Ghost Wars

by Steve Coll

  The Clinton administration’s policy, said its leading National Security Council expert, was to “promote the independence of these oil-rich countries, to in essence break Russia’s monopoly control over the transportation of oil in that region, and, frankly, to promote Western energy security through diversification of supply.” The Clinton White House supported “multiple pipelines” from Central Asia along routes that did not benefit Russia or Iran. Clinton believed that these pipelines were crucial to an evolving American energy policy aimed at reducing dependence on Middle Eastern supplies. Blocking Iran from Central Asia’s new oil riches was also a key goal of American policy, but there were only a few pipeline routes that could bypass Iran. Unocal’s Afghan plan was a rare one that conformed exactly to Clinton’s policy. Unocal proposed two pipelines, one for oil and one for gas; they would descend from the fields in southeastern Turkmenistan, snake through western and southern Afghanistan, and terminate in Pakistan. The U.S. ambassador in Ashkhabad and other American officials agreed to actively promote Unocal’s cause with Niyazov.9

  The Afghanistan pipeline project, Marty Miller believed, was “a no-brainer” if only “you set politics aside.” As the weeks passed, however, the politics only thickened.

  PRINCE TURKI AL-FAISAL had long seen Afghanistan as a kind of Central Asian fulcrum, a transit hub. It had been a wheelhouse for the Soviet Union’s drive toward Middle Eastern oil, the Saudi intelligence chief believed. Now the country was emerging as a pivot point for trade and energy supplies in the post-Soviet era. Turki endorsed Benazir Bhutto’s plans to enrich Pakistan by reviving the old Silk Road trading routes through Afghanistan. The Saudi prince admired anyone willing to take the leap of imagination necessary to pursue progress in Afghanistan and Muslim Central Asia. Lately Turki had met such a person: Carlos Bulgheroni, an elegant Argentinian oil man of Italian descent.

  Bulgheroni, who spoke in a rich multinational accent, ran a family oil company, Bridas, based in Buenos Aires, that had embarked on quixotic efforts to strike a fortune in the new Central Asian republics. Seeking a partner, Bulgheroni contacted Prince Turki at the headquarters of Saudi intelligence in Riyadh. They met, and Turki was charmed by Bulgheroni’s amazing ideas about doing business in difficult places. Bulgheroni had developed his own plans to rescue Turkmenistan’s “stranded gas” and pipe it across Afghanistan to Pakistan—months before Unocal surfaced with a similar idea. Bulgheroni wanted Prince Turki to be his business partner; Saudi intelligence, after all, had great clout in all the countries where Bulgheroni hoped to develop his pipeline deal. Turki declined to become a direct partner, but he referred the Argentine to Saudi businessmen Turki knew.10

  The Saudi intelligence chief also introduced Bulgheroni to his contacts in Pakistan. Javed Qazi, the general in charge of ISI, saw the pipeline as a terrific idea. Benazir Bhutto, impressed that such an important patron of Pakistan as Prince Turki had made the introduction, asked her petroleum and economics advisers to evaluate Bulgheroni’s plan. They doubted it would work, but Bhutto told her colleagues there was no harm in signing a memorandum of understanding pledging Pakistan to buy Bulgheroni’s gas if he ever managed to pipe it across Afghanistan.11

  Miller met with Carlos Bulgheroni that summer in Turkmenistan. They talked about whether there was some way Unocal and Bridas could join forces, but they could not find common ground. Miller found Prince Turki’s friend “a confusing guy” who talked “in riddles.” As for the competitive tension, in Miller’s experience there was nothing especially unusual about two multinational oil companies fighting over the same deal with similar plans. Unocal’s pipeline would draw from different gas fields than Bridas. In any event, Miller found Niyazov willing to deal with Unocal. If Bulgheroni and Prince Turki were cut out, so be it. That was how the oil game was played.

  After a few more shouting matches, Miller’s breakthrough in Ashkhabad came in late September 1995. His Turkmen negotiators told him that Niyazov had decided once and for all to abandon Bulgheroni and go with Unocal. In its final form the Unocal contract spelled out an $8 billion project involving two pipelines that would each travel more than eight hundred miles across southern Afghanistan.

  Niyazov insisted that Unocal stir up some publicity for their agreement. The Father of All Turkmen was traveling to New York for the fiftieth birthday celebration of the United Nations, and he wanted to throw a party to announce his new pipelines that would free him once and for all from Russia’s grip. Unocal hired a venue planner, dressed an elegant Manhattan building in celebratory bunting, and hired Henry Kissinger to make a speech.

  There were no Afghans invited to the Manhattan affair. John Imle promised that Unocal would open negotiations soon with “the appropriate parties.”12

  Kissinger noted the number of Afghan factions battling over the land where the Unocal pipeline might one day run and could not help but feel skeptical. Unocal’s plan, Kissinger quipped, quoting Dr. Samuel Johnson, appeared to represent “the triumph of hope over experience.”13

  WITH TURKMENISTAN SEWED UP, Marty Miller now opened a Unocal lobbying campaign in two cities: Washington and Islamabad.

  It was an easy time for an American oil executive to find an audience in the Clinton White House. Clinton had lost control of Congress to the Republican Party during the 1994 election, and his political team sought to raise massive campaign funds for a comeback attempt, plus Clinton’s own reelection bid in 1996. Campaign finance rules had been greatly loosened. The White House wanted to assure corporate donors that the administration would listen to their concerns. Clinton’s America-first policies emphasized the promotion of corporate interests abroad. American oil companies doing business in Central Asia also advanced the administration’s efforts to contain Iran. For all these reasons, when Miller came knocking on doors in Washington, he found they opened quickly.

  Miller flew to Washington from Houston every month or two. At the White House he met regularly with Sheila Heslin, the director of energy issues at the National Security Council, whose suite next to the West Wing coursed with visitors from American oil firms. Miller found Heslin responsive, full of information and ideas, and very supportive of Unocal’s agenda in Afghanistan.

  Across the river in Langley, some dissidents at the CIA saw Heslin’s office that year as afloat on a “sea of self-absorption,” as the Near East Division’s Robert Baer put it. To him “the White House and the National Security Council became cathedrals of commerce where the interests of big business outweighed the interest of protecting American citizens at home and abroad.” Because of what he described as sloppy oversight of his portfolio, Deputy National Security Adviser Sandy Berger held $90,000 worth of stock in Amoco at a time when he oversaw an interagency committee that worked with Heslin to devise U.S. policy toward the Caspian Sea, where Amoco had large contracts. Even Berger’s political opponents did not argue that he had acted corruptly, but there was so much money in the air, so much talk of billion-dollar contracts and politically sensitive Central Asian negotiations, that it seemed to dictate American priorities.14 An advocacy center at Clinton’s Department of Commerce lobbied for American corporations in overseas contract competitions where there was only one U.S. company fighting against a foreign firm, as in Unocal’s case.

  For their part, Berger, Heslin, and their White House colleagues saw themselves engaged in a hardheaded synthesis of American commercial interests and national security goals. They wanted to use the profit-making motives of American oil companies to thwart one of the country’s most determined enemies, Iran, and to contain the longer-term ambitions of a restless Russia. This was a traditional and creative form of American statecraft, they believed. The previous generation had produced America’s crucial security and oil alliances with Saudi Arabia and other Persian Gulf emirates. Now big oil and gas deals could secure a new belt of American allies from Turkey to China.

  Marty Miller found Robin Raphel, the Assistant Secretary of State for South Asia, who oversaw policy toward Afgha
nistan, “very helpful.” He met with her whenever they were both in Washington. They compared notes about trips they each took to the region, the conversations they had, and the impressions they formed about Afghan and Pakistani politics.

  Raphel believed the Unocal pipeline could help bring peace and jobs to Afghanistan. Pakistan and India needed the gas. The Afghans needed the revenue they would receive from transit fees if the pipeline were built. Here was a business deal that might literally tie Afghanistan together, she believed, creating new incentives for regional cooperation. In an administration where Raphel struggled to find any cause that would draw attention and resources toward Afghanistan, the Unocal pipeline offered a new and salable rationale for U.S. engagement in Afghanistan, which Raphel favored for many reasons, not only because of the pipeline.15

  Moreover, the pipeline’s economics seemed to promote the kind of all-party peace negotiations, including the Taliban, favored by Raphel and her State Department colleagues. Commercial banks were not likely to lend money to finance a project as risky as this one. If they did, their high interest rates would probably bust the deal. The most realistic way for Unocal to find the sums it needed, Miller said, would be to borrow from multilateral lenders such as the World Bank and the Asian Development Bank. These development banks were funded by rich governments to promote economic growth in poor countries. They would lend money only if Unocal’s pipeline linked countries with recognized, stable governments. With the Taliban militia on the march from Kandahar and with the Kabul government’s prime minister at war with its president, Afghanistan obviously was not such a place. Unocal could only achieve its goals, then, if it used the lure of its pipeline revenues to persuade Afghanistan’s factions to unite around a single government blessed by the United Nations. This was also the stated goal of American policy toward Afghanistan, albeit a policy that was lightly examined, adrift, and poorly funded. As they examined the details of the pipeline project, Raphel and the Clinton White House persuaded themselves that what was good for Unocal might also be good for Afghanistan.

  Marty Miller’s second mission was to persuade Benazir Bhutto that what was good for Unocal might also be good for Pakistan. This was a more difficult sell. Prince Turki’s friend Carlos Bulgheroni continued to fight for his own rival pipeline project. With the aid of Prince Turki’s introduction, Bulgheroni had established close ties with officials in Bhutto’s government.

  Miller knew that until Pakistan agreed to buy the gas piped by Unocal across Afghanistan, there was no way he could finance the project. It was essential that Bhutto be convinced to drop Bulgheroni’s pipeline and embrace Unocal’s. Miller asked Robin Raphel, Sheila Heslin, and other Clinton administration officials for help in Islamabad. They agreed to pitch in.

  THE AMERICAN AMBASSADOR to Pakistan early in 1996 was Tom Simons. He was a career foreign service officer and a specialist in East European and Soviet affairs. Like Miller, he was at the end of a long career. As a young boy he had spent a year in Karachi, from 1948 to 1949. Pakistan had just been born and was struggling to find its footing. Simons thought of himself as an honorary Pakistani and arrived at the U.S. embassy in Islamabad with few preconceptions. He had not followed South Asian affairs closely in decades. His last ambassadorial post had been in Poland, and he had seen the vast transformations in that country after it embraced capitalism. Surely Pakistan, with its established commercial classes, could find a way to break out of its old thinking and seize the opportunities of a post-Soviet world, Simons believed.16

  As for neighboring Afghanistan, “There basically was no policy,” he recalled.

  When Simons settled in Islamabad, he quickly heard from Marty Miller and John Imle. Simons met with them or other Unocal executives at the embassy compound about every two to four weeks. They showed him computer-generated slides with “these wonderful graphics that, for a person of my age, it kind of wows you.”

  Persuading Bhutto’s government to drop the Argentine pipeline and embrace Unocal was a policy to which nobody in Washington “ever objected,” Simons recalled. “You did it in as quiet a way as possible. You didn’t go beat the drums for it, and you tried to find practical ways.” Simons educated himself about the deal and met with officials at Pakistan’s petroleum ministry every few months to lobby on Unocal’s behalf. Simons came to believe that construction of the pipelines could go a long way toward stabilizing Afghanistan. He even tried to persuade Unocal to incorporate small power stations along the route to allow Afghan regions more autonomy from Kabul.

  But it wasn’t clear how Unocal was going to persuade Bhutto to change her mind. At issue was not whether the pipeline was a good thing—Bhutto had already endorsed it in principle—but which oil company should benefit. Bhutto’s government had a partner already.

  Bhutto had entered into what many of her Westernized friends regarded as an unfortunate marriage. Her husband, Asif Zardari, was a Karachi businessman who seemed to style his ambitions on the godfather characters in Bollywood movies. Allegations about his corrupt business dealings had contributed to Bhutto’s first sacking as prime minister in 1990. During Bhutto’s second term Robin Raphel and other American officials gave her the benefit of the doubt. They assumed Zardari engaged in some corrupt dealings, but they had no firm evidence that he was stealing on a massive scale. For her part, Bhutto denounced the rumors about her husband as political trickery concocted by her sexist opponents to discredit her. She was emotional and unyielding in defense of her husband. She said her opponents were exploiting her unconventional marriage for political gain—a claim the Clintons, for two, could understand.17

  Unocal’s executives picked up rumors that Bhutto had decided to stick with her Argentinian pipeline deal because payoffs had been made to her husband. Unocal lobbyists began to drop hints to the Pakistani embassy in Washington that the company knew about the supposed payoffs. The message, as Bhutto and her allies understood it, seemed unmistakable: If Benazir Bhutto wanted to avoid trouble over the corruption issue, she should come clean and do business with Unocal.18

  In Islamabad, Tom Simons also received indications that someone in Bhutto’s government had been paid off on the Argentinian pipeline contract. Near the end of a spring day in 1996 he visited the prime minister in her office with an agenda three items long, each one having to do with an American corporation that wanted to do business in Pakistan. Bhutto arrived after long hours of boisterous political meetings. Her eyes were red, and she looked exhausted.

  Simons said directly that Bhutto should cancel her memo of understanding with Bridas and sign with Unocal instead. Bhutto didn’t like his tone. Members of her government had been under U.S. pressure over the Unocal pipeline for months. Simons seemed to be issuing a demand, not a request. “We could never do that because that’s breaking the contract,” she told him.

  “But that’s extortion!” Simons shot back forcefully. He did not elaborate, but it was clear that he was referring to Zardari, suggesting that her husband would only permit a Unocal deal if he was paid.

  The word extortion sent Bhutto into a fury. “You cannot say that!” she exclaimed. “You cannot be speaking for your president!”

  “Well, maybe it’s not the right word, but …”

  It was too late. Bhutto told Simons to leave. She ordered one of her advisers to draft a letter to the Clinton administration that night, complaining that the American ambassador had no right to treat Pakistan’s prime minister this way. When Simons got back to the embassy, his phone began to ring from Washington. He drafted his own letter of apology.19

  Simons explained sheepishly to Unocal’s executives that he had not been a great help with Bhutto. Pakistan was not going to endorse Unocal’s deal anytime soon. If Marty Miller was to secure the political agreements he needed, he would have to start finding friends elsewhere—inside Afghanistan.

  MILLER FLEW THE UNOCAL JET into Quetta in the late spring of 1996. He and his colleagues checked into a comfortable hotel and began to organize a co
nvoy to Kandahar. They hired a small caravan of Toyota double-cab pickup trucks, the Japanese sport utility vehicle favored by the CIA and its Afghan clients during the anti-Soviet jihad. To accompany himself and several other Unocal executives, Miller hired four drivers and about a dozen Afghan interpreters and guides. They called the Taliban to say they were coming.20

  Miller did not mind admitting that he was scared. He did not know what to expect. The Taliban seemed to follow a lot of bizarre rules, and he had never been to a place like Kandahar. He had worked up a colorful slide show with maps and numbers that showed the benefits of Unocal’s pipeline plans. He had paid to have the slides translated into Pashto and printed up as handouts for the Taliban. He threw the printouts and a few gifts into his truck and embarked on his way across the desert hills from Quetta.

  They crossed at Spin Boldak, where the Taliban uprising had begun about eighteen months before. They rolled through the treeless mud-rock hills toward the vineyards east of Kandahar. Miller was shocked by what he saw. After all these years there was still rubble everywhere, the residue of the anti-Soviet war. There was no wire between the telephone poles. In Kandahar there was no running water. Everywhere he looked, it seemed, there was a sign saying STAY AWAY—LANDMINES.

  They were directed to a Taliban guest house with no furniture inside. There were some rugs on the floor, and that was it, so Miller and his team rolled out their sleeping bags.

  As non-Muslims, they could not meet Mullah Omar, they were told. Other Taliban officials tried to absorb the slide show printouts. Miller talked about the millions of dollars that would flow into Afghanistan. “These are the good things that can come,” he told the Taliban, carefully listing the benefits. He felt that selling these people was like “dangling the carrot in front of the donkey.”