Monthly Archives: November 2012

Rice’s foundation invested in Keystone-linked companies

Susan Rice, the troubled potential nominee to replace Hillary Clinton as Secretary of State, seems to have a peculiar interest in Canadian energy companies. Earlier this week On Earth, a magazine published by the environmental group Natural Resources Defense Council, reported that an unusually large part of her and her husband’s personal wealth is tied up in Canadian energy companies and banks that stand to gain significantly if the U.S. State Department approves the Keystone XL pipeline to bring oil from Canada through the United States for export through ports on the Gulf of Mexico. (The “XL” project is an extension of the overall Keystone project which includes pipelines to bring Canadian oil to U.S. based refineries that became operational in 2010.)

The personal portfolio of Rice and her Canadian-born husband Ian Cameron includes shares in two large Canadian energy companies, Cenovus and EnCana. Until 2009, EnCana was both an oil and natural gas company. It then spun off its oil assets in the newly formed Cenovus entity. It is likely that Rice obtained the shares of Cenovus as a result of an original investment in EnCana.

Both EnCana and Cenovus are large Canadian energy firms with links to Keystone. EnCana entered into a joint venture with ConocoPhillips known as Wood River which owns refineries in the U.S. built to process oil that comes from Canada via one completed part of the Keystone pipeline project. Cenovus now owns that interest in the Wood River project. The Toronto Globe and Mail reported in 2011 that Cenovus was “banking” on overall approval of the pipeline project “underscore[ing] the high stakes” if the project were not approved.

It turns out that Rice and her husband were also willing to wager a substantial part of the assets of their family foundation on the prospects of those very same two energy companies. A filing with the IRS by the Rice-Cameron Family Foundation reveals that the Foundation has most (approximately 80%) of its investments in typical diversified stock and bond funds. These are valued at approximately $750,000. But the remaining 20%, valued at about $180,000, is invested in EnCana and Cenovus. Those companies are the only direct equity investments made by the Foundation. A copy of the filing can be found here.

Also of interest is that the Foundation filing is for the tax year ending November 30, 2011, so unlike the older 2009 disclosure document provided by On Earth, the IRS filing (called a “Form 990″) indicates a continuing interest in Canadian energy prospects lasting until late 2011.

My own view about Ambassador Rice is that her potential nomination as Secretary of State should be opposed because she represents the “relativist” world view that animates Obama’s approach to foreign policy. To date, Obama has not been able to put a significant institutional piece of the national security apparatus outside the White House in the hands of a loyal “relativist.” This would change if Rice, a hard core loyalist of both Obama and Valerie Jarrett, were put in charge of the Department of State.

But it is also quite odd to see this information about her approach to investing. What appears to be a heavy bet on a major energy transaction is a high risk strategy that would not be typical for a family foundation or even for someone with the resources that Rice and Cameron own personally. Diversity is the norm for the assets of foundations and other non-profit entities. Rice and her husband are trustees of the Foundation and owe it a fiduciary duty. Normally that duty mandates diversity of assets. Here, however, they have put nearly 20% of the Foundation’s assets into just two companies, both with links to the controversial Keystone project, although that appears to be no longer the case for EnCana.

Another troubling aspect of the interest of RIce in the international oil industry is the fact that oil companies are notorious for being bad actors in the global economy, an issue I explored in my article The PetroChina Syndrome. In the past, for example, there were large protests about the investment of Talisman, a Canadian oil company, in Sudan. There are also allegations that some of the companies held in the Rice and Cameron personal portfolio do business with Iran. At a minimum one would have expected Rice to divest her holdings in this controversial sector while serving the public as a diplomat.

Secretary of State Candidate Has a Major Financial Stake in Canadian Tar Sands | OnEarth Magazine.

Obama’s “light footprint” ignores global reality – time for a new “Solidarity Doctrine”

Jackson Diehl at the Washington Post has put his finger on the elephant that is Obama’s foreign policy and declared it, well, something, if not exactly an elephant. Instead of “leading from behind” he suggests that Obama actually shares the longstanding bipartisan commitment to global leadership that has informed U.S. foreign policy since the end of World War II. The difference, Diehl argues, is that Obama thinks he can maintain that leadership position with a “light footprint.”

Diehl is right to suggest that it is Obama’s doctrine, not the decisions of lower level bureaucrats, that lies behind the emerging crisis in the MENA region but he does not quite get to the point. Why has Obama implemented this “light footprint”? Is he a peacenik who is trying to recreate U.S. isolationism? Or is it something else?

Once one poses the question it becomes clear that what Diehl says is Obama’s doctrine is in fact just a strategy not a doctrine. It is the method of implementing his doctrine. And what is that doctrine? It is “relativism” – a world view that suggests that other countries’ ideologies and political systems including Islamic fundamentalism, Latin American “21st century socialism” or “socialism with Chinese characteristics,” are all legitimate expressions of those nations’ political will. This is what I have suggested here before explains Obama’s original 2008 campaign commitment to “engagement” without preconditions with authoritarian regimes like that of Syria, Iran, Venezuela and China.

This relativist world view emerged as a distinct ideology in the late 1960s when the radical milieu that Obama later joined in the 1980s came to the conclusion that the “enemy of my enemy is my friend.” For many this meant that the United States should simply not intervene as aggressively as it had in the past to change the path of political developments abroad.

For many others, though, it became the basis for a more aggressive turn to “third worldism,” meaning the actual advocacy of the political victory of authoritarian regimes in the developing world. Thus, mentors and allies of Obama like Bill Ayers, Tom Hayden, Carl Davidson, Bernardine Dohrn and Mike Klonsky became (and remain) advocates of the stalinist regimes of Cuba, China, North Vietnam and Algeria. This same milieu later supported neo-stalinist movements in Nicaragua, South Africa and El Salvador, even in the presence of democratic alternatives. It was during this later phase of relativism that Obama “crossed paths” with this milieu, in the memorably misleading phrase of Scott Shane in The New York Times. Their relativist approach to international issues is echoed in their domestic advocacy of divisive forms of multiculturalism, diversity and racialism in arenas like education policy. One example of a modern day expression of this approach can be found in an essay in the left wing newspaper In These Times which views Obama as a modern and rebellious “Friday,” a “post-colonial” President.

The problem of course is that neither the relativism of Obama nor the aggression of the neo-conservatives provides a rational framework for dealing with current global realities. What is at the core of that reality? It is the impact of the end of the Cold War. We underestimated the rough form of “stability” that era provided in the developing world. That is not to endorse it, of course, but only to recognize its impact. Both the Soviet Union and the United States used forms of authoritarianism to shepherd the largely agricultural peasant economies of that part of the world towards modern capitalist economic institutions.

Since the early 1990s the USSR gave up its role in controlling their share of that environment, backing out of Afghanistan for example and of course dropping their financial support for countries like Cuba, Nicaragua and Zimbabwe. The United States, too, reduced its backing of its allies in the developing world. In one key example, the west dropped its price support for coffee beans. The impact on many agricultural countries was devastating. In Rwanda, the price declines hurt export earnings and triggered a deep economic crisis that played a significant role in the genocide of 1994.

It took the first 9/11 to bring home to Americans how pathological politics had turned in the developing world. The vacuum left by the Cold War retreat of the two superpowers was now being filled by rogue forces. And the United States has spent the last decade swinging between the neo-con and relativist pole in response. The neo-con approach of the Bush era, for example, led to the disastrous intervention in Iraq, while the relativist approach undergirded Obama’s decision to ignore the Iranian Green movement as well as an opportunity to help the nascent democracy movement in Syria. Now Iraq is home to al Qaeda again, Iran crushed the Greens and moves steadily to a nuclear weapons capability, and Syria has descended into a sectarian civil war.

A new approach must be developed. The left has spent too little time debating these issues. That has allowed the relativist/neo-stalinist approach of people like Ayers, Dohrn, Davidson, Klonsky and Hayden to fill the gap. Thus, the movement organized in 2003 against the Iraq war was led by an authoritarian neo-stalinist group called “ANSWER” alongside of many others who adopted the simplistic “the enemy of my enemy is my friend” world view. Obama was a part of this movement and is now implementing a version of it in his so-called “light footprint” approach.

No independent movement has emerged that articulates a democratic as opposed to relativist approach to U.S. foreign policy. Such an approach, I believe, must start by recognizing that the United States has an immense array of resources it can apply in the international arena. This power, though, must be used in a responsible, transparent and accountable manner linked to promotion of the values we believe are genuinely American. That would, of course, require a thorough debate and discussion here in the United States. Certainly a starting point must be a reassertion of the long lost fact that America was once a revolutionary democratic society. It was born through a revolution and it matured through a civil war (in the 1860s) and a social war (in the 1930s) to establish the kind of democratic civic space that we now almost take for granted. In my view, a commitment to freedom of speech and association would be key, as would a commitment to the rule of law (which the socialist historian E.P. Thompson rightly called an “unqualified human good”). If a new values consensus, at least among the left, can be reached, then there must be a commitment built to stand in solidarity with those in other countries who are attempting to support these values.

I think a concept of solidarity can be a critical cornerstone of a new approach. Call it a “Solidarity Doctrine” if you will. This does not mean that we are always willing, or able, to intervene physically in other countries. In fact, that is far more often likely to be problematic because it can provide political excuses to the opponents of freedom to clamp down on those very people we are trying to support. But it does mean that we will look across the array of resources we have and use them every way we can to help those attempting to bolster democracy and freedom in their own societies. Too often we have made such a commitment only to withdraw when it no longer served our narrower economic or domestic political interests. The withdrawal of coffee price support is one example. More recently, I am told, U.S. unions have sometimes engaged in cross-border efforts to support other nation’s union organizing campaigns only to withdraw from that effort when the domestic U.S. target of the campaign reached an agreement with U.S. unions. This leaves the much weaker resourced foreign unions in a perilous position.

The larger context here is that the global economy continues to drive billions of people off the land into mega-cities. But it is no longer succeeding, as it did in a fashion during the Cold War, in integrating these masses into the global capitalist economy. This is a problem, though on a far larger scale, similar to the deindustrialization of western Europe and North America. This problem provides the raw material for Mexican drug gangs, African child armies, and fundamentalist movements like Al Qaeda just as deindustrialization feeds into Chicago’s drug-related gun violence as much as it does to stimulate middle class movements like Occupy Wall Street.

We have the technological and economic resources to solve these problems and build healthier alternatives. We know the institutional framework – democracy and freedom – that must be in place for those resources to be effective. Instead of developing a foreign policy that matches our resources with that institutional framework, we have instead used the crude tools of neo-conservative intervention or the dangerously naive relativism of spent late-60s ideology. A “Solidarity Doctrine” offers a new approach.

Jackson Diehl: The red flags in Obama’s foreign policy – The Washington Post.

Obama foreign policy debacle set to continue if Rice appointed to State

The fact that UN Ambassador Susan Rice has not been struck from the short list to replace Hillary Clinton despite Rice’s active role in misleading the American people about the nature of the Benghazi debacle is a sign that the chaos that has consumed US foreign policy over the last several years will likely continue.

Rice is considered a self-centered opportunist who has set her course as a hard core Obama loyalist. She has no coherent world view or any independently developed rational basis for understanding how to wield US power. Thus, if appointed, she will likely attempt to continue the “relativist” approach that has stamped the Obama approach to international issues.

That “relativism” is a viewpoint that Obama developed in his long association with the authoritarian and neo-stalinist left. It led to his dangerous call for “engagement” without preconditions with dictatorial regimes such as that of Assad in Syria and of the mullahs in Iran. The result of that approach in the middle east and north Africa is now clear: the U.S. missed an opportunity to support the Green movement in Iran and the nascent uprising in Syria. Had we sided instead with the movements and individuals attempting to establish American-style values such as human rights and democracy we might have helped avoid the violent tragedy now unfolding in Syria and we might also have helped alter the course Iran is taking today.

With Clinton as Secretary of State there was at least some modicum of debate within the Obama regime over the direction of US policy. Despite Obama pressure, for example, to appease the Chinese over human rights issues, Clinton started to push back when she supported the effort of human rights lawyer Chen Guangcheng to seek asylum in the United States.  My law school will be honoring Guangcheng with an award for his brave advocacy of human rights in China this spring. Clinton was also said to be concerned that Obama snubbed the Dalai Lama – sending his aide Valerie Jarrett to India to persuade His Holiness to delay a long planned visit to the Washington.

But Rice has been a part of the Obama inner circle and was even named to the Cabinet while nominally serving under Clinton. It seems now that she, instead of being forced into retirement for her clear misstatements about the terrorist attack in Benghazi, is set to be rewarded with a promotion.

UN Envoy Susan Rice Is Top Candidate to Succeed Clinton – Businessweek.