Oil and Empire:
The Battle for El Dorado
by Greg Guma
[from the soon to be published book Liars, Guns,
As troops and planes headed toward Afghanistan, few people
questioned the reasons for military engagement. An enemy that
didn't hesitate to sacrifice thousands of civilian lives had ruthlessly
attacked the nation's capital and brought down New York's tallest
buildings. The identity of the chief "evildoer" also
seemed self-evident: Osama bin Laden, whose al Qaeda network had
struck the US before and was being sheltered in Afghanistan by
the Taliban. In the wake of such an outrage, could anyone doubt
that a "war on terrorism" should begin there?
Yet the roots of war are rarely so simple, and, as time passed,
other powerful motives for military action in that part of the
world slowly came into focus. As it turns out, strikes against
Afghanistan had been in the works months before the attacks. Like
the Gulf War ten years earlier, the rationale was also, if not
mainly, rooted in a struggle over access to oil and gas, in this
case huge finds in the Caspian Sea Basin. The only thing missing
was a plausible reason. What looked like justified retaliation
was, in essence, the first resource war of the 21st century.
For the major energy companies, the Caspian is a new "el
Dorado." North of the Persian Gulf, and including Russia,
Iran, and several former republics of the Soviet Union, it is
estimated to contain the world's second or third largest reserves
of petroleum, along with a vast supply of natural gas. The region
is landlocked, however, so any energy found there must move to
market by rail or pipeline through adjacent, often unstable states.
Despite various intra-state conflicts, complex geopolitics
and considerable risks, the majors -- particularly Chevron, ExxonMobil,
BP Amoco, and Royal Dutch/Shell, along with Norway's Statoil,
France's Elf Aquitaine, Italy's Agip, Russia's Lukoil, and the
China National National Petroleum Corporation -- have been busy
acquiring development rights and preparing for production since
the early 1990s. Offshore drilling operations are underway in
Azerbaijan and Kazakhstan, and set to commence elsewhere. Major
firms have also invested significantly in the future construction
of oil and gas pipelines to distant ports and refineries. By 2010,
the world's leading energy concerns expect to invest at least
$50 billion in production and transportation.
The first big move was a $20 billion joint venture between
Chevron and Kazakhstan, signed in 1993 to develop the huge Tenzig
oil field on the Caspian coast. Three years later, ExxonMobil
purchased a 25 percent share from the government. The Caspian
Pipeline Consortium, including the Tenzig partners and Russia,
will soon carry 750,000 barrels a day to the Black Sea coast.
Another consortium focused on Azerbaijan's offshore fields.
In 1994, BP Amoco, Lukoil, Unocal, Penzoil, Statoil, and others
joined with SOCAR, Azerbaijan's state oil company, to form the
Azerbaijan International Operating Company in 2001. Bush family
adviser James A. Baker III, who spearheaded George W. Bush's victory
in the Florida election dispute, headed the US law firm representing
this consortium, and sat on the US-Azerbaijan Chamber of Commerce
advisory council, as did Vice President Cheney before him.
But before their investments could produce profitable results,
critical roadblocks would have to be removed. And the biggest
was how to get the energy from production sites to markets. Since
the US didn't want to avoid relying on existing Soviet-era pipelines
(that could change due to recent gestures of US-Russian friendship),
new ones would have to be constructed.
Prior to 9/11, the US government's preferred future route
for oil and gas, known as the Baku-Tbilisi-Ceyhan (BTC) project,
went from Azerbaijan through Georgia and then south to the Turkish
coast. The policy goal was to reduce both Georgia's and Azerbaijan's
reliance on Russia and bring the southern Caucasus into the US
fold. National Security Adviser Condoleezza Rice is a former director
of Chevron, a lynchpin of the BTC consortium with extensive operations
in Azerbaijan. Until 2000, Vice President Cheney was chief executive
at Halliburton Co., named a finalist in 2001 to bid on engineering
work in the Turkish sector of the route.
Some companies showed more interest in a less expensive route
to the Persian Gulf through Iran. But this clashed with official
US policy, including a 1995 executive order prohibiting US business
with Iran, as well as the 1996 Iran and Libya Sanctions Act, which
specifically limited oil investments. A third option was a pipeline
from the Dauletebad gas fields in eastern Turkmenistan south through
Pakistan to the Arabian Sea, a route across western Afghanistan.
After 1995, however, that meant dealing with the Taliban, a repressive
regime locked in civil war.
The negotiations began in the early 1990s, when energy giants,
including ExxonMobil, Texaco, Unocal, BP Amoco, Shell and Enron,
paid top officials in Kazakhstan to secure equity rights in its
huge oil reserves (up to 92 billion barrels). Unwilling to meet
Russia's price for use of its pipelines, the companies promised
production and pipeline investments of $35 billion.
Turkmenistan, which has possible reserves of up to 80 billion
barrels of oil and 155 trillion cubic feet of natural gas, didn't
want to be left out of this new Great Game. Thus, during a US
visit in March 1993, President Niyazov hired former US National
Security Advisor Alexander Haig to encourage investments and soften
the US stand on a pipeline via Iran. Within two years, Unocal,
one of the world's largest independent oil and gas producers,
was ready to step up. In June 1995, a Unocal delegation visited
Turkmenistan and Afghanistan to discuss a pipeline through the
latter. While visiting New York that October, Turkmeni President
Niyazov signed an Afghan pipeline deal with Unocal and Saudi Arabia's
But another company was also making moves. Prior to Unocal's
bid, Bridas, the third largest oil and gas company in Latin America,
had struck a deal with Niyazov to develop gas fields discovered
by the Soviets, and had even begun to export some oil from the
Caspian. In March 1995, to fend off Bridas' competing proposal,
US Ambassador Tom Simmons urged Pakistan Prime Minister Benazir
Bhutto to grant exclusive pipeline rights through her country
to Unocal. Bhutto was offended, cried extortion, and demanded
a written apology.
That August, while touring Afghanistan and Central Asia, US
Assistant Secretary of State Robin Raphel reiterated US interest
in the project. By this time, however, Gazprom, a Russian company,
had signed a deal with Unocal, Delta and Turkmenistan's state
energy company. An exclusive consortium arrangement for the proposed
Afghan pipeline followed in October. By year's end, Iran, Turkey
and Turkmenistan also had struck a deal, this one for Turkey to
buy Turkmen gas through Iran.
While visiting Kandahar in December, Pakistan's foreign secretary
conferred with the Taliban, which had recently seized control
of most of the country, about the Afghan route. In a statement
that was later disavowed, Unocal expressed support for the Taliban's
takeover, suggesting that it would improve prospects for their
project. From his base in Afghanistan, bin Laden had already declared
jihad against the US, and the Clinton administration considered
him "one of the most significant financial sponsors of Islamic
extremist activity in the world." But that failed to disrupt
US-backed negotiations with his hosts.
Prospecting with the Enemy
Dealing was the Taliban was not easy. Although a delegation
from Afghanistan visited Washington in February 1997 to secure
official recognition and meet with Unocal, only two months later,
on April 8, the new regime unexpectedly announced that it would
award a pipeline contract to the company that started work first.
Unocal president John Imle was baffled by the change, but refused
to give up.
During the summer, a new association, chaired by Unocal, was
formed to promote Turkmenistan-US cooperation. The company's deadline
to begin construction of a pipeline was extended one year; the
new "drop dead" date would be December 1998. Hoping
to keep its options open, the Clinton administration meanwhile
reevaluated its resistance to a pipeline through Iran. In order
to support US companies and "friends" in the region,
it was now willing to drop objections to a Persian Gulf route.
Encouraged by the shift, Shell entered the negotiations. The majors
finally appeared ready to make their move.
At this point, the Taliban threw another curve ball, announcing
that it was leaning toward Bridas to build the pipeline. To press
its advantage, the Argentina-based company joined forces with
another major, Amoco. Still in the game, however, Unocal made
some headway with Pakistan, signing a 30-year pricing agreement.
Despite Bhutto's complaints, US pressure was paying off. By October
the pieces appeared to be in place. Led by Unocal, Delta, Turkmenistan,
Japan's Itochi Oil, Indonesia Petroleum, Crescent Group, and Hyundai
became partners in the new Central Asia Gas Pipeline Ltd. (CentGas).
Gasprom signed soon after.
Still hoping to win over the Taliban, Unocal invited a delegation
to visit corporate headquarters in Sugarland, Texas on December
4. The Afghan visitors also met with State Department officials.
But efforts to negotiate a deal failed, allegedly because the
Taliban asked for too much money. Sensing trouble, Gazprom pulled
out of the consortium the following February, leaving Unocal at
risk with a 54 percent interest. Shortly thereafter, Unocal Vice
President John J. Maresca, later to become a Special Ambassador
to Afghanistan, testified before the US House. Until a single,
unified, and friendly government was in place in Afghanistan,
he told lawmakers on February 12, 1998, a trans-Afghani pipeline
would not be built. The need for a regime change had been put
on the table.
A month later, Unocal announced that its pipeline project
was on indefinite hold, citing financing difficulties and ongoing
civil war in Afghanistan. Having spent $10-15 million already,
however, it did not want to give up completely. Some shareholders
had a different idea. At Unocal's annual meeting in June 1998,
several of them objected to the Afghan pipeline because of the
Taliban's obvious violations of human rights.
By this time, it was quite clear that Afghanistan was one
of bin Laden's major operational bases. There was also the related
warning from CIA Case Officer Robert Baer that Saudi Arabia was
harboring an al-Qaeda cell led by two known terrorists. Yet the
CIA apparently ignored the warnings until August 7, when the US
Embassies in Kenya and Tanzania were bombed. The trail quickly
led to bin Laden.
Thirteen days later the US retaliated, sending cruise missiles
into Al Qaeda camps near Khost and Jalalabad. Finally getting
the message, Unocal officially suspended its Afghan pipeline plan
and pulled out staff throughout the region. Before the end of
1998, it also withdrew from the $2.9 billion Turkmenistan-to-Turkey
natural gas project, as well as the Afghan pipeline consortium.
The reasons cited were low oil prices, pressure on human rights,
and the activities of bin Laden. Whatever the truth, Unocal's
quest for "el Dorado" had been indefinitely postponed.
Taking advantage of an opening, Bridas resumed negotiations
with Russia, Turkmenistan, and Kazakhstan in February 1999. Shortly,
Turkmenistan's foreign minister met with the Taliban's Mullah
Omar to discuss the proposed pipeline. Enron also expressed an
interest. With 3 billion already invested in a plan to build an
electrical generating plant at Dabhol, India, it had recently
lost access to plentiful liquid Natural Gas supplies from Qatar
to fuel the plant. A trans-Afghani gas pipeline from Turkmenistan,
terminating at the Pakistani city of Multan near the Indian border,
looked like a promising alternative. Before the end of April,
Pakistan, Turkmenistan, and the Taliban had sealed an agreement
to revive the project.
During this period another pipeline opened, linking Baku in
Azerbaijan to Supsa on Georgia's Black Sea coast. Azerbaijan has
estimated reserves of 32 billion barrels of oil and 35 trillion
cubic feet of natural gas, making it the third largest potential
regional source after Turkmenistan and Kazakhstan. Despite recent
setbacks, US hopes for an eventual link from Georgia to Turkey,
a long-term ally, were still alive.
Dropping the Ball
The Bush family was well acquainted with the bin Ladens, if
not their alleged black sheep Osama, long before the Saudi renegade
declared war on the US and its allies in Saudi Arabia's royal
family. Even after the 1998 embassy attacks, the relationship
remained cordial, largely due to the intercession of the Carlyle
Group, a large US defense contractor. In 1998, and again in 2000,
the first President Bush traveled to Saudi Arabia on behalf of
Carlyle, meeting privately with both the Saudi royals and several
of bin Laden's relatives.
This may help explain why, shortly after it moved into the
White House in January 2001, the Bush II administration reportedly
told the FBI and intelligence agencies to back off investigations
involving the family. The Bureau was apparently interested in
two bin Laden relatives, Abdullah and Omar, who were living near
CIA headquarters in Falls Church, Virginia. Bush's blind spot
for Saudi Arabia and contact with the bin Ladens may also explain
why no action was taken when, on January 26, the FBI told the
new administration there was clear evidence tying Al Qaeda to
the October 2000 bombing of the USS Cole.
While covering a trial of Al Qaeda members in February, UPI
Terrorism Correspondent Richard Sale noted that the NSA had broken
bin Laden's encrypted communications. Since officials insist that
plans for 9/11 must have been in the work for years, one has to
wonder whether no hint of what was ahead had been revealed. National
Security Advisor Rice certainly knew something was up. Her predecessor
Sandy Berger had briefed her in detail, advising that she would
"be spending more time on this issue than on any other."
Yet, according to a Newsweek cover story on "What Bush Knew"
released in May 2002, a strategic review "was marginalized
and scarcely mentioned in the ensuing months as the administration
committed itself to other priorities, like national missile defense
(NMD) and Iraq."
The administration did not ignore the Taliban, however. On
the contrary, it offered the regime some aid. In May, Secretary
of State Colin Powell announced a $43 million package for the
regime, purportedly to assist hungry farmers who were starving
since the destruction of their opium crop on orders from the Taliban's
The US was also keen to resolve a decade-long conflict over a
mountainous Armenian enclave inside Azerbaijan. Further fighting
there might jeopardize other pipeline investments. Powell personally
opened up talks in April between leaders of both countries. After
a sit-down in Key West, the two leaders dashed off to Washington
for separate sessions with Bush. Leaving little to chance, the
administration promised large financial packages to the adversaries
if they buried the hatchet. Armenia was in especially tough shape.
Three of its four rail links were unused due to closed frontiers
with Azerbaijan and Turkey, and the economy was in a long-term
Another priority was Pakistan, particularly its ongoing conflict
with India over Kashmir. To address that, Deputy Secretary of
State Richard Armitage, a former covert operative who had also
worked at State for Bush I, was sent to India on a publicized
tour. Meanwhile, CIA Director George Tenet quietly visited Pakistan
to meet with General Pervez Musharraf, who had taken power in
a 1998 coup. While in Islamabad, Tenet and Musharraf held what
was described later as "an unusually long meeting."
Tenet's Pakistani counterpart, Lt. General Mahmud Ahmad, was also
on hand. A few months later, Ahmad told an aide to wire transfer
$100,000 to Mohammed Atta, who the FBI later described as the
lead terrorist in the suicide hijackings. Ahmad resigned in October
after the transfer was disclosed in India and confirmed by the
FBI. Armitage's peace mission did not go any better. A year later,
India and Pakistan had one million troops at their borders, and
a regional nuclear war looked possible.
By June 2001, the warning signs were obvious for anyone willing
to listen. German intelligence had informed both the CIA and Israel
that Middle Eastern terrorists were "planning to hijack commercial
aircraft to use as weapons to attack important symbols of American
and Israeli culture." On June 28, CIA Director Tenet informed
Condi Rice that it was "highly likely" that a "significant
Qaeda attack" would take place "in the near future."
Before he reached Genoa in July for the G-8 summit, Bush obviously
understood the danger. Among others, Egyptian President Hosni
Mubarak had issued a blunt warning: someone wanted to crash a
plane filled with explosives into the conference site.
But word of imminent US military action was also leaking out.
One scenario appeared on indiareacts.com, an online magazine,
which reported on June 26 that "India and Iran will 'facilitate'
US and Russian plans for 'limited military action' against the
Taliban." The story indicated that US and Russian troops
would do most of the fighting, with the help of Tajikistan and
Uzbekistan. Other reports said that Tajik and Uzbek forces were
already training in Alaska and Montana, and that US rangers were
preparing special troops in Kyrgyzstan. The BCC and Times of India
published similar predictions.
During a meeting with Pakistani and Russian intelligence officers
in Berlin, three former US officials -- Tom Simmons (US Ambassador
to Pakistan), Karl Inderfurth (Assistant Secretary of State for
South Asian affairs) and Lee Coldren (State Department expert
on South Asia) -- said much the same thing: The US was planning
military strikes against Afghanistan. They even speculated on
the launch date -- October 2001. Unfortunately, Taliban members
may also have been in the room, or at least privy to what was
said, according to Bin Laden - La Verite Interdite, a French book
released after 9/11. In any event, the British press later reported
that Pakistan's secret service had relayed the news to the Taliban's
leadership. So much for the element of surprise.
The Plots Thicken
When revelations eventually surfaced that the US had received
credible warnings of an impending attack by Middle Eastern radicals,
officials protested that the information was too vague and that,
in any case, President Bush did not know about the possibility
that airplanes might be hijacked until an August 6, 2001 briefing.
A key element of this defense was that intelligence available
to the CIA, including a report forwarded from Russian intelligence
that 25 terrorist pilots had been training specifically for suicide
missions, simply never reached the president's desk. Neither,
apparently, did a July 10 report from the FBI's Phoenix office.
In that document, a well-respected field agent had warned that
the unusual number of Middle Eastern men enrolling in US flight
schools might be part of a bin Laden plot. Although his analysis
did make it to headquarters, follow up action was delayed, supposedly
due to the expense and staff time involved.
Was this simply a matter of poor coordination? True or not,
that was quickly adopted as the most convenient explanation. Yet
credible evidence points in other directions. To start, the government
had been taking steps toward military action against Afghanistan
for some time, and Bush obviously knew bin Laden was a serious
threat. Surely, coordination wasn't the only issue. But even more
troubling was a report that the CIA may have made contact with
the "evildoer" two months before the attacks.
According to a controversial story in the French paper Le
Figaro, published on October 31, 2001, bin Laden allegedly received
treatments for his kidney ailment at a hospital in Dubai, a Gulf
port city, sometime between July 4 and 14. While there, he reportedly
met with someone from the CIA. "Several days later the CIA
officer bragged to his friends about having visited the Saudi
millionaire," the story claimed. "From authoritative
sources, this CIA agent visited CIA headquarters on July 15th,
the day after bin Laden's departure for Quetta." Although
an intelligence finding issued by President Clinton before leaving
office made him eligible for execution, for some reason bin Laden
was allowed to leave without incident on a private jet, the French
Among other things, the story indicated that Arab diplomatic
sources and French intelligence itself believed "precise
information was communicated to the CIA concerning terrorist attacks
aimed at American interests in the world, including its own territory."
In a subsequent meeting with French intelligence, it added, US
agents asked for details about Algerian activists connected to
bin Laden through Dubai banks. But when asked, What do you fear
in the coming days? they "responded with incomprehensible
Finally, the French expose charged that "the FBI discovered
certain plans that had been put together between the CIA and its
'Islamic friends' over the years. The meeting in Dubai is, so
it would seem, consistent with 'a certain American policy.'"
Was any of it true? Le Figaro claimed to have confirmed bin
Laden's visit with hospital staff. The next day, however, several
of those quoted issued denials, and the CIA insisted that no meeting
between one of its agents and bin Laden had taken place. Someone
was obviously lying. The question was who.
An equally perplexing lead involved a US Navy Lieutenant,
Delmart "Mike" Vreeland, who was in a Toronto jail on
US fraud charges at the time. Vreeland claimed to be an officer
in US Naval intelligence. The Navy initially denied that, claiming
that Vreeland never worked in intelligence and was discharged
as a seaman in 1986 for unsatisfactory performance. In any case,
Vreeland reportedly wrote down some details about a planned attack
on the World Trade Center in early August, placed his notes in
a sealed envelope, and handed it over to the Canadian authorities.
Three days after 9/11, they opened the envelope and discovered
that Vreeland's description was correct.
Four months later, on January 10, 2002, attorneys for Vreeland
called the Pentagon's switchboard operator from a speakerphone
in open court. The operator confirmed that Vreeland was a Naval
Lieutenant on active duty. She even provided a phone number and
the extension for his office in the Pentagon. Even so, how did
a Navy officer get such information, and how many others also
knew in advance?
One person clearly in the loop was Zacarias Moussaoui, an
Islamic militant linked to bin Laden who was arrested by the FBI
on August 17. A key member of the Al Qaeda network, he had been
taking flying lessons but showed little interest in learning how
to take off or land. At the time of his arrest, Moussaoui had
technical information on Boeing aircraft and flight manuals. An
FBI agent actually warned his superiors that Moussaoui might have
been planning to "fly something into the World Trade Center."
Even this failed to set off a serious alarm. The CIA did know
enough to offer a detailed list of known terrorists to Saudi intelligence.
But like those at the top in the Bush administration, the Saudis
Finally, there was a warning from Russia. Based on reports
he received, President Vladimir Putin, a former KGB chief, ordered
Russian intelligence in August to tell the US government "in
the strongest possible terms" that attacks on airports and
government buildings were imminent. Still, no action.
Afterward, the Bush administration denied having any specific
prior knowledge. But given all the available warnings, not to
mention US plans to mount an attack of its own on Afghanistan,
the failure to take effective preventive measures looked, at the
very least, like a case of willful disregard.
The Eve of Disaster
As summer 2001 waned, the fledging administration in Washington
faced a growing list of problems, both at home and abroad. Vermont
Senator James Jeffords' decision to leave the Republican Party
in April had altered the congressional balance of power, putting
much of the Bush domestic agenda in jeopardy. Fast Track trading
authority had been stalled. Enron was about to implode. Europe
was breaking with the US on missile defense, trade, environmental
policy, and Latin American intervention. Protests challenging
"globalization were gaining momentum worldwide. China are
Russia were learning to cooperate, and NATO looked like it might
be obsolete. In late August and the early days of September, the
Dow Jones Industrial Average reacted by dropping nearly 900 points,
which only increased speculation about a looming economic crash.
But the administration had some information that the rest
of the public did not. For example, it had just sent two US carrier
battle groups into the Gulf of Arabia, just off the Pakistani
coast. Meanwhile, about 17,000 US troops joined more than 20,000
NATO soldiers in Egypt for Operation Bright Star, while 23,000
British troops steamed toward Oman for Operation Swift Sword.
In short, the people in charge knew a military engagement was
imminent. What better way was there to change the dynamic?
On September 7, in a move that was either prescient or premeditated,
the president's brother, Florida Governor Jeb Bush, signed emergency
executive order number 01-261. It contained new provisions allowing
the Florida National Guard to assist law enforcement and emergency
management personnel in the event of large civil disturbances,
disaster, or terrorism. Had he too heard something, or was he
just being cautious?
By this time, President Bush certainly understood that an
attack on US symbols, probably involving hijackers, was only a
matter of time. And Attorney General Ashcroft knew enough to begin
using a privately chartered jet for security reasons, even though
he refused to increase the number of FBI counter-terrorism agents.
But who else knew, and how detailed was the information? Apparently,
some interested parties had specific enough information to purchase
4,744 put options (speculation that a stock will go down) on United
Air Lines (UAL) stock on September 6-7. Only 396 calls were bought
those two days. It was a dramatic, abnormal increase in sales.
Many of the puts were purchased through Deutschebank/AB Brown,
a firm managed until 1998 by the Executive Director of the CIA,
A.B. "Buzzy" Krongard.
Merrill Lynch, Morgan Stanley, Munich re, and AXA Re, an insurance
firm that owned 25 percent of American Airlines, also purchased
an unusually high number of puts in the four working days before
the attacks. On September 10, American Airlines saw similar activity:
4,516 puts and 748 calls. No other airlines showed similar trading.
Three weeks later, at least $2.5 million worth of puts on American
and UAL stock remained unredeemed. A suspension in trading on
the New York Stock Exchange after the attacks had given the Securities
and Exchange Commission time to prepare if the owners showed up.
Inexplicably, the puts were 600 percent above normal at a time
when Reuters was reporting that "airline stocks may be poised
to take off." Someone certainly felt certain enough to place
heavy bets that the two airlines would soon take a hit.
Sadly, it was the right wager. Early on that sunny Tuesday,
September 11, after taking off from airports in Newark, Boston
and Washington DC for routine cross-country trips, three American
and United Airlines flights with fully-loaded fuel tanks destroyed
the world-famous Twin Towers of downtown Manhattan's World Trade
Center and a portion of the Pentagon. A fourth flight was forced
to crash by a group of brave passengers before reaching its destination,
possibly the White House.
Although FAA and the military recognized within minutes that
the planes had been simultaneously hijacked and diverted off course
shortly after 8:15, no one notified Bush until 9:05, almost an
hour later. TV cameras captured his lack of surprise. By the time
Air Force planes were scrambled to intercept at 9:30, it was far
too late. Despite the unprecedented nature of the attacks, the
National Command Authority waited for 75 minutes before responding.
Soon afterward, US airports were shut down for the rest of the
day. Yet, within hours, the FBI helped Saudi Arabia's Prince Bandar
fly members of the bin Laden family out of the country.
A week later, FBI Director Robert Mueller updated the press.
"There were no warning signs that I'm aware of that would
indicate this type of operation in the country," he claimed.
It sounded fairly reasonable at the time.
Back to Business
In the weeks after 9/11, national mourning, frustration and
anger, adroitly stoked by the major media, provided a more than
adequate justification for the military battle plan hatched months
before. A worldwide campaign against terrorism and an alleged
"axis of evil" that included Iraq, Iran and North Korea
would have sounded needlessly militant or overly ambitious before
the attacks. Afterward, it was hard, even risky, to speak out
against the call to war. The order of the day was unity, and whatever
the administration needed, Congress (and the public) seemed willing
to supply. As people often said at the time, the world had changed.
After suffered a precipitous drop, the Dow Jones Industrial
Average recovered most of its pre-attack losses by mid-October.
Although still weak, and vulnerable to negative earnings reports
and bombshells about Enron's troubles, a crash had been narrowly
averted. But the magic bullet was a massive infusion of government
spending on defense programs, subsidies for "affected"
industries, and planned tax cuts for corporations. Wartime spending
was again in fashion.
Plans to turn the Caspian basin into an alternative source
of energy, especially if oil deliveries from the Persian Gulf
were blocked or suspended, were also revived. For example, once
Pakistan was engaged as a US ally (despite its connections to
Al Qaeda and other extremists), US Ambassador Wendy Chamberlain
paid a call on the Pakistani oil minister. The war had barely
begun, but the outcome looked certain. "In view of recent
geopolitical developments," she told the minister on October
10, Unocal's pipeline from Turkmenistan through Afghanistan to
the Pakistani coast is back on the table.
After the Taliban was routed, the appointment of Hamid Karzai
as interim (and likely long-term) leader of a western-friendly
Afghanistan provided the project with another boost. As Le Monde
revealed in late December, Karzai was a former Unocal consultant
and a long-term CIA asset, just the kind of leader the oil companies
had hoped to see. Bridas was out, Unocal was back in. Bush further
increased the odds of success early in the new year by appointing
Zalamy Khalilzad, a former Unocal employee, as his special envoy
to the recently invaded nation. It apparently did not matter that,
four years earlier, Khalilzad had been a Taliban booster, even
writing op-eds for the Washington Post.
It took only a month to work out the details. On February
9, 2002, Pakistani leader Musharraf and Afghan leader Karzai proudly
announced an agreement to "cooperate in all spheres of activity,"
especially the proposed Central Asian pipeline. Pakistan was even
prepared to subsidize some of the costs, offering $10 million
to help pay Afghani government workers.
During the war, the Pentagon had used Uzbekistan and Kyrgyzstan
as rear bases and aid corridors. Kazakhstan and Tajikistan hosted
no troops, but agreed to open airspace and airfields. By early
2002, experts were busy evaluating the Tajik airfields as operational
bases for future missions. Thousands of US soldiers were now deployed
in former Soviet Central Asia, many of them on an Uzbekistan airfield
near the Afghan border. Uzbek President Islam Karimov, a key ally,
saw no need to set a deadline for their departure. It was easy
to see why; Uzbekistan had been promised up to $150 million in
loans and grants. Meanwhile, outside Kyrgyzstan's capital, military
facilities were under construction at Manas international airport,
eventually to house up to 3000 troops. Slowly but surely, under
careful western guidance, the region was being militarily transformed.
As usual, the policy aims were veiled. Speaking to Congress
early in the year, Elizabeth Jones, assistant secretary of state
for European and Eurasian affairs, offered the official line.
The administration envisioned a permanent US presence that would
boost economic development and sustain democratic reforms, she
said. Translation: more US investments and a bit less outright
brutality. At least Deputy Defense Secretary James Wolfowitz was
more direct. By upgrading its military presence, he explained,
the US wanted to send a message. It would not forget its new friends.
At the same time, however, the administration was pushing to scrap
a Cold War-era law placing conditions on former Soviet republics'
trade relations, based on their human rights records. This also
sent a message; in return for loyalty, it said, the US might be
prepared to cut the local tyrants some slack.
With Afghanistan finally a safe place for investments, the
focus soon shifted to Georgia and the BTC pipeline project, still
the key to moving Azerjaijan's oil and gas to the Turkish coast.
Chevron and Halliburton were eagerly waiting in the wings. As
US Caspian envoy Stephen Mann explained, the US was willing to
promote almost any pipeline that bypassed Iran. (Energy companies
were also exploring a section of the Caspian claimed by both Iran
and Azerbaijan). To keep the BTC pipeline on track, Georgian Defense
official Mirian Kiknadze told Radio Free Europe on February 27,
"The US military will train our rapid reaction force, which
is guarding strategic sites in Georgia -- particularly oil pipelines."
Deputy Secretary of State Armitage, a former co-chairman of
the US-Azerbaijan Chamber of Commerce, also chimed in, emphatically
re-affirming US support for the BTC pipeline during a March 8
visit with Turkish premier Bulent Ecevit. Within weeks, words
were matched by funding: a $4.4 million aid package for Azerjaijan,
prominently featuring military support and hardware.
A month after that, more US military advisors began to arrive
in Georgia, along with 10 combat helicopters. Officially, the
objective was to help combat Islamic radicals in the Pankisi Gorge,
allegedly a safe haven for al Qaeda and their Chechen allies.
But as most Georgians, though not many US citizens, understood,
their main task was to protect US interests in Caspian oil and
gas. With Turkish air force operations due in Azerbaijan later
in 2002, the US was actively promoting a NATO-friendly axis to
guard the BTC route and counter a potential alliance between Armenia,
Iran and, if relations ever turned sour, Russia.
Waging war in Afghanistan had not destroyed Al Qaeda or eliminated
the threat of further attacks, but it had driven the Taliban from
power and cleared the way for a much-needed pipeline. Across the
region, US aid and military operations designed to prevent obstructions
elsewhere were rapidly being put in place. At home, Bush was riding
a wave of patriotism that even the Enron scandal and charges of
an "intelligence failure" prior to 9/11 could not stop.
Access to Power
Understanding the interests of energy companies, and how US
influence can make a difference, comes naturally for George W.
Bush. Though his start as an oilman in the 1970s was unimpressive,
his father's presidential victory eventually made him a valuable
asset for Harken Energy, a modest Texas oil company with large
ambitions. By January 1990, he was on the board, receiving generous
consulting fees and holding substantial stock. The timing was
perfect: Harken had just defied the odds by making an oil production
sharing deal with Bahrain. It gave the company the exclusive right
to explore for gas and oil off the shores of the Gulf island nation.
If anything was found near two of the world's largest gas and
oil fields, Harken would have the exclusive marketing and transportation
For a company that had never drilled an offshore well, the
agreement was a remarkable leap. But since Harken lacked sufficient
financing to do the job alone, a partnership was established with
Bass Enterprises Production Company of Fort Worth, Texas. The
Bass family contributed more than $200,000 to the Republican Party
during the Bush I years. Nevertheless, only five months after
Harken's Bahrain deal, Bush suddenly sold most of his stock for
$848,560, a remarkable 200 percent profit. Another timely move.
A week later, the company announced a $23 million loss in earnings,
and less than two months after that, on August 2, 1990, Iraqi
troops moved into Kuwait.
Over half a million US troops were deployed to the Gulf over
the next six months, while Harken stock lost 60 percent of its
value. According to US News and World Report, solid evidence suggests
that Bush cashed out because knew the company was facing trouble
weeks in advance. Harken evidently didnít hold a grudge,
however, and continued to provide generous payments for the younger
Bushís consulting services throughout the 1990s. After
all, once the Gulf War was over, the Bahrain deal still held the
promise of profits for those who stayed the course.
Bush II's executive brain trust was even more knowledgeable. Both
his vice president and national security advisor worked previously
with oil companies that had Caspian ambitions. Commerce Secretary
Don Evans was the former CEO of Tom Brown, Inc., a mid-sized oil
and gas outfit. Gale Norton, appointed Secretary of the Interior,
began her career with the Mountain States Legal Foundation, a
conservative think tank funded by oil companies and founded by
her mentor and predecessor, the infamous James Watt. She also
chaired the Coalition of Republican Environmental Advocates, a
front group backed by BP Amoco and the Ford Motor Company. White
House Chief of Staff Andrew Card and Energy Secretary Spencer
Abraham also have auto company connections, and Attorney General
Ashcroft received major contributions from ExxonMobil, BP Amoco
and Enron during his failed 2000 bid for Senate reelection. After
Enron's crooked books were exposed, Ashcroft recused himself from
that investigation. But he didn't back away from federal grand
juries investigating bribery and corruption charges against ExxonMobil
and BP Amoco.
Of course, this is not the first US administration to work
closely with big energy. In the days before laws regulating campaign
finance, oil interests contributed half of the $100 million used
in Dwight Eisenhowerís 1952 presidential campaign. His
victory assured the removal of federal control over domestic offshore
oil, at the time valued at about $40 billion. Republican control
of the Federal Power Commission was equally helpful to the gas
end of the industry. A Rockefeller brother-in-law, Winthrop Aldrich,
then Chair of Chase Manhattan Bank, became Ambassador to Britain,
a strategic posting that helped to safeguard Standard Oilís
interests and keep an eye on overseas rivals. Robert B. Anderson,
manager of a Texas oil company and member of the National Petroleum
Council, was named to head the Navy Department, the countryís
biggest oil customer.
It didnít take long before access to oil led to covert
action. Responding to Iranís nationalizing of the Anglo-Iran
Oil Company, the only energy concern operating there at the time,
Eisenhower quickly approved a plan to overthrow its defiant Prime
Minister, Mohammed Mossadegh, and install the young Shah of Iran.
The argument was that the 1953 operation, reportedly costing the
CIA $19 million, saved the country from a Communist takeover.
But the main beneficiaries were the five leading US oil companies,
which were subsequently able to cut a deal for 50 percent of Iranís
ìliberatedî operations through a new international
consortium negotiated by the State Department. In short, Afghanistan
was not the first place where the interests of the energy industry
served as a powerful motivating factor for US intervention.
Even the most clever schemes can have unintended consequences,
however. Twenty-five years after the Iranian coup, an anti-Western
fundamentalist regime drove out the Shah, setting off a major
ìoil shockî and fatally damaging the Carter administration.
The new Iranian regime posed a much more serious long-term threat
to oil supplies, and regional peace in general, than the one overthrown
in 1953. And the Caspian Basin? There, a ìwar on terrorismî
-ñ really a battle for control over resources -- emboldened
local tyrants, who saw their tactical alliance with the US as
protective cover to pursue brutal agendas. By late May 2002, this
was taking the world to the brink of a nuclear exchange, as Pakistanís
leadership (a key US ally in the Afghanistan operation and important
player in pipeline politics) threatened to use nukes in its protracted
dispute with India in Kashmir.
Did Bush and his aides know in advance about plans to take
down the World Trade Center? Despite all the denials, the jury
will probably be out indefinitely. Yet, there is little doubt
that many people, in and out of government, expected a major attack
before it happened. Some may even have been counting on it. Without
a pretext, after all, it might have been difficult to convince
the US public that it was necessary to overturn a faraway regime,
even one that systematically abused women and publicly executed
people in a football stadium. This, of course, was not the point
of the campaign. But then again, neither was ìrouting out
the terrorists.î The true objective, established well before
any planes went down, was to protect and move future supplies
of oil and gas. Whatever the risks, and whoever might suffer,
the road to el Dorado simply had to remain open.
Greg Guma is the editor of Toward Freedom, a world affairs
magazine based in Vermont (USA), and author of books including
The People's Republic and Passport to Freedom. This article is
a chapter for his just-completed book, Liars, Guns, and Money:
Perception Management and Other New World Disorders. If you wish
to know more or would like to reprint the article in any form,
please contact the author at MavMedia@aol.com. Other articles
by Guma may be viewed at www.TowardFreedom.com.