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David Ignatius on oil and American politics

David Ignatius is one of the pillars of the Washington press establishment.
He currently serves as financial columnist for the Washington Post, where he
was formerly the foreign affairs editor.  In September, Ignatius will become
the Executive Editor of the International Herald Tribune

Ignatius is also a novelist, specializing in tales of espionage and intrigue

In 1994, he wrote "Bank of Fear" (the title itself a nod to Samir
al-Khalil's "Republic of Fear") whose heroine is a sympathetically drawn
Iraqi-expatriate.  The back cover of this mystery features blurbs from not
one, not two, but three former Directors of the CIA (Robert Graves, Richard
Helms, and William Colby) - plus writer Seymour Hersh.  The Directors'
accolades are especially stunning in view of the plot, which presents
America's foreign policy as directed by a secret group whose chief concern
is access to oil ... and which reveals Saddam Hussein as having been
recruited by the CIA.  ((Don't recall ever hearing of agreement among three
former Directors of the CIA ... <g>))

More to the point, in today's Washington Post, David Ignatius writes about
the all-too-murky confluence of politics and big oil, which give every
appearance of being "inextricably bound".  Personally, I've always believed
"it's all about oil" to be a gross simplification.  But I find these
writings intriguing, nonetheless.

Drew Hamre
Golden Valley, MN USA

Political Oil Slick

By David Ignatius
Sunday, July 30, 2000; Page B07 

Politics is ultimately about personal relationships--the handshakes and
winks that provide a semblance of trust among often untrustworthy people.
The oil business is that way too, and maybe that's why the two have become
inextricably bound together. 

We're now facing the bizarre prospect of a presidential campaign in which
three of the four candidates have intimate personal links to the oil
industry. George W. Bush made his start running a flaky little
oil-exploration company; Richard Cheney, the GOP vice presidential
candidate, has for the past five years been CEO of Halliburton Inc., a huge
oil-services company that thrived on Cheney's global contacts; and Al Gore's
biggest asset is a family trust that holds hundreds of thousands of dollars
of stock in Occidental Petroleum Corp., where his father worked for many

The Democrats hope to make the Bush-Cheney oil connection a winning campaign
issue, and there's certainly some tantalizing material to work with. But
Gore's Oxy connection raises some uncomfortable questions, too.

What's clear, looking at the three candidate's relationships with the
industry, is that oil is a kind of original sin in American politics. It's a
big, messy (sometimes dirty) business, and it has touched everyone and
everything in our political system, from the days of the Rockefellers to
Bush and Gore.

The industry has become so intertwined with U.S. foreign policy over the
years that sometimes--as in Operation Desert Storm (which Cheney oversaw as
defense secretary) or the recent scramble to secure Caspian Sea oil (which
has been a Gore project)--it's impossible to tell the difference.

Bush's oil connection is the most quixotic, because he was such a failure at
the business. He started his first company, Arbusto Energy Inc., in 1977,
and got friends to invest in various drilling ventures that mostly went
nowhere. (Thanks to tax loopholes, it generated more than twice as much in
tax deductions as in profits.) Friendly investors arranged a 1984 deal in
which Arbusto was acquired by another drilling company called Spectrum 7;
it, in turn, was bought in 1986 by Harken Oil and Gas, which seemed to
recognize that Spectrum's biggest asset was the Bush name.

Cheney's oil resume is more distinguished, and it illustrates how oil and
politics can be nearly inseparable. Despite his lack of experience in the
industry, he was named Halliburton's CEO in 1995, three years after leaving
the Pentagon. Cheney's real drawing card was the network of contacts he had
developed during the Persian Gulf War. Grateful Saudis and Kuwaitis were
eager to fete Cheney--and to shower his company with contracts.

Cheney, like most oilmen, has been unhappy when human rights or other
foreign policy issues intrude on the pragmatic needs of the industry. And he
has opposed U.S. sanctions that prevented oil companies from doing business
with Iraq, Iran and Libya. According to Petroleum Finance Week, he told a
1996 energy conference in New Orleans: "The problem is that the good Lord
didn't see fit to put oil and gas reserves where there are democratic

Cheney's raw pragmatism also extends to Russia, where Halliburton recently
was involved in a controversial deal with an oil company called Tyumen Oil.
Halliburton sought a $292 million loan guarantee from the U.S. Export-Import
Bank to help refurbish an oil field for Tyumen. The Clinton-Gore
administration, stung by charges that it had been soft on Russian business
"oligarchs," waged a pressure campaign to persuade Ex-Im to drop the Tyumen

The Cheney nomination may thus undermine the Bush campaign's plans to attack
Gore as soft on Russian corruption. Hard to be indignant when it turns out
that Cheney was lobbying hard to help Russians the Gore crowd regarded as

Gore's oil connection is hereditary, and it may seem unfair to tar him with
the sins of his father. But if he attacks Bush the elder, then the Oxy link
will be fair game.

A devastating account of the elder Albert Gore relationship with the late
chairman of Occidental, Armand Hammer, is contained in Edward Jay Epstein's
1996 book, "Dossier." He decribes how Hammer first made Gore a partner in a
cattle-breeding business back in 1950, when Gore was a congressman,
providing him with "a substantial profit." The FBI was wary of going after
Hammer's connections with the Soviet Union, Epstein notes, because he had
influential "political support," including from Gore.

Two years after Gore's father left the Senate in 1970, Hammer made him
chairman of a coal company Occidental owned, Island Creek Coal. Young Al
Gore knew that Hammer was a family friend and benefactor. He invited Hammer
as his guest to the 1981 inauguration of Ronald Reagan, according to
Epstein. And according to a new biography by Bill Turque, Gore took in more
than $300,000 through the early 1990s--his largest source of income outside
his congressional salary--from a land deal his father had made with Hammer
in 1973.

Oil and politics mix all too well, as these three case studies show. Oil
isn't a bogeyman, to be sure; it's a legitimate business. But it shouldn't
have a secret key to the White House.

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