Gore's Big Oil Connection: An 'Occident' of Birth?

September 25, 2000
Time Magazine

There may be nothing nefarious about the vice president's longstanding family ties to Occidental Petroleum. But they don't help his efforts to paint Governor Bush as the candidate of Big Oil...

It's not exactly the stuff of scandal, Al Gore's connection to Occidental Petroleum, but it doesn't do much for his efforts to proclaim himself free of the "oil stain" he sees all over George W. Bush. Indeed, the connection has even necessitated an occasional bit of uncomfortable shuffling from the Gore campaign as Naderites and other lefties and environmentalists berate the vice president over it, much to the amusement of the Bush campaign.

For much of the campaign year, environmentalist groups have dogged the Gore campaign over the fate of the U'wa, an 5,00-strong indigenous Colombian tribe who've threatened to commit mass suicide if Occidental goes ahead with a plan to drill oil on land they hold sacred. Just last week pro-U'wa hecklers disrupted a University of Missouri speech by Karenna Gore-Schiff, and a second group were arrested trying to enter a Gore campaign office in Washington state. Of course, these protests are mostly an opportunistic effort by the tribe's supporters to take advantage of the election-year vulnerability of Occidental's most famous investor (and the fate of the U'wa is unlikely to weigh heavily on the minds of swing voters in battleground states), but they do smudge Gore's efforts to project himself as a friend of the Earth. So much so, in fact, that the Gore campaign is at pains to point out that the Gore family holdings in Occidental Petroleum (worth upward of $500,000) are the property of his father's estate, of which Gore is executor but not currently a beneficiary. And, they add, he's leaving the U'wa matter to the State Department.

Some Gore-bashers are more concerned about the fact that the vice president's "reinventing government" program had helped Occidental in 1997 become the beneficiary of the largest-ever American privatization of an oilfield, when it purchased 78 percent of the Elk Hills oilfield near Bakersfield, Calif. Gore spokesman Jim Kennedy says the vice president never specifically pushed for the sale of Elk Hills or made any effort to profit from it. But in 1995 Gore had indeed called specifically for the privatization of Elk Hills, which had been the Navy's strategic reserve, arguing it was no longer needed. And he was merely repeating what Republican presidents from Nixon to Reagan had maintained — that the Navy no longer needs its own oil reserve, and that Elk Hills should be sold to the private sector.

Moreover, Occidental wasn't simply handed the deal; its offer — $3.65 billion — was twice as high as that of the nearest of its 22 competitors. The acquisition certainly turned Occidental around, instantly trebling its U.S. oil reserves and helping to almost double its profits last year. Whereas it had been estimated that pumping Elk Hills oil would cost in the region of $4.50 a barrel, it actually gushed through at $1.50 a barrel.

Those prone to smelling rodents in the Clinton White House, such as The Nation's left-wing columnist Alexander Cockburn, point out that the presale assessment of the Elk Hills land was done not by the Department of Energy, as would usually be the case, but by a private firm, ICF Kaiser. And then, with a note of "gotcha," Cockburn throws in the fact that ICF Kaiser's chairman is former Gore campaign manager Tony Coelho.

Again, nothing conclusive there. The New York Times points out that the sale was questioned by environmentally oriented government departments such as the EPA and the Fish and Wildlife Service, but that the DOE went ahead under pressure to meet a congressional deadline for the sale. To be sure, it was Newt Gingrich's Republican revolutionaries who revived plans to sell Elk Hills back in 1995, and they congratulated themselves over its sale as a vindication of the Reagan legacy.

It may well simply be an unfortunate coincidence that the auction was won by a company with longstanding financial and political ties to Gore and his family, but it certainly doesn't help his efforts to paint himself as the nemesis of Big Oil.

The Gore family's links with Occidental date back to the vice president's father's close relationship with Armand Hammer, the oil baron who created Occidental and who often found himself in the limelight of controversy because of his extensive investments in the old Soviet Union. When J. Edgar Hoover had accused Hammer of being a communist agent in 1962, Senator Gore defended him on the Senate floor, and after performing other favors for the company over the years, Gore Senior, after losing his Senate seat in 1970, took a job with an Occidental subsidiary for an annual salary of $500,000

The vice president inherited his father's relationship with Hammer — as well as taking over a piece of land the oil magnate had sold his father in a lucrative sweetheart deal — and dined regularly with the oilman in Washington during the '80s. Hammer was Gore's guest at the Reagan inaugural in 1984, and the then-senator also got him a prime seat at the Bush inaugural four years later.

Although Hammer died in 1990, Occidental's CEO, Ray Irani, appears to have enjoyed a similarly chummy relationship with Gore. Indeed, according to the New York Times, the traditionally Republican firm gave heavily to the Democrats in the '90s, starting with a $100,000 contribution to the Presidential Inauguration Committee in 1992. Occidental is further reported to have forked over $50,000 in soft money after a phone solicitation from Gore in 1996 and a further $100,000 after Irani spent two nights in the Lincoln Bedroom that same year.

Skulduggery? None even vaguely proven. Irani, being a good businessman, gives to the Bush campaign, too. But the Occidental connection may nonetheless be a little unfortunate when Gore is seeking to make hay out of the accusation that his opponents are "of big oil, for big oil and by big oil."

TONY KARON