McCAIN'S BIG OIL TIES —FROM IRAQ TO COLOMBIA
by Nikolas Kozloff, NACLA News
When you consider John McCain's ties to Big Oil, the GOP candidate's claim to be a political maverick taking on special interests is nothing short of absurd. According to Progressive Media USA, a Washington, DC-based non-profit, the Arizona Senator has benefited handily from the oil sector. Indeed, McCain has netted at least $700,000 from the oil and gas industry since 1989.
In Congress, he has worked tirelessly to advance the interests of the oil industry. For example, McCain's tax plan gives the top five oil companies $3.8 billion a year in tax breaks. McCain meanwhile has voted against reducing dependence on foreign oil, has twice rejected windfall profits tax for Big Oil, and has voted against taxing oil companies to provide a $100 rebate to consumers. If that were not enough, McCain also made a risky political decision recently to back new offshore oil drilling in the US.
McCain, Iraq and Chevron
Moreover, oil companies that have contributed to McCain have benefited greatly in terms of their foreign operations. One might cite the case of Chevron, for example, which has donated to McCain's cloak-and-dagger International Republican Institute (IRI). Though the Arizona Senator seldom talks about it, he has gotten much of his foreign policy experience working with the operation. Since 1993, McCain has served as chair of the outfit, which is funded by the US government and private money. The group, which receives tens of millions of taxpayer dollars each year, claims to promote democracy worldwide.
The hottest country in which IRI currently operates is Iraq. According to the IRI's own web site, since the summer of 2003 the organization "has conducted a multi-faceted program aimed at promoting the development of democracy in Iraq. Toward this end, IRI works with political parties, indigenous civil society groups, and elected and other government officials. In support of these efforts, IRI also conducts numerous public opinion research projects and assists its Iraqi partners in the production of radio and television ads and programs."
Prior to 2003, McCain was one of the biggest proponents of invading Iraq. Now that US forces are installed in the Middle Eastern nation, McCain wants the occupation to continue indefinitely, even for "a thousand" or "a million years." Upon closer scrutiny, it is clear that oil companies have benefited from McCain's hawkish Iraq policy. Though George Bush has scoffed at suggestions that the invasion of Iraq had anything to do with oil, recent press reports give some credence to such claims.
In April of this year, Chevron announced that it was involved in discussions with the Iraqi Oil Ministry to increase production in an important oil field in southern Iraq. The discussions were aimed at finalizing a two-year deal, or technical support agreement, to boost production at the West Qurna Stage 1 oil field near Basra, Iraq's second-largest city. Since McCain solidified his position as the GOP's nominee, Chevron Chairman David O'Reilly gave $28,500 to the GOP. Meanwhile lobbyist Wayne Berman, McCain's national finance co-chairman, counts Chevron as one of his principal clients.
Colombia's Oil Profile
Another war-torn country attracting McCain's attention is Colombia. In early July, McCain took valuable time out of his presidential campaign to visit the Andean nation. Catching a fast ride on a Colombian drug interdiction boat near Cartagena, McCain praised the government for prosecuting the drug war and making "substantial and positive" progress on human rights. Contrasting himself to his presidential opponent Barack Obama, McCain endorsed the pending trade deal with the South American country.
For the most part, the US media ignores Colombia. When it does cover the Andean nation, it tends to focus on drug-related issues and cocaine production. As a result, the US public doesn't know that Colombia is also a huge oil producer and that the US has important economic interests in this part of the world. US officials would like to guarantee a safe and steady supply of crude from neighboring countries like Venezuela and Colombia, thus lessening dependence on Middle East providers. Today, Colombia is the United States' 12th largest foreign oil supplier (and third largest in South America after Venezuela and Ecuador) and ships 150,000 barrels of oil per day to the American market.
According to Oil and Gas Journal, Colombia had 1.45 billion barrels of proven crude oil reserves in 2007, the fifth-largest in South America. The bulk of Colombia's crude oil production occurs in the Andes foothills and the eastern Amazonian jungles. However, vast unexplored and potentially hydrocarbon-rich territories remain in the country, which shares many of the geological features of oil-rich neighbor Venezuela.
Since 1999, Colombia's government has undertaken extraordinary measures to make the investment climate more attractive to foreign oil companies (in this sense, Colombia differs from other South American countries which have adopted a more nationalistic oil policy). The authorities for example have allowed petroleum corporations to own 100 percent stakes in oil ventures. The government has also established a lower, sliding-scale royalty rate on oil projects, mandated longer exploration licenses and forced the state-owned oil company Ecopetrol to compete with private operators. According to the US Energy Information Administration, the measures "have contributed to creating one of the most attractive oil investment regimes in the world."
McCain's Colombia Ties
One firm attracted by the generous new financial terms has been Chevron, the same company that contributed to McCain's campaigns and the IRI and which has benefited handsomely from the opening up of Iraqi fields. In association with Ecopetrol, Chevron operates the Ballena and Riohacha natural gas fields in the Guajira province of northeastern Colombia. Chevron's total daily average production in 2007 was 469 million cubic feet of gas per day.
But McCain's Colombia ties go much deeper than this.
As Sam Stein noted on the Huffington Post, McCain's "position as an independent arbitrator on Colombia—a country often criticized for its labor and human rights practices—is undermined by a bevy of advisers who have earned large amounts either lobbying for the Colombia Free Trade Agreement, or representing corporations that do business with that country."
To get a sense of the scope of McCain's conflict of interest on Colombia one need look no farther than Charlie Black, a senior adviser to the Arizona senator. A successful 60-year-old Washington lobbyist, Black is a notorious figure within the GOP. Over the course of his career he has gained a reputation as a ruthless operator with a merciless instinct for exposing an opponent's flaws.
Black, who enjoyed stints as campaign operator for George H.W. Bush and George W. Bush, got to know John McCain in the late 1970s when the future Arizona senator worked as the Navy's liaison to the Senate. In 1996, the pair became close while working on Senator Phil Gramm's failed presidential bid. Today, Black is a frequent McCain campaign surrogate on television. On the trail he sits in a big swivel chair at the front of the "Straight Talk Express," joining in McCain’s rolling news conferences.
Black's Washington, DC public relations firm BKSH has developed a reputation for taking on foreign clients who display scant regard for human rights. In 1998, Black agreed to represent Occidental Petroleum (or Oxy), an energy company based in Los Angeles, California. At the time, the GOP spin master was surely aware of Occidental's sordid past. In Colombia, the company had already acquired a reputation for its brutal and militaristic policies.
Charlie Black and Santo Domingo Massacre
The same year Black took on Occidental, the company was embroiled in controversy when the Colombian Air Force dropped cluster bombs on Santo Domingo, a village near an Occidental pipeline, killing 18 innocent civilians. Human rights groups and Colombian government officials said the bombing was a mistake that occurred because three employees of a Florida-based aerial security company employed by Occidental to monitor guerrilla movements had provided incorrect coordinates to Colombian military pilots.
The US employees of the security company dropped out of sight and Colombian government efforts to have them handed over for questioning and perhaps trial proved fruitless. Frustrated by the security company’s stonewalling, human rights groups filed suit in California in 2003 and 2004 against Occidental. Occidental still denies any responsibility for the bombing of Santo Domingo, and has claimed that it "has not and does not provide lethal aid to Colombia’s armed forces."
Such affairs were apparently of little concern to Black, who lobbied Congress, the State Department, and the White House on Occidental's behalf regarding "general energy issues" and "general trade issues" involving Colombia. McCain's PR man also fought to win foreign assistance to Colombia and to block an economic embargo against the South American country.
Occidental and the U'wa
The Santo Domingo massacre was certainly a black mark on Occidental's record. However, there were yet more controversies in store for the company.
Under an agreement with the Colombian government, Oxy acquired the right to explore for oil in the country's northeast. Unfortunately, in granting Oxy its exploration permit, the government ignored a constitutional requirement that native peoples within the area be consulted first. Oxy quickly became embroiled in conflict with the indigenous U'wa, whose territory was nestled in the misty forests of northeast Colombia near the border with Venezuela.
As company geologists and engineers moved in to build roads through the indigenous reservation, so too did the Colombian army, which installed two military bases in the vicinity. It wasn't long before the military began to harass local residents.
Known as a proud, strongly rooted people, the U'wa repeatedly denounced Occidental's oil operation. The U'wa argued that oil exploration would threaten their people, damage the land, fill their territory with alien workers and destroy the world they knew. At one point the approximately 5,000 U'wa even threatened to commit collective suicide by leaping from a cliff unless the oil company stopped operations on their territory.
Tensions were ratcheted up when, in February 2000, Oxy began construction on its Gibraltar 1 drill site. Some 2,700 U'wa Indians, local farmers, students, and union members immediately attempted to stop Oxy's construction. When indigenous peoples sought to prevent trucks from reaching the construction site, riot police used tear gas to break up a road blockade. Three U'wa children were drowned in a fast-flowing river as the U'wa fled the attack.
Two months later, when Oxy began to move heavy equipment and materials into the area, the U'wa again blocked local roads. While the protesters permitted other traffic to pass, they laid their bodies in front of Occidental trucks. In June, the government sent in riot police and soldiers; 28 demonstrators were subsequently injured and 33 arrested. Believing that the area might contain up to 1.5 billion barrels of oil, Occidental shortly thereafter began test drilling on U'wa ancestral lands.
Promoting Oil Development through Militarization
Even as tensions escalated within the U'wa reserve, McCain adviser Black was unperturbed. According to Atossa Soltani, executive director of Amazon Watch, a human rights group that works on behalf of Colombian indigenous groups opposed to oil drilling, Black was "very active" while Congress was debating a $1.3 billion military assistance package to Colombia that became law in 2000. "We'd be making the rounds in Congress," Soltani said, "and Oxy would be there making the rounds, too."
Why would Black also be so interested in trying to secure military funding for Colombia? As Oxy's oil operations expanded, acquiring military support proved increasingly vital for the company. Oxy was part owner of the Caño Limón-Coveñas oil pipeline. The Caño Limón pipeline leads from Arauca to the Caribbean coast and crosses through the U'wa' traditional lands. Not surprisingly, Oxy's activities quickly attracted the attention of left-wing guerrillas who repeatedly blew up the pipeline. The attacks caused more than $500 million in losses to the company between December 1999 and December 2000.
The U'wa had long feared that oil exploration would bring bloodshed and conflict within their ancestral lands.
And as it turned out, the Indians were right.
Soon enough, Colombia's wider civil conflict began to spill over into U'wa traditional territory. In March 1999, three U'wa supporters from the United States—Terence Freitas, Ingrid Washinawotok, and Laheehae Gay—were kidnapped and killed by FARC guerrillas in the department of Arauca.
While it's unclear whether Oxy had any direct involvement in the killings, the company is known to have had links to the guerrillas. In testimony given before a Congressional subcommittee, Lawrence Meriage, Oxy's vice president for communication and public affairs, acknowledged that Occidental personnel regularly paid off guerrillas in exchange for being left alone.
Meriage also claimed during the hearing that one benefit of Occidental operations in the U'wa region had been the increased presence of government troops. Indeed, Oxy paid a fee to the Colombian government on every barrel of oil produced. Meriage said that Occidental supported increased US military assistance to Colombia, and even urged the United States to expand its military operations in Colombia
In an effort to expand military funding to Colombia, the company spent nearly $4 million lobbying Congress in Washington. The investment paid off when the US government agreed to provide military aid, equipment and training to the 18th Brigade in Arauca, a unit which had been involved in grave human rights violations including attacks against trade unions and other members of civil society.
In May 2002, following a massive outcry by environmental groups, Oxy finally announced that it would return its controversial oil block to the Colombian government. Nevertheless, the company continued to operate in Colombia. Currently, the oil firm occupies the Caño-Limón oil field located in the Llanos Basin in the northeastern part of the country. The company also holds a 35 percent interest in the Caricare field and has signed a production agreement with Ecopetrol to operate the La Cira-Infantas field in central Colombia.
Although Oxy's Caño-Limón field has yielded hundreds of million dollars annually in profits, the pipeline has been an ongoing target for guerrilla forces. In 2007, Occidental again found itself in the midst of a human-rights mess. This time, the company was accused in congressional testimony of being "complicit"—with several other major corporations—in the murder of three labor leaders.
Hopelessly Compromised on Colombia
Despite these ominous developments, Black continued his lobbying efforts over at BKSH. Over the long haul the PR man's loyalty to Occidental proved enormously lucrative, with Black netting $1.6 million in fees for BKSH from 2001 to 2007. Occidental was surely pleased with Black’s work: in 2003, Congress approved a special appropriation of nearly $100 million for the protection of oil pipelines in Colombia.
McCain's aides have repeatedly argued that the senator's presidential campaign does not have direct connections to companies represented by such advisers as Black. The Arizona senator's handlers assert that McCain should not be held accountable for any company misdeeds nor should the public presume that McCain is unduly influenced by corporate interests.
Granted, McCain may claim that there is a degree of separation between Charlie Black and himself. There are several problems with this argument however.
To begin with McCain appointed Black to his position, which speaks volumes about McCain's political priorities. In the second place, the Senator has a personal connection to Oxy through Ray Irani, Occidental's chief executive. In 2008, Irani doled out $2,800 to McCain's presidential campaign and a full $25,000 to the Republican National Committee. Irani could easily afford the donation: in 2007 he was the tenth highest paid CEO in the United States, raking in a whopping $34.2 million from Occidental.
Throughout his political career, McCain has protected Big Oil on Capitol Hill. The Arizona Senator has eagerly accepted Chevron and Occidental money to ensure his own success. The oil lobby, which is surely hoping for a McCain win come November, can count on its man to ensure a healthy "investment climate" in Iraq and Colombia. If anyone happens to interfere with petroleum investment, warrior President McCain can be relied upon to back up US oil operations with the full might and resources of the US military.
Nikolas Kozloff is the author of Revolution! South America and the Rise of the New Left (Palgrave-Macmillan, 2008).
This story first appeared July 8 on NACLA News.
McCain Source, Progressive Media USA
Colombia page, Energy Information Administration, US Department of Energy
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"A Million Years in Iraq"—President McCain's Dangerous Recruiting Poster for Insurgents
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International Republican Institute
New York Times editorial on the IRI, Feb. 3, 2006
United Steelworkers press release on Occidental Petroleum complicity with human rights abuses in Colombia
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