BIRDS ON THE
Sightings from The Catbird Seat
~ o ~
ENERGY AND WAR: CHENEY’S
DELUSIONS OF POWER
By Paul Krugman, New York Times
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
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 market manipulation.
No more: The new report concludes that market manipulation was pervasive, and offers
a mountain of direct evidence, including phone conversations, e-mail and memos.
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 wrong?
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
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 off.
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 getting bigger.
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
subsidies and tax breaks to 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 connections.
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
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
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 bankruptcy by 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 capitalists gain 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 system.
Of course, crony capitalism is 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....
~ ~ ~
For more, GO TO > > > Aloha, Harken Energy; The Carlyle Group: Birds that Drink from
Cesspools; Dirty Money, Dirty Politics & Bishop Estate; Hawaiian Airlines; Nests in the
Pentagon; The Myth and The Methane; The Rand Corporation; The Strange Saga of
December 31, 2004
Gas Price Scheme Alleged
State official seeks damages from Reliant
By John G. Edwards, Las Vegas Review-Journal
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....
For more, GO TO > > > I Sing the Hawaiian Electric; The Story of Enron
< < < FLASHBACK < < <
October 28, 2002
THE RACE FOR IRAQ’S OIL
By Paul Klebnikov, Forbes
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,” Chalbi says.
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....
THE FINGERPRINTS OF CONSPIRACY
From Rule by Secrecy, by Jim Marrs
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 get
– 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
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 then
Secretary 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 cartel.
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 reclaim it.
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
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 America.”
“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 Gulf
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 Iran.
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 credit
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 conflict.
“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 Gulf War.
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
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 tab.
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 Surprise scandals.
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
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 Investment Office.
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
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 partner.
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 Clinton also had refused to allow such
inspections in the United States – a refusal greeted with general approval by the
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
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
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 Syndrome caused 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....
– Copyright 2000, by Jim Marrs
For more, GO TO > > > Aloha, Harken Energy
< < < FLASHBACK < < <
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
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
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
Brisard and Dasquie draw a portrait of closest aides to President Bush, linking them to
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 of Halliburton, 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.)
< < < ANOTHER FLASHBACK < < <
From Diplomacy by Deception, by Dr. John Coleman (copyright 1993):
The Brutal, Illegal Gulf War
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 “advertising agencies.”
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 families.
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 Abbasid Dynasties.
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 first place....
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 leave Iraq.
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 intelligence....
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 an observer....
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 independence....
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 the Committee 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 oversight.
"This gathering danger requires the most urgent, deliberate and decisive response,'' he
"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 candidate.
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 with Baghdad.
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 workers worldwide.
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 humanity.
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
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 contest.
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 in Iraq.
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, and
General 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 coffers.
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
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 are.”
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 staff.
The companies include Enron Corp., Southern Co., Exelon Corp., BP, TXU Corp,
FirstEnergy and Anadarko 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 fortunes....
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
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
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 the
Chemical 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 immediately."
Doyle Coakley, Chairman of the Citizens Coal Council and a resident of West Virginia,
"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
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.
> 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 and EPA
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
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
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 drilling.
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 Iraq.
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 from
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.
For more on Gale Norton, GO TO > > > The Bureau of Indian Affairs
Oil and Gas Tax Breaks:
$2.4 billion a year
excerpted from the book
From Take the Rich Off Welfare
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 forever.
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
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
(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 world.)
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.
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 $3.65 billion.....
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
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 to appeal.
"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 appeal.
"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 TVA’s jurisdiction.
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.
For more, GO TO > > > Aloha, Harken Energy!
American Electric Power - The nation’s largest power generator. (Everybody pray
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 fiscal
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
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 retirement plans....
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 1999.”
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 corporate cabal.
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 offending
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 to
"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 time."
A second December 1989 DEP memo writer asked a superior to commence legal
action against the company "for numerous violations of the Air Quality regulations."
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 health.
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
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 journalists.
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
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....
See also: The Seven Sisters
British Petroleum (BP) - In deep Dodo doo-doo.
GO TO > > > British Petroleum: Buzzards in the Pipelines
Commodity Futures Trading Commission - From: The Buying of the President (1996
ed): . . .
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
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 TRILLION a 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.
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
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&T or any
of the major oil companies....
For more, GO TO > > > Dying for DynCorp
Dynegy Inc. - Another energy trader (like Enron)...
May 29, 2002
Dynegy chief executive Watson resigns
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....
For more, GO TO > > > Digging Up the Dirt on Dynergy
El Paso Corporation - Yet another energy company (like Enron) going down the oil
slick slippery slide.
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 added...
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 actions.
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....
For more, GO TO > > > Vultures in The El Paso Corp
Enron - From The Buying of the President (1996 ed), regarding contributions to
Republican candidate, Phil Gramm:
The name of one company in particular might have caught Wendy Gramm’s attention:
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 #1 CAREER PATRON OF
GEORGE W. BUSH, JR.
* * *
For more, GO TO > > > The Story of Enron
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
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
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:
For more on ConAgra Corp, GO TO > > > The Biotech Birds
Halliburton - Vice President Dick Cheney’s good 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 year.
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....
For more, GO TO > > > Halliburton from Hell!
Harken Energy - For a triple-dip of Aloha, Paradise, and Harken
GO TO > > > Aloha, Harken Energy!...
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
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 the suit.
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
For more, GO TO > > > I Sing The Hawaiian Electric; Predators in Paradise
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 billion.
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
For much more, GO TO > > > Investigating Investcorp
Kukui, Inc. - A for-profit oil and gas subsidiary formed by the Kamehameha Schools
Bishop Estate to take over the operations of the bankrupt business venture McKenzie
From their website:
MANAGEMENT OF KUKUI OPERATING COMPANY
Dennis E. Fern - President
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)
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 with Quintana
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 joined Quintana
Petroleum in 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 joined Quintana Petroleum Company as 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’ was HELEN
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
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
For more, GO TO > > > The Sinking of the Ehime Maru
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 from
computers 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.
For more, GO TO > > > Who’s Guarding the Hen House?
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.
* * *
For more, GO TO > > > The Myth and The Methane
Pacific Gas & Electric - Bankrupt California energy company that had dealings with
Enron in 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 law.
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
“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 said.
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
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 have cost 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 the Nuclear 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 state."
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 safety complaints.
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 agencies unresolved.
"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
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.
For more, GO TO > > > The Nuclear Nests
Reliant Resources Inc. - Another energy trader (like Enron) you probably shouldn’t rely
May 29, 2002 - Reliant Resources Inc. has acknowledged that federal prosecutors
have issued a subpoena for records relating to controversial energy trades....
Tesoro Petroleum - Tesoro was founded in 1968 as a company primarily engaged in
petroleum exploration and production.
In 1969, Tesoro began operating Alaska's first refinery, near Kenai.
As of 2005, Tesoro is a FORTUNE 200 company and one of the largest independent
petroleum refiners and marketers in the United States.
For more, GO TO > > > Vultures up to their necks in Tesoro Petroleum
The Seven Sisters - The seven major oil companies.
From Diplomacy by Deception, by Dr. John Coleman:
.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 commerce.
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 Order upper 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 300.
In secret, the Seven Sisters club has 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 steep decline.
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
Have the citizens of the United States benefitted from the huge profits made by Exxon,
Texaco, Chevron and Mobile (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
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 first year.
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 $400,000 grant 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
See also in Part III: 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 security.
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
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
Stockholders, unsurprisingly, have seen the value of their shares fall through the floor....
For much more, GO TO > > > The Nuclear Nests
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 abductions to 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....
For more, GO TO > > > The Nests of Osama bin Laden
MORE COMING DOWN THE power LINE
MEANWHILE, FOR MORE POWER CONNECTIONS...
Aloha, Harken Energy!
British Petroleum: Buzzards in the Pipelines
I Sing The Hawaiian Electric
The Power Vampires
The Story of Enron
Citigroup: Vampires in the City
P-s-s-t, wanna buy a good audit?
The Myth & The Methane
The Marsh Birds
The Indonesian Connection
William Simon Says
Birds that Drink from Cesspools
Spotting the SEC
Feeding the Vultures in El Paso Corp
Vultures up to their necks in Tesoro Petroleum
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Originally posted: January 14, 2001
Last Update May 27, 2009, by The Catbird
January 14, 2001: Originally posted on www.the-catbird-seat.net
March 13, 2007: The U.S. Dept of Justice gets Order to shut down website
May 27, 2009: Latest update on www.kycbs.net
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