War against a foreign country only happens when the moneyed classes think they are going to profit from it.
—George Orwell (1903–1950), British journalist and author
The first week of August 2005 was supposed to be uneventful. President Bush was on vacation in Crawford, Texas—again. But when peace activist Cindy Sheehan arrived in Crawford on August 6, 2005, to begin her month-long protest, the administration’s business-as-usual was suddenly under a spotlight. What was the administration doing that week that George W. Bush couldn’t walk outside his door to speak with the grieving mothers of dead American soldiers? The answers revealed much about the Bush administration’s priorities.
On the day that Sheehan arrived, Vice President Dick Cheney and former president George H. W. Bush were in Riyadh, Saudi Arabia, with King Abdullah, whose father, King Fahd, had just died. For the Bushes, this was a death in the family. The Bush connection to the Saudi royal family dates back decades. Even through the 9/11 attacks, in which fifteen of the nineteen hijackers were Saudi, the OILYgarchies of both countries remained fiercely loyal to one another. When all air traffic was grounded after the 9/11 attacks, Bush ensured that members of the Bin Laden family and other Saudi tycoons would be flown out of the country without being seriously questioned by the FBI. Saudi ambassador Prince Bandar—nicknamed “Bandar Bush” for his chummy relationship with the First Family—was sitting with George W. Bush on the White House balcony two days after the attacks. Meanwhile, George H. W. Bush enjoyed profitable business dealings with the Saudis while he sat on the board of the Carlyle Group, a multibillion-dollar investment firm that has extensive holdings in defense and oil businesses.
George W. Bush was too busy to meet with Sheehan, but he did have time that week to travel to New Mexico to sign the Energy Act of 2005—an epic giveaway to the energy corporations. You would think that while American troops are fighting and dying to maintain the flow of oil from countries that hate America, the U.S. government would seek ways to reduce its dependence on foreign oil; after all, 60 percent of the 21 million barrels that the United States consumes daily comes from foreign sources.1
Bush’s approach to the energy crisis mirrors his approach to war: Give the illusion of caring about it, while privately enabling the plundering and profiteering to continue. So when President Bush declared in his 2006 State of the Union speech, “America is addicted to oil,” he hoped we wouldn’t remember that the energy bill that the president signed five months earlier, which was brokered by Dick Cheney, encouraged Americans to use even more oil. The Bush administration’s morning-after retractions and “clarifications” are by now a well-rehearsed disinformation two-step: In a conference call with reporters the day after Bush’s State of the Union, Energy Secretary Samuel Bodman told reporters the president was giving “purely an example” when he spoke about making dependency on Middle Eastern oil “a thing of the past.”
Bush is so quickly ensnared in his own web of deceit that it would be funny—if the issues weren’t so serious. Take, for example, Bush’s new embrace of renewable energy. In his 2006 State of the Union speech, the president called for new research and investment “to develop cleaner, cheaper, and more reliable alternative energy sources.” It didn’t take long for his rhetoric to collide with reality: The day after his speech, the Department of Energy’s primary renewable energy laboratory announced that as a result of a $28 million budget cut, it was forced to lay off thirty-two researchers in ethanol and wind technology—both areas that Bush cited in his address as having great potential. Making matters worse, Bush was visiting the lab three weeks later. So the day before he arrived, the Energy Department announced that it had found $5 million to rehire the thirty-two laid-off employees, and hurriedly called them on President’s Day so Bush’s photo op wouldn’t be riddled with empty spaces where real researchers once stood. None of the employees returned in time for his photo, and the lab announced that it was still facing a $23 million budget shortfall.2
“My message to those who work here is, we want you to know how important your work is,” President Bush told what remained of the renewable energy staff when he visited the lab. “We appreciate what you’re doing. And we expect you to keep doing it. And we want to help you keep doing it.”
Let the Good Times Roll
Instead of actually doing something about America’s oil addiction, Bush put the drug pushers in charge of finding a cure. Cheney’s Energy Task Force, formed in January 2001, was charged with developing a national energy policy, which it released four months later. This policy formed the basis of the 2005 energy bill. The national energy policy read like an industry wish list. It recommended:
It was as if the energy barons had written the policy themselves— which they did. “If you were King, or Il Duce [the nickname of Benito Mussolini, the fascist dictator of Italy], what would you include in a national energy policy, especially with respect to natural gas issues?” e-mailed Joseph Kelliher, a policy advisor in Bush’s Department of Energy, to energy industry lobbyist Dana Contratto in March 2001.3 The lobbyist obliged with a three-page wish list and—voilà!—many of his ideas appeared in the national energy policy. Kelliher solicited a “dream list” from an Enron lobbyist as well, parts of which also became national energy policy, and succeeded in delivering several presidential executive orders at the request of the American Petroleum Institute.4
The Cheney Energy Task Force met almost exclusively with industry executives and lobbyists. But you’re not supposed to know that: Cheney has gone to extremes to protect the identities of the bill’s architects—who also happen to be its beneficiaries. In one of the most protracted secrecy battles of the Bush administration (and that’s saying a lot), Cheney has refused to disclose whom he met with to shape national energy policy. The meetings of the task force were held in secret, and the Bush administration refused to say who participated. Despite an unprecedented lawsuit by the Government Accounting Office, and another lawsuit filed by the conservative group Judicial Watch and the Sierra Club that went to the Supreme Court, Cheney has successfully protected the identity of his corporate patrons.
But a little light has now shone into the White House back rooms where the energy giveaways were doled out. In November 2005, in the wake of record gas prices and oil company earnings, the heads of the major oil companies were called to testify in the Senate to publicly explain their orgy of profits. But Senate Commerce Committee chair Ted Stevens (R-Alaska), who had received $370,390 in contributions from gas and oil companies since 1989,5 refused demands from Democrats that the executives be sworn in so that their testimony would be given under oath. The senators
were eager to avoid a replay of the Big Tobacco CEOs who, after raising their hands to swear to tell the truth, famously proceeded to lie about whether they knew that smoking caused cancer.
Sen. Frank Lautenberg (D-N.J.) used the opportunity to find out what Cheney wanted to hide. He asked the executives whether they had met with the Cheney Energy Task Force in 2001. The chief executives of ExxonMobil, Chevron, and ConocoPhillips said they had not, while the president of Shell Oil said his company did not participate “to my knowledge,” and the head of BP America said he did not know.6
The Washington Post checked Secret Service logs and learned that, in fact, executives from each of these oil companies did meet at the White House with Cheney Energy Task Force staff members in 2001. Meanwhile, the Commerce Department released documents as a result of a lawsuit that revealed that in early 2001, the Cheney Task Force was examining maps of Iraqi oil fields, pipelines, and foreign corporations that were vying for Iraqi oil contracts.7 It appears that long before the 9/11 attacks, U.S. energy companies had designs on Iraq’s oil. The Saudi-linked terror attacks provided a convenient pretext to take control of Iraq’s oil spigots.
How to Make $144,573 a Day
Writing the 2005 Energy Bill was the opportunity to turn the Cheney Task Force recommendations into law—and lots of cold cash. The energy companies left nothing to chance. Since 2001, energy corporations have plied federal politicians with $115 million in campaign contributions. It was a bipartisan orgy, but lucky Republicans received three-quarters of these corporate bribes.8 You were especially well compensated if you were on the House-Senate Energy Bill conference committee, whose sixty-five members have received some $9.7 million in contributions since 2001.9
As the payoffs were handed out, Texans were at the front of the line. As the Boston Globe observed, the bill is “a $14.5 billion extravaganza . . . that highlighted the clout of [Texas], home to the president, the House majority leader, and the chairman of the committee overseeing the energy legislation. . . . Energy companies based in Texas will be eligible for billions in tax benefits.”10
This point was driven home by the fact that President Bush had two Texas congressmen join him when he signed the bill: Rep. Joe Barton, the chair of the Energy and Commerce Committee, and the Democrat-turned-Republican Rep. Ralph Hall, a member of the same committee.11 Barton has received $2 million in contributions from PACs and individuals in the energy industry since entering Congress in 1989, half of it from the oil and gas industry. Hall received $908,000 in contributions from the energy industry during that same period.12
A leading skeptic on global warming, Barton was accused in 2005 of conducting a “witch hunt” against three of the country’s leading climate change scientists. Barton demanded that the scientists, who had established links between man-made carbon emissions and global warming, hand over details of their funding, methods, and everything they had ever published.13
In July 2005, Representative Barton was determined to give away everything he could to his patrons in the energy industry in the bill about to be signed by President Bush. So, in a vote held after midnight, his committee passed a provision in the energy bill that allowed the oil and gas industry to avoid paying royalties on oil and gas drilled in publicly owned waters in the Gulf of Mexico. “There is no cost” to taxpayers, he assured his fellow congressional representatives.14 In early 2006, the real cost was revealed: The Bush administration had waived $7 billion in royalties over the next five years, an amount that may rise to $28 billion if a lawsuit filed by the oil company Kerr-McGee is successful. Rep. Edward Markey, a Massachusetts Democrat on the committee, fumed, “Taxpayers are being asked to provide huge subsidies to oil companies to produce oil—it’s like subsidizing a fish to swim.”15
Another highlight of the energy bill is the hundreds of millions of dollars in tax breaks, loan guarantees, and insurance for operators and builders of nuclear power plants.16 No new nuclear plants have been built in the United States since the 1970s, reflecting intense public skepticism about the safety and costs of nuclear power. According to Public Citizen, the energy bill also gave the oil and gas industry $6 billion in subsidies, while coal subsidies totaled $9 billion.17
A coalition of environmental groups including the National Audubon Society, the Wilderness Society, and the Sierra Club declared, “When it comes to solving America’s pressing energy problems, this bill can only be classified as a miserable failure. Instead of moving toward a new energy future, the energy bill provides tens of billions of dollars to the oil, gas, coal, and nuclear industries, significantly weakens environmental protections such as the Clean Water Act and Safe Drinking Water Act, and undermines numerous consumer protections.”18
All of this has translated into a mind-boggling windfall for oil companies. In 2005, ExxonMobil, whose fortunes had already been soaring, hit the jackpot: Its $36 billion annual profit was the largest in history for any corporation in the world. Unfortunately, the only thing most Americans would experience from this wind-fall would be price gouging and emptier pockets: While Exxon-Mobil’s profit shot up 45 percent over the company’s 2004 result, its tax bill rose only 14 percent. Just to make sure ExxonMobil didn’t feel any pain, President Bush rejected an attempt in early 2006 to levy a onetime windfall profits tax on the oil industry.
Congress certainly wouldn’t want to put the squeeze on struggling Exxon employees—such as former Exxon chairman Lee Raymond, who was paid $686 million from 1993 to 2005. That works out to $144,573 per day while he ran the company.19 But when it came time to explain to Congress why gas prices were so high, Raymond insisted in 2005 it was all because of global supply and demand, and he was feeling the pain like any average Joe. “We’re all in this together, everywhere in the world,” he said.20
To put ExxonMobil’s bonanza into perspective, the company’s 2005 revenue of $371 billion surpassed the $281 billion gross domestic product of Saudi Arabia that year, and also exceeded the $245 billion GDP of Indonesia, the world’s fourth most populous country and an OPEC member.21
This orgy of corporate profits prompted Ralph Nader to write a letter to new ExxonMobil chairman Rex Tillerson: “Over $36 billion last year, after modest taxes, yet you blithely ignored urgent pleas by members of Congress, especially that of the powerful Chairman, Senator Chuck Grassley (R-Iowa) to contribute some significant deductible money to charities which help impoverished American families pay the exorbitant prices for heating oil this past winter. Rarely has there been such a demonstration of corporate greed and insensitivity by a company that has received huge government welfare subsidies, de-regulation and tax expenditures over the years at the expense of the smaller taxpayers of America.”22
The good times just keep on rolling for the energy industry. No wonder Boone Pickens, head of BP Capital Management, a billion-dollar hedge fund that trades energy futures, said of the high times: “I’ve never had so much fun in my life.”23