Private Empire: ExxonMobil and American Power

by Steve Coll

  In Scotland, British police soon arrived at Paul Smith’s home to convey the news of his death to his twenty-eight-year-old wife, Paula. Their elder son, Jordan, who was four years old, “was suspicious” of why the police had turned up, and so that night, Paula, devastated, decided to tell the boy the truth. “Daddy is just like the Lion King,” she explained. “He’s gone to heaven now and you won’t see him again.”11

  The reported death did accelerate ransom negotiations. ExxonMobil maintained a firm public line against payments, but its declared policy could not constrain either its contracting corporations or the governor of Akwa Ibom. Attah recalled that he was besieged by calls from the American, British, Romanian, Malaysian, and Indonesian embassies—they pressed him so hard to resolve the kidnapping that he found it difficult to actually carry out the negotiations. In the end, he conceded, he authorized a ransom payment. It is not clear what advice ExxonMobil offered about this decision or whether it endorsed the payments or supplied funds. As to the kidnappers, Attah said, “They were some misguided boys from my state” who had “invited” and “escorted” elements of a more experienced, hard-core kidnapping gang from another Delta state to attack the ExxonMobil compound.12

  State Department officials working with major American oil companies found by 2006 that they “diverged in our paths” on the Delta kidnapping issue, the State official recalled. “They would pay ransoms, and then we felt that was just actually contributing to the problem.”13 Hostage negotiating teams led by State’s Diplomatic Security bureau did deploy to Nigeria, but then sat idle for lack of cooperation from the firms.

  The kidnappers packed their hostages back into speedboats and drove them to a rendezvous point with officers of the State Security Service, or S.S.S., the principal national Nigerian police and intelligence force. Assured of their payment, they freed their captives. ExxonMobil helicopters lifted the men to Lagos, where they at last boarded planes for home.

  Paul Smith telephoned his wife, Paula, to explain that he was not dead. “He was completely calm,” Paula recalled. “I was beside myself. All the family could hear me on the phone. . . . Everyone was jumping around all over the place.” Once back in Scotland, Paul Smith issued a declaration: “I won’t be going back to Nigeria.”14

  Influential scholarship documenting the resource curse emerged from the study of Venezuela’s oil-induced woes, but Nigeria offered perhaps the most striking case study. Nigeria possessed a talented, well-educated elite; fertile land; and, of course, oil revenue. The country’s earnings from oil and gas sales from the early 1970s to 2008 totaled about $400 billion. Yet nearly half a century after independence, the country’s population languished perpetually near the bottom of the United Nations’s human development index. Average Nigerian life expectancy remained only forty-six and one half years. Nine tenths of the population lived on two dollars a day or less. More than a third lacked sanitation and clean water, and the country’s infant mortality rates remained among the world’s highest. Such impoverished but less oil-burdened countries as Papua New Guinea and Zimbabwe ranked higher than Nigeria on the human development scale.15

  Corruption, mismanagement, theft, and criminal violence were hallmarks of the government’s performance. During the 1990s, the military dictator General Sani Abacha stole an estimated $4 billion of government funds, in addition to that taken by cabinet officials, state governors, and their affiliated youth gangs. International oil and construction companies conspired in these crimes or tolerated them with see-no-evil policies. Halliburton and its subsidiary, Kellogg Brown & Root, agreed early in 2009 to pay $579 million in fines to settle charges related to their participation in a joint venture that systematically bribed Nigerian officials across a decade to secure more than $6 billion in construction contracts; Albert “Jack” Stanley, the chairman of K.B.R., named to his position by Halliburton chief executive Dick Cheney about two years before Cheney departed for the White House, pleaded guilty to criminal charges after personally authorizing a $23 million payment to a Gibraltar consultant to win Nigerian contracts.16

  In Abuja, “a tiny number of people have stolen a staggering amount of money,” a Western diplomat there observed. The diplomat’s work in liaison with Nigerian ministers routinely brought him into Abuja homes “that you would be embarrassed to build in Beverly Hills,” mansions decorated with “ostentation that is just jaw-dropping.” John Campbell, the American ambassador, referred to the capital’s better neighborhoods as “an example of Las Vegas baroque.” And this was what Nigeria’s political overlords felt comfortable displaying in their home country, where fellow citizens could see it; they funneled much of the rest of their wealth abroad, into properties in London, New York, and Los Angeles.17

  Poverty, disenfranchisement, and environmental degradation in the southern Niger Delta remained acute. Ken Saro-Wiwa led a nonviolent protest movement in the Delta to seek redress during the 1990s; Abacha arrested and executed him. Saro-Wiwa’s idealism was exceptional in a resistance movement that increasingly migrated toward violence and crime. During elections in 2003, Delta political bosses armed youth gangs to compete for power; after the vote, the gangs moved into freelance rackets. They drew members, brand names, and cult practices from college campus fraternities: the Vikings, the Icelanders, the Outlaws, and their female counterparts, the Daughters of Jezebel, the Black Braziers, and the Viqueens.18 They dealt drugs; siphoned oil from pipelines, or stole it in conspiracy with government officials or military officers; and they kidnapped Nigerians and foreigners for ransom. Unemployment ran high among the Niger Delta’s young population; the criminal gangs were hiring, and if you could loll around the swamps, hold a gun, and occasionally take a few physical risks, you could have a paying job. As the gangs raised their political sights and economic ambition after 2006, their picaresque criminality—their head scarves, bandoliers, and speedboats; their bank robbery techniques, which included using massive charges of dynamite to blast away reinforced steel doors—seemed increasingly inspired by Hollywood.

  This was the ethos from which the Movement for the Emancipation of the Niger Delta arose. M.E.N.D. became, after 2006, the dominant Delta insurgent brand. Central Intelligence Agency reporting from Nigeria during the period of ExxonMobil’s Eket kidnapping episode described M.E.N.D. not as an organization with any true leader or hierarchy, but as “a label—at best an umbrella group or an umbrella label,” as a consumer of the agency’s reporting, who found the C.I.A.’s analysis credible, put it.19 To avoid being targeted, M.E.N.D. lacked a central council that could declare who was an authorized commander and who was not. Its notional leader, Henry Okah, was an arms dealer who seemed to spend much of his time outside Nigeria; his supposed role as a supremo served as a convenience for a movement that was, in fact, made up of semiautonomous, extortionate gangs of varied strength and character. Consumers of M.E.N.D.’s press releases and Facebook videos might imagine a tight-knit band of swamp guerrillas fighting for justice against cold-blooded international oil corporations. There was some of that, but the private security analysts who advised ExxonMobil, Chevron, Shell, and other corporations on kidnappings and safety described M.E.N.D. more as a loose collection of armed young men, mainly from the Ijaw ethnic group, who used laptop computers to create an appearance of formidable coherence.20

  M.E.N.D. activists or those using their brand name fought at times with Nigerian security services, but they also collaborated with the Nigerian navy in massive thefts of Delta oil from barges and pipelines—“bunkering,” as it was known, a racket that independent analysts estimated generated between $4.5 billion and $6 billion in total thefts during 2008 alone.21

  In Irving, the global political mapping exercise revised annually by Rosemarie Forsythe, ExxonMobil’s chief political risk analyst, painted Nigeria as a bright red “transitional” country (as opposed to blue “democracies” and yellow “authoritarian” regimes), a category marked by internal instability. Forsythe had also developed maps showing where a
ll the world’s instances of piracy and similar crimes took place; Nigeria stood near the top of that chart, too. As Rex Tillerson settled into office and assessed the greatest global risks to ExxonMobil’s oil and gas portfolio, Nigeria looked unstable; it was getting worse; it was increasingly influenced by pirates; and yet its oil exports were central to the corporation’s business model. Nigerian violence also stoked volatility in global oil prices and raised questions anew about America’s energy security. ExxonMobil and the United States government, in alignment but each in its sovereign sphere, found themselves adapting after 2006, often in an atmosphere of confusion and argument, to the world that M.E.N.D. had created.

  Tillerson was perhaps not ideally suited to assess Nigeria’s moral swamps. His feel for political economies in poor countries was limited. Even during his rise within ExxonMobil’s international divisions, he had never lived outside the United States. In any event, managing ExxonMobil’s position in Nigeria in the post-Aceh era of the Voluntary Principles, heavy media scrutiny, and potential lawsuits would have been challenging even if Tillerson had been an anthropological expert.

  In September 2005, on the cusp of taking power in Irving, Tillerson had flown into Abuja. President Obasanjo had been making noise about forcing Western oil companies in Nigeria to move beyond pumping crude and into the refining of gasoline and other products for local consumption. ExxonMobil had steered clear of Obasanjo because “he tended to pound tables” and make demands. Nigeria was about the last place in the world Lee Raymond wanted to spend time. Tillerson decided to engage, however. He met with the Nigerian president, flew down to Lagos, where he stayed in the corporation’s Waterfront Guest House, traveled by helicopter to a few production sites, and departed. The corporation’s message to American diplomats in the country was that they should “encourage deregulation” and work on “improving the investment climate.”22

  Tillerson remained hopeful—if not in a state of denial—about ExxonMobil’s place in the hearts and minds of Akwa Ibom’s population. After the Eket kidnapping, local insurgents took periodic potshots at ExxonMobil transport vans. Speedboat pirates menaced the corporation’s offshore platforms. Still, Tillerson believed that ExxonMobil remained “largely . . . insulated” from the worst Delta violence and political dysfunction. In Akwa Ibom, Tillerson boasted, the “community in effect protects us when militants from outside . . . try to create problems. . . . We have good relations down there. That is because we made some good decisions at the beginning. And we look to that as a model.”

  The trouble the corporation endured as M.E.N.D. rose was “criminal in nature,” Tillerson believed. He was “mindful of the security situation,” but felt nonetheless that ExxonMobil had a winning formula for obtaining community allegiance in Akwa Ibom. This strategy was rooted, Tillerson thought, in firmness. He sought to imbue in locals the expectation that ExxonMobil knew “how you say no” and that the corporation “could not be intimidated and would act consistently.”23

  Exxon had inherited its operations in the Niger Delta from Mobil. The corporation’s subsidiary, Mobil Exploration Nigeria, Inc., won its first license to explore for oil offshore of Akwa Ibom State in 1961; the first wells flowed later that decade. By the time of the merger, Mobil was on the way to becoming the second-largest international producer in Nigeria, after Royal Dutch Shell. Large volumes and the light, sweet quality of the oil made its Nigerian offshore properties exceptionally valuable.24

  Mobil and then ExxonMobil recruited, paid, supplied, and managed sections of the Nigerian military and police assigned to protect the Eket compound, the roads that led from there to the Qua Iboe Terminal on the Atlantic, and the roads around Akwa Ibom’s state capital of Uyo, a fume-choked city that housed the outsize development projects of Victor Attah. These included the shopping centers Mountain of Fire and Miracles Plaza and, after 2007, the equally ambitious, divinity-inflected construction projects of his successor, Godswill Akpabio. (Akpabio enjoyed a fortunate name for a career in politics in a faithful state; he handed out T-shirts to his youth gangs with slogans such as “Stop Social Vices” and “Support Godswill.”)

  The Mobil Police, as they were known locally, carried automatic rifles and wore black shirts emblazoned with a white arm patch that displayed the Mobil red Pegasus flying horse symbol first adopted in 1931 as a trademark by Mobil predecessor Standard Oil Company of New York. After the upsurge of violence in 2006, ExxonMobil’s Chaplin reported, militants often stripped the Mobil Police of their weapons and “many officers have taken to removing their uniforms at the slightest hint of militant activity.” The corporation’s police established layered checkpoints, spaced every kilometer or so, on the major roads to and from ExxonMobil properties. “ExxonMobil: Take Ownership” declared the sign at the Qua Iboe Terminal entrance, surrounded by warnings posted by Mobil Police squadrons: “Military Zone,” “No Stopping,” and “No Waiting.”25 The Nigerian military deployed a mechanized battalion to reinforce security in the state, but most of the Nigerian government’s support for the Mobil Police came from the S.S.S. ExxonMobil’s Global Security unit in Nigeria appointed liaison officers to joint security task forces to coordinate convoy protection, perimeter security at ExxonMobil installations, and executive protection services. In addition to the Mobil Police, ExxonMobil hired and supervised an eight-hundred-man unarmed unit of the “supernumerary” or “spy” police in Akwa Ibom. The scope of their duties is unclear. The spy police carried corporate identity cards even while technically in the employ of their own government. At one stage, the supernumerary unit in Eket sued ExxonMobil for employment benefits. They argued that they were, in effect, corporate employees, not government police officers.26

  Prior to the merger, Mobil had operated a successful program of community relations in Akwa Ibom, at least as local politicians perceived it. The corporation funded a soccer club, community buildings, water projects, and road building. Nigerian and expatriate Mobil executives curried favor with local political leaders. The corporation acted as “a neighbor and a brother,” recalled Esseme Eyiboh, who represented Eket in the Nigerian House of Representatives. After the merger with Exxon, it became a “purely commercial drive.” The corporation withdrew from a memorandum of understanding that Mobil had negotiated with local leaders and produced a new program, which they wanted “the community to accept . . . without making any inputs,” said Nduese Essien, who negotiated with the corporation after the merger.27

  With Mobil, Victor Attah recalled, political liaison was “a lot less mechanical,” but with ExxonMobil, “it became a lot more rigid.” He pleaded with the corporation to build a power plant, but its managers refused, declaring that such projects were “not their core area of business.” Under ExxonMobil’s rules, Nigerian politicians could not ride corporate airplanes unless it was strictly for oil business; special projects of the sort Mobil had accommodated before the merger were refused; the soccer club and local athletic programs were abandoned; and the corporation issued a new list of local projects it would support. “They have been operating on their diktats,” said Essien.28

  “You have to be willing to say, ‘No, we aren’t going to do it that way, we are going to do it this way; if we can’t do it this way, we won’t be here,’” Tillerson explained, speaking specifically about ExxonMobil’s strategy in the Niger Delta. “This is the way my company has operated throughout the world throughout my entire career. We will walk away if we don’t have an acceptable situation on the ground. That doesn’t mean it’s not tough, it doesn’t mean we don’t have problems. We manage it, but it can be done in a way that the local community benefits tremendously—and the Akwa Ibom state has benefited enormously. That is why we enjoy good relations.”29

  Tillerson’s opinions echoed those of Governor Akpabio, who promoted a slogan, “Akwa Ibom Ado Okay!” or “Akwa Ibom Is Okay!” He sought to protect ExxonMobil. At a “gala night” to honor Chaplin, the governor declared, “Akwa Ibom cannot be safe for criminals; they will
soon know that the state is not safe for kidnappers. Let oil companies and other firms know that the state is safe for them.” In fact, Akpabio’s supporters were engaged increasingly in a complex war with rival gangs, played out through tit-for-tat kidnappings. Nigerian-born ExxonMobil managers and employees, with their attractive salaries, were not immune. Governor Akpabio “has strong cult connections,” said a U.S. official who tracked the governor’s activities. “I’m told that many of the attacks on the roads . . . are being carried out by his militia—whether because he orders it or because they don’t feel they are getting enough money is not clear.” As Eyiboh put it: “We are an inch from insurgency.”30

  If the corporation enjoyed a measure of periodic stability in comparison with Shell and Chevron, it was hardly the result of its corporate strategy; it was because most of its oil production was offshore and therefore harder to steal or disrupt. Harder, but not impossible: M.E.N.D.-branded pirates were a determined lot.

  In September 2006, President Bush signed National Security Presidential Directive 50, outlining American security strategy in Africa. The directive’s stated objectives included building African capacity to govern and deliver social services, consolidating democracies on the continent, and bolstering fragile states. On November 15, 2006, about a month after the Eket kidnapping of ExxonMobil contract workers, Jendayi Frazer, the assistant secretary of state for African affairs, spoke at a maritime security conference in West Africa organized by the United States Navy. The conference was meant to rally regional governments into partnership with the Pentagon to improve maritime security in the Gulf of Guinea, as the Atlantic Ocean waters off Nigeria were known. “Achieving coastal security in the Gulf of Guinea is key to America’s trade and investment opportunities in Africa, to our energy security, and to stem transnational threats,” Frazer said. She continued: “Let us consider oil.” If African governments protected oil commerce, they could prosper. But they required the goodwill of international oil giants. “If kidnapping of their workers and attacks on their facilities continue,” those companies were unlikely to stay.31