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Class War For Idiots / August 24, 2009

summers-sleeping

The best way to understand Larry Summers, the man who’s shaping America’s economy from his director’s chair at the National Economic Council, is to meet the people he hangs out with. Once you get to know Larry Summers’ crowd, nothing he does–no matter how twisted (like Larry’s suggestion to move all First World toxic waste to Africa) or deranged (Larry’s theory that women can’t do math)– will surprise you. Whereas the famous “Six Degrees Of Separation” gives the false impression that it’s a small world and we all pretty much know each other, this “One Degree of Separation” will prove how totally alien Larry Summers and his crowd really are from the rest of us.

I’d like to kick this series off with India’s top oligarch, Mukesh Ambani, the only foreign boss who paid Summers to work for him in 2008–and by “work,” I mean “you agree to be listed on my board of international advisors, which requires nothing from you, and in return I’ll give you $187,000.”  Two years ago, Larry’s ex-boss Mukesh was the World’s Richest Man, worth $63.2 billion–but since the meltdown, the Reliance Industry chief’s wealth has fallen to a mere $19.5 billion, dropping him to #7 of Forbes’ list. 

mukesh-summers-screenshot3

Mukesh Ambani co-chairing the World Economic Forum with Larry Summers in 2006

What sets Mukesh apart from most of the world’s top billionaires isn’t the 60-story tall, $2 billion house he’s building for himself and his family on a swank Mumbai suburb, or the $60 million Airbus 319–complete with master bedroom suite, entertainment center, and barroom–that Mukesh bought his wife for her birthday a few years ago. No, it’s the insane blood feud that Mukesh has going with his billionaire younger brother, Anil Ambani–culminating in a helicopter sabotage act that’s right out of a Hawaii Five-0 episode.

anil-spielberg

You may have heard of Anil Ambani–he’s the Indian billionaire who saved Hollywood by signing billion-dollar deals with Spielberg and Dreamworks to take a piece of future blockbuster film projects. Anil used to be almost even with Mukesh, ranking #6 on Forbes’ list last year when Mukesh was #5. The competition is as fierce as it is petty–after Mukesh bought his wife the $60 million Airbus, younger brother Anil bought his wife an $80 million yacht. But last fall’s financial crash has been rougher on Anil–his net-worth fell from $42 billion last year to just $10 billion this year, placing him at #34 on Forbes’ list. So you can see why a guy like Larry Summers would choose Mukesh–the wealthier, fatter, older brother– over Anil, the sleek marathon-running jetsetter with the Bollywood starlet wife.

Mukesh and Anil have been at each other’s throats ever since their father–who built Reliance up from scratch–died in 2002 without leaving a will. The two brothers immediately went to war over who controlled the company, Reliance, forcing their mother to intervene and broker a deal in 2005 carving up the assets into two separate Reliance empires. Mukesh, the older brother, got control of the petrochemicals part of the business, Reliance Industries. Anil got control of the telecoms and power-generation part of daddy’s business–Reliance Communications and Reliance Power.

mukesh-division1

You’d think they’d be happy with what they had, but then you don’t know Larry Summers’ ex-boss very well: The two have been conspiring to destroy each other ever since their daddy died, and it just keeps getting worse. Three years ago, when Anil was about to close a $50 billion buyout of the largest telecom firm in Africa and make his Reliance Communications one of the world’s largest, older brother Mukesh stepped in, invoked a right-of-refusal clause from the agreement they’d cut with their mommie, and killed the deal. See, Mukesh claims he’s the one who really started Reliance’s telecom business, and the thought that Anil might turn it into the next AT&T was something Mukesh could not countenance. So Larry’s ex-boss killed the deal, and another Indian oligarch swooped in and bought it instead.

The mutually-assured destruction between the brothers hasn’t stopped there. Mukesh is being accused now of going back on a deal whereby the billions of untapped gas reserves he owns aren’t being sold to Anil’s power-generating business, because Mukesh wants a better price, and Anil refuses to pay that price. While India waits for Larry Summers’ ex-boss to stop fucking with his younger brother, India suffers power outages, and the country’s investment reputation is suffering.

But the most amazing twist to this feud took place a few months ago, when a helicopter mechanic working for Anil noticed during a pre-flight inspection that the gear box cap had been tampered with. The mechanic opened up the cap, and saw that someone had poured gravel and mud into the gear box. It was an obvious act of sabotage, and the most obvious suspect that everyone (but the police) looked to was none other than Larry Summers’ boss, Mukesh.

anil-copter1

As the senior pilot in Anil’s company said, “Some persons, possible business rivals, were attempting to take away the life of Anil Ambani.” Calling it “clearly an attempt to murder” Anil’s pilot explained what would have happened if the sabotage hadn’t been discovered:

Shortly after taking off, the pebbles would have entered into the gearbox and would have caused midair loss of power,” which could have forced the grounding or crash of the copter, Mr. Joshi said.

Here’s where the story gets really creepy: an official police investigation was immediately opened, and the first thing that the notoriously corrupt Indian police did was rule out Mukesh as a suspect. Two days later, the mechanic who discovered the sabotage was hit by a train and killed.

Police claimed it was a suicide–something the mechanic’s family has bitterly denied ever since. They noted that the mechanic was a longtime Army veteran and was “never depressed.” Moreover, in a note found in the mechanic’s pocket addressed to the police, the mechanic said had been visited by “three or four people from Reliance” but that “I didn’t tell them anything.”

Anil wisely stopped flying helicopters that day, and fired the helicopter maintenance firm. Good for Anil, but bad for older brother Mukesh, who can’t close his multi-billion-dollar gas deal at the price he wants, and bad for all of India, suffering power shortages, blackouts in New Delhi, and the loss of billions in foreign investment due to the fear of getting caught up in the brothers’ feud.

mukesh3Mukesh’s cheeks are more Larry’s style

The crux of the problem over the billions of untapped gas reserves in the Sea of Bengal comes down to that 2005 agreement the two billionaire brothers signed with their mother. Now if you remember the AIG bonus scandal in March of this year, Larry Summers’ main argument was that contracts have to be respected. Too bad Larry’s ex-boss doesn’t feel that way–the agreement signed between Mukesh and Anil in 2005, sealed with their mommie’s approval, mandated Mukesh sell his Indian gas to Anil. But Mukesh changed his mind over the price he was willing to sell it to Anil for–Mukesh decided he wanted Anil to pay twice the agreed-upon price. And Larry’s ex-boss won’t sell the gas to Anil unless he gets that price. Period. Given that the World Bank ranked India 180th in the world in enforcing contracts–only Benin ranks lower–it’s not surprising that mere “rule of law” isn’t enough to resolve the dispute. Nope, it’s all down to sabotage versus Bollywood melodrama, as Anil recently squirted for the media in a “how could Mukesh do this to his own mother?” offensive earlier this month:

If you do not respect the very word given to your mother, then what is left in life?’’ [Anil] asked rhetorically.

At one stage of the conversation, Anil said the family dispute over gas was affecting his immediate family. “Tina (his wife) and Anmol (his elder son) were present during my speech (at the recent RNRL AGM). They so were so emotionally distraught they simply could not hold back their tears. When I reached home, my younger son Anshul was in tears when he saw me.’’

Asked about his accusations against oil minister Murli Deora, and why he would favour Mukesh when he was close to the entire family, Anil said, “I have known Murli uncle and Hema aunty (Deora’s wife) and their sons Mukul and Milind for several decades…almost my entire life. But more on his relationship with Mukeshbhai and with me perhaps some other time.’’

anil-mother

Anil greeting his mother.

It’s quite a family. And Larry Summers, the man who in charge of America’s economy, is tight with Mukesh Ambani, the older and scarier of the two monster brothers. They’ve been Davosing together for years, and once Summers left Harvard, Mukesh offered him one of many sweet “board member” deals.

What we know is that last year, Mukesh paid Summers $187,000 to sit on the Reliance Industries Advisory Board–one of those joke committees companies set up as a way to advertise their Solid Connections–and to win favors with powerful players. Why would Mukesh, a notoriously stingy billionaire, the object of a recent Daily Telegraph article, “Where Are India’s Great Philanthropists?” and criticism by no less than Sonia Ghandi–why would a guy like that pay Summers nearly $200k for doing nothing?

mukes_ambani_tower_house_home_altamount_roadMukesh’s 60-story-high home in Mumbai

Reliance offered up a few explanations to reporters this year when Summers’ deal was first disclosed: they said that Summers had sat on Mukesh’s advisory board for several years (raising further questions that have never been answered), and moreover, Summers also served on another Mukesh star-studded project last year, the Reliance Innovation Leadership Council. Which is interesting because the head of that council that Summers sat on, Dr. Raghunath Anant Mashelkar, had just been forced to resign in disgrace in 2007 from an Indian patents committee after being accused of plagiarism and, worse, of doing the bidding of multinational drug companies, ensuring they’d make huge profits in India at the expense of the country’s hundreds of millions of poor and struggling citizens. So in effect, Larry Summers was hired by billionaire oligarch Mukesh to serve under another of Mukesh’s paid economic saboteurs—a sleazy, disgraced tool of the health care industry.

As to why Mukesh chose to lavish Larry with so much money for so little work, the answer may come from a New York Times profile on Mukesh Ambani, published last summer:

Although rumors that it actively engages in bribery swirl around Reliance, Mr. Ambani says it has never paid a bribe or broken a rule. “These are all fables,” he says, dismissing the rumors.

But he concedes that there are indirect ways for Reliance to curry favor. Although he says Reliance “never” pays the tuitions of bureaucrats’ children, he also acknowledges that foundations controlled by or affiliated with Reliance sometimes have. [bold mine--M.A.]

Some foundation would have given some scholarship maybe, but that’s all out in the public domain,” he says.

In interviews, two former Reliance employees and other close associates of Mr. Ambani, all of whom requested anonymity because they were afraid of jeopardizing relationships with him, say the company also routinely engages in political lobbying and covert monitoring to gain a leg up on its rivals. [bold mine--M.A.]

Ah, now it’s starting to make a little more sense, from both sides. Mukesh has what Larry wants–money and power; and Larry has what Mukesh wants–the connections in the world’s most powerful economy to “gain a leg up on his rivals.” And if you think that Larry isn’t the kinda guy who’d befriend sleazy Third World oligarchs involved in jaw-dropping murder mysteries, then folks, you better stick around for more of this series. After all, Summers is the guy who once described the architect of the Russian privatization scam as “my dear friend.”

Oh, and about the helicopter mechanic who was hit by a train, dragged 100 yards and died… the death was ultimately ruled an “accident” rather than suicide by the police, as they could find no evidence of a suicide. The mechanic’s family still insists he was murdered. They’d better stay away from railway platforms if they know what’s good for them.

Mark Ames is the author of Going Postal: Rage, Murder and Rebellion from Reagan’s Workplaces to Clinton’s Columbine.

Click the cover & buy the book!

32 Comments

Add your own

  • 1. Rickey Bobbey  |  August 24th, 2009 at 1:34 pm

    Your just jealooos, Ames. ‘Cause you ain’t got no $$$$$$$$$$!

  • 2. thomzas  |  August 24th, 2009 at 1:35 pm

    Mark, you must have enough for a Larry Summers book by now.

    Larry Summers: Forrest Slump

    When’s it coming out?

  • 3. George Lincoln Rockwell  |  August 24th, 2009 at 2:31 pm

    I am a tool, and I will pretend I’m edgy though I will stay anonymous and comment on other people’s blogs. Is that cool?

  • 4. eric  |  August 24th, 2009 at 3:07 pm

    Yeah man, rickey bobbey dude, cuz everyone wants to be a corrupt oligarch, at any cost. go back to swineworld.

  • 5. solfish  |  August 24th, 2009 at 3:52 pm

    Hi. I’m one of Ames’ jealous readers, so I read him all the time and look for some flaw, then make an anonymous comment here. How cool am I, eh?

  • 6. Toba  |  August 24th, 2009 at 4:44 pm

    Hope he’s ready when an earthquake comes to shake that 60 ft architectural monstrosity down to the ground.
    It looks unsafe……..

  • 7. xyz  |  August 24th, 2009 at 6:23 pm

    Ames is making me crazy with his genius. The Ambanis are known for their corrupt unethical ways, that is how they got so rich. By linking Larry Summers indirectly responsible for India’s power shortage is insane. Successive Indian governments have neglected the power sector for more than 15 years and right now the government is finding this feud a convenient excuse.

    By the way every industrial family in India are corrupt, the Ambanis are just more motivated.

    This whole article tries to tangentially smear Summers. Summers can be blamed for the disaster in Russia and his connections with Kenneth Lay and for innumerable other frauds that he perpetrated during his years with the Clinton administration, but the Indian connection is stretching things too far.

  • 8. Kavuye Toon  |  August 24th, 2009 at 7:26 pm

    Larry Summers was just taking notes so he could implement a rigid caste system in america

  • 9. AIG  |  August 24th, 2009 at 7:30 pm

    When will the Indian Mao arrive? How much shit can these poverty stricken indians take before they commit class genocide?

  • 10. Anonymous  |  August 24th, 2009 at 8:12 pm

    I don’t know, Mark, in the grand scheme of things is this really that bad? We’ve got awful people doing much more awful things than accepting free money from corrupt oligarchs with questionable morals.

  • 11. X  |  August 24th, 2009 at 9:56 pm

    Thank God for the Class War For Idiots article series. Honestly, if YOU didn’t talk about this shit and connect the dots together Ames, no one ever would.

  • 12. X  |  August 24th, 2009 at 10:05 pm

    For those questioning the value and/or purpose of the article: Mark is not saying Summers is responsible for the problems in India, instead Ames is highlighting the scumbagginess of Larry Summers by showing how filthy and evil Larry’s friends are. (Look at the first two sentences of the article if you don’t understand Mark’s purpose).

    This isn’t the whole of his argument against Summers–remember that he’s written about Summers in the past, talking about “bigger” issues Summers has been involved in unconnected to Indian businessman. But this is A critique of Summers’ personality and code of morality (remember that Ames has gone out of his way to make things personal lately–note the hilarity with various bloggers) to help shed some light on exactly how evil Summers is.

  • 13. Bo Kyla  |  August 24th, 2009 at 10:55 pm

    X: is not the Summers person then guilty by association? En kommer till den ofrånkomliga avslutningen, som de föregående postar berört författare i hans känsligaste område, en underutvecklad slida. Ditt jävla rövhål! Är det kyler tillräckligt för dig? Är vad ny?

  • 14. chickenbutt  |  August 25th, 2009 at 4:33 am

    Another disgusting person in this world. All that money and he is still no happy. Ha, all my poverty and IM STILL NOT HAPPY. It is just scary how easily money will make you an ASS. I guess our lives are cheap when you can pay off the cops to look the other way.

  • 15. rick  |  August 25th, 2009 at 7:12 am

    One could even say “the personal is the political” if one were stupid and in some horrible academic program based on the work of transparent charlatans.

  • 16. FOARP  |  August 25th, 2009 at 3:35 pm

    Mark is doing what right-wingers in America have been doing for years: getting personal, pointing out who exactly their opponents have been ‘palling around’ with.

  • 17. Whatever666  |  August 26th, 2009 at 9:36 am

    I don’t blame Larry Summers for accepting payment from a ruthless oligarch who routinely fucks the poor and working classes of India.

    Let’s face it, these people were going to be fucked regardless, so why not get some swag out of it, if you can?

    I blame Larry Summers for only negotiating a $187,000 package. Shit, given his global stature (however undeserved), he’s offering himself on a discount package. He should have asked for at least $300,000 or so. Bet he would have gotten it too.

  • 18. Donchaoffme Ambani  |  August 26th, 2009 at 11:36 am

    @xyz: The Ambani brothers didn’t get rich. They inherited from their father.

    Their father was no saint either – clawed his way up with a feudal attitude, happily using hitmen to off his rivals. He’s portrayed nowadays as if he were a saint by the media. Money talks.

  • 19. Orthodoxy  |  August 26th, 2009 at 6:14 pm

    @ rick & FOARP-

    The economic role a person chooses to play is not a merely a personal decision, and taking blood money from oligarchic parasites is not merely “palling around.” Vampires such as the Ambanis visciously exploit society without taking any responsibility, and they get away with it because scumbags like summers are willing to work as proxys in the political arena. This type of thing is completely fair game.

  • 20. Anonymous  |  August 27th, 2009 at 8:08 am

    Revisiting the ‘not that bad’ theme- not only are there worse people doing much worse things, this isn’t even the worst thing that Larry Summers himself is responsible for.

    As you yourself explained (http://exiledonline.com/larry-summers-a-suicidal-choice/2/), Larry is responsible for the deaths of millions of Eastern Europeans, probably putting him somewhere behind Stalin, Hitler, and Genghis Khan on the death scale.

  • 21. Palmer Eldritch  |  August 27th, 2009 at 10:29 pm

    When someone is writing the history of these lost American decades, imagine how richly illustrative and convenient he or she will find the example of Larry Summers as president of Harvard. What better way to summarize the extent to which creeping Taylorism subsumed institutions of and tendencies toward culture in the USA?

    We haven’t yet begun to experience the socioeconomic logjam of generic business-school dickheads who will be finding themselves without a big swinging commercial cock left for them to suck. Wait until all of these half-literate clerks are scrapping with decent people for every menial job, then you’ll see some real class war, maybe some guerrilla-style American Troubles.

    I get a lot of joy out of contemplating the extent to which a guy like Larry Summers will be reviled by the students of the future. Hopefully I’ll be observing this from somewhere in the world where they’ve learned their lesson already about sanctifying the ambition of dullards.

  • 22. Rosa  |  August 28th, 2009 at 7:09 pm

    Orthodoxy and Palmer Eldritch: You make me glad that this blog allows comments. It’s nice to know I’m not alone. I’m really going to enjoy seeing these entitled assholes who’ve never known hardship lose their shit.

    From a distance of course.

  • 23. Gautam  |  August 29th, 2009 at 12:35 am

    The story about the death of the mechanic appeared in the Indian media too. But then it just vanished off the news pages and went into oblivion. It unfolded like this…

    “O-M-I-GOD” mechanic who discovered possible sabotage attempt dies in train accident… (endless static) … bzzt”

    May be a late cover-up? I mean why even report the death in the first place? If you don’t want to ask questions about it later.

    The Indian media sucks (psst I’m a part of it!) and the zenith of sucktitude has been attained by the Hindi broadcast media that plays out like poorly scripted comedy.

  • 24. Araj  |  August 31st, 2009 at 11:42 pm

    http://economictimes.indiatimes.com/News/News-By-Industry/Services/Consultancy-/-Audit/Reliance-Industries-reluctant-to-share-records-Auditor/articleshow/4954805.cms

    Well if you do lots of sinning then reluctance in sharing records is understandable

  • 25. A_Lawyer  |  January 8th, 2010 at 8:59 am

    Couple of factual boo-boos there Mark:

    1. Anil Ambani’s plants do receive gas from Mukesh’s gas fields… at the higher price. He wants the gas at a lower price for a plant that is not even up yet (the Dadri Plant)… i.e., it hasn’t even gotten the land acquisition approved. So Mukesh is hardly the one responsible for the rolling blackouts etc.

    2. It was Anil’s lawyers who got an injunction against the supply of gas at the Bombay High Court to EVERYONE till Anil got his share. The injunction was only lifted when the Government intervened and convinced the Court that this would seriously fuck shit up.

    3. The “agreed price” between the brothers was a scam to allot all the gas between themselves and monopolize the natural gas market in India. It fell through because they started fighting each other. The price Mukesh is asking is the price the Government has set once it stepped in.

    4. The earlier price was gotten by Mukesh and Anil by conning the state run NTPC into accepting a gas supply contract at a ridiculously low price and then reneging on the contract when supplies were asked for. Also, NTPC is Anil’s direct competitor in the electricity generation business but it is an open secret that they have been in cahoots to try and get the gas from Mukesh at all costs.

    5. Anil basically used his political clout to get land alloted in the State of Uttar Pradesh by getting the State Government to invoke emergency provisions and snatch fertile land out of the possession of farmers. Naturally this was challenged in court an the acquisition has been struck down and the land being returned.

    It may also interest you to know that this little article has caused a bit of a rumpus in the state of Andhra Pradesh since it was claimed by a local channel that you have linked Mukesh Ambani to the death of a popular Chief Minister who died in a helicopter crash in September, 2009.

  • 26. Timur  |  January 8th, 2010 at 12:25 pm

    Mark Ames articles are getting dumber and dumber. Ok, so you call what reliance does in India ‘lobbying’? Understatement of the year and – insane. Sonia Gandhi probably has a large stake in the company.
    Besides the two brothers are hardly invincible ‘oligarchs’. Anil ambani is already bankrupt and Mukesh hasn’t been doing to well recently. The plan to buy the African firm was merely an ‘exit route’. Since most promoters with publicly listed shares cannot offload large stakes in their companies without undermining confidence, they try to swap their overinflated-soon to be bankrupt- shares for something not totally full of air…
    Mukesh is trying this with a chemical company in the us.
    This is not to say that the message of the above article is wrong, yes India does have a problem with justice…
    -Timur

  • 27. Rambhupal  |  January 8th, 2010 at 1:45 pm

    Its true that the Businessmen shaking hands with politicians has gained momentum undoubtedly with Reliance Corporation especially with the older brother Mukesh ambani who invovls in political lobbying, no one knows the deals of either Y.S.R.or Sonia Gandhi, but the state of Andhra pradesh has lost a Great Reformer.
    what ever the story behind, is this the so called social responcibility of corporates… its too shameful… come on india wake up!!!

  • 28. anonimous  |  January 8th, 2010 at 11:20 pm

    Please remove this shit first.
    I don’t know why this DAMID monster, base less, fucking article is posted. This is most sensitive issue. Don’t try to play with emotions of Andhra Pradesh people.
    This issue is being assigned to the CBI, don’t try to blame yourself.

  • 29. Timur  |  January 9th, 2010 at 5:03 am

    A follow up. Articles such as these which go after the corrupt but productive elements of society are greatly detrimental to the current order. The ‘citizens’ going after the reliance offices are probably paid political hooligans. In short corrupt and unproductive. If the exiled would open an office in Hyderabad now that they are famous, I would be willing to show that for a few bottles of country liquor, am mob can be promptly assembled to rid the country of ‘western cultural influence’.
    Going after reliance is like going after a tax evader in a prison full of murder convicts.
    -Timur

  • 30. Roger Gilbert  |  January 9th, 2010 at 11:40 am

    I agree with Rickey Bobbery…….He is right…..u r jealous of Ambani brothers Ames….thats y u r writing all these bull shit Fantasy works….n u want people to read ur “dreamworks” like a detective story……Shame on u…..people like uu degraded Journalism

  • 31. Zhu Bajie  |  October 14th, 2010 at 2:41 pm

    “When will the Indian Mao arrive?”

    Indian Maoists are quite active! Read up on the Naxalites!

  • 32. Zhu Bajie  |  October 14th, 2010 at 2:43 pm

    “X: is not the Summers person then guilty by association?”

    Do you know the proverb, “lie down with dogs, get up with fleas”?


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