Diverse Congressional Group Appeals to President Clinton to Halt PetroChina I.P.O.

(Washington, D.C.): An important new front has been opened in the campaign to stop global
“bad actors” from penetrating the U.S. capital markets: On 31 March, an astonishingly
broad-based group of 26 Members of Congress wrote President Clinton urging him to
“block any
Initial Public Offering brought to the U.S. capital markets by China National Petroleum
Company (CNPC) and/or [its subsidiary,] PetroChina, until an acceptable use of the
proceeds therefrom has been assured.”

This compelling letter (see the attached) represents an
unprecedented development in the history
of America’s debt and equity markets — particularly with respect to a deal that has not yet
come
to market. Highlights of the authors’ arguments include the following:

• “Given CNPC’s track record, it seems likely that — in purchasing these securities —
  American investors will unwittingly be underwriting activities that contravene official
  U.S. policy and its widely held principles and values.”

• “A brief review of the troubled history of this listing should immediately raise a
  red flag
  of concern. CNPC initially sought to list on the NYSE but its proposed IPO met with
  legitimate criticism on the basis that monies raised in this country would likely be diverted, at
  least in part, to the Khartoum regime in Sudan. CNPC owns a 40% stake in Sudan’s Greater
  Nile Petroleum Operating Company. The link between the revenues generated by CNPC and
  the Khartoum regime’s ability to increase the intensity and lethality of its civil war is a matter
  of record.”

• “PetroChina claimed that this IPO’s $5-7 billion in proceeds would be directed to oil and
  gas
  development in China. Assuming the veracity of this disclosure, these efforts would
  pose
  a direct threat to the population, resources and fragile environment of the Tibetan
  Plateau.”

The Bottom Line

The 26 legislators conclude with a point routinely made — and strongly endorsed — by the
Casey
Institute: “While we fully support the free flow of capital into and out of this
country’s debt
and equity markets, we nevertheless believe that raising capital from the U.S. investor
community to help underwrite the ravaging of Tibet’s natural resources is no more
acceptable than the prospect of aiding the Sudanese government’s genocidal civil war.”

Tomorrow, on the eve of PetroChina’s first day of trading on the New York Stock Exchange,
a
coalition of diverse public policy and other groups opposing the PetroChina deal — whose efforts
to date have substantially contributed to the draconian downsizing of the IPO from $10 billion to
$2.9 billion — will convene a press conference in the Lisagor Room on the 13^th
floor of the
National Press Club at 12:30 p.m. This unprecedented, broad-based coalition will be discussing
their respective strategies and plans for the future. The Chairman of the William J. Casey
Institute, Roger W. Robinson, Jr., who provided critical financial expertise underpinning the
coalition’s efforts will be among those making brief remarks.