Washington Post Exposes US Officials as Azeri Oil Lobbyists

WASHINGTON–A front page article in the Monday edition of the Washington Post spotlighted an impressive list of former US Government officials "bent at winning a stake in the [Caspian oil] bonanza for themselves or their companies" by lobbying for Azerbaijani interests.

The in-depth report comes just weeks before the first official White House visit by former KGB chief–Soviet Politburo member–and current president of Azerbaijan–Gaidar Aliyev.

The Post article also highlights the efforts of the Armenian National Committee of America in protesting Aliyev’s scheduled visit. Below is the full text of the Washington Post article. Ex-Top Aides Seek Caspian Gusher

By David B. Ottaway and Dan Morgan–

Washington Post Staff Writers The last great oil rush of the 20th century-targeted at a potential $4 trillion patch in Central Asia’s Caspian Sea region-has lured a prestigious group of US prospectors: former high-ranking government officials bent on winning a stake in the bonanza for themselves or their companies.

These men come from different parties and different past administrations–but they are working together for policy changes that they say are needed to put US companies on an equal footing with foreign competitors in Azerbaijan–a small nation that is at the center of a vast untapped oil basin. Involved in this effort are two former national security advisers–Brent Scowcroft and Zbigniew Brzezinski; former White House chief of staff John N. Sununu; Defense Secretary Richard C. Cheney and Secretary of State James A. Baker III from the Bush administration; and President Clinton’s former treasury secretary–Lloyd Bentsen.

The involvement of these heavyweights has escalated an intense lobbying and public relations campaign in Washington. American oil companies hope to ease restrictions on US aid to Azerbaijan–allowing them to secure US government-backed loans and financial assistance as they tap into fields believed to hold as much as 200 billion barrels–more oil than any region outside the Persian Gulf. The restrictions were passed by Congress in 1992–to protest an Azeri blockade of its fellow former Soviet Republic–Armenia.

American oil company executives say Azerbaijan officials have hinted that as long as official US policy continues to regard the country as something of a pariah–they might favor Norwegian–British–Russian–French and Iranian oil companies in granting the next batch of drilling concessions–which will cover the largest reserves of gas and petroleum.

US oil companies and other potential investors also contend that without US government-backed loans and other support now forbidden under restrictions imposed by Congress–non-US oil companies backed by their home governmen’s will have an advantage.

For many of these old Cold Warriors–the Caspian oil boom has provided a unique opportunity to help a former Soviet republic buttress its independence from Russia while also taking advantage of a business opportunity.

Scowcroft–for example–was paid $100,000 in 1996 by Pennzoil Co. for "consulting on special international projects," according to the firm’s latest annual report. The former Bush adviser also earned a $30,000 director’s fee from the company–which is a partner in the Azerbaijan International Operating Company (AIOC)–the main foreign oil consortium in Azerbaijan.

Scowcroft confirmed in an interview that he advises Pennzoil on its Caspian project but said his interest in the region stems from larger concerns than his Pennzoil affiliation.

"I’m a big booster of Azerbaijan because the United States has big interests out there," he said. "That’s a huge pool of oil. It’s time we woke up."

AIOC–in which American firms have a 40 percent stake–is a client of the law firm of Baker–while Cheney is chairman of Halliburton Inc.–an oil services firm operating in the Caspian fields.

Sununu’s management consulting firm–JHS Associates–is expected to sign a major contract with the Azeri government during a US visit next month by President Gaidar Aliyev–according to Azeri sources. At a gala dinner here for visiting Azeri Prime Minister Artur Rasizade in May–several hundred US. businessmen’savored Caspian caviar and rubbed shoulders with Azeri visitors. Featured speaker Sununu–just back from the Azerbaijan capital of Baku–flattered the dignitary and expounded on Azerbaijan’s strategic importance.

At a reception the next night–Bentsen likened Azerbaijan’s struggle for independence to that of his home state of Texas–and beamed as an oil executive presented the prime minister with a pair of shiny Texas cowboy boots. Bentsen is a shareholder in Frontera Resources–an oil services company working in Azerbaijan. Frontera is chaired by fellow Texan William H. White–a former Clinton deputy secretary of energy.

Brzezinski is a consultant to Amoco–another AIOC partner promoting Azerbaijan’s cause in Washington. An Amoco spokesman confirmed that Brzezinski advises the firm on Caspian oil matters but declined to disclose his fee.

Along with those Washington powers–an assortment of only slightly lower-ranking former officials have descended on the Baku oil frontier. They include former representative Charles Wilson (D-Tex.)–who is working with an energy developer–and former assistant secretary of defense Richard L. Armitage–whose consulting firm is helping US. companies in the region. Adding a sense of intrigue–former Maj. Gen. Richard Secord–chief covert operative for Oliver L. North in the Iran-contra scandal–reportedly has been sighted in Baku.

None of the former officials is a registered lobbyist for Azerbaijan. Some have testified in Congress or spoken at conferences to promote an activist US policy there. Most are members of the US-Azerbaijan Chamber of Commerce–the most forceful advocate in Washington for US investment there.

Their presence has added a political and economic dimension to an annual battle in Congress between supporters of Azerbaijan and backers of its rival–neighboring Armenia. The powerful Armenian lobby-reinforced by the 42-member Congressional Caucus on Armenian Issues-blames the Azeri government for repressing the Armenian population in the tiny enclave of Nagorno-Karabakh.

The enclave lies inside the borders of Muslim Azerbaijan but is populated heavily by Christian Armenia’s and is claimed by both countries. The long-standing dispute erupted into war as the Soviet Union was collapsing and the Armenian majority demanded unification with Armenia.

Fighting between the two nationalities inside and around the enclave eased with a cease-fire in May 1994–but negotiations to resolve its status have stalled. In the meantime–Azerbaijan-long Armenia’s principal source of oil-continues to impose an energy blockade on its neighbor.

The US policy at issue is a provision in the 1992 Freedom Support Act–the broad legislation directing American aid to the newly independent nations carved from the former Soviet Union.

The provision–inserted at the urging of pro-Armenian members of Congress–prohibits direct US economic and humanitarian aid to Azerbaijan until the Baku government takes "demonstrable steps" to lift its blockade.

As a result–Azerbaijan has received barely $100 million in US aid for limited humanitarian purposes–routed through private relief groups.

Armenia–by contrast–has received more than $600 million in direct assistance.

But the Armenian lobby’s grip on Congress is now under challenge. Led by Amoco and Pennzoil–US oil companies and their supporters in Congress are mobilizing to increase awareness of the stakes in the Caspian basin.

"This year the major American oil companies are working a lot more closely to further the [Azeri] government’s political objectives. … They’re clearly coordinating very closely with the government of Azerbaijan," said Timothy Jemal of the Armenian Assembly of America–one of several Armenian-American groups.

For its part–the Clinton administration is promoting an end to the ban on US aid to Azerbaijan. The United States already is a partner with Russian in a diplomatic effort to settle the Nagorno dispute–which could add to pressures on Armenia. A State Department report in April noted–"The Caspian region could become the most important new player in world oil markets over the next decade. The US has critical foreign policy interests at stake-the increase and diversification of world energy supplies–the independence and sovereignty of the NIS [Newly Independent States] and isolation of [nearby] Iran."

Others have argued that a more balanced US. policy between Azerbaijan and Armenia would help contain Russian dominance in the region.

In a recent op-ed article in the New York Times–former defense secretary Caspar W. Weinberger weighed in with a warning about $1 billion in Russian arms deliveries to Armenia–a theme also seized on by oil company lobbyists.

In contrast to Azerbaijan–Armenia has allowed Russia to maintain bases and troops in its territory.

Oil and gas interests in Congress and forces harboring old fears of an expansionist Russia combined in May when the Senate required Clinton to submit a report to Congress by Aug. 1 on Russian arms shipmen’s. Senate appropriators–meanwhile–have voted to allow the US Export-Import Bank–the Overseas Private Investment Corp.–and the Trade and Development Agency to operate in Azerbaijan.

The legislation is still pending in both houses. Clinton has signaled new interest in Azerbaijan. Aliyev’s trip here next month will be an officialstate visit–the first since the country’s independence six years ago.

But Armenia’s supporters are fighting back. Last week–the Armenian National Committee of America launched a campaign to block the White House visit.

Its goal is to get 50,000 Armenian Americans to write Clinton–asking him to cancel the visit and uphold the ban on US aid to Azerbaijan.

The former Soviet Communist Party chief in Azerbaijan and a head of the KGB–Aliyev was ousted after independence but regained power in an armed revolt and won a controversial election in 1993.

"Aliyev is a very controversial figure," said Armenian National Committee Executive Director Aram Hamparian. "His visit represents a tilt–a bias–by the American government toward the Azerbaijan side."

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