and Dan Morgan
Washington Post Staff Writers
Tuesday, September 9, 1997;
When two top Democratic fund-raisers met oil financier Roger Tamraz for dinner at the Four Seasons Hotel in Georgetown on Oct. 6, 1995, they faced a dilemma.
As a major donor who had already given $95,000 to the Democratic Party, the dapper Tamraz wanted access to Vice President Gore and other senior administration officials to promote his vision of a $2.5 billion pipeline carrying oil from the Caspian Sea region of Central Asia to Western markets. But Tamraz had just been pointedly excluded from a political breakfast with Gore after the Democratic National Committee received a scathing memo from Gore's office urging that the financier be shunned as "an American citizen with a shady and untrustworthy reputation."
The conversation at the Four Seasons between Tamraz and his dinner companions DNC finance director Richard Sullivan and finance chairman Marvin Rosen rambled on about politics and pipelines before the two fund-raisers asked for a little more time to "clear things up" and overcome "some resistance" to getting him into the White House, according to Tamraz's recollection.
Today the subsequent success of DNC officials in overcoming that "resistance" could become a central focus of the Senate investigation into campaign finance abuses before the 1996 election. The public hearings will move into a new phase examining Tamraz's additional $75,000 contribution, sent to the Virginia Democratic Party less than two weeks after the Four Seasons dinner at the request, according to two sources, of DNC chairman Donald Fowler.
Far from being ostracized, Tamraz was then admitted to four White House functions, including a dinner with President Clinton at which Tamraz touted his pipeline dream and the jobs it would bring to U.S. pipe manufacturers.
While providing graphic evidence of the connection between money and access in the Clinton administration, the Tamraz saga also represents the intersection of campaign finance with the exotic, high-stakes race to exploit the Caspian's enormously lucrative oil reserves, estimated at 200 billion barrels. Tamraz himself holds two Caspian oil concessions believed to contain 1 billion barrels; his proposed pipeline route, angling west from Central Asia through Armenia and Turkey, would have been in direct competition with other routes now favored by a consortium of oil companies.
The effort to keep Tamraz out of the White House signaled the beginning of an intense struggle involving the U.S. government and American oil companies eager to ensure that Caspian oil is exported to the West, according to oil company executives and U.S. officials. Tamraz's contacts with White House and other government officials about his pipeline proposal are under investigation by a federal grand jury, which is seeking to determine whether anyone tried to bribe or pressure Clinton administration officials into supporting Tamraz's pipeline idea. The financier is also a fugitive from Lebanon, where he is wanted on 1989 charges of embezzling $200 million allegations he denies as deriving from Lebanese political rivalries.
Tamraz said his efforts in Washington were aimed at obtaining a "non-objection" from the administration for his project that would have put him on an equal footing with competitors and lent his project greater credibility with governments in the Caspian region. "To promote your name or to promote your project wasn't all that harmful. It was very positive," he said in one of several telephone interviews from Paris.
On Oct. 3, 1995, the administration announced that it favored "multiple pipelines" for transporting Caspian oil, but carefully avoided endorsing any specific route. There is no evidence that the decision was linked in any way to Tamraz's lobbying here.
Almost from the moment he arrived in Washington to promote his plan in the spring of 1995, Tamraz confronted opposition from major oil company competitors and many administration officials, who made clear that they viewed him as an unwelcome interloper in attempts to become a central player in one of the biggest commercial bonanzas of the decade.
For example, Pennzoil, a Houston-based energy company and a leader in the Caspian oil rush, sent a letter in June 1995 to Tamraz and U.S. officials castigating his efforts as "detrimental" to the building of a Caspian pipeline and demanding that he "cease any further efforts" to promote it.
"I walked over somebody's toes or somebody's strategy," Tamraz said.
To combat his opponents, Tamraz, 57, turned to methods that had served him well in the past. Born in Egypt to Lebanese Christian parents, he grew up in a world of constantly shifting Middle East politics and intrigue in which personal connections to the rich and powerful are paramount.
In addition to contributing at least $170,000 to Democratic Party organizations in the 1996 campaign, Tamraz rallied support from influential leaders in the Armenian American community such as Haroun Sassounian, a wealthy Californian, who presented the Tamraz pipeline project to Gore in an August 1995 meeting.
Tamraz also held discussions with Howard H. Baker Jr., the former Senate majority leader, now a Washington lawyer and Pennzoil director, about representing him in Washington. But the relationship soured when Pennzoil objected. Tamraz hired the Miami law firm of Rosen, the DNC finance chairman with whom he had dined at the Four Seasons although he insists the legal issue had nothing to do with the pipeline.
Such maneuvers reflect the style of a lone operator who has repeatedly used the levers of money and high-level political connections over the past three decades to put together big projects, mainly in the Middle East and Western Europe.
Tamraz was barely out of Harvard Business School when, as a representative of the New York investment firm Kidder, Peabody, he put together a consortium in the 1970s to build a $345 million pipeline linking the Gulf of Suez to the Mediterranean, overcoming Egyptian President Anwar Sadat's initial opposition.
For his efforts, Tamraz received a 5 percent share worth $15 million at the time enough to launch his career as an independent operator. His first big success on his own involved brokering a deal in the late 1970s between Japanese companies and the Saudi government to build a $300 million methanol plant in Jubail in which he held a 10 percent interest.
In the early 1980s, Tamraz bought the Italian operations of Amoco and Texaco 2,000 gas stations, a refinery and 600 miles of pipelines. From those holdings he created Tamoil, a company he sold to the Libyan government in 1985 for $375 million.
From the start, Tamraz cultivated contacts with influential officials, particularly top leaders and those working for intelligence agencies, according to U.S. and Lebanese sources. During the 1973 oil crisis, the CIA turned to Tamraz for counsel because of his close contacts with Kamal Adham, chief of Saudi intelligence, according to Tamraz and Lebanese sources.
Thereafter, according to one former U.S. intelligence official, Tamraz became a regular unofficial contact "the kind of guy who knew everybody and you had lunch with him every couple of months." For his part, Tamraz has often hired retired CIA agents as consultants and employees.
After the Israeli invasion of Lebanon in 1982, CIA Director William J. Casey, exasperated by the slow pace of U.S.-led negotiations, called on Tamraz to intercede with Israeli Prime Minister Menachem Begin to help accelerate an Israeli withdrawal, Tamraz said. Tamraz was not only one of Lebanon's leading bankers but also was a close friend of the Lebanese president, Amin Gemayel, whose family had also lived in Egypt for a time. And Tamraz had ties to the right-wing Lebanese Christian militias allied with Israel. U.S. and Lebanese sources confirm Tamraz's active role in trying to broker a peace deal.
The effort failed, and after Gemayel's term ended in 1988, pro-Syrian forces, hostile to Israel and Tamraz, came to dominate the Lebanese political scene. A rush on Tamraz's Al-Mashrek Bank in late 1988 forced its collapse; Tamraz fled the country after being kidnapped by a pro-Syrian faction and released for a $7 million ransom paid into a secret bank account in Switzerland.
As for the subsequent embezzlement charges leveled by Lebanese bank officials, Tamraz concedes he owes $22 million in Lebanon but also asserts that $163 million is owed him. Lebanese authorities have sought his extradition through Interpol but "no civilized nation" has taken the banking charges seriously, asserts Tamraz, who appears to move with impunity between his homes in France and New York. U.S. officials say the administration has taken no action against Tamraz because Washington has no extradition treaty with Lebanon.
Last June, a Lebanese military court also condemned Tamraz in absentia to 15 years at hard labor for "contacts with the Israeli enemy" as a result of his dealing with David Kimche, a former Israeli official. Kimche allegedly was involved in an effort to salvage the publishing empire of the late newspaper magnate Robert Maxwell.
Tamraz's interests turned to Caspian oil in the early 1990s, when he successfully bid for two concessions in Turkmenistan, on the eastern side of the Caspian Sea. Without a pipeline, the holdings were worthless.
Drawing on extensive contacts in Armenia and Turkey, he devised what he calls his "vision": a "peace pipeline" capable of carrying oil to a Mediterranean port in southeastern Turkey. The line he initially envisioned would cross Nagorno-Karabakh, the disputed enclave in Azerbaijan seized by Armenian forces in a bloody war that ended with an uneasy cease-fire in 1994.
In 1995, Tamraz launched his personal "shuttle diplomacy" between Armenia, Nagorno-Karabakh, Azerbaijan and Turkey, pressing for both a firmer peace and support for his pipeline route.
But he ran into solid opposition from Azeri President Heydar Aliyev, according to Tamraz. "Nobody needed him," Hafiz Pashayev, Azerbaijan's ambassador to the United States, said of Tamraz, characterizing him as an "adventurer."
Nevertheless, Harry Gilmore, the U.S. ambassador to Armenia, thought enough of Tamraz's efforts to suggest that he contact the State and Energy departments. In early June 1995, Tamraz was granted a 20-minute meeting in Washington with the National Security Council's Caspian expert, Sheila Heslin.
Tamraz's proposal met a key objective of American policy, which favored construction of a main export pipeline from the Caspian Sea to the eastern Mediterranean port of Ceyhan, Turkey, via a route that avoided Russia and Iran.
It was also the most direct and least expensive of any route under consideration, according to many oil analysts, and Tamraz had lined up financing for the scheme in China and Europe. In August 1995, Bethlehem Steel also signed a "preliminary agreement" with his firm, Oil Capital Ltd., for 300,000 tons of pipe, the largest such order in the history of the company.
But six days after the meeting with Heslin, a Pennzoil executive wrote an angry letter to Tamraz, with copies to Heslin and other senior officials, complaining that Tamraz had circulated materials inaccurately implying that the company supported the project.
Tamraz, however, was also proceeding on other fronts. On Aug. 8, at a DNC breakfast, his Armenian American supporter, Haroun Sassounian, outlined Tamraz's pipeline project to Gore. On Sept. 11 and Sept. 15, Tamraz attended political functions with Clinton, and on Sept. 18, the DNC recorded a $50,000 contribution, bringing his total to at least $95,000 to the party.
But on Sept. 13, Gore adviser Leon Fuerth, following up on Gore's conversations with Sassounian, wrote a memo urging the vice president and other officials to avoid meeting Tamraz because "American oil companies do not consider him a reliable partner." Fuerth described the project as "commercially questionable at best," adding that Tamraz was "not likely to get any oil company to agree to work with him."
"Tamraz's past business practices have alienated most of the companies working in the Caspian region, and they want nothing to do with him," the memo continued.
On Oct. 3, Gore aide David Strauss sent a copy of the memo to Sullivan, the DNC finance director. Two days later, Tamraz's name was dropped from the list of guests invited to a political breakfast with Gore.
Senate investigators have evidence that Tamraz met DNC chairman Fowler on Oct. 6, the same day as the Four Seasons dinner. Tamraz said yesterday that he recalled no such meeting. Fowler has denied published reports that he contacted the CIA to urge the agency to make the NSC which had blocked Tamraz's further admission to the White House aware of his past services to the U.S. government.
Despite such qualms, Tamraz was subsequently admitted to four more White House events, including the March 27 dinner where he described his pipeline scheme to Clinton.
Although Tamraz abandoned the idea of a pipeline across Armenia to Turkey at the end of last year, he is continuing to pursue the idea of an independently owned line that would go from Baku to the Black Sea.
"Let each one build his own pipeline," he said.
© Copyright 1997 The Washington Post Company