Private Empire: ExxonMobil and American Power (37 page)

In private, with colleagues and friends, Raymond could be more reflective, and even a little guilt stricken. He wondered if the advanced state of his talks with Yukos might have prompted or influenced Putin’s move against Khodorkovsky, he told friends and colleagues. The reality almost certainly was that Putin and Khodorkovsky were on a path of irreconcilable conflict, no matter what. For ExxonMobil, the arrest placed a punctuation mark on two bold but costly failures: The corporation’s search for shoot-the-moon purchases of oil and gas reserves in Russia and Saudi Arabia had now produced back-to-back zeros. There were those who blamed Raymond’s truculence and ExxonMobil’s general arrogance for contributing to the strikeouts, but even if Raymond were Prince Charming and his corporation played well with others, that would not alter the fact that Saudi Arabia had no trove of nonassociated gas reserves to sell and Russia’s government had no stable plan to secure foreign investment in its oil fields. If even one of these two plays had panned out, ExxonMobil’s reserve replacement challenges might have lessened in the decade ahead. Now the corporation would have to continue to scrap, and its reliance on places such as tiny Qatar and unstable West Africa would not ease anytime soon.

After Khodorkovsky’s arrest, Raymond telephoned Cheney and asked for a meeting. He had kept the Bush administration out of his negotiations during the summer of 2003. He now told the vice president’s office he didn’t want anything from the administration, but he felt he owed them an explanation about what had happened, from ExxonMobil’s perspective. Cheney suggested they meet away from the White House, at the vice president’s official residence on the grounds of the U.S. Naval Observatory, on Massachusetts Avenue. He and Raymond spoke for about ninety minutes. Raymond recounted the history of the failed deal; he and the vice president exchanged assessments.

W
hen Bush administration officials contacted the Kremlin to raise concern about Khodorkovsky’s detention, Putin said that the rule of law in Russia had to run its course—wasn’t that what the United States said it favored?

On January 29, 2004, a Russian commission denied licenses to ExxonMobil and Chevron for drilling in offshore blocks around Sakhalin, blocks that they had leased in 1993. Secretary of State Colin Powell met with his Russian counterpart, Sergey Lavrov, and handed over a letter of protest on behalf of the U.S. oil companies. The Bush administration was still fighting for the companies’ prospects in Russia, but its campaign looked increasingly like a rearguard action, fought while in retreat.

“ExxonMobil and ChevronTexaco have invested approximately $60 million in exploration activities,” Powell pleaded. He continued:

The Russian government’s failure to issue a license to ExxonMobil and ChevronTexaco would hurt the climate for U.S. and other foreign investment in Russia’s energy sector and cast a shadow over Russia’s reputation for fulfilling its commitments. It would also raise serious questions about Russia’s commitment to our bilateral energy partnership. . . . It has been two years since our two presidents launched a strategic energy relationship. Since that time, we have not seen the concrete progress in the foreign investment climate for energy that our partnership was intended to promote.
⁴¹

As the months passed and Putin’s authoritarian retrenchment spread from media to oil deals to the direct suppression of democratic opposition, Bush and all of his advisers realized, sheepishly, that they had “drunk the Kool-Aid a little,” as Don Evans told his colleagues. Global oil prices rose; Russia’s government profited and felt less pressure to change. The Bush team concluded that as soon as Putin realized that rising global oil prices meant he did not need American or European capital to finance improvements in the oil sector, he reverted to autocracy.

A
fter Evans left Bush’s cabinet, in 2005, his telephone rang at his office in Midland, Texas, where he had returned. German Gref, his former counterpart in the Commercial Energy Dialogue, during the years of optimism, told him that Vladimir Putin would like him to fly to Moscow for a visit. Evans agreed.

He found Putin alone in his office, except for his interpreter.

“I would like you to be chairman of Rosneft,” Putin said. Rosneft was the state-owned oil company Lee Raymond had examined and rejected on the grounds that it was a political labyrinth. Igor Sechin, the former leader of the Kremlin siloviki with which Mikhail Khodorkovsky had tangled, now served as an influential figure at the company. He was a beefy man with short, cropped hair.

Evans said that he was flattered and that he would think about it; he flew back to Midland. Putin called Bush to tell him about the job offer he had made.

This was the Putin they had all underestimated in 2001—the K.G.B. man whose idea of how to build an oil partnership with the United States was to provide a lucrative job to one of the American president’s best friends, at the head of a Russian oil company heavily influenced by the Kremlin. Putin’s offer also suggested ambivalence; he wanted both control and international credibility.

Evans thought about the offer for a few days, but never spoke to Bush about it. Some friends told him he was crazy to even think about it; others advised that he give it serious consideration. Evans told his friends that he did think a more globally integrated Russian energy industry could spur economic growth worldwide. He was also mindful of appearances. Gerhard Schroeder, the former chancellor of Germany, had embarrassed himself and his country by accepting a position on the board of Gazprom, the Russian gas giant, days after he left political office; he created the appearance that he and Germany were being paid off by Putin.

After a short period of reflection, Evans decided that working for Rosneft was not right for him. He telephoned Sechin, thanked him, but said he would have to decline.

Later, John Snow, Bush’s second Treasury secretary, found himself in a meeting with Putin where the subject of the job offer to Evans came up. Putin marveled at Evans’s refusal.

“You know,” he told Snow, “if he had taken that, you could have cut your C.I.A. budget in half!”
⁴²

Putin misunderstood the American system as much as American analysts misunderstood him. Russian oil companies cut their deals from a position that was clearly subordinate to the state. In Putin’s worldview, the recruitment of a Bush friend like Evans to Rosneft made perfect sense. The converse proposition—the idea that ExxonMobil would recruit a Putin consigliere to its senior-most executive ranks in Irving, in order to solidify U.S.-Russian relations—was highly unlikely. ExxonMobil had never been an arm of the Bush administration’s Russia reset after 2001, events had demonstrated; it was a private global empire that would choose to align with Bush, or not, as its enduring interests required.

Thirteen

“Assisted Regime Change”

T
heresa Whelan joined the Defense Intelligence Agency out of college in 1987. She served as a junior analyst of Africa as the cold war ended. During the George H. W. Bush administration, Whelan came to the attention of what was known to insiders as O.S.D.-Policy, a mixed civilian and uniformed staff that reported to the under secretary of defense for policy, and through that officeholder, to the secretary of defense. Whelan moved to O.S.D.-Policy’s Africa desk and served there through the tumult of the early 1990s—the withdrawal of American troops from Somalia and the genocide in Rwanda. Later she worked on Balkans issues during the Kosovo conflict. When she returned as office director of the Pentagon’s Africa policy unit in 2001, she was a seasoned manager of the Defense Department’s overseas programs to train foreign militaries, to support international peacekeepers, to patrol ocean waters, and to covertly attack terrorists. A year after the September 11 attacks, George W. Bush promoted her again, naming her as the deputy assistant secretary of defense (or “Das-D,” in Washington’s vernacular) in charge of the Pentagon’s Africa policy.

On November 19, 2003, a warm and rainy day in the capital, Whelan rode after work across the Potomac to a hotel conference room to deliver a speech. The occasion was the annual meeting of the International Peace Operations Association, a trade association of private security companies that had determined that “peace operations” was a better branding strategy than “corporate mercenaries.” Many of the executives in the audience had an interest in whether Pentagon policy might encourage more contracts for private security firms, particularly in regions like Africa, given that America’s uniformed military was increasingly overtaxed in Afghanistan and Iraq. Whelan spoke about the limitations of relying on contractors for military missions, but also about some of the advantages that private security firms offered in training armies in poor countries, such as the fact that corporate trainers could stay in the targeted nation for years at a time, building local expertise and long-lasting relationships.

She answered some questions after her formal remarks, received a round of applause, and then, “as often happens at those kinds of things,” she recalled, about fifty people gathered around her “shoving business cards in my face, chitchatting.” One man with a distinctly British accent caught her attention. He introduced himself as Greg Wales. He said he was an independent “security consultant” who worked with oil companies in West Africa, around the Gulf of Guinea. They talked about the region; Wales seemed knowledgeable.

“I’m going to be in town,” Wales said. “Would you be interested in sitting down and talking more?”

“Sure,” Whelan said. “Fine.” She met regularly with security firms that worked with American oil companies in Africa, or their consultants. It helped her keep up with details about politics and violence in countries where American intelligence and diplomatic reporting could be very limited.
¹

Not too long afterward, Wales made an appointment to visit Whelan in her Pentagon office. She did not research his background. If she had, it might not have helped much; Wales was an elusive figure. He was an accountant by profession who had collaborated during the 1990s with private security and mercenary corporations active in diamond-rich regions of Africa.

During that autumn of 2003, Wales was involved, as it happened, in a conspiracy organized by British and South African military veterans to overthrow the government of Equatorial Guinea. ExxonMobil Corporation was the largest oil company invested there. The conspirators intended to replace the current president, Teodoro Obiang Nguema, with whose government ExxonMobil had signed its contracts, with an exiled opposition leader, Severo Moto, who lived in Spain, the former colonial power in the country. Moto had gone so far as to sign his own contract with the mercenaries, guaranteeing cash payments and future security contracts to be paid for by the country’s oil wealth, if the coup plan succeeded.

Greg Wales had spent much of 2003 planning for the operation. He had written a number of strategy documents. One of them, entitled “Assisted Regime Change,” had emphasized that it would be important to persuade all of the American oil companies active in Equatorial Guinea that their investments and profits would be protected after a change of government. “Foreign investors are to be reassured,” Wales wrote.
²

Wales was in charge of the coup’s political strategy, particularly in the United States. He traveled to Washington and telephoned the D.C. offices of major oil companies doing business in Equatorial Guinea—as well as other companies that might be interested in moving in. He was vague, but he suggested that political changes might soon be in the offing in Equatorial Guinea.

He arrived alone for his meeting at the Pentagon. Whelan invited a Defense Department aide to sit in. As Whelan recalled it, the discussion touched generally on the rising importance of oil production in West Africa and the security challenges that seemed to come alongside. They talked about Angola, a major oil producer recovering from a long civil war, as well as the insurgency- and crime-wracked oil-producing regions of the Niger Delta, in Nigeria—“just the whole enchilada,” Whelan recalled.
³

They also addressed Equatorial Guinea. “He made a comment that he thought that Equatorial Guinea was probably not the most stable place in the world,” she remembered. Wales described himself as being in the security and air transport business in Africa. “He said that his colleagues were reporting to him that there were a lot of well-heeled Equato- Guineans . . . that were sort of prepaying or prescheduling flights out of the country in the event of some sort of problem. . . . So that was his one piece of intelligence—if you want to call it that—that the leadership in Equatorial Guinea was nervous, and it appeared that family members were making their plans for a getaway, just in case.”

That the elite in Equatorial Guinea might be nervous and prebooking flights as a hedge against a coup did not strike her as particularly noteworthy. The country was like a small, unprotected, oil-endowed bank sitting in a bad neighborhood, just waiting to be robbed. During the 1970s, Frederick Forsyth had written his novel
The Dogs of War,
about a mercenary-led coup in a small African country, while staying at a hotel above Malabo’s harbor; Forsyth himself later became entangled in a stillborn coup attempt against Equatorial Guinea’s dictator. Coup plots seemed to blow through the country like its tropical storms. Leaders of Obiang’s fractured and repressed political opposition were regularly accused by the dictator of fomenting his overthrow. Periodically, the president arrested his own relatives for plotting a move on his palace. In 2002, Obiang had detained and tried dozens of alleged plotters on treason charges. The poor standards of the trial were one reason why the State Department had so far refused Obiang’s pleading for a license to hire M.P.R.I., the Virginia-based security firm, to train his police and military. The United States had earlier approved an M.P.R.I. license for maritime defense on the grounds that the Equatorial Guinean coast guard posed little threat to the country’s citizens and might defend offshore oil platforms owned by ExxonMobil, Marathon, and Hess. Yet the Bush administration judged that training Obiang’s land forces to shore up his dictatorship could not be justified until the government improved its human rights performance.

Theresa Whelan interpreted Greg Wales’s purpose in visiting her as typical of the hustling, networking world of profit-making consultants in the global security field. “He wanted to make sure that he could say that he had a contact, that he had access to the Pentagon for some purpose in the future, whatever that might be. But I didn’t think that he had a particular agenda, other than making it clear to us that he was a potentially valuable interlocutor,” Whelan concluded. “It was the equivalent of a sales call or a marketing meeting. For our trouble in listening to him, we would get another perspective on the ebb and flow of the political situation in the region.”

After Wales departed, Whelan made no record of the conversation and distributed no memos or e-mails to Pentagon colleagues, she said. It did not occur to her to do so because the entire encounter had been “pretty unremarkable.”
⁴

It is not known how Wales assessed the conversation, but it is clear that there was nothing routine about his thinking about the Pentagon’s possible role in his coup plan. His fellow conspirators had the impression that winter, based in part on what Wales told them after traveling to Washington, that the United States might actively support their efforts to seize power—or at least that the Bush administration might not object. It is not clear why such an impression might have developed among the coup planners. Contemporary memos show that Wales and his colleagues knew they faced a risk of alienating the United States, particularly if major oil companies such as ExxonMobil concluded that the change of regime would jeopardize their investments. Threatening American oil interests in Equatorial Guinea, Wales wrote, might be “what gets the Marines coming in.”
⁵

S
imon Mann served as Greg Wales’s principal military partner in the plot under way that summer to overthrow Obiang. He was a lean and poised man in late middle age, a descendant of English cricket captains, who had grown into a formidably successful adventurer. After graduation from Eton, the elite preparatory school, he joined the Special Air Service, Britain’s principal special forces unit. Later he founded Executive Outcomes and Sandline International, part of a network of corporations that provided mercenary military services to African governments in exchange for diamond mining and other business concessions. During the 1990s, Executive Outcomes won contracts with Angola, to battle a formerly anti-Communist rebel movement, and with Sierra Leone, to keep anti-government rebel marauders away from that West African country’s diamond mines. Mann grew wealthy, bought an estate in the English countryside, another in London, and married, apparently intending to settle down. He and his younger wife started a family, but in 2003, when he turned fifty-one, Mann became restless. Eli Calil, a Nigerian-born Lebanese oil trader with extensive contacts in Africa, and Severo Moto, the Equato-Guinean opposition leader in Madrid, recruited him early that year, Mann later said in a Malabo courtroom. “I agreed to do this for the money, yes, but also because I believed it was right,” he said.
⁶

That spring, Mann learned, he and others involved in the coup planning said later, that Spanish prime minister José María Aznar supported the plan. Aznar, a former Franco supporter who had become a successful conservative politician, oversaw an aggressive foreign policy. On March 17, 2003, on the eve of the invasion of Iraq, he appeared with George W. Bush, British prime minister Tony Blair, and Portugese prime minister José Durão Barroso in the Azores to provide a show of solidarity for the American-led plan to overthrow Saddam Hussein. “We are committed on a day-to-day fight against new threats, such as terrorism, weapons of mass destruction, and tyrannic regimes that do not comply with international law,” Aznar declared. “They threaten all of us, and we must all act, consequently.”
⁷

“The Spanish PM has met Severo Moto three times,” Mann later wrote, and he indicated that Spain would take concrete steps to support Moto’s installation in power in Malabo if the mercenaries’ coup plan succeeded. “He has, I am told, informed SM that as soon as he is established in EG he will send 3000 Guardia Civil. I have been repeatedly told that the Spanish Govt will support the return of SM immediately and strongly. They will, however, deny that they are aware of any operations of this sort.” As Mann and his colleagues approached their launch date for the coup, Spain dispatched warships bearing marines to the Gulf of Guinea; they attempted to dock in Malabo, but were denied permission. The Spanish foreign minister was quoted as describing the naval deployment as a “mission of cooperation.”
⁸

Greg Wales’s travels to Washington—his awkward approach to Theresa Whelan at the Pentagon and his unsolicited telephoning of oil companies’ lobbying offices—suggested a strain of amateurism in the plot at odds with Mann’s record of corporate security success during the 1990s. The plan had several prongs. An undercover team led by a South African named Nick du Toit infiltrated Malabo in late 2003 in the guise of businessmen. They set up a firm called Triple Option and claimed to be interested in fishing. In fact they carried out reconnaissance and prepared to aid the coup team when it landed at the airport. The main external raiding party would be made up of veteran soldiers from South Africa and Angola. They would streak into Malabo from southern Africa in a transport plane, seize the airport, and then roll toward the presidential palace to capture or kill Obiang. As Du Toit later described it, “The advance group and the arriving mercenaries would meet at Malabo’s airport and then drive to Obiang’s palace, kidnap the president, and then systematically kill all other [Equato-Guinean] ministers. Obiang would be exiled to Spain and a plane would arrive carrying Severo Moto and his supporters to form a new government.” Du Toit would be paid either $1 million or $5 million—there are documents reporting both numbers—if the coup succeeded.
⁹

Mark Thatcher, the son of Margaret Thatcher, the cold war–era conservative prime minister of Britain, lent the group funds, although he said later that he had been misled about the purpose of his loan and had no idea it was to be used in support of a coup d’état. Soldiers clued in on the plan in South Africa and Equatorial Guinea spoke so loosely about their plans that the British government picked up coup rumors simply by monitoring Africa’s radio services. When Obiang visited South Africa in December 2003, his hosts passed intelligence that he should be watchful. Angola’s government passed him warnings as well. The intelligence was accurate; the coup makers had moved toward a strike that winter.