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2012-05-04

"Private Empire": Author Steve Coll on the State-Like Powers, Influence of Oil Giant ExxonMobil

Guests

Steve Coll, president of the New America Foundation and a staff writer at The New Yorker. His most recent book is called Private Empire: ExxonMobil and American Power. Previously, he was managing editor of the Washington Post and has also been a reporter, foreign correspondent and editor at the paper. He was awarded his second Pulitzer Prize for the book Ghost Wars: The Secret History of the C.I.A., Afghanistan, and Bin Laden, from the Soviet Invasion to September 10, 2001. He is also author of The Bin Ladens: An Arabian Family in the American Century.

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We look at one of the largest and most powerful corporations in the world: ExxonMobil. Last week, the corporate giant reported it earned $9.5 billion in profits in the first three months of this year — or almost $104 million per day. We speak with Pulitzer Prize-winning reporter Steve Coll, who pulls back the curtain on ExxonMobil in his exhaustive new book, "Private Empire: ExxonMobil and American Power." "ExxonMobil, I came to think as I worked on this over four years, really sees itself as an independent sovereign in the world, and one that is almost the equivalent of a state," Coll says. "They really are one of the most closed corporations headquartered in the United States." [includes rush transcript]

Transcript

This is a rush transcript. Copy may not be in its final form.

JUAN GONZÁLEZ: We turn now to look at one of the largest and most powerful corporations in the country: ExxonMobil. In the hour it takes for this show to broadcast, ExxonMobil will earn almost $5 million in profit. Last week, the corporate giant reported that it had earned nine-and-a-half billion dollars in profits in the first three months of this year, or almost $104 million per day.

Earlier this week, ExxonMobil signed a contract with the Iraqi Drilling Company in Basra to drill 20 oil wells in one of world’s largest undeveloped fields with recoverable oil reserves. Iraq is expected to be the world’s biggest source of new oil supplies over the next few years after signing contracts for big development projects with major oil companies.

This is ExxonMobil vice president, Jon Penn.

JON PENN: The contract that we’re executing with IDC is for 20 drill wells in West Qurna-1, for a value of $124 million. It is an important step that we take with IDC today and is a historic moment for our continuing partnership with SOC as well as our partners.

AMY GOODMAN: We’re joined right now by the Pulitzer Prize-winning reporter Steve Coll, who pulls back the curtain on Exxon in his exhaustive new book, Private Empire: ExxonMobil and American Power. Steve Coll is president of the New America Foundation and a staff writer at The New Yorker. Previously, he was managing editor at the Washington Post, has also been a reporter, foreign correspondent and editor at the Washington Post. He was awarded his second Pulitzer Prize for his book Ghost Wars: The Secret History of the C.I.A., Afghanistan, and Bin Laden, from the Soviet Invasion to September 10, 2001. He is also author of The Bin Ladens: An Arabian Family in the American Century.

Steve Coll, welcome to Democracy Now! Let us start with the title of your new book, Private Empire: ExxonMobil and American Power. Explain.

STEVE COLL: Well, ExxonMobil, I came to think as I worked on this over four years, really sees itself as an independent sovereign in the world, and one that is almost the equivalent of a state. And it makes sense, when you look at their revenue of just under $500 billion a year. That’s actually more than the size of the economies of most of the countries in the world. It’s about the same as the economy of Norway.

And then the private part is that they really are one of the most closed corporations headquartered in the United States. They work on a closed system, and they don’t invite scrutiny. And in fact, as I worked on this project, which was hard, I really was struck by how—for myself as a journalist, over a long period of time, you know, I had spent so much time focusing on governments, trying to understand how they exercise power, and I came to realize that right in our midst are these very large and important institutions that are hardly ever scrutinized in the way—in the ways that journalists try to do.

JUAN GONZÁLEZ: And Steve Coll, you especially spend a lot of time in terms of the policies of ExxonMobil through two chiefs now, corporate chiefs, in regard to climate change. Could you talk about that and how the policy has evolved for the company?

STEVE COLL: Yeah, so, of course, in 1997, the Kyoto Accords were signed and contemplated a global regime to put a price on carbon-based fuels in order to create economic incentives to move away from coal and oil toward more sustainable fuels that would reduce the risks of global warming. Now, the Kyoto Accords were unpopular in the United States for lots of reasons, partly because they didn’t ask developing countries to do the same things that they asked industrialized countries to do and so forth. But ExxonMobil took a really radical approach to the challenge of Kyoto, in my judgment. They funded, sometimes surreptitiously, free market groups and communications firms to challenge the science of global warming itself—not the economic bargain or the political bargain of Kyoto, but the science, to raise doubt about whether global warming was occurring at all, and if it was, whether it was a serious risk. They really polluted the public atmosphere in Washington through this funding campaign. And they were really unusual, even among the many corporations that didn’t like Kyoto, in taking this anti-science approach.

Now, other groups fought back. Greenpeace and environmental investigators, scientists and congressional investigators eventually, over the eight years between 1997 and 2005, they exposed a lot of ExxonMobil’s activity and really embarrassed them by comparing them to the tobacco industry, which had undertaken similar efforts to undermine the science demonstrating the dangers of smoking. So, by 2005, the chief executive who had overseen this, and who was openly skeptical that the world was warming at all, a guy named Lee Raymond, he retired. And his successor, I think, came in thinking, "We’ve got a problem we need to address. We’re a very large corporation. We’ve got lots of employees and shareholders. We really can’t be in such an outlier position." So they slowly started to change. Initially they said, "We were never wrong. We were only misunderstood." And they tried to fashion a communications campaign around that. But more recently, in 2009, they actually announced their support for a tax on carbon, which at least is the first time that our largest oil company has acknowledged that the risks of global warming are so significant that it requires imposing a tax on carbon-based fuels to incent change.

AMY GOODMAN: In later March, the Senate failed to pass a measure that would end billions of dollars in tax breaks for large oil companies. The measure failed on a 51-47 vote, short of the 60 needed to overcome a Republican-led filibuster. President Obama called on lawmakers to choose between oil companies and the American people.

PRESIDENT BARACK OBAMA: Today, members of Congress have a simple choice to make: they can stand with the big oil companies, or they can stand with the American people. It’s not as if these companies can’t stand on their own. Last year, the three biggest U.S. oil companies took home more than $80 billion in profits. Exxon pocketed nearly $4.7 million every hour. And when the price of oil goes up, prices at the pump go up, and so do these companies’ profits.

AMY GOODMAN: That’s President Obama. Steve Coll, talk about the relationship of ExxonMobil with the Democrats and with the Republicans and the level to which they’re involved in U.S. politics and elections today.

STEVE COLL: Well, they’re very involved with U.S. politics. They run a Washington office that between roughly 1998 and 2011 spent $169 million on lobbying. That was the third most among American-headquartered corporations over that period. And in some years, they were extremely active on Capitol Hill and at the White House lobbying for their positions. They also run a political action committee that makes contributions to candidates for office.

What was interesting about digging into the records of the political action committee is that ExxonMobil, really alone among large American corporations that has a political action committee strategy, is—gives almost all of its money to Republicans. Ninety percent of their contributions in the 2010 cycle went to Republican candidates. And in 2012, this cycle, they’ve been even more extreme in that way. It was interesting. You know, a lot of companies that you might think of as parts of the Republican Party or aligned with the Republican Party—Wal-Mart or Dow Chemical—they split their money pretty evenly between the two parties. So ExxonMobil, you know, they say that this is a result of scientific analysis of where their interests lie in Washington, but it’s unusual, I think, for—in a democracy, for such a large and important institution to throw its weight on one side of the partisan divide.

I think the example you gave about those oil subsidies is a pretty good case study of how ExxonMobil works in Washington. They are unpopular. You know, they don’t have so many friends that they can enact any bill they want. But what they’re great at is blocking things. And so, that 51-47 vote you described is typical of the results they can achieve.

JUAN GONZÁLEZ: And Steve Coll, to get back to this issue of climate change, obviously ExxonMobil is a company that bases a lot of its work on scientific exploration of its geologists. You point out that some of their geologists see climate change as an opportunity for the company. Could you talk about that?

STEVE COLL: Well, it’s opening up oil that was previously sealed off by ice, basically, is one way to look at it. Right just this last couple of years, ExxonMobil has been going back to Russia and, last year, signed a very large-scale agreement with one of Russia’s largest oil companies, Rosneft, to explore and develop oil in the Arctic, above the Arctic Circle. Now, the reason that oil is accessible at all—it’s going to be hard, because even with global warming, it’s still cold up there—but that oil was inaccessible 15, 20 years ago, and the reason this deal is possible is because sea ice has been retreating very rapidly over the last 10 years and especially in the summer months. So, I mean, that’s the most transparent, explicit example of this. But what the book also describes, as you point out, is that geologists inside their exploration department were basically asked at a certain stage to look at all the ways in which a warmer planet might free up opportunities in oil and gas discovery and drilling.

AMY GOODMAN: Steve Coll, let’s go to some of the examples. In 2001, 11 Indonesian villagers filed a lawsuit in the U.S. against ExxonMobil for alleged human rights abuses. The villagers say they and their relatives were tortured, were killed, were sexually assaulted by a 3,000-strong Indonesian military unit hired by Exxon to protect a gas pipeline and liquefaction plant in northern Aceh. One of the survivors shared his story with Al Jazeera. This is just a clip.

INDONESIAN VILLAGER: [translated] I was riding along the road and was stopped by soldiers on motorbikes. It was August 1999. They were Exxon security forces, many of them. There was lots of shooting, and I fell off my bike. They thought I was one of the rebel fighters, but I wasn’t. They blindfolded me and tied my hands behind my back and threw me into a military truck and took me to Ramcung.

AMY GOODMAN: That, an excerpt of one of the survivors. I’ll never forget, Steve, seeing the Businessweek big spread, when it was just mobile, with a man holding a skull in Aceh, and the headline was "What Mobil Knew," about Mobil selling excavation equipment to the—or giving to the Indonesian government, and they would excavate mass graves to put the bodies in. Talk about Aceh. And we just have a minute.

STEVE COLL: Yeah, so I went out to look into this case for all the reasons you find it compelling, traveled to Aceh, interviewed victims. The new information that I was able to bring forward involves Freedom of Information Act requests that unearthed State Department cables showing the interactions between ExxonMobil and the U.S. government, the Bush administration, as this threat through a lawsuit became more serious. And then, secondly, this lawsuit that you reference is still going on, and enormous amounts of materials have been discovered by the attorneys and slowly are coming onto the record, so I was able to bring forward emails and documents from inside ExxonMobil showing how this war, in effect, was carried out.

AMY GOODMAN: Steve Coll is president of the New America Foundation, staff writer at The New Yorker. His new book is called Private Empire: ExxonMobil and American Power. We will continue part two after the broadcast. We’re going to be playing this on Monday, so do tune in. Steve Coll has won the Pulitzer Prize twice.

I’ll be speaking at the Chicago Green Festival on Sunday at 3:00 p.m. at the Navy Pier, 600 East Grand Avenue.

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