- Cheney's Task Force Met With Targets Of Grand Jury Probes
-Cheney Connected To Investigations - Served on Kazakh State Oil Board
When Reported Bribes Took Place
-
- The Elephant In The Living Room - Part
1
-
- (FTW) - Attorney General John Ashcroft's prompt and
public
recusal from the Enron investigation because of a conflict of interest
arising from Enron's donations to his 2000 Senate race has not been matched
by a similar recusal in the case of federal grand juries in New York and
Washington investigating two additional Ashcroft donors, ExxonMobil and
BP Amoco. This, even though ExxonMobil gave more money to Ashcroft's
campaign
than Enron did.
-
- A source familiar with the grand jury investigations,
who spoke on condition of anonymity, told FTW that both grand juries are
still active and that Ashcroft has quietly moved -- in the wake of last
December's departure of Southern New York's U.S. Attorney, Mary Jo White
-- to exert control over the New York grand jury from Washington and to
exercise 'unusual influence' over the Washington investigations. FTW has
also received multiple reports that several high-ranking career prosecutors
in both New York and Washington have raised serious objections to
Ashcroft's
actions and his failure to publicly recuse himself in these cases.
-
- Channing Phillips, speaking for the U.S. Attorney's
office
in Washington, D.C. told FTW, "I checked with [Assistant U.S.
Attorney]
Wendy Wysong and she confirmed that the investigation is still ongoing.
There are three aspects to these investigations: one in New York, one In
Washington [at the U.S. Attorney's office] and one at main Justice [DoJ
headquarters]. If the Attorney General had recused himself, we would know
about it, and we are not aware of any such development.
-
- Marvin Smilon, a spokesman for the U.S. Attorney's office
in New York told FTW, "The department has a firm policy where we
can't comment on grand jury investigations."
-
- While federal rules of criminal procedure specifically
prohibit the disclosure of the investigative activities of grand juries,
they do not prohibit government officials from discussing matters of public
interest concerning the progress or existence of grand juries, especially
in cases where potential conflicts of interest arise. As a number of
attorneys
contacted for this story indicated that there are times when a justice
department official would have a need, or even a duty, to inform the public
of issues which indicate that the government is protecting the public
interest.
-
- Similar moves by Ashcroft, which deviate from established
procedures, have occurred since Sept. 11, 2001. An Oct. 11, 2001 New York
Times story by Benjamin Weiser and William Rashbaum was headlined,
'Justice
Dept. Takeover of Terror Prosecutions Frustrates U.S. Attorney'. Its lead
sentence stated, "The decision to shift authority over potential
criminal prosecutions stemming from the Sept. 11 terror attacks from New
York to Washington has upset and frustrated law enforcement officials who
have investigated Osama bin Laden for nearly a decade. White's authority,
in spite of eight years of successful terror prosecutions, was thus
transferred
to Washington, in spite of the fact that her office had coordinated a Joint
Terrorist Task Force, that had won convictions of more than two dozen
terrorists
in five major trials. Her office had also secured the cooperation of
two former bin Laden aides and already had 15 of the 22 most wanted terror
suspects, as identified by the White House on Oct. 10, under
indictment.
-
- Ashcroft's decision in this case had an impact on the
grand jury process. According to the Times, Officials in Washington have
not said where grand juries investigating the attacks will sit, or where
the indictments may eventually be brought. White, a Clinton appointee,
resigned as U.S. Attorney in New York in December and has not responded
to a request for an interview for this story.
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- THE ALLEGATIONS
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- The two grand juries have been investigating allegations
that ExxonMobil, the world's largest corporation, and BP Amoco paid cash
bribes to the president of Kazakhstan, Nursultan Nazarbayev, and his oil
minister, Nurlan Balgymbayev, and that Mobil engaged in an illegal oil
swap of Kazakh oil through Iran in 1997. Vice President Dick Cheney's
energy
task force -- now the center of a constitutional battle over the release
of its records -- was meeting representatives of both companies after the
grand juries had been empanelled as a result of information received from
a Middle Eastern source in 1997 and inquiries from Swiss banks in 1999.
The fact that these known targets of criminal investigations had access
to the vice president's energy task force would be comparable to having
allowed Manuel Noriega, while under indictment for drug smuggling, to
consult
in the war on drugs.
-
- At issue is a 25 percent stake purchased by Mobil in
Kazakhstan's Tengiz oil field, following an earlier purchase of 50 percent
by Chevron and an apparently desperate attempt a year later to start making
money from the fields by engaging in an illegal swap with Iran as a means
of getting the Tengiz oil to market. Until Sept. 11, there was only one
obstacle preventing the oil companies and their related industries from
building the necessary pipelines, immune from Russian influence, which
would have turned the Central Asian oil into dollars -- the Taliban.
-
- American companies with unrequited heavy investments
in the region's oil fields included ExxonMobil, ChevronTexaco, BP Amoco,
Phillips, Total/Fina/ELF, Unocal, Halliburton and Enron. Enron's investment
alone, as reported by the Albion Monitor, exceeded $3 billion in a power
generating station in Dabhol, India that was floundering in red ink because
Enron could not access inexpensive natural gas via a proposed trans-Afghani
pipeline from Tajikistan. Enron also had contracts to conduct feasibility
studies for the construction of pipelines throughout the region.
-
- ExxonMobil's role in the bribery and illegal oil swap,
as well as the ensuing federal investigations, was comprehensively
documented
in a July 2001 New Yorker article entitled The Price of Oil by the
venerable
Seymour Hersh. Allegations being investigated by the New York grand jury
involve felony violations (bribery) of the Foreign Corrupt Practices Act.
The Washington, D.C. grand jury is investigating evidence that links Mobil
to an illegal 1997 swap of Kazakh oil through Iran, which would constitute
a felony violation of the 1996 Iran Trade Sanctions Act.
-
- Possible penalties in the event of criminal convictions
include disgorgement of any assets obtained as a result of the criminal
actions. That would mean that two of the largest oil companies in the U.S.
could lose billions of dollars in cash already paid into the region over
a decade and forfeit their rights to profits from selling oil produced
there. This possible outcome was surely not lost on Dick Cheney's energy
task force which concluded its work last May.
-
- An intransigent President Bush announced on March 13
that he would not release records revealing who the task force met with
or what was discussed, in spite of a Feb. 27 court order signed by District
Court Judge Gladys Kessler directing the Department of Energy to release
the records.
-
- However, it is clear that Kazakhstan-related issues were
discussed behind Cheney's closed doors. In an analysis of the final report
of the vice president's energy task force, released in May 2001, The
Washington
Times, on July 20, 2001 wrote, While saying private investors must lead
the way, the Cheney report devotes considerable time to the Kazakh market,
urging U.S. government agencies to deepen their commercial dialogue with
Kazakhstan.
-
- What is unknown at this moment is whether Ashcroft
attended
any meetings with the task force, or whether he discussed the status of
the grand jury investigations while doing so.
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- ASHCROFT'S BIGGEST CONFLICT
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- ExxonMobil was the single largest oil and gas contributor
to Ashcroft's 2000 Senate race, donating $11,650 -- $4,140 more than Enron
-- as disclosed by documents obtained from the Center for Responsive
Politics.
Other oil industry donors to Ashcroft's campaign which are heavily invested
in Kazakhstan, or which represent firms that are, include Chevron ($7,500),
Enron ($7,499), The Independent Petroleum Association of America ($5,000),
BP Amoco ($4,000) and Halliburton ($3,500).
-
- Thus, the total reported corporate donations to
Ashcroft's
campaign, from firms with known vested interests in opening Kazakh oil
fields, totals $39,149. Taken together, these contributions (which exclude
soft money donations reported only to the Republican Senatorial Committee)
would rank these contributions second-only to Enterprise Rent-a-Car as
Ashcroft's biggest 2000 contributor.
-
- Within days of being publicly questioned by California
Rep. Henry Waxman, (D), Ashcroft held a public press conference announcing
that he would recuse himself from any part of the Enron investigations
being conducted by the Justice Department. It now becomes both a fair and
a glaringly obvious question as to why he has not done so with respect
to the grand juries.
-
- Some six months after the 9-11 attacks, and with a wealth
of stories documenting oil interests in the region, the grand juries could
expose the motives behind U.S. government July 2001 warnings to the
Taliban,
well documented in a number of European papers, we will either bury you
in a carpet of gold or we will bury you in a carpet of bombs starting in
Oct. [2001].
-
- After repeated requests for comment about whether
Ashcroft
had recused himself from these investigations, Dana Perino, a spokeswoman
for the Department of Justice and Ashcroft told FTW, We cannot comment
or discuss anything about whether there even is a grand jury, so we are
not going to answer any questions or make any comment. When advised by
this writer that federal rules of criminal procedure did not prevent the
attorney general from disclosing the status of the grand jury or his
potential
conflict of interest, Perino stated, This is what my management told me
to say. I ll take your comment back to them one more time and call you
back if they say anything else.
-
- As of press time no additional calls had been
received.
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- THE TIGER IN THE TASK FORCE
-
- A March 1, New York Times story by Don Van Natta
reported,
ExxonMobil, the second-largest energy donor in the Republican Party,
confirmed
today that its executives met with Mr. Cheney. It was among the handful
of companies that had declined to comment earlier this week about whether
its executives had met with Mr. Cheney or members of the task force,
although
it did say that its interests were represented by the American Petroleum
Institute, a trade council.
-
- In an interview today, company officials confirmed that
ExxonMobil chief executive, Lee Raymond, met with Mr. Cheney for 30 minutes
on Feb. 8, 2001. ExxonMobil officials also met with task force staff
members
for 45 minutes on Feb. 14 and made a presentation about future energy
supply
and demand, the company disclosed. The company said that on the same day,
executives made a similar presentation to the General Accounting Office
and to staff members of both political parties on the House and Senate
Energy Committees.
-
- A Dec. 17, 2000 story by David Johnston of the New York
Times stating that none of the companies connected to the alleged bribery
(including ExxonMobil, BP Amoco and Phillips Petroleum) appeared to be
focuses of the New York grand jury has been flatly contradicted by Hersh,
who reported extensive negotiations and payments by Mobil in 1995-96 after
direct negotiations between Mobil and Kazakh President Nazarbayev. In fact,
Hersh investigated the suspicious activities of now retired Mobil Vice
President Bryan Williams and intelligence-connected American businessman
James Giffen, both of whom have been directly tied to the bribery and the
Iranian oil swap. Giffen has been reported in a number of stories to be
Nazarbayev's gatekeeper for anyone wishing to do business in Kazakhstan.
Hersh documented direct payments to Giffen's company, the Mercator
Corporation,
from Mobil.
-
- Additionally, Hersh wrote, Mobil participants in the
Tengiz negotiations worried constantly about the possibility of payments
going astray. [Mobil exec] Don Voelte told me that the company was
concerned
that the purchase payments it was sending the Kazakh government via Swiss
banks might be diverted for personal use by the Kazakh leaders.
-
- The Hersh piece makes it clear that Mobil's involvement
in the bribery and the Iranian oil swap was much deeper and more involved
than this disingenuous statement suggests.
-
- Kazakhstan & [has] become notorious for exploitation,
corruption and seemingly bottomless fields of oil whose bounty seldom
benefits
the average citizen.
-
- The country has not prospered under [President Nursultan]
Nazarbayev [ s] rule. Social conditions have deteriorated steadily; per
capita GNP is just $1,300 dollars a year, Hersh wrote. A fifth of the
country's total money supply is now stashed in Swiss banks.
-
- A Mobil employee who took part in [Mobil's negotiations
with Kazakhstan] in Nassau said that the Kazakhs made a series of
extraordinary
demands, seeking among other things, a new Gulfstream jet aircraft for
Nazarbayev, funds for tennis courts at his home, and four trucks with
Satellite
dishes to be used by his daughter's televisions network.
-
- In a July 5, 2001 article posted by the International
Eurasian Institute for Economic and Political Research, the Kazakhstan
21st Century Foundation reported, Nazarbayev is so worried about the
investigations,
which he considers politically motivated, that he got his puppet parliament
to pass a law granting him lifetime immunity from any legal liability
stemming
from his actions in office, and another law that appears to legalize money
laundering.
-
- What is clear, according to Hersh and other sources,
is that as much as half of the $1 billion paid by Mobil never made it into
the Kazakh treasury.
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- BP-AMOCO EXPOSED
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- The oil giant formed by the Dec. 1998 merger of British
Petroleum and Amoco was made even larger by the April 1999 merger of
BP-Amoco
with the American oil giant, Arco. It too is at least a target of the
investigations
into Kazakh dirty dealings. Johnston's New York Times story discussed the
Department of Justice's criminal investigations:
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- According to a formal request filed under a treaty
between
the United States and Switzerland, the Justice Department says that on
March 19, 1997, Amoco Kazakhstan Petroleum, one of the companies involved
in the big offshore project in the Caspian Sea, transferred $61 million
from Banker's Trust in New York in two payments to account 1215320 at
Credit
Agricole Indosuez, a bank in Geneva. (The Amoco unit is now part of
BP).
-
- Three days later, the document says, Mr. Giffen and
Kazakh
officials began a series of what the United States government says were
illegal transfers from the Kazakh treasury accounts into private accounts
benefiting several Kazakh leaders.
-
- Johnston's account went on to describe how money was
transferred out of these accounts into accounts that benefited Giffen
and were allegedly used to disburse money into private accounts held or
controlled by either Nazarbayev or Balgymbayev, his oil minister. By the
time Hersh wrote his story, almost seven months later, the known total
amount of payments from ExxonMobil and other companies exceeded $1 billion,
and documentation was beginning to show that much of it had being diverted
into the private pockets of Kazakh public officials.
-
- In a March 1 story, New York Times writers Don Van Natta,
Jr. and Neela Banerjee reported on 18 corporations that were heavy
Republican
donors which got in to Cheney's task force. The companies include the
Enron Corporation, the Southern Company, the Exelon Corporation, BP, the
TXU Corporation, FirstEnergy, and Andarko Petroleum.
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- OIL: A NATIONAL SECURITY INTEREST
-
- The impending economic crash for the U.S. oil industry,
and all of its downstream economic vassals, reached a crisis between 1996
and 2001 as the intransigence of the Taliban threatened to create an
implosion
within an industry that owned oil but could not get it to market. The
crisis
was so severe that the National Security Council (NSC) got involved. Oil
had become a national security matter of the highest priority.
-
- Both the Washington Post and the New York Daily News
(as reported by the Albion Monitor on Feb. 28) obtained a series of emails
showing that the NSC led a Dabhol Working Group composed of officials
from various cabinet departments during the summer of 2001 &The Working
Group prepared talking points for both Cheney and Bush &
-
- Hersh, in The Price of Oil, also documented a series
of 1996 NSC meetings and discussions about Mobil's pending illegal oil
swap. Although his reporting indicates that Giffen and Mobil VP Bryan
Williams,
who met with NSC staff, were warned that such a swap was illegal, and that
the NSC sent warnings to other Mobil executives, the swap went ahead
anyway.
This, after Hersh quoted a government official as saying that Giffen had
said that Mobil was smart and that it would do it through a European
trader.
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- ________
-
- We must come to recognition, personally and culturally,
that corruption is not just a violation of the law, not just an economic
disadvantage, and not merely a political problem, but that it is morally
wrong. & It is now widely recognized that the consequences of
corruption
can be devastating: devastating to economies, devastating to the poor,
devastating to the legitimacy and stability of government and devastating
to the moral fabric of society. -- John Ashcroft, The Hague, May
2001
-
- Thanks to the Kazakhstan 21st Century Foundation for
publishing the above quote.
-
- -- Joe Taglieri, FTW Staff, contributed to this
story.
-
- COMING IN PART II During
the years when these alleged crimes took place, Vice President Dick Cheney,
then the CEO of oil services giant Halliburton, was a sitting member of
the Kazakh government's oil advisory board. What did Cheney know? When
did he know it?
-
-
- Sidebar -- Federal Grand Jury Rules,
Procedure
- by Joe Taglieri, FTW staff
-
- March 26, 2002, 10:00 AM PST (FTW) -- The oft-maligned
federal grand jury system dates back to feudal England and was incorporated
by the founding fathers into the Fourth and Fifth amendments to the U.S.
Constitution. Today, the grand jury is the first step in all federal
criminal
proceedings.
-
- The grand jury's main function is to review the evidence
presented by the prosecutor and determine whether there is probable cause
to return an indictment, according to the American Bar Association.
Indictments
are made on the basis of probable cause, which basically means the grand
jury is there to determine that the charges against a target are
valid.
-
- Ostensibly, the grand jury serves as a check on the
prosecutor's
power to file charges, but some in the legal profession claim that today,
grand juries have become captive to the unrestrained power of prosecutors,
says the National Association of Criminal Defense Lawyers (NACDL).
-
- There's a saying that goes, you can get a grand jury
to indict a ham sandwich, Washington, D.C.-based attorney John Clarke
told FTW in a phone interview. That saying is a reflection of the
prosecutor's
power, should he or she decide to exercise it. And there are various ways
to abuse that power. Federal prosecutors don t always tell the jurors what
their options are and dismiss them.
-
- The Department of Justice would not return calls for
comment on criticism of the grand jury system.
-
- Grand juries, which conduct their proceedings in secret,
are comprised of 14 to 23 people, who reside in the court district where
the case in question was filed. Jurors names and addresses primarily come
from national voter rolls, motor vehicle license lists, and public
utilities
lists. There is no juror selection process. Federal grand jurors are
not screened for biases relating to the case in question.
-
- Rule 6(e) of the Federal Rules of Criminal Procedure
provides that the prosecutor, grand jurors, and the grand jury stenographer
are prohibited from disclosing what happened before the grand jury, unless
ordered to do so in a judicial proceeding, states the American Bar
Association.
Secrecy was originally designed to protect the grand jurors from improper
pressures. The modern justifications are to prevent the escape of people
whose indictment may be contemplated, to ensure that the grand jury is
free to deliberate without outside pressure, to prevent subornation of
perjury or witness tampering prior to a subsequent trial, to encourage
people with information about a crime to speak freely, and to protect the
innocent accused from disclosure of the fact that he or she was under
investigation.
-
- Witnesses are the only participants in a grand jury
proceeding
who are allowed to disclose whatever they wish to whoever they wish, says
the Bar Association. When a witness testifies before the grand jury,
however,
he or she is not permitted to have his or her lawyer present inside the
jury room.
-
- Juries usually sit for a month. But in special
situations,
such as those involving in-depth law enforcement investigations, long
term grand juries can sit anywhere from six months to three years. In
more complicated cases an expired grand jury can be immediately renewed
for another term.
-
- Other grand jury participants usually referred to as
targets, may, at the end of a jury's investigation, be labeled an
unindicted
co-conspirator. This happens if the grand jury does not have enough
information
to indict someone but either knows of their identities and suspects they
were involved in the conspiracy, or, does not know them specifically, but
knows others had to be involved in the conspiracy, said University of
Dayton
law professor Susan Brenner. For example, in a large scale drug operation
the grand jury may not know the specific identities of all the peripheral
participants, but knows they were involved.
-
- A grand jury may also choose not to indict someone if,
after returning one or more indictments, it is still investigating criminal
activity involving the charged indictment, Brenner said. If someone finds
out they are the subject or target of a grand jury investigation through
an indictment, they may flee the country, or try to influence witnesses,
or otherwise obstruct justice, said Brenner.
-
- A grand jury also might not want to indict someone at
the time of inquest but may want make clear an individual's involvement
in its investigation. As with speculation, perhaps, that President Nixon
was not indicted in Watergate because the grand jury and prosecutors might
have thought it not a good idea, for various reasons, to indict a sitting
President, said Brenner.
-
- Sometimes, indictments are kept sealed. A federal judge
makes this decision, typically to prevent flight by one of the named
parties
or to protect an ongoing investigation.
-
- The only people allowed inside the grand jury room during
proceedings are jurors, prosecutors, one witness at a time, and a court
stenographer. Judges play no role other than to rule on motions to quash
grand jury subpoenas and decide on whether to seal an indictment.
-
- Grand juries are supervised primarily by the U.S.
attorneys
assigned to prosecute a case in a given federal court district. The
attorney
general can by law intercede, and even appoint him or herself prosecutor,
according to Brenner, but this is a rare occurrence.
-
- It would be unusual because that is not what the attorney
general does, she said. The attorney general is an administrative
officer.
He or she runs the Department of Justice, setting policy, seeing that
things
get done, dealing with contingencies like 9-11.
-
- It would seem odd for the AG, who has so much else to
deal with on a meta-scale, to handle a specific investigation, which is,
in a sense, on the micro-scale, Brenner continued. As an analogy, it
would be odd, would it not, for the president of Ford Motor Co. to go
handle
the assembly of an SUV on the line? The president of Ford certainly is
qualified and legally enabled to do that, but why?
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