| Insider Trading and George Bush: Oily to Bed, Oily to Rise By Mitchel Cohen, Brooklyn Greens / Green Party USA The role of oil and insider dealing in the Bush White House is nothing new, but it is always startling. In late 1990, Mobil Oil took out an ad in The N.Y. Times claiming that the company was doing nothing more than passing along to consumers increased costs imposed on it, and was not profiting at all from the US military build-up in Saudi Arabia. "On average, the price of crude oil has risen 24 cents a gallon," Mobil stated, "[while] gasoline prices have also gone up an average of 24 cents a gallon." [Mobil Corp. Ad, NY Times, 1990.] The company said that the statistics "refute the ill-conceived notion that there has been any 'price gouging' on our part." Shell Oil claimed that it, too, had exercised "restraint in passing through these cost increases to consumers." At one point, prices at the wellhead doubled to a high of $41 per barrel (there are 42 gallons of oil in a barrel) even though there had been no reciprocal decrease in the world's oil production. In fact, by all accounts there had been an oil GLUT. Saudi Arabia even expanded its output by two million barrels a day to more than offset the amount of oil "lost" to the invasions, sanctions and boycott. By the capitalist law of supply and demand, prices to consumers should have crashed. But they didn't. Contrary to Mobil's claims that it was just "passing along" to consumers nothing more than what the company had to pay at the wellhead, in reality prices at the retail pump rose far faster than the increased costs to the company. But, just as today's press barely touches George Bush and the larger context in which his relationship to Harken Oil takes on profound significance beyond a little "insider trading," the oil companies' arrogant statements and outright lies twelve years ago simarly went unchallenged by the press. In fact, petroleum companies oiled their slick propaganda machines and spent millions of dollars on ads portraying themselves as the biblical David fighting against Saddam Hussein's Goliath. They asserted that they were champions of the consumer demand for cheap oil, and yelped that it was Saddam, not them, who was causing US consumers to get ripped off. To hear them, you'd think they were barely able to keep up with rising costs in their efforts to keep prices down; how could anyone possibly accuse "our" oil companies of exploiting our helplessness for their own profit? So it was with great interest that I looked up the business reports for the final quarter of 1990. In the course of the military build-up, Mobil's profits increased by an astounding 46 percent. Far from simply limiting themselves to passing along additional costs to consumers, the giant corporation made $651 million off of consumers in that single quarter. Shell's profits jumped 69 percent to $446 million. Exxon's profits were up 21 percent in the last three months of 1990, for a quarterly profit of $1.4 billion. (Its profits were actually up 220 percent, but Exxon used sleight of hand accounting, amortizing all sorts of debts. Here's another set of accounting procedures for the Enron-watchers to examine!) Texaco's profits were up 35 percent. Amoco's profits were up 46 percent. Chevron made $633 million. All together, the top five oil companies made $4.8 billion in profits in the last quarter of 1990 alone. Meanwhile, the average rate they paid in taxes was slightly less than 4 percent -- equal to the tax-rate for an individual earning under $5,475 a year. It is in this context that we have to look at George W. Bush's involvement with Harken Energy Corporation a context that the press has not covered. The US military build-up in Saudi Arabia began in August of 1990. George Bush Sr. was the President, and he gave his famous speech calling for a New World Order on September 11th of that year. He said: "We have before us the opportunity to forge for ourselves and for future generations a New World Order, a world where the rule of law, not the law of the jungle, governs the conduct of nations." The "rule of law," as it turns out, was a boon to his son George Bush Jr., who was a director, large stockholder and $120,000-a-year consultant to the Harken Energy Corp. until a month before the US troops arrived in the Persian Gulf. Harken "just happened" to hold a "rule of law" contract guaranteeing it "exclusive rights to develop, produce and market oil and gas off the shores of Bahrain." The contract had begun in January 1990. The company was actually $150 million in debt by the time hundreds of thousands of US troops began arriving in the region. One Houston-based energy analyst, Charles Strain, told Forbes Magazine that such an exclusive contract was "an incredible deal, unbelievable for this small company." None of this has appeared in the American press. One would think that the current President's economic investments, which were fostered by the US military build-up in Saudi Arabia and the subsequent bombardment of Iraq, would be a subject worth examining! As it was, the US bombardment killed 200,000 people outright and destroyed the countryside, drinking water, sanitation facilities for a generation. How was it that George W. Bush could profit so handsomely from "the rule of law" while other investors in the company were forced to eat the $150 million deficit? Who else was in the know? Next Page Back to Main Page |