done in the early 1970s, during the Saudi Arabian Money-laundering Affair. Winifred grew up near Bechtel’s San Francisco world headquarters and was also a member of the corporate family; her first job after graduating from UC Berkeley was at Bechtel.
The energy industry was undergoing major restructuring. The big engineering firms were jockeying to take over—or at least to compete with—the utility companies that previously had enjoyed the privileges of local monopolies. Deregulation was the watchword of the day, and rules changed overnight. Opportunities abounded for ambitious people to take advantage of a situation that baffled the courts and Congress. Industry pundits dubbed it the “Wild West of Energy” era.
One casualty of this process was MAIN. As Bruno predicted, Mac Hall had lost touch with reality and no one dared tell him so. Paul Priddy never asserted control, and MAIN’s management not only failed to take advantage of the changes sweeping the industry but also made a series of fatal mistakes. Only a few years after Bruno delivered record profits, MAIN dropped its EHM role and was in dire financial straits. The partners sold MAIN to one of the large engineering and construction firms that had played its cards right.
While I had received almost thirty dollars a share for my stock in 1980, the remaining partners settled for less than half that amount, approximately four years later. Thus did one hundred years of proud service end in humiliation. I was sad to see the company fold, but I felt vindicated that I had gotten out when I did. The MAIN name continued under the new ownership for a while, but then it was dropped. The logo that had once carried such weight in countries around the globe fell into oblivion.
MAIN was one example of a company that did not cope well in the changing atmosphere of the energy industry. At the opposite end of the spectrum was a company we insiders found fascinating: Enron. One of the fastest-growing organizations in the business, it seemed to come out of nowhere and immediately began putting together mammoth deals. Most business meetings open with a few moments of idle chatter while the participants settle into their seats, pour themselves cups of coffee, and arrange their papers; in those days the idle chatter often centered on Enron. No one outside the company could fathom how Enron was able to accomplish such miracles. Those on the inside simply smiled at the rest of us, and kept quiet. Occasionally, when pressed, they talked about new approaches to management, about “creative financing,” and about their commitment to hiring executives who knew their way through the corridors of power in capitals across the globe.
To me, this all sounded like a new version of old EHM techniques. The global empire was marching forward at a rapid pace.
For those of us interested in oil and the international scene, there was another frequently discussed topic: the vice president’s son, George W. Bush. His first energy company, Arbusto (Spanish for
We all assumed that having a father who was the U.S. vice president factored into this hiring decision, since the younger Bush’s record of accomplishment as an oil executive certainly did not warrant it. It also seemed no coincidence that Harken took this opportunity to branch out into the international field for the first time in its corporate history, and to begin actively searching for oil investments in the Middle East.
In 1989, Amoco was negotiating with the government of Bahrain for offshore drilling rights. Then Vice President Bush was elected president. Shortly thereafter, Michael Ameen—a State Department consultant assigned to brief the newly confirmed U.S. ambassador to Bahrain, Charles Hostler—arranged for meetings between the Bahraini government and Harken Energy. Suddenly, Amoco was replaced by Harken. Although Harken had not previously drilled outside the southeastern United States, and never offshore, it won exclusive drilling rights in Bahrain, something previously unheard of in the Arab world. Within a few weeks, the price of Harken Energy stock increased by over twenty percent, from $4.50 to $5.50 per share.4
Even seasoned energy people were shocked by what had happened in Bahrain. “I hope G. W. isn’t up to something his father will pay for,” said a lawyer friend of mine who specialized in the energy industry and also was a major supporter of the Republican Party. We were enjoying cocktails at a bar around the corner from Wall Street, high atop the World Trade Center. He expressed dismay. “I wonder if it’s really worth it,” he continued, shaking his head sadly. “Is the son’s career worth risking the presidency?”
I was less surprised than my peers, but I suppose I had a unique perspective. I had worked for the governments of Kuwait, Saudi Arabia, Egypt, and Iran, I was familiar with Middle Eastern politics, and I knew that Bush, just like the Enron executives, was part of the network I and my EHM colleagues had created; they were the feudal lords and plantation masters.5
CHAPTER 29. I Take a Bribe
During this time in my life, I came to realize that we truly had entered a new era in world economics. Events set in motion while Robert McNamara—the man who had served as one of my models—reigned as secretary of defense and president of the World Bank had escalated beyond my gravest fears. McNamara’s Keynesian-inspired approach to economics, and his advocacy of aggressive leadership, had become pervasive. The EHM concept had expanded to include all manner of executives in a wide variety of businesses. They may not have been recruited or profiled by the NSA, but they were performing similar functions.
The only difference now was that the corporate executive EHMs did not necessarily involve themselves with the use of funds from the international banking community. While the old branch, my branch, continued to thrive, the new version took on aspects that were even more sinister. During the 1980s, young men and women rose up through the ranks of middle management believing that any means justified the end: an enhanced bottom line. Global empire was simply a pathway to increased profits.
The new trends were typified by the energy industry, where I worked. The Public Utility Regulatory Policy Act (PURPA) was passed by Congress in 1978, went through a series of legal challenges, and finally became law in 1982. Congress originally envisioned the law as a way to encourage small, independent companies like mine to develop alternative fuels and other innovative approaches to producing electricity. Under this law, the major utility companies were required to purchase energy generated by the smaller companies, at fair and reasonable prices. This policy was a result of Carter’s desire to reduce U.S. dependence on oil—all oil, not just imported oil. The intent of the law was clearly to encourage both alternative energy sources and the development of independent companies that reflected America’s entrepreneurial spirit. However, the reality turned out to be something very different.
During the 1980s and into the 1990s, the emphasis switched from entrepreneurship to deregulation. I watched as most of the other small independents were swallowed up by the large engineering and construction firms, and by the public utility companies themselves. The latter found legal loopholes that allowed them to create holding companies, which could own both the regulated utility companies and the unregulated independent energy- producing corporations. Many of them launched aggressive programs to drive the independents into bankruptcy and then purchase them. Others simply started from scratch and developed their own equivalent of the independents.
The idea of reducing our oil dependence fell by the wayside. Reagan was deeply indebted to the oil companies; Bush had made his own fortune as an oilman. And most of the key players and cabinet members in these two administrations were either part of the oil industry or were part of the engineering and construction companies so closely tied to it. Moreover, in the final analysis, oil and construction were not partisan; many Democrats had profited from and were beholden to them also.
IPS continued to maintain a vision of environmentally beneficial energy. We were committed to the original PURPA goals, and we seemed to lead a charmed life. We were one of the few independents that not only survived but also thrived. I have no doubt that the reason for this was because of my past services to the corporatocracy.
What was going on in the energy field was symbolic of a trend that was affecting the whole world. Concerns
