Chuck Hagel’s Chevron Tie Not Criticized

January 16th, 2013 - by admin

David R. Baker / The San Francisco Chronicle – 2013-01-16 23:57:17

(January 15, 2013) — In his bid to become secretary of defense, former Sen. Chuck Hagel has come under fire from both the left and right for his comments on Iraq, Israel and gays.

His membership on the board of one of America’s largest oil companies, however, has caused barely a stir.

Since 2010, Hagel has served on the board of Chevron Corp., a position he would have to leave if he wins Senate confirmation as defense secretary. He received $301,199 in compensation from the San Ramon company in 2011, including $184,000 in stock.

Chevron is a major federal contractor, with more than $501 million in sales to the US government in the last fiscal year.

But critics of the “revolving door” between the federal government and the private sector haven’t raised any complaints about Hagel. That’s largely due to the nature of Chevron’s federal contracts. Almost all the money Chevron made from the US government in fiscal year 2012 came from selling fuel to the Pentagon, according to a government website that tracks federal spending.

“The decisions on fuel procurement are fairly low on the radar screen of a defense secretary,” said Tyson Slocum, head of the energy program at the Public Citizen watchdog group. “I don’t think that would be as alarming as, say, a board membership at Lockheed Martin or a contractor that goes to the core of strategic decision making at the Pentagon.”

Environmentalists don’t like seeing a board member of Big Oil join the Cabinet of an administration that they consider an ally. But they’re also leery of speaking out against Hagel, considering how controversial his nomination has become for President Obama. Many would rather not discuss Hagel at all, at least not on the record.

Those who will talk say they’re willing to give the Republican from Nebraska the benefit of the doubt, even if they want Obama to cut America’s dependence on Chevron’s main product.

“I’m sure it will raise some eyebrows,” said Ralph Cavanagh, head of the energy program at the Natural Resources Defense Council. “But I’m not threatened by a secretary of defense who understands the oil industry. What I bet it will give Chuck Hagel is a good sense of the energy security problem of our dependence on oil.”

Political Connections

Chevron, the nation’s second-largest oil company, has a history of politically connected board members. Condoleezza Rice served on the company’s board before becoming national security adviser for President George W. Bush. Former Sen. Sam Nunn joined the board after leaving office, retiring from Chevron in 2011.

Should Hagel win confirmation, he would have to resign from the company’s board, said company spokesman Morgan Crinklaw. Hagel serves on the board committees that oversee Chevron’s corporate governance and public policy.

The practice of former federal officials landing jobs with government contractors — and vice versa — has long angered many government watchdogs. They were appalled when Obama, early in his first term, nominated a lobbyist for the Raytheon Corp. to serve as deputy secretary of defense.

But Hagel doesn’t lobby for Chevron, according to the company. And the Senate Armed Services Committee would require him to financially divest himself of his Chevron holdings, either by selling them or placing them in a blind trust, said Joe Newman with the Project on Government Oversight.

“We certainly wouldn’t want to see him weigh in on any contracts that could involve Chevron,” said Newman, the nonprofit group’s communications director. He added that a defense secretary wouldn’t likely get involved in something as mundane as buying gas, diesel and fuel oil.

Praise for Pentagon

Environmentalists who have been pushing Obama to take action on climate change have praised the Pentagon for taking concrete steps to improve its energy efficiency and test alternative fuels. They don’t want that to change under Hagel.

And while an oil company board member may seem an unlikely champion for biofuels, Chevron is an investor in one of the startup businesses supplying those fuels to the Pentagon — Solazyme, based in South San Francisco.

“An early test for Hagel will be whether he continues that leadership,” Cavanagh said. “If that’s the case, none of us will regret his temporary entanglement with Chevron.”

Others on the political left have their own reasons to dislike Hagel’s Chevron connection.

A coalition of human rights activists has criticized Chevron’s behavior around the globe, accusing the company of fouling the environment and working with repressive regimes in places such as Burma and Nigeria. The coalition publishes an annual report called “The True Cost of Chevron” that company executives have compared to a funhouse mirror, distorting their record around the globe.

No Response

One activist group, Crude Accountability, even asked Hagel at his first Chevron shareholder meeting why he was joining the board. He didn’t respond, said Kate Watters, the group’s executive director.

“It wasn’t a PR stand — we were genuinely asking, ‘Hey, what are you doing?’ ” she said.

While Watters has concern about a former Chevron board member leading the Defense Department, she also has some respect for parts of Hagel’s record in office.

“When he was in Congress, he had a reputation for being firm on human rights,” she said. “He was one of the few people who would hold hearings about corporate responsibility and human rights concerns in other parts of the world.”

David R. Baker is a San Francisco Chronicle staff writer. E-mail:

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