On Tuesday, the Los Angeles Times published an interview with Stanford professor of geophysics Mark Zoback in which he argued against a moratorium on fracking in California and lauded the oil and gas regulatory regimes in Pennsylvania and Texas. At the beginning of the article, Zoback is identified as “Stanford geophysicist since 1984, member of the National Academy of Engineering’s Deepwater Horizon investigation committee, personal ‘decarbonizer,’ [and] fracking expert.”
What the LA Times left off of Zoback’s CV is his role as an oil and gas industry insider. In addition to his position at Stanford and role on President Obama’s industry-stacked Natural Gas Subcommittee of the Energy Advisory Board, Zoback is a senior executive advisor to the oilfield services company Baker Hughes, the former chair the oil and gas consulting firm GeoMechanics International (purchased by Baker Hughes in 2008), and a director of the Research Partnership to Secure Energy for America, a federally funded think tank dedicated to “exploring, producing and transporting-to-market energy or other derivative products from ultra-deepwater and unconventional natural gas and other petroleum resources.”
Two weeks ago we reported on former New Mexico governor Bill Richardson’s failure to disclose his Advisor and Chairman positions at consulting firm APCO Worldwide, in his TIME op-ed promoting exporting liquified natural gas (LNG). From December 2012 to January 2014, APCO was contracted by the Ukrainian State Agency for Investment and National Projects for $330,000 to consult on improving the image of an LNG infrastructure project in the country. In November 2013 Richardson was busted for not disclosing this conflict of interest in an article he authored for the Financial Times on exporting LNG to Europe. The Financial Times was forced to issue a correction.
It seems that Richardson has yet to learn his lesson, and is in fact poised to benefit from his high-profile stance supporting LNG exports. On “Platts Energy Week TV” Sunday, Richardson supported speeding up the Department of Energy’s review process for LNG export terminal applications and stressed the role of LNG in providing security to countries in Europe:
“I think it’s important that the United States, as a nation, either pass legislation or executive orders that make it easier to construct these LNG terminals, export natural gas and oil, and increase our energy friendship with these countries that are really fearful of what’s going to happen to them, like what happened to Ukraine.”
You can view the full interview below:
On Tuesday TIME published an opinion piece by former New Mexico governor Bill Richardson. In “Our Best Response to Russia is Energy Security,” Richardson argued in favor of using LNG exports to respond to the situation in Ukraine and send “a strong signal” to Moscow:
Strongly supporting projects, such as the Trans-Adriatic and Anatolian Pipelines to extend the East-West energy corridor (connecting the Caucasus and Central Asia to world markets), is not just important for securing regional independence from Russia. These projects are in the West’s long-term interests as well.
In the article TIME noted that Bill Richardson is “a former Secretary of Energy and Ambassador to the U.N.” but failed to disclose that he is an Advisor to consulting firm APCO Worldwide and Chairman of APCO’s Global Political Strategies (GPS) group. In December 2012 APCO was contracted by the Ukrainian State Agency for Investment and National Projects for $330,000 to consult on improving the image of an LNG infrastructure project in the country. From Kyiv Post:
When justifying the choice of a one-bidder tender, the agency said that APCO Worldwide has got experience in communication support and PR in large-scale projects around the globe and can provide professional communication and PR support to the national LNG Terminal project.
In November 2013, while APCO was still under contract with the Ukrainian state agency, The Financial Times (FT) published an article by Bill Richardson (Aptly named “American should not try to keep its shale gas to itself”) promoting US exports of LNG to Ukraine and Europe, without disclosing his APCO tie. After this egregious conflict of interest was exposed it was acknowledged and corrected by FT.
Straight forward connection.
After 13 months, APCO’s contract with the Ukrainian State Agency for Investment was cancelled in January for unknown reasons. But Bill is still on message promoting LNG exports, leading us to wonder about his current client list. Will TIME take a cue from The Financial Times and issue a correction?
Last fall we issued a report on conflicts on interest in the Syria debate, wherein we tracked the defense industry ties of 22 expert commentators and 7 think tanks who commented on military intervention in Syria. With the uptick in expert analysis on how/if/when the US should respond to the situation in Ukraine we will inevitably see many of the same experts weigh in. In fact we already are.
Today Nicholas Burns was quoted in a New York Times article, “Pressure Rising as Obama Works to Rein in Russia,” and described as “a career diplomat” and “under secretary of state in the George W. Bush administration”:
“It’s the most important, most difficult foreign-policy test of his presidency,” said R. Nicholas Burns, a career diplomat who became under secretary of state in the George W. Bush administration. ”The stakes are very high for the president because he is the NATO leader. There’s no one in Europe who can approach him in power. He’s going to have to lead.”
Nick Burns was an avid commentator during the debates on US intervention in Syria and seems to have carried his disclosure issues into this debate. Burns is a Senior Counselor at the Cohen Group, which boasts a robust defense and homeland security practice and has counted Lockheed Martin, General Dynamics, and United Technologies among its lobbying clients. He is also a director of Entegris, a manufacturing company that provides materials for Aerospace applications, and a board member of the Atlantic Council, which receives financial donations from defense industry heavy-hitters including SAIC, Lockheed Martin, Raytheon, Boeing, and General Dynamics.
As the situation in Ukraine advances we expect we’ll be busy reporting more defense industry ties of experts who feel more comfortable pontificating on sensitive national security issues than on disclosing their own interests.
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Last week, Senator Chuck Schumer recused himself from further oversight of the Comcast-Time Warner Cable merger after we reported that his brother had played a key role in the deal. Schumer had initially called the merger “a good deal for New York.” His office later claimed that the Senator had not known that his brother was involved.
Schumer’s recusal raises an important question: as a powerful Senator, a member of the antitrust subcommittee, and the brother of a top M&A attorney, is this the first time he recused himself from oversight of a merger deal? His brother has been a key dealmaker on many mergers which required antitrust approval, and several have triggered regulatory action – in the US and abroad. Schumer’s office has not responded to multiple requests for information about past recusals. A Senate Judiciary Committee official turned up no past recusals in a review, but suggested that Schumer’s office would be a better source.
In any case, Robert Schumer did not put together the merger that really caught our eye – his wife did. Pamela Seymon, the Senator’s sister-in-law, was Ticketmaster’s lead outside counsel on its 2009 merger with Live Nation, a $2.5 billion deal which drew the ire of consumer groups, musicians, and lawmakers. Initially, Schumer opposed the merger. Then he seemed to have a change of heart, and began lauding Ticketmaster for collaborating with him on legislation targeting the ticket resale market. On the antitrust implications of the deal, he went silent.
Today Grist released an article on the Environmental Defense Fund’s (EDF) extensive ties to Walmart and the Walton family. $66 million ties to be exact. According to the article these high-dollar contributions from the Walton Family Foundation bought Walmart some serious green cred as EDF, a prominent environmental group with a names that suggests a strong commitment to the environment, promoted the company’s sustainability campaign in press releases and articles and backed the company’s claims about its renewable energy efforts. From Grist:
A recent Fast Company article touting Walmart’s impact on renewable power, for example, relied on just three sources: Walmart, a company contracting with Walmart, and EDF. Perhaps not surprisingly, the article is riddled with half-truths and one critical factual error. It says that Walmart’s greenhouse gas emissions have declined by 20 percent since 2005, when in fact they have risen by 14 percent, according to the company’s own disclosures.
EDF not only failed to disclose their financial ties to the Waltons but misled journalists and the public by continually claiming that they do not receive financial support from Walmart or other corporate entities. They are technically correct. The money comes from the Walton Family Foundation, which is directed by the Waltons, the children and grandchildren of Sam Walton (Founder of Walmart), who sit on Walmart’s board, hold the chairmanship of Walmart’s board, and own over half of Walmart’s stock. Spin on, EDF.
It is quickly becoming clear that JPMorgan’s tentative $13 billion settlement with the Department of Justice is not the massive, overly-punitive sanction that some press reports have made it out to be. The weaknesses in the deal may be explained in part by the fact that in arranging the settlement, JPMorgan was negotiating through the revolving door.
Dudley’s daybook goes dark
By Kevin Connor • Oct 15, 2013 at 15:05 EST
In the wake of a report from ProPublica that the New York Fed fired a senior bank examiner for challenging inadequacies in Goldman Sachs’ management of conflict of interests, I thought it would be interesting to take a look at the daily schedules of the New York Fed’s president, William Dudley, a Goldman alum.
Dudley spent two decades at Goldman Sachs before joining the New York Fed, so he was steeped in the ways of the bank, which apparently include a systematic, almost absurd disregard for conflict of interest monitoring and management. According to the ProPublica article, Goldman has no firm-wide conflict of interest policy. One Goldman unit instructs employees not to write down their conflicts. The bank’s conflict of interest unit is the same as its business selection unit, a bizarre structure that almost seems designed to encourage conflicts. The head of this unit does not see it as serving any compliance function. Carmen Segarra, the bank examiner who was fired, suggested that Goldman executives could not even demonstrate a basic understanding of what a conflict of interest is.
Was the New York Federal Reserve conflict of interest training enough to help Dudley overcome years of learning the Goldman way? Had he really avoided any awareness or involvement in the Segarra situation? These are hard questions to answer, and answers are unlikely to surface in any documents (the Goldman way: don’t write it down). A New York Fed spokesperson told ProPublica that Dudley was not involved in firing Segarra. But Dudley’s calendar might reveal that he had had meetings with Goldman executives during the whole saga, which would be interesting and would probably look bad for Dudley (though it would not be proof of his involvement).
Ecology & Environment (E & E), the New York Department of Environmental Conservation (DEC) contractor whose membership in the lobbying group Independent Oil and Gas Association (IOGA) of New York set off alarm bells, “clarified” its relationship with the organization last week.
In a letter released April 24, E & E asserted that it was never a member of IOGA, though it had previously paid an employee’s membership fees “in order to attend IOGANY’s Conferences and receive its newsletter to be kept apprised of new technical developments in the industry and develop industry contacts.” The environmental consultant castigated IOGA for not obtaining authorization to name Ecology & Environment in its letter to Andrew Cuomo pushing to move forward with fracking in New York State. E & E also declared that it had directed its employee to terminate his IOGA membership.
According to the April 24 letter, “E & E’s nationwide policy has been to not take any position on fracking and only provide objective environmental consulting;” however, the company has a financial interest in New York’s approving the practice evinced in corporate financial reports and past work for oil and gas companies. E & E has also been criticized for its overly optimistic prediction of fracking’s economic effects written on contract for the DEC and further has ties to a now-defunct fracking research institute at the University at Buffalo that incorrectly reported that the incidence of major environmental citations had declined in Pennsylvania.
When Sen. Chris Dodd (D-Connecticut) announced last January that he would not seek reelection, some media outlets declared that Dodd’s retirement would actually increase the chances that robust financial regulatory reform would be enacted (for example, see articles by The Washington Post and BusinessWeek). Such analyses demonstrate a near total ignorance of the processes of lobbying and campaign financing that dominate Congress. In reality, Dodd’s announcement likely signaled that the aggressive reform of the finance industry widely called for at the height of the crisis will not become law; at least not while Dodd remains Chairman of the Senate Banking Committee.
The notion that the decision to retire “freed” Dodd from political pressure, allowing him to concentrate on drafting legislation that would become his legacy, greatly underestimates the strength of the ties between Wall Street and Senators like Dodd. During his many years in the Senate, Dodd cultivated his ties to Wall Street and the industry’s K Street lobbyists to the extent that he essentially has two constituencies: the citizens of Connecticut, and the finance industry. Having freed himself from accountability to the former, he can now focus on serving the latter.