The Search for the Phantom Will

Even as negotiations concerning the fate of Howard Hughes' vast empire intensified last week, new and horrifying details came to light about the reclusive billionaire's last hours. The source was Dr. Victor Manuel Montemayor Martinez, 47, a leading Acapulco physician who often treats ailing tourists.

At 5:45 a.m. on Monday, April 5, Montemayor was summoned to Acapulco's Princess Hotel. As he was escorted into the opulent Jasmine penthouse suite, he was taken aback. On an orthopedic bed in a deep coma lay Howard Hughes, his emaciated, naked body covered only with a sheet. His skin was spotted with bedsores. Blood oozed from a swelling on the side of his head that had been cut open in a fall several months earlier. His blood pressure was barely recordable, his breathing was shallow, and he showed signs of severe dehydration.

The Mexican doctor was outraged at the apparently poor care given Hughes. As he worked to save the patient, Hughes' retinue seemed stunned and helpless. One of his physicians, Dr. Norman Crane, was weeping.

Hughes had been bedridden since he broke his hip in a fall in 1973, his doctors explained. An operation in London to insert a pin in his femur failed, and Hughes would not submit to a second operation. As a result, he was in constant pain and developed an addiction to codeine. He refused to take other medication or eat properly. Hughes was a despotic, cranky patient who reduced his personal physicians to the status of mere valets. Three days before his death, he went into shock, probably due to a stroke. As his condition worsened, his aides became gravely worried and called Dr. Montemayor. "It is not easy to say whether they would have saved his life if they had acted immediately," he said later. But if Hughes had been given better medical care earlier, Montemayor believes, he would have lived longer.

Potential Challenge. Hughes may have been guilty of neglect--in the vital matter of leaving a will. One of his personal aides, who was questioned by police in Acapulco, said that Hughes had been supposed to sign an important document, possibly a will, several days before his death, but was too ill to do so. Noah Dietrich, Hughes' former chief lieutenant, said he had seen a will, but that was back in the 1950s. Investigators began a massive dragnet search for a will, combing through Hughes' old map cases, flight bags, books and safe-deposit boxes. They looked in one box in a Hollywood Bank of America branch where Dietrich believed the will had been placed. By week's end no one had produced Hughes' last testament.

The trio of insiders who run Summa Corp., the umbrella company that controls many of Hughes' properties, had expected to find a will that left all or at least most of his estate to the tax-free Howard Hughes Medical Institute. They also expected to be named trustees of the institute and thus continue running the empire. The three are Frank William Gay, Summa's executive vice president; Nadine Henley, Hughes' longtime administrative assistant and senior vice president; and Chester Davis, an abrasive Wall Street lawyer who is general counsel.

Last week the Summa trio sought an accommodation with Hughes' relatives, who in the absence of a will stand to inherit the entire estate (after taxes, it could run $1 billion or more). With the backing of the Summa officers, three of Hughes' closest relatives and a Nevada bank were appointed temporary administrators of his estate, estimated to total $2.3 billion. A Texas court named his aunt, Mrs. Frederick Lummis, and her son William Lummis, a Houston attorney; a California court picked Richard Gano, another cousin of Hughes. A potential challenge to this arrangement was being set up by public administrators in Los Angeles County and Clark County, Nevada (Las Vegas); they applied last week for court permission to take over the Hughes holdings in their areas and collect taxes and commissions.

At least for now, however, the Lummises and Gano have the power to vote Hughes' shares and thus keep the empire running. By maintaining a continuity of management in Summa, they will head off possible investigations by Nevada and federal regulatory agencies into the company's Nevada TV station and casinos and Hughes Airwest. Otherwise, the regulatory agencies may well have felt obliged to conduct immediate inquiries about the new chiefs.

Evidently, the Hughes relatives appreciated the importance of keeping the empire operating smoothly until there is a final settlement. Indeed, if ever an empire cried out for effective management, it is Hughes'. A patchwork business, it was haphazardly acquired, often when Hughes was in a rush to invest company earnings that he would otherwise have been forced to pay himself as highly taxable profits.

Summa is the biggest catchall; besides its airline and TV interests, it presides over the hotels and casinos in Nevada and the Bahamas, a helicopter manufacturer, 1,200 largely dormant silver and gold mines and huge tracts of undeveloped land in Nevada and California. If Hughes' heirs are forced to raise money to pay the federal inheritance tax, parts of Summa may have to be sold off.

The future is most uncertain for the empire's other big arm: the Hughes Medical Institute, which operates from unimposing quarters in Miami. Hughes set up the tax-free foundation in 1953 and said that he would ultimately will his fortune to it. As a start, he gave the institute his Hughes Aircraft Co. The company is estimated to have earned about $30 million last year on sales of $1.4 billion, mostly to the Pentagon and CIA for highly advanced satellites and guided weaponry, including target-seeking "smart" bombs.

Secret Project. Not much of the Hughes Aircraft profit has gone to the medical institute. From 1964 to 1973, Hughes Medical received $21.6 million from the company; in the same period it gave back $8.8 million to Hughes Aircraft as repayment of a loan and spent only $8.8 million for medical research. Until now, the IRS has not compelled it to conform to the 1969 Tax Reform Act, which requires private foundations to disburse a fixed percentage of their assets. In the wake of Hughes' death, the Government may take a much closer look at the medical institute.

Meanwhile, Hollywood will also take a closer look at the departed billionaire. Last week Warner Bros, announced that it would make a movie about Hughes, starring Warren Beatty. The project has been secretly under development for about a year under--what could be a better epitaph?--the code name "Operation Phantom."

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