The ABC’s of Communism Bolshevism 2011

Jason W. Smith, Ph.D.

 

Chapter 27: See Saw II: The Cold War: 1973 – 1989

The Rockefellers had decided five years earlier, during the Vietnamese Tet Offensive of 1968, to wind up the failed strategy of globally confronting Bolshevism with armed force in favor of a live-and-let-live agenda with Socialism. They sent Nixon and Kissinger to Peking to make peace with the leader of the world socialist stage Mao Zedong in 1972.

I was familiar with many of these details because high ranking Rockefeller US agents had asked my mentor Frank Pestana for his help in arranging this “sit down” between Kissinger (then Nixon and Kissinger the following year) and Chairman Mao. Frank was the head of his own organization now (the US-China People’s Friendship Association), having previously been, along with his wife Jean Kidwell, one of the principal attorneys for the CPUSA on the West Coast. These two having left the CPUSA when it began its long slide down the slope of modern revisionism. In China, Frank met with the Chairman and PRC government boss Chou En-lai, and followed their advice to return to the USA and continue his work; along the way to help the newly emerging Progressive Labor Party which would replace the renegade CPUSA (having been taken over by the gringo modern revisionists and siding with the Soviet New Class bosses) to become the revolutionary (real) communist party in the USA! Chairman Mao would later refer to Frank as “my outpost on the West Coast of the United States.”

As 1973 opened, and the US was exiting from Indochina, the Cold War began to take on a new shape. For our purposes let us continue to follow the petroleum thread in imperialism’s many colored coat.

October 16, 1973: Exporters Set the Price

Dr. Hammer had broken the companies ability to set the price of international crude and introduced tough negotiated bargaining over price and profit sharing. The Egyptian and Syrian attack on Israel in the Yom Kippur War of October 6^th to 12^th, 1973, had placed the Arab nations and Iran in the oil exporting position they had been angling for since their first fledgling attempts to establish a price setting cartel (OPEC) a decade earlier. Namely, they were now in position to set the price unilaterally themselves.

Deep Battle 1973

Israel Faces Annihilation

At mid-day October 6, 1973, hundreds of Egyptian and Syrian fighter-bombers struck Israel everywhere behind the lines while nearly two thousand field pieces opened up on Israeli positions on both the Egyptian and Syrian borders. Deep battle had come to Arabia. One could see the clear influence of Soviet military doctrine (known also as Deep Operations) which apparently had been well learned by both the Egyptians and Syrians as they blasted Israel’s fixed positions to bits and broke up their rear into so many scenes of chaos it was a wonder they ever got a defense together at all. They did, but had to threaten Arabia with atomic attack in order get both the US and USSR to step in before Israel was obliterated from the face of the Earth.

Israel had the ability to mobilize 250,000 men within 24 hours and excellent strategic positions ranging from the Suez Canal (they considered their bulwarks along the Canal to be invulnerable) to strategic dominance against Syria and Lebanon. That was on October 25^th, 1973.

The next morning, 100,000 Egyptian soldiers, with 1,000 tanks waited to cross the canal and get through openings to be created in the bulwarks and do it quickly. In the event it took 4 hours under fire for the Egyptians to get their first tanks across the Canal, through the blasted-out openings, and within another hour were miles into the Sinai.

Israeli tanks a few miles away tried to plug the gap in the Canal wall but encountered new Soviet anti-tank missiles which could be steered by soldiers on the ground during their flight. The Israeli tank force was completely destroyed.

Unbeknownst to the Israeli’s (and needless to say to the always “intelligence” challenged gringos) the Soviet Union had installed its most advanced SAM’s to cover the canal against Israeli warplanes. So, while Egyptian armies blasted away the canal bulwarks the Israeli’s had built, made of sand, with high pressure water hoses, the Israeli counter strike by air flew directly into a trap – a killing bottle.) In other words, when the Egyptians and Syrians launched their surprise attack on the 6^th of October, the Israeli air force flew against them and was caught in the SAM trap where most of its best jet fighters were blown out of the air! Without adequate air cover Israel was finished and Arab troops began to blast their way through Sinai and into northern Israel and the Golan Heights (occupied Syrian territory). 1200 Syrian tanks and 60,000 Soldiers were attacking and breaking through all along the line. Israel called for total mobilization of all reservists as well as active duty personnel. It took two days to get reinforcements together in an organized fashion to enter the northern fight.

Golda Meir begged Washington to save them by restocking their armaments. But the fact was also that Israel could not win on both fronts at the same time. The northern fight was most strategically important because the massive Arab armies were only a few miles from Israel’s heartland. – And, then for reasons unknown the Syrians stopped. They lost the initiative at just the moment they could have struck the decisive lethal blow against their enemy. The Israeli’s fighting for their very existence now pushed everything they had into the northern fight and began to retake some land. Within a day the Israeli’s were within 30 miles of the Syrian capital of Damascus!

Coming to the assistance of Syria, Egypt’s President Anwar Sadat launched a powerful, but high risk, attack against Israel. Now came the biggest tank battle of the war. As Egyptian tanks moved forward and out from under their SAM cover, they left themselves vulnerable to Israeli warplanes, which knocked out 260 Egyptian tanks while losing only 20 of their own.

Within three days Washington landed thousands of tanks and warplanes in Israeli ports. Israel had bought enough time to rearm, reorganize, and frighten their population to death about the otherwise imminent destruction of their country, them personally, and their property.

The Israeli’s had to do something fast if they had any hope of winning because Israel cannot win a war of attrition. It is the smallest country in the world and simply cannot militarily prevail surrounded by every people in its neighborhood, all of which hated them and every fiber of what they stood for. Thus, Israel launched their own attack across the Canal and succeeded in destroying the SAM air screen so that the newly US supplied warplanes could blast the Egyptian Army on the West Bank into total disarray. It was Deep Battle again, in reverse this time.

This time the Soviet President Leonid Brezhnev said he would intervene unilaterally if the US did not join in a joint effort. The US went to full alert with its triad strike organization. But, the US told the Israeli’s to back off – “consider you won.” For their part, the Egyptians lost. In the end, the Arabs had insufficient strength to continue. The Syrians were ready to sue for peace. By surviving Israel won the war.

But, Israel had been so badly beaten up in the War she was in no position to enforce any wishes of her European and American imperialist sponsors. The US was in no position to intervene militarily in Arabia or Persia due to its ongoing commitments to its lost war in Indochina and the concomitant rebellion of the North American people which was so powerful that even the Cap Congress had to go along. No more imperialist wars for the moment.

The Soviet Union on the other hand had no such constraints and had proven its reliability in supplying and then resupplying both Syrian and Egyptian forces. Furthermore, the Soviets had prevented the Israeli’s from pulling their fat out of the fire, at the last minute, despite massive secret US airlift of war supplies and materiel to the Israeli’s, by threatening military intervention and having a Soviet parachute Army standing by to drop into the Canal Zone, as Soviet warships carrying nuclear weapons closed on the Mediterranean coast.

Meanwhile

In Kuwait City the oil ministers of the Arab World conferred – first with the Iranians present – then among themselves alone. Coming out of the meeting was the announcement that the price of oil would be raised by some 70% and companies could take it or leave it. OPEC (Organization of Petroleum Exporting Countries) had teeth.

Embargo, Super-tankers, New World Petroleum Order

The oil weapon – the Arab embargo - had been unsheathed first by Nasser and now by Sadat. All the imperialist oil monopolies were threatened immediately by the ability of the Arabs to cut off all of their oil by shutting down pipelines, or if necessary blocking the canal again, or in the last resort setting the oilfields ablaze. Contracts, pipelines, all this meant nothing in the new real world. One technological innovation however remained to the imperialists and that was the idea of the supertanker.

Congenitally unable to think in any but the most short-sighted unintelligent way when it comes to matters of greed the imperialists had refused to invest in research, exploration or anything else that was capital intensive. With a few exceptions. We have seen one of those in the form of the Schlumberger monopoly world wide on oilfield service and we were about to see a second. The Japanese invention of the supertanker.

While the Gringo bosses and their Brit lapdogs went about trying to make excuses and disavow their alliance with Israel the Japanese had been doing something much more to the point. Namely building a super big oil tanker. They were taking the Nobel invention of cargo bulk oil shipping to its ultimate and final breathtaking step. Building ships of new steel so big they could carry enough oil to fund an entire market for an extensive period of time – furthermore these new super ships could pick oil up anywhere – meaning they were no longer directly dependant upon the exporting countries for anything.

(Note how fast the Anglo-Saxon “supporters” of Israel were willing to abandon their “ally” when times got tough. Something the Israeli leaders had always known would happen; the reason they had prepared their defense in an atomic manner that in no way depended upon the same people who had let them be slaughtered in Europe before they had a homeland. Atom bombs are no joke and it is only Israel’s possession of those weapons – a product of their own initiative – which, in the end, saved them.)

Today’s Israeli leaders should really take a long look at their alliance with US imperialism which is in precipitous decline and will be no more reliable to them now than it has been in the past. They have an alternative but they have to act fast. Failure to do so may lead them to the total destruction they almost suffered in the Arab attack of 1973. Fortunately the Jewish people will survive no matter what happens to Israel but Israel’s total destruction is not necessary and those with the ability should try and help their fellow religionists in avoiding annihilation which is the road Israel is currently on.)

US ship builders had been taking the position that supertankers could not be built because of the size and weight of the cargo and the insufficient strength of then available alloyed steels, since the onset of the Eisenhower Administration in 1953. However, Japanese ship builders were already building big super-big tankers and soon with the invention of super steel the entire project had taken on a new life. By the end of the Suez crisis in 1957 and 1958 the Japanese had the ships and the ability to travel to Iran and Arabia and just about anywhere else to pick up loads of oil and get it back to the industrial heartland of their new Empire. Within a decade Japan was creating supertankers with five times the capability of these early ones; furthermore, in 1968 six new Japanese tankers were getting ready to go on a permanent run from Iran to Japan – each with a capacity in excess of 300,000 tons of cargo – seven times the size of the first generation (1957) supertankers.

No longer would physical control of the oilfields be the key issue. Now it would be price.

British Capital Gets Lucky

Always preferring to steal rather than work to get what they want the Brit capitalists along with their French allies had lost Arabian oil to Nasser and the Arab Revolution. What happened to save them in the end was the huge oil strike in the North Sea.

The same year as the Arabs almost liquidated Israel – 1973 – exploration offshore Norway and the UK had yielded evidence of enormous quantities of oil in the North Sea and at levels not even very deep. By 1975 Britain’s labor fakir Prime Minister Harold Wilson was able to see that by 1980 Britain might well be the head of OPEC.

The Iranian Islamic Revolution

The corrupt US puppet Iran Regime of their creation – the Government of the so-called “Shah” of Iran, Reva Pahlavi, was doomed to overthrow when his nincompoop son, the 1960’s Shah, inherited the Throne. It was inevitable he would be overthrown by a coalition led by Iranian capitalist farmers under the leadership of the extremely orthodox Shia spiritual boss Ayatollah Khomeini. – And the exit for the Americans was extremely messy as they had no leadership whatsoever on the ground in Persia or for that matter in the halls of government in Washington. Ken Follett’s book On the Wings of Eagles describes the situation about as well as I think it can be described. (This is the story of how H. Ross Perot organized and carried out an armed rescue and prison break for a number of his employees being held in Tehran. In the process they released all the prisoners in Tehran’s central jail.)

For our purposes we should note that Iranian Communists seized control of the oilfields establishing what they called the Committee of 60 which was composed primarily of the Party’s technocratic arm in alliance with the industrial workers in the oilfield plants and refineries. However, without a strong Party organization in other critical sectors of the working class and working farming masses the Party could not proceed to the seizure of state power and thus was cornered eventually by the ignorant Black Hundreds of the Islamic crackpots and liquidated.

- And, for our purposes in following the petroleum thread in this new multi-colored coat of international imperialist expansion we should note the Islamic Revolution succeeded in bringing the cap classes of the world to their knees once again. Even though Iranian output was only about 6 percent of the world’s then total daily consumption it came on top of dislocations in supply already being experienced by the competing imperialist oil monopolies. (e.g., where the four Aramco partners had locked out others (like BP) from Saudi Arabia – the main Arab producer). Also, it came after the Japanese had increased their private take of Iranian production (with secret agreements on price much to the disadvantage of the other oil monopolies) to some 20% of their total daily consumption and so faced the dire fact of almost immediate industrial paralysis should the new Muslim bosses in Iran choose to cut it off. A collapse of the Japanese economy would trigger a global capitalist collapse!

At the time all of this was going on in the late 1970’s I had my hands full in South America so, like you, I have had to learn much about those years from the historical record. By the time I got back to the States in late September 1980, the future of the US in Persia had been settled once and for all. No more oil for gringolandia from Iran except as it suited the Ayatollahs.

Venezuela Standing Up

Meanwhile in Latin America the tide was turning in favor of the national patriotic bourgeoisie and the national comprador bourgeoisie too. The latter joining the former time and time again to expel Gringoism (US control of local economies) in favor of themselves taking command of their own working people and exploiting them on their own for their benefit not the benefit of the gringos. Thus, from the early days of Juan and Eva Peron in Argentina (1940’s and early 50’s) to the Viceroyalties of the Gringo Regime (of the 1970’s and 1980’s) in Peru, Colombia, Venezuela, and Ecuador, the cry was arising: Peron Si Yanqui No! Peru Si, Yanqui No! -And so on.

Alongside, inspired by Cuban Socialism, patriotic bourgeois, working class and farmer leaders throughout Latin America were forming guerilla armies to overthrow the local fascist and comprador (of US imperialism) regimes by direct Castro and Guevara like action.

In Venezuela, as we have seen, the US imperialist oil monopolies and the US Government had thoroughly tamed the all-too-willing to-be-corrupted regime of General Gomez. Subsequent regimes in Caracas had been just as corrupt. The end to all of this had to come, which is to say the end for the imperialists was inevitable, as the national bourgeoisie in Venezuela was chomping at the bit for a chance to get rich running their own country. Again, alongside, was a rapidly expanding communist movement, inspired by the success of Fidel Castro and Che Guevara.

In 1948 the oil monopolies succeeded in a military coup in placing a Colonel in charge of the Venezuelan government. The Truman Administration with its new imperialist foreign policy (having shit-canned FDR’s within two weeks, the new fascist bosses were in full command) fully backed the new military tyranny. The Gringo’s new boss was Marco Perez Jimenez and he was of exactly the same type as good old General Gomez (the oil companies had liked so well) before he had been unseated by “local left wing trouble makers” (As referred to by the CIA station boss report in 1958) in 1936. This was the period of Gringolandia attempting and often succeeding in establishing fascism in its own image throughout the world but especially in Latin America as in their earlier adventures against democracy in Guatemala and Cuba (organizing the fascist military adventures of Castillo Armas and Fulgencio Batista, respectively).

The 1958 overthrow of oil monopoly stooge Perez Jimenez brought a temporary progressivism to Caracas. Among other things this resulted in the new bosses sending military and other support to Fidel Castro then fighting the final life and death battles for Cuba’s liberation in the Sierra Maestra Mountains of Cuba’s Oriente Province.

The first change in oil policy came as the new regime in Caracas hired once again the man who more than any other would shape the democratic direction for PDVSA: his name was Jose Pablo Perez Alfonso. Perez Alfonso had been around a long time  with a lot of scrapes with the oil companies and their Government stooges. Most of this time as a result had been spent in exile. Now he had the opportunity to reshape Venezuela’s oil policy so more of the money would actually (1) come to Venezuela under the never adhered to but always quoted 50/50 principle, and (2) be for the benefit of a broader social program for the people of Venezuela.

PDVSA

The first great change occurred in 1973. It centered around the creation of a Venezuelan form of PEMEX which they called PDVSA (Pay Day Vay is how these Spanish initials are pronounced in Spanish with SAW thrown in at the end – S.A. is the Spanish equivalent for Inc. or Incorporated.) Petroleo de Venezuelos would evolve exactly as had PEMEX in Mexico; which meant the focus of corruption would be on the relationship between the Oilfield Workers Union and the imperialist oil bosses directly. Just as it was and is in Mexico today.

Remember, just because the oilfields are national property doesn’t mean private enterprise is not involved. It is, and always has been, heavily involved in every way in Mexico and then also in Venezuela. Most oilfield service contracting in Mexico has always been done by Mexican privateers (e.g., Armando Leiva Torres) and international oil service monopolies (Shlumberger, Halliburton, NL Industries.) So it would be in Venezuela. -And the labor leaders in Mexico and later in Venezuela were labor gangsters almost to a man! Trillions have been extorted from the oilfield in both countries by these gangsters. This is a special form of legal combined with illegal corruption so unique it has its own group of US oil scholars in several universities.

Crisis in Mexico 1982

- And, in Mexico all was not well for imperialism either. I happened to be there and lived through the crisis.

I spent the years 1982 and 1983 as the Assistant Manager for NL Industries Mexican oilfield service operations (where we operated under the duked-in trade name of NL Shaffer de Mexico SA de CV.) Shaffer was an oilfield Blow Out Preventor company assimilated by the Borg-like expansion of NL as one of the world’s three biggest oilfield service conglomerates. It already had legal status in Mexico and so we used it to bring in all the other new NL divisions such as NL McCullough which was the real operator for NL in Mexico and where I was a Logging Engineer (the key technocratic position in that realm of oilfield service known in the industry as “wireline” – logging, perforating and pipe recovery) and Assistant Manager for Mexico. (BOP stands for Blow Out Prevention in the oilfield and later I would learn it also stood for Bureau of Prisons in Gringolandia’s totally corrupt federal judicial system.)

However, my knowledge of the Mexican oilfield went back to 1962, when, at the foot of Carlos Prieto, I learned about the STPRM (Oilfield Workers Union of the Republic of Mexico) and its then new boss Joaquin Galicia Hernandez known as La Quina, throughout the nation. His “closest comrade in arms” as described in the STPRM propaganda was then Senator from Tamaulipas, Barragan Camacho. Another labor gangster who had taken the number two spot next to La Quina in exchange for his oath of fealty and more down to earth self interest in exploiting every aspect of the oilfield workers union for personal benefit, as instructed by his new “closest comrade” La Quina.

So I knew this and back then, twenty years earlier, in 1962, Carlos Prieto had told me how he had first personally encountered the new labor boss. Carlos had been on a trip to Tampico doing a documentary film for PEMEX. As they approached the refinery La Quina and his men had stopped the incoming caravan and La Quina personally mounted the cab carrying Carlos Prieto demanding money if they wished to enter and do their filming. Carlos told me he had almost lost his life without knowing it when he had refused. Upon telling this story to the local PEMEX manager of the refinery he said the manager became quite upset and left the room to pay La Quina himself and beg forgiveness for the ignorant intellectuals from Mexico City!

Whereupon Carlos launched into a long diatribe about how the labor gangsters had killed off or bought off the communists (Plomo o Plata – Lead or Silver) and the sad state of labor relations in Mexico. I had this data under my belt by the time I arrived in Villahermosa, Tabasco, in September 1982 to take up the position of Assistant Manager for NL Industries with secret orders to shut down the entire Mexican operation when the word was given from Houston.

The Gringo Regime had encouraged the Mexicans to borrow and borrow and borrow still more from the US oligarchy and its banks. That encouragement coming in the form of huge bribes. For the Mexican people, that borrowing being justified by the immense Mexican oil reserves and the assured annual income it produced, and for the social programs introduced and for which the Union claimed credit for itself. (These programs were important for the oilfield workers and their families but were a mere pittance compared to the billions being stolen outright by these union gangsters – many of whom I knew well in more ways than the obvious. See my book Third Crusade for the details.)

The problem in 1982 flowed initially from collapsing oil prices globally and the subsequent inability of the Mexican government to pay its bills – lack of cash. Then it got complicated when the Mexican oil minister ran afoul of the PRI President Lopez Portillo (1976-1982). (The Pemex chief is considered a Minister despite the fact he is technically under the Energy Ministry.) The oil Minister was the Mexican aristocrat Jorge Diaz Serrano, a long time partner of George Bush Sr. in a variety of US and Mexican offshore oilfield service and actual oil ventures including Zapata Petroleum in Texas and PERMARGO in Mexico. (PERMARGO was the Mexican government contracted Marine Drilling Company of Bush and Diaz Serrano. It gave these two capitalists everything every capitalist wants: which is no competition and assured governmental payment – this costs a lot in bribes in any country, including Mexico, and the USA.)

Diaz Serrano unilaterally made the decision to cut the price on Mexican oil to compete in the global collapse of oil prices. Every barrel of oil going out of Mexico has a designated dollar amount going directly to the bank account of the President (whoever he may be, then and now.) Thus, this cut in oil prices meant a cut in Lopez Portillo’s personal income! Lopez Portillo fired Diaz Serrano over this and more importantly removed “the finger”.

What is “the finger”?

When the PRI Mexican President announces his pick for successor, said pick is said to have received “the finger.” The PRI then proceeded to elect said person. His election was assured. Diaz Serrano had received it from Lopez Portillo and now it was gone.

Lopez Portillo chose in his place another New Class type of technocrat named Miguel de la Madrid Hurtado (MMH). Before this was over Diaz Serrano would spend the next six years in prison. (That’s when I realized how duplicitous Bush Sr. was. If he wouldn’t help his friend and long time business partner stay out of a Mexican jail when all it would have taken for a US Vice President was a phone call, I knew what kind of man he was – and his whole fucking family as it turned out.) Bush dumped Diaz Serrano because now he had locked up his “special relationship” with the Saud family and this would eventually make him into a trillionaire. Too bad and tough shit for “old friends.”

On this date I arrived in Villahermosa with my formal assignment as Assistant Manager for all of NL Industries operations in this most important foreign NL district (even though we only made about $300,000 per month in Mexico it was still the biggest foreign operation for that conglomerate at that time. Surprisingly even more than we made in the North Sea at that time.) Of course I had my secret orders to prepare to shut down the entire operation when the word was given either from Houston (operational HQ for NL) or New York (where the rather parasitical Board of Directors for NL was sitting at the time. Their days were numbered too; although they didn’t know yet about Harold Simmons and his soon to come hostile takeover.)

Lopez Portillo had appointed another famous Mexican aristocrat as Finance Minister in April (1982) and now came to depend upon him and his famous name to help in removing Diaz Serrano and the entire PEMEX bureaucracy that had sworn allegiance to him. The new Finance Minister Jesus Silva Herzog was himself also a very well trained technocrat. Furthermore his father had been involved in the original nationalization of the Mexican oilfield (1938) and was an early Director General for PEMEX. Together these two managed to get the nation to accept several things including the reorganizing of PEMEX under leadership agreed to by MMH, the incoming President, and the nationalization of all of Mexico’s banks!

In the midst of this mess we (NL) were not getting paid and when I arrived had not been paid for nearly one year. It was for this reason the NL bosses wanted to shut down the Mexican operation. It wasn’t that the Mexican’s refused to pay; it was they didn’t have the money to pay us for the “tickets” we had written monthly for services and which they had signed and agreed to. There were many other more important people to be paid with what they had.

What to do?

After I saw how well run the Villahermosa district was thanks to the best manager I have ever known – E. King Freeland Jr. – I decided a wiser course was available and decided to pursue it.

Of course the reality ignorant US bureaucrats in Houston and New York did not know how to get paid because they are the typical children of the US petit bourgeois New Class. Raised and educated in a fairy tale like way at ruling class prep schools like Andover these guys can barely get a hard-on, let alone figure out how to deal with the real world fucking they have to get into to work in a third world shit-hole like Mexico. If you want to get paid in these places you have to pay yourself! Yes you have to pay the paymaster to get at the front of the line. Anyone with any street knowledge of Latin America at all would have known this. Of course, those of you who have read my three Peruvian books know I had garnered plenty of that.

So I put the paymaster at PEMEX on my personal payroll. Then not satisfied with that I went to BANAMEX now owned by the Government and told them they would extend us full credit against our tickets. Just to be sure these bankers (I went to Mexico City to do this and then came back to the local BANAMEX bank chief to implement it) understood the importance of this cooperation to their own healthy well being, in both cases I took with me Luis Contreras – number one underboss of the STPRM in Mexico’s Zone Five! Needless to say we got all we asked for and in fact even more.

As Mexican payments to foreign contractors collapsed (only NL was being paid for some reason, Schlumberger’s boss for Mexico told me) Mexico formally defaulted. The gringo Regime had no choice but to work things out with the Mexicans and after several years of in-fighting between them it was. Then the other oilfield service providers got paid too.

The initial moratorium agreed to by the Yank bankers and political bosses in Washington was converted into a “roll-over” and Mexico given the time it would need to put its house in order. Rising oil prices later on would take care of that and Mexico would not collapse again until the Gringo economy itself collapsed in 2008, a quarter of a century later.

As the World Turns

The Assassination of Miguel Zenteno

As an interesting aside, MMH upon assuming the Presidency, had appointed in 1983, young, well educated and oilfield experienced Mexican petroleum engineer Miguel Zenteno as the de facto number one, within the new oil ministry. MMH had given him complete authority to reorganize PEMEX contracting. Since this involved in Zenteno’s opinion the removal of the Union’s automatic 2% on all contracting and their guaranteed oilfield service contracting preference it was also a death sentence, as it would turn out!

My principal Mexican partner was my girl friend Leticia Mari whose former husband (Armando Leiva) had been Mexico’s biggest oilfield service privateer - drilling and bringing-on-line, hundreds of oil wells in Mexico’s major oilfields now in Zone Five (Tabasco and adjacent on and offshore drilling sites.) At the time I met her he had amassed 400 million dollars and was deriving many millions more per month in royalties! At my request she had organized a luncheon at Winston Churchill’s (a major ruling class watering hole in Mexico City) where our (NL’s) entrance into the Vera Cruz zone of Mexico’s oilfield had been agreed upon among the “wives.” Who in this case included the wife of Mexico’s oilfield paymaster, and the new wife of this new Pemex master engineer Miguel Zenteno. As a consequence Leticia and I had been invited to a get together in Poza Rica with PEMEX middle level engineers and Engineer Zenteno, his wife and children. We were to go there on a PEMEX Lear Jet the following Thursday.

What happened in fact was only minutes after she had returned from that luncheon with all this news we were telephoned by Don Andres Sanchez Solis, boss of Zone 5 for the STPRM (Oilfield Workers Union of the Republic of Mexico) whose wife’s home we were living in, in the Mexico City exclusive quarter called Polanco. He asked that I take them on an Opal hunting trip to Queretaro that Thursday and Leti thought it was the better choice for us than the trip with the Zenteno’s to Poza Rica, since we now had in hand the contract to expand NL’s interests in Mexico at Poza Rica.

The night in question came and after a long day of recovering Opals we two couples danced the night away in Queretaro’s fanciest five-star hotel. A kind of super luxurious one-storied “Best Western Motel” like Hotel with full blown animal shrub sculptures (as in the movie The Shining). Upon returning to the room and turning on the TV we saw the news that Zenteno’s Lear Jet had blown up over Poza Rica killing all on board. The engineer, his new wife and their children, the pilot and co-pilot were all dead.

Of course this was no accident. Not the explosion nor the fact I was not on the plane. Actually, I had been saved by accident. Doris Sanchez Solis was the best friend of my girlfriend. So the world turns.

T. Boone Pickens, Michael Milken and Me`

In 1984 I struck out in an independent way in Mexico and brought NL to the negotiating table not as an employer but as a “target.” As I say all of this was happening in 1984, a quarter century ago, but the ramifications would last the better part of the remainder of my life.

It all began for me when I met newly divorced Leticia Mari in Villahermosa, Tabasco, Mexico, that year. It was one of those cases of “fascination at first sight”. The woman for whom I had fallen was extraordinarily experienced in the real world of Mexican oil and the politics that go along with it. She had climbed the success ladder with her previous husband over a period of some fourteen years; as he climbed from being a company man to the richest privateer in the Mexican Oilfield with at least four hundred million dollars in cash and a monthly income (royalties paid on a permanent ongoing basis as part of the contract with PEMEX for his COPSA services) of commensurate size. To make this long story too short let me skip ahead to January 1985. (For the details of how I got into the oilfield service business and then into the oil business itself you are invited to read the forthcoming Volumes 6 and 7 of my autobiographical series which are entitled Third Crusade and The Eunuch Wars).

The following year, 1985, was a critical year because it was then I formed Jason Smith Petroleum Corporation (JSPC) in Los Angeles and proceeded to raise investor money and drill for oil in the Powder River Basin of Wyoming; specifically, in Weston County, near the small town of Upton. My strategy was simple. Search for oil in the cheapest way, which meant on land and in an area relatively well known geologically and simple to get equipment into, for less-than-deep total depth (TD.)

Deep in the oilfield means over 14,000 feet and ultra-deep means beyond 20,000 feet. This has a technical component and most importantly a financial component, as oilfield service price book charges increase at both deep and ultra-deep frontiers by a factor of 100% or more. (Everything in the US is done by oilfield service companies as the Oil Companies themselves are simply financial entities without in-house expertise of any kind in geology and engineering let alone drilling and all the jobs that go along with it.)

Some of the most important of these jobs and therefore the work of specific service companies are exploration, leasing, platform preparation and drilling, drilling mud, wireline (perforating, pipe recovery and well logging), fishing companies that specialize in recovering tools dropped down the hole, and many more.

My first well in the Powder River Basin’s Wyoming province reached TD at about 8000 feet which made it the deepest well in Weston County. Here we hit considerable oil according to oil shows (as we later proved in federal court when the Gringo Regime’s prosecutors were pursuing their client’s (NL’s) desires in trying to put me out of business – which we also proved after I uncovered secret correspondence between the SEC flunkeys and Dock Parnell, NL’s so-called “security chief”.) That particular client being my former employer NL Industries. NL was scared to death I would put them out of Mexico and take that business for JSPC. They were right.

I was the typical “small” oil man. Something akin perhaps to Dad Joiner in Texas we have reviewed above. My opponent – NL Industries – was one of the three biggest oilfield service companies in the world (Schlumberger and Halliburton being the other two at that time.) We reviewed Schlumberger’s origins in our discussion of the First Five Year Plan in Chapter 15.

Halliburton was originally just a cementing company with a small wireline arm called Welex. Then it made a deal with Dick Cheney and this nothing politician jumped from being Wyoming’s only congressman to being Halliburton’s CEO. Along the way he and they would make billions as Cheney duplicated Bush I’s strategy as the fast way to the big time. Cheney’s new job as Bush II’s VP gave Halliburton everything every capitalist dreams of – no competition, guaranteed no bidding contracts, and the Iraq War to go along with it, which provided still more super profits via no bid contracting.

Get Smith Forget About Madoff

NL had one important asset and that was its ownership of the gringo SEC (Securities and Exchange Commission). They simply bought (bribed) SEC lawyers and some high officials in the LA US Attorney’s office. In other words the SEC had among their employee’s, many flunkeys in the US Attorney’s Office for Los Angeles and the US Securities and Exchange Commission (SEC), specifically at their local parasitical nest for the West, in Denver. Especially three scumbags named Dan O’Brien, Robert Fusfeld and David Abbot. Accordingly federal cops and prosecutors spent millions trying to put me out of business (and in jail) over several years (1985 – 1991).

During that time, beginning in 1989, when numerous complaints about Madoff began to be filed with the SEC, they purposefully managed to miss this real con man (I was always a real oilman and the proof lay in the fact the totally corrupt US regime could never find an investor to testify against me) Bernie Madoff. altogether, even though he eventually made off with well over fifty billion dollars! Gosh I wonder if that was an accident?

No, it wasn’t. It was the direct result of a direct order from the National Security Council! Why was I a greater danger to their system then Bernie Madoff?

We have seen what NL was afraid of. What the US Government was deathly afraid of was another Armand Hammer – the US Communist we have reviewed above who by that time was untouchable, as a billionaire himself – and as President of Occidental Petroleum. We have reviewed some of Hammer’s successes in Chapter 26 foregoing.

In short, my problem was not just with low level scumbags like Assistant US Attorneys (e. g., O’Brien) or comical bureaucrats, (e. g., Fusfeld and Abbot.) If these had been all I had to confront we could have handled that. The problem came because it was the US National Security Council weighing in. These top spy bosses in Washington felt they had one communist oilman on their hands and did not want another! The National Security Advisor gave the Green Light to destroy JSPC and me.

(This infuriated a few special agents with a sense of fair play in the FBI, because no matter how they may have felt about me and my politics, they saw the gross injustice being done to several hundred innocent investors by the Government’s actions. This helped me in ways I cannot yet divulge.)

Additionally, and at exactly the same time, all the fattest of the fat US ruling families were scared to death of T. Boone Pickens who while much smaller than Hammer had proven that with the few hundred million dollars of value in Mesa Petroleum in Texas he could make himself into one of the most important “independent”, albeit small, among Middle-sized oilmen. (Superior Oil was valued over five billion at the time and the biggest of the Middle-sized oil companies, with about 25 times as much capital as Mesa.) Jason W. Smith was in the National Security Council’s view quite capable of raising a hundred million and that would put everyone into play and by a communist! They were, of course, right on all counts.

Finance is the Gun in USA High Level Gangster Economics

Politics is Knowing When to pull the Trigger

The Gringo federal political system is simply a “regularized and fair” gangland system of the Meyer Lansky type – just on a much bigger scale. The gun behind Pickens, which terrified these fat cats, was not Mesa which was strictly “small potatoes”, but the financial genius Michael Milken down the street from us (so to speak, I was in Culver City, Howard Hughes Jr.’s old stomping grounds) in Beverly Hills (and no Hillbilly’s) where his Drexel Burnham Lambert financial operation was raising billions of dollars for Pickens who intended to take over “their” (Rockefeller, Morgan, Mellon etc.) oil companies by hostile stock buying. This was the death knell challenge for each and every one of the Seven Sisters.

Milken had invented the idea of investors getting big returns (rather than tiny percentage offered by the ruling families and their banks) by buying into companies with scientifically derived real world values using an older, time-tested and tried instrument, usually associated with “penny-stock” offerings The cap press immediately dubbed these new instruments as “junk bonds.” Milken and I would both end up in a federal prison because the federal courts are totally corrupt, but along the way we kicked a lot of ass and did not go willingly! Remember US federal judges are just another category of corrupt federal bureaucrat.

The mechanism was simple and worked in this fantastic new way because investors had confidence in the issuer. It derived from the fact Milken had proven over many years his ability to investigate a given company and when he found it well managed, with real potential, he would advise his private clients to buy its stock, perhaps putting one of their own on its Board of Directors just to be sure this potential was realized once injected with capital. The buy-in was done via the old penny-stock route where these “stocks” were now called “bonds” and as we have seen were considered a new instrument by pundits and their press which immediately dubbed them as “junk bonds.” In actuality the only difference between Milken’s instruments and those considered by the cap press to be non-junk was that Milken’s paper was not insured. (On the other hand neither was the stock of most of the Fortune 500’s listing.) Milken’s cadre of investors understood this and if one believed Milken’s financial advice was good, as they did, then said person would buy, and buy in amounts he recommended. It worked because (1) Milken’s track record was impeccable and (2) because the greedy cap bankers had forced wealthy investors to search for some place, other than these banks, to put their money.

When Milken met Pickens in 1983, Mesa was as I say a small entity (a minor independent, incredibly small compared to the Seven Sisters.) Thus, the fat cat directors of the Seven Sisters (who usually knew little or nothing about petroleum geology or engineering) laughed at the idea one of them could be “taken over” by this upstart out of Texas. That was before they realized Milken could raise in thirty days as many billions of dollars as Pickens would need in taking over each and every one of these companies as he proceeded one by one. The end of the Old Order was written on the wall.

Cities Service

Before Milken however, Pickens had experimented in 1982 in the take-over of big oil companies with a run at Cities Service. Cities Service was the original creation of Henry Doherty, and in 1982 was the number 19 oil company in the US and number 38 in the DOW listing of industrial concerns. In the end Armand Hammer stepped in and bought up Cities Service and Pickens cleared about 30 million dollars in this try out.          

By mid-1983 Pickens was deeply involved in offshore Gulf of Mexico drilling (with fifty one drilling rigs working simultaneously, which mean huge daily outflows of cash) and needed ten times that much ready cash just to stay afloat! (When I went into the oilfield in Louisiana in 1982 it was common to pay $250,000 per hour for a rig only working in shallow “inland waters.”) Thirty million dollars as an outcome would buy a little time but otherwise was like pissing into the wind when you had to have 300 million!

Gulf

Pickens got into the big time when he next targeted Gulf Oil that dangerous year (1983) when Mesa and Pickens could have been bankrupt at any moment. Gulf was one of the Seven Sisters and originally the financial engine of the Mellon family in the US (after Spindletop) and Kuwait. But to take over Gulf would take a lot more than fooling around with stock purchases on the order of what Mesa had done with Cities Service. It would take billions – perhaps 14 billion to take a majority position at Gulf!

Pickens had learned a lot about Gulf in his fight for Cities Service as Gulf had at first been his major competitor in the hostile takeover front. Armand Hammer had ended the fight when he bought all of Cities Service stock. Now Pickens would put his knowledge about Gulf to work. Gulf was terribly managed and had been for a long time and had not found a new barrel of oil anywhere in the world for well over a decade.

None of this would matter of course unless someone even bigger than Hammer were to get involved. Who could that be? Gulf’s President Jimmy Lee, laughed “J.R. Ewing is just a TV show…” Little did he know a real life J. R. Ewing (Dallas) was already taking aim at him and his bullshit Board of Directors. Their Achilles Heel was their investor base they had abused and misused for many years. Gulf was vulnerable precisely because its appraised value was three times its then current stock value. In December, 1983, Gulf’s management survived its stockholders meeting by the narrowest of margins (52 to 48% against Pickens).

Enter Michael Milken. In January 1984 Gulf was in play and Pickens was the major threat to Gulf’s management once again. Gulf decided to go for a “friendly” cap buyer. They found one in Chevron (another Rockefeller Trust spin off, earlier named Standard Oil of Southern California -SOCAL) and sold out for cash to the tune of 13.2 billion dollars which meant shareholders, who had gone from $41 per share to $80 per share by this time, thanks to Pickens and his Gulf Investors Group and Mesa, made some 6.5 billion in profit! Mesa’s share was an after tax profit of about 300 million. Exactly the amount Pickens had to have to stay alive and continue in the Gulf of Mexico.

Univision

While this was going on NL Industries using their so-called security chief Dock Parnell suborned the SEC flunkeys in Denver and began a non-stop attack on me and JSPC in Los Angeles. I had to have money to survive that kind of attack and I decided to try a wild card much as Pickens had just done against Gulf to get the 300 million he had to have to stay afloat. I decided to go after the Azcarraga family press, radio and TV in the USA!

This Azcarraga Mexican oligarch family had illegally owned newspapers, television and radio stations in the USA since at least 1940. US law forbids foreign ownership of the press above about 10 percent, but as long as it was just the Spanish media the gringo racists had let it go. (Rupert Murdoch circumvented the US law on foreign ownership by first becoming a US citizen and then bringing in his fascist poison onto our airwaves. The Azcarragas had too much self respect to do the same thing.)

Now however, the CIA had, surreptitiously, for its own anti-Mexican establishment reasons, brought a case against the Azcarragas, which had ended in a recent administrative judge’s decision in this FCC case against that ownership. What had resulted was the longest opinion in such a matter ever issued and the bottom line was a divestiture order. They had to sell out and get out by June 1, 1986. They had been busy arranging a friendly takeover (much as had Gulf with Chevron) when I stepped in just before 5:00 p.m. on the last day, with a formal and registered offer in Los Angeles of over a quarter of a billion dollars in cash and securities with my own takeover company led by my father, former Idaho Attorney General, Graydon W. Smith.

I was aware of what was happening in this industry because the Azcaragas were involved and had temporarily become the enemy of the far fascist right in Washington under Reagan. It was my business to know what the enemies of the people were up too as you should have surmised by now. Now it was my self-appointed assignment to stop the CIA plot anyway possible.

These Gringo nutballs (typical of the screwballs that inhabit the CIA) thought they could influence the US Mexican-American population away from what they considered to be the “left wing” line of the Mexican press if they could force out the Azcarragas. Then they would put the Spanish press, radio and TV in the US into play and they would buy it out and convert it into the servile pack of liars that constitute the entire US English press, radio and TV already under their control. (They got their way with Telemundo eventually.)

The SEC acting on the new Azcarraga orders at the same time they were implementing the NL program and the NSC desires, this time launched an all out attack against me and JSPC. We simply did not have the money to beat NL and Azcarraga with the US Government helping both of them against me. I had to make peace on one front and engage in total war on the other. Not yet strong enough to win a two-front war we decided we had no choice but to whip NL first and then we might or might not return to the Spanish press fight depending on where it had evolved by that time. Either way I had to beat the US Government also, so it didn’t matter that much in practical terms whether we took on one or the other. But it made a big difference to me in trying to build an independent oil company in the US and oilfield service company in Mexico.

What emerged from the attempted SICC takeover was Univision. In effect the Azcarragas got some good advice and dropped the idea of direct ownership of all of the Spanish language newspapers, TV and radio stations, in favor of selling them to US buyers and supplying them with all of their content produced at the Azcarraga Televisa studios in Mexico City – as I say the result was Univision. In short, the Azcarragas sold the hardware and in the end made far more money on the software. The Gringo conspirators faded away as did we. The CIA plot foiled permanently.

George H. W. Bush, Zapata Petroleum, Jorge Diaz Serrano and Me

John D. Rockefeller had always kept a coterie of politicians at his beck and call. One of the stable had been Senator Bush from Connecticut. His son George Herbert Walker Bush (sometimes called Bush I after his presidency and that of his son Bush II) decided after World War II to give a shot at the oil business and accordingly moved to Midland Texas where he did the typical rich small oil man startup and eventually created along with a few pals Zapata Petroleum. Along the way he encountered the Mexican aristocracy.

Chief new friend amongst Mexican New Class technocrats being Jorge Diaz Serrano, who became his partner in a new offshore drilling company called Permargo. This unholy combine of Rockefeller money and Diaz Serrano political power in Mexico gave these two what all capitalists want – namely, as we have mentioned before, the best of all capitalist worlds at its disposal – guaranteed Mexican Government contracts without competition.

George H. W. Bush no longer needed to be in the oilfield. With Permargo he had the best deal any individual oilman in his position could have had. He decided to follow in his father’s footsteps. He had certainly learned as a child and as a youth from his father and from his ruling class prep school (Phillips Academy, Andover, Mass.) background (and Yale) the importance and potential great profitability of being at the seat of government in Washington when it came to making large amounts of money.

Bush started as an oil industry congressman for Houston and then went through the obligatory steps starting with Gringo Ambassador to the United Nations, then Chairman of the Republican National Committee (at the critical time of Watergate), moving on to become the Gringo ambassador to the Peoples Republic of China, and finally, boss of the Central Intelligence Agency. It was during these latter assignments his path and mine finally crossed.

After a highly successful archaeological summer (1976) in La Jolla California (a northern suburb of San Diego) Richard S. MacNeish invited me to Andover (where he was Head of the Robert S. Peabody Foundation for Archaeology on the campus of this US ruling class prep school) to become his Assistant. While there he introduced me to the staff of the Anthropology Department at Harvard.  I finally got to meet some of my hero’s in anthropology including Gordon Willey and others including Carleton Coon. Among the three bosses of the Peabody Foundation were Scotty (MacNeish), Gerald Piel (then publisher of Scientific American magazine) and George H. W. Bush.

Mr. Bush was not terribly impressed with me (perhaps because of my obvious communist leanings) and did not deign to acknowledge receipt of a copy of my textbook Foundations of Archaeology when I sent him a copy (at his CIA office) hot off the press in 1976. Do you wonder why?

Bush got back into big time oil after he became Vice President of the USA on the Republican ticket under Ronald Reagan (Reagan beat him for the Presidential nomination and he happily settled for this number two spot.) But Bush had bigger thing in his sights than a ceremonial position. He wanted Saudi money for himself and of course that meant he would get it by selling influence at the highest level to the trillionaire Saud family who certainly could afford him, and absolutely wanted to keep him close.

In later years his son George W. Bush would use Saudi money to get what he wanted too, including a rich investor in his (what turned out to be) Mickey Mouse oil drilling projects in Texas and elsewhere. Why would a trillionaire family like the House of Saud, with the greatest oil production rate in the world and the world’s greatest then known reserves want to get involved in small time Texas oil drilling? Gosh I don’t know. What do you think?

H. Ross Perot knew and it burned his ass! Perot had balls the size of church bells but he was also a little naïve all of his life. The blatant corruption of the Bush family with the Saudi’s violated his sense of fair play to the degree he could no longer stand it and jumped into the Presidential race against Bush and Carter and this gave Jimmy C. the election as it turned out. (Perot withdrew but not until he had permanently alienated twenty percent of the Republican vote from Bush.)

Back at the Ranch

Bush no longer needed Diaz Serrano and went on to prove it allowing the new Mexican President MMH to put his old friend and business partner Diaz Serrano in prison for six years beginning in 1983. I have reviewed how I arrived in Mexico for NL Industries at the end of the Lopez Portillo administration when the PRI had turned against Diaz Serrano. I have described some of the subsequent events above. In the end it would be my creation of Jason Smith Petroleum Corporation which moved me and it into the sights of the new regime in Washington and specifically into the sights of the experienced Gringo spy George H.W. Bush.

All of this is perhaps of little direct interest to you readers but you should note one important thing. Namely, the ability of the Gringo Regime to force any capitalist out of business when it no longer is convenient for the Oligarchy for said person and entity to exist. These years were the final step in converting US imperialism into a private plaything for a small group of trillionaire and centi-billionaire families.