Yemengate

In a tiny Middle Eastern country, government officials have accused Dallas oilman Ray Hunt's company of cheating them out of millions.

Hunt Oil documents produced during the lawsuit make clear that the company was aware that bribery was a common practice in Yemen.

In January 1981, Hunt Oil Senior Vice President Thomas Meurer and others were dispatched to check out the prospects in Yemen. In a report written upon his return, Meurer noted that in Yemen "bribes (bakeesh) are a customary way of doing business. One businessman told me that we should plan on 10 percent to 15 percent of your contract for bakeesh."

In his deposition, Meurer said he was simply summing up what he had heard about street-level bribery in Yemen, for instance, "if you wanted to get stuff into Customs."

Although he thinks the Hunt documents and statements build a case against Hunt Oil, El-Khalidi concedes that he has never found the "smoking gun"--definitive proof that the company did anything illegal.

The lawsuit was ultimately dismissed in 1988 when a judge ruled that the statute of limitations had expired before the case was filed. Arabian Shield then filed a complaint with the U.S. Justice Department under the Foreign Corrupt Practices Act, charging that Hunt Oil had violated U.S. law by cheating in international trade. The complaint was filed in 1991, and the Justice Department has taken no apparent action on it. Oberwetter says he is not even aware that a complaint was filed.

Even the outcome of the lawsuit produced new controversy. As part of its legal brief asking that the case be dismissed, Hunt Oil included sworn affidavits from numerous players in the drama, attesting that nothing untoward had been done.

Two of the affidavits contained the supposed signature of Ali Al-Bahr, the Yemeni official who signed the oil agreement with Hunt, and one of them purported to explain why the Yemeni government had chosen Hunt Oil over Arabian Shield. But the signatures might have been forgeries.

Two independent experts hired by Arabian Shield--one retired U.S. Secret Service examiner and one Arabian handwriting expert who worked for the government of Jordan--both studied the signatures and concluded they were fakes.

(Frank Finn, the lead attorney who represented Hunt Oil in the case, did not return Observer phone calls. In 1991, another Hunt Oil attorney told D Magazine freelance writer Tom Curtis that the signatures on the affidavits did "look different" than the minister's real signature, but said the issue was of little importance.)

When Arabian Shield challenged the authenticity of the signatures, Hunt Oil produced two more affidavits, not from Al-Bahr but from two other Yemeni officials. Each said they knew what Al-Bahr's signature looks like and felt the challenged signatures were authentic. Al-Bahr was dumped as Yemen's oil minister in 1985.

After their lawsuit was thrown out of court, El-Khalidi and Arabian Shield were stymied in efforts to continue seeking evidence against Hunt Oil.

But events in Yemen have conspired to revive the allegations in that country, with El-Khalidi's help, and suspicious journalists are now trumpeting new charges about the way Hunt Oil has dealt with the country.

Operating in Yemen has never been a cakewalk for Hunt Oil or any of the companies that have since drilled in other parts of the country. Fights still break out between competing tribes. Several times Hunt workers have been kidnaped, although all have ultimately been released unharmed.

In 1990, North and South Yemen decided to merge into one country. With the downfall of the Soviet Union, South Yemen's economy was going to hell and it needed friends.

But the newly reunited Yemen, with an estimated population of 12 million, was not peaceful. The southern socialists and northern power brokers tried to get along, but there was constant friction. Civil war broke out in 1994. Northern forces prevailed, and most of the southern leaders were forced to acquiesce or flee the country.

Through it all, Hunt Oil has managed to continue operating, pumping about 200,000 barrels of oil per day. Hunt spokesman Jim Oberwetter says that is because the company resolutely stays out of Yemeni politics.

"We've operated there since 1981, and we've operated successfully there through the Persian Gulf War and recently the Yemen civil war," Oberwetter says. "What we have avoided in Yemen, which I believe is part of the reason we are successful, is politics. We've stayed out of it, and will not be drawn into it."

Like it or not, Hunt Oil is being drawn into it.
The allegations leveled in the aborted Arabian Shield lawsuit are now just part of the basis for newspapers to go after Hunt Oil.

Whether it got the oil contract legitimateR>ly or not, the company is being accused by newspapers, and at least one former Yemeni official, of caring more about its profits than the welfare of Yemen, or the promises it made to that country when it won the oil rights.

The turmoil has been bubbling since last September, when reports first surfaced that Hunt Oil was in the bidding to develop the natural gas from the Ma'rib field.

According to Middle Eastern newspaper reports, Hunt tried to scare off other competitors for the natural gas contract by claiming it already had rights to the gas, and threatening lawsuits against other suitors.

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