Oil powers our cars and our economy. But it’s also a fuel source for bribery and corruption across the globe. Ken Silverstein, an award-winning investigative journalist and former Washington editor of Harper’s Magazine, shines a light on the industry’s darkest secrets in his new book, “The Secret World of Oil”. In this Squaring Off, we ask Silverstein five questions about what he discovered during his investigation, and what we can do to fight back against corrupt oil tycoons.
Q1: You argue that the oil industry is actually the most corrupt industry in the world. How?
Since the Foreign Corrupt Practices Act was passed in 1977, there have been more bribery cases involving the energy industry than any other sector. The energy business has also been hit with greater collective fines under the FCPA than any other industry.
If you’re selling widgets, you make a small amount of money on a lot of contracts. When you’re in the oil business, you’re chasing a small number of huge deals that can be worth tens of billions of dollars. “Corruption isn’t endemic in the energy business because people in the industry are more corrupt or have lower morals but because you’re dealing with huge sums of capital,” Keith Myers, a London-based consultant and former BP executive, told me. “A million dollars here or there doesn’t make any difference to the overall economics of a project, but it can make a huge difference to the economics of a few individuals who can delay or stop or approve the project.”
Q5: Are there specific organizations or individuals working to expose the industry’s corruption? If so, what can we do to support them in their fight?
There are lots of great organizations out there. I’d highlight Global Witness (which is based in London and has offices in DC): It does original, first-rate investigations about corruption in the natural resources industry – work as good as anything being done at top media investigative units. Human Rights Watch also does amazing investigations about corruption in the energy industry. There’s a Swiss outfit called the Berne Declaration that does a great job tracking the commodities business. With the traditional media business retracting, the work of groups like these are more and more important.
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