In 1972, an Exxon internal audit disclosed that Esso Italiana, Exxon’s Italian subsidiary, had been making payments to Italian political parties that were tied by amount to specific corporate objectives. One of the objectives that was listed on documents seized by Italian authorities was halting nuclear energy development in Italy in favor of burning more oil in electrical power plants.
A subcommittee on multinational corporations of the US Senate Foreign Relations committee led by Senator Frank Church (D-ID) conducted hearings on the matter in the summer of 1975.
The scandal was discussed in at least two articles in the New York Times. The first article, published February 21, 1974, was titled Chill in Genoa Deepens Into Major Italian Oil Scandal. It appeared on page 45 with a continuation on page 55.
The second, published on July 17, 1975 was titled Exxon’s Italian Payments Tied to Specific Benefits. It was a front page article with about 5 column inches and a small headshot photo of an Exxon executive testifying in front of a congressional investigative subcommittee. The article headline appeared just above the fold; the article continued on pages 47 and 61.
Buried in each of the stories was a short section useful in confirming my frequently admitted bias. The articles might have never have been unearthed without the aid of modern history research tools and recent efforts to provide digital archives by major publications.
Here is a revealing quote from the February 1974 article’s continuation on page 55, which had a supplementary headline of Major Oil Scandal Brewing in Italy.
A court in Genoa has issued an arrest warrant against a leading Italian oilman and financier, Vincenzo Cazzaniga, who is in the United States at present. He is accused of criminal conspiracy and corruption.
Until recently, Mr. Cazzaniga was president of Exxon’s Italian subsidiary, Esso Italiana, and of the Italian oil industry’s powerful trade association. He is nominally still a member of a three-man committee that is to advise the Government on how to revamp Italy’s oil industry.
The charge against him is that on behalf of the oil lobby he paid out huge bribes to fix fuel prices and defeat plans for production of more nuclear energy. Greater development of nuclear power would damage the market for fuel oil.
(Emphasis added.)
Aside: One of the assertions often made by antinuclear activists like Amory Lovins is that nuclear energy does not compete with oil. When pressed with historical consumption statistics that refute the assertion, they often fall back to the position that the fuel oil burned in power plants has no relationship to the distillate products like diesel fuel and gasoline that power our transportation system.
Here is the weakness in that argument. Crude oil refining is a separation process that provides products like gasoline and diesel fuel by removing less desirable components. Those less desirable components, often contaminated with materials like sulfur, are still combustible and a useful heat source in large boilers, even if they would contaminate small engines.
When a location — like Italy — has a strong local refining industry, it is economically important to find a market for the materials removed from crude oil when producing jet fuel, gasoline and diesel fuel. Even if the sale is not terribly profitable, it is better to sell refining leftovers than to pay for its disposal as waste. End Aside.
Here is the section from the July 1975 article, with some additional context, that captured the attention of my search engine. It is worthwhile noting that this section was published at the very end of the article on page 47 of the newspaper.
The corporate objectives that are listed on the “special budget” maintained by Exxon’s affiliate, Esso Italiana, includes four items that have been reported to be part of a current Italian parliamentary investigation into payments by oil companies to political parties.
The four “projects” are identified as “deferred payment, Suez Extra charges reimbursement, Tax legislation and special fuel oil supply to power plants”
According to a subcommittee staff member, “deferred payment” refers to the oil companies being allowed to use interest-free for three months excise taxes that they collect from Italian motorists; “Suez extra charges reimbursement” refers to transportation charges incurred by the companies when the Suez Canal was closed; “tax legislation” may refer to a variety of benefits, including reductions in manufacturing and excise taxes, and “special fuel oil supply to power plants” refers to a Governmental decision to use oil rather than nuclear fuel for generating plants.
(Emphasis added.)
The payments in question were not small. According to the 1975 article, Exxon acknowledged that it specifically authorized $27 million over a ten-year period, but claimed that its Italian management has assured approvers that the payments were legal. There was also a mention that Esso might have funneled another $19-$22 million in its own cash to politicians without getting any higher approval.
In the 1974 article, there was a reasonably detailed explanation about why the scandal had not received too much attention. That explanation included the reluctance of leading politicians to look too hard into such a lucrative stream of money directed into their coffers and the fact that the oil interests held major ownership interests in a substantial portion of the Italian press.
Not surprisingly, the oil industry didn’t think it had done anything wrong.
“We haven’t corrupted anybody,” says an executive of a multinational oil company here. “The political forces have been levying tributes, and we have been paying up.”
…
Spokesmen for some of the four parties in the Government have publicly admitted that their organizations had received subsidies from the oil lobby, but they insisted that the money had not influenced their political decisions.
Some might ask why I’m bothering to dredge up a forty-year old story that was buried in the New York Times archives. It is simply an example of the kind of material that rarely sees the light of day. The two articles discovered made only brief mentions of probably illegal actions by a major oil interest that played a role in halting the nuclear development program of a major European economy. That action, in this case, was documented as asking the government to stop nuclear power development and burn more oil instead.
This is a clear smoking gun. I’d like to thank the people who continue to challenge me to provide additional evidence to support my theory that the effort to slow nuclear energy development included (and probably still includes) a major component of monetary and political support from people with interests in competitive energy sources.
The potential of nuclear replacing oil(-companies) is regularly being dismissed and belittled by the anti-nukes. Examples:
– oil companies are invested heavily in natural gas
– ties of electricity to the transporation sector are generally denied, yet refineries consume large amounts of electricity to refine oil into gas/diesel, and few people are aware that heating oil is nothing more than diesel/jet fuel that has been dyed by the taxman
– nuclear power used to charge electric cars is never credited, never mentioned, yet solar (the weakest power source for the most demanding multi-digit kilowatt motors) is being promoted endlessly for this purpose
– nuclear electricity used to heat homes is being dismissed as “too expensive”/”too inefficient”, while biofuels (or a return to wood heating) are promoted. Yet in France they use electric heating all the time, there’s innovation (infrared heating), and something that is cheap (and has no emissions) doesn’t need to be “efficient” at all – we are free to waste as much energy as we can afford to buy with our own money.
Really Rod, I don’t think you need to go back forty years, to another continent, to advance the premise that politicians are bought and paid for. The reason big oil owns more puppets than the nuke industry does is a simple matter of math. If you guys had the economic edge, you’d be buying these Washington harlots too. (“You” figuratively, of course.) Trouble is, you just can’t out bribe the oil guys. They’ve got more money, they’re slimier, and they’re better connected. But if you think you’re going to advance NE without buying a few, (or actually, more than a few), politicians, you’re living on Mars.
@poa
I freely admit that I’m odd and idealistic. I’m going to cling to my belief that the truth will change some minds.
There is a reason why I’m working hard to show that the convention narrative regarding the strength behind the antinuclear movement was a carefully constructed fiction.
The antinuclear movement is not based on the “natural” fear of the unknown. It wasn’t led by a bunch of liberal hippies carrying signs. The basis is more about money and the thirst for power. It was — and is — led by some of the best connected people in the world.
Those of us who don’t like being led by our noses by a bunch of elitists have real power. America is not a caste society or one that defers to an aristocracy. Most of us know there are more important things than money and that many of them are worth fighting to protect.
“It [the anti-nuclear movement] wasn’t led by a bunch of liberal hippies carrying signs.”
True. But they (the liberal hippies) were the ones gullible enough to believe in the eco-wacko trash of green energy that only serves to further the monetary interests of fossil fuel while emasculating nuclear energy’s growth. And now they are grey-haired and pony-tailed, voting for the same flawed ideas that are ruining our Republic (NOT Democracy – two wolves and one sheep voting on what’s for dinner – BUT Republic; Democracy is what they have created.)
Funny. Are you clairvoyant….or hiding under my bed? Guilty on both counts.
Trouble is, I don’t fit into the rest of your shoehorning bigoted blather. Really Paul, you oughta pull the plug on your TV. Or, at the very least, change channels. Trust me, Beck and Hannity will survive without you. Theres plenty of ignorant partisan idiots willing to fill your seat.
“Both counts” being hair color and length. The rest of your ignorant obsessive stereotyping of Dems and liberals aren’t a fit for this old hippie.
There’s a flaw in your ointment, poa: anyone who can be bought won’t stay bought. Anyone who will sell themselves to you will also sell you out. Citizen’s Disunited notwithstanding, any large “contributions” from the nuclear industry, no matter how “legal”, would be found out, and highly publicized.
I’m with Rod on this one. There are some congresscritters who have both seen the writing on the climate wall and can do the math. Those with that much sense also have their political noses in the air, and know which way the winds blow.
Mike Simpson (R ID02) was appointed chairman of the House Energy and Water Development Appropriations Subcommittee. That’s DoE. In the Senate, Ron Wyden (D OR) sponsored S. 1240: Nuclear Waste Administration Act of 2013, which would implement recommendations of the President’s Blue Ribbon Commission on America’s Nuclear Future. The list of co-sponsors is “interesting”.
“There’s a flaw in your ointment, poa”
Dang, and here all this time I thought it was a fly.
Nuclear energy for producing electricity, fertilizers, synfuels, and freshwater means that there is no longer any need to continue to harm the Earth’s environment by using fossil fuels.
American fossil fuel companies have known this since the 1960s and have no interest in seeing their investment’s in carbon polluting technologies go down the drain because of nuclear energy.
Marcel
Before we expect to make any progress, we need to stop whining about how corruptible our government is, and accept the fact that we do not live in a democracy – not even a representative republic. . . . perhaps we never really did. What we have is a plutocracy where competing corporate interests are sovereign. We are more ‘consumers’ than we are citizens. This is not just a grieving intuition that we should dismiss as hyperbolic grumbling; the facts that define this plutocracy are just as stark and immutable as the facts of nuclear superiority – (in 2012 there were 435 House elections; the Biggest Spender won 95 percent of the time)
Sincere reformers will howl in outrage at this state of affairs, and demand that Congress vote itself a pay cut or a new term limit or a legitimate ethical oversight committee.
But outside of nation-wide anarchy and a violent revolution – congressional rehabilitation ain’t ever gonna happen.
The “fault” is in the system – not in the people. Human politicians are no more – and no less-
corrupt than they were in ancient Greece or Rome, and a FUNCTIONAL representative democracy is still just as impossible.
Truth be told, this plutocracy of wealthy businessmen is not THAT bad. . . . (this is painful heresy to my progressive friends) and we could be worse off than living in a society where rules are established by institutions who WANT their members to be fat and happy and flush with spending cash.
So rather than wasting our lives on some impossible campaign finance reform, I say we accept our consumer reality, think outside the mythical democratic illusion, make the best of what God has given us, and manipulate the corporation’s greed to divide and conquer:
Endorse a plan to build 300 nationalized nuclear reactors across America – and then promise to give the electricity away to all American businesses (at a ridiculously cut-rate price.)
In 2012 there were 435 House elections; the Biggest Spender won 95 percent of the time.
This doesn’t mean it is possible to buy elections — it probably just means that corporate special interests are more likely to fund candidates which they believe are going to win (because funding the campaign of a winning candidate earns a payoff in favorable policies, while funding a losing candidate is money down the drain).
I realize this is a tangent, but it’s short.
“Truth be told, this plutocracy of wealthy businessmen is not THAT bad. . . . (this is painful heresy to my progressive friends) and we could be worse off than living in a society where rules are established by institutions who WANT their members to be fat and happy and flush with spending cash.”
It’s kinda like old Rome. We’ve got bread and circuses. All of those big stadiums seem to have their corporate names so they don’t even hide the thing.
Still, I’ve got to wonder if things are trending right. You hear over and over again how the income of the average Joe is going down in relation to spending power and other indices. You hear that kids today aren’t going to have as good a living standard as their parents and grandparents.
Maybe, a better use of nuclear power would reverse that trend and give a better standard of living for the US and the world. It’s like that old saying, “A rising tide lifts all boats.”
Eino, your post is not tangential in my estimation.
Things have to change if they are going to get better — and Nuclear Energy can change things for the better.
The pitch (clean, cheap, safe energy can better the human condition) is hard to argue against UNLESS the counterpoint challenging the “pitch” is laden with falsehood. And, of course, that happens. It happens a lot.
Actually, oil refining includes catalytic cracking of heavier fractions to produce lighter compounds (transport fuels), if the market conditions allow it. But this is a side note. Fuel oil burned in a power plant near me (one of the few oil fired nuclear plants in the world) happened to be JET-A, yes what a blood waste (pardon the language)!
As to the Italians not pursuing nuclear is most likely a blessing considering the information I get from some Italian acquaintances in the industry. The Italian political system is so incredibly infiltrated by the mafia (Berlusconi case in point) that nobody knows if regulation could actually function in the country, less actually being effective in keeping safety standards up to scratch.
@Matte
As far as I know, catalytic cracking technology has advanced considerably in the more than 40 years since events described in this post. Sulfur control regulations have also changed so it is rare to have residual fuel used in power plant boilers anymore.
There is still competition between “the oil companies” and nuclear energy since all major oil companies are also natural gas companies and working hard to increase their market share in supplying electric power fuels.
I know someone who could answer such questions knowledgably: my ex-TOD co-contributor Robert Rapier. Do you want me to point him here?
Yes. Please do.
Done.
In his absence, I’ll note that heavy crudes and residuals are often thermally cracked in “cokers”. The products of a coker are lighter fractions and petroleum coke, or petcoke. Petcoke is a coal-like waste product that is sometimes burned in lieu of coal. The Wabash River IGCC plant was designed to burn coal, but as of the last I read it was burning petcoke shipped in from Venezuela at a slightly higher thermal efficiency than it got on coal.
I’m aware of complaints regarding dust from petcoke heaps south of Detroit, so it can’t be a very desirable product even at an FOB price of free. Shipping by ship and barge from Venezuela must be cheaper than trains from Detroit.
Err… little bit a commonplace. Believe me, mafia isn’t everywere in Italy and regulations works much better than in India or China (places in wich nuclear has a bright future).
Bribes are bigger problem, for example (see Bettino Craxi story).
Soon after Chernobyl, then prime minister Bettino Craxi
http://en.wikipedia.org/wiki/Bettino_Craxi
worked to stop nuclear energy in Italy.
His motivation was the bribes he took for the supply of natural gas from Tunisia and other North african countries: the contracts signed from his government guaranteed prices well over the market value for the supplies.
The Referendum promoted by his party caused his ousting from prime minister, then, later and indirectly, his political end.
After being condemned for corruption (but not for the natural gas affairs) he flew to Tunisia where he got protection.
Nevertheless the 1987 Referendum
http://en.wikipedia.org/wiki/Italian_referendums,_1987
was a tombstone for nuclear energy in Italy, and the fingerprints of people who laid it are “dirt” of natural gas.
Great “smoking gun” story, Alberto.
“The Referendum promoted by his party caused his ousting from prime minister, then, later and indirectly, his political end.”
I wonder how much of this stuff is done in back room deals in smokey rooms with the curtains closed. How much is done by those in power only by word of mouth, a smile, a handshake and a goodbye nod.
@Eino
There might be a submariner or two in the audience who will understand my next analogy. For the rest, I apologize, but it is a part of my history that has made me who I am.
One of the more challenging tasks in operating an underwater warship is finding and keep track of the opposition. In order to remain covert, the submarines on which I served 25 years ago rarely used active signals and depended almost solely on passive acoustics. That meant we had to learn to listen carefully to direction-only sounds that were often only transient noises and plot them on a geographic plot to attempt to discern the contact’s bearing, range, course and speed.
I spent many hours both at sea and in shore based training facilities hunched over the geo-plot and glancing at several other plots to solve the tricky, but important problems. Over time, it became easier and easier to see patterns that few others could see and to produce reasonably accurate “firing solutions” that earned a scored “hit” and the respect of my superiors.
That experience has stood me in good stead as I patiently work on the smoking gun series.
Looks like those “other North African countries” included Libya.
This from the wikipedia link you provided:
Craxi was the person who phoned Muammar al-Gaddafi to warn him of the impending Operation El Dorado Canyon air-strikes against Libya on 15 April 1986, permitting Gaddafi and his family to evacuate their residence in the Bab al-Azizia compound moments before the bombs dropped.
Shades of how Osama bin Laden escaped Clinton’s cruise missiles by minutes, because he was tipped off by a sympathiser in the Pakistani ISI (which the US had informed of the cruise missile attack for fear that otherwise they may mistake it for an Indian attack).
“….because he was tipped off by a sympathiser in the Pakistani ISI ”
Also, bear in mind, we were, at that time, giving Musharif’s regime about ten million dollars a month to “help” us in this massive scam called “The Global War On Terrorism”. We also allowed the airlift, out of Afghanistan, into Pakistan that is purported to have had the radical cleric Omar included. That’s really when it became apparent that this whole GWOT thing was a massive con job. And now, we have the same liars and criminals setting us up for another reaming. Its amazing that these crooks and liars that gave us the invasion of Iraq are still having a voice, instead of languishing in a federal prison cell.
Are you sure the phrase “Global War on Terrorism” was in use at any time prior to 9/11?
@poa
When I worked in DC, it never failed to grate on me when I sat through a contractor pitch for more money because they had figured out a way to link their products to GWOT. Then they picked up a new term called “The Long War” that really made them salivate over the possibility for very lucrative work over many years.
One of my main issues, beside the moral one, was that these bandits were trying to claim that their gizmos were a more important and immediate need than the programs in my portfolio, which included personnel training and then ship and submarine maintenance.
In other words, they thought sales were more important than readiness.
This was not “prior to 9/11”. The airlift occurred after we went in to Afghanistan. And we immediately were forking huge bucket fulls of money into the Musharif machine, despite the fact that a top ISI general was known to have been instrumental in funding the 9/11 terrorists.
Yes, George, his timeline is off — but the Pakistani ISI was pretty much the same bunch of guys during the Clinton administration as it was after 9/11, right.
He just used the phrase “at the same time” in an overaggressive fashion for emphasis.
Shoulda said “by the same token” instead of “at that time”. But Rick is right about the ISI. Interesting fact….the ISI general that was KNOWN to have contributed to the funding of the 9/11 terrorists was neither pursued nor indicted by that slimey batch of neo-con-men that crammed the GWOT and the Patriot Act through. The monkey and his handler, Cheney, left too many obvious loose ends, detectable to anyone of even moderate intelligence if they are willing to apply very little research and a reasonable amount of common sense. I really think that hapless idiot, GWB, was simply a malleable dupe, led around on a leash by that leering monster, Cheney.
Yes, some unfavourable contracts for natural gas were signed with Lybia also. Few doubts why they were signed…..
I thought the deal in Italy was, they were so sick of Berlusconi by then they would have vetoed pasta and opera if he’d backed a referendum on it. ( It still only just cleared fifty percent of the electorate, though it was ninety-plus of the turnout.)
Whoops, wrong referendum.
There’s already been a nuclear-related scandal out of Italy. It seems that the ‘Ndrangheta (“Little Dragons”) mob got control of some major toxic waste disposal contracts in Europe in the 1990s. This included nuclear waste, almost all of it low-level, such as as rubber gloves used to handle radioactive material, etc., though some higher-level waste, particularly medical, can’t be ruled out.
Rather than properly processing and disposing of the trash, they simply dumped it in the Mediterranean and off the coast of Somalia.
The anti-nukes did the predictable thing: they reported it as being spent reactor fuel and inflated the amounts to absurd levels. The usual apocalypticism was thrown in. A movie is reportedly in production.
Search Google with “ndrangheta nuclear waste”. There’s also a Wikipedia page about it; the usual caveats apply:
http://en.wikipedia.org/wiki/Toxic_waste_dumping_by_the_%27Ndrangheta
@Dogmug
Thanks for info, but this post is not about generalized nuclear-related “scandals.” It is focused on illuminating specific actions by an energy industry competitor to hamstring nuclear energy growth.
If you could show that the people who dumped the waste were involved in the fossil fuel business and that they then revealed their actions in order to discredit nuclear energy, that information would be on topic.
Many people know the phrase “Keep your friends close and your enemies closer.” However, they do not really understand why is it often so useful to keep enemies very close and to make them think you are their friend.
‘Democracy – two wolves and one sheep voting on what’s for dinner ‘
In a normal predator/prey pyramid there should be a lot more sheep than wolves. You might even picture them, just occasionally, cooperating on some non-dinner related threat to both.
“… just occasionally, cooperating on some non-dinner related threat to both.”
Like maybe, how not to run this “zoo.”
@POA:
“I really think that hapless idiot, GWB, was simply a malleable dupe, led around on a leash by that leering monster, Cheney.”
With great bait like that I’m surprised you didn’t get any real bites.