Don EvansDon Evans, the former Secretary of Commerce and close friend of President Bush, turned down this past week a personal offer from President Putin of Russia to become Chairman of the Russian state oil company OAO Rosneft. The company is currently headed up by Igor Sechin, deputy chief of staff to Mr. Putin and is expected to go public next year. Evans is an experienced oilman who headed energy companies in Texas and Colorado before joining the Bush Administration as Secretary of Commerce in the first Bush term.
Meanwhile, Texan Rex Tillerson, currently Chief Operating Officer of Irving-based Exxon Mobil Corp., is poised to take over as Chief Executive Officer of Exxon on January 1, 2006. He has a tough act to follow. Tillerson replaces the legendary Lee Rex TillersonRaymond who engineered the merger of Exxon and Mobil in 1998, creating the world’s largest energy company. Raymond served as CEO of Exxon for 12 years. Both Raymond and Tillerson have engineering backgrounds and came up through the Exxon ranks. While Raymond made his mark with the Mobil deal at a time when energy prices were low, Tillerson has been successful in opening up Russian energy sources for Exxon in recent years. He was the chief negotiator on behalf of the company in reaching an agreement with Russian authorities to develop oil and gas on the northeast shelf of Sakhalin Island, off the coast of Russia.
The Sakhalin-1 Project is operated by Exxon Neftgas Limited, an affiliate of Exxon Mobil. The parent company has a 30% interest in the project. It is estimated that potential recoverable resources from this project are 2.3 billion barrels of oil and 17.1 trillion cubic feet of gas. So far, over $4.5 billion has been spent on the project.
Major oil companies like British Petroleum (BP), Chevron and Exxon Mobil have been moving in recent years to reduce their dependence for oil and gas on the politically unstable Middle East. Russia, the Caspian Basin, Africa, Asia and even North America are back on the radar screen as majors and independents searching for new energy reserves which can be profitably developed.
That is why the decision of Don Evans to turn down the Rosneft may be a set back for American policymakers and energy leaders who believe it is in our national interest to develop a better working relationship with a post-Communist Russia. That nation has its own serious problems relating to the growing Islamist threat in Chechyna and other regions within Russia.
Vladimar Putin reportedly made the offer of the Rosneft job to Evans earlier this month as part of a broader effort on the part of the Russian government to improve its business reputation among international investors. When word leaked out that Evans was seriously thinking of accepting Putin’s offer, critics of the Russian regime in the United States were quick to denounce Evans.
Leading neoconservative spokesman, and a resident scholar at the American Enterprise Institute (AEI), Gary Schmidt had this to say: "It would be disgusting. If you want to be a close friend to the president and a trusted adviser in the private sector, you cannot look like you are taking money from what is a state-controlled entity where the country has an immense amount of complicated issues with the U.S. It is extremely bad form if he took the job. There is nothing illegal about it, but it would not do the president any good."
The Wall St. Journal editorialized on the issue urging Evans not to accept the offer, claiming that Mr. Putin was only trying to buy influence with the Bush Administration: "You can bet that Mr. Putin figures that in hiring Mr. Evans he would be buying more than just the American’s energy expertise."
Both Schmidt and the Journal editorialist assume that Don Evans is not saavy enough to figure out how to accept such a position with a very clear understanding in place that (a) Evans has the authority he needs as CEO of Rosneft; and (b) he is not there to "buy influence" with his friend George W. Bush. In my judgment, Evans is nobody’s fool and would have received firm assurances before accepting such a position (and would have been quick to resign had those understandings been violated).
One of the major problems facing Russia (one not of Putin’s making) is that Russian oligarchs made off with hundreds of billions of dollars of state assets in the immediate aftermath of the fall of the Soviet Empire at a time when Boris Yeltsin was President.
This was accomplished through government-controlled auctions in which key state assets were effectively transferred to well-connected insiders for pennies on the dollar. As Anders Aslund wrote in the current issue of Foreign Policy magazine, Putin "has chosen to crusade against that oligarchs under a moral banner that promises to root out corruption among the wealthy few." The Putin government has been using its power to regain control of many of those assets, with the seizure of the assets of the energy company Yuko in 2004 from Mikhail Khodorkovsky, one of the Russian oligarchs, being the latest example.
There is no question that there is a tremendous amount of corruption in the public or private sector, not unexpected in a country which was under Communist rule for most of the 20th century.
The question is: Do we continue our adversarial relationship with the Russian government of Vladimir Putin, a course of action advocated by neoconservative and neoliberal leaders alike? Or, do we recognize that Russia could be a valuable strategic ally in what may be a long and difficult struggle against the forces of militant Islam? Choosing the latter course of building a better relationship with a post-Communist Russia will have its fits and starts. As Ronald Reagan liked to say, "trust, but verify". But, there is a potential of a future Russia for different from its recent communist past – a nation in the throes of rediscovering its rich, religious traditions and a Russia which could become an important ally in the coming showdown with the forces of militant Islam. Don Evans taking that job offered him by President Putin might have been a small step in building a better relationship between our two countries and helping us decrease our reliance on oil from the Middle East. It was not to be.
Dr. Hwang Woo-sukFor some, fame and fortune are fleeting. One day a person dazzles the media and the next day he becomes a scourge to the public. Dr. Hwang Woo-suk, a former veterinary professor at Seoul National University, is an example of that phenomenon.
On February, 2004 Dr. Hwang announced that he had cloned a human embryo and recovered stem cells. This news brought hope to supporters of cloning and those who believed this breakthrough would help cure diabetes and Parkinson’s. Politically, his announcement caused the debate on the ethics of cloning heat up in intensity.
South Koreans felt pride that this pioneer came from their nation. The South Korean government offered Dr. Hwang a $65 million grant to continue his research and anointed him as their number one scientist.
Hwang Woo-suk received even more international publicity when he published an article for Science magazine’s May 2005 edition. He reported that his lab had created 11 lines of embryonic stem cells genetically matched to patients.
Some predicted that his achievement could help the paralyzed to walk. Hence, the South Korean government commissioned a stamp showing a person rising from a wheel chair, standing and embracing a loved one.
Shortly afterwards, he wrote an article for Nature magazine claiming he cloned a dog named ‘Snuppy’. A few scientific magazines even declared Hwang Woo-suk as one of the top scientists in the world.
But, Dr. Hwang did not sustain the worldwide acclaim he was receiving, for he was a man willing to sacrifice scientific honesty in pursuit of world-wide recognition.
In November 2005, Dr. Gerald Schatten from the University of Pittsburgh announced the end of his partnership with Dr. Hwang. Previously, he was the senior author of the Science article on stem cells. He had learned that eggs from embryonic stem cells were obtained through female employees at Dr. Hwang’s lab. This ethical breach shocked the scientific community because it appeared that Dr. Hwang coerced his employees to participate in the experiment.
Nonetheless, thousands of Koreans demonstrated in support of Dr. Hwang for his pioneering work on cloning even after the doctor admitted to this ethical lapse and promised to go into seclusion.
But he did not hide for long. Dr. Hwang held a nationally televised press conference on Dec. 16, 2005 to address the issue that he had possibly fabricated stem cells for Science magazine. He proclaimed his innocence and blamed the disappearance of his stem cells due to contamination and mishandling by Miz-medi hospital. He called for a prosecutorial investigation against the hospital.
Roh Sung-il, the head of Miz-medi hospital, told the Korean media that Dr. Hwang had admitted to him that he had fabricated stem cells. Nevertheless, Dr. Hwang did show some honesty during the press conference by asking to retract his article from Science magazine due to fatal flaws.
Then Kim Seon-jung, a former junior researcher for Dr. Hwang revealed to reporters that Dr. Hwang had demanded he fabricate stem cells for Science magazine. So, the researcher plagiarized pictures of different stem cells from the 2003 journal of Cells and Molecules.
Accordingly, Seoul National University started DNA testing on the 11 stem cells to determine if Dr. Hwang really created them. It was announced on December. 23, 2005 that at least 9 of 11 stem cells were fabricated. He was abruptly fired by the University. Both Science and Nature magazine began their own investigation on all papers submitted by Dr. Hwang. They expressed grave doubts that he had made any new discoveries for cloning.
Dr. Hwang wanted to become a famous scientist, and he achieved that goal. But, he will be more recognized for damaging the reputation of scientists, causing shame to his country, and shattering the hopes of those who suffer from diseases and were given a false hope that Dr. Hwang Woo-suk had a cure for their problems.
His ambition led to his success as well as assured his doom.
After the Dallas Morning News "better late then never" expose of Mayor Laura Miller which detailed her questionable relationship with Southwest Housing and its owners, those of us South Of The Trinity were expecting the city’s white mass media to leap on one of the year’s hottest stories immediately. After all, it was Channel 8 and Channel 11 who continued to hound African-American political officials who were caught up in the City Hall corruption scandal that involved the same Southwest Housing Mayor Miller is so involved with. Much of what had been reported as vile acts of possible corruption regarding the behavior of African-Americans elected officials were also reported about Mayor Miller in the Dallas Morning News piece. So, why was Miller able to escape further media scrutiny while her Black counterparts at city hall were not?
Usually, immediately after a story of this magnitude where Mayor Miller’s own activities are called into question with documentation, the Morning News would have had a follow up editorial, another follow up story, and tons of letters to the editors regarding the featured expose--at least that is how the paper handled similar city hall exposes when Black city leaders were the main characters. Could the lack of further critical coverage of Mayor Miller’s activities at city hall represent a rift in the media community? On the one side there are journalists and television reporters who have seen Mayor Miller’s disingenuous act at city hall and elsewhere. This group recognizes the real truths about the Mayor’s activities are hidden from public view. On the other hand, there are those in the media who are either fans of the Mayor’s or true believers in the Mayor’s stewardship of the city. The latter group seeks to shield Mayor Miller from the kind of negative media glare used to demonize the Mayor’s enemies; primarily African-American members of the city council. How else can anyone explain an exhaustive investigative report by one of the nation’s leading newspapers that put the Mayor right in the center of the city most embarrassing scandal in our history and little or no white mass media coverage follow-up ensues?
In a tale of two cities, maybe North Dallas whites are wondering; what is the big deal about the Miller expose story dying? However, those of us South Of The Trinity are all too familiar with the tactics of a cover-up when whites in power are caught in embarrassing media moments. The truth is there is no good reason why Mayor Miller’s activities that put her in the center of a city hall corruption scandal have not only been further reported on but they also have not apparently been investigated by the FBI. If the Mayor Miller expose in the Dallas Morning News is even close to being the truth then the Mayor Laura Miller public image should be no better then the public images of Don Hill, James Fantroy, Leo Chaney, Jr. and Maxine Thornton-Reese.
If the citizens of Dallas expect those of us South of The Trinity to respect law and order and the institutions in charge of maintaining law and order, then law and order must apply to everybody --- not JUST-US! That is how we see it from South Of The Trinity.
Question: Which of the following has contributed the most to George W. Bush’s job rating decline? (a) the Valerie Plame affair, (b) the war in Iraq, (c) the yawning federal budget deficit, (d) FEMA incompetence or (e) high energy prices? Correct answer: (e) High energy prices.
Political junkies and the media are obsessed with Plame but average people aren’t. If the economy is Ok no one cares about deficits. The hurricanes were so last summer. The war hurts but has nowhere near the potency of energy prices. For most Americans the war is images on a TV screen. Only a few even know someone who knows someone killed in Iraq. But everyone buys gasoline every week and pays to heat their homes.
The political process has offered two responses: Conservatives counsel patience to allow the market to work its magic. Congressional liberals counsel a windfall profits tax on Exxon Mobile and grassroots liberals counsel price controls. The liberal’s counsel may be given short shrift: taxing Exxon will not increase oil production one pint and price controls are proven to make matters worse – fast. The conservative response also fails but needs a lengthier critique.
The classic conservative mantra is that price increases will trigger increased supplies because of greater investment in production and newly cost-effective alternative energy sources, and cause a decrease in demand through changed consumption habits and the advent of new conservation technologies. This is all fine as far as it goes – which isn’t far enough.
First, it assumes the existence of a free market for energy. There is no such thing. Yes, OPEC’s power waxes and wanes but when it waxes it is a formidable cartel. Second, most countries where you find large oil reserves hate Yankees and given a choice of customers will choose energy hungry China. Even where current regimes are friendly there is a very high probability of regime change.
Second, it assumes no artificial bottlenecks like those created by environmental permitting regimes. It is both sad and amusing to hear Congressional critics of big oil berating its CEOs for not building more refining capacity while knowing full well Federal and State regulations make it almost impossible to build or expand a refinery.
Third, there is no such thing as an “economy.” There are only “political economies.” And in political economies short term pain by the people is ignored at great peril to those who govern. Put another way “patience” is a sure recipe for defeat.
Finally, markets allocate resources efficiently over time but do not take into account valid political concerns. Americans ship enormous amounts of money to OPEC nations, not one of which is a stable American ally. We wage wars to protect our oil lifeline (which I consider a valid reason for war). We avoid both through energy independence. But that comes at a price. The market cannot factor in those costs, only the political process can do that.
The right market intervention would be for Congress to impose an oil import fee that would set a floor on energy prices at around $35 to $40 per barrel of oil (to hell with free trade). That would assure investors that development of domestic alternative energy sources would be economic over the long run. Whether it is coal gasification, squeezing oil from tar sands, shale oil, nuclear power or bio-fuels the US would shortly meet all of its energy needs from domestic sources. The resulting energy independence would have an enormous value a market cannot calculate.
Yes, consumers would be denied the price benefits of the next cycle of low prices and the federal government would have windfall revenues with which to close the deficit. The latter sounds like a good thing. The former is the price you pay for not having troops in the middle East and not paying tribute to mullahs and leftist thugs like Venezuela’s Hugo Chavez.
Many individuals in the United States and Western Europe praise democracy as the only good system of government. These promoters of democracy believe their system of government can work effectively everywhere. They fail to consider that democracy may not be appropriate for some countries and cultures. Hence, difficulties arise amongst nations. Hong Kong is a city linked by the cultures of the east and west. Hong Kong was a colony of Great Britain until 1997 when the Thatcher government handed over control to China. Hong Kong had experienced many freedoms under British rule, and Beijing left Hong Kong "more free" than the mainland. Officially, there is no media censorship, no restrictions on religion, and no socialist bureaucracy hampering the economy. Unofficially, the economy is free, but you had better be careful about what you say in the media, and Christian believers are not entirely free (although more so than in mainland China). Meanwhile, Beijing doesn't allow a fully democratic government. Donald Tsang the Chief Executive of Hong Kong was appointed by the Chinese government. There were 60 members of the legislature, but only half of them are popularly elected. Pro-democracy supporters want "full democracy for Hong Kong. Meanwhile, the economy of Hong Kong is doing great. It grew by 8.3% in the third quarter and tourism increased by 7.6% for the first nine months of the year.
Tension between the pro-democracy movement in Hong Kong and China’s government has been growing this month. On December 4th, 250,000 pro-democracy protestors in Hong Kong marched from Victoria Park to the government headquarters downtown. This week pro-democracy lawmakers overwhelmingly rejected Chief Executive Donald Tsang’s proposed changes to the City’s electoral process which would have given neighborhood groups more say in picking the legislature. The measure required two-thirds approval, and pro-democracy legislators voted 24 to 1 against it, claiming that there needed to be a timetable for moving towards full democracy in Hong Kong.
The U.S. State Department has waded into the dispute on behalf of the pro-democracy protestors. State Department spokesman Adam Ereli said, "We believe that it's important to achieve universal suffrage in Hong Kong as soon as possible. The people of Hong Kong are ready for democracy and the sooner that a timetable for universal suffrage is established, the better." Ereli’s statement comes across more as a demand rather than a statement and undoubtedly was understood that way by the Chinese government. Beijing reacted by claiming that the United States was interfering with the internal affairs of China.
China has never experienced western-style democracy historically. So, making the transition to any form of democracy is bound to be difficult. Lest one forget, our democratic republic in the United States was based on the British common law tradition. How would Americans feel if the Chinese government demanded that our country follow in the footsteps of Chairman Mao? It is not easy to make the transition from a totalitarian regime to one with a free economy which allows political and religious freedoms. Chinese officials are trying to navigate through heavily mined fields as that country moves away from a Communist ideology which dominated that nation’s political system for half a century.
As Chinese officials look at how democracy is working in the rest of Asia, it may give them pause as to how quickly they want to move in that direction. In Japan about 70% of people recently polled stated that they don't respect their elected legislators. South Korea elected Noh Moo-hyun as their president, but his popularity ratings hover around 20%. The Philippines has one of the freest democracies in Asia, but its economy is one of the poorest. Much of Asia suffers from corrupt and incompetent, democratically elected governments.
The 250,000 people who protested in Hong Kong on December 4th feel that their problems will be solved if they just have a "full democracy". But, that hasn’t proved to be the case in other Asian nations where democracy reigns.
The United States and Western Europe have a democratic tradition which they are proud of; but trying to export democracy in areas of the world where there are no democratic traditions to speak of is difficult to do. Democracy succeeds only if the citizens and government of a country want it to work.
China is slowly moving away from Communism. Whether it will turn towards democracy or towards an authoritarian regime of some kind is hard to tell at the moment. But, one thing is certain, the Chinese – not the Americans – will determine the political future of Hong Kong – and China