Poppy Strikes Gold
Date: Wednesday, May 14 @ 09:03:28 UTC
Topic: King Bush
By Greg Palast,
From The Best Democracy Money Can Buy (Penguin/Plume, 2003)
In this excerpt from the recently-released U.S. edition of his book The Best Democracy Money Can Buy, renowned investigative reporter Greg Palast details the shady-and extremely lucrative-connections between former president George H. W. ("Poppy") Bush, a little-known Canadian gold mining company, and the political fortunes of Poppy's son Dubya. This damning story, and a second one we'll run next week, were deleted from the British edition of Palast's book for fear they would run afoul of that country's draconian libel law-which makes it a crime even to print a true story if the facts could harm the reputation of a person or company.
George W. could not have amassed this pile if his surname were Jones or Smith. While other candidates begged, pleaded and wheedled for donations, the Bushes added a creative, lucrative new twist to the money chase that contenders couldn't imitate: "Poppy" Bush's post-White House work. It laid the foundation for Dubya's campaign kitty corpulence and, not incidentally, raised the family's net worth by several hundred percent.
In 1998, for example, the former president and famed Desert Stormtrooper-in-Chief wrote to the oil minister of Kuwait on behalf of Chevron Oil Corporation. Bush says, honestly, that he "had no stake in the Chevron operation." True, but following this selfless use of his influence, the oil company put $657,000 into the Republican Party coffers.
That year Bush pere created a storm in Argentina when he lobbied his close political ally, President Carlos Menem, to grant a gambling license to Mirage Casino Corporation. Once again, the senior Bush wrote that he had no personal interest in the deal. However, Bush fils made out quite nicely: After the casino flap, Mirage dropped $449,000 into the Republican Party war chest.
Much of Bush's loot, reports the Center for Responsive Politics, came in the form of "bundled" and "soft" money. That's the squishy stuff corporations use to ooze around U.S. law, which prohibits any direct donations from corporations.
Not all of the elder Bush's work is voluntary. His single talk to the board of Global Crossing, the telecom start-up, earned him stock worth $13 million when the company went public. Global Crossing's employees also kicked in another million for the younger Bush's run. (We'll meet Global Crossing again in Chapter 3.)
And while the Bush family steadfastly believes that ex-felons should not have the right to vote for president, they have no objection to ex-cons putting presidents on their payroll. In 1996, despite pleas by U.S. church leaders, Poppy Bush gave several speeches (he charges $100,000 per talk) sponsored by organizations run by Rev. Sun Myung Moon, cult leader, tax cheat-and formerly the guest of the U.S. federal prison system.
Some of the loot for the Republican effort in the 1997-2000 election cycles came from an outfit called Barrick Corporation. The sum, while over $100,000, is comparatively small change for the GOP, yet it seemed quite a gesture for a corporation based in Canada. Technically, the funds came from those associated with the Canadian's U.S. unit, Barrick Gold Strike.
They could well afford it. In the final days of the Bush (Senior) administration, the Interior Department made an extraordinary but little noticed change in procedures under the 1872 Mining Law, the gold rush-era act that permitted those whiskered small-time prospectors with their tin pans and mules to stake claims on their tiny plots. The department initiated an expedited procedure for mining companies that allowed Barrick to swiftly lay claim to the largest gold find in America. In the terminology of the law, Barrick could "perfect its patent" on the estimated $10 billion in ore-for which Barrick paid the U.S. Treasury a little under $ 10,000. Eureka!
Barrick, of course, had to put up cash for the initial property rights and the cost of digging out the booty (and the cost of donations, in smaller amounts, to support Nevada's Democratic senator, Harry Reid). Still, the shift in rules paid off big time: According to experts at the Mineral Policy Center of Washington, DC, Barrick saved-and the U.S. taxpayer lost-a cool billion or so.
Upon taking office, Bill Clinton's new interior secretary, Bruce Babbitt, called Barrick's claim the "biggest gold heist since the days of Butch Cassidy." Nevertheless, because the company followed the fast-track process laid out for them under Bush, this corporate Goldfinger had Babbitt by the legal nuggets. Clinton had no choice but to give them the gold mine while the public got the shaft.
Barrick says it had no contact whatsoever with the president at the time of the rules change. There was always a place in Barrick's heart for the older Bush-and a place on its payroll. In 1995, Barrick hired the former president as Honorary Senior Advisor to the Toronto company's International Advisory Board. Bush joined at the suggestion of former Canadian prime minister Brian Mulroney, who, like Bush, had been ignominiously booted from office. I was a bit surprised that the president had signed on. When Bush was voted out of the White House, he vowed never to lobby or join a corporate board. The chairman of Barrick openly boasts that granting the title "Senior Advisor" was a sly maneuver to help Bush tiptoe around this promise.
I was curious: What does one do with a used president? Barrick vehemently denies that it appointed Bush "in order to procure him to make contact with other world leaders whom he knows, or who could be of considerable assistance" to the company. Yet, in September 1996, Bush wrote a letter to help convince Indonesian dictator Suharto to give Barrick a new, hot gold-mining concession.
Bush's letter seemed to do the trick. Suharto took away 68 percent of the world's largest goldfield from the finder of the ore and handed it to Barrick. However, Bush's lobbying magic isn't invincible. Jim Bob Moffett, a tough old Louisiana swamp dog who heads Freeport-McMoRan, Barrick's American rival, met privately with Suharto. When Suharto emerged from their meeting, the kleptocrat announced that Freeport would replace Bush's Canadians. (Barrick lucked out: The huge ore deposit turned out to be a hoax. When the con was uncovered, Jim Bob's associates invited geologist Mike de Guzman, who "discovered" the gold, to talk about the error of his ways. Unfortunately, on the way to the meeting, de Guzman fell out of a helicopter.)
Who is this "Barrick" to whom our former president would lease out the reflected prestige of the Oval Office? I could not find a Joe Barrick in the Canadian phone book. Rather, the company as it operates today was founded by one Peter Munk. The entrepreneur first came to public notice in Canada in the 1960s as a central figure in an insider trading scandal. Munk had dumped his stock in a stereo-making factory he controlled just before it went belly up, leaving other investors and government holding the bag. He was never charged, but, notes Canada's Maclean's magazine, the venture and stock sale "cost Munk his business and his reputation." Yet today, Munk's net worth is estimated at $350 million, including homes on two continents and his own island.
How did he go from busted stereo maker to demi-billionaire goldbug? The answer: Adnan Khashoggi, the Saudi arms dealer, the "bag man" in the Iran-Contra arms-for-hostage scandals. The man who sent guns to the ayatolla teamed up with Munk on hotel ventures and, ultimately, put up the cash to buy Barrick in 1983, then a tiny company with an "unperfected" claim on the Nevada mine. You may recall that Bush pardoned the coconspirators who helped Khashoggi arm the Axis of Evil, making charges against the sheik all but impossible. (Bush pardoned the conspirators not as a favor to Khashoggi, but to himself.)
Khashoggi got out of Barrick just after the Iran-Contra scandal broke, long before 1995, when Bush was invited in. By that time, Munk's reputation was restored, at least in his own mind, in part by massive donations to the University of Toronto. Following this act of philanthropy, the university awarded Munk-adviser Bush an honorary degree. Several students were arrested protesting what appeared to them as a cash-for-honors deal.
Mr. Munk's president-for-hire did not pay the cost of his rental in Indonesia. The return on Barrick's investment in politicians would have to come from Africa.
Mobutu Sese Seko, the late dictator of the Congo (Zaire), was one of the undisputed master criminals of the last century having looted hundreds of millions of dollars from his national treasury-and a golfing buddy of the senior Bush. That old link from the links probably did not hurt Barrick in successfully seeking an eighty-thousand-acre gold-mining concession from the Congolese cutthroat. Bush himself did not lobby the deal for Barrick. It wasn't that the former president was squeamish about using the authority of his former posts to cut deals with a despot. Rather, at the time Bush was reportedly helping Adolf Lundin, Barrick's sometime industry rival. Africa specialist Patrick Smith of London disclosed that Bush called Mobutu in 1996 to help cinch a deal for Lundin for a mine distant from Barrick's.
Rebellion against Mobutu made the mine site unusable, though not for the company's lack of trying. In testimony in hearings convened by the minority leader of the House Foreign Affairs Subcommittee on Human Rights, expert Wayne Madsen alleged that Barrick, to curry favor with both sides, indirectly funded both and thereby inadvertently helped continue the bloody conflict. The allegation, by respected journalist Wayne Madsen, has not been substantiated: The truth is lost somewhere in the jungle, where congressional investigators will never tread.
Though Barrick struck out in Indonesia and the Congo, the big payoff came from the other side of the continent. The company's president bragged to shareholders that the prestige of the Mulroney-Bush advisory board was instrumental in obtaining one of the biggest goldfields in East Africa at Bulyanhulu, Tanzania. Barrick, according to its president, had hungered for that concession-holding an estimated $3 billion in bullion-since the mid-1990s, when it first developed its contacts with managers at Sutton Resources, another Canadian company, which held digging rights from the government. (See footnote 1.) Enriched by the Nevada venture, Barrick could, and eventually would, buy up Sutton. But in 1996, there was a problem with any takeover of Sutton: Tens of thousands of small-time prospectors, "jewelry miners," so called because of their minuscule finds, already lived and worked on the land. These poor African diggers held legal claim stakes to their tiny mine shafts on the property. If they stayed, the concession was worthless.
In August 1996, Sutton's bulldozers, backed by military police firing weapons, rolled across the goldfield, smashing down worker housing, crushing their mining equipment and filling in their pits. Several thousand miners and their families were chased off the property. But not all of them. About fifty miners were still in their mine shafts, buried alive.
Buried alive. It's not on Bush's resume, nor on Barrick's Web site. You wouldn't expect it to be. But then, you haven't found it in America's newspapers either.
There are two plausible explanations for this silence. First, it never happened; the tale of the live burials is a complete fabrication of a bunch of greedy, lying Black Africans trying to shake down Sutton Resources (since 1999, a Barrick subsidiary). That's what Barrick says after conducting its own diligence investigation and relying on local and national investigations by the Tanzanian government. And the company's view is backed by the World Bank. See Chapter 8 for more on this.
There's another explanation: Barrick threatens and sues newspapers and human rights organizations that dare to breathe a word of the allegations-even if Barrick's denials are expressed. I know: They sued my papers, the Observer and Guardian (for more on that, see Chapter 8). Barrick even sent a letter to the internationally respected human rights lawyer Tundu Lissu, a fellow at the World Resources Institute in Washington, DC, outlining its suit against the Observer and warning that it would take "all necessary steps" to protect its reputation should the Institute repeat any of the allegations. Barrick's threats are the least of Lissu's problems. For supplying me with evidence-photos of a corpse of a man allegedly killed by police during the clearance of the mine site, notarized witness statements, even a police video of workers seeking bodies from the mine pits-and for Lissu's demanding investigation of the killings, his law partners in Dar es Salaam have been arrested and Lissu charged by the Tanzanian government with sedition.
In 1997, while Bush was on the board (he quit in 1999), Mother Jones magazine named Barrick's chairman Munk one of America's "10 Little Piggies"-quite an honor for a Canadian-for allegedly poisoning the West's water supply with the tons of cyanide Barrick uses to melt mountains of ore.
Notably, one of the first acts of the junior Bush's Interior Department in 2001 was to indicate it would reverse Clinton administration rules requiring gold extractors to limit the size of waste dumps and to permit new mines even if they were likely to cause "substantial, irreparable harm." The New York Times ran a long, front-page story on this rule-relaxing windfall for Nevada gold-mining companies, but nowhere did the Times mention the name of the owner of the largest gold mine in Nevada, Barrick, nor its recent payroller, the president's father.
 Barrick has responded to every allegation reported in my first report on the company in a manner certain to get my attention: The company and its chairman sued my papers, Guardian and the Observer. While I have a distaste for retort by tort, I have incorporated their legitimate concerns to ensure their views are acknowledged. More on the suit in Chapter 8.
 A bit of confusion here: Barrick swore to my paper that the alleged killings "related to a time years before [Barrick] had any connection whatsoever with the company to which the report referred." Yet Barrick's president and CEO, Randall Oliphant, told Barrick's shareholders that prior to their acquisition of Sutton, "we followed the progress at Bully (i.e., Bulyanhulu) for five years, remaining in close contact with the senior management team." That would connect them to the mine in 1994. The mining company wants me to report their version of events. Okay, here's both of them.
About the author
An internationally recognized expert on the control of corporate power, before picking up pen and camera, Greg Palast worked with labor unions and consumer groups in the USA, South America and Europe investigating corporate corruption. In America, among his more noted cases, Palast directed government investigations and prosecution of racketeering by nuclear plant builders and, for the Chugach Natives of Alaska, probed charges of fraud by oil companies in the grounding of the Exxon Valdez.
Palast's lectures at Cambridge University and the University of Sao Paulo are contained in his book, Democracy and Regulation, written with Jerry Oppenheim and Theo MacGregor, published by the United Nations and Pluto Press (2003). He divides his time between New York and London.
For more information, visit www.gregpalast.com
Copyright 2003 Greg Palast