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.
