More on American Oil and the Russian Mob

Richard Behar has written a piece in Forbes on the deepening ties between American oil companies and the Russian Mob, none of which is surprising but all of which is disturbing.

The Samara Oblast which is the geographical focus of the story I know well. In the 90s I designed and operated a training program in the US for a group of leading Samara businessmen. It was then and is now a very tough business environment. One of the participants of my program , a banker joked that he guarded the bank’s gold holdings with his life, he then would give a big grin and reveal a mouthful of gold teeth.

One of my most vivid memories and deepest regrets when I worked in Russia was declining to go on a protective assignment for a major Samara business group with the Moscow based security company with whom I worked. The company headed by a former senior officer of Alpha was preparing a small caravan of armoured vehicles and heavily armed security officers, all “former” state security officers to face off with a rival security company also on their way to Samara. The rival outfit was supposedly controlled by a well-known and totally unscrupulous oligarch now residing in the West. Watching the preparation, weapons and equipment check going on was like watching a special forces group getting ready for a raid into enemy territory, which in fact was what I was watching. When my friend and head of the company joked about grabbing a vest and going along for a ride, I declined because I had other work I needed to attend to in Moscow before flying out in a few days, but I have always wondered since then what I missed out on in Samara. I learned later the rival security company stood down.

Consequently nothing in Behar’s story on Hess Oil and the Russian Mob in the Samara Oblast and the tales of shootings, corruption, security companies and government officials behaving badly was that surprising to me, nor would it be to most observers of the Russian business environment. However, there is something deeply disturbing when American companies operate in such an environment and pretend/contend  to be oblivious to what is going on within and around their operations. Here’s Hess’ response to Behar and Forbes’ inquiry:

“Asked about the company’s apparent ties to the oil mafia, Hess spokesman Jon Pepper tells FORBES, “On a regular basis our company audits operations around the world to ensure compliance with [our Code of Conduct] and all applicable law, often enlisting outside expertise. Our recent audit in Russia has not found any violations of the Code or the law.”

Even though Behar notes that he has learned that another Hess internal probe is under way, I wonder what outside expertise Hess depended on, if they did, in this case? And to what degree did those hired experts find what Hess management wanted to find? The corruption of an intelligence product, in this case an internal audit, is not something unique to government work, especially when the expectations and desires of the consumers of  the intelligence too strongly shape the product.  However, the danger in Hess’ failure to assess the presence and activities of the Russian Mob surrounding their Russian operations is not limited to Russia, who in Hess or those among their outside experts are willing or capable of protecting their international and domestic US operations from being infected by the same contagion?

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