Since its birth as Standard Oil in the 19th century, ExxonMobil has been at once the most profitable, demonized, secretive and uncompromising corporation on the planet, a black box that muckraker Ida Tarbell famously penetrated in the early 1900s, and no one since has managed. After books on the CIA in Afghanistan and the family of Osama bin Ladin, two-time Pulitzer Prize winner Steve Coll describes Exxon as the most-resistent of all to inquiry. His new book, Private Empire: ExxonMobil and American Power goes on sale Tuesday. Below, Coll replies to questions from the Oil and the Glory.
O&G: Of all the oil companies targeted for grievances, Exxon seems unusually stigmatized. Is it deserving of such criticism?
Coll: Yes and no. On the yes side, they are unusually, fiercely partisan; for example, their Political Action Committee effectively acts as a finance arm of the Republican Party in the United States, and until about 2006 they made aggressive investments in free market groups trying to combat mainstream climate science that I personally think will look pretty embarrassing for years to come. These are not the kinds of aggressive, one-sided interventions in American politics that you would expect from the country's largest or near-largest corporation (depending on the year and the method of measure), a corporation that has diverse employees and is very broadly owned by individual shareholders, government pension funds, mutual funds, and so on. Also, they are their own worst enemy in public relations -- remorselessly aggressive, arrogant, and often self-defeating. So in that self-inflicted sense, they also deserve their reputation.
On the no side, they have a pretty impressive operating record since the  Valdez [tanker] spill, if not as perfect as they sometimes seem to claim for themselves, and their internal discipline has produced a better environmental and worker safety record than their peers. They deserve more credit for that than they get. They've taken human rights where they work in conflict zones more seriously, too, and although they were late, they have adopted some of the better corporate responsibility standards in that area, although they are nowhere near the leaders that they might be. Also, they are stigmatized just for being huge, and I am sympathetic to their arguments that a) while they make large profits in number terms, their profit-margins are not especially high; and b) they get blamed by the public for a lot of things they really can't control, like retail gasoline prices.
Former CEO Lee Raymond seems the most interesting character in the book. What is your take on him? And is he responsible for Mikhail Khodorkovsky's imprisonment in Russia?
He's a fascinating character, larger than life. As a writer, you love anyone who is truly comfortable in his own skin -- not trying to shade or hide himself from the world, and that is certainly Lee Raymond. He was ruthless, effective, difficult, sentimental, loyal and enormously successful as chairman and chief executive, certainly on the operating and profit-making side of the business, although he is criticized by some for not doing enough to position ExxonMobil for the future in the upstream, and on reserve replacement, an issue on which he struggled. Given my main interests in the corporation as a kind of independent sovereign, Raymond is fascinating because that is really how he carried out his role, how he acted in the world -- as a kind of head of state.
You mention the Khodorkovsky case, which is an example. Of course, [Russian leader] Vladimir Putin and his henchmen are responsible for Khodorkovsky's imprisonment, and Khodorkovsky himself miscalculated in the game of political chicken he played with Putin prior to his arrest. But Raymond figures in the story in a fascinating way. I don't want to give away too much of the fun stuff in the book. But in short, Raymond was negotiating to acquire a stake in Khodorkovsky's company, Yukos, in the weeks prior to his arrest. Raymond and Putin had a fascinating one-on-one at the New York Stock Exchange, which I recount, and which reads basically as an encounter between two very powerful men who see themselves as sovereigns.
Just how powerful is Exxon?
I think it depends on the setting. In some of the weak, poor countries where they produce oil -- a place like Chad, for example -- they are immensely powerful, almost comparable to the colonial powers of yore. Chad is one of the world's poorest countries -- Fourth World, really. The United States gives just a few million dollars a year in aid; ExxonMobil's tax and royalty checks in good years recently were higher than five hundred million dollars. If you're the president of Chad, whom do you care about, and whom are you going to listen to? In fact, ExxonMobil allowed Chad's authoritarian president, Idris Deby, to defy the Bush Administration and the World Bank during 2006 because of the sheer size of the cash flow the corporation delivered to Deby, and the way it collaborated with him at the Bush Administration's expense -- I found that an amazing story....MORE