Turkey Makes a Deal

September 20, 2014 § Leave a comment

The Secret Quid

As I have noted in a recent post, Turkey has been unbecomingly shy about joining the effort to curb and eventually destroy the paramilitary forces calling themselves ISIS or the Caliphate State.  When several Middle East nations issued a joint communique declaring their opposition to ISIS, Turkey refused to sign it, citing, as an excuse,  their effort to rescue 49 of their citizens held hostage by ISIS .

Today’s papers report that the hostages were returned to Turkey.  They were released from “. . .Raqqa, Syria, the de facto headquarters of the Islamic State militants . . .” according the NY Times report.

Turkish officials declared no ransom was paid.  An unnamed “senior American official” said  the U.S. had not been notified of the release of the Turkish hostages and had not been asked to assist in their rescue.

So, we know what the “quo” was.  We know nothing about the “quid”.  I may be proved wrong, but I have a guess:  It had something to do with the future degree of seriousness with which Turkey cuts off ISIS’s funding resulting from the black marketing of oil stolen from Iraq and sold at bargain prices to people in Turkey.

Part of  my suspicion is based on the near hysterical reaction of the Turkish government to last week’s NY Times story about this black market oil.  The Times has a follow up story describing that reaction.  I invite you to read the story but, to give you a taste of what I mean by “hysterical”, here is a short excerpt from the government press:

On Friday, leading pro-government newspapers controlled by allies of the president, Recep Tayyip Erdogan, published front-page photographs of Ms. Yeginsu, [the Times reporter] who is Turkish, and suggested she was a traitor and a foreign agent.”

If and when we ever learn the truth, I suspect we will discover that, not only do Turkish consumers enjoy a windfall from cheap oil, but also a few well placed people, probably related in some way to the government, are profiting handsomely from the new oil business.  I confess to having no facts on which to base this suspicion but I’m not bound by the ethics of journalism or the rules of evidence in a trial, so I can speculate.

The Oil Industry

Most of my above stated suspicion is based on my observation of the oil industry during my adult lifetime.  I regard it as a unique example of capitalism’s worst offspring.  It is an industry whose operation typically begins with deception and ends in corruption.

The deception occurs when the searchers for oil start buying access to the subsurface of land often owned by rural farmers or ranchers.   Capitalism regards deception acceptable when, instead of  outright lying, it is limited to using fully the asymmetry of information between the buyer and the seller.  The concept is enshrined in the patois of the market as caveat emptor, “let the buyer beware”.

So, when a land agent hired by the oil company visits with a landowner, the agent’s employer has done state-of-the-art analysis to determine the likelihood of oil beneath the surface of te landowner’s farm or ranch.  The company knows how important to its plans the acquisition of each specific tract is.  It knows the probable future demand for oil and the likely effect on oil prices demand will produce.

Little or none of this information is available to the landowner.  So, a bargain is struck by two parties, one of whom is blindfolded.    His or her “bewareness” is useless but the slogan nevertheless applies to strip him or her of any remedy if the deal proves to be grossly unfair.

Then the corruption kicks in.  Once the oil is discovered, it is raised to the surface, where, to be marketed, it must be transported to refineries or to distant markets through pipelines.  Paths for these pipelines must cross long lanes of privately owned land.  Here, the blindfold won’t work because even the most simple minded landowner will understand, if his land is athwart the most efficient path for a pipeline, he has some bargaining power.

This problem has been taken care of by the concept of eminent domain:  The government requires that the pipeline be permitted to proceed.  This is not an evil concept.  It prevents one or more greedy landowners from sabotaging the availability of a necessary resource in our motorized culture, and greed is not limited to people in the oil business.

The problem with eminent domain is that adjusting the relative rights of  pipeline operators and  landowners can become legal contests between financial behemoths and struggling individuals lacking the wealth to finance extended litigation.  This week’s Texas Observer describes how this process actually works.   I acknowledge the process doesn’t always involve the kind of horror reported here, but the story illustrates the danger of legal weapons  that can be used as a sword to overwhelm weak adversaries.

The real corruption occurs after the oil reaches the refinery or the market place.  Like the drug business, the awl bidnes involves billions of dollars and the managers of those billions are often newly minted millionaires and billionaires.  Noblesse oblige is not a concept with which they are familiar.  They have not been acculturated by generations of wealthy living.  They are driven by fear that unimaginable wealth rapidly acquired, can as rapidly be taken away.  That fear, like most fear, makes them ruthless.  They correctly identify democratically elected government as their most dangerous foe, because it is the only foe with enough resources to challenge them.  So, with unerring logic, they focus their capacity for corruption on elective officials.

Whether it’s satchels of cash,   jewelry and fleets of expensive automobiles for Middle Eastern sheiks or six-figure bribes disguised as “contributions” to domestic politicians, they use their wealth to twist  tax laws, block enforcement of environmental protection, weaken bargaining rights of workers,  goad foreign policy, including military policy,  toward protection of their foreign oil interests, the world’s oil companies spread ugly capitalism everywhere they operate.

I suspect Turkish awl bidnes is afflicted by all these defects and, at this moment, that is protecting the interests of ISIS.

The Remedy

I can think of no remedy short of socializing the oil and gas industry for many of these problems.  The likelihood of that approximates the chances of John McCain  announcing, following an epiphany, he has decided to join the Peace Corps.  Nevertheless I believe, because energy, especially the oil and gas industry, is vital to the viability of our nation, it should be owned and controlled by our government for the same reason our highway system is.  But, as stated, pun intended, that is a pipe dream.

There are some things, however, that could be done and, if some voting patterns change, might have a chance.  My thinking is shaped by over fifty years as a trial lawyer.  The only institution I have encountered that has remained generally true to the concepts of justice is our legal system, especially our system of trial courts where decisions are made by juries.

The problem is, access to those courtrooms has become so expensive, they are not available in many situations where they are desperately needed.  One is the system of eminent domain I wrote about earlier in this post.  Land owners can challenge the right of eminent domain asserted by a utility like a pipeline but, the challenge requires the expense of a lawyer, often beyond the reach of the landowner.

This is the kind of obvious problem recognized when the National Labor Relations Board was established to insure the collective bargaining rights of workers.  Rights under that Act are litigated by government lawyers.  If that were not true, individual workers would be helpless when faced by U.S. Steel or Shell Oil or Boeing.

That same remedy should have been included when the Civil Rights Act was adopted.  Because it wasn’t the enforcement of the Act was left to a small group of lawyers in the Department of Justice who take only what they regard as precedent-setting cases.  Individual rights were left to “private attorney generals”, private lawyers who were expected to finance very expensive litigation in order to enforce the Act.   My observation and occasional participation in this process convinced me it was not a good idea.  Lawyers were often faced with what amounted to a conflict of interest.   If they refused to settle a claim and chose to litigate it, their adversary was invariably more able than they were to finance years of hearings, trials and briefs.  Some of the results, especially the class actions, benefited the plaintiffs’ lawyers at the expense of the plaintiffs.  The statute should have established a government staff of lawyers trained and equipped at public expense to enforce that law.

I am not familiar with the new Consumer Protection Act but, if it does not make available a government lawyer to represent a consumer who is victimized by a violation of the Act, it will not be enforced as it should be.

The  principle should be recognized and adopted as part of the accepted jurisprudence of America that when legal rights are created to correct an imbalance between powerful interests and individual citizens, the law should include the right to representation by a government lawyer to enforce the rights protected by the law.

I have no fear my remedy will undermine the health of the legal profession.  We live in a litigious culture.  There will always be plenty to keep private lawyers busy.







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