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Unaddressed Conflicts
of Interest Link to 9-11
THE ELEPHANT IN THE
LIVING ROOM - PART I
Grand Juries in New
York and Washington
Expose
Major Ashcroft Conflicts of Interest
Cheney's Task Force
Met with Targets of Grand Jury Probes -- Cheney Connected
to Investigations -- Served on Kazakh State Oil Board When
Reported Bribes Took Place
by Michael C. Ruppert
© Copyright 2002,
From The Wilderness Publications, www.copvcia.com.All Rights Reserved.
May be reposted or distributed for non-profit purposes
only.
March
30, 2002, 10:00 AM PST (FTW) -- Attorney General John
Ashcroft’s
prompt and public recusal from the Enron investigation because
of a conflict of interest arising from Enron’s donations
to his 2000 Senate race has not been matched by a similar
recusal in the case of federal grand juries in New York
and Washington investigating two additional Ashcroft donors,
ExxonMobil and BP Amoco. This, even though ExxonMobil gave
more money to Ashcroft’s campaign than Enron did.
A source familiar
with the grand jury investigations, who spoke on condition
of anonymity, told FTW that both grand juries
are still active. The source also said Ashcroft has quietly
moved, in the wake of last December’s departure of
Southern New York’s U.S. Attorney, Mary Jo White, to
exert control over the New York grand jury from Washington
and to exercise "unusual" influence over the
Washington investigations. FTW has also received
multiple reports that several high-ranking career prosecutors
in
both New York and Washington have raised serious objections
to Ashcroft’s actions and his failure to publicly
recuse himself in these cases.
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Federal Grand
Jury Rules, Procedure
by Joe Taglieri,
FTW staff
March 26, 2002, 10:00 AM PST (FTW) --
The oft-maligned federal grand jury system dates back
to feudal England and was incorporated by the founding
fathers into the Fourth and Fifth amendments to the
U.S. Constitution. Today, the grand jury is the first
step in all federal criminal proceedings.
The grand jury's
main function "is
to review the evidence presented by the prosecutor
and determine whether there is probable cause to
return an indictment," according to the American
Bar Association. Indictments are made on the basis
of
"probable cause," which basically means
the grand jury is there to determine that the charges
against a "target" are valid.
Ostensibly, the
grand jury serves as a check on the prosecutor's
power to file charges,
but some in the legal profession claim that today,
grand juries have "become captive to the unrestrained
power of prosecutors," says the National Association
of Criminal Defense Lawyers (NACDL).
"There's a saying that goes, -you
can get a grand jury to indict a ham sandwich,-" Washington,
D.C.-based attorney John Clarke told FTW in
a phone interview. "That saying
is a reflection of the prosecutorÕs power, should
he or she decide to exercise it. And there are various
ways to abuse
that power. Federal prosecutors don't always tell
the jurors what their options are and dismiss them."
The Department of Justice would not
return calls for comment on criticism of the grand
jury system.
Grand juries,
which conduct their proceedings in secret, are
comprised of 14 to 23 people, who
reside
in the court district where the case in question
was filed. Jurors' names and addresses primarily
come from national voter rolls, motor vehicle license
lists,
and public utilities lists. There is no "juror
selection" process. Federal grand jurors are
not screened for biases relating to the case in
question.
"Rule 6(e) of the Federal Rules
of Criminal Procedure provides that the prosecutor,
grand jurors, and the grand jury stenographer are
prohibited from disclosing what happened before the
grand jury, unless ordered to do so in a judicial
proceeding," states the American Bar Association.
"Secrecy was originally designed to protect
the grand jurors from improper pressures. The modern
justifications
are to prevent the escape of people whose indictment
may be contemplated, to ensure that the grand jury
is free to deliberate without outside pressure, to
prevent subornation of perjury or witness tampering
prior to a subsequent trial, to encourage people
with
information about a crime to speak freely, and to
protect the innocent accused from disclosure of the
fact that he or she was under investigation."
Witnesses are the only participants
in a grand jury proceeding who are allowed to disclose
whatever they wish to whoever they wish, says the
Bar Association. When a witness testifies before the
grand jury, however, he or she is not permitted to
have his or her lawyer present inside the jury room.
Juries usually
sit for a month. But in special situations, such
as those involving in-depth
law enforcement investigations, "long term" grand
juries can sit anywhere from six months to three
years. In more complicated cases an expired grand
jury can be immediately renewed for another term.
Other grand jury
participants usually referred to as "targets," may, at the
end of a jury's investigation, be labeled an "unindicted
co-conspirator." This happens if "the
grand jury does not have enough information to
indict someone
but either knows of their identities and suspects
they were involved in the conspiracy, or, does
not
know them specifically, but knows others had to be
involved in the conspiracy," said University
of Dayton law professor Susan Brenner. "For
example, in a large scale drug operation the
grand jury may
not know the specific identities of all the peripheral
participants, but knows they were involved."
A grand jury
may also choose not to indict someone if, after
returning one or more indictments,
it is still investigating criminal activity involving
the charged indictment, Brenner said. "If someone
finds out they are the subject or target of a grand
jury investigation through an indictment, they may
flee the country, or try to influence witnesses, or
otherwise obstruct justice," said Brenner.
A grand jury
also might not want to indict someone at the time
of inquest but may want
make clear an individual's involvement in its investigation. "As with speculation, perhaps, that President
Nixon was not indicted in Watergate because the
grand
jury and prosecutors might have thought it not a
good idea, for various reasons, to indict a sitting
President," said Brenner.
Sometimes, indictments
are kept sealed. A federal judge makes this decision,
typically to
prevent flight by one of the named parties or to
protect an ongoing investigation.
The only people allowed inside the grand
jury room during proceedings are jurors, prosecutors,
one witness at a time, and a court stenographer. Judges
play no role other than to rule on motions to quash
grand jury subpoenas and decide on whether to seal
an indictment.
Grand juries are supervised primarily
by the U.S. attorneys assigned to prosecute a case
in a given federal court district. The attorney general
can by law intercede, and even appoint him or herself
prosecutor, according to Brenner, but this is a rare
occurrence.
"It would be unusual because that
is not what the attorney general does," she said.
"The attorney general is an administrative officer.
He or she runs the Department of Justice, setting
policy, seeing that things get done, dealing with
contingencies like 9-11.
"It would seem odd for the AG,
who has so much else to deal with on a meta-scale,
to handle a specific investigation, which is, in a
sense, on the micro-scale," Brenner continued.
"As an analogy, it would be odd, would it not,
for the president of Ford Motor Co. to go handle
the
assembly of an SUV on the line? The president of
Ford certainly is qualified and legally enabled to
do that,
but why?
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Channing
Phillips, speaking for the U.S. Attorney’s office
in Washington, D.C. told FTW, "I checked with [Assistant U.S. Attorney]
Wendy Wysong and she confirmed that the investigation is
still ongoing. There are three aspects to these investigations:
one in New York, one in Washington [at the U.S. Attorney’s
office] and one at main Justice [DoJ headquarters]. If
the
attorney general had recused himself, we would know about
it, and we are not aware of any such development."
Marvin
Smilon, a spokesman for the U.S. Attorney’s office
in New York told FTW, "The department has a firm
policy where we can’t comment on grand jury investigations."
While federal
rules of criminal procedure specifically prohibit the disclosure
of the investigative activities of grand juries, they do
not prohibit government officials from discussing matters
of public interest concerning the progress or existence
of grand juries, especially in cases where potential conflicts
of interest arise. As a number of attorneys contacted for
this story indicated, there are times when a Justice Department
official would have a need, or even a duty, to inform the
public of issues which indicate that the government is protecting
the public interest.
Similar moves
by Ashcroft, which deviate from established procedures,
have occurred since Sept. 11. An Oct. 11 New York Times story
by Benjamin Weiser and William Rashbaum was headlined, "Justice Dept. Takeover of Terror Prosecutions Frustrates
U.S. Attorney." Its lead sentence stated, "The
decision to shift authority over potential criminal prosecutions
stemming from the Sept. 11 terror attacks from New York
to Washington has upset and frustrated law enforcement officials
who have investigated Osama bin Laden for nearly a decade."
White’s authority, in spite of eight years of successful
terror prosecutions, was thus transferred to Washington,
in spite of the fact that her office had coordinated a Joint
Terrorist Task Force "that had won convictions of more
than two dozen terrorists in five major trials." Her
office had also secured the cooperation of two former bin
Laden aides and already had under indictment 15 of the
22
most wanted terror suspects, as identified by the White
House on Oct. 10.
Ashcroft’s
decision in this case had an impact on the grand jury
process.
According to the Times, "Officials in Washington have
not said where grand juries investigating the attacks will
sit, or where the indictments may eventually be brought." White,
a Clinton appointee, resigned as U.S. attorney in New York
in December and has not responded to a request
for an interview for this story.
THE ALLEGATIONS
The
two grand juries have been investigating allegations
that ExxonMobil,
the world’s largest corporation, and BP Amoco paid
cash bribes to the president of Kazakhstan, Nursultan Nazarbayev,
and his oil minister, Nurlan Balgymbayev, and that Mobil
engaged in an illegal oil swap of Kazakh oil through Iran
in 1997. Vice President Dick Cheney’s energy task force
-- now the center of a constitutional battle over the release
of its records -- was meeting representatives of both companies
after the grand juries had been empanelled as a result of
information received from a Middle Eastern source in 1997
and inquiries from Swiss banks in 1999. The fact that these
known targets of criminal investigations had access to the
vice president’s energy task force would be comparable
to having allowed Manuel Noriega, while under indictment
for drug smuggling, to consult in the war on drugs.
At
issue is a 25 percent stake purchased by Mobil in Kazakhstan’s
Tengiz oil field, following an earlier purchase of
50 percent
by Chevron and an apparently desperate attempt a year later
to start making money from the fields by engaging in
an
illegal swap with Iran as a means of getting the Tengiz
oil to market. Until Sept. 11, there was only one obstacle
preventing the oil companies and their related industries
from building the necessary pipelines, immune from
Russian
influence, which would have turned the Central Asian oil
into dollars -- the Taliban.
American
companies with unrequited heavy investments in the
region’s oil
fields included ExxonMobil, ChevronTexaco, BP-Amoco, Phillips,
Total/Fina/ELF, Unocal, Halliburton and Enron. Enron’s
investment alone, as reported by the Albion Monitor, exceeded
$3 billion in a power generating station in Dabhol, India
that was floundering in red ink because Enron could not
access inexpensive natural gas via a proposed trans-Afghani
pipeline from Turkmenistan. Enron also had contracts to
conduct feasibility studies for the construction of pipelines
throughout the region.
ExxonMobil’s
role in the bribery and illegal oil swap, as well as
the
ensuing federal investigations, was comprehensively documented
in a July New Yorker article entitled "The Price of
Oil" by the venerable Seymour Hersh. Allegations being
investigated by the New York grand jury involve felony
violations
(bribery) of the Foreign Corrupt Practices Act. The Washington,
D.C. grand jury is investigating evidence that links Mobil
to an illegal 1997 swap of Kazakh oil through Iran, which
would constitute a felony violation of the 1996 Iran Trade
Sanctions Act.
Possible
penalties in the event of criminal convictions include "disgorgement"
of any assets obtained as a result of the criminal actions.
That would mean that two of the largest oil companies in
the U.S. could lose billions of dollars in cash already
paid into the region over a decade and forfeit their rights
to profits from selling oil produced there. This possible
outcome was surely not lost on Dick Cheney’s energy
task force, which concluded its work last May.
An intransigent
President Bush announced on March 13 that he would not release
records revealing who the task force met with or what was
discussed, in spite of a Feb. 27 court order signed by District
Court Judge Gladys Kessler directing the Department of Energy
to release the records.
However,
it is clear that Kazakhstan-related issues were discussed
behind
Cheney’s closed doors. In an analysis of the final
report of the vice president’s energy task force,
released in May, The Washington Times on July
20 wrote, "While
saying private investors must lead the way, the Cheney report
devotes considerable time to the Kazakh market, urging U.S.
government agencies to ‘deepen their commercial dialogue’ with
Kazakhstan."
What is unknown
at this moment is whether Ashcroft attended any meetings
with the task force, or whether he discussed the status
of the grand jury investigations while doing so.
ASHCROFT’S
BIGGEST CONFLICT
ExxonMobil
was the single largest oil and gas contributor to Ashcroft’s
2000 Senate race, donating $11,650 -- $4,140 more than Enron
-- as disclosed by documents obtained from the Center for
Responsive Politics. Other oil industry donors to Ashcroft’s
campaign which are heavily invested in Kazakhstan, or which
represent firms that are, include Chevron ($7,500), Enron
($7,499), The Independent Petroleum Association of America
($5,000), BP-Amoco ($4,000) and Halliburton ($3,500).
Thus,
the total reported corporate donations to Ashcroft’s campaign,
from firms with known vested interests in opening Kazakh
oil fields, totals $39,149. Taken together, these contributions
(which exclude soft money donations reported only to the
Republican Senatorial Committee) would rank these contributions
second only to Enterprise Rent-a-Car as Ashcroft’s
biggest 2000 contributor.
Within days of
being publicly questioned by Rep. Henry Waxman, (D, Calif.),
Ashcroft held a public press conference announcing that
he would recuse himself from any part of the Enron investigations
being conducted by the Justice Department. It now becomes
both a fair and a glaringly obvious question as to why he
has not done so with respect to the grand juries.
Some
six months after the 9-11 attacks, and with a wealth
of stories documenting
oil interests in the region, the grand juries could expose
the motives behind U.S. government July warnings to
the
Taliban, well documented in a number of European papers, "we
will either bury you in a carpet of gold or we will bury
you in a carpet of bombs starting in October [2001]."
After repeated
requests for comment about whether Ashcroft had recused
himself from these investigations, Dana Perino, a spokeswoman
for the Department of Justice and Ashcroft told FTW, "We
cannot comment or discuss anything about whether there even
is a grand jury, so we are not going to answer any questions
or make any comment." When advised by this writer that
federal rules of criminal procedure did not prevent the
attorney general from disclosing the status of the grand
jury or his potential conflict of interest, Perino stated,
"This is what my management told me to say. I’ll
take your comment back to them one more time and call you
back if they say anything else."
As of press time
no additional calls had been received.
THE TIGER
IN THE TASK FORCE
A March 1 New
York Times story by Don Van Natta reported, "ExxonMobil,
the second-largest energy donor in the Republican Party,
confirmed today that its executives met with Mr. Cheney.
It was among the handful of companies that had declined
to comment earlier this week about whether its executives
had met with Mr. Cheney or members of the task force,
although
it did say that its interests were represented by the American
Petroleum Institute, a trade council.
"In
an interview today, company officials confirmed that
ExxonMobil chief
executive, Lee Raymond, met with Mr. Cheney for 30 minutes
on Feb. 8, 2001. ExxonMobil officials also met with
task
force staff members for 45 minutes on Feb. 14 and made
a presentation about future energy supply and demand,
the
company disclosed. The company said that on the same day,
executives made a similar presentation to the General
Accounting
Office and to staff members of both political parties on
the House and Senate Energy Committees. "
A Dec. 17, 2000
story by David Johnston of the New York Times stating
that none of the companies connected to the alleged bribery
(including
ExxonMobil, BP Amoco and Phillips Petroleum) appeared to
be focuses of the New York grand jury has been flatly contradicted
by Hersh, who reported extensive negotiations and payments
by Mobil in 1995-96 after direct negotiations between Mobil
and Kazakh President Nazarbayev. In fact, Hersh investigated
the suspicious activities of now retired Mobil Vice President
Bryan Williams and intelligence-connected American businessman
James Giffen, both of whom have been directly tied to the
bribery and the Iranian oil swap. Giffen has been reported
in a number of stories to be Nazarbayev’s "gatekeeper"
for anyone wishing to do business in Kazakhstan. Hersh documented
direct payments to Giffen’s company, the Mercator
Corporation, from Mobil.
Additionally,
Hersh wrote, "Mobil participants in the Tengiz
negotiations worried constantly about the possibility
of payments going
astray. [Mobil exec] Don Voelte told me that the company
was concerned that the purchase payments it was sending
the Kazakh government via Swiss banks might be diverted
for personal use by the Kazakh leaders."
The
Hersh piece makes it clear that Mobil’s involvement in the bribery
and the Iranian oil swap was much deeper and more involved
than this disingenuous statement suggests. "Kazakhstan…[has]
become notorious for exploitation, corruption and seemingly
bottomless fields of oil whose bounty seldom benefits the
average citizen."
"The country
has not prospered under [President Nursultan] Nazarbayev
[‘s] rule. Social conditions have deteriorated steadily;
per capita GNP is just $1,300 dollars a year," Hersh
wrote. "A fifth of the country’s total money supply
is now stashed in Swiss banks…A Mobil employee who
took part in [Mobil’s negotiations with Kazakhstan]
in Nassau said that the Kazakhs made a series of extraordinary
demands, seeking among other things, a new Gulfstream jet
aircraft for Nazarbayev, funds for tennis courts at his
home, and four trucks with Satellite dishes to be used by
his daughter’s televisions network."
In
a July 5 article posted by the International Eurasian
Institute for Economic
and Political Research, the Kazakhstan 21st Century Foundation
reported, "Nazarbayev is so worried about the
investigations, which he considers politically motivated,
that he got his
puppet parliament to pass a law granting him lifetime immunity
from any legal liability stemming from his actions
in office,
and another law that appears to legalize money laundering."
What is clear,
according to Hersh and other sources, is that as much as
half of the $1 billion paid by Mobil never made it into
the Kazakh treasury.
BP-AMOCO EXPOSED
The
oil giant formed by the December 1998 merger of British
Petroleum
and Amoco was made even larger by the April 1999 merger
of BP-Amoco with the American oil giant, Arco. It too
is
at least a target of the investigations into Kazakh dirty
dealings. Johnston’s New York Times story
discussed the Department of Justice’s criminal
investigations:
"According
to a formal request filed under a treaty between the United
States and Switzerland, the Justice Department says that
on March 19, 1997, Amoco Kazakhstan Petroleum, one of the
companies involved in the big offshore project in the Caspian
Sea, transferred $61 million from Banker’s Trust in
New York in two payments to account 1215320 at Credit Agricole
Indosuez, a bank in Geneva. (The Amoco unit is now part
of BP)," wrote Johnston. "…Three days later,
the document says, Mr. Giffen and Kazakh officials began
a series of what the United States government says were
illegal transfers from the Kazakh treasury accounts into
private accounts benefiting several Kazakh leaders."
Johnston’s
account went on to describe how money was transferred out
of these accounts into accounts that "benefited" Giffen
and were allegedly used to disburse money into private
accounts held or controlled by either Nazarbayev or Balgymbayev,
his oil minister. By the time Hersh wrote his story, almost
seven months later, the known total amount of payments
from
ExxonMobil and other companies exceeded $1 billion, and
documentation was beginning to show that much of it had
been diverted into the private pockets of Kazakh public
officials.
In a March 1
story, New York Times writers Don Van Natta, Jr.
and Neela Banerjee reported on 18 corporations that were
heavy Republican
donors, which got in to Cheney’s task force. "The
companies include the Enron Corporation, the Southern Company,
the Exelon Corporation, BP, the TXU Corporation, FirstEnergy,
and Andarko Petroleum."
OIL: A NATIONAL
SECURITY INTEREST
The impending
economic crash for the U.S. oil industry, and all of its
downstream economic vassals, reached a crisis between 1996
and 2001 as the intransigence of the Taliban threatened
to create an implosion within an industry that owned oil
but could not get it to market. The crisis was so severe
that the National Security Council (NSC) got involved. Oil
had become a national security matter of the highest priority.
Both the Washington
Post and the New York Daily News (as
reported by the Albion Monitor on Feb. 28) obtained
a series of emails showing
that the NSC led a "’Dabhol Working Group’
composed of officials from various cabinet departments during
the summer of 2001…The Working Group prepared ‘talking
points’ for both Cheney and Bush…"
Hersh,
in "The
Price of Oil," also documented a series of 1996 NSC
meetings and discussions about Mobil’s pending illegal
oil swap. Although his reporting indicates that Giffen
and
Mobil VP Bryan Williams, who met with NSC staff, were warned
that such a swap was illegal, and that the NSC sent warnings
to other Mobil executives, the swap went ahead anyway.
This,
after Hersh quoted a government official as saying that
Giffen had said that Mobil was smart and that it would
do
it through a European trader.
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"We
must come to recognition, personally and culturally, that
corruption is not just a violation of the law, not just
an economic disadvantage, and not merely a political problem,
but that it is morally wrong.…It is now widely recognized
that the consequences of corruption can be devastating:
devastating to economies, devastating to the poor, devastating
to the legitimacy and stability of government and devastating
to the moral fabric of society." -- John Ashcroft,
The Hague, May 2001
Thanks to the
Kazakhstan 21st Century Foundation for publishing the above
quote.
--Joe Taglieri,
FTW Staff, contributed to this story.
COMING
IN PART II - During the years when these alleged crimes
took place, Vice President Dick Cheney, then the CEO of
oil services giant Halliburton, was a sitting member of
the Kazakh government’s oil advisory board. What did
Cheney know? When did he know it?
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