Exxon-Mobil, Official Supplier of the Empire

Exxon-Mobil, also known outside the US as «Esso», is the leading oil company worldwide (above British Petroleum and Shell) and performs businesses of exploration, production, supply, transportation and sales of oil and natural gas including its byproducts in nearly 200 countries and territories.

The company has reserves of 22 000 million barrels of oil in equivalent products (including bituminous sands) and net earnings of 14 500 million dollars in the year 2003. In terms of comparison, the GDP of a country like Mali was, in the same year, about 10 000 million dollars [1].

The history of Exxon, which is also the dean of the major world companies, is closely related to the development of economic liberalism since late 19th century because its founder, John D. Rockefeller I, was the first one to exploit the whole potential developing the principle of trust [2].

Controlling all the stages, from extraction to commercialization including transportation, through a secret majority interest in a cluster of intermediate associations, he was able to control the American oil market before attacking his rivals at world level.

John D. Rockefeller and the giant he created have become the symbols of economic power that certain multinationals exercise above the limits of the State’s authority.

The Rockefeller Saga

John D. Rockefeller was born in a farm in the State of New York in 1839. Son of an adventurous father, a nonqualified doctor who sold «miraculous» medical preparations based on opium and swindled his own children to instill in them the sense of business; and a very devoted Baptist mother who educated her children with honesty and austerity, to the extent of tying them to a pole to punish them for their disobedience. John started his carrier in Cleveland, Ohio, as an accountant.
Fascinated by the deeds of the first oil pioneers, he bought – at the age of 26 – a refinery in partnership with two English brothers, whom he got rid of quickly by buying their share.
John D. Rockefeller understood that the only way to control the market had to do more with the process of oil production and its distribution than the extraction itself. He focused his strategy on the railroad at a time in which the railroad network for oil transportation from the oilfields to Cleveland heralded the dependency on the small producers with regard to the carriers.
He then benefited a great deal from the discount systems and did not hesitate using his old competitors that he had just bought as spies among the remaining competitors. This was how he was able to build in 1870 the joint stock company Standard Oil Company, with a capital of 1 million dollars, of which he had 27% [3]. A battle blew up soon between the cartel of producers and carriers, with the Standard Oil at the forefront.
At that time, the crude oil was carried in open platforms and barrels that allowed the evaporation of the most volatile and precious part of the load. What arrived at the destination point was a thick residue that had lost most of its value.
After having purchased on a secret basis the railroad transport association Union Tanker Car Company and the patent of the hermetic and metallic tank wagons that are still used nowadays, John D. Rockefeller rented these means to his competitors to transport the produced crude oil up to the refineries.
When the same new producers developed their infrastructure to increase the production, Union Tanker canceled unilaterally the rental contracts of the platform transportation, thus causing huge losses due to the major investments made, and taking them to bankruptcy. The Standard Oil of Rockefeller then showed up to buy them at dirt-cheap prices, generally obtaining at the same time the neighboring railroads.
He applied the same stratagem for 10 years as long as it was not known that the same Rockefeller was also the owner of Union Tanker. While the aggressive methods that allowed Rockefeller to control 90% of the US energy market in 1910 are widely documented, and even brought about the modern antitrust laws, today they remain unmentioned in the history manuals.
In 1911, the US government pointed at the monopoly of the Standard Oil and demanded that it be dismantled. The Standard Oil was then split up into several small companies – whose names always included the initials «S.O.» like SOHIO in Ohio, SOCONY in New York, and of course, Esso, that would become later Exxon -, which did not have any real effect on the monopoly that Rockefeller kept in fact.
However, he promised himself to take revenge of the almighty State that he hated. In order to do it, he invested great part of his fortune to establish 12 gigantic banks that became the Federal Reserve when the Congress decided, in 1913, to turn to them for tax collection.
From that moment on, the interests accrued every year by the Federal Reserve, before the latter reverted to the government the amount of collected taxes, ended up for a while in the funds of Rockefeller’s dynasty.
Other two companies then played a role at world level: the British-Persian Petroleum Company, which mainly exploited the oilfields of Iran, and Shell, that was based on the former Dutch colonies in Indonesia and Southeast Asia [4].
Instead of burning themselves out, which would have led to price instability, the three rivals made an agreement on world price and distribution of the great oil regions. To achieve that, they had to eliminate or control all small local or national producers. The First World War gave them the possibility to do it.
The agitator role played by the Standard Oil when the United States got involved in the war, which would give the country the right to take part in the distribution of the old colonies in the Treaty of Versailles, remained poorly documented although it is undeniable.
What is certainly true is that, when it withdrew from the war in 1917 and rebuilt, a different economic model, the Russian Empire – turned into Soviet Union, - escaped from the greed of the cartel. This exactly happened when the utilization of oil was becoming a general issue, thanks to the invention of the internal combustion engine, which caused an enormous oil demand increase.
The «three sisters» decided then, with John D. Rockefeller’s driving force, to finance the fascist parties of Italy and the Nazi in Germany to declare the war against the USSR, overthrow the Bolsheviks and reopen the oil access.
In 1934, about 85% of oil products converted in Germany were imported. The only thing that allowed Hitler to prepare its impressive war machine was the production of synthetic fuel using the important German coalfields.
The necessary process of hydrogenation was developed and funded by the Standard Oil in association with I.G. Farben, that also produced chemical weapons used in combat and would later manufacture lethal gases for the death camps.
A report from the commercial attaché of the US Embassy in Berlin sent to the State Department in January 1933 indicated in alarm that “in two years, Germany would produce enough oil from coal and gasoline for a long war. The Standard Oil from New York contributed several millions of dollars to assist it”.
At the same time, the existing agreement between the Standard Oil and I.G. Farben – which guaranteed the German party the absolute control of synthetic rubber – significantly held off the effort of war of the United States. On the other hand, the managers of the Standard Oil of New Jersey, among them William Farish [5], contributed through their German branches to swell the personal fortune of Heinrich Himmler and were members of his group of friends up to 1944.
This collaboration with the Nazi Germany was not publicly known for as long as the war lasted, not even when the said branch of the Standard Oil was accused of betrayal due to its association before the war with I.G. Farben [6]. The financial transactions among the branches of the Standard Oil and I.G. Farben were made through a banking system established by Prescott Bush [7].
Although the Nazis failed in their attempt to recover the Russian oilfields, the Pacific War allowed the Standard Oil to take control of various oilfields of the region, which was before that a reserve of Shell.
In the United States, the disloyal strategies of the Standard Oil and the repeated problems with the state apparatus that adopted laws against the trusts, had turned John D. Rockefeller into a very unpopular personality.
However, he was able to save his honor – and at the same time to pay less taxes – handing down 550 million dollars (according to his grandson Nelson, who was vice-president of Gerald Ford in 1974) to different foundations and philanthropic works. The most famous one is the Rockefeller Foundation, still in activity.
John D. Rockefeller died very old, at the age of 98, and his only son John D. II therefore took control at 64, when he was already about to retire. The latter distributed 552 million dollars, paid 317 millions as taxes, and left his family a total of 240 millions.
His son, David Rockefeller, was successful in finances as president, and later as manager of the Chasse Manhattan Bank till 1981. He was also president of the Council on Foreign Relations from 1970 to 1985. The global value of the assets of all living descendants of John D. Rockefeller I was estimated, in 1974, at 2 billion dollars. His heirs still own 2% of the capital of Exxon-Mobil.

The Conquest of the World

With the strengthening of the Standard Oil, new practices of tax evasion appeared and eventually led to “flags of convenience”. The objective was to transfer the maximum of costs to the extent that the State had less chances to intervene, during the different stages of the chain of production, transportation and commercialization of oil. Michael Hudson, professor of economics at the University of Missouri and specialist of the US economic domain, said that David Rockefeller arranged a meeting for him with Jack Bennet, treasurer of the Standard Oil of New Jersey.
When Hudson asked him about how the association generated its benefits, Bennet came up with a vertical list of branches distributed throughout the chain. Since there are no taxes in Panama and Liberia, the branches were created there for oil business. Later, crude oil was sold to the branches at dirt-cheap prices before invoicing it again, to the maximum this time, to the Western consumer countries [8].
Since the mid 70’s and the discovery of important oilfields in the basin of the Black Sea, Exxon and some other more modest companies like Unocal have continuously exercised their influence on Washington’s policy in the region.
From the financing of the Mudjahines of Bin Laden against the Soviet occupation of Afghanistan to hinder the export of Russian oil to the south, up to the gigantic project of the oil pipeline Baku-Tbilisi-Ceyhan that implies the establishment of early response military bases to protect the infrastructure [9], Exxon-Mobil and the Pentagon have made efforts to free the United States from its dependency on the Middle East.
Exxon-Mobil has been especially active in Kazakhstan, where it shares with the oil companies ENI (Italy), Shell (Netherlands) and Total (France) a contract signed with the government to exploit Kashagan, the largest oilfield discovered since Prudhoe Bay in Alaska 30 years ago. The reserves announced initially are, however, objects of tough controversies and territorial disputes, especially between Kazakhstan and Iran [10].
In Indonesia, Exxon-Mobil has 35% of the shares of Pertamina, an important structure for the production of natural gas, and had signed a contract with General Suharto for the army to protect the place while this multinational bear the expenses.
Some NGO’s have revealed that during the 90’s, more than 1000 people were murdered, tortured or disappeared by the army, which usually arrested them in places that were owned by Mobil.
The Washington-based International Labour Rights Fund tried to file a lawsuit, but the process, which was already slow, was even further slowed down since the “war on terror” started: the defense of Exxon-Mobil stated that a lawsuit against the company and the Indonesian government would undermine the efforts of both in the fight against the “Islamist terrorists” [11].
As for Iraq, Exxon-Mobil used its capacity as the leading US oil company to play a leading role in the escalation that led to the invasion and current chaos, to the extent that one of the forward bases of the US army was called by the name of the company. Grant Aleonas, US undersecretary of commerce, stated during the economic forum in October 2002: “[The war] will open a stream of Iraqi oil, which would certainly have profound consequences in terms of results of the world economy for the countries which are producers of goods and consume oil” [12].
But so far, the sabotage of the oil infrastructure and damage to the US troops by the courageous resistance of the Iraqi people have frustrated most expectations.
Actually, Exxon does not make more efforts than the Bush administration to put an end to the US dependency upon Arabic oil. They both know that, according to the thermodynamic laws, the Middle East will be the prize - and the target - for the next decades, since it has the main oil reserves and nothing could replace crude oil quickly.
They perfectly know that it would amount to deny to their shareholders the dividends accrued for more than a hundred years in a row, which would be against the basics of capitalism.
Following the same notion, when humankind is already feeling the consequences of climatic changes in different regions of the world, Exxon-Mobil has disproportionately spent (12 million dollars since 1998) to finance the “climate change skeptics” and the lobby in Washington.
These investments have led specifically to cancel the US agreement on The Kyoto Protocol under the Bush administration II [13].

A Determined Political Commitment

Contrary to many multinationals that distribute their donations equally among all groups with possibilities of exercising political power, the Rockefellers, the Standard Oil and later Exxon-Mobile have always adopted a determined political commitment: against the state power and in favor of global deregulation.

Since 1998, Exxon has contributed a total of 3.9 billion dollars to the US electoral campaigns; 86% of that figure has gone to the Republican Party, essentially and directly to candidate George W. Bush [14].
The company is currently under the management of the very discrete Lee R. Raymond, who is also the administrator of J.P. Morgan Chasse & Co. Bearing in mind his influence, while he became a member of the Council on Foreign Relations [15], Trilateral Commission and Bilderberg Group, his activism and not his social status has made him to be posted vice-president of the American Enterprise Institute [16], the think tank that took George W. Bush to the White House [17].