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 About The Tesoro Scandal

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Posts : 532
Join date : 2011-01-27

PostSubject: About The Tesoro Scandal    Fri May 06, 2011 1:55 pm

Mr. Shand: Pardon. This is what Prof. Ryan had to say about corruption in that era. He was putting it in the mould of the PNM pledge for morality in public affairs. I quote: "The third significant pledge made by the PNM was to establish a regime of morality and accountability in public affairs. On this score, the party failed unequivocally. The winds of corruption which began to blow within the PNM's first term, blew fiercely in the seventies and eighties, and a regime which began by promising to institute a republic of virtue ended its reign presiding over an orgy of corruption." When we hear the high officers of the PNM affirm and re-affirm that they stand for morality in public affairs and that has always been the position of the PNM, we must look upon these utterers as hypocrites.

The Member for San Fernando East does it all the time. He did it during the course of this debate. The Member for Port-of-Spain East echoed him—"let me categorically state that the PNM stands for morality in public affairs and anti-corruption." Saying one thing and doing another. It was the Member for Point Fortin who drew to the attention of this honourable House the very ironical situation where during the gas station racket enquiry when the PNM made as if they were interested in rooting out corruption, that very year they were consummating this very dirty deal—doing one thing and saying another.

Mr. Shand: Mr. Speaker, I want to let this House know, my own personal testimony of corruption of the era. Prof. Ryan eloquently stated—tropical storm in the 70s became a hurricane of orgy, a hurricane of corruption—that is what he was saying by the time they demitted office.

In 1973/1974, PNM was in its heyday; oil prices turned at the end of 1973; petro-dollars flowed; money was no problem; temptation for corruption never was greater. In that year, 1973/1974, I was assigned as a public servant to the Office of the Prime Minister. I occupied an office in what used to be called "the stables", where the office of the Economic Advisor to the Prime Minister was located. In one of those offices in "the stables", the Member for San Fernando East—I used to see him chilling out there—I think he was a Parliamentary Secretary in the Office of the Prime Minister at the time. I was on an assignment which had to do with the formation of what is now called Tanteak, but that is another story.

I do remember the Member for San Fernando East as a Parliamentary Secretary and a political nonentity, very much what he is today as a matter of fact. I remember one day a senior public servant in the back there who saw me in close proximity to the Member for San Fernando East and who thought I was getting close to the party—that person who cared very much for me, pulled me aside and said: "Young man, you have just come back. Let me give you some advice. If you want to survive in Trinidad and Tobago, do not let Eric Williams fall in love with you for he once loved several."

I kept my distance and I survived, but from the distance I observed a lot at Whitehall. I observed more than the Parliamentary Secretary in the back room. I saw the comings and goings of the Cabinet; I witnessed the dictatorship of Eric Williams—not a damn dog bark; when I say cometh, he cometh; when I say goeth, he goeth. I witnessed cabinet members allowing themselves to relax only when Boysie acted as Prime Minister. Things were free and easy then. I remember it was Boysie in his capacity as Acting Prime Minister who had a lot to do with this deal. There was a stench of corruption emanating from the cabinet room of the era, and I am talking about 1973/1974. The Member for Tobago East had long got a whiff and had walked away from that stench and out into the rain.

I will share a little more with you about my personal experience of this corruption. As a result of certain activities by certain Ministers I found myself no longer occupying the back room in "the stables". For a brief period in my life, I drove a taxi, one of these taxis that service hotels. This particular hotel used the services of the Hilton Hotel. They did not have their own and I had an arrangement. At that time, it was very customary for me to be called to take foreigners to the airport, to meetings—foreign businessmen. I sat in the front of my taxi and had a front seat view of what foreigners thought of us, because I was there, sitting down, driving a taxi looking black and stupid, and they spoke. You will be shocked to know how these people spoke about Trinidad and Tobago. "It was suck eye, easy pickings" in all kinds of strange accents. It was really disgraceful, because I could not turn around and say, "well, all of us are not like that. That is the PNM doing that. No, this is my country".

Another blow was struck, when in further pursuit of a living which I was trying to make, despite the efforts of the PNM against me, I found myself in New York, East 57th Street, I think it was. I went to purchase materials for a little business that I was setting up. Honest work. I work with my hands, and I went to buy some type. In the old days they used to use lead type. When I announced that I was from Trinidad, the caucasian American gentleman who was selling me the material, said, 'Trinidad? Gee whiz, I know all about your country. I asked how and he said, "well, you know, I made a killing". I said, "what do you mean?" He said, "I was a shareholder of Tesoro Petroleum Corporation. Do you know, because of that company's investment in Trinidad, I made a hell of a lot of money on the stock exchange?"

I decided to do some research and I am going to share the results of that research with this House and with the nation. What was the impact of little Trinidad and Tobago on the profit-making on Wall Street? As a prelude to sharing this information with you, I would like to just read a sentence from the sworn deposition of Mr. John Rahr, which was made available to us today, where he was referring and advising the Tesoro people in San Antonio to pay the $2 million bribe to Johnny. I quote from his testimony:

"I advised Detwiler..." who was one of the people named in the action— "...that in my view this would be a very good deal for Tesoro and that the $2 million was a trifling amount in relation to the long term benefits to a small company like Tesoro."
He was a very astute financial analyst, because in l968 he was able to calculate that a $2 million bribe was going to bring enormous returns to the Tesoro Petroleum Corporation of San Antonio, Texas, a small unknown company which was formed only in l964, four years prior to these shady negotiations. In my research I got hold of the consolidated financial statements of the Tesoro Petroleum Corporation for the years l967 to l974. In l968, the year prior to the acquisition of 49.9 per cent, of the assets of British Petroleum in this corporation called the Trinidad Tesoro Petroleum Company Limited, the gross income for the Tesoro Corporation was $24.6 million. One year later, in l969 it almost tripled to $70.6 million—not because they did anything fantastic in the United States, but simply because they got a good corrupt deal in the Trinidad Tesoro Petroleum Corporation Limited.

Between l968 and l974, the income not only tripled, it multiplied itself 21 times. Whereas in l968, prior to engaging in the Trinidad Tesoro Company, they had $24.6 million income, in l974, that figure was $534.9 million. No wonder John Rahr used to be so highly paid. He could see; a great financial analyst. This is how the company used to write to their shareholders at that time, talking about their deal. This is an extract from a letter to the shareholders in the annual report of l969. This is the year the deal was struck: "In fiscal l969, revenues and net earnings from sales of crude oil, natural gas and refined products, reached the highest levels in the company's history. These increases reflect Tesoro's uninterrupted growth through internal development and acquisitions, since formation of the company in l964.

They are reporting to their shareholders, Mr. Speaker:
"In a continuing expansion programme, the company formed Trinidad Tesoro Petroleum Company Limited in a joint venture with the Government of Trinidad and Tobago which purchased the British Petroleum groups, oil and gas producing properties and undeveloped acreage in Trinidad."

In a similar letter in the annual report of l970, a letter to the shareholders, they say as follows:
"In fiscal l970, corporate revenues and net earnings rose again from record levels set last year. During fiscal l970, the company enjoyed a full 12 months of income from its approximately 50 per cent equity ownership in Trinidad Tesoro Petroleum Company Limited. Management is well pleased with this operating company which is making a significant contribution to Tesoro's earnings."

So my friend from whom I bought the type in New York was laughing on his way to the bank and I was poor and scrunting, and a national of Trinidad and Tobago whose patrimony was sold out.

But perhaps the most shocking figure was the figure at the end of the financial statement for 1969, where they had to show, as an unconsolidated foreign investment, how much was invested in the Trinidad Tesoro Petroleum Company Limited. We know they paid US $50,000—that was their investment—or 49.9 per cent of the shares, but in the statements they sent to their shareholders the figure is given as US $2,080,000. Now we see how bribery accounting is achieved. The $2 million bribe was added to the $50,000, and perhaps another $30,000 was put aside in some sinking fund for incidental purchases of silver trays, airline trips or whatever. But there it is, an investment of US $2,080,000 shown in the books and purported to the shareholders of the Tesoro Corporation of San Antonio, Texas, when they paid only US $50,000.
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Posts : 532
Join date : 2011-01-27

PostSubject: Re: About The Tesoro Scandal    Fri May 06, 2011 1:58 pm

A good piece of history on PNM corruption
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About The Tesoro Scandal
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