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the 1968 presidential race. Hubert Humphrey won the state but lost the election. Shortly after Nixon beat Humphrey, he appointed Clements to work on a commission that analyzed the workings of the Defense Department. In 1972, Clements backed Nixon again, co-chairing the Texas chapter of Nixon’s Committee to Re-Elect the President. After Nixon crushed the Democratic presidential nominee, George McGovern, in the November 1972 election, he appointed Clements deputy secretary of defense. In 1973, as Clements began preparing for his new government job, he did not sell his Sedco stock or put it into a blind trust. Instead, he kept the stock and turned over the running of Sedco to his son, Gill Clements. Sedco’s ties to the Iranians grew closer during Clements’s tenure as deputy defense secretary. In November of 1973, the Export-Import Bank, an export credit agency which is backed by the U.S. Treasury, approved a direct loan of $11.25 million to Sediran Drilling Company, a new company that was half owned by Sedco. The remainder was owned by Bazargani 20 Import Bank loan, part of the flood of American financing that flowed into Iran in the years before the Shah was deposed, allowed Sediran to purchase eight new drilling rigs. Between 1968 and 1979, Ex-Im provided nearly $4.5 billion in financing and insurance to Iran. Although the Pahlavi Foundation did some good worksit gave pensions to distant relatives of the royal family and operated boarding houses, nurseries, and youth centersit also was used to enrich the Shah. He used the foundation to invest in banks, hotels, casinos, resorts, sugar mills, cement plants, and even a skyscraper in New York. Its assets were also used to maintain good political connections. In addition to its ties to Clements, the Pahlavi Foundation had a former secretary of state, William P. Rogers, on its payroll to act as a consultant. By some estimates, the Shah’s holdings through the Pahlavi Foundation and other entities were worth as much as $25 billion. Shortly after Sediran got the loan from the Export-Import Bank, it was given a long-term drilling contract by the Western oil consortium working in Iran. Sedco too continued getting big contracts. In 1975, a Sedco subsidiary was given build a pipeline from Esfahan to Tehran. The contract called for Sedco to do the engineering, procurement, construction, and a year of maintenance on the pipeline. The drilling contract was lucrative, too. In 1978, Sedco’s Iranian operations had nearly $60 million in revenue. That year, about 15 percent of Sedco’s $390 million in revenues came from its Iranian operations. There was nothing unusual or untoward about doing business with the Pahlavi Foundation, says Clements. “My attitude was we should turn it over to the local people as soon as we can and get the hell out,” he told me in the summer of 2003. When asked how the Export-Import Bank became involved in the deal, Clements began explaining that the process for cre ating Sediran started before he went to the Pentagon. “Contracts had already been signed. The work to create Sediran had started,” he said. When asked to elaborate, he stopped short, saying, “I don’t remember all that. I’m sure whatever connection there was, it was totally unimportant.” Clements went on to say that the work Sedco was doing in the Persian Gulf was part of the Texanification of the world oil business. “Pipelines, floating drilling rigs, we were doing all those things in the Gulf of Mexico before we ever went to the Persian Gulf. We took all that technology out of the Gulf of Mexico and took it to the Persian Gulf; as did Halliburton and Brown & Root. We all did the same thing,” Clements said. “The real base of that is our engineering schools here in Texas. Whether it was Texas A&M, or Rice, or the University of Texas or SMU, all of those institutions had graduates in Kuwait, Iran, and Iraq doing the work that needed to be done.” The massive investments made by American companies like Sedco made Iran a magnet for Americans. By 1977, there were more than 20,000 Americans living in the country, including some 5,000 working in the oil industry \(the biggest continand about 13,000 dependents. Of course, not all of these were Texans, but still, by the mid1970s Tehran was looking a lot like Dallas. El Paso Natural Gas, Electronic Data Systems, Bell Helicopter, Texas Instruments, and Brown & Root were all doing big business with the Shah’s government. El Paso Natural Gas, a Texas-based energy company that owned huge pipelines to California and elsewhere, was a key part of the invasion of Iran. By 1975 it had signed on to a deal with the state-owned National Iranian Oil Company to build a $5.6 billion plant to liquefy natural gas, which would then be exported to other countries. Electronic Data Systems, the Dallas company headed by H. Ross Perot, was working on a contract to computerize Iran’s social security system. The basic contract was for $48 million. But clauses in the contract meant that EDS’s total revenue from the deal could reach $90 million. Texas Instruments was part of a group of companies building an air defense system that called for radar installations to be installed throughout the country. Cost: up to $15 billion. Bell Helicopter, which had made a fortune in Vietnam, hit another gold mine in Iran. The Shah loved anything that flew, and in the early 1970s he agreed to a contract with Bell that called for the company to build 489 helicopters, train pilots, and construct a maintenance facility in Iran. Bell managed the training by hiring about 1,500 pilots who’d flown Hueys in Vietnam. After the contract was signed, a Bell executive \(a Iran would have “the largest air mobility force in the free world next to the United States.” The total value of the contract eventually reached $1.8 billion. By the late 1970s, Bell, with 14,000 employees, was the biggest American employer in Iran. But such contracts to Bell, EDS, and other companies continued on page 19 7/2/04 THE TEXAS OBSERVER 11