Don't Let Her Off, Rich

Statesman's Oppel Defends Ann's Influence-Peddling



illustration by Doug Potter

In his column on Jan. 4, local daily newspaper editor Rich Oppel wrote a brief defense of former governor Ann Richards, who now works as a lobbyist. Richards had been assailed a few days earlier in a column written by New York Times columnist Maureen Dowd. As governor, Richards toiled "for four years for less than $100,000 a year," wrote Oppel. "What's wrong with her bringing in big bucks in private life after public service?" It's this kind of no-holds-barred capitalism-cum-politics, in which anyone can be bought given enough money, that has made voters so cynical. Oppel ignores the fact that Richards - at least in theory - stood for something. Her blatant sell-out to mall developers, railroads, weapons makers, and Big Tobacco suggests that she now stands for nothing except legal tender. Yes, she has to make a living. But what's the limit, Oppel? Would lobbying for land mines be okay, too?

Sure, it's not just Richards. Kansas Republican and former presidential candidate Bob Dole, and former Senate Majority Leader George Mitchell work for the same firm as Richards. (The Washington-based firm, Verner Liipfert Bernhard McPherson & Hand, counts the City of Austin among its clients. They - and Richards in particular - lobbied for federal money for the Bergstrom airport.) Oppel implies that because selling influence is now Big Business, and lots of other ex-politicos are doing the same thing, Richards is not accountable. Richards, according to Oppel's reasoning, is merely going with the flow and is therefore innocent of disappointing the people who believed in her.

But by defending Richards, Oppel also defends the growing power and presence of lobbyists who are hired solely for their ability to wield influence. Richards, Dole, Mitchell, and dozens of other ex-politicos have, in effect, set up their own embassies for the express purpose of promoting the financial interests of big corporations and, in some cases, foreign governments. The increasing power and presence of firms like the one Richards works for undermines our democracy by promoting the kind of crony-based oligarchy that we abhor in Mexico, Indonesia, and other developing countries.

Oppel chose only to discuss Richards' work for Big Tobacco, ignoring the work she does on behalf of the Mills Corporation to fill the largest wetlands in New Jersey. Eight years ago, as a politician, she wanted to preserve wetlands. Today, she wants to pave them. Oppel ignores her work for weapons makers like Lockheed. Yet it was less than 10 years ago that Richards excoriated the American weapons industry in her speech to the Democratic National Convention. Both issues were detailed in an October 24 story right here in The Austin Chronicle. The Statesman prints the Chronicle; you'd think Oppel could get a copy.

But Oppel's biggest conceit may have been his command to the acerbic Dowd: "Mo, bug off."

First, what Dowd said of Richards was nothing compared to her evisceration of Geraldine Ferraro a few days later. Second, Dowd attacks everybody, all the time. She has more teeth than a dental convention. To ignore the irony of Richards' tobacco lobby work is hardly Dowd's style. Third, call me silly, but I doubt Dowd reads the Austin American-Statesman. If perchance she did, I doubt she'd give much weight to Oppel's edict.

While I loathe the fact that he puts his signature at the end of his columns, I have agreed with Oppel on some issues. He was right, for instance, to condemn Dorothy Richter, Brigid Shea, and others for complaining to the FCC about KVET's Sammy Allred and Bob Cole. Sammy and Bob's First Amendment rights are, and should be, held inviolate, and if the Greens can't stand the heat, get out of the kitchen. But he's wrong about Richards. Dead wrong. If voters can't respect the politicians who represent them - whether they are current or former politicians - then why vote at all? Are we merely electing them so they can graduate to the lobby, where the real power and money awaits? Call me old-fashioned, but I believe we should be able to vote for politicians and still respect them in the morning.


Indonesian Calamities
and Freeport

At first glance, Freeport-McMoRan Copper & Gold looks to be in a bad way. The ongoing economic and social upheaval in Indonesia, where the company operates the vast Grasberg mine, has sent investors fleeing. The company's stock price has fallen by more than half. Its bonds have been downgraded by the investment houses. Gold prices are at an 18-year low. Copper prices are slumping. The value of the Indonesia rupiah has plummeted. The country's dictator, Suharto, who has ruled for 32 years, is getting too old to govern effectively. Widespread drought has caused massive fires and led to famine in parts of the country. Tens of thousands of Melanesians in the eastern provinces, including Irian Jaya, are facing starvation. Closer to Jakarta, tens of thousands of Indonesians on the main islands of Java and Sumatra are losing their jobs. And even if the $40 billion bailout package now being formulated by the International Monetary Fund (IMF) is effective, the Indonesian economy is likely to be depressed for a while to come.

Although I wish I had sold Freeport's stock short, I wouldn't bet against Freeport and its CEO, Jim Bob Moffett, over the long term. Moffett's company can produce copper at Grasberg for 20 cents a pound, making it the world's lowest-cost copper producer. And the slump in metals prices has begun driving other producers out of business. Meanwhile, Freeport has just completed a massive expansion of their mine, a move which could lower their production costs even further. (Freeport maintains a cost advantage in large part because it has virtually no environmental costs. While miners in the U.S., Australia, and many other countries must treat their mine tailings, Freeport dumps theirs into the local river system.)

Moffett certainly doesn't sound cowed by the latest news out of Indonesia. In the New Orleans Times-Picayune on Jan. 11, he said, "The low-cost producers are the survivors, and the rest of the industry has to either consolidate or shut down."

And he added, "Freeport is not a gold producer. Freeport is a copper producer and produces gold as a by-product. There's nobody in the world who can make a profit selling gold at $200 an ounce - except us."

While Moffett sees a bright future, there are a few storm clouds on the horizon, primarily in the form of the IMF. As part of its bailout plan, the IMF has talked about the need to eradicate corruption from the Indonesian system. But it's unclear to what extent the IMF, the United States, or the Organization for Economic Cooperation and Development - which has begun implementing an anti-corruption program - will go to insist on eliminating the corruption within the Suharto family, which coincidentally has close ties to Freeport.

Two of Suharto's sons, Sigit and Hasan, each own 10% of an Indonesian company called PT Nusamba. The other 80% of Nusamba is owned by three foundations headed by Suharto himself. A year ago, Nusamba bought - at a cost of $300 million - a 4.7% stake in PT Freeport-Indonesia, the company that operates Grasberg. To allow Nusamba to buy a slice of the mine from another group of investors, Freeport, in its 1996 annual report, explained that it "agreed to guarantee up to $256 million of financing being provided by a group of commercial banks to PT Nusamba." In other words, Freeport guaranteed the financing for Suharto and his family to turn around and buy a share of the company.

While the Nusamba deal indicates just how closely aligned Freeport is with the Suharto regime, that relationship might not hinder Freeport as the country moves into the post-Suharto era. The key question is one of transparency. If Suharto's successors are reformers, will they look favorably on Suharto's relationship with Moffett and Freeport, or will they look for evidence of favoritism and possible corruption?

And even if Suharto is succeeded by reformers eager to weed out corruption, expropriation of Grasberg is unlikely, since the new regime will have to be pro-western and pro-free market if it is to survive. And perhaps most importantly, whoever succeeds Suharto will need cash. And Freeport, backed by the world's largest deposit of gold, will continue to have cash to spare.

A note to readers: Bold and uncensored, The Austin Chronicle has been Austin’s independent news source for almost 40 years, expressing the community’s political and environmental concerns and supporting its active cultural scene. Now more than ever, we need your support to continue supplying Austin with independent, free press. If real news is important to you, please consider making a donation of $5, $10 or whatever you can afford, to help keep our journalism on stands.

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