Taleban in Texas for 1997 Talks on Gas Pipeline That Led to the War Against Terrorism in Afghanistan

by Ma Nguyen Tong

27-1-2002

In a revealing look at how the US military action in Afghanistan was motivated by something other than terrorism concerns, the Enron debacle quickly exposed that the September 11 terrorist attacks on the United States was only a propitious pretext to occupy the country and extract its badly needed energy resources. As late as April 2001, the United States government had ordered Enron and Unocal to begin destroying records of its negotiations with the Taleban in order to minimise the exposure of the fact that the war in Afghanistan had been planned long before the terrorist attacks.

The United States tried in 1997 to negotiate with the then-ruling Taleban to construct a 1,300km pipeline to carry gas across Afghanistan's harsh terrain so it could be sent to Pakistan and India, bringing vast amounts of money to energy companies in the U.S., including Enron. The Taleban agreed, but only on certain conditions regarding U.S. policy in the Middle East and towards the Palestinian question. A senior delegation from the Taleban movement in Afghanistan therefore went the United States in December 1997 for talks with Unocal, an international energy company, that wanted to construct a gas pipeline from Turkmenistan across Afghanistan to Pakistan. It failed because of the conditions demanded by the Taleban, and Israel was then instructed to step up the ante and create a pretext for a Palestinian Intifada. Ariel Sharon therefore did just that. Then Texas Governor George W. Bush and Dick Cheney were also in the meetings as they and some of their business partner had personally invested large amounts of money into the scheme. The meeting with the Taleban had been set up by a former vice chairman of Enron, Clifford Baxter, under instructions from Enron's chairman, Kenneth Lay.

A spokesman for the company, Unocal, said the Taleban spent several days at the company's headquarters in Sugarland, Texas, where Baxter had his home. Baxter also enterained members of the delegation at his US$700,000 home southwest of Houston. Sherron Watkins, a company vice president, had told Lay that Baxter, a former Air Force captain, had "complained mightily" about the "inapportriateness of certain transactions to the Taleban and the possible need for a global-level military action to ensure access to the gas through Afghanistan".

Unocal said it had agreements both with Turkmenistan to sell its gas and with Pakistan and India to buy it with Enron using the gas at power plants they were in the process of establishing in the region. Houston, Texas-based Enron secretly invested huge amounts of money into the project. When the Taleban refused to play according to Unocal's and Enron's conditions and according to the counter-conditions established by the U.S. administration and Bush's colleagues, Enron over the following three years ended up with a serious cash-flow problem as loans for its South Asian investments were called.

In India, the Houston-based energy-trading company had long been viewed as a heavy-handed U.S. corporation, expert at manipulating local politicians and callous in overriding the interests of everyday citizens. For many on the Asian subcontinent, Enron epitomized the downside of the modern global economic system where powerful corporations from the West often bully their way into development projects that fail to live up to shiny promises.

A case in point was Enron's investment in a $3 billion, 10-year liquefied natural gas power plant development project, the largest development project and the single largest direct foreign investment in India's history, the gas was to come from Turkmenistan by pipeline through Afghanistan and from Qatar.

Begun in 1992, the Dabhol power plant near India's financial capital of Bombay in Maharashtra state was to have gone online by 1997. It was supposed to supply energy-hungry India with more than 2,000 megawatts of electricity, about one-fifth the new energy needed by India each year. But endless disputes over prices and terms of the deal turned the venture into a symbol of what can go wrong in large-scale development projects when cultures collide. As Enron files for bankruptcy and looks for ways to divest itself of its Dabhol interests, the project was still unfinished and had produced no electricity, partly because of the delays in getting the gas to where it was needed.

On the surface, India's deal with Enron to build a power plant seemed to offer big advantages to both sides. The 2,184-megawatt Dabhol plant would help India meet its national energy needs while expanding India's trade relations with the U.S. [BusinessWeek, Dec. 3, 2001]. For Enron, the upside was equally clear. Entering the Indian market, which offered vast growth potential, would position Enron well in the global marketplace.

The U.S. government also saw benefits from U.S. companies gaining access to business in India, the world's largest so-called democracy. The Enron deal was the jewel of America's economic engagement with India. International observers and many in the energy trade press considered the deal a match made in heaven.

"The power plant will provide desperately needed electricity for the growing Indian economy," wrote the Energy Daily.

"As an integrated gas and power project, the facilities will contribute significantly to the development and expansion of both the natural gas and power sector in India," declared Enron's Chairman and CEO Kenneth Lay. [Energy Daily, Dec. 9, 1993]

In a joint venture with U.S. companies General Electric and Bechtel, Enron created an Indian subsidiary, Dabhol Power Co. DPC, which was 65 percent owned by Enron, was to build the power plant. Enron was to develop and operate the plant. Bechtel was to design and construct it, with GE supplying the equipment.

To secure supplies of liquefied natural gas for the project, Enron lobbied New Delhi to change its tariff system, which had been designed to discourage energy imports. Enron got India to slash its duty on imports of liquefied natural gas from 105 percent to 15 percent. It also got India to side with Pakistani military officials in trying to make a deal with the Taleban in exchange for a part of the profits. Hence, a palace coup was needed in Pakistan as the ruling party of the day was less than sympathetic to the al Qaeda movement that had linked with the ruling people of Afghanistan.

With those changes approved and under way, Enron brokered a deal with Qatar and the Taleban to provide the Dabhol plant 2.5 million tons of liquefied natural gas per year for 25 years, starting in 1997. Hence the meeting in Texas.

While many observers hailed the project and its promised benefits, some economists doubted its feasibility and some Indian citizens bridled at Enron's highhanded behavior. In April 1993, a World Bank analysis questioned the project's economic viability, citing the high cost of importing and using liquefied natural gas relative to other domestic sources of fuels or through the construction of hydropower projects in the foothills of the Himalayas. Because of those findings, the World Bank refused to provide funds for the project. [http://www.altindia.net/enron/Home_files/WBreport.htm]

Other critics charged that the project had not been open to competitive bids and that the deal was too costly. Some expressed concern over the terms of India's agreement to underwrite the project. With the World Bank declining to provide loans, India was forced to take on even greater risk. In 1993, Prime Minister Narasimha Rao overruled objections from his own Finance Minister to give state guarantees for both foreign and domestic investors in energy projects. The guarantees could be counted by lending institutions as additional state debt. [Independent Power Report, Dec. 3, 1993]

But, despite the 20-year civil war in Afghanistan, Unocal had been in competition with an Argentinian firm, Bridas, to actually construct the pipeline. Just before the meeting with the Taleban in Texas, the Argentinian firm, Bridas, announced that it was close to signing a two-billion dollar deal to build the pipeline, which would carry gas 1,300 kilometres from Turkmenistan to Pakistan, across Afghanistan. In the following May, then Taleban-controlled radio in Kabul said a visiting delegation from an Argentinian company had announced that pipeline construction would start "soon".

The radio reported several visits to Kabul by Unocal and Bridas company officials over the previous few months. A BBC regional correspondent said the proposal to build the pipeline across Afghanistan was part of an international scramble to profit from developing the rich energy resources of the Caspian Sea.

With the various Afghan factions still at war, the project had looked from the outside distinctly unpromising. The BBC reported that at a meeting with British officials in Luton, the United States government had decided the only other option would be to engineer a destruction of Argentina's economy at about the same time that a military attack and occupation and installation of a sympathetic government in Afghanistan was carried out. Without a viable economy and a devlauation of the national currency that would be subsequently inevitable in its home country, the cash-strapped Bridas would have had great difficulties in carrying out the project.

At the time, the Taleban Minister of Information and Culture, Amir Khan Muttaqi, said the Taleban had held talks with both American and Argentine-led consortia over transit rights but that no final agreement had yet been reached because of the Americans' intractability over the Middle East question and other conditions they imposed on the Taleban. He said an official team from Afghanistan, Pakistan and Turkmenistan should meet to ensure each country benefited from any deal.

However, Unocal and Enron clearly believed they were still in with a chance - to the extent that they had already begun training potential staff. It commissioned the University of Nebraska to teach Afghan men the technical skills needed for pipeline construction. Nearly 140 people were enrolled in Kandahar and Unocal also planned to hold training courses for women in administrative skills. It also paid to train U.S. military and CIA personnel in the Afghan language and culture. Women were considered to be necessary in this operation because Afghanistan had an insufficient number of technically trained men only. With women working in the field, then there would be barely a sufficient number. Over time more men and women could be trained.

However, women faced working restrictions under Taleban rule. Although the Taleban authorities only allowed women to work in the health sector, organisers of the training said they had not thus far raised any objections. But the situation was considered to be unstable and unclear. The BBC regional correspondent said the Afghan economy had been devastated by 20 years of civil war. A deal to go ahead with the pipeline project could give it a desperately-needed boost.

But peace had to be established first -- and that for the moment that still seemed a distant prospect. Hence, both Britain and the U.S. as far back as 1998 decided that a military occupation was required in order to oust the Taleban and to install a regime sympathetic to the energy businesses' needs. All that was needed was a pretext for the use of military means, as current popular sentiments would not permit such pre-emptive action as it would clearly appear to be a simple neo-colonial action.

The CIA trained officers to infiltrate the al Qaeda movement, knowing that Osama bin Laden had a paranoia about U.S. interests in the Middle East and in other Muslim countries. Their job was to instigate an al Qaeda operation against American interests that would be so massive as to turn American popular sentiments completely around thus making a military operation politically palatable and tenable. The timetable was set for about 2.5 years--the usual time it takes, as per normal military practice, to develop the technology, gather necessary intelligence on the ground and train the required troops in preparation for an operation of that magnitude in unfamiliar territory. As it turned out, the opportunity presented itself somewhat later--September 11.

What is interesting, however, is the US Air Force was stood down from routine airspace security regulations for more than an hour while the attacks in the United States were in progress. The President knew of the crisis at a much earlier time than had been officially admitted, and pretended not to know until after the attacks on the WTC. After being "officially" told, he continued to read with school children about pet goats, smiling and joking for more than 20 minutes, at the same time as a third hijacked plane flew towards Washington. Also this was clear because he showed no emotion nor did he seem unduly disturbed during his first televised speech, some time after the attacks, by what had happened in Washington and New York.

Two weeks before the attacks, the director of the FBI resigned in protest over being ordered to back off investigations into bin Laden and Al Qaeda and investigations into reports provided to the United States by Thailand and Egypt that some sort of massive terrorist attack was due on the United States by al Qaeda. On August 29, 2001, Commander Wuttichai Saistean, of the Royal Thai Navy intelligence office, sent a message to both the CIA and the FBI offices at the American Embassy in Thailand from his home at 1810 Soi Ladprao 62-64 Ladprao Road in Bangkok, of an imminent attack on the United States by al Qaeda, possibly using hijacked airliners, although neither the modus operandi nor the date of the attack had yet been determined in detail. The former FBI director was given the job of head of security at the WTC, and was killed in the attacks on his first day in the job.

Since declaring bin Laden wanted for terrorism, successive US administrations had twice turned down opportunities to take him into custody. He met with the CIA in July 2001 in a last-ditch effort by the United States to avoid going to war, as it would be more expensive than simply making an agreement to build the pipeline and a new highway along the pipeline between Kabul and Peshawar.

Unocal put people in Afghanistan and Turkmanistan early in January 2001 to start work in designing the pipeline--starting with a huge survey project along the alignment. It opened an office in Kabul in the second week of January. The Asian Development Bank is funding costs for building the highway between Kabul and Peshawar and it retained the Louis Berger Group to survey the 250-kilometer Kabul to Peshawar, Pakistan highway. The Berger Group, one of the United States' most powerful multinational engineering consulting firms, also established a presence and opened an office in Kabul in January. The ADB told Unocal that the survey work's results could also be used for the construction of the gas pipeline.