Invisible hands: The secret world of the oil fixer (Ken Silverstein)

From Harper's Magazine, March 2009
Invisible hands:
The secret world of the oil fixer
By Ken Silverstein

On a cold, damp night last November, a Mercedes sedan looped through the semicircular drive of the St. James Paris, a century-old chateau-style hotel across the Seine from the Eiffel Tower. As the car rolled to a halt at the hotel’s main entrance, a well- tailored trim man named Ely Calil walked unhurriedly out the lobby door and down wide stone steps, talking into an earpiece that was connected, through a thin black wire, to a tiny cell phone tucked in the closed palm of one hand. The driver stepped from the car and opened the door for Calil, who interrupted his conversation to give the driver instructions. He spoke in a voice a little above a whisper, perhaps just a touch softer than his normal cool, flat tone. The driver returned to his seat and steered the car out through the granite-pillared entryway and onto Avenue Bugeaud.

Calil had flown to Paris earlier that day from London, where he resides. Born in Nigeria in 1945 to a prominent family of Lebanese origin, Calil belongs to a small group of middlemen, a few dozen at most, who quietly grease the wheels of the global energy business, brokering transactions between oil companies and governments. The oil business operates on the basis of discreet payments, transfers, and backroom deals—not necessarily illegal— arranged by fixers like Calil. He has funneled money to African dictators to obtain concessions for oil companies, traded oil from Russia following the collapse of the Soviet Union, and advised presidents and exiled political leaders. Along the way, he has not only amassed an immense personal fortune but has established a web of political ties stretching from Africa to the Middle East to the United States. “He’s built a very effective network of contacts and allegiances and loyalties through money and allowances,” a former senior CIA official who has worked with Calil told me, not without admiration. “It’s sort of like The Godfather. One day he’ll come to ask for a favor, and you’ll have to comply.”

That night in Paris, Calil’s destination was Spring, a popular restaurant in the ninth arrondissement that offers a set four-course menu to sixteen diners nightly. Awaiting us at a corner table was Friedhelm Eronat, a close friend and sometime business partner of Calil’s who is equally reclusive and press-averse. Like Calil, he is one of the world’s leading oil fixers, having grown rich brokering deals for Mobil (before it merged with Exxon) in Russia, Kazakhstan, and Nigeria; more recently he has done business in Argentina, Brazil, and China. Until last year, Eronat lived just down the road from Calil in a Victorian mansion in London’s Chelsea neighborhood. But after an acrimonious separation, and pending divorce, he now spends most of his time in Geneva and Paris, where he lives in an apartment near the St. James.

Eronat was waiting at Spring with two Russian models, one tall and blonde in a dark dress and knee-length black boots, and the other with dark hair and porcelain skin and wearing jeans. Eronat was born in Germany but moved with his mother to Louisiana when he was a young boy. Tall and hefty, he looks quite a bit younger than his fifty-five years, and was dressed casually in light-brown corduroys and a tan pullover. Eronat studied petroleum engineering at Louisiana State University in the 1970s and got a job as an engineer after graduating, then went to work for an oil-trading firm before branching out on his own.

Eronat met Calil in the early 1980s, in Nigeria. “Ely was the man to see,” Eronat recalled, after sampling a red wine and then ordering several bottles for the table. “Back then,” he added, “it was a very small club, and we all knew one another. You did business by gentleman’s agreement. When you called and said you had a cargo of crude, you confirmed the price and details over the phone. If your word wasn’t honored, you were finished.” For years, Calil and Eronat attended the twice-a-year meetings of OPEC oil ministers, and the two men have partnered together numerous times, though “we never had anything in writing, Friedhelm and I, not once,” Calil said of their dealings. One particularly profitable stretch involved exporting oil from Russia in the early post-Soviet days. Calil recounted that they had met many of the country’s future oligarchs “when they were wearing funny suits and selling shoes and cigarette lighters.”

With the global financial markets now in crisis, the two men spoke of some old comrades who had fallen on hard times. “They’re all selling their yachts,” Eronat said with a grim look. One friend, an Uzbek named Sascha, “had $44 billion, and now he’s down to a billion.”

“It happens,” Calil deadpanned. The waiter brought a bouillabaisse, small plates of scallops in a truffle sauce, and veal loin with poached pear. Everyone agreed the food was delicious, but there were complaints about the “presentation.” Calil and Eronat, serious gourmets, seemed particularly dismayed. The two men decided to head to the famous brasserie L’Ami Louis for a proper meal. (This would include more wine, a plate of potatoes baked with dollops of goose fat and topped with shaved garlic, foie gras and toast and cornichons, scallops, and snails in butter and garlic.) For years, L’Ami Louis was a sort of headquarters for their mutual operations, and they reminisced about a dinner there in the mid-1990s when they hosted fourteen well-connected Russians. “It was just them and the two of us,” Eronat recalled while we were still at Spring. “We ordered a bottle of wine and then another and another”—he mimed guzzling directly from the bottle—“until the waiter just brought a case of wine and put it on the ground next to our table.” It was an extraordinarily expensive meal, the two men recalled, but well worth it, in that it played an important role in advancing their Russia business.

Before dessert was served, Calil asked for the check and called L’Ami Louis from his cell phone. “You don’t ask for a table, you just say you’re coming,” he said as he hung up.

The next morning, when I sat down for coffee with Calil and Eronat at the St. James, Eronat was reading the International Herald Tribune. He folded the paper, pushed it my way, and pointed to a story: Spain’s government was hesitating to allow the Russian company Lukoil to buy a controlling stake in Repsol YPF, Spain’s largest oil firm. “Oil is not a commodity,” Eronat said. “It’s a political weapon.”

Oil, first and foremost, is a $2 trillion international industry, and most of this annual haul is extracted from under undeveloped nations. As Dick Cheney put it when he was CEO of Halliburton, “The good Lord didn’t see fit to put oil and gas only where there are democratically elected regimes friendly to the United States.” Sometimes, a company will reach out to rulers of oil-rich states on its own, negotiating and striking deals with them through official emissaries. More often, though, a company will instead work through men like Calil and Eronat: independent fixers, whose job it is to know the leaders and other government officials for whom oil serves as both piggybank and “political weapon.” A fixer can open doors for his corporate clients, arranging introductions to the various potentates he knows. He can help companies navigate the local bureaucracy, or provide the lay of the land with political and economic intelligence, or point to important people or companies that should be courted or hired in order to curry favor. And, in some cases, the fixer can feed money to those in power, in payoffs that often would be illegal under the stringent American and European anti-bribery laws. Edward Chow, a former Chevron executive who spent more than three decades in the oil business, described to me the logic by which fixers thrive. With the U.S. anti-corruption laws, he explained, “There is no gray zone. The lines are drawn very strictly. On the other hand, executives of oil companies are sent overseas to make deals, and they are measured by performance: you either make the deal or you don’t. So you’re supposed to be clean but you’re also supposed to create business. That leads to a tension, and a temptation to use middlemen. Let him do whatever he needs to do; I’m not part of it and don’t want to know.”

Although bribery and other payoffs have undeniably been part of the fixers’ trade, the best are far more than bagmen to dictators. “There’s a real art to acting as an agent, and the role differs from country to country,” Robin Bhatty, an energy- industry analyst, told me. “In most of the world, business is done on a personal basis. The best way of getting something done is finding someone who knows someone who you want to know, and you use them to make introductions.” (“Just the same way you’re calling me now,” he added, after I asked him to put me in touch with some energy-industry officials I was hoping to interview.)

Because oil fixers play such an important and sensitive role, they can accumulate extraordinary power with heads of state, who often bestow on them the title of presidential adviser and grant them use of a diplomatic passport. “Trading in weapons is trading in sovereignty,” says Philippe Vasset, editor of the Paris-based newsletter Africa Energy Intelligence. “If you don’t have them, you can’t defend your borders. It’s the same with oil, which gives you the liberty to run your ships and planes and tanks, and your economy. If you don’t have it, you can’t run your country.”

Besides Calil and Eronat, key brokers of recent decades have included Marc Rich, the controversial Clinton pardon recipient who founded what is now the oil-trading firm Glencore and, in the 1970s, pioneered the practice of oil-for-commodities trades; John Deuss, who once owned his own tanker fleet and who during the 1980s smuggled vast quantities of oil to South Africa’s apartheid regime, then under an international trade embargo; Hany Salaam, a Lebanese middleman who made numerous deals for Occidental Petroleum Corporation during the days of Armand Hammer, its former chairman; and Oscar Wyatt, a Houston oilman and corporate raider who was jailed in 2007 in connection with the U.N. oil-for-food scandal. In the African oil market, two major players have been Samuel Dossou-Aworet, a longtime oil and financial adviser to Gabon’s president, Omar Bongo; and Gilbert Chagoury, another Lebanese who was especially close to Nigerian ruler Sani Abacha. “There used to be about forty people who ran the oil-trading business,” Eronat told me. “The world got bigger, especially when the oil market boomed and the hedge funds came in, but it’s still a pretty small group of people.”

At breakfast, Calil and Eronat spoke about another fixer, a mutual friend of theirs named James Giffen. A New York business consultant, Giffen is facing charges in an American court over allegations that he funneled more than $78 million to Nursultan Nazarbayev, the president of Kazakhstan. The money allegedly came from fees paid to Giffen by American oil companies that subsequently won stakes in Kazakh oil fields. Giffen also gave Nazarbayev and his wife gifts, including his-and-hers snowmobiles and hundreds of thousands of dollars’ worth of jewelry. “Oil fields are a battleground,” said Eronat. “If Jim had not been involved, other [non- American] firms would have gotten the contracts, and the loser would have been the U.S. government.”

Calil, who had recently visited Giffen in New York, concurred. “Jim never worked for the CIA, but he continuously informed the CIA,” he said, a line of argument that Giffen has advanced in court and that clearly has some merit. “He was never discouraged and in fact was encouraged to have that relationship with Nazarbayev. You don’t take him to court—you give him a medal.”

“Americans want their gasoline cheap,” Calil added. “But it’s not possible without cutting a few corners.”

I was able to see some of a fixer’s work firsthand last summer, when Calil brought me along to a meeting with a New York hedge fund whose offices overlooked Park Avenue just south of Grand Central station. Calil and a few of his associates gathered around a conference table with the fund’s two bosses, whose names I agreed to withhold. One was American, neatly groomed and dressed, with the personality of an accountant; the other was Austrian, and he did most of the talking. The Austrian wore blue jeans and a white dress shirt with a few buttons undone, and his hair was wild like Einstein’s. Eccentric, arrogant, and utterly obnoxious—all traits that no doubt served him well in directing the hedge fund—he was flying off to St. Tropez the next day for a dental appointment.

The Austrian began the meeting by telling Calil and his associates a little bit about the fund. He explained how (no doubt for tax purposes) the firm’s myriad assets were “ring-fenced” in Panama, Luxembourg, and the British Virgin Islands, with separate contracts to operate each property. Its holdings included a boot factory in China and 150,000 hectares of Brazilian rainforest, he said, though when I asked him where the property in Brazil was he had no idea. The fund also had bought two defunct oil refineries, and these acquisitions were to be the subject of the day’s meeting. Because the refineries were quite old and could process only very dirty crude, few countries would allow them to operate today. When the fund took over the refineries, it believed it had buyers who would reassemble them elsewhere, but the deals fell through. Now both of the refineries were crated up, and in one case the hedge fund had a contract requiring that the refinery be removed in a matter of months. The fund had hundreds of millions of dollars tied up in these two refineries, so they were calling on Ely Calil for his expertise in unloading them.

As he and the Austrian discussed the problem, a curious negotiation began to take place. The latter took great pains to stress how trifling this matter was to him; if Calil could help, then great, his tone implied, but otherwise he had many ways to resolve the situation. Calil clearly saw through this pose but did his admirable best to remain polite.

“Perhaps it’s just my fatalism,” he began, “but it’s not going to be easy to sell the refineries.” He pointed out that few countries today could possibly accept refineries so noxious. Angola had potential, he said, but the country was so corrupt and its bureaucracy so complicated that a deal would be hard to strike. Nigeria was, in theory, another option, but again the politics were complex. “You’d need to find a state governor to support the project, and it’s possible that that could be arranged, but you also already have all the turmoil in the Delta region,” which added, he said, an additional political complication.

The Austrian insisted that he already had a number of possibilities in play, and that he even had a “process” whereby he was evaluating those possibilities. He mentioned Pakistan in particular: “We have government support in Pakistan. They can change the government three times, I don’t care. For me this new guy is better than the last one.” But he acknowledged that a refinery there would be in constant danger of having its profits seized by the unstable government. “You have 170,000 starving people, and you don’t want them all running to Islamabad,” he said. “If you have an economic crisis and food prices are climbing, the government might step in and say to the owner, ‘You can only take a 2 percent profit.’ Maybe even for a few years you’d have to take no profit as a ‘contribution’ to the country.”

“Through your process and my fatalism,” Calil replied, “we’ve reached the same conclusion.” Of course the hedge fund didn’t really have an easy option in Pakistan, or anywhere else, and so it needed his help—for which he could command a steep price. Calil laid out a rough plan for how he might place at least one of the refineries. He had identified a potential spot in Lebanon, in the port city of Tripoli. An old refinery there had been shut down about thirty years ago; it was fed from a pipeline that originated in Kirkuk and ran through Syria. Now that the Iraqi government wanted to ship oil from Kirkuk again, Calil went on, Lebanon might be persuaded to site a refinery in the same spot. Of course, the hedge fund would need political support; but fortunately, Calil said, he knew the Lebanese energy minister, and also had political contacts in Syria and Iraq. The fund would also need petroleum engineers to work at the Tripoli site, but Calil had just such a team at the ready, a group of twenty-three Bosnian Muslims with whom he’d worked before on a project in China. As mosque-going Muslims, he pointed out, they were less likely to be shot at or kidnapped in Tripoli. It was agreed that within the month, Calil would take a delegation from the fund to Lebanon for meetings with the relevant players.

Later that day, after we left the meeting, Calil talked a little more about this deal, and how he happened to be so well situated to help the hedge fund out of its dilemma. “A friend of mine became energy minister in Lebanon—a good friend,” he recalled. “I said to him, ‘Congratulations. What sort of energy opportunities are there in Lebanon?’ We were just chatting. He mentioned that they hoped to get the Iraqi oil pipeline reopened, that that would solve a lot of economic problems. Just knowing that they are looking at that refinery: that knowledge is wealth in itself. You have that knowledge in your head. You also know that Syria imports so much and Lebanon imports so much, and that the Syrians are talking to the Iraqis about opening the pipeline. All that knowledge provides a theoretical solution.”

He added: “You also need connections to deliver the solution—to influence the president, the prime minister, the relevant ministers. That is about relationships. If you don’t know the person directly, you know his cousin or someone close to his cousin.”

In this case, I asked him, how big a problem would it be to get the political support?

“As big as I want it to be,” he replied.

A fixer’s business demands discretion. “If you go and blab about your contacts and talk about being a friend of the president, the next thing you know the president doesn’t want to be your friend,” one middleman told me. Calil, for his part, has avoided publicity for most of his thirty-five-year career. Although he is said to be one of the wealthiest men in Britain, and is a regular on the London club circuit, his name has rarely surfaced in the press; for decades, the only photograph newspapers could find to accompany articles about him was a snapshot from his 1972 wedding to the American tobacco heiress Frances Condon, the first of his three wives.

During the past few years, though, Calil has become the subject of intense and unflattering press scrutiny. In 2004, a group of about five dozen mercenaries were arrested in Zimbabwe, where they were buying weapons. The men allegedly were en route to effect a coup in Equatorial Guinea, a tiny African country headed by one of the world’s worst rulers, Brigadier General Teodoro Obiang. The regime subsequently claimed the plot had been financed by Calil in hopes of installing Severo Moto, an exiled political leader. The accusations were never proven, and Calil still vociferously denies he had any role in the affair. Calil acknowledges being a friend and financial supporter of Moto and having introduced him to Simon Mann, a former SAS officer who remains in jail in Equatorial Guinea for allegedly having led the plot. But Calil insists he knew nothing about a coup; by his account, Mann was offering only to provide military protection for Moto so he could return to Equatorial Guinea. Obiang has brought suit against Calil over the coup in various countries, including Lebanon and Zimbabwe, and has never won a court victory. In Britain, a judge ruled that Obiang could not even bring suit for lack of evidence. “It would have been great fun,” Calil told me. “He accused me of causing him mental trauma, and he would have been forced to come to court for a mental exam. He has tried every angle and opportunity, and lost each time.” He added: “You had an African dictator and some mercenaries and a shady Arab. It makes for a great novel, but the part of it that wasn’t a novel was tested in court and proven to be wrong. The press has reported a pack of lies.”

My acquaintance with Calil began in 2002, when I received a call from Victoria Butler, a public-relations specialist who was helping Severo Moto meet with government officials and journalists. At the time, I was writing frequently about the Obiang regime, and so I went to see Moto at Butler’s town house on Capitol Hill. He had already met with a number of Bush Administration officials and members of Congress, and he expressed a naive optimism that the administration might eventually turn against Obiang because of his undeniably appalling human-rights record.

As Moto and I chatted on a sofa, another man sat nearby in an armchair and scrolled through his emails on a BlackBerry. When Butler left the room to get coffee, I asked the man who he was. It was Ely Calil, who told me that he and a number of other “businessmen” had sponsored Moto’s trip and had retained Butler through a P.R. office. I had never heard of Calil, and searches turned up little outside of a few European oil-industry publications. His name had briefly surfaced in a bribery scandal in France, where reports alleged that he funneled money to Nigeria’s Sani Abacha on behalf of Elf Aquitaine, a French oil company (which since has been bought by its French competitor Total).

Since that first meeting six years ago, Calil and I have become unlikely friends. My family and I get together with him when he comes to Washington, and on a number of occasions I’ve visited him in London at Sloane House, the Chelsea estate he owned.11. Calil sold Sloane House in 2006 to Sir Anthony Bamford, chairman of a global construction-equipment firm, for an estimated £30 million. Perched behind gates of white stone, the estate was staffed to the hilt with servants and tastefully stocked with antique furniture, leather-bound books, and numerous busts of Napoleon, Calil’s hero. One Sunday afternoon in 2003, I sat with him in his study and listened to him take phone calls, his patter seamlessly switching from Arabic to French to English and back again. There was a Libyan official who told Calil that Muammar Qaddafi wanted to host a future World Cup soccer tournament in Tripoli, and was hoping to establish his bona fides in the meantime by sponsoring a mini-tournament. Could Calil help arrange for the Senegalese national team to take part? A call to an official in Senegal followed; as did a conversation with a well-connected friend in Lebanon about a brewing political crisis there. Several visitors dropped by, including a pencil-thin and dour man from Glencore who grew more dour still when I was introduced as a journalist.

Calil was born in the Nigerian town of Kano, where his Lebanese parents settled in the 1920s. George Calil had prospered in Africa through a small business empire that was based on the cultivation of peanuts (for consumption and groundnut oil) but also included aluminum and small manufacturing. At an early age, Ely was sent to Lebanon and was privately educated there and in Europe. After his father died of stomach cancer in 1966, Ely—who has five sisters and a younger brother—was chosen to return to Nigeria and restructure the family business. He established close connections with government officials, becoming especially friendly with the transportation minister. At the time, Nigeria was looking for a firm to help its hajj pilgrims get to Mecca; during one meeting the minister asked Calil if he knew anyone at Lebanon’s Middle East Airlines. “The joke of it was that my brother-in-law’s sister was going out with a guy who was high up in the MEA hierarchy,” he said. “She later married him. So I went to Beirut and met his boss, who was very interested. ‘Do you really know the minister?’ he wanted to know. He made a huge proposal, and at the end Middle East Airlines got a lot of business and Nigeria was able to transport out its hajj pilgrims in style. We had been making a few hundred thousand dollars here and there, but on this deal alone I made a few million dollars. I thought: ‘Screw crushing peanuts to make oil.’ This was as easy as putting two people together who needed each other.”

After the first OPEC “oil shock” of 1973, Calil became seriously involved in the petroleum business, first trading oil and then obtaining concessions and reselling them. Within five years, oil had become the largest sector of his business. Calil’s influence and wealth soared after the Nigerian general Ibrahim Babangida assumed power in a 1985 coup. When I asked Calil about his relationship with Babangida, who still is a power broker in Nigeria, he acknowledged that they were close friends. “I took his kids on holidays and to stay with me in London,” he said. “He saw me as a sound independent adviser, not a sycophant. He asked me to handle a lot of back- channel communications, and he sent me out as an adviser to other African governments.” But Babangida was forced out in the face of popular protests in 1993, and ceded power to a civilian government. Three months later, Sani Abacha took power; his regime earned worldwide condemnation by hanging an activist named Ken Saro-Wiwa and eight other democracy campaigners. Base Petroleum, a firm of Calil’s that owned several oil concessions in Nigeria, paid Washington lobbyist Robert Cabelly nearly $400,000 between mid-1996 and early 1997 to lobby the Clinton Administration on Abacha’s behalf.

Following the election in 1999 of Olusegun Obasanjo, who had been jailed for speaking out against the human-rights abuses and corruption of the Abacha regime, Calil’s influence in Nigeria waned. (In power, Obasanjo headed a government that proved pervasively corrupt itself.) But by then, his scope of operations had expanded enormously. He became a confidant to Denis Sassou Nguesso, who had taken power in a 1997 civil war in the nearby Republic of the Congo. “Calil became the country’s main oil adviser,” said Philippe Vasset, of Africa Energy Intelligence. “All the traders courted him in order to get contracts.”

Calil served as a personal adviser to Senegalese President Abdoulaye Wade, who won office in 2000. Calil befriended Wade when the latter was living in exile in Paris. He provided Wade with an apartment, introduced him to French government officials, and generally promoted him in political and media circles. Wade’s base of operations while in exile was at the Paris offices of Saga Petroleum, a small Norwegian firm run by a friend of Calil’s.

Calil also became the chief oil adviser to Idriss Deby, a warlord who had seized power (and still holds it) in Chad. He was tasked with recruiting oil companies to develop projects in that country, and he himself, in conjunction with Eronat, landed a huge exploration concession there roughly the size of Texas. In 2003, the two men sold a major stake in the concession to China in a deal sealed, according to a report in the Evening Standard of London, at a celebratory banquet thrown at Eronat’s estate in Chelsea.

“You’d have an African head of state who would want advice—they all wanted oil to happen in their country,” Calil explained. “Of course you offered the advice pro bono, but you used that to build your network. They’d say, ‘Look at this piece of land and see if it’s worth anything.’ And you’d go to Exxon and get them interested and you’d sell them a part and you’d keep the juiciest part of the concession for yourself. Everyone was happy. The president was happy because Exxon was now exploring for oil, Exxon was happy, and you had the heart of the concession. If you hadn’t been there as the catalyst, the thing wouldn’t have happened. You might call it abusing my role. I call it creating entrepreneurial wealth, and I created a lot of wealth.”

Africa has remained the main focus of Calil’s operations, but he now does business around the globe. In addition to operations in Russia and the Middle East, he owned a Houston-based firm called Nautilus, which obtained oil and gas concessions in South America and Central Asia. He sold Nautilus to Ocean Energy, which subsequently was bought by Devon Energy, now the largest U.S.-based independent oil and gas producer. Calil also won a gas concession in Brazil, which he later sold to Enron. “When buying and selling oil concessions, you’re dependent on your skills and knowledge, but you’re also very much dependent on the goodwill of the local government, from presidents to ministers,” Calil told me. “You end up building a political network to a) build up the business and b) protect it.”

Calil’s social and political networks are astonishing in scope. In Britain, his friends include Lord Jeffrey Archer, the writer and former deputy chairman of the Conservative Party; Lord Peter Mandelson, a key figure in the British Labour Party and currently secretary of state for business, enterprise, and regulatory reform; the Syrian-born billionaire Wafic Said, who made his fortune in Saudi construction deals and once helped broker a mammoth sale of British warplanes to Riyadh; and Robin Birley, an ardent conservative who in 1998 helped coordinate a P.R. campaign on behalf of Chile’s Augusto Pinochet and even arranged his stay at the Wentworth Estate outside London. Birley describes Calil as “ambitious and restless,” a man always in search of a big project. “It’s not so much the money—he wants to build something on an imperial scale,” Birley told me. “He’s not just an average businessman who buys and sells. He’s more a Roman than a Carthaginian in that sense. He’s a seriously clever man.”

When I traveled to Sudan in 2004, Calil supplied me with a cell-phone number for one of the country’s most senior intelligence officials. In Lebanon, I dined with Calil at the mountainside estate of Nayla Moawad, a government minister and powerful Christian politician.22. She is the widow of former President René Moawad, who was assassinated in a 1989 car bombing likely orchestrated by Syria. Calil is a close friend of Mohammad al-Saleh, the brother-in-law of King Abdullah II of Jordan. “He has the ability to get things done, just about anywhere,” said the former CIA official of his post-agency business dealings with Calil. “We once needed an answer to a question in Syria, which is a very tough place to work. One of his associates talked his way into the deputy foreign minister’s office and got us the information we were looking for.”

In the United States, Calil has relationships with both major political parties, and contacts at the State Department and the CIA. “The minute you get anywhere in the oil business, the U.S. system becomes interested,” Calil told me. “The embassy invites you over and the attaché wants to know what you’re doing, and it builds from there. People tell you that you should meet someone, whether to impress you or please you or use you, and then it becomes a chain. There’s nothing sensitive about knowing people; it’s a talent, at the end of the day.”

Fixers have always served an essential function in the oil business. The first to work on an international scale was Calouste Gulbenkian, a stateless Armenian Turk whose father was a banker and a major kerosene importer into the Ottoman Empire. Known as . Five Percent” and the “Talleyrand of oil diplomacy,” Calouste studied mining engineering at King’s College in London and upon graduation in 1887 was sent by his father to the Caspian port city of Baku to learn the oil trade. The young Gulbenkian wrote a series of scholarly articles that piqued the interest of the Ottoman department of mines. Officials there asked Gulbenkian to draw up a report on oil resources, and he pointed to several areas of great potential in the region. “Thus began Calouste Gulbenkian’s lifelong devotion to Mesopotamian oil, to which he would apply himself with extraordinary dedication and tenacity over six decades,” Daniel Yergin recounts in his definitive history of oil, The Prize.

Gulbenkian’s fantastic success as an oil broker depended on his knowledge of the region and his cozy relationships—with Turkish officials, on the one hand, and with European and American oilmen on the other. In 1898, two years after he and his family fled the Armenian genocide, the Ottoman government appointed him financial adviser to its Paris and London embassies. In 1902, he obtained British citizenship, cementing his connection with the most powerful player in the partitioning of the Middle East. In 1912, Gulbenkian helped broker a deal that led to the creation of the Turkish Petroleum Company, which was established to exploit Middle Eastern oil fields. The joint owners, which included Royal Dutch Shell, the National Bank of Turkey, and various German and British investors, granted him a 5 percent non-voting share in the new company—hence Gulbenkian’s nickname.

Sixteen years later, Gulbenkian drew the map that defined a cooperative agreement among the French, Dutch, British, and Americans—their governments and companies—to extract oil from the former Ottoman territories. This “Red Line Agreement” earned him the bulk of his fortune, and his success established the model of the independent, cash-dispensing oil fixer. The modus operandi was simple and straightforward: the fixer took money from a company seeking an energy concession, kept one part for himself, and funneled the rest into a Swiss bank account belonging to foreign officials who awarded the concession. When the officials got their money, the fixer’s sponsor got its contract. “For years you could not operate in many oil-producing countries without an agent, especially in the Middle East,” Willy Olsen, a former senior executive at Norway’s Statoil, told me. “If you had the wrong agent, one without the right connections, you were not relevant at all.”

Today, fixers still play a vital role for oil companies in their dealings with heads of state and other government officials who, in the delicate phrasing of Laurent Ruseckas, an international energy analyst in London, “don’t know how to commercialize their power.” But although straightforward cash bribes are still employed, the means of payoff have become more complex. Partly this is for legal reasons. The United States passed the Foreign Corrupt Practices Act in 1977, which outlawed bribery abroad. The Organization for Economic Cooperation and Development passed similar rules in 1997; until then, many European countries allowed their firms to deduct bribes on corporate income-tax statements. With the heightened legal risk, the greater public scrutiny of international business, and the more sophisticated government methods of monitoring bank transfers, payoffs now take a multitude of forms. Indeed, while as opaque as before and serving the same purpose, modern-day payoffs are not always illegal. “I spent 99 percent of my time trying to figure out ways to not technically violate the FCPA,” a former Mobil executive in Angola once told me.

The federal indictment of Jim Giffen, Calil’s friend, alleges that President Nazarbayev assigned him to negotiate deals with foreign oil companies seeking to invest in Kazakhstan after the country’s independence in 1991. Giffen accompanied the Kazakh leader to Washington for meetings with American officials and, in 1998, even assembled a team of political consultants to lobby the U.S. government on Nazarbayev’s behalf. The team, which sought to win approval for a bogus presidential election held by Na zarbayev and to sanitize his human-rights record, included Mark Siegel, a former executive director of the Dem ocratic National Committee, and Michael Deaver, a former deputy chief of staff to President Reagan. Giffen has not specifically denied funneling money to Nazarbayev, but he claims his role and actions were fully known by the U.S. government. A filing from his lawyers claimed that Giffen’s acts might seem unusual, but that “imposing American domestic conceptions of honest services on all the world’s governments” would “wreak havoc” on the workings of international law.

In 2002, Calil himself was arrested by French police and briefly jailed in connection with the payments of enormous commissions to Sani Abacha by a subsidiary of Elf Aquitaine. During a judicial investigation, Philippe Jaffré, who was then Elf’s CEO, confirmed that the payments were made. “The Nigerian oil fields were extraordinarily profitable,” he said. “There was no other way to reach a friendly agreement.” Jaffré said, however, that Calil and two other Lebanese intermediaries—Chagoury and Samir Traboulsi—“apparently received more money than foreseen.” By Jaffré’s account, the three split $70 million among them for their role in moving the funds.

Despite a lengthy investigation, Calil was never formally charged in the affair (though a number of Elf executives were sent to jail for embezzling millions of dollars from the company). In discussing the case with me, he acknowledged having received commissions from Elf in order to funnel payments to Abacha, saying: “From a strictly legal standpoint, there was nothing strictly illegal about it. It has become illegal now. The commissions I took from the French companies were sanctioned by the French Ministry of Finance. They had to declare the commissions on their taxes. If it’s wrong, then arrest the minister of finance. Why are you arresting me? Was it legal? Yes. Was it moral? I don’t know. But business isn’t about not making money. I’m not a philosopher, but the law is there to be tested. If you’re on the wrong side you should be sanctioned, and if you’re not you should be left alone.”

In recent years, the global energy business has changed in ways that have reduced somewhat the clout of the middleman. Following the expansion of anti-bribery laws, a number of companies and fixers have been tried for their illegal payoffs to foreign officials. Baker Hughes, an oil-services company, recently paid a $33 million fine after admitting it had bribed officials in Angola, Russia, and other countries. A top executive at Halliburton pleaded guilty to making vast payments, in conjunction with three other international firms, to win a multibillion-dollar natural-gas-plant contract in Nigeria. Willbros Group, another oil- services company, was found to have paid off numerous foreign officials to win overseas deals, in one case delivering $1 million in a suitcase. Such judgments have made companies more wary of fixers and more eager to find other means of securing political support. One especially popular technique has been to partner with a local company that is owned by a president, or oil minister, or some other top official who needs to be appeased.

Oil-rich states have grown a bit more sophisticated, too, further lessening the utility of middlemen. When the Soviet Union collapsed in the early 1990s, such newly formed oil producers as Kazakhstan and Azerbaijan had no experience whatsoever with international business. Russia was hardly better off, and so fixers like Calil and Eronat were able to get in early and serve as important oil exporters from the country. In West Africa, after decades of poverty, deficient education, and repressive rule, many governments were staffed entirely by untrained apparatchiks who had no idea how to interact in the business arena. But during the 2000s, year after year of ever-rising oil prices prompted many oil nations to become more savvy about their resources and more inclined to deal with corporations directly.

Fixers remain a permanent presence in the oil markets, however, and for good reason. Even with prices dropping in the current slowdown, a worldwide scramble for oil is still under way, with the United States and China as the two major competitors. Companies are always looking for an advantage, and often the right fixer can be the means to gain it. “There’s no way one company can act clean, especially if you’re worrying about what the Chinese and Koreans are going to do,” Edward Chow, the former Chevron executive, told me. “And to be fair, if you’re working for a Chinese or Indian oil company and you’re trying to get into a country or region where the Americans or British or French have been forever, how do you think you’re going to get in?” Furthermore, oil companies today tend to be capital-rich but opportunity-poor: they have plenty of money, but there are fewer fields and concessions available, and much of what’s out there is controlled by national oil companies. So the stakes are higher and the desperation to get in is greater. “The fundamental drivers behind the use of fixers is so strong that it’s hard to imagine the practice is going to go away,” Chow said.

Calil agrees, in characteristically blunt terms. “There’s no way to do business in the Third World without enriching government leaders,” he told me. “You used to give a dictator a suitcase of dollars; now you give a tip on your stock shares, or buy a housing estate from his uncle or mother for ten times its worth.” Because of this inevitability, Calil sees the West’s strict anti-bribery laws as fundamentally misguided. “If you want to end corruption, you have to become the policeman of the world, and put in prison—in America—the Obiangs and Dos Santoses and the Qaddafis,” he said. “But the businessman has no choice but to do what those guys want. He’s between the devil and the deep blue sea. The Chinese are coming to Africa and promising 25 percent for concessions. So what do you do: say the U.S. government doesn’t approve? The Chinese will give you the finger.” He added: “No one looks forward to paying bribes. It’s no joke, and it’s coming out of [the fixer’s] pocket, not yours or Uncle Sam’s. But if you have to do it, you have to do it.”

So whenever oil business is conducted around the world, it’s quite common to find middlemen at the heart of the deal—even if most of their operations are significantly more limited in scope than were those of the old guard. In Equatorial Guinea, a former top Elf executive named Jean-Paul Driot now has an exclusive agreement to market the government’s share of its international production through his company, Stag Energy. In the Republic of the Congo, another Frenchman, Jean-Yves Ollivier, helps companies navigate the bureaucracy there. London-based Mohammed Ajami, brother of the prominent Lebanese writer Fouad Ajami, helps companies looking for business in Libya, thanks to his close relationship with the country’s intelligence chief, Musa Kusa.

Calil himself is still a major operator in the oil business, but he also has diversified into a broader range of industries. He told me that he spends more and more of his time “managing my investments.” One of his most promising investments is a company called Green Holdings, which is in the emerging field of carbon trading: buying the rights to pollute from cleaner businesses and selling them to dirtier ones. The firm has struck deals in China and India, and Calil has traveled regularly to both nations on the company’s behalf, hoping to establish business ties and build political support. It is an ironic turn indeed that Ely Calil, who grew so rich off the excesses of the carbon era, should now stand to profit still more from the long struggle to clean them up.

Ken Silverstein is the Washington editor of Harper’s Magazine and the author of Turkmeniscam: How Washington Lobbyists Fought to Flack for a Stalinist Dictatorship. His last article for the magazine, “Useful Amateurs,” appeared in the November 2008 issue.