Connecting the Dots......December 1997, Mullah Omar the Taliban visited the Bush administration, Enron, and UNOCAL's Houston refinery operations.
The Enron Corporation gave the Taliban millions of dollars in a no-holds-barred bid to strike a deal for an energy pipeline in Afghanistan -- wile the Taliban were already sheltering terror kingpin Osama Bin Laden!
Enron executives even met with Taliban officials in Texas, where they were given the red-carpet treatment and promised a fortune if the deal went through.
That's the bombshell finding of an exclusive ENQUIRER investigation into the collapse of the company that ripped off Americans for millions of dollars. The ENQUIRER has also uncovered that some of the Enron money wound up supporting Bin Laden and his Al Qaeda terrorist network!
"Enron would do business with the devil if it would make the company money!" said a member of a Congressional committee investigating the company's collapse.
And Atul Davda, who worked as a senior director for Enron's International Division until the company's collapse, confirmed to The ENQUIRER: "Enron had intimate contact with Taliban officials. Building the pipeline was one of the corporation's prime objectives."
As The ENQUIRER revealed two weeks ago, Enron secretly employed CIA agents to carry out its dealings overseas. And a CIA insider disclosed: "Enron was wooing the Taliban and was willing to make the Taliban a partner in the operation of a pipeline through Afghanistan.
"Enron proposed to pay the Taliban large sums of money in a 'tax' on every cubic foot of gas and oil shipped through the pipeline."
Enron shelled out more than $400 million for a feasibility study on the pipeline and "a large portion of that cost was payoffs to the Taliban," said the CIA source.
Shockingly, Enron's wooing of the Taliban continued even after Al Qaeda agents bombed two American embassies in Africa in 1998, and the U.S. retaliated with missile attacks on suspected Al Qaeda camps in Afghanistan and Sudan.
"The U.S. was shooting missiles into Afghanistan, and it was clear that the Taliban were enabling Bin Laden and Al Qaeda," terrorist expert Jeffrey Steinberg, editor of the Executive Intelligence Review, told The ENQUIRER.
"Nonetheless the oil companies continued to work behind the scenes to complete the pipeline deal."
The pipeline project was originally proposed by Unocal Corporation.
And an FBI source told The ENQUIRER: "Enron and Unocal dumped hundreds of millions of dollars into Afghanistan and the Taliban. The pipeline would relieve our dependence on Saudi Arabia -- and Enron would make billions.
"When Clinton was bombing Bin Laden camps in Afghanistan in 1998, Enron was making payoffs to Taliban and Bin Laden operatives to keep the pipeline project alive. And there's no way that anyone could NOT have known of the Taliban and Bin Laden connection at that time, especially Enron who had CIA agents on its payroll!"
Said an Enron company source, "After the Taliban came to power in 1996, Tliban leaders were invited to Sugar Land, Texas, by Unocal and Enron executives.
"The Taliban's mullahs were given the royal treatment for four days in 1997!"
The visit was aimed at getting Taliban cooperation to build the pipeline, which would carry vast gas and oil deposits from Uzbekistan and Turkmenistan. Enron had exclusive contracts with the former Russian republics, according to another former Enron employee.
The pipeline was to travel through Afghanistan and Pakistan to the Indian Ocean.
When contacted by The ENQUIRER, U.S. State Department's press officer for South Asian Affairs, Len Scensny, confirmed that a Taliban delegation visited Sugar Land, Teas, in 1997 to discuss business with oil companies.
Three days after the terrorist attacks on the World Trade Center and the Pentagon, Unocal announced it had withdrawn from the Afghanistan pipeline project.
But the CIA insider said Enron and its CEO Kenneth Lay held on, waiting for the Taliban to give up Bin Laden as the Bush administration was demanding.
"Enron figured the Taliban wanted to stick to their deal, that they wanted riches the same way Enron did.
"What Enron and Ken Lay didn't understand is that it was Bin Laden who was calling the shots, not Enron's Taliban friends.
"Now Enron and the Taliban are both goners!"
Published on: March 4, 2002
Afghanistan, the Taliban
and the Bush Oil Team
by Wayne Madsen
According to Afghan, Iranian, and Turkish government sources, Hamid Karzai, the interim Prime Minister of Afghanistan, was a top adviser to the El Segundo, California-based UNOCAL Corporation which was negotiating with the Taliban to construct a Central Asia Gas (CentGas) pipeline from Turkmenistan through western Afghanistan to Pakistan.
Karzai, the leader of the southern Afghan Pashtun Durrani tribe, was a member of the mujaheddin that fought the Soviets during the 1980s. He was a top contact for the CIA and maintained close relations with CIA Director William Casey, Vice President George Bush, and their Pakistani Inter Service Intelligence (ISI) Service interlocutors. Later, Karzai and a number of his brothers moved to the United States under the auspices of the CIA. Karzai continued to serve the agency's interests, as well as those of the Bush Family and their oil friends in negotiating the CentGas deal, according to Middle East and South Asian sources.
When one peers beyond all of the rhetoric of the White House and Pentagon concerning the Taliban, a clear pattern emerges showing that construction of the trans-Afghan pipeline was a top priority of the Bush administration from the outset. Although UNOCAL claims it abandoned the pipeline project in December 1998, the series of meetings held between U.S., Pakistani, and Taliban officials after 1998, indicates the project was never off the table.
Quite to the contrary, recent meetings between U.S. Ambassador to Pakistan Wendy Chamberlain and that country's oil minister Usman Aminuddin indicate the pipeline project is international Project Number One for the Bush administration. Chamberlain, who maintains close ties to the Saudi ambassador to Pakistan (a one-time chief money conduit for the Taliban), has been pushing Pakistan to begin work on its Arabian Sea oil terminus for the pipeline.
Meanwhile, President Bush says that U.S. troops will remain in Afghanistan for the long haul. Far from being engaged in Afghan peacekeeping -- the Europeans are doing much of that -- our troops will effectively be guarding pipeline construction personnel that will soon be flooding into the country.
Karzai's ties with UNOCAL and the Bush administration are the main reason why the CIA pushed him for Afghan leader over rival Abdul Haq, the assassinated former mujaheddin leader from Jalalabad, and the leadership of the Northern Alliance, seen by Langley as being too close to the Russians and Iranians. Haq had no apparent close ties to the U.S. oil industry and, as both a Pushtun and a northern Afghani, was popular with a wide cross-section of the Afghan people, including the Northern Alliance. Those credentials likely sealed his fate.
When Haq entered Afghanistan from Pakistan last October, his position was immediately known to Taliban forces, which subsequently pinned him and his small party down, captured, and executed them. Former Reagan National Security Adviser Robert McFarlane, who worked with Haq, vainly attempted to get the CIA to help rescue Haq. The agency claimed it sent a remotely-piloted armed drone to attack the Taliban but its actions were too little and too late. Some observers in Pakistan claim the CIA tipped off the ISI about Haq's journey and the Pakistanis, in turn, informed the Taliban. McFarlane, who runs a K Street oil consulting firm, did not comment on further questions about the circumstances leading to the death of Haq.
While Haq was not part of the Bush administration's GOP (Grand Oil Plan) for South Asia, Karzai was a key player on the Bush Oil team. During the late 1990s, Karzai worked with an Afghani-American, Zalmay Khalilzad, on the CentGas project. Khalilzad is President Bush's Special National Security Assistant and recently named presidential Special Envoy for Afghanistan. Interestingly, in the White House press release naming Khalilzad special envoy, no mention was made of his past work for UNOCAL. Khalilzad has worked on Afghan issues under National Security Advisor Condoleezza Rice, a former member of the board of Chevron, itself no innocent bystander in the future CentGas deal. Rice made an impression on her old colleagues at Chevron. The company has named one of their supertankers the SS Condoleezza Rice.
Khalilzad, a fellow Pashtun and the son of a former government official under King Mohammed Zahir Shah, was, in addition to being a consultant to the RAND Corporation, a special liaison between UNOCAL and the Taliban government. Khalilzad also worked on various risk analyses for the project.
Khalilzad's efforts complemented those of the Enron Corporation, a major political contributor to the Bush campaign. Enron, which recently filed for bankruptcy in the single biggest corporate collapse in the nation's history, conducted the feasibility study for the CentGas deal. Vice President Cheney held several secret meetings with top Enron officials, including its Chairman Kenneth Lay, earlier in 2001. These meetings were presumably part of Cheney's non-public Energy Task Force sessions. A number of Enron stockholders, including Defense Secretary Donald Rumsfeld and Trade Representative Robert Zoellick, became officials in the Bush administration. In addition, Thomas White, a former Vice Chairman of Enron and a multimillionaire in Enron stock, currently serves as the Secretary of the Army.
A chief benefactor in the CentGas deal would have been Halliburton, the huge oil pipeline construction firm that also had its eye on the Central Asian oil reserves. At the time, Halliburton was headed by Dick Cheney. After Cheney's selection as Bush's Vice Presidential candidate, Halliburton also pumped a huge amount of cash into the Bush-Cheney campaign coffers. And like oil cash cow Enron, there were Wall Street rumors in late December that Halliburton, which suffered a forty per cent drop in share value, might follow Enron into bankruptcy court.
Assisting with the CentGas negotiations with the Taliban was Laili Helms, the niece-in-law of former CIA Director Richard Helms. Laili Helms, also a relative of King Zahir Shah, was the Taliban's unofficial envoy to the United States and arranged for various Taliban officials to visit the United States. Laili Helms' base of operations was in her home in Jersey City on the Hudson River. Ironically, most of her work on behalf of the Taliban was practically conducted in the shadows of the World Trade Center, just across the river.
Laili Helms' liaison work for the Taliban paid off for Big Oil. In December 1997, the Taliban visited UNOCAL's Houston refinery operations. Interestingly, the chief Taliban leader based in Kandahar, Mullah Mohammed Omar, now on America's international Most Wanted List, was firmly in the UNOCAL camp. His rival Taliban leader in Kabul, Mullah Mohammed Rabbani (not to be confused with the head of the Northern Alliance Burhanuddin Rabbani), favored Bridas, an Argentine oil company, for the pipeline project. But Mullah Omar knew UNOCAL had pumped large sums of money to the Taliban hierarchy in Kandahar and its expatriate Afghan supporters in the United States. Some of those supporters were also close to the Bush campaign and administration. And Kandahar was the city near which the CentGas pipeline was to pass, a lucrative deal for the otherwise desert outpost.
While Clinton's State Department omitted Afghanistan from the top foreign policy priority list, the Bush administration, beholden to the oil interests that pumped millions of dollars into the 2000 campaign, restored Afghanistan to the top of the list, but for all the wrong reasons. After Bush's accession to the presidency, various Taliban envoys were received at the State Department, CIA, and National Security Council. The CIA, which appears, more than ever, to be a virtual extended family of the Bush oil interests, facilitated a renewed approach to the Taliban. The CIA agent who helped set up the Afghan mujaheddin, Milt Bearden, continued to defend the interests of the Taliban. He bemoaned the fact that the United States never really bothered to understand the Taliban when he told the Washington Post last October, "We never heard what they were trying to say... We had no common language. Ours was, 'Give up bin Laden.' They were saying, 'Do something to help us give him up.' "
There were even reports that the CIA met with their old mujaheddin operative bin Laden in the months before September 11 attacks. The French newspaper Le Figaro quoted an Arab specialist named Antoine Sfeir who postulated that the CIA met with bin Laden in July in a failed attempt to bring him back under its fold. Sfeir said the CIA maintained links with bin Laden before the U.S. attacked his terrorist training camps in Afghanistan in 1998 and, more astonishingly, kept them going even after the attacks. Sfeir told the paper, "Until the last minute, CIA agents hoped bin Laden would return to U.S. command, as was the case before 1998." Bin Laden actually officially broke with the US in 1991 when US troops began arriving in Saudi Arabia during Operation Desert Storm. Bin Laden felt this was a violation of the Saudi regimeís responsibility to protect the Islamic Holy Shrines of Mecca and Medina from the infidels. Bin Ladenís anti-American and anti-House of Saud rhetoric soon reached a fever pitch.
The Clinton administration made numerous attempts to kill Bin Laden. In August 1998, Al Qaeda operatives blew up several U.S. embassies in Africa. In response, Bill Clinton ordered cruise missiles to be launched from US ships in the Persian Gulf into Afghanistan, which missed Bin Laden by a few hours. The Clinton administration also devised a plan with Pakistan's ISI to send a team of assassins into Afghanistan to kill Bin Laden. But Pakistan's government was overthrown by General Musharraf, who was viewed as particularly close to the Taliban. The CIA cancelled its plans, fearing Musharraf's ISI would tip off the Taliban and Bin Laden. . The CIA's connections to the ISI in the months before September 11 and the weeks after are also worthy of a full-blown investigation. The CIA continues to maintain an unhealthy alliance with the ISI, the organization that groomed bin Laden and the Taliban. Last September, the head of the ISI, General Mahmud Ahmed, was fired by Pakistani President Pervez Musharraf for his pro-Taliban leanings and reportedly after the U.S. government presented Musharraf with disturbing intelligence linking the general to the terrorist hijackers.
General Ahmed was in Washington, DC on the morning of September 11 meeting with CIA and State Department officials as the hijacked planes slammed into the World Trade Center and Pentagon. Later, both the Northern Alliance spokesman in Washington, Haron Amin, and Indian intelligence, in an apparent leak to The Times of India, confirmed that General Ahmed ordered a Pakistani-born British citizen and known terrorist named Ahmed Umar Sheik to wire $100,000 from Pakistan to the U.S. bank account of Mohammed Atta, the lead hijacker.
When the FBI traced calls made between General Ahmed and Sheik's cellular phone - the number having been supplied by Indian intelligence to the FBI - a pattern linking the general with Sheik clearly emerged. According to The Times of India, the revelation that General Ahmed was involved in the Sheik-Atta money transfer was more than enough for a nervous and embarrassed Bush administration. It pressed Musharraf to dump General Ahmed. Musharraf mealy-mouthed the announcement of his general's dismissal by stating Ahmed "requested" early retirement.
Sheik was well known to the Indian police. He was arrested in New Delhi in 1994 for plotting to kidnap four foreigners, including an American citizen. Sheik was released by the Indians in 1999 in a swap for passengers on board New Delhi-bound Indian Airlines flight 814, hijacked by Islamic militants from Kathmandu, Nepal to Kandahar, Afghanistan. India continues to believe the ISI played a part in the hijacking since the hijackers were affiliated with the pro-bin Laden Kashmiri terrorist group, Harkat-ul-Mujaheddin, a group only recently and quite belatedly placed on the State Department's terrorist list. The ISI and bin Laden's Al Qaeda reportedly assists the group in its operations against Indian government targets in Kashmir.
The FBI, which assisted its Indian counterpart in the investigation of the Indian Airlines hijacking, says it wants information leading to the arrest of those involved in the terrorist attacks. Yet, no move has been made to question General Ahmed or those U.S. government officials, including Deputy Secretary of State Richard Armitage, who met with him in September. Clearly, General Ahmed was a major player in terrorist activities across South Asia, yet still had very close ties to the U.S. government. General Ahmed's terrorist-supporting activities - and the U.S. government officials who tolerated those activities - need to be investigated.
The Taliban visits to Washington continued up to a few months prior to the September 11 attacks. The State Department's Bureau of Intelligence and Research's South Asian Division maintained constant satellite telephone contact with the Taliban in Kandahar and Kabul. Washington permitted the Taliban to maintain a diplomatic office in Queens, New York headed by Taliban diplomat Abdul Hakim Mojahed. In addition, U.S. officials, including Assistant Secretary of State for South Asian Affairs Christina Rocca, who is also a former CIA officer, visited Taliban diplomatic officials in Islamabad. In the meantime, the Bush administration took a hostile attitude towards the Islamic State of Afghanistan, otherwise known as the Northern Alliance. Even though the United Nations recognized the alliance as the legitimate government of Afghanistan, the Bush administration, with oil at the forefront of its goals, decided to follow the lead of Saudi Arabia and Pakistan and curry favor with the Taliban mullahs of Afghanistan. The visits of Islamist radicals did not end with the Taliban. In July 2001, the head of Pakistan's pro-bin Laden Jamiaat-i-Islami Party, Qazi Hussein Ahmed, also reportedly was received at the George Bush Center for Intelligence (aka, CIA headquarters) in Langley, Virginia.
According to the Washington Post, the Special Envoy of Mullah Omar, Rahmatullah Hashami, even came to Washington bearing a gift carpet for President Bush from the one-eyed Taliban leader. The Village Voice reported that Hashami, on behalf of the Taliban, offered the Bush administration to hold on to bin Laden long enough for the United States to capture or kill him but, inexplicably, the administration refused. Meanwhile, Spozhmai Maiwandi, the director of the Voice of America's Pashtun service, jokingly nicknamed "Kandahar Rose" by her colleagues, aired favorable reports on the Taliban, including a controversial interview with Mullah Omar.
The Bush administration's dalliances with the Taliban may have even continued after the start of the bombing campaign against their country. According to European intelligence sources, a number of European governments were concerned that the CIA and Big Oil were pressuring the Bush administration not to engage in an initial serious ground war on behalf of the Northern Alliance in order to placate Pakistan and its Taliban compatriots. The early-on decision to stick with an incessant air bombardment, they reasoned, was causing too many civilian deaths and increasing the shakiness of the international coalition.
The obvious, and woefully underreported, interfaces between the Bush administration, UNOCAL, the CIA, the Taliban, Enron, Saudi Arabia, and Pakistan, the groundwork for which was laid when the Bush Oil team was on the sidelines during the Clinton administration, is making the Republicans worried. Vanquished vice presidential candidate Joseph Lieberman is in the ironic position of being the senator who will chair the Senate Government Affairs Committee hearings on the collapse of Enron. The roads from Enron also lead to Afghanistan and murky Bush oil politics.
UNOCAL was also clearly concerned about its past ties to the Taliban. On September 14, just three days after terrorists of the Afghan-base al Qaeda movement crashed their planes into the World Trade Center and Pentagon, UNOCAL issued the following statement: "The company is not supporting the Taliban in Afghanistan in any way whatsoever. Nor do we have any project or involvement in Afghanistan. Beginning in late 1997, Unocal was a member of a multinational consortium that was evaluating construction of a Central Asia Gas pipeline between Turkmenistan and Pakistan [via western Afghanistan]. Our company has had no further role in developing or funding that project or any other project that might involve the Taliban."
The Bush Oil Team, which can now rely on the support of the interim Prime Minister of Afghanistan, may think that war and oil profits mix. But there is simply too much evidence that the War in Afghanistan was primarily about building UNOCAL's pipeline, not about fighting terrorism. The Democrats, who control the Senate and its investigation agenda, should investigate the secretive deals between Big Oil, Bush, and the Taliban.
Copyright Wayne Madsen 2002. Reprinted for fair use only.
The URL of this article is:
Former energy giant ENRON made big news worldwide, only a few weeks after the Sep11th attack, when many journalists came to the conclusion, that the US government knew already in August 2001 on the pending bancrupcy. On November 8th, 2001, the company disclosed that it had overstated earnings dating back to 1997 by almost $600 million. That same day, an e-mail ("Importance: High"), whose sender and recipient are blacked out, warned, "President Bush cannot talk about Dabhol as was already mentioned." The memo said, that Bush economic adviser Lawrence Lindsey could not discuss Enron either. Lindsey had been an Enron consultant. This started a long debate on the connections between ENRON and the US Government, the "rigged election" of President Bush, the ties to UNOCAL(->), military business, deals with India, CIA connections, many small hidden scandals and even a Taliban connection. More on President Bush-ENRON ties at: The Guardian UK became one of the few mainstream specialists of the complete ENRON story. They reported, that ENRON's testosterone-fuelled traders were fixtures in Houston's strip clubs. "One division of the company spent $2m a year on flowers alone. And its executives used the firm's corporate jets as taxis." Another specialist, Robert Bryce (->) described in a 2002 book on ENRON "the heady mix of greed, sex and arrogance that produced America's most spectacular financial scandal" Source: http://www.guardian.co.uk/g2/story/0,3604,825351,00.html
"When Enron needed cash, the company's chief financial officer had just the answer: a web of companies that would keep the firm's liabilities off its books and make him rich." Source: http://www.guardian.co.uk/g2/story/0,3604,830137,00.html
In the final extract of his book, Robert Bryce described how the firm bought its way into Washington's corridors of power.
http://www.guardian.co.uk/enron/story/0,11337,834484,00.html (See Bryce,Robert) One of ENRONs most important executives, was Herbert "Pug" Winokur, who is on the board of Dyncorp: DynCorp is a CIA sponsored company, once directed by ex-CIA director Woolsey,James (See WolfowitzCabal) In 1997, Enron announced plans to link Dabhol, India to the Hazira terminal of the of the so called HBJ pipeline. Enron said they were going to add to about 1500 miles to the HBJ pipeline. Costs: $300 million and $900 million, respectively. Enron had a $3 billion investment in the Dabhol power plant, near Bombay on India's west coast. The project began in 1992, and the liquefied natural gaspowered plant was supposed to supply energy- hungry India with about one-fifth of its energy needs by 1997. It was one of Enron's largest development projects ever (and the single largest direct foreign investment in India's history). The company owned 65 percent of Dabhol; the other partners were Bechtel, General Electric and State Electricity Board. In March 2002, Raghu Dhar of Zee TV, business editor of India's largest television network confirmed in the CBS - "60 Minutes"-show, how "Enron offered to pay him $1 million a year to be its corporate communications chief in an effort to silence his criticism of its plan to build a $3 billion power plant there." (See Bustani,Jose) "...The plant would run on liquefied natural gas shipped by tanker from the Middle East, a prospect many considered odd because India has lots of coal, a much cheaper and common fuel it has traditionally used to generate electricity. It turns out Enron was going to buy the natural gas from one of its own subsidiaries. Moreover, the central Indian government would assume essentially all risks in the venture, assuring Enron a 25 percent return on its investment." Source: http://www.cbsnews.com/stories/2002/04/11/60minutes/main505913.shtml
Another website, http://www.altindia.net/enron described precisely the indian Enron deal, an agreement between the Maharashtra State Electricity Board (MSEB) and the Dabhol Power Company (DPC), an Indian subsidiary of the U.S. based Multinational, Enron Corporation. (See Enron-Military_GovernmentTies) On January 5th, 2003, CBS showed their own movie on ENRON (prod. by Robert Greenwald), leaving out the more interesting aspects.
Could the Big Secret of the Enron scandal be that Cheney and the White House were working closely with the Taliban -- on Enron's behalf -- up to a few weeks before Sept. 11? s
Enron is a scandal so enormous that it's hard to wrap your mind around it. Not just a single financial disaster, it's actually a jigsaw of interlocking scandals, each outrageous in its own right.
There's Enron the Wall St. con game, where company bookkeepers used sleight of hand to turn four years of steady losses into stunning profits. There's Enron the reverse Robin Hood, which stole from its own employees even as its executives were hauling millions of dollars out the backdoor. There's Enron's Ken Lay the Kingmaker, who used the corporation's fraudulent wealth to broker elections and skew public policy to his liking. And then there are the Enron coverups, as documents are shredded and the White House seeks to conceal details about meetings between Enron and Vice President Cheney.
The coverups are still very much a mystery. What were the documents that were fed into the shredder -- even after the corporation declared bankruptcy? What is the White House fighting to keep secret, even going to the length of redefining executive privilege and inviting the first Congressional lawsuit ever filed against a president? Were the consequences of releasing these documents more damaging than the consequences of destroying them?
1: Starting in the mid-1990s, Unocal and its partners planned to build a 1,000 mile gas pipeline from Turkmenistan to Multan, Pakistan. Cost: about $2 billion (all pipeline routes shown are very approximate). Also considered was a more difficult route from Iran to Multan, which is not shown here.
2: A proposed 400-mile extension from Multan to New Delhi would bring some of the ultra-cheap gas into India's network of gas pipelines. Cost: $600 million.
3: The HBJ pipeline carries most of India's liquid natural gas.
4: Hazira, north of Bombay, is the end of the HBJ pipeline. But in 1997, Enron announced plans to link Dabhol to the Hazira terminal. Enron also said they were going to add to about 1500 miles to the HBJ pipeline. Costs: $300 million and $900 million, respectively.
5: Any gas pipeline across Pakistan could have a spur to the seaport of Gwadar, where tankers could take gas to Korea and Japan, largest consumers of liquid gas in the world. A sea route from Gwadar to Dabhol would be even easier.
Could the Big Secret be that the highest levels of the Bush Administration knew during the summer of 2001 that the largest bankruptcy in history was imminent? Or was it that Enron and the White House were working closely with the Taliban -- including Osama bin Laden -- up to weeks before the Sept. 11 attack? Was a deal in Afghanistan part of a desperate last-ditch "end run" to bail out Enron? Here's a tip for Congressional investigators and federal prosecutors: Start by looking at the India deal. Closely.
Enron had a $3 billion investment in the Dabhol power plant, near Bombay on India's west coast. The project began in 1992, and the liquefied natural gas- powered plant was supposed to supply energy- hungry India with about one-fifth of its energy needs by 1997. It was one of Enron's largest development projects ever (and the single largest direct foreign investment in India's history). The company owned 65 percent of Dabhol; the other partners were Bechtel, General Electric and State Electricity Board.
The fly in the ointment, however was that the Indian consumers could not afford the cost of the electricity that was to be produced. The World Bank had warned at the beginning that the energy produced by the plant would be too costly, and Enron proved them right. Power from the plant was 700 percent higher than electricity from other sources.
Enron had promised India that the Dabhol power would be affordable once the next phase of the project was completed. But to cut expenses, Enron had to find cheap gas to fuel it. They started burning naphtha, with plans that they would retrofit the plant to gas once it was available.
Originally, Enron was planning to get the liquefied natural gas (LNG) from Qatar, where Enron had a joint venture with the state-owned Qatar Gas and Pipeline Company. In fact, the Qatar project was one of the reasons why Enron selected India to set up Dabhol: it had to ensure that its Qatar gas did not remain unsold. In April 1999, however, the project was cancelled because of the global oil and gas glut. With Qatar gone, Enron was back to square one in trying to locate an inexpensive LNG supply source.
Enter the Afghanistan connection.
Where the "Great Game" in Afghanistan was once about czars and commissars seeking access to the warm water ports of the Persian Gulf, today it is about laying oil and gas pipelines via the untapped petroleum reserves of Central Asia, a region previously dominated by the former Soviet Union, with strong influence from Iran and Pakistan. Studies have placed the total worth of oil and gas reserves in the Central Asian republics at between $3 and $6 trillion.
Who has access to that vast sea of oil? Right now the only existing export routes from the Caspian Basin lead through Russia. U.S. oil companies have longed dreamed of their own pipeline routes that will give them control of the oil and gas resources of the Caspian Sea. Likewise, the U.S. government also wants to dominate Central Asian oil in order to reduce dependency on resources from the Persian/Arabian Gulf, which it cannot control. Thus the U.S. is poised to challenge Russian hegemony in a new version of the "Great Game."
Construction of oil and natural gas export pipelines through Afghanistan was under serious consideration during the Clinton years. In 1996, Unocal -- one of the world's leading energy resource and project development companies -- won a contract to build a 1,005-mile oil pipeline in order to exploit the vast Turkmenistan natural gas fields in Duletabad. The pipeline would extend through Afghanistan and Pakistan, terminating in Multan, near the India border.
Multan was also the end point for another proposed pipeline, this one from Iran. This project never left the drawing boards, however; the pipeline would be much longer (over 1,600 miles) and more expensive. Still, this route was being seriously considered as of early 2001, and it increased the odds that gas would be flowing into Multan from somewhere.
Unocal wasn't the only energy company laying pipe. In 1997, Enron announced that it was going to spend over $1 billion building and improving the lines between the Dabhol plant and India's network of gas pipelines.
Follow the map: Once a proposed 400-mile extension from Multan, Pakistan to New Delhi, India was built, Caspian Sea gas could flow into India's network to New Delhi, follow the route to Bombay -- and bingo! A plentiful source of ultra-cheap LNG that could supply Enron's plant in India for three decades or more.
Besides the route to Multan, another proposed spur of the pipeline would have ended on the Pakistan coast, where an estimated one million barrels of LNG per day could be shipped to Japan and Korea, the largest consumers of LNG in the world. For Enron, there was an upside here as well. Entering the South Eastern Asian markets, which offered vast growth potential, could position Enron well in the global marketplace and offset some of their losses in other markets.
There was one gotcha: It looked like the trans-Afghan section of the pipeline might never be built. Afghanistan was controlled by religious extremists who didn't want to cooperate.
Enter the Taliban.
From 1997 to as late as August 2001, the U.S. government continued to negotiate with the Taliban, trying to find a stabilizing factor that would allow American oil ventures to proceed with this project without interference. To this end, in December 1997, Unocal invited the Taliban contingency to Texas to negotiate protection while the pipeline was under construction. At the end of their stay, the Afghan visitors were invited to Washington to meet with the government officials of the Clinton Administration.
But in August, 1998, terrorists linked to Osama bin Laden bombed two U.S. embassies in East Africa. After a few cruise missiles were fired into Afghanistan and the Pentagon boasted that we had disabled bin Laden's "terrorist network," Unocal said they were abandoning plans for a route through the country. But was such a potentially lucrative deal really dead?
Not hardly. Although Unocal had the largest share, the "Central Asian Gas Pipeline" (CentGas) consortium had six other partners, including companies in Saudi Arabia's Delta Oil Company -- the next largest shareholder with 15 percent -- and groups in Japan, Korea, Indonesia, Pakistan, and Turkmenistan. They vowed to continue the project, and had strong national interests in seeing the Afghanistan pipeline built.
The U.S. looked for other options, and the Trade and Development Agency commissioned a feasibility study for an improbable east- to- west route that would cross the Caspian Mountains and end at a Mediterranean seaport in Turkey. The company hired for that study was Enron. If that pipeline were to be constructed, Turkmenistan signed an agreement that it would be built by Bechtel and GE Capital Services -- the same American companies that were Enron's business partners in the Dabhol power plant.
No matter which direction the Central Asia natural gas would eventually flow, Enron would profit. Should it go south towards ships waiting on the Pakistan coast, it would be still only a few hundred miles at sea to Dabhol. The trip from the Mediterranean would be farther (and thus more expensive for Enron to buy gas), but it was also the least likely route to be constructed. Estimated costs were almost $1 billion more than the route through Afghanistan, and engineering plans had not even started. No, the only practical route for the Caspian Sea gas was through Afghanistan and Pakistan to the border of India. All that was lacking was the political will to make it happen.
How Deeply Were Bush and Cheney Involved?
Was the Bush White House negotiating with the Taliban to help Kenneth Lay and Enron? Were Cabinet members and the National Security Council running a "war room" to save the company that was the closest friend of the president and vice president?
As of this writing in February 2002, little is really known. But if the White House, Enron, and Dabhol timelines are combined, curious details appear. Read the timeline here.
Enter George W. Bush.
Bush's long and personal relationship with Enron's former CEO Kenneth Lay is now well known, as is his generous contribution of over $600,000 to advance the political career of the man who now holds the White House. Not so well known is how Bush has helped Enron.
In 1988, Bush allegedly called Argentina's Minister of Public Works to pressure him into awarding Enron a $300 million contract shortly after his father won the presidency. Rodolfo Terragno recalled that the younger George Bush said that giving Enron the project "would be very favorable for Argentina and its relations with the United States." Terragno didn't know whether this message was from the White House or whether Bush was working a business deal on his own.
(Although unlikely, it is possible that Terragno was called by brother Neil Bush, who would later seek an oil drilling deal in Argentina. The Bush Sr. campaign denied that George W. made the call. This was, however, the time period when Lay began to cultivate his friendship with George W. and there is no known association between Neil Bush and Lay. That two Bush brothers are suspects, however, speaks to the levels of power that this family wields.)
By the time George W. became president, the India project was in serious trouble. Enron's reputation as a bully in India was legion. The Human Rights Watch released a report that indicated human rights violations had occurred as a result of opposition to the Dabhol Power project. Beginning in late 1996 and continuing throughout 1997, leading Indian environmental activists and employee organizations organized to oppose the project and, as a direct result of their opposition were not paid and subjected to repeated short-term detention. One ghastly report actually states that police stormed the homes of several women in western India who had led a massive protest against Enron's new natural-gas plant near their fishing village. According to Amnesty International, the women were dragged from their homes and beaten by officers paid by Enron.
The crisis came just a few months after the Bush inauguration. Contractors walked off the job, saying they hadn't been paid for over a month. The [India state of] Maharashtra Electricity Board stopped paying for Dabhol's power in May 2001, saying it was too expensive. Enron counter-charged that the Board owed them $64 million. The plant was closed, although it is said to be 97 percent complete. All that was missing was a source for cheap, cheap, natural gas.
Enter Dick Cheney.
Scarcely a month after Bush moves into the White House, Vice President Cheney has his first secret meeting with Ken Lay and other Enron executives on February 22, 2001. Other meetings follow on March 7 and April 17. It is the details of these meetings that the Bush Administration is seeking to keep private.
It's clear the Cheney had his own conflicts of interest with Enron. A chief benefactor in the trans-Caspian pipeline deal would have been Halliburton, the huge oil pipeline construction firm which was previously headed by Cheney. After Cheney's selection as Bush's Vice Presidential candidate, Halliburton also contributed a huge amount of cash into the Bush-Cheney campaign coffers.
So the obvious question: Did Enron lobby Cheney for help in India? It has already been documented that the Vice President's energy task force changed a draft energy proposal to include a provision to boost oil and natural gas production in India in February of last year. The amendment was so narrow that it apparently was targeted only to help Enron's Dabhol plant in India. Later, Cheney stepped in to try to help Enron collect its $64 million debt during a June 27 meeting with India's opposition leader Sonia Gandhi. But behind the scenes, much more was cooking.
A series of e-mail memos obtained by the Washington Post and NY Daily News in January revealed that the National Security Council led a "Dabhol Working Group" composed of officials from various Cabinet departments during the summer of 2001. The memos suggest that the Bush Administration was running exactly the sort of "war room" that was a favorite subject of ridicule by Republicans during the Clinton years.
The Working Group prepared "talking points" for both Cheney and Bush and recommended that the need to "broaden the advocacy" of settling the Enron debt. Every development was closely monitored: "Good news" a NSC staff member wrote in a e-mail memo: "The Veep mentioned Enron in his meeting with Sonia Gandhi." The Post commented that the NSC went so far that it "acted as a sort of concierge service for Enron Chairman Kenneth L. Lay and India's national security adviser, Brajesh Mishra" in trying to arrange a dinner meeting between the Indian official and Lay.
While lobbying India, it appears that the Bush Administration was also raising the heat on the Taliban to allow the pipeline.
The book "Bin Laden: the Forbidden Truth" by Jean-Charles Brisard and Guillaume Dasique claims that the U.S. tried to negotiate the pipeline deal with the Taliban as late as August, 2001. According to the authors, the Bush Administration attempted to get the Taliban on board and believed they could depend upon the regime to stabilize the country while the pipeline construction was underway. Bush had already indirectly given the Taliban $43 million for their supposed efforts to stamp out opium-poppy cultivation. Was this an award -- or a bribe? The circumstances make this a valid question.
Enron was unraveling at the seams, yet in early August, Kenneth Lay seemed optimistic, even exuberant. Was he whistling past the graveyard, or did he have secret information? The last meeting between U.S. and Taliban representatives took place five weeks before the attacks on New York and Washington; on that occasion, Christina Rocca, in charge of Central Asian affairs for the U.S. government, met the Taliban ambassador to Pakistan in Islamabad on August 2, 2001. Rocca said the Taliban representative, Mr. Zaeef, was aware of the strong U.S. commitment to help the Afghan people and the fact that the United States had provided $132 million in relief assistance so far that year.
Lay's last documented e-mail was sent on August 27th, about the same time the Taliban allowed the International Red Cross to visit jailed foreign aid workers in Afghanistan. In it, Lay waxes optimistic about the strength and stability of his company, and exhorts his employees to buy into the company's stock program. Was Kenneth Lay anticipating a new pipeline deal, and an Enron contract, courtesy of George W. Bush? If a deal was at hand, he had every reason to be optimistic about the future.
Even though the trans-Caspian pipeline and the extension into India would be years from completion, Enron's conceit of working above the law was ultimately the guiding beacon in all of its transactions. They had played the game of subterfuge for so long, they were near experts at covering their tracks. Even if Lay knew at this point that bankruptcy was imminent, Enron had always survived major hurdles in the past, right? The possibility of a total meltdown was most likely not even a consideration -- there could always be an 11th hour federal bailout.
However, from all records, relationships became strained. The Taliban had demanded that the U.S. should also reconstruct Afghanistan's infrastructure and that the pipeline be open for local consumption. Instead, the U.S. wanted a closed pipeline pumping gas for export only and was not interested in helping to rebuild the country.
In turn, the U.S. threatened the Taliban during the negotiations. The directive of "we'll either carpet you in gold or carpet you in bombs" was bantered about in the press to underscore the emerging willfulness of the U.S.
But sometime in late August, apparently the whole deal went sour.
Enron had one last card to play, and that was selling the Dabhol plant for quick cash -- if it could. If Enron could get its asking price of $2.3 billion, then maybe the company could pull out of its bankruptcy nose dive.
In late August, Lay appeared to threaten India in an article in the London Financial Times. We expect full price for the plant, he warned; if they received anything less, there could be backlash: "There are laws that could prevent the U.S. government from providing any aid or assistance to India going forward if, in fact, they expropriate property of U.S. companies," he said. When Indian officials called these statements "strong arm tactics," an Enron statement claimed Lay "was merely referring to U.S. laws." Again Lay appeared to threaten India in a Sept. 14 letter to the Prime Minister, insisting that the $2.3 billion price was reasonable because they had a "legal claim" of up to $5 billion.
But the house of cards collapsed dramatically on November 8, when Enron disclosed that it had overstated earnings dating back to 1997 by almost $600 million. That same day, an e-mail ("Importance: High"), whose sender and recipient are blacked out, warned, "President Bush cannot talk about Dabhol as was already mentioned." The memo also said that Bush economic adviser Lawrence Lindsey could not discuss Enron either. Lindsey had been an Enron consultant.
The end came in December 2001, as Enron fired the 300 remaining workers at the plant. Enron also filed a $200 million claim with the U.S. government's Overseas Private Investment Corporation, a U.S. taxpayer- funded insurance fund for American companies abroad, in an attempt to recoup losses from the Dabhol Power Corporation.
On the last day of the year, President Bush appointed Zalmay Khalilzad as his special envoy to Afghanistan. Khalilzad is a former Unocal consultant, whose positions on Afghanistan changed in sync with Unocal's own. When it looked like the pipeline would be built in 1996, Khalilzad advocated that the U.S. should work with moderate elements in the Taliban. By 2000 Unocal was out of the project, and Khalilzad was writing that the U.S. must undermine the Taliban.
It's clear that once again the Great Game is afoot, now that the Taliban are gone. Today, Khalilzad is the Special Assistant to the President and National Security Council member responsible for setting up the post-Taliban "Pro-Unocal" regime in Afghanistan. International oil men euphemistically call the project the new "Silk Road." On Feb. 8, Afghanistan's interim leader Hamid Karzai and Pakistan's president agreed to revive plans for a trans-Afghanistan route for Iranian gas. The next day, Turkmenistan chimed in that they hoped their trans- Afghanistan route would be soon built. It's all but certain that gas from somewhere will reach Multan -- and the Dabhol plant beyond.
For investors, Dabhol should be a bitter lesson. Enron was a company known for its hubris that tried to accomplish too much, too quickly, playing too fast and loose with financial realities. In the end, Enron found that its far-reaching global clout could no longer circumvent the rules of basic economics -- nor could it count on the players they helped bring into power.
Until there is a full investigation, questions will remain about how far the Bush team went to try to save their buddies at Enron. Vice President Dick Cheney's refusal to release details about his private April meeting with Lay is suspicious. It is already known that Cheney accepted seven out of eight national energy policy recommendations made by Lay; so what are they so damned determined to keep secret? What could be more incriminating than that?
On Feb. 22, the GAO sued Cheney, who has stated that the White House will go to court to fight the release of the documents. (However, John W. Dean, former Nixon staffer and Watergate witness, is quick to point out that executive privilege is unique to the president, not the vice president.) With recent discovery that a highest-level "Dabhol Working Group" was set up in the Bush Administration, it appears that there is much more to be uncovered.
Is the White House covering up that it was molding foreign policy as well as energy policy to suit Enron? Did the Bush Administration know that Enron's collapse was coming as early as August? If any of these is true, the largest bankruptcy in American history may well connect with the greatest political scandal in American history.
Ron Callari is a freelancer writer. This article originally appeared in the Albion Monitor.
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