Washington Babylon — February 18, 2009, 10:40 am

Clean Energy? A profile of oilman Ely Calil

I have an article in the March issue of the magazine about Ely Calil, a London-based international oil fixer (and friend, as I note in the story). Calil is one of the most interesting people I’ve met, and the story traces the arc of his career:

Calil belongs to a small group of
middlemen, a few dozen at most,
who quietly grease the wheels of the
global energy business, brokering
transactions between oil companies
and governments. The oil business
operates on the basis of discreet pay-
ments, transfers, and backroom
deals—not necessarily illegal—
arranged by ?xers like Calil. He has
funneled money to African dictators
to obtain concessions for oil companies, traded oil from Russia following
the collapse of the Soviet Union,
and advised presidents and exiled
political leaders. Along the way, he
has not only amassed an immense
personal fortune but has established
a web of political ties stretching from
Africa to the Middle East to the
United States.

The backdrop to the story is that much of the world’s oil reserves lie in the Third World, while being pumped and produced by First World multinationals. Hence, there’s really no such thing as a “clean” energy deal. “You’re trying to satisfy a lowest common denominator between two systems that don’t mesh much,” one former multinational executive, who worked in Angola among other places, told me. “Tribal systems are hierarchical, clan-dominated, dictatorial. It’s not always possible to marry that to a democratic system. There are always quid pro quos, even though sometimes the strings aren’t transparent.”

Straightforward cash bribes are still employed, but the means and methods of payoffs have become more complex over the years. Partly, that’s for legal reasons. The United States passed the Foreign Corrupt Practices Act in 1977, which outlawed bribery abroad. The Organization for Economic Cooperation and Development passed similar rules in 1997; up until then, many European countries allowed their firms to deduct bribes on corporate income tax statements (usually under the category of “commissions”). With the heightened legal risk, the greater public scrutiny of international business and the more sophisticated means governments have to monitor bank transfers, payoffs now take a multitude of forms. Indeed, while as opaque as before and serving the same purpose, modern day payoffs are not always illegal. “I spent 99 percent of my time trying to figure out ways to not technically violate the FCPA,” the former oil executive told me.

Back in July of 2004, the Senate Permanent Subcommittee on Investigations published a study that detailed the practices of seven oil companies in Equatorial Guinea. Mobil (before its merger with Exxon) gave President Obiang a stake in an oil trading business for a mere $2,300. Six years later, Obiang’s holding was valued at about $645,000. Exxon and Amerada Hess paid about $1 million to Sonavi, a private security firm headed by Armengol Ondo Nguema, Obiang’s brother, the country’s security chief and identified in State Department reports as a torturer.) Amerada Hess paid government officials and their relatives more than $2 million for building and office leases. About a quarter of it was paid to Obiang’s 14-year-old son. The report led to an SEC investigation, still open, which is to determine whether these deals violated the FCPA or fall within the law. Either way, the companies were essentially seeking to win favor, and contracts, by enriching Obiang and his cronies.

“Corruption isn’t endemic in the energy business because people in the industry are more corrupt or have lower morals but because you’re dealing with huge sums of capital,” Keith Myers, a London-based consultant and former BP executive, told me. “A million dollars here or there doesn’t make any difference to the overall economics of a project but it can make a huge difference to the economics of a few individuals who can delay or stop or approve the project.”

Edward Chow, a former Chevron executive, explained why fixers are so important to the oil companies. The process for awarding oil contracts and concessions in Third World countries is inherently politicized and centralized, he said, because mineral resources typically belong to the state and decision-making power is concentrated in the hands of a dictator or a small group. “In Texas, I can convince landowners to lease me their mineral rights. They get a royalty check every month and the companies leave a small footprint on their land. What’s not to love? There is no equivalent in places like Nigeria or Angola or Kazakhstan. You get the land but you don’t provide a lot of jobs, you may be destroying the environment, and most of the profit goes to international capital. The companies don’t have a strong case to sell to local communities, so they come to not only accept highly centralized government but to crave it. A strong man president can make all the necessary decisions. It’s a lot easier to win support from the top than to build it from the bottom.”

And as Calil himself told me, “Americans want their gasoline cheap. But it’s not possible without cutting a few corners.”I

Note: Steve Coll of the New Yorker wrote about the story earlier this week, which cited this condensed section:

That night in Paris, Calil’s destination was Spring, a popular restaurant in the ninth arrondissement that offers a set four-course menu to sixteenn diners nightly. Awaiting us at a corner table was Friedhelm Eronat, a close friend and sometime business parter of Calil’s…with two Russian models, one tall and blonde in a dark dress and knee-length black boots, and the other with dark hair and porcelain skin and wearing jeans…With the global financial markets now in crisis, the two men spoke of some old comrades who had fallen on hard times. “They’re all selling their yachts,” Eronat said with a grim look. One friend, an Uzbek named Sascha, “had $44 billion, and now he’s down to a billion.” “It happens,” Calil deadpanned.

Share
Single Page

More from Ken Silverstein:

Commentary November 17, 2015, 6:41 pm

Shaky Foundations

The Clintons’ so-called charitable enterprise has served as a vehicle to launder money and to enrich family friends.

From the November 2013 issue

Dirty South

The foul legacy of Louisiana oil

Perspective October 23, 2013, 8:00 am

On Brining and Dining

How pro-oil Louisiana politicians have shaped American environmental policy

Get access to 165 years of
Harper’s for only $45.99

United States Canada

CATEGORIES

THE CURRENT ISSUE

January 2017

The Monument Wars

= Subscribers only.
Sign in here.
Subscribe here.

The Trouble with Defectors

= Subscribers only.
Sign in here.
Subscribe here.

Over the River

= Subscribers only.
Sign in here.
Subscribe here.

House Hunters Transnational

= Subscribers only.
Sign in here.
Subscribe here.

The Lords of Lambeau

= Subscribers only.
Sign in here.
Subscribe here.

A Window To The World

= Subscribers only.
Sign in here.
Subscribe here.

view Table Content

FEATURED ON HARPERS.ORG

Post
Illustration (detail) by Lincoln Agnew
Article
Over the River·

= Subscribers only.
Sign in here.
Subscribe here.

Ashley arrived for her prenatal appointment at Black Hills Obstetrics and Gynecology, in Rapid City, South Dakota, wearing a black zip-up hoodie and Converse sneakers.1 To explain her absence from work that morning — a Tuesday in April 2015 — she had told a co-worker that she was having “female issues.” She was twenty-five years old and eight weeks pregnant. She had been separated from her husband, with whom she had a five-year-old son, for the better part of a year. The guy who’d gotten her pregnant was someone she’d met at the gym, and he’d made it abundantly clear that he wanted nothing more to do with her. Ashley found herself hoping that the doctor would discover some kind of fetal defect, so that her decision would be easier. She glanced across the waiting room at a television playing a birth-control ad and laughed darkly. “Jesus, Lord, it would be so nice if someone just pushed me down a flight of stairs.”

In the exam room, she perched on the table with her feet crossed at the ankles, her blond hair brushing the back of her pink hospital gown. “I don’t know what’s available for me here,” she told her doctor, Katherine Degen, who sat facing her on a stool. “I figured nothing.”

 Some names and identifying details have been changed. 

“Big, fat zero, unfortunately,” Degen said, making a 0 with her fingers. The last doctor who provided abortions in Rapid City retired in 1986, three years before Ashley was born.

The baby was due in November, when Ashley, who was a nurse, hoped to be enrolled in a graduate program to become a nurse practitioner. Getting pregnant as a teenager had forced her to put that dream on hold, but she had thought that she was finally ready; she had even submitted her application shortly before the March 15 deadline. For the first time in her adult life, Ashley felt as if her plans were coming together. Then she missed her period.

It would be too difficult to attend school as a single mother of two, Ashley knew. She had made an appointment for three weeks from now at the nearest abortion clinic, in Billings, Montana, 318 miles away. But just a week and a half ago, her husband had said he wanted to get back together and offered to raise the child as his own. Was it a sign that she was meant to continue the pregnancy? As a rule, Ashley approached her problems with resolve. She was capable and tough; she liked shooting guns and lifting weights. She kept track of her stats and checked off her goals as she achieved them one by one. Yet the dilemma before her had shaken her confidence. She leaned back and turned to watch the ultrasound screen. The black-and-white image danced. A sharp, fast thumping emerged from the machine. As Degen removed the wand, Ashley wiped the corner of her eye.

Photograph (detail) by Brian Frank
Article
A Window To The World·

= Subscribers only.
Sign in here.
Subscribe here.

Ashley arrived for her prenatal appointment at Black Hills Obstetrics and Gynecology, in Rapid City, South Dakota, wearing a black zip-up hoodie and Converse sneakers.1 To explain her absence from work that morning — a Tuesday in April 2015 — she had told a co-worker that she was having “female issues.” She was twenty-five years old and eight weeks pregnant. She had been separated from her husband, with whom she had a five-year-old son, for the better part of a year. The guy who’d gotten her pregnant was someone she’d met at the gym, and he’d made it abundantly clear that he wanted nothing more to do with her. Ashley found herself hoping that the doctor would discover some kind of fetal defect, so that her decision would be easier. She glanced across the waiting room at a television playing a birth-control ad and laughed darkly. “Jesus, Lord, it would be so nice if someone just pushed me down a flight of stairs.”

In the exam room, she perched on the table with her feet crossed at the ankles, her blond hair brushing the back of her pink hospital gown. “I don’t know what’s available for me here,” she told her doctor, Katherine Degen, who sat facing her on a stool. “I figured nothing.”

 Some names and identifying details have been changed. 

“Big, fat zero, unfortunately,” Degen said, making a 0 with her fingers. The last doctor who provided abortions in Rapid City retired in 1986, three years before Ashley was born.

The baby was due in November, when Ashley, who was a nurse, hoped to be enrolled in a graduate program to become a nurse practitioner. Getting pregnant as a teenager had forced her to put that dream on hold, but she had thought that she was finally ready; she had even submitted her application shortly before the March 15 deadline. For the first time in her adult life, Ashley felt as if her plans were coming together. Then she missed her period.

It would be too difficult to attend school as a single mother of two, Ashley knew. She had made an appointment for three weeks from now at the nearest abortion clinic, in Billings, Montana, 318 miles away. But just a week and a half ago, her husband had said he wanted to get back together and offered to raise the child as his own. Was it a sign that she was meant to continue the pregnancy? As a rule, Ashley approached her problems with resolve. She was capable and tough; she liked shooting guns and lifting weights. She kept track of her stats and checked off her goals as she achieved them one by one. Yet the dilemma before her had shaken her confidence. She leaned back and turned to watch the ultrasound screen. The black-and-white image danced. A sharp, fast thumping emerged from the machine. As Degen removed the wand, Ashley wiped the corner of her eye.

Artwork by Imre Kinszki © Imre Kinszki Estate
Article
The Lords of Lambeau·

= Subscribers only.
Sign in here.
Subscribe here.

Ashley arrived for her prenatal appointment at Black Hills Obstetrics and Gynecology, in Rapid City, South Dakota, wearing a black zip-up hoodie and Converse sneakers.1 To explain her absence from work that morning — a Tuesday in April 2015 — she had told a co-worker that she was having “female issues.” She was twenty-five years old and eight weeks pregnant. She had been separated from her husband, with whom she had a five-year-old son, for the better part of a year. The guy who’d gotten her pregnant was someone she’d met at the gym, and he’d made it abundantly clear that he wanted nothing more to do with her. Ashley found herself hoping that the doctor would discover some kind of fetal defect, so that her decision would be easier. She glanced across the waiting room at a television playing a birth-control ad and laughed darkly. “Jesus, Lord, it would be so nice if someone just pushed me down a flight of stairs.”

In the exam room, she perched on the table with her feet crossed at the ankles, her blond hair brushing the back of her pink hospital gown. “I don’t know what’s available for me here,” she told her doctor, Katherine Degen, who sat facing her on a stool. “I figured nothing.”

 Some names and identifying details have been changed. 

“Big, fat zero, unfortunately,” Degen said, making a 0 with her fingers. The last doctor who provided abortions in Rapid City retired in 1986, three years before Ashley was born.

The baby was due in November, when Ashley, who was a nurse, hoped to be enrolled in a graduate program to become a nurse practitioner. Getting pregnant as a teenager had forced her to put that dream on hold, but she had thought that she was finally ready; she had even submitted her application shortly before the March 15 deadline. For the first time in her adult life, Ashley felt as if her plans were coming together. Then she missed her period.

It would be too difficult to attend school as a single mother of two, Ashley knew. She had made an appointment for three weeks from now at the nearest abortion clinic, in Billings, Montana, 318 miles away. But just a week and a half ago, her husband had said he wanted to get back together and offered to raise the child as his own. Was it a sign that she was meant to continue the pregnancy? As a rule, Ashley approached her problems with resolve. She was capable and tough; she liked shooting guns and lifting weights. She kept track of her stats and checked off her goals as she achieved them one by one. Yet the dilemma before her had shaken her confidence. She leaned back and turned to watch the ultrasound screen. The black-and-white image danced. A sharp, fast thumping emerged from the machine. As Degen removed the wand, Ashley wiped the corner of her eye.

Photograph (detail) by Balazs Gardi
Article
With Child·

= Subscribers only.
Sign in here.
Subscribe here.

"She glanced across the waiting room at a television playing a birth-control ad and laughed darkly. 'Jesus, Lord, it would be so nice if someone just pushed me down a flight of stairs.'"
Photograph (detail) by Lara Shipley

Price of ten pencils made from “recycled twigs,” from the Nature Company:

$39.50

A loggerhead turtle in a Kobe aquarium at last achieved swimming success with her twenty-seventh set of prosthetic fins. “When her children hatch,” said the aquarium’s director, “well, I just feel that would make all the trauma in her life worthwhile.”

In Colombia, U.N. delegates sent to serve as impartial observers of the peace process aimed at ending the half-century-long war between the FARC and the Colombian government were chastised after they were filmed dancing and getting drunk with FARC fighters at a New Year’s Eve party.

Subscribe to the Weekly Review newsletter. Don’t worry, we won’t sell your email address!

HARPER’S FINEST

Who Goes Nazi?

= Subscribers only.
Sign in here.
Subscribe here.

By

"It is an interesting and somewhat macabre parlor game to play at a large gathering of one’s acquaintances: to speculate who in a showdown would go Nazi. By now, I think I know. I have gone through the experience many times—in Germany, in Austria, and in France. I have come to know the types: the born Nazis, the Nazis whom democracy itself has created, the certain-to-be fellow-travelers. And I also know those who never, under any conceivable circumstances, would become Nazis."

Subscribe Today