Dark Heart
Of The American Dream
By Ed Vulliamy
The London Observer
21 November, 2003
It's
the most polluted state in the planet's most powerful country. Ed Vulliamy
goes into George Bush's backyard to reveal how big oil got in bed with
big politics and the price paid by the little people
There is a perverse
beauty to the landscape arraigned below the iron bridge where Highway
255 strides the Houston Ship Channel: great towers of light and fire
as far as the eye can behold; sinewy steel piping, plumes of smoke and
flame twinkling into a Texas twilight coloured by a shroud of pollution
hanging from the sky. The awesome prepotency of this smokescape is no
illusion, for this is an epicentre of power, oil capital of the Western
world and the most industrialised corner of the United States. It is
also the capital of a power machine perfected in Texas, elevated to
rule the nation and now unchallenged across the planet. A machine that
operates in perpetual motion - an equilibrium of interests - between
industry and politics. LaNell Anderson, former Republican voter, businesswoman
and real-estate broker who lived many years in this land of smokestacks
and smog, calls it 'vending-machine politics: you puts your money in
and you gets your product out'.
'We don't see ourselves
as a dynasty,' said George Bush Sr as his son launched the election
campaign that won him the current presidency, raiding father's Rolodex
to do so. 'We don't feel entitled to anything.' And yet at no point
in the past 50 years - the half-century since 1952 which defines the
modern age - has there not been a Bush in a governor's mansion (in Texas
or Florida), on Capitol Hill or in the White House - and usually more
than one of those at a time. The 'vending machine' is a single family
whose tango with the powers which illuminate this endless horizon of
light and flame is a dance around every corner in the labyrinth of Texan
and now national - indeed global - politics. 'Everything they learned
when they started out in west Texas,' says Dr Neil Carman, once a regulator
of pollution in the state, 'they applied to the governor's mansion,
the nation and the world... Power in America is not so much about George
W Bush, it's about the people from Texas who put him
there.'
This is the dynasty's
throne, the state whose highways are lined with the spirited advice
'Don't Mess With Texas' (originally the slogan of an anti-litter campaign).
As if litter would make much difference: Texas counts the worst pollution
record in the US, top in the belching of toxic chemicals and carcinogens
into the air, top in chemical spills, top in ozone pollution, top in
carbon-dioxide emissions, top for mercury emission, top in clean-water
violations, top in the production of hazardous waste. Houston overtook
Los Angeles for the coveted title of 'most polluted city' in the early
90s.
'You are looking
at the biggest oil refinery in the world,' indicates LaNell Anderson.
She refers to the edifice that is the 3,000-acre Exxon Mobil plant at
Baytown, near Houston, producer of 507,800 barrels a day. Here begins
a story of both dynasty and destiny, for it was on this spot in 1917
that the Bush family's oil connection was forged - where the Humble
Oil company, which struck black gold in the Houston suburb of that name,
took root, later to be- come the Exxon behemoth. Humble's founder, William
Stamps Farish, went on to become president of Standard Oil. His daughter
became a friend of George Bush Sr and his grandson William Jr was taken
in 'almost like family' (said Barbara Bush) while campaigning for George
Sr's entrée into Washington Senatorial politics in 1964. Farish
Jr claims to have been the first man to whom Bush Sr confided his ambition
to be president one day, and was last year named US Ambassador to London.
At first, Anderson
welcomed the benefits to a community of the 200 oil-related industries
relocated to the Houston area by the time she and her second husband
set up home in a suburb wedged between Exxon and the Lyondell chemical
plant. Neither she nor he had any history of disease in their families.
But in 1985, her husband's daughter gave birth to a girl, Alyssa, with
a rare liver disease - she died aged six months. In 1986, Anderson's
mother became ill and died of bone cancer a year later. The following
year, Anderson and her sister were diagnosed with rheumatoid arthritis,
as was a granddaughter in 1992, and an older sister with Crohn's disease.
In 1991, her father died from emphysema; a year later the mother of
Alyssa gave birth to a son immediately diagnosed with severe asthma.
Anderson connects the litany of disease with mishaps by her industrial
neighbours. She paraphrases their attitude thus: 'If someone doesn't
like it, they can sue us if they can - and since we have more
money than God, we will win.'
A thumbnail sketch
of politics and the environment in the United States today depicts oil
as the lifeblood running through every vein of an administration forging
ahead with its energy policy. The White House has just been forced to
disclose (after being faced with a Congressional subpoena) that it drew
up a national energy plan based on increased production without regard
to the environment or conservation, having failed to consult with anyone
other than its friends among the producers themselves, notably the disgraced
Enron. This despite the fact that an energy crisis in California last
summer caused most analysts to draw the opposite conclusion, stressing
the need to curb a gas-guzzling America.
At the hub of this
turning wheel of influence is Vice President Dick Cheney, fresh into
office from his post as chief executive of Halliburton, the world's
second-largest oil-drilling services company, where he netted a personal
fortune of $36m in the year before leaving, with help from contacts
accumulated while serving under George Bush Sr. Just last week, however,
Halliburton joined Enron in coming under investigation by the Securities
and Exchange Commission for the same system of publishing inflated revenues
- 'aggressive accounting' - for which Enron has become a synonym for
shame. These alleged misdeeds took place during Cheney's directorship.
The company also faces a floodtide of civil lawsuits over asbestosis_
unless a model can be found (as has been established in Texas) to make
such resort to the law nigh impossible for anyone without money.
The entwinement
of the Bush dynasty with the energy barons of Texas has apparently humble
beginnings, in the Lone Star State's wild west, on the plains around
Midland and Odessa. This is barren land across which dust devils fly
and trains rumble like iron snakes. This is where George Bush Sr was
sent by his father, Senator Prescott Bush, to a trainee job with the
International Derrick and Equipment Company, a subsidiary of Dresser
Industries, controlled by the Bush family and selling more oil rigs
than anyone in the world. (Dresser later became absorbed by Halliburton.)
The world first
heard of Odessa on that fateful day in December 1998 when Bush Jr was
governor of Texas and the sky turned black after an 'upset' at the Huntsman
chemical plant literally on the wrong side of the railroad tracks it
shares with poor housing, where Mexicans and blacks live. (An 'upset'
is an unplanned accident releasing pollution, not part of the plant's
normal running procedure, and which does not count in its regulatory
tally.) Lucia Llanez, who lives in this tightly knit community of bungalows
between plant and railroad, will never forget this one: 'It was dark
all over; cars on the Interstate slowing down and putting their lights
on because they couldn't see, though it was day. There was a rumbling
like trains that rattled the windows, and people were going to hospital
for watering eyes, allergies and problems breathing. The cloud stayed
two weeks.'
The story of Huntsman
goes back to the days of Bush Sr's arrival, when Odessa was a town of
what retired fireman Don Dangerfield calls 'wildcatters'. In the 40s,
the US Air Force bombed deep holes in the giant Permian oil basin in
a search for oil which then attracted a stampede of speculators (including
those from Humble) who would, recalls Dangerfield, 'spend the nights
in a hotel, the End of the Golden West, and gamble their lots in rooms
so thick with cigar smoke you could hardly see'. Among them was a man
he remembers well: John Sam Shepherd, a former attorney general of Texas
and member of the White Citizens Council - a political wing of the Ku
Klux Klan - disgraced by a land scandal and come to seek his fortune
out West by setting up the El Paso Products company, later Huntsman.
George Bush landed
in this mayhem but quickly decamped 20 miles north to Midland, where
new millionaires like him established a country club, a Harvard and
a Yale club, met at the Petroleum Club and played golf on irrigated
lawns. Midland was, recalls Gene Collins, a member of the National Association
for the Advancement of Colored People in Odessam 'one of two towns in
America with a Rolls-Royce dealership and more millionaires per head
than anywhere'. This was where Bush Sr built his oil fortune, launched
a political career on its shoulders and raised his son George W Bush
in the art and language of power he now feigns not to speak. The story
of how Bush Sr constructed his empire is well known, as is that of how
his son George W was groomed to follow in his footsteps. Less widely
broadcast, however, are the depths and intricacies of a system the Bush
family built in bonding with the energy industry, as the dynastic machine
elevated its methods from Odessa to the Senate, the
governor's mansion in Austin, the oil centres of Houston and Dallas,
the White House and thereafter the globe.
Neil Carman has
a professorial air to him that belies the sharpness of the surgical
blade with which he tries to operate on 'Toxic Texas'. Originally a
plant biologist, he was an investigator for the Texas Natural Resources
Conservation Commission (TNRCC), responsible for issuing permits for
agreed levels of pollution and enforcing environmental law. In 1989,
he took on the General Tire and Rubber Company for 'systematic violations'.
The firm hired
a lobbyist, Larry Feldcamp, from the Baker Botts law firm whose senior
partner, James Baker III, was secretary of state to then president George
Bush Sr and who later, as an attorney, secured the delivery of the state
of Florida for Bush Jr during last year's election recounts. Baker Botts
advertises itself as a 'full service firm', counting Shell, Mobil, Union
Carbide, Huntsman, Amoco on its books. The other law firm indivisible
from the energy lobby and the Bush fiefdom is Vinson & Elkins, which
acts for both Enron and the Alcoa aluminium giant, whose former chief
executive Paul O'Neill is now US Treasury Secretary. Between these law
firms and the regulatory body supposed to face them down, says Dr Carman,
'there's a revolving door. Feldcamp's place was taken recently by the
most active attorney on the oil scene, Pamela Giblin - one of the TNRCC's
first appointees.'
Carman resigned
because 'all they had to do was hire people like Feldcamp and you were
off the case. They did not deny permits - they must have issued 50,000
permits for air pollution during my time and refused only two, on occasions
when the public raised hell. And they don't revoke them - it's not like
drunk driving: if you get caught, they just keep reissuing. They used
to refer to these places as "industrial areas", as if that
meant they were outside the law. I called them "sacrifice zones".'
There is another
problem, unique to Texas: the 'grandfathering' rule. Grandfathering
dates back to the Texas Clean Air Act of 1971, exempting existing installations
from compliance with new regulations. The idea was that they would be
modernised or become obsolete and close. In the event, firms found that
not being obliged to spend on pollution control gave them a competitive
edge, and nearly three decades later, grandfathering accounted for more
than 1,000 plants and 35 per cent of all pollution in Texas. Nevertheless,
in the early 90s, the TNRCC began to toughen its stance in accordance
with a more aggressive federal approach to pollution by the new Clinton
administration. Then, in 1994, Texas went to the polls to elect a new
governor - 'And when Bush took over,' says Carman, 'everything changed.'
Two groups based
in Austin - Texans for Public Justice (TPJ) and Public Research Works
(PRW) - crunched the statistics on the wave of money on which George
W Bush sailed into the governor's mansion. It was what Andrew Wheat
of the TPJ calls 'something unheard of in Texas or anywhere else: $42m
on two campaigns'. Grandfathered polluters poured $10.2m into the campaign
coffers between 1993 and 1998, led by what PRW calls the 'dirty 30',
including Exxon, Shell, Amoco, Enron and the Alcoa aluminium giant.
Bush himself received $1.5m from 55 grandfathered companies, led by
Enron, with a handsome $348,500 top-up from the man he calls Kenny Boy
- Kenneth Lay, the company's chief executive, currently under criminal
investigation.
Wheat's analysis
of the new governor's 'personal time' shows a revolving door for campaign
donors and the energy industry. Andrew Barrett, Bush's in-house environmental
policy advisor, began daily visits to the TNRCC in preparation for the
appointment of new commissioners: Ralph Marquez, lobbyist for the Texas
Chemical Council and former executive of the Monsanto chemical firm,
and Barry McBee, attorney with the law firm Thompson & Knight, a
major contributor to Bush funds with a host of oil-industry clients.
Legislation based
on the notion of 'self-regulation' followed: a law enabling companies
to audit their own pollution records provided they reported them, in
exchange for which there would be absolute protection from public disclosure.
Big oil was delighted, as a memo obtained by an environmentalist group,
the Texas SEED Coalition, illustrated: a record of a gathering in June
1977 at Exxon in Houston by 40 representatives of the Texas oil and
gas industries - written by one of their number - said 'the "insiders"
from oil and gas believe that the governor's office will persuade the
TNRCC to accept whatever program is developed between the industry group
and the governor's office'.
It was not until
Bush became president that, in its 2001 state legislature, Texas finally
decided to rein in the 'grandfathered' plants. A bill gave them until
2007 to come into line with federal law or shut down. Even then, there
was a legal challenge to the TNRCC's science from the Houston Business
Partnership, recently entrusted with millions in federal money to clean
up the Gulf coastline. The partnership is a high-octane chamber of commerce,
throwing up a few familiar names: Exxon, Conoco, Enron, James Baker's
law firm Baker Botts - and George Bush Sr.
Most important
of all - and best hidden - was Bush's programme for Tort Reform. It
was this that his father's advisor Karl Rove (dispatched to steer Bush's
presidential campaign and now the White House itself) insisted the new
governor make his hallmark, and this is potentially the dynasty's greatest
gift to big oil. Put simply, Tort Reform means making it harder for
citizens to sue corporations. TPJ calculated that business interests
specifically isolating Tort Reform on their political agenda poured
money into Bush's gubernatorial campaigns. Soon after being elected
governor, says Andrew Wheat, Bush declared Tort Reform an 'emergency
issue'.
This meant appointing
a judge to the Texas supreme court whom President Bush is tipped to
bring aboard the Supreme Court in Washington (to which, some say, he
owes his presidency). Alberto Gonzalez wrote a decision soon after his
appointment to the Texas court which made it all but impossible for
citizens to bring class actions. 'The result,' says Shawn Isbell, a
lawyer working on environmental cases, 'is that it will simply be too
expensive to bring cases against the corporations.'
Another ruling,
says Sandra McKenzie, the lawyer who fought a long and bitter battle
against the Formosa Plastics firm, stipulates that 'anyone trying to
prove a personal chemical injury had to show that other people in a
similar situation had suffered the same reaction, according to a study
in a published journal'. The new precedents, says McKenzie, 'changed
the laws to establish a no-compromise, "take no prisoners"
approach by the Bushes'.
In 1989, George
Bush presented the Governor's Award for Environ mental Excellence to
the Valero chemical refining company. Foremost in the minds of the proud
executives at the ceremony in Austin's luxury Four Seasons Hotel was
their 'refinery of the future' at Corpus Christi, on the Gulf, at the
far end of the coastal strip that runs through Houston to the Louisiana
border.
Alfred Williams
gets a better view of the refinery of the future across the freeway
from the garden of his mobile home than Governor Bush did from the Four
Seasons. He can smell it better too - the inimitable stench on the muggy
delta air that signifies the cooking up of cheap crude-oil 'feed stock'
to produce its chemical by-product and treating the neighbourhood to
a dose of sulphur dioxide.
When Williams,
an ex-Vietnam Marine, moved here in 1972, 'this was all farmland'. He
now delivers an impassioned requiem for his garden, with its peach trees
dead or buckling over. The light of a quicksilver moon catches the plume
of sulphur along what they call Refinery Row.
'I'm in my golden
years,' he reflects. 'But I can't sell my house because no bank will
give a loan without 40 per cent down. And they won't relocate me, as
I'd do if they offered.
'It started with
having to wipe residue from off of my car. Then the iron on my rooftop
here started to get corroded, and the trees were dying. Sometimes I
have to come inside because my eyes are burning.'
Williams filed
a civil suit against Valero, steered by attorney Shawn Isbell. The court
in Corpus denied Williams class action status in accordance with the
zeitgeist, but Isbell managed to discover how the refinery of the future
was so poorly crafted that Valero had (unsuccessfully) sued the companies
which had built it. She also found out how the Texas system of overlooking
'upsets' works. Since 1994, Valero had suffered more than 480 'upsets',
but the TNRCC records each set of emissions separately - for example,
Valero's sulphur-dioxide emissions for 1977 show up on the commission's
website as 166.4 tons, while the reality including 'upsets' is closer
to 700 tons. Nevertheless, says Isbell, 'I've seen the TNRCC go harder
after a pig farmer than I have after these kinds of companies.'
Williams keeps
a notebook by his phone to record the 'upsets' over the road. He reports
them to the TNRCC. But, he says, 'I call them rainbows: they are shut
at night and on the weekend when the sulphur is released, and they only
come when the storm has come and gone.'
Cornelius Harmon
is a cab driver in Corpus, and takes a drive along Refinery Row, down
a road he calls the 'buffer zone'. It divides a wasteland of former
housing - where those relocated because of pollution by another plant,
Koch, once lived - from the mostly black and Hispanic community of Hillcrest.
'Are you gonna tell me,' posits Harmon, 'that the hand of God Almighty
drew a line down this road and He says: "Over yonder side is contaminated
and this side is fit for folks to live ?" And what have we got
here? Well, I'll be doggone if it's not a school, with children playing
in the smell. The people who run these things, they give our kids a
new pair of sneakers and go to church and think they're going to heaven.
But at the pearly gates, they're going to find St Peter in his Afro
saying: "Whassup cuz? Seems like you're trying to get into the
wrong place."'
Time came for destiny
to fulfil itself, for the son to stand for the high office in Washington
which the Bush dynasty and its backers saw as having been usurped by
Bill Clinton. The story of what carried George W Bush to the White House
is well known: the most ruthlessly efficient campaigning machine ever
assembled - by Karl Rove - with all the family's best connections filling
a treasure chest that broke all records. As they returned to number-crunching
in Austin, Texans for Public Justice and Public Research Works found
little to surprise them save the machine's speed and efficacy. Within
a month, Bush had raised hundreds of thousands of dollars, with Enron
leading the field and two law firms giving $146,900 - most prominently
Vinson and Elkins, attorneys to Enron and the Alcoa aluminium giant,
and James Baker's company, lawyers to the oil industry.
When Bush came
to pick his cabinet, almost all pivotal positions went to Bush Sr's
inner sanctum, apart from the posts of commerce secretary (Don Evans,
longtime buddy of Bush Jr's and a fellow Midland oil man) and treasury
secretary (Paul O'Neill, currently touring the globe with Bono of U2,
and former chief executive of Alcoa, the world's biggest producer of
aluminium).
Alcoa held a stockholders
meeting to send O'Neill off with a torrent of eulogies and an annual
pay packet worth $36m, but three speakers spoiled the party. Two were
trade unionists from O'Neill's troubled plant at Ciudad Acuna in Mexico,
challenging the chief executive's claim that conditions at their factory
were so good 'they can eat off the floor'. The third was the soft-spoken
Texan Ron Giles, drawing attention to the biggest of the state's 'grandfathered'
polluters - the Alcoa smelting plant at Rockdale. If the Rockdale plant
were a single state, it would count 40th for pollution among the 50
in the union, belching more than 100,000 tons of toxins in 1997.
The smokestacks
of the largest aluminium smelter in North America fit incongruously
into the pastoral ranch land northeast of Austin. And they seem especially
odd as backdrop to the 300-acre ranch where Wayne Brinkley's family
has raised cattle since the late 1800s, but over which hangs a stench
wafting across the moonscape of Alcoa's lignite mine.
Brinkley looks
as much the Texan as President Bush in his boots and Stetson - 'Only
difference is,' he says, 'I am one, and Bush is not.' In his office
is a hog, stuffed and mounted, and an awesome collection of vintage
knives and firearms. On his desk is a survey by the independent Research
Analysis Consultations group showing that concentrations of magnesium,
calcium and aluminium register 'very high' around Brinkley's barn, and
sodium and titanium over his fields. 'My son had cancer when he was
just a young kid,' he says in a voice like sandpaper. 'They tried to
buy us out. They keep offering various deals saying I can't talk to
anyone about this for 35 years, and then they changed it to forever.
But why should I leave? My family's been here 100 years; they've been
here 50. They should do it by the book, and keep it clean for the rest
of us.'
Alcoa continues
regardless, feted by Wall Street for 'dazzling' returns. But in the
last light of a warm evening, quiet rebellion stirs in the community
room of a little town called Elgin. A group of local people, Neighbors
for Neighbors, have obtained records that show Alcoa to be cheating,
making improvements to its production plant worth some $45m without
parallel investments in pollution control. As a direct result of the
Neighbors' exposé, the company was investigated by a TNRCC with
no place to hide this time.
Neighbors for Neighbors,
enjoying statewide coverage and acclaim for its pluck, is itself suing
the company. Billie Woods, Neighbors' president, says that Alcoa has
responded by pressing ahead with its plans for a new lignite mine that
would carve up 15,000 acres of farmland. The company has also made court
applications to enter and search the homes of Neighbors activists. The
request was denied, but the matter moved the usually conservative Daily
Texan newspaper to demand: 'Stop the Alcoa Gestapo!'
Yesterday Texas,
today Washington, tomorrow the world. With Bush family business back
home in the US presidency, it now moves, in the form of the father,
to the apex of global finance. The Carlyle Group defines the next phase
of power: a Washington-based private equity fund with a difference.
It is headed by Frank Carlucci, former CIA director and defense secretary
under Ronald Reagan and lifelong friend of George Bush Sr. Bush (also
once director of the CIA) sits next to Carlucci on the board with a
portfolio specialising in Asia and does not hesitate to communicate
with his son on concerns of regional relevance to Carlyle such as Afghanistan
or the Pacific Rim. Bush Jr was once chairman of a Carlyle subsidiary
making in-flight food.
On Carlucci's other
flank is the ubiquitous James Baker III. Chairman of Carlyle Europe
is John Major. The group's new asset management is headed by Afsaneh
Beschloss, former treasurer of the World Bank. Carlyle has grown quickly
to be worth some $12bn, specialising in energy and defence, with particular
attention to the oil-producing Gulf states. Among its most eager investors
is Prince Bandar, Saudi ambassador to Washington and his father Prince
Sultan, the kingdom's defence minister. The group's most spectacular
recent coup was to reap $400m in a stock sale of its subsidiary United
Defence Industries, maker of the Crusader artillery system which most
military experts argued was redundant, but which won $470m in development
money from the Pentagon and whose future in the US arsenal still hangs
in the balance after a series of recent meetings between Carlucci and
Defence Secretary Donald Rumsfeld. Within a month of 11 September last
year, Carlucci was meeting with Rumsfeld and his
deputy Paul Wolfowitz, and 10 days later offered an assessment which
exactly predicted the endless-war scenario: 'We as Americans,' he said,
'have to recognise that terrorism is more or less a permanent situation.'
'What's the secret?'
chided William Conway, a co-founder of the group. 'I don't think we
have any secrets. We are a group of businessmen who have made a huge
amount of money for our investors.' 'I never bought into this conspiracy
theory about the Bush family, the energy companies or the Carlyle Group,'
says Michael King, seasoned political editor of the Austin Chronicle
, who has observed the phenomenon for decades. 'It is perfectly clear
what they're aiming at from what they do in public: managing the global
economy to their own advantage, and doing a pretty good job of it.'
On 11 September,
while Al-Qaeda's planes slammed into the World Trade Center and the
Pentagon, the Carlyle Group hosted a conference at a Washington hotel.
Among the guests of honour was a valued investor: Shafig bin Laden,
brother to Osama.