They considered themselves tough-minded realists and regarded doubters as
fuzzy-minded whiners. They silenced those who questioned their premises, even
though the skeptics included many of the government’s own analysts. They were
supremely confident – and yet with shocking speed everything they had said was
proved awesomely wrong.
No, I’m not talking about the war; I’m talking about the energy task force that
Dick Cheney led back in 2001. Yet there are some disturbing parallels. Right now,
pundits are wondering how Cheney – who confidently predicted that our soldiers
would be “greeted as liberators” – could have been so mistaken. But a devastating
new report on the California energy crisis reminds us that Cheney has been equally
confident, and equally wrong, about other issues.
In spring 2001, the lights were going out all over California. There were blackouts
and brownouts, and the price of electricity was soaring. The Cheney task force
was convened in the midst of that crisis. It concluded, in brief, that the energy
crisis was a long-term problem caused by meddling bureaucrats and pesky
environmentalists, who weren’t letting big companies do what needed to be done.
The solution? Scrap environmental rules, and give the energy industry multibillion-dollar subsidies.
Along the way, Cheney sneeringly dismissed conservation as a mere “sign of
personal virtue” and scorned California officials who called for price controls,
claiming that the crisis was being exacerbated by market manipulation. To be fair,
Cheney’s mocking attitude on that last point was shared by almost everyone in
politics and the media – and yes, I am patting myself on the back for getting it
right. For we now know that everything Cheney said was wrong.
In fact, the California energy crisis had nothing to do with environmental
restrictions, and a lot to do with market manipulation. In 2001 the evidence for
manipulation was basically circumstantial. But now we have a new report from the
Federal Energy Regulatory Commission, which until now has discounted claims of
No more: The new report concludes that market manipulation was pervasive, and
offers a mountain of direct evidence, including phone conversations, e-mail and
There’s no longer any doubt: California’s power shortages were largely artificial,
created by energy companies to drive up prices and profits.
Oh, and what ended the crisis? Key factors included energy conservation and price
Meanwhile, what happened to that long-run shortage of capacity, which required
scrapping environmental rules and providing lots of corporate welfare? Within
months after the Cheney report’s release, stock analysts were downgrading energy
companies because of a looming long-term capacity glut.
In short, Cheney and his tough-minded realists were blowing smoke. Their report
described a fantasy world that bore no relation to reality. How did they go so
One answer is that Cheney made sure that his task force included only like-minded
men: As far as we can tell, he didn’t consult with anyone except energy executives.
So the task force was subject to what military types call “incestuous
amplification,” defined by Jane’s Defense Weekly as “a condition in warfare where
one only listens to those who are already in lock-step agreement, reinforcing set
beliefs and creating a situation ripe for miscalculation.”
Another answer is that Cheney basically drew his advice about how to end the
energy crisis from the very companies creating the crisis, for fun and profit. But
was he in on the joke?
We may never know what really went on in the energy task force since the Bush
administration has gone to extraordinary lengths to keep us from finding out. At
first the nonpartisan General Accounting Office, which is supposed to act as an
internal watchdog, seemed determined to pursue the matter. But after the
midterm election, according to the newsletter The Hill, congressional Republicans
approached the agency’s head and threatened to slash his budget unless he backed
And therein lies the broader moral. In the last two years Cheney and other top
officials have gotten it wrong again and again – on energy, on the economy, on the
budget. But political muscle has insulated them from any adverse consequences.
So they, and the country, don’t learn from their mistakes – and the mistakes keep
From The Great Divide, by John Sperling, others:
Energy: The Economics of Corporate Welfare
The Political Power of Extraction Industries
In the decade 1991-2001, Metro America paid $1.6 trillion more in taxes that
Retro America, and Retro America received $0.8 trillion more in federal payments
than it paid in federal taxes. …
Much of this $0.8 trillion goes to Retro America in the form of the lion’s share of
subsidiesand tax breaksto the energy industry – oil, gas, and coal.
The primary reason these noneconomic subsidies continue to flow decade after
decade is the political power of the extraction industries, a power that has been
wielded in both Republican and Democratic administrations but has been greatly
magnified under the Bush administration. During the Clinton administration, the
extraction industries had limited influence: We have been able to identify only two
cabinet, subcabinet, and White House staff members with extraction industry
In contrast, we have identified 53 members of the Bush administration with close
ties to the extraction industries….
Clinton’s two extraction industry appointees were Thomas F. (Mack) McLarty III –
a childhood friend whom the president appointed as his Chief of staff – and
Joshua Gotbaum, whom he appointed to the subcabinet post of Executive
Associate Director and Controller of the Office of Management and Budget.
Prior to joining the White House, McLarty was the chairman and chief executive
officer of Arkla Inc., a natural gas company.
Mr. Gotbaum was a partner in Lazard Freres and Co., specializing in energy-related products….
President Bush and the Bush family have strong ties to the oil industry going back
to John D. Rockefeller and the early days of the industry. George W. Bush’s
great-grandfather, Samuel Bush, was an associate of John D. Rockefeller and ran
Buckeye Steel Castings in the early 20th century. The daughter of George Herbert
Walker, the financier and associate of the Harrimans, married Samuel’s son,
Prescott Bush, investment banker, U.S. senator, and father of George Herbert
Walker Bush (Bush senior).
President Bush Junior and his closest advisers have heavy ties to oil. Bush’s own oil
venture was unsuccessful, but because of his family ties, he sat on the board of
directors of Harken Oil, which saved him from bankruptcyby buying his company.
Vice President Cheney served as a congressman from energy-rich Wyoming and was
Chief Executive Officer of Halliburton, an oil service company.
National Security Advisor Condoleezza Rice was a member of the Chevron Corp. A
Chevron oil tanker was named “Condolezza Rice,” but due to adverse publicy was
renamed in April 2001 the “Altair Voyager.”
These crony capitalistsgain power and often personal wealth by switching
between high-ranking positions to business and government and using their
influence in one to promote projects and points of view sympathetic to the other.
This kind of behind the scenes manipulation can undermine the positive effects of
entrepreneurial capitalist development and is anathema to a free enterprise
Of course, crony capitalismis always a factor in government and big business, but
in the Bush administration it is rampant and harks back to the robber barons of
the president’s great grandfather’s generation….
Outgoing consumer advocate Tim Hay, who negotiated a $48 million settlement for
Nevada in a natural gas conspiracy case against El Paso Corp., filed a class-action
lawsuit Thursday against Reliant Energy over an alleged anti-competitive gas
trading scheme with Enron Corp.
The lawsuit accuses Houston-based Reliant of conspiring with and unidentified
Enron official in a trading scheme to drive natural gas prices first up then down at
Topock, a key trading point near Needles, Calif. It doesn’t see a specified amount
of damages but Hay expects it will be in the billion-dollar range….
The lawsuit complains that Reliant and Enron employees used a technique called
“churning” to increase the volume of gas traded. Reliant bought from and sold to
Enron large quantities of gas, which made it appear demand was increasing. The
gas was sold through the Enron Online trading platform between November 2000
and March 2001, according to the lawsuit….
CHARTING A MILITARY OUTCOME IN IRAQ IS DICEY, and some say a bad
turn of events could mean $100-a-barrel oil. But after any brief disruption, the
oil-market effects of a neutralized or pro-Western successor to Saddam Hussein
are unmistakably positive. Iraq sits on 120 billion barrels of proven oil reserves,
second only to Saudi Arabia’s 260 billion.
“Since 1961, only in the years between 1973 and 1980 was there any exploration of
Iraq’s oil reserves,” says Fadhil Chalabi, who was a ranking official at the Iraqi
Ministry of Oil from 1968 to the mid-1970s….
Chalabi now directs the Centre for Global Energy Studies, a London think tank
founded by former Saudi oil minister Sheikh Ahmed Zaki Yanani. He has ominous
news for the sheikh’s countrymen: Iraq’s real recoverable oil reserves could be
double today’s estimate. “Ultimately they could exceed those of Saudi Arabia,”
Wow. Therein lies a partial, if hardly party-line, answer to the doubters who say
that an attack on Saddam would plunge Iraq into economic chaos. After the chaos,
it is hoped, would come some oilfield development that would leave both Iraqis and
the world’s energy buyers better off….
A lot of Iraq’s oil lies in huge virgin fields, discovered in the 1970s before Saddam
turned the place into a military bastion, but not touched since. The Majnoun field
close to the Iranian border, for instance, contains recoverable reserves of 11
billion barrels. That’s equivalent to a third of the proven reserves of the entire
U.S. And Majnoun is only one of several monster Iraqi oilfields still waiting for the
first pump to get cranking.
Not only is the oil in these Iraqi fields low in sulfur, it is also close to the surface.
No need to inject water or gas or chemicals in order to upgrade recovery. In
short, it’s cheap to produce….
Another reason Iraqi oil production could take off quickly is that pipelines and
terminals are already in place, though underutilized. Same with Iraq’s many
qualified engineers and technicians. . . . Moreover, through pipelines that terminate
in Turkey, Syria and (potentially) Israel, Iraq has the ability to funnel most of its
oil directly to the eastern Mediterranean, bypassing the Persian Gulf entirely.
Who would be likely to get juicy deals in postwar Iraq?
None of the big American or British oil companies are there. But if a U.S.-led
force succeeds in ousting Saddam, it’s a good bet that these companies will come in
as soon as the fighting has died down….
War is a racket…. War is largely a matter of money. Bankers lend money to
foreign countries and when they cannot pay, the President sends Marines to
– Marine Maj. Gen. Smedley D. Butler (1881-1940)
~ ~ ~
THE PERSIAN GULF
The Allied victory in the Persian Gulf war of 1991 was loudly trumpeted by the
American mass media, but the actions leading to this conflict were sparsely
reported throughout the coverage. These machinations involved people in secret
societies and indicated a very different rationale for the war than the one
presented to the public.
No one can argue that the United States military, with some assistance from
British, French, and Arab forces, did not perform magnificently during this brief
conflict. It took only between January 17 and February 28, 1991, for the coalition
of Operation Desert Storm to soundly defeat the Iraqi forces of Saddam Hussein,
then representing the fifth largest army in the world. This astounding military
success was due primarily to the Allied forces’ superiority in both weaponry and
training as opposed to Saddam’s conscripts who, through veterans of combat
against Iran, had limited training and low morale.
This disparity created a lopsided war which resulted in more than 300,000 Iraqi
casualties, both military and civilian, and 65,000 prisoners, compared to the
extraordinary low Allied losses of 234 killed, 470 wounded, and 57 missing.
Primary leader of the war was U.S. President George Bush, a former CFR
member, Trilateralist, and Skull and Bonesman.
As with most Middle East conflicts, the primary issue was oil. Both Bush and thenSecretary of State James Baker were deeply involved in the oil business. Any
Bush policy which increased the price of oil meant more profit to his companies,
those of his oilmen supporters and, of course, to the Rockefeller-dominated oil
An added bonus was that any conflict which divided the Arab world would only
strengthen the power of the U.S., Britian, and Israel in the region. A coalition of
countries fighting for the United Nations could only advance the globalists’ plan
for a one-world military force.
This “battle of the New World Order was some kind of manufactured crisis with a
hidden agenda,” wrote conspiracy researchers Jonathan Vankin and John Whalen
after study of the events leading to this conflict.
Bush and Saddam Hussein had had a close relationship for many years. In his role
as CIA director, and later as vice president, George Bush had supported Saddam
through his eight-year war against Iran following the ouster of the Shah in 1979.
By 1990 Saddam’s Iraq was a primary threat to the balance of power between
Israel and its Arab neighbors, but Saddam was strapped for cash due to the Iraq-Iran War and couldn’t pay his bills. Under pressure from the international bankers
for slow repayment of loans and from the Organization of Petroleum Producing
Countries (OPEC), which refused to allow him to raise oil prices, Saddam turned his
eyes to Kuwait as a source of income. At the time it was the third largest
producer of iol next to Iraq and Saudi Arabia.
Kuwait had been carved out of Iraq by Britain, who in 1899 took control of Kuwait’s
foreign policy under an agreement with the dictatorial Sabah family. The Sabahs
had produced a series of ruling sheikhs since assuming control of the area’s nomad
tribes in 1756. Kuwait became a British Protectorate in 1914 when German
interest suddenly gave the area strategic importance. British dominance was
solidified by sending British troops to the area in 1961 after Iraq sought to
The Pentagon had known that Iraqi troops were massing along the Kuwait border
since mid-July 1990. On July 25 Saddam sought advice from the United States on
his intentions to reclaim Kuwait. He met with U.S. ambassador April Glaspie, who
told him, “I have direct instructions from President Bush to improve our
relations with Iraq. We have considerably sympathy for your quest for higher oil
prices, the immediate cause of your confrontation with Kuwait….
“I have received an instruction to ask you, in the spirit of friendship not
confrontation, regarding your intentions: Why are your troops massed so very
close to Kuwait’s borders?”
According to transcripts released long after the war, Hussein explained that, while
he was ready to negotiate his border dispute with Kuwait, his design was to “keep
the whole of Iraq in the shape we wish it to be.” This shape, of course, included
Kuwait, which Saddam considered still a part of Iraq.
“What is the United States’ opinion on this?” he asked.
“We have no opinion on your Arab-Arab conflicts, like your dispute with Kuwait,”
replied Glaspie. “Secretary Baker has directed me to emphasize the instruction,
first given to Iraq in the 1960s, that the Kuwaiti issue is not associated with
“Shortly after this, April Glaspie left Kuwait to take her summer vacation, another
signal of elaborate American disinterest in the Kuwait-Iraq crisis,” noted authors
Tarpley and Chaitkin in George Bush: The Unauthorized Biography.
On July 31, Bush met with GOP congressional leaders but said nothing about the
The crisis escalated on August 2, when Iraqi troops moved into Kuwait. Bush froze
all Iraqi assets in the United States, adding to Saddam’s money woes, which had
worsened in 1990 after international bankers refused him further loans. Glaspie
was prohibited from speaking out by the State Department, so the American public
could not learn of Bush’s duplicity.
In later testimony before the Senate Foreign Relations Committee, Glaspie pointed
out that the July 25 conference was her first and only meeting with Saddam, who
had not met with any foreign ambassador since 1984, the midpoint of his war with
But if Saddam had not met with U.S. diplomats, the same could not be said of
American businessmen. Economist Paul Adler noted, “It was known that David
Rockefeller met with the Iraqi leader on at least three known occasions after the
Chase Manhattan consortium became the lead banker in a number of major Iraqi
It was also reported that Alan Stoga, a vice president of (Henry) Kissinger
Associates met with Iraqi leaders during a two-year period preceding the Gulf
“Saddam began to realize that he could not get what he wanted from the striped-pants set. He began doing business with the people who mattered to him – foreign
businessmen, defense contractors, technologists and scientists, occasionally even
visiting newsmen,” reported the Washington newspaper, The Spotlight.
Following the money trail of such non-diplomatic contacts which led to the Gulf
War, Congressman Henry Gonzalez, chairman of the House Committee on Banking,
Finance and Urban Affairs, discovered that almost $5 billion in loans had been
passed to Saddam Hussein in the 1980s through the Atlanta, Georgia, branch of
Italy’s government-owned bank, Banca Nazional del Lavoro (BNL). The branch
manager, Christopher Drogoul, was finally brought into federal court, where he
pleaded guilty to approving this huge cash transfer without the approval of BNL’s
head office in Italy. However, the whole investigation was put on hold during the
Most observers disblieved that Drogoul could have conducted such a massive
transaction without the knowledge of his superiors. Bobby Lee Cook, one of
Drogoul’s several defense attorneys, argued that his client had been made the
patsy in “a scheme orchestrated at the highest levels of the U.S. Government.”
In court, BNL official Franz von Wedel testified that his boss Drogoul had acted
on the advice of the bank’s consultants, Kissinger Associates.
In both 1989 and 1990 the Bush Justice Department had quashed indictments
against the BNL by the Atlanta Attorney General’s office following an FBI raid on
the bank on August 4, 1989. Action against the bank managers was held up for
more than a year. Indictments were finally handed down one day after Bush
declared a cease-fire in the Gulf War.
This scandal – dubbed “Iraqgate” – prompted Gonzalez to prepare a House
resolution called for the impeachment of Bush Attorney General William Barr for
“obstruction of justice in the BNL scandal.” House Judiciary Committee Chairman
Jack Brooks called on Barr to appoint a special prosecutor in the case.
In a classic case of who-will-watch-the-watchers?, Barr said he could find no
evidence of wrongdoing on his part and refused to appoint a special prosecutor. It
was one of the only times that an attorney general had failed to appoint a special
prosecutor when asked to do so by Congress.
WHO PAYS THE TAB?
The clincher of this sordid story of financial scheming and official malfeasance
was that not only had most of the $5 billion been used by Saddam to buy weaponry
to be used against American servicemen, but the U.S. taxpayers picked up the
Gonzalez said $500 million of the loans to Saddam came through the government-backed Commodity Credit Corporation (CCC) and had been intended to purchase
grain from U.S. farmers. However, grain shipped though the port of Houston had
gone to then-Soviet bloc nations for weapons, while the remainder of the grain
purchase had freed Saddam’s limited cash reserves to buy more military materials.
The Bush administration had pledged taxpayer guarantees should Saddam default
on the loans, which he did after sending troops to Kuwait. According to at least
one public source, more than $360 million in American tax money was paid to the
Gulf International Bank in Bahrain which was owned by seven Gulf nations including
Iraq. This amount was only the first of an estimated $1 billion to be paid to ten
banks by the CCC to cover the $5 billion of Saddam’s defaulted loans.
“The $1 billion commitment, in the form of loan guarantees for the purchase of
U.S. farm commodities, enabled Saddam to buy needed food on credit and to
spend his scarce hard currency on the arms buildup that brought war to the
Persian Gulf,” wrote author Russell S. Bowen.
Even after the Iraqi invasion began on August 2, Bush publicly appeared strangely
noncommittal. Asked by reporters if he intended any intervention in the Gulf
crisis, Bush said, “I’m not contemplating such action….”
His attitude apparently changed drastically that same day after meeting with
British prime minister Margaret Thatcher, a regular attendee of Bilderberg
meetings who had been implicated with Bush in both the Iran-Contra and October
After meeting with Thatcher, Bush began to describe Saddam as a “new Hitler”
and said “the status quo is unacceptable and further expansion [by Iraq] would be
even more unacceptable.”
Despite assurance from Saddam that Kuwait was his only objective and with no
concrete evidence to the contrary, Bush nevertheless personally telephoned the
leaders of Saudi Arabia and warned that they would be the next target of the
“new Hitler.” Panicked, the Saudis handed over as much as $4 billion to Bush and
other world leaders as secret payoffs to protect their kingdom, according to
Sabah family member Sheik Fahd Mohammed al-Sabah, chairman of the Kuwait
Long after the Persian Gulf War, when audits found this money had been diverted
into a London slush fund, anti-Sabah elements in Saudi Arabis criticized the
payoff. They were told by al-Sabah, “That money was used to buy Kuwait’s
liberation. It paid for political support in the West and among Arab leaders –
support for Desert Storm, the international force we urgently needed.”
Whether this money played any role or not, Bush soon drew a “line in the sand” to
block further Iraqi intrusion. It is interesting to note that this line was located
between the Iraqi forces and oil interests owned by his son, soon-to-be Texas
governor George W. Bush.
Bush, the president’s eldest son, was a $50,000-a-year “consultant” to and a board
member of Harken Energy Corp. of Grand Prairie, Texas, near the home of the
Texas Rangers baseball team of which the younger Bush was a managing general
In January 1991, just days before Desert Storm was launched, Harken shocked
the business world by announcing an oil-production agreement with the small island
nation of Bahrain, a former British protectorate and a haven for international
bankers just off the coast of Saudi Arabia in the Persian Gulf. Bahrain was listed
among the top forty countries of the world with the highest per capita Gross
Domestic Product in 1996.
Veteran oilmen wondered aloud how unknown Harken, with no previous drilling
experience, obtained such a potentially lucrative deal. Furthermore, it was
reported that “Harken’s investments in the area will be protected by a 1990
agreement Bahrain signed with the U.S. allowing American and ‘multi-national’
forces to set up permanent bases in that country.”
The younger Bush, in October 1990, told Houston Post reporter Peter Brewton
that accusations that his father ordered troops to the area to protect Harken
drilling rights were “a little far-fetched.” He further claimed he sold his Harken
stock before the Iraqi invasion, but Brewton cold find no record of the sale in the
files of the Securities and Exchange Commission (SEC).
Records of Bush’s Harken stock sale finally turned up in March 1991, eight months
after the July 10, 1990, SEC deadline for filing such disclosures. One week after
Saddam’s troops entered Kuwait, Harken stock had dropped to $3.03 a share. The
tardy SEC records revealed that by some good fortune, Bush had sold 66 percent
of his Harken stock on June 22, 1990 – just weeks prior to Iraq’s invasion – for the
top-dollar price of $4.00 a share, netting him $848,560.
Despite locating productive wells in South America, the drop in oil prices in early
1999 caused Harken stock to remain about $4.00 per share.
Stock purchases, oil and grain deals, arms sales, loans and guarantees, the
weakening of the Arabs to benefit Israel, the movement toward a global army and
government created a mind-numbing entanglement.
“It is doubtful whether the ‘real’ reasons why the United States went to war in the
Persian Gulf will ever emerge,” wrote Vankin and Whaley.
“Unlike in Vietnam, where the ambiguous outcome elicited natural suspicions, in the
Gulf the decisiveness of victory has buried the reality deeper than any Iraqi or
American soldier who went to a sandy grave.”
The duplicity didn’t end with the fighting. Throughout the Clinton administration
there have been periodic air forays into Iraq, ostensibly to punish Saddam for
preventing UN inspection of his development centers for biological and nuclear
weaponry. However, this time there was a big difference – probing questions were
raised by both a suspicious public and a few less timid members of the news media.
Following missile and bombing strikes in late 1998, a letter writer to a national
news magazine asked,“By using weapons of mass destruction to deter Iraq from
manufacturing weapons of mass destruction, would America not be doing the very
thing we’re warning Iraq not to do?”
Others raised the question of why we attacked Iraq for refusing UN inspection of
its sensitive military installations when President Clintonalso had refused to allow
such inspections in the United States– a refusal greeted with general approval by
Scott Ritter, a member of the United Nations Special Commission (UNSCOM)
created to locate and eliminate Saddam Hussein’s secret weapons caches, resigned
in August of 1998 and accused the U.S. government of using the commission to
justify an attack on Iraq.
Ritter said that before his resignation he disbelieved Baghdad’s minister of
defense when he told him the UNSCOM team was being used by to “provoke a
crisis,” but he slowly came to agree with the charge.
Ritter’s superiors scoffed at the allegation, claiming Ritter’s knowledge of the
situation was “limited.”
However, in early 1999 it was reported that Washington had used UNSCOM to
plant electronic bugs in the Ministry of Defense (Iraq’s Pentagon) and other U.S.
officials confirmed much of Ritter’s accusations.
“The relationship between the United States and the inspection commission…has
long been a subject of debate,” wrote U.S. News reporter Bruce B. Auster.
“The issue is sensitive because UNSCOM is an arm of the UN Security Council, not
an agency of the United States, although it does rely on the United States for
intelligence and personnel.”
On December 15, 1998, after stockpiling cruise missiles in the Persian Gulf during
the fall, the U.S. launched a much-delayed air strike against Baghdad.
But with Christmas nearing, most Americans couldn’t get too worked up over
civilian casualties halfway around the world.
And any doubts about U.S. involvement in the Persian Gulf – except among those
unfortunates have to deal with Gulf War Syndromecaused by lethal combination
of oil fires, biological agents, and radioactive uranium-tipped artillery and tank
shells– had been thrown away, along with the yellow ribbons which had proudly
displayed the total support of the uninformed….
I spent 33 years in the Marines. Most of my time being a high-class muscle man
for Big Business, for Wall Street and the bankers. In short, I was a racketeer for
capitalism. I helped purify Nicaragua for the international banking house of Brown
Brothers in 1909-1912. I helped make Mexico and especially Tampico safe for
American oil interests in 1914. I brought light to the Dominican Republic for
American sugar interests in 1916. I helped make Haiti and Cuba a decent place for
the National City Bank boys to collect revenue in. I helped in the rape of half a
dozen Central American republics for the benefit of Wall Street.”
— U.S. Marine Corps Maj. Gen. Smedley D. Butler, in Common Sense, Nov, 1935
November 15, 2001
U.S. Policy Towards Taliban
Influenced by Oil – Say Authors
By Julio Godoy, Inter Press Service
PARIS, Nov 15 (IPS) – Under the influence of U.S. oil companies, the government
of George W. Bush initially blocked U.S. secret service investigations on terrorism,
while it bargained with the Taliban the delivery of Osama bin Laden in exchange
for political recognition and economic aid, two French intelligence analysts claim.
In the book “Bin Laden, la verite interdite” (“Bin Laden, the forbidden truth”), that
appeared in Paris on Wednesday, the authors, Jean-Charles Brisard and Guillaume
Dasquie, reveal that the Federal Bureau of Investigation’s deputy director John
O’Neill resigned in July in protest over the obstruction.
Brisard claims O’Neill told them that“the main obstacles to investigate Islamic
terrorism were U.S. oil corporate interests and the role played by Saudi Arabia in
The two claim the U.S. government’s main objective in Afghanistan was to
consolidate the position of the Taliban regime to obtain access to the oil and gas
reserves in Central Asia.
They affirm that until August, the U.S. government saw the Taliban regime “as a
source of stability in Central Asia that would enable the construction of an oil
pipeline across Central Asia”, from the rich oilfields in Turkmenistan, Uzbekistan,
and Kazakhstan, through Afghanistan and Pakistan, to the Indian Ocean.
Until now, says the book, “the oil and gas reserves of Central Asia have been
controlled by Russia. The Bush government wanted to change all that“.
But, confronted with Taliban’s refusal to accept U.S. conditions, “this rationale of
energy security changed into a military one”, the authors claim.
“At one moment during the negotiations, the U.S. representatives told the Taliban,
‘either you accept our offer of a carpet of gold, or we bury you under a carpet of
bombs’,” Brisard said in an interview in Paris.
According to the book, the government of Bush began to negotiate with the
Taliban immediately after coming into power in February. U.S. and Taliban
diplomatic representatives met several times in Washington, Berlin and Islamabad.
To polish their image in the United States, the Taliban even employed a U.S.
expert on public relations, Laila Helms.
The authors claim that Helms is also an expert in the works of U.S. secret
services, for her uncle, Richard Helms, is a former director of the Central
Intelligence Agency (CIA).
The last meeting between U.S. and Taliban representatives took place in August,
five weeks before the attacks on New York and Washington, the analysts maintain.
On that occasion, Christina Rocca, in charge of Central Asian affairs for the U.S.
government, met the Taliban ambassador to Pakistan in Islamabad.
Brisard and Dasquie have long experience in intelligence analysis. Brisard was until
the late 1990s director of economic analysis and strategy for Vivendi, a French
company. He also worked for French secret services, and wrote for them in 1997 a
report on the now famous Al Qaeda network, headed by bin Laden.
Dasquie is an investigative journalist and publisher of Intelligence Online, a
respected newsletter on diplomacy, economic analysis and strategy, available
through the Internet.
Brisard and Dasquie draw a portrait of closest aides to President Bush, linking
them to oil business.
Bush’s family has a strong oil background. So are some of his top aides. From the
U.S. Vice President Dick Cheney, through the director of the National Security
Council Condoleeza Rice, to the Ministers of Commerce and Energy, Donald Evans
and Stanley Abraham, all have for long worked for U.S. oil companies.
Cheney was until the end of last year president ofHalliburton, a company that
provides services for oil industry; Rice was between 1991 and 2000 manager for
Chevron; Evans and Abraham worked for Tom Brown, another oil giant….
The book confirms earlier reports that the U.S. government worked closely with
the United Nations during the negotiations with the Taliban….
(In accordance with Title 17 U.S.C. Section 107, this material is distributed
without profit to those who have expressed a prior interest in receiving the
included information for research and educational purposes.)
The most recent of wars carried out under the cloak of diplomacy by deception,
the Gulf War, differs from others in that the Committee of 300, the Council on
Foreign Relations, Illuminati and Bilderbergers did not adequately cover their
tracks along the way to war.
The Gulf War therefore is one of the easiest wars to trace back to Chatham
House and Harold Pratt House, and, fortunately for us, it is one of the easiest to
prove the diplomacy by deception thesis.
The Gulf War must be viewed as a single component of the Committee of 300’s
overall strategy for the Middle East oil-producing Islamic states. Only a brief
historical overview can be given here. It is essential to know the truth and to be
set free from the propaganda of Madison Avenue opinion-makers, also known as
British imperialists, aided by their American cousins, began to implement their
plans to seize control of all Middle East oil in or around the mid-1980’s. The illegal
Gulf War was an integral provision of that plan.
I say illegal, because … only the Congress can declare war, as laid down in Article I,
Section 8, clauses 1, 11, 12, 13, 14, 15 and 18 of the U.S. Constitution. Henry Clay, a
recognized authority on the Constitution, said this on a number of occasions.
No elected official can override the provisions of the Constitution, and both
former Secretary of State James Baker III and President George Bush, ought
to have been impeached for violation the Constitution. A British intelligence
source told me that when Baker met Queen Elizabeth II at Buckingham Palace, he
actually bragged about how he got around the Constitution, and then, in the
presence of the queen, chastised Edward Heath who had opposed the war….
Baker also boasted about how his threats against the Iraqi nation were carried
out, and Queen Elizabeth II nodded her approval. Obviously Baker and President
Bush, who was also present at the gathering, placed their fealty to the One World
Government above that of the oath of office they took to uphold the Constitution
of the United States.
The land of Arabia existed for thousands of years … The land was linked to events
in Turkey, Persia (now Iran), and Iraq through the Wahabi and the Abdul Aziz
In the 15th century, the British, under the direction of Black Guelph Venetian
robber-bankers saw the possibilities of entrenching themselves in Arabia, where
they were opposed by the Koreish tribe, the tribe of the prophet Muhammad, the
posthumous son of the Hashemite, Abdullah, out of which came the Fatima and
The Gulf War was only an extension of the Committee of 300’s attempts to
destroy Muhammad and the Hashemite people in Iraq. The rulers of Saudi Arabia
are hated and despised by all true followers of Islam, more so since they allowed
“infidels” (U.S. troops) to be stationed in the land of the prophet Muhammad….
Strict observation of the fundamental principles of the Muslim religion make one a
fundamentalist, which the Wahabi and Abdul Aziz families (the Saudi Royal family),
are not. The Saudi Royal Family has slowly but surely drifted away from
fundamentalism, which has not endeared them to Islamic fundamentalist countries
like Iraq and Iran, who now blame them for making the Gulf War possible in the
In 1915, the British invaded Iraq and occupied Baghdad in an act President George
Bush would have called “naked aggression,” the term he used to describe Iraq’s
move against Kuwait to reclaim its land stolen by Britain. The British government
set up a self-proclaimed “mandate” … and on August 23, 1921, two months after his
arrival in Baghdad, self-styled high commissioner (Sir Percy) Cox, named former
King Faisal of Syria as head of a puppet regime in Basra. Britain now had one
puppet in northern Iraq and another in southern Iraq.
In order to strengthen their position … an elaborate and bloody plot was hatched.
MI6 British intelligence agents were sent in to stir up a revolt among the Kurds in
Encouraged to revolt by their leader, Sheik Mahmud, they staged a great
insurrection on June 18, 1922. British intelligence agents of MI6 had for months
told Sheik Mahmud that his chances of securing an autonomous state for the Kurds
would never be better.
Why did MI6 ostensibly act against the best interests of the British government?
The answer is found in diplomacy by deception.
Yet, even as the Kurds were being told that their age-old quest for an autonomous
state was about to become a reality, Cox was telling Iraqi leaders in Baghdad that
the Kurds were about to revolt. It was, said Cox, only one of many reasons why the
Iraqis needed a continued British presence on the country. After two years of
fighting, the Kurds were defeated and their leaders executed.
In 1923, however, Britain was forced by Italy, France and Russia to recognize a
protocol that granted independence to Iraq once Iraq joined the League of
Nations, or, in any case, not later than 1926. This angered the Royal Dutch Shell
Co. and British Petroleum, who both called for renewed action, afraid they would
lose their oil concessions which were to expire in 1996.
Another severe blow to British imperialists and their oil companies was the League
of Nations award of the oil-rich Mosul to Iraq.
MI6 arranged for another Kurdish revolt to take place February through April of
1925. False promises were made to the Iraq government, with accounts of what
would happen if the British withdrew protection from Iraq. The Kurds were misled
into insurrection. The object was to show the League of Nations that its award of
Mosul to Iraq was a mistake, that it was bad for the world to have an “unstable”
government in charge of a major oil reserve. . . . This time, however, the plot didn’t
work; the League remained steadfast in its decision on Mosul. But the rebellion
again ended in defeat for the Kurds and the execution of their leaders.
The Kurds never realized that their enemy was not Iraq, but British and American
It was Winston Churchill, not the Iraqis, who in 1929 ordered the Royal Air Force
to bomb Kurdish villages, because the Kurds objected to British oil interests . . .
April, May and June of 1932 saw the Kurds in yet another MI6-inspired and
directed insurrection, again aimed at persuading the League to alter its decision
over Mosul oil, but the attempt was not successful, and on Oct. 3, 1932, Iraq
became an independent nation with full control over Mosul. The British oil
companies hung on for another 12 years, until finally, in 1948 they were forced to
And even after leaving Iraq, the British did not withdraw their presence from
Kuwait on the spurious grounds that it was not part of Iraq, but a separate
country. After the murder of President Kassem, the Iraqi government feared
another uprising by the Kurds, who were still under the control of British
The real reason for the 1923 Lausanne Conference was the discovery of the Mosul
oilfields in northern Iraq. Turkey suddenly decided it had a claim to the vast
oilfield that lay beneath the land occupied by the Kurds. By now America was also
interested, with John D. Rockefeller ordering President Warren Harding to send
Iraq lost its rights under the old Turkish Petroleum Company agreement, and the
status of Kuwait remained unchanged. The question of Mosul oil was left
deliberately vague at the insistence of the British delegate. These questions
would be settled “by future negotiations” the British delegate stated.
The blood of American servicemen will yet be spilled to secure Mosul oil for British
and American oil companies, just as it was spilled over the oil in Kuwait.
On June 25, 1961, Iraqi Premier Hassan Abdul Kassem fiercely attacked Britain
over the Kuwait issue, pointing out that the promised negotiations agreed upon at
the Lausanne Conference had not taken place. Kassem declared that the territory
called Kuwait had been an integral part of Iraq and was so recognized for more
than 400 years by the Ottoman empire. Instead, the British granted Kuwait
Had Kassem succeeded in getting Kuwait back, the British rulers would have lost
billions of dollars in oil revenues. But when Kassem vanished after Kuwait got its
independence the movement to challenge Britain lost its momentum. By granting
independence to Kuwait in 1961, and ignoring the fact that the land was not theirs
to give, Britain was able to fend off the just claims of Iraq….
For the next 30 years, Kuwait continued as a vassal state of Great Britain, with
the oil companies pulling billions of dollars into British banks while Iraq got nothing.
British banks flourished in Kuwait . . . This continued until 1965, in addition to the
cruelty of the Al Sabaths was the fact that there was no “one man one vote”. In
fact there was no vote at all for the people. This was not the concern of the
British and United States government.
The British government made this deal with the Al Sabah family, who would
henceforth remain the rulers of Kuwait (as that portion of Iraqi territory came to
be known), under the full protection of the British government.
Thus was Kuwait stolen from Iraq….
Britain’s seizure of the Iraqi land, calling it Kuwait and granting it independence,
must rank as one of the most audacious acts of piracy in modern times,and
directly contributed to the Gulf War.
I have gone to some lengths to explain the background of events that led to the
Gulf War in an attempt to show just how unjustly the United States acted toward
Iraq, and the power of theCommittee of 300….
June 20, 2002
Cheney Sees ‘Gathering Danger’ in Iraq
By Reuters | New York Times
DETROIT (Reuters) – Iraqi President Saddam Hussein represents a “gathering
danger” to the United States, Vice President Dick Cheney said on Thursday,while
warning that Washington will act preemptively against threats of terrorism.
“We are greatly concerned about any possible linkup between terrorists and
regimes that have or seek weapons of mass destruction,” said Cheney. “In the
case of Saddam Hussein, we’ve got a dictator who is clearly pursuing and already
possesses some of these weapons,” he said.
“A regime that hates America and everything we stand for must never be
permitted to threaten America with weapons of mass destruction,” the vice
president added, referring to Saddam and the Iraqi forces he fought as defense
minister under President Bush’s father during the Gulf War in 1991.
Cheney, who spoke at a political fund-raiser here, stopped short of saying there
were any established ties between Baghdad and the al Qaeda network, or the Sept.
11 attacks that took about 3,000 U.S. lives.
But he said the possibility of such links was too great to ignore, especially in light
of Saddam’s defiance of U.N. weapons inspection programs and international
“This gathering danger requires the most urgent, deliberate and decisive
response,” he said.
“It is very clear that our enemies are determined to do further significant damage
to the American people,” Cheney said, citing recent intelligence reports.
“Wars are not won on the defensive,” he added. “We must take the battle to the
enemy anywhere necessary, to preempt greater stress to our country,” he said….
< < < FLASHBACK <<<
November 13, 2000
Cheney Made Millions Off
Oil Deals with Hussein
by Martin A. Lee / San Francisco Bay Guardian
Here’s a whopper of a story you may have missed amid the cacophony of campaign
ads and stump speeches in the run- up to the elections.
During former defense secretary Richard Cheney’s five-year tenure as chief
executive of Halliburton, Inc., his oil services firm raked in big bucks from
dubious commercial dealings with Iraq. Cheney left Halliburton with a $34 million
retirement package last July when he became the GOP’s vice-presidential
Of course, U.S. firms aren’t generally supposed to do business with Saddam
Hussein. But thanks to legal loopholes large enough to steer an oil tanker through,
Halliburton profited big-time from deals with the Iraqi dictatorship. Conducted
discreetly through several Halliburton subsidiaries in Europe, these greasy
transactions helped Saddam Hussein retain his grip on power while lining the
pockets of Cheney and company.
According to the Financial Times of London, between September 1998 and last
winter, Cheney, as CEO of Halliburton, oversaw $23.8 million of business
contracts for the sale of oil-industry equipment and services to Iraq through two
of its subsidiaries, Dresser Rand and Ingersoll-Dresser Pump, which helped
rebuild Iraq’s war-damaged petroleum-production infrastructure. The combined
value of these contracts exceeded those of any other U.S. company doing business
Halliburton was among more than a dozen American firms that supplied Iraq’s
petroleum industry with spare parts and retooled its oil rigs when U.N. sanctions
were eased in 1998. Cheney’s company utilized subsidiaries in France, Italy,
Germany, and Austria so as not to draw undue attention to controversial business
arrangements that might embarrass Washington and jeopardize lucrative ties to
Iraq, which will pump$24 billion of petrol under the U.N.-administered oil-for-food program this year….
With Cheney at the helm since 1995, Halliburton quickly grew into America’s
number-one oil-services company, the fifth-largest military contractor, and the
biggest nonunion employer in the nation. Although Cheney claimed that the U.S.
government “had absolutely nothing to do” with his firm’s meteoric financial
success, State Department documents obtained by the Los Angeles Times indicate
that U.S. officials helped Halliburton secure major contracts in Asia and Africa.
Halliburton now does business in 130 countries and employs more than 100,000
Its 1999 income was a cool $15 billion.
In addition to Iraq, Halliburton counts among its business partners several brutal
dictatorships that have committed egregious human rights abuses, including the
hated military regime in Burma (Myanmar).
EarthRights, a Washington, D.C.-based human rights watchdog, condemned
Halliburton for two energy-pipeline projects in Burma that led to the forced
relocation of villages, rape, murder, indentured labor, and other crimes against
A full report (this is a 45 page pdf file – there is also a brief summary) on the
Burma connection, “Halliburton’s Destructive Engagement,” can be accessed on
EarthRights’ Web site
Human rights activists have also criticized Cheney’s company for its questionable
role in Algeria, Angola, Bosnia, Croatia, Haiti, Rwanda, Somalia, Indonesia, and
other volatile trouble spots.
In Russia, Halliburton’s partner, Tyumen Oil, has been accused of committing
massive fraud to gain control of a Siberian oil field.
And in oil-rich Nigeria, Halliburton worked with Shell and Chevron, which were
implicated in gross human rights violations and environmental calamities in that
country. Indeed, Cheney’s firm increased its involvement in the Niger Delta after
the military government executed several ecology activists and crushed popular
protests against the oil industry.
Halliburton also had business dealings in Iran and Libya, which remain on the
State Department’s list of terrorist states. Brown and Root, a Halliburton
subsidiary, was fined $3.8 million for reexporting U.S. goods to Libya in violation
of U.S. sanctions.
But in terms of sheer hypocrisy, Halliburton’s relationship with Saddam Hussein is
hard to top. What’s more, Cheney lied about his company’s activities in Iraq when
journalists fleetingly raised the issue during the campaign.
Questioned by Sam Donaldson on ABC’s This Week program in August, Cheney
bluntly asserted that Halliburton had no dealings with the Iraqi regime while he
was on board.
Donaldson: I’m told, and correct me if I’m wrong, that Halliburton, through
subsidiaries, was actually trying to do business in Iraq?
Cheney: No. No. I had a firm policy that I wouldn’t do anything in Iraq even
arrangements that were supposedly legal.
And that was it!
ABC News and the other U.S. networks dropped the issue like a hot potato. As
damning information about Halliburton surfaced in the European press, American
reporters stuck to old routines and took their cues on how to cover the campaign
from the two main political parties, both of which had very little to say about
official U.S. support for abusive corporate policies at home and abroad.
But why, in this instance, didn’t the Democrats stomp and scream about Cheney’s
Iraq connection? The Gore campaign undoubtedly knew of Halliburton’s smarmy
business dealings from the get-go.
Gore and Lieberman could have made hay about how the wannabe GOP veep had
been in cahoots with Saddam. Such explosive revelations may well have swayed
voters and boosted Gore’s chances in what was shaping up to be a close electoral
The Democratic standard-bearers dropped the ball in part because Halliburton’s
conduct was generally in accordance with the foreign policy of the Clinton
administration. Cheney is certainly not the only Washington mover and shaker to
have been affiliated with a company trading in Iraq. Former CIA Director John
Deutsch, who served in a Democratic administration, is a member of the board of
directors of Schlumberger, the second-largest U.S. oil-services company, which
also does business through subsidiaries inIraq.
Despite occasional rhetorical skirmishes, a bipartisan foreign-policy consensus
prevails on Capital Hill, where the commitment to human rights, with a few notable
exceptions, is about as deep as an oil slick.
Truth be told, trading with the enemy is a time-honored American corporate
practice or perhaps “malpractice” would be a more appropriate description of big-business ties to repressive regimes.
Given that Saddam Hussein, the pariah du jour, has often been compared to
Hitler, it’s worth pointing out that several blue-chip U.S. firms profited from
extensive commercial dealings with Nazi Germany.
Shockingly, some American companies – including Standard Oil, Ford, ITT, GM,
andGeneral Electric – secretly kept trading with the Nazi enemy while American
soldiers fought and died during World War II.
Today General Electric is among the companies that are back in business with
Saddam Hussein, even as American jets and battleships attack Iraq on a weekly
basis using weapons made by G.E.
But the United Nations sanctions committee, dominated by U.S. officials, has
routinely blocked medicines and other essential items from being delivered to Iraq
through the oil-for-food program, claiming they have a potential military “dual
These sanctions have taken a terrible toll on ordinary Iraqis, and on children in
particular, while the likes of Halliburton and G.E. continue to lubricate their
January 28, 2002
Cheney Won’t Yield Records
By Dana Milbank, The Washington Post
WASHINGTON – Vice President Dick Cheney said yesterday that he would not
give congressional investigators records from the administration’s energy policy
development, welcoming what legal experts say would be the highest-profile court
fight between Congress and an administration since Watergate.
Cheney framed his forceful rejection of the demand for information in broad
constitutional terms, professing a desire to restore presidential power to a level
not seen in decades.
“I have repeatedly seen an erosion of the powers and the ability of the president
of the United States to do his job,” he said. The vice president said it was “wrong”
for past administrations to yield to congressional demands. . . .
The showdown between the Bush administration and the General Accounting
Office, the investigative arm of Congress, follows a nine-month effort by Congress
to see whether campaign contributors disproportionately influenced the White
House energy proposals.
The matte has gained new prominence because of the collapse and numerous
investigations of energy trader Enron Corp., which has ties to the administration.
U.S. Comptroller General David Walker, who leads the GAO, said he would begin
legal proceedings this week if the administration did not provide the information. .
Walker said the GAO was seeking information from Cheney not in his role as vice
president but as chairman of the inter-agency energy task force, which solicited
information from executives and others outside the government. The task force
has said it met with Enron representatives six times; the GAO is seeking to learn
who met with the task force and what was discussed.
Senate Majority Leader Tom Daschele, D-S.D., called Cheney’s decision not to
release the records “unfortunate.” On CBS’ “Face the Nation,” Daschele said:
“The General Accounting Office is on solid ground in demanding that these records
be turned over. The American people have a right to know what the facts
March 1, 2002
Oil Industry’s Top Donors to GOP advised
Cheney on Energy Policy
The New York Times
WASHINGTON – Eighteen of the energy industry’s top 25 financial contributors
to the Republican Party advised Vice President Dick Cheney’s national energy task
force last year, according to interviews and election records.
Critics of the Bush administration’s energy policy have long suspected that many of
the corporations that were invited to advise the White House were large energy
concerns that had contributed heavily to President Bush’s campaign and the
Republican Party in 2000. . . .
Of the top 25 energy industry donors to the Republican Party before the
November 2000 election, 18 corporations sent executives or representatives to
meet with Cheney, the task force chairman, or members of the task force and its
The companies include Enron Corp., Southern Co., Exelon Corp., BP, TXU Corp,
FirstEnergy andAnadarko Petroleum.
Critics of the process said that Bush and Cheney were quick to respond to
executives from the energy sector not only because of campaign contributions but
also because they share the philosophy of the oil industry, where both made
The energy task force produced a report on May 17, 2001, that sketched out a
national energy policy that was largely favorable to the energy industry. The
report recommended additional oil and gas drilling and made note of the nation’s
need to build 1,300 to 1,900 electric plants to meet the projected demand over the
next two decades…..
The General Accounting Office, the investigative arm of Congress, sued Cheney
last week to force him to turn over the names of those who had advised the task
force. A federal judge has ordered the Energy Department to release 7,500
pages of documents related to the task force under a Freedom of Information Act
request by the Natural Resources Defense Council….
Cheney has argued that releasing the identities of outside advisers on energy
policy would make it impossible to have confidential conversations and receive
unvarnished advice from those outside the government.
The Administration’s Cozy Relationship
with Big Corporate Interests
Is the GAO right to worry about undue corporate influence? Consider this
statement from Mike Smith, assistant secretary for fossil fuels at the
Department of Energy, who recently told an audience in Charleston that, “The
biggest challenge is going to be how to best utilize taxpayer dollars to the benefit
of industry.” (Charleston Gazette, January 31, 2002).
After the release last year of the President’s National Energy Policy, the Bureau
of Land Management (BLM) created an implementation plan of more than 40 tasks
focused on speeding up energy development and reducing environmental
safeguards. Meanwhile in Utah, the state director for the BLM, sent out a memo
to field offices saying that wilderness reviews and compliance with environmental
laws were creating backlogs of oil and gas leases and permits and dictating that oil
and gas development must be their No. 1 priority. (BLM memo, January 4, 2002).
These statements are indications of the cozy relationship the Bush Administration
has with big oil, gas, and coal companies. In fact, the highest-ranking officials
responsible for the protection of the nation’s parks, forests, monuments and
wilderness areas, come not from a science or conservation background. Rather,
they stepped out of their jobs as lobbyists for the mining, coal, and oil industries
to take control of the nation’s public lands and waters.
●Gale Norton, secretary of interior, is a former lobbyist for NL Industries,
a chemical company that has had several Superfund sites.
●J. Steven Griles, deputy secretary of Interior, is a former lobbyist for
the oil and coal industries.
●Rebecca Watson, assistant secretary for lands and minerals management,
Department of Interior, spent most of her career as a lawyer representing
mining, logging, and energy interests.
●Mark Rey, undersecretary for natural resources and the environment,
Department of Agriculture, was vice president of the timber industry’s
American Forest and Paper Association.
●James Connaughton, head of the President’s Council on Environmental
Quality, is a former lobbyist for various mining companies and theChemical Manufacturers Association.
●Camden Toohey, special assistant for Alaska at the Department of
Interior, was executive director of Arctic Power, the primary lobbying
organization pushing for drilling in the Arctic Refuge. . . .
September 25, 2002
GROUPS DEMAND THAT BUSH OUST #2 AT
INTERIOR OVER ETHICS VIOLATIONS
RELEASE DOCUMENTS REVEALING J. STEVEN GRILES
INVOLVED IN DECISIONS BENEFITING ENERGY COMPANIES
THAT WERE HIS CLIENTS
Washington, D.C. – Friends of the Earth and the Citizens Coal Council today called
on President Bush to fire J. Steven Griles, a former energy lobbyist who is now
Deputy Secretary of the Interior Department, for violating his ethics
agreement. The groups cited calendars they obtained under the Freedom of
Information Act showing that Griles met with his former energy company clients
and worked on particular issues that benefit them, as reported in a page-one story
in today’s Washington Post.
Griles was a lobbyist for over 40 coal, oil, gas and electric companies and trade
associations before President Bush named him to the Interior post.
Griles sold his lobbying firm and signed a recusal agreement pledging that while at
Interior he would not be involved in “any particular matter involving specific
parties in which any of my former clients is or represents a party.”
In May 2002, Friends of the Earth caught Griles violating his recusal agreement
after he attempted to pressure the U.S. Environmental Protection Agency (EPA)
to change its analysis criticizing a coal bed methane project in the Powder River
Basin of Wyoming and Montana.
Before his appointment to the Interior Department, Griles worked as a lobbyist on
behalf of several coal bed methane companies involved in drilling gas wells on
public lands in the basin.
“Once again we’ve caught Griles lobbying and meeting with his corporate polluter
buddies and violating his ethics agreement,” said Kristen Sykes, Interior
Department Watchdog for Friends of the Earth. “President Bush should clean up
the dirty corporate influence at the Interior Department by firing Griles
Doyle Coakley, Chairman of the Citizens Coal Council and a resident of West
“Griles is another example of a backroom dealer in the Bush administration who
thumbs his nose at the public trust and helps greedy coal companies damage the
environment. The president must get rid of people who have conflicts of interest.
We deserve honest government, not government by and for the big energy
In the 1990s, Griles represented several coal mining interests including Arch Coal,
the National Mining Association and Pittston Coal Company. Many of these
companies are clients of National Environmental Strategies, which bought out J.
Steven Griles and Associates and retained Griles as a vice principal and lobbyist.
The firm is paying Griles $284,000 a year over the next four years for the sale of
his client base.
DETAILS OF GRILES MEETINGS WITH ENERGY COMPANIES
The calendars that Friends of the Earth and the Citizens Coal Council obtained
show that from July 27, 2001, to February 20, 2002, Deputy Secretary of the
Interior J. Steven Griles:
> Met at least seven times with his former clients, including the National Mining
Association and the Edison Electric Institute, and at least once with his former
lobbying firm, National Environmental Strategies.
> Met at least 15 times with either companies that belong to the National Mining
Association or with administration officials to discuss issues concerning those
members; including nine meetings with or about Peabody Energy and two meetings
with the West Virginia Coal Association, a proponent of mountaintop removal
> Met at least 16 times with former industry clients and administration officials to
discuss the rollback of air pollution standards for power plants, oil refineries
and industrial boilers. Discussions included the New Source Review rule, pending
air pollution legislation and issues such as mercury.
> Met at least 12 times with administration officials and coal companies to discuss
mountaintop removal strip mining. In May, the Army Corps of Engineers andEPA
issued a major rule that weakened the Clean Water Act rules. The new rule
legalizes the longstanding practice of mountain top removal mines that dump
millions of tons of mining waste into streams. A federal judge, however, has
blocked this rule from taking effect at coal mines in Kentucky and West Virginia.
The Deputy Secretary assists the Secretary of the Interior Gale Norton in the
discharge of Secretarial duties and serves as Acting Secretary in the absence of
the Secretary. With the exception of certain matters reserved by the Secretary,
the Deputy Secretary has the full authority of the Secretary….
Friends of the Earth – Campaigns
$ $ $
March 28, 2002
Bush Order on Energy Policy
Mimicked Oil-Industry Draft
By Dana Milbank, The Washington Post
WASHINGTON – President Bush last year issued a presidential order on energy
policy that closely followed a proposed draft given to the administration two
months earlier by oil industry lobbyists, according to documents released by the
Energy Department under a court order.
An official from the American Petroleum Institute sent an e-mail last March 20
to Joseph Kelliher, than a Department of Energy policy adviser proposing language
for a presidential directive governing energy regulations. The institute called it “a
suggested executive order to ensure that energy implications are considered and
acted on in rulemakings and other executive actions.”
The institute recommended an order requiring agencies to consider whether
environmental or regulatory actions would cause “inordinate complications in energy
production and supply.”
On May 18, Bush issued Executive Order 13211, which directed agencies to prepare
a “Statement of Energy Effects” relating to “any adverse effects on energy supply,
distribution or use.” . . .
“The oil companies seem to be putting words in our president’s mouth,” Sharon
Buccino, a Natural Resources Defense Council lawyer said at a press conference.
The group also pointed to a March 23 e-mail to Kelliher from Southern Co., which
it recently identified as the country’s second-largest polluter. An attached
document said national energy policy should include “Reform of EPA’s New Source
Review Programs,” regulations limiting emissions from expanded power plants.
Southern complained that the Environmental Protection Agency’s interpretation of
the statute, part of the Clean Air Act, “discourages any repair or replacement
project that might make an electric utility generating unit more available to
operate” for longer hours.
Bush’s national energy policy called on the EPA to review the regulations and
interpretations of the Clean Air Act. The EPA recently completed that review
with a decision to make the regulations more favorable to industry.
A spokesman for the administration was examining the Natural Resources Defense
Council’s charges. The environmental group also file a motion in U.S. District Court
in Washington yesterday seeking to hold the Energy Department in contempt of
court for providing incomplete information under last month’s court order.
September 19, 2002
Norton wants energy bill veto if no ANWR drilling
By Tom Doggett, Reuters
WASHINGTON —— U.S. Interior Secretary Gale Norton said Wednesday she
would recommend the White House veto a broad energy bill if Senate and House
negotiators failed to include opening the Arctic National Wildlife Refuge to oil
The Bush administration is urging Congress to give energy firms access to the
Arctic refuge located in northeast Alaska, arguing the area’s possible 16 billion
barrels of oil are needed to reduce U.S. crude imports from hostile countries like
In an interview, Norton said she would prefer President Bush veto the energy
bill if it kept the Alaskan refuge closed because boosting domestic oil production
is the centerpiece of the administration’s energy plan.
“From the Department of Interior perspective, if ANWR is not in the legislation, it
does almost nothing to enhance (oil) production,” she said….
The Democratic-run Senate and many environmental groups oppose opening the
refuge, saying the area’s caribou, polar bears, and other wildlife would be harmed
IRAQ FIGURES IN DEBATE
Supporters of ANWR drilling say the issue has taken on more urgency now that
the United States may soon be at war with Iraq. Military strikes would cut off
Iraq’s roughly 2 million barrels a day of oil exports to the world market. Last year,
Iraq was the sixth biggest foreign oil supplier to the United States, although
shipments have fallen significantly in recent months.
A disruption in Iraqi oil imports could not immediately be offset by tapping the
Arctic refuge. If Congress agreed to open ANWR, it would take several years for
oil to start flowing and about eight years to reach peak production of about 1
million barrels a day, according to industry executives. A quicker and more likely
response would be for the administration to order a release of oil from the
nation’s Strategic Petroleum Reserve.
by Mark Zepezauer and Arthur Naiman, Odonian Press, 1996
Courtesy Third World Traveler ( http://www.thirdworldtraveler.com )
~ ~ ~
Like the percentage depletion allowance just described, the oil depletion allowance
lets certain companies deduct 15% of the gross income they derive from oil and
gas wells from their taxable incomes, and continue to do that for as long as those
wells are still producing. Some smaller companies get to increase the deduction by
1% for every dollar the price of oil falls below $20 a barrel.
This tax break, on which we lose about $1 billion a year, can add up to many times
the cost of the original exploration and drilling. In fact, it formerly could amount
to 100% of the company’s profits-in which case the company paid no taxes, no
matter how much money it made. Presently this is capped at 65% of profits.
The rationale for this loophole is that it encourages exploration for new oil-presumably something no oil company would otherwise do. Oil industry executives
argue that other businesses are allowed to depreciate the costs of their
manufacturing investments. That’s true, but they’re only allowed to take off the
actual cost of those assets, not deduct 15% of their gross income virtually
Introduced in 1926, the oil depletion allowance was restricted in 1975 to
independent oil companies that don’t refine or import oil. To make up for this, the
larger, integrated companies were given the intangible drilling cost deduction,
which in some ways is even better.
It lets them deduct 70% of the cost of setting up a drilling operation in the year
those expenses occur, rather than having to depreciate them over the expected
life of the well. The other 30% they can take off over the next five years. This
boondoggle costs us about $500 million a year.
A third tax break is the enhanced oil recovery credit. It encourages oil companies
to go after reserves that are more expensive to extract-like those that have
nearly been depleted, or that contain especially thick crude oil. The net effect of
this credit, which costs us $500 million a year, is that we pay almost twice as much
for gasoline made from domestic oil as we do for gas made from foreign oil.
Together, these three loopholes sometimes exceed 100% of the value of the
energy produced by that oil. In other words, it would be cheaper in some cases for
the government to just buy gasoline from the companies and give it to taxpayers
free of charge.
(Of course, without the tax breaks, the oil companies would charge more for
gasoline, bringing our prices closer to other countries’. This would undoubtedly
lower our per capita consumption of gasoline, which is currently the highest in the
There’s a fourth tax break we can’t count because we can’t estimate its size; for
details on it, see the section on “master limited partnerships” in the chapter called
What we’ve left out. But miscellaneous smaller tax breaks and subsidies add an
additional $400 million a year to the oil industry’s wealthfare, which brings the
total to $2.4 billion.
Instead of throwing $2.4 billion a year at the oil companies, we could encourage
them to cut down on waste during production and transport.
Each year, the equivalent of a thousand Exxon Valdez spills is lost due to
inefficient refining, leaking wells and storage tanks, spills at oil fields and from
tankers and pipelines, evaporative losses, un-recycled motor oil and the like.
The current oil and gas tax breaks encourage the use of fossil fuels at the
expense of cleaner alternatives, reward drilling in environmentally sensitive areas
like wetlands and estuaries, and artificially attract to the oil industry investment
money that could be used more productively in other areas of the economy.
March 30, 2002
Court Orders Energy Dept. to Release
Bid Information to Center
By Peter Newbatt Smith, Center for Public Integrity
WASHINGTON – This week, a federal court decided in favor of the Center for
Public Integrity in the Center’s lawsuit against the U.S. Department of Energy
seeking release of bid information in the largest privatization of government
assets in U.S. history.
Naval Petroleum Reserve #1, near Bakersfield, Calif., also known as Elk Hills, was
sold in 1997 as part of Vice President Al Gore’s “Reinventing Government”
initiative. Occidental Petroleum Corp. – which has longstanding financial links to
Gore and to his father, the late Sen. Albert Gore Sr. – bought the property for
The Energy Department has never released the names of the other bidders, or
their bid amounts, despite the Center’s repeated informal and formal requests
since the spring of 1999. The Center, a nonpartisan, nonprofit organization, filed
suit in November 2000 under the Freedom of Information Act, seeking those
names and bid amounts….
“We wanted this important public information about public policy decisions made on
public property to be available and known to the American people during the 2000
presidential election,” Center Executive Director Charles Lewis said. “However,
Clinton-Gore administration officials stonewalled, successfully keeping the
information under wraps.”
In this week’s decision, District Court Judge Henry H. Kennedy, Jr. ordered
Energy to disclose the information requested by the Center. Judge Kennedy found
that the department had not shown that release of the names and bid amounts
would cause substantial competitive harm to the unsuccessful bidders. He also
agreed with the Center that the prospective purchasers were not government
“contractors,” and therefore, a statute that specifically exempts contractors’
proposals from FOIA disclosure did not apply. Judge Kennedy’s decision is subject
“I am very pleased that a federal judge agrees with us that the public has a right
to know precisely how its property, worth billions of dollars, is sold,” Lewis said.
“But we are under no illusions that the case is over; the Government will likely
“Maybe we’ll finally learn the truth in time for the next presidential election.”
The Center first examined the Elk Hills sale while researching The Buying of the
President 2000. According to financial disclosure forms, Gore held between
$500,000 and $1 million in Occidental stock as a trustee of a family trust
bequeathed by his father, who served on Occidental’s board of directors after
losing re-election to the U.S. Senate in 1970.
Occidental was one of the younger Gore’s biggest career patrons, and contributed
more than $470,000 to Democratic committees and causes since Gore was added
to the presidential ticket in 1992.
Gore refused to be interviewed by the Center for Public Integrity for The Buying
of the President 2000. In response to a written interview request at that time, an
attorney for his campaign inquired about the Center’s nonprofit status.
– Peter Newbatt Smith is Research Editor at the Center for Public Integrity and
an attorney representing the Center in its lawsuit.
December 13, 2001
TVA CHIEF TELLS PANEL HE BACKS BILL
DEREGULATING POWER SALES
by Nancy Zuckerbrod, Associated Press
WASHINGTON – Tennessee Valley Authority Chairman Glen McCullough went
before a House panel yesterday to urge support for deregulation legislation that
electricity distributors in the Tennessee Valley helped write.
TVA’s 158 distributors hammered out the TVA provision last year. It is part of a
larger electric-power deregulation bill.
The measure would allow TVA to sell electricity outside its seven-state
congressionally mandated area and would allow other companies to sell power inside
McCullough said he thinks TVA can compete in a deregulated environment. “We
welcome competition and choice,” he said.
The bill would give the Federal Energy Regulatory Commission oversight authority
over electric transmission in the valley.
McCullough indicated he is not thrilled about ceding some of that authority but
said he would back the provision in the spirit of compromise.
The public power company has opposed amending the deregulation bill to give FERC
oversight authority over TVA rates – something the Bush administration supports.
TVA’s board currently sets the agency’s rates, which are relatively low.
“I don’t see how FERC oversight of wholesale rates would enable the rates to be
any lower,” McCullough said.
(Catbird: How about to keep rates from going HIGHER, Mr. McCullough?)
Several FERC officials also testified at the hearing before a subcommittee of the
House Energy and Commerce Committee. Many of them were peppered with
questions about the collapse of Houston-based power wholesaler Enron Corp.,
which had done business with TVA.
Congress is investigating the failure of the energy-trading company, whose
downfall left countless investors burned, thousands of employees out of work and
the once high-flying company in bankruptcy court….
To spot more big birds on the power lines,
stay plugged in and shine your light below!
Aloha Petroleum – A chain of gasoline stations in Hawaii that figures prominently
in the Bush / Harken Energy scandals.
American Electric Power – The nation’s largest power generator. (Everybody
pray for America!)
August 31, 2002
SEC Requests Power-transaction
data from Ohio Utility
COLUMBUS, Ohio – American Electric Power said yesterday that the Securities
and Exchange Commission has made an informal request for documents about
questionable energy trades.
AEP, the nation’s largest power generator, said it will comply with the request,
received Wednesday, regarding “round-trip” transactions. In those deals, a
company sells power to another and then simultaneously buys back an equal amount
at the same price, AEP said.
Such trades typically do not affect profits but can make market demand appear
greater and thereby drive up prices. By inflating revenue, the trades can also
mislead investors, a violation of securities laws….
The company said the transactions were not material to gross revenue and did not
constitute round-trip sales.
AEP’s regulated utility operations serve 4.9 million customers in 11 states…
An AEP subsidiary, AEP Coal, also is one of the nation’s largest fossil-fuel
producers, with mines in Ohio, Kentucky and Louisiana….
Ashland Inc. – One of the nation’s most politically-powerful power companies.
February 1, 2002
Concerns rise as Ashland OKs auditor
By Roy Wood, Cincinnati Post
Concerns heightened by the Enron collapse emerged Thursday as Ashland Inc.
shareholders confirmed Ernst & Young as the company’s independent auditor for
Ninety-nine percent of shareholders voted to ratify Ernst & Young at the
Covington-based company’s annual meeting, but one noted that the federal
government has talked of limiting how long auditing firms can serve as
corporations’ independent auditors.
The issue has been discussed in Washington in years past but never acted upon. It
has regained prominence in the wake of the Enron bankruptcy, in which outside
auditors apparently didn’t question an accounting plan designed to hide debt.
Ernst & Young has served as Ashland’s outside independent auditor since Ashland
Inc. became a public company in 1936….
Ashland officials also said the company’s tax-deferred retirement savings plan has
only 11 percent of its assets restricted in Ashland stock, another issue that arose
after the Enron failure left thousands of Enron employees with devalued
Shareholders re-elected four directors: Frank C. Carlucci, James B. Farley, Dr.
Bernadine P. Healy, and William L. Rouse.
Healy is the former president of the American Red Cross, and Carlucci is chairman
of The Carlyle Group in Washington, D.C. Farley is the retired chairman and CEO of
The MONY Group, and Rouse is the former chairman of First Security Corp.
* * *
August 29, 2002
Suit Charges Ashland Mismanagement
Ashland Inc.’s former president is responsible for accounting improprieties,
securities fraud, environmental crimes and the mishandling of corporate
acquisitions, a shareholder contends in a lawsuit.
The actions have eroded the company’s stock value, according to the suit filed in
Covington, Ky., on aug. 16 by Central Laborers’ Pension Fund, a shareholder. It
names former president, Paul Chellgren, Ashland’s board of directors and several
senior officers plus the company’s accounting and auditing firm, Ernst and Young.
The fund is asking a Kenton Circuit Court judge to award an unspecified amount
that would include punitive damages….
Chellgren retired this month after violating the company’s policy against office
Les Zuke, spokesman for Ernst & Young, said the lawsuit “has no merit. We are
confident our work was in accordance with professional standards.”
Cheligren’s mismanagement of the company and control over its directors has
devastated the company and its image, the suit contends.
“Because of his domination and control over Ashland, Chellgren operates Ashland
as a private fiefdom, despite its public ownership and through a combination of
abuse and his control over Ashland, waste of its assets, gross mismanagement and
active and deliberate dishonesty, has seerely damaged what was once a valuable
and profitable corporate franchise – without answering to anyone,” the suit alleges.
The lawsuit contends that Chellgren, the directors and other officers “watched
Ashland’s stock price free-fall from over $55 in mid-1998 to below $32 in late
It alleges that Chellgren and others undertook a series of actions, including
acquisitions, to stave off proposals to split up the company.
The alleged accounting problems, the lawsuit contends, stem from acquisitions and
restructuring in 1999, when the company changed its name from Ashland Oil to
Ashland Inc.; sought to sell its interest in its mining company, Arch Coal; and
acquired Superfos, one of its largest highway construction competitors.
The lawsuit says that from 1999 to 2001, the company resorted to “creative
accounting,” overstating revenues by $18 million and understating costs associated
with Superfos deal and ongoing operations at APAC, a paving company Ashland
The company later took an additional $3 million charge as a result of an internal
* * *
< < < FLASHBACK < < <
From the Multinational Monitor:
CORPORATE PROFILES, CORPORATE VILLAINS:
The Ten Worst Corporations of 1990
by Russell Mokhiber
~ ~ ~
LEAVING ONE OF THE MORE rapacious decades in corporate history, one is left
to wonder: What have multinational corporations learned?
After surveying the ten worst companies of 1990, the answer is clear: not much.
With many governments of the world dependent on big business, corporations can
be as nasty as they want to be. And they have been.
From hooking kids on tobacco, to pushing untested and risky genetically engineered
growth hormones, to intimidating employees who try to speak out against their
company’s misdeeds, the multinationals are as reckless, immoral and criminal as
ever. Citizens concerned about this breakdown in law and order must become
increasingly vigilant to protect themselves and their families from the marauding
Toward this end, we present the Ten Worst Corporations of 1990.
The companies presented here are large, multi-billion dollar enterprises headed by
white, “well-educated” men. Even the most notorious offenders use slick multi-media advertising campaigns to whitewash their misdeeds. But don’t believe the
hype. And don’t believe you can’t change things.
Don’t buy the products made by the worst corporations. Pick a high-profile local
outlet of one of the ten, and picket it. Be creative and have fun.
But spread the word….
~ ~ ~
ASHLAND OIL: Intimidating Its Victims
It is one thing to be a polluter. Many corporations are polluters. But it is another
to seek to intimidate victims of corporate pollution – victims who are seeking to
protect themselves from pollution and gain a measure of justice against the
Ashland Oil is a polluting corporation with an intimidating edge. In Catlettsburg,
Kentucky, Ashland runs a giant refinery. Local residents charge that the Ashland
operations, including a metals-recovery system, have dumped heavy metals, many of
which are carcinogenic and remain unregulated, into the neighboring community.
Local residents charge that the chemicals are highly corrosive, cause paint to peel
off people’s cars and houses and cause skin burns.
Ashland has been running the facility without obtaining the air pollutant permits
required by the Kentucky Department of Environmental Protection (DEP). The
agency knows that Ashland is polluting the region, but continues to allow the plant
“Given Ashland Oil’s history of constructing and operating air contaminant sources
without permits,” begins one 1988 DEP memo, “I recommend the most stringent
penalties available to use in the hope that Ashland Oil will get the message this
A second December 1989 DEP memo writer asked a superior to commence legal
action against the company “for numerous violations of the Air Quality
The memo asserted that “these violations occurred starting in June 1987 . .. and
continue to date. The documentation concerning these violations [is] quite
voluminous…. Please take whatever measures allowed by law to impose any and all
sanctions and remedies deemed appropriate.”
A study sponsored by Vanderbilt University and conducted by a Stanford
University medical student found unusually high cancer rates around the Ashland
facility. “They just can’t run the plant a week without having what they call a
malfunction or an upset,” according to attorney Rodney Jackson, who represents
hundreds of local residents charging that the company has damaged property and
In July 1990, a local jury awarded $10.3 million to four residents. Instead of
confessing guilt or exhibiting shame, Ashland went on the attack. Attorneys for
the residents charge that following the verdict, the company turned the
Catlettsburg area into a “civil war zone” in a campaign to win the support of local
businesses, town governments and politicians.
Ashland mounted a traditional “good neighbor” public relations effort, including
staged rallies, letter-writing campaigns and telephone trees to counter the public
impact of the $10.3 million verdict. But at the same time, residents were also
bombarded with various forms of harassment, including obscene phone calls, acts
of vandalism and other forms of intimidation.
In August 1990, residents, this time on the other side of the Kentucky-West
Virginia border, banded together and sued Ashland again. They charged the
company with fraud, obstruction of justice and threatening plaintiffs and
Attorneys for the residents called on a Kanawha County, West Virginia court to
“supervise and regulate” the conduct of Ashland to prevent the company from
“chilling the free litigation of these claims.”
“The tactics which defendants are using have gone beyond the permissible
bounds of free speech which is protected under the constitution, and such
actions warrant court supervision,” argued Arnold Levin, an attorney for the
residents. “The recent escalation of intimidation tactics requires the intervention
of this court to safeguard the rights of the plaintiffs.”
Residents charge that Ashland is responsible for a series of acts of harassment
against the four individuals awarded the $10.3 million verdict, and for surveillance
and harassment campaigns targeting local environmentalists and other prominent
supporters of legal action against Ashland….
Atlantic Richfield(ARCO) – From The Buying of the President (1996 ed.): . . .
In 1988, 249 individuals each gave at least $100,000, achieving a total of $25
million, to help elect George Bush president. By giving that much, they became
members of “Team 100″ and not only had personal access to Bush and other
members of the Bush administration, but many of them — from real estate and
construction to finance, from manufacturing to agribusiness to oil and gas
interests — received special favors during the Bush presidency….
The many quid pro quo relationships have been well documented by Common Cause
magazine and others. The two largest donors were Archer-Daniels-Midland
(ADM) and its chairman, Dwayne Andreas, who gave $1,072,000, and Atlantic
Richfield(ARCO) and its chairman, Lodwrick Cook, who contributed $862,360.
Both companies made or saved hundreds of millions of dollars from their well-placed Washington investments….
There are numerous examples of how companies that did as little as simply throw a
cocktail party at the 1992 Democratic convention, to companies that contributed
hundreds of thousands of dollars to the campaign and party, also had executives
fly with(Ron) Brown on foreign trips. In each case, the company contributions or
favors were done during, or subsequent to, Brown’s tenure as chairman of the DNC.
The companies involved include some of the country’s largest. Executives from the
oil company ARCO, the Atlantic Richfield Company, got to go to China, Hong Kong,
and South Africa with Brown. ARCO donated $278,317 to the DNC in 1991 and
1992 while Brown was the party chairman and from 1993 through 1994, ARCO gave
$164,500 in soft money to the DNC. The total contribution to the Democrats
between 1991 and 1994 was $442,817….
Phil Gramm has also been criticized for mixing government business and campaign
politics by using his Senate office staff to work on campaigns. . . . At least two
different aides to Senator Gramm have written memos about how Gramm’s wife,
Wendy…should be used for his reelection bid. . . .
That is particularly interesting in light of the powerful position she held in
Washington as chairwoman of the Commodity Futures Trading Commission. As
the nation’s leading regulator of futures contracts for all agricultural commodities,
Wendy Gramm was under tight ethical constraints as to the degree and nature of
her personal daily interaction with agribusiness interests. In other words, the
chairwoman of the powerful federal regulatory agency overseeing agriculture
commodities futures trading would be helping her U.S. senator husband raise
campaign funds from the corporations and individuals she regulated. . . .
The CFTC oversees federal regulation of the nation’s fourteen commodities and
futures exchanges. At those exchanges, contracts to buy and sell a seemingly
endless variety of commodities are traded: oil and gas, soybeans, cattle, pork
belies, corn, precious metals, cocoa, lumber, cranberries, and sugar, to name but a
few. The regulatory duties of the CFTC are aimed largely at ensuring fairness and
stability at the nation’s commodities exchanges.
One week after Bill Clinton won the presidential election it became clear that
Wendy Gramm would be leaving the politically appointed CFTC post.
On November 16, 1992, nine energy companies wrote to the commission seeking to
exempt energy derivative contracts, a business valued at $5 TRILLIONa year,
from federal regulation. . . .
In response to the energy companies’ request, Wendy Gramm set in motion the
process that led to those energy derivative contracts, and other exotic financial
transactions, being exempted from regulation. . . . A Center for Public Integrity
investigation shows that of the nine companies that requested the exemption,
seven had donated to Phil Gramm campaigns through PACs, company officers, or
Cumulatively, Gramm’s campaigns had received $157,250 from the people who were
asking his wife to exempt energy derivatives and the other transactions from
During Wendy Gramm’s tenure with the commodities commission, Phil Gramm
accepted $38,500 in commodity honoraria, according to his actual disclosure
records. . . At the same time she was heading the commodities commission, he was
on the Senate Banking committee. That means that Phil Gramm, too, had
regulatory jurisdiction and oversight regarding commodities.
On July 24, 1990, Phil Gramm voted to kill an amendment that would have lowered
the sugar price support from eighteen cents a pound to sixteen cents a pound.
That was a potential conflict of interest because Gramm’s disclosure show that at
the time the couple owned between $15,000 and $50,000 worth of stock in a sugar
company named Castle and Cooke.
DynCorp – One of the United States’ largest defense contractors.
From the net:
What Happens in Congress May Not Be As Important As What Happens With CIA,
The Military and The Private Contractors Leading Us To War in Colombia…
WHEN THE CHILDREN OF THE
BULL MARKET BEGIN TO DIE
By Michael C. Ruppert
[Bill Clinton arrives in Cartagena Colombia on August 30, 2000 on the heels of
three unpublicized massacres by right wing paramilitaries designed to inflame
FARC guerillas. The real shooting and the American publicity machine churning out
war fever will start on the same day. This was the lead story in the June issue of
“From The Wilderness.”]
While attention is being increasingly focused on a billion dollar military aid package
for Colombia that is nearing Bill Clinton’s desk for signature, experience –
especially that taken so painfully from Vietnam – tells us that the real
determinants of how deeply involved we will become in Colombia are not in
Washington, but already down there stirring the pot.
As in Vietnam, and unlike the Contra War, Congress may just be playing “catch-up”
with events created by various interests serving more than one master. And
experts are becoming increasingly persuaded that our current Colombian
experience is more like Vietnam than anything since.
The likelihood of direct involvement of U.S. forces in a dense hostile terrain,
controlled by experienced, organized, well-armed, indigenous forces, toughened by
three decades of civil war is growing daily. And indicators of the imminence of
conflict are not to be found in whether the Senate or the House chops or adds a
few dollars or helicopters which can all be restored without fanfare to the Foreign
Aid Bill in Conference Committee at the last minute. They are to be found in the
movements and actions of money, the U.S. military and some CIA/DoD connected
corporations, possibly using “sheep-dipped” CIA and military personnel disguised as
employees of private companies in roles that can only expand the conflict.
The money flow in and around Colombia, both as connected to the drug trade, to
vast oil reserves and to the other abundant resources accessible through the
“back door” to the Amazon, only hints at the financial and economic power
accumulated in the country. As FTW observed a year ago, the wealth accumulated
by the FARC guerrillas, largely through the “taxation” of the drug trade, was
sufficient to induce Richard Grasso, Chairman of the New York Stock Exchange,
to travel to Colombia seeking investment funds for Wall Street. . . .
To understand the significance of this trade it must be noted that, in spite of the
continuing expansion of violence between the three dominant factions (government,
right wing paramilitaries and rebels), all of which deal prodigiously in drugs,
Colombia has been able to steadily expand its drug production every year for the
past ten years. Now the largest drug producing nation in the world, according to
DEA and DoJ sources, Colombia produces almost all of the world’s cocaine and
almost two thirds of all the heroin entering the United States.
If one imagines three rivals locked in a raging gun battle, one wonders how or why
they could all simultaneously increase drug production at rates that would make
major corporations jealous. Clearly something else is operating here and that is the
hand guiding the huge accumulation of wealth resulting from decades of narco-expansion.
That hand, we believe, is the CIA. . . .
The Private Contractors
As noted by highly credible writers such as Peter Dale Scott, Col. Fletcher Prouty
and even the legendary “retired” CIA executive Ted Shackley in his book The
Third Option, the use of private corporations, whether directly owned by CIA as
“proprietaries” or not, is a common practice for the extension of U.S. military and
diplomatic power. Examples of the former in Vietnam include Civil Air Transport
or Air America while examples of the later include large multi-nationals such as
Bechtel, Brown and Root, AT&Tor any of the major oil companies.
In regions where overt commitment of U.S. military forces is impolitic these
private corporations, as they have evolved in the last few decades, can accomplish
a multitude of objectives essential to inflaming regional conflicts to the point
where U.S. military forces must be called in to save the day.
The use of these companies, which serve as actual profit centers for their private
investors, their intelligence agency owners, or both, has evolved to the point where
the corporations offer off-the-shelf war making capabilities from infantry
fighters, to aerial reconnaissance, to general officers capable of setting up or
commanding division sized maneuvers in client countries. The survivability of these
companies is a priori tied to the creation of conflict and regional destabilization
with the blessings of CIA so that there will always be customers. Peace becomes
One such corporation, heavily involved in both Colombia and in Kosovo is the
DynCorp, according to Alex Cockburn and Jeff St. Clair, is the nation’s twenty-second largest defense contractor with 1998 U.S. Government contract revenues
of $475 million. DynCorp, which currently has between 300-600 contracted
employees in Colombia, is performing functions like crop eradication (using
defoliants – like Vietnam), to sophisticated aerial reconnaissance, to combat
advisory roles training military and possibly even paramilitary forces.
When the history of the Colombian War is written it may well be noted that the
first U.S. casualties were actually three DynCorp employees killed when their
reconnaissance aircraft crashed on a mountaintop in the drug growing regions last
summer. DynCorp employees have been described as being arrogant and more than
willing to get “wet” by going out on combat missions and engaging in firefights.
A British source reminded us recently that DynCorp Chairman, Pug Winokur,
begged out of Commerce Secretary Ron Brown’s ill fated last flight in the
The same Pug Winokur is on the board of Harvard Endowments which had a behind
the scenes hand in destroying the economic research conducted by former
Assistant Secretary of Housing, Catherine Austin Fitts in 1996. That research
was beginning to illuminate how the drug trade generates profits for Wall Street
through the subsidized HUD housing market where Harvard is a heavy investor. . . .
The parallels between Colombia and Vietnam are inescapable and unavoidable. After
twenty-five years, the passing of an entire generation, the forces that govern us
behind the scenes are poised to unleash another “floating crap game” of profits,
corporate expansion, re-colonization and even genocide. The one glaring and hope-giving difference is that this time the war will be justified on the basis of fighting
not Communists, but drug traffickers – and only one gang of drug traffickers at
We will see the American people’s willingness to accept this ploy when the children
of the bull market begin to die. . . .
RICO Used in Wrongful-Termination Suit
by Mary Alice Robbins, Texas Lawyer
April 2, 2001
Depositions are under way in a suit pending in Fort Worth, Texas’ 17th District
Court that alleges a Lubbock man was fired by an American defense contractor in
Bosniabecause he blew the whistle on supervisors and co-workerswho bought
illegal firearms and engaged in buying and selling underage girls as domestic
help and sex slaves.
Ben Johnston alleges in Johnston v. DynCorp Inc., et al. that his former
employer breached his three-year contract when he was fired without cause last
Johnston worked as a civilian aircraft mechanic for DynCorp, which has a contract
with the U.S. Army to maintain military helicopters on the Comanche Base at Tuzla,
Bosnia. He accepted the contract with DynCorp in November 1998 and was earning
about $120,000 a year, according to the suit.
DynCorp, a Delaware corporation, oversees its international operations from its
offices in Fort Worth.
The suit filed last August by Lubbock lawyer Kevin Glasheen alleges that DynCorp
engaged in racketeering activities in violation of the Racketeer Influenced and
Corrupt Organizations Act and that Johnston was terminated because he refused
to commit an illegal act. If Johnston had not reported his fellow employees’
alleged unlawful activities, he could have been charged under federal law with
misprision of a felony, says Glasheen, a shareholder in Fadduol, Glasheen & Valles in
Glasheen says the issues addressed in the case involve “leading-edge stuff” in
employment law. “This is going to be a case of first impression,” he says.
Among the allegations in the suit are that the corporation and its employees
engaged in peonage and slavery, sexually exploiting children, dealing in obscene
material and procuring fraudulent identification documents.
The suit alleges that DynCorp employees purchased the passports of women and
girls from Serbian Mafia members who brought them into Bosnia from other
Eastern European countries. The corporation’s employees sometimes resold the
passports, alleges Richard Hardy, an associate with Fadduol, Glasheen who also
As alleged in the suit, Johnston told his DynCorp supervisor that co-workers were
buying women from the Mafia and was told “to mind his own business.” According
to the suit, Johnston reported the alleged activities to the U.S. Army Criminal
Investigation Command in March 2000 and his whistle-blowing allegedly led to his
termination and forced him and his Bosnian wife, Denisa, to flee the country.
Johnston and his wife were forced into protective custody by the CID for fear
that they would face retaliation by the Serbian Mafia and DynCorp employees, the
A plaintiff who brings a civil RICO conspiracy claim must show that he was injured
by an overt act in furtherance of the conspiracy. The U.S. Supreme Court ruled
last year in Beck v. Prupis that a plaintiff must prove the overt act that injured
him was an “act of racketeering.”
“In our situation, we’re claiming tampering with a witness,” Glasheen says.
“Mr. Johnston was terminated in order to preserve the status quo of DynCorp in
Bosnia, the sanctioned buying and selling of women, minor girls, firearms, forged
passports and frequent trips to whorehouses,” the suit alleges.
Glasheen says the suit raises the question of whether the termination of an
employee can be considered obstruction of justice under RICO. It also raises the
question of whether reporting fellow workers’ alleged illegal activities to law
enforcement constitutes refusal to commit an illegal act, he says.
Johnston alleges that the corporation’s conduct toward him was willful or
malicious, entitling him to recover punitive damages….
Charlene Wheeless, DynCorp’s vice president of communications, says the
corporation adheres to the strictest of ethical standards. “The idea that we,
DynCorp, would violate any law is incredible,” Wheeless says.
A DynCorp internal e-mail memo that the company turned over to Glasheen during
discovery alleges that a CID raid in June 2000 uncovered a videotape of the
corporation’s acting site manager in Bosnia having sex with two prostitutes. The
memo also alleges the raid turned up a machine gun that an employee purchased
from a suspected member of the Bosnian mafia.
A separate memo turned over during discovery from William S.A. Russ, the CID
agent in charge of the investigation, alleges the employee who purchased the gun
also admitted that he bought the woman who was living with him.
The June 2000 raid was not the first time that DynCorp employees had been
investigated for alleged involvement in organized crime, according to another e-mail turned over during discovery.
A corporation internal memo details a Bosnian National Police investigation in
August 1999 that allegedly linked five DynCorp employees to the purchases of
passports of women brought into the country illegally. The corporation fired all
five employees, the memo states.
Glasheen claims that DynCorp did not conduct an internal investigation of the
alleged wrongdoing and did nothing to clean it up….
Johnston and his wife have settled in Lubbock, where they operate a janitorial and
maid service, Glasheen says….
Its stock spiraling amid questions about possible sham trades, Dynegy Inc.
announced the resignation of its chief executive Tuesday in yet another top-level
shake-up of an energy trading company.
Chuck Watson, a co-founder of Dynegy, became the latest casualty of turmoil that
has spread through the industry since the Enron Corp. scandal broke last fall. He
led an abortive attempt to buy Enron as it was collapsing.
With his company’s stock down as much as 88 percent in a year, Watson stepped
down as both chief executive officer and chairman of the board.
El Paso Corp. – Yet another energy company (like Enron) going down the oil slick
September 24, 2002
Judge rules gas company
State now looking to recoup $4 billion from El Paso Corp.
The New York Times
WASHINGTON – An administrative law judge concluded yesterday that the El
Paso Corp. illegally drove up prices for natural gas in California during the
state’s power crisis in 2000 and 2001, the first time any federal regulatory
official has determined there was widespread manipulation of energy supplies.
In the ruling, Curtis L. Wagner Jr., the chief administrative law judge at the
Federal Energy Regulatory Commission, essentially validates the suspicions of
California officials that El Paso, the nation’s largest natural gas company,
withheld natural gas from the state, driving up the cost of electricity generated
by gas-fired turbines.
“El Paso Pipeline withheld extremely large amounts of capacity that it could have
flowed to its California delivery points,” Wagner said in the ruling. El Paso’s
actions significantly increased the price of natural gas flowing to California, he
The ruling sent shares in El Paso down 36 percent, falling to $7.51, down $4.16.
California officials and one of the state’s major utilities, which argued the case in
hearings at the energy commission, said they would seek to recover nearly $4
billion in what they contend were higher power and gas prices caused by El Paso’s
The company also faces a number of lawsuits, which will be aided if the ruling is
El Paso predicted that the ruling would be reversed. In a statement, the chairman
and chief executive of El Paso, William A. Wise, said: “We are disappointed that
today’s proposed decision does not recognize the substantial record evidence
supporting El Paso Natural Gas’ position that the pipeline was operated properly. . ”
In March 2001, The New York Times, as part of a reporting project with the PBS
program, “Frontline,” disclosed that internal El Paso documents showed senior
executives discussing a plan to give them more control of gas markets, including
the “ability to influence the physical markets” to benefit the company….
The name of one company in particular might have caught Wendy Gramm’s
attention: Enron. …
It’s a fairly large company, based in Houston. Of all the companies that wrote to
the CFTC (Commodity Futures Trading Commission) seeking the exemption (of
energy derivative contracts from federal regulation), Enron was the biggest donor
to Gramm campaigns, giving $34,100 over the years. . .
After taking actions that led to the exemptions from regulation, Wendy Gramm
(wife of Phil Gramm and chosen by Ronald Reagan to head the CFTC in 1987)
resigned on January 20, 1993, the day Clinton was inaugurated. Five weeks later,
she was named to Enron’s board of directors. The part-time position pays her
$22,000, plus $1,250 for each meeting she attends. In April 1993 the
commodities commission voted 2 to 1 against regulating the business…
In its 1992 annual report, Enron calls itself the “manager of the largest portfolio
of fixed-price and natural-gas derivative contracts in the world.” The company
also has roughly $4.5 billion in interest-rate swaps, another exotic transaction that
Wendy Gramm helped to exempt from deregulation while she was at the CFTC…
[A Catbird Note: Bishop Estate’s infamous McKenzie Methane deal was done in
1989 — during Wendy Gramm’s tenure as head of the CFTC. Hmmmm.]
* * *
ENRON HAS ANOTHER DISTINCTION — IT IS THE#1CAREER
PATRON OF GEORGE W. BUSH, JR.
Exxon– From the Progressive Populist, by A.V. Krebs:
In 1991 the Exxon Corp. made a secret deal with seven Alaska seafood processors
whereby the seafood processors settled claims with Exxon for about $70 million,
but then promised to return to Exxon any money they received from awards of
punitive damages. After the jury awarded $5 billion in such damages against
Exxon, the nation’s largest oil company, the seven processors put in claims totaling
$745 million, or 15 percent of the $5 billion.
The seafood processors, however, had previously and privately agreed to “kick
back” the $745 million to Exxon if their claims were upheld, and in turn receive
from Exxon $12.4 million.
One of those seafood processors was Trident Seafood Corp., at the time a wholly
owned subsidiary of the ConAgra Corp. Presiding Federal Court Judge H. Russel
Holland of the U.S. District Court which tried the case, in a June 13, 1996,
decision, described the arrangement as an “astonishing ruse,” saying Exxon had
deceived the jury and acted as “Jekyll and Hyde” by “behaving laudably in public
and deplorably in private.”…
A. V. Krebs is director the Corporate Agribusiness Research Project. Contact him
at P.O. Box 2201, Everett, Washington 98203-0201; phone 206-258-5345; or e-mail: avkrebs@earthlink.
Halliburton – Vice President Dick Cheney’s old company.
April 9, 2002
Halliburton considers dumping
Andersen as auditor
DALLAS – Halliburton Co., which has hired Arthur Andersen LLP to review its
books since 1946, said today it is interviewing other audit firms because of “recent
extraordinary events” at the embattled accounting giant.
However, Halliburton said it would not be ready to ask stockholders to ratify a new
auditor at the oil-services company’s annual meeting May 15.
Halliburton said it paid Andersen $7.2 million for audit work and $12.1 million for
other consulting in 2001. In 2000, it paid Andersen $51.5 million.
Halliburton also said in a filing with the U.S. Securities and Exchange Commission
that chairman and chief executive David J. Lesar’s compensation rose 55 percent
last year to $7.2 million. That included a $1.1 million salary, a $2.2 million bonus
and $3.38 million in stock.
Lesar also got options to buy more than 154,000 shares by 2011 that would be
worth $3 million to $7.8 million if the shares gain 5 percent to 10 percent per
Halliburton’s stock price fell 65 percent last year.
The company’s compensation committee said Halliburton “achieved outstanding
operating results” in 2001 and executives met or surpassed performance goals,
even though concern about asbestos claims weighed heavily on the stock.
Lesar has led the Dallas-based company since Vice President Dick Cheney left to
join the Republican ticket in August 2000.
Andersen faces a criminal charge of obstructing justice for shredding documents
at another client, bankrupt Enron Corp. A senior auditor at the firm was expected
to plead guilty Tuesday to a single criminal obstruction charge and cooperate with
the government’s investigation of Andersen and Enron….
* * *
May 7, 2002
Halliburton profits fall $87 million
DALLAS — Oil-services provider Halliburton Co. reported Tuesday that its profits
and revenue fell in the first quarter as drilling activity slowed and the company
spent money on asbestos claims.
Dallas-based Halliburton said it earned $22 million, or 5 cents per share, compared
with $109 million, or 25 cents per share, in the same period a year ago.
Excluding what the company termed one-time gains and losses, including a $28
million after-tax charge for asbestos claims, Halliburton would have earned $83
million, or 19 cents per share….
Chairman and CEO David Lesar said Halliburton’s results were in line with other
oil-services companies and were down because of weaker drilling activity in North
America. He said the company’s engineering and construction business showed
“solid improvement” over last year.
Halliburton is splitting the energy and construction groups into separate, wholly
owned subsidiaries, a move some analysts believe could foreshadow an attempt to
sell the construction group….
HALLIBURTON Co. executives in Texas say they will co-operate with a Securities
and Exchange Commission investigation of the accounting method the company
uses to report cost overruns on construction jobs.
Executives of the oilfield services company said yesterday the SEC had launched a
preliminary investigation. Officials say they expect to receive a formal agency
request for documents or a subpoena in the next few days.
Cedric Burgher, vice-president of investor relations, told The Dallas Morning News
yesterday that the SEC’s concerns revolve around accounting changes that the
company made in 1998.
The company said it believes the SEC’s interest stems from a story in The New
The Times story said the Dallas-based company was counting cost overruns on
construction projects as additional revenue, even before the customer agreed to
pay for the overruns.
Burgher said the company believes it adhered to generally accepted accounting
Vice-president Dick Cheney was chairman and chief executive of the world’s
largest oil field services company from 1995 to 2000.
Halliburton announced on Tuesday that it settled 30 lawsuits pending against it in a
New York federal court.
The lawsuits sought millions of dollars in damages from those with lung cancers
allegedly caused by asbestos exposure.
The company declined to release terms of the settlements.
In recent months, Halliburton lost verdicts totaling more than $150 million in
* * *
July 22, 2002
Halliburton to take
large asbestos charge
DALLAS, Texas (Reuters) – Halliburton Co. (HAL) said on Monday it will take a
“substantial” charge against second-quarter earnings to cover future asbestos
claims, and announced more than $250 million in additional losses and one-time
Shares of the Dallas-based oilfield services and engineering company fell as much
as 14.7 percent to $9.85, their lowest level since hitting a 15-year low of $8.62 in
January. The shares closed $1.58 or 13.7 percent lower at $9.97.
Halliburton, led from 1995 to 2000 by U.S. Vice President Dick Cheney, said it will
disclose the full extent of the asbestos charge in its quarterly earnings report on
The company also said its KBR unit, formerly known as Kellogg Brown & Root, will
record a pretax loss of $119 million on an offshore engineering and construction
job in the second quarter, equivalent to about 25 cents per share.
Bear Sterns Analyst Robin Shoemaker said this was a “whopping loss” on a single
project and indicated that Halliburton had bid too aggressively for the work and
thus forfeited any profits.
Questions about Halliburton’s accounting for cost overruns and disputed claims
relating to construction projects led earlier this year to a probe by the Securities
and Exchange Commission.
HALLIBURTON, CHENEY SUED
Halliburton and Cheney were recently sued by the Judicial Watch group which
alleged that the company overstated its revenues by as much as$445 million over
The company and the White House both said the Judicial Watch case was
meritless. Halliburton says it has applied accounting rules correctly and is
cooperating with the SEC probe.
Halliburton said it will no longer pursue offshore engineering and construction
contracts that require it to complete a project for a fixed price, but will instead
seek agreements under which it is reimbursed for its costs. . . .
Halliburton also announced a second-quarter restructuring charge of $56 million
before taxes, or 8 cents per share, with further such charges of $20 million
expected later this year. . . .
Since 1976 some 499,000 asbestos claims have been filed against Halliburton and
its subsidiaries, of which 292,000 were still unresolved at the end of the first
quarter of 2002.
The company said it has settled or disposed of 207,000 claims at an average cost
of $309 per claim, after deduction of money it expects to recover from its
Hawaiian Electric Industries Inc. – From Pacific Business News, 11/22/99, by
Jacob Kamhis: Suit Filed Over HEI China Plant.
Hawaiian Electric Industries Inc. is mired in a lawsuit over a $100 million power
plant in Inner Mongolia, China.
United Power Pacific Co. Ltc., Finrich Ltd. and Brightwise Ltd. have sued HEI
and its subsidiary, HEI Power Corp., according to a 1st Circuit Court complaint.
Allegations include HEI’s unauthorized change in contractor and its breaches of a
shareholders’ agreement that render plaintiffs’ investments worthless.
Hong Kong-based United Power Pacific and Virgin Islands-based affiliates Finrich
and Brightwise seek general, special and punitive damages.
HEI is a Hawaii-based publicly held company in energy and banking. In the last few
years, it has seen little growth in Hawaii’s sluggish business climate and has
invested in the Philippines, Guam and China.
The gas-and-coal-fired electrical power plant in China was to be completed in 2000.
But now it’s less clear when the lights will be switched on.
Prior to 1994, United Power Pacific and state-owned Baotou Iron and Steel Co.
Ltd formed the Baotou Tianjiao Power Co. Ltd, a joint venture 75 percent owned
by United Power Pacific and 25 percent by the steel company.
The venture obtained government permits and negotiated contracts for design,
construction and sale of electrical output.
In April 1998, United Power Pacific contacted HEI about participating. The
condition, however, was for United Power Pacific to manage and control “the
delicate, and at times political, relationships” with contractors, the steel company
and the Chinese government.
A shareholders’ agreement was signed with HEI China–a “special purpose” company
HEI set up. The partners formed a venture and based it in Mauritius, an Indian
Ocean island nation east of Madagascar.
By July 1998, Brightwise became construction manager. It was to appoint
contractors, advisers and expedite development. But delays in the project
required an extension of development and HEI and HEI Power began violating the
shareholders’ agreement, according to the suit.
Around late March, HEI China and United Power Pacific began negotiating a buyout
of United Power Pacific’s interest in the venture. But HEI Power and HEI China
eventually informed United Power Pacific it could not close the deal due to “legal
Brightwise alleges it is owed $490,438. The construction management contract
was suspended in June and plaintiffs have received nothing in return, according to
Meanwhile, HEI China has hired another contractor to furnish certain services and
labor for the venture.
Richard McQuain, president and chief executive officer of HEI Power, says the
company does not believe the suit has any merit and it will vigorously counter the
John Y. Yamano, plaintiff’s attorney with McCorriston Miho Miller Mukai (the firm
which defended the ex-Kamehameha Schools Bishop Estate trustees), declined
Investcorp – Investcorp is a leading global investment group with offices in
London, New York and Bahrain. Since 1982, it has completed transactions in North
America and Western Europe, with a total acquisition value of approximately $19
Investcorp and its clients have investments in U.S. companies including Stratus
Technologies, The William Carter Company, Jostens, Inc., Werner Holdings,
TelePacific Communications and Independent Wireless One.
U.S. investments that have been taken public by Investcorp include Prime Service,
Tiffany & Co., Circle K Corporation, Saks Fifth Avenue and CSK Auto Corporation.
In Europe, Investcorp and its clients currently have investments in Avecia
(formerly Zeneca Specialties), Gerresheimer Glas, Polestar, Welcome Break,
CityReach, and Helly Hansen.
Mr. Fern is a graduate of Willamette University in Oregon with a Bachelor’s
degree in Mathematics. A Certified Public Accountant, Mr. Fern worked for
PricewaterhouseCoopers (formerly Coopers & Lybrand, CPAs) in their auditing
division. In 1983, Mr. Fern joined Kamehameha Schools Bishop Estate (KS), the
largest private landowner in the state of Hawaii and an education trust, as their
Internal Auditor. In 1991, in his role as Internal Auditor, he became involved in
KS’ investment in coalbed methane projects in Alabama, Colorado, and New Mexico.
In 1996, he took over responsibility for KUKUI, INC., a wholly owned taxable
subsidiary of KS, which had been assigned KS’ interest in the coalbed methane. . . .
Steve Sandlin – Vice President Land
Mr. Sandlin is a 1974 graduate of the University of Oklahoma with a BBA degree in
Petroleum Land Management. A Certified Professional Landman, Mr. Sandlin began
his professional career as a Petroleum Landman with Amoco Production Company in
Houston, Texas, in their Texas Coast (east and south Texas and north Louisiana)
District. In 1977 he joined American Petrofina Company of Texas. As the
Assistant Land Manager, he negotiated the acquisition of exploration prospects
submitted to Fina by the industry in all of the major geologic basins in the lower
forty-eight states and offshore Gulf of Mexico. Mr. Sandlin was employed by
Harry H. Cullen, Oil Operator, a small Houston exploration company, in 1981. He
supervised all land department activities connected with exploration prospects in
the Texas and Louisiana Gulf Coast, South Texas and Oklahoma. In 1992 he was
assigned to Quintana Petroleum Services, Inc., a Cullen family owned operating
company, and named the Project Land Manager over a coalbed methane project in
which KUKUI, INC. owns an interest involving wells located in Alabama, Colorado
and New Mexico. In 1995 Steve joined KUKUI Operating Company (KOC) and in
1998 was made Vice President-Land of KOC and Vice President of KUKUI, INC.
John W. Wessels – Vice President Operations
Mr. Wessels is a licensed professional engineer with BS and MS degrees in
Petroleum Engineering from the University of Texas at Austin. Mr. Wessels has
over twenty-seven years of experience in the upstream side of the oil and gas
industry. His responsibilities have included various engineering and management
positions withQuintana Petroleum Corporation, President of WPS, Inc., Vice
President-Operations of KUKUI Operating Company and Vice President of KUKUI,
INC. . . .
Larry K. Strider – District Operations Manager
Mr. Strider is a 1981 graduate of Auburn University with a BS degree in
Agricultural Engineering. He has over nineteen years of experience primarily in the
Southeastern and Gulf Coast areas. Mr. Strider worked as a field engineer for
Halliburton Services(U.S. Vice-Pres. Dick Cheney’s company)for six years in the
Laurel, Mississippi and Mobile, Alabama districts. In 1986 he joined Graves Well
Drilling Company as Operations Manager supervising drilling and workover activities
in the coalbed methane industry in the Black Warrior Basin. He also worked on
industrial and community water well systems and waste disposal well projects. In
1990 Larry joined AMPCO Resources and operated a sucker rod pump and supply
store. He joinedQuintana Petroleumin 1992 and KOC upon inception in 1995. . . .
David A. Petty – Manager of Regulatory Affairs
Mr. Petty is a graduate of Sam Houston State University in Huntsville, Texas, with
a BBA in Accounting and is a CPA with the state of Texas. Mr. Petty has 20 years
experience in the oil and gas industry in the areas of accounting, auditing, finance
and regulatory. Mr. Petty began his career with Coastal Corporation from 1981-1987. In 1987 he began his private accounting practice with Petty & Campise.
From 1988-1995 David joinedQuintana Petroleum Companyas an Internal
Auditor, Accounting Supervisor and Assistant Treasurer. In 1995 David moved to
KUKUI Operating Company as Manager of Regulatory Affairs. David has served as
President of the Petroleum Accounting Society of Houston from 1993-1994,
Chairman of the Coalbed Methane Association of Alabama from 1998-2000,
Chairman of the COPAS Education Committee from 1990-1993 and is a current
member of the Texas Society of CPA’s.
* * *
Coincidently, one of the ‘Distinguished Visitors’ taking a taxpayer-funded joyride
on the ‘USS Greeneville’at the time it accidently sank the ‘Ehime Maru’wasHELEN CULLEN, of Houston, Texas.
The Cullen Family owns Quintana Petroleum.
According to http://www.opensecrets.org, they are big backers of both G.W. Bush
and the GOP.
HELEN CULLEN comes from a family that has business links with Clinton-pardoned
felon MARC RICH.
Cullen’s father-in-law, ROY CULLEN, is the owner of Quintana Petroleum of
Houston, which, the New York Daily News reports, created a business partnership
in Argentina with Rich’s Suedelektra Holdings during the 1980s….
The Cullen family has donated tens of thousands of dollars in soft money to the
Republican Party. And ROY CULLEN donated $1,000 to GEORGE W. BUSH’s
Los Alamos National Laboratory – The top-secret national laboratory where
national security is paramount.
November 18, 2002
Report: $3 Million in Lab Property Lost
LOS ALAMOS, N.M. – (AP) – Nearly $3 million worth of items owned by Los
Alamos National Laboratory have disappeared or were reported missing over a
three year period, according to a published report.
The lab’s system of reporting lost items “is conducive to covering (up) for items
that are actually stolen,” said the internal report, prepared within the lab’s Office
of Security Inquiries in March.
The author’s name was not on the report, which was obtained by the Albuquerque
Journal for a story in yesterday’s editions. It outlined missing items ranging fromcomputers to a fork lift that disappeared between 1999 and 2001.
Lab spokeswoman Linn Tytler said it goes through a rigorous accounting process
each year by both lab officials and the Department of Energy.
A U.S. House committee is investigating allegations that Los Alamos employees
used lab credit cards to make illegal purchases.
McKenzie Methane – A Texas methane gas company in which Bishop Estate was
the majority investor– AND IN WHICH THE ESTATE’S TRUSTEES, MANAGERS,
FRIENDS AND OTHER INSIDERS CO-INVESTED THEIR PERSONAL FUNDS,
THEN LET THE ESTATE BAIL THEM OUT WHEN THE DEAL FIZZLED.
Pacific Gas & Electric – Bankrupt California energy company that had dealings
with Enronin the California energy crisis scandals.
July 19, 2002
White Defends his Record
as Executive with Enron
by Matt Kelley, Associated Press
WASHINGTON – Army Secretary Thomas White said yesterday he is “appalled
and angered” by the scandals that drove Enron Corp. into bankruptcy but denied
any role in or knowledge of wrongdoing while he was an Enron executive.
In testy exchanges with skeptical senators, White repeatedly said he had played
no part in manipulating California energy prices and knew nothing of other
improprieties while he helped run an Enron subsidiary. . . .
Although White said after the hearing he had no plans to resign his Pentagon post,
Sen. Barbara Boxer, D-Calif., urged him to do just that in a letter late yesterday.
“I believe it is in the best interest of the country for you to step down as the
Secretary of the Army as I believe today’s hearing will spark more investigations
and more distraction from your crucial duties,” Boxer wrote.
Boxer said she was not satisfied with White’s testimony: “I found him evasive,
argumentative, not contrite about what happened, not forthcoming.” . . .
Most of yesterday’s questioning concerned the electricity crisis in California and
neighboring states in 2000 and 2001 that caused soaring utility bills, rolling
blackouts and the bankruptcy of Pacific Gas and Electric.
Boxer and other senators grilled White about trading strategies in California’s
electricity market detailed in December 2000 Enron memos. The memos described
several schemes that critics say took advantage of California’s power crisis,
including the one that involved White’s Enron subsidiary, Enron Energy Services….
* * *
Pacific Gas files for Chapter 11
SAN FRANCISCO (AP) ——Pacific Gas and Electric, California’s largest utility,
voluntarily filed for Chapter 11 federal bankruptcy protection Friday despite
months of efforts by state officials to bail out the cash-starved company.
Pacific Gas, a subsidiary of PG&E Corp., said it had run up an $8.9 billion deficit
buying electricity as of Feb. 28. Along with other California utilities, it has been
pinched by skyrocketing wholesale power costs and the state’s 1996 deregulation
As of March 29, the utility —— which has 13 million customers —— had $2.6 billion
in cash and outstanding bills of $4.4 billion….
The company provides natural gas and electric service to approximately 13 million
people in Northern and Central California. It has 21,500 employees.
The bankruptcy filing came one day after Gov. Gray Davis, in a statewide
address, proposed relieving utilities’ debts by giving them a share of a record
rate increase approved last week and by continuing to negotiate the state’s
purchase of their transmission lines.
“It comes as a complete surprise,” Davis spokesman Steve Maviglio said.
Davis aides were meeting with the attorney general’s office and bankruptcy
lawyers retained by the state to discuss the implications of the filing, Maviglio
Filing for bankruptcy court protection allows the utility to protect its assets from
creditors, but could devastate PG&E Corp.’s already shellshocked shareholders and
Consumer activists were quick to pounce on the news as more evidence that the
utility is not getting enough help from its parent company, which has profited
during California’s energy crisis.
“The parent company has $30 billion, much of which it has siphoned out of the
utility coffers. It would have bailed the utility out,” said Harvey Rosenfield of the
Foundation for Taxpayer and Consumer Rights.
Neither the parent company, PG&E, nor any of its other subsidiaries, including its
National Energy Group, have filed for Chapter 11 reorganization or are affected by
the utility’s filing.
PG&E Corp. said its subsidiary was forced into bankruptcy because of
“unreimbursed energy costs, which are now increasing by more than $300 million
per month,” state regulatory decisions that are hurting the company and “the now
unmistakable fact that negotiations with Gov. Gray Davis and his representatives
are going nowhere.”
PGE&E and the state’s other large utilities, Southern California Edison and San
Diego Gas & Electric, say they have lost more than $14 billion since June because
of soaring wholesale costs. SoCal Edison and PG&E are barred under the state’s
deregulation law from raising rates to recover the costs and are having trouble
buying power and natural gas because of poor credit.
In his five-minute televised speech Thursday evening,Davis said rate increases
are needed to help pay for power purchased by the state on behalf of the utilities.
The purchases havecost taxpayers$4.7 billion since January….
* * *
April 11, 2000
Questioning Whistle-Blower’s ‘Delusions’
By Mathew L. Wald, New York Times
WASHINGTON — The Department of Labor has concluded that the Pacific Gas
and Electric Company maneuvered to have psychiatrists find “paranoid delusions”
in a veteran manager because he complained publicly about safety problems and
management inaction at the Diablo Canyon nuclear power plant.
But theNuclear Regulatory Commission says there is no evidence of any
retaliation against the manager, Neil J. Aiken, who was a shift foreman from
1983 until he received the diagnosis in 1998, and the commission does not believe
that the incident or the Department of Labor report, which Mr. Aiken’s lawyer
recently provided to a reporter, will make others reluctant to come forward with
safety issues they observe on the job.
The utility company says it had only public safety in mind when it sent Mr. Aiken,
now 54, to psychiatrists for an evaluation. It later fired him, although his lawyer
and company officials differ on the circumstances.
Four operators and managers at the plant said in separate interviews that they
believed that Mr. Aiken was mentally sound and was fired because he embarrassed
executives. Two said they had been trained by the utility to spot mental instability.
For years, Mr. Aiken complained about problems at Diablo, near San Luis Obispo,
Calif., where he had worked since before the plant was completed. In April 1998,
he went to a shareholders meeting and distributed a paper detailing his criticism.
Soon after, the utility sent him to two psychiatrists, under a program that the
Nuclear Regulatory Commission requires it to maintain. One described Mr. Aiken,
who went into the nuclear industry after learning electronics in the Marine Corps,
as suffering from a “delusional disorder, persecutory type.” The psychiatrists
declared Mr. Aiken a threat to security, and the company revoked his security
clearance. Late last year, it fired him.
But a report issued in November by the Labor Department, which enforces laws
against harassing whistle-blowers, suggested that the real problem was that Mr.
Aiken had publicly embarrassed his superiors. Notes by one psychiatrist, the Labor
Department report said, show that the doctor’s conversations with utility
executives before he did his work were “more about how to remove Mr. Aiken
from his position than to make a fair, unbiased evaluation of Mr. Aiken’s mental
A Labor Department investigator, acknowledging his own lack of training in
psychology, said in the report that the diagnosis of a delusional disorder “appears
unreasoned considering the fact that the evaluators never considered that other
employees had complained about the same problem, there existed a culture where
employees were reluctant to voice safety complaints, and the evaluators never
checked to see if his thoughts were delusional.”
A critical point of contention was the safety of the new circuit breakers the
company installed because the old ones allowed electrical arcs. The new ones did
not, but several operators said they created other problems because they did not
fit in easily with the old equipment.
The report found that company managers told the psychiatrists that Mr. Aiken was
unable to accept that “numerous investigations” had rejected his position on circuit
breakers, but that when the company gave this information to its psychiatrists,
the Nuclear Regulatory Commission was still investigating the devices.
The commission disputed this but said its report was secret.
“The N.R.C. advertises that you don’t have to be afraid of retaliation,” Mr. Aiken
said in a telephone interview. “But the fact is that no one can stop the corporation
from doing what they want to do to you.”
The chief nuclear officer of Pacific Gas and Electric, Gregory Rueger, said the
company’s need to protect public safety conflicted with its need to avoid the
appearance of retaliation, but that the former was more important.
“There are times you deal with Neil that he’s a very reasonable individual,” Mr.
Rueger said in a telephone interview. But at other times Mr. Aiken would change
the details of his complaint, Mr. Rueger said. He added that employees still filed
Mr. Aiken, unemployed, recently reached a settlement with the company that
included early retirement. As a result, the utility’s appeal of the Labor
Department report will not be heard, leaving the differences between the two
“We would not be properly husbanding the taxpayers’ money if we spent additional
resources investigating,” said Gary F. Sanborn, an enforcement officer for the
Nuclear Regulatory Commission.
The commission said Mr. Aiken had made 50 complaints to the agency, of which
about 18 were well founded, a higher batting average, officials said, than that of
most complainants. The agency cited Pacific Gas and Electric for 2 low-level
violations and told the company to fix 16 other problems.
Forty of Mr. Aiken’s co-workers took the unusual step of petitioning the Nuclear
Regulatory Commission for his reinstatement.
.Other countries had felt the lash of the petroleum industry as well. Mexico is a
classic case of petroleum companies foreign policy-making ability which
transcended national boundaries and cost American consumers a huge fortune. Oil,
it seemed, was the foundation of a new economic order, with undisputed power in
the hands of a few people hardly known outside of the petroleum industry.
The “majors” have been referred to a number of times. This is shorthand for the
major oil companies that form the most successful cartel in the history of
Exxon (called Esso in Europe), Shell, BP (British Petroleum), Gulf, Texaco,
Mobile and Socol-Chevron. Together they form part of a major network of
interlocking, interfacing banks, insurance companies and brokerage houses
controlled by the Committee of 300, which are hardly known outside their circle.
The reality of the One World Government, or New World Orderupper level
government, brooks no interference from anyone, no matter who it might be —
even powerful national governments — the rulers of nations great and small,
corporations or private people. These supranational giants have expertise and
accounting methods that have flummoxed the best brains in government, out of
whose reach they remain.
Through diplomacy by deception it seems the majors were able to induce
governments to parcel out oil concessions to them, no matter who opposed it.
John D. Rockefeller would very much have approved this closed shop, run for the
last 68 years by Exxon and Shell. It is evident from the vastness and the
complexity of their operations … that the petroleum industry is one of the most
powerful components that make up the economic operations of the Committee of
In secret, the Seven Sisters clubhas plotted wars and decided amongst
themselves which governments must bow to their depredations. When trouble
arises … it is only a matter of calling upon the right air force, navy, intelligence
service to solve the problem and get rid of the “nuisance.” . . .
The Seven Sisters became a government within a government . . .
If one would like to know American and British foreign policies for Saudi Arabia,
Iran or Iraq, one need only study the policies of BP, Exxon, Gulf Oil and ARAMCO.
What is our policy in Angola? It is to protect Gulf Oil properties in that country,
even though it means supporting an avowed Marxist….
Is any other group so exalted, so favored with showers of tax concessions that run
into billions of dollars per annum? I am often asked why it is that the American
domestic petroleum industry, once so bustling and full of promise, went into a
The answer, in one word, is GREED.
For this reason, domestic production of oil had to be curtailed, in case the public
should ever discover what was going on. This knowledge is much more difficult to
obtain when dealing with foreign operations. What does the American public know
about what goes on in the oil politics of Saudi Arabia? Even while making record
profits, the petroleum industry demands and gets additional tax breaks, both open
— and hidden — from public view.
Have the citizens of the United States benefitted from the huge profits made byExxon, Texaco, Chevron andMobile (before it was sold)? The answer is no,
because most of the profit was made “up-stream” — that is, outside of the United
States, which is where the profits were kept, while the U.S. consumer paid ever-rising prices for gas at the pumps….
Rockefeller’s main area of concern became Saudi Arabia. The oil companies, by
various stratagems, had entrenched themselves with King Ibn Saud. The king,
worried that Israel would one day threaten his country and strengthen the Israeli
lobby in Washington, needed something that would give him an edge. The State
Department, at the urging of the Rockefellers, said it could only follow a pro-Saudi
polity without upsetting Israel by using Exxon (ARAMCO) as a front. This
information was given to the Senate Foreign Relations Committee. It was so
sensitive that committee staffers were not even allowed to see it.
Rockefeller had in fact paid only a small fee, $500,000, to secure a major oil
concession from Ibn Saud. After considerable diplomacy, a deception was worked
out — a deception which cost the American taxpayers at least $50 million in its
What came out of the discussions between Exxon and Ibn Saud is known as “the
Golden Gimmick” in the inner sanctums of the Rockefeller board rooms. The
American oil companies agreed to pay a subsidy to the Saudi ruler of not less than
$50 million a year, based on the amount of Saudi oil pumped. The State
Department would then allow the American companies to declare such subsidy
payments as “foreign income tax,” which Rockefeller, for example, could deduct
from Exxon’s U.S. taxes.
With production of cheap Saudi oil soaring, so did the subsidy payments soar. This
is one of the greatest scams perpetrated upon the American public. The bottom
line of the plan was that huge foreign aid payments were made annually to the
Saudis under the guise of “subsidies.” When the Israeli government uncovered the
scheme, it too, demanded “subsidies” which today amount to $13 billion per annum
— all at the expense of the American taxpayers.
Since the American consumer actually helps pay for cheaper imported crude oil
than domestic crude oil, shouldn’t we benefit from this arrangement through
cheaper gasoline prices at the pumps? . . . No way. Apart from geopolitical
considerations, “the majors” are also guilty of price fixing. The cheap Arab oil
for instance, was fixed at the higher domestic crude oil price when imported into
the United States by a subterfuge known as “phantom freight rates.”
According to hard evidence presented to the Multi-national Hearings in 1975, the
major oil companies … made 70 percent of their profits abroad, profits which could
not be taxed at the time. With the bulk of their profits coming from “up stream,”
the petroleum industry was not about to make a major investment in the domestic
oil industry. As a consequence, the domestic oil industry began to decline. Why
spend money on the exploration and exploitation of domestic oil when it was theirs
for the asking in Saudi Arabia— at a cheaper price than the local product and at a
far bigger profit? The unsuspecting American consumer was and is being shafted,
without knowing it….
The immorality of this gross deception is that, had the big oil companies … not
been so greedy, they could have produced domestic oil which would have made our
gasoline prices the cheapest in the world. In my opinion, the manner in which this
diplomatic deception was set up between the State Dept and Saudi Arabia, makes
the State Dept a partner to a criminal enterprise….
The policies of the petroleum companies cost the American taxpayer billions of
dollars in additional taxation and billions of dollars in excess profits at the pumps.
The petroleum industry, and, in particular, Exxon, has no fear of the U.S.
government. Thanks to the control exercised by the permanent upper-level
parallel secret government of the Council on Foreign Relations, Rockefeller is
untouchable. That enabled ARAMCO to sell oil to the French Navy at $0.95 per
barrel, while at the same time the U.S. Navy was charged $1.23 per barrel….
TAGGING THE BUZZARDS
Having trouble keeping track of all the buzzards in
the midst of the merger mania? Here’s help…
The U.S. Trade and Development Agency – From Oil & Gas Journal, 8/29/00:
US TDA To Assist Nigeria With Energy
During US President Clinton’s trip to Nigeria, US Trade and Development Agency
Director J. Joseph Grandmaison announced Aug. 27 in Abuja the agency’s approval
of $1,605 million in grant assistance[aka US taxpayers’ money] for priority
infrastructure projects in the country. These grants are the first offered since
TDA officially opened in Nigeria following the country’s successful transition to a
democractically elected government in 1999.
Among the grants are two related to the energy industry. The first, a $400,000grant to Nigeria Gas Corp., will provide funds for a feasibility study on the
domestic use of natural gas, the country’s dominant energy resource. . . . Also in
the energy sector, TDA announced its recent approval of a $360,000 grant to the
Warri Refining & Petrochemical Company to fund a premium gasoline and aviation
fuel feasibility study in Nigeria….
United States Enrichment Corp. – A privatized U.S. Government agency
formed to enrich fuel for nuclear power plants, but ending up enriching insiders at
the expense of taxpayers and national security.
April 24, 2000
THE ART OF THE (RAW) DEAL
A government-owned company goes private.
Guess who gets rich?
By Bruce B. Auster, U.S. News and World Report
It was the largest privatization of a government agency since the sale of Conrail
more than a decade ago. Al Gore hailed it as a model of “reinventing government.”
But last week, things weren’t looking so peachy. The little-known corporation that
enriches fuel for nuclear power plants found itself before a testy Congress,
confronting charges of self-dealing, conflict of interest, and jeopardizing national
The troubles of the United States Enrichment Corp. (USEC) began several years
ago. The federal Department of Energy found itself saddled with two sprawling
uranium plants, in Ohio and Kentucky, that originally produced uranium for the
Pentagon’s nuclear bombs. But with the end of the Cold War, the plants just sold
fuel to power plants. So Congress and the Clinton administration arranged to sell
the enterprise to a private corporation or to sell stock to the public.
The plants could be run more efficiently, the theory went, and U.S. taxpayers
could pocket billions.
The sale of USEC, through a 1998 public offering, yielded $1.9 billion – just about
as predicted. But virtually nothing else since then has gone according to script.
A big part of the plan was for USEC to buy 500 tons of Russian atomic-bomb
fuel and transfer it to the United States, out of harm’s way. But the process
has been disrupted twice, and acquisitions are behind schedule. Meanwhile, USEC
won a $325 million bailout from Congress,and some 1,350 company workers will
lose their jobs.
Stockholders, unsurprisingly, have seen the value of their shares fall through the
Unocal – From AFL-CIO Executive Pay Watch – In 1998, Unocal reduced its
workforce by 6.1%, while the top five most highly paid executives received salary
increases of 22.2% . . .
Unocal is the last major American company still doing business in Burma. In
addition to using torture, forced labor and abductionsto maintain its rule, the
Burmese government has killed thousands of protesters and jailed countless
others. For those reasons, the federal government has prohibited any new
investments in Burma by U.S. companies.
Unocal is helping the military rulers of Burma build a 416-mile natural gas pipeline
with the use of 10,000 slave laborers, according to a lawsuit filed by Burmese
refugees against the company in California….
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