in 1931
Standard Oil of California had acquired the rights to the
Bahrain oilfield in the
Persian Gulf and was seeking a partner with market presence in the far east. Rieber made an agreement for joint production with the new California-Texas Oil Company, which also took over Texaco's far eastern market. In 1939, the jointly owned subsidiary returned a total of $12 million to its parents. In common with many other business leaders, Rieber admired the efficiency of the fascist movements in Europe. The
Spanish Civil War erupted in July 1936. Under the January 1937 Neutrality Act, it was illegal to provide credit to either side; Rieber met General
Francisco Franco in August 1936 and agreed to supply the
Nationalists with oil on credit until the war ended. Neither was it legal for American ships to transport cargo to Spain; yet Texaco ships ostensibly bound for
Antwerp,
Rotterdam, or
Amsterdam were given sealed orders, which diverted them to Spain. The oil was still priced as though
Francoist Spain had transported it. Customs agents discovered the scheme, causing a political scandal. In June 1937, President
Franklin D. Roosevelt met Rieber and threatened to embargo future shipments. Texaco was fined $22,000. However, Rieber continued the shipments. He directed his associate at the
Paris Texaco office, William M. Brewster, to relay to the Nationalists intelligence on the
Spanish Republicans, such as fuel amounts, cost, and type. In total, Texaco delivered to the Nationalists 3.5 million tons of oil for a total of $20 million. For his service, Rieber was given the title of Knight of the Grand Cross of the
Order of Isabella the Catholic by Franco. In 1936, Rieber commissioned several oil tankers from the
Deutsche Werft shipyard in
Hamburg, Germany, in return for oil. The
Skandinavia tanker was not complete before the outbreak of
World War II in September 1939. Although the United States was neutral, the Germans did not want to release a tanker that could be used to supply their enemies. Rieber flew to Berlin to negotiate with the German naval officials. He was successful, and Admiral
Erich Raeder allowed the tanker to sail under the flag of Panama to ship oil to neutral countries. In December 1939, Rieber and
Hermann Göring made a tour of factories in Germany. They were flown by Pete Clausen, a
Pan American Airlines pilot. Rieber continued to ship Colombian oil to Germany, despite the British embargo. According to a German secret service report, Rieber was "absolutely pro-German ... a sincere admirer of the Führer." Rieber met Field Marshal
Hermann Göring in 1940 and was given a message from
Adolf Hitler to President Roosevelt, inviting him to support Berlin's plan for a European Union, led by Germany, which would open its doors to the United States. Roosevelt rejected the offer. Rieber also talked with the German agent
Gerhardt Alois Westrick, who was gathering information about American armaments and intentions concerning the European war. After the fall of France, Westrick threw a celebratory party at the
Waldorf Astoria New York hotel on 26 June 1940, attended by senior executives of
IT&T,
General Motors and
Ford as well as by Rieber. Westrick posed as a trade official and made much of the huge trade potential with the new German empire once Britain had been defeated, which would soon be accomplished. Westrick also met with Rieber at his head office in the
Chrysler Building. The British secret service disclosed this to the American press, causing an uproar. Publicity about Captain Rieber's pro-Nazi views began to threaten Texaco's sales. After a stormy meeting in August 1940, the Texaco board of directors forced Rieber to resign. In July 1940,
Life Magazine had published a lengthy profile of Rieber. Reporting his resignation in the 26 August 1940 issue,
Life portrayed him as an innocent victim whose only errors had been to dine with Westrick and lend him a Texas Co. car. ==Later career==