Last week, a team of FBI agents raided the Laredo, Texas, home of Congressman Henry Cuellar, known as “Big Oil’s Favorite Democrat” for his right-leaning representation of his deep-blue district, as well as the $1.1 million he’s received from energy and natural resource company PACs since his first successful campaign for the House in 2006. From the scarce details available so far, the raid appears to have been connected to Cuellar’s attempts to extend his cozy relationship with the U.S. fossil fuel industry to its counterparts abroad. While it’s early days yet, it’s already looking like the Cuellar scandal is going to showcase the fine line between when it’s legal to shower support on international oil and gas producers and when it’s not.
Cuellar’s home and office were each raided as part of a federal grand jury probe into a number of companies and nonprofits, several of which have ties to the government and state-owned oil company of Azerbaijan. The FBI is involved, along with the Justice Department’s Public Integrity Unit, charged with overseeing “the investigation and prosecution of all federal crimes affecting government integrity, including bribery of public officials, election crimes, and other related offenses.” Cuellar and his wife and at least one campaign staffer were subpoenaed as well. “I’m fully cooperating with law enforcement and committed to ensuring that justice and the law is upheld,” Cuellar said in a video released Tuesday afternoon from his reelection campaign Twitter account. “There is an ongoing investigation that will show there was not wrongdoing on my part.”
It’s not known what Cuellar’s, his wife’s, or his staffer’s place in the probe may be, though reporting in the days since the raid has dug up a long history of Cuellar’s connections to the oil and gas–rich country. A nonprofit called Assembly of the Friends of Azerbaijan reportedly played a “special role” in getting him onto the Congressional Azerbaijan Caucus in 2013. The group was later found to be operating as a front for SOCAR, Azerbaijan’s state-owned oil company, which transferred money to it to sponsor a congressional delegation in the spring of 2013 that Cuellar did not join.
Cuellar and his wife had already traveled to Azerbaijan in January of that year, on the dime of another nonprofit called the Turquoise Council of Americans and Eurasians. As Lee Fang and Ryan Grim reported for The Intercept, that organization’s president, Kemal Oksuz, was a campaign donor to Cuellar who later pleaded guilty to concealing the fact that SOCAR had sponsored the spring congressional delegation, using the Turquoise Council of Americans and Eurasians and the Assembly of the Friends of Azerbaijan as cover. “Records suggest that this individual used the entities interchangeably,” a Congressional Ethics report stated of Oksuz. Cuellar worked with Oksuz, as well, to organize a partnership between Texas A&M University and the Azeri government that resulted in a “Baku Summer Energy School,” which itself had backing from both ExxonMobil and SOCAR. It seems Cuellar saw a kinship between the two oil and gas–producing regions. “Given San Antonio’s role as a rapidly growing city with an unlimited export potential, there is a vast opportunity to strengthen South Texas’s relationship with Azerbaijan,” Cuellar said in a 2015 event with Azerbaijan’s ambassador to the United States, Elin Suleymanov.
One might forgive Cuellar for thinking such ties to a major oil and gas producer were normal given how ubiquitous they’ve been throughout his own career. As The Nation’s Aída Chávez reported, the American Petroleum Institute, or API—a lobbying outfit for the oil and gas industry—poured millions of dollars into a dark money outfit, American Workers for Progress, that then “poured hundreds of thousands of dollars into boosting Cuellar in the final weeks of the wildly competitive race,” referring to his 2020 campaign against progressive challenger Jessica Cisneros. (They’ll face off again in March.) The following July, Cuellar’s chief of staff Amy Trevioso left to become API’s senior director for federal relations. She’d previously worked as a lobbyist for the Chamber of Commerce, which ran Facebook ads last year thanking Cuellar and other industry-friendly Democrats for helping to kill Build Back Better. In the first three quarters of last year, Cuellar received $66,500 from 14 oil and gas company PACs, over $30,000 more than those groups’ next-biggest congressional recipient.
It’d be wrong, however, to think of Cuellar’s close connections to Azerbaijan as a bizarre side grift for free trips to Baku. They’re well in line with U.S. foreign policy. Shortly after the collapse of the Soviet Union, Azerbaijan entered into a production-sharing agreement, or PSA, with 11 multinational oil and gas companies, known as the “Contract of the Century,” to develop oil reserves in the Caspian Sea. The deal—now overseen by BP and extended through to 2049 in 2017—was important for the U.S. as it provided an opportunity to cultivate an ally that bordered both Iran and Russia, as well as a major investment opportunity for U.S.-based companies and current Cuellar donors, like Exxon and Chevron. “The U.S. does not recognize Moscow’s rights to spread the sphere of its interests outside of Russia’s borders,” Secretary of State Madeleine Albright said shortly after the deal was signed, echoing her successor Tony Blinken’s tone in recent weeks.
The U.S. today continues to treat the development of Azerbaijani oil as an American security interest well within its sphere of influence. In recent years—through the Obama, Trump, and Biden administrations—that’s meant supporting the Southern Gas Corridor. The recently completed project carries fuel from the Shah Deniz gas fields to Europe via the South Caucasus pipeline, the Trans-Anatolian Pipeline, and the Trans-Adriatic Pipeline.
BP operates the Shah Deniz fields and has a stake in each of the three pipelines. “The United States has supported this project from its inception,” then–Special Envoy and State Department Coordinator for International Energy Affairs Amos Hochstein said at a groundbreaking ceremony in Greece, in 2016, “because it provides new hope and opportunity for stability and prosperity in every country along the route and throughout the region that it neighbors.” In 2016, he said, “I’ve dedicated a significant portion of my time over the past nearly five years I’ve been in this job to ensuring the success of the Southern Corridor.” After a stint as an executive at the gas-export company Tellurian, in between the Obama and Biden administrations, Hochstein is now back at the State Department as its senior adviser for energy security.
Azerbaijani gas has taken on new importance in light of Russia amassing troops along its border with the Ukraine, as talks between Washington and Moscow appear to be floundering. Specifically, US and international officials worry that Russia will throttle gas supplies in the event of a conflict, and the U.S. has in recent days appealed to Qatar to help plug any holes. The Southern Gas Corridor, which has attracted significant financing from European and Asian development banks, could be an attractive alternative.
It doesn’t appear that State Department support for the project has faltered. Last June, Acting Assistant Secretary of State Philip Reeker praised the completion of the Trans-Adriatic Pipeline and Southern Gas Corridor, which, he said, “demonstrated how Azerbaijan and the United States can work together, along with other partners, to build connectivity, increase prosperity, and contribute to European energy security.”
In his speech to the Regional Energy Security Symposium in September—hosted by BP and SOCAR—U.S. Ambassador to Azerbaijan Lee Litzenberger said, “I want to congratulate Azerbaijan, SOCAR, and BP on the completion of the Southern Gas Corridor, a project that will support European energy security for decades to come,” calling the project “a testament to what can be achieved when government vision, political will, international collaboration, and private sector ingenuity come together.” Litzenberger noted that the U.S. had contributed $21.5 million to Azerbaijan’s Oil Platform Defense Initiative, devoted to offering “training and maritime equipment to Azerbaijan’s State Border Service. This enables our Azerbaijani partners to better protect their offshore assets from potential threats.” As of publication, the State Department had not provided comment as to the status of America’s support for this project or the precise extent of U.S. funds that have been devoted to it.
Unfortunately for Henry Cuellar, his own enthusiasm for Azerbaijan’s oil and gas sector seem to have gotten him into trouble. He might just have had the wrong job.
