“Vultures’ Picnic” by Greg Palast

Palast_Vultures_PicnicISBN 978-1-78033-651-0. “Vultures’ Picnic – A Tale of Oil, High Finance and Investigative Reporting” by Greg Palast was published (in the UK) by Constable & Robinson Ltd in 2012 (Dutton/Penguin in the US in 2011). We reviewed Palast’s “The Best Democracy Money Can Buy” back in 2007 and commended it. Palast is a cross between Chomsky and Pilger – originally an academic, now an investigative journalist. He’s an outcast from his home in the USA (corporate media there has no place for him) so has set up shop in the UK and now delivers work for the Guardian, Channel 4 Dispatches, BBC Newsnight, Rolling Stone and Harpers. However, there is more to this than Corporate sleaze. This book has raised delivery to an art-form. Welcome to Palast-noire, a new sub-genre in its own right.

For starters this is a long book. All 460 pages seem jam packed. If you want to see the citations you have to download the online version which is even longer. Palast has a lot of sleaze in his filing cabinets. A lot. There is material here enough for multiple books and enough source material to keep a dozen Noam Chomskys happy for a decade. The “Vultures” of the title refer to Vulture Funds. These corporate bad boys buy up junk third world debt from countries with a no credit rating worth calculating. They pick it up cheap because nobody else wants to dirty their hands collecting from nations torn asunder by civil war. But these guys have no such qualms. They come for the debt and they expect to be paid in full. It matters not how odious the debt or that it is stealing money desperately needed for reconstruction, hospitals, AIDS drugs, vaccinations or other essential items of human welfare. Vultures have no moral code. They launder bad money. Technically they are illegal but, since they are so profitable, they can pay for whatever justice they need to continue in business.

The vulture story is in fact only a small part of the narrative. It book-ends this work, opening and closing it, if only to supply some kind of happy ending. Palast exposes a group of vultures circling to collect odious debt from Liberia. Since Liberia’s debt relief package was being paid by, amongst others, Britain, they called it off. A triumph for Palast but he wasn’t happy. He will not be happy until he has taken down every last corporate crook and wiped the streets clean. He has issues. Daddy issues. This book is partially auto-biographical. Palast paints a picture of the world in which everybody has Daddy issues. This is not your straight-forward piece of journalism. This is Palast-noire. I kid you not, it has indeed been turned into graphic novels starring the fedora-wearing super-journalist himself. His mission: to take down the scum of the corporate world and it is a target rich environment. Yeah, you’ll learn gratuitous details of his sexual conquests along the way, but who cares?

It is personal… but the issue here is not that this book jumps continents like a James Bond movie, or that the narrative jumps backwards and forwards in time, or that it is densely packed with names, dates, places, facts, figures, anecdotes et al (such that the average reader hasn’t a prayer of keeping pace) – no, it is that this book is written in a pulp-fiction style. Call in ‘pulp-non-fiction’, one-third Same Spade, one-third Seymour Hersh, one-third Jack Kerouac. It takes some getting used to. Most of us are used to non-fiction having a certain linear narrative. Not this, it is literally all over the place. My advice: just go with the flow. You actually don’t have to follow every plot and sub-plot. Just stick to the main narrative: bad oil company, bad nuclear company, corrupt politician, evil lawyers, you get the picture. It all blurs together and kinda works if you don’t try and follow it too closely.

Which might actually be a problem. Sometimes you have to pinch yourself and remember that this is not a work of fiction. These are real people and this is real injustice. Real crime, real victims. You should be angry not entertained. In fact you should be livid, you’re the victim. Writes Palast:

“…[this is] the story of Them versus Us. THEY get homes bigger than Disneyland, WE get foreclosure notices. THEY get private jets to private islands, WE get tar balls and lost futures, and pay their gambling debts with our pensions. THEY get the third trophy wife and a tax break, WE get sub-primed. THEY get two candidates on the ballot and WE are told to choose. THEY get the gold mine, WE get the shaft.”

Welcome to Palast’s hell, everyone welcome.

If we skip past the Liberian vulture opening we find Palast in Azerbaijan getting arrested by the State Secret Police and a couple of local goons hired by British Petroleum. Yes, that’s BP. Hell hath no fury for how Palast hates BP. And we thought that nasty corporate crime was only done by loud men in Stetsons? Heck no. BP seems to be our very own British cesspit. It’s a big pit and they stand shoulder to shoulder with their other “sisters”. Oil companies (the big ones) are all pretty much interchangeable. If it isn’t BP it is Texaco, if not them then Exxon. They work as a cartel so that when one of them is caught with the panties down the rest of them can say “lesson learnt” and “we would never do that”. And the world keeps on spinning and they proceed onto the next corporate crime spree.

Why is Palast in Azerbaijan? Well he is looking for evidence that the BP Gulf oil spill was precedented by a similar event in that Islamic totalitarian Republic. Azerbaijan is dirt poor, the ultimate result of the resource curse we met when we reviewed “Crude World” by Peter Maas. In the case of Azerbaijan the oil companies bribed their way in after the fall of Communism and the oil money is siphoned off to BP with whatever is left going to the governing kleptocracy. In Palasts words, they were “economic road kill”. The Azeris were literally starving. It is not a nation where it is easy to find whistle-blowers. The few who speak up do so in fear of their life or the torture chamber. BP has made some nasty bed fellows. But, heck, it’s the oil business, blacker than black. The dark side.

What happened to BP in Azerbaijan was that one of their rigs had to be abandoned after it was engulfed by escaping gas. The problem was caused by a faulty well-head. The fault? Nitrogen cement. To plug a well they inject cement, but this takes time to dry and time is money, so they inject nitrogen to speed up the process. Unfortunately this is not such a good solution and the cement can fail. This was exactly what happened in the Gulf of Mexico yet BP claimed it had never happened before. They were lying. They were lying to protect themselves against a charge of criminal negligence. If they knew the technique didn’t work they should never have used it.

Palast moves quickly onwards to oil pipeline politics in Alaska which takes up quite a bit of the book as it includes the Exxon Valdez spill and aftermath. The story starts long, long before.. The oil-rich Alaskan North Slope was stolen from the resident Eskimos because an American found oil there. Since everything in North America was stolen from a bunch of Indians then who cares? Well this theft did happen in 1969….

The oil & gas is shipped out in a pipeline with known safety flaws. The flaws were picked up by monitoring equipment but the software engineers were told to overlook the problems. So every now and again the pipeline blows up. What the heck – just another cost of doing business – if you are an oil company. Of course this is all totally illegal but the whistle-blowers are afraid for their livelihoods. Big oil controls everything and they blacklist employees who put the public interest first and obey the law. Big oil is the law & above the law, screw the environment, screw people, screw human rights. That stuff just gets in the way of business. It is always cheaper to pay the fine if they get caught and IF they get fined. There is no moral or ethical framework, bad stuff happening is just another cost of doing business.

Back to the Gulf of Mexico for a story of mythical oil eating bugs. There they have oil cleaning theatre for the news cameras. All of it completely ineffective or a complete fiction – welcome to the dark arts of oil PR. Big Oil makes a mess and then play conjuring tricks with the spill. Pointing it out can be a painful experience. It was for one Professor who was kicked out of tenure at a University simply for pointing out that the Exxon Valdez spill was a disaster. He said it would happen in the Gulf of Mexico. He lost his job. The term was “de-funded”. His crime? Well you may have been lead to believe that Hurricane Katrina was some freak act of God sent to smite New Orleans. In fact New Orleans had been protected for many years by miles and miles of marshland. Then oil companies were let in and destroyed the protective environment. They even had a long, straight, canal built between sea and city to allow easy access for the oil super-tankers. Easy access for them and easy access for the storm surge. They were warned, they did nothing because oil money paid for an appropriate version of the ‘truth’. When the reckoning came they blamed mother nature. And plenty of good academics lost their jobs, after Katrina, for saying otherwise.

We move on from the Gulf of Mexico to Ecuador. Chevron poisoned the jungle and gave everyone cancer because they didn’t do a clean job. So the local Indians took Chevron to court and won. Of course they only “won” in the technical sense that they were right and Chevron were wrong. Chevron will never pay a penny in compensation and pride themselves on this. It is no secret. They will delay the pay out for years in long court room challenges. They have all the time in the world. [“Corporations are immortal, humans die” writes Palast.] The Ecuadorian Indian children do not have time, they will die of cancer caused by carcinogenic oil spills. If that fails Chevron will (and have) counter-sued the Indians for fraud. After all it is just the cost of doing business. It is cheaper to pay $600-an-hour lawyers to tie up legal proceedings for years than it is is to simply pay up. That is their moral code.

From Ecuador to Kazakhstan and a massive case of bribery. This time it was Mobil bribing President Nazarbayev for a 25% stake in the Tengiz oil field. The bribe? About $100million. There followed a long and awkward court case in the USA in which nobody mentioned the good name of Nazarbayev (because he was partying at the Whitehouse). No, the US justice system chose to prosecute one of the middle-men. In the end he got let off when it was revealed he worked for the US Government as a spy. A farce. No wonder Palast is depressed.

Then we are back in Prince William Sound, Alaska and the ill-fated Exxon Valdez. It’s 1989. Remember how Exxon told everyone that the ship’s Captain was drunk at the wheel? Yeah, he may have been drunk but that was normal operating practice. Not only that, he was asleep in his bunk. So why did the Valdex run aground? Well the ship was meant to have radar and Exxon had it installed. Their operating contract required it. However they didn’t have to have it switched on. It was busted and nobody onboard had been trained how to use it anyway. There should have been an emergency tug escort as well but Exxon had cut corners and not supplied one. Exxon was obliged to supply spill containment equipment but it too was missing or broken. The Marine Superintendent for the Port of Valdez tried to warn of this omission five years before but Exxon had him removed from office after a failed blackmail attempt. You get the picture. Oil companies are not nice people to do business with. The lie, they cheat, they steal.

That night in 1989 the Exxon Valdez was not fit to sail. It was illegal for her to leave port. Local Eskimos had even been trained on equipment to protect their shores from an oil spill. Shame the oil company had them all fired. Ghost employees were hauled out of their day-to-day jobs for “showtime inspections” that were meant to be “surprise inspections”. They were no surprise. The oil company told the inspectorate when to turn up. When one of the inspectorate did really turn up un-announced the oil company had the government suspend him. The Union got him his job back so the oil company tapped his phone. You get the picture. Oil companies are not nice people to do business with. The lie, they cheat, they steal. Palast wrote:

“It’s a heck of a lot cheaper to pay off the victims than to prevent oil spills.”

Ironically Exxon purchased contaminated land. It turned out it had oil underneath it. Win-win.

Fast forward now to failing nuclear reactors at Fukushmia, Japan in 2011. Palast picks up the narrative here from an investigation he had done years before. It concerned the backup diesel generators. In 2011 these were meant to keep the coolant pumps running and power the plant safety systems when the earthquake and tsunami hit. One problem: they didn’t work. In fact it was already known that they wouldn’t work. Palast had found that the building they were in was not water-proof – so the electrics would be swamped. The generators were window-dressing. They could never work. They were marine engines designed to be run up without an operating load. They were never designed for emergency use at full power. If you start them at full load, in an actual emergency, the shafts would snap. Of course this would be highly illegal but it was covered up.

“They’re decorations attached to nuclear plants so people will think these radioactive tea kettles are safe.”

The oil companies had learnt that it was simpler to pay the victims that to prevent spills, the nuclear companies had found that it was cheaper to fix the regulators than to fix a problem.

“I have investigated dozens of nuclear operators, and in every single case, no exceptions, I found this: Fraud is as much a part of the structure of a nuclear plant as the cement and the steel.”


In the final section of the book Palast scrutinises the Financial Services industry. It is worth remembering that (at least according to him) he was an Economist from the Chicago School. He was there in the early 1970s and rubbed shoulders with Milton Freidman. He could have taken a plum job at Goldman Sachs. He chose not to. Instead he used his unique abilities to help Unions and citizen groups take down corporate crime. His expertise was unravelling crime written into legal contracts. He has a good historical perspective on the origins of the recent Globalisation experiment. He knows what it wants and how it operates.

His view of the liberalisation of global Financial Services is uniquely cynical. He writes here that the Financial Services Agreement (the “FSA” – a minor trade treaty) was written by a bankers roundtable. Not just any old banks but big, American, transnational banks. The FSA protocols forced every nation to remove any restriction that might prevent a local National bank from trading in exotic financial products – no matter how toxic. In 1997 the FSA became part of the then WTO agreements and 152 nations had to sign up – or else. Banks would have to buy these “financial products”. If they did not their credit would dry up and their exports boycotted. No choice.

“The brilliance of the bankers was in using trade as a weapon. […] If a nation wanted to sell America [its] goods, they have to swallow American bads, the derivatives, swaps, and all the other exotica coming out of the mad bankers’ laboratories.”

Of course this is just Palast’s spin. It is all factually true but, of course, it was a free market. Nobody had to buy these toxic assets. There were wider market failings that contributed. However Palast is correct in pointing out that once the barriers came down the poison was free to spread through the global banking system. When the shit hit the fan it destroyed the most vulnerable. In this case, Greece:

“And these snivelling workers are always grasping for their ‘entitlements,’ as if collecting your social security is an avaricious crime, whereas selling bogus bonds to pension funds is simply smart business.”

Precisely right. We call this moral peril. Others call it simply injustice on a massive scale. It wasn’t exactly “fraud” as Palast likes to call it. I might draw the line there. These clowns genuinely believed that they had created magic. They had turn junk into riskless profit centres. Those who knew it was too good to last were trapped into the system that rewarded risk. None could risk being the first to jump out and create the calamitous market collapse. It was a bubble. Since the fire-walls between investment banking and retail banking had been removed the risk takers knew that they could not fail. The State would have to step in and rescue them when it all went pear-shaped in order to save the banking system as a whole. It was a massive blunder by a captive state in the embrace of market dogma. Letting the banks write the rules was never going to be a good start. Interestingly enough Palast talked to Joseph Stiglitz and he agreed. In talks at the Whitehouse every policy was tested by “What will Goldman Sachs think of this?”.

“Stiglitz thought it sick, bad governance, and a blatant conflict of interest.”

…but the Banks ran the show.

Of course we have been here before. There was already a long line of victims of trade liberalisation of financial services. South America was their battlefield where country after country had to endure crippling capital flight and the “IMF riot” (no, that is really what it was called). By 2002 Brazil had wised-up to the scam and was following an independent path. It refused to follow the new FSA protocol. By 2008 Brazil sailed through the financial crash that took down everyone else. It is noteworthy from our reading of the work of Ha-Joon Chang that Brazil’s model of independence is no different from that used by the major western powers in their early developmental stage.

…and so we could go on, and on, but you get the picture. No review can do proper justice to a book so densely packed with stories as this one is. We have barely scratched the surface. Palast closes-out the story of the Ecuadorian Indians seeking justice from the oil company that poisoned them, with this:

 “I know this is an incredibly simple story: Indians in white hats with their dead kids, and oil millionaires in black hats laughing at kiddy cancer and playing musical chairs with oil assets. But maybe it’s just that simple. Maybe in this world there really is Good and Evil.”

It is indeed a thought that will cross the mind of the reader. Are these people & their corporations genuinely evil? Palast ponders it too. At this point we should defer to “The Corporation” and ask – are they psychopaths? What is true is that the modern transnational Corporation is now poorly equipped for the modern world. It is a dinosaur. It was a useful vehicle designed 200 years ago to build railroads in a world where life was cheap and the world’s resources infinite. It is now hopelessly ill-equipped to handle a world where human rights actually matter, where resources are shrinking out of reach, a world with increasingly chaotic climate. Being ‘big’ used to mean ‘efficient’. Now they are bloated monopolies surviving on Government hand-outs – now too big to fail. Their power keeps them from scrutiny. Then own the Government, they are the Government. This is the challenge of our times, a challenge for our democracy. Palast has given us the ammunition. How do we respond?

Sure there are bad companies and bad people. Likewise there are good companies, small companies, local companies. There are genuinely free markets that work in the interest of all. Efficient market theory would have us believe that the sum total of all utility within the community is maximised by allowing Exxon to spill oil. The dogma must insist that the cancer in those Indian children is the price we pay for having our pension pots intact for our retirement day. But do you ever see this cost-benefit analysis worked out? Which member of the Dismal Science would stick his or her head above the parapet and willingly volunteer to work that one out? Of course it is impossible. It would require value judgments about human life. How do you offset the pain of a mother, whose child had just died of cancer, against that extra piece of toast in the morning? Sometimes when something is just wrong, it is wrong. Evil is evil. Corporations must be held to account. When their externalities are made internal maybe they will no longer drill for oil. We simply fail to internalise the true cost of big business. Until then we will need a thousand more Palasts roving the world exposing Corporate-Political crime.



About post-carbon-man

A passionate advocate of a peaceful transition to a sustainable political-economy, Mark hails from a working class farming background. Today he is a Company Director and Chairman of the Low Carbon Chilterns Co-operative. Whilst at University (Engineering Masters) he was active in Conservative Student politics but has had no affiliation since. He has travelled widely on business covering the USA, Europe, Middle East and Central Asian Republics. In 2007 Mark founded Post-Carbon-Living and a year later co-founded Transition Town High Wycombe. He lives with is wife & daughter in a home they retrofitted to be carbon-neutral. Today he blogs about surviving politics on a shrinking planet and is passionate in his rejection of Nationalism.

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