The ties that bind Democrats and Big Oil

July 16, 2009

The Republicans are known as the party of Big Oil, but the Democrats and the Obama administration have plenty to answer for, writes independent journalist Jeremy Scahill.

IT IS well known that under the Bush administration, oil corporations were basically given a spare set of keys to the White House. Dick Cheney and the Bush family had ties to Big Oil as deep as an offshore drilling operation. Among those in bed with Big Oil was Bush's National Security Adviser/Secretary of State Condoleezza Rice.

In 1993, after Rice helped Chevron negotiate deals in former Soviet republics, the company named a 129,000-ton supertanker after her, the SS Condoleezza Rice. Rice, who had long served as a director on Chevron's board when Bush took power in 2000, resigned from that position just six days before she was named to Bush's cabinet. The tanker, however, bore her name for months while she worked in the White House. Only after a ruckus raised by human-rights activists and others over Chevron's human-rights abuses did Rice's office suggest that the company rename the tanker, which Chevron quietly did.

Among the abuses in which Chevron was implicated at the time was the May 1998 killing of indigenous residents of Nigeria's oil-rich Niger River delta. In response to a nonviolent protest on one of its oil platforms, Chevron provided company helicopters to the notorious Nigerian Mobile Police, known as the "Kill 'n Go," who used the helicopters to conduct a deadly attack on nonviolent protesters. Chevron's head of security rode along as the police opened fire on the delta residents, and Chevron paid the soldiers who carried out the attack. (Despite overwhelming evidence of Chevron's complicity, late last year, a jury in San Francisco cleared the company of responsibility. The case is on appeal.)

Richard Holbrooke, currently Barack Obama's special envoy for Afghanistan and Pakistan
Richard Holbrooke, currently Barack Obama's special envoy for Afghanistan and Pakistan

During the 2008 presidential race, Barack Obama rightly painted John McCain as the candidate of Big Oil, saying he was "in the pocket" of the industry, and the Democrats ran ads portraying Exxon as McCain's running mate.

But the nonpartisan Center for Responsive Politics pointed out, "Tallying contributions by employees in the industry and their families...Exxon, Chevron and BP have all contributed more money to Obama than to McCain." After his election, Obama followed in Bush's footsteps, appointing another former Chevron director, Gen. James Jones, as his national security adviser. In 2008, Chevron paid Jones $290,000 for serving on its board for seven months--from May until December.

Now, the story of this slick oil company's romance with the government has taken a particularly crude twist: Last month, Chevron was given the Richard C. Holbrooke Award for Business Leadership in "recognition of the company's global public health programs." (And, no, this is not a story from The Onion.) It was first reported by Newsweek's Michael Isikoff.

The award, from the Global Business Coalition (GBC), was bestowed upon Chevron at a June 24 ceremony in honor of its work "to eradicate HIV/AIDS, tuberculosis and malaria." In a world where war criminals such as Henry Kissinger receive the Nobel Peace Prize, and murderous thugs such as former Defense Secretary Donald Rumsfeld and Colombia President Alvaro Uribe are given the U.S. Presidential Medal of Freedom, perhaps this award should not come as a surprise.

Other award recipients included Shell Oil (which just paid $15.5 million to settle a lawsuit over its alleged involvement in the killing of Nigerian playwright Ken Saro-Wiwa and eight other activists), Marathon Oil and Anglo Coal of South Africa. In giving Chevron the award, the GBC said Chevron "has long been a leader in the fight for global health." But those who have monitored the company's record for years beg to differ.

"Giving Chevron an award for its fight against malaria is like giving Phillip Morris an award for smoking-cessation programs," says Steve Kretzmann, a longtime environmental activist and executive director of Oil Change International. "Chevron is doing everything it can to lobby against climate-change legislation and produce more oil, which causes climate change. A changing climate will greatly increase the spread and range of malaria globally; and higher rates of HIV in oil-producing communities owing to the prevalence of prostitution is well documented."

Judith Chomsky, an attorney with the Center for Constitutional Rights, which sued Chevron for its involvement in killings and other abuses in the Niger Delta, says awarding such a "prize to Chevron elevates form over substance," adding: "Outside of photo ops and international scrutiny, where the populations are poor and lacking the ability to effect Chevron's behavior, Chevron operates in total disregard for the health and environmental consequences of its operations."

In recognizing Chevron, the GBC cited the company's work in Nigeria. But Chomsky charges that the company has severely damaged Nigeria's environment and harmed indigenous communities. "The fact that Chevron uses some of its ill-gotten profits for public displays of civic actions does not balance out the greater harm for which it is responsible," she says.

WHILE GIVING such an award to Chevron is perverse enough on its own, let's remember who the award is named after. Richard C. Holbrooke is currently the Obama administration's point man on Afghanistan and Pakistan, with a substantial portfolio that includes areas of Chevron's current and, likely, future operations.

Before becoming Obama's "Af/Pak" envoy, Holbrooke was the president and CEO of GBC, an organization he spent the past decade building. Holbrooke, who cut his teeth working for Kissinger during the Vietnam War, has for decades marched back and forth over the golden bridge linking corporations and government. Chevron received the award in large part because it committed $30 million over three years to the GBC-affiliated Global Fund in 2008, while Holbrooke was GBC's president and CEO.

In its press release on the award, Chevron labeled the prize "prestigious," despite the fact that it is the first time it has been presented and was named after Holbrooke after he joined the Obama administration.

"Chevron is increasingly viewed around the world as a rogue oil company whose human rights record is worse than its peers," charges Steven Donziger, an attorney who has long battled Chevron in human-rights cases. "I think Holbrooke allowed his name to be used for this award because he is aware of Chevron's serious problems. It is precisely the reason he let his name be used. It is part of Holbrooke's ersatz attempt to show Chevron the path to a greening of their image."

Michael Brune, executive director of Rainforest Action Network, which has monitored and protested Chevron's alleged environmental and human-rights violations for years, says, "It is an obvious conflict of interest for a high-ranking Obama official to allow his name to appear on an award given to a private oil company that is spending considerable resources lobbying the State Department and other government agencies."

In the days leading up to the award, Holbrooke's name was splashed on full-page advertisements in the Washington Post and the San Francisco Chronicle singing Chevron's praises (along with fellow award recipient Levi Strauss). "Making Energy. Making Jeans. Making a Difference," read the ad, which lauded Chevron "for improving global health."

"Chevron and Levi Strauss are examples of the good that the business community can do; they can harness the power to help curb these global pandemics," the ad boasted. "When businesses like Chevron and Levi Strauss decide to make a difference, to fight disease, and to strike a blow for the greater good, there's nothing we can't overcome."

Who paid for these ads praising Chevron as a beacon of social philanthropy? Chevron.

Newsweek's Isikoff asked: "How exactly can the name of a high-ranking Obama official be featured in a corporate advertising campaign? And does that really square with President Obama's commitment to prevent his administration from being tainted by the slightest whiff of corporate lobbying (much less federal ethics rules that forbid government officials from using their office 'for the endorsement of any product, service, or enterprise')?"

According to Isikoff, "after checking with a State Department ethics officer, Holbrooke...did not personally hand out the awards." But Holbrooke did reportedly praise Chevron during his speech at the awards ceremony. In fact, it seems like praising Chevron has become an annual event for Holbrooke in recent years.

At a GBC Awards ceremony honoring Chevron in 2007, Holbrooke said, "Chevron has set a new standard in the corporate fight against HIV/AIDS...serving as a superlative model for other businesses around the world to follow." When Chevron gave the Global Fund $30 million last year, becoming its first "Corporate Champion," Holbrooke said, "Chevron's strategic investment...sets a standard others should aspire to."

At this year's ceremony honoring Chevron, Holbrooke was introduced by CNN/Newsweek's Fareed Zakaria, who, not surprisingly, told Isikoff any complaints about ethical violations are "absurd."

"This strikes me as the usual Washington interest-group attack, which is unfair," he said. (CNN and Newsweek should examine why one of their "journalists" is cavorting with--and defending--a public official he interviews and uses as a source.)

While a spokesperson for Holbrooke echoed Zakaria, dismissing any complaints about the award as "silly," it is deadly serious to Chevron's victims. In fact, the award was given to Chevron at a moment when the company is ramping up its lobbying efforts to pressure the Obama administration, including the State Department, where Holbrooke works, to intervene in a major lawsuit against Chevron that the New York Times has suggested could be "the world's largest environmental lawsuit."

The lawsuit in Ecuador was brought by 30,000 Amazon-basin residents, where Chevron faces a potential penalty of $27 billion in damages for allegedly causing massive environmental damage to the Amazon rainforest. The case was originally filed in New York in 1993, but was moved to Ecuador in 2002 at Chevron's request. The company thought the move would swiftly end the litigation. Chevron was wrong.

Ecuador's President Raphael Correa has called Chevron's conduct a "crime against humanity." According to court-appointed experts in Ecuador, more than 18 billion gallons of oil were spilled, and the contamination led to 1,400 cancer deaths. A decision in the case could come this year.

Chevron has dozens of lawyers on its payroll, but one in particular stands out. In April 2008, the company hired William Haynes II as its chief corporate counsel. Haynes is an infamous figure from the Bush era; as the Pentagon general counsel, he was one of the key attorneys laying out the legal justifications for the Bush administration's global torture and detention policies.

Haynes is perhaps best known for resigning after it was revealed he described the military commissions process as rigged. (The former chief prosecutor of the military commissions, Morris Davis, told The Nation magazine Haynes told him: "We can't have acquittals...We've got to have convictions.")

CHEVRON WILL need all the legal and political influence it can afford. The Ecuador case is so serious that New York's Attorney General Andrew Cuomo sent Chevron a letter in May suggesting the company "may have misled shareholders about the risk it faces in a potential $27 billion lawsuit alleging it caused 'massive' oil pollution in Ecuador," according to Bloomberg. Cuomo blasted Chevron's public claims that Ecuador's courts did not have jurisdiction, pointing out that Chevron "consented to the jurisdiction of that very Ecuadorian court." Other states have expressed similar concerns.

Attorney Steven Donziger has long worked the case and now serves as a legal adviser to the Ecuadoran plaintiffs. He says Chevron has a record of "buying" influence in an effort to "engineer judicial results." Noting Holbrooke's close relationship with Chevron through the GBC, Donziger says he believes both Holbrooke and Chevron knew exactly what they were doing with this award.

"It is typical of what Chevron does. They donate money to create this organization, they are instrumental in getting Holbrooke's name on the award and then pay for ads lauding themselves for an award they financed," Donziger says. He adds:

There is no greater example of what is wrong with Washington than this one. Holbrooke allowed Chevron to use his name in an attempt to gain credibility and cover up one of the world's greatest crimes. It is an outrageous abuse of the public trust by Holbrooke. You can't, as a U.S. State Department official--or any government official for that matter--give an award to a company that has business before the department that employs you.

The Holbrooke award, critics charge, is the latest development in a high-stakes lobbying/public-relations campaign. Over the past few years, Chevron has deployed a team of high-powered former senior U.S. officials-turned-lobbyists in Washington to attempt to quash the case and, more recently, to pressure the Obama administration to punish Ecuador--by canceling its preferred-trading status--for allowing the case to proceed. The company tried the same tactic with the Bush administration.

"We can't let little countries screw around with big companies like this--companies that have made big investments around the world," an unnamed Chevron lobbyist told Newsweek in 2008.

Among Chevron's lobbyists are former Sens. Trent Lott of Texas and John Breaux of Louisiana; Mickey Kantor, former U.S. trade representative, secretary of commerce and the 1992 Clinton-Gore campaign chairman; Thomas F. "Mack" McLarty III, Bill Clinton's former White House chief of staff; and Carla Hills, former secretary of Housing and Urban Development and former U.S. trade representative. Like Rice, Chevron name a tanker after Hills.

Chevron has also used Wayne Berman, who chaired the finance committee for John McCain's presidential campaign. According to federal lobbying records, in the first quarter of 2009, Chevron spent $6.8 million on lobbying. The company had seven lobbyists devoted to foreign policy. The first "lobbying issue" listed was: "Ecuadorial judicial independence." Among the entities lobbied was the State Department, Holbrooke's employer.

"It is no coincidence that Chevron is trying to polish their image with ads in the Washington Post at the same time that they are launching a massive lobbying campaign to interfere with [the Ecuador] lawsuit," says Rainforest Action Network's Brune. "Chevron is trying to avoid responsibility in Ecuador by essentially buying credibility in Washington."

In April, Chevron sent a petition to Obama trade representative Ron Kirk, asking him to retaliate against Ecuador by canceling its Andean Trade Preference Benefits. While Chevron is devoting serious resources to the Ecuador case, persuading Obama to interfere is a complicated endeavor.

In 2006, then-Sen. Obama, along with Sen. Patrick Leahy (D-Vt.), wrote a letter to then-U.S. trade representative Rob Portman, calling on him not to interfere in the case. They wrote: "While we are not prejudging the outcome of the case, we do believe the 30,000 indigenous residents of Ecuador deserve their day in court."

Just prior to the November election, an Obama aide said that was still Obama's position. What's more, Donziger is an old basketball buddy of Obama's from Harvard and briefed Obama on the case when Obama was in the Senate. Donziger says that at the time he briefed Obama, the senator was "offended" by Chevron's attempt to subvert the Ecuadoran judicial process.

In a report to Congress on June 30, signed by Obama, the White House announced it was not canceling Ecuador's preferred status, which Donziger characterized as a "major, major defeat for Chevron."

STILL, THE company's lobbying efforts did appear to pay off. The White House report did weigh in on the Chevron case: "Concerns have been raised that statements by top Ecuadorian officials in favor of the plaintiffs have politicized the proceedings. The U.S. government has encouraged Ecuadorian government officials to refrain from commenting on ongoing judicial cases."

Donziger calls that "the $10 million paragraph," suggesting it was the meager end-product of the massive amount of money Chevron has spent lobbying the administration. "That one paragraph is a complete manipulation by Chevron of the facts, and it was wholly inappropriate for the U.S. trade representative to include it in this report."

Brune also said the U.S. government telling "Ecuadorian officials not to comment on this case is just silly," adding, "Obama and federal officials comment on judicial proceedings all the time. It's very common for political officials to offer a perspective on major issues in front of courts."

Despite its recent setbacks, Chevron undoubtedly will continue its intense lobbying on this issue on Capitol Hill, as well as the administration, including the State Department. Whether Chevron officials discussed their Ecuador problem with Holbrooke directly, we don't know. But for the State Department to allow Chevron to receive the Richard C. Holbrooke Award for Business Excellence at a ceremony which Holbrooke personally attended at a time when Chevron is fighting desperately to persuade members of the Obama administration and Congress to take Chevron's side in a high-stakes legal case is worthy of a congressional inquiry.

"Even if it is not intended to, [the use of Holbrooke's name] suggests the award has the imprimatur of the U.S. government when it doesn't," says Melanie Sloan, a former federal prosecutor and the executive director of Citizens for Responsibility and Ethics in Washington. "Few people will know about Holbrooke's former job [as president of GBC], but they'll know he now works for the U.S. government. That's the problem."

In a letter to Secretary of State Hillary Rodham Clinton, Brune and the Rainforest Action Network called on Clinton to "direct...Ambassador Holbrooke to remove his name from its association" with the award, pointing out to Clinton that Chevron "spends considerable resources lobbying the agency which you lead."

Brune wrote:

Whether inadvertent or not, the fact [that] Ambassador Holbrooke has allowed his name to be associated with an award presented to a company that is lobbying the State Department and other government agencies is both an actual and apparent conflict of interest that besmirches the good reputation of our country and appears to run contrary to the spirit (if not the letter) of lobbying rules promulgated by the Obama administration.

The group asked for a commitment from Clinton that "neither Ambassador Holbrooke, nor any other person who serves your agency in an official capacity, be allowed to permit their name to be used by a private entity with business before the State Department or the U.S. government more generally."

As of this writing, the State Department had not responded to the letter. When asked about the potential ethical issues raised by Holbrooke's affiliation with the Chevron award, a State Department spokesperson told AlterNet the Department did not have a comment at this time.

First published at Alternet.

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