Former Chronicle reporter Robert Bryce's new book, Cronies, recounts "the long history of cronyism that has bound the Texas energy business to the Texas political system and the way that tradition has now been transferred to Washington, D.C." In this week's issue, we publish a chapter from the new book under the title, "The Military-Petroleum Complex." News editor Michael King spoke to Bryce about his new book, about Pipe Dreams, his earlier book on the fall of Enron, and his argument that Texas money and Texas politics now dominate the national agenda and drive much of U.S. foreign policy. "Like it or not," Bryce writes, "Texas rules." The following is a full transcription of our conversation, excerpted in the print edition. Michael King
Austin Chronicle: Can you sketch out what you were trying to do in Cronies?
Robert Bryce: In short, it is to explain why Texas has come to dominate American politics and American business. After finishing Pipe Dreams, I kept asking myself what was it that made Enron such a powerhouse, in terms of politics and so on. It became clear that Enron would never have risen to the prominence that it had, had it been making shoes or selling candy bars. Enron was a powerful company because they were in the energy business, and that power was amplified because they were in Houston; and because they were in Houston they were able to meet and have influence over the most important politicians in America.
AC: The book works as a history, as an analysis of an historical phenomenon, and also as a polemic about Texas business and politics. Its roots are really in Lyndon Johnson and the Democratic Party, and it ends obviously with the Bushes and the Republicans. What's happened in American business and politics over that period to make Texas so powerful?
RB: A lot of it just comes down to money. Johnson and the two George Bushes would never have risen to power but for the backing of key players in the Texas energy business. The Texas energy business provided them with the ideological base, but more importantly with the political funding base that they needed to become viable political candidates on the national stage. In terms of the rise of Texas, and why Texas became the powerhouse to me, and as I hope I prove in Cronies, it all leads back to Texas' dominance of the energy business. And that dominance really begins with [Gov.] Ross Sterling's decision in 1931 to send the National Guard into the East Texas oil fields.
AC: Why do you think no other geographic region could have challenged the Texans in that time the far West, or the Northeast is it just that oil became so central to the international economy that that made the difference?
RB: Clearly, oil is a key part of it. Oil and energy are the most important commodities in the world markets today. As far as California and New York go, because they're the only other two states that really figure as prominently in national politics as Texas neither of those states have the cohesive power on Capitol Hill that Texas does. That's where this Texas myth, and the Texas creation story, really become the key part. I'm from Tulsa; being from Oklahoma I'm not part of this idea but Texans see themselves as Texans first and Americans second. You ask any member of the Texas delegation, retired or current, they will almost to a person they say that when a vote comes up, they consider whether it's good for Texas first, and then the partisan things later. And that has been true really going back to John Nance Garner in the 1930s. The Texas delegation has consistently voted as a block, and that has meant tremendous power and tremendous amounts of federal money for the state.
AC: Of course, when you say "Texans first," you're talking about a particular strata of Texans? That is, the state's superrich and superpowerful get much more benefit from the Texas political influence than do ordinary Texans.
RB: Well, that's clear, and the crony network in Texas has always served the crony network's ends. That was true when Lyndon Johnson busted Leland Olds in his effort to extend his stay at the Federal Power Commission, through George Bush the First's efforts to provide deregulation to the natural gas industry, to George W. Bush providing tax breaks to independent oilmen in Texas while he was governor. That is the recurring theme.
AC: When the story starts rolling, it's Lyndon and Brown & Root, and by the end it's Halliburton and James Baker and Bush. Why do you think it was so easy and natural, almost effortless, for that huge Democratic Texas machine to transfer its loyalties to the Republican Party with barely a hiccup? What happened in Texas or American politics to make that possible?
RB: Well, one of the most interesting things that I found was [Dallas Republican] Peter O'Donnell's comment, when he said that the Republican Party in Texas really has its roots in the 1948 Senate race, when Johnson beat Coke Stevenson. A lot of conservative Texans were supportive of Stevenson and if you followed that group of the "Texas Regulars," who were supporting Strom Thurmond and the Dixiecrat Party, the leadership of those Texas Regulars was dominated by the Texas oil interests.
You fast forward then, from then into the late Fifties and into the Sixties, and those same Texas Regulars and energy interests are already supporting the Republicans. A lot of oil money backed Richard Nixon both in '68 and '72. Then you get into the Carter administration and the windfall profits tax and I quote one oilman from the Washington Post in the mid-Seventies the repeal of the oil depletion allowance, an enormous tax break that the oil industry enjoyed for decades thanks to strong support from Sam Rayburn, Lyndon Johnson, and George Bush the First.
Those things, once the Democrats and the national Democratic Party began opposing some of the things that the Texas oil industry held dear, combine it with the civil rights issues the Voting Rights Act, and the Civil Rights Acts of '64 and '65 that really plants the seeds for the Republicanization of Texas.
The seismic event happens with Bill Clements' election in 1978. And he's an energy guy.
AC: Historians generally look at civil rights as the cultural issue that turned the South Republican. Your book focuses more on the economic issues and how those two coincide. It's almost as if, if the Republicans didn't have civil rights, they would have had to invent it.
RB: In '75, the Democratically controlled Congress repealed the bulk of the depletion allowance, and then in '79, there was the imposition of the windfall profits tax. Chet Upham was an independent oilman and chairman of the Texas Republican Party, and he told the Washington Post in 1983, "Carter pushed all the people into the Republican Party. There's no question about it. The principles of the Republican Party are more akin to the things that oil and gas people are seeking." The oil depletion allowance was almost repealed during the Nixon administration, but the key player who prevented that from happening was George Bush the First.
There are a lot of reasons why Texas is powerful. But even today, if you look back at the 2000 Florida recount, you look at the resources that George Bush called on in the month after the polls closed. Where did he get the money, where did he get the airplanes, and where did he get the lawyers? The lawyers, the airplanes, and the money, by and large, came from Texas. His lawyer was James A. Baker III from Baker Botts, which represents ExxonMobil, Conoco, Phillips, and Occidental, among other oil industry players. The airplanes came from Occidental, Halliburton, Enron. And the money, particularly the big money, came from major players in the Texas energy business: Ken Lay and his wife and other members of the energy establishment.
AC: In his book about Texas, Made in Texas, Michael Lind argues that Texas capitalism is different that it's a throwback to feudalism, or an antebellum notion of what capitalism should be. Do you think that's true, or do you think that Texas is just like all American business, only more so?
RB: I think Lind's mistake is that his whole book argues that geography is destiny. Apparently, he never went to Houston. This idea that it's some kind of colonial attitude I think it's simply just more of a no-holds-barred kind of capitalism. That has always been what the oil industry's wanted: less regulation, leave us alone unless you're going to provide us with some tax breaks, and then we're all for it.
AC: You do suggest that there's a difference in politics as approached by Lyndon Johnson as that classic New Deal Democrat in his alliance with Texas business, and the politics being practiced by the Bush generation. Can you talk about that distinction a little bit?
RB: I think that the attitude of Sam Rayburn and Johnson was much more about, "How can we help the common man and the powerless?" The politics of George W. Bush and Tom DeLay, to me, seem very much about, "How can we help our friends who got us here?" That attitude, I think, has really manifested itself over the last four years in a way that we've just never seen the level of cronyism that exists in this administration before.
AC: You think it's not just a difference in degree; it's become a difference in kind, between that generation and this one?
RB: I do. I think it is a fundamentally different approach to what they see as the public good. Johnson and Rayburn, I think, saw it as "trickle up." These guys are all about "trickle down."
AC: One major thread that runs through the whole book is the Middle East and the wars in the Middle East how U.S. foreign policy has essentially become an extension of energy policy. Do you think these policies are rationally intertwined, or have these guys finally overreached?
RB: The simple fact is we did not invade Iraq because they export broccoli. We invaded Iraq because they have the second largest known deposits of oil in the world. Now that's not the only reason that we invaded, but only a fool believes that it wasn't a key part of the equation. If you look back both before the war and the early days of the war, when Paul Wolfowitz went before Congress and said that the oil revenues of Iraq could bring "between 50 and 100 billion dollars over the course of the next two or three years, we're dealing with a country that can finance its own reconstruction, and relatively soon." So the neocons saw Iraq's oil as this kind of pay-for-itself, car-wash kind of war.
The fact is, today, unless America can get a better handle on, and can secure, Iraq's oil production, America's future in Iraq is over. We cannot stay indefinitely unless that oil can be used to help defray some of the costs, because it's simply going to be too expensive. And Al Qaeda knows it just a new story today [June 8, 2004] on Reuters the Kirkuk-to-Ceyhan pipeline has been bombed again.
If you look at the statements that Al Qaeda leaders have made in recent weeks, after the Saudi attack: "We are attacking you because you're exporting all this oil to America." After the attack on Mina al-Bakr on April 24, Abu Musab al-Zarqawi said essentially the same thing. "We are striking vital economic links of the infidel and atheist states." Al Qaeda knows where the vital economic links are, and that's oil.
AC: The ideological justification for the war has largely been provided by the neoconservatives, many of whom are New York intellectuals. Do you think there's a natural alliance between them and Texas crony capitalism?
RB: I don't know. I think maybe it's just a shotgun marriage. They saw in Bush a way to get their tentacles into the Middle East and attempt this reverse-domino bullshit. Whether it was Bush or somebody else they were just looking for somebody who could carry out their goals. And further, it was clear, too, that the neocons saw the possibility early on, if they could get rid of Saddam, then there was the possibility of getting oil from Kirkuk and re-opening the Kirkuk-to-Haifa pipeline, which clearly was part of their strategy.
To me that is one of the most amazing bits of underreported news about the war, looking at the whole issue of America, Israel, and oil. If you look at the resentment of the Arab states against Israel and the United States, oil is a central part of all of that. That Kirkuk-to-Haifa line, for the neocons to think that it could even happen, is so incredible. They would have to run it either through Jordan or Syria. You're telling me the president of Syria is going to allow Arab oil to flow into the heart of the Zionist nation, so that the Israelis can make money off transit fees? Are they out of their minds?
AC: Well, I suppose they think they can install a new government there as well. You're going to need a whole lot more soldiers if that's going to happen. Their timetable's a bit off, if nothing else.
RB: If you believe, as I do, that worldwide oil production has reached its peak, then they've set up a global showdown, and it's going to require the Pentagon which is already the world's biggest energy consumer to consume even more oil in order to protect the flow of oil that exists now. We've reached the point where the Pentagon becomes this sort of self-defeating beast, and it's going to have to control all of these key choke points, like the Strait of Hormuz and the Molucca Strait and the Bosporus and the Suez ... you name it.
Ultimately, they've overextended themselves and all of their supply lines and their fuel depots, until, I think, it's the beginning of the end of the American Empire. They're just overreaching.
AC: Any other elements of the book you want to call attention to?
RB: There are two characters in the book who have not been looked at sufficiently in terms of historical analysis. One is [former Governor] Bill Clements, and the fact that nearly throughout his tenure as deputy secretary of defense, he was in essence business partners with the Shah of Iran. And then the other is James A. Baker III now with Reagan's death, he's being lionized as such a great member of the Reagan administration with Bush appointing him as his personal envoy, on the issue of Iraqi debt, Baker gets to go to Saudi Arabia and everywhere else and talk about these issues, as an official representative of the U.S. government, while he has business interests with the Carlyle Group, while his law firm is representing some of the biggest oil companies in the world. And yet we cannot know any of his personal financial holdings because the White House has carefully made sure that those are exempted from disclosure. I just find this stunning, in terms of, to whom did this man answer?