CONNECTING DRUGS AND OIL -- CHAPTER 4 FROM "CROSSING THE RUBICON"

by Michael C. Ruppert

I wrote the following story for the October 24, 2000, issue of From The Wilderness. I have included excerpts here, and I thank author Kevin Phillips for quoting from it in his 2004 bestseller, American Dynasty.

Halliburton Corporation's Brown and Root is one of the major components of THE BUSH-CHENEY DRUG EMPIRE

FTW October 24, 2000 -- The success of Bush vice-presidential running mate Richard Cheney at leading Halliburton, Inc. to a five-year $3.8-billion "pig-out" on federal contracts and taxpayer-insured loans is only a partial indicator of what may happen if the Bush ticket wins in two weeks. A closer look at available research, including an August 2, 2000, report by the Center for Public Integrity (CPI) at <www.public-i.org>, suggests that drug money has played a role in the successes achieved by Halliburton under Cheney's tenure as CEO from 1995 to 2000. This is especially true for Halliburton's most famous subsidiary, heavy construction and oil giant, Brown and Root. A deeper look into history reveals that Brown and Root's past as well as the past of Dick Cheney himself, connect to the international drug trade on more than one occasion and in more than one way.

This June the lead Washington, DC attorney for a major Russian oil company, connected in law enforcement reports to heroin smuggling and also a beneficiary of US backed loans to pay for Brown and Root contracts in Russia, held a $2.2 million fund-raiser to fill the already bulging coffers of presidential candidate George W. Bush. This is not the first time that Brown and Root has been connected to drugs, and the fact is that this "poster child" of American industry may also be a key player in Wall Street's efforts to maintain domination of the half trillion dollar a year global drug trade and its profits. And Dick Cheney, who has also come closer to drugs than most people suspect, and who is also Halliburton's largest individual shareholder ($45.5 million), has a vested interest in seeing to it that Brown and Root's successes continue.

Of all American companies dealing directly with the US military and providing cover for CIA operations, few firms can match the global presence of this giant construction powerhouse which employs 20,000 people in more than 100 countries. Through its sister companies or joint ventures, Brown and Root can build offshore oil rigs, drill wells, construct and operate everything from harbors to pipelines to highways to nuclear reactors. It can train and arm security forces, and  it can now also feed, supply, and house armies. One key beacon of Brown and Root's overwhelming appeal to agencies like the CIA is that, from its own corporate web page, it proudly announces that it has received the contract to dismantle aging Russian nuclear-tipped ICBMs in their silos. 

Furthermore, the relationships between key institutions, players, and the Bushes themselves suggest that under a George "W" administration the Bush family and its allies may well be able, using Brown and Root as the operational interface, to control the drug trade all the way from Medellin to Moscow.

Originally formed as a heavy construction company to build dams, Brown and Root grew its operations via shrewd political contributions to Senate candidate Lyndon Johnson in 1948. Expanding into the building of oil platforms, military bases, ports, nuclear facilities, harbors, and tunnels, Brown and Root virtually underwrote LBJ's political career. It prospered as a result, making billions on US  Government contracts during the Vietnam War. The Austin Chronicle in an August 28, Op-ed piece entitled "The Candidate From Brown and Root" labels Republican Cheney as the political dispenser of Brown and Root's largesse. According to political campaign records, during Cheney's five-year tenure at Halliburton the company's political contributions more than doubled to $1.2 million.  Not surprisingly, most of that money went to Republican candidates.

Independent news service, <www.newsmakingnews.com>, also describes how, in 1998, with Cheney as chairman, Halliburton spent $8.1 billion to purchase Dresser Industries, a supplier of oil industry equipment and drilling machinery.  This made Halliburton a corporation that will have a presence in almost any future oil drilling operation anywhere in the world. And it also brought back into the  family fold the company that had once sent a plane -- also in 1948 -- to fetch the new Yale Graduate George H.W. Bush, to begin his career in the Texas oil business. Bush the elder's father, Prescott, served as a managing director for the firm that once owned Dresser, Brown Brothers Harriman.

It is clear that everywhere there is oil there is Brown and Root. But increasingly, everywhere there is war or insurrection there is Brown and Root also. From Bosnia and Kosovo, to Chechnya, to Rwanda, to Burma, to Pakistan, to Laos, to Vietnam, to Indonesia, to Iran, to Libya, to Mexico, to Colombia, Brown and Root's traditional operations have expanded from heavy construction to include the provision of logistical support for the US military. Now, instead of US Army quartermasters, the world is likely to see Brown and Root warehouses scoring and managing everything from uniforms to rations to vehicles.

Drugs

As described by the Associated Press, during "Iran-Contra" Congressman Dick Cheney of the House Intelligence Committee was a rabid supporter of Marine Lt. Col. Oliver North. This was in spite of the fact that North had lied to Cheney in a private 1986 White House briefing. Oliver North's own diaries and subsequent investigations by the CIA inspector general have irrevocably tied him directly to  cocaine smuggling during the 1980s and the opening of bank accounts for one firm moving four tons of cocaine a month. This, however, did not stop Cheney from actively supporting North's 1994 unsuccessful run for the US Senate from Virginia just a year before he took over the reins at Brown and Root's parent company, Dallas-based Halliburton Incorporated in 1995.

As the Bush secretary of defense during Desert Shield/Desert Storm (1990-91), Cheney also directed special operations involving Kurdish rebels in northern Iraq.  The Kurds' primary source of income for more than 50 years has been heroin smuggling from Afghanistan and Pakistan through Iran, Iraq, and Turkey. Having had some personal experience with Brown and Root, I took note when the Los Angeles Times observed that on March 22, 1991, a group of gunmen burst into the Ankara, Turkey, offices of the joint venture, Vinnell, Brown and Root and assassinated retired Air Force Chief Master Sergeant John Gandy.

In March of 1991, tens of thousands of Kurdish refugees, long-time assets of the CIA, were being massacred by Saddam Hussein in the wake of the Gulf War.  Saddam, seeking to destroy any hopes of a successful Kurdish revolt, found it easy to kill thousands of the unwanted Kurds who had fled to the Turkish border seeking sanctuary. There, Turkish security forces, trained in part by the Vinnell, Brown and Root partnership, turned back thousands of Kurds into certain death. Today, the Vinnell Corporation (a TRW Company) is, along with the firms MPRl and  DynCorp (FN/June, 2000), one of the three pre-eminent private mercenary corporations in the world. It is also the dominant entity for the training of security forces throughout the Middle East. Not surprisingly the Turkish border regions in  question were the primary transshipment points for heroin grown in Afghanistan and Pakistan and destined for the markets of Europe.

A confidential source with intelligence experience in the region subsequently told me that the Kurds "got some payback against the folks that used to help them move their drugs." He openly acknowledged that Brown and Root and Vinnell both routinely provided NOC, or non-official cover, for CIA officers. No surprise there.

From 1994 to 1999, during US military intervention in the Balkans where, according to "The Christian Science Monitor" and Jane's Intelligence Review," the Kosovo Liberation Army controls 70 percent of the heroin entering Western Europe, Cheney's Brown and Root made billions of dollars supplying US troops from vast facilities in the region. Brown and Root support operations continue in  Bosnia, Kosovo, and Macedonia to this day.

Dick Cheney's footprints have come closer to drugs than is generally recognized. A Center for Public Integrity report from last August brought them even closer. It would be factually correct to say that there is a direct linkage of Brown and Root facilities (often in remote and hazardous regions) between every drug-producing region and every drug-consuming region in the world. These coincidences, in and of themselves, do not prove complicity in the trade. Other facts, however, lead inescapably in that direction.

A Direct Drug Link

The CPI report entitled "Cheney Led Halliburton To Feast at Federal Trough" written by veteran journalists Knut Royce and Nathaniel Heller describes how, under five years of Cheney's leadership, Halliburton, largely through subsidiary Brown and Root, enjoyed $3.8 billion in federal contracts and taxpayer insured loans. The loans had been granted by the Export-Import Bank (EXIM) and the  Overseas Private Investment Corporation (OPIC). According to Ralph McGehee's "CIA Base @," both institutions are heavily infiltrated by the CIA and routinely provide NOC to its officers.

One of those loans to Russian financial/banking conglomerate The Alfa Group of Companies contained $292 million to pay for Brown and Root's contract to refurbish a Siberian oil field owned by the Russian Tyumen Oil Company. The Alfa Group completed its 51 percent acquisition of Tyumen Oil in what was allegedly a rigged bidding process in 1998. An official Russian government report  claimed that the Alfa Group's top executives, oligarchs Mikhail Fridman and Pyotr Aven "allegedly participated in the transit of drugs from Southeast Asia through Russia and into Europe."

Fridman and Aven, who reportedly smuggled the heroin in connection with Russia's Solntsevo mob family, were the same executives who applied for the EXIM loans that Halliburton's lobbying later safely secured. As a result, Brown and  Root's work in Alfa Tyumen oil fields could continue -- and expand.

The CPI story reports allegations that organized criminal interests in the Alfa Group had stolen the oil field by fraud. It then uses official reports from the FSB  (the Russian equivalent of the FBI), oil companies such as BP-Amoco, former CIA and KGB officers, and press accounts to establish a solid link to Alfa Tyumen and the transportation of heroin.

In 1995, sacks of heroin disguised as sugar were stolen from a rail container leased by Alfa Echo and sold in the Siberian town of Khabarovsk. A problem arose when many residents of the town became "intoxicated" or "poisoned." The CPI story also stated, "The FSB report said that within days of the incident, Ministry of Internal Affairs (MVD) agents conducted raids of Alfa Eko buildings and found  'drugs and other compromising documentation."'

Both reports claim that Alfa Bank has laundered drug funds from Russian and Colombian drug cartels.

The FSB document claims that at the end of 1993, a top Alfa official met with Gilberto Rodriguez Orejuela, the now imprisoned financial mastermind of Colombia's notorious Cali cartel, to conclude an agreement about the transfer of money into the Alfa Bank from offshore zones such as the Bahamas, Gibraltar, and others. The plan was to insert it back into the Russian economy through the purchase of stock in Russian companies "He (the former KGB agent] reported that there was evidence regarding (Alfa Bank's] involvement with the money laundering of Latin American drug cartels."

It would be difficult for Cheney and Halliburton to assert mere coincidence in all of this, as CPI reported that Tyumen's lead Washington attorney James C. Langdon Jr. at the firm of Aikin Gump "helped coordinate a $2.2 million fundraiser for Bush this June. He then agreed to help recruit 100 lawyers and lobbyists in the capital to raise $25,000 each for W's campaign."

The heroin mentioned in the CPI story originated in Laos, where longtime Bush allies and covert warriors Richard Armitage (Note: Richard Armitage is currently the U.S. deputy secretary of state) and retired CIA ADDO (associate deputy director of operations) Ted Shackley have been repeatedly linked to the drug trade. It then made its way across Southeast Asia to Vietnam, probably the port of Haiphong. Then the heroin sailed to Russia's Pacific port of Valdivostok from whence it subsequently bounced across Siberia by rail and  thence by truck or rail ro Europe, passing through the hands of Russian Mafia leaders in Chechnya and Azerbaijan. Chechnya and Azerbaijan are hotbeds of both armed conflict and oil exploration; Brown and Root has operations all along this route.

This long, expensive, and tortured path was hastily established, as described by FTW in previous issues, after President George (Herbert Walker] Bush's personal envoy Richard Armitage, holding the rank of Ambassador, traveled to the former Soviet Union to assist it with its "economic development" in 1989. Trafficking heroin from the Golden Triangle (Burma, Laos, and Thailand), there was no way to deal with China and India but to go around them.

The Clinton administration took care of all that wasted travel for heroin with the 1998 destruction of Serbia and Kosovo and the installation of the KLA as a regional power. That opened a direct line from Afghanistan to Western Europe, and Brown and Root was right in the middle of that too. The Clinton skill at streamlining drug operations was described in detail in the May issue of FTW in a story entitled "The Democratic Party's Presidential Drug Money Pipeline." That article has since been reprinted in three countries. The essence of the drug economic lesson was that by growing opium in Colombia and by smuggling cocaine and heroin from Colombia to New York City through the Dominican Republic and Puerto Rico (a virtual straight line), additional smuggling routes could be shortened or even eliminated. This lowered the level of risk, reduced operating costs, increased profits, and eliminated competition.

FTW suspects the hand of Medellin co-founder Carlos Lehder in this process and it is interesting to note that Lehder, released from prison under Clinton in 1995, is now reportedly active in both the Bahamas and South America. Lehder was known during the eighties as "the genius of transportation." I can well imagine a Dick Cheney, having witnessed the complete restructuring of the global drug trade in the last eight years, going to George W. and saying, "Look, I know how we can make it even better." One thing is certain. As quoted in the CPI article, a Halliburton vice president noted that if the Bush-Cheney ticket was elected, "the company's government contracts would obviously go through the roof."

Postcript 2003

Some two years after this story was written, I note with irony that Brown and Root's (now Kellogg, Brown and Root, or KBR) government services continue to expand. This in spite of the fact that, along with about 25 other large companies, Halliburton-KBR has been sued by stockholders and public interest groups for cooking its books to inflate stock values during Cheney's tenure. As in so many  other instances, the administration has made it clear what their response is. On July 26, 2002 process servers, seeking to serve Vice President Cheney with a subpoena for his role in the allegedly criminal behavior, were turned away from the White House by armed guards. 1

So much for the rule of law.

I also note with irony that, according to a November 2, 2002, Reuters story, a Colombian court has just ordered the release of Orejuela brothers, Miguel and Gilberto (arrested in 1995), from prison. Pro-American President Alvaro Uribe, a staunch opponent of the FARC guerillas who control most of southern Colombia with its oil and cocaine, has expressed shock and outrage. But I strongly suspect that the Orejuelas are back for a purpose, i.e., the control of narcotics cash flows once the FARC have been defeated, or as US control of the drug trade in the occupied territories of Afghanistan and Iraq requires special expertise. 2

Gilberto Orejuela was, in fact, released from prison speedily and without interference by the Colombian government on November 7, 2002. 3

Iraqi invasion validates the map

Shortly after the US occupation of Iraq in April 2003, a large no-bid contract was awarded to Halliburton subsidiary Kellogg, Brown and Root (KBR) to extinguish oil well fires. 4 There were not many such fires, and long-time critics of Halliburton were vocal about the apparent patronage shown to the company, once headed by Vice President Dick Cheney, by the no-bid process. Although Halliburton- KBR efforts to get further rebuilding contracts for hospitals and bridges were awarded to other major campaign donors like the Bechtel Group, KBR held on to the oil contract and also secured lucrative contracts to handle food and supplies for American troops. Just one such logistics contract had paid KBR $90 million by early May with little positive result and no apparent stimulation for the Iraqi economy. 5 This is the same company that I had personally seen involved in heroin smuggling with CIA personnel in 1977. KBR is always full of surprises.

But the biggest surprises were yet to come.

In mid-April the New York Times reported that the KBR oil well firefighting contract was worth up to $7 billion -- which raised more eyebrows because the fires were out. 6 Further disclosures continued to arouse vocal public reaction, especially from California Congressman Henry Waxman, but none so much as the fact that the no-bid contract was ultimately found to have given Halliburton- KBR the authority to administer all of Iraq's oil fields and to distribute the oil. This striking development was the result of a decision awarded under an "extra work" clause in the firefighting contract. The original source of the contract was the US Army Corps of Engineers, under the supervision of then Army Secretary Thomas White, a former Enron executive. 7 

I could only laugh on May 11 when a story in Pakistan's the Balochistan Post reported that Baghdad, which had never had a drug problem and had never even seen heroin, had been suddenly "flooded with narcotics -- including heroin."  Citing reports from the UK's Independent, the story said that heroin was being traded in alleys, and that there had not been any drugs in the country until the US invasion. The story's headline read, "Where the CIA is in control, narcotics flourish --.  After Afghanistan, Baghdad is flooded with heroin." 8 Oil  pipelines reportedly make excellent vehicles for smuggling drugs. Oil-drilling equipment, sometimes arriving or departing by corporate jet, is rarely inspected for other priceless commodities.

[For more about the interrelationship between drugs and oil, I strongly recommend the book, Drugs, Oil and War: The United States in Afghanistan, Colombia and Indochina by Professor Peter Dale Scott, Ph.D.; Rowman and Littlefield, 2003.]

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