Wednesday, September 23, 2020

JOE BIDEN AND RED CHINA - HEY, THEY'RE TIGHT AND BELONG IN THE SAME JAIL CELL

 

Senate Report: Biden Family Bought $100K of ‘Extravagant Items’ with China-Linked Credit Cards

joe biden, hunter biden
AP Photo/Nick Wass
3:51

Democrat presidential candidate Joe Biden’s family members bought more than $100,000 worth of “extravagant items” in 2017 using a line of credit linked to associates of the Chinese communist government.

bombshell report by the Senate Homeland Security and Governmental Affairs Committee and Senate Finance Committee details numerous cases in which Biden’s son, Hunter Biden, and family members have deep ties to the Chinese communist government, Russia, Ukraine, and Kazakhstan.

In one instance, the Senate report states that on September 8, 2017, Hunter Biden and Chinese national Gongwen Dong — with ties to the Chinese communist government — opened a bank account to fund a more than $100,000 “global spending spree” for members of the Biden family.

“Hunter Biden and Gongwen Dong, a Chinese national who has reportedly executed transactions for limited liability companies controlled by Ye Jianming, applied to a bank and opened a line of credit under the business name Hudson West III LLC (Hudson West III),” the Senate report states. The report continues:

Hunter Biden, James Biden, and James Biden’s wife, Sara Biden, were all authorized users of credit cards associated with the account. The Bidens subsequently used the credit cards they opened to purchase $101,291.46 worth of extravagant items, including airline tickets and multiple items at Apple Inc. stores, pharmacies, hotels, and restaurants. The cards were collateralized by transferring $99,000 from a Hudson West III account to a separate account, where the funds were held until the cards were closed. The transaction was identified for potential financial criminal activity. [Emphasis added]

According to the Senate report, Hunter Biden held one of the credit cards while James Biden and Sara Biden, Biden’s brother and sister-in-law, held three cards.

 

(Senate Homeland Security and Governmental Affairs Committee and Senate Finance Committee)

The Senate report states that Hudson West III LLC was first incorporated on April 19, 2016, more than a year before the China-linked line of credit was opened to fund purchases made by Hunter Biden, James Biden, and Sara Biden.

Hudson West III LLC had a number of business dealings with companies and Chinese nationals linked to the Chinese communist government, the Senate report states:

On Aug. 8, 2017, CEFC Infrastructure Investment wired $5 million to the bank account for Hudson West III. These funds may have originated from a loan issued from the account of a company called Northern International Capital Holdings, a Hong Kong-based investment company identified at one time as a “substantial shareholder” in CEFC International Limited along with Ye. It is unclear whether Hunter Biden was half-owner of Hudson West III at that time. However, starting on Aug. 8, the same day the $5 million was received, and continuing through Sept. 25, 2018, Hudson West III sent frequent payments to Owasco, Hunter Biden’s firmThese payments, which were described as consulting fees, reached $4,790,375.25 in just over a year. [Emphasis added]

The Senate report also accuses Hunter Biden of paying Russian and Eastern European women who are linked to prostitution or a human trafficking ring. Another detail reveals that one of Russia’s most powerful oligarchs paid Hunter Biden’s private equity firm $3.5 million in 2014.

John Binder is a reporter for Breitbart News. Follow him on Twitter at @JxhnBinder


A Biden Ally and J Street Vice Chair’s Company Offers Access to Senior Chinese Officials

And what it says about the Democrat Party.

Wed Sep 16, 2020 

Daniel Greenfield

Daniel Greenfield, a Shillman Journalism Fellow at the Freedom Center, is an investigative journalist and writer focusing on the radical Left and Islamic terrorism.

“Meet and build relationships with China’s senior governmental and private sector leaders in your chosen area of business,” the invitation on the site of Empire Global Ventures read. “Join us for elite curated experiences with the people who decide the future of China’s tech sector, craft and enforce its regulations, dominate its industries and chart its path forward.”

The only thing more intriguing than the invitation may be Empire Global Ventures whose CEO is also the Vice Chair of the board of J Street and a prominent Democrat donor and fundraiser.

When Governor Andrew Cuomo split up with his celebrity girlfriend after over a decade of shacking up together, media accounts made sure to mention the role of Alexandra Stanto in introducing the formerly happy couple.

As the CEO of Empire Global Ventures, Stanton has come a long way since then. But the name of her company closely echoes Empire State Development, an arm of the New York State government, where Stanton had served as chief of staff from 2006 through 2008.

Stanton had worked for David Patterson, back when he was in the State Senate. Then Eliot Spitzer, New York's megalomaniacal Attorney General picked Patterson, the black and partly blind Senate Majority Leader, as his running mate, to score with voters.

Patterson was never expected to actually take the governor's office, but then Spitzer imploded, after allegations of prostitution and thuggish behavior, and was forced to step down.

Stanton, who had been Patterson’s deputy campaign manager for policy, and Sam Natapoff, her husband, had scored six figure gigs with Empire State Development, with Sam earning the grand title of, “Senior Advisor to the Governor of New York State for International Commerce.” Today, Sam is the president of Empire Global Ventures and writes editorials attacking President Trump over his work to help Americans resist China’s abusive trade policies.

Stanton and her husband had been pumping sizable amounts of money into Paterson and Cuomo's war chests. Stanton alone had donated $10,000 to both Paterson and Cuomo. But Stanton’s fundraising soon went national with an Obama fundraiser running as much as $20,000 a ticket. And Obama named Stanton a general trustee of the Kennedy Center.

The money has kept on rolling out with Stanton donating thousands to Mayor Bill de Blasio and scoring an $8,000 per month consulting job for City Hall.

By then, Stanton had become the vice chair of J Street: a key anti-Israel lobby group.

Alexandra Stanton has spent the last 12 years serving as Vice Chair of the anti-Israel group originally funded by George Soros and has, in media accounts, been dubbed a “Jewish leader.”

Alexandra is the granddaughter of Hellenic Lines shipping tycoon Pericles Callimanopulos. The Greek tycoon’s funeral service was held at the Greek Cathedral of the Holy Trinity in Manhattan.

Pericles' daughter and Alexandra's mother, Domna Stanton, a feminist academic who is a longtime board member of Human Rights Watch and had a prominent role at Planned Parenthood, was named by De Blasio as one of New York City’s human rights commissioners.

Domna and her husband Frank, a successful entrepreneur who had made his mark helping his brother Arthur import the Volkswagen Beetle to America and trying to launch an early VCR, showed up in Tom Wolfe's famously mocking profile of Leonard Bernstein's Black Panther party.

The Stanton family has connections by marriage to socialites from New York to D.C. and Domna’s Hamptons garden parties are required attendance for celebrities and the smart set.

Alexandra Stanton has kept up the tradition with cocktail parties attended by none other than House Speaker Nancy Pelosi. She was on the host committee for Hillary Clinton’s million dollar fundraiser for Bill de Blasio, and, more recently, she took part in a Joe Biden fundraiser.

When Pelosi spoke at the anti-Israel J Street’s gala, she thanked Stanton by name.

And when Obama descended into ugly antisemitic attacks against Jewish opponents of the Iran Deal, Alexandra Stanton was there to claim that he “has a right to combat what he thinks are campaigns against him laden with non-facts and offensive statements.”

But Alexandra has a lot of irons in the fire besides campaigning against the Jewish State.

These days, Stanton has also been marketing Little Lives PPE face shields for children, scoring a FOX profile, who described the politically connected Democrat, as a "mom". The Wall Street Journal mentioned Stanton's face shields for children in its article on reopening schools alongside a quote from Randi Weingarten, the head of the American Federation of Teachers.

The American Federation of Teachers, the country's largest network of Democrat teachers' unions, had its PPE purchases facilitated by Stanton and Empire Global Ventures.

Randi Weingarten, the AFT's head, who recently faced criticism for claiming that it's not safe for teachers to go back to school even while attending Al Sharpton's 50,000 strong rally in D.C., was described as knowing "people at Empire Global Ventures, a business development firm with experience in China, where much of the world’s PPE is manufactured."

This wasn't the only strange intersection between Empire, Democrats, and the coronavirus.

The sister-in-law of Chris Cuomo, a CNN anchor and Governor Cuomo's brother, works for Empire Global Ventures, and has been touting hypochlorous acid from Y2X Life Sciences as an answer to the coronavirus. Cuomo's sister-in-law claimed that spraying hypochlorous acid could keep businesses safe from the virus. Alexandra Stanton and her husband are listed as Y2X Life Sciences advisers, along with Matt Kennedy, RFK’s grandson and Joe Kennedy III’s brother, who sits on the boards of Kennedy institutions, and had held down various positions in the Obama administration, along with Dick Gephardt, the former Democrat House Majority Leader.

In July, a job posting for Empire Global Ventures described it as a medical products company.

What does Empire Global Ventures actually do and whom does it know in China?

An invitation on the company's site offers the opportunity to meet with "China’s senior governmental and private sector leaders" and "China’s key decision makers".

Who are these senior government officials and how does Empire have access to them?

These are all questions that the media might be asking considering Alexandra Stanton’s long history of access to top Democrat officials, including Obama and Biden, the large checks, and Stanton’s key role at J Street, a domestic group whose funding came from George Soros and, allegedly, Bill Benter, a gambler operating out of Hong Kong. They choose not to ask them.

Alexandra Stanton’s career shows why people join the Democrats, not because they want a fairer world, but because family and political connections pave the path to success, not for the poor, but for wealthy families that are already exceedingly well connected in that world.

The granddaughter of a Greek shipping tycoon became a Democrat operative and fundraiser (and Jewish leader), and while her company claims close access to the officials of a foreign government, she has a powerful position in a foreign policy lobby giving her access to Biden.

Considering Biden’s own longstanding and problematic connections to China, and the role that the Communist dictatorship is allegedly playing in boosting his campaign, this is troubling.

It’s a good thing that the media isn’t interested in asking any tough questions.

 


TRUMP'S CRONY CAPITALSIM

 

Trump’s Vaccine Czar Refuses to Give Up Stock in Drug Company Involved in His Government Role

The administration calls Moncef Slaoui, who leads its vaccine race, a “contractor” to sidestep rules against personally profiting from government positions. Slaoui owns $10 million in stock of a company working with his team to develop a vaccine.

Moncef Slaoui, the top scientist in the Trump administration’s plan to develop a COVID-19 vaccine, has insisted on keeping his investments in his former company, GlaxoSmithKline. (Drew Angerer/Getty Images)

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The former pharmaceutical executive tapped by President Donald Trump to lead the administration’s race to a COVID-19 vaccine is refusing to give up investments that stand to benefit from his work — at least during his lifetime.

The executive, Moncef Slaoui, is the top scientist on Operation Warp Speed, the administration’s effort to develop a coronavirus vaccine in record time. Federal law requires government officials to disclose their personal finances and divest any holdings relating to their work, but Slaoui said he wouldn’t take the job under those conditions. So the administration said it’s treating him as a contractor. Contractors aren’t bound by the same ethics rules but also aren’t supposed to wield as much authority as full employees.

Slaoui agreed to sell stock worth $12 million and resign from the board of Moderna, the developer of a leading potential vaccine. But Slaoui insisted on keeping his roughly $10 million stake in his former company, GlaxoSmithKline, another contender in the Operation Warp Speed vaccine race. “I won’t leave those shares because that’s my retirement,” he has said. GlaxoSmithKline, working with Sanofi, has started human trials for a coronavirus vaccine using similar technology to Sanofi’s flu shot. It is supported by up to $2.1 billion from the U.S. government.

As a concession, Slaoui committed to donating any increase in the value of his holdings to the National Institutes of Health.

But Democrats on the House Committee on the Coronavirus called the commitment “toothless.” According to newly released records from the committee, Slaoui’s contract with the government specifies that the donation “may occur on the last death of the employee and his or her spouse.” Slaoui is 61 and his wife, Kristen Belmonte, is 50.

“That means he’s going to live out his life with those profits,” said Craig Holman, a lobbyist with the advocacy group Public Citizen who has filed multiple ethics complaints about Slaoui’s service. “It’s so clearly an all-out evasion” of the law against conflicts of interest, Holman said.

In addition, the contract’s requirement is further complicated by measuring the increase in the stock’s value against a drug industry index, not the outright change in the stock itself. As it happens, since Slaoui joined Operation Warp Speed, both GlaxoSmithKline and the specified drug industry index have declined.

Slaoui declined to be interviewed through a spokeswoman. “I have a personal compass in ethics and people who know me personally know that,” Slaoui said in a July podcast interview with Michael Caputo, the Department of Health and Human Services spokesman who subsequently left the agency after an incendiary Facebook rant accusing government scientists of “sedition.”

“It’s been extremely painful for me that anybody would even think that I took this job to enrich myself or my former colleagues,” Slaoui said.

The White House declined to comment. An HHS spokeswoman said agency ethics officers determined that Slaoui complied with the department’s rules through his contractor status, divestiture and board resignations.

“The American people are fortunate to have him as a leader of President Trump’s effort to discover vaccines, therapeutics and diagnostics to defeat the coronavirus,” the spokeswoman, Natalie Baldassarre, said in an emailed statement. During his time at GlaxoSmithKline, Slaoui led the development of several new vaccines, including ones to prevent cervical cancer, malaria and shingles.

HHS previously said Slaoui “does not have any additional stock holdings in any other companies involved in vaccines, therapeutics and diagnostic products developed to combat COVID-19.” But in addition to Slaoui’s retained GlaxoSmithKline shares, the records obtained by the House Democrats revealed he has a holding in another biotechnology company, Lonza Group, that wasn’t previously disclosed. The company has a contract with Moderna to manufacture its coronavirus vaccine. Slaoui resigned from Lonza’s board before joining Operation Warp Speed but kept his shares. The records released by the House committee do not show how much the stake was worth.

“Documents recently obtained by the Select Subcommittee have heightened concerns that these advisors may have significant undisclosed financial conflicts of interest that, contrary to the administration’s public statements, have not been adequately addressed,” the committee’s chairman, Rep. James E. Clyburn, D-S.C., said in a Sept. 21 letter to Advanced Decision Vectors LLC, a consulting firm that received the contract for the government’s work with Slaoui and other Operation Warp Speed advisers. Clyburn said the committee will subpoena the company if it doesn’t voluntarily provide more documents.

ADV’s CEO, David Harris, didn’t respond to messages seeking comment.

Congress should strengthen the federal ethics laws to root out this kind of corruption,” Sen. Elizabeth Warren, D-Mass., said at a hearing on Wednesday. “And the first person to be fired should be Dr. Slaoui. The American people deserve to know that COVID-19 decisions are based on science and not on personal greed.”

Clyburn’s committee also released records that he said suggested conflicts of interest among three other Operation Warp Speed advisers: William ErhardtRachel Harrigan and Carlo de Notaristefani. According to the documents, HHS certified that the companies in which the advisers have investments “are not involved in vaccines, therapeutics and diagnostic products developed to combat pandemic COVID-19.” However, several of the holdings that the advisers listed are in companies working on vaccines, treatments and tests for the coronavirus.

According to the records, Erhardt and Harrigan own shares of Pfizer, the current coronavirus vaccine front-runner with a $2 billion preorder from the government. Erhardt also listed holdings in Thermo Fisher Scientific, a diagnostics manufacturer that has received millions from the federal government for coronavirus testing materials; PhaseBio Pharmaceuticals, which has two clinical trials of drugs that could treat COVID-19; and Incyte Pharmaceuticals, which is also studying a possible treatment. The third adviser, de Notaristefani, reported a financial interest in Teva Pharmaceuticals, a manufacturer of the generic drug hydroxychloroquine touted by Trump as a coronavirus treatment despite lacking scientific support.

“HHS appears to be permitting these advisors to keep these holdings, along with any profits, by certifying that ‘the Government has determined’ the companies ‘are not involved in vaccines, therapeutics and diagnostic products developed to combat pandemic COVID-19,’” Clyburn wrote in his letter. “These certifications appear to be inaccurate.”

Baldassarre declined to comment on the certifications or answer other specific questions for this article.

ProPublica’s board chairman, Paul Sagan, is a member of Moderna’s board and a company stockholder.

CALIFORNIA, THE POLLUTED - But Chevron makes good money off the deal!

 

Oil Companies Are Profiting From Illegal Spills. And California Lets Them.

California may be a global leader on combating climate change, but state regulators have allowed companies like Chevron to make millions from inland oil spills that can endanger workers and damage the environment.

A river of oil spills across the Cymric field near McKittrick, California, in June 2019. (Obtained by The Desert Sun and ProPublica via a Public Records Act request)

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This story was co-published with The Desert Sun, a member of the ProPublica Local Reporting Network.

In May 2019, workers in California’s Central Valley struggled to seal a broken oil well. It was one of thousands of aging wells that crowd the dusty foothills three hours from the coast, where Chevron and other companies inject steam at high pressure to loosen up heavy crude. Suddenly, oil shot out of the bare ground nearby.

Chevron corralled the oil in a dry streambed, and within days the flow petered out. But it resumed with a vengeance a month later. By July, a sticky, shimmering stream of crude and brine oozed through the steep ravine.

Workers and wildlife rescuers couldn’t immediately approach the site — it was 400 degrees underground, and if the earth exploded or gave way, they might be scalded or drown in boiling fluids. Dizzying, potentially toxic fumes filled the scorching summer air. Lights strobed through the night and propane cannons fired to ward off rare burrowing owls, tiny San Joaquin kit foxes, antelope squirrels and other wildlife.

An aerial view of the Chevron spill in the Cymric field on July 13, 2019. (Obtained by ProPublica and The Desert Sun via a Public Records Act request)

Over four months, more than 1.2 million gallons of oil and wastewater ran down the gully.

California had declared these dangerous inland spills illegal that spring. They are known as “surface expressions,” and the Cymric field was a hot spot. Half a dozen spills and a massive well blowout had occurred there since 1999. This time, faced with news headlines and a visit by Gov. Gavin Newsom to the site, officials with the California Geologic Energy Management Division, or CalGEM — the main state agency overseeing the petroleum industry — ordered Chevron to stop the flow. Regulators later levied a $2.7 million fine on the company.

Instead, Chevron profited.

Amid the noise and heat, trucks arrived daily to vacuum out the oil from a safe distance. It was refined, sold and shipped to corner gas stations, bringing the company $399,000, according to state records. Chevron appealed the fine, saying while “we fully accept — and take responsibility for — our actions,” it does not believe the spill, known as Cymric 1Y, posed a threat to human health. The company has yet to pay, and CalGEM has not moved forward with an appeal hearing.

Along with being a global leader on addressing climate change, California is the seventh-largest producer of oil in the nation. And across some of its largest oil fields, companies have for decades turned spills into profits, garnering millions of dollars from surface expressions that can foul sensitive habitats and endanger workers, an investigation by The Desert Sun and ProPublica has found.

California Oil Spills Earn Companies Millions

For years, companies have corralled spilling oil in four large fields and sold it.

Shoshana Gordon/ProPublica. Source: California Department of Conservation

Since the new regulations outlawed surface expressions last year, more than two dozen have occurred in Kern County, the heart of the state’s oil industry. In the Cymric field, three spills are still running, state officials say, including one that’s spilled nearly twice as much as the one for which Chevron was fined.

Dozens of older spills have also flowed for years, the investigation found. The largest, just around the bend from Cymric 1Y, started in 2003. The site, also operated by Chevron and dubbed GS-5, has since produced more than 16.8 million gallons of oil and about 70 million gallons of wastewater, a company spokeswoman said. That tops the amount of oil spilled by the Exxon Valdez, the infamous tanker that ran aground in Alaska in 1989. In the last three years alone, the crude collected from GS-5 has generated an estimated $11.6 million, according to an analysis of production data provided by the state.

Chevron and state regulators say they’re trying to shut down GS-5 and they have reduced the flow by 90%. It was spilling approximately 15,000 to 23,000 gallons of fluid a day in early February, the latest date for which the state provided detailed data. Ten to 15% of that was oil, officials said.

“We take our responsibility to operate safely and in a manner that protects public health, the communities where we operate and the environment very seriously,” company spokeswoman Veronica Flores-Paniagua said. “We remain committed to stopping and preventing seeps consistent with the updated state regulations.”

But a close review of the state’s new rules shows they contain several large loopholes that keep oil from surface expressions flowing — the result of years of lobbying and pushback by the energy industry.

Vacuum trucks suck thousands of gallons of oil and wastewater a day out of the GS-5 spill, near McKittrick. GS-5 is one of the largest and longest-running surface expressions. (Jay Calderon/The Desert Sun)

For example, over stiff opposition from environmentalists, state officials explicitly allowed high-pressure “steam fracking,” a controversial extraction technique that has been linked to surface expressions. And when spills break out, there is nothing stopping producers from turning them into moneymakers. In a practice known as “containment,” companies can corral the spills with dirt berms, netting, pipes or drains; vacuum out the crude; refine it and sell it. The 2019 regulations spell out steps companies must take to try to halt the spills — mainly temporarily ceasing steam injection — but there are no deadlines for stopping them and restoring the sites.

The new rules also largely exempt “low energy” surface expressions related to oil production. According to a review of state and local records, the exemption appears to cover more than 70 older spills that are still revenue generators.

A cache of internal documents, photos and video obtained by The Desert Sun and ProPublica shows that over the past quarter century, CalGEM has routinely allowed oil companies to contain and commercialize surface expressions, despite warnings by staffers about environmental and human harm. The agency acknowledges that more than 160 containment structures have been built to corral spills since the late 1990s.

The inland spills typically draw little attention, unlike major marine events that garner national headlines.

But hundreds of them have occurred, records show. Geysers of oil, rock and mud have shot skyward 100 feet, and slopes have collapsed under smoking waterfalls of crude and wastewater. In one case, a worker died; in another, an employee had to wrench his ankle away from a sudden sinkhole; and a third had to abandon his truck as a dark stain of oil mushroomed beneath it.

A Berry Petroleum Co. surface expression in the Midway-Sunset Oil Field in August 2011. (Obtained by ProPublica and The Desert Sun via a Public Records Act request)

“Keep in mind that these eruptions are not at well sites,” wrote then-Oil and Gas Supervisor Elena Miller in a 2011 email to her boss. “These are locations where the earth opens up and spews fluids, solids and gases.”

Oil company representatives defend their practices, saying surface expressions mirror natural seeps of crude and come with harvesting a product that provides thousands of well-paying jobs and fuels car-centric California. Containing the spills, they added, also costs money. Chevron, for instance, told lawmakers this year that it had spent $9 million to try to halt spills in the Cymric field.

Environmentalists who fought for the regulations are furious about the loopholes and the continued spills.

“It’s completely obscene that oil companies can cause an oil spill and then profit off it,” said Hollin Kretzmann, an attorney with the Center for Biological Diversity, an environmental nonprofit organization.

CalGEM could not provide a full accounting of how much oil has spilled from surface expressions, even though the 2019 regulations explicitly require that oil companies report production numbers. The agency also declined to provide spill maps and plans mandated by the new rules, citing, in part, “multiple ongoing legal investigations,” including a departmental probe of the Cymric spills and ongoing litigation between Chevron and another company involving the field where the worker died.

“We are greatly reducing the problem. We continue to make progress, but more work is needed,” state Oil and Gas Supervisor Uduak-Joe Ntuk said in a statement. He noted that the practices had developed over decades, and that the new regulations were crafted under his predecessor and then-Gov. Jerry Brown.

“This Administration has made it clear that surface expressions are unacceptable and will not be tolerated as the cost of doing business,” he said.

After visiting Chevron’s Cymric 1Y spill site last year, Newsom pledged to “tighten things up.” In November, his administration placed a statewide moratorium on new permits for steam fracking, a suspected root cause of many surface expressions, and hired scientists with the Lawrence Livermore National Laboratory to study whether the method can be used safely.

Ntuk said that while that review is in progress, the agency is cracking down. He has the power to fine companies $25,000 a day for ongoing spills. But other than the one, unpaid fine against Chevron, he has not imposed any financial penalties for surface expressions, instead issuing “notices of violation” — citations that Ntuk has compared to “parking tickets.” He said that approach is working; many spills have stopped and some companies are working proactively to seal abandoned, often damaged wells to prevent future spills.

Companies with existing permits, however, are free to keep steam fracking — and to scoop up any oil that cracks the surface.

Some experts say the current reality is reminiscent of the 19th-century oil rush.

“It reminds me of the industry back when you’re watching ‘There Will Be Blood’ and they used to let this stuff explode out of the ground and collect it,” said Deborah Gordon, a Brown University senior fellow, who researched California’s Midway-Sunset field, where many surface spills occur. Her group concluded it emitted more greenhouse gases than any oil field in the nation. “This is not where this industry needs to be.”

After 150 Years, California’s Oil Gets Harder to Extract

Oil production in California began in the 1850s, just as its famous gold rush was petering out. Tantalized by visible natural “seeps,” companies large and small drilled wells across the state, hoping to hit paydirt. While profits could be big, so could the spills.

In 1910, a Kern County wellhead blew out. Oil skyrocketed from the ground. Over 18 months, the Lakeview Gusher spilled 395 million gallons, creating a pool so deep and wide that men rowed boats across it. It still holds the record for the largest oil spill in U.S. history, dwarfing BP’s Deepwater Horizon disaster, which leaked 210 million gallons into the Gulf of Mexico.

Top, the Lakeview Gusher in 1910. Above, men row on the lake of oil created by the spill. (San Joaquin Geological Society)

The California Division of Oil and Gas — the precursor to today’s CalGEM — was formed in 1915. Until this year, the agency’s primary mission was clear: Maximize the production of petroleum and other energy resources. That included helping companies relocate water that interfered with oil, both freshwater supplies and the briny waste that gushes from wells along with crude.

After decades of extraction, pumping California’s increasingly tarry reserves became tougher. Much of it was locked underground in diatomites — tightly packed layers of ancient, tiny sea skeletons whose algal innards compressed over milleniums into gooey crude. (Cat litter is made of diatomaceous earth scraped off Kern County hillsides.) By the 1960s, researchers discovered that flooding the subterranean reservoirs with steam or injecting it in cycles, through a process known as “huff and puff,” worked well.

The huff phase involves injecting scalding steam down wellbores, then letting the heat melt the tar. The puff portion refers to softened crude, thin as heated maple syrup, rising up through production wells. When the flow slows, another steam cycle begins. The technique is called “cyclic steaming.”

By the late 1990s, companies were using a supercharged version of it: steam fracking. Producers injected steam down well bores at pressures high enough to crack brittle underground formations so oil could ooze upward. Nearly half of the oil in the state is produced from cyclic steaming, according to a University of California, Berkeley, report issued in April.

How Cyclic Steaming Can Create Pools of Boiling Oil

This example is modified from a model of a geographical cross section of the Midway-Sunset Oil Field by Ahinoam Pollack, Stanford University, published in a March 2020 study. (Lucas Waldron/ProPublica)

But blasting old, often damaged wells with steam had an unintended side effect: surface expressions. Like underground tea kettles blowing their tops, seeps of gas, mud, oil and rock erupted in a dozen oil fields. Five companies reported scores of spills over more than 20 years. Chevron alone logged 64 surface expressions between 1997 and 2010, according to a report it sent to CalGEM.

Typically, CalGEM has told oil field operators to “shut in” wells near a surface expression, meaning temporarily cease nearby steam injection or drilling. Usually, the spill would stop or slow within days. If it didn’t, the agency has ordered them to stop steaming in an ever-larger radius. But some spots sprang leaks again and again or spilled large amounts for years. With CalGEM’s approval, companies turned these into de facto — but permanent — production sites, even in creeks and ravines supposedly protected by environmental laws.

CalGEM got revenue too — the agency is completely funded by the industry it regulates, and this year will receive 67 cents for every barrel of oil produced.

“The Earth Had Literally Cracked Open”

U.S. House Minority Leader Kevin McCarthy, a Republican whose district includes Kern County oil fields, once called Sandy Creek a “ditch” and claimed it hadn’t rained there in 30 years. The creek, which in the 1800s ran miles from the Temblor Mountains to the then-vast Buena Vista Lake, is now dry most of the year.

But when winter rains fall, the creek flows. State biologists documented sections that are home to breeding western toads, cliff swallows, California quail, kildeer and other birds passing through on long migrations.

In 1998, near Sandy Creek’s headwaters, Aera Energy and two other companies began injecting steam into wells in the soft dirt. A web of surface expressions quickly developed, with continuous oil pools forming in the streambed. They’re still flowing 22 years later.

Rather than shutting down production, Aera reshaped the landscape. It installed a 400-foot-long metal pipe, diverting rainwater from its natural path so the crude could continue to flow into the creekbed. Although the spills were still running, they were considered contained; the oil was confined to open-air pools. Nets were slung over them to prevent birds from flying in.

Aera and TRC, another oil company that leased adjoining property, periodically pumped out the oil and sold it. State oil regulators later said in an internal report that Aera was producing about 3,000 gallons of crude and waste a day from Sandy Creek.

Under state laws, it’s illegal to discharge any hazardous substance into a creek or streambed, dry or not. The California Department of Fish and Wildlife, which enforces those laws, said it can issue temporary permits for cleanup activities, but not for permanent alterations of a streambed. “The Department sees oil spills as emergencies, and its role is to respond to minimize harm to wildlife and clean up ASAP,” a spokesman told The Desert Sun and ProPublica. The department did not respond to questions about whether it has ever cited or fined companies that have spilled oil and altered the streambed in Sandy Creek.

TRC did not respond to requests for comment. Aera, which has since sold its Sandy Creek leases, declined to comment on past surface expressions there, but it said in a statement that the company “uses a combination of innovation, engineering, and technology to ensure that we are producing California’s energy under the most environmentally responsible and safe conditions in the world.”

The containment approach wasn’t foolproof.

In fall 2010, heavy rains sparked flash floods, dismembering the metal culvert. Days before Christmas, rains fell again. The creek reclaimed its natural channel, shoving crude and wastewater 10 miles downstream, through the town of Taft and out the other end.

The aftermath of flash floods in Sandy Creek, where Aera had installed a metal culvert to divert rainwater from its natural path. (Obtained by ProPublica and The Desert Sun via a Public Records Act request)

Bruce Joab, a California Fish and Wildlife senior scientist who assesses the environmental damage wreaked by oil spills, still recalls Sandy Creek after the storms.

“I was actually shocked at how torn up that upper end of the watershed was,” Joab said. Rusted pipes, steam manifolds and other heavy debris littered the bed. “It was hard to distinguish where the creek began and the oil operation began.”

Field warden colleagues who’d seen many surface expressions warned him to watch his step.

“There were places where the earth had literally cracked open and oil was spilling out,” he recalled.

When spills occur, CalGEM employees work side by side with oil companies to investigate the causes. Chevron officials, for instance, were part of the team that responded to and probed the causes of last summer’s Cymric 1Y spill. Ntuk said that approach is required by state law.

In Sandy Creek, a CalGEM staffer documented the flood damage and spills with dozens of photographs and said in a lengthy report to supervisors that the surface expressions there were caused by steam operations. CalGEM, however, did not include Sandy Creek in a tally of surface expressions it provided to The Desert Sun and ProPublica, saying the situation is “still under evaluation and has not yet been categorized.” CalGEM provided no evidence it has ever cited or fined companies for damage after the 2010 floods or after more oily floods in 2016.

Sandy Creek is just one place where companies have constructed elaborate containment structures.

They can carry a heavy cost.