Posted on 11/10/2003 6:38:45 PM PST by anymouse
Houston Mayoral Candidate Bill White's record in Azerbaijan is subject to many different interpretations. At worst, White's oil deal with the former Soviet Republic has propped up an inhumane regime that has harbored terrorists, including Al-Qaeda; resulted in drilling on a natural preserve in violation of Azerbaijan's environmental laws; and included as stakeholders Saudi Arabian oil magnates suspected of financing terrorism. At best, the deal has helped improve U.S.Azerbaijan relations, opened up a new source of oil that could decrease U.S. reliance on Middle East crude, and benefited Azerbaijan's economy. Indeed, it seems likely that there have been both positive and negative aspects of White's activities in Azerbaijan.
However, several things are undoubtedly true. First, White stands to make a fortune on Azerbaijan's oil, largely thanks to his role as Deputy Energy Secretary in the Clinton Administration, in which he created the very opportunities for developing this oil that he immediately pursued upon resigning his government position in 1995. Second, White has done the bidding of Azerbaijan President and former KGB General Heydar Aliyev, an autocrat who according to Human Rights Watch has systematically oppressed both his own people and the Armenians. Finally, White's involvement in Azerbaijan is consistent with the policies of both the Clinton administration and the current Bush administration, and there is no evidence he violated any U.S. laws.
Before turning to White's record in Azerbaijan, it should be noted that as CEO of The Wedge Group, a private investment company with major oil and gas holdings, White has come under criticism for the antiIsrael agenda of Wedge Group Founder and Chairman Issam Fares. Fares, a wealthy businessman and Deputy Prime Minister of Lebanon, has declared that Hezbollah is not a terrorist group and he has been complicit in the deleterious Syrian occupation of Lebanon.
Yet, during the campaign, White has publicly disassociated himself from Fares' views on the Middle East and, because the Wedge Group is a private company, the media and the public cannot determine whether White, in his capacity as CEO, has engaged in business deals with Syria, Iran, or other terrorsponsoring regimes.
However, what can be scrutinized are White's publicly reported dealings in Azerbaijan in his capacity as Founder, President, CEO, and now Chairman of Frontera Resources. Curiously, this is the one company White fails to mention in the biography on his website, even though his founding of Frontera preceded his involvement with Wedge.
The first thing that becomes apparent upon examining White's role in founding Frontera is how it closely dovetailed his work as Deputy Energy Secretary under President Clinton from 1993 to 1995. Prior to that, White was a lawyer at Susman Godfrey, which is known much more for representing shareholders in large class actions than oil and gas law. How was White, without significant experience in the oil and gas industry before 1995, able to start Frontera immediately after leaving Washington?
Did White Construct a Golden Petroleum Parachute While in Government?
As deputy energy secretary, White was a key player in establishing energy policy in the Caspian Sea region, which includes Georgia and Azerbaijan. This region has $4 trillion worth of untapped oil and is experiencing what the Washington Post called the "last great oil rush of the 20th century."
As Energy Secretary, White went to Georgia and Azerbaijan, both former Soviet Republics, to head off a Russian plan that would give Moscow control of the pipelines and paved the way for foreign investment that would bring oil to the market from Georgia and Azerbaijan through these pipelines.
Upon resigning from the Clinton administration in 1995, White parlayed the contacts and experience he had developed to found Frontera, whose primary mission was oil exploration in Georgia and Azerbaijan. In 1997, Frontera became the first American company to close an agreement to work oil fields in Azerbaijan. White's board at Frontera boasts former CIA Director John Deutch and exTreasury Secretary Lloyd Bentsen.
According to Doug Norlen, a Washington lobbyist for the Pacific Environment and Resource Center, "This is a classic example of the revolving door between high levels in U.S. government agencies that influence oil development worldwide and the oil companies that their policies benefit."
In August 2001, Frontera Resources joined the State Oil Company of the Azerbaijan Republic (SOCAR) in signing a production sharing agreement covering the 116,000 acre onshore Kursangi Karabagli Block. The block contains two giant oil fields that currently produce approximately 4,200 barrels per day. The 2001 agreement finalized a June 1998 agreement in principle between Aliyev and Frontera.
"We are indebted to Azerbaijan's President Heydar Aliyev and SOCAR for entrusting Frontera with stewardship of this premiere onshore block," said Frontera President and CEO Steve C. Nicandros at the time. White declared, "This project will bring new activity and increased prosperity to an important onshore region of Azerbaijan."
Saudis Suspected of Terrorist Financing Part of White's Frontera Azerbaijan Deal
Delta/Hess, which was formed by Amerada Hess and Delta Oil Central, joined SOCAR and Frontera in the deal, gaining a 20% interest in the block, which was reportedly sold to Chinese interests earlier this year. The DeltaNimir oil partnership was run at the time by Khalid bin Mahfouz and Mohammed Hussein AlAmoudi, both Saudi oil magnates.
According to a December 10, 2001 article in the Boston Herald, there is "evidence that members of the two Saudi familiesheaded by patriarchs Khalid bin Mahfouz and Mohammed Hussein Al Amoudi have had ties to Islamic charities and companies linked financially to bin Laden's alQaeda organization."
The article notes that a 1999 audit conducted by the Saudi government reportedly discovered that the bin Mahfouz family's National Commercial Bank had transferred at least $3 million to charitable organizations believed to be fronts for bin Laden's terror network. After the audit, bin Mahfouz was placed under house arrest in Taif, Saudi Arabia, and AlAmoudi reportedly replaced him as head of National Commercial Bank. Mahfouz has been cited in a suit filed on behalf of families of victims of the September 11 terrorist attacks. According to a 1998 Senate testimony of former CIA director James Woolsey, bin Mahfouz' younger sister is married to Osama bin Laden.
Al Amoudi was the president of the Al Haramain Foundation in Sudan, which was shut down for its suspected involvement in the U.S. embassy bombings in East Africa. He is dubbed one of the seven "main individual sponsors of terrorism" by the U.S. State Department.
Heydar Aliyev's Human Rights Abuses
Let's begin by establishing that Azerbaijan's President Heydar Aliyev, although a former KGB apparatchik who has been labeled a "neoStalinist" by columnist Christopher Hitchens, cannot compete with Saddam Hussein or Kim Jong Il when it comes to filling mass graves and aspiring to weapons of mass destruction. Thus, in a world of imperfect nations and leaders, it may well be in the U.S. interest to align with Aliyev despite his human rights abuses and alleged past support for terrorism. Indeed, after September 11, the Bush administration has forged closer ties with Azerbaijan than ever before and Aliyev has publicly embraced the U.S. war on terrorism.
Yet, according to the International Herald Tribune, Heydar Aliyev stole the election in October of 2003 on behalf of his son Ilham, who is the new President. Since the October 15 election, Azerbaijani authorities have unleashed a massive and brutal political crackdown, arresting hundreds of opposition leaders and activists according to Human Rights Watch. Human Rights Watch has posted online its overviews of human rights abuses by the Aliyev regime between 1993 and 2002.
The abuses detailed there are too numerous to catalog in this space. In addition to jailing political dissidents at home, the Aliyev regime has imposed a blockade on Armenia and on the Armenian enclave of NagornoKarabagh. The dispute over this territory between Azerbaijan and its neighboring former Soviet republic of Armenia is deeply rooted in a historical ethnic feud between the two peoples.
In 1992, the U.S. Congress passed the Freedom Support Act, which in Section 907 barred the U.S. from giving governmenttogovernment aid to Azerbaijan. While White was deputy secretary of Energy, the Clinton administration opposed this provision, and White has opposed it since leaving office. The provision was suspended in 2002 and 2003 by executive order of President Bush, allowing millions of dollars of U.S. humanitarian and development aid to flow to Azerbaijan. Although White initiated Frontera's dealings in Azerbaijan while the provision was in effect, it did not restrict U.S. private sector investment in Azerbaijan.
Heydar Aliyev's Alleged Terrorist Ties
Armenian advocates allege that Heydar Aliyev's regime has harbored and even supported bin Laden and AlQaeda. According to this report, "Azerbaijani authorities cooperated with Osama bin Laden by providing his terroristsoperating in Chechnyalogistical support, intelligence, and shelter. In turn, bin Laden promised the Baku [the capital of Azerbaijan] authorities to aid Azerbaijan if it launches another ethniccleansing campaign against the Armenian population of Nagorno Karabakh."
The report states that Azeri Islamist groups offered to provide volunteers to fight in the Gulf War on the side of Saddam Hussein. A member of AI Qaeda, Jamal Ahmed elFadl, arrested by the FBI for his role in the 1998 embassy bombings, claimed his organization became active in Azerbaijan as early as 1989.
In the summer of 1993, President Aliyev hired over 1,000 Islamist mercenaries in the war against Nagorno Karabakh Armenians. They were flown on civilian aircraft from Afghanistan to Azerbaijan. The mercenaries, including Arab veterans of the Afghan war (197989), took an active role in the Karabakh conflict, according to the September 13, 2000 Moscow News. One of Bin Laden's associates claimed that Bin Laden himself led mujahedin in at least two battles in Nagorno Karabakh. (Associated Press 11/14/99).
In 1997, radical Islamist groups with branches in Azerbaijan reportedly pledged their support for President Aliyev against Armenians, in exchange for a safe haven in Azerbaijan (Strategic Policy October 1999; Ekho, September 1 2001).
In August 1998, the Azerbaijani branch of the Islamic Jihad organization, which by then had merged with Osama Bin Laden's AI Qaeda, reportedly coordinated the bombings of the U.S. Embassies in Kenya and Tanzania that killed 224 people and wounded nearly 4,600. The FBI was able to trace about 60 phone calls made from the satellite phone used by Bin Laden to his associates in Baku and from them to operatives in East Africa. On September 21, 2001, Canada put Azerbaijan on its list of terrorist training centers.
While many of the reports of Aliyev's links with terrorism come from Armenians who obviously have an interest in criticizing Azerbaijan, the substantial details and reliable sources referenced suggest the claims are likely accurate. However, after September 11, the Aliyev regime publicly supported the U.S. war on terror and allowed the US to use its airspace during Operation Iraqi Freedom.
Nevertheless, between 1995 and 1997 when White was consummating Frontera's deal with Aliyev, these events had not yet occurred. Even now, the terrorism situation in Azerbaijan is somewhat murky, as it remains unclear whether Aliyev and his son are fully cooperating in the war on terror or mostly paying lip service. After all, AlQaeda, according to all intelligence reports, continues to maintain significant operations in Azerbaijan, where the regime's jailing of dissidents and severe restrictions on political speech suggest it is more than capable of eliminating its enemies.
Frontera's Environmental Record in Azerbaijan
While Bill White was deputy secretary of Energy, the Clinton administration opposed drilling in the Alaskan National Wildlife Refuge (ANWR). However, White's Frontera Azerbaijan Kursangi Karabagli oil deal covers 30% of the protected Shirvani Nature Reserve. According to Samir Isayev of Ecolex, an environmental nongovernmental organization (NGO) in Baku, the practice of oil extraction, which has existed since the 1950s on this piece of the zapovednik [nature reserve], has been in violation of Azerbaijani law from the moment the Shirvan zapovednik was created in 1968 by the Azerbaijani Government.
Environmentalists argue fullscale oil development threatens the Goitred Gazelles (also known as Jayran Deer) that live in the Reserve. They also criticize Frontera for failing to release the full Environmental Impact Assessment of its drilling in local languages.
Breaking a Few Eggshells to Make an Omelet?
Ultimately, it is hard to fault White and Frontera for pursuing oil exploration in Azerbaijan. While the Aliyev regime is unsavory, it is far from the worst in the Muslim world, where for better or worse, most of the world's oil is concentrated. If we only deal with angels, we won't have access to much of that oil.
It remains to be seen whether the current U.S. policy of cultivating closer ties with Azerbaijan and largely giving the regime a free pass will pay dividends, especially in terms of human rights and real democracy for the Azerbaijani and Armenian people of Nagorno Karabagh. If the policy fails, as much blame can be placed on the current President as on Clinton and White.
The most significant question raised by White's Azerbaijan dealings is whether he paved the way for his own personal profit while in office, resigning when the circumstances became ripe for him to cash in. Although this may not violate any law, it raises ethical concerns. For example, did White use information not available to the public, which he obtained while in office, to his advantage?
Frontera's connection via the Delta Oil stake in the Azerbaijan deal with Saudi businessmen Mahfouz and Al Amoudi, who are alleged to have terrorist ties, and the environmental repercussions of Frontera's activities in Azerbaijan, may also be causes for concern. If White had no knowledge of Mahfouz and Al Amoudi's sponsorship of terrorism when he gave Delta Oil a stake in the Kursangi Karabagli drilling operation, he should make that pledge to Houston voters and also promise that he will follow Azerbaijan's enviornmental laws.
It is clear that White's Azerbaijan dealings have accrued to his interest. Hopefully, they will also accrue to the interests of the American, Azerbaijani, and Armenian people.
--------------------------- Marc Levin, an Austin attorney, is Associate Editor of The Austin Review. He can be reached at mrmarclv@aol.com.
Levin's articles have appeared in The Wall Street Journal, USA Today, Jerusalem Post, Atlanta Journal-Constitution, The Washington Times, Dallas Morning News, and Houston Chronicle.
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