by Peter Maass
“We hope this letter finds you well”: Contents of the letter were detailed at the hearing and a copy of the letter was provided to the author. The financial details of Obiang’s accounts at Riggs come from the previously cited Senate report, “Money Laundering and Foreign Corruption.”
“Sir,” Kareri wrote: A copy of the letter was provided to the author.
The president’s playboy son: See “African Minister Took Cut of Oil Contracts,” Financial Times, October 25, 2006.
He noted that he was: According to a copy of the affidavit received by the author. In “African Minister Took Cut of Oil Contracts,” Financial Times reported on the affidavit.
“by far the most generous”: See previously cited IMF report “Equatorial Guinea: Recent Economic Developments.”
And often, in Equatorial Guinea: See the IMF report “Republic of Equatorial Guinea: 2003 Article IV Consultation—Staff Report,” p. 11. Copy posted at www.imf.org/external/pubs/ft/scr/2003/
cr03385.pdf.
“A significant earner of income”: See the previously cited Senate Permanent Subcommittee Report on Investigations, p. 50.
When its report was published: The hearing was held on July 15, 2004.
Those sessions were private: The meeting took place on April 12, 2006, in
Washington, D.C. 48 A torturer was receiving: See “Mba’s House: Bush Administration Renting Embassy Property from Known Torturer,” posted at Harpers.org on October 25, 2006.
3 Rot
Even Senegal: Haiti and Congo ranked higher than Nigeria in a United Nations survey of human development. As Michael Watts of the University of California at Berkeley noted in “Sweet and Sour,” a paper published in 2008 by the Institute of International Studies at UC-Berkeley, “According to former World Bank President Paul Wolfowitz, at least $100 billion of the $600 billion in oil revenues accrued since 1960 have simply ‘gone missing.’ Nigerian anti-corruption czar Nuhu Ribadu claimed that in 2003 70percent of the country’s oil wealth was stolen or wasted; by 2005 it was ‘only’ 40 percent. By most conservative estimates, almost $130 billion was lost in capital flight between 1970 and 1996. Over the period 1965-2004, the per capita income fell from $250 to $212 while income distribution deteriorated markedly. Between 1970 and 2000, the number of people subsisting on less than one dollar a day in Nigeria grew from 36 percent to more than 70 percent, from 19 million to a staggering 90 million. Over the last decade GDP per capita and life expectancy have, according to World Bank estimates, both fallen. The Bank put it this way in 2007: ‘Per capita GDP in PPP [purchasing power parity] terms fell 40 percent from $1,215 in 1980 to $706 in 2000. Income poverty rose from 28.1 percent to 65.5 percent and other indicators of welfare—notably access to education and health—also declined.’ According to the United Nations Development Program, Nigeria ranks in terms of the Human Development Index—a composite measure of life expectancy, income, and educational attainment—number 158, below Haiti and Congo.”
The World Bank estimates: See “Worse Than Iraq?,” Atlantic Monthly, April 2006.
A few years ago: See the Human Rights Watch report, “Criminal Politics,” footnote on p. 49. Copy posted at www.hrw.org/en/reports/2007/10/08/
criminal-politics.
As for the money: See the International Crisis Group report “Nigeria: Want in the Midst of Plenty,” published July 19, 2006. Posted at www.crisisgroup.org/home/index.cfm?id=4274.
This is known, in economics: For more details on the Dutch disease and its solutions, see Joseph Stiglitz’s “We Can Now Cure Dutch Disease,” the Guardian, August 18, 2004, and Christine Ebrahim-Zadeh’s “Dutch Disease: Too Much Wealth Managed Unwisely,” Finance and Development, March 2003, as well as Paul Collier’s The Bottom Billion: Why the Poorest Countries Are Failing and What Can Be Done About It, pp. 38–40.
“Oil kindles extraordinary emotions and hopes”: Ryszard Kapuscinski, Shah of Shahs, P. 35.
His revolt was crushed in twelve: For a description of Boro’s rebellion, including the use of Shell’s boats, see Karl Maier’s This House Has Fallen: Midnight in Nigeria, pp. 122–125, and John Ghazvinian’s Untapped: The Scramble for Africa’s Oil, p. 24.
In 1994, as martial law: See “Nigeria Crude: A Hanged Man and an Oil-Fouled Landscape,” by Joshua Hammer, Harper’s Magazine, June 1996. Hammer notes that Saro-Wiwa’s comment was in response to a leaked memo from the Nigerian military that stated, “Shell operations still impossible unless ruthless military operations are undertaken for smooth economic activities to commence … Recommendations: Wasting operations during MOSOP [Movement for the Survival of the Ogoni People] and other gatherings making constant military presence justifiable. Wasting targets cutting across communities and leadership cadres especially vocal individuals of various groups.”
With casually violent ways: See “Nigeria’s Trigger Happy Police,” BBC May 11, 2001. Posted at www.news.bbc.co.uk/2/hi/africa/
1322017.stm.
“Dependence on primary commodities”: The report by Collier and Anke Hoeffler, “Greed and Grievance in Civil War,” was published in Oxford Economic Papers 54 (2004), pp. 563–95. Collier’s description of the findings is contained in a paper, “Economic Agendas of Civil Wars,” which he presented at a November 30, 2001, meeting in Bonn, Germany, convened by the German Foundation for International Development and the Federal Ministry for Economic Cooperation and Development.
A dozen people were reported killed: My description of the fighting in Tombia comes from a variety of sources, including local residents and the following news stories: “Self-styled Rebel Seeks Independence for Oil-Producing Niger Delta,” published on July 16, 2004, by IRIN, the United Nations-affiliated news agency; “Villagers Flee Troops, Militia Fighting Near Nigerian Oil City,” by Dulue Mbachu, Associated Press, September 10, 2004; and “Politics of Oil Inflame Age-old Delta Hatreds,” by Dudley Althaus, Houston Chronicle, December 17, 2004.
According to a joint report: See “Strategic Gas Plan for Nigeria,” a joint report published in February 2004 by the UNDP and World Bank Energy Sector Management Assistance Programme. Posted at www.esmap.org/filez/pubs/58200861713_
strategicgasplanfornigeria.pdf.
According to official statistics: Cited in “Curse of the Black Gold,” by Tom O’Neill, National Geographic, February 2007.
Throughout the delta: For a description of bunkering and the amounts of oil involved, see the Human Rights Watch report “The Warri Crisis: Fueling Violence,” published December 17, 2003, and posted at www.hrw.org/en/node/12203/section/i. It states, “Theft of crude oil, known as illegal oil bunkering, accounts for perhaps 10 percent of Nigeria’s daily production and is a highly organized operation. Governor Ibori has stated that as much as 300,000 bpd [barrels per day] (or 15 percent of production) are lost because of bunkering activities. The major oil companies operating in Nigeria have stated that this is likely an overestimate; for the whole Niger Delta, illegal oil bunkering probably reaches a maximum 150,000 or 200,000 bpd. But these figures also fluctuate significantly, responding to periodic efforts to police the riverine areas more effectively. There are other claims that the theft of oil is greatly underreported, reaching more than 250 million barrels for the year 2002 (that is, more than 650,000 bpd). The illegally bunkered oil is sold to refineries in Nigeria, in nearby West African states (including Côte d’Ivoire and Cameroon), or further afield.”
Two navy admirals: See “Nigerian Admirals Pay the Price for Stealing Captured Oil Tanker,” London Times, January 8, 2005.
Shell faced a public relations disaster: A lawsuit against Shell is nearing trial in a federal court in New York. The suit accuses Shell of encouraging systematic human rights violations in Nigeria. See “14 Years After Ken Saro-Wiwa’s Death, Family Points Finger at Shell in Court,” The Guardian, May 27, 2009. Shell denies the accusations. The company has stated that before Saro-Wiwa’s 1995 trial, “We said Ken Saro-Wiwa had a right to freely hold and air his views. After the trial verdict was a
nnounced, we said publicly that carrying out the death penalty would damage the process of reconciliation in Ogoni land.” Shell’s statement is available at www.shell.com/home/content/nigeria/
about_shell/issues/human_rights/
hum_rights.html.
The report was remarkable: Shell has not published an official version of the report, but the leaked draft is widely available on the Internet. National Public Radio has posted a copy at www.npr.org/documents/ 2005/aug/shell_wac_report.pdf.
In MEND’s first months: See “Nigerian Militants Free Italian, Hold Three Other Foreigners,” Agence France Presse, January 18, 2007; “In Nigeria’s Violent Delta, Hostage Negotiators Thrive,” by Chip Cummins, The Wall Street Journal, June 7, 2007; “The Risk Premium,” by Mimi Swartz, Texas Monthly, June 2008; and “Blood Oil,” by Sebastian Junger, Vanity Fair, February 2007.
4 Contamination
It is an irony: For an excellent review of the link between oil roads and deforestation, see “Causes and Consequences of Deforestation in Ecuador,” published in 2001 by the Center for the Investigation of Tropical Rainforests. The study notes, “Since the early 1970s about 30 percent of the Ecuadorian Amazon has been deforested and/or polluted and entire indigenous cultures, such as the Cofan and Huaorani, have been placed in danger of extinction as a result of the oil industry and accelerated colonization facilitated by the oil roads.” Copy posted at www.rainforestinfo.org.au/projects/
jefferson.htm.
More than 18 billion gallons: Texaco, which is now owned by Chevron, has an extensive Web site that offers the company’s account of what happened; it’s located at www.chevron.com/ecuador/. The company’s principal opponents have their own Web site, located at www.chevrontoxico.com.
The first offering from Texaco: See “Tribe Members Didn’t Resist Gifts of Food, Fuel,” in Newsday, May 22, 2005.
“complete autonomy”: A copy of the affidavit was provided to the author. See also “Ecuadoreans Want Texaco to Clear Toxic Residue,” New York Times, February 1, 1998.
Thanks to oil: See “Drilling into Debt,” published in 2005 by Oil Change International.
Instead of investing: The default in 1999 was for reasons of poverty—Ecuador’s strapped government did not have the funds to meet its debt obligations. In 2008, the problem wasn’t money as much as law and politics—President Rafael Correa described the debts as “immoral and illegitimate” because, his administration said, they were negotiated on unfair terms and without proper authorization. See “Correa Defaults on Ecuador Bonds, Seeks Restructuring,” by Stephan Kueffner, Bloomberg, December 12, 2008, and “Ecuador’s Debt Default: Exposing a Gap in the Global Financial Architecture,” by Neil Watkins and Sarah Anderson, Foreign Policy in Focus, December 15, 2008.
Rockefeller then returned: See Yergin, The Prize, p. 109.
Its appeals delayed payment: The New York Times reported on the ruling in a June 26, 2008, story, “Damages Cut Against Exxon in Valdez Case.” For the number of plaintiffs who have died since the spills, see “Exxon Valdez Decision Expected in the Next Four Weeks,” Alaska Daily News, June 1, 2008.
In 2008, two Chevron lawyers: See “Chevron Lawyers Indicted in Connection with Ecuador Case,” by Dan Slater, Wall Street Journal online, September 15, 2008. Posted at www.blogs.wsj.com/law/2008/09/15/
chevron-lawyers-indicted-in-connection-with-ecuador-case/.
The accusation made national headlines: See “Woes Mount for Oil Firms in Ecuador,” by Kelly Hearn, Christian Science Monitor, February 9, 2006.
And the people of Sarayaku were ready: For a useful overview of the Sarayaku standoff, see “The New Amazon,” by Marisa Handler, Orion, January 2005.
5 Fear
“Ordinary people”: Stanley Milgram, Obedience to Authority, p. 6.
“He steals money from California”: See “Word for Word/Energy Hogs,” New York Times, June 13, 2004.
James Giffen was the son: An in-depth description of Giffen’s career and deal making is contained in Steve LeVine’s excellent book The Oil and the Glory. Portions of my account are drawn from LeVine’s work.
According to the Justice Department’s indictment: The U.S. Southern District Prosecutor posted an announcement of the indictment of Giffen and J. Bryan Williams at www.usdoj.gov/usao/nys/pressreleases/
April03/giffenwilliams.pdf.
As a convicted felon: Seymour Hersh wrote a lengthy story, “The Price of Oil” (New Yorker, July 9, 2001), that delved into the activities of Williams and Giffen, who each told me they disagreed with the article’s portrayal.
“some of the payments”: See “Manhattan Judge Rules on Pre-trial Motions in ‘Kazakhgate’ Case,” by Marlena Telvick, July 9, 2004, published by International Freedom Network. Copy posted at www.ifn.org.uk/article.php?sid=6.
“Bullshit”: See Anne Applebaum, “Fond Memories of Stalin,” Slate, June 5, 2000.
Tantalizingly, hotel residents could see: My description of the Intourist draws on interviews with oil executives who were there in the 1990s. I have also drawn from the work of journalists Thomas Goltz and Steve LeVine, who reported from Baku in the 1990s, as well as “Azerbaijan’s Riches Alter the Chessboard,” by Dan Morgan and David B. Ottoway, Washington Post, October 4,1998.
This was the gala evening: The conference was organized by Cambridge Energy Research Associates, a consulting firm headed by Daniel Yergin.
He was rewarded: See “For Leading Exxon to Its Riches, $144,573 a Day,” New York Times, April 15, 2006.
6 Greed
American oil firms and executives: After the start of World War II, Texaco secretly shipped oil to Germany via Colombia. The firm’s president, Torkild Rieber, even traveled to Berlin to meet Hermann Goering and agreed to convey a proposal for the surrender of Britain. Although President Franklin D. Roosevelt told Rieber to cease all contact with the Germans, Texaco secretly paid the salary and expenses of a German agent who came to New York to persuade American businessmen not to supply Britain with weapons and other materiel. The German was even given an office in Texaco’s headquarters in the Chrysler building. Once Texaco’s ties to Hitler’s regime were disclosed, the firm’s share price tumbled and Rieber was forced to resign. See Anthony Sampson’s The Seven Sisters: The Great Oil Companies and the World They Shaped, pp. 78–83. As Sampson wrote of the oil scandals in the wartime era, “It is not necessary to see these three scandals as evidence of any special moral turpitude on the part of the oil leaders: they were brigands of their time, trying to extend a greedy international industry across the barriers of war. They were men who did not know when to stop, and there was very little to stop them. But their ruthlessness and autocracy did reveal very sharply the basic uncontrollability of oil, and the ability of the industry to defy national governments.”
As Interior Secretary Harold Ickes: He wrote the remark in one of his diaries. See Sampson, The Seven Sisters, pp. 94–95.
Cheating continues in America: For example, in 2008 the Interior Department’s inspector general issued reports that accused more than a dozen current and former officials in the department’s royalty-collecting service of engaging in drug use and illicit sex with employees of energy firms, as well as accepting meals, ski trips, sports tickets and golf outings from them. The report said the acceptance of banned gratuities occurred “with prodigious frequency.” See New York Times, “Sex, Drug Use and Graft Cited in Interior Department,” by Charlie Savage, September 10, 2008, and Washington Post, “Report Says Oil Agency Ran Amok,” by Derek Kravitz and Mary Pat Flaherty, September 11, 2008.
On occasion these missing links: Details of the scheme are drawn from a number of published sources, including “U.S. Targets Overseas Bribery,” by ProPublica and PBS’s Frontline, September 9, 2008, and “Out of Africa: In Halliburton Nigeria Probe, a Search for Bribes to a Dictator,” by Russell Gold and Charles Fleming, Wall Street Journal, September 29, 2004.
In 2009, Halliburton admitted: See “Halliburton, KBR Settle Bribery Allegations,”
by Zachary A. Goldfarb, Washington Post, February 12, 2009.
Tesler has been indicted: For Tesler’s indictment, see the Department of Justice announcement posted at www.usdoj.gov/opa/pr/2009/March/09-crm-192.html.
But Norway and Canada: The legislators were Pete Kott, a former Alaska House speaker, and Vic Kohring, a former state representative. The Anchorage Daily News has posted stories about their convictions at www.community.adn.com/adn/node/112569.
The Dodges filed a lawsuit: Michael Skapinker wrote about Dodge v. Ford Motor Co. in “Fair Shares?,” Financial Times, June 11, 2005. In an informative exchange, several distinguished law professors had an online debate about the meaning of Dodge v. Ford; see www.businessassociationsblog
.com/lawandbusiness/comments/does_
dodge_v_ford_motor_co_remain_canon/.
Milton Friedman championed: The article was published in the New York Times Magazine on September 13, 1970.
In 1991 Condoleezza Rice joined the Chevron board: See Condoleezza Rice: An American Life, by Elisabeth Bumiller, pp. 109–10.
“Today’s energy industry earnings”: New York Times, January 19, 2006.
The same year, without any mention: See Justin Fox, “No More Gushers for ExxonMobil,” Time, May 31, 2007.
“Would ExxonMobil be willing”: Today, May 3, 2006.
“left the church”: Darcy Frey, “How Green Is BP?,” New York Times Magazine, December 8, 2002.
In 2005, a BP refinery in Texas: See “Faults at BP Led to One of Worst US Industrial Disasters,” Financial Times, December 18, 2006, and “BP Paints Grim Picture of Texas Refinery Before Blast,” Financial Times, March 19, 2007.
“For a company that claims”: See “Behind the Spin, the Oil Giants Are More Dangerous Than Ever,” Guardian, June 13, 2006.
“What we stand to gain”: See “U.S. Accuses BP of Manipulating Price of Propane,” Wall Street Journal, June 29, 2006.
As the presses rolled: See “The Tragic Departure of a Gay CEO,” Newsweek, May 3, 2007.
“Corporations have to be responsive”: See “Five Who Laid the Groundwork for Historic Spike in Oil Market,” Wall Street Journal, December 20, 2005.