Cheney Led Halliburton To
Feast at Federal Trough State Department Questioned Deal
With Firm Linked to Russian Mob
Cheney Led Halliburton
To Feast at Federal Trough
State Department Questioned Deal
With Firm Linked to Russian Mob
By Knut Royce and Nathaniel Heller
(Washington, August 2) Under the guidance of Richard Cheney, a get-the-government-out-of-my-face conservative, Halliburton Company over the past five years has emerged as a corporate welfare hog, benefiting from at least $3.8 billion in federal contracts and taxpayer-insured loans
One of these loans was approved in April by the U.S. Export-Import Bank. It guaranteed $489 million in credits to a Russian oil company whose roots are imbedded in a legacy of KGB and Communist Party corruption, as well as drug trafficking and organized crime funds, according to Russian and U.S. sources and documents.
Those claims are hotly disputed by the Russian oil firms holding company.
Halliburton, which lobbied for the Ex-Im loan after the State Department initially asserted that the deal would run counter to the "national interest, will receive $292 million of those funds to refurbish a massive Siberian oil field owned by the Russian company, the Tyumen Oil Co., which is controlled by a conglomerate called the Alfa Group.
The April Ex-Im taxpayer-insured loan, which has the effect of reducing the borrowers interest rate and extending its repayment term, is but the latest of a series of government bank guarantees from which Halliburton has benefited under Cheney, who joined the company as chairman and chief executive officer in 1995.
Since then Halliburton and its subsidiaries have undertaken foreign projects in which Ex-Im and its sister U.S. bank, the Overseas Private Investment Corp., have guaranteed or made direct loans totaling $1.5 billion, mostly over the last two years. That compares with a total of about $100 million the government banks insured and loaned in the five years before Cheney joined the company.
Under Cheney, Halliburtonlargely through its Brown & Root subsidiaryhas garnered $2.3 billion in U.S. government contracts. This is almost double the $1.2 billion it earned from the government in the five years before he arrived. Most of the contracts have been with the U.S. Army for engineering work in a variety of hot spots, including Bosnia, Albania, Kosovo and Haiti.
Halliburton spokeswoman Wendy Hall issued this statement:
"The Ex-Im Bank loan to Tyumen Oil Co. was carefully investigated by the Ex-Im Bank and approved by its governing body.
Halliburtons participation in the loan complies with all applicable United States law and Ex-Im Bank regulation.
The loan proceeds will be used to export millions of dollars of goods and services from the U.S. to Russia for much needed oil field improvements.
"These exports will create many jobs in the U.S.
"Any innuendo that Halliburton or Dick Cheney has acted improperly in connection
with the Ex-Im Bank loan is false and misleading."
Though there is no evidence that Cheney has espoused business dealings with criminal organizations, Cheney has said publicly that the government should lift restrictions on U.S. corporations in countries that the U.S. government says have sponsored terrorism, such as Libya and Iran.
Wall Street analysts praise Cheneys stewardship of the company and attribute his ability to attract government contracts and grants to his high-level access to the corridors of power that stems from his days as defense secretary under President George Bush. If he becomes vice president, according to a Halliburton official who admires Cheney but asked to remain anonymous, "the companys government contracts would obviously go through the roof.
If Halliburton has benefited from government generosity, it also has reciprocated with substantial political contributions, largely to Republicans. During Cheneys five years at the helm, the company has donated $1,212,000 in soft and hard money to candidates and parties, according to numbers compiled by the non-partisan Center for Responsive Politics. In the five years prior to his arrival, the company had given $534,750.
Though the White House has been Democratic during those years, Congress, which appropriates funds for OPIC and the Ex-Im bank, has been controlled by Republicans.
The goodwill generated by those political contributions and extensive lobbying by Halliburton and its allies on the Tyumen project helped save the day after the White House and State Department in December directed the Ex-Im Bank to delay approval of the $489 million credit guarantee. The administration wanted the breathing space after complaints by Western investors and companies that they had been defrauded by Tyumen in an unrelated dispute.
One of the aggrieved firms was BP-Amoco, the largest oil and gas producer in the United States. It and the others claimed that through fraud and other unsavory practices in a Russian bankruptcy proceeding, Tyumen had effectively "stolen a vast oil field in which they held substantial equity.
BP-Amoco commissioned a private investigative report on Tyumen, which was slipped to
the CIA through an intermediary.
That report, a CIA official confirmed, contained 2 1/2 pages labeled "criminal situation. The CIA promptly classified the report "secret and passed it along to the Ex-Im Bank. Further, the CIA briefed Ex-Im about its own material on Tyumen in December and told the bank that the BP-Amoco investigative report "tracked with its own information.
The CIA declined to discuss with The Public i what was contained in the brief section labeled "criminal situation."
Marsha E. Berry, vice president of communications for the Ex-Im Bank, said that the bank was "not aware of Tyumen's connections to the mob. We take all due diligence in researching our partners and making sure that they are legitimate."
An Ex-Im attorney who worked on the Tyumen account said that the bank checked with both the CIA and the U.S. Embassy in Moscow and concluded that there was "no evidence to support the allegations raised in the BP-Amoco report, which he said included links to Russian organized crime. He would not further discuss the allegations. He said that the CIA had rated Tyumen in the upper quartile of Russian oil companies in above-board business practices.
Some allegations of organized crime and drug activities involving Tyumens parent company, the Alfa Group, had been made public in Russia last year.
The allegations were contained in a report delivered in 1997 by anonymous officials from the FSB (the Russian equivalent of the FBI) to the national security committee of the Duma, or lower house of parliament.
A Russian-American specialist on business practices in the former Soviet Union who has worked with the White House and Pentagon told The Public i that the allegations contained in the 1997 report have been the subject of an investigation by the FSB but that the probe, for unexplained reasons, had been "put away for a better day."
Some of the key elements in the FSB report, a translation of which was obtained by The Public i, are virtually identical to those provided to a former senior American intelligence officer two years earlier by a former KGB major who had been part of the Soviet spy agencys ideological counterintelligence branch.
The former U.S. intelligence officer, who asked not to be further identified, wrote a contemporaneous report of what the former KGB major, at the time working for two banks formed by the KGB, told him in 1995.The intelligence specialist provided a copy of his report to The Public i.
Money laundering, drug trafficking
That document and the FSB report claim that Alfa Bank, one of Russias largest and most profitable, as well as Alfa Eko, a trading company, had been deeply involved in the early 1990s in laundering of Russian and Colombian drug money and in trafficking drugs from the Far East to Europe.
The former KGB major, who with the fall of communism in the late 1980s had himself been involved in the plan by the KGB and Communist Party to loot state enterprises, said that Alfa Bank was founded with party and KGB funds, and quickly attracted rogue agents who had served in anti-organized-crime units. "They (the rogue agents on the banks payroll) quickly determined that dealing in drugs would bring the highest profits with literally no risk in Russia," according to the former KGB officer.
He claimed that a "large channel of heroin transit was established from Burma through Laos, Vietnam, to the Far East [Siberia]." From there the drugs were camouflaged as flour and sugar shipments and forwarded on to Germany. The drug operation was controlled by a Chechen mob family, he said.
The FSB report, too, claimed that the Alfa Groups top executives, oligarchs
Mikhail Fridman and Pyotr Aven, "allegedly participated in the transit of drugs from
Southeast Asia through Russia and into Europe."
Reached by telephone, Alexander Tolchinskiy, an officer of Alfa Bank in Moscow, described as "nonsense the reports that Alfa or its bosses had been involved in the trafficking of drugs or the laundering of drug profits. Another Alfa official said that the reports were planted by representatives of a competing company, whom he would not identify, which wanted to take over the commodities trade.
'Way off the mark'
A lawyer at the blue-chip Washington law firm of Akin, Gump, which represents Tyumen, said that the claims that the companys top officers had been involved in narcotics trafficking and money laundering were "way off the mark. The lawyer declined to be further identified.
Rory Davenport of Fleischman Hillard, which handles Tyumens public relations in Washington, said that his firm had performed a background check on Tyumen and "there was no concern about Tyumen's alleged mob connection.
Both the FSB and KGB reports cite an event in 1995 in which residents of a Siberian town became "intoxicated," according to the Americans report, and "poisoned," according to the FSB report, after they had eaten heroin-laced sugar that had been shipped in a rail car container leased to Alfa Eko, which specializes in the shipment of foodstuffs.
The account from the former KGB officer was that a railroad worker had stolen a sack of sugar from the container and sold it to the persons who became ill. The FSB document said that the incident occurred in Khabarovsk, a large city in Siberia. The former KGB officer only described the location as Siberia.
The FSB report said that within days of the incident, Ministry of Internal Affairs (MVD) agents conducted raids of Alfa Eko buildings and found "drugs and other compromising documentation."
Both reports claim that Alfa Bank has laundered drug funds from Russian and Colombian drug cartels.
The FSB document claims that at the end of 1993, a top Alfa official met with Gilberto Rodriguez Orejuela, the now-imprisoned financial mastermind of Colombias notorious Cali cartel, "to conclude an agreement about the transfer of money into Alfa Bank from offshore zones such as the Bahamas, Gibraltar and others. The plan was to insert it back into the Russian economy through the purchase of stock in Russian companies."
The account from the former KGB officer is unclear about Alfas alleged role with Rodriguez, but apparently confirms that "in 1993-94 there were attempts of the so-called Chess Player [Rodriguezs nickname] to launder and legalize large amounts of criminal money in Russia. He reported that there was evidence "regarding [Alfa Banks] involvement with the money laundering of . . . Latin American drug cartels."
Pattern not unusual
The former KGB officer claimed that the Alfa empire had its roots in a cooperative formed by KGB officers in 1987 to import computers. It would profit by avoiding import duties and launder funds by creating phony invoices to themselves reflecting 500 percent markups in their cost.
The FSB document said that in the 1980s, Alfas Fridman "secretly cooperated with operatives of the KGB," was active in the Komsomol (Communist Youth League) and established the cooperatives Gelios and Orsk to purchase computers from abroad.
The former U.S. intelligence officer who interviewed the ex-KGB major said that such a pattern was not unusual. He said that the KGB and Komsomol often teamed up with bright young entrepreneurs like Fridman in the late 1980s and early 1990s and provided seed money to launch private ventures, often involving the importing of computers or the formation of banks. He said that Russian oligarch Mikhail Khodorkovsky, whose reputedly heavily mobbed-up Menatep bank folded in 1998, also got his seed money from the Komsomol and also initially dealt in computers. He said that 47 percent of the KGB agents in the Soviet Union had been groomed by Komsomol.
The FSB report also claims that top officials of the Alfa Group "cooperated" with a number of Russian crime organizations, notably the notorious Solntsevo mob family in Moscow. The Russian-American specialist on business practices in Russia, who has a wide array of contacts inside Russias law enforcement and intelligence communities, agreed that Alfa Bank, as well as others, are used by the Solntsevo crime family.
As with most of Russias post-Soviet privatization efforts, Alfa Groups takeover of Tyumen Oil was complicated and fraught with allegations of impropriety. In July of 1997, Novy Holdings, a joint venture involving Alfa and a New York-based Russian-American firm, Access Industries, purchased a 40 percent stake in Tyumen Oil from the Russian government for roughly $810 million. The sale, however, was not without controversy. Russian President Boris Yeltsin himself instructed his privatization czar, Deputy Prime Minister Alfred Kokh, to "personally control the investment tender of the TNK company [Tyumen Oil] because he was concerned that Tyumens worth might have been grossly undervalued due to Alfas improper influence on the audit of the oil giant.
A second cash auction for the remainder of the oil company was scheduled for later that year, with most analysts predicting that Alfa would seek to increase its stake to a majority position. But the auction was suspended in November of 1997, drawing criticism that the government was deliberately delaying the sale of Tyumen in order to give Alfa additional time to raise the necessary funds it needed to take control of the company. The most outspoken critic of Alfas attempt to wrest control of Tyumen was Viktor Paly, general director of Nizhnevartovskneftegaz, Tyumen Oils production subsidiary. Paly held a 9% stake in Tyumen Oil through an off-shore company Cadet Establishment.
By February of 1998, however, following meetings at Alfas offices in Moscow, Paly agreed to divest his stake in Tyumen Oil to Alfa. One month later, Alfa bought an additional 1.17 percent of Tyumen Oil as part of the long-delayed second auction, raising its total stake in the oil company to a 51 percent controlling position.
Was Cheney's chief of staff
Tyumen could have significant access to the White House should the Bush-Cheney ticket win in the November presidential elections. Tyumens lead attorney at Akin Gump is James C. Langdon Jr., a managing partner at the firm. He is also one of George W. Bushs "Pioneers, one of the elite fund raisers who have brought in at least $100,000 for the Republican presidential hopeful.
Last June in Washington, Langdon helped coordinate a $2.2 million fund raiser for Bush, and agreed to help recruit 100 lawyers and lobbyists in the capital to raise $25,000 each. Langdons secretary told The Public i that he was away on travel this week and could not be immediately reached.
Tyumen could also look to one of Cheneys deputies for access should the Republicans triumph in November. One of Halliburtons top lobbyists, Dave Gribbin, was Cheneys chief of staff at the Defense Department during the Bush administration, and his lobbying activities have borne fruit for Halliburton over the last several years.
As with Halliburtons campaign donations, the companys lobbying expenditures increased under Cheneys watch. In 1996, the company spent $280,000 on lobbying. In 1997, the company increased those expenditures to $360,000, to $540,000 in 1998, and to $600,000 in 1999.That upward trend parallels the increasing success Halliburton has had in winning government contracts, loans, and guarantees under Cheneys direction.
Not surprisingly, several key issues relating to Halliburtons success in securing government largesse appear frequently on the companys lobbying reports. Among them are "OPIC Reauthorization, Defense Appropriations Bills, and "Foreign Operations Appropriations Bills Funding EXIM, OPIC, and TDA [the Trade and Development Agency, a government agency similar to Ex-Im and one that also funds Halliburton projects around the world]. Gribbin also lists "EXIM, "OPIC, and "TDA as federal agencies that were contacted as part of the companys lobbying activities. Gribbin did not return repeated calls from The Public i.
In no small irony, the official Bush Web site, recently revamped to accommodate the addition of Cheney to the ticket, notes in the "Foreign Policy section that the duo supports "redirecting American assistance, investment and loans to the Russian people, not to the bank accounts of corrupt officials.
Export-Import Bank and Overseas Private Investment Corp. projects involving Halliburton: 1990- 2000
|1990||$311,482||guarantee||Entreprise Nationale de Geophysique SP||Algeria|
|1990||$311,482||loan||Entreprise Nationale de Geophysique SP||Algeria|
|1991||$2,975,030||guarantee||Entreprise Nationale de Geophysique SP||Algeria|
|1991||$2,975,030||loan||Entreprise Nationale de Geophysique SP||Algeria|
|1992||$1,055,730||guarantee||Entreprise Nationale de Geophysique SP||Algeria|
|1992||$1,055,730||loan||Entreprise Nationale de Geophysique SP||Algeria|
|1996||$88,535,400||guarantee||Special Purpose Entity||Angola|
|1998||$161,139,799||guarantee||Pemex Project Funding Master Trust, The||Mexico|
|1998||$375,379,380||guarantee||Pemex Project Funding Master Trust, The||Mexico|
|1999||$64,151,962||loan||Soc National de Combustiveis de Angola||Angola|
|2000||$400,000,001||guarantee||Pemex Project Funding Master Trust, The||Mexico|
|1997||$100,000,000||insurance||offshore gas development||Bangladesh|
* Carried over to year 2000 as part of guarantee to Tyumen.
Halliburton's fiscal year 1999 U.S. government contracts by agency (include subsidiaries of Halliburton)
|Agency||Total Amount||No. of
|Department of Defense - Navy||$28,180,000||326|
|Department of Defense - Army (Except Corps of Engineers)||$624,926,000||461|
|Department of Defense - Air Force (Headquarters)||$6,310,000||20|
|Department of Defense - Army Corps of Engineers||$267,000||2|
|Department of Defense - Army Corps of Engineers||-$4,654,000||2|
|Department of Defense - Defense Information Systems Agency||$332,000||1|
|Department of Health and Human Services - National Institutes of Health||$40,477,000||280|
|Department of Interior - Geological Survey||$27,000||1|
|Department of Interior - Minerals Management Service||$50,000||1|
|Department of Interior - National Park Service||$99,000||3|
|Department of State||$31,200,000||7|
|Environmental Protection Agency||$172,000||1|
|National Aeronautics and Space Administration||$52,901,000||136|
FTW October 24, 2000 - The success of Bush Vice Presidential running mate Richard Cheney at leading Halliburton, Inc. to a five year $3.8 billion "pig-out" on federal contracts and taxpayer-insured loans is only a partial indicator of what may happen if the Bush ticket wins in two weeks. A closer look at available research, including an August 2, 2000 report by the Center for Public Integrity (CPI) at www.public-i.org, suggests that drug money has played a role in the successes achieved by Halliburton under Cheney's tenure as CEO from 1995 to 2000. This is especially true for Halliburton's most famous subsidiary, heavy construction and oil giant, Brown and Root. A deeper look into history reveals that Brown and Root's past as well as the past of Dick Cheney himself, connect to the international drug trade on more than one occasion and in more than one way.
This June the lead Washington, D.C. attorney for a major Russian oil company connected in law enforcement reports to heroin smuggling and also a beneficiary of US backed loans to pay for Brown and Root contracts in Russia, held a $2.2 million fund raiser to fill the already bulging coffers of presidential candidate George W. Bush. This is not the first time that Brown and Root has been connected to drugs and the fact is that this "poster child" of American industry may also be a key player in Wall Street's efforts to maintain domination of the half trillion dollar a year global drug trade and its profits. And Dick Cheney, who has also come closer to drugs than most suspect, and who is also Halliburton's largest individual shareholder ($45.5 million), has a vested interest in seeing to it that Brown and Root's successes continue.
Of all American companies dealing directly with the U.S. military and providing cover for CIA operations few firms can match the global presence of this giant construction powerhouse which employs 20,000 people in more than 100 countries. Through its sister companies or joint ventures, Brown and Root can build offshore oil rigs, drill wells, construct and operate everything from harbors to pipelines to highways to nuclear reactors. It can train and arm security forces and it can now also feed, supply and house armies. One key beacon of Brown and Root's overwhelming appeal to agencies like the CIA is that, from its own corporate web page, it proudly announces that it has received the contract to dismantle aging Russian nuclear tipped ICBMs in their silos.
Furthermore, the relationships between key institutions, players and the Bushes themselves suggest that under a George "W" administration the Bush family and its allies may well be able, using Brown and Root as the operational interface, to control the drug trade all the way from Medellin to Moscow.
Originally formed as a heavy construction company to build dams, Brown and Root grew its operations via shrewd political contributions to Senate candidate Lyndon Johnson in 1948. Expanding into the building of oil platforms, military bases, ports, nuclear facilities, harbors and tunnels, Brown and Root virtually underwrote LBJ's political career. It prospered as a result, making billions on U.S. Government contracts during the Vietnam War. The "Austin Chronicle" in an August 28 Op-ed piece entitled "The Candidate From Brown and Root" labels Republican Cheney as the political dispenser of Brown and Root's largesse. According to political campaign records, during Cheney's five year tenure at Halliburton the company's political contributions more than doubled to $1.2 million. Not surprisingly, most of that money went to Republican candidates.
Independent news service "newsmakingnews.com," also describes how in 1998, with Cheney as Chairman, Halliburton spent $8.1 billion to purchase oil industry equipment and drilling supplier Dresser Industries. This made Halliburton a corporation that will have a presence in almost any future oil drilling operation anywhere in the world. And it also brought back into the family fold the company that had once sent a plane - also in 1948 - to fetch the new Yale Graduate George H.W. Bush, to begin his career in the Texas oil business. Bush the elder's father, Prescott, served as a Managing Director for the firm that once owned Dresser, Brown Bothers Harriman.
It is clear that everywhere there is oil there is Brown and Root. But increasingly, everywhere there is war or insurrection there is Brown and Root also. From Bosnia and Kosovo, to Chechnya, to Rwanda, to Burma, to Pakistan, to Laos, to Vietnam, to Indonesia, to Iran to Libya to Mexico to Colombia, Brown and Root's traditional operations have expanded from heavy construction to include the provision of logistical support for the U.S. military. Now, instead of U.S. Army quartermasters, the world is likely to see Brown and Root warehouses storing and managing everything from uniforms to rations to vehicles.
Dramatic expansion of Brown and Root's operations in Colombia also suggest Bush preparations for a war inspired feeding frenzy as a part of "Plan Colombia." This is consistent with moves by former Bush Treasury Secretary Nicholas Brady to open a joint Colombian-American investment partnership called Corfinsura for the financing of major construction projects with the Colombian Antioquia Syndicate, headquartered in Medellin. (See FTW June, 00). And expectations of a ground war in Colombia may explain why, in a 2000 SEC filing, Brown and Root reported that in addition to owning more than 800,000 square feet of warehouse space in Colombia, they also lease another 122,000 square feet. According to the filing of the Brown and Root Energy Services Group, the only other places where the company maintains warehouse space are in Mexico (525,000 sq. feet), and the U.S. (38,000) square feet.
According to the web site of Colombia's Foreign Investment Promotion Agency Brown and Root had no presence in the country until 1997. What does Brown and Root, which, according to the AP has made more than $2 billion supporting and supplying U.S. troops, know about Colombia that the U.S. public does not? Why the need for almost a million square feet of warehouse space that can be transferred from one Brown and Root operation (energy) to another (military support) with the stroke of a pen?
As described by the Associated Press, during "Iran-Contra" Congressman Dick Cheney of the House Intelligence Committee was a rabid supporter of Marine Lt. Col. Oliver North. This was in spite of the fact that North had lied to Cheney in a private 1986 White House briefing. Oliver North's own diaries and subsequent investigations by the CIA Inspector General have irrevocably tied him directly to cocaine smuggling during the 1980s and the opening of bank accounts for one firm moving four tons of cocaine a month. This, however, did not stop Cheney from actively supporting North's 1994 unsuccessful run for the U.S. Senate from Virginia just a year before he took over the reins at Brown and Root's parent company, Dallas based Halliburton Inc. in 1995.
As the Bush Secretary of Defense during Desert Shield/Desert Storm (1990-91), Cheney also directed special operations involving Kurdish rebels in northern Iran. The Kurds' primary source of income for more than fifty years has been heroin smuggling from Afghanistan and Pakistan through Iran, Iraq and Turkey. Having had some personal experience with Brown and Root I noted carefully when the Los Angeles Times observed that on March 22, 1991 that a group of gunmen burst into the Ankara, Turkey offices of the joint venture, Vinnell, Brown and Root and assassinated retired Air Force Chief Master Sergeant John Gandy.
In March of 1991, tens of thousands of Kurdish refugees, long-time assets of the CIA, were being massacred by Sadam Hussein in the wake of the Gulf War. Sadam, seeking to destroy any hopes of a successful Kurdish revolt, found it easy to kill thousands of the unwanted Kurds who had fled to the Turkish border seeking sanctuary. There, Turkish security forces, trained in part by the Vinnell, Brown and Root partnership, turned thousands of Kurds back into certain death. Today, the Vinnell Corporation (a TRW Company) is, along with the firms MPRI and DynCorp (FTW June, 00) one of the three pre-eminent private mercenary corporations in the world. It is also the dominant entity for the training of security forces throughout the Middle East. Not surprisingly the Turkish border regions in question were the primary transhipment points for heroin, grown in Afghanistan and Pakistan and destined for the markets of Europe.
A confidential source with intelligence experience in the region subsequently told me that the Kurds "got some payback against the folks that used to help them move their drugs." He openly acknowledged that Brown and Root and Vinnell both routinely provided NOC or non-official cover for CIA officers. But I already knew that.
>From 1994 to 1999, during US military intervention in the Balkans where, according to "The Christian Science Monitor" and "Jane's Intelligence Review," the Kosovo Liberation Army controls 70 per cent of the heroin entering Western Europe, Cheney's Brown and Root made billions of dollars supplying U.S. troops from vast facilities in the region. Brown and Root support operations continue in Bosnia, Kosovo and Macedonia to this day.
Dick Cheney's footprints have come closer to drugs than one might suspect. The August Center for Public Integrity report brought them even closer. It would be factually correct to say that there is a direct linkage of Brown and Root facilities - often in remote and hazardous regions - between every drug producing region and every drug consuming region in the world. These coincidences, in and of themselves, do not prove complicity in the trade. Other facts, however, lead inescapably in that direction.
The CPI report entitled "Cheney Led Halliburton To Feast at Federal Trough" written by veteran journalists Knut Royce and Nathaniel Heller describes how, under five years of Cheney's leadership, Halliburton, largely through subsidiary Brown and Root, enjoyed $3.8 billion in federal contracts and taxpayer insured loans. The loans had been granted by the Export-Import Bank (EXIM) and the Overseas Private Investment Corporation (OPIC). According to Ralph McGehee's "CIA Base (c)" both institutions are heavily infiltrated by the CIA and routinely provide NOC to its officers.
One of those loans to Russian financial/banking conglomerate The Alfa Group of Companies contained $292 million to pay for Brown and Root's contract to refurbish a Siberian oil field owned by the Russian Tyumen Oil Company. The Alfa Group completed its 51% acquisition of Tyumen Oil in what was allegedly a rigged bidding process in 1998. An official Russian government report claimed that the Alfa Group's top executives, oligarchs Mikhail Fridman and Pyotr Aven "allegedly participated in the transit of drugs from Southeast Asia through Russia and into Europe."
These same executives, Fridman and Aven, who reportedly smuggled the heroin in connection with Russia's Solntsevo mob family were the same ones who applied for the EXIM loans that Halliburton's lobbying later safely secured. As a result Brown and Root's work in Alfa Tyumen oil fields could continue - and expand.
After describing how organized criminal interests in the Alfa Group had allegedly stolen the oil field by fraud, the CPI story, using official reports from the FSB (the Russian equivalent of the FBI), oil companies such as BP-Amoco, former CIA and KGB officers and press accounts then established a solid link to Alfa Tyumen and the transportation of heroin.
In 1995 sacks of heroin disguised as sugar were stolen from a rail container leased by Alfa Echo and sold in the Siberian town of Khabarovsk. A problem arose when many residents of the town became "intoxicated" or "poisoned." The CPI story also stated, "The FSB report said that within days of the incident, Ministry of Internal Affairs (MVD) agents conducted raids of Alfa Eko buildings and found 'drugs and other compromising documentation.'
"Both reports claim that Alfa Bank has laundered drug funds from Russian and Colombian drug cartels.
"The FSB document claims that at the end of 1993, a top Alfa official met with Gilberto Rodriguez Orejuela, the now imprisoned financial mastermind of Colombia's notorious Cali cartel, 'to conclude an agreement about the transfer of money into the Alfa Bank from offshore zones such as the Bahamas, Gibraltar and others. The plan was to insert it back into the Russian economy through the purchase of stock in Russian companies.
"... He [the former KGB agent] reported that there was evidence 'regarding [Alfa Bank's] involvement with the money laundering of... Latin American drug cartels."
It then becomes harder for Cheney and Halliburton to assert mere coincidence in all of this as CPI reported that Tyumen's lead Washington attorney James C, Langdon, Jr. at the firm of Aikin Gump "helped coordinate a $2.2 million fund raiser for Bush this June. He then agreed to help recruit 100 lawyers and lobbyists in the capital to raise $25,000 each for W's campaign."
The heroin mentioned in the CPI story, originated in Laos where longtime Bush allies and covert warriors Richard Armitage and retired CIA ADDO (Associate Deputy Director of Operations) Ted Shackley have been repeatedly linked to the drug trade. It then made its way across Southeast Asia to Vietnam, probably the port of Haiphong. Then the heroin sailed to Russia's Pacific port of Valdivostok from whence it subsequently bounced across Siberia by rail and thence by truck or rail to Europe, passing through the hands of Russian Mafia leaders in Chechnya and Azerbaijan. Chechnya and Azerbaijan are hotbeds of both armed conflict and oil exploration and Brown and Root has operations all along this route.
This long, expensive and tortured path was hastily established, as described by FTW in previous issues, after President George Bush's personal envoy Richard Armitage, holding the rank of Ambassador, had traveled to the former Soviet Union to assist it with its "economic development" in 1989. The obstacle then to a more direct, profitable and efficient route from Afghanistan and Pakistan through Turkey into Europe was a cohesive Yugoslavian/Serbian government controlling the Balkans and continuing instability in the Golden Crescent of Pakistan/Afghanistan. Also, there was no other way, using heroin from the Golden Triangle (Burma, Laos and Thailand), to deal with China and India but to go around them.
It is perhaps not by coincidence again that Cheney and Armitage share membership in the prestigious Aspen Institute, an exclusive bi-partisan research think tank, and also in the U.S. Azerbaijan Chamber of Commerce. Just last November, in what may be a portent of things to come, Armitage, played the role of Secretary of Defense in an practical exercise at the Council on Foreign Relations where he and Cheney are also both members. Speculation that the scandal plagued Armitage, who resigned under a cloud as Assistant Secretary of Defense in the Reagan Administration, is W's first choice for Secretary of Defense next year is widespread.
The Clinton Administration took care of all that wasted travel for heroin with the 1998 destruction of Serbia and Kosovo and the installation of the KLA as a regional power. That opened a direct line from Afghanistan to Western Europe and Brown and Root was right in the middle of that too. The Clinton skill at streamlining drug operations was described in detail in the May issue of FTW in a story entitled "The Democratic Party's Presidential Drug Money Pipeline." That article has since been reprinted in three countries. The essence of the drug economic lesson was that by growing opium in Colombia and by smuggling both cocaine and heroin from Colombia to New York City through the Dominican Republic and Puerto Rico (a virtual straight line), traditional smuggling routes could be shortened or even eliminated. This reduced both risk and cost, increased profits and eliminated competition.
FTW suspects the hand of Medellin co-founder Carlos Lehder in this process and it is interesting to note that Lehder, released from prison under Clinton in 1995, is now active in both the Bahamas and South America. Lehder was known during the eighties as "The genius of transportation." I can well imagine a Dick Cheney, having witnessed the complete restructuring of the global drug trade in the last eight years, going to George W and saying, "Look, I know how we can make it even better." One thing is for certain. As quoted in the CPI article, one Halliburton Vice President noted that if the Bush-Cheney ticket was elected, "the company's government contracts would obviously go through the roof."
In July of 1977 this writer, then a Los Angeles Police officer struggled to make sense of a world gone haywire. In a last ditch effort to salvage a relationship with my fiancée, Nordica Theodora D'Orsay (Teddy), a CIA contract agent, I had traveled to find her in New Orleans. On a hastily arranged vacation, secured with the blessing of my Commanding Officer, Captain Jesse Brewer of LAPD, I had gone on my own, unofficially, to avoid the scrutiny of LAPD's Organized Crime Intelligence Division (OCID).
Starting in the late spring of 1976 Teddy had wanted me to join her operations from within the ranks of LAPD. I had refused to get involved with drugs in any way and everything she mentioned seemed to involve either heroin or cocaine along with guns that she was always moving out of the country. The Director of the CIA then was George Herbert Walker Bush.
Although officially on staff at the LAPD Academy at the time, I had been unofficially loaned to OCID since January when Teddy, announcing the start of a new operation planned in the fall of 1976 had suddenly disappeared. She left many people, including me, baffled and twisting in the breeze. The OCID detectives had been pressuring me hard for information about her and what I knew of her activities. It was information I could not give them. Hoping against hope that I would find some way to understand her involvement with CIA, LAPD, the royal family of Iran, the Mafia and drugs I set out alone into eight days of Dantean revelations that have determined the course of my life from that day to this.
Arriving in New Orleans in early July, 1977 I found her living in an apartment across the river in Gretna. Equipped with scrambler phones, night vision devices and working from sealed communiqués delivered by naval and air force personnel from nearby Belle Chasse Naval Air Station, Teddy was involved in something truly ugly. She was arranging for large quantities of weapons to be loaded onto ships leaving for Iran. At the same time she was working with Mafia associates of New Orleans Mafia boss Carlos Marcello to coordinate the movement of service boats that were bringing large quantities of heroin into the city. The boats arrived at Marcello controlled docks, unmolested by even the New Orleans police she introduced me to, along with divers, military men, former Green Berets and CIA personnel.
The service boats were retrieving the heroin from oil rigs in the Gulf of Mexico, oil rigs in international waters, oil rigs built and serviced by Brown and Root. The guns that Teddy monitored, apparently Vietnam era surplus AK 47s and M16s, were being loaded onto ships also owned or leased by Brown and Root. And more than once during the eight days I spent in New Orleans I met and ate at restaurants with Brown and Root employees who were boarding those ships and leaving for Iran within days. Once, while leaving a bar and apparently having asked the wrong question, I was shot at in an attempt to scare me off.
Disgusted and heart broken at witnessing my fiancée and my government smuggling drugs, I ended the relationship. Returning home to LA I made a clean breast and reported all the activity I had seen, including the connections to Brown and Root, to LAPD intelligence officers. They promptly told me that I was crazy. Forced out of LAPD under threat of death at the end of 1978, I made complaints to LAPD's Internal Affairs Division and to the LA office of the FBI under the command of FBI SAC Ted Gunderson. I and my attorney wrote to the politicians, the Department of Justice, the CIA and contacted the L.A. Times. The FBI and the LAPD said that I was crazy.
According to a 1981 two-part news story in the "Los Angeles Herald Examiner" it was revealed that The FBI had taken Teddy into custody and then released her before classifying their investigation without further action. Former New Orleans Crime Commissioner Aaron Cohen told reporter Randall Sullivan that he found my description of events perfectly plausible after his thirty years of studying Louisiana's organized crime operations.
To this day a CIA report prepared as a result of my complaint remains classified and exempt from release pursuant to Executive Order of the President in the interests of national security and because it would reveal the identities of CIA agents.
On October 26, 1981, in the basement of the West Wing of the White House, I reported on what I had seen in New Orleans to my friend and UCLA classmate Craig Fuller. Craig Fuller went on to become Chief of Staff to Vice President Bush from 1981 to 1985.
In 1982, then UCLA political science professor Paul Jabber, filled in many of the pieces in my quest to understand what I had seen in New Orleans. He was qualified to do so because he had served as a CIA and State Department consultant to the Carter administration. Paul explained that, after a 1975 treaty between the Shah of Iran and Sadam Hussein the Shah had cut off all overt military support for Kurdish rebels fighting Sadam from the north of Iraq. In exchange the Shah had gained access to the Shat al-Arab waterway so that he could multiply his oil exports and income. Not wanting to lose a long-term valuable asset in the Kurds, the CIA had then used Brown and Root, which operated in both countries and maintained port facilities in the Persian Gulf and near Shat al-Arab to rearm the Kurds. The whole operation had been financed with heroin. Paul was matter-of-fact about it.
In 1983 Paul Jabber left UCLA to become a Vice President of Banker's Trust and Chairman of the Middle East Department of the Council on Foreign Relations.
If one is courageous enough to seek an "operating system" that theoretically explains what FTW has just described for you, one need look no further than a fabulous two-part article in "Le Monde Diplomatique" in April of this year. The brilliant stories, focusing heavily on drug capital are titled "Crime, The World's Biggest Free Enterprise." The brilliant and penetrating words of authors Christian de Brie and Jean de Maillard do a better job of explaining the actual world economic and political situation than anything that I have ever read.
De Brie writes, "By allowing capital to flow unchecked from one end of the world to the other, globalization and abandon of sovereignty have together fostered the explosive growth of an outlaw financial market...
"It is a coherent system closely linked to the expansion of modern capitalism and based on an association of three partners: governments, transnational corporations and mafias. Business is business: financial crime is first and foremost a market, thriving and structured, ruled by supply and demand.
"Big business complicity and political laisser faire is the only way that large-scale organized crime can launder and recycle the fabulous proceeds of its activities. And the transnationals need the support of governments and the neutrality of regulatory authorities in order to consolidate their positions, increase their profits, withstand and crush the competition, pull off the "deal of the century" and finance their illicit operations. Politicians are directly involved and their ability to intervene depends on the backing and the funding that keep them in power. This collusion of interests is an essential part of the world economy, the oil that keeps the wheels of capitalism turning."
After confronting CIA Director John Deutch on world television on November 15, 1996 I was interviewed by the staffs of both the Senate and House Intelligence Committees. I prepared written testimony for Senate Intelligence which I submitted although I was never called to testify. In every one of those interviews and in my written testimony and in every lecture since that time I have told the story of Brown and Root. I will tell it again at the USC School of International Relations on December the 8th, 2000 - regardless of who wins the election.
Michael C. Ruppert
- The Center for Public Integrity, "Cheney Led Halliburton to Feast at Federal
Trough", Knut Royce & Nathaniel Heller,
- "Le Monde - Diplomatique", April 2000.
- The U.S. Azerbaijan Chamber of Commerce
- The Aspen Institute, www.aspeninst.org
- "The Austin Chronicle", August 28, 2000
- The Associated Press, "Study: US Could Save Cost in Balkans" - 10/10/00
- The Associated Press, "Cheney, North Relationship Probed" - 8/11/00
- "The New York Times" Index
- The Council on Foreign Relations
- "The Unauthorized Biography of George Bush" - Webster Tarpley and Anton Chaitkin
- "CIA Base" (c) 1992, Ralph McGehee
- CIA Inspector General Report of Investigation: Allegations of Connections Between CIA and the Contras in Cocaine Trafficking to the United States. Volume II: The Contra Story - Report 96-0143-IG.
- www.newsmakingnews.com , 27 August 2000, "The Dick Cheney Data Dump"
- Securities and Exchange Commission - "Edgar" Data base.
- Halliburton/Brown and Root - www.Halliburton.com/brs
- The Vinnell Corporation - www.Vinnell.com
- "The New York Press," 8/1/00
- "The Los Angeles Times," March 23, 1991.
- "The Los Angeles Herald Examiner:, Oct. 11 & 18, 1981
- "The Christian Science Monitor" - Oct. 20, 1994
- "Jane's Intelligence Review" - February 1, 1995.
- Written testimony of Michael C. Ruppert for the Senate Select Committee on Intelligence dated 10/1/97 - http://www.copvcia.com/ssci.htm
- "From The Wilderness" (4/99, 4/00, 6/00)
(c) Copyright 2000, Michael C. Ruppert and "From The Wilderness" Publications, P.O. Box 6061-350, Sherman Oaks, CA 91413, 818-788-8791, www.copvcia.com. All Rights Reserved. - Permission to reprint for non-profit only is hereby granted as long as proper sourcing appears. For all other permissions contact firstname.lastname@example.org.
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