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Review of Steve Coll’s ‘Private Empire’: How ExxonMobil bent Washington to its will

By Moisés Naím,May 11, 2012

“Private Empire” is a big book about big oil, big money and big government. It chronicles how ExxonMobil — the energy behemoth that recently displaced Wal-Mart atop the Fortune 500 list, with more than $450 billion in revenue — operates in failed states, keeping the oil flowing when no one else can, and how it handles hapless bureaucrats charged with regulating it, scientists challenging it, rival companies trying to outsmart it and activists bent on changing it.

It is also a book about one idiosyncratic man — Lee “Iron Ass” Raymond — who was chief executive of the company from 1993 to 2005.

The global marketplace was remade during those years. The Soviet collapse had unleashed a wave of deregulations that opened markets to foreign investors. Asia, especially China and India, began a rapid ascent, fueling a global economy that posted unprecedented growth and booming stock markets. At the same time, the world gained heightened awareness about environmental damage caused by fossil fuels, while terrorism, war and all kinds of domestic political upheavals became common.

The impact on the corporate world was mixed. Most of these transformations boosted profits, but their speed and complexity created volatile conditions for business. And a company such as ExxonMobil is allergic to volatility.

“Exxon’s investments in a particular oil and gas field could be premised on a production life span of forty or more years,” writes Steve Coll. “During that time the United States might change its president and its foreign and energy policies at least half a dozen times.” Overseas it is even worse, with coups and revolutions and violence even more common.

“We see governments come and go,” Raymond once remarked, with considerable understatement.

So can a powerful corporation wield enough influence to evade and manage global volatility, and make it work on its behalf? In the case of ExxonMobil, it can, and with great success. “The corporation’s lobbyists bent and shaped American foreign policy,” writes Coll, “as well as economic, climate, chemical and environmental regulation.”

Getting the story of how it did so is the goal of this ambitious book. Coll, a two-time winner of the Pulitzer Prize, a former managing editor of The Washington Post and now a New Yorker staff writer, has a knack for prying open closed institutions. His book “Ghost Wars” chronicled the CIA’s involvement in Afghanistan pre-9/11, while his book “The Bin Ladens” painstakingly documented the saga of that family. In a recent interview with Texas Monthly magazine, Coll asserted that “reporting on Exxon was not only harder than reporting on the bin Ladens, it was harder than reporting on the CIA. . . . They have a culture of intimidation . . . they make people nervous, they make people afraid.”

Yet, ExxonMobil has met its match in Coll, an elegant writer and dogged reporter. More than 400 interviews, thousands of pages of previously classified documents obtained under the Freedom of Information Act, obscure court records and careful scouring of WikiLeaks documents provide the foundation of a fascinating story of how corporate power is exerted at the highest levels and across the globe. Coll traveled to Indonesia, Nigeria, Chad, Russia, Equatorial Guinea, among other places, as well as ExxonMobil’s headquarters in Irving, Tex., and, of course, Washington, the city where the company’s influence is as pervasive as it is effective.

While for most of its history Exxon was an international company — after all, large oil companies need to follow geology wherever it takes them — in the 1990s its global reach grew, and its ties to its home country became even more tenuous. While “Exxon benefited from the new markets and global commerce that American military hegemony now protected,” writes Coll, “Exxon’s far flung interests were at times distinct from Washington’s.” Raymond, the chief executive, “did not manage the corporation as a subordinate instrument of American foreign policy; his was a private empire.” Raymond put it even more bluntly: “I am not a U.S. company and I don’t make decisions based on what’s good for the U.S.”

The wholesale freeing of world markets that started in 1989 and boosted Exxon’s fortunes coincided with an accident that, in Coll’s view, helped the company by forcing internal changes that gave it an edge in the emerging competitive landscape: the Exxon Valdez oil spill. This environmental catastrophe, in which hundreds of thousands of barrels of crude spilled into Alaska’s Prince William Sound, was also a public-relations disaster, sinking the company’s reputation from the sixth most-admired in America to the 110th.