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.
