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Ex-Shell Oil president: 'I felt extorted'

By David Fitzpatrick and Drew Griffin, CNN Investigations
updated 8:24 AM EST, Thu January 23, 2014
STORY HIGHLIGHTS
  • CNN investigates Capitol Hill fund-raising and political influence
  • Ex-oil exec says it's a legal "pay to play" system for access to lawmakers
  • Author says politicians should not be allowed to leverage their position to extract donations

Editor's note: CNN's "AC 360" begins a yearlong series of reports this week about an enormous surge in political donations to candidates of both parties. Longtime corporate executives tell CNN that the incessant push for money amounts to "legalized extortion" but the cash buildup shows no signs of stopping.

(CNN) -- The former president of Shell Oil USA didn't candy-coat it: America's political fund-raising system, he said, amounts to legalized extortion.

"I feel extorted," John Hofmeister told CNN's Drew Griffin. "Every time I wrote a check I felt that it was a form of extortion, the price of entry, because of the reception that you got when you contributed versus the reception when you did not contribute."

Hofmeister, who ran Shell Oil USA from 2005 through 2008, said he was constantly being asked for political donations, by members of both parties. It's against Shell Oil policy, he said, for corporate contributions to be made. So any donations came out of his own pocket -- something, he said, he felt forced to do.

Hofmeister said he and other oil executives were summoned to more than a dozen Capitol Hill hearings in 2008 when the retail price of gasoline began to skyrocket. In one hearing, a member of Congress suggested that nationalizing U.S. oil companies might be a way to tamp down prices at the pump.

Not long after one of those hearings, Hofmeister told CNN, several members of Congress pressed him for political contributions. And it's all perfectly legal.

The influence of politics and money has become a legal game of extortion, critics say, made all the more insidious because the so-called extortionists are politicians who write the laws and legally manipulate the system for their own gain.

"It is a feeding frenzy that's going on," said Peter Schweizer of the Government Accountability Institute, a nonprofit research group. He's written a book called "Extortion," describing America's political system as one where lawmakers learn how to transform power into cash. "I think we need to somehow break the back of the ability of politicians to leverage their position to extract donations," Schweizer said.

"Most fund-raisers will tell you the place that you start raising money is from people who can't say no," said Schweizer. "So if you're a government contractor or you're somebody that's doing business with the state or federal government, you're going to be put in a position where you're going to be expected to raise funds, because if you don't, the fear might be that you're going to lose the contract."

Hofmeister, the former Shell executive, told CNN he realized he would have to cough up several thousand dollars of his own money each year, "if I am going to do my job."

He said the system is "pay to play" and he agrees that the word "extortion" is accurate, "as harsh as a word that is." "We talk about corruption in Third World countries. In this case, the corrupters have written a law to make it legal to the corruptees. And I consider that atrocious in the name of democracy," Hofmeister said.

Schweizer didn't seem surprised by Hofmeister's story.

"You hear that from businessmen all the time -- that they come to Washington, they appear before a congressional committee, they are grilled on a matter and it is made pretty clear after the fact that, 'If you make donations or if you do fund-raising for me, I might understand issues a little bit better as far as you are concerned,'" Schweizer told CNN.

It's just business, said Hofmeister. But he said it's also a process that includes a healthy dose of political theater.

"The political theater of the hearing matters to them. And that's exactly the mindset which I used to go into the hearing," Hofmeister said. To please the powerful politicians, he found himself asking himself questions like "What role shall I play?"

"If you're testifying, you're in the subordinate role because the members are always up in a dais looking down at you," said Hofmeister. "So you know you are subordinate to them. This is their town, their home, you're an invited guest. But when the hearing is over ... the curtains close on the theater. It's back to business. And business is raising money."

Now, more than five years after leaving Shell, Hofmeister chairs the National Urban League and serves on an advisory committee for the U.S. Department of Energy.

CNN took a look around Capitol Hill during a single day last November. Our goal: to track the daily fund-raising parade. We found 13 political fund-raisers which took place between 7 a.m. and 2 p.m. We were able to videotape at least eight of them. Join us over the coming year to see how CNN followed the money, the fund-raisers and the politicians to reveal how it all works.

Watch Anderson Cooper 360° weeknights 10pm ET. For the latest from AC360° click here.

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