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***FLASH 30 (3/27/02): The "War on Terror," Cheney's Energy Policy Task Force, and ExxonMobil's Law Problems

On March 26, 2002, Mike Ruppert published on his www.copvcia.com website a story, which I consider to be both well-sourced and important, alleging that Attorney General John Ashcroft has been attempting to exert "unusual" influence over two grand jury investigations of alleged improprieties committed by ExxonMobil, in connection with their huge oil venture in Kazakhstan. The story raises the question why the Attorney General has not recused himself altogether in the ExxonMobil matter, as he has done with respect to Enron because of Enron's contributions to his 2000 Senatorial campaign. ("ExxonMobil gave more money to Ashcroft's campaign than Enron did.")

I urge my readers to go to the full version of this story, which I have excerpted below. I do so for two reasons. First, it goes to the heart of the question of whether the "war on terror" has been not just energy-driven, but shaped and manipulated to meet the private needs and legal difficulties of oil giants like ExxonMobil, which in this case was facing possible indictment. It is relevant that ExxonMobil, while already the subject of a criminal investigation, had (as the New York Times reported on 3/1/02 and 3/27/02) access to both Vice-President Cheney's task force and to Secretary of Energy Spencer Abraham. In addition, as Ruppert reports, "it is clear that Kazakhstan-related issues were discussed behind Cheney's closed doors. In an analysis of the final report of the vice president's energy task force, released in May 2001, The Washington Times, on July 20, 2001, wrote, `While saying private investors must lead the way, the Cheney report devotes considerable time to the Kazakh market, urging U.S. government agencies to "deepen their commercial dialogue" with Kazakhstan.'

In my earlier FLASH 21, I asked the "Question: do Cheney's non-released papers link the "War Against Terror" to Enron?" The public should also ask whether they link it to ExxonMobil's situation in Kazakstan, and the legal problems arising therefrom.

Here, finally, are some excerpts from Mike Ruppert's complete story, which I recommend you read and disseminate, including to Members of Congress.

March 26, 2002, 10:00 AM PST (FTW) - Attorney General John Ashcroft's prompt and public recusal from the Enron investigation because of a conflict of interest arising from Enron's donations to his 2000 Senate race has not been matched by a similar recusal in the case of federal grand juries in New York and Washington investigating two additional Ashcroft donors, ExxonMobil and BP Amoco. This, even though ExxonMobil gave more money to Ashcroft's campaign than Enron did.

A source familiar with the grand jury investigations, who spoke on condition of anonymity, told FTW that both grand juries are still active and that Ashcroft has quietly moved -- in the wake of last December's departure of Southern New York's U.S. Attorney, Mary Jo White -- to exert control over the New York grand jury from Washington and to exercise "unusual" influence over the Washington investigations. FTW has also received multiple reports that several high-ranking career prosecutors in both New York and Washington have raised serious objections to Ashcroft's actions and his failure to publicly recuse himself in these cases....

The two grand juries have been investigating allegations that ExxonMobil, the world's largest corporation, and BP Amoco paid cash bribes to the president of Kazakhstan, Nursultan Nazarbayev, and his oil minister, Nurlan Balgymbayev, and that Mobil engaged in an illegal oil swap of Kazakh oil through Iran in 1997. In an analysis of the final report of the vice president's energy task force, released in May 2001, The Washington Times, on July 20, 2001 wrote, "While saying private investors must lead the way, the Cheney report devotes considerable time to the Kazakh market, urging U.S. government agencies to 'deepen their commercial dialogue' with Kazakhstan."....

A March 1, New York Times story by Don Van Natta reported, "ExxonMobil, the second-largest energy donor in the Republican Party, confirmed today that its executives met with Mr. Cheney. It was among the handful of companies that had declined to comment earlier this week about whether its executives had met with Mr. Cheney or members of the task force, although it did say that its interests were represented by the American Petroleum Institute, a trade council.

"In an interview today, company officials confirmed that ExxonMobil chief executive, Lee Raymond, met with Mr. Cheney for 30 minutes on Feb. 8, 2001. ExxonMobil officials also met with task force staff members for 45 minutes on Feb. 14 and made a presentation about future energy supply and demand, the company disclosed. The company said that on the same day, executives made a similar presentation to the General Accounting Office and to staff members of both political parties on the House and Senate Energy Committees. "

A Dec. 17, 2000 story by David Johnston of the New York Times stating that none of the companies connected to the alleged bribery (including ExxonMobil, BP Amoco and Phillips Petroleum) appeared to be focuses of the New York grand jury has been flatly contradicted by [Seymour] Hersh (New Yorker, July 9, 2001), who reported extensive negotiations and payments by Mobil in 1995-96 after direct negotiations between Mobil and Kazakh President Nazarbayev. In fact, Hersh investigated the suspicious activities of now retired Mobil Vice President Bryan Williams and intelligence-connected American businessman James Giffen, both of whom have been directly tied to the bribery and the Iranian oil swap. Giffen has been reported in a number of stories to be Nazarbayev's "gatekeeper" for anyone wishing to do business in Kazakhstan. Hersh documented direct payments to Giffen's company, the Mercator Corporation, from Mobil.

Additionally, Hersh wrote, "Mobil participants in the Tengiz negotiations worried constantly about the possibility of payments going astray. [Mobil exec] Don Voelte told me that the company was concerned that the purchase payments it was sending the Kazakh government via Swiss banks might be diverted for personal use by the Kazakh leaders." The Hersh piece makes it clear that Mobil's involvement in the bribery and the Iranian oil swap was much deeper and more involved than this disingenuous statement suggests.

"Kazakhstan. [has] become notorious for exploitation, corruption and seemingly bottomless fields of oil whose bounty seldom benefits the average citizen." "The country has not prospered under [President Nursultan] Nazarbayev ['s] rule. Social conditions have deteriorated steadily; per capita GNP is just $1,300 dollars a year," Hersh wrote. "A fifth of the country's total money supply is now stashed in Swiss banks."

"A Mobil employee who took part in [Mobil's negotiations with Kazakhstan] in Nassau said that the Kazakhs made a series of extraordinary demands, seeking among other things, a new Gulfstream jet aircraft for Nazarbayev, funds for tennis courts at his home, and four trucks with Satellite dishes to be used by his daughter's televisions network."

In a July 5, 2001 article posted by the International Eurasian Institute for Economic and Political Research, the Kazakhstan 21st Century Foundation reported, "Nazarbayev is so worried about the investigations, which he considers politically motivated, that he got his puppet parliament to pass a law granting him lifetime immunity from any legal liability stemming from his actions in office, and another law that appears to legalize money laundering."

What is clear, according to Hersh and other sources, is that as much as half of the $1 billion paid by Mobil never made it into the Kazakh treasury.

BP-AMOCO EXPOSED

The oil giant formed by the Dec. 1998 merger of British Petroleum and Amoco was made even larger by the April 1999 merger of BP-Amoco with the American oil giant, Arco. It too is at least a target of the investigations into Kazakh dirty dealings. Johnston's New York Times story discussed the Department of Justice's criminal investigations:

"According to a formal request filed under a treaty between the United States and Switzerland, the Justice Department says that on March 19, 1997, Amoco Kazakhstan Petroleum, one of the companies involved in the big offshore project in the Caspian Sea, transferred $61 million from Banker's Trust in New York in two payments to account 1215320 at Credit Agricole Indosuez, a bank in Geneva. (The Amoco unit is now part of BP).

"Three days later, the document says, Mr. Giffen and Kazakh officials began a series of what the United States government says were illegal transfers from the Kazakh treasury accounts into private accounts benefiting several Kazakh leaders."

Johnston's account went on to describe how money was transferred out of these accounts into accounts that "benefited" Giffen and were allegedly used to disburse money into private accounts held or controlled by either Nazarbayev or Balgymbayev, his oil minister. By the time Hersh wrote his story, almost seven months later, the known total amount of payments from ExxonMobil and other companies exceeded $1 billion, and documentation was beginning to show that much of it had being diverted into the private pockets of Kazakh public officials.

In a March 1 story, New York Times writers Don Van Natta, Jr. and Neela Banerjee reported on 18 corporations that were heavy Republican donors which got in to Cheney's task force. "The companies include the Enron Corporation, the Southern Company, the Exelon Corporation, BP, the TXU Corporation, FirstEnergy, and Andarko Petroleum."

OIL: A NATIONAL SECURITY INTEREST

The impending economic crash for the U.S. oil industry, and all of its downstream economic vassals, reached a crisis between 1996 and 2001 as the intransigence of the Taliban threatened to create an implosion within an industry that owned oil but could not get it to market. The crisis was so severe that the National Security Council (NSC) got involved. Oil had become a national security matter of the highest priority.

Both the Washington Post and the New York Daily News (as reported by the Albion Monitor on Feb. 28) obtained a series of emails showing that the NSC led a "'Dabhol Working Group' composed of officials from various cabinet departments during the summer of 2001.The Working Group prepared 'talking points' for both Cheney and Bush."

Hersh, in "The Price of Oil," also documented a series of 1996 NSC meetings and discussions about Mobil's pending illegal oil swap. Although his reporting indicates that Giffen and Mobil VP Bryan Williams, who met with NSC staff, were warned that such a swap was illegal, and that the NSC sent warnings to other Mobil executives, the swap went ahead anyway. This, after Hersh quoted a government official as saying that Giffen had said that Mobil was smart and that it would do it through a European trader.

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"We must come to recognition, personally and culturally, that corruption is not just a violation of the law, not just an economic disadvantage, and not merely a political problem, but that it is morally wrong.. It is now widely recognized that the consequences of corruption can be devastating: devastating to economies, devastating to the poor, devastating to the legitimacy and stability of government and devastating to the moral fabric of society." -- John Ashcroft, The Hague, May 2001

Thanks to the Kazakhstan 21st Century Foundation for publishing the above quote.