really meant to serve us rather than to drive us. igod is the name of the book, how technology shapes our spiritual and social lives. craig detweiler is the author. >> up next, afterboards. this week, ken silverstein and his book "the secret world of oil" taking a behind the scenes look at the key figures in the corruption in the international oil industry. this program is about an hour.

>> here we are with "the secret world of oil." on the seamy injured -- underside of the oil business. and the question you're probably sick of answering, why did you write this book? >> i've written been the oil industry for a long time. i've written for over a decade. and i've written about the corruption of the international oil industry, and the way the united states maintains close relationships with various pretty unattractive regimes and the basis legalizationship is oil. when i was at the "los angeles times" in 2002, when first start writing about the topic. i wrote about the obion family of in new guinea. nobody knew about it or cared about it. a pariah state.

terrible dictatorship, and dirt poor. and then in the mid-1990s, exxon found a lot of oil off the coast of equatorial guinea and other american companies poured in, and suddenly thisship changed. it was no longer a poo rye ya and that's there was this close, still on a friendly relationship because it's embarrassing but a reapproachment and now the president comes to washington from time to time, and i -- that -- it was really a coincidence. i was looking at another story entirely, interviewing a former general whose firm got a private contract to help new guinea develop a coast guard, and he start telling me about the place, and i thought, how interesting. and i probably spent a lot of the past decade writing about

similar topics, all over the world looking at the topic. so, like a lot of journalism stories you get on to a topic, start writing, people start bringing you tips and you keep writing on it. >> host: there's there's a lot of talk about the resource curve, and we say that with the obion family and other countries that discovered oil or natural gas or some other resource. what does do it to a country? does it actually make the people in the country better off or worse off because it relieves their rulers of conditionability. >> guest: in general it has made countries worse off. the key thing is if you sudden felonies oil in a country -- find oil in a country where there is no form of democracy no history of democracy, like equatorial guinea, gains

independence from spain, colony of spain until the '60s. 1968, they gain independence, and this literally mayne type character takes power, terrorists the country, and then 11 years later his nephew overthrows him and then executes him and has held power ever since. there's no tradition of democracy so in that environment, when a government gets its hands on that oil wealth, it's almost inevitable it leads to corruption and very, very little improvement for people. so in nigeria, for example, nigeria -- oil firms have been pumping oil there for i think nearly half a century now, and the country is certainly worse off, not better off. i remember talking to former cia official who had traveled to nigeria. he wasn't stationed there but

work for the office and was called the office of transnational, and we went to nigeria and concluded on the space of conversations with people the country would have beenert off if they never discovered oil. so, if in a lot of places -- as i note in the book, former vice president cheney once noted, god didn't see fit to put oil only in democratic countries friendly to the united states. and when the oil is found in kazakhstan, or equatorial new guinea or chad or cameroon, the odds are won't do any good. norway has done will. depends on the context and the requirement. >> host: the united states? >> guest: the united states is a mixed bag in some ways.

certainly -- again, let me refer to a conversation i had as part of the book with a former chevron executive, ed chow, who is now at -- i think at the center for strategic and international studies, and he talked about the difference between development of oil resources -- he was talking specifically about central asia, kazakhstan, where chevron has enormous concessions there and hey obtains him when he was at chevron. and he said, look, the difference between kazakhstan and the united states, or central asia and the united states, is in the u.s., the oil resources are not owned by the state. the individual land owner in texas or louisiana gets royalties. the companies pulp the oil, the land owner gets some money. sometimes not a huge environmental footprint.

the companies are making money. they create jobs, and they create some wealth. now, certainly you can look at texas and louisiana, which is a state i look at very closely in the book, and you can see in louisiana there are certain elements of the traditional third-world resource curve where the country has a lot of oil wells but has not been shared very well, and in terms of social indicators, louisiana ranks pretty low on just about everything in terms of health and education and per capita income. >> this is generally been a problem with louisiana government, right? just broadly there's a lot of corruption, it's very different from the rest of -- i don't want to say there's no corruption but the political culture in louisiana seems to be very different from basically any other state in the u.s. so is it broadly when you look at texas and those places, see the same level of problems or -- >> guest: no, definitely. that's what i'm get getting at.

it's the political context. louisiana has been known for political corruption for a long time. and the united states is not a -- we have all sorts of political problems but we're not kazakhstan just yet. so, yes, the wealth generated by oil has been better for people in the united states certainly than it's been for residents of oil-rich african countries. which is not to say oil has not created problems, from environmental problems, the main one that people think about, and also other -- i guess that would be the main one in the united states, that people worry about the most. >> host: you don't talk much about fracking, which surprised health bit. why did you -- i suppose because that's the big political issue in the u.s. did you think about doing more on it or decide that really the focus was on conventional oil?

>> guest: well, the focus of the book really is looking at the middlemen -- the book is called "the secret world of oil." i'm trying to shine a light on a part of the oil industry, the natural resource industry, that doesn't receive a lot of attention, which is the role of traders and intermediaries, middlemen, fixers, whatever you want to call them, people who sort of -- the stratum between the companies and the government in some of these more corrupt countries, where you don't -- if you want oil concession in kazakhstan, it's not like you submit a bid and there's a -- the government meets and the closed door and says, let's see what going to be the best deal. you have to grease the wheels. you don't get an oil deal in kazakhstan without making government officials wealthy. the old model was, we'll just transfer some money into your

swiss bank account, enough it's a lot more complicated. the companies definitely -- i'm not saying that every oil deal is legally corrupt, but in spirit they're probably all corrupt. but you cannot do business in many places in the world and especially oil is such a sensitive commodity. you -- oil and weapons are the two most important commodities to any government. you can't run your economy without oil and you can't defend your borders without weapons. and partly because of that, there's very centralized decisionmaking. only a few people are in on that. and especially in, again, these countries i keep referring to in central asia and west africa, where you have either dictatorships or authoritarian governments. very few people making decisions. and so the key to getting a deal

in these places is often having the right fixer, having the right middlemen. you can't do business in some countries without a door-opener, and the door-opener is typically a person who has over the years built up trust and confidence and access to senior government officials or the president often and can get you in the door, and as i said, the old model was, you just -- okay, well, what's your swiss bank account. >> we'll wire the money. and now it may be, for example, in equatorial guinea, exxon and chevron and other oil companies got deals therefor, and they were investigated by the u.s. government, and never charged for reasons that i find surprising, because they enriched the government, they enriched the president.

now, they didn't, as far as i know, simply wire cash, but they, for example, bought land from the president. he -- we want to build our compound. oh, really, you own the land? is that right? we'll just buy it from you. or hired a security firm in equatorial guinea, several firms hired a security firm to guard their compounds and their installations as the security firm was owned by the brother of the president, who was identified in state department reports as a torturer. several of the companies made president obion a partner on business deals where he mysteriously didn't even have to put any money down. they said, we'll just give you cut. exxon gave him 20% cut of an oil distribution business. it wasn't the oil concession itself but it was an oil

distribution company. i think they give him 20% for nothing down. we'll just take it out of your royalty checks, and then after you pay, you get -- you pay for your share out of profit, then it all just goes to you. >> host: i want to ask you about this. these keels are -- deals are struck tiered because othe act. and some people say this is the price that we're going to pay, the kind of definitionally, oil is being discovered in more developing countries because it was exploited hundred years ago, and the u.s., and other places, although with fracking now less true. but because of that you have countries whose borders were drawn by colonial powers, no institutional history before the european powers pulled out, weak local -- often with cross-cultural borders that bisect ethnic groups, and in these states you'll have corruption, and get corruption,

and the price of getting the oil is being willing to pay. why should we hold u.s. companies accountable to a higher standard and let the french company goes in and bribe anyone they want and get all in the oil concessions? what. >> guest: i do want to -- i realize i also account -- let me quickly dish didn't answer your previous question about why i didn't write about fracking. the recovery is fracking is developing and a newer form of don't and an international business as well, but i was looking at fixers who orange deals -- the orders established pattern that have over in -- >> host: not developed its own barnacle-like encrustation. >> guest: exactly. in the fracking industry is expanding but it's -- a lot of the business is domestic, and you don't have middlemen here, at least not in the same way. in terms of the other question about why shouldn't we -- okay,

you just have to tolerate corruption because it's part of the environment, and to a certain extent that's true. there's no way -- unless you're going to say, we just won't get oil anymore, we'll survive without it -- which isn't going to happen -- we can't -- you have to be practical and realistic to a certain extent. i'm not saying -- i don't think anyone serious can argue that, let's just not do business anymore with saudi arabia, because -- >> host: even if we didn't, the french would buy the oil and then we reside buy the oil from the french. >> guest: right. wouldn't accomplish much anyway. i do think that you -- it's not just that we're getting the oil, and that is it. it's not just a passive relationship. we go in and develop the fields and take the oil. it's much, much more complicated

and entrenched than that. you have -- i do think it's wrong when american oil companies, den like he can would tollar guinea, country like this, dirt poor, and you can say you can't do business over there without somehow making the government officials happy, well, they made him very, very happy. i mean, obion is one of the richest men in the world, one of the richest rulers in the world. his son, who has had a $30 million home in malibu seized -- there's an asset forfeiture complaint by the u.s. government, and he commissioned at one point a $350 million yacht. he is a 45-year-old do-nothing kid and his father had the department of environment, which people jokingly refer to as the department of chopping down trees so making money on the timber trade and then clearly

appropriating money from the oil wells. so, you can say, well, we have to tolerate also corruption. but they're not just tolerating. they're facilitating mass corruption, and beyond that, they then, in order to secure their hold there, their interests there, they then lobby for these governments. sow you have northwestern oil companies who are actively promoting obion as a reformer, which is just preposterous. they're trying to develop an entrenched relationship with the u.s. government on the basis of a fraud. this guy has been -- held power since 1979. he has been re-elected, in quotes, three times, the last time was 99% of the vote. so you -- >> host: wonder why the 1%. why not go all the way. >> guest: it would be incredible with 100%.

so, you build a relationship, and you become a partner. it's not half the relationship -- a passive relationship. and that's part of it. you see repeatedly time and time again -- i don't reduce american foreign policy to oil. i think that too simplistic. at the same time, anyone who looks at american foreign policy and ignores oil, that's equally propostrace. and -- preposterous, and you look at u.s. history and the relationships we have developed, they haven't -- it's not like there hasn't been blowback in these cases. we have a deep and long relationship with the saudis that is pretty controversial and hasn't been -- causeds' pain. it's not just an ethical issue. it's a practical issue as well. post 9/11 in fact, one of the reasons -- there was an argument, we have move away from middle east oil. look at all the trouble it's caused us. so we'll move into west africa

and central asia. that will solve it. those are stable good, governments. so i think there's an ethical argument, but you can't say we have to have a perfectly ethical oil policy. other governments don't play that way. but there are also practical considerations, and it's definitely been costly in many ways to the united states and the public, to maintain these relationships with some of these countries. >> host: talk about the costs, about how it has cost the american public to keep in with the corrupt dictators. >> guest: well, i mean, if you look at -- look at the middle east. what is our bay -- what is the basis of our relationship with these various middle eastern countries? it's pretty much oil. i don't want to reduce it strictly to that, but there's a

former -- >> host: israel, also big. >> guest: that's true. that's true. absolutely. definitely -- but part of the relationship with israel is because it is our closest ally in a region that is oil-rich. so there's a strategic -- an energy, related issue there, too. but it's not strictly oil. definitely not. however, it's important. it's very, very significant. you have former -- i think it was a deputy assistant deputy secretary, who said if the saudis exported art choke -- artichokes we wouldn't have a close relationship with them. look at the were in iraq, once again, yes, it's not purely about oil but any way the architects of the were in iraq were signature about the room thinking about whether to invade or not, not thinking about, well, it is a major -- they have huge oil reserves. it has to be on the table.

itself it wasn't, then these people are completely -- >> host: it would have to be almost because, of course, the original invasion of kuwait was about arguments over that reserve straddling the -- who was draping too much -- draining too much from the -- the border. it comes down to oil in me much of the middle east. what should we be doing differently? >> guest: well, certainly -- my book is really -- there's not a grand theoretical argument. i have worked as an investigative reporter, and i am not -- i have no -- i don't want to promote myself as a human -- >> host: pull up the rock and see what is underneath. >> guest: yes. there's not a grand theory.

but in termed of what we should be doing differently, obviously i don't think anyone would say, even the oil companies wouldn't say -- not sure whether they truly are dedicated to the idea but to the extent that we are reducing our dependence on fossil fuels, it's better. you have all sorts of reasons, environmental, global warming, all sorts of negativity from our dependence on oil. every time there's a presidential election, both presidents -- both candidates talk about how we have to reduce our dependence on foreign oil, and even in general there's now consensus we should be using less fossil fuel. so, is that cure-al? of cures not. but i do think, as i write about in the book, oil is certainly,

by almost any measure, the most corrupt industry in the world. the energy industry. there are a view virginia rite of ropes. one -- a variety of reasons for that. one of them, as dick cheney pointed out, a lot of oil is in corrupt countries. so that's just the way things happen. or if you believe that god planned it -- i don't know. that's where a lot of the oil traditionally has been found. but also, because oil is -- when you're looking -- if you're an oil company, american, chinese, french, whatever, and you're looking at a deal in kazakhstan, trying to obtain a concession in kazakhstan, it's going to matter to your corporate bottom line for a long time, and in a significant way, whether you get that deal or not. it's not like, oh, we sell socks and lost this deal to provide ten thousand pair of socks.

an oil concession -- talking about tens -- hundreds of billions of dollars, and so the incentive to get the deal is huge, and the incentive to maybe cut corners a little bit is also huge. so you see if you look at the number of foreign corrupt practices act cases, prosecutions, by any measure this, two industries come up most often are weapons and oil, and partly because the deals are so huge, and partly it's because, as i referred to earlier, you typically have very, very few decisionmakers. you don't need to gain wide public support. you need to get the attention of the president of a country or the oil minister, and the way to do that typically -- >> host: it's so fungible and easy to steal. i was fascinated by dish did a lot of work on the economy of iraq after the invasion, and the

ways in which the pipelines were carrying -- were running and half the normal capacity because people had just drilled holes in the pipelines and were stealing it and taken somewhere else. it's theoretically possible to trace chemical signatures in oil to figure out where i indicate from but in practice, once you moved it out of the country and gotten it into the market, it's valuable commodity that is untraceable. so you're always going to have quite a lot of incentive, i think, to bribe. i'll ask one more question and then we believe good to our break. but what was the most surprising thing that you -- most outrageous thing or most interesting thing you came roos in researching the book? >> guest: i guess most surprising thing in some ways was when in talking to oil company officials or the middlemen, the focus of the

book, the -- when talking to industry insiders -- a lot of them would only talk off the record, but not all. there are a number of people in the book who did agree to talk on the record. the sort of casual acceptance of corruption was sort of surprising to me. i guess i didn't expect people to be so forthright about it. publicly, of course, nobody ever says, what they say in private. and in this case, in private, the companies would never say, of course, we can't work in equatorial guinea without paying off senior government officials. give me a break. but in private, that was the attitude. i had a swiss oil trader who said -- he did speak off the record, but said something along the lines of, you can call it corruption but it's part of the system. and so there was just an openness about it that in some

ways was surprising. and people talked -- i was interested to hear about the new forms of corruption, where people said, we can't just pass a bag of cash under the table anymore, or wire the money. so now it's got to be much more sophisticated. so you'll have the oil minister's me few open a company -- nephew open a company in the british virgin eyeland can't be traced to them, and that could i is hired to do some consulting service, which they're not doing anything. they're just a recipient of money that somehow will find its way to the minister. i was sort of -- i can't say i was shocked but surprised in some ways with the openness and intrigued and interested. >> host: there is actually a defense you hear in a lot of the developing world, of corruption, on the ground -- there was the joke that went around about hillary clinton talking to some foreign minister somewhere who said, you call it corruption, we

call it family values. but that in fact, in clan-based societies this sort of thing is actually -- you would be shirking your moral obligations and also that in some ways if you don't have the ability to raise taxesow end up with corruption do pay people off. that's how police worked in new york. is that fair, these are states that don't have taxing power, and corruption is what they have instead? >> guest: i think it's a bit self-serving and an apology for behavior that really isn't -- most people wouldn't find acceptable. i wouldn't say that it's entirely -- i certainly heard another oil trader i talked to in switzerland said, he made this argument. look, in the united states, you pay -- you make -- gold gold

gold goldman sachs makes political contributions and in the third world the same thing. i don't think one can dismiss that argument. we have a different way of doing things but it's legalized corruption a several but the argument it's clan-based and it's -- just doesn't really hold up if you travel to these countries. i've been to equatorial begin noaa and angola and a flub of countries in western africa and yes, it's true, you know, the money is distributed mid by the head of the tribe or clan, but you can see with your own eyes, angola, the president of the country is living in mansion overlooking a sprawling slum. >> host: we'll be back in a few minutes.

>> host: we have been talking about the countries and the corruption there. i want to move on to the people in the middle. you have some very theatrical characters who are facilitating these contracts. you talk about the traders and the fixers and the gatekeepers. what is is the defers twin a fixer and a gatekeeper. >> guest: there's not a huge difference actually. they do similar things. basically you have the fixers are -- it's traditionally been a relatively small group of people, maybe a dozen or a few dozen people, who have in various parts of the world, have

sufficient access to the presidents or the top government officials, but you pretty much have to do business through them. and if you want to get a deal in nigeria, for example, for a long time there were a few people you could go to. one is a long-time friend of bill clinton majors donor to the clinton foundation, and had pretty close ties to the democratic party back during the clinton years. and he was a guy who -- nobody knows exactly quite how he did it, but he had access to the senior, senior government officials in nigeria. so it wasn't just oil, because he had all sorts of relationships there and would brokery lot of deals there. but you go to him and you hire

him as a consultant, and youmak miraculously end up with big contracts. another guy, jim givein, an american who is very, very well connected in the former soviet union from the very beginning, from the very earliest post communist period. he was actually indicted by the u.s. justice department and charged with -- i don't know if the word "bribes" were used. >> host: when was this? >> guest: this was back in -- about ten years ago when giffin was charged. and he had moved money -- he had been hired by u.s. oil companies as a consultant in kazakhstan. and he was charged with funneling, i think $80 million into -- this was the old model -- into accounts told

with controlled by the prime minister and president of kazakhstan. and he was a guy who had a very close personal relationship with the president. he had a house in the fanciest neighborhood of the capital in kazakhstan. when the president came to washington, giffin would show him around, take him to meet with washington officials. you really couldn't hope to do business over there without hiring him on as a consultant. so he was indicted and charged, and the case dragged on for years and years and years, and he is -- basically used a gray meal defense. i don't want to say he acknowledged that he had made payments to the president -- although, it's clear he bought the president and his wife a matching snowmobiles, and he --

jewelry for the wife, and believe he paid the tuition of a daughter who attended college here in the washington area. but in the end he basically said, everybody knew what was doing. this was not a mystery. i was talking to state department and -- i think he said thecry, -- the cia, and everybody knew what my relationship was, and so why are you bothering me? and in the end, he basically got off, and the judge in the case said, you've been persecuted. you were really -- i think he even used the term "american hero." you were helping u.s. oil companies get concessions that were important to the united states. and so the whole -- it became known as every -- it was known here as kazakh-gate because we attach "gate" every scandal. in the end he was never charged.

so it was one of the -- he is one of the interesting characters in the book. >> host: it's interesting. it's not clear exactly how one becomes a fixer. is there an application process? swimsuit competition? how do these guys get toothier connection -- i suppose that's the shadowy process we don't understand. how they get the connections that enable them to be trust worry trust worthy. >> guest: the international oil industry is generally pretty corrupt, but one pay way people become fixers is being trustworthy, in the sense you know they have the access -- >> host: honor among thieves. >> guest: you can arrange deals and that you're good to word. so one of the -- good to your word. one of the people i write about, focus of chapter one, a guy who

legally khalil, who had a lot like sigore, a lot of contacts and influence in nigeria, and i talked to him extensively, and is a acknowledge in the book, i came to like him and become friends with him. he is a really fascinating character, very hard not to like. one of the things that there's no job application but one of the things i think is part of the -- you have to be relatively charming, and he is very, very charming. hard not to like. he. >> host: the fred astaire of the oil world. cary grant, i should say. >> guest: so, he his father was -- the family is lebanese origin but grew up in nigeria, and he told me he had -- initially how he got into the middleman business was that his

family was wealthy in nigeria. they had, i think -- it was like a peanut business or something. he said at some point someone from -- who was a friend of his -- or maybe a related to his sister -- from a middle eastern airline said, we're looking for business in nigeria and we need introductions, and he knew everybody. >> host: went to school them them. >> guest: right. he was in business there. he wasn't -- the peanut processing business or something but a significant business so he knew various government officials, and made the necessary introductions and the teal was struck, and he said, you know, screw it, why aim deal withing peanuts when i can be paid to use my contacts. so, it's really -- it is hard to know exactly -- unless people

are willing to talk about it, how -- the origins of relationships. when you do business in a country like equatorial guinea or cameroon or even nigeria, which is larger, if you are prosperous businessman you tend to know government officials and you can make use of that. >> host: i was surprised how many people are not local, that you didn't have a lot of people who are the fixers who are cambodian or -- why is that? is that because the oil companies need someone international to -- for some sort of communication or trust or -- do you have a sense why some hover these guys are american or fresh? >> guest: well, partly because you are talking about middlemen. they're not -- they play there is role to broker introductions between the companies and the

governments. and in part certainly american companies, because of foreign corrupt practices act, have wanted to have a certain distance. you want to be able to deny -- plausible deniable about your relationship with somebody. so they hire -- you hire somebody also who is not accountable to the foreign corrupt practices act, so you hire a european or middle easterner who wouldn't necessarily be -- >> host: i lad no idea why this land was so expensive but the guy told me that is the best place to set our headquarters so that's what we bought. >> guest: right. so, there's certainly locals, and especially industries have grownup nigeria, for example, there are now a lot of local middlemen who have gotten very, very wealthy, brokering deals with the government. but initially, in a lot of these

countries -- when you go into a place where you're not familiar, you're looking for some hob can give you the lay of the land and who -- i'm sure they have their local contacts, but often -- in angola, bp at one point got into a bit of trouble because they hired a -- someone to be their spokesman who was a -- either senior government official or related to a senior government official. but often you want somebody who is probably a bit of an -- you know, outsider but who knows the country and can point you to the right people. >> host: what about the traders? we haven't talked about them yet. that's a big chapter, and a big part of the oil market. and you talk about glen corp, huge commodity operation. what role do they play? well, glen corp is an emotorhome

enormous company that a lot of americans have not heard of. >> host: have heard of mark rich, the founder. >> guest: that's right. because mark rich was famously -- charged with trading with the enemy, iran, i believe, was the enemy, that he was trading with. and he fled the united states ahead of an indictment, and then on clinton's last day in office he was pardoned for ropes that have never been fully explained but that -- >> host: very cozy with the clinton snooze might have michigan to do with it. and she made -- there were extensive campaign contributions she made. and certainly, i think it would be naive to think that didn't have something to do with the pardon. i do hope to be writing another story about that, though, and i think there are other interesting reasons as well.

>> host: i can't wait to hear. are you athrough dish on c-span or holding tight? >> guest: it's a really good story but i don't want to -- hopefully be telling it in the information few months. it's an old story but i just learned a part that is very interesting and, i will only say it involves favorites mark rich did for the u.s. got overseas. >> host: you're kell -- killing me here. >> guest: it's a good story. >> host: so, talking got this big oil companies and one thing you suggest, is that they could be manipulating oil prices. you have a -- you say, but for the past seven years the price of oil has been swinging wildly are. after floating in ten to $20 a

barrel, it started to climb sharply in 2005 when its cost 70 daz. then went to 140 in 2008. bud then the price fell off the cliff, $30 in six months, win within two years its triple again. do you think -- an oil economist might say the predictable response of getting to the production front tier -- frontier, with fracking we are expending a little bit. chinese demand seems to have collided with the amount of oil the world can produce, and that -- how much role do you think that oil traders play in that? >> guest: it's hard to measure, and certainly as with oil's role in foreign policy to say it's purely a function of manipulation of the market is wrong. there are all sort0s things that impact prices of oil. a war in iraq, for example, or chaos -- there's all sorts of things that are impacting the

price of oil. but there have been periods where traders certainly have accelerated trends, either up or down. people do make money on this business, and you're making money at the margin. i talked to -- if the price per barrel changes by a small amount, if you own enough barrels, are trading enough barrels, it's very profit teen be on the right side of the curve. >> host: also potentially unprofit teen be on the wrong side of the curve. >> guest: sometimes they are. someone who told me in talking about glen corp, they said when glen corp is betting on the price of oil to go up you don't want to bet on it going down. >> host: the goldman sachs of the industry. >> guest: yes. but i think there's a contributing factor, and there have been times when traders

have certainly influenced the prices. i did talk to another swiss trader who said, look, when i started in this business, the paper trade versus the physical trade -- meaning the are a real barrel of oil versus just a -- the paper -- >> host: the right to buy it. the right to have a barrel of oil at some point in the future. >> guest: he said at his firm it was -- the ratio was one to one and that currently it's more like 40 or 50 to one. he said, come on. there's a huge, huge paper trade, and it's subject to -- i want to be clear here. you've not accusing glen corp of manipulating markets but glen corp trades three percent of -- moves three percent of the daily oil. daily oil trade. and it's not even the biggest oil traders. other firms are bigger. so, there's an ability to manipulate markets, which i think has happened at times.

>> host: and what -- how do you see that? does it show up in swift moms of prices or show up in a movement in one direction or the other? >> guest: i think it's -- as i said, i believe it's not ever going to be the one factor that -- you're not going to see that because of manipulation of the market. but if you see the market going like this naturally, you might see it a little bit sharper because of the manipulation of oil prices. >> host: so basically accelerates whichever way the market is going. >> guest: yeah, didn't accelerate all the time but there have been times clearly where traders have -- where it appears that traders have contributed to downward and upward movements. >> host: did you get to see -- go inside these operations and see how they look? talk about what happens -- what does an oil trade deer all trade

door all day. >> guest: it's like going to a wall street firm. it's not that exciting. i went through a couple of these firms. they're hyper corporate. very, very fancy, and one of the firm is went to in geneva, was a little bit moore polished than our c-span studio here. >> host: from the way you're saying -- >> guest: they had the furniture was polished to a sheen, let's say, and when we opened the conference door, it was electronic door. but you're looking at a computer screen, and you're looking at the price of oil. so that the daily -- i think it's probably lot like being a wall street trader. >> host: i actually used to work on trading floors before i became a journalist, as a tech, not trading anything. and they're now so quiet. they weren't there when the worked

there the the '90s. now i went to the worldest largest bond fund. it's like a library, totally quiet. >> guest: that is pretty much what i saw at the firms i was at. it wasn't hugely exciting. but they did -- it was interesting because i did talk to traders about what they did at night which tends to be more interesting, when they were wining and dining. i talked to one trader who said that he -- he was working on the upstream side, selling refined products to -- like to buyers in asia. who needed large quantities. >> oo a lot of care -- >> guest: he said they we take these guys out, more than karaoke, and they gain access to information, and discover

what -- that's how they got their contracts. >> host: you read the history of sales in the 1960s and sound similar. some girls and get some drinks. >> guest: right. yes. central part of the business, i think. >> host: and why has the paper trade increased so out of whack? why is everything happening on paper instead of in real barrels. >> guest: i confess i really can't give you a detailed answer to that. i wrote a little bit about speculation in the book. it wasn't a central part of the book. maybe it should have been because it is a topic that is sort of interesting, but i think it's in the same way that wall street trading -- so much of the trade now is these piely sophisticated products that nobody really understands and it's probably just followed -- it's a similar trend, but i

really -- i can't give you good answer. >> host: lobbying. brought in here, so -- how is it -- how different is this from other kinds of lobbying? is it special or is it basically the same old dance that is done in every state capitol and every country in the world? >> guest: well, i wrote in the book about -- a little bit about federal lobbying and then wrote extensively about louisiana and the situation there. and to a certain extent, yes, the same old deal. you have the oil industry is very powerful and influential shall. it is not a stand-alone industry in that regards, obviously. it's one of a number -- i would say it's one of the more powerful lobbying forces because it's a huge industry. and so they do what other industries do. they just do more offer it.

they hire more lobbyists. they pay more money. they get more meetings. and they do have an advantage in that because oil and gas are central to running the economy and to frequently plays a role in foreign policy, people in government are very open to arguments about the need to help out the industry. so over the years, the industry has done quit well in washington. louisiana, i think because louisiana -- the industry has always been so influential there at the state level, and because -- if you include the offshore, louisiana's offshore component of the federal offshore holding, it's -- i think it's still the biggest offshore per capita producer, and as we discussed earlier, louisiana really does have a

particular culture, and it's an interesting place, and a fun place, to report from. you really can't good wrong reporting from louisiana. you always meet interesting people. and -- >> host: and great food. >> guest: and eat great food as well for the most part. i could spend my time at fair amount of time in strip malls as well, meeting people there. but the situation in louisiana is -- i think it's clearly one over the states where the industry has most influence, and when they want something they tend to get it. i tell the story in the book about getting a couple of very lucky breaks in louisiana. one was that i went to interview a lobbyist, one of the most powerful lobbyistness the state, certainly -- lobbyists in the state, ginger sawyer, and we lad a lock conversation during which

she was extraordinarily forthright about the industry and how they were able to gain support of lawmakers and laid out to me the details of how they had pushed the bill through the legislature in the previous session. and i kept thinking, why are you being to forthright with me? >> host: had these movements when -- i told you i was a reporter and was going write this down, right? >> guest: exactly. i that's what i kept can thinking, and i was taking notes. but its turned out at the end of our interview -- we talked for several hours and when i got the bill and had given my credit card to pick up the tab, he said, you really don't look anything like i expected. i thought you were bald. and i immediately knew what happened. there's another ken silverstein who -- actually he is basined west virginia but writes a lot about the oil industry but writes for a trade industry publication, and he is very,

very -- i would say much more sympathetic to the industry in sir d -- i felt obliged to say i think there's been a misunderstanding, but i -- because of that misunderstanding did hear a lot after very, very interesting stories, and to her great credit, even afterwards -- she clearly was surprised when i said, i'm not that ken silverstein. but she talked -- continued to talk to me all along, although after the -- it was originally the chapter based on a piece for harpers magazine. i haven't spoken with her much since then. >> host: so, neil bush you close with him. why? >> guest: well, really, truly, because it's an interesting and funny story, i think, neil bush is the brother of george w. bush president bush and the son of

george bush, sr., and he just had a curious and really astonishing career in the oil industry, which doesn't appear to be certainly isn't based on his success because he has failed repeatedly, time and time again. he has a -- you would say a track record unblemished by success, and yet people have over the years continuously partnered with him, and it's really hard to understand why unless it's because of his family name. certainly he hasn't done as well in the obama years, but if jeb bush were to become president again i think his star would rise. so i truly -- it was because i thought it was funny story and an interesting story and a reflection in some wives the way not just the oil business works. it's the way the world works. it's the way the business world works. >> host: chelsea clinton, who had a number of astonishing career opportunities at a young age. >> guest: and getting paid an

astonishing amount of money. but i thought it was a funny story, and the truth is that my editor and i discussed it, and it didn't really fit anywhere else and we didn't want to lose it so that's the truth. that's how ended up being the last chapter. >> host: you got a lot of people to talk to you on the recordment and how do you make that approach? >> guest: i don't know. i don't know why -- i'm always surprised at why people -- in some way highs people talk to journalists. i think it's smart to do. well, i think even though i'm critical of the industry i generally was good to my word with people. i told them, if they asked, i'm pretty critical of the industry. i also think i spoke to a lot of people who are confident and

powerful and don't have in some ways a lot of doubt, but also feel like they've done a lot of interesting and important things, and they're not embarrassed by what they've done, and they feel luke they have a good story to tell. but frequently as a journalist, you're -- you may be writing a story and think, why even bother? it's obviously -- i'll never get the call returned or they'll be angry or a no-no comment so why bother. but people talk to you for a lot of different reasons. sometimes vanity, sometimes pride. sometimes it's just because they're open-minded. sometimes because they're confident and you are usually it's some combination of these things. so what you don't see in the book is the number of people who didn't talk to me. and that was -- they far outnumbered the ones who did talk to me. >> host: i've always loved the excuse that people come up with -- sometimes people are up

front. sometimes i -- i once had a company tell me that every single person at the company would be traveling for the next month and a half until my deadline. and i said i'd talk to them at 3:00 a.m. and it was, no, no he's traveling. >> host: what was the best turndown for an interview. >> guest: mostly i just -- i just never heard. glen corp never -- i requested interviews with glen corp, and they were very busy. so it wasn't quite as extreme as in your case, about it did seem like for a very, very long time no one was available. no matter where i was going to be or was willing to go. >> host: well, i think we are out of time. but thank you for spending an hour talking to me, and thanks to the viewers for spending an hourliesenning. >> guest: thank you.