Reading: Private Empire: Exxon-Mobile and American Power – Steve Coll

When the oil tanker Exxon Valdez went aground in Alaska’s Prince William Sound in 1989, releasing more than 240,000 barrels of crude into a pristine environment, there was more behind it than an alcoholic captain. Exxon had downsized 40% of its personnel in a cost-cutting spree that included safety and environmental departments. At the same time the Reagan administration had downsized the coast guard as part of its near-fanatic belief in privatization and less government. The disaster thus was worse than it might have been, both in unpreparedness and in speed of response. The heartbreaking consequences of this accident were an environmental nightmare, despoiling the Sound and its teeming variety of life for years to come. And, as Alexander Cockburn pointed out in The Nation, even if the ship had made it safely, the oil it carried would still have ended up polluting our life system.

Introducing his book with the Valdez story, Coll goes on to a brief history of Exxon. At its peak Standard Oil controlled 90% of the U.S. oil market. In 1911 the Supreme Court broke up the oil giant on anti-trust grounds. It became Esso, then Enco and later, Humble Oil before settling on Exxon in 1973. The climate at the company strayed not far from the ethic of founder John D. Rockefeller, characterized by discipline, rigor, technological research and unsentimental competition, with a strong dose of a priggish Presbyterianism. Exxon was quite nearly a cult.

Lee Raymond, chair and CEO, had a corporate jet at his disposal, body guards, a winter home in Palm City, Florida, an 8600 square foot home in Dallas, a $3.8 million dollar spread in Palm Springs, California, a $7 million dollar get away in Arizona… you get the picture. Member in good standing of the 1%. For entertainment he chased a little white ball, that he had hit with a stick, around sprawling, manicured lawns and, when he caught up to it, he hit it again (sorry Todd, I couldn't resist that). Also he shot feathered creatures from the sky, sometimes in company of Richard Cheney. I guess that’s fun. Humiliating and badgering underlings was another favorite activity but that would be business, not pleasure. It earned him the nickname, “Iron Ass” as he created a climate of terror and deference in the workplace. Mixing the two though is not forbidden as Raymond and spouse traveled together, he taking care of business then joining her for the shopping. They have quite an art collection, it is said – and a lot of wall space.

Raymond’s predecessor as well as mentor, Lawrence Rawl, together rejected the “environmentalism” of Exxon from the 50-60s, however limited that may have been. They also went on a cost-cutting spree that included eliminating 75% of their 1300 employees in the Manhattan headquarters building, selling the building for $400 million and relocating to Dallas. The cost-cutting also axed the aforementioned environmental staff. Raymond’s undisputed brilliance and prodigious memory were unquestionably in the service of the corporation's bottom line, as all good CEOs, by definition, are.

With the ending of colonialism and the fall of the Soviet Union came a nationalism that, even among corrupt leaders, precluded the oil companies from ownership of new oil fields. Competition from Russia and China had its effect also, creating a loss of major fields and fewer possibilities for gaining new ones. Oil company stock prices are affected by “booked reserves”, oil they already own or have under contract. Over one billion barrels have to be booked each year to avoid the appearance of shrinking value. Exxon used tar sands oil in their press releases and other promotional materials to inflate stock value – not illegal, since they left tar sands off the required annual Securities and Exchange Commission (SEC) reports. Tar sands is actually a mining rather than a drilling operation and as such is not booked reserves to the SEC. It showed though an Exxon willingness to fudge numbers to its advantage.

The situation of shrinking reserves and a sudden drop in oil prices in the 90s, created by dissension among OPEC members, led to a flurry of oil company mergers. Lee Raymond found a company who had what they lacked, booked reserves. Some of Mobil’s holdings were in unstable regions which necessitated dealing with corrupt and violent governments, maneuvering between civil war factions and the complication of human rights violations. Coll portrays Exxon, in its Nigerian and Indonesian operations as caught between a rock and a hard place. True, management was focused on profit and public statements such as,” Exxon is not the Red Cross.”, displayed a definite insensitivity but, as Coll sees it, Exxon was not explicitly complicit in human rights violations.

In Dallas Raymond had a neighbor, Dick Cheney of Haliburton. This relationship came in handy. When the Bush administration was appointed by the Supreme Court Raymond had a powerful ally he could drop in on whenever he was in Washington and needed a favor. Not that he had to coerce Cheney for the ex-Haliburton CEO fully embraced the corporate ethos, soon to fall into even more favor with Bush appointments to the court. Later Raymond, and other conservatives, were privately disenchanted with U.S. floundering in Iraq. But in the beginning they were quite pleased, ¾ of oil company campaign contributions having gone to the GOP. And Iraq offered an opportunity for enhancing those booked reserves. Raymond served on the Cabinet Task Force Cheney created to advise on energy policy. Environmentalists raged about the secrecy and exclusivity but got nowhere, business-as-usual in Cheney World. The resulting recommendations, given the makeup of the Task Force, were predictably based on energy company “needs”. It was meant to lay the ground for policy and legislation favorable to the oil sector. Cheney and Raymond kept each other informed, both meeting often with heads of state and international movers and shakers. Presumably Cheney had no problem with Raymond’s statement that his first loyalty was to Exxon, not the United States. Cheney and Raymond were also joined at the hip when it came to climate change denial.

The title of Coll’s book, Private Empire: ExxonMobil and American Power, ties the two together, as does the content, no great surprise to critics of capitalism. To the international corporation the U.S. government is merely a tool to be used when needed, lobbied but otherwise ignored when not, just another employee. Cheney/Bush would find nothing offensive in this attitude. They were merely on sabbatical from the corporate world, come to straighten out the misguided sentimentalists who saw government as representative of the people.

Coll goes on to discuss Exxon holdings and adventures in Equatorial Guinea and Chad. Exxon took great risks in its quest to secure oil, and one can hardly withhold admiration for their persistence and business acumen. But the dark side, for both oil company and U.S. government, is that this quest often meant dealing with and tolerating horrific human rights violators. Some career diplomats may have had misgivings and sincerely wished to guide policy in humane directions but from the top there was little of that. Recall that Reagan, in his campaign against Carter, made the chilling promise that his foreign policy “would not be hampered by any human rights baggage.” Money seems always to trump humane concerns, and the problem is systemic. When the dictator of Equatorial Guinea opened a bank account a shoe’s throw from the White House, and began making monthly cash deposits in the millions, bank officials of course were thrilled. That the depositor regularly presided over torture sessions, used murder and intimidation routinely to maintain his rule may have made some executives squirm a bit but utlimately was not relevant. Just business, as they say in the Mafia. Besides, had the bank refused, the self-appointed President could have just gone down the street to a different bank.

On at least two occasions, Coll claims that President Bush took an interest in human rights, providing one example in Equatorial Guinea where military training was withheld. He accepts the questionable assumption that the U.S. is interested in promoting democracy. This is only accurate in the limited sense of corporate, plutocratic-style “democracy” as exists in the U.S. The “free market” comes up. always tied rhetorically to democracy, as if they were intrinsically inseparable. It is necessary, reading this book, to keep in mind that the author was a journalist at the Washington Post for 20 years. Noam Chomsky’s claim that no one rises to “responsible” levels in government nor mainstream media circles who has not internalized the values of the master is confirmed in Coll’s Exxon history. It is permissible to critique capitalist practices around the edges but non-hierarchical alternatives are off the table, you could even say, unthinkable.

That said, the book provides an interesting history of the company, some of its workers, practices and adventures, as its account of a hilarious Greenpeace raid on Exxon headquarters in Irving, Texas. Exxon's response demonstrates how any challenge to such a company must factor in the deep pockets that allow an unleashing of aggressive lawyers to defend company interests. These actions also send a message to other parties contemplating such a challenge. The intrigue involved in dealings with post-Soviet Russia, the CIA, revolution, dictatorship, government regulation, competition…and sobering facts like, the U.S. consumes 5 million barrels a day of the black magic.

This hodge-podge of fascinating material is ominously bookended between the Valdez disaster and the BP oil spill in the Gulf of Mexico. ExxonMobil, and the other companies, like to paint BP as atypical, reckless and irresponsible, implying of course that they aren't. And, to a point, the criticism is valid, until we learn that in a much underreported story, a burst ExxonMobil pipeline spilled more than a million gallons in the eastern coastal waters of Nigeria. This only ten days after the Gulf spill began.

Adding to the shame of these predictable accidents, many oil companies joined together, led by ExxonMobil, spending millions to cloud the climate change debate. Despite not one of 928 peer-reviewed science journal articles deviating from the consensus on climate change, the oil companies were able to convince or at least confuse the public, via a complicit media, that there is no scientific consensus. Coll comments that many of these executives will live to regret their repugnant actions as the devastating consequences of denial arise in the not so distant future.

Coll has a section on how the fall of the Soviet Union opened many opportunities for the fabled entrepreneur. The form this took in Russia was of the wild west variety, blurring the already blurry distinction between capitalist and gangster. Economically the Soviet Union had been remarkably equalitarian but with the dissolution came a huge transfer of wealth to an elite, an oligarchy of billionaires. In keeping with Newton’s Law, for every new billionaire, there was created a corresponding number of new peasants. And since Russia had large oil and gas deposits, came soon sniffing the hounds from the west who, to get at that oil, must dispose of any scruples that might interfere with business. Under Putin, there is great reluctance to deal with the international corporations yet that is where the expertise lies. As of this writing Russia is approaching a deal to drill in their very challenging northern waters, not a comforting thought, even if rigorous safety standards were in place. Coll concludes that the economic system is largely held hostage by big oil and predicts no great shift toward alternative energy while they wield the power they do.

As was made clear by the Exxon statement, “We are not the Red Cross.”, we cannot expect an oil company, of their own volition, to pursue alternative fuels or policies less harmful to life on earth, to concern themselves with human rights or other consequences of their pursuits. But we can insist that we, citizens of a democracy, not they, will decide what the creation of a just and environmentally sustainable world requires. If this means fewer billionaires, well, we must buck up and make the sacrifice.