Mother Jones
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When big oil companies like Exxon-Mobil and Chevron set their sights on a prime new oil reserve in Africa, Asia, or the Middle East, the first phone call they make usually isn’t to the government office putting it up for sale. Instead, they ring up one of their contacts in a small, elite group of so-called “fixers,” a shady cabal of a few dozen well-connected billionaires who hold the strings on the market for the world’s most valuable commodity. The fixer gets a fat fee and a straightforward assignment: Do whatever you need to do to get us those oil rights.
Unlike the US, where oil rights are held by individual property owners and leased to mining companies, in most developing nations oil rights are held by the government, and getting them means having a personal relationship with the right ministers—and knowing how to grease their palms. Since the mid-1900s, oil companies have relied on fixers to do their dirty work, crisscrossing the globe with a Rolodex stacked with the calling cards of corrupt heads of state. In the end, we get cheap oil, oil companies get plausible deniability, and the leaders of some of the world’s most oppressive regimes get astronomically rich.
Ken Silverstein is a veteran journalist who has spent the last several years finagling his way into the traditionally hyper-reclusive world of oil fixers, gaining unprecedented access to many key players and amassing a portfolio of outrageous tales of bribery, exploitation, and obscene wealth. His book, The Secret World of Oil, hit shelves yesterday, and I spoke to him about how US companies continue to skirt anti-bribery laws in the high-stakes pursuit of oil.
Climate Desk: The oil companies that are using fixers, these are the companies that people are familiar with—Exxon, Chevron?
Ken Silverstein: In all the big oil companies, it would be rare for them never to use fixers in their deals. The bigger firms like Exxon have a lot of power and local knowledge and may handle this sort of thing on their own. But even Exxon, for part of the negotiations, is going to rely on a fixer. One of the reasons is that it’s a dicey game. It’s not always flat-out bribery, although in the old days it really was. The old model was that let’s say you were a company and you wanted a concession in Nigeria. Well, you’d go to Fixer A and give Fixer A, say, a million dollars, and Fixer A would go to his friends in the Nigerian government and wire half a million dollars into a few Swiss bank accounts—or just, you know, a suitcase full of cash. That was it. Fixer A kept his half million, the government officials had their half million, and the company got its oil concession. Pretty simple, pretty straightforward.
Well, that’s changed a lot, partly because the US and Europe have outlawed bribery. So it’s gotten dicier. There’s a senior Halliburton official who’s currently in jail, who was implicated in a massive bribery scandal that helped Halliburton win a multimillion dollar stake in Nigeria. Typically, though, the companies want one or two degrees of separation—you’re not going to have your senior vice president meeting with a government official who you need to pay off. You want an intermediary, a fixer who can handle that, who, if anything goes wrong, you can disown all knowledge of and the fixer gets dumped and blamed.
Ken Silverstein Courtesy Verso Books
CD: Is any of this legal, what the fixers are doing? It seems like it’s in a strange grey area.
KS: It’s illegal if you get caught. But you’d rarely be so stupid now as to wire money into an official’s account, you don’t do it that way. Here’s a real example from what Exxon did in Equatorial Guinea, one of the world’s worst dictatorships sitting on untold amounts of oil. In some places where there is no corruption, there’s closed-door bidding and whoever makes the best offer wins. In a place like Equatorial Guinea that’s not the way it works. It’s whoever figures out how to give the president and his inner circle the most money, gets the contract. And sometimes it may be flat-out bribes, but Exxon doesn’t want to do that. What did Exxon do? They wanted land to build their compound, and to develop their project. And where did they buy the land? “Well, the president owns some land and it would be perfect for us.” And so they just overpaid by an enormous amount of money, and it’s clearly just putting money in the president’s pocket.
CD: Here, in Texas or North Dakota or wherever, you have a private landowner who owns the mineral rights and can sell them to whoever they want. But in the countries you’re talking about oil is owned to start with by the government. Does that lend the process to the kind of corruption you’re talking about?
KS: It’s a very highly politicized process to get access to that oil, so yes it absolutely does lend itself to corruption. And it also lends itself to reinforcing the power of these regimes that frequently are dictatorships. I want to cite Ed Chow, a former Chevron executive. He said: “In Texas I can convince landowners to lease me their mineral rights. They get a royalty check every month and the companies leave a small footprint on their land. What’s not to love? There’s no equivalent in places like Nigeria or Angola or Kazakhstan. You get the land, but you don’t provide a lot of jobs, you may be destroying the environment, and most of the profit goes to international capital. The companies don’t have a strong case to sell to local communities, so they come to not only accept highly centralized government, but to crave it. A strongman president can make all the necessary decisions. It’s a lot easier to win support from the top than to build it from the bottom.”
That’s precisely the environment where fixers thrive.
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