Part One

An Age of Limits & Change

Introduction

In Part One, Mr Coll describes Private Empire: ExxonMobil & American Power and how to write about a crucial resource, a reticent corporation and what they say about America’s place in the world.

Steve Coll (SC)— [00:00:37:04] The book is a kind of investigative narrative history of ExxonMobil and its place in public life here and abroad from the time of the Exxon Valdez spill in 1989 through to basically the present day.

[00:00:53:25] Why start with the Exxon Valdez spill in 1989?

One of the conclusions I came to about ExxonMobil was that it was useful to think of it as a kind of independent sovereign state spread around the world. And, if you think of it as a country, the Valdez spill was kind of a 9/11 event for them. So, they really overreacted to some extent but also were galvanized through and through by that accident.

[00:01:44:10] Why this book now about this company?

[00:01:49:11] I didn’t go in a straight line to this book.

I had been working on subjects that have to do with America’s sort of a-symetric power in the world, particularly in a post-9/11 setting. And, after doing the book before this one [The Bin Ladens: An Arabian Family in the America Century], which was basically about modernization in Saudi Arabia and all of the complicated ways that Saudi society produced not just Osama bin Laden but his 53 brothers and sisters, who had wildly different sources of global identity, I came out of that book about Saudi Arabia and I really wanted to write about oil. And, oil in an age of limits; oil in an age of contest; oil as a proxy for America’s place in the world; as a source of struggle.

I had been inspired as a younger journalist by The Prize, by Dan Yergin, which is a large, historical, well-reported narrative. It’s sort of about oil in an age of expansion and discovery. And, I wanted to write about oil in an age of limits and change.

So, I actually started out this book without ExxonMobil as the particular focus. And, I was going to write a wider narrative about America in the oil in the modern era. And, I got out into the field about six months and I thought, ‘You know, I really need a company to tell this story properly. I am too spread out.’

So, once I made that decision, then ExxonMobil was the only logical choice because they are the largest corporation headquartered in the United States. They receive very little scrutiny. They have a very strong culture—very particular sense of themselves. They’re a very closed institution, which makes them both difficult to report on and kind of intriguing as a project.

And, so off I went.

And, as I got going, I would just say that I was very glad that I had chosen them because they are a very powerful subject in lots of ways. But also, I came to think of the book a little bit differently than when I started out. I came to think of it as a case study of corporate sovereignty and power in our political economy and in the world’s political economy.

We live in a time when, I think, governments matter less and non-governmental entities are rising in importance. Technological change is a factor. Globalization is a factor.

And in the United States, corporations are more influential, I would argue, than at any time since the Gilded Age. You can measure this statistically. Corporate income relative to household income relative to small business income is greater than its been at any time since people started keeping statistics about such things. And we know intuitively, whether you’re coming at it from the Tea Part or the Occupy side, that income inequality is related to the role that corporations play in our politics and the degree of industry capture that’s emerged in sections of our government.

And so, if that’s the context, well ExxonMobil is a very interesting example because they...their revenue last year [$486.4 Billion according to Bloomberg Businessweek; $41 Billion earnings after taxes, according to ExxonMobil’s 2011 Financial & Operating Review] was greater than the economic activity of most countries in the world. But, as journalists, we don’t really scrutinize them very much.

[00:04:59:05] What was your biggest challenge writing Private Empire?

[00:05:04:05] Mostly, that they were a very closed institution. Very disciplined. They don’t volunteer to be written about. They didn’t want to be written about here.

It’s my professional life to write about hard subjects. So, I have a method. But, even as I applied my method, I found that they were—their walls were thicker and they were just a tighter subject.

Now, there are ways you can break down a corporation like ExxonMobil as a reporter in this society. One example is court records. They sue a lot of people. They get sued by a lot of people. Some of those cases go to trial. The records that are generated there, the testimony that is generated there, while selective, can be very revealing. And, there are some trial narratives in the book that help kind of go down layers of depth that it wouldn’t be possible for me to do without their cooperation while interviewing. I also filed extensive Freedom of Information Act requests with the United States government, looking at places abroad where I knew they operated and where I knew the country was troubled, so there had to be an interesting story there.

So, it was a little bit like throwing a message in a bottle into the State Department and other sections of the government, asking for cables that would describe ExxonMobil’s activity in periods of violence, in Aceh, Indonesia, for example, in Equatorial Guinea, Nigeria. And those efforts actually over time yielded very, very strong material.

And then I interviewed. I interviewed as many people as I could find.

I approached the company directly. They provided a limited amount of background cooperation. I came later to understand that they probably thought they were being exceptionally cooperative. But, my experience was that it was helpful but pretty limited.

[00:06:50:06] Is writing about ExxonMobil a bit like defining the existence of a far-off planet based on its gravitational effect on surrounding light?

[00:06:57:06] Yeah. There’s a kind of outside-in process that’s  a little bit like that. And, I try to, what I feel like what I’ve learned, just as a journalist over 30 years of doing this, is that there’s really no one method. You kind of have to do everything.

If the target is really hard, if it’s really hard, you just have to surround it with every method of effective reporting that you know how to conduct and do them all simultaneously and then follow the threads that open up. And outside-in, though, that notion of interpolating your way forward is the basic framework.

There are moments when a door opens and you go straight in. And, you stay in that hallway or that room that you’ve gotten into until you’ve emptied it. And then you try to find another door to go through. And if you don’t, you back back out and look for another way.

[00:07:52:17] What is an example of a door opening and you going straight in?

[00:07:57:17] Well, it’s mostly interview break-throughs are the big serendipitous kind of mapping aspects.

There are lots of ways to try to approach people to ask them to help you, even if the corporation’s official position is, ‘we’re not cooperating.’ So there are, you look for people who are former executives or...who may not be afraid to talk about the company.

One thing that was particularly difficult about ExxonMobil is that...it’s a very comfortable place to work, if you can abide their rules and their culture. It’s a place where many people stay for life. They have an excellent defined benefit pension plan. And they tie everyone up with non-disclosure agreements that are tied to their retirement benefits. So, people really feel like they have skin in the game. If they’re accused of violating their non-disclosure agreements, they could put their entire retirement at risk. So, that makes people cautious in a way that you wouldn’t normally find.

But, look, I wasn’t asking anyone to turn over their secret sauce or business secrets. I was just asking them to talk about matters of public accountability and business strategy in a country that has the First Amendment to protect speech. So, I would do my best to persuade people.

[00:09:17:27] If ExxonMobil is engaged in a highly public part of our highly public economy, what is ExxonMobil protecting?

[00:09:24:27] It’s a good question because other corporations in their position manage their position differently—by trying to have a proactive communications strategy, really trying, recognizing that not everyone is going to see the world as they would wish but recognizing that if a reasonably balanced, credentialed professional approaches them, whether they’re from a journalistic organization or a university or an industry group, and asks for understanding, that they...some corporations say, ‘Oh, yeah. Let’s get going. Let’s tell you how we see the world.’

Well, ExxonMobil has a very different view.

They basically take all of their decisions on the basis of strict financial interest. And...that’s a little bit of an over-statement but not a lot.

And, when they think about their communications strategy and their press strategy, I think rather than following some theory that they generally benefit from explaining themselves or that they have a responsibility to the communities where they operate, the country where they’re headquartered to be an active participant in public life—rather than that, they ask themselves, ‘What are the cost-benefit equations of cooperating’ with people like me? And, I think the answer they come to is, the costs are higher than the benefits because they operate in controversial settings.

They knew that I was interested in their operations in West Africa, where they produce 25 percent of their oil and gas liquids in the decade after 2000. You know, it’s not a pretty picture. Some of the host regimes that they work with have pretty terrible human rights records or—and/or the populations that surround their operations are living in pretty bad conditions. And they might wish for West Africa to be a better place than it is: It would be good for business and good for the people who live there. They’re not against that. But, they’re there as the guests of these host regimes. And if they start telling their story, they’re more likely to irritate their host government than they are to gain anything in the eyes of, say, American readers about how sophisticated they are.

—End of Part One—

More GWorks Interviews: Steve Coll

to Part Two: Chad: A Basic Dilemma

ExxonMobil’s search for oil

in increasingly unstable environments

and the challenges this poses to the

way ExxonMobil does business.

to Part Three: Standard Bearers

How ExxonMobil’s roots in Standard Oil

and the Rockefeller family affect its present and future.

to Part Four: Coherence

ExxonMobil’s relationship to environmentalism

and government regulation and their place

in a political economy.

to Part Five: Valdez|Exxon

The impact of the 1989 Exxon Valdez

oil spill and the future of energy, energy companies

and American power.

For more interviews,

please visit GWorks Interviews

EDITOR’S NOTES

GWorks Interviews: Steve Coll was filmed Tuesday 26 June 2012 in the offices of New America Foundation in the District of Columbia. GWorks would like to thank Mr Coll for his generous participation and Victoria Collins for her work to make this interview happen.

Photo: Book Cover: Private Empire: ExxonMobil & American Power. Courtesy The Penguin Press.

Photo: Steve Coll. Lauren Shay Lavin. Courtesy The Penguin Press.

GWorks Interviews is a series dedicated to exploring governance issues of interest with persons given to thinking about and having relevant experience. GWorks invites a GWorks Interviewee to respond in depth to questions. GWorks does not edit the substance of what an interviewee says. GWorks edits GWorks Interviews only for editorial and technical considerations including style, length and productions issues.