votes to one to remain tied to the UK.
After Sir John's resignation as Premier following the referendum loss, Deuss switched allegiances from the United Bermuda Party to the PLP. He paid off the PLP's mortgage on its party headquarters and began wining and dining its leaders.
It is also widely thought that Deuss financed most of the PLP's 1998 General Election campaign, which is estimated to have cost over $2 million.
This money was used, inter alia, for an unprecendented advertising campaign in the local media that culminated in 15 pages of advertisements in Bermuda's three newspapers on the Friday before the vote, to pay for opinion polls, professional consulting services and to run charter flights to fly home PLP supporters to vote.
It remains to be seen whether Deuss would help fund a campaign to convince the Bermudian public that the island would be better off by becoming Independent from the United Kingdom. Asked by US magazine in 1985 why money was so important to him, Deuss is reported to have replied: "Don't you understand that it's a question of power and money means power. It's as simple as that." In today's Bermuda, Deuss' money seems to have bought him just that. Deuss rarely grants interviews and declined to comment for this article.
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