Blowout

by Rachel Maddow

  Foresman is one of many characters in the Trump-Russia drama who shopped the Trump camp some plan or other for lifting U.S. sanctions on Russia. Former Ukrainian president Viktor Yanukovych, still cosseted in Moscow, was hot to get Paul Manafort to use his influence with Trump to push a drop-sanctions “peace plan.” “All that is required to start the process is a very minor ‘wink’ (or slight push) from [Donald Trump],” one of Manafort’s key contacts in Ukraine wrote in an email. “The email,” wrote Mueller, “also stated that if Manafort were designated as the U.S. representative and started the process, Yanukovych would ensure his reception in Russia ‘at the very top level.’ ”

  Dropping sanctions was also the whole point of the visit of all those Russians to Trump Tower in June 2016, the meeting that President Trump memorably summarized as being about “Russian adoptions.” The ban on American families adopting Russian orphans was Vladimir Putin’s retaliatory measure against the U.S. sanctions regime. Dropping the sanctions would mean dropping the adoption ban, so that meeting really was just another Russian effort to scheme against sanctions. Only this time they also got an American president to put out a press statement boosting Putin’s anti-sanctions propaganda effort that leveraged sympathy for poor Russian orphans.

  Still another drop-sanctions effort was a “peace plan” shopped to the incoming Trump administration via Michael Cohen and Felix Sater, who had been working on Trump’s secret Moscow real estate deal all through the 2016 primary season. In truth, a critical subtext of the Moscow Trump Tower project—which Mueller assessed could have been worth hundreds of millions of dollars to Trump—was dropping U.S. sanctions on Russia. In Mueller’s sketch of the contours of the deal, potential financing would have been through Genbank, which may or may not have been working on the potential deal with a larger Russian bank, VTB. In either case, both are sanctioned entities, so no deal could have happened through them as long as sanctions remained in place. In one memorable telling after Mueller’s report was released, Felix Sater explained to Forbes that maybe the deal wouldn’t have been financed by any banks at all—maybe it would have been financed directly by the Rotenberg brothers, the judo guys, Putin’s construction goons. OK, maybe, but they too are under U.S. sanctions. The point is that all of the potential financing entities described in conjunction with the Trump Tower Moscow deal were under sanctions. With sanctions in place, such a deal could never happen. Lift the sanctions, though, and, hey, now maybe we could start to envision the Ivanka spa atop the old pencil-factory site.

  Sanctions, again and again, are the core issue—the boring, insistent thing—at the center of all these otherwise intriguing and/or laughable contacts and overtures that everyone in Trump’s orbit tried to keep so secret during Russia’s extraordinary intervention in the 2016 election and beyond. Russia wants what it wants. But what it needed right then—like a junkie long past his last hit—was sanctions relief. With an economy completely dependent on oil and gas, and an oil and gas industry completely dependent on someone else’s expertise, the sanctions that preclude Russia from getting that expertise were like a tourniquet around the neck. Sanctions were the entire ballgame for the Russians, and they had made that abundantly clear to Team Trump by the time it entered the White House.

  Investigative journalist Michael Isikoff was the reporter who first ferreted out that Trump hit the ground running with a day-one concerted effort to try to unilaterally get rid of the sanctions. “Unknown to the public at the time, top Trump administration officials, almost as soon as they took office, tasked State Department staffers with developing proposals for the lifting of economic sanctions, the return of diplomatic compounds, and other steps to relieve tensions with Moscow,” reported Isikoff for Yahoo News. State Department veteran Dan Fried told him that in the first few weeks after Trump was inaugurated, he received “panicky” calls from officials who told him they had been “directed to develop a sanctions-lifting package and imploring him, ‘Please, my God, can’t you stop this?’ ”

  He could, actually. Fried and Tom Malinowski and other State Department old hands broke the emergency glass and sounded the alarm on both sides of the aisle in Congress that the Russia sanctions needed to be made statutorily binding—stat. Incredibly, it worked. With Democrat Cardin and Republican John McCain in the lead in the Senate, Congress moved with uncharacteristic agility and swiftness to pass legislation to codify the sanctions and make it harder for Trump to undo them on his own say-so. The national legislature did it at lightning speed, even after Tillerson begged members to soft-peddle the new law. “I would urge allowing the president the flexibility to adjust sanctions to meet the need in what is always an evolving diplomatic situation,” the secretary of state said as the bill was hurtling toward passage. Trump squeaked like an unoiled hinge over how much he hated the legislation and didn’t want to sign it. It was only when his hand was effectively forced by a veto-proof majority (98–2 in the Senate, 419–3 in the House) that he finally relented. The C-SPAN feed of the vote wasn’t as cinematic as the red-shirted teachers sitting-in under their state’s capitol dome, but in its own way, that early behind-the-scenes fight to save sanctions was the same small-d democratic power at work.

  To the extent that Congress and civil servants watchdogged the issue of sanctions, it seemed to drive the Kremlin and the Trump administration nuts in equal measure. The bipartisan tenacity on this issue should, however, give the rest of us cause for hope. Behold the mercies of non-unitary government authority, and a free press, too. But when it comes to those sanctions in particular, and the constraining influence of democratic accountability in general, there is also—in these United States—another daunting political counterforce at work. And it’s not the headline-grabbing titans of the digital global era. Sure, big tech and big finance are the talk of the chattering classes, revered and reviled in equal measure as masters of the universe that play an outsize and often malign role in social and political outcomes. But the oil and gas industry has been remaking the world in its favored image for generations. And it’s not finished with us yet. Climate disaster has put a spotlight on the need for human society to evolve beyond dependence on petroleum, but our very capacity to decide on that—or anything—remains at risk as long as the industry is still ranging like a ravenous predator on the field of democracy.

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  The oil and gas industry—left to its own devices—will mindlessly follow its own nature. It will make tons of money. It will corrode and corrupt and sabotage democratic governance. It will screw up and—in the end—fatally injure the whole freaking planet. And yes, it will also provide oil and gas along the way! And jobs for the workers who produce those things for it. The end-times battle that we’re engaged in now is to figure out how to get along without oil and gas—and we’re plugging away but still a ways off from that—and, in the meantime, commit to a whole new level of constraint and regulatory protection against this singularly destructive industry to minimize its potential harms.

  This is a doable, winnable fight here at home—ironically, or perhaps sadly—because the industry has been cut so much slack for so long, particularly in the last two decades of bipartisan cheerleading for “energy independence.” America really is swimming in oil and gas—rah rah rah, sis boom bah. But meanwhile, American oil and gas companies have been allowed to wreak geopolitical and environmental havoc both at home and the world over. Which means the menu for starting to fix it is pretty darn straightforward, and features a lot of low-hanging fruit.

  As a start, they should be making full public disclosures of all their payments to governments and government actors. Even the half-on-the-take U.S. Congress believed that as recently as 2016. When U.S. oil and gas companies undermine U.S. foreign policy objectives abroad—by drilling Russia’s Arctic for it after the seizure of Crimea, or single-handedly funding rapacious dictators-for-life in central Africa, or negotiating independent deals with
Iraqi Kurdistan to break up the unified national Iraqi government that U.S. soldiers were (at that moment!) dying to hold together—they should face severe punitive consequences at home. If it were a rival, rogue country tear-assing across the globe screwing things up in these ways, a normal U.S. government would be at the least sanctioning it, if not leading global efforts to roll back those actions. When it’s not a country doing it but instead U.S.-based multinational oil corporations, the United States, at a minimum, should punish those companies, or even block them outright in a process tuned to ensure that U.S. oil doesn’t run a second U.S. foreign policy that our own military and intelligence agencies and foreign service have to pay for, potentially with their lives. And this wouldn’t be reinventing the wheel. When foreign companies and countries want to buy assets in the United States that have potential strategic value to us as a country, those potential purchases are run through a fairly rigorous, high-level review by something called the Committee on Foreign Investment in the United States. Foreign deals by U.S. oil majors could be subject to a parallel process, for parallel reasons. If they’re going to have their own foreign policies that are indifferent or even hostile to American national interests, and if they’re going to take actions that have profound effects on foreign governments, their deals should be subject to the kind of rigorous review to which we subject foreign countries.

  Most of all, the point is that it’s time for the most lucrative and reckless and destructive industry on earth to pay for what it does. Here at the end of the world, with the climate crisis bearing down like Godzilla over downtown Tokyo, U.S. taxpayer subsidies for oil and gas drilling are now almost literally insane. As is the in-kind-donation equivalent of letting companies drill on federal land. What, there aren’t enough private farms to kill the cows on and screw the landowners? You need to drill national monuments, too?

  Coal is dead. As dead as whale oil and kerosene and every other fuel source we once believed we couldn’t live without. Oil and gas are dead, too—only they just don’t look sick yet. Jobs in those industries must and will become jobs in other industries, which will undoubtedly be a painful adjustment. But that pain will be less than the damage wreaked by letting them continue to run their own course. With the accelerating pace of sea level rise and global warming, the worst silver lining in the history of silver linings is that new jobs and new industries may derive from the need to clean up the messes of the industry thus far, to sandbag us against the worst damage it has already done.

  Oil and gas industry incentives are accelerating us toward destruction on multiple levels—geopolitical balance, governance, environmental injury, and climate apocalypse. Democratic accountability and government action to countermand and control the industry’s actions are the ways to beat that—the only ways. Democracy is still, as always, our last best hope. Which means, more than ever, we need to preserve and protect our democracies from the influence of the industry, and from the rogue-state anti-democracy behemoth it has fueled in Russia, and from the malign self-preservation instincts that kick in when things get unstable and chaos swirls.

  And yes, there are superheroes among us who spice up the plot and inspire us and show us that what we never thought was possible can actually be done. In this case, it’s Oklahoma schoolteachers—lots of them Republican voters—who came to such a roiling boil they rattled the lid off the most industry-captured state government in the United States. When they chanted “This is what democracy looks like,” they were writing a caption for the rest of us, to understand and underscore the global importance of what they did in their state. It’s the transparency activists—the technocratic anticorruption nerds who have figured out that following the money doesn’t just unravel criminal schemes but traces corruption and grand-theft kleptocracy to its origins. It’s all the reporters around the world who are doing the difficult and dangerous work of telling the story of corruption and oil and gas depredations. It’s the opposition activists like Alexei Navalny and the martyred Boris Nemtsov who haven’t just opposed Putin’s government; they have exposed his government’s secret wealth, the massive rip-off of the Russian people that has made Putin likely the richest man on earth and has made his gangsterism a ravening global menace.

  Containment is the small-c conservative answer to the problem at hand—democratically supported, government-enforced active and aggressive containment. It’s the only way to fight against the industry’s reliance on corruption and capture. The question isn’t whether it’s doable; it is. It’s just whether we’ll have the focus and the persistence to actually do it. Powerful enemies make for big, difficult fights. But you can’t win if you don’t play, and in this fight it’s the stakes that should motivate us: Democracy either wins this one or disappears. It oughtta be a blowout.

  To the bots and trolls, all of you, with love

  Thank you to the great and good Mark Zwonitzer, without whom this book would not exist. Thanks to Laurie Liss for talking me into it, against my better judgment. Thanks to everyone at Crown, especially Rachel Klayman, Gillian Blake, Zachary Phillips, David Drake, Penny Simon, Melissa Esner, and Annsley Rosner. Something more than thanks is due the excellent staff of The Rachel Maddow Show, and Cory Gnazzo and Kelsey Desiderio in particular, for their limitless patience with me. I swear I will not do this again.

  I have noted within the text many of the authors, reporters, academics, government officials, historians, and oil and gas operatives who informed my own understanding of this story. But there are other sources that deserve recognition. What follows is meant not to be an all-encompassing list but to give you an understanding of where I went hunting for statistics, scholarship, expert analysis, official inquiry, and reportage, where I found the most treasure, and where you might do your own digging to learn more.

  One general note that applies to every chapter: For all the numbers cited throughout this book concerning production, consumption, imports, exports, and pricing of crude oil and natural gas at any given time, both domestically and around the world, I have relied on the official statistics provided by the U.S. Energy Information Administration. These, and much more, are accessible at eia.gov.

  INTRODUCTION

  Details of Vladimir Putin’s visit to New York City in 2003, including his schedule, transcripts of his speeches, and remarks, are available at the official English-language website of the Russian Federation presidency, en.kremlin.ru. This site also includes photographs and footage of public events. Aside from news reports on the history of Lukoil and its move into the U.S. market (including reporting in The Moscow Times), there is very useful information in the company’s annual reports and financial statements. Also helpful was the 2007 study “Lukoil: Russia’s Largest Oil Company,” sponsored by the James A. Baker III Institute for Public Policy at Rice University and the Japan Petroleum Energy Center and authored by the Financial Times Moscow correspondent and longtime petroleum industry watcher Isabel Gorst.

  Putin’s visit to the Lukoil station grand opening in Manhattan, including the lead-up and the aftermath, was covered in detail by the two New York tabloids—the Post and the Daily News. There is footage of the visit itself in the NBC News archives. Thomas Beller provided some of the richest and most telling detail of the Lukoil station grand opening at his slice-of-life New York City website Mr. Beller’s Neighborhood.

  Michael McFaul’s testimony about Putin and Russia is from a hearing before the U.S. House of Representatives Committee on International Relations’ Subcommittee on Europe. The transcript of the hearing, “Russia’s Transition to Democracy and U.S.-Russia Relations: Unfinished Business,” is available, among other places, at the Carnegie Endowment for International Peace website at carnegieendowment.org.

  CHAPTER ONE

  For information on the beginnings of the oil industry in America and on John D. Rockefeller’s place in it, I have relied on Daniel Yergin’s Prize: The Epic Quest for Oil, Money, and Power; Ron Chernow’s
Titan: The Life of John D. Rockefeller Sr., as well as Brian Lamb’s interview of Chernow on C-SPAN; and H. W. Brands’s American Colossus: The Triumph of Capitalism, 1865–1900. Also helpful were contemporaneous accounts of Rockefeller such as Ida Tarbell’s History of the Standard Oil Company, Samuel Milton Jones’s New Right, and Charles W. Eliot’s 1915 essay in The Atlantic Monthly, “National Efficiency Best Developed Under Free Governments.”

  Information and text from the decision in the case of Standard Oil Co. of New Jersey v. United States is readily available. The Legal Information Institute at Cornell University provides quick and easy access at www.law.cornell.edu.

  CHAPTER TWO

  Project Rulison (and Project Plowshares generally) were remarkably well documented in official U.S. government documents, studies, and investigations. Almost all of these are accessible at the Department of Energy’s Office of Legacy Management website, www.lm.doe.gov/​Rulison. Among the most comprehensive and most useful are the Atomic Energy Commission’s Project Rulison Manager’s Report from April 1973 and a remarkable 1970 paper titled “Economics of Nuclear Gas Stimulation,” whose lead author was G. W. Frank of the Austral Oil Company. Also helpful were accounts of the longtime head of the Atomic Energy Commission, Glenn Seaborg, including a collection of his speeches, Science, Man, and Change; a book co-authored with Benjamin S. Loeb, The Atomic Energy Commission Under Nixon: Adjusting to Troubled Times; and his recollections of interactions with President Richard M. Nixon and his staff available at the Department of Energy’s Lawrence Berkeley National Lab website: www2.lbl.gov/​Publications/​Seaborg/​NatService.htm.