Black Bart’s Strategic Retreat: The Long Exile of a Mobile Oilman

MOBILE, Ala. — For most of the last two decades, Bart B. Chamberlain Jr. was a Mobile oilman in name only. He had not lived in the United States since the autumn of 1989, when he left the country rather than pay a federal judgment of more than $19 million. Chamberlain, born in 1914, died this year, and his death was noted in The Wall Street Journal’s June 2 Remembrances column. The Journal summed up his last chapter plainly: once a successful Alabama oil man, he spent nearly the last two decades of his life on the lam to avoid paying a court judgment.

The judgment came from a legal fight that began during the Arab oil embargo of 1973–74 and ran through federal courts for most of the 1980s. The court record gives an unusually full account of a Mobile business career, and of the way it ended.

‘Black Bart’ and the Citronelle field

Chamberlain was a colorful figure long before his legal troubles. A 1975 New York Times profile called him a “swashbuckler” and noted that he had picked up the nickname “Black Bart” earlier in life. He entered the oil business in the late 1950s. Over time he built his holdings around the Citronelle oil field in north Mobile County, Alabama’s best-known oil field.

According to a 1980 federal court opinion, Chamberlain held the largest working interest in the Citronelle field, which had some 900 interest owners. He owned about 90 percent of Citronelle-Mobile Gathering Inc. and 87.5 percent of Citmoco Services Inc. Both were Delaware corporations run out of Mobile. They bought crude from the Citronelle field and resold it, and Citmoco operated a terminal facility in the field.

The embargo shipments

The case that eventually drove Chamberlain abroad came out of the energy crisis. In late 1973, members of the Organization of Arab Petroleum Exporting Countries cut off oil shipments to the United States. At home, federal price controls under the Economic Stabilization Act of 1970 and the Emergency Petroleum Allocation Act of 1973 capped what domestic crude could sell for.

Between December 1973 and May 1974, Chamberlain’s companies sold four cargoes of Citronelle crude, a little under a million barrels in all, to Grand Bahamas Petroleum Co. The first three went at $14 a barrel and the last at $13, well above the domestic ceiling prices. The Commerce Department had issued export licenses for the shipments. The buyer was a foreign subsidiary of New England Petroleum Corp., and the crude was refined in the Bahamas. Much of the refined product came back to New England Petroleum in the United States.

The arrangement drew national attention in 1975. New England Petroleum was owned by Edward M. Carey, brother of New York Gov. Hugh Carey, and federal energy regulators were examining the deal. Edward Carey denied that he had profited from it.

Federal regulators, later the Department of Energy, took the position that the oil had never really been exported. In their view, the cargoes were domestic sales routed through the Bahamas, and the sales violated price controls. The government sought to recover the overcharges.

Losing in court, round after round

Chamberlain went to court first. In 1977 he and his companies filed a declaratory judgment action against the federal agencies, arguing that the sales were legitimate exports and exempt from domestic price ceilings. The government counterclaimed.

On Sept. 15, 1980, the U.S. District Court for the Southern District of Alabama ruled against him. It found that the transactions broke federal price regulations and ordered restitution, with overcharges estimated at $6 million to $9 million at the time. The Temporary Emergency Court of Appeals, the special appellate court Congress created for energy and price-control cases, upheld the finding that the sales were not exempt exports. That court later described exportation as “a severance of goods from the mass of things belonging to this country.” Oil that was always meant to come back, it reasoned, did not qualify.

A second trip to that court in 1987 went worse for Chamberlain. The appeals court put the overcharges at $6,769,956.76. It found Chamberlain personally liable for the full amount as the “central figure” who had arranged and directed the sales, rejecting the idea that his liability should be limited to the money he personally received. It also threw out the flat 6 percent interest rate the trial court had used. In its place, the court required interest at rates reflecting what the money had actually been worth since 1974, and it barred the deduction of income taxes from the restitution.

With 14 years of interest added, the figure grew quickly. On Nov. 30, 1988, the district court entered judgment of $19,401,720.47 plus interest and costs. The debt later passed $21 million.

The retreat

Chamberlain did not pay. According to the U.S. Court of Appeals for the 11th Circuit, he left for Switzerland in August or September 1989 and began moving assets beyond the reach of American courts. He used Douglas Trading Bahamas Ltd., a foreign company he owned jointly with his wife, and Douglas Oil Purchasing Co. to do it. The appeals court said the transfers included undeclared “dividends” to Chamberlain.

The government moved to stop him. On Sept. 28, 1989, the district court issued a temporary restraining order barring asset transfers. About a month later, an Associated Press report from Mobile said Chamberlain had confirmed that he had fled the country and intended to renounce his U.S. citizenship. That report put the judgment at $25 million.

What followed was a slow campaign against an absent defendant. On Feb. 14, 1990, the court appointed a receiver to take control of Chamberlain’s assets and gave him the full rights of Chamberlain’s 100 percent stock ownership in the companies. That June, the court ordered Chamberlain to answer interrogatories, turn over stock certificates for the Douglas companies and appear for a debtor’s examination. He did none of it.

On Sept. 18, 1990, the court held him in civil contempt. The court found that he had disobeyed the restraining order and interfered with the receiver. It found that he had moved about $8.5 million in temporary cash investments and about $2.5 million in Douglas Oil “suspense funds” into his own accounts, and had kept the proceeds from the sale of an aircraft. It also found that he refused to give up a vessel named “Miss Boots” that was docked in the Bahamas. A second contempt finding followed in October 1990.

In early 1991 the court imposed sweeping sanctions. Chamberlain was barred from touching assets of his companies or the Douglas firms and from filing papers in the case, and was ordered to pay the receiver’s costs and attorney fees. The court also ordered asset freezes at financial institutions around the world. The 11th Circuit upheld the receivership in June 1991 and the contempt findings and sanctions that October, calling the sanctions coercive rather than punitive.

An unsettled legacy

None of it brought Chamberlain home. He spent the rest of his life beyond the reach of the court orders issued in his name, and he remained outside the country until his death.

His story is an odd footnote in Mobile’s business history. The Citronelle field was discovered in 1955 and helped establish south Alabama as oil country. It made fortunes and supported jobs across north Mobile County, and Chamberlain was for a time among its biggest players. Federal courts concluded that he had turned the 1970s energy crisis to his advantage by selling Citronelle crude through the Bahamas at embargo prices.

The case is still cited in energy and remedies law, both on when an “export” is really an export and on when an individual can be held personally responsible for the full debts of a scheme he directed. In Mobile, Chamberlain will be remembered as the “Black Bart” of the Citronelle field, the oilman who lost to the federal government in court and then spent the rest of his life abroad rather than pay.