May 22, 2000
GORE'S OIL MONEY
by KEN SILVERSTEIN © 2000, THE NATION http://www.thenation.com/
One of the world's hottest battles between indigenous groups and multinational oil companies is heating up in Colombia, where Occidental Petroleum is seeking to drill on land claimed by the 5,000-member U'wa tribe. Early this year, the Colombian government deployed several hundred soldiers to guard workers building a road to the multibillion-dollar project. That led to a clash in February when security forces used tear gas to break up an anti-Occidental demonstration of several hundred Indians. Three children reportedly drowned when they fell into a river as they fled from government troops. The U'was won at least a temporary victory on March 31, when a Colombian court ordered the government to stop Occidental from drilling on tribal land.
Meanwhile, an international campaign opposing Occidental's plan is also picking up steam. On April 28 about 100 demonstrators turned up at Occidental's annual meeting in Santa Monica and called on the company to halt the project. Activists have also picketed the offices of Fidelity Investments, which owns about 8 percent of Occidental's shares, and criticized Vice President Al Gore, whose family owns at least a quarter of a million dollars' worth of Occidental stock.
But government backing for Occidental's Colombia proposal runs far deeper than the Gore family's stock portfolio. The Nation has learned, from a government source and the internal memos of an Occidental lobbyist, that the Clinton Administration has been quietly helping the company--a generous donor to the Democrats in recent years--to win support in Colombia for its drilling plans. While Gore has strong ties to Occidental, the Administration's point man on the issue is Energy Secretary Bill Richardson, who last year traveled to Cartagena and met with government officials on the company's behalf. Richardson has also hired a former Occidental lobbyist to work in a key international-policy position at the Energy Department.
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Occidental has been eyeing the Colombian site, located in a lushly forested northern region near the town of Samore, for almost a decade. The company believes the Samore block holds 1.4 billion barrels of oil, which at today's prices would fetch about $35 billion on international markets. Occidental claims to have a strong environmental record in Colombia--already the number-seven supplier of American oil and sitting atop at least 2.6 billion barrels of untapped petroleum reserves--but its viewpoint is not widely shared. Oil spills from its Caño Limon pipeline, headquartered just north of U'wa land and repeatedly bombed by guerrillas, have badly polluted rivers and lakes. The Colombian Oil Workers' Union published a report in 1997 saying that Caño Limon is "the best example that petroleum exploitation should not be permitted in Samore at any price."
The Colombian government, desperate to attract foreign investment in its moribund oil industry, has been supportive of Occidental's plans. However, pressure from the U'was and their international supporters has had an impact. Last year, President Andres Pastrana agreed to increase dramatically the size of the U'wa reservation. In 1998 PR fallout stemming from the Samore project led Shell Oil, which had been partners with Occidental, to sell its stake.
For the U'was, opposition to Occidental amounts to a last stand. A 1998 report by Terry Freitas--one of three U'wa supporters from the United States killed by leftist guerrillas while visiting the tribe's territory last year--says that the Colombian government stripped the tribe of 85 percent of its land between 1940 and 1970. Tribal leaders say the U'was will commit collective suicide if Occidental is allowed to drill on their land. That may not be an idle threat. According to tribal lore, thousands of U'was jumped off a cliff in the seventeenth century in order to avoid submitting to the Spanish crown.
Roberto Perez, president of the Traditional Authority of the U'wa People, says the struggle over Samore is a symbol of the indigenous rights movement in Colombia. "The key issue for indigenous groups is defending our territory," he said during an interview in early April, when he came to Washington to press the U'wa case. "The Occidental project is an affront to our livelihood, our lives and our culture."
Traditionally a Republican firm, Occidental was linked to the Democrats for many years primarily through Gore's father, Senator Al Gore Sr. The elder Gore was such a loyal political ally that Occidental's founder and longtime CEO, Armand Hammer, liked to say that he had Gore "in my back pocket." When Gore Sr. left the Senate in 1970, Hammer gave him a $500,000-a-year job at an Occidental subsidiary and a seat on the company's board of directors. At the time of his death in 1998, Gore the elder's estate included hundreds of thousands of dollars' worth of Occidental stock. The Vice President is the executor of the estate, which still includes the stock and whose chief beneficiary is his mother.
But Occidental's funneling of money to the Gore family doesn't end there. In the sixties, the Gores discovered zinc ore near land they owned in Tennessee. Through a company subsidiary Hammer bought the land for $160,000--twice the amount offered by the only other bidder. He swiftly sold the land back to Al Gore Sr. and agreed to pay him $20,000 a year for mining rights. After receiving his first payment, Gore Sr. sold the land for $140,000 to Gore Jr., who has received a $20,000 check nearly every year since he acquired it. Strangest of all, Occidental has never actually mined the land. Al Jr.'s coffers swelled further in 1985 when he began leasing the land to Union Zinc, an Occidental competitor. (For a full account of the Gore-Occidental relationship, see The Buying of the President 2000 by Charles Lewis and the Center for Public Integrity.)
According to Neil Lyndon, who worked on Hammer's personal staff and ghosted his memoirs, Witness to History, the Occidental chieftain was as cozy with Gore Jr. as he was with Gore Sr. When he came to Washington, Hammer regularly met Gore for lunch or dinner. "They would often eat together in the company of Occidental's Washington lobbyists and fixers who, on Hammer's behest, hosed tens of millions of dollars in bribes and favours into the political world," Lyndon writes. Gore also hosted Hammer for Ronald Reagan's second inaugural and won him a prominent spot when George Bush was sworn in as President in 1989.
Hammer's death the following year did not end the back-scratching between Occidental and Gore. In 1992 Occidental loaned the Presidential Inauguration Committee $100,000 to help pay for the ceremony. Four years later, the company gave $50,000 in soft money to the Democrats in response to a phone solicitation from Gore. All told, Occidental has donated nearly half a million dollars in soft money to Democratic committees and causes since Gore joined the ticket in 1992. For his current presidential run, Gore has raised $92,000 from the oil and gas industry. Occidental is his number-two donor in that category, with company executives and their wives donating $10,000 to fuel Gore's campaign.
Occidental's investment in Gore has paid rich dividends. In late 1997 the Vice President championed the Administration's $3.65 billion sale to the company of the government's interest in the Elk Hills oilfield in Bakersfield, California, the largest privatization of federal property in US history. On the very day the deal was sealed Gore gave a speech lamenting the growing threat of global warming. Gore also maintains a close friendship with Occidental CEO Ray Irani. In 1996 the latter spent the night in the Lincoln Bedroom. Two days later his company donated $100,000 to the DNC. In 1994 Irani traveled with Commerce Secretary Ron Brown on a trade junket to Russia. Four years later, Irani was invited to a state dinner at the White House for Colombian President Pastrana.
The Clinton Administration says that since no US government money is financing Occidental's project in Samore, it will take no position on the company's investment. "It's a matter that involves the internal policies of another country," says Laura Quinn, a spokeswoman for the Vice President. Gore writes off his family's stock holdings in the company as an inheritance, and Quinn says that the Vice President "has not made a decision proactively himself to make investments."
Privately, the Administration has allied itself with the company's cause. The key figure here is Richardson, who like Gore enjoys warm ties to Occidental. When Bangladeshi Commerce Minister Tofail Ahmed came to the United States for a visit in June 1998, Robert McGee, a lobbyist for Occidental, wrote to the Administration seeking meetings for him. (Occidental is one of many US energy companies eager to tap into Bangladesh's huge natural gas reserves.) Richardson, then the US ambassador to the United Nations, answered the call and met the minister. In October 1998, two months after Richardson had moved on to the Energy Department, McGee dropped him a note along with tickets to the Armand Hammer United World College Reception. (McGee's letters were listed in a summary log of contacts between Occidental and the Energy Department, which I obtained under a Freedom of Information Act request filed eight months ago. The log contains only one-sentence descriptions of the contacts in question. Despite repeated promises, copies of the documents themselves still have not been released.)
Last March Richardson hired a longtime Occidental lobbyist, Theresa Fariello, to serve as his deputy assistant secretary for international energy policy, trade and investment. While working for Occidental, Fariello, according to disclosure forms, lobbied the Energy Department on the company's interests in Colombia, as well as in Ecuador, Russia, Nigeria and Qatar. According to her current job description, Fariello "directs department relations with other nations, develops international energy policy and analyzes world energy market developments." (The summary log obtained under the FOIA refers to an August 1998 letter from Fariello to Richardson. The letter was given a priority level of "Important," though the subject was not given.)
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The revolving door has also been spinning in the opposite direction. To promote its Colombia plans, in 1997 Occidental hired Scott Pastrick of the PR firm Black, Kelly, Scruggs & Healey. Treasurer of the DNC during the scandal-racked 1996 campaign, Pastrick is an old friend of Gore's. His role in '96 included preparing "call sheets" that Gore used to brief himself on donors before making fundraising calls. (Pastrick got a bit of bad press for asking Johnny Chung to contribute $125,000 at a 1995 fundraiser at the home of Steven Spielberg.)
Though no longer at the DNC, Pastrick retains remarkable access to the Administration. Last year he and his wife, Courtney, were invited to the state dinner for Japanese Prime Minister Keizo Obuchi, and they've given $4,000 to the Gore 2000 campaign. More important, says a government source, Scott Pastrick has an easy line to key Energy Department staffers, including Richardson's deputy chief of staff for international policy, Rebecca Gaghen. Pastrick has not returned phone calls seeking comment.
Occidental also appears to be well plugged in at the US Embassy in Bogotá. The Nation obtained an embassy briefing paper on Samore, which puts a favorable spin on the project. According to the embassy, Occidental is carrying out programs in conjunction with the Samore project that "will directly benefit the [U'wa] and will also contribute to upgrade their infrastructure." Such an enthusiastic appraisal is no coincidence, since the embassy received the briefing paper directly from Occidental--the company's fax number is still at the top of each page, conveniently identifying the sender--and then put it out as its own.
Occidental's drilling proposal is also being pushed by the US-Colombia Business Partnership, an organization headed by Michael Skol, who until early 1997 was the Clinton Administration's deputy assistant secretary of state for Latin America. Eleven major US companies with interests in Colombia, including Occidental, fund Skol's outfit.
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All this firepower came together last spring, when Richardson headed to Colombia to speak at a forum organized by the Colombian Energy and Mines Ministry. While there, he talked up the Occidental project with government officials, including President Pastrana. According to the US government source, who was in Colombia at the time, Richardson spent the night at a presidential residence in Cartagena, where he and Pastrana were up until 2 am drinking rum and gabbing. "It was a real lovefest," this person says. "They really hit it off."
Richardson's trip was a huge success for Occidental. Shortly after the secretary's return, Pastrick reported in a Black, Kelly memo that Richardson had held "positive" talks with Colombian officials about the Samore project and that "things are moving in the right direction." The FOIA log shows that on May 4, 1999, less than two weeks after sipping rum with Pastrana, Richardson wrote a letter to Colombian Energy Minister Luis Carlos Valenzuela urging him to improve the climate for multinationals seeking to invest in Colombia's energy sector. Five months later the Colombian government awarded Occidental the first exploratory-drilling license for the Samore block. (In pressuring Valenzuela, Richardson was pushing on an open door: This past January Valenzuela resigned in response to charges that he pressured a state energy company to sell cheap natural gas to an affiliate of the US energy company Enron.)
Occidental and the Administration are also cooperating in promoting President Clinton's controversial $1.6 billion package in military aid for Bogotá. (Occidental already pays the Colombian military to keep an army base next to a refinery it runs in the country.) The aid request came in the wake of three reports--from the US State Department, the United Nations and Human Rights Watch--that slammed Pastrana's government for human rights abuses and for failing to cut ties between the army and paramilitary death squads. According to the Human Rights Watch report, at least seven senior military officials in Colombia who have links to paramilitary units are graduates of the US Army's School of the Americas in Fort Benning, Georgia.
On February 15 an Occidental vice president, Lawrence Meriage, testified before a House subcommittee in favor of the package, saying that Colombia's military "lack mobility, equipment and, perhaps most serious, they lack the intelligence-gathering capabilities afforded to their better-funded adversaries." Meriage took the opportunity to denounce opposition to his company's Samore project, which he said is limited to "extremists" in Colombia and "several fringe nongovernmental organizations in the US." The latter--which Meriage didn't name but which include the Rainforest Action Network and Project Underground--are "de facto allies of the subversive forces that are attacking oil installations, electric power stations and other legitimate business enterprises," the Occidental executive said.
The Clinton Administration's cozy relationship with Occidental stands in sharp contrast to its posture toward the U'was. Robert Perez of the U'was met with a number of members of Congress during his April visit but failed, despite repeated requests, to gain an audience with Gore. The same thing happened in 1997, when Gore stiffed Roberto Cobaria, a tribal official then visiting the capital. "We can generally get meetings with the Administration, but it's a question of who comes to the meetings," says David Rothschild of Amazon Alliance, who accompanied Cobaria during his 1997 Washington trip. "We rarely get anyone other than low-ranking officials. That gives you an idea of the level of interest the Administration has in the issue."
Gore has also rebuffed members of his own party who have asked him to support the tribe. On February 22 Representative Cynthia McKinney wrote to Gore and urged him to meet with U'wa leader Perez and to support an immediate suspension of the Samore project. "I am concerned that the operations of oil companies, and in particular Occidental Petroleum, are exacerbating an already explosive situation, with disastrous consequences for the local indigenous people," she said. "I am contacting you because you have remained silent on this issue despite your strong financial interests and family ties with Occidental." McKinney wrote to Gore again on March 30 to complain that he had not responded to her earlier letter. A few days later, Gore finally dropped a note to McKinney to say that, regrettably, he didn't have the time to meet with Perez.
Ken Silverstein is a freelance writer based in Washington, DC. His book Private Warriors, which examines the post-cold war arms trade, is being published this month by Verso. Research assistance was provided by the Investigative Fund of the Nation Institute.