17 JUNE 2002: HOW
CORRUPT IS THE BUSH ADMINISTRATION, AND WHAT IS THE FALLOUT? WORSE THAN
YOU COULD POSSIBLY IMAGINE.

Dark heart of the American dream

It’s the most polluted state
in the planet’s most powerful country. Ed Vulliamy

goes into George Bush’s
backyard to reveal how big oil got in bed with big

politics and the price paid
by the little people

Sunday June 16, 2002

The
Observer

There is a perverse beauty
to the landscape arraigned below the iron bridge

where Highway 255 strides
the Houston Ship Channel: great towers of light and

fire as far as the eye can
behold; sinewy steel piping, plumes of smoke and

flame twinkling into a Texas
twilight coloured by a shroud of pollution hanging

from the sky. The awesome
prepotency of this smokescape is no illusion, for this

is an epicentre of power,
oil capital of the Western world and the most

industrialised corner of
the United States. It is also the capital of a power

machine perfected in Texas,
elevated to rule the nation and now unchallenged

across the planet. A machine
that operates in perpetual motion – an equilibrium

of interests – between industry
and politics. LaNell Anderson, former Republican

voter, businesswoman and
real-estate broker who lived many years in this land of

smokestacks and smog, calls
it ‘vending-machine politics: you puts your money in

and you gets your product
out’.

    ‘We don’t
see ourselves as a dynasty,’ said George Bush Sr as his son launched

the election campaign that
won him the current presidency, raiding father’s

Rolodex to do so. ‘We don’t
feel entitled to anything.’ And yet at no point in

the past 50 years – the
half-century since 1952 which defines the modern age –

has there not been a Bush
in a governor’s mansion (in Texas or Florida), on

Capitol Hill or in the White
House – and usually more than one of those at a

time. The ‘vending machine’
is a single family whose tango with the powers which

illuminate this endless
horizon of light and flame is a dance around every

corner in the labyrinth
of Texan and now national – indeed global – politics.

‘Everything they learned
when they started out in west Texas,’ says Dr Neil

Carman, once a regulator
of pollution in the state, ‘they applied to the

governor’s mansion, the
nation and the world… Power in America is not so much

about George W Bush, it’s
about the people from Texas who put him there.’

    This
is the dynasty’s throne, the state whose highways are lined with the

spirited advice ‘Don’t Mess
With Texas’ (originally the slogan of an anti-litter

campaign). As if litter
would make much difference: Texas counts the worst

pollution record in the
US, top in the belching of toxic chemicals and

carcinogens into the air,
top in chemical spills, top in ozone pollution, top in

carbon-dioxide emissions,
top for mercury emission, top in clean-water

violations, top in the production
of hazardous waste. Houston overtook Los

Angeles for the coveted
title of ‘most polluted city’ in the early 90s.

    ‘You
are looking at the biggest oil refinery in the world,’ indicates LaNell

Anderson. She refers to
the edifice that is the 3,000-acre Exxon Mobil plant at

Baytown, near Houston, producer
of 507,800 barrels a day. Here begins a story of

both dynasty and destiny,
for it was on this spot in 1917 that the Bush family’s

oil connection was forged
– where the Humble Oil company, which struck black

gold in the Houston suburb
of that name, took root, later to be- come the Exxon

behemoth. Humble’s founder,
William Stamps Farish, went on to become president

of Standard Oil. His daughter
became a friend of George Bush Sr and his grandson

William Jr was taken in
‘almost like family’ (said Barbara Bush) while

campaigning for George Sr’s
entrée into Washington Senatorial politics in 1964.

Farish Jr claims to have
been the first man to whom Bush Sr confided his

ambition to be president
one day, and was last year named US Ambassador to

London.

    At first,
Anderson welcomed the benefits to a community of the 200 oil-related

industries relocated to
the Houston area by the time she and her second husband

set up home in a suburb
wedged between Exxon and the Lyondell chemical plant.

Neither she nor he had any
history of disease in their families. But in 1985,

her husband’s daughter gave
birth to a girl, Alyssa, with a rare liver disease –

she died aged six months.
In 1986, Anderson’s mother became ill and died of bone

cancer a year later. The
following year, Anderson and her sister were diagnosed

with rheumatoid arthritis,
as was a granddaughter in 1992, and an older sister

with Crohn’s disease. In
1991, her father died from emphysema; a year later the

mother of Alyssa gave birth
to a son immediately diagnosed with severe asthma.

Anderson connects the litany
of disease with mishaps by her industrial

neighbours. She paraphrases
their attitude thus: ‘If someone doesn’t like it,

they can sue us if they
can – and since we have more money than God, we will

win.’

    A thumbnail
sketch of politics and the environment in the United States today

depicts oil as the lifeblood
running through every vein of an administration

forging ahead with its energy
policy. The White House has just been forced to

disclose (after being faced
with a Congressional subpoena) that it drew up a

national energy plan based
on increased production without regard to the

environment or conservation,
having failed to consult with anyone other than its

friends among the producers
themselves, notably the disgraced Enron. This

despite the fact that an
energy crisis in California last summer caused most

analysts to draw the opposite
conclusion, stressing the need to curb a

gas-guzzling America.

    At the
hub of this turning wheel of influence is Vice President Dick Cheney,

fresh into office from his
post as chief executive of Halliburton, the world’s

second-largest oil-drilling
services company, where he netted a personal fortune

of $36m in the year before
leaving, with help from contacts accumulated while

serving under George Bush
Sr. Just last week, however, Halliburton joined Enron

in coming under investigation
by the Securities and Exchange Commission for the

same system of publishing
inflated revenues – ‘aggressive accounting’ – for

which Enron has become a
synonym for shame. These alleged misdeeds took place

during Cheney’s directorship.
The
company also faces a floodtide of civil

lawsuits over asbestosis_
unless a model can be found (as has been established

in Texas) to make such resort
to the law nigh impossible for anyone without

money.

    The entwinement
of the Bush dynasty with the energy barons of Texas has

apparently humble beginnings,
in the Lone Star State’s wild west, on the plains

around Midland and Odessa.
This is barren land across which dust devils fly and

trains rumble like iron
snakes. This is where George Bush Sr was sent by his

father, Senator Prescott
Bush, to a trainee job with the International Derrick

and Equipment Company, a
subsidiary of Dresser Industries, controlled by the

Bush family and selling
more oil rigs than anyone in the world. (Dresser later

became absorbed by Halliburton.)

    The world
first heard of Odessa on that fateful day in December 1998 when Bush

Jr was governor of Texas
and the sky turned black after an ‘upset’ at the

Huntsman chemical plant
literally on the wrong side of the railroad tracks it

shares with poor housing,
where Mexicans and blacks live. (An ‘upset’ is an

unplanned accident releasing
pollution, not part of the plant’s normal running

procedure, and which does
not count in its regulatory tally.) Lucia Llanez, who

lives in this tightly knit
community of bungalows between plant and railroad,

will never forget this one:
‘It was dark all over; cars on the Interstate

slowing down and putting
their lights on because they couldn’t see, though it

was day. There was a rumbling
like trains that rattled the windows, and people

were going to hospital for
watering eyes, allergies and problems breathing. The

cloud stayed two weeks.’

    The story
of Huntsman goes back to the days of Bush Sr’s arrival, when Odessa

was a town of what retired
fireman Don Dangerfield calls ‘wildcatters’. In the

40s, the US Air Force bombed
deep holes in the giant Permian oil basin in a

search for oil which then
attracted a stampede of speculators (including those

from Humble) who would,
recalls Dangerfield, ‘spend the nights in a hotel, the

End of the Golden West,
and gamble their lots in rooms so thick with cigar smoke

you could hardly see’. Among
them was a man he remembers well: John Sam

Shepherd, a former attorney
general of Texas and member of the White Citizens

Council – a political wing
of the Ku Klux Klan – disgraced by a land scandal and

come to seek his fortune
out West by setting up the El Paso Products company,

later Huntsman.

    George
Bush landed in this mayhem but quickly decamped 20 miles north to

Midland, where new millionaires
like him established a country club, a Harvard

and a Yale club, met at
the Petroleum Club and played golf on irrigated lawns.

Midland was, recalls Gene
Collins, a member of the National Association for the

Advancement of Colored People
in Odessam ‘one of two towns in America with a

Rolls-Royce dealership and
more millionaires per head than anywhere’. This was

where Bush Sr built his
oil fortune, launched a political career on its

shoulders and raised his
son George W Bush in the art and language of power he

now feigns not to speak.
The story of how Bush Sr constructed his empire is well

known, as is that of how
his son George W was groomed to follow in his

footsteps. Less widely broadcast,
however, are the depths and intricacies of a

system the Bush family built
in bonding with the energy industry, as the

dynastic machine elevated
its methods from Odessa to the Senate, the governor’s

mansion in Austin, the oil
centres of Houston and Dallas, the White House and

thereafter the globe.

    Neil
Carman has a professorial air to him that belies the sharpness of the

surgical blade with which
he tries to operate on ‘Toxic Texas’. Originally a

plant biologist, he was
an investigator for the Texas Natural Resources

Conservation Commission
(TNRCC), responsible for issuing permits for agreed

levels of pollution and
enforcing environmental law. In 1989, he took on the

General Tire and Rubber
Company for ‘systematic violations’.

    The firm
hired a lobbyist, Larry Feldcamp, from the Baker Botts law firm whose

senior partner, James Baker
III, was secretary of state to then president George

Bush Sr and who later, as
an attorney, secured the delivery of the state of

Florida for Bush Jr during
last year’s election recounts. Baker Botts advertises

itself as a ‘full service
firm’, counting Shell, Mobil, Union Carbide, Huntsman,

Amoco on its books. The
other law firm indivisible from the energy lobby and the

Bush fiefdom is Vinson &
Elkins, which acts for both Enron and the Alcoa

aluminium giant, whose former
chief executive Paul O’Neill is now US Treasury

Secretary. Between these
law firms and the regulatory body supposed to face them

down, says Dr Carman, ‘there’s
a revolving door. Feldcamp’s place was taken

recently by the most active
attorney on the oil scene, Pamela Giblin – one of

the TNRCC’s first appointees.’

    Carman
resigned because ‘all they had to do was hire people like Feldcamp and

you were off the case. They
did not deny permits – they must have issued 50,000

permits for air pollution
during my time and refused only two, on occasions when

the public raised hell.
And they don’t revoke them – it’s not like drunk

driving: if you get caught,
they just keep reissuing. They used to refer to

these places as “industrial
areas”, as if that meant they were outside the law.

I called them “sacrifice
zones”.’

    There
is another problem, unique to Texas: the ‘grandfathering’ rule.

Grandfathering dates back
to the Texas Clean Air Act of 1971, exempting existing

installations from compliance
with new regulations. The idea was that they would

be modernised or become
obsolete and close. In the event, firms found that not

being obliged to spend on
pollution control gave them a competitive edge, and

nearly three decades later,
grandfathering accounted for more than 1,000 plants

and 35 per cent of all pollution
in Texas. Nevertheless, in the early 90s, the

TNRCC began to toughen its
stance in accordance with a more aggressive federal

approach to pollution by
the new Clinton administration. Then, in 1994, Texas

went to the polls to elect
a new governor – ‘And when Bush took over,’ says

Carman, ‘everything changed.’

    Two groups
based in Austin – Texans for Public Justice (TPJ) and Public Research

Works (PRW) – crunched the
statistics on the wave of money on which George W

Bush sailed into the governor’s
mansion. It was what Andrew Wheat of the TPJ

calls ‘something unheard
of in Texas or anywhere else: $42m on two campaigns’.

Grandfathered polluters
poured $10.2m into the campaign coffers between 1993 and

1998, led by what PRW calls
the ‘dirty 30’, including Exxon, Shell, Amoco, Enron

and the Alcoa aluminium
giant. Bush himself received $1.5m from 55 grandfathered

companies, led by Enron,
with a handsome $348,500 top-up from the man he calls

Kenny Boy – Kenneth Lay,
the company’s chief executive, currently under criminal

investigation.

    Wheat’s
analysis of the new governor’s ‘personal time’ shows a revolving door

for campaign donors and
the energy industry. Andrew Barrett, Bush’s in-house

environmental policy advisor,
began daily visits to the TNRCC in preparation for

the appointment of new commissioners:
Ralph Marquez, lobbyist for the Texas

Chemical Council and former
executive of the Monsanto chemical firm, and Barry

McBee, attorney with the
law firm Thompson & Knight, a major contributor to Bush

funds with a host of oil-industry
clients.

    Legislation
based on the notion of ‘self-regulation’ followed: a law enabling

companies to audit their
own pollution records provided they reported them, in

exchange for which there
would be absolute protection from public disclosure.

Big oil was delighted, as
a memo obtained by an environmentalist group, the

Texas SEED Coalition, illustrated:
a record of a gathering in June 1977 at Exxon

in Houston by 40 representatives
of the Texas oil and gas industries – written

by one of their number –
said ‘the “insiders” from oil and gas believe that the

governor’s office will persuade
the TNRCC to accept whatever program is

developed between the industry
group and the governor’s office’.

    It was
not until Bush became president that, in its 2001 state legislature,

Texas finally decided to
rein in the ‘grandfathered’ plants. A bill gave them

until 2007 to come into
line with federal law or shut down. Even then, there was

a legal challenge to the
TNRCC’s science from the Houston Business Partnership,

recently entrusted with
millions in federal money to clean up the Gulf

coastline. The partnership
is a high-octane chamber of commerce, throwing up a

few familiar names: Exxon,
Conoco, Enron, James Baker’s law firm Baker Botts –

and George Bush Sr.

    Most
important of all – and best hidden – was Bush’s programme for Tort Reform.

It was this that his father’s
advisor Karl Rove (dispatched to steer Bush’s

presidential campaign and
now the White House itself) insisted the new governor

make his hallmark, and this
is potentially the dynasty’s greatest gift to big

oil. Put simply, Tort Reform
means making it harder for citizens to sue

corporations. TPJ calculated
that business interests specifically isolating Tort

Reform on their political
agenda poured money into Bush’s gubernatorial

campaigns. Soon after being
elected governor, says Andrew Wheat, Bush declared

Tort Reform an ’emergency
issue’.

    This
meant appointing a judge to the Texas supreme court whom President Bush
is

tipped to bring aboard the
Supreme Court in Washington (to which, some say, he

owes his presidency). Alberto
Gonzalez wrote a decision soon after his

appointment to the Texas
court which made it all but impossible for citizens to

bring class actions. ‘The
result,’ says Shawn Isbell, a lawyer working on

environmental cases, ‘is
that it will simply be too expensive to bring cases

against the corporations.’

    Another
ruling, says Sandra McKenzie, the lawyer who fought a long and bitter

battle against the Formosa
Plastics firm, stipulates that ‘anyone trying to

prove a personal chemical
injury had to show that other people in a similar

situation had suffered the
same reaction, according to a study in a published

journal’. The new precedents,
says McKenzie, ‘changed the laws to establish a

no-compromise, “take no
prisoners” approach by the Bushes’.

    In 1989,
George Bush presented the Governor’s Award for Environ mental

Excellence to the Valero
chemical refining company. Foremost in the minds of the

proud executives at the
ceremony in Austin’s luxury Four Seasons Hotel was their

‘refinery of the future’
at Corpus Christi, on the Gulf, at the far end of the

coastal strip that runs
through Houston to the Louisiana border.

    Alfred
Williams gets a better view of the refinery of the future across the

freeway from the garden
of his mobile home than Governor Bush did from the Four

Seasons. He can smell it
better too – the inimitable stench on the muggy delta

air that signifies the cooking
up of cheap crude-oil ‘feed stock’ to produce its

chemical by-product and
treating the neighbourhood to a dose of sulphur dioxide.

    When
Williams, an ex-Vietnam Marine, moved here in 1972, ‘this was all

farmland’. He now delivers
an impassioned requiem for his garden, with its peach

trees dead or buckling over.
The light of a quicksilver moon catches the plume

of sulphur along what they
call Refinery Row.

    ‘I’m
in my golden years,’ he reflects. ‘But I can’t sell my house because no

bank will give a loan without
40 per cent down. And they won’t relocate me, as

I’d do if they offered.

    ‘It started
with having to wipe residue from off of my car. Then the iron on my

rooftop here started to
get corroded, and the trees were dying. Sometimes I have

to come inside because my
eyes are burning.’

    Williams
filed a civil suit against Valero, steered by attorney Shawn Isbell.

The court in Corpus denied
Williams class action status in accordance with the

zeitgeist, but Isbell managed
to discover how the refinery of the future was so

poorly crafted that Valero
had (unsuccessfully) sued the companies which had

built it. She also found
out how the Texas system of overlooking ‘upsets’ works.

Since 1994, Valero had suffered
more than 480 ‘upsets’, but the TNRCC records

each set of emissions separately
– for example, Valero’s sulphur-dioxide

emissions for 1977 show
up on the commission’s website as 166.4 tons, while the

reality including ‘upsets’
is closer to 700 tons. Nevertheless, says Isbell,

‘I’ve seen the TNRCC go
harder after a pig farmer than I have after these kinds

of companies.’

    Williams
keeps a notebook by his phone to record the ‘upsets’ over the road. He

reports them to the TNRCC.
But, he says, ‘I call them rainbows: they are shut at

night and on the weekend
when the sulphur is released, and they only come when

the storm has come and gone.’

    Cornelius
Harmon is a cab driver in Corpus, and takes a drive along Refinery

Row, down a road he calls
the ‘buffer zone’. It divides a wasteland of former

housing – where those relocated
because of pollution by another plant, Koch,

once lived – from the mostly
black and Hispanic community of Hillcrest. ‘Are you

gonna tell me,’ posits Harmon,
‘that the hand of God Almighty drew a line down

this road and He says: “Over
yonder side is contaminated and this side is fit

for folks to live ?” And
what have we got here? Well, I’ll be doggone if it’s

not a school, with children
playing in the smell. The people who run these

things, they give our kids
a new pair of sneakers and go to church and think

they’re going to heaven.
But at the pearly gates, they’re going to find St Peter

in his Afro saying: “Whassup
cuz? Seems like you’re trying to get into the wrong

place.”‘

    Time
came for destiny to fulfil itself, for the son to stand for the high office

in Washington which the
Bush dynasty and its backers saw as having been usurped

by Bill Clinton. The story
of what carried George W Bush to the White House is

well known: the most ruthlessly
efficient campaigning machine ever assembled –

by Karl Rove – with all
the family’s best connections filling a treasure chest

that broke all records.
As they returned to number-crunching in Austin, Texans

for Public Justice and Public
Research Works found little to surprise them save

the machine’s speed and
efficacy. Within a month, Bush had raised hundreds of

thousands of dollars, with
Enron leading the field and two law firms giving

$146,900 – most prominently
Vinson and Elkins, attorneys to Enron and the Alcoa

aluminium giant, and James
Baker’s company, lawyers to the oil industry.

    When
Bush came to pick his cabinet, almost all pivotal positions went to Bush

Sr’s inner sanctum, apart
from the posts of commerce secretary (Don Evans,

longtime buddy of Bush Jr’s
and a fellow Midland oil man) and treasury secretary

(Paul O’Neill, currently
touring the globe with Bono of U2, and former chief

executive of Alcoa, the
world’s biggest producer of aluminium).

    Alcoa
held a stockholders meeting to send O’Neill off with a torrent of eulogies

and an annual pay packet
worth $36m, but three speakers spoiled the party. Two

were trade unionists from
O’Neill’s troubled plant at Ciudad Acuna in Mexico,

challenging the chief executive’s
claim that conditions at their factory were so

good ‘they can eat off the
floor’. The third was the soft-spoken Texan Ron

Giles, drawing attention
to the biggest of the state’s ‘grandfathered’ polluters

– the Alcoa smelting plant
at Rockdale. If the Rockdale plant were a single

state, it would count 40th
for pollution among the 50 in the union, belching

more than 100,000 tons of
toxins in 1997.

    The smokestacks
of the largest aluminium smelter in North America fit

incongruously into the pastoral
ranch land northeast of Austin. And they seem

especially odd as backdrop
to the 300-acre ranch where Wayne Brinkley’s family

has raised cattle since
the late 1800s, but over which hangs a stench wafting

across the moonscape of
Alcoa’s lignite mine.

    Brinkley
looks as much the Texan as President Bush in his boots and Stetson –

‘Only difference is,’ he
says, ‘I am one, and Bush is not.’ In his office is a

hog, stuffed and mounted,
and an awesome collection of vintage knives and

firearms. On his desk is
a survey by the independent Research Analysis

Consultations group showing
that concentrations of magnesium, calcium and

aluminium register ‘very
high’ around Brinkley’s barn, and sodium and titanium

over his fields. ‘My son
had cancer when he was just a young kid,’ he says in a

voice like sandpaper. ‘They
tried to buy us out. They keep offering various

deals saying I can’t talk
to anyone about this for 35 years, and then they

changed it to forever. But
why should I leave? My family’s been here 100 years;

they’ve been here 50. They
should do it by the book, and keep it clean for the

rest of us.’

    Alcoa
continues regardless, feted by Wall Street for ‘dazzling’ returns. But
in

the last light of a warm
evening, quiet rebellion stirs in the community room of

a little town called Elgin.
A group of local people, Neighbors for Neighbors,

have obtained records that
show Alcoa to be cheating, making improvements to its

production plant worth some
$45m without parallel investments in pollution

control. As a direct result
of the Neighbors’ exposé, the company was

investigated by a TNRCC
with no place to hide this time.

    Neighbors
for Neighbors, enjoying statewide coverage and acclaim for its pluck,

is itself suing the company.
Billie Woods, Neighbors’ president, says that Alcoa

has responded by pressing
ahead with its plans for a new lignite mine that would

carve up 15,000 acres of
farmland. The company has also made court applications

to enter and search the
homes of Neighbors activists. The request was denied,

but the matter moved the
usually conservative Daily Texan newspaper to demand:

‘Stop the Alcoa Gestapo!’

    Yesterday
Texas, today Washington, tomorrow the world. With Bush family business

back home in the US presidency,
it now moves, in the form of the father, to the

apex of global finance.
The Carlyle Group defines the next phase of power: a

Washington-based private
equity fund with a difference. It is headed by Frank

Carlucci, former CIA director
and defense secretary under Ronald Reagan and

lifelong friend of George
Bush Sr. Bush (also once director of the CIA) sits

next to Carlucci on the
board with a portfolio specialising in Asia and does not

hesitate to communicate
with his son on concerns of regional relevance to

Carlyle such as Afghanistan
or the Pacific Rim. Bush Jr was once chairman of a

Carlyle subsidiary making
in-flight food.

    On Carlucci’s
other flank is the ubiquitous James Baker III. Chairman of Carlyle

Europe is John Major. The
group’s new asset management is headed by Afsaneh

Beschloss, former treasurer
of the World Bank. Carlyle has grown quickly to be

worth some $12bn, specialising
in energy and defence, with particular attention

to the oil-producing Gulf
states. Among its most eager investors is Prince

Bandar, Saudi ambassador
to Washington and his father Prince Sultan, the

kingdom’s defence minister.
The group’s most spectacular recent coup was to reap

$400m in a stock sale of
its subsidiary United Defence Industries, maker of the

Crusader artillery system
which most military experts argued was redundant, but

which won $470m in development
money from the Pentagon and whose future in the

US arsenal still hangs in
the balance after a series of recent meetings between

Carlucci and Defence Secretary
Donald Rumsfeld. Within a month of 11 September

last year, Carlucci was
meeting with Rumsfeld and his deputy Paul Wolfowitz, and

10 days later offered an
assessment which exactly predicted the endless-war

scenario: ‘We as Americans,’
he said, ‘have to recognise that terrorism is more

or less a permanent situation.’

    ‘What’s
the secret?’ chided William Conway, a co-founder of the group. ‘I don’t

think we have any secrets.
We are a group of businessmen who have made a huge

amount of money for our
investors.‘ ‘I never bought into this conspiracy
theory

about
the Bush family, the energy companies or the Carlyle Group,’ says Michael

King,
seasoned political editor of the Austin Chronicle , who has observed the

phenomenon
for decades. ‘It is perfectly clear what they’re aiming at from what

they
do in public: managing the global economy to their own advantage, and doing

a
pretty good job of it.’

    On 11
September, while Al-Qaeda’s planes slammed into the World Trade Center
and

the Pentagon, the Carlyle
Group hosted a conference at a Washington hotel. Among

the guests of honour was
a valued investor: Shafig bin Laden, brother to Osama.

THANKS: COULTHART.