TRNN’s Steve Horn and The Intercept’s Lee Fang say a bill to lift the arms embargo on Cyprus and promote offshore gas in the region received lobbying support from ExxonMobil, and the pro-Israel and pro-Greece lobbies.
This interview is about a collaborative investigation between The Intercept and The Real News Network.
It highlights a prior investigation published in December by The Real News into subsidies granted to European Union countries to promote gas projects.
Also see TRNN’s prior coverage of the climate impacts of offshore drilling in the Mediterranean Sea and the response of activists in the EU and Israel.
This is a rush transcript and may contain errors. It will be updated.
Greg Wilpert: It’s The Real News Network, and I’m Greg Wilpert in Baltimore. Shortly before Christmas, Congress passed and President Trump signed one of the main budget bills for 2020. Included in that bill was a legislative provision that got practically no media attention, but which will be of tremendous benefit for the oil company, Exxon Mobile. The spending bill provides a range of financial assistance for the development of natural gas extraction off the coast of Israel and Cyprus. This includes support for the construction of pipelines and liquified natural gas terminals
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Also, Congress repealed the prohibition of weapon sales to Cyprus, which have been in place since 1987. It also provided greater US military assistance to Greece and Cyprus, and instructed the US to maintain its predator drone fleet in the region.
So who all exactly might benefit from this practically unknown budget bill provision to support gas extraction in the Mediterranean? A joint investigation between The Real News Network and the Intercept explored just this issue. The result of this investigation is being published by both outlets, together with this interview with the investigations two main authors, Steve Horn and Lee Fang. They’re both joining me now. Steve Horn is a climate reporter and producer for The Real News Network, and Lee Fang is an investigative journalist with The Intercept, where he focuses on how organized interest groups and money influence public policy. Thanks for joining us today, Lee and Steve.
Steve Horn: Good to be here. Thanks for having me.
Lee Fang: Yeah, thanks for having us.
Greg Wilpert: So let’s start with what this is all about. I mean, Lee, why do you think Congress is so interested in supporting the development of offshore natural gas off the coast of Israel and Cyprus? That is, who benefits and who lobbied for this provision?
Lee Fang: Well, look, over the last 10 years, there have been a series of natural gas discoveries off the coast of Israel and Cyprus. This, of course, provides a lucrative opportunity for gas development companies. And of course, it also provides a new realignment in the geopolitics of the region. Israel, Cyprus and Greece have formed a new coalition, a political agreement to develop these resources and to build a pipeline not only to exploit these resources for their own domestic benefit, but to also become natural gas exporters to Europe, where there’s a huge demand for natural gas. So in terms of influencing Congress, you have two very powerful coalitions of players; the three governments: Greece, Cyprus and Israel, which have considerable sway in Congress; as well as the mostly American energy forums involved in this development: Noble Energy and primarily Exxon Mobile, which discovered one of the largest gas mines just over the last year off the coast of Cyprus.
So this is a powerful mix, in terms of influencing Congress. This bill that you just discussed and that we were reporting on, this provision of omnibus never received committee hearing, never received an up or down vote, but it was tucked into this last-minute, must pass legislation, and signed into law with very little public discourse, very little debate. But it goes to show the political influence, the political muscle of those involved; both in terms of the governments and the energy companies.
Steve Horn: Yeah, and I’ll add that I think that the companies themselves, they also got audiological interest groups on board, as we mentioned in the article; so groups like the Christians United for Israel or the American Jewish Committee and also a pro-Greek group, plus foreign governments that were lobby for it that we found in the disclosures. So they had both the companies … I guess the triumvirate; they had the companies, they had the countries, and they had the ideological interest groups online with this bill, so it was definitely a force to be reckoned with in Washington.
Greg Wilpert: Hm. Now, Steve, you previously did a story on another bill that was tucked into the budget, the European Energy Security and Diversification Act. How are these two bills related to one another?
Steve Horn: Yeah. Well, I actually found out about this, the newest bill that Lee and I wrote about from writing about this particular piece of legislation, which is also tucked into the must pass budget. And basically what that bill did, is it gave a billion dollars in subsidies to the European Commission for projects on its priority list. There are dozens of projects on that list that are natural gas projects. Included among that list is the East Med pipeline, which takes the exact pipeline that Lee was talking about, that will go through Greece and Cyprus, into the European Union countries. So they definitely have to be seen in tandem. And when I was talking to sources for that particular piece, I was told about this other piece of legislation. So it’s not a coincidence that they passed in the same budget.
Greg Wilpert: And what does that other one do, exactly? I mean, it’s supposed to provide natural gas to Europe? Can you say a little bit more about that?
Steve Horn: Yeah, so the East Med pipeline, which is on the projects list that’s … So the billion dollars is anything that’s on that projects list. I think the most important pipeline and one of the most important projects on the whole list is the East Med pipeline. So that will go through Cyprus and Greece and culminate in Italy, actually, which I think goes back to who’s doing the drilling in this region. It’s not only Exxon and Noble, it’s also Eni, which is an Italian company, and then [Total 00:05:56] is another company. And then another interesting alliance that’s really become a powerful one is the one between Exxon and Qatar Petroleum. They have lots of joint ventures around the world, including in the United States, but also in the Mediterranean region. So it’s definitely an alliance that’s formed between several countries.
Greg Wilpert: Hm. Now, normally we hear that Congress is considered to be both sharply divided and generally gets little done. Now, in that context, Lee, what does it say about this provision to support natural gas development in the Mediterranean; that it was bipartisan? And how often do these types of provisions get inserted into budget bills, anyway?
Lee Fang: Well, look, big picture, if you’re watching cable news or the mainstream political coverage, it does seem like Congress is completely broken; that democrats and republicans are yelling at each other, they can’t get anything done. But in the middle of the night, in a lot of these appropriation bills and other must pass legislation, is when the real legislating takes place. And actually, if you look over the last decade, whether it’s the Obama Administration or the Trump Administration, we see the natural gas lobby, the energy lobby pushing through the administrative level. The State Department under both administrations has gone around the world promoting natural gas projects. We’ve seen legislation expediting the approval of liquefied natural gas terminals in the US to export fracked natural gas from the US to the global market. That’s something that Steve’s also done a lot of great reporting on.
And in this latest bill in December, with very little debate, we see a number of special interest provisions tucked into this. We reported on this pipeline deal, this militarization effort in Cyprus, which was, I think, a caveat that was just used to boost political support and reassure the government of Cyprus that they can go forward with this project because they’re under increasing pressure from Russia and Turkey. But that’s not the only provision. There are many other provisions that were tucked in. Billions of dollars in Affordable Care Act taxes, taxes on the health insurance companies were also repealed in the same bill. So this was a special goodie package. As they say in Congress, a Christmas tree, because it comes around a holiday season. It’s right when all the legislators want to go home, so they let the lobbyists and the special interest tuck these bills that never received any serious scrutiny, any serious debate in to this must pass legislation, that if the legislation doesn’t pass, the government shuts down and it becomes a crisis.
So they shoehorn these bills into these appropriation bills, and that’s how the real legislating really takes place in Washington.
Greg Wilpert: Now, Senator Robert Menendez, democratic co-author of this legislation, he actually openly mused that it marks a new frontier in US relations with Turkey. Here’s how he described it on the Senate floor.
Robert Menendez: I traveled to Greece and Cyprus in the spring and told leaders in both places that this was not not an anti-Turkey bill, and that we all wanted Turkey to be a constructive and democratic partner in the region. At the time, this vision seemed a long ways off. But now, given Erdoğan’s recent choice, it has become virtually impossible.
Greg Wilpert: Now, Steve, what recent choice of Turkey’s President Erdoğan is Menendez referring to, here? And how does this tie into the lifting of the arms embargo against Cyprus and the instructions for the predator drone fleet to remain in the area?
Steve Horn: Well, he’s referring to the sale of S-400 anti-missile defense units from Russia to Turkey, which happened in the middle of the year last year. And that’s really when this bill started to move forward, although it wasn’t really covered that much by the media. But you can look in press releases and you can see different maneuverings that were happening, that this is when the momentum really shifted on this provision. And so I think that sort of the … What does this mean, for why is there this shift in the policy? Why, in the bill, is it mentioned about the drones? It’s the fact that I think they realized that by pushing this policy, that it’s going to increase military tension. And it already has. In the weeks after this legislation passed, Turkey had a military presence in the region saying, “Do not move forward with this plan.” And even in the years before this legislation passed, when exploratory drilling was being done in the region, both Turkey and the United States had military presences in the region. So when Exxon started drilling on an exploratory basis, the US military, coincidentally, we’ll say, was also in the region at the same time, though they denied that it had anything to do with Exxon doing the drilling. And the same thing; Turkey reacted when the Italian company, Eni, was drilling. They actually blockaded Eni from doing that exploratory drilling.
So there’s already been military tension. I think that these clauses in the bill go to show that they know that there will be increasing military tension in the future in the region because of this law.
Greg Wilpert: Now, Lee and Steve, both of you, one of the things that your investigation does is explain the official lobbying that took place to push this legislation through Congress. But other unofficial avenues of influence also exist for Exxon, particularly in Cyprus. Isn’t that right? And what are they? How do they work? Let’s start with you, Lee.
Lee Fang: Well, I think this is a good question for Steve, but I just do want to note that for Exxon Mobile, and really many other massive corporations of that scale, these are companies that don’t just have in-house lobbyists that are working the halls of Capitol Hill; they have a massive advocacy program. They’re influencing legislators and regulators in the European Union and in countries all over the world simultaneously. They have third party advocacy groups, they provide a lot of money to think tanks and other organizations with academic credibility to pus their bills that benefit their bottom line.
But I’d let Steve talk a little bit more about the specific EU lobbying and Cyprus lobbying, since he reported more on that aspect.
Steve Horn: Yeah, well … Yeah, I think that Lee sort of led me in a good direction, there. So I think the think tank side of this is so crucial. So really, the narrative on lifting the arms embargo started because of a report that was done by the Hudson Institute, which may be coincidentally, may be coincidentally not, received funding from Exxon the year after that report came out, calling for the lifting of the embargo and for increased drilling in the region. So that’s the think tank side of this. And I think as Jeremy Scahill has said before about think tanks, first they think, then come the tanks. So this is a good example of that.
And then I’ll also note that it’s really important that the US Chamber of Commerce has a global presence around the world through AmCham chapters. And there’s an AmCham Cyprus within that particular node for the Chamber of Commerce. On the Board of Directors sits one of the executives of Exxon Mobile Cyprus. And then on top of that, that AmCham Cyprus receives funding from the US State Department through the Embassy in Cyprus. So it really comes full circle, that Exxon has sort of captive the US State Department and the US State Department doing its bidding in Cyprus through that Chamber of Commerce and through other avenues of influence.
Greg Wilpert: And before we conclude, I think there’s one issue that we haven’t really touched on, yet. We talked earlier about who’s benefiting from this. And clearly, there’s a number of different companies that are clearly benefiting; Israel, Cyprus of course, Italy, the European Union, the United States, oil companies, et cetera. But who is losing from all of this? I mean, what’s the issue, in terms of who might be losing out by the fact that this deal came through, was made in secret?
Lee Fang: Well, the clear obvious loser here is Turkey, and to a greater extent, Russia. There’s kind of a great game being played, of pipelines being built to supply natural gas from our gas fields in Russia to the European Union; some by way of Turkey. And that’s where the militarization comes in because there’s increasing tension as various regional powers compete for that market.
But the other big loser in this debate is climate change; is human civilization. Because as all of these countries, whether it’s Russia or Israel or the United States rapidly increasing the development of fossil fuels … Natural gas has been defended as a bridge fuel, and it indeed does have a lower carbon emissions footprint, but drilling operations related to natural gas release methane, which is another greenhouse gas. And as we see the entire world, major energy companies searching for the next big gas find, drilling and allowing these methane leaks all are contributing to climate change.
Steve Horn: Yeah and the other major loser of this was the Turkish lobby, which I’ll mention real briefly; is the fact that they, through the Turkish Republic of Northern Cyprus, which isn’t government-recognized, really, by the rest of the world. But through that particular unit, they were lobbying the United States government against this bill through a firm that’s affiliated formerly with Paul Manafort and Roger Stone called the Prime Policy Group. So I think that that’s definitely a significant loss for the Turkish lobby in general; not just … And then all the other things Lee mentioned.
Greg Wilpert: The [inaudible 00:15:58] also connects with a story that we reported on earlier, having to do with Libya and Turkey’s involvement in Libya in order to access its natural gas resources. But we’re going to leave it there for now and just refer our viewers to that earlier story.
So I was speaking to Steve Horn, climate reporter and producer with The Real News Network; and Lee Fang, investigative journalist with Intercept. Thanks again, Steve and Lee, for having joined us today.
Lee Fang: Thanks for having us.
Steve Horn: Yeah, thanks for having us.
Greg Wilpert: And thank you for joining The Real News Network.