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The John Lipcourt scandal, also known as the Gas-for-Guns scandal, was a major political scandal that emerged in 1991 and continued into the Presidential election year of 1992, negatively affecting Robert Redford's reelection campaign and damaging the positive image the National Party had worked hard to foster during its previous ten years in the White House. The scandal shed light on a "gas-for-guns" deal that members of the US State Department had approved of when it was suggested by Pentagon officials, and involved arming Middle Eastern regimes in the wake of the Persian Gulf War to better fight against popular protests and insurrection following the Arab Coalition's humiliating defeat in return for generously marked-down rates on oil imports and drilling rights in offshore territories.
The scandal resulted in a much-publicized trial in the fall of 1991, brought Robert Redford's approval rating as low as 41%, and, along with Redford's already-infamous "golf incident" in 1989 and the pains of a severe recession, is accredited with dooming Redford's reelection bid in 1992. The scandal and subsequent investigation also helped usher in the "era of cynicism" that permeated government in the 1990's, and the phrase "How much did the President know, and when did he know it?" became a part of the popular lexicon.
Progression of Scandal
Result of Investigation and Convictions
The Congressional Special Committee headed by Representative Dean Blackthorne (D-MA) and Senator Bruce Springsteen (D-NJ) concluded that sales of weapons from the Pentagon had covertly been sold without Congressional permission (which was expressly forbidden by the 1977 International Armaments Proliferation Act, which would not expire until 2002). The committee also concluded that, after a "cut-and-dry investigation," they had uncovered evidence of an attempted cover-up by the Defense Department and that John Lipcourt had committed perjury in 1990 when he denied the sale of guns to Arabia, Syria, Egypt or Oman in front of the Senate Defense Committee.
After their investigation, however, the Congress was unable to find significant evidence of corruption amongst government officials, laying to rest claims by members of the media and watchdog groups that members of the government (including Vice President George H. Bush) had used favorable agreements for inexpensive and lucrative single-bid contracts and transferred them to oil companies such as Petrocon, Texoil and Energenesis. The Congressional panel disputed the notion that the oil companies themselves were directly involved in the sales of the deals - it even suggested that the purpose of the sales was initially intended as a Cold War maneuver, to attempt to gain leverage on France through directly manipulating oil markets.
State Department Investigation
White House Investigation
The Blackthorne-Springsteen Committee concluded that the Redford White House was aware of the business of the State Department but had not authorized it, and that the White House had not engaged in the cover-up. Senator John Brock (N-SE) commended President Redford for his transferral of sensitive White House internal documents to federal investigators and for his transparency throughout the trial.
While many in the media had cried for the head of Vice President Bush, claiming that he had authorized the whole deal to help the oil company run by sons George W. Bush and Neill Bush. However, both of the Bush sons testified that their company, Lonestar Petroleum and Gas Resources (LPGR) had not received any foreign bid contracts or placed any overseas bid contracts in the Middle East, and this claim was upheld by IRS auditors, the SEC and the FBI, who all concurred with the Bush testimony that the company had only placed overseas contracts in Alaskan shale fields and off of the Mexican coast since it was founded in 1978.
The obvious question was whether or not Redford knew of the illegal arms sales, and if he authorized the trade of guns for oil rights. The Congressional investigation concluded that Redford was not involved in a cover-up or had explicitly authorized the sales, but that he had been "apathetic to the level of complacency."
No members of the White House senior staff or either the President's or Vice President's personal aides were ever indicted or convicted of any crime stemming from the corruption charges.
Investigation of Private Sector
The Blackthorne-Springsteen Commission received numerous documents and affidavits from Texoil and Energenesis Petroleum, two of the three oil companies that had been suspected of being complicit in the conspiracy due to their acquisition of oil fields in Arabia and Oman during 1989 or 1990 and their construction of derricks in the Arabian Sea. A third company, Petrocon, had several executives and lawyers testify, but was never subpoenad for information directly leading to their business from 1989-91 in the Middle East. Eventually, the Congress concluded that oil executives had not directly encouraged or participated in the sale of weapons, and that Texoil had accepted a "surprisingly generous" bid from the Arabian government in 1991 without knowing that the State Department had stipulated that Arabia do so under threat of withdrawing financial support and sale of armaments.