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Oily Dealings

Murphy's sins may pale in comparison to some others

I actually feel sorry for Mayor Tom Murphy. As a Christmas gift to city residents, he announces he's not running for mayor next year, but what does he get in return? A slew of news stories reporting that he's the subject of a federal grand-jury investigation.


I'm not sure what the big deal is. Yeah, weeks before the May 2001 primary, Murphy gave city firefighters a lucrative contract. And yeah, their union endorsed Murphy immediately afterwards, which looked a lot like quid pro quo. But news of the investigation is months old, while the contract and the firefighters' endorsement were public knowledge weeks before the primary was held. Did any sane person -- or even a Pittsburgh voter -- think the two events were unconnected? Did anyone care?


Apparently, most voters didn't. They probably figured that's how politics works. After all, if the feds are targeting politicians who help their supporters, they might as well investigate their boss, President Bush.


Still, if we're prosecuting business as usual, I won't complain. I'll just suggest we also investigate local business leaders too.


How about US Steel head honcho Tom Usher?


In addition to his duties at US Steel, Usher serves as non-executive board chairman for Texas-based Marathon Oil, the nation's fourth-largest oil firm. (Marathon was, in fact, a subsidiary of US Steel until 2001.) And if Murphy's contract negotiations look a bit like bribery, so do Marathon's dealings with Equatorial Guinea, an African nation under the rule of strongman Teodoro Obiang.


Obiang's constituents suffer from much worse than a bloated fire bureau. According to a 2003 State Department report, Obiang's security forces have engaged in "torture, beating, and other physical abuse of prisoners and suspects, which at times resulted in deaths." There were "reports of trafficking in persons" -- slavery -- and gang-rapes of female prisoners. During a U.S. Senate hearing earlier this year, Sen. Carl Levin (D-Michigan) told oil-company executives, "I don't see any fundamental difference between dealing with an Obiang and dealing with a Saddam Hussein."


Actually, there's at least one difference: American oil firms have enjoyed chummier relations with Obiang.


How chummy, exactly? A Senate subcommittee has found that Marathon has paid more than $14 million to companies owned by current or former government officials, including Obiang himself. Since 2002, when it acquired another firm's oil concessions in Equatorial Guinea, Marathon has also paid hundreds of thousands of dollars to educate young Guineans in American schools. The Senate found that many of these students were relatives of Obiang's inner circle.


Many of these transactions were carried out by Washington, D.C.-based Riggs Bank. Riggs has been accused of allowing Obiang to deposit money stolen from his own country. The sums are huge: In one transaction, a Riggs employee deposited $3 million in cash that he'd carried in a suitcase from Guinea's embassy.


 Another local firm has ties to Riggs too. Just days after Riggs' involvement with Obiang came to light, PNC Bank announced plans to purchase Riggs for $779 million.


Riggs is promising to clean itself up, and PNC has sworn not to buy Riggs otherwise. During Senate testimony in July, meanwhile, a Marathon exec maintained that the firm acts "in accordance with the highest ethical standards." He noted the company trains employees in ethics and law, and operates an "Integrity Hotline" for "reporting suspected illegal or unethical activity." So if you're being tortured, be sure to pick up the phone and call.


Investigators have begun looking into Obiang's dealings with Marathon and other petroleum companies. (Marathon denies any wrongdoing and asserts it is "cooperating fully" with the inquiry.) So far, however, I've yet to see a single local news report on Usher's connection to the scandal. Coverage of Riggs has been better, thanks to PNC's acquisition plans. Still, given that Senate investigators say money deposited at Riggs may have helped fund the 9/11 attacks, local reaction to PNC's deal has been muted. I mean, we've invaded whole countries based on much flimsier connections.


Maybe it's not fair to single out Usher or PNC. In the petroleum business, dealing with dictators is business as usual. If Marathon didn't negotiate with Obiang, someone else would. If PNC doesn't purchase Riggs, someone else will.


Then again, Tom Murphy didn't do anything a lot of other politicians wouldn't do. If that's not a good enough excuse for a public servant, should it be good enough for the private sector?

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